For decades, nearly all food manufacturers have spent millions of dollars building brand equity, an investment that leads to brand loyalty and repeat supermarket purchases.
As consumers transition from kids to geezers, their brand preferences become more and more ingrained; and the brands that deliver taste, value, convenience and innovation gain larger market shares. That's great, but consumers are spending more of their dollars in foodservice venues, from restaurants (both eat-in and take-out), school cafeterias and hospitals to c-stores and vending machines.
With estimated 2006 industry sales at a whopping $511 billion, up 5.1 percent from the previous year, according to The Food Institute, Elmwood Park, N.J., the foodservice industry offers many opportunities for food processors to leverage their brands. And foodservice operators usually are delighted with the opportunity to differentiate their barbecue ribs with a strong barbecue sauce brand from everybody else's barbecue ribs.
Most major manufacturers have a foodservice division and/or supply ingredients or retail products to these venues. Tabletop brands -- including Heinz ketchup and condiments, Tabasco, A.1. steak sauce, Equal, Frank's RedHot Sauce, Lea and Perrins, and Kellogg, General Mills and Quaker cereals -- have been available in restaurants in single-portion packages for many years, building brand equity in foodservice.
Trends toward bold flavors and ethnic cuisine have been a boon for McIlhenny Co., which has a pepper sauce for everyone's taste buds and every recipe's needs. You can track Tabasco's success in being on trend beginning with the original Tabasco Pepper Sauce, to Tabasco Green Pepper Sauce, Tabasco Garlic Pepper Sauce, Tabasco Habanero Pepper Sauce to its newest Tabasco Chipotle Pepper Sauce and the ethnic recipes it provides on its website.
"There is interest from consumers to see a brand name ingredient used in a foodservice selection if it's connectable; if you're doing a spicy burger or Cajun item it makes sense to consumers," explains Jason Gronlund, McIlhenny's corporate executive chef and director of ingredients sales and culinary services. "Even though our flavor profile fits well into Asian products, it might be a disconnect for the consumer. They would wonder why that Thai ginger dressing is made with Tabasco."
Special brands for foodservice
While the table top is one good place for brand recognition, another strategy is specific brands for foodservice. Despite sustained efforts, Heinz failed to establish its name in retail soups. But Heinz Foodservice is a category leader with soups under such brands as Chef Francisco, Quality Chef, Todds and Truesoups, as well as Heinz.
The Heinz name also appears on various foodservice tomato products, frozen desserts and appetizers, while gourmet desserts sell under the Dianne's and Alden Merrell labels and Italian foods under the Domani brand. And don't forget Ore-Ida french fries, which proudly carry their brand in many university cafeterias.
Hormel Foods developed Austin Blues, a BBQ meat concept. General Mills' Bakeries and Foodservice division, which generates more than $1.7 billion in sales, sells a wide array of bakery products, including frozen unbaked and baked biscuits, croissants, cookies, and other breads and sweet goods. It also markets dry baking mixes and ingredients in the foodservice, restaurant and both wholesale and retail bakery channels. The division also sells General Mills-branded cereals, yogurt, snacks and more.
Sara Lee Foodservice distributes its brand-name products to foodservice customers in full- and quick-service restaurants, retail establishments, schools, healthcare facilities, warehouses and hospitality venues throughout the U.S. Products are divided into three segments: away-from-home foods, bakery foods and meat products. Its brands in the away-from-home segment include Douwe Egberts and Superior coffees and Paradise iced tea; its bakery products include Chef Pierre and Sara Lee brands; and its meat brands include Ball Park, Hillshire Farm, and Jimmy Dean.
ConAgra Foodservice brands include Angela Mia Italian foods, Butterball, Egg Beaters (listed on Denny's breakfast menu), Fernando's Mexican entrees, Healthy Choice, Hunts, Lamb Weston, Pam, Reddi-Wip and Wesson.
Kraft Foods' Kraft Macaroni and Cheese appears on many kids' menus, and Nestle Foodservice supplies its Director's Choice stuffed sandwiches and branded Hot Pockets to schools. Kids eat them at home and ask for them in school.
Foodservice providers also leverage Nestle's Ortega Mexican Cheese Sauces brand, with 93 percent consumer awareness, in their fare. Most recently, in response to consumer demand for organic ingredients, Muir Glen, Organic Valley and Earthbound Farm (to name just a few) package products in foodservice-size amounts.
Brands on the menu
Consumers increasingly look for retail branded names not only on the tabletop, but in the foods they eat away from home. It's a win-win situation for the brands and restaurants like T.G.I. Friday's to brand Jack Daniel's branded sauces in its Jack Daniel's Grills (steak, hamburgers, ribs, shrimp and salmon), Smoked Beef Brisket and Roasted Pork.
Brands can be restaurant image-builders. When consumers see brands on the menu, their perception is that the restaurant serves better food. Brands also can drive traffic, and consumers are willing to spend more per entrée.
Other venues incorporate HV Food Products Co.'s K.C. Masterpiece sauces and marinades as ingredients, Kraft's Open Pit and Bulls-Eye sauces and Grey Poupon mustard (California Pizza Kitchen serves a Grilled Rosemary Chicken sandwich with Grey Poupon). Universities cook with ConAgra's Hunt's tomato sauces, serve Campbell Soup, Healthy Choice deli meat, Sara Lee cheesecake, Pillsbury rolls and Otis Spunkmeyer cookies. These brands, which offer familiarity and comfort, stand for quality to foodservice consumers.
Trends toward bold flavors and ethnic cuisine have been a boon for McIlhenny Co., which has a pepper sauce for everyone's taste buds and every recipe's needs. You can track Tabasco's success in being on trend beginning with the original Tabasco Pepper Sauce, through Tabasco Green Pepper Sauce, Tabasco Garlic Pepper Sauce, Tabasco Habanero Pepper Sauce to its newest Tabasco Chipotle Pepper Sauce and the ethnic recipes it provides on its website. One of the Champp's restaurant chain's signature dishes is Tabasco fried onions.
Specific categories with hot opportunities in foodservice include: Asian (Chinese, Japanese, Vietnamese, Malaysian); breakfast; "healthier" options; bold, hot and spicy flavors; organic; salsas, dipping sauces; sandwiches; Indian; vegetarian (particularly in schools), Mexican and South American.
According to "Latin on the Menu: The U.S. Foodservice Market for Hispanic Foods," by New York-based Packaged Facts, the foodservice market for Latin foods, worth $18 billion in 2005, is expected to reach $25 billion by 2015. Nuevo Latino and fusion are in, as are Peruvian, Guatemalan, Dominican and Bolivian.
Latin currently is the second fastest growing ethnic food category, behind only Asian. And the general agreement among restaurant industry analysts is that growth in both Latin-dining establishments and Latin menu items will escalate -- with more than a little help from the growing buying power of Hispanics, which is expected to reach $1 trillion by 2010.