Selling baked beans has not been easy for at least the past 15 years, and even in the preceding decades, it was no walk in the park. The belief that selling such a simple household staple must be an equally simple process is all too common, and not exclusive to those who have never worked in, or been close to, the category.
The experiences of former Heinz UK vice-president of brands Scott Garrett reveals how the brand, once famous for claiming to 'mean beanz', has allowed itself, even with the benefit of category ownership, to become ponderous and risk-averse.
Mean Beanz - the spiced-up line extension, as opposed to the famous strapline - is one of the few launches to have made it through Heinz's restrictive innovation funnel. When it comes to innovation, it could learn a lot about improving the flow of product development from its own top-down ketchup bottle - make the process easier, and ensure something comes out at the end with every squeeze.
Heinz is not alone in its innovation paralysis. At Marketing's recent Consumer Marketing Forum, marketers from companies operating in similar categories to Heinz voiced their frustration at the systemised restriction of product development from within their own organisations. Though the blockages varied from plant capacity and cannibalisation of existing lines to locked promotional budgets, the outcome, or non-outcome as is more often the case, is the same.
Heinz's innovation record is the one under the spotlight, though, as so much is riding on its improvement to pull it out of its commercial woes. Having an aggressive corporate raider on its back, all too willing to point out the apparently obvious connection between low innovation, high trade spend and years of falling income, has focused its business mind on the one area that could add value to a genuinely enviable portfolio of consumer brands.
One $300m-sized glitch in the plan is the demand being made on Heinz's trade spend - or 'deals and allowances', as the company describes it.
That figure represents the saving demanded by outspoken and out-of-patience investor Nelson Peltz's Trian Group, which has been rejected by Heinz chairman and chief executive Bill Johnson as unrealistic, particularly given the muscle-bound attempts of UK retailers to push the trade spend in the other direction.
A surprising ally has come in the form of Gianni Ciserani, vice-president of Procter & Gamble. Though the frustration is widespread, it took Ciserani to warn a wider audience than the marketing community that price promotions are reducing the spend available for research and development. His speech to the Institute of Directors last month has garnered support and begun to make ripples in the City.
For Heinz and companies like it, shareholder demand for value creation through innovation, and a kicking of the trade-promotion habit, may be just what is required to unblock the innovation pipeline and sweep all - supermarket demands included - before it.
- The trouble with Heinz, page 26.
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