Benefits central to Pinnacle Foods' innovation efforts
by Keith Nunes
PARSIPPANY, N.J. — Providing consumers with a benefit is a key element of the Pinnacle Foods Group’s innovation efforts.
Two days after the company announced plans to be acquired by the Hillshire Brands Co., Chicago, company executives held a conference call May 14 to discuss the company’s first-quarter results. One of the ground rules of the call was there would be no discussion about the merger agreement.
While Pinnacle executives steered the analysts away from discussing the proposed acquisition, there was plenty of discussion about the product categories Pinnacle participates in, most notably how to succeed in those categories when it appears consumer interest in center-of-the-store offerings appear to be waning.
“Retailers are hungry for any brand that will bring a new solution and a new set of consumers potentially into any section of the store,” said Bob Gamgort, chief executive officer.
He noted that taking a product from one part of the store to another requires transferring the benefits of a strong trademark that exists in one product format into another format, as long as a company is delivering the same benefit that exists. Mr. Gamgort used the Wish-Bone brand as an example.
“Wish-Bone is a leader within the pourable salad dressing (category),” he said. “The total salad dressing category has been growing about 2% per year.
“We’ve taken a look at that and said, how do we get into the refrigerated side of the portfolio because the Wish-Bone brand is completely extendable into that, especially in a premium format? And yet, we haven’t had the capability to do that and refrigerated salad dressings have grown nicely
“ … Brands stand for benefit and they don’t stand for a temperature state or a format … And what we do with our innovation pipeline is we try to extend that brand’s benefits into other forms.”
For the first quarter of 2014 ended March 30, Pinnacle Foods recorded net income of $40,748,000, equal to 35c per share on the common stock. The results were a slight increase compared with the previous year when the company earned $24,796,000, or 31c per share.
Sales for the quarter were $644,039,000, which compared with sales of $612,981,000 during the first quarter of fiscal 2013.