National Brands on the Run, Announce Aggressive Defensive Ad Spends

Late last week Ad-age published the following article detailing the increase in ad spending that CPG’s plan in the next year to combat Private Brands. As the Private Brand story continues to evolve it becomes increasingly clear that Private Brands are becoming “real” brands and that the “real” brands are treating them as the significant competitors they have become.

Package-Goods Marketers Vow to Boost Spending
To Fend Off Private Label, Kraft, P&G, General Mills Plan to Increase Investments in Advertising, In-Store, Coupons

Consumer package-goods companies found a rare point of agreement at the Consumer Analyst Group of New York conference this week: the need for continued increases in marketing support. Marketers battling private label from Kraft to Procter & Gamble and General Mills promised bigger investments in advertising, in-store promotion, shelf signage, coupons and packaging.

Hershey and Heinz, which have lagged the package-food industry in marketing spending, are racing to bridge the gap. Heinz CEO William R. Johnson noted “the industry’s renewed focus on innovation and marketing in response to the challenge of store brands.”

“Nothing like the thought of hanging to concentrate the mind,” he quipped. Heinz increased marketing spending by 40% for the most recent quarter. Overall, Mr. Johnson said Heinz’s marketing has increased by 60% over the last four years. He added that Heinz has significantly increased its coupon program in the U.S. and U.K. as consumers are redeeming them more. These investments aren’t included in the marketing budget.

Read the entire story.