SOLON, OHIO — The performance of the Lean Cuisine brand has been a problem for Nestle USA in recent years. Product lines focused on weight management have fallen out of favor with consumers, who today associate healthy eating with such attributes as high-protein, organic and gluten-free. Shoppers seeking what they perceive as fresher fare may be venturing into the frozen section less. As a result, sales for the brand, and several others in Nestle’s frozen food portfolio, have slumped.
But the company is determined to refresh the business, which also includes Hot Pockets, Stouffer’s and DiGiorno brands. Nestle’s recent $50 million investment in a new research and development center underscores the company’s confidence in the future of frozen.
|Jeff Hamilton, president of Nestle’s prepared foods division.|
“We still believe the frozen category in general is still a very rich and fertile category with lots of potential left in it,” said Jeff Hamilton, president of Nestle’s prepared foods division, in an exclusive interview with Food Business News at the July 22 grand opening of the company’s new Solon, Ohio, R.&D. center dedicated to frozen and chilled foods. “If you think about where consumers are today, they’re looking for real, natural food, and that can still be very consistent with what frozen food is. Frozen is the most natural way of preserving food.”
Recently, Nestle pledged to remove artificial flavors from its frozen pizzas and Hot Pockets products by the end of the year. The company also unveiled a Lean Cuisine reboot, shifting the brand’s focus from diet to more chef-inspired, ethnic dishes that offer a variety of attributes and bold yet simple packaging that stands out in the aisles.
So far, Mr. Hamilton said, the restaged Lean Cuisine products are off to a good start. But other recent innovations from the brand haven’t been as successful. The company’s launch of Lean Cuisine Salad Additions wilted within two years. The products included microwave-steamed pouches of grilled chicken, vegetables and dressing that consumers added to lettuce to make a salad.
“Salad Additions did not work, and one of the reasons it did not work is because (frozen is) a convenience category, and we were asking the consumer to do too much work with that concept,” Mr. Hamilton said. “We learned a lot from that experience. In theory it makes perfect sense… (but) that did not last.”
During the interview, Mr. Hamilton discussed Nestle’s strategies to repair its flagging frozen brands.
Food Business News: What gives Nestle confidence it can turn the frozen business around?
Jeff Hamilton: I think we have much better insight now than we ever have around how Americans are eating and how we can make our product offerings more relevant to them in the way they eat today.
What is Nestle’s strategy to draw consumers back to the freezer aisle?
Mr. Hamilton: We need to really focus on the quality of our ingredients, the recipes that we’re offering and also just the ingredient deck in terms of what we’re putting into our products. If you look at the new products we’ve launched recently, if you just read through the ingredient deck, you’ll see all very familiar, recognizable things that you’d find at home in your own kitchen cupboard.
That’s a really different way for us to think about formulating our products. If you go back 5, 10 years, consumers were not that interested in looking at all the ingredient decks and dissecting… They just went on taste, primarily, and what they could see on the Nutrition Facts. Now they’re really interested in the ingredient panel, so we’ve changed the way we formulate our products accordingly.
Consumer demand for simpler ingredients seems to be a relatively new phenomenon. How long has this initiative been under way at Nestle?
Mr. Hamilton: For decades, you’d always hear some consumers talking about no artificial colors, no artificial flavors. That’s not completely new, but in terms of really getting scale and momentum behind it, that’s a relatively new and recent phenomenon in the last two to three years, and you see us now responding with the products we’re putting on the market.
How long does it take to reformulate a product?
Mr. Hamilton: It varies product by product. In some products, it’s a relatively simple fix; it’s one or two ingredients that we have to change, and that can take six months.
In others, we have to start all over and completely reformulate the product, and in the end, we’re always trying to get back equal or better taste than what we’ve had before, so we have very high standards in terms of where the benchmark is, but over time we’re going to end up reformulating the vast majority of our products to get back to simple ingredient decks with familiar, recognizable ingredients. That’s an ongoing process for us that pretty much cascades the whole portfolio.
Are there cost implications associated with shifting to simpler ingredients?
Mr. Hamilton: There can be cost implications. Sometimes the implications are positive; sometimes they’re negative. So far that hasn’t been a huge barrier for us, but when we get into things like organic ingredients, which is kind of a step beyond even this fresh perception, then we start to get into incremental costs that we have to make sure we’re balancing what it costs to us and what the consumer is willing to pay and make sure we keep that in the right balance.
Nestle’s recent reboot of Lean Cuisine gives the products a more female-oriented positioning. Will this alienate your male consumers?
Mr. Hamilton: We still see men eating it, but it’s fundamentally a brand for females, and that has always been the case when we look at who has used the product since the very beginning. It’s been much more female than male oriented.
We really felt we had to rethink the whole positioning of the brand to be more relevant in today’s, what we call, “modern eating environment.” And so that means we have to connect with people, connect with the modern woman and be relevant to her in the way she thinks about herself and her health, and that’s no longer about things like low fat, low calorie, dieting. That’s gone.
And what that’s been replaced by is what we call “new health,” so things like gluten-free, organic, high-protein, more vegetables, less meat. Those are all the trends we see Americans following today, and so we have completely readjusted the brand communication as well as the products to be much more relevant with the way people are eating today.
The vast majority of what we have been doing is in this Marketplace line, which is the line in the black package, and that’s really where we’re pushing hard on new health. So that’s where we have gluten-free products, organic products, high-protein, a cup of vegetables in each serving, as well as much more forward culinary trends. We have a wide range of New Mexican products, you’ll start to see more Asian products, even in some of our American products you’ll see much bolder flavors.
Nestle just introduced a new Fit Kitchen line of high-protein meals under the Stouffer’s brand, which has not historically been a health-oriented brand. What inspired this new product line?
Mr. Hamilton: Stouffer’s has a very strong culinary heritage. People trust Stouffer’s; they know Stouffer’s makes great high-quality, great-tasting products, and what we’re trying to do with the Fit Kitchen is extend that into more of a new health territory like we’re doing with Lean Cuisine for women, (but) for men, using the Stouffer’s brand. And the real key benefit we’re pushing on in Fit Kitchen is high-protein. So we have 25 to 27 grams of protein in every meal for somewhere between 300 and 450 calories per serving.
It’s very satiating, so it keeps you full for not just for an hour or two, but for three or four hours, and it gives a really great solution for men who are looking for a convenient, filling, hearty meal.
How are the new products performing so far?
Mr. Hamilton: We’re seeing really good returns on both Fit Kitchen and Lean Cuisine. They’re off to a very good start. We’re only three months into it, but so far, so good. I’d say we’re on or ahead of our expectations.