Key Takeaway: Although the marketing department may continue to be the first to get hit with budget cuts during troubling economic times, Del Monte is showing this may not be the right strategy during a recession.
Through increased advertising, a strong focus on an innovative product pipeline, and leveraging the synergies between consumer and trade promotions, Del Monte has been able to build share and profitability in several markets.
Just goes to show that during times where all of your competition begins to cut marketing programs, ample opportunity is left behind for those who continue to maintain a connection with both consumers and distributors. Who needs a finance department anyway?
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Excerpted from Brandweek, “Marketing Helps Del Monte Thrive During the Recession” by Elaine Wong, November 14, 2009
When Del Monte Foods appointed Bill Pearce as its first CMO in May 2008, the goal was to deliver category-changing marketing that would drive the organization forward, the company said at the time. Going by top-line results, you could argue that he delivered. The company reported a first-quarter profit of $58.6 million, versus a year-ago loss of $10.1 million. On Pearce’s watch, the company has rolled forth eye-catching campaigns, such as the “nude fruit”-themed “Fruit Undressed” ads—via lead consumer goods agency, Smith Brothers Agency, Pittsburgh. The advertising is part of Pearce’s strategy to reinvigorate Del Monte by more “consumer-centric marketing,” the former Taco Bell marketing chief said. Pearce, a veteran of the Campbell Soup Co. and Procter & Gamble, spoke with Brandweek about Del Monte’s new marketing focus.
BW: Earlier this month, Del Monte Foods consolidated consumer promotions and shopper marketing duties for its consumer goods and pets business under two different agencies—Catapult Action-Biased Marketing and Draftfcb, Chicago, respectively. What brought about this decision?
BP: It goes to what we’re trying to do. I talked about top-tier growth and top-tier share, [and this is part of our effort to achieve that]. It’s not just what you do on TV, but how you surround the consumer on the integrated marketing [front]. We wanted to [increase] our ability to communicate with the shopper in-store, and that really requires ramping up our shopper marketing capabilities. And frankly, the consumer trend—how people shop—has changed over the last couple of years. So it’s really also about making sure we have shopper/consumer promotion capabilities in line with the [current] shopper marketing [trends].
BW: Del Monte Foods dialed up ad spending by 11 percent in its latest quarter. Which brands are you focused on marketing in a recession?
BP: On the consumer side, you’ve seen our Del Monte ads [for our canned fruits and vegetables business] on TV for the first time in 10 years, and we will continue to support [that campaign]. We believe that the brand is extremely relevant, and we’ve got a very creative way to reframe it in consumers’ minds. [Spots, also via Smith Brothers, show the value and nutrition of buying Del Monte’s canned foods over fresh or frozen brands.] On the pets side, we see continued upside in the pet snacks business, and we recently launched a new campaign for Milk-Bone [“It’s good to give,” via Draftfcb in Irvine, Calif.]. We will continue to support that as well as our work on Pup-Peroni [ads show dogs communicating with their owners with the help of signs], which has been on air [since January].
BW: Marketers have cut back on new product pipelines in a recession. Do you see much of Del Monte’s innovations coming from line extensions or category-changing new products? Do you have an example of this?
BP: Fruit Chillers [Freeze & Eat Tubes is a good example]. You can think of them as line extensions, as we do have the Fruit Chillers [fruit cup snacks] product. But it was a totally reworked proposition with an entirely new target audience. So, a focus on kids, a new product form, a handheld, versus a cup, like one you’d eat sorbet or ice cream out of with a spoon. And we view that as more than a line extension. It’s been well received. It opened our brand to a whole new user base and to new occasions that fit in with today’s lifestyles and [busy] moms’ needs.
Edit by JMZ
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