whole foods market pitch

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  • NEW BUSINESS PITCH

    Whole Foods, Whole People, Whole Planet.

    December 2016

  • NAME BRAND PITCH TYPE

    Media

    MARKET DATE

    November 21 , 2016

    The Data You Need to Win This Pitch

    DESCRIPTIONUpscale grocery store chain, Whole Foods Market, has launched a media agency review, according to sources.

    In its last annual report the company stated that advertising expenses totaled nearly $90 million in its fiscal-year 2015. Its estimated that the company spends about $65 million annually on media.

    Previously, the Austin-based Whole Foods had worked with GSD&M (also based in Austin) for media. Two years ago, GSD&M was the media agency that launched the brands first national ad campaign. New York-based creative agency Partners & Spade was tapped to develop the

    creative approach.

    Whole Foods' $65 Million Media Assignment Is In

    Review

    thU.S.

  • Client Profile / Market

    Whole Foods Market Inc. is an American supermarket chain exclusively featuring foods without artificial preservatives, colors, flavors, sweeteners, or hydrogenated fats. It is the United States' first certified organic grocer, which means it ensures, to National Organic Program standards, organic integrity of the heterogeneous products from the time they reach stores until they are placed in a shopping cart. It opened on September 20, 1980, in Austin, Texas, its current headquarters. As of September 2015, it has 91,000 employees and 431 supermarkets in the United States, Canada, and the United Kingdom, and has its main produce procurement office in Watsonville, California.

    As of 2015, founder John Mackey and Walter Robb are co-CEOs of the publicly traded company, with John Elstrott as chairman. In November 2016, the company announced that Walter Robb would be stepping down as co-CEO at the end of the year and would remain with the company as a director. It became a Fortune 500 company in March 2005 and is the 30th largest retailer in the U.S., based on 2014 revenue.

    FINANCIAL OVERVIEW- Source: AccessConfidential.com -

    COMPANY BACKGROUND

    MAIN COMPETITORS

    2015 Sales (mil)

    2015 Employees

    Employee Growth Percent

    Assets (mil)

    Net Income Growth Percent

    Sales Growth Percent

    15,390

    90,900

    +4.2

    -

    -

    +8.4%

    Ms. Natanya P. AndersonSenior Marketing Director, 365

    Mr. John MackeyCo-Founder and Chief

    Executive Officer

    DECISION MAKERS by

    Natanya.anderson@wholefoods.com

    John.mackey@wholefoods.com

  • U.S. Grocery Market

    $ 649B TOTAL SUPERMARKETSALES1.3% SALES GROWTH2011 - 20163.4M EMPLOYEDPEOPLE38K SUPERMARKETSIN US ($2 million or more in annual sales)

    - FMI.com -

    - Ibis World -

    - FMI.com -

    - FMI.com -

  • A Deeper Look into the Grocery Market

    consumers choose their primary grocer is becauseits conveniently located to where they live or work.

    #1 REASON$107.34Weekly Household Grocery Expense

    1.5Average # of Trips to Supermarkets per Week

    46,000 ftMedian StoreSize

    - FMI.com -

    - FMI.com -

    - FMI.com -

  • Warehouse Clubs are gaining ground in the retail space

    - NPD Group -

    $420B

    Warehouse Clubs added

    660kJobs between 2000 and 2015

    - NPD Group -

    Warehouse Clubs Sales in 2013

    WAREHOUSE CLUBSSALES GREW

    10.5xBETWEEN 1992

    AND 2013

    A National Bureau of Economic Research study has found that the evolution and growth of warehouse clubshave been the most significant influences on the retail

    sector over the last 15-20 years.

  • Retailers are extending beyond price and product selection in order to compete against each other, with more turning to innovation and experiential retailing to hold onto and grow market share:

    Retailers Innovations to Compete

    Krogerplans to invest

    $2.5 million to build aculinary center in

    Cincinnati where its headquartered in order

    to train the chefs inall its stores, and provide

    a forum for them toshare ideas andbest practices.

    Similarly, Walmartrecently debuted its

    Culinary & Innovation Center where it plans to

    develop new privatelabel and branded

    food items.

    SelectWhole Foods Markets

    feature amenities like a puttinggreen (Augusta, Georgia)

    and a spa (Boston),and some have

    bike repair stations.

    ShopRite in Morristown,New Jersey offers an

    in-store restaurant,juice bar, oyster bar

    and even a daycare centerfor parents with children

    in tow. A store in Hanover Township in New York

    includes a fitness studioand a cosmetologist

    on weekends.

  • Online Groceries

    IN THE US, ONLINE GROCERY PENETRATION IS EXPECTED TO INCREASE FROM 8% TO 26% FOR FRESH FOODS &16% TO 28% FOR PACKAGED

    Groceries (Fresh Food)

    Groceries (Package Food)

    Pet Food & Pet Supplies

    Baby / Kid Food Products & Infant Formulas

    Auto parts & accessories

    Large home appliances

    Home improvement items & tools

    Personal care & household products

    Sporting Goods

    Office & school supplies for home use

    Childrens Toys and Childrens Durables

    Home furnishings & Accessories

    Handbags & Accessories

    0% 10% 20% 30%

    Past 12 Months Next 12 Months

    2%

    30%

    13% 41%

    ONLINE GROCERIES MARKET SHARE OFOVERALL GROCERY SALES

    MILLENNIALS SHOP ONLINE

    YOUNGER MILLENNIALS (18-25)

    OLDER MILLENNIALS(26 - 34)

  • Couponing

    BRAND MARKETERS PRIMARY OBJECTIVES IN 2017

    Increase couponredemption 19%Increase couponredemption 19%

    Mobile Marketing & Planning Report - 3Cinteractive

    36% Coupon Deliveryreceived the strongest vote for a plan to grow mobile marketing impactMobile Marketing & Planning Report - 3Cinteractive

    40% consumers have left a store because they left their coupon at homeMobile Marketing & Planning Report - 3Cinteractive

    When asked what innovations theyd like to see when grocery shopping, consumers pointed topromotions and coupons customized to their personal shopping habits as the top improvement area.

    Mobile Marketing & Planning Report - 3Cinteractive

  • $15.4BSales 2015 % change

    +8.4%

    433 Stores across:96%

    4%

    U.S

    Others

    2014 Sales

    Average store size (2015)

    38,000 square feet

    Stats: Whole Foods Market

  • 65%SALES COME FROM PERISHABLES

    Stats: Whole Foods Market

    SAME-STORE SALESDROPPED

    2.5%IN FISCAL 2016

    This was the fourth consecutive quarterly decline. Whole Foods has been in its worst sales slump since

    2009.

    33%

    SALES COME FROM EXCLUSIVEBRANDS & PREPARED FOODS

  • Launch of 365 by Whole Foods Market

    Lower cost and convenience-focused

    store that offers mostly Whole Foods private-label items

    Has more automated and mobile checkout options, and provides other cost and time

    efficiencies.

  • DIGITAL COUPONS

    Fast Food industry in numbersTaking on a Value Strategy

    Whole Foods started an initiative to give out digital coupons as an incentive to price-conscious shoppers who would value the discounts and download the Whole Foods mobile app to get them.

    Whole Foods Market is the leading Apple Pay retailer in both transactions and sales

    LOYALTY PROGRAM10 percent off thenew membersfirst purchase

    One-time coupon good for 15 percent off any departmentand select free products1 2

    We are going to continue to maintain our standardsand promote our higher quality products.

    Promotions and price investments are becomingan integral part of our conversation, but we are

    not participating in a race to the bottom.

    A.C. Gallo, Whole Foods Market President & CEO

  • Whole Foods Marketing

    Whole Foods launched its first-ever national brand

    campaign in 2014

    Advertising Expenses in 2015

    $89M

    Our priorities include progressing to an always-on unified marketing and media plan, using insights from

    our customer data and analytics to improve the relevancy, effectiveness and efficiency of our value

    and marketing investments; intensifying our personalization efforts, including the roll-out of our

    optimized rewards program to all U.S. stores

    John MacKay, co-founder & co-CEO WFM

    Instacart, an internet-based grocery delivery service, offers fresh grocery delivery to more U.S. homes than any

    other food retailer

    PURPLE CARROT PARTNERSHIP

    In 2016, Whole Foods Market partnered with Purple Carrot to sell vegan meal kits in their

    stores. Its the first in-store point of sale for Purple Carrot, which until now has been purely

    e-commerce. The move is expected to appeal to the millennial market.

  • MILLENNIALGROCERY

    SHOPPERS

    QUICK DEFINITION:Millennial Grocery Shoppers

    Our Millennial Grocery Shopper demographic refers to millennial consumers shopping at Whole Foods top competitors, like Safeway, Kroger and Trader Joes.

    Weve excluded Whole Food Market fans in order to better highlight the differences between Whole Foods current

    fans and the consumers buying the competition.

    47%

    30%

    60%

    0

    90%

    13-17

    18-24 25-34 35-44 45-54 55-64

    67%FEMALE

    42%MARRIED

    62%WITH

    CHILDREN

    BEAUTY & WELLNESS

    168.3

    FOODIES

    167.9

    HEALTHCONSCIOUS

    144.4

    HOME DECORATORS & DIYs

    143.7

  • 83%

    Millennial Grocery Shoppers

    Compare the Millennial Grocery ShoppersDemographic with Whole Food