HEINZ FIGHTS SLIPPING BABY FOOD SALES CATERING TO TODDLERS

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H.J. Heinz Co. is rejuvenating its baby food brand image.

The Pittsburgh-based marketer will introduce two new baby food product lines called Simple & Delicious and Homestyle Recipes, and update packaging in the U.S.

Simple & Delicious combines meat with a vegetable or fruit and is designed for babies 6 months and older. Homestyle Recipes is a brand new entry in the category that provides chunky main dish dinners for children between 8 and 12 months.

Product Manager Deb Billow said Simple & Delicious will serve as a value-price counterpoint to a product sold by Gerber Products Corp. Homestyle Recipes, she said, fills the need for a product between junior baby foods and toddler foods.

Simple & Delicious will be 3 cents to 4 cents less than the Gerber Entry. Homestyle Recipes will cost about 45 cents a 6-ounce jar.

New entries have been popping up as the category's growth declines with a falling birth rate and as children move to solid foods sooner.

The new Heinz products that will be available in September will get support from couponing and direct mail efforts, handled in-house. New labels for all Heinz baby foods in the U.S., already hitting store shelves, feature a baby girl smiling. Colors have been softened and illustrations accompany ingredient lists. Heinz hopes the new labeling will suggest quality and value.

"Part of strengthening our franchise and building our business in the U.S. is the whole new imagery," Ms. Billow said. This strategy is being taken in conjunction with building worldwide baby food sales, she said.

Heinz had worldwide baby food sales of $631 million in fiscal 1994. While the company does well overseas and holds 60% of the U.K. baby food market, it has only a 10.8% share in the $746.9 million market in the U.S. It trails Gerber at 70.5% and Ralston Purina's Beech Nut at 14.7%.

In March, Anthony J.F. O'Reilly, chairman, president and CEO, said part of Heinz's plan was to expand the baby food business.

That would help combat lagging sales of Weight Watchers foods and other mature brands and would boost earnings.

Heinz' poor performance in the fiscal year that ended April 27 led to a 32% pay cut, to $1.9 million, for Mr. O'Reilly.

Even though profits were up 52% to $602.9 million, that was based largely on a onetime gain of $127 million from selling off two units. Discounting one-time gains and 1993 restructuring and accounting charges, Heinz' earnings fell 26.5%, to $475.9 million.

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