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

3. 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”.

4. Translating market knowledge for value delivery Market Learning Value Delivery Value Creation • 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 • MarketLearning • Value Creation • Value Delivery • Criteria for Success • Potential Threats • Revenue Projections • Long Term Considerations

7. Market Learning Market Learning Value Delivery Value Creation • 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 Meyer’s Lunchables • Ready to Heat: Bowl Appétit, Campbell’s 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 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 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 High Health High Price Low Price Low Health 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 Good Taste Low Price High Price Bad Taste 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

16. 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 doesn’t 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 • ValueCreation • Value Delivery • Criteria for Success • Potential Threats • Revenue Projections • Long Term Considerations

18. Agenda Market Learning Value Delivery Value Creation • Strategic Vision • Product concepts • Alternatives Considered • Value Proposition • Strategy and Target Market

19. 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”.

20. Strategic Vision: Implementation Value Creation • 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 Crocker’s Mini Break in smaller portions • Leverage the recent Pillsbury’s 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

21. Product Concepts Value Creation • 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!

22. Alternative Options Considered Value Creation • 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 GM’s strength • We propose exploring this in future

23. Betty Crocker’s Lunch Break Value Creation • 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

24. Betty Crocker’s Lunch Break (Continued) Value Creation • Hot, Nutritious Meal • Rice or Pasta • Meat and/or Vegetable • Cookie or Brownie

25. Betty Crocker’s Mini Break Value Creation • 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.)

26. “ 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.” Betty Crocker’s Lunch Break:Value Proposition Value Creation

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

28. Betty Crocker’s Lunch Break: Strategy Value Creation • 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 Crocker’s Mini Break: Strategy Value Creation • 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 • 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

30. Lunch Break and Mini Break: Nutrition Goals Value Creation • Calories • Position calories between Healthy Choice (280) and Uncle Ben’s Noodle Bowl (400); less than 350 would be optimal—current Bowl Appétit range is 210 – 350 • Fat • Position fat grams between Healthy Choice (5) and Uncle Ben’s (8); 6 - 7 would be optimal—current BA range is 5 – 8 • Sodium • Position sodium % between Healthy Choice (25%) and Uncle Ben’s (41%); optimal would be 25% - 30%--current BA range is 36% - 41% • Protein • Position protein grams between Healthy Choice (14) and Uncle Ben’s (21); optimal would be 15 – 20—current BA range is 4 – 12 • Additional • Add calcium fortification to appeal to women aged 35 – 54, technology available in GM’s RTE cereals

31. Lunch Break and Mini Break Portions Value Creation • 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

32. Agenda • Market Learning • Value Creation • ValueDelivery • Criteria for Success • Potential Threats • Revenue Projections • Long Term Considerations

33. Value Delivery Market Learning Value Delivery Value Creation • Organizational Fit • Marketing Mix Elements • Packaging • Brand awareness: Advertising • Placement • Promotion • Co-branding • Strengthen current Bowl Appétit product • Potential Threats

34. Organizational Fit with General Mills Value Delivery • 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 Crocker’s Lunch Break 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 • 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

36. Marketing Mix: PackagingBetty Crocker’s Mini Break Value Delivery Betty Crocker Betty Crocker 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

37. Marketing Mix: Advertising Value Delivery • 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

38. Marketing Mix: Placement Value Delivery • 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 Crocker’s Mini Break

39. Marketing Mix: Placement (continued) Value Delivery • 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

40. Marketing Mix: Promotion Value Delivery • 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

41. Agenda • Market Learning • Value Creation • Value Delivery • CriteriaforSuccess • 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 GM’s marketing strength • Product is available (distribution channels) • Leverage GM’s supply chain management Source: Discussion Peter McDonald

43. Agenda • Market Learning • Value Creation • Value Delivery • Criteria for Success • PotentialThreats • 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 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 such as restaurants Source: Refrigerated & Frozen Foods magazine

45. Agenda • Market Learning • Value Creation • Value Delivery • Criteria for Success • Potential Threats • RevenueProjections • 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 >$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 0.7% Assumptions based on U.S. Census, labor statistics, and Nielsen panel data

47. Revenue Projections – Lunch Break

48. Revenue Projections – Mini Break

49. Agenda • Market Learning • Value Creation • Value Delivery • Criteria for Success • Potential Threats • Revenue Projections • LongTermConsiderations

50. 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