Great, well I’m excited to get started, and
for everybody who is here, we're excited to have y'all. What we're going to do during this
session today is I’m going to introduce our guest, then we're going to dive into the case and
we're going to give the standard 40 minutes to complete the case. We'll see. We'll see
if we need to go through all of it today. It depends on how much fun we're having. And then
by the end of it, I will have a bunch of notes, and I’ll have some feedback on timing and
structuring, and all the things, and then we'll invite you guys to answer questions. You're
welcome during the case to use the chat bar in case you disconnect, or you need an update
on where we are. Everyone's really good about sharing the information. I don't read
the chat bar as we're going through it, but there's usually a very active chat throughout
the session. So if this is your first case with us, we're excited to have you join us. And all
of the case information is going to be posted on both YouTube and on our podcast, Strategy
Simplified after the session today. I’m really excited to welcome Jesse Wilkinson today. He is a
– well, I’ll let him introduce himself in just a second. But he's going to give us a different
level, a different perspective on the casing process because he of what he has been through.
So Jesse, we're excited to have you. Welcome, and I’ll let you introduce yourself before I
explain what's going to happen inside the case. Hey everyone, Jesse Wilkinson here. Yeah, I guess
a little bit of a different perspective because I’m actually no longer - no longer recruiting.
I’ve already signed a full-time offer to join Bain after graduating from - from my MBA program
in May. But let me tell you a little bit about myself. So I went to undergrad at Brigham
Young University, and after - after graduating, I spent four years working in financial services.
Two working with high net worth clients, individuals, and then two years working in a
very niche industry called clearing and settling. And, you know, as I was working I actually
didn't know very much about consulting, but I was assigned a firm mentor who had hired -
I was running, you know, strategy for the firm and hired a team of consultants. And so I saw
the work that they were doing and I was super intrigued. I wanted more impact
in the work that I was doing given that I saw the work that they were doing. And so I
actually worked backwards and figured out that doing an MBA would be the best way to give
myself a chance to work in that kind of role. And so I’m now at the The Darden School,
second year, so I’ll graduate again in May. And so I’m just a big MC fan, so I just said
what a great opportunity to get a case. I haven't been able to do one for a while since
my second round interview. So glad to be here. Awesome Jesse. We're so happy to have you.
Thanks for the background, and just one point of really important questions. What's your
late night food go to in Charlottesville? My late night food go to. That's a good question.
I don't know. I feel like I should say Cook Out. I won’t judge you if you say Wendy’s. But I know - okay that's fine. That's fine.
You can say Cook Out, yeah. I feel like I should say Cook Out. In Texas
they don't they don't have Cook Out and so it's probably not the greatest food
for me to eat late at night, but it is always open. So that'll be my answer. Okay, awesome. Great. I love it. Well, Jesse,
we're excited to have you. The point is definitely to make this a full rich casing experience, so
if you have a little bit of the jitters back, just like you did before, that's probably
pretty normal. But at the end of the day, our goal is to really just make it a great
educational experience for everybody, so I’m excited to walk through this case with you.
I’m going to introduce the case and I’m going to dive in. I’ll start the timer and get it going. So
our case today is for a company called Candy Co. Really, and, you know, kind of creatively named.
And I’ll give you the background. I’m going to walk through the different sections of the
case. As we're going, I’m going to be timing what's happening inside each of the sections of
the case, and at the end I’m going to give you feedback both by section and then in the time. I’m
going to run this Bain style. Why not. We have two Bainy’s together. So I’m gonna run it in the way
that Bain would run the case, which means that I do have a lot of prescripted things that I need to
have happen, but kind of the order that we do them in is gonna be a little bit up to you depending
on the way you drive it and the questions that you ask. And if you ask me wild questions I
might give wild answers, so no promises that I’m going to stick to the script. Anyhow, let's
have fun and dive into the case. You ready to go? Let's do it. So our client is Candy Co. They're an over
100-year-old US-based candy company that has 25% margins, and have been traditionally focused
on high-end chocolate bars and hard candies. They've grown both organically through
R&D, and by acquisition. A new CEO has just been appointed, and he's
promised Candy Co. shareholders that he will double revenues while
maintaining margins over the next four years. The current revenue is $5.4 billion, and the
CEO has come to us for help. How would you help Candy Co. double its revenues, and do
you have any questions about the background? No, this sounds like a sweet case. That's bad. That's really bad. You know, I guess I might have a couple of
questions. So I’d love to make sure that I just understand a little bit about the company. So
Candy Co., over 100 years old. Basically they're looking to, it sounds like, double revenues
without - without increa, or I’m sorry, without decreasing their margins. Their margins are
currently about 25%. Does that sound about right? That's right. Fantastic. Okay, so a couple of questions
that I have. Doubling revenues is ambitious but exciting. I’m curious. Do we have a set
time frame that we want to achieve this in? Yes. Four years. Four years, okay. Double it
in four years. Fantastic., you know, and this might be something
we can dive into later, but I’m curious if this company sells - you said it's US-based.
Do they sell candy globally currently? They do. Okay. And then I’d like to just understand a bit
about the operations of the company. So, you know, I’m imagining that Candy Co. sources kind of cocoa
beans, sugar from farms and things like that, and then has a sort of manufacturing process
to create this candy. Do they sell to distributors, or do they have their own sort of
storefronts. How does it get to the customers? They only have a few of their
own storefronts. They do have, for example, a local factory where they
have, it's kind of like a, you know, an agritourism or a factory tourism. I’m not sure
exactly what you call that. And then they have a couple of other places in large cities. Like
they have a store in Times Square in New York, for example. But that's not their strategy. Those
are really just more advertising storefronts. Fantastic. Okay. Well, I think that's about
all that I that I need to know for now. If I can take just a couple of minutes to think
about how to approach this we can go from there. Sounds good. Don't leave me hanging. Okay, great. So okay, so Jenny Rae, I think I have an
idea of how I’d like to approach this. Sounds good. So, you know, when
I think about the, you know, how - how is it that we can double revenues,
again it's a pretty ambitious - ambitious task in front of us. But there's - there's
actually four categories that I’d like to look at. And I actually think about
this as sort of a two-by-two matrix. Okay. So the name of the game here is growth.
And so as I see it there are sort of four ways we can grow across two dimensions,
which are customers and products. Now what I mean by that is we could look at number one
selling, selling new products to new customers. Okay. We could look at selling, number two,
new products to our existing customers. Okay. Number three, we could look at selling
existing products to new customers. Okay. Or we could look at selling, number four,
existing products to existing customers. Okay. Now there's different information I’d like
to have in order to know which of these make sense and which ones don't. So under box
number one, new customers to new products, I’d love to understand which countries or which
regions that we typically sell in. Are there territories that we've not yet penetrated.
Secondly, I’d want to think about what new products might make sense that we could develop.
It sounds like we do a lot of chocolate bars and hard candies, so are there chewy candies
that we could look into - look into building. I love chewy candies. Yes, me too. So maybe there's some
capital expenditures that would be necessary to do something like that,
but it’s certainly worth looking into. Okay. Number two, existing - I’m sorry, new products
for existing customers. Again, I’d be interested in understanding a little bit about, you know,
what are the new types of products that we could develop. For this I’d be interested in looking
into like a survey of our customers to understand, you know, what is it that they might be interested
in, what types of products that might make sense because as their existing customers, we might have
data on some of their preferences. There might be some other things we could develop. Maybe we could
move into something like drinks. It's not likely, but it might be worth - worth exploring.
Number three, we're talking about looking into, you know, our existing products for new - for new
customers. Another thing we'd want to understand in addition to the ones that listed before
would be what are the distribution channels that we currently use. Maybe thinking about if we
sell online, or, you know, how much we actually sell in our - in our - in our stores versus
distributing to retailers, and understand maybe what would the distribution channels be that
are used in in some of the other countries that we - or regions that we're thinking about
entering. And fourth, I’d be - if we're talking about new - or I’m sorry, existing products to
existing customers, I think there we’d really want to look at a marketing strategy.
So we might look at where are we - the ways that we currently market. And we might also
benchmark that versus competitors, or, you know, maybe even adjacent industries to understand
what are some new ways that we could market. Or maybe it's even just a fact a matter of hey,
should we just pour more money into marketing. So, you know, I think that the most interesting,
or the place I’d love to start would actually be thinking about developing new products
for our existing customers. Jenny Rae, do you have any data on any new candies that
the R&D team has thought about creating? So, you know, what I do have
some data on that. Interestingly, right now the R&D team doesn't feel
like they have any capacity to do anything in terms of new verticals, so they're
open to using exactly the same products that we have, but they have basically no
new vertical capacity at the moment. Okay yep. Makes sense. Okay,
so we will just sort of cross off here the new product section
and we'll look into the existing products. Okay. So if that's the case, let's look at first selling our existing products
more to our existing - existing customers. Okay. Do we have any information on like
our current marketing strategies? Yeah. Well tell me tell me what kind of changes
we could make. Maybe we can talk about that, right? But what would we do differently with our customers in order to drive more
revenue from that segment right now. Yeah, that's a good question.
So the question here is really how could we how can we drive more revenue
from our existing - existing customers, right? That's right, yep. Yeah, so there's a couple things
I’m thinking about the first one is we could - we could - we could get our
customers to buy more candy every time that they that they go to make a purchase. So it's
more, you know, more units per purchase. Or we could talk about getting our
customers to buy more frequently. Anything else? So let's see. I think that
those more units per purchase, more frequently. We could certainly think about
increasing the price of our - of our candies, which would - would do more to generate more
dollars per sale, but without selling more units. Tell me what the pros and cons
are of each of those strategies. Yeah, okay so let's talk about the pros
first. So the pros of more units per purchase. Yeah, I think that that might be the easiest to
do. I think that we could offer - you can imagine maybe at a grocery store asking for promotions,
or more - more beneficial placement of products within a store would be an easy way to get
our customers to buy more units. We could also think about bundling. And so those are things
that I think would be very easy- easy to do. For the cons, I get there's a - there's potential
that our customers shop less frequently if they buy more units per purchase. Maybe you get a
tummy ache and don't want to buy candy again. So they kind of - they buy in bulk but they - they
go on a diet afterwards or something like that. Exactly. Exactly, yeah. That would be
- that would be maybe a potential risk. Yo-yo dieting. Exactly, right. So when we think
about purchasing more frequently some of the pros there, you know, if our
customers are buying the same - the same quantity per purchase, that feels like the - that feels
like the best lever to re - to like drastically increase our revenues. And so maybe
I’d say a larger - larger impact if we can if we can pull that lever to get
our customers to buy more frequently. Okay. Some of the cons. You see more upside there basically,
right? If that’s what you’re saying? Yes, exactly. Okay. Yeah, exactly. So How are we gonna do it? How do we get
them to buy more frequently Jesse? So, you know, I think you could make them more
available, so that would be distributing within - within more channels. You know, I’m trying
to think about a way to create some sort of loyalty program. I’ve never seen one before with
candy, but there's a there's a first time for everything. Maybe there's - maybe we
create a some sort of game with prizes based on how much you buy candy, sort
of a Willy Wonka approach, if you will. Yeah. I feel like there used to be something
like that when I was a kid where you had to collect like different letters inside candy boxes, and then they spelled stuff and you could
redeem them for prizes or something like that. Okay, there you go. So maybe we
bring - maybe we bring that back. Okay, okay. So I’m trying to think about some of the cons for
getting our customers to purchase more frequently. It's basically the opposite or the inverse of more
units per purchase. Maybe if I’m - if, you know, I used to buy two candy bars every time I go. Maybe
if I’m - I'm buying more frequently only by one. So that's maybe the risk. And then increasing
price is very interesting. We of course would have to understand what the likelihood is to
continue buying at the same levels. But I do think that this is usually like a small portion
of somebody's, you know, kind of spend on a monthly basis and so this might be another lever
that's pretty easy to pull. Now the downside, you know, we're not gonna double our revenues by
increasing the price alone. I find - I think it's very unlikely that we could, you know, change
all of our candy bars prices from two dollars to four dollars. And so if I was going to pick,
I would be interested in looking at, you know, I see think more - more frequently has
more upside. I’d actually like to look at selling more units per purchase first
because of how easy it is to do, and then maybe we could look at selling more frequently
if that doesn't get us to where we want to be. Okay, great. Well, I did mention before
that we have these kind of two segments and we've done some price analysis on the bars
segment, so I have some data to show you here. Great. See if I can get this up in a way that is elegant. There we go. Tell me what you see here. Okay. So US chocolate bar prices, it
looks like we have the price per bar. Oh, interesting. And this looks like it's - there
are maybe five competitors compared to Candy Co., and it gives us their prices. Is this
- that's what it seems like to me. Yep. And the the thing that's glaring
to me right off the bat is that we're pricing our candy bars at $2.24 compared
to, you know, the highest price of$2.30. So it seems like from first glance there's
definitely an opportunity to raise prices. Now that may not get us all the way to doubling
our revenues, but it would be a great start. I’d be interested in understanding what this would
do to our total revenues. I guess I would need some information on how many candy bars
we’re selling, and we could think about where we could increase the price and what
that would do to our overall revenues. Okay that sounds good. Now I’m going to leave
this up for a second because I have some more data that I want to share with you, and
so I’ll leave that up for just a minute. I’ve got some data on the current breakdown
of the market, and that might - that might help us a little bit. So chocolate bars are 75% of
revenue, and the hard candies are 25% of revenue. Our chocolate bar segment is growing at 4% per
year and hard candies are growing at 12% per year. Okay, great. What we're trying to figure out is between
organic growth and this potential price increase, which we estimate, you know, and I’d be interested
in your thoughts on this, but we estimate that it's probably not significant enough of
an increase to drive a major volume drop. That between the two of those, we're curious
how far that gets us to our goal posts. Okay, that's great. So let's see that
basically what we want to know here is what's the total, you know,
what's the total increase in probably on a percentage basis because we don't
have total revenues. But what's the - what's the increase in our revenues based on potentially
raising prices plus the growth of the market. Yeah, I did give you revenues actually
at the beginning, do you remember? Oh yes, you did. I’m sorry. So $5.4 billion
actually, so that's - that's great. $5.4 billion. Okay, perfect. So kind of what's the
- what's the increase in revenue. So I’m imagining that - one question I have. I’m
imagining that we would raise our prices now and so we would capture that that that price increase
for, you know, all the future years of the of the market growth. Is that sound right? That's right. Do you want
to do it every year though? I mean do you want to - do you want to
make the calculation every year or you're just assuming that that - that that
difference is going to be active. Yeah, I just wanted to make
sure that, for example, we weren't going to raise the price by $.02
now and $.02 next year, or anything like that. Let's just assume that we're gonna raise it
to whatever level on this chart you think is reasonable, and then calculate for me
with that what difference that makes. So I think, first glance it looks like $2.28 makes
sense. It seems like it's a close to the average price increase. And so if we wanted to figure out
what the - what the increase in revenue would be, basically what we want to know is, you know,
let's assume that the hard candies don't - we're not going to change the price there. So
we want to know what the - what the increase in revenues will be for hard candies, plus
the increase in revenue from chocolate bars. Okay. And really what we want to know is basically how
many - how many units will we sell, multiplied by the what this new price would be is, you know,
$2.28. We could actually do it by $.04 per, well no, let's calculate the
whole amount. So let’s start - We could calculate the whole amount,
but let's do it by percentage. Let's do by percentage? Okay, great. So
what we want to do is let's start with - we'll start with the hard candies because
we're not going to change the price at all. Sounds good. So hard candies we know are,
you might want to start with the dollar figure and give you the percentage
afterwards. What do you think about that? Okay. Okay. So we have 5.4 and 25% of 5.4 billion is,
let's see, 2.7 divided by 2 which is 1.35 billion, which is year one. And what we're going
to do is we're going to multiply - we're going to multiply this by 1.12 times
1.12 plus - times 1.12. And we want to know what the revenue would be in year four
as opposed to like over the four years, right? Yeah, we just need to know the end number. Perfect. Okay, so let's do
this. I'm gonna multiply 1.35. Okay, so in year two we'd sell about 1.512 can
I round that to 1.5 or should we be more exact? No that's fine. I think 1.5 should be fine. Okay, so then in year three, that will end will increase an increase of
.18 billion. I think 0.15 and then 2 percent, yeah, so 0.18. So 1.68 times 1.12, so it should increase by .336.
So we have 1.68 plus 0.34 will take us to about $2 billion
in hard candies. That is a - well I guess we'll do it - we'll do a percent
increase on the total revenue. So we should be - That gets us to year three. We need year four. Ah, that was year - okay, that
was year three. Okay, so then Assuming that we're in year zero basically now. Oh right, right, yes. So in year four, we
would just increase by 12%, which would be 0.24. So two and a quarter billion basically
would be our revenue for hard candies in year four. Now for - oh sorry. Okay, so now for
chocolate. Let's see. Let's figure out - so we're going to increase by $.04. Well, let's - let's
do - we're going to start at 75% of 5.4 billion which is 5.4 minus 1.35, which is -
it's 4.05 billion is our starting point. That's year zero, not year - not
year four. And we'll say 4.05 year one, that's going to be 0.405 plus
about 0.08, if it's all right if I round. So we're going to be a point - it's going to
go up by about 0.49, so about 4.55 in year one. Tell me how you got that one again, just to let
me just make sure we're using the right numbers. Yeah, so ten percent of 4.05
billion is 0.405 billion. I gotcha. It's four percent growth. I think that. That's right. It was 12% was for the hard candies. Yes. Okay, all right. Let's do four percent here.
So 4.05 times 1.04. So we're going to have one percent of that as .0405 times four is going to
be about 0.16 billion. So we'll go from 4.05 to 4. to about 4.2 billion from 4.2, increase at
four percent is going to be 0.042 times four so it's going to be 0.168 about 0.17 billion would
be the increase. So 4. about 4.37 for year two. 4.37 times four percent. 0.175 basically it will be the increase. So
4.37 4.44, about 4.5 billion in year three. And then in year four we'll see 4.5 time - and one
percent of that is .045 and we multiply that by four. So that would be 0.18. So 4.68 billion. Now
what we want to do here is we want to add these together and then figure out the percentage
change from year 0. So we have 2.25 plus I don't actually need that necessarily. I mean you could tell me why you want to
do it, but I don't know that I need that. Oh, okay. So I guess what we can look at then is
what's the what's the total increase in revenue right? So 2.25 plus 4.68, that gives - is going
to give us 6.8, about 6.9 billion. 6.93 billion will be the will be the new revenue
in in year four. Now that's great, still short of our - of our doubling the revenue
goal, but it is an easy lever that, like we said, will not likely cause a decrease in the total
- in the total number of units, right? And so if we could do that, we still have the option to
look at these other levers of, you know, bundling or looking at other more units per purchase,
or getting customers to buy more frequently. We actually haven't factored in the price change
yet though. How are we going to factor that in? You're right. So that actually needs to - that
actually needs to increase by - so it's 4.68 billion, plus, or multiplied by the percentage
increase in the price. So we said from 2.24 and then $.04 is - it's a pretty small percentage.
Let's see here. So $.02 is about one percent, so it's about a two percent increase in the
price. Let me double check that. So $2.24, ten percent is $.24 cents, so it's, yeah,
about two and a quarter cents is one percent. And so that means, yeah, to go to four cents is
a little under two percent increase in the price. And two percent is fine. So okay, so let's just do the 4.68 and
we'll increase that by two percent. So it's .0936. So that takes us
to basically $4.77 billion. So what we want here is to look at the 4.77 plus
the 2.25 takes us to a right around $7 billion. So look, so seven so seven billion -
does that sound right to you, Jenny Rae? Sounds pretty good. Okay, great. So $7 billion, again,
that's great. Now it looks like the, you know, the increase in price is a - is a
very - it's like it's a pretty small lever, right, because we're really what we're doing is
we're - we're getting about two percent on 75% growth from that. And all the rest of it comes
from the from the market growth. So look I say no downside, no not real downside in doing it,
but doesn't really get us where we need to go. Would you push price anymore? Yeah, you know, I think, yeah, I think there's an argument that you could
increase the price some more. And I’m thinking about that like if I - if I’m walking into the
gas station, I don't really compare the difference between two cents between the candy bar that I
like and the one that I don't. So maybe it would make sense to increase it another two cents.
That would change it from - it would basically double from .094 billion to 0.18 million. So it
would basically take us to 7 – 7.1, $7.2 billion. And again, like you said, it doesn't get us all
the way there, but I don't know that there is downside to doing that like you mentioned. There
probably isn't a lot of elasticity around it. Okay, great. Well, we've looked
at a couple of different things, and I think we've got time to look at one
more. What else would you want to look at here? So let's look at let's look at increasing
the number of units per purchase for our customers. I think that that
makes - I think that makes the most sense again because it's easier, even
if it doesn't have quite as much upside. Okay. I like that too. I want to look at doing
it internationally in particular because I think there may be some opportunity there. So I’ve
got some data about some international markets, especially because the U.S. market is pretty
set in their ways in terms of the candies that they like and the things that they - they want.
But there are some new emerging markets that are pretty interesting for us. We're going to look
at China, other Asia and Europe. And I’ll give you some data. Just the total size of the Chinese
market is 2.2 billion in terms of chocolate and hard candy, the segments that we're in right now.
And then the total size of the other Asian market, so non-China Asian markets, 4.5 billion. And
so based on this chart that I’m gonna put up on the screen now, I’m curious what you see as an
opportunity potentially in those markets for us. Absolutely. And just one clarifier. These 2.2
billion and 4.5 billion that's in dollars, right? That is, yeah. Okay perfect. Okay, so let's take a look. This
chart is the worldwide market share. Okay, so it gives us our market share compared
to competitors in these other markets. Looks like Candy Co. has an enormous
market share in the U.S. And about 45% market share in Europe. So it actually makes me
think that there may be opportunities in other markets where we're not as established.
Primarily I like the other the other Asia market. It looks like it's very fragmented. There
are three, four, five, six, seven competitors and all of them have - it looks like the largest of
them has about 25% market share. So I think that there's an opportunity for us to penetrate
there, plus the fact that it's double the size of the China market. So that'd be the
first place that I’d - that I’d like to look. What would you do? How did you enter the market,
or how do you push growth in that market? Yeah, that's a good question. So I think the
first thing I’d do is benchmark the way that we are distributing and marketing any other Asian
markets compared to these competitors. I’d be especially interested to understand a little bit
about competitor four and five because they don't have a ton of market share in the in these other
three markets we've mentioned, but they seem to do very well in other Asia. And so I’d be curious
if they're doing something differently than the - than the other competitors would be. So
I’d love to look at what they're doing first. Sounds good. I don't have any more data
about those companies in particular, but I do have some potential options for
companies that we could acquire. Oh, great. And so one of the companies, there are two –
there are two companies for sale right now. I mean we could obviously acquire potentially other
ones, but there are two that are for sale. One is a nut and snack bar company with strong brand
equity and a distribution system in China. The second is a small gummy company in Europe. Should we acquire one, should we
acquire both, should we acquire neither, and why would either one of those
either be a good fit or not a good fit. So let's talk about - maybe we could
talk about some of the pros and cons of each and then figure out which one
things we think makes the most sense. Okay. So I think the natural snack
bar distribution system company, the benefits there would be mainly that
they have this distribution system in place, which means that we don't have to spend a
bunch of money, remember we're concerned about margins here, so we don't have to spend a bunch
of money to establish these distribution channels. And so that we might be able to continue to
operate that as it's - as its own business. Now the downsides there is it doesn't seem to fit
with our brand. It doesn't really fit with kind of our core capabilities, and so we'd have to think
about building out maybe future R&D capabilities if we ever wanted to move those snack products
over to some of the other markets. So I’m a little bit less interest - interested in the nut and
snack bar company. Now the small gummy company. I love gummies. Yes and I think you said the small
gummy company was in Europe, right? Mm hmm.. Okay. I love gummy bears, so that that's one point
for the small gummy company. So the benefits. The main one is this fits in really nicely
with kind of our brand as far - as far as I can understand it. We have the hard candies, we have
the chocolates, and so gummies would be another candy you might think of at Halloween or
other occasions where I think we'd sell a lot of our candy. And so I think that
for that reason it makes - it make sense. Some of the downsides, not a ton of - not a ton
of brand recognition for the small gummy company. The benefit there that we have brand recognition,
at least in some of these markets. And so I think that we, given our ability to brand, looks like
we, you know, we're 100 years old so that this name is going to carry some weight. And so I think
that we could potentially offset the - kind of the downsides of that small brand. So my first look
would be to look at the small gummy company. Now we - there would certainly be
questions about what's the price and some of those other things, but that would
be what I’d first be interested in looking at. Okay, great. Well, we've run out of time and
we need an update for the CEO. So based on everything that we've talked about so far,
what do you think our potential options are. And do you think that we're going to
be able to get him to the $5.4 billion. Yeah, so if you can give me just a second. So
really what we're looking at here is could we double the revenues within the next four years.
Right now it looks like we won't be able to. Now there's a couple things that we can do that I
think would make sense to get us close or on our way. Number one, we should raise the price from
$2.24 to $2.30 of our - of our chocolate candies. Number two, we should look at acquiring the small
gummy company in Europe. And then number three, I guess the third thing that will help us
to get there is just going to be the growth of the market over the next over the next four
years in both hard candies and in chocolates. Some of the concerns, you know we didn't - we
didn't actually have a chance to look at the some of the other options, for example, getting
our customers to buy more frequently, and there may be opportunities as we mentioned in selling
to, creating kind of new products organically that may be more attractive. But I do think that
the first step we should take is figuring out what's the price for this small gummy company
and would it really make sense to acquire it. Okay, great. Thanks, Jesse. You can relax now. All right. What do you think?
Is it just like riding a bike? No, it's a lot it's harder than I remember. I when
I listen to the podcast, I always think, oh yeah okay. Easy. Exactly. And so, you know, it was it
was definitely - it was definitely a lot of fun. You know, I’ve definitely missed
casing. The math I needed to - it took me a minute to get caught up.
But overall I think it was okay. I’m not sure if I would give me a job offer.
Fortunately, fortunately I already have one. Suckers, yeah totally. Exactly. What did you think? I thought it was really good. Let me - let me just
highlight a number of things as we go through it really quickly. First of all, I’ll talk about just
the soft stuff, right? You are clearly enjoying yourself and not stressed by the times that I
had you go back and do something and reconsider something. You were very go with the flow. But you
remained quite structured, so when I said hey, you know, we need to go back and factor in the price
increase, not perfect that you forgot it, but at the same time it wasn't hard for you to loop back
in to where you were. It didn't make you get lost or fluster you. Also we kind of had, you know,
some running joking going on in the side. And that's - that's really can't be underestimated if
overall I’m evaluating whether or not I think you can do it, and I think you'd like doing it, and
I think I’d like having you do it, right, I think that - I think that overall like your pure delight
in going through the case was really good. And you had a couple of common mechanisms, especially
in the creative brainstorming, that I thought were really good. And I would be curious just to
- I wanted to poke on you and just ask what you were writing down. But you were you really quickly
kind of broke down, you know, here are the three things that make sense, here are the core focuses
of these areas that you want to highlight. And I just thought you did a really good job of,
you know, kind of making sure that you were going methodically through a lot of the questions
that I asked instead of shooting from the hip. And so like overall, I thought that's - I think
that smoothed out some of the bumps that were there in other places inside the case. So
let me just run through it. First of all, two minutes and 49 seconds to open the case
with your clarifying questions. The two - the guidance that we give is that you should ask two
kinds of questions about the business problem and the business model, so you nailed it. You kind of
doubly confirmed, right, you know, how many years, right, what, you know, making sure that you had
the revenue. I don't - you didn't tie that into the rest of the case, but again, that was a that
was a bump but not a major diversion. And then do we sell globally, what are the ops of the company,
right. So those kinds of questions are exactly what I’m looking for from a great candidate
at the beginning. And I really did feel like you had a pretty strong sense of how we - where
we needed to go and how we needed to get there. Your structure took you about two and a half
minutes. When you first described it, I felt like whereas normally the overview at the
beginning would make so much sense, it took us such a long time. It took about half
a minute to go through just like this, this is my matrix and this is my 2x2. And I like - I like how
you had thought about, that but I actually thought about afterwards that you could have just gone
through that and said like I have four categories, right. And so I started writing down the two by
two and then I realized that you were naming your categories. But I didn't realize it until later.
So I think if you had just maybe communicated that a little bit more clearly, that would be
good. We lost your audio for a second. I think There we go, can you hear me now? Yeah. Makes sense. And then, you know, we kind of went into a number
of different sections of the case. There wasn't anything that you took longer than four minutes to
do, math or creative wise. And I pushed a number of different things for you. So the first was like
how do we get revenues from existing customers, so I really pushed you on that one. And then I was
- you probably felt it but I was gonna what else you until you got that price increase option.
But you snuck that in there pretty quickly, so you did all right on that. And then, you
know, on the price increase, we got there but I was kind of curious as to why - I would have
wanted you really quickly to realize that that extra two cents of gap would have doubled the
increment pretty quickly and so, you know, so you hedged that one and I pushed you on it and
you were like, oh yeah, like why not. And also it makes a big difference in terms of that
particular piece. When you went through the math, the math was not completely flawless. There -
like there was one time that you did the 12% that it was that it ended up a little bit off.
I decided to let it go because I was what I was thinking about was my judgment was you could
do the math. You laid it out really clearly. I didn't have any issues with you like not being
able to multiply like that really weird number by 12%. And so I just was like, yeah, we're going to
be close and it didn't change the answer either, right. The answer was we're not going to get
there. And there's really nothing that we looked at where we would get there. My final point,
just so that everybody knows, there one way that I would have pushed you if we were coaching and
you were doing cases this weekend or, you know, some other time coming out soon, would have just
been I felt like the running commentary versus the goal could have been a little stronger. So
we had 5.4 billion that we needed to get to, and kind of keeping a running tally of
like okay, that gets us this far. This is the - this is the delta. And then like here's a
little bit more, and here's the delta for that. Like you were - I didn't know at the end when
you concluded that you were gonna have such a strong response and be so clear about the fact
that we weren't gonna get there because I didn't hear that as a running commentary throughout the
case. And so if you had it, like for example, in the China and other Asian markets, when it gave
you those market sizes the total of those markets was 6.7. Like we would have had to have major
market share in those markets to close the gap, right. And so this is, you know, I’m trying to
box you into a corner and at the end we were just like yeah, we can't get there. But I wanted a
little bit more digging on a few of those areas to try to figure out like what would it take in this
market. Okay, we can't get all the way there here, so we have to add that to the list but we're gonna
have to go back and find some other options. And that's really this what – this is Hershey that's
basically like what they've had to do is take like a super multi-pronged approach to try to target
some of the different changes that they need. Awesome. Yeah, I hope that you enjoyed it,
and again thank you so much for that. So at this point I’ll turn it
over to other folks for questions.
