Launching Krispy Natural:Cracking the Product Management Code

Candler Enterprises – Multinational Snacks

And Beverage Manufacturer

PEMBERTON PRODUCTS – Snack food Division

About Pemberton

• Sold Packed Food bars, Cookies and Other Baked Goods.

• Market leader in US Cookie and bakery segment of sweet market.

• Pemberton contributes 28% of Candler’s total sales.

PEMBERTON

Cookies and

Bakery Product

CAGR of 14%

DSD system

5 Billion Revenue

Being the leader in sweet snacks market,Pemberton tried to enter into salty snacks market by acquiring Krispy.INC

US Loves Cracker US Cracker industry had a retail sale of approximately $6.9 Billion in 2011

2.2% increase in CAGR from 2008 – 2010

74% of respondents consumed cracker on a daily basis

Crackers were the most consumed snacks

Reasons for failure in 2009 • Production line was limited• As per survey conducted the taste was not as expected

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%

Expectation vs Reality

KRISPY…

Relaunch WHY

Market was huge10-14% was the expected growth every year Market utilisation was not at its full.

Relaunch HOW?Some important changes were made

1)R&D lab were all set to improve the taste.2)Instead of single serving package, multiple serving

package size were introduced3)After relaunch Krispy Inc. was renamed to KRISPY

NATURALS which target health conscious people.

• Multiple serving package• Targeting health conscious customers• Increased flavour option with improved taste

Krispy Natural

• Limited Product line• limited flavour available• Band operated over particular regions

Krispy Single serve

Comparison

Strategies for Success

• Product strategy• Marketing Strategy• Distribution Strategy• Pricing Strategy

1.Product Strategy

New Flavour

Multiple Serving Package

Use of 100% whole wheat and natural ingredient

2.Marketing Strategy

PUSH

PULL

1. Huge advertisements were done2. Promotion of products

aggressively3. Attractive plans for trade

3.Distribution Strategy

• Direct store delivery (DSD)• Longer shelf life of product • Hired a team of 5 representative for a region called

“KRISPY FORCE”

4.Pricing StrategyKrispy sought a premium pricing strategy

On the basis of “Visual Price” retail price was same as of competitor but quantity was less

Sales Objectives

Expansion of sales over various regionExpectation of Minimum sale of $500 million during a year13% steady-state pre-tax profit contribution.

RESULT

SWOTStrength

Once was a market leader.

Renowned labs for R&D.

DSD Strategy.

Weakness

Short life of Krispy products on shelfs

Opportunity

New launch

New product

Threat

Frito-Lay entering the market

Response to Frito-Lay

Launch more product keeping heath as a priority with maintain the taste factor

Launch new flavours and attractive packing

Cost reduction by optimising different system specially DSD .

DisclaimerCreated by Mayank Lonkar, RCOEM, Nagpur, Maharashtra during a marketing internship under Prof. Sameer Mathur, IIM LUCKNOW