1. UAE Challenging Times

2. UAE: YEARS in a GLIMPSE …
INTRODUCION OF SUGAR TAX –Impact on FMCG as Beverages and Cigarets tax introduced
OIL REVIVAL
Speculation over producer to support prices amidst a crude gult
ANIEXITY
Drop in oil prices below $50
Saudis fear bonuses may not survive in an era of cheap oil.
Rise of property rental prices in UAE
2016
IMF revises its GDP forecast downwards
QATAR Embargo
UAE GOVT INITIATIVE
Announce new visa regulations for investors ans specialists
OIL REVIVAL
Oil prices begin to show signs of revival
YEMEN WAR
Civil War draws attention
AUSTERITY MEASURES
Scaled back allownces
5% VAT IMPLEMENTATION
Q1 15
Q2 15
Q3 15
Q4 15
Q1 16
Q2 16
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
Q3 18
Q4 18

3. UAE FMCG market- recovered in 2018 After a drop in previous year
VAT
Sugar Tax
All of the topline trends seen have clearly impacted on the grocery retail landscape and we have seen inflation in FMCG for the first time in several years
We know that shoppers are rationalizing their expenses, optimizing their trips, comparing prices and aggressively seeking out promotions
Key Highlights:
FMCG has observed a significant positive growth in value and volume terms in Q3-18 following the slump in Q3-17
However the growth which continues into Q4-18 is not enough to offset volume declines in the earlier quarters of the year: as a result consumption volumes remain down in 2018 as a whole
The impact of taxation is observed in Q3-18, but in Nov-18 the impact is less
New policies introduced by UAE Government e.g. visa reforms and ease of doing business has boosted consumer confidence and supports economic growth
The market maintaining a new normal where the value growth is still coming from price increases
Source: Nielsen Growth Report

4. all categories drove growth in FMCG
2017
2018
+3.1%
22.9 Bill. AED
23.7 Bill. AED
77%
Food
23%
Non-Food
FMCG SPLIT
Overall Value
+3.4%
+1.9%
BASKET CONTRIBUTION
+1.3%
+3.8%
+3.8%
+3.6%
+0.6%
Source: Nielsen Retail Index ending with Dec’18

5. PROMTIONS.. THE NEW NORMAL !

6. UAE is NOW one of the TOP PRICE SENSITIVE COUNTRIES in the world
GLOBAL | REGULAR PRICE ELASTICITY |
Source: Price and Promo and Everyday Pricing Analytics 2018 *Average of 36 countries analyses

7. 47% OF UAE FMCG SOLD ON DEAL
UAE | FMCG | % VOLUME SOLD ON DEAL | 2018
+2.5 pts vs 2017
Source: Nielsen Everyday Analytics 2018 & UAE Promo Pressure on 24 basket categories

8. TEMPORARY PRICE CUTS TAKING OVER
UAE | % PROMO PRESSURE BY PROMO MECHANIC | MAT AUG
Source: Nielsen Promo Pressure 2018, MAT AUG17, MAT AUG18

9. MODERN TRADE HAS CONTINUED TO GROW WHILE TRADITIONAL TRADE IS DECLINGING - MAINLY DRIVEN BY PROMOS IN mt
Value % Chg
Value % Share
% Chg
Pharmacy
Self-Service
Traditional Trade
Modern Trade
Hypers & Supers
+5.1%
+0.1%
-1.2%
-0.3%
-2.0%
-1.1%
+5.4%
+1.3%
Total UAE +3.1%
MAT Dec-17
MAT Dec-18
Source: Nielsen Retail Index | MAT Dec-18

10. 39% OF FOOD SALES DONE ON DEAL
20% AVERAGE DISCOUNT TO END SHOPPER IN FOOD CATEGORY
80%
OF THE CONSUMERS REGULARLY BUY DIFFERENT BRANDS ON PROMOTIONS
Source: Nielsen Promo Pressure 2018

11. FOCUSING ON EDIBLE OILS

12. EDIBLE OILS SEGMENTS CONTRIBUTION
Palm & Veg and Corn Oil have seen a significant decline , While blended oil has become the second most important segment
Source: Nielsen Retail Audit

13. The total no. of brands within Soft Oils grew by an avg 33% b/w 2013 & MAT FEB19, while the top 9 brands’ contribution shrunk by 12.9%.
Number of Soft Oil Brands
Share Contribution of TOP 9 same brands (Value)
-12.9
+33%
Price Per Liter of Soft Oil segments
Sunflower crude prices
Soyabean crude prices
Olein crude prices
All Prices are CIF
The price decline trend of soft oil segments can be seen from 2013 onwards till date
Source: Nielsen Retail Audit and Oil World

14. Contribute to 80% of Sales
ON AN AVERAGE, 9% OF OILS SKUS CONTRIBUTE TO 80% OF VOLUME SALES, WHILE 84% OF OILS SKUS CONTRIBUTE TO ONLY 10% OF SALES
% of SKUS
No. of active SKUS: 1722
83.6%
7.4%
3.4%
3.3%
9% of SKUS
Contribute to 80% of Sales
2.2%
Source: Nielsen Retail Audit

15. 62% OF VOLUME WAS SOLD ON DEALS
COOKING OIL | % VOLUME SOLD ON DEAL | MAT AUG 2018
Source: Nielsen Promo Pressure 2018

16. 94% 11 2.95 Ltr 32.8 Ltr Penetration Frequency Trip Size Volume per HH
94% of UAE households purchased Edible Oils once a month, at an average of 3L per shopping trip in the last 1 year….
Growth vs. LY
Penetration
% of HH purchasing Edible Oils in last 12 months
94%
1.5
-0.9
1.4
0.6
Frequency
Number of times purchased last 12 months 11
Trips in a year.
Trip Size
Volume purchased in each trip
2.95 Ltr
per trip
Volume per HH
Amount of volume per household
32.8 Ltr
*UAE Kantar In-home panel 16

17. KEY LEARININGS
Price Is No Longer A Differentiator. The Consumer Now Expects Promotions And Isn’t Excited By The Same
Promotions Don’t Encourage People To Buy More In The Long Term
Increasing The Number Of SKUS has not Contributed To Category Growth
Penetration is almost 100% among the people who are cooking
Reduced Number Of Trips Means Fewer Touch Points With The Shopper
Stock-Up Doesn’t Mean Increase In Consumption, It Only Prepones The Purchase

18. Implications For Manufacturers1 3 5
There is more than 1700 Active SKUs – Need to cut the tail and keep relevant SKUs that drive category growth
While price & promo are important; it’s no longer a differentiator.
Explore other marketing levers to establish a stronger “reason to buy”
Promotions have become a norm
Focus on Promos which leads growth for category and manufactures 2 4
Category Lacks Differentiator Brands
Innovate & Provide Value Added Products To Generate Higher Value
Promo Intensity Is Eroding Value Margins-
Efficient promotions: less frequent and deeper discounts

19. THANK YOU