W/C 18.05.2020

T H E C O V I D F I L E S W/C 18.05.20 | 2

News Corp Australia ImpactOVERVIEW:Herald Sun PVs surged on Monday’s news of easing restrictions.

For all Australians, cooking, and baking in particular, has become one of our favourite pastimes. Taste’s Keep Calm Kitchen minimises the challenges for those less experienced.

Top dayPage view increase

over same date last month

Escape Fri 8th 266%

Body+Soul Thu 7th 85%

kidspot Thu 7th 62%

GQ Tue 12th 53%

Herald Sun Mon 11th 43%

ENGAGEMENT

FOCUS ON TASTEOn taste.com.au, 6/10 top recipes last week were also in the top 10 recipes a month ago. The table below shows last week’s top recipes, with a star denoting the consistent favourites.

TOP READ ARTICLES* (4 May - 10 May 2020)

* All in news.com.au and state publications

Adapting to the changing marketAustralians have moved through the Pantry Stocking phase and into the Cocooning phase where eating-in has become both a priority and for some a challenge. To meet this challenge, Taste launched the Keep Calm Kitchen with ideas and information from supermarket updates and pantry-based recipes to daily live #DinnerTogether videos and live Q&As with Taste’s food experts.

A year ago our Food Corp Autumn/Winter Trends Forecast predicted baking would be the next big thing in food; Covid-19 has super-charged that trend.

Baking accounts for six of last week’s top 10 recipes and Taste’s audience is up 80% YoY with over 670,000 UVs per day.

*Source: Adobe Analytics L4W (10.04.20 - 07.05.20) vs STLY

STICKING TO FAVOURITES

Article Name UV's

1Former Kangaroos teammates, AFL stars and media react to Dean Laidley’s arrest

430,786

2Cameron Diaz surprises with rare screen appearance six years after retirement

313,428

3Thousands of catering company workers told they are no longer eligible for JobKeeper payments

289,840

4Gold’s Gym goes bankrupt amid coronavirus lockdowns

281,715

5 It hasn't worked': school plans backfire 223,261

4 MAY - 10 MAY 2020 TOP 10 RECIPES ON TASTE

Banana bread

Basic scones

Easy pancake recipe

Creamy chicken with pumpkin and mushrooms recipe

Zucchini slice

Pumpkin soup

Lemonade scones

Espresso martini baked cheesecake recipe

Condensed milk dumplings

Chocolate chip cookies

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OVERVIEW:Brands continue to think of new ways to connect with consumers throughout the crisis, from reminding us to keep our distance, to playing on nostalgia and community support.

Best-in-class ads

BRANDS - GLOBAL BRANDS - AUSTRALIABest-in-class ads

Campari Australia is supporting the hospitality industry with an initiative that helps bars and venues offer a bottled cocktail delivery or pick-up service. Mumbrella, May 12, 2020

Qantas recreates 'I still call Australia home' via home video recordings.The video features children from the choirs, aged eight to 18, filming themselves on phones in their own homes. ‘As domestic and trans-Tasman travel restrictions begin to ease, we hope this short video inspires people to start thinking about their next trip, particularly to destinations that are a little closer to home.’ Link here Ad News, 13 May, 2020

HOK-Elanto Finnish retailer used an original and insightful print on the cover of the biggest national newspaper Helsingin Sanomat. Instead of just a traditional print it takes advantage of an optical illusion that requires the reader to take a few steps back to see it clearly, and gives consumers a reminder that despite governments around the world gradually lifting restrictions we still should keep our distance.The Drum, May 2020

Brand Activity – Global & Local

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ConsumerImpact

OVERVIEW:The confidence recovery is showing signs of slowing as the dust settles on the financial fortunes of Australians. The shake-up of routines has forced a reappraisal of many aspects of life, including brand preferences, category engagement, and channel usage.

MODEST CONFIDENCE GAINS AS RECOVERY CONTINUES1 ● Consumer confidence has recorded six

weeks of consecutive growth following the record-breaking falls seen in late March, up 0.8 points this week.

● The index has recovered more than two-thirds of the losses since then, but remains at levels consistent with the GFC.

● Somewhat concerningly, the rate of recovery appears to be slowing despite easing restrictions and improving news in recent weeks around the slowed spread of the virus.

● Expectations of being ‘better off this time next year’ have returned to levels seen in early March, but this is likely due to the poor position of current finances, which has shown the smallest recovery to date of the sub-measures.

THE NEW AND REVITALISED VALUES BROUGHT ON BY CRISIS2

● McKinsey Design’s ethnographic study has shed some light on just how consumer attitudes have changed due to the crisis.

● Social consciousness and ‘mateship’ are a part of the Australian identity. Australians take pride in being good citizens, and have been quick to judge those not doing their part throughout the crisis.

● Rather than a rise in nationalism (Buy Australian made) - increased prioritisation of supporting local and community businesses has emerged.

● The rapid change in routines and habits has helped people appraise what they need and what they don't. Whether it be regular socialising, healthy eating, exercise, (cont.)

(Cont.) or digital detoxing, our mental and physical health needs have become priority.

● We have been forced to facilitate the many parts of our lives - family, work, social, fitness, education - simultaneously in the same space. While our new routines come with pros and cons, the dynamics are complex. The kinks still need to be worked out, especially if some changes become a fixture of the future.

● Many are making more deliberate and considered shopping choices, as restrictions forced more planning and thoughtfulness. Consumers are reappraising brands they bought out of routine, and have been exposed to new categories and channels, including digital delivery of goods and services.

ANZ-ROY MORGAN CONSUMER CONFIDENCE

IMPACTS AND CONCERN NOW FIRMLY ECONOMIC3 ● Kantar’s latest COVID Barometer study

confirms that attention has shifted to the financial impacts of the crisis.

● Concern about falling sick has declined in recent weeks, down to 39%. Recessionary concerns are trending up, at 61% in late April.

● Younger generations are feeling the economic impacts the most. 63% of australians say they are proactive about financial planning, with millennials and GenZ at 71% and 67% respectively.

● 46% of australians say their household income has been affected, with a further 18% expecting more impacts. Millennials have much higher impacts comparatively, with 58% saying their household income has already been affected, and 19% expecting further impacts.

RESTRICTIONS ACCELERATE DIGITAL ENGAGEMENT4

● While ecommerce has been growing in popularity over a number of years – essentially doubling between 2016 and 2019 – lockdowns have forced broader adoption.

● Social distancing and restrictions have forced older generations (Baby Boomers+) into buying online for the first time. During late April, older generations made up 34% of digital buyers, up from 29% in 2019.

● Meanwhile, younger generations have made purchases in categories they previously hadn’t. 31% of Millennials and Gen Z have bought from 1+ new categories recently, with this group averaging 3.9 new categories.

● The top categories for first-time purchase include education, shoes and preventative healthcare.

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CulturalImpact

OVERVIEW:With a three stage approach outlined to release Australia from the Covid restrictions, friction points are starting to emerge. Our relationship with a key trading partner as well as questions around govt stimulus are likely to have an impact on consumer confidence.

China trade tension rises5

China suspended meat imports from at least four Australian abattoirs, as trade tensions between Australia and the communist nation rise.The move follows China’s threats to slap a 73.6% tariff on $1b worth of Australian barley as early as this Sunday. These two moves seem to be the start of a series of retaliatory measures against Australia.

Relaxing restrictions6

Every state and territory has now set a date for entering step one of Australia's three-stage plan for easing coronavirus restrictions. By July, it's hoped that the whole country will reach the most relaxed ‘stage three’, where people can return to work and gatherings of up to 100 will be allowed. Despite pressures to open faster, the National Cabinet is taking a cautious approach so as to best avoid a second wave.

Sudden JobKeeper and JobSeeker stop could drive economy into recession7

Economists are warning that a premature removal of stimulus payments could jeopardise the recovery. The lifting of restrictions is a gradual process and that will mean the economy will only come back gradually as well. With that in mind, the risk is that some of these stimulus programs may need to extend well beyond September to continue to support millions of Australians.

Banks prepare for Covid damage8

Commonwealth Bank has set aside $1.5b for potential coronavirus-related losses. CBA says it has received 144,000 requests for home loan repayment deferrals and 71,000 for business loans collectively worth more than a total of $61b. Australian banks are well prepared for this financial hit, however if the economic impact becomes enormous then further pressure will be on the banks and the RBA to assist.

Racism fears9

Disturbing stories about racism against Asians in Australia amid the coronavirus pandemic have been revealed in a new survey.

The survey found that more than 300 incidents of racism have been reported through the Asian Australian Alliance. More than 60% said this racism was in the form of racial slurs, with more than 40% occurring on public streets. These incidents have increased since the pandemic, which Trump and some media outlets have labelled the ‘Chinese virus’. This is a huge divisive cultural issue that we will have to address closely moving forward as tensions rise.

Lowest-ever overseas numbers10

Australia has suffered the biggest drop in overseas arrivals ever recorded, which is contributing to a $2 billion-a-month problem.

There were 331,900 short-term visitors to Australia in March 2020, down from 836,300 visitors a year earlier. This is unlikely to change any time soon, with International border measures the “last to go” according to CMO Brendan Murphy.This has creates a huge impact on our economy and shows holes that have been created by our reliance on overseas travel and visitors

Apple and Google working on exposure notifications11

Apple mobile users have reported significant issues with the governments COVIDSafe application. With many noting that it fails to work properly unless phones are unlocked at all times. This is due to an Apple security feature originally designed to protect users from unwanted Bluetooth advertising. This bug has effectively rendered the COVIDSafe app unusable for an estimated 50% of Australians. In response, Apple has partnered with Google to develop a more effective contact tracing system known as Exposure Notifications estimated to work on 99% of smartphones.

The government purchased 1.5 million unusable antibody tests12

Official scientific advice given to the federal government states that the 1.5 million Covid-19 finger prick antibody tests bought are not accurate enough to be of any use. The test kits have been identified as being inaccurate for Covid-19 diagnosis and could directly affect how we report and track the virus in Australia. With even a small level of inaccuracy potentially able to generate significant amounts of false positive results.

POLITICAL ECONOMICAL SOCIAL TECHNOLOGICAL

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Cocooning will continue to be a dominant consumer behaviour that drives FMCG consumption

Although restrictions are gradually easing, Australians will continue to remain homebodies, partially because of a general sense of caution around the risks of going out but also because society's reopening will be gradual. And the economic rationalisation of decreasing discretionary spend outside the home (eg movies, dining out, travel, entertainment etc) will keep people in their homes more than before, which will keep FMCG consumption higher than pre Covid-19.

As such the onset of the coronavirus has given rise to the ‘homebody economy’ in Australia*: We are more comfortable cocooning and are now more accustomed to shopping, studying, working and finding entertainment online, and we are preparing more meals at home than we have ever done before. Staying home has become a new way of life and it has had a particularly significant impact on our grocery shopping decisions in the future.

Over the months of March and April, we witnessed incredible scenes of shoppers rushing to pack their ‘pandemic pantries’ with enough food staples and essential supplies to last a few months. Strong volume sales in food and produce signalled a return to home cooking and baking; while a spike in sales for ground coffee and coffee beans revealed that many Australians are craving a barista-style coffee experience at home.**

As lockdown restrictions slowly start to lift over the next few weeks and months, brands, manufacturers and retailers will need to consider what the ‘new normal’ looks like and adapt and reset accordingly.

Sources: *Nielsen, ‘Food for thought: Examining Australians’ changing eating habits and shopping lists’, May 2020.**Nielsen Homescan 4 weeks ending 22/03/2020

CATEGORY BRANDS‘Wallet shift’ means that FMCG consumer spend outlook is optimistic

Although the majority of Aussies believe there will be an economic recession (84%), fewer than half feel financially insecure (40%) and Australians are actually less worried about personal finances than the rest of the world (eg USA at 58%, Italy 60%).*

Even though half of Australians say that they have decreased their spending over the past month due to Covid-19, and a similar number say they expect their spending to decrease significantly over the next 12 months*, the outlook for consumer spend within the FMCG industry is optimistic.

With continued cocooning behaviours, Australians are retreating further towards the simpler life, with consumers using the time returned from commuting to pursue creative interests: baking bread, growing vegetables and nurturing gardens, and home maintenance**. 74% of consumers who have cut down on eating out are cooking meals at home, and one-third of Australians are taking up DIY home repairs*.

As such a ‘two-speed economy’ is emerging with consumers split into two camps; either focusing on ‘bang for buck’ to ease financial pressures or trading up as other discretionary spend is held back. Consumers said that they expect to cut spending in both travel (~70% fall) and luxury brands and products (~45% fall) while daily essentials expect a 31% gain*.

No matter the motivations of individuals, the high spend within FMCG and household items will sustain itself for the next several months at least.

Sources: *Boston Consulting Group, Australian Consumer Sentiment Report - effects of CV19, 7th May, 2020**BCG Platinion ethnographic research May 2020

CONSUMER NEWS CORPFMCG News Corp identifies what consumer behaviour looks like as we move into the post-lockdown phase of living with the coronavirus

Back in March, News Corp launched our FMCG consumer insight pieces called Adapting to the Cautious Consumer, which explored the immediate impact that Covid-19 had on consumer mindsets and grocery buying behaviour with advice on how brands can be nimble in response. In Adapting to the Cautious Consumer, we advocated for brands to be vocal through the height of the crisis, even despite the supply challenges that many categories were facing. Many brands took this advice to great effect, but many also waited to see how the market would shape up – but all have been asking us ‘What’s next?’

That’s why we’ve developed this follow-up insights piece, Marketing to the Cautious Consumer in the ‘New Normal’, to explore the medium to longer-term impact of Covid-19 on the FMCG sector and what it means for brands and marketers. Through this piece we'll share how the way Australians plan, shop, purchase and consume grocery items is evolving as consumer circumstances, expectations, values and needs change while restrictions are eased and we move beyond the initial fear and uncertainty of the Covid-19 crisis.

Reach out to your News Corp Australia rep to set up a session for the full presentation (one hour).

OVERVIEW: Fears of recession and economic uncertainty are having the opposite effect on consumer FMCG consumption.Cocooning is set to continue for some time yet, and as Aussies re-prioritise their household expenditure, the outlook for consumer spend in the FMCG industry is optimistic.

Spotlight on Heinz Ketchup

Heinz Ketchup is capitalising on the resurgence of jigsaw puzzles with the creation of its very own puzzle. The Heinz twist being that there are 570 pieces, and they are all identical Heinz red.

Google Trends in March showed a 650% rise for puzzle searches, so Heinz created the puzzle to end all puzzles - a clever move that places their distinctive brand aset, the patented ‘Heinz red’, in front of consumers for hours on end.

Heinz held a competition to award puzzles to 57 fans in 17 countries around the world. To enter, consumers shared their most puzzling ketchup combinations with the brand.

It’s a great example of how Heinz has managed to look beyond campaigns that ‘push product’ and focus more on ‘adding value’.

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● Finance● Automotive● Travel● Telecommunications● Retail● Real Estate

● Education● SMB● Entertainment● Health &

Pharmaceutical ● Sport

Category Insights

In addition to the FMCG insights, we

have further category insights

including:Ask your News Corp Australia sales representative for a detailed report

W/C 18.05.2020

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1. ANZ-Roy Morgan Consumer Confidence increases for sixth straight week, up 0.8pts to 90.3, May 12 2020, http://www.roymorgan.com/findings/8405-anz-roy-morgan-consumer-confidence-may-12-2020-202005120006

2. McKinsey, Emerging from COVID-19: Australians embrace their values, May 11 2020, https://www.mckinsey.com/industries/retail/our-insights/emerging-from-covid-19-australians-embrace-their-values?cid=other-eml-alt-mip-mck&hlkid=3bc5fe776dcc43f7b8f9b37e2a163feb&hctky=11946085&hdpid=8ace5c1d-bc06-439b-814d-3604e0bd2de6

3. Kantar Global barometer 2020 wave 4, Australia, 23-28th April4. BCG, Australian Consumer Sentiment Snapshot #1, Confidence, nostalgia and shifting trust, May 7 2020,

https://www.bcg.com/en-au/capabilities/marketing-sales/australian-consumer-behaviour-economic-recovery-post-covid.aspx5. The Australian Business Review, China’s Global Times sends warning to Australia of more trade ructions, Glenda Korporaal, May 12 2020,

https://www.theaustralian.com.au/business/economics/chinas-global-times-sends-warning-to-australia-of-more-trade-ructions/news-story/b4d0028b7e6f5b02140ce14da8131e446. ABC News, Coronavirus restrictions are easing but that doesn't mean the pandemic is over, health experts warn, Olivia Willis, May 12 2020,

https://www.abc.net.au/news/health/2020-05-13/easing-coronavirus-restrictions-no-sign-pandemic-is-over/122406467. ABC News, A hard end date to coronavirus stimulus JobKeeper, JobSeeker packages could sink economy in September, warn experts, Phillip Lasker, May 12 2020,

https://www.abc.net.au/news/2020-05-13/coronavirus-jobkeeper-jobseeker-hard-end-could-sink-economy/12239114?section=politics8. ABC News, CBA warns Australia risks 32 per cent house price crash in a 'prolonged downturn', flags $1.5 billion coronavirus-hit to bank, Michael Janda, May 12 2020,

https://www.abc.net.au/news/2020-05-13/cba-completes-bank-results-with-third-quarter-update/12241338?section=business9. news.com.au, Survey reveals disturbing stories of racism against Asians in Australia, Charis Chang, May 14 2020,

https://www.news.com.au/national/survey-reveals-disturbing-stories-of-racism-against-asians-in-australia/news-story/78a16ca46afb01df622c73ddb86fd53c10. news.com.au, Coronavirus Australia live coverage: Australian 'church' slapped with fines for selling coronavirus "cure", Natalie Wolfe and Shannon Molloy, May 14 2020,

https://www.news.com.au/lifestyle/health/health-problems/coronavirus-australia-live-coverage-spike-in-australias-virus-cases/live-coverage/518886acbf5159947456f48c81870ab611. ABC News, COVIDSafe's effectiveness on iPhone in question as Government releases coronavirus contact tracing app, Ariel Bogle, April 26 2020,

https://www.abc.net.au/news/2020-04-26/coronavirus-tracing-app-covidsafe-apple-iphone-covid-19/1218744812. Daily Mail, Australia buys 1.5million coronavirus antibody tests - only to find out they're USELESS because they're so inaccurate, Brittany Chain and Alisha Rouse for Daily Mail

Australia, May 13 2020, https://www.dailymail.co.uk/news/article-8313343/Australia-buys-1-5million-faulty-coronavirus-antibody-test-kits.html

Sources: