Hummingbird Creative Group’s CEO, Wendy Coulter, and VP of Operations, Dan Gregory, recently interviewed Mike Ganey, VP of Marketing at House-Autry Mills regarding branding hurdles they faced there and how they overcame them.
Mike: My name’s Mike Ganey. I’m the VP of marketing at House Autry Mills, which is a company that’s been around since 1812 down east. It’s a milling operation. I’ve been involved in packaged goods marketing for 38 years and, uh, I’m in the best job I’ve had in my career.
Wendy: We’re here to talk about branding. So tell us in your words what you believe branding is.
Mike: Branding is all about delivering relevant benefits to the brand audience. It’s all about benefit delivery, which is what marketing is all about. At the end of the day, product designers, whether they’re in B2B or consumer markets, build in a feature set, but if those features aren’t relevant to the people you’re trying to engage with, it’s not going to go anywhere, but branding takes those features, makes them relevant, and adds an emotional connection over the top that can be stronger than the product features at the end of the day.
I think one of the disconnects for agencies is agencies by and large do understand on some level what branding is about, and they think it’s important, but the CEO, CFO, the head of production, the head of compliance and often the CMO don’t understand what the benefits are, and agencies don’t do a good enough job explaining what the benefits of branding are — and the client says, “Well, what’s the ROI on it?” Right? It’s a default question. If they’re asking that question they’re not a good client for you. You’re going to bang your head against the wall and you’re going to be really frustrated and they’re going to be frustrated. You might make money on the business but I doubt it. So it’s separate orbits right now and finding that little sliver of overlap with the ideal client in the middle is really hard these days. And part of it is because branding is intangible, most of the companies you try to call on make tangible things or think concretely, they’re linear deductive thinkers and this business is all inductive. You start with a blank slate and you say, “I need to understand everything there is about the business.” You know more about the business than the client does, at the end of the day if you do your job right.
Dan: That happens frequently.
Mike: Yeah, and I’m actually glad I’m not in the agency business right now because you have very, very daunting challenges. Prospecting is a pain in the neck. The best business development program that worked for me was quarterly letters with something physical in there that you could send to a list of prospects. Prospect companies, and then there’s a separate list of prospect people that may not be marketing people, and unfortunately you’re flying blind.
Dan: So what would you say some of your bigger challenges were getting the transition from this new view? From “we use quality ingredients, we’re really good at milling” more technical “this is how we do it” as opposed to the experience? Because, obviously, they’ve been around for a long time and you’re just now kind of coming in and opening up that can of worms, and there’s a major change that needs to happen.
Mike: Yeah, you’re on an important point. The company for years had been production driven and then it became sales driven and then they ran out of bullets trying to grow the top line and grow the bottom line. So what was left? It was kind of logical that the company was either going to experience declines, be acquired, or grow, and the only way to grow was by trying to really understand what makes our business tick. So, it was almost a strategic business analysis that we did alongside the consumer marketing piece. What I did that I think was helpful was because of my experience, I was very comfortable being provocative with our CEO who comes from a milling and production background and I’ve been a marketing player coach for the organization, working on our CFO, our head of manufacturing, our R&D, our compliance people, and the icing on the cake was when we hired a new sales manager a year and a half ago who embraces marketing. In many companies they fight because it’s, you know, who gets a dollar of resources. At this stage in my career all I care about is results and what’s good for the company, so I happen to match up with the sales guy who sees things the same way. So, together we’ve been trying to build a fundamental basis of understanding about how consumer packaged goods works and how important the consumer piece is and then trying to build a bridge from where we are to where we want to be. We know our category is declining 3% a year in supermarkets, so we can’t go on like that for much longer. I could do a net present value analysis and the last dollars would probably be spent in 20 years, and then you turn the lights off, but that isn’t what we’re trying to do with the company. So, it’s education and making sure that we’re being fact-based every time we get together in a room. I’m trying to build… because there were a lot of, as you might expect, “I think”s, old wives tales, a lot of assumption drove a lot of the decisions, so we’re trying to back off that, say “Time out. What is the basis for the recommendation?” and challenging each other. So, it’s been great because it’s kept me on my toes. It’s awesome.
Wendy: So, it sounds like things are great and you’re having a great time doing what you’re doing, but there have to be some hurdles that, you know, truly get in the way of branding. So, what would you say the biggest challenge has been with what you’ve been attempting to do?
Mike: I don’t think my challenge is much different than any other marketer. You never have enough dollars, resources to do everything you want to. So, our marketing budget is like a thin frosting over a very big cake. Now that we have national distribution we’re on the shelf with Walmart, I’ve got a 2 million dollar marketing budget all-in packaging, agency fees, research, so how do we ensure that the products are going to move off the shelf? That’s when the challenge begins, because what I see happening in marketing is there’s no limit to the number of tools that are available to reach your target audience. The questions— there are two questions. One of them is which tools? But the more important questions is: How much leverage can I get out of a great creative message? Getting the message right makes everything else work, so if you don’t spend the time to really connect with your target audience emotionally, not just rationally, but emotionally, if you can come up with a compelling message, you’ve got a multiple of your budget. If we had great creative, I’d have a 10 million dollar effective budget. 5x multiple. So, that’s what I’m pushing our agency to do and that’s what I’m pushing us internally to do, is to focus on fewer things to higher standards. Get the creative right and then back in to the tool that’s going to get you in front of the consumer at the optimal time, and that’s the real benefit that marketers have today. When I started in marketing in the late 70s and we were launching new products for Anheuser-Busch, I would get a 40 million dollar media budget, we would shoot 6 commercials, we’d do some 30s and 60s, we would drop an FSI and a best food day, or around best food day in the newspaper, and we’d throw in some radio, and if we had some extra money, maybe some billboards. Forget that. Now you’ve got about 5,000, I don’t know how many tools there are, to reach consumers. So it’s far more complex, yet the challenge is still the same. How do you make a great creative? Great creative’s going to win at the end of the day.
Wendy: Can you talk a little bit about the creative and how branding tie into the creative concept?
Mike: It’s exactly all bout branding. I mentioned this tray that we have, it is… It has… The trays are about 8×10 inches, 2 of them nested together, 2 individual packets of seasoning, and 2 shaker bags in case you want to use those. Buy your chicken, open it up, wash it, dump the breading into the tray, roll it around, turn it sideways, get it comfortable in the tray, and these trays you put right in the oven. Don’t need a cookie sheet under them. So, you bake your chicken for 25 minutes, take it out, take the chicken out, either rinse it and recycle it or throw it away. So, how do you promote that? Is it a, is it a bake-able tray? Is it 2 packets of seasoning and 2 bags and 2 trays with an overwrap product, or is it as easy as 1,2,3 with 2 and 3 scratched out. That’s the benefit that we’re communicating in our banner ads.
Mike: For gluten free products, we have a gluten free chicken breader and pork rind that are part of this program that are… these are items that are going national. What’s the big complaint about gluten free products? They taste like crap. As if crap has the standard identity, gluten free is it.
Alright? So, our ad is “Deliciously Gluten-Free”. It’s very simple. Of course you’ve only got like this much space, right? So, how do you condense — To me it’s the best creative challenge. it’s how do you take a benefit and really narrow it down to a banner ad. If you can do that, if you can communicate the benefit so everybody goes *snap* “I get that” and the people that you don’t want to get it say, “I don’t get that,” then you’re really there, because the ad isn’t for everybody, it’s only for the people I care about.
Mike: Why did you go to Walmart? Walmart has, I think, an undeservedly bad reputation among packaged goods companies, and the reason is they don’t charge slotting fees. The other thing is, they like testing new products, because they want to be first. So, a year ago we were out there and presented 22 new product concepts. Just pencil sketches the way they did in the 70s, and that enabled them to put their fingerprints on the ones that they got excited about because they were going to help shape the product of us. We go, “Ok.” So then we went back, and then of course we had to do the dance between what do they want and what could we make money out of. Came back, long story short, that’s how we got all these new, innovative products. So, Walmart to me is, like, the perfect place to launch new products. No slotting fees, we gave them a 6-month exclusive, and at the end of that time this products are going to show up on scanner data that’s bought by any other supermarket around any Walmart and so they’re going to start calling us to say, “Hey, I want to talk to you about your products” without us having to knock down doors, right? So, that’s the “Why Walmart”. Walmart’s a great company to do business with for new products, plus you could get national distribution and national, at least national shelf awareness. It’s up to us to do the brand awareness piece, right? So now that we’re on the shelf, it’s like the Jack Russell terrier, they call it the Greyhound bus, right? Now what do I do? So, I challenged our agency to pitch in and help and lo and behold there is a program called WMX Walmart Exchange. Most people don’t know about it. An agency in Florida handles Walmart and Dollar General digital marketing programs, and when I saw the details on WMX, I said, “This is to good to be true.” Would you like me to tell you what’s in WMX?
Wendy: Absolutely! Tell us!
Mike: You need to know this. WMX is an aggregation of all the shopper data from people who buy in-store who use credit cards. So that gives them credit card number and they go back upstream and understand the demographics of the card holder. It also takes data from walmart.com searches. So, anybody that’s on their website searching, they’re capturing what they’re looking for, IP addresses, and then linking it back to data. And then, anybody that orders from walmart.com online, their transactions are all folded into one enormous bucket, and then it’s all appended into very, very narrow, specific consumer profiles that I can buy in terms of targeting, and they handle the marketing. So what we did…some of our new products are coatings for baking chicken, for example, a gluten free coating for chicken, we’ve got a tray that eliminates several steps in preparing chicken to be baked, so these are all, let’s say they’re very chicken-coating related. So I said to the agency, “Let’s target Kraft Shake-n-Bake users nationwide because they own 60% of the category that we compete in.” So, we’re going to target all of our brand shoppers that are coming into walmart.com, we’re going after every Shake-n-Bake user who lives within 5 miles of a Walmart, and we’re going to reach them using targeted e-mails, 8 rotating banner-ads, we’ll have a dedicated landing page, all for 8 weeks for $150,000. By far the least expensive investment we could make to get new products in front of new audiences that have never heard of House-Autry. If you’re in Santa Monica, I can assure you you’ve never heard of House-Autry. So that’s the tool.
Mike: The other creative challenge was how do you explain to somebody in Santa Monica what a hush puppy is? We’ve got blueberry and strawberry hush puppies that come with an icing pack. Now you can bake them or fry them. They’re better fried because they’re like doughnuts, but they have real fruit inside them, and you drizzle the icing all over the top.
Wendy: Well, that’s a healthy choice. I’m sorry.
Mike: I would never say it was a healthy choice, on camera or off. I’ll tell you my saying about fried food in a second. So how do you explain what a hush puppy is to somebody in Santa Monica, right? So, we shot a series of videos from 30 seconds to 2.5 minutes that are simply prep videos. The old overhead shot, bing, bing, bing, bing, bing, bing, bing, and all of the banner ads linked to the videos and then down to our landing page. The nicest thing about WMX is we’ve got several different creative executions out there in the Walmart sphere and their system is, in real time, monitoring which ads are performing and which ones aren’t and it’s suppressing the ads that aren’t performing and promoting the ads that are, and this happens in real time, it’s set it and forget it for us. And then the icing on the cake, or the hush puppy, at the end of the day is the provide a dashboard and we can monitor some of the results, others won’t be available until the end of the campaign, but it’s just this beautiful turnkey gorgeous thing and I’d never heard of it. So, we take that, we do an overlay of social media, very heavy presence on Facebook, Twitter, Pinterest and Instagram (where a lot of the foodies go, right?) and that has a national reach, whether it’s intended or not. So, that’s our national campaign. I don’t have a 40 million dollar media budget like I did at Anheiser-Busch, but I can spend about $200,000 in a very targeted fashion and over a focused time period and read the results, and if I want to we can come back and repeat it 2 or 3 times a year. So that’s how we’re getting the product off the shelf. Now we’re only into this, products went off the shelf September 14th and it takes 2 weeks for all the Walmarts to convert, so really we’re just this week getting full distribution nationally. I had the campaign kick-off on the 14th of October and you can just see the weekly sales results tick up the day the campaign kicked in.
Wendy: So how do you do that at House-Autry Mills? How do you figure out how to take those features and turn them into benefits? What’s your process there of understanding?
Mike: First by understanding our core consumer segments. We’ve got two audiences. Among our current consumers we index 300–500 with African American families. So, this was a segment that had bee totally ignored but the company historically. So, we went out, pulled some data, found out that we indexed that highly, did some qualitative work to understand how to connect with them emotionally, their vocabulary, what interests them, what values them about our brand, and it turns out it’s fried food and skillets. Skillets are handed down from grandmother to mother to daughter to granddaughter as if it was a cherished piece of family history, which it is because in black culture, frying is just an inherent part of being part of the Southeast, which is where most African Americans trace their roots back to.
Wendy: So how did you deal with that from a marketing standpoint? What came next after getting the data?
Mike: Well, the first thing we did is we needed to forget about frying as a functional activity and think about it as an experience that brings families together, in the kitchen and around the tables. So, the first thing I did was put together a brand video about our core audience and how important the House-Autry brand is to that audience, about bringing families together around the dinner table when life these days works against that. Everybody’s texting across the table, the kids are going to soccer practice and ballet practice and fencing lessons and God knows what else, but we’re the brand that brings people together around the dinner table on Friday nights, usually for fish, and Sunday afternoon after church for fried chicken. So, we had to change our attitude about what we were actually delivering and we’re delivering a family experience, and the brand video had to communicate that on real emotional terms, so I worked really hard with the agency and the production company to get the casting right and let people speak in their own words. We didn’t script one word of it.
Dan: So, you’ve described that you’re going to do some more data gathering and you’ve got this large segment that you don’t know a lot about. Gosh, what if this tells you something that’s counterintuitive to what you’ve learned already?
Mike: Well, my gut tells me it wont.
Wendy: Now, how many years of experience do you hold? That drive the gut.
Mike: My gut is 7 years old. What triggered this deeper dive was this: as part of our redeployment of assets from NASCAR sponsorships to the CIAA basketball tournament in Charlotte, 12 historically black colleges to have a blast of a week in February, we moved all of our money over to that sponsorship last year tied in with Food Lion at an enormously successful event. I hired 10 students from the schools and the CIAA to work our booth because I figured the people that go to the CIAA basketball tournament probably don’t want to spend time with a bunch of middle-aged white guys. So, we hired all black students to work the booth and it was phenomenal. The kids were great, they got some marketing experience, I was coaching them, so it was an educational experience for them, it was good for the brand, it was reaffirming Food Lion, gave us extra display space, everything worked together.
It was great, but in the process of looking at that we hit upon a formula and, I’m giving away the company secret here. You can go call on let’s say Albertson’s Supermarket chain and you can go in the front door and get an appointment with the buyer and you can present your products and pay your slotting fees and maybe get it on the shelf, and maybe get thrown out in 6 months because it didn’t turnover, and it’s a maddening experience. It’s byzantine trying to go in the front door. So we’ve developed a back door. The back door is this: for key accounts, fully strategic accounts, we’re trying to find promotional activities that we can pay for, give them all the sponsorship rights for free in exchange for putting our products on the shelf at reduced or no slotting fees, and we’re only asking them to put products on the shelf that should be there anyhow.
So, for example, the Kroger Atlanta division has always been weak in terms of carrying the right mix of our products and the number of products. So, through the firm that handles sponsorships for CIAA, we learned about the Honda Battle of the Bands. 8 schools, 8 historically black colleges from all over the country flown into Atlanta for 3 days, they have a big exhibition on a Saturday in the Georgia Dome, 63,000 seats are filled, big experience, so we tried to use that but Honda puts some limitations on the investment that cosponsors could make, way beyond our needs, so we had to back away from that. So we contacted a guy in Atlanta that our sales manager knows and we are going to sponsor Universoul—Universe-S-O-U-L, which is a 25 day African American circus, concert, food-fest in the parking lot at Turner Fields for the month of February for half the money of Honda. So we’re going to give the sponsorship to Kroger in exchange for some help with some products. Our sales manager and I are trying to make the pitch to them at the end of this week, beginning of next. And that’s a great deal because it’ll be House-Autry and Kroger on all the signage, on all the TV, all the radio, all the social media, newspaper ads—I mean they’re doing it big time and it is a blowout of an event.
So that’s how we’re trying to do things differently to get into retail rather than just writing a check, because small brands can’t afford to do that. So, our key now is we’ve identified our top 10 new accounts nationwide. I’m on the search for events and one that came up was Country Music Awards in Nashville, and everybody goes, “Hey. You’ve got to be at this thing.” Texas Pete is there. Their demographics are just like yours. They said it was the best thing they ever did and it’s only $25,000 for a 30×30 booth for 4 days.” And I go, “Whoah! That sounds like a good investment!” But then I said, “Is it a good investment? Why is it a good investment?” And it hits that other half of the demographic. So the purpose of the Neilson research is to not only understand who these people are and their demographics but also how they consume media. Are they fans of country music? Do they go to music concerts? Do they watch the CMA awards when they’re on TV? If I can confirm that, I’m ready to write a check. If not, I’m going to get beat up by everyone at the office who says, “Oh this is perfect. I want to go,” but that’ll be the recommendation. The data is going to tell us whether it’s a good investment or not.
Wendy: So tell us about 2017. What’s coming for the brand? What are your plans?
Mike: Well, it’s going to be a pressure-packed sprint to the finish of 2016 to make sure that our product turnover at Walmart is achieving the levels that we all expect, because if we’re not a success, and I don’t expect everything to be successful, we’ve got to have that next wave of products to come in to keep them excited about working with us and maintaining our space, and again, if we can use that as a proof point that consumers accept these new products, all the chains in the area are going to see the new items pop up and they’ve never heard of House-Autry so they’ll call us. So it becomes a self-feeding model after a while. Next year our goals, big goals, are going to be two things: Number one, get the product off the shelf. Now we’ve got a good team that can get it on the shelf, it’s up to marketing to keep it moving off. I just hired a new Assistant Marketing Manager, so now I have two people working with me. We were the one-armed paper-hander for quite a while. So I got a little more help which is great. The other big area to focus other than consumer pull is developing a new platform for growth. We know we need to do something differently. What it comes down to is a classic branding challenge. Where can we take our brand? Where will it travel to? What product categories? What benefit delivery do consumers allow us to create for them? Because it’s all about… The consumer has the permission. They give us permission to do things at the end of the day.
Dan: What I think is very interesting, the words that you used about where are they taking your brand, because most will say, “I, the brand owner, am going to decide where my brand—”
Mike: Mmm. All-knowing, all-seeing, the Magnificent! I am all-knowing! I will take our brand—” No you won’t. It’s all about permission. Where do consumers give you permission to take your brand? So, that’s going to b an exercise that our CEO and I are going to be heavily involved in. The later half of next year, we want to grow, we are one of the primary employers of Johnston County, which is not a rich country by any stretch. We’ve added 26 new jobs as a result of the growth that we’ve had. We had 100 employees, we have 126 now. So, we have an obligation to the community to do marketing right, we have an obligation to our shareholders to do marketing right, and we have an obligation to the brand to treat it with the respect that it’s earned to have survived since 1812. So that’s going to be an interesting exercise. It’s going to be a mix of classic product concept statement testing, it’s going to be a deeper qualitative dive with the segments that we identify as being the likely ones and really seeing if they say, “Oh yeah that’s a good idea” or “Don’t ever bring that into my store.” At the same time trying to boost margins. The other thing we didn’t talk about about branding is companies with strong brand make more money over the long haul than those with weak brands. So if you’re not focused on margin when you’re developing new products and testing the limits of your brand, then that’s marketing malpractice. You should be taken out and shot. That’s what I would do, and I’m a kinder gentleman. But marketing enhancement is really where we need to go to because we’re going to be in a situation where we’ll be able to milk some business as it declines but then we’re going to get to that point where there are distribution inefficiencies, you can’t support it with all the marketing support that it was used to, and things could accelerate downward quickly. So in the meantime, back to that statistic I mentioned that is true because I said it, 20-30% of revenue should come from products that don’t exist now in 3 years for most companies, especially in the food business.