Confidential & Proprietary Copyright © 2007 The Nielsen Company The rise and rise of the ethical consumer Jonathan Banks 20 February 2008

Confidential & Proprietary • Copyright © 2007 The Nielsen Company

The rise and rise of the ethical consumer

Jonathan Banks

20 February 2008

Confidential & ProprietaryCopyright © 2007 The Nielsen Company

Agenda• Consumer concerns• Consumer behaviour• Manufacturer and retailer responses: sales/growth


What is your biggest/2nd biggest concern in the next 6 months?

29%

29%

27%

26%

19%

18%

17%

11%

7%

6%

7%

The economy

Health

Immigration

Crime

Job security

Terrorism

Other concerns

Global warming

Political stability

War

No concerns

Source: Nielsen Global online survey Nov 2007 GB results


GDP per capita vs. Household spend on food

Sources: UN; International Labour Organization; allcountries.org; National Bureau Of Statistics of the The Peoples Republic Of China; swivel.com; World Resources Institute; International Finance Corporation; & Namibia Community and Household Surveillance (CHS) Findings, Oct. 2006.

India

Russia

Namibia*China

Brazil

Japan

France

Spain

Greece

Norway

SwedenFinland

Denmark

U.K.

U.S.

R2 = 0.8

Household Spend on Food (%)

GD

P P

er

Ca

pit

a, U

S $

* Household spend on food (%) for Caprivi, Kavango, Ohangw ena, Omusati, Oshana, and


4 megatrends: Fairtrade can address them all

Health/Well-Being

Ethical

Convenience/Practicality

Indulgence/Pleasure


Organic (y2) and Fairtrade (y1) drive sustainability buzzBuzz share for key categories, as a % of sustainability discussion

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

% o

f S

usta

inab

ilit

y M

en

tio

ns f

or

All

Tre

nd

s

Excep

t O

rgan

ic

0%

10%

20%

30%

40%

50%

60%

Org

an

ic a

s a

% o

f S

us

tain

ab

ilit

y M

en

tio

ns

Fair Trade Plastic Packaging CSA Organic

Source: Nielsen BuzzMetrics

n = 241,227 messages about sustainability, between 7/01/2006 and 6/30/2007

CSAs = Community Supported Agriculture


Blogosphere mentions...

Source: Nielsen BuzzMetrics


Fairtrade topics of discussion

Source: Nielsen BuzzMetrics 2007


In competition with other offerings...

46%

38%

36%

36%

29%

25%

25%

17%

16%

13%

Products with minimum/no packaging

Products in recyclable packaging

Products without pesticides

Products not tested on animals

Fair Trade products

Products from a Farmers Market

Energy efficient products or appliances

Ethically produced or grown products

Organic products

None of these

Source: Nielsen Homescan Survey 2007


Which of these types of products do you actively try to buy?Fairtrade...

0%

10%

20%

30%

40%

50%

60%T

otal

Sw

itzer

land

Bra

zil

Irel

and

Mex

ico

UK

Aus

tria

Ger

man

yC

hile

Chi

naF

ranc

eS

pain

Sou

th K

orea

Latv

iaA

rgen

tina

Sw

eden

Tha

iland

Fin

land

Italy

Indi

aM

alay

sia

Hun

gary

Vie

tnam

Bel

gium

UA

EC

anad

aP

hilip

pine

sT

aiw

anD

enm

ark

Hon

g K

ong

Nor

way

Rus

sia

Sin

gapo

reP

olan

dT

urke

yA

ustr

alia

New

Zea

land

Lith

uani

aE

gypt

Japa

nIn

done

sia

Sou

th A

fric

aE

ston

iaU

SP

ortu

gal

Net

herla

nds

Gre

ece

Cze

ch

Source: Nielsen Global online survey – April 2007


To what extent are the following statements true? I will not buy a consumer product from a country or company with a reputation for:

43%

43%

50%

49%

56%

42%

45%

45%

50%

56%

Operating sweatshops

Unfair trade agreements

Damaging to the environment

Using underage labour

Human rights abuse

UK

Total

% agree (excludes “somewhat agree”)

Source: Nielsen Global Online Survey April 2007


Fairtrade sales: Denmark

•0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

•W46

04

•W50

04

•W01

05

•W05

05

•W09

05

•W13

05

•W17

05

•W21

05

•W25

05

•W29

05

•W33

05

•W37

05

•W41

05

•W45

05

•W49

05

•W01

06

•W05

06

•W09

06

•W13

06

•W17

06

•W21

06

•W25

06

•W29

06

•W33

06

•W37

06

•W41

06

•W45

06

•W49

06

•W01

07

•W05

07

•W09

07

•W13

07

•W17

07

•W21

07

•W25

07

•W29

07

•W33

07

•W37

07

•W41

07

•1.000 kr.

Source: Nielsen scanning data

2005 2006 2007


US Fair trade coffee imports


0

1

2

3

4

5

6

7

8

Source: Nielsen ScanTrack £m Grocery Multiples For Fair Trade Includes Co-Op

Fairtrade fortnights highlighted

1st-13th March

6th-19th March

26th Feb-11th March

Weekly sales in Grocery Multiples

2005 2006 2007

£m

£280m +47%


80. 'Fairtrade' foodContinuing to expand our ranges of ‘Fairtrade’ food including converting all

our jams, conserves, and bagged sugar to

‘Fairtrade’ and offering more ‘Fairtrade’ fruit, wine

and other products.81. 'Fairtrade' clothing

Converting 20 million clothing garments

including £5 plain t-shirts, women’s strappy vests

and oxford shirts to ‘Fairtrade’ cotton – equal to 10% of all M&S cotton

use.

Source: Nielsen Media Research






Fairtrade lines stocked

136128

87100

5649

70

145134

116 115

85 84 80

Co-op

Tesco

Wai

trose

Sainsb

ury

Morri

sons

Asda

M&S

2006 2007

Source: Nielsen Homescan


Share of Fairtrade

14%

10%8%

7% 6%3%

29%

19%

0%

5%

10%

15%

20%

25%

30%

35%

JS

TESCO

WAIT

ROSE

CO-O

P

ASDA

MO

RRISO

NSM

&S

SOM

ERFIELD

2005 2006 2007

Source: Nielsen Homescan to y/e 29/12/07


298

184

5572 61

402

70

389

0

100

200

300

400

500

600

2005 2006 2007

Fairtrade’s ‘fair share’ index

Source: Nielsen Homescan to y/e 29/12/07




Fairtrade super-categories

0

25

50

75

100

125

Pro

duce

Gro

cery

Con

fecti

oner

y

BW

S

Sof

t Drin

ks

Non

Foo

ds

Bak

ery

Dair

y

£m

20

07

0%

1%

2%

3%

4%

5%

Fa

irtr

ad

e s

ha

re o

f s

up

er

ca

teg

ory

Source: Nielsen Scantrack


Fairtrade: top category shares21%

20%19%

16%7%

6%6%

5%5%

5%4%

4%4%

3%3%

3%2%

2%2%2%

Hot Beverages - CocoaHot Beverages - Ground CoffeeChocolate - Plain Moulded Bars

Produce - BananasProduce - Oranges (fixed weight)

Produce - LemonsCooking Aids - Demerara Sugar

Preserves - MarmaladesProduce - Pineapple

Hot Beverages - Instant CoffeePreserves - Jams

Hot Beverages - Tea BagsCooking Aids - Cooking Chocolate

Dried Foods - Hot CerealsChocolate - Milk Recipe BarsHot Beverages - Packet Teas

Produce - MangoProduce - Satsumas

Hot Beverages - Drinking ChocolateIce-Cream



Fairtrade: top categories - £m92

27

25

18

18

18

10

9

5

5

4

4

3

3

3

3

3

32

Produce - Bananas

Hot Beverages - Instant Coffee

Hot Beverages - Ground Coffee

DIY & Gardening (Cut flowers)

Hot Beverages - Tea Bags

Wines

Chocolate - Plain Moulded Bars

Dried Foods - Hot Cereals

Produce - Oranges (fixed weight)

Produce - Pineapple

Preserves - Jams

Ice-Cream

Chocolate - Milk Moulded Bars

Produce - Lemons

Produce - Grapes

Preserves - Marmalades

Soft Drink - Pure Fruit & Veg Drinks

Chocolate - Milk Recipe Bars

Produce - Satsumas



Fairtrade sales on promotionAverage sold on promotion for all products: 25%

11

1413 13

12 1110

98

TOTAL JS

MORRIS

ONS

SOM

ERFIELD

CO-OP

M&S

ASDA

TESCO

WAIT

ROSE

Source: Nielsen Homescan y/e 29/12/07


Average price per pack indexed on 2005

-5.8

1.1

-3.2

-4.5

-3.1

1.1

3.5

0.7

COFFEEGROUND

COFFEEINSTANT

TEA BAGS TEA PACKETS

2006 2007

Source: Nielsen Homescan y/e 29/12/07


Fairtrade from the consumer’s viewpoint...

Source; Nielsen Homescan survey

% agree


Media Exposure

Agree

Neither Agree

nor Disagree Disagree

Index Index IndexDaily Mail 20% 100 103 95Daily Star 2% 72 102 128Daily Telegraph 7% 129 90 84Metro 5% 122 100 75The Guardian 3% 220 51 50The Independent 2% 195 57 67The Times 5% 157 83 65Daily Express 6% 96 111 86Daily Mirror 9% 87 113 93The Sun 18% 66 113 115Local Daily Newspaper 18% 106 99 96Other daily newspaper 6% 116 105 73Do not read any daily newspapers 32% 99 94 111

I prefer to buy Fair Trade Products.

Thinking about daily

newspapers, which of the

following do you read at least once a week

All Households

Source: Nielsen Homescan



Caution...• “What’s the relevance of the ‘parrot’ logo?”• “Low commodity prices are caused by over-supply”• “Any subsidy or protection scheme is wrong”• “Fair trade schemes encourage further over-production”• “Fair trade rewards inefficient producers”• “Only a small proportion of the premium I pay reaches the producer”• “Makes things worse for producers outside Fair trade schemes”• “Wrong for Fair trade schemes to align with big multi-national

manufacturers and retailers”• “Better to help poor farmers add value to a basic crop or• grow something with higher demand (and therefore price)”• “I choose better ways to give money to charity”• “Fairtrade quality is lower than other similarly priced alternatives”• “Manufacturers and retailers have an obligation to their shareholders to

maximise (optimise) profit”• “There are so many different logos on packs it’s confusing”• “Accreditation bodies are just there to make money for themselves”


Summary

• Ethical consumption– awarenessattitudesbehaviour

• Fairtrade ‘competes’ with other offerings• +47%• Co-op, Waitrose, M&S and JS overindex• Top categories: bananas, coffee, flowers, tea• Prices lower than 2005

– but 48% agree “too expensive”

• Confusion• Integrity


Closing thought on the health of your customers and the planet...

“It is not your duty to finish the work, but neither are you free to neglect it.”

Source: Rabbi Tarfon, Pirke Avot, Talmud

Documents

Confidential & Proprietary Copyright © 2007 The Nielsen Company The rise and rise of the ethical consumer Jonathan Banks 20 February 2008