Center Store: 2008 Category Excellence Awards

Price-sensitive shoppers are on high alert, so when it comes to influencing their purchases, retailers can use all the help they can get.

Many are looking to their trading partners not only for assistance with managing the categories that they supply, but also for advice on storewide solutions.

Top suppliers are aiding retailers with everything from new product innovations to plans for cross-category aisle reorganizations.

In the following pages SN explores the strategies of CPG companies that retailers told us are the best at serving their category needs.

GROCERY

BEVERAGE: BEER — Gold Medal: Anheuser-Busch

Though Bud Light Lime hit supermarket shelves just five months ago, as of Sept. 7 the beer had already raked in $60.7 million in sales in food, drug and mass outlets (excluding Wal-Mart), according to Information Resources Inc.

Retailers aren't only praising the new product's popularity, they're also applauding the fact that its success has come with little cannibalization of other brands.

Anheuser-Busch recently told Advertising Age it estimates that half of Bud Light Lime drinkers are either new to beer or buying it in addition to their existing beer purchases.

The brewer is hoping to fill a similarly unique niche with its Budweiser American Ale. A-B claims the beverage defines a new style of ale that is full-bodied without being too heavy or bitter.

The marketer of the world's best-selling beers (Budweiser and Bud Light) is also appealing to beer drinkers' thirst for variety with retailer programs like its “Pick 6.”

As part of the program, consumers can pick six different beers and create their own customized six-pack.

“Pick 6 has been very successful with more than 400,000 containers ordered by retailers,” Joe Patti, vice president of category management for A-B's national retail sales, told SN. “Our category management team was able to work with retailers to provide recommendations on which products to include, and customers are introduced to new brands on a trial basis, without the pressure of purchasing a six-pack” that includes just one type of beer.

A-B makes retailer-specific suggestions like these by marrying its customer segmentation data with retailers' customer loyalty information.

“This allows us to use our combined shopper insights to suggest and implement successful space planning and cross-promotions,” Patti noted.

A-B is currently helping supermarkets maximize sales of food that it's pairing with its beers.

This fall it is offering tailgating cross-promotions with Johnsonville Brats, Hidden Valley Ranch dressings, Kingsford charcoal, KC Masterpiece BBQ sauces, marinades and seasonings, and Hormel Chili and party trays.

“By positioning beer with coordinating products, retailers are able to grow the collective market baskets of their shoppers and draw traffic to their stores,” said Patti.
— Julie Gallagher

BEVERAGE: BEER — Silver Medal: MillerCoors

MillerCoors is helping retailers refresh beer drinkers with packaging innovations.

This fall, the brewer will test an aluminum pint bottle that cools like a can, but features the wider opening and resealable closure of a bottle.

The 16-ounce packaging comes on the heels of Coors Light's launch of the industry's first built-in vent in its vented wide-mouth cans.

“The built-in vent and a new 8% wider opening combine to reduce the vacuum, or ‘glugging,’ effect,” according to MillerCoors.

The beer maker has also made it easier for drinkers to know when its beer will taste most refreshing.

Earlier this year, Coors introduced cold-activated 24-ounce cans that feature mountains on the label, in thermochromatic ink, that turn blue when the beer has been chilled to its optimal temperature. Last year the innovation was only available on Coors Light bottles.

With strategies like these, MillerCoors is pleasing retailers.

“In our marketplace, they seem to be in tune with what the marketplace is all about,” said one retailer. “[MillerCoors] uses store data to support the growth of the category.”

Retailers also mentioned the strength of the brewer's brands. Its portfolio includes: Miller Lite; Coors Light; full-calorie beers like Coors Banquet and Miller Genuine Draft; imports, including Peroni, Pilsner Urquell and Molson Canadian; and craft brews from the Jacob Leinenkugel Co., Blue Moon Brewing Co. and the Blitz-Weinhard Brewing Co.
— Julie Gallagher

BEVERAGE: WINE — Gold Medal: E.&J. Gallo Winery

The wine aisle can be a daunting place.

When it comes time to decide which foods pair best with which varietals, the sheer number of bottles is enough to send many scurrying for safer departments.

E.&J. Gallo is winning praise for helping retailers serve up easily digestible, occasion-based wine strategies elsewhere in the store.

These were developed from the results of Gallo's Consumer Vinsights research, which involved more than 200,000 points of consumer contact.

Gallo found that wine purchases repeatedly fall into one of seven occasions. They include “Gather Round the Table,” or groups gathered at someone's home (17% of occasions, 13% of category volume); “Unwind,” or decompressing after a long day (16% of occasions, 21% of category volume); and “You're Invited,” or celebrating a special occasion (8% of occasions, 4% of category volume).

Gallo has developed merchandising strategies around these occasions, along with point-of-purchase racks, signage and pallet displays — programs that retailers have widely adopted.

For example, consumers are invited to “Unwind” in the HBC aisle, where wine is displayed on racks alongside candles and bath products. Wines that appeal to those engaging in the “You're Invited” occasion are displayed alongside flowers in the floral department.

Retailers say they have benefited from Gallo's trading partner insights. “Gallo always lets us know what their market research is finding,” said Todd Templin, beer and wine director at Dorothy Lane Market. He added that Gallo's strength of brand and assortment has enhanced the brand's clout with consumers.

“They've helped changed the American mind-set that Gallo is synonymous with inexpensive jug wine, so much so that it's to the point where most people don't even know they're drinking Gallo wine,” he said. “Such is the case with its White Haven from New Zealand.”

Gallo said its research-based recommendations have shown a high implementation rate by retailers. “The majority of customers have adopted some form of them, and between 25% and 30% have adopted it completely,” said Herb Smith, general manager of trade development for E.&J. Gallo Winery, Hayward, Calif. “They're really evolving their approach to merchandising wine to make the category easier to approach.”

One retailer promoted the “Gather Round the Table” occasion last Thanksgiving by cross-merchandising all the makings for the holiday meal with Gallo's Turning Leaf wine.

“We saw a 72% lift in [Turning Leaf] sales and a 12% lift in popular wine sales, compared to the previous years,” Smith said.
— Julie Gallagher

BEVERAGE: WINE — Silver Medal: Constellation Wines

Economic pressures are spurring wine drinkers to alter their consumption habits, according to Mintel.

While shoppers still consume their favorite varietals, many are forgoing restaurants and bars and enjoying wine at home.

Retailers are leveraging insights from Constellation Wines' “Project Genome Home and Habits” study to update displays and better accommodate these consumers.

The research is based on purchase and lifestyle information gleaned from 18 months of Nielsen Homescan data corresponding to 10,000 consumers.

Constellation's study breaks wine shoppers down into segments, including: enthusiasts, image seekers, savvy shoppers, traditionalists, satisfied sippers and those who are overwhelmed. The research includes each type of shoppers' share of purchases as well as tips for how to appeal to their specific needs.

For instance, more than one in five shoppers (23%) are overwhelmed, they make 13% of all wine purchases and they're “looking for wine information at retail that's simple and easy to understand.” These shoppers are very open to advice, frustrated when there is no one available to help them — and if the section is too confusing or there isn't any information, they won't buy anything.

Constellation uses its research to improve retailer programs and also shares its findings for the benefit of the industry.

“Customers are seeing a better assortment and shelf flow, improved promotional calendars and materials, superior education materials and new cross-promotion opportunities,” said Jose Fernandez, president and chief executive officer of Constellation Wines North America, in a statement.

Retailers are able to appeal to varied consumer types with Constellation's broad range of wines and wineries. Constellation is the world's largest wine company.
— Julie Gallagher

BEVERAGE: NON-ALCOHOLIC — Gold Medal: Coca-Cola

Over the past year, Coca-Cola has been at the forefront of industry efforts to forge more productive relationships between trading partners. Perhaps most notable was its collaboration with Wegmans Food Markets in a program called “New Ways of Working Together.”

Through this initiative, Wegmans and Coke were able to boost the accuracy of Coke's product data from 30% to 100%. In addition, the two companies worked on a collaborative store-ordering test in an effort to produce what Kraig Adams, Coke's director of collaborative industry development, called “the perfect order.” The test took place from November 2007 through May at eight stores.

The upshot of the test: higher sales and lower days of supply at the stores, according to Adams. Coke was also able to compensate quickly for out-of-stock situations.

“This was a great opportunity for Wegmans and Coca-Cola to get closer to store operations as a team,” Adams said at the U Connect conference in June.

In another example of collaboration, Coca-Cola Enterprises, Coke's bottler and distributor, worked with Foodland Super Market, a 30-store chain in Honolulu, on a price synchronization project that few other manufacturers and retailers have pursued. Ryan Yonamine, Foodland's program director for data synchronization, told SN earlier this year that the initiative resulted in a reduction in invoice discrepancies that helped prevent delays in receiving direct-store-delivery products from Coke.

Coke is also “very aggressive with new ideas and promotions,” according to one retailer.

This year, for example, the company has supported themes such as the 2008 Olympics and NASCAR racing in its promotional support. Displays and special events are created through a “collaborative relationship with store management that is continually cultivated by our account leadership,” said David Preston, Coke's group director, shopper marketing.

To support those events and prevent out-of-stocks, a Coke account manager and a retailer's merchandiser “coordinate deliveries and merchandising schedules to ensure that each outlet has the optimum inventory,” said Preston.

He added that Coke has developed a strategy called the “Look of Success,” which is a customized approach providing “a scientific road map to merchandising specific stores.” It leverages insights about shopper clusters and “specifies the right brands and packages for each store,” said Preston. He said Coke has also created “Total Beverage Teams” to support “our customers' desire for one voice from Coca-Cola.”
— Michael Garry

BEVERAGE: NON-ALCOHOLIC — Silver Medal: PepsiCo

Retailers who nominated PepsiCo for Category Excellence recognition praised its research capabilities.

“PepsiCo truly focuses both their primary research, as well as their tools, on helping me build my business with the shopper first,” said one retailer. “They share a great deal of shopper insights regarding trends, store design and adjacencies,” said another.

One of those research tools, Ad Insights, enables retailers to “analyze the effectiveness of their ad circular,” said David Newman, vice president of insights, capabilities and training for PepsiCo. “It tells them whether they have the right location in the ad, the right product and the right price to reach their shopper base.”

Another retailer recognized PepsiCo's promotions support, observing that the company is “very flexible in terms of designing programs that fit our needs.”

PepsiCo also provides a space optimization tool that analyzes POS data provided by retailers to show them how to optimize not just the beverage category, but the entire store.

“It shows how much space categories should get and what the correct affinities are,” Newman said. “It's just as easy to do the entire store as it is to do our own categories.”

According to a PepsiCo executive, the company's space analysis provides a “broad perspective on Center Store layout, flow and space allocation.”

This perspective was noticed by one retailer, who lauded PepsiCo for providing insights “that exceed their category expertise.”

The drink maker also employs a marketing tool called iCube, which was developed by Cannondale Associates in concert with several CPG firms.

“It uses syndicated data to create shopper segments,” explained Newman. “It then looks at which segments go on which trip missions to which retailers.”

Grocers can then tailor promotions and merchandising to meet the needs of a particular segment.

Assortment, products and pack size are also molded by shopper insights, said another PepsiCo executive.

In all of these areas, said a retailer, PepsiCo takes a highly collaborative approach. “They always want us to have ‘skin in the game,’” he said.
— Michael Garry

BABY FOOD — Gold Medal: Nestlé Nutrition

The trepidation with which new mothers approach the baby aisle is a bit like the uncertainty of baby’s first steps.

Nestlé Nutrition is helping retailers build mothers’ confidence with its new Start Healthy, Stay Healthy system that organizes items within each brand by the age and stage-base that they’re appropriate for.

“We believe that the Start Healthy Stay Healthy integrated feeding system is a revolutionary way to help our shoppers navigate through the buying process at the point of purchase,” Doug Goldsworthy, business development manager of baby and feminine care for Supervalu, told SN.

The system’s stage-based aisle flow is supported by educational materials and navigational signage that leverages icons that illustrate the first stages of development, including birth, supported sitter, sitter, crawler, toddler and preschooler.

The icons will also be featured on Nestlé Nutrition products.

“We’ve trademarked a visual device, called the benefit band, that will run down the side of each of our packages and consistently communicate to Mom an item’s product stage and key benefits,” Dianne Jacobs, senior vice president of U.S. Nestlé Infant Nutrition, told SN. “Each stage is color-coded with an iconic milestone symbol so mom can easily select which products are right for her child.”

The baby food maker began testing the Start Healthy Stay Healthy system with select retail accounts last month, and will roll out the system in additional locations during the remainder of the year.

“We’ll have fully executed shelf sets in some locations by Q1 2009,” said Jacobs.

Nestlé Nutrition also tested the effectiveness of the strategy at its Retail Innovation Center in Grand Rapids, Mich. Retailers visit the center to explore shelf configuration possibilities, observe shopper behavior and leverage findings gleaned there.

“Age- and stage-based merchandising within each brand enhances the shopper understanding of the overall section and simplifies the buying process, keeping shoppers in the category longer and expanding total store profits.”

Retailers are also benefiting from the brand loyalty that Nestlé Nutrition helps to facilitate. Since the bulk of child-rearing takes place at home, Nestlé Nutrition has developed its online Start Healthy Stay Healthy Resource Guide.

Once logged in, visitors can sign up to receive nutrition booklets that are tailored to their baby’s developmental stage. The site also links shoppers to 24-hour telephone and email access to baby and toddler nutrition experts.

“This is a completely integrated program that leverages the best of Nestlé and Gerber and our combined competencies in scientific research, consumer education and product innovation,” said Jacobs.
— Julie Gallagher

CANDY — Gold Medal: Hershey's

During the top candy holidays, replenishing inventory in high-traffic areas proves especially challenging.

Hershey’s is helping retailers please both givers and receivers during Halloween, Easter, Christmas, Valentine’s Day, Mother’s Day and beyond.

“Its seasonal ordering tool is easy to use,” one retailer told SN.

The candy maker’s sales force — which has been newly expanded by 30% — is also helping to streamline replenishment.

"Hershey's has a well-staffed retail merchandising sales force that is in stores to ensure that seasonal sets are filled with product. They also set up additional displays throughout the store and distribute eye-catching point-of-sale materials,” Jody Cook, spokeswoman for Hershey's, told SN. “This maximizes consumer pick-up and sell-through.”

Hershey's also lends both promotional and in-store merchandising support that ties into popular sporting events and entertainment like NASCAR, the Olympics and new movie releases.

In July, retailers drummed up excitement in the candy aisle when they merchandised Batman-branded, bat-shaped Reese's Cups and KitKat bars. The movie-themed versions replaced the regular candy for a limited time.

The chocolate maker supports efforts like these “by advertising behind our key brands, FSI coupons, in-store merchandising vehicles like prebuilt displays, point-of-sale materials and seasonal websites,” said Cook.

Halloween-themed Web pages help to get shoppers excited about Halloween early. They feature fall recipes, kids' crafts and activities, costume ideas, coloring pages, pumpkin-carving stencils and party ideas.

Hershey's also uses its website to court upscale consumers, like ones for whom Hershey's Bliss line of premium chocolates were designed. The line was introduced earlier this year.

The Hershey's Bliss “Win the Party of Your Dreams” contest allows visitors who've logged in to input the UPC code found on bags of the candy and instantly learn whether they've won a price.

Twenty-five grand prizes of $2,500 will be awarded; 25,000 first prizes of coupons valued up to $3.99 will also be given out. The contest will run through Halloween.
— Julie Gallagher

CANDY — Silver Medal: Mars

With innovative lines and packaging, Mars Snackfood U.S. is helping retailers capitalize on Americans' sweet tooth.

“It's very big on new products and lines that are timely and appeal to the targeted customer,” one retailer told SN.

Since the growth of premium chocolate continues to outpace the entire chocolate category, the candy maker has focused much of its efforts on its upscale line of Dove Chocolates, which is the top-selling brand of premium chocolate in the U.S.

In June, Mars introduced what it claims is a first in the category packaging format, for its premium tablet bar collection.

“The tablet bar features three individually wrapped pieces in a reclosable pack, addressing consumers' desire for portion control, portability, shareability and freshness without a mess,” said Ryan Bowling, spokesman for Mars.

Mars also recently added six new flavors to its Dove collection, including Peanut Toffee Crunch, Cranberry Almond, Blueberry Almond, Roasted Hazelnut, Dark Chocolate Roasted Almond and Extra Creamy Milk Chocolate.

Dove Desserts filled chocolates, in Bananas Foster with Milk Chocolate and Tiramisu with Dark Chocolate, are also new additions to its premium portfolio.

Mars' iconic M&Ms brand also recently went upscale. This summer the chocolatier introduced M&Ms Premium, which it targets to women who love to entertain and be social. The candy features an iridescent shell and flavors that incorporate dark, milk and white chocolate, including Triple Chocolate, Chocolate Almond, Mint, Mocha and Raspberry Almond.

Mars works with its trading partners to achieve mutual benefits with these and other lines.

“It believes in a collaborative style of negotiation,” said a retailer.
— Julie Gallagher

CEREAL — Gold Medal: General Mills

Retailer feedback in support of General Mills in the cereal category pointed to the brand loyalty the company enjoys. General Mills has the No. 1 or No. 2 share of cereal sales in all major markets, including Cheerios, which is the No. 1 brand within the cereal aisle, according to the CPG company.

Its success with Cheerios stems from the cereal's position as a healthful food.

“The problem with cereal is all the sugar — how do you present cereal as good for you?” said Marcia Mogelonsky, an analyst with Mintel, a market research firm in Chicago. “But General Mills has done well with Cheerios.”

The supplier has been strengthening its hold on the category with more products that are both healthy and convenient. They include Fiber One, MultiGrain Cheerios and the Total line.

In April, General Mills reformulated its Big G Rice Chex cereal, replacing barley malt syrup with molasses in order to create a gluten-free product that is tolerable for those with celiac disease.

The company has also branched into new categories.

“We were able to expand our Fiber One cereal equity, and the corresponding health benefits of fiber, into a bar,” said Joe Driscoll, marketing manager for Fiber One.

General Mills also extended the Fiber One brand to include a toaster pastries line, which offers 20% of recommended daily fiber needs. Consumers blogging online commented that the toaster pastry is a good source of fiber and whole grains.

“The added fiber and whole grains eliminate some of the guilt,” said one blogger.

Last year, General Mills announced a “Right Size, Right Price” initiative that allowed it to reduce the size of its cereal boxes while maintaining price. The company now charges more per ounce as ingredient prices rise.

General Mills' cereal strategy seems to be appealing to consumers during the tight economy. The cereal maker reported particularly strong growth in its cereal business in its first quarter, which ended Aug. 24. Net sales for Big G cereals grew 10%, including gains by MultiGrain Cheerios, Honey Nut Cheerios, Cheerios and the Fiber One cereal line.

According to Advertising Age, the company's ad spending was up 17% in the first quarter, with a particular focus on MultiGrain Cheerios, Fiber One and Lucky Charms cereals. At the same time, General Mills has increased store-level and corporate support of retail marketing efforts, according to a company executive.

A grocery wholesaler nominating General Mills praised the company's willingness to “share shopper insights that help with store design and adjacencies.” One tool developed by the company, Shopper 360, surveys shoppers online to determine why they are shopping a given store or department.

General Mills also engages in “top-to-top” meetings with its biggest 25 retail/wholesale customers, which have helped grocery wholesalers “gain alignment” on shared objectives with the CPG giant.
— Michael Garry

CEREAL — Silver Medal: Kellogg Co.

In the cereal category, with its proliferation of brands, items and flavors, Kellogg Co., Battle Creek, Mich., is helping retailers by offering a broad assortment while orchestrating line extensions into the breakfast bar and protein water categories.

One retailer commended the company for its “overall assortment across all subcategories in cereal,” including seven versions each of Special K and Rice Krispies, four of Froot Loops and three of Frosted Flakes.

This assortment is the result of a “rigorous process aimed at building a broad portfolio while minimizing redundancy,” said Patty Ahlert, Kellogg's vice president, category management.

This year, that process included reformulating such core brands as Rice Krispies and Froot Loops to meet the company's new Global Nutrient Criteria, aimed at delivering more healthful products to children. The program also spawned products such as Frosted Flakes Gold and Special K Cinnamon Pecan.

Kellogg's offerings are not simply about flavor extensions but have entered into such areas as usage occasions and product benefits. Examples include items like Grab 'N Go packs, such as those for Frosted Flakes and Froot Loops, and Cereal Straws, crunchy tubes for sipping milk, such as the Cocoa Krispies Cereal Straws.

Venturing beyond cereal into the health and wellness aisle, Kellogg's came out in late 2006 with Special K2O Protein Waters, Special K Protein Meal Bars and Special K Protein Snack Bars. More recently, the company launched All-Bran Fiber Drink Mix and All-Bran Fiber bars to meet digestive health needs.

These new items come with a commitment to selection editing, in order “to assist new product placement,” according to retailer feedback. To this end, the company uses applications such as its Distribution Opportunity Tool, which analyzes customer and market data to highlight opportunities at the SKU level.

Customer and market data are also used with the Kategory Assortment Rationalization Tool (KART) “to ensure the most efficient assortment,” said Ahlert. The latest proprietary tool, CATSTAR, “allows us to share best practices and align our resources quickly and efficiently,” she added.

The retailer also praised the “collaborative nature” of Kellogg, which leads it to “reach out and do what is necessary for the good of the category.” This collaboration has taken the form of RFID traffic studies, which show shopper movement in specific areas; the Willard Bishop Grocery SuperStudy, which provides detailed product movement at three supermarket chains; and joint manufacturer-retailer focus groups.
— Michael Garry

FROZEN — Gold Medal: ConAgra Foods

In recent years, the frozen food case has developed a reputation for being a destination for easy-to-prepare, restaurant-inspired meals.

Now, patented steaming innovations are bringing the taste, texture and appearance of these dinners closer to the dining-out options they strive to assimilate.

Items in ConAgra's Healthy Choice Cafe Steamers line of 12 single-serve microwavable dinners leverage patented Steam Cooker technology developed by the manufacturer after years of research.

The line was one of 10 that gained placement on Information Resources Inc.'s 2007-2008 New Product Pacesetters Rising Stars list of the Projected Top 10 Food and Beverage brands.

“The packaging features a tray-in-tray design to separate sauce from the other meal components, actually using the moisture that evaporates from the sauce on the bottom of the two-tiered container to steam the meat, veggies, pasta or rice in the top tier,” said Roland Rubio, vice president of sales for ConAgra Foods. “The result is crisp vegetables, hot sauce, fluffy rice and al dente pasta.”

Meals in the line, which include Roasted Chicken Chardonnay, Beef Merlot and Creamy Dill Salmon, seem to have hit a sweet spot with consumers.

“Healthy Choice Cafe Steamers deliver the convenience of microwave steaming with tasty low-cal restaurant-inspired recipes such as Grilled Whiskey Steak,” said Sheila McCusker, editor of IRI's “Times and Trends” report.

Although the odds are stacked against new product introductions, with less than 2% of new brands earning $50 million or greater during their first year of sales, Healthy Choice Cafe Steamers hit the $100 million mark 12 months after the line's September 2007 release, said Rubio.

The meals heat in less than five minutes, reducing the time it takes to steam food via the conventional method by 25%, according to Rubio.

“In traditional steam cooking, consumers use a rice cooker/steamer or a double boiler on the stove, but it takes a lot of time,” he said.

ConAgra is also helping retailers draw consumers to the frozen food aisles during difficult economic times, with its value-priced Banquet Select Recipe frozen meals. Varieties including Herb Grilled Chicken Breast and Slow Cooked Beef sell for $1.50.
— Julie Gallagher

FROZEN — Silver Medal: Nestlé

With its Stouffer's Dinner Club loyalty program, Nestlé is helping retailers drive frozen food sales.

The interactive online club allows shoppers to collect points every time they purchase a Stouffer's Classic Entree, Corner Bistro Panini, Large Classics dinner, Corner Bistro Meal or Corner Bistro Flatbread meal. Consumers use their points to bid on themed prizes like Bose home stereo systems, a personalized DVD collection or a year's subscription to Netflix, during monthly auctions. Nestlé promotes the club at www.stouffers.com and through in-store freezer clings, Catalina messaging and a monthly email campaign.

“Each Dinner Club reward is connected to the idea of helping consumers enjoy a better dinnertime experience with Stouffer's,” said Roz O'Hearn, spokeswoman for Nestlé. “Rewards change each month, so that gives consumers a reason to keep returning to the website.”

Once they're there, Nestlé collects consumer trends through monthly surveys, quick polls and other interactions. Retailers benefit from its insights.“Nestlé has the best understanding of the consumer,” one retailer told SN.

Last year, the supplier began allowing shoppers to cash in points to help Feeding America (formerly America's Second Harvest), feed the nation's hungry, O'Hearns said.

More than 700,000 people were fed through that component of the club in 2007.

“Websites and chatrooms have people talking about how great it is that Dinner Club allows people to help others through simply buying more of what they already love,” said O'Hearn.

Nestlé is also generous with its trading partners, retailers told SN.

“It works well with all parties to reach mutually beneficial sales and profit objectives which are a stretch, but achievable,” one retailer said.
— Julie Gallagher

PET — Gold Medal: Nestlé Purina PetCare

Nestlé Purina is helping supermarkets capture a greater share of the $5,000 that pet owners spend over the lifetime of their pet.

“What we've done for a number of years is collect successes and best practices and then share those with retailers in non-competitive markets,” Paul Cooke, vice president of trade and industry development for Nestlé Purina PetCare, told SN.

He advises retailers to concentrate on in-aisle signage to inform consumers about their pets' nutritional needs and to use shelf talkers to assist shoppers when making pet-related decisions. “A cat food specially formulated for older cats may help slow down the development of old-age disease” is one message suggestion.

Other tips include appealing to consumers' one-stop-shopping mind-set by cross-promoting age-specific pet food with age-appropriate supplies like toys for puppies and kittens and orthopedic beds for senior pets.

“A retailer can become the place to go for new puppy owners, or the next best place besides the vet for senior products and information,” said Cooke.

Products and educational efforts that speak to quality of life and health and wellness issues go a long way when it comes to driving sales.

"With the exception of the baby category, virtually no other category carries more emotional attachment than pet care,” noted Cooke. “Retailers who realize this and bring it to life in the pet care aisle will win with pet care consumers.”

Purina appeals to health-conscious pet owners with products that help to maintain lean muscle mass, promote healthy skin and a shiny coat, and even help to control hairballs. Wholesome ingredients like the white meat chicken, oatmeal, brown rice and sweet potatoes in its Purina One Natural Blends products also speak to consumers who are looking to improve their pet's quality of life.

Through its quarterly mega-events, Purina helps retailers educate consumers about different pet-related issues. The most recent one focused on permanent pet adoption.

“We worked with recognized pet trainer Victoria Stilwell from ‘It's Me or the Dog’ and went to a shelter to see what the Top 10 things that potential pet adopters need to keep in mind in order to ensure it's a successful adoption,” said Cooke. “Then we shot a video of it and we're going to put that online.” The pet food maker also raises awareness of the topic in-store by providing educational and promotional materials.

“We have ad slicks, single price points and multiple products focused against this,” said Cooke. “We also have signage and store-ready displays to support off-shelf merchandise vehicles.”

Retailers are forging relationships with the pet food maker that extend beyond their stores' perimeter.

In August, Kroger joined forces with Nestlé Purina to launch a photo-essay contest that encourages shoppers to think about the ways that pets and their owners improve each other's quality of life. The “Four Plus Two: Tales for the Pet Lover's Heart” program also includes a $100,000 donation from Kroger and Nestlé Purina to animal welfare organizations, a national television special featuring seven stories of pets and their owners, and an in-store giveaway that allows shoppers who spend $7 on Purina products to receive a free Earthware reusable bag.

“We know pets are an important part of many of our customers' families,” said Evan Anthony, Kroger vice president of marketing and advertising, in a statement. “Our partnership with Purina makes it easy for our customers to celebrate the special bond they have with their pets.”
— Julie Gallagher

SALTY SNACKS — Gold Medal: Frito-Lay

Retailers are praising Frito-Lay for reinventing the snack aisle.

In addition to eliminating negatives like fat from its salty snack collection, the supplier has infused items previously characterized as junk food with positives like whole grains and even vegetables.

Its SunChip snacks provide one serving of whole grains per ounce, while its Flat Earth vegetable crisps contain a half serving of vegetables in each ounce.

“Frito-Lay is excellent at creating new and innovative items that appeal to today's consumer,” one retailer told SN. “It has the best overall assortment in the snack category, bar none.”

The manufacturer's commitment to health and wellness is long-standing. In 2003 it was the first major food company to remove trans fats from its entire snack chip portfolio. Today it seeks oils that are lower in saturated fat and higher in “good fats,” like corn, sunflower and soybean oils, according to Aurora Gonzalez, spokeswoman for Frito-Lay.

Earlier this year the snack maker strengthened its nutrition portfolio when it introduced the TrueNorth line of 100% all-natural nut snacks that is targeted to Baby Boomers.

The line includes nut clusters, nut crunches and whole nuts in varieties like Pecan Almond Peanut Clusters, Wheat Peanut Crunches and Sea Salted Pistachios.

Retailers trust Frito-Lay's network of 20,000 sales representatives to ensure that inventory of fast-movers like these remained stocked.

“Frito-Lay has excellent and consistent store support,” said the retailer.

The supplier's direct-store-delivery system is rooted in its history.

“Herman Lay, one of our founders, began the Lay's Company by delivering snack foods from his Model A Ford touring car,” said Gonzalez.

“We produce some of America's most popular snack foods. We want to ensure that our consumers have the products they want, when they want them.”
— Julie Gallagher

SOUP — Gold Medal: Campbell's

According to Campbell's research, shoppers want to put a complete meal solution in their basket in one place, rather than gather ingredients from different areas of the store. But when it comes time to implement the idea at retail, simple meal ideas don't necessarily equate to a seamless execution.

Now retailers are drawing on best practices gleaned from Campbell's workshops in order to implement stand-alone, full-aisle and complete-department simple-meal merchandising strategies. The workshops are unique in that they require senior-level buy-in from retailers.

“Campbell's helped bring together all the people in our organization required for something of this magnitude,” one retailer participant told SN. “They brought unique and objective insights about the solution, as well as a lot of energy that helped keep momentum going over a period of several months. I'm not sure what would have happened if we tried to do this ourselves.”

So far, a handful of retailers have completed comprehensive versions of the workshops, which touch on topics ranging from meal planning trends to department-by-department profitability. Many more chains are benefiting from sessions that focus on smaller executions (like endcap displays), and from a white paper that summarizes the seven principles of simple-meal merchandising.

This is not the first time that retailers have trusted Campbell's ideas for aisle innovation. Six years ago the soup maker revitalized the condensed soup category with its iQ Maximizer gravity-feed shelving system. It recently switched the racks, which are present in more than 30,000 retail locations, to black for a more upscale appearance.

“We also added framing around all door graphics, making it easier for consumers to locate their favorite soup varieties,” Mike Salzberg, president of Campbell Sales Co., told SN. “The new racks have more of a slant for better rolling action.”

Retailers have praised the system not only because it facilitates easier shopping, but it's also easier to stock.

The feature is especially helpful when replenishing fast-moving products like items in Campbell's Reduced Sodium Soup line. The soups topped Information Resources Inc.'s New Product Pacesetters Rising Stars 2006-2007 list with year one sales of $101 million across food, drug and mass channels (excluding Wal-Mart).

It's no wonder the line is popular. Low sodium is the health benefit that interests soup consumers most, according to Mintel. Among the firm's survey participants who consider health benefits when selecting a soup to buy, 70% said they look for such soups.

The soup maker's ability to tie into consumer trends is driving sales at retail.

“Historically, Campbell's condensed Chicken Noodle and Tomato soups have been the top sellers. However, [Campbell's] Healthy Request, less-sodium and weight-management ‘light’ varieties are now driving the growth,” Maria Brous, spokeswoman for Publix Super Markets, Lakeland, Fla., told SN earlier this year.
— Julie Gallagher

SOUP — Silver Medal: General Mills

General Mills' Progresso Light Soup line has achieved what few products do: placement on Information Resources Inc.'s New Product Pacesetters Rising Stars list (2007-2008), which is reserved for the projected Top 10 food and beverage brands.

“Progresso Light offers not only weight-management benefits at only 60 calories per serving, but also high fiber and a full serving of vegetables,” said Sheila McCusker, editor of IRI's Times and Trends report.

The line is also unique in that the soups within it have earned a zero point value on the Weight Watchers diet plan.

“Although protein soups constitute 75% of the category, Progresso Light is on track to deliver $100 million in first-year sales with just its vegetable soups,” Kendall Powell, chairman and chief executive officer of General Mills, told SN earlier this year.

General Mills is not just using products like these to drive traffic in the soup aisle. Through its Aisle Insights Meals Aisle Growth Guide, the soup maker is educating retailers about the best ways to merchandise soup and other meal solution categories.

The guide recommends that soup, Italian food, canned vegetables, dry packaged dinners and other meal components be organized into two aisles. The role of Aisle A, or the “Foundational Meals Aisle,” is to deliver on the need to affordably feed a family. This aisle features an in-aisle meal solutions center, as well as items like rice, stuffing and dry packaged dinners. Aisle B, or the “Evolving Meals Aisle,” is to deliver on the needs for taste, health and convenience. The aisle organizes products such as Mexican, Italian and Asian foods into natural/organic and microwavable sections.

The guide's findings also reveal that soup has a negative sales rate reaction when stocked next to any other Meals Aisle category other than canned seafood/meat.
— Julie Gallagher

CENTER STORE NONFOOD

HOUSEHOLD CLEANERS — Gold Medal: Clorox

Earlier this year, natural, plant-based ingredients and Clorox's long-trusted cleaning power hit grocers' shelves in the form of the Green Works line of all-purpose, glass and surface, toilet bowl, dilutable, bathroom and dishwasher cleaners.

Items in the line are different from other ecologically sound products in that they were designed to appeal to mainstream shoppers, even those who lack a penchant for buying green.

Major retailers say Green Works has hit the mark.

Guy Olsen, category manager of household, paper and baby departments for Stop & Shop/Giant, Quincy, Mass., told SN last month that the Green Works items are “the things that are hottest now.”

In launching the line, Clorox had to address a number of obstacles, including consumers' concerns about price point, availability, brand name and performance.

“We believed that Clorox, being in the cleaning business for 100 years, was positioned to address those barriers,” said Aileen Zerrudo, Clorox's spokeswoman for Green Works. Clorox limited Green Works' price premium to 20% to 25% and achieved widespread, cross-channel distribution for the items, whose cleaning prowess “achieved parity or better vs. traditional cleaners,” said Zerrudo.

Within two to three months of the line's January launch, “the size of the natural cleaning segment, as tracked by IRI, had grown by nearly 300% vs. the same period the year before,” said Kevin Maher, marketing manager for Clorox. “Of the nearly 300% growth, Green Works accounted for approximately 250%.”

The Grocery Manufacturers Association awarded Clorox an Innovation Award this year for the line, which it credited with doubling the size of the natural cleaning category within two months.

Part of Green Works' success is attributed to the marketing muscle Clorox put behind the products.

One nomination cited the company's in-store execution, pointing out its use of shelf talkers to drive awareness and trial.

Clorox also advised retailers to position each Green Works product adjacent to its “traditional cleaner counterpart” in the cleaning aisle, said Natalie Barber, retail consumer marketing manager, Clorox Cleaning Division. “That way, consumers can compare it with what they typically buy.” At the same time, stores are also being provided with floor shippers that aggregate the items.

Some retailers are placing signs promoting Green Works in the organics section of the store, appealing to consumers who “might be more open to natural products,” Barber noted.

In addition, Clorox offered consumers coupons for the line via direct mail and advertised in custom publications such as Costco's Connection magazine, Barber said.
— Michael Garry

HOUSEHOLD CLEANERS — Silver Medal: SC Johnson

SC Johnson has taken great care to communicate to consumers that its cleaning products are safe and environmentally friendly.

Several of its products — including Fantastik Oxy Power multipurpose cleaner and Scrubbing Bubbles soap scum remover — bear a label denoting the company's partnership with the U.S. Environmental Protection Agency's Design for the Environment program. The program is meant to promote products and technologies that “benefit human health and the environment,” according to SC Johnson's website.

The company also developed its own “Greenlist” logo for its products to indicate that “they are made with a commitment to a more positive health and environmental profile,” its website said. So far, Windex glass cleaner sports this logo, and other products will follow, the company said.

The stickers SC Johnson puts on its products help build awareness of their environmental qualities, said Kevin O'Brien, category manager, Roche Bros., Wellesley Hills, Mass. “Consumers are paying attention to that,” he said.

In April, SC Johnson burnished its green credentials by purchasing Minneapolis-based Caldera, maker of Mrs. Meyer's “aromatherapeutic” household cleaners, which are made from natural oils.

“Mrs. Meyer's is a very strong line in our neighborhoods,” said O'Brien. “SC Johnson is aware that consumers want cleaning products that are earth-friendly.”

One retailer commented that SC Johnson supports its retail customers by being “good about managing distribution.” Another, Mike Hoffman, category merchandiser for Bi-Lo, Mauldin, S.C., echoed that view, saying SC Johnson “was real good with on-time delivery.”

Last year, in an effort aimed at improving transportation efficiency and benefiting the environment, SC Johnson launched a “Truckload Utilization Project.” The project created a system that “combines multiple customer orders and multiple products to load the fullest, best-configured trucks possible,” the company said in a statement.
— Michael Garry

LAUNDRY DETERGENT — Gold Medal: Procter & Gamble

Innovation and its ability to tie into consumer trends are two attributes that have distinguished Procter & Gamble's go-to-market laundry detergent strategy. Most notably, the CPG giant implemented its massive “compaction” program, which involved converting its Tide, Gain, Cheer, Dreft and Era detergents to concentrated formulas.

“This is the biggest thing we've ever done from a sustainability standpoint in laundry,” said P&G spokesman Kash Shaikh. The company's goal is to reach $20 billion in sales of sustainable products.

The rollout of downsized laundry detergent products, which ran from October 2007 through last April and encompassed 300 stockkeeping units, has had a host of environmental impacts, from saving packaging (70 million pounds per year) and water (230 million gallons per year) to cutting down shipping needs (60,000 fewer trucks on the road per year), said Shaikh. It's also made the products easier for consumers to handle and for retailers to stock, he added.

P&G has supported its concentrated formulas with in-store signs, including wraps on product caps, shelf displays and shelf talkers.

“Education is by far the most important piece,” Shaikh said. Some retailers, he noted, used videos on flat-screen TVs provided by P&G to explain the changes.

Kevin O'Brien, category manager for Roche Bros., Wellesley Hills, Mass., credited P&G for “doing a pretty good job explaining how many uses you get in a container.”

Another sustainability innovation is Tide Coldwater, a detergent designed to be used in cold water without sacrificing performance. Shaikh said that with rising fuel costs, the product can save consumers $100 annually on their heating bill (more than the $63 the product would cost annually), which is what P&G has emphasized in its marketing of the product. The item's use also cuts down on both the supplier's and consumers' carbon footprints.

P&G is also introducing “high-efficiency” versions of its laundry detergents that are compatible with high-efficiency washing machines, which use less energy and water than conventional units.

Tide Total Care and Downy Total Care, introduced last month, represent P&G's latest laundry detergent innovation, which is bringing “fashion care” into the laundry realm. The Total Care detergents incorporate the same conditioning ingredients used in P&G's Pantene hair conditioner in order to keep clothes “beautiful and new longer,” said Shaikh. The price will be the same as a regular detergent but cover 20 laundry loads rather than 25, he noted.
— Michael Garry

PAPER GOODS — Gold Medal: Kimberly-Clark

The importance Kimberly-Clark places on its relationships with retailers can be seen in the multimillion-dollar Innovation Design Studio it opened last year in Neenah, Wis.

Kimberly-Clark invites food retailers to the studio, where they view a “virtual” presentation on a 3D wide screen depicting merchandising suggestions for their stores.

“These are business-building sessions where we bring insights and strategies for our customers so they can understand the roles our brands play,” said Mary Goggans, Kimberly-Clark's marketing director, customer business development, personal care business.

The CPG company has also developed the “K-C SmartStation,” a shopping-cart-like unit with a virtual reality screen designed to simulate the shopping experience. The SmartStation allows selected consumers to “walk” the aisles of virtual stores, shopping via a touchscreen panel and reacting to displays, signs and shelf arrangements. With the system's eye-tracking technology, Kimberly-Clark can determine how different shopping environments influence shoppers' purchasing decisions and traffic flow.

“Retailers ask about department and category adjacencies, and that's something virtual reality is very helpful with,” said Goggans.

Retailers told SN that Kimberly-Clark emphasizes market research.

“They're good at sharing shopper insights and giving overall category knowledge instead of just brand-specific knowledge,” said one retailer.

The paper goods maker has also been proactive on the distribution side in support of retailers. Over the past 18 months, it has consolidated more than 70 distribution centers into eight “mega” DCs, with a ninth slated for next year. “This has allowed us to deliver to 90% of our North American retail customers within a 24-hour time period, compared with 65% in the past,” said spokesman Joey Mooring.

The new distribution scenario is allowing Kimberly-Clark to do more direct shipments of customized pallets to stores,” Goggans said. “We're encouraging that by offering allowances to retailers who use it.”

Kimberly-Clark has also been a pioneer in the use of RFID. In a program with Wal-Mart last year, it improved the promotional display compliance rate at about 120 stores from 55% to more than 75% by employing RFID.
— Michael Garry

PAPER GOODS — Silver Medal: Marcal

For the past year, Marcal has been going to market with its standard line of value-oriented Marcal-branded paper products and an environmentally slanted, but higher-priced, Sunrise line. That will soon be changing.

The company is absorbing the Sunrise brand into the Marcal line and will be marketing just the Marcal name, according to M.J. Jolda, senior vice president of marketing.

“We're coming out with an overarching branding for our environmentally friendly positioning,” said Jolda. “It will be on a broader scale with a mass appeal.”

Mike Hoffman, category merchandiser for Bi-Lo, Mauldin, S.C., considers the rebranding “a good move, especially if they can get the retail price down to where the standard price is so they're offering the environmental benefit without the added cost.” Bi-Lo carries Marcal's Sunrise napkins, made from 100% recycled materials.

The company has long been ecologically conscious.

Even before the release of Sunrise, the recycled content of Marcal's bath tissue was rated “among the highest of all brands,” according to ScientificAmerican.com.

With its Sunrise line, Marcal taps into mainstream consumers' willingness to purchase green products.

Hoffman noted that the paper goods maker worked with him to promote the brand in the spring in connection with Earth Day.

Another retailer said that the company's Sunrise line is “well-executed and supported,” adding, “their environmentally friendly line is awesome.”
— Michael Garry