When Premier Foods acquired Hovis as part of its £1.2bn takeover of the bread brand's owner RHM in 2006, the deal, which doubled Premier's size, was met with acclaim in the City, sending its share price through the roof.
It seemed a canny acquisition. Hovis had, after all, dominated the UK bread market since the late 90s, and remains a major player as the UK's 10th biggest supermarket brand in 2007, according to TNS Worldpanel's Biggest Brands survey. However, it has been toppled from its top spot in the bread sector by Warburtons.
While Hovis could lay the blame on rocketing wheat prices, which have affected food manufacturers across the board, cost does not seem to be as significant a differentiator in the bread sector as one might imagine. Warburtons' success, for example, has been credit-ed to the promotion of its quality, rather than any promise of lower prices.
On the upside, Hovis has amassed an enormous amount of brand equity during its 120-year history and cannot be accused of resting on its laurels.
While some of its marketing remains traditional, harking back to its nostalgic TV ads of the 70s that gave Hovis a whole-some Northern image, despite being filmed in Dorset, the brand has stuck to a programme of innovation.
In 1998, for example, the Hovis moniker was revamped to include 3-D-effect lettering, while a relaunch in 1999 brought the introduction of on-pack 'Slice advice' to promote the bread's nutritional value. In 2001 the brand redesigned its packaging, rolling out a 'Big Food' format aimed at achieving greater standout. Later that year Hovis launched its Best of Both variant - a bread that claimed to possess the taste of a white loaf, but with the 'goodness' of wholewheat.
This year Premier Foods handed Hovis' advertising account to McCann Erickson, moving it from DDB London and indicating that a fresh campaign could be on the way.
It could not be more timely, as Hovis' problems are set to get worse; earlier this month, Premier admitted that it had yet to pass the full cost of rising wheat prices, which have doubled since last summer, on to consumers.
Can Hovis find its way back into the nation's sandwich boxes? We asked James Mundell, director at Ipsos MORI, and Pete Grenfell, account director at inferno, who has worked on the Whole Earth Foods Business.
Diagnosis 1
James Mundell director, Ipsos MORI
Apparently 61% of people can hum the 'Hovis music'. This is quite some feat given that the nostalgic ads have not been on TV for 25 years and 40% of the population is under 30. Jeepers! Just how good was that advertising?
The current woes of the Hovis brand are being partly blamed on rising wheat prices and Hovis' need to pass these on 10 weeks ahead of its competitors. That the brand suffered quite so much is indicative of deeper problems. Brands that enjoy strong attitudinal equity are not very susceptible to short-term price changes, and Hovis just doesn't have this any more.
Best of Both and Invisible Crust have been great successes for Hovis, but consumers are turning back to qualities of natural, home-made and local. This is precisely the spirit that underpinned the nostalgia ads.
The good news is that people are slow to forget, as evidenced by their memories of Dvorak's New World Symphony. As the true proprietor of simple, honest-to-goodness positioning in the bread sector, this spirit is there for Hovis to recapture.
Remedy
- Get the focus back on simple, natural goodness, the core of Hovis' equity, built up by the nostalgia ads of the 70s.
- It's time to talk more about the core brand and less about the variants, such as Best of Both and Invisible Crust.
- Recent brand advertising has been bland. Re-establish a strong character for the brand.
- Clarify the brand's big idea. It used to be wheatgerm. What is it now?
Diagnosis 2
Pete Grenfell account director, inferno
Whether you're in the supermarket, farmers' market or even Whole Foods Market, bread-buying today seems to be influenced less by the brand and more by the quality and origin of the product.
So in a world of stone-baked ciabatta, German rye and organic spelt loaves, even in convenience stores, it is little wonder that good old Hovis and its plain sandwich white and brown options are left looking a little stale.
But is Hovis missing a trick? Trends toward locally-sourced natural produce play to the original Hovis brand values, defined so memorably in that ad. Yet it seems to be stuck battling it out against Kingsmill, Warburtons and supermarket brands, each offering nondescript loaves in bland plastic packaging.
Is this really where it wants to be? Hovis could consider a change to open-ended, rustic, paper packaging, like a French baguette, making Hovis feel more like an artisan product at everyday prices. Rather than remaking its 70s ad, Hovis could contemporise and tell us how the brand has moved on.
Remedy
- Change the packaging. If Hovis is proud of its bread's authenticity, don't leave it hidden inside synthetic mat.
- Extend the brand into retail. With decent bakeries so thin on the ground, introduce a range of branded outfits to bring the taste and smell of freshly baked Hovis to the high street.
- Tell us what makes Hovis' bread special and different from the competition. Is it the flour, the baking technique or the people?