Smucker’s Uncrustables in France: A New Approach

1. Smucker’sUncrustables in France: A New Approach Steve Flaherty Nathan Jones Matt Overholser Zach Rosenfeld

2. Possible Segmentation Options • Targeting Elementary Schools • Geographic: Schools in urban areas • Benefits: Eliminate preparation time, no mess, easy to store and serve • Teenagers for quick meal • Psychographics: Multi child families, where kids are highly involved and on the go • Demographics: Male and Female children ranging from 13-19, from middle income families

3. Segmentation/Targeting • Current: (U.S.) • Women who have children school aged children ages 5-12 • Middle income families • New Target: (France) • Women and Men who run single parent households with children ages 5-12 • Middle income families • This segment is composed of nearly 1.423 Million French consumers • Living in urban areas, with a middle class standard of living

4. Major Competitors • Unilever Bestfoods • Foods division of Unilever • Responsible for more than half of Unilever’s sales • Produces Skippy Peanut Butter, which is best selling peanut butter in the world, but not well known in France • McCain • Specializes in the production of frozen potato products, oven ready entrees, pizzas, waffles, etc.

5. Current Product • White Bread • Jif Peanut Butter • Smuckers Jelly (strawberry/grape) • 210 calories per serving • 80 calories from fat • 7 grams of protein • Total fat is 9 grams • Total carbohydrates are 25 grams • 2% calcium • 6% iron

6. New Product Wheat Bread will replace white bread More healthy Feeds the health conscious consumers of France Strawberry Jam and Orange Marmalade Appeals to the flavor preferences of French Consumers Cheaper to produce in France Reduced Fat JIF peanut butter More appropriate for target market Maintain same size and design of product Economies of scale/ appeal of American product

7. Packaging/Labeling • Teaming up with Kraft: Lunchables • One Uncrustable/package • Works as a complete meal, w/lunchables cheese and crackers • Vacuum sealed for freshness • Refrigerated, no longer frozen • Must be written in French • Packaging follows local regulations • Uncrustable will still be name • White plastic package with clear lid, kept within a cardboard box • Product is visible to the consumer

8. Production Partnering with Kraft and Tibbett & Britten to produce the best possible product

9. Where to Produce? • We will be producing Uncrustables within the existing facility for Kraft/Philip Morris in France. • The products come together as a whole, and for this reason, makes sense to only produce them as a whole unit • Production facility within Paris

10. Production • Uncrustables: • JIF Peanut Butter will be shipped via Tibbett & Britten from the United States to production facility in France • JIF is not currently available within France, so will be brought in from the United States • Strawberry Jam and Orange Marmalade will be used by available jam/jelly manufacturers within France • These flavors are the cheapest to produce, and are big sellers within the French Market • We have no direct benefit of shipping Smucker’s jams into France, as they do not have a presence there

11. Production • Uncrustables: (continued) • Bread for the Product will be provided by from Kraft producer • We will use wheat bread as a healthier alternative, and will produce it within France to keep fresh and reduce shelf life of bread between production, shipping, and final product • Once finished, will be vacuum sealed within own packaging, and included with the Lunchables package • Once completed, will need to be chilled, and held at one of Tibbett & Britten’s holding facilities before being sent to final retail location with Carrefour

12. Production • Lunchables: • We will work with Kraft and DairyLea to produce Cheese, Meat, and Crackers for the lunchables pack • Use what Kraft/DairyLea currently have within their lunchables product • Once finished, will be put into plastic container, and vacuum sealed for freshness • Product must then be kept chilled to keep fresh—can be done at Tibbett & Britten facilities

13. Distribution • Tibbet & Britten will handle distribution of the product in France • Well suited to handle Uncrustables • 19 distributions centers throughout the country • Capable of handling ambient, chilled, and frozen products • Food and beverage sector is the company’s largest at 39% of sales

14. Distribution • Tibbett & Britten will provide value-added services such as CRM, order control, and promotional packaging • Tibbett & Britten has a strong relationship with Carrefour • Tibbett & Britten will distribute the product to Carrefour stores in France

15. Distribution • How will Uncrustables be made? • No Smucker’s peanut butter operations in Europe • JIF Peanut butter will be shipped from the U.S. to the Kraft manufacturing facility in France • Ocean liners, rails, and trucks will be utilized by Tibbet & Britten • Jams will be shipped directly from a local jam manufacturing facility in France • Products transported by truck

16. Distribution • To the store! • Once the product has been produced Tibbett & Britten will take over • They will perform both primary and secondary distribution • Based on expenses, Tibbett & Britten will choose the mode of transport that will best minimize cost • We will be stocking our product exclusively at Carrefour stores, as Lunchables is already a known product in France, and will not have to struggle with its introduction

17. Pricing • Positioned as a Med/High end brand implying good quality and a well made product • Retail price of 2.69 Euro • If selling in America, this is equivalent to $3.49 • This price allows us to target our middle class urban customers that we want.

18. Costs • Production • Due to slight change in product, production costs will be 17% of the unit retail price • = .46 Euro per unit • Distribution • Item is now chilled instead of frozen, reducing distribution costs but still higher than regular food. Distribution costs are 10% of the unit retail price • = .27 Euro per unit

19. Adding it all up • Kraft • Kraft will be paid .46 euros per unit plus a 30% fee for manufacturing the product. • Thus, costing .60 euros per unit • Tibbett Britten • Tibbet Britten will be paid .26 euros per unit plus a 30% fee for distribution of the product. • Thus, costing .35 euros per unit • Total • It will cost .95 euros per unit to manufacture and distribute

20. What’s Left • Selling price • Selling product to stores for 1.10 euros and selling at a Manufacturers suggested retail price of 2.69 euros • Leaves .15 euros profit per unit to be spent on promotions.

21. Expected Sales • In 2000, there were 8,888,000 families with dependent children • 1.423 million were single parent households • 7.465 million were two parent households • Expected 75% of single parent households and 30% of two parent households buy just one unit. • 3,306,750 units sold • * .15 = 496,012.50 for promotions/profit

22. Promotion • Before introducing the Uncrustables Lunchable, we are going to begin a contest in existing Lunchables packages: • The contest will ask participants to guess what will be the two main ingredients within the sandwich, and what the name of the sandwich will be • Participants must then send in their game cards, and winners with the correct information will receive vouchers for selected football games from their favorite teams.

23. Promotion Restrictions • The ticket vouchers will run on a “while supplies last” basis • The promotion will end two weeks before the Lunchables Uncrustables will enter France • Ballots can either be dropped off in Carrefour store displays, or sent through the mail • There will be a “no purchase necessary” option through our print advertisement

24. Promotion: Product Displays • Good product displays increase product visibility • Increased visibility leads to an increase in sales • Many companies use displays in Carrefour stores • End-of-aisle displays • Free standing displays • Endcaps

25. Promotion Costs • Paper and Printing: 150,000 Euro • Store Displays: 50,000 Euro • Tickets: 10,000 Euro • Advertising at Game Stadium: 20,000 euro • Remaing to be spent on newspaper ads and/or printing “free game piece sheets”