1 september 2-3, 2009 2009 cycle 10 retail execution meeting
TRANSCRIPT
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September 2-3, 2009
2009 Cycle 10 Retail Execution Meeting
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Key Messages
Winning at Walmart is critical to Hershey’s success.
Our combined efforts have delivered CYTD results +16.0% versus prior year and core packtype conversion of 110%.
Implement current department 01 headquarter merchandising programs during cycle 10 & when programs sell down, transition all displays to Snack Size, Jumbo Snack & Assortment Bags.
Maintain all department 82 execution throughout Halloween
Executing the 2009 Halloween strategy is critical to achieving the 92% sell thru goals in both $ & units.
Hershey’s baking chips will be the opening price point at Walmart; however, due to aggressive retails of Nestle at $1.98 during the baking season, Hershey will not be the featured baking chip.
Pre-selling execution of the Fall Baking program is vital to the success of this $38M season
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CYTD performance is 16.2% over prior year; 5.2 pts over the plan
performance
Week TY
POS $ %Chg.
14.0%
Last 4
17.9%
Last 13
13.5%
CYTD
16.2%
Hershey Confectionery POS Dollar Percent Change
Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)
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Week TY
Impulse
TotalTakeHome
Seasonal
39.5%
14.0%
5.7%8.8%
Last 4
37.1%
17.9%
11.7%9.9%
Last 13
12.7% 13.5%13.8%
20.7%
CYTD
21.4%
16.2%
11.8%
23.1%
Take Home
Seasonal
Impulse
Total
CYTD performance is driven by strong Seasonal and Impulse performance
POS Dollar Percent Change by Segment
CYTY impacted by:
• TH CPC 10.1 - 18.9 oz. = +19.5%
• TH Pkg Choc > 30 oz = +33.5%
• TH Molded Bars = +38.8%
• IC King Size = +77.4%
• IC Standard= +14.6%
Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)
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Total
CYTDL4LW
11
0%
13
5%
13
2%
King/Large
168%
144
%15
7%
StandardBar
97%
178
%
179
%
8PK
13
5%
129
%
106
%
6PK
80
%
114
%
90%
CPC12 oz
111%
11
8%
119%
CPC20 oz
63%
51%
55%
Twizzler
99%
69
%
63
%
Giant Bars
112%
94%
94%
Overall unit conversion is @ 110% & is being driven by 2/$1 Std Bars & $1 King Size
RollbacksUnit Conversion Trends
CYTD 8-14-09
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South
POS $ Inc
$29.1
Northeast
$25.7
West
$22.4
Central
$28.0
105.6% 105.4% 105.3% 104.0%% Plan +(-)
14.9% 17.1% 17.3% 16.1%% TY +(-)
CYTD Area POS Change ($M)
Thanks to flawless execution by the retail team,
HSY POS is +$107M vs. YAGO
Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)
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NY
%vs.
Plan
11
0.5
%
Mia
109.3
%
Birmg
107
.1%
Atl
106.8
%
Clev
106.5
%
Phily
106
.4%
Ches
105
.9%
Bost
105
.6%
Nash
105
.6%
Syra
105.6
%
J 'ville
10
5.5
%
Char
105
.5%
Dal1
05
.4%
Pitt
104
.8%
Raleigh
104.8
%
Hsy
10
4.3
%
NO
10
4.2
%
Memp
10
4.0
%
Hou
10
3.7
%
NE
102
.9%
District % vs. Plan
All district’s in the Northeast and South areas are over plan
Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)
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LA
%vs.Plan
10
9.7
%
SF
10
9.2
%
Slc
10
7.2
%
SD
10
6.5
%
Den
105.8
%
Cincy
105
.8%
Phx
10
5.6
%
Stl
105.5
%
Chic
105
.0%
Mil
104
.3%
Indy
104.1
%
Sea1
04.0
%Ptl
10
3.7
%
KC
10
3.5
%
Det
103.2
%
Omh
103.1
%
Minn
10
2.9
%
GR
102
.1%
OC
102
.1%
SA
10
1.1
%
District % vs. Plan
All district’s in the Central and West areas
are over plan
Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)
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0
500
1,000
$1,500
LY
YTD
Rest of Year
$1,071.8
TY WM Plan (15.3%)
$1,247.6
$98
$78
$M Growth
16.2%
16.6%
% Chg
$470.5 $548.7Rest of Year$601.3 $698.9YTD
Hershey Confectionery POS ($M) YTD and Calendar Year
Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)
To date POS is at 56% of the WM stretch plan target and will require a minimum ROY growth
level of 16.6%
Total WM POS plan is +16.4%
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Momentum must be maintained through critical 2nd Half promotions
Hlwn
POS($M)
$140
Holiday
$98
Std Bars
$43
8pks
$38
FallBaking
$38
King Sz
$25
GiantBars
$14
IB Gum& Mints
$14
$1 Aisle
$12
12ozPkg
$12
24ozSyrup
$7
Bliss
$4
KissesBaking
$6
29% 10% 24% 87% 11%15% 67% 15% 29% 57% 2% 27% 11%09 vs 08 % Chg
Walmart 2nd Half Promotional POS ($M) Estimates
Promotional $’s are 63% of our 2nd half POS plan of
+16.4%
Programs highlighted in gold are the focus
priorities during cycle 10
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It is critically important to deliver against the key growth drivers
Hlwn
DollarGrowth
$38.0
StdBars
$15.0
Holiday
$10.0
FallBaking
$8.6
King Sz
$8.0
8-Pks
$5.0
12ozPkg
$5.0
IB Gum& Mints
$3.0
Bliss
$2.0
24ozSyrup
$1.3
$1 Aisle
$1.2
KissesBaking
$0.6
GiantBars
$0.3
Walmart 2nd Half Promotional POS ($M) Growth Estimates
Programs highlighted in gold are the focus
priorities during cycle 10
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Program Highlights 2 TABS
October 4th – Harvest Assorted Miniatures October 24th – Tick or Treat focus, item featured TBD
FSI FSI – September 27th Incremental FSI – October 18th
$1 off with the purchase of 3 snack size bags Advertising
GRP’s increased over 33% on core & seasonal brand ads Concentrated on last 4 weeks of the season
Retail Execution Contest August – October Winning district’s & RSR’s will include sell thru and displays metrics
2009 Halloween Merchandising Support
Current FSI 9/27
Incremental FSI10/18
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National FSI Support– 9/27 & 10/18 – $1.00 Off 3 Bags– 50 MM Circulation
2009 Halloween Support
National TV Support– 5 weeks; 9/28 – 10/31– Supported at growth level GRP’s– Hershey’s, Kisses and Reese’s advertising
Reese’s Halloween specific creative
10/189/27
Incremental Vs. ‘08
Walmart Co-op Details: (creative TBD)
Print - 9/27
- Early Season Support (Reese Harvest and Kisses Harvest 2/$5)TV - 10/5-10/31- Focus on Reese Peanut Butter Cups Snack Size Digital/Online - 9/2 - 10/31
FPO
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2009 Halloween Display StrategyDisplay Transition Strategies
September PrioritiesDuring September, all 8pks should be sold only from the modular to avoid the cannibalization of the Halloween snack size strategy
Transition all 8pk secondary locations to either Halloween Snack Size, Jumbo Snack or Assortment Bags
CPC, 12oz – last SSO ships week 31 (Aug. 29-Sept.4) If your CPC, 12oz has sold down, transition to Bliss and/or Halloween displays
Bliss – SSO ships week 32, FSI drops week 34Ensure “A” displays and after Bliss sell down, transition to Halloween displays
We cannot let the stores kill the display space to merchandise other non Hershey Halloween itemsGain additional displays by leveraging the September 27th FSI on snack size
October PrioritiesAll secondary displays should be HalloweenGain additional displays by leveraging the October 10th FSI on snack sizeNo secondary 8pk displaysLast 2 weeks of the Halloween season, all secondary displays should be on or around the seasonal modular in the strike zone
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Cycle 10-11 Merchandising Strategy
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Standard Bar 2/$1 Rollback HighlightsWeeks: 18-39 Retail Strategy
Ensure all pallets/pdq’s are out on “A” displays & maintain displays throughout Halloween!
King Size $1.00 Rollback HighlightsYear long rollback
IB Gum & Mint Rollback HighlightsWeeks: 27-39
Retail Strategy for King Size & IB Gum & Mint SSO’s shipping to traited stores week 32 (September 5-11) Ensure all pallets & pdq’s are out on “A” displays As programs sell down during Halloween, transition to "B" locations
It is critical we maintain all department 82 execution’s throughout Halloween
Hershey Standard Bars deliver high lifts when promoted during
Halloween
Base
$/Store/Wk
$39
Early Season
$68
Late Season
$80
74% 103%Lift
Promoting Standard Bars during Halloween2008 Halloween – 3/$0.99 Promotion
Items:• Reese Std• Hershey Milk Choc• Hershey with Almd• Kit Kat• Reese Whipps
Periods• Base: 200830 - 32• Early: 200834 - 36• Late: 200837 - 39
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CPC, 12oz Rollback Highlights Weeks 27-36
Bliss Rollback Highlights Weeks 31-40 SSO delivers week 32 (September 5-11) FSI week 34 (September 20th) Features all Bliss SKU’s, plus Crème de Menthe & Bliss White Reese’s Select & Crème included in rollback, but not in SSO Sampling on Bliss Crème de Menthe & White Chocolate
Week 34 (September 24-27) Endcaps in selected stores (Store list will follow at a later date)
Strategies Ensure all drc’s are out on “A” displays As department 01 displays sell down, transition all display locations to
Halloween items
CPC, 12oz, Bliss & Reese’s Select Strategy
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2009 Projected POS $38M Incremental $8.6M or +29% Program Highlights
October - December 2009 An additional month vs. last year
Rollback pricing - $1.88 5 items on Baking Center
Reese’s PB, Heath Bits-o-Brickle, Special Dark Chips HSY Cocoa, 8oz & Kisses, 12oz
National FSI November 15 $1 off 3 bags of Hershey’s Baking Chips
Strategies Display activity will be sold at store level by the retail team
Leverage FSI at store level Due to competitive retails (Hershey @ $1.88, Nestle @ $1.98) Hershey will not
be the featured Baking Chip this Fall Hershey’s Baking Chips will be the low price leader
Target grocery endcaps, cart rail and action alley
2009 Baking Program
FSI 11/15
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3rd Quarter Programming
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Strategy Breakouts