R. Chandrasekhar wrote this case under the supervision of Professor Allison Johnson solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.

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In September 2014, Kraft Foods Canada was working on an action plan for Kraft Singles, the company’s brand of processed cheese slices. Although Kraft Singles had thus far been targeted at Canadian families, it now needed to be marketed to a new segment—Canadian millennial moms (born between 1981 and 2000). The company was in the middle of developing a marketing plan aimed at attracting millennial moms.

During the five decades since its launch, Kraft Singles had acquired an iconic status in the foods and beverages industry. An entire generation of consumers, in the developed world in particular, consisting of both baby boomers (those born between 1946 and 1964) and Generation Xers, or Gen Xers, (those born in the years 1965 through 1980), had grown up watching Kraft Singles melting into grilled cheese sandwiches and atop barbecued burgers. Peeling off an individual slice of Kraft Singles cheese and layering it on bread toast was a breakfast ritual in many families. The orange colour and the square shape of each slice and the blue colour of the packaging had remained unchanged over time.

The need to reposition Kraft Singles had arisen because of reasons that were both external and internal. The number of millennials had been progressively increasing in Canada. In 2014, millennials had outnumbered baby boomers and Gen Xers. It was a tipping point. Millennials represented 36.8 per cent of the Canadian workforce in contrast to 33.9 per cent of Gen Xers and 31.1 per cent of baby boomers (see Exhibit 1).

Internally, cheese was an important category for Kraft Canada (and for Kraft Food Group, of which it was part), generating 25 per cent of sales revenue. But overall sales volumes for cheese were falling by approximately 1 per cent every year, while annual sales value was growing at about 2 per cent. The market for unprocessed cheese was expanding, whereas the market for processed cheese was falling. Kraft Singles, a processed cheese product, needed revival. Canada’s per capita consumption of cheese had been static since 2008, at approximately 12 kilograms, which showed signs of market maturity. In contrast, per capita consumption of cheese was 17 kilograms in Europe and 15 kilograms in the United States, which indicated some room for growth in Canada.2

1 This case has been written on the basis of published sources only. The interpretations and perspectives presented in this case are not necessarily those of Kraft Canada Inc. or any of its employees. 2 Government of Canada, “Global Cheese Consumption,” accessed November 13, 2015,




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Kraft Canada was facing three dilemmas. How should it make the brand messaging of Kraft Singles compelling to Canadian millennial moms? What product innovations should the company bring to Kraft Singles, coinciding with the new messaging? How should Kraft Canada ensure that, in pursuing Canadian millennial moms, it would not alienate its traditional customer group—Canadian families?


The Canadian cheese market had sales revenue of CA$3.8 billion3 in 2014. The market was consolidated, with the four largest players holding 84 per cent of the market share. The overall market was led by Saputo, which had nearly 28 per cent market share (see Exhibit 2). While Saputo also led the unprocessed cheese segment (which was growing but was largely undifferentiated), Kraft led the processed cheese segment (which was witnessing slow growth but was sharply differentiated and competitive).4

Cheese was a staple product in Canadian households and in Canadian foodservices. Recently, cheese consumption had undergone some noticeable trends. For example, food consumption outside of meals was had previously trended toward snack food such as chips and snack bars (e.g., candy bars, granola bars). But a growing trend in health-consciousness had led to cheese emerging as a preferred snacking option for young Canadians, who were also inclined to try new flavours. As a result, flavour blends such as jalapeno cheese were becoming popular.

The prices of dairy products in general were regulated in Canada. Manufacturers did not have much room for price increases. To maintain the price point on the shelf, cheese manufacturers were seeking alternatives such as reducing the size of cheese packaging. For example, a 500-gram pack of cheese would gradually be reduced to 460 grams at the same price point. A major trend in packaging was retailers’ demands for exclusive pack sizes, which was intended to avoid the phenomenon of “price matching,” which was growing among competitive retailers for products with the same pack sizes.

In Canada, 99.8 per cent of cheese sales occurred through the store format. Grocery retailers, in particular, accounted for 96.9 per cent of cheese sales. For retailers, cheese was a higher margin business compared with other dairy categories such as milk. As a result, retailers were regularly strengthening their cheese sections. In-store sampling displays were common, and some stores had appointed cheese ambassadors to promote cheese and expand the occasions for its use.


The interpretation of the term millennials differed by geography. In Canada, millennials were considered in 2014 to be in the age group 14 to 33 years, whereas in the United States, they were considered to be in the age group 18 to 34 years. In both countries, however, millennials were not only the single largest demographic cohort but were on the way to their prime years of working and spending. Millennials accounted for 6.3 million people in Canada5 and 68 million in the United States.6

3 $ = CA$ = Canadian dollar; All currency amounts are in CA$, unless otherwise specified; US$1 = CA$1.06 on January 2, 2014. 4 “Cheese in Canada,” Euromonitor International, August 2015. 5 Statistics Canada, “Table 282-0002: Labour Force Survey Estimates, by Sex and Detailed Age Group,” accessed November 15, 2015, 6 “Target: Millennials,” Ad Age, accessed April 28, 2014, id=355.




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Millennials had come of age in an era characterized by disruptive phenomena (e.g., 9/11, protracted wars, and economic downturns) and anti-establishment movements (e.g., Occupy Wall Street and the Arab Spring). Their shopping and consumption habits were influenced by the unique experiences of their time.

A study by Goldman Sachs7 found, for example, that even at the peak of their home-buying years, millennials were reluctant to enter the housing market. Instead, many preferred to live with their parents, postponing both marriage and having children. They were unwilling to take on the burden of ownership of goods and services, giving rise to what was being called a “sharing economy.” They were not brand- conscious, turning to products offering maximum convenience at the lowest cost — such as private-label products. Wellness was an active pursuit. They exercised more, ate smarter, and smoked less than the baby boomers. They avoided soft drinks, candy, and pre-packaged foods, while being receptive to natural foods that promised health.

Millennials were value-conscious, which was evidenced by a study by The NPD Group showing that the dollar store retail channel was attracting millennials. While the brick-and-mortar retail segment saw a 4 per cent decline in store visits during the second quarter of 2014, the dollar store sub-segment saw a 14 per cent increase during the same period. The study attributed the increase to the attraction of millennials to dollar stores for their low prices.8

Food was one category where millennials did not mind spending money. According to the Specialty Food Association, millennials were willing to spend more money than their parents on products such as high- end chocolates, olive oil, and cheese.9

A report by Morgan Stanley in early 2015 showed that the millennials had distinctive food consumption habits,10 including eating out more often. Of all millennials, 53 per cent ate out once a week compared with 43 per cent for the general population. Millennials were also more likely than their parents to patronize eateries that portrayed good social ethics, which explained the popularity among millennials of such socially progressive brands as Starbucks.

Millennials preferred the category of fast casual restaurants (FCR), such as the restaurant chain Chipotle Mexican Grill, which served casual-dining quality food at fast-food speeds. Millennials comprised 51 per cent of FCR customers. The Morgan Stanley report also noted that while millennials also frequented quick service restaurants (QSRs) such as McDonald’s, most were too embarrassed to talk about QSRs with their peers. The millennials’ metrics of healthy food also differed. For example, for millennials, it mattered more that food was “fresh, less processed and with fewer artificial ingredients”11 in contrast to their parents’ tendency to focus on calories. Millennials were prone to snacking throughout the day, which meant that portable food products appealed to them. It also meant that the food products had to satisfy their need for both health and indulgence.

Millennials were a generation that had grown up on technology, but technology was not the be-all and end-all. A survey of millennials by WD Partners, a Canadian grocery retail advisory (which considered millennials to be “grocery’s next generation”), showed that hi-tech ambience meant little for them in a

7 “Millennials Coming of Age,” Goldman Sachs, accessed November 16, 2015, thinking/pages/millennials/index.html. 8 Ibid. 9 Keith Nunes, “Putting Millennials in Perspective,” Food Business News, July 10, 2014, accessed November 15, 2015, 10 Ashley Lutz, “55 Ways Millennials’ Dining Habits Are Different From Their Parents,’” Business Insider, March 25, 2015, accessed November 11, 2015, 11 Ibid.




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store. For millennials, technology meant getting real-time information about things that mattered. For example, while cruising a grocery store aisle displaying farm produce, millennials wanted real-time access to recipes and meal solutions based on the foods they saw in front of them. That was the experience they sought. They did not mind bypassing the convenience provided by a nearby store if, instead they could drive to a store, however far away, that offered the kind of experience they were seeking.12 They also wanted to connect with brands completely, to the extent that the in-store experience with a product was only the beginning. The experience would go beyond the purchase of the product.13

As consumers of social media, millennials were open to sharing personal information with retailers; however, they expected retailers, in turn, to customize their offerings. Millennials wanted to be individually catered to. For example, according to a survey conducted by Aimia, a Canadian company that analyzed marketing and loyalty programs, 53 per cent of millennials cited relevancy of rewards as a top reason for joining a loyalty program, compared with just 32 per cent of older consumers.14

In a 2012 study, The Boston Consulting Group classified millennials into six segments: Hip-ennial, Gadget Guru, Millennial Mom, Clean & Green Millennial, Anti-Millennial, and Old