 Hello there. My name is Chris Hayward. I'm going to take you through what the out-of-home sector looks like for GB and also how this affects Wales as well. In about 20 minutes I'm going to take you through some insights taken from our new out-of-home panel. First thing is what do we actually collect? We have 7,500 panellists and their task is to tell us about everything that they eat and drink when they are out of home with one small exception, which is alcohol. They don't tell us about that. We also understand about takeaways when they're consumed in home as well. Our panel has 7,500 panellists that are representative of the smartphone universe and this looks at people from ages of 13 up to 79. The key thing to note here is that it's a continuous panel. Therefore whilst there are many out-of-home panels that will tell you about value and potentially number of occasions, a continuous panel allows you to understand if a particular channel or retailer is in growth. Why is that? People switched across to them or have you just got the same amount of customers that they happen to be buying more? The next few slides help to understand the out-of-home market and shows the growth that some of the categories are actually in. Before we go into that let's just understand how we collect the data. It's done via an app for both iPhone and for Android. Essentially if it's a barcoded product then the panelist scans the barcode. If it's an unbarcoded product like an Apple there are a series of screens where the panellists will be prompted to record what they have consumed when out of home. Therefore we understand who has bought what, where, how much they paid for it, whether vouchers were involved, whether it was purchased for someone else and we now have additional capabilities to understand the type of occasion that people are eating and consuming for and the needs that they're eating for as well. So let's have a quick look and get into some data. The first thing to notice is it's a huge market. £47 billion across GB. When we look at who's doing what we can understand that the majority of people, so we've got 97 or 98% in Wales are actually eating out of home at least once in a year. We generally do it around five times a week and we generally spend around £4 when we're actually doing it. So we can break each individual trip size down and later on we're going to understand is it younger or older people that are spending more and who are those people and what else are they doing? Year on year we're seeing quite a lot of growth within the out-of-home market. So to the end of 2016 in grocery the market was pretty much flat whereas for out-of-home it was growing at around four and a half percent. Wales is growing through premiumisation and trip sizes and we're also seeing a huge amount of premiumisation in this market as well. If we start to break down the out-of-home market we can see that formal meals are a huge part of this and I'll go on to talk about this for Wales because this is more so within this area of GB. Drinks is a key category and we'll look at how coffee is important. Quick meal markets including savoury snacks and confectionery, confectionery actually doing better in Wales than it is overall and snack items in slight decline. When we break down and look at quick meals sandwiches dominates and has been a growth market we also know that salads and sushi's offer opportunities within Wales. When we look at confectionery and crisp snacks and nuts we know that this is a challenging area but we also know that Wales does particularly well within confectionery. Coffee is a hero category not just in GB but in Wales too and we've seen where businesses have implemented coffee as a key growth driver. It really has started to turbocharge their business so if we think of quick service restaurants who maybe 10 or 15 years ago coffee wasn't such a big deal now it's a go-to product for them and also helps to convert shoppers into their store and also helps them get into more meal occasions. The exception of vending machines we know that each out-of-home channel takes around a billion pounds over the course of the year and as I said pubs and bars are really important in Wales. When we start to break that down we can have a look and see that in the fourth bar the darker green we can see how disproportionately important pubs and bars are for Wales versus the rest of the GB. We can also understand that it's formal meals that are pushing this value as well so it really seems like the Welsh consumer really buys into those pub meals more so than anyone else in GB. So who is it? So we often talk about millennials and baby boomers and generation X and we can see from this chart what their behaviour actually is. In Wales we can see that the millennials and generation X actually spend less behead than they do in GB but it's the baby boomers that are really driving the growth in Wales. The reason for this is millennials and generation X tend to buy into either cheaper categories or cheaper outlets whereas the baby boomers are more likely to go into the full service restaurants as opposed to maybe quick serve or sandwich shops or the casual dining which has a lower price per ticket. So channels have got clear areas of distinction from our data but equally if you are a main meal provider if you're a full service restaurant and you only do one or two things it's quite difficult to grow. Where we see in growth is where differing retailers are offering different occasions to shoppers so quick service restaurants getting into coffee and getting into breakfast is a clear way and a clear strategy of actually getting to more people via more occasions and increasing your value and your volume. So when we look at bakery and sandwich shops we can understand who is doing what and we know that people buying coffee with something else is really important. So we know that 32% of trips include a hot drink when someone goes to sit to a bakery or a coffee shop whereas in Wales that's around 41%. 20% of quick service restaurant trips include a hot drink that's slightly more in Wales too and finally coffee shop trips including a quick meal is higher in Wales than it is in GB. The point of this is there are thousands of stores to choose from and to be able to stand out from the crowd you've got to have an offering that is both reflective and compelling for the consumer. So as I've already alluded to if you're going to grow there are about four growth leavers that you can you can pull. So the first one is to get new stores and we've seen cost to increase dramatically over the last few years. New occasions so that might be I normally sell things at lunch could I sell things at breakfast it could be weekend versus weekday it could be an occasion type so a good example of this is Pizza Hut are now introducing cocktail bars into their restaurants to get the millennial trade in the evening. Loyalty is key so we're seeing many many loyalty cards or something that you and some kind of app that will get you returning to stores and finally trip spend. So what we've seen both in take home grocery and out of home is premiumization of markets not particularly maybe a bigger volume occasion but certainly something where you can indulge and trade up. Coffee is a key area in this and I'm going to spend a few slides just taking you through how coffee has grown and who is doing what. In Great Britain 72% of out-of-home hot beverage spend is on coffee only 17% on tea. Wales shows a similar dynamic and whilst consumers opting for a slightly cheaper out-of-home coffee. The out-of-home coffee market is worth about 6.2 billion it's showing nearly 9% growth compared to around four and a half percent out of home so it's a really really key product to get people into store for and we're seeing that actually people drink over 3.7 billion coffees a year that's a huge amount. As coffee grows we can see that the channels it operates in are changing as well. Coffee is available in many differing outlets and the competition will continue to evolve so it's not just about coffee shops and bakeries we're seeing many of the multiple grocers offer have a coffee offering we're seeing an easy coffee shop we've already referenced quick-serve restaurants we're looking at Greggs who are very much looking into that casual dining aspect and we're even seeing Starbucks starting to sell craft beer and wine. The coffee market is reliant on some extremely heavy shoppers more than one in 20 of us by the category more than 300 times a year so depending on how many of you are watching this video I'm sure one of you is one of them the heaviest shoppers are not necessarily the connoisseurs we know that the heaviest shopper is the firmly that of the older male and they're unlikely to be buying in the main coffee shops we know that it's a fast-growing and dynamic part of the out-of-home market and as more channels recognize the strategic opportunities that coffee provides is your business ready and well placed to capitalize I'm going to take you through a little section now looking at how shoppers are changing their behavior so in summary coffee is a fast-growing and dynamic part of the out-of-home market more and more channels are recognizing the strategic importance coffee is a fast-growing and dynamic part of the out-of-home market and it's critical that outlets get their offering right one of my key considerations has been how hotels and restaurants look to offer coffee we see many many people going to coffee shops either for a relaxation or a social event but also for business meetings as well if hotels and restaurants start to improve their offering here then could they get into more opportunities and more occasions to help try volume and value it's a really important period for out-of-home sales and lunchtime trade is underperforming as well we've seen blurring of lines as to when people are eating and those three square meals a day really does seem to be a thing of the past and what we're seeing is that morning consumption of products is actually up 9% whereas let the traditional lunchtime of 12 till 2 is slightly down so we also know that shoppers are being a bit more considered at lunch and they're indulging more in the mornings but that leads you to think well what else are they doing in the evenings evenings and evening meals is around about a 13 billion pound market as you would imagine it's driven by meals and dominated by quick service restaurants and full service restaurants and we see that the QSRs are in some pretty good growth we're also seeing premiumization is key as both price per item and items per trip increase year on year so shoppers begin to change their behaviors is your portfolio well placed to capitalize on the growth of out-of-home consumption you ahead of the trend are you following on the tailwind so it's our considered view that food servers will continue to grow and some trends will continue into 2017 so we think that venues will either broaden variety or specialize we also think takeaways will continue to grow confidence is a key thing here and what we often see if confidence is lower that people go back to what they know so traditional menus and things that they're familiar with are going to be key we also know that food tech is changing with the way that we engage with takeaways if you think about how we're ordering them now we can do it via laptop we can do it via tablet we can do it via online the ways we can get our food delivered is ever-evolving Millennials will grow up but are they become are they going to become wealthier that's one to watch so we know that out-of-home has changed rapidly but there may well be a long-term shift as well thanks very much for watching