Tuna, Is it Chicken or Fish?

Adam Hoffman Justin Hamby

Isaac Lane

Did You Hear About the Evil Tuna?

In the tuna category, all evidence indicates that Starkist is in complete control of the category.

They dominate: Shelf space (>50% in most stores) Revenue(>50%) Stocking rate(>34%)

A: Rumor has it he was rotten to the albacore.

Category Audit Depth

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40 Wm JoyceWm MLKWm SpringdaleNM MissionWalgreens TownshipHarp's GarlandHarp's FSHarp's WeddingtonHarp's CrossoverTarget FayettevilleAldi FayettevilleBig Lots FSDG GarlandWO GreggStores

SK

U's

Facings by GM

HWedF Mean N1 .487 112 .397 103 .372 24 .200 1Total .428 24

TJoyF Mean N1 .330 42 .443 133 .296 44 -.060 35 .327 16 .268 37 .174 28 .205 2Total .312 32

WMMLKF Mean N1 .3961 62 .3874 83 .2670 64 .2236 96 .3571 17 .1515 18 .1216 111 .3421 114 .1176 117 .2500 1Total .2980 35

Know Your Role, Tuna

Tuna in cans Core Traffic

Tuna in pouches Cash Machine

It’s Who We Are

Income Different brands target different incomes

Family Size High in families of 2+, but especially 5+

Children’s Age Highest when children between 13-17 are

present

Domination You Say? Tuna is a $100,000,000 category (as of

2007)

Starkist is dominant $50,000,000

Private Label is second highest $20,000,000

All other brands make up the remaining 28% of the category sales. Ex: Chicken of the Sea, Bumble Bee, etc.

  ITEM $

(000)

ITEM PENETRATIO

N

LOYALTY

(SHARE OF $ REQ.)

% ITEM $ ON DEAL

SEAFOOD- TUNA- SHELF STABLE 98,117.8 68.7 100.0 12.5

BUMBLE BEE - SEAFOOD- TUNA- SHELF STABLE 5,905.6 9.2 31.5 33.8

CHICKEN OF THE SEA - SEAFOOD- TUNA- SHELF STABLE

19,875.5 29.9 43.5 14.3

CTL BR - SEAFOOD- TUNA- SHELF STABLE

20,299.4 24.3 48.1 8.9

STAR KIST - SEAFOOD- TUNA- SHELF STABLE

50,486.0 44.8 64.6 10.7

VAN CAMP'S - SEAFOOD- TUNA- SHELF STABLE 760.6 1.7 20.6 0.5

Location, Location, Location

Starkist has the only SKU’s in double digit stores 11 Stores carry Light Tuna in Water 10 Stores carry Light Tuna in Oil

Stocking rates Starkist= 35% Bumble Bee= 29.4% Chicken of the Sea= 24.7% Private Label= 15%

Average GM vs. SKU’sManufacturer WMMLKGm WMJoyGm HFSFGm TJoyGmAWG Harps PL

Mean     .417  N     5  

Bumble Bee Foods LLC

Mean .2578 .2942 .588 .306N 7 6 2 2

Crown Prince Inc

Mean     .699  N     1  

Safcol USA, Inc

Mean     .368  N     1  

StarKist Foods Inc.

Mean .3013 .2920 .393 .312N 22 23 13 24

Target PL Mean       .313

N       6

Tri-Union Seafoods LLC

Mean .3557 .3590 .485  N 2 1 8  

Walmart PL Mean .3213 .3213    N 4 4    

Brand Score CardManufacturer WMMLK

WMJoy HFSF HCros

TJoyF

Bumble Bee GM 11.9% 12.4% 7.8% 4.2% 7.7%

SKUs 7 6 2 2 2

Facing% 13.6% 17.6% 6.3% 5.8%

3.7%

 

Starkist GM 75.3% 77.9% 39.1% 54.4% 74.4%

SKUs 22 23 13 13 24

 Facing% 53.2% 58.8% 41.3% 39.7%

72.9%

             

Chicken of the Sea GM 4.7% 1.7% 32.9% 33.3%

 

SKUs 7 3 9 5 N/A

 Facing% 5% 3.5% 28.6% 32.3%

 

Anything you can do, I can do better

Chicken of the Sea 42.97%

Starkist 36.99%

Bumble Bee 33.62%

Private Label 30.1%

Average Gross Margin Comparisons

Private Label

Private label tuna accounts for 20% of the categories revenue. That is second only to Starkist’s revenues.

All major retailers have some form of private label tuna fish. Harp’s: 37.6% Walmart: 31.29% Target: 24.3% Aldi: 10.6%

Private Label cont.

Private Label will have an increasing effect on the category due to their relatively low prices but competitive gross margins.

Smaller households have increased their purchase of private label, while larger households have decreased their purchases electing to go with name brand tuna.

Private Label Strategy (Wal-Mart)

Wal-Mart stocks 4 SKU’s of private label, 1 of which has 17 facings. We recommend that they introduce a higher quality/price private label. Premium Lite? (Sam’s Choice Tuna?)

We also recommend that they increase the number of SKU’s they offer in their current private label.

Private Label Strategy (Target)

More broad focus of private label. More SKU’s and spacing distributed to Private Label. More committed to Private Label.

Only stocks Starkist, Bumble Bee, and Private Label High dependence on Starkist (75% total GM)

Would more involvement in an additional brand affect total GM? Would this affect Private Label?

Private Label Strategy (Harps)

Small Spacing and SKU depth for Private Label. (4 SKU’s with 5 spacing's)

Higher GM on Private Label, but fewer SKUs.

Addition of higher quality Private Label?

Private Label Recommendations

Overall recommendation for retailers to invest more in private label pouches. Why? Higher Margins and (hopefully) increase

buying power. Reduce dependence on Starkist.

Focus on higher quality Premium lite type products to entice switching and to reduce brand loyalty.