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Cascadian Farm Situation Analysis August 4, 2008
We are Cascadian Farm.
Overview
 
Cascadian Farm Topline <ul><li>Organic food company </li></ul><ul><li>Manufactures products across several categories </li...
Cascadian Farm has a long history in the organic industry.  <ul><li>1972: Founded by Gene Kahn </li></ul><ul><li>Late 1970...
Cascadian Farm is a part of General Mills. <ul><li>Based in Minneapolis </li></ul><ul><li>214 on the 2008 Fortune 500  </l...
Cascadian Farm is General Mills’ organic branch, but what does organic mean?  <ul><li>NO: </li></ul><ul><li>Pesticides </l...
There are different kinds of organic.
And is projected to grow by an annual rate of 7.1% through 2012. Organic sales are on the rise. Billion
Organic Category Topline <ul><li>$19B industry in 2008 </li></ul><ul><li>Industry grew 9.3% in 2007 </li></ul><ul><li>52% ...
Consumer anxieties are being played out in food trends.  <ul><ul><li>“ I’m not obsessional about it for myself… I think th...
So, people are turning to organic. <ul><li>What health/wellness benefits do consumers perceive?  </li></ul><ul><ul><li>56%...
 
Cascadian Farm operates in two organic sub-categories: grain products and frozen/fruits and vegetables.
Cascadian Farm’s Grain Products <ul><li>Cereal  </li></ul><ul><ul><li>Cinnamon Raisin Granola </li></ul></ul><ul><ul><li>C...
Cascadian Farm’s Frozen Fruits and Vegetables <ul><li>Fruit </li></ul><ul><ul><li>Blackberries </li></ul></ul><ul><ul><li>...
And, there have been recent additions to the family. <ul><li>Recently expanded organic granola bar line </li></ul><ul><ul>...
The organic category affects most food segments.
So what does all this mean?
The market has become extremely cluttered, not only with products, but also with messages. <ul><li>VIDEO-WHAT’S THE DIFF. ...
With food prices rising, consumers are more resistant to make the organic leap <ul><li>Overall retail food prices for 2008...
Even for the committed, organic may not be enough.
<ul><ul><li>Footnote: “The Changing Organic Consumer.”  www.ift.org . 4.03.08 </li></ul></ul>
Who is the traditional organic consumer? <ul><li>May be stereotyped as a ‘Tree-Hugger’ </li></ul><ul><li>Dedicated eco-con...
Also known as this guy: VIDEO OF GUY WHO HADN’T DRIVEN HIS CAR FOR MONTHS.
The traditional consumer is skeptical of organic food coming from large corporations. <ul><li>[Gene] Kahn seems to have no...
The mainstream doesn’t know them.  The traditional organic consumer doesn’t trust Cascadian Farm.
VIDEO OF PPL NOT KNOWING CF
Cascadian Farm’s problem is that it lacks a strong brand identity in the mainstream market.
Their advertising is focused on print.
There are some changes afoot.
Cascadian Media Spend: $16.9MM
They don’t stand out among the competition.
Share of Voice 2007 Total Media Spend: $134.7MM
Kashi  <ul><li>Category: Natural grain products </li></ul><ul><li>Products: Hot and cold cereal, snacks and bars, frozen m...
Kashi is outsmarting. <ul><li>INSERT CREATIVE </li></ul>
Kashi is outspending: $100.1MM in 2007
Meet the rest of the competition.
<ul><li>Category: Organic grain products </li></ul><ul><li>Products: Cereal, bars, bread, waffles, and baking mixes </li><...
Nature’s Path 2007 Media Spend: $17.7MM
<ul><li>Category: Whole grain foods </li></ul><ul><li>Products: Breads, buns, english muffins, pocket breads, cereals, tor...
Food For Life 2007 Media Spend: $0.09MM
Upscale Private Label <ul><li>Stores such as Wal-Mart, Kroger, Costco, Safeway and Supervalu are increasing the amount of ...
<ul><li>Owned by Target Corporation </li></ul><ul><li>Category: Premium foods </li></ul><ul><li>Products: Cereal, beverage...
Wal-Mart <ul><li>Wal-Mart accounts for 35% of the organic food sales in the U.S. </li></ul><ul><li>Over 2,000 locations an...
But Cascadian Farm has some advantages the others don’t.
General Mills is a great strength.  <ul><li>Power of distribution = convenience </li></ul><ul><ul><li>82% say convenience ...
Cascadian Farm isn’t a household name yet, but they’re close.
Cascadian Farm has been organic since before organic was trendy. <ul><li>Established in 1972 </li></ul><ul><ul><li>Organic...
Executive Summary  <ul><li>While Cascadian Farm has failed to make its mark as of yet, they have a promising future. Casca...
The organic industry is growing, and the face of the consumer is changing.
 
We’ve identified a new organic consumer.
The New Organic Consumer <ul><li>Wants: </li></ul><ul><li>Control </li></ul><ul><li>Deeper Value Experience </li></ul><ul>...
Organic Consumer Segments
It’s about the simple things. “ Choices Report – US – May 2006-June 2007,” Simmons
 
Cascadian Farm is connecting with  “sustenance seekers.”
Sus·tain   –verb (used with object)  To support, hold; to supply with food, drink, and other necessities of life.   <ul><l...
Sustenance seekers want to sustain their families, their bodies, and the environment. <ul><li>PICTURES  </li></ul>
We’d suggest three lenses through which we can make an emotional connection.  <ul><li>Locality </li></ul><ul><li>Health  <...
Sustain the body. <ul><li>Fight childhood obesity </li></ul><ul><li>Healthy eating programs in schools </li></ul><ul><li>O...
Sustain the community. <ul><li>Sponsor community gardens </li></ul><ul><li>Volunteer programs </li></ul><ul><li>Box Tops f...
Sustain the earth. <ul><li>Redesign packaging to use fewer materials </li></ul><ul><li>Less plastic </li></ul><ul><li>Less...
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Cascadian Farm Situation Analysis

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This is our Situation Analysis that concluded our summer internship program at Fallon.

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Cascadian Farm Situation Analysis

  1. 1. Cascadian Farm Situation Analysis August 4, 2008
  2. 2. We are Cascadian Farm.
  3. 3. Overview
  4. 5. Cascadian Farm Topline <ul><li>Organic food company </li></ul><ul><li>Manufactures products across several categories </li></ul><ul><ul><li>Frozen fruits and vegetables </li></ul></ul><ul><ul><li>Ready-to-eat cereals </li></ul></ul><ul><ul><li>Snack bars </li></ul></ul><ul><ul><li>Fruit spreads </li></ul></ul><ul><li>Founded in 1972 by Gene Kahn </li></ul><ul><li>Based in Sedro-Woolley, WA </li></ul><ul><li>Is a part of Small Planet Foods </li></ul><ul><ul><li>Small Planet Foods is General Mill’s organic division </li></ul></ul><ul><ul><li>Small Planet Foods grew 6% in 2008 and 21% in 2007 </li></ul></ul>
  5. 6. Cascadian Farm has a long history in the organic industry. <ul><li>1972: Founded by Gene Kahn </li></ul><ul><li>Late 1970’s: Kahn begins to process food </li></ul><ul><li>1989: Alar scare; “Panic for Organic” </li></ul><ul><li>1990: Congress passes the Organic Food Production Act </li></ul><ul><li>1990: Alar bubble bursts; Kahn sells a majority share to Welch’s </li></ul><ul><li>1998: Cascadian Farm acquires Muir Glen and becomes Small Planet Foods </li></ul><ul><li>2000: General Mills buys Small Planet Foods </li></ul>
  6. 7. Cascadian Farm is a part of General Mills. <ul><li>Based in Minneapolis </li></ul><ul><li>214 on the 2008 Fortune 500 </li></ul><ul><li>$12.4B in 2007 revenue </li></ul><ul><li>10% growth in net sales in 2008 </li></ul><ul><li>General Mills Mission </li></ul><ul><ul><li>“Nourishing Lives – innovating to make lives healthier, easier, and richer.” </li></ul></ul>quotes.nasdaq.com - GIS 5 year report
  7. 8. Cascadian Farm is General Mills’ organic branch, but what does organic mean? <ul><li>NO: </li></ul><ul><li>Pesticides </li></ul><ul><li>Artificial Fertilizers </li></ul><ul><li>Human Waste </li></ul><ul><li>Ionizing Radiation </li></ul><ul><li>Additives </li></ul><ul><li>Antibiotics </li></ul><ul><li>Growth Hormones </li></ul>
  8. 9. There are different kinds of organic.
  9. 10. And is projected to grow by an annual rate of 7.1% through 2012. Organic sales are on the rise. Billion
  10. 11. Organic Category Topline <ul><li>$19B industry in 2008 </li></ul><ul><li>Industry grew 9.3% in 2007 </li></ul><ul><li>52% of people purchased an organic product in the last year </li></ul><ul><li>Major players in the organic industry include: </li></ul>&quot;Be It Ever So Homespun, There's Nothing Like Spin,&quot; New York Times, 1.3.07; &quot;Organic Foods - US - October 2007,&quot; Mintel
  11. 12. Consumer anxieties are being played out in food trends. <ul><ul><li>“ I’m not obsessional about it for myself… I think the harm has already been done! But for my children it’s worth it.” </li></ul></ul>“ Claudia: A Mini Recent History of Organic Food, OrganicFoodee.com,” 2008
  12. 13. So, people are turning to organic. <ul><li>What health/wellness benefits do consumers perceive? </li></ul><ul><ul><li>56% are concerned with GMOs </li></ul></ul><ul><ul><li>48% agree that organic products are “better for me” than non-organic </li></ul></ul><ul><ul><li>Which of the following do you look for when shopping for organic food </li></ul></ul><ul><ul><ul><li>71% say no artificial ingredients </li></ul></ul></ul><ul><ul><ul><li>70% look for “100% organic” </li></ul></ul></ul><ul><ul><ul><li>66% look for no preservatives </li></ul></ul></ul><ul><ul><ul><li>46% look for USDA seal </li></ul></ul></ul>&quot;Organic Foods - US - October 2007,&quot; MINTEL
  13. 15. Cascadian Farm operates in two organic sub-categories: grain products and frozen/fruits and vegetables.
  14. 16. Cascadian Farm’s Grain Products <ul><li>Cereal </li></ul><ul><ul><li>Cinnamon Raisin Granola </li></ul></ul><ul><ul><li>Clifford Crunch </li></ul></ul><ul><ul><li>Great Measure </li></ul></ul><ul><ul><li>Hearty Morning </li></ul></ul><ul><ul><li>Honey Nut O’s </li></ul></ul><ul><ul><li>Maple Brown Sugar Granola </li></ul></ul><ul><ul><li>Multi Grain Squares </li></ul></ul><ul><ul><li>Oats & Honey Granola </li></ul></ul><ul><ul><li>Purely O’s </li></ul></ul><ul><ul><li>Raisin Bran </li></ul></ul><ul><ul><li>Vanilla Almond Crunch </li></ul></ul><ul><li>Granola Bars </li></ul><ul><ul><li>Chocolate Chip Granola Bars </li></ul></ul><ul><ul><li>Fruit & Nut Granola Bars </li></ul></ul><ul><ul><li>Harvest Berry Chewy Granola Bars </li></ul></ul><ul><ul><li>Multi Grain Chewy Granola Bars </li></ul></ul><ul><ul><li>Peanut Butter Chip Chewy Granola Bars </li></ul></ul><ul><ul><li>Vanilla Chip Chewy Granola Bars </li></ul></ul>
  15. 17. Cascadian Farm’s Frozen Fruits and Vegetables <ul><li>Fruit </li></ul><ul><ul><li>Blackberries </li></ul></ul><ul><ul><li>Strawberries </li></ul></ul><ul><ul><li>Raspberries </li></ul></ul><ul><ul><li>Sliced Peaches </li></ul></ul><ul><ul><li>Cherries </li></ul></ul><ul><ul><li>Harvest Berries </li></ul></ul><ul><ul><li>Blueberries </li></ul></ul><ul><li>Vegetables </li></ul><ul><ul><li>Gourmet Boxed: </li></ul></ul><ul><ul><ul><li>French-Cut Green Beans with Toasted Almonds </li></ul></ul></ul><ul><ul><li>Premium Bag: </li></ul></ul><ul><ul><ul><li>Cut Green Beans </li></ul></ul></ul><ul><ul><li>Premium Blends: </li></ul></ul><ul><ul><ul><li>Chinese-Style Stir-fry Blend </li></ul></ul></ul>
  16. 18. And, there have been recent additions to the family. <ul><li>Recently expanded organic granola bar line </li></ul><ul><ul><li>Peanut Butter Chip and Vanilla Chip </li></ul></ul><ul><li>Recently expanded organic cereal category </li></ul><ul><ul><li>Maple Brown Sugar Granola </li></ul></ul><ul><li>“ Cascadian Farm is well-known for it's </li></ul><ul><li>delicious and nutritious organic products. </li></ul><ul><li>When it comes to making food taste good </li></ul><ul><li>without adding chemicals and artificial </li></ul><ul><li>sweeteners, Cascadian Farm is a cut above the rest.” </li></ul><ul><li>Introduced Purely Steam Organic Vegetables </li></ul><ul><li>“ I have been buying the Cascadian Farms Organic Purely Steam packages…They make an excellent lunch and a yummy side dish.” </li></ul>
  17. 19. The organic category affects most food segments.
  18. 20. So what does all this mean?
  19. 21. The market has become extremely cluttered, not only with products, but also with messages. <ul><li>VIDEO-WHAT’S THE DIFF. BETWEEN NATURAL/ORGANIC </li></ul>&quot;Turning Over a New Leaf? Americans Changing Attitudes to Food & Diet,” GfK Roper Reports, 9.27.2007
  20. 22. With food prices rising, consumers are more resistant to make the organic leap <ul><li>Overall retail food prices for 2008 to 2010 are expected to rise faster than the general inflation rate </li></ul><ul><li>Core consumers for organic goods, about 15% of the population, are becoming even more committed </li></ul><ul><li>Less committed consumers are still buying organic dairy products, produce and meat but fewer organic packaged goods </li></ul><ul><li>Price is an issue for consumers: 67% would buy organic more often if it were less expensive </li></ul>
  21. 23. Even for the committed, organic may not be enough.
  22. 24. <ul><ul><li>Footnote: “The Changing Organic Consumer.” www.ift.org . 4.03.08 </li></ul></ul>
  23. 25. Who is the traditional organic consumer? <ul><li>May be stereotyped as a ‘Tree-Hugger’ </li></ul><ul><li>Dedicated eco-consumer </li></ul><ul><li>Passionate about organic and its ideals </li></ul><ul><li>Knowledgeable about organic products and standards </li></ul><ul><li>Willing to change lifestyle to remain organic </li></ul><ul><li>Support small and locally owned farms </li></ul><ul><li>Do not agree with industrial agriculture </li></ul>
  24. 26. Also known as this guy: VIDEO OF GUY WHO HADN’T DRIVEN HIS CAR FOR MONTHS.
  25. 27. The traditional consumer is skeptical of organic food coming from large corporations. <ul><li>[Gene] Kahn seems to have no doubt that his path is the right path, not only for him but for the organic movement as a whole: &quot;You have a choice of getting sad about all that or moving on. We tried hard to build a cooperative community and a local food system, but at the end of the day it wasn't successful. This is just lunch for most people. Just lunch. We can call it sacred, we can talk about communion, but it's just lunch. </li></ul><ul><li>...Organic is not the last word, and it's not just lunch.” </li></ul><ul><li>Michael Pollan </li></ul>
  26. 28. The mainstream doesn’t know them. The traditional organic consumer doesn’t trust Cascadian Farm.
  27. 29. VIDEO OF PPL NOT KNOWING CF
  28. 30. Cascadian Farm’s problem is that it lacks a strong brand identity in the mainstream market.
  29. 31. Their advertising is focused on print.
  30. 32. There are some changes afoot.
  31. 33. Cascadian Media Spend: $16.9MM
  32. 34. They don’t stand out among the competition.
  33. 35. Share of Voice 2007 Total Media Spend: $134.7MM
  34. 36. Kashi <ul><li>Category: Natural grain products </li></ul><ul><li>Products: Hot and cold cereal, snacks and bars, frozen meals, waffles </li></ul><ul><li>Positioning: Natural food products designed to enhance the overall wellness of the body and spirit </li></ul><ul><li>Executional Focus: Go-Lean Crunch, brand </li></ul><ul><li>Target: Individuals, strivers, go-getters, crunchy corporate-types </li></ul><ul><li>Tonality: Health-conscious, supportive network, driven to help you succeed </li></ul><ul><li>Tagline: “Seven Whole Grains on a Mission” </li></ul>
  35. 37. Kashi is outsmarting. <ul><li>INSERT CREATIVE </li></ul>
  36. 38. Kashi is outspending: $100.1MM in 2007
  37. 39. Meet the rest of the competition.
  38. 40. <ul><li>Category: Organic grain products </li></ul><ul><li>Products: Cereal, bars, bread, waffles, and baking mixes </li></ul><ul><li>Positioning: Organic products as an ethical choice </li></ul><ul><li>Executional Focus: Cereals, Organickidz </li></ul><ul><li>Target: Dedicated Organic Consumers, Families </li></ul><ul><li>Tonality: Dependable, Green, Healthy </li></ul><ul><li>Tagline: “Nurturing People, Nature & Spirit” </li></ul>
  39. 41. Nature’s Path 2007 Media Spend: $17.7MM
  40. 42. <ul><li>Category: Whole grain foods </li></ul><ul><li>Products: Breads, buns, english muffins, pocket breads, cereals, tortillas, </li></ul><ul><li>pastas </li></ul><ul><li>Positioning: Whole grain, kosher-certified, gluten-free, yeast-free, high fiber, diabetic-friendly </li></ul><ul><li>Executional Focus: Whole grain breads </li></ul><ul><li>Target: Religious, health-conscious consumers </li></ul><ul><li>Tonality: Natural, clean, faithful, trustworthy </li></ul><ul><li>Tagline: “Organic Sprouted Whole Grain Bread and Foods!” </li></ul>
  41. 43. Food For Life 2007 Media Spend: $0.09MM
  42. 44. Upscale Private Label <ul><li>Stores such as Wal-Mart, Kroger, Costco, Safeway and Supervalu are increasing the amount of private labels they carry </li></ul><ul><li>Brands either exist independently of parent store (Archer Farms) or are from trusted stores (Trader Joe’s). </li></ul><ul><li>Stealing shelf space </li></ul><ul><li>Convenient, less expensive alternative to branded organic products </li></ul><ul><li>May be priced up to 10-20% lower than branded products </li></ul>
  43. 45. <ul><li>Owned by Target Corporation </li></ul><ul><li>Category: Premium foods </li></ul><ul><li>Products: Cereal, beverages, snacks, frozen foods, deli, bakery, pantry, organic </li></ul><ul><li>Positioning: Convenient products that will bring everyday happiness for every occasion </li></ul><ul><li>Target: Target store customers who are looking for superior products and trust Target to be that outlet </li></ul><ul><li>Tonality: Quality, top-notch products </li></ul><ul><li>Tagline: “Tasty Food, Tasty Price” </li></ul>
  44. 46. Wal-Mart <ul><li>Wal-Mart accounts for 35% of the organic food sales in the U.S. </li></ul><ul><li>Over 2,000 locations and offers up to 200 organic products </li></ul><ul><li>Wal-Mart doubled the amount of organics they carry in 2006, promising to make organics affordable to more consumers by offering what executives called &quot;the Wal-Mart price.” </li></ul><ul><li>Launched an ad campaign on The Food Network, HGTV, and parenting and women's magazines, with tag lines like: &quot;Know what goes well with organic milk? Organic cereal and knock-knock jokes.” </li></ul><ul><li>Has recently been under scrutiny for misleading consumers into thinking certain products are organic. </li></ul>
  45. 47. But Cascadian Farm has some advantages the others don’t.
  46. 48. General Mills is a great strength. <ul><li>Power of distribution = convenience </li></ul><ul><ul><li>82% say convenience is a factor </li></ul></ul><ul><li>Stayed profitable amongst rising food prices </li></ul><ul><ul><li>Cascadian Farm grew 6% in 2008 and 21% in 2007 </li></ul></ul><ul><ul><li>General Mills has been fighting rising costs by taking-cost reducing measures, such as increasing box size and decreasing the amount of cereal in it </li></ul></ul>&quot;One-Handed Health Food? December 2007,&quot; GfK Roper
  47. 49. Cascadian Farm isn’t a household name yet, but they’re close.
  48. 50. Cascadian Farm has been organic since before organic was trendy. <ul><li>Established in 1972 </li></ul><ul><ul><li>Organic food was fairly new and didn’t become established as a separate identity in the public’s mind until the late 1960’s/early 1970’s </li></ul></ul><ul><ul><li>By the 1980’s, demand for organic food had grown so much Cascadian Farm had to team up with other organic farmers in the Pacific Northwest </li></ul></ul><ul><ul><li>Cascadian Farm endured through the farm crisis of the 1980’s </li></ul></ul><ul><ul><li>In 1998, Cascadian Farm and Muir Glen become part of Small Planet Foods </li></ul></ul><ul><ul><li>In 2000, Cascadian Farm is bought by General Mills, giving Cascadian Farm the power of mass distribution. </li></ul></ul><ul><ul><li>Today, the organic food is a $19B industry. </li></ul></ul>
  49. 51. Executive Summary <ul><li>While Cascadian Farm has failed to make its mark as of yet, they have a promising future. Cascadian Farm has a strong history that the consumer trusts, and the powerhouse that is General Mills has enabled them to have mass distribution power. While ongoing threats from immediate competitors continue, Cascadian Farm has found a new consumer on which to focus. </li></ul>
  50. 52. The organic industry is growing, and the face of the consumer is changing.
  51. 54. We’ve identified a new organic consumer.
  52. 55. The New Organic Consumer <ul><li>Wants: </li></ul><ul><li>Control </li></ul><ul><li>Deeper Value Experience </li></ul><ul><li>Simplicity </li></ul><ul><li>Innovation </li></ul>
  53. 56. Organic Consumer Segments
  54. 57. It’s about the simple things. “ Choices Report – US – May 2006-June 2007,” Simmons
  55. 59. Cascadian Farm is connecting with “sustenance seekers.”
  56. 60. Sus·tain –verb (used with object) To support, hold; to supply with food, drink, and other necessities of life. <ul><li>Sustainability : Cascadian Farm’s practices </li></ul><ul><li>Sustained: Cascadian Farm’s legacy </li></ul><ul><li>Sustenance: Cascadian Farm’s products </li></ul>
  57. 61. Sustenance seekers want to sustain their families, their bodies, and the environment. <ul><li>PICTURES </li></ul>
  58. 62. We’d suggest three lenses through which we can make an emotional connection. <ul><li>Locality </li></ul><ul><li>Health </li></ul><ul><li>Nostalgia </li></ul><ul><li>“Local isn’t just about geographically local — it’s about coming from a certain place — even if that product is coming from far away. It’s about coming from a certain community or locale that the consumer can think about or believe there are quality attributions because it’s being grown in a certain place or made in a certain way that can embody that local or community aspect. “ </li></ul>
  59. 63. Sustain the body. <ul><li>Fight childhood obesity </li></ul><ul><li>Healthy eating programs in schools </li></ul><ul><li>Online recipes, coupons, and tips </li></ul><ul><li>Widgets on social media sites and blogging sites to generate ideas for busy moms </li></ul><ul><li>Inspire the consumer: she loves innovation </li></ul>
  60. 64. Sustain the community. <ul><li>Sponsor community gardens </li></ul><ul><li>Volunteer programs </li></ul><ul><li>Box Tops for Education </li></ul><ul><li>General Mills’ program </li></ul>
  61. 65. Sustain the earth. <ul><li>Redesign packaging to use fewer materials </li></ul><ul><li>Less plastic </li></ul><ul><li>Less paper (already use recycled) </li></ul><ul><li>Feels innovative </li></ul><ul><li>Brand home compost bins </li></ul><ul><li>Compostable plastic bags </li></ul>

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