Senior commercial strategy officer Ami O’Keefe spoke to BakeryandSnacks about how Kellogg approaches innovation and the importance of maintaining strong retailer relationships.
“When we look at innovation and building our pipeline, we’re really focused on eating occasions... and identifying where there may be gaps and innovating within those spaces,” she said, adding everything revolves around filling consumer needs. Finding ways to “bring new users into the brand” is paramount.
For now-iconic brands like Pringles and Cheez-Its, Kellogg has added not just new flavors but also new textures. Wavy Pringles, launched in early 2019, reach a different customer base, said O’Keefe, as do Cheez-It Grooves and Extra Toasty.
In the case of the latter, the company capitalized on a consumer quirk: that some diehard Cheez-It fans adore the burnt pieces scattered among the standard cheesy squares. “We were hearing that people like the burnt ones, and so we decided to make those intentionally,” explained O’Keefe. Within a couple of years, it became the brand’s third best-selling flavor, after Original and White Cheddar.
The Extra Toasty – and an Extra Cheesy – are now available in 3oz snack bags (RRP $1.59) ideal for the convenience channel.
The challenge of today’s snack-heavy, consumer-driven approach to innovation
O’Keefe admitted that it can be challenging to keep up with rapidly shifting consumer tastes and occasion demands.
“In c-store especially, it’s a limited SKU environment – you can’t just keep making the shelf bigger. We want to make sure that what’s in those sets is working as hard as it possibly can to deliver sales and profits for our retailers. All [of those] things are under consideration as we’re launching new products and thinking about the strategy behind it. Does it replace an underperforming SKU? Does it come in as just an LTO [limited time offering] to deliver news to the category?”
Retail partnerships have played a big role in innovation, she added, referencing an exclusive Fried Onion Ring flavor of Pringles at 7-Eleven and multiple LTOs at Dollar General. At NACS, Kellogg showcased two new Pringles flavors: Rotisserie Chicken and Roasted Garlic (RRP $2.69).
“Our retailers continuously challenge us to help them differentiate themselves from their competition, and one way that we can do that is by offering them an exclusive flavor and then helping to drive traffic to their stores to try it. I do think it’s something that’s becoming more and more important,” she said.
“Not only is there increased competition within the channel, but then our retailers are competing – we talk about channel blur – they’re competing with grocery, they’re competing with dollar, they’re competing with drug. They’re not just competing with the gas station across the street.”
As we heard at the NACS State of the Industry Summit in Chicago earlier this year, these days, everyone is in the business of convenience.
Increasing options for impulse buys
For the first time, Kellogg will launch a product exclusively in the convenience channel: Rice Krispies Dunk’d (RRP $1.99), which takes the classic marshmallow cereal bar and enrobes it in a Cookies & Cream or Chocolate coating.
Kellogg typically launches new products across channels, according to O’Keefe.
The 7.5-inch bar “uniquely meets the needs of the c-store shopper,” she told us at NACS in Atlanta, describing it as portable and easy to eat on-the-go.
Convenience made the most sense for this particular item, she added, especially because candy sales are an essential element of that channel. According to NACS data, 7% of c-store’s $240bn in foodservice sales come from snacks and about 4% from candy. Rice Krispies Dunk’d wants to straddle that line and appeal to consumers in both categories.
It was built as an impulse option that both satisfies a sweet tooth and offers something different than a traditional candy bar, said O’Keefe – answering the ever-growing call for ‘permissible indulgence.’
Rather than place Dunk’d in the snack aisle, the Michigan-based company is recommending that convenience retailers place it in or near the candy aisle.
At 3.11oz (62g), Kellogg sized it to compete directly with king-sized candy bars.
Rice Krispies has previously dipped into the candy category with an M&M’s collaboration. The brand also launched Poppers (a bite-sized version of the candy-coated Dunk’d, RRP $3.99 for a 7.1oz bag) in early 2019. They are currently available in Chocolate and Cookies & Cream and in December will add two new flavors: Vanilla Crème and Caramel.
Pop-Tarts get salty – and smaller
Pop-Tarts also got into the bite-sized game this year with the launch of PopTart Bites in the brand’s two most popular flavors: Strawberry and Brown Sugar Cinnamon. According to O’Keefe, they have filled a void for a smaller Pop-Tart snack.
Kellogg once tried to package the toaster pastries – a new flavor at the time, Gone Nutty – as singles, but they never took off. (They have always been sold in packs of two, available as a standalone item at convenience or in a four-pack box.)
The Bites, on the other hand, have been performing well enough in grocery so far this year that they will hit convenience store shelves in December in a narrow peg-style bag.
Consumers will also see a new kind of Pop-Tart across all channels: the brand has swapped its classic pastry crust for a pretzel version, “really playing into that sweet and salty flavor trend,” said O’Keefe.
Packed two per pouch, Pop-Tarts Pretzel will be available in a Cinnamon Sugar and a Chocolate flavor, both sprinkled with flaky salt (RRP $0.99 for a two-pack).