1
Lipton Iced Tea
Carly Kinkler
East Division
SMP Project
Date: 8/28/08
2
Sales Management Program 2008
• FDM
• Foodservice
• Category Management
• Field Marketing
• Field Work
• Recommendations
3
Agenda
• Consumer Proposition
• Performance at Retail
• Compared to Category
• Performance by Division
• Distribution Voids
• Bottler Feedback
• Recommendations
4
Attributes
Naturalness Freshness
Power of Nature
Inherent Goodness
OriginEthical
Tea Taps Into Key Vitality Trends
Drivers
Increasing Life
Expectancy
Obesity
Stressful Lives
Processed Foods
Seen As Bad Guys
Consumers Turning to Tea for Health and Wellness Benefits
Consumer Insights
5
Where RTD Tea Stands
•Shelf-Stable Juices & Drinks
•Coffee •Tea
•Energy Drinks •RTD Tea •RTD Coffee
Fun
•CSDs•Alcohol
Fresh Functional
•Milk•Refrigerated Juice
•Water•Sports Drinks
Source: AC Nielsen Homescan Panel Database
6
Lipton Iced Tea S.W.O.T. Analysis
Strengths– Distribution– Trusted Brand– Health and Wellness Benefits– Green Tea
Weaknesses– Large Format Inventory and
Variety– Cold Vault Space
• Full Shelf LIT• Full Shelf Pure Leaf
– Distribution of New Products
Opportunities– LIT JUG
• Grow Sales & Volume
– New Flavors• 2009 Innovation
– Grow Distribution of Innovation Flavors
• White Peach Papaya• Diet Green Berry
Threats– Arizona 1st to Market
• JUG
– Economy• Consumers Price Conscious• Move towards Private Label• C&G Decline
– Paying at the Pump
– Aggressive Nestea Pricing
7
Performance at Retail – East Grocery
Tea Scorecard – Current YTD ending July 27, 2008
Vol Share of RTD Tea Category (East - Grocery)
27
11
18
28
13
3
0
5
10
15
20
25
30
PCNA Coca Cola DPSU Arizona Private Label Other
Vo
l. S
hare
PCNA
Coca Cola
DPSU
Arizona
Private Label
Other
Volume Share of RTD Tea Category
Other, 18%
Brisk, 8%
Leaf, 1% Nestea, 10%
Arizona, 27%
LIT, 19%
Snapple, 18%
8
Volume Sales Chg YAGTotal US Grocery
Current YTD Ending July 20, 2008
0
5,000
10,000
15,000
20,000
25,000
30,000
LIT Nestea Snapple Arizona PrivateLabel
Vo
l S
ales
(00
0)
Total US Volume
Total US Volume YAG
Volume Sales Chg YAGEast Division - Grocery
Current YTD Ending July 20, 2008
02,0004,0006,0008,000
10,00012,00014,00016,000
LIT Nestea Snapple Arizona PrivateLabel
Vo
lum
e S
ales
(00
0)
East Volume
East Volume YAG
Source: IRI InfoScan; East Division Grocery
• LIT Captures Highest Vol. Sales • Nestea & Snapple Showing Decline • Private Label Growing – Low Share
• Arizona High – JUG
• LIT up from Prior Year
• Arizona Holds Highest Vol. Sales
• Nestea Flat
• Snapple Losing Volume
Volume Sales Change from YAG - Grocery
66% - Jug
9
Snapple & Arizona Dominance (NY GMA)
A&P & Hannaford’s
10
LIT Outperforming Pure Leaf and Brisk
Volume Growth Performance (June, 2008 YTD)
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
TM Lipton Leaf LIT Brisk
1 Y
ear
% East
Central
West
B&C Non-Carb-Vol. Growth Performance (June 2008 YTD)
Volume Growth by Brand (TM Lipton)
Broken Down by Division
11
LIT Putting Up Great Numbers in the East
• L.I.T. Outperforming Pure Leaf and Brisk in all BU’s
• Showing Positive Volume Growth (Except Mid-South)
• North East L.I.T. Growth of 12.2%
East Volume Growth (TM Lipton)
-35.00% -30.00% -25.00% -20.00% -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00%
North East (Conlon)
Mid Atlantic (Brown)
Mid South (Lee)
South East (Gray)
Vol. %
Brisk
LIT
Pure Leaf
B&C Non-Carb-Vol. Growth Performance (June 2008 YTD)
12
Green Tea Citrus and White Raspberry Leading
• East C&G (20oz)#1: Reg. Green Tea Citrus#2: Diet Green Tea Citrus#3: Reg. Raspberry White
• East Grocery (1.5Lt.)#1: Diet Green Tea Citrus#2: Reg. Green Tea Citrus#3: Reg. Raspberry White
• East Grocery (16.9oz. 12ct.)#1: Diet Green Tea Citrus#2: Reg. Green Tea Citrus#3: Diet Raspberry White
East Division – Best Sellers
13
LIT Needs More Space in Order for More Variety
Hannaford’s – Carmel, NY
14
Distribution of New Flavors
Account Stores LIT Growth Dt. Green Citrus Dt. Green Berry Dt. Peach Dt. Rasp. Reg. Rasp.Total Grocery -1.7% 96.50% 63% 72.70% 88.40% 83.60%
A&P 79 -8.1% 78.5% 57.0% 12.7% 72.2% 70.9%Food Lion 1026 -12.6% 98.1% 52.2% 82.8% 94.1% 85.4%Pathmark 104 8.6% 99.0% 66.7% 78.1% 99.0% 99.0%
Publix 929 3.7% 99.6% 83.6% 83.7% 81.3% 84.4%ShopRite 166 21.7% 94.6% 75.9% 85.5% 91.6% 92.8%
Stop & Shop 317 42.6% 98.8% 55.8% 76.0% 94.7% 95.3%
YTD Fighter Pack Distribution (East Grocery)
Account Stores LIT Growth Dt. Green Citrus Dt. Green Berry Dt. Peach Dt. Rasp. Reg. Rasp.Total C&G -14.4% 62.70% 7.70% 16.80% 11.50% 42%7-Eleven 2237 17.5% 48.90% 0.10% 5.6% 5.9% 42.1%BP Amoco 2056 -18.6% 55.40% 8.00% 22.5% 8.8% 31.9%Chevron 1410 -18.5% 60.20% 9.40% 23.5% 7.0% 31.0%
Cumberland Farms 537 -35.6% 65.50% 3.20% 4.8% 26.8% 35.6%Exxon Mobile 2589 -18.2% 48.40% 5.60% 17.8% 14.3% 31.8%
Hess 793 24.0% 76.70% 24.30% 23.0% 23.7% 71.2%
YTD 20oz. Single Serve Distribution (East C&G)
Star2 – YTD Distribution Total East
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1.5 Liter is a Huge Opportunity for Grocery + C&G
Account Stores LIT Growth Dt. Green Citrus Dt. Green Berry Dt. Peach Dt. Rasp. Reg. Rasp.Total Grocery 140.6% 93.70% 45.50% 59.50% 58.40% 76%
A&P 79 45.80% 81.0% 31.6% 46.8% 50.6% 77.2%Food Lion 1026 135.60% 97.2% 10.8% 55.4% 39.8% 93.6%Pathmark 105 185.90% 99.0% 39.0% 70.5% 60.0% 99.0%
Publix 929 118.60% 93.8% 58.4% 81.3% 56.8% 71.5%Shop Rite 166 171.80% 94.6% 77.7% 84.3% 78.9% 93.4%
Stop & Shop 321 New 98.1% 80.1% 4.7% 84.4% 16.5%
YTD 1.5 Liter Distribution (East Grocery)
Account Stores LIT Growth Dt. Green Citrus Dt. Green Berry Dt. Peach Dt. Rasp. Reg. Rasp.Total C&G 97.3% 8.50% 1.10% 3% 2.10% 5.20%7-Eleven 2237 219.9% 5.7% 0.7% 1.4% 1.1% 3.6%BP Amoco 2056 8.9% 6.2% 1.1% 2.6% 0.8% 3.6%Chevron 1410 17.7% 6.0% 1.3% 2.1% 1.3% 3.5%
Cumberland Farms 537 - 0.2% 0.0% 0.0% 0.0% 0.0%Exxon Mobile 2589 189.3% 8.7% 1.9% 2.8% 2.8% 7.0%
Hess 793 1703.4% 38.6% 1.4% 12.6% 6.4% 20.2%
YTD 1.5 Liter Distribution (East C&G)
Not a Strong Presence
Star2 – YTD Distribution Total East
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Bottler Feedback
“LIT is a quality product with
tremendous equity. Sales have flattened
in 2008, largely because of the new
multi-pack competition (Arizona & Nestea) at $4.99, which is generally $1.00 below where we are every day.”
“What I believe the brand needs is
some new product news (new flavors)
and some packaging
innovation.”
“Our system needs to determine what the right cold vault single
serve RTD tea balance should be. We offer 6 varieties of LIT, up to 8 varieties of Pure Leaf, and up to 3
varieties of Brisk. While all are viable, strong brands, I guarantee
that as you go from market to market you will see a vast
difference in merchandising priorities across the trademark. We
systemically haven't figured out the right combination here yet.”
Dave Petta – GM Fitzgerald Bros. BottlingTom Strahle – VP Pepsi HV
Flavors & PackagingFlavors & Packaging
Right Mix of ProductsRight Mix of Products
Competitive Market/PricingCompetitive Market/Pricing
“I believe that the Jug will help out a
lot, IF priced correctly. “
JUGJUG
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Two Different Stores, Same GMA
Rite Aid – Brewster, NY & CVS – Mahopac, NY – Aug. 12, 2008
• 16 Facings of Pure Leaf & No LIT
• Rite Aid (NY GMA)
• 7 Facings of LIT
• Only 2 Flavors
• CVS (NY GMA)
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Recommendations
• Close Distribution Voids on LIT
• Determine Right Cold Vault Mix
• Merchandising Standards
• Communicate Standards to National Account Teams and Bottlers
• Activate JUG
• Incremental Feature Ad and Merchandising through CDA Negotiation
• Competitively Priced
19
QUESTIONS???
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PCNA Plans for 2009
National Launch:Q1 2009
Projected Sales Impact:
20MM cases 70% Incremental
DRIVE SHAREREINVIGORATE GREEN
Projected Sales Impact:
10MM cases 40% Incremental
Launch Timing:P4 2009
Projected Sales Impact:
5MM cases 40% Incremental
National Launch:P6 – P10 2009
REIGNITE BLACK
AOP ppt – Vinny Croce
21
2008 AOP Plan – Widen White Tea Appeal
• New Diet Flavor Extension
• Strengthen White Lead
• Focus on High Velocity Diets
AOP Deck 2008
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Current YTD Volume - Innovations
Volume (% of Brand
Mix)
Diet Green Berry
White Raspberry
Diet White Raspberry
Diet White Peach
Papaya
Atlantic BU 5.3% 7.6% 6.2% 3.3%
Central BU 6.8% 9.0% 7.6% 3.3%
Great West BU
7.3% 5.4% 4.8% 3.1%
Southeast BU 3.3% 5.2% 4.6% 3.0%
West BU 6.6% 6.4% 5.0% 2.1%
Current YTD ending July 27th – Tea Scorecard (PBG Field)
Diet White Peach Holds the Lowest Percent of Total Brand Mix
23
24
LIT Package Vol. Share
0 5 10 15
20oz
1.5 Lt.
16.9oz
128oz
Pck
g. S
ize
Share (Vol.)
128oz
16.9oz
1.5 Lt.
20oz
Packaging and Flavors – East Grocery
LIT Volume MixEast - Grocery
13.6
2.9 1.8
0
5
10
15
Green White Black
Tea
Vo
l. S
har
e
Green
White
Black
25
Closing the Gaps
• Volume Opportunity
• East Grocery
• Diet Peach Papaya at 90% Distribution
Current Vol. Sales VS. OpportunityDiet Peach Papaya - 16.9oz - 12ct
60
334,567
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Current Vol. Sales Volume at 90% Dist.
Vo
l. S
ales
Latest 12 Weeks – Ending August 3rd – IRI