It’s not too often that competitive food companies collaborate on marketing campaigns but ConAgra and Kraft have been doing it for a decade with the classic “Rotel queso dip” popular around the holidays and throughout football season.
Analysts said co-marketing for items that often found in the same shopping basket makes economical sense. Perhaps that why food giants ConAgra and Kraft are at again, this time featuring Hunts’ tomatoes and 100% grated parmesan cheese as well as cocoa mix with mallow bits, which are other food items owned by the two competitors.
Tom Jensen, retail marketing expert at the University of Arkansas, said a rise in third-party shopper marketing firms are helping to spur on this trend.
“When we look into shopper baskets we see there are times that certain items are bought together. This creates a co-marketing opportunity for some suppliers to partner for special events or promotions and ensure they both make into the shopping cart,” Jensen said.
ConAgra and Kraft began sharing portions of their advertising and promotions, communications budgets and creative decision making six years ago. Advertising Age said the latest version of this long-standing collaboration “Queso for All” began running last month and will continue through February.
Richard Bode, brand manager for Velveeta and Kraft Grated Parmesan Cheese, said the ongoing relationship with ConAgra has benefited Velveeta's sales.
"Over the years, this initiative has also become intuitive to our retail teams, and as a result, we are able to coordinate shopper marketing programs that provide the consumer with easy solutions for different meal occasions, while driving the basket for the retailer," Bode noted in Marketing Daily.
Jensen said suppliers are taking these requests to retailers so the products can be prominently displayed together, arguing that when promoted together the store often sells more. He said consumers appreciate the convenience of finding what they need in one central location and these problem-solving, or convenient displays have been around for some time.
One particular challenge the marketing partnerships might have is ensuring the products do make it onto the sales floor specialized displays. More than likely, he said, they hire a third party merchandiser to carry out those duties in the stores.
Marketing Daily reports that Hunt’s, Kraft Parmesan are developing collaboration centers around meal solutions for busy moms.
Back in the spring these brands began by developing a "Hunt's and Kraft Recipe Collection" – dinner recipes that use both brands. This fall, a more ambitious online campaign is underway at Hunts.com and KraftRecipes.com. The partners are employing a social media contest and coupon promotion to help drive sales of both products.
The third installment of the ConAgra and Kraft partnership is also underway this fall with new in-store displays of Swiss Miss instant Cocoa paired with jars of Mallow Bits. The displays dispense coupons and a recipe that uses both products as key ingredients.
“It will be interesting to see if other food companies follow this lead,” Jensen said.
ConAgra and Kraft are suppliers to Wal-Mart and maintain large sales offices in Northwest Arkansas.