Business Essentials: Can Real Crisps steal victory from Gary Lineker's mouth?

Walkers and Kettle have the marketing might, so a small firm wonders how it can find shelf space in UK supermarkets, says Kate Hilpern

Bite into a Real Crisp and you'll find it falls somewhere between the two best-known brands in the UK. Like Kettle Crisps, they're hand-cooked, but they're not anywhere near as chunky. Like Walkers, they are a traditionally British crisp, but there is extra substance to them.

"We know people like them. In fact, an independent company found our product was preferred to Kettle by 80 per cent. Our next challenge is discovering how we can gain market share against these top brands," says John Mudd, founder of Sirhowy Valley Foods, the manufacturer of Real Crisps.

Founded in 1997, the company hasn't always competed against the big boys. "We started off in a small unit in South Wales," explains Mr Mudd, "and after two years in business we'd run into some financial difficulties. Another company on the same site saw potential in us and invested heavily. That's when we started to grow."

The past three years have been particularly successful, taking the company from an annual turnover of £1.3m in 2001-02 to £5.2m in 2003-04. The new factory, which will open later this year, will allow it to step up its expansion in the UK, with turnover expected to rise another 50 per cent in 2004-05.

Currently, Real Crisps are available at Starbucks outlets nationwide, Moto service stations, and supermarket branches in Wales. "We are doing very well in Tesco, Sainsbury's and Asda, but we want to persuade these retail outlets to stock our product nationally," says Mr Mudd. "I think we need to come up with a great packaged idea to make this happen, though I'm not sure what that package should be."

It is critical that Real Crisps raises its profile nationwide, he admits. "If we go into supermarkets too early and we don't do enough to expose the brand to consumers, we could fail."

The problem here is that Sirhowy Valley Foods doesn't have the kind of funds enjoyed by Kettle or Walkers for supporting the brand. "We don't know how to become as well recognised as them without their money," says Mr Mudd.

The company has dipped its toe into advertising but isn't convinced of its success. "We certainly couldn't afford main- stream television advertising, and although we have done some advertising on the radio and at televised sporting events, I think it's subliminal. You'd have to look out for it to notice it. If you are a big name, that's fine, because the brand still registers in people's minds. But if you're not a known brand, my feeling is it's a waste of money."

On Sirhowy Valley Foods' side is that Real Crisps are competitive in price and they come in three pack sizes: 35g, 55g and 150g. The company is also considering introducing multi-packs for supermarkets.

In addition, the flavour range is huge - going from standard salt and vinegar right through to sweet chilli and Thai herb with lemongrass.

www.realcrisps.com

WHAT THE EXPERTS SAY

Mike Conroy, senior manager, commercial banking, HSBC

"Real Crisps has been very successful, considering the spending power of rival brands. However, most small firms grossly underestimate the amount of marketing investment required to establish a new brand, particularly in a short time.

"Without a large marketing budget, Sirhowy should concentrate its efforts on sales promotions, public relations and building reputation by word of mouth.

"The supermarkets will want to sell Real Crisps nationally if the margins are attractive to them and they believe they will sell.

"So, the challenge is to get them to sell. Offers such as in-store tastings and free samples can help.

"Sirhowy has a success story to tell and there are business awards it should consider entering. Even being shortlisted can provide free publicity, generating customer demand that will encourage the supermarkets and other outlets to stock Real Crisps."

Annabel Pritchard, corporate brand manager, the Chartered Institute of Marketing

"Mr Mudd's success is admirable, but ultimately only much-loved brands will win the battle for supermarket shelf space.

"While many leading brands have achieved household-name status through costly advertising campaigns, smaller firms have to act smarter to wring the most from limited marketing budgets.

"A PR campaign that gets people talking about the brand will help to put Real Crisps on the map, and need not be costly. For it to work, though, Mr Mudd has to do something different. The smoothies brand Innocent became hugely popular because its weird and wacky approach made it stand out from its competitors, while the craze for coloured plastic wristbands has enabled a number of charities to raise large amounts of money without expensive advertising. Similar creative thinking will help generate the kind of buzz that makes Real Crisps a 'must stock' item."

Bobby Hui, head of strategic planning, Saatchi & Saatchi, London

"Supermarkets will stock brands that consumers want. So the task is to generate desire for Real Crisps across the country, at a low cost.

"The problem is that crisps are rarely a considered purchase. 'Two pints of lager and a packet of cheese and onion' is the amount of thought most of us put into it.

"However, Real Crisps have two things going for them: provenance and great taste.

"Provenance first. A Welsh crisp needs a Welsh spokesperson - how about Gavin Henson as the face of Real Crisps? Coupled with an on-pack promotion - 'Kick for a million pounds' - at the very least, rugby fans all over the country would know the brand.

"Now for the taste. I would want to gain distribution in places where consumers do make a considered purchase ... what about Real Crisps in Blockbuster stores? People tend to pay more attention when they're in the mood to indulge themselves.

"Ultimately, the quantity distribution that Sirhowy wants will come if it gains quality distribution first."

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