Disney Consumer Products faces a big challenge when the obesity epidemic struck in 2005. They were being blamed for the rise in number of overweight and obese children, And so, the had to follow the guidelines set by USDA and improve their food quality. The question is, how did they do it? What are the challenges faced by the company during this transition, how did it overcome them?

3. Walt Disney Company
• Disney was founded in the year
1923 by the Disney Brother, Walt
Disney and Roy.O. Disney.
• Mickey Mouse made his first debut
in Steamboat Willie in the year
1932.
• The company immediately became
the cartoon animation industry giant
and gained world wide recognition.
• In 1985, Michael Eisner took over
the company and started
expanding its horizons, by
diversifying.

4. Company
Subsidiaries and Business Segments
The four pillars of Walt Disney Company

5. Its job is to extend the Disney Brand to
merchandise by giving license
to retail companies and manufacturers
worldwide.

6. Product line of Disney Consumer Products. DCP was
responsible for extending Disney brand to merchandise
ranging from apparel, toys to interactive games and books.

7. In 2005, DCP was the
world’s largest
licensor with more than
$21 billion sales.
Retail sales of DCP
licensed food products
accounted for $1.5
billion.

8. In 1996, Disney signed
an exclusive 10 year, $2
billion with McDonald’s
contract giving it license
to feature Disney
characters in its
promotions and to offer
Disney toys with happy
meals.

9. Distribution Models used by DCP
• Traditional Licensing Model
Licensees handled manufacturing, product innovation, sales and
manufacturing. In turn, licensees would provide superior product
differentiation, distribution strength and category leadership.
• Sourcing
Licensee would handle sales and marketing while Disney brand would
manufacture the products.
• Direct-to-Retail
Partnering directly with retailers.

10. Childhood obesity epidemic:
• In the span of 10 years, obesity rates and
overweight number of children skyrocketed.
– Many of the studies pointed out that food
advertisements influence children’s consumption
behaviours and food preferences.
• Eventually, IOM said that the fast food
retailers should “share responsibility” in
preventing childhood obesity.

11. Current Situation
Disney licensed confectionaries and sweet
treats

12. Challenge
Major challenges faced by DCP.
To find a way to substitute sugary
food with nutritious food and

13. Hypothesis
• Observations and studies
say that childrens’ eating
habits is influenced by
television advertisements
and by their peers.
• So, DCP made sure that
their products should be
trustworthy and maintain
a good quality line.

14. Course of Action
Ndi, vice president of DCP,
addressed the issue and
Introduced a way to
improve the eating habits
and consumption ways of
children.

15. To meet the requirements of revised IOM guidelines,
DCP came up with the following products to add in its
portfolio.
• Main Meal
• Side dish
• Snacks
• Drinks and treats
Ndi’s motto : “Good food, great
fun!”

16. DCP’s food and everage produ ts y eating o asion.

17. • DCP started reformulating
some products and
shrinking portions in the
others, by September
2005, 75% of its U.S
products complied to the
nutritional guidelines.
• Also revised guidelines in
its licensing contracts.

18. Results of DCP’s
nutritional audit
suggested that
41% of its consumer
products(2,100 products)
were complying to the
nutritional guidelines set
by USDA.

20. Now, what about the
rest of the 59%??

21. Adopted 3 approaches towards
creating Disney food products.
1. Retaining essential food products.
2. Fun, healthy food.
3. Make packages more appealing.

22. Retainment of essential products like peanut butter and
milk.

23. Bringing nutrition to children. With healthy food on one hand
and fun(by imaging puzzles and child-engaging fun quotes) on
the other to get hildren’s attention.

24. Water bottles in the shape of characters, to promote product
sampling and making it more appealing to children

25. Imagination Foods
Disney teamed up with Imagination
foods, fresh Fruits and vegetables
retailer. They had a three-ponged
development strategy: Product
differentiation, create value-added
products, exclusive produce
varieties.

26. Disney and Kroger
Disney also aligned with Kroger, biggest grocery
retailing company, and established DTR
relationship with it for an exclusive line of
Disney-branded products.
With the help of Kroger, DCP launched Disney
Magic Selections.

27. Nickelodeon collaborated with Green Giant in the race
for provding nutritional food to children. Nickelodeon
being the boggest competitor to Disney.

29. Highest earning
animation studios.
Have good reputation.
Has its own brand
image.
Diversified company.
Lots of risks
Does not have its own
manufacturing unit.
Established a good brand
image, which helped with
moms.
Disney characters’
popularity.
Other companies,
competitors.
Food products do not
have that much
nutritional value.

30. Character familiarity percentages, the Mickey Mouse
and Cinderella are on the top for Disney characters.

31. Top most earning fictional characters, estimated value
in billion($).

32. Conclusion
DCP managers were excited about
their entry into the food and
beverage market and planned to
capitalizing on the vast resources of
the Walt Disney Company to gain
market share and acceptance for its
new undertaking.

33. By
- Mrudula Kavuri,
IIT Madras