CONCEPT OF GROCERY BRAND LAUNCH

Strategic goal of agro leader –to enter consumer market

founded in 1994

$1 bln revenue

15.000 employees

40 plants and silos

Razgulay company

Consumer brand was launched in 2004

In 2010 brand covered 5 categories

Grains and instant cereals FlourGranulated and

lump sugar

And increased sales by 5 times

2 400

500900

350

450

Sugar Grain Flour

Annual volumes, 1000 MT

Low price segmentMedium

Extra Margin, Rur /kilo

Markets have different extramargin for branded products

Granulated white sugar

Market is price sensitive, non-branded

for consumers it is important only:

Low priceWhite colorAnd no lumps

Grains

Market is divided into price sensitive and branded

There is differentiation by quality

Flour

Market is divided into price sensitive and branded

Any housewife can go to another store for the brand, which she trusts

There is huge opportunity in consolidation of supplies to retail

14%

73%

Sugar

6%

44%

Flour

22%

79%

Grain

Share of ТОP 3 suppliers

in Russia and USA

There is no pan Russia players in the marketsThere are no common suppliers across the markets

Packaging can be used as advertising media

The right one communicates with the housewife when she holds it

The difference in ordinary and branded film - 10 cents per pack

In sugar we were the first to use package, which stands on a shelf, rather than lies as a pillow

Investments — 10 cents per contact

This 10 cents we took from the film

Reliable and economicalPacking with “tongue” often tear

People anyway pour cereal in the pot

And buyers on top order flour and grain

You do not need to sell sugar

At market price it is placed on the shelves as commodity

without efforts

“Locomotive” strategy

Sugar

Brand awareness

Confidence in the quality

Strategy of the “bridge”

Sugar Grain

Brand awareness

Confidence in the quality

Strategy of the “bridge”

Sugar Grain Flour

Brand awareness

Confidence in the quality

Strategy of the “bridge”

Extra margin for brand,Rur per kilo

Strategy of the “bridge”

Extra margin for brand,Rur per kilo

Sugar Grain Flour

Brand awareness

Confidence in the quality

Sugar Grain Flour

Brand awareness

Confidence in the quality

Strategy of the “bridge”

Extra margin for brand,Rur per kilo

Sugar Grain Flour

Brand awareness

Confidence in the quality

Strategy of the “bridge”

Extra margin for brand,Rur per kilo

Sugar Grain Flour

Brand awareness

Confidence in the quality

Strategy of the “bridge”

Extra margin for brand,Rur per kilo

As communication platform we used all types of retail media

before promo after promo

Sales uplifted by 10 times

For new brand “deep discounts” boosted both sales and awareness

Only complex of actionsdrove to sales result

The key action was that all directorshad volume target on top of their functional KPIs

Lean manufacturing

Logistic optimization

Reposition of the project

Internal communications

Effective process

If you have a problem with the cost –marketing will never help

One operator per one production line

One operator per two production lines

The target was leadership in cost effectiveness

Production processes were optimized

Two men lift bags No power lifting :)

Production Packaging Sales

Initial logistic

Production Packaging and sales

Optimized logistic

2009 2010

Sales uplift, MT

Flour

Sugar

Grain

Sales increase reflected new approach

Develop model

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My conclusions from the case