insight to action - food processing...csw/d/cw/rab foods/insight to action - 110806 12 what were the...

Insight to Insight to ActionActionAccelerating ProfitableAccelerating ProfitableKosher Aisle GrowthKosher Aisle Growth

Presented by Paul Crnkovich

csw/d/cw/RAB Foods/Insight to Action - 110806 2

AgendaAgenda

Cannondale Overview

Research Overview

Key Learnings and Implications


Cannondale…Cannondale…

Who are these guys?Who are these guys?


Primary Consumer/ Primary Consumer/ Customer InsightsCustomer Insights

Business Solutions Business Solutions ConsultingConsulting

Executional Executional ApplicationsApplications

Cannondale Associates – Core BusinessCannondale Associates – Core Business

Trade Promotion Strategy

Consumer Marketing at Retail

Organization Capacity

Channel Development

PriceRite®

RichMix®

Ginsu ABC

ShopperGenetics®

Quantitative Research

Benchmarking

ConsumerCeptsSM

Proprietary Surveys

Controlled Store Tests


We conduct 5 Broad Industry Issue studies each yearWe conduct 5 Broad Industry Issue studies each year

FoodServicElite®

Category ManagementPoweRanking®

Trade Promotion

Shopper Study

Research addresses Retailer – Consumer – Manufacturer issuesResearch addresses Retailer – Consumer – Manufacturer issues

What did we do?What did we do?


To better understand who the Kosher consumer is and how they shop so we can better market to them

To understand the role of Kosher within the broader “specialty foods” arena so we can better meet retailer needs

11

22

We conducted primary research against two We conducted primary research against two objectivesobjectives


Learning IntegrationLearning Integration

ShopperGeneticsShopperGenetics®® AnalysisAnalysis Industry InterviewsIndustry InterviewsOnline Consumer Online Consumer

ResearchResearch

HypothesesHypotheses

Three Part Research ApproachThree Part Research Approach


ShopperGeneticsShopperGenetics®® Analysis Analysis

Shopper Card Transaction Data from 14+ Food and Drug RetailersData SourceData Source

ScopeScope 10 MM Household 5+ years of data

All transactions All products (UPC level) Includes perimeter

– Meat, deli, produce, ISB, pharmacy By store, by lane

+2 million +2 million traditional traditional

Kosher Kosher transactionstransactionsDepth/Depth/

GranularityGranularity


Shopping Insights– Why shoppers are shopping and what drives them

Kosher Perception– Consumer perception of what Kosher is and where it is shelved

Kosher Shopping Behavior– What factors influence consumer decision, trip-drivers, frequency

Online Consumer ResearchOnline Consumer Research

500 respondents– Jewish and non-Jewish Kosher purchasers– National representation

ParametersParameters

ContentContent

September 2006FieldedFielded


Research focused on traditional Kosher productsResearch focused on traditional Kosher products

Source: Cannondale Associates ShopperGenetics®, 52 weeks ending 8/06

Items primarily found in “Kosher” sections throughout the storeKosher Kosher ProductsProducts

“Kosher buyers” are defined as consumers that have purchased one or more of these items in the past year

Kosher BuyersKosher Buyers


What were the perceptions?What were the perceptions?

The Kosher consumer is old fashioned, old and getting older

Multiple brands of limited products is “variety”

Need to aggressively discount key items during the holidays to drive traffic

Overall belief that the Kosher section is important and valuable, but there is uncertainty around how to accelerate profitable growth

What Did We Learn?What Did We Learn?


Key learningsKey learnings

There are many faces of the Kosher consumer – not one

They want broader selection of categories – not multiple brands

They purchase an entire “solution” of products during holidays – not just core items

……we confirmed just how valuable these we confirmed just how valuable these consumers areconsumers are


$1,873

$2,748

Average Buyer Kosher Buyer

Traditional Kosher buyers are highly valuable shoppers Traditional Kosher buyers are highly valuable shoppers throughout the yearthroughout the year

Kosher buyers tend to be the retailer’s most valuable customersKosher buyers tend to be the retailer’s most valuable customers

Annual Buyer WorthAnnual Buyer Worth Average Basket RingAverage Basket Ring

+47%


$44.45

$70.18 $73.23

Average Buyer Kosher Basket(Holiday)

Kosher Basket(Non-Holiday)


We can tap into We can tap into existingexisting consumer behavior to consumer behavior to

accelerate growthaccelerate growth

Source: ACNielsen All Outlet Data 2006


Growth is driven by increasing the number of Growth is driven by increasing the number of categories purchasedcategories purchased

Kosher Shelf Stable Annual Spending/ConsumerKosher Shelf Stable Annual Spending/Consumer

# of Kosher # of Kosher Categories Categories PurchasedPurchased

90% of consumers

Source: Cannondale Associates ShopperGenetics® Frequent Shopper Analysis 2006

$7.30$28.17

$38.73 $45.74 $62.46 $70.29 $85.92

$185.47

< 3 4 5 6 7 8 9 10+


How do we How do we accelerateaccelerate breadth of Kosher breadth of Kosher category involvement?category involvement?



Begin by thinking Begin by thinking differentlydifferently about how to about how to

grow the businessgrow the business


An “Insight To Action” approachAn “Insight To Action” approach

➾Utilize consumer/shopper insight

➾Analyze POS, syndicated and frequent shopper data

➾Synthesize learning to develop specific plans to capitalize on insight


Let’s begin with Let’s begin with the consumer the consumer



Kosher consumer has many faces Kosher consumer has many faces


Consumer research identified five “Kosher” Consumer research identified five “Kosher” segmentssegments

Jewish

Keeps Kosher either in their home or all the time

Religion is very important in their food purchases

TraditionalTraditional1 Purchase DriversPurchase Drivers

Traditional users are the youngest segment – 70% are ages 18-35



ModernModern2 Purchase DriversPurchase Drivers

Jewish

Uses Kosher and non-Kosher products

Purchases Kosher products year round; more than just holidays

Changing taste preferences



HolidayHoliday3 Purchase DriversPurchase Drivers

Jewish

Holidays are primary driver of Kosher purchases



Cleaner/Purer/BetterCleaner/Purer/Better4 Purchase DriversPurchase Drivers

Non-Jewish

Feels Kosher products are ‘better for you’

Link to Natural/Organic products

Emerging and growing segment

“Kosher products are better for you. They’re purer and have superior ingredients”



Need BasedNeed Based5 Purchase DriversPurchase Drivers

Non-Jewish primarily

Kosher purchases driven by:– Lactose free– Gluten free– Vegetarian

“I trust Kosher for my dietary needs”


The Traditional Consumer is the most frequent purchaser, The Traditional Consumer is the most frequent purchaser, but all segments purchase at least once every three monthsbut all segments purchase at least once every three months

How Often did You Purchase Kosher Products Last Year?How Often did You Purchase Kosher Products Last Year?

Source: Cannondale Associates Online Study 09/06Q7a) How often would you say you purchased Kosher products in the past year?


While differences exist across segments…

…there are some important similarities


60.0%

45.8%

I plan on buying beforecoming to the store

I look around to see ifthere are new brands or

products

I decide the specificbrand once I am in the

store

I always buy the samebrand

I look outside the Koshersection

Trad'l Modern Holiday Cleaner/Purer/Better Need Based

Majority of consumers decide what to buy in-storeMajority of consumers decide what to buy in-store

Describe Your Behavior When Shopping for Kosher:Describe Your Behavior When Shopping for Kosher:

Source: Cannondale Associates Online Study 09/06Q27) When shopping for Kosher, which statement best describes your shopping behavior?

In-Store In-Store DecisionsDecisions


84.2%

57.8% 54.7% 57.8%

On the shelf/display Friends Family Magazine Religious group TV commercial

Trad'l Modern Jewish Holiday Natural/Organic Need Based

The Kosher section is where most consumers The Kosher section is where most consumers discover new productsdiscover new products

Where do You Find out About New Kosher Products?Where do You Find out About New Kosher Products?

Source: Cannondale Associates Online Study 09/06Q17) Where do you find out about new Kosher products?.

You must capture their attention in-store!You must capture their attention in-store!


95.3%83.3% 80.4%

Lowered Price Offered a wider selection Organized the sectionbetter

Better signage More exciting packaging

Trad'l Modern Holiday Cleaner/Purer/Better Need Based

They all want greater variety of itemsThey all want greater variety of items

Please rate whether each change would make you more likely to buy Kosher productsPlease rate whether each change would make you more likely to buy Kosher products(% Top 2 Box)(% Top 2 Box)

Source: Cannondale Associates Online Study 09/06Q26) Please rate whether each change would make you more likely to shop for Kosher products. (Top 2 Box)

Said another way…Said another way…


The key is to maximize variety while minimizing The key is to maximize variety while minimizing duplicationduplication

Item variety creates greater demand and minimizes duplication, Item variety creates greater demand and minimizes duplication, creating space for new itemscreating space for new items

Varietyvs.

Duplication


Gefilte Fish provides a good Gefilte Fish provides a good example of how to example of how to minimize duplicationminimize duplication


100

158

7% < 7%

Less Gefilte Fish brand assortment generates greater Less Gefilte Fish brand assortment generates greater Kosher sales velocityKosher sales velocity

Kosher Shelf Stable Annual Sales Velocity Index*Kosher Shelf Stable Annual Sales Velocity Index*

Provide greater variety of Kosher categories for the consumerProvide greater variety of Kosher categories for the consumer

≤ 2≥ 3

* Stores with at least a 4ft. shelf setSource: Cannondale Associates ShopperGenetics® Frequent Shopper Database 08/08

Gefilte FishGefilte Fish Item Share

Avg # Brands

≥

Fewer Fewer brands equals brands equals

more salesmore sales


We analyzed the impact of deep We analyzed the impact of deep discounting core Kosher items on discounting core Kosher items on

holiday store purchase tripsholiday store purchase trips


Stores that “deep” discount Stores that “deep” discount do notdo not increase holiday increase holiday traffic more than stores that “shallow” discounttraffic more than stores that “shallow” discount

Weekly Shopper Penetration by Store TypeWeekly Shopper Penetration by Store Type

*Top promoted holiday week penetration divided by store’s average weekly Kosher shelf stable penetrationSource: Cannondale Associates ShopperGenetics®, 52 weeks ending 8/06

““Deep” DiscountersDeep” Discounters ““Shallow” DiscountersShallow” Discounters

Holiday Basket Holiday Basket Penetration Index*Penetration Index* 191 211

Rosh Hashanah & Yom Kippur

Hanukkah

Passover

Rosh Hashanah & Yom Kippur Hanukkah

Passover

Cust

omer

Inde

x

Cust

omer

Inde

x


$4.63

$7.24

"Deep" Discount Stores "Shallow" Discount Stores

““Shallow” wider discounting encourages more item Shallow” wider discounting encourages more item purchasespurchases

Avg. Kosher Shelf Stable Spending per Basket Avg. Kosher Shelf Stable Spending per Basket (During Holidays)(During Holidays)

*Discount is based on non-holiday price vs. holiday price in-store if year round, otherwise based on average non-holiday price in other storesSource: Cannondale Associates ShopperGenetics®, 52 weeks ending 8/06

Avg # ItemsAvg # Items

Deep discounting core items subsidizes your consumer base, Deep discounting core items subsidizes your consumer base, limiting the holiday basket ring limiting the holiday basket ring

2.2 3.4


““Shallow” discounters maximize Shallow” discounters maximize annualannual Kosher Kosher performance by promoting “wide”performance by promoting “wide”

CoreCore11 4 Item 4 Item DiscountDiscount

Kosher Shelf Stable Sales Velocity IndexKosher Shelf Stable Sales Velocity IndexAverage SKU Sales per $1 Million Store SalesAverage SKU Sales per $1 Million Store Sales

1Core items are Gefilte fish, matzo, juice, soupSource: Cannondale Associates ShopperGenetics®, 52 weeks ending 8/06

7684

140

> -25% -25% to -21% < -20%


$100$120

$138

$178

< 3 4-6 7-10 > 10

More Kosher categories in the holiday basket triggers More Kosher categories in the holiday basket triggers a greater holiday purchase occasiona greater holiday purchase occasion

1Stock-up trips are where at least 15 unique items are purchasedSource: Cannondale Associates ShopperGenetics®, 52 weeks ending 8/06

Basket Ring on Stock-UpTripsBasket Ring on Stock-UpTrips11

Among Kosher BuyersAmong Kosher Buyers

Non-Holiday Stock-Up Trip Kosher Holiday Stock-Up Trips

# of Unique # of Unique Kosher ItemsKosher Items

$100$120

$138

$178

< 3 4-6 7-10 > 10


Use holiday merchandising to maximize basket ring rather Use holiday merchandising to maximize basket ring rather than store tripsthan store trips

A “successful” holiday display will impact total store salesA “successful” holiday display will impact total store sales

Holiday Basket SolutionHoliday Basket Solution Kosher Holiday OccasionKosher Holiday Occasion

Consumers’ Consumers’ Holiday Holiday needsneeds



So, what is the So, what is the opportunity?opportunity?



Kosher profitable growth equationKosher profitable growth equation

Kosher Kosher Holiday Holiday

RingRing

Kosher Kosher Categories Categories

per per BasketBasket

Accelerate Accelerate Kosher Foods Kosher Foods

GrowthGrowth=+Purchase more

Kosher categories

per basket

Sell the holiday occasion


How?How?

Maximize category variety, minimize duplication Make room for innovative new products

Everyday Everyday AssortmentAssortment

Holiday Holiday MerchandisingMerchandising

Meet the broader consumer need Shallow discounting across a wide-variety of Kosher categories Display with/near holiday solution items:

– Kosher meat case– Beer/wine– Silver polish, candles, etc.


Those who partner Those who partner successfully will have the successfully will have the

best opportunity to succeedbest opportunity to succeed



Your challenge…Your challenge…

Must provide the consumer insight and fact-based analysis from a total Kosher perspective to improve in-store management and execution

Help vendors make this commitment with cooperation and information sharing

Manufacturers and Manufacturers and DistributorsDistributors

RetailersRetailers


Collaborative touch pointsCollaborative touch points

Consumer insight and targeting

In-store research

Shelf management

Efficient product assortment

Holiday merchandising

Optimal everyday pricing

Logistics technology


In summary…In summary…

There are many faces of the Kosher consumer – not one

They want broader selection of categories – not multiple brands

They purchase an entire “solution” of products during holidays – not just core items

Key InsightsKey Insights


……to Actionto Action

Maximize category variety, minimize duplication

Make room for innovative new products

Meet the broader consumer need during the holidays– Shallow discounting across a wide variety of Kosher categories– Display with/near holiday solution items

ActionAction

Key is retailer/distributor/manufacturer collaborationKey is retailer/distributor/manufacturer collaboration

insight to action - food processing...csw/d/cw/rab foods/insight to action - 110806 12 what were the...

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