0
ENVISIONING THE FUTURE OF BEVERAGES
Another Decade of Change…

     FF&B Inc Confidential Use With Permission Only
       ...
NEIL KIMBERLEY
                        (914) 482 0534
                        NEILGKIMBERLEY@GMAIL.COM



            • Bo...
OBSERVATIONS
1.   The ability to exploit change is the
     ability to win




                                           ...
WINNERS HAVE EXPLOITED CONSUMER
         CHANGE
                                                                          ...
The Business Development Theory
                          BUT “WINNING” IS NEVER IMMEDIATE
                               ...
…AND CHANGE HAS NOT JUST BEEN IN PRODUCT

                    1999                                        2009
           ...
OBSERVATIONS
1.   The ability to exploit change is now
     the ability to win

2.   A Unique Idea is Not Enough




     ...
THE DRIVERS OF SUCCESS

          Attribute                                    Implication
1. Tenacious, but flexible     ...
BIG BEVERAGE HAS THE IDEAS AND PROCESSES…


   But innovation and
    incubation run counter to                          ...
COKE AND VENTURING

          Acquisition
          Approach                                 Investment
                  ...
NEW BEVERAGE DYNAMICS

        Entrepreneur View                                                                    Big Be...
OBSERVATIONS
1.   The ability to exploit change is the
     ability to win

2.   A Unique Idea is Not Enough

3.   Change ...
MAINSTREAM BEVERAGES ARE BEING SQUEEZED


 Medium Margin          Low Margin                                High Margin


...
SO, WHERE ARE WE GOING?


                                  Short Term
                                         2010
     ...
Short
                                                                          Term



    BRINGING THE PAIN
   Soft Dri...
KO VS PEP VS SWY VS KR VS WMT   Short
                                Term




                                   16
Short
                                                           Term
DPS VS HANS VS SWY VS KR VS WMT




          FF&B I...
Short
OIL PRICES                                              Term




                                                   ...
Short
                                                        Term
ALUMINUM PRICES




                                   ...
Short
                                                       Term
CONSUMER VALUE INDICATOR - COT




      FF&B Inc Confid...
Short
                                                                                           Term



CONSOLIDATING FOR...
Short
                                                                             Term



SLOWING INNOVATION
   Fewer in...
SO, WHERE ARE WE GOING?


                               Medium Term
                                   2011- 2012
       ...
Medium
                                                                       Term



A MARKETING MODEL FOR THE DIGITAL AG...
Medium
   TRADITIONAL BEVERAGE MARKETING                                                   Term


   APPROACH

           ...
Medium
                                                                                                            Term
  ...
Medium

        FEET ON THE STREET – GLACEAU
                                                                             ...
A NEW WORLD?                                                                             Medium
                          ...
Medium
                                                                            Term
        EVIL SUGAR

   New Tax is...
Medium
                                                                            Term



    DISTRIBUTOR LEVERAGE
   Dr...
Medium
                                                                       Term



OUTSIDERS TAKE AN INTEREST
   One o...
SO, WHERE ARE WE GOING?


                                  Long Term
                                 2012 – 2014
       ...
Long
                                                                                Term



LONG TERM
    Food is        ...
AN EXAMPLE OF A PROJECT LEVERAGING
  THIS THINKING

 Unmet
            Product               Effective                   F...
APPETITE SUPPRESSION IS
                     THE NEXT BIG DIET TREND

                                                    ...
THE 1ST APPETITE SUPPRESSION
                                BEVERAGE LAUNCHES FEBRUARY 2010
                             ...
ENVISIONING THE FUTURE OF BEVERAGES
Thank You!

              FF&B Inc Confidential
             Use with Permission Only
Upcoming SlideShare
Loading in...5
×

Envisioning The Future Of Beverages

1,948

Published on

Presentation looking at the various success factors behind success in beverage innovation, and the future of beverages in 2010 and beyond.

Published in: Economy & Finance
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,948
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
223
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Transcript of "Envisioning The Future Of Beverages"

  1. 1. ENVISIONING THE FUTURE OF BEVERAGES Another Decade of Change… FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  2. 2. NEIL KIMBERLEY (914) 482 0534 NEILGKIMBERLEY@GMAIL.COM • Born in the UK, • Brand Director on • Networking Why Would You Listen To Me? Why Am I Here? Who Am I? now live in Snapple 97 -00 Brewster, NY • Business • VP Strategy CSAB Development • Moved to the US at 00 - 07 21, went to GWU • I want your • Foray into thoughts and • Past careers ownership in 2008 opinions include Audio Engineering and • Started FF&B in 09 Advertising servicing private equity investors, • Last 18 years in beverage beverages entrepreneurs and Wall Street analysts 2 FF&B Inc Confidential Use With Permission Only contact neilgkimberley@gmail.com
  3. 3. OBSERVATIONS 1. The ability to exploit change is the ability to win 3 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  4. 4. WINNERS HAVE EXPLOITED CONSUMER CHANGE $5,000 $5,000 $4,100 $4,000 $3,600 $3,000 $2,000 $2,000 $1,600 $1,400 $1,000 $800 $375 $400 $237 $95 $- 4 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  5. 5. The Business Development Theory BUT “WINNING” IS NEVER IMMEDIATE Innovation Brand Volumes Since Launch Through 2007 120.0 100.0 80.0 Vol (288 oz EQ) 60.0 40.0 20.0 - Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year Year Year Year Year Year Year Year Year Year Year 10 11 12 13 14 15 16 17 18 19 20 Frappucino SoBe AriZona Snapple Source: Beverage Digest 2007 Glaceau Fuze Nantucket Nectars Propel Red Bull Hansens Rockstar 5 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  6. 6. …AND CHANGE HAS NOT JUST BEEN IN PRODUCT 1999 2009 Value Taste Consumer Function Innovation Drivers Fun Health Wellness Design Convenience Sociability Conversation Buzz More SKUs Retail Discipline Retail Distribution Consolidation Consolidation Commercial Drivers Relationships Tech-Based “Fact-Based” Selling Selling People Data For Fewer People Everything 6 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  7. 7. OBSERVATIONS 1. The ability to exploit change is now the ability to win 2. A Unique Idea is Not Enough 7 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  8. 8. THE DRIVERS OF SUCCESS Attribute Implication 1. Tenacious, but flexible • Strong enough to have management strength of conviction • Realistic enough to change when it is needed 2. Consumer Relevant • Easy to understand and Product Difference dimensionalize 3. Willingness to Drive own • Challenge conventions Distribution Strategy when needed 4. Effective Capitalization • Focus on the business, not the investors 6. The Right Marketing • Build a brand from a product 8 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  9. 9. BIG BEVERAGE HAS THE IDEAS AND PROCESSES…  But innovation and incubation run counter to Ineffective their business model Portfolio Strategy  Fear of failure  Slow to respond  Over-Analytical Ineffective  Impatient for success  Over-invest too early Incubation  Lack of Prioritization Strategy  Silo-ed Responsibility 9 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com 9
  10. 10. COKE AND VENTURING Acquisition Approach Investment Approach Glaceau, Fuze, NOS, Honest Tea, Zico, Illy The approach is a step in the right direction, but the brands are still vulnerable to the challenges that have always beset big beverage incubation. No Scale = No Focus 10 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com 10
  11. 11. NEW BEVERAGE DYNAMICS Entrepreneur View Big Beverage View Build To Flip Easier to buy than Innovate Maximize Keep Investors Growth No More Hopeful Minimize Profit Portfolio Fit Bathtub Millionaires When to hold, Set Up Bidding Overpay and Needs to be a when to fold? Underperform big idea Distributor View Portfolio Ease of 11 Ability to Support Fair Share of Value Incrementality Management FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  12. 12. OBSERVATIONS 1. The ability to exploit change is the ability to win 2. A Unique Idea is Not Enough 3. Change is Inevitable 12 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  13. 13. MAINSTREAM BEVERAGES ARE BEING SQUEEZED Medium Margin Low Margin High Margin Mainstream Beverages Health CSDs Functionality Water Milk Sports Tea Coffee Energy Juice Emerging 13 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  14. 14. SO, WHERE ARE WE GOING? Short Term 2010 - Bringing The Pain - Consolidating for Success - Slowing Innovation 14 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  15. 15. Short Term BRINGING THE PAIN  Soft Drink Businesses have performed well in the recession  Retailers will look to increase their share of value  Input costs increasing  Consumer buying power flat – and willing to compromise FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  16. 16. KO VS PEP VS SWY VS KR VS WMT Short Term 16
  17. 17. Short Term DPS VS HANS VS SWY VS KR VS WMT FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  18. 18. Short OIL PRICES Term 18 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  19. 19. Short Term ALUMINUM PRICES 19 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  20. 20. Short Term CONSUMER VALUE INDICATOR - COT FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  21. 21. Short Term CONSOLIDATING FOR SUCCESS Opportunites Risks Consolidated Less More Distance Split Model Model Dissonance from from the Boardroom to marketplace Shelf Ability to Be Held Hostage by Retailer Intimate Retailer Less Overhead Less Nimble, in Management Less Nuanced, Greater Portfolio Less Focused More Less Value Value 21 Available Available FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  22. 22. Short Term SLOWING INNOVATION  Fewer innovations likely  Small Beverage Co’s  Less Angel and Venture capital available  Big Beverage Co’s  More Risk Averse  Barriers to entry increasing  Distribution and Retail Consolidation  Consumer retrenchment 22  More Risk Averse FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  23. 23. SO, WHERE ARE WE GOING? Medium Term 2011- 2012 - New Model Marketing - “Evil Sugar” - Outsiders Take An Interest - Distributor Leverage 23 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  24. 24. Medium Term A MARKETING MODEL FOR THE DIGITAL AGE • Differentiation based in marketing • Vulnerable to price-oriented promotion Old Model • Awareness driven by one-way advertising • Availability bought • Differentiation based in product • Price-oriented promotion less effective New Model • Awareness built by consumer conversation • Availability earned 24 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com 24
  25. 25. Medium TRADITIONAL BEVERAGE MARKETING Term APPROACH Trial • Prioritizing Build Consumer and Availability alone Retailer Experience is not enough to of brand generate success • But generating trial and Awareness Availability Create a brand awareness are with target Get Distributors and considered consumers Retailers to carry your expensive and brand inefficient. 25 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  26. 26. Medium Term FEET ON THE STREET – RED BULL Red Bull has been the master of resourcing street level “Feet on the street” activity. Red Bull Micro Cell Plans and On Premise executes Creates unpaid local Manager bar/club Field exposure Marketing events • Coolers at radio stations Manager Field • Coolers at local tV news Sales • Locker rooms at local sports Manager Executes teams Key Account Nationally Links to Distributor Manager Mandated • Maintains link between Field microcell and distributor Sampling Off Premise • Develops driver sales people Manager Retail Events Plans and executes local sampling events at retail and 26 events FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  27. 27. Medium FEET ON THE STREET – GLACEAU Term Glaceau organized their model targeting the weakest links of the selling chain: Point of contact with retail.  Glaceau’s marketing model relied on product trial with retailers and consumers Distributor R Retailer Confidence e Visibility  Market Blitz Momentum H forced availability s u o Consumer m Events u  Developed distributor a r confidence n c  Visible sign of e commitment s Trial + Availability 27 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  28. 28. A NEW WORLD? Medium Term A New Approach To The Old Issue… Business Strategy Digital Activation Real Life Execution Product Efficient consumer delivery, Sales Calls Positioning Drive to store (co -marketing), Store Promotion Targeting Impel to purchase Sampling 28 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  29. 29. Medium Term EVIL SUGAR  New Tax is almost inevitable despite the inequities  Cause multiple complications for the industry  Will become a political football  The more we oppose, the more likely the tax will be poorly thought through 29 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  30. 30. Medium Term DISTRIBUTOR LEVERAGE  Drivers…  Scale  Tactical Opportunity  Vanity FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  31. 31. Medium Term OUTSIDERS TAKE AN INTEREST  One of the non-US global players will want to be bigger in non-alcoholic US beverages 31 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  32. 32. SO, WHERE ARE WE GOING? Long Term 2012 – 2014 - Food is Medication - The Big Shakeout - Customer Evolution 32 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  33. 33. Long Term LONG TERM Food is The Big Customer Medicine Shakeout Evolution • The next level • Ineffective • Fewer, more of functional pricing and powerful products promotional customers at • Nutrigenomics models put the top • Greater multiple • Multiple Understanding retailers in smaller of Diet” jeopardy customers in • Real, • Failure of emerging Believable inefficient channels at approach to retailers the bottom healthy results in even greater consolidation 33 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  34. 34. AN EXAMPLE OF A PROJECT LEVERAGING THIS THINKING Unmet Product Effective Flexible New Model Consumer Execution Capitalization Sales Marketing Need Trial PhyGital Marketing Availability Awareness 34 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  35. 35. APPETITE SUPPRESSION IS THE NEXT BIG DIET TREND Even diet plans have begun to address the appetite suppression need… •Research identifies that “Focus is shifting Weight Loss Programs appetite towards foods and • Example: Weight Watcher’s Momentum featuring suppression is beverages that can Hungry a key need be digested more • “Control Hunger, Beat Temptation, Stop Dieting, for dieters, slowly, reducing Start Living” but there is a hunger pangs lack of between meals and Weight Loss Books effective food allowing dieters to • The Volmetrics Weight or consume less.” Control Plan supplements • “Feel Full on Fewer Calories” - AND NO BEVERAGES! FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com
  36. 36. THE 1ST APPETITE SUPPRESSION BEVERAGE LAUNCHES FEBRUARY 2010 Brooke Burke - Spokesperson Winner – Dancing with the Stars Host – Making the Band  underWAY is simple CEO Modern Mom Magazine and effective  Dow Superfiber stops “gastric emptying” - increases feeling of stomach fullness - without gas or bloating  Low GI Sweeteners stop insulin and blood sugar spikes that tell underWAY will drive awareness the brain you are through significant TV, Outdoor and hungry PR support at introduction and on an ongoing basis.  B Vitamins increase energy levels 36 FF&B Inc Confidential Use With Permission Only Contact neilgkimberley@gmail.com More at www.under-way.com underWAY - The healthy way to put hunger on hold™…
  37. 37. ENVISIONING THE FUTURE OF BEVERAGES Thank You! FF&B Inc Confidential Use with Permission Only
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×