don kremin hrl investor day 2015
TRANSCRIPT
Performance
• Leverage segment assets
• Splenda exit• CytoSport acquisition
3
In millions
*2015 sales number is estimated based on 5% organic growth plus expected addition of CytoSport
Drivers
2009 2010 2011 2012 2013 2014 2015est.*
Sales
Portfolio & Vision
Balanced Portfolio
Legacy PortfolioGrowth Platform
Retail Industrial Foodservice
Health and Nutrition Core54%* 46%*
Retail Industrial Foodservice*Projected 2015 segment profit percentage
Balanced Growth Strategies
Grow Muscle Milk Franchise
Grow Hormel Health Labs
Health and Nutrition Core
Realize Synergies between CytoSport and Century Foods
Expand value-added ingredients
Expand margins by offering branded solutions
Utilize capacity and innovate
ActiveRecovery
Health and Nutrition Consumer StrategyCore strategy based on linking protein to consumer need for various levels of activity
Protein
Least ActiveLifestyle
Recovering patient, aiming to get back to normal function
Active lifestyle, workout 2-3 times a week
Performance
Physical performance important aspect of life,
workout every day
Most ActiveLifestyle
Delivering Franchise Growth
• #1 brand for Dysphagia
• Expand domestic distribution
• Innovate
• Develop new trade channels
Global Multicultural Healthy / Holistic On-the-Go
• #1 brand ready-to-drink
• Relationship with Century Foods
Why CytoSport?BRAND
Global Multicultural Healthy / Holistic On-the-Go
9
Specialty
22% of sales
DSD
38% of sales
Channels of TradeBRAND
FDM* and Club
40% of sales
*Food, Drug, and Mass channels
• Weak state of Specialty & Club channel
• Lack of innovation
State of the Acquired Business
Opportunities
• Growing category• Distribution voids in FDM• Synergies with Century
Foods
BRAND
Challenges
2015 Focus
• Realize synergies between CytoSport and Century Foods
• Launch new items for all sales channels
• Complete rebranding in specialty channel
• Develop sales in FDM channel
BRAND
Plant Assets and Production
Competency
Sales, Marketing, Innovation, &
Financial Management
Value Creation
1. Improved asset and capacity utilization
2. Improved customer service
3. Synergy gains
CytoSport and Century Foods Synergies
Develop Sales in FDM and Club
Leveraged Hormel Foods
competency in FDM and Club to
drive incremental sales
Muscle Milk brand share the last 4 weeks is at 33%, with dollar sales up + 6%, and the category with growth of + 5%
Source: Nielsen Last 12/4Wks Ending 3/21/2015; US AOC+Convenience Total
Brand Share Total
Last 12WksLast
12Wks
RTD + Powder Total
Dollar ShareDollar Share
64%Single Serve
RTD Total
Take Home
Powder
+ 6%
Dollar % GrowthDollar % Growth
Last 12WksLast
12Wks
36%+ 14%
54%+ 8%
11%+ 18%
32%+ 9%
Last 4WksLast 4Wks
+ 3%
+ 13%
+ 5%
+ 14%
+ 6%
Last 4WksLast 4Wks
65%
35%
54%
11%
33%
Future Growth
Grow Muscle Milk Franchise
Grow Hormel Health Labs
Health and Nutrition Core
Realize Synergies between CytoSport and Century Foods
Expand value-added ingredients
Expand margins by offering branded solutions
Utilize capacity and innovate