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.