Double-digit promises: Sara Lee sets bold targets, stuns Street

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Sara Lee Foods is primed to unleash a host of products and up consumer marketing spending significantly in an aggressive bid to defy Wall Street and drive double-digit growth of its top meat brands.

The retail foods unit of Sara Lee Corp. that houses Jimmy Dean, Hillshire Farm, Ball Park and deli meats under the Sara Lee banner has a new president, a variety of new ad agencies and a new mandate from corporate to invest for growth. "It's time to buckle down and make things happen," said Ellen Turner, who was named president of the foods business in December.

But analysts apprised of the plan during a presentation last week found the growth targets of 10% or more for the various meat brands shockingly high despite the spate of new initiatives. "These brands compete in categories that have grown 1% to 2% per year historically at best," said Credit Suisse First Boston analyst Dave Nelson in a note. Neuberger Berman's Bill Leach was similarly cynical and proclaimed Sara Lee "the ultimate show-me stock."

Ms. Turner's rejoinder: "Hey Wall Street, give me a call. We've got growth here in this business."

Brought on a year and a half ago as president of breakfast, the veteran marketer with a resume that includes Taco Bell, Kinkos and Frito-Lay among others, quickly picked up the rest of the retail Foods business as a result of her success with Jimmy Dean. Spending on Jimmy Dean has shifted from a historic 80% trade/20% consumer split to a 70/30 split this year and will ultimately reach a 50/50 model that will be replicated across all of the foods business, she said.

The three-year plan is to grow marketing spending on the brands, including the roughly $80 million in annual ad outlay for the portfolio, by double-digits. Likewise, Ms. Turner plans to replicate with other brands the shift toward more value-added products at Jimmy Dean-namely the frozen breakfast sandwich line launched for the brand last year that will reach $200 million in retail sales by June, she said.

No more dean

Consumer ads for Jimmy Dean, from new agency TBWA/Chiat/ Day, Playa del Rey, Calif., will break this fall. They will reposition the brand from a sausage product to a portfolio of convenient savory breakfasts, specifically touting lines of Omelettes and Breakfast Wraps that bow in July. Mr. Dean will no longer appear in the ads.

For Ball Park, TBWA will in April launch a campaign targeting "real guys" that leverages the baseball and other outdoor sports theme inherent in the "park" part of the hot dog brand's name, Ms. Turner said. A logo change reflects the All-American script of an old-fashioned baseball jersey for the brand name on top of a pennant. A line of Grillmaster intensely flavored dogs-Cajun and garlic flavors among them-opens up the brand to possibilities outside its traditional hot dog occasion.

upping the ante

Publicis Groupe's Leo Burnett USA, Chicago, previously handled both brands.

For Sara Lee deli, new agency Publicis Mid-America, Dallas, a unit of Publicis Groupe, will up the ante in advertising this fall to focus on added-value deli meats including a new line of restaurant-inspired premium chicken varieties including Buffalo Chicken and Herb-Roasted Chicken.

Last week, Ms. Turner announced the decision to shift the Hillshire Farm brand from Havas' Euro RSCG Tatham to Omnicom Group's Element 79, an agency she dubbed "the right strategic partner to do complete brand-building, not just ads."

She said she expects to have a new direction and new products for the brand by August.

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