STORECHECK SEMINAR

ROLAND VERMOOTE
24/03/2009
SALES DIRECTOR
 Key driver…USP…

To consider each brand as a self-financed business
unit

To develop a strong USP as a technological barrier to

competetion

To continously develop new products by:

Identifying universal consumer needs and offering a solution

Inventing new product concepts rather than using existing ones

Using a high degree of innovation, never ‘me-toos’

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 Key driver…Obsession…

Quality


Raw materials : choice, selection and controls

Tests before a new launch

Freshness panel and Summer stop

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 Group Key figures


7,4 billion € turnover in 2008


20.000 employees


> 50 products


Present in 7 categories:
pralines/spreadable/industrial pastry/chocolate
snacks/dairy/drinks/pocket confectionery


15 plants


100% family owned company


Self financed projects


Leadership in :Italy, Germany & France
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 Ferrero Belgium : Key brands

REGULAR ASSORTMENT
- 15 PRODUCTS/BRANDS
- 40 CONSUMER PACKS

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 Ferrero Belgium : Key figures
113,7
growth ..
108.0
Turnover
In million euros

N° 2 in the chocolate
confectionery market
98.3


Leader with Nutella,
73.3 Ferrero Rocher and
Kinder Seasonal
products
58.9


In 20 years Ferrero
has multiplied by > 3
45.5 its turnover

30.8 Double digit growth
with same product
portfolio

1987 1991 1997 2002 2006 2007 2008

24/03/2009
 Ferrero Belgium : market results
BRING GROWTH IN THE MARKET !
TOP 16 (+3) : TURNOVER FOOD COMPANIES

TOP 7 (+5) : ABSOLUTE GROWTH

TOP 4 (+7) : RELATIVE TURNOVER GROWTH

TOP 1 : GROWTH INDEX( Share of growth/marketshare €)

N° 1 N° 2 N°1 & 2 N° 2 ….

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 Ferrero Belgium : know-how

MARKET LEADER PRALINES EXPERTISE IN PROMOTION

EXPERTISE IN SEASON-MANAGEMENT MANAGEMENT
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 Ferrero Belgium : Organisation
<2003 Status

TRADE MARKETING KAM+FIELD

COMMERCIAL PLAN
=
PROMO MANAGEMENT
+ = KAM + FIELD

EXPERIENCE

COMMITMENT

COVERAGE

SERVICE

PROMO DRIVEN

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 CASE « SUMMER »

DIAGNOSTIC

24/03/2009
 REASON WHY ??

STATUS
1 ECONOMIC STATUS : FERRERO, A COMPANY WITH 2 DYNAMICS

2 TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

3 CONSUMER STATUS : TOP BRANDS WITHIN CATEGORY, BUT ……

4 SHOPPER STATUS : CATEGORY WITHOUT LIMITS, BUT…..

24/03/2009
 1 ECONOMIC STATUS :FERRERO, A COMPANY WITH 2 DYNAMICS

Turnoversplit Ferrero 2006

SPLIT TURNOVER FERRERO

160

147

135

20,6%
113 111
103
93
91

71 70
66
79,4%

41

April-july
August-March

January February March April May June July August September October November December Turnover '06

Ferrero monthly turnover driven by season: 80% of turnover in 8 months

But fixed costs during 12 months : sales force, warehouse, housing, ...

Organisation: peaks and downs, technical unemployment,…

Date sensitive business

Monthly P&L
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 1 ECONOMIC STATUS : FERRERO, A COMPANY WITH 2 DYNAMICS

Expertise and strength

during season

REGULAR ASSORTMENT
- 15 PRODUCTS/BRANDS
- 40 CONSUMERPACKS

FRESHNESS POLICY

N°1 and driver of the category SUMMERSTOP

24/03/2009
 2 TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

OUTPUT SUGAR&CHOCOLATE CONF. MARKET €:

Index vs average

134
125 123
121

108 108

94 93
88 89
83

…… 65
69

Sugar&Choc Market '06

w1-5 w6-9 w10-13 w14-17 w18-21 w22-25 w26-29 w30-33 w34-37 w38-41 w42-45 w46-49 w50-01

Confectionery and sweet products represents +/- 12% of FMCG turnover but during
summer months dynamism drop-off (+/- 10%) :
- less SKU’s => space on shopfloor/shelf/….
- less rotations linked to consumption habits …or abilities
- trade priority : soft drinks, barbecue…..

24/03/2009
 3 TOP BRANDS WITHIN CATEGORY, BUT ……FEW WITHOUT CHOCOLATE
(quality risk) AND …

HIGH TOP OF MIND , STILL INCREASING, BUT

LOW RECRUITING …..

KINDER BUENO: CANDYBAR FOR YOUNG ADULTS

TOPPER WITHIN CANDYBARS, BUT LINKED WITH

KINDER CHOCOLATE AND SURPRISE
CHILDREN IMAGE

CHOCOLATE SNACK

THE SUMMER PRALINES (without chocolate)

OF FERRERO: LOW AWARENESS

24/03/2009
 4 SHOPPER: CONFECTONERY, A CATEGORY WITHOUT LIMITS

Only 48% of confectonery shoppers plan it!

45%
the actual product that w as
purchased

30%
a particular type

20%
only the purchase of
confectionery in general

6%
only the brand

0% 20% 40% 60%

in percent of cases

BUT CONFECTIONERY SHOPPER HAS NO EXCITEMENTS

DURING SUMMER TIME
always (6) 12%

Very often (5) 28%

When you see, you buy! 32%
often (4)
What is the closure rate?
sometimes (3) 17%

Nearly never (2) 9%

never (1) 2%
5% 10% 15% 20% 25% 30% 35%
0% %
24/03/2009
 CASE « SUMMER »

OBJECTIVE

24/03/2009
 Objectives:

1 360° Project evolving the whole company

Create during the summer months, additional turnover

2 for the category without hurting regular business

3 Using the « Marketing Mix summer project » for brand

building on the regular brands

4 Create category dynamism : concept

AND

5 Create internal and external « goodwill » and

« breakthrough » for the trade marketing dpt

24/03/2009
 CASE « SUMMER »

THE PROJECT

24/03/2009
 ACTION PLAN :

1 PRODUCTS: BESIDES OUR REGULAR RANGE, IN-OUT FOR 4 MONTHS

SPECIFIC SUMMER PRODUCTS

MIX MEDIA ADVERTISING SUPPORT: USING NEW COMMUNICATION

2 TOOLS TO COMMUNICATE PRODUCT DYNAMISM

3 NO PROMOTION SELLING BUT CONCEPT SELLING

4 DEVELOPPING FLOOR CONCEPTS : FROM HYPERMARKET TO PROXIMITY

5 DYNAMICS OF ALL : FERRERO-TEAM

24/03/2009
 1 PRODUCTS: BESIDES OUR REGULAR RANGE, IN-OUT FOR 4 MONTHS
SPECIFIC SUMMER PRODUCTS

SUMMER TASTE: IN-OUT PRODUCTS TO BRING DYNAMISM

SUMMER PRODUCTS: NO PROBLEMS WITH QUALITY WHEN SUMMER HEAT

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 MIX MEDIA ADVERTISING SUPPORT: USING NEW COMMUNICATION
2
TOOLS TO COMMUNICATE DYNAMISM OF PRODUCTS

Targeted projects with limited investments to create awareness and trial

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 3 NO PROMOTION SELLING BUT CONCEPT SELLING

SUMMER APPROACH WAS THE OPPORTUNITY FOR TRADE-MARKETING

TO DEEPEN A RELATIONSHIP WITH TRADE :

Before:

- Contacts where based on promotion and seasonal discussion

- No launches in the last 5 years
- Not perceived as full 360° supplier

Now:

- Relationship based on facts and figures has been built : adding value to the category
- Ferrero is now not only perceived as the company of Nutella, Christmas and
Eastern but also as a full 360° supplier
- Shopper love to eat confectionery products also in summer time

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 4 DEVELOPPING FLOOR CONCEPT FROM HYPERMARKET TO PROXIMITY

HYPER SUPER

PROXIMITY
PRODUCTS PRESENTATION
DECLINED FOR ALL CHANNELS

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 CASE « SUMMER »

RESULTS

24/03/2009
 1 ECONOMIC STATUS :FERRERO, A COMPANY WITH CHANGING DYNAMICS

Turnover increase 08 vs 06 SPLIT TURNOVER FERRERO

+49%
20,6% 23,6%

+28%

79,4% 76,4%

April-july
August-March

Turnover '06 Turnover '08

August-March April-July

Turnover increased with 49% in 2 years, better split of turnover between months
Increase
… of warehousing activities : +28% of cartons, +17% of pallets movement

24/03/2009
 2 TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

OUTPUT NIELSEN €: CHOC.&SUGAR CONF. Index vs Avg

134
130
121 123
Sugar&Choc Market '06
115
Sugar&Choc Market '08
108
107

93
87 89
88
85 83
81 81
77
69
65

w14-17 w18-21 w22-25 w26-29 w30-33 w34-37 w38-41 w42-45 w46-49 w50-01

The gap versus average decreases during april-june

24/03/2009
 2
TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

MARKETGROWTH IN APRIL-JUNE

Output in Million €
Output 06 Output 08 Growth %
Market 57,90 63,1 5,2 m 9,0%
Ferrero 4,2 6,5 2,3 m 54,8%

Share 7,3% 10,3% 44,0%

• Market of Choc & Sugar Confectionery increased by 9% (vs + 5% YA)

• Chocolate Confectionery now represents 11% of FMCG (vs 10% before –

still 1% gap)

24/03/2009
 3/4 CONSUMER/SHOPPER STATUS : TOP BRANDS WITHIN CATEGORY
Results :

+ 19 % Output Open Market

+ penetration: 12.7->16.4

+ 166.000 new consumers

+ purch.frequency 2.6=>3
…
+ 40% Output Open market

+ penetration: 11.7=>15.7

+ 180.000 new consumers

+ 53%=>59% repeaters

+…

2ND BRAND IN MARKET

24/03/2009
 Ferrero Belgium : Trade Marketing Team
LISTEN
GFK
Quality
Marketing Nielsen UNDERSTAND
Promotion
Supply COLLECT
P&L
Chain Trade
Marketing Price
ANALYSE
IT Management

STRUCTURE Shelf
Promo Finance
Analyses
INFORM Distribution

NOURISH/FEED

INVOLVE

ADDED VALUE
COMMERCIAL PLAN
KAM + FIELD
24/03/2009