Even though Unilever is putting minimal support behind its entry, multiple retailers in the Midwest, where the salad-dressing extension to Imperial margarine is being introduced, said Kraft is already on the defensive and has increased spending significantly. Kraft-likely driven by weak sales in a variety of categories due to price undercutting-has hiked its TV media extensively, according to one area retail buying executive, and offered promotional dollars in order to reduce price points for Miracle Whip in preparation for Labor Day.
At least initially, plans for Imperial Whip call only for a newspaper insert with a high-value coupon in October and another later in the year, as well as some cross-promotions with the Imperial margarine brand, according to the buyers.
A Kraft spokeswoman declined to comment on its strategy other than to maintain that Kraft is not planning to increase ad spending on Miracle Whip this year. The company spent $2.3 million in measured media on the brand in 2002 and nothing from January through April, according to TNS Media Intelligence/CMR. Even so, sales for Miracle Whip grew 1.3% to $229 million in food, drug and mass outlets excluding Wal-Mart for the 52 weeks ended July 13, according to Information Resources Inc. Line extensions totaled another $71 million for the period.
According to the retail buyer, a Kraft salesman offered an eight-page presentation on how Imperial Whip was going to hurt retailers' private-label sales in the category. Kraft's plan is to increase promotional spending in those Midwest markets to cut prices down to two jars for $3, when normally even two for $4 is considered low. "Kraft thought Unilever would turn on the money right away, but they don't even have plans to give us display shippers," the executive said.
Unilever did not return calls for comment.
But its choice of the Imperial brand name for the Whip product, rather than Hellmann's, is considered odd, since Imperial is not one of the company's master brands. Moreover, sales of Imperial margarine, popular in certain Midwest and Western markets including Chicago, Detroit, St. Louis and Houston, fell 6.7% to a mere $64 million for the July 13 period, according to IRI.
Another retail executive said Unilever didn't want to introduce the Whip line under the Hellmann's name because it did not want to steal from its brand's mayonnaise business for the launch.
"It's almost like they want to stick a big toe in the water and are afraid to put their whole foot in," the retail executive said. Imperial Whip "is going to die a very quick death, I'm afraid."