Data shows more people dining at home to save money
AUSTIN, Minn. With consumers looking to save money by eating dinner at home or grabbing lunch at their desks more frequently, sales of microwavable meals are expected to grow. The downturn in the economy already has had an impact on how frequently consumers are visiting restaurants for dinner.
Experts say more workers are brown-bagging at lunch in an effort to save money. A recent poll by NPD Group found that nearly 12 percent of lunchtime meals were brought from home last year, up from 11.3 percent in 2007 and an all-time high since 2001. Those polled said cost-saving was their primary motivation for packing their lunch.
Packaged meals that can be prepared easily and eaten in their containers are especially appealing to office workers looking to grab a quick, inexpensive lunch. Sales of ramen noodles and microwavable package meals have been on the rise.
Dollar sales of microwavable package dinners jumped more than 22 percent in supermarkets, drug stores and mass outlets (excluding Wal-Mart) for the 52 weeks ended Aug. 10, 2008 according to Information Resources Inc., a Chicago-based market research firm.
IRI data shows Hormel Completes in the lead, with a 36 percent dollar share of the category. Conagra Foods Inc.’s Chef Boyardee microwavable package dinners claims a 26 percent dollar share of the market.
Del Monte recently launched Del Monte Harvest Selections, microwavable meals in six varieties, including beef stew, Italian style pasta bake, chicken cacciatore, home-style chili with beans, spinach and cheese ravioli and Santa-Fe style rice and beans. The meals are packed with a full cup of vegetables per meal, which meets 40 percent of the USDA recommendations for vegetables. Del Monte is positioning the brand as one of the most healthful microwavable options available on store shelves.
Competitors are positioning their brands as healthy choices as well. Hormel recently extended its Hormel Compleats line to include a collection of six healthy SKUs which contain fewer than 320 calories and less than 10 grams of fat. Compleats healthy line, which is branded with green packaging to set it apart from the rest of the line, will hit store shelves in Spring 2009.
Last year, Hormel Foods relaunched its existing Microwave Trays as Hormel Completes, a 20-variety line of microwavable meals, and rebranded it as Hormel Compleats. The brand, which was included on Information Resources 2007-2008 New Product Pacesetters Rising Stars list of projected top 10 food and beverage brands, has tripled in sales in the past three years making it the fastest-growing product in the company’s grocery product division.
General Mills also is beefing up its quick-meal offerings with premium line extensions to its Bowl Appetit! brand and additions to its Hamburger Helper Microwave Singles brand. The company is looking for additional ways to bring innovation to the category.
New World Pasta also joined the microwavable meal arena with its Ronzoni Bistro, microwavable pasta meals in four varieties.
Ramen noodles also are a key segment in the quick-lunch category. IRI data shows dollar sales ahead 8 percent for the 52 weeks ended Aug. 10, 2008 in all three channels, with Maruchan in the lead with double-digit dollar sales increases on its ramen noodles.
The drug channel, which has significant lunch hour foot traffic in many locations, has done very well with these categories. “In the last few years, we’ve seen the number of items on drug store shelves jump from two to six, on average,” said Brett Asay, product manager of Hormel Compleats. “Some retailers are adding significantly more items to their shelves as they see the success of this product.”
The drug channel has been very promotional in the category, often running deals on multiple purchases. CVS recently used an endcap to feature a Simply Asia’s rice noodle soup bowl variety four-pack priced for $3.99 and has run deals on Betty Crocker Bowl Apetit.
Safeway supermarkets are promoting noodle lunches heavily. Nissin Souper Meals Nissin Chow Mein and Chow Pasta products were promoted at four for $5, while Maruchan Yakisoba Japanese-style noodles were priced five for $5. Maruchan six-pack instant noodle lunches were being promoted at two for $6. At 50 cents a bowl, it’s at attention-getter for consumers looking to stretch their dollars in a tight economy.
Food manufacturers battle over ownership rights of trademarked colors
LONDON A recent legal battle against Australian chocolate company Darrell Lea has Cadbury showing its true colors as it fights to protect its trademarked color purple. The confectionary manufacturer is in the middle of a lawsuit accusing Darrell Lea of using purple packaging to purposefully deceive consumers into thinking the products were made by British sweets manufacturer Cadbury.
In April, the Federal Court of Australia ruled in favor of Darrell Lea, stating that the chocolate company had not breached the Trade Practices Act and had not designed its packaging to appear Cadbury-produced. Cadbury plans on continuing the fight, saying it will appeal the judge’s decision.
The heated battle truly exemplifies how important and valuable a brand has become in today’s market. Millward Brown Optimator reported that Coca-Cola’s brand is worth a whopping $58.2 billion. Ever since laws were passed in the 1990s allowing companies to trademark colors, corporations have jumped on the opportunity to personalize their brands with color. UPS registered a particular shade of brown, Tiffany’s trademarked a blue tone and McDonalds owns a certain shade of red and yellow.
Registering a color trademark prevents other companies from using a color shade within a particular marketing context. Cadbury is essentially fighting for its trademark on the color purple and defending its accusation of Darrell Lea’s use of purple to deceive consumers. “At the moment, Cadbury currently has uncertainty as to whether it can enforce its color purple in Australia,” said Gary Assim, head of intellectual property at UK law firm Shoosmiths.
Cadbury cuts middle layer of management; puts CEO in driver’s seat
LONDON Cadbury today reported that it is revamping its management structure removing a layer of management and handing over the reins to chief executive officer Todd Stitzer to steer the company’s operational divisions.
“Our four region operational structure will be eliminated, leaving seven business units (listed in Appendix A) which will report directly to [Stitzer],” Cadbury said in a press statement. “At the same time, we are strengthening our global chocolate, gum and candy category structure, further increasing our focus on category development.”
The change will extract the company’s current regional management structure, removing layers and spreading out organizational tasks over other layers. The company hopes that the change will provide “faster decision making, improve in-market execution and ensure a stronger alignment of category strategies and commercial programs,” it has stated.
The removal of the management layer will affect 250 positions, many of them senior managers. Cadbury said that the changes were following a plan started in 2007 to restructure operations.