Skippy® Brand Presentation
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Contents
• Defining Customer Needs
• Product Introduction
• SKIPPY PB Launch Details
• Marketing Support
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Families looking for better snacking options
Families need high protein snacks for when they’re “Hangry.”
Peanut butter is a natural and substantial protein source.
Snack bites with real peanut butter win with moms and kids.
91% of people want snacks with taste they enjoy.
Over 86% of U.S. eats Snacks.
We look for higher protein
grams. My daughter will
eat peanut butter on
almost anything. It’s about
high protein.
Protein is important to me
because it keeps them
fuller longer – it stays with
them. And then they don’t
need to continue to snack.”
My son comes home from
school and before he even
says ‘Hello,’ he says, ‘I’m
hungry.’ A peanut butter
sandwich is always a go-to. I
feel it’s a better choice
because it’s filling, it lasts with
him, it gives him energy.”
“Peanut butter balls would be
nice to have the smooth
peanut butter feeling together
with a crunch.”
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Relationship of protein to consumer snacking options
Grams of Protein
TREAT
1-2
3
4
7
BREAK
QUICK
10
15
20+
BETTER FOR YOU
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Point of Difference
WHO



Mom’s
14-16 Year Olds
WHEN


After School at home
PROBLEM


Hangry
CURRENTLY EATING


Lots of Junk
MUST HAVES







Immediate
Fun
Real
Good
Satisfying
Energizing
PERSONALITY

POSITIONING ESSENCE

Confidential and Proprietary, © 2013 Hormel Foods, LLC
Introducing SKIPPY® PB Bites
• 8/6oz multi-serve
canister
• $24.00 per case
– $3.00/unit
• Two varieties
– Double Peanut
Butter
– Pretzel
• Target Retail:
– $3.99
• 5g of Protein
• Soft shell
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Retail Price is in Line with Competitive Snacks
Unit Size
Base Unit Price
Price per ounce
Candy
12 ounce
$3.65
$0.30 per ounce
Trail Mix
25 ounce
$9.96
$0.38 per ounce
SKIPPY® PB BITES
6 ounce
$3.99
$0.665 per ounce
Nut Mix
9 ounce
$6.07
$0.67 per ounce
Beef Jerky
6 ounce
$9.00
$1.45 per ounce
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Shelving
• Ideal placement for Skippy® PB Bites is in alignment with snacking items
that currently exist within the set
– Ideally placed adjacent to Skippy® items in distribution
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Marketing Support Plan
TV
Digital
Print
• Leveraging performance of marketing in test markets to optimize vehicle
effectiveness for national launch
Confidential and Proprietary, © 2013 Hormel Foods, LLC
APPENDIX
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Skippy PB Bites – Key nutritional comparisons
PB Bites
(Double Peanut
Butter)
PB Bites
(Pretzel)
Skippy Regular
Peanut Butter
Reeses Peanut
Butter Cups
Snickers
Bar
Serving
Size
30g
30g
32g
45g
53g
Calories
160
160
190
232
250
Sodium
120mg
300mg
150mg
101mg
120mg
Sugar
8g
6g
3g
21g
27g
Protein
5
5g
7g
4.6g
4g
12
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Introducing SKIPPY® PB Bites Shipper
• 32/6oz Combo display
– 16/6oz Double PB
– 16/6oz Pretzel
• $96.00 per case cost
– $3.00/unit
• Target Retail:
– $3.99
• Dimensions:
– 45” (H) x 12.437” (L) x 11.125” (W)
• 5g of Protein
• Soft shell
• Normal lead time apply
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Skippy® Brand Background
Industry Challenges
• Peanut crop volatility producing boom and
bust cycles
• Peanut allergies and public perception
• Complementary or competitive position of
alternate nut butters
(15)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Our approach to industry challenges
• Leverage the National Peanut Board similar to how we partner with Pork Board
• Tighter relationships with shellers and growers
• Evaluating alternate nut butters – several points to consider
– Require co-pack
– Market is maturing
– While growth has been significant, still very low penetration and
sales rates outside of Nutella
(16)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Category Challenges
• Food safety related salmonella and recalls
• Price deflation following a normalized
peanut crop. Pressure to lower prices but
continue category growth.
(17)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Our approach to category challenges
• Maintain the high food safety standards we have inherited and augment
with our best practices
– Proactive communication in cases of unrelated recalls
• We will follow JM Smucker as #2 in category with respect to price moves
– Targeted price spreads to Jif in everyday basis
– Emphasis on promoted frequency vs. depth
(18)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Brand Challenges
• Lack of investment in brand taking its toll –
recent share and HHP loses
• Nationally known brand that is only
regionally strong
• Lack of meaningful innovation while #1
competitor is driving new items
(19)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Our approach to brand issues
• Still a strong affinity for the brand – need to reactivate it
• Our valuation of brand included higher investment in advertising and promotion
• CPS well positioned with underdeveloped customers and markets
• Innovation will be a keystone for the brand. That process has already started.
(20)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Go-To-Market Strategy
1. Dominate markets of strength
- NE & West Coast
2. Win Jump Balls in push markets
3. Defend position in markets without leadership
- Central
4. Build the foundation in underdeveloped areas by making
opportunistic investments
(21)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
SKIPPY® Market Development by Regional BDI
MOUNTAIN
Priv Label: 196
Skippy®: 140
WEST NORTH
CENTRAL
Skippy®: 202
Peter Pan: 169
EAST NORTH
CENTRAL
Jif: 193
Priv Label: 150
NEW ENGLAND
Skippy®: 246
Priv Label: 142
MID-ATLANTIC
Skippy®: 157
Priv Label: 116
PACIFIC
Skippy®: 201
SOUTH ATLANTIC
Peter Pan: 229
Jif: 128
WEST SOUTH
CENTRAL
Peter Pan: 274
Private Label
EAST SOUTH CENTRAL
Peter Pan: 264
Priv Label: 217
Jif: 204
(22)
Source: Based on AC Nielsen Regional 52 weeks ending 1/19/13 (Food). Circled areas are P1.5 markets (no clear brand
leader). and Proprietary, © 2013 Hormel Foods, LLC
Confidential
DISTRIBUTION
Distribution Priorities – Grocery & Mass
• Focus on building a strong
base with distribution of
core 15/16.3 oz items
• Move to TIER TWO after
core 15/16.3 oz products
are in distribution
• Opportunities beyond TIER
THREE will be evaluated by
channel
PRODUCT AND PACK
UPC
VARIETY
SIZE
ACV
4800100643
Base Creamy
16.3 oz
85
4800100687
Natural Creamy
15 oz
76
4800100641
Base Super Chunk
16.3 oz
79
4800100686
Natural Super Chunk
15 oz
59
4800100681
Reduced Fat Creamy
16.3 oz
58
4800109430
Natural w/ Honey
15 oz
61
4800121125
Natural Dark Chocolate
15 oz
-
4800121210
1/3 Less Sodium and Sugar
15 oz
21
4800127068
Base Creamy
28 oz
61
4800123202
Natural Creamy
26.5 oz
42
4800127044
Base Super Chunk
28 oz
42
4800116016
Natural Super Chunk
26.5 oz
20
4800126465
Natural Dark Chocolate
26.5 oz
-
4800127072
Base Creamy
40 oz
52
4800127401
Natural Creamy
40 oz
22
TIER ONE
TIER TWO
TIER THREE
(24)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
SHELVING
Peanut Butter Shelving
Shoppers want intuitive shelf arrays –
changes in size confuse them
• Top shelf is for unusual items, i.e. non
peanut butter items (almond butter,
soy-based butter, Nutella, etc.)
• Eye level is where the shopper begins,
and spends most of their time and
expect to find their preferred size
(most often 16-18 ounce jars)
• Bottom shelf = Largest sizes are
expected at the bottom including
non-core items (i.e. Club size packs)
SHOPPERS’ NAVIGATION HIERARCHY
Color – to find preferred brands
Brand Names
Color – variety cues
Size
Price comparison
(26)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Planogram – Grocery & Mass
• Specialty Items
(i.e. non-peanut butter spreads)
• Base peanut butter items
grouped by brand and
natural sku’s integrated
with the brand associated
(i.e. Skippy® Natural and base
in one section of the set)
• Large size of peanut butter
including Club Packs/
Twin Packs
(27)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
WIC Approved
• 16-18 oz branded peanut butter is generally approved as a WIC item
– See reference on 1HP for more details
• If approved, utilize retail teams to get a shelf tag
(28)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
MERCHANDISING
Promotion Principles
• Maintain discipline around $2.49 or 2/$5 promoted price point for
15/16.3 oz core
• Frequency over depth when excess funds are available
• Hit critical drive periods
(30)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Promotion Calendar
HIGH BDI
3 EVENTS PER HALF
• 1 – Feature @ Back to School (Aug/Sept)
• 1 – Feature for baking event (Nov. / Dec.)
MEDIUM BDI
2-3 EVENTS PER HALF
• Pacific
• West North
Central
• New England
• Mid Atlantic
• Mountain
• 1 – Feature @ Back to School (Aug/Sept)
• 1 – Feature for baking event (Nov. / Dec.)
LOW BDI
2 EVENTS PER HALF
• 1 – Feature @ Back to School (Aug/Sept)
• 1 – Feature for baking event (Nov. / Dec.)
Key Events
•
•
•
•
East North Central
South Atlantic
East South Central
West South Central
Ad Week
Feature Price
Q1 Back to school
1/17
2/$5
Q2 Easter
3/31
2/$5
Q3 Memorial Day
5/19
2/$5
Jul/Aug/Sep
2/$5
8/25
2/$5
11/17
2/$5
Q3/Q4 Back to school
Q4 Labor Day
Q1 Baking season
(31)
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Ability to Drive Market Development
Through Cross-Merchandising
BREAKFAST
LUNCH
SNACKING
BAKING
(32)
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Shipper Opportunities
• Cross merchandise with produce
• Consumer insight:
– 21% of peanut butter usage is as a dip
– Crackers, apples, bananas, and celery are the most
frequently dipped items
– SKIPPY® over indexes as a dip relative to other brands
Q 2e: Please select all the brands of peanut butter you BUY usually?
Q.FLEX11: How peanut butter was consumed in household in the past month?
(33)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
PRICING
Pricing Philosophy
• Our overall pricing benchmark is Jif
– We will manage to targeted price gaps
• Customer commitments on base price investment must be
fluid so we can react quickly to changing pricing dynamics
Module 6 (35)
Confidential and Proprietary, © 2013 Hormel Foods, LLC
Questions: Contact Andrew Quinn
(ajquinn@hormel.com)