Advanced Entrepreneurship – Lean LaunchPad2011
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 t i a n i
Ka m i l A g i
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
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 me r ica ns L ov e to Ea t M e a t a nd S na ck
Retail Sales
Source: US Package Facts
Sweet
$35B
Salty
$30B
Meat
$4B
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
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Click to edit Master title styleCHANNEL STRATEGY
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Click to edit Master title styleAND NOT
THE ART OF MARKET RE-SEGMENTATION
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Click to edit Master title styleWhat’s Next?
DEN Kiosk OAK Kiosk
Ferry Building Retail Concept
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
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Click to edit Master title styleWhat we did, cont.
Who is our KRAVE Customer?
1. Jon and team tasted and surveyed 50 people.
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Click to edit Master title styleThe Results
Who is our Customer
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Click to edit Master title styleThe Results
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Click to edit Master title styleValidation of Value Proposition
Does the customer agree with our Value Proposition?
Krave surveyed 100 jerky buyers who have tasted Krave Jerky
to test our value proposition hypothesis.
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Click to edit Master title styleWhat about our Value Proposition?
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Click to edit Master title styleKey Learning's & Takeaways
1. Most people surveyed are not regular jerky eaters – yet after tastingKrave will consider becoming regular users. Therefore figuring outhow to get the product into the mouths of new customers is KEY.
2. Some/most people believe jerky is healthy - doesn't seem to be a hot button.
3. Nutritional ingredients a key differentiator.
3. Taste and texture seem to be a driver of quality perception and consumption.
4. Flavor is the main driver.
5. Focus channel roll-out to support these customer drivers.
WHY A DISRUPTION
The O p p ortun i ty +M a rket C ond i t ions
Limited Market Segmentation
Lethargic Competitors
Favorable Consumer + Trade Dynamics
Entrepreneurial Entrant with New
Approach and Fewer Constraints
Clear / Meaningful Differentiation vs.
Mainstream Competitors
The E xa mp le s
Industry
Airlines Virgin America
Ice Cream Ben & Jerry’s
Beer Samuel Adams
Potato Chips Kettle / Terra Chips
Coffee Starbucks
Chocolate Scharffenberger
Water Vitamin Water
Cereal Kashi / Bear Naked
Energy Bar Cliff Bar
Meat Snacks / Jerky KRAVE
Convention Buster Brand
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• Traditional – Conventional: Large Meat Packers– Top 4 Brands = 85% Market Share
– Manufacturing vs. Marketing Orientation• Jerky As A Waste Reducer – Mfg “Capacity Utilizer”• Same Flavors, Form Factors, Pricing, Quality, Limited Innovation
KRAVE Advantages KRAVE Challenges+ Flavors/Natural Ingredients/Low Sodium - Scale/Resources+ Meat Cuts/Quality - Distribution Power+ Traceability - Longevity/Heritage+ Singular Focus/Small Guy Flexibility - Fighting Category “Gut Stuffer”
Image
COMPETITION
WHAT WE LEARNED
KRAVE vs . Compet i t ion
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-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
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
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!