GROCERY INDUSTRY, PRIVATE BRANDS AND ITS EVOLUTION Joe McKie, Vice President, Private Brands Food Marketing Institute.

GROCERY INDUSTRY, PRIVATE BRANDS AND ITS EVOLUTION

Joe McKie, Vice President, Private Brands

Food Marketing Institute

AGENDA

1. Provide a brief description of FMI 2. Share FMI’s private brands efforts3. Give a high-level view of the evolution

of our industry and private brands4. Demonstrate what’s next for private

brands

2

FMI Members Include…FMI Members Include…

THE ASSOCIATION

FMI conducts programs in public affairs, food safety, research, education and industry relations on behalf of its nearly 1,250 food retail and wholesale member companies in the U.S. and around the world.

More than

25,000retail food

stores

More than

25,000retail food

stores

Regional firms

Regional firms

$650billion

combined annual sales

volume

$650billion

combined annual sales

volume

Nearly

22,000pharmacies

Nearly

22,000pharmacies

260companies from

more than

65countries

260companies from

more than

65countries

Multi-store chains

Multi-store chains

IndependentoperationsIndependentoperations

330associate members

that include retail

supplier partners

330associate members

that include retail

supplier partners

3

FMI SERVES AS THE VOICE OF FOOD RETAIL

Food Safety and Defense

Food Safety and Defense

Government

RelationsAdvocacy

Government

RelationsAdvocacy

Educational Conferences

and eLearning Platforms

Educational Conferences

and eLearning Platforms

Information Services and

Business Intelligence

Information Services and

Business Intelligence

Industry Networking

and Collaboration

Industry Networking

and Collaboration

Industry and Consumer Research

Industry and Consumer Research

Health and Wellness

Promotion

Health and Wellness

Promotion

Social, Environmenta

l and Sustainability Advancement

Social, Environmenta

l and Sustainability Advancement

Communications Resources and Support

Communications Resources and Support

Industry Attractiveness

and Awareness

Industry Attractiveness

and Awareness

Private BrandsPrivate Brands

FMIFoundation

FMIFoundation

4

Private Brands

TOTAL STORE COLLABORATION

Asset Protection Fresh Foods Supply Chain Technology

Engagement in the areas of loss prevention, risk management, workplace safety, crisis management, technology, and overall asset protection

Emphasis on perishables and offer center-store assortments that differ from those of traditional retailers—especially in the areas of ethnic, natural and organic

Global forum to exchange ideas and information on future trends, current techniques and best practices to strengthen the performance of the Private Brands industry

Focus on logistics, transportation, distribution, warehousing, supply & demand planning, forecasting, purchasing and technology across the entire supply chain

Approaches to mobility, payments, data security, cloud computing, in-store innovation and social commerce

5

FMI PRIVATE BRANDS GROUP

•Provides leadership and advocacy

•Supports a global forum to exchange ideas – knowledge and education

•Promotes collaboration on non-competitive industry issues

•Acts as a platform, supporting strategic versus transactional collaboration between retailer brand owners, suppliers and trading partners

6

GROCERY INDUSTRY AND ITS EVOLUTION

The Evolution Private BrandsOf Terminology

Generic Private Label

7

GROCERY INDUSTRY AND ITS EVOLUTION

1995-2012

38%growth in sales

38%growth in sales

77%growth in capacity

77%growth in capacity 8

Source: Food Retailing 2013: Tomorrow's Trends Delivered Today

GROCERY INDUSTRY AND ITS EVOLUTION

Source: U.S. Grocery Shopper Trends 20129

GROCERY INDUSTRY AND ITS EVOLUTION

10Source: Booz & Company 2013 Consumer Trends Survey;

Booz & Company analysis; Nielsen analysis

GROCERY INDUSTRY AND ITS EVOLUTION

11

Private Brands can make and are making that connection…

likes and dislikes

likes and dislikes

Tastes

and

distaste

sTastes

and

distaste

s

Wants and

WishesWants and

Wishes

GROWTH AND ACCEPTANCE OF PRIVATE BRANDS

Sources: Nielsen/PLMA , GfK/Roper, Ralcorp, Supermarket News

12

TRENDS AND CRITICAL ISSUES

13

Process is Critical

Contact me: 202-220-0719

[email protected]

FMI’S PRIVATE BRAND RESOURCE

14