Imagine for a moment, you have an iconic morning show featuring Orville Redenbacher. For decades, a beloved personality who has fallen out of favor with today’s consumer.
Welcome to the world of the Conagra Brands management team, except it’s not just one iconic brand, but much of their processed food portfolio.
In recent years, the tastes and buying habits of American consumers have evolved from canned foods to fresh ingredients and the packaged food industry is scrambling to catch up.
According to Bob Nolan, senior VP of insights and analytics of Conagra Brands in a recent Ad Age article, “We wanted to make one thing, we’d sell it everywhere to everybody and that’s not the paradigm. We want to sell the right food for the right folks at the right time.”
The article goes on to say, “Delivery services such as FreshDirect, Instacart, Peapod, and a variety of meal kits, give people fewer reasons to wander the aisles of their local supermarkets. People also graze throughout the day and cook less, eliminating the need to keep freezers stuffed with chicken pot pies.”
Less occasions and shifting consumption patterns. Without knowing it, Nolan is also describing radio and the shift from broadcasting via the transmitter to streaming and on-demand audio consumption.
A Familiar Refrain: Flat is the New Up
Conagra generates annual sales of $7.8 billion, down from $15 billion a few years ago when they started selling off assets and streamlining their portfolio. This fiscal year (ending in May) sales are expected to be down 2%. That performance is in line with General Mills, which is also expecting sales to be down 1-2%. Some analysts optimistically believe one or both could have flat year over year numbers.
Yet the Glass (or in this case the grocery cart) is Half Full, Not Half Empty
Darren Serrao, chief growth officer of Conagra Brands, shares this perspective: “It has nothing to do with the strength of the brands and everything to do with the products that represent those brands.”
While subscription based food kit start-ups such as Blue Apron connected with both consumers and investors out of the gate, in recent months both Blue Apron stock and the company overall have faced significant head winds.
In part, the recent difficulties for food kit start ups stem from Conagra expanding its product offerings by adding supermarket-distributed frozen meals and kits for dinners, such as chicken fajitas.
In a similar way, Conagra recently introduced a new line of Healthy Choice Power Bowls. As frozen TV dinners have fallen out of favor, applying the name recognition of the Healthy Choice brand to the popularity of Power Bowls is quickly gaining traction.
The way that Conagra is marketing its brands is evolving as well. Rather than the traditional one size fits all strategy, they are identifying and targeting specific consumer use cases and creating multiple versions of the messaging and creative.
For example, P.F. Chang’s sauces and frozen meals are purchased for a variety of reasons. People looking for a quick and easy meal, others who are interested in trying new flavors, but don’t have the culinary skills to make their own Chinese food, as well as those looking for a budget friendly version of going out to dinner or ordering carry out.
It’s not good enough for a brand to own a broad category image, such as Chinese food. Rather the opportunity exists to understand your heaviest consumers and the reasons they regularly use your product and segment the marketing strategy accordingly.
To borrow an analogy from retirement investing, this approach of segmenting target consumers and crafting unique messages for each group is similar to buying mutual funds instead of an individual stock.
Conagra was founded in Nebraska in 1919. Reinventing the business won’t happen overnight, but as they approach their 100th anniversary, they’ve already begun the heavy lifting.
As Conagra’s Nolan puts it, “What made you successful today is the worst possible thing that will make you a failure in the future. It’s easy to get comfortable, saying, ‘We’ve always done this.'”
The iconic Orville Redenbacher and other beloved consumer brands remain, but their product lines are being updated along with a targeted marketing strategy that focuses on connecting with their heaviest users.
For AM/FM radio, while our 700 billion minute per month advantage against streaming is real, we need to be enhancing and communicating the value proposition that we offer employed listeners in the unrelenting mobile world. By communicating targeted and unique messages off-air, you’ll win ratings today, while also building for tomorrow.
Whether it’s new ownership, new competition or just wanting to jump start the new year, we can help. Let’s discuss your competitive situation and how to invigorate your ratings and revenue. Send us an email or call 859-957-1581.
Andrew Curran, President and COO