Though it has not yet signed the deal, Heinz is in talks with Turner Broadcasting to substantially increase its media commitment to its family of networks in exchange for licensing and promotional rights to the Cartoon Network's Scooby Doo property. Heinz will work with AOL Time Warner's Warner Bros. Consumer Products to develop a line of Scooby Doo pet snacks, and with sibling units to conduct a large-scale promotion for brands including Heinz Ketchup, Ore-Ida potatoes and pet foods around the theater release next June and subsequent home-video release of the Scooby Doo film. Executives at Heinz and Turner confirmed a deal is being discussed, but declined to elaborate.
The move follows a rash of similar deals waged by Heinz, including an agreement with Walt Disney Co.'s ABC Sports to get advertising, marketing and signage rights around United States Figure Skating Association events for its Smart Ones frozen meals. New ads for Smart Ones feature skater Kristi Yamaguchi. Heinz has used NBA star Larry Bird for its Boston Market frozen meals and also tied to the ESPN X Games and signed skateboarder Tony Hawk for its tween-targeted Hot Bites frozen snacks (AA, April 16).
The tactic was championed by Jay Abraham, VP-marketing, Heinz Frozen Foods, who oversaw promotions and advertising for the company until his departure two weeks ago to take the reins at NASCAR Images, a production-company venture of Fox, NBC and Nascar. Mr. Abraham in April gained oversight of media responsibilities when Heinz Media Director Chuck Lanphear was laid off in a corporate restructuring (AA, July 30). With Mr. Abraham's departure, Heinz's marketing will be left to the individual businesses aside from some cross-coordination handled by a promotions group headed by Marion Findlay, senior manager of consumer marketing. The marketing heads of each business gather at least monthly as part of a new Marketing Leadership Council headed by Barry Shepard, VP-marketing, Starkist Seafood.
But even with the council, formed mostly to instruct junior marketing staff, businesses are given autonomy to "focus on their No. 1 objectives for advertising," said a Heinz spokesman. And that means choosing their own agency. Casey Keller, managing director of Ketchup, Sauces and Condiments, consolidated global ketchup advertising with Bcom3 Group's Leo Burnett Co. while using Interpublic Group of Cos.' Suissa Miller for the majority of other condiments and sauces, including Heinz 57 Sauce. He also retained incumbent Interpublic's Campbell Mithun, Minneapolis, for the newly acquired Classico tomato-sauce brand. Mr. Shepard uses Northlich, Cincinnati, for Starkist, and Heinz Frozen Food brands are consolidated under Omnicom Group's DDB Worldwide, San Francisco.
Such decentralized decision-making "seems the opposite of what CEO Bill Johnson has promised in terms of leveraging the scale of the company and trying to have a more team-marketing approach, and the opposite of what everyone in the industry is doing," said Credit Suisse First Boston analyst Dave Nelson.
Prudential Securities analyst John McMillan cited the difficulties Mr. Johnson has likely had changing the long-decentralized culture of Heinz, and suggested that keeping it may allow more entrepreneurial marketing. Even though Heinz recently revised its expected earnings for the second quarter to reflect lower foodservice sales and higher costs overseas, its overall sales are expected to rise by 10%, driven by new-product innovations including Starkist Tuna in a Pouch, EZ Squirt ketchup for kids and Hot Bites kid snacks.
That momentum is expected to continue in 2002, especially with the launch under Heinz of newly acquired brands such as Classico sauces, Poppers and T.G.I. Friday's frozen snacks. Support is also on track to increase, with overall marketing spending expected to be up 5% for fiscal 2002, according to Ted Smythe, Heinz's spokesman. For January through August, Heinz spending in measured media was $60 million, up 9% vs. the same period in 2000, according to an analysis by Banc of America Securities.
"We're doing much more than has been done historically [at Heinz], putting new-product efforts behind our businesses and supporting them more aggressively," said Lori Abert Luke, VP-meal solutions, Heinz Frozen Foods.