Salt Sugar Fat: How the Food Giants Hooked Us (30 page)

Oscar Mayer’s strong commitment to sanitation helped establish its reputation through much of the twentieth century until one hundred years after its founding, when the company was faced with a public concern that went beyond the safety of its food. Red meat was increasingly being seen as unhealthy. A single slice of beef bologna, for instance,
has 3.5 grams of saturated fat, along with 330 milligrams of sodium, nearly a quarter of a day’s recommended maximum for most American adults.

Fat was becoming synonymous with cholesterol, clogged arteries, heart attacks, and strokes. And as a result, between 1980 and 1990,
red meat consumption fell more than 10 percent. During that same time, the consumption of poultry, which has less saturated fat, rose 50 percent. This signaled a potentially huge swing in eating habits, and no one worried more about it than Oscar Mayer.

“From 1986 to 1988, fat and sodium grew to be big issues in the hot dog and bologna category,” Tom Coffey, an Oscar Mayer manager for new product development, told Philip Morris officials in a confidential 1990 presentation. More and more people who worried about fat and salt were changing their diets to reduce consumption of red meat—or avoid it altogether.

The company’s first response to this crisis was to reformulate some of its meats to offer customers a version that was healthier than the mainline
product. Within a few years, it introduced a lower-fat bologna blended with turkey and hot dogs made with chicken instead of beef. But these were slow to catch on, and overall sales continued to slip.

The company also retooled its advertising to appeal to a broader audience. Bologna did not wear well with its fans; kids lost interest as they grew older. Oscar Mayer’s marketing department set up test panels to poll adults and found that men turned to ham, turkey, and roast beef.
On a scale of 1 to 10, men gave the bologna sandwich a meager 4 or 5—but there was a glimmer of hope. Bologna’s image seemed to be worse than the meat itself. When the marketing people handed out actual sandwiches to taste, the rating men gave to bologna rose to 8 or 9. Encouraged, Oscar Mayer sought to expand its market for bologna from kids to men by developing new ads that featured men loving bologna. At the same time, the company tried to reach more children. In 1995, they launched a promotion called
“Talent Search,” in which ten Wienermobiles were dispatched to fifty cities, where they looked for a child star to sing the company’s famous jingle.

“The early results of Talent Search are outstanding,” the Oscar Mayer unit president, Robert Eckert, told Philip Morris executives in the fall of 1995.
“We completed over 700 events and had nearly 45,000 kids audition. And, during the promotion, retail sales volume for participating products like Oscar Mayer hot dogs and bologna was up over 10 percent vs. last year.”

Oscar Mayer also worked on the cost of bologna to bolster sales. On one end, it zeroed in on the production side of things, looking for savings through various changes in the factories as well as in the formulations of its products. Like other food companies, Oscar Mayer was continuously seeking less expensive ingredients that could be substituted without diminishing the quality, and Eckert, in his presentation to the tobacco executives, assured his bosses that the company had been especially aggressive on this front: “90 percent of our products have been reformulated in one way or another over the past four years,” he said.

The other side to the cost equation was pricing, and the bologna managers at Oscar Mayer worked hard to outmaneuver their competitors.
They had to get the price of bologna low enough so people would buy more, but the price had to stay high enough to make a profit. By slashing the price of a pack of sliced bologna to $1.99, Oscar Mayer seemed to do fairly well: It held on to a 29 percent share of the bologna market. But this was a Pyrrhic victory. The company had a solid one-third share of a sinking ship. Through the 1990s, bologna sales in general—no matter what manufacturer—fell 1 percent each year; by 1995 the annual drop had accelerated to 2.6 percent.

Oscar Mayer had to face facts: People were falling out of love with bologna. What it needed was a new vehicle, something other than bread and mustard to draw people’s interest—something with enough pizzazz to overcome the growing hesitancy about the fat in red meat. This was the business of product developers, the people who toil away in laboratories and test kitchens looking for ways to repackage and present foods that fall out of favor. And fortunately for Oscar Mayer, its product developers had a head start. Just as the sales were growing stagnant in the mid-1980s, the product developers had cleared off their stations and gone to work looking for ways to sell the company’s luncheon meat, beyond the stacks of plastic-wrapped slices.

In late 1985, Oscar Mayer asked Drane to take the lead in finding a better way to repackage bologna and any of the company’s other meats that needed an overhaul. I met Drane at his home office and went through the records he had kept on the birth and development of what would become his solution to the company’s red meat problem: the Lunchables. Among the records he saved was a presentation, 206 slides in all, he had prepared to convey the project’s details to other food developers. With bologna sales only starting to slip, Drane told me, “Oscar Mayer was not in dire straights. It was literally like, ‘You guys go out and try to figure out how to contemporize what we’ve got. We are a famous lunch company and we have famous brands of lunch and so why don’t you concentrate on lunch and see what you get.’ ”

But Drane understood the changing dynamics—and the stakes for a company whose legacy was red meat. “Alarm bells ringing!” says the
twenty-sixth slide in his presentation. A brown bag lunch with bologna on Wonder Bread was depicted under the caption, “Lunch of the 50s,” next to another, “Lunch of the 90s,” which had a large question mark, which was followed by a photo of Drane with three of his team members in their white smocks with the red Oscar Mayer logo, arms folded and looking determined.

Drane’s first move was to try to zero in on how, exactly, Americans were feeling about lunch. He organized focus group sessions with the people who had been buying bologna: moms. As they talked, he realized the most pressing issue was not fat, it was time. Working moms and busy moms strove to provide healthy food, of course, and thus sales of lower-fat turkey were rising. But day in and day out, finding time to prepare any sort of food for their kids was increasingly difficult. The mothers spoke at length about the morning crush, that nightmarish dash to get breakfast on the table and lunch packed and shoes tied and kids out the door. He summed up their remarks for me like this: “It’s awful. I am scrambling around. My kids are asking me for stuff. I’m trying to get myself ready to go to the office. I go to pack these lunches, and I don’t know what I’ve got. They want them to be special, and I want to take care of them and, by the way, I like to take care of myself, but I might not have stuff in inventory.”

With his large, black-frame glasses and professorial demeanor, Drane did not rank as the company’s most ruthless executive. But this revelation from the moms brought out the shark in him. Drane smelled blood in the water—or, as he put it to me, “a goldmine of disappointments and problems.”

He assembled a team of about fifteen people with varied skills, from design to food science to advertising, and he enrolled this crew in what he called “Montessori School.” To bail out bologna, they couldn’t just copy some trick another food manufacturer had used. They needed to come up with something new and fresh, and this kind of challenge was right up Drane’s alley. For Montessori School, Drane developed a curriculum designed to help his team tap their imaginative powers.

Having set themselves up in Oscar Mayer’s headquarters building,
they got started by studying other vulnerable designs in consumer goods that underwent successful transformations, such as the boom box (which morphed into the Walkman), kids’ shoelaces (which became Velcro), and exploratory surgery (which gave way to the MRI). They took field trips to Krispy Kreme, the doughnut maker that, at that moment, was driving the country wild with its enthralling feature: It was served warm, the sugary glaze and fatty dough perfectly poised to deliver a double whammy of bliss. They pulled out their markers and brainstormed a wish list of attributes that would give their bologna sandwich replacement, whatever it may turn out to be, that level of power over consumers.
To keep their discussions lively, they used alliteration: “Faster, fresher, foolproof, fortified, flavorful, flexible, funner, and for me.”

The creative juices now flowing, Drane and his team made a key decision: They settled on creating a convenient prepackaged lunch. The questions then became, What kind of container? And what would go in it?

Of course, they would have to use the company’s red meat. That was the whole point of this project, after all, to kick-start stagnant sales. So sliced bologna and ham became the first building blocks. They wanted to add bread, naturally, because who ate bologna without it? But this presented a problem: There was no way bread could stay fresh for the two months their product needed to sit in warehouses or in grocery coolers. Crackers, however, could do that, so they added some Ritz rounds.

In choosing the lunch’s basic components, the toughest decisions involved the cheese. Using cheese was an obvious move, given its increasing presence in processed foods. (When word of the Lunchables project first leaked out in 1987, the addition of cheese had sent ripples of excitement through the dairy industry—offering, as it did, another outlet for their product. The company’s merger with Kraft in 1988, however, nipped that joy in the bud. Oscar Mayer didn’t have to shop for cheese anymore; it got all it wanted from its new sister company, and at cost.) But what kind of cheese? Natural cheddar, which they started off with, crumbled and didn’t slice very well, so they moved on to processed varieties, which could bend and slice and last forever. Then the question became, What shape should
the cheese be? Through tests on consumers, they discovered that cheese sliced into little rounds was a bit more exciting than squares. In their likability matrix, the rounds came in at 80 on a scale of 100, while the squares mustered only a 70. But they also needed to keep their production costs as low as possible, or the retail price would have to be set beyond what people would be willing to pay. Square cheese was easier to cut than round, so they went with that. They looked at everything through the matrix of shrinking the production costs any way they could without hurting the flavor or texture too much. They could use the processed cheese made by Kraft, which was already cheaper than regular cheese, or they could knock another two cents off the per unit price by using a lesser product called “cheese food,” which had scored poorly in the taste tests. Likewise, they compared things like real pepperoni to pepperoni flavoring, a cardboard tray cover to a printed, clear film.

Now that they had the components, the meat, cheese and crackers, and the right shapes, Drane’s team moved their venture into a nearby hotel, where they set out—with no distractions—to find the right mix of components and container. “What principles drive success?” Drane reminded them. “Self-contained, individualized, compact, portable, ready to use, fun, and cool.” They gathered around tables where bagfuls of meat, cheese, crackers and all sorts of wrapping material had been dumped, and they let their imaginations run. In the end, they came up with twenty designs that ranged from the ridiculous (a jumble of meat and cheese in a box with a tiny cellophane window) to the mundane (a single piece of meat wrapped around some cheese on tiny foam tray). A myth later arose, repeated by the company’s top executives, about how the team finally settled on a white plastic tray with several components—that this had been inspired by the Japanese bento box. The reality, Drane told me, was far less exotic: After snipping and taping their way through a host of failures, the model they relied on was the American TV dinner.

Drane’s Montessori School had one task left: bestowing a catchy, approachable name on the trays. The team hung butcher paper up on the wall and picked
Lunchables
from a long list of
puns and catchwords for
fast, fun, and flexible food, including
On-Trays, Crackerwiches, Mini Meals, Lunch Kits, Snackables, Square Meals, Walk Meals, Go-Packs
, and
Fun Mealz
. At the end, when they’d finally chosen a name, the right components, and a prototype tray, the team asked itself: Just how likely was it, really, that America would go for a lunch of plain meat, crackers, and cheese?

Their bosses at Oscar Mayer were asking the same question, so they ran one final test. An outside research firm was hired to perform a process called BehaviorScan, which would help determine if the Lunchables was attractive to schoolchildren, or parents, for their own lunches, and what kind of advertising would compel the most consumption.

A few dozen families were recruited in Grand Junction, Colorado, and Eau Claire, Wisconsin. They were given shopping cards that would record their purchases, that is, how often they bought the Lunchables. Then their TV sets were wired into an electronic device that hijacked their normal programming to display commercials that their neighbors did not see. They were shown commercials for the Lunchables, and the frequency, timing, and tone of these ads were adjusted to test various strategies on how and when to pitch the trays.

The testing, which went on for months, surpassed Oscar Mayer’s highest hopes. Not only did the people in the experiment go for the trays after being exposed to the advertising, the familiarity of the contents, however plain they were, proved to a foundational theorem in processed foods, which Drane calls “the weirdness factor”: If a new product is too unusual, shoppers get scared. “I use the term, ‘80 percent familiar,’ ” Drane told me. “If you’ve got a new thing, it better be 80 percent familiar, or you’ll have people scratching their heads wondering what the hell it is.”

While the Lunchables tray itself was an alien sight in the supermarket aisles, the stuff inside was deeply familiar. The testing also told the company where to start marketing the trays. “The sales we saw in Grand Junction were twice as strong as the sales we saw in Eau Claire,” Drane told me. “And we scratched our heads on that. We had thought meat and cheese and crackers would be right on for good old Eau Claire in the Midwest,
and that Grand Junction in the West would be more kind of leading edge. But no. So we went to the West to roll out the Lunchables, and they started to sell. Then everybody else started to demand it across the country, and we were racing along on the manufacturing side, adding machines and capacity like crazy.”