Strategic Analysis

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Date Submitted: 09/14/2012 11:55 AM

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Case Study

Nielsen Insights in Action: Finding The Right Product Mix

Hormel Food relies on Nielsen Assortman Optimizer to maximize sales

Company Hormel Foods

The Hormel Foods Corporation can trace its roots to a small meatpacking plant founded in 1891 by entrepreneur George A. Hormel. Since its inception, the business has gone on to become a leader in the packaged food industry, with its hearty meal options becoming a staple in many households. The cornerstone of Hormel Foods’ success has been its ability to deliver convenient and satisfying meals to consumers. Its introduction of hit products such as Dinty Moore Beef Stew and Spam in the 1930s – as well as the acquisition of Jennie-O Foods in 1986 – were key contributors to the impressive growth Hormel Foods has experienced throughout its history.

Company Facts

Hormel Foods

• Headquartered in Austin, Minnesota • Brands include Hormel, Spam, Jennie-O, Dinty Moore and Chi-Chi’s Salsa • Employs more than 19,000 workers

The Business Issue

One of Hormel Foods’ biggest-selling products is the Hormel • Net sales of $6.5 billion Compleats line of microwavable entrees, which offer consumers the convenience of an individually packaged, easy-to-prepare in 2009 meal. While Hormel Foods’ innovation has helped to drive the company’s success, retailers’ limited shelf space – especially within the microwavable meals category – has in recent years constrained the number of SKUs it was able to offer. Hormel Foods was faced with the question of how to continue to grow the Compleats business without expanding the total number of meal options on the shelf. Additionally, a few of Hormel Foods’ main competitors had recently entered the microwavable meals category, introducing new products to compete with the Compleats line. The result was increased pressure to optimize the brand’s product assortment. “We wanted to make sure Hormel Foods was in a position to competitively respond to activity in the market,” said...