Bowl App

1
Bowl Appétit!

• Section 1
• Team Number 1/2
• Locker Number 87
• November 19, 2001
• Marketing Strategy Group
• Tim Christie
• Ana Paula Guimaraes
• Andrea Heilman
• Fumiko Kotake
• Marcelo Rosenburg
• Raphael Yook

2
Agenda

• Introduction and problem definition
• Category and brand review
• Bowl Appétit! consumer
• Brand strategy
• Concepts
• Summary

3
Introduction and problem definition
Bowl Appétit! Microwavable pasta and rice
entrées exceeded sales expectations in their
first year. New Bowl Appétit! single-serve
entrées generated strong first-year sales
Source General Mills Annual Report, 2001
4
Bowl Appétit! is a young brand in the convenience
food category
Introduction and problem definition

• Bowl Appétit! is a single-serve, shelf stable
  bowl launched in June 2000.
• BA is available in three varieties pasta, rice,
  and mashed potatoes.
• BA is currently offered in 10 different flavors
  (SKUs) four pastas, three rices, and three
  mashed potatoes.
• BAs preparation instructions are peel back film
  covering, add hot water to fill line, stir,
  re-cover with film, and microwave three to six
  minutes, stir, and let stand uncovered two
  minutes.
• BAs total preparation time is approximately five
  to ten minutes.

5
Bowl Appétit! is at a critical juncture in its
product life cycle
Introduction and problem definition

• BA is in the early stages of its product life
  cycle and has yet to develop a sustainable growth
  model.
• BAs current growth is not sustainable, because
  it is driven by trial rather than repeat
  purchases.
• We must develop a strategy that will enable BA to
  generate maximum sustainable growth in
  single-serve, shelf stable food products revenues
  for the next three years.
• Repeat purchases are critical for sustainable
  growth.

6
Many factors will determine Bowl Appétit!s
strategic success
Introduction and problem definition

• Our recommended strategy for Bowl Appétit! must
• Generate sustainable revenue growth in the
  single-serve, shelf stable food products
  category.
• Meet consumers needs.
• Fit with relevant industry and environmental
  trends.
• Fit with General Millss resources and
  capabilities.
• Increase brand equity.

7
Summary of recommendations
Introduction and problem definition

• Strategy
• We recommend that General Mills refocus its
  overall product efforts on repeat purchases of
  Bowl Appétit!.
• Concepts
• Improve Bowl Appétit!s ability to meet consumer
  needs by including vacuum sealed vegetables to
  three varieties (two rice and one mashed potato
  SKUs) and
• Improve Bowl Appétit!s taste by adding spices or
  gravy to three varieties (one rice and two mashed
  potatoes SKUs).

8
Category and brand review
9
Frozen foods are part of the competitive set for
shelf stable meals, but the opposite is not
always true
Category and brand review -- competition

• Based on our focus group and consumer inquiries
  feedback
• Buyers of shelf stable meals usually go to the
  frozen aisle to look for similar products (for
  example, frozen vegetables and meals).
• Buyers of frozen food do not necessarily go to
  the shelf stable aisle to look for single serve
  meals.
• Consumers who usually buy shelf stable meals are
  more willing to accept new concepts of shelf
  stable meals than the consumers of frozen food.
• Consumers who want meat are unlikely to accept
  shelf stable offerings as a complete meal, when
  no meat is included.
• Shelf stable meals are perceived as less healthy
  and high in sodium, so they do not appeal to some
  health conscious frozen food consumers (for
  example, Healthy Choice and Lean Cuisine
  consumers).

10
Bowl Appétit!s shelving influences its
competitive set with consumers
Category and brand review -- competition

• Bowl Appétit! is most often shelved near other
  shelf stable products, such as
• Noodle cups
• Add water cups
• Microwave cups with meat
• Microwave multipacks
• Pasta
• Bowl Appétit! is not shelved near frozen
  products.
• Bowl Appétit!s consideration set in retail
  stores includes other shelf stable products but
  not frozen products.
• Consumers buying frozen products may not be aware
  of Bowl Appétit!.

11
Bowl Appétit!s competitive set is closer to
shelf stable meals than to frozen meals.
Category and brand review -- competition

• Direct competitors include
• Shelf-stable meals microwave cups with meat,
  microwave multipacks, add water cups, noodle
  cups, instant rice, pasta mixes, and soups.
• Brands Uncle Bens rice packets, Lipton rice and
  pasta packets, Maruchan, Campbells Soup to Go,
  Kraft Mac Cheese, Ragu Express, Chef Boyardee,
  and others
• Indirect competitors
• Frozen single meals
• Brands Uncle Bens bowls, Healthy Choice, Marie
  Callenders, Stouffers, Lean Cuisine, and many
  others
• Substitutes
• Power bars, snack food, fast food

12
Bowl Appétit!s rice and mashed potatoes SKUs
have an opportunity to become more of a meal in
consumers perceptions
Category and brand review perception maps
Meal
Frozen Marie CallendersUncle Bens BowlsHealth
ChoiceStouffersLean Cuisine
Bowl Appétit! Pasta Varieties
MicrowaveCups with Meat Soup to GoChef Boyardee
Noodle Cups Maruchan
Add Water Cups Near East
Frozen
Shelf Stable
MicrowaveMultipacks Mac Cheese Ragu Express
Bowl Appétit! Rice Varieties Mashed Potatoes
Varieties
Rice Pasta Packets Uncle Bens PacketsLiptons
Packets
Note Convenience is a function of preparation
time, need for additional ingredients (for
example, water), and storability.
Side Dish/Snack
13
Bowl Appétit! has an opportunity to increase
consumers perceptions of tastiness in rice and
mashed potatoes varieties
Category and brand review perception maps
Healthy
Frozen Health ChoiceLean Cuisine
Tasty
Rice Pasta Packets Uncle Bens PacketsLiptons
Packets
Not tasty
Frozen Marie CallendersUncle Bens
BowlStouffers
Bowl Appétit! Rice Varieties Mashed Potatoes
Varieties
Bowl Appétit! Pasta Varieties
MicrowaveCups with Meat Chef BoyardeeDinty Moore
MicrowaveMultipacks Mac Cheese Ragu Express
Add Water Cups Near East
Noodle Cups Maruchan
Not healthy
14
In terms of age groups, Bowl Appétit!s closest
competitors are frozen meals, add water cups, and
certain microwave cups
Category and brand review perception maps
Adults
Frozen Marie CallendersUncle Bens BowlsHealth
ChoiceStouffersLean Cuisine
Rice Pasta Packets Uncle Bens PacketsLiptons
Packets
Add Water Cups Near East
Bowl Appétit!
MicrowaveCups with Meat Dinty Moore
Noodle Cups Maruchan
Frozen
Shelf Stable
MicrowaveCups with Meat Chef Boyardee
MicrowaveMultipacks Mac Cheese Ragu Express
Frozen Uncle Bens Mini Bowls
Kids
15
Bowl Appétit! has an opportunity to increase
consumers perceptions of its convenience by
eliminating the hot water step
Category and brand review perception maps
Convenient
MicrowaveCups with Meat Dinty MooreChef Boyardee
MicrowaveMultipacks Mac Cheese Ragu Express
Noodle Cups Maruchan
Add Water Cups Near East
Bowl Appétit!
Frozen Marie CallendersUncle Bens
BowlsHealthy ChoiceStouffersLean Cuisine
Frozen
Shelf Stable
Rice Pasta Packets Uncle Bens PacketsLiptons
Packets
Note Convenience is a function of preparation
time, need for additional ingredients (for
example, water), and storability.
Not so convenient
16
BAs current value proposition is not unique in
terms of convenience and taste. BA differs from
its competitors in terms of the consumer it
targets.
Category and brand review copy strategies

• Main competitors copy strategies

Marie Callenders
Chef Boyardee
Brands
Bowl Appétit!
Uncle Bens
Soup to Go

• Busy moms, active married women

• Young, active couples

• Women (Bowl lovers)

• Tweens and Teens

• Young working women

Target

• Fast
• Satisfying
• Perfect food for the perfect moment

• Good
• Fresh
• Lunch is a masterpiece

• Taste great
• Fun to eat
• Help kids be popular in school

• Amazing
• Delicious
• Convenient

• Convenient
• Delicious
• Help busy life

SMP
Benefit

• Easy to cook (3-5 min)
• Appetizing varieties
• Betty Crocker

• Just minutes in the microwave
• 14 delicious and sophisticated flavors
• 98 fat free

• Bowl
• Tender chicken
• Marie Callenders

• Ready in seconds
• Beef ravioli image
• Mom recommending

• Ready when you are
• Campbells

Support

• Lunch time at home
• Kids taking care of mom

• Lunch or dinner
• Passion, hot

• Lunch at home
• Art

• Lunch at school
• Mom at home preparing lunch box

• Women on the go to work

Theme

• Attractive, active, sexy, satisfying,
  sophisticated

• Artistic, active

• Popular, cool, comforting

• Successful, fashion, active young

• Caring, friendly, comforting, active

Personality
SMP Single Minded Proposition Source Latest
advertisements
17
Bowl Appétit!s price is well positioned within
the convenience food segment
Category and brand review price

• Focus group members responded positively to Bowl
  Appétit!s current price. They perceived that
  Bowl Appétit provides better value than other
  shelf stable products but less value than frozen
  meals.

Price (Average Unit Price)
Source Nielsen Panel Data ( Price/Unit Volume)
18
Bowl Appetit Volume close to Chef Boyardee in
only 1.5 years
Category and brand review Volume
Source Neilsen Scanner Data
19
Bowl Appétit!s distribution is comparable to
frozen and shelf stable products distribution
Category and brand review distribution

• Bowl Appétit!s rice and pasta offerings have
  achieved distribution similar to or better than
  other products.
• Bowl Appétit!s mashed potatoes offerings have
  achieved 11 distribution three months after
  launch.
• We have an opportunity to increase distribution
  of Bowl Appétit!s mashed potatoes offerings.

Source Nielsen Scanner Data, 52 Week Ending
8/11/01
20
Bowl Appétit!s promotional activities have been
only slightly higher than Uncle Bens activities
for its bowls
Category and brand review promotional activities
Note Weighted averages
Source Neilsen Scanner Data
21
Bowl Appétit!s average sales per million
volume is lower than best-selling frozen and
shelf stable products
Category and brand review sales per million
volume

• Bowl Appétit!s pasta offerings have achieved 73
  in sales per million volume, while Bowl
  Appétit!s rice and mashed potatoes offerings
  have an opportunity for improvement.

Source Nielsen Scanner Data, 52 Week Ending
8/11/01
22
Key takeaways for category and brand review
Category and brand review

• While comparisons to frozen foods are necessary,
  Bowl Appétit!s physical proximity to shelf
  stable meals causes its products to be more
  strongly categorized in this set.
• Perceptual map analyses indicate areas of
  opportunities in meals, better taste, more
  convenience (no hot water) and adult-aged
  consumers.
• Bowl Appétit!s value message uniquely targets
  the busy, married, active moms.
• The value of Bowl Appétit! lies between frozen
  meals and other shelf stable products as
  indicated by the average unit price of 1.41.
• During Bowl Appétit!s first year of launch, its
  performance, as measured by volume, was strong
  due to its solid distribution penetration and its
  moderate promotional activities.
• However, Bowl Appétit! needs a viable long term
  strategy to increase its average sales per
  million volume and to more closely match the
  best-selling frozen and shelf stable products.

23
Category and Bowl Appétit!s consumers
24
Consumers tastes are trending toward prepared
meals, convenience, portability, and health
Category and Bowl Appétit!s consumers - Category

• At the Food Marketing Institute conference in
  May, numerous new product offerings targeted
  cooks with no time or inclination to prepare
  meals from scratch but who are willing to spend
  some time to produce a guilt-free nutritious
  satisfying meal.
• Along with convenience and portability,
  consumers are increasingly looking for foods and
  beverages that deliver health benefits.
• With aging baby boomers, we expect this trend to
  continue.
• Higher proportion of empty nesters
• Trend towards nutritional benefits as separate
  from caloric/fat reduction benefits.

Sources Food Makers Eye Convenience, Soy As
Retailers Look Warily at Web.(comprehensive
review of Food Marketing Institute conference),
Brandweek, May 14, 2001. Progressive Grocer
Annual Report, April 2001 Trends in the United
States Consumer Attitudes and the Supermarket,
2000 (Food Marketing Institute)
25
Restaurant menu trends often forecast the next
trend in prepared foods noodle bowls and ethnic
foods
Category and Bowl Appétit!s consumers - Category

• Consumers want to participate in their meals.
• Many restaurant offerings require items to be
  dipped or customized.
• Ethnic foods, particularly hot, spicy foods,
  continue to be popular.
• Comfort foods, such as one-dish meals, are a
  growing trend.
• Excitement foods, such as noodle bowls and
  soy-based sauces, are a growing trend.

Source The Institutional Insight (foodservice
highlight growing consumer food trends),
Prepared Foods, October 2001.
26
Consumers are changing their diets to eat more
fruits and vegetables
Category and Bowl Appétit!s consumers - Category
How Consumers are Changing Their Diets (Top
Reasons)
Source Trends in the United States Consumer
Attitudes and the Supermarket, 2000 (Food
Marketing Institute)
27
Taste and nutrition are the most important
factors for consumers
Category and Bowl Appétit!s consumers - Category
Importance of Various Factors in Food Selection
Source Trends in the United States Consumer
Attitudes and the Supermarket, 2000 (Food
Marketing Institute)
28
Microwave usage - shelf-stable products segment
profile is closer to what Bowl Appétit!s should
be
Category and Bowl Appétit!s consumers - Category
29
Bowl Appétit!s target consumers are busy mothers
Category and Bowl Appétit!s consumers BA!

• Bowl Appétit!s copy strategy suggests that its
  target is busy mothers.
• The target is consistent with the microwave usage
  shelf-stable subcategory of convenience meals
• 91 have high school or higher education, with
  higher index in college education
• 58 are 25 to 44 years old, but with higher index
  in 25-34
• 70 are employed part or full time
• More upscale than frozen
• 71 are married
• 63.3 have 3 persons HH
• 90 are white

30
General Mills has done a good job of generating
trial purchases of Bowl Appétit!
Category and Bowl Appétit!s consumers BA!
Note Brand and Category averages are an
approximation based on the weighted average of
the products Source Nielsen Panel Data
31
Bowl Appétit!, however, has the lowest loyalty
level among its competitors
Category and Bowl Appétit!s consumers BA!
Note Brand and Category averages are an
approximation based on the weighted average of
the products Source Nielsen Panel Data
32
In addition, Bowl Appétit! has a significantly
lower percentage of repeat buyers than other
brands in the category
Category and Bowl Appétit!s consumers BA!
Note Brand and Category averages are an
approximation based on the weighted average of
the products Source Nielsen Panel Data
33
Bowl Appétit! repeat buyers also shop with
significantly lower frequency than its
competitors 1
Category and Bowl Appétit!s consumers BA!
Note 1. We acknowledge the fact that Bowl
Appétit! has less than one year in the market,
but the comparison also holds when comparing the
BA! SKUs data against the other SKUs (even the
new ones) Brand and Category averages are an
approximation based on the weighted average of
the products Source Nielsen Panel Data
(calculation discounts the effect of one-time
buyers on the overall average of of trips per
buyer)
34
BAs low repeat and loyalty level of buyers,
especially for rice varieties, is correlated with
low taste consumer perception
Category and Bowl Appétit!s consumers BA!

• Consumer quotes
• Bowl Appétit! is mediocre!
• I tried Bowl Appétit! Rice bowl, and it is
  really dry! Too expensive for taste!!I wont buy
  again
• I tried the Betty Crocker Bowl and didnt like
  it at all
• It is too salty! I wouldnt buy it!
• I may buy it again for my kids, not for myself!

Source Focus Group feedback Shopper Report,
The, May 2001, The Bowl Roll
35
Key takeaways for category and Bowl Appétit!
consumers
Category and Bowl Appétit!s consumers

• Despite the good trial rates achieved, Bowl
  Appétit! failed to generate appropriate loyalty
  and repurchased rates.
• Consumer feedback suggests that the low taste
  perception is the most important problem
  affecting these low repurchase levels.
• Bowl Appétit! has low penetration among the
  non-Caucasian groups, however these groups are
  not big enough to justify an ethnic-oriented
  campaign. The brand has other important problems
  before expanding to other market niches.
• The target group of Bowl Appétit! brand, busy
  moms and busy women, is well aligned with the
  findings on dry meals consumers profile. The
  target group is not the main cause of repurchase
  problems that BA! is facing.

36
Bowl Appétit!s strategy
37
BA!s strategy will focus on generating repeat
purchases. The concepts used will improve taste
and make it more of a meal in the eyes of
consumers
Bowl Appétit!s strategy

• BA! has low incidence of repeat purchases
  compared to other brands.
• Previously focused on generating trial purchase,
  now must focus on repeat purchase Data
  indicates that BA!'s trial purchase rates are
  comparable to the trial purchase rates of
  products in BA!'s competitive set. While BA! has
  been successful in gaining trial purchases, the
  focus must shift to improving repeat purchase in
  order to achieve sustainable revenue growth.
• Stimulate re-trial With new concepts, people
  who did not initially like the original product
  will have a reason for re-trial.
• Sustainable Improving the quality/taste will
  have long-term benefits
• Strategy will leverage brand equity of delicious
  meal.
• Focus group and secondary research suggest that
  meal and taste perception are the key drivers.
• Strategy supports brand vision of people feeling
  good about having BA! as a lunch anywhere.

Strategy
Generate repeat
Concept 2
Concept 1
Improve taste
Make more of a meal
38
In order to support BA! strategy we will define
its source of brand equity, understand its
situation, and define the brands vision
Bowl Appétit!s strategy

• The brand equity is defined by the main
  attributes and the benefits associated with Bowl
  Appétit!.
• In addition, it is important to analyze Bowl
  Appétit!s parent brand Betty Crocker.
• The SWOT analysis will show us the elements we
  need to investigate (weaknesses and threats).
• The proposed strategy should follow the brand
  vision.

39
Bowl Appétit! carries the image of Betty Crocker
good taste, easy to prepare, comfort food
Bowl Appétit!s strategy
Betty Crocker
Umbrella brand
Trustworthy High quality Comfort
Image
Shelf-stable food mixes
Competence
Baking products
Side dishes
Meals
Desserts
Ranges
Good taste Convenient
Good taste Easy to prepare
Good taste Convenient
Good taste Easy to prepare
Benefits
Baking mixes
Frosting/Icing
Helpers
Bowl Appétit!
Potato mixes
Salad top-pings
Flans/ Puddings
Products
Mashed potatoes
Rice
Pasta
Varieties
40
Betty Crocker invests market-based assets in Bowl
Appétit!
Bowl Appétit!s strategy

• Betty Crocker brand has
• A reputational asset
• Customers are willing to pay more
• A relational asset
• Retailers will stock odd item (non-category)
• Customers trust and are more likely to try
• A knowledge asset
• Product knowledge, knowledge of related
  categories, and shelf stable products.
• Primary outcomes of market asset are positive
• Accelerated cash flow
• Through willingness to try new products
• Reduced volatility of cash flow
• Through loyalty and repeat business
• Enhanced residual values of cash flows
• Through willingness to purchase variants
• Enhanced cash flows
• Through willingness to provide shelf space and
  pay premiums

41
Bowl Appétit! brand equity relies on convenience
and good tasting meal
Bowl Appétit!s strategy
Bowl Appétit!
Umbrella brand
Delicious Convenient
Image
Shelf-stable dry single meals
Competence
Shelf-stable meals in a bowl
Ranges
Quick and good tasting meal Easy and fast to
prepare Delicious meal
Benefits
Pasta
Mashed Potatoes
Rice
Products
Varieties
Three Cheese Rotini
Sour Cream Chives
Macaroni Cheese
Alfredo
Penne Pasta
Herb Chicken
Southern
Broccoli cheese
Butter Herb
Broccoli Cheese
42
Bowl Appétit!s Strengths and Opportunities
support its strategy
Bowl Appétit!s strategy
Strengths
Opportunities

• Ability to charge a price premium for premium
  food products
• Ability to target large market segments and
  sustain minor changes
• Ability to capitalize on a growing market
• Can establish a category that will modify
  consumers tastes
• Mass appeal products (comfort food) means large
  audience outside target group (room to grow)
• Technology for shelf-stable foods that meet
  customers taste / quality expectations makes Bowl
  Appétit! a stage for further products

• Betty Crocker brand name
• Bowl Appétit! name
• General Mills resources/distribution
• Large number of SKUs (variety)
• Shelf-stable (easy to store)
• Differentiation in terms of target and design in
  shelf stable segment
• High penetration amongst adults
• High acceptance amongst younger singles and
  mature couples
• Packaging (bowls) is trendy

43
Bowl Appétit!s weaknesses expose some major
challenges for a new brand
Bowl Appétit!s strategy
Weaknesses
Threats

• Taste in some SKUs (rice potatoes)
• Low awareness
• Low repeat
• Low penetration in ethnic groups
• Meal vs. snack/side dish confusion
• Addition of hot water mitigates convenience
• Hard to read fill line on package
• Poor positioning / recognition in stores
  confusion
• Shelf stable connotation with high sodium, lack
  of health and dehydrated (tasteless) food
• Packaging relatively large difficult to store
• Shelf stability severely limits product
  expandability

• Uncle Bens or Lipton entering shelf-stable
  market
• Stouffers low firing classics (bowl) reduce
  value added of Bowl Appétit! compared to frozen
  food.
• Damage Betty Crockers brand equity.
• Unhealthy and high sodium association with dry
  food
• Category may not really exist
• Once (if) category is established, it will be
  easy for new entrants to copy Bowl Appétit!
• Convenience food is a fad
• If health becomes more important, difficult to
  compete
• Product may be surpassed by more convenient
  products less time to prepare and/or less work
  to make

44
The strategy will leverage the key brand equity
elements of BA! delicious meal
Bowl Appétit!s strategy
No-Go Areas

• Inner core key attributes
• Outer core other meaningful attributes
  associated with BA!
• Extension Areas Possible line extensions or
  product improvement ideas
• No-Go Areas Areas to avoid working
  inconsistent with core attributes

Difficult to prepare
Not convenient
Extension Areas
Aggressive
Add vegetables
Add spices/gravy
Low quality
Non-food
Add cool water
Outer Core
Soups
Bad taste
Non-bowl
Fast
Tasteful
Bowl
Mini bowls for tweens
Radical
Inner Core
Easy to store
Less fat
Active
Frozen
Convenient Delicious Meal
Easy to prepare
High quality
_at_ work
Vending machines
Caring
Shelf-stable
Homy
Betty Crocker
Fortified
Snack places
Shelf-stable non-dry
45
The strategy will leverage the key brand equity
elements of BA! delicious meal
Bowl Appétit!s strategy

• From the possible extension areas, we chose those
  that will add more to the core brand attributes
  delicious meal
• Therefore the concepts are
• Add vegetables
• Add spices/gravy
• The vegetables will make BA! more of a meal.
• The spices/gravy will make BA! more tasty.

46
BA! will pursue growth option in the same market
but adding new varieties
Bowl Appétit!s strategy
Same Market
New Market

• Less fat
• Add cool water

• Vending machines
• Snack bars
• People _at_ work
• Fortified with vitamins

Same Product

• Mini-Bowl Appétit! For tweens and teens

• Add vegetables
• Add non-dry meat (2nd phase)
• Add spices/gravy
• Soup
• Shelf-stable non-dry

New Product
47
The brand vision is to make BA! part of active
mothers good meals option everywhere
Bowl Appétit!s strategy

• Vision
• For those with an active lifestyle, Bowl Appétit!
  is the option for a quick and delicious meal. We
  would see Bowl Appétit! everywhere at home, at
  work, at the gym. Women would feel good about
  eating it and giving it to their friends, family,
  relatives, and work colleagues.
• Actual Brand Positioning Statement
• To busy mothers, Bowl Appétit! is the brand of
  convenient meals that is quick and delicious and
  helps them live their busy lives.
• Desired Brand Positioning Statement
• To active mothers, Bowl Appétit! is the brand of
  convenient meals that is quick and delicious and
  helps them live their busy lives and feel good
  about having a good lunch anywhere.

48
In summary, the strategy chosen will leverage BA!
Brand equity, will address key weaknesses and
threats and will support the brand vision
Bowl Appétit!s strategy

• Generating repeat customers addresses key
  weakness and make the product sustainable.
• Improving taste and making it more of a meal
  supports brand visions active mothers will have
  Bowl Appétit! and feel good about having a good
  lunch anywhere.
• Improving taste and making it more of a meal will
  also leverage brand equity of Bowl Appétit!
  delicious meal

Strategy
Generate repeat
Concept 2
Concept 1
Improving taste
Make more of a meal
49
Strategy and concepts
50
Implementation of the strategy
Bowl Appétit!s concepts

• Having successfully launched Bowl Appétit! with
  the clear message of convenience, the next stage
  is to drive repurchase by improving the products
  and enhancing the consumer experience.
• Incremental improvements cut across the whole
  line of Bowl Appétit! Products.
• Add instructions on adding spice and meat for
  more meal quantity/quality
• Cold/hot water the trend is moving to Pret a
  Manager (ready to eat). Eliminating boiling and
  hot water is expected in the future (The Shopper
  Report, May 2001)
• The pasta line of products has been better
  received, therefore, no major modifications were
  made.
• Staging offering for potential future meat
  introduction rather than moving from one
  extreme end of the spectrum (no meat) to the
  other (meat), the use of an intermediary step can
  move consumer perception incrementally.

Strategy
Concept 2
Generate repeat
Concept 1
Improving taste
Make more of a meal
51
Concept 1 Make it more of a meal!
Bowl Appétit!s concepts

• What is the concept?
• Add 2 oz. vacuum sealed (not dried) vegetables
  to
• Rice Herb Chicken Vegetables (peas and
  carrots) Cheddar Broccoli (broccoli)
• Potato Cheesy Broccoli (broccoli)
• Appropriate for vacuum sealed since these SKUs
  currently use dehydrated veggies
• Include vacuum sealed package inside the bowl
• Additional instructions for preparation required

52
Concept 1 Make it more of a meal!
Bowl Appétit!s concepts

• Consumer
• Focus group insight
• Improve feeling of substantial one consumer
  thought that BA was more like a snack
• Improve quality perception one consumer in
  particular did not like the reconstituted
  broccoli bits in the mashed potatoes. She
  removed them but continued eating the potatoes.
• Consumer survey
• 68 of consumers are changing their diet to
  include more fruits/vegetables (Food Marketing
  Institute Trends survey, 2000)
• Established psychographic market for convenience,
  now developing and refining the message to the
  demographic market (e.g. women, empty nesters)

53
Concept 1 Make it more of a meal!
Bowl Appétit!s concepts

• Competitors
• BA will be the only shelf-stable bowl-centric
  meal with vacuum sealed veggies. As the barriers
  to entry are low, competitors will wait to see
  the success of this concept before making any
  decisions to enter
• Company
• Leverage assets of newly acquired Pillsbury
  Green Giant
• Great opportunity with use the brand equity of
  Green Giant for vegetables
• Ingredient branding (e.g. Tysons chicken in
  Uncle Bens Bowls)
• Position as quality products
• Appearance of expensive ingredients
• Technologically feasible
• General Mills has access to the technology needed
  for such a concept
• No change in the distribution strategy since this
  concept is a product improvement, as opposed to a
  line extension
• Benefits single source

Source Conversation with Peter McDonald
54
Concept 1 Make it more of a meal!
Bowl Appétit!s concepts

• Tactics (I)
• Price Add 0.10 to existing price points
• The vegetable additions, without any other
  changes, will provide an increase in benefit, as
  well as additional costs in manufacturing, so the
  product should have an increased price.
• Since the pasta line will not be changed, the
  perception of this improvement must be reflected
  in the price of the specific SKUs changed, not in
  all Bowl Appétit!.
• Because of BAs placement with other shelf-stable
  products, a price above 1.99 may not be well
  accepted.
• Vegetable cost analysis
• Retail
• Frozen 0.99 for 16 oz. gt 0.0625/oz.
• Can 0.50 for 11 oz. gt 0.0455/oz.
• Assumption Green Giant sourcing will cost less
  than retail (frozen or can)
• Assume 2 oz. _at_ 0.035/oz. 0.07/package
• If price increase by 0.10 and veggie costs
  0.07/package, 0.03 left for packaging costs

55
Concept 1 Make it more of a meal!
Bowl Appétit!s concepts

• Tactics (II)
• Promotion
• First 3 months
• Catalina when a consumer purchases similar
  competitor products, the register will print out
  a coupon for Bowl Appetit. If a consumer
  purchases Green Giant, the coupon could also be
  distributed.
• Free Standing Insert continue promoting to
  generate trials
• End cap displays
• In store demos
• After 3 months focus on repeat customers
• Cross-promotion with Green Giant such as instant
  coupons for BA products
• Instant BA coupons on BA products
• Consumer Message
• Perception of a substantial meal
• Nutrition benefits of real vegetables, not
  reconstituted

56
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• What is the concept?
• Add gravy to Sour Cream Chives Mashed
  Potatoes Butter Herbs Mashed Potatoes
• Good candidate for including separate gravy
  compartment bowl design change needed to ensure
  that gravy does not spill into the potato region
  (see diagram below)
• Powdered gravy will be added in a separate
  compartment within the bowl configuration
• Add water to both gravy and potato compartments
• Heat for 3 minutes
• Serve as desired

New Bowl Design
Gravy
Potato
57
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• What is it?
• Add spice to Southwestern rice
• Southwestern cuisine is known for spicy flavors.
  The addition of Tabasco-style bottles/packets
  would add appeal.
• Tabasco-type spicy sauce (0.25 oz.) will be added
  in the space between the bowl and the outside
  packaging
• Preferred sauce delivery system is the mini
  bottle (currently used by the US military), foil
  is alternative method

Packaging for Spicy Concept
Bowl
External Packaging
Tabasco mini bottle
58
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• Consumers
• Focus group insight
• Improve taste one consumer particularly liked
  the Southwestern rice but thought the inclusion
  of a Tabasco-style packet would be better.
• Consumer survey
• A consumer commented that the taste was
  mediocre (The Shopper Report, May 2001)
• 89 considered taste very important (Food
  Marketing Institute, 2000)
• Hot spices are hot accounting for almost half
  of the countrys spice usage (Prepared Foods,
  March 1999)
• Mass Customization
• Gives consumer control with the level of
  customizing the meal to their taste
• Consistent with the suggestion for adding spice
  customization for other BA product lines (i.e.
  pasta and potatoes)

59
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• Competitors
• As the barriers to entry are low, competitors
  will wait to see the success of this concept
  before making any decisions to enter.
• Company
• Does not deviate from General Mills core
  competency
• Shelf-stable products
• Both dry powder gravy and spicy sauces are
  shelf-stable
• Bowl design costs

60
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• Tactics
• Purchase gravy mix or spicy sauce from low-market
  share manufacturers
• Alternative Joint Venture opportunity with
  McCormick and/or Tabasco
• Capitalize on McCormick/Tabascos reputation in
  the gravy/spicy condiment expertise
• Mutually beneficial in increasing sales
• Ingredient branding
• Position as quality products
• Appearance of expensive ingredients
• Price Add 0.10 to existing price points
• The gravy/spicy additions will increase benefit
  to the consumer, as well as additional costs in
  manufacturing, so it should be reflected in a
  price increase.

61
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• Tactics (II)
• Promotion
• First 3 months
• Catalina when a consumer purchases similar
  competitor products, the register will print out
  a coupon for Bowl Appetit.
• Free Standing Insert continue promoting to
  generate trials
• End cap displays
• In store demos
• After 3 months focus on repeat customers
• Cross-promotion with Tabasco
• Instant BA coupons on BA products
• Consumer Message
• Perception of an improved taste
• Control taste
• Have a fully customizable experience
• Use cold water

62
Concept 2 Make it taste better!
Bowl Appétit!s concepts

• Sample packaging

Southwestern Rice
63
Concepts 1 2 sample free standing insert
Bowl Appétit!s concepts
Try Our Improved Dishes!
More of a meal!
Great Taste!
64
Concepts 1 2 will increase repurchase rates
Bowl Appétit!s concepts

• Benefits
• Sustainable revenue growth
• Build on existing brands
• Betty Crocker
• Bowl Appetit
• Green Giant
• Focus group insight
• Makes vegetable meals more substantial
• Improves taste
• Stimulate re-trial
• Remains in the original unoccupied market
• Staging offering with potential future meat and
  other products
• Leverages expertise in shelf stable products

• Detractors
• Alienate existing repeat customers
• Price increase drive away consumer
• Confusion with brand image (JV)
• Draw competitors if successful
• Investments for bowl/packing changes
• Consumer too much time involvement

65
Summary of changes in product feature and price
Bowl Appétit!s concepts
Veggie Gravy/Spice Price Increase
Rice
Herb Chicken Vegetable 0.10
Cheddar Broccoli 0.10
Southwestern 0.10
Pasta
Alfredo -
Three Cheese Rotini -
Macaroni Cheese -
Tomato Parmesan Penne -
Potato
Cheesy Broccoli 0.10
Sour Cream Chives 0.10
Butter Herb 0.10
a
a
S
a
G
G
66
Revenue forecast
67
Revenue projection was prepared based on detailed
forecast for trial and repurchase levels
Revenue forecast

• Main Assumptions
• Benchmark for Rice and Mashed Potato penetration
  (5.1) Current Uncle Bens figures (adjusted for
  the differences in the panel and scanner data)
• Benchmark for Dry Pasta penetration (8.6)
  Adjusted average of other pasta brands in the
  market (including frozen)
• Benchmark for repeat buyers Rice 31 Uncle
  Bens Pasta 35 - Category average
• Dry food penetration increase (1.5) average
  growth from 94-98 based on MediaMark data
• Mashed Potato penetration as a of Rice (70)
  based on consumer feedback
• Rice and Mashed Potato increase in the Repeat
  Buyers and amount per trip (yearly average of
  30 for buyers and 10 for trips) based on
  consumer feedback and panel data
• Number of items per trial trip and repurchase
  trip calculated based on panel data and assuming
  that pasta and rice item average differs only by
  a higher number of repeat buyers
• Gradual reduction of promotion levels starting in
  Year 2 based on scanner and panel data
• Sales impact of Rice and Mashed Potato low taste
  perception (average of 20) based on consumer
  feedback
• Household growth (1.5) based on historical
  census data

68
Rice mixes are forecasted to lose volume in the
first year due to low taste perception
Revenue forecast
69
Mashed potato is expected to have strong growth
in the first year as a result of the recent
introduction. Overall assumptions were based on
BA! rice mixes information
Revenue forecast
Notes Adjustment for the of months in the
market accounts for the recent introduction of
the product Assumptions were based on
Rice Mixes because consumer feedback indicated
similarities in the two products perception
70
BA! dry pasta is expected to continually grow,
benefiting from the better perception in quality
of the BA! new concepts in rice and mashed potato
Revenue forecast
71
The forecast figures show an average growth of
20 per year, based on a sustainable repeat sales
volume
Revenue forecast
Strategy sustainability driven from increase in
number of repeat sales, while trial volume
remains constant!
72
The forecasted revenue growth is very sensitive
to our key assumptions
Revenue forecast
Note We have not included the volume impact on
prices changes (promotions or price increases)
because we have not significantly changed the
current price levels.
73
Sensitivity analysis shows the strong correlation
of sales growth with repeat sales and market
penetration
Revenue forecast

• As identified in our previous analyses, repeat
  sales are key to generating sustainable revenue
  growth. Our new concepts are focused on
  generating a better perception of Bowl Appetit!
  and, consequently, on generating higher sales per
  buyer and reducing the down side risk in the
  following variables
• Average of trips per repeat buyer (1st
  variable)
• Increase in repurchase level (2nd variable)
• Average repurchase rate for dry rice meals (5th
  variable)
• Negative taste perception impact on BA (6th
  variable)
• Our concepts also include a high promotion
  support that will keep generating awareness and
  trial for all SKUs, reducing the down side risk
  in the following variables
• Market penetration for dry pasta (3rd variable)
• Market penetration for dry rice (4th variable)

Our strategy focus on improving repurchase levels
will help to reduce the forecast downside risk!
74
Summary

• Bowl Appétit!s early success stems largely from
  the single-minded message of convenience and
  delicious meal. Utilizing its market-based
  assets, the next phase must focus on increasing
  consumer repurchase through two new concepts
• Make it more of a meal!
• Vacuum sealed vegetables will highlight the
  consumers interest in vegetable intake
• Make it taste better!
• Gravy and spicy sauce will satisfy the mass
  customization needs of the consumer
• This strategy will result in increasing revenues
• Revenues increase from 47 million to 81 million
  in 3 years
• Average growth of 20 over 3 years