-Krispy natural will provide pemberton with its next generation product

-provide the foothold we need to dominate the salty snack market

-market share results were double what the company had projected,
however southeast results fell well below managements expectations
-fredrick worried how he would draw conclusions from test market data
that was so disparate, questioned if marnes high expectation were
realistic
-majority of sales were from softies cookies and homestyle muffins and
doughnuts
-pemberton was the snack food division of candler enterprises, candler
also operated a beverage division, quick service restaurants and a pet
care division
-candlers 2011 revenue was 18 billion, pemberton was 5 billion of that
-pemberton income as a percentage of sales for 2011: 7.7%
-companys driving force was its culture of innovation, achieved a
compounded annual growth rate of 14% CAGR for revenue over the
past 5 years, growth rate for the overall cracker industry from 2008 to
2010 was 2.2 CAGS
krispy singleserve: 2008, underperformance was a result of limited
product line which made it difficult to command any sort of presence in
supermarkets, taste survey showed it did not deliver the flavor
satisfaction scores we expected
krispy relaunch, changes to marketing strategy, pemberton r&d labs
were engaged to improve product taste and quality. Rebranding of
product to krispy natural. Product line would be extended beyond
single serve offerings, multiple serving package sizes and more flavor
options
consumer taste test shows 77-92% positive purchase intent for new
krispy natural flavors
year 3 marketing expenses, advertising was 33 million and
merchandising was 37 million
pricing of 155% the catteogy average cost per ounce, pricing would be
similar to competiton but less quantity or weight
-key strategic priorities
1. building a collection of attractive, durable brands
2. leverageing leading marketing, sales and dsd systems to increase
revenue and profits
3. Building or acquiring capabilities in salty snack categories

retail cracker sales in the us reached 6.9 billion in 2011, 75% of this
was categorized in a all other crackers segment.
Kraft food, Kellogg, pepperridge farm made up 75% of the cracker
market in 2010, kraft sustain share losses over the past three years
Mintel study reported that 74% of respondents consumers consumed
crackers on a regular basis and 34% ate them as part of regular weekly
diet, crackers were the top salty snack, over half of the respondents
liked crackers that were conveniently packaged in easily portable
quantities
54% of respondents considered healthfulness
retail sales of all other crackers were 5.1 billion in 2011, a 6.2 increase
over 2010, segment was forecasted to grow 6-7% per year

Saltines and crackers with filling

Graham crackers
Bread sticks and matzoh crackers

18% market share

6%
Less than 2%

Sales
100%
Cogs
78.8%
Brand advertising and marketing
7.7%
Pretax contribution
13.5%
Profit after tax
7.7%
-direct store delivery distribution, directly delivers to retail outlets
which maximizes sales and profit grouth
option 1 premium price positioning
- better able to compete with major brands
- higher profit margin
- con: low economy of scale
option 2 feature based positioning
- pros include health conscious food trend, aligned with company
strengths in r&d
- cons include association with their cookie snacks, crackers may
not be healthy in the long run, healthy substitute snacks