QMS Marketing Day 2016

Click here to listen to Jim McLaren sum up

Laurent Vernet chaired the day and his remarks he said that there was a need to pause and look at the bigger pictures. Need to consider the options and he stressed for ALL retailers.

Promotion campaigns concentrate on Lamb and Beef, no pork at moment but hope to in 2016.
Wham Bam Lamb – based on consumer research. Aimed at light lamb eaters, focused on families, not old fashioned. Always remain relevant and need to evolve with the consumer.
Need to deliver what the consumers want. Tasting events

Promote the brand and QMS will work with any retailer who supports the brand.
Claimed 6% increase in Scotch Lamb sales v 2% UK and an increased frequency of lamb purchases.

Campaign in 2016 February and March for Scotch Beef.
50% of market is south of the border.
Target those who can afford to pay a premium. Campaign in London will address the consumer who is always on the move. Advised best access is to the commuter. Butchers will have steak promotion. In February the creative will focus on Scotch Beef PGI steak to coincide with Valentine and in March the creative will focus on Scotch Beef PGI roasting cuts to coincide with Mothers' day and Easter.

10000 farmers behind the brand. Latent called it the “People's brand”, the “brand of the Nation”.

Michael Freedman, Senior Shopper Insight Manager at IGD
Shoppers benefiting from weak inflation. Household wealth is back at pre crisis levels so in theory should mean greater confidence and better trading conditions. Not happening yet because financial instability and impending referendum on EU membership. By 2020 it is possible that could be out of EU and UK not in existence.

16 consecutive months of food and drink deflation. Unheard of since World War Two. It has impacted on different categories at different times.

Multichannel World
For shoppers this is just shopping. Fewer shopping in traditional way. Less than 6 in 10 now claim to be using a supermarket. Discounter –

Online grocery shopping growing. Key market is London because online saves time. 4 in 10 in London say shop for fresh red meat. This is 30% in Scotland. People stop using online shopping sites because it lacks inspiration and they get bored! Good example Jimmy's Farm – focus on quality and provenance. Website has an instore feel.

Shopping more often has doubled. Average 26 shopping trips every month. Growth in trips to convenience stores and Discounters. Reasons – monetary but also for freshness and specialist products. Smaller households, lack of cooking skills.
Fresh red meat double number in Aldi and Lidl. Less saying using supermarkets. Meat is a destination area for Aldi, heavy emphasis on quality.

29% of shoppers say they are buying less in larger stores. Radical change ahead here. Top 5 requests:- incorporate butchers into larger stores. They have introduced “everyday aisles”.

IGD Big Debate in 2015 highlighted ideas for instore butchers and farmers markets.

For years focus was on saving money but now changing more to quality. Figures:- A bit more focused on quality is good news – 9% quality interest in Scotland.

Quality is more important for fresh red meat.
How do shoppers define quality? taste, country of origin, breed, quality assurance, tenderness, cut of meat. Shoppers are still willing to pay more for quality – 62%.
London consumers don't buy Scotch Beef because they want English and British.
66% in Scotland willing to pay more for Scotch Beef steaks.

Trust
Still low in London. Memory of horsemeat scandal but trust in farming is higher in Scotland because Scots are closer to farming.
78% of Scots trust Scotch Beef.

Recap
Key Takeouts
Play to the Scotch brand strengths in a multichannel world
Know how to cut through in terms of communicating quality in store
Next food scare might be just around the corner.

Kantar Worldpanel – Katherine Shade, Consumer Insight Director, Kantar Worldpanel
7% now eating out more, increased spend on the go.
Premium Beef is a growing market. 25% goes into Italian food – minced
13% into steaks, 13% into roast dinners
Premium is stronger with older customers.
Mince opportunity: right instore messages.
Encourage loyalty of consumers. Loyal is at least 50% comes the one retailer.

Premium mince 45% is made into Italian food – lasagne and spaghetti bolognese. Emphasise convenience of these dishes.

How do you motivate to choose premium? Give them what they care about. Lower fat so healthier.

Steak opportunity: attracts an older audience. 64% is a couple occasion. Is the ultimate fast food, good message to push.

Latest Protein Changes – Nathan Ward, Business Unit Director for Meat, Fish and Poultry at Kantar Worldpanel

Trends in Grocery – supertanker that doesn't change quickly. Frequency of shopping up from 221 to 223 per annum. Average basket flat, little change to top up shopping. Weekly shop tends to be a two weekly shop. Cycle from 2005 trading up, down, up down and now to buying more.
Store choice: hard to save a lot of money. 75% of total. 3% down, 12% up at Discounters, 8% up Internet, 1% down both in convenience and High Street.
Scotland: Supermarket 4% down, Internet +10%, Discounters +12%
Discounters are becoming more mainstream. More about main shop and less about top up.
Good quality products at good prices. Fact: falling prices. Big four reinvesting in price cuts, means slow retailer growth. Search for justified premium. Space in stores behind pushed, more Cafes, Amazon lockers, dry cleaners

Protein: red meat is £3.5bn market. Average shopper spends £145 per year on red meat.
Over last five years red meat slight decline. Fish not changed much but 7% growth in poultry.
Fastest growing categories offer new convenience with limited preparation making them quick and easy to cook. Growth is not in primary products but through solutions – the new convenience. Sliced cooked meat market sliding. Fresh red meat decline is existing shoppers spending less and moving spend into chilled ready meals. Choose solutions that make life easier. Who are those buying less?

Chilled Ready Meals worth £1.5bn. Up 6.2% but pork sees the largest under trade due to its low presence in ready meals. Biggest is chicken. Red meat is losing out and should be a worrying omission because the consumers buying these are not buying or getting a taste for red meat.
Pulled Pork is fastest growing product, attracting newer and younger market. Empty nesters and retirees driving this growth. Scotland is underperforming on pulled pork. Meatballs is an area of growth.
Decline of red meat is not a meat issue its because consumers want meal solutions.

Christmas
Lamb +4%, Chicken +3%, Fish +2%, beef +1% especially joints.
Winners were choice and convenience. Turkey crowns and joints +0.2%
Losers: Turkey -4%, Gammon -2%. Move away from tradition. Tesco -6%.

Death of big four is overstated.

Concern of consumers?
Older shoppers would say welfare and ethics are important but for others this is not on their agenda, convenience and taste more important. More interested in quality.

Can Discounters successfully promote quality while portraying an image of value and little or no premium? Is there devaluation of the brand?
Research detailed in Discounters shoppers – top request is more branded products. Challenge given size of stores. A positive for the stories, for the brand lots of examples of success. Valuable thing for some brands. Different price for a different product. Now discounter carrier bags acceptable, now mainstream.

Branding – Maddy Sim, Strategy Director, Dentsu Aegis
What we do? Stop, look, listen; question current tactics, understand the landscape,
First look at the audience, what is that audience doing, what kind of media are they engaging in. Who do they trust, what messages are in the marketplace, what are the trends. The brand – what is understood of it. Finally the journey, everyone is online expecting immediate answers. People are looking for recipes etc at the point of purchase.
Media Convergence:- one stop shop for all aspects of a news story. Think about the customers more than the channels and when they want us. Playing into this is the content. People used to control this but online has allowed everyone to create content. Some are willing to accept that more than traditional media sources.

Everyone is more demanding.
A) personalised product e.g whisky, shoes, Coke even has your name on it. Would customers want cuts of meat sized to their dietary requirements?
B) delivery demands when next day is just not enough. (anticipatory demand)
C) instant demands, instant chat online.
This has all led to 'Brand Commerce' where all messages need connected.

So what does this mean about Scottish Meat Industry.

We leave a lot of data trails because of digital devices. Google trends tells you how people search for things. Gives a wealth of information. Trend for importance of provenance. Over 65% want to source British meat. BUT convenience is also key to the consumer. Ingredient boxes make meals easy. Other three options:- easy delivery, meal plans tailored to your diet to your door, next step could be chef deliveries to your door (west coast USA).
You are what you eat trend continues to grow. Focus on nutritional value of meat and high protein.
Dining at home is being made more of. Weekday meals being made more of by banning mobile devices from the table at eating time.

Journey – where are the consumers?
It is important to recognise that consumers are used to getting information delivered to them in very easy and simple way for them to understand.
There are 'breakouts' of certain formats of content in food e.g Tasty Videos on Facebook, Charts,

What drives consumers to search for brands? Shares on social media and word of mouth, video recipes, advertising, offers. Health, inspirational content. This all comes together in a micro moment that determines what you are going to be cooking. Your consumer expects you to be there at anytime and they expect you to be there immediately. Recipe searches peak at 5pm and at weekend 11am and 4pm. Audience is looking for inspiration online. At point of sale 54% go into shops with no idea of what they are going to buy. Just one in four plans meals ahead when doing weekly shopping.

Format v media. Extend things you do online. Engage in new platforms and create videos to connect with your customers.

Key changes in retailing – Victoria Santini Director of Consumer Insight, IGD
This was a world tour of examples of trends. Retail outlook for next five years suggests growth. Convenience, discount and online will drive that growth. Convenience will slow as it matures. Large stores outlook is one of decline although they are over the worse.
Discounter is no longer the correct term for these stores inc BM Bargains, Poundland as well as Aldi and Lidl. They now look more like supermarkets. Netto piloting partnership with Sainsbury. There will be a constant pace of evolution of ranges and quality in the discount channel.

Habits are forcing changes in larger stores but the will be the dominant channel. Significant reduction in new space, sales moving to home delivery and click and collect.

Where is the limit of online? U.K. is the second biggest international market online forecast to grow to £5bn over next five years. China is largest mainly mobile device accessed and on a scale of its own.

The re-invention of stores:-
Bringing the food experience into the store. Increasing interest in international cuisines. Give shoppers another reason to visit. Examaple – Danish supermarket with butcher in store and selling ready prepared vegetables to appeal to that going home to eat mission. Foodservice will be in stores to increase appeal as a destination e.g Tesco and Giraffe.

Can shoppers be engaged at the shelf through iPads? This is not what shoppers are looking for. They want inspired. They want right range, price and quality but they want to enjoy the shopping experience. City Super in China had a demonstration kitchen and food clubs to inspire and inform the shopper. They have a calendar of events where producers and fresh food suppliers are invited to demonstrate.

The Great Wall of Chocolate. Theatre from store in Toronto tapping into the fun element and making the product the hero. Others create theatre by making popcorn on store or Bees making honey.

The growth of top up shopping is driven by convenience and value.
Mission based solutions
Big packs of ready to cook. Not hiding product behind packaging.
Convenient solutions: packaged fresh meat with vegetables.

Inspiring missions online: Hello Fresh offer recipe cards.
Communicating quality:
Engagement in the aisle: create more interest in the aisle
Provenance has grown in importance. Not about local, country of origin.
Trust and transparency:
Lobster cam – bring the personalities out to showcase the products they prepare.
Community engagement – bring children in to talk about provenance and quality.

Points to consider
Retailers must differentiate to succeed in a crowded marketplace

Recent evolution in the Scottish food industry – Amanda Brown, Kantar Worldpanel.
Only 9% of total expenditure in Scotland in 2015 was spent on food and drink. One in 5 of the Scottish shoppers shop in butchers. Tesco share in Scotland is 29.7%.
Over half of spend on red meat in Scotland is from retired and empty nesters. Younger families are less important but take care to ensure you have a market in 20 years time.
Only 13.5% of Scots shop online representing only 4% of food and drink spend.
Tesco share in Scotland is 29.7%.