Last week, the H.J. Heinz Company and Kraft Foods Group, Inc. announced that they had entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America, behind PepsiCo and Nestle. The newly formed food giant will have an “unparalleled portfolio of powerful and iconic brands”
The merger reflects the pressures facing some of the biggest packaged food makers in the nation as consumers migrate toward options they consider less processed. So how are the two multi-nationals currently faring in terms of visibility on YouTube, the second largest search engine in the world? I took a look at close to 40 of the combined company’s YouTube channels and was surprised to see an archipelago of small, isolated islands. Considering the high percentage of Millennials who eat up YouTube food videos, this represents both a strategic threat AND a strategic opportunity for the food giant.
Right now, less than 1% of the audience that engaged with one of Kraft’s 19 YouTube channels in the past 90 days also engaged with one of Heinz’s 19 YouTube channels over that period of time – and vice versa. So, the potential for cross-promotion is significant.
Kraft + Heinz = Global Powerhouse (Except on YouTube)
Together, the new company will have revenues of approximately $28 billion which will be generated by eight $1+ billion brands, five brands between $500 million and $1 billion, and dozens of smaller ones. This includes: Heinz Ketchup, sauces, soups, beans, pasta and infant foods (representing over one-third of Heinz’s total sales); Ore-Ida potato products; Weight Watchers Smart Ones entrées; T.G.I. Friday’s snacks, and Plasmon infant nutrition. It also includes: Kraft, Capri Sun, Jell-O, Kool-Aid, Lunchables, Maxwell House, Oscar Mayer, Philadelphia, Planters, and Velveeta.
According to YouTube intelligence company TubularLabs, there are over 2.3 million videos, generating 22 billions views, for food-related video content on the site. So, how does this giant food and beverage company with an “unparalleled portfolio of powerful and iconic brands” size up in this category? Well, it’s not a giant. And it’s not large. Heck, it’s not even medium-sized.
To give you an idea of the food and beverage brands dominating YouTube, take a look at the Red Bull channel, which launched in September 2006. It now has 1 billion views and 4.1 million subscribers. Or Coca-Cola, which launched its channel in January 2006, and now has 552 million views and 473,000 subscribers. Then there’s Oreo with 104.7 million views and 83,000 subscribers.
The Kraft Heinz Company has some of the most respected, recognized and storied brands in the global food industry with a loose collection of small to very small YouTube channels. The Kraft Recipes channel, which was created in June 2007, has 19.9 million views and 37,000 subscribers. That makes it a small channel. And the Heinz Ketchup channel, which was created in January 2014, now has only 4,843 views and just 903 subscribers. That makes it positively minuscule.
A closer inspection of the main Kraft Heinz channels indicates that they aren’t even using Featured Channels to promote other channels in their current company’s portfolio. If you don’t use Featured Channels, then YouTube displays Related Channels on the upper right area of a channel’s home tab.
Why Kraft-Heinz Need to Invest in YouTube Video Marketing
So, how big of an opportunity could investing in video marketing be for this newly combined company? According to The New York Times, “The mega-deal — by far the largest merger of the year — is a big bet on conventional staples of the American cupboard, even as consumers are shifting away from processed foods”.
Millennials, and consumers with disposable income, and desire, are spending more on fresh ingredients, particularly organic and locally-sourced products. And according to research from Millward Brown Digital, Firefly, and Google, people are turning to YouTube for ideas, inspiration, and tips on cooking techniques. In fact, in the last year alone, views of food and recipe content grew 59%, and social engagement (such as likes, comments and shares) on food channels rose by 118%.
The researchers also found that while nearly half of all adults watch food videos on YouTube, millennials (ages 18 to 34) view the most food content, watching 30% more food content on YouTube, on average, than other demographics.
Millennial food lovers are a loyal audience – one that’s powered a 280% growth in food channel subscriptions year over year. They’re also inclined to consume this content on the go, as can be seen from the fact that 75% of the growth in YouTube food viewership comes from mobile devices.
The Google whitepaper highlights how millennials actively engage with YouTube content in four specific ways:
- Millennial moms: Confident cooks who love food, and are looking for a new twist on family recipes. 68% of this demographic purchase ingredients featured in the videos they watch, 69% of them watch food videos every week, and 68% of them watch videos while cooking.
- Millennial dads: These dads are the most engaged with food content on YouTube, and tend to think in terms of “how-to” instead of “recipe” when it comes to food videos. 42% of them will purchase ingredients they learn about in food videos.
- Millennial women: This group wants to improve their cooking skills. While three out of four millennial women are open to watching branded food video content, 43% have not done so, so that’s a massive opportunity for brands to gain new audiences.
- Millennial men: 68% of this group describe themselves as a “confident cook”, and are focused on honing their cooking skills and experience. 69% of millennial men watch branded food content on YouTube, and are most likely to watch YouTube food videos to be entertained by food personalities, such as Jamie Oliver, or popular food shows such Epic Meal Time.
3 Things the Kraft Heinz Company Should Do Next on YouTube
Although the transaction is subject to approval by Kraft shareholders and receipt of regulatory approvals, it is expected to close in the second half of 2015. So, what should video marketers at Kraft, one of North America’s largest consumer packaged food and beverage companies, as well as Heinz, one of the world’s leading marketers and producers of healthy, convenient and affordable foods, do between now and then?
All of them should realize that there is nothing wrong with having multiple YouTube channels. As I wrote almost three years ago, “Google has 101 YouTube channels for three key reasons.”
- First, Google has multiple market segments worldwide, so creating 101 YouTube channels focused on different categories, languages, and regions is a smart market segmentation strategy.
- Second, having 101 channels enables Google to create, release, and/or package content that is themed around tent-pole events.
- Third, having 101 channels enables more Google’s employees to learn how to share a story that’s worth retelling, connect with people’s passion, and build relationships with customers at scale.
In addition, video marketers at both Kraft and Heinz should create a content plan to ensure that their content both meets their brand’s goals and engages their intended audience. If they already have a content plan, then they should tear it up and start over. Even if their current content fits within their overall brand strategy, it doesn’t appear to be resonating with 21st-century consumers on YouTube.
Three Key Steps to Building a Video Content Plan
#1 Define a strategically relevant and powerful content territory for each brand
This should lie at the intersection of an audience’s passion points and a brand’s value proposition. What unique content can your brand bring to your consumers to earn their loyalty? Depending on your brand’s identity, you’ll find different ways to pique your audience’s interest and make them care about your content. I’ve identified four main ways to provide intrinsic value: INSPIRE the audience with emotional and relatable stories, ENTERTAIN the audience by surprising them, making them laugh or sharing spectacular content, ENLIGHTEN the audience with documentaries, or EDUCATE the audience with useful information. Choosing how you’ll engage your audience will help you define your core message and tone.
#2 Decide how to generate your content
A brand can choose between three possibilities: create your own content, collaborate with established YouTube creators, or curate user-generated video content. And in many instances, user-generated content is more engaging than your own content.
For example, back in April 2007, Heinz spun the bottle and gave consumers a chance to create their own TV commercials celebrating their love affair with the thick, rich taste of America’s favorite ketchup. How did the YouTube community respond back then? Well, members submitted more than 4,000 qualified entries to the Top This TV contest, which got 5.2 million views. This means consumers spent more than 43,000 hours watching submissions, and even more time interacting with the brand.
Who was hungry for fame? Andrew Dodson of Wheelersburg, Ohio, won $57,000 and a well-earned place in the 146-year history of an “iconic brand” with his winning commercial entitled, “Heinz: The Kissable Ketchup,” which aired during the “Primetime Emmys” that September.
What was the business outcome? On May 31, 2007, the Pittsburgh Post-Gazette published a story entitled, “Heinz’s marketing blitz paying off.” In the article, David Moran, who was then president and CEO of Heinz North America, said, “We’ve already seen a pickup in the business.”
How do we know the pickup was significant? Well, Heinz announced Top This TV Challenge Take Two on Dec. 14, 2007. Heinz received more than 2,000 qualified video entries for the sequel to its first Top This TV contest. And the winner was Matt Cozza of Chicago. A personal experience served as the inspiration for his entry, “Now We Can Eat,” making him the winner of $57,000 and getting his 30-second spot on national TV.
It’s worth noting that the now-abandoned Top This TV Challenge Take 2 channel on YouTube has almost 1.6 million views and over 1,000 subscribers. That’s more than the current Heinz Ketchup channel.
#3 Implement a solid video marketing strategy
Third, given the abundance of food content on YouTube, it’s key to not only produce great food content but also to ensure it’ll reach your desired audience with a solid optimization and promotion strategy. Now, there are many steps for optimizing and promoting a large number of channels on YouTube. But, that’s another column for another day.
Kraft-Heinz NEED to Build a Strong Presence on YouTube
Let me conclude with this strategic insight: Although the merger of Kraft and Heinz will create the 3rd largest food and beverage company in North America, the combined company will only be the 5th largest food and beverage company in the world. However, strengthening its network of YouTube channels will help The Kraft Heinz Company to seize the significant opportunities for global expansion as well as organic growth in North America.
YouTube has more than 1 billion users. YouTube is also localized in 75 countries and available in 61 languages. If YouTube were a nation, it would rank just behind China, which has a population of 1.4 billion, and India, which has a population of 1.3 billion. But YouTube Nation would rank ahead of the United States, which has a population of 320.7 million, Indonesia, which has a population of 255.5 million, and Brazil, which has a population of 204.1 million.
That’s why the existing archipelago of small, isolated YouTube channels that represent the footprint each company currently has on YouTube is both a “strategic threat” and a “strategic opportunity” post-merger.