The path for such an aggressive undertaking was paved by last July's CN$ 26.7 million acquisition of Humpty Dumpty Snack Foods Inc., which operates in the eastern regions of Canada and the US. The Humpty Dumpty distribution network includes thousands of outlets in the east, ranging from mom-and-pop shops to convenience stores to major grocery chains.
The arrival of Old Dutch's kettle chips in Eastern Canada is coinciding with the removal of Humpty Dumpty's Maine Coast brand of kettle chips, which had a market share of about 5 percent.
Scott Kelemen, the company's national director of marketing, says research has shown that Old Dutch is an iconic brand in Western Canada and people align it—along with its trademark windmill—with trust, quality, and consistency.
"They also associate it with good times, memories, childhood parties, social events, and sports," he says, adding that the brand's popcorn, popcorn twists, and Restaurante salsas have also been added to Eastern Canadian store shelves as well.
To ensure the brand is the same across the country, Kelemen says the company is preparing to unveil a full-scale awareness program via television as well as trade and consumer publications in its new markets. It is also going full bore with in-store brand awareness, including prominent displays and attractive point-of-sale material with consistent messaging.
"We're not as flashy as other [snack brands]," he says. "We're going to build ourselves in the community. It's going to be a long process. We understand that."
He adds, "The challenge is going to be getting trial on the product and ensuring people are aware of our brand and what it stands for. Eventually, we'll have the same penetration in Eastern Canada."
Kelemen is quick to point out Old Dutch's mainstream chips are not going to be rolled out across the country. Not yet, at least: He says the company is first upgrading Humpty Dumpty's mainstream chips to Old Dutch standards and repositioning them as a premium product. If Eastern consumers embrace them, problem solved. If not, the company will look to send Old Dutch Dill Pickle, Ketchup, and other flavored chips from coast to coast. He says a decision will be made within the next 12 months.
"It's going to come down to the consumer," he says. "They'll tell us if they see it as a price brand or a high-quality brand."
Old Dutch was launched in St. Paul, Minnesota, in 1934. It expanded to Canada 20 years later, setting up its Canadian headquarters in Winnipeg. The US and Canadian companies are run separately.
Kelemen says the company will continue to use the tag line, "Everybody's flavor favorite." "It's something we live [by]," he stresses. "Our key focus is what's in the bag."
Kelemen says Old Dutch has traditionally been a strong supporter of local hockey tournaments, amateur sports teams, and wedding socials in Western Canada—and it plans to have the same community involvement in the east.
He's optimistic that the challenge ahead in Eastern Canada isn't as great as one might think. He says the company discovered through market research that 30 percent of people in the six provinces knew about the Old Dutch brand of potato chips. (To be sure they were hitting the mark, the researchers made certain consumers weren't confusing the snack food company with Old Dutch Cleanser.)
He attributes the recognition to transplanted Western Canadians and word of mouth.
Kelemen says because it's not practical to ship a product as fragile as potato chips clear across the country, Old Dutch has upgraded the manufacturing processes at the Humpty Dumpty plant in Prince Edward Island to ensure it can produce the Dutch Crunch chips to Old Dutch's specifications.
"We want to make sure we have the same quality and consistency at the PEI plant as we do with the products in the market today," he says.
Kelemen adds that while he's sure many expatriate Western Canadians will run out to their neighborhood 7-Eleven to pick up their favorite Old Dutch chips to remind them of home, the company is targeting the masses, regardless of whether Old Dutch conjures feelings of nostalgia.
Rob Warren, director of the Asper Centre for Entrepreneurship at the University of Manitoba, applauds Old Dutch's strategy because the population density is so much higher in the east, particularly in southern Ontario.
On the downside, however, he says Old Dutch will face firmly entrenched competitors.
"Frito-Lay has deeper pockets to fight with," he says.
Warren adds that while Old Dutch is dominant in its existing markets, and despite Kelemen's research, the brand isn't very well known in its new territories.
"[Old Dutch has] a real recognition problem," he says. "It hasn't really shown up on anybody's radar screen. Because of that, it'll have to spend a lot of time building brand awareness. That's an expensive and long-term strategy."
Meaning Old Dutch will need the "chips" required to be a contender in the poker game that is the Eastern Canadian snacks market.