1. JORDAN BRAINARD & ASHLEY JONES Granola Bars Semester Project 2012

2. Introduction STORES AUDITED (10)  Wal-Mart (MLK & Bentonville)  Target (Rogers & Fayetteville)  Walgreens (Rogers & Fayetteville)  Neighborhood Market (Bentonville & Fayetteville)  Harps (Fayetteville)  ALDI (Fayetteville) WHY WE PICKED THIS CATEGORY: Honestly, because we love them! We were interested in analyzing a category that we often shop for ourselves. WHO IS IN CONTROL? The retailer

3. Category Depth GENERAL INFORMATION:  SKU’s: 119  Brands:  8 National Brands  6 Private Label Brands WHO HAD THE DEEPEST ASSORTMENT?  Wal-Mart (Bentonville) had the most SKU’s (69)  Wal-Mart and Neighborhood Market had the most Facings  Target had the most Private Labels variety (2)  In person felt they had the most variety

4. Depth Breakdown

5. Demographics FAMILIES  Bigger Families – Newly and Maturing  Granola Bars are going to children  Also popular among younger couples INCOME  Middle to Upper income  Live comfortably ETHNICITY  More popular among Caucasians  Asians seem to be more Brand loyal  No substantial private label difference among other brands EDUCATION  Some college and college grad

6. Demographics CTL BR - GRANOLA & YOGURT BARS NAT VAL CW GR BR - GRANOLA & YOGURT BARS NAT VAL GR BAR - GRANOLA & YOGURT BARS QUAKER CHEWY - GRANOLA & YOGURT BARS QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS 100.0 INC - $20,000- 29,999 81.675.758.873.760.5 INC - $30,000- 39,999 118.387.490.284.1116.3 INC - $40,000- 49,999 122.8101.0110.698.9102.1 INC - $50,000- 69,999 119.7129.5121.7134.1139.3 SIZE - 3-4 MEM 145.4156.5117.7144.0122.7 SIZE - 5+ MEM 208.8124.7176.7201.3208.9 AGE FH - UNDER 35 175.5187.3152.5157.6150.3 AGE FH - 35-44 177.1146.2124.1161.3162.4 AGE FH - 45-54 84.7104.9117.1113.889.4 AGE FH - 55+ 48.942.053.649.349.4 AGE FH - 55-64 54.556.067.259.367.8 AGE FH - 65+ 44.430.842.741.434.7

7. CTL BR - GRANOLA & YOGURT BARS NAT VAL CW GR BR - GRANOLA & YOGURT BARS NAT VAL GR BAR - GRANOLA & YOGURT BARS QUAKER CHEWY - GRANOLA & YOGURT BARS QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS 100.0 AGE FH - NO FEMALE HEAD 53.557.779.051.483.7 KIDS - NONE < 18 58.866.780.266.070.4 KIDS - ANY < 18 181.3165.6139.1167.0158.3 KIDS - ANY < 6 190.3148.0156.9159.1140.1 KIDS - ANY 6-12 197.6177.4133.5175.6186.0 KIDS - ANY 13-17 188.7148.5144.4178.5165.3 LS - YOUNG SINGLES 120.0205.6102.870.944.7 LS - CHILDLESS YOUNGER COUPLES 119.8140.2189.7147.8112.8 LS - NEW FAMILIES 184.1156.5135.0137.276.7 LS - MATURING FAMILIES 192.4174.8131.7172.2187.8 LS - ESTABLISHED FAMILIES 152.4148.0159.4170.6130.9 LS - MIDDLE AGED SINGLES 39.254.575.845.088.1 LS - EMPTY NESTERS 50.746.660.558.346.7 LS - OLDER SINGLES 33.531.842.229.225.0

8. CTL BR - GRANOLA & YOGURT BARS NAT VAL CW GR BR - GRANOLA & YOGURT BARS NAT VAL GR BAR - GRANOLA & YOGURT BARS QUAKER CHEWY - GRANOLA & YOGURT BARS QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS 100.0 LS - MATR FAM/POOR-GET BY 160.796.1104.9117.6144.9 LS - MATR FAM/LIV COMF- AFF 221.4247.0156.2222.3227.2 LS - EMPTY NEST/POOR- GET BY 41.655.137.840.151.2 LS - EMPTY NEST/LIV COMF-AFF 54.343.269.665.644.8 EMP - FH EMPLOYED 121.0141.7118.7131.8123.4 EMP - FH NOT EMPLOYED 96.766.185.983.077.0 ED - FH NOT HIGH SCH GRAD 63.164.347.552.651.0 ED - FH HIGH SCH GRAD 105.580.079.593.0110.9 ED - FH SOME COLLEGE 111.9125.9117.6119.896.0 ED - FH COLLEGE GRAD 128.5143.1138.9140.7116.7 RACE - CAUCASIAN 107.7104.996.5107.2111.9 RACE - NON-CAUCASIAN 71.081.5113.372.954.9 RACE - AFRICAN AMER. 54.271.672.152.244.4 RACE - ASIAN 42.1130.6179.6100.764.5 RACE - OTHER RACE 105.884.0160.798.168.9 ETH - HISPANIC 94.494.1164.1110.364.9

9. Which Brands Dominate? WHO IS LEADING THE PACK?  Nature Valley  Quaker  Private Label  Has potential to pass other leading brands WHO IS FALLING BEHIND?  Natures Path  Casadian Farm Organic  Generating high gross margins, however only found at Wal-Mart and Neighborhood Market

10. Share of Display Space Share of Display Space, Granola Bars Manufacturer Neighborhood Market BVILLE Face Wal-Mart MLK Face Target FAY FaceHARPS Face Walgreens FAY Face Kellogs% of Total Sum 1.00%3.08%3.39% 0.00% % of Total N1.43%3.17%3.33% 0.00% N122 00 Nature Valley% of Total Sum 32.00%33.85%26.27%48.00%64.29% % of Total N31.43%31.75%26.67%48.00%64.29% N222016129 Private Label% of Total Sum 23.00%11.54%23.73% 0.00% 14.29% % of Total N22.86%11.11%23.33% 0.00% 14.29% N16714 0 2 Quaker% of Total Sum 23.00%32.31%25.42%52.00%21.43% % of Total N21.43%22.22%25.00%52.00%21.43% N151415133 Total% of Total Sum 100.00% % of Total N100.00% N7063602514

11. Nature ValleyQuakerPrivate Label

12. Category Strategy DEALS  No evidence of a “deal” in Audits BRAND PROMOTIONS  Walgreens and Target did have “price cuts” on Nature Valley products

13. Gross Margins PRIVATE LABELS COMPARABLE?  Used about half the Unit2 costs for our Private Labels  Adjusted Private Labels HIGHEST GROSS MARGINS?  Neighborhood Market  Wal-Mart LOWEST GROSS MARGINS?  ALDI

14. Gross Margins Estimated Gross Margins, Granola Bars Manufacturer Neighborhood Market BVILLE GM% Wal-Mart MLK GM% Target FAY GM% HARPS GM% Walgreens FAY GM% KellogsMean49.54%43.92%67.25% 0.00% N122 00 Nature ValleyMean26.62%27.50%31.01%36.77%51.19% N222016129 Private LabelMean52.81%56.30%35.17% 0.00% 46.82% N16714 0 2 QuakerMean26.35%26.39%20.36%44.96%56.63% N151215133 TotalMean34.31%32.95%32.01%41.03%51.74% N7061602514

15. Market Scoreboard Market Score Board, Granola Bars Manufactures Neighborhood Market BVILLE Wal-Mart MLKTarget FAYHARPS Walgreens FAY Kellogs GM%49.54%43.92%67.25% 0.00% % of Total Sum 1.00%3.08%3.39% 0.00% % of Total N1.43%3.17%3.33% 0.00% N122 00 Nature Valley GM%26.62%27.50%31.01%36.77%51.19% % of Total Sum 32.00%33.85%26.27%48.00%64.29% % of Total N31.43%31.75%26.67%48.00%64.29% N222016129 Private Label GM%52.81%56.30%35.17% 0.00% 46.82% % of Total Sum 23.00%11.54%23.73% 0.00% 14.29% % of Total N22.86%11.11%23.33% 0.00% 14.29% N16714 0 2 Quaker GM%26.35%26.39%20.36%44.96%56.63% % of Total Sum 23.00%32.31%25.42%52.00%21.43% % of Total N21.43%22.22%25.00%52.00%21.43% N151415133 Total GM%34.31%32.95%32.01%41.03%51.74% % of Total Sum 100.00% % of Total N100.00% N7063602514

16. 5 Great Value SKU’s (Wal-Mart) 10 Milliville SKU’s (ALDI) Private Label Trends Granola Audits 2011

17. Private Label Trends Granola Audits 2012 YES! And they are growing… Retailers who gave a decent amount of shelf space to Private Labels had substantial Gross Margins. Wal-Mart “Great Value” is competing with other brands with flavor and packaging. Target is offering two Private Label brands with a variety of flavors and high quality packaging design. They are charging a premium price for Archer Farms. Wal-Mart – Great Value (9) ALDI – Milliville (7) Walgreens – Nice! (2) Harps – Best Choice (8) Target – Archer Farms & Market Pantry (15) SUMMARY: 6 Private Label Brands 41 Private Label SKU’s Private Labels have increased since last year’s audit PRIVATE LABELS PRESENT?

18. Granola Audits 2011 Granola Audits 2012 Private Label Trends

19. Recommendations Category is becoming more Retailer controlled Private Labels are becoming more significant within category Target and Wal-Mart have the highest gross margins and give more shelf space to their Private Labels Therefore, we would recommend that Harps increase emphasis on Private Labels because they can obviously compete with national brands and generate high gross margins. Harps on GarlandWal-mart on Joyce