For years, Ball Park was the No. 2 player in hot dogs. That is, until parent company Sara Lee—maker of Hillshire Farm meats and Jimmy Dean breakfast sandwiches—turned to insights, backed by innovation, to take share from and ultimately usurp the lead spot from Kraft competitor Oscar Mayer. (Per IRI, Ball Park is now the beef hot dog sales leader, based on data for the 52 weeks ending March 7.) The brand’s ascension was informed by research which showed that moms were the primary buyers of the product, but that teenage boys, too, enjoyed eating it. Such a consumer-centric approach has helped Sara Lee drive growth, said CMO Philippe Schaillee. Schaillee spoke to Brandweek about why Big Food is likely to roll out major new innovations later this year and how social media helped Sara Lee’s deli business gain prominence with moms. Excerpts from the interview appear below.
Brandweek: At a recent industry conference, you spoke about how Sara Lee is using insights to drive innovation. Give us an example of how that worked for a major brand.
Philippe Schaillee: I will talk to you about the Ball Park brand. For many years, we communicated Ball Park through traditional TV and print, primarily to a male audience. We had this character called Frank, and we’d talk about the grilling occasion and that great experience you’d get from [cooking with] Ball Park hot dogs. Looking back, I’d say that was [both] intuition- and research-based, but it wasn’t really insights- based. As we dove much deeper into an understanding of the consumer and shopper, we learned a few things. One was that the brand was overindexing with males. They are looking for the heartiness and real quality of a Ball Park hot dog. But [the brand] was also overindexing more with teenage boys than with adult males. Once we learned that, we started to look into the shopper of this [brand] and learned that she was really looking for a hearty solution for her teenage son and husband. She [wanted something that wasn’t] just a lower quality snack or that would get them into this mindless eating behavior, but something that was solid, yet still fast and convenient. That [discovery] was a breakthrough.
BW: And then what?
PS: We decided we had an opportunity to build this platform around “guy foods.” However, the person we had to reach out to and that we had to convince from a purchasing behavior perspective was mom. So, from an activation perspective, we shifted our spending radically from what, before, was 80 percent against a male target, to 70 percent [to reach] this female shopper, and the other 30 percent was spent against [targeting] teenage boys. Our communication to teenage boys, [meanwhile,] was a radical departure from the past. Teenage boys watch TV, but they are absolutely not loyal. That is not where we should be spending our money, [nor do they] really read any magazines or newspapers. Where we have to be to reach that target is in the individual gaming and online action sports [arena]…We teamed up with a couple of sports spokespersons to build credibility and really ensure that the Ball Park brand would be [engaged in and participating in] the action sport, versus just advertising at [the event]. As for business results, after having eternally been the No. 2 brand in the hot dog category, we overtook Oscar Mayer about two years ago, and we’ve been growing our share advantage every year. When looking at equity parameters like awareness and household penetration, our loyalty metrics are inching up, and we’ve seen that with teenage boys, especially. We’ve moved from being not on their radar screen to more on their radar screen.
BW: Pricing has come down significantly from their year-ago highs, yet shoppers are still price sensitive. What’s your strategy with respect to pricing this year?
PS: We try to be more proactive about it with a philosophy we call “pricing to value.” It’s thinking about it in terms of the value of your brand and the product you deliver. We try to ensure that we can maximize the price that is allowed with that value, so we’re putting products at market at the value that consumers are willing to pay for them. As pricing goes up [later this year], we’ll continue to explore what that maximum value is and what the consumer and shopper is willing to pay for [a product] with respect to other competitors.
BW: Innovation shouldn’t be just product-centric, as you say. Food companies, however, played it safe, with the majority of introductions being line extensions. What are some of the major category themes we’ll see from food makers this year, and are they coming back with new, splashy innovation?
PS: [Innovation] will deliver against three key trends: health and wellness, convenience, and real foods. The big story, I think, for Sara Lee, will be to continue to do what we’re already doing so well, which is building brands, [leveraging] true insights, true innovation and true category leadership. That’s not going to change. For the food world, overall, what I expect to see is there is going to be a pretty significant increase in companies that are focusing on innovation again, so you will see that go up significantly. And you’ll see more companies shifting their activation dollars to digital and shopper marketing. The first half of the year will be mostly line extensions, but major innovations will trickle in. Then you’ll see it building up in a very meaningful way.
BW: There’s been a permanent consumer shift towards value and thrift. What does that mean for Sara Lee—and food companies—in the future? Is it necessarily a good thing?
PS: I see it as an opportunity, but something we have to watch. The opportunity is that value has two sides: The first is the cost side and what we have seen during this recession is that more consumers are focused on value. They see the value of buying a brand versus a lower tier brand, and some of them moved to private label, but a lot of people moved up to the better brands with better quality. The reason is because consumers are eating at home, they reasoned they’d at least get a safe and good quality product. That is the opportunity. But we also need to continue to put more emphasis on our products in store, to make sure we’re offering the right value, so that we have no category where people are starting to move to another brand.
BW: Many of Sara Lee’s brands, the deli business, in particular, have been quite active in social media lately. What’s your approach when it comes to social media?
PS: I see social media as one other lever within digital and within the overall activation vehicle and consumer connecting points. It starts with the same discipline: We have to understand who our consumer is, who the shopper is and then we have to ensure that we really understand what those touch points are. Where he or she is most open to our message of social media, that is our connecting vehicle, and that is where we’ll go. With deli, for instance, social media was a very good vehicle, but as it’s a [product that‘s not sold everywhere], we really had to find consumers that were passionate about the superior quality and freshness that the deli category provides, and we had to explain to them what the Sara Lee brand was providing in that space, and where they could find it, both in deli and pre-sliced, because many consumers are not aware of it in [the latter’s form.] It’s a space that too many brands and companies are trying to get into without being relevant and without understanding that they have to be a part of the conversation—instead of imposing a conversation—but so far, with our initial steps, our approach to social media and to reaching this consumer has been successful.
Note: Sara Lee’s Ball Park is the No. 1 beef hot dog brand, per IRI data for the 52 weeks running April 6, 2008 to March 7, 2010. The data does not include Walmart sales.