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Tuna, Is it Chicken or Fish?

Tuna, Is it Chicken or Fish?. Adam Hoffman Justin Hamby Isaac Lane. Did You H ear A bout t he E vil T una?. In the tuna category, all evidence indicates that Starkist is in complete control of the category. They dominate: Shelf space (>50% in most stores) Revenue(>50%)

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Tuna, Is it Chicken or Fish?

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  1. Tuna, Is it Chicken or Fish? • Adam Hoffman • Justin Hamby • Isaac Lane

  2. Did You Hear About the Evil Tuna? • In the tuna category, all evidence indicates that Starkist is in complete control of the category. • They dominate: • Shelf space (>50% in most stores) • Revenue(>50%) • Stocking rate(>34%) A: Rumor has it he was rotten to the albacore.

  3. Category Audit Depth

  4. Facings by GM

  5. Know Your Role, Tuna • Tuna in cans • Core Traffic • Tuna in pouches • Cash Machine

  6. It’s Who We Are • Income • Different brands target different incomes • Family Size • High in families of 2+, but especially 5+ • Children’s Age • Highest when children between 13-17 are present

  7. Domination You Say? • Tuna is a $100,000,000 category (as of 2007) • Starkist is dominant • $50,000,000 • Private Label is second highest • $20,000,000 • All other brands make up the remaining 28% of the category sales. • Ex: Chicken of the Sea, Bumble Bee, etc.

  8. Location, Location, Location • Starkist has the only SKU’s in double digit stores • 11 Stores carry Light Tuna in Water • 10 Stores carry Light Tuna in Oil • Stocking rates • Starkist= 35% • Bumble Bee= 29.4% • Chicken of the Sea= 24.7% • Private Label= 15%

  9. Average GM vs. SKU’s

  10. Brand Score Card

  11. Anything you can do, I can do better Average Gross Margin Comparisons • Chicken of the Sea • 42.97% • Starkist • 36.99% • Bumble Bee • 33.62% • Private Label • 30.1%

  12. Private Label • Private label tuna accounts for 20% of the categories revenue. • That is second only to Starkist’s revenues. • All major retailers have some form of private label tuna fish. • Harp’s: 37.6% • Walmart: 31.29% • Target: 24.3% • Aldi: 10.6%

  13. Private Label cont. • Private Label will have an increasing effect on the category due to their relatively low prices but competitive gross margins. • Smaller households have increased their purchase of private label, while larger households have decreased their purchases electing to go with name brand tuna.

  14. Private Label Strategy (Wal-Mart) • Wal-Mart stocks 4 SKU’s of private label, 1 of which has 17 facings. We recommend that they introduce a higher quality/price private label. • Premium Lite? (Sam’s Choice Tuna?) • We also recommend that they increase the number of SKU’s they offer in their current private label.

  15. Private Label Strategy (Target) • More broad focus of private label. More SKU’s and spacing distributed to Private Label. More committed to Private Label. • Only stocks Starkist, Bumble Bee, and Private Label • High dependence on Starkist (75% total GM) • Would more involvement in an additional brand affect total GM? Would this affect Private Label?

  16. Private Label Strategy (Harps) • Small Spacing and SKU depth for Private Label. (4 SKU’s with 5 spacing's) • Higher GM on Private Label, but fewer SKUs. • Addition of higher quality Private Label?

  17. Private Label Recommendations • Overall recommendation for retailers to invest more in private label pouches. • Why? Higher Margins and (hopefully) increase buying power. • Reduce dependence on Starkist. • Focus on higher quality Premium lite type products to entice switching and to reduce brand loyalty.

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