1. 1. Elements of a Marketing Program
a. Image
i. Unique Selling Proposition (USP)
b. Marketing Strategy
i. Product Features, Benefits and Appeals
ii. Positioning
iii. Pricing
iv. Distribution channels
v. Communications strategies
c. Launch Strategies
i. Launch plans
1. Public Relations strategy and execution
2. Advertising strategy and execution
3. Other promotion
a. Direct marketing
b. Third-party marketing, managing referrals
c. Other promotional programs
d. Creation of Promotional Package
e. Dissemination of Information
2. Implementation
a. Structure
b. Refining the message
c. Creating and maintaining relationships
d. Will it work?
e. Success metrics
f. Goals, year one
g. Goals, years 2-5
h. Outcome measurements
i. Requirements for success
3. Proposals with Budget
4. Appendix:
Justification
Underlying Assumptions
References

2. PEANUT BUTTER HISTORY
There are many claims about the origin of peanut butter. Africans ground peanuts into
stews as early as the 15th century. The Chinese have crushed peanuts into creamy sauces
for centuries. Civil War soldiers dined on 'peanut porridge.' These uses, however, bore
little resemblance to peanut butter as it is known today.
In 1890, an unknown St. Louis physician supposedly encouraged the owner of a food
products company, George A. Bayle Jr., to process and package ground peanut paste as a
nutritious protein substitute for people with poor teeth who couldn't chew meat. The
physician apparently had experimented by grinding peanuts in his hand-cranked meat
grinder. Bayle mechanized the process and began selling peanut butter out of barrels for
about 6¢ per pound.
Around the same time, Dr. John Harvey Kellogg in Battle Creek, Michigan, began
experimenting with peanut butter as a vegetarian source of protein for his patients. His
brother, W.K. Kellogg, was business manager of their sanitarium, the Western Health
Reform Institute, but soon opened Sanitas Nut Company which supplied foods like
peanut butter to local grocery stores.
The Kelloggs' patent for the "Process of Preparing Nut Meal" in 1895 described "a pasty
adhesive substance that is for convenience of distinction termed nut butter." However,
their peanut butter was not as tasty as peanut butter today because the peanuts were
steamed, instead of roasted, prior to grinding. The Kellogg brothers turned their attention
to cereals which eventually gained them worldwide recognition.
Joseph Lambert, a Kellogg employee who had worked on developing food processing
equipment, began selling his own hand-operated peanut butter grinders in 1896. Three
years later, his wife Almeeta published the first nut cookbook, "The Complete Guide to
Nut Cookery" and two years later the Lambert Food Company was organized.
In 1903, Dr. George Washington Carver began his peanut research at Tuskeegee Institute
in Alabama. While peanut butter had already been developed by then, Dr. Carver
developed more than 300 other uses for peanuts and so improved peanut horticulture that
he is considered by many to be the father of the peanut industry.
C.H. Sumner was the first to introduce peanut butter to the world at the Universal
Exposition of 1904 in St. Louis. He sold $705.11 of the treat at his concession stand and
peanut butter was on its way to becoming an American favorite!
Krema Products Company in Columbus, Ohio began selling peanut butter in 1908 ~ and
is the oldest peanut butter company still in operation today. Krema's founder, Benton
Black, used the slogan, "I refuse to sell outside of Ohio." This was practical at the time
since peanut butter packed in barrels spoiled quickly and an interstate road system had
not yet been built.

3. In 1922, Joseph L. Rosefield began selling a number of brands of peanut butter in
California. These peanut butters were churned like butter so they were smoother than the
gritty peanut butters of the day. He soon received the first patent for a shelf-stable peanut
butter which would stay fresh for up to a year because the oil didn't separate from the
peanut butter.
One of the first companies to adopt this new process was Swift & Company for its E.K.
Pond peanut butter ~ renamed Peter Pan in 1928. In 1932, Rosefield had a dispute with
Peter Pan and began producing peanut butter under the Skippy label the following year.
Rosefield created the first crunchy style peanut butter two years later by adding chopped
peanuts into creamy peanut butter at the end of the manufacturing process.
In 1955, Procter & Gamble entered the peanut butter business by acquiring W.T. Young
Foods in Lexington, Kentucky, makers of Big Top Peanut Butter. They introduced Jif in
1958 and now operate the world's largest peanut butter plant ~ churning out 250,000 jars
every day!
A Spread of the Peanut Butter Industry
At the thought of the word peanut, one would not miss mentioning the legume's most
popular use - as peanut butter!
Peanut butter is one of the many products that fall under the bread spreads category.
(Other well-known spreads include butter, cheese spreads, jams, jellies and marmalades,
sandwich spread, and mayonnaise). Like the other spreads, peanut butter is normally
added to ordinary bread to give it a distinct and specific flavor. At times, it is used in
baking, and also in cooking to create savory sauces for various vegetable, meat, and
pasta dishes.
Peanut butter is made from roasted, peeled, and ground peanuts mixed with sugar, salt
and oil.
Peanut butter manufacturers indicated that there is a need to develop the quality of local
peanuts. Currently, a substantial percentage of total peanuts used are imported (usually
from China) because they are cheaper and have relatively low moisture content.
According to a major player, his company uses 50% locally produced peanuts while the
remaining 50% is imported. Local peanuts, albeit tastier and with better aroma, cannot
be completely relied on because of their high moisture content. Players are critical about
the moisture content of peanuts because a high moisture level will cause molds to
develop allowing the growth of a carcinogenic substance called aflatoxin. The Department
of Health's Bureau of Food and Drugs (BFAD) imposes a limit on the amount of aflatoxin
at 20 parts per billion.

4. Another concern is the unimproved market base. Sources say the entire spreads industry
also suffers from slow movement in supermarkets and groceries. This makes the peanut
butter industry specifically more vulnerable to the new and more affordable spreads that
have entered the market. With this and the changing breakfast food patterns from bread
with spreads to the more convenient and varied instant "no-cook" noodles, porridges,
biscuits, and cookies, peanut butter stands to lose its hold on its market.
The market for peanut butter has remained relatively steady in the past years. The entry
of breakfast substitutes like instant noodles, however, have led companies to be more
creative. Players have learned to address consumer demand and preference for more
nutritious and healthier foods by fortifying their products with Vitamins A, B1, D3, and E.
Another is the introduction of peanut butter with stripes of chocolate and fruit jams like
guava and grape, notably from Unilever Bestfoods. And since bread and spreads go
hand-in-hand, another hope for the peanut butter industry is the expected growth the
bread industry will post in the medium term.
Packaging is also a potential growth consideration. Store checks revealed that peanut
butter substitutes like sandwich spreads, mayonnaise, and cheese spreads have been
enjoying tremendous sales after manufacturers, particularly Unilever Bestfoods and Kraft,
introduced these in smaller retail packs at a cheaper cost.
Reports say Unilever is positioning its marketing strategy towards the mass market. This
strategy clicked with its shampoos in sachets and is expected to enjoy the same success
in its mayonnaise, sandwich spread, and the recently launched Bestfoods Say Cheez
cheese spread in sachets. It would not be a bad idea if peanut butter producers adopt a
similar scheme and experiment by introducing peanut butter in sachets. Currently, the
smallest peanut butter available is in 150-gram containers.
Institutional users could also be tapped to widen the spread's market. Jams, jellies, and
marmalades have been successful in this part. A leading player revealed that part of his
company's growth plans is tapping toll-packers and entering into private labeling
agreements with supermarkets and food stores.
What the industry needs is to maintain producing high quality peanut butter coupled with
a little marketing push. The development of more varieties and a touch of advertising
could definitely help it compete with more popular spreads.
WHAT IS LATENT DEMAND AND THE P.I.E.?
The latent demand for peanut butter is not actual or historic sales. Nor is latent demand future sales. In fact, latent
demand can be lower either lower or higher than actual sales if a market is inefficient (i.e., not representative of relatively

5. competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural
barriers to consumption, regulations, and cartel-like behavior on the part of firms. In general, however, latent demand is
typically larger than actual sales in a country market.
As mentioned in the introduction, this study is strategic in nature, taking an aggregate and long-run view, irrespective of
the players or products involved. If fact, all the current products or services on the market can cease to exist in their
present form (i.e., at a brand-, R&D specification, or corporate-image level) and all the players can be replaced by other
firms (i.e., via exits, entries, mergers, bankruptcies, etc.), and there will still be an international latent demand for peanut
butter at the aggregate level. Product and service offering details, and the actual identity of the players involved, while
important for certain issues, are relatively unimportant for estimates of latent demand.
THE METHODOLOGY
In order to estimate the latent demand for peanut butter on a worldwide basis, I used a multi-stage approach. Before
applying the approach, one needs a basic theory from which such estimates are created. In this case, I heavily rely on the
use of certain basic economic assumptions. In particular, there is an assumption governing the shape and type of
aggregate latent demand functions. Latent demand functions relate the income of a country, city, state, household, or
individual to realized consumption. Latent demand (often realized as consumption when an industry is efficient), at any
level of the value chain, takes place if an equilibrium in realized. For firms to serve a market, they must perceive a latent
demand and be able to serve that demand at a minimal return. The single most important variable determining
consumption, assuming latent demand exists, is income (or other financial resources at higher levels of the value chain).
Other factors that can pivot or shape demand curves include external or exogenous shocks (i.e., business cycles), and or
changes in utility for the product in question.
Ignoring, for the moment, exogenous shocks and variations in utility across countries, the aggregate relation between
income and consumption has been a central theme in economics. The figure below concisely summarizes one aspect of
problem. In the 1930s, John Meynard Keynes conjectured that as incomes rise, the average propensity to consume would
fall. The average propensity to consume is the level of consumption divided by the level of income, or the slope of the line
from the origin to the consumption function. He estimated this relationship empirically and found it to be true in the short-
run (mostly based on cross-sectional data). The higher the income, the lower the average propensity to consume. This
type of consumption function is labeled "A" in the figure below (note the rather flat slope of the curve). In the 1940s,
another macroeconomist, Simon Kuznets, estimated long-run consumption functions which indicated that the marginal
propensity to consume was rather constant (using time series data across countries). This type of consumption function is
show as "B" in the figure below (note the higher slope and zero-zero intercept). The average propensity to consume is
constant.
Is it declining or is it constant? A number of other economists, notably Franco Modigliani and Milton Friedman, in the
1950s (and Irving Fisher earlier), explained why the two functions were different using various assumptions on
intertemporal budget constraints, savings, and wealth. The shorter the time horizon, the more consumption can depend

6. on wealth (earned in previous years) and business cycles. In the long-run, however, the propensity to consume is more
constant. Similarly, in the long run, households, industries or countries with no income eventually have no consumption
(wealth is depleted). While the debate surrounding beliefs about how income and consumption are related and interesting,
in this study a very particular school of thought is adopted. In particular, we are considering the latent demand for peanut
butter across some 230 countries. The smallest have fewer than 10,000 inhabitants. I assume that all of these counties
fall along a "long-run" aggregate consumption function. This long-run function applies despite some of these countries
having wealth, current income dominates the latent demand for peanut butter. So, latent demand in the long-run has a
zero intercept. However, I allow firms to have different propensities to consume (including being on consumption functions
with differing slopes, which can account for differences in industrial organization, and end-user preferences).
Given this overriding philosophy, I will now describe the methodology used to create the latent demand estimates for
peanut butter. Since ICON Group has asked me to apply this methodology to a large number of categories, the rather
academic discussion below is general and can be applied to a wide variety of categories, not just peanut butter.
Step 1. Product Definition and Data Collection
Any study of latent demand across countries requires that some standard be established to define “efficiently served”.
Having implemented various alternatives and matched these with market outcomes, I have found that the optimal
approach is to assume that certain key countries are more likely to be at or near efficiency than others. These countries
are given greater weight than others in the estimation of latent demand compared to other countries for which no known
data are available. Of the many alternatives, I have found the assumption that the world’s highest aggregate income and
highest income-per-capita markets reflect the best standards for “efficiency”. High aggregate income alone is not sufficient
(i.e., China has high aggregate income, but low income per capita and can not assumed to be efficient). Aggregate
income can be operationalized in a number of ways, including gross domestic product (for industrial categories), or total
disposable income (for household categories; population times average income per capita, or number of households
times average household income per capita). Brunei, Nauru, Kuwait, and Lichtenstein are examples of countries with high
income per capita, but not assumed to be efficient, given low aggregate level of income (or gross domestic product); these
countries have, however, high incomes per capita but may not benefit from the efficiencies derived from economies of
scale associated with large economies. Only countries with high income per capita and large aggregate income are
assumed efficient. This greatly restricts the pool of countries to those in the OECD (Organization for Economic
Cooperation and Development), like the United States, or the United Kingdom (which were earlier than other large OECD
economies to liberalize their markets).
The selection of countries is further reduced by the fact that not all countries in the OECD report industry revenues at the
category level. Countries that typically have ample data at the aggregate level that meet the efficiency criteria include the
United States, the United Kingdom and in some cases France and Germany.
Latent demand is therefore estimated using data collected for relatively efficient markets from independent data sources
(e.g. Euromonitor, Mintel, Thomson Financial Services, the U.S. Industrial Outlook, the World Resources Institute, the
Organization for Economic Cooperation and Development, various agencies from the United Nations, industry trade
associations, the International Monetary Fund, and the World Bank). Depending on original data sources used, the
definition of “peanut butter” is established. In the case of this report, the data were reported at the aggregate level, with no
further breakdown or definition. In other words, any potential product or service that might be incorporated within peanut
butter falls under this category. Public sources rarely report data at the disaggregated level in order to protect private
information from individual firms that might dominate a specific product-market. These sources will therefore aggregate
across components of a category and report only the aggregate to the public. While private data are certainly available,
this report only relies on public data at the aggregate level without reliance on the summation of various category
components. In other words, this report does not aggregate a number of components to arrive at the “whole”. Rather, it
starts with the “whole”, and estimates the whole for all countries and the world at large (without needing to know the
specific parts that went into the whole in the first place).
Given this caveat, this study covers “peanut butter” as defined by the North American Industrial Classification system or
NAICS (pronounced “nakes”). For a complete definition of peanut butter, please refer to the Web site at
http://www.icongrouponline.com/codes/NAICS.html. The NAICS code for peanut butter is 3119114. It is for this definition
of peanut butter that the aggregate latent demand estimates are derived. “Peanut butter” is specifically defined as follows:

7. 3119114
peanut butter
31191141
peanut butter
3119114111
peanut butter in consumer sizes
3119114121
peanut butter in commercial sizes and bulk
Step 2. Filtering and Smoothing
Based on the aggregate view of peanut butter as defined above, data were then collected for as many similar countries as
possible for that same definition, at the same level of the value chain. This generates a convenience sample of countries
from which comparable figures are available. If the series in question do not reflect the same accounting period, then
adjustments are made. In order to eliminate short-term effects of business cycles, the series are smoothed using an 2
year moving average weighting scheme (longer weighting schemes do not substantially change the results). If data are
available for a country, but these reflect short-run aberrations due to exogenous shocks (such as would be the case of
beef sales in a country stricken with foot and mouth disease), these observations were dropped or "filtered" from the
analysis.
Step 3. Filling in Missing Values
In some cases, data are available for countries on a sporadic basis. In other cases, data from a country may be available
for only one year. From a Bayesian perspective, these observations should be given greatest weight in estimating missing
years. Assuming that other factors are held constant, the missing years are extrapolated using changes and growth in
aggregate national income. Based on the overriding philosophy of a long-run consumption function (defined earlier),
countries which have missing data for any given year, are estimated based on historical dynamics of aggregate income
for that country.
Step 4. Varying Parameter, Non-linear Estimation
Given the data available from the first three steps, the latent demand in additional countries is estimated using a “varying-
parameter cross-sectionally pooled time series model”. Simply stated, the effect of income on latent demand is assumed
to be constant across countries unless there is empirical evidence to suggest that this effect varies (i.e., . the slope of the
income effect is not necessarily same for all countries). This assumption applies across countries along the aggregate
consumption function, but also over time (i.e., not all countries are perceived to have the same income growth prospects
over time and this effect can vary from country to country as well). Another way of looking at this is to say that latent
demand for peanut butter is more likely to be similar across countries that have similar characteristics in terms of
economic development (i.e., African countries will have similar latent demand structures controlling for the income
variation across the pool of African countries).
This approach is useful across countries for which some notion of non-linearity exists in the aggregate cross-country
consumption function. For some categories, however, the reader must realize that the numbers will reflect a country’s
contribution to global latent demand and may never be realized in the form of local sales. For certain country-category
combinations this will result in what at first glance will be odd results. For example, the latent demand for the category
“space vehicles” will exist for “Togo” even though they have no space program. The assumption is that if the economies in
these countries did not exist, the world aggregate for these categories would be lower. The share attributed to these
countries is based on a proportion of their income (however small) being used to consume the category in question (i.e.,
perhaps via resellers).
Step 5. Fixed-Parameter Linear Estimation

8. Nonlinearities are assumed in cases where filtered data exist along the aggregate consumption function. Because the
world consists of more than 200 countries, there will always be those countries, especially toward the bottom of the
consumption function, where non-linear estimation is simply not possible. For these countries, equilibrium latent demand
is assumed to be perfectly parametric and not a function of wealth (i.e., a country’s stock of income), but a function of
current income (a country’s flow of income). In the long run, if a country has no current income, the latent demand for
peanut butter is assumed to approach zero. The assumption is that wealth stocks fall rapidly to zero if flow income falls to
zero (i.e., countries which earn low levels of income will not use their savings, in the long run, to demand peanut butter).
In a graphical sense, for low income countries, latent demand approaches zero in a parametric linear fashion with a zero-
zero intercept. In this stage of the estimation procedure, low-income countries are assumed to have a latent demand
proportional to their income, based on the country closest to it on the aggregate consumption function.
Step 6. Aggregation and Benchmarking
Based on the models described above, latent demand figures are estimated for all countries of the world, including for the
smallest economies. These are then aggregated to get world totals and regional totals. To make the numbers more
meaningful, regional and global demand averages are presented. Figures are rounded, so minor inconsistencies may
exist across tables.
Step 7. Latent Demand Density: Allocating Across Cities
With the advent of a “borderless world”, cities become a more important criteria in prioritizing markets, as opposed to
regions, continents, or countries. This report also covers the world’s top 2000 cities. The purpose is to understand the
density of demand within a country and the extent to which a city might be used as a point of distribution within its region.
From an economic perspective, however, a city does not represent a population within rigid geographical boundaries. To
an economist or strategic planner, a city represents an area of dominant influence over markets in adjacent areas. This
influence varies from one industry to another, but also from one period of time to another.
Similar to country-level data, the reader needs to realize that latent demand allocated to a city may or may not represent
real sales. For many items, latent demand is clearly observable in sales, as in the case for food or housing items.
Consider, again, the category “satellite launch vehicles.” Clearly, there are no launch pads in most cities of the world.
However, the core benefit of the vehicles (e.g. telecommunications, etc.) is "consumed" by residents or industries within
the world's cities. Without certain cities, in other words, the world market for satellite launch vehicles would be lower for
the world in general. One needs to allocate, therefore, a portion of the worldwide economic demand for launch vehicles to
regions, countries and cities. This report takes the broader definition and considers, therefore, a city as a part of the global
market. I allocate latent demand across areas of dominant influence based on the relative economic importance of cities
within its home country, within its region and across the world total. Not all cities are estimated within each country as
demand may be allocated to adjacent areas of influence. Since some cities have higher economic wealth than others
within the same country, a city’s population is not generally used to allocate latent demand. Rather, the level of economic
activity of the city vis-à-vis others.
1 INTRODUCTION 10
1.1 Overview 10
1.2 What is Latent Demand and the P.I.E.? 10
1.3 The Methodology 11
1.3.1 Step 1. Product Definition and Data Collection 12
1.3.2 Step 2. Filtering and Smoothing 13
1.3.3 Step 3. Filling in Missing Values 13
1.3.4 Step 4. Varying Parameter, Non-linear Estimation 13
1.3.5 Step 5. Fixed-Parameter Linear Estimation 14
1.3.6 Step 6. Aggregation and Benchmarking 14
1.3.7 Step 7. Latent Demand Density: Allocating Across Cities 14

9. 2 SUMMARY OF FINDINGS 16
2.1 The Worldwide Market Potential 16
Raw Materials
The peanut, rich in fat, protein, vitamin B, phosphorus, and iron, has significant food
value. In its final form, peanut butter consists of about 90 to 95 percent carefully
selected, blanched, dry-roasted peanuts, ground to a size to pass through a 200-mesh
screen. To improve smoothness, spreadability and flavor, other ingredients are
added, including include salt (1.5 percent), hydrogenated vegetable oil (0.125
percent), dextrose (2 percent), and corn syrup or honey (2 to 4 percent). To enhance
peanut butter's nutritive value, ascorbic acid and yeast are also added. The amounts
of other ingredients can vary as long as they do not add up to more than 10 percent
of the peanut butter. Peanut butter contains 50 to 52 percent fat, 28 to 29 percent
protein, 2 to 5 percent carbohydrate, and 1 to 2 percent moisture.
The Manufacturing
Process
Planting and harvesting peanuts
• 1 Peanuts are planted in April or May, depending upon the climate. The
peanut emerges as a plant followed by a yellow flower. After blooming and
then wilting, the flower bends over and penetrates the soil. The peanut is
formed underground. Peanuts are harvested beginning in late August, but
mostly in September and October, during clear weather, when the soil is dry
enough so it will not adhere to the stems and pods. The peanuts are removed
from vines by portable, mechanical pickers and transported to a peanut
sheller for mechanical drying.
• 2 Peanuts from the pickers are delivered to warehouses for cleaning. Blowers
remove dust, sand, vines, stems, leaves, and empty shells. Screens, magnets,
and size graders remove trash, metal, rocks, and clods. After the cleaning
process, the peanuts weigh 10 to 20 percent less. The raw, cleaned peanuts
are stored unshelled in silos or warehouses.

10. George Washington Carver, left, and industrialist Henry Ford share a weed
sandwich in this 1942 photograph.
For George Washington Carver, peanuts were a means to several ends. Throughout
his career, Carver searched for ways to make small Southern family farms, often
African-American owned, self-sufficient. Carver's popularization of peanuts and
peanut products was part of his effort to free small farmers from dependence on
commercial products and debt. It was also part of his effort to wean farmers away
from the annual production of soil-depleting staple crops like cotton and tobacco.
Carver's list of peanut products—from peanut milk and makeup to paint and soap—
represented a wide range of household activities.
Carver's interest in peanuts began in the mid-1910s, after he had pursued much
research and education about other crops, especially sweet potatoes. A well-
organized peanut industry lobby heard of Carver's work and capitalized on their
mutual interest in the promotion of peanuts. Carver became the unofficial
spokesman and publicist for the industry, especially after his 1921 appearance at
tariffs hearings conducted by the U.S. House of Representatives' Ways and Means
Committee. Facing alternatively bemused and hostile questioning from legislators,
the African-American scientist eloquently and humorously explained the social,
economic, and nutritional benefits of the domestic cultivation and consumption of
peanuts. What evolved into a lunchtime favorite for kids was thrust into national
prominence through one industry's search for growth and one man's search for
economic independence for his people.
William S. Pretzer

11. Shelling and processing
• 3 Shelling consists of removing the shell (or hull) of peanuts with the least
damage to the seed or kemels. The moisture of the
The first several steps in peanut butter manufacture involve processing the
main ingredient: the peanuts. After harvesting, the peanuts are cleaned,
shelled, and graded for size. Next, they are dry roasted in large ovens, and
then they are transferred to cooling machines, where suction fans draw
cooling air over the peanuts.
unshelled peanuts is adjusted to avoid excessive brittleness of the shells and
kernels and to reduce the amount of dust in the plant. The size-graded
peanuts are passed between a series of rollers adjusted to the variety, size, and
condition of the peanuts, where the peanuts are cracked. The cracked peanuts
then repeatedly pass over screens, sleeves, blowers, magnets, and destoners,

12. where they are shaken, gently tumbled, and air blown, until all the shells and
other foreign material (rocks, mudballs, metal, shrivels) are removed.
• 4 The shelled peanuts are graded for size in a size grader. The peanuts are
lifted and then oriented on the perforations of the size grader. The larger
peanuts (the "overs") are sent to one trough, while the "troughs" are guided
towards another trough. The peanuts are then graded for color, defects, spots,
and broken skins.
• 5 The peanuts are shipped in large bulk containers or sacks to peanut butter
manufacturers. (Inedible peanuts are diverted as oil stock in semibulk form.)
To ensure proper size and grading, the truckloads transporting peanuts to
peanut manufacturers are sampled mechanically. The sampler, testing two
truckloads simultaneously, can quickly and accurately assess size and grading
by examining 10 samples per truckload.
If edible peanuts need to be stored for more than 60 days, they are placed in
refrigerated storage at 34 to 40 degrees Fahrenheit (2 to 6 degrees Celsius),
where they may be held for as long as 25 months. Shelled, the remaining
peanuts weigh 30 to 60 percent less, occupy
After the peanuts are roasted and cooled, they undergo blanching—removal of
the skins by heat or water. The heat method has the advantage of removing
the bitter heart of the peanut. Next, the blanched peanuts are pulverized and

13. ground with salt, dextrose, and hydrogenated oil stabilizer in a grinding
machine. After cooling, the peanut butter is ready to be packaged.
60 to 70 percent less space, and have a shelf life about 60 to 75 percent
shorter than unshelled peanuts.
Making peanut butter
• 6 The peanut butter manufacturers first dry roast the peanuts. Dry roasting is
done by either the batch or continuous method. In the batch method, peanuts
are roasted in 400-pound lots in a revolving oven heated to about 800
degrees Fahrenheit (426.6 degrees Celsius). The peanuts are heated at 320
degrees Fahrenheit (160 degrees Celsius) and held at this temperature for 40
to 60 minutes to reach the exact degree of doneness. All the nuts in each
batch must be uniformly roasted.
Large manufacturers prefer the continuous method, in which peanuts are fed
from the hopper, roasted, cooled, ground into peanut butter and stabilized in
one operation. This method is less labor-intensive, creates a more uniform
roasting, and decreases spillage. Still, some operators believe that the best
commercial peanut butter is obtained by using the batch method. Since
peanut butter may call for a blending of peanuts, the batch method allows for
the different varieties to be roasted separately. Furthermore, since peanuts
frequently come in lots of different moisture content which may need special
attention during roasting, the batch method can also meet these needs
readily. The steps outlined below apply to peanut butter manufacturing that
uses the batch method of roasting.
Cooling and blanching
• 7 A photometer indicates when the cooking is complete. At the exact time
cooking is completed, the roasted peanuts are removed from heat as quickly
as possible in order to stop cooking and produce a uniform product. The hot
peanuts then pass from the roaster directly to a perforated metal cylinder (or
blower-cooler vat), where a large volume of air is pulled through the mass by
suction fans. The peanuts are brought to a temperature of 86 degrees

14. Fahrenheit (30 degrees Celsius). Once cooled, the peanuts pass through a
gravity separator that removes foreign materials.
• 8 The skins (or seed coats) are now removed with either heat or water. The
heat blanching method has the advantage of removing the hearts of the
peanuts, which contain a bitter principle.
• Heat blanching: Depending on the variety and degree of doneness desired,
the peanuts are exposed to a temperature of 280 degrees Fahrenheit (137.7
degrees Celsius) for up to 20 minutes to loosen and crack the skins. After
cooling, the peanuts are passed through the blancher in a continuous stream
and subjected to a thorough but gentle rubbing between brushes or ribbed
rubber belting. The skins are rubbed off, blown into porous bags, and the
hearts are separated by screening.
Water blanching: A newer process than heat blanching, water blanching was
introduced in 1949. While the kernels are not heated to destroy natural
antioxidants, drying is necessary in this process and the hearts are retained.
The first step is to arrange the kernels in troughs, then roll them between
sharp stationary blades to slit the skins on opposite sides. The skins are
removed as a spiral conveyor carries the kernels through a one-minute
scalding water bath and then under an oscillating canvas-covered pad, which
rubs off their skins. The blanched kernels are then dried for at least six hours
by a current of 120 degrees Fahrenheit (48.8 degrees Celsius) air.
• 9 The blanched nuts are mechanically screened and inspected on a conveyor
belt to remove scorched and rotten nuts or other undesirable matter. Light
nuts are removed by blowers, discolored nuts by a high-speed electric color
sorter, and metal parts by magnets.
Grinding
• 10 Most of the devices used for grinding peanuts into butter are built so they
can be adjusted over a wide range—permitting the variation in the quantity of
peanuts ground per hour, the fineness of the product, and the amount of oil
freed from the peanuts. Most grinding mills also have an automatic feed for

15. peanuts and salt, and are easy to clean. To prevent overheating, grinding mills
are cooled by a water jacket.
Peanut butter is usually made by two grinding operations. The first reduces
the nuts to a medium grind and the second to a fine, smooth texture. For fine
grinding, clearance between plates is about .032 inch (.08 centimeter). The
second milling uses a very high-speed comminutor that has a combination
cutting-shearing and attrition action and operates at 9600 rpm. This milling
produces a very fine particle with a maximum size of less than 0.01 inch (.025
centimeter).
To make chunky peanut butter, peanut pieces approximately the size of one-
eighth of a kernel are mixed with regular peanut butter, or incomplete
grinding is used by removing a rib from the grinder.
At the same time the peanuts are fed into the grinder to be milled, about 2
percent salt, dextrose, and hydrogenated oil stabilizer are fed into the grinder
in a continuous, horizontal operation, with about plus or minus 2 percent
accuracy, and are thoroughly dispersed.
• 11 Peanuts are kept under constant pressure from the start to the finish of the
grinding process to assure uniform grinding and to protect the product from
air bubbles. A heavy screw feeds the peanuts into the grinder. This screw may
also deliver the deaerated peanut butter into containers in a continuous
stream under even pressure. From the grinder, the peanut butter goes to
a stainless steel hopper, which serves as an intermediate mixing and
storage point. The stabilized peanut butter is cooled in this rotating
refrigerated cylinder (called a votator),from 170 to 120 degrees Fahrenheit
(76.6 to 48.8 degrees Celsius) or less before it is packaged.
Packaging
• 12 The stabilized peanut butter is automatically packed in jars, capped, and
labeled. Since proper packaging is the main factor in reducing oxidation
(without oxygen no oxidation can occur), manufacturers use vacuum packing.
After it is put into final containers, the peanut butter is allowed to remain

16. undisturbed until crystallization throughout the mass is completed. Jars are
then placed in cartons and placed in product storage until ready to be shipped
out to retail or institutional customers.
Quality Control
Quality control of peanut butter starts on the farm through harvesting and curing,
and is then carried through the steps of shelling, storing, and manufacturing the
product. All these steps are handled by machines. While complete mechanical
harvesting, curing, and shelling may have some disadvantages, the end result is a
brighter, cleaner, and more uniform peanut crop.
In the United States, strict quality control has been maintained on peanuts for many
years with cooperation and approval from both the U.S. Department of Agriculture
(USDA) and the Food and Drug Administration (FDA). Quality control is handled by
the Peanut Administrative Committee, which is an arm of the USDA. Raw peanut
responsibility rests with the Department of Agriculture. During and after
manufacture, quality control is under the supervision of the FDA.
In its definition of peanut butter, the FDA stipulates that seasoning and stabilizing
ingredients must not "exceed 10 percent of the weight of the finished food."
Furthemore, the FDA states that "artificial flavorings, artificial sweeteners, chemical
preservatives, added vitamins, and color additives are not suitable ingredients of
peanut butter." A product that does not conform to the FDA's standards must be
labeled "imitation peanut butter."
Byproducts
Peanut vines and leaves are used for feed for cattle, sheep, goats, horses, mules, and
other livestock because of high nutritional value. Peanut shells accumulate in great
quantities at shelling plants. They contain stems, peanut pops, immature nuts and
dirt. These shells are used mainly for fuel for the boiler generating steam for making
electricity to operate the shelling plant. Limited markets exist for peanut shells for
roughage in cattle feed, poultry litter, and filler in artificial fire logs. Potential
additional uses are pet litter, mushroom-growing medium, and floor-sweeping
compounds.

17. The Future
In the United States and most of the 53 peanut-producing countries in the world, the
production and consumption of peanuts, including peanut butter, is increasing. The
quality of peanuts continues to improve to meet higher standards. The convenience
peanut butter offers its users and its high nutritional value meet the demands of
contemporary lifestyles.
The use of peanuts as food is being introduced to remote parts of the world by
American ambassadors, missionaries and Peace Corps volunteers. Some developing
countries, understanding that their food protein scarcity will not be solved through
animal proteins alone, are interested in growing the protein-rich peanut crop.
Read more: How peanut butter is made - material, ingredients of, manufacture,
making, used, processing, parts, steps, product, industry, machine, Raw
Materials http://www.madehow.com/Volume-1/Peanut-
Butter.html#ixzz1Av7AhQtW
2011 Report on Roasted Nuts and Peanut Butter Manufacturing
Current State of the Roasted Nuts and Peanut Butter Manufacturing Industry
This section provides answers to the fundamental and commonly-asked questions about the industry:
1. What is the total market size ($ millions)?
2. Has the market grown or declined?
3. What is the market growth rate?
4. Are long term forecasts positive or negative?
5. What is the industry size and average company size?
6. How many companies are in the industry?
Market Size - Roasted Nuts and Peanut Butter Manufacturing
The total U.S. market size for the Roasted Nuts and Peanut Butter Manufacturing industry includes all companies,
both public and private. In addition to total revenue, the table contains details on employees, companies, and
average firm size.

18. Charts and graphs can be copied to Microsoft Word and Powerpoint presentations.
Metrics 2005 2006 2007 2008 2009 2010
Market Size
(Total Industry Sales)
Total Firms
INCLUDED
Total Employees
Order at top of page
Average Revenue Per Firm
Average Employees Per
Firm
Source: Analysis of US Census data, updated June 8 2011
Market Forecast - Roasted Nuts and Peanut Butter Manufacturing[PREMIUM]
Market forecasts show the long term outlook for the Roasted Nuts and Peanut Butter Manufacturing industry. The
following five-year forecast utilizes advanced econometric techniques that take into account both short-term and
long-term industry trends.

19. Forecast 2010 2011 2012 2013 2014 2015
Market Forecast ($ millions) INCLUDED
Source: AnythingResearch Economic Analysis
Product Mix
Product Description Sales (000) Percent Additional Information
Roasted Nuts And Peanut Butter Manufacturing INCLUDED
Nuts And Seeds (Salted, Roasted, Cooked, Or Blanched) INCLUDED
Nuts (Salted, Roasted, Cooked, Or Blanched), Sold In Bulk INCLUDED
Canned Nuts (Salted, Roasted, Cooked, Or Blanched) INCLUDED
All Other Packaged Nuts, Including All Types Of Seeds INCLUDED
Nuts And Seeds (Salted, Roasted, Cooked, Or Blanched), Not Categorized INCLUDED
Peanut Butter INCLUDED
Peanut Butter, Consumer Sizes INCLUDED
Peanut Butter, Commercial Sizes And Bulk INCLUDED
Peanut Butter, Not Categorized INCLUDED
Roasted Nuts And Peanut Butter Manufacturing, Not Categorized, Total INCLUDED

20. Roasted Nuts & Peanut Butter Mfg, Not Categorized, For Nonadmin-Records INCLUDED
Roasted Nuts & Peanut Butter Mfg, Not Categorized, For Admin-Records INCLUDED
Geographic Distribution: Revenue by State
Market Size by State ($ millions) indicates how the industry is distributed throughout the country.
Move mouse over states to see revenue numbers
Income Statement (Average Financial Metrics) - Roasted Nuts and Peanut Butter Manufacturing
Financial metrics provide a snapshot view of an "average" company in the Roasted Nuts and Peanut Butter
Manufacturing industry. Key business metrics show revenue and operating costs. The data collected is industry-
wide, covering both public and private companies in the industry.
Industry Average Percent of Sales

21. Total Revenue
Operating Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses
Pension, profit sharing plans, stock, annuity
Repairs
Rent paid on business property
Charitable Contributions
Depletion
Domestic production activities deduction
Advertising
Compensation of officers
Salaries and wages INCLUDED
Order at top of page
Employee benefit programs
Taxes and Licenses
Bad Debts
Depreciation
Amortization
Other Operating Expenses
Total Operating Expenses
Operating Income
Non-Operating Income
EBIT (Earnings Before Interest and Taxes)
Interest Expense
Earnings Before Taxes
Income Tax
Net Profit
Source: Analysis of U.S. federal statistics
Financial Ratio Analysis - Roasted Nuts and Peanut Butter Manufacturing
Financial ratios can be used to compare how a company in the Roasted Nuts and Peanut Butter Manufacturing
industry is performing relative to its peers. Financial ratios are calculated from the industry-average for income
statements and balance sheets.
Liquidity Ratios - Roasted Nuts and Peanut Butter
Industry Average
Manufacturing Industry

22. Liquidity Ratios measure how liquid a business is. Bankers and suppliers may use these
to determine creditworthiness and identify potential threats to a company's financial
viability.
Current Ratio Included
Measures a firm's ability to pay its debts over the next 12
months.
Quick Ratio (Acid Test) Included
Calculates liquid assets relative to liabilities, excluding
inventories.
Efficiency Ratios - Roasted Nuts and Peanut Butter Manufacturing Industry Industry Average
Efficiency Ratios measure how quickly products and services sell, and effectively
collections policies are implemented.
Receivables Turnover Ratio Included
If this number is low compared to the industry average, it may mean your payment terms are too
lenient or that you are not doing a good enough job on collections.
Average Collection Period Included
Based on the Receivables Turnover Ratio, this estimates the collection period in days. Calculated as
365 divided by the Receivables Turnover Ratio
Inventory Turnover Ratio Included
A low turnover rate may point to overstocking, obsolescence, or deficiencies in the product line or
marketing effort.
Fixed-Asset Turnover Ratio Included
Generally, a higher ratio is better, since it indicates the business has less money tied up in fixed
assets for each dollar of sales revenue.
Compensation & Salary Surveys for Employees Working in Roasted Nuts and Peanut Butter
Manufacturing
Compensation statistics provides an accurate assessment of jobs in the Roasted Nuts and Peanut Butter
Manufacturing industry and national salary averages. This information can be used to asses which positions are
most common, and high, low, and average annual wages.
Average
Percent of Bottom Upper
Title (Median)
Workforce Quartile Quartile
Salary

23. Management occupations 5%
Chief executives 0%
General and operations managers 1%
Office and administrative support occupations 11%
Installation, maintenance, and repair occupations 5% INCLUDED
Production occupations 41% Order at top of page
Food batchmakers 8%
Packaging and filling machine operators and tenders 11%
Transportation and material moving occupations 22%
Packers and packagers, hand 6%
Source: Bureau of Labor Statistics
Companies in Roasted Nuts and Peanut Butter Manufacturing and Adjacent Industries[PREMIUM]
Company Address Key Contact
INCLUDED INCLUDED INCLUDED
Public Roasted Nuts and Peanut Butter Manufacturing Company News
Web scan for recent news about publicly traded companies in the Roasted Nuts and Peanut Butter Manufacturing
industry.
Government Contracts Related to Roasted Nuts and Peanut Butter Manufacturing
In 2010, the federal government spent a total of $39,156,085 on Roasted Nuts and Peanut Butter Manufacturing. It
has awarded 81 contracts to 28 companies, with an average value of $1,398,432 per company.
Top government vendors:
Company Federal Contracts Total Award Amount
INCLUDED INCLUDED INCLUDED

24. Recent News about Roasted Nuts and Peanut Butter Manufacturing
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International ...:DUBLIN----Research and Markets has announced the addition of Supplier Relations US, LLC's new report "Other Snack
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$18.4 ...:DUBLIN----Research and Markets has announced the addition of Supplier Relations US, LLC's new report "Other Snack Food
Manufacturing Industry in the U.S. and its International Trade [Q4 2009 Edition ]" to their offerin