Challenges Heinz: Campbell extends Pace beyond salsa

By Published on .

It took nearly a decade, but Campbell Soup Co. is finally expanding its Pace brand into new Mexican territory.

While Campbell promised expansion of the line shortly after it acquired Pace back in 1995, it is only now moving beyond signature salsas with entries into refried beans, bean dip, salsa con queso and taco sauces. And, to better take on condiment king H.J. Heinz Co. (with which it has long battled in the salsa v. ketchup wars), Pace will launch Smooth Picante and Squeeze Salsas. Intended for the condiment aisle, the thinner sauces will feature on-label claims that they have "1/2 the carbs of Heinz Tomato Ketchup."

The news has long been anticipated. "Campbell paid a huge price for Pace and then it disappeared into its portfolio, never to be heard from again," said Neuberger Berman analyst Bill Leach. But, he said, "Pace is a good brand, a good category and it makes sense to broaden it."

Pace brand manager Chris Foley cites third-quarter sales growth of Pace in the double digits and the powerful affinity consumers-in 21 stronghold markets, primarily west of the Mississippi-have for the brand as reason for the new extensions. "We feel we have the ability to expand into Mexican meals, it's now just about choosing the right products and aligning with what consumers are making."

`new york city?!'

Information Resources Inc. data, however, which only track supermarkets, drug stores and some mass merchandisers but not Wal-Mart, show Pace sales for the 52 weeks ended July 11 down 3% to $103 million in the picante sauce category it dominates. For the same time period, IRI showed Pace sales fell nearly 6% to $83 million in the salsa category where it competes against a variety of players including Frito Lay's Tostitos, General Mills' Old El Paso and Kraft Foods' Taco Bell brands.

A Pace campaign that broke this month focuses on supporting the base salsa items, harking back to the "New York City?!" effort of more than a decade ago that plays up the brand's Paris, Texas, roots. The spots, from WPP Group's Y&R, New York, feature an updated tagline: "Pace. Grab the Southwest by the bottle."

Most Popular
In this article: