But even as companies put more money into marketing,
they are increasingly looking to digital as a way to spread their
message more efficiently. Kraft CEO Tony Vernon said the company's
digital marketing group "generated about $80 million of savings in
2013, because they were able to achieve the same, if not more,
quality impressions at a lower cost." Mondelez, which sells brands
like Oreo and Trident, pledged to pour more than half of its North
American media budget into digital by 2016.
CEO Gary Rodkin bluntly stated that "traditional marketing is not
as effective as it once was. And what we do in-store, close to the
shopper, at the moment of decision-making, is key to driving growth
for both the retailer and us."
brands embrace digital, the growing use by consumers of online
media could be hurting big brands. "Social networking may be
contributing to increased concerns about packaged food, and also
enabling the rise of smaller brands as the increased availability
of product information and online product reviews diminishes the
critical role of brands in assuring consumers of key product
attributes and quality," Sanford C. Bernstein analyst Alexia Howard
stated in a report on the conference this week.
companies are fighting back by re-evaluating their ingredients and
innovation pipelines. Campbell Soup Co. said it would make a
"further expansion" into a $12 billion category it calls "packaged
fresh." That includes putting more marketing and innovation money
into its Bolthouse Farms division, which makes fresh juices,
carrots and salad dressings. Campbell CEO Denise Morrison teased
new Bolthouse "roots" juices made from beets, purple carrots, and
sweet potatoes. "We also plan to launch new juicing carrots to tap
into the trend of in-home juicing," she said.
removing artificial preservatives from Kraft Singles, while its
Philadelphia brand is running a campaign touting "farm to
fridge in just six days."
"Freshly made and simple ingredients are becoming
primary purchase drivers, and we must incorporate this into our new
product development and brand renovation plans," Mr. Vernon
just about every company is trying to seize on the protein and
snacking trend. Kraft plans to pour $25 million in marketing behind
a new product called P3 Portable Protein Pack that combines Oscar
Mayer meats, Kraft cheese and Planters nuts in a snack pack
targeting millennial males. A new TV ad by McGarryBowen plugs
meat, cheese and nuts as the "original protein."
The messaging is meant to differentiate the product
from more-complex protein products, including bars, gels and
powders. A digital campaign will serve up content based on a
consumer's search history, like showing a funny video involving
basketball and P3 if people search for basketball terms.
Brands is planning a new brand platform called Hillshire Snacking
that includes packs of meats and dipping sauces, like grilled
chicken and sweet chili sauce. The company is also launching a new
line of Ball Park hotdogs called "Park's Finest" that will be
marketed as being uncured, with no nitrates or artificial
preservatives, while packed with flavors such as "cracked dijon
as Hillshire unveiled an aggressive new product lineup, the
company, like so many of its packaged-food peers, talked up how it
would operate efficiently. Hillshire has a "culture of having a
relentless approach to cost savings and cost efficiency," said CEO
Sean Connolly. "It's not growth or cost savings. Its cost savings
that fuels growth. That's just the way we run the company."