USC Marshall Class Project
Vegemite StrategicMarketing Plan2016- 2018
Kit KwanAlexander TollPravish KappakadavathJames KabueNero Sovis
2
Executive Summary
1. Enter Spreads Market
• Add flavor options to spread
• Advertise via traditional marketing channels where competitors advertise
• Communicate health benefits
2. Create partnershi
ps and Leverage Distributio
n
• Get a spokesperson to represent Vegimite and communicate health benefits
• Create parnerships with retailers to gain shelf space and banners
• Coupons to incentivise trial
3. Enter Snacks Market
• Create unique products such as crackers
• Get social media influencers to promote vegimite products
• Appeal to kids with a focus on health and taste
Part 1 - Situation Assessment
4
Steady growth from 2012 to 2014, but projection shows plateau in growth for 2015
Current Financial Measures Summary
Net Revenue($MM)
Volume in Tones (000’s kg)
Operating Income($MM)
Gross Profit ($MM)
2012 2013 2014 2015 Projected9092949698
100102104106108110
97
101.8
105.9107.7
2012 2013 2014 2015 Projected5400
5600
5800
6000
6200
6400
6600
5875
62506190
6500
2012 2013 2014 2015 Projected05
10152025303540
24.527.7
34.1 33.9
2012 2013 2014 2015 Projected02468
1012141618
6.5
9.7
16.6 16.9
5
Vegemite – Australia
Weaknesses
Strengths Opportunities
• Strong national connection, most Australians grew up eating vegemite
• Vegemite with Kraft together holds 31% of the spreads category market share as of 2014 considering that Yeast Based spreads only represents 13% of the spreads category in Australia.
• Long list of recipes suggesting not only history, but multiple usages of product
• 45% of people born in Australia eats Vegemite
• Usage of spreads growing in non-bread related dishes, Vegemite can use its recipe database to tackle this trend
• Evolution of Australia’s café culture• Competitors failed to steal away market
shares to date even after claiming a truer Australian image compared to Vegemite
Threats
• Lack of innovation, only 3 products• Confusing positioning: breakfast vs. multi-
usage• Seen as a complimentary product to bread• 85% of the Vegemite consumption is focussed
on one target population, people born in Australia
• High scrutiny by Australians ties the brand down from taking drastic changes:
• Ex. Anti-halal campaign• Yeast Based spreads had experienced little
growth• Capilano and Nutella are viable threats
with growing market shares and consumer interest.
• Volume consumption has declined for the category overall as well as for Vegemite
• Traditional Vegemite is unappealing to children
6
Vegemite – US
• U.S. is number 1 ($4B) in market size for spreads where as Australia ranks at 12
• Currently yeast based spreads represents 0% of the U.S. spreads market
• Southern states have the highest market size historical and forecasted
• Trending towards niche product• Market size for snacks in U.S. is $35B, making
it a viable source of expansion
• High in sodium content counters the image of the Vegemite as a health y product fill with vitamins
• Strong bitter taste profile does not appeal to Americans
• Lack of brand presence for Vegemite and Kraft
• Established network/relationship with distribution channels
• Strong brand awareness for Kraft products• Established manufacturing facilities• Healthy product with 0 calories
• U.S. consumers prefer sweet spreads• Top 3 brands including Jif takes up 39% of the
spreads industry’s market share• Slow growth in the spreads industry with the
exception of chocolate
Weaknesses
Strengths Opportunities
Threats
7
Australia Competition
• Kraft Foods Ltd remains as largest player in spreads with 32% value share• Chocolate spreads continue to deliver strong value growth at 5% in2014
Yeast spreads is not the fastest growing spread category. Focus on the health benefits, the cultural heritage. Introduce new vegemite based ready to eat snacks in Australian market. Introduce fun packaging, each tube would only produce servings in specific styles eg. Streaker tube, Slapper tube.
Competitive Assessment
Competitor
% SOM Key Brands Competitor’s key P.O.D. vs Kraft
Capilano Honey Ltd
11.53 Capilano , Wescobee
Honey is one of the fastest growing spread, Capilano’s main product is a honey spread
Ferrero Australia Pty Ltd
10.21 Nutella Makes the fastest growing spread category and is the market leader in that category
Woolworths Ltd (Australia)
7.17 Woolworths , Macro Organic
Have their own wide network of retail outlets, fast growing private label brand.
8
US Competition• JM Smucker Co is expected to maintain its lead at 35%• Chocolate spreads expected to record strongest growth at
20% with entry to The Hershey Co
Kraft has complete control of the Yeast based spreads segment. It can highlight health benefits & use innovative packaging to capture customer interest in this
new segment
Competitive Assessment
Competitor
% SOM Key Brands Competitor’s key P.O.D. vs Kraft
JM Smucker Co, The
34.85 Jif, Smucker's, Goober, Knott's Berry Farm
• Stay ahead of competition by introducing new products & flavors
• Smucker’s Simply Fruit sub-brand strengthens the fresh / fruit / healthy / quality association with the brand
Hormel Foods LLC
9.36 Skippy • Hormel’s Our Way - originate, don't imitate
• Implement practices that protect natural resources and the environment
Ferrero USA Inc
6.29 Nutella, Hershey's, Reese's
• Chocolate spreads are the fastest growing spread category
9
Yeast spreads have cultural heritage and historic association with the Australian customer
Kraft has to re-connect with cultural and historical heritage of the true product
Handle the backlash on Halal and Kosher certification by launching separate products for these, retain the original vegemite as is
Build on the health benefits of yeast spreads
Introduce engaging packaging & new ready to eat products
Advertise environmentally responsible production process
Highlight the indigenous nature of ingredients
“Category” performance
Issues and observationsIssues and observations ImplicationsImplications
Customer, Consumer behavior and attitudes
“Category” Cost /Margin improvement
Marketing Tactics and Strategy
Customers have cultural and historic association
Losing customers due to drop in breakfast consumption, entry of other spreads Engage customers with ready to eat vegemite products & interesting packaging
Reduction of overheads and A&C costs will improve the margins
Competitive dynamics
Market leader in spreads category
Competitors are players in the chocolate and honey spreads, which are the fastest growing sub-segments
Australia Situation Assessment Summary
10
New sub-category within US spreads market. Spreads category in general expected to grow 11%
Kraft has a clean slate to start with in the yeast based spreads sub-category
Kraft has to invest significantly to create customer awareness about this sub-category
If it can establish this sub-category it can sustain a market leader position for the short term before other major players get into this spreads sub-segment.
Highlight environmentally responsible production process
Follow clear labelling process, specially important in US market
“Category” performance
Issues and observationsIssues and observations ImplicationsImplications
Customer, Consumer behavior and attitudes
“Category” Cost /Margin improvement
Marketing Tactics and Strategy
Customer love Chocolate spreads, this sub category expected to grow at 20%
Customers are new to yeast based spreads
Engage customers, create awareness by direct marketing, influencer endorsement, retailer partnerships
Initial period high cost due to the launch strategy, after that target economies of scale, reduce A&C to target margin improvement
Competitive dynamics None of the major
competitors play in the yeast spreads subcategory
US Situation Assessment Summary
11
Situation Assessment Summary
Declining spreads usage in Australia and growing competitors suggest that Vegemite should expand to new customers
Strategic Priorities
• Maintain competitiveness in Australia through awareness of non-breakfast usage, market price of spreads continue to increase. Vegemite needs to cut operational cost to maintain spreads consumption.
• Growth opportunity in U.S. as the first yeast based spreads, but needs focus heavily on consumer awareness.
• Innovations in product flavor or category is needed to grow into U.S. and other new markets, be careful of the affects on Vegemite’s origin
• Create different product mix through flavors sell specialty flavors in U.S. , such as honey or spicy at a higher price point while maintaining a low price point for traditional products
Part 2 - Marketing Plan 2016-18
13
US Marketing Plan
Take market share from other spread competitors via traditional marketing channels (tv, radio)
Add flavor options to spread (honey, chocolate, spicy)…
Market to families, moms, focus on health benefits…
Enter the US market and hit profit of 10% net revenue by year 3 and $35 million in yeast based spreads by 2018
Enter Spreads market.
Enter snack market.
Create partnerships
and leverage
distribution network.
1 2 3
2016-18 Marketing Plan
Objective
Strategies(linked to Strategic Priorities in situation summary)
Key Initiatives
Create unique products- crackers with different flavors
Focus groups to get feedback and experiment
Get social media influencers to promote the products.
Appeal to kids and teens, focus on taste.
Get a spokesperson to represent the brand in a healthy way.
Create partnerships with retailers for shelf space and/or promotional materials like signage (TV shows as well).
Coupons/ trials for people to try the product offerings
14
US Strategy
2016 Q1
Traditional marketing to heads of households/ families (awareness)
- Focus on health benefits in the spread market advertising on radio and tv
Key InitiativesKey InitiativesResources Required
(A&C/Capital/Sales)Resources Required
(A&C/Capital/Sales)Timing
(2016 Qtr, ’17,’18)
Timing (2016 Qtr, ’17,’18)
2016 Q2
2017 Q1
2017 Q2
Social Media influencers and advertising (awareness)
- Target kids in the snack market through social media and online influencers/ bloggers. Focus groups to trial most popular productsPartnerships and promotions (distribution)
- Work with retailers to get signage, coupons, free samples, and shelf space. Also get a spokesperson for brand, health centered but hip.New product/ flavor innovation launch (distribution)
- mix the spread with chocolate, honey, or a hot sauce. Also create bags of crisps that are based on the vegemite flavor with slight variations.
Consumer promotions - $1.1M 2017 - 2018
Advertising - $4M 2016 - 2018
Trade spending - $7M 2016 - 2018
Advertising- $4M 2016 - 2018
15
2016
Q1 Q2 Q3 Q4
New Innovation
New spread types and flavors – testing via focus groups
A&C, Packaging Program
Vegemite branding on spread and feature flavors/ ingredients
Establish spokesperson/ celebrity who can relate to families and kids and being healthy
Trade Promotion Window
Partnerships, free trials, and promotions
Discounts & promotions
Discounts & promotions
US MARKETING PLAN FLOW CHART - 2016
Category expansion testing: innovation into snacks
Category expansion testing: innovation into snacks
16
20172018
1H 2H
New Innovation
Focus groups of kids for snack category
Launch new snack products
A&C, Packaging Program
Coupon program Packaging for “on the go” targeted towards kids and teens, focusing on taste and sub branding Vegemite
Coupon program
Continue spreads and unique flavors with Vegemite branding
Continue snacks for kids with Vegemite and sub brands
Trade Promotion Window
Hire social media influencers and bloggers to report on new products and promote them
In store promotions, discounts
Social media influencers and spokesperson
In store promotions, discounts
Focus spread on health benefits and snacks on taste. Continue leveraging spokesperson and social media influencers. Stop the least effective campaigns
US MARKETING PLAN FLOW CHART – 2017-2018
Part 3 - P&L Optimization Plan 2016-18
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VEGEMITE AUSTRALIA PROXY P&L 2012-2018 LE
Highlights• Forecasted top line
growth of 3% per year. Marginal price increase taken in 2017; +$1M
• Trade spending in absolute $ held flat 2015-2018 with focus on increasing trade ROI
• A&C spend increasing to support TV, print & social media campaigns. Coupon program retained with increasing support each year.
• Target 2.5% reduction in direct COGS each year & 1% reduction in SG&A.
• Net revenue/kg flat due to reallocation of trade $ to A&C.
• Gross/Profit /Kg is increasing because of price & reduction in COGS & overheads
2012 2013 2014 2015 LE 2016 LE 2017 LE 2018 LE
Tonnes (1 tonne = 1,000 kg) 5,875 6,250 6,190 6,500 6,686 6,949 7,166Gross Revenue $000's $113.30 $118.80 $122.50 $125.00 $128.75 $133.61 $137.62
Trade Spending $12.00 $12.00 $11.50 $11.00 $11.00 $11.00 $11.00 Advertising $3.80 $4.40 $4.40 $5.30 $5.92 $6.12 $6.29 Consumer Promotions $0.50 $0.60 $0.70 $1.00 $1.05 $1.36 $1.59 Total A,C,&T $16.30 $17.00 $16.60 $17.30 $17.97 $18.48 $18.88
Net Revenue (GR less A,C,T) $97.00 $101.80 $105.90 $107.70 $110.78 $115.13 $118.74
Direct COGS $52.50 $53.60 $51.30 $52.80 $53.01 $55.06 $56.70 Transportation $15.00 $15.50 $15.50 $16.00 $16.48 $17.10 $17.62 Other COGS $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 Total COGS $72.50 $74.10 $71.80 $73.80 $74.49 $77.16 $79.32
Gross Profit (NR less COGS) $24.50 $27.70 $34.10 $33.90 $36.29 $37.97 $39.42
SG&A $18.00 $18.00 $17.50 $17.00 $17.56 $18.25 $18.82
Operating Income $6.50 $9.70 $16.60 $16.90 $18.73 $19.73 $20.61
DPC % Gross 46.30% 45.10% 41.90% 42.20% 41.17% 41.21% 41.20%Trade Spend % Gross 10.59% 10.10% 9.39% 8.80% 8.54% 8.23% 7.99%A&C % Gross 3.80% 4.20% 4.20% 5.00% 5.41% 5.60% 5.73%Gross Margin % (GP/NR) 25% 27% 32% 31% 33% 33% 33%SG&A % of NR 19% 18% 17% 16% 16% 16% 16%Operating Income % of NR 7% 10% 16% 16% 17% 17% 17%
Net Revenue / Kg $16.51 $16.29 $17.11 $16.57 $16.57 $16.57 $16.57 Gross Profit/Kg $4.17 $4.43 $5.51 $5.22 $5.43 $5.46 $5.50
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P&L Optimization Roadmap
Operating Income
1. Challenge supply chain to deliver 2.5% reduction in prior year direct COGS each year
2. Optimize S,G&A by reducing overtime, travel and reducing layers3. Take pricing in 20174. Optimize portfolio mix through trade enhancement and increased A&C
spend
($344 MM)
+$4
+$0.5
+$1
+$0.5
$350
2015-17 P&L Optimization Roadmap
2015 ACCOGS•Supplier diversification•Hybrid ingredients•Plastic vs glass jars
Pricing• Take price
SG&A•Cut OT•Cut travel•Reduce layers
Incremental•Portfolio/Mix optimization•Improved trade ROI
Goal
Highlights• 2016 limited national launch in the U.S
targeting 45% distribution in grocery for first three years. Also aim to be in 45% of WMT's 4177 stores. Launch 1 sku size- 220 grams priced at $8.8 USD. Target 100% CAGR for first 3 years.
• Assume $1M in listing fees in 2016 in addition to 8.8% trade rate. Maintain 8.8% trade rate 2017 & 2018
• Significant advertising support 2016-2018 with TV, Radio and Social Media campaign. Reduce spending to match Vegemite Australia thresholds in 2018
• No consumer promotion in 2016. Promote significantly in 2017 to compensate for reduced advertising that year. Promote 2018 at Vegemite hurdle rates
• No COGS improvements in first 3 years. Costs at Vegemite hurdle rates
• Assume 16% logistics costs due to importation of product from Australia
• S,G&A at Vegemite hurdle rates • Operating income lower than thresholds and
company average in 2018 primarily due to logistics costs
20
VEGEMITE US PROXY P&L 2016-2018 2016 LE 2017 LE 2018 LE
Tonnes (1 tonne = 1,000 kg) 220 660 880Gross Revenue $000's $8.80 $26.40 $35.20
Trade Spending $1.77 $2.32 $3.10 Advertising $1.50 $1.00 $1.41 Consumer Promotions $0.00 $0.70 $0.35 Total A,C,&T $3.27 $4.02 $4.86
Net Revenue (GR less A,C,T) $5.53 $22.38 $30.34
Direct COGS $3.71 $11.14 $14.85 Transportation $1.41 $4.22 $5.63 Other COGS $0.33 $0.98 $1.30 Total COGS $5.45 $16.34 $21.79
Gross Profit (NR less COGS) $0.08 $6.04 $8.55
SG&A $1.41 $4.22 $5.63
Operating Income ($1.33) $1.81 $2.92
DPC % Gross 42.20% 42.20% 42.20%Trade Spend % Gross 20.16% 8.80% 8.80%A&C % Gross 17.05% 6.44% 5.00%Gross Margin % (GP/NR) 1% 27% 28%SG&A % of NR 25% 19% 19%Operating Income % of NR -24% 8% 10%
Net Revenue / Kg $25.12 $33.90 $34.48 Gross Profit/Kg $0.36 $9.14 $9.72
Part 4 - Summary of Recommendations / Contingency Plan
22
Summary of Recommendations
1. Enter Spreads Market
2. Create Partnerships and
Leverage Distribution Networks
3. Enter Snacks Market
ENTER US
23
Contingency Plan
Met Strategic Goals in 3
years?
Yes Continue to Invest
No
Exit Category
Change Formulation
Franchise to a 3rd party
APPENDIX
Note: Financial data is directional and not necessarily indicative of actuals. Use intended for USC MKTG 560 case study only
25
VEGEMITE BRAND
TOTAL COMPANY
2020 COMPANY
KEY MEASURES 2015 LE AVERAGE TARGET
Direct Product Cost % Gross 42.2% 44% 40%
Trade Spend % Gross 8.8% 10.2% 8%
A&C % Gross 5.0% 4.9% NA
Gross Margin % (GP/NR) 31% 28% NA
SG&A % of NR 16% 15% NA
Operating Income % of NR 16% 15% 19%
26
OTHER TRADITIONAL A&C ASSUMPTIONS
Note: Financial data is directional and not necessarily indicative of actuals. Use intended for USC MKTG 560 case study only
12 Million Households (AU/NZ) 34 Million Population
Coupon Costs FSI/Print Digital
Average Circulation / Flight 1.5 Million 3 Milliion
Average Redemption Rate 3% 12%
Handling Cost/Coupon 10 cents per coupon
6 cents per coupon
Fixed Insertion Costs per 000 circ
$ 34 $ 9
AU SPREADS CATEGORY RETAIL SHARES(NOTE: SYNDICATED DATA BASED ON RETAIL SCAN)
27
(Figures in $000’s and 000’s Tonnes)
Category/Sub/Brand 2012 2013 2014 2015 Est.Current 3-yr
CAGR
Projected 2016-2018
CAGR
Total Food Spreads $$ 500.0 530.0 541.0 564.0 % Chg vs. Prior 6.0% 2.1% 4.3% 4.1% 3.3%Total Food Spreads Tonnage 54.7 55.5 55.9 58.9 % Chg vs. Prior 1.5% 0.7% 5.4% 2.5% 2.1% Yeast Based Spreads $$ 123.9 133.0 129.2 133.5 % Chg vs. Prior 7.3% -2.9% 3.3% 2.6% 2.2%Yeast Based Spreads Tonnage 5.8 6.2 5.9 6.1 % Chg vs. Prior 6.8% -4.8% 3.3% 1.7% Flat Vegemite Total Brand $$ 103.0 108.0 110.0 114.0 % Chg vs. Prior 5.3% 1.9% 3.7% 3.7% 3.0%Vegemite Total Brand Tonnage 4.7 5.0 5.0 5.2 % Chg vs. Prior 6.4% Flat 4.0% 3.5% 1.0%
VEGEMITE SHARE OF YEAST BASED SPREDS 83.1 81.2 85.1 85.4
Average 83.9
2018 Goal 87.0
VEGEMITE SALES BY REGION
AU/NZ (85%)UK/IRELAND (10%)OTHER EUROPE (3%)USA (< 2%)ASIA (< 2%)
Source: ROY Morgan Research
THERE ARE 8.8 MILLION VEGEMITE USERS (1X OR MORE PER WK.)
85% LIVE IN AU/NZ 98% OF TOTAL WORLD USERS ARE OF
AUSTRALIAN DESCENT
28
2012 2018 Proj0
20
40
60
80
100
120
e-tailer/OnlineDrug/MassClubC-StoreSupermarkets/Hypermarkets
SUPERMARKETS/HYPERMARKETS WILL CONTINUE TO COMPRISE THE MAJORITY OF SALES IN AU/NZ
Source: Australia 2013 Distribution Study – Canadean Research
% Spreads Sales by Channel
29
13
12
1817
35
AU/NZ Spreads Category Splits
Yeast Based ChocolateHoneyNut&Seed SpreadsJams/Preserves
Source: Euromonitor syndicate data
YEAST BASED SPREADS IN AU/NZ ARE 13% OF TOTAL SPREADS CATEGORY RETAIL SALES
30
31
Market Sizes | Historic/Forecast | Retail Value RSP | US$ mn | Constant 2014 PricesCategories Rank Geographies 2014 2015 2016 2017 2018 2019Spreads 1USA 4,046.00 4,138.80 4,229.40 4,303.50 4,394.60 4,470.10Spreads 2Germany 1,986.30 2,007.30 2,024.00 2,036.40 2,045.10 2,050.90Spreads 3France 1,919.70 1,965.70 1,998.40 2,022.50 2,038.20 2,049.90Spreads 4Italy 1,404.40 1,490.20 1,580.30 1,666.90 1,751.00 1,833.90Spreads 5Brazil 1,123.70 1,173.40 1,221.80 1,265.90 1,312.30 1,356.40Spreads 6Iran 736.50 831.10 939.30 1,052.00 1,172.00 1,302.00Spreads 7China 1,024.30 1,058.50 1,087.80 1,117.60 1,146.70 1,173.50Spreads 8United Kingdom 977.60 996.40 1,008.90 1,024.40 1,032.00 1,034.10Spreads 9Russia 641.70 670.20 694.60 718.30 743.20 763.70Spreads 10Turkey 614.00 644.30 671.50 695.80 716.20 733.70Spreads 11Japan 647.00 641.60 639.70 639.00 638.40 639.20Spreads 12Australia 566.40 579.60 591.90 604.50 617.20 630.20Spreads 13Mexico 523.40 538.90 555.10 573.20 592.50 612.60Spreads 14Canada 536.60 541.40 547.10 553.40 559.60 565.60Spreads 15Spain 478.40 495.50 508.70 519.50 526.60 533.10Spreads 16Saudi Arabia 336.20 357.60 382.70 411.20 442.10 476.50Spreads 17Sweden 363.40 363.50 363.40 364.70 366.90 369.80Spreads 18Uzbekistan 283.10 297.70 309.80 320.90 331.40 341.80Spreads 19Belgium 304.00 310.70 317.00 322.50 327.50 332.90Spreads 20Norway 257.00 267.70 279.90 293.30 308.80 316.00
RANKING OF SPREADS CONSUMPTION BY COUNTRIES
Research Sources:Packaged Food: Euromonitor from trade sources/national statisticsDate Exported (GMT): 5/4/2015 6:27:57 AM© Euromonitor International
32
Market Sizes | Historic/Forecast | Retail Value RSP | US$ mn | Current Prices | Fixed 2014 Exchange RatesCategories Geographies 2012 2013 2014 2015 2016 2017 2018 2019Spreads Australia 528.10 543.70 566.40 595.30 623.70 653.50 684.60 717.30Spreads USA 3,914.80 3,997.90 4,046.00 4,225.90 4,413.10 4,589.30 4,789.50 4,978.90Spreads West 994.00 1,003.90 1,016.80 1,063.20 1,113.00 1,159.20 1,211.30 1,260.70Spreads Midwest 853.30 867.50 859.40 889.10 922.80 956.40 994.80 1,032.10Spreads Northeast 727.20 737.40 753.40 787.30 821.30 853.60 888.90 922.60Spreads South 1,340.30 1,389.00 1,416.30 1,486.20 1,556.10 1,620.00 1,694.50 1,763.50
Research Sources:Packaged Food: Euromonitor from trade sources/national statistics
Date Exported (GMT): 5/4/2015 6:48:31 AM© Euromonitor International
MARKET SIZE HISTORICAL AND FORECAST COMPARISON FOR AUSTRALIA AND U.S.
33
RANKING OF SPREADS CONSUMPTION BY COUNTRIES
Western Europe is another great market and taken as one combined market it is even bigger than US, but entering Europe requires an entry plan specific to each country which would involve more capital outlays and intensive marketing. So compared to that US is the best new market to enter at this point in time
34
RANKING OF SPREADS BY BRANDS FOR AUSTRALIA AND U.S.
Brand Shares (Umbrella – Historical Owner) | Historic | Retail Value RSP | % breakdownCategories Geographies Brand Company name (GBO) 2009 2010 2011 2012 2013 2014Spreads Australia Vegemite Mondelez International Inc - - - 20.00 18.60 17.50Spreads Australia Kraft Mondelez International Inc - - - 13.10 13.90 14.00Spreads Australia Capilano Capilano Honey Ltd 7.70 8.00 8.20 8.60 9.40 10.50Spreads Australia Nutella Ferrero Group 8.80 9.20 9.30 9.30 10.20 10.20Spreads Australia IXL Coca-Cola Amatil Ltd 5.50 5.50 5.30 5.20 5.10 4.80Spreads Australia Cottee's Heinz Co, HJ 5.30 5.00 4.40 3.70 3.30 3.00Spreads Australia Dick Smith's Dick Smith Foods Pty Ltd 1.50 1.30 1.30 1.70 2.50 2.80Spreads Australia Beechworth Beechworth Honey Pty Ltd 1.90 2.80 2.80 2.30 2.10 2.10Spreads Australia St Dalfour St Dalfour Frères 3.00 3.40 3.60 2.90 2.30 2.00Spreads Australia Sanitarium Australasian Conference Association Ltd 2.10 2.20 1.70 1.70 1.70 1.90Spreads Australia Bonne Maman Andros SAS - 0.10 0.30 0.80 1.10 1.40Spreads Australia Anathoth Barker Fruit Processors Ltd - 0.60 1.10 1.10 1.10 1.10Spreads Australia Promite Mars Inc 1.40 1.40 1.30 1.20 1.10 1.00
Categories Geographies Brand Company name (GBO) 2009 2010 2011 2012 2013 2014Spreads USA Jif JM Smucker Co, The 19.50 19.40 19.60 21.20 20.40 19.90Spreads USA Smucker's JM Smucker Co, The 12.00 11.70 11.30 10.40 10.00 9.80Spreads USA Skippy Hormel Foods Corp - - - - 9.30 9.40Spreads USA Nutella Ferrero Group 1.80 2.90 4.50 5.60 6.10 6.30Spreads USA Peter Pan ConAgra Foods Inc 4.60 4.30 4.50 5.50 5.30 4.80
Research Sources:Packaged Food: Euromonitor from trade sources/national statistics
Date Exported (GMT): 5/4/2015 6:54:39 AM© Euromonitor International
35
YEAST BASED SPREADS IN U.S. IS 0%OF TOTAL SPREADS CATEGORY RETAIL SALES
Src: Euromonitor International: Spreads in the U.S.
36
SPREAD CONSUMPTIONS BY BIRTH COUNTRY
Src: http://www.dailymail.co.uk/news/article-2866513/Spreading-love-83-cent-vegemite-eaters-born-Australia-30-cent-people-born-UK-eat-it.html
37
SNACK MARKET OPPORTUNITY
Research Sources:Packaged Food: Euromonitor from trade sources/national statistics
Date Exported (GMT): 5/4/2015 6:54:39 AM© Euromonitor International
38
AUSTRALIAN POPULATION IN USA
Source : http://www.asiamattersforamerica.org/australia/data/population
39
KRAFT’S COMPETITIVE POSITION
Source: Euromonitor International from company reports, company research, trade press, trade sources, trade interviews
40
Vegemite Value Chain
Support
Primary
CompetitiveAdvantage
Keep packaging and flavor consistent in Australia, leverage historical usage
Take new spreads to US market, focus on families and product health benefits
Innovate new flavors into spread
Innovate new products for snack and chip market competition
Focus groups in key markets to test new products
Create partnerships in the US to get shelf space in convenience stores and markets
Increase awareness through social media and influencers
Heavy promo and discounts to encourage people to try products for the first time
41
Snack or Chip product-Vegemite taste blended with another flavor-Likely a dry/ crunchy texture-Variety of flavors and forms-Tested in focus groups, constant feedback and product tweaking
Upper end pricing- Will be premium
products- Focusing on health
benefits as well as taste- Differentiated through
Vegemite branding or sub-branding
Convenience Store/ Market- Grocery stores,
convenience stores, gas stations
- Sold online as well- Eventually move to bigger
volume dealers and clubs- Big social media and
influencer presence
Free trials and Discounts-Partnerships to get prime shelf space-Limited time free samples-Discounts via coupons-Negotiate for product display stands and signage-Promo events
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Phase I. – Spreads Target Customer 1: Mother, 1-5 children, house wife, husband works, age 25-45 with no real budget, health minded.Target Customer 2: Head of household, feeds family of 2-6, health conscious, limited budget, pays attention to news, very busy, full time job.Target Customer 3: Australian citizens, living in the US currently, from Australia originally, looking for comfort foods.
Phase II. – Snacks/ ChipsTarget Customer 1: 8-16 year old boys and girls, go to school, regular snacker both during and after school, get some choice of food but still supervised from parent or guardian.Target Customer 2: 15-25 year old boys and girls, high school or college student, have full choice in food, focused on taste first, limited budget, prefers convenient food that you can eat on the run.Target Customer 3: 20-40 year old men and women, working a job or in school, limited budget, health minded, on the run or very busy.
Target Markets
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US SPREADS PERCEPUTAL MAP