Feb. 3 (Bloomberg) -- Americans devouring an estimated 1.25 billion chicken wings at Super Bowl parties this weekend might find the snack’s spicy kick comes courtesy of a U.K. company -- Reckitt Benckiser Group Plc, maker of Frank’s RedHot Sauce.
Frank’s boosted sales 18 percent last year, thanks to edgy marketing, new flavors and increased shelf space at retailers such as Sam’s Club, the warehouse chain owned by Wal-Mart Stores Inc. Such growth has propelled Frank’s, used on the first-ever buffalo wings nearly 50 years ago, to become the best-selling hot sauce in America, toppling longtime champ Tabasco, made by closely-held McIlhenny of Louisiana, according to SymphonyIRI.
While making up about 2 percent of the Slough, England- based company’s total revenue, Frank’s, along with French’s mustard, has helped fuel Reckitt Benckiser’s North American food division. With growth slowing for the company’s bigger household products brands, such as Vanish stain removers and Finish dishwasher tablets, Frank’s has stood out from the pack.
“I have a bottle here at my desk,” said Martin Schulz, director of international equities at PNC Capital Advisors LLC in Cleveland, which manages $35 billion, including Reckitt Benckiser shares. “The hot sauce category has grown faster than other categories, and there’s a lot of competition out there.”
Frank’s double-digit growth has led Reckitt Benckiser to boost its marketing budget, according to brand manager Helia Santos. This year, the 92-year-old brand is embarking on its biggest splurge ever, rolling a 30-foot bus across the country. The “Frank’s to the People” tour will make 150 stops at colleges, NASCAR auto races, and restaurant chains like Hardee’s, part of CKE Restaurants Inc., whose menu features Frank’s-branded chicken tenders.
On Feb. 4, the day before the Super Bowl, the bus will pull into the parking lot of a Hardee’s restaurant off Interstate I- 70 in Indianapolis, not far from Lucas Oil Stadium, site of this year’s NFL championship game between the New York Giants and New England Patriots.
A Frank’s-a-palooza of sorts will commence, with live music, free samples and prizes including a Lexus GS 350, raffled off by a local car dealership. Chef Kevin Roberts, who has hosted a cable TV show about American football tailgate parties, will share recipes and chug Frank’s straight from the bottle.
Frank’s has also unveiled its first national TV ads, Santos said in an interview. The cheeky commercials feature an elderly lady shocking more genteel observers (such as Queen Elizabeth) by spouting the brand’s tagline:“I put that s--- on everything!”
The slogan speaks to Frank’s broad appeal. Loyal users, including Frank’s 125,000 Facebook fans, dab it on everything from mashed potatoes to popcorn. Schulz, the PNC investor, puts Frank’s on his lunchtime pizza, while colleague Scott Camp pours it over shrimp and scallops when cooking dinner at home.
“There are so many kinds of hot sauce so the brand has done well to build loyalty, market by market,” David Browne, senior analyst at researcher Mintel Group, said in an interview. “Hot sauce is a man’s world, and Frank’s is a man’s brand.”
The food blog Chowhound has said Frank’s, a blend of cayenne peppers, vinegar and garlic, makes a better wing sauce than Tabasco as it clings to the chicken more readily. That’s probably why Frank’s was the primary ingredient in the sauce on the first-ever Buffalo wings, created in 1964 by Teressa Bellissimo at the Anchor Bar in Buffalo, New York.
Today, Frank’s graces food sold at Hardee’s, closely-held Checkers Drive-In Restaurants Inc. and Hard Rock Cafe International Inc. Buffalo Wild Wings, which sold 6.6 million wings at its 739 locations during last year’s Super Bowl, doesn’t use Frank’s in any of its 14 “custom-made” wing sauces, according to spokeswoman Angie Andresen.
Diners can spread up to eight different kinds of Frank’s sauce on their food, from original to sweet chili, introduced in 2010. In warehouse clubs like Sam’s and rival Costco Wholesale Corp., Frank’s is sold by the gallon to restaurant owners, boosting growth in that channel, Santos said.
Those sales should continue to rise -- the North American spicy sauce category is expected to grow 6 percent annually over the next five years, according to Euromonitor. That’s a faster clip than Reckitt Benckiser’s core categories such as dishwashing and surface care.
No surprise, then, that Frank’s is spreading beyond the U.S. In 2009 British retailers such as Tesco Plc and J Sainsbury Plc started carrying it, and Frank’s Facebook page features queries from shoppers from Germany to the Philippines who want some.
They may have to wait. Santos said only 9 percent of U.S. households have bought Frank’s in the past year, which leaves plenty of room to grow in its home market.
“Our challenge is to get people to try it,” Santos, a native of Portugal, said. “Once people try it they convert. I never used hot sauce before I worked here. Now I put Frank’s on my French fries.”
--Editors: Sara Marley, Rick Schine
-0- Feb/03/2012 15:41 GMT
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