Il modern trade in italia il caso findus

1. Findus Italy Findus Italy e il business dei Frozen Foods Master MUM – Università La Sapienza 9 maggio 2011 Fabrizio Cannizzaro – Operations & IT Director 6/27/2011Prepared by Sarah Leslie, IT Support Centre 1 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

2. Agenda • Who am I? • Cenni storici su Findus • Birds Eye Iglo Group • Il mercato dei surgelati • Il Modern Trade in Italia • Findus e le sfide del mercato • Il processo di S&OP (Sales & Operations Planning) 6/27/2011Prepared by Sarah Leslie, IT Support Centre 2 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

3. Who am I? 6/27/2011Prepared by Sarah Leslie, IT Support Centre 3 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

4. • Fabrizio Cannizzaro, 49 anni, sposato, 1 figlia stupenda (e anche la moglie ma meno) • Laurea in Economia alla Sapienza, Dottore commercialista e revisore contabile • 22 anni di Unilever in Finance, Customer Service, Logistic e Sales in varie company e locations • dal febbraio 2010 in Findus (in Permira dal 1 ottobre) • Findus Operations & IT Director • Amante del mare e del sole, scrittore dilettante e lettore professionista, ex-tennista (medio-basso) prima dell’anca bionica 6/27/2011Prepared by Sarah Leslie, IT Support Centre 4 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

5. Operations & IT Dept: Organisation chart Operations & IT Chairman Director Report to Mignini Cannizzaro Customer Demand Logistic & Information Service Mgr Planning Cabinets Tecnology Mgr Mgr Mgr Sales CS Team 1 CS Team 2 CSTeam 3 Systems Order Tak& Asssitant Assistant 5 People 4 People 5 People Copacker Mgr Logistic 2 People Mgr CS Support Mgr 1 People Assistant Assistant Order Taking Assistant Cabinets 2 People 3 People 1 People 1 People CS Support 3 People 6/27/2011Prepared by Sarah Leslie, IT Support Centre 5 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

6. Operations & IT Dept - Main Activities Logistic&Cabinets Demand Planning Information Technology -Logistic LTA mngt (operational - S&Op process mngt (Sales - Unilever Contract interface with Unilever Logistic) forecast by sku’s, Forecast bias management (SLA control) - Direct Findus contracts with analysis) - Satellite systems (incident 3PLP (primary network) - Stock optimisation (monitoring, mngt and troubleshooting) - Network mngt (audits and shelf life analysis) - IT Budget control stocks reconciliation) - Interface with Factory and - Interface with UL, Accenture - External Benchmarking Copackers (production plans and and External suppliers -Cabinets (capex, UL goods deployment) agreement, maintenance and - Interface with Logistic and - IT Development (Project scrapping, Interface between Procurement (copacker products) management) Findus&UL Sales Force/LSS) - Critical sku and obsolete mngt - IT integration (Beig IT central - Reporting,KPI analysis and - Product Master data system) issues management - Help desk and users support Order Taking Sales systems Customer Service teams - Order taking (concessionaires and - Project mngt - Cash collection & credit mgt centralised customers) - Scouting on new (Overdue,Ageing analysis, - System update & Reporting opportunities Dunning process,Bad debts - Logistic Issue management - Master data management - Trade Contract mngt (Fiscal & -Sap SD & Idoc Legal interface, Contracts flow -Sap BW (Sales Reporting per and archiving, Rebates CS Support customer, channel, salesrep) monitoring, Promo invoice - Satellite systems (SFA, bookeeping and control) - Pricing TPR, EDI & JiT) - Concessionaires & Agents - Invoicing (Cumulative, Triangular, - Help Desk to SF mngt (agreement,trade terms, Concessionaires, Reivocing) - IT Training to sales force incentive plan) - Goods returns and CN issuing -Claims mngt -Cash application 6/27/2011Prepared by Sarah Leslie, IT Support Centre 6 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

7. Cenni storici Findus Italy … da Fruit INDUStry a Marabou a Nestlè a Unilever a BEIG/Permira a… 6/27/2011Prepared by Sarah Leslie, IT Support Centre 7 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

8. Le origini (1) • il marchio Findus nasce in Svezia in una piccola fabbrica della Fruit INDUStry (da cui deriva il nome) • nel 1941 il marchio, insieme alla fabbrica è ceduto a Marabou, un’azienda alimentare svedese, che nel 1945 lancia la prima gamma di prodotti surgelati a marchio FINDUS • nel 1962 Marabou vende il brand Findus alla Nestlè che lo esporta in tutta Europa e che nel 1964 apre lo stabilimento Italiano a Cisterna di Latina • nel 1969 in Italia la Unilever, leader di mercato nei gelati con Algida/Eldorado/Soave, entra nel mercato surgelati con il brand IGLO che inizia velocemente a 8 erodere alla Findus (Nestlè) importanti quote di mercato 6/27/2011Prepared by Sarah Leslie, IT Support Centre Espresso Steering Group - November 18 2010Launch slides 071010.ppt

9. Le origini (2) • la Nestlè perde margini e profitti, il business Findus in Italia non e’ sostenibile e quindi contatta Unilever per fare business insieme • nel 1970 si crea una Joint venture che produce e commercializza gelati e surgelati (Findus+Iglo) di cui Unilever detiene il 75% e Nestlè il 25% • tale co-gestione finisce dopo poco tempo a seguito di divergenze strategiche e Unilever ne diviene proprietaria insieme al marchio Findus per la sola Italia mentre all’estero rimane di proprietà Nestlè (ora è di Lyon Capital) • all’estero Unilever opera nel mercato Frozen Foods con i marchi IGLO e BIRDS EYE ai quali si aggiunge Findus per l’Italia 6/27/2011Prepared by Sarah Leslie, IT Support Centre 9 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

10. I giorni nostri • nel 2006 Unilever vende il business dei surgelati al fondo di Private Equity Permira Capital con l’eccezione di Findus Italia (il fiore all’occhiello!) • nel 2006 Permira fonda Birds Eye Iglo Group Limited, leader di mercato nei surgelati in Europa • nel 2010 Unilever Italia crea la newco Compagnia Surgelati Italiana tramite spin-off del ramo surgelati a marchio Findus •il 1 ottobre 2010 Permira perfeziona l’acquisto di C.S.I. ricongiungendo di fatto in BEIG Group il business surgelati Unilever del 2005 • ora cosa succedera? 6/27/2011Prepared by Sarah Leslie, IT Support Centre 10 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

11. BIRDS EYE IGLO GROUP 6/27/2011Prepared by Sarah Leslie, IT Support Centre 11 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

12. Competitive landscape • BEIG Group produce un RSP, inclusa Findus Italy, pari a circa 2,7 Miliardi di Euro (Italy 0,7m) • è leader assoluto di mercato in Europa con una quota del 12% circa, • ha quasi 3 volte la relative share del primo competitor (Findus Group di Lyon Capital con il 4% circa) • ha una grande solidità finanziaria facendo parte di Permira Capital, un grande fondo di private equity (in Italia possiede anche Marazzi, Valentino, Sisal e …) 6/27/2011Prepared by Sarah Leslie, IT Support Centre 12 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

13. Birds Eye Iglo + Findus • #1 in Europe overall • Present in 15 countries UK #1 31% of sales • 4 production facilities: 20% share Germany #1 17% of sales - Bremerhaven 85kt 8% share - Reken 85kt 2 - Lowestoft 110kt 1 2 Austria #1 - Cisterna 100kt 1 1 7% of sales 55% share 1 • Strong core 5 categories: 1 1 Fish 26% share 1 Veg 30% share Italy #1 29% of sales Poultry 26% share 35% share 6/27/2011Prepared by Sarah Leslie, IT Support Centre 13 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

14. BEIG Brand ideal (Core Purpose) We believe that the world would be a better place if everyone saw our frozen food as the smart choice because they realised how amazing it can really be. “Convenience without Compromise” 6/27/2011Prepared by Sarah Leslie, IT Support Centre 14 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

15. BEIG Organisation Category Market Unit Operations Fish Managing Director Factory Ops Vegetabl e Chicken Procurement Meals Marketing Sales Finance Supply Chain HR Distribution •P&L Accountable •Owns the customer Technical •Best in class trade spend and customer •Marketing management IT •R&D •Owns the local consumer (HR) •Category Productivity •Integrates category NPD/EPD into MU plan •Productivity delivered by TPV (Market & •Market leading product specific) productivity •Owns the local employee engagement 6/27/2011Prepared by Sarah Leslie, IT Support Centre 15 Espresso Steering Group - November 18 2010Launch slides CONFIDENTIAL Page 15 071010.ppt

16. Il mercato dei surgelati 6/27/2011Prepared by Sarah Leslie, IT Support Centre 16 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

17. Il mercato Frozen Foods in Italia è grande ... e molto profittevole B€ 100 46.8 95 Ambient Chilled Perishable Frozen Food 26.2 Beverage 40 1,7 1,7 20 1,7 1,7 1,9 2,0 2,1 2,5 2,9 3,7 0 Bakery Cheese Frozen Veg jams Dessert Fixed Yogurt Wine Diary Water Other Perishabl Total Foo weight e d1 veg Average 32-34% 20-22% 34-36% 22-24% 36-38% 38-40% 32-34% 24-26% 26-28% 28-30% 28-30% 28-30% ~30% retailer Margin2 : FF has a strong impact both on turnover and margin contribution for retailers 1. Including 0,2 B€ of door to door business 2. Calculated on a Top 5 retailer data, single channel example Source: IRI data 6/27/2011Prepared by Sarah Leslie, IT Support Centre 17 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

18. ... ed è composto da 7 categorie principali First Second Side Categories Dish Dish Dish Other Examples of products 1 Ready Meals    Starter, First dishes, Soups, meat recipes, vegetable mixes, fish recipes 2 Sofficini & Other Fun (OF)  Sofficini 3 Fish  Fish fingers, mixed fried seafood, fish Fillets, Seafood, Whole & steaks, 4 Natural Vegetables  Peas, Natural Minestrone, Spinaches 5 Potatoes  French fries, Natural potatoes 6 Pizza  Margherita, Napoli 7 Other  Dough 6/27/2011Prepared by Sarah Leslie, IT Support Centre 18 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

19. Findus ha una chiara market leadership.... Followers Nestlè and Orogel far from Findus MS Tot Tot. Value Market (€) Share 810 585 386 229 139 109 79 11% 6% 2.3bn Market 17% 13% 21% share 37% 10% 31% 24% 28% 18% Other Prod. PLs 23% 27% 66% 7% Aia 1% 4% 14% 21% Mccain 1% 22% 9% Pizzoli 2% 3% 0% 12% Cameo 3% 28% 75% Orogel 5% 26% 46% Nestle 8% 25% 38% 34% Findus 34% 20% 5% 4% 0%0% 5% 7% 3% 3% Fish Natural Veg Ready Meals Pizza Potatoes Other Sofficini & OF Source: IRI, analysis 6/27/2011Prepared by Sarah Leslie, IT Support Centre 19 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

20. ... Nessuno come Findus in Europa (tranne l’Austria) Market value1 480 5.939 5.045 2.693 2.324 1.337 (M€) MS (%) 100 Others 20 24 23 26 PL 30 26 80 Iglo Oetcker Group 16 Mc Cain 34 23 60 35 Wagner 47 1 44 Nestlè 8 40 9 Bo Frost 5 42 3 16 Ad van Geloven 10 2 2 7 Orogel 20 15 8 11 5 34 Cameo 12 7 8 8 5 1 2 Findus Italia 6 5 8 6 6 0 Findus Europe 0 20 40 60 80 100 United Kingdom Germany France Italy Benelux2Austria Only Iglo in Austria has an higher MS (42% vs. 34% of Findus) 1. All market value data point refer to 2008, except from Itay referring to 2009 2. Includes Holland, Luxembourg and Belgium Source: Euromonitor 6/27/2011Prepared by Sarah Leslie, IT Support Centre 20 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

21. Lenta ma graduale growth of PLs e niche specialists Value market share per player, %, 2005-2009 Δ MS 100 25,2% 24,8% 24,7% '05-'08 '08-'09 25,8% 26,0% 80 Other (1.0%) (0.1%) 21,0% 21,4% 21,6% 22,4% 23,4% PLs +1.5% 0.9% 60 0,8% 1,0% 1,1% 1,2% Mccain +0.4% 0.1% 1,3% 1,1% 1,2% 1,4% 1,4% Mainly in potatoes 1,6% 4,4% 1,5% 4,6% 1,7% 4,7% 2,1% 4,7% 2,5% Pizzoli +0.3% 0.2% 4,7% 2,8% 40 10.6% 9.1% Cameo +1.0% 0.2% Mainly in pizza 9.7% 8.6% 8.0% Orogel +0.3% 0.0% Mainly in vegetable Nestle (2.0%) (0.6%) 20 34.8% 34.4% 34.8% 34.2% 33.6% Findus (0.6%) (0.6%) 0 2006 2008 2009 2005 2007 Years Source: IRI data, analysis 6/27/2011Prepared by Sarah Leslie, IT Support Centre 21 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

22. Il Modern Trade in Italia 6/27/2011Prepared by Sarah Leslie, IT Support Centre 22 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

23. La Grande Distribuzione 1) Proprietà diretta dei punti vendita, centralità di comando, alto potere decisionale 2) Proprietà dei grandi gruppi finanziari / multinazionali 3) Multicanalità ( Super e Iper ) 4) Elevata copertura del territorio con p.v. dalle superfici medio-grandi 5) Presenza di marche private (DOB) 6/27/2011Prepared by Sarah Leslie, IT Support Centre 23 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

24. La Distribuzione Organizzata ( DO) 1) Proprietà p.v. detenuta dai soci = Alta frammentarietà logistico decisionale 2) Ricerca di alleanze per raggiungere la dimensione critica 3) Duplicazione dei livelli di negoziazione 4) Multicanalità 5) Copertura del territorio con p.v. dalle superfici medio-piccole (prossimità) 6/27/2011Prepared by Sarah Leslie, IT Support Centre 24 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

25. MT – Universe and MS by Groups and Banners 2010 H+S Frozen Food Key Clients Gruppo Others- Centrale C.S.A (C4, Pam/ Lom bardini Auchan Finiper ESD Bennet Esselunga SICON Stand Italiana Sun, Agorà) Panorama (0,4) (10,4) (7,4) (9,0) (2,3) (10,0) (17,3) Alone (24,5) (12,2) (3,1) (3,2) Coop Selex - Auchan CRF Finiper Conad C3 Italia Schlecker (4,0) 8,9 (2,6) (11,9) (1,5) (17,9) (9,0) Despar Gruppo Sma/city Unes Rewe G.R.I.D.O Servizi Sun )5( (0,7) (1,9) (0,3) (3,9) 1,4) Indipe nde nt i Sigma Crai Agorà Ce.Di.Gros Interdis (1,3) (1,9) (1,1) (1,9) (0,6) (3,5) Il Gigante Sisa (0,8) (2,9) Source: Top Trade 2009 H+S – Potential Frozen Coralis (0,6)

26. Retailers Decision process

27. Retail Groups in Italy : a multichannel approach of which Quota LCC HYPER SUPER SUPERETTE DISCOUNT SUPERSTORE COOP ITALIA 26,1 13,7 15,5 6,5 10,5 CONAD 5,3 11,7 2,1 16,0 2,5 CARREFOUR ITALIA 16,2 7,8 1,8 11,4 GRUPPO AUCHAN 16,2 7,0 8,0 9,9 ESSELUNGA 0,0 11,9 47,9 0,0 SELEX 4,6 9,2 4,0 6,4 13,0 INTERDIS 0,1 5,6 1,4 9,7 8,0 DESPAR SERVIZI 1,1 4,9 4,3 4,8 1,8 SISA 0,0 4,8 1,3 5,7 FINIPER 10,3 1,1 0,0 0,5 0,6 GRUPPO PAM 4,3 3,2 1,1 2,6 7,0 BENNET 9,0 0,3 1,0 0,0 GRUPPO REWE 0,4 2,9 3,9 0,6 7,7 GRUPPO LOMBARDINI 0,9 0,6 0,0 1,2 8,5 EUROSPIN 0,0 17,8 LIDL 0,0 14,4 TOTALE 100 100 100 100 100 LEADER 27 FOLLOWER 6/27/2011Prepared by Sarah Leslie, IT Support Centre Espresso Steering Group - November 18 2010Launch slides COMPETITORS 80% 071010.ppt

28. Tipologia dei Punti di Vendita - Grandi Ipermercati (oltre 5000 mq) - Ipermercati (da 3000 a 5000 mq) - Superstore (da 1500 a 3000 mq) - Supermercati (da 400 a 1500 mq) - Superettes (da 200 a 400 mq) - Libero servizio (da 100 a 200 mq) - Negozi Tradizionali (fino a 100 mq) - Discount 6/27/2011Prepared by Sarah Leslie, IT Support Centre 28 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

29. In-Home market in Italy is composed of three different distributors categories Retail Modern Trade Normal Trade Specialists Chains/ stores associated to Local stores not associated to Typical street merchants not big buying groups any buying group associated to any buying group • Often distributed on the • Classified into two different whole national territory clusters Food stores Four distribution formats • Small stores, with direct Corner markets • Hyper, ~397 stores assistance of personnel/ • Italian market located in • Super, ~8 855 stores owners dedicated in town area, with • Superette, ~6 849 stores • Mainly dealing food direct assistance of owners • Discounter, ~3 690 stores (minimum 5 different • Mainly dealing food products) 5 Top players • ~19 000 stores Hawkers • International: Carrefour, • Mobile format mainly located Auchan Mixed stores (food + non food) in crowded areas • Italian: Coop, Conad, • Direct assistance of • Both dealing food and non Esselunga personnel/ owners food products • Minimum 3 grocery segments (at least 5 food categories...) • ~30 000 stores Source: IRI data 6/27/2011Prepared by Sarah Leslie, IT Support Centre 29 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

30. Top 5 retailers are growing... Value market share on modern trade, food and non-food market, %, 01 - 08 Italians MS ∆ p.p. '01 – '08 14,9% % 15% 14,3% 14,4% 14,7% Coop 2.8 13,7% 13,1% 12,1% 12,5% 10% 9,2% 9,4% 9,5% 9,1% Conad 0.4 8,4% 1.4 7.5% 8.0% 8,9% CRF 7.1% Auchan 0.3 6,2% 6,5% Group 5,3% Esselunga 2.6 4,5% 4,6% 4,8% 5,1% 5% 0% 7.6 2001 2002 2003 2004 2005 2006 2007 2008 Top five retailers account for ~50% of total market Source: AC Nielsen 6/27/2011Prepared by Sarah Leslie, IT Support Centre 30 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

31. ... and the biggest 6 buying groups represent ~87% of Modern Trade sales Market share on gross Modern trade sales (%) 2008 data 25% 22.7% 1.2% 2.0% 20% 18.4% 1.2% 4.6% 16.3% 1.4% 15% 2.0% 2.5% 14.6% 2.0% 1.7% 4.7% 2.9% 10% 3.6% 7.9% 7.1% 14.9% 5% 9.1% 8.9% 8.2% Coop Auchan Conad Carrefou Selex Esselunga 0% r Centrale Intermedia Sicon3 GD plus4 ESD Esselunga Italiana 1 902 1. Despar, Il Gigante, Sigma 2. Pam, Bennet, Crai, Lombardini, Sun, Metro 3. Interdis, Rewe 4. Finiper, Agorà, CeDiGros, Alfi, Disco Verde, CDS, Cedi Market Source: AC Nielsen (Top for Top and GNLC) 6/27/2011Prepared by Sarah Leslie, IT Support Centre 31 Espresso Steering Group - November 18 2010Launch slides 197700-73 project Boreas 26 oct 09 – Lbi-ec-Mil 31 071010.ppt

32. Italian Modern Trade – Concentration level vs other european country 2008 data GERMANY HOLLAND UK Edeka Group 28,3 Superunie 30,6 Tesco 31,4 Rewe Group 21,3 Albert Heijn 29,4 Asda 16,7 Markant 18,9 C1000 14,2 Sainsbury 16,2 ITALY Tengelmann 8,4 Super De Boer 7,3 Morrison 11,1 Metro 8,2 Somerfield 4,1 Coop Italia 14,9 Conad 9,1 TOP 5 85,1 TOP 5 81,5 TOP 5 79,5 Carrefour Group 8,9 Gr. Auchan 8,2 Selex 7,9 TOP 5 49,0 FRANCE GREECE SPAIN Carrefour Group 21,6 Carrefour Group 23,3 Carrefour 22,0 Leclerc 15,9 Vassilopoulos 12,2 Mercadona 21,4 Intermarchè 11,8 Skalvenitis 10,4 Eroski Group 11,7 Auchan 8,9 Spar Veropoulos 6,3 ECI Group 8,2 Systeme U 8,5 Massoutis 5,7 Auchan Group 7,5 TOP 5 66,7 TOP 5 57,9 TOP 5 70,8 6/27/2011Prepared by Sarah Leslie, IT Support Centre 32 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

33. Italian Trade by Store Format # pos 45885 4193 8950 425 12059 6/27/2011Prepared by Sarah Leslie, IT Support Centre 33 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

34. In retail, FF is sold mainly through Supermarkets (52%) Distribution FF Food channels FF (M€) (%) (%) Rationale • Target of small families Super1 1 208 52.1 49.1 • Limited offer of fresh / superfresh products • Easy for transportation Superette 370 16.0 14.6 (close to home) • Target of small families • Wide offer of fresh / Hyper 334 14.4 16.4 superfresh products • Far from home • Good variety of FF Discounter 225 9.7 10.1 private label products • Long-term food purchases Normal Trade 182 7.8 9.8 • Limited offer of FF products • Short-term food 2 319 100 100 purchases 1. Including both super <2 500 sm and >2 500 sm Source: IRI data 6/27/2011Prepared by Sarah Leslie, IT Support Centre 34 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

35. Findus has clear leadership in all channels but Discounters FF market share by channel, %, 2009 Tot. Market Total Share FF 1 222 370 335 227 182 2.3bn Market 100 share 13% 16% Other 24% 22% 25% (%) Private Label 23% 80 12% Aia 1% 26% 53% Mccain 1% 1% 22% 4% Pizzoli 2% 25% 60 13% Cameo 3% 2% 5% Orogel 5% 3% 5% 9% 3% Nestle 8% 40 8% 5% Findus Findus 34% 8% avg: 34% 34% 52% 20 42% 34% 30% 1% 7% 0 2% 0 20 40 60 80 100 Super Superette Hyper Normal trade Discounter Findus strong leader both in Modern Trade fastest growing channel (i.e. Super) and Normal Trade Source: IRI data 2009 6/27/2011Prepared by Sarah Leslie, IT Support Centre 35 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

36. Findus e le sfide del mercato • la complessità • il mondo esterno • il consumatore • il cliente ed i suoi marchi • il circolo vizioso dei prezzi • il punto di vendita 6/27/2011Prepared by Sarah Leslie, IT Support Centre 36 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

37. Le sfide : La complessità FINDUS- Routes to Market Primary transportation PoSs Secondary transportation C Primary Delivery I Depots S #180 9.700 T Centralized E 70% R cold store N A P. Secondary 27% 34.000 D. Depots C (SDC) DIRECT O P C. A #11 3.900 C K 3% Concessionaires E cold stores R S tot. 37 47.600 6/27/2011Prepared by Sarah Leslie, IT Support Centre Espresso Steering Group - November 18 2010Launch slides 071010.ppt

38. Le sfide: adattarsi al mondo esterno Continuo riallineamento delle strutture interne per fronteggiare i cambiamenti esterni ESTERNO AVVIO BRAND CHANNEL CENTRALIZZAZIONI PARTNERSHIP NUOVO MODELLO GLOBAL SUPER COMPETITION COMPETITION > 50% LOGISTICA NEGOZIALE CENTRALIZZAZIONI CENTRALI CUSTOMERS sul PDV MASTER CATEGORY BUSINESS UFFICIO MASTER CUSTOMER VERTICALIZZAZIONE International PLAN 1 ACCOUNT MANAGER ACCOUNT ORDINI PLAN 2 TEAM Team INTERNO 6/27/2011Prepared by Sarah Leslie, IT Support Centre 38 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

39. Le sfide : il Consumatore Aumenta la sua mobilità 8,6 8,2 7,9 Variazioni % Trimestrali 6,8 7,3 6,4 vs anni precedenti 2,5 -0,7 -1,3 -2,2 -3 -4 -4,9 Numero scontrini -6,3 Valore medio scontrini ott-dic 07 nov 07-gen 08 dic 07 - feb 08 gen - mar 08 feb - apr 08 mar - mag 08 apr - giu 08 • Visita più punti vendita • Più frequentemente • Spende meno per atto di acquisto 6/27/2011Prepared by Sarah Leslie, IT Support Centre 39 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

40. Le sfide : il Consumatore Il consumatore è sempre più rivolto alla ricerca della convenienza: % MOLTO + ABBASTANZA D’ACCORDO % molto Quando devo fare un acquisto, guardo, confronto e chiedo molto più di prima 50 83 Ultimamente sto molto più attenta Cambio facilmente un punto quando vado a fare la spesa perché vendita se è conveniente 51 78 cerco prodotti in promozione/ offerta speciale/ sottocosto Cambio facilmente una 48,9 marca se è conveniente 49 78 50 45 40,9 40 35 30 25 20 15 7,1 10 1,0 2,1 5 0 Per niente Scarsamente in Mediamente Piuttosto Perfettamente d'accordo accordo d'accordo d'accordo d'accordo 6/27/2011Prepared by Sarah Leslie, IT Support Centre 40 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

41. Le sfide: Il Cliente e I suoi marchi Le Marche del Distributore Private Label – Quota Valore (I+S+LSP) +150 bps in 4 anni 11,9 12,1 12,3 12,7 13,4 +70 bps ultimo anno 2004 2005 2006 2007 2008 Stanno aumentando di quota ma ad un rate inferiore A quanto accade nel resto d’Europa 6/27/2011Prepared by Sarah Leslie, IT Support Centre 41 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

42. PLs presence is still low compared to other countries... MS ∆ p.p. % '03 – '08 50% 48.2% UK 10.2% 41.1% 40% 38.0% 38.0% 37.8% 37.9% 33.4% 30.3% Spain 8.4% 28.7% 30.4% 27.4% 28.7% 30% 25.0% 26.2% 26.8% 27.3% Germany 6.7% 25.5% 23.7% 28.0% France 4.2% 26.3% 27.2% 24.8% 25.3% 23.8% 20% 13.4% 14.1% 12.2% 12.4% 12.7% 3.1% 11.0% Italy 10% 0% 2003 2004 2005 2006 2007 2008 ...And has a lower growth rate Source: AC Nielsen 6/27/2011Prepared by Sarah Leslie, IT Support Centre 42 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

43. Coop Italia - Focus on Private Label Strong communication support: folders, in store radio, TV, print 6/27/2011Prepared by Sarah Leslie, IT Support Centre 43 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

44. Coop Italia - Focus on Private Label Forte teatralizzazione nel PDV in Super and Hyper markets; Confronti diretti tra i prezzi di branded and PL products 6/27/2011Prepared by Sarah Leslie, IT Support Centre 44 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

45. Coop Italia - Focus on Private Label Attacco diretto a market leaders 6/27/2011Prepared by Sarah Leslie, IT Support Centre 45 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

46. Coop “price increase war” 6/27/2011Prepared by Sarah Leslie, IT Support Centre 46 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

47. Esselunga reaction: via PL… 6/27/2011Prepared by Sarah Leslie, IT Support Centre 47 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

48. …. low prices….

49. … and brands • Reazione veloce alla situazione di mercato • Volantini di “convenience” principalmente con categorie traffic builder • Forti promo su branded products • Competizione diretta on PL price with Coop Italia 6/27/2011Prepared by Sarah Leslie, IT Support Centre 49 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

50. Le sfide: il circolo vizioso dei prezzi L’industria scarica l’aumento dei costi sui listini per mantenere il livello di profittabilità L’industria aumenta i prezzi di listino per mantenere il Il Trade non riesce a trasferire tali livello di supporto sui propri aumenti sul prezzo al consumo prodotti da parte del trade Il Trade fa pressione sull’industria per extra risorse per compensare la perdita di margine Trade Margins Reduction 50

51. Come si può contrastare il circolo vizioso dei prezzi Per restare competitivi vs competitori diretti e marche private dobbiamo: Minimizzare gli aumenti di listino/intervenire sull’equazione di valore • riduzione dei costi • miglioramento della qualità • innovazione Arbitraggi di risorse • clienti/canale – dare priorità a quelli con maggiore ROI • brand – privilegiare gli investimenti sui prodotti con maggiore elasticità al prezzo 6/27/2011Prepared by Sarah Leslie, IT Support Centre 51 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

52. Le sfide: vincere sul PdV Per vincere in uno scenario difficile e competitivo come quello attuale bisogna conquistare il consumatore anche sul punto di vendita: • con i nostri prodotti sempre disponibili sul pdv (no OoS) • con il giusto assortimento per store format (miglior assortimento ovunque) • con la corretta proposizione di valore e convenienza (affordability) • con la migliore esposizione a scaffale (visibility) 6/27/2011Prepared by Sarah Leslie, IT Support Centre 52 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

53. Il processo di S&OP 6/27/2011Prepared by Sarah Leslie, IT Support Centre 53 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

54. What is Sales & Operation Planning?  It is NOT a meeting!  It is a structured process to run, develop and grow the business  Integrated marketing, sales and supply planning, with clear understanding of their financial impact  Continuous management of change, issues & assumptions for the business  Ensure that the right people make the right decisions at the right time 6/27/2011Prepared by Sarah Leslie, IT Support Centre 54 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

55. S&OP summary MEETINGS ACTIONS OUPUTS week 1 week 2 week 3 week 4 Marketing Review Cash Up - Create P&L Demand Review Meeting Meeting Forecast Supply Reconciliation Create Volume Forecast Board Review Meeting Meeting Agreed P&L Summary of Agreed Volume Forecast Assumptions Forecast Decisions to drive the Business Note: Updated Financial forecast in value provided to Support Centre as part of monthly results, Friday of wk 1. Timings suggested to hit this deadline 6/27/2011Prepared by Sarah Leslie, IT Support Centre 55 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

56. Marketing Review Meeting Objective To provide the detailed planning assumptions for the next 18 months by Product Group Organisation Leader: Marketing Director / Attendance Attendance: Brand Manager, Market Intelligence, Demand Planner, Category, Finance, Sales Dir, Ops Dir Input Marketing: Market NPD timings, NPD assumptions, Media planning, Category: promo performance, NPD performance, market pricing, Distribution Changes, promotional strategy Demand Planner: Forecast Accuracy/Bias, Market Intelligence: Data KPI sheet containing category volume performance, Findus share performance, Market projections Market consumption data, Agenda ALL to Attend Market Performance: market intelligence to update on Market perf, share & key KPI’s using the category dashboards Forecast Accuracy Performance: Planner to give brief update on last months performance & key drivers of accuracy/inaccuracy Separate session by Category FY assumptions sheet. Marketing to lead, detailing market trend assumptions, activity plan, media plan, distribution changes NPD: Marketing to lead Update on future NPD timelines and status within innovation process. Assumptions for forecast. Performance of current NPD, Sales Promotional Plan: Category to lead summary of sales promotional calendar Output •Documented assumptions for major forecast drivers •Split to Product Group Level RACI Marketing: Accountable for Assumptions 6/27/2011Prepared by Sarah Leslie, IT Support Centre 56 Insights/Finance/Sales/Demand Planning planning: Consult Espresso Steering Group - November 18 2010Launch slides 071010.ppt

57. Demand Review Meeting Objective To agree the detailed Volume plan for the next 18 months by Product Group Organisation Leader: Operations & IT Director / Attendance Attendance: Brand Mgr, Mkt Intelligence, Demand Planner, Category, Sales, Finance, Mktg Dir, Sales Dir Input Demand Planner: Template containing: Forecast LV (tonnes, cases, comparison to PLV, AP, prior year), Forecast Accuracy/Bias, Obsoletes/stock exposure Marketing: Assumptions Template Agenda Forecast Accuracy Performance: Planner to give brief update on last months performance & key drivers of accuracy/inaccuracy Product Group Analysis: Planner to lead review of Volume Forecast. Objective to highlight key impact of major assumption changes. Highlight areas of major change to Last forecast, Previous year, Discuss whether risk/opportunity need to be applied. Generate risk/gaps to feed into Operational Review NPD: Planner to lead review of NPD volume forecast, Rate of Sale data, target weighted distribution and pipefill assumptions Sales Promotional Plan: Category to lead review of sales promotional volumes Risks & Opps, gaps to target: Summary of key risks & opportunities by category Output •Volume Forecast by SKU for next 18 months •Documented changes to LV since prior demand cycle •Risks and Opportunities summary RACI Sales & Marketing: Accountable for Forecast DP: Responsible for Volume Forecast Insights/Finance/Sales/factory planning: Consult 6/27/2011Prepared by Sarah Leslie, IT Support Centre 57 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

58. Supply Reconciliation Meeting Objective To agree a supply plan that balances supply and Demand for next 18 months Organisation / Leader: Operations & IT Director Attendance Attendance: Factory Supply Planner, Head of Procurement, Factory Finance, Factory Director, Demand Planner Input Factory Planning: Capacity Plans, stock projections, plant performance, identified gaps in supply, alternatives/options to supply, recommendations Procurement: Raw material gaps in supply, alternatives/options/recommendations Factory Finance: Projected costs of plans, financial impacts of options to resolve Factory Director: Plant performance, Projects impacting supply, plant impact of supply plan Demand Planning: Vol fcst, risks/opps potential to inform decisions Agenda Demand and Assumptions update - Operations Director: Review plant performance – Factory Director Plant Supply Plan for next 18 months, Stock, Cost & Service Implications - Factory Planning: Raw Materials supply plan, Stock, Cost & Service Implications- Factory Planning: Obsoletes and SSL review – Demand Planning Co-Packers – Issues to resolve – Demand planning Output •Next 18 months supply plan •Inventory forecast •Supply/demand issues to resolve •Feedback future constraints •Obsoletes issues for resolution RACI Operations Director: Accountable for supply Plan Factory Planner: Responsible for supply plan Factory Director: accountable for delivery of agreed supply plan Procurement: Accountable for delivery of raw materials to agreed supply plan Finance/Demand Planning: Consult/inform 6/27/2011Prepared by Sarah Leslie, IT Support Centre 58 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

59. Board Review Meeting Objective To agree a the P&L forecast for next 18 months To decide on issues escalated through the process To course correct on Gaps, Risks & Opportunities Organisation Leader: Finance Director / Attendance Attendance: Finance Director, Marketing Director, Sales Director, Ops Director, Factory Director, Findus Procurement Contr, Other Participants as appropriate Input Finance: P&L by SKU for next 18 months Marketing: Assumptions Template Operations: Volume risks & opportunities, Supply issues Agenda Performance review: Key KPIs P&L next 18 months: Risks & Opportunities – Issues for resolution Supply issues to sign off Output •Next 18 months P&L Forecast by SKU •Gaps vs business plan, actions to close •Decisions on Supply resolution •Decisions to mitigate risks and take opportunities RACI Sales & Marketing Directors: Accountable for Forecast. (Sales to 3 months, Mktg 3-18 months) Finance Director: Accountable for Financial forecast call Operations: Responsible for Demand Plan, Accountable for agreed supply plan Insights/Finance/Sales: Consult & Inform 6/27/2011Prepared by Sarah Leslie, IT Support Centre 59 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

60. S&OP Summary Critical process phase 3-4 days 4 steps monthly process Marketing Review Demand Review Supply Chain Review Board Review Meeting Meeting Meeting Meeting Participants • Marketing (owner) • Demand Planning (owner) • Demand Planning (owner) • Board • Category • Marketing (per category) • Production (Production • Demand Planning • Category (per category) planning & Finance) • Finance • Finance (2/3 people) • Procurement • Volume estimates • Main outcomes marketing • Mktg Activities sharing by sku – all sku in portfolio • Economics (cash-up) and review Agenda • New launches volumes • Demand planning KPI’s • Main demand changes (by • Consumer Promo discussion product family) • Advertising • Forecast Bias & • Production plan Accuracy • Sell-out trends (past & future) • Overview Stock & • Issues on stock/ obsolescence obsolescence • Total monthly Volumes • Forecast validation • Economics (cash-up) and volumes validation Output • List of Activities • Period :18 months (to be) • GAP analysis and • Demad Planning, Category • Volumes input in production SALES/MARKETING/ Agreed action Next Steps and MKTG estimate volumes plan PROCUREMENT by sku (total level) based on • All of departments engage •Review activities based on - History their own interface production plan - Planned trade promo - Demand Planning => •Possible over-stock allocation (salesware) production - Marketing activities •Obsolescent products pushing - Procurement => Co-packer •Volumes Cash-Up 6/27/2011Prepared by Sarah Leslie, IT Support Centre 60 Espresso Steering Group - November 18 2010Launch slides 071010.ppt

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