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May 2006 - Strategy Magazine
Biz

What's the strategy? Series: word from the top of Canada's biggest CPG players
The new Kraft
Into risk, open to partners and loving the tech

by Mary Maddever
page 13

If you were asked which product Kraft Foods, the world's second largest food and bev co., would identify as its signature brand, you might think of KD, or Singles. If given a further clue that the answer doesn't involve J.R.'s famous cheddar, your thoughts might turn to some of the megabrands built by the companies that have folded into Kraft over its 100+ years - Oscar Mayer's jingle king wieners, General Foods' Jell-O, Nabisco's Ritz crackers or Oreos, which became some of those good cookies Mr. Christie makes.

All good guesses. But in terms of a signature product that signals where Kraft is headed, the answer, according to Kraft Canada president Dino Bianco, is Tassimo. And no, it's not a new biscuit.

Launching in Canada mid-May, Tassimo is Kraft's first kitchen appliance entry, and more importantly, this $199 single-cup "hot beverage system" embodies the new post-restructure going-to-market model for Kraft Canada.

Tassimo is a global Kraft Foods initiative, first launched in France in 2004, later hitting Switzerland and the U.K. before coming to Germany and the U.S. in September. It was based on recognizing that the old way of making coffee wasn't meeting consumer needs - who needs a whole pot of coffee anymore, or wants to wait while it brews for that matter? And when Kraft hit upon a method that was faster - they partnered up with Germany-based Braun, a P&G subsidiary, on a proprietary solution system. The patented technology ensures that the discs you pop in the machine to make coffee, cappuccino, espresso, tea or hot chocolate are only produced by Kraft, while the unit itself is produced and distributed by Braun.

This is significant for Kraft, according to Bianco, who stepped into the presidency in November, because it indicates a new openness in terms of ideas and approaches for Kraft Canada. "The traditional model of 'we make it, we produce it' is changing; we're becoming less insular," says Bianco, both in terms of working more globally within the company, and partnering outside.

It also plays well into areas Kraft has identified as major societal shifts driving strategy going forward, as it's based on both boomer- and convenience-focused consumer insights. And it indicates the new behavioural mindset of Kraft itself - more risk taking.

On the communications front, Kraft Hockeyville signals the way Kraft is approaching marketing: big, ownable, integrated ideas. Kraft Hockeyville is a contest to find the town that exemplifies hockey spirit, chronicled in a TV series on CBC. The seven-ep, hour-long show debuted March 29, and at the end of the series' run in June, the winning Canuck community will net $50,000 from the Home Depot for its arena, plus $10,000 in equipment from CCM/Reebok. And oh yeah, the town crowned Hockeyville, as voted by CBC viewers, gets to host a live exhibition game between two Canadian NHL teams.

Off-air, the ramp-up to Hockeyville scored at retail. Bianco says the program has already hit its goal by creating buzz and connecting with consumers across multiple touchpoints. On the website there's evidence of community engagement, from letters from mayors, to a pic of hundreds of people forming the words Kraft Hockeyville. This initiative, with its 360 deployment and wider partnering, is the kind of program Bianco plans to do more of. "We don't want to do 'me too' type marketing promotions that anybody can replicate. So we're working on what the next Hockeyville is."

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