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Advanced EntrepreneurshipDecember 1st, 2011
An On Trend SnackA Category Disruptor Brand
Premium Quality All-Natural 50%+ Less Salt/Fat Foodie Flavors Softer/Moist Texture Contemporary Branding Better Margins
( J E R K Y 2 . 0 )
TEAM KRAVE
↓
WHY A DISRUPTION
Th e O p p o r t u n i t y + M a r ket C on d i ti on s
Limited Market Segmentation Lethargic Competitors Favorable Consumer + Trade Dynamics Entrepreneurial Entrant with New
Approach and Fewer Constraints Clear / Meaningful Differentiation vs.
Mainstream Competitors
Th e E xa m p l e s
Industry
Airlines Virgin AmericaIce Cream Ben & Jerry’sBeer
Samuel AdamsPotato Chips Kettle / Terra ChipsCoffee StarbucksChocolate ScharffenbergerWater Vitamin WaterCereal Kashi / Bear NakedEnergy Bar Cliff Bar
Meat Snacks / Jerky KRAVE
Convention Buster Brand
MARKET SIZE
Giant Markets > Meat: $160B / Snacks: $70B > Meat Snacks: $4B
Varying Growth Rates> Meat: + 5%> Snacks: + 15%> Jerky: + 5%
Mega Consumer Trends Converging
> Healthy, More Flavorful, Higher Quality
Snacks Driven by Innovation / News
Meat Snacks / Jerky Generally Sleepy> Limited Innovation> “Gut Stuffer” Image
Change Underway Driven by New Entrants
> All-Natural> 10% Growth Latest 52 Weeks Nielsen F/D/M
2009 US Snack Food
A m e r i ca ns L o v e to Ea t M e a t a nd S n a c k
Retail Sales
Source: US Package Facts
Sweet$35B
Salty$30B
Meat$4B
THE TEAM
PhD Engineering Technology Specialist Previous Entrepreneur Alternative Prospect
Food & Beverage Domain Experience Previous Entrepreneur
Manufacturing Experience CPG Marketing Background
J o n S e b a s ti a n i
Ka m i l A g i
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab)-Public Relations Firm - Glodow Nead
Key Activities-New distribution channels-In-store demos-Formal customer supportservice
Value Prop-Unique package-Quality of meat-Health benefits of jerky-Snack taste
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes- Gourmet food enthusiasts- Purposeful eaters - Vegetarian Jerky- Female segment
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets-Krave Jerky Stores
KRAVE CANVAS SUMMARY #1
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
WHAT WE DID
Ta r g e t e d F o c u s P o i n t s Over 10 In-Store Demo’s including 100’s of customer surveys Sonoma County Wine and Food Festival – 50 Surveys Online Survey – Over 100 Surveys
M e e ti n g s w i t h A d v i s o r s , M e n t o r s a n d I n d u s t r y E x p e r t s
Private Equity Groups – Including Encore, TSG, VMG, Verge, Blue Horizon and ex-TPG partners Mentors - Gina Bianchini, Robert Siegal, Adam Tachner
10 – 25% Price Premium vs. Mainstream Competitors Advisors – Steve Blank, Jim Hornthal and Oren Jacob Broker Network – Ignite Sales, Advantage Sales
WHAT WE LEARNEDKRAVE vs . Competi ti on
Fitness Enthusiasts Healthy Snackers, Foodies Targeted to Men and Women All Natural Ingredients Gourmet / Premium / Modern Image US Sourced Meat Higher Quality Meat Cuts 50% Less Salt and Fat Moist and Tender Texture Grocery and Specialty Channel Focus
Manufacturers vs. Marketers > Jerky = Waste Reducer / Capacity Filler
> All Similar Offerings – Compete on Price All Targeted to Men Artificial Ingredients “Gut-Stuffer” / Traditional Image South American Sourced Meat Unknown Quality of Meat Cut High Fat / Sodium Content Dry and Tough Texture Limited and Conventional Flavors
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab)-Public Relations Firm - Glodow Nead-Manufacturer
Key Activities-New distribution channels-In-store demos-Formal customer supportservice- Social media leverage
Value Prop-Unique package-Quality of meat-Health benefits of jerky (✔)--Snack taste (✔)
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments-Athletes (✔)-Gourmet food enthusiasts-Purposeful eaters (✔)-Vegetarian Jerky- Female segment (✔)
Key Resources- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets-Krave Jerky Stores-Kiosks
KRAVE CANVAS SUMMARY – Summary #2
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
WHAT WE DIDRetai l Penetrati on
4,000 Retail Outlets – Grocery Stores, Online Shopping, Specialty Food Stores
THE GLIMPSE OF DEATH
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway,QVC. KeHE)Flash sale sites (Woot, Joss & Main, Fab)-Public Relations Firm - Glodow Nead-Manufacturer-Order Fulfillment
Key Activities-New distribution channels-In-store demos-Formal customer supportservice-Social media leverage-Manufacturing-Vertical/Horizontal integration
Value Prop- Unique package- Quality of meat- Health benefits of jerky- Snack taste
Cust. Relations-Branding-Customer education-Public relations-In-store demo-Frequent buyer program
Cust. Segments-Athletes-Gourmet food enthusiasts-Purposeful eaters-Vegetarian Jerky- Female segment
Key Resources- Direct to store delivery- National distribution- National media (e.g. AP, WSJ articles)
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets/retail-Krave Jerky Stores-Kiosks
KRAVE CANVAS FINAL
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market (specialty)-$500m jerky market (niche)-Gross margins or revenues
Revenue Stream-$5.95 (retail)- QVC - KeHE/Tree of life- Flash sites - Direct sales
WHAT’S COMING DOWN THE PIKE?
Roll-out of KRAVE 2.0 in Q1 2012 New Branding Better Product New Size (3.25 oz) Formal Marketing / PR Drive
Launching with Safeway on National Basis in Jan 2012 5 Flavors $5.99 / unit price to Consumer
Addition of Other Major Distributors in Q4 ‘11 / Q1 ‘12
MOVING FORWARD
Publ ic Relati ons
BUSINESS PERSPECTIVE
2011 – 2012 YOY Growth2 0 1 1 - $ 1 , 6 0 0 , 0 0 0
2 0 1 2 - $ 7 , 0 0 0 , 0 0 0 + 4 5 0 %
Krave – on!
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab)-Public Relations Firm - Glodow Nead
Key Activities-New distribution channels-In-store demos-Formal customer supportservice
Value Prop-Unique package-Quality of meat-Health benefits of jerky-Snack taste
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes- Gourmet food enthusiasts- Purposeful eaters - Vegetarian Jerky- Female segment
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets-Krave Jerky Stores
KRAVE CANVAS SUMMARY WEEK 1
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab)-Public Relations Firm - Glodow Nead
Key Activities-New distribution channels-In-store demos-Formal customer supportservice
Value Prop-Unique package-Quality of meat-Health benefits of jerky-Snack taste
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes- Gourmet food enthusiasts- Purposeful eaters - Vegetarian Jerky- Female segment
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets (✔)-Krave Jerky Stores
KRAVE CANVAS SUMMARY WEEK 2
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab) -Public Relations Firm - Glodow Nead
Key Activities-New distribution channels-In-store demos-Formal customer supportservice
Value Prop-Unique package-Quality of meat-Health benefits of jerky-Snack taste
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes - Gourmet food enthusiasts- Purposeful eaters - Vegetarian Jerky- Female segment (✔)
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets (✔)-Krave Jerky Stores
KRAVE CANVAS SUMMARY WEEK 3
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab) -Public Relations Firm - Glodow Nead
Key Activities-New distribution channels-In-store demos-Formal customer supportService- Social media leverage
Value Prop-Unique package-Quality of meat-Health benefits of jerky-Snack taste (✔)
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes (✔)- Gourmet food enthusiasts- Purposeful eaters (✔)- Vegetarian Jerky- Female segment (✔)
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets (✔)-Krave Jerky Stores-Kiosks
KRAVE CANVAS SUMMARY WEEK 4
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab) (✔)-Public Relations Firm - Glodow Nead
Key Activities-New distribution channels-In-store demos-Formal customer supportservice
Value Prop-Unique package-Quality of meat-Health benefits of jerky-Snack taste (✔)
Cust. Relations-Branding-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes (✔)- Gourmet food enthusiasts- Purposeful eaters (✔)- Vegetarian Jerky- Female segment (✔)
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus)-Supermarkets (✔)-Krave Jerky Stores-Airport kiosks-South Beach diet-Jerky store in Vegas
KRAVE CANVAS SUMMARY WEEK 5
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, Flash sale sites (Woot, Joss & Main, Fab) (✔)-Public Relations Firm - Glodow Nead-Manufacturing
Key Activities-New distribution channels-In-store demos-Formal customer supportservice
Value Prop-Unique package-Quality of meat-Health benefits of jerky (✔)-Snack taste (✔)
Cust. Relations-Branding (✔)-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes (✔)- Gourmet food enthusiasts- Purposeful eaters (✔)- Vegetarian Jerky- Female segment (✔)
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution
Channels-Direct to consumer – web-Vending machines-Specialty stores (Cost Plus) (✔)-Supermarkets (✔)-Krave Jerky Stores-Airport kiosks (✔)-South Beach diet-Jerky store in Vegas
KRAVE CANVAS SUMMARY WEEK 8
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market
Revenue Stream-$5.95
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, KeHeFlash sale sites (Woot, Joss & Main, Fab) (✔)-Public Relations Firm - Glodow Nead (✔)-Manufacturing (✔)
Key Activities-New distribution channels (✔)-In-store demos-Formal customer supportServiceSocial Media LeverageManufacturingVertical Horizontal Integration
Value Prop-Unique package (✔)-Quality of meat (✔)-Health benefits of jerky (✔)-Snack taste (✔)
Cust. Relations-Branding (✔)-Customer education-In-store demo-Frequent buyer program (✔)
Cust. Segments- Athletes (✔)- Gourmet food enthusiasts (✔)- Purposeful eaters (✔)- Vegetarian Jerky- Female segment (✔)
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution-National Media (AP, WSJ, etc.)-Gross margins versus top line revenues
Channels-Direct to consumer – web (✔)-Vending machines-Specialty stores (Cost Plus) (✔)-Supermarkets (✔)-Krave Jerky Stores-Airport kiosks (✔)-South Beach diet-Jerky store in Vegas
KRAVE CANVAS SUMMARY WEEK 11
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market-Gross margin vs. Revenue
Revenue Stream-$5.95(✔)-KeHe/Tree of Life-Direct Sales(✔)-Flash sites(✔)-QVC(✔)
Key Partners-Transactions: Paypal, Visa, Mastercard-Channel to Consumer: HSN, Safeway, KeHeFlash sale sites (Woot, Joss & Main, Fab) (✔)-Public Relations Firm - Glodow Nead (✔)-Manufacturing (✔)-Order Fulfillment (✔)
Key Activities-New distribution channels (✔)-In-store demos-Formal customer supportServiceSocial Media Leverage (✔)ManufacturingVertical/Horizontal Integration(✔)
Value Prop-Unique package (✔)-Quality of meat (✔)-Health benefits of jerky (✔)-Snack taste (✔)
Cust. Relations-Branding (✔)-Customer education-In-store demo-Frequent buyer program
Cust. Segments- Athletes (✔)- Gourmet food enthusiasts (✔)- Purposeful eaters (✔)- Vegetarian Jerky- Female segment (✔)
Key Resources- Jon Sebastiani- Direct to store delivery- National distribution (✔)-National Media (AP, WSJ, etc.) (✔)
Channels-Direct to consumer – web (✔)-Vending machines-Specialty stores (Cost Plus) (✔)-Supermarkets (✔)-Krave Jerky Stores-Airport kiosks (✔)-South Beach diet-Jerky store in Vegas
KRAVE CANVAS SUMMARY WEEK 14
Cost Structure-Slotting Fees-Temporary price reduction,Scan based discount-In-store demo-$19m target market (specialty jerky)-Gross margin vs. Revenue(✔)
Revenue Stream-$5.95 (✔)-KeHe/Tree of Life-Direct Sales (✔)-Flash sites (✔)-QVC (✔)-Cash flow-2012 Projections