H.J. Heinz Co. is pouring the innovation on thick for brands grown stale, and letting loose on advertising.
This fall, the food marketer will introduce EZ Squirt, a line of colored, vitamin-C fortified ketchup in packaging designed especially for kids. Later this month, Heinz extends its licensing agreement with Boston Market beyond frozen meals to a line of home-style gravies.
Those efforts, both backed by extensive advertising campaigns, follow other innovations Heinz has in the offing. The company already introduced a new Trap Cap to prevent wateriness in its ketchup, and announced plans to launch StarKist Tuna in a Pouch this fall.
"Heinz is trying its hardest to resurrect itself in categories long considered stodgy or outmoded, and to help consumers and retailers see them in a whole new way," said Jaine Mehring, an analyst with Salomon Smith Barney.
Efforts to contemporize Heinz ketchup began late last year with an irreverent ad campaign from Leo Burnett USA, Chicago, playing to teens and young adults.
The campaign drove growth rates for the $497 million ketchup category as high as 10% compared to the more typical 2%, and helped build Heinz's share to its current level of 54%, said Casey Keller, managing director of Heinz USA's ketchup, condiments and sauces division. It also marked the beginning of a renewed thrust toward advertising and promotions that the company had all but abandoned.
GETTING BRAND BACK IN ORDER
"Heinz may have wanted to spend money against advertising in the past, but the portfolio has required them to focus on unwinding problems in the business that have been built up over decades," Ms. Mehring said.
Lehman Bros. analyst Andrew Lazar agreed, citing Heinz's spending last year to lower the price on ketchup from a 60% premium to a 30% premium as a good example of getting its brands back in order.
"Fiscal 2000 was in my view really more about spending a lot of what Heinz calls marketing dollars against setting the pricing bar correctly, but in fiscal 2001, the company has pledged to spend a lot more marketing dollars on advertising," he said.
The flow of new ads has already begun with the kickoff last month of a campaign from Burnett supporting the new Trap Cap innovation for ketchup with the tagline "Keeps buns dry and happy."
The food marketer also pledged to spend $20 million for StarKist Tuna in a Pouch, which includes an extensive fall ad campaign from Northlich, Cincinnati. Heinz spent only $2.7 million on StarKist in 1999, per Competitive Media Reporting.
Heinz EZ Squirt, developed from the insight that kids under 12 are the biggest ketchup consumers, will get $3 million in media support in the initial January-through-April introductory period alone, and will be supported heavily on a year-round basis, Mr. Keller said.
The campaign, also from Burnett, will tout the green-colored ketchup variety plus the product's easy-to-grip, squeezable bottles with a cap that allows kids to control the ketchup stream for drawing.
"We think about kids as our point of entry to the brand and we want to talk directly to them early on so that they form a lifelong relationship with Heinz," Mr. Keller said.
In October, Heinz will launch a three-month national TV campaign from Burnett for its premium line of Boston Market gravy in Classic Beef, Roasted Chicken and Roasted Turkey varieties.
Heinz is the leader in the roughly $250 million liquid jarred gravy segment with a 40% share, yet it spent less than $1 million to support its gravy brands last year, per CMR. With the Boston Market entry, Heinz plans to spend far more to reach women ages 25 to 54, said Mr. Keller.
Boston Market gravies will retail between $2.39 and $2.49 for a 15-ounce jar vs. $1.79 to $1.89 for typical Heinz gravy.
Copyright July 2000, Crain Communications Inc.