In this report we will be looking at Walkers smiths’ long standing market leadership in UK’s crisp industry and the reasons behind their successful marketing strategies in recent years especially after their acquisition by PepsiCo; a global food giant. This report should trace walkers’ strategies on corporate and business level by following a world class performance framework by employing world class manufacturing processes and market research and promotional strategies, working at the same time on their core competencies, internal resources and capabilities by scanning, monitoring and assessing various external environmental factors. Also to what extent their manufacturing strategies and response to a fast growing food and snack industry all around the world and in particular in our chosen Uk market (part of bigger European market) under the constant environmental threats and equally important opportunities to attain a competitive advantage over their competitors and rivals by a sustained competitive advantage over a long period of time. Focus of this report is in particular on their performance over last few years.
History and background
The glamorous multimillion crisp industries in UK weren’t always like that. Walkers and Smiths Company had a humble start in 1896 by Samwarth brother’s name as a midlands butcher which in later years expanded itself into pasties and in 1948 into crisp making business. Crisp industry started as a post war snack industry in most parts of Europe and America. First people fried potato crisps in small fryers and they were simply sold as a non glamorous substitute product at the time of meat and flour rationing. This industry has picked up in 1950’s and later in 1960’s through media advertisement and a growing awareness among the modern post modern generation about popular foods. Crisps did have their start into the generation of hip and popular food and drinks’ emerging market. No one could have foreseen the coming times as a new huge profit making era. Today Walkers is the biggest crisp manufacturers in uk owned by global food company giant Pepsi Co which also owns Pepsi, and Tropicana. Walkers us parent company is Frito Lay. Walkers are UK’s biggest potato crisps producer with a market share of 50%. Walkers have 7 food processing plants in UK among them is also their biggest crisp making plant in the world is in Leister. These plants produce 10m packs of crisps everyday. Sources: (Henley, 2010) (Meikle, 2009)
Demography and lifestyle
An interesting account of British lifestyle and potato crisp snacking habit was discovered in John Henley’s (Guardian feature writer) article. In this interesting article Henley tries to trace a link between potatoes being a British trademark food for centuries before the modernisation of the world and invention of savoury snack industry. Crisps are considered British people’s sandwich companions in their lunch boxes and are linked to a habit of regular snacking in British culture. An average Brit consumes around 150 packs of crisps a year on average. Henley calls this a national obsession when considering an estimated consumption of 6bn packets of crisps and 4.4bn bags of savoury snacks a year. According to a recent mintel report, new health and personal well being trends are having a fundamental affects on the savoury snack market in general and crisps market in particular. There is an overall shift from promotional launch based on dietary concerns low salt levels and reduced fats to more natural resources and organic food claims. Walkers seems to respond to this new change in the perception of food and health by emphasizing using 100% British potatoes, reduced food miles and natural raw food sourcing from the home market in their promotional strategies and claims made on their website. Also with the launch of crisps’ premium brands like kettle chips and walkers sensations stressing on terms like hand fried,...