TruEarth Healthy Food Case Study
Introduction to the case
Company’s background TrueEarth was founded in 1993 in St.Louis ,Missouri, by Garreth Derosta a young entrepreneur . They offered high processed gourmet (focus on whole grain products offering both 60% and 100% whole grain pastas-cucina Fresca) authentic with great quality .

Their product line was:      Standard pastas Whole grain pastas Tomato based sauce Refrigerated pastas Pastas with blended ingredient

The concept was successful ,and truEarth became a supplier to a number of gourmet groceries throughout the Midwestern United State by 1998 ,the Company had built a loyal regional following .Responding to Customer demand ,the company raised consumer awareness through several promotional programs using coupons ,magazine advertisement ,and in-store demonstrations.

Product Development process:
In its early years ,truEarth’s product development was informal and largely driven by intuition .the team enjoyed experimenting with new products and limited edition variations on a core recipes and batch process used to manufacture most products made it easy to experiment without affecting overall production. But as time passed the company underestimate the appeal of hit product and find itself struggling to keep up with the demand. The company’ research and development     Idea generation Concept searching Product development and testing Qualification of volume

About Cucina Fresca
The cucina Fresca line was rolled out nationally in the third quarter of 2006 .it grew quickly with 18$ million in retail sales in 2006 and 35$ million in 2007.

 It was quick and easy no guess work for consumer  recommendation of the best sauce
    simple structure with their own touch option for whole grain ,but tasted great single meal for 2 only one strong competitor

Market Consumer Trend

 Home Meal Replacement  increase in dual-income households  time poverty  desire for variety and freshness  “Semi-prepared” products  Consumers still involved in preparing dinner, but it is easier  Growth of refrigerated fresh pasta  Awareness of the importance of whole grains in diet

The Objectives:
 Assess the current situation on the market  Analyze the position of TruEarth  Assess whether TruEarth should launch the pizza and what the volume would it be?

Competitive Environment
 Segments  delivered/takeout(47%)  restaurant pizza (23%)  frozen pizza (19%)  homemade pizza (2%)  Competitors  Giants: Nestle and Kraft  Medium-sized: Papa John’s and Pizza Hut  TruEarth-like: the only such competitor is Rigazzi Brands

 Threat!
 Rigazzi is about to launch a similar whole grain pizza

Cucina Fresca Experience
 Ideas  Quick and tasty home meal replacement  broad range of choices  Preparation  focus groups  market research  advertising and promotion ($10m)  large investment in production facilities  Promising trial results  Performance  $18m retail sales in 2nd half of 2006  $35m in 2007  slowdown in 2008

the Risks :
 Rigazza is not far from launching its whole wheat pizza  Refrigerated pizza brings up with an association with frozen pizza  The offered price can be too high  Advantages of our pizza over other refrigerated pizzas can be overestimated

The Assumptions:
During trial period the product is consumed by 3 types of households: 1. Consumers of Cucina Fresca Pasta. 2. Non-consumers of brand who already aware of product. 3. Non-consumers of brand who become aware of product due to additional advertising and promotion.

Additional marketing plan would cost $10M and results in 800 GRP. Additional advertisement would affect only unaware targeted population with pure increase in awareness on 17%.

The wholesale volume to be exceeded is $10M+$12M = $22M

The worst case scenario:
 Define those who are favorable to product as participants of the trial period.  Only people who are favorable to product influence the repeat rate of it.

 With given prices 28% of population which is favorable to product suggested that pizza needs no improvement (Exhibit 10).  even in the worst scenario at least 28% of trial households would participate in repeat period given price unchanged.

 The price of the kit (pizza + toppings) remains unchanged – 12.38$

Implementation :
Operation  Buy refrigerated equipment  Lower the price of packaging Distribution  Wholesale  Retailer

Marketing
 Promotion ,facebook twiter ,magazine ,email ,mail  Contests and giving away prize  Store Event

Recommendation :
The firm definitely should enter this new market.