Del Monte Foods Assesses Usage of Canned Fruit

Case Type: business competition/competitive response.
Consulting Firm: Ernst & Young (EY) Advisory first round job interview.
Industry Coverage: food & beverages.

Case Interview Question #00269: Del Monte Foods is an American food production and distribution company headquartered in San Francisco, California. Del Monte Foods is one of the country’s largest producers, distributors and marketers of branded food and pet products for the U.S. retail market, generating approximately $3.6 billion in net sales in fiscal year 2009. Its main product lines include canned fruit, canned vegetables, broth, sauce, pet food, and pet snacks.

You are the newly appointed product manager for Del Monte’s canned fruit division. In recent years, usage of fruit in plastic cups has been substantially increasing, which is causing canned fruit usage to decline. Your boss, the Marketing Director of Del Monte Foods has asked you to come up with a plan in response to the threat of plastic fruit cups. What should you do?

Possible Answer:

1. Assess the threat:

• Get as much information as possible on plastic cups — Product details (upgrades, new products, new brands, new attributes?), pricing, distribution, promotion/advertising plan.
• Consumer: Who is using plastic cups? Is there a new segment? Does the new product deliver on a key consumer need for this group?
• Competitor: Is this a category increase or a particular brand? How strong is the brand/competitor? Will they spend to support the launch?
• Company/brand: how does your product/brand stack up? Is there a point of differentiation you can still claim?
• Where is the volume coming from? Is this currently impacting your sales or is it just something to watch?

2. Develop immediate and longer term response plan, including:

• Tactical responses such as price incentives or loyalty programs to keep consumers in your category and franchise.
• Strategic responses like reinforcing the category benefits (canned fruit) and your brand equity with advertising; don’t give more consumers a reason to try the new competitive product.
• Longer term responses such as a product upgrade to provide a new key consumer benefit; never give consumers a product-based reason to switch to a different category.

3. Continue to track canned fruit usage and consumer targets. Watch for consumer response to your activity, strengths as well as weaknesses in the 4 P’s, and adjust plans as necessary to continue to respond.

Interviewer’s Note: Feedback to give to job candidate:

• Content — did your interviewee cover all the key business drivers/issues?
• Clarity — could you follow what they were telling you? Did it make sense?
• Conciseness — Was their response structured and not long-winded?
• Meaningfulness — would this be a meaningful response to the Marketing Director of Del Monte Foods?