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What? Tuna Again?

Canners Dust Off Ad Campaigns to Spur Lagging Sales

July 16, 1998|GREG JOHNSON

The results were decidedly mixed when Chicken of the Sea International recently completed a market research project. A hefty percentage of consumers still remembered the company's "Ask Any Mermaid You Happen to See" jingle. But a surprising number didn't know how to whip up a simple tuna salad.

So when Chicken of the Sea returns to TV screens in January after an eight-year absence, the company's ads will highlight its familiar mermaid and song. And the San Diego-based company will fill print ads and in-store displays with recipes for everything from venerable tuna salad to quirky newcomers like tuna with granola and tuna with oranges and cashew nuts.

Chicken of the Sea, the third-largest tuna brand sold through grocery stores, isn't the only tuna company returning to the airwaves to fish for better sales. Faced with an industrywide slump, Bumble Bee Seafoods, the No. 2 brand and also San Diego-based, is back on TV after more than a decade. And market leader H.J. Heinz Co.'s Star-Kist brand, with more than 40% of the market, has returned to the tube after a lengthy absence.

Tuna sales have declined in four of the last six years, according to Nielsen Scantrack, slumping to $1.1 billion in 1997.

Observers blame the sales slide on a failure to counter strong advertising for competing foods such as pork, beef and chicken.

The industry has also failed to ignite consumer interest with new recipes--and to introduce new cooks to old favorites like tuna salad. The result: Even though 90% of American households stock tuna, most consumers view it as a once-in-a-while meal.

But all of the major tuna producers have strong weapons in their arsenals as they rekindle advertising. Each of the three companies owns stylized mascots--a bumblebee, a mermaid and Charlie, Sun-Kist's perpetually sorry tuna--that are likely to connect with brand-conscious shoppers.

Using those familiar logos "sounds like a good strategy," said Terry Witkowski, a marketing professor at Cal State Long Beach. "Many consumers are price-sensitive, but they do buy things with aesthetic appeal, and you know that these familiar commercials will catch the eye of baby boomers."

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But observers say the industry will face an uphill fight in weaning consumers from coupons and price discounts that tuna canners have used during a lengthy price war. Although prices have begun drifting higher in recent months, cost-cutting by the industry makes it possible for retailers to sell a 6-ounce can of tuna for about 70 cents--less than shoppers paid a decade ago.

"We and the other firms all participated in the 'commoditization' of our industry," said John Stiker, Bumble Bee's marketing director. "We worked as hard as possible to squeeze every bit of cost out of our operations. And while that had benefits for consumers, there was a downside for producers."

The price wars have inflicted casualties. Earlier in the decade, Bumble Bee and Chicken of the Sea each spent time in U.S. Bankruptcy Court. Observers tied the companies' past woes to the price war and the relatively weak financial condition of the firms' former owners.

Both companies were sold in recent years. Bumble Bee is part of International Home Foods, a unit of Hicks, Muse, Tate & Furst Inc., a Dallas-based investment firm. Chicken of the Sea, formerly Van Camp Seafood Co., was purchased in August 1997 by Thai Union International Inc., a leading Thai tuna processor; Tri-Marine International Inc., a tuna trading company; and Edmund Gunn, a tuna boat owner.

Producers say consumers view tuna as a healthy food that's not as susceptible to bacterial contamination as beef or chicken. And the dolphin-kill worries of the mid-1980s have subsided.

Company executives acknowledge that their failure to advertise has slowed demand. And when shoppers do drop tuna into their grocery carts, they're usually shopping by price, not brand.

Once a product becomes a commodity, said Kevin Lane Keller, a marketing professor at Dartmouth University, it's hard to reverse consumer perceptions. "You can't call time-out when you're trying to build your brand," Keller said, adding that tuna companies hurt themselves by not spending consistently on advertising.

Unlike other commodity-driven segments of the food industry, the big tuna companies can't take advantage of pooled advertising that's designed to boost overall product consumption.

"Milk is a great example where consumption was dropping for 20 years and the 'Got Milk?' campaign helped to turn things around," Keller said. "But unlike milk, beef and pork producers, tuna companies will be knocking each other on the head for individual market share, rather than building the whole market."

To breathe new life into their brands, Keller added, tuna companies must "figure out exactly what button to push to make people want to go out and buy more tuna fish," Keller said. "That's what the share-of-stomach battle is all about."

The canners say their first step is simple: Give shoppers more reasons to buy tuna.

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