m
 

  

  


Begum Abad
Hanuman
Nicole Erard-Coupé
Naveen
2

‡1987- Nestle¶ enters the refrigerated food
market by acquiring Contadina Pasta and
Sauces.

‡Non²commodity refrigerated foods was a

relatively undeveloped category in U.S in 1987

‡Refrigerated foods were responsible for 7% of

Nestlé's global sales despite little contribution
from the potentially large U.S. Market
 
 
  

‡ Based on market research, Nestlé's decided
to launch Contadina

‡ Contadina Fresh Past & Sauces rolled out

nationally in 2nd half of 1988

‡ roduct launch was very successfulO

75 mil. Retail sales in 1988

150 mil. Retail sales by 1990
Pasta line accounted for nearly 80% of sales volume
 
 
  

‡ Given Contadina¶s success, the NRFC
began a product development process for
a refrigerated pizza concept

‡ The pizza market was an $18.4 billion

market

‡ By 1989 NRFC developed 2 new pizza

concepts
izza Kit
reassembled, heat and eat izza
  
 
‡ Pizza market StatisticsO
88% of all pizzas sold by
restaurants
60% of pizzas eaten at home estl 's esearchof at omeizza
76% of all U.S. families had onsumption
eaten restaurant pizza w.in 
  
past 6 months
izza consumption strongest  
   
in northern and eastern parts    
of U.S.    !
10,000(+) franchised pizza  

restaurants   
25,000 pizza outlets
frozen pizza market more
fragmented w/o clear market
leader
   
  
‡ Kit included:
12´ crust
Sauce
Cheese

‡ Sauce: Tomato or esto

‡ Additional Toppings: epperoni, Sausage,

3-Cheese, Mushrooms & Bell eppers (Sold
Separately)

‡ Serve 2-3 people

  

 

‡ reliminary Concept test (200 Interviews)
Positive purchase intent was 58% (49% among
males, 66% among females)

Results:
‡ 128 Heavy Take-out users(once every 2-3 weeks(+))
‡ 115 favorable to concept (out of which, 60 said they
would buy Contadina instead of another product)
 

2

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‡ Involved both Concept & in-home product
use test:
izza Kit w/ Toppings Sold Separately

izza Kit only (No Toppings Sold Separately)

‡ Determine the impact on trial kit by

availability of separate toppings

‡ Analyze Strengths and Weaknesses of

both concepts
  
roduct
Support either izza Kit with or without
toppings
ricing (NRFC expected factory pricing to be 2/3 of retail prices)
$6.39 for Kit
$1.29 for each additional Topping
lace
National distribution possible, could install a
pizza line @ the Danville factory
romotion (Total
18 mil.)
‡ $9 mil. Advertising
‡ $5 mil. Consumer romotions
‡ $4 mil. Trade romotions
 
 
‡ 95.5 Mil. Households
Contadina asta Users would Represent approx. 24%
MRD felt arent Brand enetration could range btw. 5%-
25% (recommended volume projections be sensitive to
this range)

‡ Based on romotion lan, NRFC projected 37%

overall awareness
arent Brand Users likely to be more aware of
Contadina name
 m 
 
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izza Kit & izza Only
Toppings
Awareness
Users 60% 60%
Non-Users 30% 30%
Overall 37% 37%
ACV 58% 58%
urchase Assumptions
Units @ Trial 1.2 Kits 1.1 Kits
Repeat rate 22% 22%
Repeat urchase 1 Kits 1 Kits
Units
Repeat urchase 2 2
Occasions
  
‡ Favorable to izza Toppings
50% would purchase toppings every time purchased kit
25% would purchase toppings ½ the time

‡ Business Requirements for izza

45 mil factory dollar sales

12 mil project Investment costs
.3% share retail pizza market
‡ Should NRFC launch a pizza product
"hich option
#ow large market would they find
"hat market share could be achieved
 %


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‡ 5% enetration
izza & Toppings izza Only

Total Trial Units 6,445,734 4,439,896

Total Retail Market $65,991,428 $39,719,312
Total Factory Market $43,994,285 $26,479,541

‡ 15% enetration
izza & Toppings izza Only

Total Trial Units 7,492,605 5,204,552

Total Retail Market $76,709,293 $46,554,500
Total Factory Market $51,139,529 $31,036,333

‡ Should launch izza Kit with Toppings

‡ Require @ least 7% Market enetration to meet

Basic Business Requirement of $45 million
factory dollar sales (
45,423,334)

‡ Market Size

izza Topping
5% 8,809,170 7,52,023
15% 10,239,894 8,741,373
24% 11,527,545 9,840,587

‡ Market Share
   

‡ Nestle should first work a lot to refine the taste of
it¶s pizza.
‡ It should also lower the prices of its offerings.
‡ Company should fine tune its manufacturing
facilities before the product launch.
‡ ost launch, company should use the same
distribution network as it did for asta.
‡ The product should also be supported heavily
with huge advertising outlays.
   D
‡ 1991-Nestle launches Contadina izza.
‡ ositioned as a quick, convenient, yet
fresh alternative to frozen pizza.
‡ izza introduced in a kit format
composing of a 12 inch refrigerated pizza
shell, packed together with separate
pouches of cheese and sauce.
  D
‡ Toppings also were merchandized
adjacent to the kit.
‡ Toppings included pepperoni, three
cheese blend and Italian Sausage.
‡ izza kit was sold for $6.19
‡ Toppings were priced at 1.49
  D
‡ roduct launched in selected cities.
‡ Marketing support amounted to $11
million in 1991 and $10.5 in 1992.
‡ Company faced disappointing results
by not meeting any targets
‡ Sold 4 million units in Year 1 that
amounted to $13 millions in sales.
  D
‡ Tried to improve the advertising
themes by testing three more ads.
‡ All these ads also failed in terms of
recall.
‡ Company maneuvered with price
promotions but failed in this aspect.
‡ Company had 60% spoilage on the
toppings
  D
‡ Abandoned the toppings
‡ Sold pepperoni and cheese kit and a
cheese kit at $5.99 and $5.49 respectively.
‡ Company paid the price for relying on the
pasta data that was in the initial stage.
‡ ³izza wars´ also hampered the profits
   D
 
%  
 
     E E  

1993
‡ Kit sold for $5
‡ Held 15% of the $170 mil-a-year market for
refrigerated pizzas & pizza kits
‡ Kraft introduced Boboli Shells
‡ 1997 ± Nestlé sold Contadina to Del Monte
Excluded from sale was line of
refrigerated pasta & sauces
‡ Nestlé s changed name of refrigerated
pasta and sauces to Buitoni
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