Inside Velveeta’s Cheesy New Marketing Strategy | September 2022
The COVID-19 pandemic greatly influenced consumer behavior. Americans spent more on frozen food and snacks and less on dining out.
The COVID-19 pandemic greatly influenced consumer behavior. Americans spent more on frozen food and snacks and less on dining out. To socially distance and limit exposure to the virus, consumers visited grocery stores less often but spent more per visit. This caused many shoppers to stock up on affordable, shelf-stable pantry staples such as Velveeta.
Despite declining sales for many years, Velveeta flew off the shelves in 2020. Velveeta’s marketing team saw this as a unique business opportunity to reintroduce consumers to the brand, connecting with new customers, and reconnecting with people who have not purchased Velveeta in a long time.
A cultural icon
Velveeta got its start in 1918 when a Swiss cheese maker developed the product. The company was incorporated in 1923 and was acquired by Kraft in 1927. The product was an instant hit. The product melted better than regular cheese, it was shelf stable, and it was affordable. American consumption of processed cheese steadily increased until 1996 when it hit its peak. Since then, however, it has started to fall.
Consumer attitudes have shifted as people have become more health conscious. In the early 2000s, the FDA told Kraft it could no longer refer to Velveeta as a “pasteurized processed cheese spread” because it is made with milk protein concentrate. Instead, the company calls it a “cheese product.” The company shifted its messaging over time to reflect changing consumer attitudes.
In recent years, Velveeta has seen increased sales due to the pandemic and high inflation. In 2022, inflation hit a 40-year record high of 9.1 percent. Because of its low cost, the target market for Velveeta expanded for consumers with a stressed food budget.
With this recent boost in consumption, rather than simply focusing on increasing sales, Velveeta’s new marketing approach is centered on tapping into the cultural zeitgeist. The phrase “cultural zeitgeist” refers to the general cultural climate of an era. While brands may be culturally relevant for a time, many fall out of fashion. Velveeta wants its processed cheese to have staying power.
A new approach
When Velveeta’s sales surged, the company decided to update its logo and introduce a new advertising campaign called La Dolce Velveeta, focusing on the pleasure Velveeta brings to consumers’ lives. A 60-second ad depicts a woman riding a lawnmower while holding a martini glass filled with Velveeta mac and cheese, among other outrageous moments.
Next, the company began to engage in stunt marketing. A publicity stunt is a planned event designed to create buzz around a product or cause. Velveeta partnered with Nails.INC to sell a limited-edition cheese-scented nail polish. Then, the company introduced the Veltini, a martini made with cheese-infused vodka sold at select restaurants, and a Veltini Kit sold online.
Kraft is not new to publicity stunts. The company released a limited-edition Kraft Mac and Cheese-flavored ice cream product in collaboration with Van Leeuwen, a Brooklyn, New York creamery. The stunt was such a hit that the company brought back the ice cream nationwide a year later.
Velveeta representatives have said they are not concerned about reviews of these stunt products. It simply cares that people are thinking about the Velveeta brand. Velveeta sales dipped slightly in 2021 but are up so far this year, suggesting Velveeta’s strategy may be working.
In the Classroom
This article can be used to discuss buying behavior (Chapter 11: Customer-Driven Marketing) and promotion strategy (Chapter 12: Dimensions of Marketing Strategy).
Discussion Questions
Why did Velveeta sales spike during the pandemic?
Why was Velveeta an instant hit? Why have sales declined over the years?
What is Velveeta attempting to achieve with its new promotion strategy?
This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt.
Sources
Danica Lo, "What the Inflation Reduction Act Does and Doesn’t Do About Rising Prices," Fast Company, July 27, 2022, https://www.fastcompany.com/90771568/velveeta-marketing-stunts
Danielle Wiener-Bronner, "Velveeta Is Staging a Comeback," CNN, August 13, 2022, https://www.cnn.com/2022/08/13/business/velveeta-martini-nail-polish/index.html
Mike Pomranz, "Kraft Macaroni & Cheese Ice Cream Is Back — This Time at Stores Nationwide," Food and Wine, March 11, 2022, https://www.foodandwine.com/news/kraft-macaroni-and-cheese-ice-cream-walmart-van-leeuwen
Linda Ferrell is the Roth Family Professor of Marketing and Business Ethics in the Raymond J. Harbert College of Business, Auburn University. She was formerly Distinguished Professor of Leadership and Business Ethics at Belmont University. She completed her Ph.D. in business administration, with a concentration in management, at the University of Memphis. She has taught at the University of Tampa, Colorado State University, University of Northern Colorado, University of Memphis, University of Wyoming, and the University of New Mexico. She has also team-taught classes at Thammasat University in Bangkok, Thailand.
