Brand/Case: President`s Choice Winner

Cassies 2009 Cases
Brand/Case: President’s Choice
Winner: Retail—Silver
Client Credits: Loblaw Companies Ltd.
Galen Weston, Chairman, Loblaw Companies Ltd.
Craig Hutchison, Senior Vice President Marketing
Guylaine Lessard, Senior Director Marketing
Agency Credits: Bensimon Byrne
Jack Bensimon, President
Peter Byrne (retired - former Chief Creative Officer)
David Rosenberg, Senior Vice President, Creative Director
Kathy Byrne, Senior Producer & Co-Director
Janice Boduch, VP Group Account Director
Charlotte Osborne, Account Director
Crossover Notes: All winning cases contain lessons that cross over from one case to another.
David Rutherford has been identifying these as Crossover Notes since Cassies1997. The full set
for Cassies 2009 can be downloaded from the Case Library section at www.cassies.ca
Crossover
Crossover
Crossover
Crossover
Note
Note
Note
Note
2.
9.
10.
16.
Brand Truths.
Turnarounds.
Conventional Wisdom—should it be challenged?
When a campaign stumbles.
To see creative, go to the Case Library Index and click on the additional links beside the case.
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EXECUTIVE SUMMARY
Business Results Period (Consecutive Months):
Start of Advertising/Communication Effort:
Base Period for Comparison:
Jan – Dec 08, and Jan – May 09 (17 months in total)
July 1, 2007
Jan - Dec 07, and Jan - May 08
a) Synopsis of Case
The case of Loblaw and President’s Choice is one of a huge Canadian retailer in the midst
of one of the greatest turnarounds in Canadian retail history. For years, Loblaw dominated
the grocery category. But by 2005 it had lost momentum and was struggling. This case
will explain how Loblaw was able to use one of its own brands, President’s Choice, to
restore a Canadian institution to profitability. Crossover Note 9.
The advertising features a spokesperson who just happens to be the chairman of the
corporation and the grandson of the founder. Debate may rage within creative circles as
to whether it constitutes award-winning creativity in advertising. But in the real world,
where consumers vote with their wallets, the creativity is proven and the outcome is
unmistakable: it was advertising featuring Galen Weston that brought customers back to
the President’s Choice brand and to the only stores that sell it.
To witness a turnaround on this scale in such a short time (in the midst of a profound
global recession, no less) confirms that huge rewards come from taking huge risks. Isn’t
that the definition of a Canadian Advertising Success Story?
b) Summary of Business Results
o More
people
are
shopping
at
Loblaw
banners.
Since
the
debut
of
the
Galen
TV
campaign,
there
has
been
a
12‐point
increase
in
the
percentage
of
people
shopping
Loblaw
Companies
stores
as
their
primary
store
(from
31%
in
June
07
to
43%
in
June
09).
o Sales of President’s Choice were up 12.4% in CY 2008 and another 9.3% for
2009 YTD. This represents hundreds of millions of dollars.
o More people are buying President’s Choice more often. Regular purchasers
increased from 41% in 07 to 51% in 09.
o Net Loblaw earnings went from a loss of $219 million in 2006 to a gain of
$545 million in 2008.
SITUATION ANALYSIS
a) Overall Assessment
Twenty-five years ago the grocery landscape in Canada was very different. National
brands held the balance of power in the retailer/supplier relationship, and retailers worked
to squeeze tiny margins from the same brands that their competitors sold. As a result, the
grocery retail environment was an entirely level playing field.
3
In an attempt to increase margins, Loblaw Companies began to experiment with private label.
While consumers were not immediately drawn to the stores in search of these brands, over
time they proved to be a win/win—higher margins for Loblaw, great products that cost less
than national brands for the consumer. Moreover, Loblaw was celebrated for learning how to
flex its retail muscle to launch and grow its own brands by controlling the shelf space.
President’s Choice was an offspring of this approach. Launched 25 years ago, it
introduced consumers to new tastes from around the world and, over time, became
Canada’s largest brand. It was rooted in both food and innovation and launched hundreds
of new taste experiences every year – growing to over 5000 food items.
Eventually, the need for growth led to expansion beyond food – into financial services
(President’s Choice Financial), mobile phone service, insurance, home products (kitchen,
bed, bath, décor items), and even beer. At the same time, competitive private label
brands re-focused their efforts on their food lines, improving their offerings significantly,
and encroaching on PC’s original territory. Additional pressure came from the rapid
expansion of Wal-Mart (300+ stores) with 48 Supercentres offering a full grocery store.
It is difficult to identify when Loblaw and President’s Choice began to lose momentum. In
2003, research indicated that consumers were to some degree ‘living in the past’ recalling
positive memories and experiences of President’s Choice in what they viewed as its heyday.
Crossover Note 16. Loblaw share price fell. The severity of the problem became most apparent,
however, in 2006, when Loblaw reported its first annual loss in 19 years.
b) Resulting Business Objectives
Facing a falling share price, new management was brought in to rebuild Loblaw, and
restore President’s Choice to its former glory. The immediate marketing priority was to
re-establish momentum behind President’s Choice in order to drive traffic to stores and
reverse the sagging value of Loblaw Companies.
c) Budget Range/Share of Voice
Annual Media Budget: Over $5 million, National (E&F)
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STRATEGY & INSIGHT
a) Analysis & Insight
One of the challenges facing the new management was the fact that despite its being Canada’s
largest grocer, Loblaw Companies lacked a common national storefront on which to focus
marketing and communication dollars. In fact, the 1000+ stores were spread out between 21
retail banners (Loblaws, Real Canadian Superstore, Fortinos, Zehrs, No Frills, Maxi, Provigo,
to name a few). While consolidating into a few common banners was attractive in theory, it
was not practical from a timing, infrastructure and financial point of view. The plan had to use
what existed. Further, since consumers had become accustomed to new food experiences, the
impact of a few new items would not be substantial. The turnaround would need a major
marketing engine to drive the business.
Given the scope of the problem, the approach had to be big enough to impact sales on a
very large scale. The decision was made to focus on President’s Choice, since because of
its exclusivity to Loblaw banners it served as a proxy for the stores. Further, given its
scope (over 5000 food items), any growth would affect the company’s bottom line.
b) Communication Strategy
While President’s Choice was universally known, it wasn’t generating the kind of buzz
that was required to re-engage consumers with the brand. We needed to find the spark
that would re-ignite the passion consumers once held for the brand – when it was the food
leader. But the communication had to drive sales for both food and non-food categories.
We quickly determined that messages around freshness or variety would not differentiate
the brand, would not be newsworthy, or would come across as meaningless platitudes.
Crossover Note 10. We needed to find something new and interesting that would inspire
consumers the way it did back in the ‘80s. At that time, eating habits were very plain, and
PC products captured the imagination by offering an affordable taste of the good life. It
was consumers’ aspiration for better eating experiences that connected them to PC so
strongly. But in 2007, what could connect with consumers equally strongly, and on a
broader (not just food-related) basis?
In six short months at the helm, Galen Weston Jr. had set a new mission for the company,
which reflected a strong corporate social responsibility focus. Key pillars of this strategy
included respect the environment, source with integrity, and reflect the nation’s diversity.
The strength of the PC brand had always been its authenticity Crossover Note 2 and,
given the need to generate renewed buzz, the decision was made to focus on its social
consciousness. Further, the brand had heritage in doing the right thing – it had first
introduced GREEN products 20 years ago and had been the first to bring healthier
products to the mainstream with PC Organics and PC Blue Menu. Now was the time to
build on this heritage.
5
The decision was made to focus on the key pillars of Corporate Social Responsibility
(CSR) for most of the year. By featuring specific President’s Choice products as proof
points we would establish the corporate philosophy (to reconnect with consumers) and
sell tons of product.
Pillar
Product
Environment
Green Bag, 2X Laundry Detergent, Phosphate-Free
Dishwasher Detergent, Organics/Baby Food, Water
Filter
Source with Integrity
Apple Crisp, Local Produce,
‘Free From’ Chicken
Communities/Health
Blue Menu Lean Burger
Diversity
Naan Bread, 1000 Tastes of Canada
By focusing for the majority of the year on products that exemplified Loblaw’s commitment
to the world around them, we would earn the license to be a little more lighthearted during
the holiday season and feature great-tasting products. With this strategy, we expected to boost
sales of the items featured. But the big win would come from drawing more people to
Loblaw banners and getting them to buy more PC more often.
CREATIVE EXECUTION
The creative approach may seem unconventional in terms of what is typically considered
creative by award show juries. In this case, however, the approach had to address
consumers’ wariness of a social responsibility message. The greatest downside would be
if consumers dismissed the message as a ‘greenwash.’ We had to underscore the
importance of the message and make ordinary consumers who were already very familiar
with the brand stop and look at it with fresh eyes and newfound affection.
If that weren’t daunting enough, we had to be confident that the messages didn’t come
across as preachy or guilt-inducing. The delivery would have to inspire a desire to make
small changes for the greater good or the impact could backfire.
The creative solution was to feature the new chairman of Loblaw Companies – Galen
Weston (Jr.). Within months of starting his post as Chairman, Galen had laid out the
company’s social responsibility strategy. Given how passionate he was about these
issues, it would not be difficult for him to come across credibly. And that’s when the real
debate began. The PC brand had a long history of using a spokesperson (Dave Nichol,
then-president, had put the brand on the map with his pitchman ads of the ‘80s and early
‘90s). But the decision to make Galen the spokesperson was not one that could be made
lightly – as there were major risks associated with this choice.
6
Beyond the inevitable comparisons to the success of the folksy Dave Nichol ads, there
was the enormous personal risk associated with featuring Galen given his personal
connection to the entire corporation. He was not a ‘hired gun’, but the son of the Loblawcontrolling Weston family. Failure on any level would have huge personal consequences
for Galen himself, the Weston family name, the corporation, and its shareholders. It was
a “huge risk/huge reward” decision.
Despite having no previous experience as a TV spokesperson, Galen was a natural in
terms of performance – he came across as informative, knowledgeable and genuine – not
a pitchman. He was someone people liked and wanted to listen to. Initially, he was not
known at all to the average consumer; he simply came across as the ‘person in charge’
with a genuine desire to make things better.
In a corporation the size of Loblaw, the decision to use Galen as spokesperson was of
particular significance. In the end, given the severity of the business problem and the
need for credibility, the solution demanded no less than the Chairman’s commitment and
personal involvement.
MEDIA EXECUTION
This consisted of short bursts (approx. three weeks) every few months from July 2007 to
the present. During this period the campaign received 46 weeks of support across 17
different products. Media included TV (for each flight), and radio or newspaper, on-line
and in-store support. The following outlines when the various TV ads aired.
The campaign was national in scope. Total budget falls into the over $5 million category
annually.
7
TV CREATIVE
CSR Pillar: Environment – “Water Filter”
Galen:
This
little
blue
box
has
done
a
lot
of
good.
To
recycle
something
plastic,
we
just
toss
it
in.
Galen
:
But
not
all
plastic
lands
in
the
box.
Galen:
Today,
there’s
more
than
seventeen
thousand
pieces
of
plastic
litter
floating
in
every
square
kilometre
of
ocean.
Galen:
This
is
our
President’s
Choice
Water
Filter.
It’s
a
great
alternative
to
overusing
plastic
bottles.
In
just
one
year,
your
family
could
save
over
two
hundred
and
fifty
dollars.
Galen:
…and
over
fifteen
hundred
of
these.
Galen:
So
here’s
to
thinking
outside
the
blue
box.
VO:
The
PC
Water
Filter.
VO:
President’s
Choice.
Worth
switching
supermarkets
for.
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TV CREATIVE
CSR Pillar: Source with Integrity –
“Produce”
Galen:
You
know,
The
folks
who
bring
you
President’s
Choice
buy
more
Canadian
produce
than
anyone
else
in
the
country.
We’re
proud
to
be
the
very
best
customer
of
the
Canadian
farmer.
Galen:
For
our
economy,
for
our
farmers,
for
just
plain
great
eating,
nothing
beats
fresh
Canadian
fruit
and
vegetables
grown
close
to
home.
VO:
President’s
Choice.
Worth
switching
supermarkets
for.
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TV CREATIVE
CSR Pillar: Communities/Health: “Organics/Baby Food”
Galen:
Hi.
I’m
Galen
Weston.
And
this
‐
is
the
class
of
2025.
Galen:
They’re
enjoying‐‐as
best
they
can‐‐
President’s
Choice
Organics
Baby
Food.
Galen:
Like
all
our
hundreds
of
certified
organic
products…
Galen:
It’s
created
using
sustainable
farming
methods…
Galen:
…and
no
chemical
pesticides.
And
now
President’s
Choice
Organics
Baby
Food
costs
no
more
than
regular
baby
food.
Galen:
So
you
think
this
whole
organics
thing
is
going
to
catch
on?
VO:
President’s
Choice
Organics.
Worth
switching
supermarkets
for.
10
TV CREATIVE
Holiday – “Dulce de Leche Cheesecake”
Galen:
President’s
Choice
introduced
our
Original
New
York‐Style
Cheesecake
in
1986.
And
it
became
an
instant
classic.
Galen
:
In
2007,
we
introduced
Dulce
De
Leche.
Another
classic.
Galen:
And
this
year,
we’ve
combined
the
two.
New
PC
Dulce
De
Leche
Cheesecake.
Galen:
In
stores
now
but
only
for
the
holidays.
Galen:
And
it’ll
go
fast.
So
go
get
some.
Galen:
As
in
right
now.
This
second…Seriously.
Go.
VO:
New
PC
Dulce
de
Leche
Cheesecake.
Restaurant
decadence,
just
five
ninety‐seven.
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BUSINESS RESULTS
1. Significantly more people are shopping at Loblaw Banner stores now (2009)
than before the campaign started (June 2007).
Ongoing tracking shows that since the debut of the Galen campaign, the percentage of
people who regularly shop a Loblaw Company store banner as their primary store
was up 12 points (from 31% in June 2007 to 43% in May/June 2009).
Source: Ipsos ASI Tracking
2. In 2008, sales of total President’s Choice brand was up 12.4% (CY2008). Yearto-date sales for 2009 are trending well: +9.3% VYA.
For such a large brand, this level of growth represents hundreds of millions of dollars.
Given the economy in 2009, growth of close to 10% is incredible especially given
that 29% of consumers plan to cut back on grocery spending.1 Sales of advertised
items were also strong. For example, the new Dulce De Leche cheesecake, which
was one of the featured items in TV, generated $2.5 million in sales in the first two
weeks. The PC Water Filter sales in 2009 increased 11 times over the previous year
after the Galen TV spot aired. Despite these strong individual sales, the impact of
those items alone is relatively small compared to the overall brand gains.
3. More people are buying President’s Choice, more often.
The number of people who buy PC regularly (at least once every two weeks)
increased from 41% before the Galen advertising to 51% in May/June 2009.
Source: Ipsos ASI Tracking
1
Source: Bensimon Byrne Consumerology Report, Spring 2009
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4. The strong results for President’s Choice have been critical in halting the slide in
Loblaw value and have returned the company to profitability.
Source: Ipsos ASI Tracking
The new management team put in place a three to five year turnaround plan. While
many of these initiatives are still a work in progress, the advertising is the most
significant visible change with a direct impact on business results. With total sales
volume for PC increasing by hundreds of millions of dollars each year, it’s easy to see
the brand’s impact on Loblaw overall.
CAUSE & EFFECT BETWEEN ADVERTISING AND RESULTS
Research confirms that the Galen Weston ads made people want to buy PC, and they increased
consumers’ interest in the brand. Further, Galen is extremely well-liked as a spokesperson
(even in Quebec, where his attempt to speak French is noticed and appreciated).
Motivation: Every ad tested drove motivation to buy at levels significantly above norm.
Source: Ipsos ASI Tracking
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Connection to the Brand: The ads helped people re-engage with the brand.
Source: Ipsos ASI Tracking:
Appeal of Galen Weston as Spokesperson: Over 80%2 of respondents have a favorable
opinion. These opinions were driven by the advertising - where he comes across as
friendly, approachable, honest and genuine. The research confirms that consumers
generally do not identify him with his family background, but rather with President’s
Choice.
In Quebec, a recent survey conducted by Infopresse indicates that Galen Weston is the
third most visible and popular businessman in Quebec3. And the competition was tough;
he was up against Jean Coutu, Pierre Karl Peladeau (both with deep roots in Quebec) and
Richard Branson.
Also despite 17 different executions, there are no signs of wear-out: recent executions
continue to deliver on all key equity pillars. Further evidence of the campaign’s
integration into popular culture is the fact that it has twice been spoofed on “This Hour
Has 22 Minutes.”
2
Source: Reputation Management Study, The Gandalf Group, May 08 (base of those who are familiar with him)
3
Ipsos Descarie study for Infopresse (conducted in May 09)