• by Karlene Lukovitz  @KLmarketdaily, May 26, 2011

Snack Factory, the Princeton, N.J.-based makers of Pretzel Crisps, may not be the country's largest snack company, but it's among the fastest-growing -- and savvy use of product development technology and social media are accelerating that momentum.

The privately owned company saw sales grow 15% last year to more than $50 million, according to Perry Abbenante, VP of marketing for Pretzel Crisps. Further, SymphonyIRI shows its sales leaped 66% during the 52-week period ending April 17.

Obviously, the products themselves are the primary growth-drivers. Warren and Sarah Wilson, the entrepreneurs behind the Funnel Cake Factory and New York Style Bagel Chips/New York Style Pita Chips brands (the former was eventually sold to J&J Snack Foods and the chips business to RJR Nabisco), went on to innovate the patented, flat pretzel cracker Pretzel Crisp product and incorporate Snack Factory in 2004.

Consumers took to Pretzel Crisps because they offer "all of the crunchy essence of pretzels, without all the doughy filling," and because like more traditional crackers, they can be paired with other foods or used to dip, sums up Abbenante. (The brand drove massive exposure early on by making small packages for distribution on airlines.)

The brand's tagline is "Rethink Your Pretzel," and a commitment to new approaches, expansion and honing existing products is ingrained in Snack Factory's entrepreneurially oriented culture, says Abbenante.

For example, last year, Pretzel Crisps both redesigned its packaging (including an updated logo) and introduced a new Modern Classics line for natural foods aficionados (now distributed in Whole Foods and natural foods stores nationwide). Also last year, within the Deli Style line that represents the bulk of its business, the company added a sesame variety and boosted sales by reformulating another variety (parmesan was changed to garlic parmesan).

At the same time, Snack Factory recognized an opportunity to expand on the success of its Deli Style Buffalo Wing variety, a leading seller since its launch in 2007, by introducing two new "bold and spicy" flavors.

However, says Abbenante, the internal creative brainstorming process had generated more than 180 variations of possible flavors and looks of the snacks and their packaging -- and Snack Factory knew that the costs of using focus groups or other traditional market research methods would dramatically restrict the number of concepts and variations that could be consumer-tested.

The solution eventually found, he reports, was Affinnova's IDDEA II technology, which enables testing and analyzing the results of theoretically limitless variations through statistically valid online surveying of large, representative consumer groups (representative of U.S. adults qualified as being within the brand/category's target audience, for example).

The basics: The technology employs a proprietary algorithm that processes consumers' survey feedback on an ongoing basis, and presents a honed or "evolved" set of choices to the next group of consumers as the surveying process continues. According to Abbenante, the Pretzel Crisps process involved narrowing down the 180-plus variations to five by surveying and analyzing the results of one group of 400 consumers, then determining the two winning combinations by surveying a different group of 400 consumers.

Boiling it down from the marketing perspective, the technology enabled Snack Factory to test all of its variations and determine the two optimal versions of flavor, product look and packaging design -- in terms of their purchase-intent performance -- within about six weeks, at an affordable cost, sums up Abbenante. The company was also able to see how the 'winners' compared to purchase-intent performance for competitive products.

Snack Factory has now created those two new Pretzel Crisps flavors -- although Abbenante declines to reveal the specifics until the varieties are officially unveiled during the International Dairy-Deli-Bakery Association (IDDBA) show in Los Angeles, which starts June 5.

The new Deli Style spicy flavors won't be Snack Factory's only 2011 product launches. Pretzel Crisps is also introducing a dark chocolate counterpart to its "wildly successful and highly addictive" holiday-season-only White Chocolate & Peppermint variety, reports Abbenante.

Pretzel Crisps' growth is also being driven by newly created field sales/marketing teams in Los Angeles, San Francisco, Boston and New York -- and by expanding and evolving social media marketing efforts, the marketing executive says.

Pretzel Crisps' Facebook page was not launched until last fall, but it has already pulled nearly 61,000 fans. The page offers access to recipes, product pairing suggestions, coupons and other offers, but Abbenante attributes its fan growth primarily to the brand "voice" conveyed. "We engage consumers with a fun brand personality," he says. "For instance, we posted humorous 'updates' and comments around the royal wedding, which generated large numbers of fan postings and new fans. We're not just constantly selling the products, which endears the brand to consumers."

Probed further about how Facebook traffic is being driven, Abbenante notes that Pretzel Crisps not only prominently promotes its Facebook page on its site (see site banner graphic), but uses targeted Facebook advertising to drive consumers to coupon and other offers on its page. For example, around the Super Bowl, the brand used geographically targeted ads with team-specific messaging in the Pittsburgh and Green Bay, Wis. markets promoting Pretzel Crisps as great Super Bowl game snacks (along with the Facebook-based coupon offer).

Then there's Twitter. Snack Factory's field team members are asked to spend part of each day identifying tweets that include keywords like pretzel, snacks and hungry, and they then contact prime tweeters and deliver samples of Pretzel Twists to those tweeters' houses or offices. "These tweeters of course then tweet about how cool it was that Pretzel Crisps just brought them free bags of our snacks, and how good they are, and those positive messages are reaching hundreds of thousands of their followers," Abbenante says.

While Snack Factory continues to use media such as billboards in key markets, targeted online ads and buy-one-get-one-free offers made through email promotions to the opt-in email lists of partners with affinity, "dollar for dollar, we're finding that social media is the best investment, because once a consumer 'likes' us, we can continue to engage with and market to that person, at very small additional or incremental cost," says Abbenante. "We don't have the marketing budgets of the biggest brands, but we're producing extremely cost-effective results through strategic social media efforts. The whole marketing scenario is entirely different than it was five years ago."