JORDAN BRAINARD & ASHLEY JONES Granola Bars Semester Project 2012

Introduction STORES AUDITED (10)  Wal-Mart (MLK & Bentonville)  Target (Rogers & Fayetteville)  Walgreens (Rogers & Fayetteville)  Neighborhood Market (Bentonville & Fayetteville)  Harps (Fayetteville)  ALDI (Fayetteville) WHY WE PICKED THIS CATEGORY: Honestly, because we love them! We were interested in analyzing a category that we often shop for ourselves. WHO IS IN CONTROL? The retailer

Category Depth GENERAL INFORMATION:  SKU’s: 119  Brands:  8 National Brands  6 Private Label Brands WHO HAD THE DEEPEST ASSORTMENT?  Wal-Mart (Bentonville) had the most SKU’s (69)  Wal-Mart and Neighborhood Market had the most Facings  Target had the most Private Labels variety (2)  In person felt they had the most variety

Depth Breakdown

Demographics FAMILIES  Bigger Families – Newly and Maturing  Granola Bars are going to children  Also popular among younger couples INCOME  Middle to Upper income  Live comfortably ETHNICITY  More popular among Caucasians  Asians seem to be more Brand loyal  No substantial private label difference among other brands EDUCATION  Some college and college grad

Demographics CTL BR - GRANOLA & YOGURT BARS NAT VAL CW GR BR - GRANOLA & YOGURT BARS NAT VAL GR BAR - GRANOLA & YOGURT BARS QUAKER CHEWY - GRANOLA & YOGURT BARS QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS INC - $20, , INC - $30, , INC - $40, , INC - $50, , SIZE MEM SIZE - 5+ MEM AGE FH - UNDER AGE FH AGE FH AGE FH AGE FH AGE FH

CTL BR - GRANOLA & YOGURT BARS NAT VAL CW GR BR - GRANOLA & YOGURT BARS NAT VAL GR BAR - GRANOLA & YOGURT BARS QUAKER CHEWY - GRANOLA & YOGURT BARS QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS AGE FH - NO FEMALE HEAD KIDS - NONE < KIDS - ANY < KIDS - ANY < KIDS - ANY KIDS - ANY LS - YOUNG SINGLES LS - CHILDLESS YOUNGER COUPLES LS - NEW FAMILIES LS - MATURING FAMILIES LS - ESTABLISHED FAMILIES LS - MIDDLE AGED SINGLES LS - EMPTY NESTERS LS - OLDER SINGLES

CTL BR - GRANOLA & YOGURT BARS NAT VAL CW GR BR - GRANOLA & YOGURT BARS NAT VAL GR BAR - GRANOLA & YOGURT BARS QUAKER CHEWY - GRANOLA & YOGURT BARS QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS DOLLAR VOLUME INDEX TOTAL HOUSEHOLDS LS - MATR FAM/POOR-GET BY LS - MATR FAM/LIV COMF- AFF LS - EMPTY NEST/POOR- GET BY LS - EMPTY NEST/LIV COMF-AFF EMP - FH EMPLOYED EMP - FH NOT EMPLOYED ED - FH NOT HIGH SCH GRAD ED - FH HIGH SCH GRAD ED - FH SOME COLLEGE ED - FH COLLEGE GRAD RACE - CAUCASIAN RACE - NON-CAUCASIAN RACE - AFRICAN AMER RACE - ASIAN RACE - OTHER RACE ETH - HISPANIC

Which Brands Dominate? WHO IS LEADING THE PACK?  Nature Valley  Quaker  Private Label  Has potential to pass other leading brands WHO IS FALLING BEHIND?  Natures Path  Casadian Farm Organic  Generating high gross margins, however only found at Wal-Mart and Neighborhood Market

Share of Display Space Share of Display Space, Granola Bars Manufacturer Neighborhood Market BVILLE Face Wal-Mart MLK Face Target FAY FaceHARPS Face Walgreens FAY Face Kellogs% of Total Sum 1.00%3.08%3.39% 0.00% % of Total N1.43%3.17%3.33% 0.00% N Nature Valley% of Total Sum 32.00%33.85%26.27%48.00%64.29% % of Total N31.43%31.75%26.67%48.00%64.29% N Private Label% of Total Sum 23.00%11.54%23.73% 0.00% 14.29% % of Total N22.86%11.11%23.33% 0.00% 14.29% N Quaker% of Total Sum 23.00%32.31%25.42%52.00%21.43% % of Total N21.43%22.22%25.00%52.00%21.43% N Total% of Total Sum % % of Total N100.00% N

Nature ValleyQuakerPrivate Label

Category Strategy DEALS  No evidence of a “deal” in Audits BRAND PROMOTIONS  Walgreens and Target did have “price cuts” on Nature Valley products

Gross Margins PRIVATE LABELS COMPARABLE?  Used about half the Unit2 costs for our Private Labels  Adjusted Private Labels HIGHEST GROSS MARGINS?  Neighborhood Market  Wal-Mart LOWEST GROSS MARGINS?  ALDI

Gross Margins Estimated Gross Margins, Granola Bars Manufacturer Neighborhood Market BVILLE GM% Wal-Mart MLK GM% Target FAY GM% HARPS GM% Walgreens FAY GM% KellogsMean49.54%43.92%67.25% 0.00% N Nature ValleyMean26.62%27.50%31.01%36.77%51.19% N Private LabelMean52.81%56.30%35.17% 0.00% 46.82% N QuakerMean26.35%26.39%20.36%44.96%56.63% N TotalMean34.31%32.95%32.01%41.03%51.74% N

Market Scoreboard Market Score Board, Granola Bars Manufactures Neighborhood Market BVILLE Wal-Mart MLKTarget FAYHARPS Walgreens FAY Kellogs GM%49.54%43.92%67.25% 0.00% % of Total Sum 1.00%3.08%3.39% 0.00% % of Total N1.43%3.17%3.33% 0.00% N Nature Valley GM%26.62%27.50%31.01%36.77%51.19% % of Total Sum 32.00%33.85%26.27%48.00%64.29% % of Total N31.43%31.75%26.67%48.00%64.29% N Private Label GM%52.81%56.30%35.17% 0.00% 46.82% % of Total Sum 23.00%11.54%23.73% 0.00% 14.29% % of Total N22.86%11.11%23.33% 0.00% 14.29% N Quaker GM%26.35%26.39%20.36%44.96%56.63% % of Total Sum 23.00%32.31%25.42%52.00%21.43% % of Total N21.43%22.22%25.00%52.00%21.43% N Total GM%34.31%32.95%32.01%41.03%51.74% % of Total Sum % % of Total N100.00% N

5 Great Value SKU’s (Wal-Mart) 10 Milliville SKU’s (ALDI) Private Label Trends Granola Audits 2011

Private Label Trends Granola Audits 2012 YES! And they are growing… Retailers who gave a decent amount of shelf space to Private Labels had substantial Gross Margins. Wal-Mart “Great Value” is competing with other brands with flavor and packaging. Target is offering two Private Label brands with a variety of flavors and high quality packaging design. They are charging a premium price for Archer Farms. Wal-Mart – Great Value (9) ALDI – Milliville (7) Walgreens – Nice! (2) Harps – Best Choice (8) Target – Archer Farms & Market Pantry (15) SUMMARY: 6 Private Label Brands 41 Private Label SKU’s Private Labels have increased since last year’s audit PRIVATE LABELS PRESENT?

Granola Audits 2011 Granola Audits 2012 Private Label Trends

Recommendations Category is becoming more Retailer controlled Private Labels are becoming more significant within category Target and Wal-Mart have the highest gross margins and give more shelf space to their Private Labels Therefore, we would recommend that Harps increase emphasis on Private Labels because they can obviously compete with national brands and generate high gross margins. Harps on GarlandWal-mart on Joyce