1. Grape Juice Fall 2014 By: Phillip Wallace Professor: Bob Stassen Class: MKTG 4443

2. Table of Contents I.Product Snapshot II.Category Role I.Product Snapshot Analysis II.Aisle of Grape Juice III.Store Demographics IV.Category Assessment V.Category Strategy VI.Category Tactics VII.Category Review I.A Look Back Into The Past

3. Why Grape Juice? Did you know that grape juice is one of the top 5 most popular fruit juice flavor in the world? Grapes contain flavonoids that give it is color (gathers interest) Drinking too much grape juice can cause a laxative effect (why seniors buy) Rich in vitamin C and K and are good for your heart and indigestion Enough facts….Lets turn to the product snapshot!

4. Product Snapshot: TOTAL GRAPE JUICE (JC,DRK-CAN,BTL) OZ. Total Dollars BehaviorScape Framework Lifestyle Behavior Stage Cosmopolitan Centers Affluent Suburban Spreads Comfortable CountryStruggling Urban CoresModest Working TownsPlain Rural LivingTotal Start-Up Families HHs with Young Children Only < 6 153173193200271188198 Small Scale Families Small HHs with Older Children 6+ 8310913599877699 Younger Bustling Families Large HHs with Children (6+), HOH <40 131132129137178139143 Older Bustling Families Large HHs with Children (6+), HOH 40+ 135129121168125111130 Young Transitionals Any size HHs, No Children, < 35 365958103834867 Independent Singles 1 person HHs, No Children, 35-64 68454442586555 Senior Singles 1 person HHs, No Children, 65+ 564552128615864 Established Couples 2+ person HHs, No Children, 35-54 5895 857482 Empty Nest Couples 2+ person HHs, No Children, 55-64 11910493104779697 Senior Couples 2+ person HHs, No Children, 65+ 13612610583116107113 Total 8910510011010493100 Source: Spectra BehaviorScape: Total Dollars/Spectra 2014 Nov (Spectra)/Homescan Product Library

5. Grape Juice General Demographics: Variables and Measures Demographic Variables % Total $Index Race White65.2%95 Black15.4%129 Hispanic13.8%110 Other5.6%86 Householder Income Under $10,0006.8%88 $10,000 - $19,99910.3%92 $20,000 - $29,9999.9%91 $30,000 - $39,9999.8%96 $40,000 - $49,9999.4%104 $50,000 - $74,99918.1%101 $75,000 - $99,99912.6%106 $100,000 or More23.2%109 Householder Age Age 18 - 243.7%89 Age 25 - 3417.9%119 Age 35 - 4418.9%109 Age 45 - 5418.3%91 Age 55 - 6418.1%94 Age 65 or More23.1%97 Age and Presence of Children Age < 615.0%203 Age 6 - 1717.8%96 Age < 6 & 6 - 1714.3%218 No Children52.9%78 Number of Persons 1 Person14.7%54 2 Persons30.5%94 3 Persons18.4%114 4 Persons19.2%145 5+ Persons17.3%155 Householder Education Grade School5.7%100 Some High School6.7%92 High School Graduate23.9%94 Some College29.6%103 College Graduate34.0%104

6. Demographic Variables % Total $Index% Total $Index% Total $Index% Total $Index Race of Head of Household White65.3%9558.9%8568.9%10065.7%95 Black13.7%11515.8%13216.4%13716.2%136 Hispanic15.2%12120.3%1619.0%7212.6%100 Asian3.5%822.1%493.6%832.9%68 Other2.3%1032.9%1302.1%952.6%115 Number of Persons 1 Person15.3%565.3%1926.8%9915.1%56 2 Persons32.7%10118.0%5628.9%8932.4%100 3 Persons16.8%10424.1%14913.5%8318.3%113 4 Persons17.8%13523.1%17618.0%13619.5%148 5+ Persons17.5%15729.4%26512.9%11614.8%133 Household Income Under $10,0006.3%834.7%617.3%957.0%92 $10,000 - $19,99910.0%909.8%886.3%569.5%85 $20,000 - $29,99910.2%9411.1%10210.4%9610.1%93 $30,000 - $39,99910.6%10512.1%1194.5%459.4%92 $40,000 - $49,9999.1%1028.9%994.8%539.8%109 $50,000 - $74,99917.0%9521.2%11814.7%8218.9%105 $75,000 - $99,99914.4%12112.8%10812.0%10112.0%101 $100,000 - $149,99915.6%12710.9%8825.0%20313.1%106 $150,000 or More6.6%748.5%9415.0%16710.3%114 Private Label Nestle R.W. Knudsen Welch's *Product Snapshot

7. Product Snapshot Analysis – United States Grape Juice more prominent among African American and Caucasian families. Large households purchase pattern – 5+ or larger – Start-up and Young-Bustling families Low to high income purchasers – Low income = purchase private label and Welch’s – High income = R.W. and Nestle Products Age popularity: 35+ purchasing more Aisle space limited

8. Grape Juice Category Role

9. Grape Juice Under Fire Gross Margins were relatively medium to low – Moderate number of facings average: 2-3 facings – Buying patterns scarce – Little to no deal – promotions scarce since price was already low – More national brands purchased Medium sales dollar volume – Sales average $100-200 million USD

10. Grape Juice in Fayetteville, Arkansas Walmart-(MLK) Harps -(Garland)

11. Category Role Table ITEM $ (000)DOLLAR SHAREITEM BUYERS (000) ITEM PENETRATION ITEM $ PER ITEM BUYER ITEM TRIPS PER ITEM BUYER ITEM $ PER ITEM TRIP % ITEM $ ON DEAL % DOLLARS WITH MANUFACTURER COUPON FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 340,435.1100.028,452.124.512.03.13.919.42.6 WEST SOUTH CENTRAL 29,533.3100.02,901.522.310.23.13.310.63.3 APPLE & EVE - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 3,088.30.9385.20.38.01.94.233.22.3 WEST SOUTH CENTRAL NA CTL BR - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 105,262.130.911,621.410.09.12.63.613.40.1 WEST SOUTH CENTRAL 10,333.935.01,329.510.27.82.63.05.80.0 DOLE - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 533.10.2180.90.23.01.81.73.70.0 WEST SOUTH CENTRAL NA JUICY JUICE - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. NA WEST SOUTH CENTRAL NA KEDEM - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 13,496.04.01,075.40.912.62.35.641.50.1 WEST SOUTH CENTRAL NA LANGERS - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 6,755.32.0825.90.78.21.65.025.92.2 WEST SOUTH CENTRAL NA MANISCHEWITZ - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. NA WEST SOUTH CENTRAL NA MINUTE MAID - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 1,631.30.5421.80.43.91.33.122.92.7 WEST SOUTH CENTRAL NA NESTLE JUICY JUICE - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 51,461.315.16,939.76.07.42.33.322.15.6 WEST SOUTH CENTRAL 3,474.011.8668.65.15.22.02.624.415.7 OLD ORCHARD - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 8,570.82.51,522.01.35.61.93.035.03.3 WEST SOUTH CENTRAL 1,002.23.4209.51.64.81.82.613.63.8 R W KNUDSEN FAMILY - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 1,572.20.5235.20.26.71.44.728.23.9 WEST SOUTH CENTRAL NA RUBY KIST - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. NA WEST SOUTH CENTRAL NA TROPICANA - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. NA WEST SOUTH CENTRAL NA VERYFINE - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. NA WEST SOUTH CENTRAL NA WELCH'S - FRUIT JUICE - GRAPE - SHELF STBL TOTAL U.S. 139,836.541.113,453.811.610.42.44.418.53.8 WEST SOUTH CENTRAL 13,920.047.11,425.811.09.82.44.010.62.8

12. Grape Juice Importance Grape Juice contributes to 16.53% market share of all juices – Total Consumption: 40,000,000 consumers USA – Avg Price: $3.15 – $3.15 x 40,000,000 = $126,000,000! Retailers loosing more money on private label rather than national brands – National brands competing in price and promotion – Brand recognition and brand loyalty However, there are more private labels present at store

13. Walmart (MLK) Walmart (Wedington) Harps (Garland) Ozark Natural Foods (College) Circular Trade Areas - Fayetteville

14. Circular Trade Area Walmart (MLK) – Majority white purchasers – 1 person households (majority) – 47.7% (College Students) – Under $20,000 income – Average Age: 18-34 – No Children – 84.9% – Large category management Walmart (Wedington) – Larger white presence – College students – low income and young age Harps (Garland) – Greater minority presence – More 1 to 2 people households – Income increasing ($20,000-$30,000) – Young household (18-34) – No children Ozark Natural Foods (College) – Largest white presence (84.8%) – 1-3 number of persons – Higher income – Older: 25-45 years – Children: Ages 6-17 prominent – Smallest category management but was precise

15. Category Assessment

16. Retailer’s Audited RetailerNumber of SKU’s$GMDate Audited Harps (Garland)17$1.25Oct 20 Harps (Wedington)15$0.85Oct 20 Walmart (Wedington)16$0.91Oct 18 Walmart (MLK)21$0.68Oct 18 Ozark Natural Foods (College) 3$4.64Oct 15 Walgreens (Rupple)6$1.16Oct 15 Total: 6 Locations and 52 SKU’s Noticed that Ozark had highest GM$ - Expensive prices / higher quality Private label products placed around national brands – weren’t focused primarily

17. Interesting Grape Juice Brands MFRBrand Name and Size Price$GM%GM Private LabelGreat Value – 64oz$3.68$1.1230.4% Natl. Grape Assoc.Welch’s – 64oz$3.53$1.1332.0% NestleJuicy Juice – 60oz$3.49$1.5745.0% Dr. Pepper/SnappleHI-C Grape – 60oz$2.98$1.5451.7% Type C Brands – high gross margin and cost Being sold frequently (Saw more natl. brands being purchased over private label) Natl. Brands gathered more brand awareness and loyalty – Past Purchasing

18. Lower Gross Margin Brands MFRBrand Name and Size Price$GM%GM Private LabelGreat Value – 64oz $2.08($0.48)-23.1% Private LabelGreat Value – 54oz $2.28($0.28)-12.3% Natl. Grape Assoc.Welch’s – 46oz$2.00($0.30)-15.0% Sunny Delight Corp. Sunny D Grape – 56oz $1.59($0.65)-40.9% Private Label brands struggling (Foil brands “dust” haven’t been sold) - Switched Customers used to shopping for natl. brands in Fayetteville area (College Students) Surprising to see some major brands suffering negative GM – Not selling/inventory

20. Category Strategy Harps (Garland and Wedington) – Natl. Grape Assoc. (Welch’s – 34.8%) and Private Label (37.0%) more prominent – 6 facings each – Had most facings in store (bulk of Grape Juice section) – Focused more on Natl. Label brands (College students buy via past purchase patterns) some buy via price Walmart (Wedington and MLK) – Focused more on their private label (Great Value – 48.7% and 34.4%) – However, Natl. Brands had large presence (41.0% and 33.3%) – Private label brands more centered Ozark and Walgreens (Wedington and College) – Larger presence on private label brands (100% and 40%)

21. Category

22. Category Tactics for $GM Harps (Garland and Wedington) – Greater focus on Natl. Brands “Best Margins” Natl. Grape = 34.4% and $1.22 mean GM Florid Family = 34.0% and $7.23 mean GM – Private labels suffered “Worst Margins” Private Label = 9.1% and $0.3217 mean GM Walmart (Wedington and MLK) – Greater focus on private label brand Great Value and others = 31.3% and 44.3% with mean GM of $0.5675 and $0.7938 – Natl. Brands close behind PepsiCo = 51.8% at $2.50 Natl. Grape = 19.1% at $0.3425 Small Locations (Walgreens - Wedington and Ozark - College) focus more on private label Private Label = 100% at $4.64 and 24.1% at $0.84

24. Category Tactics %GM Follows in suit of $GM – Harps – Focused on Natl. Brands over Private Label Witnessed higher GM due to past purchase patterns and brand recognition – Walmart – Introduced more private label (Best Choice and Great Value) but consumers purchasing natl. brands over private label (larger aisle space) Private label still making an impact for those who desire lower price and don’t care much about brand Found more deal on natl. brands over private label – Walgreens and Ozark Natural Foods Smaller stores and fewer SKU’s Focused on private label brands

25. Does Private Label Have A Place for Grape Juice? Yes and No – Why Yes? Yes for stores focusing on private label (Walmart with Great Value and Walgreens with De-Lish) Provide lower price to consumers More SKU’s Still provide gross margins to retailers – Why No? Natl. Brands have stronger purchasers than private label in Fayetteville Harder to sell to those who are “Brand Loyal” More deal on Natl. Brands. Natl. Brands making more gross margins to retailers

26. 2012 Data

27. 2014 Data

28. A Look Back Into The Past 2012 Audit File – Saw greater focus in private label brands – Average 6.5 facings – Customers purchasing more on low price/deal – National Brands important but weren’t selling as much – Category had more SKU’s and brands to select – Majority size was 64oz and avg. price was $3.23 2014 Audit File – Focus switched to national brands – Private labels decreased to 5 facings – New customers buying natl. brands based on past purchasing from family – Grape juice aisle decreased in size and SKU’s – Display more centered on natl. brands with little new products – Category overall decreasing – Store depicts which to concentrate on either natl. brands or PL (Walmart vs. Harps) – Witnessed foil brands driving consumers to natl. brands – New Sizes: 64oz still popular but 24oz, 32oz, 11.5oz made appearances (Children Size – Adapt to family) Avg. Price: $2.98