On the menu, on the shelf

by Lynn Petrak
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Food service companies like Krispy Kreme and Otis Spunkmeyer are crossing over into the retail space.

With the latest U.S. Department of Agriculture research showing a dead heat between retail and food service consumption — Americans spent an equal $65.9 billion in the month of July on away-from-home and at-home meals — it’s not surprising that co-branded product development and marketing aims to take advantage of interest in both channels.

This crossover effect is evident in the retail bakery aisle, where the venerable Otis Spunkmeyer food service brand is re-launching a line of sweet baked goods. The top-selling food service cookie dough in the country, Otis Spunkmeyer, San Leandro, Calif.,  is set to unveil a new retail portfolio in early 2016 that incudes cookies and muffins as well as loaf cakes, snack cakes, cupcakes, Danish, cinnamon rolls, brownies and donuts. The line includes single-serve products as well as larger packages of individually-wrapped sweet goods, both featuring retro-style graphics and a tagline of “No Funky Stuff” that underscores the use of quality ingredients.

“This is the boldest step we’ve taken with Otis Spunkmeyer since its foundation in 1976,” said Kristina Dermody, brand president at parent company Aryzta, L.L.C. “We’re not only expanding the way that people can enjoy Otis Spunkmeyer with new foods, but also the places they can find our range of cookies, snack cakes and other baked treats.”

Retail analyst Burt Flickinger, managing director at the New York City-based Strategic Resource Group, says that leveraging the equity of the Otis Spunkmeyer brand is rooted in more than just a name.

“For Otis Spunkmeyer, because of the high quality of the cookie and the depth and range of its distribution, the brand has tremendous appeal,” remarked Mr. Flickinger, adding, “And the price point is also a very good value.”

Mr. Flickinger cites the co-branded line of Cinnabon “bakery-inspired” cinnamon rolls from the Pillsbury brand of General Mills, Minneapolis, as another example of a successful food service-retail synergy. “There is Cinnabon for similar reasons — they have a fantastic product and strict control of standards from corporate that translates into a very fresh product at retail,” he noted.

Meantime, there are other food service brands that have taken the leap into supermarket merchandising, including the Marie Callender’s line of frozen pies and desserts, a “Panera At Home” line of frozen bread sold in flexible packaging in the freezer section and the Krispy Kreme line of baked goods, which includes items ranging from a box of a dozen traditional glazed donuts to a lidded cup of donut holes to a newer line of fruit-filled Danish. At the same time, many C.P.G.s that have built a strong business on both the retail and food service side — think Sara Lee, Peoria, Ill., and Flowers Foods, Thomasville, Ga., among others — continue to develop and launch new items in both channels.

When it comes time to build upon a restaurant or food service name at retail, Mr. Flickinger said any brand should keep in mind the importance of graphics.

“The name on the package is important, but so is working with packaging experts on a good package,” he pointed out, noting that bold colors like red and blue have been shown to spur sales. “Otis Spunkmeyer, with a bright red branded product with white reverse, catches the consumer, especially as an impulse buy.”

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