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STORECHECK SEMINAR

24/03/2009

ROLAND VERMOOTE SALES DIRECTOR

Key driver…USP… To consider each brand as a self-financed business unit To develop a strong USP as a technological barrier to competetion To continously develop new products by:
Identifying universal consumer needs and offering a solution Inventing new product concepts rather than using existing ones Using a high degree of innovation, never ‘me-toos’
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Key driver…Obsession…

Quality
Raw materials : choice, selection and controls Tests before a new launch Freshness panel and Summer stop

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Group Key figures
7,4 billion € turnover in 2008 20.000 employees > 50 products Present in 7 categories:
pralines/spreadable/industrial pastry/chocolate snacks/dairy/drinks/pocket confectionery

15 plants 100% family owned company Self financed projects Leadership in :Italy, Germany & France
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Ferrero Belgium : Key brands

REGULAR ASSORTMENT - 15 PRODUCTS/BRANDS - 40 CONSUMER PACKS

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Ferrero Belgium : Key figures
113,7 Turnover
In million euros

108.0

growth .. N° 2 in the chocolate confectionery market Leader with Nutella, Ferrero Rocher and Kinder Seasonal products In 20 years Ferrero has multiplied by > 3 its turnover Double digit growth with same product portfolio

98.3

73.3

58.9

45.5 30.8

1987
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1991

1997

2002

2006

2007

2008

Ferrero Belgium : market results
BRING GROWTH IN THE MARKET !
TOP 16 (+3) : TURNOVER FOOD COMPANIES TOP 7 (+5) : ABSOLUTE GROWTH TOP 4 (+7) : RELATIVE TURNOVER GROWTH TOP 1 : GROWTH INDEX( Share of growth/marketshare €)

N° 1

N° 2

N°1 & 2

N° 2

….

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Ferrero Belgium : know-how

MARKET LEADER PRALINES EXPERTISE IN SEASON-MANAGEMENT
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EXPERTISE IN PROMOTION MANAGEMENT

Ferrero Belgium : Organisation <2003 Status

TRADE MARKETING = PROMO MANAGEMENT

KAM+FIELD

+

= EXPERIENCE COMMITMENT COVERAGE SERVICE PROMO DRIVEN

COMMERCIAL PLAN KAM + FIELD

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CASE « SUMMER »

DIAGNOSTIC
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REASON WHY ??

STATUS
1 ECONOMIC STATUS : FERRERO, A COMPANY WITH 2 DYNAMICS

2

TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

3

CONSUMER STATUS : TOP BRANDS WITHIN CATEGORY, BUT ……

4

SHOPPER STATUS : CATEGORY WITHOUT LIMITS, BUT…..

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1

ECONOMIC STATUS :FERRERO, A COMPANY WITH 2 DYNAMICS
Turnoversplit Ferrero 2006

SPLIT TURNOVER FERRERO
160 147 135

20,6%
113 103 91 93 111

71

70

66

79,4%
41

April-july August-March

January

February

March

April

May

June

July

August

September

October

November

December

Turnover '06

Ferrero monthly turnover driven by season: 80% of turnover in 8 months
But fixed costs during 12 months : sales force, warehouse, housing, ... Organisation: peaks and downs, technical unemployment,… Date sensitive business Monthly P&L
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1

ECONOMIC STATUS : FERRERO, A COMPANY WITH 2 DYNAMICS

Expertise and strength during season
REGULAR ASSORTMENT - 15 PRODUCTS/BRANDS - 40 CONSUMERPACKS

FRESHNESS POLICY
N°1 and driver of the category

SUMMERSTOP

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2

TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER
OUTPUT SUGAR&CHOCOLATE CONF. MARKET €: Index vs average
134 125 108 94 88 89 83 65 69 93 121 108 123

……

Sugar&Choc Market '06

w1-5

w6-9

w10-13

w14-17

w18-21

w22-25

w26-29

w30-33

w34-37

w38-41

w42-45

w46-49

w50-01

Confectionery and sweet products represents +/- 12% of FMCG turnover but during summer months dynamism drop-off (+/- 10%) : - less SKU’s => space on shopfloor/shelf/…. - less rotations linked to consumption habits …or abilities - trade priority : soft drinks, barbecue…..
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3

TOP BRANDS WITHIN CATEGORY, BUT ……FEW WITHOUT CHOCOLATE (quality risk) AND … HIGH TOP OF MIND , STILL INCREASING, BUT LOW RECRUITING …..

KINDER BUENO: CANDYBAR FOR YOUNG ADULTS TOPPER WITHIN CANDYBARS, BUT LINKED WITH KINDER CHOCOLATE AND SURPRISE CHILDREN IMAGE CHOCOLATE SNACK

THE SUMMER PRALINES (without chocolate) OF FERRERO: LOW AWARENESS

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4

SHOPPER: CONFECTONERY, A CATEGORY WITHOUT LIMITS

Only 48% of confectonery shoppers plan it!
the actual product that w as purchased 45%

30% a particular type

only the purchase of confectionery in general

20%

6% only the brand

0%

20%

40%

60%

in percent of cases

BUT CONFECTIONERY SHOPPER HAS NO EXCITEMENTS DURING SUMMER TIME
always (6)
12% 28% 32% 17% 9% 2%
5% 10% 15% 20% 25% 30% 35% %

When you see, you buy! What is the closure rate?

Very often (5) often (4) sometimes (3) Nearly never (2) never (1)
0%

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CASE « SUMMER »

OBJECTIVE

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Objectives:
1

360° Project evolving the whole company Create during the summer months, additional turnover for the category without hurting regular business Using the « Marketing Mix summer project » for brand building on the regular brands Create category dynamism : concept

2

3 4

AND
5

Create internal and external « goodwill » and « breakthrough » for the trade marketing dpt

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CASE « SUMMER »

THE PROJECT

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ACTION PLAN :
1 PRODUCTS: BESIDES OUR REGULAR RANGE, IN-OUT FOR 4 MONTHS SPECIFIC SUMMER PRODUCTS

2

MIX MEDIA ADVERTISING SUPPORT: USING NEW COMMUNICATION TOOLS TO COMMUNICATE PRODUCT DYNAMISM

3

NO PROMOTION SELLING BUT CONCEPT SELLING

4

DEVELOPPING FLOOR CONCEPTS : FROM HYPERMARKET TO PROXIMITY

5
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DYNAMICS OF ALL : FERRERO-TEAM

1

PRODUCTS: BESIDES OUR REGULAR RANGE, IN-OUT FOR 4 MONTHS SPECIFIC SUMMER PRODUCTS

SUMMER TASTE: IN-OUT PRODUCTS TO BRING DYNAMISM

SUMMER PRODUCTS: NO PROBLEMS WITH QUALITY WHEN SUMMER HEAT

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2

MIX MEDIA ADVERTISING SUPPORT: USING NEW COMMUNICATION TOOLS TO COMMUNICATE DYNAMISM OF PRODUCTS

Targeted projects with limited investments to create awareness and trial

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3

NO PROMOTION SELLING BUT CONCEPT SELLING

SUMMER APPROACH WAS THE OPPORTUNITY FOR TRADE-MARKETING TO DEEPEN A RELATIONSHIP WITH TRADE : Before: - Contacts where based on promotion and seasonal discussion - No launches in the last 5 years - Not perceived as full 360° supplier

Now: - Relationship based on facts and figures has been built : adding value to the category - Ferrero is now not only perceived as the company of Nutella, Christmas and Eastern but also as a full 360° supplier - Shopper love to eat confectionery products also in summer time

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4

DEVELOPPING FLOOR CONCEPT FROM HYPERMARKET TO PROXIMITY

HYPER PRODUCTS PRESENTATION DECLINED FOR ALL CHANNELS

SUPER PROXIMITY

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CASE « SUMMER »

RESULTS

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1

ECONOMIC STATUS :FERRERO, A COMPANY WITH CHANGING DYNAMICS Turnover increase 08 vs 06

SPLIT TURNOVER FERRERO

+49% +28%

20,6%

23,6%

79,4%

76,4%

April-july August-March

August-March

April-July

Turnover '06

Turnover '08

Turnover increased with 49% in 2 years, better split of turnover between months Increase of warehousing activities : +28% of cartons, +17% of pallets movement …
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2

TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

OUTPUT NIELSEN €: CHOC.&SUGAR CONF. Index vs Avg

134 130 121 Sugar&Choc Market '06 Sugar&Choc Market '08 108 107 93 123 115

85 81

87 83

89 88 81 65 77 69

w14-17

w18-21

w22-25

w26-29

w30-33

w34-37

w38-41

w42-45

w46-49

w50-01

The gap versus average decreases during april-june
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2

TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER MARKETGROWTH IN APRIL-JUNE

Market Ferrero Share

Output in Million € Output 06 Output 08 57,90 63,1 4,2 6,5 7,3% 10,3%

Growth 5,2 m 2,3 m 44,0%

% 9,0% 54,8%

• Market of Choc & Sugar Confectionery increased by 9% (vs + 5% YA) • Chocolate Confectionery now represents 11% of FMCG (vs 10% before – still 1% gap)

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3/4

CONSUMER/SHOPPER STATUS : TOP BRANDS WITHIN CATEGORY Results : + 19 % Output Open Market + penetration: 12.7->16.4 + 166.000 new consumers + purch.frequency 2.6=>3 … + 40% Output Open market + penetration: 11.7=>15.7 + 180.000 new consumers + 53%=>59% repeaters +… 2ND BRAND IN MARKET

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Ferrero Belgium : Trade Marketing Team
LISTEN
GFK Marketing Nielsen

UNDERSTAND
P&L

Quality Promotion Price Shelf Distribution

Supply Chain

COLLECT ANALYSE

Trade
Marketing

IT Promo
Analyses

Management

STRUCTURE
Finance

INFORM NOURISH/FEED INVOLVE ADDED VALUE

COMMERCIAL PLAN KAM + FIELD

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Related Interests