deloitte case competition
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Powerpoint Presentation for Deloitte Consulting Case CompetitionTRANSCRIPT
Group 10
Friday, September 12, 2014
Kenny Hamilton, Adriel Lubarsky, Alex Piasecki, Sarah Spurr, Kelcie Wildeman
Bringing Simple Mills from the Natural Market to the Mainstream Market
Appendix Group 10Simple Mills2
How Simple Mills can increase their average store revenue by 2018?
Rebrand Simple Mills to appeal to a younger
demographic
Expand Simple Mills product line to include
childhood favorites and become a family staple
Implement a new promotional effort
through worthy cause marketing
Implementing this new marketing strategy will provide a 38% ROI at the end of 2018
Simple Mills’ target market is growing, but they need to implement a new marketing strategy in order to expand
Background Strategy Implementation Group 10Simple Mills3
2011
2012
2013
2014
(for
e)
2015
(for
e)
2016
(for
e)
2017
(for
e)
2018
(for
e)0
5000
10000
15000
20000
25000
Simple Mills Market SizeTotal Market Size
Ma
rke
t S
ize
($
mm
)Simple Mills target market is growing and an increasing number of consumers are purchasing gluten-free products
Gluten-free Foods and Beverage & Simple Mills’ Market Size is Growing
Projected market size for gluten free baked products, cookies, snacks, and desserts in 2018!
$6.2B
53%
31%
Of consumers avoiding gluten are trying to lose weight
Of gluten-avoiders do so because they believe these foods are
healthier. They chose gluten-free as a lifestyle option
Consumers in this market are buying gluten-free products for more than just intolerance issues
45%
Of those who do not currently eat gluten-free foods saying they are interested in trying
them
Source: (1) DataMonitor Report “Consumer and Innovation Trends in Bread and Bakery” (2) , Foodmanufacturing.com “Consumer Trends Gluten-Free Market
Background Strategy Implementation Group 10Simple Mills4
Gluten-free now has a more mainstream customer base, Simple Mills needs to rebrand to appeal to this group
Consumers are turning to gluten-free products for medical and non-medical reasons (weight loss, digestive health and healthy lifestyle)
Develop products that offer additional secondary benefits to the consumer to widen appeal
Promote gluten-free products as part of a healthy lifestyle regimen to enter the mainstream
Appeal to a wider customer base (not just the gluten intolerant) to bring products mainstream
Source: (1) DataMonitor Report “Consumer and Innovation Trends in Bread and Bakery”
Market Trend
Rebrand Simple Mills to appeal to a younger demographic
Expand Simple Mills product line to include childhood favorites to become a family staple
Implement a new promotional effort through worthy cause marketing
Strategy
Simple Mills offers products that not only satisfies the gluten-free demand, but offers other health benefits as well
Background Strategy Implementation Group 10Simple Mills5
Develop products that offer additional secondary benefits to the consumer to widen appeal
Promote gluten-free products as part of a healthy lifestyle regimen to enter the mainstream
Appeal to a wider customer base (not just the gluten intolerant) to bring products mainstream
Rebrand Simple Mills to appeal to a younger demographic
Expand Simple Mills product line to include childhood favorites to become a family staple
Implement a new promotional effort through worthy cause marketing
1 2 3
Strategy:
Background Strategy Implementation Group 10Simple Mills6
Source: (1) Packaging Digest “The Undeniable Influence of Kids” (2) Institute of Educational Services “Children as Consumers: Advertising and Marketing”
(3) Kushman, Rick “The Barefoot Spirit”
We can increase sales through a rebranded Simple Mills look that appeals to children and households alike!
Simply Youthful
Simply: Keep the original mass appeal
• Continue to appeal to your original customer
• Strengthen focus on high-quality, natural ingredients
• Experts at Packaging Digest recommend clean graphics and use of white space on packaging1
‒ Stands out from the chaos of a grocery aisle
Break
fast
Cer
eal
Snack
Foo
ds
Candy
Clothin
g
Sham
poo
House
hold
clean
er0
0.5
1
1.5
2
2.5
3
3.5
4
0%
20%
40%
60%
80%
100%
Fre
quen
cy o
f R
eque
sts
(4 =
oft
en,
1 =
nev
er)
Per
cent
age
of M
othe
r’s Y
ield
ing
Children have the most influence over mothers with food related decisions
2 to 14 year olds have influence over $1.2 trillion per year in household purchasing2
Kids influence 80% of household purchases1
Youthful: Attract the children’s market
• Attention-grabbing product features are key to attracting children’s interest in commercial activity2
‒ Implement brighter colors, convenience packaging, and high print quality for kids.
• Merging business and values is a dynamic and youthful way to reach customers3
‒ Initiate worthy cause marketing to build brand recognition and loyalty through experiences!
Background Strategy Implementation Group 10Simple Mills7
Develop products that offer additional secondary benefits to the consumer to widen appeal
Promote gluten-free products as part of a healthy lifestyle regimen to enter the mainstream
Appeal to a wider customer base (not just the gluten intolerant) to bring products mainstream
Rebrand Simple Mills to appeal to a younger demographic
Expand Simple Mills product line to include childhood favorites to become a family staple
Implement a new promotional effort through worthy cause marketing
1 2 3
Strategy:
Background Strategy Implementation Group 10Simple Mills8
Introducing new product lines allows Simple Mills to become a family staple at the dining room table!
Waffle Mix
• $4.4 Billion in frozen pizza sales grocery in 2013
• 34% of pizza shoppers willing to pay more for gourmet ingredients
• 85% of Americans enjoywaffles/pancakes for breakfast.
• Children influence breakfast food decisions in 97% of American families.
Pizza Dough Mix
Source: (1) The Barefoot Spirit by Michael Houlihan & Bonnie Harvey (2) Bulldog Reporter: Branding the Barefoot Way
*based on an average of 16 products sold per month for 14 month period in current sales data
$4.62 per bag
$1034.88 per store
$51,700 for 50 stores$258,500 for 250 stores$5,170,000 for 5000 stores
ProfitsProducts
Background Strategy Implementation Group 10Simple Mills9
Develop products that offer additional secondary benefits to the consumer to widen appeal
Promote gluten-free products as part of a healthy lifestyle regimen to enter the mainstream
Appeal to a wider customer base (not just the gluten intolerant) to bring products mainstream
Rebrand Simple Mills to appeal to a younger demographic
Expand Simple Mills product line to include childhood favorites to become a family staple
Implement a new promotional effort through worthy cause marketing
1 2 3
Strategy:
Background Strategy Implementation Group 10Simple Mills10
Implement a new, youthful promotional effort through worthy cause marketing
Benefits of worthy cause
marketing
Positive brand
associations
Taste tests for large customer
base
Free exposure to variety
of consumers
Opportunity to receive direct
market research
Ethos brand
association
Worthy Cause Marketing involves reaching the consumer in a memorable way, through partnerships with socially impactful, meaningful causes.
Autism Events
• AmeriCarna (North Carolina car show
benefiting Autism)
• 11th Annual Walk & 5k Run for Autism
(Schenectady, NY, near Wegmans)
• San Diego Chop Talk (Event about healthy
eating for Autism)
• Best Buddies: Sponsorship at conferences
around the country
Of consumers in the U.S said they would be willing to reward companies that give back to society by paying more for their goods and services
44%
Source: (1) The Barefoot Spirit by Michael Houlihan & Bonnie Harvey (2) Nielsen 2013 Consumers Who Care Study
Worthy Cause Marketing
Effectiveness
Background Strategy Implementation Group 10Simple Mills11
Worthy cause marketing is simple and was effective as the sole type of promotion for Barefoot Wines
Year 1
Year 3
Year 5
Year 7
Year 9
Year 1
1
Year 1
3
Year 1
5
Year 1
7
Year 1
90
4
8
12
16
20
24
0
100
200
300
400
500
600
Sales (USD) Sales (# of Cases)
Sa
les
(M
illio
ns
US
D)
Sa
les
(1
00
0s
of
ca
se
s)
Barefoot Wine saw increasing sales over the course of 19 years using only worthy cause marketing
Source: (1) The Barefoot Spirit by Michael Houlihan & Bonnie Harvey (2) Bulldog Reporter: Branding the Barefoot Way
How to harness the power of worthy cause marketing to build your own brand
12
3
546
Find a worthy cause that resonates with you or your product.
Start small and stay loyal.
Shine a light on your partners' causes.
Keep your retailers in the loop (and in your advertising!).
Identify nonprofits that champion your cause.
Donate products in exchange for recognition
and brand visibility.
Started worthy cause marketing
Background Strategy Implementation Group 10Simple Mills12
Simple Mills should implement these three brand strategy changes over the next four years
Year 1 2 3 4 5
9/1/2014 2015 2016 2017 2018
Rebranding
• Research most effective branding
• Work with design team
• Packaging production
Expanding Product Line
• Research and develop new products
• Product launch
Engaging in New W.C. Marketing
• Identify retail partners
• Host events
• Alternative promotions
Store Expansion 500 1200 2500 5000 5000
Source: Team Analysis
Background Strategy Implementation Group 10Simple Mills13
Implementing this new marketing strategy will provide a 38% ROI at the end of 2018
Source: Team Analysis
Background Strategy Implementation Group 10Simple Mills14
Risks inherent to both the strategy of targeting children, as well as with the health food industry at large
Over-emphasis on children as target market can lower broader brand uptake
Sticking to the Simply Youthful mission ensures that the product is exciting for children, approachable by adults and a family-targeted solution
Risk Mitigation
This strategy may not be effective enough for wide spread brand
Creating brand loyalty through consistent quality and worthy cause marketing will keep engagement high
The emphasis of health foods, especially gluten, may just be a fad
Creating brand loyalty through consistent quality and worthy cause marketing will keep engagement notwithstanding trends
The high costs of health foods- and even higher cost of Simple Mills- can turn people off from the category, and the brand
Promotion emphasizing high quality and superior taste, which is a proven positive based on Amazon customer reviews
Targeting Children
Health Food Industry
Appendix Group 10Simple Mills15
So, how can Simple Mills increase their average store revenue by 2018?
Rebrand Simple Mills to appeal to a younger
demographic
Expand Simple Mills product line to include childhood favorites to
become a family staple
Implement a new promotional effort
through worthy cause marketing
Implementing this new marketing strategy will provide a 38% ROI at the end of 2018
Simple Mills’ target market is growing, but they need to implement a new marketing strategy in order to expand
Appendix Group 10Simple Mills16
Thank you for your time! Happy baking!
Market Information1. Information on Consumers in Gluten Free Market2. Market Size Forecast3. Popularity of Gluten-Free Products4. Innovative Trend in the Breads5. Opportunities in Baking Trends
Gluten-Free Foods6. Why Do We Eat Gluten-Free Foods?7. Frequency of Children’s Attempts to Influence Purchasing Decisions8. Children’s Influence on PurchasesNew Product Profitability
Simple Mills Information9. Additional Product Ideas for Future Launch10. Current Store Locations 11. Current Store Carrier Demographic12. Effectiveness of Marketing Channels13. Grocer Expansion Plan14. Simple Mills Product Information15. New Packaging Cost Analysis
Real-Life Supplements15. Barefoot Wine Sales16. Barefoot Wines Strategy17. Simple Mills in the Chapel Hill Whole Foods18. Justification for Waffle/Pizza Mix Profitability19. Financial Analysis
If you would like any more information concerning the topics above, we’d be happy to share it with you!
Appendix Group 10Simple Mills17
Consumers in this market are buying gluten-free products for more than just intolerance issues
72%
28%
Eating gluten-free for reasons other than intol-
erance
Could potentially be gluten intolerant
Not diagnosed but sure of gluten intolerance
In the process of testing for gluten intolerance
36%
17%
11%
9%
Diagnosed with celiac disease
Not diagnosed with celiac disease
Appendix Group 10Simple Mills18
Market Size ForecastSimple Mills Market
Total Market Size
2011 2205 7,6552012 2588 8,9852013 (est) 3037 10,5442014 (fore) 3421 11,8802015 (fore) 3782 13,1332016 (fore) 4189 14,5442017 (fore) 5097 17,6972018 (fore) 6202 21,533
Simple Mills Market Size
2011 2012 2013 2014 2015 2016 2017 2018Breads 19.5 20.5 23.9 23.9 23.9 23.9 23.9 23.9Desserts 9.3 8.3 7.5 7.5 7.5 7.5 7.5 7.5Total Percentage 0.288 0.288 0.314 0.314 0.314 0.314 0.314 0.314
2017 – 2018 ForecastFood intolerances: gluten-free and free-from food sales in the U.S. 2006-2020Gluten-free and free-from food retail sales in the United States from 2006 to 2020 (in billion U.S. dollars)2006 0.90 2011* 3.80 2015* 10.50 2020* 23.90
Min
tel R
ep
ort
Assumes maintain market share (growth in desserts is more likely)
*Inflation adjusted
Appendix Group 10Simple Mills19
The popularity of gluten-free is rising
An increasing number of non-celiacs will turn to gluten-free products due to their perceived health benefits (no bloating, aids weight loss, better for you)
Source: DataMonitor Report: Consumer and Innovation Trends in Bread and Bakery 2014
Appendix Group 10Simple Mills20
Gluten Free is an innovative trend in the Breads and Baking market
Source: DataMonitor Report: Consumer and Innovation Trends in Bread and Bakery 2014
Appendix Group 10Simple Mills21
Opportunities that come with Bakery trends
Source: DataMonitor Report: Consumer and Innovation Trends in Bread and Bakery 2014
Appendix Group 10Simple Mills23
Statistics about children’s influence on purchasing decisions
According to the 2008 YTV Kids and Tweens Report, kids influence:• Breakfast choices (97% of the time) and lunch choices (95% of the
time).• Where to go for casual family meals (98% of the time) (with 34% of
kids always having a say on the choice of casual restaurant).• Clothing purchases (95% of the time).• Software purchases (76% of the time) and computer purchases (60%
of the time).• Family entertainment choices (98% of the time) and family trips and
excursions (94% of the time). [1]
http://mediasmarts.ca/marketing-consumerism/how-marketers-target-kids
Appendix Group 10Simple Mills24
Frequency of Children’s Attempts to Influence Purchases and % of Mothers’ “Usually” Yielding
Frequency of Requests
Percentage of yielding
Breakfast Cereal 1.59 87%
Snack Foods 1.8 63%
Candy 1.93 42%
Clothing 2.52 37%
Shampoo 3.28 16%
Household cleaner 3.76 2%
1= often 4 = never
Appendix Group 10Simple Mills25
Justification for Waffle and Pizza Dough Profitability Revenue Sale Price (per
bag)$8.99
less Expenses Total Cost (per bag)
($4.57)
200 grams almond flour ($3.66)
½ tsp baking soda ($0.25)
1 tsp cinnamon ($0.16)
2 tbsp coconut flour ($0.34)
½ tsp nutmeg ($0.14)
½ tsp celtic sea salt ($0.02)
= Profit $4.42*Prices based on net weight cost of items online for retail pricing (or, if available, wholesale pricing)*Prices based on current 266g package size
1 2 3 4 5 6 7 8 9 10 11 12 13 140
4
8
12
16
20
68 9
11 1214
17 18 18 19 18 19 18 18
Average Store Sales: (Units Sold / SKU / Store / Month) • Average monthly sale across 14
month period is 15.92 units (16).
• Store counts (50/250/5000) represent limited release, current capacity, and 4 year store goal counts
$4.62 per bag
$1034.88 per store*
$51,700 for 50 stores$258,500 for 250 stores$5,170,000 for 5000 stores
Appendix Group 10Simple Mills26
Additional Simple Mills product additions to consider introducing to families and kids in the market
Cinnamon Roll Mix
Biscuit Dough Mix
Dinner Roll Mix
Whole Wheat Bread Mix
Pita Bread Dough Mix
Tortilla Mix
Appendix Group 10Simple Mills27
Barefoot Wine Sales
Operating Year
Year Sales (cases) Approx. Sales (USD)
1 1986 18,000 648,000
3 1988 60,000 2,160,000
5 1990 80,000 2,880,000
7 1992 95,000 3,420,000
9 1994 120,000 4,320,000
11 1996 160,000 5,760,000
13 1998 200,000 7,200,000
15 2000 235,000 8,460,000
17 2002 350,000 12,600,000
19 2004 570,000 20,520,000
20 2005 Bought by EJ Gallo wines
Appendix Group 10Simple Mills28
• More colorful packaging• Interesting, simple logo
• All brands are the same general colors (dark/white)
• Complicated, non “eye-catching” logo/design
Barefoot Wines strategy: Comparing and contrasting in-store presentations in CVS Pharmacy on Franklin Street
Appendix Group 10Simple Mills29
Chapel Hill Whole Foods: Example of current perception from customer POV of Simple Mills in-store
Appendix Group 10Simple Mills31
Current store carrier demographic at Year 0
Chain Number of stores
Price Point for Simple Mills mixes
Average Units sold / SKU / month / store
Earth Fare 32 $ 8.99 28
Independent 38 $ 8.99 10
Jimbo's 5 $ 9.49 10
Natural Grocers 28 $ 7.99 14
New Seasons 13 $ 9.99 10
Wegmans 75 $ 7.99 10
Whole Foods 84 $ 8.99 30
Grand Total 275 $ 8.67* 18.6*
Appendix Group 10Simple Mills32
Effectiveness of Marketing channels for Simple Mills
PRINT ADVERTISING
Immediate ROI: <3%
CONSUMER EVENTS & TRADESHOWS
Immediate ROI: 7%
PUBLIC RELATIONS
Immediate ROI: >1000%
SOCIAL MEDIA & ONLINE ADS
Immediate ROI: 30%
32
Long-term Value: Uncertain
Appendix Group 10Simple Mills33
Grocer expansion plan 2014 2015 2016 2017-2018
NA
TU
RA
LM
AIN
ST
RE
AM
PR
EM
IUM
500 1,200 2,500 5,000
Sept 2014: 275 stores
Appendix Group 10Simple Mills34
Nutrition facts, pricing, and value prop. of Simple Mills compared to competitors in the gluten-free market
Flour GI* 1 90 90Sweetener GI* 36 65 65
Calories 130 140 100Cholesterol 0g 0g 0gTotal Carb 18g 33g 24gSugars 6g 17g 7gProtein 4g 1g 1gVitamin A 140% 0% 0%Vitamin E 40% 0% 0%
Simple Mills Competitor A Competitor B
Competitor Nutrition Facts Comparison
Table Sugar Tapioca Flour Potato Flour Rice Flour Corn Flour
Guar gum Sodium acid
pyrophosphate Monocalcium
phosphate
Soy Dairy Corn Rice
All Simple Mills products only contain:
Low Glycemic Index
Flours
Completely Natural
IngredientsAllergy Friendly Ingredients
Almond Flour Almonds Coconut Nectar Arrowroot
Powder
Almost all gluten free baked goods contain:
High Glycemic Index Flours
Preservatives and Unnatural Ingredients
Other Allergens
Competitor Pricing Comparison
Simple MillsPrice:$8.99/9.4ozPrice/Ounce: $.95Retail Locations: Whole Foods, Natural Grocers, Amazon, and more
Competitor APrice:$5.99/8ozPrice/Ounce: $.75Retail Locations: Memphis Whole Foods, Amazon
Competitor BPrice :$5.99/14ozPrice/Ounce: $. 43Retail Locations: Unknown
Almond FlourPrice :$11.99/8ozPrice/Ounce: $1.50Retail Locations: Whole Foods (top 5 bestselling product)
Appendix Group 10Simple Mills35
New Kid-Friendly Packaging Cost Analysis is explained through the following metrics:
61 million kids in USA under 14 years old* % stores carrying Simple Mills (# of SM stores/37,459)= # of kids within reach of stores carrying Simple Mills(# of kids within reach of SM stores)/(2.01 kids per home)= # homes with kids under 14 in reach of stores carrying Simple Mills* [(56% women buy gluten free)(13% moms of kids under 14)]= # of moms of kids under 14 years old who buy gluten free and are in reach of our stores*80% yield rate of mom’s whose household purchases are influenced by their kids= # of moms influenced by kids in reach of our stores*90% to account for brand loyalty to competitors= # of moms who are not loyal to competitive brands and might be influences to buy SM*40% of kids who will be drawn to Simple Mills= # of new sales