Branding fake foods: The new SaltWise salt substitute from Cargill | State of the Brand from Ecra Creative Group :: by Jason Voiovich

http://stateofthebrand.com/?p=94

<!-- /* Font Definitions */ @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-1610611985 1107304683 0 0 415 0;} @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-520092929 1073786111 9 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:""; margin-top:0in; margin-right:0in; margin-bottom:10.0pt; margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Calibri; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Calibri; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} .MsoPapDefault {mso-style-type:export-only; margin-bottom:10.0pt; line-height:115%;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;}

This is a nice article about how Cargill starts with problems faced by customers, in this case the high salt content of Campbell’s Soup, and finds a solution.  Salt is slowly taking center stage for significant regulation by the FDA.  The medical and nutrition communities are fairly united in their concern about the overly high levels of sodium and potassium in processed foods. At issue for the food manufacturer are changes in recipes, effects on brands and consumer loyalty, increases in costs of materials, and reduction in shelf life. At one level the "SaltWise" story is a classic business relationship story of a supplier solving a strategic problem for a buyer.  At an equally powerful level this is a great story about a firm with a long history in commodities who turns a low valued undifferentiated good into a high value/high margin industrial ingredient.

For the students of ACE 430.  We talked about the seminal article by Dr. Theodore Levitt where he introduces the concept of “table stakes.”  It is the industrial marketer’s task to bundle information, service, and innovation around the product to create value for the customer.   The “Saltwise” story is a wonderful example of Cargill investing in R&D and supply chain relationships with food manufacturers (Campbell’s) to simultaneously solve a strategic problem for the customer while creating a differentiated market for themselves.  The interesting question is when looking at the “Value Creation Half-Pipe,” what value does Cargill provide to Campbell’s?  Certainly reduces the regulatory, brand, and potential legal risks from selling high salt products.  Maybe also reduces the risks associated with market share losses to other competing low salt products.  On the uplift side, is Campbell’s able to achieve higher margins?  Certainly the cost of salt as an ingredient rises, but can Campbell’s margin up with their healthier product?