Betty Crocker’s Lunch Break and Mini Break …you Deserve it!

1. Betty Crocker’sLunch Break and Mini Break…you 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 1:15) 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 don’t have the time Take control of adult lunch market by empowering consumers with the perception of convenient “real food preparation”!

3. Market Learning Value Delivery Value Creation 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.

4. Agenda • Market Learning • Value Creation • Value Delivery • Criteria For Success • Potential Threats • Revenue Projection • Long Term Considerations

5. Market Learning Consumer Trends • Ready-to-heat category is growing while restaurant foods are declining • Opportunity to build a convenience lunch market for affluent households • Consumers want: • C whole meal (meat, vegetables, and carbohydrates) • 25% Americans skip breakfast on average • Convenience • Cooking is a “special occasion” activity • Average American’s 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 There is an opportunity to capture the growth in ready-to-heat category. Source: Information Resources, Inc., NCBA

6. Market Learning High Health High Price Low Price Low Health Competitive Analysis: Price vs. HealthMapping of Single Serve, Convenient Meals Consumers associate shelf stable products with low health Source: Company websites, store walks and taste test conducted by team

7. Market Learning Good Taste Low Price High Price Bad Taste Competitive Analysis: Price vs. TasteMapping of Single Serve, Convenient Meals Consumers are willing to pay for taste Source: Company websites, store walks and taste test conducted by team. See backup slides.

8. Market Learning Bowl Appétit Brand Equity Analysis:Brand Report Card

9. Take control of adult lunch market by empowering consumers with the perception of convenient “real food preparation”. Strategic Vision “When you think of lunch, think Betty Crocker”.

10. Value Creation Strategic Vision: Implementation • Leverage Betty Crocker brand equity • Leverage the recent Pillsbury’s acquisition by co-branding with Green Giant • Leverage co-branding opportunities with current (Heinz-StarKist) or future potential partners

11. Value Creation Product Concepts • Betty Crocker’s Lunch Break • total meal complete with dessert treat • Betty Crocker’s Mini Break • a complementary addition to lunch or any time there’s a need for a break Take a break. You deserve it!

12. Value Creation Betty Crocker’s 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

13. Value Creation Betty Crocker’s 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.)

14. Value Creation Betty Crocker’s Lunch Break:Value Proposition “ Regain control of your day by preparing a quick, convenient, wholesome meal. Do something good for yourself even when you don’t think you have the time”. “Control what you eat, even when you are busy.”

15. Value Creation Betty Crocker’s Lunch Break: New Value Curve • Low time and price investment • High control, taste and convenience • Total Solution for lunch – carbohydrates + meat/veg + dessert

16. Lunch Break 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 Appetit Mini Break Target customer Affluent consumers who want to improve their lunch experience by adding a hot side dish or who don’t have time to take a snack break Switching logic Higher quality, more nutrition, convenience coupled with trusted brand name Value Creation Betty Crocker’s Lunch Break and Mini Break: Strategy

17. Value Delivery 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’

18. Value Delivery Everything you need to for a good lunch, plus a sweet treat! Betty Crocker Lunch Break …you deserve it! Chicken Rice & Broccoli NET WT. 12OZ (300g) No Preservatives or Artificial Flavors Marketing Mix: Packaging Betty Crocker’s 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

19. Value Delivery Betty Crocker Betty Crocker Marketing Mix: Packaging Betty Crocker 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

20. Value Delivery Marketing Mix:Advertising, Placement, Promotion • Emphasize the ability to “control what you eat even when you are busy” via advertising • Leverage existing GM distribution ~89%+ ACV for current Bowl Appetit • Food, Drug, Mass Channels PLUS vending machines • Allocate promotion resources to target affluent consumers • End of Aisle displays facing Lunchables

21. 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 GM’s marketing strength • Product is available (distribution channels) • Leverage GM’s supply chain management Source: Discussion Peter McDonald

22. 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 It’s 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 like restaurants Source: Refrigerated & Frozen Foods magazine

23. 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 >$50K 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 0.75 Assumptions based on U.S. Census, labor statistics, and Nielsen panel data

24. Revenue Projections – Lunch Break

25. Revenue Projections – Mini Break

26. Long Term (> 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

27. 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 don’t have the time • Take control of adult lunch market by empowering consumers with the perception of convenient “real food preparation”!

28. Backup Slides

29. Working Women

30. 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

31. Market Learning Value Creation Value Delivery Consumer Survey • Objective: • A preliminary survey was conducted to obtain information onconsumer 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)

32. Customer Survey Form

33. 14-18 Not 19-24 4% 36+ Reported Caucasian 19% 30% 34% 41% Asian- 31-35 African- American 6% American 25-30 6% 19% 41% Survey Demographics • Gender • 36.2% Males, 63.8% Females • Employment • 42.5% Students, 34.0% Professionals, 17.0% Others Race Age

34. 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

35. Consumer Survey: Consumer Behavior • Product consumption – Time & Place • 68.1% consumers eats the product at home • 21.3% consumers eats the product at work

36. 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 Appétitwith fast food

37. 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

38. Taste Test Product Samples

39. Bowl Appétit Porridge

40. Bowl Appétit Potato Bowl

41. Bowl Appétit Pasta Bowl

42. Taste Test Results

43. Taste Test Summary

44. Taste Test Summary (continued)

45. Taste Test Summary (continued)

46. Taste Test Summary (continued)

47. Taste Test Summary (continued)

48. Market Learning Value Creation Value Delivery Brand AnalysisBrand 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

49. Market Learning Value Creation Value Delivery 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

50. Market Learning Value Creation Value Delivery 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