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Category Project: Liquid Tea

Category Project: Liquid Tea. Jason Call & Lauren Dockery. Overview. Who buys tea? Category Role Leading Brands Audit Summary Store Demographics Strategy and Tactics 2007 Audit Comparison. Category Snapshot. Enjoyed by all lifestyles. Demographics. Category Role.

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Category Project: Liquid Tea

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  1. Category Project: Liquid Tea Jason Call & Lauren Dockery

  2. Overview • Who buys tea? • Category Role • Leading Brands • Audit Summary • Store Demographics • Strategy and Tactics • 2007 Audit Comparison

  3. Category Snapshot • Enjoyed by all lifestyles

  4. Demographics

  5. Category Role Sales Volume (US) = $1.1 Billion Sales Volume (West South Central) = $100 Million From our data: Average $ Gross Margin = $0.87

  6. Product Penetration #1 #2 #3

  7. New Products in Region since 2007 • Arizona Rx Energy • Honest Tea • Lipton Pure Leaf • Milo’s • Tazo • Turkey Hill

  8. Leading Brands:TotalSales US: 1. Lipton - $430M 2. Arizona - $230M 3. Snapple - $180M 2/3 of total sales Region: 1. Lipton - $52M 2. Red Diamond - $19M 3. Arizona - $14M

  9. Leading Brands:% Repeat Buyers US: 1. Milo’s – 56.7% 2. Arizona – 55.3% 3. Lipton – 54.1% Region: 1. Red Diamond – 55.1% 2. Lipton – 54.8% 3. Sweet Leaf – 44.7%

  10. Leading Brands:Loyalty US: 1. Lipton – 54.4 2. Red Diamond – 49.2 3. Arizona – 41.6 Region: 1. Lipton – 68.0 2. Red Diamond – 63.4 3. Sweet Leaf – 39.2

  11. Deal or No Deal? Most probable tea buyers? • Struggling Urban households • Modest working households • Older couples • Families with children and non-working spouse Market Related Factors: • Moderate purchasing cycle (30 days) • High household penetration • High loyalty • Recent recession

  12. Audit Summary

  13. Category Scorecard

  14. Category Scorecard

  15. Category Scorecard

  16. Category Strategy • Both Flash Market Gas Stations have high gross margins in teas that are sold in smaller oz. • Larger grocery stores have a higher saturation of tea product and a large number of varieties within a manufacturer’s brand • Variety leads to increased profits • Gas stations more interested in traffic building • Grocery stores more interested in profit and cash generating

  17. Audit Summary High % Unique SKUs

  18. Category Tactics • Increase use of Private Label • Small perceived quality gap - “Quality Equivalent” • No switching cost • Expand Private label depth • Flavors • Expand Private label assortment • 6 pack bottles (Kroger)

  19. 2014 Audit SKUs - 136 US Sales - $1.1B (15%) P/L - 3 SKUs (Great Value) Increased average loyalty Category Review 2007 Audit SKUs - 56 US Sales - $1.3B No P/L data

  20. Thanks for Listening! Any Questions?

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