Inside Pinnacle's playbook

by Monica Watrous
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Pinnacle has evolved its Birds Eye brand to include additional benefits and usage occasions with products offered at various price points.


BOSTON — A year ago, Pinnacle Foods Group had lost market share on two of its largest brands, Birds Eye and Duncan Hines. Efforts to reinvigorate both businesses over the past 12 months have paid off. Pinnacle has reclaimed leading positions in the categories in which the brands compete.

But whether it’s frozen vegetables or cake mixes, Pinnacle’s playbook may be applied to any brand in the portfolio, said Bob Gamgort, chief executive officer of the Parsippany, N.J.-based company, during a Sept. 4 presentation at Barclays Back-to-School Consumer Conference in Boston.

“It's about knowing where you have to be price competitive and where you don’t, and innovating to allow yourself to margin up and drive a better profit mix across the entire business,” he said.

Since acquiring the Birds Eye business in 2009, Pinnacle has built the brand beyond the traditional block of frozen vegetables. Today, Birds Eye is comprised of three categories: core vegetables, steamed vegetables and side dishes, and multi-serve and skillet meals.

Pinnacle has refreshed the brand by adding value and usage occasions, with steam-in-bag technology, chef-inspired meals and side dishes, on-trend vegetables and convenience benefits.

“And it really gives you the roadmap for how we think about taking what was once a basic, fairly commoditized category and brand and increasing its value by adding different benefits and different price tiers,” Mr. Gamgort said.

An example is the Recipe Ready product line, which was introduced last year and features blends of pre-chopped vegetables for easy meal preparation.

“But the benefit to us is that we’re able to take even core non-steam vegetable and trade people up to a higher premium and obviously a higher margin for us,” Mr. Gamgort said.

The company has segmented its Duncan Hines franchise into three tiers, from lower-priced classic cake mixes to the premium Decadent line.


Let them bake cake

Pinnacle has executed similar strategies to rejuvenate its Duncan Hines franchise. The company segmented the brand’s portfolio from a single benefit and price point to multiple tiers, from classic cake mixes to the higher-priced Decadent line.

“What we realized is you have to be sharp on your price point,” Mr. Gamgort said. “If you let your price points get out of line with competition, people will switch, because this is the more commoditized segment of baking. But baking is not a commoditized category, in total. There’s a tremendous amount of interest in these reality baking shows, there’s a lot of interest in young people around baking, and they invest a lot of time when they bake. So if you can give them a slightly better result, or I should say a much better result at a slightly better price, they gravitate towards that.”

Duncan Hines’ classic line includes basic cake mixes, such as classic yellow and devil’s food. The middle-tier Signature varieties include French vanilla and fudge marble. Products in the Decadent line, which Pinnacle added several years ago, contain frosting and pastry bags.

“And Decadent is when you allow somebody who doesn’t know much about baking to take their game up to a level that’s near bakery or restaurant quality,” Mr. Gamgort said. “We’re charging a premium, but it’s still a remarkable value to consumers. So the homerun product that really got this going was red velvet filled cupcakes with the pastry bag inside. You can produce that entire box of those cupcakes for less than the price of one cupcake at a specialty shop. So it’s huge value to the consumer, allows them to up their game, margin-accretive for us, and that’s why this works very, very well.”

Recent innovation in the Decadent line includes brownie mixes and limited-edition cake flavors. The company also bolstered its digital and social media marketing for the brand.

“Not every food category is applicable to social media,” Mr. Gamgort said. “People who bake are typically really proud. It’s more than food. It’s kind of a hobby, and so they love to share their recipes and their pictures, and we now, on our Facebook site, have more than 2 million fans that are following or tracking with Duncan Hines on social media.”

Salad days ahead

In the year since its acquisition of Wish-Bone salad dressings, Pinnacle is examining opportunities to push the brand out of its No. 3 position.

“One of the things that we talked about at the time of the acquisition is this is a category where one brand, and it wasn’t Wishbone, one brand had a 90 share of voice,” Mr. Gamgort said. “Nobody has been marketing or innovating in this category, and we saw that as a tremendous opportunity.”

Pinnacle has tapped into Wish-Bone’s top positioning in the Italian dressing subcategory by marketing the product’s use as a marinade.

“And when consumers use it as a marinade, they use significantly more product than when they use on their salad,” Mr. Gamgort noted. “So we played off the Italian heritage, and we start moving forward from there with lots of recipe ideas that go beyond just salad dressings.”

In a marketplace challenged by weak demand, increased promotion and inflation, Pinnacle said it has outpaced its categories by designing a resilient business model that delivers consistent performance.

“I think you can take that playbook of how we do that and apply it to just about any other brand in our portfolio,” Mr. Gamgort said.
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READER COMMENTS (3)

By LOUISE BALLEW 2/11/2017 7:04:30 AM
what does this mean?

By Louise ballew 2/11/2017 7:02:21 AM
I HAVE LOOKED FOR CARAMEL CAKE MIX. CANNOT FIND IT.

By Louise Ballew 2/11/2017 6:59:39 AM
I have looked for Caramel Cake Mix for a long time. Do you not make it any more?