Product Spotlight: SpongeBob conquers animal crackers

Dec. 28, 2004
Keebler turns its animal cookies over to the undersea cartoon character with delightful results.
Character cookies create an
opportunity for kids to feel
comfortable with the cookie and
enhance the play value of cookies.
By Hollis Ashman and Jacqueline Beckley, Consumer Understanding EditorsAnimal crackers are part of everyone's childhood. Cookie manufacturers count on kids pestering their moms at their favorite cookie aisle location. As the kids grow older, they are likely to look for new cookies in the same location. So it is a way to get kids into the brand franchise and keep them there as they grow older.Nabisco’s Barnum's Animals crackers, created for the 1902 holiday season, are the most popular choice. The package enabled consumers to place the box on the tree and give it as a Christmas present. Keebler for a few years has marketed its Animals Cookies, a line that has used icing, frosting and Lion King characters in attempts to make its mark in this category.With SpongeBob SquarePants Animal Crackers, the subsidiary of Kellogg Co., Battle Creek, Mich., has taken a friendly cartoon character and updated crackers to bring new news to the category.Cookies have always needed new news to keep the consumer (actually gatekeeper mom) from asking why she’s spending so much money on cookies. However, creating new news is not easy, as the marketer and developer only have a few variables to play with. The formulation must stay the same. A coating can be added, the color can be changed … but shape is a fast, easy way to make changes in this category with minimal investment.Understanding the marketplaceThe cookie market has been in a downward spiral for several years now, with only private label gaining share. Sales were upwards of $6.6 billion in 1999, according to Packaged Facts. Sales for 2004 are estimated to come in at $4.7 billion, according to Mintel International, a decline of 3.5 percent in the past year.Key issues the category has faced have been the impact of the low-carb diet, presence and now removal of trans fats, an overall focus on healthier alternatives and private label. Both category leaders, Nabisco and Keebler, have seen 7-8 percent sales declines. Private label grew 2.9 percent in the same timeframe. Private label has been driven by aggressive store merchandising and price. Store brands have been merchandised next to the top-selling brand, including the use of special displays, and most larger store chains have developed a signature brand.The top 10 brands for cookies in 2003 are Nabisco Oreo, Nabisco Chips Ahoy, Keebler Chips Deluxe, Nabisco Newton’s, Pepperidge Farm Distinctive, Keebler Fudge Shoppe, Nabisco Teddy Grahams, Nabisco Snackwells, Pepperidge Farm Classics, and Nabisco ‘Nilla, according to Information Resources Inc. figures. Of these brands, only Nabisco Teddy Grahams could be construed as fitting into the animal cracker framework.Character cookies create an opportunity for kids to feel comfortable with the cookie and enhance the play value of cookies. The animal shape allows kids to develop rituals and imaginative play around their snacking. Licensed characters allow kids to feel an even closer connection to the character via the cookie and their play value.TV character licensing drives a general level of interest and sales, and those licensed characters with movies (such as “SpongeBob SquarePants: The Movie,” released in November 2004) generally report a blip in associated product sales. For manufacturers, licenses can enhance brand equity and help offset price competition from private label. The marriage of strong licenses and major brands also adds fresh merchandising when there are limited product introductions. What's more, licensed products provide value-added opportunities, such as premium offers, cross-merchandising and store events.
Keebler SpongeBob SquarePants
Animal Crackers are available in a
13-oz. stand-up bag selling for $2.99.

The show “SpongeBob SquarePants” began airing in 1999 and has attracted a wide audience beyond the expected 2-11 year olds, with broad acceptance by teens and adults. It generated licensing revenue for Nickelodeon of $750 million last year from more than 100 companies. That was a full 50 percent above expectations. SpongeBob appears on quite a few food products currently, from ice cream to macaroni and cheese, and even Keebler parent Kellogg uses him on a cereal.SpongeBob is a fun, wholesome, edgy, approachable character that both kids and parents like. Keebler is a brand that stands for fun, innovation and imagination. After all, Keebler cookies are baked by elves in a magic tree. Keebler stands for warm, generous and caring values.With the significant reduction in sales of cookies, Keebler is looking to use a licensed character to drive cookie sales and to take share from Nabisco’s Teddy Grahams and Barnum’s Animal Crackers. Keebler has found a way to get kids into the franchise and try to keep them there. The company hopes a licensed character will deliver better play value than Teddy bears, animals and anything to come from private label.InsightsCookies are about the brand, secret recipes, maybe extras in the cookies … moist, chewy, melt in your mouth chips, fresh out of the oven. They are as much about making them with your mom or grandmother as about eating them, ideally straight from the oven.Our Crave It! database innovatively integrates 30 conjoint studies to generate a database that can be used to understand the experience of foods (from product, situation, emotions, and brands/ benefits) in the marketplace.The key attributes of cookies are taste, texture and aroma. They are a snack that can take us back to a memory from childhood. Cookies tend to be consumed after lunch, mid-afternoon or late evening.Key trends are healthfulness and the opposing trend of indulgence.Healthfulness: Manufacturers in the cookie category have faced a number of nutrition issues concerning carbohydrates, calories, trans fatty acids and obesity. These issues helped to contribute to sales declines in both dollar and unit sales.Indulgence: Pleasure is important in this busy world. We have seen many products focused on healthy aspects, but the pleasure of indulgent cookies is still a strong trend. Consumers use sweet carbohydrate-based snacks to deal with the stress and chaos in their world.The experienceKeebler SpongeBob SquarePants Animal Crackers are available in a 13-oz. stand-up bag selling for $2.99. The bag is bright with the colors of the SpongeBob character and the world he lives in under the sea. The brand logo is “Animals” in bright white on black. The SpongeBob image is large and very friendly, almost saying “hello.” A couple of crackers are shown on the bag, so gatekeeper mom can figure out what is really inside.Flavor (aroma and by mouth), texture and appearance are critical to the perception of quality in cookies. The flavor is the bland comforting flavor of a sweet, faintly vanilla cookie. The texture is dense and melts in your mouth, not rapidly but fast enough. The appearance is a definitive version of SpongeBob and his friends. The cookie leaves very tiny bits of cookie on your fingers that you either lick or wipe off. Licking is better. SpongeBob’s image is more crisp and clean than that of other animal crackers.Fascinating understanding: In order to create a fast version of an image, 8 years ago, Nabisco utilized an Imaging Lab (all researchers involved were sworn to not talk about the technology, so Nabisco could get up the learning curve very quickly, before other competitors could gain access to the technology). Think of it as PhotoShop on steroids. A development team could meet in the Imaging Lab (set up to be a creative location), create images on the computer with marketing, product development and operations team members inputting the issues they could foresee (i.e. how would future promotions be built in, how would the formulation react, and might there be yield issues upon baking?). This was done in a 2-hour session. Images were created and shown to consumers. The consumer chosen images were overnighted to Nickelodeon for approval. When approval was given the next day, the PhotoShop image was sent to the die manufacturer, to create the new die insert. This took what was previously a 9-month process and reduced it to 8 weeks. This vision appears to be realized with SpongeBob for Kellogg/Keebler.Our taste testers felt this cookie had a good flavor, a good image and enabled the kids to create imaginative play with the products. While other animal crackers have different bases and some flavor coatings, the imaginative play options with SpongeBob was the key comment every time. Does the product deliver?This brand is about goodness, wholesomeness and fun. The licensed character fits all these goals. (If you haven’t seen or heard SpongeBob, check him out on TV some time.) The cookie’s flavor, texture and image do not get in the way of this fun.Older consumers felt they could easily consume the animal crackers with their kids, so many gatekeeper moms felt is was a good product that would fill the need for a snack. Teens were able to have an edgier character and still be taken back to the comforts of childhood play.How to make the idea biggerWhat a great character! When compared to other animal characters, this one plays for all age groups. One way to make this bigger is to continue to use the flavor and texture to not get in the way of the play value. Other shapes and images can be created to generate more imaginative play. Games could be added on the back of the stand-up bag.With consumers (at least their parents) focusing on healthfulness, generating a line extension that uses a base formulation that is perceived to be healthier would be an opportunity. Keebler has figured out the licensed character game, now it needs to figure out how to maximize its play value and its financial value to the company.Rating: The product delivers on all the promises.Market Potential: Good for the line. It may help the category keep its head above water with a character that is more up-to-date than animals.

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