Sundown Sessions III Nielsen - Searching for insights in covid infested waters.

‘FISHING FOR INSIGHTS & OPPORTUNITIES IN COVID INFESTED WATERS’ Seafood Trends in COVID Times Melanie Norris & Neil Moody 19 October 2020

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AGENDA

THE BIGGER PICTURE

THE SEAFOOD LANDSCAPE

WHAT’S NEXT

COVID Impacts on retail & consumers

Understanding the trends & why it matters

Identifying opportunities & managing risk

2

THE BIGGER PICTURE MACRO ENVIRONMENT

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STRONG VALUE GROWTH

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Strong value growth continues after panic buying period | fresh seafood following grocery trend TOTAL GROCERY & FRESH SEAFOOD Value Growth vs YA 35.0

First wave of panic buying/pantry stocking

30.0 25.0

First confirmed COVID-19 in Australia

20.0 15.0 10.0 5.0 0.0 -5.0

4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 08/09/19 06/10/19 03/11/19 01/12/19 29/12/19 26/01/20 23/02/20 22/03/20 19/04/20 17/05/20 14/06/20 12/07/20 09/08/20 Total Grocery

Source: Nielsen Homescan

Fresh Seafood

4

CHANNEL SWITCHING Big shifts to in-home eating as restaurants shut and many work from home CHANNEL SWITCHING - DOLLAR % CHANGE VS PRIOR PERIOD

REASONS FOR PURCHASING FOOD DELIVERY

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58% 47%

34%

85%

25%

21%

53% Convenience of Home Delivery

14%

Give myself a day off cooking

To eat something different from usual

Help Local Business

To celebrate event/special occasion

REASONS FOR PURCHASING MEAL KIT

52%

50%

-73%

Grocery

Meal Kits

Food Delivery (Uber Eats / Deliveroo, etc)

Restaurants

19%

Convenience of getting everything delivered at home

To try new recipes / eat something different

Source: Nielsen Homescan + Uno Group. Homescan data 11 weeks to 16.5.20 vs PP. Uno Group 11 weeks to to 24.5.20 vs PP

To avoid crowds at supermarkets

5

ONSET THRESHOLD PATTERNS

2

ADJUSTED LIVING RESPONSES

COVID-19: 1-3 months

• Rise of Local • Technology Catalysts

EMERGING FROM RESTRICTIONS TO PRECAUTIONS

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• Quality & Efficacy

IMPLICATIONS

ALTERED CONSUMPTION DYNAMICS • Wallet Adjustments • Rebalanced FMCG • Reassessed Pricing • Reprioritised Values • Origin Preference

• Retuned Brand Affinity

FUTURE CONSEQUENCES Post COVID-19: years ►►►

Amidst COVID-19: 3-12 months

►►►

CONSUMPTION ACCELERATORS

3

►►► LONG TERM POST PANDEMIC IMPACTS

1

SHIFTED CONSUMPTION CIRCUMSTANCES • Prolonged Consumption Consequences • Permanent Basket Reforms • Brand & Retail Implications Impel Reset Constrained vs Insulated Spenders

RESPOND

REPRIORITISE

RESET

6

ECONOMIC & EMPLOYMENT UNCERTAINTY Consumers cautious about what lies ahead sharpest confidence plunge in 15 years GLOBAL CONSUMER CONFIDENCE INDEX 7 YEARS FOR CONFIDENCE TO RETURN TO PRE-GFC LEVEL

120

120

115

▼14 PTS IN 1 QUARTER

110

101

100

92

92

90

▼20 PTS

85

83

IN 5 QUARTERS

80

77

GLOBAL

2020-Q2

2020-Q1

2019-Q4

2019-Q3

2019-Q2

2018-Q1

2018-Q4

2018-Q3

2018-Q2

2018-Q1

2017-Q4

2017-Q3

2017-Q2

2016-Q4

2016-Q3

2016-Q2

2016-Q1

2015-Q4

2015-Q3

2015-Q2

2015-Q1

2014-Q4

2014-Q3

2014-Q2

2014-Q1

2013-Q4

2013-Q3

2013-Q2

2013-Q1

2012-Q4

2012-Q3

2012-Q2

2012-Q1

2011-Q4

2011-Q3

2011-Q2

2011-Q1

2010-Q4

2010-Q3

2010-Q2

2010-Q1

2009-Q4

2009-Q3

2009-Q2

2009-Q1

2008-Q3

2008-Q1

2007-Q3

2007-Q1

2006-Q3

2006-Q1

70

2005-Q3

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GFC 2007-2009

AUSTRALIA

Source: The Conference Board Consumer Confidence Index in association With Nielsen. * History of Nielsen CCI since 2005.

Additional markets have been added to CCI over time, but it remains globally representative as all key markets have been consistent since 2005.

7

ECONOMY & HEALTH CONCERNS SKY ROCKET AMIDST COVID-19

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Q4 2019

28%

24%

20%

18%

14%

ECONOMY

HEALTH

JOB SECURITY

WORKLIFE BALANCE

INCREASING FOOD PRICES

Q2 2020

42%

39%

26%

15%

12%

ECONOMY

HEALTH

JOB SECURITY

WORKLIFE BALANCE

INCREASING FOOD PRICES

+14

+15

+6

-3

% consumers nominating biggest and second biggest concern.

-2

8

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UNEMPLOYMENT BURGEONS, PARTICULARLY FOR THE YOUTH

UNITED KINGDOM

UNITED STATES

GLOBAL

Unemployment is nudging 3 million, vacancies have plummeted and pay packets are shrinking.

All this while the government is paying the wages of millions of workers through its furlough scheme.

The US unemployment rate hit 14.7 per cent in April, the highest rate since the Great Depression, as 20.5 million jobs vanished. It means less income and less spending, perpetuating the economic downturn.

Nearly half of global workforce at risk of losing livelihoods. Almost 1.6 billion informal economy workers, out of a worldwide total of two billion and a global workforce of 3.3 billion, have suffered massive damage to their capacity to earn a living.

UNEMPLOYMENT IS HITTING NUMBERS UNSEEN SINCE 1970S. IT’S PREDICTED TO HIT 4 MILLION WHEN GOVERNMENT SUBSIDIES STOP IN OCTOBER DEEPING CONSUMER ECONOMIC HARDSHIP

THE EXPECTED SHIFT IN CONSUMER BEHAVIOUR REFLECTS FUTURE INSECURITIES REGARDING HEALTH, WEALTH, INCOME, AND EMPLOYMENT

FOR MILLIONS OF WORKERS, NO INCOME MEANS NO FOOD, NO SECURITY AND NO FUTURE. THEY HAVE NO SAVINGS OR ACCESS TO CREDIT.

9

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WHAT LIES AHEAD...

CONSUMERS NEED TO DO MORE WITH LESS

FOCUS ON IN-HOME SPEND LESS DISCRETIONARY

IMPACT IS NOT EQUAL NEW NEEDS BUT AFFORD LESS RISK

SPARE CASH AVAILABLE BUT SHIFT IN PRIORITIES

ONGOING POLARISATION CONSTRAINED SPENDERS

INSULATED SPENDERS

10

WHAT’S HAPPENING IN THE SEAFOOD LANDSCAPE & WHY DOES THIS MATTER?

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SEAFOOD A TOP 10 GROWTH CONTRIBUTOR

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Fresh in top ranking growth categories while indulgence categories creeping back up the ranking TOTAL GROCERY TOP 20 CATEGORIES Quarterly % $ Contribution to Growth | 12 weeks to 06/09/2020 12.5%

7.9% 5.0% 4.2% 3.8% 3.5%

2.6% 2.6% 2.5% 2.2% 2.2% 2.2% 2.0% 1.8% 1.8% 1.6% 1.6% 1.4% 1.4% 1.3%

Source: Nielsen Homescan | Total Grocery Categories Ranked on $ Contribution to Growth

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TOTAL STORE SEAFOOD

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Although fresh seafood dominates sales, frozen proving increasingly popular.

Canned performed well during COVID despite reduction in office lunches TOTAL AUSTRALIA | TOTAL STORE SEAFOOD $ Share | 52 Wks to 08/08/2020

TOTAL AUSTRALIA | TOTAL STORE SEAFOOD $ Growth vs YA | 52 Wks to 08/08/2020 0.0%

5.0%

10.0%

15.0%

20.0%

11.9%

25.1%

Fresh 52.7%

30.0%

25.3%

Fresh

Frozen

25.0%

23.5%

Frozen

14.7%

Canned 22.2% Canned

Source: Nielsen Homescan

12Wks $ Growth

7.6% 12.5%

52Wks $ Growth

13

FISHMONGERS GREW SLIGHTLY FASTER FROM SMALLER BASE Despite fishmongers stronghold, 8-in-10 dollars still spent in supermarkets

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FISH & SEAFOOD Channel Value % Share | 4Wks to 08/08/2020

FISH & SEAFOOD Value & Volume Growth % | 4Wks to 08/08/2020 vs YA Value Growth %

Fishmonger 17%

20

Volume Growth % 21

20

11

19

9

Supers 83% Fish & Seafood

Source: Nielsen Homescan

Supers

Fishmongers

14

NON RESTRICTED STATES SHOW MOVE BACK TO FOODSERVICE / RESTAURANTS Vic posted strongest double-digits growth in retail due to population restrictions

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SUPERMARKETS | FISH & SEAFOOD BY STATE Value % Share | 4WKs to 08/08/2020

SUPERMARKETS | FISH & SEAFOOD BY STATE Value & Volume Growth % | 4Wks to 08/08/2020 vs YA Value Growth % 39

TAS WA 2% 10%

SA INC NT 6%

Volume Growth %

28 NSW 34%

21

20

12

9 QLD 20%

10

8

5

7 0

-4 -6 VIC 28%

Source: Nielsen Homescan

AUS SUPERS

NSW

VIC

QLD

SA INC NT

-10 WA

TAS

15

FRESH MAINTAINS HIGHEST $ SHARE OF CATEGORY Fish & Seafood seeing an ongoing move towards Frozen since March 2020

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FISH & SEAFOOD Value % Share | MAT to 08/08/2020

FISH & SEAFOOD Value & Volume Growth % | MAT to 08/08/2020 vs YA Value Growth %

Frozen 30%

Volume Growth % 15

13 11

12

12 8

Fresh 70% Fish & Seafood

Source: Nielsen Homescan

Fresh

Frozen

16

SHOPPERS ARE BUYING MORE FROZEN AGAIN

AUSTRALIA | FISH & SEAFOOD BY SUBCATEGORY Volume % Share | 2 Years 4Wkly trend ending 08/08/20

Resurgence of COVID-19 – VIC & NSW

4Wk 08/08/20

4WK 11/07/20

4Wk 13/06/20

4Wk 16/05/20

4Wk 18/04/20

4Wk 21/03/20

4Wk 22/02/20

4Wk 25/01/20

4Wk 28/12/19

4Wk 30/11/19

4Wk 02/11/19

4Wk 05/10/19

4Wk 07/09/19

4Wk 10/08/19

4Wk 13/07/19

4Wk 15/06/19

4Wk 18/05/19

4Wk 20/04/19

4Wk 23/03/19

69.9 61.1 60.0 59.1 61.9 59.2 60.5 60.6 57.6 59.7 61.8 60.8 61.7 60.8 61.7 53.0 65.3 63.9 62.8 61.3 60.1

4Wk 23/02/19

70.9

Fresh

Source: Nielsen Homescan

Panic buying ease

30.1 38.9 40.0 40.9 38.1 40.8 39.5 39.4 42.4 40.3 38.2 39.2 38.3 39.2 38.3 47.0 34.7 36.1 37.2 38.7 39.9

4Wk 26/01/19

4Wk 01/12/18

4Wk 03/11/18

4Wk 06/10/18

58.6 59.7 60.0 58.9

COVID-19 Panic buying

29.1

4Wk 29/12/18

41.4 40.3 40.0 41.1

4Wk 08/09/18

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Frozen sales is gradually increasing in the last four consecutive periods

Frozen

17

COVID: CATALYST FOR ONLINE GROCERY GROWTH

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Seafood typically under-developed in Australia has seen significant growth FRESH & FROZEN SEAFOOD Online Sales ($000’s) | 4 Week Periods Online

WW & Coles Online

FRESH & FROZEN SEAFOOD Online Market Share AO Online Retailers

8,000 7,000 6,000 5,000 4,000 3,000

NUMBER OF NEW HOUSEHOLDS BUYING FRESH SEAFOOD ONLINE IN LATEST 12 WEEKS VS YEAR AGO

Online

Brick & Mortar

96.3

94.6

3.7 YA

5.4 12W/E 08/08/20

2,000 1,000 0

Source: Nielsen Homescan™ | All other online includes Foodboxes, and specialty (e.g. Harris Farm,)

+235K

18

PRE-PACKED MAP SEAFOOD GROWING SIGNIFICANTLY Perceived safety & convenience of pre-packed in a COVID-environment

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MAJOR SUPERMARKETS | SEAFOOD ONLINE SALES

40.6% 6.0% 2.5% 1.7%

7.3%

2.9% 12.0%

4.8%

21.7% 13.0% 11.1%

4.5% 13.9% 3.2%

-5.7%

5.0% -6.2%

12.7%

21.8% 5.5% -5.2%

14.1%

15.5%

4Wk 13/06/20

4WK 11/07/20

10.3%

-3.5% 4Wk 07/09/19

4Wk 05/10/19

4Wk 02/11/19

4Wk 30/11/19

4Wk 28/12/19

4Wk 25/01/20

4Wk 22/02/20

DELI RANDON WEIGHT VOLUME % CHG

Source: Nielsen Homescan: Major Supermarkets are Coles + Woolworths + ALDI

4Wk 21/03/20

4Wk 18/04/20

4Wk 16/05/20

4Wk 08/08/20

PREPACKED MAP VOLUME % CHG

19

SALMON LEADING CATEGORY SHARE, WHILST OTHER SPECIES ARE FASTEST GROWING VS YA

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Crustaceans/Mussel/Squid relatively flat while the rest of species posted strong growth FISH & SEAFOOD BY SPECIES Value % Share | MAT to 08/08/2020

FISH & SEAFOOD BY SPECIES Value & Volume Growth % | MAT to 08/08/2020 vs YA Value Growth %

25

Other Species 14%

Barram.

5%

Salmon 39%

White Fish 18%

Volume Growth %

13

11

10

12

14

18

17 11

12 9 2

1 0

Crust. / Mussel / Squid 3%

Source: Nielsen Homescan

Prawns 21%

Fish & Seafood

Salmon

Prawns

Crust. / Mussel / Squid

Barram.

White Fish

Other Species

20

FOR SUPERMARKET RETAILERS SEAFOOD HELPS DRIVE GREATER VALUE IN BASKETS

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Whilst Seafood is a premium protein relative to other Meats and offers scope for trading up consumers, there needs to be consideration for relative value

194 - Index to T. Meat

Source: Nielsen Homescan

Beef – Index 117

Pork – Index 109

Chicken – Index 80

Lamb - Index 131

21

COVID POTENTIALLY INFLUENCING PURCHASE OF MORE LONG LASTING FROZEN SEAFOOD

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Top 3 recent covid growth contributors are Frozen vs pre-covid with Prawns at No.1 PRE-COVID TOP 10 GROWTH CONTRIBUTORS

COVID TOP 10 GROWTH CONTRIBUTORS

FROZEN BARRAMUNDI FRESH BARRAMUNDI FROZEN BASA FROZEN PRAWNS FRESH SEAFOOD OTHERS FROZEN FISH OTHERS FRESH SALMON FROZEN SEAFOOD OTHERS FRESH FLATHEAD FRESH FISH OTHER

FROZEN PRAWNS FROZEN SNAPPER FROZEN FISH OTHERS FRESH PRAWNS FRESH BARRAMUNDI FRESH SEAFOOD OTHERS FRESH SALMON FROZEN BARRAMUNDI FROZEN SALMON FRESH FISH OTHERS

Source: Nielsen Homescan | Based on Contribution to Volume Growth Pre Covid is 12 weeks to 10/08/2019 vs YA Covid is 12 weeks to 08/08/2020 vs YA

22

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MORE HOUSEHOLDS BUYING

SALMON

PRAWNS

BARRAMUNDI

WHITE FISH

Fresh 52.9% +1.9% Frozen 17.2% +2.0%

Fresh 36.8% +0.2% Frozen 27.3% +1.7%

Fresh 13% +0.5% Frozen 8.5% +0.2%

Fresh 30.5% +1.3%

Source: Nielsen Homescan

23

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INCREASING HOUSEHOLD CONSUMPTION

SALMON

PRAWNS

BARRAMUNDI

WHITE FISH

Fresh 3.3kg +0.1

Fresh 2.7kg +0.3

Frozen 1.1kg +0.1

Fresh 2.5kg +0.1

Source: Nielsen Homescan

24

SO WHAT NEXT? HOW CAN WE TAKE ADVANTAGE & BETTER MEET CONSUMER NEEDS

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RESPONSES TO COVID RETAIL RESTRICTIONS

26

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HOW THE INDUSTRY HAS RESPONDED

27

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WHERE ARE THE RISKS & OPPORTUNITIES?

WORKING WITH RETAILERS

PARTNERING WITH D2C PLAYERS

ESTABLISHING AN ONLINE PRESENCE

28

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SUMMARY

THE BIGGER PICTURE

THE SEAFOOD LANDSCAPE

WHAT’S NEXT

COVID Impacts on retail & consumers

Understanding the trends & why it matters

Identifying opportunities & managing risk

29

SHAPING A SMARTER MARKET™ This artwork was created using Nielsen data.

Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.