The Valen Group had been assessing the change in the market for restaurant brands in retail where retail buyers were rejecting new restaurant brand entries and discontinuing other long-standing brands or categories due to lack of support. It was clear the day of just developing and launching almost any known restaurant product to the retail packaged food industry was over. This was where we could help restaurants be successful with our brand licensing team combining with our strategy and innovation consulting firm capabilities. We decided that we would assess categories to find potential opportunities for restaurant brands. A lack of innovation in frozen breakfast coupled with an overlooked opportunity we believe would give a major restaurant brand an advantage to enter. We identified several restaurant brands and determined IHOP was a leading candidate. We approached IHOP and found out they had been exploring brand licensing and had decided that directly running and managing a major program would be a distraction to the core business. We agreed to develop a strategic program focused on breakfast foods to compete with major CPG brands in the category. They selected the Valen Group because of our strategic approach and domain experience in CPG food and beverage industry consulting with major companies such as PepsiCo, Nestle and Chiquita Brands.
We quickly realized in our initial market analysis that no other breakfast brand spanned the complete breakfast products category. Eggo owned waffles, Jimmy Dean and a few others were growing frozen breakfast sandwiches and cooking products and table syrup had other players dominate a flat/declining shelf stable set. The Valen Group researched consumer needs, analyzed the breakfast space, and lead the conceptualization effort to identify high potential brand extension opportunities. We developed a strategic roadmap for growth, identified licensing partners, and worked with both Licensor and Licensees to get in front of retailers to discuss innovation opportunities and go to market strategies. One of the critical mistakes we had seen with other launches is the lack of commitment by producer, the licensee, and the retailer. When a brand launches say one or two SKUs, it gets lost. Also placement in the freezer door is critical to not be at the bottom but rather ensure we are at eye level or launch end-cap promotions. By setting early strategies on how to win at retail, we could help with the success. To accomplish this goal, we utilized what we call a “brand block” strategy which requires retailers to take a minimum number of SKUs so that the consumer could identify the new brand and have enough choice and selection to create preference and affinity for the brand. Such a risk/return plan requires all parties to support and drive growth and we used our innovation consulting team to ensure the products launched had a clear point of difference and would drive the volume necessary to support a brand block strategy. To convince to the retailer this program would succeed, we presented concept test scores showing preference and volumetrics compared to other products on their breakfast shelf. We also were able to show IHOP would like bring new users into the category who had an affinity for IHOP. The agile qualitative market learning we conducted helped demonstrate the unique equity of IHOP in breakfast and the strong bond families with kids associated with IHOP. Together we were able to package a program that would be significant and compete well against major CPG competitors.
IHOP generated unique buzz in the grocery marketplace and jump-started growth in this overlooked market with a major US retailer National launch. IHOP woke up the sleepy category with a line-up of breakfast sandwiches, IHOP at Home, in over 3,000 Walmart stores and took significant share with the brand block strategy. The program gradually expanded into other retail outlets and product forms such as syrup and continued to innovate around product forms. Total program opportunity based upon partner projections are between $50 million and $100 million in annual sales.