skippy ® brand presentation. confidential and proprietary, © 2013 hormel foods, llc
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Skippy® Brand Presentation
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Contents
• Defining Customer Needs
• Product Introduction
• SKIPPY PB Launch Details
• Marketing Support
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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.
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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15
20+
QUICK BREAK
BETTER FOR YOU
TREAT
7
Grams of Protein
Relationship of protein to consumer snacking options
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Marketing Support Plan
• Leveraging performance of marketing in test markets to optimize vehicle effectiveness for national launch
PrintDigitalTV
Confidential and Proprietary, © 2013 Hormel Foods, LLC
APPENDIX
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
• 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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
LUNCH
Ability to Drive Market Development Through Cross-Merchandising
BREAKFAST
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SNACKING
BAKING
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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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
Confidential and Proprietary, © 2013 Hormel Foods, LLC
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 (ajquinn@hormel.com)
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