Bowl Appetit! New Product Strategy

Bowl Appetit! New Product Strategy Gina Forde (locker #51) Greg Jones Page Stull Jennifer Steele Alicia Tosi Brandon Wingert Mkting 468.202 Team #2

Agenda • Recommendations • Situation Analysis • Opportunity Assessment • New Product Strategy Implementation • New Product Concept Details • Marketing Strategies and Execution • Competitive Response • Revenue Projections

Recommendations:Portfolio Strategy General Mills should build a portfolio of complementary but incremental shelf-stable, single serve, offerings for their target market: women needing a convenient meal for lunch. Women Needing Convenient Lunch At Home At Work Niche Mainstream Bowl Appetit! Bowls Lunch Break! NaturaLunch Fresh, Mixable and Filling Organic and Hearty

Recommendations:NewProduct Strategy Lunch Break! and NaturaLunch will fulfill working women’s need of a portable lunch that is convenient to make, high quality (of ingredients and perception), and a hearty, complete meal. At Work Niche Mainstream Lunch Break! NaturaLunch Fresh, Mixable and Filling Organic and Hearty • Portable • Separate ingredients to mix • Green Giant brand to ensure high quality • e.g. Fettuccine Alfredo (with Green Giant vegetables & chicken) • Portable • All organic ingredients • Cascadian Farm branding to reinforce organic product • e.g. Zesty Beans & Rice (all natural)

Situation Analysis:Bowl Appetit! Category Bowl Appetit! should be viewed as an emerging category because of lack of store presence as well as its ill-defined competitive set • Single serve, shelf-stable does not have a “place” yet in the grocery store (pasta? rice? potatoes? etc) • Wide range of potential competitors for Bowl Appetit! in the consumers’ “consideration set” • Soups • Noodle Cups • Add Water Cups • Frozen Meals • Microwave multipacks

Situation Analysis:Bowl Appetit! Consumer The Bowl Appetit! consumer is found in several key lifestyle categories – with minimal presence in the other segments • Key lifestyle segments for Bowl Appetit!: • Young Singles • Childless Younger Couples • Establishes Families • Middle Aged Childless Couples (See Appendix for further detail) Source: Nielsen Panel Data

Situation Analysis:Bowl Appetit! Competitors The competitive set against which Bowl Appetit! competes is largely determined by which lifestyle segment is being targeted Source: Nielsen Panel Data

Situation Analysis:CategoryAssessment One potential void with no dominant player is in satisfying, pre-packaged lunch offerings for working women – thus an incremental opportunity for General Mills. Market Segments Offering-Market Matrix Kids Men Working Women At-Home Women Snack Meal Occasion Lunch ? Dinner Volume Potential Saturated Low Relatively High Medium Source: Focus Groups, Store Audit (see Appendix) & Panel Data

Situation Analysis:Defining theConsumer Several key characteristics define this customer segment of women and make it a viable and distinct target. • 60% of women are employed outside the home • Average time spent prepping for a meal has been decreasing (currently 30 minutes and projected to fall to 15 minutes) • Convenience is top priority for working women • Source: Food Industry Trends, Thomas Murphy, Penn State University

Situation Analysis:Defining theConsumer Understanding the decision-making process of the target consumer is crucial in the development of the product concept. Triggered Internally: Stressed for time, nutrition, good taste Need Recognition Triggered Externally: TV ads, shelf placement, in-store promos Active or Passive? Low involvement decision – many lunch alternatives, little time/thought/$ given to lunch decision Information Search How do professional women, young mothers weigh costs and benefits of lunch alternatives? Evaluate Alternatives Purchase Decision Which alternative provides the most value in terms of benefits desired? Low loyalty due to many lunch choices. Taste, packaging, ease of preparation are key to repeat purchases. Post-purchase Decisions

Situation Analysis:Consumer Insights Focus group results provide a deeper understanding into the needs of the consumer with respect to their current lunch offerings.

Situation Analysis:Consumer Insights Our focus groups also reveal that current competitive products do not fulfill the current needs of our target consumer. * Shown Uncle Ben’s, Bowl Appetit, Fantastic, and Its Pasta Anytime

Situation Analysis:Consumer Needs In-store intercepts and focus groups reveal working women’sdesire for a lunch that is filling (complete meal) as well highly portable. Opportunity Higher level of portability Chef Boyardee Maruchan Noodles Kraft Easy Mac More Filling Less Filling Uncle Ben’s Healthy Choice Pasta Anytime Lower level of portability

Fantastic Uncle Ben’s Its Pasta Anytime Bowl Appetit Healthy Choice Dinty Moore Easy Mac Chef Boy Cups Maruchan/ Nissin Situation Analysis:Consumer Needs In-store intercepts and focus groups also reveal working women have inadequate offerings that are both good tasting (i.e. fresh) and healthy. Opportunity High Level of Health Poor Taste (perception) Good Taste (perception) Low Level of Health

Dry meals are currently not perceived as fresh – thus creating a market opportunity It will be a hurdle to convince the consumer that a product can be both dry (shelf-stable) and fresh Situation Analysis:Consumer Needs The consumer’s perception of freshness is related to the type of distribution (as noted in focus groups and consumer research). PRODUCE MOST FRESH CANNED REFRIGERATED FROZEN LEAST FRESH DRY

There is clearly room for improvement on healthiness of current portable products. Consumers are especially aware of high sodium content in prepared foods. Situation Analysis:Consumer Needs Research also reveals that a significant portion of working women are concerned about having healthy offerings for the lunch occasion.

Insights Target market wants more filling and complete meal option for lunch. Portability (bulkiness) important for those bringing lunch to work. Perception of freshness and good taste is low for dry (ie shelf-stable) goods. Consumers care about eating healthy – current products do not meet this need. Consumers are wary of shelf-stable meat Consumers like the ability to mix their own meals due to the perceived higher level of control Opportunities Offer heartier meal (including meat and can of veggies) for lunch Connote portability with bag handle. Minimize package size/weight. Enhance perception of freshness and taste with co-brands & use of canned goods. Offer organic/natural product line in shelf-stable form Utilize a branded form of shelf-stable meat (ie Swansons canned chicken) Offer separate ingredients that consumers will combine themselves Key Consumer Insights:Summary Source: Focus Groups, Store Audit (see Appendix) & Panel Data

Situation Analysis:Consumer/Retailer Trends Grocery and industry trends indicate that the natural and organic product market is an emerging growth category • Overall grocery sales have has grown 1-2% annually since 1990; however, … • Natural food product segment has more than quintupled in size from $2 billion in 1993 to $15.6 billion in 2000. • Expected growth rate: 15.6% annually from 1999 to 2004 • Source: Homegrown Natural Foods website

Situation Analysis:Consumer/Retailer Trends • Organic/Natural Product Trends continued: • Almost 1/3 of the U.S. population currently buys organically grown foods (Source: Organic Trade Association) • In 2000, consumer sales of organic products in all retail channels was $5.6 billion (up 20% over 1999) • Of 1000 surveyed, 54% buy natural/organic products at least once a month • Source: Organic Trade Association website, FMI website

Situation Analysis:Company Evaluation General Mills has a strong portfolio of trusted brands that can be leveraged to successfully expand this category to a new target consumer. • Strengths • Brand equities (Betty Crocker, Green Giant, Yoplait); Betty Crocker accounts for 25% of company profits • Established distribution channels (grocery, mass) • Strong presence in multiple retail categories (cereal, yogurt, baked goods) • Technological capabilities in dry goods can be transferred across products and divisions • Customer knowledge • Low cost producers based on highly automated and flexible processes

Situation Analysis:Company Evaluation General Mills has a few challenges that should be considered when determining a new product strategy. • Weaknesses • Lack of strong presence in frozen category • Mainstream image; potentially difficult transition into exotic/ethnic/innovative categories. • Recent acquisition of Pillsbury may divert some focus and resources

Situation Analysis:Company Evaluation An internal analysis reveals the capability for further growth. General Mills: Internal Capability Analysis

Opportunity Assessment #1:Mainstream Market There is an opportunity to better satisfy the mainstream market of working women with a convenient lunch. • Provide convenient, complete lunch option for working women • Leverage Green Giant name to signal quality and freshness in a relatively new shelf-stable category

Opportunity Assessment #2:Niche Market Because the organic market is becoming more mainstream, it is an attractive market that General Mills should pursue. • Natural/organic food industry is highly fragmented • Big players (e.g. Kraft, Kellogg’s, General Mills) exploring organic market potential • Leverage Cascadian Farm brand. Cascadian Farm is #1or #2 in nine different categories. Research shows brand is expandable in other categories because of strong credibility with natural/organic shoppers. (Steve Sanger, CEO General Mills)

Product Concept #1: Lunch Break! by Green Giant Product Concept Description: Lunch Break! by Green Giant. Introducing Lunch Break! from Green Giant. Finally, a fresher, and more convenient option for lunch that tastes great. And its portable and shelf stable so there is no need to freeze or refrigerate. Lunch Break! includes a pasta bowl to which you add fresh Green Giant vegetables, Swanson chicken, seasonings and chicken broth – all included in the package! You just mix together and microwave for 3-4 minutes and you have a great meal ready when you are! We know you have busy lives and lunch is often rushed. Green Giant Lunch Break! is a great lunch option to take to work or even to eat at home… and it is offered in a variety of flavors such as Pasta Primavera. Now when you go to the grocery store you will know what to buy for lunch! Lunch Break! from Green Giant “Ready when you are”

Product Concept #1:Lunch Break! Details Branding: • Green Giant brand signals freshness and quality; more relevant than Betty Crocker • Co-branding with meat manufacturer • Swanson chicken and tuna • Branded chicken reassures consumers of quality of shelf-stable meat Packaging: • Package resembles lunch bag • Hard and durable (box vs. bag material) • Handle on package to communicate portability • Size of package must be minimized – consumers do not want to bring bulky package to work • Clear openings allow consumers to see branded meat and can of fresh Green Giant Vegetables

Product Concept #1:Lunch Break! Details Ingredients: • Pasta/rice bowl with seasonings • Swanson can of meat (chicken or tuna) • Can of Green Giant vegetables Price: • Retail price point of $3.50 • Consumers willing to pay more for complete meal (per focus group) • Higher costs relative to Bowl Appetit! Positioning/Target: • Women at work • Fresh and portable • Satisfying – a complete lunch • Mixable ingredients

Product Concept #1:Lunch Break! Details 4 SKUs/Flavor ideas: • Pasta Primavera • Fettuccine Alfredo with Chicken • Rice with chicken and vegetables • Mexican Rice

Product Concept #1:Reaction to Lunch Break! Focus group reaction to the Lunch Break! concept lends credence to the idea that this is a viable product idea for working women

Execution:Lunch Break!Promotional Strategy Promotional strategy addresses all three stages of the target consumer purchase pattern. • Awareness • Catalina coupons/announcement with Green Giant purchases (prior and during launch) • Introduction of Ms. Green Giant • Gain Trial Purchase • Smart Source coupons at point of purchase on shelf • Catalina coupon triggered off “competitive purchase” (Uncle Ben’s) • Repeat Purchase • Advertising • Magazine: Working Women, People • Television: Prime time news • Catalina coupon triggered off Lunch Break purchase

Execution:Lunch Break!Launch Tactics Launch tactics will reflect a product concept that is directed toward the mainstream consumer & leverage General Mills’ distribution capabilities. • Distribution • At least 90% ACV for grocery retailers selling >$2MM • Store Placement • Prepared Meal section (if applicable) or Rice/Pasta aisle

Product Concept #2:Cascadian Farm NaturaLunch Concept Description: Cascadian Farms NaturaLunch Introducing NaturaLunch from Cascadian Farms. Made with organic seasonings, pastas or rice, this is a ready-to-eat shelf stable meal option that requires only a microwave. NaturaLunch is a great lunch option for work or home. Now you can eat healthy anyplace, anytime. Plus there is nothing processed or artificial about this product – and it has only ½ the sodium of other prepared meals! NaturaLunch also has the quality and taste you desire. No need to freeze or refrigerate – just add water and microwave for 3-4 minutes. “NaturaLunch – Taking care of you.”

Product Concept #2:NaturaLunch Details Branding: • Cascadian Farm branding – current organic equity Packaging: • Baglike package (like Lunch Break!) with handle – operational efficiencies from using same package • Size of package minimized to increase portability • Bowl inside – same bowl as Bowl Appetit! (leverage operational efficiencies)

Product Concept #2:NaturaLunch Details Ingredients: • Bowl inside with everything included (like Bowl Appetit!) • Sodium content minimized (no more than 600 mg) Price: $3.25 • Premium offering over similar non-organic offerings (such as Bowl Appetit!) Positioning/Target: • Women who work and buy organic

Product Concept #2:NaturaLunch Details Flavor ideas: Use current Cascadian Farms frozen entrée offerings as starting point for SKU offerings 6 SKUS: • Zesty Beans and Rice • Passion Pasta Primavera • Tantalizing Teriyaki Rice and Vegetables • Juicy Japanese Noodles and Vegetables • Cous Cous with Tomato & Basil Sauce • Ravishing Ravioli with Lima Beans

Product Concept #2:Reaction to NaturaLunch Focus Groups confirm that natural/organic products are in high demand making NaturaLunch a desirable alternative to current offerings.

Execution:NaturaLunchPromotional Strategy Promotional strategy addresses all three stages of the target consumer within the niche market purchasing pattern. • Awareness • Catalina coupons/announcement with Cascadian Farm purchases (prior and during launch) • Gain Trial Purchase • Grass Roots ad campaign • Smart Source coupons at point of purchase on shelf • Catalina coupons triggered off “competitive” product purchase (Fantastic, Healthy Choice, Uncle Ben’s) • Repeat Purchase • Advertising • Magazine: Preventative Health, Working Women, People • Television: Prime time news • Catalina coupon triggered off NaturaLunch purchase

Execution:NaturaLunchLaunch Tactics Tactics to launch niche product concept will leverage mass grocery capability of General Mills and also capabilities of Cascadian Farm. • Distribution • Target natural food stores and grocery retailers with organic/specialty food sections • Store Placement • Organic food section in major grocery stores • In organic food stores, place near soup cups, etc

Competitive Response:Anticipating & Pre-empting • ConAgra • Has technology to complete in pre-packaged meals in both frozen and shelf stable • Dominant in healthy, frozen category (“Healthy Choice”); potential to cross over to shelf stable • Kraft • Presence in shelf-stable under “Its Pasta Anytime” brand. This newly acquired brand has a high potential for expansion in shelf-stable • Private Label • Fastest growing in frozen and dry grocery. As more branded players expand shelf-stable category, technologies become easier for private label to adopt and enter the market Potential early entrants may be those that have strengths in both frozen and shelf-stable. Consumers will trust the brand (due to brand recognition) and retailer acceptance is more likely.

Competitive Response:Retaining and growing market share Category success will be contingent on continuing to understand the consumer and their evolving needs within this emerging category • Line extensions to support General Mills’ 1st mover advantage • Rice bowl in LunchBreak! • Curry Peanut Fry in NaturaLunch • Innovation • Reduction in preservatives/sodium • Add more protein and other minerals important to target such as calcium and folic acid

Revenue Projections:3 Year Summary Because these two products serve different consumer markets the cross-over is minimized, resulting in a projected total 3-year revenue of approximately $250MM. Lunch Break Naturalunch Data gathered from US Census Bureau & Food Marketing Institute

Revenue Projections:General Assumptions • Year 1 • There will be no direct competition • Year 2 • Competition will come into this market • Demand will be further stimulated due to category expansion, but we will have to share this demand • Year 3 • Market will be in equilibrium

Revenue Projections:LunchBreak! Data Details

Bowl Appetit! New Product Strategy