Group 2:Adam PtacekCamille GuezennecJi Yun KimFelipe RebolledoPierre-Adrien RoyPrashanth RamachandranSégolène Daval-FrérotZainab Akano

Agenda

Reminder of the 1st recommendations

Our recommendations

Option n°1: Sandwich biscuits Market overview Proposition of strategy

Option n°2: Peanut Butter Market overview Proposition of strategy

Conclusion

Last time we have followed a structured approach

to identify the best oppotunity: snacking in the USA

Snacking

Our recommendation: make a partnership with a big player, either on the sandwich biscuit or the peanut butter market

Time to go!Time to go!

Make a partnership with a big player

Make a partnership with a big player

USA / Mass MarketUSA / Mass Market

Biggest market shares in 2014 Less fat, more calcium, same taste An Oreo in line with Mondelez willness

to do a « mindful snacking » A possibility to extend the partnership

to other brands of the group

Biggest market shares in 2014 Keep only the « good fat » and a natural

taste An improvement of the ratio good/bad

fat Taking advantage of the consumer

increasing awareness regarding natural and healthy products

Snacking has evolved from a between-meals indulgence into a full-on lifestyle for lots of time-strapped US consumers

Percentage of consumers who said they ate these snacks in the las 30 days

"As the lines continue to blur between meals and snacks, marketers will have to answer with offerings that pack a flavor and nutrition punch in a convenient, portable pack."

>50%

91%

Eat at least 2 snacks per day

Eat at least 1 snack per day

Source: Audrey Iachella, de Brands Within Reach

Source: Nielsen Global Snacking Survey,Q1 2014Source: http://www.foodnavigator-usa.com/Trends/Healthy-snacking

Sweet biscuits are dynamic, and more specifically sandwich biscuits, which remain the hugest and most dynamic sub-segment (+ 20% in value). +1,2%

growth for Sweet Biscuits in USA between 2013

and2014

Few big manufacturers own the main national brandsOreo is the leader with an increasing market share

Other

1

2

3

4

5

10.0%+1.4pt

9.9%-0.5pt

8.7%+0.4pt

7.4%+0.2pt

63.9%

*

**

* Value market share 2014** Evolution of value market share 2014 vs 2011 (pts)

Source: Euromonitor

TASTE HEALTHSATIETY CONVENIENCE

On the biscuit market, consumers pay more & more attention to health concerns, which could slow biscuits’ boom

75%

Living at a quicker pace, consumers are increasingly looking for health and wellness

50%"I can manage many heath issues

through proper nutrition"

"It can be a challenge to eat healthy"

ASPIRATION BEHAVIOR

NO SPECIFIC HEALTH ISSUE ADRESSEDWORSE TASTEHIGHER PRICE

3 MAIN BARRIERS

A REAL OPPORTUNITY BY BRIDGING THE GAP

NEEDS

A sustained energy benefit

New variety of protein bar with good taste and texture

Sources: Nielsen, "Health and wellness in America", 08-14-2014 Nielsen, "Breakfast: still the most important meal of the day", 08-19-2014

In addition, few players intervene on the functional biscuitsmarket, so Emulsar should seize the opportunity

Key functional elements added on functional biscuits: calcium, omega 3, vitamins & minerals

Companies may be discouraged by regulation: in 2014, the Supreme Court ruled that companies can sue each other over false or misleading health claims

Only 1,2%of the functional

food in USA in 2014

+64%of growth

between 2009and 2014

Advantages Drawbacks

B2Bwith a main player

Easier to enter this competitive market

Possibility to communicate on the new benefits of the product

Difficulty to negotiate

B2Bwith a private label

Easier to enter this competitive market

Difficulty to negotiate Few budget to

communicate on the new benefits of the products

PL = only 2% of the market

B2C More autonomy in the

decisions Better margins

More costs 3 big players and a very

competitive environment Insufficient knowledge

about the American market

To enter the market, Emulsar should follow a B2B approach and create a partnership with a key player

We suggest you to go on Mondelēz International’s flagship on the sandwich biscuit market: Oreo

A long history in the USA: More than 100 years of existence Distributed worldwide > 32 flavours: some created for special events 9 different shapes: Double Stuf Oreo, Different formats: Familiy Size, Normal, Single… Price: $ 2,98 for the 14,3Oz packet (avg price for PL $ 2,21) A high calorie cookie (160 kcal for 3 cookies for the Original)

10.0%of market

shares on biscuit market

51.0%of MS on

sandwich biscuit market

The leadership of Oreo is clearly visible on the shelves

Oreo must satisfy at the same times the expectations of both children (taste) and parents (health)

ParentsMiddle class, suburban, 2 or 3 children

ChildrenAges 4 to 12 years old

Satisfy ungry

High caloric value

Delicious taste

Crème fillingn lots of flavors

Fun

Twist, lick and dip 

Imitation need

Health

Make children drink milk

No too much fat/calories

Convenience

Remain fresh all the day

Source: Nabisco Oreo Analysis , Claire Rieder,University of Minnesota Twin Cities

HEALTHHealthy benefit of milk, but…High calories and fat content (160 kcal, 7 grams of fat)Risk that one day parents stop letting their children consume unhealthy treats As a result, development of better choice products: 100-calorie Double Stuf Oreo, Oreo Carbwell Less fat, mut more calories since Mondelez makes biscuits sweeter to save the taste

High fat and calories content doesn’t appeal to the rising health conscious buyers. Oreo must become healthier without making any concessions to product taste.

TASTE Superior taste to other brands Consumers prefer the vanilla filling over the chocolate cookie covering Double Stuf Oreo invented since consumers wanted more of the delicious crème filling Changing the traditionnal recipe is always risky (cf. the disaster of new coke)

STRONG ADDED VALUE OF EMULSAR Huge work toconciliate them but currently no

satisfying solution

xx

Currently researchers are facing difficulties with making Oreo healthier without sacrifying the taste Need for a fat which is solid at room temperature to get the right texture of

the white center

The filling has to be firm yet soft, sweet but not grainy, and Oreo fans should remain be able to twist open the cookie as they always have.

A difficult task since the basic Oreo recipe (nearly 60 percent sugar and fat) can't change without altering the taste so many consumers love.

=> The Mondelez researchers had nailed the taste, but the secret oils in the new filling made the middle seep out during a shipping test.

With Emulsar, Mondelez will have the solution

x

Our strategy is based on 4P’s pilars

Work on the crème filling of the Oreo Double Stuf’s original flavour:

It’s the crème filling which makes Oreo delicious

Emulsion can be used for the filling More crème filling = more impact

Benefits At least - 35% fat (3,5g => 2,3g =

Oreo Original) +100% protein (1g => 2g) +100mg calcium

Then, possibility to go on other brands:

Belvita: in compliance with consumers needs, launch in 2012 and already a success

Newton: with real fruits, high in fiber, Ritz: proposes also fillings with salty

flavors Nutter Butter: with peanut butter

3,12$ Special event pricing (Halloween,

Thanksgiving, Christmas, Easter)

Retail store (93,21% of the sales in 2014)

Mention the benefits on the packaging

Advertising on TV and online Product sampling – consumers to

learn about the nutritional aspect of the biscuit

Promotional campaign to target schools and educational institutions

PLACE

PRICEPRODUCT

PROMOTION

Emulsar has strong arguments to convince Mondelēz International to make a partnership on Oreo

Several brands in the Biscuits category that can be impacted in the following years:

A shared willing to create healthy products:

Grow our better choice products to 25% of our revenue Reduce sodium and saturated fat by 10% Increase whole grains by 25% Expand our portion control options (200 calories or less) by

25% Place calorie labeling front of pack on all relevant products

globally by the end of 2016

A way to win market shares over:

15%market shares

for Oreo in 2016

Peanut butter, a special product in the heart of American people

« In an era of affluence accompanied by increased concerns about the relation between nutrition and health, the reduced fat peanut spreads

have found a steady market and the standard has remained intact »

© US Food and Drug Administration

“ Peanut butter accounts for approximately half of the U.S. edible use

of peanuts — accounting for $850 million in retail sales annually”

“ The Peanut Butter Production industry has exhibited impressive growth in the five years to 2013 as revenue increased 7.9% per year on average to

$1.5 billion ”IBISWorld, Industrial Analysis Company

Regarding consumers, peanuts and peanut butter are the most popular nut choice among American people. According to the National

Peanut Board :

peanut butter is consumed in 90% of U.S. households the average American consumes more than six pounds of peanuts and peanut butter each year. 

Diversified and dispersed customer baseStrong position of grocery shops

Many alternatives available on the marketVery competitive environmentNo switching costs

Pressure from alternatives to peanut based spreadsHuge growth of chocolate spreads which accounts to 80% of the total growth of spreads for the year 2014

No switching costs for customersLimited place in the grocery store shelfs

Strong market leader JM Smucker Co Successful independent niche brands like Justin’s and SunbutterSuccessful new entrant The Hershey Co

Customer preference

Supply and Demand

Substitute market

Existing Competition

An industry with one market leader but many others actors, fighting to reach diversified customers

Peanut butter 4 major competitors, representing 44% of spreads market in 2014

Others

1

2

3

4

5

19.94%

9.79%

9.36%

4.79%

28.08%* Value market share 2014

Source: Euromonitor

Peanut butter a product regulated by the FDA

Peanut butter a product that raises debates : Good or bad for health

A product rich in good components : 2 tablespoons = 2 grams of dietary fiber, 6 grams of total carbohydrates, 8 grams of protein, vitamin E, vitamin B-6 and magnesium…

But also in fat : 2 tablespoons = 16 grams or fat

However is this fat really bad for health ?

80% of this fat consists in healthy unsaturated fatGood fat = 80% Unsaturated fats (poly and monounsaturated fats) can

benefit the health by decreasing risk for certain disease (heart disease), lower bad cholesterol and improve good one.

Saturated and trans fats have a negative effect on heart health. Saturated fats increase levels of bad cholesterol without affecting good cholesterol.

Bad fat = 20%

less than 0.001g of Trans Fats

”standard peanut butter” Most sold by national brands. It’s creamy and thick, even at room temperature, and usually has salt and sugar in addition to peanuts in the recipe. Some brands also contain a small amount of stabilizer (partially hydrogenated vegetable oil) to keep the oil from separating.

Appeared to meet America's increasing hyper-awareness of trans fats. Though most brands have recently eliminated trans fats.Main difference : it rarely has extra ingredients added. Only peanuts.Problem : it separates easily into the oil and peanuts.

A lower level of fat but some added ingredients that make the level of calories remain the same(focus in new slide)

On the market, a large range of PB products, sorted out in 3 main categories

Regular PB : Natural PB : Reduced fat PB :

Reduced fat PB products present on the market until now : 3 main problemsLess favorable nutritional profile :

No fewer calories and some good fats less

Added carbs, sugar and salt :Fat is reaplaced by corn syrup solids, sugar, molasses higher level of sugar and total of carbs

An altered taste : Less peanut flavor. Reduced fat spread hover around 60 peanuts instead of 90 for natural one.

For now if consumer are theorically favorable to reduced fat peanut, they prefer rather buy natural peanut butter products.

But among this 3 kinds .. Which one is the healthier ?JIF example

As a conclusion on this market, a huge room to launch a natural reduced fat PB

Strong points :

25% less fat than regular PBMade without hydrogenated oils

Weaknesses :

But still the same level of calories2 ingredients added to the regular natural PB:

* Maltrodextrin (replaces fat) * Reduced ground peanuts

Only One product on this segment :

What Emulsar can bring on this particular product ? Launching the new low fat natural PB

Strategy to go inStrategy to go in

Emulsar Capabilities

Added value in 3 points

Creation of the healthier PB product on the market

Any added ingredients : •The starting base : the regular natural PB •Only peanut and salt

• The first product on the market with less calories :

• Only added component = water

A product as tasty as the regular one with much less saturated fat

Why a partnership with J.M. Smucker co on this product ?

Own the two best performing PB brands Smucker and Jif : Market shares : 29,7% of spreads in 2014

An emphasis put on health (reduced fat, omega 3, no salt, organic product) : Jif communication oriented towards mothers looking for the best for their children

JIF range of products : an empty place to launch a Natural Reduced fat PB

Capacities and budget to communicate on this new innovative product

The J.M. Smucker Co. will roll out a wide variety of new products across categories and platforms under its Jif and Smucker’s in an effort to boost the iconic brands’ worth to $1 billion each, a company executive said. (2/2015)

Peanut Butter – 4P’s

Peanut butter consumed by over 90%

Smucker’s and JIF – established PB brand

Packaging and labelling is key for Emulsar to emphasize on the nutritional aspect

Distribution channels to be retail store outlets and confectionarties

Branding – versus competitors

PB brand to offer less calories – pricing strategy to be accordingly adopted

Taste factor – key to pricing Commonly purchased PB – 510g

with an average price of $2.3 Discounts and freebies – vital

during the initial launch

Distribution channels to be retail store outlets and confectionaries

Door to Door sales – helps to impose the nutrional aspect of the PB product

Competitors analysis – Analysis of inventory management

Advertising and hoardings – USA consumer market are driven by such marketing techniques

“Made in the USA” – More consumers buying American

PLACE

PRICEPRODUCT

PROMOTION

How to convince J.M. Smucker Co. to make a partnership with Emulsar

Several brands that can be impacted in the following years :

A shared willing to create healthy products:

No more hydrogenated oil, no more palm oil, no more trans fat, homogeneously less saturated fats

No added ingredient increasing the sugar level A product 100% natural The first peanut butter with less calories

A way to gain market shares over :

The only low fat natural peanut

butter on the

market

Conclusion

Time to go!Time to go!

Make a partnership with a big player

Make a partnership with a big player

USA / Mass MarketUSA / Mass Market

Biggest market shares in 2014 Less fat, more calcium, same taste An Oreo in line with Mondelez willness

to do a « mindful snacking » A possibility to extend the partnership

to other brands of the group

Biggest market shares in 2014 Keep only the « good fat » and a natural

taste An improvement of the ratio good/bad

fat Taking advantage of the consumer

increasing awareness regarding natural and healthy products