The Homa Files

TakeAway:  The “back-to-the-basics” consumer has given new life to many staple brands, e.g. Campbell’s, Kraft.

But, these brands are quickly finding that consumer purchases should not be taken for granted. 

The competition among staple brands has grown very intense, as consumers now more freely substitute products across categories for their “perfect” purchase.  So, product relevance is more important than ever.

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Excerpted from NY Times, “More Ads for Basic Brands as Shoppers Spend Less,” By Stuart Elliott, October 7, 2009

Readers of this week’s People magazine could be excused for believing they were leafing through a Look magazine from 1959. Of the 44 full-page ads in the issue, half are for brands like Campbell’s, Jell-O, Kraft cheese, Lipton tea and Post cereal.

Familiar packaged foods that were once dismissed as dowdy or out of date are regaining their puissance as Americans spend less and eat at home more. While marketers in fields like automobiles, financial services and luxury goods are slashing ad budgets … advertising is being maintained, and in some cases increased, for prosaic mealtime products …

The campaigns are another sign that marketers, in this case food companies, are still scrambling to keep up with the profound changes in consumer behavior caused by the recession …

In many instances, suddenly budget-conscious consumers are switching from more expensive foods and “are discovering the difference they’ve been paying for is not worth it,” said the editor of a daily food industry newsletter …

The growing power of middle-brow meal items was apparent in a decision on Monday by Condé Nast to close the more upscale of its two food magazines, Gourmet, and keep publishing the more mainstream Bon Appétit. “Gourmet was a tough sell to packaged goods advertisers” … 

Venerable foodstuffs are not only looming larger in the media in which they typically appear, they are turning up in unexpected places. The episode of “Saturday Night Live” … featured commercials for a Kellogg’s cereal and Tabasco hot sauce …

And, new products are being introduced under mainstay names like French’s, Hormel, Quaker, Ritz and Wheaties …

Marketers of longtime kitchen favorites agree that as nice as it is to capitalize on nostalgic feelings, they must also meet contemporary needs.

“A lot of times, people are talking about a return to the ’50s,” said EVP and CMO at the Pinnacle Foods Group … “But it’s important we’re going forward in this new environment in a way that’s relevant to today,” she added, “instead of just playing on our history.” …

For many of these brands, said Patty Bloomfield, VP at Northlich, “the good news is people have a very strong feeling” about their quality and remember growing up with them …

As for the future, experts say they believe the back-to-basics shift in consumer sentiment could become permanent even after the economy improves …

Edit by TJS

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Full Article
http://www.nytimes.com/2009/10/07/business/media/07adco.html?ref=business

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This entry was posted on October 23, 2009 at 7:15 am and is filed under Mktg - Brands, Mktg - Promotion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.