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Weight Watchers Food Company builds success.

Founded in mid-1991, the Weight Watchers Food Company hit the ground running with an aggressive plan to capture and increase market share. Today, a multitude of reformulated frozen entrees, innovative sublines and dry grocery items are being stocked by supermarkets nationwide. Additionally, Weight Watchers Food Company is entering new product categories and new channels of distribution. Brian Ruder heads the affiliate as its president and chief executive officer. In a recent interview, he offered insight into how the company has swiftly rebuilt its brand and how he plans to make Weight Watchers Food Company a $1 billion retail company by 1995.

Q. How would you describe the new Weight Watchers Food Company performance to date?

A. In the weight loss industry, success is often epitomized by before and after stories. Weight Watchers Food Company is no exception. In less than a year and a half, Weight Watchers Food Company has catapulted into a leadership position by introducing innovative and exciting new products into the marketplace, coupled with a consistent upward trend in sales. The dynamic innovations taking place in our business provide the most striking before and after comparison in the history of the weight loss and wellness industry. Shipments in our latest fiscal quarter were up 29 percent with strong growth across the portfolio.

Q. What exactly has the company done to effect this change?

A. At its inception, Weight Watchers Food Company began a comprehensive upgrading and total redefinition of our entire line of food products. Our efforts touched every piece of our product portfolio as we upgraded both nutritional values and, most importantly, great taste. This herculean endeavor culminates in our strongest advertising campaign ever..."Total indulgence. Zero Guilt."

Today, there are roughly 250 products in the Weight Watchers Food Company line. Over the last year, we introduced or reformulated 144 new items. What you see is an entirely new and upgraded Weight Watchers Food Company product line. A trip down the supermarket aisle provides one of the most startling before and afters anyone could imagine.

Q. People say that the new Weight Watchers Food Company fosters a culture that encourages new ideas and action. Is that true?

A. Definitely. We're committed to delivering dramatic profit and volume growth. All of us possess a bias for action, a great sense of energy and a willingness to take educated risks. The focus is on doing the job with the processes we need - not with the bureaucracy we don't want. We don't have lengthy debates on a dozen different options with only one going to market. We create multiple "home run" ideas and they all go to market.

Overall, we have a leaner, faster and market driven infrastructure. Not only have we dramatically reduced the cost of our business system, but we have significantly enhanced our cycle time in bringing new products and ideas to the market. What was once a 22-month new product introduction cycle has been reduced to as little as 14 weeks. We're action oriented. We use our intuition and we make things happen ... fast.

Q. What's been the scope of new Weight Watchers brand product introductions?

A. Our new products are everywhere. They include three different "sublines" of entrees and blockbuster desserts, like Chocolate Eclairs and Triple Chocolate Caramel Mousse. We launched innovative frozen novelties including a caramel nut bar and sundaes packed in special cups that allow consumers to heat the sauce toppings in microwave ovens while the ice cream remains frozen. It took a packaging breakthrough to make that possible. We've also added popular hand held sandwiches to our frozen breakfast line. Our non-frozen products portfolio also underwent a renaissance. We've taken our dairy line and created a sub brand called Country Cottage Farms. And, there's lots of exciting new products activity in our grocery lines like caramel popcorn, sandwich cookies and we're just now introducing "Sweet Celebration" candy bars. So, when you ask me what's new, the answer is just about everything!

Q. Has most of the company's innovative focus been in the freezercase?

A. As a hew company, we chose to make a bold and immediate statement about our intent to capture the leadership position and increase our market share. As a result, we focused our initial energies on creating excitement and differentiation in the healthy frozen entree freezercase, the arena we considered to be the battleground for leadership in the healthy foods industry. To do this, in January '92 we launched Ultimate 200, a new subline of 11 items containing 200 or less calories - the lowest in the category. This subline represented a major new segment for us and we flagged this innovation with a new package design. But, we didn't stop there. In March we introduced Stir-Fry entrees with seven popular varieties for the nutritionally conscious consumer who wants to explore exciting new taste alternatives along with crisp, crunchy vegetables right out of the microwave. We also added five more items to the Ultimate 200 line. And, by the way, consumer response is nothing short of phenomenal as Ultimate 200 market share reached a high of 31/2% of the entire frozen entrees category.

But, our most exciting home run story is Weight Watchers introduction of Smart Ones, a line of 10 entrees, each with only one gram of fat or less, for a

full 8 to 10 ounce serving. We began shipment last August '92 and Smart Ones has had unprecedented marketplace success. Retailer acceptance is so great, the product appeared in freezer cases in record speed. Consumers quickly responded as well with stores re-ordering more product 2 or 3 times in the first month. We're responding, too, by introducing seven new Smart Ones to the line this month. They have great names like Honey Mustard Chicken, Ravioli Florentine and Chicken L'Orange. Each item is delicious and contains only one gram of fat.

Q. It appears that sublines are the basis of Weight Watchers 1992 new products strategy in the frozen entree category. Is it working?

A. More than anticipated. And, the strategy is a simple one. We wanted consumers to quickly understand what the product in the box would do for them. And, we wanted the package to amplify that communication. Ultimate 200 clearly defines its calorie positioning. The elegant Stir Fry packaging clearly demonstrates its flavor delivery. Now, Smart Ones takes this idea to a new level with the primary focus on nutrition and the emotional benefits for eating smart. Equally important, the introduction of new sublines in distinctive packaging creates news and excitement in the freezer case. It clearly communicates to the consumer that Weight Watchers is offering new, great tasting choices and variety, key consumer elements for a successful healthy frozen entree business. The Weight Watchers logo on all the packages is what we stand for--nutritionally advantaged and great tasting food.

Q. Are the new Weight Watchers Frozen Entree sublines eclipsing the traditional White Box core line?

A. No, to the contrary. Keep in mind, our subline strategy is not to create mutual exclusivity but, to add depth and diversity to the brand and offer the consumer more variety and choices. To draw them to the freezercase. We already have leader entree items in the core line with 56% of Mexican sales and 86% of the topped baked potato business. So, our strategy is to build and strengthen this core line.

Q. How are you doing this?

A. In the spring and summer of '92, we added five new "value added" items to the white box line, like Macaroni & Cheese, and hot priced them at $1.99. These have done incredibly well. This month, we're introducing three more "value added" items: Swedish Meatballs, Grilled Salisbury Steak and Penne Pasta. But, that's not all. We are concurrently introducing three new Mexican items we're flagging as "Mexican Style Meals." And, we've reformulated our entire pizza line with a zestier, more flavorful sauce and crispy crust. We call them brick oven style pizzas and we're launching three items this month.

Q. Is the competitive battle over entree nutritional superiority over.?

A. Yes. Nearly all the brands in the weight control category are nutritionally balanced. We need to answer the consumer's number-one question: "Does it taste good?" Our answer is a resounding Yes! Our Weight Watchers brand products offer richness and total indulgence, all with zero guilt. That's a unique selling point. Such indulgence has made our chocolate mocha pie number-two in the overall frozen dessert category. Clearly, it's popular with dieters and non-dieters alike.

Q. What is the latest news in the Weight Watchers Frozen Dessert line?

A. Our performance in frozen desserts is meteoric. Starting with a 19 percent share in December'91, we averaged a 30.5 market share over the past year. Weight Watchers Frozen Desserts are now the #1 full or reduced calorie dessert in the United States. During the last year, we added exciting items like Caramel Fudge ala Mode, Mississippi Mud Pie and Strawberry Shortcake ala Mode. Presently, on our launching pad are Toasted Almond Amaretto Cheesecake, Chocolate Irish Cream Cake and Triple Chocolate Cheese Cake. We've also launched the renaming of the line to "Sweet Celebrations" with new packaging that hones in closely on the scrumptious product. In addition to our success with desserts, in the novelty business, we're the number-two brand closely behind Popsicle, the market leader. You'll be hearing more in the spring about new items we're introducing.

Q. Is Breakfast-On-The-Go! a success?

A. Yes. Weight Watchers brand foods really opened this category three years ago, primarily to encourage dieters to eat what is often the most important but also the most overlooked meal of the day. After strong early successes, we began to delve even more into consumer behavior and were told, "breakfast takes too long." We listened and revamped our line to focus on hand-held items that can be prepared quickly and eaten on the run. Hence, Breakfast-On-The-Go! was born as a repositioning for this exciting business. It has really hit a consumer hot button. Since the change over to this new subline, consumer purchase trends are up 18 percent.

Q. What opportunities do you see ahead in the foodservice arena?

A. Foodservice provides the Weight Watchers brand with an opportunity for extraordinary growth. We're already working with major accounts, including a test with Burger King and a program with American Airlines featuring a Weight Watchers entree on their special low-calorie, low fat and low sodium menus. We've been testing Weight Watchers products on hotel restaurant menus with great success, so we anticipate additional opportunities here. Plus, we're experimenting broadly with vending. Ultimately, I see us working closely to place Weight Watchers brand foods in college cafeterias, on airplanes, in family restaurants and more.

Q. How important is the Weight Watchers weight loss program business to the food brand?

A. The 20 million current and past members of the Weight Watchers meeting room program provide a secret weapon for Weight Watchers brand foods. Weight Watchers members hold the highest consumer loyalty toward any brand in our competitive set. Historically, Weight Watchers brand foods were not as actively promoted among members as they could have been. And, we did not broadly use our food business to promote Weight Watchers meetings.

With the assistance and cooperation of our sister affiliate, Weight Watchers International and its franchisees, this has changed to everyone's benefit. We are now fully leveraging this relationship with aggressive cross promotions. As an example, for the second year in a row, we're implementing the most comprehensive direct marketing program in the history of the Heinz Company called the "Winners Program." It's an incentive program in which members can earn points by purchasing Weight Watchers brand food products and attending the weight loss service meetings. The points can be redeemed for catalogue gifts. The 1992 program results were outstanding, providing the program is a win-win for both the food company and the service business. The use of Weight Watchers food products by members increased and the program helped to extend members' length of stay in the meeting rooms. The 1993 Winners Program just began and we expect to surpass our excellent results from last year.

Q. What's your vision for the future of the Weight Watchers Food Company?

A. Our vision is for the Weight Watchers brand to become an even more integral part of American fabric and culture. We plan for Weight Watchers products to achieve greater success in existing categories and to enter new categories. We plan to penetrate new and exciting channels of distribution including national foodservice chains, in-store delis, vending ... all places consumers express strong interest in buying indulgent, nutritionally advantaged foods.
COPYRIGHT 1993 Frozen Food Digest, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Publication:Frozen Food Digest
Article Type:Interview
Date:Feb 1, 1993
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