The company objectives that
Mr. Raymond presented included:
– National distribution of
the new Montreaux product line
– $115 million in annual
– A place in the top 25 in
The latter two objectives
become achievable when the reports presented are taken into account.
Reaching $115 million in
annual sales, and securing a place in the top 25 of the market appears to be
achievable based on statistics alone. Firstly, the U.S. Confectionary market
reported a growth of 2.8% between 2007 and 2011 in the US, and particularly
when it comes to chocolate products, the total revenue was $17.664 billion.
We know already from the
case study that Apollo achieved $54.4 billion in revenue in 2011, with a net
income of $3.5 billion. This places it second in the market with 15.4% of the
market share. With more than 80 brands that generate over $100 million
annually, some exceeded the $1 billion mark annually.
This promising data comes
from several trends that are presented in this case: Chocolate holds one of the
most lucrative segments in the confectionary market in the US, with 52.6% of
the market’s total value. With the U.S. confectionary market’s forecasted
increase, there is a noticeable shift of premium chocolate products moving to
more mainstream channels. As mentioned in the case study, the sales of dark
chocolate are rising due to the increased awareness of flavanols-antioxidants,
and with the trends of health and well-being on the rise (Quelch & Badame 2014) this is an indicator that supports the market growth predicted.
Distribution and Packaging
Regarding the national distribution
of the product line, this is certainly feasible with an appropriate rollout.
Montreaux will have to consider the points mentioned in Question 1, e.g. positioning,
defining its packaging, its promotion.
When it comes to chocolate,
consumer trends tend to fall into three categories: health and well-being,
taste experience/indulgence, and convenience. (Mesich 2005) Dark chocolate is viewed
as an affordable indulgence, therefore the increasingly price-sensitive
consumer market is still going to lead to an increase in premium lines.
While the vast majority of
chocolate sales will go to milk chocolate, due to its high profit margins and
sweet taste, dark chocolate positions itself in the premium category of
confectionary. (Watts 2012) This will be an asset to
Montreaux with their new product, with premium chocolate maintaining a 5% share
of total launches in 2012. (Progressive Grocer)
Another significant aspect
of the chocolate confectionary industry is the growing popularity of flavour
combinations. With new combinations being formed from all spectrums of taste,
they can be “ethnic… exotic… or they can be surprising.” (Mesich 2005) This is an opportunity
that Montreaux appear to be embracing with their use of fruit combinations,
particularly seeking out flavours that are not already on the market. This has
the advantage of having a unique taste to draw in new customers – and most
importantly: keep them coming back.
As mentioned in the case
study, this rollout will have to be carried out quickly, with competitors
offering substitutes closing in on the market.