thesis defense presentation - the whitewave foods company

THESIS DEFENSEValeria Borovova

Anglo-American UniversityFaculty of Business Administration: Marketing Communications

Spring 2015

Prague, Czech Republic

Fresh

Produce

Valeria Borovova - Spring 2015 - AAU

Dairy

Products Organic and non-GMO

Plant-basedFoods and Beverages

Markets Served

Coffee

creamers

Focus

1. Business Overview2. The Strategic Question3. Financial Aspects4. Marketing Audit

4.1 PLEESTIC

4.2 Porter’s Five Forces

4.3 SWOT Analysis

4.4 Ansoff’s Matrix

5. Current Strategic Marketing Plan6. Critique7. Recommendations8. Conclusion


AgendaFocus


WhiteWave was established by Steve Demos

1977 1999

Dean Foods completed acquisition of WhiteWave

2002 2012-13

Two-step spin-off of WhiteWave is announced, and completed in 2013

Dean Foods bought 36% of the company‘s shares

1. Business Overview


1. Business OverviewNORTH AMERICA Beverages:

• Over 40 different tastes and typesCoffee creamers:

Beverages:• 14 tastes and types(no soy-based products)

Coffee/culinary creamers:

• 4 types (expected to grow due tothe increasing demand)

• 7 kinds Desserts, yogurt

alternatives:• 48 flavors, and types

EUROPE1. Business Overview


Beverages:• 22 different tastes and typesCreamers:• 3 culinary creamers

Desserts, yogurt alternatives:• 5 yogurt alternatives

• Purely organic• Beverages – 23• Creamers -1• Desserts yogurt alternatives - 22


What should be the WhiteWave Foods’ strategy in order to sustain its leading position in the US, and succeed in the European market?

Changing social and eating trends

-veganism -gluten-free -lose weight trends

Green marketing

Ability to recover fromDean Foods

Governmental regulations

2. Strategic Question

New types of consumers-social justice-ecology-sustainability


2014 2013

SALES 3,436.605 2,503.487

NET INCOME 140,185 99,041

Annual Summary Data (Millions - USD)

CURRENT RATIO 1.1 1.181

QUICK RATIO 0.494 0.642

DEBT-TO-EQUITY RATIO

1.409 0.689

INVENTORY TURNOVER

18.37 16.66

GROSS PROFIT MARGIN

33.56% 35.7%

Key Ratios

North America

Foods and Beverages+0.6%

Europe Foods and Beverages+2.3%

3. Financial AspectsPrice change

Productionvolume

Sale (tofuproduction line)


Organic and non-GMO

Foods and beveragesindustry

Political-Legal Environmental

Social-Cultural

Economic

Technological

International

4. Marketing Audit - PLEESTIC


Political- Legal EnvironmentalPossible labeling of GMO products

Environmental regulations• Energy• Pollution• Water

Political instability (prices on raw materials)

Unfavorable weather conditions

Emissions; carbon & climate change

Preservation of ecosystems



Social - CulturalChanges in eating habits-healthy eating-environmental conciousness- “lose weight”

Number of people with:• Lactose intolerance• Heart diseases

Environmental friendliness

EconomicDecrease in disposable income

Unemployment

Unstable interest rates




InternationalFluctuations in exchange rates

Copyrights and intellectual property rights

Strategic partner’s state of business

TechnologicalChanges in IT technologies

Data management

Success in R&D

+ Customers with special nutritional needs- Various products available

Impact of buyers – High- Increasing expectations- Price sensitivity

-Decide on shelf space-Low switching costs

Barriers to entry – Medium to High+ Organic certification+ Economy of scale-/+ Limited number of organic farms

Substitute products– Medium


Impact of suppliers – MediumLimited number of organic farms

+ Long-term contracts with several suppliers including organic farms- Constant audit isrequired

Internalindustry rivalry –

High- Product differentiation

Is difficult+ Strong brand name

is required

End customers

Mass merchendisers

4. Marketing Audit – Porter’s Five Forces


In-house R&D

Technological know-how

Strong Corporate Social Responsibility

Strengths

4. Marketing Audit – SWOT

Intensive market cannibalization

Reputation (Dean Foods)

High debt-to-equity ratio

Weaknesses


Cooperation with:• Meat-Free Monday program • First vegan school in the US• Hospitals

Increasing health conscious society worldwide

Opportunities

4. Marketing Audit – SWOT

Negative social attitudetowards soy-based products

Changing percentage of household expenditure on food

Threats


Present NewPr

esen

tN

ew

MAR

KET

PRODUCT

Market penetration• Product request app• The Grazing Mind BlogRecommended• Increase product availability by

cooperation with new distributors

Product development• Introduction of news products• Holiday edition product linesRecommended• Limited edition product offerings

Market developmentSeparate Webpage and customer care for Canadian marketRecommended• New distribution channels (Yoga clubs, gyms, schools, hospitals)

Diversification• Strategic partnership with

Donkin’ DonutsRecommended• Introduction of dairy free

ice-cream in Europe

4. Marketing Audit – Ansoff’s Matrix


5. Current SMP

QualityLeadership

PlaceLeadership

ProductPortfolio

management

StrategicPartnerships

EnvironmentalFocus

“Green”Education


Name Current position Position occupied at Dean Foods

Gregg L. Engles Chairman of the Board of Directors and Chief Executive Officer

Chairman of the Board of Directors and Chief Executive Officer(for over 19 years)

Kelly J. Haecker Executive Vice President and Chief Financial Officer

Senior Vice President and Treasurer

Edward F. Fugger

Vice President Strategy and Corporate Development

Senior Vice President, Corporate Development

Roger E. Thedoredis

Executive Vice President, General Counsel and Secretary

Vice President and General Counsel of the WhiteWave division

Thomas N. Zanetich

Executive Vice President,Human Resources

Executive Vice President,Human Resources

6. Critique


6. Critique

Soy Myths by Silk Milk

Promotion of benefits of soy-based products


7. Recommendations

Replacement of senior management who used to work at Dean Foods

Reduction of market cannibalization by repositioning the existing brands

Invest in market research to get a better understanding of target audience


7. Recommendations

Introduction ofplant-based ice-cream in Europe

ORGANIC

DAIRY FREE ICE-CREAM


7. Recommendations

New distribution channels – strategic alliances

Yoga clubs First veganschool

Hospitals Fitness centers


7. Recommendations

Increase in organically produced foods and beverages


7. Recommendations

Reduce dependency on soy-based products

7. Conclusion


Monitor external

and internalenvironment

Focus on Global

expansion

Search for new distribution channels

“Green” positioning

through traditional and online channels

7. Conclusion


Process

PositionParadigm

Product

• Superior products in terms of their composition and taste

• Implement the most sustainable production processes

• Effectively communicate the brand message and educate consumers about its promise.

• Communicate its values and principles in a creative and remarkable way


THANK YOU!


1. Why do you believe, (as you stated), that because different market forces affect the demand for dairy alternative products (products that are similar in taste and texture to but do not contain components of genuine dairy products), (Mosby, 2009), different marketing strategies need to be implemented in order to make them successful in the market? Which different marketing strategies do you recommend and why?


2. You state that you have identified various ways how the company can improve its performance in the future including changes in corporate governance, a reduction of market cannibalization by repositioning existing brands, investing in market research to achieve a clearer vision of the new products’ potential, an increased offering in Europe with the introduction of plant-based ice-cream, reaching new markets through strategic partnerships, and focus on organically produced food.Which of these do you recommend over the others and why?


3. How could the company win more customers especially in the Baby Boomers generation, which might be important in an aging society? What could it do to overcome the bias of older people (who are currently not considered as part of the main target group)?


4. How do you think could the company make use of the on-going discussion about GM food and crops concerning patent wars (i.e. Monsanto and farmers)?