Large consumer packaged goods companies are not unlike massive cruise ships, blessed with enough sheer power and momentum to glide through the waters of business and marketing with relative ease, while smaller competitors expend maximum effort just to keep the engines running. But large ships are also more difficult to steer, and CPG heavyweights can find it harder to change direction when a course correction becomes necessary.
Viewed in this light, Kraft Canada is a unique kind of ship: a huge, multi-brand powerhouse that, despite making several changes to its corporate culture and marketing approach in recent years, performed at top speed throughout the past year. It’s good to be big. It’s good to be nimble. Being both makes Kraft Canada our Marketer of the Year for 2008.
But the company’s path to this honour was cut with a zig-zag pattern, not a straight line. Three years ago, Kraft moved to a centralized structure that put decision-making for all of its markets in the hands of U.S. executives. The change allowed the company to leverage its global scale and standardize some of its operational practices, but it also came with a significant downside.
“We lost a little bit of the feel for local markets and, quite frankly, our consumer base,” admits Kraft Canada president Dino Bianco. “Not every country and not every category [works] the same across the board.”
Not every company is the same, either. And while many major corporations would be willing to sacrifice local expertise for the convenience of centralization, Kraft recognized that it needed to strike a balance between the two. Thus, in January of 2008, Kraft set another new course, one that maintained the advantages of a consolidated structure-the sharing of marketing ideas, product innovation and research and development across global markets-while allowing for more input from local marketing executives.
“Our decision was based on the fact that food is still a very local and emotional category,” says Bianco. “We touch consumers… across the whole day, and we felt that moving closer to the local market was the way to go.”
Bianco is quick to point out that Kraft still takes ideas from its U.S. and international counterparts when it makes sense for the Canadian market. And, he says, the Canadian arm benefits from the company’s collective thought leadership and research resources. Only now, he and his Canadian marketing team are steering their own ship.
“We ultimately make the decisions on the ideas, on any modifications of a [U.S. or international] idea for Canada, and how we present it in the Canadian marketplace,” says Bianco. “It’s almost like going to a buffet table as a Canadian group and picking and choosing which foods we want to eat.”
As to how Kraft’s menu selections have worked out so far, the proof is in the pudding. Or more accurately, the cereal bowl, the coffee cup and the cracker box. Kraft Canada kicked off 2008 with the Diamond Shreddies campaign, an initiative that became one of the most talked-about advertising efforts of the year. Seeking to spark fresh conversation about the cereal without making any changes to the product itself, Kraft and Toronto agency Ogilvy & Mather developed the campaign that presented the “diamond” Shreddie-a regular Shreddie, rotated 45 degrees-as new and distinct from the brand Canadian consumers were familiar with.
“The Shreddies brand is a Canadian icon and one of the largest in the cereal category, but unfortunately we had neglected it for a few years and that had shown in lost market share,” says Bianco. “We approached the agency, saying we wanted to talk about [Shreddies] in a new way.”
Some-like the Clio Awards jury that awarded it a Grand Clio in the Integrated Campaign category in May-loved Diamond Shreddies. Others disliked the concept. But it succeeded in producing conversation about the brand, including a Maclean‘s report about the origins of the campaign.
And that, says Nancy Vonk, co-creative director at O&M, was exactly the point.
“We thought it was such a good joke and that people would enjoy it and that people would do what they did, which was talk about it,” says Vonk. “And I love that Kraft was big enough to go ahead and make fun of itself.”
“It’s a good lesson that brands don’t die, they’re killed,” says Alan Middleton, assistant professor of marketing at York University, and a member of the panel of advisors Marketing consulted with when picking this year’s top marketer. “What Kraft has managed to do is say, ‘There’s no reason for this brand to be dead.’ ” He adds that the company is experiencing a “bit of a renaissance. I would say this is renaissance-Kraft.”
Like “nimble,” “fun” isn’t a word typically associated with CPG giants. But after decades of safe, traditional marketing, Kraft has lightened up considerably in recent years, making a point to consider new, off-the-wall thinking. It’s a culture shift of a different kind that has allowed Ron Tite and his agency, Sharpe Blackmore Euro RSCG, to apply more creativity to its work for brands such as Ritz and Premium Plus.
In the past year, Kraft has launched campaigns for both cracker brands. For Ritz, it reconnected with consumers with a campaign that included a TV spot in which a young boy leaves a trail of the round snacks to woo his female crush. Kraft also sexed up the normally staid Premium Plus label with ads that show the crackers creating impressive splashes when dropped into bowls of soup.
“What they’ve been able to do-which is fantastic-is take some of these older brands and contemporize them without alienating their traditional customer base,” says Tite, the agency’s vice-president and creative director. Kraft Canada’s newfound irreverence, adds Tite, can be credited to Bianco, the company’s captain.
“He really challenged us on Premium Plus and said, ‘Don’t just give us what we expect to get,’ which is huge for a CPG. It starts with [Bianco] and goes down to the vice-presidents and brand managers.”
As vice-president of marketing, beverages for Kraft Canada, Bill VandenBygaart is one of the officers who implemented the increased Canadian focus and creativity that now powers the company ship. For example, his group’s Canadian execution of the Maxwell House “Brew Some Good” campaign-an idea that originated in the U.S. offices of Kraft and O&M-illustrates the company’s flexible approach to Canadian marketing.
Unlike the Diamond Shreddies case, Brew Some Good was initially prompted by a change to the product. Kraft was looking to promote its switch to 100% Arabica coffee beans, but VandenBygaart knew that Canadian consumers needed to hear a message that went beyond a simple upgrade in quality. Thus, while the U.S. campaign relied on traditional television spots as the primary marketing vehicle, Kraft’s campaign leaned heavily on sampling, grassroots initiatives and a partnership with Habitat for Humanity to give additional meaning to the “good” in Brew Some Good. To stress the point on TV, O&M created an ad that simply showed a cup of coffee under the copy, “The average TV ad costs $245,000….This one cost $19,000” before asking “Where should we spend the difference?” and inviting viewers to nominate a good cause. Later in the year two equally bare-bone ads showed that Kraft had donated some of its ad budget to help train guide dogs and fund an inner city music program for kids.
“The emphasis was on the emotional character of the brand and the emotional benefit,” says VandenBygaart. “We went a bit higher up that ladder than they did in the U.S., where it was more focused on the functional side of things and the Arabica beans.”
As a result, says VandenBygaart, Kraft has landed on a concept that has staying power. “We’ve done several different campaigns over the past decade or so, but Brew Some Good really has the potential to carry us for a long time. It’s not really a campaign-it’s a brand identity that can carry us forward.”
Kraft is certainly in an excellent position to move forward after a year of dynamic, award-winning campaigns that got consumers talking about old products in new ways and yielded positive bottom-line results. While he wouldn’t provide specifics, Bianco says that Kraft has “been able to grow our share in the majority of our categories” and that sales and revenue numbers are strong.
“Our model for 2009 will continue to rely on increasing the quality of our products and the quality of our communications,” Bianco says. “For us, it’s continuing to do the basics right, and it all begins and ends with the consumer.”
Kraft’s voyage has included many detours that could have set the company back. But with Bianco at the helm and a new philosophy that balances global efficiency, local knowledge and creative risk-taking, it looks like smooth sailing ahead for Marketing‘s 2008 Marketer of the Year.
