Clm case crackers-dina

Best recipes ever Case Crackers Recipe Book

Made by: Buryak Igor Filippova Natalia Khayretdinov Denis Shcheglov Anton Case Crackers, 2011

1

Changellenge Cup Russia 2011

Goal Strategy Distribution Logistic Summary Appendix

* West Russia **Calculation of sales growth due to exogenous factors – see Appendix #1.1 **Look Big Map in Appendix#9

↑ in 1.3 times

↑ in 1.09 times

↑ in 1.85 times

Essential Growth**

Inflation**

Distribution

Main points:

OWN retail network development

M&A actions

100% regions covering

Key Accounts relationship development

HoReCa relationship development

Usage of rail transport in cross-regions transportations

Strategy “2012-2015”

Results: NEW Distributional Network** X2 ↑ sales in $ in Russia

means X2.4 ↑ in West*

The achieving the Goal of Doubling Inmarko Sales in Monetary Term in Russia with building NEW Distributional Network in Central, North-West, South, and North Caucasus regions

is impossible without NEW Distribution and Logistic Strategy

Goal Strategy Distribution Logistic Summary Appendix

•More about the project - see Appendix #7-8

What do we have: Current problems in D What should we do: Actions

Complex Distribution scheme

Missed Regions

Contracts with non efficient distributors

(with low CCFOT)

Distributors not interest in sales increase

Small Shelf Share

CHANGE IT (D Reconstruction -Own Network Expansion)

100% regions coverage

Changes in Distributors Portfolio

System of Distributors Stimulations

Own Network Expansion

Categorical Management Projects*

HoReCa Projects*: Partnership with Academy of Hospitality Exclusive contracts with café and restaurants Standard Branded Kiosks Network

In big cities Competition with IceBerrry! Sochi 2014 Project:

Sell Ice Crème during Olympic Games: → HUGE increase in sales! New way of Distribution*: ICE CRÈME CARS

“AVON-model Project” In MSk & SPb NOBODY has ever done it!

Non standard Kiosks*: GIANT ICE CREAM In MSk & SPb NOBODY has ever done it!

Development of OWN RETAIL NETWORK*: Development of NEW CHAINS of sales:

The analysis of current problems in D (further – “D”) suggests itself the possible ways to solve the problems

• X5 Retail Group • Lenta • OKey • Magnit • Achan • HoReCa Suppliers

incl. Metro Cash&Carry)

*Due to Arktica and Santa Acquisitions ** The criterias of choosing the Distributor – see appendix #3 *** Means that Shipment could be both from own warehouses or Distributor warehouses

Distributors**

Own Warehouses: •MSK •SPb* •Stavropol* •Krasnodar*

Traditional Trade

A c t i o n s b y D i s t r i c t s

MSK&SPb Central District North-West District South District North Caucasus Region

Arktica Acquisition OWN Kiosks “Ice crème car” Project

OWN Kiosks “Ice crème car” Project

Arktica Acquisition Distributors #

# Murmanskaya oblast’ # Karelia

Santa Acquisition Magnit contacts Sochi 2014

NEW Distributiors: # Chechnya # Dagestan

Tula Plant

Our goal Strategy Distribution Logistic Summary Appendix

Central D Center

Tula

Strategy of expanding OWN Network and reducing the levels of D to 2

Scheme of D: Less D Levels Direct Shipments to Key

Accounts, Ice Crème Cars Distributors: only for

dealing with TT and far regions

Delivery to kiosk should be flexible

Logicians services use only for transportation!!!

Ice Crème Cars

Kiosks Network

Cross Regions Shipment Inter Region Shipment

SPB

MSK

Traditional trade

Key accounts

Modern trade

Target Distribution by channels 2015:

in accordance with Market needs

2012 2013 2015 2014

1. Acquisition*

2. Distributor Change

3. Distributor

4. Work with

5. Contracts with HoReCa

6.

7.

1. Sales Increase: 9%

+ 16500 pallets

+ CCFOT Control

2. Sales Increase: 0.5%

+500 Pallets

+8% CCFOT


+ 8900 pallets in Murmansk, Petrozavodsk, Groznyi, Mahachkala

4. Sales Increase: 4.5%

40% Shelf Share


5% of Sales through HoReCa

6. Sales Increase: 2 %

7. Sales Increase: 2 %

2015 Result**


D system changing steps to achieve the goal of doubling sales in Russia by 2015: Timeline

In MSK and SPb by Summer 2012 In big cities by Summer 2014

Change ZERO to DISTRIBUTOR #18

DISTRIBUTOR #1, #5, #22 Review of Distributors

Portfolio. ADD if necessarily

Review of Distributors Portfolio. CHANGE if necessarily

In MSK and SPb GIANT ICE CREAME

In Big cities GIANT ICE CREAME

Development of branded kiosks network

Contract with MAGNIT in South Region

CATEGORIAL MANAGEMENT PROJECTS

ARCTICA: Attack SPb market

SANTA: foothold on SOUTH market

*The Calculations why acquisitions is more profitable – see in Appendix #10 **See Excel Calculations

* Calculation of Transportation coats see in Table or in Appendix #6


Routes Costs (rolling stock), rub.1

Costs (truck), rub.2

Tula-SPb 24114 30150

Tula-Stavropol 44200 52400

Tula-Krasnodar 38000 46500

Tula-Murmansk 66743 71520

Logistics should be structured in terms of effectiveness and low costs:

VS Refrigerated truck Refrigerated rolling stock

*Cost comparison

Criteria of choosing the way of transportation: The Choice:

1. COST of transportation

2. Speed of Delivery

3. Well developed railway system in a region

4. Well developed highways system in the region

Rolling Stock* Truck Rolling Stock Truck

For cross regions transportation

For inter region transportation

The FINAL choice:

* Calculation of Value Share – see Appendix #1.2


Doubling Inmarko Sales in Monetary

Term in Russia

X2 ↑ sales in $ in Russia

means X2.4 ↑ in West*

NEW Distribution Strategy

Need only 1.85 times increase through

NEW Logistic Strategy

Dustribution Strategy: Main Points

OWN retail network development: Kiosks Network ICE CRÈME CAR Project

M&A actions: Acquisition of “Arctica” to attack SPb

Market Acquisition of “Santa” to Foothold the

South Market

100% regions covering: ADD in Portfolio Distributor #22, #

Key Accounts relationship development: Exclusive Contracts Categorical management Projects

HoReCa relationship development: Contracts with StarBucks, Chocoladnitsa,

Cofe House, e.t.c

Inmarko-Unilever

Nestle

Iceberry

Talosto

Russki Holod

0

1

2

3

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5

6

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9

10

0 10 20 30 40 50 60 70 80

Ave

rage

pri

ce (

euro

/kg)

Sales volume (th. tons)

Russian ice-cream market *(sept. 2011 – trend Dec.2015)

32%

Circle size means Value Share of manufacturer 31,67% - forecast Value Share of Inmarko in 2015

Logistic Strategy: Main Points: Usage of Rolling Stocks are preferable in

cross regions transportation

TARGET: increase in sales in value in 2.4 times (Forecast Value Share:32%)

Appendix#1.1. Calculation of necessarily growth in Sales on West of Russia if Total Sales will grow up in 2 times

Structure of sales: 60% west, 40% - east

Growth of east in 2011/2015 – 1.3

Required growth of west (in volume term) – 1.85

Required growth of west (in value term) – 2.4 times

0

10

20

30

40

50

60

2011 2012 2013 2014 2015

Volume, Inmarko (west), th. tons

Volume, Inmarko (European Russia), th tons

Exogenous drivers of growth 2011 2012 2013 2014 2015

Inflation 0 0.044 0.071 0.076 0.08

Average consumption 5.08 5.22 5.22 5.22 5.22

Consumers' share in total population 0.55 0.56 0.57 0.58 0.59

Population 145.3 145 144.7 144.4 144.1

Annual exogenous growth 1 1.090021 1.08787 1.092607 1.096338 1.420432

Total

Growth of the West market 2011 2012 2013 2014 2015 Total

Growth in value 1 1,24 1,24 1,24 1,24 2,40

Growth in volume 1 1,19 1,16 1,16 1,15 1,85

Our goal Strategy Distribution Logistic Summary Appendix #1

2011 2012 2013 2014 2015

Sales in East (Inmarko), bn euro 0,11 0,13 0,14 0,15 0,16

Sales in West (Imarko), bn euro 0,17 0,21 0,27 0,33 0,41

Sales in Russia (Inmarko), bn euro 0,29 0,34 0,40 0,48 0,58

Russian market, bn euro 1,28 1,40 1,53 1,67 1,82

Inmarko share 22,40% 24,28% 26,43% 28,88% 31,67%

Appendix# 1.2. Value Share Evolution: Inmarko

Appendix#2. Sales by regions and channels, dynamics

Share of sales channel (%) 2011 2012 2013 2014 2015

Traditional trade 75% 75% 74% 74% 74%

Key accounts 10% 11% 12% 13% 14%

Modern trade 15% 14% 14% 13% 13%

Volume, Inamrko (europe), th. tons 2011 2012 2013 2014 2015

NWFD (w/o St.Pb.) 3,07 3,66 4,25 4,92 5,67

CFD (w/o Moscow) 16,02 19,10 22,20 25,68 29,59

SFD 2,75 3,28 3,82 4,41 5,09

NCFD 1,86 2,21 2,57 2,97 3,43

St.Petersburg 0,54 0,64 0,75 0,87 1,00

Moscow 3,58 4,26 4,96 5,73 6,61

Our goal Strategy Distribution Logistic Summary Appendix#2

Traditional trade Key accounts

Modern trade

Traditional trade Key accounts

Modern trade

Distribution by channels 2011 Distribution by channels 2011: Increase the Key Account Share

Appendix#3. Capacity sufficiency

The capacity of Tula’s DC is enough

The needs of capacity in North-West and South are covered by Arktika’s and Santa’s warehouses. In case of seasonal peak, the capacity can be freed by reducing the inventory period (through VMI or more sophisticated planning)

2011 2012 2013 2014

Production in Tula (monthly), th. tones 2,68 3,13 3,59 4,08

Average stock level in Tula, th. pallets 10,73 12,54 14,37 16,34

max Capacity of DC in Tula, th. pallets 20 25 30 35

Inventory period DC, Tula, days 30 30 30 30

Inventory period DW, days 30 30 30 30

Capacity requirements, pallets 2011 2012 2013 2014 2015

NWFD (w/o St.Pb.) 920 1 097 1 275 1 475 1 700

CFD (w/o Moscow) 4 806 5 730 6 659 7 703 8 878

SFD 826 949 1 062 1 181 1 306

NCFD 557 640 716 796 880

St.Petersburg 162 187 212 238 266

Moscow 1 073 1 240 1 404 1 576 1 762


Nestle Iceberry Russkiy Kholod Talosto Inmarko

Factories Zhukovsky 1 Vologda Barnaul Moscow

St.Petersburg Volkhov Shakhty Moscow

Tula Omsk

Branches Branches in the biggest cities in Russia (St.Petersburg, Moscow, Samara, Nizniy Novgorod, Perm etc.)

Powerful branches in Moscow and Saint-Petersburg

14 branches throughout Russia (Kursk, Vologda, Astrakhan, Moscow etc.)

Branches in such big cities as Moscow, St.Petersburg, Krasnodar, Yekaterinburg, Rostov-on-Donu

9 branches throughout Russia (Moscow, Qazan, Tula etc.)3

Storage facilities Large national or regional warehouses located near clients

Common distribution center

Big distribution center in Moscow and rented storage facilities

Low-temperature warehouses in St.Petersburg, Moscow, Yekaterinburg and Krasnodar

Own warehouses in Tula, Omsk and several rented storage facilities

Fleet Own specialized trucks and rented ones

Own 20 units of refrigeration machines

Own specialized trucks and rented ones

Own big specialized fleet

Own specialized trucks and rented ones

1Company closed factory in Timashevsk in 2011 and transferred equipment to factory in Zhukovsky

Appendix #4. Description of Inmarko and its most strong competitors in all three districts


St.Petersburg

Petro-Kholod

St.Petersburg

Khladokombinat #1

Alter-West

Factories St.Petersburg

Essentuki St.Petersburg Troizk

Frankfurt (Germany) Kalisz (Poland)

Branches Well-developed branches throughout Russia from Kaliningrad to Vladivostok

The only branch in St.Petersburg

6 branches in European Russia (Orel, Kaliningrad, Kolomna, Kaluga, Moscow, Troizk)

Storage facilities Big warehouse in St.Petersburg with capacity of 23000 tons of products. There are railway facilities.

4 modern warehouses in St.Petersburg

Well-equipped warehouse in Troizk

Fleet Own specialized trucks Own specialized trucks Own specialized trucks

Appendix #5. Description of local competitors of Inmarko in CFD, NSFD, SFD


Appendix #6 Usage of refrigerated rolling stock in several routes

Routes: Tula-St.Petersburg, Tula-Stavropol, Tula-Krasnodar, Tula-Murmansk.

One refrigerated rolling stock can carry 35 tons of ice-cream. According to JSC Refservice (the subsidiary of the Russian Railways) and Tkvsm ltd. (forwarding agency) the transportation of 35 tons of ice-cream costs in average 50 rubles per km.

Thus it is more profitable to use refrigerated rolling stock in those routes than trucks.

NB! It is important to mention that in short routes it is more beneficial for company to use refrigerated trucks in order to decrease time of ice-cream transportation (Ex. Distance between Tula and Moscow is just 194 km.). In some routes (Ex. Tula-Arkhangelsk, Tula-Murmansk) highway is at very poor quality, so refrigerated rolling stock is also more preferable.

Routes Distance, km.

Transportation costs (rolling stock), rub.1

Transportation costs (truck),

rub.2

Tula-St.Petersburg 844 24114 30150

Tula-Stavropol 1547 44200 52400

Tula-Krasnodar 1330 38000 46500

Tula-Murmansk 2336 66743 71520

1,2 Transportation costs were derived from JSC Refservice and Tkvsm ltd. (forwarding agency).


Appendix#7. Distribution through HoReCa

• Active usage of partnership with the Academy of hospitality to promote ice-cream in market HoReCa (Ex. lobbying in state structures).

• Exclusive contracts with developing café chains in Russia such as Starbucks.

• Development of own ice-cream café chains Ben & Jerry’s in big cities such as Moscow, St.Petersburg, Sochi etc.


Appendix#8. Special Projects

GIANT ICE GREME Project: Special kiosk in Shape of different Ice Crème. • Main Goal: to attract new consumers • Plus such a kiosks can provide higher brand recognition • Also we can use kiosks instead of outdoor Ads • We can make a PR project: competition between students from

architect Universities named “The constriction Best Project of Ice Crème House!”

ICE CRÈME CAR Project

• Special Trucks with Ice Crème in Moscow and Saint-Petersburg: experimental project

• In Summer time their mobility allows us to sell Inmarko Ice Crème not only in Moscow and Spb, but in it’s Suburbs too.


Categorical Management Project:

• Project in cooperation with key accounts: merchandising of Ice Crème according to value share of manufacturer

• Pluses for Inmarko: get the maximum place on Shop “Shelf”

• Pluses for Key Accounts: huge growth in sales of all category of Ice Crème

- Factory

- Inmarko’s Warehouse Network - Our Distributors Network

- Key accounts

- HoReCa

- Kiosks

- Ice Cream Lorries

- Sochi 2014

- Long-haul carrying


Appendix#9. Target Distribution map with main logistic paths

Appendix#10. Logistics services + own sales network vs. Distributor (ex. NWFD)

Logistics services and use of own sales network

RUR tons places/per day

Sales manager salary 30 000

Tula-St.Pete 30000 50

6500 10 7

Month costs

Sales manager 64 1920000

Operational expences 1920000

Number of big races/month 65 1947977,517

Number of small races/day 14 2110308,977

Cost, RUR (month) 7 898 286

Distributor

Volume, tons 3246,6292

Value, RUR 584031262

% 16,175

Costs, RUR (year) 94467056,6

Costs, RUR (month) 7 872 255

To run the branch is less expensive if there are no more than 65 sales managers * *branches on the basis of Arktika and Santa


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