Wrigley Checkstand Candy Category Review
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Kristin Harris Pawel Jastrzebski Lindsay Haizman Bart Grochowski Joshua Israileff
Roundy’s Checkstand Confections
Category Review
June 7, 2010
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Agenda
• Confections Industry and Trends• Roundy’s and Wrigley Mission Statements• Category Definition and Role• Category Assessment• Category Scorecard• Category Strategy• Roundy’s Tactics• Summary
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Industry at a Glance
Source: First Research Industry Profile, Candy Industry, April 12, 2010
•U.S. confection companies - $16 billion annual revenue
•1,600 companies
•Largest 50 companies hold less than 40% of market
•Biggest companies:
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Grocery at a Glance
Source: Phil Lempert, Supermarket Guru, Nielsen Wire
• Average trip is 22 minutes (Wall Street Journal)
• $27.61- sales per customer transaction in 2008
• Weekly Household Grocery Expenses 2009
• Total: $98.40
• Size of HH:
1 $72.40
2 $91.90
3-4 $108.90
5 or more $145.90
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Checkstand at a Glance
Source: progressivegrocer.com
•Fast last impression
•2 minutes and 52 seconds
•Checkout experience
•80% used to determine to return
•Only 17% bought something in line
•“100% go through the checkout”
•Fewer than 1 in 10 shoppers make a purchase
•Very important to get Checkstand RIGHT!
*2
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Macro Trends
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Grocery Trends
Source: Food Marketing Institute, fmi.org
Stage 1
Restaurant to Supermarket
Stage 2
Shifting Mix
Stage 3
Shifting Channels
•Saving money on eating out
•Fine dining to fast food
•Cutting back on eating eat
•Shift to supercenters
•Limited assortment
•Pantry leveraging
•More private label
•More coupons, planned trips
•Fresh to frozen
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Confections Trends
Source: Phil Lempert, Supermarket Guru, Nielsen Wire
•76% - bored with products
•Want new innovation
•Snicker’s Peanut Butter Squared
•“Better for You” Products
•Sugarless Gum
•$1.14 billion sales in 2009
•Wrigley’s Orbit - American Dental Association Seal of Approval
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Confections and the Recession
• 86% of consumers eat chocolate everyday = happiness• 16.2% chocolate jump in sales in North America (YA)
– Personal branding which has returned consumers to purchase
• Themes of Consumers today
Source: www.candyindustry.com
Simplicity Comfort Health
•Simple, Old-style labels
•Easy to recognize
•Chocolate - Ultimate comfort product
•Organic
•Natural Ingredients
•“Darker” chocolate
*3
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Roundy’s and Wrigley
Working Together
Mission Statements
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•Headquarters - Milwaukee, WI
•151 locations in Wisconsin and Minnesota
•More than 17,000 employees
•Founded in 1872
•One of oldest and largest retailers in Midwest
•Pick N’ Save, Rainbow Foods, Copps Food Center, Metro Market
•Currently building store in Arlington Heights, IL
•Under the Metro Market banner, but not the name
•Annual revenue approaching $4 billion
•Competition continues to grow
•January 2009 - Outstanding Regional retailer, Progressive Grocer
Source: Roundys.com, May 2010 *4
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Roundy’s Mission StatementRoundy’s Understands the lifestyle needs of consumers better than anyone…We are an innovative company that:
•Takes care of the customer, whatever it takes
•Values our employees’ talents and skills
•Is known for integrity in all of our work
•Wins the hearts and minds of customers, employees, suppliers and partners
•Involves and inspires all stakeholders to do their very best
Source: Roundys.com May 2010 *5
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Wrigley Commitment
“We are committed to preserving the heritage and values of the Wrigley Company…We also need to nurture the communities in which we work, and nurture our environment and broader, global community.”
Source: Wrigley.com, May 2010
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*5
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Checkstand Confections
Definition and Role
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Category Definition
Source: Michael John Ang, Wrigley 2010
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Immediate ConsumptionConfectionery
Fun Gum/Candy
ConfectionsGum / Mints Chocolate
TYPEFun Gum
Brand
Authentic Favorites
Form / Flavor
TYPEHard
TYPEChewy / Gummy
Brand Brand
Form / Flavor Form / Flavor
Oral Care / Functional
Everyday Chewing
Intense
Brand Brand
FlavorFlavor
TYPEFun Candy Conf/ Lolli
Brand
Form / Flavor
Brand
Flavor
Mainstream
Brand
Bottles
Contemporary
Brand
Flavor Flavor
Mints
Taste Breath
Freshening
Everyday Intense
Premium Mainstream
BrandBrand
Flavor/Filling Flavor/Filling
Pack Size
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Category Definition
Source: Michael John Ang, Wrigley 2010
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Immediate Consumption Confectionery
Fun Gum / Candy Confections
TYPEFun Gum
Brand
Form / Flavor
TYPEHard
TYPEChewy / Gummy
Brand Brand
Form / Flavor Form / Flavor
TYPEFun Candy Confections/Lolli
Brand
Form / Flavor
Pack size
*Key Brands: Bubblicious, Hubba Bubba Charms, Tootsie Rolls, Air Heads Life Savers, Crème Savers, Werthers Skittles, Starburst, Twizzlers
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Category Role
Confections
•Emotional (reward, craving, comfort, fun, etc.)
•Physical (hunger, mouth freshening, keep busy)
•Incremental Dollars - Builds the basket
•Frequent buyers
•Expandable - the more you have the more you use
Source: DePaul University, Laura Lee Larson, Eh.D.
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Category Definition and Role
Checkstand Confections
•Reward
•Treat for self or kids
•Impulse item
•Convenience
•Immediate Consumption
•Increases in market basket
•Increased profits through higher margin items
•Basket - $8.25 more with confection
Source: DePaul University, Laura Lee Larson, Eh.D.
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Pick N’ Save
Milwaukee, Wisconsin
Category Assessment
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Aging Population
•By 2030, 1 in 5 Americans will be 65+
•Most live 25+ more years
•Largest generation in history
•Boomers
•Wealthiest generation in history
•Expendable income to enjoy life
•U.S. spend $1 trillion more than all under 45
Source: Food Marketing Institute, fmi.org
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*6
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Roundy’s Consumer SummaryKey Demographics
Source: Nielsen Spectra, 2009
Median Income $58,095
Occupational White Collar
Household’s• Children• No Children
34%66%
Ethnicity• White• Black• Hispanic• Other
84.9%7.0%4.2%3.9%
Educational Level College Graduate
ClustersAffluent Suburban Spreads
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Roundy’s Behavior-Scape Framework
Source: Nielsen Spectra, September 2009
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Wrigley SWOT Analysis
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Category Scorecard
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Checkout Total Market Share
•Gum & Mints: 38.9%
•Chocolate: 38.9%
•Non-Chocolate: 41.8%
Source: Nielsen Answers w/e 5/15/10
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Roundy’s Checkout Sales
Source: Nielsen Answers w/e 5/15/10
Non-Chocolate6%
Gum & Mints48%Chocolate
46%
•Gum & Mints and Chocolate carry the checkstand category sales
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Source: Nielsen Answers w/e 5/15/10
Top Brands
*7
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Source: Candy Checkout Spreadsheet Data
Top Chocolate based on SPPD
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Source: Candy Checkout Spreadsheet Data
Top Non-Chocolate based on SPPD
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Source: Candy Checkout Spreadsheet Data
Top Gum & Mints based on SPPD
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Source: Nielsen Answers w/e 5/15/10
Total Sales % Change Candy CheckstandChocolate Non-Chocolate Gum & Mints
Total $ sales: $4,848,680
Increase 18.9%
RM $ sales: +6.6%
Total $ sales: $604,219
Increase 1.4%
RM $ sales: -20.0%
Total $ sales: $5,090,659
Increase 6.6%
RM $ sales: +2.5%
*8
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Category Strategy
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Roundy’s In-Store Research
•Non-chocolate at feet level, away from first glance
•Non-chocolate mixed in with chocolate
•Nerds Rope takes up space of 2-3 products
•Many products mix-matched and hard to find or recognize
Source: Pick N’ Save Store # 6850, Kenosha, WI
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Shelf Space vs. $ Sales by Category
•Gum & Mints outsells shelf space
•Non-chocolate space significantly higher than sales
Source: Nielsen Spaceman Data
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Recommendations
•Move better performing non-chocolate to higher shelves
•Move some chocolate further down shelf
•Addition of the following products (tactics)
•Freedent
•AirHeads
•Switched out Pearsons Nut Role 1.8 oz for 2.2 oz
•Deletion of the following products (tactics)
•Nerds Rope
•Dove Peanut Butter Singles
•Cherry Push Pop
•Continue up-keep of well performing Gum & Mints as well as over-the-belt
*9
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Adjustments to Customer Right
Current Mints
Current Chocolate
ChocolateNon-
Chocolate
Reasoning•Non-chocolate now has a specific location, easy to locate
•Chocolate placed in one area, easy to locate
•SKU rationalization
•Add top selling products from RM to increase market share
•Maximize space for more SKUs, higher SPPD
•Current chocolate- keep top selling items at customer eye-level
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Pick N’ Save Tactics
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Tactics Opportunities
Overview•Aging population
•Freedent
•“Classic chocolates”
•Old-style packaging
•Simplicity
•More shoppable
•Easy to find products - categorized based on subcategory
•“Better for you” products
•Dark chocolate
•Healthier ingredients
•Sugar-free gum
•Dental gum - Wrigley Orbit American Dental Association approved
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Source: Nielsen Spaceman
New Shelving Overview
*10
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Source: Nielsen Spaceman
Current Customer Right New Customer Right
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Source: Nielsen Spaceman
Current Over-the-Belt New Over-the-Belt
*12
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Summary
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Summary of Roundy’s Findings
•Analysis from:
•Trends
•Customer demographics
•Market performance
•Power of brands and consumer
•Maximize shelf space in customer right
•Additions of products suitable for consumers
•SKU rationalization with impact
•Simplified shopping experience
•Even out space to sales
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Next Steps
•Test out in clustered stores
•Run a test run of proposed changes to further review for future implementation
•Allow customers to be able to see the proposed changes and adapt
•Positive findings
•Implement into stores market wide
•Allow customers to have complete variety
•Allow for time for customers to adapt