Delighting the Consumer
October 1, 2007
Delighting the Consumer
By Tom Wray, Associate Editor
The “new” Oscar Mayer stays ahead of its competition the same way it has for decades — by meeting consumer demand.
Its jingles are sung by almost every schoolchild (and many adults, for that matter). Its Wienermobile is recognizable worldwide. Its brand is an iconic part of American culture.
Recognition is part of the value of Oscar Mayer — a value of which Tim Cofer, senior vice president and general manager of this division of Kraft Foods, Inc., is very aware.
“There’s no question, whether it’s the Oscar Mayer logo itself, whether it’s the Wienermobile, or our jingles, this is a part of Americana,” Cofer explains. “These are really brands and icons and symbols that are close to American consumers’ hearts.”
Cofer should know. The majority of his time with parent company Kraft has been with Oscar Mayer. His history with the company goes back 15 years, starting with the Oscar Mayer plant in Madison, Wis. He worked in a variety of positions for the company, gradually gaining more responsibility in areas such as marketing, strategy and general management for the whole range of Oscar Mayer products.
Then, he spent a few years handling Kraft’s chocolate business in the European Union. Cofer says that working in Europe gave him the opportunity to hone his listening skills, learning what the consumers want from the products they buy.
“Chocolate is a big business [in the United States] for Kraft, but in Europe it’s a multibillion-dollar business,” he says. “Going to a place where I didn’t have the same cultural background forced me to dive deep into consumer insights and understand what consumers need and, again, how the Kraft brands can address that with marketing and innovation,” Cofer explains.
Letting the consumer lead
Cofer describes his personal management style as positive, and he prides himself on the belief that the business should be led by those closest to the customer.
Cofer explains that his responsibility at Oscar Mayer is to set the strategy and goal for the company and then let established business teams assigned to the categories get the job done.
Further, Cofer’s mission as the head of Oscar Mayer is focused on those consumers. He wants the company to continue to roll out products based on consumers’ desires. Dating back to its founding nearly 124 years ago, Oscar Mayer’s reputation has been built upon its cold cuts and hot dogs, two products consumers have clearly associated with the brand. Today, however, Cofer and the people at Oscar Mayer are working to keep the company relevant to the demands of 21st-century consumers.
“What’s very exciting about Oscar Mayer today is, we’re not your mother’s Oscar Mayer anymore,” he says.
One example is the “new” Oscar Mayer is the company’s Deli Shaved Meats product. According to Oscar Mayer, it already leads the general cold-cut category, a $4 billion segment. However, the market for packaged cold cuts is fully mature and, in Cofer’s words, “sluggish.”
When Oscar Mayer took a step back to look at the whole market, Cofer says the company found the deli sliced lunchmeat market is equally large. Consumers view the deli meat segment as the gold standard for cold cuts because of a perception of freshness, quality and the ability to customize what they get. Oscar Mayer took this information and its own reputation to develop its line of shaved meats. The products come in a resealable, transparent tub.
“Today, it is over $300 million in sales, and we lead the category — we have the fastest moving products in the category,” Cofer says. “And we continue to bring great innovation with new flavors and sizes and forms.”
The development of products such as Deli Shaved Meats comes from a consistent understanding of consumer demand, recognition of unmet need and/or dissatisfaction, and knowledge of how to delight the consumer by reframing the category and bringing in benefits from other categories.
Another example of how Oscar Mayer translates this line of thinking into innovative new products are Oscar Mayer’s latest entries in the bacon segment.
“What we’ve been able to do here is really listen to our consumers in terms of [dissatisfaction] with bacon,” he says. Case in point, Oscar Mayer, through consumer opinion and in-home usage surveys, found out that people loved Oscar Mayer’s standard bacon products. They liked the quality, consistency and attributes such as natural smoking. However, consumers did not like the packaging, which were said to be hard to open, messy and inconvenient because they couldn’t be resealed.
The company’s response to these insights was the Simple Snap reclosable tray, very similar to what the company uses for the Deli Shaved Meats. Cofer believes it to be one of the biggest innovations in the bacon category since sliced bacon. The consumer is now able to easily open the package, take out the number of slices they need and reseal the package for later.
“We’re thinking beyond just prepackaged cold cuts and reframing it to a much broader array and then sourcing those as drivers of growth to really innovate the brand,” he says.
The company has continued to capitalize on its brand awareness by unveiling products that are as relevant for today’s consumers as hot dogs and bologna were for consumers 50 years ago.
Take Oscar Mayer’s new Deli Creations sandwiches, which debuted this year, for example. Deli Creations are a meal kit with bread, meats, cheese and condiments all in one package that can be microwaved in one minute for a hot, restaurant-style sandwich.
Cofer says the sandwiches address a real consumer need.
“For me, I barely have any time for lunch anymore,” he explains. “In fact, the statistic we have is that 70 percent of Americans spend 10 minutes or less at lunch.”
Deli Creations sandwiches use Kraft corporate technology first developed for DiGiorno frozen pizzas, Kraft cheeses, Oscar Mayer meats and other Kraft products such as Grey Poupon mustard.
The meal kit has proven to be very popular with both consumers and retail establishments. Cofer says that 65 percent of the sales of Deli Creations have been incremental to the meat case and that it has underscored the opportunity to draw consumer volume away from other out-of-home alternatives, such as the sub-sandwich shop down the street.
“I love the Deli Creations, and I’m very proud of it,” Cofer boasts. “And I feel that, again, with our retail partners, it’s a great way to show that we’re reinventing our categories here at Oscar Mayer.
“We’re really reinventing the pre-processed, packaged meat categories by looking more broadly, looking at that away-from-home occasion, to source business for that retailer and bring it back into the retail store.”
Cofer further says that he eats the product himself on a regular basis, “because, literally, I’ll be running between meetings, and here in one minute in the microwave, I can have all the joy and high-quality taste of a hot sandwich from a sandwich shop right here in the office.”
Another new product that goes hand-in-hand with Deli Creations in terms of convenience is Fast Franks.
The Oscar Mayer brand is nearly synonymous with the term hot dog, particularly since the unveiling of its still famous “Oscar Mayer Wiener Jingle” in 1963. With Fast Franks, Oscar Mayer is coupling convenience with that image, allowing the consumer to microwave both prepackaged dog and bun in 30-35 seconds. Fast Franks uses the same microwave bread technology that is used in Deli Creations sandwiches. Cofer says Fast Franks put the taste of a stadium-style hot dog just seconds away in the microwave. And consumers have responded quickly.
“Already, Fast Franks has over a 1.0 share of the massive hot dog category,” he says. “That’s big results and that’s certainly exceeding our expectations.”
Deli Creations and Fast Franks address one of the big consumer trends that Oscar Mayer has focused on. As people’s lives get busier, the time available for meals has shrunk. Cofer says both products address that directly. It allows consumers to get a full meal in the time that increasingly busy schedules will allow.
The company also has focused on premium products as another important trend in the industry. Consumers have developed a taste for very high quality products and have come to expect that from producers — a trend Deli Creations addresses. Cofer says that there is a division of consumer interest in premium, everyday luxury goods, and value. He believes that premium is a real trend that the company sees and one Oscar Mayer can capitalize on, especially given the awareness and the equity of the Oscar Mayer brand. Health-and-wellness also has become a very visible trend in the market.
“No one can deny the importance of providing consumers a wide array of choices that meet their better health-and-wellness needs,” says Cofer. “We have a number of different products within Oscar Mayer — including light and fat-free products — that meet those health-and-wellness needs.”
The last big trend that the company has focused on is the growing tendency for Americans to snack more, rather than have just three large meals in a day. To adapt to that change in the market, Oscar Mayer has come out with Lunchables Jr., a slightly smaller version of the popular Lunchables.
Consumers told Oscar Mayer they loved Lunchables, especially as a lunch for schoolchildren, but they also wanted something for younger children who tend to have small snacks throughout the day — something that has become more important as families become busier even at home. Most families have multiple children and juggled priorities, taking the kids to soccer practice and school.
“That is exactly what Lunchables Jr. is meant to address,” he continues. “Ritz sticks, raisins, peanut butter — stuff that Mom is already serving, but now in a convenient and fun way for kids to eat.”
The new Lunchables Jr. were also a bit of a departure for Oscar Mayer. A couple of the Lunchables Jr. don’t have any meat at all. According to an article in the Milwaukee Journal-Sentinel, some see it as a step away from the company’s core meat business. Cofer disagrees.
“The overwhelming majority of the portfolio of Oscar Mayer is meat-based,” he declares. “Yes, we have a variety within Lunchables Jr. that contains no meat, but again, what we’re doing there is taking a brand that mom trusts in Oscar Mayer Lunchables and meeting her needs.”
The company’s fundamental products are still luncheon meats, hot dogs and bacon, he says, and will remain so.
The challenge for a company such as Oscar Mayer is to stay in the lead.
“We are the leader in cold cuts, hot dogs, bacon and in lunch combinations,” Cofer says. “We’re the leader in every category in which we compete. To that end, I think the biggest challenge we have is to stay on top.”
Listening to those consumer needs is how the company plans to stay ahead of the pack, allowing Oscar Mayer to innovate and bring solutions to consumer demands in the marketplace.
Oscar Mayer has already conquered some of the technical challenges it faced, starting with the bread for Deli Creations and Fast Franks. Normally, when bread is put into the microwave, it either comes out as hard as a rock or soggy. Thanks to proprietary technology from sister companies within Kraft, Oscar Mayer has avoided that problem.
Cofer says that the microwave-baked bread is a great example “of where Oscar Mayer as a company derives excellent benefit from being part of the Kraft family.
“Thanks to Kraft and Oscar Mayer, I think we’ve cracked the code with both Deli Creations and Fast Franks.”
The company does face the same challenges that other companies in the meat industry face. Cofer says that food safety is the company’s No. 1 priority. The company has taken an industry leadership position on food safety for prepackaged meats and, he says, will continue to do so.
“We’re very proud of our food-safety record,” he continues. “I would argue we have an impeccable food-safety record, and it … always will be our No. 1 priority.”
That goes back to the company’s reputation as a producer of quality products. To ensure keeping that trust, the company works to maintain its high level of food safety.
The growth of biofuels has also gained some attention at Oscar Mayer.
“At Kraft and at Oscar Mayer, we are very interested and have a lot of efforts against the notion of sustainability and finding alternative fuel sources in ways that are consistent with what consumers want, which is sustainability and eco-friendly ways,” Cofer says.
He explains that there is no question that the growth of biofuels that come from food crops, such as corn, does put pressure on the availability and prices of those crops. Kraft and Oscar Mayer have been very interested in what Cofer calls “second generation” biofuels that use sources such as straw and wood chips to generate the sustainable energy needed to produce and transport products. Hopefully, those new methods will take some of the pressure off the availability and prices of key grain crops.
Trust in the brand
“We’ve earned a lot of trust and respect from our consumers over the last 124 years. We don’t take that lightly,” Cofer says. “That’s a big responsibility. That’s a responsibility that we cherish, and that’s a responsibility that we take pride in.
“It’s one that, again, we’ve got to continue to stay on top, go where the buck’s going, not where it is today, and really delight consumers.”