FMI AND NIELSEN RELEASE FIRST SET OF FINDINGS ON THE DIGITALLY ENGAGED FOOD SHOPPER Jan 30, 2017 Prediction: Within the next 10 years, online food shopping will reach maturation in the U.S.; fundamentally changing how food is bought and sold. Jan. 30, 2017 – Arlington, VA/ New York, NY – Serving as a resource for retailers and manufacturers as the industry embarks on the next digital frontier, Food Marketing Institute (FMI) and Nielsen (NYSE: NLSN) today released a preview of its “Digitally Engaged Food Shopper” analysis at the FMI Midwinter Conference in Scottsdale, AZ. The introductory set of insights from this joint, multi-year initiative offer a comprehensive look into the behaviors, motivations and expectations of the digitally engaged food shopper. This first perspective offers recommendations on how food marketers and manufacturers should be preparing their strategies and managing the organization change that will be required to engage those shoppers. Initial findings from this study show that within the next decade, online food shopping will reach maturation in the U.S., far faster than other industries that have come online before. Research also revealed that the center store is likely to shift online faster than other departments, suggesting a fundamental evaluation of the role of the store plays in digital food shopping. The research estimates that in the current climate of technology adoption and evolution, consumer spend on online grocery shopping could reach $100 billion. To that put that into context, that is the equivalent of 3,900 grocery stores based on store volume. “While we are more connected than ever to influence what shoppers buy, the window to influence those moments is narrowing,” said Mark Baum, chief collaboration officer at FMI. “FMI and its members will need to seize the opportunity to harness new skills and collaborate more seamlessly than ever before to effectively reach these digitally savvy food shoppers. We’re building the tools to help our members assess where they are in their connected commerce strategies.” “Every aspect of the shopper’s journey is influenced by digital, and increasingly, enabled by digital platforms,” said Chris Morley, President of U.S. Buy at Nielsen. “ According to the research, today 59% of grocery shoppers look for sales or coupons on their mobile devices before going to the store and 53% of grocery shoppers use retailers’ apps to shop at the store. This demonstrates the need for retailers and manufacturers to understand the science behind how consumers shop online vs. in-store in order to continue serving the digitally engaged food shopper today and tomorrow.” Key findings of the research: Multi-channel shopping: More shoppers are buying more of their groceries across channels. Digital Experimentation: Grocery retailers and manufacturers are meaningfully experimenting with business models and technologies to find their way online. However, the road to success has not been paved. Grocery Saturation: Grocery shopping will reach digital maturity and saturation faster than other industries before, such as publishing or banking Center Store Migration: Center store categories are already migrating online and this migration is expected to continue. Young & Digital: Younger, newer and more engaged digital shoppers adopt grocery related digital technologies more quickly and will hasten the expansion of digital grocery shopping further. With grocery as the next big retail sector that will be reshaped by digital, retailers and manufacturers need the tools to realize their connected commerce readiness in order to meet the needs of the digital food shopper. An FMI and Nielsen online assessment enables them to assess six areas that are most important to online grocery shoppers: trust, value, experience, assortment, convenience and personalization. The “Digitally Engaged Food Shopper” study is part of a strategic alliance and multi-year initiative with FMI and Nielsen to uncover comprehensive insights on current and future digital shopping behaviors within the food retail marketplace. A copy of the full report is available at www.fmi.org/digital-shopper.