Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 Understanding Demand Shifts for Grain-Based Foods Presented By: Greg Heying, Senior Vice President - Distribution September 28, 2004.

Similar presentations


Presentation on theme: "1 Understanding Demand Shifts for Grain-Based Foods Presented By: Greg Heying, Senior Vice President - Distribution September 28, 2004."— Presentation transcript:

1 1 Understanding Demand Shifts for Grain-Based Foods Presented By: Greg Heying, Senior Vice President - Distribution September 28, 2004

2 2 Current Trend The most recent weight-loss trends have included high consumption of protein and fat, and a low consumption of carbohydrates. The most recent weight-loss trends have included high consumption of protein and fat, and a low consumption of carbohydrates. It is estimated that as many as 25 million Americans have tried the Atkins diet alone. It is estimated that as many as 25 million Americans have tried the Atkins diet alone. This fad is having an effect on the way consumers are eating and the way marketers are thinking about their products. This fad is having an effect on the way consumers are eating and the way marketers are thinking about their products.

3 3 Current Trend 40% of low-carb dieters say that its hard to stay on a low-carb diet for more than a few months at a time. 40% of low-carb dieters say that its hard to stay on a low-carb diet for more than a few months at a time. 42% of those on a low-carb diet say that low carb products are worth paying extra for. 42% of those on a low-carb diet say that low carb products are worth paying extra for. 930 new low-carb products were introduced in the last five years, with most of the new growth in 2003 and new low-carb products were introduced in the last five years, with most of the new growth in 2003 and Estimates on the number of low-carb dieters varies, but ACNielsen research says that about 17% of U.S. households have someone on a low-carb diet. Estimates on the number of low-carb dieters varies, but ACNielsen research says that about 17% of U.S. households have someone on a low-carb diet. Source: Frozen Food Age July 2004

4 4 Eating Trends 1970 Pounds Consumed per person: 1, Pounds Consumed per person: 1,775 Source: USDA/Economic Research Service

5 5 Low-Carb Statistics Overall sales of low carb items were $1.4 billion in 2003.¹ Overall sales of low carb items were $1.4 billion in 2003.¹ Popularity has impacted some category sales.² Popularity has impacted some category sales.² 2003 vs Fresh Meat+18.3 Fresh Meat+18.3 Bacon+10.8 Bacon+10.8 Beef Jerky+20.0 Beef Jerky+20.0 Frozen Meats+16.0 to Frozen Meats+16.0 to Source: ¹ Denver Post ² ACNielsen

6 6 Low-Carb Statistics The low carb industry has created a whole new specialized retail sector. UnitsSizeSKUsMarkets Castus Low Carb Store 24 (43 by year-end) sq.ft states Pure Foods 2 (12 by year-end) 1500 sq.ft. 1300California Country Cutter 1N/A Frozen & refrigerated only California Source: Drug Store News March 1, 2004

7 7 Branded Low-Carb Trend Branded low-carb snack and beverage dollar sales increase. Source: Frozen Food Age July 2004

8 8 Branded Low-Carb Trend Top low-carb brands and lines. Source: Frozen Food Age July 2004

9 9 Branded Low-Carb Trend Volume and sales of low-carb branded items has decreased significantly in the last year and has remained at a steady level. Volume and sales of low-carb branded items has decreased significantly in the last year and has remained at a steady level. Manufacturers are doing item rationalization: Manufacturers are doing item rationalization: Eliminating slow moving items Eliminating slow moving items Creating new items Creating new items

10 10 Low-Carb Sales Growth Sales growth of low-carb supermarket categories for 52 weeks, ending June 13, Source: Supermarket News August 9, 2004

11 11 High-Carb Sales Decline Sales decline of high-carb supermarket categories for 52 weeks, ending June 13, Source: Supermarket News August 9, 2004

12 12 Atkins Impact The low-carb diet is causing companies to shrink as well. The low-carb diet is causing companies to shrink as well. American Italian Pasta Company will eliminate 14% of its workforce and close a factory in Kenosha, WI. American Italian Pasta Company will eliminate 14% of its workforce and close a factory in Kenosha, WI. Krispy Kreme blamed low-carb diets for disappointing first- quarter sales and earnings. Krispy Kreme blamed low-carb diets for disappointing first- quarter sales and earnings. Jays Foods was pushed into bankruptcy as their sales have decreased more than 10%. Jays Foods was pushed into bankruptcy as their sales have decreased more than 10%. Kraft says it has lost sales and recently signed an agreement to put the South Beach Diet trademark on some of its low-carb products which will be disclosed later this year. Kraft says it has lost sales and recently signed an agreement to put the South Beach Diet trademark on some of its low-carb products which will be disclosed later this year. Source: Frozen Food Digest July 2004

13 13 Future High-Carb Strategies The U.S. potato board is launching a consumer education campaign The Healthy Potato, Naturally Nutritious, Always Delicious. The U.S. potato board is launching a consumer education campaign The Healthy Potato, Naturally Nutritious, Always Delicious. The American Bakers Association is considering launching an aggressive public relations campaign to dispel what it considers myths about bread and other grain products. The American Bakers Association is considering launching an aggressive public relations campaign to dispel what it considers myths about bread and other grain products. In April, the Milk Mustache campaign unveiled an ad touting milks weight-loss benefits. In April, the Milk Mustache campaign unveiled an ad touting milks weight-loss benefits. Source: Starch Makes a Stand – USA Today February 2004

14 14 Future High-Carb Strategies Weight Watchers is touting the potatos virtues as part of an educational campaign pushing produce. Weight Watchers is touting the potatos virtues as part of an educational campaign pushing produce. At a recent conference called Healthy Pasta Meals nutritionists and pasta industry executives concluded that pasta is a good carbohydrate that when eaten in proper portions with other foods does not cause weight gain. At a recent conference called Healthy Pasta Meals nutritionists and pasta industry executives concluded that pasta is a good carbohydrate that when eaten in proper portions with other foods does not cause weight gain. USA Rice, a trade association, is trying to figure out ways with its limited budget to save rices image. USA Rice, a trade association, is trying to figure out ways with its limited budget to save rices image. Source: Starch Makes a Stand – USA Today February 2004

15 15 Is This Trend Sustainable? Consumers are notoriously fickle! Consumers are notoriously fickle! In the past decade, more than 2,500 diet books have been published. In the past decade, more than 2,500 diet books have been published. Shifts in consumption based on such diets are most often short-lived. Shifts in consumption based on such diets are most often short-lived. Most nutritionists will continue to recommend a balanced diet coupled with moderate exercise and overall lower calorie consumption. Most nutritionists will continue to recommend a balanced diet coupled with moderate exercise and overall lower calorie consumption.

16 16 Changes are Already Evident Atkins has laid off 20% of its workforce as demand for its packaged goods soften. Atkins has laid off 20% of its workforce as demand for its packaged goods soften. Most of the new items introduced by CPG companies are generating only modest demand. Most of the new items introduced by CPG companies are generating only modest demand.

17 17 The (so far) Universal Truth What consumers say they are doing (diet, exercise, low-carb consumption) is seldom matched by real consumption trends over the long haul.

18 18 What, Then, Is The Next Big Fad Diet? Answer that question, and you can be the next diet guru.


Download ppt "1 Understanding Demand Shifts for Grain-Based Foods Presented By: Greg Heying, Senior Vice President - Distribution September 28, 2004."

Similar presentations


Ads by Google