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GB Fant                                                                                                                    September 23, 2016Subject:  Innovation Session Recommendation for Duncan Hines Baked Goods BrandsThis seeks your approval for funding of $250,000 to engage Eureka! Ranch to perform a product innovation session for our Duncan Hines baked goods brands.  The anticipated outcome of this session is to create and subsequently launch three new products into the marketplace in 2017, yielding net sales in excess of $1 million aggregate.  Background:  The Duncan Hines brand growth has stagnated over the past three years.  Sales declined -4.5%, and key competitive brands Pillsbury and new entrant Ghirardelli have captured significant market share through new product entrants.  Pillsbury has introduced its single-serve baked dessert line which has captured 7.9% market share, while Ghirardelli has introduced upscale gourmet brownies that has gained 9.5% share in only 24 months.  Key Learnings:1.  In the past ten years, Eureka! Ranch has developed 24 successful new products for the Company.  These products combined to generate sales of $350 million for the Company in 2016.  The successful track record of Eureka! Ranch in developing solid products for the Company is undisputed.  2.  The Duncan Hines brand has not introduced any new products since 2004.  In that same time frame, Pillsbury has introduced eight new products, while Ghirardelli has entered the market with six new Brownie offerings.  The combined market shares of products introduced since 2010 is 46.5%.  The baked goods categories growth is being driven by new product innovation.3. In concept testing, we have not been able to develop in-house any new ideas capable of generating significant incremental sales that can grow the Duncan Hines brand.   The cupboard is empty and needs a jolt of new ideas to rejuvenate the brand.Benefits:We believe that the Eureka! Ranch Innovation session will generate 6 to 10 solid new product ideas, targeting three that can be launched within 6-9 months, with the rest to fill the innovation pipeline into 2018-19.  We anticipate that the three new products will generate $1 million in sales during their rollout in 2017, growing to $5 million new dollars in 2018.Next Steps:1.  May we have your approval of funding for the Eureka! Ranch session?2. Securing a date for the session.3. Selecting and coordinating scheduling of key managers to participate in the Eureka! Session. M.L. Lovellette