Noodles, Rice and Pasta - UK - July 2009

Issues in the Market

• Key themes
• Definition

Future Opportunities

• If the consumer can’t go to Asia… Asia will come to the consumer
• Targeting the elderly
• Pasta, re-invented (or simply re-explored)

Market in Brief

• Buoyant market…
• ... but with recession still a concern
• Evolving tastes and health-conscious consumers
• Growth categories and NPD
• Competition heats up
• Consumer findings
• The future

Internal Market Environment

• Key points
• Consumers still paying for 2008 rice shortages
• Basmati market tackles supply limitations
• Bumper wheat crop brings an end to pasta shortages
• Eating in is the new eating out
  • Figure 1: Trends in healthy lifestyles and eating habits, 2004-08
• Health concerns focused on elderly
• Potatoes lose out to rice and pasta
  • Figure 2: Quantities of household purchases of pasta, rice, noodles and potatoes, 2004-07*

Broader Market Environment

• Key points
• Opportunities for growth
  • Figure 3: Trends in the age structure of the UK population, 2004-14
• Rising numbers of ABs will boost total and premium sales
  • Figure 4: Structure of the UK adult population, by socio-economic group, 2004-14
• Ethnic population growth drives branded rice sales
  • Figure 5: UK ethnic population, by ethnic group, April 2001
• Scrutiny of salt and fat content
• • Figure 6: Projections of overweight and obesity prevalence among UK adults, by gender, 2003-50

Strengths and Weaknesses

• Strengths
• Weaknesses

Competitive Context

• Key points
• Mainstream appeal for pasta and noodles
  • Figure 7: Trends in usage of selected carbohydrate-based food items and cooking sauces, 2004-08
• Youth appeal for pizza and savoury snacks
• Rice leads value sales growth
  • Figure 8: UK retail sales of carbohydrate based meals, cooking sauces and ready meals, 2004-08
• Cross-promotional potential for pasta

Who’s Innovating?

• Key points
• Pasta leads NPD activity in 2008
  • Figure 9: NPD in noodles, pasta and rice, % by positioning, 2006-09*
• Range extensions gather momentum
  • Figure 10: NPD in noodles, pasta and rice, % by launch type, 2006-09*
• Recession boosts own-label activity
  • Figure 11: NPD in noodles, pasta and rice, % by own –label and branded, 2006-09*
• NPD focuses on health and convenience
  • Figure 12: NPD in noodles, pasta & rice, % by positioning, 2006-08
• Healthy eating ranges
• Offering convenience
• Spicing up instant noodles
• Embracing organic and wholegrain
• Premium range activity strong
• Children’s market targeted

Market Size and Forecast

• Key points
• Shortages fuel rocketing market
  • Figure 13: UK retail value sales of noodles, rice and pasta market, 2004-14
• Shoppers alter shopping habits in the recession
• The future of the market
• Factors used in the forecast

Segment Performance

• Key points
• Pasta and pasta-based meals
• Rising prices fail to quell volume growth
  • Figure 14: UK retail volume and value sales of pasta, at current and constant prices, 2004-14
• Italian focus and health concerns boost ready meals
• NPD and recession lift dry pasta sales
• • Figure 15: UK retail value sales of pasta, by type, 2006-09
• Rice
• Adventurous Brits drive rice sales
  • Figure 16: UK retail volume and value sales of rice, at current and constant prices, 2004-14
• Recession boosts own-label and speciality rices
• Convenience pulls in the premiums
  • Figure 17: UK retail value sales of rice, by type, 2006-09
• Noodles
• Growth despite limited usage
  • Figure 18: UK retail volume and value sales of noodles, at current and constant prices, 2004-14
• Mixed performances among shelf-stable noodles
• • Figure 19: UK retail value sales of noodles, by type, 2006-09
• Chilled noodle market falters

Market Share

• Key points
• Pasta and pasta-based meals
• Inflation and marketing boost own-label
  • Figure 20: Estimated manufacturer shares of retail value sales of dried pasta, 2006-09*
• Napolina and De Cecco push ahead
• Rice
• Recession boosts own-label sales
  • Figure 21: Estimated manufacturer shares of retail value sales of rice, 2006-09
• Greatest gains made by Tilda and Veetee
• Noodles
• Brands dominate the noodles market
  • Figure 22: Estimated manufacturer shares of retail value sales of noodles, 2006-09

Companies and Products

• Manufacturers and brands
  • Figure 23: Leading companies in the pasta, rice and noodles market and their brands, 2009
• Major players
• Associated British Foods
• Heinz
• Mars
• Napolina
• Nestlé
• Giovanni Rana
• Premier Foods
• Riso Gallo
• Tilda
• Unilever

Brand Communication and Promotion

• Key points
• Brands defend market share as recession bites
  • Figure 24: Main monitored media advertising expenditure on pasta, noodles and rice, 2006-08
• TV activity stepped up
  • Figure 25: Percentage of main monitored media advertising expenditure on pasta, noodles and rice, by media type, 2006-08
• Setting out their stalls
  • Figure 26: Adspend by seasonality correlated with NPD activity, 2006-08
• Uncle Ben’s leads marketing spend
• ‘Spoof’ campaigns for Pot Noodle and Giovanni Rana
• Tilda evokes premium appeal

Channels to Market

• Key points
• Multiple dominance grows
  • Figure 27: Retail distribution of the UK market for noodles, rice and pasta, 2006-09
• Convenience store success in pasta and rice sales

The Consumer – Pasta and Noodles Usage

• Key points
• Pasta and noodles: Frequency of usage increases
• • Figure 28: Trends in frequency and usage of pasta and noodles, 2004-08**
• Appealing to the affluent young families
• • Figure 29: Users vs. non-users of pasta and noodles, by demographic group, 2008
• Over-55s not fans of pasta and noodles
• Fresh pasta and noodles gain ground
• • Figure 30: Trends in usage of pasta and noodles, by type, 2004-08
• Fresh pasta appeals to health-conscious
• Noodles boost youth appeal
• Savoury snacks proving an instant hit
  • Figure 31: Trends in frequency and usage of instant savoury snacks, 2004-08
• Less affluent young opt for instant savoury snacks
  • Figure 32: Users vs. non-users of pasta and noodles, by demographic group, 2008
• Potential for healthier, upmarket snacks?
• Dried snack meals losing out
• • Figure 33: Trends in usage of instant savoury snacks, by type, 2006-08
• Chilled salads pose greatest competitive threat

The Consumer – Attitudes and Motivations

• Key points
• Increased usage bolsters future prospects
• • Figure 34: Frequency of eating noodles, rice and pasta now compared to a year ago, May 2009
• Universal appeal for rice, noodles a favourite of young consumers
• Rice
  • Figure 35: Types of rice eaten, May 2009
• Convenience choices appeal to less affluent
• Adventurous women sample multiple rice types
  • Figure 36: Repertoire of types of rice eaten, May 2009
• Frequency of rice consumption
  • Figure 37: Frequency of eating rice, May 2009
• Value is foremost in consumers’ minds
• • Figure 38: Agreement with statements about rice, May 2009
• Seeking health, versatility and convenience
• Noodles
• Consumer preferences for noodle types
• • Figure 39: Types of noodles eaten, May 2009
• Noodle consumers not sampling across repertoires
  • Figure 40: Repertoire of type of noodles eaten, May 2009
• Noodles meet demand for convenience and variety
• • Figure 41: Statements agreed with when it comes to noodles, May 2009
• Boosting consumption among older consumers
• Opportunity for takeaway-style noodle meals?
• Pasta
• Fresh gaining ground on dry pasta
• • Figure 42: Types of pasta eaten, May 2009
• Sampling across repertoires is low
• • Figure 43: Repertoire of types of pasta eaten, May 2009
• Positive responses bolster pasta’s position
• • Figure 44: Statements agreed with when it comes to pasta dishes, May 2009
• Dry pasta a store cupboard staple for many
• Affluent young opt for fresh pasta
• Convenience draws in consumers

Further Analysis – Targeting Groups

• Key points
  • Figure 45: Consumer typologies for rice, May 2009
• Own-Label Stalwarts
• Brand Loyalists
• Budget Shoppers

Appendix

Appendix – Internal Market Environment

• • Figure 46: Agreement with lifestyle statements, by demographics, 2008
  • Figure 47: Agreement with lifestyle statements, by demographics, 2008

Appendix – Competitive Context

• • Figure 48: Trends in usage of selected carbohydrate-based food items and cooking sauces, by demographics, 2008

Appendix – Brand Communication and Promotion

• • Figure 49: Main monitored media expenditure on rice, noodles and pasta, by brand and manufacturer, 2006-08

Appendix – The Consumer – Pasta and Noodles Usage

• • Figure 50: Frequency and usage of pasta and noodles, by demographics, 2008
• • Figure 51: Usage of pasta and noodles, by type, by demographics, 2008
• • Figure 52: Frequency and usage of instant savoury snacks, by demographics, 2008
• • Figure 53: Trends in usage of instant savoury snacks, by demographics, 2008

Appendix – The Consumer – Attitudes and Motivations

• • Figure 54: Frequency of eating noodles now compared to a year ago, May 2009
• • Figure 55: Frequency of eating rice now compared to a year ago, May 2009
• • Figure 56: Frequency of eating pasta now compared to a year ago, May 2009
• • Figure 57: Types of rice eaten, by demographics, May 2009
• • Figure 58: Types of rice eaten, by demographics, May 2009 (continued)
• • Figure 59: Repertoire of types of rice eaten, by demographics, May 2009
• • Figure 60: Repertoire of types of rice eaten, May 2009
• • Figure 61: Frequency of eating rice, by demographics, May 2009
• • Figure 62: Frequency of eating rice, by type, May 2009
• • Figure 63: Frequency of eating rice, by types of rice eaten, May 2009
• • Figure 64: Frequency of eating rice, by types of rice eaten, May 2009 (continued)
• • Figure 65: Agreement with statements about rice, by demographics, May 2009
• • Figure 66: Agreement with statements about rice, by demographics, May 2009
• • Figure 67: Agreement with statements about rice, by type of rice eaten, May 2009
• • Figure 68: Agreement with statements about rice, by type of rice eaten, May 2009
• • Figure 69: Agreement with statements about rice, by frequency of eating rice, May 2009
• • Figure 70: Types of noodles eaten, by demographics, May 2009
• • Figure 71: Repertoire of noodles eaten, by demographics, May 2009
• • Figure 72: Agreement with statements about noodles, May 2009
• • Figure 73: Repertoire of type of noodles eaten, May 2009
• • Figure 74: Agreement with statements about noodles, by types of noodles eaten, May 2009
• • Figure 75: Types of pasta eaten, by demographics, May 2009
• • Figure 76: Repertoire of types of pasta eaten, by demographics, May 2009
• • Figure 77: Agreement with statements about pasta, by demographics, May 2009
• • Figure 78: Agreement with statements about pasta, by demographics, May 2009
• • Figure 79: Repertoire of types of pasta eaten, May 2009

Appendix – Further Analysis – Targeting Groups

• • Figure 80: Target groups, by demographics, May 2009
  • Figure 81: Agreement with statements about rice, by target group, May 2009
• • Figure 82: Repertoire of types of rice eaten, by target group, May 2009
  • Figure 83: Frequency of eating rice, by target groups, May 2009
• • Figure 84: Types of rice eaten, by target groups, May 2009