In The Olive Oil Category? By Cindy Beam & Michael Young So What’s Cooking In The Olive Oil Category?

Introduction Who is in control – retailer or brand? We say retailer with a few exceptions

Importance of Depth Depth is very important Audited 15 stores Total 181 SKUs Depth has increased significantly Depth seems to be tied more to target market than competing stores

Typical Walmart SKU’s $0.35/ .oz $0.30/ .oz $0.28/ .oz

Typical Fresh Market SKU’s $2.05/ .oz $0.76/ .oz $1.76+/ .oz

Category Role Flagship Option 2* Maintain sales/increase profits Sales Volume (000) HH Penetration Gross Margin** Olive Oil Total U.S. $722,133.6 37.8 45% West South Central $58,942.9 32.6 ACN Olive Oils WSC 07 * Robert Blattberg, PhD. (Consumer-Centric Category Management, pg.88) **Estimate based on the sample stores

Strength of Leading Brand Bertolli dominates Multiple SKUs at 10 of our 15 stores ACN: Bertolli Item $s are 17% of US category Average Gross Margin about 45%

Market Stocking Rate Sum of store count / (#SKUs X #stores) Brand Bertolli 56 135 .41 Crisco 31 90 .34 Pompeian 39 120 .33

Gross Margin Estimates by Brand Report Manufacturer WLM 6th St GM% HPS GarlandGM% Aldi's 6th St.GM% IGA SchoolGM% TFM Prom GM% Bertolli N 8 3   2 Mean 45% 42% 47% 43% Carapelli 4 1 51% 60% Colavita 30% 62% Cookwell Crisco 6 29% 38% Davinci 34% De Cecco Filippo 5 23% 54% Gem 71% Lucini Newman'sOwn 28% Olivari 41% Other 9 32 47 44% 46% Pompeian 7 Private Label 56% 58% 49% 55% Star 32% Total 62 23 52 57 44.25% Gross Margins 55.5%, carried in two stores 36.67% Bertolli- Category Leader (Averages around 44% GM) Carapelli- Higher GM than Bertolli (56%) but carried only in Walmart and Harps Private Labels- Present in 14 stores out of 15 in audit. (93.33%) averages 52.8% GM IS THIS CONSISTENT WITH YOUR ROLE FOR YOUR CATEGORY? Yes, 52.8% GM (93.3% store presence)

Is This Consistent with Your Role for the Category? Provides value for the customer by meeting their routine, or stock-up, needs. Various consumer uses Pricing among competitors. Promotion Characteristics Healthier substitute for cooking oils Space Allocation Assortment Characteristics IS THIS CONSISTENT WITH YOUR ROLE FOR THE CATEGORY> Yes, olive oil’s role in their category is “ROUTINE”. Customers purchase olive oil as a “stock up item”. -Retailers tend not to use this category as a primary category to “define” the retailer. Not a seasonal item, although prices fluctuate based on the time of year. Olive Oil can be used secondarily as a Convenience/ Impulse item if it is “discounted” by retailer on promotion. PRICING AMONGST COMPETITORS Pricing amongst competitors is around (0-5%) on a blended basis. PROMOTIONS -Olive Oil can be found within the grocery section of the store (mainly on end caps) displayed frequently. SPACE ALLOCATIONS -Single assigned space found within the retailer’s logical traffic flow. Not found at checkout/ various multiple locations usually (Destination Role, Seasonal Role, Convenience Role- Impulse) not found in a prime location. ASSORTMENT CHARACTERISTICS -Broad variety focused on major brands and better sellers, saturated Private Labels.

Relationship Between Gross Margins & Depth WLM 6th St GM$ WLM 6th St Face N Mean 1 6 $2.09 2 31 $3.04 3 14 $3.57 4 $1.51 5 $1.50 $2.68 7 $2.91 8 $2.54 9 $1.82 Total 62

Relationship Between Gross Margins & Depth TFM Prom GM$ TFM Prom Face N Mean 1 37 $8.14 2 17 $5.82 3 $5.84 Total 57 $7.32

Relationship Between Gross Margins & Depth IGA SchoolGM$ IGA School Face N Mean 1 6 $4.00 2 21 $3.82 3 15 $3.80 4 5 $3.02 $2.41 $4.52 7 $3.69 Total 52 $3.77

Private Label Opportunities How strong are private labels? Products TOTAL Parent Folder % Penetration Index Quadrant Colavita (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.7% 119 1.High Index / High Penetration Botticelli (Shortening, Oil : Olive Oil) Oz. * 1.2% 118 Capatriti (Shortening, Oil : Olive Oil) Oz. ** Bertolli (Shortening, Oil : Olive Oil) Oz. 6.0% 114 Filippo Berio (Shortening, Oil : Olive Oil) Oz. 6.8% Star (Shortening, Oil : Olive Oil) Oz. 1.9% 111 Carapelli (Shortening, Oil : Olive Oil) Oz. 1.6% 110 Private Label (Shortening, Oil : Olive Oil) Oz. 18.8% Pompeian (Shortening, Oil : Olive Oil) Oz. 5.1% 109 Crisco (Shortening, Oil : Olive Oil) Oz. 3.2% 107 Mazola (Shortening, Oil : Olive Oil) Oz. * 0.8% 100 Carbonell (Shortening, Oil : Olive Oil) Oz. ** 0.5% 121 2.High Index / Low Penetration California Olive Ranch (Shortening, Oil : Olive Oil) Oz. ** 0.3% 113 Vigo (Shortening, Oil : Olive Oil) Oz. ** 0.4% Delallo (Shortening, Oil : Olive Oil) Oz. *** Goya (Shortening, Oil : Olive Oil) Oz. ** Da Vinci (Shortening, Oil : Olive Oil) Oz. *** 0.2% 106 Racconto (Shortening, Oil : Olive Oil) Oz. *** 101 Napoleon (Shortening, Oil : Olive Oil) Oz. *** Olivari (Shortening, Oil : Olive Oil) Oz. ** 97 4.Low Index / Low Penetration Gem (Shortening, Oil : Olive Oil) Oz. ** 91 Pampa (Shortening, Oil : Olive Oil) Oz. *** 89 ACN Homescan Product Library

Private Label Opportunities Stores Carrying P/L’s and their Gross Margins P/Ls make up over 30% of total dollar share of the US category ($216,278,900) Manufacturer WLM 6th St GM% HPS GarlandGM% Aldi's 6th St.GM% IGA SchoolGM% TFM Prom GM% Bertolli N 8 3   2 Mean 45% 42% 47% 43% Private Label 7 5 6 56% 58% 49% 55% 46% Total 62 23 52 57 41% 44%

Olive Oil Gross Margin % Trends

Recommendations on Private Label Use Increase in-store cross merchandising Introduce low cost strategies to enhance P/L image Increase facings of higher GM% P/L products…with limits Introduction of premium P/L products

QUESTIONS??