Pretzel Crisps was founded by serial Entrepreneurs Sara and Warren Wilson. Warren is the get at it and go person… Sara is the detail person… the perfect "ying and yang" team that books on entrepreneurship write about.
Their original creation was The Funnel Cake factory, first opening as a store in Paramus Park Mall in New Jersey and then a line of package funnel cakes for sale in supermarkets. In the 80's bagels were a hot market so their success with Funnel Cake Factory's products led to the New York Style Bagel Chip Co. In the 90's they sold the company to RJR Nabisco and once again turned their entrepreneurial zeal to the creation of the world's first flat pretzel, Pretzel Crisps.
I interviewed Perry Abbenante, VP of Marketing about their secrets to new product launch in the highly competitive snack category.
Tell Us Why Your New Product Launch is Focused on the Deli?
"When Warren and Sara developed New York Style Bagel Chips, they did not have money for expensive slotting allowances. You know the center of the store, the traditional snack aisle, is expensive… FritoLay and Snyders make it hard to get toe hold. The deli buyers operates differently and view new products as providing value other than slotting to drive product sales. So the new product launch for Pretzel Crisps used that same distribution channel strategy .
Perry feels people don't go to deli for snacks… the deli is a place for appetizers and has way less competition. Pretzel Crisps created their own segment that no one else thought of… flat pretzels as an appetizer when you are entertaining. Customers who are planning parties need a variety of appetizers and they think of the deli first. "We positioned Pretzel Crisps as an accompaniment for dips, cheeses and deli meats. The snack aisle is thought of for "the game" or just individual snacking."
What do you do differently from the competition that makes you successful in new product launch where others fail?
"As I mentioned earlier we are positioned as an appetizer belonging in the deli. Our competition in the deli consist of brands like Stacy's Pita chips, New York Bagel Chips and Athenos. Next we are positioned as pretzel cracker, more versatile than the traditional pretzel and without the filling of regular pretzel. That leads us to being a healthy, better for you, snack - no cholesterol, transfat, etc."
"Since we are not competing directly with pretzels we directed our promotional dollars to markets that index lower for pretzels… because Pretzel Crisps are not really pretzels. For example California indexes lower for pretzels and higher for education, affluence and healthier lifestyles and attitudes. So California is a strong market for us and a better return on our marketing investment."
What is your Sales Pitch to the retailer? What motivates the retail buyer to give you space?
"We are lucky that we have someone on staff who was a former category manager… that's me! I handled Global Buying for Whole Foods. I build the new product presentations… anticipate the tricky questions that may come up… I know what a buyer wants. I had hundreds of products pass my desk every year"
I see hundreds of Food Entrepreneurs and most simply don't know how to create a winning retail buyer sales pitch . Perry says you need to know what motivates the buyer to say to say "I can sell this. A supermarket buyer needs to see a roadmap for your new product launch and answer the questions 'You need to tell me why I should give you shelf space".
What things failed and how did you learn from them?
We continue to monitor everything we do and will readily admit what does not work. For example we designed a smaller package for C Stores and found the packaging colors and product flavors did not work for that distribution channel. Since the packaging was not "c-store friendly, product was not moving off the shelf. They immediately stopped, turned on a dime and repackaged and repositioned their 2 oz line… it worked!
How do you Use Social Media in your Marketing Mix
Social media is a go to tool and their Facebook Pretzel Crisps Page , having over 100,000 fans, are evidence to a strong following that surely are brand evangelists and provide that all important Social Word of Mouth . "Social media allows us to engage our customers frequently" according to Perry.
Pretzel Crisps( @pretzelcrisps) uses Twitter in a very interesting and effective way to execute a Social Sampling campaign. In markets such as Boston, New York and Washing DC, they have their own people monitor sentiment on Twitter. Their teams listen for certain key words across tweets. The search results on their keywords allow them to connect with potential brand fans and then deliver samples to their house. Those people then retweet to followers about the experience! They literally have 100 Million impressions through this high tech Social Word of Mouth.
Food Entrepreneurs Takeaway - Tips for a Successful Sales Pitch
Perry as a former Whole Foods buyer knows what motivates the retail buyer to give Pretzel Crisps valuable shelf space. They are successful yet they are small in comparison to the major snack kings like Frito Lay. Perry does not have a ton of cash, yet they are successful in new product launch so we can learn a great deal from the success of Perry in launching Pretzel Crisps.
Many food entrepreneurs don't understand the cost to retail scenario, the fancy term is Retail Value chain. There are middlemen in the retail distribution channel and each has a gross margin requirement. The rule of thumb is: multiply your products cost of goods (basically the food, packaging and labor) by 3 and that is a reasonable estimate of your expected retail price.
Perry as a former buyer urges food entrepreneurs to seriously address trade promotions starting with the suggested retail price (SRP) that can be supported in your category, creating a promotional calendar with multiple promotions to drive the all important repeat purchase. New Product Development is more than the food… you have to design your product financially to insure you have enough money built-in for promotions to have a sustainable and profitable food brand.
Most importantly to understand… the buyer NEEDS TO MAKE MONEY ON YOUR PRODUCT!