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TO:Executive Committee

FROM:Energade Product Manager (via you, Group Product Manager)

SUBJECT:Energade Business Plan for 2003

The projected volume increase of 4% is an ambitious goal, in light of the following factors:

An increasing competitive environment with Energade.

Facing major competitors such as: Tummylicious, Good Foods, Energade, and Tastytime.

Overcoming competitor’s success such as:
1. Good Foods’ superior dissolving and taste characteristics. 2. Tastytime’s ability to double its market share in 2000. 3. Heavy media support for Tummylicious, and other competitive brands.

Energade’ inability to dominate advertising spending

Energade’s share decline of 65% in 2001 to 42% in 2002, and then declining to an estimated 35% in 2003.

Energade’s $.59 price increase raises uncertainty about the precise volume impact (heavily reliant on teenage/young adult purchases). Contributing to this uncertainty is the, quick, sugarless mid-year price increase of $.69 (only one year after its launch).

Despite all these factors, the volume goal is viewed as attainable, given the Brand’s business building plans. Essential elements of this plan include:

a) The full year impact of the new Strawberry sugar flavor, introduced in June 2002. The new flavor was used to pre-empt Tastytime’s launch of the raspberry flavor; already marketed in Europe.

b) The launch of a sugarless lemon flavor, in cycle II, helped capitalize on the project’s brand superiority.

c) During the first quarter of next year, there will be an implementation of a product improvement program on all sugar flavors. This will help increase purchases and consumer satisfaction. I will also insure that our product performance is at least unsurpassed, within the category.

d) The use of effective deployment in special promotions will help increase distribution, and inventory of day supplies in all retail outlets. It will also stimulate consumer...
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