Rebranding the Bagel

MOUNTAIN LAKES, N.J. (AP) - The talking grandmother-shaped syrup
bottle is back on television ads for Mrs. Butterworth's. The
bespectacled Vlasic stork is hawking pickles again, too.
Boxes of Swanson TV dinners this year went back to their
original, teal color scheme and portion size has been reduced.
All these once-heralded labels have come under the ownership of
Mountain Lakes, N.J.-based Pinnacle Foods Corp., whose strategy is
to purchase tired but well-known packaged food brands like Lender's
Bagels, Vlasic Pickles and Mrs. Butterworth's and reintroduce them,
adding modern-day twists.
"We are a company of iconic brands that are very much part of
the fabric of Americana, each of which has some great history and
heritage," said Jeffrey Ansell, Pinnacle's chief executive
officer.
Consumers know the products from ad campaigns of decades ago,
and the company is trying to capitalize on that recognition, he
said.
But there's a challenge: The American diet has changed. Besides
fried chicken dinners and breakfast biscuits, people want healthy
options, prompting Pinnacle to add new products.
As a result, Hungry-Man frozen dinners will offer new grilled
entrees next year and Lender's has introduced a new whole wheat
variety.
"We have to adjust our new product approach to reflect these
trends," Ansell said.
He said consumers responded well to Log Cabin's introduction
this year of a 100 percent-pure maple syrup product in an
old-fashioned, Vermont-style country jug.
"It's important that new ideas match the essence of the brand,
and what users of the brand respond favorably to," Ansell said.
He said the company's net sales are up nearly 4 percent so far
this year.
"We are encouraged by our improving sales trend, yet we are
still early in our strategic shift toward increased consumer
marketing, which began in 2007," he said.
Relying on nostalgia isn't a bad way to generate sales,
especially with Baby Boomers, said Marcia Mogelonsky, an analyst
with Chicago-based market research firm Mintel International Group.
"The basic strategy to revive old brands is never a bad one if
the old ones were healthy and had good sales," she said. "A lot
of Boomers probably missed those brands."
Many of the company's labels have been acquired from other
companies where they really didn't fit. Pinnacle went through its
own acquisition this year when the private equity firm Blackstone
Group purchased it in February for $2.16 billion.
Armour's canned meats didn't really match with Dial Soap. Duncan
Hines baking mixes wasn't a natural fit for Procter & Gamble Co.
"A company like P&G, which owns a bazillion brands, didn't have
time to baby-sit, no time or energy to take care of all these
little brands," Mogelonsky said. "They (Pinnacle) adopt orphan
brands that have not really fallen on hard times, but have been
eclipsed by newer brands."
Pinnacle takes the latent equity in the label and makes it
relevant to customers today, said Andy Reichgut, the company's vice
president of marketing.
Eric Kastel, an associate professor at the Culinary Institute of
America, said consumers do latch on to the old, and a healthier
product would encourage them to return.
"In general, the American public is getting more health
conscious about everything," he said.
Pinnacle added whole grain options to Aunt Jemima's frozen
breakfast items like pancakes and french toast and a whole wheat
flavor to Lender's selection of frozen and refrigerated bagels.
It's also moving Duncan Hines to the freezer section for the
time-starved baker. Instead of needing an egg and a mixing bowl,
brownies go right into the oven.
The strategy with Lender's is to promote the bagel as a healthy
food that can be eaten at any time during the day, said Ray
O'Brien, the label's vice president. He said the brand, now in its
80th year, previously was losing sales, nearly a double-digit
decline.
"What we're trying to do is take the ... Lender's name, and see
how we can rekindle it and make it as contemporary and relevant for
today," he said. "Something you might have had years ago is still
relevant for today."
He said sales were about $100 million last year, up 5 percent.
Pinnacle is spending about $25 million this year to rebrand the
label. Pinnacle acquired it in 2004 from the bankrupt Aurora Foods,
which had purchased Lender's from Kellogg Co. in 1999.
O'Brien said the company wants to emphasize its history, too.
Polish immigrant Harry Lender opened a bagel shop in 1927 in West
Haven, Conn., and takes credit for introducing the bagel to the
American diet. Supermarkets began selling them in 1955.
Once limited to Eastern European Jews in large metropolitan
cities, the bagel is now a ubiquitous bread product, sold by large
chains like Starbucks and Panera Bread, and even bagel chain stores
have emerged.
Still, some bagel fans in New York City said they'd pick any
fresh bread product over a Lender's bagel.
"If I'm in Wisconsin, I might take the Lender's," said Peg
Munves, 53, shopping at a Fairway grocery store in New York.
"Living in New York, I have some options."
Around the country, Lender's is a supermarket staple, and its
primary market is older adults and households with children.
The new whole wheat flavor doesn't appeal to Bonnie Pershin, 35,
who eats a Lender's egg bagel "with a schmear" at least three
times per week for breakfast. But as the mother of a 6-year-old
son, she would favor organic maple syrup instead of Mrs.
Butterworth's or other brands.
"I absolutely remember the bottle," said Pershin, shopping in
a suburban Chicago grocery store. "If you have to put something on
the waffle or pancake, I'd rather have my kid have 100 percent
maple syrup than five or six different ingredients."
But the family is sold on Vlasic pickles, a 66-year-old brand,
partly because of its famous stork.
"We buy it because my son sees the commercial, and they have
more crunch," she said. "I remember the commercial."
Another shopper, 41-year-old Kristine Kent, said she is glad to
hear that Hungry-Man would offer a grilled variety because her
daughter likes to eat the frozen entrees.
"If you're buying a frozen meal, you've probably resigned
yourself to the fact that it's probably not great for you," said
Kent.