68 Trematon Place Teddington Middlesex TW11 9RH Tel: 0208 977 5449 Fax: 0208 977 0050 Email: george.phillips@tesco.net Web: www.popz.com Key personnel Sales & marketing director George Phillips Key brand Popz Fierce competition within the snacks sector has meant that innovation is key. Microwavable popcorn is one such creation that has exploded in popularity. Soller was established in 1999 to sell and market the Popz popcorn range and in less than two years has become the fastest growing popcorn brand in the UK. Sales and marketing director George Phillips says: "By December 2001, the end of the first full year's trading, Soller expects Popz to have taken a 50% share of the £5.6m microwave popcorn segment (IRI). Of the three brands currently in the segment, Popz is the only one showing growth and driving sector value growth at close to 20% year-on-year (IRI, 52 w/e 16 June 2001)." Key to growth in microwave popcorn and other relatively small but innovative sectors lies in a combination of consumer appeal ­ something new' and different' ­ backed by consistent support, a strong trade package and not least excellent DPP; category knowledge and excellence of information/data play important roles as well. Phillips says: "In a category dominated by relatively few big brands, sustained value growth remains difficult to achieve. These brands tend to be KVIs, with deep penetration, full distribution and retail pricing very susceptible to reductions (temporary or permanent) in line with retailers' low price strategies. "With few gains to be made in distribution, frequency or amount of purchase, constant price erosion, and substantial space allocated on fixture, big brand' trading becomes as much a battle for share as category growth, and it is inevitably the latter that suffers." Phillips believes it is therefore left to the 20% in the 80/20 equation to deliver added value, consumer choice, good cash margins based on (fairly) resilient price points, and (ideally) incremental business over the big brands. "Microwave popcorn is one of a number of cases in point. It has a consistently strong support programme, aimed primarily at consumer education and thus frequency and rate of purchase. The product offers excellent cash margins, is extremely space efficient and offers constant product innovation. For example, Popz new jalapeno chilli flavour is well placed to take advantage of current trends in hot' snacks and delivers dynamic growth from a relatively small space allocation," says Phillips. The elastic shelf' argument continues to rage but Phillips believes the key to managing smaller categories should be space based on growth rather than solely size. "Simplistically, the KVIs will always command majority space allocation ­ as they should ­ but it is debatable if a 5-10% reduction in the brand leading potato crisp space would have a negative effect on sales. While a 50% increase in space allocated to a category that offers 20% year-on-year growth already may deliver some extremely valuable additional contribution to the overall snack category. "In the case of Popz, a clear focus on the requirements of a relatively small category are contributing to growth. Striking packaging, focussed consumer and trade activity, innovation in product, such as flavours and packs, including a new pack where the popcorn pops in its own tub), all backed by a first class trade package. Phillips is confident about the product's popularity in the UK, saying: "The success of Popz in other European popcorn markets indicate our approach will add considerable value to this category within the UK Snacks market." {{Z SUPPLEMENTS }}

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