Category Assessment of Oatmeal (DRAFT) By Uzor Jon-Ubabuco

Role of Category Cereal (Hot & Cold) has a net worth of $7.7 billion Cold cereal fell 3% in past decade Hot Cereal is picking up the slack due to more sensitive consumer needs (less sugar, gluten free, higher fiber) 60% of Americans eat Hot Cereal 2 out of 5 who eat hot cereal eat it often Hot Cereal Expected to grow from $1.4h in 2013 to $1.6b in 2018 (14.7%) Gross Margins: 40% (Estimation)

Flagship Sales Dollar Volume HighMediumLow Core Traffic Cash Machine Under Fire Maintain Rehab Gross Margin % High Low Blattberg’s Category Role Matrix HOT CEREAL

Competing Brand Summary Quaker Oats typically has at least 50%+ of the items in the store, with the next portion of ~40% belonging to that store’s private label Other national brands have low representation. Essentially, the competition is Quaker v. Private Label Overall, similar demographics between Quaker and Private Label. However, Quaker does have more customers with higher incomes and more that are seniors.

Differentiation *SPSS Analysis*

Differentiation Quaker leads with the most Flavor, Size, and Format (Package, Cylnder, Cup) variety. Virtually no other Manufacturer had a SKU that Quaker did not. Most retailers only feel the need to create Private label alternatives to the more important SKUs, allowing Quaker to increase overall category Depth and Variety mostly on their own.

Share of Facings (Walmart)

Walmart - Gross Margin (%)

All Stores – Gross Margin ($)

All Stores – Gross Margin (%)

All Brands – Unit 2 Comparision

Year over Year Analysis (Fall 2014)

Overall, the Category has grown in SKUs since last year. Although both Private Label and Supplier Brands grew, Supplier Brands grew more. Quaker increased it’s SKU presence considerably, which represents the largest portion of the YoY category growth

Private Label or Supplier Dominance The recurring theme in auditing the stores was that 90% of the facings were Quaker or Private Label. This was true for Walmart, Harps, and Kroger and true in Texas and Arkansas. It seems as though Private Label is necessary to help with competition in the category. Otherwise, Quaker would completely dominate the category

Private Label or Supplier Dominance Typically, similar SKUs from different brands were displayed right next to each other. This was especially true for Walmart. We found that the Quaker Maple Brown Sugar would be right next to the Great Value Maple Brown Sugar. The packaging was mostly similar as well, and box sizes and unit sizes were the same as well. HARPS was more likely to separate its Private Label from the Quaker Brand After realizing what a good deal Great Value Instant Oatmeal is, I’ve been buying a few boxes every week. I have no desire to try Quaker since I’m more concerned about price, and I don’t think the quality would be that different.