Smithfield Presentation Final

Smithfield Snacking

Presented By Colin Byxbee, Ryan Gunn, and Amber Templeton

Smithfield Snacking

• Introduction

• Product Strategy

• Snacking Trends

• Market Research

• Recommendations

• New Products

• Packaging

• Marketing Strategy

• Taste Testing

Product Strategy

• Introduce two new product lines

• Leverage Smithfield brand reputation and create co-branding partnerships

• Use strategy to expand westward and increase sales overall

• Use the co-branding partnerships to increase brand awareness and value

• Target two additional consumer segments

Benefits of Co-Branding

Brand Value

• Increase in sales

• Increase in market share

• Increases the premium

• Increases perceived value

• Bonus value with co-brand

• Extend reach

• Increases marketing budget

• Increases credibility

Brand Awareness

• Enhances current line

• Reaches new segments

• Increases brand loyalty

• Enhances product appeal

Source: primepay.com/branding

Snacking Trends

&

Market Research

The Snacking Industry

• Snack sales were $374 billion last year

• Snacks as meal replacements are a growing opportunity

• Women consume more snacks than men

• Consumers want snacks to ‘stick with the basics’

• Less is more!

What was the reason for snacking in the last 30 days?

Snacking Meal Replacement

77%

73%

68%74%

ALL NATURAL

NO ARTIFICIAL COLORS

GMO FREE

NO ARTIFICIAL FLAVORS

NATURAL FLAVORS

GLUTEN FREE

LOW SALT/SODIUM

LOW SUGAR/SUGAR FREE

LOW FAT

LOW CALORIES

PORTION CONTROL

NO HIGH FRUCTOSE CORN SYRUP

LOW/NO CARB

WHOLE GRAIN

HIGH IN PROTEIN

HIGH IN FIBER

SUSTAINABLY SOURCED/FAIR TRADE

ORGANIC

LOCAL HERBS/INGREDIENTS

% THAT RATE HEALTH ATTRIBUTES MODERATELY TO VERY IMPORTANT (2014)

Where Snacks Are Purchased

Snacking Survey

• Conducted snacking survey to canvass potential customers

• Focused on snacking characteristics

• Collected data and analyzed results

• Want to understand consumers’ snacking needs

0

2

4

6

8

10

12

14

16

Convenience Salty Sweet Natural Protein Crunchy Textures Price Brand Name

Not Important

Important

Very Important

A Must

Our Snacking Survey Results

Key Takeaways

Crunch Factor

Salty Craving

Convenience

On-the-go

Taste

All Natural

Not Sweet

Protein

Recommendations

ADVENTURE STYX ADVENTURE STYX WILD

ProductMeat and cheese wrapped around

a SNYDER’S pretzel stickDry cured version

Target- Young professionals (18-30)

- Skew female

- Young professionals (18-30)

- Skew male

Positioning

A portable, protein based snack

for consumption between meals

as an energy boost

A portable, protein based snack

for consumption on the go

Differentiation Pretzel stick Non-refrigerated

Positioning

Leading Vendors of Pretzels in the United States in 2013, Based on Sales

(in Million U.S. Dollars)

388.1

184.6

141.1

72.6

49.9

25.3

17.5

16.7

16.6

7.9

0 50 100 150 200 250 300 350 400 450

Snyders-Lance

Frito Lay

Private Label

Utz Quality Foods

Mars

Herr Foods

National Pretzel Co.

Glutino Importations Deroma

Bachman Co.

Old Dutch Foods

Sales in million U.S. dollars

Source: IRI; Grocery Headquarters; Statista

Source of Protein

Popular colors

stand out in

crowded shelves

Takes advantage

of Smithfield

brand quality

reputation

Captures

adventurous spirit

of Patagonia and

North Face

“All Natural” and

“GMO Free” rank

highly on customer

importance

(Nielsen, 2014)

Packaging

Packaging

Non-refrigerated for

increased convenience

Quality dried ingredients

last longer

“WILD” tag to appeal

to outdoorsy individuals

ADVENTURE STYX ADVENTURE STYX WILD

Grocery / SupermarketWith lunch meats / competitor

productsN/A

Mass MerchandiserWith lunch meats / competitor

productsOn end-cap near outdoor gear

Outdoor Specialty N/A At checkout

Strategic PartnershipsSnyder’s (pretzel)

Boar’s Head (cheese)

Snyder’s (pretzel)

Boar’s Head (cheese)

Retail

PITA SLYDERS

Product Pita bread stuffed with meat, cheese, and Sabra hummus

Target- 30-50 year olds

- Health conscious

PositioningA healthy, portable meal-replacement snack in portion controlled

packaging

Differentiation- Portion size

- Sabra hummus

Positioning

Hummus Dollar Market Share in the United States from 2006 to 2013,

by Brand

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

2006 2007 2008 2009 2010 2011 2012 2013

Do

lla

r s

ale

s s

ha

re

Sabra Athenos (Kraft) Tribe (Osem Nestlé) Cedars Josephs PL Others Eat Well

.

Packaging

Prominent Smithfield

branding and “Good food.

Responsibly” tag

Shared branding

with Sabra will bring

visibility and quality

reputation

High ranking

customer

importance claims (Nielsen, 2014)

Parthenon image to

give impression of

authenticity for

Greek inspired snack

PITA SLYDERS

Grocery / Supermarket With hummus / ethnic foods

Mass Merchandiser With hummus / ethnic foods

Strategic PartnershipsSabra (hummus)

Boar’s Head (cheese)

Retail

Targeted States

The West:

• Washington

• Oregon

• California

• Idaho

• Utah

• Colorado

The East:

• New York

• New Jersey

• Pennsylvania

• Delaware

• Maryland

• West Virginia

• Virginia

• Kentucky

• Tennessee

• North Carolina

• South Carolina

Incentives for Retailers

• Multiple products in single package, saves on space

• Multiple choices for product location in store gives retailers freedom (both

refrigerated and non-refrigerated)

• Smithfield brand reputation

• High marketability

• Consumable goods sell faster

Flavor Portfolio

Adventure Styx

• Ham and Swiss

• Ham and Cheddar

• Ham and Gouda

• Turkey and Swiss

• Turkey and Cheddar

• Turkey and Gouda

• Pepperoni and Swiss

• Pepperoni and Mozzarella

Adventure Styx WILD

• Ham and Gouda

• Pepperoni and Mozzarella

Pita Slyders

• Ham and Swiss

• Ham and Cheddar

• Turkey and Swiss

• Turkey and Cheddar

Key Takeaways

Crunch Factor

Salty Craving

Convenience

On-the-go

Taste

All Natural

Not Sweet

Protein

Enjoy!

GYA

MEAT SNACKS MUST ACKNOWLEDGE PARENTAL HEALTH CONCERNS

Kids’ and teens’ snacking has increased in the past 30 years, with 75% of teens now snacking between meals.

Households with kids under 18, as well as younger adults, are more likely to eat savory snacks of all types, and much more likely to eat meat snacks.

US meat and snack food companies must remain

cognizant of parental concerns, especially childhood

obesity.

78% of parents of kids ages 6-17 think processed

snack foods contain too much sugar or too much

sodium and the same percentage feels that there

should be more healthy snacks available.

Source: Mintel Food and Drink – Hormel launches test of REV Meat Snack Mixes – June 2014

The analyst’s view

• Protein is in

• Snacks often

combine

elements

• Parents matter

Consumers have proven receptive to meat-inclusive snacks,

offering opportunities for meat manufacturers to innovate and develop products that

leverage high consumer awareness and demand for protein-rich snack foods as an

alternative to carbohydrate-only options.

The meat snack segment has experienced growth in refrigerated

as well as shelf stable segments, with innovation now moving into meat snack

product concepts with multiple ingredients, flavours

and textures. There is ample room to grow healthy positioned products that leverage

protein content for its satiety benefits, along with other ingredients.

The key teen snack-eating segment still faces parental scrutiny and control of snack

choices, which means that snack innovators and marketers need to remain cognizant

of parental obesity concerns, as well as concerns over sodium and ‘junk’ food intake

when developing new products, even if they are high in protein.

Source: Patty Johnson, Global Food Analyst, Mintel Food and Drink

Value-based pricing Pretzel Styx

Price Ceiling

(1.99)

Price Floor

($.35)

Final = -18$1.17

Positive Factors

• Indulgent = 8

• Frequency = 11

• IRI Sentiment = 10

• Evolutionary = 10

• Transportability = 10

Negative Factors

• Selective = -6

• Sale Items = -16

• Serving price = -10

• Fewer purchases = -13

• Spending less = -16

• Stocking up = -6

Suggested Retail price$.99

282% Product markup

Value-based pricing Pita-Slyders

Price Ceiling

(2.49)

Price Floor

($.45)

Final = -03$1.47

Positive Factors

• Indulgent = 8

• Frequency = 11

• IRI Sentiment = 10

• Evolutionary = 10

• Transportability = 10

• Partnership = 15

Negative Factors

• Selective = -6

• Sale Items = -16

• Serving price = -10

• Fewer purchases = -13

• Spending less = -16

• Stocking up = -6

Suggested Retail price$1.44

320% Product markup

Snacking Characteristics

Oscar Mayer – P3

“Before there were powders, bars, and goos, there was meat,

cheese, and nuts.” “It’s the Original Protein.”

Price: $1.79

10-13 grams of protein

Target: Active males in their teens / early twenties

Differentiator: Seasoned and prepared meats such as “Hickory

Seasoned Chicken Breast”

Hormel – REV Wraps"Real Meat, Real Cheese, Real Energy“

“For Those Who Are Hungry”

Price: $1.79

13 - 16 grams of protein

Target: Moms with teenage athletic children

Differentiator: Tortilla-style wrap

Jack Link’s – JackPack“Three great tastes in one”

“Meat the snacking trifecta that defined multi-snacking”

Price: $1.99

16 grams of fat

230 Calories

Target: On-the-go snackers

Differentiator: Offers a crunch texture