Demand:
Cookie industry faced with challenges in the past five
years, but has a little increasing recently.
During recession, Americans had less income, and then they decrease the
spending on unnecessary products, just like cookies, a kind of snack for
entertainment time. With the economy
recovering, people have less time to cook or sit down and eat. Then they back
to consider snack.
As the revenue changed through year shows beside, we can see
that cookie industry went through a big increase in 2006, decrease %change in
2008, and will keep 2%-3% increase after 2012. Since the market size will not
change dramatically, but the structure of the industry changed recently and
will keep changing in the future. With more health-conscious, people tend to choose
low sugar, low fat and more “green” cookies when they choose products.
Market:
As picture shows below, we can see that the whole industry
of cookies, crackers, and pasta account to 22.5 billion dollars in 2012, and
the cookie industry take 27% of industry. So the total revenue of cookie in
2012 should be 6 billion dollars. And the grocery wholesalers account for 60%
of the market in 2012. That’s one of the reasons why we chose grocery companies
like wholefood and Trader Joe’s as our target customers.
The whole market is low concentrated. Top four companies
take 32% revenue in 2012. And most of the companies in this market are small to
middle companies. 46.1% of firms have less than 10 workers, and 84.2% of firms
have less than 100 workers.
Realistic opportunities & competition:
The competition in this industry is high. The big two competitor in this industry is Kellogg Company, which takes 13.5% market share, and Kraft Food Co, which takes 13% market share. Recently, Kellogg started to buy other companies. In 2008, Kellogg acquired certain assets of IndyBake's business. IndyBake produced cookie, cracker and frozen dough products. By doing this, Kellogg step into frozen dough products, and would become to our direct competitor. There are also some other brand like “Lava Cookies” and “Chocolate Chip Cookie Dough”, which may not use the plastic tray, but have the same reheat need, fresh taste, and home-made taste cookies. All this companies should be our direct competitors. And other snack cookies and self-mix dough cookies companies are our indirect competitors.
Although we have all those competitors, we have confidence that our product would be competitive. Since customers have less time to cook, they definitely have less time to mix dough. For people who still want self-mix taste and high quality product, they can simply put our dough into oven and make exactly what the same with the cookies mixed by themselves. Also, people care more about the quality of ingredient. Our chocolate chips are Nestlé’s and we will monitor all the ingredients recourses. Although we don’t produce law fat product right now, we believe that our high quality product is also attractive.
Targeted selection of "winnable" market opportunities:
We chose Worcester and big Boston area as our first market, because we familiar with this market and have more network resource here. The target market we choose is the middle high level since those people may have high requirement about cookies but have no time to mix dough and clean kitchen after mix dough. We choose wholefood and Trader Joe’s because these grocery stores sell the health product and have the high end and “green” image in customers’ minds. We are the only company who produce plastic tray which saves customers’ time of cleaning kitchen, and we use the recycle material for trays which is environment friendly. So we think we have the opportunities to gain optimistic market share.
Resource:
http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=265
