Multinationals Seek Growth, Niche by Niche

Pukka Herbs specializes in herbal organic teas

Nestle is buying a small California firm known for vegan and vegetarian foods; Unilever is buying a company that makes herbal organic teas. Both of these multinationals are seeking growth by acquiring businesses and products in niches that are attractive because of increasing consumer appeal and the ability to be noticed through distinctive brands/products.

Mainstream brands/products continue to sell--but certain niches are growing more rapidly and delivering customer acquisition (and profits) through specialization. Unilever, for example, pursued Pukka Herbs because it is unusually fast-growing in its niche. Unilever's top tea executive explains: "In the morning a lot of people still drink black tea as it picks you up, but in the afternoon or evening herbal tea is wonderful with different benefits." In other words, Pukka Herbs complements Unilever's existing tea brands and products.

Nestle bought Sweet Earth, a vegan/vegetarian food marketer, to get firmly established in the plant-based protein market. Nestle USA's CEO comments: "One of Nestlé’s strategic priorities is to build out our portfolio of vegetarian and flexitarian choices in line with modern health trends."

Watch for more multinationals to exploit niche opportunities by buying firms that have a following and a strong brand image.

Once Again, It's Pumpkin Everything in the Food World

Pumpkin everything season now begins in late summer. Starbucks showed imagination in launching its Pumpkin Spice Latte via live-streaming, building on anticipation from fans. Dunkin' Donuts is doubling down on pumpkin coffees and muffins: "We’ve seen our fans ask for pumpkin earlier and earlier each year," the company explains.

In general, pumpkin everything is turning everything orange in the food aisles and in cafes well before autumn arrives. Some marketers, like Krispy Kreme, really limit the limited-time pumpkin trend: It will offer a pumpkin-spice doughnut for one day only.

Other marketers are riding the pumpkin wave for weeks or months. How about a Kit Kat Pumpkin Pie bar? Or pumpkin spice breakfast cereals like Cheerios? Pumpkin everything reigns in food marketing for autumn.

The Power of Co-Branding and Limited-Edition Products

Above, a co-branded food product that just appeared today on supermarket shelves: Limited Edition Peeps Oreo cookies.

Peeps has its own loyal customer base (including 327k Facebook fans) and Oreo has its own loyal customer base (with 42 million-plus Facebook fans).

Combine two powerful brands, add the "buy now" incentive of a limited-edition product with a holiday connection, and you have an end-cap seasonal item that attracts attention from shoppers and the media.

And of course Oreo has created a hashtag for this limited-edition product, to fuel word of mouth: #OreOMG.

Hot Sauce Marketing Heats Up

Once upon a time--after the Civil War and into the dawn of the 20th century--Tabasco had the hot-sauce market to itself. Its famous concentrated pepper sauce spiced up bland foods drop by drop. Banker Edmund McIlhenny founded the firm, and his 2d great-grandson, the current head, sums up the original venture this way: "There was no commercially sold hot sauce before Tabasco. Edmund invented the category."

The now iconic Tabasco bottle is an example of early recycling in action: McIlhenny originally used discarded cologne bottles for his sauce because they were readily available, and users could dispense just one hot drop at a time. When he began marketing the sauce commercially, he ordered new "cologne" bottles because the size and shape made sense for his hot sauce. The bottle became so identified with the product that Tabasco trademarked the size/shape. You can see Tabasco on Facebook, where it has more than 3.2 million likes.

In recent years, new hot sauces have invaded grocery shelves, and competition continues to heat up. Huy Fong's chili-and-garlic sriracha sauce is a good example: It has become increasingly popular, especially among foodies, and also has a highly recognizable bottle profile and label, including the rooster.

Sriracha is such a "hot" food product that Tabasco now has its own version...as do other sauce marketers. Although Huy Fong's owner David Tran never trademarked the "sriracha" product name, he says the new-product activity in the sauce market increases awareness of sriracha and acts like free advertising for his, the original sauce of its kind. Check out Huy Fong on Facebook (240,000+ likes), where founder David Tran is the face of the brand. 

Tax Day's Marketing Allure

April 15th means tax day to Americans . . . but to many food marketers, it's also a good hook for marketing. Here are a few of the fun food promotions linked to today's deadline for filing U.S. tax returns:

• Cinnabon (with nearly 1 million Facebook likes) is making the day sweeter with two free bun bites.
• Bruegger's has a $10.40 special on a baker's dozen of bagels, with a coupon downloaded from its Facebook page. In 2012, the bagel chain sold 10,000 of these special deals--quite a good response.
• Arby's has a giveaway of free curly fries (with downloadable coupon) plus a cash prize drawing to take the sting out of tax day.
• Boston Market's "We Love the IRS" campaign includes cash giveaways until April 30th. Plus today only, it's offering a $10.40 special on two rib meals.

Meanwhile, Massachusetts residents are celebrating Patriots' Day with a parade, the Boston Marathon, and more.

One week from today is Earth Day, an entirely different kind of marketing occasion!

Big Gulp: Food Marketers Spend Big To Target Kids

clipped from latimesblogs.latimes.com Kids get a taste of food-related advertising online A new report out today revealed some unsurprising information: Marketers spend a lot of money trying to get kids hooked on foods such as Shrek cereal and Pirates of the Caribbean waffles. What's a little more surprising is that they don't spend much money marketing food to kids where so many of them hang out -- on the Internet. In 2006, the time period that the online-spending portion of the report covered, food companies only allocated 5% of their youth marketing dollars online. (Of course, the online advertising market is growing by double digits every year, much faster than overall ad spending, so the percentage has probably increased since 2006.)

A new FTC report says that overall, $1.6 billion was spent in 2006 to promote food and beverage items like soft drinks, fast food, and cereal to kids. This is the first study of its kind--worth at least a quick look.

Online promotions are a small part of marketers' budgets. It doesn't cost that much to put up a kid-friendly site with product- or brand-related games, prizes, competitions and more.

I just hope parents are looking over their kids' shoulders and reinforcing ideas about good nutrition and healthy habits.