KIND Marketing

8/3/2019 KIND Marketing

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Industry analysis Competitive analysis Smartest & dumbest marketing tactics Previous KIND marketing elements Marketing research Consumer touch points map Perceptual maps Lessons learned SWOT analysis Brand positioning


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Industry Analysis


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In 2011, retail current value sales of snack bars are expected to increase by 7% toUS$5.7 BN, whilst retail volume sales are expected to increase by 5%

Massive growth in energy and nutrition bars, stronger growth in breakfast bars. Energy and nutrition bars is expected to continue its recent boom with value

sales increasing by 13% to reach US$2.0 BN in 2011 With an expected increase of 2% in 2011, unit prices increase faster than the

annual average By 2016, snack bars is expected to increase by 14% to reach US$6.5 billion While the category has proven to be quite resistant to recession, there is some

indication that growth will slow from 2011-15 due to market saturation and as the

market reaches maturity Companies seeking significant growth from 2011-15 will want to focus some of

their efforts on recruiting new customers, in particular those who have nottraditionally been nutrition and energy bar users. Brands may find that school-based distribution effortsfrom elementary schools to college campusesmayprove to be an effective way to drive future sales and create long-lasting brand

relationships


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Consumers are reaching for energy and nutrition bars tosupplement their regular eating habits, while some time-crunchedconsumers even substitute a bar or two for an entire meal

Large % of ones daily requirement of vitamins, calcium, proteinand fibre are increasingly being complemented with natural grainsand berries

Common perception of energy and nutrition bars has changedfrom chalky, utilitarian food for workout junkies or crash dieters toflavorful and healthy snacks

Smaller brands have cultivated hip, socially-conscious lifestylebrands which appeal to younger, more affluent consumers.

Fruit bars is not positioned well for growth. Many of the productsin this category are laden with sugar, corn syrup, preservatives,artificial colours and partially hydrogenated oils. Whilst many ofthe products contain added vitamin C, they are not commonlyviewed as healthy snacks.


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200

220

240

260

280

300

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

By Volume ('000 tonnes)

281.5

262.2


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4,000

4,500

5,000

5,500

6,000

6,500

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

By Value (US $MM)

6,470

5,684


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19.5%

34.3%11.6%

29.7%

4.9%

2011

19.0%

36.6%9.6%

30.5%

4.3%

2016

Breakfast Bars

Enerygy and Nutrition Bars

Fruit Bars

Granola/Muesli Bars

Other Snack Bars


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Industry Analysis


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Non-Store Retailing

Other Non Grocery Retailers

Health and Beauty Retailers

Other Grocery Retailers

Small Grocery Retailers

Discounters

Supermarkets/Hypermarkets

Small grocery retailersinclude convenient stores,independent small grocers,and forecourt retailers Non-store retailingincludes vending machine

and online retailing

40.2% 40.6% 40.8% 41.0% 41.1% 41.2%

9.2% 9.2% 9.3% 9.4% 9.4% 9.5%

16.9% 17.1% 17.1% 17.1% 17.2% 17.2%

4.3% 4.5% 4.7% 4.6% 4.5% 4.5%

28.5% 27.5% 27.0% 26.8% 26.8% 26.4%

0.9% 0.9% 1.0% 1.0% 1.0% 1.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

(% retail value rsp)


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And at an average of 2.48 occasions per day, snacking is more than just anoccasional activity for most kids

Kids cite a wide variety of snacking occasions. Watching TV is the most frequentlycited snacking occasion in all gender/age groups, mentioned by more than three

quarters of kids. Snacking while watching TV can happen nearly any time,including after dinner and on weekends, but likely most often happens afterschool

The idea that snacking can be a family activity is reflected in the finding thatmore than half of kids, consistent across gender and age, say they snack withtheir mom or dad

Kids are interested in trying new kinds of snacks, a finding consistent with thenotion that novelty and fun are key ingredients in snacking. In fact nearly half ofkids say they sometimes snack just for fun, even when theyre not hungry. Theimplication for marketers and retailers is that refreshing product lines with newflavors and textures is a key to maintaining interest and engagement.


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Only 12% report buying snacks from school vending machines, a finding thatreflects the lower incidence of vending machines in elementary schools.

Six kids in 10 say they really like snacks that come with free surprises in thepackage.

Between 2010 and 2015 the population of younger kids will grow faster than thatof their older counterparts. Kids aged 11 and under are projected to increase4.7%, more than twice the 2.2% rate projected for kids aged 12-17

While the difference is not dramatic, faster population growth among kids aged11 and under ensures that they will remain a primary target for snack foodmarketers


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Total Boys 6-8 Boys 9-11 Girls 6-8 Girls 9-11

Base: kids 6-11 who eat snacks/treats between

meals

480 120 120 120 120

Favorite (1st, 2nd or 3rd favorite)*:

Chips or pretzels 32% 37% 36% 20% 35%

Cookies 25% 23% 27% 33% 18%

Fresh fruit 23% 19% 13% 33% 28%

Fruit snacks (like roll-ups or strips) 22% 18% 23% 23% 23%

Ice cream 20% 20% 23% 18% 20%

Yogurt or yogurt drinks 20% 20% 18% 23% 18%

Popcorn 19% 20% 14% 18% 25%

String cheese or sliced cheese 19% 18% 17% 23% 19%

Frozen treats (like popsicles) 12% 14% 9% 12% 13%

Crackers 11% 13% 10% 10% 13%

Pudding cup 11% 14% 13% 7% 9%

Cupcakes, snack cakes or pies 11% 9% 13% 10% 10%

Candy bars 11% 7% 20% 3% 13%

Nutritional snacks (like cereal or granola bars) 10% 8% 9% 13% 10%

Pizza rolls or bites 9% 13% 14% 4% 6%

Cereal by itself (plain and with no milk) 7% 12% 3% 9% 3%Cold cereal with milk or so milk 6% 7% 9% 3% 3%

Favorite healthy snack, among kids 6-11, by gender and age, March 2010Question: Of the snacks that you eat, what are your three favorites?


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Favorite healthy snack, among kids 6-11, by gender and age, March 2010

Question: Of the snacks that you eat, what are your three favorites*?

* Results show the percentage of respondents that indicate that a given snack is their favorite,

second favorite, or third favorite snack.

Source: Mintel

Total Boys 6-8 Boys 9-11 Girls 6-8 Girls 9-11

Base: kids 6-11 who eat snacks/treats between meals 480 120 120 120 120

Healthy snacks:

Fresh fruit 63% 58% 58% 64% 69%

Fruit snacks (like roll-ups or strips) 52% 48% 55% 53% 54%

Yogurt or yogurt drinks 48% 45% 46% 49% 53%

String cheese or sliced cheese 46% 43% 42% 52% 48%

Nutritional snacks (like cereal or granola bars) 42% 41% 38% 39% 49%Raw vegetables 28% 23% 24% 32% 33%

Nuts 25% 28% 25% 21% 28%

Snack mixes (like nuts and raisins together) 25% 21% 26% 24% 29%

Dried fruit (like raisins or apricots) 19% 16% 15% 21% 23%


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KeyPlayers

MarketingStrate

gies

Spending

&Advertising

Pricing

M

erchandisin

g


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Variety:Crunchy Granola Bars (9 flavors)Chewy Trail Mix Granola Bars (3)Chewy Granola Bars w/ Yogurt Coating (2)Sweet & Salty Nut Granola Bars (5)

Roasted Nut Crunch Granola Bars (2)

Sales ($mm):

2008 - $3452009 - $3742010 - $402

PepsiCo

Granola Nut Clusters (3)Granola Thins (2)

Sales ($mm):2008 - $4892009 - $4742010 - $542

General Mills

11 varieties including: granola bars,oatmeal to go


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19 flavors Sales ($mm):

2008 - $25

2009 - $372010 - $54 General Mills


2008 - $46

2009 - $392010 - $35 Coca-Cola Co

Variety:GOLEAN, Chewy/Crunchy Granola,Cereal Bars, Layered Granola


2008 - $1322009 - $1462010 - $153

Kellogg


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5 flavors Natures Path

revenue was

$150mm in 2007and was growingannually at 20%

Natures PathFoods

13 flavors Launched new kid-

approved bars in August2011 in two flavors:Oatmeal raisin and Peanutbutter chocolate chip

General Mills

7 flavors Total sales ($mm) for Clif Bar Inc:

2008 - $1682009 - $189

2010 - $274* Clif Kid Z Bar attributable for

~11% of total sales


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2008 - $186 2009 - $204 2010 - $213 Kellogg

3 flavors General Mills

Variety: Fruit & Nut 11 flavors

Plus 8 flavors Mini 4 flavors Healthy Grains 6 flavors


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Competitors rely heavily on ATL advertising Big CPG companies do not have the same

type of user community that KIND does Brand positioning is as a healthy snack simply

because it falls in the granola bar category exploits consumer lack of education about

healthy foods Discounting is used to encourage consumers

to taste their product


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Top Advertising Spenders Dollars Spent on Advertising Main Medium

Nature Valley (1) $10,342,720 TelevisionSoyjoy (2) $5,309,540 Magazines

Nutri-Grain (3) $4,875,590 Television

Quaker Chewy (4) $2,696,550 Television & Magazines

KIND Snacks (9) $191,000 Outdoor


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$0.39$0.46 $0.52

$0.57$0.69 $0.70

$0.83

$1.28 $1.29

$1.89 $1.92$2.00

* Price per single-serving barcalculated as average price acrossmultiple retailers


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Natural Grocery Channel

Crowded snack bar aisle. Brands Kashi, Clif,Lara, Cascadian Farm, KIND, and Natures

Path enjoy dominant shelf positioning.


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Drug Channel

Product assortment is a mix of Energy &Performance bars and Diet bars, positionedalongside energy drinks and supplements


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Drug Channel

End cap displays feature brands Natures

Valley and Kashi


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Traditional Grocery Channel

Quaker Chewy features teen celebrityNick Jonas on packaging . Brands NatureValley, Quaker Chewy, and Fiber Oneenjoy dominant shelf positioning.


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Other Channel: AirportOther Channel: School Cafeteria


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DUMBESTSpecial K: Strut Your Sassy

SMARTESTQuaker Chewy: Nourish their Play


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Marketing strategy driven by sampling and POSdisplay Touching consumer when most effective when hungry or

making purchase decision

Coupons and mailers to promote sampling Very limited use of advertising

Only a few billboards and street furniture Cause marketing

KIND Movement as a way of engaging customers withbrand mission Website & Social media

Interacting with customers online


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Sampling

Goal to try and find people in a time of need

(when they are hungry), and sample them Best conversion rate of sample to regular

consumer of any bar brand

Best marketing dollar spent is to provide someone

with a KIND bar in a time of need


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Sampling KIND Food Truck


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Sampling At the point of need


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Point of Sale Marketing

In-store displays & placement near register


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Point of Sale Marketing

In-store sampling


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Targeting influential groups and individuals Culinary Community

Nutrition, bold taste, whole ingredients

Health & Wellness Community Gym-goers, nutrition experts, yoga and pilates

Support pro athletes avoid competitive athletics

Culture Groups Art, music, and fashion

Product seating in green rooms, VIP rooms, etc


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Media & Advertising

Very limited use of advertising

To-date only street displays billboards, posters, streetfurniture


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Cause Marketing The KIND Movement


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Using cause to promote trial, word of mouth


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Social mission being pushed by charismaticfounder creates many PR opportunities

KIND gets much more press coverage than CLIF,even though CLIF is a much bigger company


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Website & Social Media

KINDAHOLICS & KIND Advantage

Direct sales to customers & subscription service


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Website & Social Media

Facebook & Twitter

Use social media to interact with customers as well asmerchants and partner brands

Reinforce brand image & messaging


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Kind

In-storeRetail

CompanyWebsite

SocialMedia

PR &Media

(TV, Print)GrassrootSampling

Truck

OutdoorAdv

OtherRetail(Caf,

Airport)

RegionalPartners(e.g. Zip

Car)


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YMCA

Daycare

Summer Camps Convenience Stores

After

School

School Cafeteria

Vending Machines

Sports Stadiums School Fundraisers

During

School


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Whole Fruit/Nuts

HighPriceL

owP

rice

Processed


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Gluten free

KidsSnack

AdultSnack

Gluten


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Diverse FlavorRange

Healthy

Unhealthy

Uniform FlavorRange


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Lesson Learned Implication

KIND s strength is in sampling: ithas a 70% conversion rate

To reach children, KIND shouldoffer sampling when children havea time of need, such as at schools orchildrens sporting events

KIND has been able to attractpositive media attention betterthan competitors

To reach the kids segment, KINDshould target influencers in thesphere of childrens health andnutrition

Competitors heavily use ATLadvertising and discounting tocreate brand awareness

To compete with more establishedplayers, KIND needs to invest morein marketing, either by increasingsampling or trying ATL advertising


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all

INTRNA

ORGIN

EXRNA

ORGIN

STRENGTH WEAKNESS

OPPORTUNITY THREAT

* All natural fruit & nut positioning* Heavy PR & media exposure* High conversion rate* Gluten & wheat free. Non GMO

* Wide flavor product range* Strong social mission

* Low brand awareness* High price point* Limited distribution* Limited advertising support

* Lack of kid snack positioning

* Fragmented competitive

landscape dominated by largeCPGs with deep distribution

* Heavy industry print advertising& celebrity endorsements

* Deep retail promotions

* Sales via school-based

distribution channels* Kid size package size* Multi-pack vs. single serving


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To parents, teachers, and caretakers ofschool-aged children, Kind snacks is a

convenient snack bar that is both nutritiousand delicious with wholesome ingredientsyou can see and pronounce, which is good

because growing children need healthy food

to build healthy bodies

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KIND Marketing

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