Bowl Appétit!

1. Bowl Appétit! Section 1 Team Number 1 Locker Number 87 November 19, 2001 Marketing Strategy Group: Tim Christie Ana Paula Guimaraes Andrea Heilman Fumiko Kotake Marcelo Rosenburg Raphael Yook

2. Agenda • Problem definition • Strategy and concepts recommendation • Revenue projection • Summary Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

3. Problemdefinition Lack of a sustainable growth model • Why? • Despite the good trial rates achieved, Bowl Appétit! failed to generate appropriate loyalty and repurchase rates. • Consumer feedback suggests that the low taste perception is the most important problem affecting these low repurchase levels. • Bowl Appétit!’s current target group is not the problem: • The target, busy moms and busy women, are well aligned with the findings on dry meals’ consumer profile. • Penetration among the non-Caucasian groups is low: however, these groups aren’t big enough to justify an ethnic-oriented strategy Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

4. Recommendations • Objective Generate maximum sustainable growth in single-serve, shelf stable food products revenues for the next three years. • Strategy Focus product efforts on repeat purchasesof Bowl Appétit!. • Concepts • “Make it more of a meal”Include vacuum-sealed vegetables to three varieties (two rice and one mashed potato SKUs) • “Make it taste better”Improve taste by adding spices or gravy to three varieties (one rice and two mashed potatoes SKUs). Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

5. + = Concept 1: Make it more of a meal! • Concept details • Add 2 oz. Vacuum-sealed (not dried) vegetables to: • Rice: Herb Chicken & Vegetables (peas and carrots); Cheddar Broccoli (broccoli) • Potato: Cheesy Broccoli (broccoli)Appropriate for vacuum sealed because these SKUs currently use dehydrated veggies. • Include vacuum sealed package inside the bowl. • Add instructions for preparation on back of package. Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

6. Concept 1: Make it more of a meal! • Consumer: • Focus group insight • Improve feeling of “substantial” – one consumer thought that BA was “more like a snack”. • Improve quality perception – one consumer in particular did not like the reconstituted broccoli bits in the mashed potatoes. • Consumer survey • 68% of consumers are changing their diet to include more fruits/vegetables (Food Marketing Institute Trends survey, 2000) • Bowl Appetit! has established psychographic market for convenience, now developing and refining the message to the demographic market (e.g. women, empty nesters). Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

7. Concept 1: Make it more of a meal! • Competitors • BA will be the only shelf-stable bowl-centric meal with vacuum-sealed veggies (however, competitors will follow if it is successful). • Company • Leverage assets of newly acquired Pillsbury – Green Giant • Green Giant brand equity for vegetables • Benefits from ingredient branding (e.g., Tyson’s chicken in Uncle Ben’s Bowls) • Position as quality product • Appearance of expensive ingredients. • Operational synergy • Technologically feasible • General Mills has the technology needed for such a concept * • No change in the distribution strategy • Product improvement, as opposed to a line extension *Source:Conversation with Peter McDonald Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

8. Concept 2: Make it taste better! • Concept details • Add gravy to: Sour Cream & Chives Mashed Potatoes; Butter & Herbs Mashed Potatoes • Bowl design change needed to ensure that gravy is an optional addition to the potato (see diagram below) • Powdered gravy will be added in a separate compartment, then both compartments will be sealed to prevent mixture. • Add water to both gravy and potato compartments. • Heat for three minutes. • Serve as desired. New Bowl Design Gravy Potato Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

9. or + = Concept 2: Make it taste better! • Concept details • Add spice to: Southwestern rice. • Southwestern cuisine is known for spicy flavors. The addition of Tabasco-style bottles/packets would add appeal. • Tabasco-type spicy sauce (0.25 oz.) will be added in the space between the bowl and the outside packaging. • Preferred sauce delivery system is the mini bottle (currently used by the US military). Alternative is foil package. Packaging for Spicy Concept Bowl External Packaging Tabasco mini bottle Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

10. Concept 2: Make it taste better! • Consumers: • Focus group insight • Improve taste – one consumer particularly liked the Southwestern rice but thought the inclusion of a Tabasco-style packet would be better. • Consumer survey • A consumer commented that the taste was “mediocre” (The Shopper Report, May 2001). • 89% considered taste “very important” (Food Marketing Institute, 2000). • Hot spices account for almost half of the country’s spice usage (“Hot spices are hot”, Prepared Foods, March 1999). • Mass Customization • Gives consumer control with the level of customizing the meal to their taste • Company • In alliance with General Mills’ core competency: shelf-stable products. • Both dry powder gravy and spicy sauces are shelf-stable. • Additional investments in bowl design. Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

11. Benefits Sustainable revenue growth Build on existing brands Betty Crocker Bowl Appétit Green Giant Focus group insights Makes vegetable meals more substantial Improves taste Stimulate re-trial Remains in the original unoccupied market Staging offering with potential future meat and other products Leverages expertise in shelf stable products Detractors Alienate existing repeat customers Price increase drive away consumer Confusion with brand image (JV) Draw competitors if successful Investments for bowl/packing changes Consumer too much time involvement Concepts 1 & 2 will increase repurchase rates Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

12. Supplemental strategy implementation • Incremental improvements cut across the whole line of Bowl Appétit! products. • Print suggestions instructions on adding spices and meat for more meal quantity/quality on the packaging • Cold/hot water – the trend is moving to Pret a Manger (ready to eat). Eliminating boiling [and hot] water is expected in the future 1 • The pasta line of products has been better received, therefore, no major modifications were made 2 • Staging offering for potential future meat introduction – rather than moving from one extreme end of the spectrum (no meat) to the other (meat), the use of an intermediary step can move consumer perception incrementally. • Source: 1. The Shopper Report, May 2001 • 2. Focus group and Nielsen Panel Data Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

13. Revenue Forecast Strategy sustainability driven from increase in number of repeat sales, while trial volume remains constant! Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook

14. Summary • Bowl Appétit!’s early success stems largely from the simple message of convenience and a delicious meal. • Next phase: increase consumer repurchase • Make it more of a meal! • Include vacuum-sealed vegetables: satisfies consumer’s interest in nutrition due to vegetable intake. • Make it taste better! • Add gravy or spicy sauce packets: satisfy needs of mass customization. • Result: revenue increase • Revenue projection: from $47 million to $81 million in 3 years • Compounded average growth: 20% over 3 years Tim Christie, Ana Paula Guimaraes, Andrea Heilman, Fumiko Kotake, Marcelo Rosenburg, Raphael Yook