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Marketing for basic brands gains in US as people spend less

Marketing for basic brands gains in US as people spend less
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First Published: Wed, Oct 07 2009. 11 35 PM IST

Changing preferences: A file photo of a customer at a supermarket in New York, US. Familiar packaged foods are regaining their stature as Americans spend less and eat at home more. Daniel Acker / Bloo
Changing preferences: A file photo of a customer at a supermarket in New York, US. Familiar packaged foods are regaining their stature as Americans spend less and eat at home more. Daniel Acker / Bloo
Updated: Wed, Oct 07 2009. 11 35 PM IST
Readers of this week’s People magazine could be excused for believing they were leafing through a Look magazine from 1959. Of the 44 full-page ads in the issue, half are for brands such as Campbell Soup and Co.’s Jell-O, Kraft cheese, Lipton tea and Post cereal.
Familiar packaged foods that were once dismissed as dowdy or out of date are regaining their puissance as Americans spend less and eat at home more.
Changing preferences: A file photo of a customer at a supermarket in New York, US. Familiar packaged foods are regaining their stature as Americans spend less and eat at home more. Daniel Acker / Bloomberg
While marketeers in fields such as automobiles, financial services and luxury goods are slashing ad budgets—among them, Chrysler Group Llc and Citigroup Inc.—advertising is being maintained, and in some cases increased, for prosaic mealtime products like Heinz ketchup (up 967.1% in the first half of this year, according to TNS Media Intelligence), Hellmann’s mayonnaise (up 165.6%) and Jif peanut butter (up 39.8%).
“There’s a strong opportunity for these well-known brands, and they’re capitalizing on it,” said George Belch, chairman of the marketing department at San Diego State University. “You’re seeing less of Ford and GM and more of Oscar Mayer and Kellogg.”
The campaigns are another sign that marketeers—in this case food firms—are still scrambling to keep up with the profound changes in consumer behaviour caused by the recession. “Manufacturers see the new DNA of shoppers,” said Thom Blischok, president for consulting and innovation at Information Resources Inc., a market research firm in Chicago. “In hundreds of surveys over the past two years, people have told us about subtle but dramatic changes like ‘I’m buying less toothpaste because I’m putting less on my brush,’” Blischok said.
At the same time, consumers reported buying more products such as basic food ingredients. In other words, goodbye to costly gourmet meals and hello to traditional dishes such as that green bean casserole made with Campbell’s cream of mushroom soup. In many cases, suddenly budget-conscious consumers are switching from more expensive foods and “are discovering the difference they’ve been paying for is not worth it”, said Phil Lempert, editor of The Lempert Report, a daily food industry newsletter. The sharp cheddar cheese sold by Kraft “is a dollar or two less than the exotic brand”, he added, and “they are not that different”.
The growing power of middlebrow meal items was apparent in a decision of Conde Nast to close the more upscale of its two food magazines,Gourmet, and keep publishing the more mainstream Bon Appetit. “Gourmet was a tough sell to packaged goods advertisers,” said George Janson, managing partner at the GroupM Print unit of GroupM, a division of WPP Group devoted to helping marketeers make media decisions. “People are now looking for recipes and ingredients that are more accessible,” he added.
Venerable foodstuffs are not only looming larger in the media in which they typically appear, they are turning up in unexpected places. The episode of Saturday Night Live broadcast by NBC last week featured commercials for a Kellogg’s cereal and Tabasco hot sauce. It is no wonder, then, that homey brands such as Birds Eye, Bumble Bee, Betty Crocker, Del Monte, Hunt’s, Mott’s, Spam and Velveeta are seeking to reclaim a place in the front ranks of marketing.
Typically, Birds Eye runs one campaign each year, said Matt Park, chief marketing officer at Birds Eye Foods in Rochester, New York, but currently three are running, including ads that begin this week for the brand’s Steamfresh product line. “We want to put as much money and resources as possible into marketing and product innovations,” he added, “because all the research we’ve seen indicates that consumers will be spending more time at home and less time eating out at restaurants.”
Not only are these brands regaining presence in media outlets, but new products are being introduced under mainstay names such as French’s, Hormel, Quaker, Ritz and Wheaties. For instance, Hormel Foods Corp. has introduced what Scott Aakre, the firm’s vice-president for marketing of grocery products in Austin, Minnesota, described as “a more premium chili” under the Hormel Chili Master name. Although priced higher than the Hormel Chili brand, which made its debut in 1937, the newcomer offers value because “it’s an opportunity to have a great meal at home”, Aakre said. There are also new ads for Spam—another Hormel brand that made its debut during the Great Depression—suggesting Spam as an ingredient in easy-to-make dishes like macaroni and cheese or grilled cheese sandwiches. In January 2010, said Elliott Penner, president at the French’s food division of Reckitt Benckiser in Parsippany, New Jersey, “We plan launches in mustard and hot sauce, innovative new products that extend the categories”.
The expansions of the French’s mustard and Frank’s RedHot brands received approval after recent campaigns for both, centred on offering larger bottles at regular prices, produced “some pretty great growth”, Penner said, in revenue and market share. “We work hard to create a point of difference between our products and competitors’,” he added, “and between our products and private label,” which typically cost less than name brands, “and make sure that point of difference is relevant.”
Other marketeers of kitchen favourites agree that as nice as it is to capitalize on nostalgic feelings, they must also meet contemporary needs.
As for the future, experts say they believe the back-to-basics shift in consumer sentiment could become permanent even after the economy improves.
“This new consumer will shop the rest of her life differently,” said Blischok of Information Resources. “Behaviour has been modified as a result of this recession.”
©2009/THE NEW YORK TIMES
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First Published: Wed, Oct 07 2009. 11 35 PM IST
More Topics: Marketing | US | Recession | Brands | Campbell |