How Beech-Nut Innovated Within a ‘Category in Decline’

By Scott Kirsner |  July 16, 2014

Mention the brand Beech-Nut, and most people instantly envision a squat glass jar filled with pureed green beans. You can almost hear the ‘pop’ as the lid is opened, and a hungry baby fussing. Founded in 1891, the company patented the vacuum-sealed jar; it is now part of Hero Group, a privately-held consumer foods company based in Switzerland.

But two years ago, Beech-Nut was forced to confront an unpleasant fact. Traditionally-produced baby food in jars was “a category in decline,” says Andy Dahlen, Beech-Nut’s Vice President of Marketing and Sales. He and Beech-Nut President Jeff Boutelle both joined the Amsterdam, New York company in 2012. “Spending was flat or somewhat up in the category, but when you really looked at the data, the number of ounces per baby was down. You could see that the category was just not meeting needs. We were seeing moms leaving the category, or not entering it at all when they had a baby.”

Dahlen, whose role encompasses product innovation, explained in a recent conversation how Beech-Nut addressed the problem by reinventing its core product.

The Problem

The whole baby food category had strayed. Moms were not coming to the category to get their babies’ food. Jarred baby food really hadn’t changed, though you had new kinds of packaging like pouches or tubs trying to offer some level of benefit.

Any good innovator will tell you that you need strong consumer insights, and you need to be in touch with the consumer. But that’s easier said than done. We had a sense that moms were making their own food for their babies, but there wasn’t readily-available data about that. So we went out and did ethnography, going and spending two and three hours in mom’s kitchen, watching her make her baby’s food at home. We did qualitative research, asking moms how they were feeling about the category, and how they were thinking of feeding their baby. They told us that homemade was the gold standard. In Barnes & Noble, you could find a shelf full of books on making homemade baby food. Moms were going to Google and to Facebook, and their friends were saying, “Here’s how to make food at home.”

We realized we needed to completely innovate across the total product offering.

Innovating with No Constraints

The two most experienced folks in our kitchens have been here for 25 or 30 years. I went to them and said, “I want you to tell me how you’d make the best baby food in the world. No constraints.” It took them a few minutes. “You mean, something that runs on our [production] line? What is the cost profile, the margin?” And I said, “No, no constraints means no constraints.” They showed us how they would do it, and it lined up with what we were hearing from the homemade moms. They came back with principles around here’s the type of products you’d have in the line, the types of ingredients you would use, how you would prepare it, and how you would package it.

We were trying 20 to 30 recipes a week over the course of six weeks. As we went through that process, we were getting moms’ opinions, getting their reactions and questions and feedback. We ended up creating a whole new method for preparing the baby food, which purees it cold.

Getting Moms’ Attention

What we heard from moms is that they want control. They want to know exactly what they’re feeding their babies. So we knew we couldn’t take this new product and put it in the existing jars and have moms understand the quality. So we wanted to do a couple things. We wanted to highlight the fact that when our jar says “Just Honeycrisp Apples,” it doesn’t say ascorbic acid or citric acid or other things. We wanted to showcase the texture, quality, and color of the food. So the jar has a transparent label. It’s a bigger jar, with different shape than we’d done before. We had moms who weren’t even coming to the baby food aisle, because they saw what was in the category as being runny, watery, and preservative-laden. So we knew we had to be very disruptive [with our packaging and our marketing] to even get their attention.

We launched the new line on April 1st. Our [advertising] campaign says, ‘This is not baby food. This is real food for babies.’ We sought to tell consumers that this is not the baby food that they’re expecting.

We’re a small company at Beech-Nut. We have 300 people. Our production facility is 30 yards from where we are. I worked at General Mills previously. It is an outstanding company. But the speed at which you can kill something or go forward is really very different at a small company. We don’t have a lot of levels. We don’t have a lot of capital. We have a pretty flat organization, and we can move quickly. We often joke here that the answer is not in Building G across the campus on the 6th floor. We don’t have a Building G. So you have to go get the answer yourself.

For this project, we worked with Story Worldwide on the communications side, and Bluedog on the brand identity and package design. We also relied on Nielsen for research that helped validate our approach. (See blow for a video produced by Bluedog.)

Rigor + Speed

Balancing rigor and speed is an an ongoing evolution here. We’re trying to balance rigor and analysis with the speed of agility of a small company. Big consumer packaged goods companies have so many resources that they can test things in amazing ways. But they can sometimes fall into testing things three and four times, and by then the nimbler, smaller competitor has passed them by. They wind up with something that’s perfected, but it is third, fourth, or fifth to market.

If you ask what led Beech-Nut into this situation, it’s that we were a distant #2 in the category. [Gerber controls about 80 percent of the packaged baby food market in the U.S.] We were competitor-focused, and we were following the leader. That can lead you to a lot of problems. There are very smart folks who are working at Hilton, but if they are looking at what Marriott is doing, they’ll miss Airbnb. If you’re Pepsi focusing on Coke, you miss Odwalla or Innocent Drinks. You really have to be very closely paying attention and understanding what’s happening with consumer trends. What are their wants and needs, and how is your category meeting that need?