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SECTION 1 FOR PUBLICATION

SECTION 2 EXECUTIVE SUMMARY Symington s stands out as an independently owned innovator in the FMCG industry Naked Noodle epitomises the company s entrepreneurial spirit a new brand launched to fill a gap in the market tapping into the growing acceptance of Asian fast food the economic pull of packed work lunches and the opportunity afforded by a commodity category which alienates many consumers A key criteria from the outset was that Naked Noodle should be an authentic quality product proposition with packaging to match Measured on any level against Symingtons original objectives the brand has exceeded expectations with NO additional support 298 words 2

OUTLINE OF PROJECT BRIEF DESCRIPTION SECTION 3 PROJECT OVERVIEW Reinforce industry perception of The product is an authentic Ramen noodle soup brand into the dry Symington s as an entrepreneur noodle dry soup sourced in China soup category with minimal with the agility to take risks and but soon to be manufactured in investment respond to market opportunities house by Symington s see p16 Launch a new authentic Ramen To make up consumers simply add Exploit the Naked Noodle boiling water and leave it to stand younger more affluent soup name which Symington s for 4 minutes The carton has been consumers and those that don t registered several years ago chosen to mimic a New York Use a new brand to target currently buy into the category style takeaway packet An inner Tap into the increase in Tap into the growing acceptance and food credentials of noodle home packed work lunches as a result of the recession restaurant chains like Wagamama Avoid the price promotion discounting strategy adopted by Gain a listing in one major retailer Achieve sales of 5 units per variant per week per store Recoup the investment from profit within 15 18 months most competitor brands in the dry soups category removable cup makes it easier for consumers to drink the last drop of soup Naked Noodle taps into the growing acceptance of Asian noodle cuisine and the success of snacks like Pot Noodle and Golden Wonder s Nation s Noodle Normous Noodle It addresses a gap in the market for a similar on the go noodle snack targeted at women and more affluent professional consumers The price point of 1 ensures it remains an affordable lunchtime snack with the opportunity to sell into all multiple retailers 3

SECTION 3 PROJECT OVERVIEW OVERVIEW OF MARKET MINTEL 1 PAINTS A PICTURE OF A ACCORDING TO KEY NOTE 2 HAVE RESPONDED WITH MATURE AND DECLINING SOUP MARKET OVERALL RETAILERS AND MANUFACTURERS Over the past several years the INCREASED NPD AND dry soup sector has struggled ADVERTISING BUDGETS 1 Soup experienced a challenging because it is thought to be the least 2011 as a result usage of soup healthy of the three categories The share of new soup products in fell from 80 of adults in 2010 to Manufacturers are seeing a total food NPD climbed to a 4 year 77 5 in 2011 continuing a strain in their overall profits as record high in 2011 as own label long term downward trend commodity prices rise and retailers gained momentum The top two force manufacturers to bear the companies bringing new soups to This played a role in prompting cost Supermarkets own brands market were Asda and Morrisons total retail sales of soup to fall 1 are challenging manufacturers helping own label account for in value to 591m over 2010 position on retail shelves and a hefty 59 of new launches in and 2011 an estimated volume threatening profit by pushing down soups in 2011 NB Predominantly decline of 1 5 Indeed prices Excessive promotions are in chilled frozen soups Just as the user base was nearly 10 hindering corporate profit The the level of NPD hit a recent record percentage points smaller in 2011 competition in the soups industry is high in 2011 so the total value of than it was in 2007 suggesting intense advertising expenditure rocketed to soup has not benefitted from the its highest since at least 2007 up economic downturn and continues 171 on 2010 to face intense competition from other light meals and snacks The value of shelf stable wet soup tumbled by 5 3 dry soup posted a slight increase of 1 1 mainly due to own label NPD and chilled frozen soup climbed a relatively impressive 8 1 The dry soup category remains crowded and commodity driven with few food credentials It is dominated by Batchelors and Campbell s two well established and well loved brands It accounts 1 Mintel UK Soup Report May 2012 2 Key Note UK Soup Market Report for 16 of the overall soup market chilled frozen soup 27 and shelfstable wet soup 57 February 2012 4

IN CONTRAST TO THE SOUP KEY OBSTACLES IDENTIFIED SECTOR INSTANT NOODLE SNACKS HAS SHOWN RELATIVELY SECTION 3 PROJECT OVERVIEW 6 The packaging needs to counteract perceptions that 1 As the first product in a new the dry soup category lacks SOLID SALES GROWTH OF 8 BY category Naked Noodle has food credentials and instead VALUE AND 3 BY VOLUME 3 no natural home and relies reflect an authentic quality entirely on the packaging Ramen noodle soup Compared with soup the instant to communicate its product noodles sector has a more overtly proposition youthful image thanks to the highprofile advertising campaigns of premium contemporary cues to 2 With only three product Pot Noodle and Golden Wonder variants it also needs to work Nation s Noodle This ties in with hard against the much broader younger consumers being the portfolios of competitive brands biggest users of noodles Around in both sectors 7 in 10 adults used noodles last year according to the report Soup 7 It also needs to signal more attract a younger more affluent consumer 8 Competitors offer almost continuous price promotions and several advertise heavily 3 As a new brand it is manufacturers could therefore competing against well benefit from taking cues from the established and much loved rival market in order to increase brands Batchelors usage among 16 24s who are the Campbell s Golden Wonder Project Launch Date June 2011 Size Of Design Budget N A lowest overall users of soup 4 It is also competing against Naked Noodle has effectively foodie brands like Ainsley created a new category of Harriott noodle soups in between the two existing categories which 5 There is a mass of NPD in the leads to significant merchandising hot snacking category Mug challenges Shots Normous Nation s Noodle etc and in the chilled soups category 3 Mintel Pasta Rice and Noodles Report UK March 2012 5

OUTLINE OF DESIGN SOLUTION SECTION 3 PROJECT OVERVIEW The original sourced product from China was authentic but the brand and packaging would not have appealed to the UK market particularly to Symington s target young female professional It looked cheap and lacked premium cues or food credentials Concepts explored a range of Wagamama inspired designs to convey Oriental authenticity restaurant quality and food credentials Premium brands in other sectors were also referenced as were other Japanese retailers Muji Uniglo Contemporary styling was key The brand identity needed to be protectable sophisticated and convey the core concept of an extended brand products containing noodles with an element of wit or humour which is what makes some of the pot noodle snacks so succesful 6

SECTION 3 PROJECT OVERVIEW RATIONALE BEHIND CHOSEN DESIGN The chosen concept was felt 7 Matt black pack signifies the 10 A photo of the finished to signify the authenticity and premium authentic nature of product is important for a premium cues most successfully the product and contrasts well snacking impulse buy with good shelf stand out against against brands like Batchelors to reinforce food credentials Batchelors Campbell s in the dry Campbell s and Pot Noodle and to communicate the soups category and Pot Noodle snacks product proposition Nation s Noodle in the noodle snack category 8 Light hearted noodle copy 1 Block coloured top face 11 Contemporary graphics adds an element of fun and will appeal to our target quirkiness market of young potentially contrasts with black to give good shelf standout female professionals A 9 Noodle copy also reflects 2 The black coloured design scheme echoes Oriental Asian a careful considered brand the overtly male influence in the implying that the product inside pot noodle category will be of equal quality influences particularly the delicate touch contrasts with 319 words 4 black red Chilli Beef flavour 3 NY style takeaway carton conveys authentic 1 Oriental cues and a desirable contemporary quality for the younger more affluent target audience 4 Tamper seal on top face will replace shrink wrap seal once Symington s are manufacturing in house see p11 and 2 3 5 6 11 7 provides clear quality cues 5 Clear variant differentiation on lid and face of pack 6 Composite logo device of 8 10 9 N and Naked Noodle name is protectable communicates noodles visually and conveys an element of fun 7

SECTION 3 PROJECT OVERVIEW 8

SECTION 4 SUMMARY OF RESULTS 1 MEASURABLE AND GROWING RETURN ON INVESTMENT The following results can only be attributed to the packaging design Total investment in new brand as there was no other support returned from turnover within 7 weeks and from profit within 15 4 weeks Launched June 2011 paid for Total investment 1524 ROI or itself out of profit by the end of 15 times measured by turnover September 4 468 ROI or nearly 5 times measured by profit 4 4 To end wk 26 2012 based on individual retailer EPOS data 9

2 VOLUME SALES EXCEEDED EXPECTATIONS BY 300 IN WEEK 2 Symington s projected modest sales Forecasts as per sales chart of 5 units per variant per overleaf are based on weekly week per store 1 665 units confirmed likely sales SECTION 4 SUMMARY OF RESULTS for Naked Noodle hence the minimal investment in design and lack of any marketing support A confirmed agreement to roll out to another 239 Asda stores in October It exceeded the company s weekly sales expectations A confirmed agreement that by nearly 300 within the Asda will take a new Naked second week projected sales Noodle Snack Pot range see of 1 665 units per week second p14 with a knock on effect week s sales totalled 4 833 units estimated at a factor of 1 2 on core products due to in In terms of total volumes sold since creased interest and shelf launch these are now running presence at 585 or 5 8 times projected totals By October this figure will A confirmed agreement that be 677 or 6 8 times projected Sainsbury s will stock all 3 totals and by the end of 2012 it variants in wk 34 volumes will be 893 or nearly 9 times agreed across 300 stores projections An expectation to roll out to Weekly volume sales are an another 247 Tesco stores in the even better indicator of current Autumn performance with sales now averaging 7 3 times 729 An indication that Tesco will projections based on the last stock all three variants and that 8 weeks figures These are current merchandising problems expected to rise to 21 5 times will be resolved by the 2152 Symington s initial weekly Authumn projections by October 10

FORECAST ASSUMPIONS 1 Forecasts based on an average 3 Assumed impact of resolved of previous 8 weeks figures merchandising issues in Tesco across all retailers factor of 1 2 2 Assumed impact of new Naked Noodle range on exising SECTION 4 SUMMARY OF RESULTS 4 Assumed impact of additonal 247 Tesco stores factor of 2 6 products factor of 1 2 due to increased shelf presence and knock on effect of positive 5 Assumed impact of addition Asda stores factor of 3 1 response to new products 11

SECTION 4 SUMMARY OF RESULTS 3 PER STORE PER WEEK SALES IN ASDA OUTPERFORMING COMPETITORS For the 26 week period from 26th November 2011 to 26th May 2012 average sales in Asda outperformed Ainsley Harriott s Cup A Soup on a per store per week basis although Batchelors performed better on volume sales highlighting the constant price promotions Weight of purchase for Naked Noodle was 2 4 packs per trip indicating that consumers are interested enough to try more than one flavour 5 This is consistent 5 Kantar WorldPanel data June 2012 with the balance of sales across all 6 Retailer EPOS data three variants 12

SECTION 4 SUMMARY OF RESULTS 4 A 1134 INCREASE IN DISTRIBUTION IN JUST OVER A YEAR Naked noodle was initially Morrison s 320 stores signed up Symington s expects quite launched in 111 Asda stores in to take the full range in January realistically to roll Naked Noodle June 2011 all 3 variants 2012 out into a further 253 Tesco stores in the autumn meaning that by the Symington s then secured Asda has since agreed to roll out end of 2012 it will then be in a distribution for 2 of the 3 variants to its remaining 239 stores in total of 1370 stores a 1134 in 153 Tesco stores in october October increase on the original 111 Asda 2011 stores Sainsbury s has just confirmed all 3 variants in 300 stores This only takes into account the major UK retailers In addition the brand is starting to appear elsewhere 13

5 SO SUCCESSFUL IN ASDA THAT THE RETAILER REQUESTED NEW PRODUCTS SECTION 4 SUMMARY OF RESULTS The brand had only been in Asda stores for 6 months when the retailer asked Symington s to develop more Naked Noodle products We don t often see such a successful new brand launch in this type of mature commoditydriven category Naked Noodle definitely appeals to a new dry soup consumer younger more professional with probably a more female bias With only three variants its shelf presence invariably suffers against the likes of Batchelors and we would love to stock a wider selection of Naked Noodle products Rob Paton Buyer Savoury Canned ASDA The new Naked Noodle Snack Pot range is a wet snack which is microwaved for 2 minutes to serve This takes the brand into the higher value protein based ambient snack sector retailing at 2 19 versus 1 00 for the core range This range extension is likely to have a knock on effect in terms of enhancing the brand s food credentials and authenticity as well as adding shelf inches and thus increasing its brand presence Naked Noodle Snack Pots will launch in Asda in October 2012 14

6 A RAMEN NOODLE SOUP CATEGORY WHERE NONE EXISTED SECTION 4 SUMMARY OF RESULTS Naked Noodle has undoubtedly shaken up the dry soups sector and effectively created a new category of Noodle soup snacks This is most evident by the copycat launch of Batchelor s Deli Box Noodles in May 2012 It is too early to comment on the performance of Deli Box but its positioning in this new category is more Anglophiled and thus less authentic and very much locked into other blue Batchelors dry soup ranges The flavour variants and design are more akin to a stereotypical pot noodle snack than an authentic Ramen noodle soup 15

7 A TRULY COMMERCIAL VENTURE Symington s is unique in the UK Following Naked Noodle s almost FMCG industry Independent immediate success in Asda the agile prepared to take a risk and company has decided to buy the with a real commitment to design necessary equipment in order to the launch of Naked Noodle manufacture in house SECTION 4 SUMMARY OF RESULTS to see how it goes is typical of the company s agility and This will resulting in entrepreneurial spirit 1 10 new jobs 2 specifically for The fact that the one aspect the the Naked Noodle brand company was prepared to invest in albeit a minimal investment 2 An increase in profit margin was branding and packaging is testament to the value it places on 3 More control over production design in the marketing mix 4 A reduction in the product s carbon footprint via reduced shipping and elimination of the current shrink wrap a legal requirement when being shipped from China 5 Faster speed to market on future NPD 16

SECTION 4 SUMMARY OF RESULTS 8 CONSUMERS LOVE NAKED NOODLES Qualitative research June 2012 Typical comments has shown strong support for the packaging 1 I would try them just for the packaging and the look alone even though they re not a well known brand Looks more like a takeaway so you d probably think you re getting a better quality meal than Pot Noodle for a similar price Pack format fits what you re eating Packaging just looks more sophisticated it looks like a better quality meal Looks like the producer knows what he s doing It looks more oriental Reminds me of getting a Chinese in New York A trendy little packet that stands out a lot more than a Pot Noodle I d definitely try them I d get the packet out of the bin afterwards and use it for something cos i think it s quite nice 1 Priciple research focus groups June 2012 17

SECTION 4 SUMMARY OF RESULTS 9 REACHING A YOUNGER MORE AFFLUENT CONSUMER In consumer research 6 the general consensus was that professionals would definitely be attracted to the authenticity and premium quality of the packaging I could imagine it as a product that young professionals would eat rather than a Pot Noodle which looks a bit cheaper This is confirmed by Kantar WorldPanel data 7 Principles Research focus groups June 2012 6 7 AGE BREAKDOWN OF NAKED NOODLE CONSUMERS VERSUS AVERAGE SOUP BUYERS SOCIOL DEMOGRAPHIC BREAKDOWN OF NAKED NOODLE CONSUMERS VERSUS AVERAGE SOUP BUYERS men in suits will buy it Kantar WorldPanel data 12 June 2012 18

WHO IS THE NAKED NOODLE BUYER YOUNGER MORE AFFULENT THAN THE AVERAGE SOUP BUYER SECTION 4 SUMMARY OF RESULTS 19

The obstacles and challenges in this market have already been SECTION 4 SUMMARY OF RESULTS 1 A mature commodity driven category which has hardly grown in recent years this trend predicted to continue outlined in Section 3 but it is worth remembering that Naked Noodle has achieved all of this despite 2 Almost continuous price promotion on competitor brands of 2 for 1 50 3 Being surrounded on all sides by well established and well loved brands Batchelors Campbell s Golden Wonder 4 A lack of food and health credentials in this category 5 Fewer variants than all competitors especially Batchelors with 26 variants and corresponding weaker shelf presence 6 Merchandising challenges as an innovator in a new category 7 Merchandising issues particularly in Tesco 8 Heavy advertising from other soup brands 5 Heinz Baxters Pot Noodle 5 Mintel UK Soup Market Report May 2012 20

SECTION 5 OTHER INFLUENCING FACTORS There was NO advertising NO in store trials NO direct mail sampling NO other marketing support Virtually NO price promotion 5 There was one piece of press coverage The Grocer 6 August 2011 from a Symington s press release 2 months post launch One week wire basket promotion in Asda 3 week price discount of 430 p in Morrison s 5 RESEARCH RESOURCES Principle Research qualitative focus groups June 2012 where Mintel UK Soup report May 2012 Key Note UK Soup Market report February 2012 Mintel Pasta Rice and Noodles Report UK March 2012 Kantar WorldPanel data Asda EPOS data Tesco EPOS data Morrison s EPOS data 21