Ganging up on No. 1 in the $820 million-a-year baby food market is almost mission impossible, even when No. 2 acquires the No. 3 brand.
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With 73 percent share, Gerber Products still terrorizes competitors in baby foods, but perhaps H.J. Heinz Co.’s acquisition of the Beech-Nut brand, announced earlier this week, will make things a bit more competitive.
The combination of Heinz baby food and Beech-Nut, part of St. Louis-based Milnot Holding Corp., being acquired by Heinz, accounts for 26 percent of baby foods sold at supermarkets and selected retail outlets, according to recent data from Information Resources Inc.
Heinz, No. 2 including sales of its Earth’s Best, an organic baby food marketed by Hain Food Group, was barely ahead of Beech-Nut for a 52-week period ended Jan. 30, reports IRI. Sales were barely over $100 million for each of them.
More marketing muscle, new products and better distribution should help both Heinz and Beech-Nut.
“We’ll give them [Gerber] a better battle” with Heinz and Beech-Nut on the same side, says Milnot marketing vice president Sal Stazzone, a native Chicagoan.
Gerber (annual sales pushing $600 million), a unit of Summit, N.J.-based Novartis’ U.S. operation, has tripled its advertising budget to $20 million-plus annually over the last three years.
Heinz has spent minimally on advertising its baby food; Beech-Nut’s budget has been around $1.5 million annually, though the brand has had aggressive direct marketing.
Beech-Nut has bounced around. Over the last four decades its parents have included Nestle, Ralston-Purina and Bristol-Myers (now Bristol-Myers Squibb).
Heinz acquired Milnot from Chicago-based Madison Dearborn Partners, one of at least two private equity firms that have owned Beech-Nut, which has been around since the 1930s, as has Heinz. Gerber came out in 1928.
Heinz and Beech-Nut may make some in-roads on Gerber’s leadership, but the best channel might be to expand the 96 percent of households with babies who use prepared baby foods. One goal also may be to keep the 4 million babies eating junior foods longer.
FCB lands Boca Burger: As expected, Kraft Foods has picked a new agency for Boca Burger, tapping FCB Chicago for this soy-based meat alternative that had 1999 annual revenue of nearly $40 million. Kraft is eyeing much better numbers, expected with increased distribution and stepped-up advertising in the $500 million meat alternative market, where Gardenburger Inc. (an ad account with Rubin Postaer & Associates-Chicago ) and Worthington Foods are among competitors. FCB, which has a number of other Kraft assignments, succeeds Chicago Creative Partnership on Boca Burger. The latter agency did more than a commendable job on Boca Burger, but Kraft has its own set of agencies.
TruServ COO: Brian Schnabel moved up to chief operating officer of TruServ Corp., the member-owned wholesale cooperative, primarily serving 8,000 True Value stores. Schnabel, previously executive VP of business development, reports to Donald J. Hoye, president-chief executive officer. Schnabel’s former post is not being filled. Schnabel has been on a fast track since he joined TruServ 18 months ago as executive VP, his responsibilities later expanded. Other personnel: Greg Billie, a former VP-Midwest sales for U.S. News & World Report and Fast Co., became director-Midwest sales for pogo.com. … Former McDonald’s Corp. media boss Bruce Smith, who recently became general manager for sports-related products at Tribune Interactive, left to pursue other interests.
– DDB Chicago swept “Best of Show” while that agency and Leo Burnett USA won most of the Windy Awards recognizing the best in Chicago-area advertising at a Chicago Advertising Federation dinner Thursday. DDB won Best of Show in print for Greater Chicagoland Chapter of the Alzheimer’s Association. Ditto for radio and TV commercials on Budweiser for Anheuser-Busch Inc. DDB won a total of 11 Windys, and Burnett picked up 10. Other multiple Windy Awards winners were Young & Rubicam Chicago (three), and Lowe Lintas & Partners Chicago (two).
Strictly Personal: Birthday greetings Friday to Florence Dell Oliva, 80; Timm Amundson, 43; Nina DiSesa, 54 (McCann-Erickson New York); Rhonda Wheatley, 28, and Eric D. Koenig, 39. On Saturday to Tommy O’Neill, 45 (Keebler); Jerry Brennan, 37 (Newsweek) and PR consultant Jahn Marie Parise, 30. On Sunday to James A. Paglia, 48; Emily Bruning 25; attorney Joel G. Shapiro, 39; consultant Jack Cudd, 70; Tom Cox, 43 (Ridge Realty); and Laura Desmond, 35 (Leo Burnett Co.).