Tapping into PepsiCo Brands to Increase Snack Bar Profits · increasing center food & beverage...

Tapping into PepsiCo Brands to Tapping into PepsiCo Brands to Increase Snack Bar ProfitsIncrease Snack Bar Profits

Bowl EXPO 2010

Session AgendaSession Agenda

• Consumer Insights Shereen Besselle, PepsiCo

• Picking up Spare Profits Amy Arcuri/Terry Taylor, BPAA

• Question and Answers All

Bowling Category Overview Bowling Category Overview and Consumer Trendsand Consumer Trends

Within the Foodservice Amusement Within the Foodservice Amusement Category, Bowling Represents 11% of Category, Bowling Represents 11% of OccasionsOccasions

Amusement Category: % Share of Occasions

Other11%

Movie Theatres19% Bowling

11%

Amusement Parks34%

Stadiums25%

Source: NPD Crest, 12 mos ending April 2010

% Change Vs. YAGO

4.6%

-15%

Bowling Users Food/ Bev Occasions

Bowling Participation Is On The Bowling Participation Is On The RiseRise ……However Food and Beverage However Food and Beverage Occasions Are Down Occasions Are Down

69.3 Million

Users


Declines Are Being Driven by 35Declines Are Being Driven by 35 --49 49 yr oldsyr olds

Bowling Occasion % Chg vs. YAGO

-18%

72%

31%

-13%-31%

-41%

< 18 18-24 25-34 35-49 50-64 65+

16%17%23%13%10%22%Share

of Traffic

53% of Occasions


Soft Drinks Are Very ImportantSoft Drinks Are Very Important ……

Key Beverage Incidence: Bowling

46.1

17.4

7.4 6.2 3.8

Soft Drinks Beer Tap Water Cocktails Coffee


However, Soft Drink Incidence Has Been However, Soft Drink Incidence Has Been SoftSoft

Soft Drink Incidence Over Time: Bowling

62.2 62.0

46.1

2008 2009 2010

Source: NPD Crest, 12 mos ending August 2009

15.9 pts

So WhatSo What ’’s Driving This Consumers Driving This Consumer ’’s s Behavior?Behavior?

The Economy

Health &Wellness

The Speedof Life

SocialResponsibility

Consumers Adopt Different Trends to Deal Consumers Adopt Different Trends to Deal With the Macro Factors Impacting Their With the Macro Factors Impacting Their LivesLives

Social Responsibilit

y

Health & Wellness

Speed of Life

Economic Downturn

Consumer Trends

XXSearch for Authenticity

XXConnected Experience

XXFocus on Forever

XXXXHealth 3.0

XXConsidered Consumption

There Are Three Key Trend Impacting There Are Three Key Trend Impacting Bowling ConsumersBowling Consumers

Social Responsibilit

y

Health & Wellness

Speed of Life

Economic Downturn

Consumer Trends

XXSearch for Authenticity

XXConnected Experience

XXFocus on Forever

XXXXHealth 3.0

XXConsidered Consumption

Drivers

Consumer Trend: Considered ConsumptionConsumer Trend: Considered Consumption

� Awareness of economic risk and uncertainty about pr esent / future

� Job losses and declines in disposable income

� Greater availability of information

ManifestationsInsights

Consumer Trend: Considered ConsumptionConsumer Trend: Considered Consumption

More cautiousMore pragmatic

90% agree that “I consider myself to be a bargain hunter”

70% have cut spendingWill pay more for worth

Need to Justify Spending

Renewed Focus on Worth

Economizing is Smart

62%

Personal Savings Rate:

5/09 6.9%

RetailMeals

9.3%

Value Meals

Implications For Bowling ProprietorsImplications For Bowling Proprietors

• Consumers have many different ways of defining valu e• It’s important to provide consumers with more than one

value experience when in center

Price Value – Happy hour deals, $2 combos, coupons, free game of

bowling

Benefit Value– Beverage Promotions (Buy+Get+Win), door prizes, gra b

bags

Drivers

Consumer Trend: Connected ExperienceConsumer Trend: Connected Experience

� Advances in personal, mobile technologies

� Search for meaning and more engaging experiences

� Desire for community and interconnectedness


Consumer Trend: Connected ExperienceConsumer Trend: Connected Experience

9.3%

Living Life to the Fullest

Social Networking

Seeking Experiences

Valuing a sense of play and novelty

Desiring new sensory experiences

Transforming personal interaction

Shifting brand / media landscape

The continuing desire for small pleasures and new experiences

Tuesday Game Night

Sharing experiences

with kids


• Leverage technology to drive marketing efforts, gro w center awareness and increase consumer engagement

Facebook/Twitter – Announce the new menu or drink specials of the day – Promote a happy-hour event or special in center eve nt – Solicit ideas for new menu items or specials of the day – Offer a special prize for people who follow you on Twitter by a specific time

and date, to be entered to win a free game of bowli ng

On Line Reviews– Review sites are a great way to connect with consum ers…chances are your

center is already on review sites like Yelp– If it’s not, be sure to encourage your customers to post a fair review– If there is a negative review left, try to reach ou t to that customer and

correct the situation if possible

Consumer Trend: Search for AuthenticityConsumer Trend: Search for Authenticity

� Rejection of global, homogenized culture

� Diminished human interaction due to online

� Pressure on traditional family and institutions

Drivers


Consumer Trend: Search for AuthenticityConsumer Trend: Search for Authenticity

9.3%

Uncompromised Originality

Focus on Heritage

Tried and Tested

Staying true to original roots, recipes

and values

Local market / farmer growth interested in

sources/ origins as indicators of what’s

‘real’

Trust in those things that have withstood

the test of time

167% increase in

Farmers Mkts since

1994


• Trying to be all things to all consumers will dimin ish authenticity and value

Health & Wellness– Increase awareness and presence of better for you f ood & bev

options, but are still relevant to the environment (vegetarian pizza, bottled water, baked lays)

Social Responsibility– Consumers attach real value to companies that give back in an

authentic way– Support initiatives that are a good fit and are impo rtant to

“YOU”… Kids, local community etc.

Seven Initiatives To Help Fuel Seven Initiatives To Help Fuel Snack Bar ProfitsSnack Bar Profits

Growth OpportunitiesGrowth Opportunities

• Growth opportunities are focused on driving volume by increasing center food & beverage sales through bes t practices and business building initiatives

• Seven initiatives to help fuel snack bar profits:1. Cup Price and Size Architecture2. Brand Voids

3. Bottles to Go 4. Model Merchandising

5. Combo Meals6. Suggestive Sell & Promotions7. Understanding Pepsi Profits

Cup Price and Size Cup Price and Size ArchitectureArchitecture

Basic Theories of Proper Cup size & Basic Theories of Proper Cup size & PricingPricing

• Offer consumers at least three cup sizes beyond “ki d size”– 24 oz, 32 oz and 44 oz– FACT: When a 44 oz size is introduced, almost 1/3 of the 32 oz

consumers, migrate to the 44 oz cup

• Identify the largest size as the “best value”

• Use Simple names for each cup size– Small Medium and Large vs. Tall, Jumbo, Grande

• Utilize cup merchandiser to communicate cup sizes & prices

To Maximize Volume and RevenueTo Maximize Volume and Revenue

• Sell smaller sizes (16 oz and 24 oz) at highest pri ces to encourage trading up to larger sizes

• Sell Cruiser cups (best demand / cost ratio) at hig hest possible prices

• Sell the 16 oz or lower size as your “kid” size cup

• Don’t offer a 12 oz cup on the menu. Use these for birthday parties – pitchers of Pepsi

Brand VoidsBrand Voids


• Brand variety has a positive impact on consumer satisfaction and incidence

• While soft drinks still account for most beverage purchases, alternative beverages have grown twice a s fast over the past two years– All-time highs in consumer awareness of health and wellness are

driving growth of non-carbonated beverages in both fountain and bottles to go


• Optimization of the brand line-up not only enhances customer satisfaction, but also maximizes beverage funding and profits for BPAA members

• There are currently 1,348 Tropicana brand voids

• These voids alone represent an estimated 66,000 gallons, which is close to $250K in center level fu nding

8th ValveOptions

8 Valve Set

6 Valve Set

6th ValveOptions

Core 4 : These top 4 brands make up approximately 70% of total fountain sales

BPAA Recommended Brand SetsBPAA Recommended Brand Sets

Bottles To GoBottles To Go

Why Should You Offer Bottles To Why Should You Offer Bottles To Go?Go?

• Increased consumer interest in product variety make s bottles to go another opportunity to sell them what they want instead of walking away without a purchase

• When the Snack bar line is too long, bottles to go offers the bowler a choice if they can’t wait

• If your snack bar closes before the lanes close, bo ttles to go allows beverage incidence to continue

What Bottled Beverages Should You What Bottled Beverages Should You Sell?Sell?

• 80% Non-carbonated bottles will complement fountain offerings – Lipton Brisk (Lemon and Diet), SoBe, Tropicana

• Specific flavors preferred by most regional consume r demographics– FruitWorks, Dole

• The #1 Non-Carb Brands– Aquafina, Frapuccino

• Energy Drinks are top sellers with 18-23 year olds– AMP, Rockstar

How Should I Merchandise Bottles To How Should I Merchandise Bottles To Go?Go?

• DISPLAY IN A GLASS FRONT VENDOR

• Use one row for the Core Four carbonated beverages

• Use the eye level rows for the highest profit margin options, such as AMP or Rockstar

• Use a full row for Aquafina

Key TakeawaysKey Takeaways

• Price bottles to go at same price as a 32 oz founta in drink, consumer will pay more for convenience

• Price SoBe, AMP, Rockstar and Frappuccino higher

• Fountain Drinks remain the preferred drink of choic e (for On-Premise Consumption) with bottles to go offering consumer’s solutions for variety and portability

• Beverage incidence increased 7% when BTG were added to the beverage offering

Model MerchandisingModel Merchandising

BPAA BPAA MenuboardMenuboard TestimonialsTestimonials

• The new menu board has increased awareness of our s nack bar and increased food sales by 40%

• Most of our customers comment on the new menu board . It has had a tremendous influence over orders. Our sales snack bar sales have increased

Importance of Importance of MenuboardsMenuboards

• Menu boards are a major driver of the purchase deci sion

• Over 75% of restaurant customers read menu boards f or pricing information, product selection, special off ers and promotions, new items and product descriptions

• Menu boards must have a logical flow that aids the consumer in the ordering process

Side panels should each have a theme: From the Grill

and Sandwiches tells the consumer what you offer in

each category

Combo meals in the middle where the consumer will look

first

Beverage should have their own space/panel

Sides and Snacks should also have their own

space/panel

BPAA BPAA MenuboardMenuboard layoutlayout

MenuboardMenuboard TipsTips

• Use appetizing photos to highlight offers– Use ingredients to prop photos and add to their appetite– Let the props differentiate between similar offerings– Its important to remember customers will recognize pictures before

words

• Have beverages on the menuboard– Feature branded bottles or cups with visible logos– This will reassure the customer of quality, value and variety

• Only feature 6-8 combos on your menuboard– Anything more than 8 is too much for the customer to take in

What consumers see at Taco BellWhat consumers see at Taco Bell

What Consumers See At KFCWhat Consumers See At KFC

What Consumers See At Some What Consumers See At Some CentersCenters

Combo MealsCombo Meals

The Importance of Combo MealsThe Importance of Combo Meals

• Combo Meals Drive Customer Loyalty• Consumers are programmed to order from a QSR from a

combo meal menu– They tend to feel uncomfortable and even confused when one is not

present

• Combo meals are perceived as a better value for the dollar

• Combo meals simplify the ordering experience• Increases familiarity with restaurant – provides a

predictable experience• Reduces wait time• Better order accuracy with reduced mistakes

Combo Meals and Operational Combo Meals and Operational EfficiencyEfficiency

• Make it easier to process / fulfill order

• Less training required – quicker familiarity with me nu

• Reduce burden of cross selling and up-selling

• Reduce chance of customer dissatisfaction and negat ive feedback

• Moves the line quicker and reduces employee stress

Combo Meals Increase MarginsCombo Meals Increase Margins

• Moves your high margin items at a faster rate – side items and beverages are your high margin items

• Drives incremental unit sales through bundling –especially beverage

• Consumers are looking for value – combo meals delive r

Helpful Combo Meal StrategiesHelpful Combo Meal Strategies

• Devote at least 60% of menu board space to their pr omotion.

• Have easy to order 1-2-3 numbering

• Feature between 6-8 combo meals, no more– An ideal offering is 6 everyday meals, and 1 or 2 daily specials

• Among your combo meal offerings, include at least o ne or two low price points

– $2.99 is very desirable, even it is a jumbo pretzel and a soft drink or a hot dog, Doritos and a soft drink

• Price the majority of combo meal offerings at just under $5.00

• Price one combo meal offering over $5.00

• Make sure the combo meal a value package…price at l east $0.50 off individual offering pricing

Suggestive Sell & Suggestive Sell & PromotionsPromotions

Keys To Suggestive Selling Keys To Suggestive Selling

• Keep it simple – offer one up sell per transaction

• Train your crew to personalize their add-ons Exampl es: – A cold Pepsi would go great with that burger; – I highly recommend making that a combo, you could save – I can upsize that for you for just a quarter more.

• Train - Measure – Retrain or reward

• Utilize a third party company to mystery shop your locations and evaluate customer service and suggest ive selling program

• Use the data from the program to recognize, reward, coach and train your staff members

The Role Of Promotions and Specials The Role Of Promotions and Specials

• Beverage Promotions have proven to increase profits by adding a compelling reason for a consumer to purcha se a large beverage at a higher price point

• Special offers in the snack bar area can be as effe ctive as they are on the lanes

• Consumers looking for value will respond to special one night a week that offers a free upsize or the chanc e to upsize for a modest increase in price

Pin Down A Win For Kids: Evergreen Pin Down A Win For Kids: Evergreen (FREE)(FREE)

• Centers give youth groups a batch of “Pin Down a Win”cards to sell with the goal of raising money for their community cause

• Each card contains 10 special offers from the participating center and an entry form to win a “prize”

• Pepsi-BPAA centers each will receive posters, counter cards and peel cards

Fall Major Promotion: Rock the Fall Major Promotion: Rock the Lanes Lanes

• Buy a 44oz Fountain drink and receive a free music download plus the chance to win 1 of 6 trips for two to the Bowling ITRC

• Starts September 29 th –December 22 nd

• Pepsi-BPAA centers each will receive posters, cups and cup merchandiser

Understanding Pepsi Understanding Pepsi ProfitsProfits

85%Beverage Profit %

$53,250$2.13Gross Profit

$3,000$0.12Cup/Lid/Straw

$6,250$0.25Product Cost

$62,500$2.50Price

AnnualPer ServingAnnual Servings: 25,000 (44 oz)

Pepsi Profitability ExamplePepsi Profitability Example

Key Takeaways: Increase Snack Bar Key Takeaways: Increase Snack Bar Profits Profits • Understand your food and

beverage operation

• Understand your food and beverage traffic – by gaining consumer insights you can increase your average snack bar check: – FACT: Average check for bowling

food and beverage is $4.72

• Take advantage of the BPAA/PepsiCo partnership providing not only savings, but promotions, insights and industry financial support

• Get to know all the Brands and products PepsiCo offers

Source: NPD/Crest 12 months ending April 2010

Key TakeawaysKey Takeaways

Questions?Questions?

Tapping into PepsiCo Brands to Increase Snack Bar Profits · increasing center food & beverage...

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