This presentation tells what all things was done by krispy after a huge failure and relaunch of Krispy as Krispy natural. And is based on case study done using Harvard Business Review.

1. Launching Krispy Natural:
Cracking The Product Management Code
http://www.bvv.cz/salima/aktuality/crispy-natural-zdrava-svacinka-z-polska/
1

2. Candler
Enterprises
($ 18 Billion)
Beverage
Division
A Quick
service
restaurant
division
Pet care
division
Pemberton
(snack food
division)
http://www.pri.org/stories/2014-12-24/baking-great-cookies-not-just-art-its-science
http://www.todayifoundout.com/index.php/2010/10/why-crackers-have-holes/
2

3. Pemberton’s income as a percent of sales for 2011 was:
Category % of sales
COGS (cost of goods and services) 78.8%
Brand Advertising and Marketing 7.7%
Taxes 5.8%
Profit after tax 7.7%
TOTAL 100%
Pemberton: 3

4. Pemberton:
4
Three key strategic priorities for the company:
1) Building a collection of attractive, durable brands.
2) Leveraging leading marketing, sales and DSD (direct store delivery)
systems to increase revenue and profits.
3) Building and acquiring capabilities in salty snack categories.
http://www.thinkmulti.com/get-ahead-target-marketing/

5. 5
The U.S. Cracker Industry
Mintel study in United States reported that:
1) 74% respondents consumed crackers on a regular basis.
2) 34% ate them as part of regular weekly diet.
3) 53% respondents considered overall healthfulness an important factor.

6. 6
The U.S. Cracker Industry
2009 share 2010 share
Kraft 37.8% 37.0%
Kellogg 28.9% 28.1%
Pepperidge Farm (Goldfish) 13.9% 14.2%
Private Label 4.6% 4.8%
Other 14.8% 16.0%
“All Other” Crackers:
The broad all other cracker segment experienced a 2.1% CAGR for period from 2008 to 2010.
Manufacturers sales of “All Other” Crackers.

7. 7
The U.S. Cracker Industry
2009 share 2010 share
Kraft 34.7% 32.7%
lance 31.5% 29.9%
Kellogg 15.5% 21.0%
Private Label 8.0% 8.2%
Other 10.2% 8.1%
Crackers with fillings:
After flat sales from 2005 through 2009, the crackers with fillings segment experienced strongest growth
of approximately 14% in 2010.
Manufacturers sales of Crackers with filling market share.

8. 8
Krispy Line
In 2008, Pemberton took first step to enter the salty snack market with the acquisition of Krispy Inc.,
Krispy products were marketed as mobile, “ Grab and Go” snacks with a strong presence in vending
machines and convenience stores.
Plan 2009 Actual % to plan
Krispy Retail $97.5 $50.8 52.1%
Krispy Vend $23.4 $18.0 76.9%
Total Krispy Single-Serve $120.9 $68.8 56.9%
2009 Krispy single-serve sales performance vs plan.

9. 9
Krispy Relaunch
Marketing Strategy
After a huge Failure, Company analyzed the causes of it, and plan accordingly for the relaunch.
1) Pemberton R&D labs were engaged to improve the
product taste and quality.
2) Rebranding as Krispy Natural, to attract health conscious
customers.
3) Extending product line beyond single serve and
introducing more flavors.
http://www.anything4restaurants.com/products/sunshine-krispy-original-saltines-500-ct-207676.html

10. 10
Krispy Relaunch
After a lot of R&D products were sent to Taste tests. The test result showed
77%-92% positive purchase intent for new Krispy Natural Flavors.
Now, Krispy naturals expected a minimum sales of $500 million during year
one of national distribution and a steady-state pre-tax profit contribution
of at least 13%
http://www.anything4restaurants.com/products/sunshine-krispy-original-saltines-500-ct-207676.html
($ in millions) Year 1 Year 2 Year 3
Dollar Sales $500 $580 $700
Growth 16% 21%
Dollar Share 9% 10% 11%
Brand Projections

11. 11
Krispy Relaunch
Krispy’s Focus:
1) More flavors
2) 100% whole wheat
3) Natural ingredients
4) Pricing
http://www.builtlean.com/2013/07/16/whole-grains-healthy/

12. Krispy Inc.
 Didn’t target health conscious
customers
 Regional brand
 Single serve cracker packages
 Not a lot of flavor options
Krispy Natural
 Targeting health conscious customers
 Trying to go national
 Multi serving cracker packages
 More flavor options, focused on taste.
12
Krispy Relaunch
As Krispy Naturals

13. 13
Test Market Plan
Source : HBR

14. 14
Test Market Plan Results
Krispy Natural was officially launched in two market regions
1) Columbus (here Krispy brand has no prior presence)
2) South eastern united states (where brand Krispy has prior presence)
Region Prior-test share Expectations Actual
Columbus 0% 9% 18%
South-east 9% 15% 10%
https://en.wikipedia.org/wiki/Southeastern_United_States
http://www.istockphoto.com/in/photo/columbus-map-ohio-usa-gm185012203-18987292

15. 15
Test Market Plan Results

16. 16
Strengths
1) World renowned product
development labs which it uses for
product development and R&D
2) Culture of innovation
3) DSD used for deliveries.
4) Premium Pricing Startegy
http://www.thirdeyeassociates.co.in/why-us/

17. 17
Weaknesses/ threats
1) Capacity Constraints for DSD for
Krispy Natural products
2) Most of profit goes on heavy
marketing and advertising
3) Fritto-Lay Entering Cracker market
4) Major struggle in southeast to
increase sales
http://jurinnov.com/the-threat-of-rogue-certificate-authorities/

18. 18
Competitors
Partial Competitive Analysis.
Source : HBR

19. 19
Sales And Channel Response
Midwest division sales manager Wanda Fitzgerald explained “We have great
relationships with the trade:
1) Our DSD reps are in the stores every week and the store managers respect our
knowledge of the business.
2) The large chain headquarter buyers were particularly impressed with the consumer
research results and inventory turn estimates for Krispy Natural.
3) The pull marketing really created a buzz and customers were coming to the stores
asking for Krispy Natural by name.
4) They also loved all the promotional activity and consumer advertising.

20. 20RECAP
Pemberton (snack
food division)
US Cracker industry
(Mintel study etc.)
Krispy Plans for new
launch
Krispy Relaunch as
Krispy Natural
Test Market Plan
and Results
Strength, weakness,
threats, sales etc

21. 21
Prof. Sameer Mathur
IIM Lucknow
Divyanshu Goyal
IIT Jodhpur
DISCLAIMER
This presentation is created by Divyanshu Goyal, IIT Jodhpur, during a Marketing
Internship under Prof. Sameer Mathur, IIM Lucknow