Saxonville® Sausage: The Italian Opportunity!
AXIS Consulting LTD.!
Current Situation!
0% growth in overall sausage!
15% growth in Italian sausage!
16% Vivio® market penetration!
20% annual organics growth!
Strengths & Weaknesses!
Strengths:! !• Ability to distribute fresh products nationally!• 44% adult population prefer fresh!• Matched category growth level!• Favorable brand image!
Weaknesses: ! !• Not a first mover in Italian sausage market!• In-store promotional marketing only!• Small national presence !• No “true Italian” heritage!
Opportunities & Threats!
Opportunities: !
• Growing Italian sausage market!• Desire for tasty, easy family meals!• Growing organic and “natural" markets!• No national players in fresh Italian sausage ! !Threats: !
• Local producers!• Higher spending by potential rivals!• Increased frozen sausage consumption!
GE / McKinsey Chart Analysis!
Business Unit Strength!
Mar
ket A
ttrac
tiven
ess!
High! Medium! Low!
High!
Medium!
Low!Vivio®
Brats 4%!
36%!
Plan Objectives!
• Take Vivio® national!
• Focus on cohesive branding!
• Increase sustainability!
• Introduce Vivio® Organic line !
Branding!Vivio® !
• Market presence!• Positive testing!• Less costly !
Positioning statement: ! “Bringing families together with fresh healthful
Italian sausage”!
Unique Selling Propositions:!
• A national line of fresh Italian sausage!• Makes for easy and delicious family meals !• The versatile ingredient no family should go without!
Promotional Strategies!Strategies for Vivio® Natural!• Labels with recipes!• Recipe sharing with strategic partners!• Coupons and discounts with strategic partner!
Strategies for Organic line!• Co-branding with local organic producers !• Encourage local producers to promote Vivio® !
Vivio® Natural Vivio® Organic
Product!
Vivio® Natural!
• Drop hot sausage ground!• Drop Italian pepper sausage!
Vivio® Organic!• Recipe licensing !• Produced organic farms!
Packaging!
Re-sealable sustainable packaging created by Ecoproducts®!Smaller labels to showcase product!Recipes on back of label!
Vivio® !“The versatile ingredient no family should go without”
Distribution!
Existing distribution chain for Vivio® Natural!• Fresh suppliers!• Sold to wholesalers!• Promoted in chain stores.!
Organic line licensed in the Pacific and Northeast!
Industrial Standard!
• Revenues of $1.5 Billion!
• COGS of $1.223 Million (81.54%)!
• Gross Margin $276.9 million!
• Promotional Expense of $11.850 (.79%)!
• Net Profit of $39.6 Million!
Spending to Compete!
2004 – 2005 breakfast sausage hemorrhaged more than $33,000,000 in
revenue
Recommendation: $12 million introductory promotional campaign!
Organizational goal cannot be realized without a financially supported
promotional campaign!
Financial Forecast!
2006! $24,400,571!2007! $46,046,137!2008! $54,203,610!2009! $62,768,957!2010! $71,762,571!
$175,149,937 NPV !
Vivio® !
“Bringing families together with fresh healthful Italian sausage”!
Questions?
Financial Outlook!2006 2007 2008 2009 2010
Pessimistic (net) -$15,135,824 -$10,184,204 -$4,994,249 $455,204 $6,177,130 Inflows $520,296,286 $546,361,100 $573,676,655 $602,357,988 $632,473,387 Outflows $535,432,110 $556,545,305 $578,670,904 $601,902,784 $626,296,257 Expected (net) $31,139,287 $53,455,464 $62,009,998 $70,992,259 $80,423,633 Inflows $783,073,747 $900,527,309 $945,551,174 $992,826,233 $1,042,465,045 Outflows $751,934,460 $847,071,845 $883,541,176 $921,833,974 $962,041,411 Optimistic (net) $36,982,104 $72,639,173 $82,175,917 $92,189,499 $102,703,760
Inflows $816,202,719 $1,003,917,845 $1,054,111,23
7 $1,106,814,29
9 $1,162,152,513
Outflows $779,270,615 $931,278,672 $971,935,320 $1,014,624,80
0 $1,059,448,754
Weighted Average $24,400,571 $46,046,137 $54,203,610 $62,768,957 $71,762,571
NPV $175,149,937