Utz Quality Foods Pricing and Marketing Strategy

            Utz is a brand that has grown very slowly over the last century, spreading its roots locally, then regionally, then nationally.  Warren Buffet, a big fan of Utz, contemplated buying it when it was privately-owned (Sellers, 2015).  Although Utz has always invested in marketing and advertising, sponsoring several sports teams and featuring their ads in stadiums (Utz To Be Presenting Sponsor of American League Division Series, 2020), the snack brand has revolutionized their digital and social marketing while making strategic acquisitions across the nation (Milliken, 2021).

Utz Quality Foods:  A Hanover, PA Snack Company

            Utz Brands Inc., based in Hanover, Pennsylvania, is a snack maker that specializes in chips, pretzels, cheese curls, and other salty snacks. (Sosland, 2020).  Founded in 1921 by Bill and Salie Utz (About Us, n.d.), the snack food company has grown to $900 million in revenue and is publicly traded on the New York Stock Exchange, making it the fourth largest salty snack producer in the United States (Sosland, 2020).  They are expecting revenue for 2021 to be $1.16 billion (Nunes, 2021).  To analysts, Utz has a brand which is “iconic with strong positions” and it continues to grow with sales growth consistently over 4%, for the past ten years (Sosland, 2020).

Utz’s Major Markets

            Utz is manufactured and distributed throughout the United States but has most of its market penetration on the Eastern side of the country.  Until 2010, all of their manufacturing and distribution was in East Coast states.  In 2020, Utz made acquisitions in Louisiana and California, which began their national market stretch (Timeline, n.d.).  Although they concentrate on improving their sales partnerships and supply chain to stores and warehouse clubs, their target market is the end consumer:  the snacking consumer who likes fresh, flavorful snacks (Utz Snacks, 2021).

            As Americans have become more health conscious, Utz has been marketing healthier products to consumers, including Veggie Chips, Half Naked Popcorn, and chips cooked in avocado oil rather than peanut oil or lard (Utz Brands CEO says that Boulder Canyon potato chips are doing well with customers looking for healthier snacks, 2021).  Consumers looking for healthier snack foods is a growing market segment for Utz.  Especially during the pandemic, giving consumers comforting snack foods while presenting a healthier option that is “approachable, and tastes great” is Utz’s angle on healthier products (Milliken, 2021).

Benefits of Utz

            The benefits of Utz to the market are its great flavors and its broad portfolio of products, allowing consumers to select from a wide variety of salty comfort foods and snack foods (Sosland, 2020).  Utz’s brand was build on family-owned, wholesome, fresh, flavor, and that is the appeal which they bring to market.  There is a wide selection of pretzels, chips, and other salty snacks in every flavor and size of package.  Utz enables consumers to turn their pantry into a convenience store of snack variety (Malovany, 2021).

Marketing Strategy Model

            Market penetration is important to Utz.  They invest heavily advertising and they have recently added significant investments in digital ads and social media campaigns.  In 2020, Utz spent $11.1 million on consumer marketing and advertising.  In 2021, they budgeted a 60% increase in digital and social marketing spending (Clifford, 2021).  In addition to increased digital and social marketing, Utz added a loyalty program which is based on text messages.  Customers joining the club need to send an SMS message to subscribe, which makes them eligible for exclusive discounts, giveaways, and merchandise (Ellman, 2021).  Of course, the SMS loyalty program gives Utz another marketing channel to use to reach consumers.  All of their marketing efforts including their digital ads, social ads, and SMS loyalty club are highly segmented so that appropriate offers go to the correct consumers (Ellman, 2021).

            Utz social media marketing, on YouTube for example, focuses on the real freshness and flavor of their chips, with messaging like “For Utz, we like to keep it simple when making our chips. Thinly sliced farm-fresh potatoes, cooked and seasoned with salt—for the perfect crunch every time” (Utz Snacks, 2021).

            Utz uses data to develop products and to identify markets and segments.  To determine what flavors and styles are more popular in certain markets, they are paying attention to market segment data from multiple sources including social media feeds.  Utz uses Hootsuite to manage its social media and a Meltwater to gather data from social media (Milliken, 2021).

Product-Pricing Strategies

            Utz has deployed a price-pack architecture and a portfolio mix that yields higher margins (Sosland, 2020).  Price-pack architecture is a framework to “provide consumers a viable selection of products that meet their needs at the price points they are willing to pay,” which increases the portfolio of products and gives the brand higher value to the consumer while typically driving a two- to five-percent increase in profit (Price Pack Architecture, n.d.).

            In order to maximize profits, Utz should approach a dynamic pricing model which varies consumer pricing based on the market and store which they are sold in.  Solutions like the KSS Retail PriceStrat software uses data to determine optimal pricing in retail stores.  Similar “big data” solutions can be deployed to optimize dynamic pricing for regional markets, upscale stores, warehouse stores, and online sales.  Since market share and market penetration are more important than anything for Utz at this point, it is important that they are price competitive with other brands on store shelves, so when using dynamic pricing, careful attention should be given to competitor product pricing in that sales channel.

Conclusion

            In conclusion, Utz is a brand that has figured out strategic acquisitions, is changing their marketing style to being more digital and social-based and is diversifying their portfolio to meet more consumer needs and wants.  Looking at their YouTube channel, their video marketing has a long way to go to rival most national brands.  Their Twitter is embracing the managed social media advertising style through HootSuite that many brands have become known for.  Now a publicly traded company, Utz has opportunity to continue to capture national market share with continued improvement.

by Art Ocain

References

About Utz. (n.d.). Utz. https://www.utzsnacks.com/pages/about

Clifford, T. (2021, March 19). Utz Brands doubles down on digital ads to grow snack sales, retain customers. https://www.cnbc.com/2021/03/19/utz-brands-doubles-down-on-digital-ads-to-grow-snack-sales-retain-customers.html

Ellman, K. (2021, July 29). How Utz Drives Customer Loyalty and Retention With an SMS-Exclusive Club. https://www.attentivemobile.com/blog/utz-drives-customer-loyalty-and-retention

Milliken, K. (2021, March 22). Balancing Pre- & Post-Pandemic Trends at Snack Maker Utz. https://www.innovationleader.com/strategy-and-governance/utz-brands-svp-on-tuning-in-to-post-pandemic-trends/1630.article

Malovany, D. (2021, October 25). Utz transforms itself into a national snack powerhouse. https://www.bakingbusiness.com/articles/54984-utz-transforms-itself-into-a-national-snack-powerhouse

Nunes, K. (2021, March 19). Acquisition expenses weigh on Utz Brands. https://www.foodbusinessnews.net/articles/18201-acquisition-expenses-weigh-on-utz-brands

Price Pack Architecture. (n.d.). IRi. https://www.iriworldwide.com/en-us/insights/publications/price-pack-architecture

Sellers, P. (2015, March 4). The secretive snack company that Warren Buffett loves. https://fortune.com/2015/03/04/warren-buffett-utz/

Sosland, J. (2020, August 31). Plenty of upside for Utz seen by analyst. https://www.bakingbusiness.com/articles/51749-plenty-of-upside-for-utz-seen-by-analyst

Timeline. (n.d.). Utz. https://www.utzsnacks.com/pages/timeline

Utz Brands CEO says that Boulder Canyon potato chips are doing well with customers looking for healthier snacks. (2021, March 28). https://www.potatopro.com/news/2021/utz-ceo-says-boulder-canyon-potato-chips-are-doing-well-customers-looking-healthier

Utz Snacks. (2021, September 24). Flavorful & Fresh. Unmistakably Utz [YouTube]. https://www.youtube.com/watch?v=XuinRZo9brU

Utz To Be Presenting Sponsor of American League Division Series. (2020, October 1). AP News. https://apnews.com/press-release/business-wire/sports-mlb-mlb-playoffs-baseball-north-america-f30736062ce1424996ffc074b64a6cd3

Published by artocain

I am a DevOps advocate, not because I am a developer (I’m not), but because of the cultural shift it represents and the agility it gains. I am also a fan of the theory of constraints and applying constraint management to all areas of business: sales, finance, planning, billing, and all areas of operations. My speaking: I have done a lot of public speaking in my various roles over the years, including presentations at SBDC (Small Business Development Center) and Central PA Chamber of Commerce events as well as events that I have organized at MePush. My writing: I write a lot. Blog articles on the MePush site, press-releases for upcoming events to media contracts, posts on LinkedIn (https://www.linkedin.com/in/artocain/), presentations on Slideshare (https://www.slideshare.net/ArtOcain), posts on the Microsoft Tech Community, articles on Medium (https://medium.com/@artocain/), and posts on Quora (https://www.quora.com/profile/Art-Ocain-1). I am always looking for new places to write, as well. My certifications: ISACA Certified Information Security Manager (CISM), Certified Web Application Security Professional (CWASP), Certified Data Privacy Practitioner (CDPP), Cisco Certified Network Associate (CCNA), VMware Certified Professional (VCP-DCV), Microsoft Certified System Engineer (MCSE), Veeam Certified Engineer (VMCE), Microsoft 365 Security Administrator, Microsoft 365 Enterprise Administrator, Azure Administrator, Azure Security Administrator, Azure Architect, CompTIA Network+, CompTIA Security+, ITIL v4 Foundations, Certified ScrumMaster, Certified Scrum Product Owner, AWS Certified Cloud Practitioner See certification badges on Acclaim here: https://www.youracclaim.com/users/art-ocain/badges My experience: I have a lot of experience from developing a great company with great people and culture to spinning up an impressive DevOps practice and designing impressive solutions. I have been a project manager, a President, a COO, a CTO, and an incident response coordinator. From architecting cloud solutions down to the nitty-gritty of replacing hardware, I have done it all. When it comes to technical leadership, I am the go-to for many companies. I have grown businesses and built brands. I have been a coach and a mentor, developing the skills and careers of those in my company. I have formed and managed teams, and developed strong leaders and replaced myself within the company time and again as I evolved. See my experience on LinkedIn here: https://www.linkedin.com/in/artocain/

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