SPAMming China Old-School

Spam 2
Image via Wikipedia

In the Hutong
Settling back in
0916 hrs.

The San Francisco Chronicle is running a short, amusing piece by Bloomberg‘s Matt Boyle on how Hormel is planning on bringing SPAM, it’s canned pork product, to China. The twist: because of all of the other low-cost meat-product alternatives available in the market, they want to hawk SPAM as a “premium product.”

This is not as impossible as it sounds, but it will demand that Hormel completely rethink the way the product is packaged, priced, distributed, and marketed. To the company’s credit, they appear to understand that, having ostensibly changed the formulation of the product to “match Chinese tastes” and conducting a marketing program focused on in-store promotion and making SPAM part of a dining experience.

(I say “ostensibly” because I have worked with Western food companies in the past who had claimed to have reformulated their product for Chinese tastes, while in fact they did nothing of the kind, unless you count reducing portion size and substituting local ingredients as “reformulation.”)

There are a lot of reasons this might fail, starting with whether Hormel is ready to spend several years in the effort. The article mentioned that Hormel was driven to China by the drop in Japanese demand after the Tohuku earthquake, suggesting something less than the commitment to a long-term effort that this will require. Chinese might also shy from a canned product pitched as a premium, and local competitors could jump into the fray with more credible premium products. Worse, the article noted that marketing funds were limited, never a good sign when you are introducing a product that requires a change in habits if not a change in tastes.

If there is one reason to be optimistic about SPAM in China, however, it is China’s own issues with tainted food. If Hormel can explain to Chinese consumers why SPAM is not only of meaningfully higher quality but is also a safer product less prone to tainting or other issues, it will have a winner. Food safety is the real hot button in the industry today, and if Hormel can prove SPAM’s safety while selling the product experience, it can not only build a market for SPAM, it will also expand the market for its other products.

Otherwise, SPAM will follow a long procession of food brands that never quite made it here.

ac

Spam does pretty well in Korea and, to a lesser extent, Hong Kong. I wouldnt write them off yet…but why change the formula! Who wouldn’t love some good old American spam in their hot pot?

Dan Welygan

Spam has been fairly successful in South Korea; maybe some of that could help for China?

However, in South Korea’s case, I think the product has been present there for a while now, since the Korean war, and (per my wife), represented something of a premium product during the post-war period as it was more expensive and higher-quality than the other packaged/processed meats on the market.

It seems to have taken off, however, as it’s widely available and is packaged in special Lunar New Year boxed sets (sometimes with cooking oil) for easy gift giving when that time of year rolls around.

In China’s case, Hormel will not have the help of market introduction via GIs and the unique post-war conditions that helped it to succeed in South Korea; I hope that their marketing team is ready for some challenges and they see your advice.

Jeff in Canada

And no mention of Monty Python. Possibly too left field for food marketers tastes like David.