Changing Stories

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Director, Advisory Services

Chief Financial Analyst

Director, Industry Research

Chief Marketing Advisor

Senior Marketing Analyst

Director, Marketing Research

Nicholas Isaacs

Jake Weiskirch

Brandon Jonas

Evan Golodner

Luke Johnson

Stefan Urosevic

Stratton Oakmont Consulting Group

Changing Stories

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Contents 5 Executive Summary

7 Prelude

9 Introduction

10 The Free-From Food Industry

Consumers are switching to Healthier Diets

Importance of Brand Reputation and Transparency

Positioning Enjoy Life Foods for the Future

11 Competition

High Growth Rates Call for Dangerous Future Competition

High Product Prices May Deter Future Profitability

More Competition Could Alter Consumer Preferences

13 Millennials & Baby Boomers

Millennials Have High Demand for Gluten-Free Foods

Baby Boomers Are Unfamiliar with Gluten-Free Foods

15 Packaging toward Health-Conscious Consumers & Millennials

Differentiating Allergen- Conscious and Health-Conscious Consumers

Vulnerability of Health-Conscious Consumers

Catching the Eye of the Millennial

Clean Label

17 Financials

Financial Overview

Production/Supply Chain Benefits from Merger

New Target Pricing

Financial Model Analysis

21 Implementation

23 Outro

24 Appendices

A: SWOT Analysis on Current Situation

B: SWOT Analysis on Projected Situation

C: Case Document Financial Information

28 References

Works Cited/Works Consulted/Contact Information

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List of Figures

10 Figure 1 Retail Sales of Gluten-Free Foods by Segment

10 Figure 2 Retail Sales of Gluten-Free Foods

12 Figure 3 Ardent Mills Logo

12 Figure 4 Peas of Mind Logo

12 Figure 5 Annie’s Homegrown Logo

13 Figure 6 Generation Demand Chart

14 Figure 7 Consumption of Gluten-Free Foods

18 Figure 8 Financial Models

19 Figure 9 Enjoy Life Foods Indiana Plant

21 Figure 10 Timeline

25 Appendix A: Pre-Implementation SWOT

26 Appendix B: Post-Implementation SWOT

27 Appendix C: Case Document Financial Information

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Executive Summary

The Company

Enjoy Life Foods was founded to provide tasty, allergen-friendly snacks to people with food

allergies and help them enjoy eating despite their diet limitations. The mission was

personal to former CEO Scott Mandell since his wife has food allergies. He wanted to

create safe, healthy options for people like her, and the sincerity of the mission has been

engrained into the Enjoy Life Foods culture.

Situation & Complications

The free-from industry is experiencing tremendous growth. Enjoy Life Foods must

continue to differentiate itself from both current and future competitors to remain at the

top of the industry. Free-from growth is directly tied to the health-conscious trend.

Research has shown that the Millennial and Baby Boomer generations are the two key age

demographics to target due to their health-conscious nature. These two age groups

present prime opportunities for Enjoy Life Foods to grow market share now and in the

future, but Enjoy Life Foods faces a significant problem: high selling prices. The Baby

Boomer generation may be capable of purchasing the company’s products if they possess

suffice savings. However, high selling prices is an element that will limit the impact on

Millennials due to their lack of disposable income. Enjoy Life Foods can resolve this issue

and make an impact on the Millennial generation by providing lower-priced items. We,

associates of the renowned and proven Stratton Oakmont, have developed a cost-

restructuring plan coupled with a cost-centric marketing plan that will allow Enjoy Life

Foods to make large impacts on both the Millennial and Baby Boomer generations. Our

strategies will result in sustainable growth and boost market share for years to come in the

free-from food industry for Enjoy Life Foods.

Solution

This recommendation is divided into two parts: an internal part that involves the cost-

restructuring and an external part that involves the marketing plan. The internal plan aims

to increase production efficiency to cut costs. Cutting costs will allow Enjoy Life Foods to

lower prices without losing profits. Enjoy Life Foods currently has high prices when

compared to competitors, which could be a difference maker for consumers, especially for

young Millennials with low disposable incomes. Millennials and Baby Boomers alike are

purchasing Enjoy Life Foods’ products now despite the high prices because the market is

just starting to become more concentrated. With high projected growth rates, new start-

ups are sure to pop up and take away market share with new, cost-effective strategies that

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will appeal more to consumers. Our proposed cost-minimizing plan will resolve this issue

for Enjoy Life Foods as it seeks to expand, grow market share, and beat out the

competition. Cost-cutting will be done by restructuring the supply chain with Mondelez

and obtaining better pricing with suppliers. Mondelez’s large size will prove resourceful by

utilizing their experience and relationships with suppliers and retailers. By lowering the cost

of goods sold and overhead expenses, Enjoy Life Foods will save enough money to

decrease its selling prices to beat out competitors now and in the long-term.

A portion of the money saved through the restructuring of the supply chain will be used to

implement the external marketing campaign. Enjoy Life Foods has a brand recognition

problem that needs to be fixed, especially with Millennials and Baby Boomers. The

company’s branding needs to remain consistent and underscore a personal message to

consumers. Improving the Enjoy Life Foods Facebook page will be the first way to connect

with targeted consumers. The Facebook page will post videos showing how Enjoy Life

Foods has positively impacted people’s lives. Telling stories will evoke relatable emotions

from viewers, thus creating a more attractive brand for a wide range of consumers. The

second part of the marketing plan will differentiate Enjoy Life Foods’ packaging from other

free-from companies. Three things every Enjoy Life Foods product should have on its label

are health facts, a note describing how the product is free from the top eight allergens, and

a joke or clever saying. The latter is the only one of these three that is not currently

included on labels. People will remember Enjoy Life Foods if they laugh when they pick up

a box in the grocery store or when they are eating the products at home. Both the

Facebook and packaging changes will work in conjunction to create human connections

and bring out emotions from consumers. As more people become exposed to these

elements, they will associate Enjoy Life Foods as more than just a snack.

Timeline The first 6 months of this plan will be spent implementing the cost-cutting strategies.

Months 6 through 12 will involve the marketing campaign being devised and implemented.

This phase will involve gathering consumer stories, designing packaging, and coming up

with the jokes that will be used. After this phase is completed, Enjoy Life Foods will initiate

the marketing plan. As the restructuring strategies further decrease costs and the

marketing plan goes under way, data will be collected and analyzed over the course of the

next 12 months to measure the effectiveness of the campaign. From this data analysis,

Enjoy Life Foods can make the appropriate adjustments to maximize exposure and profit.

We expect cost savings of $1.25 million and an $11.35 million increase in revenues

compared to the current projections of Enjoy Life Foods from EY.

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Prelude

Jocelyn, a thirty-year-old mother of one, has always placed her daughter Sarah’s health as

a top priority. Jocelyn is a health nut and seeks out the healthiest, safest food options with

each grocery store visit for her seven-year-old, in which the options usually consist of

gluten-free, non-GMO, and free-from foods. However, Jocelyn, like many other Millennial

parents her age, faces a significant challenge when trying to provide these foods for her

child: a lack of disposable income.

Millennials, especially Millennial parents like Jocelyn, lack a means to purchase these

healthy options. The reason being that these healthy options are a lot more expensive

than the traditional ones. So what is Jocelyn to do?

There is not much she can do. If Jocelyn represents the norm for a typical consumer-to-

price relationship, she will likely have to settle for the cheaper options, which are not as

healthy. Consequently, Sarah’s diet will not be as nutritious or as safe as it should be.

You may feel for Jocelyn’s predicament, and you may even want to help! Good. You

should. Sarah, like every young child, deserves the healthiest options out there. The only

way to keep Jocelyn providing these healthy foods to Sarah is for a leader to emerge and

provide more affordable options.

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Where We Are…

Where We’re Going

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Where We Are…

Where We’re Going

Introduction

Enjoy Life Foods was founded by former CEO Scott Mandell and Bert Cohen in 2001.

Mandell developed the business plan for the company while completing his MBA at the

Northwestern Kellogg School of Management in 2000. Today, Enjoy Life Foods sells

healthy, delicious, allergen-free food to people all across the United States and Canada.

Enjoy Life Foods has an international expansion plan well in development after the

company’s recent merger with Mondelez. The company has earned respect as a market

leader in the free-from food industry, offering foods free of the top eight food allergens.

Enjoy Life Foods has the expertise and free-from products to position itself well for the

future.

Despite the expertise and well-developed product line, Enjoy Life Foods has some

obstacles to overcome if it looks to be successful in the long-term. Many of Enjoy Life

Foods’ products are significantly higher-priced compared to most of its current

competitors’ products. With consensus estimates projecting high growth rates in the free-

from industry over the next five years, new competition will likely arise as others see

opportunities to make profits in the industry. Incoming competitors may bring with them

competitive pricing strategies that could make some of Enjoy Life Foods’ products less

attractive to individuals with less disposable income.

Specifically, high selling prices push away a key demographic for Enjoy Life Foods:

Millennials. Millennials prove to have the least amount of disposable income out of all

potential targets for Enjoy Life Foods. Millennials are also the demographic that seeks to

eat the healthiest diets, making Enjoy Life Foods’ healthy product line a perfect fit for the

age group. If Enjoy Life Foods limits its product line for only those making higher incomes,

they could lose out on a huge customer base to bolster profitability.

Enjoy Life Foods’ issue of high selling prices and the potential complications that could be

incurred raise the following question: What can Enjoy Life Foods do to cut down its high

selling prices in order to beat out current and future competition and appeal to the

Millennial demographic?

Through in-depth analysis and top-of-the-line research, we, associates of the trusted and

reputable Stratton Oakmont, have developed both a restructuring plan and a new

marketing strategy that will lower costs of production. Cost deductions will consequently

decrease selling prices and appeal to both the Millennial and Baby Boomer generations. In

turn, this will significantly increase profitability and improve brand image for the company

in the long-term.

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The Free-From Food Industry

Consumers Are Switching to Healthier Diets

The free-from food industry continues to expand as consumers change to healthier diets.

Enjoy Life Foods is positioned well to take advantage of this growing trend but can gain

additional market share by expanding their customer demographic. The free-from food

industry has benefited from the growing amount of people who are putting more focus on

living a healthy lifestyle, but this growth cannot last forever. Every industry experiences

growth and that growth will one day come to a halt. Enjoy Life Foods will need to gain

market share to best position itself for if or when the free-from food industry growth does

start to slow.

Figure 1

Figure 2

Importance of Brand Reputation and Transparency Millennials, particularly Millennial parents, are following the advice of their doctors and

other health professionals to get rid of harmful ingredients in their diets (Roberts).

Millennial parents view free-from foods to be more natural and healthier than other

traditional foods that one may find at a grocery store. Snacks are the most purchased

gluten-free product with nearly $4 billion in sales (Topper). In addition, consumers

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purchase free-from foods because of the ingredients they exclude, rather than the

ingredients used. GMO-free products are the most sought after by consumers and any

product that does contain GMOs may struggle into the future (Roberts). Also, consumers

gravitate toward products that are transparent with their ingredients, in which Enjoy Life

Foods provides a clear list of ingredients on each product. Transparency with ingredients

will be crucial for Enjoy Life Foods going forward as any mistake could jeopardize the

company’s reputation with consumers.

Positioning Enjoy Life Foods for the Future Consumers will eventually change their preferences to an alternative, and the demand for

free-from food will level off. Enjoy Life Foods will need to expand their customer

demographic to keep up with consumers’ changing preferences and ready itself for once

the industry growth slows. Having a broad customer demographic will allow the company

to have a diversified base of customers, which will consequently boost revenues as well as

protect the company from competition in the future.

Competition

High Growth Rates Call for Dangerous Future Competition in the Industry Competition in the free-from food industry is a critical topic that Enjoy Life Foods must

address if it seeks to maintain sustainable success. An emphasis on addressing current and

future competition is due mostly in part to the current and future growth expectancies in

the free- from food industry. Carolyn Heneghan, writer for Food Drive, addresses the

impressive growth occurring in the free-from food industry as well as the higher growth

rates expected ahead. According to Heneghan, healthy snack sales continued to have

strong growth in 2015 with a Compound Annual Growth Rate [CAGR] of 4.7%, which

outpaced growth in the food and beverage industry. It was also pointed out that the free-

from food industry is expected to grow at a CAGR of 5.7% over the next five years

(Heneghan). With a high current growth rate and an even higher expected growth rate, a

larger customer base may be available for Enjoy Life Foods to make an impact on.

However, despite this possibility, high current and expected growth rates also indicate the

possibility of an inflow of competitors in the free-from food industry as other potential

producers may see an opportunity to make profit in the market. More competition in the

free-from food industry offers a double-dynamic of risk: competitive pricing and switches

in consumer preferences.

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High Product Prices May Deter Future Profitability Enjoy Life Foods must also take into account that its high selling prices may lead customers

away from purchasing its products. Diana Herrington, writer for Real Food for Life, states

that gluten-free products are 242% more expensive than regular products. With such a

sharp difference in pricing, high-expected growth rates, and gluten-free products being

one of the main categories behind Enjoy Life Foods’ snack menu, the possibility of

competitors entering the free-from food market with new, competitive strategies to sell

similar items at lower prices could pose to be a real risk for Enjoy Life Foods. Even more

concerning is the fact that certain current competitors are already beating Enjoy Life Foods

in pricing over various products in the snack category, the fastest rising category in the

free-from food market. These competitors include, but are not limited to, Annie’s

Homegrown, Ardent Mills, and Peas of Mind. One specific example of Enjoy Life Foods

falling behind in the price game between these companies is the difference in prices of

Enjoy Life Foods’ granola bar line to that of Annie’s Homegrown. One five-pack of granola

bars from Enjoy Life Foods totals to $4.99 online, whereas one five-pack of granola bars

from Annie’s Homegrown totals to $2.90, making Enjoy Life Foods’ granola bar line

approximately 72% more expensive than Annie’s Homegrown. Enjoy Life Foods will need

to make an effort to sell its products at a lower price if it seeks to maintain and grow its

power in the free-from industry.

Figure 3 Figure 4 Figure 5

More Competition Could Alter Consumer Preferences To go along with competitive pricing being a possibly dangerous factor for Enjoy Life Foods

in future operations, more competition may also provide consumers with more

opportunities to change preferences. New competition arriving in the market brings with it

more new products as well. Enjoy Life Foods must develop a way to either offer a better

product or show why its products and categories are better than its competitors.

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Millennials & Baby Boomers

Millennials Have High Demand for Gluten-Free Foods Targeting Millennials will help Enjoy Life Foods increase market share in the free-from food

industry. The greatest demand for gluten-free foods lies with the Millennial generation.

According to a Mintel article from September 2014, “Younger consumers, specifically those

aged 18-34, are currently more likely to eat gluten-free foods…with about 50% currently

consuming gluten-free products” (Topper).

Figure 6: Generation Demand Chart

Additionally, the market for Millennial women still has much more room to grow. The same

Mintel report states that “34.5% of women aged 18-34 have not tried gluten-free foods but

would be willing to in the future” (Topper).

Demand for allergy-free foods follows a similar pattern with Millennials leading the way. In

his June 2015 Mintel article on free-from food trends, William Roberts Jr. writes, “45% of

Millennial moms and 37% of Millennial dads purchase free-from foods because they believe

they are healthier for their children.” Furthermore, there is opportunity in the market for

single Millennial women as roughly one-third of that segment has not yet tried gluten-free

foods but is willing too. Getting these new consumers associated to the Enjoy Life Foods

brand can lead to lifelong customers. Consumers still believe gluten-free products are a

healthier option, so once they start to buy those products they tend to stick with gluten-

free options. Another route Enjoy Life Foods can take in their marketing towards

Millennials would be to target parents. There is room for growth here as Millennial parents

purchase the products for their children. Marketing towards Millennial parents now will

build stronger relationships now and create customer loyalties from their children in the

future.

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Baby Boomers Are Unfamiliar with Gluten-Free Foods Millennials are not the only segment of consumers in which there is potential to increase

market share. Baby boomers are a great segment Enjoy Life Foods should target because

of their desire for healthy products and unfamiliarity with gluten-free foods. A Mintel

Report states, “Baby Boomers are more concerned with foods being artificial-free

compared to all other consumers” (Roberts Jr). This fits perfectly into Enjoy Life Foods

product line because it prides itself on being free-from. Another way to capture the Baby

Boomers is to get them familiar with gluten-free foods. Amanda Topper of Mintel Reports

highlights the connection the Baby Boomers have in the gluten-free market: “About 87.5%

of Baby Boomers do not currently consume any gluten-free products” (Topper).

Figure 7

The lack of familiarity the Baby Boomers have with gluten-free products means that there

is great potential in this segment. Younger generations have started falling in love with

gluten-free foods because of the perceived health benefits. If that same trend can continue

with the Baby Boomers, Enjoy Life Foods can be at the forefront when Baby Boomers start

to shop in this segment of the market. Diana Smith of Mintel Reports states Baby Boomers

“Account for 1/3 of all grocery store purchases in the US.” Enjoy Life Foods has the perfect

opportunity to attract the Baby Boomers, as such a large amount of them are already in the

grocery stores but lack the knowledge of Enjoy Life Foods brand. The combination of

desiring artificial-free foods and not currently eating gluten-free means an effective

marketing campaign by Enjoy Life Foods could have tremendous results. If these older

customers convert to Enjoy Life Foods products for health reasons, they will want to stick

with them as they age and health looms as a top priority in their lives.

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Packaging toward Health-Conscious

Consumers & Millennials

Differentiating Allergen-Conscious and Health Conscious Consumers

Targeting health-conscious consumers rather than allergen-conscious consumers will give

Enjoy Life Foods its best opportunity to increase its market share. Of the 64% of people

who have restrictive diets, only 36% are restricted because of allergies (Nielsen, 2016). That

means almost half of the people who follow a restricted diet are doing so for health

purposes. A consumer who is allergic to common ingredients (gluten, egg, dairy, peanuts,

soy, etc.) has most likely been using these products for a long time. Allergy-conscious

consumers are more likely to know what they like and be loyal to a brand. The fact that

Enjoy Life Foods’ products are free from the top eight allergens means they will always be a

player for allergen-conscious consumers. Even if they don’t frequently buy from Enjoy Life

Foods, it is a guarantee that allergen-conscious consumers will always be in the free-from

market. However, there is no such guarantee with the health-conscious consumers. Health-

conscious consumers have recently entered the market for free-from products and have

not established brand loyalties.

Vulnerability of Health-Conscious Consumers

Health-conscious consumers also have a reputation for being less aware of the facts

regarding the overall health and impact of certain products and ingredients, such as gluten.

This reputation is partially due to the suddenness of the health trend boom. A survey was

conducted that showed participants two food labels that respectively say “MUI-free” and

“Gluten-free” (Priven, 2015). The survey revealed that 22% of adults surveyed thought the

“MUI-free” product was healthier and 26% thought the “gluten-free” product was

healthier. People make assumptions that if the product is free of these common allergens,

the product is automatically healthier. The survey demonstrates that health-conscious

consumers can be easily swayed. Enjoy Life Foods can take advantage of health-conscious

consumers being less aware by designing a marketing campaign focused on their needs.

New consumers need a powerful brand to believe in, and they need to be convinced the

product is indeed healthy. Health-conscious consumers are the more volatile segment of

the free-from industry, but that can give Enjoy Life Foods a key advantage on competition

if they can attract these new consumers to its brand.

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Catching the Eye of the Millennial

Enjoy Life Foods would benefit from focusing their packaging toward Millennials for several

reasons. According to Business Wire, the healthy eating trend and its linkage with weight

management is also increasing the consumption of gluten-free packaged food among

Millennials. Younger individuals are more conscious about their diet and often go for clean

labeling of products (Technavio). The key to catching the Millennial’s eye is to create more

modern and healthier packages that advertise organic or gluten-free products. Another

way to attract Millennials is by creating a personal connection with the consumer.

Millennials want to hear a story and relate it back to their own, and a good way to do this is

to explain a story through the product (Weinstein).

Clean Label

Packaging has become more beneficial and important in the last few years due to the

change in healthier products. In 2015, the “clean label” was the craze and people were

looking for them on every box (Packaged). Packaged Foods in the US explains clean labels:

“When consumers are looking to eat better, they have become less concerned with

counting carbohydrates, calories or grams of fat. Instead, shoppers are increasingly reading

ingredients labels, and are particularly interested in products which have a short list of

ingredients they know and can pronounce.” Reading about unfamiliar ingredients is useless

to people, because they don’t know what health benefits or risks those ingredients provide.

Consumers prefer to read shorter lists, highlighting the key ingredients used or excluded in

the product.

Enjoy Life Foods can influence consumer choices by carefully designing the packaging.

Health-conscious consumers look for health facts on a product’s label, but most people do

not want to read all of the fine print listing every ingredient. Only 48% of consumers look at

ingredient labels (Hennessy). Therefore, only the most important parts should be

highlighted on the packaging. In addition to the health benefits, Enjoy Life Foods should

find room for a joke on the packaging. Incorporating a joke will convey the brand as more

upbeat and friendly. Only 37% of brands were given “good or excellent” on the customer

experience index (Forrester, 2012). The low percentage indicates that creating happiness

with the consumer can go a long way in separating the Enjoy Life Foods brand. Most

companies in the free-from industry have discovered that promoting health facts is

essential, so including those facts will not be enough to separate Enjoy Life Foods’

packaging from the rest. Including a joke or phrase will differentiate the Enjoy Life Foods

brand.

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Financials

Financial Overview

Enjoy Life Foods is at a pivotal point in the company’s short history. More competitors are

entering the market, while more consolidation is occurring with major food companies as

they are acquiring smaller start-ups in order to grow their health foods portfolio. This has

put ample amounts of stress on companies to grow their operations within production,

manufacturing, and buying power of products used to make health foods. The stress will, in

turn, be a benefit to the start-ups as they will be more capable of producing larger

quantities at lower prices. Using a $25 million dollar net revenue in 2013, our team has

created a financial model to provide profit projections for Enjoy Life Foods under our

proposal.

Production/Supply Chain Benefits from Merger

Mondelez, which recently purchased Enjoy Life Foods for over $80 million dollars (PrivCo),

has adjusted its corporate strategy to bring their “better choice” foods division to around

25% of their portfolio (Horovitz). Mondelez will be able to use their size as leverage to

make stronger deals with vendors that supply allergen-free food to major food companies.

This directly impacts how Enjoy Life Foods can operate and effectively reduce production

costs. Moreover, an additional benefit to the supply chain is the speed and inventory

availability associated with having a stronger presence. As Enjoy Life Foods grows, the

ability to produce higher quantities is dependent on a stronger supply chain than what is

currently in place. Leasing and building more factories in the future is a major aspect to the

efficiency of the supply chain. Danone Food Group is a perfect example of taking a start-

up, WhiteWave, and lowering its cost and improving its market share. According to Forbes,

“after the Kraft-Heinz merger, a $1.5 billion production cost reduction occurred, coupled

with stronger purchasing power in the future.” Applying this methodology to Enjoy Life

Foods will lower cost of goods sold and overhead expenses and ultimately bring down the

final selling prices.

New Target Pricing

The added competitors in the space add one set of issues, while price point is

another. Free-from foods are more expensive than their standard food counterparts. For

example, on Amazon.com, a gluten free snack bar competitor, Glutino, is priced at $0.56

per oz, and Enjoy Life Foods is priced at $0.68 per oz. There is a 20% difference to get the

added benefit of being fully allergen-free, and by driving the price down closer to that per

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ounce price, Enjoy Life Foods will be able to have a competitive market advantage. To

consumers that need the allergen-free foods, they know and expect to pay a premium.

Converting a consumer that does not need the allergen-free food to buy it is more difficult.

The increase in supply chain efficiency and lowering of production costs will help bridge the

gap, consequently leading to more sales. If there is a small price penalty to be paid

(potentially a 20-30% markup) Enjoy Life Foods sales will increase. Furthermore, as

mentioned before, one of Enjoy Life Foods’ main target markets is millennials, who are

money-conscious consumers. Lowering product prices will make their products more

attractive to this demographic.

Figure 8

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Financial Model Analysis

The italicized numbers indicate a change of value compared to the EY Financial Model

(Figure 8) based off the Changing Stories Campaign. The advertising and consumer

support for the Stratton Oakmont Model is held constant at 14% of NR compared to

differing values in the EY projections (Appendix C). This is due in part too strategic and cost

effective advertising. Additionally, the COGS has been reduced by 5%, 2%, and 3% for the

next three years per NR compared to the EY Model which is based off supply chain

efficiency, packaging, and purchasing power. The Overhead and Admin expense

decreased as a result of more efficient factories and stronger logistics. Stratton Oakmont

projects 2017 and 2018 revenue to increase 50% and 45% YoY due to the combination of all

the aspects of the Changing Stories Campaign. The result is a $10.1 million positive

differential from what the EY projections came out to be.

Figure 9: Enjoy Life Foods Indiana Plant

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Implementation

21

Timeline

Figure 10

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Timeline/Logistics Our implementation plan is structured into two different segments: internal and external

implementation. From an internal perspective, Stratton Oakmont has identified cost of

goods sold and overhead/admin expenses as two major areas to change in the company’s

structure. These change will pass savings on to the consumer.

Over the course of the next three years, Enjoy Life Foods will obtain larger contracts as they expand to more grocery stores and new markets.

Through economies of scale (factory efficiency) and larger order quantities (input food costs/packaging), Enjoy Life Foods will be able to reduce production cost by 5-10% per Net Revenue per year compared to EY Model (based on the Stratton Oakmont Model).

Furthermore, Enjoy Life Foods has recently purchased a new factory in Jeffersonville, IN that will drastically decrease operating expenses, and with great demand in the future based on projections, they will have to open more factories.

These opportunities come at an initial cost, but will, in turn, positively affect overhead and

operating expenses. The saved costs will allow Enjoy Life Foods to implement a strong

marketing campaign geared to increase brand awareness with Millennials and Baby

Boomers.

The decreased selling price will prevent Enjoy Life Foods’ competitors from continuing to

use their largest competitive advantage and attract more consumers. The next step for

gaining market share is to earn the loyalty of consumers.

Packaging is a great way to create a positive consumer experience with a product. Enjoy

Life Foods products should have three things on every label:

Important health benefits of the product, a note displaying that the product is free from the top eight allergens, and a clever phrase or joke.

The purpose of placing a joke or phrase on a label is to make the consumer smile and create a happy last impression.

Specifically, the marketing plan will attract Millennials and Baby Boomers through Facebook targeted advertising. Stratton Oakmont will help Enjoy Life Foods have a viral video campaign through their Facebook highlighting the impacts Enjoy Life Foods has had on individuals and families. Consumers will have the opportunity to upload their own videos to Enjoy Life Foods and the winning video will receive $1,000 worth of food to send to their local food pantry.

The new marketing strategy will attract a larger audience of health-conscious consumers

and retain previous market share by creating memorable and positive experiences.

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Outro The year is 2021, and Sarah is a healthy, thriving twelve-year-old. Thanks to Enjoy Life

Foods’ leadership in the food industry and its now well-known culture of care, Sarah and

millions of children from all parts of the world can obtain the healthy diets they need and

deserve. Jocelyn and other Millennial mothers like her can now go to the grocery store and

have the means to purchase the healthy options they want to provide to their children.

The story of Jocelyn and Sarah shows the following: a company can be so much more than

just a moneymaking venture. This is especially the case for Enjoy Life Foods. As

mentioned before, the company’s inspiration came from Mr. Mandell’s mission to provide

healthy, free-from options to people like his wife. He accomplished that part, but now it is

time for Enjoy Life Foods to make these options more affordable to ensure that everyone

has the opportunity to consume the healthiest diets possible. If Enjoy Life Foods can do

this (and as shown through our plan it can), the company will have the power to change

some stories.

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Appendix

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Appendix A: Pre-Implementation SWOT Strengths Weaknesses

46 allergy-free and gluten-free products (Horovitz)

Acquired by Mondelez (Horovitz)

Niche market (people with food allergies) (Horovitz)

Millennials (Topper)

Moms (Roberts Jr)

Can be sold to anyone

Gluten free is becoming a big trend

Snack industry is booming

Analysis: Enjoy Life foods has a great product in a strong market. It was recently acquired by Mondelez and has good name recognition. It has relatively high profit and revenues.

Higher prices (Roberts Jr)

Public knowledge (Roberts Jr)

Niche market(Horovitz)

Smaller brand (Horovitz)

Packaging (Owen)

Social Media (Topper)

Rising internal costs

Consumer Preferences

Gluten free products are not 100% nutritious for a balanced diet

Analysis: Enjoy Life Foods has higher prices than traditional snacks. The public still is not familiar with Enjoy Life Foods and its social media presence isn’t that large. Only a small percentage of individuals have food allergies and their products are not very diverse.

Opportunities Threats Growing healthy snacks market

(Horovitz)

Social media (Topper)

Baby Boomers (Topper)

Millennials (Topper)

Growing gluten-free market

New Markets (Topper)

Bigger Companies are expanding more into healthy foods companies (Horovitz)

Analysis: The healthy snack industry is still growing. Enjoy Life Foods has room to increase their social media usage. Consumers are turning to on-the-go snacks more than ever and discretionary spending is increasing.

Consolidation & Startups (Hosafci)

Over-saturation (Mansharamani)

Allergen free food are not as healthy as people believe (Mansharamani)

Rising costs of production

Production materials falling into bear markets

Distribution channels with expansion

Analysis: The main threat to Enjoy Life Foods is large brands crushing them due to more spending power and startups with large venture capital funding sweeping into the market. The market is over-saturated with different products and many consumers eat gluten-free products without having a reason to.

26

Appendix B: Post-Implementation SWOT

Strengths Weaknesses

High profit and revenue Can be sold to anyone Strong Expansion Platform Healthy options Gluten free is becoming a big trend

Snack industry is booming

Analysis: Enjoy Life Foods has a great product in a growing market. Consumers focus on healthy items has Enjoy Life Foods positioned well for expansion. The product can be sold to anyone and it is one of few strong free-from brands.

Gluten free products are not 100%

nutritious for a balanced diet Healthy foods are expensive Won’t be profitable until year three Future Cost Structure

Analysis: Making all the products free-from and gluten-free makes them higher priced. Gluten-free foods are not as healthy as consumers believe. The cost and sales projections for the next couple years are not flattering

Opportunities Threats

Leveraging purchasing power with Vendors

More people are interested in what they eat

Increasing Social Media Marketing (Facebook/Instagram)

Reduction in supply chain and production costs

Analysis: There is opportunity to attract customers through social media marketing like Facebook. Improving the supply chain and reducing costs will help Enjoy Life Foods increase profit margins.

Marketing does not reach the

amount of consumer necessary to warrant campaign

Not able to obtain cost saving relationships with vendors/supplier

Expansion of new plants not performing as efficiently as possible

Competition-Continuously decreasing cost with expanding market share.

Analysis: One of the main threats to Enjoy Life Foods is the new plant not performing efficiently. Additionally, the marketing campaign may not attract customers as expected.

27

Appendix C: Case Document Financial

Information

% of Net Revenue Actual Plan

2013 2014 2015 2016 2017 2018

Gross Revenue 130 130 127 128 128 128

Discounts & Trade Spending

(30) (30) (27) (28) (28) (28)

Net Revenue 100 100 100 100 100 100

Cost of Goods Sold (76) (75) (77) (71) (66) (65)

Gross Profit 24 25 23 29 34 35

Advertising & Consumer Support

(4) (4) (5) (12) (13) (16)

Overheads & Administration

(18) (18) (26) (30) (25) (20)

Operating Profit 2 3 (8) (13) (4) (1)

Growth vs Prior Year

2014 2015 2016 2017 2018 Gross Revenue 40.0% 2.6% 20.9% 45.0% 40.0% Discounts & Trade Spending Net Revenue 40.0% 5.0% 20.0% 45.0% 40.0%

Cost of Goods Sold Gross Profit 45.8% -3.4% 51.3% 70.0% 44.1%

Advertising & Consumer Support Overheads & Administration Operating Profit 110.0% -380.0% 95.0% -55.4% -65.0%

28

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32

The Team

Director, Advisory Services Nicholas Isaacs

naisaacs@umail.iu.edu (219) 742-7834

Chief Financial Analyst Jake Weiskirch

Jweiskir@umail.iu.edu (847) 275-2137

Director, Industry Research Brandon Jonas

Brjonas@indiana.edu (317) 332-5730

Chief Marketing Advisor Evan Golodner

egolodne@umail.iu.edu (516) 941-8121

Senior Marketing Analyst Luke Johnson

(317) 519-1036 lukejohns@umail.iu.edu

Director, Marketing Research Stefan Urosevic (708) 341-8989

surosevi@imail.iu.edu