**please lick responsibly!** - michigan state university ...nama/2008_tequilaberry_pops.pdf ·...
TRANSCRIPT
U N I V E R S I T Y™
MICHIGAN STATE
Presents
**Please Lick Responsibly!**
Executive Summary 2008 National Agri-Marketing Student Competition
TequilaBerry Pops™
1
INTRODUCTION
According to Nielson’s comprehensive study on the alcoholic beverage preferences of the United States Millennial generation, Millennial consumers frequently seek new tastes and are willing to pay a premium.1
The study also revealed that young adults in the Millennial generation, aged 21-30, are looking for fun alternatives to typical alcoholic beverages.
Sighting this growing trend, Anacapa Foods and Montezuma Tequila saw a chance to form a partnership and jump into a new target market. Millennial consumers are especially inclined to flavored alcoholic beverages, with strawberry leading the flavor choice. Margaritas are the number one alcoholic spirit choice across all age brackets and tequila consumption is on the rise. Anacapa and Montezuma are two established firms in the frozen strawberry and tequila industries, respectively. Since less that 1% of all newly launched brands survive, Anacapa and Montezuma have decided to capitalize on their respective strengths and co-brand their newest product, TequilaBerry Pops™.
The first of its kind, TequilaBerry Pops™ is a new, innovative frozen alcoholic popsicle. With TequilaBerry Pops™, Anacapa can make use of current processing technology and expand their outlets for frozen strawberries while Montezuma can gain market share and utilize existing distribution channels.
Anacapa and Montezuma hired Spartan Agri-Marketing to develop the market approach introducing TequilaBerry Pops™ into the alcohol beverage industry and achieve these marketing goals:
• Establish the best new niche outlet for frozen strawberries • Position TequilaBerry Pops™ to increase market share in the saturated alcohol market • Maximize total return on investment for TequilaBerry Pops™
MARKET ANALYSIS Processes & Partnership Anacapa Foods is California’s premier supplier of frozen strawberry products and is an experienced producer and processor. Anacapa’s state-of-the-art processing facility, commitment to quality, food safety, and vertical integration assures food marketers a consistent supply of quality frozen strawberries. Anacapa is a plant breeder, grower, and processor. Anacapa represents the leading independent strawberry growers in California, guaranteeing a consistent year-round supply of quality frozen strawberry products.
Montezuma Tequila is the second largest tequila company in the United States with growing market share. Montezuma is continually trying to increase market share against José Cuervo, the leading tequila company. Montezuma is owned by Barton Brands Ltd, a premier alcohol distributing company operating in both the U.S. and Canada.
Product TequilaBerry Pops™ are a strawberry tequila margarita popsicle packaged to reduce mess and target the fun seeking Millennial generation. TequilaBerry Pops™ will be manufactured using Anacapa’s facilities and will be delivered to clubs through the existing Montezuma distribution channels. These include current Barton Brand distributors such as Southern Wine & Spirits of CA and Glazer's Wholesale Distributors.
Price Anacapa and Montezuma will sell TequilaBerry Pops™ to distributors for $1.75 per popsicle; the recommended retail price is $4. The total cost per good is $0.72 with itemized costs of strawberries $0.28, tequila $0.30, sugar $0.03, water $0.01, container $0.06 and royalty cost of package (J & J Foods) $0.04.
Place/Market Size & Location Alcohol consumption produces $155 billion of receipts in the United States.2
Anacapa and Montezuma will target clubs throughout the coastal and southern United States to capitalize on the high density of Millennials in these regions who are looking for a fun, new, innovative alcoholic beverage. These areas also attract consumers in this age group who are increasingly inclined to travel to tropical destinations along the warmer U.S. coastlines.
Anacapa and Montezuma will market TequilaBerry Pops™ through existing clubs in the distribution channel. Targeted areas will occur by region. Spartan Agri-Marketing developed the targeted regions based upon United States census data related to number of clubs and number of Millennial residents and tourists. Location of production, company headquarters, and distributors also were taken into consideration when developing the regional rollout. Table 1 shows a breakdown of the three-year product rollout, including states, number of clubs and number of targeted consumers. 1 The Nielson Company 2 USDA Economic Research Service
TequilaBerry Pops™
2
Table 1: Regional Profiles Year Region States Clubs (#) Targeted Consumers
Age 21-30 (#) One Western CA, NV, AZ 67,754 6,917,983 Two Central NM, TX, OK, AR, LA, MS, AL, TN 100,348 7,435,305 Three Eastern FL, GA, SC, NC, VA 122,371 8,993,405
Trends/Key Factors Market research conducted by Spartan Agri-Marketing has identified the following key trends and factors:
• Strawberry consumption is growing faster than any other fruit3
• U.S. tequila consumption rose 38% between 2001 and 2005 and is expected to rise 45% from 2005 to 2010
4
• California is the largest domestically grown strawberry producer and accounts for approximately 87% of the United States fresh and frozen strawberry production
• Strawberries are in the top five most frequently consumed fruits and are rated as consumers’ most favorite
3
3 Customer Profile Clubs: Anacapa and Montezuma plan to primarily market TequilaBerry Pops™ to clubs throughout the target market regions. The Millennials, who marketers are labeling as the largest consumer group in U.S. history, frequent clubs to discover new brands of alcoholic beverages. Targeted clubs will be those that attract high concentrations of 21-30 year olds through an exciting and “hip” atmosphere thus providing the ideal environment to market TequilaBerry Pops™. These clubs are located in cities with high populations of the targeted demographic and/or high influxes of this tourist age group. Tourists will carry their newly acquired taste back to their home region thus increasing the potential for future expansion. During the first three years of business, almost 290,000 clubs will be targeted in 16 states.
Millennial Consumers: The Millennial customer is the final consumer of TequilaBerry Pops™. Compared to Gen X-ers and Baby Boomers, Millennials are more inclined to consume spirits with their friends, in a bar or nightclub. They are the most enthusiastic age group in learning about spirits5. The Millennials’ desire for variety is reflected in their preference for a wide range of spirits. Millennials are the most inclined generation to socialize and they choose a more expensive drink than older consumers. They like spirits to be “fun,” “modern” and “popular”, whereas Baby Boomers are more likely to perceive spirits as “relaxing” and “suiting their lifestyle.”5
Millennial consumers are particularly inclined to follow beach volleyball events and enjoy the country music sensation, including music by Carrie Underwood. Spartan Agri-Marketing will target approximately 23 million Millennial consumers throughout the designated regions.
Club Owners, Bartenders, Waiters and Waitresses: Spartan Agri-Marketing recognizes club owners, bartenders, waiters and waitresses to be key influencers. They are important at the point of sale. Their role will be critical in consumers’ decision to purchase TequilaBerry Pops™. To encourage selling, a vendor campaign will provide posters and table displays to help assist in point of sale promotion. Waiters, waitresses, and bar tenders will be encouraged to promote TequilaBerry Pops™ by being given flashing pins, hats, and other specialty items to assist in selling tactics.
Competitive Analysis Since TequilaBerry Pops™ are a new product on the alcohol market and the first alcoholic popsicle, there are no direct competitors. Nevertheless, there are many indirect competitors that hold significant market share in alcoholic beverage sales. These include any other frozen drinks (e.g. margaritas or daiquiris), tequila served on its own, spirits, beer, or wine served in bar establishments. Since TequilaBerry Pops™ are a tequila-based product, competition is more closely linked in the tequila industry. Competition is highest among the top three tequila producers in the U.S. who hold 83 percent of the market share. Jose Cuervo holds 44%, Montezuma 27%, and 1800 Reserva accounts for 12%. TequilaBerry Pops™ do not contain the amount of alcohol that other drinks often do, but the goal of the consumer is not to become inebriated, but to have a good time and socialize. Over 80% of consumers say they consume 1-2 alcohol beverage drinks when they are in clubs or restaurants.6
TequilaBerry Pops™ offer a new fun way to socialize with friends and associates. Table 2 highlights the SWOT Analysis of this new product.
3 California Strawberry Commission 5 The Nielson Company 4 Vinexpo’s December 2006 International Wine and Spirit Record 6 Nightclub & Bar Magazine
TequilaBerry Pops™
3
Table 2: SWOT Analysis Strengths:
• Utilizes frozen strawberries in a unique way • Extends shelf life of a fruit product • Co-brands product by two recognized firms • Uses existing distribution and processing infrastructure
Weaknesses: • New product in a saturated market • Resistance to a frozen product in bars
Opportunities: • Strawberry is the highest chosen flavor in the sweet
alcohol industry • Large percentage of target market are early adopters • Consumer demand for new alcoholic products is rising
Threats: • Potential strawberry crop failure • Unforeseen competitors entering the market • Reliance on imported tequila with changing
trade regulations
BUSINESS PROPOSITION
Key Planning Assumptions Key planning assumptions for the TequilaBerry Pops™ marketing plan include:
• Fresh fruits will continue to be used to create and design new sophisticated and fun drinks7
• Demand for high-end premium tequila products will continue
8
• Millennials are more likely to drink unique alcoholic drinks
9
Positioning Statement
TequilaBerry Pops™ is a new co-branded product targeting Millennials that will provide an outlet for frozen strawberries and increase market share in a saturated alcohol market.
Sales Objectives/Goals Spartan Agri-Marketing research confirms TequilaBerry Pops™ have a large potential market. TequilaBerry Pops™ will be working to obtain a 1.34% market share of the U.S. tequila market, 0.08% of the total U.S. alcohol industry, and 0.13% of the targeted regions. Tables 3 and 4 provide complete information regarding market potential and projected sales.
Table 3: Total Market Potential Region Potential Number of
Consumers Potential Number of
Retailers (Bars) Potential Individual
Product Sales Potential Gross Sales
Western 6,917,983 67,754 46,488,846 $81,355,480 Central 7,435,305 100,348 49,965,250 $87,439,187 Eastern 8,993,405 122,371 60,435,682 $105,762,442
Table 4: Total Projected Sales Projected Individual
Product Sales Projected Gross Sales Projected Number of Retailers
Year 1 Western Region 11,622,211 $20,388,869 10,163 Total 11,622,211 $20,388,869 10,163 Year 2 Western Region 26,149,976 $45,762,458 16,939 Central Region 18,736,969 $32,789,695 15,052 Total 44,886,945 $78,552,153 31,991 Year 3 Western Region 46,488,846 $81,355,480 21,681 Central Region 37,473,937 $65,579,389 25,087 Eastern Region 30,217,841 $52,881,221 18,356 Total 114,180,624 $199,816,090 65,124
7 Distilled Spirits Council 9 Hotel Resorts and Casino Food and Beverage Operations 8 Publico Negocios
TequilaBerry Pops™
4
ACTION PLAN
Promotions A combination of traditional and non-traditional advertising techniques will be utilized to raise consumer interest in TequilaBerry Pops™. Promotions will work to give this product a brand personality appealing to the 21-30 year old target market. This Millennial market consists of fast-paced, tech savvy individuals who require innovative and exciting forms of advertisement. Research indicates Millennials commonly spend more time than any other age demographic online. Anacapa and Montezuma will take advantage of this fact and spend a significant portion of time and money on the TequilaBerry Pops™ website, online advertisements, and various virtual marketing tools. To meet media objectives, print media, event sponsorships, and iPod and television advertising will be combined with the web-based promotions. A direct response by consumers in the form of product purchase is expected after exposure to these promotional messages. Spartan Agri-Marketing encourages a promotional strategy that will occur in three phases as outlined in Table 5 with a respective promotional budget in Table 6.
Table 5: Promotional Strategy
Phase Goal Technique Pre-Product Launch
Two months prior to TequilaBerry Pops™ market availability
Raise consumer interest • TequilaBerry Pops™ website • Online commercials
o On websites such as Myspace.com and Youtube.com
• Online videos • Endorsement by Carrie Underwood
Product Launch Start of product availability
Expansion of Pre-Product Launch campaign to continue consumer awareness and interest
• TequilaBerry Pops™ Paint the Town Red release event at best rated singles bar in Los Angeles, Blue 32 Hermosa Beach
• On-premise displays • National beach volleyball event sponsorships • T-shirt give-a-ways • Continuation of web marketing • Continuation of endorsement
Product Growth Continuation of product availability through Year 3
Maintenance of product promotions
• Professional beach volleyball team sponsorship • Host VIP tent at national beach volleyball tournament • Country music promotional events • iPod and television commercials • On-premise displays • Continuation of web marketing • Continuation of endorsement
Table 6: Promotional Budget Tactic Year 1 Year 2 Year 3
Paint the Town Red Event $200,000 Web Media $4,400,000 $6,200,000 $7,500,000 Television Advertising $2,600,000 $3,600,000 $4,400,000 Public Relations $1,500,000 $2,250,000 $3,500,000 Print Media $1,000,000 $1,600,000 $1,900,000 Giveaways (T-shirts, etc.) $1,200,000 $2,000,000 $3,000,000 Carrie Underwood Endorsement $300,000 $325,000 $350,000 Web Site Publishing $20,000 $4,000 $4,000 Total $ 11,220,000 $ 15,979,000 $ 20,654,000
FINANCIAL ANALYSIS
Cost Benefits The budget for TequilaBerry Pops™ reflects all outgoing and incoming cash flow as outlined in Table 7.
Carrie Underwood
TequilaBerry Pops™
5
Table 7: Operating Statement Year 1 Year 2 Year 3
Gross Sales (Table 4) $20,338,869 $78,552,153 $199,816,090 Breakage $610,166 $1,963,804 $4,495,862 Net Sales $19,728,703 $76,588,349 $195,320,228 Cost of Goods Sold $8,367,992 $32,318,600 $82,210,049 Gross Margin $11,360,711 $43,257,148 $113,110,179 Total Expenses
Administrative Salaries Promotional Expense Sales Representative (portion of salary) Product Research/Monitoring
$26,470,000 $250,000
$11,220,000 $1,000,000
$14,000,000
$18,829,000 $350,000
$15,979,000 $2,200,000
$300,000
$24,354,000 $400,000
$20,654,000 $3,000,000
$300,000 Net Profit Before Taxes ($15,109,289) $25,440,749 $88,756,179 Return on Investment (43.37%) 49.74% 83.29% Return on Marketing (134.66%) 159.21% 429.73%
MONITORING, MEASUREMENT & CONTINGENCY
Table 8 outlines strategies to monitor and handle objective situations of TequilaBerry Pops™ as market share grows.
Table 8: Monitoring and Measurement Objective Monitoring Method How to Handle Situation
Above: Below: Market Penetration
Have we reached projected annual market share goals?
Quarterly financial reports
Reconsider future penetration goals; consider expanding into other fruit flavors
Acquire customers by allowing initial trial
75% Product Brand Recognition
How recognizable is our product?
Focus groups, online surveys, club surveys
Expand target market to include a larger range of people
Reallocate marketing dollars based on effectiveness of strategy
Profitability
Are we making full profits?
Evaluate weekly financial statements
Reinvest in company Look at entire supply chain and find economical changes in the cost structure
100% Customer Satisfaction
Are current customers happy with the product?
Online surveys and club surveys
Evaluate customer interest in new flavors
Evaluate problem areas and adjust accordingly.
Sales Levels
Have we reached projected sales goals?
Monthly sales reports in conjunction with annual goals
Continue to ensure supply chain has enough product
Send sales representatives to low sales areas and evaluate effects of the product elasticity of demand
Contingency Plan Spartan Agri-Marketing has developed the following contingency strategies for continuing TequilaBerry Pops™ growth:
• Product sales strategy: After a successful on-premise-consumption launch, pushing the product in off-premise retail outlets as an item consumers can take home, freeze, and consume will increase sales.
• Expand the geographic target market: After the three year product roll-out, current market trends will drive the spreading of the product to the remaining states and potentially internationally.
• Expansion of factory manufacturing equipment: With a projected long term product sales expansion, ultimately the creation of additional production facilities throughout the U.S. is expected.
CONCLUSION
TequilaBerry Pops™ is an innovative new co-branded product. Spartan Agri-Marketing’s strategic marketing strategies will attract a consistent following from the Millennial generation. Implementation of this marketing plan results in a new niche outlet for Anacapa frozen strawberries, an increase to a 1.34% market share in the U.S. tequila market for Montezuma and an 84% return on investment or 430% return on marketing investment in Year 3.
Media Kit Table of Contents
Category Name Page Number Banner Advertisements…………………………… 8 Aditorial Advertisements…………………………. 9 Advertisements………………..………………….. 10 Product Launch…………………..……………….. 11 Giveaways………………………………………….. 12 Top Spike Award………………………………….. 13 Website……………………………………………… 14 Club Owner Survey……………………………….. 15 Bartender Survey…………………………………. 16 News Release……………………………………… 17 Backgrounder……………………………………... 18 Release Information……..……………………….. 19 Itemized Cost Page……………………………….. 20
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Banner Advertisements
Banner advertisements will be placed on various websites, such as MySpace, YouTube, and Facebook.com
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Aditorial
Ten years ago next month, the Indianapolis Colts selected quarterback Peyton Manning first overall in the NFL draft,
bypassing Washington State quarterback Ryan Leaf and almost single-handedly changed the course of a franchise that had posted just two
playoff seasons in the previous decade.
Before Manning arrived, the Colts had gone 20 consecutive years without a 10-win season and had made the post-season just
three times in that span. Since taking Manning, Indianapolis has been a playoff team eight times in 10 years, with six division titles, a
Super Bowl championship, and an average of 10.5 wins per regular season -- ranking second in the NFL behind New England's 10.8 since the
start of 1998. But it rarely happens, of course, as the teams who selected Tim Couch, Courtney
Brown, Michael Vick, David Carr, Carson Palmer and Alex Smith can readily attest. Peyton's little brother, Eli Manning, this year
became just the second overall No. 1 pick to win (or even reach) a Super Bowl in the past
decade. For all we know, it's just a Manning thing that the rest of the league wouldn't understand.
Tara Oeschger—Sports Writer
Sports Illustrated Picks of 2009 Draft's bottom-dwellers cannot choose their destiny
TequilaBerry Pops™ So hot they are melting fast! Club hoppers suddenly have something to get excited about. TequilaBerry Pops™ have hit the nightlife scene in full-force. This exciting new product is a strawberry margarita popsicle with a taste of tequila infused into every lick. The fresh strawberry taste combined with the finest tequila flavor will leave customers
wanting another. These are for the young at heart, but at the age of legal drinking enjoyment. Clubs are stocked up and ready to serve. If you have enough adventure left in you...head out tonight for the coolest new product at your local bar: TequilaBerry Pops™. Hurry! This product is so hot its melting fast! But please, always remember...lick responsibly!
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Sports Illustrated
Advertisements
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Product Launch
TequilaBerry Pops™ will be kicking off the product launch at Blue 32 Hermosa Beach, the hottest singles club in Los Angeles, California. Product endorser, Carrie Underwood, will be starting the evening by giving a performance and signing autographs.
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Giveaways
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Top Spike Award
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See what all of the clubs are
raving about...try one to-
night!
Website
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Club Owner Survey 1. Please indicate your gender. 2. What is your age?
_______ years old
3. How long have you been in the club operations business?
_______ years
4. What is the name of the club you own/operate?
Name: ______________________ City Location: _______________________
5. How many patrons of legal drinking age does your club attract in an average week?
_______ people
6. Of your patrons, what percentage are females?
-25% -50% -75% -100%
7. Of your patrons, what percentage falls into the 21-30 year age bracket?
-25% -50% -75% -100%
8. Do you currently sell the TequilaBerry Pops™ product?
(if yes, please continue to the next question, if no, why not?)
____________________________________________________________________________________
9. How many popsicles do you sell on average per week?
________ popsicles
10. What percentage of TequilaBerry Pops™ consumers are female at your club?
-25% -50% -75% -100%
11. Would you be likely to sell more popsicles if you had a variety of flavors?
12. What do your patrons say about TequilaBerry Pops™? (please be specific)
____________________________________________________________________________________
____________________________________________________________________________________
13. Does your club have TequilaBerry Pops™ promotional materials in its facility?
(If yes, how effective do you feel these advertisements are?)
Not at all
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Bartender Survey 1. Please indicate your gender. 2. What is your age?
_______ years old
3. What is the name of the club you work at?
Name: ______________________ City Location: _______________________
4. How long have you been employed at this club?
_______ years
5. What beverage do you sell most frequently?
6. Are you familiar with the TequilaBerry Pops™ product?
7. Of your patrons, what percentage inquire about TequilaBerry Pops™?
-25% -50% -75% -100%
8. Of those inquiries, what percentage are females?
-25% -50% -75% -100%
9. What are your patrons’ typical responses after purchasing a TequilaBerry Pop™ ?
10. In your opinion what could be done to improve the TequilaBerry Pops™ product? (please be specific)
____________________________________________________________________________________
____________________________________________________________________________________
11. How do you rank TequilaBerry Pops™ promotions relative to Jose Cuervo and 1800 Reserva?
Very Poor Very Good
12. What do your patrons say about TequilaBerry Pops™? (please be specific)
____________________________________________________________________________________
____________________________________________________________________________________
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News Release
Spartan Agri-Marketing
Michigan State University
East Lansing, MI
517-333-1212
FOR IMMEDIATE RELEASE FOR MORE INFORMATION, CONTACT:
Lisa Jones
Director of Media Relations
555.333.1234
Carrie Underwood to help launch TequilaBerry Pops™ at “Paint the Town Red”
Chart topping country star and cross-over artist, Carrie Underwood, will be
one of the many guests at the “Paint the Town Red” Release Event for TequilaBerry
Pops™, a new strawberry margarita popsicle.
“I heard rumors of a new strawberry tequila product. I checked it out after a
show in Las Vegas,” says Underwood, “I was impressed with the idea and thought it
sounded fun. I decided I wanted to be a part of the promotions.”
The “Paint the Town Red” Release Event will occur on _______, ______ at Los Angeles's hottest
singles bar, Blue 32 Hermosa Beach. T-shirts, hats, volleyballs, Frisbees and other promotional items will be
given away starting at 7:00 p.m. and will continue throughout the night. The bar will be offering no cover
charge to the first thirty-two people to arrive to the event.
“We are excited about all of the festivities that will be taking place throughout the night,” says bar
owner Ben Barkow, “Carrie Underwood will be performing at 7:30 p.m. and be available all night for pictures
and autographs. She will be sure to put on a great show, and be of high interest to our male patrons.”
The “Paint the Town Red” Release Event should attract a large crowd and be the perfect event for the
release of TequilaBerry Pops™.
###
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Backgrounder
Spartan Agri-Marketing
Michigan State University
East Lansing, MI
517-333-1212
FOR IMMEDIATE RELEASE FOR MORE INFORMATION, CONTACT:
Lisa Jones
Director of Media Relations
555.333.1234
TequilaBerry Pops™
TequilaBerry Pops™ are a new strawberry margarita popsicle with a taste of tequila already frozen into
the product. The product has been in development for the past several years by Anacapa Foods and Montezuma
Tequila. The two companies saw a trend in the market that indicated that their target market, the Millennial
generation, was a demographic group that seeks new alcohol tastes and exciting means for its consumption.
They are also willing to pay a premium price for such products.
Anacapa Foods will benefit from the partnership because they will have a new niche outlet for their
frozen strawberries. Montezuma Tequila has the alcohol blending expertise to help make TequilaBerry Pops™
into a product that satisfies consumers. By teaming with Anacapa Foods, Montezuma will be able to increase its
market share in the alcohol beverage industry.
####
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Release Information
Spartan Agri-Marketing
Michigan State University
East Lansing, MI
517-333-1212
FOR IMMEDIATE RELEASE FOR MORE INFORMATION, CONTACT:
Lisa Jones
Director of Media Relations
555.333.1234
TequilaBerry Pops™ set to enter the consumer market
What: TequilaBerry Pops™ are an exciting new alcohol product. They are a
strawberry margarita popsicle with a taste of tequila to make this product
strictly for consumers 21 years of age or older.
Who: Anacapa Foods and Montezuma Tequila have joined strawberry expertise with
margarita perfection to release TequilaBerry Pops™.
Where: Blue 32 Hermosa Beach, Los Angeles, California
When: Released at 7:00 p.m.
Why: The Millennial demographic is looking for new exciting alcohol products
that combine great fun and excellent flavor. Los Angeles, California, is
known for its trend setting, youthful population making it the perfect location
for the product release.
###
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Itemized Costs Anacapa Foods and Montezuma Tequila will sell TequilaBerry Pops™ to distributors for
$1.75 per popsicle; the recommended retail price is $4.
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Strawberries: $0.28
Sugar: $0.03
Water: $0.01
Container: $0.06
Royalty Cost of Packaging : $0.04
Total Cost: $.72
Tequila: $0.30