New Product Development

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• New Product Development
• June 2006

Oatibix
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New oat cereal in the cold oat sector!

• Oat based breakfast cereal
• 97 Oats, processed and moulded into a lozenge
  shaped biscuit (Weetabix made of oats)
• To be eaten with COLD milk

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Why launch an oat biscuit?

• Objective
• Carve out a new market and grow the cereal
  category. Grow Weetabix company sales without
  harming the Weetabix brand.
• The Opportunity
• To grow the total cereal category
• Tap into the consumer desire for Healthy products
• Maximise the Oats opportunity, making them more
  accessible
• How?
• Use a credible, trusted backer Weetabix, No. 1
  cereal
• Fulfil a genuine consumer need
• Making oats available to all the family, in a
  familiar format that delivers convenience

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Oatibix Fast track to Launch

• July 2005 - Development began with Oatibix
  bitesize, originally bitesize seen as only viable
  concept!
• August 2005 - Research on Bitesize began.
• December 2005 Large Biscuit version developed
• January 2006 Research on large biscuit
  undertaken.
• March 2006 - First Trade presentation.
• June 2006 Oatibix hits the supermarket shelves
  (Along with Oatibix Bitesize)
• 11 Months from RD to Stores

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The results 6 months from launch

• Oatibix was worth 8.9 million (first 26 weeks)
  and contributed 21 of RTE category value growth
• and 65 of all RTE NPD value
• It achieved a 2.5 brand share
• and was 13th largest selling cereal in market
  within 6 months in a category of 300 products
• Oatibix gained an18.6 brand penetration against
  a Nielsen benchmark of 4.8 for new brand
  launches
• 4.7 million households purchased the brand
• 29 going on to make a repeat purchase

The best cereal launch since 1978!
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Why the Oatibix launch was a success?

• Research wide category issues covered as well
  as specific product viability, creating a
  confident credible selling story.
• Launch programme - 2.5 million TV campaign
  within first 6 months, plus ½ price trade
  promotions to encourage trial.
• Alignment (Timing) - The product matched the
  customers strategic objective to provide healthy
  products with strong consumer propositions.
• Distribution We achieved over 70 Sterling
  distribution within 6 weeks of launch

Oh! And consumers like Oatibix!
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Oatibix missed out on sales of 6.5 m in first 26
weeks of launch.

• A Gold/5 launch across all major retailers
  would have increased value sales from 8.9m to
  15.4m (first 6 month)

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3 issues cost us 6.5m

• Launch lead time was too short to enable more
  effective plan, resulting in
• Integration of Retailer and Consumer support not
  achieved in all stores.
• Display space limited in some retailers.
• Other in-store support limited
• Difficult to gain full support given plethora of
  NPD in the category.
• Supply issues were caused by the success, this
  limited second phase promotions

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Future Process improvements (when
possible!)

• Increase launch lead time for major NPD in order
  to
• Secure correct distribution levels
• Plan trade off shelf promotion programmes
• Add additional account support where available
• Assist trade with NPD implementation on shelf,
  particularly with new sectors
• Plan for sales success with better contingencies
  for increased production and supply

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The key learning

• We have to involve our key customers earlier in
  the NPD process