Mayonnaise – how Hellmann’s became synonymous with giving new life to food

Hellmann’s, Unilever’s line of condiments, position themselves as solving a problem, not selling a product. Most food & beverage brands differentiate themselves from competition on taste & quality/use of ingredients. In the world of condiments, this is difficult as most consumers perceive this segment to be functional.
The Hellmann’s unique marketing strategy team at Unilever understood this and have long positioned their brand as one that encourages creativity in cooking and food. Over the last 3 or so years, they have been championing solving the food waste problem at home using Hellmann’s mayonnaise.

Bring out the best

In 2019, Unilever launched the ‘Bring out the best’ campaign in UK. The campaign by  Ogilvy UK & Unilever asked people to get leftovers from their fridge for Hellmann’s to transform into ‘new’ meals using their range. David Hertz, a celebrity Chef, transformed people’s leftovers into five-star meals using the Hellmann’s range.

Bring our the Best Campaign in the UK, 2019

This campaign is a great example of embedded marketing, where the potential of the product is incorporated into a strong social message. Not only did it receive organic coverage from news outlets, it was popular on social media too.

Previous success

Ogilvy and Hellmann’s had previously done a similar campaign in Canada in 2018, which informed Canadians that they waste enough food every minute to feed a stadium. In the advert, they showcased feeding a stadium full of people with food waste from grocery stores.

Delivering a fully integrated campaign pinned on the message, ‘more real food for real people’, the brand created a mini digital site where people can find food rescue tips, recipes and facts on food waste.

Feed a stadium campaign – Canada, 2018

The campaign earned 13.5MM+ impressions & influencer content achieved 2MM+ organic impressions (3.5x the industry benchmark). Their mini digital site with educational tips on reducing food waste had a view-through rate of +80% above industry benchmarks.

2020

Based on the success of their campaign in Canada and also the ‘Bring out the Best’ campaign in the UK, they launched the ‘Turn nothing into something’ campaign in Canada in 2020 and the Fairy Godmayo ad in the US in time for Super Bowl.

Turn Nothing into Something ad in Canada
Fairy Godmayo ad in the US – launched in time for Super Bowl, 2020

In 2020, as an initial step towards the larger vision to reduce food waste, the brand started the Hellmann’s Food Relief Fund. This has already saved 1.2 million pounds of food waste from farms and redistributed this food to communities in need. 

Embedding sustainability in the brand’s DNA

The Hellmann’s initiative, “Make Taste, Not Waste”, is part of Unilever’s “Future Foods” ambition, which launched globally in 2020 with two key objectives: to help people transition towards healthier diets and to help reduce the environmental impact of the global food chain. One of the key “Future Foods” commitments is to halve food waste in Unilever’s direct global operations from factory to shelf by 2025.

This initiative was also lauded by Daniel Balaban, Director of UN in Brazil who mentioned, “The idea is an extremely important wake-up call on food waste”.

Not only does Hellmann’s have a focus on food waste but they are leading the way in terms of how they are sourcing the plastic used in their bottles and caps. In 2018, they started making their bottles 100% recyclable.

Embedding the food waste cause deep into the brand’s image, has helped Unilever breathe life into what is otherwise a commoditised condiment. They have tapped into a segment of consumers who will stay loyal to the brand due to the causes the brand stands for, which is crucial for the year ahead.

FMCG conglomerate shake up underway?

On 21 June 2022, The Kellogg Company announced that they were planning to separate into 3 different businesses by end of 2023. As soon as this hit the news, I’m sure investors and employees of other companies are wondering which conglomerate might be splitting up next. According to Bank of America analyst, Bryan Spillane, the big food breakup “is already underway”. However we, at Salesbeat, think the FMCG conglomerate break up is what is underway.

Why now?

So what is happening now, that is accelerating M & As and separations? We’ve just come out on the other side of a longer than expected pandemic, which had a larger than expected impact on lifestyles and consumer buying behaviour. While certain trends accelerated during the pandemic, new ones emerged and solidified at an accelerated pace too. Remote working and remote education being two of those. While remote education is unlikely to continue in the short to medium term, remote working is here to stay.

As a result of remote working, a new trend/behaviour came into being – living outside the city. Pre-pandemic, everyone wanted to reduce their commutes and live close to work. Healthy snacking was a trend that accelerated during the pandemic and is one of the reasons why the Kellogg split happened.

Another reason for this is the rapid increase in supply chain costs. In this context, companies need to double down on efficiencies so savings can be realised in other areas. And one of them is the route to market.

What about economies of scale?

While you may think that these companies benefit from economies of scale, you’d be right, but only when it comes to manufacturing. When it comes to sales, marketing and strategy teams, each category is likely to have a different team. Also, transport and logistics costs are likely to be separate from other categories.

So FMCG conglomerate break up helps companies focus on growing sales/distribution of distinct categories that share both the route to consumer and manufacturing technology. For example, holding a portfolio purely in the snacking category or in the breakfast cereals category.

So let’s look at some of the other companies under discussion.

Unilever

Unilever is one of the few FMCG companies that owns brands across very disparate categories. The own and sell brands under the Beauty & Wellbeing, Personal Care, Home care, Ice Cream, Condiments, Soup and Plant based meat categories.

Not only do these categories not share the same route to market, but they also have different teams managing the various brands. Furthermore, these categories most likely have raw materials from very disparate suppliers which are manufactured in very different manufacturing entities.

Nestle

Another large Food & Beverage conglomerate that owns brands across very different categories ranging from Pet food to Coffee & Coffee makers.

While brands in the same category may share similar routes to consumer, manufacturing sites and suppliers, brands across categories do not.

General Mills

General Mills has brands across very different food categories and also in Pet food. Their food portfolio includes brands in categories ranging from tinned vegetables (Green Giant) to Baking (Pillsbury, Betty Crocker etc) and from the snacking occasion (Larabar, Bugles, EPIC, Yoplait etc) to ice cream.

FMCG companies with diverse portfolios that are not likely to split are:

PepsiCo

PepsiCo is another company that has come under scrutiny for the very different categories their brands fall under. However, PepsiCo is one of the few companies whose strategy took this into account to convert into a strength. There was a concerted effort from the PepsiCo team to create one route to market. This is one reason why splitting PepsiCo up does not make strategic sense for the company.

Mars

Mars is an FMCG company with a portfolio that ranges across confectionery, pet food and Food (Uncle Ben’s, Dolmio etc). While the same rationale as Nestle and General Mills applies to Mars too, it is unlikely that they’ll spin categories off into separate companies. This is because they are still a family owned business. As long as the family still believes in the company owning brands across disparate categories to manage their risk/return, they are likely to lean into this.

A case for not splitting some of these companies up

In the last 20 years, we have seen the creation of FMCG behemoths where the driving rationale has been more about portfolio diversification and less about lower costs from scale benefits. As long as these different categories and functions are treated as completely different business units for decision making, investors can still benefit from a portfolio of brands across categories during uncertain times. Similar to how a portfolio of stocks spread across companies across various industries help investors manage their risk, FMCG companies and their shareholders maybe able to benefit from a diverse portfolio if managed right.

Conclusion

5 years from now, it’ll be interesting to look at the mergers, acquisitions and divestments in this space and how these companies fare in the long term. While we could argue many different ways for and against splitting these companies up or investing in/developing new categories to manage risk, we live in times so uncertain that the benefits may go either way.

Unilever – how the marketing team returned Pot Noodles to sales growth

This case study looks at how understanding your consumers and your consumers’ motivations better, helps you keep your brand in growth.

Pot Noodle has been a supermarket staple aimed at 16-24 year olds. The brand became iconic in the ’90s when Gen X (aka slacker/MTV generation) embraced the brand for its ease of use. According to Marketing Society, ‘These were the kids who were proud to sit around in their undies on the sofa watching Men Behaving Badly and playing on their PlayStations. The ease and convenience of Pot Noodle made it the perfect food for this infamous 90s lifestyle, and the brand became emblematic of slacker culture.’

The team had been using music themed ads for this target segment. In the noughties, the Pot Noodle team launched a new ad campaign, ‘Why try harder’, which according to Marketing Society, featured a man marrying a footballer in order to live the easy life and another pretending to be a towel so people would carry him to the beach every day. While the ad was in keeping with the generation they had previously targeted, the 16-24 year old of the millennial generation had different values from the previous one. So the brand started losing share to others in the same category. The irony was that the category was in growth and Pot Noodle was underperforming vs the remainder of the brands in the category.

What was causing this?

This generation, the Millennials, had grown up watching their peers become tech billionaires and global peace envoys. According to a 2014 survey, 79% said career success was important to them, 76% wanted to achieve more than their parents and 55% planned to start their own business. In complete contrast to the ‘slacker’ image portrayed by the Pot Noodle ads, this generation was probably the most ambitious one yet.

So why was the rest of the category in growth?

It wasn’t that the rest of the category was in decline as well. In fact the category grew by c. 2% (value) between 2013 and 2014, but Pot Noodle’s market share dropped by c. 5% (value) during the same period.

When the marketing team behind Pot Noodle at Unilever dug deeper into this, by spending time with people in this generation, they found that convenience was still a highly valued selling point for this category. They found that this generation valued convenience not because they were lazy, but because they were ambitious and driven. Spending less time putting together snacks & meals gave them more time to focus on their career.

This was a generation that was defined by the financial crisis in 2008. They knew that unless they focussed completely on their careers, they would not be able to enjoy the same quality of living as the previous generations did.

So they bought and consumed instant meals/snacks to make more time for work.

However, the ‘slacker’ image portrayed by Pot Noodle was not in line with the ethos of this new generation.

A different portrayal of the same benefit

While the fact remained that both generations valued convenience, the reason for why they valued this convenience had changed.

While Gen X valued the minimum effort that went into putting a snack/meal together, Millennials valued the time it saved them, that they could use to focus on their careers.

So the Unilever marketing team launched their ‘You can make it’ campaign.

Re-launch of the Pot Noodle brand in September 2015

They used the 3 months of December 2015, to completely re-launch the brand. Given they were now targeting a generation of digital natives, the campaign focussed heavily on digital channels. The campaign kicked off with the story of a young man who dreamed of success in the Boxing ring.

You can make it

They also ran mobile and online ads around this theme, ‘You can make it’. They went beyond just running ads however, they launched partnerships with online youth sites to back entrepreneurs. They launched music careers, funded & launched launched inventions through their on pack competition and handed out c. 100k samples at Universities.

Turnaround of the brand

The campaign resonated with this generation and completely turned around the brand performance in stores.

#youcanmakeit generated a whopping 29 million impressions during the campaign period, with the majority of the users aged 16-24 (Pot Noodle target age).

The ad changed the way Pot Noodle was perceived by people. Pot Noodle went from being a guilty pleasure to one that gave its consumers more time to focus on success.

Major media outlets and youth influencers praised the positive message about gender choices that the Boxer spot delivered and were supportive of the message behind the ad. During the campaign period positive reports of Pot Noodle in the press outweighed negative ones by a factor of 10 to 1.

This change in perception had a major impact on sales, market share and penetration.

By understanding their target consumer/shopper segment better through data, the team behind Pot Noodle was able to reverse and even grow the brand. Sales value increased by 3.6% and nearly 364k NEW households bought the brand. Pot Noodle not only reversed their decline but became the fastest growing brand in this category.

Internet and its influence on sales

On 12 March 1989, Sir Tim Berners-Lee submitted his proposal for the World Wide Web.

Sir Berners-Lee proposed a way of structuring and linking all the information (like a web) available on CERN’s computer network that made it quick and easy to access. This concept of a ‘web of information’ would ultimately become the World Wide Web.

The launch of the Mosaic browser in 1993 opened up the web to a new audience of non-academics. By 1995, the internet and the World Wide Web were established phenomena. In 1995, the Internet had less than 40 million users globally. In contrast, Facebook had 2.9billion monthly active users in January 2022.

While in its early days, the internet was structured on the basis of decentralisation (think p2p file sharing sites like Napster), these days, most use the internet for social media (Twitter, Instagram, TikTok etc), entertainment (think Netflix, Spotify) and for updates on current events, whether fake or not.

Why are we blogging about the internet today?

The internet has had an outsized impact on sales and predictability of sales since inception. While its early (negative) impact was on sales of music, books and movies, due to sites like Napster and Bittorrent, its later impact was on sales of consumer goods, both every day and luxury. This is largely due to social media.

Current events(‘news’) have always influenced our buying decisions. Prior to the advent of the internet, this was restricted to watching the news once a day or to the daily newspaper. So the influence was sporadic. These days, there are several websites (some legitimate, some not), that people can go to for their current events update. This has made the world a lot smaller and influences choices.

Influencers

Influencer marketing has been around since Roman times, when gladiators endorsed products (Source: Forbes.com). According to Forbes.com, the first well known influencer collaboration was when Thomas Wedgwood made a tea set in 1760 for the wife of King George III and marketed his brand as having ‘royal approval’.

In the early 2000s, mommy bloggers were the influencers sought out by various brands to popularise and talk about their products. But the term ‘influencer marketing’ was popularised by social media.

Social media

Of all the websites and apps on the internet, social media has the biggest impact on sales. This is not just owing to the influencers on the internet and what they post, but also due to what regular people like you and me post. With content now going ‘viral’, it is viewed not by 100s of thousands of people, but a few million or billions of people.

In June 2021, Musk tweeted a heartbreak emoji and a Linkin Park referenced meme while talking about Bitcoin. The result: The price of Bitcoin dipped 3.6%.

Another, rather infamous twitter post, was by Weetabix and Heinz. The post was polarising enough that other brands, retailers and even foreign embassies got in on it. Within just a week of posting this, Weetabix sales was up by 15% in Sainsbury’s alone (Source: The Grocer)

Increased information on brands/companies

As information has become the new currency of today, any actions taken by companies are fodder for news, which eventually makes its way to social media.

With Gen Z & Millennials now forming the bulk of shoppers and given how their views on purpose have influenced how Gen X and Baby boomers think about consumption choices as well, this increased availability of information has the power to change brand preferences, based on the information on decisions taken by these companies.

Following the start of the conflict in Ukraine, when Unilever, Pepsi & Coca Cola did not initially pause Russian operations, consumer responses influences sales enough that they then decided to pause operations in the country.

How can sales people predict changes in preferences and prepare for it?

  • Make it a point to stay updated on current events through legitimate sources.
  • Check social media sites regularly to keep an eye on what posts are trending.
  • If your view or preference has been impacted by a particular event, news or a social media post, you can be sure that there are several more whose preference has changed as well.
  • Join different social groups and ensure you regularly talk to people across different generations. Each generation reacts differently (or does not react).

People have always been influenced by the opinions of others. This has been so since times immemorial. Technology has magnified this and will continue to do so as people search for human connection on the internet instead of ‘in real life’.