Lance Snacks Competition
Now Viewing Lance Snacks's competition in: Snack Foods Manufacturing (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's customers? - Typical customers are grocery wholesalers, warehouse club stores, food service distributors, vending machine distributors, and convenience stores.
How much does the company rely on key accounts for sales? - Supermarket sales account for around 50 percent of all snack sales. Warehouse clubs and mass merchandisers represent around 10 to 15 percent.
Does the company produce private-label brands? - Private-labels account for around 5 percent of sales for potato chips, tortilla chips, and pretzels. Private-label market share for ready-to-eat popcorn is 10 percent and 25 percent for mixed nuts.
What are the company's sales channels? - Major sales channels include independent distributors, third-party brokers, internal sales forces, and direct store delivery programs.
How does the company track sales? - Most large companies manage real-time sales tracking using a network of handheld wireless devices and centralized enterprise resource planning (ERP) systems.
How does the company market its products? - Major types of marketing include TV and radio ads; coupon offers; movie, TV, and celebrity tie-ins; in-store discounts and end-cap promotions; sweepstakes; and product-specific websites.
How does the company respond to customer needs and inquiries? - Customer service operations are extensive, as bad publicity can severely damage a brand. Most companies manage toll-free help lines and web-based email submission forms to address product questions and concerns.
What are the typical prices received by the company? - Typical product prices are $0.30 an ounce for potato, tortilla, and flavored corn chips, and $0.25 to $0.50 an ounce for roasted nuts, depending on the variety. Private-label brands cost 20 to 40 percent less than name brand.
Competitive Landscape
Demand is driven by consumer tastes and health considerations. The profitability of individual companies depends on efficient operations, effective marketing, and a strong sales force. Large companies have advantages in raw material purchasing, manufacturing efficiencies, distribution, and marketing budgets. Small operations can compete effectively by self-distributing products, selling online, or marketing snacks as gift items. The industry is capital-intensive: average annual revenue per employee is $500,000.
Business Challenges
CRITICAL ISSUES
Volatile Ingredient Prices - The price of critical commodity inputs such as corn, tree nuts, soybean and cottonseed oil, and potatoes can increase significantly due to poor farm yields, unpredictable weather patterns, and market reactions to government farm subsidies. Tree nuts can represent up to 50 percent of the total cost of goods sold for snack foods manufacturers. While potatoes are a less expensive input, the price of white potatoes can fluctuate by 30 percent or more from year to year.
Highly Competitive Industry - The snack food industry competes with a number of other impulse purchases and snacking options, including cookies, crackers, candy, energy bars, in-store bakery items, fast food, and baking at home. Salty snacks are among the first foods eliminated or restricted for those on a weight-management plan. Snack food brands face growing competition from private label offerings, which offer comparable value at a lower price.
Industries Where Lance Snacks Competes
- Food
- Snack Foods(primary)
- Candy & Confections
- Grains
