There was a time when the fresh-cut salad category was the vibrant growth leader of the produce industry. In the aftermath of the spinach crisis of late 2006, the category stumbled and has never since returned to the double-digit growth rates of days gone by.
That may be about to change. Both here and here we recorded how Dole, the #2 player in the salad category, has begun a major campaign to boost sales involving extensive consumer research that led to product and packaging changes plus a new ad campaign.
Now the great gorilla of the packaged salad category, Fresh Express, has announced its own initiative to boost its sales and, as the market share leader, those of the category. Its executives have chosen to focus on an innovative online resource venture as its key tool. We asked Pundit Investigator and Special Projects Editor Mira Slott to conduct an exclusive telephone conference call to understand more.
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Tanios Viviani President Global Innovation and Emerging Markets and Chief Marketing Officer Chiquita Brands International |
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Mike Burness Vice President Global Food Safety and Quality |
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Judy Chen Marketing and Business Development Group Leader |
TANIOS: We are here today to talk to you about something that is really exciting for us. I’m particularly enthusiastic about what this could do for relationships with our customers.
In this room, we have Mike Burness, Vice President, Global Food Safety and Quality, who has responsibility for all the products and all the geographies, including North America, Europe, Asia, Latin America. If you recall, Jim Lugg used to be our head of food safety and quality at Fresh Express, and we had different people doing different jobs in other parts of Chiquita. We consolidated all that work and now we found Mike and he’s done a terrific job for us. And Mike has been pushing all the food safety and quality programs.
Then I have, Judy Chen. She is responsible for our corporate marketing, and she helps me, particularly in North America, to create new programs, to address specific needs of a target audience, predominantly the younger target audience that we’ve been trying to reach and captivate. When I say younger, I mean people from early ages all the way to 30; that’s who we consider to be young.
MIRA: Please tell us… what did your proprietary research reveal to you?
TANIOS: In the past couple of years in analyzing consumer segments, we’ve found that young people are engaged in the produce department. They like our brands in general and gravitate to them in the produce department. We’re trying to put a higher emphasis on how we find the right communication, messages and tools to engage this consumer segment.
Part of the program we’re talking about leads right into that discussion, so I’ll give some opening statements, and Judy can walk through the demo with you and we can all answer any questions at the end.
What we announced on March 24 is the first national aligned source for consumers to take a peak behind the scenes to learn what it takes to create the Fresh Express brand. This is a program that we’ve been working on for over a year. We started this process a couple years ago when we researched what would create a higher level of engagement, so that consumers could make salads more relevant to their lives, they would eat more salads, find more occasions to eat salads, and they would shift salads from a side dish to center of the plate.
Part of that work involved identifying product and marketing ideas. The one thing we identified as an opportunity was to increase the level of trust that consumers have or need to have in the products they eat. What Judy found through her consumer research is a higher level of transparency of what goes on behind the scenes and what would create a much higher level of trust and would lead them to consume more. That’s the whole story behind our program. An articulated need that if I better understand what’s the care you take in my product, what am I eating, I will give you my preference. That’s what customers told us.
We came to the conclusion, that not all salads are created equal. And we think Fresh Express salads are very special. To tell that story, we created a site, called “Your Salad Story”, which is personalizing your salad experience. Not only does it provide you information on where your salads are coming from, which is something consumers have asked for, but also to take a peak at all the behind-the-scenes activities from seed to shelf that make our salads fresher, taste better than anything they’ve experienced before. That’s the idea.
We chose to execute the program through a website. The website, as you know through your business on the web, is a very powerful tool to connect with the consumers that are very engaged with their foods. Through our media department, we have learned that we can reach consumers more often through the web than through regular media now. The consumers spend more hours on the web than watching T.V. today, which provides good insight for us to continue moving through the web. This program is about our commitment to freshness, safety and taste; it’s about ensuring consumers that Fresh Express is a unique proposition and that not all salads are created equal.
The site itself has two parts:
One is the story behind the salad, how we choose the seeds, how we blend, how we deliver the salad. Then we’ve created a proprietary tool, which we call the Leaf Locator, a way for you to punch in a code that’s already there on every product we sell. You punch in the code, and it tells you where the product came from and you can learn about the elements that make up your salad.
MIRA: Is that for all products?
A: The project is focused on leafy greens and salads… on our top 60 SKUs that are sold in over 24,000 retail store and are grown in eight different regions. That is a fairly complex matrix that we’re trying to make simple and exciting for consumers. We went from growing in three regions — Salinas, Colorado and Arizona — to eight regions, we pretty much grow across the country today… east coast, west coast, north and south, from California, to Florida to Michigan.
So our products are really much closer to consumers than they ever thought they would be. You may recall, we completed our production network in the country by establishing the Harrisburg production facility in Pennsylvania. So now we have seven production sites, again from Pennsylvania to Chicago to Dallas, Northern California. Our produce is grown across the country, we process it across the country, and that’s why Fresh Express delivers fresher, tastier products. That’s the story we want to tell.
(Left to right) Rachel Hackbarth, Research & Developmet; Tim Wexler, Harvesting & Cooling Operations; Christine Keller, New Product Innovations; Judy Chen, Marketing; Courtney Parker, Food Safety & Quality; Phyllis McGinnis, Business Management
On this site, the other thing I think is very exciting; we’re using our own employees, our people to tell what we do. We’re not using any actors, or anyone else. As we get feedback from consumers, what else they want to know, we’ll keep this updated. You have to view this program as ongoing. At the end of the day, as we build higher transparency about where these salads come from and build higher trust that not all salads are created equal, we want to drive greater sales. That is how the equation works.
MIRA: What role do retailers need to play in this equation, and are they on board? I know you’re a diehard believer that the bagged salad category is grossly underperforming…
TANIOS: We’re excited about our partnership with retail partners; particularly those that have shown their commitment to food safety, freshness and taste; our retail partners that want to grow this category. As you know, I am a firm believer that this category can be two to three times the size of what it is today. I continue on my quest to increase the average bags per household to grow from 9 or 10 a year, to 20 or 30 a year. I think this is one element that will help us get there.
The other two elements that you and I have talked about… one has been marketing. Last year for the first time ever, we began doing T.V. advertising for the brand and, of course, to increase category awareness as well, to make this category more a destination instead of an impulse purchase.
The other prong, where we need to work harder, is at point of sale. We can do a lot better in providing the right shelving space for this category. We have to provide better secondary displays. It always amazes me that we are one of the very few categories in the grocery store that do not have secondary displays. Compare that to salty snacks or beverages that would have anywhere from six to 12 secondary displays in one grocery store.
Here you have one of the healthiest products you can find, and Michelle Obama making it even more prominent now in people’s minds the importance of having a healthy diet. We have a great product, a great brand, and yet we can only find it in one corner of the grocery store, despite the fact we are one of top two largest profit-contributors to the grocery store.
So we believe we can grow this category by working with our retail partners to improve the consumers’ shelf/shopping experience, get higher awareness through mass media and address their specific needs through products, while creating a stronger relationship with consumers.
How we’re going to kick this off, we want first and foremost a one-on-one grassroots relationship, to tell a story. That’s why we’re talking to you today, that’s why we’re going to be using blogs and Facebook and all the social media that Judy can talk to you about. We’re also going to use TV advertising to create awareness, because we do want to make this a quick awareness program, so we will begin airing TV commercials Monday, March 29, 2010.
We’re going to create a very exciting promotion providing folks opportunity to win one year’s worth of free salads. And then we’re going to have some in-store merchandising in partnership with our retailers. That’s the marketing side behind it.
Why don’t we have Judy walk you through the site and then Mike and Judy and I will be here to answer or explain any other point you’d like to know.
JUDY: When consumers log onto the website, this will be within our current site. We’re not building a whole new site; we’re going to continue to leverage the traffic and engagement on our brand site. The beginning page, Your Salad Story, will give people a glimpse of what the animated site is about, an intro to all the engaging behind-the-scenes stories and practices from seed to shelf that will be shared by our employees.
This is our Leaf Locator tool that Tanios highlighted. If consumers have a bag, they could punch in the code and find out a lot more information. You don’t necessarily need a bag with a code to experience the site. If you click on the site, you can see a sample hearts-of-romaine bag with a picture of Yuma, Arizona. It tells you where that particular bag is grown, information about its growing regions, and fun facts; for example, did you know that the romaine lettuce was named by the Romans because they thought it had healthful properties?
We want this to be engaging and informative at the same time. You can click on the seven steps of prevention for food safety. It gives consumers reassurance that every bag you’re going to learn about has gone through our quality, food safety program. You can click on new recipes that bring the user to a series just made for the hearts of romaine product.
To the right of that, we have the feedback button, which allows us to engage the consumer to tell us anything they want about this particular bag of salad. This button links directly to our call center, so that it is truly an engagement tool, not just us speaking to our consumers but allowing them to share their thoughts and feedback with us throughout the process.
MIRA: That’s a really smart consumer research tool. That’s the way you keep innovating and changing to meet consumer needs…
JUDY: The telephone used to be the way people talked to companies. But we all know with the advent of technology, you have to be online, and on Facebook and Twitter, and this is where all this is heading toward; that continuous integrated engagement that we’re trying to create.
If you go to the Search Again button, you find easy-to-use instructions to punch in the actual code of your bag and continue to follow the steps to Find Your Story. What do you see?
MIRA: Caesar Light, Only 100 Calories.
TANIOS: Nice choice!
JUDY: Looking at the tools in more details, you’ll see that this bag of salad is grown in Huron, California, and Yuma, Arizona. In this particular bag, it’s coming from both. This is an orientation of all the grower regions we’re going to showcase. You’ll see a very simple, friendly description of that area and why it’s a growing region and what makes it special to grow good lettuces. It talks about the climate, and other information about the growing season and sourcing times, the region’s rich agricultural history, fun facts, and a map for perspective.
MIRA: This is so in depth. I’m fascinated, but are most time-pressed consumers going to invest the time to explore all this research?
JUDY: Thanks for the feedback. We’ve been gathering data for about nine months now, and we’ve talked with many different users — moms, and young adults alike — and one of the things we heard back from them on what they want the site to be is also educational and informative, not just tell me the basic facts, but I want to know the where and the how and the who. A lot of moms say, wow, this is going to be a great educational tool I can share with my kids about salads as well as being informed to make the right choices for my family.
I’ll let Mike talk to you about the seven steps of prevention. As you can see, it starts with our philosophy behind our food safety and quality program. Below the copy, there are seven different buckets with icons describing the steps. We’re giving people information in bits and bites that make sense rather than having to read through pages of information.
MIKE: Just to give you a snapshot of the seven steps, as you know, protecting our consumers’ health and well being is our number one priority. To that end, we’ve developed some of the most stringent food safety standards in the industry, and are constantly looking to update and improve those as time goes on. Our seven-step program is unique. It is really based on prevention and involves seven distinct and comprehensive steps that are connected across the supply chain.
We wanted to give our consumers a behind-the-scenes look at what does all that mean and when I get this product off the shelf, how did it get here, what happened to it, and what did this company do to insure they did everything they could to protect my safety, the freshness and taste? Each of the seven are on the bottom of the page and Judy can take you through that.
JUDY: If you click on Care and Excellence as an example, this talks about that particular step in our process, how we carefully wash and blend our salads. What is our practice and how do we insure all our salads are thoroughly rinsed and washed.
At any given time in this section, you know where you are in the seven steps, so it helps reinforce the idea that this is part of an integrated system; it’s not just one thing on its own, it’s the working of the seven steps of our preventive program that delivers the freshest safest salads to our consumers.
If you look at the bottom of the site, you can go to our Salad Experts. As Tanios mentioned earlier, this is really where the behind-the-scenes story comes to life.
MIRA: These people all work at Fresh Express? Is one of the goals to recognize the important contribution of individual employees and segments within the integrated system, as well as to provide a personal touch?
JUDY: If you were to have a directory of Fresh Express employees, you will find these individuals, some having been with us for 20-plus years. These people are really the veterans and the heart and soul of our company. You’ll see we’ve highlighted what they do and their area of expertise, so from left to right, from the seed all the way to transportation and getting it to the stores.
You will meet each person, by first clicking on their Polaroid. We really interviewed every one of these employees and most of the copy here is their words, and what they are describing and sharing is a day in their life and why do seeds matter, and what is he doing to deliver and find the most innovative seeds so we continue to provide the variety and taste that consumers want and desire in the category. We also realize that a picture is worth a thousand words. So show what they are doing in an engaging, visual story.
The thing to think about with this site is that it is not static. We’re not just launching this and then letting it sit. We’re going to continue to listen to consumers on what other information they are looking for. It is going to be a dynamic, evolutionary site that will be a virtual cycle of communication with consumers.
MIRA: Have you further segmented these target consumers in terms of what they are looking to achieve from the site? What percentage of consumers will actually go to the site, how much time they’re willing to spend, etc.?
TANIOS: To your point, Mira, what we’ve seen in this past nine months of data, where we were testing the system and making sure we were understanding what consumers want, we’ve seen a couple different types of consumers. Some want to check where this salad is coming from, so they’ll punch in the codes and get the Yuma story and a glimpse of Fresh Express, and then we have the others, which has been the majority of the people we’re addressing this tool to, who really want to know more insights about what’s going on.
So we have a spectrum of people, and we want to entice as many consumers as we can, but it’s been designed for the ones who are very food-engaged; we call them the foodies. They tend to be the influencers who create the word-of-mouth, who eventually become the spokespeople for the brand. That’s who we’re talking to.
Now we have the Fresh Express site, which has other more lighthearted areas. If you just want recipes, there’s a place where we help with food parings. If you want promotional events, we have promotions. This one is really designed to cater to the group of consumers we found that are very interested in knowing more, they tend to influence communities.
MIRA: How big a niche is this in the context of overall sales?
TANIOS: It’s difficult to gauge. The way we screen it is attitudinal; we’ve labeled them salad enthusiasts. What I can tell you is, there’s a percent of the population, anywhere between 10 and 20 percent, that is not engaged. Then there are the other 80 percent who are somewhat engaged in salads.
Another area we’re trying to address is one of the top five trends in foods. Last year, the History Channel did a piece with us on how the iceberg lettuces that we process makes it onto hamburgers for the nation; it’s a very interesting piece. And just recently the Food Channel talked about the five top consumer “wants,” and one was food-vetting — where does your food come from?
Is a consumer going to get really in-depth on this? Maybe, maybe not, but we do know there is a lot of interest in this, and we also know if we let consumers have a pleasant navigation experience, they will select how much they want to get engaged.
This is similar to what Judy has done before with a site, Eat a Chiquita, which we thought people might go in to and spend two or three minutes, people were spending over 10 minutes on that site. The only reason that happens is when you make the content relevant and the navigation pleasant and you allow consumers to select how much they want. We are truly customizing information to their needs, versus just slapping them with information that is very mechanical and not what they want. We’re truly trying to personalize each bag of salad that we make.
JUDY: Part of the engagement program, is to continue the conversation with our consumers, so even if they come to the site only once or twice, we will continue to stay in touch with them through our e-mail newsletter. The information is going to be shared through what we call the Faces of Fresh, so some of the same employees you see in the Salad Expert section also will be the people in this newsletter.
The content will evolve and change every two weeks, announce new products, new promotions, tips on how to keep your lettuce fresher. We will feature a seasonal recipe to pare with one of our SKUs so people will continue to find new ways to enjoy our salads. So again, it supports Tanios’ vision of continuing to grow the consumption for the category. We are going to send out the first newsletter in about two weeks.
We have a TV ad that is our current Fresh Express campaign, where we’ll have a five-second tag that will be at the end of all the ads starting Monday through the end of May, where we’ll encourage people to go to the Your Salad Story website to the enter-to-win contest to drive a much more mass communication to get people to the site. So that is the story. Do you have any questions?
MIRA: I have a few contextual questions for overall perspective. First, what reactions have you received from retailers? You draw attention to the fact that all salads are not alike and that Fresh Express operates under the most stringent food safety standards. Does this raise questions about the quality, freshness and safety of other bagged salads, and more broadly fresh produce in general? Do you risk portraying other produce as less safe?
TANIOS: First to your question about retailers, we’re just starting this. We’ve done a lot of data for a long time with consumers because our target was really consumers. Our primary objective is getting consumers engaged in the category, or increasing engagement of consumers into the category so that we can drive sales. Judy has deployed this to our customers. She started last week, and comments so far have been that it looks beautiful.
To your second point, we are purposely trying to differentiate ourselves… that’s why we called out that all bagged salads are not created equal. That is because we do believe one way to grow the category is to create trust, and we need to develop a strong brand. I don’t think that is detrimental to the category at all. To the contrary, one could argue that the category is somewhat commoditized, and therefore there’s no good news coming out.
There’s no differentiation, there’s no reason for me to buy. We leave it up to consumers to make up their own minds. I don’t think the current state of the category is a good place to be. When we say we’re developing a brand, which is the Fresh Express brand, the brand carries a promise, and the promise is a commitment to food safety, quality and taste, and delivery of those. So, it all comes together to say, if I’m differentiated, and here’s where I’m differentiated, and I want you to experience that, I need to convey that message. Then I’m congruent, consistent, transparent, I can be trusted and drive sales.
I think it helps the entire category. If you look to other parts of the grocery store, any category that has strong brands, they tend to pull other brands with them. Look at beverages, pasta. What happens with strong brands is that they need to establish benefits; they either meet a need consumers have or they are able to articulate a need consumers haven’t been able to articulate. That sparks engagement and engagement sparks consumption.
It’s a long answer to say differentiation is pulling us apart. What is the implication? In a summary I would say the implication is great. It creates a reason why consumers want to engage, it creates a clear point of sale for ourselves as a brand and for the retailer, and creates a reason for consumers to consume more.
Then last but not least, anything related to food safety and quality, we establish this platform, we call the Power Prevention, which was already shared with all the retailers as early as last summer, and Mike was personally involved.
MIKE: And the message from that was that Fresh Express salads are not the same as every other salads. The key was providing folks — the retailer and the consumers — with that behind-the-scene look at here’s what we do and how we do it, and we were more transparent in explaining why we’re differentiated in that world.
MIRA: Is the implication that other products may be less safe?
MIKE: The industry has a great track record. All we’re doing is providing a behind-the-scenes look and insight on how we accomplish that.
MIRA: Does your transparency set a new precedent for all fresh produce companies?
MIKE: If people say they are doing this, they need to show it.
TANIOS: My experience is a little different from Mike’s in that I think we have a lot of people in the industry who talk about it, but I don’t see a lot of people doing it. I think we need to improve our track record. The industry’s track record has been spotty, and I think part of the reason consumption has not grown to the levels we need it to is that the bar hasn’t been raised high enough.
When the bar is high, there’s a higher sense of trust, therefore consumption should go back up to the double-digit growth we had four years ago. And that’s my goal. I think if we don’t speak up with courage and determination on the areas that are relevant, we’re going be sitting here at very low growth than where we need to be. We have to be consuming as much salad as the Italians do, which is four times the rate that we consume in the U.S. today.
MIRA: Do you see this program in terms of helping you with traceability if there is an outbreak or recall, or is that beyond the scope of this?
MIKE: We have an internal system that closes our supply chain to deal with those specific issues. This site was not designed as a traceability tool, but to answer questions consumers had, and provide them the tools to have the ability to see where their products came from and the process behind that, so it was not designed to be a traceability tool. We have an entirely separate system that is managing that.
TANIOS: At this stage, we’re not trying to create a traceability or recall tool, but a higher level of information about things that consumers said are relevant to them. Could I see something evolving? I don’t think it would be as much a consumer tool, but maybe a customer tool, because we could be better automated.
It is somewhat easy to stick on a UPC code and give info on where this product was made. It’s much more complex to convey that same information but in an engaging way, providing some depth and context. Consumers are not asking for traceability by the way, this is completely an industry thought. That is not what we’re finding in our research.
MIRA: To conclude, what are the key findings from your consumer research?
JUDY: Number One is knowing where the food is coming from, how did it get here, and they really want to know the personal association with the product. Personalizing company stories is really important for people to see. Not only more information, but more knowledge about the company. Consumers have told us they want to know more about the steps involved in the product.
TANIOS: Consumers have a high need for community, to share thoughts and receive information, and that’s why Judy is putting together the newsletter and making the site much more friendly.
MIRA: Can consumers interact with each other?
JUDY: Right now, it’s not designed that way. But it is a dynamic and evolving site, and we’re discussing the possibility of a blog community. But we are having employees answering consumer questions. Faces of Fresh will have their own Face Book pages for people that sign up to be a part of our community.
MIRA: We look forward to following progress with the venture. What is your vision in the future?
TANIOS: There are three angles here: the first is engaging consumers on something relevant that will drive consumption. That is the critical one. Another element of reigniting sales is through consumer engagement through multiple ways of communication. And the third is Fresh Express establishing a benchmark standard and base line in terms of transparency.
MIRA: Is there any downside to sharing too much information? How do you decide where to draw the line in revealing company processes and operations?
TANIOS: We’re allowing consumers to tell us what they want, but there’s an intersection of what’s needed and what’s possible. Sometimes they cannot articulate a specific element. I want more reassurance of how it’s cared for. Is it the steps, the people behind it?
Sometimes there is a desire to overwhelm with information, and sometimes we love to play the technology game, let me get all these gismos, and they say that is not what I want. We are trying to walk the line of information that’s relevant and give people the options to pull what’s meaningful to them.
The whole sustainability movement intrinsically represents a shift from a world in which product is evaluated after it is created — at the accepting gate of a retail distribution center for the trade or at the point of purchase for a consumer — to a world in which product purchases — at the trade or consumer level — involve a more difficult-to-assess range of evaluations. Is the product grown with due regard for safety, is the land treated sustainably, are the people involved treated humanly, etc.
What Fresh Express has latched onto is the need to connect with consumers so that consumers will be empowered to do these types of evaluations.
Many look askance, pointing out, quite correctly, that the number of people who will go to the web site or read the newsletter will be infinitesimal compared to the total population or compared to the number who watch television. There is certainly a place for mass marketing but the proper response to those who think this way is to urge them to think about teenage boys and cars.
When auto makers advertise in publications such as Motor Trend or Car and Driver, it is not because the readership of these publications is particularly large or even that the readers buy large numbers of new cars. In fact a surprisingly high percentage of the readers of these publications are teenage males without money to buy new cars at all.
The automakers advertise because these young men care about cars so much that they read about them, work on them, etc., and come to be seen by friends and family as experts. Thus these kids become disproportionately influential in the purchase decisions made by friends and family.
So the strategy of serving thought-leaders is a tried-and-true one. Of course, a car is a major purchase and most people will discuss the purchase with friends and family before making a purchase decision. Can that model, of influencing influencers, work on products that are often impulse items?
Many in the industry were quite upset with Fresh Express when at the PMA convention back in 2006, the industry woke up to find an article in USA Today extolling the food safety practices of Fresh Express. Many interpreted the presence of the piece as a violation by Fresh Express, of the 11th commandment: “Produce companies will not use food safety in marketing.”
We suspect that the industry is likely to be even less happy at this effort. Now that the California Leafy Greens Marketing Agreement exists, along with a sister organization in Arizona and an attempt to take it national, many signatories to the agreement will think that they are operating to top standards and that any implication that Fresh Express has a superior program is unacceptable.
It is not a new argument — going back at least to the contretemps regarding Raley’s and its use of Nutriclean-certified produce.
Yet incorporating safety into marketing messages also has a provenance. Volvo has done it for years, and Pan Am’s old slogan — “The world’s most experienced airline” — was just a subtle way of marketing its safety.
Which may be the most lasting impact of Fresh Express’ program, to realize that in an age of social media and instantaneous communication, secrets are suspicious and, in any case, hard to keep.
It is likely to be incumbent on all companies to become much more transparent with consumers than they have ever been.
Long after the salad wars of the early part of the 21st century are forgotten, that lesson is sure to linger.
Best wishes to the people at Fresh Express with their new initiative.
