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Unfolding
Battle for Chili Market Pits Company’s Traditional Focus
on Quality Against Competitors Focus on Convenience.
By Hugh
G. Willett
For almost
one hundred years, Bush Brothers &Co. has been bucking the
odds and coming out ahead. Very few family-owned businesses
remain successful into the second and third generation. The
Knoxville, TN-based food products company –founded in 1908--
is now going into its fourth generation of success under the
management of the Bush family.
“Only
about one percent of all family owned businesses are still in
the hands of the same family into the fourth and fifth generation,”
said Dave Shapland, senior vice president, chief financial &
information officer at the company.
A very active
and enlightened eight-member board of directors consists of
three family members and five industry experts. Company Chairman
and CEO and Bush family member Jim Ethier leads the firm. This
consistency in the company’s leadership has allowed a
continued focus on four principle values of integrity, trust,
caring and responsibility when dealing with customers and employees,
he added.
Almost as
consistent as the management pedigree, is the company’s
product focus. Bush Brothers primarily sells beans. The company
sells bean products ranging from country-style baked beans to
regional specialties such as Boston –baked beans as well
as most of the other varieties familiar to bean lovers.
A company
run by the same family and selling similar products for almost
a century might seem almost boring if it wasn’t for the
realities of the food business. It’s a good business—everybody
needs food—but the food industry is not growing any faster
than the population and a company that wants to grow has to
keep introducing new products, Shapland said.
“The
challenge for food companies is to bring excitement to the markets
and to spur growth from other markets,” he explained.
“If you look inside the boardrooms of every food products
company, you’ll see they are focused on the challenge
of new product development.”
The challenge
of new product development has led the management of Bush Brothers
to focus on entering the market for ready to eat chili. It’s
not an opportunity that has gone unnoticed by the competition
and Bush faces some of the biggest names in the food businesses,
some with more than just a foothold in the market.
Hormel,
for example, has dominated the ready to eat chili market with
its Hormel and Stagg brands of chili. Campbells is trying to
muscle-in with its Chunky chili. So, how can a company like
Bush hope to compete with these giants?
The answer,
according to Shapland, is based on product research and long
standing company focus on the highest quality products. “We
want to be the leader in premium ready to eat chili,”
he adds, with emphasis on the word premium.
Consumer
research tells Bush that there are two important factors in
the chili -buying decision. Those factors are convenience and
taste. Which one is more important? This is where the “great
chili battle” starts to get more interesting.
Bush Brothers
decided to pass on the cans and go to glass containers for its
new chili introduction. The reason for the decision is based
on the long-standing company focus on high quality products
and the consumer research that indicates taste is one of the
two most important factors in purchasing chili.
“The
glass jar means higher quality and better taste. In the consumer
taste tests, we beat the competition by at least two to one
with our chili in a glass jar,” Shapland said.
So what
about convenience? What makes this match-up between chili giant
Hormel and newcomer Bush Brothers so interesting, is that Hormel,
has apparently decided to focus on convenience with its latest
introduction of Stagg chili in a box; a cardboard box that cannot
be micro-waved.
The contrast
between the two approaches couldn’t be more obvious. The
box is fast and easy; the glass jar has a higher quality image
and, according to consumer research, makes for a better tasting
bowl of chili, and takes no longer to prepare.
It is not
easy breaking into a new market when 800lb. Gorillas are staking
out the same turf. Retailers cannot carry every brand of chili.
It’s clear that something has to be done to spur interest
in the market. In addition to product innovation there is also
product marketing. Large grocery store chains need to be assured
that the new products will be backed up with advertising, coupons,
national promotions etc.
Bush Brothers
new product introduction strategy for ready to eat chili combines
the innovation of the glass container with a more traditional
family style marketing approach. The company has long traded
on the legacy of family ownership as a method of building brand
equity.
Family member
Jay Bush and his faithful dog Duke—based on a real Bush-family
pet golden retriever—have been entertaining consumers and
helping to sell baked beans for years as cast members in a series
of television commercials and promotions.
For the
new ready to eat chili introduction, Bush Brothers & Company
decided to stick with the family angle by introducing the public
to Drew Everett, a Bush family cousin employed in the company
and self-styled master chili maker. In the new series of television
commercials, cousin Drew is hard-pressed to keep up with demand
but insists on maintaining quality and shipping his family recipe
chili in the unique glass jar.
It will
be interesting to watch the upcoming battle for the hearts and
minds, not to mention the stomachs, of American chili consumers.
The market is growing fast, spurred on by everything from changing
regional tastes to a growing population of Hispanic consumers
and, according to Bush Brothers’ research, a higher value
placed on taste and quality by all consumers. |
