How to Turn a Brand Around

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How to Turn a Brand Around

10/31/2016

By Pan Demetrakakes

Turning around a food brand that is long-established, but has become stagnant, requires attention to marketing basics—but attention that adapts to modern marketing imperatives.

That’s the conclusion of a report from Hartman Group, “Legacy Brand Turnaround Artists—How Did They Do It?”, that looks at how four brands benefited from revitalized marketing strategies: Lipton iced tea, Velveeta processed cheese, Nutter Butter cookies and Pace salsas and sauces.

The report defines “legacy brands” as foods and beverages that were sold nationally before 1980 and had, at some point, sales above $100 million in today’s dollars. Of 311 such brands that were examined by Euromonitor, 137, or 44 percent, had sales growth less than the rate of inflation over the last decade; of these, only 28 (20 percent) have succeeded in recently turning themselves around. 

The four legacy brands examined in the Hartman report pulled out of a nosedive by shoring up the “4P’s” of marketing: product, price, promotion and place. But their marketers did so in the context of current conditions that range from “the faster pace of trends, to the redefinition of food quality driven by the premium end of the market, to new communication technologies and to a pickier, more skeptical general consumer base than when they were originally sold.”

Lipton ready-to-drink iced teas, produced and marketed through a joint venture between Unilever and PepsiCo, rolled out a premium line extension called Pure Leaf in 2010. But it initially struggled, reaching only $147 million in sales in its second year.

Unilever and PepsiCo realized that the Lipton name was crippling Pure Leaf’s perception as a premium product; consumers viewed it as merely a line extension. So in 2012, they removed the Lipton name entirely and made Pure Leaf a separate trademark. A new logo eschewed Lipton red for a green-and-blue image that evoked purity and naturalness. The result was double-digit year-over-year sales growth that ended up generating 95 percent Lipton’s RTD tea growth.

Velveeta, one of the oldest brands of Kraft Heinz, saw its sales hit a wall in 2009, even as the recession was boosting sales of packaged food. Kraft responded by giving Velveeta its first heavy national advertising in more than a decade, and by introducing its first line extension in years. Velveeta Cheesy Skillets, launched with the slogan “It’s Liquid Gold” as a competitor to General Mills’ Hamburger Helper, quickly captured 8 percent of the dry dinner mix market and helped boost overall Velveeta sales 6 percent.

“If you are an iconic food brand, like Velveeta, you have enormous flavor equity that can be leveraged simply with contemporary marketing language,” the report concludes.

Another Kraft product, Nutter Butter peanut butter cookies, had seen sales drop from $105 million in 2006 to about $97 million in 2010. Kraft (and later Mondelez, after it was spun off in 2012) borrowed from the playbook of its more successful Oreo cookie and struck agreements with quick-service restaurant chains to have it featured as a flavor in their milkshakes. Nutter Butter shakes were available in consecutive years at Dairy Queen, Steak ‘n Shake, Krystal Burgers, Smashburger and A&W. Sales climbed to about $124 million in 2014, with very little extra marketing expenditure.

Campbell’s Pace was the first branded picante salsa sold at retail in America. But by 2011, Pace, along with other Campbell salsas and sauces, was suffering from unprecedented competition.

Pace’s brand managers determined that the product category had the potential to absorb many more flavors than Pace was furnishing. So they expanded the flavor range, adding Salsa con Queso in 2011 and Fire Mango & Habanero and Fire Chipotle & Jalapeno salsas in 2014. After a nadir of $192 million in sales in 2011, Pace rebounded to $219 in 2015.

Instead of trying to rely on exotic or premium new flavors, Campbell “reached into the mass market restaurant menu universe to pull in more contemporary, popular flavors of salsa they had never before produced,” the report says. “Always be willing to reframe your brand when the consumer is willing to let you do it.”

Retailers have a lot to gain from supporting and cooperating with CPG efforts to revitalize legacy brands, through increased sales that go beyond just the brands in question, says Shelley Balanko, Hartman senior vice president.

“We would encourage clients like Velveeta or Pace to absolutely ensure that support from retailers is a part of these new product introductions,” Balanko says. “Traditional grocery retailers are especially likely to be impacted by changes in consumer preferences (e.g., seeking more contemporary flavors in the case of Pace) and in eating occasions (e.g., seeking more convenient solutions in the case of Velveeta). These changes are likely negatively impacting sales in the center store so ‘modernizing’ the products there (via flavor profiles and easier preparation) may be a good way to ensure that customers continue shopping in that section. It is our belief that retailers are likely more open than ever before to making some dramatic shelf changes in center store and are looking to manufacturers for partnership and solutions.”

Retailers can help CPGs revitalize brands by providing sales data, Balanko says.

“POS sales data with the appropriate product attribute metadata is the most powerful tool to suggest how to revitalize in the context of an operating category,” she says. “It is at the level of attributes that one can find tools to premiumize a brand and make it contemporary.” However, she adds that many of these product attributes are implicit, such as consumption occasions that run across demographic groups, or the widespread consumer desire for minimal processing.

To access the full Hartman report, click here.