Why it matters:
- Consumers are increasingly interested in global flavors, as well as in companies and products that improve their health and that of the environment.
- Hormel seeks to offer a broad assortment of products, from antibiotic-and hormone-free meats to Chili Picante Corn Nuts snacks, to appeal to a range of customers, from health-conscious eaters and multicultural consumers to adventurous flavor-seekers, both in foodservice and retail.
- A new corporate structure that groups the company’s diverse product lines together for the purpose of B2B sales allows the company to better leverage the stable of brands and products in its portfolio.
Hormel Foods, which owns such iconic brands as Planters, SKIPPY, SPAM
and others, has been seeking to remain relevant with today’s consumers by modernizing its brand and product portfolio.
Consumers are increasingly seeking culinary experiences, whether dining in restaurants or creating new dishes to try at home, and these experiences are often influenced by cuisines from around the world. Consumers are also much more aware of the impact that their diet has on their own health, as well its impact on the environment. The latter is especially true of younger consumers, who are on the lookout for brands that share their values.
As a result, Hormel has assembled a collection of brands, and developed new products under its legacy brands, that help it meet these demands.
Examples of its brands that appeal to today’s consumers include Applegate, Justin’s and WHOLLY, while products such as Planters Sweet & Spicy peanuts exemplify new products introduced for today’s more adventurous palates under Hormel’s traditional mainstream brands. Hormel’s portfolio also includes a range of plant-based and natural products.
Hormel’s classic brands and products, combined with its newer, innovative offerings, appear ideally positioned for today’s trends. Consumers are seeking both adventurous culinary experiences, and nostalgic comfort foods they are familiar with, according to a recent report from the Food Institute.
“Nostalgic foods have become hugely popular over the last year, and the trend doesn’t show signs of slowing in 2023,” the report concluded.
At the same time, consumers’ palates and culinary awareness have become more sophisticated, leading them to seek products that offer flavors and ingredients from all over the world.
“We are always thinking about how we make our brands relevant and how to make them resonate with the newer generations and with multicultural consumers,” Deanna Brady, Executive Vice President of Retail, Hormel Foods, told CO—.
Global flavors are a top priority for the company’s retail product portfolio, as are convenience and products that can be prepared in multiple ways, such as in air fryers, she said.
“We know that consumers continue to seek convenience, especially at dinner,” said Brady. “Additionally, we are working across our brands to both remind consumers of how to use our products and reimagine new uses.”
As consumers have become more cautious about their spending in an inflationary environment, they are also seeking more value-oriented products, she said.
[Read: Food Companies Tap the Sales Potential of ‘Vegan-Curious’ Consumers]
We are always thinking about how we make our brands relevant and how to make them resonate with the newer generations and with multicultural consumers.
Deanna Brady, Executive Vice President of Retail, Hormel Foods
Hormel: Wooing grade-school kids via foodservice accounts
Often, trends and new products first emerge in foodservice before they move to retail, said Mark Ourada, Group Vice President of Foodservice at Hormel Foods.
The company’s school foodservice accounts for grades K-12, as well as its college and university accounts, present opportunities for the company to introduce its brands to young consumers. At the college and university level in particular, Ourada said, it’s important for the company to convey the story behind its brands and products.
“We’ve got to be able to explain the ‘why’ behind our products being a good fit for those students and those colleges,” he said.
That includes providing information about the company’s efforts around ESG (environmental, social and governance) issues. One of the ways the company communicates its ESG efforts is through partnerships with local hunger-relief organizations, which are a key charitable initiative at Hormel, and through information available online, including its annual Global Impact Reports and content such as a feature on regenerative farming.
Appealing to today’s consumers with global flavors and health-conscious fare
Another key element of Hormel’s positioning is the fact that it offers choices for consumers, Ourada said. Those include not only conventional products, but antibiotic-free products under the Applegate brand, for example. Hormel is also developing more plant-based alternatives and has begun developing Halal-certified products, like chicken meatballs, through its Fontanini line, he said.
Many of the company’s newest products incorporate globally inspired flavors and ingredients, such as its CAFE H line of proteins that include beef barbacoa, Kalua pork, chicken tikka masala, and others, as well as its Asian-inspired House of Tsang sauces.
The company’s foodservice operations provide a platform to introduce young consumers to Hormel’s brands, potentially attracting them to become long-term retail customers, said Ourada.
“We are dealing with the younger consumers that are going to be buying at the store, and we can provide them with really great Hormel products,” he said. The company has a great story behind it from a ESG perspective, and the products meet their needs, whether it’s antibiotic-free, or all-natural, or plant-based, he said.
“We innovate a lot, and the products end up in retail down the road, so innovation is a key part of our success,” Ourada said.
[Read: How 3 Restaurant Businesses are Uncorking Surprising Revenue Streams]
‘We’re almost like a one-stop shop now — whether it’s for a private-label product, customized product, or branded product’
Hormel foods recently restructured its business to bring its brands together under three operating segments — retail, foodservice and international, each focused on relevant products from across the company’s various brands. This will allow for more collaboration and more choice for the company’s retail and foodservice customers, Ourada explained.
“We’re almost like a one-stop shop now,” he said. “Whether it’s for a private-label product, or a customized product, or a branded product, we can coordinate better behind all of those aspects of the business.”
“I think that’s going to allow us to be a lot more efficient and effective with customers to show them that we can basically help them in all aspects of their business, whatever their needs might be,” he said.
Brady said the new organizational structure better aligns with the company’s strategies.
“It allows our resources to be adjusted to the highest-growth brands and customers,” she said. “The new structure provides resources across the retail business to provide value and growth, and our new sales structure simplifies our go-to-market approach for our customers.”
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Published February 21, 2023
Mark Hamstra
