TruEarth Healthy Foods

MARKETING II

Submitted By : Sec-F Group 4

Ashish David B
Ashwani Kansal
Pankaj Dhingra
Sarva Harish
Sumit Pramanik
Vritika Rawal

TruEarth Healthy Foods (case analysis)

Problem Statement:
1) Whether to Launch the Pizza Product in a very competitive industry with established players.

2) How to deal with limited resources available to it with companies like Nestle and Kraft which
are established players in the Pizza Segment.
SWOT Analysis:
Strength:
1) Best Quality Products used in the production, unlike mass produced, highly processed food of
its competitors.
2) Managements backing for research into new products.
3) TruEarths whole grain pasta line was considered one of the best in its category giving it good
sales.
4) Simple instructions for the Cooks/Homemakers to add their own touch to the products i.e.
customization.
5) Incremental investment for New product would be substantially less because of prior large
capital Expenditure.
6) High awareness of Pizza product among people who have already tried Cucina Fresca Pasta
Weakness:
1) Relatively resource to compete with established players like Nestle, Kraft.
2) Toppings and Sauces are sold separately for $4.5 and $3.50 respectively, thereby forgoing the
opportunity by selling them as a pack.
Opportunities:
1) Increased demand of Healthy foods to be bought off the shelf by dual income households.
2) Increased awareness of the Whole Grains as well as the demand of Fresh foods in the diet
would enable faster acceptance of Fresh Whole grain Pizza
3) No strong competitor offering Whole grain option in the Fresh pasta segment. The Cucina
fresca product of the company TruEarth Healthy foods was very successful.
4) 77% of US consumers ate pizza at least once a month opening up lots of opportunities for the
Pizza Product.
5) Whole grain pizza would be a good option for consumers in key demographics who avoided
normal pizza due to health concerns and desire to cut carbohydrates.
6) It will have a potential first-mover advantage in the Wholesale Pizza Market.
Threats:
1) Strong competitor in Rigazzi, which imitates the products, that TruEarth Healthy food launches
causing loss of sales and profitability to it.
2) Limited shelf space available for refrigerated products leading to increased competition.
3) Big established players like Kraft and Nestle Frozen Food Markets.

4) Already crowded Pizza Market might harm the chance of the new Pizza Product to be launched.

PEST Analysis
Political

Social
One of the first companies to focus on whole
grain products first movers advantage
Growing awareness of importance of whole
grains in the diet
Spurring diet fads to avoid bad carbohydrates
Though whole grain breads are considered less
tasty, TruEarths are one of best tasting options
Huge demand-77% of consumers ate pizza once
a month

Economic
Fresh pasta annual sales had grown to $ 4.1 B by
2004
New and fast growing segment with 2006 sales of
$18 M and 2007 sales of $35 M in retail sales
Refrigerated pizza market sales $5.8 B larger
market than refrigerated pasta.
Technical
Manufacturing using batch process without
affecting overall production while experimenting
Packaging innovations aided manufacturers in
broad distribution of fresh pasta to supermarkets
Fresh pasta took very less time to cook and filled
pasta were perceived to be better in quality
TurEarths offering of both 60% and 100% whole
grain pastas were tasty compared to competitors

5 C Analysis:
Competitors:

Kraft and Nestle are already huge players in the pizza market offering low cost frozen pizza
Major chains like Papa Johns and Pizza Hut had introduced pizzas with whole wheat or multigrain crusts
Rigazzi is a competitor of a similar scale as TruEarth and it has already tested a pizza concept
Local pizzerias offered pizzas with whole grain crusts particularly in major metropolitan areas

Context:

There was a growing trend in the demand for a food category known as Home Meal
Replacement. However, some consumers sought semi- prepared options than required some
preparation at home before consumption
An increase in the dual income households had led to higher disposable incomes coupled with
time poverty
There was also a growth in the demand for refrigerated fresh pasta
There was a growing awareness of the importance of whole grains in the diet
Pizzas were a core component of the Italian- American food category
Over two thirds of pizza sales volume came from delivery, takeout, and restaurants

Customer:

Dual income households with growing disposable income looking for ready to eat or semi
prepared food
Health conscious people who are looking for whole grain tasty food
Consumers looking for food which can be customized
Consumers who have grown tired of fast food and are looking for fresh food

Company:

TruEarth was founded in 1993 in St. Louis, Missouri, By Gareth DeRosa, a young entrepreneur.
It produced a line of authentic high quality pastas with blended ingredients.
First company to focus on whole grain products offering both 60% and 100% whole grain
pastas in its line.
The company fostered a freewheeling entrepreneurial spirit and believed in regularly trying new
products.
It developed a systematic four step process for research and development consisting of : Idea
Generation, Concept Screening, Product Development and Testing, and Quantification of
Volume (working with the market research firm Nielson BASES)
Identifying the shift into categories like HMR, refrigerated pasta for easy meals and awareness
about bad carbohydrates led the company to launch whole grain fresh pasta that satisfies the fast
and easy meal of the consumers along with providing a healthy and fresh alternative. The
product was a huge success
As a natural extension to the line the company was conducting research into whole grain pizza
and deliberating whether to launch this product.

Collaborators:

TruEarth worked with Nielson BASES, a marketing research firm to estimate the potential sales
of its new products via BASES 1(awareness and interest taste) and BASES 2(taste test) tests.
This was the same firm, which was engaged to find the potential of its successful launch of
whole grain fresh pasta Cucina Fresca.
Its distribution networks were mainstream supermarket chains and retail outlets. The retail
outlets were given a margin percentage of about 35% for Cucina Fresca and would be the same
for the whole grain pizza.

Pizza With No Topping

Target of TruHealth Foods to meet Company's requirement
Sales Volume Needed in case of only Pizza with no topping to
meet Company's requirement (12/8)
Target Household & Awareness
Definitely Would Buy (0.8 * 0.27)
Probably Would Buy (0.49*0.3)
Others
Consumers Who will Buy
Whole grain
Freshly Made & dated
Taking max of the Two, Since people are looking for Whole
grain & Freshly Made Food

12
1.5
58.8
6.3504
6.321
2.352
15.0234
19%
31%

People Who Would Buy Pizza (Without topping)'

Hence Company would be able To achieve its Target

Pizza With Topping

Target of TruHealth Foods to meet Company's requirement
Sales Volume needed in case of Pizza with atleast 1 topping
(Average Spend=$12.38) [12/12.38]
Target Household & Awareness
Definitely Would Buy(0.8 * 0.27)
Probably Would Buy (0.49*0.3)
Others
Consumers Who will Buy
Whole grain
Freshly Made & dated
People Who Will Buy Toppings
People Who Would Buy Pizza (Without topping)'

4.657254

12
0.969305331
58.8
6.3504
6.321
2.352
15.0234
19%
31%
23%
3.455382

Hence Company would be able To achieve its Target

Proposition:
New trend focuses towards :
1) Quick Home meal replacements
2) Fresh Food
3) Whole Grain
TruEarth should move forward with the new whole grain fresh pizza because of the following reasons:
1) They had already launched a whole grain Pasta product that has been highly successful. This proves
that there is a potential market for tasty whole grain Italian American fresh food. They also have the
required expertise and experience.
2) The increasing number of double income health conscious families will definitely provide a market
for this kind of a product.
3) With Rigazzi eating into their whole grain pasta market, TruEarth must go for a product extension
without delay to have the first mover's advantage in this market.
4) TruEarth's offering is different from the offerings of its competitors in the pizza market because it
empowers the consumers to prepare their own customized pizza.
5) Also from the Quantitative analysis we can infer that they can meet their target