Bowl Appetit Strategy & Concept Development

1. Bowl AppetitStrategy & Concept Development Scott Kaufman Bruce Kember Beth Landy Erik Michielsen Charles Persinger Sam Pfohl

2. Agenda • Objective • Situation Analysis • Bowl Appetit consumer profile • Competitive consumer profile • Strategy • Concept 1 • Concept 2 • Financials • Conclusion

3. Project Objective To generate the maximum level of sustainable growth in Bowl Appetit branded shelf-stable, single-serve food product revenues for the next three years.

4. Situation Analysis Section Bowl Appetit consumer profile Nielsen Panel Data analysis of: • Over-index • Rice & Pasta • Rice vs. Pasta • Typical user profile • Under-index • Rice & Pasta • Rice vs. Pasta • Typical non-user profile Situation Analysis - Consumer

5. Areas where Bowl Appetit Rice & Pasta both over-index (120+) • Female head of household 45 – 54 • Kids 13-17 (especially high in pasta) • Lifestyle: • Young singles • Middle aged childless couples • Female head employed full-time • East region Situation Analysis - Consumer

6. Rice – income $40,000 - $49,999 5+ family members Lifestyle: young singles (LS) Pasta – Income $70,000+ Families 3- 4 members Female head of household 35 – 44 Lifestyle: Childless, younger couples (LS) Mature fam. Comf-aff. Established families Over – Index (120+) Rice vs. Pasta Situation Analysis - Consumer

7. Typical Bowl Appetit user profile • Mostly Caucasians • Employed female head of household • Younger, with or without families • More affluent consumer (esp. pasta) • White-collar jobs Situation Analysis - Consumer

8. Under – index (<85) in both Rice and Pasta • Female head 55+ • No female head of household • Kids < 6 • Older singles • ‘Non-caucasian’ category • African American • Hispanic • Rural (ACN D) • Southern US Situation Analysis - Consumer

9. Rice – New families Asians Pasta – 1 member households Lifestyle: Mature families poor/getting by Middle-aged singles Female head unemployed Female head < HS education Not in the workforce Under – index (<85) Rice vs. Pasta Situation Analysis - Consumer

10. General non-user profile • Non – Caucasian/ethnic • Non-employed female head of household • No female head of household • Age 55+ • Poor Situation Analysis - Consumer

11. Situation Analysis SectionCompetitive consumer profile • Competitive landscape • Competitors – list & ranking • Share of market* • Competitive analysis • Uncle Ben’s • Kraft Easy Mac • Ragu Express • Maruchan • Stouffers • Healthy Choice Bowls Situation Analysis – Competitive

12. Competitive Landscape

13. Competitors Primary • Uncle Ben’s Bowl products (frozen) • Ragu Express (dry) • Kraft Easy Mac (dry) • Healthy Choice bowls Secondary • Stouffers Lean Cuisine & Lunch Express • Maruchan • All frozen meals • All shelf stable meals, ‘snacks’, cups, soups etc. Tertiary • Home-made lunches • Lunches/snacks purchased from café, grocery, restaurant, etc. Situation Analysis – Competitive

14. Situation Analysis – Competitive

15. Demographics Affluent Middle-aged Very strong with singles Younger couples New families With kids 13-17 Men Some ethnic success Popular in West Sales $190 million 60 million units Market share 12.9 % of units 31.0 % of dollars Uncle Ben’s Situation Analysis – Competitive

16. Demographics 3+ family members Age 44 and under Extremely strong if HH has kids < 6 New families & maturing families Comfortable – affluent Low ethnic usage FH employed full or part time Blue collar Sales 19 million units $ 52 million Market share 4.0% units 8.3% dollars Kraft Easy Mac Situation Analysis – Competitive

17. Demographics Comfortable & Affluent New & maturing families With kids < 18 Low ethnic penetration Larger families Sales 2.3 million units $7 million Market share 0.5 % units 1.1 % dollars Ragu Express Situation Analysis – Competitive

18. Demographics Varied income levels Larger family sizes Families with children Maturing & established families High ethnic use No HS education or college ed. West coast Sales 237 million units $98 million Market share 50.9 % units 15.7% units Maruchan Situation Analysis – Competitive

19. Stouffer’s* Demographics • High variation between varieties • Older singles • No female head • Middle age childless couples • No kids < 18 • Comfortable – affluent • Caucasian Situation Analysis – Competitive

20. Demographics Childless singles & couples Affluent College grad Caucasian White collar/managerial Sales 31 million units $74 million Market share 6.6 % units 11.90 % dollars Healthy Choice Bowls Situation Analysis – Competitive

21. Strategy Formulation Section • Perceptual mapping • SWOT • Kotler Market Opportunity • Ansoff’s • Strategy • Build revenue through expanded usage by current demographic & solidifying consistent market positioning • Concepts • Strengthen base business • Increase flavor variety Strategy Formulation

22. Opportunity Assessment: Convenience vs. Age AGE Kids / Teens Middle-Age Adults High Noodle Cups Chef Boyardee Cups BOWL APPETIT Kraft EasyMac Ragu Express It’s Pasta Anytime Uncle Ben’s Frozen Rice and Noodle Bowls CONVENIENCE Healthy Choice Bowls Stouffer’s Skillet Sensations Low Strategy Formulation

23. Opportunity Assessment Map: Meal Occasion vs. Convenience MEAL OCCASION Lunch Dinner Snack High Noodle Cups Chef Boyardee Cups BOWL APPETIT It’s Pasta Anytime Kraft EasyMac Ragu Express Uncle Ben’s Frozen Rice & Noodle Bowls CONVENIENCE Healthy Choice Bowls Stouffer’s Skillet Sensations Low Strategy Formulation

24. Opportunity Assessment Map: Perceived Quality vs. Convenience PERCEIVED QUALITY High Low High Noodle Cups BOWL APPETIT Chef Boyardee Cups Kraft EasyMac It’s Pasta Anytime Ragu Express Uncle Ben’s Frozen Rice & Noodle Bowls CONVENIENCE Healthy Choice Bowls Stouffer’s Skillet Sensations Low Strategy Formulation

25. Analysis of Perceptual Maps • Bowl Appetit is uniquely positioned offering high perceived quality and high convenience • Bowl Appetit is positioned with active working adults – many competitors are focusing on kids/teen market • Bowl Appetit is positioned more in the lunch/snack offering – many competitors in the lunch/snack arena Strategy Formulation

26. SWOT

27. Market Opportunity (Kotler) Target audience: • Single adults & couples with working female • Time constrained, active lifestyle Needs of the target audience: • Convenience • Portability • Simplicity • Quality Means to satisfy buyer needs: • Clearly articulate convenience benefits of Bowl Appetit • Ensure buyer requirements met with offering Strategy Formulation

28. Ansoff’s Product / Market Expansion Grid • Market penetration strategy allows for further development of customer base to ensure product success • Concept 1 – Further communicate customer benefits (convenience, portability) through distribution, consumer education, product placement and packaging Strategy Formulation

29. Ansoff’s Product / Market Expansion Grid • Product development strategy reinforces market penetration strategy by further developing the market base • Concept 2 – Increase product offerings to increase repeat usage and customer options by introducing ethnic varieties Strategy Formulation

30. Concept Development Section • Concept 1 – strengthen base business • Description • Rationale • Implementation • Package redesign, advertising, distribution, merchandising • Concept 2 – increase flavor variety • Description • Rationale Concepts

31. Concept 1 • Improved and consistent in-store placement • Improved and expanded distribution (especially to mass) • Package update to: • Better convey ‘ease’ and ‘convenience’ of product and short preparation time. • Better define usage occasions • Improve communications with consumer Concepts

32. Rationale for Concept 1 • Current display/store location inconsistency • Current product benefits and usage situations not clearly defined • Opportunity for expanded distribution to mass and club/warehouse • Capitalize on shelf-stability Concepts

33. “Ready, Set, EAT!” • New product group identity • Clear convenient connection • Create future opportunity to add new “Ready, Set, EAT!” product lines Ready, Set, EAT! Concepts

34. Package Redesign • Clearly convey Bowl Appetit benefits • quick, convenient, simple! • Align Bowl Appetit with category benefits of convenience • Ready, Set, EAT! • Creates future opportunity to add product lines with convenience attributes to the group Concepts

35. Advertising • Target • Active, busy people who value convenience and want variety • Message • Define the occasion • When - lunch or snack • Where – home, work, anywhere there’s a microwave • It’s easy, it’s portable • Media Vehicles • TV • Outdoor –i.e. billboards and subway cars Concepts

36. Distribution Outlets • Increase distribution to mass, particularly non-superstore mass outlets • Capitalize on shelf-stability • Explore opportunities in warehouse/club channel with multi-pak product. Concepts

37. Merchandising • Billboard style • 5 in a row with Bowl facing outwards on shelf • Placement next to “cup of soups” to ensure consistent placement • Manage consistency within and between retailers Concepts

38. Plan-o-gram Concepts

39. Concept 2 - Ethnic Varieties • Asian • Teriyaki Noodle • Lo Mein Noodle • Mexican • Mexican Rice • Saffron/Spanish Rice Concepts

40. Rationale for Concept 2 • Offer more variety to increase consumer options • Variety leads to increased consumption by repeat users • Product variety increases diversity of users • Current marketplace trend towards Asian flavors* Concepts

41. Additional Marketing Activities • Promotion • Pricing Marketing Activities

42. Promotion • Scale back promo % over the next 3 years from the current level – assume current SKU’s have ended ‘trial’ phase • Promote new flavors at introductory (current) level year 1 and scale back over 3 years • Change nature of promotions to encourage multiple purchases/trip, and sampling of new flavors, rather than to encourage trial Marketing Activities

43. Pricing • Maintain current ‘premium’ pricing • Average ‘price’ will increase as promotional activity is scaled back. • Assume no change to basic product price unless there is an extreme shift in competitive pricing.* Marketing Activities

44. Financial Analysis Section • Revenue Drivers • Driver Goals • Assumptions • Basic • Growth • Revenue Forecast • Sensitivity Analysis Financial Analysis

45. Potential Revenue Drivers • Repeat rate • Penetration • Overall market growth rate • Product cost & price • Percent of product on promotion • Items purchase per trip • Trips per year Financial Analysis

46. Driver Goals • Increase retention • Repeat rate • Draw new users fitting current Nielsen profile • Channel expansion • Decrease promotion level • Leads to increase in average price • Increase purchase frequency • Expand usage occasions Financial Analysis

47. Basic Assumptions • Households = 100 mil, no growth • Penetration stable • Decreased trial in grocery, countered by increased distribution (build mass & club channels) • Items purchased/trip remains constant for one time buyers • Current (year 0) items/trip for one-time buyers = items/trip for repeat purchasers • Cumulative potato product sales = 20% of rice + pasta dollars Financial Analysis

48. Growth Assumptions – years 1 to 3 • Repeat rate increases 5% semi-annually over previous period • Average product price increases • Items/trip for repeat purchasers increases 5% over previous period • Trips/year for repeat purchasers increases 5% over previous period Financial Analysis

49. Financial Analysis

50. Financial Calculations