The right package and the right marketing strategy can help turn a struggling company’s fortunes. Vietti Foods, Nashville, Tenn., provides one blueprint for doing just that.

Just three years ago, this regional marketer of canned food products was losing share and relevance in the grocery store. Vendors were beginning to shy away from the company.

Today, revenues at Vietti Foods approach $20 million and some of its products command the dominant share in their core markets. And new distribution doors are opening—in an era when grocery chain consolidations and rising slotting fees present ongoing challenges for small regional packaged goods marketers.

Phil Connelly, President at Vietti Foods, is the chief architect behind the company’s upswing. He believes regional marketers can succeed by “flanking” their national competitors. One key is leveraging their leaner efficiencies to get to shelf faster.

Armed with these advantages, small marketers can engage in what he calls “in-and-out guerilla marketing” tactics that favor short-run packaging promotions. This approach anticipates what consumers will view as “hot” on the horizon.

In Connelly’s view, regional marketers who follow this route can build credibility for an entire family of products and win over new distribution channels.

This is occurring at Vietti Foods. Connelly has honed these techniques through years of marketing experience with national brands. More recently, he helped grow the Edwards line of frozen desserts from stagnation into a $200 million brand in three years.

Connelly heads a senior management team at Vietti Foods whose members each boast big-brand experience. This collaborative team has shaped a marketing strategy in which Vietti Foods’ brands compete aggressively, yet selectively, on the national stage.

Packaging is the kingpin behind the approach.
“Especially for smaller regional brands to stand out and break through the clutter, the one and only choice for continued success is differentiate or die,” Connelly says.

Vietti Foods manufactures and markets canned chili, meats and stews under the Vietti Original Nashville Style, Vietti Signature and Southgate brands. Vietti Foods markets its two namesake brands in 13 states, mostly in the Mid-South where it holds a dominant 35 percent market share, while the Southgate brand appears on store shelves in 38 states.

The company also co-packs private-label products under many brands for national distribution. Connelly estimates this segment of the business has doubled to comprise 20 percent of total operations.

Consumers may know Vietti Foods’ family of products better by the labels than by the Vietti name. With minimal advertising dollars to spend, “we just don’t have the luxury of doing awareness advertising and missing the market,” Connelly says. Packaging comprises about 40 percent of the company’s total marketing budget.

While national brands may take what Connelly describes as a “shotgun” approach to brand-building in the “trenches,” he prefers a “rifle” approach that segments and targets the best prospects for his products.

Senior management at Vietti Foods sees the 50-employee size of its Nashville operation as a virtue. Inside its doors, Connelly describes a climate where off-the-wall creativity is encouraged.

Ideas that stick can be altered and executed quickly. This advantage, Connelly explains, enables Vietti Foods to move nimbly in pushing packaging strategies to the store shelf. The benefit is two-fold. Vietti Foods can get functional packaging improvements to shelf ahead of much larger competitors.

And while the national brands are “playing catch-up,” Connelly says Vietti Foods can move from one short-run promotional packaging campaign to the next, continually working on the leading edge of where current consumer sentiments lie.

The term “always add value” is a fundamental rule that shapes packaging development at Vietti Foods. Two examples demonstrate how it works. First, this principle guided the creation of a more consumer-friendly package for its budget brand, Southgate.

 Vietti Foods enlisted the help of Asen Marketing & Advertising, Knoxville, Tenn., for branding strategy and package design. The redesigned labels contemporize the logo without abandoning existing brand equity. The typeface appears more playful-looking, and more sumptuous product photography has increased impulse sales.
But several other factors create additional value that differentiates the line:
- The inclusion of a pull-tab on the lid makes the can easier to open.
- A bilingual English/Spanish label attracts buyers at grocery stores with Hispanic clientele.
- The rice and bean offerings in the line are spiced with Paul Prudhomme’s Magic Seasonings. The label calls attention to the co-branding partnership.

These enhancements attract the extreme-value dollar stores, one of the fastest-growing segments in retailing. Since dollar stores don’t charge slotting fees, Vietti Foods can spend the extra 2 cents per package to add the pull-tab and maintain margins without increasing the retail price.

Another benefit? Where Vietti Foods once found it difficult to penetrate some grocery stores, it has done an “end-run.” Southgate products are beginning to appear in grocery stores that are launching budget-buy sections to compete with the dollar stores.
Southgate’s sales have doubled in the 18 months since it introduced these three packaging features.

The second tactic Vietti Foods uses to inject value into its packaging focuses on what Asen President Paul Scoonover describes as “thinking in terms of alternative venues.” In other words, anticipate what will be “hot” for a short window of opportunity with the right consumers, and then embrace it through packaging.

“You cannot have too much power at the critical point-of-purchase. Phil understands that,” Scoonover says. “Every dollar that he spends on his packaging goes directly to the consumer.”

Here, Vietti Foods is using in-and-out guerilla marketing tactics that both appeal to consumers’ sense of “now” and build awareness in distribution channels.

Vietti Foods’ current campaign illustrates the technique well. It is rolling out cans of beans under the Vietti brand that poke fun at the U.S. presidential election. Packages of Liberal Democrat Boston Baked Beans and Conservative Republican Texas Chili Beans bear irreverent labels showing caricatures of a donkey and an elephant playfully exchanging cutting remarks. (BRANDPACKAGING discussed the strategy in detail in its August 2004 issue, p. 50.) Limited quantities of these commemorative labels will appear on store shelves through the November election.

“We want to leverage the investment that’s already been made in branding the political parties,” Connelly explains. For us, that becomes the immediate equity that puts us on par with a national brand. It would cost us tens of millions of dollars to create that equity ourselves.”

The Vietti Foods logo moves to the back label on these cans. That opens up the front label to act as the “real estate” for the nation’s two major political parties.
Connelly feels it’s less important that these labels emphasize Vietti Foods.

“The trade recognizes who our company is,” Connelly says. “The brand is Republican or Democrat, and that’s what’s top-of-mind to consumers right now and that’s what’s going to stop them in the store.” Labels across the Vietti Foods product lines are litho-printed in mostly four-color process at Lewisburg Printing Co., Lewisburg, Tenn.
Ball Corp., Broomfield, Colo., produces the metal cans.

Critical to these “quick-hit” product launches is the package development team’s ability to identify opportunities and push them through the value chain at mach speed. Labels on the political cans moved from concept to store shelf in four weeks.

This is another area where the leanness of a small marketer can pay dividends. Each member of Connelly’s five-member senior management team works well in an entrepreneurial-like environment.

Team members meet daily to discuss everything from getting the best price on metal cans to satisfying regulatory labeling requirements. Beyond making decisions quickly, this approach to package development keeps costs in line.

“A lot of small companies don’t know what their true costs are, so they don’t know how to be profitable,” Connelly says.
The author, Jim George, is the Senior Editor of BRANDPACKAGING magazine.

Your best prospects for energizing sales often are among the customers you already have. Vietti Foods overlays this marketing axiom on top of its “in-and-out guerilla marketing” strategy to boost sales and build awareness for its brands through cause-related marketing.

Shortly after the Sept. 11 terrorist attacks, Vietti Foods demonstrated its desire to be a good corporate citizen by creating a limited-run, patriotic label in support of the American Red Cross’s relief efforts.

The label drapes an American flag in the background behind the Vietti Original brand’s logo on cans of chili with beans. A red banner rings the entire label, announcing that “50% of Proceeds Go to the American Red Cross and its Mission to Save Lives.”

Connelly says the package was on store shelves for just three months. But the tactic gained Vietti Foods placement with eight new retailers.

“It was the first opportunity for the trade to look at our previously dormant company and say, ‘Hmm, that was a good idea.’ And we’ve moved that forward,” Connelly notes.

Vietti Foods is shifting the cause-related marketing concept into diabetes research. The cause is close to Connelly’s heart; his daughter is a Type 1 diabetic.

Labels in the Vietti Signature line of high-protein, all-natural chili call attention to the cause. Vietti Foods donates a portion of sales from these specially marked packages to the Juvenile Diabetes Research Foundation.

If you’re considering a guerilla marketing approach where packaging is a component, the best plans can fall apart quickly if you choose the wrong design firm.
At Vietti Foods, President Phil Connelly interviewed several designers before selecting Asen Marketing & Advertising. “What I needed help in was the ideation,” Connelly explains. “I come up with a lot of the design ideas and when you work by yourself, you tend to work in a vacuum. I don’t have a hallway full of product managers.

Foremost, he says, red lights should emerge if a prospective firm is more interested in selling a project than in taking time to understand your brand and objectives.

In Vietti Foods’ case, he notes, “They (Asen) weren’t afraid to say, ‘That won’t work.’ ”