HEINZ Ketchup king pours on marketing blitz
The company is boosting spending by at least $150 million a year.
PITTSBURGH (AP) -- Standing behind one of the world's most recognizable labels and its "57 varieties" slogan, H.J. Heinz Co. continues to ramp up a sustained marketing campaign both domestically and internationally.
Heinz told analysts this week that it expects to increase spending on marketing by $150 million to $200 million in fiscal 2003. Spending on trade and consumer promotions was increased by $257 million, or 11.6 percent, to $2.48 billion in 2002, according to the company.
Heinz ketchup already has a 60 percent market share in the United States and a 72 percent market share in the United Kingdom, according to the company.
Heinz reported sales of $9.43 billion in fiscal 2002. Company officials said the marketing budget may be pegged to annual sales -- as high as 5 percent of net sales -- by 2005.
And more money will be going to fewer product lines.
Heinz shed its tuna, pet food and several other businesses late last year in a huge deal with Del Monte to focus on strong revenue-generating products, including the ketchup that made Heinz a household name.
"We have always been a marketing-driven company and we have returned the focus to our core brands," said Casey Keller, who heads marketing and innovation for the company's major brands. "We have put our best talent, resources and increased investment on growth and building those core brands."
Heinz paid $57 million to slap its name on the new Pittsburgh Steelers home field, which is walking distance from company headquarters. Last year, the company revived its well-known "Anticipation" ads from the 1980s, this time to sell an innovative, upside-down ketchup bottle.
Image is everything
Experts who follow Heinz have long said image and sales are essential for the ketchup-maker. Analysts were in Scottsdale, Ariz., this week for the Consumer Analyst Group of New York and several did not return calls for comment.
Marketing of Heinz' core products topped the list of business imperatives given to analysts this week by William R. Johnson, president and chief executive officer of Heinz.
Johnson called Heinz "the most international U.S.-based food company, with approximately 60 percent of sales coming from outside the U.S."
Company officials said its focus will be on the company's big brands, with an eye to developing markets.
Looking to the east
Heinz said it has made key acquisitions in China and Indonesia in part to help build a framework for marketing Heinz, the brand. The company purchased ABC Indonesia in 1999, a soy sauce company, as part of that business model.
"We can use the strength of the ABC brand, which is No. 2 in the world," said Keller. "The strategy has been to find a strong local brand and, using the framework and distribution network, build that brand and distribute our brand as well."
In China, baby food is already distributed under the Heinz brand name, as is ketchup, Keller said.
"The return to an emphasis on marketing is not just in the U.S., it's worldwide," Keller said. "We have a strong marketing effort in Australia and in New Zealand where we sell Watties [soup and beans]. We have started driving brands in those markets with increased marketing investment."