ConAgra redoubles efforts to shore up major brands

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As ConAgra foods tries to make the final leap from agricultural giant to branded-food marketer, it plans to invest more marketing spending in its biggest brands and realign its agency roster to reflect a more methodical approach to brand-building.

The move comes as ConAgra, which spent more than $150 million on media last year on 32 advertised brands, saw dollar-share declines in 12 of its 16 categories, according to an analyst's report.

The marketer of brands ranging from Healthy Choice to Hebrew National hot dogs began its pledge to become a premier package-goods company at least five years ago. Since then, it has restructured in an effort to achieve that end without providing tangible results of the strategy to Wall Street.

But now, just two months after the divestiture of its final agricultural unit, Roger Berdusco, senior VP-marketing for the branded retail products group, said he plans to levy "financial resources" against the company's stable of good brands to make them great. This time, he said, the company will be guided by a common, more fact-based approach he dubs "The ConAgra Foods Way."

The approach includes an ongoing evaluation of the company's advertised brands and their agency partners, which has resulted in the recent consolidation of ConAgra's snacks unit with Publicis Groupe's Fallon Worldwide, Minneapolis, and a rumored review of its Banquet business. The review for its Banquet brand is driven by ConAgra's need to bolster sales on the brand since its once-successful Homestyle Bakes packaged dinners have been overshadowed by category leader, General Mills' Betty Crocker. Formerly head of Tropicana marketing at PepsiCo, Mr. Berdusco was brought on a year ago to, in his words, "raise marketing function excellence" across the five retail foods groups-snacks, refrigerated/dairy, frozen, shelf-stable and international foods.

With the support of consultant Sergio Zyman's Zyman Marketing Group, Mr. Berdusco has rearranged the marketing staff, eliminating a variety of midlevel positions and replacing brand group directors. The changes are intended to centralize efforts with Mr. Berdusco directly overseeing senior VPs-marketing of each of the operating groups.

Still, though, one food-industry analyst cited research showing ConAgra's dollar share down in 12 of the 16 categories in which it competes over the last 13 weeks. "Whatever their efforts are, there's not a lot of evidence they're getting traction in the marketplace," he said. "Brands are valued in part due to consistency, and ConAgra has had a constant flow of new marketing people for the last five years."

A ConAgra spokesman said internal research showed its top 30 brands (which make up nearly two-thirds of packaged-food sales) collectively grew 5% in dollar sales during the second quarter, several posting double-digit sales growth.

`aggressive plans'

Within its snack unit, ConAgra has put major spending recently behind only one brand, Orville Redenbacher popcorn. But Mr. Berdusco said the company has "aggressive plans" to grow its entire snack portfolio, which includes Act II popcorn and David sunflower seeds.

ConAgra spent $142 million from January through October of 2003, according to TNS Media Intelligence/CMR, and though Mr. Berdusco declined to comment on how much he would increase that, he said investment would follow as ConAgra "renovates" brands.

"Our brand assets need to be managed in a more methodical way," Mr. Berdusco said. He declined to provide details of the new methods, however, and one executive close to the situation said the agency shifts are a result of inconsistent direction. "There's a lot of dysfunctional organizational politics that spews onto agency decisions," the executive said.

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