2 Suggest ways in which Kettle Foods can surmount the threat from own-label brands, with particular reference to direct marketing. Kettle Foods has discovered that its Chips brand does not need advertising support. Might this be a problem now supermarkets are promoting their own in-house brands?

Kettle Chips were the first ‘designer crisps’ to come to Britain in the late 1980s in upmarket wine bars and delicatessens. Now they are everywhere. They are never advertised on television, the printed media or on poster sites, yet annual sales turnover of this type of snack in the UK is now almost £50 million.

In the UK, the snack market is worth around £3 billion a year, of which potato crisps forms onethird.

This has remained steady for about ten years with the exception of the premium hand-cooked chips market (principally occupied by Kettle Chips) which is growing at 30 per cent per year. Kettle Chips are never advertised, so what is the secret of their success?

Cameron Healy had no working capital when he founded Kettle in Oregon in 1978. He contended that customers with sufficient discretionary income would be prepared to pay around £2 for a top quality packet of crisps. His idea turned out to be correct and he developed Kettle Chips. By 1982 they were the only hand-produced potato crisps in the USA. He came to Britain in 1987 to research

‘natural foods’ and set up crisp production with Tim Meyer in Norwich in 1988 and moved to larger premises in 1998. Since then year-on-year growth has been over 30 per cent and exports to Europe have grown at an even faster rate.