Mikesell’s knows it can’t rely solely on its 104 years of history to thrive in the intensely competitive snack-food industry.
The Dayton-based company inspires unshakable loyalty from many Miami Valley residents. Although it sells its chips and other snacks in four states, Mikesell’s market penetration is highest in and around the Miami Valley. Dayton Daily News readers voted Mikesell’s potato chips “Dayton’s Signature Dish” in 2008.
But that hometown enthusiasm didn’t stop Mikesell’s from enduring some “challenging times” that started in the early days of the recession in 2007 and 2008, said Luke Mapp, Mikesell’s marketing director and the great-grandson of company founder D.W. Mikesell.
The poor economy prompted some cash-strapped consumers to switch to cheaper store-brand and generic snacks — and many never switched back, Mapp said. Meanwhile, Frit0-Lay — with a whopping 36.2 percent of the national market — and other national-brand snack producers with fat marketing budgets and economies of scale did everything they could to seize greater market share from smaller, regional snack producers.
“They can outspend us, and they can outprice us,” Mapp said of his company’s much larger competitors.
But Mikesell’s is clawing its way back. The family-owned company doesn’t release specific sales figures, but Mapp said sales of Mikesell’s brand snacks are growing again. And the company is unveiling two new flavors — one with a regional twist — along with a marketing campaign that targets “millennials” and that will show up at Dayton-area festivals and special events this spring and summer before spreading to other markets.
“We need to appeal to a younger generation,” Mapp said. “Our core audience is aging — some are retiring to Florida — so we feel we need to focus on millennials,” those in their teens early-to-mid-30s down to teen-agers.
The stakes are high. Nationwide, snack foods are a $31.4 billion a year industry that generates $3.8 billion a year in profits, according to IBISWorld Inc., a Los Angeles-based independent industry research firm.
In a report released late last year, IBISWorld projected that snack companies, which reported an 2.3 percent a year annualized revenue growth from 2008 through 2013, would enjoy continued revenue growth averaging 1.7 percent a year over the next five years, through 2018. A forecast rise in disposable household income, combined with a slower rate of increase in the price of corn, will boost the prospects of snack companies, and will likely attract new competitors to enter the market, IBIBWorld researchers said.
Mapp said his company is ready to compete. As a small, nimble company, Mikesell’s can embrace region-specific or other “edgy” flavors that national companies might shy away from, and get the product to market faster, he said. The local snack maker’s newest flavor of potato chip, for example, is “Cincinnati-style Chili,” with subtly spicy cinnamon flavors, and its other new release is Buffalo-style puffcorn, which packs a robust heat.
Both products rolled out on a limited basis in December, and “did very well,” Mapp said. They’re now “hitting retailers’ shelves in a bigger way” this month, he said.
To help unveil the new flavors and to introduce — or reintroduce — the Mikesell’s brand to a new set of consumers, the company next month will launch what it calls a “chipologist” campaign. Utilizing a custom-made tricycle, a Mikesell’s brand ambassador will pedal around the crowds at local festivals and other special events offering samples, coupons, a flavor workshop of sorts, and a bit of knowledge and history surrounding Mikesell’s.
And the company boasts a rich history. Although Mikesell’s can’t lay claim to inventing potato chips, which started out as “Saratoga chips” in the mid-1800s, Mapp says it is entirely possible that Mike-sell’s is the oldest continuously operating potato chip producer anywhere. And legend has it when his great-grandfather started delivering those chips via bicycle, if his bike suffered a mechanical failure, D.W. Mikesell would call upon the Wright bicycle shop of Orville and Wilbur fame for repairs.
With such a compelling century-plus tradition, Mapp acknowledged it’s a “difficult balancing act” to modernize the Mikesell’s brand without alienating the snack maker’s core customers — mostly baby boomers and others who have been enjoying the brand for several decades.
Mikesell’s hasn’t jettisoned any of the customer-favorite flavors or product lines that built Mikesell’s popularity to clear shelf space for the new products, and, “We don’t think our new flavors will turn off any of our core customers,” Mapp said.
But there have been changes to the packaging. Gone is the slogan that Mikesell’s used for many years: “They are delicious.” It was replaced recently by “Creating Delicious Since 1910.” Nutrition information is prominently displayed on the front of the package, and an image of founder D.W. Mikesell also makes an appearance. The company also dropped the hyphen in what used to be “Mike-sell’s,” to erase any confusion about the founder’s last name.
For now, though, the focus is on flavors. Mapp said Mikeksell’s has two more new flavors that he described as “unique and aggressive” that the company will introduce in the fall.
He is not, however, quite ready to disclose what those flavors are yet.