Supermarket GROCERY Business: Big dogs
Who says you can't teach an old dog new tricks? New flavor profiles, larger sizes, improved ingredients, and innovative advertising are transforming frankfurters from an old hound dog of a category into a frisky young puppy.
While overall sales are down slightly, volume on premium and highly advertised brands is on the upswing, boosting total annual sales to more than $1.73 billion, a 2.2-percent increase from the previous year, according to Information Resources, Inc.
"We're now seeing a focus on the hot dog as a meal," says Josee Daoust, manager of public affairs at the National Hot Dog and Sausage Council, a division of the American Meat Institute, in Arlington, Va. "Hot dogs are getting larger, and the focus is now on the hot dog as the main event, more of a center of the plate item."
One of those building a bigger wiener is Oscar Mayer. "Taste and convenience continue to be the primary drivers," says Gus Martinez, brand manager for Madison, Wis.-based Oscar Mayer, a division of Kraft. "A recent key trend in hot dogs is flavor, followed by larger size. Essentially, consumers are looking for a bigger hot dog with a bigger taste to satisfy grown-up appetites," he says, adding that Oscar Mayer has been evaluating consumer trends.
"Our newest hot dogs, the XXL Hot Dogs, reflect what consumers are looking for today, which are slightly larger hot dogs intended for mature taste and appetite." Introduced in February, XXL dogs are available in premium beef, deli-style, original smoked, and hot & spicy varieties. They retail for $3.49 for a six-count, 16-ounce package.
"We have found that taste tends to vary by region, especially with the adult hot dog consumer," says Martinez. "For instance, the XXL Deli Style Beef Franks, which have a more garlic flavor, are favored in the Northeast; whereas the Original Smoked Hot Dogs are preferred in Southern regions."
"We're seeing different combinations of spices, with things like cheddar, jalapeno, and some other Hispanic influences," says Daoust. "We're also starting to see chorizo sausage make a really big splash in the meat case."
Kosher beef franks are also gaining in popularity, and the leading national kosher brand is ConAgra's Hebrew National. "We have been able to leverage Hebrew National's kosher quality to a broader than Jewish audience," says Steve Silk, president of the ConAgra Refrigerated Foods Consumer Products Unit in Downers Grove, Ill. The division also manufactures the Armour Star, Healthy Choice, and Swift-Eckrich brands. Since acquiring Hebrew National, ConAgra has taken it national. The company has also stepped up its advertising, reprising Hebrew National's classic "answering to a higher authority" spots with comedian Robert Klein as the voice of God. "We have seen a wonderful surge in volume with this commercial," says Silk. "Our baseline on non-promoted volume has gone up in the double digits since the commercial started airing."
ConAgra's other major thrust has been behind its Armour Stars brand. A campaign centers around a dream team of Major League baseball players—Barry Bonds, Alex Rodriguez, Roger Clemens, Greg Maddux, Roberto Alomar, Frank Thomas, and Kevin Brown—singing the famous "What kind of kids eat Armour hot dogs?" jingle. While "fat kids" and "sissy kids" have been excised from this politically correct version, it is still a home run. The players' faces appear on packages, while Rodriguez, Clemens, and Alomar star in television commercials. "We have account-specific marketing programs where we have put up 6,000 life-size player stand-ups in grocery stores, with consumer promotions," Silk says.
"Over the last two years with the Armour brand we've done some meaningful repositioning to get away from being a lower-priced, highly promoted product to one that is more mid-priced," Silk says. "We increased the quality. We added more meat, better cuts of meat, and less water. That has all worked. We feel great about our quality relative to the competition, but where we've really had success is using our association with the prominent baseball players to gain notoriety for the brand."
There has been a movement by others in the industry to better cuts of meat. "Every year we survey our members on what's hot and what's not, and chicken and poultry franks are not as popular as beef," says Daoust. "For a while they were very popular, but all-beef franks have been making quite a comeback."
In the New York metropolitan area, one of the most popular brands of all-beef franks is Best. "Even though the major brands come out with new products, we maintain our shelf space," says Carmine Triola, director of sales at Best Provision Co. in Newark, N.J. "We are a premium brand and a known brand in the market, and the only advertising that we do is co-op advertising with the chains."
According to Triola, the biggest problem facing the hot dog industry is bad publicity resulting from listeria outbreaks and other mishaps. He blames a listeria outbreak early this year at another manufacturer for his company's flat sales. "When other hot dog companies, provision companies, and delis have problems, that does hurt us. It hurts the whole industry."
That same fear is helping Hebrew National. "The category as a whole has been flat, and I think that is largely because people are more concerned about food quality," says Silk. "I think that is why we've been able to gain share. Consumers tell us they don't really know what is in a hot dog, and that's why they trust Hebrew National. They feel that Hebrew National kosher hot dogs have got to be better."
With the notable exception of Hebrew National Reduced Fat and 97 Percent Fat-Free hot dogs, which have seen double-digit increases, another trend being witnessed in the industry is the decline of reduced-fat franks. "The low-fat and fat-free varieties of hot dogs are not selling like they used to," says Daoust. "People have a sense now that everything is okay in moderation, and one all-American beef hot dog isn't going to break their diet. It is about balance, and a hot dog isn't going to tip the balance." Unless, of course it's topped with mustard, relish, sauerkraut, chili, cheese, and pushcart-style onions.
While overall sales are down slightly, volume on premium and highly advertised brands is on the upswing, boosting total annual sales to more than $1.73 billion, a 2.2-percent increase from the previous year, according to Information Resources, Inc.
"We're now seeing a focus on the hot dog as a meal," says Josee Daoust, manager of public affairs at the National Hot Dog and Sausage Council, a division of the American Meat Institute, in Arlington, Va. "Hot dogs are getting larger, and the focus is now on the hot dog as the main event, more of a center of the plate item."
One of those building a bigger wiener is Oscar Mayer. "Taste and convenience continue to be the primary drivers," says Gus Martinez, brand manager for Madison, Wis.-based Oscar Mayer, a division of Kraft. "A recent key trend in hot dogs is flavor, followed by larger size. Essentially, consumers are looking for a bigger hot dog with a bigger taste to satisfy grown-up appetites," he says, adding that Oscar Mayer has been evaluating consumer trends.
"Our newest hot dogs, the XXL Hot Dogs, reflect what consumers are looking for today, which are slightly larger hot dogs intended for mature taste and appetite." Introduced in February, XXL dogs are available in premium beef, deli-style, original smoked, and hot & spicy varieties. They retail for $3.49 for a six-count, 16-ounce package.
"We have found that taste tends to vary by region, especially with the adult hot dog consumer," says Martinez. "For instance, the XXL Deli Style Beef Franks, which have a more garlic flavor, are favored in the Northeast; whereas the Original Smoked Hot Dogs are preferred in Southern regions."
"We're seeing different combinations of spices, with things like cheddar, jalapeno, and some other Hispanic influences," says Daoust. "We're also starting to see chorizo sausage make a really big splash in the meat case."
Kosher beef franks are also gaining in popularity, and the leading national kosher brand is ConAgra's Hebrew National. "We have been able to leverage Hebrew National's kosher quality to a broader than Jewish audience," says Steve Silk, president of the ConAgra Refrigerated Foods Consumer Products Unit in Downers Grove, Ill. The division also manufactures the Armour Star, Healthy Choice, and Swift-Eckrich brands. Since acquiring Hebrew National, ConAgra has taken it national. The company has also stepped up its advertising, reprising Hebrew National's classic "answering to a higher authority" spots with comedian Robert Klein as the voice of God. "We have seen a wonderful surge in volume with this commercial," says Silk. "Our baseline on non-promoted volume has gone up in the double digits since the commercial started airing."
ConAgra's other major thrust has been behind its Armour Stars brand. A campaign centers around a dream team of Major League baseball players—Barry Bonds, Alex Rodriguez, Roger Clemens, Greg Maddux, Roberto Alomar, Frank Thomas, and Kevin Brown—singing the famous "What kind of kids eat Armour hot dogs?" jingle. While "fat kids" and "sissy kids" have been excised from this politically correct version, it is still a home run. The players' faces appear on packages, while Rodriguez, Clemens, and Alomar star in television commercials. "We have account-specific marketing programs where we have put up 6,000 life-size player stand-ups in grocery stores, with consumer promotions," Silk says.
"Over the last two years with the Armour brand we've done some meaningful repositioning to get away from being a lower-priced, highly promoted product to one that is more mid-priced," Silk says. "We increased the quality. We added more meat, better cuts of meat, and less water. That has all worked. We feel great about our quality relative to the competition, but where we've really had success is using our association with the prominent baseball players to gain notoriety for the brand."
There has been a movement by others in the industry to better cuts of meat. "Every year we survey our members on what's hot and what's not, and chicken and poultry franks are not as popular as beef," says Daoust. "For a while they were very popular, but all-beef franks have been making quite a comeback."
In the New York metropolitan area, one of the most popular brands of all-beef franks is Best. "Even though the major brands come out with new products, we maintain our shelf space," says Carmine Triola, director of sales at Best Provision Co. in Newark, N.J. "We are a premium brand and a known brand in the market, and the only advertising that we do is co-op advertising with the chains."
According to Triola, the biggest problem facing the hot dog industry is bad publicity resulting from listeria outbreaks and other mishaps. He blames a listeria outbreak early this year at another manufacturer for his company's flat sales. "When other hot dog companies, provision companies, and delis have problems, that does hurt us. It hurts the whole industry."
That same fear is helping Hebrew National. "The category as a whole has been flat, and I think that is largely because people are more concerned about food quality," says Silk. "I think that is why we've been able to gain share. Consumers tell us they don't really know what is in a hot dog, and that's why they trust Hebrew National. They feel that Hebrew National kosher hot dogs have got to be better."
With the notable exception of Hebrew National Reduced Fat and 97 Percent Fat-Free hot dogs, which have seen double-digit increases, another trend being witnessed in the industry is the decline of reduced-fat franks. "The low-fat and fat-free varieties of hot dogs are not selling like they used to," says Daoust. "People have a sense now that everything is okay in moderation, and one all-American beef hot dog isn't going to break their diet. It is about balance, and a hot dog isn't going to tip the balance." Unless, of course it's topped with mustard, relish, sauerkraut, chili, cheese, and pushcart-style onions.