Lance, partner ship first Looney Tunes crackers to China

It's been a busy week for China Premium Food Corp., a U.S. company ramping-up bakery and related operations in China. On Tuesday, the North Palm Beach, FL, company said that its first delivery of Looney Tunes snack crackers shipped to grocery stores in Shanghai, China. On Friday, the company announced that it had signed an exclusive agreement with the largest food distributor in China to deliver its branded, flavored milk line. (See ‘Looney Tunes' flavored milk is going to China our sister site, Beverage Online.)

The snack crackers are manufactured by Lance, Inc. (Nasdaq: LNCE—see stock portfiolio of My Bakery Online) and private-labeled via a licencing deal with Warner Bros. Looney Tunes cartoon characters. The compamies report that the product is "experiencing brisk sales in the stores in which the crackers have debuted."

The crackers are being sold in single serve packages( see picture, below). Three varieties of the crackers are available, and each kind is labeled with a different Looney Tunes character. (See Lance Goes Crackers, Looney Tunes in China) for product details.

According to the companies, each package are selling for 2.95RMB, which is the equivalent of thirty-five cents. The Chinese retail price is on par with the price for the crackers in the United States. The company expects to distribute them to about 300 retail stores throughout Shanghai by the end of the month.

For Lance, the priority was to expand its market and profit, which in the case of China Premium, appears to be a potentially lucrative partnership.

"We take this relationship very seriously," Lance's Harry Salvaggio, director of business planning told Bakery Online in a recent interview. (See Export Partners Discuss Shanghai Snack Rollout.)

"One of the biggest things we have to confront at the outset is how to take product manufactured in the U.S. and be able to put a good business proposition together where we can deliver the quality and the pricing that Chinese consumers desire. That was a big, big challenge. Chinese currency is about 8.3 to 1 U.S. dollar—we had a tough challenge to structure this deal so that both companies can make a reasonable profit," added Salvaggio said.

According to Roy Warren, President and CEO of China Premium, the companies went into this export arrangement with high confidence, based on market research "We knew that the Chinese consumers really liked the taste of the crackers and responded very favorably to the Looney Tunes characters that appear on the packaging. There is a void in the Chinese market of high-quality, Western-style snacks and our new crackers address this void."

Steve Langley, China Premium's COO, added that demand has exceeded expectations and the company is "seeing first-hand the great response from the Chinese to high-quality, Western products."

Edited by Bob Sperber
Managing Editor, Bakery Online