Swedish Bakeries and Stone-Ground Milling:

A Match Made in PastryProfessor Goren | International Marketing | Final ProjectMiriam Brownstone, Stephen McGrath, Pedro Rojas, James Skay, Ognyana Toneva, Sallina Yung

AgendaPer 100g

Amount% Daily Value

Bob's Background1 Slide

Sweden2 Slides

Target Consumer1 Slide

Competition1 Slide

Brand Ladder1 Slide

Entry Strategy5 Slides

Communications3 Slides

Commercial1 Slide

Next Steps 1 Slide

Vitamin A10%

Calcium25%

Iron5%

Awesome60%

About Bob's

• Family Company• Stone-ground

Milling• Based in Oregon

About Sweden• Demograph

ics• Economy• Politics

Swedish Culture

• Interested in Organics• Live for Health &

Wellness• Cook at Home• Bake for Celebrations• Fika – Love Coffee• Pro-America

Target Demographic• Young (25-45)• Educated• Mid/Upper Income• Health-Conscious• Progressive• Environmentally Aware• Professionally

Employed• Loves Family• DIY• Independent

Orkla Dagsmeja I Love EcoLarge Swedish B2B and B2C producer

B2B & B2C Private Label, Bob's Main Competition

Food not their main focus

House of Brands Relatively New

Vertically Integrated

Target Organic Lifestyle Consumer

KRAV Certified

Competition

Bob’s Red Mill Brand Ladder

Brand Purpose Whole grains from the heart

Personality A hard working, next-generation American farmer who takes pride in their food and the environment.

Reason to Believe

Intrinsic: The processes and traditions that Bob created make superior products., like stone-ground milling.Extrinsic: The Swedish organic certification KRAV and endorsement by Tina Nordstrom (celebrity chef)

Brand BenefitEmotional: I’m doing good for myself and others by choosing something natural and long-establishedFunctional: Stone-ground milling leads to superior quality goods

Brand InsightI want to make healthy choices for me and my loved ones, but with so many new options in the market, it can be hard to know whom to trust. Bob's was organic before organic was a trend.

Target Audience Young, 25-45 professionals who are willing to spend a premium on healthy choices

Entry Strategy: Timeline

• 0 Months: B2B Bakeries• 6 Months: B2B Hotels• 12 Months: B2C Supermarkets• 24 Months: FDI "Bob's Whole Grain

Store"

Entry Strategy: Product & PriceProduct:• Major Offerings

Initially (10 Grain Flour, Gluten Free Oat Flour, Yeast)

Price:• Slightly above I Love

Eco

Entry Strategy: Cities

• Stockholm• Most populous and most visited city• By 2020, 17% population

increase expected• Premier talent and investment hub• Retail sector worth €73 Billion in

2012• Gothenburg• Malmö

Entry Strategy: Bakery Partners• St Jakobs Stenugnsbageri:

classic and internationally known bakery in Lund

• Cupcake sthml• Lundbergs

Entry Strategy: EMCs & Indirect Export• Bob's Strategy: In-direct Exporting with

EMC and a three member team• Send product via an export management

company (EMCs) to facilitate entry and produce organic certification • EMC will establish marketing presence• Soliciting orders from Swedish customers • Manage transactions and distribution

• Local Sales, Marketing and contracting local team will seek local hospitality and café customers, plus develop best practices and establish marketing campaigns in addition to the EMC’s role

Promotion• Sponsor local baking contests and events• Introduce in-store displays at partner bakeries• Host celebrity baking events• Sponsor "Cinnamon Bun Day"• Baking and Shopping Discount Day at Ikea

Promotion (cont'd)• Media:• Celebrity Cooking Shows: Tina Nordstrom• Cooking Blogs• YouTube Channel• Digital: Display ads on big name sites;

scale display targeted ads

Touchpoint Wheel Create

awarenessDevelop

consideration

Develop preference

Bakeries, IKEA;

then retail

Reinforce the purchase

Nurture ongoing loyalty

Pre-Purchase

PostPurchase

Purchase

Cooking blogs, cooking contests

Celebrity chef, bakeries

promotion

Perceptual Map Artisan

al

Mass Market

Low Quality

High Quality

Bob's Next Steps Abroad• Diversify product line offering• Introduce "Bob's Whole Grain Store" into

Stockholm• Local sourcing: buy grains and products from

local farmers• Participate in Community with CSR activities• Expand into Scandinavia, then Europe

Thank You

Image Sources

http://millpictures.com/mills.php?millid=1393 http://www.wunderground.com/wximage/skyfox/1?gallery= http://www.oregonlive.com/clackamascounty/index.ssf/2010/02/bobs_red_mill_natural_foods_ro.html http://www.discover-the-world.co.uk/images/region-maps/sweden.jpg http://www.etsy.com/market/nordic_knit http://thefashionmirror.blogspot.com/2013/11/the-great-beauty.html http://www.wholefoodsmarket.com/blog/bobs-red-mill http://riedsfoodbarn.com/announcements/bobs-red-mill-natural-food-products http://www.deviantart.com/morelikethis/169314878 http://www.barndepot.com/store/productDetail.cfm?groupid=157&subcatid=55 http://www.123freeicons.com/social-network-free-icon-set/ http://familyholidays.fourseasons.com/childrens-museum-day-camp-at-fs-miami/

Appendix

Bob's Red MillThe Journey to Sweden

MIRIAM BROWNSTONE, STEPHEN MCGRATH, PEDRO ROJAS, JAMES SKAY, OGI TONEVA, SALLINA YUNG

Agenda• Company Background & Products• Context• Customers• Competitors• Collaborators• SWOT

Company• Company founded by Bob Moore, late 1960’s• He began milling in North Carolina• Moved to Oregon City, Oregon in late 1970’s

and purchased a mill where the company took off by grinding flours and cereals for locals

• Fire destroyed the mill in Oregon city (1988)• He started again in Milwaukie, Oregon in a

320,000 square foot facility• Currently in US & Canada

PRODUCTS

Context - Country

Context - Market• Economic• The inheritance tax was eliminated in 2005, the

wealth tax in 2007 and taxes on residential property in 2008.

• Thanks, in part, to these tax changes, capital income has soared.

• For the past two years, economic growth has been 4 percent on average, and the current account surplus was 6.7 percent in 2011.

Context - Market• Demographics• The population is about 12 million• In recent years the significant net migration has

been the largest contributing factor to population growth. This trend is expected to continue in the near future.

• The share of older persons is expected to increase. 19% of the population in 2011 was age 65 or older.

Context - Market• Psychographics• Swedish consumers’ interest in organics continue

to increase and is gaining market shares on behalf of conventional food products.

• The major retailers in Sweden are actively promoting organic products and their own organic labels have gained broad recognition.

• Notice boards at Stockholm’s suburban railway stations are filled with advertisements for cleaners, a once an unheard of luxury.

• In general, Swedish consumers are very interested in health and wellness.

Context - Culture • Swede’s Eating Habits• Most people eat at least one home-cooked meal a day, either

lunch or dinner.• Most Swedes do not dine out more than once or twice a

month.• High interest in food and cooking – due in part to the large

number of popular celebrity chefs, cooking shows and cookbooks Chief among them is Tina Nordström.

• Many single person households are resulting in ready to eat meals containing organic ingredients to grow in popularity.

• Swedes are bakers! – common for them to bake birthday cakes and to bake for other special occasions

• Coffee breaks - fika

Legal

• Ease of doing business - Ranked 20th in Index of Economic Freedom

• Legal framework is transparent• Low tariff rates for imports and few-non tariff

barriers• USDA certified organic is accepted in the EU

customersSegment % of Pop. Demo Lifestyle Other Comments Segment

Type

Health-conscious

That buy organic:53% - sometimes; 19% - regularly (1)

Younger people; well informed

Physically active; health & wellness magazines; willing to spend a premium on quality food products

Public discussion of high salt and sugar content in breakfast cereals

Existing & emerging

Parents 30-40% 25-55 yrs old Busy; easy solutions Parental leave EmergingHome Cooks

Swedes have a strong baking tradition (fika) & they like to bake at home (3); 70% dine out less than once a month (4)

Female skew Cooking magazines; watch cooking shows; moms; older women

Sales of organic bakery products have doubled b/w 2007-2012 (5)

Existing

Gluten-free Diet

2-3% 20 year olds (boom in celiac disease)(6); children under 12 – 3%

(7)

Have to eat no gluten and less sweet

Epidemic in the 80’s; more common than US and EU – gluten free options are common incl. in fast food restaurants

Existing

US Fans 67% (2) Younger people

Trendy; like and follow US culture

Other successful US brands – American Apparel, Converse; burgers

Emerging/potential

b2b consumers• Food producers• Restaurants & Bakeries• Hospitality Industry• Public Sector• Private label?

competitors & CollaboratorsICA

- 49.4% Market Share

-Part of ICA Group

-1,371 stores in Sweden (December 2013)

-Has own organic line called “I love eco”

- Sells products in convenience stores, mid size supermarkets, supermarkets, and hypermarkets

COOP-21.4% Market Share

-Owned by COOP Norden

-1,100 stores

-Has the largest selection of sustainable food in Sweden

-Änglamark is the leading trademark for organic products in Sweden

Axfood-15% Market Share

-Retail operations conducted through 3 wholly owned retail chains

-840 stores in Sweden

-collaborates with a large number of proprietor-run stores that are tied to Axfood through agreements

- Wholesale products

Corporate Strategies

ICAGoals as of 2013:- Drive sales- Develop

product range

- Increase percentage of private labels

- Ensure competitive pricing

- Focus on big cities

COOP- Introduced a

Product Lifecycle Management (PLM) portal

- Goal of the PLM

portal is to increase private label products from 17 to 25 percent

Axfood

- Divided into 3 business areas: Axfood Narlivs, Axfood Snabbgross, and Tempo

- Axfood Narlivs focuses on active sales and marketing

- Axfood Snabbgross is a cash and carry wholesaler

- Tempo is the store name operated by Axfood Snabbgross

Thoughts on competition• Relatively low entry and exit costs• Rapid growth of health consciousness, organic

product revenues are rising• Large retailers have heavy branding, making

direct competition for new retailers difficult• Weak historic growth in the Swedish retail

industry discourages new entrants

SWOTStrengths

• Forward & backward integration

• Diverse product portfolio• Traditional stone milling

increases product quality

Opportunities

• Hotels and restaurants organic menu offers increasing

• Baking and cereal consumption embedded in culture

Weaknesses

• No KRAV certification• No Sweden managerial

knowledge

Threat

• Distribution and placement hurdles by competitive retailers vertical integration

Firm-specific Advantages• Stone-milled organic products• Small, nimble, family-run business

REFErENCES• “Consumer Lifestyles in Sweden.” January 2014 Global Market

Information Database. Euromonitor International. n. pag. Web. 10 February 2008.

• Dahlbacka, Bettina. U.S. Department of Agriculture. Swedish Organic Market. Washington: GPO, 2012. Web. 13 Feb. 2014

• “Sweden.” Passport to Trade – A Bridge to Success.” Web. 1 Dec. 2013• “Sweden.” The World Factbook. Central Intelligence Agency. Web. 26

Feb. 2014• “Sweden Boosts Foreign Investments with Low Taxes.” Newsletter Invest

in Stockholm. Stockholm – The Capital of Scandinavia. Web. May 2013• “Sweden Economic Freedom.” 2014 Index of Economic Freedom.

Heritage Foundation, 2014. Web. 10 Feb. 2014• “The Swedish Market.” Chamber Trade Sweden. Web. 15 Feb. 2014• “True or False: Sweden is the Most Americanized Country in the World.”

The Expat Blog – blogs.sweden.se. The Official Gateway to Sweden. Web. 6 Nov 2011.

• Wideback, Asa. U.S. Department of Agriculture. Food and Agricultural Import Regulations and Standards – Narrative – Sweden. Washington: GPO, 2012. Web. 13 Feb. 2014

References• "Sweden, The new model." The Economist. October 13, 2012.

Retrieved on February 10, 2014 from http://www.economist.com/node/21564412/print

• Aslund, Anders. "Blooming Sweden's Free-Market Solution." Bloomberg. June 6, 2012. Retrieved on February 10, 2014 from http://www.bloomberg.com/news/print/2012-06-06/booming-sweden-s-free-market-solution.html