Candler Enterprises is launching an expansion of its Krispy Natural cracker line nationally after a successful test market. The summary is: 1) Krispy Natural crackers achieved double projected sales in its Columbus, Ohio test market and was 5% below projections in the Southeast. 2) National projections estimate $500 million in first year sales and a steady state pre-tax profit contribution of 13% of sales. 3) The expansion will leverage Candler's marketing, sales and distribution systems and compete on quality and brand reputation against competitors like Frito-Lay entering the cracker market.

1. Harvard Business School
Launching Krispy natural

2. Candler Enterprises– A Multinational beverage and snack goods
manufacturer. with the revenue figures of $18 Billion in 2011.
Pet Care
Candler
Enterprises
Pemberton
Multinational
Beverage
Quick Service
Restaurant

3. Pemberton Products-
• Snack food division : Packaged food bars, cookies, sweet baked goods
• CAGR :14 % in last 5 yrs.
• Market Leader in Sweet Snack Market of US
• Unique DSD

4. Income as a percent of sales 2011

5. Main Characters
Ashley Marney
(Executive V.P.
Sales &
Marketing)
Brandon Fredrick
(Marketing
Director)
Burt Spivey
(Chief Operating
Officer)
Patricia Williams
(President)

6. Strategic Priorities of Pemberton
Products
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.

7. Pemberton entered Salty Snack Market with Acquisition of
Krispy Inc in 2008 but fell short of projections after its
launch in 2009
This Failure was attributed to
• Limited Product Line
• Taste Dissatisfaction

8. • Retail sales $6.9 billion in 2011
• Compounded Annual Growth rate - 2.2% for 2008-10
• Mintel study :74% respondents consumed crackers on a regular basis
and 34% ate them as part of regular weekly diet.
• Segments like crackers with filling expected to grow 10- 14% per year.
US Cracker Industry Figures & Projections

9. Krispy Natural US Cracker Industry Potential
+
Future Plans in view of strategic priorities
=
CrackerLine Extension
New Product Introduction :

10. Krispy Natural :Product Management
Product Strategy
• Package sizes increased to Multiple servings
• High Nutritional content: 100% whole wheat, natural
ingredients ,150 calories etc
• New Flavors in both “Cracker with filling” & “F lat
cracker” segments

11. The Study shows varying Purchase intents for different flavors and
their preference over other brands.

12. Marketing Strategy Pull Strategy
• Focus on extensive Advertising & Merchandising
• Aggressive plans for Trade promotions
Projected expenses

14. Promotional Plan in Columbus, Ohio

15. Distribution Strategy: DSD distribution & Krispy Force
team
Pricing Strategy: Approx 155% the category average
cost per ounce, Visual Price same but quantity reduced
Krispy Natural

16. Sales Objectives
• Minimum sales of $500 million during year one of
national distribution
• Steady state pre tax profit contribution of at least
13% Sales Projections

17. Brand Projections

18. Test Market Plan &Results:
• Sept,2011- launched in two test market regions:
Columbus , Ohio, and a trio of cities in the
Southeastern United States. For 16 week test period
• Sales share was double the projected value in
Columbus
• Share was 5% less than projected in Southeastern
US due to low shelf space

20. Short term responses
• New product testing in process
• Increase trade spending and consumer promotions
• Increase A & M
Long Term responses
• Spend heavily to counter national roll- out
• Capitalize on pull Product line improvements
• Compete on quality and brand reputation
Impact on Competitors

22. • The Test Market reports clearly suggest that Krispy Natural
has a very promising future crossing sales and pretax profit
contribution barriers
• Annualized National Projections are definite to cross the
expected threshold of $500 million
• It damages the market share of other leading brands
National Roll Out

24. • 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.
Strategy against Frito Lay

25. 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.
SWOT Analysis

26. • Intro to Candler Enterprises (Pemberton Products)
• Characters of Pemberton
• Strategic Priorities
• Past Records in Salty Snack Market
• US Cracker Industry
• Krispy Natural Product Management
• Sales
• Objectives
• Test Market Plan
• Results
• Impact on Competitors
• National Roll Out
• Strategy against Frito Lay
SUMMARY

27. Disclaimer
Created by Jahnavi Uday Shah, VIT University,
Vellore, during marketing internship under
Prof. Sameer Mathur.