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3/20/07 The Program Introducing: Cereal Toppers® Retailer BenefitsConsumer AppealsAbout Cereal Toppers FMI 2005 Retailer Choice Award.

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Presentation on theme: "3/20/07 The Program Introducing: Cereal Toppers® Retailer BenefitsConsumer AppealsAbout Cereal Toppers FMI 2005 Retailer Choice Award."— Presentation transcript:

1 3/20/07 The Program Introducing: Cereal Toppers® Retailer BenefitsConsumer AppealsAbout Cereal Toppers FMI 2005 Retailer Choice Award

2 3/20/07 100% NATURAL FREEZE-DRIED FRUIT & FRUIT BLENDS What are Cereal Toppers? The ProgramRetailer BenefitsConsumer Appeals About Cereal Toppers StrawberriesApples & Raspberries Bananas, Blueberries & Raspberries Bananas & Strawberries

3 3/20/07 on The Food Channel There’s few tastes beating cold milk and cereal But here’s something that can top it. They’re Cereal Toppers, bite size pieces of fruit that are very convenient. You have instant fruit that’s sliced and ready … no hassles, no preparation time. These easy eats are simply freeze dried fruit, which are not only good on the go, but good on the body. These toppers come in six fruity flavors, such as banana blueberry raspberry and apples and raspberries, but it’s the sometimes elusive strawberry that’s the biggest seller. It’s a process that takes a full 18 hours. And it’s all done naturally. Your standard dry fruit typically has a preservative in it, of sulfides or other type of preservatives. # 1 show on Food Channel Network The ProgramRetailer BenefitsConsumer Appeals About Cereal Toppers

4 3/20/07 on The Food Channel # 1 show on Food Channel Network The ProgramRetailer BenefitsConsumer Appeals About Cereal Toppers Internet connection required Windows Media Player required Download (14MB) can take a few minutes on a high speed connection To view the Unwrapped video, click the TV: To skip the video and go to the next page of the presentation, click here: Skip Ahead

5 3/20/07 About Cereal Toppers For the Consumer: The Appeals of Cereal Toppers The ProgramRetailer Benefits Consumer Appeals

6 3/20/07 Freeze-Dried Fruit-In-Cereal Has Proven Successful With Consumers Cereals with freeze dried fruits were the fastest growing items in the cereal aisle …what happened next… But that didn’t grow the cereal category. It just traded shares, spread across more SKUs. Consumers apparently liked the idea All the major cereal makers liked the idea, too, and spread it across a lot of line extensions About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals Growth appears to have peaked at about 5% market share

7 3/20/07 Barriers to Further Growth Freeze-dried fruit in cereals declined after their initial trial period…why? Our experience with consumers reveals dissatisfactions with: –Sugar –Quantity & Value –Quality –Versatility About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

8 3/20/07 Fruit-In-The-Box Cereals Are Not for the Sugar-Conscious Consumer Every cereal with freeze-dried fruit also comes with something else: Sugar (lots of it) Corn Syrup Plus other ingredients health conscious consumers avoid: Salt Wheat Coconut oil Hydrogenated oil Artificial color Ingredients labels from fruit-in-cereal products PROBLEM: About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

9 3/20/07 Because of Sugar, Fruit-In-The-Box Cereals Never Addressed Most of the Market 5% SUGAR They don’t bring these fruit benefits to the other 95% of the cereal market …they don’t bring these fruit benefits to the 2/3rds of the market that prefers lower sugar products These cereals all have added sugar and corn syrup (to keep the fruit from staining the cereal) About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

10 3/20/07 Many Consumers Just Don’t Want Sugar The cold cereal market, segmented by sugar content, which roughly align to their target markets Segment Sugar Weight as % of Total WeightTarget market Low sugar0% to 20.3%Adults Medium sugar21.6% to 33.9%Historically to kids High sugar26.4% to 55.6%Kids/teens Up to age 44, equal numbers of consumers say they consume high, medium and low sugar cold cereals In recent years, schools, parents and even students are showing a backlash against sugar and high fructose corn syrup in children’s diets. The “obesity epidemic” is a major issue with broad impacts…and is unlikely to go away soon Above age 44, consumption skews dramatically toward the low-sugar segments. About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

11 3/20/07 About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals The Diabetic Market Segment Is Also Getting a Lot of Attention

12 3/20/07 Cereal Toppers Has No Added Sugar Low calories No fats Natural fiber Vitamin C Short, natural, simple, understandable ingredients list No added sugar or corn syrup No additives, no preservatives About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

13 3/20/07 Barriers to Further Growth Freeze-dried fruit in cereals declined after their initial trial period…why? Our research with consumers suggests dissatisfactions with: –Sugar –Quantity & Value –Quality –Versatility About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

14 3/20/07 A Problem with Fruit-In-Cereal: Quantity and Value Perception “My son picks out all the fruit at the top of the box of cereal, so there’s almost none left for me” “Fruit in the cereal is great, but they don’t give you very much” –consumer to Cereal Toppers Can’t deliver fruit in every bowl, from the top to the bottom of the box PROBLEM: Not enough fruit 13 oz. (98%) cereal 0.3 oz. (2%) fruit About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

15 3/20/07 Quantity and Value Perception = ++ SOLUTION: One bag of Cereal Toppers equals the fruit in three boxes of cereal freeze-dried fruit Add as much or as little as they like Every bowl is their own “right” mix All the way to the bottom of the cereal box, so no disappointments and no “plain” leftovers to delay the next purchase of cereal About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

16 3/20/07 Quantity and Value Perception The retail bag delivers 2 cups (1 pint) of fruit = Removing waste and water leaves 10% of the fresh weight equivalent…but has all the fruit as the fresh weight equivalent…only the stems, the peels, the bruised fruit and the rotten fruit (and the water) have been removed === = 11 oz. of fresh strawberries produce 1 oz. of stemmed, sliced, freeze-dried About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

17 3/20/07 Barriers to Further Growth Freeze-dried fruit in cereals declined after their initial trial period…why? Our research with consumers suggests dissatisfactions with: –Sugar –Quantity & Value –Quality –Versatility About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

18 3/20/07 Quality and Shelf Life Resealable zip lock bag 5-layer foil walls After opening (resealed): stays crisp 2 to 4 weeks Bag not resealable After opening: stays crisp 1 day at most…even less with humidity PROBLEM: Goes soggy The result? Chewy, gummy fruit that seems less than fresh Cereal doesn’t get consumed as quickly…doesn’t get repurchased as often SOLUTION: resealable bag (Before opening: 2 to 4 years) About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

19 3/20/07 Barriers to Further Growth Freeze-dried fruit in cereals declined after their initial trial period…why? Our research with consumers suggests dissatisfactions with: –Sugar –Quantity & Value –Quality –Versatility About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

20 3/20/07 Only Cereal Toppers Gives Consumers a Choice The only way consumers can get the simple, natural ingredients they insist on—with no added sugar or corn syrup—is to buy their favorite cereal and add Cereal Toppers Arrowhead Shredded Wheat += Post Grape Nuts += About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

21 3/20/07 HOW DO OTHERS SEE CEREAL TOPPERS? About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

22 3/20/07 What Consumers Say About Cereal Toppers They are delicious! Thank you for making something that tastes great and is also good for you! »Joanne H My grandsons choose to eat them with cereal as an after school snack instead of having candy or cookies »Sherry G I put it on hot cereal and have to say it was great. I tried them right out of the package. Great also. »Joe B My two small children LOVE them. »Christy H My husband also enjoys putting your fruits in his cereals which do not come with fruit. »Kimberly S im a picky picky little girl. i hardly eat fruit but my mom encouraged me to try your cereal toppers and so i did and they were so good i thought i died and went to heaven. »shawnee It was all I could do not to down the entire bag on my own. Fortunately, they’re healthy enough that I could do it and not feel guilty! »Elizabeth G My mom and I love your strawberries. Breakfast is boring without your fruit. »Susan P I LOVE fruit in my cereal, but fresh always goes bad before I can use it. I think this is a terrific product, that I plan to keep on hand from now on. »Leah H From s to Cereal Toppers About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

23 3/20/07 What Food Editors Say About Cereal Toppers “Give your body the nutrition it’s been missing” --Runner’s World “A healthy kick” --Good Housekeeping Instant Fruit Give your cornflakes a healthy kick: Add Cereal Toppers from Field Fresh Farms. These freeze- dried fruits plump up to almost- fresh form when splashed with milk. And dry, they’re a good crunchy snack. Choose from sliced strawberries and four kinds of mixes. About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

24 3/20/07 What Food Editors Say About Cereal Toppers Freeze Dried Fruit Cereal Toppers has bagged some of your child’s favorite fruits, like strawberries, raspberries, blueberries, and bananas. These freeze-dried morsels are perfect for topping cereals, yogurt, salads, and smoothies—and they’re tasty enough to eat right out of the resealable bag. They’re available as supermarkets and discount super stores in 5.5-ounce bas for about $6 or 2-ounce bags for about $4. For more information, go to cerealtoppers.com “bagged some of your child’s favorite fruits” --Parents Magazine MSNBC Supermarket Guru Product Hit/Miss “Hit Product” “Like magic… returns to a natural juicy state” About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

25 3/20/07 What Food Authorities Say About Cereal Toppers “Right Stuff” --Center for Science in the Public Interest About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

26 3/20/07 What Retailers Say: FMI Retailer Choice Award About Cereal ToppersThe ProgramRetailer Benefits Consumer Appeals

27 3/20/07 About Cereal ToppersConsumer Appeals For the Retailer: The Benefits of Cereal Toppers The Program Retailer Benefits

28 3/20/07 The Situation Today Cereal category is mature and stable –Add a SKU, subtract a SKU…it won’t change the size of the category –Consumers will just trade brands SKU glut has attempted to deliver consumer choice and variety… which doesn’t help the retailer Retailers want strategies and products that multiply the power of shelf space, rather than just add SKUs that only trade market share About Cereal ToppersConsumer AppealsThe Program Retailer Benefits Cereal Category $ Size Trading Shares: adding or subtracting a few SKUs doesn’t grow or shrink the category Cereal SKU

29 3/20/07 Another Approach: a “Toppings” Or “Additive” Strategy More variety for consumers, but fewer SKUs for the retailer Entirely incremental business…no share trading Increases shelf space available to highest volume cereals…to reduce out-of-stocks Potentially: increases consumption and re- purchase rates for cereals as a result of a better flavor experience, particularly for low-sugar brands About Cereal ToppersConsumer AppealsThe Program Retailer Benefits which means

30 3/20/07 += Don’t want sugar and corn syrup Want more flavor in their low sugar cereals Want fruit that’s fast, convenient and available all the time…never spoils Don’t want to switch cereal brands to get real fruit, real fast Want fruit in every bowl, as much or as little as they like Cereal Toppers and cereal…a lot like ketchup and hamburger: Sells more ketchup Sells more hamburger because of a better hamburger “experience” += Sells more Cereal Toppers Sells more cereal because of a better cereal “experience” Cereal Toppers can sell more cereal by meeting the desires of consumers who: About Cereal ToppersConsumer AppealsThe Program Retailer Benefits

31 3/20/07 One Industry Expert’s Take on “Additive” Strategies built their businesses as parasites—the good kind! lets you customize any cereal you wish make it your own About Cereal ToppersConsumer AppealsThe Program Retailer Benefits

32 3/20/07 Dairy Snacks Consumers tell us about new uses they’re discovering: Topping for yogurt and ice cream Homemade ice cream ingredient Baking ingredient, especially for pancakes and waffles Quick, healthy snack for lunchbox, hiking and biking Ingredient for smoothies and protein shakes A surprising salad topping…crunchy real fruit instead of starchy oily croutons Cereal Toppers builds transactions throughout the store By creating new uses, and usage combinations, Cereal Toppers adds volume to other categories, and brings new sales to the cereal section from outside the cereal section Frozen Produce Baking Dessert Cereal Section Add-in for yogurt and cottage cheese Healthy snacks Ice cream topping Salad topping Pudding add-in Cupcakes Pancakes Waffles Example of Snacks: Gerber Graduates Mini Fruits freeze- dried ¼” diced fruit at DOUBLE THE PRICE PER OUNCE of Cereal Toppers About Cereal ToppersConsumer AppealsThe Program Retailer Benefits

33 3/20/07 Cereal Category $ Size Trading Shares: adding or subtracting a few cereal SKUs doesn’t grow or shrink the category About Cereal ToppersConsumer AppealsThe Program Retailer Benefits Cereal SKU Cereal Toppers All Incremental: adding Cereal Toppers is all net increase…doesn’t subtract from cereal volume, and may even add to it The “Additives” Strategy Is All Incremental…Not Trading Shares

34 3/20/07 Add or subtract a cereal SKU or two, and the total market size won’t grow or decline cereal Switching one cereal brand to another adds no volume cereal Cereal Toppers ADDS INCREMENTAL DOLLARS cereal Vs. About Cereal ToppersConsumer AppealsThe Program Retailer Benefits

35 3/20/07 Cereal Toppers leverages retail shelf space by delivering far more variety to consumers in less shelf space and fewer total SKUs cereal A separate SKU for every variety Vs. cereal multiplied by: = 32 varieties Consumers can create their own varieties, including low sugar options “addition”“multiplication” About Cereal ToppersConsumer AppealsThe Program Retailer Benefits

36 3/20/07 cereal As a result: more facings can be committed to high volume cereal SKUs to reduce out-of-stocks = 60 varieties, with the “multiplier” effect …without reducing the variety made available to consumers cereal About Cereal ToppersConsumer AppealsThe Program Retailer Benefits

37 3/20/07 About Cereal ToppersConsumer Appeals The Cereal Toppers Program To Deliver Retailer Benefits The Program

38 3/20/07 Merchandising Power and Flexibility Color Coded, Line Priced Pre- punched for peg hanging Flat gusset- bottom bag for free-standing on shelf About Cereal ToppersConsumer AppealsRetailer Benefits The Program

39 3/20/07 Display Units 60-count floor- standing displays About Cereal ToppersConsumer AppealsRetailer Benefits The Program

40 3/20/07 4-Facing Wire Rack: Shelf Space Leverage About Cereal ToppersConsumer AppealsRetailer Benefits The Program 2 bags high, 2 bags wide Channel for tags Durable powder coated construction 12” of shelf space

41 3/20/07 cereal ~15” 12” cereal ~11” ~8” About Cereal ToppersConsumer AppealsRetailer Benefits The Program All incremental volume…in about a facing and a half of big-box cereal

42 3/20/07 Doing the math…cereal SKU calculator: About Cereal ToppersConsumer AppealsRetailer Benefits The Program Reminder: this is if Cereal Toppers replaces the revenue of that cereal SKU. In reality, that cereal SKU revenue will share-swap to another cereal SKU, and the Cereal Toppers volume will be 100% incremental Have Wal-Mart dimensions and facings on rank#: 31 Kashi Go Lean Clusters 93 Grt Grns Dt Raisin 97 Kashi Go Lean 102 Ban Nut Crunch 109 Cran Alm Crunch 128 Kashi Hrt2Hrt 131 Grt Grns Cr Pecans 133 Qkr Natl O/H/R

43 3/20/07 About Cereal ToppersConsumer AppealsRetailer Benefits The Program Cran Alm CrnchMpl Pec CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry Mrng Cran Alm CrnchRsn Date PecanCrnchy PecanBan Nut CrnchOat Hny Rsn 1of22of2 1of22of21of22of21of22of21of22of2 Looking at one area of your top shelf ? What makes sense

44 3/20/07 About Cereal ToppersConsumer AppealsRetailer Benefits The Program 2of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngCran Alm CrnchRsn Date PecanCrnchy PecanBan Nut CrnchOat Hny Rsn 1of22of21of22of21of2 2of21of22of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngRsn Date PecanBan Nut CrnchOat Hny Rsn 1of12of21of22of21of11of22of2 1of22of2 One possibility: Revised set: Gains: Ring +$5.7 million (+91%), Margin +$1.5 million (+107%) if all incremental Ring +$2.5 million (+41%), Margin +$0.8 million (+57%) if lose 50% from reduced facings

45 3/20/07 About Cereal ToppersConsumer AppealsRetailer Benefits The Program 2of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngCran Alm CrnchRsn Date PecanCrnchy PecanBan Nut CrnchOat Hny Rsn 1of22of21of22of21of2 2of21of22of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngRsn Date PecanBan Nut CrnchOat Hny Rsn 1of12of21of22of21of11of22of2 1of22of2 Detailing the Math:

46 3/20/07 About Cereal ToppersConsumer AppealsRetailer Benefits The Program Another possibility: 2of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngRsn Date PecanCrnchy PecanBan Nut Crnch 1of2 Oat Hny Rsn 1of22of21of22of21of2 2of2 Cran Alm Crnch 2of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngRsn Date PecanBan Nut CrnchOat Hny Rsn 1of22of21of22of21of1 1of22of2 Cran Alm Crnch 2of2 Revised set: Gains: Ring +$5.7 million (+91%), Margin +$1.5 million (+107%) if all incremental Ring +$2.6 million (+41%), Margin +$0.8 million (+57%) if lose 50% from reduced facings

47 3/20/07 About Cereal ToppersConsumer AppealsRetailer Benefits The Program 2of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngRsn Date PecanCrnchy PecanBan Nut Crnch 1of2 Oat Hny Rsn 1of22of21of22of21of2 2of2 Cran Alm Crnch 2of2 Cran Alm CrnchBan Nut CrnchRsn Date PecanCrnchy PecanBlbrry MrngRsn Date PecanBan Nut CrnchOat Hny Rsn 1of22of21of22of21of1 1of22of2 Cran Alm Crnch 2of2 Detailing the Math:

48 3/20/07 Woman: Great run, Dad. Dad: Good distance, too. Woman: I’m ready for some cereal. Dad: How ‘bout some fruit on that?.Woman: Try these Woman: Always ready to eat. Cindy takes ‘em to school. Cindy: Grampa! Those are my Cereal Toppers! Announcer: Top off your morning with Cereal Toppers. TV Copy Dad: Cereal Toppers… Dad: Woah! Hundred percent natural! Woman: Cereal Toppers is real fruitWoman: Strawberries and bananas, raspberries and blueberries. Dad: Not my Cereal Toppers? Announcer: Real fruit, real fast. Go to cerealtoppers.com for the store nearest you. About Cereal ToppersConsumer AppealsRetailer Benefits The Program

49 3/20/07 About Cereal ToppersConsumer AppealsRetailer Benefits The Program Internet connection required Windows Media Player required Download (7MB) can take a few minutes on a high speed connection To view the TV commercial, click the TV: To skip the video and go to the next page of the presentation, click here: Skip Ahead

50 3/20/07 It all adds up to:


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