The test project at 14 stores for Danone and Lenta to increase sales of modern dairy products was so successful that it became a full category management project implemented across all Lenta stores. Key aspects of the project included analyzing underperforming segments, competitors, and developing recommendations to optimize assortment, shelf space, layout, and promotions. These changes led to a 17% increase in modern dairy sales, exceeding expectations, with some segments growing over 25%. The project approach is now being continued and expanded to additional stores.

2. How the test has become a project! In January 2009 Danone and Lenta finished test in 14 stores and started Category Management project in all stores!

4. For Health For Pleasure Kids products Beauty Cholesterol Digestion Defense Yoghurts Drinkable Yoghurts Cheese Desserts

5. Role: Destination

8. Net Gain GFK MAT Who are the main competitors in these segments? We chose priority segments Cheese “Pyaterochka” Karusel 0 -5000000 -10000000 -15000000 5000000 Dixi Perekrestok Total Metro Semiya Aushan Pyaterochka Okey Total -10645294 -6627039,5 -816782 -492293 230354,9 820063,3 955773,1 2245219 Kids products “ Pyaterochka” and “Dixi” Karusel 0 -5000000 -15000000 5000000 Dixi Perekrestok Total Metro Semiya Aushan Pyaterochka Okey Total -29496648 -11162638 -682798,1 126015,4 201216,2 1084408,4 12503996,4 3284513,5 -30000000 Digestion “ Pyaterochka” Karusel 0 2000000 Dixi Perekrestok Total Metro Semiya Aushan Pyaterochka Okey Total -72383808 2577667 5689777 799635 10484146 41066012 56451684 57372840 -80000000 -20000000 6000000 4000000 Defense “ Karusel” and “Okey” Karusel 0 -5000000 -10000000 -15000000 5000000 Dixi Perekrestok Total Metro Semiya Aushan Pyaterochka Okey Total -10886030 -2432758 -2143641 -415492 0 0 0 282352,9

12. Recommendations on additional listing, that were made based on analyses of competitors sales, were accepted in underperforming segments. As well as were accepted recommendations to list innovations of dairy market. For example: Defense segment There were no Immunele Cherry, Actimel Orange, innovation Actimel Sea Buckthorn – Peach and 2 SKU of multipacks in assortment Whereas these positions had good share of sales in other retailers Innovations Launch 100 г. х4 напиток Актимель натуральный 15 % 100 г. х4 Актимель Черника-Ежевика 12 % 100 г. х4 Актимель Гранат 11 % 100 г. х4 Актимель Персик-Облепиха 10 % 100 г. х6 Актимель Черника-Ежевика 9 % 100 г. х4 напиток Актимель Мультифрукт 9 % 100 г. х4 напиток Актимель Клубника 8 % 100 г. х6 Актимель Клубника 6 % 100 г. х4 Актимель Малина-Клюква 6 % 100 г. х4 напиток Актимель Апельсин 4 % 100 г. Кисломол.+Сок Иммунеле Мультифрукт 2 % 100 г. Кисломол.+Сок Иммунеле Ассорти 2 % 93.7 кефир 0% Актимель 2 % 93.7 кефир 0% Актимель Клубника 2 % 93.7 х6 Актимель 0% с лесными ягодами 1 % 100 г. Кисломол.+Сок Иммунеле Ассорти 1 % 100 г. Кисломол. напиток Иммунеле 9% натуральный 2 % 100 г. Кисломол.+Сок Иммунеле Ассорти 0 %

14. Customer flow New segmentation with separate Health Block is now used in all stores and is positively perceived by consumers Before Customer flow After Health Pleasure

15. Before

16. After

17. Design of decoration was created jointly, each segment received unique color code. It helps customers orient in the section, quickly find needed products and as result saves their time. Apart from usual toppers and stoppers, colored shelf carpets and nets on the back wall of the fridge were used in order to help customers differentiate concrete bounds of the segments.

18. Project was implemented in first 14 stores in 3 nights, furthermore we implemented city after city during 2009. Before After

19. The results exceeded expectations – modern dairy category increased by 17%, while traditional category, that were not included in project, grew only by 5% Highest growth! Modern category grew in all stores! +13% +19% +11% +17% +13% +8% +24% +12% +25% +18% +17% +21% +16% 15 17 +19%

20. Growth by segments Based on analyses of sales additional opportunities for growth were defined – in some stores Lay-out was corrected, vertical blocks were implemented and innovations, that were not presented in assortment on implementation date, were listed Segment Growth Comments Recommendations Defense +27,5% м²↑ {block} Health block: Functional products place in Defense Digestion +20,5% {block} Deinkable Yoghurts +20% м²↓ {block} Make vertical blocks Desserts +13% м²↓ SKU ↑ Optimize assortment Yoghurts +7% м²↓, Gaps in brand shares remained Improve planogramm, controle OOS Kids products +6% OOS Cheese +2% м²↓ Vertical blocks were not implemented

21. Project is going on!!