Embrace what your Brand stands for, and do it Better than anyone else!
In my experience, businesses need to make a strategic choice to win in a competitive marketplace. They need to be perceived as the best value choice against their competitive set, and that choice is typically defined as either being the best low price, acceptable quality option on one end or the best higher price, outstanding quality option at the other. Brands in the middle typically find themselves in “No Man’s Land” and eventually lose market share and category relevance as a result.
One of the cardinal sins that business leaders make is to lose sight of that core positioning as they try to evolve their brand/business strategies against changing marketplace and competitive conditions over time. They believe that being the first to capitalize on these changing trends will give them a competitive advantage and ultimately positively impact their top and bottom lines. However, in chasing these short-term market conditions, they often stop focusing on their own reason for being and why their core consumers and customers value them so much.
When I was asked by ConAgra senior management in 2000 to lead the Banquet Foods brand, it was a brand that was loved by its consumers and customers more than internal people at ConAgra. Sales people at ConAgra would say that “Banquet was for selling, not for eating”. Being asked to work on the Banquet brand, either in Marketing or in R&D, was viewed as a sort of career “death sentence”, because of the lack of investment that ConAgra historically made against the Banquet brand. And, senior management constantly complained about the low Gross Margins and slow topline growth rate, both of which were well below brands held in high regard internally like Healthy Choice and Marie Callender’s (both brands that I had previously worked on). As a result, previous Banquet business leaders were constantly trying to evolve the brand into a higher margin business with better quality products, which obviously required higher pricing to deliver against those seemingly smart but flawed business strategies.
Those Banquet leaders didn’t really understand or embrace who the core Banquet consumer was. They tried to turn the Banquet brand into something that it wasn’t, and in the process forgot the core brand promise which was why Banquet consumers really bought the brand. Banquet families were generally families with both parents, and sometimes kids, working to support the family. Families generally had at least 4 children, with household incomes around $40K/year. Unlike those of us at ConAgra who would simply order a pizza or get carryout if we were disappointed with a dinner on a given night, if a Banquet consumer was unhappy with one of our products, they didn’t eat that night. It became clear to me that supporting our Banquet families with good food at a great value that they could depend on EVERY time was both an HONOR and an OBLIGATION…..our Banquet consumers were literally dependent on our team at HQ and the great team members in our plants, many of whom were Banquet consumers themselves, to provide for their families.
While we were well aware that a Banquet meal was not a fantastic culinary experience, we needed to stop being ashamed of that and instead embrace it. We needed everyone at ConAgra to understand and embrace the role we played in helping our Banquet families survive through the products we offered at prices that were generally lower than anyone else. We developed the tag line “Good Food at a Great Value”, and we began to call ourselves internally “the Walmart of Frozen Foods”. Walmart wins by staying true to who they are and by focusing like a laser on meeting the needs of their core Walmart customer……we needed to do the same.
We also needed to better leverage the positive feelings that our customers had for Banquet. We were viewed as a “loss leader” brand by them that could attract their own customers to their stores, especially Walmart. We also learned that we could get Banquet consumers to “stock up” if the deal was perceived to be “hot”. We moved from single unit, single price promotions to multiples like 3/$1 Pot Pies and then 5/$5 followed by 10/$10 Dinner promotions where we could get consumers to load up their freezers while also getting our customers to compress their margins and invest in these promotions with us. We found that a freezer crammed with Banquet products meant that those consumers had to eat Banquet more often to empty the freezer out!
Embracing what Banquet stood for and catering to the needs of our Banquet consumers had an immediate impact. Our top line growth accelerated almost immediately, resulting in us having to run 6 days/week with 3 shifts in all of our Banquet pants. While our Gross Margins didn’t grow, we were able to keep them pretty stable with an obsessive focus on cost control. And, as a wise man once told me, you don’t take Profit Margin to the bank, you take Profit Dollars! Our strong topline growth allowed us to significantly lower our overhead and fixed costs, which enabled us to drive record profitability for multiple years in a row.
Once we had demonstrated that Banquet could be a brand that internal ConAgra could be proud of AND that we could grow profitability, we were able to leverage that momentum into Marketing and Innovation investment by ConAgra Corporate. We developed sponsorships with NASCAR and Bowling Centers nationwide, both activities that were in the “sweet spot” of our core Banquet household and enabled us to generate even more affinity for the Banquet brand among our core Banquet users. We spent time with Banquet families and learned that dinner time in a typical Banquet household could sometimes last 3-4 hours, with both parents working (sometimes different shifts) and kids with multiple after school activities or jobs themselves. We found dusty, never-used Crock Pots in their kitchens, and suggested that a Crock Pot meal would seem to be a perfect solution for them. But, the moms and dads told us that the time to chop and prepare the Crock Pot ingredients in a typically hectic morning just made the Crock Pot meal unworkable. We asked them if their mindset about Crock Pot meals would change if WE did the prep for them, and that idea was an immediate hit!
We launched Banquet Crock Pot Classics the following year, where all of the ingredients were pre-measured and prepared. There were three simple instructions: 1) Empty all of the pouch contents into your Crock Pot, 2) Add water, and 3) Cook at 350 for 7-8 hours. The products met the Banquet consumer’s unmet need around varying dinner times in the family and lack of time to prep the meal. It was the perfect solution for the hectic, weeknight dinner, and our price/oz. coupled with better than expected quality was as good or better than other options that the Banquet family had. Walmart loved the concept so much that they ran ads featuring actual Rival Crock Pot displays next to our Banquet displays in the Frozen aisle. Our Banquet Crock Pot Classics were a huge hit, generating $100M in Year One sales!
There were other meaningful benefits to us embracing what our Banquet brand stood for and leaning hard into that point of difference. We became the low cost producer of Frozen Dinners and Pot Pies in the category. Swanson was no longer able to compete with us on cost or perceived price/value (they were in that middle “No Man’s Land”), and we basically eliminated them from the category. You no longer see a Swanson Diinner or Pot Pie in the Freezer….they have exclusively turned their attention to their Hungry-Man Brand. Also, because we were the low cost producer, retailers couldn’t find other Private Label producers who could meet our costs. As a result, we eliminated Private Label from our category altogether and became the “de facto” Private Label when we would run our “hot” 3/$1 Pot Pie or 10/$10 Dinner promotions. Our willingness to run these deals with consistent frequency allowed us to continue getting margin compression from our customers in a true partnership while insulating the brand from competitive threats. It was a true “win-win”. And, probably what I’m most proud of is that Banquet became a “shining star” among ConAgra’s brand portfolio. People at HQ actually wanted to work on the Banquet business because of how much success/fun we were having, and our Banquet success became a key talking point for ConAgra leaders on investor calls. Fast forward more than 20 years later, and Banquet is still one of ConAgra’s biggest and proudest brands today.
So, what are the key takeaways? First, take the time to really understand what your reason for being is among your core consumers. Why do they buy you over someone else? What are your key points of differentiation? Do your consumers truly value those differences, and will they pay you for them? Once you understand all of that, embrace it and lean into it…..hard. Secondly, don’t be distracted by “shiny object” marketplace trends, perceived competitive threats, or anything else that would cause you to lose focus against your core value proposition. If chasing any of that isn’t important to your core consumers, then don’t dedicate your finite resources to that chase…..it won’t help you strengthen your core business. Finally, brands always find themselves competing on one of two ends of the spectrum: either you’re the low cost producer and you compete/win on price, or you deliver high end quality for moderate to slightly high pricing. In both cases, your brand is winning on the price/value equation that consumers are calculating. In BOTH cases, fastidious attention and focus on cost containment is critical to either of those approaches being successful. If there are costs in your business that you can’t get your core consumer to pay for, then they are non-value added costs that need to go away.
