Lexicon Founder David Placek Weighs in on Kraft Dinner Rebrand

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From: The Globe & Mail

Most people would not consider changing their name to Sweetie Pie or Honey Bunny just to demonstrate that they are loved. But for a brand that depends on people’s affection for its existence, it may just make sense to take a term of endearment and make it official.

That’s just what Kraft Canada is doing. On Thursday, it announced that Kraft Dinner – long known colloquially as “KD” – is rebranding.

“Why would we continue to call it Kraft Dinner when Canadians don’t refer to us that way?” said Kristen Eyre, brand director for what is now formally dubbed KD. “The way Canadians refer to Kraft Dinner as KD is as much a term of endearment as when you call a relative or a friend by a nickname. … It’s such a love mark for them, and we should be reflecting that.”

But the change is more than cosmetic: It also signals a challenge that Kraft is grappling with for one of its best-known brands. While the company’s research shows that the product’s “brand health” is strong, Kraft has noted that its relevance among younger Canadians has slumped.

That is measured partly by market surveys, in which Canadians are asked to agree or disagree that Kraft Dinner tastes great, reminds them of their childhood, is a “brand for me” and a host of other statements that track whether the brand is well regarded. Specifically, the “brand for me” metric has been declining in the past year, the company has noticed.

That finding spawned a massive research effort at Kraft Canada, including ethnographic studies that involved visiting consumers in their homes to talk about the brand.

“What we learned from consumers is that they still love KD, but it’s not as top of mind as it once was,” Ms. Eyre said. “They feel they’ve outgrown it either emotionally or functionally. This was a huge ‘a-ha’ for us. We looked again at our product and our brand and asked: ‘What we need to do to drive that consideration?’”

The company has been trying to improve KD’s status with changes to the product. It has reduced sodium by 19 per cent since 2010. It recently announced that it would remove all artificial colours from its macaroni and cheese in both the United States and Canada next year, prompting headlines such as “Kraft mac-and-cheese will no longer be radioactive orange.”

Kraft plans to use spices such as turmeric, paprika and annatto (a condiment derived from seeds) for colouring.

Kraft has by far Canada’s largest share of the “dried ready meals” category – the just-add-water (or milk) variety of packaged foods – according to research firm Euromonitor, commanding 55.1 per cent of that market over all. But the category is beginning to soften. After years of growth in dried ready meals, sales fell 5.3 per cent between 2012 and 2014, and Euromonitor forecasts that sales will grow less than 1 per cent a year in the next few years.

As consumers seek out more fresh products and “real” food, many companies are attempting to position their products as natural to accommodate changing tastes. Fast food chain A&W has recently been advertising its beef as raised without added hormones or steroids, for example. Loblaw Cos. Ltd. promised in 2012 to remove artificial colours and flavours from its President’s Choice line of packaged foods.

While product reformulation is meant to address these “functional” issues, the name change aims to speak to the “emotional” side, Ms. Eyre said. The new packaging has already started to appear on store shelves.

Implementing both changes at the same time could be a smart move, said David Placek, founder of Sausalito, Calif.-based Lexicon Branding Inc.

“When Kentucky Fried Chicken became KFC, one of the things they were trying to do was to get rid of the negative health association with ‘fried,’” Mr. Placek said. “One of our principles [for rebranding] is, do you have some good news or some changes that go along with a new identity? That way, the consumer gets a positive message about the change that’s for them, as opposed to it being all about the company’s image.”

It’s a low-risk move: In a survey, 80 per cent of Canadians knew without prompting what KD is.

The product first launched in the United States and Canada in 1937 under the name Kraft Dinner, with smaller print on the boxes identifying it as “macaroni and grated cheese.” For decades, the name and packaging were essentially the same on both sides of the border. In the 1950s, “macaroni and cheese” appeared with more prominence on the boxes. In the 1970s, when more products in Canada began moving to bilingual labels, the branding began to diverge: The product is known in the United States as Kraft Macaroni and Cheese, but remained Kraft Dinner in Canada until now.

“That might be a natural migration, hooking on to what consumers are calling it,” Mr. Placek said. “It makes for a more contemporary identity. And it’s a convenient meal, so [the short form] ‘KD’ supports that.”

Kraft’s struggles to appeal to younger customers have been evident in its relatively short-lived relationships with advertising agencies of late.

In 2013, Kraft hired Anomaly Toronto, which created the Let Your Fun Out campaign, exhorting adults to indulge in nostalgia (and to eat KD while discovering their inner child). Little more than a year later, Kraft ended that relationship, hiring Union. Then in May, it changed agencies again: Taxi Canada now handles the account.

Taxi is charged with helping the brand to be more relevant among young adults, or “millennials” – some of whom are now having their own families and deciding what to feed their kids. Kraft is working with Taxi on “more insight-driven advertising” that should launch in early 2016.

For the launch of the rebranded KD, the company partnered with Canadian rapper Kardinal Offishall, who for one day changed his name to Kardinal D’Offishall to share the product’s initials. He appeared at an event in Toronto, and promoted the change on social media.

“Where we’re very strong is in growing up with KD and childhood,” Ms. Eyre said. “What we’d like to go to is driving that relevancy in the current day.”