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Unwrap Fresh Marketing Ideas
White Paper from June 2003 Naarden Meeting
Overview:
The NatureWorks™ brand is capturing shoppers’ attention and loyalty as they seek to provide
natural, wholesome and convenient meal solutions to their families. Consumers prefer fresh
foods packaged in 100 percent natural-based packaging because it offers all of the convenience
of traditional plastic without the environmental compromise.
The following document provides a summary of brand discussions at a recent meeting in
Naarden, The Netherlands. The purpose of the meeting was to look at how to best understand
and sell this brand concept in Europe.
Table of Contents
Food Retail Marketing
Market facts 3
Retail opportunity 4
New retail model 5
European targets 6
Market Research
Consumer testing 7
Likelihood to pay more 8
Kassel findings 9
Key Messages
Retailer 10
Disposable and specialty 11
Case Studies
Iper 12
Bed Bath & Beyond 13
Wild Oats 14
Sustainability
Cargill Dow’s position 15
Product criteria 16
“Green” marketing 17
Life Cycle Analysis (LCA)
LCA primer 19
LCA for PLA 20
Maize Source
Issues discussion 23
Brand Awareness
Public Relations 25
Advertising 25
Trade fairs 26
Direct marketing 26
Point of sale 27
Miscellaneous discussion points
Maize use 28
Plastic or non-plastic? 28
Price 29
2
Food Retail Marketing
In the grocery retail environment, stores and chains must continue to innovate if they are to
succeed. By reviewing the size of the retail market, as well as the spending that goes into the
specific sections of the retail market – produce, deli and bakery – we see a clear opportunity for
NatureWorks PLA.
Size of the market The food retail opportunity in Europe is estimated to be 174 b Euro
($198 b).
• Produce ~ 102.36 b Euro ($116 b).
• Delicatessen ~ 30 b Euro ($34 b).
• Bakery ~ 42.35 b Euro ($48 b).
Opportunity for packaging Annual market expenditure for packaging is 2.5%.
Why target these areas This is where the profit for the retailer is, at the edge of the store.
• Where they try to present the quality image that
differentiates their own brand.
• Innovative retailers use this area to set themselves
apart.
• Early adopters of NatureWorks PLA are experiencing
strong success in these aisles.
• Major brands tend to be found in the center aisles.
o Limited basis for differentiation there.
Characteristics Fresh food departments tend to have similar traits.
• Higher gross profits.
• Destination departments focusing on ‘quality.’
• Point of store brand differentiation.
• Consistent product assortment.
• Where best-trained staff is typically found.
• Tremendous point for promotion opportunities.
• Can often “own” the whole department.
3
Opportunity is Ripe The old system really doesn’t apply any more. Retailers’
marketing strategy is how to make more profit and differentiate to
create customer value and loyalty.
Retailers must find opportunities to either increase revenue or cut
costs.
• Cutting cost is not sustainable over time, so the more
innovative retailers are looking to get more customers in
the door and attract new buyers.
• Margin is fundamentally higher at the edge of the stores
(produce, bakery, deli).
o NatureWorks PLA creates impact at the point of
sale by using packaging to add value to the food
sale.
o Consumers have a new reason to buy the product.
4
Creating a New Retail
Model With the NatureWorks brand, retailers can capture value in new
and multiple ways.
The brand helps attract more customers through department
differentiation. It helps drive customer trial and is often a
‘gateway’ into other store departments.
A New Way to Think NatureWorks creates point of sale impact by making ‘plastic’
packaging – until now a commodity – a meaningful aspect of a
fresh food purchase. It essentially makes the food inside seem
‘new and improved.’
The brand will positively impact sales by improving customer
perception of the fresh food products packaged in them.
NatureWorks PLA offers a new, emotional item to sell:
• Fresh foods in natural-based packaging.
• Deliver the wholesomeness of “farm grown” packaging.
• Offer something fun and intriguing.
• Is compostable.
5
European Targets
These key retailers were chosen because they Albert Heijn
are spending time on marketing, building Auchan
differentiated store brands, and consumer Barilla
minded. Bonduella
Carrefour
These retailers tend to set the trends that Conad
others will follow. Coop
Cornu
They are predisposed to co-branding. Delhaize
Finiper
Targeting the NatureWorks brand to such
Guillen
innovators will create short-term success
Hartman
stories, build broader market visibility, and
ultimately drive long-term sales. Marks & Spencer
Migros
Spar
SuperQuinns
Unes
Waitrose
6
Market Research
Studies have shown that the NatureWorks brand is highly sought after by consumers. They are
intrigued by it, want it, and are willing to pay more for it. All of the research supports the
conclusion that the market is ripe for natural-based packaging.
Name testing The NatureWorks brand name was tested in France, Germany,
Italy, Japan, Spain, United Kingdom and the United States. It was
ranked against 20 possible names and was selected as the most
appropriate name. This demonstrates that the name has strong
global appeal.
The NatureWorks name was also recently tested against the name
Ingeo (Cargill Dow’s fiber brand) and was overwhelmingly
selected as the preferred name for food packaging.
The simple, yet powerful, message that “nature works” is
something that consumers can immediately understand and
embrace.
Consumer research Testing has been conducted in the United States and European-
specific testing is in its final stages. Initial indications are that the
European results are in line with and similar to the consumer
findings from the U.S. (details below).
An analysis technique was used where respondents stated their
interest in a new delicatessen concept on a scale of 1 to 10.
The concept tested read as follows:
Use new packaging material for bakery, produce, and delicatessen
items. This new packaging, called NatureWorks PLA, is made
100% from maize, the food contained in this package is fresh and
safe for my family, and the packaging can be composted.
Other concepts rated included:
• Offering freshly packed spices.
• Putting nutritional information on containers.
• Only selling organic meats and vegetables.
Note: this was not a comparative ranking among the concepts.
7
Concept findings Consumer response to the brand concept is very strong.
• Nearly 80% of consumers find the concept desirable.
• A substantial segment (41%) finds the concept very
desirable.
o This segment was similar to those ranking fresh
packaged spices very high.
o This segment was larger than those interested in
only organic meats and vegetables (29%).
Likelihood to pay more Of those ranking the concept highly desirable:
• 74% said they would pay 5 cents more per package of food.
• 60% said they would pay 10 cents more per package of
food.
• 52% said they would pay 20 cents more per package of
food.
This means that retailers have a significant opportunity to capture
addition value in their fresh food departments.
Just as a frame of reference:
• Of those who ranked the herb concept very high, only 39%
were willing to pay more.
• Of those who ranked the organic concept very high, 57%
would pay 30 cents more per item.
City-by-city results Testing was also segmented on a city-by-city basis. The
results are fairly consistent across locations.
• Reinforcing the broad appeal of the concept
Sharing this information with retailers is a good sales tool to start
retailer discussions.
Similar data will be available in Europe soon.
8
Kassel Findings The Kassel project was a limited-scale test market to
determine if consumers would recognize, buy, and sort
compostable items. It included a variety of compostable packaging
and went beyond food applications.
Conducted in Kassel, Germany, the test proved strong consumer
interest in compostable plastics exists. It also demonstrated the
feasibility of municipal composting as an effective waste reduction
and removal strategy.
Key findings of the trial further support the market opportunities
for NatureWorks PLA in Europe. Though the post-trial survey
findings are not specific to NatureWorks PLA, they do highlight
considerable consumer interest in compostable plastics.
Highlights include:
• 91% of respondents said more needs to be done to prevent
packaging waste.
• 89% said that they would buy products in compostable
packages again.
• 83% of respondents said they think sorting packaging
material makes sense.
• 60% said they were ready to pay higher prices for
environmentally friendly products.
• 93% of respondents ranked compostable plastics from
starch as the most environmentally friendly packaging
material.
• 82% of respondents said it was a good idea to replace
conventional plastics with biodegradable ones.
• 78% of respondents agreed with the statement that, “In the
future, all fruit and vegetable packaging should be made
from renewable resources.”
• 74% of respondents said they have no concerns if maize
and potatoes are also grown for plastic packaging.
• 83% said they have no fear the compostable packaging
could decompose during transport or use.
• 78% think compostable packaging is just as suited for
organic products as conventional food.
9
Retailer Messages
NatureWorks PLA packaging offers unique opportunity for differentiation at retail
- Topline growth potential vs. low cost to serve strategy (i.e. Wal-Mart or Aldi)
Consumer desirability for natural and compostable packaging confirmed and quantified
- Share US national / regional & EU country specific (avail as of 9/11) conjoint analysis
Retail impact measured
- Case studies independently confirm consumer appeal, sales increases and additional
margin potential
- News media very interested in reporting and covering local launches
Supply channel in place and ready to serve; also possible to work with preferred packaging
suppliers
- Easiest with existing packaging suppliers if retailer emphasizes preference and priority
- Need to create a step change in demand to realize economics…chicken and egg
Unique opportunity to be an early adapter of: deli/bakery/produce packaging, consumer
disposable products
- Leverage competitor / key customer or supplier where possible
- What is involved in implementing such a packaging change and promotional campaign?
- CD is willing to subsidize switching costs in exchange for co-branding, making launch
a priority and accelerating implementation
Would a relatively cost neutral switch to a differentiated packaging proven to deliver
increased category sales/brand visibility be of interest?
-Yes - immediately move into planning specifics
-No - happy to work at the place that is comfortable for retailer…please define what that
is and prioritize accordingly
10
Disposables and Specialty Targets Messages
NatureWorks PLA service ware (or packaging) offers unique opportunity for
differentiation
- Demonstrates end user core mission and values which will strengthen consumer loyalty
to product and brand (emotive)
Consumer desirability for natural and compostable packaging confirmed and quantified
- Share US national / regional conjoint analysis
NatureWorks impact measured
- Case studies independently confirm consumer appeal, sales increases and additional
margin potential
- News media very interested in reporting and covering local launches
- Summarize Wild Oats, Iper, PCF, and soon to be disposables launches (EU, US)
Similar concepts already commercial in key target markets (drinking cups / cutlery / plates
& bowls or other packaging) or soon to be
- Opportunity to be an early adapter yet low risk since already demonstrated in a similar
way
- Show broad range of commercially globally available drinking cups/ cutlery/ bowls,
especially WM, FabriKal, Biocorp, Ilip articles
- Recap commercial use of such articles, McDonalds EU, NBB, Coke, Odwalla, Penn
State, National Parks starting
Channel to market is fully developed and there is also flexibility in supplier preference
- Easiest with existing suppliers if end user emphasizes preference and priority
- Need to create a step change in demand to realize economics…chicken and egg
Unique opportunity to be an early adapter of: drinking cups, service ware or specialty
packaging
- Leverage competitor / key customer or supplier where possible
- What is involved in implementing such a packaging change and promotional campaign?
- CD is willing to subsidize switching costs in exchange for co-branding, making launch
a priority and accelerating implementation
Would a relatively cost neutral switch to a differentiated packaging proven to deliver
increased category sales/brand visibility be of interest?
-Yes - immediately move into planning specifics
- No - happy to work at the place that is comfortable for target…please define what that
is and prioritize accordingly
11
Case Studies
IPER
IPER supermarket started selling food packaged in NatureWorks PLA in one store. It was so
successful and so popular with consumers that the retailer expanded the line to all 21 stores in
Italy.
IPER has been using NatureWorks PLA for fresh food containers for more than 1.5 years. The
natural-based packaging was first used for packaging with fresh food, then ready-to-go foods.
Now, NatureWorks PLA is being used in bread bags – the store is replacing polypropylene bags
with a paper featuring and window made with NatureWorks PLA. IPER is considering other
film and rigids applications.
The retailer first started using NatureWorks PLA to be consistent with its corporate
environmental position and in-store promotional strategy. They believe use of the brand and
packaging creates a consistency and synergy with their message and products. The result is a
powerful marketing tool that is helping drive sales and build the company’s own brand image.
IPER uses an employee and consumer education campaign to raise awareness of the new
packaging. Banners and leaflets are used at the point of sale to explain story of NatureWorks
PLA packaging.
The retailer also holds promotional events featuring actors dressed as ears of maize. This
“mascot” serves as a greeter in the delicatessen, drawing instant attention to the packaging
change. The fun approach is also proving successful in helping drive customer trials in the
department.
12
Ingeo™ Fibers
Though not a grocery retail example, the Ingeo fiber case study effectively demonstrates that
there is strong consumer interest in the concept of making everyday items from maize not
petroleum.
The Cargill Dow brand team supported the introduction with the goal of driving consumer traffic
in support of PCFC product introductions at Bed Bath & Beyond, as well as Younkers stores.
In this product launch, a bedding retailer drove awareness of the brand and through promotion of
natural based fibers in their product. .
• Sales went up substantially
• High recognition/high value introduction.
o Up to 2-3x previous basic product pricing.
• The brand owners translated the concept into the marketplace and saw value .
Substantial publicity success and value:
• 110 national/consumer articles.
• 40 million impressions.
• 2 New York primetime TV interviews (key focus for retailers).
• 3 Des Moines & Omaha TV feature stories.
• 9 radio station interviews.
• $1.5 million in PR coverage for print alone.
13
Wild Oats Markets
Wild Oats holds a strong position in natural foods and products. It is a high-end retailer. The
company decided to roll out NatureWorks PLA at their Nature’s Markets (11 stores) in Portland,
Oregon, the United States.
• Pushed in delicatessen section with ‘grab-and-go’ foods.
o As the consumer walks into the store, they see a large display.
• Counter has point of purchase display ‘maize to plastic.’
o Quickly tells what they are buying, why it is different, why it is important.
• Did point-of-sale selling and employee education .
• Stickers and labels identify new containers.
• Introduction achieved very broad national exposure (CNN, Associated Press, Reuters),
as well as significant local coverage.
• Closing the loop.
o Wild Oats took a total marketing approach and solved issue of composting with
store return.
Image value created interesting effect – major competitors has seen this
and is now calling to say, “I need this.”
Wilkinson is manufacturer of thermoformed containers in use at this store. Project has been good
exposure for Wilkinson as the supplier. It is generating lots of interest and questions. Cargill
Dow is looking for a similar big event in Europe with a large retailer.
14
Sustainability
Cargill Dow’s NatureWorks PLA is sold as a resin
pellet. It is a polymer designed to perform as well
or better than petrochemical-based traditional
polymers, and to fit into existing polymer
conversion systems with a minimum of
adjustments. The difference is not in how
NatureWorks PLA looks, but in how it is made.
Though you can’t tell by looking, NatureWorks
PLA offers an exiting difference in how it is made.
It is made from annually renewable resources by
environmentally friendly processes.
Cargill Dow’s commitment to sustainability is
grounded in its business philosophy.
The company is held accountable to this simple and
straightforward mission.
The philosophy has two main components:
• Meeting needs today with a polymer that
works as well or better in existing
conversion systems and market applications
• Ensuring that future generations will be
able to derive benefits of plastics from
abundant annually renewable resources and
with fewer environmental problems.
The triple bottom line guides how Cargill Dow will
go forward and measure its success.
• Economic success is required to be
successful on a global scale.
• Life-cycle analysis is used to guide
environmental sustainability.
• Success must also lead to success for
farmers and our communities.
15
Cargill Dow’s commitment to sustainability
and business philosophy are directly reflected
in the design criteria applied to NatureWorks
PLA.
In short, we believe that pursuit of
sustainability dictates that a new polymer
product must be:
• Measurably better for the environment
• Less economically, environmentally
and socially costly due to a safer,
more environmentally friendly
processes and materials
• Easy fit, with clear advantages, in all
kinds of waste streams
The pursuit of sustainability teaches that we
should take a hard look at the entire system of
manufacturing NatureWorks PLA.
One thing we learned is that even with all the
advantages of using dextrose instead of
petroleum as a feedstock, there might be even
more exciting opportunities in annually
renewable resources.
Cargill Dow is actively researching how we
might use ‘biomass’ – the stalks and other
agricultural ‘waste’ and a feedstock for lactic
acid production.
Biomass potentially offers lower cost,
beneficial use of a material previously treated
as waste, and a new opportunity fore
economic development in rural areas.
Lignin, a component of agricultural biomass
that cannot be converted to PLA, offers the
potential of providing the energy needed to
run the fermentation processes. In all,
biomass may offer a real “triple bottom line”
improvement to the manufacturing of PLA.
Cargill Dow is eager to work with business
partners and their customers to explain and
help establish sustainable business activities.
16
Green marketplace The numbers and research show there is a sizable market interested
in sustainability and consumer willingness to pay more for
sustainable products and processes.
A common mistake is misreading the fact that many people are
willing to pay very little and some are willing to pay nothing to be
more sustainable. As a result, there is a temptation to think that a
retailer needs to move price to sell to 90% of customers. The
concept of “price down, market gets huge” doesn’t get to the issue
of revenue or the ability to sustain long-term sales.
However, if a company multiplies the number of people times
what they are willing to pay for a perceived benefit of being more
sustainable, it becomes the most profitable way to sell. This has
been proven with the sale of green energy. People are willing to
pay more if there is perceived value and quality.
Green marketplace strategy Thinking through all of the ideas will quickly show whether or not
selling the concept of “sustainability” makes sense for a customer.
Questions to be asked include:
• How many people – willingness to pay?
• Is the target volume or revenue?
• How does that change over time?
• Is a smaller piece of market willing to spend more?
• Does the cumulative value generates revenue vs. volume?
Five Cs to selling green:
• Cost.
• Clarity (understand clearly what they are buying).
• Confidence (trustworthy).
• Credibility.
• Content (bang for their buck – measurable, significant
benefits).
17
Future-focused solution Cargill Dow is not seeking to ‘attack’ petroleum-based plastics,
but rather to create a market leadership position in more
sustainable plastics.
These products will exist alongside for many years.
• Don’t want customers to feel uncomfortable about use of
other plastics, but want them to have options.
• We are expanding the menu and giving consumers an
opportunity to ‘do something’ about environmental side of
packaging.
• Sharing in the growth of the global packaging market.
Key sustainability takeaways for customer discussions:
• The product works as well, with value-added set of traits.
• Cargill Dow has adopted the concept of sustainability as a
core element of its business philosophy:
Central business tool;
Source of significant brand and market value;
The right thing to do; and
Meet world needs today, without compromise to
worlds needs in the future.
• Triple bottom line essentially accounts for People-Planet-
Profit.
• Manufacturing and selling a sustainable product (such as
PLA) saves money, helps the environment, reduces burden
on society.
18
Life Cycle Assessment (LCA)
LCA Primer LCA a tool to measure the environmental component of the triple
bottom line. It is a technique for assessing the environmental
impacts associated with a product, covering all stages in a
product’s life.
• Evaluates all inputs used to make, use and dispose of the
product.
o Cargill Dow looks cradle-to-pellet to determine the
LCA of the resin.
• Can look at pellet-to-grave on specific customer projects to
round out the lifecycle analysis.
Phases of a Life Cycle Assessment*
Life cycle assessment framework
Goal and
scope
definition Applications:
- Production process
improve ment
Inventory Interpretation - Product development
analysis
- Stra tegic planning:
- Public policy making
Impact - Marketing
assessment
*ISO 14040
Benefits of LCA By conducting a LCA on PLA, Cargill Dow is able to quantify and
support its market claims, benchmark PLA against traditional
polymers, as well as guide the continued improvement of its the
manufacturing process.
This allows the company to make informed decisions based on
quantifiable environmental and economic data – all of which ties
back to the triple bottom line.
19
PLA Production Route The LCA for PLA production accounts for the following factors:
Seed corn Carbon dioxide
Fertilizers Corn growing, Irrigation water
harvesting & drying
Fuels Herbicides
Electricity Insecticides
Raw materials
from the earth Transport of corn to Diesel
Corn Wet Mill
Carbon dioxide Air emissions
Solar energy Water emissions
Natural gas
Dextrose Sulfur dioxide
Electricity production
Enzymes
Water
Solid waste
Electricity
Lactic acid Waste water
Natural gas production treatment
plant
Operating supplies
Electricity
Lactide and PLA
production Natural gas
Operating supplies
System boundary
PLA
20
LCA findings Even in its relative infancy verses traditional petroleum-based
resins, PLA shows a significantly better environmental profile in
terms of the energy used to manufacture it and greenhouse gas
emissions for the process.
Chart 1: Fossil Energy Use (FEU) *
From cradle to pellet [MJ/kg polymer]
PLA versus traditional polymers (APME)
160
142
140
120 117
120
100 92 93
87
81 79 77 77
80
54
60
40
20 7
0
Nyl on 66 Nyl on 6 PC HIPS Cel l ophane GPPS LDPE PET SSP PP PET AM PLA 1 PLA Bi o/ WP
Chart 2: Greenhouse Gases*
Cradle to pellets [kg CO2 eq./kg polymer]
PLA versus Traditional polymers (APME)
10.0
8.1
8.0
7.6
6.4
6.0 5.3
4.0 3.3 3.2
2.9 2.7
2.1 2.0 1.8
2.0
0.0
Nyl on 66 Nyl on 6 PC HIPS Cel l ophane* GPPS LDPE PET SSP PP PET AM PLA PLA B/ WP
-2.0
-1.7
* Chart Notes: PLA(1) = today’s process
PLA Bio/WP = projection based on use of biomass
feedstock, wind power for electricity
21
Key Discussion Points: LCA is not a primary consumer selling point. Rather, it is a
measurement that shows Cargill Dow holds itself accountable.
• It allows customers to be sure that the marketing statements
are accurate.
• It helps the company measure track and improve its
manufacturing process to stay true to the principles of
sustainability.
• LCA profiles show that PLA has a distinct measurable
advantage of traditional petroleum materials.
Cargill Dow is willing to work with customers (and even
customers’ customers) to develop an extensive LCA in support of
specific end products made from PLA.
22
Maize Source
Production facts To make PLA, Cargill Dow requires and purchases commercially
available sources of dextrose from the existing marketplace.
Today, this dextrose comes from maize purchased from farmers
who live in a growing area that surrounds Blair, Nebraska, USA.
The maize is processed at a wet mill in Blair to produce dextrose,
the fermentable sugar used as the raw material for PLA production.
Cargill Dow does not need or require genetically modified maize
to create its polymer. Testing has shown that there are no traces of
maize DNA in the resulting polymer.
Marketplace facts Some of maize that goes into the process may have started as
genetically modified seed - on a national basis, accounts for about
20% – 30% of maize grown in the U.S.
It is practically impossible to track the molecule from kernel to
PLA product, but money can be tracked. Some environmental
organizations take the position that money should not go to support
GM crops, even if these crops are used to make new materials that
substitute for petrochemical-based products.
Source offsets Cargill Dow has created and option called “Source Offsets” to
address these concerns in cases where the potential of GM
feedstock is a go/no go issue:
• PLA gives a significant opportunity for environmental benefits
in packaging.
• Company believes in customer choice – we want to satisfy
those demands as best possible and consistent with the
principles of sustainability.
• Cargill Dow will contract with Cargill Incorporated who will
provide origination services to procure, and have delivered to
the mill, maize that is certified to be a conventional variety.
• Cargill Dow will pay farmers a premium based on market
prices (will be included in price of Source Offsets).
o Contract requires specific farming practices such as
buffer strips, cleaning of equipment, proof of seed
purchase, etc.
o Third-party verification and testing will also be
included.
• For additional details, contact Cargill Dow.
Sustainability mindset Cargill Dow’s focus is on the greater issue of sustainability.
• Includes an evaluation of best practices in agriculture.
o For both non-GM and GM sources.
23
Key take-aways when
discussing with customers: NatureWorks PLA provides strong environment and sustainability
benefits today.
With continued successful market development, even more
benefits are available through lower costs and new feedstock.
There is no genetic material in PLA.
Source offset option is available to customers who so desire.
Cargill Dow will go speak with customers to discuss the issue and
try to find a solution.
24
Brand Awareness
Public Relations
and Publicity Active program is generating significant awareness and credibility
throughout Europe (reaching food retailer and brand owner).
• Using variety of tools including editor contact, interviews,
news releases and case studies.
• Are seeing a good rotation of editor coverage.
• Point-in-time opportunities such as launches and new
developments are ideal times to get our message – and your
customer’s message - to the right outlets.
• By working with Cargill Dow as new opportunities emerge, we
can get the message out to support your customers and sales.
Paid advertising Ads demonstrate “natural in natural” concept.
Target audience is senior executives, decision makers, in grocery
segment.
Target audience is connecting image, message and positioning
• Show strong publisher ratings in terms of attention and recall
Ads currently in three magazines in Europe; considering adding
more magazines to schedule.
Ads are currently appearing in the following European markets:
• Benelux
• France
• Germany
• Italy
• Spain
• UK
25
Trade fairs Considering using a pavilion concept (similar to how trade
commissions display) featuring partners at Cargill Dow sponsored
stand.
• Strong marketing and message exposure.
• Create a “one stop” destination.
• Shows depth and breadth of offering.
• Makes it easy for retailers to get items made from.
NatureWorks PLA.
• Cargill Dow can drive promotional activity to help bring/drive
customers to partners.
• Direct leads for customers.
Direct marketing Considering a campaign to support European activity.
A recent United States campaign featured a three-part mailing
targeting retailers and brand owners.
• Targeted top 50 retailers/brand owners (CEOs, VPs of
purchasing and marketing).
• Personal message in letter from CEO, Randy Howard.
• Is proving very successful in United States.
Cargill Dow is looking for help in establishing a direct marketing
outreach effort in Europe:
• Might require a new concept.
• Could include elements of the United States program.
• Could be tailored to meet market needs and expectations.
Direct outreach program may need to be conducted on a country-
specific and/or a market-specific basis in Europe.
26
In-store support
for retailers Point of sale collateral, signage and presentations available to help
educate the consumer.
27
Miscellaneous Discussions and Comments
Amount of maize used Today, 10 billion bushels of maize are grown in the United States
that is not for human consumption, mostly animal feed. About ten
percent (1 billion) is surplus every year. Cargill Dow use is less
than one tenth of one percent of that maize.
Call it a plastic? (In UK) it is being called a plastic – interested in going away from
this. In the UK, PLA could be changed to have its own
classification and tax classification. The word plastic is a “no.” It
needs to get to be called a “natural.”
Cargill Dow is working on issues management related to being a
non-plastic on a country-by-country basis in Europe.
• Could be value in being a non-plastic
Price discussion Following are a few of the highlights and Q&A exchanges that
illustrate how to position.
• It will cost more; it’s not 2x more.
• Depending on the package it’s 2-5 cents more.
• Retailers can be cost neutral on the part.
o May choose to pass it on.
o Retailer needs to figure this out – not being asked to
double cost of products.
• Opportunity for retailers to turn commodity into something
of value.
o Yes, it will cost more – but look what you can get
for it.
• Those who have moved forward with the concept are
seeing a significantly higher return than they expected.
o It is a ‘hot’ seller.
• Offers grocery retailers new options.
o A ‘fun’ concept.
o Allows them to sell ‘new and improved’ natural
foods.
o Gives something to talk about other than price.
o Engages customers.
o Starts a customer dialogue about how the retailer is
focused on meeting consumer needs and desires.
28
(Price discussion continued) Q: People are interested in the concept, but I don’t believe they will
really pay for it?
A: The research shows that consumers value the concept and will pay
more for it. The IPER example also shows that European consumers are
willing to pay more for it. Especially when supported by clever
marketing.
The brand concept is a tool for the supermarket to promote what they are
selling – high quality, high value food products. But if the store simply
positions it as paying more for packaging, it probably won’t work.
This example shows that the brand concept and the packaging will drive
traffic and help them stand apart from their competition.
Retailers can break even on the higher cost of packaging, because it
gives them tools to attract and influence consumers. It won’t work in
every case, but for some retailers, this might be worth the effort, test it
out and see what consumer response is. There is something different
enough.
Part of IPER’s promotion is to educate its consumers that this is a better
deal. Education is the key to supporting pricing. Consumers understand
and will pay for fresh food in fresh packaging.
In Iper’s case, they do not use compostability as a selling point. They
use the concept of bio-plastic since Italy does not have a composting
infrastructure.
Q: Consumers have little choice, if they don’t want to pay for it here,
they can go to another place.
A: This brand is about how the store decides to market their products.
We are giving them tools. They can choose whether or not to use them
to draw people into the store. They can decide whether to use the
packaging as the singular draw, or if they want to use it to make their
image better (re: environmental). It is really about whether or not they
are willing to invest in a brand that will drive higher sales and bolster
their own brand with shoppers.
It is important to note that with different retailing chains there is a
different motivation with each retailer. Marketing and purchasing have
different interests. Marketers are more interested in bringing up the
image. Purchasers want the fresh food section to get more turnover.
These are different motivations, but NatureWorks PLA can satisfy both
of their needs and desires.
In reality, consumers don’t think about the packaging unless there is a
negative consequence. However, if the packaging can be brought to their
attention in a positive light it can be a powerful and positive way to
influence their emotion about the purchase.
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Ingeo, the Ingeo logo, NatureWorks and the NatureWorks logo are trademarks of Cargill Dow LLC
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