Food and drink marketing used to be simple. Consumers would write a shopping list; marketers would aim to get their brands on it.
How things have changed. Shoppers are now scrutinising products closer than ever, both in-store and online, to ensure they deliver on everything from price to ethics.
Meanwhile, supermarkets are seeing strong sales and heightened consumer trust, which have boosted their own-brand goods. In a nutshell, there has never been a more challenging time to be a food and drink marketer.
With these issues in mind, Marketing and Yahoo! invited marketers from a range of food and drink brands to take part in a round table at the unique Old Laundry venue in London. Experts from the fields of advertising, online and design joined them.
Arguably, the major talking points of 2009 have been regulatory pressure on the advertising of products that are high in fat, sugar and salt, and the debate over nutritional labelling on packaging.
Mike Hughes, director general of ISBA, points out that the UK is the most regulated market in Europe, with the exception of Scandinavia, but praises marketers for using self-regulation.
‘Marketers have shown a real fleetness of foot in anticipating and dealing with restrictions,' he says. ‘The assumption out there with those criticising food companies is that they are trying to get away with everything until regulations are imposed. But, the smart food companies have anticipated the need. The reduction in advertising aimed at children has come very much from individual brands, so regulation is often redundant by the time it comes in.'
Ben Pearman, marketing director of Birds Eye, agrees. ‘I find our own internal legislative points of view stiffer than some of the external ones. We have a lot of fights internally about what we can say. It depends how defensive you think you need to be,' he says.
Bruno Gruwez, marketing director, UK, at PepsiCo, says: ‘You might be able to sell a few more cases in the short term, but if you look at it from a strategic point of view, it is just doing the right thing and you will benefit in the long term.'
Indeed, there is an advantage in addressing regulatory threats head-on, according to Jon Goldstone, marketing director at Hovis. He cites his previous brand Walkers, which was one of the first to put a carbon footprint label on its packaging.
‘The commercial advantage often comes from being first mover rather than a laggard,' says Goldstone. ‘There is a huge brand advantage from leading, rather than being stand-offish and waiting for the worst to happen.'
However, while big brands must behave in the correct way or face consumer condemnation, Gruwez criticises smaller brands that ‘get away with murder'. ‘Bigger companies catch a lot of wind, and all the eyes are on us,' he says. ‘If we do something wrong, we get criticised. You will always have one-day wonders that will do whatever they can, and that damages the entire industry and becomes an excuse to hit us with a massive hammer.'
Marcus Waley-Cohen, co-founder of Firefly Tonics, says there is a lack of clarity in regulation covering the health claims of functional drinks. He adds: ‘We rely on the bigger companies to set a precedent about what can and can't be said.'
During an economic downturn, brand loyalty becomes key. Any product that scales back its marketing efforts risks losing sales and market share. Words such as trust and reliability have risen up the consumer value agenda.
When asked what they believe consumers are now looking for, Charlotte Borger, head of communications at Divine Chocolate, says it boils down to ‘having a fantastic product, customer relations and availability'.
Hovis' Goldstone agrees that quality remains the number-one priority, pointing out how rival Warburtons built market leadership on the back of ‘obsession with quality' and the resulting word of mouth.
He adds: ‘Before we spent a penny on relaunching Hovis, getting blind-taste advantage [over] Warburtons was our main focus. Until we got there we didn't spend a penny on anything else because it was our foundation.'
Any flaws in a product will quickly appear online, points out Laurie Kirschner, category director for FMCG at Yahoo! ‘People have the ability to get more information now, not just believe what the advertising is saying. They can decide if they think a message is true,' she says. ‘I don't know that people are aware of the power that consumers have these days to alter the purchase process and influence what goes on people's shopping list. It is very important to listen to what people are saying online.'
It is said that up to 70% of purchasing decisions are made in-store, so manufacturers go to great lengths to understand the manner in which consumers shop, tracking their journey around stores and their reaction to different fixtures.
Goldstone says the bread market is characterised by high brand loyalty, which means that people tend to shop the aisle on ‘auto-pilot'. He says Hovis has recorded growth of 20% this year, following a packaging redesign that aimed to ‘break into people's consciousness'. The overhauled pack, which makes the bread more visible, is used across the brand's variants, and aims to give Hovis a block presence on the shelf.
Andy Knowles, chief executive of design agency Jones Knowles Ritchie, says packaging can grab attention but it generates only initial trial. ‘Disruptive packaging often can get you noticed. The trick is to get chosen year after year,' he adds.
In the frozen-food market, Birds Eye faces a different challenge, according to Pearman. ‘Frozen is not an area of the store that people spend much time in, and the market is very fragmented, so you have multiple categories
all sitting side by side with own-label and different competitors,' he says. ‘Brand block and signage is critical. You can't rely on packaging to do your advertising for you. In the first instance, they have got to find it.'
Chocolate presents a unique marketing challenge. Borger admits: ‘You don't put chocolate on your shopping list. It's an impulse buy.' Her belief is that chocolate brands need at least four SKUs before shoppers notice them. ‘Otherwise we need to send people on a mission to find us,' she says.
The emergence of the internet and its power to influence sales and brand reputation, coupled with a fragmented TV audience, has led some to question whether TV will remain the linchpin of advertising campaigns. However, Pearman says it remains ‘massively important' to Birds Eye, which has sponsored ITV's Saturday Night Takeaway.
‘Most people who buy Birds Eye tend to watch a lot of TV,' he says. ‘They tend to be hard-working British mums on low to middle incomes and TV is critical.'
He adds: ‘We have been far more deliberate, given the level of deflation in TV, pushing much more money into it. We have probably been less creative; we haven't had the 360-degree campaigns that most marketers aspire to, but we have had some fantastic efficiency and we have made it more of a linchpin than ever before, just driven by the economics.'
Goldstone cites the renaissance of Saturday-night TV, through programmes such as The X Factor. ‘TV is resurgent. To be part of that is pretty fantastic in terms of getting emotional connection. It is integral to us,' he says.
Despite this, online is facilitating conversation around brands, and marketers and their agencies must work hard to keep up.
Guy Beresiner, head of commercial development at Yahoo!, says the ability to get instant feedback is key. ‘People talk about their lives online, and FMCG is central to their lives,' he adds. Yahoo!'s Retail Revolution Research, conducted this year, revealed that online display and TV ads enjoy equal weight in influencing consumer purchasing decisions (27% each compared with 24% for press ads). More than a third (41%) of the consumers questioned by Yahoo! felt their decisions had been influenced by offline and online media.
Gruwez says: ‘The rules of the game are changing. Historically, your share of spend dictated your share of voice, and your share of voice ultimately dictated your share of market. That link is broken now. I don't believe that in our category you need to win the share of voice game anymore, it is about share of mind.'
He adds: ‘The most important media channel for me is people. If they want to make a remark about your brand, that makes you part of the conversation. You don't need to spend huge amounts of money anymore.'
The winners will be brands that understand not just their consumers and the way they shop, but also the myriad ways that brand conversations emerge and evolve.
Round table participants:
- Richard Abbott: deputy editor Marketing
- Guy Beresiner: head of commercial development Yahoo!
- Charlotte Borger: head of communications Divine Chocolate
- Chadwick Delaney: sales director Justerini & Brooks
- Jon Goldstone: marketing director Hovis
- Bruno Gruwez: marketing director, UK PepsiCo
- Mike Hughes: director-general ISBA
- Laurie Kirschner: category director FMCG Yahoo!
- Andy Knowles: chief executive Jones Knowles Ritchie
- Ben Pearman: marketing director Birds Eye
- Peter Sage: managing director Carter London
- Marcus Waley-Cohen: co-founder Firefly Tonics