Kraft Foods Canada: Targeting the Millennials1

For the exclusive use of T. Henderson, 2019.

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KRAFT FOODS CANADA: TARGETING THE MILLENNIALS1

R. Chandrasekhar wrote this case under the supervision of Professor Allison Johnson solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.

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In September 2014, Kraft Foods Canada was working on an action plan for Kraft Singles, the company’s brand of processed cheese slices. Although Kraft Singles had thus far been targeted at Canadian families, it now needed to be marketed to a new segment—Canadian millennial moms (born between 1981 and 2000). The company was in the middle of developing a marketing plan aimed at attracting millennial moms.

During the five decades since its launch, Kraft Singles had acquired an iconic status in the foods and beverages industry. An entire generation of consumers, in the developed world in particular, consisting of both baby boomers (those born between 1946 and 1964) and Generation Xers, or Gen Xers, (those born in the years 1965 through 1980), had grown up watching Kraft Singles melting into grilled cheese sandwiches and atop barbecued burgers. Peeling off an individual slice of Kraft Singles cheese and layering it on bread toast was a breakfast ritual in many families. The orange colour and the square shape of each slice and the blue colour of the packaging had remained unchanged over time.

The need to reposition Kraft Singles had arisen because of reasons that were both external and internal. The number of millennials had been progressively increasing in Canada. In 2014, millennials had outnumbered baby boomers and Gen Xers. It was a tipping point. Millennials represented 36.8 per cent of the Canadian workforce in contrast to 33.9 per cent of Gen Xers and 31.1 per cent of baby boomers (see Exhibit 1).

Internally, cheese was an important category for Kraft Canada (and for Kraft Food Group, of which it was part), generating 25 per cent of sales revenue. But overall sales volumes for cheese were falling by approximately 1 per cent every year, while annual sales value was growing at about 2 per cent. The market for unprocessed cheese was expanding, whereas the market for processed cheese was falling. Kraft Singles, a processed cheese product, needed revival. Canada’s per capita consumption of cheese had been static since 2008, at approximately 12 kilograms, which showed signs of market maturity. In contrast, per capita consumption of cheese was 17 kilograms in Europe and 15 kilograms in the United States, which indicated some room for growth in Canada.2

1 This case has been written on the basis of published sources only. The interpretations and perspectives presented in this case are not necessarily those of Kraft Canada Inc. or any of its employees. 2 Government of Canada, “Global Cheese Consumption,” accessed November 13, 2015, www.dairyinfo.gc.ca/pdf/consumption_global_cheese_e.pdf.

This document is authorized for use only by Twila Henderson in MKT 5125 Case Study taught by RICKY FERGURSON, Nova Southeastern University from Apr 2019 to Jul 2019. For the exclusive use of T. Henderson, 2019.

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Kraft Canada was facing three dilemmas. How should it make the brand messaging of Kraft Singles compelling to Canadian millennial moms? What product innovations should the company bring to Kraft Singles, coinciding with the new messaging? How should Kraft Canada ensure that, in pursuing Canadian millennial moms, it would not alienate its traditional customer group—Canadian families?

CANADIAN CHEESE MARKET

The Canadian cheese market had sales revenue of CA$3.8 billion3 in 2014. The market was consolidated, with the four largest players holding 84 per cent of the market share. The overall market was led by Saputo, which had nearly 28 per cent market share (see Exhibit 2). While Saputo also led the unprocessed cheese segment (which was growing but was largely undifferentiated), Kraft led the processed cheese segment (which was witnessing slow growth but was sharply differentiated and competitive).4

Cheese was a staple product in Canadian households and in Canadian foodservices. Recently, cheese consumption had undergone some noticeable trends. For example, food consumption outside of meals was had previously trended toward snack food such as chips and snack bars (e.g., candy bars, granola bars). But a growing trend in health-consciousness had led to cheese emerging as a preferred snacking option for young Canadians, who were also inclined to try new flavours. As a result, flavour blends such as jalapeno cheese were becoming popular.

The prices of dairy products in general were regulated in Canada. Manufacturers did not have much room for price increases. To maintain the price point on the shelf, cheese manufacturers were seeking alternatives such as reducing the size of cheese packaging. For example, a 500-gram pack of cheese would gradually be reduced to 460 grams at the same price point. A major trend in packaging was retailers’ demands for exclusive pack sizes, which was intended to avoid the phenomenon of “price matching,” which was growing among competitive retailers for products with the same pack sizes.

In Canada, 99.8 per cent of cheese sales occurred through the store format. Grocery retailers, in particular, accounted for 96.9 per cent of cheese sales. For retailers, cheese was a higher margin business compared with other dairy categories such as milk. As a result, retailers were regularly strengthening their cheese sections. In-store sampling displays were common, and some stores had appointed cheese ambassadors to promote cheese and expand the occasions for its use.

MILLENNIALS

The interpretation of the term millennials differed by geography. In Canada, millennials were considered in 2014 to be in the age group 14 to 33 years, whereas in the United States, they were considered to be in the age group 18 to 34 years. In both countries, however, millennials were not only the single largest demographic cohort but were on the way to their prime years of working and spending. Millennials accounted for 6.3 million people in Canada5 and 68 million in the United States.6

3 $ = CA$ = Canadian dollar; All currency amounts are in CA$, unless otherwise specified; US$1 = CA$1.06 on January 2, 2014. 4 “Cheese in Canada,” Euromonitor International, August 2015. 5 Statistics Canada, “Table 282-0002: Labour Force Survey Estimates, by Sex and Detailed Age Group,” accessed November 15, 2015, www5.statcan.gc.ca/cansim/a26?lang=eng&id=2820002. 6 “Target: Millennials,” Ad Age, accessed April 28, 2014, http://brandedcontent.adage.com/cableguide2013/article.php? id=355.

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Millennials had come of age in an era characterized by disruptive phenomena (e.g., 9/11, protracted wars, and economic downturns) and anti-establishment movements (e.g., Occupy Wall Street and the Arab Spring). Their shopping and consumption habits were influenced by the unique experiences of their time.

A study by Goldman Sachs7 found, for example, that even at the peak of their home-buying years, millennials were reluctant to enter the housing market. Instead, many preferred to live with their parents, postponing both marriage and having children. They were unwilling to take on the burden of ownership of goods and services, giving rise to what was being called a “sharing economy.” They were not brand- conscious, turning to products offering maximum convenience at the lowest cost — such as private-label products. Wellness was an active pursuit. They exercised more, ate smarter, and smoked less than the baby boomers. They avoided soft drinks, candy, and pre-packaged foods, while being receptive to natural foods that promised health.

Millennials were value-conscious, which was evidenced by a study by The NPD Group showing that the dollar store retail channel was attracting millennials. While the brick-and-mortar retail segment saw a 4 per cent decline in store visits during the second quarter of 2014, the dollar store sub-segment saw a 14 per cent increase during the same period. The study attributed the increase to the attraction of millennials to dollar stores for their low prices.8

Food was one category where millennials did not mind spending money. According to the Specialty Food Association, millennials were willing to spend more money than their parents on products such as high- end chocolates, olive oil, and cheese.9

A report by Morgan Stanley in early 2015 showed that the millennials had distinctive food consumption habits,10 including eating out more often. Of all millennials, 53 per cent ate out once a week compared with 43 per cent for the general population. Millennials were also more likely than their parents to patronize eateries that portrayed good social ethics, which explained the popularity among millennials of such socially progressive brands as Starbucks.

Millennials preferred the category of fast casual restaurants (FCR), such as the restaurant chain Chipotle Mexican Grill, which served casual-dining quality food at fast-food speeds. Millennials comprised 51 per cent of FCR customers. The Morgan Stanley report also noted that while millennials also frequented quick service restaurants (QSRs) such as McDonald’s, most were too embarrassed to talk about QSRs with their peers. The millennials’ metrics of healthy food also differed. For example, for millennials, it mattered more that food was “fresh, less processed and with fewer artificial ingredients”11 in contrast to their parents’ tendency to focus on calories. Millennials were prone to snacking throughout the day, which meant that portable food products appealed to them. It also meant that the food products had to satisfy their need for both health and indulgence.

Millennials were a generation that had grown up on technology, but technology was not the be-all and end-all. A survey of millennials by WD Partners, a Canadian grocery retail advisory (which considered millennials to be “grocery’s next generation”), showed that hi-tech ambience meant little for them in a

7 “Millennials Coming of Age,” Goldman Sachs, accessed November 16, 2015, www.goldmansachs.com/our- thinking/pages/millennials/index.html. 8 Ibid. 9 Keith Nunes, “Putting Millennials in Perspective,” Food Business News, July 10, 2014, accessed November 15, 2015, www.foodbusinessnews.net/Opinion/Keith%20Nunes/Putting%20millennials%20in%20perspective.aspx?cck=1. 10 Ashley Lutz, “55 Ways Millennials’ Dining Habits Are Different From Their Parents,’” Business Insider, March 25, 2015, accessed November 11, 2015, www.businessinsider.com/millennials-dining-habits-are-different-2015-3. 11 Ibid.

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store. For millennials, technology meant getting real-time information about things that mattered. For example, while cruising a grocery store aisle displaying farm produce, millennials wanted real-time access to recipes and meal solutions based on the foods they saw in front of them. That was the experience they sought. They did not mind bypassing the convenience provided by a nearby store if, instead they could drive to a store, however far away, that offered the kind of experience they were seeking.12 They also wanted to connect with brands completely, to the extent that the in-store experience with a product was only the beginning. The experience would go beyond the purchase of the product.13

As consumers of social media, millennials were open to sharing personal information with retailers; however, they expected retailers, in turn, to customize their offerings. Millennials wanted to be individually catered to. For example, according to a survey conducted by Aimia, a Canadian company that analyzed marketing and loyalty programs, 53 per cent of millennials cited relevancy of rewards as a top reason for joining a loyalty program, compared with just 32 per cent of older consumers.14

In a 2012 study, The Boston Consulting Group classified millennials into six segments: Hip-ennial, Gadget Guru, Millennial Mom, Clean & Green Millennial, Anti-Millennial, and Old School Millennial, each with unique characteristics15 (see Exhibit 3).

Canadian Millennial Moms

BabyCenter, a web and mobile platform, surveyed 1,600 Canadian moms, comprising 804 millennial moms aged 18 to 32 years and 829 Gen X moms aged 33 to 44 years (see Exhibit 4). The survey found that, beyond the smartphone, millennial moms spent 4.6 hours consuming media digitally of their 7.8 hours of total media consumption in a day. It also showed the average age of first-time moms to be 28.5, and that 88 per cent of millennial moms were college- or university-educated, with an average college debt of $26,000. They were 38 per cent more likely to live with extended family than Gen X moms. Of all Canadian millennial moms, 22 per cent were considering cancelling their cable television subscriptions and 8 per cent had never had cable television. One in 10 watched online videos and movies on a mobile device daily. Canadian millennial moms spent 47 per cent more time online on their smartphones than Gen X moms.16

KRAFT FOODS INC. COMPANY BACKGROUND

Kraft Canada was one of Canada’s leading consumer packaged goods companies, with a product portfolio comprising 17 food and beverage categories. The company had two manufacturing plants in Canada, where it marketed refrigerated meals, refreshment beverages, coffee, cheese, and other grocery products. Its brands included Cracker Barrel, Philadelphia, Nabob, Kraft Dinner, Kraft Peanut Butter, Kraft Singles, Maxwell House, TASSIMO, and Kraft Salad Dressings.

12 WD Partners, “Grocery’s Next Generation: How Millennials Will Change Food Shopping,” accessed November 15, 2015, www.wdpartners.com/research/grocerys-next-generation. 13 International Dairy-Deli-Bakery Association, “What’s in Store 2015,” Trends Report (Madison, WI: IDDBA, 2014). 14 “For the Next Generation of Shoppers, It’s About Me!” Canadian Grocer, accessed October 16, 2014, www.canadiangrocer.com/top-stories/for-the-next-big-generation-of-shoppers-its-about-me-26367. 15 Christine Barton, Jeff Fromm, and Chris Egan, “The Millennial Consumer: Debunking Stereotypes, Center for Consumer and Customer Insights,” The Boston Consulting Group, 2012, accessed January 6, 2016, www.bcgperspectives.com/content/articles/consumer_insight_marketing_millennial_consumer/. 16 Matthew Chung, “Millennial Moms by the Numbers,” Strategy, April 25, 2014, accessed Aril 28, 2014, http://strategyonline.ca/2014/04/25/millennial-moms-by-the-numbers/.

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Kraft Canada was part of the Kraft Foods Group, a global enterprise with net revenues of US$18.2 billion and pre-tax earnings of US$4.1 billion in 2013 (see Exhibit 5). The portfolio of Kraft Foods Group included two brands with annual sales exceeding US$1 billion each—Kraft cheeses, dinners, and dressings and Oscar Mayer meats—plus more than 25 brands, each with annual net revenues between US$100 million and US$1 billion.

The group was founded in 1903 by Canadian-born James L. Kraft who, at his Chicago boarding house, had perfected the process of taking a milk-based product and making it long-lasting, consistent in quality, and easy to slice. In 1916, the entrepreneur received a patent for what he called “process cheese,” a sterilized product made by heating cheddar to 175 degrees Fahrenheit (79.4 degrees Celsius) for 15 minutes while whisking it continuously. The invention helped turn cheese into a shippable commodity that had a long shelf life. By 1930, cheese was no longer a standalone product; it was being used as an ingredient in such food products as salads and sandwiches. In 1965, the company launched Kraft Singles as “a slice like slab of cheese in a transparent, pliant wrapper.”17

The Kraft Foods Group was known for its decentralized operations wherein local managers had considerable autonomy. For example, the Oreo cookie marketed in China was in the form of a wafer instead of the globally marketed form of a sandwich. The change recognized the local preferences for cookies in the form of wafers. Following the change, Oreo had the fastest growing market share of cookies in China.18 In Canada, the company had developed a line of products suitable for people following the Halal diet, in observance of the Islamic dietary laws.19

Kraft Foods Group sold its products primarily to supermarket chains, wholesalers, supercentres, club stores, mass merchandisers, distributors, convenience stores, drug stores, value stores, and other retail food outlets. Its five largest customers accounted for approximately 43 per cent of net revenues in 2013, while its 10 largest customers accounted for approximately 56 per cent of net revenues. Walmart accounted for approximately 26 per cent of the company’s net revenues in 2013.

Kraft Foods Group had embarked on a brand rejuvenation plan in 2013. In addition to deploying traditional tracking tools such as scorecards and metrics, it started using a dedicated team approach to promote innovation. It set up what it called innovation garages, where designated teams could act like start-ups within the framework of a large organization. The outcomes to date included a rejuvenation of Kraft Singles American cheese (involving the elimination of artificial preservatives) and Philadelphia soft cream cheese (which acquired a fruity texture).20

At the retail level, Kraft Foods Group was tracking three key consumer segments in North America: low- income populations, Hispanics, and millennials.21

17 Charles Wilson, “Who Made That Kraft Single,” The New York Times, June 1, 2012, accessed November 11, 2015, www.nytimes.com/2012/06/03/magazine/who-made-that-kraft-single.html?_r=0. 18 Julie Jargon, “Kraft Reformulates Oreo, Scores in China.” The Wall Street Journal, May 1, 2008, accessed November 11, 2015, http://online.wsj.com/article_print/SBI120958152962857053.html. 19 Ibid. 20 Kate MacArthur, “Why Kraft Changed Its Innovation Strategy and What Happened Next,” Chicago Tribune Blue Sky, April 17, 2014, accessed December 28, 2015, http://bluesky.chicagotribune.com/originals/chi-barry-calpino-kraft-foods-bsi- 20140416,0,0.story. 21 Keith Nunes, op. cit.

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PRIOR PRODUCT LAUNCHES AT MILLENNIALS

Mio

The liquid concentrate category had been in decline in Canada for five straight years when, in March 2012, Kraft Canada decided to revive it with the launch of Mio, targeted at male millennials.22 Mio (meaning “mine” in Italian) was a concentrated-liquid water enhancer. Kraft already had water enhancers “for her” (Crystal Light) and for kids (Kool-Aid), but nothing for men. The immediate triggers were two-fold: Soft drink consumption (among the number of young Canadian males surveyed) had fallen from 37 per cent in 2007 to 33 per cent in 2011. During the same period, water consumption had increased from 58 per cent of all young Canadian males surveyed to 65 per cent.23 Kraft Canada saw an opportunity in the growing popularity of water among young males. As a new product, Mio represented several firsts in the market for water enhancers: the first move from a powder to a liquid, the first convenient sizing, the first mess-free and resealable package, and the first product to offer flexibility in how much flavour it delivered.

Kraft invited some YouTube stars to find inventive ways to make Mio squirt. The Texas-based group Dude Perfect, known for its online videos of basketball trick shots, took on the challenge on YouTube, blowing up bottles of Mio with explosives, hitting them with a sledgehammer, and shooting the concentrated red liquid into a glass several feet away by squeezing the little bottles in a vise—all in the name of discovering the most unusual ways to “trick squirt” the product into water.

The online video went hand-in-hand with Kraft Canada’s goofy television ad used to launch Mio. Featuring nonsensical humour targeted at younger viewers, the ad demonstrated how the product could be customized by the amount of liquid added to water. The media buy was focused on TV programs that not only were skewed towards males but also leaned heavily on digital media placements. Kraft Canada bought much more pre-roll (the ads that play before videos online) than usual on sites such as TSN.ca and MTV.ca. And on YouTube, it bought “True View” ads, which allowed viewers to opt out of ads they did not want to watch. The promotion was in response to research showing that male millennials watched videos on their computers more often, but were reluctant to watch advertising.

Because Kraft Canada knew that many males would not know where the mixed beverages section would be among store aisles, in-store executions made Mio visible both at the periphery of stores and at the point of sale. Promotions were run with water brands such as Co-op Gold Spring Water H20. The company established relationships with gas station stores to carve out some space in a channel where men shopped. By year-end, sales had grown 350 per cent over the previous year, racking up $17.19 million in revenue.24

Peanut Butter

Research by Kraft Canada showed that Canadian millennial moms were buying 13 per cent less peanut butter than the average consumer. The company decided to rebrand its peanut butter in April 2014, to target it specifically at millennial moms. It developed an advertising campaign that told the story of a girl growing up with the bear her mother had given her, and then giving a similar bear to her own child. The

22 Matthew Chung, “Marketers of the Year: Kristi Murl Changes Things Up at Kraft,” Strategy, December 13, 2013, accessed April 18, 2014, http://strategyonline.ca/2013/12/13/marketers-of-the-year-kristi-murl-changes-things-up-at-kraft/#ixzz2zFRX 9SiR. 23 Susan Krashinsky, “Staking the Elusive Millennial Male,” The Globe and Mail, July 19, 2012, accessed April 18, 2014, www.theglobeandmail.com/report-on-business/industry-news/marketing/stalking-the-elusive-millennial-male/article 4428728/. 24 Matthew Chung, op. cit.

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campaign tried to establish an emotional connection with the target group and build their affection for its peanut butter brand by making the teddy bear central to the package design. A teddy bear was a symbol of childhood, home, and security, often among the only items to survive countless purges and to be carried sheepishly into adulthood. It was a soft sell. The rebranding was so successful that Kraft Canada launched a line of bears for sale. Unlike many pieces of brand-related merchandise, however, the bears were logo- free. The Kraft name appeared only on the tags that most customers cut off.25

ISSUES BEFORE KRAFT CANADA

Making a Compelling Brand Message for Kraft Singles

Kraft Singles was a local product in the Kraft universe, where each country was free to develop its local communications strategy. At Kraft Canada, the dilemma around messaging was compounded by a commercial that had been launched by U.S. Kraft Foods in February 2014 that was doing the rounds on some Canadian TV channels. The U.S. commercial promoted Kraft Singles (the American version, though this was not specified in the commercial) as containing no artificial preservatives. In Canada, consumers had a lower tolerance for food preservatives than in the United States. But with U.S. commercials being aired freely on Canadian channels, longstanding Canadian consumers of Kraft Singles watched the commercial and wondered: What is going on?

The best way for Kraft Canada to attract millennial moms was to play on Kraft Singles’ four core brand attributes: health, nutrition, taste, and convenience. The messaging needed to be rooted in these attributes. It was only then that the messaging would be authentic. The issue before the company was determining which attributes needed to be played up in the context of the unique needs of Canadian millennial moms. Kraft Singles would not rank high on the attribute of health because it was processed cheese, which was a limitation. However, millennial moms were influenced by practices that ensured environmental sustainability. Therefore, highlighting the operational processes would likely make the messaging authentic. For example, the messaging could focus on the origin of cheese, (including the manner in which cows were raised and fed on dairy farms) and the production of cheese (including the efforts at reducing the carbon footprint at various steps in the value chain).

Kraft Canada faced a contradiction in a larger sense. Consumers were constantly evolving. It was also inevitable that Kraft Singles, too, needed to evolve, which was the only way the brand could stay relevant to consumers. However, Kraft had remained unchanged over decades. Its shape, size, and color had remained the same. Consistency was its main virtue. The brand was, in that sense, iconic. As a product, it also seemed perfect. Nowhere was it more pronounced than when chefs (e.g., Linton Hopkins) who used only homemade ingredients as a matter of faith in their cooking, turned without hesitation to Kraft Singles when it was time to add the cheese.

The dilemma before the company was around the brief it had to provide to its advertising agency in terms of developing a new TV commercial for Kraft Singles aimed at attracting millennial moms.

25 Susan Krashinsky, “Sticky Symbols,” The Globe and Mail, October 17, 2014, accessed October 17, 2014, https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20141017/RBCDPERSUASIONSYMBOLS.

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Product Innovation for Kraft Singles

Snacking was an important millennial eating habit, and cheese was an important snack for millennials. Each meal skipped was thus a sales opportunity for Kraft Singles, as was each snack break. Out-of-home eating was another defining characteristic of millennial mealtimes, although in contrast, millennial snack times were more likely to occur at home. Were there hidden opportunities in millennial eating patterns for some product innovations in Kraft Singles?

Kraft Singles could pique the interest of millennial moms by bringing the foodservice experience into the home. This approach would be consistent with the new social trend of “home chefs”—persons cooking at home for pleasure and aspiring to be recognized by friends and family for their professional approach to cooking. Home appliance companies (e.g., Electrolux) had already begun to develop cooking systems (e.g., Grand Cuisine) that were targeted at home chefs. This trend was another potential area for innovation.

Kraft Canada could also provide recipes and cooking tips to millennial moms, ideally by focusing on recipes that required less preparation time and fewer ingredients than typical meals.

The company could also work with retail stores to develop innovative promotions. Some of the retail innovations that Kraft Canada could work on included encouraging retail customers to linger at the cheese counter during store promotions; establishing unique “brand elements”—such as a logo, a colour, a melody, or symbol—to accompany Kraft Singles; developing flavours that were bold and adventurous; creating in-store cheese experiences; educating consumers at a store’s point-of-sale; appointing a cheese ambassador in each store; promoting sampling; suggesting how to cook with cheese and how to serve cheese; and even pairing wines with cheese.

Avoiding Alienation of Core Customer Group

Although Canadian demographics witnessed a tipping point in 2014, when the number of millennials represented 36.8 per cent of the country’s population, the fact remained that baby boomers and Gen Xers together represented a major segment. Older shoppers were still the most promising for the company to target. Unlike the millennials who were a new segment and whose shopping behaviours were untested, baby boomers and Gen Xers were easy to serve because Kraft Canada was familiar with their preferences. Unlike millennials who were hindered by their unique economic circumstances, older shoppers had experienced growth in real incomes since the 1970s and had driven shopping volumes. Over the past 40 years, shoppers aged 35 and older had consistently controlled 70 per cent or more of all shopping spending in the United States.26 No similar data were available for Canada but the figures seemed close and comparable.

26 Sucharita Mulpuru, The Future of Shopping, Forrester Research, April 9, 2015.

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EXHIBIT 1: CANADIAN WORKFORCE DEMOGRAPHICS, BY PERCENTAGE, 2009–2014

1999 2004 2009 2014 Millennials 7.2 17.8 27.4 36.8 Gen Xers 41.3 38.4 35.8 33.9 Baby Boomers 51.4 43.8 36.8 31.1

Source: Graham F. Scott, “Millennials Are Now the Biggest Generation in the Canadian Workforce,” Canadian Business, June 3, 2015, accessed August 15, 2015, www.canadianbusiness.com/innovation/the-millennial-majority-workforce/.

EXHIBIT 2: CANADIAN CHEESE MARKET SHARES

Source: “Cheese in Canada,” Euromonitor International, August 2015.

This document is authorized for use only by Twila Henderson in MKT 5125 Case Study taught by RICKY FERGURSON, Nova Southeastern University from Apr 2019 to Jul 2019. This document is authorized forThis document is authorized use only by Twila Henderson in MKT 5125 Case Study taught by RICKY FERGURSON, Nova University from Apr 2019 to Jul Southeastern 2019.

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EXHIBIT 3: MILLENNIAL SEGMENTS

Hip-ennial Gadget Guru Millennial Mom Clean & Green Anti-Millennial Old-School Millennial Millennial “I can make the “It is a great day to “I love to work out, “I take care of “I am too busy “Connecting on Personal world a better be me.” travel, and pamper myself and the taking care of my Facebook is too Statement place.” my baby.” world around me.” business and my impersonal, let’s family to worry meet up for coffee about much else.” instead.” • Cautious, globally • Successful, wired, • Wealthy, family • Impressionable, • Locally minded, • Not wired, aware, charitable, free spirited, and at oriented, works cause-driven, conservative cautious, and and information- ease out, confident, and healthy, green, • Does not spend charitable hungry • Feels this is his digitally savvy and positive more for green • Confident, • Greatest user of best decade • High online • Greatest products and independent, and

social media but • Greatest device intensity contributor of services self-directed For the exclusive use of T. Henderson, 2019. Attributes does not push/ ownership, • Highly social and content, usually • Seeks comfort • Spends least contribute content pushes/contributes information-hungry cause-related and familiarity amount of time • Female- to content • Can feel isolated • Male-dominated, over excitement, online, reads dominated, below- • Male-dominated, from others by her youngest, more change, or • Older, more average above-average daily routine likely to be non- interruption likely to be non- employment (many income, single • Older, highest white, full-time white are students and income student homemakers) Ratio 29 13 22 10 16 10

Source: Christine Barton, Jeff Fromm, and Chris Egan, “The Millennial Consumer: Debunking Stereotypes, Center for Consumer and Customer Insights,” The Boston Consulting Group, 2012, accessed January 6, 2016, www.bcgperspectives.com/content/articles/consumer_insight_marketing_millennial_consumer/.

This document is authorized forThis document is authorized use only by Twila Henderson in MKT 5125 Case Study taught by RICKY FERGURSON, Nova University from Apr 2019 to Jul Southeastern 2019.

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EXHIBIT 4: SURVEY OF CANADIAN MILLENNIAL MOMS

On average, how many hours in a typical Which words best describe the way your How many children, in total, do you plan to weekday do you currently spend doing parents or guardians raised you? have? each of the following activities? Fewer for Herself Parenting Time Millennial Mom Gen X Mom Millennial Mom Gen X Mom (−13 hours) (+13 hours) Working (−2.9) Cooking (0.7) Forgiving (54%) Forgiving (43%) One (4%) One (13%) Partner Time (−2.8) Cleaning (0.9) Involved (54%) Involved (47%) Two (45%) Two (49%) Socializing (−2.2) Laundry (0.9) Enabling (31%) Enabling (21%) Three or More (33%) Three or More (24%) Sleeping (−1.7) Morning Routine (1.9) Conservative (43%) Conservative (48%) Not Sure (18%) Not Sure (15%) Hobbies (−.5) Bedtime Routine (2.2) Strict (41%) Strict (46%) Exercising (−1.2) Kids’ Activities (2.6) Traditional (50%) Traditional (54%)

Watching TV (−1.1) Feeding Children (3.9) For the exclusive use of T. Henderson, 2019. Inference: Millennial mom spends her time Inference: Millennial mom was raised Inference: Millennial mom is comfortable differently than Gen X mom. differently than Gen X mom. considering a bigger family. Which words best describe your parenting How often do you do the following on your Do you have any of these devices or style? mobile phone (weekly or more often)? services? Millennial Mom Gen X Mom Millennial Mom Gen X Mom Millennial Mom Gen X Mom Involved (84%) Involved (75%) Texting (98%) Texting (93%) Smart phone (87%) Smart phone (86%) Supportive (83%) Supportive (79%) Seeking advice (82%) Seeking advice (69%) Laptop (74%) Laptop (81%) Realistic (69%) Realistic (62%) Finding recipe (66%) Finding recipe (64%) Tablet (58%) Tablet (69%) Relaxed (54%) Relaxed (47%) Watching video (46%) Watching video (35%) Landline phone (36%) Landline phone (58%) Desktop (37%) Desktop (46%) Inference: Millennial mom is more laid back Inference: Mobile mom uses mobile for a Inference: Millennial moms are mobile moms. than Gen X mom. range of activities.

Source: “2014 Millennial Mom Report: Canada Insights,” www.babycentersolutions.com/research-and-insights.html, accessed October 30, 2015.

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EXHIBIT 5: KRAFT FOODS GROUP’S INCOME STATEMENT, 2011–2013 (IN US$ MILLION)

Year ending December 2013 2012 2011 Beverages 2,681 2,718 2,990 Cheese 3,925 3,829 3,788 Refrigerated meals 3,334 3,280 3,313 Meals & desserts 2,305 2,311 2,271 Enhancers & snack nuts 2,101 2,220 2,259 Canada 2,037 2,010 1,967 Other businesses 1,835 1,903 1,988 Total Revenues 18,218 18,271 18,576 Cost of Sales 11,395 12,499 12,813 Gross Profit 6,823 5,772 5,763 Net Profit 2,715 1,642 1,775

Source: Kraft Foods Group Annual Report 2013, 40, accessed October 15, 2015, http://ir.kraftfoodsgroup.com/annuals.cfm.

This document is authorized for use only by Twila Henderson in MKT 5125 Case Study taught by RICKY FERGURSON, Nova Southeastern University from Apr 2019 to Jul 2019.