³impulse² category like ours ®by making sure that all flavors of all brands are in-stock ,
all the time. DSS even allows us to tailor specific availability and restocks to what
local consumers want®not just by chain or region, but literally by store. It allows
us to maintain a far wider variety of individual brands than anyone else ®brands
which are highly targeted to consumersò needs and desires across a broad range of
³ice cream occasions.²
Direct-store-service also builds new brands. Our success at innovation, our unsurpassed
track record at developing entire new brands and flavors, depends on our ability to
almost immediately gain and maintain incremental nationwide shelf space. We have
done this repeatedly over the past 10 years. From our original base in premium
Dreyeròs and Edyòs
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Grand Ice Cream, we led the development of the ³better-for-you²
segment with Grand Light
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, Frozen Yogurt, Fat-Free and No Sugar Added ®a segment
in which we continue to have a leading market share. In recent years we have
successfully introduced brand after brand where our knowledge of the category and the
consumer pointed to opportunity: Whole Fruit Sorbet, Whole Fruit Bars, Homemade,
Dreamery
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, Starbucks
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, Godiva
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and M&M/Mars®each achieved nationwide distribution
and rapidly gained consumer acceptance.
Innovation and direct-store-service work together to build brands. For a case in point,
look at our introduction of Dreamery ®a new brand name, with no existing consumer
recognition ®which we were able to build to 70 percent national grocery distribution
in just 11 weeks. Today our portfolio of superpremium brands, including Dreamery,
Whole Fruit Sorbet, Starbucks and Godiva, holds a 24 percent dollar share of the
segment in the grocery channel. Brand leadership and direct-store-service are not
two separate strategies. They work together ®as mutually reinforcing strengths ®to
build our sales.
R E A P I N G T H E R E WA R D S
We have worked long and hard to build our capabilities. We are now concentrating
on reaping the rewards ®in continued sales increases, of course, but also in higher
margins. While the profit pressure from dairy costs in 2001 was disappointing, we
know that dairy supply has always grown rapidly in this country in response to high
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