Skippy ® Brand Presentation. Confidential and Proprietary, © 2013 Hormel Foods, LLC.

Skippy® Brand Presentation


Contents

• Defining Customer Needs

• Product Introduction

• SKIPPY PB Launch Details

• Marketing Support


Families looking for better snacking options

Families need high protein snacks for when they’re “Hangry.”Peanut butter is a natural and substantial protein source.Snack bites with real peanut butter win with moms and kids.91% of people want snacks with taste they enjoy.Over 86% of U.S. eats Snacks.

“Peanut butter balls would be nice to have the smooth

peanut butter feeling together with a crunch.”

Protein is important to me because it keeps them

fuller longer – it stays with them. And then they don’t

need to continue to snack.”

My son comes home from school and before he even says ‘Hello,’ he says, ‘I’m hungry.’ A peanut butter

sandwich is always a go-to. I feel it’s a better choice

because it’s filling, it lasts with him, it gives him energy.”

We look for higher protein grams. My daughter will

eat peanut butter on almost anything. It’s about

high protein.


1-2

3

4

10

15

20+

QUICK BREAK

BETTER FOR YOU

TREAT

7

Grams of Protein

Relationship of protein to consumer snacking options

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&docid=zNyhTbPPzdMSjM&tbnid=rci9_t7enytQwM:&ved=0CAUQjRw&url=http://www.neogaf.com/forum/showthread.php?p=52699776&ei=gxOVUbP6K5LWiAKqnoD4DQ&bvm=bv.46471029,d.cGE&psig=AFQjCNGMO6xWPkbDU1rMzJFamsvwCkmgCA&ust=1368810750287444


WHO × Mom’s× 14-16 Year Olds

WHEN × After School at home

PROBLEM × Hangry

CURRENTLY EATING × Lots of Junk

MUST HAVES × Immediate× Fun× Real× Good× Satisfying× Energizing

PERSONALITY

POSITIONING ESSENCE

Point of Difference


Introducing SKIPPY® PB Bites

• 8/6oz multi-serve canister• $24.00 per case– $3.00/unit

• Two varieties–Double Peanut Butter–Pretzel

• Target Retail:– $3.99

• 5g of Protein• Soft shell


Retail Price is in Line with Competitive Snacks

Unit Size Base Unit Price Price per ounce

Candy 12 ounce $3.65 $0.30 per ounce

Trail Mix 25 ounce $9.96 $0.38 per ounce

SKIPPY® PB BITES 6 ounce $3.99 $0.665 per ounce

Nut Mix 9 ounce $6.07 $0.67 per ounce

Beef Jerky 6 ounce $9.00 $1.45 per ounce


Shelving

• Ideal placement for Skippy® PB Bites is in alignment with snacking items that currently exist within the set– Ideally placed adjacent to Skippy® items in distribution


Marketing Support Plan

• Leveraging performance of marketing in test markets to optimize vehicle effectiveness for national launch

PrintDigitalTV


APPENDIX


Skippy PB Bites – Key nutritional comparisons

PB Bites (Double Peanut Butter)

PB Bites (Pretzel)

Skippy Regular Peanut Butter

Reeses Peanut Butter Cups

Snickers Bar

Serving Size

30g 30g 32g 45g 53g

Calories 160 160 190 232 250

Sodium 120mg 300mg 150mg 101mg 120mg

Sugar 8g 6g 3g 21g 27g

Protein 5 5g 7g 4.6g 4g

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Introducing SKIPPY® PB Bites Shipper

• 32/6oz Combo display– 16/6oz Double PB– 16/6oz Pretzel

• $96.00 per case cost– $3.00/unit

• Target Retail:– $3.99

•Dimensions: – 45” (H) x 12.437” (L) x 11.125” (W)

• 5g of Protein• Soft shell•Normal lead time apply

Skippy® Brand Background


Industry Challenges

• Peanut crop volatility producing boom and bust cycles

• Peanut allergies and public perception

• Complementary or competitive position of alternate nut butters

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Our approach to industry challenges

• Leverage the National Peanut Board similar to how we partner with Pork Board

• Tighter relationships with shellers and growers

• Evaluating alternate nut butters – several points to consider

– Require co-pack

– Market is maturing

– While growth has been significant, still very low penetration and sales rates outside of Nutella

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Category Challenges

• Food safety related salmonella and recalls

• Price deflation following a normalized peanut crop. Pressure to lower prices but continue category growth.

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Our approach to category challenges

• Maintain the high food safety standards we have inherited and augment with our best practices

– Proactive communication in cases of unrelated recalls

• We will follow JM Smucker as #2 in category with respect to price moves

– Targeted price spreads to Jif in everyday basis

– Emphasis on promoted frequency vs. depth

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Brand Challenges

• Lack of investment in brand taking its toll – recent share and HHP loses

• Nationally known brand that is only regionally strong

• Lack of meaningful innovation while #1 competitor is driving new items

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Our approach to brand issues

• Still a strong affinity for the brand – need to reactivate it

• Our valuation of brand included higher investment in advertising and promotion

• CPS well positioned with underdeveloped customers and markets

• Innovation will be a keystone for the brand. That process has already started.

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Go-To-Market Strategy

1. Dominate markets of strength- NE & West Coast

2. Win Jump Balls in push markets

3. Defend position in markets without leadership- Central

4. Build the foundation in underdeveloped areas by making opportunistic investments


SKIPPY® Market Development by Regional BDI

(22)Source: Based on AC Nielsen Regional 52 weeks ending 1/19/13 (Food). Circled areas are P1.5 markets (no clear brand leader).

Private Label

PACIFICSkippy®: 201

MOUNTAINPriv Label: 196Skippy®: 140

WEST NORTH CENTRALSkippy®: 202Peter Pan: 169

EAST NORTH CENTRALJif: 193Priv Label: 150

WEST SOUTH CENTRALPeter Pan: 274

EAST SOUTH CENTRALPeter Pan: 264Priv Label: 217Jif: 204

SOUTH ATLANTICPeter Pan: 229Jif: 128

MID-ATLANTICSkippy®: 157Priv Label: 116

NEW ENGLANDSkippy®: 246Priv Label: 142

DISTRIBUTION


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Distribution Priorities – Grocery & Mass

• Focus on building a strong base with distribution of core 15/16.3 oz items

• Move to TIER TWO after core 15/16.3 oz products are in distribution

• Opportunities beyond TIER THREE will be evaluated by channel

UPC VARIETY SIZE ACV

TIER ONE

4800100643 Base Creamy 16.3 oz 85

4800100687 Natural Creamy 15 oz 76

4800100641 Base Super Chunk 16.3 oz 79

4800100686 Natural Super Chunk 15 oz 59

4800100681 Reduced Fat Creamy 16.3 oz 58

4800109430 Natural w/ Honey 15 oz 61

4800121125 Natural Dark Chocolate 15 oz -

TIER TWO

4800121210 1/3 Less Sodium and Sugar 15 oz 21

4800127068 Base Creamy 28 oz 61

4800123202 Natural Creamy 26.5 oz 42

4800127044 Base Super Chunk 28 oz 42

4800116016 Natural Super Chunk 26.5 oz 20

4800126465 Natural Dark Chocolate 26.5 oz -

TIER THREE

4800127072 Base Creamy 40 oz 52

4800127401 Natural Creamy 40 oz 22

PRODUCT AND PACK

SHELVING


Price comparison

Size

Color – variety cues

Brand Names

Peanut Butter Shelving

Shoppers want intuitive shelf arrays – changes in size confuse them

• Top shelf is for unusual items, i.e. non peanut butter items (almond butter, soy-based butter, Nutella, etc.)

• Eye level is where the shopper begins, and spends most of their time and expect to find their preferred size (most often 16-18 ounce jars)

• Bottom shelf = Largest sizes are expected at the bottom including non-core items (i.e. Club size packs)

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SHOPPERS’ NAVIGATION HIERARCHY

Color – to find preferred brands


• Specialty Items (i.e. non-peanut butter spreads)

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Planogram – Grocery & Mass

• Base peanut butter items grouped by brand and natural sku’s integrated with the brand associated (i.e. Skippy® Natural and base in one section of the set)

• Large size of peanut butter including Club Packs/Twin Packs


WIC Approved

• 16-18 oz branded peanut butter is generally approved as a WIC item– See reference on 1HP for more details

• If approved, utilize retail teams to get a shelf tag

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MERCHANDISING


Promotion Principles

• Maintain discipline around $2.49 or 2/$5 promoted price point for 15/16.3 oz core

• Frequency over depth when excess funds are available

• Hit critical drive periods

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Promotion Calendar

3 EVENTS PER HALF • 1 – Feature @ Back to School (Aug/Sept)• 1 – Feature for baking event (Nov. / Dec.)

2-3 EVENTS PER HALF • 1 – Feature @ Back to School (Aug/Sept)• 1 – Feature for baking event (Nov. / Dec.)

2 EVENTS PER HALF • 1 – Feature @ Back to School (Aug/Sept)• 1 – Feature for baking event (Nov. / Dec.)

HIGH BDI

MEDIUM BDI

LOW BDI

• Pacific• West North Central• New England• Mid Atlantic

• Mountain

• East North Central• South Atlantic• East South Central• West South Central

Key Events Ad Week Feature Price

Q1 Back to school 1/17 2/$5

Q2 Easter 3/31 2/$5

Q3 Memorial Day 5/19 2/$5

Q3/Q4 Back to school Jul/Aug/Sep 2/$5

Q4 Labor Day 8/25 2/$5

Q1 Baking season 11/17 2/$5


LUNCH

Ability to Drive Market Development Through Cross-Merchandising

BREAKFAST

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SNACKING

BAKING


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Shipper Opportunities

• Cross merchandise with produce

• Consumer insight:– 21% of peanut butter usage is as a dip– Crackers, apples, bananas, and celery are the most

frequently dipped items– SKIPPY® over indexes as a dip relative to other brands

Q 2e: Please select all the brands of peanut butter you BUY usually?Q.FLEX11: How peanut butter was consumed in household in the past month?

PRICING


Module 6

Pricing Philosophy

• Our overall pricing benchmark is Jif– We will manage to targeted price gaps

• Customer commitments on base price investment must be fluid so we can react quickly to changing pricing dynamics

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Questions: Contact Andrew Quinn ([email protected])

Skippy ® Brand Presentation. Confidential and Proprietary, © 2013 Hormel Foods, LLC.

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Transcript of Skippy ® Brand Presentation. Confidential and Proprietary, © 2013 Hormel Foods, LLC.