JORDAN BRAINARD & ASHLEY JONES

Granola BarsSemester Project 2012

Introduction

STORES AUDITED (10) Wal-Mart (MLK & Bentonville) Target (Rogers & Fayetteville) Walgreens (Rogers & Fayetteville) Neighborhood Market (Bentonville &

Fayetteville) Harps (Fayetteville) ALDI (Fayetteville)

WHY WE PICKED THIS CATEGORY:Honestly, because we love them! We were interested in analyzing a category that we often shop for ourselves.

WHO IS IN CONTROL?The retailer

Category Depth

GENERAL INFORMATION: SKU’s: 119 Brands:

8 National Brands 6 Private Label Brands

WHO HAD THE DEEPEST ASSORTMENT? Wal-Mart (Bentonville) had the most SKU’s (69) Wal-Mart and Neighborhood Market had the most Facings Target had the most Private Labels variety (2)

In person felt they had the most variety

Depth Breakdown

Wal-Mart

Target

Walgreens

Neighborhood Market

Harps

ALDI

0 1020304050607080

BentonvilleRogersFayetteville

Number of SKU’s

Ret

aile

r

7 SKU’s

26 SKU’s 71

SKU’s62 SKU’s

15 SKU’s

14 SKU’s57 SKU’s62 SKU’s69 SKU’s64 SKU’s

Demographics

FAMILIES Bigger Families – Newly and Maturing Granola Bars are going to children Also popular among younger couples

INCOME Middle to Upper income Live comfortably

ETHNICITY More popular among Caucasians Asians seem to be more Brand loyal No substantial private label difference among other brands

EDUCATION Some college and college grad

Demographics

CTL BR - GRANOLA & YOGURT BARS

NAT VAL CW GR BR - GRANOLA & YOGURT BARS

NAT VAL GR BAR - GRANOLA & YOGURT BARS

QUAKER CHEWY - GRANOLA & YOGURT BARS

QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS

DOLLAR VOLUME

INDEX

DOLLAR VOLUME

INDEX

DOLLAR VOLUME

INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

TOTAL HOUSEHOLDS 100.0 100.0 100.0 100.0 100.0INC - $20,000-

29,999 81.6 75.7 58.8 73.7 60.5INC - $30,000-

39,999 118.3 87.4 90.2 84.1 116.3INC - $40,000-

49,999 122.8 101.0 110.6 98.9 102.1INC - $50,000-

69,999 119.7 129.5 121.7 134.1 139.3SIZE - 3-4 MEM 145.4 156.5 117.7 144.0 122.7SIZE - 5+ MEM 208.8 124.7 176.7 201.3 208.9

AGE FH - UNDER 35 175.5 187.3 152.5 157.6 150.3

AGE FH - 35-44 177.1 146.2 124.1 161.3 162.4AGE FH - 45-54 84.7 104.9 117.1 113.8 89.4AGE FH - 55+ 48.9 42.0 53.6 49.3 49.4

AGE FH - 55-64 54.5 56.0 67.2 59.3 67.8AGE FH - 65+ 44.4 30.8 42.7 41.4 34.7

CTL BR - GRANOLA & YOGURT BARS

NAT VAL CW GR BR - GRANOLA & YOGURT BARS

NAT VAL GR BAR - GRANOLA & YOGURT BARS

QUAKER CHEWY - GRANOLA & YOGURT BARS

QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

TOTAL HOUSEHOLDS100.0 100.0 100.0 100.0 100.0

AGE FH - NO FEMALE HEAD 53.5 57.7 79.0 51.4 83.7

KIDS - NONE < 18 58.8 66.7 80.2 66.0 70.4KIDS - ANY < 18 181.3 165.6 139.1 167.0 158.3

KIDS - ANY < 6 190.3 148.0 156.9 159.1 140.1

KIDS - ANY 6-12 197.6 177.4 133.5 175.6 186.0

KIDS - ANY 13-17 188.7 148.5 144.4 178.5 165.3LS - YOUNG SINGLES 120.0 205.6 102.8 70.9 44.7

LS - CHILDLESS YOUNGER COUPLES 119.8 140.2 189.7 147.8 112.8

LS - NEW FAMILIES 184.1 156.5 135.0 137.2 76.7

LS - MATURING FAMILIES 192.4 174.8 131.7 172.2 187.8

LS - ESTABLISHED FAMILIES 152.4 148.0 159.4 170.6 130.9

LS - MIDDLE AGED SINGLES 39.2 54.5 75.8 45.0 88.1

LS - EMPTY NESTERS 50.7 46.6 60.5 58.3 46.7

LS - OLDER SINGLES33.5 31.8 42.2 29.2 25.0

CTL BR - GRANOLA & YOGURT BARS

NAT VAL CW GR BR - GRANOLA & YOGURT BARS

NAT VAL GR BAR - GRANOLA & YOGURT BARS

QUAKER CHEWY - GRANOLA & YOGURT BARS

QUAKER CHEWY DIPPS - GRANOLA & YOGURT BARS

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

DOLLAR VOLUME INDEX

TOTAL HOUSEHOLDS 100.0 100.0 100.0 100.0 100.0LS - MATR FAM/POOR-GET

BY 160.7 96.1 104.9 117.6 144.9

LS - MATR FAM/LIV COMF-AFF 221.4 247.0 156.2 222.3 227.2

LS - EMPTY NEST/POOR-GET BY 41.6 55.1 37.8 40.1 51.2

LS - EMPTY NEST/LIV COMF-AFF 54.3 43.2 69.6 65.6 44.8

EMP - FH EMPLOYED 121.0 141.7 118.7 131.8 123.4EMP - FH NOT EMPLOYED 96.7 66.1 85.9 83.0 77.0

ED - FH NOT HIGH SCH GRAD 63.1 64.3 47.5 52.6 51.0

ED - FH HIGH SCH GRAD 105.5 80.0 79.5 93.0 110.9ED - FH SOME COLLEGE 111.9 125.9 117.6 119.8 96.0ED - FH COLLEGE GRAD 128.5 143.1 138.9 140.7 116.7

RACE - CAUCASIAN 107.7 104.9 96.5 107.2 111.9RACE - NON-CAUCASIAN 71.0 81.5 113.3 72.9 54.9RACE - AFRICAN AMER. 54.2 71.6 72.1 52.2 44.4

RACE - ASIAN 42.1 130.6 179.6 100.7 64.5RACE - OTHER RACE 105.8 84.0 160.7 98.1 68.9

ETH - HISPANIC 94.4 94.1 164.1 110.3 64.9

Which Brands Dominate?

WHO IS LEADING THE PACK? Nature Valley Quaker Private Label

Has potential to pass other leading brands

WHO IS FALLING BEHIND? Natures Path Casadian Farm Organic

Generating high gross margins, however only found at Wal-Mart and Neighborhood Market

Share of Display Space

Share of Display Space, Granola Bars

Manufacturer

Neighborhood Market BVILLE

FaceWal-Mart MLK

FaceTarget FAY

Face HARPS FaceWalgreens FAY

FaceKellogs % of Total

Sum1.00% 3.08% 3.39% 0.00% 0.00%

% of Total N 1.43% 3.17% 3.33% 0.00% 0.00%N 1 2 2 0 0

Nature Valley % of Total Sum

32.00% 33.85% 26.27% 48.00% 64.29%

% of Total N 31.43% 31.75% 26.67% 48.00% 64.29%N 22 20 16 12 9

Private Label % of Total Sum

23.00% 11.54% 23.73% 0.00% 14.29%

% of Total N 22.86% 11.11% 23.33% 0.00% 14.29%N 16 7 14 0 2

Quaker % of Total Sum

23.00% 32.31% 25.42% 52.00% 21.43%

% of Total N 21.43% 22.22% 25.00% 52.00% 21.43%N 15 14 15 13 3

Total % of Total Sum

100.00% 100.00% 100.00% 100.00% 100.00%

% of Total N 100.00% 100.00% 100.00% 100.00% 100.00%N 70 63 60 25 14

Nature Valley Quaker Private Label

Category Strategy

DEALS No evidence of a “deal” in Audits

BRAND PROMOTIONS Walgreens and Target did have “price cuts” on Nature Valley products

Gross Margins

PRIVATE LABELS COMPARABLE? Used about half the Unit2 costs for our Private Labels Adjusted Private Labels

HIGHEST GROSS MARGINS? Neighborhood Market Wal-Mart

LOWEST GROSS MARGINS? ALDI

Gross Margins

Estimated Gross Margins, Granola Bars

Manufacturer

Neighborhood Market BVILLE GM

%Wal-Mart

MLK GM%Target FAY

GM%HARPS GM

%Walgreens FAY

GM%Kellogs Mean 49.54% 43.92% 67.25% 0.00% 0.00%

N 1 2 2 0 0Nature Valley Mean 26.62% 27.50% 31.01% 36.77% 51.19%

N 22 20 16 12 9

Private Label Mean 52.81% 56.30% 35.17% 0.00% 46.82%

N 16 7 14 0 2

Quaker Mean 26.35% 26.39% 20.36% 44.96% 56.63%

N 15 12 15 13 3

Total Mean 34.31% 32.95% 32.01% 41.03% 51.74%

N 70 61 60 25 14

Market ScoreboardMarket Score Board, Granola Bars

ManufacturesNeighborhood Market BVILLE

Wal-Mart MLK Target FAY HARPS

Walgreens FAY

Kellogs GM% 49.54% 43.92% 67.25% 0.00% 0.00%  % of Total

Sum1.00% 3.08% 3.39% 0.00% 0.00%

% of Total N 1.43% 3.17% 3.33% 0.00% 0.00%N 1 2 2 0 0

Nature Valley GM% 26.62% 27.50% 31.01% 36.77% 51.19%  % of Total

Sum32.00% 33.85% 26.27% 48.00% 64.29%

% of Total N 31.43% 31.75% 26.67% 48.00% 64.29%N 22 20 16 12 9

Private Label GM% 52.81% 56.30% 35.17% 0.00% 46.82%  % of Total

Sum23.00% 11.54% 23.73% 0.00% 14.29%

% of Total N 22.86% 11.11% 23.33% 0.00% 14.29%N 16 7 14 0 2

Quaker GM% 26.35% 26.39% 20.36% 44.96% 56.63%  % of Total

Sum23.00% 32.31% 25.42% 52.00% 21.43%

% of Total N 21.43% 22.22% 25.00% 52.00% 21.43%N 15 14 15 13 3

Total GM% 34.31% 32.95% 32.01% 41.03% 51.74%  % of Total

Sum100.00% 100.00% 100.00% 100.00% 100.00%

% of Total N 100.00% 100.00% 100.00% 100.00% 100.00%N 70 63 60 25 14

MFR Brand Brand Variety0Private Label Walmart Great Value Sweet & Salty Almond0Private Label Walmart Great Value Sweet & Salty Peanut

0Private Label Walmart Great Value90 Calorie Chocolate Chunk

0Private Label Walmart Great Value Crunch Oats & Honey0Private Label Walmart Great Value Granola Bar Variety Pack

4Private Label Milliville Chewy Dipped Chocolate Chip4Private Label Milliville Chewy Dipped Peanut Butter

4Private Label MillivilleChewy Granola Bars Chocolate Chip

4Private Label MillivilleChewy Granola Bars

Peanut Butter and Chocolate Chip

4Private Label MillivilleChewy Granola Bars Variety Pack

4Private Label MillivilleFiber Now Granola Bars Oats And Chocolate

4Private Label MillivilleFiber Now Granola Bars Oats and Peanut Butter

4Private Label MillivilleSweet & Salty Nut Granola Bar Almonds

4Private Label MillivilleSweet & Salty Nut Granola Bar Peanuts

4Private Label Milliville Trail Mix Chewy Fruit & Nut Bars

•5 Great Value SKU’s (Wal-Mart) •10 Milliville SKU’s (ALDI)

Private Label TrendsGranola Audits 2011

Private Label TrendsGranola Audits 2012

YES! And they are growing…

•Retailers who gave a decent amount of shelf space to Private Labels had substantial Gross Margins.•Wal-Mart “Great Value” is competing with other brands with flavor and packaging.•Target is offering two Private Label brands with a variety of flavors and high quality packaging design. They are charging a premium price for Archer Farms.

• Wal-Mart – Great Value (9)• ALDI – Milliville (7)• Walgreens – Nice! (2)• Harps – Best Choice (8)•Target – Archer Farms & Market Pantry (15)

SUMMARY:•6 Private Label Brands•41 Private Label SKU’s•Private Labels have increased since last year’s audit

PRIVATE LABELS PRESENT?

Granola Audits 2011 Granola Audits 2012

Sales

Private Label National Brands

Sales

Private LabelNational Brands

Private Label Trends

Recommendations

Category is becoming more Retailer controlled Private Labels are becoming more significant within category Target and Wal-Mart have the highest gross margins and give more shelf space to their Private

LabelsTherefore, we would recommend that Harps increase emphasis on Private Labels because they

can obviously compete with national brands and generate high gross margins.

Harps on Garland Wal-mart on Joyce