Private labels continue to grow category share, often at the expense of national brands. But that's not stopped the CPG companies recognized in SN's 2009 Category Excellence Award issue from working with their retailer partners on mutually beneficial strategies. Many of the manufacturers recognized in the following pages are either including non-competitive store-brands in their promotions, or likewise putting competitive interests aside to work with other CPG companies to enhance retailers' cause marketing initiatives. Still others are doing their part to maximize sales by developing products that hit the mark with consumers at a time when such investments have tapered off.
Beer Winner: Anheuser-Busch InBev
* STRENGTH OF BRAND AND ASSORTMENT: Wide range in portfolio: imports, crafts, specialties, premium and popular brands.
* INNOVATION: Bud Light Lime and Bud Light Golden Wheat create category excitement.
* SKILLED TEAM OF EXECUTIVES: Talented workforce.
SINCE LAST YEAR'S creation of Anheuser-Busch InBev, popular brands like Bud and Bud Light have more global strength.
A-B InBev manages a portfolio of nearly 300 brands, has four of the Top 10 selling beers in the world, and the No. 1 or No. 2 position in more than 20 markets.
The company is dedicating most of its efforts to “focus” brands — Budweiser, Stella Artois, Beck's and others representing 65% of its beer volume.
Retailers give high marks to the beer maker for its marketing capabilities.
A-B InBev “excels in product marketing and retailer support,” said Dan Cepeda, director of grocery, C&K Market, Brookings, Ore.
“The national and regional marketing on existing and new items is strong,” said another retailer.
Trading partners also note the company's skill with shopper insights and category management.
“They have enabled their distributors to support retailers with category insights via superior space management tools,” Cepeda said.
A-B InBev is also leading the way with innovative products like Bud Light Golden Wheat, a premium light, unfiltered wheat beer brewed with wheat malt, coriander and citrus peels.
“It continues to bring us exciting new items that keep the beer aisle fun,” one retailer said.
Kudos are also given to A-B InBev's executive and sales team. “A-B continues to bring forward highly talented people,” a retailer noted.
— Carol Angrisani
Company to Watch
MILLERCOORS: MillerCoors' 2009 Sustainable Development report shows its commitment to sustainability. Titled “From Grain To Glass,” it explains how the company is conserving water and recycling. It has reused or recycled 98% of all brewery waste, including glass, paperboard, plastics, metals and byproducts.
Paper Products Winner: Kimberly-Clark
* TYING INTO CONSUMER TRENDS: Earth friendly product introductions like Huggies Pure & Natural.
* SUSTAINABILITY: Named a 2009 Energy Star Partner of the Year by EPA.
* ETHNIC MARKETING: Kleenex's Latino art contest.
KIMBERLY-CLARK touts itself as a “natural” leader. Many retailers agree.
K-C “has done a good job with its environmentally friendly positioning with Scott Naturals and Huggies Pure & Natural,” said Bob Lutz, vice president procurement, Unified Grocers.
Launched this year, Huggies Pure & Natural super premium diapers include natural, organic materials. They are hypoallergenic, latex- and fragrance-free, and feature an outer cover that includes organic cotton. The liner includes natural aloe and vitamin E, and materials from renewable sources.
K-C's Scott Naturals — a family of bath tissue, towels, napkins and flushable wipes contain a blend of recycled and virgin fiber.
Along with offering sustainable products, retailers say K-C excels at Hispanic marketing.
“In the Southern California market, Kimberly-Clark's Kleenex designs centered on the Latino culture have been very successful,” Lutz said.
In celebration of Hispanic Heritage Month in 2009, the Kleenex brand hosted a national art contest titled, “Con Kleenex, Expresa tu Hispanidad,” (“With Kleenex, Express Your Hispanic Culture”).
Three grand-prize winners had their original designs featured on Kleenex-brand boxes.
K-C is also working to build sustainability into all aspects of its business.
Since 2005, it's increased energy efficiency by 4.5%, and achieved a 7% reduction in greenhouse gas emissions per ton of production.
It was named a 2009 Energy Star Partner of the Year by the U.S. Environmental Protection Agency.
— Carol Angrisani
Company to Watch
MARCAL PAPER MILLS: Marcal's Small Steps paper towels, bath tissue, napkins and facial tissues are made from 100% premium recycled paper, and are hypoallergenic, virtually lint free and whitened without chlorine bleach, according to the company. Marketing materials and packaging stress that 1 million trees can be saved if consumers change just one package of regular paper products with a package of Small Steps.
Frozen Food Winner: ConAgra Foods
* INNOVATION: Gets early consumer feedback on concepts.
* STRENGTH OF BRAND: Healthy Choice reinvention.
* SHOPPER INSIGHTS: Conducts consumer behavior research.
IN THE PAST year, ConAgra reinvented the entire Healthy Choice brand with new products, packaging and marketing.
Its Healthy Choice Café Steamers frozen-entree line did so well that it made Information Resources Inc.'s 2008 New Product Pacesetters list of the Top 10 new food and beverage brands, based on sales.
Retailers applaud the new Healthy Choice effort, saying it fits in well with today's health and wellness trends.
“It's good to see that there are a lot more varieties being offered under the Healthy Choice brand,” noted Shirlene Ingraham, grocery-marketing analyst, Yoke's Fresh Markets, Spokane, Wash.
At a time when other manufacturers have limited or reduced their promotional funds, ConAgra has done the opposite, Ingraham noted.
“ConAgra is fully aware that the consumer is looking for a good deal,” she said. “It continues to drive sales with a lot of discounts.”
ConAgra realizes that consumer behavior changes with the economy, so it should, too.
“This requires us and our customers to constantly monitor the shopper's pulse to develop insights that lead to sales growth opportunities,” said Doug Knudsen, president, ConAgra Foods Sales.
The Healthy Choice initiative was a key component of the transformation of ConAgra's entire frozen-food portfolio. This included renovating its Banquet single-serve meals to ensure key opening price points in the value segment, and the introduction of Marie Callender's Pasta Al Dente, which leverages ConAgra's tray-in-tray steaming technology.
While ConAgra is innovative and willing to try new programs, it makes sure all new efforts are backed by shopper insights.
“Behavioral consumer insights research up front is key to really understanding how our food fits into a person's daily life, and gaining consumer feedback on concepts early gives us a faster read on acceptance — helping us gain speed-to-market,” said Knudsen.
High-impact marketing and selling are also key strategies.
“We've made integrated customer marketing a strategic differentiator for ConAgra Foods — and one that has high returns,” said Knudsen.
— Carol Angrisani
Company to Watch
NESTLÉ: Nestlé's health and wellness nutrition strategy has been a key driver of its success. “They've done a great job demonstrating their strategy of health and nutrition with new introductions,” said Don Stuart of Cannondale Associates. “Nestlé's brands are important to retailers globally.” Nestlé is also adept at combining health and indulgence. It introduced
Baby Food Winner: Nestlé Nutrition
* IN-STORE EXECUTION: Start Healthy, Stay Healthy planogram lifts sales 4% to 5%.
* TYING INTO CONSUMER TRENDS: Start Healthy, Stay Healthy Resource Center offers parents guidance.
* STRENGTH OF BRAND AND ASSORTMENT: New products take nutritional needs into account.
RETAILERS WHO implement Nestlé Nutrition's Start Healthy, Stay Healthy planogram — that organizes items within each brand by the baby/toddler age and stage base that they're appropriate for — don't just realize a bump in sales of Nestlé Nutrition's products.
“When retailers implement our recommended schematics, they lift not just our business, but category sales around 4% to 5%,” Ken Kotkin, Nestlé Nutrition's head of channel category sales development, told SN.
The system has been adopted by “most” of Nestlé Nutrition's retail accounts, said Kotkin, who would not elaborate.
Start Healthy, Stay Healthy aisle flow is supported by educational materials and navigational signage that leverages icons that illustrate developmental milestones that correspond to changing nutritional needs: birth, supported sitter, sitter, crawler, toddler and preschooler.
Earlier this year shopping was further simplified when the icons were added to all of Nestlé Nutrition's Good Start, Gerber and Gerber Graduates products.
“Our shopper nutrition insights confirm that the stage-based, brand-blocked system is easier to shop,” Kotkin said.
But consumer education doesn't end at the store.
Nestlé Nutrition supports inquisitive parents by providing 24-hour telephone and email access to its baby and toddler nutrition experts through its Start Healthy, Stay Healthy Resource Center.
Questions range from when to move baby between feeding stages, to those not related to products Nestlé Nutrition sells.
“We even get questions about diapers, which shows the trust that moms have in our brand,” noted Kotkin. The infant formula provider also keeps lactation specialists on hand to answer questions from breast-feeding moms.
Locations offering specific new products are also commonly sought by those contacting Nestlé Nutrition's experts. Among its new products are Gerber Graduates Smart Sips, a fat-free milk beverage with vitamins, minerals and omega-3s. The product was created in response to research that showed many toddlers don't get enough iron, calcium or vitamins D and E.
Another product created to improve little ones' calcium intake is Gerber's new Yogurt Blends. Each blends whole milk yogurt with Gerber fruit purees.
— Julie Gallagher
Companies to Watch
KIMBERLY-CLARK: Kimberly-Clark is effectively building the loyalty of members of the lucrative Hispanic market at community festivals. Last year it collected parenting tips from Hispanic moms at these events and turned them into a Spanish-language book that retailers distributed to members of the demographic for Mother's Day. K-C's unique retail promotion sponsorship also includes the recent Diaper Derby race held at Dorothy Lane Market. The first three finishers in the 10-foot crawl were awarded prizes. The first-place winner was awarded a $50 savings bond, a Dorothy Lane Market bib and two packages of Huggies; second place, two packages of Huggies diapers and Huggies wipes; third place, one pack of Huggies diapers and wipes.
ABBOTT NUTRITION AND BEECH-NUT NUTRITION: Similac infant formula maker Abbott Nutrition has teamed with baby-food maker Beech-Nut Nutrition to guide shoppers as their baby transitions to solid foods. The companies are providing shared content on their respective websites, strongmoms.com and beechnut.com, that includes infant and toddler parenting tips, tools and $329 in special offers. “This partnership will offer new parents the additional support they need to make the right feeding choices as well as provide valuable parenting information and insight as their infant moves from one stage to another,” said Donald Patton, senior vice president of Abbott Nutrition, in a statement.
Wine Winner: E. & J. Gallo
* SHOPPER INSIGHTS: Comprehensive research unveils how consumers shop for wine.
* IN-STORE MARKETING: E.&J. Gallo offers education to demystify wine.
* CATEGORY MANAGEMENT: Proprietary Apex Category Management System allows for a greater discussion on retailer goals.
E. & J. Gallo puts the consumer at the center of everything it does with its retailer partners.
It continually speaks with consumers to get a sense for how they shop for wine, and to understand their frustrations and how better to meet their shopping needs.
“The E. & J. Gallo Winery is best-in-class in regards to consumer insights for the wine category,” one retailer said. “They also do a great job in assisting us in managing the category.”
Gallo accomplishes this with its Apex Category Management System, which provides a road map for retailers to follow when crafting their category plans with their Gallo account teams.
“This approach uses the chain's unique goals, objectives and philosophies to guide all tactics for the wine category, from building assortment to measuring merchandising effectiveness,” said Herb Smith, Gallo's trade development general manager.
Gallo uses this information to drive category management strategies that leverage these insights — making the wine section easier to shop and increasing sales for the retailer. For instance, insights revealed that today's wine consumer shops across price points, sizes and types based upon unique usage occasions.
“This knowledge is used by retailers to present shoppers with reminders of these occasions and in turn encourage multiple wine purchases on the same trip,” Smith said.
Gallo uses consumer education to make wine easier to shop, discover and buy.
“Retailers who help de-mystify the wine category for the everyday consumer will be in a leader position moving forward,” Smith said. “We want the consumer to feel like they are learning about the different wine styles and identifying their preferred flavor profile when making their decision.”
To do so, it communicates suggested food pairings and recipes on the wine with a neck hanger (where legal), merchandises wine near recommended foods, and conducts joint tastings so the consumer can actually taste the pairing.
It also promotes pairings on retailer websites, and uses simple descriptors to indicate flavor profiles of wine.
“We know through consumer research that most consumers do not know what gooseberry and leather taste like, so why use it to describe the flavors of a wine,” said Smith.
As for technology, Gallo integrates retailer sales data with its Apex process so that better category decisions can be made.
— Carol Angrisani
Company to Watch
CONSTELLATION BRANDS: Constellation has redirected its efforts to build brands that return the greatest profits, according to the company. These include brands like Woodbridge by Robert Mondavi, Nobilo and Clos du Bois. To better serve it supermarket and other trade customers, it refined the structure of its U.S. wine business into a single integrated group this year. It consolidated its distributor network by signing multi-year agreements with Southern Wine & Spirits of America, Republic National Distributing Co., National Wine & Spirits, and Johnson Brothers Liquor Co. Each distributor has the exclusive right to sell Constellation's U.S. portfolio of wines and spirits in its market. The move benefits its retail customers by creating aligned distributor relationships, dedicated distributor teams and improved coordination of marketing and promotional programs, according to the company.
Pet Food Winner: Nestlé Purina Petcare
* MARKETING/PROMOTIONS SUPPORT: Tailors retailer-specific cause marketing efforts.
* TYING INTO CONSUMER TRENDS: Sponsors food safety symposiums for retailers.
* STRENGTH OF BRAND AND ASSORTMENT: Brands like Beneful and Chef Michael's play into anthropomorphism and health and wellness trends.
ANIMAL SHELTERS and humane societies have been inundated with pets whose owners can no longer afford to feed them.
During the past year, Nestlé Purina PetCare helped turn the negative into a positive by engaging retailers in cause-marketing efforts. Initiatives ranged from facilitating partnerships with shelters to help feed the animals, to finding homes for cats and dogs during adoption drives.
One Northeast chain did something as simple as solicit donations for homeless pets by placing pictures of them on a box, said Paul Cooke, vice president of trade and industry development, Nestlé Purina.
“It shows that [the retailer] is involved in the community and addressing issues that are relevant today,” he said. “When you connect with the community you get a special bond that makes a difference.”
The pet food maker analyzes store-specific shopper data to customize programs like these for specific chains.
“Its expertise and analytical support make it much easier to align both of our company's strategies, to speak the same language and reach our mutual company objectives,” said Jimmy Faller, category manager of pet and baby at Food Lion.
Nestlé Purina also partners with retail accounts to help mitigate risks that threaten to compromise food safety at a time when the major recall of 2007 is still fresh in pet owners' minds.
“We sponsor a food safety symposium and invite retailers to talk about the things we can do together to address safety and sanitary issues,” said Cooke. Topics range from precautions taken by members of the transportation network to efforts executed in-store.
Participants in a recent symposium learned that disasters like flooding can draw rodents.
“A significant number of retailers attend and many have done so multiple times,” Cooke said.
Nestlé Purina follows a stringent set of standards to ensure the safety of foods produced in its facilities.
They include brands like Beneful premium dog food, which has reached nearly $1 billion in sales in under a decade, according to Cooke. Items in the line range from Dry Dog Food to Prepared Meals Wet Dog Food, which resemble human meals, and Snackin Slices Snacks for Dogs.
Cooke attributes Beneful's success to its focus on health and wellness and palatability.
“A family that focuses on eating better feeds their pet better,” he said.
Also resembling human food are items in the new Chef Michael's canine creations line. They come in flavors like Filet Mignon Flavor dry dinner and wet meals including Rotisserie Chicken Flavor with real carrot and corn garnish.
— Julie Gallagher
Cereal Winner: General Mills
* MARKETING/PROMOTIONS SUPPORT: Major programs like “Box Tops for Education” are supported with consumer advertising.
* CATEGORY MANAGEMENT: Provides category best practices.
* IN-STORE EXECUTION: Helps retailers revamp their total store design.
GENERAL MILLS has put together go-to-market strategies that align well with retailer needs.
Capabilities include helping retailers revamp their total store designs using an annual Information Resources Inc. audit of 3,000 stores; providing department or aisle visions for frozen, dairy, cereal, meals and baking; and supplying customers with in-depth best practices.
In addition, General Mills has created category management tools that leverage comprehensive data and technology to help customers better envision General Mills' recommendations for product mix, category adjacencies, space allocation and shelf sets.
“General Mills has the category management tools and expertise to help its customers boost sales and profitability,” said spokeswoman Maerenn Jepsen.
The cereal maker has particularly effective marketing programs such as Box Tops for Education supported with consumer advertising, coupons, promotions and display modules, said Bob Lutz, vice president, procurement, Unified Grocers, Los Angeles.
Lutz also commended General Mills for converting all of its cereal to whole grain.
In addition, “General Mills redesigned their cereal boxes to prominently display nutritional information on the front panel,” said Lutz.
“Their strong brands have resonated particularly well as the consumer has shifted to more in-home meal preparation,” he added.
General Mills has more than 100 U.S. brands, such as Betty Crocker, Progresso, Yoplait, Pillsbury, Green Giant, Old El Paso and Cheerios.
“The depth of General Mills' portfolio places the company in a unique position to provide total store, department, aisle and category insights to develop best-in-class solutions for our customers,” Jepsen noted.
General Mills is one of the top players in shopper marketing, added Don Stuart of Cannondale Associates. “They're advanced in their approach,” he said.
— Carol Angrisani
Companies to Watch
KELLOGG CO.: Kellogg is adept at tapping into health and wellness trends. Along with reducing sugar and sodium in a number of cereals, it's focusing more on fiber content. By the end of 2010, nearly 80% of Kellogg's U.S. ready-to-eat cereals will be good to excellent sources of fiber. Kellogg's focus on fiber comes at a time when research shows that children and adults are getting below the recommended intake.
RALSTON FOODS: Ralston Foods is on the growth track with an array of mergers and acquisitions, including the purchase of the Post cereal business from Kraft Foods. The deal put brands like Honey Bunches of Oats, Post Selects, Spoon Size Shredded Wheat, Grape-Nuts and Post Raisin Bran under Ralston Foods' control. Ralston Foods is the leading manufacturer of store-brand cereals, providing more than 50 ready-to-eat and hot cereals at 25% less than national brands.
Soup Winner: Campbell's Soup
* MARKETING/PROMOTIONS SUPPORT: Spearheaded Safeway's Love Your Heart promotion.
* COLLABORATION: Worked with Kroger to develop e-Labels for Education.
* STRENGTH OF BRAND AND ASSORTMENT: Improving nutritional profile of soup.
FOOD COMPANIES have gotten behind cause-marketing in a big way.
Indeed, the news is positive, but when a handful of suppliers approach a retailer with disparate promotions to be launched within the same limited time frame, things can get hairy.
That's the situation that Safeway found itself in as it approached last February's American Heart Month.
“It's very difficult for Safeway to do five different programs in 1,200 stores in one month, but if you have one program with a bunch of manufacturers participating, everybody wins but mostly the consumer,” Mike Salzberg, president of Campbell's Sales Co., told SN.
As founding partners of Safeway's biggest Love Your Heart program to date, Campbell's and Coca-Cola's Diet Coke played pivotal rolls in making that happen.
With support from the American Heart Association and Go Red for Women, “we worked closely with Safeway and were able to bring in a lot of other manufacturers whose products fit the heart healthy focus,” Salzberg said.
Heart healthy products from Coke, Campbell's, ConAgra, Starkist, Barilla, Kellogg and others were cross-merchandised with recipes on five high-traffic endcap displays, while educational materials were distributed at the pharmacy.
Another Campbell's solution — customized for Kroger — received a Promotion Marketing Association's 2009 Reggie Award.
The program involves Campbell's 37-year-old Labels for Education program that allows shoppers to clip UPC symbols from participating products and send them in to earn credits for supplies for their child's school.
“We went to Kroger and said, ‘You have this great shopper card that gives all kinds of data, is there a way to take our program and tie it with your loyalty card?'” said Salzberg.
The finished product is e-Labels for Education. It allows shoppers to register their Kroger loyalty card number at elabelsforeducation.com and automatically earn credits when products are purchased with the loyalty card.
Although he would not elaborate on e-Labels' effect on sales of its products at Kroger, Salzberg said since implementing the program, Campbell's has had one of its best years, saleswise, with the retailer.
Sales figures could climb even higher thanks to the redesign of the website campbellskitchen.com. Set to launch later this month, it will present recipes, coupons and other information that Campbell's research shows shoppers are seeking, in a new way. Searches like “I'm running a race tomorrow” will guide users toward suitable meal solutions.
There are many new better-for-you products to choose from. Campbell's Chunky Soup line, for instance, now includes 23 soups with 100% lean meat and a full serving of vegetables.
— Julie Gallagher
Company to Watch
GENERAL MILLS: Bringing in $75 million in sales in food, drug and mass channels (excluding Wal-Mart) during its first year on the market, General Mills' Progresso Light Soup ranked No. 4 behind G2 Sports Drinks, Dunkin Donuts Coffee and Healthy Choice Cafe Steamers on Information Resources Inc.'s list of 2008 New Product Pacesetters. Progresso Light was the only soup that made it to the list.
Laundry Detergent Winner: Clorox Co.
* INNOVATION: Extension of Green Works line.
* SHOPPER INSIGHTS: Dedicated shopper insight group.
* TYING INTO CONSUMER TRENDS: Addressing concerns over the H1N1 virus.
CLOROX'S innovation has paid off well. Take its Green Works line, which leverages today's green trends.
All Green Works natural cleaners are made using plant-based ingredients derived from coconuts, as well as essential oils. The products are formulated using biodegradable ingredients and are packaged in recyclable materials.
The growth of Green Works exemplifies why Clorox is a leader in product innovation, said Bob Lutz, vice president, procurement, Unified Grocers, Los Angeles.
The Green Works brand has been extended into numerous categories and segments, including spray cleaners, dish detergent, cleaning wipes and laundry detergent.
Clorox has also helped retailers by addressing concerns over the 2009 H1N1 virus and the annual seasonal flu. Its www.SayBooToTheFlu.com website provides flu prevention suggestions and provides up-to-the minute flu news straight from the Centers for Disease Control and Prevention.
“Clorox's strong bleach and wipes brands have the trust of consumers who are concerned about the H1N1 influenza,” said Lutz.
He described Clorox as a manufacturer that's professional in its dealing with the trade.
“Clorox has a strong executive team and works effectively with their broker,” Lutz said.
Clorox deploys a dedicated shopper insight group to align external trends with shopper motivation and behavior in a way that informs category advisory recommendations and shopper marketing solutions, said Christine Vickers Tucker, director of shopper engagement.
Clorox combined the implications of the economic downturn and consumers' attitude toward getting back to basics with an understanding that shoppers are overwhelmed by the selection in the home-cleaning category, according to Vickers Tucker. Clorox identified the opportunity for its retailers to drive profitable conversion and supply-side savings with a combination of assortment simplification and a “Simply The Essentials” shopper marketing overlay.
Clorox has developed a category-level modeling tool, called Clarity, to identify the causal drivers of period-to-period category change.
“This tool provides forward-looking category planning at the customer level,” said Vickers Tucker.
— Carol Angrisani
Company to Watch
S.C. JOHNSON: As natural household cleaners gain industry clout, S.C. Johnson has found a way to tap into health and wellness trends. The company is catering to health-conscious consumers by voluntarily providing ingredient information for its home-cleaning and air care products, including Windex, Shout and Glade. In support of its commitment to transparency, S.C. Johnson recently launched www.whatsinsidescjohnson.com, a new website that offers “a closer look at the ingredients inside our products,” according to S.C. Johnson. The site allows users to search by brand or by use.
Non-Alcoholic Beverage Winner: PepsiCo
* IN-STORE EXECUTION: PepsiCo Bottling North America will allow the company to offer flexibility in fulfilling customer needs.
* TYING INTO CONSUMER TRENDS: Low-calorie beverages with functional benefits are hitting the mark with consumers.
* STRENGTH OF BRAND AND ASSORTMENT: G2 sports drink was the most successful new brand in 2008.
PEPSICO announced last week that it would form a new bottling unit comprising its two largest bottlers — the Pepsi Bottling Group and Pepsi-Americas — upon completion of its mergers with the companies that were purchased in August as part of a $7.8 billion deal. The mergers require regulatory and shareholder approval.
The new entity, to be called PepsiCo Bottling North America, will be led by Eric Foss, current chairman and chief executive officer of the Pepsi Bottling Group.
The move is good news for retailers since it was made to more easily shift between warehouse and direct-store-delivery systems, based on channel, customer and PepsiCo product type, according to PepsiCo.
“Our focus will be to create a bigger, stronger and faster organization that can better serve our customers,” said Eric Foss in a statement.
The planned improvements come as no surprise to the manufacturer's trading partners.
PepsiCo “continues to set the bar high with in-store merchandising and execution, from delivery frequency to in-store signage to promote brands,” noted one retailer.
The deal will allow the drink maker to provide one face to beverage customers in 80% of the country, according to Indra Nooyi, chairman and CEO of PepsiCo.
PBNA will account for about three-quarters of the volume of PepsiCo's North American bottling system, with the remainder comprising independent franchises.
Retailers attribute much of their beverage sales success to PepsiCo products, described by one customer as “unbeatable.”
G2, a 25-calorie version of Gatorade, and Pepsi Max, a zero-calorie, sugar-free, gingseng-infused cola, are two hot new products. With $159.1 million in year-one sales, G2 topped Information Resources Inc.'s list of the top 10 new food and beverage brands. Pepsi Max also gained placement with $60.9 million in sales.
PepsiCo's Gatorade Tiger sports drink and Mountain Dew Dewmocracy carbonated beverages were recognized on IRI's 2008 New Product Pacesetters Rising Stars list of companies projected to be top 10 food and beverage brands.
— Julie Gallagher
Company to Watch
COCA-COLA: Partner companies Coca-Cola Enterprises and the Coca-Cola Co. took the two top spots, respectively, in the food & beverage category of Newsweek's first “Green Rankings” of America's largest 500 companies. Companies were judged by their actual resource use and emissions; policies and strategies; and reputation among peers. “Our ‘Reputation Score' — based on an opinion survey of CSR professionals, academics and other environmental experts — was No. 1 in the Food & Beverage category and No. 3 overall,” said Coca-Cola in a statement. Among its recent projects is the PlantBottle that's made from a process that turns sugar cane and molasses into a component for PET plastic.
Salty Snacks Winner: Frito-Lay
* TYING INTO CONSUMER TRENDS: SmartFood popcorn clusters was developed to meet women's desire for a snack that offers health and taste.
* IN-STORE EXECUTION: Frito-Lay incorporates non-competing private-label products in its promotions.
* STRENGTH OF BRAND AND ASSORTMENT: With $57.7 million in year-one sales in food, drug and mass.
WHEN IT COMES to helping retailers promote their private-label products, Frito-Lay is on board.
Take for instance a summertime grilling event that it customized for a major chain in an effort to reach members of the mom market.
“It focused on cross-merchandising Frito-Lay chips and dips and other PepsiCo products, such as 2-liter soft drinks and Aquafina, with the retailer's own branded meats,” said Subriana Pierce, Frito-Lay's director of shopper marketing for supermarkets.
Another of Frito-Lay's customized programs also took the interests of a corporate-brand marketer into account.
In honor of Cinco de Mayo, Frito-Lay chips and dips and the chain's private-label meat and produce were highlighted on a display, with tearpad recipes incorporating the items.
Circular ads and an instant coupon that offered savings on produce with the purchase of Tostitos, helped drive both national- and private-brand sales.
Indeed, Frito-Lay aims to keep shoppers engaged.
“Ad and display support from Frito-Lay is outstanding in our stores, week in and week out,” said one retailer.
But the snack maker's in-store presence isn't limited to promotional materials. It's direct-store-delivery system — the largest in North America — often allows for at least daily visits.
“This ensures our snacks are in-stock and fresh, while also saving retail employees' time they can spend on other areas of the store or helping their shoppers,” Pierce said.
These days, Frito-Lay's sales reps are stocking more snacks designed to promote wellness.
Feedback from women about their desire for snacks with good taste and nutrition led to the development of SmartFood popcorn clusters.
One of the newest varieties, Peanut Butter Apple flavor, combines peanut-butter glazed popcorn clusters with real dried apple pieces.
Flavor innovations also helped drive sales of Doritos Collision, which combines two dorito flavors like Hot Wings & Blue Cheese in one bag. The line brought in $57.7 million in year one sales, according to Information Resources Inc.
— Julie Gallagher
Companies to Watch
GENERAL MILLS: General Mills' Chex Mix's innovative line extensions like Chex Mix bars are helping maximize retailers' salty snack sales. “Chex Mix has been and continues to be one of our strongest overall salty snack lines,” said a retailer. The snack maker has also managed to keep its prices steady amidst fluctuation. “While other companies have gone up and down in price, General Mills has remained static,” added the retailer.
KRAFT FOODS: Kraft's Wall-to-Wall initiative, which focuses on having one sales lead manage all Kraft brands at a single store, has facilitated more cross-promotions, creative product displays and stronger relationships with each retail location, as well as $200 million in incremental revenue for Kraft.