FRUITTELLA JELLIES

1. FRUITTELLA JELLIES RESEARCH REPORT, Warsaw, december 2013 Preparation: Quantitative reportQualitative toplines Kinga Soczewka Joanna Paśnik Jacek Krzeszewski Katarzyna Backiel

2. Business perspective The jellies segment is the only constantly growing segment in the confectionery category. The competition is fierce and there are a number of considerable players in the running. Business task: • To identify the sources of problems with falling sales and to take actions aimed at reversing the trend and using the market growth dynamics through an offer which appeals to the consumers (except for a price reduction, which is impossible due to the product margins). Business objective: • To optimise the jellies range in terms of the packaging, the product type and the SKU quantity. Anticipated applications of the research findings: • Learnings concerning the current packaging • Evaluation of the new packaging • Should any of the SKUs receive a negative evaluation, we can replace it with one that is desirable to the consumers and in line with their expectations.

3. Research objectives To analyse the jellies market in Poland and to optimise the Fruittella portfolio. The research objective was to analyse the jellies market in Poland, with particular consideration of the Fruittella brand. • To identify the role of the packaging and of the product itself as the possible factors affecting sales • To learn the consumers’ opinions about the packaging and the jellies range of the Fruittella brand versus the competitors • To establish the consumers’ preferences concerning the product alone – the colour, the shape, the flavour, and the crucial factors in choosing a specific product The research was also intended to answer questions concerning the awareness of individual brands of jellies and their images in the eyes of the consumers. An analysis of the price flexibility of Fruittella jellies was also conducted.

4. Methodology and sample The research comprised two stages: Qualitative research: FGI with mothers Quantitative research: online survey with 20-50 y/o women Qualitative research*: 4 FGI Mothers of children aged 4-9 Regular buyers of jellies Location: Warsaw (2 FGI), Siedlce (2 FGI) Fieldwork timing: 6 and 9 December 2013 Quantitative research: N=350 Women aged 20-50 Buy jellies for themselves or their children Location: whole country Timing: December 2013 * See details of the qualitative sample selection on the following slide

5. Summary

6. Summary – the jelly market in Poland Nearly half of the women aged 20-50 declare that they buy jellies. Most often it is especially mothers of children aged 3-6 with secondary education who use the category. Jellies do not have a large group of heavy users, e.g. in comparison to chocolate or chewing gum. Jelly consumption also entails frequent purchases of confectioneries from other categories. The most crucial factor which determines the choice of jellies is their flavour, which should be intense, distinct, non-artificial and naturally fruity. This factor is followed by the price and the brand in order of importance. Another important factor which rationalises the choice of jellies is the content of vitamins and fruit juices – naturalness. A vast majority of the respondents buy only packaged jellies. The primary places of purchase include supermarkets, hypermarkets and discounters. Jellies are bought on impulse when major shopping is done. Therefore, their presence and visibility on the shelf are essential. Children have a considerable impact on the choice of jellies, and so it is important for the packaging to catch their eye, to trigger their interest and to engage them emotionally.

7. Summary – market leaders in the category The second largest brand is Śmiejżelki – commonly liked, known and bought. Śmiejżelki has the image of a brand which combines a fruity flavour, health (vitamins) and plenty of positive energy, especially on the part of children (liked by children, a guarantee of fun). The unquestionable leader on the Polish jellies market is the Haribo brand. This brand is decidedly the strongest and the most liked, as well as having the image of a leader. Haribo is the archetype of the category, and as many as ¾ of the respondents spontaneously indicate the brand as the first one. Haribo is a synonym of the highest quality and an outstanding taste.

8. Summary – other brands The Fruittella brand is quite well-known (also in other categories), but it performs poorly in terms of triggering trial. As the main reasons why they do not use it, the respondents indicate the lack of awareness and availability in shops. Reservations concerning the form emerge only in the flavour test (qualitative research). The Fruittella brand image is based on naturalness, a fruity taste and health. At the moment, the consumers take an indifferent emotional approach to the brand. Both Jutrzenka brands – Akuku! and Miśki – enjoy quite a strong position (exceeding Fruittella). Their position is based mainly on a more affordable price. Akuku! is a liked brand, while Miśki has a group of loyal users. Neither of them has a clear image. Zozole and Frugo awareness and use indexes are close to those of Fruittella. Frugo is a brand which introduces new products. Neither is addressed to small children really. The LIDL brand (Sugarland) is poorly known due to its limited distribution, but it does have a group of loyal users.

9. Summary – Fruittella packaging and price Fruittella packs were evaluated similarly to Haribo, while Śmiejżelki packaging was very polarising. However, Fruittella packaging alone does not generate a high purchase intent , and cannot defend itself in the context of the packs which are supported by the strongest brands in the category (a brand which is powerful in the category stands behind the packaging of Haribo jellies). Compared to the competitors, Fruittella packaging has the most shortcomings: the content is not visible and the colour is (too) red. Fruittella packaging the most strongly communicates that the product is addressed to children. The packs effectively convey fruitiness (which is consistent with the image) and diverse shapes. However, it also triggers the most negative associations (boring, too red). The packs fail to communicate naturalness, which is Fruittella’s differentiating factor, and which may support the decision to buy this particular product. The Fruittella brand fails to justify the high product price. For Fruittella, the optimal price should amount to PLN 3.25-3.75, while Haribo can afford prices which are higher by ca. PLN 0.50-0.75. For Śmiejżelki , the respondents are willing to pay even PLN 1 more.

10. Summary – flavours The consumers’ flavour preferences can be split into four territories: Flavour mixes (fruit, exotic fruit) Non-standard (sour, Coca-Cola) Classic fruit (strawberry, raspberry, lemon) Exotic fruit (pineapple, banana) – the least popular When building the portfolio, it is advisable to cover all the four territories in order to maximise the reach. The most eagerly bought flavours of jellies include: Fruit mix Sour Coca-Cola When addressing a product to children, the following flavour should also be taken into account: Strawberry Raspberry

11. Recommendations

12. Recommendations In order to boost interest in the product and to improve its visibility on the shelf, we suggest the following changes in the packaging design: • Improvement of the colours: they should be more modern and harmonious especially in the case of the “Misie” [gummy bears] pack • Improvement of the picture of the bear: it should be more friendly and less caricature-like • A better presentation of the product inside: a relatively large window or a precise photo • Diverse packaging colours giving a sense of a diverse portfolio It should be considered whether the packs should offer more support to naturalness, which is an attribute of the Fruittella brand image. It is advisable to conduct a qualitative sensory test aimed at optimising the product recipe. The studies conducted until now show the possible weaknesses of the taste and the texture: • The taste of the jellies should be more distinct, intense and diverse – the jellies in different colours should taste different, and their shapes should convey the taste of the fruits which they resemble. • They should also be less hard. Flavour portfolio • The portfolio should comprise the following flavours: fruit mix, exotic fruit mix, sour, Coca-Cola, strawberry or raspberry Price • The recommended price of a standard small pack should be lower than that of Haribo and Śmiejżelki.

13. Users of jellies

14. Frequency of buying various confectioneries N=358, data in % Jelly category penetration: 45% among women aged 20-50 • One in four jellies users buys them at least once a week, similarly to the purchase frequency among lollipop and hard candy users. Chocolate and chewing gum have decidedly more heavy users. S3. How often do you buy the following confectionaries for you or other household members?

15. Description of jellies heavy users (women) • have children • live with a partner or are divorced • have secondary education • live in cities • share of heavy users grows as they get older • are heavy users of confectioneries in general • Those who frequently eat jellies, also eat a lot of confectioneries in general.

16. Who eats jellies? N=358, data in %, multiple choice question, percentage values do not add up to 100 47 indications Children in general 52% 73 indications The number of persons who indicated only: “me”: 47 “my child” (aged up to 18): 73 Jellies are most often eaten by the respondents. They also frequently indicated their husbands/partners and children, especially those aged 3-6. S4. Who eats jellies in your household?

17. Jellieseating occasions among children N=229 (households where a child eats jellies), data in %, multiple choice question, percentage values do not add up to 100 Children eat jellies in various situations – most frequently without a special occasion – at home, as a sweet snack during the day. They also eat them when meeting other children, while watching TV and films, less often as a snack at school or during trips. B1. In what situations does your child/ do your children eat jellies?

18. Jellies eating occasions among children (number of answers) Answer base: households where jellies are eaten by one child, multiple choice question, percentage values do not add up to 100 Children eat jellies in various situations – most frequently without a special occasion – at home, as a sweet snack during the day. They also eat them when meeting other children, while watching TV and films, less often as a snack at school or during trips. B1. In what situations does your child/ do your children eat jellies?

19. Category drivers

20. JELLIES – FUN FOR CHILDREN, HEALTHY AND CHEAP CONFECTIONARY IN ADULTS’ OPINION Category drivers Fun Shapes – playing with jellies, biting off pieces etc. Sucking, chewing Variety of colours Taste Variety of flavours Discovering flavours Playing with flavours – sour, sugary etc. Easy to share with other children FOR CHILDREN FOR ADULTS Healthy confectionery Relatively low sweetness Gelatine healthy for the joints (indicated in Warsaw) Vitamins Low price Efficiency – plenty of jellies in the pack Convenience – do not stain, e.g. as much as chocolate, are easy to eat out of home The users can see some important drivers in the category, but no barriers which children or parents might find daunting.

21. Product factors impacting on the choice of jellies – open question N=358, data in %, multiple choice question, percentage values do not add up to 100 The most important factors which impact on the choice of jellies include the product taste, brand and price. Also important are the composition and the appearance (shape and colour). The packaging comes into play when the purchase is made, and it is not an important element in the category perception. A1. Which are the 3 most important things you pay attention to when choosing jellies? Select 3 most important things.

22. Product factors impacting on the choice of jellies – open question (number of answers) Answer base: all respondents The most important factors which impact on the choice of jellies include the product taste, brand and price. Also important are the composition and the appearance (shape and colour). The packaging comes into play when the purchase is made, and it is not an important element in the category perception. A1. Which are the 3 most important things you pay attention to when choosing jellies? Select 3 most important things.

23. Product factors impacting on the choice of jellies – details 75% 48% 47% 32% 6%

24. Factors determining the choice of jellies N=358, data in %, multiple choice question, percentage values do not add up to 100 The vitamin content is very often indicated as an element which rationalises the product choice in the category. A2. What do you look at when choosing jellies? Please, select max. 4 reasons.

25. Factors determining the choice of jellies(number of answers) Answer base: all respondents The vitamin content is very often indicated as an element which rationalises the product choice in the category. A2. What do you look at when choosing jellies? Please, select max. 4 reasons.

26. Brand choice method N=358, data in % Importance of jellies brand 48% Importance of jellies price 47% There is no strong loyalty towards one brand in the category, and the users choose jellies from among numerous brands. Only one in five respondents is loyal to the brand which they always choose. A11. Which of the following statements best describes how you choose jellies?

27. Jellies composition Importance of jellies composition 32% N=358, data in %, multiple choice question, percentage values do not add up to 100 DESIRABLE AVOIDED Jellies should be as natural as possible, and contain vitamins and fruit juices. A3a_6. Which ingredients should jellies contain? A3b_6. Which ingredients do you avoid in jellies?

28. Jellies composition (number of answers) Importance of jellies composition 32% Answer basis: all respondents DESIRABLE Jellies should be as natural as possible, and contain vitamins and fruit juices. A3a_6. Which ingredients should jellies contain? A3b_6. Which ingredients do you avoid in jellies?

29. Jellies composition (number of answers) Importance of jellies composition 32% Answer basis: all respondents AVOIDED Jellies should be as natural as possible, and contain vitamins and fruit juices. A3a_6. Which ingredients should jellies contain? A3b_6. Which ingredients do you avoid in jellies?

30. Shape preferences N=73 (persons who choose based on shape), data in %, multiple choice question, percentage values do not add up to 100 Importance of shape 13% The most popular shapes of jellies are bears and fruits. Also popular are long and animal-shaped jellies. A5. Which shape of jellies do you buy the most frequently?

31. Hardness preferences N=103 (persons who choose based on texture / hardness), data in % Importance of texture 11% A vast majority of the respondents prefer soft or very soft jellies. Only one in five respondents prefers hard or very hard jellies. A4. Do you prefer hard or soft jellies?

32. Colour preferences N=49 (persons who choose based on colour), data in%, multiple choice question, percentage values do not add up to 100 Importance of jellies colour 10% The most favourite colours of jellies include red, yellow, multi-coloured and orange. The colours should be intense and diverse (in both different and individual packs). A6a. What colour jellies do you most often choose? The question is about the product (jellies) colour, not the pack colour.

33. Pack size preferences N=81 (persons who choose based on pack size), data in % Importance of pack size 5% The respondents seldom recall the pack size which they buy (qualitative research). In quantitative research, a vast majority of the respondents say that they choose jellies in medium packaging (200 g), while there are few packs of this type on the market (they are not packs sold most frequently  TO BE CONFIRMED WITH THE CLIENT). The consumers generally prefer packs which are not too large, but with more than just a few jellies inside. They should not be too large, either, so that the price would not be too high. A7. What packaging size do you most often choose?

34. Jellies size preferences N=34 (persons who choose based on jellies size), data in % Importance of jellies size 1% Three in four respondents prefer jellies of medium size. Large and small jellies are preferred by roughly the same shares of the respondents. A6. What’s your preferred size of jellies? The question is about the product (jellies) size, not the packaging size.

35. Category purchase

36. Place of purchase and form of jellies N=358, data in % A8. In which form do you buy jellies? Place of purchase: packaged jellies Place of purchase: jellies by weight • Jellies are bought by weight due to the price, because of the funny shapes which children find interesting, and because they can choose their favourite shapes. A vast majority of the respondents buy only packaged jellies – primarily in super / hypermarkets, but also in discounters. multiple choice question, percentage values do not add up to 100 A9. Where do you usually buy jellies?

37. Jellies purchase method N=358, data in %, multiple choice question, percentage values do not add up to 100 Jellies are most often purchased spontaneously while shopping for household products – the impulse purchase mode is prevalent, and therefore visibility on the shelf is essential. A10. On what occasion do you most often buy jellies?

38. Jellies purchase method (number of answers) Answer basis: all respondents Jellies are most often purchased spontaneously while shopping for household products – the impulse purchase mode is prevalent, and therefore visibility on the shelf is essential. A10. On what occasion do you most often buy jellies?

39. Method of choosing jellies for children N=229 (households where jellies are eaten by a child), data in % N=15 (the respondents whose children buy jellies for their own money), data in % caution: small number Discounter, supermarket and hypermarket Children have major influence on the choice of jellies although they do not buy them for their own/ pocket money. Mothers are guided mainly by their children’s preferences, and buy their favourites (in terms of shape, flavour and kind). B2. Which of the following statements best describes the way you buy jellies for your child/ children? B3. Where does your child by jellies themselves?

40. Brand awareness and use

41. mean for all brands Brand awareness and use (1/2) N=358, data in % 5 13 3 27 0 6 72 86 14 55 1 13 1 8 0 15 0 4 0 3 Haribo is the unquestionable leader on the jellies market. Another strong brand is Śmiejżelki. Fruittella is a brand with moderate recognition and fairly low trial. C1. Please, enter all the names of jellies brands which you can think of below. C2. It is sometimes difficult to recall all names. Take a look at this list and mark the brands you know at least by name, even if you have indicated them in the previous question. B3. Among the brands indicated on this list, which jellies have you ever bought? B4. The jellies of which brand have you bought within the last month? B5. The jellies of which brands indicated on the list do you buy the most frequently?

42. mean for all brands Brand awareness and use (2/2) N=358, data in % 5 13 0 6 by weight 0 3 0 3 0 4 Private labels enjoy scant awareness and purchase frequency although Sugarland has numerous loyal consumers. C1. Please, enter all the names of jellies brands which you can think of below. C2. It is sometimes difficult to recall all names. Take a look at this list and mark the brands you know at least by name, even if you have indicated them in the previous question. B3. Among the brands indicated on this list, which jellies have you ever bought? B4. The jellies of which brand have you bought within the last month? B5. The jellies of which brands indicated on the list do you buy the most frequently?

43. Awareness vs. trial – map N=358, data in % ever bought prompted brand awareness Fruittella enjoys considerable brand awareness. However, its use level is considerably below that of the competitive brands.

44. Reasons for not buying Fruittella jellies N=339 (persons who have not bought Fruittella jellies within the last month), data in %, multiple choice question, percentage values do not add up to 100 Connected with taste: N=32 (persons who did not like the taste of Fruittella jellies), data in %, multiple choice question, percentage values do not add up to 100 The most frequently indicated reasons for not buying Fruittella jellies include the lack of the product awareness and unavailability in shops. The product attributes (including the taste) are indicated less often due to the low trial. B8. You say that you haven’t bought jellies of the ... brand within the last month. Why don't you buy jellies of this brand? B8a. You say that you don’t buy jellies of ... brand because of the taste. What don’t you like about the taste of these jellies?

45. Reasons for not buying Fruittella jellies(number of answers) N=339 (persons who have not bought Fruittella jellies within the last month) The most frequently indicated reasons for not buying Fruittella jellies include the lack of the product awareness and unavailability in shops. The product attributes (including the taste) are indicated less often due to the low trial. B8. You say that you haven’t bought jellies of the ... brand within the last month. Why don't you buy jellies of this brand? B8a. You say that you don’t buy jellies of ... brand because of the taste. What don’t you like about the taste of these jellies?

46. Reasons for not buying Fruittella jellies(number of answers) Answer base: persons who have not bought Fruittella jellies within the last month), data in %, multiple choice question, percentage values do not add up to 100 The most frequently indicated reasons for not buying Fruittella jellies include the lack of the product awareness and unavailability in shops. The product attributes (including the taste) are indicated less often due to the low trial. B8. You say that you haven’t bought jellies of the ... brand within the last month. Why don't you buy jellies of this brand? B8a. You say that you don’t buy jellies of ... brand because of the taste. What don’t you like about the taste of these jellies?

47. Why do we buy certain brands? Multiple choice question, percentage values do not add up to 100 N=18 N=127 N=60 caution: small number The taste is essential when choosing each brand. What is important in the case of Haribo is the emotional attitude to the brand, and in the case of Śmiejżelki – the content of natural ingredients. B7. You say that you’ve bought jellies of the ... brand within the last month. Why do you buy jellies of this brand? Caution: This concerns the Fruittella brand only if it has been used within the last month. Otherwise, the brand is picked randomly.

48. PERCEPTION OF COMPETITIVE BRANDS:Śmiejżelki – FRUITY AND FUNHaribo – STRONG BRAND

49. Why do we buy certain brands? multiple choice question, percentage values do not add up to 100 N=18 N=13 N=17 N=16 caution: small number In the eyes of the consumers, Jojo, Akuku and Miśki brands offer good prices. Even here, however, the taste is important. B7. You say that you’ve bought jellies of the ... brand within the last month. Why do you buy jellies of this brand? Caution: This concerns the Fruittella brand only if it has been used within the last month. Otherwise, the brand is picked randomly.

50. PERCEPTION OF COMPETITIVE BRANDS:Jutrzenka – ARCHAIC BUT TASTYFrugo – FOR OLDER CHILDREN