Saxonville® Sausage: The Italian Opportunity!

AXIS Consulting LTD.!

Current Situation!

0% growth in overall sausage!

15% growth in Italian sausage!

16% Vivio® market penetration!

20% annual organics growth!

Strengths & Weaknesses!

Strengths:!    !•      Ability to distribute fresh products nationally!•      44% adult population prefer fresh!•  Matched category growth level!•      Favorable brand image!

Weaknesses: !     !•      Not a first mover in Italian sausage market!•      In-store promotional marketing only!•  Small national presence !•  No “true Italian” heritage!

Opportunities & Threats!

Opportunities: !

•      Growing Italian sausage market!•      Desire for tasty, easy family meals!•  Growing organic and “natural" markets!•      No national players in fresh Italian sausage !     !Threats: !

•      Local producers!•  Higher spending by potential rivals!•      Increased frozen sausage consumption!

GE / McKinsey Chart Analysis!

Business Unit Strength!

Mar

ket A

ttrac

tiven

ess!

High! Medium! Low!

High!

Medium!

Low!Vivio®    

Brats  4%!

36%!

Plan Objectives!

•  Take Vivio® national!

•  Focus on cohesive branding!

•  Increase sustainability!

•  Introduce Vivio® Organic line !

Branding!Vivio® !

•  Market presence!•  Positive testing!•  Less costly !

Positioning statement: ! “Bringing families together with fresh healthful

Italian sausage”!

Unique Selling Propositions:!

•  A national line of fresh Italian sausage!•  Makes for easy and delicious family meals !•  The versatile ingredient no family should go without!

Promotional Strategies!Strategies for Vivio® Natural!•  Labels with recipes!•  Recipe sharing with strategic partners!•  Coupons and discounts with strategic partner!

Strategies for Organic line!•  Co-branding with local organic producers !•  Encourage local producers to promote Vivio® !

Vivio® Natural Vivio® Organic

Product!

Vivio® Natural!

•  Drop hot sausage ground!•  Drop Italian pepper sausage!

Vivio® Organic!•  Recipe licensing !•  Produced organic farms!

Packaging!

Re-sealable sustainable packaging created by Ecoproducts®!Smaller labels to showcase product!Recipes on back of label!

Vivio® !“The versatile ingredient no family should go without”

Distribution!

Existing distribution chain for Vivio® Natural!•  Fresh suppliers!•  Sold to wholesalers!•  Promoted in chain stores.!

Organic line licensed in the Pacific and Northeast!

Industrial Standard!

• Revenues of $1.5 Billion!

• COGS of $1.223 Million (81.54%)!

• Gross Margin $276.9 million!

• Promotional Expense of $11.850 (.79%)!

• Net Profit of $39.6 Million!

Spending to Compete!

2004 – 2005 breakfast sausage hemorrhaged more than $33,000,000 in

revenue

Recommendation: $12 million introductory promotional campaign!

Organizational goal cannot be realized without a financially supported

promotional campaign!

Financial  Forecast!

2006! $24,400,571!2007! $46,046,137!2008! $54,203,610!2009! $62,768,957!2010! $71,762,571!

$175,149,937 NPV !

Vivio® !

“Bringing families together with fresh healthful Italian sausage”!

Questions?  

Financial Outlook!2006 2007 2008 2009 2010

Pessimistic (net) -$15,135,824 -$10,184,204 -$4,994,249 $455,204 $6,177,130 Inflows $520,296,286 $546,361,100 $573,676,655 $602,357,988 $632,473,387 Outflows $535,432,110 $556,545,305 $578,670,904 $601,902,784 $626,296,257 Expected (net) $31,139,287 $53,455,464 $62,009,998 $70,992,259 $80,423,633 Inflows $783,073,747 $900,527,309 $945,551,174 $992,826,233 $1,042,465,045 Outflows $751,934,460 $847,071,845 $883,541,176 $921,833,974 $962,041,411 Optimistic (net) $36,982,104 $72,639,173 $82,175,917 $92,189,499 $102,703,760

Inflows $816,202,719 $1,003,917,845 $1,054,111,23

7 $1,106,814,29

9 $1,162,152,513

Outflows $779,270,615 $931,278,672 $971,935,320 $1,014,624,80

0 $1,059,448,754

Weighted Average $24,400,571 $46,046,137 $54,203,610 $62,768,957 $71,762,571

NPV $175,149,937