Grain Milks Timothy W. Huebner

Silk (Milk : Dairy-Shakes & Drinks-RefgD) Pints Total Consumption BehaviorScape Framework   LifeStyle BehaviorStage Cosmopolitan Centers Affluent Suburban Spreads Comfortable Country Struggling Urban Cores Modest Working Towns Plain Rural Living Total Start-Up Families HHs with Young Children Only < 6 146 89 191 140 92 100 123 Small Scale Families Small HHs with Older Children 6+ 71 97 155 96 135 64 105 Younger Bustling Families Large HHs with Children (6+), HOH <40 62 148 218 65 38 117 Older Bustling Families Large HHs with Children (6+), HOH 40+ 220 119 67 93 39 103 Young Transitionals Any size HHs, No Children, < 35 149 63 78 109 Independent Singles 1 person HHs, No Children, 35-64 102 60 131 51 46 Senior Singles 1 person HHs, No Children, 65+ 56 82 66 55 Established Couples 2+ person HHs, No Children, 35-54 125 138 72 74 91 94 Empty Nest Couples 2+ person HHs, No Children, 55-64 121 104 114 107 59 Senior Couples 2+ person HHs, No Children, 65+ 152 144 160 90 115 126 111 85 68 Category Snapshot

Category Demographics

Brand Differences

Until recently I just saw these as something for people who were lactose intolerant Size, in US sales: $1.38B in 2008 = high Projected to exceed $1.7B by 2016 [1] 8.5% Category Penetration Marsh Supermarket Data on the broader category Interest in penetration, purchase cycles, deal Category Role

Stores # SKUs % of Cat WM, MLK 46 53.5% WM, Pleasant Crossing 44 51.2% Ozark Natural Foods 22 25.6% Harps, w. Sunset 28 32.6% Aldi’s, MLK 7 8.1% Target, Promenade 4 4.7% The Wal-Mart on MLK had the highest percent with 53.5% Products located near diary products in stores Retailers Audited

Changes In category New Suppliers: Vanished Suppliers: Califa Farms Quality Chekd So Delicious Organic Valley Earth Balance Eden Soy SimplyMade Better Than Milk Friendly Farms West Soy Clearly Organic Good Karma Changes In category

Changes in Category, cont… %GM’s have decreased across the board Prices, for the most part, have gone down. Great Value grain milk, have increased in price Total number of facings for the category has drastically increased along with category depth Individual facings for SKUs have stayed approximately the same I predict that, as depth increases, there will be drastically increased competition for shares of display I still see the category taking a back burner to other more contemporary dairy beverages Changes in Category, cont…

The Suppliers All Suppliers: Silk – Largest brand Blue Diamond Great Value Hiland Rice Dream Califa Farms Earth Balance SimlyMade Friendly Farms Clearly Organic Good Karma 8th Continent The Suppliers

The Suppliers, cont… Silk was the dominant brand because: Most SKUs Present in every store except Aldi’s (which is devoted to PL) Stocked in 5/6 stores Stocking rate West Soy - gone Major firms with little shelf space, single facings, strange or lo9w margins? Target had surprisingly low shelf space for this category Ozark Natural Foods had percent margins 50-100% higher on some products Likely do to MUCH higher prices The Suppliers, cont…

Sku’s 86 total SKU’s discovered in audit Compared to 47 in 2012 audit 40 in 2011 24 in 2010 Supplier w/the most SKU’s of the identical product/formulation - Ocean Spray had 34 SKU’s - Private Label had 37 SKU’s This leaves 23 SKU’s for the other five brands found Adjacencies next to Cranberry Juices: Other Juices i.e. Grape Juice, V-8 Juices, etc. Location: in the middle of the aisle MLK Walmart had 22 Silk SKUs out of a total of 46 SKUs – THAT’S 47.8%!!! Sku’s

Stores Trade area demographics for specific stores Anticipated depth for the stores of interest to group members Store without any evidence at category management—no relationship between demographics and category depth Stores

Stores

Gross Margins Highest Costs: Private Label … Stocking Rate Silk – 0.045/oz Blue Diamond – 0.047/oz Private Label 0.3/oz … Stocking Rate Gross Margins

Private Labels Great Value’s prices have been rising High quality PLs in Organic stores; also high costs Good Losers Private Labels

1 http://www. prnewswire 1 http://www.prnewswire.com/news-releases/dairy-alternative- beverages-in-the-us-soy-milk-almond-milk-rice-milk-and-other- dairy-milk-alternatives-137168863.html Spectra Bibliography