So What’s Cooking In The Olive Oil Category?

By Cindy Beam & Michael Young

Introduction• Who is in control – retailer or brand?

– We say retailer with a few exceptions

WLM 6th St Face

HPS Garland

FaceAldi's 6th St. Face

IGA School Face

TFM Prom Face

N 8 3 3 2

% of Total Sum 16% 15% 7% 5%

% of Total N 13% 13% 6% 4%

N 4 1

% of Total Sum 5% 5%

% of Total N 6% 4%

N 2 1

% of Total Sum 3% 1%

% of Total N 3% 2%

N 3

% of Total Sum 2%

% of Total N 5%

N 6 2 2

% of Total Sum 9% 10% 7%

% of Total N 10% 9% 4%

N 2 4

% of Total Sum 7% 8%

% of Total N 9% 8%

N 1

% of Total Sum 1%

% of Total N 2%

N 5 4

% of Total Sum 9% 6%

% of Total N 8% 8%

Filippo

Share of Display (% Total sum = share of total facings & % Total N = share of SKU's)

Manufacturer

Bertolli

Carapelli

Colavita

Cookwell

Crisco

Davinci

De Cecco

N 1 1

% of Total Sum 1% 2%

% of Total N 2% 2%

N 2

% of Total Sum 2%

% of Total N 3%

N 1

% of Total Sum 1%

% of Total N 2%

N 6

% of Total Sum 9%

% of Total N 10%N 9 9 32 47

% of Total Sum 10% 41% 52% 78%

% of Total N 15% 39% 62% 82%

N 7

% of Total Sum 14%% of Total N 11%

N 7 5 2 6 7

% of Total Sum 18% 20% 100% 18% 16%

% of Total N 11% 22% 100% 12% 12%

N 1

% of Total Sum 2%

% of Total N 4%N 62 23 2 52 57

% of Total Sum 100% 100% 100% 100% 100%

% of Total N 100% 100% 100% 100% 100%

Gem

Lucini

Private Label

Star

Total

Newman'sOwn

Olivari

Other Only In 1 or 2 stores

Pompeian

Importance of DepthStore WLM 6th HPS Garland Aldi 6th IGA School TFM Prom# SKUs 62 23 2 52 57

• Depth is very important– Audited 15 stores– Total 181 SKUs– Depth has increased significantly– Depth seems to be tied more to target market

than competing stores

Typical Walmart SKU’s$0.35/ .oz

$0.30/ .oz

$0.28/ .oz

Typical Fresh Market SKU’s

$2.05/ .oz $0.76/ .oz

$1.76+/ .oz

Source: Spectra BehaviorScape: Total Dollars/Spectra 2013 Jan (Spectra)/Homescan Product Library

Affluent Suburban Spreads

Cosmopolitan Centers

95

Young TransitionalsAny size HHs, No Children, < 35

Older Bustling FamiliesLarge HHs with Children (6+), HOH 40+

Younger Bustling FamiliesLarge HHs with Children (6+), HOH <40

Small Scale FamiliesSmall HHs with Older Children 6+

Start-Up FamiliesHHs with Young Children Only < 6

TotalPlain Rural Living

Modest Working Towns

Struggling Urban Cores

Comfortable Country

Total

Senior Couples2+ person HHs, No Children, 65+

Empty Nest Couples2+ person HHs, No Children, 55-64

Established Couples2+ person HHs, No Children, 35-54

Senior Singles1 person HHs, No Children, 65+

Independent Singles1 person HHs, No Children, 35-64

109

125

131

100119 125 104 96 86 78

90

120

79

63

73

148 161 137 115 120 109

160 148 129 101 112 97

129 133 105 113 100 82

98 87 66 87 68 58

73 71 69 70 59 41

100 86 80 64 70 80

144 144 113 118 102 93

109 114 86 88 74 81

120 120 101 111 74 65

TOTAL OLIVE OIL (SHORTENING, OIL) OZ. Total Dollars BehaviorScape Framework

LifeStyle

BehaviorStage

144 127 112 131 99 75 112

Very High: 150+ High: 120-150

Category Role

• Flagship Option 2*– Maintain sales/increase profits

Sales Volume (000)

HH Penetration

Gross Margin**

Olive Oil Total U.S. $722,133.6 37.8 45%

West South Central $58,942.9 32.6 45%

* Robert Blattberg, PhD. (Consumer-Centric Category Management, pg.88)**Estimate based on the sample stores

ACN Olive Oils WSC 07

Strength of Leading Brand• Bertolli dominates

– Multiple SKUs at 10 of our 15 stores– ACN: Bertolli Item $s are 17% of US category– Average Gross Margin about 45%

Market Stocking Rate• Sum of store count / (#SKUs X #stores)

Brand Store count #SKUs X # Stores Rate

Bertolli 56 135 .41

Crisco 31 90 .34

Pompeian 39 120 .33

Gross Margin Estimates by BrandReport

ManufacturerWLM 6th St

GM%HPS

GarlandGM%Aldi's 6th St.GM%

IGA SchoolGM

%

TFM Prom GM

%Bertolli N 8 3   3 2

Mean 45% 42%   47% 43%Carapelli N 4 1      

Mean 51% 60%      Colavita N 2       1

Mean 30%       62%Cookwell N 3        

Mean 42%        Crisco N 6 2   2  

Mean 29% 38%   43%  Davinci N   2   4  

Mean   34%   45%  De Cecco N 1        

Mean 43%        Filippo N 5     4  

Mean 23%     54%  Gem N 1     1  

Mean 45%     71%  Lucini N 2        

Mean 60%        Newman'sOwn

N 1        Mean 28%        

Olivari N 6        Mean 41%        

Other N 9 9   32 47Mean 34% 41%   44% 46%

Pompeian N 7        Mean 44%        

Private Label

N 7 5 2 6 7Mean 56% 58% 49% 55% 46%

Star N   1      Mean   32%      

Total N 62 23 2 52 57Mean 41% 44% 49% 47% 46%

44.25% Gross Margins

55.5%, carried in two stores

36.67%

52.8% GM (93.3% store presence)

Is This Consistent with Your Role for the Category?

• Provides value for the customer by meeting their routine, or stock-up, needs.

– Various consumer uses

• Pricing among competitors.

• Promotion Characteristics– Healthier substitute for cooking oils

• Space Allocation

• Assortment Characteristics

Relationship Between Gross Margins & Depth

1 2 3 4 5 6 7 8 9$.00

$.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Walmart (6th St.) Number of Fac-ings and GM$

Number of Facings

Mea

n Gr

oss M

argi

n ($

)

WLM 6th St GM$

WLM 6th St Face N Mean1 6 $2.09

2 31 $3.04

3 14 $3.57

4 4 $1.51

5 1 $1.50

6 1 $2.68

7 3 $2.91

8 1 $2.54

9 1 $1.82

Total 62 $2.91

Relationship Between Gross Margins & Depth

1 2 3$.00

$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00

The Fresh Market Number of Facings and GM$

Number of Facings

Mea

n Gr

oss

Mar

gin

($)

TFM Prom GM$

TFM Prom Face N Mean1 37 $8.14

2 17 $5.82

3 3 $5.84

Total 57 $7.32

Relationship Between Gross Margins & Depth

1 2 3 4 5 6 7$.00

$.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

IGA (School Ave.) Number of Facings and GM$

Number of Facings

Mea

n Gr

oss M

argi

ns ($

)

IGA SchoolGM$

IGA School Face N Mean1 6 $4.00

2 21 $3.82

3 15 $3.80

4 5 $3.02

5 1 $2.41

6 3 $4.52

7 1 $3.69

Total 52 $3.77

Private Label Opportunities• How strong are private labels?

Products TOTALParent Folder % Penetration Index Quadrant

Colavita (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.7% 119 1.High Index / High Penetration

Botticelli (Shortening, Oil : Olive Oil) Oz. * Olive Oil 1.2% 118 1.High Index / High Penetration

Capatriti (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.7% 118 1.High Index / High Penetration

Bertolli (Shortening, Oil : Olive Oil) Oz. Olive Oil 6.0% 114 1.High Index / High Penetration

Filippo Berio (Shortening, Oil : Olive Oil) Oz. Olive Oil 6.8% 114 1.High Index / High Penetration

Star (Shortening, Oil : Olive Oil) Oz. Olive Oil 1.9% 111 1.High Index / High Penetration

Carapelli (Shortening, Oil : Olive Oil) Oz. Olive Oil 1.6% 110 1.High Index / High Penetration

Private Label (Shortening, Oil : Olive Oil) Oz. Olive Oil 18.8% 110 1.High Index / High Penetration

Pompeian (Shortening, Oil : Olive Oil) Oz. Olive Oil 5.1% 109 1.High Index / High Penetration

Crisco (Shortening, Oil : Olive Oil) Oz. Olive Oil 3.2% 107 1.High Index / High Penetration

Mazola (Shortening, Oil : Olive Oil) Oz. * Olive Oil 0.8% 100 1.High Index / High Penetration

Carbonell (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.5% 121 2.High Index / Low PenetrationCalifornia Olive Ranch (Shortening, Oil : Olive Oil) Oz. **

Olive Oil 0.3% 113 2.High Index / Low Penetration

Vigo (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.4% 111 2.High Index / Low Penetration

Delallo (Shortening, Oil : Olive Oil) Oz. *** Olive Oil 0.3% 110 2.High Index / Low Penetration

Goya (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.7% 109 2.High Index / Low Penetration

Da Vinci (Shortening, Oil : Olive Oil) Oz. *** Olive Oil 0.2% 106 2.High Index / Low Penetration

Racconto (Shortening, Oil : Olive Oil) Oz. *** Olive Oil 0.3% 101 2.High Index / Low Penetration

Napoleon (Shortening, Oil : Olive Oil) Oz. *** Olive Oil 0.2% 100 2.High Index / Low Penetration

Olivari (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.4% 97 4.Low Index / Low Penetration

Gem (Shortening, Oil : Olive Oil) Oz. ** Olive Oil 0.5% 91 4.Low Index / Low Penetration

Pampa (Shortening, Oil : Olive Oil) Oz. *** Olive Oil 0.3% 89 4.Low Index / Low Penetration

ACN Homescan Product Library

Private Label Opportunities• Stores Carrying P/L’s and their Gross Margins

– P/Ls make up over 30% of total dollar share of the US category ($216,278,900)

ManufacturerWLM 6th St

GM%HPS

GarlandGM%Aldi's 6th St.GM%

IGA SchoolGM%

TFM Prom GM%

Bertolli N 8 3   3 2

Mean 45% 42%   47% 43%

Private Label N 7 5 2 6 7

Mean 56% 58% 49% 55% 46%

Total N 62 23 2 52 57

  Mean 41% 44% 49% 47% 46%

Olive Oil Gross Margin % Trends

2011 2012 20130%

10%

20%

30%

40%

50%

60%

Recommendations on Private Label Use• Increase in-store cross

merchandising• Introduce low cost strategies to

enhance P/L image• Increase facings of higher GM%

P/L products…with limits• Introduction of premium P/L

products

QUESTIONS??