‘Innovation is the life lead of snacks’, says Kellogg as it looks to 2013

By Kacey Culliney

- Last updated on GMT

Looking to 2013, Kellogg is focused on innovation across its snacks offering
Looking to 2013, Kellogg is focused on innovation across its snacks offering

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Innovation is the ‘life lead’ of Kellogg’s snacks arm and efforts will be pumped into new product development and flavor additions to set the segment soaring in 2013, the president of its US snacks division says.

The cereal giant hopes to establish an equally sturdy status in the snacks marketplace and will launch new and developed varieties of granola bars, crackers, crisps and cookies.

Tasty, innovative growth prospects

Speaking at the company’s analyst day earlier this month, Todd Penegor, president of US snacks at Kellogg, said the snacking category had strong growth potential and he outlined hefty investment plans for the firm’s brands.

“Innovation is the life lead of snacks. We never really slowed down innovation in snacks over the last four, five years…And when you look at 2013, a lot more innovation is coming to fuel growth,” ​Penegor said.

“We know our categories are very responsive to brand building, to innovation and great in-store execution, and those are strengths of ours in snacks.”

“You can see from the track record that innovation wins in the category, innovation drives the category. We’ve had a lot of strong, sustainable innovation and we’re going to continue to play that game going forward, and ultimately it comes down to strong execution and great execution in store, and that’s where we’ll leverage our greatest asset – our power of direct store delivery (DSD) and in-store sales force,”​ he said.

Brand drivers

Cheez-It... the 'mega-brand'
Cheez-It... the 'mega-brand'

Wholesome snacks, comprising four core brands – Special K, Nutri-Grain, Rice Krispie Treats and Fiber Plus – is Kellogg’s highest-margin category. Crackers - with Cheez-It, Town House, Club and Special K Crackers – is close behind, Penegor said.

Over the last five years the wholesome snacks segment has surged by a CAGR (compound annual growth rate) of 4% and the crackers business by 7%, he said.

Cheez-It remains the “mega-brand”,​ he said, with opportunities to make it firm’s next billion-dollar brand.Within cookies, the

Keebler brand is “the big horse”,​ the snacks president said, representing 60% of Kellogg’s overall cookie portfolio.

Set for 2013…

Kellogg’s 2013 developments include the launch of a new Nutri-Grain product – Fruit Crunch – a granola bar made up of 20g of whole grain and fruit that fits into the surging wholesome snacks category.

Its Special K brand will see a new launch and flavor developments as the company invests in development of ‘smart’ snacks for weight management. Blondie Brownie Bites are cookies in 100-calorie pouches to target the on-the-go, weight-conscious consumer. There has been a new Berry Streusal flavor of its Pastry Crisps launched and a Honey Barbecue flavor of its cracker chips.

Kellogg will launch a new product under its FiberPlus nutrition bar brand that contains 10g protein to cater to the ‘positive nutrition’ demands among consumers.

Its Keebler brand will also see two new launches targeting the indulgence end of the snacks market. The Chips Deluxe Triple Chocolate cookie and Peanut Butter-filled, Fudge-dipped pretzels attempt to reprise classic favorites.

Penegor also revealed plans to bring its El Duende Cookies, popular in Puerto Rico, to the US to resonate with Hispanic consumers.

New flavor developments also eat into Rice Krispies Treats, Pringles and Cheez-It.

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