Booz & Company Chicago July 19 th, 2011 Shopper Marketing Opportunities for Store Brands

Booz & Company 1 The Shopper Marketing opportunity: influence malleable brand preferences along the full path to purchase 1 Booz & Company Source:Booz & Company, SheSpeaks survey of 2,200 shoppers completing post-shopping survey Timing of Brand Selection (% of total items purchased) Item Not on List, Impulse PurchaseItem on List, Brand Selected in StoreBrand on List, Purchased in StoreBrand on List, Switched in Store Room to influence brand selection in the aisle Source:Survey of 3,600 shoppers for Shopper Marketing 3.0 study conducted Fall 2009 by Booz & Company In collaboration with Grocery Manufacturers Association Room to firm up preference before the store Shopper marketing: building insights about consumers when they are in shopping mode and applying these insights to influence their purchase decisions

Booz & Company 2 Shopper marketing spending already accounts for a significant share of the A&P mix and is one of the fastest growing spends Booz & Company Shopper MarketingShopper MarketingShopper MarketingShopper Marketing & Co-Marketing 9.0% Consumer PromotionsConsumer PromotionsConsumer PromotionsConsumer Promotions 0.6% Trade PromotionsTrade PromotionsTrade PromotionsTrade Promotions -0.8% Digital MediaDigital MediaDigital MediaDigital Media 6.3% Traditional MediaTraditional MediaTraditional MediaTraditional Media 0.6% CPG Marketing Mix 2010 Spending, Growth Advertising: $130Bn 2.4% CAGR Promotions: $616Bn 2.1% CAGR $338B $198B $108B$22B$60B Size Source:eMarketer, AdAge, GMA, promoMagazine, Booz & Company client experience

Booz & Company 3 Shopper marketing evolving as part of an integrated approach Stages of shopper marketing evolution “The Shift to Shopper” Distinguishing between consumer and shopper “Shopper Solutions” Insights and solutions tailored to the shopper’s occasion “The New Integrated Marketing” Using the full range of marketing activities with store back insights Time Evolution of Shopper Marketing Value drivers Category Growth Sales Lift Closure Rate Basket Size Engagement & Branded Experiences Marketing ROI  Trade overlay  Buy-in to retailer events  Planogram design  Insights to inform retailer calendar (e.g., shopper psychology and need states)  Multi-brand and multi- manufacturer programs (e.g., spring flu, summer BBQ)  Focus on owned and earned media  “Store back” filter for creative  Consistent themes, customized elements 3 Booz & Company

4 At its best, it plays a complementary role in reinforcing brand attributes and motivational “cues” along the P2P Pre StoreIn the StorePost-Purchase  Develop emotional connections with consumers’ motivations  Be “relevant” to consumers’ lives  Reinforce shoppers made the “right decision” and sustain branded experience  Grow “loyalty” and “advocacy”  Build insights about shopping mode to influence decisions  “Stop, hold, close” in the store  Catch consumers at moment when shopping behaviors begin  Target shopping and lifestyle “triggers”  Reinforce equity and motivational “cues”  “Activate” equity with consistent imagery  Influence next trip with cues that tap into motivations  “Reward” behaviors consistent with brand Brand Marketing Shopper Marketing Traditional FocusExpanding Focus 4 Booz & Company

5 A broad set of platforms can be integrated into the playbook, increasingly via digital vehicles Apps49% Thematic Content47% Search40% Social Media37% Relationship Marketing 30% Deals19% Displays & In-Store Advertising 17% Example Digital Vehicles by Platform In store video, kiosks, scanners Direct to card, e-circular E-newsletter, personalized storefront WOM, reviews, branded community Sponsored results, virtual display Retailer sitelet, how to video Barcode scanners, shopping lists Adoption of Shopper Marketing Platforms “On Average, to what extent are you using the following shopper marketing vehicles?” Never UseUse 5 Booz & Company Source: Booz & Company analysis for GMA Shopper Marketing 4.0 Study

Booz & Company 6 Unlocking the potential of shopper marketing capabilities requires sustained commitment Shopper Marketing Capabilities Shopper Insights 1 Retailer Intimacy 2 Creative Development 4 Program Execution 6 ROI and Brand Health 7 Strategy and Brand Development 3 Platform Design and Collaboration 5 Holistic Capability-Building Reliably and consistently delivering a distinctive outcome by applying processes, tools, knowledge, skills, and organization ProcessesTools Skills Knowledge Organization Outcomes  Insights across seasons, occasions, formats  Strategies that integrate across advertising & promotions mix, across the full P2P  Scalable platforms with clear playbook for where to focus customization efforts  Larger share of programs measured with insights incorporated into brand planning 6 Booz & Company National Brands specific Source: Booz & Company analysis for GMA Shopper Marketing 4.0 Study

Booz & Company 7 What does that mean for store brands? Strengths 7 Booz & Company Challenges  Full transparency / ownership of consumer purchasing data  Higher speed to market as the owner of the “theater”  Flexibility to pilot & run shopper marketing initiatives  Competing internal agendas  Strained funds and collaboration with national brands  Resources vs. national brands  Misaligned metrics (sales vs. margin)

Booz & Company 8 Example Calendar of Events for ConAgra “Seasons of Mom” Opportunity #1: Build own insights to tailor the events calendar and marketing messages for greater effectiveness Post Holiday SpringSummer Back to School October Fling Holiday January, FebruaryMarch, April, MayJune, July, Mid-August Mid-August, September OctoberNovember, December Nesting, decompressing after stress, getting back into routine, eating out less High energy, more time outdoors, senses awakening, reconnecting with friends Freedom, looser schedules, outdoor activity, no rules, fun Overwhelmed, balancing schedules and tasks, new routines Steady routines, family time, creativity, eye on the holidays Joyful traditions, extravagant parties, Fun pulling it off “Little Extras” campaign featuring brands in occasions unique to season with emotional connection around reduced stress Make mom a “Financial Hero,” give her good deals on easy-to-make, lighter meals that are easier to eat in shift “Anytime Entertaining” with focus on being prepared for informal parties “Prepare for Success” campaign delivers on need to save time and money while make family advantaged “Creative Comfort Food” leverages mom’s change in cooking techniques and menu, providing relevance for brands “Time to Celebrate” focuses on brands that meet high expectations for holiday events

Booz & Company 9 Category Solutions  More effective cross- category merchandising  Dial Flu Season (with Clorox and K-C) 9 Booz & Company Discussion  Leverage advantageous position of “owning the theater” to access consumer data and ensure rapid cycle time  Work with national brands to develop co-promoted events when applicable  Deliver much better execution for shopper marketing events (compliance, quality)  Leverage test & learn opportunities to define right playbook Opportunity #2: Serve as “anchor tenant” for category solutions

Booz & Company 10 Opportunity #3: Leverage digital to drive traffic and add call to action to in store displays and packaging 10 Booz & Company  Leverage loyalty database for targeted offers  Communicate via shoppers’ preferred channels (e.g., , mobile, social) Deals Embedded in Ads Database MarketingMobile Call to Action In Store Paid Search & Digital Shelf

Booz & Company 11 Opportunity #4: build a learning agenda with waves of pilots  Assess data environment and lay out a road map to build the required capabilities and discipline to systematically prioritize opportunities  Bring external experience and expertise on the analytical and managerial dimensions of leveraging data sources for online shopper insights  Use in-house data repositories to develop hypotheses and mine the data for insights that can be used to filter opportunities in terms of impact and doability  Engage the organization to select sets of pilots that can be launched in waves to validate opportunities and build moment around the business case  Define the new data, analytics and processes required to operationalize learnings from the pilots and embed them into way the various parts of the organization get things done  Provide a perspective on key capability levers (e.g. talent, processes, metrics, technology) required to cultivate a stronger culture of innovation Building the Learning Agenda for Shopper Marketing 11 Booz & Company

12 Putting it all together — What to do “Monday morning” Suggested Areas of Focus Redefine Approach for Insights to Enable More Integrated Planning Across Path to Purchase Build the Winning Ecosystem — Lead Your Partners, Build the Talent, and Score Results Define Strategic Ambition and Capability Gaps Shift from “Simultaneous Equations” to “Waves of Pilots” Booz & Company 12