New Food Products Tap into Consumer Behavior Trends

Kraft Heinz's logo on Twitter

Kraft Heinz makes some of the world's most recognized brands--Heinz ketchup, Oscar Meyer hot dogs, Kraft cheese, and Ore-Ida frozen potatoes are just four examples.

But it's also facing ongoing changes in consumer behavior (culture by culture, not just internationally), which means it must adapt its products and its marketing to be competitive and successful in the changing marketplace.

"I think the most important thing we can do is provide options, so consumers can make their choice," says the company's CEO, Bernardo Hees. In other words, innovate new products that meet the needs of customers in specific markets, pointing up benefits and features for those segments.

One product Kraft Heinz recently introduced to the U.S. market is Just Crack an Egg, which combines a couple of consumer-behavior trends: interest in different/novel breakfast formats, desire for faster yet healthy meals, need for simplicity in preparation, and affordability.

What makes Just Crack an Egg unusual from a marketing perspective? The combination of multiple brands that make up the product. Its ingredient brands include Ore-Idea potatoes, Oscar Meyer meat, and Kraft cheese. Also, this product is not in the packaged-goods aisles but in the refrigerated foods aisle, which gives Kraft Heinz a new place to grab attention of the target market.

Will the combination of these famous brands and the novelty of preparation and distribution attract customers who will not just try once but become repeat purchasers over time?

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.

Multibranding at Starbucks

If and when the ubiquitous coffee culture cools off after its long reign, Starbucks will be ready with a fridge full of other food products under various brands. This multibrand strategy is important because it facilitates revenue growth without the expense of opening new cafes--and it reinforces the company's toehold in non-coffee products.

Evolution Fresh juices, a 2011 acquisition, will give Starbucks its intro to the fresh-juice refrigerated section of supermarkets like Whole Foods. (Facebook: 10,700 likes for Evolution Fresh.) The company is smart to make the most of established grocery relationships in its marketing channel. Plus from a profit perspective, doesn't it make sense to sell your own products in your own outlets? That's why Evolution Fresh is replacing the Naked Juice line of fresh juices that Starbucks currently sells in its stores. And adding new Evolution Fresh snack bars to Starbucks menu boards.

In addition, Starbucks is partnering with Danone on a line of Greek yogurt parfait-style products, to be marketed under the Evolution Fresh brand. The idea is to sell them in Starbucks stores and through the grocery distribution channel. This is another bit of diversification that will help Starbucks offer more things to more people without going too far out on a limb. Again, it makes sense to boost a home-grown brand rather than bring in outside brands.
 
Starbucks not only has high awareness and positive associations among its customer base, also has a very cost-efficient social media platform for promoting itself and its brands (Facebook: 35.2 million likes; Twitter: 4.8 million followers).

And in the corporate social responsibility area, Starbucks is testing new community stores. These specially-designated stores donate a portion of each transaction to local programs for education, youth, health, etc. The newest community store in Seattle, for instance, expects to donate about $100,000 to the local YWCA.