Non-food as a business engine in Food retail Stephen Schueler Procter and Gamble 4 Feb 2011

Who wants to increase your market share?

What determines your ability to drive market share? YOUR SHOPPER!

Top drivers to increase your market share: Attract New Shoppers Build Loyalty of Existing Shoppers Win with High Spenders

WHY NON-FOOD CATEGORIES ARE IMPORTANT TO WIN WITH SHOPPERS?

1.Non-Food has strong potential with your existing shoppers Size of the prize = 400 mln.$ for HM channel % of store shoppers buying category in this store (Hypermarkets) 46 Biscuits 44 Cheese 49 Juice 59 Dairy food 34 Dentifrice 32 Shampoo 31 Fem Care 28 Hand Dish non-food

2. Non-Food helps shoppers to choose your store for Bulk Shopping Non-food categories are highlighted Top powerful categories that define shoppers’ satisfaction by the store: Value of Bulk trip = 4.7x Value of Refill trip Oral Care Fruits & Vegetables Coffee& Tea Soft drinks & Juices Toilet Paper & Towels Cheese Snacks Fresh Meat & Poultry Fresh Meat & Poultry Oral Care Cheese Fem Care S oft drinks & Juices Toilet Paper & Towels Fruits & Vegetables Shampoo & Shower Milk& Dairy Coffee & Tea Bakery Laundry & Home Care Refill shopping Bulk shopping

… win her man She needs to be beautiful to… 1. Russian consumers are “Thirsty for Beauty” Importance of Russia WE Being attractive to men, % 90 41 Having stylish feminine clothes, % 89 57

Non-food suppliers are investing heavily in TV creating strong demand for new products Period: Jan-Dec 30" 18+ Russia 21 419 17 938 Colgate-Palmolive 10 21 704 13 952 Kalina 9 25 278 27 265 Megafon 8 27 453 29 159 MTS 7 32 665 26 858 Beeline 6 47 458 48 764 Reckitt Benckiser 5 53 005 57 651 Unilever 4 64 457 74 592 L'Oreal 3 65 010 56 036 Henkel Group 2 121 511 94 255 Procter & Gamble 1 768 122 705 404 Non-Food 311 713 289 655 Food 2010 2009 Top 10 advertisers, GRPs

3. Winning with Young Families Child birth is a point of change in values Now baby is #1, #2 and #3 spending priority Now she has less time in her new role: =>she visits less stores and shop more in E-commerce (Intensity Ind=124 );

Families spend more, especially younger ones… especially in Modern Trade GFK , 200 9 86 81 Seniors 108 87 Adults 97 121 Families w/o children 94 106 Parents with teenagers 101 120 Mature parents 112 113 Young parents Modern Trade Total Russia Spending Index

Help her in the new role of being a mother Pampers Charity program Partnering with Retailers and leading websites P&G donates 1 vaccine for UNICEF with every purchased pack of Pampers Communication tools: - Internet (mail.ru) - In-Store

THANK YOU