Hormel Adds Excitement to Stagg Chili with New Package

Hormel's Stagg chili keeps the recipe intact but creates excitement with the Tetra Pak Recart package.

By Hollis Ashman and Jacqueline Beckley, Consumer Understanding Editors

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Strongly flavored, pungent chili and meat dishes have been around since the time of the Incas and may have been brought to the U.S. by settlers from the Canary Islands. The true popularization of this food came from the cattle drives of the old West where the trail cooks had to cover the flavor of either fresh killed, unaged or potentially spoiled older beef with fat, pepper, salt and chili peppers.

The strongly spiced meat and vegetable mixture may have been one of the original fast foods, with places like Chili Queens selling the fare in the Haymarket plaza of San Antonio for many years. There was even a San Antonio Chili stand at the Chicago World's Fair in 1893. By the Depression years, there was hardly a town that didn't have a chili parlor, even if it was nothing more than a hole-in-the-wall place with half a dozen bar stools in front of the linoleum-topped counter.

If you are dealing with a classic like chili and you have made many different types (hot, really hot, low fat, turkey), what is your next innovation? Hormel’s answer is to put chili in a box, actually a retortable multi-layer carton. The Tetra Pak Recart offers this new twist on the chili can. Its materials and shape offer efficiency gains throughout the distribution and post-distribution chains. Does this make a difference to the consumer?

Understanding the marketplace

Strongly flavored foods have been on the rise for years. The $3.9 billion packaged soup market of which chili is a part, increased 10.9 percent between 1998 and 2003, according to Mintel International. But, after adjusting for inflation, that means the category actually declined 1.6 percent in constant dollars. Soups and stews are thin-margin markets, and operational efficiencies can make a difference between profit and loss for a manufacturer.

For the consumer, busy households and fewer cooking skills have equated to less interest in spending time over meal preparation: 60 percent of consumers 18-34 years old said they didn't have the time for all the fuss, and so did 33 percent those more than 55. Similarly, 56 percent of households with annual income exceeding $50,000 a year said they were too busy for long-form meal preparation versus 41 percent of households making less than $25,000 a year, according to AC Nielsen research in 2003.

If the consumer has multiple brands of a similar product available, will the ease of use and storage of one product’s packaging be enough to win over consumers?

Stagg Chili is a beloved West Coast brand. Through significant marketing and product development efforts in the early 1990s, it produced significant growth in its regional markets and got the attention of other chili manufacturers. Many regional chili makers (like Wolf and Dennison’s) had loyal followings but had been bought in the acquisitions of the 1970s and '80s.

However, Stagg remained independent…but also relatively small. Then Hormel Foods Corp. purchased Stagg in 1996. It was a good match: familiar, standard Hormel chili complemented by a different formulation and a new name in many markets.

Meanwhile, Tetra Pak had been trying to break into the “particulate” packaged market for a long time. The Tetra Pak Recart packaging offers several benefits over metal cans. These include less packaging to deliver the same amount of chili, less waste, less space and better stacking, packaging material from a renewable resource and ease of use. But ... it is different.

So this is an interesting marriage: a well formulated though less broadly recognized food brand, which is looking for something that will help it get noticed, meets a nice packaging company looking for the right opportunity to launch a retorted box in the U.S. market. Hormel, which has never been afraid of innovation, can try a novel package that has manufacturing, materials, distribution and other implications and just might change the whole landscape of “canned” foods.

Observation: Consumers are seeking comforting cravable foods but, as with all cravable foods, they must be available whenever the consumers want them.

Packaging provides an opportunity for consumers to provision these cravable foods in their pantry more easily. And this package can be opened even when no can opener is around. If the packaging makes the food more easy to use, then the craving is more easily fulfilled.


Our Crave It!, Healthy You!, and It!s Convenient studies integrated 30 conjoint studies to generate a database that can be used to understand the experience of foods in the marketplace – including the brand, health benefits, secondary aspects, emotions and benefits.

To be healthy, bean-based products and soups are about being thick and chunky, with lots of vegetables, classic flavors, and a good source of fiber, with plump beans that have either a light texture or meaty texture. Beans and soups/stews that are convenient are about being made the old-fashioned way, thick and chunky like a meal, classic flavors, and a hearty combination of beans and meat. Not making a mess while eating is also important for a convenience food.

The key attributes for beans or soups perceived to be healthy are taste, price, amount of fat and brand. The key attributes for beans or soups perceived as convenient are taste, aroma, appearance and price.

Key trends in stews (like chili) and soups are value, taste and healthiness. Convenience is an expected norm.

Value: Private label or store brand items have improved their delivery of quality and sensory attributes to foods. This leads to an expectation that store brands are good enough, driving manufactured brands to even higher levels of innovation and delivery to justify the price difference.

Taste: Flavorful menu items and ethnic flavors have been the strongest drivers of sales. The focus on Asian, Mexican and other Hispanic flavors via the additions of flavorings like cheeses, spicy seasonings and the addition of unique vegetables and beans are the key drivers. Stagg was able to capitalize on these trends in the early 1990s.

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