CHICAGO -- With carefully devised leverage strategy, Nabisco Biscuit Co., Parsippany, N.J., has achieved incremental sales growth for several of its brands in recent years, according to Douglas Conant, senior vice president of marketing.
Conant discussed Nabisco's strategy and success in a presentation at a conference here entitled, "Trade Marketing in Transition," hosted by the Marketing Advisory Council, New York.
Oreo was the No. 1 cookie brand and still growing in market share but was facing increased competition from another brand (Famous Amos) and private label, he said.
"We saw Oreo as an equity that performed well as an ingredient. We expanded into a full range of Oreo-based sweet goods, including Oreo pie crust, Oreo crunchies, Oreo ice cream cones, reduced-fat Oreo, Oreo Double Stuff, Oreo frosting and Oreo cookie crumbs. We redefined Oreo and it grew from $400 million to $470 million," Conant said.
The additional $70 million in 1994 were incremental sales, he said.
"We have only begun to realize the opportunity," he said.
Nabisco also has gained incremental sales with the "rejuvenation" of its Newtons line of cookies.
"Newtons was flat volume, a 100-year-old brand with an old-fashioned image. We wanted to rejuvenate this important franchise. With technology we were able to develop a fat-free Newton that had a healthy image. We developed the fat-free products to complement the base business," he said.
With the introduction of apple, raspberry and cranberry fat-free Newtons, Nabisco found a way to extend the franchise, he said.
Newtons had sales of $250 million in 1993, an increase of 40% vs. 1992, Conant said.
"The base business has remained the same size as when we started. This was totally incremental to the category," he said.
In reviewing any of its brands, Nabisco selects one of four strategies: buy, extend/build, move/ divest or hold position, Conant said. In its core cookies and crackers categories, Nabisco has chosen to extend/build the brands.
SnackWell's was developed in response to consumer demand for wellness food products that do not sacrifice taste, he said.
In 1993 when the brand was less than two years old it already had sales above $200 million, larger than any competitive brand, he said.
Devil's food SnackWell's have been "wildly successful" and are hard to find in stock in the stores, Conant said.
However, the area of specialty cookies and crackers, which is highly fragmented, stocked for variety and attracts a different consumer than traditional products, was not well known to Nabisco. Rather than creating its own specialty line, in this case Nabisco exercised the "buy" strategy with the acquisition of a successful, well-established franchise, Stella D'Oro, Conant said.
Sales this year are expected to be $100 million, representing growth of 12%, with double-digit earnings growth, he said.