TruEarth Healthy Foods specializes in gourmet pasta, sauces, and meals. It has established its name by its introduction of fresh whole grain pasta. The company is looking into coming up with the same concept for pizza. It must decide soon in order to keep up with the ever-increasing competition in the market.
V. Kasturi Rangan; Sunru Yong
Harvard Business Review (4065-PDF-ENG)
December 24, 2009
Case questions answered:
- Analyze the key factors for the success of Cucina Fresca.
- Conduct qualitative and quantitative analysis for the new product.
- Should TruEarth Healthy Foods launch the new product, and what would the volume be?
- What would be the action plan for this new product?
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TruEarth Healthy Foods: Market Research for a New Product Introduction Case Answers
This case solution includes an Excel file with calculations.
Synopsis – TruEarth Healthy Foods
TruEarth Healthy Foods is a company making healthy, gourmet products from high-quality ingredients. It is one of the few leaders in the ready-made whole-grain food market, a niche market that offers greater quality and authenticity than the mass-produced food market.
In late 2004, TruEarth Healthy Foods took advantage of the growing demand for quick home meal requirements, refrigerated fresh pasta, and whole-grain food options that did not sacrifice taste to become the first company to develop a fresh whole-grain pasta line called Cucina Fresca.
Market research findings for Cucina Fresca gave the management team a high confidence rating in the success of this product line with a high estimated sales volume ($14 million at wholesale in the first year) and significant interest in the new product. The Cucina Fresca line was launched in 2006, and it grew quickly, with retail sales in half of the first year at $18 million and almost doubled in the year after to $35 million.
TruEarth’s main competitor is Rigazzi, which is similar in size and product offering. To compete with Rigazzi and other potential new entrants, TruEarth realizes it should take advantage as the first mover in this niche market.
Therefore, following Cucina Fresca’s success, TruEarth wanted to leverage its brand and use its large capital expenditure on the pasta line by extending the whole grain products to refrigerated pizzas.
The concept of the new pizza line would be a pizza with a whole grain crust and high-quality toppings that is fresher than frozen pizza, healthier than take-out, and easily customizable.
TruEarth Healthy Foods has identified the store-bought refrigerated pizza market as having high potential ($5.8B, compared to $4.4B of the refrigerated paste market). The company conducted market research for this new product line, but they haven’t decided yet. Also, the pizza market is highly competitive, with huge players that offer low-cost frozen pizza.
In addition, Rigazzi is about to launch the same product line, too. This puts a lot of pressure on the management team to quickly decide if they should launch the pizza line and its volume.
Based on the analysis discussed in the next section, TruEarth should launch the whole-grain pizza line immediately.
A. The success of Cucina Fresca – Key factors
I believe the success of Cucina Fresca was contributed by three key factors: First mover advantage of offering healthy and tasty products, the convenience of the product, and the reliable market research:
- Significant first-mover advantage: Although TruEarth wasn’t the first company to offer whole-grain fresh pasta, it was the first to offer whole-grain fresh pasta without losing the taste, which made it a successful first-mover in the category. Cucina Fresca has successfully challenged the biased perception of the poor taste of whole-grain products and created a new perception of tasty and healthy whole-grain foods.
- The convenience of the product: Cucina Fresca was able to meet a demand for taste and healthy foods, as discussed above, and provide convenience for “time poverty” consumers. By offering fresh pasta instead of dry pasta, TruEarth helped customers reduce preparing time but still feel confident about the high quality of the product. Also, the packaging with recommendations and cooking instructions made it easier for customers to prepare their meals.
- Reliable market search findings: Conducting careful and detailed market research has played a significant role in the success of the Cucina Fresca pasta line. The findings and forecast were reliable and trustworthy, so guesswork was minimized. This enabled TruEarth to tap into many unmet demands of consumers that were discussed above.
B. Launching decision for whole-grain pizza – Analysis & Action Plan
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