Brannigan Foods OUTLINE
Srikant Tipha – Director of Simple Meals
Suggested Strategy
1) Raise Investments in Dry Soups / Healthier Soups / Fast Meals
2) Increase advertising investment in Fast & Simple Soup meals and Heart Healthy Soup line.
Fast & Simple Soup meals addresses the market demand created by professionals and working mothers looking for quick, healthy meal. Sales of this line are growing @ 12%. Interesting to see this is growing without advertising so why spend?
Heart Healthy Soup line with low-sodium is well positioned to address the concerns of the over-50 consumers.
3) Provide promotional couponing and sampling of hot new flavors, in particular dry mix Gazpacho and Teriyaki Beef Fast & Simple meal. Why these two?
Gazpacho increases sales during warmer months, decreasing seasonality.
Teriyaki beef positions company in fast growing Asian soups category.
4) Continue to promote dry soups, even if they cannibalize Ready-to-Eat (RTE) soups.
Bottom Line
Srikant wants to increase advertising and promo spending by $18 million. He thinks this should help stop the slide in sales and market share, but this will also reduce next year’s profits.
Whats wrong with this proposal?
The CEO will not like that profits will be revised downward in 2013. Plus although the trend in the future was toward healthier options, it didn’t necessarily mean this will come to fruition as close to 70% of the US was overweight and interested in changing their eating habits so why chase a trend which may not even be working?
Claire Mackey – Director of Finance & Planning
Suggested Strategy
M&A, Claire wants to buy a small competitor who offers healthy and more convenient soups as well as flavors that are gaining in popularity (Mexican, Southeast Asian)
Bottom Line
Claire likes Red Dragon Foods the best; they have $36 million in sales
EBITDA $4.2million.
Acquisition will probably add around 1.5 to 3.5% to sales within five years. Red
Suggested Strategy
1) Raise Investments in Dry Soups / Healthier Soups / Fast Meals
2) Increase advertising investment in Fast & Simple Soup meals and Heart Healthy Soup line.
Fast & Simple Soup meals addresses the market demand created by professionals and working mothers looking for quick, healthy meal. Sales of this line are growing @ 12%. Interesting to see this is growing without advertising so why spend?
Heart Healthy Soup line with low-sodium is well positioned to address the concerns of the over-50 consumers.
3) Provide promotional couponing and sampling of hot new flavors, in particular dry mix Gazpacho and Teriyaki Beef Fast & Simple meal. Why these two?
Gazpacho increases sales during warmer months, decreasing seasonality.
Teriyaki beef positions company in fast growing Asian soups category.
4) Continue to promote dry soups, even if they cannibalize Ready-to-Eat (RTE) soups.
Bottom Line
Srikant wants to increase advertising and promo spending by $18 million. He thinks this should help stop the slide in sales and market share, but this will also reduce next year’s profits.
Whats wrong with this proposal?
The CEO will not like that profits will be revised downward in 2013. Plus although the trend in the future was toward healthier options, it didn’t necessarily mean this will come to fruition as close to 70% of the US was overweight and interested in changing their eating habits so why chase a trend which may not even be working?
Claire Mackey – Director of Finance & Planning
Suggested Strategy
M&A, Claire wants to buy a small competitor who offers healthy and more convenient soups as well as flavors that are gaining in popularity (Mexican, Southeast Asian)
Bottom Line
Claire likes Red Dragon Foods the best; they have $36 million in sales
EBITDA $4.2million.
Acquisition will probably add around 1.5 to 3.5% to sales within five years. Red