1. Shopper Insight Report- Oats Category HGCA and VCR² Kent Business School Report

2. Contents Providing Shopper Insights Objectives Data Sharing Restrictions Executive Summary Analysis Appendix

3. Health Warning! The dunnhumby data offers unparalleled breadth and depth but it does not tell us why shoppers behave the way they do Further research is warranted in order to understand the purchasing drivers (e.g. attitudes, perceptions, motivations) before changes are made to the marketing mix (product, price, place, promotion) or resources are deployed for the development of new products

4. Providing Shopper Insights

5. Collaboration between HGCA and the Centre for Value Chain Research at Kent Business School since 2005 Sponsorship of PhD students Access to panel of 1.4 million supermarket shoppers Provide generic and tailor made insight reports for the industry free of charge

6. Centre for Value Chain Research

7. Objectives

8. Provide an overview of shopper behaviour and shopper segmentation for Oat products Identify opportunities for market/product development Highlight potential areas for further research Demonstrate the breadth and depth of shopper insight that is available to farmers and small food producers

9. Data Sharing Restrictions

10. This information is supplied by Kent Business School on the strict understanding that recipients use it exclusively as part of their own marketing and product development activities. Under no circumstances should the information provided be shared with third parties, without our prior consent. Failure to comply with these requirements will result in the organisations involved being denied further (subsidized) access to the dunnhumby data and may jeopardise this service provision for farmers and small food producers in the future.

11. Executive Summary

12. Overall, the oat category value has increased by 11% over the period, with a volume increase of 2%. Across the category as a whole, young families are the strongest performers. Young adults have a tendency to be least attracted to the category. Oats based products enjoy a healthy and positive image with consumers. As expected, healthy and finer foods shoppers are more likely to be attracted by the whole category. Price sensitive shoppers continue to find barriers to buying into the category. N. Ireland and N. Scotland are the regions most attracted to the category, but note that the majority of sales occur in other regions. Penetration rates and frequency of purchase indicate that there are opportunities to further drive sales.

13. Analysis Composition of Oats Category

14. Flapjacks Oat based Biscuits Oatcakes Oat based Breakfast Cereals Hot Cereals RTE Cereals Oat Cereals Bars

15. Analysis Key Measures

16. Category Share The share of sales for each product sub-group as a % of total category sales (Highlights the relative importance of different product sub-groups) Sales Growth Year on year growth of sales, by volume and value (Illustrates performance of different sub-groups over time) Penetration % of shoppers who have made at least one purchase in the last 52wks (Indicates scope for attracting new buyers). Frequency of Purchase The average number of times a purchase as been made in the last 52wks (Indicates scope for increasing product usage) Repeat Purchase Rate % of shoppers who have made at least two visits to the category in the last 52wks (Gives an indication of product performance and shopper loyalty)

17. Key measures: oats Key measures from Kent Business School: 52 weeks from 07-Jan-08 to 04-Jan-09 Source: © dunnhumby 2009

18. Weekly sale trends: oats (52 wks to 04 Jan 09)

19. Analysis Shopper Segmentation

20. Shopper profiles are presented in index form, with 100 representing the average for all supermarket shoppers Over-indexing segments purchase a disproportionately high share – they find them appealing Under-indexing segments purchase a disproportionately low share – they find them less appealing. In looking for potential target segments (those which are under or over performing) attention is drawn to those which over-index or under-index by at least 10% Further segmentation, by geo-demographics and detailed lifestyle can be provided upon request

21. Strongest appeal for Young Families Lifestage segmentation: oats – total (12 wks to 16 Nov 08)

22. Healthy shoppers attracted by the category as expected Mainstream and Price Sensitive under-perform in this category Lifestyle segmentation: oats – total (12 wks to 16 Nov 08)

23. Results are strongly skewed towards Northern Scotland even though the majority of sales occur in London Regional segmentation: oats – total (12 wks to 16 Nov 08

24. Consistent appeal for Young Families across groups Lifestage segmentation: oats cereals – total (12 wks to 16 Nov 08) RTE cereals under-perform in their appeal to Pensioners shoppers

25. Finer foods and Healthy shoppers are the most attracted to the category RTE cereals under-perform in their appeal to Price Sensitive shoppers Lifestyle segmentation: oats cereals – total (12 wks to 16 Nov 08)

26. Results are strongly skewed towards Northern Ireland even though the majority of sales occur in London Regional segmentation: oats cereals – total (12 wks to 16 Nov 08)

27. Older adults are most attracted to oatcakes Pensioners and Older Adults not attracted by the snacking format Lifestage segmentation: oats products (12 wks to 16 Nov 08 Young adults are least attracted to oatcakes

28. Finer foods and Healthy shoppers are the most attracted by the category Lifestyle segmentation: oats products (12 wks to 16 Nov 08)

29. Results are strongly skewed towards Scotland Regional segmentation: oats products (12 wks to 16 Nov 08)

30. Appendix

31. the dunnhumby data 2yrs of weekly supermarket purchases 1.4 million shoppers Representative of 40% of UK households Over 30,000 food products Segmented by; Lifestage (young adults, young families, older families, older adults, pensioners) Lifestyle (Up-market, Mid-Market and Less Affluent shoppers) Region (13 TV advertising regions)

32. The dunnhumby data: Lifestage Segmentation Lifestage segment Young Adults Older Adults Young families Older families Pensioners Mixed Age & family Adults aged 20-39 with no children Adults aged 40-59 with no children Adults with all children under 10 Adults with one or more child over 10 Adults over 60 with no children Multigenerational households % shoppers 16% 14% 15% 16% 9% 28%

33. The dunnhumby data: Lifestyle Segmentation Lifestyle segment Finer Foods Healthy Convenience Price Sensitive Mainstream Traditional Key Characteristics time conscious, enjoy luxury products and are willing to experiment interested in organic, environmental benefits, low fat/sugar and calorie conscious regard food as fuel, are busy and rely heavily on the microwave look primarily for value and rely on staple foods enjoy the art of cooking but rely on a fixed shopping list so less likely to buy on impulse % shoppers 17% 9% 22% 16% 26% 10% have broad tastes, favour established brands and are influenced by the needs of children

34. The dunnhumby data: Regional Segmentation ISBA (TV advertising) regions North Scotland – STV North (Aberdeen, Dundee) Central Scotland – STV Central (Glasgow, Edinburgh) Borders – Border Television North East – Tyne Tees Television North West/ Lancashire – Granada Television Northern Ireland - UTV Yorkshire – Yorkshire Television Midlands – Carlton Central East England – Anglia Television London – LWT Wales and the West – HTV Wales & HTV West South and South East – Meridian Broadcasting South West – Carlton West Country

35. The dunnhumby data: Regional Segmentation Region London Midlands Southern England Lancashire (NW) East of England Wales & the West Region Scotland Yorkshire South West North East % shoppers 20% 15% 11% 10% 9% % shoppers 9% 8% 4% 3% Northern Ireland

36. Contact Details: HGCA For further Information about how your business can obtain more information like this please contact: Rachael Arding HGCA Market Development Project Executive Email: Rachael.Arding@hgca.comRachael.Arding@hgca.com Telephone: 020 7520 3930

37. Contact Details: VCR² and Kent Business School For further information about the Centre for Value Chain Research at Kent Business School, please contact: Melanie Felgate Centre for Value Chain Research, Kent Business School, University of Kent, Canterbury, CT27PE Email: m.felgate@kent.ac.uk Tel: 01227824766 Website: www.kent.ac.uk/kbs/cvcr

38. Contact Details: VCR² and Kent Business School For further information about the Centre for Value Chain Research at Kent Business School, please contact: Professor Andrew Fearne Centre for Food Chain Research, Kent Business School, University of Kent, Canterbury, CT27PE Email: a.fearne@kent.ac.uka.fearne@kent.ac.uk Tel: 01227824840 Website: www.kent.ac.uk/kbs/cvcrwww.kent.ac.uk/kbs/cvcr

39. Thank you