EARTH'S BEST BABY FOOD TO GET LIFT FROM HEINZ

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H.J. Heinz Co. will make a return to advertising infant food-albeit with only little baby steps-after acquiring Earth's Best.

"Heinz will be supporting marketing programs to a greater degree" than Earth's Best had been, a spokeswoman said.

Earth's Best spent less than $500,000 for print ads last year, says Competitive Media Reporting. But it also uses direct mail.

Heinz itself, though the No. 3 player in the $740 million category, spent so little on advertising its own Heinz baby food in the past two years that it didn't even register in CMR figures.

AGENCY KEEPS ACCOUNT

Heinz is retaining longtime Earth's Best agency Sterling-Rice Group, Boulder, Colo. Leo Burnett USA, Chicago, had handled Heinz baby food until it resigned all its Heinz business last year.

With the acquisition, Heinz's 11.5% share of market combined with Earth's Best's 2.9% will put it close to the 15.8% of No. 2 brand Beech-Nut, marketed by Ralcorp's Beech-Nut Nutrition Corp.

The Earth's Best organic baby food also will give Heinz an in with the retailers of natural foods.

"Heinz stressed that it would get the Earth's Best brand into new channels as well as assist the Heinz brand," said Chris Jakubik, analyst for S.G. Warburg Group.

Sales of Earth's Best soared 19.2% to $21.6 million for the 52 weeks ended Jan. 28, according to Information Resources Inc., exceptional in a market where sales slipped 0.2% in the same period.

Sales for Heinz grew 8.6% to $85.1 million, Beech-Nut increased 6.3% to $116.9 million, while market leader Gerber Products Co. fell 3.5% to $505.7 million.

AMMUNITION AGAINST GERBER

"Earth's Best is a very underleveraged opportunity and didn't have the resources to really commit to larger distribution and bigger marketing incentives to compete," said Donald Stuart, partner at Cannondale Associates.

Heinz's attachment to Earth's Best could help it survive against powerhouse Gerber, which claims 68.3% of the market. The organic baby food is a higher-price, higher-margin product, costing 50% more than others in the category.

Industry observers say Gerber could now look to create its own organic brand; the company has dabbled with one in the past.

"A Gerber-endorsed product positioned against the natural, organic consumer is a good insurance policy that Gerber should explore more aggressively," Mr. Stuart said.

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