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Tyson FoodsRevenue Management Capability
Curt BalaraVice President, Revenue Management
Tyson Foods is “walking the talk” on building leading edge capabilities
Our Revenue Management CoE is best-in-class among CPG’s
We will remain ahead of the pack in this critical space
Strengthen the Core
Extend Brands into Adjacencies
Fuel Growth through Efficiency
Build Industry-Leading Capabilities
Strategic Pricing Reinforce Brand Strategy Brand Role Price/Pack Architecture
Revenue Management: Pricing & Trade
Impacts Revenue Management
Our Model Delivers Sustainable, Profitable Growth
Trade Analytics Event ROI Annual JBP Execution
A Differentiated Capability Creating Value Through Insights-driven Execution
Tyson Foods Revenue Management
Customer Funding
Structure
Trade Analytics
Strategic Pricing
A fully integrated, holistic approach maximizing advanced analytics to bring winning ideas and shape our strategic direction:
3. Advanced Analytics
Structure, people, culture Data, tools, processes
Proactively bridge short-term and long-term Cross functional collaboration Pragmatic solutions
Product/brand level elasticities Price gap, key price thresholds and
cross elasticities Event ROI’s
• Price/ Channel / Pack• Regional pricing opportunities
Profit-based customer sell-in approach “Pay for Performance”Drive category growth
Measure outcomesDeep diveBest practice sharing
1. Organizational Commitment 2. Bias for Action
4. Price Architecture
6. Valuate/Elevate5. JBP Execution
Promotional event library to
evaluate efficiency &
effectiveness of trade
investment
Customized, one-stop-shop
within TPM system for predictive modeling
Post-EventAnalysis Tool
Trade PromotionOptimization
Real-Time Solutions to Enable an ROI Mindset
PEAT
TPO
Ad hoc Maunual Reactive Short term
focused
Inclusion of Science
Pricing Strategist
Perpetual Value Creation
Transactional
Tyson Foods Strategic Pricing Evolution
Elasticity by account / PPG Holistic financial
recos 4Ps guidance ROI Mindset /
Tools Support BU in
making trade-offs
Long-term pricing vision with “science and art” Pricing and
discount architecture and by PPG Inform
innovation pricing Cross-channel
impact(s) Customer GTM
Corporate pricing / discounting philosophy Innovation and
acquisitions as per corporate strategy Continuous,
improved capabilities
Fall SummitNovember 4-6Dallas, Texas
We continue to fulfill our industry-leading role…
Tyson Foods is “walking the talk” on building leading edge capabilities
Our Revenue Management CoE is best-in-class among CPG’s
We will remain ahead of the pack in this critical space
Smart Data Capability
David ErvinVice President, Marketing Services
SmartData
Big Data
“If you dislike change, you’re going to dislike irrelevance even more.”
—Erik Shinseki
A cautionary tale…
Right message. Right person.Right time.
What we promised:
But we didn’t deliver on our promise.
We ignored the basics.
And ultimately…We forgot that we were talking to other people.
Data enables us to learn faster than ever before.
Standardization is critical to smart data.
•First Party•Third Party•Personal Data
Shift from demographics to Demographics + Behavior
Advertisers are prioritizing efficiency and effectiveness.
Ultimately about driving efficiency and an effective message.
IRI ProScores Output
Smart Data drives identification of target consumers
eliminating inefficient media and increasing impact.
$175 $32
Analysis performed across geographies and retailers.
IRI ProScores serves as the score for audience targeting in CPG
Analysis provides tailored recommendations for each brand.
The only thing that matters is sales.
Experiment relentlessly.Fail early and forward.
Use data.But apply common sense.And use multiple sources.
“The illiterate of the 21st century will not be those that cannot read or write, but those who cannot learn, unlearn and relearn.”
—Alvin Toffler
Shopper and Category Development
Christopher Witte, Vice President, Category Development
Shopper and Category Development
• Designs and Constructs Shopper Research
• Creates Total Store Protein, Department and Category Leadership Platforms to Enable Retailer Strategies
• Develops Channel Insights to Fuel Segmentation Growth
• Help Customers Write Category Business Plans, Develop Strategies for Category Objectives (JBP)
• Identifies Retailer Specific Shopper Insights And Opportunities
• Closest To The Customer: 78 Captaincies (+13 vs YAGO)
Shopper Marketing & Activation
• Overall design and execution of customized, retailer-specific shopper marketing programs
• Apply shopper insights to all customer programs
• Humans as Media: Point of Purchase Communication of Brand and Product Story
Category Leadership
Shopper Insights
Total Store Platforms
DepartmentPlatforms
CategoryPlatforms
FRESH CHICKEN
DELI
FRESH BEEF
FRESH PORK
BREAKFAST MEAT
LUNCHMEAT
DINNER SAUSAGE
HOT DOGS
SNACKS, APPETIZERS & HANDHELDS
FROZEN CHICKEN
FROZEN PROTEIN BREAKFAST
FROZEN SINGLE SERVE ENTREES
Insights Are Assembled Into Shopper Centric Leadership Platforms
Focus on Protein meal occasions, particularly BFY Snacking & Breakfast
New Protein Research when, how much, type of protein for maximum benefits
Basket Building opportunities leveraging protein across the store
Activation strategies and tactics Shopper Marketing playbook, dieticians
Protein Leadership Platform
Determine optimal adjacencies and shelving principles for the refrigerated perimeter, fresh and frozen aisle in the grocery store Focus on principles that can be applied
broadly, recognizing that there will be variations by store format Category Sizing Tool that can adjust
appropriate size and calculate adjacency impact Partner with our customers to develop
specific department strategies and tactics
4.5
1.03.5
Right Sizing TTL OppOptimal Adj
+4.5
Department Lift Opportunity
Department Leadership Platforms
Category Leadership Platforms
Renovation of Category Platforms around Key Meal Occasions
Impact of Merchandising on Category Conversion and Cross Purchase
Enhanced Promotional Insight to Include Optimized Price Gaps, Thresholds, Frequency and Co-Purchase
New All Automated Presentation
DELI
FRESH BEEF
BREAKFAST MEAT
LUNCHMEAT
DINNER SAUSAGE
HOT DOGS
SNACKS, APPETIZERS & HANDHELDS
FROZEN CHICKEN
FROZEN PROTEIN BREAKFAST
FROZEN SINGLE SERVE ENTREES
Refrig. Meat Frozen
Fresh
FRESH CHICKEN
FRESH PORK
78 Total Captaincies
Tyson FY14 Totals = 44 Hillshire Legacy + 21 Tyson Legacy ; Combined in FY15o Sam’s +10 : Lunchmeat, Ham, Bacon, Expanded Fresh, Gallo, Uncooked Chicken, Frozen Patties, Froz Snacks/Apps, Bfst Sausage/Waffleso Grocery +2 : Frozen Protein Breakfast at Giant Eagle, Lunchmeat at Publix
Tyson FY13 Totals = 23 Hillshire Legacy + 20 Tyson LegacySource:: Captaincy Tracking; Advantage Survey 2014 (Hillshire Legacy Rank)
654335
78
FY12
35
+13
Series
FY14FY13
65
43
FY15
78
Investment in People & Capabilities are Delivering Results
Added 13 Category Captaincies vs. YAGO
Distribution Drive
Tyson TPD Growth Rate(Fiscal 2015 vs YAGO)
Source : Latest IRI FYTD April 26, 2015Tyson Includes Legacy Tyson, Hillshire, Vans and GFG Categories : Processed Poultry -Fz/Rfg, Breakfast Meats, Poultry - Fz/Rfg, Breakfast Food – Fz, Meat – Rfg, Luncheon Meats, Dinner Sausage, Frankfurters, Dinners/Entrees – Fz, Meat – Ss, Meat – Fz, Entrees – Rfg, Desserts/Toppings – Fz, Pies – Fz, Appetizers/Snack Rolls - Fz
Sharper Analytics on TPDs Tied To Shopper Behavior
Aligned Organization Objectives Against TPDs
Added To Customer Scorecards
3.5%
0.1%
Tyson
3.5X
Comp
Tyson is growing 3.5×faster than competition.
EvolvedShopper Marketing : The Purchase Journey Has Evolved
Today:
Yesterday:
Total Purchase Journey Execution is Critical
Pre-Shop Executions In-Store Executions
SAMPLING PROGRAMS – COUNTER CARDS AND TAKE HOME BROCHURES
SHELF TALKER WITH COUPON TEAR PAD
FREEZER CLINGS
INSTANTLY REDEEMABLE COUPONS
EXPANDABLE WEB BANNER ON RETAILER’S WEBSITE
CIRCULAR ADS WITH OUR WITHOUT MANUFACTURER COUPON
RETAILER-SPECIFIC SOCIAL MEDIA POSTS
Circulation: 30 Million Circulation on March 15 2 full page centerfold ‘perfect spread’
promoting all day parts across the portfolio Integrated with JD National FSI and
called out in the execution
Platform Development: The Power of One
In-Store Experiential Marketing - Shopper Activation
Supercharged by Innovation and Information
Innovation at Tyson 2.0
Jennifer BentzSenior Vice President, Innovation and Insights
Innovation Overview
Today we’ll talk about how Tyson Foods will deliver top-tier performance in the food industry through innovation leadership.When it comes to Innovation, at Tyson Foods we are:
Where We Play
How We Win
We have a clear innovation strategy
Extend Into AdjacenciesStrengthen The Core
❶ Deep Insights ❷ Exceptional Execution
Tyson Innovation Imperative
Differentiated Capabilities
A Track Record of Results
A Game Plan for Future Growth
Changing consumer and market dynamics require a commitment to growth.
Differentiated Capabilities
Source: Tyson Trends Council / Hartman
New Family Portrait
Feeding a Changing World Real Simple
Evolution of Value Feeding Individual Needs
Always Connected
Our Trends Council tracks industry changes…
RESULTING INNOVATION:
QUESTION:
What motivates Millennials – our next generation of shoppers?
Asian-inspired flavors
…and our innovators apply them.
ANSWER:
A focus on emotional draw, transparency, and global flavor experiences.
We have segmented Tyson Foods’s consumers from “Live to Eat” to “Eat to Live.”
Food Aficionados Struggling DisciplinedCarefree
LIVE TO EAT EAT TO LIVE
…and used that consumer understanding, paired with market understanding to build the Tyson Demand Map.
Proprietary to Tyson Foods
Sizes the intersections between who is buying, why they are buying it, and what they are buying.
Used to prioritize the biggest innovation spaces
Strong opportunity based on strong need and/or value
Limited opportunity based on moderate need and/or valueNo opportunity based on minimal need and/or value
We’ve created a customized process for rigorous management of the innovation pipeline.
Tyson Foods Control Towers Prioritization Teams
…and our integrated systems support gives us a competitive advantage.
New Product Database Advantages
One master project list
Electronic workflows to all TEAM Members
Each project uses a standard timeline and set of activities
Link to Financial Reporting, Spec System, SAP for plants
Centralized project P&Ls
…which enables us to do best-in-class modeling.
Organizational Capacity Modeling
*For illustration purposes only.
Timeline Compression
Modeling
Innovation Revenue
Projections*
Our talent has a unique mix of experiences and capabilities, leading to more innovative thinking.
Retail Experience from a mix of Top Tier CPG Companies
Extensive Leading Food Service Experience
Operations Expertise in Protein
Tyson 2.0:A TEAM of Innovation
Experts
Tyson Innovation Imperative
Differentiated Capabilities
A Track Record of Results
A Game Plan for Future Growth
A Track Record of Results:
In the last 12 months we have delivered a strong line-up of Retail Innovation.
Park’s Finest Hot Dogs -Biggest category platform launch in 4 years!
Largest hot dog category platform launch On track to become
an IRI Pacesetter Highly incremental to both
the Ball Park brand (83%) and the Category (25%)
Expanding to two new varieties:
Hillshire Farm Expansion to both Value and Premium Lunchmeat segments!
Both platforms are over 30% incremental to Hillshire Farm lunchmeat!
Jimmy Dean Frozen Dinner –User Base Expansion!
31% purchasers are new to the Jimmy DeanFrozen business, expanding our user base Learned lessons on
# SKUs launched (16) and have immediately applied to upcoming launches
Tyson Innovation Imperative
Differentiated Capabilities
A Track Record of Results
A Game Plan for Future Growth
A Game Plan for Future Growth
We have the tools in place for a successful innovation pipeline…
Our future innovation platforms are focused in the right spaces for growth…
of our 2016-2018 Innovation Platforms against our Highest Margin focused Brands with Strong Market Potential
Refrigerated Sales growing 2X rate of total Food and Beverageˆ
ˆSource: IRI Total US MULO L52W ending 4/19/15
92% of our Frozen Categories
99% of our Refrigerated Categories
Right Part of the Store Right Categories Right Brands
% of Categories we compete in showing YOY growthˆ:
Tyson Innovation Imperative
Differentiated Capabilities
A Track Record of Results
A Game Plan for Future Growth
At Tyson 2.0, we’re…
on Innovation!
