3. Index
Disney: A brief Introduction
History
Key Peoples
Disney Consumers’ products
Merchandise Licensing & Disney Consumer Products
Disney at the Supermarket
Nutrition, Obesity and the American Diets
Disney Nutritional Guidelines
Imagination Farms
The Competition
Disney & Kroger
The Future
Conclusion
Disclaimer
5. Disney Consumer Products: The division responsible for
product development and marketing of Disney-branded
merchandise.
Includes more than 2100 packaged food and beverage
products.
Around 2004, the company found itself in middle of
maelstrom as more than 30% of American children between
ages 5 to 9 years found overweight and 14% .
Dramatic increase in childhood obesity caused the company
to consider nutritional value of its own products.
6.
7. • Walter Elias Disney & his brother Roy: Founder of Disney
Company
• 1923: Debut of Mickey mouse in steamboat Willie.
• 1954: First Television program The Wonderful world of Disney.
• 1955: Disneyland opened in Anaheim, California attracted
millions of visitors.
• 1996: Disney acquired media company ABC, 10 television
stations, 21 radio stations, 7 daily newspapers.
• 2006: Incorporated Parks & Resorts, Studio Entertainment,
Media networks and DCP(Disney Consumer Products).
8. Income Statement, Walt Disney Company and Disney Consumer
Products, fiscal 2003-2005($ million)
2003 2004 2005 2003 2004 2005 2003 2004 2005
Revenues 27,061 30,752 31,944 2,344 2,511 2,127 53 53 69
Costs &
Expenses
23,887 26,264 27,290 1,960 1,977 1,607 8 8 11
Operating
Income
3,174 4,488 4,654 384 534 520 44 45 58
Net
Income
1,267 2,345 2,533
Walt Disney Company Disney Consumer
Products
Disney Consumer
Products(Food &
Grocery only)
9. Top Earning Fictional Character, 2003 to 2004($ billions)
Fictional Character Company Year Introduced Estimated Values
2003
Estimated Values
2004
Mickey Mouse Disney 1928 4.7 5.8
Winnie the Pooh Disney 1926 5.9 5.6
Frodo Baggins Tolkien Enterprise 1954 2.2 2.9
Harry Potter JK Rowling 1998 2.9 2.8
Nemo Disney 2003 n/a 2.0
Yu-Gi-Oh! Warner Bros. 1996 0.7 1.6
SpongeBob Square
Pants
Nickelodeon 1999 0.9 1.5
Spiderman Marvel Entertainment 1962 2.7 1.3
Wolverine, X-Men Marvel Entertainment 1962 0.0 0.9
Pikachu, Pokemon Pokemon 1996 0.8 0.8
Sully, Monster, Inc. Disney 2001 1.0 n/a
Darth Vader, Star Wars Lucas Films 1997 1.3 n/a
Total 23.0 25.2
10. • Walter Elias Disney & his brother Roy: Founder of Disney
Company.
• Michael Eisner, CEO in 1984 emphasized more on
entertainment assets, syndicating its libraries of films and
released classic animated films.
• Andy Mooney, President in 2000 - planned to build DCP into
global consumer products company.
• Embola Ndi, vice president for product development who led
a great effort to create food products standards and
nutritional guidelines.
11. Healthy
Categories
• Water
• Juice
• Milk
• Fruit
• Vegetables
Staples
• Pasta
• Soups
• Breads
• Yogurts
• Meats/Cheese
Treats
• Confections
• Ice Cream
• Cookies
DCP’s Food and Beverage Categories
12. Consumer Time Investment in Disney-Related
Entertainment Activities
Activity Consumer Hours per year(millions) %
Cruising on Disney Cruise Lines 50 1%
Listening to Disney radio 20 0%
Logged onto www.disney.com 20 0%
Watching the Disney Channel 7000 76%
Reading Disney books/magazines 350 4%
Visiting Disney theme park 800 9%
Watching Disney live stage shows 20 0%
Playing Disney video games 250 3%
Watching Disney movies at home 350 4%
Watching Disney Movies in theatre 300 3%
13. Merchandise Licensing & Disney Consumer
Products
Softlines
Apparel
Footwear
Accessories
Buena
Vista
Games
Home &
Infant
Hardlines
Food
Health &
beauty
Electronics &
stationary
Publishing Toys
14. Leading Licensors of Character-Driven Entertainment Brands, 2005
Company Key Characters Rank Worldwide Retail Sales($billion)
Disney Consumer Products Mickey Mouse, Winnie the Pooh 1 21
Warner Bros. Consumer Products Harry Potter, Looney Tunes 2 6
Nickelodeon & Viacom Consumer
Products
SpongeBob Squarepants 3 5.2
Marvel Entertainment Spiderman 4 5
Sanrio Hello Kitty 6 4.2
Lucas Licensing Star wars character 10 3
4Kids Entertainment Yu-Gi-Oh! Characters 13 2.8
HIT Entertainment Ltd. Bob the Builder, Barney 16 2.25
Mattel Brands Inc. Barbie 17 2.2
Universal Studios Consumer Products
Group
Curious George 20 2
20th century Fox Licensing &
Merchandising
Eragon 21 1.5
Pokemon, USA, Inc. Pikachu 23 1.3
Sesame Workshop Sesame Street characters 25 1.25
BBC Worldwide Teletubbies 26 1.2
Peanuts Charlie Brown 28 1.2
American greeting Properties Care Bears, Strawberry Shortcake 36 0.8
Nelvana Babar, Franklin the Turtle 49 0.55
MGM Consumer Products Pink Panther 54 0.45
Cookie Jar Entertainment Doodlebops 76 0.13
Scholastic Media Magic School Bus Character 97 0.05
15. Disney at the Supermarket
DCP had been a long time licensor of packaged foods mostly
candy and ice cream.
DCP believed that company’s changing models, retail industry
consolidation and obesity epidemic offered DCP an
opportunity to simultaneously broaden its product offerings.
Through intensive research, DCP found mother wanted to
purchase nutritious products while kids want fun graphics and
shapes, good taste and great fun.
As a result DCP determined to include product categories-
water, fresh food, frozen foods, juice, pasta, soup, cereal,
baked goods and dairy/milk.
16. Ten Largest U.S. Supermarket Companies, 2006
Company # of
Supermar
kets
Est.
Annual
Sales
($ billions)
Sq. Ft.
Selling
Area
(millions)
Full-Time
Employees
(thousands
)
# of
Checkouts
(thousand
s)
Top
Banner
Name
Wal-Mart 2,0898 98.7 130 670 55 Wal-Mart
Sprcntr
Kroger Co. 2,501 58.5 104 196 27 Kroger
Albertson 1,765 36.3 89 142 18 Albertson
s
Safeway 1,540 32.7 56 103 14 Safeway
Ahold 824 23.8 35 77 11 Stop &
Shop
Publix 876 18.5 34 94 9 Publix
Delhaize 1,544 16.5 45 65 13 Food Lion
H.E. Butt 272 10.4 13 35 7 H.E. Butt
Supervalu 619 8.6 17 31 5 Save-a-Lot
Winn-
Dixie
563 7.1 26 41 6 Winn-
Dixie
17. Nutrition, Obesity and the
American Diet
On January 12, 2005, the U. S. Department of Agriculture (USDA)
updated its official federal nutrition recommendations on what
Americans should eat to meet nutrient requirements, promote health,
and reduce the risk of chronic disease.
Experts were noting alarming trends in childhood obesity, from 5% to
14% among 2-5 year olds, from 4%-19% for 6-11 year olds and from 5%-
17% for 12-19 year olds. More than 65% of the U.S. adult population was
classified as overweight
Experts feared that overweight children—who had a 70% chance of
becoming overweight or obese as adults—would eventually succumb to
some of the same diseases facing these adults, namely heart disease,
diabetes, stroke, arthritis, hypertension, gallstones, and sleep apnea.
18. IOM recommendation to food and beverage
companies:
1. Actively promote healthful diets for children.
2. Develop an “empirically validated industry-wide rating system”
for labeling and advertising
3. Enforce strict marketing standards and adhere to self-regulatory
guidelines for traditional advertising as well as “evolving vehicles”
such as the Internet and “advergames.”
4. Avoid linking “nutritionally questionable” products to admired
celebrities, sports figures or cartoon characters
19. Disney Nutritional Guidelines
Following IOM nutritional guidelines Disney evolved
healthier product line- controlled levels of added
sugars, Calories, additives and contain no trans or
hydrogenated products.
21. Recommendations for Disney-branded Foods after
Nutritional Audit
% of Portfolio
Products met nutritional guidelines for
category—no
changes required
41%
Products classified as occasional treats—
exempted
from nutritional guidelines
15%
Products out of compliance but able to
meet
guidelines after portion sizes adjusted
9%
Products out of compliance—to be
reformulated
7%
Products out of compliance—to be
phased out
28%
Total 100%
23. Marketed Fresh Fruits and vegetables
like salads, sliced fruit
Imagination farms contracted with 15 large growers to
provide both organic and conventionally grown
produce to supermarket under Disney Garden Brand
name
Used 3 strategies:
1. Differentiate commodity produce through promotion
2. Value Added products
3. Exclusive produce varieties yielding more child-friendly foods
27. 1. Nickelodeon
Television programming, marketed consumer
products, books, magazines and feature films
In July 2006, Nickelodeon announced line extension
to apples, pears, cherries, soyabeans, carrot and
apple dips
Targeted kids by using Nickelodeon characters on
fruits
Aim was similar to Disney Consumer Products
28. 2. Sesame Workshop
Del Monte Foods signed a licensing deal with Sesame
Workshop- a nonprofit educational organization and
supported Sesame Workshop’s “Healthy Habits for Life”
initiative to help children and families lead healthier lives
Sesame Workshop also signed an agreement with Sunkist to
market fresh fruits
3. Warner Bros
Ready Pac signed a licensing agreement with Warner Bros
together producing for supermarkets
The new packages contained grapes, apples and carrots,
introduced some other healthier snack alternative
30. The Disney Magic Selections line was created as Kroger corporate brand giving
discount sale on national brands with quality equal to or better than national brands
Together, Disney & Kroger sized the opportunity at $250 million in annual revenue
Disney negotiated with Kroger on DTR relationship for an exclusive line of Disney
Branded products
The retailer operated 3,700 stores in 30 states under 30 banners sharing 12% of U.S.
grocery market
DCP developed a broad range of products with Kroger Supermarkets, the largest pure
grocery retailer in U.S.
31. Private Label Opportunity by Category for “Better-for-You” Products, 2006
Kid- Driven Categories Private Label Share of Mainstream Private Label Share of “Better for
You”
Bread 27% 0%
Carbonated Soft Drinks 11% 8%
Cheese 32% 19%
Chocolate Candy & Chewing Gum 2% 0%
Cookies 14% 2%
Crackers 11% 9%
Frozen, Hand-Held Entrees 5% 0%
Ice Cream/Novelties 21% 10%
Lunch Combos & Lunch Meats 9% 11%
Portable Breakfast & Snack Foods 10% 6%
Ready-To-Eat Cereal 10% 11%
Salty Snacks 5% 7%
Shelf-Stable Juice Drinks 19% 0%
Soup 12% 9%
Sport & Energy Drinks NA 1%
Yogurt & Yogurt Drinks 15% 19%
33. Some Steps...
Vast scope of
growth in food &
beverage market
Planning to
capitalize the
vast resources of
Walt Disney
Company to gain
market share
and acceptance
for its new
undertaking.
Publishing
cookbooks,
televising cook
shows and
linking its
nutritional
efforts with
exercise
programs.
Extending its
offerings from
retail
supermarket
products to food
service
34. Conclusion
Disney mission is to provide “nutritionally beneficial” food
products.
Products have to be more affordable and should be exclusive
for different outlets.
Company to gain huge market share and acceptance for its
new food products
Point of Differentiation: Disney Magic Selection & “better for
you” products.
Planned to make tie-up with additional retailers other than
Kroger.