The secret behind mega-brands
American consumers that they continue to dominate and shape the
food industry, despite often being at odds with the USDA's Dietary
Guidelines, according to an expert in nutrition science.
The key to their success, says Dr James Tillotson, professor at the Friedman School of Nutrition Science and Policy at Tufts University, is that they have earned consumer loyalty through a long tradition of trial-and-error comparison shopping.
Writing in a two-part series in Nutrition Today published earlier this year, Dr Tillotson claims that mega-brands, such as Campbell's soup, Kellogg's Corn Flakes and Oreo cookies, have developed a strong consumer following based on their known qualities and their consistency in delivering what is expected of them.
And this often does not include nutritional benefits.
Indeed, Dr Tillotson claims that former members of the committees that drafted the Dietary Guidelines for Americans admitted to him that mega-food brands have more diet power with Americans than the Guidelines.
"The US Dietary Guidelines are a significant accomplishment in health science, but one has to question their effectiveness at shaping Americans' diets in their present form and implementation," he quotes them as saying.
According to Dr Tillotson, this is becuase the Guidelines "are long on lecturing what to eat, but short on telling how and limiting in their motivation."
"Without the same marketing attributes, strategy and budget, how can the Dietary Guidelines compete?" he adds.
In contrast, mega-brands often offer "compelling associations", as well as "emotional and psychological product inducements", and have become a part of the American eating culture.
Also known as 'fortress brands' because of their durability in defending their market share, mega-brands have become almost impossible to dislodge, says Dr Tillotson.
This is because of a number of consumer 'hooks'. Mega-brands have a long-term safety record, they pass people's taste-tests, and they save consumers the effort of debating which product to opt for.
And on the emotional side, these products have been passed down through generations of consumers. Examples include Heinz Tomato Ketchup, launched in 1875, Philadelphia Cream Cheese, launched in 1880, and Coca-Cola, launched in 1886.
But this consumer loyalty has not developed unaided.
Successful advertising and promotion continues to play an important role, with many food companies opting to drop or sell their lesser brands in order to focus marketing efforts on their more profitable major brands.
Dr Tillotson also describes the role that supermarkets play in perpetuating the dominance of mega-brands in consumers' diets.
"In the razor-thin profit business of supermarkets, profitability depends on high sales per unit of shelf space. With a finite amount of shelf space and thousands of brands available, the chains favor the strongly consumer-wanted high-volume selling products," he says.
"It is more efficient to stock one or two mega-brands with their high sales velocity off the shelf than a number of lesser brands that are slow sellers. In this Darwinian process, mega-brands are the winners."
Indeed, the strength of these brands is so established that they have also played a role in shaping the direction of the food industry.
Food companies, particularly the larger ones, strive to increase their mega-brand numbers by way of mergers and acquisitions, as well as trying to develop new ones. This motivation to acquire stronger brands has been one of the driving factors behind the industry's ongoing consolidation into fewer, but larger, companies, says Dr Tillotson.
But an established name, a new concept and strong marketing capital are often not sufficient to create new mega-brands, he says, giving the example of the recent attempt of major food manufacturers to sell frozen bowl-meals, including rice, noodle and pasta products.
Nestlé, ConAgra, Heinz and Masterfoods all entered this new category in the hope of establishing mega-brands. From 1998 to 2000, these companies introduced 71 new frozen bowl entreés to the market, promoted with strong advertising. Indeed, advertising for Nestlé and Masterfoods Uncle Ben frozen bowls alone reached $40mn in 2002, says Dr Tillotson.
But although the category achieved $200mn in sales by 2000, consumers started to turn away from the products, resulting in sales falling to around $50mn last year.
The reason these products failed as mega-brands, he says, is that although they were propped up by advertising, they never fully entered the routines and consciousness of American consumers.
So while products that provide taste, quality and convenience can generally be assumed to succeed, only those that become a part of the nation's eating habits and capture consumers through emotional hooks can hope to become the mega-brands of the future.
