In an interview with Dow Jones Newswires, executives from the San Francisco food company Del Monte / StarKist said it has sold more than $15 million of Tuna Creations pouches in five months, exceeding its sales forecasts by 37%. The statistics are based on AC Nielsen Scantrack data.
At this pace, Tuna Creations outsells all of its competitors' tuna pouch products combined.
Although the success of this one product isn't likely to have a huge impact on Del Monte's earnings, it is very important to the tuna business, said Chairman and Chief Executive Rick Wolford.
"Part of our strategy for the overall business is to bring value-added tuna products to consumers," Wolford said.
More than three years ago, StarKist became the first company to sell tuna in a pouch. StarKist, which was then part of H.J. Heinz Co. (NYSE:HNZ - News) , touted the package's convenience. The pouch didn't need a can opener and the tuna didn't need to be drained of water, making it less messy and more portable.
At the time the new package was introduced, the number of households buying canned tuna was on the decline. But tuna sales began to pickup as the pouch caught on with consumers.
Now, tuna in pouches accounts for 12% of all sales in the tuna category, Binotto said. For the StarKist business, pouches make up about 20% to 25% of its tuna sales, he said.
Before pouches, tuna was a very price-driven, commodity-based category, Wolford said. This was shown by the rapid changes in prices for canned chunk light tuna. Promotions drove sales, he said.
"The tuna pouch allowed us to bring back a higher-quality product," he said. " It allowed us to take this message to the consumers: this is a very nutritious, low-carb source of protein. That's the message that had been lost on the consumer."
Tuna Creations goes beyond the convenience offered by the package to provide additional flavor from marinating the fish. There are three flavors: Zesty Lemon Pepper, Hickory Smoked, and Sweet & Spicy.
Tuna Creations also provides Del Monte with a platform for future products, Binotto said. During initial market tests other flavors were tested with consumers. The three that are being sold now are the varieties that scored the highest in testing with hundreds of U.S. consumers.
To spread the word about Tuna Creations, Del Monte has boosted the tuna business's spending on television air time by 80%, Binotto said, without being specific about the dollar value of the increase.
The commercials show chefs at a culinary school in New Orleans using the flavored tuna in recipes. The ad, which hopes to appeal to women, highlights the product's flavor and versatility.
Del Monte doesn't yet know how many consumers who try Tuna Creations return to the store to buy it again, but it has information from market research firm Information Resources Inc. that shows 11% of Tuna Creations customers haven't purchased other tuna products in the last 12 months. An additional 18% of the product's users are increasing the amount of tuna they buy.
"That's the exciting part about how this is working out," Wolford said. "Tuna Creations is bringing people back to category."
Del Monte acquired the StarKist business from Heinz at the end of 2002.