Harvard Business Case Study on Krispy Natural.

1. Harvard Business
School Case

3. Pemberton Beverage
Quick
Service
Restaurant
Pet Care

4. Snack food
division of
Candler
Enterprises
Softies cookies
and Homestyle
muffins and
doughnuts
Food bars,
cookies and
other baked
goods
Market leader in
U.S. cookie &
bakery snack
segment

5. Pemberton’s Income Statement (% of Revenue)

6. Owns and
uses Direct
Store
Delivery
(DSD)
Building a
collection of
Attractive and
Durable Brands
Acquired Krispy
Inc. in 2008-
first step
towards entry in
salty snack
market

7. Patricia
Williams:
President
Ashley Marne:
Executive
Vice-President
(Sales & Marketing)
Burt Spivey:
Chief Operating Officer
Brandon Frederick:
Marketing Director

8. - by Patricia
Williams
 Building a collection
of attractive, durable brands.
 Leveraging leading
marketing, sales and DSD
systems to increase
revenue and profits.
 Building or acquiring
capabilities in salty snack
categories.

10. Reached an estimated
$6.9bn in 2011
The growth
rate for the overall
cracker industry
from 2008 to 2010
was approximately
2.2% CAGR
Annual growth was
forecasted between
10–14% for
Crackers with filling
over the next
several years

11. Together
account for
approx.75%
of the cracker
market in
2010.
Kraft Food
Inc.
Kellogg Co.
Pepperidge
Farm

12. .

13. Krispy Natural
Relaunch
Krispy Single
Serve

14. 74% of
respondents
consumed
crackers on a
regular basis
53% of
respondents considered
overall healthfulness an
important factor in their
cracker purchase
decisions
34% ate them
as part of
regular weekly
diet
A Mintel study of salty snacks in the United States reported that:

16. Healthy snacks-
100% whole wheat
and natural
ingredients
Improve
taste by
introducing
new
flavours
Increase
package
sizes to
multiple
servings

17. • Competitors favored to
promote products.Push
Strategy
• Aggressive plans for trade
promotions.
• Focus on extensive
advertising & merchandising.
Pull
Strategy

18. > 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.

19. Same retail
price as that
of
competitors
but lesser
quantity.
Sought a
premium
strategy.
Priced at
155% above
the category
average cost
per ounce.

20. Minimum
sales of
$500
million
Natural
distribution
of crackers
Steady
state pre-
tax profit
of atleast
13%

24. Kraft, Kellogg and Pepperidge in total lost
10% market of higher demands share,
despite of higher demands cracker
products since 2010.
Grabbed 18% market share in Columbus
as a new entrant in salty snacks
business.
Forecasted National rollout sales figures
in Columbus and Southeast scenario for
3rd year depicts PBT more than 13% and
sales more than $500 million.

27. Candler
Enterprises
Pemberton
Products
What’s so
Special?
The Dream
Team
Key Strategic
Priorities
U.S. Cracker
Analysis
Competitive
Analysis
Krispy Natural
VS Krispy Single
Market &
Consumers
Product
Marketing
Distribution
Price
Sales Objective
Strengths
Weaknesses
Opportunities
Threats
Interpreting
Market Results
Possible
Competitive
Response to
‘FRITTO-LAY’
Key Indicators
for a National
Rollout

29. Created by Murli Mittal, Sri Venkateswara College (DU),
during a marketing internship under Prof. Sameer Mathur,
IIM Lucknow.