Major Marketers Collaborate with Kroger
To Simplify Shopping for Beverages, Snacks
By Dale Buss
Progressive retailers are always trying to simplify shopping for groceries in the center store of supermarkets. New concepts are often carried out with maketers of the products in the categories being worked on. This collaborative approach has resulted in some creative changes in stores around the country.
One of the latest examples involves Kroger testing a new display idea for two of the chain’s most popular categories: beverages and snacks. The idea behind the former initiative is to create a handy destination that brings all the beverages in the store together in a four-aisle section where signage and color codes help shoppers select their drinks quickly and easily. The Cincinnati-based retailing giant is also trying something similar in the snacks aisle of some stores.
Ocean Spray has joined Dr Pepper Snapple Group, Coca-Cola, Gatorade, Lipton and Tropicana as major participants in the Refreshment Center concept. And while Steve Logan, sales manager of the Kroger team for Lakeville-Middleboro, Mass.-based Ocean Spray, said it’s too early to gauge sales results from the initiative, he emphasized that it’s only the latest innovation by a chain that has been a very satisfying customer lately.
Ocean Spray sales at Kroger stores overall were up by more than 10% for the year ended in May compared with a year earlier. “I attribute a lot of that to Kroger’s approach by trying projects like this,” Logan told CPGmatters.com. “Our business at Kroger has been far exceeding what we do at all other retailers except for one or two others. We’ve doubled our business in four years at Kroger.”
According to Logan, Kroger is always trying to find more consumer insights. The chain is always working on different concepts, ideas and theories to make shopping easier for consumers.
“One of the biggest reasons is they’re willing to innovate,” he said. “They don’t like the status quo. They’re always trying to figure out what the consumer is doing in their stores, why consumers do shop at Kroger and why they don’t. Their challenge is to come up with different ways of making the shopping experience easier for their consumers. They truly believe if they think of the customer first, then everything else will fall in line behind that – or the customer may consider going somewhere else.”
Kroger launched the Refreshment Center concept last winter at an unspecified number of its roughly 2,500 supermarkets in 31 states. Kroger declined comment for this story, but the approach behind the concept designed by marketing agency LG&P is straightforward.
Gondolas are reserved for specific categories that are identified by color: green for Ocean Spray and other juices, red for carbonated beverages, blue for water and sports drinks. Color-coded floor strips and other indicators help identify the categories. In-line headers carry lifestyle images and appropriate phrases. The juice headers, for example, say “healthy, fruity, flavorful,” while sports drinks “restore, refuel, replenish.”
“The color coding makes Refreshment Center visually appealing, and it was the most obvious way to go,” said Logan of Ocean Spray. “And we were all for the informational wording. Where waters wouldn’t necessarily need that kind of thing, we thought, ‘Let’s tell the consumer at point of purchase what juice is all about.’ Our brand is all about tasting good and being good for you, so we wanted to differentiate it from, say, coffee. And Kroger wanted to make it simple, not complicated. They didn’t want the categories to argue.”
Products from Ocean Spray and other brands including PepsiCo’s Lipton and Tropicana are housed in semi-permanent floor stands. Outer gondolas span the length of the department in the stores experimenting with the Refreshment Center housing carbonated beverages and water, while the interior aisles feature shorter gondolas, two of which run into coolers devoted to energy drinks and New Age beverages including enhanced waters and teas. End caps include permanent three-sided displays from Coca-Cola and PepsiCo’s Gatorade. Generic displays showcase beverage brands as “Weekly Features.”
Logan believes bringing all beverages together in a Refreshment Center makes sense. “Traditionally, they’re scattered throughout the store, but this puts all the choices in one area for shoppers. And there are high levels of relationship among all these beverages. Consumers don’t necessarily have a switching mentality when they enter the area; you’d be surprised how highly complementary the relationships are among different types of beverages,” he said.
Of course, Logan would have to be concerned about sales of Kroger’s private-label cranberry and other juices, which clearly cannibalize Ocean Spray brands. “We let consumers decide,” he said. “We’re the ones who do all the advertising in the category and educate consumers about cranberries. But during certain economic times they may choose to buy a [private-label] item for a different reason, either price – or it’s on sale.”
Kroger also has been experimenting with a similar aisle-arrangement program in the snack aisle, using color-coded graphics to identify six distinct categories, such as orange for “Multi-Pack” and green for “Sensible Snacks.” PepsiCo’s Frito-Lay unit gets special attention in this initiative, with aisle signage calling outs its specific product lines. Executives of Dallas-based Frito-Lay weren’t available for comment.
Kroger’s willingness to experiment with concepts such as the Refreshment Center, explains Ocean Spray’s Logan, stems at least in part from its robust partnership with Dunnhumby, a data-mining firm whose U.S. headquarters is in Cincinnati. Their partnership also brings in CPG companies including Ocean Spray.
“We bought the rights to mine their data for insights about juice and look for relationships between juice and other categories in the store, and the relationships between our brands and other brands,” Logan reported. “We’re looking for anything that may give us alternative ways of making the shopping experience better for consumers.”
Kraft Foods Scores with
By Dale Buss
In the low-margin grocery business, every one percent – of anything – counts for a lot. By that measure, Kraft Foods’ new strategy for deploying sales reps in stores has been a big success. Called Wall-to-Wall, it has single-handedly boosted sales by more than one percent at the 16,000 stores where Kraft has rolled it out.
In fact, after only two years into the program in which individual reps now handle more brands and fewer stores than before, one top Kraft executive is ready to declare Wall-to-Wall a key piece of the company’s retailing arsenal.
“It’s become an important piece of our overall strategy,” Darryl Brown, Kraft’s senior vice president of retail sales, told CPGmatters. “We’re happy with our progress, and now we’re going to focus on optimizing it. Wall-to-Wall is a weapon that we can use to help the business long-term.
Wall-to-Wall is as simple as it is effective. Basically, under Wall-to-Wall, a Kraft sales rep can be at a store every day and is responsible for almost the entire portfolio of Kraft products, ranging from Oreo cookies to Kraft salad dressings to Oscar Mayer bacon. “The beauty of it is that reps are in the stores three to seven days a week, so they’re truly able to establish relationships in the stores that enable them to drive incremental sales,” Brown explained.
Before Wall-to-Wall, Kraft maintained three separate organizations of store reps. One group mainly handled Nabisco cookie and snack products and would be in any given store three to five times a week. The second group handled the rest of Kraft’s dry-goods portfolio and were in stores only every two to four weeks. “It’s hard to sell incrementally when you’re only showing up every 30 days,” Brown noted.
So, about two years ago, Kraft collapsed the barriers between those two groups and created a new Wall-to-Wall organization that now handles more than half of the total of 30,000 stores with which Kraft does business. (Kraft’s third group of reps still represents Kraft’s frozen-pizza brands separately.)
“We are in every aisle, and Wall-to-Wall was an opportunity to give one face to the [retailer] customer, so they could relate to ‘one Kraft’ coming in,” Brown said. “Once we gave them one face to go to, the intent was to have that one person become almost a consultant to store management to help them piece together their product portfolio.”
Immediately, Kraft noticed that the Wall-to-Wall reorganization provided a big lift in three areas: easing out-of-stock situations, enhancing special in-store promotions, and ensuring overall optimization of the merchandising of Kraft brands in customer-specific ways.
“Our Number One issue is out-of-stocks,” Brown said. “But now because we’re in stores more frequently, we’re able to assist in that area.”
In promotions, he said, Wall-to-Wall reps “can more easily partner with private-label or other [brand] partners in the store to create in-store excitement.”
For example, during a six-week period spanning late summer and early fall last year, Wall-to-Wall reps worked with a huge account – one can infer it was Wal-Mart Stores, from Brown’s remarks – to set up a special aisle filled with Kraft brands. Sections were themed “Breakfast,” “Lunch,” “Dinner” and “Snacking” and clustered Kraft products appropriately as well as complementary private-label and other brands.
“For instance, with ‘Dinner,’ we don’t have a brand that would provide a protein at the center of the plate, so we leveraged in-store brands and competitors to do that,” Brown explained. Kraft also worked with the retailer to boost the presence of its brands in other areas of the store during that period – ably honchoed by Wall-to-Wall reps and assisted by other Kraft reps who provided merchandising labor.
Overall, the Wall-to-Wall reorganization has allowed Kraft to “optimize our in-store locations as far as display activity is concerned, and leveraging our brands across the entire store,” Brown said. Kraft is able “to help retailers get better compliance on advertising activity that supports our brands,” he said.
Of course, the progress driven by Wall-to-Wall has come at a price: higher labor costs. For one thing, Kraft has boosted compensation for reps who enter the Wall-to-Wall program because of the richer mix of skills and higher levels of training required for them to become successful.
“The old warehouse reps were really focused on selling, not as much on merchandising,” Brown said. “Now we need people who can understand the complexities of all our product categories and bring them to life to make them sell. We’ve got them representing multiple categories and multiple meal-usage occasions that we weren’t able to bring to life before.”
Both new and existing Kraft sales reps have been drafted for Wall-to-Wall. “We’ve done a very nice job of being able to source new talent,” Brown said. “But most importantly, we’ve been investing significant dollars in upgrading our current set of talent in classroom training and on-the-job training to get the salespeople up to speed.”
Technology is being upgraded as well. Kraft is providing Wall-to-Wall reps with new tablet PCs that allow them to make fancy presentations to store managers on-site. “They can sell on the fly,” Brown said. “They can walk up and down the aisles and bring their data to life with graphics and stories on the tablets. These reps need to be able to understand the categories, leverage the technology and talk to store reps – all in a minute or two.”
So far, so good. Wall-to-Wall has been consistently boosting sales by one percent or more across locations where Kraft has implemented it.
“And it’s even more strategic than that, because Wall-to-Wall is focused on businesses that mean the most to our portfolio,” Brown said. “We’ve delivered on expectations. The company has been very happy with the contribution we’re making.”
BrightRoll Launches Video Impact
To Enhance Retail Sales
By Lynne Cooke
BrightRoll, a branded video advertising network, has introduced a new service aimed at helping CPG marketers optimize the impact of online video advertising on retail sales.
Called Video Impact, the service will measure the effect of campaigns on the BrightRoll network on offline purchasing intent and behavior, and enable advertisers to optimize the delivery of campaigns based on this data.
A company survey found that most advertisers (87%) have not performed any in-house research around the efficacy of online video. Among those who would like to conduct in-house research, 39% would explore the impact of online video advertising on offline purchase behavior, 36% would explore changes in purchase intent / brand lift, and 25% would measure efficacy vs. television advertising.
Video Impact looks to respond to the growing demand for reliable and trustworthy ways to gauge the return on investment (ROI) for CPG marketers. Leveraging BrightRoll’s targeting and optimization capabilities and Nielsen’s measurement tools as the foundation for the offering, Video Impact is the first solution to give online video advertisers the ability to analyze the behavior of customers exposed to their campaigns, and then optimize the delivery of campaigns based on this data. In the process, engagement levels, behavioral targeting capabilities and ROI are closely tracked and analyzed.
“There is a big difference between measuring video efficacy with soft metrics, like brand recall or lift, and hard metrics, such as actual offline sales,” said Tod Sacerdoti, CEO and co-founder of the company. “BrightRoll believes true video efficacy is measured by return on investment, which equates to consumers actually making purchase decisions, and we're enthusiastic that Video Impact will be advancing industry research in this area.”
“Online video advertising is clearly a segment that is growing quickly and gaining acceptance amongst CPG companies,” said Corey Jeffery, vice president of advertising solutions at Nielsen Online. “That said, some question its efficacy. We hope that Video Impact will leverage our technology to help CPG companies better understand the role that online video campaigns have on consumer buying decisions.
In leveraging Nielsen’s proprietary NetEffect service, Video Impact can anonymously track panel participants from the moment they view an online video ad across any site in the BrightRoll publisher network, all the way through to their offline CPG purchase activity. The results of the study can shed light on the driving factors of sales, including ad creatives, ad units, site placements, day parts, day of week and geographic location.
Baseball’s Mega-Sampling Event
Sampling and baseball are a hit for PromoWorks, provider of integrated marketing services, sampling events and promotions, and Designated Promotional Affiliate of the Chicago Cubs.
PromoWorks’ MobileWorks Samplers distributed over 60,000 product samples and coupons to baseball fans at the June 19 Cubs vs. Indians game. Featured sponsors of this mega-sampling event were grocery retailer Jewel-Osco and several consumer packaged goods manufacturers: Jay’s Potato Chips; Kellogg’s Special K Multi-Grain Crackers, and Merkts Cheese Spreads. Additionally, the first 10,000 fans through the gates received a Chicago Cubs BBQ Apron sponsored by PromoWorks.
PromoWorks recently received the Better Business Bureau Torch Award for Marketplace Ethics. Crain’s has ranked PromoWorks among Chicago’s Largest Privately Held Companies for the last five years
Meet the Food Brokers
Independent Food Broker members of NARMS International concluded a successful 6th Annual Top to Top Executive Business Conference in Chicago with over 250 attendees from across North America representing 50 member companies and jointly attended by another 50 manufacturer (supplier) principals.
Highlights in the three-day meeting included a “State of the IFBA” update by Jim Hall, IFBA Chair and panel presentation “The Hispanic Market: Where it Was, Where it is Today and Where it Will Be Tomorrow” hosted by Chris del Rey, President of Del Rey Marketing of Commerce, Calif., a leading grass roots multi-cultural marketing and promotion company specializing in the Latino consumer market.