Betty Crocker

1
Betty CrockersLunch Break and Mini Breakyou
Deserve it!

• Marketing strategy and two new concepts for
  single-serve, shelf-stable food products
• November 19, 2001

Marketing Strategy General Mills Project Team 3
(M/Th 115) Paulo Alves, Teena Cater, Erin
McCormack, Marniee Nottingham, Moni Singh, Caveni
Wong
2
Executive Summary

• Objective
• Create a three year sustainable growth strategy
  for General Mills for single-serve shelf-stable
  food category.
• Strategy
• Pursue a growth strategy for the Adult lunch
  market
• Target economically affluent, yet time poor
  consumers
• Provide a means to consumers to do something good
  for themselves, even when they feel they dont
  have the time

3
Strategic Vision

• Take control of adult lunch market by empowering
  consumers with the perception of convenient real
  food preparation.

When you think of lunch, think Betty Crocker.
4
Translating market knowledge for value delivery

• Market Learning
• Need for control, whole meal, taste and
  convenience
• Under exploited lunch market
• Value Creation
• Providing shelf-stable tasty and healthy
  offerings via two new product concepts
• Lunch Break
• Mini Break
• Value Delivery
• Leverage General Mills existing market based
  assets such as distribution, customer and partner
  relationships, and brand equity

5
Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

6
Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

7
Market Learning

• Market Overview
• Consumer Trends
• Competitive Analysis
• Bowl Appétit Brand Equity Analysis

8
Market Overview
Market Learning

• Single-serve convenience meal market is highly
  fragmented
• Four strategic groups within convenience meals.
  (Bowl Appétit competes more closely with
  ready-to-eat, ready to-heat and restaurant food)
• Ready to Eat meal replacement bars, Oscar
  Meyers Lunchables
• Ready to Heat Bowl Appétit, Campbells soup,
  frozen meals
• Scratch Fast Skillet dinners like Create-a-Meal
• Restaurant Food

Source Information Resources, Inc., NCBA
9
Consumer Trends
Market Learning

• Ready-to-heat category is growing while
  restaurant foods are declining
• Ready-to-heat category increased by 22 in sales
  over the last year and by 100 over the past
  three years
• 45.8 of food budget is spent on food away from
  home. However,
• annual meals eaten in restaurant per person
  declined from 66 in 1999 to 64 in 2000
• take-out meals also declined from 73 meals per
  person to 70 in 2000
• There is an opportunity to capture the growth in
  ready-to-heat category

Source Information Resources, Inc., NCBA
10
Consumer Trends (continued)
Market Learning

• Opportunity to build a convenience lunch market
  for affluent households
• Consumers want
• A whole meal (meat, vegetables, and
  carbohydrates)
• 25 Americans skip breakfast on average
• Convenience
• Cooking is a special occasion activity
• Average Americans willingness for time spend
  cooking is 15 minutes
• Taste and nutritional value
• However, nutrition may be compromised for
  convenience (motivation in the moment of time
  53.2 eat fast food)
• Control
• Control over their diet even when they are busy

Source NPD Group Inc. and customer survey
conducted by the team. See backup slides.
11
Consumer Trends (continued)
Market Learning

• Consumers may associate convenient meals with
  dinner
• Weekday eating is considered an individual
  activity
• 90 consumers have access to microwave at work
• Dual-income and single-parent families are more
  likely to buy prepared meals

Source NPD Group Inc. and customer survey
conducted by the team. See backup slides.
12
Competitive Analysis
Market Learning
Strong retail competition for dinner, but lunch
market is undefined.
Source Company websites, store walks and taste
test conducted by team. See backup slides.
13
Competitive Analysis Price vs. HealthMapping of
Single Serve, Convenient Meals
Market Learning
Consumers associate shelf stable products with
low health
Source Company websites, store walks and taste
test conducted by team. See backup slides.
14
Competitive Analysis Price vs. Taste
Mapping of Single Serve, Convenient Meals
Market Learning
Consumers are willing to pay for taste
Source Company websites, store walks and taste
test conducted by team. See backup slides.
15
Brand Equity Analysis Brand Report Card
Market Learning
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Brand Equity Analysis (continued)
Market Learning

• Most respondents were unaware of product
  existence (Refer to Consumer Survey)
• For others, Bowl Appétit identity is fragmented
• Consumer is unclear about usage
  occasions/situations
• Consumer doesnt differentiate from frozen food

There is a need to develop awareness for the
brand and the shelf stable category
Source Consumer survey conducted by the team
17
Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

18
Agenda

• Strategic Vision
• Product concepts
• Alternatives Considered
• Value Proposition
• Strategy and Target Market

19
Strategic Vision

• Take control of adult lunch market by empowering
  consumers with the perception of convenient real
  food preparation.

When you think of lunch, think Betty Crocker.
20
Strategic Vision Implementation

• Leverage Betty Crocker brand equity
• Bowl Appétit triggers an association with
  mixing bowls for baking needs
• We recommend discontinuation of the sub-brand
  usage
• Include Bowl Appétit current line of products
  under the Betty Crockers Mini Break in smaller
  portions
• Leverage the recent Pillsburys acquisition by
  co-branding with Green Giant
• Frozen vegetable sales are declining,
  shelf-stable vegetables is a means of
  diversifying and creating a new means for
  vegetable consumption.
• Leverage co-branding opportunities with current
  (Heinz-Starkist) or future potential partners
• Exploit premium image of other companies brand
  to elicit perception of freshness and healthiness

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Product Concepts

• Betty Crockers Lunch Break
• total meal complete with dessert treat
• Betty Crockers Mini Break
• a complementary addition to lunch or any time
  theres a need for a break

Take a break. You deserve it!
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Alternative Options Considered

• Abort shelf-stable market
• Not within project scope
• Target anytime market (as opposed to lunch
  only)
• More opportunity in targeting lunch only
• Not much opportunity to differentiate
• Unfocused causing confusion for consumers
• Target kids
• Kraft already is in the market
• Adult lunch is a new market identified by an
  unmet need
• Ethnic Market
• Not a current GMs strength
• We propose exploring this in future

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Betty Crockers Lunch Break

• All-in-one meal
• Including a main dish and dessert
• Complete with carbohydrates and protein
• Separate pouch for meat and/or vegetables
• Vacuum packed fresh ingredients
• Convenient preparation without diminishing the
  cooking experience
• Mix contents before heating
• Requires involvement with minimal time commitment
• Four Varieties
• Tuna Noodle Casserole (co-brand with Star-Kist)
• Hot Veggie Pasta Salad (co-brand with Green
  Giant)
• Chicken with Rice and Broccoli (co-brand with
  Tyson and Green Giant)
• Sundried Tomatos and Pasta with Sausage Sauce
  (co-brand with Green Giant

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Betty Crockers Lunch Break (Continued)

• Hot, Nutritious Meal
• Rice or Pasta
• Meat and/or Vegetable
• Cookie or Brownie

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Betty Crockers Mini Break

• Mini Break for a lunch addition or a snack
  anytime
• Green Giant Veggie Pack Bowls
• Potato Bowls
• The top 3 best sellers for former Bowl Appétit
  (penne pasta, etc.)

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Betty Crockers Lunch BreakValue Proposition

• Regain control of your day by preparing a
  quick, convenient, wholesome meal. Do something
  good for yourself even when you dont think you
  have the time.
• Control what you eat, even when you are busy.

27
Betty Crockers Lunch Break New Value Curve

• Low time and price investment
• High control, taste and convenience
• Total Solution for lunch carbohydrates
  meat/veg dessert

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Betty Crockers Lunch Break Strategy

• Target customer
• Affluent women (35 54) who are short on time
  and need quick, convenient meals
• Switching logic
• Consumer surveys show willingness to pay for
  improved taste and quality Lunch Break offers a
  superior choice to Bowl Appétit

29
Betty Crockers Mini Break Strategy

• Target customer
• Affluent consumers who want to improve their
  lunch experience by adding a hot side dish or who
  dont have time to take a snack break
• Value proposition
• Provides control over lunch and snacks while
  making the consumer feel good about herself
  convenience without guilt
• Switching logic
• Higher quality, more nutrition, convenience
  coupled with trusted brand name

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Lunch Break and Mini Break Nutrition Goals

• Calories
• Position calories between Healthy Choice (280)
  and Uncle Bens Noodle Bowl (400) less than 350
  would be optimalcurrent Bowl Appétit range is
  210 350
• Fat
• Position fat grams between Healthy Choice (5) and
  Uncle Bens (8) 6 - 7 would be optimalcurrent
  BA range is 5 8
• Sodium
• Position sodium between Healthy Choice (25)
  and Uncle Bens (41) optimal would be 25 -
  30--current BA range is 36 - 41
• Protein
• Position protein grams between Healthy Choice
  (14) and Uncle Bens (21) optimal would be 15
  20current BA range is 4 12
• Additional
• Add calcium fortification to appeal to women aged
  35 54, technology available in GMs RTE cereals

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Lunch Break and Mini Break Portions

• Lunch Break
• 8 ounces of pasta plus 3 ounces of vegetables
  and/or meat plus sauce pouch (depending on
  variety) and have a 2-4 ounce cookie or brownie
• Mini Break
• 6 to 8 ounce side serving
• All sizes are measured as eaten, not before
  preparation

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Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

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Value Delivery

• Organizational Fit
• Marketing Mix Elements
• Packaging
• Brand awareness Advertising
• Placement
• Promotion
• Co-branding
• Strengthen current Bowl Appétit product
• Potential Threats

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Organizational Fit with General Mills

• Strategic vision for lunch fits with General
  Mills goal of being the 1 food marketer
• Opportunity to cross-sell to General Mills
  current customer base for dinner
• Additional revenue source by creating a new
  market space that bridges the two strategic
  groups Ready to Heat and Scratch-Fast

35
Marketing Mix PackagingBetty Crockers Lunch
Break

• Side panels
• Nutritional information and ingredients
• Lunch Break varieties and Mini Break

Front view
Co-Branding Logos
Back view
Betty Crocker
Great for lunch, or a quick meal any time!
Daily Nutrition
Lunch Break provides you with a balanced lunch
containing healthy portions of protein,
vegetables and carbohydrates.
Lunch Break representation of the 5 food groups
Photo of prepared meal
Two see-through windows to view fresh vacuum packs
Usage scenarios to extend usage situations beyond
lunch
Bottom panel microwave directions
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Marketing Mix PackagingBetty Crockers Mini
Break
Front view

• Side panels
• Nutritional information and ingredients
• Lunch Break varieties and Mini Break

The side dish that is great with lunch or by
itself!
Usage scenarios to extend usage situations beyond
lunch
Back view
Mini Break you deserve it!
Co-Branding Logos
Honey glazed mixed vegetables
Great any time with lunch, as afternoon snack
or an any time snack!
NET WT. 6OZ (150g)
Photo of prepared dish
Mini Break helps you eat healthily by providing
the right amount of vegetables and carbohydrates.
Mini Break representation of the 5 food groups
Bottom panel microwave directions
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Marketing Mix Advertising

• Use advertising to create category and brand
  awareness
• Spending on advertising on National TV and print
  media (at least 30 million in the first year)
• Emphasize the ability to control what you eat
  even when you are busy
• Depict usage situations
• Take a break. You deserve it! A middle aged women
  rushing through her day, feeling our of control.
  Takes out a Betty Crocker Lunch Break from her
  office desk, prepares it and enjoys a wholesome
  break with a sense of empowerment.
• Consumer taste test that highlight the freshness
  of food

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Marketing Mix Placement

• Leverage existing General Mills distribution
• Bowl Appétit has achieved 89 ACV in one year
• Exploiting General Mills distribution asset, we
  expect to achieve similar ACV for Betty Crocker
  Lunch Break and Betty Crockers Mini Break

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Marketing Mix Placement (continued)

• Food Channel
• End of aisle displays adjacent to Lunchables
• Lunch Break - Same aisle as pasta rice mixes
• Mini Break - Same shelving area as Hamburger
  Helper
• Drug Channel
• Mass Channel
• Club Channel for Lunch Break only
• Convenience Store Channel
• Coffee or Café Shops that sell sandwiches
• Vending Machines in hospitals, colleges

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Marketing Mix Promotion

• Use minimal promotion budget to target affluent
  consumers
• This may include FSCI, Point of purchase sales
  materials, end aisle displays, Direct to consumer
  mailers
• Emphasis will be placed on end of aisle displays
• End aisle displays facing frozen sections can tap
  the majority consumers as typically they look for
  convenient meals in frozen section.
• End aisle displays facing Lunchables section can
  tap the consumers already familiar with lunch
  combination concept

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Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

42
General Mills Criteria for Success

• Compelling benefit to consumer
• Lunch Break and Mini Break provide control to
  consumer
• Differentiated product/positioning
• No other adult complete lunch concept currently
  available
• Delivery on promise of concept
• Higher quality, convenient nutritious and tasty
  product
• Consumer is aware that product is out there
• Leverage GMs marketing strength
• Product is available (distribution channels)
• Leverage GMs supply chain management

Source Discussion Peter McDonald
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Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

44
Potential Threats

• New Competition within Category
• Perdue Farms
• Subsidiary DeLuca(TM)in the process of rolling
  out DeLishables(TM) (family-size entrees with a
  24-day shelf life)
• Kraft
• Strong brand awareness among children for lunch
• Recent Its Pasta Anytime acquisition
• Expected to launch other shelf-stable convenience
  meals
• History of aggressive marketing (Kraft took away
  12.6 market from Hamburger Helper in just 2nd
  year of launch of Stove Top Oven Classics)
• Response from non-category competitors such as
  restaurants

Source Refrigerated Frozen Foods magazine
45
Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

46
Revenue Projections Market Potential

• Market potential for target consumers (2002)
• Total female population at age 35-64 57,979
• of population who work 60
• households with income gt50K 32
• usage occasions per week 2
• work weeks per year 48
• Lunch Break (in 000s)
• Average price 3.15
• Total market potential 3,366,307
• Revenue projection (2002) as of market
  potential 0.7
• Mini Break (in 000s)
• Average price 1.39
• Total market potential 1,485,450
• Revenue projection (2002) as of market
  potential 0.7

Assumptions based on U.S. Census, labor
statistics, and Nielsen panel data
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Revenue Projections Lunch Break
48
Revenue Projections Mini Break
49
Agenda

• Market Learning
• Value Creation
• Value Delivery
• Criteria for Success
• Potential Threats
• Revenue Projections
• Long Term Considerations

50
Long Term (gt 3 years) Considerations

• Continuous innovation
• To sustain first mover advantage
• Consider entering ethnic markets
• Fast growing
• Line Extension
• Target men and kids for lunch
• Global branding
• For sustained growth

51
Executive Summary

• Objective
• Create a three year sustainable growth strategy
  for General Mills for single-serve shelf-stable
  food category.
• Strategy
• Pursue a growth strategy for the Adult lunch
  market
• Target economically affluent, yet time poor
  consumers
• Provide a means to consumers to do something good
  for themselves, even when they feel they dont
  have the time

52
Sources References

• Foods Non Alcoholic Beverages Industry Survey,
  Standards Poors, June 2001
• Filling the need to feed with speed, Chicago
  Tribune, September 11, 2001
• NPD Reveals Americans Eating more meals prepared
  at home, Business Wire November 01, 2001
• Heinz meanz microwaveable, The Grocer, April
  2001
• Funny Bagels A Serious Rival to Kraft?,
  Brandweek, Aug 2001
• Drug raises the bar on meal replacement snacks,
  Drug Store News, Oct 2001
• Euromonitor national statistics
• Euromonitor Meat and Poultry in the USA
• Euromonitor Frozen Food in the USA
• National Provisioner, August 2001
• Websites
• OneSource
• Euromonitor
• Company Websites
• General Mills Project Website
• Bureau of Labor Statistics
• www.foodprocessing.com
• U.S. Census

53
Backup Slides
54
Working Women
55
Data Collection Methodology

• Secondary Research
• Consumer Survey
• Details follow
• Taste Test
• 6 consumers (team)
• Grocery Store Walks
• We include only grocery stores because most
  consumers buy convenience meals from these stores
• Krogers, Food Lion and Harris Teeter

56
Consumer Survey

• Objective
• A preliminary survey was conducted to obtain
  information on consumer behavior, and perceived
  value of Bowl Appétit and competitors
• Sample Size
• 47 respondents
• Methodology
• Interviews conducted at public places to have
  access to diverse users of convenient meals (such
  as sport stadiums, coffee shops, and
  supermarkets)

57
Customer Survey Form
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Survey Demographics

• Gender
• 36.2 Males, 63.8 Females
• Employment
• 42.5 Students, 34.0 Professionals, 17.0 Others

Age
Race
59
Consumer Survey Results

• Alternative to cooking
• 59.6 eats out
• 53.2 uses fast food
• 25.5 uses ready-to-heat products
• 14.9 uses frozen food
• Consumers look for read-to-heat products at
• Frozen aisle 42.6
• Dry-Food (rice or pasta) aisle 42.6
• Other 14.8
• Consumer Behavior
• 46.8 of consumers eat the product by itself
• 12.8 of consumers eat with complement or as a
  side dish
• 68.1 consumers eats the product at home
• 21.3 consumers eats the product at work

60
Consumer Survey Market Insights

• Consumer perceives Bowl Appétit as
• Lunch 31.9
• Dinner 40.4
• Snack 19.1
• Late Night 8.5
• Positioning
• At least 1/3 of consumers does not differentiate
  Bowl Appétit from frozen
• 34.4 associates Bowl Appétit with fast food

61
Consumer Survey Market Potential

• Frequency of usage
• 29.4 consumers use products twice per week
• 6.3 consumers use products once a week
• Potential improvements
• 12.8 would like larger portion
• 10.6 is interested in healthier options
• 19.1 would like to have meat included
• 21.3 would like improvements on taste and/or
  consistency of products

62
Taste Test Product Samples
63
Bowl Appétit Rice Bowl (AKA porridge)
64
Bowl Appétit Potato Bowl
65
Bowl Appétit Pasta Bowl
66
Taste Test Results
67
Taste Test Summary
68
Taste Test Summary (continued)
69
Taste Test Summary (continued)
70
Taste Test Summary (continued)
71
Taste Test Summary (continued)
72
Brand Analysis Brand Report Card

• Excellence at delivering consumer benefits
• Taste tests reveal unfavorable results
• Unmet need of control
• Relevance
• Consumers want more nutritional value
• Pricing strategy equivalence to value perception
• Price must relate to value added from control
  convenience

73
Brand Analysis Brand Report Card

• Positioning
• Points of parity great
• Points of difference shelf stable but must
  deliver on taste/quality
• Consistency
• Merchandising is inconsistent
• Unclear messages to consumer
• Sensibility of portfolio hierarchy
• Excellent maximization of market coverage
• Must evaluate internal brand hierarchy

74
Brand Analysis Brand Report Card

• Equity building
• Must maximize brand awareness
• BM understanding of consumer perception
• Must further research consumer likes/dislikes
• Proper support and sustainability of support
• Excellent advertising consumer promotions
• Monitoring sources of brand equity
• Insufficient internal data to assess this

75
Bowl Appétit faces competition from other
categories

• Frozen ready meals
• 9.5B market in 2000
• 6 YTY growth primarily due to product
  development in low-fat meals, premium quality
  products and microwaveable alternatives
• Ready-to-serve canned soups
• 8.4 increase in 2000
• Meal replacement bars/snacks
• 1.5B in sales with 13 growth
• Restaurants
• Annual meals eaten in restaurant per person
  declined from 66 in 1999 to 64 in 2000
• Fewer take-out meals, down from 73 meals per
  person to 70 in 2000

Source Information Resources, Inc.
76
Competitive Overview