Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Consulting
Arla
Becoming the go-to dairy brand
EVA
1
Executive Summary EVA
Consulting
How can Arla Foods ensure that dairy and the Arla brand is trusted and relevant for younger consumers in
Question Europe so that it can deliver on the Good Growth 2020 targets and build a strong, sustainable foundation for
the future?
Arla Milk+ milk and yoghurt line – ‘Clearer picture with Arla’ marketing
transparent, on-the-go packaging, vitamins, campaign over Europe - ATL, digital, event
Strategy unique flavours sponsorship
Arla Milk Bar transparent concept cafes with Distribution network extended to cafes,
MILKING THE complementary milk menu AHEAD OF events and vending machines
BENEFITS THE HERD
Impact
2
Milk growth curdling worldwide as customer perceptions sour… EVA
Consulting
Industry analysis
Dairy milk is decreasing whilst plant-based milk sales increase… … forecasted to continue negative impact on Arla’s revenue
11% EU dairy
milk drop by
Volume (kg)
2020
EUR m
19.1%
increase in
plant based
milk sales
2014 2015 2016 2017 2018 2019 2020
... however there are opportunities for growth as the dairy market will
Due to milk losing relevance to customers…
reach $800b by 2020 CAGR
2015-2020 (%) APPROX MARGIN (%)
natural
41%
Dairy desserts 4 12 - 15
do not associate milk
68%
Fromage frais and quark 5 N/A
804
ingredients with health/organic Cream
Powdered milk
6
14
5-7
15 - 20
matter 10%
Non-dairy alternatives
Other dairy
15
9
10 - 15
Variable
Flavored milk drinks 10 5 - 10
Drinkable yogurt 8 10 - 15
ethical and
31%
do not trust
31%
497 Spoonable yogurt 13 7 - 12
sustainable sourcing large dairy Milk formula 10 15 - 25
companies
20%
Milk 7 0-5
36% flavor
matters
36% prefer non-milk
alternatives due to
taste
30%
Cheese 12 5 - 10
Arla must build brand trust and focus on growing dairy segments to regain relevance with its customers
Euromonitor, Mintel report, SRUC report, Nielsen, Comax survey, Case brief; See Appendix 34 for further category analysis 3
… leading to a decline in the milk category choice and Arla brand recognition EVA
Consulting
Issue analysis
No
No
No
No
No
Non-dairy Non-dairy
68% alternatives e.g. 43% alternatives 52% 36% 70%
do not associate do not trust prefer non-milk Choose value perceived Choose Europeans Choose
plant-based e.g. plant-based
milk with health large dairy alternatives due health benefits skip breakfast
companies to taste
competitor competitor competitor
To reduce barriers towards category and brand choice, Arla must modify its product mix and develop a clear communication strategy
Consumers are increasingly demanding company transparency They are growing in health consciousness and awareness
257%
Increase in the number of
vegan food and beverages
over the last 5 years
Consumers value convenience and accessibility… … whilst also enjoying the experience economy
64% 72%
New sensory experiences Enjoy experimenting
entice consumers to experiment with different yogurt
with milk products flavors
Arla must respond to these trends to increase relevance of dairy and build a unique brand story
Dairy reporter, Euromonitor, Supermarket news, Deloitte, PwC, CNBC, Mintel Global Food and Drink Trends 2017 5
Tactics have been evaluated on its impact towards improving milk category perception, EVA
contribution towards Arla’s brand sales and feasibility Consulting
Strategy selection and tactic evaluation
Distribution
Fitness branding
* tactics towards the center are more
Milk bar in-house favourable
Yoghurt health line
Track food source
app Sponsor food events
Health added line Cooperative marketing
Milk is losing its relevance to young people due to negative perceptions towards the dairy industry coupled with dairy brands lacking a compelling
Issue:
story that rebuilds trust and reconnects with its younger customers
How can Arla Foods ensure that dairy and the Arla brand is trusted and relevant for younger consumers in Europe so that it can deliver on the Good
Question:
Growth 2020 targets and build a strong, sustainable foundation for the future?
1 Rebuild LEADING TRUST with milk How can Arla be more transparent with customers? MILKING THE BENEFITS
Arla Milk+ milk and yoghurt line – transparent
on-the-go packaging, vitamins, unique flavours
How can Arla develop a product aligned to customer Arla Milk Bar transparent concept cafes with
2 Redevelop RELEVANCE of milk
preferences? complementary milk menu
How can Arla increase awareness of milk benefits and AHEAD OF THE HERD
3 Boost brand AWARENESS
become synonymous with it? ‘Clearer picture with Arla’ marketing campaign over
Europe – ATL, digital, event sponsorship
How can Arla ensure its products are at the right place at Distribution network extended to cafes and events
4 Increase points of ACCESSIBILITY
the right time?
7
EVA
Consulting
8
Arla must strategically position itself to target changing customer behaviours EVA
Consulting
Customer and competitor analysis
Ethical Advocate
Building brand through:
Trust Relevance
Increasing transparency of the products Millennials are now reaching for other
sold and of the brand itself. This dairy options rather than milk because
includes organic product offerings, and of lack of interest stemming from
milk facts to promote nutrition health, diet, and inconvenience
Time Rich Fast Mover
Would purchase food
Expressed a desire for
45% items that improve
70% more transparency
health such as
probiotics/vitamins
40% 69%
€360m incremental revenue by 2020
Believe that they Use milk as an
are trustworthy addition to other
food
9
Introducing: Arla Milk+ product line of milks and yogurts EVA
Consulting
New product line details
Biodegradable packaging Transparent ingredient design that’s ‘ready to go’ Health Benefits
• Environmentally friendly packaging • Clear bottle design that features text that is the same • Added vitamins and omega to benefit every health
colour to the liquid appears after drinking conscious consumer
• Partner with Plant Bottles, Enso Bottles, MH Plastics
• Message: calories, ingredients, nutritional information, • Features: Vitamin D, Vitamin A, Omega 3, and
• Millenials willing to pay 30% more for animal welfare, motivational impact fibre added to customer-friendly flavours.
sustainable packaging
• 92% want in-depth information on packaging
The rebranded packaging alongside the new product launch will reconnect millennials to Arla by building relevance by meeting preferences
Motivations
I want to
have
something
healthy for
breakfast
12
Arla is capable of entering the physical retail space EVA
Consulting
Implementation
Store rollout should focus on existing markets… …and carefully manage its organisational change
Key actions:
Outsource advice for first concept store, and use same model for
2 subsequent rollouts
Implement staff training programs to ensure that all new and old
3 employees understand the market that they work in
14
Arla should develop a pan-European, whole-brand marketing campaign EVA
Consulting
Strategy overview
Digital Supermarket
Current marketing campaigns are strong… …but are behind some competitors in driving engagement
Instagram followers
Chobani
Siggi's
Yoplait
Yeo Valley
Arla
…and are failing to convince consumers of key points… …and should use the launch of Milk+ to change this
Brand perception (amoung select EU residents)
Dynamic brand
Have natural products HAPPY
COWS MADE
THIS MILK
THROUGH
WELFARE
Messaging responding to concerns
WORKSHOPS
of consumers and creating
excitement around the brand
Are authentic and trustworthy
0 20 40 60 80 100
17
Arla’s campaign will generate maximum awareness across multiple European cities EVA
Consulting
Awareness and marketing
Arla should use a diverse marketing mix… …to ensure reach across all key EU markets
18
Younger consumer demand convenience when purchasing EVA
Consulting
Customer analysis
Younger consumers expect companies to meet their specific needs… …providing an opportunity for Arla to lead in this area
Preferences by generation
Milk traditionally What young consumers want
Doesn't like buying large volumes of products at once
Sold in grocery store for weekly Product available when and where they
purchase want it
Allows customers to avoid the stress of preparing food while allowing them to eat at home
Developed app to make ordering food as easy as possible
Source: PWC 19
Arla should ensure it is available to consumers as they demand it EVA
Consulting
Distribution channels
• Less formalized as a • Within 200m of • Includes cafes, gyms • Quickly growing • Allows for quick and
process for young 50%+ of Europeans and cinemas segment for customer stress-free access to
people in urban cities • Generally locations food and beverage products in central
Analysis • Does not always sell associated with spend locations
• Good format for
products that are pushing impulse buys beverage purchases • Esp. popular with • Low labor cost
ready to go younger consumers
Product line to
provide
IMPACT
MOO-VING AHEAD
21
Our strategies will achieve €600m in incremental Arla Brand revenue by 2020 EVA
Consulting
Financial impact
Reversing the downwards trend in revenue by 2020… ... through a focus on high value yoghurt and milk products
9,600 4.6%
9,400 264 4.4%
9,200 4.2%
Revenue (EUR m)
172
336
EBIT Margin
9,000 226 272 4.0%
8,800 3.8%
8,600 3.6%
8,400 3.4%
8,200 3.2%
8,000 3.0%
2017 2018 2019 2020
Status quo Milking the benefits Ahead of the herd EBIT Margin
Achieving ‘Good Growth 2020’ targets Our strategy will generate an NPV of €146m
48% 4.5%
Cost of debt
0 2.2% 2.7% 3.2% 3.7% 4.2%
Billboards and signage Digital marketing 5.4% 1,573 1,565 1,558 1,551 1,544
Cost of Equity
€1.2m €60k 5.9% 1,561 1,553 1,546 1,539 1,532
6.4% 1,548 1,541 1,534 1,527 1,520
6.9% 1,536 1,529 1,522 1,515 1,508
Café Launch event Community events and 7.4% 1,524 1,517 1,511 1,504 1,497
€30k partnerships
€250k
Further financial analysis on Appendix Slide 28-33 23
3 year implementation timeline EVA
Consulting
Implementation timeline
2017 2018 2019 2020
Research Develop
Develop Arla milk plus
2 x operations and 1 x marketing
Hire management team
Initial bar launch Next 3 bars Next 3 bars
Store rollout
Milking the
Hire employees 5 x full time equivalent employees per store
benefits
Receive feedback, improve products
Refinement
Ahead of Digital marketing Online marketing Continue improving and tailoring marketing
the herd
Sponsorship Sponsor community events Continue sponsoring events
24
Key risks have been identified and mitigating actions have been created EVA
Consulting
Risk analysis
Lack of internal capabilities/ or • Ensure careful planning, training and • Recruit additional team to help oversee
Operational 2 competencies in operating Milk Bar staggered roll out to reduce level of risk Arva Milk Bar operations
Vitamins not allowed in the Danish market/ • Existing presence within the Danish market • Use alternative vitamins/products if
Regulatory 5 Unable to use in the product reduces risk specific vitamins are rejected
25
Our strategies will build a sustainable foundation where Arla can continue to connect and EVA
remain relevant to its consumers Consulting
Summary and future outlook
How can Arla Foods ensure that dairy and the Arla brand is
trusted and relevant for younger consumers in Europe so that it In the future we see the Arla brand reconnecting with its
can deliver on the Good Growth 2020 targets and build a younger consumers through a narrative that is relevant and
strong, sustainable foundation for the future?
builds off trust and transparency. Undoubtedly, Arla Foods
will continue to drive value-up for its cooperative and
continue global expansion and establishing itself as a top
Boost brand A wareness player in the dairy industry.
Redevelop R elevance of milk
Rebuild L eading trust with milk
There are 4 main areas of focus that will enable this:
Increase points of A ccessibility
26
Appendix Network EVA
Consulting
Overview 15. Pan-European marketing campaign 34. Alternatives – powder and formula
1. Opening slide 16. Target young consumers with specific 35. Alternative – should, online, fitness
2. Executive summary campaign 36. In store concept; organic, co-operative
17. Get clearer picture with Arla farmer focus
Analysis 18. Arla’s marketing campaign 37. Case studies: packaging
19. Younger consumers demand convenience 38. Transparency case studies
3. Industry analysis
when purchasing 39. Case study: Concept store
4. Issue analysis – Brand recognition
20. Arla should ensure it is available to 40. Details on Arla Milk + Full Line of Vitamin
5. Customer preferences favour transparency
consumers when they demand it added products
6. Tactic prioritisation matrix
41. Omega 3 deficiencies in Europe and Bio-
7. Strategy overview
21. Implementation degradable bottles
22. Financial impact – Revenue 42. Milk bar launch
Milking the benefits 23. Financials – Key KPI 43. Organisational change
8. Milking the benefits opening slide 44. Proposed rollout of Milk Bar stores
24. Implementation timeline
9. Arla must strategically position itself to 45. Milk vitamin capabilities
25. Risk and mitigation
target changing customer behaviour 46. Developing automated service machines
10. Arla Milk + Product line of milk and 47. Consumer trends
26. Conclusion
yogurts 48. Organisational chart
11. Introducing Milk Bar
12. Milk Bar increases the likelihood to choose
27. Appendix
28. Financials
the milk category and Arla brand
29. Financails
13. Arla is capable of entering the physical
30. Financials
retail space
31. Financials
32. Financials
14. Ahead of the herd 33. Financials
27
Financials - Assumptions and status quo income statement EVA
Consulting
(All figures in EUR m) 2014 2015 2016 2017 2018 2019 2020 Commentary
Revenue 10,614 10,262 9,567 9,274 8,990 8,895 8,934 -3% (Average of Arla 2014-2016)
Production Costs -8,470 -7,833 -7,177 -7,146 -6,927 -6,854 -6,884 77% (Average of Arla 2014-2016)
% of revenue -80% -76% -75% -77% -77% -77% -77%
Gross Profits 2,144 2,429 2,390 2,128 2,063 2,041 2,050
Sales and distribution -1,454 -1,597 -1,642 -1,435 -1,391 -1,376 -1,383 -15% (Average of Arla 2014-2016)
% of revenue -14% -16% -17% -15% -15% -15% -15%
Administration costs -393 -417 -435 -381 -369 -365 -367
% of revenue -4% -4% -5% -4% -4% -4% -4% -4% (Average of Arla 2014-2016)
Other operating income 66 37 91 0 0 0 0
Other operating costs -52 -74 -29 0 0 0 0
Gain from sale of enterprise 120
Share of result after tax in joint ventures and associates 57 22 10
Earnings before interest and tax (EBIT) 368 400 385 313 303 300 301
Margin 3% 4% 4% 3% 3% 3% 3%
Financial income 54 14 7 0 0 0 0
Financial costs -84 -77 -114 0 0 0 0
Profit before tax 338 337 398 313 303 300 301
Tax -18 -42 -42 84 82 81 81 24% Tax rate
Profit for the year 320 295 356 397 385 381 382 28
Financials - Combined strategy income statement EVA
Consulting
Administration costs
Status quo -393 -417 -435 -373 -363 -361 -365 Status quo: Decrease of revenue of 5.04%
Milking the benefits
Ahead of the herd
-9
0
-11
-7
-14
-11
Total increase in net revenue with strategies 4.48%
% of revenue -4% -4% -5% -4% -4% -4% -4%
Total administration costs -393 -417 -435 -373 -373 -379 -389
Revenue Buildup
Strategy 1 - Milking the benefits EUR m 2015 2016 2017 2018 2019 2020 Commentary
UK Drinking milk market size 2,529 2,475 2,421 2,402 2,384 2,374 Launch of products in mid-late 2018
Market share - Arla Milk (Young consumers) 2.08% 2.50% 3.25% UK Market share of approx. 15% (Source: Arla)
Revenue - Arla Milk 0 0 0 58 69 89
Sweden Milk market size 488 478 467 464 460 458 Arla holds approx 65% of Sweden Market share
Market share - Arla Milk (Young consumers) 2.08% 2.50% 3.25% Assumption: Arla Milk Plus captures 3.25% of market within 3 years
Revenue - Arla Milk 11 13 17
Germany Milk market size 524 513 502 498 494 492 Arla has approx 20-40% of German market
Market share - Arla Milk Plus (Young consumers) 2.08% 2.50% 3.25%
Revenue - Arla Milk Plus 12 14 18
Denmark Milk market size 878 860 841 834 828 825 Arla holds >80% Danish market share (Source: Arla)
Market share - Arla Milk Plus (Young consumers) 2.08% 2.50% 3.25%
Appendix
Concept stores
Annual sales per store 0.65 0.65 0.65 Source: Avg. annual revenue from Starbucks café
Number of stores 3 4 4
Revenue from concept stores 2.0 2.6 2.6
Synergy effect from concept stores 1.7 2.2 2.2 Other products also sell due to marketing/transparency initiatives
Total revenue from Strategy 1 220 264 333
30
Financials - Strategy 2 revenue drivers and sensitivity analysis EVA
Consulting
Incremental market share from Netherlands 0.50% 0.50% 0.50% Currently only 4-5% of Arla's brand revenue is from Netherlands
Incremental revenue Netherlands 51 51 52
Total from Strategy 2 172 264 266
31
Financials – Strategy cost breakdown EVA
Consulting
Strategy 1 Costs - Milking the benefits 2018 2019 2020 Strategy 2 Costs - Ahead of the herd 2018 2019 2020
Product line development - Milk Plus Marketing
Number of products lines developed EUR 2 Billboard advertising EUR 220,000 220,000
Development cost per new product line Number of medium/large billboard 24 24
Market and product research EUR 600,000
Cost per medium/large billboard EUR 18,000 18,000
Product development EUR 800,000
Number of small billboards 7,000 7,000
Branding and packaging EUR 200,000
Cost per small billboard EUR 45 45
Total EUR 3,200,000
Total EUR 747,000 747,000
New Concept stores Signage
Number of stores 2 5 6 Number of signs EUR 150 150
Cost of developing store Cost per sign EUR 3,000 3,000
Store remodelling Total EUR 450,000 450,000
Plumbing EUR 6,000 6,000 6,000 Television campaign EUR 3,500,000 3,500,000
Appendix
Electrical EUR 600 600 600 Event sponsorship EUR 250,000 250,000
Heating and venting EUR 12,000 12,000 12,000 Digital marketing EUR 60,000 60,000
Interior and Exterior design Milk Plus Launch event EUR 20,000 50,000
Custom store designs EUR 17,000 17,000 17,000 Ongoing marketing EUR 35,000 35,000
Chairs EUR 6,000 6,000 6,000
Arla Food Machine
Tables EUR 2,000 2,000 2,000
Cost per Machine EUR 4,000 4,000
Custom flooring EUR 6,000 6,000 6,000
Trash receptacles EUR 250 250 250 Number of Food Machines EUR 15 15
Phone installation EUR 300 300 300 Total EUR 60,000 60,000
Outdoor chairs, table and umbrella EUR 1,200 1,200 1,200 Total cost of Strategy EUR 115,000 5,342,000 5,372,000
Lighting fixtures EUR 4,000 4,000 4,000
Equipment
Refrigerators EUR 1,400 1,400 1,400
Sandwich prep equipment EUR 600 600 600
Milkshake equipment EUR 500 500 500
Coffee making machine EUR 3,300 3,300 3,300
Toaster and microwave EUR 300 300 300
Storage equipment EUR 2,000 2,000 2,000
Other EUR 1,500 1,500 1,500
Rent, insurance and miscellaneous costs EUR 100,000 100,000 100,000
Total development cost EUR 164,950 164,950 164,950
Additional employees required per store EUR 5 5 5
Salary per employee EUR 60,000 60,000 60,000
Total concept store cost 929,900 2,324,750 2,789,700
32
Financials - WACC Calculation and DCF Analysis EVA
Consulting
Averages
Unlevered beta 0.48 Interest coverage ratio 11.10 Risk free rate 2.64% Source: 5 year treasury bond
Debt/Equity 0.90 Implied default spread 0.54% Market risk premium 5.08% Source: Damadoran Online
Debt/(Debt + Equity) 0.45 Cost of debt 3.18% Country risk premium 0.00% Source: Damadoran Online
Tax rate 27% Cost of equity 6.42%
Appendix
consumer behaviour.
• Arla needs to focus first and foremost on the Millennial market to draw their
• Millennial customers believe in organic food and value freshness which is better attention to the products before they pass on non-dairy traditions to their families.
presented through drinkable milk than through processed powder.
• Arla should continue its current operations in powder, with a future goal of driving
long term focus onto powdered products if trends shift away from fresh foods.
Butter Cheese
• Butter is a popular spread that is relatively unaffected by the decrease in consumer • Cheese under the Arla brand falls under many sub-brands, and like butter – has been
preferences towards dairy products. relatively unaffected by the decrease in customer wants for dairy. This is primary due
to the product differentiation and the large number of complement goods.
36
Case Studies: Packaging EVA
Consulting
Changing Packaging for existing brands can backfire Successful packaging can drive a brand’s longevity
Appendix
• On January 9th 2009, the PepsiCo-owned brand decided to replace the existing • The first bottle was produced after the owners launched a design competition in the
packaging design for its best-selling orange juice with new packaging for the North USA – won by and won by the Root Glass Company of Terre Haute, Indiana.
American market.
• The original design was a cocoa-pod plant based shape, with a distinct top heavy–
• However, this new packaging design was rejected and criticized by the majority of and began to be known as the ‘contour’ bottle.
Tropicana’s consumers. The launch of the new packaging was indeed such a failure that
Tropicana had to drop it to come back to the original version of the packaging. • This was modified over the years but the basic shape of the bottle (with a smaller
bulge) and its iconic grooved ridges were retained.
• In total, this initiative cost Tropicana more than 50 million dollars.
Rather than risk damaging personal customer connections with the existing Arla milk brands, Packaging can be just as important as product in distinguishing brands. By creating a
the redesigned products should be on a new product line recognisable and unique bottle, Arla can establish strong customer connections.
Source: The Branding Journal 2015 Source: PackagingNews.com; Coca-Cola case study 2015 37
Transparency case studies EVA
Consulting
Case Study: Happy Family: Organic baby producer Case Study: QANTAS Airlines – QANTAS Frequent Flyer (QFF)
Appendix
• Panera has emphasized ingredient transparency for years, as one of the first food
• Happy Family, an award-winning producer of organic baby and toddler foods, companies to provide calorie counts on menu items and remove antibiotic-treated
values “enlightened ingredients” and aims to help parents make informed decisions. animal proteins from its menu. In addition to publishing its “No-No List” of more than
On its website, product pages offer nutritional information, along with known 80 ingredients it will no longer use, in 2014 Panera published a “Food Policy
allergens and fun facts (“Did you know: Kale has been cultivated for over 2,000 Statement” that outlines the company’s goals to use clean ingredients, provide menu
years!”). transparency and make a positive impact.
• Taking transparency quite literally, Happy Family’s Clearly Crafted baby foods line • Panera uses videos, articles, press releases and reports to communicate its
comes in clear packaging and features not only the product’s ingredients and transparency efforts. The company keeps the public updated on progress toward
nutritional values, but also the actual recipe for the baby food. The Happy Farms goals through content like the animal welfare infographic.
page uses beautifully made videos to highlight the farms that produce Clearly
Crafted fruits and vegetables.
The campaign created an emotional connection between 45% of their members and their The campaign created an emotional connection between 45% of their members and their
points system points system
38
Case study: Concept stores EVA
Consulting
Nespresso is the world leader in coffee machines, coffee and coffee accessories. To Nike, Inc is an American multinational corporation that is involved in the design,
start, the Nespresso Boutiques are vital to its brand. development, manufacturing, and worldwide marketing and sales of footwear,
apparel, equipment, accessories, and services. They specialise in athletic wear.
The customers can go on to include mobile app ordering of capsules, next day
delivery, capsule recycling, a magazine on tablet and even breakdown assistance, The lower level feature a curated, data-driven assortment of local essential products,
these boutiques are often where customer journeys begin. inspired by the sporting heartbeat of the city. Services there include speed lockers for
easy pick-up and returns, along with a sneaker bar for style advice.
Designed by Universal Design Studio, the pilot concept boutique opened its doors in
May. The customer journey is integrated through the space – organized into three The fifth floor, a NikePlus members-only destination, will provide access to unique
levels of engagement over the three floors of the store. products, experiences and customization opportunities.
New concept stores in France in July 2017.
Nespresso has reinvented coffee maker machines through the concept stores where they Nike has created a new way for customers to purchase their products through exclusive
interact with the brand in a new way sales, lockers and other tactics.
Existing
Benefit Case Study/Research Milk Yoghurt Development/Integration
Vitamin D keep healthy bones, teeth 10mg of Vitamin D per day. • Will be rebranded under
and muscle the Arla Milk+ line
• FSE conducted a report in 2016 that suggested that regular • Development phase
Consumption of fish oils
consumption of Omega 3 could save the EU 12.6 bn euros. • Requires the product to
Omega 3 slows down ageing, as they
• Organic Valley Omega-3 milk (large American dairy company) be developed in house
are vital for healthy
currently adds elevated levels of the naturally occurring ALA with key resources
nutrition
omega-3 - with DHA and EPA
• More than 10% of the EU (aged 25 and over) have diabetes. • Development phase for
Increasing fibre and whole
• Study from the US National Institute of Health in 2009 showed that milk
Fibre grain intake improves
the insulin response was significantly lower for the fibre-enriched • Yoghurt existing, will be
glucose and insulin
milk drink than it was for the other milk products (AUC, P = 0.007). rebranded
metabolism
Source: Nutrigrain Ingredients 2016, Dairy Nutrition Canada 2013, Arla Foods Press Release 2018, Organic Valley 2016, US National Institute of Health 2009 40
Omega 3 deficiencies in Europe and Bio-degradeable bottles EVA
Consulting
• Plant Bottles (like other biodegradeable bottles) are made from Polylactic
Acid (PLA), an annually renewable plant source, rather than scarce fossil
fuels. The bottles produce 60% less greenhouse gases and use 50% less
fossil fuels in their production.
• PLA is derived 100% from plants such as corn, cassava and sugar beet.
As the plants grow they consume harmful greenhouse gases such as carbon
dioxide (CO2).
The majority of Europe is in the ‘Low’ range and the UK is in the ‘Very Low’ range for Plant Bottles is one of the largest providers in Europe. If unable to secure a partnership,
omega 3 consumption alternate companies such as Enso bottles and MH Plastics are options
• Launch event for the Milk+ line and Milk Bars will be held at the same time
• This will be a guerrilla marketing event where Perspex/clear plastic cows will be
placed in central areas in Copenhagen. Information will be placed on the cows about
the new Milk+ line and will be placed outside the Milk Bar concept store.
• One example is in Copenhagen:
Appendix
Perspex Cow+
Case Study: Giant Rubber duck Concept store
Upon launch in 2007 in Pittsburgh, 1 million people in the US visited the attraction within 4 -
6months
Plays a critical role in • The skimming process to obtain skim, 1% or 2% milk results in the loss of
maintaining healthy vision, vitamin A. Therefore, vitamin A is subsequently added to replenish what was lost.
New product team
neurological function, healthy skin, • The replenishment is mandatory in the United States and Canada and is
and more recommended all around the world.
43
Proposed rollout of Milk Bar stores EVA
Consulting
Implementation
Rollout of Milk Bar should start branch out from continental European cities Proposed store location - Copenhagen
Købmagergade, 1150
København K
Edinburgh
Birmingham
Appendix
March 2019
Jan 2020
44
Milk vitamin capabilities can be acquired if needed EVA
Consulting
Product development
45
Developing automated service machines EVA
Consulting
Sales channels
Key benefits:
management
The product should be available to customers when they are wanting to consume, in the form that they want
46
Consumer trends EVA
Consulting
Appendix
47
Divisions responsible for recommendation implementation EVA
Consulting
Organizational change
Arla Foods
Division
Finance, HR,
Marketing Europe International
Legal Corporate
Executive
Responsible New division:
Appendix
Peder Tuborgh Natalie Knight Hanne Søndergaard Ola Arvidsson Peter Giørtz-Carlsen Tim Jørgensen Store Sales Division
CEO CFO CMO CHRO EVP (Europe) EVP (International) • Delivers the Milk Bar strategy
• Overseen by a Senior Product
Manager
Exposure to
Upper-medium Medium High High Medium Low • Includes operations and
strategies
sales/marketing staff
• Responsible to the EVP
Staff 62 (Europe)
1 2 1 30 -
increase (<1% increase)
Budget
- - + €4,7M - + €6,1M -
increase
1. Communicate 1. Ensure 1. Approve 1. Hire new staff 1. Hire manager 1. Observe for
strategy to regulatory branding for product and responsible for compatibility
shareholders compliance in strategy for Milk marketing Milk+ rollout with foreign
Key actions 2. Led efforts to new product Bar and Milk strategy 2. Approve markets
for develop a development Plus 2. Manage culture product from
executive consumer-facing 2. Secure financing 2. Oversee store so as to avoid Innovation
culture for stores launch campaign conflicts Centre for new
line
48
Opportunities in a changing environment
∣ 1
Arla is facing the challenge of staying relevant and trusted by
young European consumers in a rapidly changing market
The European dairy industry is Dairy consumption is in decline How can Arla gain the trust of
undergoing rapid changes and losing relevance. Arla has young consumers, stay relevant,
primarily driven by younger not been able to fully capitalize and build a sustainable and
generations. on the new trends and “built a scalable solution for the future?
strong, loved brand like Nike,
Ikea, or Apple”
1 2 3
This will allow Arla to showcase its This will allow Arla to build brand This will allow Arla to build trust with
premium products, extend the loyalty by personalizing its product consumers, as a greater purpose is
customer journey, and change offerings to millennials and tap into build up around the brand.
customer perception from being a their desire for uniqueness Additionally, it will push forward the
milk supplier to being a premium ”clean eating” agenda
provider of healthy beverages and
meals throughout the day
∣ 4
C O W
Recommendation 1: Recommendation 2: Recommendation 3:
This will allow Arla to showcase its This will allow Arla to build brand This will allow Arla to build trust with
premium products, extend the loyalty by personalizing its product consumers, as a greater purpose is
customer journey, and change offerings to millennials and tap into build up around the brand.
customer perception from being a their desire for uniqueness Additionally, it will push forward the
milk supplier to being a premium ”clean eating” agenda
provider of healthy beverages and
meals throughout the day
∣ 5
Insight: Poorly performing dairy categories and a new demanding millen-
nial segment are the primary drivers of Arla’s current brand struggles
Matthew Walker
Senior Director Arla Brand, Arla Core & Equity, Arla Foods
Kaarthik Subramini
Senior Vice President MYPC & ArlaBrand, Arla Foods
-100 +100
06.00 22.00
Arla must change the brand perception to stay relevant among millennials
TAKEAWAY
It is not only a question of availability, as Arla is already present in all channels – it is a question of
desire, which needs to be present among millennials, why a pull-effect must be obtained
New products
New usage
situations
Develop
partnerships
Premiumization
Most attractive
Least attractive
2
NEXT
1
NOW
06.00 22.00
TAKEAWAY
Accommodating demands from all young consumer personas and adding an extra
direct touchpoint, Arla will increase the demand for dairy products substantially
This will allow Arla to showcase its This will allow Arla to build brand This will allow Arla to build trust with
premium products, extend the loyalty by personalizing its product consumers, as a greater purpose is
customer journey, and change offerings to millennials and tap into build up around the brand.
customer perception from being a their desire for uniqueness Additionally, it will push forward the
milk supplier to being a premium ”clean eating” agenda
provider of healthy beverages and
meals throughout the day
∣ 12
Insight: Millenials demand customized solutions and interaction
with what they eat – and they are willing to pay for it!
Millenials want customized solutions... ... and they want control over the process
Consumer engagement à
75%
Describe themselves as "authentic."
59%
Of Danes want personal offers designed especially for them
40%
Want to co-create with companies
Level of control over design process à
10%
Price premium they are willing to pay for customization 2 out of 3 millenials reports being happy with a brand
after having interacted with it on social media
7 countries
To successfully capture millennials, Arla needs as many products as there are consumers
1
Choose base products
Yoghurt, Skyr, Butter, Milk
Organic? Extra protein?
2
Choose flavor and color
Unique taste? Texture?
3
Choose packaging
Choose from 10 labels
Write personal text
MARK’O’MAGIC
Sweet
Sebastia
n
JAKO
B
IN THE JUNGLE
DAIRY IS CULTURE
Bottling Labeling Sending
This will allow Arla to showcase its This will allow Arla to build brand This will allow Arla to build trust with
premium products, extend the loyalty by personalizing its product consumers, as a greater purpose is
customer journey, and change offerings to millennials and tap into build up around the brand.
customer perception from being a their desire for uniqueness Additionally, it will push forward the
milk supplier to being a premium ”clean eating” agenda
provider of healthy beverages and
meals throughout the day
∣ 19
Insight: Millennials want to support a good cause, and receive more
information on the products they consume
o 50 % of millennials will abandon o When equal in price and quality, 90 % o Increased access to information
brands they perceive to have ethics of millennials will buy a product means increased awareness: Food
they do not agree with associated with a cause should be natural
Key takeaway: Millennials want purpose, causes they can relate to, and more information on food origin
Note: Deloitte Millennial Survey 2017; Marketing to
Millenials, The Economist 2018 ∣ 20
EXECUTIVE PREMIUM PERSONAL PURPOSE IMPACT
Arla can therefore build trust with millennials by increasing foreign
aid and allow customers to follow the cow from farm to table
This will allow Arla to showcase its This will allow Arla to build brand This will allow Arla to build trust with
premium products, extend the loyalty by personalizing its product consumers, as a greater purpose is
customer journey, and change offerings to millennials and tap into build up around the brand.
customer perception from being a their desire for uniqueness Additionally, it will push forward the
milk supplier to being a premium ”clean eating” agenda
provider of healthy beverages and
meals throughout the day
∣ 22
Succesful implementation relies on 3 must win battles
1st half 2018 2nd half 2018 1st half 2019 2nd half 2019 1st half 2020 2nd half 2020
Launch in Scandinavia
1 2 3
Reach 10.000 Minimum of 10 SoMe
Must Win customers in first
Be present in 3
influencers
Battles countries by 2019
month participating
∣ 25
Main content Appendices
1 Executive
o Front page
3 Originalize offerings – continued
o
General
Risks & mitigation
o Arla unable to meet demand o Trends, importance & fit
o Situation, complication, question o Introducing My Arla o Issue tree
o Problem overview o Product mockups o Solution assessment
o Solution overview o Value chain o 4 key trends
o Carlsberg – best practice o Detailed market growth
5
o Mjölk will increase demand by
Worldly focus
creating pull Impact
o Mockups
o Implementation slide
3O
o Detailed blockchain
o Financial impact
riginalize offerings Financial appendices
o Quote
o Insight: Millenials demand
customized solutions
6 Conclusion
o Concluding solution overview
o
o
o
Overall impact
Sensitivity analysis
Store financials
o Revenue per kilo of milk
∣ 26
Appendix
High
1 Operating stores is not our core Joint venture or franchise
Critical
8 2 Blockchain proves to be more expensive Acquire dairy blockchain startup
3
risk line
7 #LeadingTheWay not trending Collaborate with SoMe influencers
1
4
Probability
Low
7 Customization not feasible due to food
deteriorability
Focus on longer lasting dairy products
like Skyr and youghurt
∣ 27
Appendix
53%
Content sharing (SoMe)
85%
Personalization and individualism
52%
Brand trust
63%
Wellness & health
87%
Social activism & collective action
63%
Social acceptance
56%
Purpose
76%
Convenience
Source: Euromonitor, Goldman Sachs, Access Development Customer importance ARLA’s curret ability to deliver ∣ 28
Appendix
Issue tree
MAIN
OBJECTIVE How can Arla be relevant to the young, European consumers?
Arla can increase capture the millennials by changing their branding strategy and build trust
∣ 29
Appendix
Solution assessment
Adapting current business to millennials trends
Idea-bank
Virtual reality
Blockchain of
product details
Boutique cafés
Customization
Increased CSR
∣ 30
”
Any study of how to sell to millennials will reveal that
you’ve got to give them exactly what they want and allow
them to have total control over as much of the process
and product as possible. No matter what you sell, if you
want to break into this market segment you will need to
make these buyers believe that
”
“this is not your parents’ [insert you product here].”
Soure: Euromonitor
∣ 32
Appendix
Millenials in all of Arla Foods’ core markets care about the following
o Popularity o Physical strenght o Relations are essential o Care about company ethics
o Products must be cool o Mental energy o Few people influence o Motivated by fullfilling a
purchasing decision purpose
o Desire to be trendsetter o Healthy lifestyle heavily
o Identify with brands they
o Millenials want to share consume on a personal
experiences level
∣ 33
Appendix
Positioning map
Current and future competitors
High
Low
Low High
Perceived Dairy Quality
Bread + butter
Served with freshly churned butter,
add cheese +10
∣ 35
Appendix
Arla can obtain capabilities to run Mjölk Cafés, and should choose
the simplest operating model in key strategic locations
Who’s in charge? What about logistics? Where do we start?
1 2 3
Hire Chief Mjölk Officer Change own supply chain Launch UK and DK in 2018
∣ 37
Appendix
arladk
arladk #LeadTheWhey
CONCEPTUAL
Photo: lulumut.com ∣ 38
Appendix
Cow #1 Cow #1
Milk bottle
health milk
#1
report yield
Milk Milk
Milk
truck transport-
analysis
pick up ation
Cow #2 Cow #2
Milk bottle
health milk
#2
report yield
∣ 39
Appendix
Overall impact
29 million EUR
5 million EUR 17 million EUR
Sensitivity analysis
∣ 41
Appendix
Store financials
∣ 42
Appendix
0,76
0,75 0,75
0,74
0,73 9%
0,72
0,71
0,71
EUR
0,70
0,69
0,69
0,68
0,68
0,67
0,66
0,65
2017 2018 2019 2020
∣ 43
Tackling the challenges of modern day parenting
A 3-pronged plan to taking care of European youth (15 – 34 age group)
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 2
Arla Foods – A modern day parent with a young adult child
Arla Foods face challenges from changing consumer habits
Current market Market flooded by too many Customers with proactive role
Declining milk sales
characteristics brands dietary alternatives
Arla’s best Bring past drinkers back/ Converge brands’ marketing Present Arla methods to
reaction Attract new drinkers message customers
Adapt and
Remind
engage
Communicate customer of
Our Solution customers
Milk differently our holistic
through digital
offering
channels
Arla Foods needs to reverse declining trends and identify ways to stay ahead of competition
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 3
Our goal for today: Help Arla connect with young adults in Europe
3 solutions and 3 key performance indicators
Objective: Sustainably position Arla Foods to capture growth in the EU market
Basket size (# of items) # of trips to POS (per week)
Customer reached 19.2mn 2,2
3,7
2,6
1,4
Customer
engaged
Customer
acquired 523k
2018 2020 2018 2020
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 4
Organic dairy penetration rate in Europe
Arla should continue to focus on its core markets
Denmark 24,0
Sweden 12,2 Arla should continue to focus on core
UK 7,5 markets, as these consumers value
Belgium 7,1 Arla’s unique proposition of offering
“organic” dairy product the most
France 4,5
Germany 4,5
Finland 2,8
Norway 2,6
Italy 2,3
Greece 1,2
Spain 1,0
0,0 5,0 10,0 15,0 20,0 25,0 30,0
Penetration rate
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 7
Our approach to care of modern young adult
A three-pronged plan to win back customers
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 8
Milk's functional appeal not valued by young adults
Young adults pursue healthy lifestyle in their own ways
“Health” benefits associated with milk The meaning of ”health” has broaden and
“calcium” become much more accessible
Arla needs to find a new proposition to make MILK appealing to young adults
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 9
Understanding modern young adults
Setbacks and challenges are common in modern young adult lives
Arla should reposition milk as the ultimate comfort food for modern young adults
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 10
BE COMFORTING – Reposition milk as the ultimate comfort food
Arla needs to communicate the new value proposition clearly
Target audience
Brand promise Arla milk is the o nly b rand that d elivers a soothing comfort moment when you n eed it the most
#RootingForYou
Tactics Re-packaging
Campaign
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 11
Changing customer perception
Marketing initiatives to make Arla milk “Warm and Comforting”
Make young adults feel warm and comforted by drinking a pack of warm Arla milk
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 12
#RootingForYou Campaign: Gaining social media traction
Engaging social media can maximize campaign reach and impact
Illustrative
A friend is sad
250ml
Dan
To______
Scan QR code and take a
Hang in
there, buddy! 30secs video
Scan
i t
for
a
surprise!
From,
Jane
______
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 13
Our approach to care of modern young adult
A three-pronged plan to win back customers
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 14
Other dairy and non dairy segments are flooded by brands
Converging Arla Foods brands under "ONE Arla" umbrella
Customers are overwhelmed and hard to find differentiations among brands
Gym Exam
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 16
Converging market messages
ONE Arla value: Always there for you
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 17
Pushing the converged marketing message
Spreading the word via both above-the-line and below-the-line marketing efforts
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 18
Our approach to care of modern young adult
A 3-pronged plan to win back customers
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 19
BE CONNECTED: improving interaction leveraging digital platforms
There's a gap between customer perception and reality
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 20
BE CONNECTED: Improve communication through gamification
Gamifying customer engagement experience will result in better communications
Reward Scheme
Incentivize to stay in the game and nurture
consumption habit of Arla products
Customers will be more loyal and likely to adopt the habit of consuming Arla Foods products
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 21
BE CONNECTED : Communication through gamification
Pilot marketing initiative in London (Leicester Square)
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 22
BE CONNECTED : Communication through gamification
Use gaming to connect with customers
2
Raise your cow by feeding
and taking good care of it
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 23
BE CONNECTED: Communication through gamification
Encourage customers to purchase more frequently to obtain higher level of the game
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 24
BE CONNECTED: Communication through gamification
Communicate the Arla method through in-game tips and options
4
After you have unlocked a
stage, you will be given extra
benefits e.g. more cows to
increase output
5
You can watch real-life
videos of Arla‘s farmers’
practices, treating cows with
dignity
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 25
BE CONNECTED: Communication through gamification
Participation in game will lead to repeat purchase
6
Milk your cow when it has
grown up
7
Redeem 1 carton of milk in Congratulations!
real-life after milking 10 You can redeem 1
carton of milk now!
cartons
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 26
A time-bounded implementation is key to success
By 2019 H2, Arla would solidify its market presence at 24 cities in UK, Denmark and Sweden
Negotiate with convenient store distributions Product package design Offline promotion
PEAK
CONSULTING OVERVIEW BE
COMFORTING BE
PRESENT BE
CONNECTED IMPACT 27
Impact to Arla Europe within 3 years
Covered by 12% of cash, the strategies can achieve a EUR 291mn incremental value in brand revenue
Initial Setup Cost at 2018 H2 Topline Growth o f Arla Europe (2017A-2020E)
EUR m
2.800
• 29% and 31% of initial setup cost will be allocated to
2.700 +4.0%
Marketing & Advertising activities and Investment in
repackaging facilities 2.600 291mn
• EUR 10.2mn can be funded by 12% of cash Base Case
2.500
With Recommendation
2.400
2.300
2.200
2017A 2018E 2019E 2020E
Marketing & Advertising activities CapEx in repackaging facilities Reaching Acquiring With Increasing to
Give a new purpose to milk Strengthen brand presence and Build consumer trust through
Sub-goals
consumption maximize marketing effectiveness consumer education
• Smaller product size and • Above-the-line and below-the- • Target segment: Tech-savvy
convenient store distribution line marketing push to and mobile adapt
Tactics channels to cater ready-to-go communicate new brand • Gamify Arla cattle raising
young adults promise to consumers experience
• #RootingForYouCampaign
APPENDIX 30
Executive Summary
A 3-pronged plan to acquire, cross-sale, and drive customer purchase frequency
Give a new purpose to milk Strengthen brand presence and Build consumer trust through
Sub-goals
consumption maximize marketing effectiveness consumer education
• Smaller product size and • Above-the-line and below-the- • Target segment: Tech-savvy
convenient store distribution line marketing push to and mobile adapt
Tactics channels to cater ready-to-go communicate new brand • Gamify Arla cattle raising
young adults promise to consumers experience
• #RootingForYouCampaign
APPENDIX 31
Arla is better positioned than other market players to deliver a soothing comfort value
Brand promise Arla milk is the o nly b rand that d elivers a soothing comfort moment when you n eed it the most
APPENDIX 32
Appendix: Competitor analysis
Milk products have a unique positioning to deliver calm and soothing values to consumers
Thirst
Comfort
Energy
Health
Social
More Desirable
APPENDIX 33
Distribution plan
Milk and yoghurt will be sold mainly at convenient and to-go places to cater to millennials needs
Channels
Convenient Vending
Products Hypermarket Supermarket e-Commerce Kiosk Cafes
store machine
Butter
Cheese
Milk
Yoghurt
Evaluation criteria
1 Product nature/usage
2 Customer behaviour
High resources Mid resources Low resources
APPENDIX 34
Risk and mitigation
APPENDIX 35
Alternate analysis
More Less
important important
APPENDIX 37
Our recommendations are scalable across EU
#RootingForYou
Campaign
Appeal to all European as they People nowadays value digital
European share similar lifecycle
share similar culture solutions
APPENDIX 38
How is Arla Food uniquely positioned to grow beyond 2020?
Non-dairy products and private label are two main sources of growth beyond 2020
Start
Different
occasions,
different
you,
Arla is
always there
Gym Exam
APPENDIX 40
Why gamification are good for targeting young adults
Source: Snipp!, loyalty and promotions company
APPENDIX 42
Arla should outsource the production of mobile gamification
• IT
department
Danish independent video game developer based in Copenhagen,
Denmark, founded in 2010.The company was formed by a small
• Marketing
&
Innovation
for
managing
group of students in 2010, who moved into an unused classroom information
in Aalborg University – Copenhagen, Denmark and began
developing their first game, Forced. Since, they have left the
classroom and released a second game, Forced: Showdown
APPENDIX 43
Age segment 15-34 accounts for 24.4% (1.3 mn) of Danish population
APPENDIX 44
Age segment 15-34 accounts for 24.4% (2.4 mn) of Swedish population
APPENDIX 45
Age segment 15-34 accounts for 24.8% (16.3 mn) of UK population
APPENDIX 46
Age segment 15-34 accounts for 21.8% (18.1 mn) of German population
APPENDIX 47
Revenue Breakdown and Market Share
1.500,0
706,0
710,9
733,4
Stage
2
-‐ 3
Cities
Sweden 0% 7% 13%
318,7
309,5
1.000,0
304,0
306,7
Denmark 0% 9% 16%
APPENDIX 48
Key Assumptions of Monthly Purchase Frequency and Basket Size
APPENDIX 49
Dairy industry is being disrupted by the millennials
Baby boomers
Generation X
Millennials
Generation Z
SHIFTING TRENDS
European dairy industry is highly segmented and saturated
Established
global dairies
Private
label
Local/niche
players
Dairy
alternatives
Decision making
Strategic alternatives
Europe
North America
Market of
82% main priority:
Europe
Europe
Middle East and North Africa Steen Sørensen Koch
Americas Vice President
Russia and others Marketing & Digital Transformation
140
-6.25%
120
Alternative milk
100 25,3 24,22 23,85
7,22
23,65
7,77
2,5 2,23 market is not an
6,78
option for Arla as its
6,35
80 2 1,81
39,4 39,53 40,33 41,15 1,43
60
40
1,5
1,09 farmers core business
20
27,74
6,52
27,53
6,51
27,73
6,58
28,05
6,61
1
0,5
is producing
RAW MILK
10,76 10,97 10,98 11,03
0
2015 2017 2019E 2021E 0
2015 2017 2019E 2021E
Baby boomers
Generation X
Millennials
Generation Z
SHIFTING TRENDS
Overcoming perceptual
gap about dairy and
Revolutionizing transparency and EUR 223 M
consumer’s access to supply chain Incremental Revenue
ARLA products through “Daily Arla” platform
5.2 M
Engaged millennials
Finding occasions that
match changed Matching Arla cheese brands with
consumption pattern of Wine category in Europe 126%
millennials Return on Investment
Solution
Build Trust – Secure Growth
Good nutrition
Healthy ingredients
Production method
We simply want it all!
Successful career
Family Origin of a product
To make impact
To be fit, look and feel good
Active and sustainable lifestyle
Be present on social media
SUCCESSFUL CASE
WHAT? HOW?
STORY
Develop “Daily Arla” platform Implement Original Trail
to connect consumers directly solution for product origin Arla Dairy
to farmers traceability Adventures
Consumer wants to
Supply chain focus “Daily Arla” feature
be aware of:
DailyArla
Incremental revenue
Assumptions
Revenue
Average revenue per customer: EUR 95
90,00 EUR 81,93 EUR
Millioner
80,00 EUR
Arla brand consumption increase: 7%
70,00 EUR
60,00 EUR
Millennial population in target markets:
50,00 EUR 34,32 EUR EUR 46,3 M
40,00 EUR
Cost drivers
30,00 EUR
20,00 EUR
Original Trail
10,00 EUR 4,16 EUR 76% implementation
Digital platform
0,00 EUR development
2018 2019 2020
Digital transformation
employees education
Solution
Build Trust – Secure Growth
Breakfast Replaced by
small snack WHICH IS THE
When preparing No time to cook OCCASION FOR
meals at home
INCREASING DAIRY
Part of nutritive Perceived as PRODUCT
diet unhealthy
CONSUMPTION?
Occasions for dairy consumption
are shifting
Where we want to be
Incremental revenue
Assumptions
60 EUR
53,68 €
Market penetration:
Millioner
20 EUR
14,98 € Cost drivers
10 EUR Shelf positioning
Pop-up stores
0 EUR
2018 2019 2020
94% Online promotion
EUR12 M
670 K
Sampling
KPI EUR 103 M Engaged consumers
122% Other promotional
in 2020 Incremental revenue ROI activities
in 6 markets
120,00 EUR
53,68 EUR
100,00 EUR
20,00 EUR
34,32 EUR
14,98 EUR
0,00 EUR 4,16 EUR
2018 2019 2020
1st strategy 2nd strategy
Revenue 1 Revenue 2
Farmer education
Promotional activities
Shelf positioning
Sweden Finland
Strategy II Wine festivals UK Germany
Belgium
Pop-up stores
122%
KPI ROI
Strategic Timeline
Build Trust Secure Growth
Alternatives and Finance
Competition Target group Occasions Cumulative effects
Dairy Perception gap Occasion segmentation Timeline
market trends Daily Arla platform Where to be Good Growth
Market Supply chain Strategy
Wine and cheese
prioritisation Amazon
App Development Sales channels
Declining trend Fresh
Back to the roots Touchpoint
Millennial Financial UBER
Finance
trends Financial implication
Financial
breakdown breakdown
Executive Strategic Strategic Risk and
Alternative 1 Alternative 2 mitigation
overview
BOW TIE
Main risks and mitigation Consultants
Cheese & Wine concept does not suit Rethink the occasion that ARLA wants to target in
millennials consumer journey
Almond
Raw milk intake, million kilos Soybean
Leading milk alternatives
Annual Almond Production in Metric Tons
1.000.000
900.000
800.000
500.000
300.000
Belgium 100.000
0
Luxemburg
14% Netherlands
23% Non-owner
Arla Farmerst
Almonddoproduction
not produce
requires
in regions
mild winters
where and
soybean
early springs that
production
are notis specific
sustainable
for North Europe
Source: Arla Foods annual report 2016, European Soybean Production Market Analysis University of Stuttgart
Absolute
value growth
(EUR million)
Highest growing
category on the
market
Established partnership in
Future Outlook
2016
3 years
time frame
Investment
b udgeting
2018 2019 2020Total
Original
Trail
implementation 650,000
EUR 120,000
EUR 120,000
EUR 890,000.00
EUR
Digital
platform
development 250,000
EUR 25,000
EUR 25,000
EUR 300,000.00
EUR
Digital
transformation
employees
education 10,000
EUR 5,000
EUR 5,000
EUR 20,000.00
EUR
Education
of
farmers 200,000
EUR 200,000
EUR 200,000
EUR 600,000.00
EUR
New
employees 300,000
EUR 400,000
EUR 500,000
EUR 1,200,000.00
EUR
Promotion 830,000
EUR 2,480,000
EUR 6,420,000
EUR 9,730,000.00
EUR
Total
Investment 2,240,000
EUR 3,230,000
EUR 7,270,000
EUR 12,740,000.00
EUR
Converted
customers
2018 2019 2020Total
Denmark 620000 620000 620000
Sweeden 580000 580000
UK 1780000 1780000
Finland 140000 140000
Germany 2240000
Benelux 102000
Total 620000 3120000 5462000
Average
revenue
per
customer 102.50
EUR 109.21
EUR 120.21
EUR
Purchasing
frequency
increase 7.00% 7.00% 7.00%
Revenue
per
customer
increase 7
EUR 11
EUR 15
EUR
Revenue
4,157,494
EUR 34,320,000
EUR 81,930,000
EUR 120,407,494
EUR
Backup slides
BOW TIE
Denmark- increase in sales through increased purchase frequency Consultants
TOTAL REVENUE
EUR 2.4 B
EUR 2.53
PRICE PER TOTAL VOLUME
PRODUCT
EUR 5
X
506
480 M
NUMBER OF VOLUME PER
CUSTOMERS CUSTOMER
2.280.000
X
222
210 products
70
74 3 pieces
6M X
38% X
times a year Of dairy products
Backup slides
BOW TIE
2nd strategy- financials Consultants