Consumers are used to making sandwiches and wraps with Hormel's myriad meats. Now, Hormel is making a wrap for consumers, assembling cheese, deli meat and flatbread into an on-the-go concoction called Rev.
It is one of Hormel Foods' most significant new products in years, an item with few if any direct peers. And Rev is new terrain for the company, a ready-to-eat product in the refrigerated case, a place where Hormel is accustomed to selling cuts of pork and turkey.
"This is one of the biggest product launches in our history," said Holly Drennan, a Hormel senior product manager. "This is a missing product in the grocery store."
Rev, which rolls out nationally this week, comes in eight varieties — Meat Lovers Pizza, Italian Style Ham, Peppered Turkey, to name a few. It's being marketed particularly to teenagers as a snack, but Drennan said it also has a broader appeal.
Whether it flops or flies, Rev is another example of the innovation factory at Austin, Minn.-based Hormel, which has helped the company's stock outperform its peers for much of the last decade.
Hormel makes some of the most basic and ancient — by packaged-food standards — stuff around: Spam and bacon anyone? But it also has a reputation for creating new franchises, such as its Party Trays (meat and cheese appetizer spreads) and its Compleats line of microwaveable meals.
A few years ago, Hormel CEO Jeffrey Ettinger set up a corporate-level innovation team, aimed at coming up with ideas that bridged the company's various food businesses. Rev is the first big idea to emerge from the group. Hormel began shipping the product in May, and Rev will be fully available nationally this week. A major ad campaign is also planned.
The product sells for about $2 and can be found in the supermarket cooler next to Kraft Foods' Lunchables line. However, Lunchables seem aimed squarely at kids, while Rev is primarily targeting teenagers, right down to its sleek packaging and energy-drink-like name.
"Think about the products teenagers eat and the electronics they use," Drennan said. "We wanted the product design to fit with their mobile lifestyle."
The food scientists at Hormel have bestowed a 70-day shelf life on Rev. The wrap has 210 to 300 calories and 15 to 18 grams of protein. Hormel will be playing up the high protein level, currently a hot theme in the food industry because of the popularity of certain diets and nutrition plans that emphasize it.
Snacking generally is an industry sweet spot, with many snack categories sporting high sales-growth rates. Rev "certainly has a really large potential," said Ken Perkins, a stock analyst at Morningstar Inc. "It could create a new category, and give Hormel a first-mover advantage."
While Rev is unique, it will face competition from a host of other snack options — from sandwiches to chicken wings — in supermarkets and convenience stores. "It's not going to be easy," said Brian Yarbrough, an analyst at Edward Jones.
Convenience stores could be a particularly strong sales channel for Rev, though not an easy one, Steve Venenga, Hormel's vice president of meat products marketing, acknowledged recently.
Hormel's meat products division, which focuses more on grocery stores, doesn't have great distribution across convenience stores and drugstores, Venenga told analysts at the company's annual investor conference last month. "But this is a product that we believe we can — as a company, that we can expand to other areas."
Venenga said that Hormel already has found that the product appeals beyond the teen males it initially targeted. "It's guys, gals, teens, adults. I know we sell them in our corporate office, and there's plenty of non-teenagers eating these items."
Mike Hughlett • 612-673-7003
