Académique Documents
Professionnel Documents
Culture Documents
Annies Homegrown
Annies Macaroni and Cheese
Sarah Mason
May 30, 2013
Final Project: Plans Book
Mason 2
Product Situation Analysis
The Company
History: Annies Homegrown was founded in 1989 in New England by the once married
couple, Annie Withey and Andrew Martin. Withey and her ex-husband began Smartfoods, bestknown for its popcorn, in 1982, after developing its famous cheese blend. Four years later, they
sold Smartfoods to Pepsico/Frito Lay for $15 million and began to develop Annies Homegrown
Inc. In 1995, Annies Homegrown had a direct public offering to issue stock to investors. Three
years later, the company bought Taste of Indias Tamarind Tree food line and introduced its pasta
products. In 1999, Homegrown Holdings Corporation obtained stake in the company. In 2002,
Annies Homegrown gained national attention after launching a global advertising campaign,
sponsoring social causes including the Cases for Causes program and developing a number of
scholarships for deserving students. During this time, Solera Capital bought a major share of the
company. Also by 2002, Annies Homegrown had established Growing Naturally, a program to
inspire school-aged children to learn about organic foods. Annies Homegrown now sells its line
of snacks, cereals, pasta, dressings, sauces and most importantly macaroni and cheese line in the
United States and Canada. In January 2012, Annies announced its new organic rising crust
frozen pizza line, sold exclusively to Whole Foods Market. A year later, Annies had to recall the
Homegrown Frozen Pizza due to a faulty screen for metal fragments in the dough. In February of
this year, Annies released its pizza line again nationwide (Annies Homegrown, Inc. History).
Solera Capital, which is a major share holder of Annies Homegrown, was founded in 1999 by
CEO Molly Ashby. Ashby is the former chief operating officer and vice chairman of J.P. Morgan
Private Equity (Dezember, 2012).
Mason 4
becoming a popular alternative to Kraft products (Annies Homegrown, Inc. History). Solera is
comprised of 25 employees, two-thirds being female. Many investment firms are dominated by
males (December, 2012).
The Product
Product Description and Positioning: Annies Homegrown products are healthier, natural
and organic alternatives to its competing brands of product. According to nutritionists, Annies
Macaroni and Cheese is less processed than Kraft products. Although the two products contain
similar amounts of sodium, calories, protein and fat, Annies products have fewer chemical
additives and compared to Kraft has lower amounts of salt, sugar and fat. Its products also appeal
to audiences with eating limitations such as gluten intolerance. Many of Annies products, in
addition to being organic, do not contain gluten. Also, Annies believes Genetically Modified
Organisms should be labeled on the package, which is not common among leading macaroni and
cheese products, which contain GMOs (Annies, 2013). At Safeway, a 5.5-ounce box of Kraft
Macaroni and Cheese is $1.25 and a 6-ounce box of Annies pasta is $3.34. The justification for a
higher price for Annies macaroni and cheese is due to better quality ingredients.
Product Sales: According to Annies Fiscal 2012 Annual Report, the annual sales volume was
$60.6 million for macaroni and cheese meals, $56.8 million for snacks and $23.9 million for
dressings, condiments and miscellaneous products. It was estimated that over 80 percent of
Annies net sales were from its organic products which includes its macaroni and cheese
products. According to Annies Homegrown Stock Report, the most current reported sale price of
Annies common stock, which is traded as BNNY on the New York Stock Exchange, is $41.31.
About 80% of Annies stock is owned by Solera Capital which seeks to build the next generation
of business leaders (Hoovers Inc., 2013).
Mason 6
Best Mac & Cheese in 2005 by Mens Health Magazine. Also, the products are child friendly
because of the cartoon bunny icon and fun shaped foods. Also, several of Annies pasta products
are gluten-free which appeal to gluten intolerant consumers (Bloom).
Weaknesses: Annies Homegrown specializes in pasta and cracker products; however,
Annies Homegrown produces other less popular products as well including fruit snacks, pizza,
salad dressing and granola bars. Another weakness is organic foods tend to be more expensive
because it is more expensive to grown organic foods. The taste of artificial flavorings, which are
present in most processed food products, taste better to consumers because they have richer
flavor (Bloom).
Opportunities: Annies Homegrown macaroni and cheese is the second largest macaroni and
cheese brand next to Kraft. Market analysts have said that Annies is on the rise and will continue
to give Kraft a run for its money. The organic food market is growing in popularity as people are
becoming more aware of chemicals involved in processed foods and GMOs. People are
becoming more organic and health conscious and are willing to pay more for more nutritionally
beneficial products. Also, the variety of nature foods that Annies offers is appealing to
consumers. Another opportunity Annies has is its relationship with PBSs cartoon character
Arthur. Annies can expand and use the childhood icon to its advantage to target certain age
groups (Bloom).
Threats: One possible threat involving Annies Homegrown products is the possibility that
organic foods are a fad and will eventually die out. Although it does not seem like consumers
will revert back to unhealthy habits, there is the possibility that organic foods will become less
popular with time. As organic products become more popular, there is a possibility that more
produces will join the market, giving consumers more options. Kraft has brand loyalty and is
Mason 8
Target Market Analysis
Primary and Selective Demand: Macaroni and cheese is considered to be one of
Americas favorite comfort foods. There appears to be a consistent demand for macaroni and
cheese products in the United States. In an article published in 2010 in the Los Angeles
Times, macaroni and cheese sales have increased 25 percent over the last four years during the
recession and recovery. As a whole, macaroni and cheese sales are $802 million. Kraft Macaroni
and Cheese is the #1 brand, while Annies Macaroni and Cheese comes in second (York, 2010).
According to a March 2012 financial statement from Hoovers Company Records, Annies
Homegrown products have earned $141.3 million in revenue as of 2011. Its one-year sales
growth was 20.1% from 2010 to 2011. According to May (2012), the market value of Annies
Homegrown more than quadrupled from 2011 to 2012 to a current $598 million. He said Annies
Homegrowns value is rapidly growing and exceeds the industry average because the company is
in a high-growth, niche category. The selective demand for Annies Macaroni and Cheese is
expected to increase in the next few years. Organic industry analysts predict the organic food
industry and products like Annies Macaroni and Cheese to grow at a rate of 20 to 25 percent,
while the regular food industry and products like Kraft Macaroni and Cheese are only expected
to expand 8 to 10 percent in coming years. (Kennedy, 2012).
Target Market Defined: My target market for Annies Macaroni and Cheese is comprised of
health-conscious individuals who are interested in purchasing organic alternatives to pasta
products. I am especially interested in targeting consumers who are 18-25 years old females. The
product is directed toward a class of consumers with higher economic standing because Annies
Macaroni and Cheese products are priced higher than its competitors products, but still cheap for
a meal. Annies Macaroni and Cheese will target women who spend at least $50 on groceries per
Mason 10
Based on the demographics, behaviors and psychographics of my target market, these
consumers fall under the innovator, experiencer and survivor categories of the VALS
classification system (Strategic Business Insights, 2012). The target market for my product
primarily falls under the innovator segment of the VALS classification system. Innovators are
forward thinkers and consumers who are on the leading edge of change. They have the highest
incomes and abundant resources, so they are able to indulge in higher priced products. This is
important because Annies Macaroni and Cheese is a fairly new product requiring consumers to
try alternatives to more familiar brands. Also, my product is generally priced higher than its
competitors requiring consumers to pay more for it. Annies Homegrown is an environmentally
friendly company that emphasizes organic and natural products. This is important because
innovators tend to be trendy and look for the next newest thing. Consumers in my target market
also fall under the experiencer segment. Experiencers are high in resources, generally 25 years in
age and have a lot of energy which they pour into physical and social activities. Annies
Macaroni and Cheese consumers are likely health conscious and involved in exercising and
community engagement or service projects. Also, experiencers emphasize new products and
services, which is important to Annies because it is still a developing brand. Finally, my target
market fits under the survivor category, but only slightly. Survivors exert minimal effort to get
by. Macaroni and cheese products are fairly easy to make and relatively cheap to buy. A possible
geographic delimiter may be states and regions of the United States that do not have widespread
whole food and organic supermarkets that carry Annies Homegrown products. Generally,
macaroni and cheese is not limited to certain geographical locations, so geographic delimiters are
not as prevalent; however, advertising for Annies Homegrown will not be focused on these
Mason 12
attitudes, interests and values allow market analysts to better predict consumer behavior and
control what ideals a company or product communicates to its buyers. In addition,
psychographics allow companies to better understand what consumers value. This is important
for companies to understand in order to most efficiently communicate to its consumers.
Advertising Objectives
Primary Objective: Compare product to competitor to promote awareness.
This is important because Kraft Macaroni and Cheese is the leading brand for macaroni and
cheese products in the United States. Many macaroni and cheese consumers are loyal to this
Mason 14
ones, I would send out Annies Homegrown newsletters via email and mail to keep consumers
updated on community engagement projects, efforts with school gardens, scholarship details,
environmental reports and other notable Annies Homegrown involvements. This would make
consumers feel important because the newsletter would be sent to exclusive consumers.
Consumers are more likely to purchase products when they feel educated and informed about the
company.
Creative Brief
is
currently the number one brand of choice for macaroni and cheese products. The campaign will
create awareness about Annies Macaroni and Cheese because often times, Annies Macaroni and
Cheese is in the organic aisle rather than positioned next to competing brands, such as Kraft and
Velveeta.
Communication objectives
Primary Objective: Introduce Annies Macaroni and Cheese to consumers to convert
macaroni and cheese eaters from Kraft to Annies Homegrown. This is important because
Annies Homegrown is a fairly young company, and many macaroni and cheese eaters in my
target audience did not grow up eating Annies Macaroni and Cheese and may not be as familiar
with Annies Homegrown.
Secondary Objective: Compare product to competitor to promote awareness of Annies
superior qualities. This is important because Kraft Macaroni and Cheese is the leading brand for
macaroni and cheese products in the United States. Many macaroni and cheese consumers are
loyal to this brand because they grew up eating it, have been exposed to many advertisements for
this product and are not as aware of competing brands. Through comparing Kraft to Annies
Homegrown, we will acquaint people with the products qualities. Annies Homegrown has a lot
more to offer than Kraft does. Promoting awareness about Annies Macaroni and Cheese is
Mason 16
important because Annies Homegrown is a young company, not as well-known as Kraft, does
not have strong brand loyalty among the target market and has more to offer to consumers than
just a tasty and healthy meal. This will shift Annies Macaroni and Cheese to the top of the
consumers mind when they purchase macaroni and cheese products.
Tertiary Objective: Enhance brand image. This is important because Annies Homegrown is
a brand whose mission is to cultivate a healthier and happier world by spreading
goodness through nourishing foods, honest words and conduct that is considerate and forever
kind to the planet. Its involvement with the community, scholarship programs and sustainability
efforts are important to fully comprehend just what Annies products are all about. It seeks to
produce tasty and healthy foods while bettering the world. This will inspire consumers to take a
small, healthy step for their personal benefit and for the good of the Earth.
Mason 18
in 2011-2012), grants and donation of practical resources to create and sustain gardens in
schools, partnerships with Farm2School, FoodCorps and other like-minded organizations and
providing 25 $1,000 scholarships to university students (Annies, 2013).
In conclusion, the shared attitudes and needs are willingness to try new things, using
products that value image, seeking comfort foods and using products that are conscious of
carbon footprints.
Brand personality
The campaign should communicate that Annies Homegrown Macaroni and Cheese will
fulfill comfort food cravings in a healthier way than Kraft, and will simultaneously benefit the
Earth. Annies Homegrown embodies earth-friendly, cheery, healthy characteristics and
progressive characteristics. The brand is committed to environmental stewardship. Annies
Homegrown uses rich soil, fresh water and clean air during its production process. It also seeks
to reduce the amount of waste that comes from its products. More than 90 percent of Annies
Homegrown packaging is recyclable. Annies Homegrown produces a healthier alternative to one
of Americas favorite comfort foods: macaroni and cheese. Annies Macaroni and Cheese
contains fewer calories, less sodium, more fiber and less sugar than Kraft Macaroni and Cheese.
Consumers often indulge in comfort foods because they trigger emotional responses that are
comforting and remind consumers of their childhood, giving consumers a sense of security and
happiness. Annies Homegrown is healthy and uses natural ingredients in its products. Unlike its
competitors, Annies does not use artificial dyes or preservatives like Kraft does. Annies
Macaroni and Cheese is natural and real. It would be helpful for the ads to be welcoming, upbeat and informational. A key aspect of Annies Homegrown is that it offers more than just food
products. It is important to spread awareness about their sustainability efforts to consumers.
Benefits
Annies Macaroni and Cheese offers personal and environmental benefits. Annies
Macaroni and Cheese is organic and made with natural ingredients, which is beneficial to
consumers. Although consumers are indulging in a cheesy-pasta meal, they can be sure they are
not consuming chemicals and preservatives found in competing macaroni and cheese brands.
This caters to consumers who are conscious of their diets and do not want to eat unhealthy
products. Because Annies Macaroni and Cheese is made with natural ingredients, consumers
may feel less guilty. Also, Annies Macaroni and Cheese is beneficial to the environment.
Annies Homegrown is committed to tracking, measuring and reducing its carbon impact. In
doing so, they are conscious of the production process and especially packaging. Consumers
benefit from this because they will feel eco-friendly by purchasing Annies Macaroni and Cheese
that supports sustainability, versus Kraft Macaroni and Cheese that does not emphasize ecofriendly conduct.
Additional Suggestions
It would be helpful to include taste-tests in the campaign. Understanding that Annies
Macaroni and Cheese tastes similar to its competitors will be key to converting macaroni and
cheese consumers who are nonusers of Annies.
Mason 20
Creative Concept
Gitlin, B. (2010, November 8). Health-conscious consumers fueling organic food growth. GMO
Journal: Food Safety Politics. Retrieved from http://tinyurl.com/pscbpj8
Hoovers Inc. (2013, February 13). Annies, Inc. Retrieved on March 7, 2013 from LexisNexis
Academic database
Kennedy, K. J. (2012, June 7). Annies, Inc. Annual Report on Form 10-K 2012 Fiscal
Report.
Academic database.
May, R. (2012, March 29). Annies Homegrown shares soar nearly 90% on first trading day.
Food Beat. Retrieved from http://tinyurl.com/czefkow
Strategic Business Insights. (2012). US Framework and VALS Types. Retrieved from
http://tinyurl.com/y9hzhl7
Mason 22
Tepper, R. (2013, March 8). Artificial food dyes in Krafts Macaroni and Cheese under fire as
petition calls for their removal. The Huffington Post. Retrieved from
http://tinyurl.com
az72srb
York, E. B. (2010, Aug. 20). Macaroni and cheese makers looking beyond childrens plates. Los
Angeles Times. Retrieved from http://tinyurl.com/d85rsly