Granola Bars Semester Project 2012 JORDAN BRAINARD & ASHLEY JONES Introduction WHY WE PICKED THIS CATEGORY: Honestly, because we love them! We were interested in analyzing a category that we often shop for ourselves. STORES AUDITED (10) Wal-Mart (MLK & Bentonville) Target (Rogers & Fayetteville) Walgreens (Rogers & Fayetteville) Neighborhood Market (Bentonville & Fayetteville) Harps (Fayetteville) ALDI (Fayetteville) WHO IS IN CONTROL? The retailer 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 Depth Breakdown ALDI 7 SKU’s Harps 26 SKU’s Retailer 71 SKU’s Neighborhood… 62 SKU’s 15 SKU’s Walgreens 14 SKU’s 57 SKU’s Target 62 SKU’s 69 SKU’s Wal-Mart 64 SKU’s 0 50 100 Number of SKU’s Bentonville Rogers Fayetteville 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 Demographics CTL BR NAT VAL CW GRANOLA & GR BR YOGURT BARS GRANOLA & YOGURT BARS DOLLAR DOLLAR VOLUME VOLUME INDEX INDEX TOTAL HOUSEHOLDS INC - $20,00029,999 INC - $30,00039,999 INC - $40,00049,999 INC - $50,00069,999 SIZE - 3-4 MEM NAT VAL GR QUAKER CHEWY QUAKER CHEWY BAR - GRANOLA & DIPPS GRANOLA & YOGURT BARS GRANOLA & YOGURT BARS YOGURT BARS DOLLAR DOLLAR DOLLAR VOLUME VOLUME INDEX VOLUME INDEX INDEX 100.0 100.0 100.0 100.0 100.0 81.6 75.7 58.8 73.7 60.5 118.3 87.4 90.2 84.1 116.3 122.8 101.0 110.6 98.9 102.1 119.7 129.5 121.7 134.1 139.3 145.4 156.5 117.7 144.0 122.7 208.8 124.7 176.7 201.3 208.9 175.5 187.3 152.5 157.6 150.3 177.1 146.2 124.1 161.3 162.4 AGE FH - 45-54 84.7 104.9 117.1 113.8 89.4 AGE FH - 55+ 48.9 42.0 53.6 49.3 49.4 AGE FH - 55-64 54.5 56.0 67.2 59.3 67.8 AGE FH - 65+ 44.4 30.8 42.7 41.4 34.7 SIZE - 5+ MEM AGE FH UNDER 35 AGE FH - 35-44 CTL BR - GRANOLA NAT VAL CW GR BR - NAT VAL GR BAR & YOGURT BARS GRANOLA & GRANOLA & YOGURT BARS YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS DOLLAR VOLUME INDEX DOLLAR VOLUME INDEX QUAKER CHEWY QUAKER CHEWY GRANOLA & YOGURT DIPPS - GRANOLA & BARS YOGURT BARS DOLLAR VOLUME INDEX DOLLAR VOLUME INDEX 100.0 100.0 100.0 100.0 100.0 AGE FH - NO FEMALE HEAD 53.5 57.7 79.0 51.4 83.7 KIDS - NONE < 18 58.8 66.7 80.2 66.0 70.4 181.3 165.6 139.1 167.0 158.3 190.3 148.0 156.9 159.1 140.1 197.6 177.4 133.5 175.6 186.0 188.7 148.5 144.4 178.5 165.3 120.0 205.6 102.8 70.9 44.7 119.8 140.2 189.7 147.8 112.8 184.1 156.5 135.0 137.2 76.7 192.4 174.8 131.7 172.2 187.8 152.4 148.0 159.4 170.6 130.9 39.2 54.5 75.8 45.0 88.1 50.7 46.6 60.5 58.3 46.7 33.5 31.8 42.2 29.2 25.0 KIDS - ANY < 18 KIDS - ANY < 6 KIDS - ANY 6-12 KIDS - ANY 13-17 LS - YOUNG SINGLES LS - CHILDLESS YOUNGER COUPLES LS - NEW FAMILIES LS - MATURING FAMILIES LS - ESTABLISHED FAMILIES LS - MIDDLE AGED SINGLES LS - EMPTY NESTERS LS - OLDER SINGLES CTL BR GRANOLA & YOGURT BARS NAT VAL CW GR NAT VAL GR BAR - QUAKER CHEWY QUAKER CHEWY BR - GRANOLA & GRANOLA & GRANOLA & YOGURT DIPPS - GRANOLA & YOGURT BARS YOGURT BARS BARS YOGURT BARS DOLLAR VOLUME DOLLAR VOLUME DOLLAR VOLUME INDEX INDEX INDEX TOTAL HOUSEHOLDS DOLLAR VOLUME INDEX DOLLAR VOLUME INDEX 100.0 100.0 100.0 100.0 100.0 LS - MATR FAM/POOR-GET BY 160.7 96.1 104.9 117.6 144.9 LS - MATR FAM/LIV COMFAFF 221.4 247.0 156.2 222.3 227.2 LS - EMPTY NEST/POORGET BY 41.6 55.1 37.8 40.1 51.2 LS - EMPTY NEST/LIV COMF-AFF 54.3 43.2 69.6 65.6 44.8 EMP - FH EMPLOYED 121.0 141.7 118.7 131.8 123.4 96.7 66.1 85.9 83.0 77.0 63.1 64.3 47.5 52.6 51.0 105.5 80.0 79.5 93.0 110.9 ED - FH SOME COLLEGE 111.9 125.9 117.6 119.8 96.0 ED - FH COLLEGE GRAD 128.5 143.1 138.9 140.7 116.7 RACE - CAUCASIAN 107.7 104.9 96.5 107.2 111.9 71.0 81.5 113.3 72.9 54.9 54.2 71.6 72.1 52.2 44.4 42.1 130.6 179.6 100.7 64.5 105.8 84.0 160.7 98.1 68.9 94.4 94.1 164.1 110.3 64.9 EMP - FH NOT EMPLOYED ED - FH NOT HIGH SCH GRAD ED - FH HIGH SCH GRAD RACE - NON-CAUCASIAN RACE - AFRICAN AMER. RACE - ASIAN RACE - OTHER RACE ETH - HISPANIC 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 Share of Display Space Manufacturer Kellogs % of Total Sum % of Total N N Nature Valley % of Total Sum % of Total N N Private Label % of Total Sum % of Total N N Quaker % of Total Sum % of Total N N Total % of Total Sum % of Total N N Share of Display Space, Granola Bars Neighborhood Market BVILLE Wal-Mart MLK Target FAY Walgreens FAY Face Face Face HARPS Face Face 1.00% 3.08% 3.39% 0.00% 0.00% 1.43% 1 32.00% 3.17% 2 33.85% 3.33% 2 26.27% 0.00% 0 48.00% 0.00% 0 64.29% 31.43% 22 23.00% 31.75% 20 11.54% 26.67% 16 23.73% 48.00% 12 64.29% 9 14.29% 22.86% 16 23.00% 11.11% 7 32.31% 23.33% 14 25.42% 0.00% 0 52.00% 14.29% 2 21.43% 21.43% 15 100.00% 22.22% 14 100.00% 25.00% 15 100.00% 52.00% 13 100.00% 21.43% 3 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 70 63 60 25 14 0.00% Nature Valley Quaker Private Label Category Strategy DEALS No evidence of a “deal” in Audits BRAND PROMOTIONS Walgreens and Target did have “price cuts” on Nature Valley products 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 Gross Margins Estimated Gross Margins, Granola Bars Manufacturer Kellogs Mean N Nature Valley Mean N Private Label Mean N Quaker Mean N Total Mean N Neighborhood Market BVILLE Wal-Mart Target FAY GM% MLK GM% GM% 49.54% 43.92% 67.25% HARPS GM% Walgreens FAY GM% 0.00% 0.00% 1 2 2 0 0 26.62% 27.50% 31.01% 36.77% 51.19% 22 20 16 12 9 52.81% 56.30% 35.17% 0.00% 46.82% 16 7 14 0 2 26.35% 26.39% 20.36% 44.96% 56.63% 15 12 15 13 3 34.31% 32.95% 32.01% 41.03% 51.74% 70 61 60 25 14 Market Scoreboard Manufactures Kellogs GM% % of Total Sum % of Total N N Nature Valley GM% % of Total Sum % of Total N N Private Label GM% % of Total Sum % of Total N N GM% Quaker % of Total Sum % of Total N N GM% Total % of Total Sum % of Total N N Market Score Board, Granola Bars Neighborhood Wal-Mart Market BVILLE MLK Target FAY 49.54% 43.92% 67.25% 1.00% 3.08% 3.39% Walgreens HARPS FAY 0.00% 0.00% 0.00% 0.00% 1.43% 1 26.62% 32.00% 3.17% 2 27.50% 33.85% 3.33% 2 31.01% 26.27% 0.00% 0 36.77% 48.00% 0.00% 0 51.19% 64.29% 31.43% 22 52.81% 23.00% 31.75% 20 56.30% 11.54% 26.67% 16 35.17% 23.73% 48.00% 12 0.00% 64.29% 9 46.82% 14.29% 22.86% 16 26.35% 23.00% 11.11% 7 26.39% 32.31% 23.33% 14 20.36% 25.42% 0.00% 0 44.96% 52.00% 14.29% 2 56.63% 21.43% 21.43% 15 34.31% 100.00% 22.22% 14 32.95% 100.00% 25.00% 15 32.01% 100.00% 52.00% 13 41.03% 100.00% 21.43% 3 51.74% 100.00% 100.00% 70 100.00% 63 100.00% 60 100.00% 25 100.00% 14 0.00% Private Label Trends Granola Audits 2011 MFR Brand Brand Variety 0 Private Label 0 Private Label 0 Private Label 0 Private Label Walmart Walmart Walmart Walmart Great Value Great Value Great Value Great Value Sweet & Salty Almond Sweet & Salty Peanut 90 Calorie Chocolate Chunk Crunch Oats & Honey 0 Private Label Walmart Great Value Granola Bar Variety Pack •5 Great Value SKU’s (Wal-Mart) •10 Milliville SKU’s (ALDI) 4 Private Label 4 Private Label Milliville Milliville Chewy Dipped Chewy Dipped 4 Private Label Milliville 4 Private Label Milliville Chewy Granola Bars Chocolate Chip Peanut Butter and Chocolate Chewy Granola Bars Chip 4 Private Label Milliville 4 Private Label Milliville 4 Private Label Milliville 4 Private Label Milliville 4 Private Label 4 Private Label Milliville Milliville Chewy Granola Bars Fiber Now Granola Bars Fiber Now Granola Bars Sweet & Salty Nut Granola Bar Sweet & Salty Nut Granola Bar Trail Mix Chocolate Chip Peanut Butter Variety Pack Oats And Chocolate Oats and Peanut Butter Almonds Peanuts Chewy Fruit & Nut Bars Private Label Trends Granola Audits 2012 PRIVATE LABELS PRESENT? 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 Label Trends Granola Audits 2012 Granola Audits 2011 Sales Sales Private Label National Brands Private Label National Brands 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 Garland Wal-mart on Joyce