9-516-004 R E V : APRIL 29, 2016
ROBERT J. DOLAN
DONALD K. NGWE Planters Nuts
In 2012, Mr. Peanut turned 96 years old. Since his birth, nearly every package and advertising spot for Planters nuts featured him. (See Exhibit 1 for the changing “look” of Mr. Peanut over the years and Exhibit 2 for some current Planters packaging.)
He was well-known and regarded by Americans—96% could identify him and 70% found him “charming and charismatic.”1 However, this “charm and charisma” had not recently translated to strong market performance for Planters nuts. Planters’ annual revenues hovered around $1 billion, and it was by far the largest selling branded nut in the country; but over the past six years, unit sales had declined 23% and U.S. household penetration (i.e., the percent of households who purchased any type of Planters product in a given year) declined from 46% to 38%.2
The Planters brand had been part of Kraft Foods ($54 billion in sales in 2011) which was also home to well-known brands such as Oreo Cookies, Maxwell House coffee, Ritz Crackers, and Kraft cheeses. Recently, the Kraft entity split itself into two standalone businesses—Mondelez, a global snacks and confectionary business, and Kraft Foods Group, a North American grocery business. At the split, Planters was assigned to the Kraft Foods Group. A new brand management team, headed by Mark Magnesen, Senior Vice President and General Manager Planters, and Sean Marks, Senior Director Planters Marketing was appointed.
Senior management assured Magnesen and Marks of the freedom to “rethink everything” about the Planters brand in pursuit of a turnaround. Magnesen knew that Planters achieving its full potential required changes to procurement and manufacturing operations, but key questions also resided in marketing. The team’s initial “Situation Assessment” for the brand, conducted along with Peter Cotter, Senior Brand Manager for Planters, and Kerry Smith, Associate Director of Market Research, focused on the following areas with commentary by Magnesen:
Positioning/Targeting: We have followed the historical Kraft philosophy of really focusing on one target market and trying to “own” that segment. This target has been 35– to 65-year-old males with a desire for a healthier lifestyle. For this “smarter guy,” as we call him, we positioned ourselves as “naturally remarkable.” Do we keep this focus? Do we stay focused but change the target? Or, do we broaden things—perhaps adopting more than one target? In any event, what’s our positioning for targets we adopt?
Professors Robert J. Dolan and Donald K. Ngwe prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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“Leaky Bucket” Problem We offer a variety of nuts—peanuts, cashews, and mixed nuts are the heart of the product line. Lately, almonds and pistachios became the “hot” nut types, driven by health perceptions. As we focused effort on the new growth areas, we sprung a leak in the traditional nut areas. Peanuts, cashews, and mixed nut sales declined more quickly than almonds and pistachios increased. Do we focus on patching the leaky bucket to slow the flow out or on increasing the “new nut” flow in? An added issue is that the “flowing out” nuts have a cost-of-goods sold at 60% of revenue, while the new “flowing in” nuts run at 85% of revenue.
Improving Margins in a Competitive Category Nuts are a “hot” category as consumers look for healthier snacks. Focused almond and pistachio marketers—particularly Blue Diamond almonds and Wonderful pistachios—are spending significant dollars in pretty creative ways. How can we compete when we want to improve our margins? Can the new digital media, the Planters Brand and the iconic Mr. Peanut be of use?
The team agreed to gather together the data needed to inform decision making on these key issues. Planters’ retail customers, particularly larger grocers and mass merchants like Walmart and Target were anxious to see what Planters would do to drive nut category sales. Many had already expressed their disappointment in Planters no longer playing a leading role in driving category growth. These retailers were increasing focus on their own “store brands” generally, and particularly in nuts.
Planters Background
At its founding in 1906, Planters Peanut Company (as the name would imply) sold one nut type. Historically, peanuts were viewed as a food for the poor, produced and consumed locally. Southeastern states (Georgia, Virginia, Florida, Alabama and Mississippi) were the predominant growing states. Peanuts were not technically a nut, but rather a legume. They were a rotational ground crop meaning the land on which they grew changed plantings from one growing season to the next. Peanuts returned nutrients to the soil to benefit subsequent plantings of other crops.
From its early days, Planters had aspirations to become “the national nut” offering the consumer “high quality peanuts from Planters at low costs anywhere.”3 Mr. Peanut was born in 1916 and was outfitted with a top hat, monocle and cane to emphasize high quality even while “working for peanuts” was a common phrase. Early advertising proclaimed “Planters is the word for Peanuts.” The nutritional benefits of peanuts were also noted; e.g., a 1936 ad read “they give you 2½ hours extra pep daily.” In the 1940s, the program to elevate the status of peanuts continued as Planters introduced Planters Cocktail Peanuts, positioning them as “wonderful for parties.” The Planters brand became well known through advertising and more than 200 stand-alone Planters Peanut stores established around the country.
Planters innovated in peanuts with the introduction of Dry Roasted Peanuts (1962) and expanded the product line to include Cashews (not grown in the U.S. but imported), Mixed Nuts (1985) and Trail Mix (1998). In 2000, the health benefits of nuts were featured in advertising as in the headline, “Did you know nuts help lower cholesterol?” In 2005, peanuts still clearly dominated the snack nut scene—as 50% of U.S. households bought some brand of peanuts during the year. Cashews trailed at
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33% penetration and pistachios and almonds held “specialty” status with just over 10% household penetration each. Much would change over the next seven years.
Snack Nut Category Evolutiona
Table 1 shows 2005 to 2012 trends in market share and household penetration for each nut type.
Table 1 Market Metrics by Nut Type (for all suppliers)
Dollar Market Share U.S. Household Penetrationa Nut Type 2012 Change Since 2005 2012 Chance Since 2005
Peanuts 19% -11% 43% -7% Cashews 13% -8% 24% -9% Mixed Nuts 12% -7% 23% -6% Almonds 16% +8% 23% +12% Pistachios 15% +8% 24% +12%
Source: Company documents. a Percent of households buying that nut type at least once during the year.
Almonds and pistachios were not rotational crops, but rather tree nuts. An almond tree might take five years to mature to full production and then produce continually for 25 years or more on an annual growing cycle. A pistachio tree was a “biennial bearer” meaning a heavy crop one year and a light one the next. A pistachio tree’s bearing life was indefinite. As such, supply of tree nuts was relatively fixed for the near term. In 2012, 6,500 almond growers in California produced almost all of the US output and 80% of the world’s output.4
U.S. pistachios were a relative “late-comer” to nut production, being first commercialized in the United States in 1976 with growers concentrated in California, Arizona, and New Mexico. California growers dominated with 98% U.S. output and 24% of the world’s output.5 Paramount Farms, in California’s San Joaquin Valley, was the world’s largest grower of pistachios, accounting for 60% of California’s output.
Almond growers formed the Blue Diamond cooperative in 1910 to coordinate research and development on growing techniques. This later led to the selling of almonds under the Blue Diamond brand name and the formation of the Almond Board of California to help with demand stimulation efforts. The Board was funded by the growers. Similarly, pistachio growers jointly funded the American Pistachio Growers group to coordinate market development for pistachios. Table 2 shows total grower support for three nut types and the amount of that support directed to demand development in the United States.b
a While nuts were also sold for baking (so-called Culinary Nuts), this case focuses on the snack nuts category only. Culinary nuts were about ¼ the size of the snack nut market. Pecans and walnuts were leading nut types in the culinary category. b There was no analog to these industry groups for cashews as there was no commercial production of cashews in the United States due to growing requirements; e.g., weather and soil types. Leading cashew growing countries were Vietnam, Nigeria, and India.
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Since almonds had a large export market, about half of the California Almond Board spending was outside the United States. The growers/funders were typically represented on the boards of these organizations and approved spending plans.
Table 2 Estimated Grower Support Funds for Industry Groups ($ in millions), 2012
Total Total U.S. Grower Support Marketing Spend Marketing Spend
Almonds (Almond Board of California) $58 $42 $20 Pistachios (American Pistachio Growers) $11 $9 $9 Peanuts (National Peanut Board) $7 $4 $4
Source: U.S Marketing Spend from Kraft Company Records. Total grower support and total marketing spend estimated by casewriters based upon data in: (1) Almond Board of California, Almond Growers Field Day presentation, accessed at ucarn.edu/sites/nut.crops/files/191577.pdf, accessed May 15, 2015, (2) S. Humble, Almond Board of California, “Creating Healthy Demand for Almonds in the United States,” at www.almonds.com/sites/default/ files/content/attachments/creating_consumer_demand_aroundtheworld_1.pdf, accessed May 15, 2015, (3) E. Boling, “American Pistachios Growers hoping California drought doesn’t sink marketing plans,” The Produce News, February 18, 2014, (4) D. Pollock, “Pistachio Industry on road to billion-pound crop,” Western Farm Press, August 2, 2012, (5) C. Blake, “US Pistachio Industry Continues Growth Stride,” Western Farm Press, April 5, 2013, and, (6) National Peanut Board, “Consumer Impact, Research Initiatives are focus of 2013 NPB Budget,” Press Release, August 30, 2012 at www.nationalpeanutboard.org.
Funds could be used to support the scientific study of health benefits of a particular type of nut. The Almond Board’s work in facilitating and publicizing the result of studies helped to establish almonds as the health leader in the perceptions of Americans. Almonds were the first nut to be officially recognized as “heart healthy” by the American Heart Association.
Figure 1 shows the size of the “Snack Nut and Seed” market (in retail dollars) from 2009 to 2012.
Figure 1 United States Snack Nut Category Size: Retail Dollars (Billions)
$4.30 $3.80 $3.48
$3.23
Retail Sales Retail ($ in billions) in ($
2009 2010 2011 2012
Source: Company documents.
Dollar market shares achieved in 2012 for the nut market overall were as follows:
Store brand—31.6% Planters—24.5%
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Wonderful—11.9 % Blue Diamond—6.3 % Emerald—5.1 %
Competitor Profiles
Table 3 shows estimated supplier market shares by nut type for 2012.
Table 3 Estimated Dollar Market Shares by Nut Type for Major Suppliers
Peanuts Cashews Almonds Pistachios Mixed Nuts Trail Mix
Planters 40% 37% 2% 4% 50% 3% Store Brand 33% 44% 21% 16% 35% 59% Wonderful -- -- 8% 69% -- -- Blue Diamond -- -- 47% ------Emerald 2% 5% 14% -- 6% 8%
Source: Company documents.
Descriptions of major suppliers are as follows:
Wonderful
Wonderful was the primary driver of $1 billion in nut category growth over the past five years as it grew six-fold from $87M to $521M in retail sales over the time period. Wonderful was part of Roll Global LLC, an organization dedicated to “building healthy brands from the ground up.”6 Roll followed a vertically integrated approach to source and market products in a range of commodity based categories, including flowers (Teleflora), water (Fiji), wine (Justin), fruit (Halo), juices (POM Wonderful) and nuts (Wonderful). Roll introduced Wonderful brand pistachios in 2007 and Wonderful brand Almonds in 2011. The “Get Crackin’” campaign behind Wonderful pistachios began in 2009.
Roll supported its brands with the Fire Station Agency, an “in-house, full-service advertising and communications agency” dedicated to integration of television, web, print, outdoor, point of sale, mobile and social media.7
Based on data in Wonderful press releases, Wonderful pistachios were supported by over $80M in advertising spending from 2009–12. The press release announcing the inaugural $15M campaign for fall 2009 referred to it as “a nutty new national advertising campaign” with an “irreverent approach” designed to “break through the marketing clutter.”8 The campaign featured “eight celebrity figures” in separate ads, each demonstrating how to break open a pistachio nut in its “own unique, light- hearted way.” Among the initial eight were Levi Johnston, father of Sarah Palin’s grandchild, Wee- Man, a prankster from the movie Jackass, Olympic swimmer Dara Torres, and an unnamed “real-life dominatrix.” Two months after the ads began, Wonderful reported results from Nielsen market
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research showing the ads running on Monday Night Football and Saturday Night Live received high “Recall” and “Likeability” scores from consumers.9
“Get Crackin’ 2.0” ads of late 2010 maintained the cracking open pistachios in a unique way theme and “irreverent” approach. Among the “celebrity figures” for 2.0 were Jersey Shore’s Nicole “Snooki” Polizzi, ousted Illinois governor Rod Blagojevich and YouTube sensation, the Keyboard Cat. According to Mark Masten, Roll’s V.P. of Global Sales and Marketing, “Strategic advertising and innovative sponsorships have driven Wonderful Pistachios sales to new levels; further proof that you can turn a commodity into a brand. . . .”10 Wonderful called pistachios the “skinny nut” and stated “Consumers are exchanging chips and other nuts for pistachios” and positioned pistachios as a “year-round snack” whereas “[h]istorically nut ads have generally been anchored to the winter holidays with festive entertaining contexts.”11
The approach continued in “Get Crackin’ 3.0”, in late 2011; advertising spending was increased to $30M for the year. The “pop culture icons” (in Wonderful terminology) for the third series of ads included Khloe Kardashian, Facebook twins Cameron and Tyler Winklevoss, the Honey Badger and Mr. Bill from Saturday Night Live. The Richmond NASCAR Race became the Wonderful Pistachios 400.12 By September 2012, the company reported 12 million views of Get Crackin’ videos at Wonderful’s website, Facebook page, or YouTube page.13
Complementing the Wonderful spend was the roughly $9M annual marketing spending by the American Pistachio Growers (APG). APG focused on “the Power of Pistachios” containing “antioxidants, protein, and healthy fats that boost energy and promote muscle recovery.”14 APG adopted more conventional celebrity endorsers and encouraged scientific study of pistachio’s health benefits.
Blue Diamond
The Blue Diamond brand, established by a cooperative of growers, was synonymous with almonds, dating back to the 1920s. Blue Diamond offered a broad almond product line with 25 different types. As the company put it “by segmenting almond products and their benefits to target customer groups, the company tailored a variety of media and promotional sponsorships to position these with the right message. . . .” The Blue Diamond BOLD line was directed to “the active, health- conscious male consumer” while Whole Natural and Oven Roasted Almonds targeted “active, but calorie-conscious women.”15 Blue Diamond’s advertising theme was to “Get Your Good Going.” TV ads (e.g., during the 2012 London Olympics) typically showed active people enjoying themselves with the voiceover “Good is in every Blue Diamond almond.”
Blue Diamond Almonds were the first nut brand to be certified by the American Heart Association and by 2012 Blue Diamond incorporated the Association’s “Heart Healthy Check Mark” on its packaging.16
The Almond Board of California devoted about $20 million per year to marketing almonds generally in the U.S, supplementing the approximate $15 million spend specifically on the Blue Diamond brand. At a 2010 almond industry conference, the Board set out its theme as “Appetite for Life” and identified target markets as:
Primary—U.S. woman, age 35+ Secondary—healthy men Tertiary—U.S. younger women, age 25–3417
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Emerald
The other branded player of significance was Emerald nuts, launched in 2004 by Diamond Foods. Emerald was similar to Planters in its offering of a wide variety of nut types –peanuts, cashews, and almonds as well as mixed nuts and trail mix.
Store Brands
Store brands were an important part of the nut category, with 31.6% of category dollars in 2012. A typical category in a supermarket had 19% of sales in the “store brand.” Many consumers perceived store brands to be “just as good” as manufacturer branded products.
Table 4 shows the price positioning of Planters, as well as the leading competitive brands, and average store brand by nut type.
Table 4 Price Positioning: Average Retail Price per Pound, 2012
( ) shows index to Planters price (100) for the nut type
Leading Competitive Planters Branded Product Store Brand
Peanuts $3.69 $3.17 $2.91 (86) (79) Emerald
Mixed Nuts $7.44 $7.51 $6.60 (101) (89) Emerald
Cashews $8.44 $7.52 $7.81 (89) (92) Emerald
Trail Mix $6.63 $5.77 $4.06 (87) (61) Emerald
Almonds $6.16 $6.87 $6.42 (112) (104) Blue Diamond
Pistachios $7.36 $7.81 $7.37 (106) (100) Wonderful
Source: Kraft company records based on Nielsen All Store Data, Snack Nuts and Seeds Database.
Advertising spending levels for 2012 are shown in Table 5. The top of the table shows company spending and the bottom shows marketing support from industry growers. This support would not be brand name specific, but typically focused on nut health and use occasions.
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Table 5 United States Advertising Spending Levels, 2012
Company Planters Blue Diamond Wonderful
Company advertising spend $15.4M $16.2M $21.4M As % of company retail sales 1.4% 6.0% 4.3% Industry group added support National Peanut Board Almond Board of California American Pistachio Growers $4M $20.5M $9M
Source: Company documents.
Details on Planters Marketing Activity 2010–2012
Planters’ marketing strategy in 2010 was built on the basic nature of its products, plant-based foods that underwent minimal processing. Internal Planters marketing documents stated the “Brand Ambition” to be: “Don’t Settle, Be Naturally Remarkable.” The marketing team further articulated the meaning of “Naturally Remarkable”—being authentic, inventive, and sustainable (see Figure 2).
Figure 2 2010 Planters Brand Strategy
Source: Company documents.
As evidence of its “inventive” way, Planters offered the NUT•rition line which it stated was “designed with nutritionists and specially blended to deliver specific wellness and nutrient benefits.”
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Introduced in 2004, the line became the focus of Planters’ advertising support in 2010. NUT•rition was premium priced with an average retail price per pound of $9.38. By 2012, it came to represent 15% of Planters sales.
As was standard practice at Kraft, the brand strategy was set out in a formal “positioning statement.” The standard Kraft format and specifications for Planters were as follows:
Element Planters Specification Target: Who is the Customer? “Smarter Guys”
Demographics • Men • Age: 35-65
Aspiration • Healthier lifestyle
Behavior • Frequently purchase wholesome snacks • Favor “healthy” nuts preferring salty over sweet • Not regularly buying Planters
Frame of Reference Nuts and other wholesome snacks, e.g. fruit and dried fruit
Points of difference/Brand benefits Real nourishment that helps a man be at his best
Reason to believe Planters nuts offer best quality, taste, nutrition found in any snack
Brand personality Confident, authentic and witty
Source: Company documents.
The formal positioning statement was: For men who want to realize their full potential, Planters provides the real snack nourishment that helps him be his best, because only Planters takes nuts right from the earth and brings out the best quality, taste and nutrition he’ll find in any snack.18
The Naturally Remarkable campaign was implemented via major changes to Planters marketing. In late 2010, Mr. Peanut spoke for the first time. A stop-motion video featuring Mr. Peanut hosting a holiday party appeared on Mr. Peanut’s Facebook page at midnight on November 9. The holiday season was typically Planters’ strongest of the year, as parties and gatherings were a prime nut eating occasion. According to Peter Cotter, Senior Brand Manager for Planters, the intent was to show that “Planters is the brand you want to serve to your family and friends.”
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The voice of Mr. Peanut was Academy-Award nominated actor Robert Downey, Jr. Downey’s career featured many notable TV (e.g., in Ally Mc Beal) and movie roles. But his role as Tony Stark/ Iron Man in Iron Man (2008) and Iron Man 2 (2010) defined him to many. The Downey-featured “Holiday” ad’s release officially launched Planters’ Naturally Remarkable campaign. The 30-second ad premiered on the internet and subsequently on television. The ad intended to show the witty and confident side of Mr. Peanut as Richard, a holiday nutcracker, who had previously taken a bite out of Mr. Peanut, (as evidenced by the bandage on Mr. Peanut) arrives at Mr. Peanuts’ holiday party. Mr. Peanut calmly goes on tending to guests and following his own advice to, “Just serve holiday snacks and be a gracious host—no matter who shows up.” The “Holiday 2010” ad campaign was supported by $4M in spending. Mr. Peanuts’ talking was deemed newsworthy by many including CNN and NBC Nightly News. Within one week, the ad generated over 200 broadcast mentions and over 200 print/on-line articles.
More stop-motion style ads with Robert Downey, Jr. aired throughout 2011, for a variety of Planters products including almonds, NUT•rition, and newly introduced peanut butter. These ads introduced Mr. Peanut’s friends, such as Peanut Butter Doug, and Alejandro, a bull-fighting almond.
In early 2012, marketing at Planters pivoted from “natural” to a more direct appeal to the target demographic: men. The eight year old NUT•rition line was expanded with the addition of Planters NUT•rition Men’s Health® Recommended Mix, featuring “a carefully crafted blend of three nuts men love—almonds, peanuts, and pistachios—that contains six grams of protein and six vitamins and minerals per one ounce serving.” See Exhibit 3 for a picture of the back cover of Men’s Health magazine announcing the new co-branded product.
The product launch was accompanied by ads on Men’s Health Magazine and quirky videos featuring Mr. Peanut and friends in hyper-masculine roles. The campaign included a Manliest Mix game downloadable from the iTunes Store. Exhibit 4 shows a variety of print ads run through 2012.
However, Planters sales failed to rebound in 2012. Peanuts (sold under any name) continued to lose favor with the U.S. consumer as shown in Table 6. With this as backdrop, the new Planters brand team gathered together data to inform their targeting, positioning and execution decisions.
Table 6 Peanuts U.S. Household Penetration, 2005–12 (all brands)
50
48
46 % of US households 44
42
40 2005 2006 2007 2008 2009 2010 2011 2012
Source: Company documents.
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Researching the State of the Business
To better understand the brand’s situation and to support development of an action plan, Magnesen and Marks gathered data about the market and Planters. Key data were:
I. Nut Type: Consumer Perceptions and Actual Nutrient Content a. Consumer perceptions of health/cost of nut types b. Nutrient content by nut type
II. Consumer Brand Awareness and Attitude a. Brand awareness b. Planters’ brand equity
III. Qualitative Research a. In-depth customer interviews and store visits b. Focus groups on feelings about nuts and Planters
IV. Nut consumption rate by age and gender
V. Consumer judgments on persuasiveness of possible Planters messages
A summary of the key research findings were:
Ia. Consumer Perceptions
The first piece of research looked at consumers’ perception of almonds, pistachios and peanuts on health benefits and cost. Results are in Table 7.
Table 7 Consumer Perceptions of Nut Types
83 76 78 73 % of People Agree* (Top Two Box) 64 65 63
54 46 47 41 Almonds 38 Pistachios Peanuts
Are Better than other Low in fat Inexpensive heathly/nutritious snacks
Source: Company documents; sample size = 2,000.
* Scoring was on 1-5 scale with 1=strongly disagree and 5=strongly agree. Table reports % of respondents answering 4 or 5; i.e., “top two box.”
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Ib. Actual Nutrient Content of Nut Types
Data obtained from the U.S. Department of Agriculture and Department of Health and Human Services on nutritional aspects of the various nuts are presented in Table 8.
Table 8 Nutrient Content per One Ounce Serving for Dry Roasted Nuts
Peanuts Almonds Pistachios Cashews
Calories 160 170 160 160 Fat 14g 15g 13g 13g Saturated Fat 2g 1g 1.5g 2.5g Polyunsaturated Fat 4.5g 3.5g 4g 2g Monounsaturated Fat 7g 9g 7g 8g Sodium 150mg 190mg 120mg 180mg Potassium 200mg 200mg 280mg 160mg Carbohydrate 5g 6g 8g 9g Sugar 2g 1g 2g 1g Fiber Good Source Good Source Good Source Protein 7g 6g 6g 4g Iron Good Source Vitamin E Good Source Excellent Source Niacin Excellent Source Thiamin Good Source Riboflavin Excellent Source Vitamin B6 Good Source Phosphorus Good Source Good Source Good Source Good Source Magnesium Good Source Excellent Source Excellent Source Manganese Excellent Source Excellent Source Good Source Good Source Copper Good Source Excellent Source Excellent Source Zinc Good Source
Source: U.S. Department of Agriculture and U.S. Department of Health and Human Services.
IIa. Brand Awareness
Customary practice at Kraft was to regularly check on the “brand health” of its brands via quarterly surveys with consumers. One aspect of this was to collect data on brand awareness relative to competitors. Three measures were used as shown in Table 9.
Table 9 Brand Recall and Awareness for Leading Nut Brands Measures: Top of Mind: “Which brand first comes to mind when you think of snack nuts?” Unaided Awareness: “Which brands of nuts are you familiar with?” [multiple answers permitted] Aided Awareness: “Which of the following nut brands have you heard of?” [recite] Blue Diamond Wonderful Planters Almonds Emerald Nuts Pistachios
Top of Mind 71% 2% 2% 1% Unaided Aware 81% 16% 20% 3% Aided Aware 92% 84% 68% 26%
Source: Planters Brand Health Tracker, IPSOS, Wave 3, 2012 (August/September 2012).
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IIb. Planters Brand Equity
To move beyond the various awareness measures, and to understand Planters brand strength, a “brand equity” measure was calculated. An extended Brand Health Tracker study by Ipsos included a broadly accepted and utilized brand equity measure. Extensive use of the method established benchmarks to better interpret an individual brand’s scores. Five attribute measures were included as shown in Figure 3; Planters scored 50% higher than Ipsos norms on four factors and about 25% better on the fifth (familiarity). The Planters’ team’s conclusion was that Planters was an established, respected brand and that the cumulative effect of historical marketing spending/message communication was strong. The Planters brand retained its “pulling power” if used in a proper way.
Figure 3 Planters Brand Equity
Quality (150) 150
100
Popularity 50 Relevance (150) (150) Average across all brands: 100 0
Familiarity Uniqueness (125) (150)
Source: Company documents.
IIIa. Qualitative Research: In-depth Interviews
To complement this quantitative research, the team also conducted qualitative research to “hear” actual consumers speak about the brand and sense the emotional connection (or lack thereof) with the Planters brand. The first research in this mode was “Consumer Journey” work conducted in- house. A brand team member visited a respondent’s home for 30 to 60 minutes discussing the nut category, Planters and competitive brands. They then went to the store with the respondent on a simulated shopping trip to investigate questions such as: How do you “see the shelf?” What competes with what in snacking?
A key finding here was the distinction consumers made in the Planters name as applied to core products (peanuts, cashews, and mixed nuts) and the growth products—almonds and pistachios. Overall, Planters was well known and regarded for high quality nuts. The brand was consistently most associated with peanuts and consumers perceived less “fit” of Planters to almonds and pistachios.
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IIIb. Focus Groups
A second qualitative study was the October 2012 “Planters Snacking Nuts Lapsed User Qualitative Exploratory” conducted for Planters by JSC Consumer Insights. In this qualitative study, six separate groups (6 individuals in each) were assembled—three each with male and female head of households. Participants were ages 45–65 and from households where nut consumption was frequent, Planters had been purchased 2 or more times in the past year, but the last two nut purchases were not Planters brand. As a stimulus for the focus-group conversation (lasting two hours) each participant was asked to create a collagec “bringing to life their feelings and image perceptions” of Planters and also go to the store and buy their “usual brand” and bring it to the focus group. Table 10 summarizes the results with general points and illustrative quotes from the focus group discussions.
Table 10 Focus Group Results
General Point Illustrative Quote
Nuts Overall Eating more nuts and types “I grew up on peanuts but now I like the less common ones better. They’re more flavorful.” “There are so many nuts now –we’re always like, “oh, let’s try this.” Driven by health perceptions “I used to avoid nuts because they’re fattening, but then I learned about ‘good fat.’” Natural/less processed “Nuts are from the earth, a real, whole food.” A good source of protein and energy “Nuts: you need just a handful—they’re substantial.” Still great for entertaining “It’s nice to serve nuts for your guests—it shows you care more.”
Specific Nut Types Peanuts are the “basic nuts” “Peanuts are the utility player. They’re not special, but they’re cheap and get the job done.” Mixed nuts are the entertaining choice “I always get mixed nuts for company because people can pick out their favorites.” Cashews are upscale but worth it; but health “Cashews are the most delicious nut. They’re worth the extra concerns dollar.” “You gotta be careful with cashews. They’re rich and very fattening.” Pistachios are upscale, distinctive, and fun “Pistachios are delicious and they’re kinda fun, if you’re in the mood for shelling.” Almonds are the healthy nut but flavor only “Almonds aren’t my favorite nut, but I like those smoked ones.” liked, not loved.
Planters Brand Imagery Planters imagery includes High quality “…the best name in nuts” Nostalgia “Planters has a warm and fuzzy feel for me.” Upscale “…a fancy brand.” But also: Costly “…too expensive” “I still like you, but money talks.” Outdated “old-time, fancy cocktail party” “Planters makes me think of the 1950s.”
c The use of imagery and this “collage” technique had proven useful in many market research situations in eliciting thoughts or reflections the consumer might otherwise not be able to articulate.
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Perceptions of Store Brands Generic, simple, but cheaper and improving “I feel good about buying Nice [store brand] because I’m saving in quality money for my family.” “Great Value [store brand] looks plain, no frills. But it’s so much cheaper.” “When nuts hit $3.50, that’s when I went generic…” “Store brands have gotten better.” “It’s the difference between ‘good’ and ‘great.’ I’m fine with ‘good’ if it saves $3.”
Shopping Behavior Move quickly through aisle “I look around a bit, but not long. It’s pretty grab-and-go.” Looking for sales “I’ll glance at Planters if there’s a sale. But I know the generics will be cheaper so I usually go straight for those.”
Source: Planters Lapsed User Study, ISC Consumer Insights.
IV. Nut Consumption Demographics
Since the current positioning of the Planters brand defined the target by demographic variables (i.e., male, age 35–65), the team accessed data on the demographics of consumption. Results for age are in Table 11a. Results for gender are in Table 11b.
Table 11a Nut Consumption by Age Category and Index to U.S Adult Population
(2) (1) % of US Population Consumption Rate Age Category % of Nut “Eatings” over Age of 18 Index = 1 ÷ 2
65+ 28.7% 17.1% 168 55–64 24.0% 15.5% 155 45–54 21.1% 19.1% 110 35–44 11.8% 17.5% 67 25–34 9.2% 17.7% 52 18–24 5.1% 13.0% 39
Source: Company documents.
Table 11b Snack/Nut Consumption by Gender
% Consumed % Consumed by Females by Males
Snacks Overall 55% 45% Nuts 52% 48% Nut Types: - Peanuts 44% 56% - Cashews 48% 52% - Almonds 57% 43% - Pistachios 59% 41%
Source: Company documents.
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V. Claim Believability and Impact
Finally, the team focused on what one might say about peanuts if communicating about it became a core part of the strategy. In this research, a respondent was shown five statements at a time and asked to choose the most and the least motivating statement as it relates to purchasing more peanuts than they currently do. Respondents completed this choice exercise six times while the statements varied throughout the process. The output of the choice exercise was calculated into a Purchase Intent Index that was used to compare reactions across the statements. Respondents also evaluated each statement on believability. These results, accumulated across a broad set of respondents, are in Table 12.
Table 12 Claim Believability and Impact on Purchase Intent
Purchase Intent Claim Believabilitya Index (PII)b
Each serving of peanuts has 7 grams of protein, is a good source of fiber and is a natural source of 6 essential vitamins and minerals 79 192 Peanuts are nature’s fuel, providing 7 grams of protein and a good source of fiber 83 156 Peanuts are a good source of 6 essential vitamins and minerals 79 147 The majority of fat in Peanuts is “good fat”—unsaturated, monounsaturated and polyunsaturated 74 145 Peanuts have zero grams of trans fat per serving and are a cholesterol free food 76 138 Peanuts can help replenish you after a workout because they have electrolytes and 7 grams of protein 62 120 Peanuts have more energy boosting protein than any other nut 52 139 Peanuts are as nutritious as pistachios—peanuts have similar levels of protein, fiber, and calories as pistachios 75 74 Peanuts and almonds have similar levels of protein and fiber 56 77 Peanuts are just as nutritious as almonds 50 70
Source: Planters Internal Research, Strategic Marketing, Inc, (dba SMI-Alcott), Sample Size: n=400, January 2013. aBelievability = % of respondents who judged claim to be completely or very believable. bPurchase Intent Index = indicator of impact of claim on intent to purchase peanuts among survey respondents.
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Action Planning
Magnesen had been part of the team working on the split into Mondelez and Kraft Foods Group, so was quite familiar with the challenges facing Planters. Uniformly Planters was seen as a “brand with a great history” but lately the business had been struggling with relatively low margins. Prices of nuts were volatile overall and for almonds and pistachios, Kraft often procured them from the parties it also competed with.
At his appointment, Magnesen had been assured of the degrees of freedom he had to design and implement a turnaround plan. As he put it, “everything was up for debate and change.” Procurement and manufacturing capabilities were already being improved; what marketing actions should be undertaken to make Planters a key brand in the new Kraft Food Groups portfolio? Specifically, was the current positioning appropriate or should it be modified? Should the company refocus on the “leaky bucket” of peanuts, cashews, and mixed nuts or attempt to grow share in the fast growing almond and pistachio categories? How should it communicate with customers in a competitive product category with high levels of competitive spending?
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Exhibit 1 Mr. Peanut through the Ages
Source: Jugular NYC, blog, August 18, 2013, accessed at http://www.jugularnyc.com/archives/201308#.Vbj2fPlVhBd on May 13, 2015.
Exhibit 2 Current Packaging Examples
Source: Company documents.
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Exhibit 3 NUT•rition Co-branding with Men’s Health
Source: Company documents.
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Exhibit 4 Sample Print Ads from 2009–2012
Source: Company documents.
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Endnotes
1 Kraft company records based on Ipsos Research.
2 Nielsen Panel, xAOC, 52 weeks ending 2011.
3 Kraft company records.
4 Global Almond Usage, from Almond Board of California website, http://www.almonds.com/consumers/about- almonds/global-almond-usage, accessed June 23, 2015.
5 History of American Pistachio Growers, from American Pistachio Growers website, www.americanpistachio/org/power-of- pistachios/history, accessed June 22, 2015. 6 “Who We Are,” Wonderful Brands website, http://www.wonderful.com/who-we-are, accessed July 1, 2015.
7 “Who We Are,” from The Wonderful Company website, www.roll.com/who-we-are, accessed May 15, 2015.
8 “Wonderful Pistachios Invites America to ‘Get Crackin’”, October 5, 2009 company press release.
9 Wonderful Press Release, “Wonderful Pistachios ‘Get Crackin’ Ad Campaign Tops Nielsen Charts,” December 1, 2009.
10 Paramount Farms Press Release, “Marketing and Innovation Spur Growth for Paramount Farms and Pistachios,” October 15, 2011.
11 Wonderful press release, “Wonderful Pistachios Cracks a Top Spot in Chip Dominated “Salty Snack” Category,” February 1, 2011.
12 Paramount Farms Press Release, “Marketing and Innovation Spur Growth for Paramount Farms and Pistachios,” October 15, 2011.
13 Lukovitz, Karlene, “Wonderful Pistachios Unveils New Get Crackin’ Ads,” Marketing Daily, September 17, 2012.
14 www.americanpistachios.org/power_of_pistachios, accessed May 15, 2015.
15 Ibid.
16 Blue Diamond Growers, 2012 Annual Report, p. 10.
17 S. Humble, Almond Board of California, “Creating Healthy Demand for Almonds in the United States,” at www.almonds.com/sites/default/files/content/attachments/creating_consumer_demand_aroundtheworld_1.pdf, accessed May 15, 2015.
18 Kraft company records.
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