A Super Marketer : Health-Food Specialist’s Advice: ‘Sell to the Stomach’ : RICHARD A. HOLMES: Q

As far as the Holmes Organization is concerned, it’s not that you are what you eat. Instead, a better slogan for the Newport Beach-based advertising and marketing firm might be that you eat what you see. That’s because Richard A. Holmes, the 45-year-old founder and principal of the firm, believes that product packaging plays a big part in what we do--and don’t--put in our shopping carts.

His firm does roughly half of its work in advertising, public relations and packaging of natural foods and related products. And Holmes’ philosophy is that the boxes and bottles that contain our cereals, juices and everything else we devour “should sell to the stomach, not the intellect.”

The product packages, he explains, should appeal to our taste buds and make us want to grab them off the grocery shelves. Holmes says that his firm is one of the largest in the country specializing in advertising and product promotion for nutritional foods.

A high-school dropout and Newport Beach native who got his start by promoting surfing films, Holmes went to New York at age 20 to learn the advertising business. After working with some of the major ad shops there, he and two partners went into the water bed business, then became a furniture manufacturer.

He started the Holmes Organization in 1972. Today, the firm’s eight staffers have worked for clients ranging from Gelson’s and the Natural Grocer to Kashi cereal and Brita Water Filter Systems. The shop also represents the National Nutritional Foods Assn. and claims to have designed about 400 packages and merchandising programs for companies in the natural foods industry. In a recent conversation with Times staff writer Mary Ann Galante, Holmes talked about the industry and how much packaging influences what we eat.

Q. How much has the nutritional- foods niche grown in the last several years?

A. About 10 years ago, the U.S. mar ketplace totaled about $1.5 billion. This year, it is more than $5 billion, depending on how you define it.

That’s because in terms of everything that’s sold that says natural, the marketplace probably totals $10 billion to $15 billion. But in terms of pure, natural foods that don’t incorporate a lot of refined sugars--whole grains and things like that--the marketplace is about $5 billion, growing at the rate of about 25% a year.

Q. What has caused the growth in the nutritional foods market?

A. The consumer is demanding higher quality in his food and he’s willing to pay more for it. He wants things with pesticides out, that don’t have a lot of chemical fertilizers in them. The marketplace is changing.

Q. Who buys natural foods?

A. Generally speaking, it’s someone who is over 24 years old and upscale in terms of education and income. It’s generally a two-income family. These people are well-read and they typically have one or two children. In California, it’s usually a professional family.

Q. That sounds like yuppies.

A. Sort of, but it’s broader than that because you get people who are throwbacks from the ‘60s and then you get the ‘90s person, shopping side by side. Both of them have the same goal, which is to eat better food with less junk in it.

Q. Has the whole concept of health foods gotten to be a cliche? Has it gotten to be something that’s difficult to market?

A. I think so. It got to be a cliche through overuse. I have used the term “natural foods” for the past seven or eight years. A lot of people want to claim something is natural or health oriented. Natural is a buzz-word of the ‘80s. Saying “all natural” is kind of a put-down on the product. People don’t believe it any more because it has been overused. It’s like the sodium statement that you see on some foods--people don’t believe it because there are a lot of different ways to get around it.

Consumers are getting smart. They read labels.

Q. Are there regions of the country where health and nutrition are more important?

A. In the warmer areas, of course. But also in the East. Boston and New York are major areas, as are the Sun Belt areas. Southern and Northern California are major areas too.

Q. How much of the market is in California?

A. Of the $5-billion natural foods mar ket, $1.5 billion to $2 billion is probably in California. Probably 60% of the market in California is in the southern half of the state because there’s a greater population here and it’s more densely packed.

Q. How does marketing of nutritional foods differ from marketing conventional products?

A. We’re talking to a different type of person generally and we can define the niche pretty closely. We talk to the stomach and not to the intellect.

We look at what’s going to motivate the person’s stomach because it’s the stomach that’s buying the product, not the intellect. I say that because when you look at what motivates this person--what makes this person want to buy this salsa versus that salsa--what’s the difference?

It’s the way you design and merchandise the package, so that when consumers look at it, they want to pick up the box or jar and take a bite out of it.

For example, Elwell Farms in Santa Ana is an old-line, frozen poultry packager--little hors d’oeuvres, Cornish game hens and things like that. When we first talked to them, they had a fluorescent yellow package. We redesigned the package to make it very warm and inviting. The cooked Cornish game hen is sitting there on a plate with this warm, brown background. So you’re in the frozen food section and you see something that looks warm. It says, “Take me home and eat me.”

Another example is a client who makes a cereal product called Kashi. The box shows a spoonful of cereal. It’s not terribly attractive. But the spoon is bigger than life. The way the spoon is moving and the way it’s designed pulls you into it and says, “I’m good. Taste me. Try me.”

That company is in the top 30% of the cereal category nationally after about five years, with very little advertising.

Q. Kashi initially was called Gold in Grains. Why did you recommend changing the name to Kashi?

A. Phil and Gail Talber (the company’s owners) came to us with this product packed in a cellophane package with green type on it that said “Gold in Grains.” First, there was a major manufacturer that had already registered the name Gold ‘n Grain.

And the name Gold in Grains doesn’t describe the product. People don’t want to eat grains. They think of them as wheat. Grain doesn’t equate to food as directly as something else might, where you can control the perception--like Kashi. If you saw Gold in Grains, you would have thought, “Oh, another cereal.”

Secondly, you can’t sell cellophane bags full of pilaf in the grocery store. People want to see a box showing what it’s going to look like when it’s cooked.

The name Kashi comes from the word kasha. When we first saw the product, we thought it looked like kasha, which is an Eastern European dish. And that’s how it was named.

Q. About a year ago, Kashi came out with a five-bran, instant cereal product with a box that looks really unappetizing. What is the strategy there?

A. (The product’s appearance) is terri ble, but it actually doesn’t taste that bad. We basically tried to capitalize on the bran issue. The only problem is, it’s not too exciting to look at. They’re probably not going to be selling too much of that.

I can tell you it looks a lot better now than it actually looked in person. We’re not always right.

Q. So you’ve repositioned the Kashi product now?

A. Yes. When it first started, we posi tioned it as a quick-cooking cereal. The buyers in the stores didn’t like the way the product looked. The consumer’s stomach said: “I’m not going to eat that.” The consumer just didn’t like the way it looked in the spoon (on the package).

So we changed it about six months ago. Now it’s being sold as a mix. You can use it for baking biscuits, muffins, cookies or pancakes. The new package does not have the spoon; it just has the bowl with the product.

A lot of packaging is mystery. And a lot of it is helping the consumer along so that he understands. We did a private label program for Mrs. Gooch’s, a ranch market chain in Los Angeles. We had Mrs. Gooch’s private label juice side-by-side with a juice that was manufactured by a leading manufacturer with a national label. Both were at the same price point. Over a couple weeks, Mrs. Gooch’s, with the attractive label on it, sold 4 to 1 over the same juice with the national label.

Q. What was the difference between the Mrs. Gooch’s label and the national brands label?

A. One was a pretty bland label that said, for example, papaya juice. But the private-label papaya juice had a beautiful tropical scene of Bora Bora or Hawaii with a canoe with a bunch of papayas. It said, “I’m different. I probably have more quality than the other guy.”

It happens all the time. You’ll see one brand that’s maybe a mom-and-pop, homemade type of product--or made to look that way at least. There are some salsas out there right now that are selling for $5 for a small bottle versus La Victoria or somebody else which is $1.59.

Why is somebody going to spend $5 versus $1.59? It’s because of the perceived value in the label. They think it’s going to taste better because of the way the package is designed. It might have piece of paper over the lid with a band around it, with maybe an embossed gold, engraved label. I’m thinking of one I bought the other day as a test and it was about $5. The package looked very gourmet.

Q. Can packaging make that much of a difference?

A. Packaging is everything. Packaging is what makes you buy something. It’s not the product inside because half the time, the product inside doesn’t look at all what it looks like on the package.

Packaging is really liquid advertising. It’s advertising that is three-dimensional and that has to make a quick impact. It has got to grab you and entice you to pick up the produce and look at it. Once you pick up a product and look at it, nine times out of 10, you’ll buy it. But you have to make a decision to pick up a jar or box and look at it.

It’s hard to make food look good sometimes. We don’t cheat, and generally the bigger brands don’t--but some people do. But there are lots of ways to make it look good.

Q. What are some of the tricks of the trade that someone might use?

A. Instead of ice cream, for example, someone can use a lard substance. They don’t really photograph ice cream. When it starts to melt, it looks like ice cream. Different foods are coated with different things. We all use olive oil to coat things and make them shiny. We use glycerins and things like that. If it’s a gourmet food shot where an olive needs to shine the right way, you might use a little glycerin.

Some people use white paint instead of milk because it’s thicker and it pours nicer. There are a lot of tricks.

Q. What have you found the most difficult to photograph for packages?

A. Water. It’s clear and has no color in it, so water is really what you create behind it.

With Brita (water filer systems), we photographed through an aquarium with a blue gel behind it, to give it that radiant, blue, fresh, cold, drink-me look.

Q. Can really exceptional packaging save a mediocre product?

A. You see it every day. Most of the products on the supermarket shelves are mediocre. Most of the packaging is too.

There are some pasta sauces out there, for example, that are absolutely terrible that have wonderful packages that make them look wonderful.Q. How much influence do supermar ket buyers have over what we eat?

A. A great deal. Consumers have very little to do with what sells on the shelf today. To get into a major supermarket chain in New York City, I’ve heard of people spending up to $300,000 just to be put on the shelf in the cereal section. Then if it doesn’t do well, you lose your money.

After that, you’ve got to support it with different kinds of advertising, and then pay for various kinds of programs. Then they’ve got to kick somebody else off that shelf. Basically, all a supermarket is a very sophisticated warehouse. And you buy space in the warehouse.

Q. How do you design a label or package?

A. We first go to the supermarket and analyze what’s in the section that the product’s going to sell in. Then we design the package to compete with everything else that’s there.

Q. What was your worst mistake?

A. Pure and Simple pasta. It’s spaghetti in a box. We thought we’d be brilliant; we’d get this beautiful whole wheat in bright yellows and make this long spaghetti box look like a whole bunch of whole wheat.

We should have had the finished food on the box, so somebody could see what it looked like when it was finished. The product is still selling, but I just don’t like it from a marketing viewpoint.

Q. How about the most difficult prod uct that you’ve ever packaged?

A. We have a client called Cartilade--a very strange product that comes from shark cartilage. We had to do a package without saying anything about it. We couldn’t even tell you what it did. You can’t make any claims (because it hadn’t been approved by the Food and Drug Administration. The manufacturer believes) it inhibits growth of blood veins and blood vessels, so that it relieves arthritis pain.

All we can do is cite research. So on the bottle we showed older people that were all hobbled over in pain. Then we showed the same person in another picture, feeling great and playing golf.

Q. Have you ever been unable to come up with a package for a client?

A. We had a hard time when we worked designing an ice cream package for (the now defunct) Irvine Ranch Farmers Market. We never ended up doing the package.

It was to be Irvine Ranch Ice Cream with an absurd amount of butter fat--something like 22%. . . . It had to be packaged in a particular kind of container that had to be rich and gourmet-looking. . . .

The package was black. But the client wanted us to use a plastic package and it didn’t hold the ink very well. And it didn’t lend itself to that kind of rich, gourmet feeling.

The client never did come out with the ice cream.

Q. Has the oat bran controversy hurt the credibility of the nutritional foods industry?

A. No. Most of the people who are aware of bran and eat natural food knew two years ago that oat bran was kind of an advertising fad. Others are learning about what bran is. Even if it’s negative, they have more awareness about bran.

Q. You’ve talked in the past about how there’s too much “noise” in the marketplace. What does that mean and do you still feel that way?

A. Yes. Everybody has jumped on that bandwagon. There’s a lot of noise in the marketplace. Who do you listen to? The guy who shouts the loudest? The guy with the brightest-colored suit? Or the person who actually could give you some good information that you could use?

The average American is bombarded with between 4,000 and 5,000 visual images every day. He has to retain some of those (images). He might retain the information of the ones that have further value to him.

It all comes back to the information age. There’s just so much of it, if you don’t stand apart, you’re doing to get swallowed up in it.