Snack Attack

Sharon Fordham has been reacquainting herself with the cookie aisle.

Back at the marketing helm of Nabisco Biscuit Co. after her 1994 to ’97 run as president of LifeSavers, Fordham is doing store checks again, strolling through supermarkets far from her East Hanover, NJ, office to see how her brands and her competitors have changed.

Nabisco, too, is relearning the cookie business, after a year of losing sales and losing face with grocers. Nabisco restructured its sales and merchandising force this summer, boosted ad and promotion spending for second-half ’98 to an estimated $150 million to $200 million, and began rethinking how and where different consumers buy its brands. Nabisco is broadly tackling the $30 billion snacks business under an “anytime, anywhere” strategy that puts cookies in ballparks and office supply stores, and puts Nabisco in orbit around Frito-Lay’s Planet Lunch.

If Nabisco president Jim Kilts can fix the sales force and turn up the ad volume this year, the table is set for aggressive consumer promotion and expanded distribution in 1999.

Kilts, who had been president of Kraft Foods USA, is well-suited to the task of coordinating Nabisco’s brands around a single focus. He played an integral part in integrating Kraft with General Foods, streamlining sales teams and boosting corporate-wide multibrand events that group brands according to consumer interest, like the 25 product-plus Kraft Kids line. The task at Nabisco, it seems, would be even easier, since its brands are more similar and Nabisco can use its direct-store delivery system to set product mixes that make the most sense for each retail outlet and each consumer group it targets.

If Nabisco can match each brand to the right snacker in the right place, it can strengthen its dominance in cookie/cracker sales and become a bigger player in the broader snacks arena.

“I’m a big believer in discrete brand positioning and managing a portfolio to optimize the portfolio,” Fordham says. “[Our] brands have very different user bases, so they should say different things.”

The first course is SnackWell’s, relaunched in July with an estimated $35 million ad campaign, new products, and reformulations that add some fat to improve flavor. Ads and promotions massage the self-esteem of women 35-plus with the tagline “Live Well. Snack Well.” As much as $50 million worth of consumer promotion kicks into high gear in 1999 with celebrity spokespeople, literacy tie-ins, and an Internet site to rival LifeSaver’s candystand.com, one of five most-visited sites on the Web.

Nabisco is negotiating with celebs to participate in promos that reinforce SnackWell’s self-esteem message. “If we can pull it off, it will be very big, the kind of promotion-advertising-PR opportunity that comes along once in a rare while,” Fordham says. Wellness users are avid readers, so Nabisco is grooming SnackWell’s as an information center for health issues and beyond. It’s also likely to tap the book-club craze that’s grown to half a million groups – mostly women.

“Women are often talked to as the mom, the gatekeeper, the head of the household,” Fordham explains. “We want to talk to women more on a one-to-one context and start to become a champion of our consumer. That’s what the self-esteem positioning is all about.”

Promotions will help “deepen our attachment with consumers,” she adds. “They didn’t leave SnackWell’s because they disliked the brand; they left because they had other snack options, and they just stopped thinking about us. [By] returning to an aggressive level of support, we think we can recreate the scope of this franchise.”

SnackWell’s practically owned the fat-free snacks segment when it bowed in 1992, and ballooned to an astounding $XXX million in sales at its peak in 199X. Since then, competitors have flooded the market, and indulgence has made a comeback. SnackWell’s sales dropped to $XX million in cookies, $XX million in crackers, per Information Resources Inc., Chicago. (Nabisco’s total cookie sales fell 2.2 percent to $1.26 billion and crackers fell 1 percent to $1.31 billion, the only declines in those categories for the 52 weeks ended May 24, per IRI.)

Caramel and mint cookies introduced this spring give SnackWell’s some candy-like flavors, and even though fat contents are higher, Fordham contends it’s still the same great taste/lower fat positioning SnackWell’s started with. “This brand can’t stand still,” Fordham says. “Wellness is a moving target, and SnackWell’s will certainly be the business that moves with it.”

Promotions that pitch SnackWell’s as a women’s wellness advocate reinforce the self-esteem positioning that is “more about being relaxed with yourself in the ’90s,” according to Fordham. The brand-as-advocate “is kind of a vacant place in the [women’s] marketplace – Nike has done it so well with men and boys – and SnackWell’s already owns some of it. It’s an area we can really sharpen.”

Beyond biscuits Fixing SnackWell’s is just one bite of the hardtack Nabisco is swallowing these days. The company sold its table spreads and Eggbeaters business to ConAgra in July, and continues to rebuild the sales staff that was cut in 1997 to trim costs – to the chagrin of grocers. Part-time merchandisers weren’t keeping up with stock and fumbled execution of key promotions by putting the wrong brands in displays. Nabisco has to fix service in supermarkets before it can execute promotions.

“When our selling organization is ready is about the time the [promotion push] will be coming to a peak” next year, Fordham says. “Even though execution isn’t completely optimal, with the quality of the reprogramming we’re doing, plus renewed focus on the sales side, we’re going to do better in second half.”

Critics say Nabisco also has to get off a price-cut spiral made worse by bad merchandising. Hi-lo pricing on top brands blows product off shelves, but merchandisers can’t keep up, and resulting out-of-stocks aggravate consumers and grocers. Fordham says it hasn’t been “a widespread problem,” and high-low pricing doesn’t hurt brand image, so likely won’t change.

Despite its problems, Nabisco still controls a third of the cookie category and nearly half the cracker segment. It still rings up profits for grocers – despite their grumbling -and as brands start showing up in new channels, Nabisco can shore up its dominance.

“Nabisco still controls its own destiny at the shelf because it’s direct-store delivered,” says one food industry consultant. “It’s still the biggest dog in the pound.”

Even big dogs need to learn new tricks occasionally.