Rather than chase new consumers, ConAgra Foods, Inc. is shifting its focus to the core users of its ailing brands. As part of efforts to revive Healthy Choice, Chef Boyardee and Orville Redenbacher’s, the Omaha-based company plans to optimize promotions and merchandising around its existing consumers.
“We have spent too many resources on these brands trying to penetrate new consumer segments by overcoming their perception barriers,” said Gary Rodkin, chief executive officer, during a Feb. 18 presentation at the Consumer Analyst Group of New York conference in Boca Raton. “And, frankly, it hasn’t worked.”
Healthy Choice, for example, has suffered a drop in sales as the frozen single-serve meal category continues to cool. Instead of investing to attract new demographics to the brand, ConAgra aims to drive more profitable purchases from baby boomers, who represent more than 60% of the category’s volume.
Another course correction strategy concentrates on four P’s: price, packaging, placement and promotion. ConAgra is reshaping the Healthy Choice brand by discontinuing weaker stock-keeping units and rebuilding the line around its Café Steamers products.
“Specifically for the Healthy Choice turnaround, we’re getting focused on getting the right product on the shelf,” Mr. Rodkin said. “Our Café Steamers have been a terrific performer for us since being introduced five years ago. They are unique in the frozen aisle with the tray-in-tray format, which delivers very clear, superior quality, and they are higher margin than our entrees.”
While traditional marketing still works for ConAgra’s key brands of Pam, Reddi-wip, Hunt’s and Marie Callender’s, the company said a more effective approach for reaching today’s shopper happens in the store at the moment of decision-making. Occasion-based promotions, competitive pricing, product placement and packaging figure largely into ConAgra’s retail strategy.
“Packaging, graphics, and functionality plays a big role in being perfect at retail, because it’s so critical when shoppers are making a choice,” Mr. Rodkin said.
Such evolved packaging includes resealable Tetra packages for Hunt’s tomato sauce and Bertolli frozen meal bags designed for the club channel, which provide compelling benefits for a consumer.
“Being perfect with our packaging creates one more reason for shoppers to pick up our brands versus the ones next to them,” Mr. Rodkin said.
In accelerating its retail strategy and refocusing on the core consumer, ConAgra hopes to reposition its trio of troubled brands for long-term growth.
“We are confident that we can stabilize our share; and with a maniacal focus on these consumers, we can potentially drive brand preference and growth,” Mr. Rodkin said.
