Historically a quiet company, the former Tony's Pizza Service unit of privately held Schwan's Sales Enterprises has changed its name and created a new business model to herald a more consumer-driven strategy that includes louder-than-ever marketing against anchor brands Red Baron, Freschetta and Tony's.
"We took a look from top to bottom in our organization-including how we're promoting our brands-and in 2002 will make some modifications to our marketing mix that will help position us as a branded company," said Andrew Deal, VP-marketing. "In the past, we haven't spent as much as the competitor [Kraft], and now we have to bring our brands to consumers and tell them how they fit into their lives."
Schwan's holds a 29% share in frozen pizza, with sales for the 52 weeks ended Sept. 9 of $738 million for its three brands, while Philip Morris Cos.' Kraft leads with a 38% share and $959 million in sales for its Tombstone, DiGiorno, Jack's and California Pizza Kitchen brands, according to Information Resources Inc. Sales of Kraft's brands grew at a faster pace (6.1%) than the Schwan's brands (2.5%) for that same period. Now is a good time for Schwan's to thrust ahead with more aggressive marketing, since the category has grown at a faster rate than most food categories, and is expected to do even better amid the current economic climate.
While Kraft spent $31 million to support its pizza brands in 2000, Schwan's (then Tony's) spent only $13 million, according to Taylor Nelson Sofres' CMR. But beginning in January, Schwan's will unveil large-scale campaigns for Red Baron and Freschetta to cement the brands' positioning.
For Red Baron, a premium family offering that goes head-to-head with Kraft's Tombstone, Schwan's will abandon the No. 3 brand's longtime "Bring home the Baron" theme touting the passionate nature of the brand for a more family-oriented message. For Freschetta, the rising crust brand Schwan's developed to go directly against Kraft's DiGiorno, the effort will extend the culinary message to bring home the brand's restaurant quality (AA, Jan. 29). Interpublic Group of Cos.' Campbell Mithun, Minneapolis, handles all of Schwan's pizza brands. (Interestingly, Interpublic's Foote, Cone & Belding Worldwide, Chicago, handles all of Kraft's pizza brands.)
Schwan's strategy calls for new packaging, retail promotions, event marketing and product introductions, including expanded distribution for its Red Baron Deep Dish Mini Pizzas and Tony's Thin Crust Pizza, successful in initial test markets. Schwan's is also looking to build its presence in other areas of the freezer section, including the $1 billion snack category where its Pagoda Egg Rolls hold a 40% share.
But Kraft is hardly standing idly by as No. 2 readies its attack. The leader is just now launching a DiGiorno Cheese Stuffed Crust pizza that aims to bring fans of the similar product at Pizza Hut into the frozen-pizza aisle. The extension, which includes four varieties, will be supported with advertising later this year featuring the brand's "It's not delivery, it's DiGiorno" tagline.
Also aiming to pull restaurant-goers to its pizza franchise, Kraft this month launches a promotion inside California Pizza Kitchen restaurants to promote frozen pizzas of the same name. Kraft will hand out roughly 300,000 mint tins to customers with their bills that bear the images of the brand's outdoor ad effort, a fresh pie found in the restaurant with the caption "Dine out" alongside a package of the frozen version with the caption "Dine in."