In a major shift for the meat industry, leading pork producer Smithfield Foods and America's largest beef packer, IBP, will embark on fully integrated ad campaigns this January to tout their first-ever lines of precooked entrees. ConAgra Beef Co., meanwhile, recently hired Cramer-Krasselt, Chicago, to handle what executives close to the situation said will be a $25 million ad campaign for a branded meat effort still under wraps called the Armour Fresh Meat project.
While the refrigerated meats category led by Hormel Foods is now just a $190 million category, Jim Schloss, VP-marketing for Smithfield subsidiary Smithfield Packing Co., said, "We're convinced this is the future, and it may be a $1 billion category in the next five years."
The branding moves follow a rash of consolidation in the industry, including Tyson Foods' soon-to-be-completed purchase of IBP and Smithfield's acquisition of two smaller beef companies. That signals the increased competition among companies concentrated on beef, pork or chicken to become branded marketers of a wide variety of meats. Smithfield was rumored to be in talks with ConAgra for its beef business, but has denied the speculation despite its stated interest in continuing to make acquisitions.
Smithfield CEO Joe Luter has pledged to spend more than $20 million on advertising next spring, primarily to promote a new line of Smithfield Lean Generation Entrees as well as to buoy existing Smithfield Lean Generation Pork and Smithfield Ham products. While Smithfield has done limited regional marketing, spending roughly $2 million in radio and print on its Lean Generation Pork in 2000, the new effort will blanket the company's primary Northeast markets with first-time TV as well as print, outdoor and guerilla marketing.
The initial campaign for Smithfield, from Lawler Ballard & Van Durand, Birmingham, Ala., breaks in January and will tout the new line of microwaveable fully cooked entrees including pork roast, beef pot roast and pulled pork BBQ as "Home cooking without the cooking."
"We don't see consumers going back and taking the role of starting meal preparation at 10 a.m. like our grandmothers did," said Smithfield's Mr. Schloss.
IBP, the leading beef processor with $17 billion in annual sales, will promote its new line of precooked pork and beef roasts under the Thomas E. Wilson banner. The line, which includes Italian-seasoned pork roast, grew to the No. 1 brand in all refrigerated entrees in test markets and will roll national with $12 million in TV advertising beginning in January. The spot, from Interpublic Group of Cos.' FCB Worldwide, Chicago, features what IBP calls "Today's Cleavers and Frenzied Families" and depicts how Thomas E. Wilson can help them "Make more out of dinner."
"A lot of consumers don't have the time and expertise to take a raw roast and cook it for six to eight hours, so what we have to do in this industry is understand that and do something about it," said Dennis Crawford, VP-value-added products for IBP.
IBP's new parent, Tyson Foods, has given the green light to the Thomas E. Wilson initiative and is expected to help develop convenient branded offerings based on its own success. "If this works in beef like it did in chicken and is beginning to in pork, $12 million could go to $120 million [in marketing] pretty quickly and it will [be needed to] let consumers know who Thomas E. Wilson is," said Prudential Securities analyst John McMillan.
Hormel, which launched a $30 million campaign earlier this year (AA, April 9), has been at the forefront of this trend, trying to "eliminate nonbranded products altogether," said Joe Swedberg, VP-marketing for Hormel's refrigerated foods group.