NABISCO PLANS 60% AD BOOST BY '98: RESTRUCTURING INCREASES EMPHASIS ON MARKETING

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One year into a $428 million restructuring, Nabisco executives said the food marketer's leaner profile will fund at least a 60% increase in advertising by 1998.

That includes a 28% to 30% ad spending increase this fiscal year, ending Dec. 31, for Nabisco Biscuit Co., with another 25% to 30% hike planned for '98, according to President James Postl.

Sister unit Nabisco Foods is promising at least a 10% jump in ad spending this year, said President Douglas Conant.

While neither executive would specify spending totals, the combined budget for both companies could jump by $75 million based on its $125 million in 1996 spending, as monitored by Competitive Media Reporting.

SUPPORTING NEW PRODUCTS

The increased ad investment will help cover product launches, including Nabisco's expansion beyond traditional snacks into home meal replacements. A test of a product platform is slated for early next year.

Additionally, a number of new products will debut late this summer under the SnackWell's label, with at least $60 million in total brand advertising budgeted.

"It's been a mammoth effort," said Mr. Postl of the restructuring, through which Nabisco plans to eliminate $250 million in costs "earmarked for [consumer] reinvestment in the marketplace, to provide fuel to drive growth."

"There's a greater emphasis on marketing" at the $2.7 billion Nabisco Foods unit, said Mr. Conant. "One of the driving principles behind the restructuring was the need to fund greater marketing investment."

Nabisco's advertising war chest has come from efficiencies in all corners of the organization, including marketing, where a greater discipline in product introductions has been instilled.

'JUST ADDING COSTS'

"We [previously] had thought [that] since we were good at new products, all new products must therefore be a good idea," said Mr. Postl. "But we realized that unless the innovation was a big one, we were just adding costs."

He said an internal audit found that only 30% of Nabisco's new products in the three to four years leading up to the restructuring were highly successful, contributing the lion's share of profit. Another 30%, he said, "were monumentally unsuccessful" and lost money, while the remaining 40% were fair to middling performers.

As a result, the company is looking for more new products like Air Crisps, a $200 million megabrand extending over most of the company's crackers.

Also, advertising will get edgier, the executives said.

Following an unusual TV spot for Air Crisps, set at a funera,l that broke in June (AA, June 16), even more-adventurous commercials are planned via cracker agency

McCann-Erickson Worldwide, New York. Cracker creative will carry the new tagline, "You'll be back."

In its quest for more profitable new items, Nabisco has tightened up its approval process, raising the bar for approval of launches. The screens set up under the changes include consumer tests plus financial and operational viability measures.

PARING LINE EXTENSIONS

As part of the restructuring, the company discontinued dozens of stockkeeping units for line extensions that weren't successful financially.

Among other new initiatives the increased expenditures will fund:

Heavier marketing muscle against established brands, particularly Oreo, which so far this year has seen a 28% increase in volume. In July, a new TV spot from Foote, Cone & Belding, New York, will attempt to make the cookie brand more relevant to teens.

A new McCann commercial for the combined Ritz, Triscuit and Wheat Thins crackers brands, to be themed "Open up a box, make up a snack." In addition, the current flight of advertising for the Wheat Thins brand will be augmented in early July with "Getaway," a spot that shows three thirtysomething women ditching the kids to spend a fun-filled weekend with the girls.

About $3 million in support for Cream of Wheat Apple Cranberry Cobbler and Cinnamon Raisin Streudel hot cereal varieties, via FCB.

A major repositioning of Parkay margarine that will likely play off the equity of the long-running "talking tub" advertising under former owner Kraft Foods. Mr. Conant said the third-quarter drive will be funded by a "fully loaded plan of advertising and promotion" with "exciting creative and memorable advertising," also from FCB.

A major relaunch of Carefree gum with the positioning that it "shines your smile," breaking by late summer.

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