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The small guy can still win in the snacks aisle, says Jim Schneider

Saratoga Chips head back to the future: Second time lucky for America’s first kettle chip?

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By Elaine Watson+

18-Aug-2014
Last updated on 18-Aug-2014 at 17:07 GMT

Jim Schneider: 'Retailers understand that they need to stock local and niche brands as well as Frito-Lay.'
Jim Schneider: 'Retailers understand that they need to stock local and niche brands as well as Frito-Lay.'

The ‘Saratoga chip’ - a snack food sensation first cooked up in 1853 by George Crum in Saratoga Springs, NY - was ultimately overwhelmed by the might of Herman Lay’s potato chip. 160+ years later, however, America’s original kettle chip is staging a comeback, and is now making solid gains under new ownership.

The Saratoga Chips brand was first brought back to life in 2009 in the original box by entrepreneurs Danny and Shelly Jameson and subsequently acquired by former Beech Nut Nutrition Corp president Jim Schneider and real estate developer Joe Boff, who have helped to transform its fortunes after 12 months at the helm.

At the time of the takeover in July 2013, the brand had developed a loyal following, but had hit a wall, and was still only in around 35 stores, Schneider told FoodNavigator-USA.

Today - after some fairly radical changes - it’s in more than 450 stores including Wal-Mart, Hannaford, Price Chopper, Fresh Market, Fairway, Tops Markets, and Central Market, and Schneider reckons he can generate revenues of $25m+ in three years in markets from Maine to Florida and west to the Ohio valley if the business continues to grow at current rates.  

“We’ve been invited to category reviews at several of the top 10 retailers,” says Schneider. “We’re talking to Publix down in Florida for example, so we’ve stretched beyond just the Northeast, and that’s important for us as the brand has to have legs beyond Saratoga Springs New York.”

The American consumer doesn’t buy chips in a box  

So what gave the brand a new lease of life?

Jim Schneider: The American consumer doesn’t buy chips in a box

First the box had to go, says Schneider, as despite its retro appeal (the Jamesons copied the design from an original box of Moon's Lake House Saratoga Chips they found in a museum), the format was just too niche: “The American consumer doesn’t buy chips in a box.”

Next, Schneider and Boff switched from cottonseed oil to sunflower oil; upped the brand's ‘gourmet’ credentials with the addition of pink Himalayan salt; introduced new products including Dark Russet chips (with more to come including sweet potato varieties with brown sugar and coconut oil); and went through the non-GMO Project verification process.

68% of consumers had heard of Saratoga Springs, even if they hadn’t heard of Saratoga Chips…

They also developed striking new labels highlighting the first thing most Americans associate with Saratoga Springs: horse racing.

“We did some research with 1,000 consumers up and down the east coast from Maine to Florida and 68% had heard of Saratoga Springs, even if they hadn’t heard of Saratoga Chips,” recalls Schneider. “That’s when I knew we were onto something.”

A significant investment has been made in advertising and marketing initiatives linking to the horse racing theme, says Schneider, who struck a deal with the New York Racing Association for brand tie-ups in the 2014 Saratoga Race Course season, putting Saratoga Chips in the hands of thousands of new customers - many of who visit from all over the US and beyond.

Retailers understand that they need to have local and niche brands as well as Frito-Lay

But how tough is it to secure shelf space in a category dominated by heavyweights from PepsiCo (Lay’s kettle chips) and Snyder’s-Lance (Cape Cod kettle chips) to Herr’s, Utz, Diamond Foods (Kettle Brand) et al?

While all the hoops you have to jump through to get and stay on shelf can make life incredibly hard for small brands, Saratoga Chips has “not paid one dollar” in slotting fees, claims Schneider, who has secured space in the natural foods section of some stores and the main salty snacks aisle in others.

Meanwhile, small brands can also move more quickly in response to consumer trends, says Schneider, who says retailers are starting to give them the space they deserve.

“It’s tougher than it used to be because of all the trade costs, but consumers are looking for new products and regional brands and they are looking for new tastes, and retailers understand that they need to have local and niche brands as well as Frito-Lay. Retailers have been our biggest cheerleaders.

“In terms of slotting fees, it comes down to whether they really believe in you. If they don’t, you have to pay.”

Click HERE to read more about the brand.

 

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