‘Wonderful’ Tactics Spur Super Sales for Paramount Farms

By Dale Buss

Paramount Farms has created its second hit brand in Wonderful Pistachios, and it is managing to generate new growth with its Pom Wonderful pomegranate juices nearly a decade after the brand set off a boom in “superfruit” beverages. And the company is relying heavily on in-store strategies for both achievements.

Los Angeles-based Paramount has worked with retailers to use both brands to harness new growth in the produce departments of U.S. supermarkets and mass merchandisers and, to a winning extent, to integrate in-store efforts with the out-sized presence of both Pom Wonderful and Wonderful Pistachios in all advertising outlets beyond the store.

“Our retail partners recognize how much growth we’ve brought to produce sections that weren’t there before,” Marc Seguin, vice president of marketing for Paramount Farms, told CPGmatters. “We sell in through produce versus selling in through the center store. Almost all of our distribution in traditional grocery stores is in the produce department, and we have displays outside produce with fairly high frequency, and we feel pretty good about it.

“The key for our brands is to connect the in-store action to what people see at home [in ads] and read about online, so they’re experiencing brands with many touch points whether they’re outside the store or inside. And when they’re inside the store, we need to make our brands easy to find.”

These days, Wonderful Pistachios enjoys a similar kind of sales momentum to what Pom Wonderful generated when it launched a decade ago. In just five years on the market, Wonderful Pistachios already have become a superstar brand, commandeering the No. 1 spot among snack nuts and also stepping up into sales-volume and brand-equity territory that previously was reserved for high-volume salty snacks. Wonderful Pistachios sales have roughly doubled in publicly measured retail outlets over the last year, meaning that the brand overall now likely exceeds $400 million in annual U.S. sales. It also is threatening to break into the top-ten-selling SKUs in the entire $12-billion-plus salty-snack category that traditionally has been completely dominated by various products fielded by Frito-Lay, a unit of PepsiCo, and previously hasn’t seen a serious competitor emerge from nuts – not even peanuts.

So far, the Wonderful Pistachios brand has been powered not only by in-store marketing efforts, of course, but also in general by  Paramount’s expertise, its heavy investment in a multi-year advertising campaign under the theme “Get ‘Crackin,” and by Americans’ ever-rising interest in nuts as a better-for-you snack category. And on February 3, the five-year-old Wonderful Pistachios brand will make the ultimate statement of its importance with its first-ever TV ad during the Super Bowl. The ad will feature Psy, the South Korean You Tube sensation, singing his "Gangnam Style" song with
special lyrics.

Going head-to-head with Frito-Lay’s Doritos and Tostitos brands of corn chips on America’s biggest advertising stage is a logical next step for Wonderful after its recent vault over all other competing brands and nut types. “We think the Super Bowl is a great place to reach people with clever advertising,” said Seguin. He promised that the spot – actually, a pair of 15-second ads for the brand – “will take things up a notch with a new twist,” although he said the ad would be “in line with our [‘Get Crackin’’] campaign theme.”

Wonderful Pistachios’ in-store tactics are an important part of its overall Super Bowl strategy. There already was a strong seasonal merchandising push for the brand as Christmas approached. Now, in January, Wonderful Pistachios is scheduled to appear in floor displays in 50,000 stores as part of a promotion tied to the Super Bowl ad.

“The Super Bowl already was our biggest season from a merchandising standpoint,” Seguin said. “Our retail partners also know how important the Super Bowl is and how committed we are to driving growth, as evidenced by our investment and marketing.”

In general, also, Wonderful Pistachios has continued to build on some of the same merchandising techniques that helped make sibling Pom Wonderful a success. Product placement in the produce department when possible is the most essential element of that formula. Seguin and his colleagues also are pressing this month to get Wonderful Pistachios stand-alone displays in the lobby areas of stores and next to checkouts.

“I’ll take display in the salty-snacks aisle, too, but if I had my ‘druthers, I would rather have consumers bump into pistachios first on the outer perimeter,” he said.

To underscore its independent and trailblazing approach to branding, the company continues to send out its 135 merchandise specialists nationwide in their own Toyota Prius models adorned with Wonderful Pistachios signage.

“We’re one of the few brands in produce with our own merchandisers,” Seguin maintained. “They’re out there every day.”

As for Pom Wonderful, it is finding that the simple move of offering a smaller package and lower price point for its 100% pomegranate-juice variety – along with an emphasis on in-store marketing efforts – is putting a big charge into sales.
Seguin observed that Pom Wonderful already created a phenomenon with retailers when it began demanding refrigerated shelf space in the produce department to display its uniquely shaped bottles of precious pomegranate juice.

“We put our products where consumers can find them,” Seguin explained. “We work with our retail partners to make sure it’s out there on a reasonable scale. One thing we’ve struggled with in the produce department is that the juice category is a very chaotic space. The great thing we have going for us is the iconic bottle, which is easy to find on the shelf – but only if they give us enough real estate.”

Yet after sales had stagnated for a few years, especially during the Great Recession, Pom Wonderful launched its 8-oz. SKU in May. Subsequently, sales of the Pom Wonderful 100% pomegranate-juice line –  including the new, smaller bottle – surged by nearly 13% for the 52 weeks ended December 2, to more than $51 million, in outlets measured by SymphonyIRI, while sales of each of the other main varieties of Pom Wonderful juice declined.

At retail prices ranging from $4 to $5 for a 16-oz. bottle, Pom Wonderful has remained something of a stretch for many consumers, especially when other beverages that are broadly considered “better-for-you” can sell for half that amount. That’s apparently why the 8-oz. 100% juice SKU has been such a hit.

“It’s priced every day at retail at $1.99, and some stores have been selling it at three for the price of two or even 10 for $10,” Seguin enthused. “This allowed us to get to a lower price point to get new people in to try [Pom Wonderful] for the first time and realize they like it. It’s driving up household penetration, and people are coming back to the category and buying our larger bottle, too. This makes it easy for them to try and taste.”

Again, as with Wonderful Pistachios, partnerships with retailers have been key to the sales revival the new bottle size has brought to Pom Wonderful.

So, for instance, Pom Wonderful has “been able to get retailers to give us incremental space for the 8 oz., such as in a cold case with cut fruit or in a rolling refrigerated or iced bin, in addition to its everyday place in the produce section next to the traditional offerings. And we’ve been seeing huge sales increases when we do that.”

Pom Wonderful also has been pushing to get the 8-oz. bottle into coolers near checkout stands. “It makes for a great grab-and-go- item there,” Seguin said. “It’s something we’re really trying to work on.”

At the same time, in an effort to surround American consumes with the brand, Pom continues to leverage every marketing tactic, including social media, public relations, and coupons in the increasingly endangered Sunday newspaper.

“We try to tie retail partners into as much of that as we can so that there are in-store promotions that are tied to what people see in their homes, and consumers connect the dots,” Seguin said.

Both brands’ approach to in-store marketing – and to all of their marketing – stems from the philosophy that is basic to Paramount Farms, which is owned by a couple who have become billionaires by virtue of their success, Lynda and Stewart Resnick.

“Our primary strategy is to focus on what makes you unique, what gives you a unique selling proposition, and we stay true to that with simple communication both in the store and outside the store,” Seguin said. “If you do that, it’s easy for consumers to understand. And if they like your message, you’re going to have a winner.”

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                                                                               January 2013
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