Say goodbye to the big middle.
That's what Lehman Bros. analyst Andrew Lazar called the space between premium and value pricing in the world of consumer-package- goods marketing. But the delineation is not so clear now, as upper-end buyers seek bargains and value buyers look to get more for their money.
That's why Unilever figures it can command a higher price point for what's traditionally been a low-price product: vegetables and side dishes. It's expected to shell out $20 million in marketing to tout Knorr Sides Plus Veggies.
Barry Sands, senior brand manager on Knorr, said the products are intended to take advantage of the "masstige" trend of consumers demanding "more upscale products at affordable prices."
He said the company's extensive research has indicated consumers are "interested in getting vegetables into their meals and are willing to pay more for them."
One Midwest retail executive wasn't so sure whether consumers would be willing to spend the extra money, but said, "It will be interesting to see if competitors like Rice-A-Roni from Quaker and General Mills' Betty Crocker will follow."
"We've definitely seen examples where the right level of innovation, targeted appropriately, can garner a higher price point," said Lehman's Mr. Lazar, "but sometimes it's harder with mainstream brand names."
Knorr is pricing its six-item line of rice and pasta side dishes with dehydrated vegetables at 50› to 60› above regular Knorr Sides, which retail between $1.99 and $2.29, touting them as offering two full servings of vegetables in a pouch. The positioning is "a simple and delicious way to get more vegetables into your everyday meals," and packaging will contain "Did you know?" factoids on the health benefits of the sides.
Unilever plans to support the April launch beginning in June with ads from Omnicom Group's DDB, New York, in publications including Better Homes and Gardens, as well as with online, in-store and public-relations efforts.
Unilever is climbing up in other areas, too, expanding on the popularity of its Bertolli Marinara with Burgundy Wine Sauce with two premium wine-based pasta sauces under the Bertolli Vineyard label.
It's spending about $40 million on the Bertolli master brand, according to Unilever sales materials, which state that because of its "restaurant-quality" image, the Bertolli brand overall has grown 9% during the past year.