BOSTON – How to innovate pickles?
That was one of the challenges Bob Gamgort, chief executive officer of Pinnacle Foods, Inc., faced when he joined the company in 2009.
“(I said) if we can ever figure out a way to innovate in pickles, we know we can do any category because there is a category that hasn’t (been) innovated in forever,” he said during a Sept. 4 presentation at the Barclays Back-to-School Conference in Boston.
Enter Farmer’s Garden by Vlasic, farmers market-inspired, artisan-style pickles, which has performed “incredibly well” since its 2012 rollout, offering a testament to the Parsippany, N.J.-based company’s business strategy: Acquire, then innovate.
“We don’t create value just by buying the brands,” Mr. Gamgort said. “It’s what we do with the brands once we acquire them is where the value is generated. We tap into the existing awareness and equity that are in these brands, and we make sure that they are contemporary through innovation, renovation and some good quality targeted consumer marketing.”
To transform such iconic brands as Duncan Hines, Birds Eye, Mrs. Butterworth and the August-acquired Wish-Bone salad dressing business, a company “built through acquisitions” first had to change its approach to innovation.
“The acquisition of Birds Eye (in 2009) was transformational for us,” Mr. Gamgort said. “It was a catalyst for us to fundamentally change the way we looked at innovation. … We built a new headquarters in New Jersey, and we made the investment to co-locate all of our R.&D. into New Jersey to sit side-by-side with our marketing and sales teams. We changed the process in which we manage innovation, and to be honest with you, it is a lot more senior management involvement upfront, and we really used the opportunity as we were moving the teams around to upgrade the talent.”
The latest example of Pinnacle’s innovation efforts comes from its Birds Eye brand. To create the Recipe Ready line of vegetable-based meal starters, launching this year, the company researched the top 25 recipes prepared by U.S. consumers.
“We looked at the vegetables that go in there and we pre-blended them and pre-chopped them, so it allows them to speed up the preparation and it also reduces waste,” Mr. Gamgort said. “No longer do you have to have the science experiment in the back of your refrigerator because you used one stalk of celery for a recipe. We will do that for you. So not only is it faster, but there is no waste.”
To dream up its Duncan Hines Decadent line of premium cake mixes, which rolled out in 2010, Pinnacle took inspiration from the boom of baking reality television shows.
“We actually put a piping bag in there so that people could act like real bakers and… fill the cupcake, and it took off,” Mr. Gamgort said.
And with a “sometimes the really simple innovations are best” view, Pinnacle recast seafood from the dinner table to the lunchbox with Fish Sandwich Fillets under the Van de Kamp’s banner.
“What we found with seafood, it was really a dinnertime occasion and people are looking for more variety at lunch,” Mr. Gamgort said. “We were able to launch Sandwich Fillets, which just moves it to a light dinner and lunch, and now we are introducing spicy executions of that on our seafood business.”
Looking ahead, Pinnacle said it sees opportunities with Wish-Bone, which it bought from Unilever USA for $580 million, including co-branding opportunities with some of its existing businesses. The salad dressing brand fits nicely within Pinnacle’s portfolio and strategy, the company said.
“We are not looking to buy on the cheap and buy distressed brands,” Mr. Gamgort said. “We are looking to buy brands that are, if they are not leaders, they are close to leadership and we can get them over that finish line through some investment.”
As for the pickles, Pinnacle is set to extend its Farmer’s Garden line this year.
“We filled out some of the basics in that line, and now we are beginning to add some of the next level of varieties for people to buy in 2013.”