Heinz ups marketing strategies
Joe Jiminez Jr. was California dreaming when H.J. Heinz Co. Chief Executive Bill Johnson came calling almost three years ago.
Jiminez, 41, was a rising marketing executive working in his native California in the grocery division of food behemoth ConAgra, hawking brands like Peter Pan peanut butter, Swiss Miss hot cocoa and Wesson oil.
But Jiminez, the son of a food broker, didn't hesitate to turn his back on the San Diego sun when Johnson asked him uproot his family and move to Pittsburgh to take on the challenge of pumping new life into Heinz.
'Bill said if you want an opportunity to help lead a company with top brands that have been undermarketed, this is the place for you,' Jiminez said. 'The Heinz brand is an American icon. I couldn't pass up an opportunity like that.'
| Company history |
| About some familiar products: 1869: Henry J. Heinz and L. Clarence Noble launch Heinz & Noble, which preceded today's company. The first product is Henry's mother's 'pure and superior' horseradish, bottled in clear glass to show its purity. 1876: Ketchup is added to the condiment line, which also includes celery sauce, pickled cucumbers, and vinegar. 1931: Howard Heinz, Henry's son, fights the Great Depression by adding two new lines: ready-to-serve soups and baby foods. Both become top sellers. 1963: Heinz acquires StarKist and 'Charlie the Tuna' becomes a household name. 1965: Heinz acquires Ore-Ida and transforms a regional business into the country's leading retail frozen potato brand. 1978: Heinz acquires Weight Watchers International. 2001: The Heinz name is behind some of the most recognizable products, including Bagel Bites, College Inn, Kibbles 'n Bits and Jack Daniel's Grilling Sauce. |
'We're developing a new attitude at Heinz. In past year and a half Heinz has introduced more products than in the past 10 years combined,' he said. 'And we've brought in some great young marketing talent and are supporting our products at levels this company has not seen since at least the 1980s.'
As chief executive of Heinz North America - a unit that accounts for nearly half of H.J. Heinz Companies' $10 billion in annual revenue - Jiminez's first task was to reverse the slumping market share of Heinz's marquis brand tomato ketchup, which had seen its share slip below 50 percent.
The result was a price slashing and bottle-size adjustment. Then, based on marketing data that showed that children consume massive quantities of ketchup, the company introduced the now wildly popular EZ Squirt red and green ketchup for kids.
The company recently reported record ketchup market share, near 60 percent.
The North America division has followed on that success with new Asian sauces under the Mr. Yoshida's brand name, a licensing deal to produce a line of grilling sauces under the Jack Daniels brand name and new pet treats with innovative new packaging under the familiar Pounce, Meaty Bone and Pup-Peroni brand names.
'What attracted me to Joe is that he's an enormously intense individual with good leadership skills and is focused on growth opportunities,' Johnson said. 'When he came in we had a ketchup business that had been languishing, and we've turned that around.'
Johnson issued Jiminez a new challenge last year - repairing the limping Star-Kist Seafood and pet food divisions, which have been a chief hindrance to Heinz returning to its string of double-digit earnings per share growth between 1996 and 1999.
Star-Kist sales have suffered from unusually low, raw tuna prices. To add value and interest in the commodity-like category, Heinz was the first to introduce an eight-ounce, no-drain, re-sealable package tuna in a pouch. Heinz is now introducing a three-ounce, single-serve pouch to better meet the trend of convenience foods.
The company also has cut costs by closing a canning plant in Puerto Rico and selling off a fleet of fishing boats in the Pacific.
Similarly, in pet foods, the company closed a cannery in Terminal Island, Calif., and consolidated production in Bloomsburg, Pa.
'The costs we have taken out of the business with the plant closings will be reinvested in the marketing of pet food and tuna,' he said.
Heinz North America's next new product launch is breathing new life into Morris the Cat's 9-Lives cat food. Jimenez plans to reposition 9-Lives as a premium brand to compete with growing competitors, such as Fancy Feast.
'This is what consumers want and they're willing to pay for it,' he said.
Jiminez said the new 9-Lives premium line will include 10 varieties and will begin shipping next week. It should be available in stores next month. All of Heinz's major customers - WalMart, Kroger, Alberston's and Safeway - have agreed to put all of the new 9-Lives products on their shelves, he said.
'I gave (Jiminez) a tough task last year,' said Johnson. 'We've made great progress with Star-Kist. We're beginning to see progress in pet food. He understands the need to deliver profits.'
Jiminez has handed off responsibility for executing the tuna and pet food plans to Mike Milone, senior vice president of global category development and CEO of Star-Kist Seafood.
His purview now includes ketchup, condiments and sauces, private label, infant feeding, nutritional and organic foods, pet snacks and food service, in addition to providing support services to all of Heinz's North American businesses.
Heinz North America was dealt two setbacks this year in its failed acquisitions of the pickle and Open Pit barbecue sauce brands of Vlasic Foods International and the Beech Nut baby food business. They were outbid for the former and ran afoul of federal regulators with the latter.
'Whenever you participate in acquisition as a way to grow, you're going to deal with some setbacks,' Jiminez said. 'Even though we lost those two, we still acquired businesses with $200 million in annual sales in Mr. Yoshida's and three food service companies. You may be hearing additional news in the near future about another acquisition.'
In the wake of the Beech Nut loss, Jiminez said Heinz will have to take on the category giant, Gerber, one market at a time with its own Heinz brand.
'Beech Nut was strong where Heinz was not strong and would have automatically given us a national brand,' he said. 'The job now is to test parts of the growth strategy we had hoped to accomplish on a national scale with Beech Nut on a regional basis. Infant feeding may not become the growth driver we expected, but it will always be a solid contributor to the company.'
Jiminez and his wife, Denise, have three children, ages 3-9. He is on the road regularly visiting the company's 23 plants and 15 sales offices throughout the United States. He is also in Toronto once a month to meet with executives of Heinz Canada, a Heinz North America subsidiary.
He has bought some property in California where he plans someday to build a home. If he continues meeting challenges at Heinz, however, he could be in Pittsburgh for quite a while.
