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Professionals Favorite Meat Snacks The Ideal Complement to Professionals Favorite Cashews Presented By Knauss Snack Food Company.

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Presentation on theme: "Professionals Favorite Meat Snacks The Ideal Complement to Professionals Favorite Cashews Presented By Knauss Snack Food Company."— Presentation transcript:

1 Professionals Favorite Meat Snacks The Ideal Complement to Professionals Favorite Cashews Presented By Knauss Snack Food Company

2 Purpose of the presentation is threefold: 1. 1.To illustrate why Meat Snacks is the ideal category as an extension to the successful launch of Professionals Favorite Cashews To demonstrate why Knauss Snack Food Company should be your supplier and partner in capitalizing on the Professionals Favorite Meat Snacks opportunity To review the key elements of a Corporate Brand Meat Snacks program customized for Advance Auto Parts. Purpose

3 The following agenda has been developed to fulfill this purpose... Meat Snacks Category Overview Reasons for Professionals Favorite Meat Snacks Program Qualifications of Knauss Snack Food Company as Your Partner and Supplier Key Elements of Corporate Brand Meat Snacks Program Customized for Advance Auto Parts Agenda

4 Meat Snacks Category Overview

5 Meat Snack Retail Dollar Sales (millions) Source: Snack Food Association, Information Resources, Inc. (all classes of trade), A.C. Nielsen. Size/Trends The Meat Snacks Category is large ($2.1 billion) and growing... Dollar sales have more than quadrupled in the past ten years – more than doubled since One of the fastest growing segments in the Shelf-Stable Snacks Category. Meat Snacks Category Overview

6 Size/Trends With $2.1 billion in retail sales, Meat Snacks is now the third largest segment in the Salted Snacks Category... Meat Snacks is larger than... Snack Nuts ($1.9 billion) Microwave Popcorn ($1.3 billion) Pretzels ($1.3 billion) Cheese Snacks ($1.1 billion) Meat Snacks is only surpassed in size by Potato Chips ($6 billion) and Tortilla/Tostada Chips ($4.5 billion). Meat Snacks Category Overview

7 Reasons For Category Growth More active, healthier lifestyles have created a growing demand for snacks like beef jerky that are good tasting, nutritious and convenient. The increase in low-fat and carb-crazed dieters (i.e., Atkins Diet, South Beach, Dr. Phil McGraws diet, Zone diet etc.). Retail availability has expanded into all classes of trade. Ongoing introductions of new products and line extensions (new flavors, meat ingredients and forms). Increased category advertising, primarily on the part of GoodMark Foods, Inc. in support of Slim Jim products. Meat Snacks Category Overview

8 Meat Snacks by Outlet Type -% Dollar Share Source: Snack Food Association, Information Resources, Inc. Meat Snack Sales By Outlet Type Meat snacks are sold everywhere – from truck stops to office supply stores to health stores. Convenience Stores represent the primary outlet with a 45.4% share; however, other classes of trade are gaining in importance. Meat Snacks Category Overview

9 Shares by Category Segments According to Mintel (leading supplier of consumer intelligence), Beef Jerky is the largest segment in the Meat Snacks Category with a 44.0% share of dollar sales, followed by Meat Sticks with a 33.5% share. % Total Beef Jerky Dollar Sales Natural Beef Jerky 44.0% Meat Sticks 33.5% All Other 22.5% Source: Mintel – 2002 Sales (all classes of trade) Meat Snacks Category Overview

10 Beef Jerky Segment Trends Based on supermarket trends, the Beef Jerky segment (+14%) has been the driving force behind the categorys growth, because it provides what on-the-go lifestyles are searching for – taste, nutrition (low carbs) and convenience. Meat Sticks and A/O are also growing. Meat Snack Segments – Dollar Sales Vs. Y/A Source: Information Resources, Inc. – 52-Weeks Ending 11/02/03 Meat Snacks Category Overview

11 Shares by Flavor The Original, Teriyaki and Peppered flavors make up 76.1% of total Beef Jerky sales in supermarkets. – –The remaining flavors (e.g., Hickory Smoked, Jalapeño, Sweet and Hot, etc.) comprise the remaining share. % Total Beef Jerky Dollar Sales Peppered 17.5% All Other 33.5% Teriyaki 23.7% Original & Regular 34.9% Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04 Meat Snacks Category Overview

12 Supermarkets – Leading Beef Jerky Brands In the Beef Jerky Segment, four brands comprise almost 90% of total retail sales. OBERTO is the leader with a 42.7% share, with Pemmican a distant second with a 20.5% share. Beef Jerky Leading Brands % Share Source: Information Resources, Inc. – 52-Weeks Ending 11/02/03 Meat Snacks Category Overview

13 Supermarkets – Leading Beef Jerky Brands OBERTOs dominant share is strictly a function of its retail distribution advantage over other beef jerky brands, achieved through its alliance with Frito-Lay... Beef Jerky Leading Brands % ACV Distribution Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04 Meat Snacks Category Overview

14 Major Reasons for Professionals Favorite Meat Snacks

15 Major reasons why Advance Auto parts should institute a Corporate Brand Meat Snacks program, under the Professionals Favorite brand name, include... Category is large and expanding... Growing popularity of high protein/low carb foods will fuel this growth for the long-run. Professionals Favorite Cashews program has been highly successful. The customer profile of Advance Auto Parts mirrors the profile of the heavy user of meat snacks. Provides an effective means for Advance Auto Parts to strengthen the equity of the Professionals Favorite brand program within the large and growing snacks category. Corporate Brand Meat Snacks is growing within the supermarket class of trade - Wal-Mart, Weis Markets, Meijer Supermarkets, ALDI, Giant Eagle, Save-A-Lot and other major grocery store chains have corporate brand programs in place or in progress. Reasons for A Corporate Brand Meat Snacks Program

16 Qualifications of Knauss Snack Food Company

17 1. Three Manufacturing Facilities Knauss Snack Food Company has three manufacturing facilities... – –This is important in the event that there is ever a need for one producing factory to serve as a back-up to another. Martinsville, VA Our new facility in Martinsville, VA is our primary producing factory of Corporate Brand Meat Snacks. – –Dedicated exclusively to Meat Snacks – –Provides necessary capacity to become the premier supplier of Corporate Brand Meat Snacks – –State-of-the-art equipment – –100,000 square feet 200 Knauss Drive Martinsville, VA Quakertown, PA Facilities Other producing factories include our Quakertown facilities: 625 East Broad Street 10 West Paletown Road Quakertown, PA Quakertown, PA 18951

18 We have two shipping locations Knauss Drive Martinsville, VA Hellertown Road Quakertown, PA We have a distribution network in place that ensures that customer orders can be delivered in a timely and cost effective manner with relatively (a) short lead times and (b) small minimum orders. 2. Two Shipping Locations 2. Two Shipping Locations

19 3. Full-Line Meat Snacks Supplier We produce and market a full-line of Meat Snacks under the Bulls brand name. – –Any of our items can be made available for the Professionals Favorite brand name.

20 4. Extensive Corporate Brand Experience After just 1½ years following implementation of our Corporate Brand Meat Snacks program, we now have five major Corporate Brand retail customers, and others in progress...

21 In addition to producing Dried Beef under the Knauss brand name, Knauss Foods has demonstrated success in supplying Corporate Brand Dried Beef to grocery retailers Extensive Corporate Brand Experience

22 We also partner with and supply Corporate Brand Meat Snacks for several well-known manufacturers, including, but not limited to, the following... MARTIN'S POTATO CHIPS 4. Extensive Corporate Brand Experience

23 Knauss Foods also supplies Corporate Brand Dried Beef to manufacturers, including Extensive Corporate Brand Experience

24 Knauss Foods also supplies Corporate Brand Dried Beef to manufacturers, including Extensive Corporate Brand Experience

25 A consumer panel test showed that Knauss Corporate Brand Beef Jerky is as good or better than three leading national brands and a major store brand competitor (Mirab). – –Test conducted by independent testing firm - North Cliff Consultants, Inc., Cincinnati, OH in December, – –Brands tested included Knauss Corporate Brand, Pemmican, Jack Links, Oberto and Mirab Corporate Brand. – –Original flavor tested (top selling flavor in beef jerky category). – –Panel was screened to include only beef jerky consumers. – –Sequential Monadic study design – Knauss Store Brand Beef Jerky tested against each brand (all brands tested blindly). – –Key attributes tested included appearance, overall liking, flavor and texture. – –Panelists required to give an overall preference of Knauss Corporate Brand Beef Jerky versus the other brands on a one-to-one basis. 5. Superior Product Quality

26 * 9-Point Scale – 9 Means Like Extremely, 1 Means Dislike Extremely Consumer Panel Test Results – Knauss Versus Jack Links Knauss Corporate Brand Beef Jerky was significantly preferred over Jack Links. – –Knauss received significantly higher scores on overall liking, flavor and texture – appearance ratings were not significantly different. 5. Superior Product Quality

27 * 9-Point Scale – 9 Means Like Extremely, 1 Means Dislike Extremely Consumer Panel Test Results – Knauss Versus Oberto Knauss Corporate Brand Beef Jerky was significantly preferred over Oberto. –Knauss received significantly higher scores on all attributes - overall liking, appearance, flavor and texture. 5. Superior Product Quality

28 * 9-Point Scale – 9 Means Like Extremely, 1 Means Dislike Extremely Consumer Panel Test Results – Knauss Versus Pemmican Knauss Corporate Brand Beef Jerky was preferred over Pemmican, but the preference was not statistically significant. –Knauss received a significantly higher score on flavor – texture, appearance, and overall liking ratings were not significantly different. 5. Superior Product Quality

29 * 9-Point Scale – 9 Means Like Extremely, 1 Means Dislike Extremely Consumer Panel Test Results – Knauss Versus Mirab Knauss Corporate Brand Beef Jerky was significantly preferred over Mirab Corporate Brand. –Knauss received a significantly higher score on overall liking, appearance and flavor – texture rating not significantly different. 5. Superior Product Quality

30 Value Pricing –Knauss Snack Food Company will provide pricing on Professionals Favorite Meat Snacks that will support retail prices significantly below the leading national brands. –Knauss Snack Food Company will offer Advance Auto Parts a price on Corporate Brand Beef Jerky that will yield a 34 to 50% price differential versus the leading national brands, while providing attractive gross margins. 6. Value Pricing

31 Knauss Snack Food Company offers a menu of merchandising tools to support the introduction and ongoing management of Professionals Favorite Meat Snacks... These tools are designed to: Build awareness and promote trial of Professionals Favorite Meat Snacks. Capitalize on the huge impulse sales potential of Meat Snacks. Maximize the sales and profits of Professionals Favorite Meat Snacks per square foot of store space. 7. Menu of Merchandising Solutions

32 These high impact and space efficient merchandising tools include... Beef Jerky Beef Jerky Pre-Packed Pre-Packed Meat Sticks Pre-Assembled Display Boxes Shipper Pre-Packed Shipper Clip Strips 7. Menu of Merchandising Solutions

33 99% Customer Service Level Providing high quality products and consistently meeting the service requirements of our customers have been at the core of our business since We will partner with Advance Auto Parts in developing a production plan to meet anticipated sales. We have an infrastructure in place to ensure customer orders are delivered in full/on time and accurately invoiced. 8. Best in Class Customer Service

34 Customized Plan for Professionals Favorite Meat Snacks

35 Variety Assortment It is recommended that the Professionals Favorite Meat Snacks line consist of the following varieties: oz. Beef Jerky in the Original, Teriyaki and Peppered Flavors Rationale: The 4 oz. size represents over 90% of total beef jerky sales, while these three flavors represent nearly 80% of total sales oz. Beef Sticks in Original flavor Rationale: Number 1. selling variety of all Meat Snacks (including Beef Jerky) in the supermarket class of trade in terms of unit sales (Number 3. in dollar sales).* Count 5 oz. Original Meat Sticks in a canister Rationale: Generates a higher ring and is the Number 3. selling variety in the Meat Snacks Category in dollar sales (Number 4. in unit sales).* *Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04 Customized Plan

36 Variety Assortment (continued) Other varieties for consideration include: – –4 oz. Sweet Barbecue Beef Jerky – –2 oz. Beef Jerky in Original, Teriyaki, Peppered and Sweet Barbecue flavors – –0.90 oz. Meat Sticks in Mild and Hot n Spicy flavors – –15 count 5 oz. Canister of Meat Sticks in Mild and Hot n Spicy flavors Customized Plan

37 Pricing We are offering the following delivered base prices on Professionals Favorite Meat Snacks... Professionals Favorite Meat Snacks Delivered Base Prices Customized Plan

38 Pricing (continued) These delivered prices can support attractive retail prices for customers of Advanced Auto Parts at attractive profit margins... Professionals Favorite Meat Snacks Proposed Retail Pricing and Profitability Customized Plan

39 Pricing (continued) These delivered prices permit a substantial retail price advantage versus the national brands currently stocked by Advance Auto Parts, with the added benefit of superior product quality... Customized Plan

40 In closing The size, growth and emerging consumer demographic of the Meat Snacks category represents a major growth opportunity for a Professionals Favorite Meat Snacks program. 2. Knauss Snack Food Company is the right supplier to partner with to exploit this opportunity, because of: Our location – we are neighbors. Our excellent product quality and competitive pricing. Our efficient and effective distribution infrastructure. Our menu of merchandising solutions. Our corporate brand marketing expertise. Our strong commitment to become the premier supplier of corporate brand meat snacks. Summary

41 Appendix IRI Retail Sales Scan Data

42 Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04 Meat Snacks IRI Data Three Meat Stick varieties are among the top twenty selling (dollar sales) Meat Snack items... Top Twenty Meat Snack Items Retail Dollar Sales RankVarietyDollar Sales% Change Vs. Year Ago 1OBERTO REGULAR BEEF JERKY PLASTIC PEG BAG 4OZ$16,003, OBERTO HICKORY SMOKED BEEF JERKY RESEALBL PLSTC PG BG 4OZ$11,539, SLIM JIM SPICY CHICKEN AND BEEF DRIED MEAT SNA CK 5OZ$7,627, OBERTO PEPPERED BEEFSTEAK JERKY 4OZ$7,419, SLIM JIM SPICY BEEF JERKY PLASTIC WRAPPED 0.97OZ$6,937, OBERTO TERIYAKI BEEFSTEAK JERKY 4OZ$6,454, SLIM JIM MILD CHICKEN AND BEEF DRIED MEAT SNACK 5OZ$5,987, BRIDGFORD REGULAR BEEF JERKY PLASTIC PEG BAG 4OZ$5,717,797(3.6) 9JACK LINKS REGULAR BEEF JERKY RESEALBL PLSTC PG BG 4OZ$5,673, PEMMICAN HICKORY SMOKED BEEFSTEAK JERKY 4OZ$4,581,781(0.5) 11JACK LINKS TERIYAKI BEEF JERKY RESEALBL PLSTC PG BG 4OZ$4,396, ARMOUR REGULAR BEEF DRIED MEAT SNACK GLASS JAR 4.5OZ$3,949, PEMMICAN TERIYAKI BEEFSTEAK JERKY 4OZ$3,923, PEMMICAN PEPPERED BEEFSTEAK JERKY 4OZ$3,671, JACK LINKS PEPPERED BEEF JERKY PLASTIC PEG BAG 4OZ$3,523, OBERTO BARBECUE BEEFSTEAK JERKY RESEALABLE PEG BAG 4OZ$3,333,306 17ARMOUR REGULAR BEEF DRIED MEAT SNACK 2.25OZ$3,127, OLD WISCONSIN REGULAR BEEF SAUSAGE DRIED MEAT SNACK PLASTIC WRAP 5.6OZ$2,755, LOWREYS REGULAR BEEF JERKY CANISTER 3.7OZ$2,311,454(5.4) 20HORMEL REGULAR BEEF DRIED MEAT SNACK JAR 5OZ$2,299,227(6.0)

43 Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04 Seven Meat Stick varieties rank among the top twenty Meat Snack items in unit sales, with Spicy.97 oz. being first... Top Twenty Meat Snack Items Unit Sales RankVariety Unit Sales% Change Versus Year Ago 1SLIM JIM SPICY BEEF JERKY PLASTIC WRAPPED 0.97OZ7,116, OBERTO REGULAR BEEF JERKY PLASTIC PEG BAG 4OZ2,883, RUSTLERS SPICY CHICKEN AND BEEF DRIED MEAT SNACK 0.64OZ2,627,335(17.08) 4SLIM JIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 5OZ2,320, SLIM JIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 0.28OZ2,178, OBERTO HICKORY SMOKED BEEF JERKY RESEALBL PLSTC PG BG 4OZ2,078, ARMOUR REGULAR BEEF DRIED MEAT SNACK 2.25OZ2,004, SLIM JIM MILD CHICKEN AND BEEF DRIED MEAT SNACK 5OZ1,821, ARMOUR REGULAR BEEF DRIED MEAT SNACK GLASS JAR 4.5OZ1,419, SLIM JIM SMOKED AND SPICY CHICKEN AND BEEF DRIED MEAT SNACK 1.4OZ1,390,998(9.85) 11OBERTO PEPPERED BEEFSTEAK JERKY 4OZ1,340, RUSTLERS REGULAR BEEF JERKY PLASTIC WRAPPED 0.31OZ1,196,425(9.86) 13OBERTO TERIYAKI BEEFSTEAK JERKY 4OZ1,165, JACK LINKS REGULAR BEEF JERKY RESEALBL PLSTC PG BG 4OZ1,115, OLD WISCONSIN REGULAR BEEF SAUSAGE DRIED MEAT SNACK PLASTIC WRAP 5.6OZ1,038, SLIM JIM MILD CHICKEN AND BEEF DRIED MEAT SNACK BOX 1.4OZ987,519(12.52) 17BRIDGFORD REGULAR BEEF JERKY PLASTIC PEG BAG 4OZ986,404(4.35) 18PEMMICAN HICKORY SMOKED BEEFSTEAK JERKY 4OZ915,889(0.16) 19SUPER SLIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 0.64OZ875,563(23.53) 20JACK LINKS TERIYAKI BEEF JERKY RESEALBL PLSTC PG BG 4OZ854, Meat Snacks IRI Data

44 Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04.97 oz Meat Sticks rank sixth among all Meat Snack items in dollar sales rate... This is in spite of an average price per unit of $0.97 versus $2.77 for the average Meat Snack item... Top Twenty Meat Snack Items Dollar Sales Per Point of Wtd. ACV Distribution RankarietyDollar Sales ACV Wtd Dist $ Sales Per Point of ACV Distribution Index to Average Meat Snack Item 1PRIVATE LABEL BRAND REGULAR BEEF JERKY PLASTIC BAG 4OZ$450,6291.4$322, KNAUSS REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 4OZ$555,2041.8$305, PRIVATE LABEL BRAND TERIYAKI BEEF JERKY PLASTIC BAG 4OZ$416,2671.6$265, HABBERSETT REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 3OZ$450,1441.9$232, OBERTO REGULAR BEEF JERKY PLASTIC PEG BAG 4OZ$16,003, $192, SLIM JIM SPICY BEEF JERKY PLASTIC WRAPPED 0.97OZ$6,937, $171, OLD WISCONSIN REGULAR BEEF SAUSAGE DRIED MEAT SNACK PLASTIC WRAP 5.6OZ$2,755, $156, OBERTO TERIYAKI BEEFSTEAK JERKY 4OZ$6,454, $149, OBERTO HICKORY SMOKED BEEF JERKY RESEALBL PLSTC PG BG 4OZ$11,539, $143, KNAUSS REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 3OZ$1,004,0707.2$139, JACK LINKS REGULAR BEEF JERKY RESEALBL PLSTC PG BG 4OZ$5,673, $136, OBERTO PEPPERED BEEFSTEAK JERKY 4OZ$7,419, $132, ARMOUR REGULAR BEEF DRIED MEAT SNACK GLASS JAR 4.5OZ$3,949, $131, BRIDGFORD REGULAR BEEF JERKY PLASTIC PEG BAG 4OZ$5,717, $129, JACK LINKS ORIGINAL BEEF JERKY PLASTIC BAG 8OZ$862,6676.6$129, SLIM JIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 5OZ$7,627, $128, OBERTO ORIGINAL TURKEY JERKY PLASTIC PEG BAG 4OZ$618,0194.9$127, JACK LINKS TERIYAKI BEEF JERKY PLASTIC PEG BAG 8OZ$691,1645.7$120, PEMMICAN TERIYAKI BEEF JERKY PLASTIC BAG 8OZ$1,172,0639.9$118, Meat Snacks IRI Data

45 Source: Information Resources, Inc. – 52-Weeks Ending 11/02/04 RankVarietyUnit Sales Average Price ACV Wtd Dist (%) Annual Unit Sales Per Point of ACV Distribution Index to Average Meat Snack Item 1SLIM JIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 0.28OZ2,178,399$ , RUSTLERS SPICY CHICKEN AND BEEF DRIED MEAT SNACK 0.64OZ2,627,335$ , SLIM JIM SPICY BEEF JERKY PLASTIC WRAPPED 0.97OZ7,116,004$ , RUSTLERS REGULAR BEEF JERKY PLASTIC WRAPPED 0.31OZ1,196,425$ , KNAUSS REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 4OZ221,614$ , HABBERSETT REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 3OZ228,069$ , SUPER SLIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 0.64OZ875,563$ , PRIVATE LABEL BRAND REGULAR BEEF JERKY PLASTIC BAG 4OZ117,660$ , KNAUSS REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 3OZ505,726$ , PRIVATE LABEL BRAND TERIYAKI BEEF JERKY PLASTIC BAG 4OZ108,980$ , OLD WISCONSIN REGULAR BEEF SAUSAGE DRIED MEAT SNACK PLASTIC WRAP 5.6OZ1,038,287$ , ARMOUR REGULAR BEEF DRIED MEAT SNACK 2.25OZ2,004,527$ , SLIM JIM MILD CHICKEN AND BEEF DRIED MEAT SNACK 0.97OZ509,782$ , ARMOUR REGULAR BEEF DRIED MEAT SNACK GLASS JAR 4.5OZ 11,419,822$ , SLIM JIM REGULAR//CHEESE BEEF DRIED MT & CHES SNAK PLASTIC WRAPP 1.5OZ683,226$ , OLD WISCONSIN REGULAR BEEF DRIED MEAT SNACK PLASTIC WRAPPED 2OZ563,931$ , ARMOUR REGULAR BEEF DRIED MEAT SNACK 2.25OZ273,414$ , SLIM JIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 5OZ2,320,298$ , SLIM JIM SMOKED AND SPICY CHICKEN AND BEEF DRIED MEAT SNACK 1.4OZ1,390,998$ , SUPER SLIM SPICY CHICKEN AND BEEF DRIED MEAT SNACK 1.28OZ704,125$ , Eight Meat Stick items fall in the top twenty of all Meat Snack items in terms of unit sales rate... Top Twenty Meat Snack Items Unit Sales Per Point of Wtd. ACV Distribution Meat Snacks IRI Data


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