WELLNESS ISSUES SEEN DRIVING BIG CHANGES IN MARKETING

DAVID MERREFIELD

PHILADELPHIA -- Food retailers will soon be grappling with a "countercultural" change as consumers focus increasingly on matters of wellness and obesity, and the change will involve shifting from a mandate to sell as much product as possible to partnering with consumers in lifestyle decisions.

That's the opinion of Bob James, vice president, marketing, A&P, Montvale, N.J., who was among a number of speakers at the day-long Obesity-Wellness Leadership Seminar here. Several of those speakers predicted that retailers, manufacturers and advertising agencies are entering a new world of changing consumer demands that will mandate big changes in food product, and how it's marketed.

The event was sponsored by Information Resources Inc., Chicago, and St. Joseph's University here.

"Wellness is near and dear to the thinking of people in the industry, but it's also countercultural, when you think about it," James said during a panel presentation. "What we're trying to do [currently] is push as much [product] as we can, so why would we be interested in putting a good bit of resource into a topic like wellness? The answer is because it's good business. It's about the bottom line.

"The truth is we haven't done a good job of [marketing to wellness concerns], but that's changing and our industry is changing. What we really need to be about is not moving more cases or tons, but about how to play a role in consumers' lives. And that means a strong cultural change at our company."

Specifically, James said, industry thinking needs to turn to fulfilling "huge needs for products such as healthy, preprepared, take-home food."

In a presentation during the same session, Marnie Sherno, consumer-education specialist, Clemens Family Markets, Kulpsville, Pa., underscored the theme of consumer information. Indeed, she said, her specific duty is to travel to the 21 stores in the chain to spread knowledge of nutrition to store employees and consumers.

"Retailers' role now is to move people from one end of the continuum -- that of being in a diseased state or in a state of disease management -- to optimizing health and wellness over the long run.

"How we do that is to promote not only product, but services and information that speak to people of different life stages. For food retailers and [vendors], there are opportunities abounding as we do this. There are billions of dollars out there to be had," she said.

The theme of sales potential -- and reality -- was also sounded by the third retail panelist of the session, Blaine Bringhurst, director, grocery sales, Albertsons' eastern division, Malvern, Pa.

He asserted that products considered to be in the diet and nutritional category are growing in sales at a high rate throughout the entire Albertsons enterprise. Such products now rank as the fastest-growing category of all, expressed in percentage terms, and as the 10th-fastest category as measured by dollar volume.

"We're talking about a small category base, but this kind of growth shows the impact it's having," he said. "And the trend is building even more than these [annual numbers] show as we move into more recent quarters."

Moreover, he said, because the category is driven by new products frequently proffered by new and small manufacturers, the category is being sponsored at Albertsons despite the fact that vendors' promotional allowances may be meager.

"We are devoting larger sections to these products, which are often from small manufacturers that don't have much promotional money to support them. This is a decision we have made. Now, we have to figure out a way to expand our facings of these kinds of items. This is truly what our customers want," he said.

Additionally, he specified, customers are willing to spend a little extra on such products, freeing Albertsons from the need to mount special pricing initiatives: "We don't need to invest-spend on this, but we need to be competitive. These aren't loss leaders for us. We can make a profit from the sale of merchandise. This is a great way to win some trust from our consumers, and make some profit at the same time."

Bringhurst said the categories are also being supported by in-store location. In many instances, the categories are at store front or near pharmacy.

In another presentation, Myron Lyskanycz, chief branding officer, IdeaSphere, Grand Rapids, Mich., pointed out that consumers' growing emphasis on wellness and obesity matters stands to fundamentally change the relationship between ad agencies and their clients.

"The relationship between an agency and a client now is that the client says, 'We need to drive sales.' And the agency comes up with a very single-minded message that's designed to increase consumption," he said.

Problems may arise, though, if the bid to increase consumption comes at the long-term cost of eroding brand equity. If, say, a manufacturer co-promotes two of its low-nutrition products to increase advertising efficiency, the long-term effect may be to instill in the mind of the public the notion that the company is home to many products that should be avoided. The "beginning of the end" of a brand comes when public trust in a brand's message is lost, he asserted.

"[An agency] must now ask what an ad campaign is doing to the brand in terms of what people will think of it one or two years from now when we will be dealing more with wellness and obesity issues," he said. "We need to sell and safeguard -- to safeguard the essence of the brand."

Similarly, another speaker at the seminar pointed out that legal issues are destined to change how brands are marketed, too. David Eggert, partner, Arnold & Porter, Washington, said that as recently as a year ago, the issue of obesity was largely viewed as a "joke" by packaged goods manufacturers.

Now, though, the laughter has stopped. The defense litigator said it's likely the tone of the obesity issue will change from that of consumer "choice" -- that consumers select the product they want, and bring consequences upon themselves -- to that of "victimization." In this instance, an aspect of victimhood may arise as litigation makes claims that aggressive marketing efforts oblige unwanted consumption.

The attitude that consumption is foisted upon the unwilling will be inculcated through the media's increasing focus on obesity issues, he said. "When certain things are repeated long enough, they become gospel. And statistics about a problem take root whether they're true or not."

He pointed out that a number of other industries, notably firearms, asbestos manufacturing, pharmaceuticals and tobacco, have been the focus of those who seek to regulate through litigation.

"It's inevitable that lawyers for potential plaintiffs have stars in their eyes right now," he cautioned.

In another session, Tim Hammonds, president and chief executive officer, Food Marketing Institute, Washington, said food retailers would do well to "own the solution, not the problem" by making sure copious amounts of in-store media describe the nutritional value of various products.

Other speakers and panelists at last month's seminar here included IRI's Ed Kuehnle, group president, North America, and David S. Shanker, executive vice president, client service and consulting. St. Joseph's was represented by John Lord and Nancy Childs, both professors of food marketing. Trade press representatives were David Merrefield, editorial director, SN, New York, and John Schultz, pharmacy editor, Chain Drug Review, New York. Several trade association executives also spoke.