Managing editor, Marina Mayer, discusses the latest snacking trends with Julie Dunmire, brand director for Salem, Ore.-based Kettle Foods, Inc.

It’s all part of the annual process that we do for our upcoming 2009 State of the Industry report.

During the past two months, the editors at Snack Food & Wholesale Bakery magazine have contacted dozens of experts in the industry.

Unfortunately, we once again gathered too much information that won’t make it into our print edition. Good thing we have www.snackandbakery.com, where we can publish the “uncut” versions of our interviews.

Check out what Dumire has to say about the company, its line of new Kettle Brand chips and the overall state of the snack industry.

SF&WB:  What are the emerging consumer trends in the chip category and how are they driving sales? 

Julie Dunmire: The overall potato chip category is now growing for the first time in several years, due to the trend toward eating at home and brown bagging. Even when the category was largely flat, Kettle Brand had been growing at a record pace. Over the last quarter, our growth story has been especially nice, with sales growth exceeding 35%, which is three times the category average, according to AC Nielsen 12 weeks ending January 24.
 

SF&WB: How are you meeting those trends with new products introduced over the last few months? Please describe new products, including the month introduced, varieties, benefits (i.e., gluten free, contains Omega-3). 
 
Dunmire: The company has recently revamped its line of Kettle Brand Baked Potato Chips, the only baked potato chip made from whole slices of real potatoes. In addition to new packaging for existing flavors -- Aged White Cheddar, Hickory Honey Barbeque and Lightly Salted -- the company also introduced two new Baked flavors, Sea Salt & Vinegar and Salt & Fresh Ground Pepper. Other new products include Kettle Brand Sweet Onion Potato Chips and Kettle Brand Jalapeño Potato Chips. All Kettle Brand products deliver on the company’s natural promise of nothing artificial, just delicious, all natural ingredients.
 

SF&WB: What are your top-selling products and how have they changed from two or three years ago? 
 
Dunmire: Our Kettle Brand Krinkle Cut Salt & Fresh Ground Pepper and Kettle Brand Lightly Salted Potato Chips continue to be our most popular flavors. But we’ve also seen consumers trending toward comfortable, cozy flavors like our new Sweet Onion.
 

SF&WB: Have you redesigned your packaging? If so, how and why? 
 
Dummire: Yes, we recently revamped our Kettle Brand Baked Potato Chip line with new packaging to make the products more aligned with the existing Kettle Brand and easier for consumers to find on the shelf. Additionally, we made some changes to the core Kettle Brand line to help consumers quickly find their favorite flavors and clearly communicate the natural promise of nothing artificial, only all natural ingredients.
 

SF&WB: Where are the greatest opportunities for growth in your category?
 
Dunmire: Kettle Brand products are available in supermarkets and natural food stores in all 50 states as well as Canada, Asia and Western Europe. The region with the greatest growth potential is in New England and our new factory in Beloit, Wis. is helping to fuel the growing demand to the east.
 

SF&WB: Have your brands branched out with new “hybrid” products that compete in other categories? For example, introducing a pretzel or whole grain crisp to compete in the salted snack arena. Or developing a cookie product that competes in the snack bar category.
 
Dunmire: Our newest product is the first ever Kettle Brand Create-a-Chip Kit we’re launching for a limited time as part of the new People’s Choice promotion. The kit includes everything consumers need to make the ultimate, all-natural potato chip flavor at home in their own kitchens. Once someone creates their own flavor masterpiece, they’re invited online to share recipes in hopes of inspiring the next great Kettle Brand Potato Chip flavor. The kits will be available in the summer at Cost Plus stores nationally and in the Fred Meyer stores in the west. This is the first time a People’s Choice product has been available at retail.
[Check out Marina's column, The Final Word, printed in the July issue, to learn more about the Create-a-Chip Kit].
 

SF&WB: What is the economic outlook for the potato chip industry and the economy in general? Would you rather have the commodity crisis of last year or the recession that we are in now? Why?
 
Dunmire: The economic downturn has stimulated growth in the overall potato chip category as more consumers are eating at home more often. Kettle Brand Potato Chips has a great story to tell, as it is the only premium potato chip brand that has experienced volume growth (pounds) at a rate faster than dollar growth, which is an important measure of brand health. Kettle Brand also continues to be the No. 1 selling natural potato chip brand in the country, the third largest brand in the premium potato chip category and is the tenth largest brand in overall potato chips.
 

SF&WB: How have you streamlined or expanded your operation to meet the demand for your products? 
 
Dunmire: Our factories in Salem, Ore., and Beloit, Wis., are running at capacity and we are exploring expansion opportunities to meet increased demand.
 
 
This year’s theme for the 2009 State of the Industry is superheroes. That said…
 
SF&WB: What are the biggest forces of good and evil impacting the industry, and why? 
 
Dunmire: These days it’s important that companies not just make good food, but are good to the Earth and community at the same time. Kettle Brand backs its natural brand promise with a commitment to sustainable business practices. We couldn’t make the best tasting chip if we didn’t build our company on the principle of coexisting in harmony with the environment and our communities. Green building, renewable energy habitat restoration, recycling and chipping in to help our local community and the environment, make up the pillars of our commitment. 
 

SF&WB: What does it take to be a superhero in your category, and why? 
 
Dummire: We pioneered the kettle-cooked style with our delicious, all-natural, hand-cooked potato chips back in 1982 and have been setting the standard ever since. To continue our leadership in the category, we strive to introduce new Kettle Brand Potato Chip flavors that are both innovative and layered, while also approachable with wide appeal. And, as always, made with absolutely nothing artificial.
 
 
SF&WB: What types of trends are “saving the day” in the industry? 
 
Dunmire: Growing consumer demand for real food even in the snack aisle is driving sales in the natural category and helping to fuel our company growth. Our potato chips taste so good because they’re made with all-natural ingredients. We use only the finest potatoes and delicious blends of all-natural seasonings to create bold flavors consumers love.