We generally position ourselves at a price premium to most other brands.  We compete on superior branding, product quality, and strategic positioning to carry off pricing premiums such as they are.  We have pioneered the ‘Grip ‘n Pour’ pack format specific to convenience (and won the NACS cool new product award in our introduction year with it).  We also provide our product in  retailer-labor-friendly caddies (5Ct.).  Our competition has not seen fit to copy either of these innovations, until very recently.  We carefully foster trade relationships at both the retailer and distributor layers, by building relationships, by working with them promotionally, but also by following through on commitments and acting as a constant, steady source of supply.

We generally do not compete on price unless we have absolutely no other option.  We strive, however, to remain price competitive: certainly below the top tier and but above the middle of the pack and well above the bottom tier of pricing.   We feel we are pretty much at the top end of the convenience price elasticity curve, above which we have seen rapidly diminishing volume trends.  

A full description of the competitive landscape requires a bit more explanation.

In Convenience there are two main distribution paradigms: DSD versus ‘distributor-provided’ also known as ‘Warehouse.’

Though consumers generally are not aware of a distinction (though they may wonder why some categories of snacks appear in two places in the store), the trade does make a distinction; it’s very important for them to develop categories and products from both distribution paradigms to promote healthy competition between them, and ultimately leverage the ‘balance of power’ to their own advantage.  

That is why I’ll describe competitors in both DSD and warehouse categories.

DSD:
Frito Lay’s Smartfood – the 800 pound gorilla in the category, but this product remains the ‘red-headed step child’ of the Frito lineup in convenience (we have seen innovation on the grocery side under this brand umbrella recently).  Frito also markets CrackerJacks, which is under-promoted but recently we have seen some innovation under this brand umbrella as well (namely CrackerJack’d, which has nothing to do with popcorn at all, oddly enough).
Other DSD brands include Lance’s, Troyer Farms, Snyder’s, etc.  These brands generally compete on pricing and placement.

We compete against these products, though we are typically we are higher priced, primarily on the strength of our quality, our branding, our (real or perceived) healthy characteristics, and as a competitive alternative to DSD.  We also provide the retailer a higher margin, with minimal extra labor (they stock the shelves, but our caddies are easy to work with).  Typical retailer’s margin on DSD is around 25% on a $0.99 item, or about a quarter. Typical retailer’s margin on a warehouse item like ours is 40%+ on a $1.49 ring, or $0.60 of margin.  You’d think the retailers would be highly motivated to move volume over to the warehouse set of products; in fact some (but not enough!) are starting to do just that.  Some very progressive chains have replaced DSD altogether with a ‘replicated’ warehouse set.



Other Warehouse brands:
Until recently, there were not many other warehouse brands; we consider ourselves pioneers in this area of the market. 
•	Orville Redenbacher – until recently a kernel and microwave player, their RTE launch is only recent.  With their strong branding they will undoubtedly make progress, although their recent ‘Popcrunch’ product launch is overpriced, potentially defocusing, not positioned as a healthy entry, and frankly not a great product in our opinion.
•	Popcorn Indiana, a decently strong grocery brand, makes inroads occasionally into convenience, but has had a few false starts. They have a large pack size, which may not be to many retailers’ liking. They are also priced higher than we are.  Nonetheless they’re there and we occasionally sell directly against them.  During their recent recall, we have seen little new sales activity from them.
•	Holly’s is a very small regional player out of the Midwest, trying hard to go national.  The company bottom-feeds on pricing and deals, product quality is suspect, management is quirky, and their ability to supply retailers on time and in full is reportedly sketchy.

A strong regional player in the Northwest, Erin’s (of Tim’s chips fame), has a hybrid DSD/Warehouse model and some very effective regional distribution.
Vic’s, a traditional grocery brand, is mostly holding share in grocery and is seldom seen in convenience.
Cretor’s brand and Skinny Girl have both recently launched in big box / warehouse club, with some apparent success; we have not seen them in convenience yet.
Another local competitor in Denver, Oogies, has made decent progress in the natural grocery segment, and has made forays into convenience as well, but with little apparent success.
There are a host of smaller natural-grocery focused brands, mainly claiming ‘organic.’
Most very large grocery chains will have private label or store brand popcorn.
