Download Using Shopper Insights to Drive Retail Sales of Hass Avocados

2016
Avocado
Shopper
Segmentation
Avocado Shopper Segmentation
Shopper Groups, Purchase Trends, Demographics
and Growth Opportunities
Using Shopper Insights to Drive Retail Sales of Hass Avocados
Table of Contents
Objective and Methodology
3
Executive Summary
4
Segmentation
6
Key Purchase Trends - Annual
9
Key Purchase Trends - Quarterly
16
Demographics
24
Appendix
33
2
Objective and Methodology
Objective
Understanding fresh avocado shoppers and their purchase behaviors can help marketers
and retailers create strategies that build loyalty, drive traffic and grow sales of Hass
avocados. The objective of this study is to better understand avocado shoppers by
developing a shopper segmentation based on their actual avocado purchase levels (Super
Heavy, Heavy, Medium and Light), and to identify the underlying purchase behaviors and
demographics. Additionally, this study aims to understand how avocado purchase behaviors
vary quarterly throughout the year to identify opportunities for further category growth.
Methodology
•
Time Periods:
–
Current Year: 52 weeks ending 6/12/2016
•
•
•
•
Q3, 2015: 13 weeks ending 9/13/2015
Q4, 2015: 13 weeks ending 12/13/2015
Q1, 2016: 13 weeks ending 3/13/2016
Q2, 2016: 13 weeks ending 6/12/2016
Prior Year: 52 weeks ending 6/16/2015
Data source: IRI Consumer NetworkTM - Consumer Purchase Trends
–
•
–
–
–
Household panel data from the National Consumer Panel (NCP), an operational joint venture between IRI and
Nielsen.The panel consists of a representative sample of approximately 120,000 U.S. households, balanced to
the general U.S. population, who electronically record all purchases
In this study, “General Population” refers to the total panel
The NCP captures the dollar value of fresh avocado purchases, not the volume (eaches). Throughout this
report, “purchases” refers to purchase dollars
3
Executive Summary
Fresh avocados is one of the most successful categories in fresh produce, with double-digit
growth rates fueled by annual household purchases in excess of $1.6 billion. Driving this growth
are the nearly 60% of U.S. households that purchase fresh avocados throughout the year.
While most households are repeat buyers, a very large proportion of avocado purchase activity
is concentrated in a relatively small slice of households. This top-spending quartile (25%),
designated as Super Heavy households, accounts for nearly three out of every four avocado
purchase dollars. With an average annual avocado spend of nearly $70, Super Heavy households
are extremely influential and important to the future of the category.
The other three quartiles each account for a smaller share of avocado dollars than their
respective share of households would suggest. As the second-highest spending quartile (25%),
Heavy households account for 18% of avocado purchases. On a combined basis, Super Heavy
and Heavy households account for 91% of all avocado purchases at retail. These two shopper
groups are the key to the growth that the avocado category has been experiencing.
In stark contrast, on a combined basis, Medium and Light households comprise 50% of all
avocado purchasing households, yet only 9% of the spend. Light households in particular
represent a set of shoppers that are only minimally engaged in the category. Light households
buy infrequently and their average annual household spend is less than $2. Moving this segment
up the ladder may prove challenging.
4
Executive Summary
Because of their greater involvement in the category, Super Heavy and Heavy households
may be more apt to respond positively to marketing efforts to increase their purchases.
Some clues to stimulating purchases by Super Heavy and Heavy households are revealed in
their quarterly purchase patterns. Household avocado purchases are highest in Q3* and dip
to a quarterly low in Q4. Three percent of Super Heavy households and seven percent of
Heavy households drop out of the avocado category altogether in Q4. Finding ways to keep
these influential shoppers interested in avocados at this time of year could add as much as
$16 million to the category. Improving purchase frequency and spend per trip could yield
even greater gains.
This study also provides demographic detail for each of the segments and for avocado
households in total. In many respects, the four segments reflect the general U.S. population.
In other respects, the figures reveal distinct skews that may signal marketing opportunities
and provide insights on the future make up of avocado purchasing households.
Building sales and marketing strategies that leverage the segmentation, seasonality and
demographic insights in this study can help strengthen and expand sales of Hass avocados in
the retail marketplace.
* See Methodology for dates
5
SEGMENTATION
6
Segmentation
Segment Share of Avocado Purchasing Households
Segment Annual Household Avocado Spend Range
Super Heavy = $26. 95 or more
Heavy = $10.45 to $26.94
Medium = $3.90 to $10.44
Light = $3.89 or less
•
•
•
•
•
This segmentation ranked avocado purchasing households according to each household’s total annual
avocado spend (high to low). This ranked list was then divided into four equal segments (buyer groups)
Households in the top-spending quartile (Super Heavy), spend $26.95 or more annually on avocados
Households in the second highest-spending quartile (Heavy), spend between $10.45 and $26.94 annually
Households in the third highest-spending quartile (Medium), spend between $3.90 and $10.44 annually
Households in the lowest-spending quartile (Light), spend $3.89 or less annually
7
Super Heavy households account for one out of
four households, but three out of four avocado
purchases
Segment Share of Avocado Purchasing Households
•
•
•
•
Super Heavy households account for 73% of annual avocado purchases
Heavy households account for 18% of annual avocado purchases
Together, Super Heavy and Heavy households account for 91% of avocado purchases. These two
segments are essentially driving the growth trends in the avocado category and represent key
targets for marketers and retailers seeking to drive continued growth
In contrast, Medium and Light households comprise fifty percent of all avocado purchasing
households but account for only 9% of annual avocado purchases
8
KEY PURCHASE TRENDS ANNUAL
9
Nearly 6 out of 10 U.S. households purchase
avocados, and spend on average $24 per year
Annual Purchase Dollars = $1.6 Billion*
Household Penetration
57% of U.S. households
buy avocados
Spend per Household
Avocado spend per household
averages $23.91 annually
Number of Trips per Household
Avocado buying households
average 6.9 trips annually
X
Spend per Trip
Avocado buying households
spend $3.49 per trip
Data Source: IRI Consumer NetworkTM 2016
All figures are rounded
*Total number of U.S. households = 121MM. Annual avocado penetration = 57% = 69MM households purchasing avocados annually (57% * 121MM = 69MM).
Annual purchase dollars = $1.6B (69MM households with an annual spend per household at $23.91)
10
Most households that purchase avocados are
repeat buyers
•
•
78.3% of total avocado households purchase avocados more than once per year
Nearly all Super Heavy and Heavy households purchase more than once per year
11
Super Heavy households spend four times more
per year than Heavy households
4X
Higher!
•
•
Average annual avocado spend per household (All Buyers) is $23.91
Super Heavy households spend an average of $69.77 per household, more than four times that of
Heavy households
12
Super Heavy households buy more often and
spend more per trip than the other groups
2X
Higher!
2X
Higher!
•
Super Heavy households average 15 purchases annually, more than twice that of Heavy households
•
At $4.64 per trip, Super Heavy households have the highest spend per trip of the four groups, and
nearly twice that of the Heavy group
13
Low
Super
Heavy
All Buyer Average = $3.49
Dollars Per Occasion
High
Together, the number of trips and the spend per
trip, account for each group’s usage level profile
All
Heavy
Medium
Light
Low
All Buyer Average = 6.9
High
Purchase Occasions
•
•
•
Super Heavy and Heavy households purchase avocados more often, and spend more per trip, than
Medium and Light households
On these two key purchase metrics, Super Heavy households far outpace even the second highest
group, Heavy households
These two purchase metrics are key to understanding the underlying shopper dynamics driving
growth in this category, and also help identify developmental opportunities
14
The value of a +1% increase in number of purchase
trips or spend per trip for Super Heavy households
is 4 times higher than for Heavy households
Number of Trips Opportunity
Household
Current # of
Group
Trips
Super Heavy
+1% Increase Opportunity
15.0
15.2 $12,033,010
Spend Per Trip Opportunity
Household
Current $
Group
Spend
+1% Increase Opportunity
Super Heavy
$4.64
$4.69 $12,033,010
Heavy
7.3
7.4
$2,983,044
Heavy
$2.37
$2.39
$2,983,044
Medium
3.5
3.6
$1,140,729
Medium
$1.87
$1.89
$1,140,729
Light
1.5
1.6
$328,954
Light
$1.24
$1.25
$328,954
•
A +1% increase in number of purchase trips or spend per trip for Super Heavy
households represents a +$12MM opportunity for the category
•
In contrast, a +1% increase in number of purchase trips or spend per trip for
Heavy households represents a +$3MM opportunity for the category
*See Appendix page 41 for full opportunity calculation
15
KEY PURCHASE TRENDS QUARTERLY
16
Quarterly purchase dollars dip in Q4 for all
buyer groups
Total Q3
$450
•
•
•
•
Total Q4
$345
Total Q1
$420
Total Q2
$433
Avocado purchases reach their lowest point in Q4 at $345 million
This drop in purchases occurs across all four buyer groups
However, each buyer group’s relative share of purchases remains approximately the
same quarter-by-quarter, with Super Heavy households accounting for approximately
three-fourths of each quarter’s purchases
Subsequent pages examine the purchase trends driving these results
17
Not all avocado purchasing households purchase
avocados every quarter, with penetration at its
lowest in Q4
44
MM*
•
•
39
MM*
46
MM*
46
MM*
While annual household penetration is 57%, quarterly penetration is lower: Not all
avocado purchasing households purchase avocados every quarter
Household penetration reaches its lowest point in Q4, with only 32% of U.S.
households buying
*Total # of U.S. households = 121MM. Annual avocado penetration = 57% = 69MM households purchasing avocados annually (57% * 121MM = 69MM).
However, not all of these 69MM households buy avocados every quarter.
18
Average spend per household is lowest in Q4
and does not fully recover in the following two
quarters
•
•
Average spend per household is lowest in Q4 at $8.77
The low Q4 penetration (page 18) and the low spend per household (above) are
the key purchase trends underlying the low overall Q4 purchase dollars (page 17)
19
Both the number of purchase trips, and the
household spend per trip, decline in Q4
•
•
•
The number of purchase trips hits a low in Q4 at 2.5 trips
Spend per trip shows a sharp decline in Q4 and continues to decline steadily
throughout the next two quarters
The next page examines these quarterly purchase trends by buyer group
20
Household penetration and spend per
household drop for all four buyer groups in Q4
SH and H $ spend per household
drops more than other buyer
groups in Q4
Household penetration dips in Q4
across all four groups
•
•
Q4 household penetration drops for all buyer groups, but less so for Super Heavy
households
While the penetration decline is less pronounced for Super Heavy households, this
group shows the deepest Q4 decline in avocado spend per household
21
All* buyer groups display a Q4 decline in
number of trips and spend per trip
SH, H and M households purchase
less often in Q4
* L household # trips increased
nominally after Q4
•
•
The number of trips hits a low in Q4 for Super Heavy, Heavy and Medium
households, with Super Heavy households showing the greatest decline
Q4 spend per trip declines for all buyer groups from its high in Q3, and does
not recover in the subsequent two quarters
22
Retaining Q3 penetration and per household
spend levels in Q4 would result in large sales
gains for the category
Household Penetration Opportunity*
Household
Household
Group
Spend per Household Opportunity*
Q3
Q4
Gap
Group
Opportunity
Super Heavy
Q3
Q4
Gap
Opportunity
$21.12
$17.28
-$3.84
$57,421,590
Super Heavy
90%
87%
-3.6
$10,667,492
Heavy
77%
70%
-6.8
$5,790,360
Heavy
$6.14
$4.92
-$1.22
$14,385,406
Medium
55%
47%
-8.2
$3,874,614
Medium
$3.27
$2.75
-$0.52
$3,842,945
Light
34%
26%
-8.0
$1,939,065
Light
$1.51
$1.41
-$0.10
$456,804
•
For example, lifting Q4 penetration to match Q3 for Super Heavy and Heavy
households represents a +$16MM sales opportunity for the category
•
For example, lifting Q4 dollar spend per household to match Q3 for Super Heavy
and Heavy households represents a +$72MM sales opportunity for the category
*See Appendix page 42 for full opportunity calculation
23
DEMOGRAPHICS
24
Notes on Demographic Groups
Each of the demographic categories presented in this report reflects the standard sub-breaks
available from the IRI National Consumer Panel (NCP)
•
•
Age
–
–
–
–
–
•
18-34
35-44
45-54
55-64
65+
Income
– Under $20,000
– $20,000 - $24,999
– $25,000 - $34,999
– $35,000 - $44,999
– $45,000 - $49,999
– $50,000 - $59,999
– $60,000 - $69,999
– $70,000 - $99,999
– $100,000+
• Marital Status
– Married
– Single
– Other (Divorced, Separated, Widowed)
Race
–
–
–
–
White
Asian
Black
Other
• Hispanic/Non-Hispanic
– Hispanic (Acculturated + Unacculturated)
– Non-Hispanic/Unknown
• Household Size
– 1
– 2
– 3
– 4
– 5+
• Children/No Children
– Households with Children
– Households without Children
25
The two youngest age groups account for 47% of avocado
purchases
$ Purchases
% pop
37.0%
•
•
$ Purchases
46.9%
$ Purchases
49.2%
41.9%
The two youngest age groups comprise 46.9% of avocado purchases but only 37.0% of the general population
In the Super Heavy group, the two youngest age groups account for an even larger share of avocado purchases
(49.2%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
26
The top two income groups account for nearly half of
avocado purchases
$ Purchases
% pop
39.5%
•
•
•
$ Purchases
47.3%
$ Purchases
48.4%
46.4%
Across many of the income groups, avocado purchase distribution is similar to the distribution of households in the
general population
The top two income groups comprise 47.3% of avocado purchases but only 39.5% of the general population
In the Super Heavy group, the top two income groups account for an even larger share of avocado purchases
(48.4%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
27
Married households make up 63% of the general population
but 72% of avocado purchases
% pop
•
•
$ Purchases
$ Purchases
$ Purchases
Married households account for 62.9% of households in the general population, but account for a greater
percentage of avocado purchases (71.7%)
In the Super Heavy group, Married households account for an even larger share of avocado purchases (73.6%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
28
White households account for 72% of avocado purchases,
slightly less than their share of the general population
% pop
•
•
•
$ Purchases
$ Purchases
$ Purchases
White households account for 76.4% of the general population, but they account for 71.7% of avocado purchases
Asian and Other households account for a larger share of avocado purchases (19.8%) than their representation in
the general population (11.2%)
In the Super Heavy group, Asian and Other households account for an even larger share of avocado purchases
(21.9%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
29
Non-Hispanic households make up 88% of the general
population but account for only 76% of avocado purchases
% pop
•
•
•
$ Purchases
$ Purchases
$ Purchases
Non-Hispanic households account for 87.7% of households in the general population, but a lesser percentage of
avocado purchases (76.0%)
Hispanic households account for a larger share of avocado purchases (24.0%) than their representation in the
general population (12.3%)
In the Super Heavy group, Hispanic households account for an even larger share of avocado purchases (26.7%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
30
Households with 2 people account for the largest share of
avocado purchases
% pop
•
•
•
$ Purchases
$ Purchases
$ Purchases
Households with 2 people account for 32.1% of avocado purchases
Combined, households with 3, 4 and 5+ people account for a larger share of avocado purchases (49.1%) than their
representation in the general population (40.7%)
In the Super Heavy group, households with 3, 4 and 5+ people account for an even larger share of avocado
purchases (50.8%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
31
Households without children account for a larger share of
avocado purchases than households with children
% pop
•
•
•
$ Purchases
$ Purchases
$
$ Purchases
Households without children make up two-thirds of the general population, but a lesser share of avocado
purchases (59.1%)
Households with children account for a larger share of avocado purchases (40.9%) than their representation in the
general population (33.2%)
In the Super Heavy group, households with children account for an even larger share of avocado purchases (42.4%)
Super Heavy and Heavy households account for 91% of total avocado purchases. Please see appendix for Medium and Light households demographic information
32
APPENDIX
ADDITIONAL DEMOGRAPHIC
DETAIL
33
Demographics – Age
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
34
Demographics – Households Income
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
35
Demographics – Marital Status
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
36
Demographics – Race
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
37
Demographics – Hispanic vs. Non-Hispanic
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
38
Demographics – Household Size
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
39
Demographics – Households with Children
% pop
$ Purchases
$ Purchases
$ Purchases
$ Purchases
$ Purchases
40
Annual purchase trips and spend per trip
opportunity: +1% increase valuation
Number of Trips Opportunity
Current Purchase
Household Current $ Current #
Group
Spend
of Trips
New Purchase Dollars
#
Dollars (Spend *
+1% Increase (Spend * New Trips *
of Buyers
Trips * Buyers)
in # of Trips
Buyers)
Opportunity
(New Purchases Old Purchases)
Super Heavy
$4.639
15.041 17,245,397
$1,203,301,005
15.191
$1,215,334,015
$12,033,010
Heavy
$2.366
7.305 17,259,362
$298,304,435
7.378
$301,287,480
$2,983,044
Medium
$1.870
3.545 17,207,774
$114,072,916
3.580
$115,213,646
$1,140,729
Light
$1.242
1.536 17,243,367
$32,895,377
1.551
$33,224,331
$328,954
Spend Per Trip Opportunity
Current Purchase
Household Current $ Current #
Group
Spend
of Trips
#
Dollars (Spend *
of Buyers
Trips * Buyers)
New Purchase Dollars
+1% Increase (New Spend * Trips *
in Spend
Buyers)
Opportunity
(New Purchases Old Purchases)
Super Heavy
$4.639
15.041 17,245,397
$1,203,301,005
$4.685
$1,215,334,015
$12,033,010
Heavy
$2.366
7.305 17,259,362
$298,304,435
$2.390
$301,287,480
$2,983,044
Medium
$1.870
3.545 17,207,774
$114,072,916
$1.889
$115,213,646
$1,140,729
Light
$1.242
1.536 17,243,367
$32,895,377
$1.254
$33,224,331
$328,954
41
Q4 vs. Q3 opportunity gap calculation
Household Penetration Opportunity
Household
Q3 Purchase
Q4 Purchase
Q3
Q4
Group
Dollars
Dollars
Penetration
Penetration
Dollars Per Point of Q4
Penetration Point
Penetration (Q4 Purchase
Gap
Opportunity ($ Per
Dollars/Q4 Penetration * 100) (Q4 Pen - Q3 Pen)
Point * Pen Gap)
Super Heavy $328,894,440 $258,446,009
90.289%
86.710%
$2,980,579
-3.579
$10,667,492
Heavy
$81,195,913
$59,261,841
76.631%
69.810%
$848,902
-6.821
$5,790,360
Medium
$30,929,246
$22,096,357
54.950%
46.752%
$472,629
-8.198
$3,874,614
$8,728,480
$6,217,609
33.530%
25.559%
$243,265
-7.971
$1,939,065
Light
Spend per Household Opportunity
B
Household
Q4 # of
Group
Buyers
Q4 Spend Per Q3 Spend Per
Household
Household
A
Q4 Purchases at Q4 Spend Rate Q4 Purchases at Q3 Spend Rate
Gap
(Q4 Buyers * Q4 Spend Rate)
(Q4 Buyers * Q3 Spend Rate)
Opportunity
(A - B)
Super Heavy
14,953,539
$17.283
$21.123 -$3.840
$258,442,017
$315,863,607
$57,421,590
Heavy
11,781,660
$4.918
$6.139 -$1.221
$57,942,202
$72,327,608
$14,385,406
Medium
7,333,865
$2.747
$3.271 -$0.524
$20,146,127
$23,989,073
$3,842,945
Light
4,614,179
$1.411
$1.510 -$0.099
$6,510,606
$6,967,410
$456,804
42
Thank You
43