1

INNOVATION

BEYOND

PRODUCT DEVELOPMENT

AGENDA

Wilson’s CountryBrief HistoryFew Milestones

Wilson’s Country The Innovations Beyond Product Development

Business LearningsDuring innovation process

COMPANY PROFILE Established 1980’s by Angus Wilson (CEO)

Initially prepack potatoes Wilson’s Country brand for retail sector PRODUCT INNOVATION – Garden Potatoes

Processed potatoes early 1990’s Peeled potatoes for food service sector

Fresh Fruit & Veg processing early 1990’s Retail and Food Service Sector

1995 – moved from home farm to a commercial unit 2001 – what will future look like and where will we be ?

Rationalisation of sites and activities

2004 - exit from veg processing 2005 – operations all to one site 2009 – exit from fresh fruit processing 2010 – focus on prepack & peeled potatoes

FEW MILESTONES 1980’s & 90’s only packed Wilson’s brand potatoes

Spar, Stewarts, Supermac, Wellworths 1994 Supply to M&S 1996 Supply to Tesco Metro 1997 Supply to MSVC 2000 Wilson’s Brand first TV campaign 2005 Investment of £5million in new site 2008 Supply to Dunnes Stores 2009 Supply to Asda 2009 Pilot programme for Investors in Innovation 2010 Packing of Bartlett Rooster Brand Today

£17 million turnover Just under 100 employees Handling 1000 tonnes of potatoes per week Wilson’s Country brand recognised as Ireland’s leading brand Widespread presence in multiples / independents across Ireland

Packhouse at Portadown

INNOVATION

Definition

“There are probably as many definitions of innovation as the number of supposed experts on the field around the world”.

INNOVATION

Definition

“Change that creates a new dimension of performance”.

Peter Drucker

INNOVATION

Definition

“Innovation does not relate just to new product that would come into the marketplace. Innovation can occur in processes and approaches to the marketplace.

David Schmittlien

HANDS FREE MOBILE !!

INNOVATION

PRODUCT How is it presented to your business for use? What you do with it? What do you do with non-conforming product?

PROCESS Working of the product through the business Waste streams generated from your process

MARKETING Place Price Promotion Presentation

INNOVATION

MARKETINGPresentation of Product - late 2009

PROCESSWorking of product through the business

Peeling potatoes – Sept 2010

Waste streams from productionWater – current project

MARKETING

Market research in 2008 / 09 identified that just under 50% of consumers did not purchase their potatoes with their main shop

Embarked on a process of why Reason clearly

PresentationFormat

Launched a new packaging format Product still the samePlace the same

MARKETING

14

FAMILY OF VARIETIES

© Kantar Worldpanel

Total NI Potato Performance

52 w/e 16 May 2010 – Value is down in the NI potato market as people limit

the amount they purchase.

Worldpanel KPI Reporting

KM Performance

Total Potatoes - Total outlets Value down 6.1% worth €3028k52 w/e 17 May 09

52 w/e 16 May 10

Actual Change

% Change

Expenditure (€000s) 49232.80 46205.30 -3028 -6.1Volume (000s Kgs) 94152.20 85877.74 -8274 -8.8Penetration % 96.90 96.00 -0.90 -0.9Purchase Frequency 40.60 40.40 -0.20 -0.5AWP (Spend per Buyer) 76.50 71.40 -5.10 -6.7AWP (Kgs per Buyer) 146.30 132.80 -13.50 -9.2Trip Spend 5.80 5.30 -0.50 -8.6Trip Volume (Kgs) 3.60 3.30 -0.30 -8.3Price per Kg 0.52 0.54 0.02 3.8

* Penetration contribution includes Population growth of 1.5%

Contribution = -€273k

Purchase Frequency

Contribution = -€4622k

96% -0.9%132.8 Kgs -9.2%

40.4 trips -0.5%Trip Volume (Kgs)

3.3 Kgs -8.3%

Expenditure (€000s)€46.2m -6.1%

Decrease of €3028k

Volume (000s Kgs)

Penetration % *

Contribution = -€4895k Contribution = €214k

AWP (Kgs per Buyer)

85.9m Kgs -8.8% €0.54 +3.8%Price per Kg

Contribution = -€4681k Contribution = €1654k

-6000 -5000 -4000 -3000 -2000 -1000 0 1000 2000 3000

Penetration % Purchase Frequency

Trip Volume (Kgs) Price per Kg

© Kantar Worldpanel

How are Wilsons growing?52 w/e 16 May 2010 Growth is coming from new shoppers returning more frequently and putting more volume in the basket as well as attracting new shoppers to the brand

Worldpanel KPI Reporting

KM Performance

Wilsons Country - Total Outlets Value up 351.1% worth €6559k52 w/e 17 May 09

52 w/e 16 May 10

Actual Change

% Change

Expenditure (€000s) 1867.80 8426.30 6559 351.1Volume (000s Kgs) 2272.57 14294.44 12022 529.0Penetration % 44.00 77.00 33.00 75.0Purchase Frequency 4.60 11.00 6.40 139.1AWP (Spend per Buyer) 6.40 16.20 9.80 153.1AWP (Kgs per Buyer) 7.80 27.60 19.80 253.8Trip Spend 3.80 3.90 0.10 2.6Trip Volume (Kgs) 1.70 2.50 0.80 47.1Price per Kg 0.82 0.59 -0.23 -28.0

* Penetration contribution includes Population growth of 1.5%

Contribution = €3630k

Purchase Frequency

Contribution = €1228k

77% +75%27.6 Kgs +253.8%

11 trips +139.1%Trip Volume (Kgs)

2.5 Kgs +47.1%

Expenditure (€000s)€8426k +351.1%

Increase of €6559k

Volume (000s Kgs)

Penetration % *

Contribution = €4858k Contribution = €2017k

AWP (Kgs per Buyer)

14.3m Kgs +529% €0.59 -28%Price per Kg

Contribution = €6874k Contribution = -€316k

-1000 0 1000 2000 3000 4000 5000 6000 7000 8000

Penetration % Purchase Frequency

Trip Volume (Kgs) Price per Kg

MARKETING SUMMARY

A successful innovationBUTThis packaging format was industry standard

20 years ago!Does innovation always mean re-inventing

the wheel?Lesson

Continually respond to the market needs ahead of your competitor

4 X 4 DE-LOREAN

PROCESS - peeling

Background Peeled potato volume sales increasing Introduce additional shifts Great news

more sales better utilisation of assets

Division evolving as sales evolve Division operationally becoming very busy Know the time to

“step back out of the trees to see the forest” Evolution has a time and place but can lead to

INEFFICIENCY and the need for REVOLUTION

PROCESS - peeling

So what happened? Process started at European exhibition Feb 2009

Reviewed Equipment that is available Company visit to GB business May 2009

To build general knowledge – some equipment Company visit to German business Sept 2009

Very similar to our business scale and working the new equipment

Order placed Feb 2010 Installation Sept 2010

PROCESS - peeling

Fully integrated computerised systemPeelingOptical sortingRe-peelingSizingCutting optionWashing

PROCESS – peelingSUMMARY

Successful Innovation Contingency into businessLabour savingYield gainBetter product

This was new innovation to us but :-technology was proven in other markets

LessonRevolution sometimes better than Evolution

PONYTAIL NO PROBLEM

PROCESS – waste stream

Water Business uses a lot and discharges a lotMoney £120,000 / yr approx

Considered options around recyclingConventionalNot so conventional

Electro coagulation

PROCESS – waste stream

EC Benefits v ConventionalOn paper

Not as capital intensiveSmaller footprintLess running costsAbility to recycle 75% of our waterAbout to go live

PROCESS – waste stream

Success yet to be determinedTechnology new to marketTechnology new to businessUnknown territoryBusiness risk increasedForward looking to a new way

Invention more than innovation

Another Innovation

Variation on a Pritt Stick

BUTTER PRITT

LEARNINGSLEARNINGSLEARNINGSLEARNINGS

BUSINESS BUSINESS

BUY INBUY IN

1. OBJECTIVES

• Someone will need time to think and review• What are you currently doing ?• How are you currently doing it?• Where are you wanting to get to ?• Is there another way ?• Can we do it better ?• Time to visit other companies / exhibitions• INNOVATION WILL NOT HAPPEN

– By itself– In 5 minutes on a Friday afternoon

2. OUTCOME

• Is the business prepared to :-• Implement the findings

– Or is it just an exercise

• The norm may be challenged• Take a calculated risk

– Innovation or Invention

• Know the reasoned goal / benefit– Clarity around before and after

• Spirit MUST be there

3. IMPLEMENTATION

• Capex may be required• Change in custom and practice• Consequences

– People Issues– Customer Issues– The way we do things

• Clarity around the objective / goal

4. MONITORING

• Clarity around starting point• Clarity around innovation

– Measurement – Deliverables

• Know when to change tack• Know when to stop

SUMMARY

• You need someone with “that” skill set• If you don’t have it, procure the skill • Provide a culture / space for the process• Put on business agenda• Support process at every step• Communicate the progress• Be prepared to change norms• Have clarity around the end goal• Be prepared to say stop• CELEBRATE THE SUCCESS

INN0VATIONINN0VATIONINN0VATIONINN0VATIONTHANK YOU FOR LISTENINGTHANK YOU FOR LISTENING

Don’t get caught out Innovate or Die !

Oh ……….