CPGmatters: Kraft Promotes Meal Solutions with Custom Retail Programs
By Dale Buss
Through
a special arrangement, presented here for discussion is a summary of a
current article from the monthly e-zine, CPGmatters.
Kraft Food is amplifying
its retailer-specific in-store marketing program for Meal Solutions in
an effort to take greater advantage of the growing trend of budget-conscious
consumers cooking more at home during the recession. Its partnerships with
Meijer and other major grocery retailers around the country involve on-site
tactics ranging from floor clings to at-checkout discounts to end-cap coolers.
“Ultimately, we’re looking
to create a point of difference for our key retailers with meal ideas that
provide solutions for their shoppers. They’re not just a bunch of promotions,” Denny
Belcastro, Kraft’s vice president of Customer Development and Industry
Relations, told CPGmatters.com.
The Meal Solutions initiative
began a couple of years ago with Kraft’s conversations with consumers,
who told the company that they’re looking for easier ideas for weeknight
meals.
One early innovation
from that research, under the Meal Solutions banner, was Lunchtime Solutions
Stations at some retailers that addressed what appeals to consumers about
away-from-home meals. The stations, Mr. Belcastro explained, “were designed
to capture the interest that’s been keeping specialty sandwich shops growing
when many other restaurants are feeling the economic pinch.”
And speaking of the
pinch, the more Kraft talked to consumers recently, the more evidently
this had become a huge factor in their decisions about food and meals. “They’re
looking for ways to stretch their budgets, while still being able to please
their families with variety,” Mr. Belcastro said. These concerns about “economic
conditions made us adjust programming ideas around affordable meals and
how shoppers can cook ‘restaurant-inspired meals’ at home.”
For example, with Meijer,
Kraft first introduced last winter a “Dining In Makes $ense” campaign that
offered discounts on future Meijer shopping trips with the purchase of
multiple Kraft products.
In addition at Meijer
stores, Kraft applied “Dining In Makes $ense” floor clings that carried
images of meals made from Kraft products and directed shoppers to the company’s
web site for recipes such as Deep Dish Pizza Casserole. And there was a
tie-in to the online MealBox program that Meijer and Kraft have been running
on Meijer’s web site, which provides “budget-boosting” coupons and other
content.
In the store, both the
MealBox and “Dining in Makes $ense” logos also have appeared on customized
Kraft pallet displays.
With other partners,
Kraft has been using an Affordable Meals end-cap cooler that leverages
its Kraft Kitchens, its agency and its retail sales force to rotate new
recipes, point-of-sale materials, and print materials in the store – every
two weeks. At other customers, Kraft tailors its recipes and purchase incentives
to preferred vehicles for that retailer, reinforcing their key positioning
with local shoppers.
“Every customer has
a set of growth consumers they’re looking to satisfy, and we collaborate
with them to do just that,” Mr. Belcastro said. So Kraft has “created several
different in-store destinations for different key customers.” Some
focus on dinner, some on snacks and some on sandwiches, he said.
Discussion Questions:
What do you think of Kraft’s Meal Solutions and other similar programs?
What type of sales lift can grocers expect from such programs? How
can retailers better tap into the meal planning opportunity and the
overall cook-at-home trend?
These programs should generate a solid response as soon as shoppers become familiar with the concept. Most families need lunches and fast and easy dinners; the economy shifted shoppers away from restaurant options to retailers for these at/from home meals.
Making it easy to find solutions for quick, portable,and healthier choices is bound to boost sales. Retailers are starting to build convenience aisles in Center Store with signage and displays to help simplify selection. A new range of products like more microwaveable and entrees soups, ConAgra “shakers,” things to “pack and go”–off to school or work are growing to fill these shelves. Good opportunities here!
The consumer continues to face “time poverty”–particularly the working portion of the populace. Kraft’s leadership in starting with the consumer first, followed by product development, and then including their retail partners in building the category, is masterful.
The consumer continues to look to the grocery channel with “price,” “selection,” and “location” as their top priorities. They do call out their interest in “service,” “prepared meals,” and “unique products”–all of which are growing over the past couple of years.
Another example of how Kraft continues to stay ahead of the curve, and in touch with their customers and their customers’ customers.
This is smart three ways.
1) It obviously appeals to consumers’ current mood and needs.
2) It works to “lock in” Kraft promotions as a preferred series with the retailer. Multiple weeks and locations for display are tied up in a single sale. Plus the retailer gets continuity in the store.
3) It leverages the investment Kraft has made in Wall2Wall (their in-store coverage for selected stores). Having a sales person in the store practically every day to aid in servicing this concept is a huge advantage versus other manufacturers who would be reliant on store personnel or weekly broker coverage to keep these complex displays looking good.
In the heyday of category management, I used to make an analogy that likened a category leadership program to a football front line–it opens the opportunity to do something, but you have to carry the ball through the hole to score points. In that case, the “ball” was often a new product or program that fit the need identified in the category development strategy. This is a great example of applying the same thinking to in-store investment. The W@W investment opened the hole–promotions like this will put (more) points on the board for Kraft.
I disagree with many of my fellow panelists here. Educating the public via in-store promotions, pictures and retail programs is not going to increase the bottom line, nor is it going to drive more consumers to purchase Kraft products (except through the increased exposures because of visible branding at store level).
Kraft–like many other manufacturers–needs to recognize that in times of duress, such as this recession, their best bet to increase sales is to decrease prices. This speaks directly to their consumer and offers an incentive to purchase their products, since their overall costs are lower. Bounce-back, multi-purchase coupons and retailer specific programs all focused on lowering the register bill will all have a welcome, and longer-reaching impact than this meal solution promotion.
Any strategy that provides customers with all the elements of a “solution” in one place will be successful.
For instance, I’m a customer that wants a hamburger. I go to my supermarket and I have to go to the meat section for the hamburger, the greengrocer for the lettuce/tomatoes, the bakery section for the buns, the condiments aisle, find the charcoal–you get the idea. An academic study done years ago credited this complexity with the rise of the fast food industry–I want a hamburger, I go to McDonald’s–done.
Retailers, generally, tend to house their merchandise based on their buying organization chart with each category buyer getting a certain amount of space on the selling floor. Buyers tend to become very territorial about their floor space. Grocers, in particular, are great examples of this approach. The basic flaw here is that customers are coming to the store for end solutions which, in this case, are meals. Successful grocers have recognized this, as evidenced by the increasing presence of prepared meals sections.
Customers are looking for solutions that are respectful of their time. This is an important idea for all retailers, not just the grocers. Those that create space for these “solutions” on their sales floor will be rewarded.
Moms who’ve worked all day and pulled up to the supermarket for some quick dinner ingredients will think this is a great idea. As a mother of two who used to make three meals in the morning before leaving for an 9-hour day, I’m sure that consumers will react well to this. Now, how about making coupons available onsite?
This is a great example of consumer-centricity in action. The vendor and retailer in deep collaboration to serve the specific set of that retailers consumers. Regardless of economic shifts, this consumer-centric operating system yields substantive, sustainable and scalable results.
Bravo to Kraft for recognizing that Meijer’s customers have different sensibilities than Walmart’s or Kroger’s. They have the portfolio of brands and resources to localize messages, offers, incentives, all the tools in the kit.
At the end of the day, quite literally, it’s about busy Moms. (Dads, too!) This sounds like it moves beyond basic convenience (procurement) and connects better with the emotional drivers behind feeding and caring for our families.
Good example for us all.
Kraft’s Meal Solutions has a diverse array of options for consumers. At the same time it smacks of a “convenience” product line perhaps conveying less value for the money. That’s just a guess. But if my guess holds true, there will be less potential overall for the program. Lunch and snacks will take the majority share of any business.
As for lifting retailer sales, there is a logic that may be limiting. Buying several food items to combine as a snack or meals (not exactly menu specific) results in storing items. Offering variety at home has consumers buying “stuff” they may or may not need or use right away. Buying a meal solution limits the purchase of components to that one meal. It’s a commitment that defines immediate or future eating.
I think there is an educational component that is required for marketing these products. In my opinion it’s an uphill road for Meal Solutions.
In-store POP signing is nice, but nothing new. Meal solutions have been around too long to create a genuine, new level of excitement. Remember “Home Meal Replacement” (HMR)? The more successful initiatives have been around a total store reset. Aisle fixturing that encourages a subliminal, or not so subliminal action on the customers’ part to bring meal components together. Food Lion’s Bloom tried this is varying levels of success. C-Stores have actually done a pretty good job, as in the case of Wawa. I applaud the effort, however, we have to design our stores with a clean sheet of paper, and literally get rid of the “center store,” and integrate shelf-stable items with complimentary fresh products.
Ready-To-Eat & Ready-To-Heat food is what propels the Grocerant niche, Convenience Stores, Restaurants and Dollar Stores are all garnering new customers. By Daypart it will be very interesting who the long-term winners will be.
The huge upswing in Private Label/House Brand products means that national brands are going to have to provide more value and “fight back.” They’re not helping themselves by producing PL products with slack production capacity. Recent tests have shown that PL products don’t always taste the same as the national brand, which is encouraging. But in order to keep customers in the future and win back ones they’ve lost to the recession, national brands will have to offer more value or market & merchandise their products better. Licensing restaurant brands, for example, is one way the large CPG houses can capture some lightning in a bottle, but there are, of course, others.
It is hard to argue with lower prices when the economy is struggling, but I like Kraft’s approach to meal solutions for consumers. One challenge is being able to supply the consumer with true meal solutions without supplementing the meal with brands outside of Kraft.
I could see this working really well by supplementing the meals with fresh bread or a dessert item from the bakery or something from the butcher counter. I have seen examples of HEB’s Combo Loco program that include both national brands and store brands to create a balanced healthy meal solution and the volume numbers were impressive. So were the savings for shoppers.
Kraft is on the right track. Finding ways to create healthy meal solutions and savings is the winning combination.