3. 3
PEMBERTON FOOTPRINT
Snack Food Division
Food Bars, Cookies &
Sweet Baked foods
Softies
Cookies
Home style
Muffins &
Doughnuts
5 Billion in
Sales (2011)
Own & Uses
Direct Store
Delivery DSD
•Acquisition of Krispy Inc. in 2008 – First step to enter Salty Snack Market
4. 4
SPECIFIC DIRECTION FOR PRODUCT
DEVELOPMENT
BUILDING A COLLECTION OF ATTRACTIVE DURABLE
BRANDS
DSD SYSTEMS TO INCREASE REVENUE & PROFITS
BUILDING OR ACQUIRING CAPABILITIES IN SALTY SNACK
CATEGORIES
-Pemberton’s President
5. 5
US CRACKER INDUSTRY
Estimated
6.9 billion
in 2011
Increased growth
of 6.2% in
General(All other)
in 2010
CAGR of 2.2%
from 2008 – 10
Annual growth
forecasted
between 10-14%
for crackers with
filling
75
9
9
6
1
General(All Other)
Saltines
Crackers with fillings
Graham crackers
Others
Three Largest
Competitors:
•Kraft Food Inc
(Nabisco Brands)
•Pepperidge
Farm•Kellogs Co.
6. 6
2009 Krispy Sales Performance
Krispy Single-Serve Sales Performance vs. Plan
2009 ($ millions)
Plan 2009 Actual % to Plan
Krispy Retail $97.50 $50.80 52.10%
Krispy Vend $23.40 $18.00 76.90%
Total Krispy
Single-Serve
$120.90 $68.80 56.90%
7. 7
MARKET & CONSUMERS
74% respondents
consumed crackers
on regular basis.
34% ate them as
part of Regular Diet.
53% considered
overall
Healthfulness.
Standalone flavor
was the number one
criterion in cracker
purchase decision.
Mintel
Study
8. 8
MARKET TREND
Healthier & Conveniently packaged
Crackers for the Consumers
PEPPERIDGE
FARM
GOLDFISH
(2010)
KELLOGS
KEEBLER
TOWNHOUS
E FLATBREAD
(2010 )
KRAFT’S
NABISCO
WHEAT
THINS
FLATBREAD
(2009)
9. 9
Krispy Single Serve v/s Krispy Natural
Krispy Natural Re
Launch
Krispy Single Serve
10. 10
KRISPY NATURAL PRODUCT STRATEGY
Increasing Package sizes to Multiple servings
Improving taste by introducing new flavors
Healthfulness – An important Factor
100% whole wheat
Natural Ingredients
11. 11
MARKETING STRATEGY
• Competitors favored
to promote productsPUSH STRATEGY
• Focus on Extensive
advertising &
merchandising
• Aggressive plans for
Trade promotions
PULL STRATEGY
12. 12
DISTRIBUTION
DSD
system
May not work for Cracker business.
So Pemberton hired “Krispy force”
for distribution system.
Longer Shelf life of Crackers
Poor present capacity of Trucks
14. 14
SWOT Analysis
Strengths
1. World renowned product development
labs.
2. Product mix
3. Company Owned DSD
Weaknesses
1. Capacity constrains of
DSD for Krispy natural
products.
Opportunities
1. Market research shows consumer
dissatisfaction with flavor and taste
experience of current cracker brands.
2. Cracker market fundamentals were
attractive.
Threats
1. Fritto-lays entering the
cracker market.
2. Modest increase of 1%
sale in southeast.
15. 15
Product Testing Summary
Positive Purchase Intent % Testers that preferred taste of
(Definitely or Probably Would Buy) Krispy Natural over leading brand
Crackers with Filling
White Cheddar 92% 78%
Smoked Gouda 77% 65%
Chipotle Cheddar 78% 64%
Creamy Swiss 80% 72%
Tomato Basil 85% 75%
Vegetable Herb 77% 50%
AVERAGE 82% 67%
Flat Crackers
Smoked Cheddar 81% 61%
Sundried Tomato 80% 58%
Cracked Pepper &
Olive Oil 80% 55%
Roasted Garlic 81% 59%
AVERAGE 81% 58%
16. 16
MARKET SHARE
All other Cracker Buisness(in Millions) 5100
Ceackers with fillings(In Millions) 660
Manufacturer sales of "All Other" Crackers % Lost
In 2009 In 2010
Kraft 37.80% 37.00% -0.80%
Kellogg 28.90% 28.10% -0.80%
-1.60%
Market loss in Millions -81.60
In 2010
Manufacturer sales of Crackers with Filling
2009%
Share 2010% Share
Kraft 34.70% 32.70% -2.00%
Lance 31.50% 29.90% -1.60%
-3.60%
Market loss in Millions -23.76
Crackers with filling segment growth of opportunity is 10-
14%
Estimated Dollar Shares of Market
In 2011 in 2011
Columbus Southeast
Pretest
Market
Post
% Market
lost
Pretest
Market
Post
Kraft 40% 33% -7% 34% 32%
Kellogg 25% 22% -3% 23% 22%
Pepperi
dge
Farm 11% 10% -1% 10% 10%
Krispy 0% 18% 18% 9% 10%
18. 18
INTERPRETING MARKET RESULTS
1. Grabbed 18% market share in Columbus as a new
entrant in salty snacks business.
2. Kraft, Kellogg and Pepperidge in total lost 10% of
market share, despite of higher demands cracker
products since 2010 . ( 6.2% for “All other crackers
and 14% for cracker will fillings).
3 Forecasted National roll out sales figures in Columbus
and Southeast scenario for 3rd year depicts PBT more
than 13 % and sales more than $500 millions.
19. 19
POSSIBLE COMPETITIVE RESPONSES TO
NEW BRAND “FRITTO-LAY”
• Launching more new product mix as per customer
taste and keeping health as a priority concern.
• Optimization of DSD system for Krispy natural
product for cost reductions.
20. 20
RECOMMENDED FOR A NATIONAL ROLLOUT
1. More than 60% tasters preferred taste of Krispy natural over
other leading brands.
2. Positive Purchase intent of 81%.
3. Due to the market test results the potential of a successful
national rollout seemed to be positive
