In down economy, food ads booming

Pressure for brand recognition mounts

MILWAUKEE -- Prepare for an onslaught of food advertising.

Major food companies, worried about budget-conscious food shoppers, are planning advertising blitzes in the year ahead.

For some, it's already started. That's why we've seen Sara Lee's campaign with The Walt Disney Co.'s "High School Musical 3: Senior Year" and Kraft's pizza commercials preaching "DiGiornonomics."

The campaigns, which include print, television, in-store promotion and the Internet, make sense, say analysts, even though the companies are grappling with higher prices for oil, corn and grains.

Consumers aren't going to change what they eat as they pull away from restaurants, said Harry Balzer, vice president of the consumer research firm NPD Group and an expert on American eating patterns. They're just going to look for bargains, and that can mean changing brands.

"It's very hard for us to change our behavior. If we like ice cream, we're going to continue eating ice cream," he said. "Now the question is going to be what brand you're going to buy."

That means more pressure on food companies to keep brand recognition strong at a time when consumers are swallowing price increases and finding some of their favorite products shrunken -- a move some companies are making as a way to help absorb higher costs.

Sue Mentecki, 51, of Milwaukee said she's looking at more generics lately. The food budget for her family of four is up $30 a week, to between $120 and $150. She goes through two boxes of cereal a week, up from one and a half because the sizes are shrinking, so generics are increasingly attractive, she said.

"You have to buy more," she said while shopping at a Target recently. "It stinks."

The ads hitting the market are focusing on quality and in some cases price points -- two ways to give value to brands. Kraft Foods, the Northfield, Ill., maker of Oreo cookies and Oscar Mayer hot dogs, is playing up the affordability of its DiGiorno pizza in a new TV ad campaign.

The "DiGiornonomics" message to customers is all about the bottom line. Two pizzas, loaded with toppings, sit side by side as an odometer ticks away until it reaches their prices. The DiGiorno pizza costs $6.69, while the delivery one is $16.13.

"One of these pizzas won't leave your wallet on empty," a narrator says, hinting at the painfully high price of gas that is one reason consumers are watching their costs.

Rick Searer, Kraft's executive vice president and president of the company's North American division, said Kraft has been boosting the quality of its products, such as putting Arabica beans in Maxwell House coffee and making improvements to its salad dressings. But so far it hadn't played up affordability, he said, and now seems the time to do that.

"On specific brands where we have a value proposition that resonates with consumers, we're communicating that," he said.

The company plans other boosts in advertising this year and is expected to top the $1.55 billion it spent on advertising and marketing last year. The stakes are big with DiGiorno, which is the market leader in the store-bought pizza segment with a 20 percent share.

Playing up price comparisons keeps brands in the minds of consumers, said Frank Luby, a partner with Simon-Kucher & Partners, a strategy and marketing consulting firm that focuses on pricing.

Companies that raise prices -- Kraft's were up an average of 7 percent in the most recent quarter -- risk losing consumers, he said, so ads touting bargains make sense.

Heinz and Sara Lee are also boosting their ad budgets this year.

H.J. Heinz, the Pittsburgh maker of Heinz Ketchup, Weight Watchers Smart Ones products and Ore-Ida potatoes, recently said it hopes to increase consumer marketing by 8 percent to 12 percent in its new fiscal year as part of a two-year growth plan.

Sara Lee has launched a multimillion-dollar campaign for its Soft & Smooth bread with Disney's "High School Musical" enterprise, said Tim Zimmer, vice president of Sara Lee Fresh Bakery.

TV spots will feature characters such as Chad Danforth, played by Corbin Bleu, and Taylor McKessie, played by Monique Coleman. An Internet component allows people to look up the characters' "favorite recipes" such as Taylor's "Sweet as Honey" peanut butter sandwich.

This is an example of more pointed marketing, said Domenick Celentano, an adjunct business professor at Fairleigh Dickinson University in Madison, N.J. That kind of approach is more useful now that consumers are becoming more segmented and shopping for different brands in different stores -- especially with bargains in mind, he said.

Companies are increasingly going online and targeting individuals, Celentano said.

"Mass marketing is sort of dead, and really what companies are looking at very heavily is using the Internet to get to the narrower-focused consumer," he said.