1) Pemberton Products launched Krispy Natural, a line of wholly natural crackers, to revitalize its failing Krispy brand and build on its leading position in the cookie and bakery snacks market. 2) Market testing showed high purchase intent and taste preferences for the new natural crackers. After launch, Krispy Natural gained an 18% market share in Columbus and increased its share in the Southeast market. 3) Projections estimate Krispy Natural could generate $700-800 million in annual sales nationally, though competition from Frito-Lay entering the cracker market poses a threat. Pemberton plans to leverage its distribution systems and focus on health to expand the brand.

1. LAUNCHING KRISPY NATURAL:
CRACKING THE PRODUCT
MANAGEMENT CODE
Shivam Shekhar, IIT Roorkee

2. PEMBERTON’S OWNERSHIP &
OTHER SISTER CONCERNS
Candler
Enterprises
Revenue - $18bn
Snack Food
Division
(Pemberton
Products)
Beverage Division
Quick service
restaurant Division
Pet Care Divisions

3. PEMBERTON AT A GLANCE
• Market leader in cookie and bakery snacks segment
• Employs direct store delivery(DSD) distribution system which helps in
maximized knowledge of market, growth in revenue and profits
• Wide product line
• Cookie, baked goods, muffins, food bars
• Acquired Krispy Inc. in 2008 and forayed into the salty snack market
• Krispy’s failure in adhering to projections called for overhaul of entire product
line and marketing strategy

4. STRATEGIC PRIORITIES
• Building attractive and durable brands
• Leveraging leading marketing, sales and DSD systems to increase revenue
and profits
• Building/acquiring capabilities in salty snack segment

5. U.S. CRACKER INDUSTRY
• Revenue was nearly $ 7bn in 2011
• CAGR of 2.2% for the entire industry
during 2008-2010
• Mainly competed by 4 firms
• Kraft Foods
• Kellogg Co
• Pepperidge Farm
• Pemberton Products
76%
9%
9%
6%
Market Share
All other Saltines Cracker with fillings Graham crackers

6. • Ranked higher than Potato chips for the snacks in a survey
• Purchasing criterion
• Standalone flavour
• Easily portable & convenient packaging
• Desire for healthy products
• Kraft & Kellogg had lost market share to Pepperidge Farm in previous few
years owing to several factors

7. KRISPY RELAUNCH
Krispy Single-Serve
• 2 varieties in 5 flavours
• Not so natural ingredients
• Less suitable to health conscious
• Existing regional brand identity
• Single-serving packages only
Krispy Natural
• 2 varieties in 10 flavours
• Wholly natural ingredients
• More suitable to health conscious
• New brand identity
• Single-serving as well as multi-serve
packages options

8. STRATEGY FOR LAUNCH OF
KRISPY NATURAL
Product
• Offering various packaging sizes
• Wholly natural ingredients
• More market acceptance owing
to better taste
• Several flavours across the line
Marketing
• Aggressive plans for pull spending
and trade promotions
• Others believed on push strategy
but Pemberton went with pull
strategy
Distribution & Pricing
• DSD distribution is extremely
important
• Premium-point pricing strategy
• Approx 155% of average market
price per ounce

9. SWOT ANALYSIS
•Frito-Lay
entering cracker
market
•Attractive
market
•High
acceptance
rate in surveys
•Capacity
limitations of DSD
•R&D labs
•DSD distribution
•Product line
Strength Weakness
ThreatsOpportunities

10. PRODUCT TESTING SUMMARY
• 7/10 products had positive purchase intent greater than 80% and others
were in 70s
• 6/10 testers preferred taste of Krispy Natural over other leading brands
• White Cheddar filling cracker has taste preference of 78% and positive
purchase intent of 92%

11. MARKET SCENARIO CHANGE
In Columbus
Pretest Post-test
Kraft 40% 33%
Kellogg 25% 22%
Pepperidge Farm 11% 10%
Krispy 0% 18%
In Southeast
Pretest Post-test
Kraft 34% 32%
Kellogg 23% 22%
Pepperidge Farm 10% 10%
Krispy 9% 10%
Annual national projections
based on Columbus projections $ 1,000 mn
based on Southeast projections $ 550 mn

12. INTERESTING POINTS
• Pemberton acquired 18% market share in Columbus as a new entrant and
increased its share from 9% to 10% in Southeast market
• Other three big players lost 11% market share in Columbus and 3% in
Southeast market
• Projected nationwide sales figure may go in excess of a billion dollar if they
can repeat the feat they did in Columbus
• An approximate projection of at least $ 700-800 million can be achieved
believing that some areas they will get Columbus-like success and other
areas they do not perform at the same level
• Frito-Lay is launching into cracker market. Pemberton could increase its
product mix, optimize DSD, promote its premium price point and health-
friendly concerns