Matt Collins, Trading Controller Convenience, KP Snacks, talks to Asian Trader about the company's massive brands and how independent retailers can grow the snacks category.
Tell us about your background.
I have been at KP since January 2014. I head up the convenience and impulse channel, which is everything from the convenience retailers to foodservice, wholesalers and the depots – from Palmer & Harvey to 363, Booker to Bestway. So there is quite a large eclectic mix of customers over that channel.
Prior to that I was at Premier Foods for nine years, based in St Albans which is where I live now. I had different roles there but as I left I was a channel director within the foodservice out of home market. Prior to that I was five years at Tchibo Coffee where I did a graduate scheme after graduating from the University of Brighton in the summer of 1999 with a food retail management degree. I fell into account management through the graduate scheme at Tchibo.
The nine years at Premier was an interesting time. I joined just after the IPO (initial public offering, or stock market launch) when the business was going through a real acquisitive streak. We had the legacy of the Campbell's business, some of the brands out of what was Kraft at the time, things like Angel Delight and Birds, the big one of RHM. Subsequently I worked for the rest of the business when it started divesting.
That nine years gave me a lot of experience commercially of the different ways of moving through the industry. So it was a good time.
The opportunity at KP arose around September 2013.
What made you join KP?
What appealed about KP was the opportunity. Post the divestment from United Biscuits, when Intersnack acquired the organisation in January 2013, it was the opportunity of how the business was going to go. There was lots of investment coming into it. It was a real opportunity for these brands which had been part of the wider UB business to have a lot of focus, investment and resource. There was a clear opportunity in the marketplace to perform a role and to add value for customers and consumers alike. That was the real attraction – a business that was investing to grow.
Fifteen months on it is very much continuing on that journey.
I am absolutely enjoying the job. Every day is different. There are many challenges. It is a tough, competitive marketplace at the moment, commercially FMCG is tough. I am surrounded by a great team. I have some great people working for me and also within the stakeholders that feed into the team, we have got some really talented, experienced individuals. There are some challenges ahead but equally, lots of opportunities so it is good.
I am always one not to look backwards. I make my decisions and move forward rather than looking back at what could have been. We have got some cracking brands. The organisation keeps investing in them, whether it is above the line advertising, below the line support or tactical support, how we promote them and offer the value to convenience retailers, foodservice operators and cash & carries. For me that is the real passion about the job.
Within KP there has been a lot of change over the last two years since the acquisition by Intersnack and divestment from United Biscuits in January 2013. Intersnack, which is a huge player in Europe, brought all of its experience and technology into the UK operation.
The UK operation is still run as an autonomous business unit but with the backing, support and investment of Intersnack and some of the brands they have within their portfolio. Since then we have seen lots of investment going into the manufacturing footprint within the UK, building new facilities. We have opened a state of the art nuts facility in September 2014. It has been investing in the infrastructure and technology of the organisation.
What is KP's share of the crisps and snacks market?
Within the convenience and impulse channel we have a 15.6% share of the market, as measured by Nielsen. That gives us the opportunity to be a really strong number two player. For me that is a really good role we can play within it. It is a market with a clear number one, Walkers. But KP can be a clear number two.
Our mission is straightforward – how can we make our products a compelling choice at point of purchase? We invest to make sure consumers can always see the product, the brands are front of mind and consumers really want to pick those products up off the shelves. We have very straightforward pillars for achieving that. We are very customer-centric which means understanding what the customer's strategy is. We have our strategy of course but we are not just trying to overload that. We are listening to customers to understand how we can combine both to work in partnership.
We make sure we fulfil our commitments, putting category at the heart of what we do. We aim to ensure sustainable growth, not just nicking one box from another but how do we build the category? How do we add value to the category and grow it? Within a growing category, how do we take a larger proportion of that? That's very important.
We aim for excellence in execution, if it is display or feature, if it is events such as a recent one on McCoy's, how do we build from that?
Within the team, there are really proud and passionate people at KP.
The channel vision is underpinned by those five pillars to drive demand, generation and add value creation, underpinned by category growth. That is the whole objective of what we are trying to do. How do we increase demand and within that how do we add value back to the retailers and consumers?
How much are your brands worth?
Our branded portfolio includes many brands you will recognise, McCoy's being our largest with a RSV (retail sales value) of £107.4m, Hula Hoops is worth £81.2m. We have got some really exciting plans for the rest of this year. Both McCoy's and Hula Hoops will be on TV. We have a big campaign coming up on McCoy's when we relaunch the packaging. Hula Hoops will be on TV to support our new product development with Hula Hoops Puft.
What always surprises me is people aren't aware of how big our branded portfolio is. There are some real classics like Space Raiders. The interesting thing about Space Raiders is it is actually the fastest selling product in the crisps, snacks and nuts impulse market. It is worth £15.1m, the challenge being the 20p price point – we have to sell a lot of packs even to be worth £15.1m. But it is so fast moving because of the low price point and the segment it operates within.
Then there are other classics like Discos, Nik Naks and Wheat Crunchies. There are brands we are putting a lot of work on, particularly our sharing proposition like Phileas Fogg and Branigans.
So we have a real iconic branded portfolio but the ones we are constantly driving and putting a lot of investment behind are McCoy's, Hula Hoops, KP Nuts and Pom-Bear.
To put that into some sort of scale, here's some interesting facts. We produce 440 tonnes of finished product every day. That gives you some idea of the scale and how many packs are being produced on a daily basis to serve that demand.
Nik Naks and Wheat Crunchies used to be Golden Wonder brands. They came to us through the different acquisitions with UB. Some of the other brands like Pom-Bear and Penn State came across with the Intersnack purchase. They were traditional Intersnack brands and came across during the acquisition to expand our portfolio.
What are KP's plans for this year?
Our 2015 strategy is quite simple. How do we make the core range work harder? The phrase we use is more from core with a sprinkle of NPD (new product development). 
A lot of the challenge we always get told is stores don't have elastic shelves or rubber walls. Space is of a premium and retailers don't want a lot of cash tied up in product. 
So the challenge is how do we make the core range work harder. The core range is the best sellers. They are the ones with the fastest rate of sale.
How can we share our category knowledge, our expertise and information to help people understand what range they should stock and why.
But then within that we want to add some excitement and new news through the NPD we bring to market. But it isn't an NPD-led plan, its how do we work the core range and support it with some exciting new product news.
One thing we work hard on particularly with independent retailers is making sure we have got the right product range and case formats. People don't want 50 packets in a box so how do we make sure the box is the right size for storage space and to make sure not too much cash is tied up in stock.
We have done a lot of work on making some of our case sizes smaller. On McCoy's we have introduced cases of 30 packs instead of 36. Some of the other snack lines have gone into 24s and 28s. So it is really about trying to work with some of the challenges within the marketplace.
Finally, there is execution of events and concepts – how do we bring theatre, new news and excitement into stores? We proudly announced last year that McCoy's is the official crisps partner of the Football League. 
At the start of this year we did an on-pack offer of two football tickets for the price of one. Within that there was a lot of support for the retailers with display and feature to drive consumer awareness and demand, encouraging pick-up. Having the display solutions behind it and having the two for one football tickets is the consumer mechanic.
The redemption on that has been really encouraging and we are pleased to say we will be doing it again in September this year. We have a two year partnership with the Football League. That will be supported with above the line advertising with Sky Sports and working with that platform to drive awareness.
What different segments make up the crisps and snacks market?
We segment the market into single packs, sharing, multipack and nuts. Singles is a real large portion of that market for us. The total handypack singles market is 56.3% of the total convenience and impulse market. Multipack has 10%, sharing has 27%, nuts has 3.9% and popcorn has 2.6%.
Bearing in mind how important the singles handypack market is, particularly for that impulse purchase, a lot of our investment and focus is really from a category approach of making sure it has got the right segmentation behind it.
It is about understanding what the shopper mission is, understanding what the occasion is and trying to make sure our products fit within that.
Our products vary from McCoy's, which lends itself very much to a hunger fill proposition, that big eat, very tasty, very flavoursome, all the way through to the value range. We have spoken about Space Raiders at 20p. We recently brought out a range of products in 39p price-marked packs. Then we have some of the kids and family favourites like Hula Hoops, Pom-Bear and Skips.
So we try to create very clear segmentation of the products and what are the need states behind them.
What is your biggest brand?
McCoy's is our largest brand. This summer, from June, we will be doing a huge redesign of the brand both on the multipack and on the singles. This is about trying to make the brand more modern, more dynamic and reinvigorating that male snacking behind it.
The feedback we have had so far from consumers through the validation process has been incredibly encouraging. This will be supported in the market with significant promotional activity, display and there will be an above the line advertising campaign.
We redesigned McCoy's to add some new news to the brand and to make sure we keep reinvigorating it, modernising it, keeping it on-trend. There is now actually an image of the product on the pack. It was a combination of investment into the brand and responding to feedback on how do we keep evolving it, making sure the proposition is right. This is the first new look for the brand in 15 years.
The heartland of McCoy's has always been that it is aimed at men. Within that we want to stretch the brand further and broaden the appeal. Men will always be our target market but within that, how do we appeal to that more dynamic, more modern look. Bringing other people into the McCoy's brand is key for us. We think this activity will be a good vehicle for achieving that.
McCoy's is a real focus for us this year. We have the full brand redesign, backed by lots of media and national outdoor activity. We have exciting new flavours. Paprika flavour was launched in February 2015. Street Menu is a multipack aimed at grocery based on street food from around the world such as Jamaican Jerk.
McCoy's is the official crisp partner of the Football League.
Does KP offer price marked packs?
Price marked packs are important to us so we make sure we are working with what the convenience consumer is looking for. We have put a lot of investment into PMPs. We have a £1 nuts range, 55p on McCoy's and a 39p range.
What we try to do with our PMPs is offer a very competitive share of margin. Some of the challenges we see from the industry is the margin opportunity on a straight pack versus a PMP. If we are putting a price on there we still make sure we are offering a very competitive margin through the chain to enable everyone to operate how they need to operate. For us it is important that the share of margin on a PMP is still very competitive. Whereas some of the feedback we get generally from the trade is that PMPs inhibit potential margin opportunity.
The key advantages of PMPs are that they help retailers with pricing architecture but also that they give consumers confidence going in to a store that the product is competitively priced. So I think it's a win-win.
As a manufacturer we have to make sure we offer it at the right margin through the chain to make sure it is worthwhile for the retailer to stock it as well. It has to be a win-win for everyone – the right margin, the right consumer proposition and the right opportunity for the retailer.
We see the £1 price point as still very key, particularly within the convenience and impulse channel. The continual debate is whether it is a sharing proposition or a big eat. I don't want to draw any conclusions on that but it is probably a combination of both. It is certainly into that big eat territory of people consuming that on the go.
So we are making sure we have the right range. 
Are you doing anything to support Phileas Fogg?
We have exciting news on our Phileas Fogg brand. In July we will be introducing a £1 PMP of the bestselling line within the retail grocery sector, Louisiana Sweet & Smokey BBQ Bubble Chips. That will be in a 90g bag.
We reintroduced the Phileas Fogg brand a few years ago. That has been a big success story. It is our key sharing proposition. It is much bigger for us in grocery that it is in convenience and impulse. That sharing market is very competitive with brands like Pringles, Doritos, Kettle and Tyrrells. But we think Phileas operates a role with its very unique flavours, backed by the Taste of the World campaign.
Within convenience and impulse, Phileas currently has two lines in the £1 range. This year we are investing in the brand and bringing a new flavour in. It is a key part of the proposition.
What other activity does KP have to support its brands?
Nuts remains incredibly important to us. We have to show real category leadership, being the number one brand. Last October we brought out a £1 PMP range with four flavours – Original Salted, Dry Roasted, Chilli and Salt and Vinegar. That has been really successful.
We have some exciting news coming up on our Christmas portfolio as well.
In 2015 we are ensuring we put in the right level of investment to support our brands to drive the brand equity, making sure it is front of mind. A good example of our new product development is Hula Hoops Puft, a product that fits the trend of permissible snacking. There is less than 100 calories in a pack.
On-pack campaigns have included McCoy's two-for-one. Other activity includes in-store support, TV campaigns, digital activation and national link-ups. There has been constant investment in the brands.
Our approach is what we call a bonfire rather than fireworks. A bonfire is always on, rather than fireworks, which are tactical bursts of activity and then become dormant. We are constantly trying to drive awareness, investment and support to get the media into the brand.
One thing we have been working really hard on is our display solutions. A lot of feedback we get is about how do we bring excitement, theatre and imagination into store. Whether that is something as simple as a dumpbin, an off-shelf shipper, a stacking unit, making sure we get them replenished. It is not just about filling them one time. We have put some investment behind that.
Around August and September we will be doing the on-pack promotion with the Football League. We will be putting a lot of investment behind that. In the summer we have the McCoy's relaunch around June and July.
We have big distribution drives on some of our key products like Hula Hoops and Pom-Bear.
How do you want independent retailers to perceive KP? 
Firstly, we want to be easy to do business with, making sure we take the seasonal opportunities, understanding consumer insight, retailer insight and making our products and offers fit that. It is all designed around value creation and demand generation.
We also want to be famous for growing the category. How can we grow the category sales? We are very customer-centric. We deliver on our commitments and we have a real dedicated team behind that.
That is a snapshot of how our business has evolved over the last couple of years, what is the focus for 2015 and how we want to approach that.
We have a sales team who talk to independent retailers. We partner with the trade press. We use other retailers to communicate with retailers. 
Tell us about your SnacKPartners concept.
SnacKPartners was launched last year to help independent retailers grow sales. We chose six retailers, went into their stores and relaid the fixtures. We took everything off, cleaned the shelves, changed the fixtures and the shelf-edge labels. We added some point of sale following our category plans. Then we restocked it and went back eight weeks later. We measured the sales before and after to see what had been the uplift.
We shared simple, straightforward category advice, guidelines, merchandising tips and approach. After that eight weeks the average uplift of the stores' crisps and snacks sales was 40%.
For us, the question was how do we use that to communicate? We understand retailers will always listen to other retailers, whether it is best practice, examples of success or examples of excellence. How do we get those guys to share it but then how do we work with our trade media partners to shout about it.
That campaign used six retailers. We have expanded the campaign to work with a further 150 retailers since the beginning of this year.
We understand one of the challenges for an independent convenience retailer, they have these big stores like a Tesco Express or a Sainsbury's Local coming into the same shopping parade. They have huge resources, expertise, knowledge and advice. How can we share our knowledge and advice with an independent retailer to help them make the most of the opportunity within the crisps, snacks and nuts fixture?
That was where SnackPartners came in, this real simple category based advice, merchandising and display tips.
We are making sure SnackPartners is working with the 150 retailers. We are in the reviewing period of working with those retailers. Once we get to the end of that we will be making sure similar sorts of results are coming through. We will share what uplifts we have seen and then move on to phase three of SnacKPartners.
We will make sure SnacKPartners is constantly evolving and staying relevant but equally that it is adding value.
There is a SnacKPartners email address so that retailers can email at any time for a planogram. If someone else wants to get involved they can email us for a planogram.
We have worked with different partners to select the retailers who have taken part in SnacKPartners. We have spoken to those retailers who understood what we wanted to achieve. They wanted to work with suppliers and manufacturers to make the most of it. They were people who were shortlisted after we worked closely with the Association of Convenience Stores. They recommended a series of people. Working in partnership with our PR agency, we contacted the retailers and explained what we were doing. We found there was an overwhelming response of people wanting to get involved.
Also we looked at the stores where we could add value. Some of them we went to see, the fixtures were first class. They were already doing excellent stuff.
We don't have a field sales team that calls through the door of independent stores. We work with symbol groups, Palmer & Harvey and the vans operation to offer solutions through the line on that side.
We work with cash & carries on their rack ends and bus stops. The convenience, impulse and forecourts sales team has a total of 32 people. That is segmented by channel into high street, symbols, cash & carry and foodservice. Their work includes calling on the depot and managing the central office and head office.
For me the excitement of convenience and impulse as opposed to the grocery side is the breadth of customers you have, the complexity within the channel. That to me is the excitement within it.
What trends do you see in the snacks market?
There is more competition now from non-potato snacks. It is good for the category. It is hopefully bringing new people into the category. We have a product called Velvet Crunch made from a root vegetable called cassava with just 87 calories per pack and 60% less fat than standard potato crisps – and no MSG, artificial colours or flavours. It had excellent sales around the New Year period.
Some of the NPD other operators have brought out is good because it is investing in the category and bringing new news to the category.
We are also seeing a big trend in baked. We have a baked offer for our Penn State range. Baked is tapping into that permissible snacking opportunity.
Hula Hoops Puft is more permissible. It comes down to what the need state of that shopper mission is. We have to make sure our portfolio is balanced and available to tap into each of those trends. There is a trend for the healthier type of product. We have seen products coming into the market like Walkers Pops, Special K. It is a challenge to get traction behind those. How do we do it in a really fun way? We think Hula Hoops Puft taps into that.
KP Nuts is the clear leader in the nuts category and has a responsibility to lead the category. Whether that is bringing new news to the category, evolving the category, looking at the adjacencies. One thing we are working on hard on is how in an independent retail store can we work on some of the adjacencies. An example is we have a nuts dispenser which can be sited in the beers, wines and spirits aisle. Where someone is picking up alcohol to take home there is that complementary link within it. So we have to understand how to create a drink link. While we have the adjacency to drive the purchase can it be tied in with a deal to buy a four-pack and get a pack of nuts?
We have seen an increase in meal deals offering nuts as an alternative to a pack of crisps.
We offered McCoy's Ultimate, the sharing £1 range, as part of a meal deal with Molson Coors. It was a regionally based trial where consumers could buy a four-pack of Carling and get Ultimate free. It was a small scale trial but the results were very encouraging. We are trying to understand how we can do more of that.
What is a typical day for you?
It always starts with a wrestle around the M25. I am based near St Albans. I go the wrong way round the M25 to take the M40 to Hayes, Middlesex where KP is currently based. When I was at Premier Foods I moved to St Albans with the job so I had got used to an easy commute. Now I am out of the house by 6.15. KP is moving the head office from Hayes to Slough in September. Once I am in the office I am usually in a series of meetings throughout the day, working with the team. I try to get out of the office as much as possible with customers, with the team in the field. That is where the real richness is, to get customer feedback, sharing our plans, sharing what direction we are going in. It gives people reasons to believe in KP. Why should they support our plans, why should they give us space? There is no typical day, that is more of a typical week.
What is the ultimate aim for KP?
Our ultimate vision is how do we make our products a compelling choice at point of purchase. It is about how do we keep doing that while the vision of the company is providing snacks that enrich lives on a daily basis. For me success is about how do we keep working with our partners, growing their sales and adding value to their business. Between that it is also about giving the consumer delight.