Carolina Foods, Inc.: Can the Duchess Become Queen?

Case Solution

Tamara L. Cohen, Linda Swayne
North American Case Research Association (NACRA) ()

After significant growth in 2013 when Hostess Baking, a large competitor, filed for bankruptcy, Paul Scarborough, CEO of Carolina Foods, Inc., wanted a strategy to drive that growth for his family’s 80-year-old commercial bakery and the Maintain Duchess brand. Several other commercial bakeries bought hostess brands and Twinkie, an iconic American snack cake, returned to the market. CFI’s Duchess family brand of sweet baked goods comprised honey buns, donuts and cakes made in the original Charlotte, NC factory and distributed to markets in the United States, Canada, Mexico and Puerto Rico. Consumer tastes were changing: Snacking in general increased and consumers increasingly focused on healthy, or at least healthier, snacks. Social media changed the marketing landscape: can honey buns, donuts and cakes be sold online? Baked confectionery businesses were steadily consolidating across the country. CFI had no new product launches in the last twenty years, the company did not have its own marketing staff, and a marketing budget was not allocated (there was a sales budget). Students will be able to apply a variety of basic marketing principles and tools to analyze and select a viable marketing strategy for CFI. What growth strategy should CFI follow? Students can take into account new product development, branding, market penetration, and market developments, including changes in sales strategies.

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