Remittances, Value Added Tax and Tax Revenue in Developing ...
Developing a Value Added Marketing Plan for Your Dairy
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Transcript of Developing a Value Added Marketing Plan for Your Dairy
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BUSINESS INNOVATION IN FOOD, AGRICULTURE, NATURAL
RESOURCES, AND THE BIOECONOMY
Developing a Value Added Marketing Plan for Your Dairy
Tom KalchikAssociate Director
MSU Product Center
www.productcenter.msu.edu
Overall Market StrategyMarketing Plan
Overall Market Strategy Pricing Sales Tactics
Ad ti i d P ti Advertising and Promotion Packaging Publicity
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Marketing Research and Analysis Customers Customers
Market Size and Trends
Competition
Market Share and Sales
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Where do you find this? MSU Product Center
www.productcenter.msu.edu Market Reports Rapid Opportunity Assessments
Dair ROA Dairy ROA Innovation Counselors
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Dairy ROA Cultured dairy products have many opportunities Yogurt drinks are a growing market, and are
particularly appealing to the demand drivers of convenience and wellness
From 1999 through 2003, there were 653 product introductions in the yogurt industry andproduct introductions in the yogurt industry, and there has been an upward trend in new introductions. The most popular product positioning claims were low/no/reduced fat, organic, all natural and low/no/reduced calories
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Where do you find this?MSU P d C MSU Product Center www.productcenter.msu.edu Market Reports Rapid Opportunity Assessments Dairy ROADairy ROA Innovation Counselors
MI MarketMaker www.mimarketmaker.msu.edu Free resource
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Find a Target Market Household Type Education Foreign Born Race Income Income Income by Race Food Preferences
Average Dairy Products at Home Expenditures
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Dairy ROA Cultured dairy products have many opportunities Yogurt drinks are a growing market, and are
particularly appealing to the demand drivers of convenience and wellness
From 1999 through 2003, there were 653 product introductions in the yogurt industry andproduct introductions in the yogurt industry, and there has been an upward trend in new introductions. The most popular product positioning claims were low/no/reduced fat, organic, all natural and low/no/reduced calories
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Market size and forecast Consumer exhibit
retraction in demand as the FDMx volume sales, on average, declined 2.4% annually during 2003-08.
Private labels, which account for 60% of the total FDMx sales andtotal FDMx sales and are priced 15-25% cheaper than the branded milk, have largely patterned the market sales trends during 2003-08.
SOURCE: MINTEL'S ESTIMATES BASED ON U.S. BUREAU OF LABOR STATISTICS, CONSUMEREXPENDITURE SURVEYS, INFORMATION RESOURCES, INC. INFOSCAN REVIEWS
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The competition yogurt and yogurt drinks
Recent (functional) ece ( u c o a )innovations in yogurt coupled with the fact that consumers are trying to eat healthier foods, has made yogurt one of the biggest competitors of milk. Consumer perceive yogurt more healthful than milk, as yogurt not only has similar nutritional profile as milkpresence of calcium and vitamin D, but also carries live cultures that are considered essential for a healthy digestive system
SOURCE: MINTEL/BASED ON INFORMATION RESOURCES, INC. INFOSCAN REVIEWS
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Segment sales and forecast of milk Refrigerated white g
milk posts impressive dollar sales growth through price increase in FDMx during 2006-08.
Flavored milk remains flat due to narrow consumer positioning.
Powdered milk and evaporated milk contribute to the sales growth in other milk segment.
SOURCE: MINTEL'S ESTIMATES BASED ON BASED ON INFORMATION RESOURCES, INC. INFOSCAN REVIEWS INFORMATION
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Hispanics and blacks are primary whole milk consumers
Hispanics and black milk-using households exhibit much higher incidence of using whole milk, compared to the average household. For HispanicsFor Hispanics, drinking whole milk is likely a habit carried over from their native countries.
Source: Mintel/Simmons NCS/NHCS: NCS Summer 2008 Adult Full YearPOP
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Supermarkets experience impressive growth on the strength of private labels
U.S. SALES OF MILK, BY RETAIL CHANNEL
Supermarkets experienced impressive 13% growth during 2006-08; however, much of this growth
8,000
10,000
12,000
14,000
2006 $ million 2008 (est) $ million
of this growth was driven by private label milk sales.
0
2,000
4,000
6,000
Supermarkets Convenience stores Drug and mass
SOURCE: MINTEL'S ESTIMATES BASED ON INFORMATION RESOURCES, INC. INFOSCAN REVIEWS INFORMATION /NATIONAL ASSOCIATION OF CONVENIENCES STORES
*
*EXCLUDING WAL-MART
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www.productcenter.msu.eduTop six dairy processors only account for 26% of the total market share
The top six dairies Dean HP HP Hood
Dean Foods
FDMx SALES OF LEADING MILK COMPANIES
2008 $ million 2007 $ million
The top six dairiesDean, HP Hood, Prairie Farms, Nestl USA, National Dairy Holdings, and Group Dannonaccounted for only 26% of the market share in 2008.
Private labels accounted for nearly 60% of the total market share in FDMx. Since consumer do not differentiate
0 500 1000 1500 2000 2500
Groupe Dannon
National Dairy Holdings
Nestl USA
Prairie Farms
consumer do not differentiate between different brands of milk, especially white milk, the 20-25% price discount in private labels, compared to branded milk has led consumers to adopt private label milk.
0 2,000 4,000 6,000 8,000 10,000
All other
Private label
FDMx SALES OF PRIVATE LABEL AND ALL OTHER COMPANIES
2008 $ million 2007 $ million
SOURCE: MINTEL/BASED ON INFORMATION RESOURCES, INC. INFOSCAN REVIEWS INFORMATION
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Personal incidence of using milk is lower
than that of carbonated drinks 66%No children present in the household
INCIDENCE OF INDIVIDUAL CONSUMPTION OF MILK AT LEAST FOUR TIMES A WEEK, BY KEY DEMOGRAPHICS
CH
ILD
REN
IN H
H
carbonated drinks and bottled water
While 96% of all U.S. households exhibit incidence of using milk, only 68% of all adults aged 18 and over report drinking milk at least four times a week. 66%
69%
70%
59%
70%
72%
55-64
65+
White
Black
Hispanic
Children present in the household
pCR
ACE/
HIS
PAN
ICO
RIG
INA
GE
least four times a week. This suggests that personal consumption of milk lags that of carbonated drinks (nearly 90%) and bottled water (70%).
68%
67%
72%
72%
68%
61%
Male
Female
18-24
25-34
35-44
45-54
AG
END
ER
SOURCE: MINTEL
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Boomers prefer functional over natural/organic positioning Boomers are most interested in yogurt that contains live active cultures, is low in
sugar and fat and high in calcium, and are less interested in natural/organic
434240
4443
50
45 4544
Importance of healthy positioning with yogurt and yogurt drinks, by age, August 2009
18-24 25-34 35-44 45-54 55-64 65+
g g , gpositioning.
%
36
2723
38
2824
36
2119
35
23
36
1916
40
27
35
19
13
29 30
1414
21
30
13
7
21
It's naturalIts hormone-free Its organic Its high in calcium It contains active yogurt cultures
It contains probiotics
Source: Mintel
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Healthy eating trend has driven growth since 2004, but recession leads to a slowdown in 2009
ns
4,500
5,000
5,500
FDMx sales of yogurt and yogurt drinks, at current prices, 2004-14 Sales of yogurt
and yogurt drinks grew 32% since 2004, reaching $4.1 billion in 2009 in FDMx. Following four years of strong sales growth
$ m
illion
projected
3,000
3,500
4,000
2004 2005 2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f
sales, growth slowed to 2.8% in 2009 as the economic recession prompted some consumers to cut back on yogurt.
Source: Mintel/based on Information Resources, Inc. InfoScan Reviews
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4 000
5,000
FDMx sales of yogurt and yogurt drinks, by type, 2004-09
Refrigerated yogurt
Recession hurts sales of most types of
yogurt, but gives frozen yogurt sales a
2,000
3,000
4,000 Refrigerated yogurt
350
400
450
500
y gboost
Refrigerated yogurt accounts for the majority (86% in FDMx) of yogurt sales. Sales of refrigerated ns
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f
Refrigerated yogurt drinksFrozen yogurt/tofuShelf-stable yogurt/yogurt mixes
gyogurt grew a strong 40% from 2004-09 as more Americans discovered its health benefits. $
milli
on
Source: Mintel/based on Information Resources, Inc. InfoScan Reviews
projected
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Natural product supermarket retail sales of yogurt
Sales of yogurt and yogurt drinks in the natural channel
227.2230.7
Natural product supermarket retail sales of yogurt and yogurt drinks, at current prices, 2007-09*
Sales of yogurt at natural foods stores grew a strong 12% in 2008 thanks to an emergence of new local and artisan llio
ns
202.3
2007* 2008* 2009*
brands that generated interest in the category.
$ m
i
Source: Mintel/SPINS
* 52 weeks ending September 8, 2007, September 6, 2008 and September 5, 2009
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Trends in personal consumption of refrigerated
Women are core yogurt users, but usage among men is growing
%
42 43
64 6467 68
Trends in personal consumption of refrigerated yogurt/yogurt drinks, by gender, Fall 2003 to
March 2009
Male Female
Nearly seven out of ten women (68%) eat refrigerated yogurt/yogurt drinks, compared to only 43% of men. But usage among men is on the rise; personal consumption among
%
39 3742
2003 2005 2008 2009
consumption among men increased by 4 percentage points from 2003-09.
Source: Mintel/Experian Simmons NCS: Fall 2003 Adult Full YearPOP, NCS/NHCS: Fall 2005 Adult Full YearPOP, NCS/NHCS: Winter 2008 Adult Full YearPOP, NCS/NHCS: Winter 2009 Adult Full YearPOP
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FDMx sales of yogurt and yogurt drinks, by
Small, premium brands are stealing share from market leaders Groupe Danone and General Mills
1,362
1,347
1,378
1,354
Groupe Danone S.A.
General Mills
FDMx sales of yogurt and yogurt drinks, by manufacturer, 2008-09 Two companies,
Groupe Danone and General Mills, dominate the yogurt market, accounting for more than 67% of sales in FDMx. Despite a high level of product innovation and marketing m
illion
s
451
744
469
833
Private label
Other2008*
2009*
and marketing support, both market leaders lost market share from August 2008-09.
$ m
* 52 weeks ending 52 w/e August 10, 2008 and August 9, 2009Note: Data may not equal totals due to roundingSource: Mintel/Based on Information Resources, Inc. InfoScan Reviews
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Importance of non-health related attributes with yogurt and yogurt drinks, August 2009
Purchase drivers
The two most %61
59
54
37
36
It comes in a wide variety of flavors
The flavor of the yogurt/yogurt drink
The price of the yogurt/yogurt drink
The texture of the yogurt/yogurt drink
It is portable/easy to carry outside the home
y g y g , gimportant attributes consumers consider when buying yogurt are flavor selection and
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29
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It has fruit on the bottom
It comes in a multi-pack package
It has healthy mix-ins (eg, granola, nuts, dried fruit)
It comes in a family size package
It has candy/cookie mix-ins
price, cited by 61% and 54% of respondents.
Source: Mintel
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TakeawaysM k h d l i i i l Market research and analysis is essential
Use Product Center as resource Market reports Rapid Opportunity Assessments (Dairy ROA)
Innovation Counselors Innovation Counselors Use MI MarketMaker to
Help your customers find you Find potential markets and customer
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Takeaways Fluid milk is a mature and competitive
product line, dominated by private label bottlers, with some potential for flavored products for Hispanic and Black consumersconsumers
Cultured products such as yogurt and yogurt drinks have potential, especially for small companies