The United KingdomThe United Kingdom

Country Market Analysis:Country Market Analysis:Smucker’s UncrustablesSmucker’s Uncrustables

Lauren Colvin

Brandon Kraft

CJ Strah

Kate Turkcan

The United KingdomThe United Kingdom

Great Britain (England, Scotland, Wales)

Northern Ireland

Channel Islands

Isle of Man

DemographicsDemographics

PopulationPopulation 60,095,000 people60,095,000 people

Age DistributionAge Distribution 0-9: 11.7%0-9: 11.7%

10-19: 12.9%10-19: 12.9% 20-29: 12.6%20-29: 12.6% 30-39: 15.3%30-39: 15.3% 40-49: 14.2%40-49: 14.2% 50+: 33.3%50+: 33.3%

GNP: $1,290,000,000GNP: $1,290,000,000

5% unemployment 5% unemployment raterate

Most families in urban Most families in urban areas live in areas live in apartments, but living apartments, but living in larger homes in the in larger homes in the suburbs is becoming suburbs is becoming more popular.more popular.

DemographicsDemographics

SexSex Men: 49.4%Men: 49.4%

Average Age: 37.6 yrs. Average Age: 37.6 yrs. Women: 50.6% Women: 50.6%

Average Age: 39.8 yrs. Average Age: 39.8 yrs.

LanguageLanguage English (official)English (official)

Various accentsVarious accents WelshWelsh Scottish form of GaelicScottish form of Gaelic

GeographyGeography 90% of the population 90% of the population

lives in urban areas.lives in urban areas. England: 82.9%England: 82.9% Scotland: 8.4%Scotland: 8.4% N. Ireland: 2.8%N. Ireland: 2.8% Wales:Wales:

4.9%4.9%

CompetitionCompetition

Supermarket private labels dominate the frozen Supermarket private labels dominate the frozen food market in the UK.food market in the UK.The frozen food industry is growing due to The frozen food industry is growing due to people spending an increasing amount of time people spending an increasing amount of time outside the home.outside the home.

Direct Competition in the UKDirect Competition in the UK

Unilever BestfoodsUnilever Bestfoods Bird’s Eye Hamburgers: largest single frozen food brand sold in UK Bird’s Eye Hamburgers: largest single frozen food brand sold in UK

supermarketssupermarketsKraft Foods, IncKraft Foods, Inc

LunchablesLunchables Instant Cheesy PastaInstant Cheesy Pasta

NestlNestlé Groupé Group Cereals: shredded wheat, Cheerios, Golden Grahams, Cinnamon GrahamsCereals: shredded wheat, Cheerios, Golden Grahams, Cinnamon Grahams Herta Salami Sticks/FrankfurtersHerta Salami Sticks/Frankfurters SoupsSoups

Walkers Snack Foods, LtdWalkers Snack Foods, Ltd Potato chipsPotato chips

Consumer DemandConsumer Demand

As the market for frozen foods in the UK continues to As the market for frozen foods in the UK continues to grow, people generally look for and try products that are grow, people generally look for and try products that are on sale.on sale.The UK is one of Europe’s highest per capita frozen food The UK is one of Europe’s highest per capita frozen food consumers.consumers.

The average Briton spends $ 144 (The average Briton spends $ 144 (£75) annually on frozen food £75) annually on frozen food products.products.

More than 90% of people in the UK own a freezer.More than 90% of people in the UK own a freezer. Due to small freezer sizes, most consumers go shopping more Due to small freezer sizes, most consumers go shopping more

often in order to buy a lesser amount of smaller products to fit in often in order to buy a lesser amount of smaller products to fit in their appliances.their appliances.

Almost 50% own a microwave.Almost 50% own a microwave.

Consumer DemandConsumer Demand

Frozen foods are most frequently consumed by people Frozen foods are most frequently consumed by people ages 20-29.ages 20-29.Peanut butter is not a popular food item in the UK.Peanut butter is not a popular food item in the UK.87% of children’s lunches include a sandwich made from 87% of children’s lunches include a sandwich made from white bread and chicken, cheese, ham or a meat paste.white bread and chicken, cheese, ham or a meat paste.

Most also include chips (71%), cookies (60%) and a dairy Most also include chips (71%), cookies (60%) and a dairy product (48%).product (48%).

Less than 50% contain fruit.Less than 50% contain fruit.

Meals served at school must contain at least one serving Meals served at school must contain at least one serving of a fruit or vegetable, a milk or dairy product, meat/fish of a fruit or vegetable, a milk or dairy product, meat/fish or a protein source and a starch.or a protein source and a starch.

Less than 50% of children purchase their lunch at school.Less than 50% of children purchase their lunch at school.

DistributionDistribution

Uncrustables are Uncrustables are produced in produced in Scottsville, Kentucky. Scottsville, Kentucky.

The J.M. Smucker The J.M. Smucker Co. produces all of its Co. produces all of its products itself.products itself.

DistributionDistribution

Smucker’s products currently in The UKSmucker’s products currently in The UK Simply Nutritious (fruit juice)Simply Nutritious (fruit juice) Santa Cruz (organic soft drink)Santa Cruz (organic soft drink)

Both produced in the Livingston, Scotland plant.Both produced in the Livingston, Scotland plant.

Smucker’s owns a plant in Livingston, Scotland.Smucker’s owns a plant in Livingston, Scotland. Also produces fruit filling for Kellogg Nurtigrain Bars Also produces fruit filling for Kellogg Nurtigrain Bars

for distribution in the UK.for distribution in the UK.

DistributionDistribution

The UK does not require approval for foreign The UK does not require approval for foreign investment.investment. Businesses have to register at the Registrar of Businesses have to register at the Registrar of

Companies.Companies. There is a fee of $38 (There is a fee of $38 (£20) in order to obtain the £20) in order to obtain the

required certificate of incorporation, which takes a few required certificate of incorporation, which takes a few weeks.weeks.

There are no formal local content requirements There are no formal local content requirements in the UK.in the UK.

DistributionDistribution

Most regulations on foreign companies in the UK Most regulations on foreign companies in the UK come from Brussels, not London.come from Brussels, not London. These generally involve anti-trust laws and practices These generally involve anti-trust laws and practices

that interfere with intra-EU trade.that interfere with intra-EU trade.

Companies in the UK are taxed at 30% of their Companies in the UK are taxed at 30% of their corporate profits. corporate profits. They are also taxed at 22% for holding UK real They are also taxed at 22% for holding UK real estate as an investment.estate as an investment.In regards to tariffs on imports, most foods have In regards to tariffs on imports, most foods have a zero rating. a zero rating.

DistributionDistribution

TransportationTransportation The quality of land transportation, in certain areas, is not up to The quality of land transportation, in certain areas, is not up to

most developed countries’ standards.most developed countries’ standards.Current Labor government has a 10 year, Current Labor government has a 10 year, £180 billion ($270 billion) £180 billion ($270 billion) plan to improve conditions.plan to improve conditions.230,914 miles of paved highways.230,914 miles of paved highways.2,052 miles of express motorways.2,052 miles of express motorways.

10,488 miles of railway.10,488 miles of railway. 1,988 miles of navigable inland waterways.1,988 miles of navigable inland waterways. 300 ports300 ports

The port of London is one of the largest in the worldThe port of London is one of the largest in the worldOther major ports: Liverpool, Southampton, Hull, Clydeport, Other major ports: Liverpool, Southampton, Hull, Clydeport, Manchester, BristolManchester, Bristol

Folkestone, England and Calais, France are linked through the Folkestone, England and Calais, France are linked through the high-speed rail tunnels under the English Channel.high-speed rail tunnels under the English Channel.

Targeting and PositioningTargeting and Positioning

In the US, Smucker’s targets parents.In the US, Smucker’s targets parents. Especially focus on mothers who are too busy in the Especially focus on mothers who are too busy in the

morning to prepare school lunches, but want their morning to prepare school lunches, but want their child to have a nutritious lunch.child to have a nutritious lunch.

They also target parents on a budget.They also target parents on a budget.Uncrustables cost less than $0.65 per sandwich, compared Uncrustables cost less than $0.65 per sandwich, compared to Lunchables, their main competition in the US, which cost to Lunchables, their main competition in the US, which cost $3.00 each.$3.00 each.

Smucker’s also targets school lunch programs Smucker’s also targets school lunch programs that buy packaged food to serve to students.that buy packaged food to serve to students.

Targeting and PositioningTargeting and Positioning

Smucker’s has a policy of being a family-friendly Smucker’s has a policy of being a family-friendly company and consequently does not target company and consequently does not target children.children. They do not occupy television spots during children’s They do not occupy television spots during children’s

shows or shows deemed inappropriate for children.shows or shows deemed inappropriate for children. They generally advertise during shows watched by They generally advertise during shows watched by

parents or by parents and children together, but the parents or by parents and children together, but the ads are clearly directed towards parents.ads are clearly directed towards parents.

ProductProduct

SizeSize Come in boxes of 4,10, or 18 in retail stores.Come in boxes of 4,10, or 18 in retail stores.

Average UK freezer size: 1825mm x 590mmAverage UK freezer size: 1825mm x 590mm Sold in cases of 72 for schoolsSold in cases of 72 for schools

ProductProduct

BrandBrand 2004 J.M. Smucker Co. Total Sales: $1,417,000,0002004 J.M. Smucker Co. Total Sales: $1,417,000,000

$138,800,000 in international markets (10% of total)$138,800,000 in international markets (10% of total) Uncrustables accounted for 4% of Smucker’s total US sales: Uncrustables accounted for 4% of Smucker’s total US sales:

$51,128,000$51,128,000Total units sold in 2004: 19,740,540Total units sold in 2004: 19,740,540

There is currently no brand equity in the UK for Smucker’s or There is currently no brand equity in the UK for Smucker’s or Uncrustables.Uncrustables.

Flavor and Product DesignFlavor and Product Design Two round pieces of white bread without crust filled with an inner Two round pieces of white bread without crust filled with an inner

layer of strawberry or grape jelly surrounded by peanut butter.layer of strawberry or grape jelly surrounded by peanut butter. Two round pieces of white bread without crust filled with Two round pieces of white bread without crust filled with

American cheese.American cheese. Both are sealed around the edges, creating ridges and ensuring Both are sealed around the edges, creating ridges and ensuring

that the inner ingredients will not leak out. that the inner ingredients will not leak out.

ProductProduct

Labeling Regulations Labeling Regulations Packages cannot include pictures of food if Packages cannot include pictures of food if

that flavor is created using artificial flavoring.that flavor is created using artificial flavoring. Packages cannot be misleading with phrases Packages cannot be misleading with phrases

such as “reduced”, “low” and “high.”such as “reduced”, “low” and “high.” Official language is English and the UK uses Official language is English and the UK uses

metric units of measurement.metric units of measurement.

ProductProduct

Labeling Regulations (cont.)Labeling Regulations (cont.) Food Label Regulation 1996 – EU lawFood Label Regulation 1996 – EU law

Name of productName of productIngredient listIngredient listDurability indicated by “use by” or “best before”Durability indicated by “use by” or “best before”Storage instructionsStorage instructionsName and address of producerName and address of producerPlace of originPlace of originCooking and/or defrosting instructionsCooking and/or defrosting instructionsNutrition informationNutrition informationAn indication of any additives such as color, flavor An indication of any additives such as color, flavor enhancers, preservatives and sweetenersenhancers, preservatives and sweeteners

PricePrice

Retail PriceRetail Price The currency of The UK is the Pound (The currency of The UK is the Pound (£)£) Although The UK is in the EU, it does not use Although The UK is in the EU, it does not use

the Euro.the Euro. Uncrustables sell for $2.39-$2.59 a box at Uncrustables sell for $2.39-$2.59 a box at

retail outlets in the US.retail outlets in the US.

PlacementPlacement

Storage and DistributionStorage and Distribution 91% of frozen foods bought in The UK are purchased 91% of frozen foods bought in The UK are purchased

at supermarkets and hypermarkets.at supermarkets and hypermarkets.

73% of households have one or more car, which 73% of households have one or more car, which enables consumers to drive to retail outlets.enables consumers to drive to retail outlets. Car ownership has decreased in London due to a Car ownership has decreased in London due to a

congestion charge aimed at reducing traffic, and congestion charge aimed at reducing traffic, and officials are looking to extend the charge to other officials are looking to extend the charge to other cities.cities.

PromotionPromotion

Media AvailabilityMedia Availability TelevisionTelevision

94% of the population has at least one television.94% of the population has at least one television.No advertising on the BBCNo advertising on the BBCThe Independent Television Commission has strict The Independent Television Commission has strict rules about ads aimed at children and using child rules about ads aimed at children and using child actors/ models.actors/ models.A commercial featuring an actor may not be shown A commercial featuring an actor may not be shown during a program in which the actor appears. during a program in which the actor appears. The Broadcast Advertising Clearance Centre The Broadcast Advertising Clearance Centre examines scripts and videotapes at no charge, examines scripts and videotapes at no charge, before shown on TV, to ensure they meet the before shown on TV, to ensure they meet the requirements of the ITC codes. requirements of the ITC codes.

PromotionPromotion

Media Availability (cont.)Media Availability (cont.) Mobile text messagingMobile text messaging

52,638,000 cell phone users52,638,000 cell phone users RadioRadio

91% of UK population, ages 15+, listens to the radio on a 91% of UK population, ages 15+, listens to the radio on a weekly basis.weekly basis.Radio scripts are checked before they are aired by the Radio Radio scripts are checked before they are aired by the Radio Advertising Clearance Centre. Advertising Clearance Centre.

Direct MarketingDirect Marketing68% of direct mail is opened, while 43% is actually read.68% of direct mail is opened, while 43% is actually read.Over 40% of consumers acknowledge that their buying Over 40% of consumers acknowledge that their buying decisions are affected by direct mailings.decisions are affected by direct mailings.

PromotionPromotion

Media Availability (cont.)Media Availability (cont.) InternetInternet

30 million internet users.30 million internet users. PrintPrint

41 million regional newspapers are paid for every day.41 million regional newspapers are paid for every day.

29 million free newspapers are delivered each week.29 million free newspapers are delivered each week.

14,394,000 magazines are sold each year.14,394,000 magazines are sold each year.

Advertising can cost between $ 960 - $9,600 (Advertising can cost between $ 960 - $9,600 (££ 500 - 500 - ££ 5000)5000) depending on size. depending on size.

PromotionPromotion

Media Availability (cont.)Media Availability (cont.) Billboards/Outdoor advertisingBillboards/Outdoor advertising Ambient MediaAmbient Media

Metro terminals/ TrainsMetro terminals/ Trains 6.4% of total passenger-km 6.4% of total passenger-km

traveled on public traveled on public transportation in the UK is transportation in the UK is by train.by train.

The Tube is very popular in The Tube is very popular in London.London.

Buses and TaxisBuses and Taxis 6.3% of total passenger-km 6.3% of total passenger-km

traveled on public traveled on public transportation in the UK is transportation in the UK is by bus and 85% is by taxi.by bus and 85% is by taxi.

Bus use is decreasing in Bus use is decreasing in suburban areas but has suburban areas but has increased in London due to increased in London due to subsidies and congestion subsidies and congestion charges on personal charges on personal automobiles.automobiles.

Annual Advertising Expenditures Distribution ($ millions)

$9,380

$8,393

$1,504

$4,665

$1,729$1,116 $721 $345

Newspapers

TV

Magazines

Direct Mail

Outdoor/Transport

Radio

Internet

Cinema

Promotion CostsPromotion Costs

Daily MailDaily Mail (full page, (full page, color): $87,550color): $87,550Daily TelegraphDaily Telegraph (full (full page, color): $110,840page, color): $110,840Yorkshire PostYorkshire Post (full page, (full page, black and white): $15,776black and white): $15,776Carlton TV (30 second Carlton TV (30 second spot, 7:26 pm -11:30 pm): spot, 7:26 pm -11:30 pm): $58,539$58,539Odeon Leicester Square, Odeon Leicester Square, London (movie theater) London (movie theater) (30 second spot each day (30 second spot each day for a week): $2,226for a week): $2,226

BRMB (Birmingham BRMB (Birmingham Radio) (30 second spot, Radio) (30 second spot, Wed. – Fri. 4:00pm – Wed. – Fri. 4:00pm – 7:00pm): $3837:00pm): $383 Virgin FM (London) (30 Virgin FM (London) (30 second spot, Thursday second spot, Thursday 4:00pm – 7:00pm): 4:00pm – 7:00pm): $2,111$2,111Virgin Radio Virgin Radio (AM/National) (30 second (AM/National) (30 second spot, Thursday 4:00pm – spot, Thursday 4:00pm – 7:00pm): $1,6317:00pm): $1,631

ConclusionConclusion

40% of all US investments in EU member 40% of all US investments in EU member nations are in the United Kingdom.nations are in the United Kingdom.There is no language barrier and also many There is no language barrier and also many cultural similarities that would make it easy for cultural similarities that would make it easy for Smucker’s to assimilate Uncrustables into the Smucker’s to assimilate Uncrustables into the UK.UK.The existence of the Smucker’s plant in Scotland The existence of the Smucker’s plant in Scotland would provide a solution to production concerns.would provide a solution to production concerns.Peanut butter is not very common or popular Peanut butter is not very common or popular anywhere in the UK and as a result it may be anywhere in the UK and as a result it may be difficult to convince consumers to try this difficult to convince consumers to try this American classic.American classic.