Make us your home page
Instagram

Companies' ads get back to basics during recession

NEW YORK

The frill is gone.

Companies are moving their ad dollars from gourmet or frivolous items to pantry staples and traditionally ho-hum household goods. Hamburger Helper, Kool-Aid drink mix and that golden oldie butter are advertising stars these days.

The new advertising is aimed not only at cashing in on the new frugality of recession-wary consumers but also fending off a flight to cheaper store brands. It also can maintain their share of a shrinking consumer-spending pie.

In some cases, the ads are paying off with higher sales.

"In this 'Great Recession' economy, companies are not simply changing the messages they place in their ads, they are doing something much more substantial," said Marc Fleishhacker, senior partner and managing director of OgilvyConsulting's North America practice. "They are fundamentally changing the products they promote."

Land O'Lakes Inc., the maker of deli cheese, eggs and butter, launched its first TV campaign for its basic butter product in 10 years. Hormel Foods Corp., which increased its spending on ads for Spam last year, began its first national ad campaign for Dinty Moore stew last fall. Sales for Spam and Dinty Moore stew rose by double-digit percentage increases in the quarter that ended Jan. 25.

Home Depot, the nation's largest home-improvement retailer, is pushing items like potting soil and hand tools under a new tag line: "More saving. More doing." Last spring, by contrast, Home Depot focused on how to create dream kitchens.

Shoppers who have noticed the new ads applaud marketers for understanding their changed psyche.

"I like the messages out there. It's less focused on consumerism and buying the best," said Andrea Beck, a 39-year-old stay-at-home mother of two from South Orange, N.J., who has slashed her spending on food and lawn care.

The shift to highlight more everyday products follows more than a decade of companies pushing $30,000 kitchen renovations, $15-per-pound cheeses and flashy jewelry as rising home values and growing stock portfolios made consumers feel flush.

No more. The recession has brought on an abrupt change in shoppers' mind-sets. Consumer spending not adjusted for inflation grew at the slowest rate since 1961 last year and is expected to remain sluggish for the rest of the year. In the fourth quarter of 2008, spending on food and nonalcoholic beverages fell 3.2 percent, according to Scott Hoyt, senior director of consumer economics at Moody's Economy.com.

In the last big recession, in the early 1980s, consumer product companies simply shrank their ad budgets, said John Greening, a 28-year advertising industry veteran and now an associate professor at Northwestern University's Medill School of Journalism.

But they can't afford to do that this time, as shoppers are shifting to lower-priced store brands, spending more at discounters, scraping the last dollop of face cream and buying more cheap canned goods and pasta.

"People are willing to settle for value-oriented products," Greening said. "It doesn't have to be the best; it just has to be the best for the value of the money."

While margarine is generally cheaper than butter, Land O'Lakes' butter commercial taps into the shoppers' new sensibility of staying at home, emphasizing that baking doesn't take a lot of fancy ingredients.

Kraft Foods Inc. is advertising Kool-Aid year-round instead of just during the summer and spring to try to scoop up sales from consumers who have cut back on soft drinks. Gregory Nesmith, Kool-Aid's senior brand manager, said more money for the "more smiles per gallon" campaign is helping boost the beverage's sales. He says that for the cost of two liters of pop, shoppers can make four pitchers of Kool-Aid.

Sales of Hamburger Helper — launched in the early 1970s, when families were struggling with soaring food inflation — and other dry meals have risen 9 percent so far this fiscal year, said Beth Brady, vice president of marketing at General Mills Inc.

One TV vignette for Hamburger Helper shows a group of workers in an elevator, wondering what they're going to serve their families for dinner. The brand's helping hand pops up with a solution: one of its dry pasta and sauce mix packets that sells for $2 a box.

Store brand is grand

Sales of store-label consumer products rose 9.1 percent to $84.8 billion in the 52 weeks that ended March 21, while the sale of brand-name goods gained just 1.7 percent to $421 billion, according to data from Nielsen Co.

Companies' ads get back to basics during recession 04/25/09 [Last modified: Saturday, April 25, 2009 4:31am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. U.S. Rep. Charlie Crist and estranged wife Carole put Beach Drive condo on the market

    Real Estate

    ST. PETERSBURG — U.S. Rep. Charlie Crist and his estranged wife, Carole, have put their Beach Drive condo on the market for $1.5 million.

    Former Florida Gov. and current U.S. Rep. Charlie Crist and his estranged wife, Carole, have put their condo in downtown St. Petersburg on the market for $1.5 million. [Courtesy of Rhonda Sanderford]
  2. First WannaCry, now cyberattack Petya spreads from Russia to Britain

    Business

    Computer systems from Russia to Britain were victims of an international cyberattack Tuesday in a hack that bore similarities to a recent one that crippled tens of thousands of machines worldwide.

    A computer screen cyberattack warning notice reportedly holding computer files to ransom, as part of a massive international cyberattack, at an office in Kiev, Ukraine, on Tuesday.  A new and highly virulent outbreak of malicious data-scrambling software appears to be causing mass disruption across Europe.
[Oleg Reshetnyak via AP]
  3. Higher Social Security payouts help Florida post a big jump in personal income

    Personal Finance

    Personal income grew 1.3 percent in Florida in the first quarter of this year, a four-way tie among all states for second-fastest growth behind Idaho.

  4. Trigaux: Task now is for Water Street Tampa to build an identity

    Business

    Adios, VinikVille! Hello Water Street Tampa.

    An aerial rendering of the $3 billion redevelopment project that Jeff Vinik and Strategic Property Partners plan on 50-plus acres around Amalie Arena.
[Rendering courtesy of Strategic Property Partners]
  5. Unlicensed contractor accused of faking death triggers policy change at Pinellas licensing board

    Local Government

    The unlicensed contractor accused of faking his death to avoid angry homeowners has triggered an immediate change in policy at the Pinellas County Construction Licensing Board.

    Last year Glenn and Judith Holland said they paid a contractor thousands of dollars to renovate their future retirement home in Seminole. But when they tried to move in on Dec. 14, they said the home was in shambles and uninhabitable. They sent a text message to contractor Marc Anthony Perez at 12:36 p.m. looking for answers. Fourteen minutes later, they got back this text: "This is Marc's daughter, dad passed away on the 7th of December in a car accident. Sorry." Turns out Perez was still alive. Now the Hollands are suing him in Pinellas-Pasco circuit court. [LARA CERRI   |   Times]