Saturday, September 20, 2008

Heinz: From red to black with ABC Soy Sauce in Indonesia

Just a small follow-up to a story I wrote about here in June, Heinz Food Corporation is indeed capitalizing on the trends I mentioned, particularly by targeting food products to consumers in different countries. Sure enough, moving from the red to the black has meant that, while the brand is still deeply associated with its Ketchup, its ABC Soy Sauce is steadily catching up as a leading item – and a brand they can extend. ABC is emerging as one of the best selling brands internationally of soy sauce. The Wall Street Journal profiled Heinz’s Southeast Asian success and explained,

There are essentially two types of soy sauce: kecap manis, a molasses-thick sauce often sweetened with palm sugar; and kecap asin, a thin, salty sauce. When ABC's kecap asin was introduced in the mid-1970s, it was sold in a glass bottle at a premium price. Eventually, ABC expanded into kecap manis, as well as lower-price smaller plastic bottles and single-use packets that now cost about 200 rupiah (two U.S. cents), helping it develop a loyal following among working-class rural Indonesians.
Part of the success comes from “tweaking” the product: Heinz has worked on the taste (not as salty as it was when the company acquired the brand) and the packaging, coming up with a better pouring spout and other new design elements. According to Business Week,
Chris Warmoth, who heads up Heinz's Asia-Pacific operations, notes that "nearly all households in Indonesia use ABC." That wouldn't seem to leave a lot of room to boost sales of its sweet dipping soy sauce, or kecap manis. So the company has introduced new products and tried to encourage broader consumer use through a "culinary academy" where chefs come up with new ABC recipes. (Up next: suggested nonalcoholic drinks made with ABC flavor syrups for the Muslim celebration of Ramadan, which starts on Sept. 1.) Heinz also added a new pouring cap for the soy sauce bottle and introduced lighter plastic pouches, a potential selling point to the majority of Indonesians who lug their groceries home.
Backing up their sales, ABC donated more than 1 billion dollars in aid money to Tsunami victims in 2005. The continued presence in Indonesia, both philanthropic and economic, has paid off, as Heinz ABC has shown greater profits and steady sales while many other food companies are faltering. Soy sauce has migrated out of its original place as an Asian staple and into a global food, which should help Heinz sell ABC in numerous markets, but at the same time, it’s smart of Heinz to keep ABC strong and flexible in its original context.

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