General Mills New Product Growth Strategy and Concepts

1
General Mills New Product Growth Strategy and
Concepts

• Marketing Strategy
• Section 2, Team 7
• Tiffany Mayo
• Andrea Monseliu
• Katie Penz (Locker 198)
• Amber Pierce
• Nikki Silva
• David Zellen

2
Agenda

• Project Objective
• Situation Analysis
• Company
• Competitors
• Consumer
• New Product Growth Strategy
• Build Upon Existing Brand Equities
• Bowl Appetit
• Suddenly Salad Individual Servings
• Progresso Du Jour

3
Consumer Ready Meal TrendsKey Learnings

• Convenience
• No longer sufficient to sustain innovation
• Ease and speed of preparation
• Facilitates preparation of single portion meals
  which is key with the rise in single person
  households
• Indulgence
• Key driver of product innovation
• Attempt to recreate the foodservice and takeaway
  experience at home
• Health
• Least important driver of ready meal innovation
• Perceived as sacrificing taste and texture in
  return for low fat or reduced salt
• Category
• Ready meal product innovation encourages
  consumers to trade-up

Source Reuters Growth Strategies in Meal
Solutions Targeting the in-home consumer.
October 2000
4
New Product Growth Strategy

• To build upon existing brand equities owned by
  General Mills through the creation of premium
  quality products that deliver solutions to
  consumers unmet needs
• Drive incremental volume
• growth for General Mills

5
Existing Brand Equities

• Brand equities identified to build upon
• ALL brands are strong in their respective meal
  categories
• Single-serve opportunities exist for ALL of them

6
Launch Timeline
7
Existing Brand Equities

• Brand equities identified to build upon

8
Lunch Category Perceptual Map
Quick Preparation
Slow-Cooked Stew
Heavy

• Opportunity for a quick and lighter lunch
  offering

9
Consumer Insights

• People love their pasta!
• 1.3B of pasta is consumed/year
• 63 of US homes have 3 or more boxes of pasta in
  their cupboards of these people 62 cook pasta
  once a week
• Classic summertime meal or side dish
• Essence, Seventeen, and Redbook all provided
  recipes for their readers last summer
• 1 line for Bowl Appetit

Sources Princeton Survey Research
Associates, July 1999 National Pasta
Association, 1992.
10
Opportunities

• Growing single-serve category by focusing on the
  Bowl Appetit off-season
• Pasta salad sales peak in summer
• Delivering a quick to prepare, yet lighter lunch
• Capitalizing on popularity of pasta
• Building on established brand equity of General
  Mills Suddenly Salad

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IntroducingNew Single Serve Suddenly Salad
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Suddenly Salad Product

• Flavors-
• Ranch and Bacon
• Caesar
• Classic
• Package-
• White bowl to convey light, refreshing, coolness,
  and cleanliness
• Cardboard slip on package will leverage Suddenly
  Salads green packaging
• Positioning-
• Light, refreshing meal for women on the go
• Women gt 21

Source Suddenly Salad Website
13
Suddenly Salad Place

• Located in grocery near Bowl Appetit
• Will be perceived as a light alternative among
  Chef Boyardee and Dinty Moore options
• Other channels include mass, club and drug
• Not convenience stores because it requires
  refrigeration before consumption

14
Revenue Projections

• Assume majority of sales will be incremental due
  to the
• spring/summer seasonality
• Assume competition will enter the arena after
  initial success
• Continued marketing support with FSIs and
  seasonal
• promotions in year 2 and 3 to maintain share

15
Existing Brand Equities

• Brand equities identified to build upon

16
Soup Category Overview

• 2.4B retail market
• 10B bowls of soup are consumed annually
• Most popular flavors, Chicken Noodle and Tomato
  soup, are among the top TEN food items sold in
  grocery stores
• 40 of the U.S. population carries a meal or
  snack from home at least once during a 2 week
  period
• 40 of working women bring a brown bag lunch at
  least twice a week

Source Campbells Annual Report 2001
Campbells new Soup to Go ads are directed at
working women, WSJ, November 18, 1999.
17
Soup Category Perceptual Map
Premium Quality/Price
Campbell's Simply Home Jar
Opportunity
Campbell's Chunky
Campbell's Select
Progresso Can
Campbell's Ready to Serve Classics
Campbell's Condensed
Campbell's Soup to Go
Quick Preparation
Longer Preparation
Add Water Cups (Fantastic, Knorr)
Noodle Cups (Maruchan, Nissin)
Ramen Noodle Soup
Private Label
Low Quality/Price

• Opportunity for premium quick preparation soup
  product

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Opportunities

• Opportunity for premium, quick preparation soup
  product
• Lunch occasion provides opportunity for new
  innovation
• Given current social environment, consumers may
  increasingly seek comfort foodsoup!

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IntroducingProgresso Du Jour
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Progresso Du Jour Product

• Flavors- Chicken Noodle, Beef Vegetable,
  Minestrone, Roasted Chicken Italiano, Creamy
  Tomato Basil
• Package- deeper bowl with a smaller circumference
  to mimic a soup crock
• Positioning- Adults gt 21

Source Progresso Website Flavor contest,
Campbells Website
21
Progresso Du Jour Positioning

• Value Proposition
• Progresso Soups are ready to serve and leave you
  feeling satisfied and good to go.
• Progresso chooses the finest ingredients,
  carefully attending to flavor, texture and color,
  and use them generously, with more bigger pieces
  of vegetables, pasta and meats.

Source www.progessosoup.com
22
Revenue Projections

• Initial cannibalization from Progresso 265,000
• Assumed increased competition in year 2
• Assumed new flavor launch in year 3
• Category growth and continued support with FSIs
  and seasonal promotions in years 2 and 3

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Summary

• Total revenue projection from repositioning and
  new products
• Built upon existing brand equities owned by
  General Mills through the creation of premium
  quality products that deliver solutions to
  consumers unmet needs
• Positioned for long-term sustainable growth

Revenue Projections include Bowl Appetit
repositioned
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Back Up
25
Revenue Projections Bowl Appetit
26
Seasonal Implications
Volume Aug 00 Aug 01

• Bowl Appetits change in volume between Fall
  and Summer -30
• Remainder of categorys difference -4

Data does not include Ragu Express, launched
Summer of 2001
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Tested Concept
Introducing single serve Suddenly Salad Pasta
Salad
The new quick light meal for people on the
go   When youre hungry, the easy thing to do is
to grab some heavy, fatty fast food. This avoids
dealing with preparation and cleaning needed in
making a meal, but provides so little of the
nutrition needed to get you through your
day.   Now Betty Crocker brings you single serve
Suddenly Salad Pasta Salads. These tasty salads
come in their own bowl and are simple to prepare.
Simply, pop them in the microwave for five
minutes, and leave them in the fridge for another
five minutes to cool off. In ten minutes, you
will have a light pasta salad with chopped
vegetables and a packet of Paul Newmans lite
Italian dressing to drizzle over.   Betty
Crockers single serve Suddenly Salad Pasta
Salads offers a tasty, light, and quick meal with
no clean up.   Single serving- 1.75
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Market Research Results

• Purchase intent 40 -Definitely would buy and
  Probably would buy.
• Females lt 30, 56 - Definitely would buy and
  Probably would buy.
• Im always looking for refreshing alternative at
  lunchtime!
• Great idea when will it be on the shelf?

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Suddenly Salad Price

• Price- 1.75
• Acceptance from tested respondents
• Offer trade discounts to encourage retail
  acceptance
• Current Suddenly Salad priced at 2.29 per
  package 4 small servings
• Individual size priced at a premium due to bowl
  convenience

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Suddenly Salad Place

• Located in grocery near Bowl Appetit
• Will be perceived as a light alternative among
  Chef Boyardee and Dinty Moore options
• Other channels include mass, club and drug
• Not convenience stores because it requires
  refrigeration before consumption

31
Suddenly Salad Promotion

• Placement in Self, Oprah, Rosie and New Woman
  magazines
• Sampling program through mall tours
• Cross-couponing with boxed Suddenly Salad
• FSI to generate trial in April 2002
• Targeted Catalina coupons off consumers
  purchases of yogurt and bottled water
• Coupons offered at Ballys gyms

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Media Flow

• Awareness FSI and Catalina. Trial and adoption
  driven with print, cross promotions and sampling.

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Competitors Reaction

• Kraft Pasta Salad is the other major player in
  boxed pasta salad
• Have understanding and technology of shelf-stable
  single serve category with Easy Mac
• May move into category after our initial seasonal
  roll-out

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Revenue Projections Suddenly Salad
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Soup Category SWOT

• Strengths
• 5 growth of U.S soup consumption in 2001b
• Comfort food- warming aroma and flavors that
  conjure up memories of Moms kitchen
• 96 U.S. household penetrationa
• 10 billion bowls consumed in U.S. per year
• Soup offers high profit per foot in retail

• Weaknesses
• Sodium level high
• Price increases last 5 years- potential
  price/value issue
• Some consumers do not like new recipe flavors
• Has not kept up on trend with convenience
• Seasonal

• Opportunities
• Premium ready to eat in single-serve packaging
• Ethnic flavors (Cajun, Asian, etc)
• New occasions
• Premium with high quality vegetables, meat and
  pastas
• Restaurant partnership

• Threats
• Private label
• Soup-specific restaurants
• Single-serve meal substitutes
• Global warming
• 4.5 soup consumption decline in soup in 2000

Source Campbells Annual Report 2001
SP lowers ratings for Campbells on
Financials, Debt, WSJ, November 17, 2000
36
Tested Concept
Introducing Progresso Hearty Soup Bowls
As a busy adult, you are seeking a quality,
satisfying meal- something that will nourish you
from the inside out. A hearty soup sounds good,
but you dont have the time to go to a restaurant
or to go through the fuss of preparing your meal
conventionally on the stovetop.   You want a
nutritious meal, but you also need it to be quick
and convenient. A hearty soup is a soothing,
comforting meal that helps ease the tensions of
the day.   Our new Progresso Hearty Soup Bowls
are easy to prepare and can be taken anywhere.
Just heat and eat with the spoon weve included
for you.   From Progresso- the soup brand that is
know for hearty premium soups.   Suggested
flavors include Roasted chicken and dumpling
Hearty tomato chili Beef stew with potato,
carrot and mushrooms   Single serving- 1.79
37
Market Research Results

• Purchase intent Top 2 Boxes - 60
• Universal appeal to all segments of respondents
• More classic flavors were suggested by consumers
  tested

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Progresso Du Jour A good fit with General Mills

• Leveraging Progresso brand equity purchased from
  Pillsbury
• Leveraging bowl technology used for Bowl Appetit
• Synergy with Progresso retail distribution and GM
  sales force
• Expertise in category- 30 share of soup
• Building on corporate objective of product
  innovation

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Progresso Du Jour Price

• Price- 1.79
• Current Progresso canned soup priced at 2.39 for
  a can 2.5 servings
• Compared to competition
• Campbells Soup to Go priced at 1.34, our
  premium identifies larger serving size and
  premium product

• Source Store walk analysis and A.C. Nielsen
  data

40
Progresso Du Jour Place

• Located in grocery soup section within the
  Progresso brand block
• Other channels include convenience, mass and club
  near on-the-go lunch offerings

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Progresso Du Jour Promotion

• Cross-promotion with regular soup (coupon under
  the wrapper of soup cans)
• Trial generating FSI
• Print People, Self, Family Circle, Better Home
  and Garden (general appeal with adults gt 21)
• TV Prime time, soaps
• On Pack Promotion with Saltine crackers

42
Progresso Du Jour Media Flow

• Awareness driven by T.V. spending and FSI. Trial
  and adoption driven with print, cross promotions
  and FSI.

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Progresso Du Jour Competitive Reaction

• Current soup market share-
• Progresso approximately 30
• Campbells approximately 70
• Campbells has been more innovative and on trend
  than Progresso with new ready to eat products
• Campbells may react by copying with their own
  single serve bowl product
• However, Progresso, currently positioned as
  premium, ready-to-eat soup, likely to be an
  easier transition into single serve than
  Campbells know by consumer for condensed soups
• Additionally, General Mills already possesses
  bowl supply technology and scale with existing
  Bowl Appetit

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Revenue Projections Progresso Du Jour
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Revenue Projections

• Initial jump in revenues due to Potato Lines
  gain in ACV
• Category growth and continued support with FSIs
  will boost market share in years 2 and 3