6. 1. Building a collection of attractive, durable brands
2.Leveraging leading marketing, sales and DSD systems
to increase revenue and profits
3.Building or acquiring capabilities in salty snack
categories
9. ⢠Retail cracker sales in US reached $6.9
billion in 2011
⢠âAll otherâ cracker segment has almost
75% share
⢠Growth rate for overall cracker industry
from 2008 to 2010 was approximately
2.2% CAGR
⢠Volume Sales rose in 2010
⢠Market leader Kraft has sustained share
losses over the past 3 years
Market Share
Rest
Kraft food+Kellogg Co+Pepperidge Farm
10. ⢠Consumption of crackers was frequent
and regular
⢠Mintel study reported 74% of
respondents consumed it on a regular
basis
⢠34% ate them as part of weekly diet
⢠Crackers were the top salty snack in
US
⢠53% of respondents considered
overall healthfulness an important
factor in their cracker purchase
decisions
Market Share
All other
crackers with filling
saltines
graham crackers
11. âAll otherâ Crackers
⢠2.1% CAGR for the period from 2008 to 2010
⢠Retail sales estimated at $5.1 billion in 2011
⢠6.2% increase in sales over 2010
⢠Forecasted to grow at the rate of 6-7% annually
⢠Growth would be driven by healthier, premium
priced products
12. Crackers with filling
⢠Strongest segment growth of
approximately 14% in 2010
⢠Growth is forecasted between
10-14% for the segment over
next several years
⢠Retail sales in US were
estimated at $660 million in
2011, an 11% increase over
2010
15. ⢠Top 3 manufacturers are
1.Kraft Food Inc
2.Kellogg Co
3.Pepperidge Farm
⢠They hold around 75% of market share
⢠Frito Lay is rumored to enter this market
as well by the end of second quarter
Market Share
Rest
Kraft food+Kellogg Co+Pepperidge Farm
16.
17. Krispy single serve
⢠Regional brand
⢠Product marketed as mobile, âgrab and goâ
⢠Limited product line
⢠Did not deliver on flavor satisfaction test
⢠Performance was far below expected
18. Krispy Relaunch
⢠Rebranded to Krispy
Natural
⢠Product taste and
quality was improved
⢠Multiple serving
package sizes and more
flavor options were
introduced
21. Product
⢠Increasing package sizes to
multiple servings
⢠New flavors were
introduced
⢠Made of 100% whole
wheat and other all
natural ingredients
⢠Consumer taste test
showed a 77%-92%
positive purchase intent
24. Distribution
⢠Effective DSD (direct store delivery) distribution
system
⢠Proper management of shelf inventory and in-
store merchandising
⢠Optimizing the system to account for longer shelf
life of crackers
25. Pricing
⢠Sought a premium pricing strategy
⢠Priced at 155% above the category
average cost per ounce
⢠Retail price for each package would be
similar to competitors in the category,
but there would be less quantity or
weight in the package
28. ⢠Launched in 2 test market regions
⢠Columbus, Ohio had no earlier presence of krispy. So the
company was able to test its ability to sell a completely new line
of cracker products
⢠Krispy force representatives were hired in Columbus. Focused
solely on selling the new line
⢠Other region was a trio of southeastern cities. Company already
had a presence there. Was able to test its ability to reposition
itself as a more premium offering
⢠Advertising and promotion was same in both regions
29.
30. ⢠Columbus doubled the share target, achieving an 18% share. Derived from stealing
competitorsâ share.
⢠Category volume had increased by 30%
⢠In southeast, increase in share was marginal, from 9% to 10%, as against an expectation
of 15%. This was due to less actual shelf space and display activity than expected.
32. Sales and Channel Response
⢠Pemberton sales managers were pleased
⢠Large chain headquarter buyers were particularly impressed
⢠The pull marketing created a buzz
However,
⢠One analyst thought this was because of significant price
discounts, couponing and sampling, which were not sustainable
on national level
⢠Others thought flavor was no better than current brand offerings
35. ⢠Position the product as premium category
⢠Position it as the healthier option
⢠Comparative advertising should be used in
southeast cities- New Krispy Natural ( Tastier,
Healthier and Improved)
⢠Higher introductory discounts in markets
where competition is high
36. Strategy to Counter Frito Lay
⢠If Frito Lay should introduce its own line of crackers,
Pemberton should differentiate Krispy Natural on the
basis of its all natural ingredients
⢠It is a healthier alternative to other crackers
⢠It is a premium product.
This will help Krispy avoid head to head competition with
the biggest, most successful salty snack marketer.
