Friday, September 3, 2010

Team Hormel

By Michael Applebaum on Mon Sep 14 2009

Well over a century ago, George A. Hormel was asked to explain what shrewd business strategy was responsible for his company having survived the Panic of 1893. His response: "I think it was the sausage."

He actually wasn't kidding. For 118 years, Hormel Foods has prospered by offering high-quality foods in convenient packaging at affordable prices. Today, however, if someone asked how Hormel has managed to survive the Great Recession of 2008, the answer might be: It was the microwavable sausage.

Make that Hormel Compleats, a line of quick-serve meals added to a long list of product hits, including Dinty Moore Beef Stew (1935) and Spam (1937). But no heat-and-serve meal can do $200 million in sales without the right thinking behind it. For that, you have to credit Robert Pepper and Brett Asay, group product manager and senior product manager, respectively.

What's more, this pair of humble Hormel veterans comprises the entire bare-bones marketing team on the Compleats brand. "Why are there only two of us? Hormel's always been a lean organization," says Pepper, pausing momentarily to consider the pun.

Pepper's boss, vp-marketing Scott Aakre, further illuminates the Marketer of the Year duo's contributions, from the time Pepper and Asay rebranded the former Microwave Trays line in 2007 to this past year, when Compleats distanced itself from top rivals and solidified its stranglehold on the category. "Brett drove the execution of the [restage] project from start to finish," says Aakre. Pepper "inspired the team and kept the project moving forward."

At a time when food and beverage brands are launching questionable new products (carbonated milk, anyone?) and extensions that endlessly segment the market, Hormel went back to basics. It delivered a portable lunch option that could be easily stored and quickly prepared for about $2.50 per meal. In the process, it established a new usage occasion for a harried workforce and expanded the market for convenient meal solutions.

What's more, Hormel has hardly broken the bank on advertising. It spent a mere $3.8 million on ads for Compleats last year and about $3 million through the first half of 2009, per Nielsen.

"Compleats is a great example of taking a consumer insight and executing the heck out of it," says Ken Harris, managing director of Cannondale Associates, Evanston, Ill. "They proved you don't need huge amounts of marketing dollars to convince people they need a product."

Nor did Hormel have to reinvent the wheel with Compleats. The line—whose varieties include Spicy Italian Sausage and Cheesy Manicotti—uses a shelf-stable meal technology first introduced in 1987 with Hormel's Top Shelf brand. In the mid-2000s, Hormel discovered a far more successful formula in its Micro-wave Trays brand. But the product had a flaw: The bland packaging was a case of form not following function. "Consumers weren't sure what was inside the box," Pepper says. "When we [repackaged and] revealed the tray in a sleeve compartment, consumers knew what it was and how to use it."

That revelation led to a name change too. "Shoppers didn't know how to [recommend] 'Microwave Tray' to a friend or write it on a shopping list," says Asay. "'The name Compleats refers to the complete nature of the product as well as the 'good eats' diner idea."

Hormel continues to employ the same lone TV ad to promote Compleats' message of convenience: a slapstick 30-second spot (via BBDO, Minneapolis) in which office workers—after being told by the boss that they have only 10 minutes to eat lunch—trample one another in a stampede to get food. Meanwhile, the only employee smart enough to have socked a Hormel Compleat package in her desk drawer ("a satisfying meal that's ready in just 90 seconds!") noshes in triumph.

So far, Pepper and Asay's efforts have paid off for Hormel. For the 12-month period ending June 14, 2009, Compleats was up a strong 4.76 percent to $86.35 million in sales in the $272 million microwave package dinner category, per Information Resources Inc.

Next up for the duo? A focus on promoting portion control and healthy living. "We're pretty happy with the way things are going," says Asay.

Hmmm. Must be the sausage.