Business Strategy for Emerging Entrepreneurs

EY Background
EY is a global leader in Assurance, Consulting, Strategy and Transactions, and Tax services. The insights and quality
services we deliver help build trust and confidence in the capital markets and in economies the world over. We
develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a
critical role in building a better working world for our people, for our clients, and for our communities. Today the
company employs over 284,000 people and operates in over 150 countries, with revenues of over $49B for the year
ended June 30, 2023.

In a world that’s changing faster than ever, our purpose of building a better working world acts as our ‘North Star’
guiding our more than 300,000 people — providing the context and meaning for the work we do every day. We help
digital pioneers fight data piracy; guide governments through cash-flow crises; unlock new medical treatments with
data analytics; and pursue high quality audits to build trust in financial markets and business. In other words, we work
with entrepreneurs, companies, and entire countries to solve their most pressing challenges.

Through our four integrated service lines — Assurance, Consulting, Strategy and Transactions, and Tax — and our
deep sector knowledge, we help our clients to capitalize on new opportunities and assess and manage risk to deliver
responsible growth. Our high-performing, multidisciplinary teams help them fulfill regulatory requirements, keep
investors informed and meet stakeholder needs.

We believe a better working world is one where economic growth is sustainable and inclusive. We work continuously
to improve the quality of all our services, investing in our people and innovation. We’re proud to work with others –
from our clients to wider stakeholders – to use our knowledge, skills, and experience to help fulfill our purpose and
create positive change.

EY is particularly focused on supporting entrepreneurs, education, and companies in emerging markets as part of
building a better working world. All three can contribute to sustainable economic and social growth. At EY, our
employees have the opportunity to foster the sustainable growth of their careers, their clients and the communities
in which they live and work.

Entrepreneurs make a difference. They not only have great ideas, but also the drive to make them a reality. They use
their fresh thinking and hard work to create positive social change – bringing new concepts and products to market
and creating jobs and wealth - to improve the quality of life in their communities and countries elsewhere around
the world. EY’s commitment to entrepreneurial companies, in both emerging and developed economies around the
world, helps ensure that we are working with more of tomorrow’s global leaders today. While certain portions of this
case are illustrative, the case provides a real example of the everyday questions and challenges faced by
entrepreneurs. As a result, the case should provide you with several examples of the types of problems EY helps
companies think through and solve.

Good luck and have fun!

Bill Knerr Ryan W. Butman Alyssa Curl

Assurance Partner Transaction Partner Lead Recruiter
IU Campus Coordinating Partner EOY Midwest Director IU Campus Relationship Manager
Dan O’s Seasoning Background

Dan-O's Seasoning embodies the American Dream. The company, hailing from Louisville, KY, was founded by Dan
Oliver, an average guy with an extraordinary passion for cooking. Originally a bartender, Dan's enthusiasm led him to
devise a unique spice blend that friends insisted he should sell. From humble beginnings promoting his product at
trade shows and local venues, Dan successfully cultivated a business that resonates with 'freestyle' cooks: people who
enjoy culinary experimentation but don't necessarily aspire to be gourmet chefs1.

What sets Dan-O's apart is a marketing strategy for a youthful demographic traditionally overlooked in the spice
market. Dan-O’s has nurtured a community of loyal followers over time via key social media platforms like Facebook,
TikTok, and Instagram, racking up 7 million followers and approximately 100 to 150 million views every month across
these platforms2. On these channels, the Dan-O’s social media team actively creates and shares various recipes,
appealing to a wide range of customers and dietary preferences.

Dan-O’s success also stems from forging strategic partnerships with a rolodex of influencers who resonate with the
customer base such as Jackie Hartlaub and QCP. While grilling has traditionally been a significant use for the product,
the brand enjoys robust year-round sales, peaking during the early summer, fall tailgating season, and holiday period
when home cooking is more popular.

Part of the company’s rapid growth has come because of successful expansion in the grocery sector, enabling Dan-O’s
products to be sold at Kroger, Safeway, Publix, and Good Foods Co-op. In 2022, Dan-O's marked its highest product
movement at Walmart, now available in over 4,000 locations3. Dan-O's has concentrated its growth strategies on
expanding its footprint in the southeast U.S., staying true to its roots while aspiring for continued growth.

The popularity of Dan-O’s spices has led to multiple proposals for product collaborations, including co-developing pre-
spiced hamburgers for Walmart, and partnering with well-known snack brands on flavored snacks.

Among its competitors like McCormick, Old Bay Seasoning, and Kinder’s, Dan-O's stands out with its more youthful
brand and focus on product innovation and healthier alternatives due to the lower sugar and salt content4.

In the past, Dan-O's has successfully built strong brand-customer relationships by partnering with entities like the
OVW wrestling association, NFL, and NASCAR, infusing a 'cool' factor into the brand identity. While these partnerships
have helped develop a strong base of followers, the customer base has grown exponentially with the product’s
widespread availability. Dan-O’s wants to be sure to speak to everyone who loves the product.

Situational Analysis
According to The Business Research Company, the global seasoning and dressing market has seen steady growth,
increasing from $156.5 billion in 2022 to $170.17 billion in 2023 at a compound annual growth rate (CAGR) of 8.7% 5.
Despite global economic disruption due to the Russia-Ukraine war, this market is projected to further grow to
$227.99 billion by 2027 with a CAGR of 7.6%.

However, the market also faces challenges, primarily from unique consumer buying patterns. Unlike typical weekly
staples such as fresh produce, dairy, or bread, spices are not frequently on the weekly shopping list. Consumers tend
to buy spices only a few times a year, as they last longer and are used sparingly. This pattern significantly reduces
the frequency of spice purchases, resulting in fewer sales compared to other grocery items. Furthermore, consumers
tend to stock up on spices and use them over an extended period, creating long gaps between purchases. These
buying habits can lead to uneven sales distribution throughout the year and unpredictable demand, making
inventory management a challenge for retailers in the spice market.

The market is comprised of major players like Archer-Daniels-Midland Company (ADM), Unilever plc, The Kraft Heinz
Company, McCormick & Company, KIKKOMAN CORPORATION, and others6, but also includes agile smaller
companies like Tajin, Kinder’s, and This Little Goat.

The flavor market segmentation includes multiple types of taste bud enhancement including seasoning and dressing,
variety of distribution channels: supermarkets/hypermarkets, convenience stores, E-Commerce, and others, and a
multitude of applications including meat & poultry products, snacks & convenience food, soups, sauces, and
dressings, bakery & confectionery, frozen products, beverages, and others.

Given this backdrop, Dan-O's Seasoning finds itself in a rapidly evolving market with buoyant growth projections.
With companies like Dan-O's poised at the intersection of this growth and technological innovation, the
opportunities for expansion, product diversification, and tapping into a broader customer base seem abundant.
However, the company also faces the challenge of standing out in an increasingly competitive market dominated by
large-scale players. Therefore, strategic planning, efficient operations, and innovative marketing initiatives are
crucial for Dan-O's sustained success.

Application to Dan-O’s Seasoning

Dan-O’s expansion poses an intriguing question: how can they better reach a new, extended base of consumers and
enhance unit sales?

Dan-O's strengths lie in the company’s high-quality product and mastery at creating demand through potent
marketing, especially leveraging the social media boom during COVID 7. However, as competition in these channels
stiffens, scaling up and category acquisition pose challenges.

Despite the large competition in shelf-space at brick-and-mortar locations, the company has made considerable
strides in brand expansion and consumer appeal through a strong intuition-driven approach. Dan-O’s successfully
negotiated placements in over 4,000 Wal-Mart locations in early 2022. With visibility in national and regional chains,
as well as unconventional platforms like the grilling section at Lowe's, Dan-O's has tapped into an extensive consumer
market. Aiming to disrupt the seasoning category, the company has been tactfully experimenting to understand the
behavior and preferences of its customer base, which is growing in diversity as well as in numbers.

Further, the company faces a significant marketing hurdle: despite achieving 100 million views per month through
loyal social media followers, there were only two million active shoppers in the past year. Dan-O’s needs to be sure
they are engaging the right target customer and closing the gap between customer awareness and purchasing. A key
dilemma is maintaining authenticity to keep currently loyal customers with the desired expansion. The company
prides itself on being a brand with a compelling backstory, helping people connect on a personal level, further driving
its appeal8.

Another challenge for Dan-O’s: seasonings are typically bought once a year as opposed to sauces and other products
in this general area. Exploring diversification, Dan-O's has considered product expansion into categories like sauces,
dips, and marinades. Other opportunities could include placement in other aisles (besides the spice aisles) of stores,
and collaboration with other companies/products to increase awareness. Determining the optimal time to take
these approaches while remaining focused on core product sales is yet another strategic challenge.
With a financial goal of reaching $100 million in seasoning category sales by 2026, and a marketing goal of
quadrupling household penetration to 6.4 percent in the next 34 months, Dan-O's is aggressively pursuing growth.

Despite these hurdles, the Dan-O's team embraces the exciting and less-corporate nature of working in an innovative,
consumer-driven business, bringing an element of fun to work. With an intricate mix of challenges and opportunities,
the Dan-O's Seasoning case presents a case study into strategic growth, brand authenticity, and customer engagement
in a rapidly scaling start-up.
Project Question
As Dan-O's experiences a period of steady growth following its substantial brand expansion over the past three years,
it presents an opportunity for the company to explore new strategies and focus on fresh initiatives. Given their goal
to increase their conversion rates among their loyal social media followers and the aspiration to expand their product
range, some of the questions to help guide your analysis to help the client are the founders might consider are:

• What strategies can Dan-O's implement to motivate its already strong community of social media
followers and website visitors to transition from passive observers to active purchasers of its products?

• In view of potential competition from smaller businesses offering comparable products at cheaper
prices, innovative new products (such as sauces, marinades, dips, and snacks), partnerships with other
companies, and creative placements in new aisles and outlets, what tactics can Dan-O's employ to
maintain its uniqueness and competitiveness in the market? How can it ensure this wider product range
aligns with its core value of healthiness and won't dilute the brand identity?

• Who is the most likely new customer for Dan-O's spices as it continues to expand its range while
maintaining its core values of healthiness and creative yet accessible cooking? How can Dan-O’s reach
this new customer and gain their loyalty without alienating its current base?

Getting Started: Before making a recommendation, be sure to:

1. Develop a full understanding of the client's brand and current strategies. (Read the client’s website, posts
on social media, and articles about the client and attend the Q&A.)

2. Fully research the client’s business environment using the following areas as a guide:
a. Who: Who is the ideal extended target customer of Dan-O’s Seasoning as it continues to diversify
its customer base What generation, income-level, lifestyle, and other attributes are associated with
that customer? How does Dan-O’s reach this customer? What are the best channels? What kind
of messaging and/or initiatives resonate with this group and would make this group feel welcome
and understood? What are the obstacles to reaching/securing purchases from this group? How
could Dan-O’s overcome the obstacles?
b. Where: Which new geographic locations and/or new outlets would work with Dan-O's brand,
product, and customer? Which specific initiatives would be the most effective and cost-effective
match for this customer and area?
c. Product: What type of products and product segments consistent with Dan-O’s brand and offerings
are seeing increased demand? Which products or product segments could blend seamlessly with
Dan-O's current or ideal brand and style of operations? What type of placement within stores
would help Dan-O’'s attract the attention of new consumers?
d. Customer experience: What interactions should Dan-O’s Seasoning offer to build recognition
and/or enhance the customer experience? What experiences/events/programs outside of current
channels should it pursue? What are the current trends in this industry?
e. Competitors: As Dan-O’s Seasoning expands its focus the industry and the company will gain new
competitors. Who should Dan-O’s benchmark itself against? What can they learn from these
competitors?

Project Parameters
Develop and effectively communicate a clear strategic differentiation plan that will help Dan-O’s Seasoning drive a
sustainable competitive advantage across the flavor enhancement category and everyday seasoning market, keeping
in mind the current scale of the company. The reviewers of your project are Dan-O’s Seasoning executives and
management, as well as EY representatives. IU students will act as an EY project team who develops a
recommendation report for the client company, Dan-O’s Seasoning.

Support and defend recommendations with key benefits to justify the “why” of the recommendation.

Out-of-Scope Topic: In-Depth Financial Analysis

While EY and Dan-O’s Seasoning acknowledge that an in-depth financial analysis would normally be a critical
component of a business recommendation, it is considered out-of-scope for the purposes of this case. The course
curriculum focuses on the presentation of a strategic idea. Dan-O’s Seasoning and EY representatives will assess the
idea itself, the evidence for why it is the best option, the logistics of implementing it, and how it is presented in the
written report and live presentations.
References

1
Adams, Kirby. “‘It’s Dantastic!’: How a Louisville Man Built Dan-O’s Seasoning into a Viral Sensation.” Journal,
Louisville Courier Journal, 2 Jan. 2023, www.courier-journal.com/story/life/food/2023/01/02/dan-os-
seasoning-how-louisville-native-built-his-business-on-tiktok/69706610007/.

2
“Dan-O’s Seasoning: Louisville Ky.” Facebook, www.facebook.com/danosseasoning. Accessed 18 Dec. 2023.

3
“Make Your Day - Dan O’s Available in All Walmarts.” TikTok, 5 July 2022,
www.tiktok.com/@danosseasoning/video/7116953486360661291?lang=en.

4
“Frequently Asked Questions - Dan O’s.” Dan O’s Seasoning FAQ, 31 May 2023, danosseasoning.com/frequently-
asked-questions/.

5
The Business research. “Global Seasoning and Dressing Market 2023: SWOT Analysis of Key Driving Factors for
Growing CAGR Value: Archer-Daniels-Midland Company (ADM), Unilever Plc, the Kraft Heinz Company,
McCormick & Company.” openPR.Com, openPR, 22 Feb. 2023, www.openpr.com/news/2942460/global-
seasoning-and-dressing-market-2023-swot-analysis-of-key.

6
“Seasoning, Sauce and Condiment Production in the US - Market Size, Industry Analysis, Trends and Forecasts
(2023-2028): IBISWorld.” IBISWorld Industry Reports, Dec. 2023, www.ibisworld.com/united-states/market-
research-reports/seasoning-sauce-condiment-production-industry/#IndustryStatisticsAndTrends.

7
“Entrepreneur Dan Oliver of Dan-O’s Seasoning: Inside Louisville.” KET, 4 Aug. 2023, ket.org/program/inside-
louisville/entrepreneur-dan-oliver-of-dan-os-seasoning/.

8
Editor, Dan-O’s. “Home - Dan O’s.” Dan, Dan-O’s Seasoning, 13 Dec. 2022, danosseasoning.com/.