To prop up the brand, Ragu ad spending is expected to jump to as high as $30 million, from just $16 million in 1995 under former agency J. Walter Thompson USA.
FIGHTING LOW PRICE RIVALS
Midprice Ragu has been struggling as it has been attacked from both sides by low-price entries and new premium sauces-including sibling brand Five Brothers introduced by Unilever's Van den Bergh Foods last fall-which have eroded its market share.
Additionally, the $15 million launch of Five Brothers took marketing attention and dollars away from base brand Ragu.
Ragu sales have increased 2.1% to $421.9 million for the year ended Jan. 28, according to Information Resources Inc. But share is around 32.6%, well below the brand's halcyon days in the '80s when it boasted up to a 60% share. "Ragu has rebounded slightly from a bad, recession-driven '94, where they were hit by the low-end like Hunt-Wesson," said Paul Kelly, president of Silvermine Consulting.
MORE MOVES INTO FOOD
Executives close to Unilever also say the company wants to expand its food business beyond pasta sauce, ice cream and spreads. It's rumored to be eyeing food company acquisitions on the scale of H.J. Heinz Co., Campbell Soup Co., General Mills-also said to be a target of Nestle USA-as well as smaller buys like Quaker Oats Co.'s Celeste frozen pizza.
Some industry executives believe Unilever also may be poised to consolidate or shift agency food assignments. In addition to Ammirati, which also handles Gorton's frozen seafood, the marketer uses core agencies JWT, McCann-Erickson Worldwide and Ogilvy & Mather as well as some other shops on food. And at least one Unilever executive has admitted "there are some people who might prefer to see that number reduced" (AA, Feb. 19).
The Ragu win keeps a hot streak sizzling for Ammirati.
Since the beginning of the year, the agency has won the $27 million Florida Department of Citrus account and the introductory assignment for a General Motors Corp. navigation system. The latter opened what could turn out to be a very big door for the agency in Detroit.
Ammirati also is expected to win next month a hefty chunk of Amtrak's $40 million ad budget, now at DDB Needham Worldwide. Last fall the agency won the $20 million Stayfree account in a Johnson & Johnson agency realignment.
Contributing: Pat Sloan, Mark Gleason.