Gillette scores with Cavalcade of Sports

From leisure suits to Kenny Loggins, the 1970s gave us a lot that we'd rather forget. But it's nice to know that not everything from that decade has lost its appeal....

From leisure suits to Kenny Loggins, the 1970s gave us a lot that we’d rather forget. But it’s nice to know that not everything from that decade has lost its appeal.

The annual Gillette Cavalcade of Sports promotion was first introduced in 1971, and has been going strong ever since, says Gail MacDonald, director of promotion, sponsorship and event marketing with Mississauga, Ont.-based Gillette Canada.

As a company that markets everything from disposable pens and razors to batteries, Gillette was looking for an umbrella program that would unite all of its premium brands. The result was the Cavalcade, a program designed to bring them together under a common theme in a concerted effort to drive sales during the late-August and early-September back-to-school season.

The Cavalcade is a made-in-Canada program, MacDonald notes – not an adaptation of a U.S. effort.

The concept has changed little in 30 years, she adds. The promotion always features a dramatic, sports-related grand prize – back in 1971, it was a trip to the summer Olympic Games – and is supported with both TV advertising and in-store activity.

Different brands may be played up in the promotion from year to year. Several years ago, for example, Gillette’s SensorExcel shaving system was spotlighted prominently. This year, much of the attention will be focused on the Mach3 system and the Duracell Ultra line of batteries.

While the essential components of the Cavalcade have remained consistent from year to year, MacDonald says a long-running promotion needs to be refreshed constantly. Hence the emphasis that Gillette places on finding new and unique prizing.

"We have to be innovative," she says. "That’s one of the reasons the Calvacade has such great staying power."

Last year’s theme, for example, was "Sports Celebration 2000." Winners were invited to an interactive sporting event at Toronto’s SkyDome, where they had the opportunity to meet a number of celebrity athletes. In addition, they received their choice of six fantasy sports trips anywhere in North America (including Hawaii) – plus $25,000 in spending money.

MacDonald says the company tries to offer prizes with appeal to a wide audience – not just sports enthusiasts.

Because Gillette products span many demographics, she explains, "we have to put in elements to appeal to the non-sports fan." Travel, cars and cash all tend to figure prominently, since these are things in which just about everyone is interested.

(The company has also moved away from offering second and third prizes, MacDonald says. "One large grand prize has more impact.")

Cross-promotional efforts help Gillette beef up the prize package without breaking the bank. Last year, for example, the company partnered with DaimlerChrysler Canada on the Cavalcade of Sports. The automaker provided a vehicle as part of the grand prize, and in return was featured in the TV and in-store campaign supporting the promotion.

The fact that the Cavalcade has such a long and impressive track record is a plus when trying to sign up promotional partners, MacDonald notes.

Gillette develops the concept for each year’s program in-house. ("We get together and throw around ideas," she says. "We just brainstorm.") Freelancers are called in to assist in creating the television spot and the in-store material. Creative decisions are based on current trends, as well as the company’s sense of what holds appeal for consumers.

Supporting material has to be kept fresh, MacDonald adds. Too many long-standing promotions roll out similar creative year after year, leaving consumers with a been-there, seen-that sensation.

Getting retailers involved is another key to the Cavalcade’s success – the more actively they participate, the better the odds that it will deliver results. That’s why, for example, Gillette invited retailers to a special event at SkyDome this past March in an effort to showcase the 2000 promotion and encourage them to buy in.

It’s a win-win situation, MacDonald says: The promotion drives sales for Gillette, and creates in-store activity for the participating retailers.

Also in this report:

- Promotions with legs: Brands reap rewards when programs have longevity p.17

- Roll up the Rim major player for Tim Hortons: Long-running promo offers chance to win with every coffee purchase p.22

- Coffee cup promo spawns imitators p.23

Kraft Heinz beats the street, but reports slight sales slide

The company's Q2 net sales, while down slightly, reveal continued demand for snacks and pre-packaged meals.
Kraft Heinz

Kraft Heinz is reporting earnings of 78 cents a share, beating Wall Street’s estimate of 72 cents a share, thanks to continued demand for snacks and pre-packaged meals. However, the company also reported a net sales decline of 0.5% compared with the same period last year, to $6.6 billion, according to its latest Q2 earnings report, released Tuesday.

The company experienced a favourable 2.3 percentage point impact from currency and a negative 0.7 percentage point impact from its February divestiture of Hormel Foods – including the Planters peanut brand – which closed in the second quarter of 2021.

Its cheese divestiture – which included the sale of its natural cheese division to Lactalis – is expected to close in the second half of 2021, says Kraft Heinz Global CEO Miguel Patricio in this morning’s conference call.

Adjusted EBITDA slumped 5.2% versus the year-ago period to $1.7 billion and increased 6.6% versus the comparable 2019 period. Higher transportation and inflation-related goods costs continue to affect the company’s bottom line.

Kraft Heinz’ organic net sales declined 3.6% in Canada over the last three months compared with a comparable period last year, this as total net sales rose 8.8% year over year. 

However, its overall organic net sales slipped 2.1% compared with 2020 figures. This includes the negative impact stemming from exiting its McCafé licensing agreement. However, this decline was partly offset, Kraft Heinz reports, by “partial recovery in foodservice channels and retail consumption trends.”

“Food service is recovering, and recovering fast,” Patricio stressed in today’s earnings call. He said “the bet to support QSR” early in the pandemic, with individual packets of ketchups and sauces, is paying off.

Channel trends are still normalizing, he warns, and it’s too early to see how at home or away from home, will net out. “We have big ambitions for away from home business,” he said. Consumers continue to evolve how they eat, with Patricio saying that Kraft Heinz is collaborating with a popular DTC brand for its Philadelphia cream cheese.

Accrued marketing costs, the company reports, rose to $968 million from $946 million in December 2020.

“We are investing more in our brands, and better as well, building a much more creative company,” Patricio reported.

Kraft Heinz is also strengthening and diversifying its media presence, he said, driving repeat rates for those discovering and rediscovering the brand. Patricio added that the company is continuing to drive its transformation program forward, modernizing its brands and better connecting with its consumers.