New England Cycle 6 REM Conference Call May 11, 2010.

transcript

New England Cycle 6 REMConference Call

May 11, 2010

Meeting Agenda

Customer Planning and Execution

– Food

• Shaw’s (Rick Rohrbach)

• Hannaford (Melissa)

• Stop and Shop (Matt)

• Market Basket (Andrew)

• Wal-Mart (Adam)

Top-line Business Results

– Overall

– Wal-Mart

– Food

CSR (Bethany Kucharik)

Injury Prevention

Big Wins Cycle 5

Ashley and Matt – Wal-Mart

– Gaining Commitments in all Market Stores

• Mandatory Feautres of…Twizzler Front Endcaps, S’Mores Cartrail, Syrup Front Endcaps

Jason and Tim – Wal-Mart

– Gaining Commitments in all Market Stores

• 2+ S’Mores Displays/Store

Business Commitments - Easter

At least one BDP/RSR submitted

95% Sell Through – Wal-Mart

.5 Share Gain - Food

New England: 89% - 10th Rank

National: 87%

Wal-Mart POS Overview

Boston vs. New England BBQ Throwdown

24oz Syrup Boston New EnglandIncremental $'s vs YAGO (measured period) 6,330$ 9,079$

Incremental $ % Chg vs YAGO (measured period) 6% 13%King SizeIncremental $'s vs YAGO (measured period) 81,181$ 61,523$

Incremental $ % Chg vs YAGO (measured period) 23% 21%8PkIncremental $'s vs YAGO (measured period) 107,768$ 70,408$

Incremental $ % Chg vs YAGO (measured period) 29% 26%24oz SyrupIncremental $'s vs YAGO (measured period) (12,597)$ (4,693)$

Incremental $ % Chg vs YAGO (measured period) -63% -63%Total Measured PacksIncremental $'s vs YAGO (measured period) 182,683$ 136,317$

Incremental $ % Chg vs YAGO (measured period) 21.7% 21.1%

Pitting Rivals on Growth % of 24oz Syrup, King Size, and 8 Packs during measured periods of Cycles 3,4,5 2010

Less then $7K in incremental volume separates the teams

District $ Share - Northeast Area - YTD (4.17.2010)

District Share Chg - YTD - 4.17.2010

Boston District11%

Chesapeake District16%

Cleveland District8%

Hershey District11%

New England District15%

New York District14%

Philadelphia District9%

Pittsburgh District5%

Raleigh District4%

Syracuse District7%

District $ Share - Northeast Area - YTD (4.17.2010)

District Share Chg - YTD - 4.17.2010

-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0%

Northeast Area

Boston District

Chesapeake District

Cleveland District

Hershey District

New England District

New York District

Philadelphia District

Pittsburgh District

Raleigh District

Syracuse District

Food Business Topline – 4.17.2010

Highlights:

Focus on Your Own

Wellness and SafetyMay 2010

Key Messages

We have been receiving calls from the field regarding injuries that are preventable.

We need to rely on ourselves and each other to work at a level and pace that does not encourage unsafe actions or preventable injuries

We can be productive, efficient and safe at the same time.

Through April

Our Field Sales Team has reported nearly twice as many injuries as in the same time period last year.

Injuries stemming from:

– Over exertion – strains and sprains

– Moving too quickly and not paying attention to surroundings – slips, trips and falls

– Handling more product than necessary

– Not holding customers accountable for displaying product in their stores

Source: IRI…

What Will We Do About This?

Continue

Let’s Be Careful Out There!

Wal-Mart

Cycle 6: WM Weeks 16-19

DISTRIBUTION: FOCUS FIXTURES:100% Distribution Speedy RegistersNo Out-of-Stocks Tobacco AisleCorrect # of Facings Syrup Saddle RackTagged and Flagged

WM Week 16 (5/15 - 5/21) WM Week 17 (5/22 - 5/28)1 S'mores Wave 2 (+ FSI) 1 S'mores2 Bonus Syrup 2 Packaged Candy Rollback3 Packaged Candy Wave 1 3 Twizzlers

Secondary Priorities: Secondary Priorities:* 8-packs * Twizzlers * Syrup/Toppings Rollback * King Size* King Size * Pieces * 8-packs/Theater Boxes * Bliss* Giant Bars * Bliss * Pieces

WM Week 18 (5/29 - 6/4) WM Week 19 (6/5 - 6/11)1 S'mores 1 S'mores2 Syrup/Toppings Rollback 2 Standard Bars Wave 13 King Size Rollback 3 Twizzlers Rollback

Secondary Priorities: Secondary Priorities:* Packaged Candy * Pieces * Syrup/Toppings Rollback * King Size* 8-packs/Theater Boxes * King Size * Packaged Candy Rollback * Pieces SSO* Twizzlers * Bliss * 8-packs/Theater Boxes * Bliss

(Weekly priorities may change based on programming changes and sales-utilize weekly updates for latest priorities)

2010 Cycle 6 Retail Execution Meeting

May 2010

Key Messages

YTD thru April, Total Walmart is 98.1% of Plan with 12 districts above objective

S’mores is off to a fast start with wave 2 product shipping week 16 The first FSI is dropping May 16th TAB Week 17

Hershey’s Syrup is projected to be +23.1% in 2010 driven by our Summer Rollback program that will be our biggest ever!

200K cases of bonus (2.5x the 2009 volume) $1.68 Rollback on the entire syrup $1.88 Rollback on the entire topping line

Key programs for Cycle 6 include Rollbacks on CPC, Giant Bars and Standard Bars

The Rollbacks on King Size, Twizzlers, and Bliss will continue as well as the EDLP’s on 8-packs, Theater Boxes, and NEW Hershey’s Pieces

Flawless execution at retail is critical to our success; leverage retail tools to sell and maintain your “A” displays

CYTD POS $ vs. Plan

Hershey’s POS is $493.2M, +6.6% vs. 2008 & 98.1% vs. Plan

Source: Retail Link - Walmart Week 201013 (WE April 30, 2010)

vs. Plan

Hershey

Northeast

Central

$125.1$111.8$148.8 $98.6 $493.2POS $ (M)

vs.Plan

100.9%

$9.9 $16.7$125.1$11.4$8.6 $8.6$12.9 $16.8$11.3$14.8 $14.1POS $ (M)

The Central Area generated $125.1M in POS, 96.7% of Plan

CYTD POS $ vs. Plan

vs.Plan

100.8%

$9.5$13.3$111.8$14.7$11.2 $12.2$7.4$4.8$7.2 $15.7$15.9POS $ (M)

The Northeast Area generated $111.8M in POS, 96.9% of Plan

CYTD POS $ vs. Plan

The South Area generated $148.8M in POS, 99.4% of Plan

CYTD POS $ vs. Plan

vs.Plan

102.8%

101.4%

100.5%

100.2%

100.1%

$12.1 $18.0$148.8$15.6$15.7 $16.8 $10.9$17.1 $13.4$14.1 $15.0POS $ (M)

The West Area generated $98.6M in POS, 98.9% of Plan

CYTD POS $ vs. Plan

vs.Plan

101.4%

101.2%

101.1%

100.8%

100.5%

$11.0 $8.6$98.6$7.4$14.9$9.7 $6.4$11.7$10.1 $9.6 $9.3POS $ (M)

Key Promotional Program Recap

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

Leverage all elements of the S’mores program (FSI’s, Walmart and National TV

advertising) to secure multiple display locations for the peak season

Memorial Day5/31 July 4thWave 2

(33% of order)

Wave 3(27% of order)

PEAK SEASON (50% of total season sales)

Weeks 10-32

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

The Syrup Rollback is being supported with 200K of Bonus, 2 FSI’s, and Walmart TV

advertising

Memorial Day5/31

July 4thWave 2(114K Cases)

Walmart TV

Weeks 14-33

New Promotional Programs

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

Packaged Candy, Walmart’s #1 Hershey Packtype, will ship wave 1 to support the

2/$5 Rollback week 16

Memorial Day5/31

July 4thWave 1 Wave 2

National TV Advertising

Weeks 14-21

#1 Packtype in Department 1 Pre-sell SSO quantities and secure commitments for “A”

display locations when product arrives

The 2009 CPC Rollback saw sales lifts of 121% vs. base generating $8.6M in POS

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

The Standard Bar Rollback will drop week 18 and be supported with 3 SSO’s and

Brand Advertising

Memorial Day5/31

July 4thWave 1 Wave 2

Weeks 18-30

Tray 1 Tray 2 Tray 3

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

Continue to execute the Giant Bar PDQ’s and place manual orders where necessary

Memorial Day5/31

July 4th

Weeks 12-22

Yearlong Rollbacksand

EDLP’s

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

YTD King Size is +27.3% and will be supported with an SSO the first week of

Cycle 6 & 7

Memorial Day5/31

July 4thSSO

Weeks 1-39

Continue to secure/maintain displays on King Size in support of the Iron Man 2 movie launch

Leverage our tie-in w/Iron Man 2 and our National TV advertising on our core brands

YTD Hershey’s King Size has generated $31M in POS, +27.3% vs. 2009

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

Ensure execution of the week 17 Twizzlers Rollback SSO for the Memorial Day holiday

Memorial Day5/31

July 4thSSO SSO

Weeks 5-48

Yearlong EDLP

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

YTD 8-Packs are +44.1% vs. 2009 generating over $34M in POS

Memorial Day5/31

July 4thSSO SSO

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

Continue to drive Theater Box POS by cross merchandising with other $1 packtypes

Memorial Day5/31

July 4thSSO

Yearlong EDLP

Continue to secure/maintain secondary display activity on our Bliss and Hershey’s

Pieces line

16 17 18 19 20 21 22 235/15-5/21 5/22-5/28 5/29-6/4 6/5-6/11 6/12-6/18 6/19-6/25 6/26-7/2 7/3-7/9

WALMART WEEK

Ensure continued execution of the Gum & Mint PDQ’s as it is critical to the overall

success in D82

Memorial Day5/31

July 4th

Base Business Distribution on all authorized items for the store (tagged, in-stock, correct # of facings) Rollback signage on all items on Rollback

Cycle 6 Key Programs S’mores, Syrup, CPC 12oz, and 2/$1 Standard Bar Rollbacks

Presell execution of all SSO quantities Leverage FSI, TAB, and COMAC where applicable Follow retail execution guides Use good business judgment when placing manual orders to maintain displays Target secondary locations to sell thru residual promotional product

Yearlong Rollbacks/EDLP’sTwizzlers, King Size, Bliss, 8pk/Theater Boxes, and HSY Pieces

8pks, Bliss, King Size - Utilize the merchandising sheets to punch in everyday items to obtain or maintain your “A” displays

Ensure 100% distribution/in-stock on all items on the side counter Place rollback signs on all items Ensure execution on all SSO’s in “A” display location when product arrives Utilize POS reports and place manual orders to maintain displays

Cycle 6 Action Plan

Hannaford

See Retail Execution Plan and Abbreviated Executive Summaries

New store Lane Blockers set to Plano gram

4x4 set to planogram( same Plano gram )Feb.-April 2010

Syrup rack by Milk

Hershey XL bars in store spinner rack

Summer Bonus Twizzlers off shelf promotions

Summer S’mores 6-pack off shelf endcap display

Bottle Packs: Sell spinner rack display

Ice Breaker shipper 96 ct to all stores (BOGO tear pad included with header)

King size shipper,238ct. To all stores

Standard bar 456ct. To all stores

Reese Snack size and Kit Kat snack to all stores

GRAND TOTAL = 11 P.O.I.

*Drive for 35 distribution: Milk XL bars, Alm XL bars ,Straw Twizzlers and Milk 6-pks always full on gondola.

* Front ends 100% distribution and tagged per new planogram; pull at store level to check.

Looking ahead: 6/20 Summer C0-marketing (mandatory displays of Pieces 60ct,Mini carton 600 ct. Syrup 120 ct)

Hannaford Notes : Choc. Pkg 11 oz. @$3.39 and 40 oz. @$9.99 from 1/3-8/7/10.

EDLC: Pkg Choc 19.75 oz $5.49 & Twizzlers 16 oz./Bonus 2/$4.00.

Leverage reduced price points to gain off shelf displays. Consult with KDM to

increase minimums. .Focus on Summer. A/B stores to receive the Kraft/ S’mores module.

HANNAFORD “GOLD STANDARD” P.O.I.Cycle 6: May 17th – June 11th 2010

POI This Cycle

Shaw’s

Standard Bars

Big Box

King Size

Summer Challenge

• 10/$10 pricing ALL Year!!

• Profitable basket building opportunity

• Drive 10/$10 zone sales with Big Box

• Hershey 24oz Syrup (5/28 – 8/19)

• Mapped location in Dairy (5/28 – 8/19)

• FSI – 5/23 Save $1 off 2 Syrups

• Twizzlers $1.99 (4/30- 9/16)

• Hershey 6pks 2/$6 (4/30 – 10/14)

• Capitalize on this growing usage occassion

• Standard Bars B2G1 Free (5/28 – 6/24)

• XVB Buy 2 Coke 20oz Get 2 Standard Bars FREE – (6/11 – 6/17)

• Highly impulsive packtype

• King Size $1 (6/25 – 7/22)

• King Size will be on promotion every other Period

• King Size is a profitable packtype for the 10/$10 zone

Promotional Calendar – SUPERVALU Period 4 & 5

Cycle 6 - 7 SUPERVALU Programs

5/23-5/29 5/30-6/5 6/6-6/12 6/13-6/19 6/20-6/26 6/27-7/3 7/4-7/10 7/11-7/17Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12

Twizzlers $1.69AD AD

S'mores $2.99AD AD

Bliss $3.50

Big Box 10/$10

Standard Bars Merch Incentive 2/$1 XVB

King Size $1.00

Back to Normal Bonus Packaged Candy $3.29

Back to Normal 8 Packs 4/$5

Back to Normal Early Snack Size $2.79

Baking Chips 2/$4AD

Hershey Syrup 2/$4AD

CYCLE 7CYCLE 6

ITEMS/PACKTYPE PRICING

10/$10 Zone

Scan Based ROQ

Hold Down - Diary wing one mandatory display

10/$10 Zone

Scan Based ROQ

10/$10 Zone

Hold Down - Diary wing one mandatory display

BTS Aisle thru Aug.

Hershey Big Box

Profitable basket building opportunity

Highly impulsive packtype

Merchandising solution – Hershey Hutch

29% Profit

UPC Shaw’s Code QTY

Whoppers Big Box

Milk Duds Big Box

Good N Plenty Big Box

Reese’s Pieces Big Box

Twizzlers Big Box

10700-02440

10700-02152

10700-08813

34000-11470

34000-54151

_______

10/$10

Stop and Shop

Ice Breaker/Breathsaver Mint Tins

Stop & Shop U-Scan Merchandising Solution

Key Messages

Stop & Shop banner has provided support on placing our 3-Tier Mint Display on all U-scan Racks

Merchandising units will support getting 3 of our TOP performing mints on front ends

– Breathsaver 3HR Spearmint, IB Cool Mint Tin & IB Wintergreen Tin

Merchandising units will be implemented through our Hershey retail team based upon operations support

– Average 4 U-scans per store – projected placement of 1,480 merchandising units

– Set up will begin the week of 5/24 based upon normal call coverage

Merchandising initiative has the potential to generate $501K in mint factory sales plus impacts our “Drive for 35” ACV goals in 2010

Ice Breaker/Breathsaver Mints U-Scan Merchandising Solution

Mint 3-Tier U-Scan Rack Authorization Letter

Mint 3-Tier U-Scan Rack POG

Top – IB Cool Mint Tin

Middle – IB Wintergreen Tin

Bottom – BS 3HR Spearmint

Please ensure proper signage on racks

Consult with GM to ensure CAO is updated based upon increased rate of sale

Mint 3-Tier U-Scan Rack Installation Guide

Remove Tape from Rack to expose magnet… attach to U-scan Panel Use One Clamp and attach/tighten to IB

Rack & U-scan w/tool included Ensure rack is tight to U-scan. 1 Clamp is

primary support to Uscan & Rack

Set up POG, Tags, and ensure CAO is updated

Finished Visual

CRITICAL!!! – PLEASE ENSURE THAT RACK IS FLUSH. WE MUST ENSURE THAT NONE OF THE SHELVES STICK OUT BEYOND U-SCAN RACK WHICH WOULD IMPEDE INTO THE SHOPPERS AISLE. CRITICAL FOR SET UP

Hershey Retail Team 3-Tier Rack execution goals

Racks arrive to RSR’s (4 per store)

– Wave #1 week of 5/17 (also will get all clamps this week)

– Wave #2 week of 6/7

Based upon normal call coverage implement program starting 5/24

– Use authorization letter where needed plus buyer communication will go out to all Stop & Shop stores prior

Set up racks according to POG, pack out, tag, and leave re-order for next call (punch in sheet attached)

All U-scan racks set to expectations by 6/25

– If more racks are needed after initial placement based upon # of U-scans please direct to district advocates

– Any obstacles please let me know Store # and Mgr’s Name

ICE BREAKERS Cool Mint

1.5oz, 8ct, 34000-72060

#010164

BREATHSAVER 3HR Spearmint

1.2oz, 8ct, 34000-74136

#064331

ICE BREAKERS Wintergreen

1.5oz, 8ct, 34000-72062

#010170

ICE BREAKER & BREATHSAVER MINTS (3 Tier Rack per U-scan)

- Retail Price $1.99, 41% GP

Ice Breaker/Breathersaver Punch In Sheet…Stay in STOCK!

Program Projected Results @ Stop & Shop

All U-scan racks set to expectations by 6/25

Racks have the potential to deliver $501K

– 4 U-scan racks per store (avg)

– $112.90 store rack fill (12 boxes)

– $1,354.75 racks turn 2x per month over 6 months in store

– $501,258 racks turn 2x per month in 370 Stop & Shop stores

Increases our ACV on mints to support Drive for 35 objectives

Market Basket

Questions and Needs

New England Cycle 6 REM Conference Call May 11, 2010.

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