Kettle Sets Out on Mission to Disprove Imitators

Foodie-aimed Campaign Declares Brand Originated Chip Style

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Born in 1982, Kettle Brand potato chips pioneered the kettle-cooked style in which unpeeled spuds are fried in small batches to produce a crispier chip.

But recently the marketer has found itself in a crunch as competitors big and small adopt the same style, with equal -- and in some cases better -- sales results. Kettle is fighting back with a campaign called "The Real Kettle Chips" and repositioning itself to target foodies, who might care about the chips' authenticity more than the mainstream market Kettle had been going after.

While 92% of salty-snack consumers know about the kettle style, only 46% are aware of the Kettle brand, according to Kettle's research. In other words, the style it created became bigger than the brand. "That told us right away that ... it was really important to remind consumers that Kettle Brand is really a pioneer of this segment," said Marc McCullagh, who manages Kettle for owner Diamond Foods.

Kettle's campaign, which makes its debut in December, includes ads boasting that "other chips can copy our style but they'll never have our substance." Ads will also plug its home base of Willamette Valley, Ore., noting that 's where Kettle has been "batch-cooked for over 30 years." Origin is an increasingly important attribute for food brands, especially among the food elites Kettle is targeting.

The campaign, by Deutsch, Los Angeles, will include digital and print buys on foodie publications including Bon Appetit, Epicurious.com and Foodnetwork.com. The previous effort, called "Nobody Likes Them, They Love Them," targeted a broader audience with TV ads and free-standing inserts. On a recent earnings call, Diamond CEO Brian Driscoll said the brand's previous strategy of discounting in search of top-line growth hurt margins. "We believe that this brand can grow, expand and maintain its inherent premium price positioning best by staying true to and investing into what it stands for," he said.

Kettle, with its colorful packaging and innovative flavors, such as Spicy Thai, has had decent growth. Sales jumped 8.6% to $176 million in the 52 weeks ended Oct. 7, placing it eighth in the chip market with 2.64% share, according to SymphonyIRI. But it has been passed by Frito-Lay's "Kettle Cooked" variety, which launched in 2000 and now controls 4.96% share after 17% growth in the past year. Even private-label brands such as 7-Eleven have embraced the kettle style.

Kettle is also differentiating itself by emphasizing its "all-natural" ingredients. In October, the brand announced that 16 of its flavors had achieved verification from the Non-GMO Project, which tracks foods that don't contain genetically modified ingredients. Kettle claims to be the first chip brand to achieve that distinction and plans to plug the verification on labeling beginning in January.

Diamond, which also owns Emerald nuts and Pop Secret, is seeking to boost Kettle during a rough time at the company. Diamond recently had to restate earnings results from 2010 and 2011 due to accounting irregularities related to payments to walnut growers.

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