Barbeque Sauce Dalton Galloway Trevor Gamradt. Category Role Blattberg’s Category Role: “Core Traffic” High sales volume, with a large number of households.

Barbeque SauceDalton Galloway

Trevor Gamradt

Category Role

• Blattberg’s Category Role: “Core Traffic”

• High sales volume, with a large number of households having barbecue sauce

• Medium variation, Repeated variations on the “original BBQ flavor” (e.g. Hot, smokey, sweet), Certain brands have

different levels of variety.

• Foundational part of any condiment aisle, can take a fair amount of store space due to high levels of depth in the category.

• “Win on Deal”: High household penetration, Low Margins, competitive

Knowing Your Customers

• This is a “normal category.”

• Larger households are more likely to purchase barbecue sauce compared to smaller families, or families just starting.

• “Brand Buyers”

• More prominent in rural/country areas

• Black people are a larger proportion of consumers of BBQ

• Single person households don’t consume as much BBQ

Affluent Suburban Spreads

Cosmopolitan Centers

Young TransitionalsAny size HHs, No Children, < 35

Older Bustling FamiliesLarge HHs with Children (6+), HOH 40+

Younger Bustling FamiliesLarge HHs with Children (6+), HOH <40

Small Scale FamiliesSmall HHs with Older Children 6+

Start-Up FamiliesHHs with Young Children Only < 6

TotalPlain Rural

Living

Modest Working Towns

Struggling Urban Cores

Comfortable Country

Total

Senior Couples2+ person HHs, No Children, 65+

Empty Nest Couples2+ person HHs, No Children, 55-64

Established Couples2+ person HHs, No Children, 35-54

Senior Singles1 person HHs, No Children, 65+

Independent Singles1 person HHs, No Children, 35-64

114

108

82

10079 89 106 104 104 112

123

161

167

82

51

34

72 75 78 96 83 91

99 93 105 119 119 119

91 100 121 112 118 132

26 29 32 37 36 37

34 44 51 61 60 55

55 95 92 74 88 107

168 123 170 169 188 210

136 99 180 176 181 173

112 103 134 133 119 136

TOTAL BARBECUE SAUCES (COND/GRAV/SAUC) OZ. Total Consumption BehaviorScape Framework

LifeStyle

BehaviorStage

87 106 126 126 134 141 121

% HHs HHs Index % HHs HHs Index % HHs HHs Index % HHs HHs Index % HHs HHs IndexRace of Head of Household White 80.7% 117 87.2% 127 73.5% 107 80.0% 116 76.3% 111 Black 2.9% 24 4.6% 39 2.6% 21 6.3% 52 4.4% 37 Hispanic 3.2% 25 3.7% 29 15.5% 124 5.2% 41 12.1% 97 Asian 8.5% 190 2.1% 47 6.0% 135 4.7% 105 4.1% 91 Other 4.7% 206 2.4% 105 2.4% 106 3.9% 171 3.1% 135Number of Persons 1 Person 59.2% 218 30.0% 110 25.0% 92 41.8% 154 35.8% 131 2 Persons 28.9% 90 34.8% 108 29.8% 92 32.0% 99 31.2% 97 3 Persons 6.8% 42 17.8% 110 16.3% 101 13.0% 80 14.4% 89 4 Persons 3.9% 29 10.0% 76 15.6% 119 8.4% 64 10.1% 77 5+ Persons 1.2% 10 7.4% 66 13.3% 119 4.7% 43 8.6% 77Household Income Under $10,000 23.5% 319 13.0% 177 4.4% 60 22.0% 298 10.5% 142 $10,000 - $19,999 28.2% 262 10.9% 102 7.1% 66 20.3% 189 14.4% 134 $20,000 - $29,999 11.4% 109 7.3% 69 9.4% 89 13.5% 128 13.2% 125 $30,000 - $39,999 9.4% 95 9.0% 91 8.9% 91 9.8% 99 14.8% 150 $40,000 - $49,999 7.0% 79 8.7% 97 10.6% 120 8.1% 91 8.8% 99 $50,000 - $74,999 11.1% 62 17.1% 96 21.2% 119 13.5% 76 14.5% 82 $75,000 - $99,999 4.1% 34 11.0% 92 12.3% 102 4.7% 40 7.3% 60 $100,000 - $149,999 3.0% 23 17.3% 133 12.8% 99 6.0% 46 8.9% 68 $150,000 or More 2.4% 25 5.7% 58 13.2% 134 2.2% 23 7.7% 78Age of Head of Household Age 18 - 24 19.7% 485 13.7% 338 5.2% 128 22.4% 552 11.5% 282 Age 25 - 34 32.1% 213 35.0% 231 18.7% 123 28.4% 188 25.3% 167 Age 35 - 44 15.6% 91 20.3% 118 21.3% 124 16.0% 93 18.4% 107 Age 45 - 54 10.0% 51 11.7% 60 20.3% 103 11.5% 59 14.6% 74 Age 55 - 64 11.7% 60 9.7% 50 15.4% 79 10.9% 56 13.8% 71 Age 65 - 74 6.9% 50 5.4% 39 9.8% 72 6.3% 46 8.4% 61 Age 75 or More 4.0% 37 4.2% 39 9.4% 87 4.5% 41 8.0% 74

3 mile Ring

Walmart on Joyce1 mile Ring 1 mile Ring 3 mile Ring

Demography

Marvin's on College Harps on Weddington Pinnacle Hills Walgreens 3 mile Ring

Walmart on MLK

Age and Presence of Children Age < 6 0.9% 13 13.9% 191 7.6% 104 5.5% 76 8.8% 121 Age 6 - 17 5.3% 29 6.9% 37 19.5% 106 11.2% 61 14.0% 76 Age < 6 & 6 - 17 1.0% 16 8.1% 125 11.4% 175 3.1% 47 6.2% 95 No Children 92.8% 137 71.1% 105 61.5% 91 80.2% 118 70.9% 105Spectra LifeStyle Prosperous Suburbs 0.0% 0 0.0% 0 20.8% 493 0.0% 0 0.0% 0 Elite Country Manors 0.0% 0 0.0% 0 4.5% 124 0.0% 0 0.0% 0 Cosmopolitan Suburbs 0.0% 0 0.0% 0 4.0% 75 0.0% 0 19.6% 368 Midscale Suburban Mix 0.0% 0 0.0% 0 26.5% 714 0.0% 0 5.1% 138 Midscale Minipolitan 0.0% 0 0.0% 0 16.4% 492 0.0% 0 9.7% 292 Midscale Fringe Towns 0.0% 0 0.0% 0 6.5% 160 0.0% 0 10.8% 264 Midscale Working Towns 0.0% 0 56.6% 948 3.3% 56 4.8% 80 0.0% 0 Striving Suburban Mix 0.0% 0 43.4% 1276 3.1% 90 21.0% 618 0.0% 0 Moderate Blue-Collar Towns 0.0% 0 0.0% 0 0.0% 0 7.6% 139 0.0% 0 Struggling Small City Mix 85.6% 2641 0.0% 0 6.2% 192 36.9% 1139 35.2% 1085 Struggling Minipolitan 14.4% 301 0.0% 0 5.8% 122 12.8% 267 10.5% 220 Struggling Country Living 0.0% 0 0.0% 0 0.0% 0 16.9% 427 6.4% 161Home Value Under $50,000 0.6% 11 4.8% 90 2.2% 41 1.5% 28 2.3% 44 $50,000 - $99,999 2.8% 31 1.4% 15 6.8% 75 3.4% 37 5.4% 59 $100,000 - $149,999 3.1% 31 13.1% 129 15.0% 148 8.7% 86 9.3% 92 $150,000 - $199,999 1.7% 17 17.6% 182 12.4% 129 4.9% 51 9.2% 95 $200,000 - $299,999 2.0% 17 14.6% 122 9.0% 75 6.1% 51 8.9% 74 $300,000 - $499,999 2.2% 20 1.1% 11 8.6% 79 2.8% 26 4.8% 44 $500,000 or More 0.9% 11 0.0% 0 6.1% 77 0.6% 8 2.3% 30 Not Owner-Occupied 86.7% 248 47.4% 135 39.8% 114 71.9% 205 57.8% 165

Marvin's on College Harps on Weddington Pinnacle Hills Walgreens Walmart on MLK Walmart on Joyce

Category Assessment

• Stores Audited:• Marvin’s Food Store on

College Ave, 2/25/15

• Harps on Weddington, 3/11/15

• MLK Walmart, 4/17/15

• Joyce Walmart, 2/29/15

• Pinnacle Hills Walgreens, 3/12/15

• 130 Different SKUs found, 46 SKUs are only found in one store, not including private label

• 33 SKUs found at most stores, brands included are: Sweet Baby Ray’s, Kraft, KC Masterpiece, Hunt’s, Famous Dave’s, Cattleman’s, Sticky Fingers Smokehouse, Stubb’s, Jack Daniels, and Head Country

Category Assessment

• 7 Brands stand out as the differentiators, with a slightly higher price point. Interestingly, they were the SKUs only found at the Harps and Marvin’s stores. Those brands include:

• Blues Hog

• G Hughes Smokehouse

• Bronko’s

• Rendezvous

• Cattleman’s (non-original flavors)

• McClard’s

• John’s

• Private labels in this category have a smaller proportion of the market; barbecue flavors are more selective and strive for their own distinct signature flavor compared to other condiments such as ketchup.

Category AssessmentSTORE NAME

# SKU % of Category

Marvin’s Super

Savers Club

67 51.53%

Pinnacle Hills

Walgreen’s

1 0.01%

Wedington Harp’s 48 36.92%Joyce Walmart 61 46.92%MLK Walmart 77 59.23%

Category Strategy

• The major manufacturers stated earlier are found at most of our audited stores, with Sweet Baby Ray’s being the only brand found at all stores. Kraft has a larger number of facings in Walmart stores, and smaller more differentiated retailers give more facings to the “Price brands” than Walmart.

Category Strategy

Category Tactics

• Stubb’s BBQ is the highest costing Barbecue, which correlates to the higher income families predominantly purchasing Stubb’s brand BBQ. The other manufacturer brands have minmal variance in cost, with KC Masterpiece being the cheapest.

• Stubb’s has the highest Gross Margins, KC Masterpiece and Kraft have the lowest Gross Margins

• Kraft and Heinz merger may cannibalize sales between existing brands. Brands included are Kraft, Bull’s-eye BBQ Sauce, and Jack Daniel’s.

• Private Label is not a major player in this category, it is a “Good Loser”: Low market share, and low price gap with manufacturer brands

Category Tactics

Category Tactics

Comparison to Fall 2011

• The following 2 slides show the SPSS data from Fall 2011. Which we are using them to compare the 2011 view of barbecue sauce to the one we see currently in 2015.

• When comparing total facings, more “Other” category barbecue sauces have entered the market. As a result, the facings in the category has grown from 109 SKU’s in 2011 to 140 SKU’s in 2015.

• The facings at each store have seen a little bit different of an effect. The MLK Walmart has added only 1 additional SKU since 2011, while the Joyce (Mall) Walmart has seen a decrease from 72 SKU’s to 61. The Harp’s has seen a slight decrease from 53 SKU’s in 2011, to 48 in 2015.

• The Gross Margin percentages for the category as a whole have exponentially grown. At the MLK Walmart, there was an increase from 21.99% to 33.69% on average in 2015. The Joyce (Mall) Walmart saw an increase from 22.18% in 2011 to 37.11% on average. While the Harp’s has also seen growth, going from 36.58% in 2011 to 45.42% on average in 2015.

Comparison to the Past

Comparison to the Past

Category Review

• Category continues to grow, lack of barriers to entry allow smaller manufacturers, such as successful local restaurants, to create, bottle, and distribute a wide array of unique and signature flavors to consumers.

• The category hasn’t seen a large growth of facings of the larger brands in particular, but it has a whole.

• The category is also seeing a large growth in gross margin percentages from 2011 to 2015.