ConAgra's Chow Talks Innovation, Insights

ConAgra Foods’ new product pipeline has been sizzling, despite the recession. The maker of Hunt’s tomato sauce and Chef Boyardee saw sales rise 6.1 percent to $3.1 billion for its most recent quarter. New product introductions like Healthy Choice Café Steamers, the No. 1 food launch in 2008—according to market research firm IRI—contributed to that growth. That product brought in $95 million in first-year sales alone (excluding Wal-Mart). While private label and consumer cutback did eat into its bottom line (net income fell 37.5 percent to $193.2 million), CMO Joan Chow still thinks there’s plenty of demand for more new products in tough times. Not to mention some revamping of old favorites. Such was the case with the company’s recent relaunch of Healthy Choice. Its new campaign stars The New Adventures of Old Christine’s Julia Louis-Dreyfus. The effort, via agencies Nitro, New York, digital agency Bridge Worldwide and design firm Brandimage Desgrippes & Laga, also coincides with new packaging—most notably on the just-introduced All Natural Entrees line. Such initiatives, and others in the works, keep the ConAgra family of brands alive and fresh, Chow said. Here are some excerpts from a recent conversation:Brandweek: Analysts have applauded ConAgra’s new products; what’s your strategy?Joan Chow: It’s definitely “fewer, bigger and better.” We call it sticky innovation, meaning that when you launch it, it sticks around. It’s not just a flash in a pan and then it’s gone. Steaming is one of our major platforms. You see it with the Healthy Choice Asian Inspired Café Steamers; the technology has been expanded to Healthy Choice Fresh Mixers and now with Marie Callender’s Pasta Al Dente, which uses that same platform.BW: You increased your marketing spend in the last quarter. Will this continue?JC: We’ll be up a bit on advertising and promotional spending versus last year on a total year basis. The important thing isn’t the sheer dollar amount, but how we go about spending it. We try to make sure we are as efficient with our dollars as possible. We are striving for return on investment on our marketing objectives.BW: How are the new Alexia Natural Crunchy Snacks performing?JC: It’s only in a few retailers. The marketing is limited to shopper marketing. [Currently], we have it at Target. It is truly delicious. Once it’s in broader distribution, we will have a more robust campaign with TV, print, online and sampling. The premise behind it is, “The ordinary made extraordinary.” You won’t necessarily see those words [on the packaging or in ads] but it is made with incredible Russet potatoes and the onion strips contain actual strips of onion. It’s not the fake stuff. It’s the real thing with seasonings and spices inspired by a chef. BW: What’s the strategy behind the new Healthy Choice campaign?JC: Healthy Choice really started the whole healthy foods [frozen category] 20 years ago when it was introduced. [But], we didn’t keep up with contemporary flavors for the brand. We decided to reinvent the whole brand, everything from the food—in terms of the flavors [including the launch of new, All Natural Entrees this month] and made sure the taste was incredible. We changed the packaging along with the brand to make sure it’s fresher and more contemporary and we introduced an exclamation point [on the packaging] to show the surprise element around Healthy Choice. It represents great nutrition, great taste and great looks, and a surprising way to advertise this is, we have a wonderful spokesperson, Julia Louis-Dreyfus, who is in these situations in a storyline that, as it develops over time, shows her debating whether or not to be the brand’s spokesperson.BW: How do you combat private label?JC: We keep an eye on our price point and our price gap versus private label. And we go with the changes in our input costs. We just have to adjust that over time, but we focus on making sure the consumer wants to be able to choose between private label and our brand. BW: What’s the biggest challenge in the food industry this year?JC: The challenge is rising food costs. While they are receding a bit, they are still above year-ago levels. We feel we are well positioned to help consumers when times are tough. We have some great value brands, including Banquet and also Orville Redenbacher’s. When you think about how much you get for a serving of popcorn [70 cents a bowl], you actually pay a lot more for potato chips. And popcorn fills your hunger a lot better and it’s got a lot of fiber. It’s a great tasting snack.BW: What’s your advice for other marketers who are also battling these tough times?JC: Stay very close to your consumers. Make sure you have actionable insights on what they are going through in their lives as they think about shopping and providing food for their families. And make sure you have the insight to drive strong brand growth and brand demand. With Orville Redenbacher’s, everyone likes popcorn, they just weren’t always in the mood for it. That’s when we talked to consumers and what became clear to us is that popcorn, in essence, is a social magnet for the family. When someone pops popcorn, you hear the sound, you smell the aroma and very quickly, someone says, “Someone’s got popcorn. I gotta go have some!” Moms talked about it as a way to bring mom, dad, kids and the family together so they can all have a moment to sit down and talk. With that insight, we developed this ad campaign [which started running last month via Venables Bell & Partners, San Francisco] around Orville Redenbacher’s being a social magnet. When shown to consumers, it has done extremely well in testing. They said, “This is about my family.” It truly resonated with them. That’s an example of having great insight drive marketing.

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ConAgra's Chow Talks Innovation, Insights

Elaine Wong

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Elaine Wong