USSTB 2012 Retail Program External Customer Presentation Effective - - PowerPoint PPT Presentation

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USSTB 2012 Retail Program External Customer Presentation Effective - - PowerPoint PPT Presentation

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USSTB 2012 Retail Program External Customer Presentation Effective April 1, 2012 1 | Altria Group Distribution Company l 02/22/2012 Smokeless Category: Overall Value Growing Category Robust Margins Valuable Consumer Index of

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SLIDE 1

USSTB 2012 Retail Program

External Customer Presentation

Effective April 1, 2012

1 | Altria Group Distribution Company l 02/22/2012

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SLIDE 2

.

Smokeless Category: Overall Value

Growing Category¹ Robust Margins¹ Valuable Consumer²

¹ Source: ALCS MICR Internal Estimates. ² Source: VideoMining Report, May 2011

Index of C-Store Basket Spend by Type of Adult Tobacco Consumer

Adult Tobacco Buyers 21+ vs. Average Adult C-Store

2 | Altria Group Distribution Company l 02/22/2012

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SLIDE 3

Adult MST Consumer Preferences

Adult MST Consumers are likely to go out of their way when selecting a store if that store consistently:

  • 1. Maintains their brand in-stock
  • 2. Offers special deals on their brand
  • 3. Provides fresh product
  • 4. Offers a wide selection of MST Products

Source: Retail Experience Study; October, 2011

3 | Altria Group Distribution Company l 02/22/2012

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SLIDE 4

Program Objectives:

  • Ensure USSTB Product Availability and Freshness
  • Clearly Communicate Value and Brand News to the Adult MST Consumer
  • Special Price Promotions
  • New USSTB SKUs
  • Product Promotions

A pay for performance program to help Retailers meet Adult MST Consumer expectations

USSTB 2012 Retail Program

4 | Altria Group Distribution Company l 02/22/2012

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SLIDE 5

USSTB 2012 Retail Program

What’s New or Enhanced?

  • Base Payment
  • Fixture Plan Merchandising

Look

  • Enhanced Fixture Look Option

and Enhanced Fixture Look Option Payment

  • USSTB Designated SKUs
  • USSTB Designated SKU

Purchase Requirements

  • Retail Price Promotion

Participation Requirement

  • Quarterly Insightsc3m Access

What’s Eliminated?

  • Flat Rate Payment Options
  • Copenhagen Consistent

Ordering Incentive Payment

  • Option to merchandise on a

Fixture if participating in the Visibility Plan²

  • 4 foot minimum size

requirement of the Smokeless Tobacco Product Category Space under the Fixture Plan

What’s Staying the Same?

  • Smokeless Tobacco Products

Share of Space Merchandising¹

  • New Brand Acceptance and

Repurchase Requirements

All program comparisons in reference to the USSTB 2010 Retail Program

5 | Altria Group Distribution Company l Final ¹ Smokeless Tobacco Products and Signs merchandised in the bottom 24” of a cigarette Fixture pursuant to Retailer’s agreement with a cigarette manufacturer will not be included in Smokeless Tobacco Product Category Space for purposes of determining the USSTB Share of Smokeless Tobacco Product Category Space ² A store that merchandises Smokeless Tobacco Products on one or more Fixtures may only participate in the Fixture Plan

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SLIDE 6

Region 1 Regions 2-4 Region 5

Revised Designated USSTB SKUs

2012 Requirement: Maintain saleable inventory and visibly merchandise all 7 Designated USSTB SKUs, as specified by USSTB Top 7 USSTB SKUs Nationally USSTB 2010 Retail Program Designated SKUs USSTB 2012 Retail Program Designated SKUs SKUs Varied By Geography

6 | Altria Group Distribution Company l 02/22/2012

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SLIDE 7

2012 Requirement: A Store must meet both the Copenhagen Weekly Purchase Requirement* and the Other Designated SKU Monthly Purchase Requirement.

  • Copenhagen Weekly Purchase Requirement:

– A Store must purchase from a STARS-reporting wholesaler for 12 out of 13 STARS weeks during a STARS Quarter, in addition to any USSTB promotional product, both:

  • One straight stock 5-can roll of Copenhagen Fine Cut Natural; and
  • One straight stock 5-can roll of Copenhagen Long Cut Natural
  • Other Designated SKU Monthly Purchase Requirement:

– A Store must purchase from a STARS-reporting wholesaler in addition to any USSTB Promotional Product, at least one straight stock 5-can roll of each of the following Designated USSTB SKUs during each STARS Month:

  • Copenhagen Long Cut Wintergreen, Skoal Fine Cut Wintergreen, Skoal Long Cut Wintergreen,

Skoal Long Cut Straight and Skoal Long Cut Mint

USSTB Designated SKU Purchase Requirements

*Same measurement as the USSTB 2010 Retail Program’s Copenhagen Consistent Ordering Incentive 7 | Altria Group Distribution Company l 02/22/2012

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SLIDE 8

USSTB Designated SKUs Purchase Requirements

Example

Fail

(1 of 3 months)

Month 1 Month 2 Month 3 15 10 15 5 10 10 10 5 5 5 10 5 5 5 Pass Fail Pass Copenhagen LCWG Skoal FCWG Skoal LCWG Skoal LCS Skoal LCM Pass / Fail

Pass

(12 of 13 weeks)

1 2 3 4 5 6 7 8 9 10 11 12 13 15 5 5 5 10 5 15 15 10 5 5 5 10 20 15 15 10 5 20 15 5 10 5 5 5 P P P P P F P P P P P P P Week Copenhagen FCN Copenhagen LCN Pass / Fail Copenhagen FCN & LCN Can Purchases by STARS Week Other USSTB Designated SKU Can Purchases by STARS Month

Failure to meet either, (1) the Copenhagen Weekly Purchase Requirement, or (2) the Other Designated SKUs Purchase Requirements during a STARS Quarter will result in the Store not earning its Merchandising Payment for that STARS Quarter. USSTB Designated SKU Purchase Requirements were not met, resulting in the Store not earning its Merchandising Payment for that quarter

8 | Altria Group Distribution Company l 02/22/2012

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SLIDE 9

Retail Price Promotion Participation Requirement

2012 Requirement: A Store must participate in and comply fully with the terms

  • f all USSTB Retail Price Promotions for which it is eligible

Measurement: Any Store that does not participate in and comply fully with the terms of a USSTB Retail Promotion in which the Store is eligible to participate, will be issued a systematic non-performance resulting in the Store forfeiting one month’s Merchandising Payment.

Example Month 1 Month 2 Month 3

Store Participating in all USSTB Retail Price Promotions Yes No Yes USSTB Retail Program Merchandising Payment* Yes No Yes

*Subject to satisfaction of all USSTB 2012 Retail Program requirements

9 | Altria Group Distribution Company l 02/22/2012

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SLIDE 10

New Base Look Elements: 1. Dual-Brand Fixture Header 2. Vertical Brand Blocking 3. Deal Zone

Fixture Plan Merchandising: Base Look

1 2

Fixture Plan Base Payment:

2₵ per can payment*

3

Image shown with USSTB Hex Tray shelf, an optional merchandising resource available to USSTB 2012 Retail Program Fixture Plan participants

*Subject to satisfaction of all USSTB 2012 Retail Program requirements

10 | Altria Group Distribution Company l 02/22/2012

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SLIDE 11

Enhanced Fixture Look Option Merchandising

Available to Fixture Plan Participants Only

Enhanced Fixture Look Option:

4₵ per can payment*

00

0 00

Enhanced Fixture Look Option Elements: 1. Single-Brand Fixture Header 2. Secondary Brand Sign

  • Within USSTB Portion of the

Primary MST Merchandising Area

  • Minimum Size of 12” x 12”

1 2

*Subject to satisfaction of all USSTB 2012 Retail Program requirements

Image shown with USSTB Hex Tray shelf, an optional merchandising resource available to USSTB 2012 Retail Program Fixture Plan participants

11 | Altria Group Distribution Company l 02/22/2012

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SLIDE 12

Visibility Plan Merchandising

USSTB Showcase Merchandising Units Average Industry Smokeless Tobacco Products Purchased Per Week USSTB Required Facings 0 - 25 8 26 - 50 12 51 - 100 20 101 - 150 22 151 - 200 24 201 - 300 26 301+ 30 Minimum Number of USSTB Facings

Visibility Plan Base Payment:

2₵ per can payment*

*Subject to satisfaction of all USSTB 2012 Retail Program requirements

12 | Altria Group Distribution Company l 02/22/2012

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SLIDE 13

Interim Merchandising Requirements

Performance under all Program Requirements, including the USSTB Designated SKU Purchase Requirements, is required beginning with the Effective Date of the Agreement, except for the following, which must be in place by May 30, 2012: Fixture Plan:

  • USSTB Fixture Header (Single-Brand or Dual-Brand)
  • Secondary Brand Sign (for Enhanced Fixture Look Option only)
  • USSTB Share of Space¹

Visibility Plan:

  • USSTB Showcase Merchandising Units¹
  • Minimum Number of USSTB Facings¹

¹ If participant is unable to achieve full merchandising values as outlined in the USSTB 2012 Retail Program, due to lack of available AGDC merchandising resources, participant must maintain its current merchandising, as designated by USSTB, with regards to the requirements noted above until AGDC resources become available and are provided to such participant. During such period, a participant will be deemed to have met their respective plan merchandising requirements.

13 | Altria Group Distribution Company l 02/22/2012

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SLIDE 14

Retail Website Access Requirement

  • 2012 Requirement: Beginning Q2 2012, Stores must

log-on to www.insightsc3m.com each quarter¹

  • The insightsc3m.com website provides retailers with

instant access to:

  • Retail Trade Program presentations, sample agreements,

and your signed contract

  • Trade Announcements
  • Up to 18 months of account specific AGDC payment information
  • Account specific Price and Product Promotion information
  • Access to EFT registration and We Card resources
  • Tobacco News and Consumer Insights

¹ Failure to log-on to www.insightsc3m.com each STARS quarter will result in a non- performance and reduction of one-month’s merchandising payment for the corresponding STARS quarter.

14 | Altria Group Distribution Company l 02/22/2012

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SLIDE 15

Terminated 3/31/12 Fixture Plan Visibility Plan Quarterly Cents Per Can Payment Quarterly Flat-Rate Payment Quarterly Cents Per Can Payment Quarterly Flat-Rate Payment

General Merchandising

  • $10
  • $5

Copenhagen Consistent Ordering Incentive $0.06 $5 $0.05 $5 Maximum Potential Payment Amount $0.06 $15 $0.05 $10

USSTB Retail Program Payments Comparison

Effective 4/1/12 Fixture Plan Visibility Plan Quarterly Cents Per Can Payment Quarterly Cents Per Can Payment

Base Payment $0.02 $0.02 Enhanced Fixture Look Option $0.02 N/A Maximum Potential Payment Amount $0.04 $0.02 For complete details please reference the USSTB 2012 Retail Program Agreement

USSTB 2010 Retail Program Payments USSTB 2012 Retail Program Payments*

All payments based on STARS purchases, effective 4/1/12

Flat Rate Payment Options Eliminated 3/31/12

* Paid on Average USSTB-CPM, which means, with respect to a Store, the total number of cans or other units of USSTB MST purchased by such Store from STARS-reporting wholesalers during a STARS Quarter, less returns, as reported in STARS.

USSTB Retail Program Payments Comparison

15 | Altria Group Distribution Company l 02/22/2012

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SLIDE 16

USSTB 2012 Retail Program Summary

  • USSTB Prescribed Merchandising

– USSTB in #1 Position – Minimum Number of USSTB Facings – Vertical Brand Blocking – Interior / Exterior Sign Rules – Non-Self-Service

  • USSTB Designated SKU Purchase

Requirements

  • New USSTB SKUs Requirement

– Acceptance and Repurchase

  • Retail Price Promotion Participation

Requirement

  • Quarterly Insightsc3m Access
  • USSTB Prescribed Merchandising

– USSTB in #1 Position – USSTB Share of Space – Vertical Brand Blocking – Deal Zone – Interior / Exterior Sign Rules – Non-Self-Service

  • USSTB Designated SKU Purchase

Requirements

  • New USSTB SKUs Requirement

– Acceptance and Repurchase

  • Retail Price Promotion Participation

Requirement

  • Quarterly Insightsc3m Access
  • Single-Brand Header
  • Secondary Brand Sign
  • USSTB Prescribed Merchandising

– USSTB in #1 Position – USSTB Share of Space – Vertical Brand Blocking – Deal Zone – Interior / Exterior Sign Rules – Non-Self-Service

  • USSTB Designated SKU Purchase

Requirements

  • New USSTB SKUs Requirement

– Acceptance and Repurchase

  • Retail Price Promotion Participation

Requirement

  • Quarterly Insightsc3m Access
  • Dual-Brand Header

*Available to Fixture Plan participants only

2¢/per can Additional 2¢/per can

(Maximum Payment of 4¢/per can)

2¢/per can Visibility Plan Enhanced Fixture Look* Fixture Plan

16 | Altria Group Distribution Company l 02/22/2012

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SLIDE 17

Timeline

Program Resources Available Online

  • Resource Center
  • insightsc3m.com

Week of February 20, 2012 Week of February 27, 2012 Program Effective April 1, 2012 New Agreements Must Be Signed By April 30, 2012 Interim Merchandising Requirements in Place By May 30, 2012

  • New Program Agreement eDocs will need to be signed

17 | Altria Group Distribution Company l 02/22/2012