JWT’s AnxietyIndex is designed as a place to discuss how brands and consumers are responding to the global recession. With daily content updates, AnxietyIndex.com includes contributions from around JWT’s network, offering a truly global perspective.
“It Has to be Heinz” represents the brand’s biggest umbrella campaign in five years in the U.K. The latest spot shows a range of lighthearted situations that “just have to be” (“Men just have to gather around the barbecue,” “Mum has to call at exactly the wrong time,” etc.), ending with the line “And always, it has to be Heinz.”
Like most supermarket brands, Heinz has been bruised by competition from private labels as consumers trade down and cut costs. In response, the company has hiked its global marketing spend this fiscal year by 15 percent, and CEO William Johnson recently said Heinz will continue to increase its marketing investment through April.
Heinz is coming at this recessionary challenge from a strong position: Its ketchup “consistently appears as the brand that British consumers least want to give up, followed by Heinz Beanz,” according to Marketing columnist Mark Ritson. So while many supermarket brands have been boldly asserting their value in response to the private-label threat (as we’ve noted), Heinz is doing something different: It smartly turns its ubiquity in the British kitchen into its own kind of value and implies that giving up the brand is akin to going against the natural order of things.
It used be that most people who took advantage of vouchers, deals and discounts were living on a shoestring. Today, it’s simply a sign of a savvy shopper, whatever their income. This recession has seen the rise of the deal-seeking affluent, and brands that have not traditionally catered to an affluent audience should be doing all they can to appeal to this new breed of discount shopper. By luring in these consumers now and offering them a good experience, brands may well retain their custom beyond the recession.
One example from the U.K., which I highlight in our Balancing Health, Wellness and Budgets presentation (download in the Trends and Research page), is discount supermarket chain Aldi, which swiftly added luxury items such as whole Canadian lobster (£5.99) and premium caviar (£1.69) in response to an influx of high-income customers. One trend forecaster has labeled these shoppers “the Aldirati,” while some call them NFAs (no-frills affluents), as an article in the Times of London points out. A recent Aldi campaign hit the nail on the head with the tagline: “Don’t change your lifestyle, change your supermarket.”
While Australians are undoubtedly trying to reduce the amount they spend on groceries, they are buying more fresh fruit and vegetables—despite perceiving produce as very expensive. This represents irrational decision making when considered purely on price terms. But as I discuss in our Balancing Health, Wellness and Budgets presentation (download it in the Trends and Research page), the driver here is health, and consumers are making an emotional connection where “health” is expressed through “fresh.”
Indeed, the consumer perception of “healthy” is multifaceted, and there is an opportunity for brands to leverage these perceptions and health values. Brands able to emphasize “fresh” credentials should do so, because Australians are not currently prepared to trade down on fresh to save money. The Woolworths supermarket chain, for example, is positioned as the “Fresh Food People,” and its latest campaign carries the message “We’re the fresh food people because you are.” And Subway is continuing its “Eat Fresh” tagline as a key point of difference over other fast food options.
“I have different supermarkets for my shopping; one for detergents, soaps and shampoos, and another one for food products such as oil, rice and sugar, since both product categories are cheaper in their specific supermarket,” according to one homemaker we interviewed as part of our qualitative AnxietyIndex research (download “AnxietyIndex: Straight from the Consumer” in the Trends and Research section).
Now Food Lion is trying to reduce this tendency. In its latest campaign, the regional U.S. grocery chain tries to demonstrate that “You don’t have to hunt for great prices”—“Food Lion is the place for great prices on all the groceries you need, all under one roof.”
The effort will likely attract people who’ve changed their habits in response to the recession—and are now fatigued by the planning and running around that multiple-store shopping involves. It’s less likely to appeal to savvy bargain hunters, like the one above, who are well-versed on where to get the best deals on what—unless, of course, Food Lion’s “great prices” actually equal the lowest prices across the board.
Five months ago, Spain’s largest supermarket operator made the biggest splash in the country’s retailing history by eliminating 900 branded products from its shelves. The chain, Mercadona, owns the most popular private label in Spain, Hacendado.
Currently, the share of market for branded products in primary retail categories is more than 50 percent. The question is whether Spaniards’ bonds with brands are strong enough to avoid a shift toward a private-label-led retail model (as is the case in Germany).
Now Ipsos has issued a qualitative and quantitative study of Mercadona’s customers, finding that 40 percent are against the change and 30 percent are in favor of it. Another 30 percent are unsure. Overall, 55 percent said they are unhappy about having less choice, while 40 percent said they will shop elsewhere if they don’t find their usual branded products on the shelves. Sixty percent said there are some branded products they could not go without.
Meanwhile, a consumer movement, yoquieroelegir.com (“I want to choose”), has been created to defend the presence of brands in retail stores. And Pascual, the leading milk brand, is airing a TV ad explaining that private labels’ cheaper prices are the result of a real quality compromise.
It’s too soon to know if the Ipsos research reveals a solid sign of private label resistance, but it seems clear that in spite of the downturn, brand value is still healthy in Spain.
Listening to the radio this weekend, I heard a commercial saying that Frito-Lay was adding 20 percent more product at no extra cost to bags of Fritos, Tostitos and its other snacks for a limited time. Interesting, I thought, but what happens when the promotion is over and Frito-Lay goes back to offering less to shoppers who are being conditioned to get more?
This is one of many efforts highlighted by Stuart Elliott in a Sunday New York Times article that showcased how food marketers from Kraft to French’s are asserting their value amid mounting competition from private labels.
To a greater or lesser extent, brands should always be asserting their price-worthiness. In a climate like this, however, when value messaging is necessarily more overt, brands have to find a value voice that’s consistent with who and what they’ve always been. How brands speak to consumers during hard times must align with their distinct position in the marketplace. Maintaining that distinction will make it easier for them to hold on to recession-weary consumers even after short-term promotions like Frito-Lay’s come to an end.
CarrefourSpain is countering rival supermarket chain Mercadona’s low prices by advertising its own price cuts with playful humor.
TV commercials present faux consumer associations that defend their right to buy cheaper products in times of crisis—in this spot, see the A.M.T.E.T.C.Q.C.R.M.N.S.V.E.S.G. (which translates as association of women who with the crisis want to take care of their clothes to keep being elegant and feel beautiful).
The companion Web site, diosloscriaellossejuntan.org (roughly, “birds of a feather flock together”), allows visitors to create their own tongue-in-cheek groups, such as A.M.C.G.V.A.N.P.R.H.C.G.C.F. (association of big-bottomed women who with the summer approaching don’t intend to give up ice cream as they know a big butt is a happy butt) or A.D.P.Q.E.S.U.R.L.L.P.L.M.Y.L. (association of people who always begin a new habit by Monday morning and drop it by Monday evening).
Counting on a very strong (and very cheap) private label brand, Mercadona, the leading Spanish grocery retailer, announced in January that it would drop underperforming products. Consumers are now the decision maker, and they vote with their purchases. Hundreds of products have disappeared from shelves—Mercadona trimmed the number of product lines it carries by 8 percent in late 2008—causing a shock to many brands’ sales.
As Food Business Review reports, some disgruntled customers feel this move is limiting their choice and forcing them into Mercadona’s private label (which is seeing a strong sales growth). Indeed, many smart shoppers are likely feeling much less smart now that they cannot choose between branded products and PL. Still, they’re benefiting—by lowering its costs, Mercadona has been able to cut prices. Savings aside, shelves certainly look a lot grayer without the colors of myriad brands.
Prague’s chain of Spar supermarkets has launched a special online tool to help consumers deal with the economic crisis. Consumers can print a new discount shopping voucher every day. They can also ask online consultants from the University of Economics in Prague where to invest money, whether or not to get a mortgage and other pressing financial questions.
Another attraction for money-saving consumers is a section called “SmartCounters,” where they can calculate how much electricity they save by using energy-efficient bulbs instead of traditional ones, how much water they save by taking a bath instead of a shower, etc. Interactive tools like these offer consumers not only valuable money-saving opportunities but also peace of mind.
This tailor-made offer applies not only to Spar customers but also to those who shop at the store’s competitors. And that’s not a bad target group at all.
“I have different supermarkets for my shopping; one for detergents, soaps and shampoos, and another one for food products such as oil, rice and sugar, since both product categories are cheaper in their specific supermarket,” according to one homemaker we interviewed as part of our qualitative AnxietyIndex research (download “AnxietyIndex: Straight from the Consumer” in the 
Counting on a very strong (and very cheap) private label brand, Mercadona, the leading Spanish grocery retailer, announced in January that it would drop underperforming products. Consumers are now the decision maker, and they vote with their purchases. Hundreds of products have disappeared from shelves—Mercadona trimmed the number of product lines it carries by 8 percent in late 2008—causing a shock to many brands’ sales.
