Kraft Heinz is staging quite a comeback

There are certainly better measures of marketing success out there, but for Kraft Heinz, a half-dozen mentions on late-night TV this year said a mouthful about the kind of cultural impact its brands are making. See all of Ad Age's 2021 Marketers of the Year here. The monologues spoke to some of the daring and innovative ways the packaged foods maker reached consumers this year, underscoring a bold effort to showcase a brand portfolio that required very little in the way of introduction but at the same time was in desperate need of a new kick. From its packaged cheeses to meats to condiments, Kraft Heinz’s brands made significant progress behind a boost in marketing investment that is paying off in the form of higher sales, brand affinity and customer engagement. The increased ad spend comes in service of an effort to transform the organization into what Sanjiv Gajiwala, chief growth officer, called a “consumer-obsessed company.” Its marketers this year brought forth several new campaigns establishing brand “universes” in which they’ve executed both big ideas (exploring the notion of “comfort” inherent in its Kraft Mac & Cheese comfort food) and creative stunts playing off those big ideas (like the Heinz ketchup "packet roller" that found its way into sketches on “The Late Show With Stephen Colbert” and “The Tonight Show Starring Jimmy Fallon”). By rediscovering latent equity in its legacy brands, Kraft Heinz hopes that it will also better withstand external pressures on the food industry, including soaring costs and retail prices; competition from challenger brands and private labels; and the unwinding of COVID shopping and eating trends that elevated packaged goods sales and meals consumed at home in 2020 but presented higher hurdles to clear this year. Kraft Heinz has largely met those challenges thus far, with sales through the first three quarters of the year exceeding company guidance and most Wall Street expectations. The company in the meantime has seen its reputation shift from ruthless cost-cutter to innovative brand-builder behind CEO Miguel Patricio, the former InBev CMO who joined Kraft Heinz in 2019. Patricio has acknowledged that the zero-based budgeting model implemented following the 2015 merger of Kraft and Heinz had cut too close to the bone in areas like brand support. “I think their success recently has had a lot to do with their marketing,” said Dave Marcotte, senior VP of global retail and technology for the consulting group Kantar Retail IQ. “When you put energy back into established brands, it can make them very difficult to compete with head-to-head. They have done a very nice job bringing emotion into their brands.” In an interview, Gajiwala said Kraft Heinz was meeting its business ambitions by giving marketers better consumer insights, then setting them free creatively. It has resulted in new campaigns that shift focus from the brands and their attributes to the emotional impact on the consumers who ultimately purchase them. “For me, 2021 was an amazing year for Kraft Heinz when you think about the journey we’ve been on, going from where we were to a consumer-obsessed company that puts creativity, culture and insights into everything we do,” Gajiwala said. “We’ve made significant investments in those areas and we’re increasing our marketing spend. At the same time, we are really thinking about the consumer as the core of our brands, and renovating a significant amount of our portfolio.” Part of the new investment is going toward improving the tools that marketers have to work with Kraft Heinz’s brands, Gajiwala explained. These are mostly in the form of richer consumer data, giving them the means to change the ways it can present its brands and their attributes. “Instead of being functional or generic or channel-related in our approach to reinforce claims or category conventions, we’re asking people, ‘What is the consumer impact?’ What is our ambition in culture and how do we break through there? That’s what’s been reflected in the work this year, and I’m really proud of that,” Gajiwala said. “For us to have six earned impressions about what we’re doing on the late-night circuit is a signifier. It’s not the holy grail, but it is a way to see if what we’re doing is something consumers really care about.” Iconic brands, new connections Kraft Heinz’s brand stable is one of the best-known in the consumer goods industry and includes its eponymous condiment brands; Kraft’s Mac & Cheese, Velveeta and Singles brands; kitchen staples like Ore-Ida’s frozen potato products; Bagel Bites; Jet-Puffed marshmallows; Philadelphia cream cheese; Jell-O; Classico sauces and others. The company’s challenge then isn’t in introducing them—its products are in 97% of U.S. households, Gajiwala noted—but in finding new and authentic ways to connect consumers with them. This means getting to know the customer a little better: Through digital marketing, Kraft Heinz has increased the size of its first-party data by 30%, Gajiwala said. Digital channels are seeing two-thirds of the roughly $100 million increase in Kraft Heinz’s advertising spend vs. 2019 levels. This represents an increase of about 30%. One of the areas the company has improved through digital is in segmenting consumers so it can learn about what products interest them and develop a more holistic view into the world of food. “We can learn, for example, if a customer buys Kraft Mac & Cheese, how they interact with ketchup, or coffee, and tie that to their media consumption habits to help generate insights. Building that muscle within the company has been really rewarding, but it’s a core piece of the digital transformation—getting a deeper understanding of the consumer at a granular level so our messages can be more meaningful to them,” Gajiwala said. In the hands of marketers, these insights will lead “renovations” of 90% of Kraft Heinz’s 18-brand portfolio in the coming years. This work is arriving gradually; in some cases, packaging changes are arriving first, and are followed by a larger campaign establishing a new message about the brand. No apologies Johannes Leonardo currently oversees creative for nine Kraft Heinz brands. This year alone it has rolled out new platforms behind the Oscar Mayer, Kraft Mac & Cheese and Velveeta brands. In all three cases, Johannes executives said their work has involved addressing icons that had previously been “apologetic” in their approach, pivoting from appeals based on product attributes to emotional propositions around what customers love about the brands. “They are taking a bold stance and operating at a high level, which conveys a lot of confidence,” said Elektra O’Malley, group account director for Kraft Heinz at Johannes Leonardo. “They are really starting to trust their guts and be intuitive marketers. That’s been huge.” In addressing a new positioning for Velveeta, the meltable shelf-stable cheese, Johannes looked beyond the product benefits and seized on the notion that consumers who cook with it “are the radical people who show up at a party with a dish that everybody loves and they don’t apologize for it,” said Jeph Burton, group creative director at Johannes Leonardo. “The magical thing about this campaign was that we invited Kraft Heinz to position their product in a lifestyle perspective. And that’s how ‘La Dolce Velveeta’ came up.” Johnannes’ new campaign for Kraft Mac & Cheese, known as “Help Yourself,” explores the notion of “comfort food” as an avenue to self-satisfaction and wellness, as opposed to a traditional message to moms seeking a convenient meal their kids will like. A forthcoming platform for Kraft Singles to be known as “Square It” will explore what the product can become in the kitchens of creative consumers. Tomato Blood Within these campaigns, Kraft is offering marketers room to create excitement through one-off tactics and moments designed to stimulate cultural conversation. The agency is borrowing from other worlds as well. For example, Velveeta’s new look and feel references the fashion world; for Oscar Mayer, Johannes Leonardo sees enormous potential in pop art, playing off icons like its jingle and the Wienermobile. “We’re looking at each of these brands and asking, ‘What is the universe they create?’ We set those parameters at the outset, and can start building inside that so they are populated with more and more innovative and unexpected things,” said Burton. “Once that universe is established, Kraft Heinz lets us play inside them, and I don’t think that’s very common for a lot of CPG brands.” The company’s ketchup brand cleverly demonstrated its singular nature in an ad from Rethink that ran earlier this year asking a variety of consumers to “draw ketchup.” Nearly all of the participants submitted some form of a bottle of Heinz Ketchup; that art was subsequently featured in outdoor ads. In other creative triumphs, Heinz Ketchup bottles were renamed Tomato Blood in a Wieden+Kennedy New York-led Halloween campaign that also urged shoppers to consider the product as an affordably morbid costume accessory. That followed a September introduction of the keychain-sized “packet roller” for consumers who don’t want to waste a drop when using packet condiments. The roller, priced at $5.70, quickly sold out. These efforts have resulted in internal scores for “brand love” doubling this year and purchase intent seeing a similar rise, Gajiwala noted. This came without changing the products themselves. “I don’t want to understate what we’re doing from a communications standpoint, taking the heritage of these brands to contemporize them and modernize them,” Gajiwala said. “This is not about discarding things, or about starting fresh. It’s about taking what is powerful and iconic about these brands—their DNA—and putting it out to the world in a fresh and creative way.” See all of Ad Age's 2021 Marketers of the Year here.

Kraft Heinz is staging quite a comeback

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