Neil Kimberley's Bevnet Bevschool 101
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Transcript of Neil Kimberley's Bevnet Bevschool 101
Neil KimberleyBeverage Soothsayer
[email protected]@foodsfluidsbynd
My Past
$10,000
$5,400 $5,000
$4,100
$2,500 $1,700 $1,500
$1,100 $450 $375 $375 $237 $186 $104 $85 $80 $75 $50 $30 $28
Estimated Value Created From Beverage Enterprises = $33B
Your Opportunity
Seth Goldman, Honest Tea TEO
Run Away!
Agenda
BEVERAGE ABC’S
The Marketplace
Who Wins and Why
Your First Decisions…
What?
How?Who?
WHO – Consumers & Occasions
?
WHAT - Categories
Carbonated Soft Drinks
CSDs
Bottled Water
WHAT - CategoriesAlternative Beverages
Ready To Drink Tea
(RTD Tea)
Juices/ Juice Drinks
Lemon-ades
Energy Drinks
Enhanced Water
Sports Drinks
(Isotonics)
Coconut Water
WHAT - Packages
Single Serve
Multi Pack
Multi Serve
Immediate Consumption
Take Home
WHAT - Packages
Single Serve
Multi Pack
Multi Serve
Immediate Consumption
Take Home
WHAT - Packages
Single Serve
Multi Pack
Multi Serve
Immediate Consumption
Take Home
HOW - Retail Channels
Convenience Stores
Food Service
UDS
Immediate Consumption
Low Volume/ High Profit
HOW - Channels
Convenience Stores
Food Service
UDS
Grocery
Mass
Club
Dollar
Immediate Consumption
Take Home
Low Volume/ High Profit
High Volume/ Low Profit
HOW - Channels
Convenience Stores
Food Service
UDS (Mom and Pop)
Drug
Natural
Grocery
Mass
Club
Dollar
Immediate Consumption
Take Home
Low Volume/ High Profit
High Volume/ Low Profit
Low Volume/ Low ProfitBoth
HOW - Route To Market (RTM)
Direct Store Delivery(DSD)
Collaborative Sales to RetailersDistribution System DeliversDistribution System Merchandises
HOW - Route To Market (RTM)
Direct Store Delivery(DSD)
Direct
Collaborative Sales to RetailersDistribution System DeliversDistribution System Merchandises
Direct Selling to RetailersProduct Shipped to Retailers Distribution Centers Merchandized by Store Employees
HOW - Route To Market (RTM)
Direct Store Delivery(DSD)
Broker/Direct
Direct
Collaborative Sales to RetailersDistribution System DeliversDistribution System Merchandises
Direct Selling to RetailersProduct Shipped to Retailers Distribution Centers Merchandized by Store Employees
Retail relationship with BrokerProduct Shipped to Retailers Distribution Centers Merchandized by Store Employees
HOW - Route To Market (RTM)
Direct Store Delivery(DSD)
Broker/Direct
Broker/Distributor
Direct
Collaborative Sales to RetailersDistribution System DeliversDistribution System Merchandises
Direct Selling to RetailersProduct Shipped to Retailers Distribution Centers Merchandized by Store Employees
Retail relationship with BrokerProduct Shipped to Retailers Distribution Centers Merchandized by Store Employees
Retail Buyers relationship with BrokerProduct through multiproduct distributor Merchandized by Store Employees
The Strategy Decisions…
Who What How
Consumer
Category
Product
Package
Price
Profitability
RTM
Retailers
Organization
Marketing
Capitalization
The Runa Strategy…
The Runa Strategy…
Who What How
Consumer –
Young Urban Professionals Seeking A Healthier Energy Alternative
Category - Tea
Product – Guayusa
Package – Single Serve Glass
Price – Category Average
RTM - Natural Channel & DSD
Retailers – Natural/Urban UDS
Marketing – Sampling, PR, Word of Mouth
The Strategy Decisions…
Who What How
Consumer
Category
Product
Package
Price
(Profitability)
RTM
Retailers
Organization
Marketing
Capitalization
THESE DECISIONS ARE HARD TO CHANGE
Rules of Thumb – Margins
Grocery Retailers
Immediate Consumption Retailers
Mass Retailers
DSD Systems
Natural Channel Distributors
Brokers
~38%
~42%
~35%
~28%
10%- 20%
3%- 5% Of Gross
Rules of Thumb – Business
Trade Spend
Marketing Spend
Gross Margin
~15% of Gross Sales
~12% Of Net Sales
~45% Of Net Sales
Agenda
Beverage ABCs
The Marketplace
Who Wins and Why
The Squeeze
CARBONATEDSOFT
DRINKS
RTD Teas
Sports Drinks
HEALTH(IER)BEVERAGES
FUNCTIONALBEVERAGES
Energy DrinksEmerging Functions
Bottled Waters
Juices
LRB Retail Revenue ($B)
Carbonated Soft Drinks
Source: Beverage Digest Annual Fact Book 2012
LRB Retail Revenue ($B)
Carbonated Soft Drinks
Bottled Water
Alternative Beverages
Source: Beverage Digest Annual Fact Book 2012
LRB 8 oz Per Capita Comparison
Source: Beverage Digest Annual Fact Book 2012
2001 Total 1,062 2011 Total 1,173
LRB 8 oz Per Capita Comparison
Source: Beverage Digest Annual Fact Book 2012
2001 2011 Total 1,173 +111
CSD 691 (151)
Bottled Water 239 +154
Alt Bevs 243 +108
The Implication
Each Beverage Category Share point is worth $1.2B
Beverages Category is Growing 2 Pts/Year
CSDs are declining at 1.5 pts/Year
Every Year Consumers Are Spending ~$3B Incremental Outside CSDs
Alt Bevs $34B At Retail
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Juice/Juice Drink Sports Tea Dairy/Other Energy
Source: Beverage Digest Annual Fact Book 2012
Alternative Beverage All Channel Retail Sales 2001-2011
+38%
+9%
+8%
+7%
+6%
10 Yr CAGR
Source: Beverage Digest Annual Fact Book 2012
2011 Revenue By Brand ($M)
Venturing Groups
Pepsi Naked Brands Venturing
Group
Agenda
Beverage ABCs
The Marketplace
Who Wins and Why
5Traits OfSuccessful Beverage Brands
1MeaningfulProductDifferentiation
2Tenacious,Flexible, Multi-SkilledManagement
3 Effective Sales Strategy
Vitamin Water - Targeted Distribution
High Quality Execution
Consumer Events
Retailer Visibility
Distributor Confidence
45
Market Blitz 30+ People
Channels & Package Strategy
4Effective BrandActivation
Red Bull Street Activation
Activation Teams In Every Major City
Field Marketing Manager
On Premise Manage
r
Key Account Manage
r
Field Sales
Manager
Field Samplin
g Manage
r
Red Bull Activation Plans and executes
bar/club events
Executes Nationally Driven Off
Premise Retail Events
Create unpaid local exposure
• Coolers at radio stations• Coolers at local TV news• Locker rooms at local sports
teams
Plans and executes local sampling events
at retail and events
Links to Distributor• Maintains link between
microcell and distributor• Develops driver sales
people
48
5 Effective Capitalization
Investment Phases
Friends and Family•Product Development
•First Manufacture
•Minimal Staff
Angel Stage ~$3M•Regional Launch•Sampling & Trial•Staff Expansion•Supply Chain
Private Equity~$10M•Coastal Expansion
•Supply Systems•Trade Promotion Systems
•National Accounts
•Mass Channels•Marketing Investment
Strategic Acquisition~$50M + Up•National and International Expansion
•Portfolio Selling•Procurement Savings
•Mass Media
5 Hazards
1 Can’t ArticulateDifferentiation
2Saying “Yes” Too Often
3 Complexity
4Failing To Gather InsightOn Success
5UnderestimatingActivation
Strategic Acquirer Hot Buttons
Differentiated Growing Profitable
Business Fit
Incremental On Trend
What Will An Exit Look Like?
Dependent on Size, Profitability and Growth Potential
Profit is less important
Current multiples of revenue are around 2x to 3x
(Don’t use Vitamin Water as an example) Honest
Sweet Leaf
Izze
Fuze
Naked
Vitamin Water
0 2 4 6 8 10 12 14
2.3
2.4
2.5
2.6
3
11.7
Revenue Multiples at Exit
Neil KimberleyBeverage Soothsayer
[email protected]@foodsfluidsbynd