Truearth Healthy Foods

Write up for the Session - 8 TruEarth Healthy Foods TruEarth was founded by Gareth DeRosa in 1993 in St. Louis. He saw a rapidly growing demand for sauces and pastas which were made from whole grains and natural, ingredients better in quality than the ones being used currently. Initially, they took an informal approach to product development, using their intuition to develop new products. However, the estimations made by the company were not consistent with the actual trends and calculations. Company was either underestimating the success of a product and found itself struggling with increased demands or overestimating which frustrated the retailers. Later they released limited-edition variations in different test markets. Eventually, they developed a four-step process for research and development where new ideas would be screened and tested through their limited focus groups. Then the promising products would undergo a quantification of volume test process using the Nielsen BASES I&II. In late 2004 TruEarth developed a product, the Cucina Fresca line of whole grain precooked pasta and sauces. They tried to exploit the latest trend in home meal replacements. These products were put through the Nielsen BASES I&II .Based on the findings from the testing process, the company decided to launch the products. The line was rolled out in 2006. Their pasta line was successful at exploiting the first mover advantage and quickly gained the lead in that market segment. However their main competitor, Rigazzi Brands, launched its own whole-grain fresh pasta a year later. The two brands have been competing for market share ever since. The initial success of the Cucina Fresca brand was mainly due to TruEarth’s groundbreaking efforts in launching the product before the competition. The management now wants to adopt a similar approach with the whole grain pizza concept and feel that their established consumer base and brand image will help them in penetrating the market. The pizza business presents a great opportunity with an annual sales of $53 billion in 2007 and 33% of restaurant-goers showing a strong interest in whole grain crust. However, identifying the correct market for the sale of whole grain pizza, estimating its size and business potential will be critical in determining its probability for success. Research objectives should include determining the potential brand penetration for this product, identifying consumer preferences viz a viz the price and product attributes, market share in this category, and sales forecasting. A sensitivity analysis would then have to be conducted using these figures to account for various demand scenarios.

The research which has been done for the pizza concept so far includes estimates of awareness and purchase behavior, mall intercepts and home trials to gain insights into purchase intent, attributes, target price, substitution, consumer likes and dislikes etc. The decision to launch this product can be taken after carefully evaluating the reliability and validity of the numbers. Also, the various possible outcomes have to be evaluated. A proper analysis has to be done on the information provided. Moreover, Cucina Fresca’s popular brand image and loyal customer base will act as critical factors for the success of the new product launch. Also, minor improvements in the product itself, can be vital in determining the success of the launch.