Hormel positions Spam as premium in China, selling canned meat for 40% more than local products

Yohana Valdez

LOS ANGELES , August 12, 2011 (Industry Intelligence) – Hormel Foods has positioned Spam as a premium product in China, selling the canned meat for 40% more than local products, Business Week reported Aug. 4.

The company, which is looking to China to offset sales declines in tsunami-devastated Japan, has adjusted Spam’s recipe in the country, rendering it meatier to better appeal to the Chinese palate.

Spam is a mixture of, among other ingredients, pork shoulder, ham, salt, and preservatives, but failed to debut in China earlier because of a U.S. pork ban during the H1N1 virus outbreak in 2009.

Hormel has chosen the premium positioning in an effort to set Spam apart from the wide range of lunchmeats available in China, the publication stated. The company hopes to capitalize on the allure of foreign foods for the Chinese, who also consider foreign food products to be safer than their own. The country has experienced several food safety scandals recently.

At the premium price of $3.20 per can, Hormel will have to persuade customers that Spam, whose marketing will rely on in-store billboards, is worth the inflated price, said Hormel Foods International President Rick Bross.

Hormel sales last year totaled US$7.2 billion, of which its Grocery Products division, which includes Spam, comprised 15%.

The primary source of this article is Business Week, New York, New York, on August 4, 2011.

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