Case Study
Nielsen Insights in Action:
Finding The Right Product Mix
Hormel Food relies on Nielsen Assortman
Optimizer to maximize sales
Company
Hormel Foods
The Hormel Foods Corporation can trace its roots to a small
meatpacking plant founded in 1891 by entrepreneur George A.
Hormel. Since its inception, the business has gone on to become a
leader in the packaged food industry, with its hearty meal options
becoming a staple in many households.
The cornerstone of Hormel Foods’ success has been its ability
to deliver convenient and satisfying meals to consumers. Its
introduction of hit products such as Dinty Moore Beef Stew and
Spam in the 1930s – as well as the acquisition of Jennie-O Foods
in 1986 – were key contributors to the impressive growth Hormel
Foods has experienced throughout its history.
The Business
Issue
Company Facts
Hormel Foods
• Headquartered in
Austin, Minnesota
• Brands include Hormel, Spam, Jennie-O, Dinty Moore and Chi-Chi’s Salsa
• Employs more than
19,000 workers
One of Hormel Foods’ biggest-selling products is the Hormel
• Net sales of $6.5 billion
Compleats line of microwavable entrees, which offer consumers
the convenience of an individually packaged, easy-to-prepare
in 2009
meal. While Hormel Foods’ innovation has helped to drive the
company’s success, retailers’ limited shelf space – especially within the microwavable meals category –
has in recent years constrained the number of SKUs it was able to offer. Hormel Foods was faced with the
question of how to continue to grow the Compleats business without expanding the total number of meal
options on the shelf.
Additionally, a few of Hormel Foods’ main competitors had recently entered the microwavable meals
category, introducing new products to compete with the Compleats line. The result was increased pressure
to optimize the brand’s product assortment. “We wanted to make sure Hormel Foods was in a position
to competitively respond to activity in the market,” said Brett Asay, senior product manager of Hormel’s
microwave meals portfolio.
Hormel Foods relied on its longstanding relationship with Nielsen for the marketing expertise it needed.
“Since Nielsen had been conducting other custom studies for Hormel Foods for years, they had a thorough
understanding of our business,” Asay said. “Expanding our collaboration into assortment decisions was a
natural progression of our partnership.”
Nielsen Insights in Action:
Finding The Right Product Mix
The Solution
In order to better understand consumer preferences and
buying behavior, Nielsen conducted an extensive study of the
microwavable meals market. In addition to the information
gathered from their study, Nielsen provided Hormel Foods with
Nielsen Assortman Optimizer, a web-based evaluation tool that
helps marketers continually identify the products contributing
most to the brand’s overall profitability.
Case Study
“
Nielsen conducted a comprehensive analysis of the Compleats
line, looking for products that offered the most incremental value,
not just the highest sales. By focusing on incrementality, Hormel
Foods could incorporate meal options that reached different
customer segments and complemented the other offerings
within the line. The result was a significant shakeup of the brand’s
product mix, with Hormel adding several new varieties to store
shelves while eliminating less effective ones.
A Win-win
Outcome
“The information
provided by the Nielsen
Assortman tool has
helped Hormel Foods
increase credibility
with retailers and
allowed us to maintain
an advantage over
our competitors.”
”
Brett Asay,
Senior Product Manager of Hormel’s
microwave meals portfolio
The new approach to assortment helped Hormel Foods increase
sales of Compleats entrees by as much as 5 percent in some
stores without adding to its total number of SKUs and despite
a difficult economic environment. The product line has also significantly surpassed its main competitors
in terms of sales dollars, volume and sales velocity. As of August 2010, the brand’s top-performing SKUs
experienced a 5-percent increase in total points of distribution – a metric used to measure the reach and
depth of presence in the marketplace – since Nielsen’s involvement.
The Nielsen Assortman Optimizer evaluation tool has proven to be a valuable asset when interacting with
retailers and channel partners as well. Hormel Foods’ category sales team uses the data Nielsen Assortman
offers to make specific product recommendations to their various accounts. “The information provided by
the Nielsen Assortman tool has helped Hormel Foods increase credibility with retailers and allowed us to
maintain an advantage over our competitors,” said Asay.
To learn more about how Nielsen can help with your assortment
strategies, contact [email protected] or visit www.nielsen.com
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