Timing is everything when it comes to the business world. The right timing can make or break a product, a business, or a brand. Today, I am sitting down with Dr. Molly McAdams—our favorite meat expert—to examine this issue on a much broader scale.
Dr. Molly McAdams, is the former Vice President of Own Brand at H-E-B. For those of you who are not familiar with H-E-B—a privately held supermarket chain, headquartered in San Antonio, TX—is regarded as one of the world’s leading retailers. With more than 340 stores throughout Texas and Northeast Mexico, H-E-B sets the standard for retail. When Molly was at H-E-B, she led theOwn Brand private label initiatives, which represents nearly 30% of over $15 billion in sales for H-E-B at the time. Molly is not only an expert in the meat industry, but an expert in retail as well. As a doctor of meat science, she really understands almost every angle of the business. From animal raising, manufacturing, production plant operations, consumer insights, retail marketing, and food service, Molly is the queen of all things meat. So, let’s see what Molly has to say about how you can best develop the right product, for the right customers, at the right time.
ED HOWIE: Molly, thank you so much for taking the time to sit down with me today. Let’s talk about hamburgers that you microwave, shall we?
DR. MOLLY MCADAMS: Let’s do it.
ED: I remember you’ve got a little bit of experience in microwavable hamburgers. Huh?
MOLLY: I’ve got a little bit of experience with a microwavable hamburger. Yes, I do. Great experience.
ED: Wow, this was like late 90s at H-E-B, right?
MOLLY: Mid-June of 1999. I’ll never forget it. It was a rocket ship to the moon.
ED: What caused you and your team to believe that the world needed a hamburger that came out of a microwave?
MOLLY: Well, it was actually very interesting because my scientific mind was kind of stuck on the idea of there is no way that a hamburger, that you cook and then you freeze, and then you microwave to heat up, is going to taste good. There was a company that wanted to present this concept to me and my team at H-E-B. We tried the product and it made a believer out of me. We tried it and it was the most amazing product ever. It was so good that when we launched it, we put a double your money back guarantee on it.
ED: Wow. That’s incredible that it instantly changed an opinion you were so set in. Well, so let’s start with the end story and that is how did you launch this product to the consumer? What was the storyline?
MOLLY: Well, the storyline was staying in alignment with what we had already established in the fully cooked sector at the time, which was this amazing quality. It was all backed by the H-E-B brand, which is powerful, right? You have this tremendous power behind you in the trust of the brand. And we had already launched several really amazing products, so there was kind of this inherent belief that it had to be good if we put our name on it. But there was a real structural way around launching the product, which was fascinating. When we qualified the product for market, the insight was asking consumers, just kind of out of the box, “If we carried a precooked hamburger, that was frozen, and then you had to microwave it, would you buy it?” Overwhelmingly, no one said they were going to buy it. That insight was critical, because it’s like, “alright, good to know.” If it’s based on the concept alone, nobody’s going to buy it. But then what we did is we had these massive taste tests, which are a standard part of market qualification at H-E-B. First, the participants tried the product and then the question was posed, “Would you purchase this product?”, and it was a 98% purchase intent, when they tried the product. What we knew is the campaign and the launch had to be all about getting people to try it.
ED: With that realization, how did you get people to try this product?
MOLLY: We made sure that the launch coincided with making sure that all of the people who worked in the stores, were a believer in the product, first. We went through this enormous process of sending bulk product to all the stores so that they could try the product. They reheated it for all the store partners and that’s ultimately what sold it to the consumers. We were working for a company that had tremendous foot traffic, so we knew the consumers were in the stores. What we had to have was believers, that would sell it to the consumers, through the power of influence. And that’s exactly how we launched the product. And we hit over a $1 million in sales in three weeks.
ED: Over $1 million in sales, in three weeks? Wow! Now, what’s funny is, with our shared experience at H-E-B, I feel like sometimes we had the word velocity tattooed on our rear end, right? Because that was really the name of the game. I remember, a friend of mine from Chick-Fil-A called me about three weeks after I’d started at H-E-B, and asked me the question, “so how’s it going?” And my answer was,” I have no idea, yet.” However, I was convinced, that when I had a win and when my team had a win, it’s was going to be a huge win. But when we have a miss it was going to be a huge miss. And I had to aim for the wins. This precooked, frozen hamburger was a win, huh?
MOLLY: Yeah, it was a huge win and a quick story about just how huge of a win it was. So, the manufacturer, that was making the product for us, I convinced them to give us the bulk product, because I was going to give it to the stores. I said, “Listen, I need you to invest.” I don’t remember what it was, it must have been like 20,000 pounds. I want you to give me this product because I’m going to give it to the stores and I’m going to let all the people that work in the stores try this product. And they hemmed and hawed, and I’m told them, “No, you’ve got to trust me on this.” Which was funny because I don’t personally believe in “trust me” in business. But I said, “you’ve got to trust me on this, it’s part of the launch.” They came down to see me after the product launched. They were driving down I-35 and they stopped at one of the stores that is just north of San Antonio. They walked into the store and there was a guy mopping up a spill in the meat department in front of this enormous coffin case end cap, that is full of the new burger. Here’s this guy, cleaning the floor and he could tell that this group didn’t belong. He walked up to the group while they were looking at the display, and he says, “I’m going to tell you something. I know they don’t seem like they’d be good, but you’ve got to try these things. They’re amazing.” They were sold! They walked into my office, looked at me and said, “Okay, you totally planted that,” and I said, “What are you talking about?” They recount the story to me. I said, “I don’t know what store you stopped at, did you fly in? Did you go to SA 12? Because that’s the store everybody would stop at.” They explained that they had driven in. I said, “See, I didn’t know any of that. So no, that’s what your 20,000 pounds of free product did. It created a million dollars in sales.”
ED: This was the late 90s. And from my recollection of a frozen meat patty at that point was it was either Swanson’s Salisbury Steak or Encore, right? So, this was not a situation where H-E-B and H-E-B’s Own Brand dominance, took an item that was already performing well and said, “Hey, we can do it differently, better, more affordably.” This was truly creating a brand-new subcategory in the meat department, right?
MOLLY: Yeah, it was, and that was part of the recruitment when I came to H-E-B. The guy who recruited me kept telling me about helping with cooked meats sector. I got recruited to come in with no business experience. I’m a scientist. I was doing research for the beef industry. And he wanted me to manage a category, which I had no idea how to do. “Yes, you’re going to be a buyer but it’s so much more,” he really put a sales job on me. Cooked meats at retail, really, all that stuff that you buy at retail right now is just, the quality is terrible. I didn’t want to have anything to do with it. And that’s what sold him and how he sold me on the position too. He said, “you can change all of that. You make what you want.” Because of my meat science background and training, I had high expectations of how meat should perform, no matter if it’s precooked and you therm it up, it should still perform at an amazing level. And, I got to create those products and just tremendous success in that category. I loved every minute of it.
ED: But wasn’t some of your confidence in this based, on what food service was doing with products like this already?
MOLLY: Absolutely. And interestingly, I had food service training really early in my career and I knew that the food manufacturing sector—that positioned themselves towards food service—the products were more innovative, the flavor exploration was broader. I thought that they had higher quality offerings because, basically they had to execute at a restaurant level. And in some cases, you’d have chefs that you had to impress, so things like a precooked prime rib, that was not uncommon in food service. But retail manufacturers were kind of going in the different “lower cost” sort of a positioning. So, we brought in a ton of food service manufacturers, and put products in a retail package.
ED: What’s interesting is that while sampling is more prevalent in retail now than before, one of my favorite brands, Chick-Fil-A, really built its brand around that. Starting off as a 15-year-old in North Carolina, standing in front of the store handing out samples, I had to try to get people to sample Chick-Fil-A. And Truett Cathy, the founder of Chick-Fil-A, believed that if you tasted it once, you would love it for good. They actually trademarked the phrase “Taste it, you’ll love it for good”, I believe. I mean, you think about in restaurants, if you want to sell your desserts, you give a little sample of dessert, or that kind of thing, but in retail that really was foreign. But it works. It is expensive though. It’s hard to manage mass sampling already, but what’s interesting is that with fully cooked burgers, your focus was on the partners, the in-store team first, not as much the consumers, right?
MOLLY: Yeah, it was, it was primarily on the partners, because what I knew was that, the business model at H-E-B was such that, consumers were going to be in the stores. It was the same way it is now, I mean, if you live in the market area, you shop at H-E-B. There was a tremendous amount of interaction with the people who work in the stores, a lot of trust. It was a kind of an awareness and a kind of knowledge of who they were. And I believed that if I had everyone from the night stockers, to the front-end managers, believing in this product, they would advocate passionately for the product. And that’s exactly what they did.
ED: Well, and they did to your manufacturing partner as well, right there in the store. Wow. We’ve been talking a good bit about empathetic marketing. Aside from product formulation, which I know you’re all about the science and manufacturability of products and how to fully utilize proteins, but then also the consumer side of it. What is it about fully cooked burgers that you think resonated, personally with the consumers? Why do they keep buying it?
MOLLY: I think it had a lot to do with understanding how to use your freezer as a pantry. Having a really high-quality protein, that delivered time and time and time again, with tremendous consistency, it became a product you could always trust. And it was so simple that your preteen kid could fix it themself. It’s powerful, right? It’s always there. I look at my freezer as a pantry. And I think about what do I always have to have in my freezer in case somebody drops by? We live out in the country, so if somebody drops by, we probably aren’t going to a restaurant for dinner. We’re going to have to figure out what we’re going to eat at the house. It was all about having access to an amazing product, that you could just trust to deliver over and over but was so simple.
ED: With the fully cooked sector of the Own Brand at H-E-B, within several years, about how many sku’s did y’all have? How many items?
MOLLY: Oh, gosh, we ended up with over 100 sku’s, so over 100 items. I don’t remember how many we specifically got up to, probably 150 to 175, something like that. I don’t know. It was a lot.
ED: So, you and your team were not only building a great product but building a great category of products that could each deliver on its own, but also supports the sector as whole. Sounds like “taste it, you’ll love it for good,” it really is the truth, right?
MOLLY: Yeah, it was. It was very, very similar to that. And then, also you can’t underestimate the power of the parent brand behind it. And the trust that consumers have, then and now, in H-E-B as a company, it’s just a powerful, powerful company.
I hope you enjoyed that chat with Dr. Molly as much as I did! She has such a wealth of experience. We will definitely have Molly come back and share more insights with us. If you’d like to know more about Molly and H-E-B Own Brands click on the links below.