www.SantiagoSolutionsGroup.com • P: 818.736.5661
Driving Total Market Growth for
Manufacturers and Retailers
Building a Pl...
Unlocking sources of Total Market
growth
2
Consumer
Dynamics
Connectors
Nuances
Company
Core
What Business is Co in?
Who C...
Nuance Nuance
GREEN BEAN
CASSEROLE
MENUDO
3
Family Dinner
Refried Beans &
Tortilla Chips
CONNECTORS
Total Market growth hi...
Unearthing Connectors & Nuances
4
U.S. Palate Embraces Latin Food
Chinese
Italian
Mexican
Seafood
Steakhouse
40%
18%
29%
16%
16%
40%
21%
33%
15%
18%
Out-of-...
Evolving Palate Expands Share of
Plate Opportunity-Challenge
Bread/Pasta/Rice
Potato Chips &
Dip
Red Beans
Quinoa Couscous...
Traditional Ingredients Evolve
Traditional
Pork
Pozole
Chili
7
Veggie
Pozole de
Frijol
Quinoa with
Black Beans
and Hominy
...
.
8
Video
Home-cooking & Family dinner.
Need for variety & Openness to
new recipe ideas.
Healthy Eating Is Important To All
• A “Healthy” dinner is most important for 1st Generation Hispanics
• Significantly hig...
6%
6%
5%
23%
21%
Total…
WNH
Hispanic
Millennial
Mill M/C
Organic Buyers CAGR
Organic Is Accelerating
Perceptions
 Healthi...
Latinas are Most Open to
Purchasing New Convenience
Packaging Forms
 Shortcuts are OK, provided…
 Quality & taste
 No o...
Private Label Continues to Grow
From Pre- Recession Levels
The base of Hispanic Food PL
buyers is increasing 3x faster
tha...
13
.
Video
Healthy eating.
Convenience.
Strategic Implications
14
Leverage Connectors While Tailoring
to Pertinent Nuances
CONNECTORS
 Dinner means family gatherings
 Consumers thinking/...
Strategic Implications for Brands
Exploring consumer dynamics’ & alignment with
the company core guide strategic anchors
•...
Potential Size of Prize
Consumer Dynamics & Core-Adjacencies Analysis
Drive Total Market Incremental Opportunity
2013 2014...
18
$0.36
$0.56
$0.22
$0.13
$0.18
$0.22
$0.06
$0.10
$0.21
$0.50
$0.88
$0.45
$0.25
$0.30 $0.27
$0.13 $0.16
$0.11
NH HISP NH ...
Strategic Implications for Retailers
• Category Management
– Promote innovation
• New categories
• New brands
• New produc...
Thank You
Follow us Online
@Carlos_SSG
@Santiago_Group
LINKEDIN
Moderator
20
Bessie
Ramírez
Partner
Santiago
Solutions Gro...
Teasdale Quality Foods
21
• A portfolio company of Palladium Equity Partners
• Private Equity group of particular expertis...
Save Mart Supermarkets
• Founded in 1952
• 226 retail locations under
the Save Mart, Lucky,
S-Mart Foods, FoodMaxx,
and Ma...
Panel of Experts
Alberto
Bandera
Chief Executive
Officer
Beans & Hominy
Mfg: Branded,
Private Label &
Food Service
Carlos
...
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SSG driving Total Market Growth for retailers and manufacturers

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Santiago Solutions Group will show how to build a Total Market growth plan that is fueled by Hispanics & Millennials insights.

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SSG driving Total Market Growth for retailers and manufacturers

  1. 1. www.SantiagoSolutionsGroup.com • P: 818.736.5661 Driving Total Market Growth for Manufacturers and Retailers Building a Plan Fueled by Hispanics & Millennials August 15, 2013 Presented by: Carlos Santiago President & Chief Strategist
  2. 2. Unlocking sources of Total Market growth 2 Consumer Dynamics Connectors Nuances Company Core What Business is Co in? Who Co competes with? Ingredients, Production, Packaging, Channels Accelerated Growth Segments Best Prospects Total Market Growth
  3. 3. Nuance Nuance GREEN BEAN CASSEROLE MENUDO 3 Family Dinner Refried Beans & Tortilla Chips CONNECTORS Total Market growth hinges on “Double Plays” Key to unearth ‘Connectors’ –convergence of Hispanic, Millennials & NH consumer dynamics, aligned with company core, that accelerate profitable growth
  4. 4. Unearthing Connectors & Nuances 4
  5. 5. U.S. Palate Embraces Latin Food Chinese Italian Mexican Seafood Steakhouse 40% 18% 29% 16% 16% 40% 21% 33% 15% 18% Out-of-Home Eating Incidence by Type of Restaurant 2007 2012 Hispanic Food is 2nd most popular in the country, #1 West of Mississippi 2005 2012 2017 $5.4 $8.2 $10.7 Hispanic Food & Beverages Market Size in US Source: Hispanic Food & Beverage in the US 5th Edition 5 Source: SSG analyses of Scarborough USA+ r2 2007 - 2012 Millennials +6%
  6. 6. Evolving Palate Expands Share of Plate Opportunity-Challenge Bread/Pasta/Rice Potato Chips & Dip Red Beans Quinoa Couscous Pita & Hummus Tortilla Chips & Guacamole Black Pinto Garbanzo 6
  7. 7. Traditional Ingredients Evolve Traditional Pork Pozole Chili 7 Veggie Pozole de Frijol Quinoa with Black Beans and Hominy Bean and Hominy Potpie Hominy Bean Salad Hominy Chili with Beans Contemporary-Traditional • Lighter • Healthier • Quick one-dish • Fun
  8. 8. . 8 Video Home-cooking & Family dinner. Need for variety & Openness to new recipe ideas.
  9. 9. Healthy Eating Is Important To All • A “Healthy” dinner is most important for 1st Generation Hispanics • Significantly higher than 2nd generation Hispanics and NH White More home-cooking, Less Meat, More Grains and Beans Total Market 82% WNH 79% Hisp 1st Gen 90% Hisp 2nd Gen 80% Millennial 82% When I cook dinner it is important that it be Healthy (Top 2 Boxes) Source: Source: SSG-TQF Proprietary research Jan/Feb 2013 9
  10. 10. 6% 6% 5% 23% 21% Total… WNH Hispanic Millennial Mill M/C Organic Buyers CAGR Organic Is Accelerating Perceptions  Healthier, grown naturally  No pesticides, additives, chemicals  Good for workers in the field  Watchful of Price/Value relationship 10Source: SSG Analysis of Gfk-MRI, Spring 2006 – Fall 2012 Millennial & Multicultural Millennial fueling growth rate; Hispanic follows closely
  11. 11. Latinas are Most Open to Purchasing New Convenience Packaging Forms  Shortcuts are OK, provided…  Quality & taste  No one can tell  For “emergencies” 11 Likelihood to Purchase New Convenient Product – Top2 Boxes Total Market 57% WNH 51% Hispanic 1st Gen 65% Hispanic 2nd Gen 59% Millennial 53% Source: Source: SSG-TQF Proprietary research Jan/Feb 2013
  12. 12. Private Label Continues to Grow From Pre- Recession Levels The base of Hispanic Food PL buyers is increasing 3x faster than WNH 12 PL Buyer Base CAGR Buyer Incidence of Food Private Label By Segment All incidences have increased remarkably Source: SSG Analysis of Gfk-MRI, Spring 2006 – Fall 2012 • Millennial PL Food buyer base has exploded due to segment size increase as well as incidence increase • 3 in 4 consumers believe Private Label Products Have Improved in the Past Few Years* 51% 55% 43% 48% 39% 65% 70% 56% 61% 49% Total Market White NH Hisp Millennial M/C Mill Pre-Recession Post-Recession 1.7% 1.3% 4.1% 22.1% Total WhiteNH Hispanic Mill
  13. 13. 13 . Video Healthy eating. Convenience.
  14. 14. Strategic Implications 14
  15. 15. Leverage Connectors While Tailoring to Pertinent Nuances CONNECTORS  Dinner means family gatherings  Consumers thinking/planning meals in terms of recipes & experiences not isolated ingredients  Rising popularity of Mexican/Pan- Hispanic cuisine  Healthier lives from healthier eating  Convenience trumps price; Quality trumps convenience  Trust for brands is high, yet trust for PL has broadened NUANCES  Meal variety/ingredient evolution at different paces and expanses, i.e.:  Hispanic HH - Kids drive experimentation …pozole to minestrone soup  NH HH – rice to Quinoa  Category competition softer among Hispanics  Role of dinner is revered by all but more sacred to 1st generation  1st Gen Hispanics look for Convenience but call it “emergency”  Hispanics lag a bit behind Millennials & Non-Hispanics in PL, but growing faster 15
  16. 16. Strategic Implications for Brands Exploring consumer dynamics’ & alignment with the company core guide strategic anchors • Connectors that may unearth ‘Double Plays’ – Powerful insights in-common across current & most likely adopters • Nuances that will strengthen the context of the communications and promotions – Increased Brand relevance and resonance • Sources of incremental growth that can realistically lift the historic growth rate – Value added innovation – Adjacencies: Brand cross-sell, expanded occasions, new forms, recipes, packaging, expanded channels, leveraged capabilities • Ways to further differentiate the brand – Rational benefits –i.e.: convenience – Emotional reward –i.e.: more love & time for kids – Spiritual reward—i.e.: social impact • More precise target niches of most likely adopters geo-targeted promos - i.e.: Upscale Hispanics, healthy Millennials… 16 Capture the Biggest Opportunity Consumers Among Fastest Growth Segments
  17. 17. Potential Size of Prize Consumer Dynamics & Core-Adjacencies Analysis Drive Total Market Incremental Opportunity 2013 2014 2015 BAU Cons Dynamics Incr Opp Model Adjacencies Incr Opp Model +9% 4% 1.8% • Top growth potential acts on most aligned double-plays within redefined core -yields +9% Total Market CAGR lift over current trajectory (BAU) • Moderate growth scenario better leverages connectors & nuances in marketing strategies lifting growth rate by 4% vs. BAU • Business As Usual, unchanged trajectory, yielding +2% annual increase 17 Double Plays Sample
  18. 18. 18 $0.36 $0.56 $0.22 $0.13 $0.18 $0.22 $0.06 $0.10 $0.21 $0.50 $0.88 $0.45 $0.25 $0.30 $0.27 $0.13 $0.16 $0.11 NH HISP NH HISP NH HISP NH HISP NH HISP NH HISP NH HISP Radio (↑) TV (↑) Print (↑) Mobile (↑) Promo (↑)Trade (↑) Internet (↓)Total Marketing (↑) NH HISP Total Media (↑) NH HISP Recalibrating Marketing Effectiveness (ROI) Enhances overall Total Market growth Assessing what marketing vehicles, messages, promotions drive Total Market gains and which are less effective to optimize overall ROI 18 Sample SSG Market Mix Analysis
  19. 19. Strategic Implications for Retailers • Category Management – Promote innovation • New categories • New brands • New products • Incite Trial – Offer sampling – Provide easy full meal recipes of: • Trendy dishes • New uses for “old” ingredients – Promote value-add products with price-conscious consumers 19
  20. 20. Thank You Follow us Online @Carlos_SSG @Santiago_Group LINKEDIN Moderator 20 Bessie Ramírez Partner Santiago Solutions Group Econometrics Research, Analytics, Strategy & Growth ADD ICONS FOR TWEETER/LINKEDIN NEWSLETTER SUBSCRIPTION
  21. 21. Teasdale Quality Foods 21 • A portfolio company of Palladium Equity Partners • Private Equity group of particular expertise in food companies well positioned for growth in the Hispanic market • In business for over 70 years, TQF is a leading manufacturer of authentic canned dry pack beans, dehydrated beans and hominy • Offers a vast array of products to service key National Supermarket Chains, Hispanic Independent Retailers, major Foodservice distributors and Industrial customers Private Label Consumer Brands Foodservice
  22. 22. Save Mart Supermarkets • Founded in 1952 • 226 retail locations under the Save Mart, Lucky, S-Mart Foods, FoodMaxx, and Maxx Value Foods • Operates in Northern California and Nevada • 17,300 associates • $4.3B in annual sales 22 Box Store Conventional Conventional
  23. 23. Panel of Experts Alberto Bandera Chief Executive Officer Beans & Hominy Mfg: Branded, Private Label & Food Service Carlos Santiago President & Chief Strategist Consulting: Econo- metrics Research, Analytics, Strategy & Growth Implementation Chris Vasconcellos Senior Director of Center Store Retail: Conventional Market, Box Store & Limited Assortment 23
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