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									                                                              The Nielsen Company


News Release

Cindy Panzera
+612 8873 7381; +61 410 457 646

                                                                           FOR IMMEDIATE RELEASE

                                         HOUSE BRANDS
    Younger generation represents the biggest future growth opportunity for
                                            Private Label

Sydney, 11 August 2009: According to latest research from Nielsen, sales for Private Label (House
Brand) products now account for almost a quarter of all grocery sales, and the amount spent by the
average Aussie household on these products reached its highest level yet of $172.80 for the latest
quarter (QTR to June 2009) – an increase of five percent or eight dollars compared to the same
quarter last year (Refer to Chart 1).

The Nielsen Report, entitled ‘Smart shopping in challenging times,’ was presented by Kosta Conomos
– Nielsen’s head of Retailer Services for the Pacific – at the Australia and New Zealand PLMA
(Private Label Manufacturers Association) forum on Store Brands on 4 August 2009 at the Star City
Casino in Sydney.

According to the Nielsen report, the number of households buying Private Label products across all
the major chains has grown, driven in part, by its appeal as an attractive alternative to the price
sensitive shopper in the wake of the Global Financial Crisis (GFC). In a Nielsen online survey
conducted in June 2009, 57 percent of consumers said they had been switching to cheaper grocery
brands to save on household expenditure over the past year, and over a third (34%) said they would
continue to purchase cheaper grocery brands even when economic conditions improve.

“While Private Label was still performing strongly prior to the onset of the GFC – what the economic
downturn has done is reinforced the positioning of Private Label as an attractive, cheaper alternative
to branded goods; and this proposition has driven awareness, consideration and trial of these
products across various demographic groups.”

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“As consolidation continues within the grocery channel, retailers will increasingly look at the
positioning of their Private Label strategy as a means of differentiating their store offer from that of
their competitors, with the objective of driving loyalty to their retailer banner,” noted Kosta Conomos,
Executive Director – Retailer Services, Nielsen Pacific.

Another factor contributing to strong performance is the underlying changing perception and growing
acceptance of Private Label in the minds of consumers; and evidence of this is particularly strong
among the younger demographic groups.

In a Nielsen Homescan PanelViews Survey undertaken in September 2008, sixty percent of
households agreed that ‘today’s Private Label products are much better than those available five
years ago’, – among 16-34 year olds, this score was seven points higher at 67 percent (Refer to Chart
2). Looking at Australian households by life stage, Nielsen Homescan data showed that ‘Young
Families’ allocate the highest proportion of their grocery spend to Private Label (25.8% compared to
total households at 22.9% – QTR to June 2009).

“The younger generation would probably not have experienced the old world of Private Label with
questionable quality, limited range and bland packaging. Instead, they have been rewarded with a
very compelling alternative to proprietary branded goods. This group and their children represent the
largest future growth potential for Private Label over the coming decades. In the Pacific, Private Label
products are yet to realize the gains as experienced in Europe,” said Conomos.

“The strong acceptance of Private Label among young households effectively exposes the future
opportunity for retailers and conversely, the challenge for proprietary branded manufacturers.
However, it is important to remember that this is not a zero-sum game. When strong manufacturer
brands meet strong retailer brands – the one that always wins is the one that has the strongest focus
on the consumer.”

“To engage the younger consumer, manufacturers and retailers should adopt an integrated media
strategy across three screens (TV, online and mobile) to provide a combination of maximum reach
and frequency of your brand communication,” added Conomos.

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      Chart 1: Total Private Label – Penetration, $ average spend ($AWOP) and market share trend
200                                                                                                                                                        25

180                                                                                                       $172.10                          $172.80
                                                                                          $167.30                         $169.30
                               $151.90    $153.40
160                  $149.70                                                                                                                               20


120                                                                                                                                                        15

                      99.1       99.1      99.2             99.2             98.9           99.3            98.9            99.0            99.1
                                                                             22.8           23.2            23.1            23.0            22.9
                                           21.5             22.2
                      21.0       21.2
 80                                                                                                                                                        10


 40                                                                                                                                                        5


 0                                                                                                                                                         0
       TR O           TR O           TR
      Q T 23/06/2007 Q T 22/09/2007 Q TO 22/12/2007 QT TO 22/03/2008 Q T 21/06/2008 QTRTO 20/09/2008 Q R TO 20/12/2008 QT TO 21/03/2008 QT T 13/06/2009
                                                      R               TR O                            T                  R                R O

                                           Value Market Share        Penetration      Avg Spend Per Buyer ($ AWOP)

      Source: Nielsen Homescan Australia

      Chart 2: Today’s house brand/generic products (those made specifically for a certain store) are much
      better than those available five years ago

                      90%                                                                                                              Strongly disagree

                                              27%                   30%
                               35%                                                      35%
                      70%                                                                                                              Disagree

      % Households

                                                                                                                                       Neither agree nor disagree
                      40%                                           51%
                               48%                                                      48%
                      30%                                                                                     44%                      Agree


                      10%                     17%                   16%                                                                Strongly agree
                               12%                                                      11%
                               2008           16-34                 35-44               45-54                 55+

      Source: Homescan PanelViews Australia, September 2008

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About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in
marketing and consumer information, television and other media measurement, online intelligence,
mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter,
Adweek). The privately held company is active in more than 100 countries, with headquarters in New
York, USA. For more information, please visit,

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