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QUARTER BY
NUMBERS
Q1 2018
1
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EUROPE AT A GLANCE E
Key economic drivers…………………………………………………………………………………….. 5
Looking through West Europe FMCG Lens………………………………………………………...... 7
COUNTRY SNAPSHOT T
Austria……….………………………….………………………………………………………………….. 8
Belgium………………………………………………………………………………………….......…….. 11
Denmark……………………………………………………………………………………….................. 14
Finland…………………………………………………………………………………………………....... 17
France……………………………………………………………………………………………………… 20
Germany…………………………………………………………………………………………………… 23
Ireland…………………………………………………………………………….…………….......…....... 26
Italy……………………………………………………………………………………....……………........ 29
Netherlands………………………………………………………………………………....…………….. 32
Norway………………………………………………………………………………………..………........ 35
Portugal…………………………………………………………………....………………….………....... 38
Spain……………………………………………………………………………………………..………… 41
Sweden………………………………………………………………………………………………......... 44
Switzerland………...……………………………………………………………………………………… 47
United Kingdom…………………………………………………………………………….……………... 50
IN THE INDUSTRY Y
What’s Next Starts Now………………………………………………………………………………….. 102
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CONTENTS – EUROPE CENTRAL & EAST
SECTION 2 1
THE BIG PICTURE: EUROPE CENTRAL & EAST T
Message from Roberto Pedretti and Daniel Chorbadjian…………………………........................... 53
EUROPE AT A GLANCE E
Key economic drivers……………..…………………………………………………….………….......... 54
Looking through Central & East Europe FMCG Lens……………………………………………....... 56
COUNTRY SNAPSHOT T
Belarus……….………………………….…………………………………………………………………. 57
Bulgaria……….………………………………………….……………………....................................... 60
Czech Republic…………………………………………………………………………………………… 63
Estonia…………………………………………………………………………………………....……….. 66
Greece…………………………………………………………………………………………………....... 69
Hungary……………………………………………………………………………………………………. 72
Kazakhstan…………………………………………………………………………………………...…… 75
Latvia……………………………………………………………………………………....………………. 78
Lithuania…………………………………………………………………………………………………… 81
Poland……………………………………………………………………………………………………… 84
Romania…………………………………………………………………....……………………………… 87
Russia……………………………………………………………………………………………………… 90
Slovakia……………………………………………………………………………………………………. 93
Turkey……………………………………………………………………………………………………… 96
Ukraine…………………………………………………………………………………………………….. 99
IN THE INDUSTRY Y
What’s Next Starts Now………………………………………………………………………………….. 102
NOTE: Croatia, Israel, Serbia and Slovenia are not included in this
quarter’s report and will return in Q2 2018
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THE BIG PICTURE:
EUROPE WEST
With this Q1 2018 edition of Europe Quarter by Numbers, we are glad to bring you an
even fuller picture, as this report now includes 7 new markets (Austria, Denmark, Finland,
Ireland, Norway, Sweden and Switzerland). Our ambition does not change, we aim to
provide context and insight into how broader macroeconomic factors are influencing
consumer sentiment and spending patterns in the retail scene.
After tough times in the last few years, 2017 showed a dynamic economic environment
Olivier Lamare across Europe, with positive consumer confidence in the region reaching some of the
Retail Services
highest levels seen for some time. If Europe remains far below the global average for
Developed Markets
consumer confidence, early 2018 confirms the positive trend in markets like Germany,
Switzerland and Portugal (+5).
Amongst the national issues of greatest concern, health is high on the list. Some
countries like Portugal, Finland and Ireland show notable peaks, but the whole region
have it listed as concern, with great opportunities in this field (organic items and stores,
free from products, healthy innovations).
European Union (EU28) GDP growth slowed at the start of 2018 after a stronger than
expected 2017, in a recovery phase after a decade of financial and economic crises. Most
countries see their GDP growing at a slower pace this quarter. The more sluggish
economic growth (+0.4%) in Q1 was related to some degree to cold weather but the
consensus is that this is that start of a normalization of growth after a number of years of
monetary stimulus by the ECB.
After a strong end to 2017, FMCG performance in Q1 weakened slightly with volume
growth receding to +0.9% (down from +1.7% in Q4). However this is still close to the
underlying trend of the last 12 months. Value sales across Europe increased by +3.7%,
down from +4.4% in Q4. There was also a growth upside in Q1 from an early Easter in
2018 (calendar effect). A few markets lead growth in the region, like Germany (+4.4%)
and Portugal (+4.1%) with solid growth in value. In every market inflation is feeding
growth, but volumes are declining in several countries:
Belgium and Netherlands, France, Denmark, Finland and Switzerland. Putting money into
savings is the first priority for the majority of markets and consumers continue to navigate
the retail environment with a savings mindset, seeking the best deals when shopping, in
terms of price and promotions, but also brands and channels.
Private Label and Discounters are on the rise in many markets (France and Portugal
being exceptions), pushing hard and gaining share. Many retailers across the region have
revamped their own brands, upgrading ranges and investing in communication.
In a significant number of markets, FMCG leaders are also threatened by small brands
and local champions who are capitalizing on revived “local pride”, leveraging an appeal
from consumers toward local consumption and a push from retailers.
Inflationary pressures continue with unit value growth of +2.8%. At the moment there is no
indication across most of the bigger European economies, that FMCG spend is being
impacted by the continuation of moderate inflation. Looking ahead, Q2 will be better
indication of both consumer sentiment and shopper behaviour for the rest of the year.
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EUROPE WEST
MARKETS AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND EUROPE
GDP GDP
Q1 2018 vs Q1 2018 vs
Q1 2018 (annual % Inflation (annual % Inflation Q1 2018
Q4 2017 Q4 2017
growth) growth)
Spain 91 -2 2.9 0.9 2.0 0.8 Portugal 90 5
Denmark 114 -2 -0.8 0.7 2.3 1.3 Germany 108 5
Austria 100 -2 3.1 1.9 - 0.7 Switzerland 104 5
Italy 66 -2 1.4 0.8 1.6 1.5 Belgium 88 3
- - Sweden 99 2
2.1 2.0 Norway 89 2
2.7 0.8 Finland 82 2
3.1 1.2 Netherlands 101 1
1.2 2.4 UK 96 0
2.1 1.5 France 79 0
7.0 0.5 Ireland 103 0
CONSUMER CONFIDENCE INDEX
GDP and Inflation reflect % change per annum to Q1 or (-) indicates not available at time of publication
Source: Economist Intelligence Unit (EIU)/OECD/local government sources 5
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
EUROPE WEST
MARKETS AT A GLANCE
CONSUMER SENTIMENTS IN
EUROPE
WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS?
Type of concern
35 30 30
28 28 29
30 26
25 22 21 21
1918 20 20 20
20 17 18 17 18 17
15 16 15 16
15 12 13 13
11 11
8 8 9
10 6
5
0
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Health Job security
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Health 0 3 3 5 3 -1 0 3 3 1 4 -3 1 -2 3 4
Job security 0 -3 2 0 1 0 2 1 0 1 1 0 -3 2 1 -4
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Putting into savings 2 0 2 1 1 -2 4 6 0 7 4 8 3 5 1 5
Holidays / vacations 1 -1 3 3 6 5 -1 2 6 5 1 -4 0 -1 5 3
New clothes 0 -2 0 2 -3 3 0 4 8 2 2 -2 0 -3 0 1
Bars reflect Q1 2018. Table shows comparison to Q4 2017
Saving remains a key priority for majority, with an increasing focus for
consumers in Italy and the UK.
6
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
LOOKING THROUGH EUROPE WEST FMCG LENS
FAST MOVING CONSUMER GOODS MARKET DYNAMICS – Q1 2018
Weighted average – WEST EUROPE – 15 countries
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
4.4%
4.1%
0.8%
0.2%
3.3% 3.1% 1.1% 3.2%
3.0% 3.1%
2.9% 2.8%
2.6% 0.6%
1.8% 3.6% 1.0%
0.8%
3.0%
2.9% 1.8% 2.4% 3.4%
1.4% 2.0% 2.6%
1.9% 2.6%
1.0%
2.0% 2.0%
0.8%
1.5% 2.1% 0.7% 0.6% 0.7%
0.3%
-0.7% -0.8%
-0.6% -1.3% -1.0%
-1.3% -1.0%
DENMARK (-0.8%)
UK (+0.9%)
IRELAND (+2.1%)
NETHERLANDS (-0.2%)
GERMANY (+0.8%) BELGIUM (-0.5%)
FRANCE (+0.3%) AUSTRIA (+1.4%)
SWITZERLAND (-0.1%)
ITALY (+2%)
PORTUGAL (+1.9%) SPAIN (+1.6%)
Avg. volume growth decreasing versus last period Colour coding indicates growth or declining trend
Avg. volume growth increasing versus last period compared to same 6 month period year ago
7
Average volume growth of Q3’17 & Q4’17 vs Q3’16 & Q4’16.
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AUSTRIA SNAPSHOT
The Austrian economy is enjoying positive times, with all macroeconomic indicators
pointing in the right direction. In 2017 we saw a GDP growth rate of 2.9%—the best
in several years. According to the Central Bureau of Statistics, we can expect this
rate to improve even more in 2018. Whilst still considered a strong export country,
current economic growth is also supported by solid domestic consumption. The
ongoing low Eurozone interest rates, as well as an income tax changes, appear to
Judith Kuiper have enticed consumers to spend more.
Market Leader
Alpine
The FMCG industry in Austria recorded a strong first quarter due to an earlier Easter
season. It saw a 5.1% rise in value delivered alongside record high consumer
confidence levels in late 2017 and in the first quarter of 2018. Hypermarkets led the
charge on this value growth with high single digit numbers at the cost of a slow
down in growth numbers for Hard Discounters. However, there were other drivers in
the trend, primarily in Dairy where a butter shortage drove significant price inflation
within the category.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.5 3.6
3.1 102 100
2.9 94 94
2.6 88 85 87 87 86
2.4 81 85 81
2.2 2.2 2.2
1.9
1.7
1.4
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
6.3%
5.2%
4.3%
3.9% 3.7%
3.4% 3.6%
1.1% 3.3%
2.6% 2.4%
2.7% 2.5% 3.1%
3.2% 1.8%
0.6%
2.3% 2.6%
1.7% 1.2% 0.2% 1.4%
2.3% 1.5%
0.4% 0.2% 0.6% 1.1%
0.5%
The positive economic climate drove solid volume growth for FMCG.
4.3%
5.0%
8%
23% 4.7%
24%
5.5%
3.9%
15%
4% 0.5%
2%
8% -3.0%
6.1%
40%
2.1%
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TOTAL AUSTRIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
Dairy growth was led by price inflation on Butter and premiumisation within
Cheese. Coffee pods are driving Hot Beverage growth.
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BELGIUM SNAPSHOT
Similar to the trends we saw last quarter, the Belgian economy is doing well, but
still has some room for improvement. All economic indicators, including
employment, disposable household income, and confidence levels are growing
in the right direction, yet the growth of the Belgian economy still remains slower
than its neighbours.
As we know from the Consumer Confidence Index figures, Belgium is a country
Pedro Lima
of savers, with consumers often conservatively putting savings aside, which can
Managing Director, have an impact on domestic demand and GDP.
Benelux and Alpine
Regions.
In the first quarter of 2018, we saw a nominal growth rate for the FMCG market
of 1.4%, which was again driven by price (2.1%) rather than an increase in
volumes of products sold (-0.7%). Growth was largely driven by Large
Supermarkets (5.3%), but Small Supermarkets (-9.1%) saw a considerable
contraction when Superettes, which focus on proximity and convenience, grew
8.5%, and Discounters, with a focus on Fresh Products, grew 2.9%.
The biggest nominal value growth was seen in the Confectionary and Bakery &
Toast categories, with the former traditionally growing due to the Easter holiday.
Dairy was also up, but this was in part due to price increases of milk and butter.
In our recently released Shopper Trends report, we see that loyalty is
decreasing amongst shoppers, with the amount of traditionally loyal consumers
down by almost 15% within one year. Based on these figures, we suggest
retailers and manufacturers should capitalise on these disloyalty trends by
enticing shoppers to switch to their product, or their store.
How? Play local. Play to local nuance, such as locally sourced ingredients.
There is a lot of growth to be gained for players that use all the datasets they
have at their fingertips to really personalise their products for consumers.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.0 95
89 88
2.0 2.0 1.9 1.9 2.0 87 87
86
1.8 85 84 85
1.5 1.6 1.6 1.5
1.4
81 81 81
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS - BELGIUM
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
2.8%
3% 1.5%
12%
17% 0.5%
5.3%
18% -9.1%
50% 2.9%
8.5%
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TOTAL BELGIUM – SUPER CATEGORIES PERFORMANCE
13
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DENMARK SNAPSHOT
The Danes have left the financial crisis behind them and their consumer confidence
remains the highest in Europe, but they are not yet in the same spending mode as
they were before. But the macroeconomic climate is ripe—low unemployment, high
spending power, increases in disposable income, increasing real estate prices and
low interest rates.
What the Danes are hungry for is change. Not as a revolution, but rather as an
Cecilie Westh evolution resultant of generational change. Generation X and the Millennials have
Managing Director new and different expectations and needs than their parents had when they were in
Nordics the same life stage. At the same time, the Boomers have left, or will leave, the job
market within the next few years. This will open up free time for different kinds of
shopping and perhaps eating out more frequently and for different meals. The
demand and interest around health will also increase among the Boomers, which
leads to further opportunities within product offerings.
As Danish retailers have upgraded their banners and concepts over the past five
years, we have seen increased demand for convenience, premium, indulgence and
healthy solutions. At the same time we see manufacturers seeking new shopper
touchpoints. It seems that many Danes want it all, and at a value-for-money price
point, requiring the perfect mix of shelf and promotional pricing across channels.
This leaves both retailers and manufacturers with an increasing pricing and
promotion challenge that they have to face. This challenge is gaining momentum as
the market is becoming more and more transparent due to the access to things like
price comparisons or outright purchase on digital platforms.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
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FMCG MARKET DYNAMICS
(weighted average)
MAT TY Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
2.2%
2.1% 2.3% 2.6%
1.2% 1.9%
0.7% 1.1%
0.9%
0.0% 1.2% 0.6%
-0.6%
-0.3% -0.4%
-0.9% -0.4% -0.5% -0.1%
-0.7% -1.3%
-0.2% -1.4%
-1.5%
7%
1.2%
1.3%
0.5%
93%
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TOTAL DENMARK – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
16
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FINLAND SNAPSHOT
2017 was the turnaround year for Finland after several years of economic decline.
GDP growth of 2.6% was the best since 2011, mainly fuelled by growth in
investments and increased exports. However GDP is not expected to overcome its
2008 level before next year.
Though consumer confidence is moving in the right direction, the index of 82 still
remains below the rest of the Nordics and the European average of 87—but
Cecilie Westh personal finances and consumer spending intentions are at their highest in seven
Managing Director years. With inflation and interest rates at low levels, economists are predicting that
Nordics
growth this year and next will be based primarily on private consumption as well as
investment.
Following the general climate, the FMCG market has been sluggish for several
years. Retailers have been luring cautious consumers with price reductions and
various ad campaigns. As a result, growth prevails in channels offering the best
value for money, like Hard Discounters and Hypermarkets. Finland remains
predominantly a country of big stores, with value share of online grocery still below
1%.
Two interesting target groups in Finland are single households and ageing
consumers. In 2017, 43% of Finnish households had only a single occupant. On the
other hand, the biggest share of FMCG spend, nearly a third (31%), was delivered
by couples over 55 years old.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.1
85 87 87 86
2.8 81 81 81 80 82
2.7
2.5 70
2.4 68
2.2 64
1.1
0.8 0.9 0.8
0.7 0.7
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
2.1%
1.9%
1.6% 1.4% 1.6% 1.8%
1.3% 1.2% 1.4% 3.2% 2.6%
0.5% 1.1% 2.1% 0.6%
1.5% 1.7% 0.8%
1.1% 2.1% 1.0%
1.8%
Finland
1.6%
6% 8%
4.0%
-0.8%
10% 4.6%
1.2%
27% -4.4%
Total FMCG Hypermarket Supermarket Superettes Hard Discounter Low Price Stores Other Shop Types
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TOTAL FINLAND – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
19
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FRANCE SNAPSHOT
At a time when France celebrates its 20th anniversary of its victory in the 1998
Football World Cup, the current climate should also be bright for consumption.
Consumer confidence remains at an all-time high this quarter despite ongoing social
tensions and strikes and broader challenges to the country’s economic health. In
other words, consumers are signalling they have confidence in spending a little more
or spending differently.
The FMCG market saw a 1% rise in value this quarter. However, high volume losses
at the beginning of the year have not been compensated for and the quarter stands
Laurent Zeller negative in terms of volumes. Where there has been growth, it has mostly been in
Managing Director
premium products. Sweet Grocery accounted for more than a third of total FMCG
France
growth this quarter, largely explained by a calendar impact, due to the timing of
Easter this year. By contrast, Homecare and Personal care suffered from an even
higher structural decline as promotional activity was shifted to the week following
Easter.
Beyond these mechanical trends driven by timing on the quarter, the French FMCG
market continues to see longer term trends towards premiumisation and a growing
demand for Fresh Non-Dairy and Dairy, organic and sustainable products, small
brands, “click-and-drive” services and urban convenience stores.
Proposed new food legislation includes regulations for capping promotion levels.
This would obviously have a significant impact on how manufacturers and retailers
can drive both volume and value, but it remains unclear what the detail of the
changes might entail when fully implemented.
Meanwhile, we continue to see an ageing population, a concern for the FMCG
industry as the 65+ age group is expected to grow 2.7 million people by 2025.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
2.6 85 87 87 86
2.3 81 81 79 79
2.1 75
69 71
2.0 66
1.5 1.5
1.2 1.2 1.2
1.0 1.0
0.7
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
3.2%
2.9%
0.1%
2.0% 3.3% 1.7%
2.0%
0.2%
0.2% 0.8% 1.1% 1.0%
1.9% 0.3% 0.3%
0.1% 0.5% 0.6% 0.5% 1.2%
0.0% 1.3%
0.0%
-0.2% -0.2% -1.0%
-0.1% -0.1%
-0.7%
-0.7%
2.0%
11%
0.6%
5%
8% 41% 2.2%
3.1%
8.5%
34%
3.1%
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TOTAL FRANCE – SUPER CATEGORIES PERFORMANCE
Local brands, and small and medium companies are still growing.
22
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GERMANY SNAPSHOT
With GDP growth at 2.3%, the upswing of the German economy continued in Q1
2018. Growth was driven by a strong global demand, increasing investments
and continuously solid domestic consumption. The high demand for labour in
large parts of the economy ensures record employment levels. Current
economic indicators suggest that the long-lasting positive trend will continue,
although some risks remain. Consumer confidence remains high and far above
the European average (108 versus 86 for Q1 2018).
Ingo Schier The FMCG market was able to take its strong 2017 momentum into Q1 2018
Managing Director and achieved a significant increase in sales of 3.8% compared to the previous
Germany
year, mainly driven by the early Easter business in March.
E-commerce still represents an approximate 1% share of Total FMCG. In
categories where online is important, the market is still dominated by pure e-
players. Online business remains more important for near-food than for food
categories.
Taking a closer look at the German FMCG market, food increasingly becomes a
lifestyle: 84% of consumers are considered conscious eaters. Individual attitudes
and habits thereby determine which food is bought where and at what price. This
complexity of today´s eating preferences impacts beyond the kitchen not only to
supermarket shelves but also regarding product innovation and raw material
production.
As a significant change in the economic developments is not expected in the
short term and similarly consumer confidence is likely to remain at a high level,
the current outlook continues to be positive. With the World Cup coming up in
June, the food and sporting goods sectors can especially expect a boost in
business.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
108
2.9 100 101 103 102 103
2.7
85 87 87 86
2.3 2.3 81 81
2.1
1.9 1.9
1.7 1.6
1.6
1.3
1.0
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
4.4%
0.1% 4.0%
0.8%
3.3% 0.9%
2.8%
1.7%
1.0% 1.9%
1.2% 3.2% 3.6%
1.4% 2.9% 3.1%
3.2% 0.9% 1.3%
0.7% 0.4%
-0.2% -0.3%
-0.5% -0.1% 0.0% -1.1%
-0.6% -0.8%
-2.1%
Germany
Recent market growth has been mainly driven by price increases the earlier
Easter season.
3.3%
10%
4.6%
41%
-3.5%
42%
3.5%
8% 3.6%
Hypermarkets benefited the most from the early Easter season, while
Small Supermarkets suffered from shop closings.
24
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TOTAL GERMANY – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Dairy price increase is still a driver, while Easter generated seasonal peaks
for chocolate confectionery and traditional coffee sales.
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IRELAND SNAPSHOT
Price deflation was the overriding trend in 2017, driven by the supermarkets’ focus on
value messaging and own label to drive volume growth and defend against the
discounters. In the first quarter of the this year, we saw this price deflation stabilise with
volume growth accelerating to +2.6% and value growth to +2.9%. This is thanks, in part,
to the lowest unemployment level in a decade and high consumer confidence.
This year has already brought a more buoyant economy and a more buoyant retail
sector; and we expect both value and volume growths to continue. Brands are also
Paul Walker recovering, performing equally as well as own label at the total market level with value
Managing Director growths of +2.1%. And, while the Discounters are still in growth, this has slowed
United Kingdom & Ireland somewhat as result of last year’s retailer defense strategy.
For Irish shoppers, health and wellness is the number one concern as 70% now actively
seek healthier food and drink products and 56% seek healthier snacks . We see
retailers and manufacturers responding by introducing healthier products, with a focus
on NPD, including dedicated spaces in store such as free-from aisles. The sustainability
trend is also growing and we expect this to be an important influence on shopper
behavior. Retailers and manufacturers will need to work together to meet these new
shopper demands as they have done with the health trend.
In terms of retail channels, we should see some interesting developments in both online
and convenience. Although online makes up less than 1% of the total retail market, it is
growing and we expect a continued focus on further developing this channel. Similarly,
convenience retailers already have a well developed urban trade but there is a big
opportunity to better meet the shopper needs for healthy and convenient food on-the-go.
Getting this right will help when it comes to competition from the many healthy food
franchises that cater to this specific shopper need.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
8.8 85 87 87 86
81 81
7.8
6.8 7.0
5.8
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
4.3%
Volume growth shows no sign of slowing in 2018. Small positive price changes
drove value growth just ahead of volume.
2.9%
20%
3.2%
47%
1.7%
33%
4.2%
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
TOTAL IRELAND – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
28
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ITALY SNAPSHOT
In the first quarter of 2018, Italy’s national GDP increased by 0.3% in
comparison with the previous three months and, according to the Bank of Italy,
we should expect it to grow on a full year basis by 1.4%. However, uncertainty
after the last national election that left Italy with an interim government until new
elections later in the year will mean ongoing disquiet in the marketplace.
On the FMCG front, we are seeing growing sales volumes whilst unit value
growth has slowed. In simple terms, we are seeing consumers continue to fill
their baskets but they are opting for somewhat cheaper products, perhaps to
counterbalance inflation (1.2% in March). As far as retail channels are
Giovanni Fantasia concerned, all formats except so-called “traditional” stores (usually more
Managing Director expensive) have grown. Meanwhile, e-commerce is delivering a slowly growing
Italy 1.5% of total FMCG sales.
Italy is still at the bottom of the Digital Economy and Society Index, a composite
index produced yearly by the European Commission to track the evolution of
member states in digital competitiveness. At the same time, the country is
seeing birth rates fall and people 65+ years old now make up 22% of the
population.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
1.8
1.6 85 87 87 86
1.6 1.6 81 81
1.4 1.4
1.3 1.3 65 68 66
1.1 1.1 57 58 58
0.8
0.2
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
4.0%
3.3% 3.1% 3.1% 3.1%
3.1%
2.4% 2.6% 1.7% 2.4%
2.1% 1.6%
1.2% 1.4% 0.7%
2.1% 1.3%
0.9% 0.9% 0.6%
0.3% 0.2% 0.7%
-1.0% -0.5%
-0.9% -0.5%
Italy
3.3%
5%4% 3.4%
26%
17% 5.1%
-1.4%
10% 4.3%
7.7%
37%
-7.5%
Drug Stores outstanding growth was boosted by St. Valentine’s Day and
Carnival (makeup, perfumes, etc.) activities.
30
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TOTAL ITALY – SUPER CATEGORIES PERFORMANCE
Food (especially fresh food) is driving growth. The latest change is the loss
of traditional “basic” ingredients like pasta and rice vs. ready-to-eat (yet
healthy) products.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
NETHERLANDS SNAPSHOT
The Dutch economy is still going strong, but some analysts believe it can do
even better. Analysts forecast a 2.8% expansion of GDP in 2018, which means
that the Netherlands would grow for the fifth consecutive year above the
Eurozone average. Though Q1 growth was a bit slower than expected, analysts
believe this is most likely due to geopolitical tensions and cautiousness, rather
than a real softening of the economy.
Wages were up in the first quarter, due to a very competitive labour market and
Pedro Lima
shrinking unemployment. As the job market is forecast to stay strong, we
Managing Director,
Benelux and Alpine anticipate this may impact consumer spending—alleviating some of the cautious
Regions. spending apparent in recent years.
The Dutch FMCG market experienced nominal growth of 2.6% during the first
quarter. Again, this growth is largely due to price increases (measured at 3.4%
during the first quarter) rather than volumes sales, which declined by -0.8%.
With the accelerating growth of e-commerce in the Netherlands, it is not
surprising that Dutch consumers spent €1.5 billion in online storefronts in other
European countries last year, according to Statistics Netherlands. Though the
Netherlands has its own strong players in e-commerce, borderless shopping is
on the rise, raising the competitive bar even further. This trend is still primarily in
non-FMCG products, but demonstrates growing confidence levels in online
shopping that is likely to increase demand for online in the FMCG space.
Additionally, with the rise of disposable income, the decrease in unemployment,
and the ever growing market for out-of-home dining and home delivery, retailers
and manufacturers are looking toward meal kits as a great way to engage
consumers. These are helping create propositions that make daily life healthier,
easier, faster and more convenient.
.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
1.3% 0.3%
3.6% 3.8%
3.2%
2.8% 2.6%
0.5%
3.3% 1.6% 3.3% 3.5%
0.8% 1.0% 3.4%
2.3%
0.6% 1.1% 1.0%
0.4%
-0.1% -0.3% -0.5% -0.5%
-0.6% -0.8%
-1.5%
Price continued to dictate the growth of the FMCG market, while volume sales
were down.
3.2%
4%
11%
3.5%
1.8%
85% 0.0%
33
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TOTAL NETHERLANDS – SUPER CATEGORIES PERFORMANCE
Confectionery sales were up due to the Easter holiday, but the real growth
was seen in Dairy (especially butter) due to rising prices of milk.
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NORWAY SNAPSHOT
After a year of historically low growth for groceries in 2017, the Norwegian market
experienced a return to higher growth rates in the first three months of the year.
Growth came in at 2.4%, partially helped by the calendar effect of an earlier Easter
this year that boosted some categories.
Official figures from Statistics Norway (2017 data) say the total border trade rose by
9.1%, reaching NOK 15.1 billion in sales. However, the growth in cross-border trade
Cecilie Westh was lower than expected, with a decline in the fourth quarter of 2017 of about -6%.
Managing Director Nevertheless, we estimate that about NOK 9.8 billion worth of groceries were
Nordics purchased abroad in 2017. Six out of 10 Norwegians purchased groceries in one of
the neighbouring countries during the last 12 months; fresh meat,
chocolate/confectionery and mineral water topped the list of products put into the
shopping cart.
According to Nielsen’s Shopper Trends 2018 report, approximately 11% of
Norwegian consumers have tried online grocery shopping but most of that was
through wholesale or pure online players.
Traditional grocery stores also met competition from other players, and we see a
particular pressure from the so called "dollar stores" including Rusta on certain
categories within nonfood, packed food and non alcoholic beverages. New stores
seems to be an important part of their strategy.
Food and online food solutions continue to give the grocery chains fierce
competition, but we have also seen consolidation with some of the niche online
providers.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.6 3.6
90
89
87 87 87
2.6 86 86
86 85
2.1 2.1 2.1
2.0
1.8 82
1.5 1.6 81 81
1.3
0.8
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
4.3%
The overall inflation and premiumization is driving the nominal value growth.
2.0%
11% 6%
0.9%
29%
1.5%
1.4%
55%
7.1%
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TOTAL NORWAY – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
A handful of mainly local manufacturers are driving the market and has
a high value contribution share.
37
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PORTUGAL SNAPSHOT
In Portugal, the FMCG market began 2018 with a very positive performance, recording
nominal growth of 4.1%. Portuguese consumption shows signs of post-crisis recovery
and, in response, consumer behaviour is clearly changing.
Despite sometimes being culturally pessimistic, Portuguese people are more and more
confident, with a significant improvement this quarter. They believe in improvements for
their personal finances and job prospects, and increasingly consider that now is a good
time to buy what they want or need.
Gustavo Nuñez
In this context, there is greater consumption both in-home and out-of-home. The
Managing Director shopper looks for more leisure time, more quality, more innovation, and more
Iberia convenience. We have seen sharp growth in the more "premium" segments of each
category, proving that the consumer is willing to pay a higher price for products that
bring more satisfaction. It is these higher priced segments that add value to categories.
On the other hand, being one of the few countries in which the balance between
personal and professional life is one of the main concerns, Portugal has a very positive
trend regarding convenience. Small formats occupy the largest share of the market and
are the ones with the highest growth. Consumers look for quick and easy shopping, as
well as more convenient products that make their lives easier, and are willing to pay
more for it.
In fact, this quarter’s nominal growth was especially driven by the price effect with a
growth rate of 3% compared to the same period last year. Consumers are trading up on
their purchases by making more expensive choices and adding value to their shopping
baskets.
By volume, consumption remains relatively stable, with an increase of 1.1%. In this
positive context, Portuguese FMCG brands and retailers must invest in the quality and
constant innovation of products and services. And do this by keeping in mind key
trends, such as health, wellness and convenience.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.0 87 85 87 84 90
2.9 85 86
81 81 82
2.4 74
2.4 2.4 70
2.0
1.8
1.6
1.5
1.3
0.8 0.8
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
6.7%
6.1%
2.9%
4.8%
4.0% 3.7% 4.1%
1.6%
3.1% 3.0% 1.1%
0.3% 0.2%
2.0% 3.4%
2.7% 1.6% 2.8% 3.8% 3.0%
1.4% 3.2% 2.4%
0.6% 0.3% 0.4% 0.6% 1.2%
1.2%
-0.9%
Unit Value Growth Volume Growth Nominal Value Growth
Portugal
8%
26% 4.8%
3.0%
5.4%
66%
5.6%
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
TOTAL PORTUGAL – SUPER CATEGORIES PERFORMANCE
The recent sugar tax continues to drive Non Alcoholic drinks growth,
along with mineral water’s dynamism.
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SPAIN SNAPSHOT
Spain’s economic recovery is still a work in progress. The Government recently
raising the expected GDP growth rate in 2018 to 2.7% and forecasting a drop in the
unemployment rate, from 16.5% at the end of 2017 to 15% expected by the end of
2018.
Once again, tourism has played an important role in supporting the economic
recovery. At the end of the first quarter, Spain registered an increase of 6% in
international tourists who spent 7.7% more than in the same period of last year.
These visitors remain an ongoing opportunity for retailers operating in heavily visited
Gustavo Nuñez
Managing Director areas. That said, it will be important to keep on eye on increasing petrol prices as it
Iberia will be a challenge for the economic recovery and could have a negative impact on
family budgets.
Price tends to be the key factor in FMCG. Whereas in 2017, demand was the main
driver, now inflation is supporting growth this quarter (whereas inflation last year was
very low) with obvious negative consequences for volume growth.
Population dynamics are not going to help FMCG market growth moving forward,
tourism has become a partial substitute and the FMCG industry has to innovate.
This requires understanding evolving consumer needs (aging, health, convenience,
etc.) and focusing on all the market niches that are growing in this context such as
organic food and on-the-go solutions.
As households are getting smaller and smaller, the industry has to satisfy specific
needs arising in this new demographic reality, and in terms of retail, small stores
have become a must but the physical experience is changing. Square meters
dedicated to newer categories such as ready-to-eat provide pathways to grow. We
also expect FMCG e-commerce to grow, albeit not at a rapid rate.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
91 91 93 91
3.0 3.1 3.1 3.1 86 85 87 87 86
3.0 2.9 81 81
2.8 77
1.9 1.9
1.5
0.9
0.8
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
5.3%
4.1% 4.3%
3.9% 3.7% 3.7%
3.1% 1.5% 3.2% 3.1%
1.9%
2.3% 2.4% 0.2%
1.4% 2.3% 2.4% 2.8%
0.9%
2.7%
2.2% 2.4% 1.5% 2.9%
1.7% 1.6% 1.3% 2.1%
1.0%
-0.1%
Spain
Inflation boosted Spanish FMCG value growth while volume growth was flat.
5% 4.1%
15%
0.3%
5.0%
2.9%
79%
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TOTAL SPAIN – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
Categories related to convenience such as Ready Meals, Frozen or Canned Food and
Prepared Meals, are the most dynamic as consumers seek time saving and ease.
Smaller manufacturer brands grew fast as they are more agile while Private Label also
enjoyed strong grow.
43
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SWEDEN SNAPSHOT
The Swedish FMCG market has provided strong, positive trends in recent years,
with both value and volume growth. But in 2017 the landscape changed and
consumption didn’t follow the norm—the growth only came from higher prices and/or
premiumisation of categories.
Swedish consumers have demonstrated mostly stable confidence levels over time.
There was a small drop in the Consumer Confidence Index after the terror attack in
Cecilie Westh Stockholm in April last year. But the country has recovered well and in Q1 2018 our
Managing Director
index ended at 99, above the European average of 87.
Nordics
2018 has started well for the retail market with total FMCG nominal value growth of
3.2% (unit value growth 2.6%) with consumption on the rise. We should note that the
early timing of Easter offered a sales boost.
We are seeing most of the growth coming from price-driven opportunities in the
Hypermarkets and Discounter formats. All categories except Household Products
grew, with the strongest growth coming in Dairy, Beverages, Frozen Food and
Confectionary.
Private Label continues to power up the Swedish grocery market (up 5.2% this
quarter), along with organic food, albeit at a slower pace. Meanwhile, we expect
further interest to come from shoppers on organic products and a desire for more
environmentally-friendly “green” products.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.3
2.9
2.6 2.6 95 98 97 99
91 94
85 87 87 86
2.2 81 81
1.9
1.8 1.8 1.8
1.4 1.5
1.0
Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
0.4% 4.0%
3.3% 3.4% 0.7% 3.2%
3.1%
2.6% 0.6%
1.6%
1.0% 2.9% 1.1% 3.0% 3.3%
1.2% 3.6% 2.6%
1.2% 1.1%
0.9% 1.8%
0.2% 0.1% 0.7%
Sweden
6% 3.3%
6%
5.6%
37%
20% 2.0%
1.3%
0.1%
31%
5.4%
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TOTAL SWEDEN – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
Dairy and Beverages growth was mostly due to price increases and
premiumisation.
Private Label had the highest nominal value growth due to expanding
product range. Smaller manufacturers continue to move faster to
change and benefit from consumer desire to buy local products.
46
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SWITZERLAND SNAPSHOT
The Swiss economy continues to perform well in early 2018. GDP is growing, the
inflation rate is low (0.6% in February) and the labour market is in good health
(unemployment rate of 2.9% in March). The industrial and service sectors contributed
equally to the overall positive report card for the country. On the expenditure side,
consumption and construction investment supported growth. Additionally, the Swiss
Consumer Confidence Index reached 104 this quarter, significantly above the European
average.
Judith Kuiper
Market Leader The Swiss FMCG sector has seen similar trends this quarter to those experienced in
Alpine 2017. There was some slight growth in average price levels amidst declines in volume.
Growth in value is largely coming from Food, and more specifically, Beverages. But
fresh food and convenience categories have also been strong contributors. Headwinds
have continued to hit Household and Health and Beauty departments, mostly due to
price pressures.
The good news is that price pressures are easing and cross-border shopping in physical
stores is declining for the first time since the financial crisis of 2008. But purchasing
FMCG products abroad will not cease as it is now an established habit. Nielsen
numbers show that about 2.2% of FMCG expenditures are now spent abroad. More
than a third of Swiss households bought FMCG products at least once outside the
country during the past 12 months.
Meanwhile, affinity and adoption rates of new retail technologies are very advanced.
Switzerland ranks second in Europe when it comes to using digital shopping
technologies such as handheld scanners. Swiss households are buying FMCG products
online 10 times per year. We expect connected shopping to further grow and become a
regular habit for most households across the country. With 2.1% online share, e-
commerce in FMCG is starting to reach an advanced level but the journey has just
begun.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
102 104
97 98 97 99
1.9 85 87 87 86
81 81
1.2
0.9
0.7 0.8 0.7
0.5 0.5 0.4 0.5 0.0
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
1.8%
1.4% 1.5%
0.7% 0.1%
1.3% 1.4%
1.1% 1.2% 1.0%
0.6% 0.7%
1.0% 0.7%
0.4% 0.5%
-0.3% -0.7% -0.4% -0.3%
-0.7% -0.4%
-0.7% -0.6% -0.6%
-0.2% -0.7%
-1.3% -0.4% -1.3%
Switzerland
4%
-0.3%
13% 25%
-1.0%
-1.0%
24% 1.7%
0.3%
33%
-4.2%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Supermarkets Department Store
Convenience trends and high frequency locations boosted small format stores,
while Department Stores are declining.
48
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TOTAL SWITZERLAND – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
Food growth was driven by Beverages and convenience categories, while price
pressures see Homecare and Health & Beauty categories growth decline.
49
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UK SNAPSHOT
The unseasonably cold weather in February and March held back spend, but with the
benefit of the early Easter trade reflected in Q1, growth remained strong at +3% with a flat
volume growth of +1%.
The discounters saw channel growth of 14% thanks to their continued store openings
whereas the grocery multiples, helped by inflation, achieved +2.3% sales growth, with
sales at larger stores continuing to improve. The impulse channel lags further behind,
however, with just 0.5% growth.
Paul Walker The continued interest in health, convenience and private label carried on strong through
Managing Director
the first quarter with almost one in four shoppers intending to buy natural or healthier
United Kingdom & Ireland
products, and premium private label growing by +5% over the last 12 months.
This is generally the time of year when personal finances are under the microscope. In Q1,
shoppers tend to batten down the hatches as they pay off Christmas debt, put extra aside
in anticipation of higher utility bills while some even start to save for summer holidays.
Although inflation peaked during the quarter with CPI at +2.9%, this hasn’t yet translated
into FMCG volume increases as shoppers remain cautious about discretionary spend. Q1
was a watershed but with inflation having slowed, summer on the horizon, and Q2 bringing
extra bank holidays and a royal wedding, we anticipate that shoppers will get back into the
swing.
The retail industry is seeing some major structural changes in response to changing
shopper behaviours. The major supermarkets are now focused on improving the overall
shopping experience and making shopping more convenient to better defend against the
discounters and the online disruptors. The two most recent examples being the
Tesco/Booker merger and the announcement of the Sainsbury’s/Asda merger, with further
consolidation likely on the horizon.
Manufacturers need to look closely at their relationships with retailers. The path to
sustainable growth is to work effectively together and to ensure a solid understanding of
their shoppers so they can be well prepared for the opportunities of tomorrow.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
2.7 2.8
2.6 106
2.4 102 99 99 96 96
2.2
2.1 85 87 87 86
2.0 81 81
1.9 1.8
1.5 1.4
1.2
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
0.4%
3.7%
2.9% 2.8% 3.0%
0.4% 1.0%
3.3% 2.1% 0.9%
2.2% 2.9%
1.4% 2.4% 1.3%
1.4% 0.5% 1.8% 2.0%
0.6% 0.7% 1.7%
0.1%
-0.4% -0.3% -0.9%
-0.4%
-0.8% -1.6%
-1.9%
UK
The FMCG market had balanced volume and unit value growth in Q1
51
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TOTAL UK – SUPER CATEGORIES PERFORMANCE
Best performing categories in Q1 were Frozen, Impulse and Alcohol, illustrating the
overarching trend of shoppers looking to save while still treating themselves.
52
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THE BIG PICTURE:
EUROPE EAST/CENTRAL
As you will read in this quarter’s reports, all across Eastern and Central Europe a myriad of
factors are influencing consumer sentiment and the performance of FMCG markets. Political
unrest, new laws and government policies, inflation rates, Easter dates and even weather
conditions are among the many mentioned by our market leaders in Q1.
Understanding how these impact FMCG market performance can be challenging at times,
especially when multiple drivers are often at play in the one market. While our QBN
indicators provide strong clues to what is going on, sometimes to really understand the story
we need to dig deeper and look at the relationships between the different factors.
Daniel Chorbadjian
Managing Director In Q1, we see many such examples at the macro level. For instance; the Czech Republic,
Eastern Europe Hungary, Latvia and Slovakia all have growing GDP, relatively low inflation rates and
increasing consumer confidence. However, while FMCG growth in the first three countries is
relatively strong and balanced, in Slovakia retail spend slowed. Meanwhile, Kazakhstan,
Turkey and Ukraine are also enjoying strong GDP growth, but high inflation and other factors
in these markets have dampened consumer confidence and led to different FMCG results. In
Kazakhstan inflation rises pushed people into a savings mode and slowed FMCG growth
while in the Ukraine wage increases offset inflation and led to accelerating FMCG growth.
Many influencing factors are even more specific and unique to a country. In this quarter alone
we see the impact of minimum wage increases in Latvia, reduced Sunday trading in Poland,
and voluntary food labelling changes in Russia, to name just a few.
Roberto Pedretti Each quarter, our Nielsen market leaders help reveal the story behind the numbers in all our
Group Managing focus countries. However, it is more important than ever for FMCG companies to also closely
Director Turkey and track the various dynamics at play in each country where they operate. By doing so FMCG
Central Eastern players will have clearer insights into how the market will evolve in the coming quarters and
Europe be better positioned to develop the strategies needed to manage risks and seize
opportunities.
Despite the unique context of each market, regional trends are still apparent. One clear
insight from the recent QBNs for Eastern and Central Europe is that smaller players in both
the retailing and manufacturing space are winning market share as they prove more agile to
adapt to short-term market cycles. With that said, it is also important to keep an eye on the
future and build longer-term strategies and capabilities. In the appendix of this QBN edition,
we have visualised a few macroeconomic forecasts by country to help guide FMCG thinking
on forward-focused strategies and decision making. Some of the general takeaways when
we look across Eastern and Central Europe are as follows:
Although these will not be new insights for most readers, how FMCG companies are
integrating these factors into their planning and development varies considerably. For
example, some players are looking to develop age-focused health products while others are
intent on expanding their retail outlets into smaller towns.
We hope our insights on the future macroeconomic environment and “What’s Next” in the
evolving consumer, retail and packaged goods environment can help inform your strategies.
53
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EUROPE CENTRAL & EAST
MARKETS AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND EUROPE
GDP GDP
Q1 2018 vs Q1 2018 vs
Q1 2018 (annual % Inflation (annual % Inflation Q1 2018
Q4 2017 Q4 2017
growth) growth)
TURKEY 89 -23 5.6 10.3 5.2 2.0 LATVIA 86 13
BULGARIA 81 -8 3.5 2.0 4.4 1.9 CZECH REP. 108 4
UKRAINE 58 -3 3.1 13.8 4.4 2.0 HUNGARY 78 4
KAZAKHSTAN 79 -3 4.1 6.8 3.6 2.4 SLOVAKIA 90 4
LITHUANIA 77 -2 3.5 3.4 1.5 0.3 GREECE 61 2
RUSSIA 68 -1 1.0 2.4 4.0 4.7 ROMANIA 91 1
5.1 6.0 BELARUS 60 0
5.1 1.5 POLAND 103 0
3.6 3.1 ESTONIA 81 0
GDP and Inflation reflect % change per annum to Q1 2017 /latest available data
Source: Economist Intelligence Unit (EIU)/local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. 54
Copyright © 2018
Copyright The
© 2017 Nielsen
The Company
Nielsen (US), LLC. Confidential and proprietary. Do not distribute.
Company
EUROPE CENTRAL & EAST
MARKETS AT A GLANCE
CONSUMER SENTIMENTS IN
EUROPE
0
EU BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
Health Job security
EU BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
Health 0 2 6 3 1 0 2 4 -2 -4 3 -4 -1 0 -6 1
Job s ecurity 0 -5 -1 1 -5 0 0 4 3 -8 2 -2 -1 4 1 -3
EU BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
Putti ng i nto s avi ngs 2 5 1 5 3 6 1 -2 2 -7 2 -2 -1 3 0 -2
Hol i days / vacati ons 1 4 -4 8 -1 5 2 0 2 -3 4 2 -4 2 -2 -4
New cl othes 0 -2 -9 -1 -5 5 2 -3 -1 -4 6 0 -1 -3 4 -6
BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
20.8%
2.3%
15.6%
10.5%
13.3%
8.0% 8.3% 8.6%
0.9% 4.7% 5.1%
4.9% 5.7% 4.4% 1.6% 10.4%
4.6% 4.6% 5.8% 4.7% 4.8% 1.2%
2.6% 3.5% 3.0%
2.7% 4.7% 2.8% 2.6% 3.9% 3.0%
3.1% 3.1% 3.7% 3.8% 3.6%
1.9% 0.9% 1.8% 1.2%
-1.9% -0.1% -3.1% -1.8%
-2.1%
*BL = Belarus
RUSSIA (+2.1%)
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
87 87 86
79 81 81
11.0
63 60 60
55 55 55
7.6
6.3 6.0
5.4 4.9 5.1
4.3
2.9
0.4 1.7
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
19.3%
16.5% 17.8% 0.5%
2.0% 6.0% 4.5% 15.0%
13.8%
1.5% 14.8% 9.7%
7.8% 8.9% 0.2%
14.4% 13.3% 14.5% 6.9% 4.9%
13.3% 5.7%
9.1%
6.3% 6.7% 2.6%
4.9% 3.1%
-1.0%
-0.2%
Unit Value Growth Volume Growth Nominal Value Growth
Belarus
The FMCG market continued its recovery with positive sales volume growth for
the third consecutive quarter as the improving economy led to increased
consumer demand.
7.8%
7%
3%
7% 6.2%
12.5%
52%
3.7%
31%
18.7%
-0.7%
Total FMCG Hyper/Supermarket (Food Categories) Groceries Modern Trade (Food Categories)
Groceries Traditional Trade (Food Cat) Kiosks + Other Markets (Food Categories) Drug Categories
Increased offerings of coffee and chocolate led to excellent growth for Kiosks
and Other Markets.
58
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TOTAL BELARUS – SUPER CATEGORIES PERFORMANCE
Promotions helped drive Food growth while Home Care experienced negative
growth and is in a discount dependent promotion spiral.
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BULGARIA SNAPSHOT
Increased industrial activity helped the Bulgarian economy continue its robust growth
trajectory with GDP up 3.5% in Q1 (based on preliminary figures). Despite the positive
macroeconomic environment, consumer confidence dropped 8 points to 81 due to growing
concern over job prospects and the state of personal finances for the next 12 months.
Encouragingly for the FMCG market, consumption remained strong with 8% value growth in
Q1 despite declining consumer sentiment and rising prices in retail categories. All major
channels performed well although large formats and chain drugstores again led growth.
Expansion in the large format was the main growth driver with 10 new super/hyper markets
opening during the period. Aggressive marketing campaigns also contributed. In Bulgaria,
Svyatoslava Svyst the three largest supermarket chains (Kaufland, Lidl and Billa) were among the top 20
Managing Director advertisers on television each month this quarter.
Bulgaria / RV Leader
Eastern Europe
All super categories grew at least 4% this quarter, with sales boosted by better than
expected weather in January and February. Fresh Fruit and Vegetable categories managed
to absorb the effects of producer price inflation and displayed strong growth. Private Label
maintained its modest market share of 3%, but the outlook for increasing demand is bright.
Growth is accelerating as companies in this space launch premium products. Meanwhile,
Nielsen’s Shopper Trends 2018 study found that 6% more shoppers this year are
comparing Private Label prices with those of equivalent brands.
Looking ahead, the economic forecast remains positive with GDP expected to grow by
3.6% this year and inflation to stabilise at around 2%. Considering that wages are
increasing steadily, we expect the FMCG market to maintain its robust growth in the
upcoming quarters. The summer months are fast approaching and this year they include
the FIFA World Cup, which begins in mid-June. With a busy FMCG period ahead,
companies need to ensure good strategies are in place to outperform competitors,
especially in hotly contested seasonal categories such as Beer, Soft drinks and Meat for
Barbecues. FMCG players need to ensure store execution by tracking key performance
indicators relating to stock management, shelf visibility, the effectiveness of promotions,
and more. Hitting or exceeding such targets can prove a game changer for both retailers
and manufacturers.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
89
87 88 87
86
85 85
4.3 84
3.9 3.8 81 81
3.6 3.5 81
3.0
2.7
2.3 75
2.0
1.7 1.6
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
9.9%
6.2% 6.7%
5.0% 4.6% 4.9%
4.0% 3.9%
3.9%
3.2% 0.5% 2.8% 2.6%
1.7% 1.9% 3.1% 3.2%
3.0% 0.9% 2.3% 3.1%
1.8% 1.4% 0.8% 3.1%
1.5% 1.4%
Unit Value Growth Volume Growth Nominal Value Growth
Bulgaria
8.0%
4%
9.2%
24%
41% 9.3%
6.9%
19% 5.6%
13% 11.0%
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TOTAL BULGARIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
All super categories grew at least 4% in Q1, with Fresh Fruit and Vegetable
sales offsetting lower growth in more processed product groups.
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CZECH REPUBLIC SNAPSHOT
Despite slowing slightly in Q1 2018, the Czech economy is still doing well with GDP up
4.4%. Encouragingly for the retail market, local consumption is a major driver of this
growth. Reflecting the positive economic situation, the Consumer Confidence Index
lifted to 108 this quarter and Czech consumers are now among the most confident in
Europe. With one of the lowest unemployment rates in the European Union, Czech
consumers are very positive about their job prospects and the booming labour market
is pushing wages up. However, growing labour cost are starting to concern many
Karel Tyra
Managing Director,
manufacturers and retailers.
Czech Republic
FMCG total value growth was up 4.6% in Q1 2018 and although price inflation
continues to be the main driver, its impact is lessening as inflation continues to ease. At
the end of Q1, the inflation rate had dropped to 1.9%, almost hitting the Czech National
Bank’s target. FMCG volume sales bounced backed to positive growth the past two
quarters following three quarters of year-on-year contraction.
Despite the good market conditions, price and promotions still dominate and the
promotional spiral is still a big factor for many players. But conditions are now ripe for
both retailers and manufacturers to shift their strategies away from price-focused
activities. Some players are already doing this by focusing on innovation.
.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
5.5 108
5.2 103 101 101 104
99
4.6
4.4 85 87 87 86
81 81
3.0
2.4 2.5 2.6
2.2
1.8 1.9
1.5
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
0.2%
5.5%
4.7% 4.6%
4.3% 4.4%
3.9% 0.9%
4.8% 6.0%
2.4% 5.3%
2.8% 2.1% 4.7%
1.8% 1.7%
1.8% 3.7%
1.1% 3.4%
0.6% 2.9% 2.1%
Despite slowing, price increases are still driving value growth, but
premiumisation is gaining traction.
4.7%
8%
3.1%
13%
40% 8.8%
9.7%
21%
-3.1%
17%
7.5%
Modern Trade small formats are gaining market share through better
assortments and by satisfying increasing consumer demand for convenience.
64
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TOTAL CZECH REPUBLIC – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
2.5%
Frozen 1.8%
4.7%
Baking - Shelf Stable 1.6%
7.0%
Culinary - Refridgerated 0.2%
The earlier Easter dates this year boosted March sales of seasonal categories
such as Alcoholic Beverages and Sweets and Treats.
TOTAL CZECH REPUBLIC – MANUFACTURER PERFORMANCE - FMCG
Small players are faster to respond and innovate to meet consumer demand
and are gaining market share at the expense of the top manufacturers.
65
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ESTONIA SNAPSHOT
The Estonian economy continues to perform strongly and the outlook for 2018 is
positive. The Ministry of Finance forecasts 4% GDP growth in 2018, driven by exports.
In the first quarter of 2018, exports increased by 6% while imports were up 2%
compared to Q1 2017. The improving labour market, better wages, and lower inflation
are supporting consumer spending. Estonia’s employment rate in Q1 was 67%, slightly
higher than a year ago while average salaries rose 6.5% in 2017, exceeding inflation for
the seventh consecutive year.
Estonia’s recent excise taxes saw significant price increases in alcohol and tobacco,
which along with food price increases, contributed to inflation. Despite these factors, the
Ilona Lepp inflation rate eased slightly in Q1 to 3.1% and forecasts estimate it will end the year at
Managing Director 2.9%. Meanwhile, salaries are expected to increase 7% in 2018 and many consumers
Baltics should look forward to having more discretionary spending power this year.
The FMCG market had a moderate 2.7% total value growth in Q1 compared to year
ago, but volume growth contracted -1.9%. Volume decline was mostly due to the impact
of the alcohol excise taxes as it led to increased alcohol trade on the Latvian border and
reduced tourist spend. Unit value growth in Q1 was up 4.7% as busier lifestyles and
increased incomes boosted growth in categories related to convenience and indulgence
such as Chilled and Frozen Food, Snacks, Pet Care, Baby Food and Confectionery.
Across retail channels, Large Supermarkets was the fastest growing, up 8.3% on the
back of new store openings. Consumer demand for convenience increased sales in
Convenience/Petrol Station formats as well as Health and Wellness categories in the
Drug Stores/Pharmacies channel.
Expectations of increased spending power needs to be a focus for FMCG players and
meeting demand outside of essentials may be an opportunity for manufacturers and
retailers tuned into this change.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
5.3 5.3
85 83 87 87 86
81 84 81 81 81 81
4.5
72
3.9 3.8
3.7 3.6
3.2 3.1 3.1
3.0
1.3
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
7.0%
6.1% 5.7%
4.9% 6.6% 4.7%
2.9% 3.3%
2.6% 2.9% 2.6% 2.7%
Estonia
* Backdata not available due to Universe Update
2.9%
2%
-0.2%
11% 1%
23%
8.3%
1.4%
30% -1.6%
5.1%
33%
4.5%
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TOTAL ESTONIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
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GREECE SNAPSHOT
Greece’s economy continued its moderate growth trajectory this quarter with
GDP up 1.8% and major indicators point to signs of an economic recovery
this year. Consumer sentiment is gradually improving, although Greeks
remain among the most pessimistic Europeans.
Food and beverage-related categories were the fastest growing in the FMCG
market, especially Confectionery and Non Alcoholic Drinks due to the timing
of Easter falling in the first quarter. Non-food categories grew more slowly
than the market average as suppliers in that space were under intense
pressure from retailers to offer more and deeper promotions. These big
discounts eroded sales value and may be training consumers to expect and
buy on promotion.
Greece’s retail landscape is evolving and the market dynamics are rather
unstable, certainly far from “normality” and the current “promotional spiral” is
impacting many players. Looking ahead, retailers and manufacturers must
seek ways to effectively cooperate on their promotional strategies and
expand total sales while maintaining some volume growth.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
85 87 87 86
81 81
1.9 60 60 61
56 53 52
1.5 1.5 1.5
1.3 1.4
0.8 0.8
0.3 0.4 0.3
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
Greece
4.5%
15% 10%
27.2%
2.7%
39%
36% 2.6%
1.0%
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TOTAL GREECE – SUPER CATEGORIES PERFORMANCE
Private Label faced more challenges in the growing FMCG market as the
price gap between branded and private label offerings reduced.
71
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HUNGARY SNAPSHOT
The Hungarian economy continued its positive momentum in early 2018 with GDP
growth of 4.4% year-on-year in Q1. Increased private consumption, exports and tourism
were the main drivers. Due to the high GDP growth baseline set during 2017, the pace
of economic growth is likely to slow slightly in the second half of this year. Consumer
sentiment in Hungary further improved this quarter and at 78 points on the Nielsen
Consumer Confidence Index, is at its highest level in more than seven years.
Hungary’s retail market continues to thrive and growth exceeded even the most
Kateryna optimistic forecasts. According to the Hungarian Central Statistical Office, total retail
Edelshtein growth was an impressive 8.5% in Q1 while the Nielsen FMCG-specific measurement
Hungary Market registered 8.3% total value growth. There were a number of contributing factors to the
Leader
Buy & Watch impressive FMCG performance. They include longer-term drivers such as the improving
macroeconomic situation and real wage growth, as well as quarterly-specific drivers
such as the earlier Easter date this year and the government issue of one-off grocery
vouchers for pensioners.
Solid growth was experienced across all major categories, but was especially strong in
those that feature food and drug products with the early Easter boosting food sales.
Within the Modern Trade channel, Drugstores and Discounters were the growth leaders.
Drugstore formats reaped the benefits of new store openings, big promotions and
competitive price points. All FMCG players in Hungary should be seeking ways to make
the most of the current uplift. Many already are, for example retailers have been opening
new stores and manufacturers have been innovating with new product offerings across
many categories. According to the latest Nielsen Shopper Trends analysis, Hungarian
shoppers want more convenience, an enhanced shopping experience and lower
prices—and all of these at the same time.
With stable economic growth, rising wages and strong consumer confidence, the rest of
2018 promises to be an exciting time for the country’s FMCG market.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
4.9 85 87 87 86
4.4 81 81 78
4.3 76 74
4.0 70
3.8
64 64
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Source Economist Intelligence Unit (EIU) & The Conference Board® Global Consumer Confidence
72
Hungarian Central statistical office Survey is conducted in collaboration with Nielsen
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FMCG MARKET DYNAMICS OFFLINE
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
8.2% 8.3%
7.0%
6.5% 3.6%
2.5% 4.4%
5.3%
4.8%
3.7% 0.2%
3.6% 3.6%
3.2%
4.5% 2.8% 3.4% 1.5%
2.2% 5.1% 4.6%
2.4% 2.1% 2.8% 3.8%
1.5% 2.1%
1.4% 0.8% 0.7%
FMCG growth continued to accelerate with high value and volume gains
exceeding expectations.
7.0%
12% 4.4%
25%
8%
4.2%
15.5%
17%
15% 2.9%
23% 11.1%
4.7%
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TOTAL HUNGARY – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Growth across the board, but the strong performance of the biggest super
categories reflects the growth potential of the entire FMCG market.
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KAZAKHSTAN SNAPSHOT
Kazakhstan’s economic recovery continued in Q1 with GDP growth estimated at 4.1%
and inflation dipping under 7% for the first time since 2015. The growth and stabilisation
of crude oil prices over the past year has resulted in better exchange rates as well as
improved conditions for international trade. However, it is not all good news. The
devaluation of the tenge dramatically impacted prices for consumer goods, utilities,
clothing, property and more. Although nominal salaries in Kazakhstan grew 8% year-on-
year in Q1, real income declined -2.5% this quarter. This in turn is forcing shoppers into a
savings mindset.
Despite this situation, according to Government statistics, total retail sales were up 13%
Ilona Lepp
in Q1 compared to a year ago. This inconsistency between increased spend versus a
Managing Director
Baltics
real wage decline can be explained by the increasing popularity of small fast loans and
credit card debt, especially among lower income households. Nielsen FMCG
measurements reveal slowing quarterly growth over the past year. Price increases have
been the main driver of growth as volume sales have been contracting. In this quarter,
Tobacco and Beer were the lead growth categories, however for Tobacco, most of this
was due to Government regulations setting new minimum retail prices.
In Kazakhstan, according to a recent Nielsen study, 60% of shoppers say they face
budget limitations when shopping. Given the current economic situation and price
increases, almost 38% of shoppers today are looking for promotions to save some
money (compared to 25% in 2016). Some categories are already reliant on promotions,
especially in the non-food segment. Despite the growth of promotion-oriented shoppers,
a similar percentage of shoppers claim the store environment and customer service are
important considerations when shopping.
Looking ahead there are some positive signs for the FMCG market in the coming
months. An improving macroeconomic situation should start to flow into the retail
environment. In addition, there are expectations that there will be salary increases for
government workers this year, including doctors and teachers and this should have a
positive effect on consumer spending. Finally, the growing popularity of credit card and
small loans represents an opportunity for many retailers to leverage such services. This
has already shown great results in the apparel business, even for low price brands.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
11.7 87 87
86
85
83
7.7 7.5 7.5
7.1 6.8 81 81 81
81
79
5.3 79
4.2 4.1 78
3.1 3.1
2.5
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
1.2% 19.0%
0.3% 15.6% 3.4%
14.2%
12.7%
14.5% 13.2% 9.6%
7.6% 15.6% 8.6% 7.3% 5.8%
13.9% 7.3%
11.5% 4.6%
3.8% 4.0% 3.8%
-0.5% 2.8%
-3.8% -3.5% -3.1%
-1.9% -4.1% -3.3%
Kazakhstan
The FMCG market grew by 2.8% this quarter, but volume sales continued to be
negative.
3% 1% 3.8%
2%
3% 3%
3.8%
6.8%
-4.2%
-4.0%
85% -4.5%
0.4%
Total FMCG Supermarkets Open markets Kiosks & Pavilions Pharmacies Perfumeries Others
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
TOTAL KAZAKHSTAN – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
77
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LATVIA SNAPSHOT
Latvia’s impressive economic momentum continued in early 2018 with GDP up 5.2% in Q1
on the back of increased industrial output, a rise in construction and buoyant consumer
spending. Nearly all major sectors performed well with the exceptions of agriculture, which
is still recovering from floods in late 2017, and the financial services sector, which was
impacted by tighter regulations. The labour market was boosted by a 13% minimum wage
increase in January as well as by recent labour tax cuts. Meanwhile, inflation eased slightly
to 2% by the end of the quarter. The improved economic situation saw consumer sentiment
leap 13 points to reach 86 points on the Consumer Confidence Index, Latvia’s highest level
in more than seven years. The positive economic situation and improved consumer
sentiment was reflected by strong demand in the FMCG market. Total value growth was up
Ilona Lepp 3.5% in Q1 compared to the same period a year ago. Growth was quite balanced with
Managing Director volume up 1.9% and unit value 1.6%.
Baltics
A number of FMCG trends have emerged recently. Consumers are increasingly upgrading
their basket selections with non-basic categories. This is reflected by the biggest total value
growth gains over the latest 12 months happening in the Baby Food, Snacks, Pet Food and
Confectionary categories. Meanwhile, price increases for dairy products are driving growth
in the Chilled and Frozen Products category. The Alcoholic Drinks category is benefiting
from increased demand from Estonian and Lithuanian consumers due to new alcohol
excise taxes in those two countries. The healthy lifestyle trend continues to gather
momentum and has motivated consumers to increase their spend on products in the Health
and Wellness category. This has led to booming sales of Personal Care products in the
Pharmacy channel. Consumers also continue to demand convenience and this trend is
helping Convenience/Petrol Stations outpace other formats.
Overall, it has been a very positive start for the market in 2018 and a solid foundation is in
place from which to accelerate FMCG growth for the rest of the year. To realise their
growth potential, FMCG players need to focus on deepening their understanding of
consumers’ decision-making touch points. And to fully tap into health, convenience and
other trends, companies will need to develop innovative product offerings and roll out
effective marketing and promotional campaigns.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
6.2 87 87
85 86 86
81 81 78 78
5.2 74
4.9 4.7 73
69
4.2
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
5.1%
0.6%
4.1% 4.0% 4.0%
3.8%
0.5% 0.5% 3.5%
4.6% 1.9%
4.3% 4.3%
3.6% 3.3%
1.6%
-0.3% -0.3%
Unit Value Growth Volume Growth Nominal Value Growth
Latvia
* Backdata not available due to Universe Update
1%
3% 4.1%
20% 4.1%
42% 4.3%
2.7%
8.9%
35% 16.4%
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
TOTAL LATVIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Chilled and Frozen Product growth is being driven by price increases for
dairy products while sales in Alcoholic Drinks are up due to recent excise
taxes in neighbouring countries.
TOTAL LATVIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q1-2018 MAT Q1-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Smaller players are thriving as they can react more quickly than bigger
players to innovate and offer new products in response to evolving
consumer demand.
80
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LITHUANIA SNAPSHOT
Lithuania’s economic momentum slowed slightly in Q1 2018 with year-on-year GDP
growth of 3.5%. After record highs in previous quarters, export growth was weaker in the
first three months of the year while industrial production rebounded only in March. Despite
inflation easing throughout the quarter, consumer prices continued to rise, which
weakened retail sales.
FMCG total value growth in Q1 was 4.7% year-on-year, a drop from recent quarters as
unit value growth slowed compared to the worrying inflation-driven levels apparent much
of last year. The market continues to struggle to generate volume growth, although the -
2.1% contraction this quarter was an improvement from recent performance.
Ilona Lepp
Managing Director
Baltics
Consumer lifestyle changes and rising demand for convenience are driving growth
opportunities for some major categories. Snacks gained 7.2% nominal value growth over
the latest 12 months while Confectionary grew 4.9% in that period. Across retail channels,
Convenience/Petrol Stations continue to perform, with impressive growth of 9.8% over the
past year. New tastes, innovations and promotions are boosting sales of Non-Alcoholic
Beverages, while growth in Chilled and Frozen Products and Alcoholic Drinks has been
driven by inflation. The Shelf Stable Food category still has negative growth for the past
12 months while in contrast the Pharmacy channel is thriving, up 9.6% as shoppers
continue to focus on wellness and health products. Across retail channels, new openings
of Large Supermarket formats last year and changing shopper preferences have
impacted the performance of Hypermarkets, with growth contracting -0.5% in this format
over the past 12 months.
Although the year has started on a slower than expected pace for the FMCG market, the
evolving preferences of consumers due to convenience and health trends should mean
there are better growth prospects for the remainder of the year. To generate positive
momentum and seize opportunities, companies should look to innovate and differentiate
their offerings as well as ramp up their marketing campaigns. Now is the time to focus on
deepening understanding of consumers’ decision making processes and seek
effectiveness in trade spending rather than pour money into some of the ineffective
discounting campaigns in the market
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
4.4 87 87
4.1 4.2 86
4.0 85
3.8
3.5 3.6 3.5 3.4
3.2 81 81
2.8 79
77 77
76
74 73
1.2
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
7.2% 7.5%
6.9% 7.2% 4.8% 4.7%
3.6% 4.6%
4.4% 2.5% 2.6%
Lithuania
* Backdata not available due to Universe Update
3.6%
2%
1% -0.5%
3% 22%
10% 8.5%
2.9%
3.7%
9.8%
38% 24%
1.8%
9.6%
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TOTAL LITHUANIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Chilled and Frozen Food and Alcohol growth was driven by inflation while
Snacks and Confectionary were influenced by new tastes and innovation.
Although still less than 10% market share, Private Label is growing fast
due to new product lines in different price ranges that offer both
competitive prices and good quality.
83
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POLAND SNAPSHOT
The Polish economy continued its solid momentum early in 2018 with the
Government making an initial estimate that GDP grew 5.1% in Q1. Private
consumption and investment are on the rise, which should help accelerate
economic growth in the coming months. However, analysts warn that economic
growth may slow down in Q4 due to external factors. The current rate of GDP
growth in Poland has not yet put pressure on inflation, which remained low at
1.5% in April 2018, but rising petrol prices may soon have an impact.
The FMCG market continued to perform well on the back of strong consumption.
Szymon
Mordasiewicz Total value growth was 4.8% this quarter compared to a year ago and mostly due
Managing Director, to strong volume growth. Interestingly, FMCG growth in Q1 was less than that of
Poland
some non-FMCG goods, including cars and electronics. As consumers are
showing willingness to spend on big ticket items, then there will still be unrealised
growth potential within the FMCG space. An earlier Easter this year (April 1)
helped boost food category sales in March, which were up 10.1% compared to a
year ago, but will dampen April growth figures in that category space.
In March, Poland’s new Sunday trading ban took effect and is being applied on
two Sundays each month. There are big question marks about how this will
impact the market and so far it is too early to draw conclusions. However, there
are some initial signs showing that the market is adapting. For example, petrol
station formats recorded 20% growth in March, compared to a year ago. A
positive impact was expected, but the final number is impressive based on the
assumption that consumers will fulfil outstanding needs in this format. The next
few months will begin to tell a more comprehensive story across market channels
and categories.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
5.2 5.1
104 104 103
4.4 4.3 4.3 91
87 88 87 87 86
79 81 81
3.2
2.2
1.9 1.8 1.9
1.5
0.2
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q2 2016 Q3 2016 Q4 2016 Q3 2017 Q4 2017 Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
5.9%
5.4% 5.4%
4.8% 4.6% 4.8%
4.3% 1.6%
3.4% 3.7%
3.0%
3.2% 2.8%
2.8% 3.9%
1.7%
4.2% 1.6% 1.9%
2.4%
1.1% 2.0% 1.1%
2.0% 3.0% 2.2%
1.5%
0.1%
0.9%
-0.9%
Poland
FMCG growth was strong helped by Easter being earlier than last year.
5.4%
11%
2.0%
36% 15% 6.1%
9.4%
7.1%
7% 32%
2.5%
All channels performed well in Q1 but the impact of the Sunday trade
ban introduced in March is yet to be known.
85
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TOTAL POLAND – SUPER CATEGORIES PERFORMANCE
Major categories performed well this quarter and Food growth was boosted
by strong Easter sales.
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ROMANIA SNAPSHOT
Romania's economic growth eased slightly as GDP grew 4% year-on-year in
Q1 2018 compared to the 6.9% gain made the previous quarter. Inflation
climbed at an accelerated rate and reached 4.7% by the end of the quarter,
with higher energy costs a major contributor. Meanwhile, the country’s
political and social turmoil continued, stirred up by fiscal and social
legislative changes and ongoing tense political relationships between major
state institutions.
Luca De Nard
Managing Director FMCG market value grew 8.6% in Q1, however only 3.6% of this was volume
Romania
growth, while the remainder was due to inflation-driven price increases.
Fresh Food registered the highest growth of major categories over the latest
12 months, surpassing Beverages, while Non-Food sales lagged behind.
Across retail channels, although Hypermarkets continue to be the main
driver of growth in the Organized Trade channel, Supermarkets are gaining
ground through rapid store expansion. Growth in Traditional Trade remains
flat as most formats just keep pace with inflation. Increasing consumer
appetite for convenience is driving sales for “proximity” channels despite
premium prices in these formats. For example, Supermarkets recorded
17.8% value growth for the latest 12 months while Petrol Stations and
Convenience formats registered a 13% value increase despite no store
expansion.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
101 98
87 90 91
8.8 87 85 85 87 86
81 81
6.7
6.1
5.7
4.8 4.7
4.0
3.1
0.2 0.7 1.5
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
11.2%
8.9% 9.1% 9.4%
8.6% 8.6%
7.9%
6.4% 6.5% 6.9% 3.8%
3.1% 3.6%
8.9% 2.4%
13.1% 8.4% 5.3% 4.8%
10.9% 4.6% 5.5%
4.8% 1.1% 5.1%
0.2% 1.7%
0.4%
-0.1%
-4.1%
Romania
1% 7.9%
1%
6.7%
28%
17.8%
40%
7.8%
4.9%
18% -1.8%
11%
13.0%
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TOTAL ROMANIA – SUPER CATEGORIES PERFORMANCE
Fresh food and Beverages are the major growth categories while
sales in Household and Non-Food lag behind.
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RUSSIA SNAPSHOT
Russia’s GDP grew 1.3% quarter-on-quarter in Q1 2018 according to preliminary figures
from the Government. Despite inflation remaining stable (2.2%) and real wages growing a
record 9-10% in the first four months of the year, retail growth was moderate, up 2.2% this
quarter. And as bank deposits have not increased noticeably, economic experts conclude
that most of the salary growth is being absorbed by consumers paying off credit card and
other debts incurred during the 2015/16 economic downturn.
FMCG volume growth was up 1.2% this quarter compared to the same period a year ago,
meaning there has now been four consecutive quarters of volume growth. Meanwhile, unit
Alexander Kotsuba, value growth was up 1.8% this quarter. These numbers indicate the emergence of a new
Managing Director trend where there is very low volume sales movement and minimal price rises. In this low-
Nielsen Russia inflation environment with low consumer confidence and conservative attitudes, retailers and
manufacturers must proactively seek out and pursue growth opportunities.
Summer promises to be an exciting time with the country hosting the 2018 FIFA World Cup,
which begins in mid-June. Brands and retailers across the FMCG spectrum should benefit
from the event, and especially those that have strategies in place to capture the spend from
the million plus tourists expected. To help companies track the impact of the World Cup on
category and brand sales, Nielsen Russia recently launched new retail measurement
services in all 11 host cities.
Also this summer, voluntary food labelling regulations will be rolled out to mark packaging
with “traffic light” colours to indicate levels of salt, sugar, fatty acids etc. Russian consumers
are already very attentive to freshness and natural ingredients in food with 89% of shoppers
reading packaging information before buying products. Although this new labelling might not
seem ground-breaking, it will help consumers to more easily assess food products and
should lead to increased sales of healthier food choices.
Finally, seasonal categories like carbonated soft drinks, ice-cream and ice tea should
bounce back mid-year from sluggish sales recorded during last year’s especially cold
summer. But to maximise growth, players in this space still need to ensure they have the
right combination of relevant product offerings, targeted distribution and well thought out
pricing strategies.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
5.7 85 87 87 86
81 81
4.7 70 70 69 68
4.3 67
63
3.3
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
0.5%
8.2%
7.1%
6.0%
5.0% 0.2%
4.1% 3.7% 4.4% 1.2%
7.1% 7.4% 7.7% 7.1% 3.6% 0.4%
2.0% 3.0%
6.0% 2.3% 3.0%
2.1%
3.4% 1.9% 1.4% 1.8%
Russia
Wage increases did not translate to FCMG spend as consumers
instead looked to pay off debts.
4.1%
25%
7.2%
75%
-4.2%
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TOTAL RUSSIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
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SLOVAKIA SNAPSHOT
Slovakia’s stable economic growth continued in Q1 2018 with GDP up 3.7%.
With a positive economic outlook, recent wage increases and record low
unemployment, the Consumer Confidence Index was up 4 points to 90 this
quarter, its highest rating since at least 2011 and back above the European
average.
Despite the improved sentiment, FMCG growth slowed considerably this quarter,
up just 1.2% compared to the same period last year. Although consumers are
Karel Tyra
Managing Director, more upbeat about their overall situation, there is speculation that they are less
Slovakia inclined to translate this into retail spending due to price rises. When asked
whether they had changed their spending patterns to save on household
expenses compared to this time last year, 46% of Slovakians said yes, although
this has been a prevailing mindset for some time.
After a positive 2017 for FMCG, Q1 witnessed a volume decline despite Easter
shopping being in March (in 2017 it was in April). Following price increases of
approximately 3%, volume sales for food basket and drug baskets contracted
around -2%. All major food product groups have increased nominal value sales
for the latest 12 months, but when comparing only Q1 2018, we see a significant
slowdown in revenue growth. Within major categories, Non-Alcoholic Beverages
and Hot Beverages showed declining revenue indicating that Slovakian
consumers may be increasingly sensitive to ongoing inflation increases. This Q1
softening was steadied slightly by growth in the Sweets and Treats category due
to the seasonal push in the Easter period.
Striking a balance between volume and value growth when there is prolonged
rising inflation is a challenge for the FMCG market. Companies need to monitor
these first signs of a consumption slowdown carefully and be prepared to
respond if they continue.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
9.4%
7.5%
5.6% 6.2%
4.2%
4.3% 4.2%
2.4% 3.0%
2.5% 2.2% 2.7% 2.6% 2.0% 4.8%
3.2% 3.2% 3.3%
2.6% 4.4% 2.9% 2.4% 1.2%
0.4%
-0.1% -0.3% -0.6% -1.8%
-1.9% -1.7%
Consumers are tightening their belts due to rising inflation and FMCG
growth has dropped to 2015 and 2016 levels.
5.6%
7%
6%
6.0%
4.8%
27%
61%
-1.0%
11.5%
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TOTAL SLOVAKIA – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
95
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TURKEY SNAPSHOT
Turkey’s economy expanded at its fastest rate in four years in 2017, with GDP annual
growth of 7.4% thanks to strong industrial output, domestic demand, construction and
foreign trade. Not announced yet, Q1 2018 GDP growth is expected to be around 5.1%.
Considering global financial conditions, exchange rate volatility and geographical tensions
that would be a good result.
The trend of double-digit inflation increases continued in Q1, with the Consumer Price Index
up 10.3% as the cost of imported goods soared due to the devaluing lira and the rise of
Didem Sekerel
global oil prices. Price inflation continues to be a major factor in retail performance, as
Erdogan reflected by 13.3% of the 15.6% FMCG total growth in Q1 being from unit value increases.
General Manager Encouragingly, volume growth continued to be positive, gaining 2.3% in Q1 against a year
Nielsen Turkey, Buy. ago. Overall, the FMCG market is in relatively good shape.
Body Care, Hair Care and Oral Care were among the best performing categories in Q1 with
both value and volume gains. These Personal Care categories benefited from growing
penetration, store expansions and successful promotions in the Perfumery and Discounter
formats. Ice Cream and Dairy categories also did well, mainly due to the scarcity of raw milk
driving price increases and boosting value growth. Confectionery enjoyed strong growth due
to high demand for healthier products such as dried fruits and nuts. Meanwhile volume
sales in the Non-Alcoholic Drinks category were boosted by the relatively mild winter.
Looking forward, health and convenience trends are of growing importance in the Turkish
FMCG market and reflect the evolving needs of consumers here. To meet this demand,
manufacturers should look to innovate and must also ensure they have effective pricing and
promotion strategies in place to maximise profitable growth. FMCG players should also look
to go digital to engage with Turkey’s young and urban consumers. This segment of the
population has very high rates of mobile and internet penetration and digital media spending
has the best rate-of-return among all advertising channels.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Source EIU GDP Q1 2018 estimate The Conference Board® Global Consumer Confidence 96
Survey is conducted in collaboration with Nielsen
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
16.8%
15.4% 15.6%
15.0%
14.3% 2.3%
4.5%
4.3%
11.8% 5.7% 4.7%
10.8% 10.5% 10.8%
10.1%
5.7%
4.9% 3.7% 4.5%
6.1%
11.1% 12.3% 13.3%
10.3%
8.6%
5.9% 6.9% 6.1%
5.7% 4.7%
15.4%
5%
26% -2.8%
22%
11.2%
3% 11.2%
11% 30.7%
33% 33.6%
7.3%
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TOTAL TURKEY – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Body Care, Hair Care, Oral Care, Confectionery, Ice Cream and Dairy
categories showed strong growth due to additional price increases above
inflation.
TOTAL TURKEY – MANUFACTURER PERFORMANCE - FMCG
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UKRAINE SNAPSHOT
The year started positively for the Ukrainian market with the Government’s preliminary
estimate of 3.1% GDP growth in Q1 the fastest quarterly growth in just over a year. The
improving economy was reflected by rapid growth in the FMCG market, which grew 20.8%
year-on-year this quarter. Although high inflation continues to be a major influence, this is the
first quarter in which volume growth hit double-digits, up 10.5%. Consumer prices were 14%
more than compared to Q1 2017, due mostly to higher prices for food and energy and despite
predictions late last year that inflation would slow. Meanwhile, lower-tier wage increases have
accelerated over the past year and boosted consumer purchasing as reflected by FMCG
volume growth picking up speed each quarter since early 2017.
Vaios Dimoragas
Managing Director Although Ukrainians’ disposable income is increasing and FMCG growth is strong, it still
Ukraine and Belarus needs to be largely benchmarked against the dire economic situation of 2014 and 2015. This
is clearly apparent in the mindset of the country’s consumers as they remain cautious and
consumer confidence is the lowest in Europe. Likewise, business sentiment remains low, but
there are encouraging signs of improvement as indicated by a recent survey conducted by
the National Bank of Ukraine. As the economic situation continues to improve, FMCG
companies should be looking to move away from survival tactics and instead start focusing
on longer-term opportunities to outgrow their competition.
Looking ahead for the remainder of 2018, controlled inflation will be essential for sustained
economic growth and strengthened FMCG market performance. If this happens, Ukrainian
consumers will be able to indulge in new, premium, and more exciting products and engage
in an escalated “dialogue” with brands to build emotional connections with them.
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
16.2 85 87 87 86
81 81
13.9 13.8 13.9 13.8
12.3
58 61 58
57
50 52
4.6
2.8 3.1
2.6 2.4 2.3
Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q1 2018
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FMCG MARKET DYNAMICS
(weighted average)
MAT YA MAT TY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
20.8%
19.8%
17.4% 3.7% 3.6%
15.9%
0.8% 13.4% 9.2% 10.5%
7.2% 0.3% 13.4%
12.4% 0.1%
11.2% 6.0%
10.0%
8.9%
12.6%
10.3% 9.7% 9.8% 10.6%
10.4% 8.8% 9.7% 9.9% 10.4%
-0.1%
Unit Value Growth Volume Growth Nominal Value Growth
Ukraine
FMCG volume growth was up 10.5%, outstripping unit value growth for the
first time since Ukraine’s economic crisis.
17.4%
29% 21.9%
23.1%
53%
6% 25.5%
12%
6.9%
Modern Trade growth was boosted by 190 new Perfumery outlets, which lead
channel growth for the latest 12 months.
100
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TOTAL UKRAINE – SUPER CATEGORIES PERFORMANCE
MAT Q1-2018 MAT Q1-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Strong growth in Baby Food & Drinks was due to the expansion of top
players while growth in Confectionery & Snacks was driven by promotions.
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IN THE INDUSTRY
TODAY’S CHANGE IS TOMORROW’S OPPORTUNITY
102
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WHAT’S NEXT STARTS NOW
TODAY’S CHANGE IS TOMORROW’S OPPORTUNITY
Understanding how these elements may combine to alter the consumer, retail and
business environment can give companies a more informed and considered base to
make decisions about the future.
DOWNLOAD REPORT
For deeper insights on what the future might hold for your business, download the
What’s Next Starts Now whitepaper.
WEBINAR PLAYBACK
Click any of the regions below to view webinar playback for local insights.
East Europe
Middle East
Asia Pacific
Latin America Africa
The following pages highlights some of the major drivers of change in each market
for you to consider the implications on your future business strategy.
103
North America and West Europe webinars not available
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AUSTRIA
POPULATION
2015 +0.31M (+3.7%) 2025
8.56 MILLION 8.87 MILLION
RURAL RURAL
34.0% 32.8%
2.91M 2.91M
URBAN URBAN
66.0% 67.2%
5.65M 5.96M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
14.4% 4.6% 17.0% 19.9% 22.2% 21.9%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
151 182 96
84
104
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BELGIUM
POPULATION
2015 +0.34M (+3.1%) 2025
11.18 MILLION 11.53 MILLION
RURAL RURAL
2.1% 1.8%
0.24M 0.21M
URBAN URBAN
97.9% 98.2%
10.94M 11.32M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
17.0% 5.8% 17.5% 19.2% 19.7% 20.9%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
167 96
128 85
105
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DENMARK
POPULATION
2015 +0.23M (+4.1%) 2025
5.66 MILLION 5.89 MILLION
RURAL RURAL
12.3% 10.8%
0.70M 0.63M
URBAN URBAN
87.7% 89.2%
4.96M 5.26M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
16.0% 5.8% 19.5% 17.6% 19.7% 21.4%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
98
152 96
130
106
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FINLAND
POPULATION
2015 +0.15M (+2.7%) 2025
5.46 MILLION 5.61 MILLION
RURAL RURAL
15.8% 14.4%
0.86M 0.81M
URBAN URBAN
84.2% 85.6%
4.60M 4.80M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
16.3% 5.6% 17.6% 18.7% 17.9% 23.9%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
97
212
198 93
107
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FRANCE
POPULATION
2015 +2.98M (+4.6%) 2025
64.98 MILLION 67.97 MILLION
RURAL RURAL
20.5% 18.3%
13.31M 12.42M
URBAN URBAN
79.5% 81.7%
51.67M 55.55M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
17.2% 6.0% 17.6% 18.0% 18.9% 22.3%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
143 95
85
121
108
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GERMANY
POPULATION
2015 -1.69M (-2.1%) 2025
82.56 MILLION 80.87 MILLION
RURAL RURAL
24.7% 22.5%
20.39M 18.21M
URBAN URBAN
75.3% 77.5%
62.17M 62.65M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
13.5% 4.4% 16.5% 19.2% 22.4% 24.1%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
97
170
149 88
109
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IRELAND
POPULATION
2015 +0.44M (+9.3%) 2025
4.73 MILLION 5.17 MILLION
RURAL RURAL
36.8% 33.6%
1.74M 1.74M
URBAN URBAN
63.2% 66.4%
2.99M 3.43M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
19.3% 7.1% 17.2% 20.9% 19.1% 16.5%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
128 99
124 80
110
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ITALY
POPULATION
2015 +0.19M (+0.3%) 2025
61.14 MILLION 61.33 MILLION
RURAL RURAL
31.0% 29.1%
18.98M 17.88M
URBAN URBAN
69.0% 70.9%
42.17M 43.46M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
12.6% 4.8% 15.0% 17.9% 23.7% 25.9%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
91
178 66
160
111
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NETHERLANDS
POPULATION
2015 +0.34M (+2.0%) 2025
16.84 MILLION 17.18 MILLION
RURAL RURAL
9.5% 5.8%
1.60M 0.99M
URBAN URBAN
90.5% 94.2%
15.24M 16.19M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
15.7% 5.4% 18.1% 17.9% 20.8% 22.1%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
98
152 93
136
112
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NORWAY
POPULATION
2015 +0.48M (+9.4%) 2025
5.14 MILLION 5.63 MILLION
RURAL RURAL
19.5% 17.1%
1.00M 0.96M
URBAN URBAN
80.5% 82.9%
4.14M 4.66M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
17.3% 5.9% 19.6% 19.4% 18.9% 18.8%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
99
143 143
97
113
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PORTUGAL
POPULATION
2015 -0.10M (-0.9%) 2025
10.61 MILLION 10.51 MILLION
RURAL RURAL
36.5% 31.5%
3.88M 3.31M
URBAN URBAN
63.5% 68.5%
6.73M 7.20M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
11.9% 4.9% 16.2% 19.8% 22.5% 24.8%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
197 89
69
162
114
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SPAIN
POPULATION
2015 +0.88M (+1.9%) 2025
47.20 MILLION 48.08 MILLION
RURAL RURAL
20.4% 18.3%
9.64M 8.78M
URBAN URBAN
79.6% 81.7%
37.56M 39.30M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
13.0% 5.3% 14.7% 20.5% 23.7% 22.8%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
93
133 79
120
115
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SWEDEN
POPULATION
2015 +0.68M (+7.1%) 2025
9.69 MILLION 10.38 MILLION
RURAL RURAL
14.2% 12.7%
1.38M 1.32M
URBAN URBAN
85.8% 87.3%
8.32M 9.06M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
17.7% 5.8% 18.1% 18.7% 18.5% 21.1%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
156 97
91
146
116
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SWITZERLAND
POPULATION
2015 +0.83M (+10.1%) 2025
8.24 MILLION 9.07 MILLION
RURAL RURAL
26.1% 24.9%
2.15M 2.26M
URBAN URBAN
73.9% 75.1%
6.09M 6.81M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
15.1% 4.8% 17.5% 20.4% 21.3% 20.9%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
98
137 88
134
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UNITED KINGDOM
POPULATION
2015 +3.37M (+5.3%) 2025
63.84 MILLION 67.21 MILLION
RURAL RURAL
17.4% 15.2%
11.11M 10.21M
URBAN URBAN
82.6% 84.8%
52.73M 57.00M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
17.6% 5.8% 17.8% 19.4% 19.1% 20.2%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
152 96
143 92
118
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BELARUS
POPULATION
2015 -0.49M (-5.3%) 2025
9.26 MILLION 8.77 MILLION
RURAL RURAL
23.3% 20.0%
2.16M 1.75M
URBAN URBAN
76.7% 80.0%
7.10M 7.02M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
17.6% 5.5% 16.3% 23.0% 19.8% 17.8%
TECHNOLOGY
Internet Users
per 100 people
82
62
2015 2025
119
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BULGARIA
POPULATION
2015 -0.59M (-8.2%) 2025
7.11 MILLION 6.53 MILLION
RURAL RURAL
26.1% 23.0%
1.85M 1.50M
URBAN URBAN
73.9% 77.0%
5.26M 5.02M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
14.3% 5.2% 14.7% 22.0% 21.1% 22.6%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
84
162 57
151
120
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CZECH REPUBLIC
POPULATION
2015 +0.24M (+2.2%) 2025
10.78 MILLION 11.02 MILLION
RURAL RURAL
27.0% 26.5%
2.91M 2.92M
URBAN URBAN
73.0% 73.5%
7.87M 8.10M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
15.1% 5.4% 15.1% 22.5% 20.4% 21.5%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
93
143 81
139
121
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ESTONIA
POPULATION
2015 -0.04M (-3.3%) 2025
1.28 MILLION 1.24 MILLION
RURAL RURAL
32.5% 32.5%
0.42M 0.40M
URBAN URBAN
67.5% 67.5%
0.86M 0.84M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
15.9% 6.0% 15.0% 21.5% 19.6% 22.0%
TECHNOLOGY
Internet Users
per 100 people
95
88
2015 2025
122
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GREECE
POPULATION
2015 -0.09M (-0.08%) 2025
11.13 MILLION 11.04 MILLION
RURAL RURAL
22.0% 19.1%
2.45M 2.11M
URBAN URBAN
78.0% 80.9%
8.68M 8.93M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
12.4% 5.3% 15.7% 20.9% 22.6% 23.2%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
87
126 67
116
123
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HUNGARY
POPULATION
2015 -0.24M (-2.4%) 2025
9.91 MILLION 9.67 MILLION
RURAL RURAL
28.8% 24.7%
2.85M 2.39M
URBAN URBAN
71.2% 75.3%
7.06M 7.28M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
13.9% 5.2% 17.5% 21.8% 20.0% 21.7%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
89
73
119 122
124
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KAZAKHSTAN
POPULATION
2015 +1.35M (+8.0%) 2025
16.77 MILLION 18.12 MILLION
RURAL RURAL
46.8% 45.7%
7.84M 8.28M
URBAN URBAN
53.2% 54.3%
8.93M 9.83M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
27.7% 8.2% 19.1% 21.1% 15.2% 8.7%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
88
148 73
138
125
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LATVIA
POPULATION
2015 -0.12M (-5.9%) 2025
2.03 MILLION 1.91 MILLION
RURAL RURAL
32.6% 32.1%
0.66M 0.61M
URBAN URBAN
67.4% 67.9%
1.37M 1.30M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
15.3% 5.7% 14.7% 21.2% 21.0% 22.2%
TECHNOLOGY
Internet Users
per 100 people
92
79
2015 2025
126
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LITHUANIA
POPULATION
2015 -0.12M (-3.9%) 2025
3.00 MILLION 2.88 MILLION
RURAL RURAL
33.5% 32.7%
1.00M 0.94M
URBAN URBAN
66.5% 67.3%
1.99M 1.94M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
16.2% 4.9% 17.7% 19.0% 21.0% 21.2%
TECHNOLOGY
Internet Users
per 100 people
92
71
2015 2025
127
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POLAND
POPULATION
2015 -0.30M (-0.08%) 2025
38.22 MILLION 37.92 MILLION
RURAL RURAL
39.5% 38.6%
15.08M 14.64M
URBAN URBAN
60.5% 61.4%
23.14M 23.29M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
13.8% 5.3% 16.7% 23.9% 18.7% 21.6%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
89
68
150
145
128
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ROMANIA
POPULATION
2015 -0.81M (-3.7%) 2025
21.58 MILLION 20.77 MILLION
RURAL RURAL
45.4% 43.0%
9.80M 8.93M
URBAN URBAN
54.6% 57.0%
11.77M 11.84M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
14.6% 5.5% 16.7% 21.7% 20.6% 20.8%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
143 85
128 56
129
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RUSSIA
POPULATION
2015 -5.13M (-3.6%) 2025
142.10 MILLION 136.97 MILLION
RURAL RURAL
26.0% 24.7%
36.93M 33.77M
URBAN URBAN
74.0% 75.3%
105.16M 103.20M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
18.5% 5.6% 15.7% 23.9% 18.7% 17.5%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
188 73 89
172
130
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SLOVAKIA
POPULATION
2015 -0.01M (-0.1%) 2025
5.46 MILLION 5.45 MILLION
RURAL RURAL
46.4% 46.4%
2.53M 2.53M
URBAN URBAN
53.6% 53.6%
2.93M 2.92M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
15.3% 5.2% 16.9% 23.9% 19.7% 19.0%
TECHNOLOGY
Internet Users
per 100 people
95
85
2015 2025
131
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TURKEY
POPULATION
2015 +7.02M (+9.2%) 2025
76.69 MILLION 83.71 MILLION
RURAL RURAL
26.6% 22.3%
20.40M 18.70M
URBAN URBAN
73.4% 77.7%
56.29M 65.01M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
22.2% 7.6% 22.6% 21.3% 15.9% 10.4%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
85
104 54
96
132
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UKRAINE
POPULATION
2015 -3.09M (-6.9%) 2025
44.65 MILLION 41.56 MILLION
RURAL RURAL
30.3% 27.9%
13.53M 11.59M
URBAN URBAN
69.7% 72.1%
31.12M 29.97M
Source: United Nations, Urbanization Prospects (2014)
0-14 15-19 years 20-34 years 35-49 years 50-64 years 65+ years Share of
years (Gen-Z) (Gen-Y) (Gen-X) (Baby Boomers) (Silver Gen) Population
2025
16.0% 5.5% 15.7% 21.4% 19.9% 18.8%
TECHNOLOGY
Mobile Subscribers Internet Users
per 100 people per 100 people
72
144 49
139
133
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DEFINITIONS AND SOURCES
Economy Watch
% GDP per annum growth sourced from Economist Intelligence Unit (EIU)
Inflation, consumer prices % change per annum sourced from Economist
Intelligence Unit (EIU) or from local government statistics offices where
unavailable.
FMCG Market Dynamics - compares overall market dynamics (value and unit
growth) in the Fast Moving Consumer Goods sector based on the sales
tracking Nielsen performs in the mentioned markets. The FMCG definition is
based on the widest possible basket of product categories that are
continuously tracked by Nielsen in each of these countries and channels.
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ABOUT NIELSEN
Nielsen Holdings plc (NYSE: NLSN) is a global measurement and
data analytics company that provides the most complete and trusted
view available of consumers and markets worldwide. Our approach
marries proprietary Nielsen data with other data sources to help
clients around the world understand what’s happening now, what’s
happening next, and how to best act on this knowledge. For more
than 90 years Nielsen has provided data and analytics based on
scientific rigor and innovation, continually developing new ways to
answer the most important questions facing the media, advertising,
retail and fast-moving consumer goods industries. An S&P 500
company, Nielsen has operations in over 100 countries, covering
more than 90% of the world’s population. For more information, visit
www.nielsen.com .
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