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Case: Sunny Crunch In 1951, 16 year old Joseph Pelzer emigrated…
Case: Sunny Crunch
In 1951, 16 year old Joseph Pelzer emigrated from Germany with his family; they landed in Alberta. “Working on a farm in Alberta was a condition of our immigration”. A year later, Joseph not only mastered English, he graduated from high school at the top of his class. After graduation Joseph “had to make a choice: go to university or go into business … I sold pots and pans door-to-door for Peoples Credit Jewelers”. Later, he moved to Regina and opened a one-person painting business, “I painted barns and then graduated to houses. I added inside decorating. Life was slow; Joseph moved to Ontario.
In Ontario, Joseph Pelzer followed his interest in health and a fondness for food. “At the time, people thought that if you had a full stomach, you were well nourished”, he observed. “I did notice that when we fed horses pats, they performed better”. When Pelzer thought about oats and people together, he “thought that there ought to be a better way to eat oats [than porridge]. So I asked myself, why not bake them”.
Pelzer searched for a market for his roasted rolled oats. By recollected, “I was turned down 100 percent of the time. Nobody wanted my product. I was told that nobody would eat bird seed … I went back and asked to be given a break”. He convinced five stores to sell his product, “they sold and people came back for more”.
In 1970, Mr. Pelzer formalized his business under the name Sunny Crunch Food Products. Sunny Crunch products are manufactured in a state-of-the art plant, located in Markham, Ontario. Markham, “Canada’s high-tech capital”, is a 25-minute drive north of Toronto’s central business district. The plant is kosher-certified.
Today, the firm has 35 employees. Products are sold across Canada, the United States, the United Kingdom and Japan. Sunny Crunch products are sold in major supermarkets in Canada. According to Industry Canada, the company’s sales are CDN$5 million to $9 million; exports are CDN$200,000 to $499,000.
Sunny Crunch manufactures cereal, snack bars and nutrition bars under its own brand name, “Sunny Crunch”, as well as private labels. “Dietrim” is a meal replacement that is sold as drinks and bars. The company has an in-house graphics department.
One of Joseph’s mentors was Dave Nichols, former head of Loblaws’ grocery chain. Strategy magazine saw “Nichols’ “rewiring of Loblaws from a passive channel of distribution into an aggressive brand builder [as a prime example of] the transition of power from manufacturer to retailer”.
In 2005, Pelzer won the Markham Board of Trade’s Entrepreneurship Award.
Success did not come without setbacks. In 1985, the Globe and Mail newspaper reported that at least 11 purchasers of generic raisin-and-dates granola, produced by Sunny Crunch, found bars that were infested by live moth-like grain weevils. Loblaws waited three weeks after the first complaint before the grocery chain removed 3,000 boxes from its shelves. The store’s inspectors concluded that the problem was confined to limited number of boxes, “but we’re taking no risks”. The company was quick to solve the problem.
n 2006, Sunny Crunch Foods became certified by QAI (Quality Assurance International) to manufacture organic products. At present, the firm has two cereals with the QAI symbol of certification on the label: “Sunny Crunch: Low Fat Crunchy Granola” and “Sunny Crunch: Low Fat Organic Muesli”. Organic products come from a system of agriculture that strives for a balance with nature. Organic foods are minimally processed without artificial ingredients, preservatives or irradiation. Decades of experience have enabled the company to find the best suppliers for flavours and oats.
In 2018, Sunny Crunch launched a cold brew coffee called Steam-Punk’d. The production process uses the company’s existing water filtration process, as well as a blend of Arabica beans from Central and South America. The low-acid drink provides a “strong tasty jolt of natural energy”.
The company’s web site invites collaboration on product development,
“The best products are created through healthy relationships, and that goes double for healthy food products. It’s because of this that we believe in as much communication and feedback as possible. It’s why we created our preliminary questionnaire to get a better idea of who you are and what we can do for you. We want to be able to better plan for our first meeting so that it is more personalized to you and your specific needs. Please take the time to fill in the questionnaire, we want to understand both you and your business and what makes you unique. Let’s create something awesome together!”.
The company wants to increase its international presence.
List of References
“Branding News: Quaker extends into cereal bars.” Marketing, 2 June 2005, p. 13.
O’Connor, Tim. “Granola Pioneers: Sunny Crunch lives up to its innovative reputation with a new cereal cup that promises to bring millennials back to breakfast.” Retail Merchandiser, Mar.-Apr. 2018, p. 64+.
QUESTIONS PERTAINING TO THE MINI CASE
There are two question-sets
Set1 (20 marks)
Set2 (20 marks)
The first question is below.
The second question-set is presented in the next page. Prior to going to the next page, make notes of key points; there is no page-back.
Well-constructed point form is acceptable.
Mini Case: Question1 (20 marks)
Assess the company’s business situation.
Briefly describe three marketing ideas to build this business.
Discuss the positives and challenges/negatives of your ideas.
