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Kettle Foods Potato Chip Sampler Packs

June 11, 2007
Kettle Foods packs several powerful marketing tools into its sampler packs … and sells chips at $13 per lb.

This product review is more about the product selection process and a truly unique connection being forged with consumers than about the product itself.

The history of potato chips is the history of listening to the consumer and making what he wants. In 1853, a diner at Moon Lake Lodge in Saratoga Springs, N.Y., sent back his french fries because they were too thick. Chef George Crum tried several increasingly thin variations, but each time they were rejected.

Finally, Crum created a fry that was too thin and crisp to skewer with a fork. The diner finally was happy, and soon other customers wanted these "Saratoga Chips."

A century and a half later, upstart Kettle Foods Inc., Salem, Ore., is enlisting consumers to pick its new flavors, a too-rare but not entirely unique effort. Why not make some good money in the process and use American Idol-like competition and web-based feedback to heighten the fun?

Kettle created a Limited Edition Party Pack that's great as a party starter or even as a gift for the hostess. It includes five 5-oz. bags, one of each of the test flavors Kettle product developers were trying to sort through for a new SKU. They threw in a special world music sampler CD from Putumayo World Music, trivia postcards, food pairing ideas, drink recipes, a chip clip and more. The whole "kit" is designed to create a mood.

Limited Edition Party Pack; Kettle Foods Inc.; Salem, Ore.

Purchasers of the party pack are encouraged to share with others, compare favorite chips and go online to rate each flavor on a five-point scale of "yuck" to "yum." This feedback flows into the online voting for the newest potato chip flavor for the "People's Choice" campaign. Kettle has created an interesting to way to do in-home consumer flavor testing, make an Internet connection with consumers, create buzz and sell some product (the kits are $19.95 each including shipping) all at the same time.

As a result of the first use of this process, 50,000 online votes were cast in 2005, but without any sampling of the flavors. The sampler packs were introduced in January 2006, and the original run of 500 Party Packs sold out in 10 days. The most recent campaign was conducted November 2006 through this January, with exotic Island Jerk as the winner. That flavor will arrive on grocery store shelves in June.

Understanding the marketplace

Potato chips are one of the favorite snack foods of Americans. Often, they are sought due to cravings for salt or fat. Potato chip sales for 2005 were $2.6 billion, an increase of 1.2 percent over the previous year, not including Wal-Mart, according to Information Resources Inc. (IRI).

The top sellers are Lays, Wavy Lays and Ruffles, all Frito-Lay brands. Key issues in this segment have been healthfulness, including perceptions of oil, fat and salt, removal of trans fats, "natural" products and a movement to "premiumness," so as to deliver a differentiable experience for consumers.

Healthier snacks overall increased by 6.4 percent in 2006 outpacing salty snacks at 3.7 percent and indulgent snacks at 2.1 percent, according to IRI. However, indulgent snacks still have 66 percent share of the consumers snack purchases. So the goal would be to deliver healthy snacks that taste indulgent.

For consumers, healthy can have a variety of faces, including calories, fat content, natural, organic, portion control and number and type of ingredients. Given that consumer mindsets are highly varied on what healthy means, Kettle hitched its star to the idea of "natural" and focused on making natural potato chips more indulgent through interesting flavors. The company uses quality russet potatoes cooked with expeller-pressed, non-hydrogenated, high monounsaturated safflower and sunflower oils, which contain no more than 10 percent saturated fat. This yields potato chips that do not contain added sugars or cholesterol.

While salt and fat are craved, potato chips are not. Our own Crave It! research has analyzed food cravings for six years, and when potato chips are compared to other foods, they are just not as craved as, say, steak or cheesecake. However, the ideas that can make potato chips craveable are flavors; brands; light and crispy; thick and ridged; with a dip; kettle fried; shared with family and friends; anticipation; thin and light. The key attributes for chips are: taste, brand, aroma, flavor varieties, price, appearance and mood. Potato chips tend to be consumed at lunch, mid-afternoon, dinner or late at night.

The key trends are healthfulness and the opposing trend of indulgence.

Healthfulness: Snack manufacturers have faced a number of nutrition issues concerning carbohydrates, calories, trans fatty acids and obesity. These issues have contributed to the lower growth in these categories, even as the percent of calories from snacks has reached 20 percent, according to USDA.

Indulgence: Pleasure is important in this busy world. We have seen many products focused on healthy aspects, but the pleasure of indulgent snacks is still a strong behavior. Consumers use savory and sweet carbohydrate-based snacks for enjoyment, mood improvement and to deal with the stress and chaos in their world.

The experience

Only available (prior to launch) at www.passporttoflavor.com, the festive Party Pack is presented as a gift. It contains 5-oz. bags of flavors Island Jerk, Royal Indian Curry, Aztec Chocolate, Dragon 5 Spice and Twisted Chili Lime, plus the CD and the other goodies.

Although Dragon 5 Spice and Twisted Chili Lime apparently were close in the voting, Island Jerk was the chip most highly rated, so it will be available in natural food and grocery stores nationwide in 5-oz. bags starting June 1 for $1.99-2.29.

The box (for the Party Pack) is printed with stamps and call-outs of "People's Choice 2007" and "voted by many, craved by all." The Kettle brand is presented on a map of the world with "a natural obsession" above it.

Flavor, texture and aroma contribute to the perception of freshness and quality. The chips are a dark golden color with flecks of seasonings on top. They do look greasy. The chips are ridged and include a number of fold-overs (chips that flop over on themselves), which provide extra crunch. The aroma is fruity, which caused some consumers to question what these were.

The flavor is sweet and tangy (lime-like), peppery, salty and spicy (a moderate level of heat slowly presents itself on the margins of your tongue and is offset by the fat from the potato chip), all at the same time and fairly intense. The flavor coated the tongue. By the time you have eaten a few, there is an aftertaste in your mouth that you either want to continue by eating more or you want to clear with a beverage.

The texture is that of a kettle chip, thick and crunchy. The chip leaves some oil and particulates on the fingers that you either lick or wipe off.

Our taste-testers felt the chips were crunchy and the flavor was addictive. While some people don't like sweet chips, they felt this sweetness coupled with the spice added complexity, almost like a barbeque taste. They felt better about eating them or sharing them with others because they were natural and had healthy oils.

Most felt this chip paired well with beer or wine and was very adult-like. But the consumers also suspected kids, especially teens, would like them. They could be the chip "clueless" adults could use to show their teenage kids they weren't so out of it. A few felt the chip was almost meal-like and could be eaten in small quantities as a meal replacement.

Does the product deliver?

The Kettle brand is about premium, wholesome, natural, almost handcrafted, energy-conscious. The chips' flavor, texture and appearance fit the idea of premium and caused consumers to recheck the natural wholesomeness. At 9g of fat per serving, these do not fit everyone's definition of healthy, as they are a full-fat chip.

All of the flavors (not just the winner) were popular. The pack did create the ability to have a high-end chip party. We are told to look for the competition again next year.

How to make the idea bigger: The idea of taking product sorts, taste testing and consumer research to another level is a big idea. Kettle gets people like us to buy their test chips and then to vote on them. That is a big idea. We love it.

Mixing natural and premium together is not easy. Many times when consumers consider natural, they think the flavors should be milder. These products are not that. Helping people figure out how to use these flavor-intense chips as part of a meal might be a good direction. Could these blend well with soup? What other dish?

Some consumers may seek a dip, but which one and why? The flavors are very complex, the texture is somewhat complex. How can we use these chips beyond eating them?

Rating: The product delivers on all the promises.

Market potential: Good for the line. This process gets consumers involved in creating new products. It engages them in the brand. It's a great way to connect with consumers and their emotions.

Hollis Ashman is chief strategist and Jacqueline Beckley is president of the Understanding and Insight Group, a strategy, business and product development firm that connects with consumers using qualitative and quantitative approaches. For more information, see www.theuandigroup.com.

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