Kraft Earnings Take A Hit, Store Brands On The Rise

Kraft just reported a 72% drop in earnings during 2008 - the majority during the last quarter. Consumers are cutting back in a lot of ways and turning more to store brands to save money. However, Kraft still plans on increasing its marketing budget to 8% of its total budget (up from 7% last year).

Very smart move! The best way to counter store brand growth is to emphasize the value in the Kraft: Consumers have to believe that they get more value and better products if they spend the additional money. Brandweek reports that, "Kraft will rely on product innovations and value marketing to drive growth behind its brands.

Surprisingly Product Recalls Don't Change Eating Habits

In the wake of the ever-expanding peanut butter recalls I found this news surprising and a little troubling.

The Washington Post reports that, on the whole, Americans will alter their habits over the short term but revert to regular practises once the news swell has passed. Why? Psychologists theorize that "learned helplessness" is to blame.

"Few consumers, if any, had heard of the Peanut Corporation of America, the company responsible for the [current peanut butter] outbreak. Yet the Blakely, Ga.-based company sold its products to more than 70 name-brand firms that used them for foods including cookies, pet food, ice cream and cereal. With the possible spread of tainted product so wide, consumers tend to believe that they can't do anything about it and their response is not to try. When faced with a perceived helplessness consumers tend to carry on with regular behaviour despite the risks.

Kellogg Tests New Cereal Box

The Kellogg company is testing a new "space saving" cereal box that AdAge predicts will "redefine the cereal aisle." The box holds the same amount of product and uses 8% less raw materials. This is Kellogg's biggest change to its boxes since the 1950's.

This move is heralded as a new solution to consumer space concerns in the kitchens but - please forgive me for being a skeptic - it sounds like a way to prepare consumers for less product in a new and improved smaller box. In 2007 several companies redesigned their packages and touted environmental benefits to consumers while at the same time cutting product sizes. Kellogg could be taking a two step approach so keep your eyes on the product weight in the snazzy new boxes.

CPG Innovation Stalls During Recession

Despite the fact that new studies demonstrate consumers are just as likely to try new products during a recession fewer companies are launching new products into the uncertain economy. The slowdown in new products is trickling down to the new product testing, advertising and PR sectors Adage reports. Recessions have often yielded great innovations and loyal consumers so it seems like a bad idea to sit this one out. Fair weather CPG brands usually only make sales when the weather is fine.

CSPI Sues Over Vitaminwater Claims

The Center for Science in the Public Interest (CSPI) has joined forces with two firms filing suit against Coke's Vitaminwater for what they call "deceptive and unsubstantiated claims." Their main concern is that "flavored sugar water" shouldn't be marketed with health claims like "rescue," "energy" and "endurance." CSPI feels that the high sugar content negates the benefits the marketing touts.

Another practice that CSPI is calling into question is Vitaminwater's labeling. A Brandweek article notes that "the servings of calories and other 'bad stuff' are shown per every eight ounces while the vitamins and minerals are labeled per bottle."

Coke countered that the suit was an effort to draw more attention to the Washington, DC based CSPI during the pending inauguration and added, "This is a ridiculous and ludicrous lawsuit. Glaceau Vitaminwater is a great-tasting, hydrating beverage with essential vitamins and water, with labels showing calorie content. Consumers can readily see the nutrition facts panels on every bottle of Glaceau Vitaminwater, which show what's in our product and what's not."

Ketchup is Fun, Delicious and Colorful

BEST CONTEST EVER!

"Dip it, dunk it, spread it or squirt it, Ketchup is fun, delicious and colorful, and kids love to eat it!" I ate so much ketchup growing up that my parents considered it a vegetable. Since then my quantity of ketchup consumed has slowed but my appreciation/love for the best condiment ever still runs deep. Heinz Ketchup has launched the 2009 edition of their "Heinz Ketchup Creativity" contest for kids and their schools. The winning designs will be featured on 19.5 million packets of Heinz Ketchup.

Click here to vote starting on March 20-25!

Winners receive:

• Their designs printed on approximately 19.5 MILLION Heinz® Ketchup Packets


• A cash prize of $1,000


• Their art displayed in the Winners’ Gallery


• Recognition and rewards for their schools, including: $1,000 toward art supplies, $1,000 worth of free Heinz® Ketchup, A framed poster of their artwork for display

During Downturn Consumers Want Economy Sized Options

It should come as no big surprise that nearly 60 percent of U.S. consumers are "very concerned" about rising food prices. Given the lengths that consumers are going to in order to find a bargain and the equally impressive efforts that CPG companies are undertaking to scrounge a profit, The Nielsen Company's recent survey data isn't a revelation.

• 58 percent of U.S. consumers are "very concerned" about rising food costs
• 47 percent of consumers survey prefer CPG manufacturers to offer large, economy sizes with lower price points per serving
• Only 17 percent of consumers prefer CPG manufacturers introduce new, smaller pack sizes at lower prices
• 9 percent of consumers suggest CPG manufacturers downsize or modestly reduce the packaging size of products, keeping the price of the product the same

If only some free food came with this thought...

From Gourmet Retailer

How Brands Can Maximize Twitter: An Opinion

Mashable writer made several interesting points about brands on Twitter. The main point is this: Brands would be better served to choose an appropriate person to represent them in the space versus creating an amorphous brand persona acting like a person. Twitter is supposed to be about individuals connecting and sharing with other individuals and if the one-on-one element is lost the platform could slowly melt down.

Febreze will be Home for the Holidays

Febreze recently released a new limited edition line just for the holidays. The new varieties include Vanilla Bean, Cranberry & Frost, and Winter Evening & Warmth. To kick off the limited edition push P&G has enlisted Laura Dellutri as spokesperson to play up the value of the line during these tough economic times and launched a sweepstakes to share holiday traditions.

"Given the state of the economy, many people are looking for cost-effective ways to pull off a grand gathering for family and friends this holiday season," Dellutri said in a statement. "Febreze's limited edition scents are offered in a variety of products to help invoke a warm and fresh seasonal atmosphere at home without breaking the bank."

We love Febreze at our house, especially during the winter when the windows are closed and the heat is on. A quick spritz around the house really helps the the house smell fresh. I can't wait to try the limited edition holiday varieties.

From BrandWeek