artificial sweeteners
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Artificial SweetenersAndy BrownTyler Clark
Summary
• Introduction•Category Depth•Strength of Brands•Private Label
Introduction to Artificial Sweeteners•Over $606m annual revenue•29.6% item penetration
•Mid level supplier control
•Category dominated by a few strong national brands
•Mid to low level private label activity
Category Depth
Retailer Total SKUs
Unique SKUs
Walmart 43 21
Harps 48 22
Walgreens 10 2
Target 6 1
Aldi 3 3
Total 75 49
*Unique SKU found ONLY at one retailer, may appear in more than one store.
Walmart HarpsWalgreensTarget Aldi0
10
20
30
40
50
60
Staple SKUs Unique
Category Audit Findings
•10 stores audited•75 SKUs found•28 brands found•49 unique SKUs found across 5 retailers
•Slow growth of SKUs•Driven growth in brands/trends
Harp’s on Garland
Walmart NHM on Weddington
Category DemographicsAd Hoc Demo
Private Label Equal Fasweet Splenda Sweet’N Low
2007 2007 2007 2007 2007TOTAL HOUSEHOLDS 100.0 100.0 100.0 100.0 100.0
INC - <$20,000 142.1 77.6 105.1 72.8 113.5INC - $20,000-29,999 112.1 101.6 174.7 83.3 101.0INC - $30,000-39,999 96.6 102.8 132.8 82.1 91.1INC - $40,000-49,999 105.4 73.0 119.7 102.4 118.3INC - $50,000-69,999 97.0 90.3 105.9 106.2 98.7INC - $70,000-99,999 83.9 132.1 40.2 114.7 101.9
INC - $100,000+ 68.5 113.5 58.6 128.2 82.1
SIZE - 1 MEM 81.2 68.9 98.5 62.8 82.6SIZE - 2 MEM 121.1 125.0 172.6 130.3 125.2
SIZE - 3-4 MEM 103.5 89.6 35.1 105.8 91.0SIZE - 5+ MEM 71.7 130.4 69.3 82.6 92.2
AGE FH - UNDER 35 77.5 38.3 55.8 71.5 43.1
AGE FH - 35-44 84.4 82.5 58.5 88.6 84.0AGE FH - 45-54 120.6 119.3 38.3 115.1 105.8AGE FH - 55+ 114.7 157.1 191.9 129.2 153.5
AGE FH - 55-64 110.0 148.7 209.5 138.0 157.1AGE FH - 65+ 119.4 165.7 174.0 120.3 149.8
AGE FH - NO FEMALE HEAD 90.7 68.1 103.8 77.6 81.3
Category DemographicsAd Hoc Demo
Private Label Equal Fasweet Splenda Sweet’N Low
2007 2007 2007 2007 2007
START UP FAMILIES 111.0 80.5 19.9 82.2 71.7
SMALL SCALE FAMILIES 95.7 74.0 43.2 85.0 62.5
YOUNGER BUSTLING FAMILIES 79.0 38.1 64.1 82.9 52.5
OLDER BUSTLING FAMILIES 76.9 139.5 23.5 97.9 112.3
YOUNG TRANSITIONALS 57.6 30.0 64.5 67.4 27.6
INDEPENDENT SINGLES 78.8 56.9 140.7 60.2 86.0
SENIOR SINGLES 97.3 107.9 25.5 72.5 98.0
ESTABLISHED COUPLES 135.1 113.4 54.4 131.9 105.8
EMPTY NEST COUPLES 122.5 158.9 270.2 157.4 173.8
SENIOR COUPLES 124.8 196.8 265.5 144.9 188.2
Category Demographics Summary
•No significant difference between brands•Artificial sweetener shopper tends to be older, empty
nester couples▫Could be because of dietary needs
Manufacturer Walmart - MLK Walmart - Joyce Walmart NHM Walgreens -
Township Target
Cargill(Truvia)
Mean GM% 23% 23% 43% 30% 22%% of Total SKUs 10% 8% 12% 7% 16%# of SKUs 4 4 2 1 1
Cumberland Packing(Sweet N’ Low)
Mean GM% 10% 10% 10% 27% 16%% of Total SKUs 3% 3% 4% 13% 12%# of SKUs 3 3 3 2 1
McNeil Nutritionals(Splenda)
Mean GM% 34% 35% 33% 52% 31%% of Total SKUs 47% 47% 57% 48% 46%# of SKUs 13 15 13 4 2
Merisant US(Equal)
Mean GM% 5% 5% 7% 46% 28%% of Total SKUs 1% 0% 1% 11% 20%# of SKUs 1 1 1 1 1
Private LabelMean GM% 30% 30% 31% 45% 8%% of Total SKUs 26% 21% 25% 11% 6%# of SKUs 8 8 6 1 1
OtherMean GM% 18% 26% 8% 45% % of Total SKUs 13% 21% 1% 11% # of SKUs 7 9 1 1
TotalMean GM% 26% 28% 28% 43% 23%% of Total SKUs 100% 100% 100% 100% 100%# of SKUs 36 40 26 10 6
Gross Margin %
Category RoleITEM $ (000) DOLLAR SHARE ITEM
PENETRATION% REPEAT BUYERS
% ITEM $ ON DEAL
SUGAR SUBSTITUTES $606,156.08 100.0 29.6 60.0 15.7Private Label $68,773.02 11.4 5.5 51.0 6.9Equal $62,299.68 10.3 3.4 43.7 20.5Fasweet $544.59 0.1 0.1 35.1 16.4Splenda $348,378.14 57.5 16.9 49.5 17.2Sweet’N Low $66,770.00 11.0 6.4 51.1 12.7
•Cash machine•Mid-level volume•Good gross margins
Manufacturer Walmart - MLK Walmart - Joyce Walmart NHM Walgreens -
Township Target
Cargill(Truvia)
% of Facings 11% 10% 8% 10% 17%% of SKUs 12% 12% 6% 10% 14%# of SKUs 4 4 2 1 1
Cumberland Packing(Sweet N’ Low)
% of Facings 8% 8% 12% 20% 17%% of SKUs 10% 6% 6% 20% 14%# of SKUs 3 3 3 2 1
McNeil Nutritionals(Splenda)
% of Facings 36% 38% 50% 40% 33%% of SKUs 37% 38% 49% 40% 29%# of SKUs 13 15 13 4 2
Merisant US(Equal)
% of Facings 3% 3% 4% 10% 17%% of SKUs 2% 2% 4% 10% 29%# of SKUs 1 1 1 1 1
Private Label% of Facings 22% 20% 23% 10% 17%% of SKUs 25% 20% 30% 10% 14%# of SKUs 8 8 6 1 1
Other% of Facings 19% 23% 4% 10% % of SKUs 14% 21% 4% 10% # of SKUs 7 9 1 1
Total% of Facings 100% 100% 100% 100% 100%% of SKUs 100% 100% 100% 100% 100%# of SKUs 36 40 26 10 6
Category Depth
Share of Facings
Brand Dominance
•Splenda has almost 60% of total category revenue• It also dominates shelf space in stores
ITEM $ (000) DOLLAR SHARE ITEM PENETRATION
% REPEAT BUYERS
% ITEM $ ON DEAL
SUGAR SUBSTITUTES $606,156.08 100.0 29.6 60.0 15.7Private Label $68,773.02 11.4 5.5 51.0 6.9Equal $62,299.68 10.3 3.4 43.7 20.5Fasweet $544.59 0.1 0.1 35.1 16.4Splenda $348,378.14 57.5 16.9 49.5 17.2Sweet’N Low $66,770.00 11.0 6.4 51.1 12.7
Manufacturer Walmart - MLK Walmart - Joyce Walmart NHM Walgreens -
Township Target
Cargill(Truvia)
Mean GM% 23% 23% 43% 30% 22%% of Total SKUs 10% 8% 12% 7% 16%# of SKUs 4 4 2 1 1
Cumberland Packing(Sweet N’ Low)
Mean GM% 10% 10% 10% 27% 16%% of Total SKUs 3% 3% 4% 13% 12%# of SKUs 3 3 3 2 1
McNeil Nutritionals(Splenda)
Mean GM% 34% 35% 33% 52% 31%% of Total SKUs 47% 47% 57% 48% 46%# of SKUs 13 15 13 4 2
Merisant US(Equal)
Mean GM% 5% 5% 7% 46% 28%% of Total SKUs 1% 0% 1% 11% 20%# of SKUs 1 1 1 1 1
Private LabelMean GM% 30% 30% 31% 45% 8%% of Total SKUs 26% 21% 25% 11% 6%# of SKUs 8 8 6 1 1
OtherMean GM% 18% 26% 8% 45% % of Total SKUs 13% 21% 1% 11% # of SKUs 7 9 1 1
TotalMean GM% 26% 28% 28% 43% 23%% of Total SKUs 100% 100% 100% 100% 100%# of SKUs 36 40 26 10 6
Gross Margin %
Gross Margin %•Category average GM% = 28%•Started off by estimated lowest gross margin at 6%
ScorecardArt. Sweetener Scorecard - Spring 2012
ManufacturerWalmart -
MLK Walmart -
Joyce Walmart NHM
Walgreens -Township
Target
Cargill(Truvia)
% of Facings 11% 10% 8% 10% 17%% of SKUs 12% 12% 6% 10% 14%Mean GM% 23% 23% 43% 30% 22%# of SKUs 4 4 2 1 1
Cumberland Packing(Sweet N’ Low)
% of Facings 8% 8% 12% 20% 17%% of SKUs 10% 6% 6% 20% 14%Mean GM% 10% 10% 10% 27% 16%# of SKUs 3 3 3 2 1
McNeil Nutritionals(Splenda)
% of Facings 36% 38% 50% 40% 33%% of SKUs 37% 38% 49% 40% 29%Mean GM% 34% 35% 33% 52% 31%# of SKUs 13 15 13 4 2
Merisant US(Equal)
% of Facings 3% 3% 4% 10% 17%% of SKUs 2% 2% 4% 10% 29%Mean GM% 5% 5% 7% 46% 28%# of SKUs 1 1 1 1 1
Private Label
% of Facings 22% 20% 23% 10% 17%% of SKUs 25% 20% 30% 10% 14%Mean GM% 30% 30% 31% 45% 8%# of SKUs 8 8 6 1 1
Other
% of Facings 19% 23% 4% 10% % of SKUs 14% 21% 4% 10% Mean GM% 18% 26% 8% 45% # of SKUs 7 9 1 1
Total Mean GM% 26% 28% 28% 43% 23%# of SKUs 36 40 26 10 6
Gross Margins and Display Space
•Most brands’ display space is proportionate with respect to the GM
•Truvia’s GM is about 25% but is only getting around 10% display space at stores
Strength of Private Label
•Overall category private label strength is limited•GMs aren’t very high relative to competing brands
•Walmart has most active PL strategy▫PL’s compete with leading brands on display space and
GMs•Other retailers focus less on PLs due to lower GMs
•PLs are seen as a way to induce competition among suppliers, but retailers aren’t really committed to them
ScorecardArt. Sweetener Scorecard - Spring 2012
ManufacturerWalmart -
MLK Walmart -
Joyce Walmart NHM
Walgreens -Township
Target
Cargill(Truvia)
% of Facings 11% 10% 8% 10% 17%% of SKUs 12% 12% 6% 10% 14%Mean GM% 23% 23% 43% 30% 22%# of SKUs 4 4 2 1 1
Cumberland Packing(Sweet N’ Low)
% of Facings 8% 8% 12% 20% 17%% of SKUs 10% 6% 6% 20% 14%Mean GM% 10% 10% 10% 27% 16%# of SKUs 3 3 3 2 1
McNeil Nutritionals(Splenda)
% of Facings 36% 38% 50% 40% 33%% of SKUs 37% 38% 49% 40% 29%Mean GM% 34% 35% 33% 52% 31%# of SKUs 13 15 13 4 2
Merisant US(Equal)
% of Facings 3% 3% 4% 10% 17%% of SKUs 2% 2% 4% 10% 29%Mean GM% 5% 5% 7% 46% 28%# of SKUs 1 1 1 1 1
Private Label
% of Facings 22% 20% 23% 10% 17%% of SKUs 25% 20% 30% 10% 14%Mean GM% 30% 30% 31% 45% 8%# of SKUs 8 8 6 1 1
Other
% of Facings 19% 23% 4% 10% % of SKUs 14% 21% 4% 10% Mean GM% 18% 26% 8% 45% # of SKUs 7 9 1 1
Total Mean GM% 26% 28% 28% 43% 23%# of SKUs 36 40 26 10 6
Future of Private Label
•PLs are decreasing in importance to category▫Although Walmart’s PL strategy seems to be consistent
•Our recommendation to Walmart:1. Decrease role of PL in category2. Increase % of shelf space to Splenda and Sweet N’
Low3. Increase promotional with Splenda4. Negotiate better price deals with Cumberland
Packing (Sweet N’ Low) to increase GM
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