CPG Manufacturers Distributed 332 Billion Coupons in 2010

LIVONIA, MI—March 31, 2011—Valassis, one of the nation’s leading media and marketing services companies, released a comprehensive report on 2010 coupon usage that saw consumer packaged goods (CPG) manufacturers offering consumers $485 billion in savings. This represents a 13.9 percent increase over the prior year and 47.4 precent growth compared to five years ago, according to the NCH Marketing Services 2010 Coupon Facts Report. NCH is a Valassis company.

“We have seen significant changes to shopping patterns, which have now been established as new habits and routines,” said Suzie Brown, Valassis Chief Marketing Officer. “Consumers’ continued interest in coupons and savings has been influenced by concerns over their own personal economic situations, and as a result, they are using more coupons, seeking savings wherever they can, combining print and digital offers and permanently becoming strategic shoppers.”

In 2010, marketers once again distributed more CPG coupons than the prior year, reaching 332 billion—the largest single-year distribution quantity ever recorded in the United States, exceeding the prior record set in 2009 by 6.8 percent or 21 billion coupons.

Nearly two-thirds of all coupons distributed in 2010 were for grocery products, up 8 percent from the prior year to 216 billion coupons. The remaining one-third of coupon offers in 2010 —116 billion coupons—were for health & beauty care (HBC) products up 4.5 percent from the prior year. According to the report, seven of the top 10 categories with the highest growth are non-food categories, which can be attributed to marketers’ desire to make these oftentimes discretionary purchases more desirable.

Top 10 Categories With Highest Growth in Coupon

1—Oral Hygiene
2—Laundry Supplies
3—Fresheners & Deodorizers
4—Household Cleaners
5—Breakfast Foods - Shelf Stable
6—Pet Food
7—Yogurt
8—Personal Cleansing & Bath Products
9—Detergents
10—Liquor

The report also took a closer look at coupon characteristics and found:

• The average face value of CPG coupons distributed in 2010 increased by 6.6 percent to $1.46.

• The average coupon face value distributed for grocery products in 2010 was $1.24, up 6.9 percent from the prior year.

• The largest growth was in beverages, now averaging $1.52 up from $1.18 in 2009.

• The average coupon face value distributed for HBC products was $1.94, up 6.6 percent from the prior year.

• Over the counter (OTC) and prescription medication coupons carry an average face value of $2.21, up from $2.17 in 2009.

• 26 percent of all CPG coupons issued in 2010 required the purchase of two or more items to obtain the offer discount. 33 percent of the grocery coupons required multiple purchases and only 13 percent of HBC coupons required multiple purchases to receive the discount.

• Consumers now have a week and a half less time to use coupons, compared to the prior year, due to an overall shortening of offer expiration dates in both the grocery and HBC segments. The average expiration is 10.1 weeks.

• 64.4 percent of all grocery coupons distributed expire in eight weeks or less, and 59.6 percent of all HBC coupons distributed expire in eight weeks or less.

According to the NCH Coupon Facts Report, overall, 87.7 percent of all CPG coupons were distributed in 2010 via the Free-standing Insert (FSI). Total FSI total growth in coupons was 19 billion, the largest volume increase of all media. The second largest share of coupons distributed was via In-Store media, amounting to 5.2 percent of the 2010 total.

Digital coupons, including both paper and paperless formats, continued to grow in 2010 as marketers embraced these methods to reach a new audience. In total, NCH measured a 37 percent increase in the number of digital coupon offers, the largest increase of all coupon media types.

“In 2010, consumers saved $3.7 billion by using CPG coupons,” said Charlie Brown, NCH Vice President of Marketing. “With so much money at stake, brand manufacturers and fast-moving consumer goods retailers must ensure their expenditures are protected while continuing to collaborate for the most effective use of coupon promotions to meet strong consumer demand.”

Frugal shopping habits created during the most recent recessionary period were sustained throughout the sluggish economic recovery that occurred during the year. Redemption volume in the United States grew 3.1 percent to 3.3 billion CPG coupons. The annual coupon report also revealed that:

• Grocery coupon redemption volume grew 10 percent in 2010 compared to the prior year, and up 29.4 percent since 2006.

• 59.7 percent of all coupons are redeemed at traditional grocery stores, and 23.9 percent at mass merchandisers, including supercenters, while drug stores redeem 6.6 percent of the coupons in the marketplace.

• The retail segment that includes Dollar Stores represented the largest year-over-year growth in 2010 coupon redemption, up 25.1 percent compared to 2009.

Seventy-eight percent of respondents to NCH’s 2010 Annual Consumer Survey report using coupons regularly, up 14.7 share points from pre-recession levels, and a third said that they used more coupons in 2010 than the prior year. Additional findings of this survey indicate:

• 31 percent of consumers say they have become more careful about bringing their coupons to the store.

• 25 percent report that they are clipping more coupons due to their personal economic situation.

• Nearly three quarters of those who made such shopping changes expect to continue their frugal habits in the future, even as the economy improves.

• Among those consumers who reported using more coupons than the prior year, the largest share in 2009, 37.4 percent, explained their reason for doing was so to stretch a limited grocery budget out of necessity.

• Once consumers adopt these frugal habits, they quickly discover that they like the feeling of saving money. Acceptance of these new habits can be seen in the largest share of response for increased coupon usage in the 2010 survey—29.3 percent of consumers stated they are using more coupons for the enjoyment of saving, an increase of 11.7 share points over those stating that reason the prior year.

About The Annual NCH Coupon Facts Report
NCH, a Valassis company, is the global leader in business solutions for the redemption, settlement and analysis of promotional offers. With the volume of coupons processed by the company in the United States and worldwide, NCH is in a unique position to deliver the most accurate analysis of coupon promotional trends. Coupons distributed and redeemed in the U.S. consumer packaged goods marketplace are studied utilizing their manufacturer client databases, data cleared via their retailer processing operation and other independent sources. This proprietary methodology utilizes rigorous controls and statistical standardsto maintain the integrity of the information contained in this report, as well as, all other information tools supplied by NCH. The U.S. consumer packaged goods coupon trends is reported in three main sections:distribution trends,redemption trendsandproduct categories. The report is available now by registering at www.nchresourcecenter.com.

This report also contains various references to NCH’s most recent Consumer Survey. The data was obtained in August of 2010 using a market research firm with proficiency in Internet surveys. The survey was closed once 1,000 completed responses had been reached. The responses were weighted by factors obtained from national census data to provide appropriate representations of demographic groups at summary levels.

About Valassis
Valassis is one of the nation's leading media and marketing services companies, offering unparalleled reach and scale to more than 15,000 advertisers. Its RedPlum media portfolio delivers value on a weekly basis to over 100 million shoppers across a multi-media platform - in-home, in-store and in-motion. Through its digital offerings, including redplum.com and save.com, consumers can find compelling national and local deals. Headquartered in Livonia, Michigan with approximately 7,000 associates in 28 states and eight countries, Valassis is widely recognized for its associate and corporate citizenship programs, including its America's Looking for Its Missing Children program. Valassis companies include Valassis Direct Mail, Inc., Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. For more information, visit www.valassis.com, www.redplum.com and www.save.com. To learn about advertising opportunities with RedPlum, please call (800) 437-0479.

Source: company release.