1 © Gfk 2014 | Return on Innovation | 29 May 2014 2 How Many Bulgarian People Will Be in 16 Years?

Population prognosis Age structure prognosis

7900000

7563710 33% up to 29 31% 7 362 311 30% 7400000 29% 29% 7 121 205

6 856 247 6900000 6 611 320 43% 43% 43% 30-59 42% 6400000 40%

5900000 31% 28% 29% 60+ 24% 26%

5400000 2010 2015 2020 2025 2030 2010 2015 2020 2025 2030

Source: Eurostat © GfK 2014 | Return on Innovation | 29 May 2014 3 Who are they?

7.3 mln. people 3 mln. Households 2,4 - Av. age size of HH

51% Women 49% Men 13% - Children up to 15

71 Av. life expectancy Men 78 Av. life expectancy women

50% South-West and South central regions 24% North-west and Central North regions

Source: NSI © GfK 2014 | Return on Innovation | 29 May 2014 4 © GfK 2014 | Return on Innovation | 29 May 2014 5 When do they spent most money? 2013 Value share %

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

16% 16% 15% 14% 14% 14%

12%

Change vs. 2012 in pp 2,0 0,1 0,2 0,2

-1,6 -0,4 -0,5 GfK Consumer Panel © GfK 2014 | Return on Innovation | 29 May 2014 Till roll based 6 What is behind that change?

9,1 2012 99% 51 BGN purchase acts per Shrinking Monday year expenditures 2013 100% 9,2 42 BGN purchase acts per year

2012 9,1 30 97% BGN purchase acts per year Increasing Sunday expenditures 2013 9,4 99% 34 BGN purchase acts per year

GfK Consumer Panel © GfK 2014 | Return on Innovation | 29 May 2014 Till roll based 7 © GfK 2014 | Return on Innovation | 29 May 2014 8 Which channel and Which day?

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Hypermarkets

Supermarkets

Minimarkets

Discounters

Cash and Carry

Traditional trade

GfK Consumer Panel Services © GfK 2014 | Return on Innovation | 29 May 2014 Till roll based 9

CHANNEL DEFINITIONS

Hypermarkets . self-service outlet with more than 3 cash desks and larger assortment of non-FMCG categories such as electronics, furniture, textile (Carrefour, HIT, Kaufland) Supermarkets . self-service outlet with more than 3 cash desks including big format outlets (Billa, CBA, Evropa, Fantastico, Piccadilly, Т- market), independent supermarkets, smaller local chains Hard Discounters . modern shops with low prices for food and non food products (Penny, Lidl) Cash & Carry . Metro C&C Minimarkets . smaller food/grocery self-service outlets with 1 or 2 cash desks, self-serving - including Fantastico Minimarkets, CBA Minimarket, Carrefour Market, Coop, Magazin 345, Piccadilly Daily, Promarket and others Small Grocery Shops . traditional shops, served by a cashier, 1 or 2 cash desks, food and non-food goods; (include Metro supported chain Moyat magazin) Open Market & Street vendors . open spaces for trade, especially for food products Others . all other outlet format like kiosks, petrol stations, door-to-door sales, market halls, general stores, on-line sales © GfK 2014 | Return on Innovation | 29 May 2014 10 How much money are spent per purchase trip in 2013?

16.4 14.9 10.7 9.8 9.0 7.9 BGN BGN BGN BGN BGN BGN

Hypermarkets Cash and Carry Discounters Supermarkets Minimarkets Traditional trade

How many purchase acts are made per household in 2013?

29 5 24 47 63 107

GfK Consumer Panel Services © GfK 2014 | Return on Innovation | 29 May 2014 Till roll based 11 ?

4% 4% 3% 1% 0% Internet penetration of FMCG 2009 2010 2011 2012 2013

89% 92% 78% 81% 68%

PL penetration 2009 2010 2011 2012 2013

95% 95% 90% 93% 80%

Promotion penetration 2009 2010 2011 2012 2013 GfK Consumer Panel Services © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 13 © GfK 2014 | Return on Innovation | 29 May 2014 14 3 in 1 Coffee Mix

3 in 1 53 48 42 45 46 36 Penetration % 29 28 33 22 8

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

3 in 1 77 70 69 71 72 73 63 Repeat rate % 57 61 60

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

GfK Consumer Panel Services © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 15 Where has 3 in 1 Coffee Mix volume come from? Analyzed within Hot beverages 2004 vs. 2003

Roasted Coffee +85% almost 5 times Growth in Volume (=100) Instant Cappuccino +7%

from from buyers intensification other categories Tea +4% 36% 64%

Instant Coffee +2%

Instant Cocoa +2%

GfK Consumer Panel Services I Gain & Loss analysis © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 16 © GfK 2014 | Return on Innovation | 29 May 2014 17 Shampoo for men

Shampoo for men 11 Penetration % 7 8 7 3 4 4 1 2 2 2

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Shampoo for men 38 30,3 26,0 25,4 29 29 Repeat rate % 23 20 12,3 11,5 7,9

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

GfK Consumer Panel Services © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 18 Where has Hair shampoo for men volume come from? Analyzed within Hair Shampoo and Toilet soap categories 2013 vs. 2012

Growth in Volume Toilet soap +73% 35% (=100)

from from buyers intensification other categories Unisex hair shampoo +23% 20% 80%

Children hair shampoo +4%

GfK Consumer Panel Services I Gain & Loss analysis © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 19 © GfK 2014 | Return on Innovation | 29 May 2014 20 Beer Mixes

Beer Mixes 15 16 13 Penetration % 10

2HY 2011 1HY 2012 2HY 2012 1HY 2013 2HY 2013

Beer Mixes 48 52 53 42 Repeat rate %

2HY 2011 1HY 2012 2HY 2012 1HY 2013 2HY 2013

GfK Consumer Panel Services © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 21 Where have Beer Mixes volume come from? Analyzed within Cold beverages 2013 vs. 2012

CSD +47% Growth in Volume +40% (=100) Bottled water +40%

from buyers intensification from other categories- 93% 7% Nectars & Juices +19%

Ice Tea +1%

Beer -7% GfK Consumer Panel Services I Gain & Loss analysis © GfK 2014 | Return on Innovation | 29 May 2014 FMCG based 22 ? •

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GfK Bulgaria 47A, Tsarigradsko shosse Blvd. 1124 Sofia, Bulgaria

Neda Klenska Junior research consultant

tel.: +3592 930 8672 fax: +3592 930 8686

[email protected] www.gfk.com