KEL631

DEREK D. RUCKER

Bel Brand: The Laughing Cow Challenge

On February 9, 2006, Ann Legan, marketing director of Bel Brand USA, had just ended
a
long meeting with the executives and heads of research for The Laughing Cow, the
companys
flagship cheese brand. For hours the group had analyzed the products positioning and
The Laughing Cow had enjoyed strong sales after being recommended by the South
debated
whether
Beacha repositioning was needed.
Diet in 2003, but sales slowed as the low-carb diet craze dwindled and competition
grew more
fierce. Legan also had to consider the desire of global stakeholders to see the U.S. market
give up
its healthy-snack positioning and adopt the brands global family-focused
After the meeting,
Legan returned to her office fully aware she was facing a crucial
positioning.
She
needed
decision
to find a relevant and meaningful way to position The Laughing Cow to the
American
that
would have a significant impact on the future success of Bels star product in the
consumer that did not conflict with the core essence of the brands heritage.
United
States.

Company
Bel Brand USA was a subsidiary of Fromageries Bel, a family-owned
cheesemaker
headquartered in Paris that specialized in high-quality, brand-name cheeses. Fromageries
Bel had
successfully focused on the French melted (spreadable) cheese market and had
The first
developed
itsBel subsidiary outside France was created in 1929 in the United
Kingdom.
flagship
brandThe
La Vache Qui Rit (The Laughing Cow) at home and abroad.
companys international expansion continued in Western Europe, and then spread to the
United
States and Morocco in the 1970s. Recently added markets included Algeria, Syria, Iran,
Japan,
Theand
Belthe
family
remained
and
active
the
management
of worldwide
the Bel
China,
Czech
Republic.influential
By 2011 Bel
had
more in
than
11,300
employees
andbrand by
sales of $1.8
operating
a holding
billion, company,
more thanLa
80Carbonique,
percent of which
whichwere
held generated
85 percentoutside
of the companys
France.
voting
rights. The familys 60 percent share of La Carbonique reduced the likelihood of
attacks or
takeovers by outsiders or competitors.

2012 by the Kellogg School of Management at Northwestern University. This case was prepared by David Dubois, PhD 11,
under
the direction of Professor Derek D. Rucker. Cases are developed solely as the basis for class discussion. Cases are not
intended to
serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or
request
permission to reproduce materials, call 800-545-7685 (or 617-783-7600 outside the United States or Canada)
or e-mail
custserv@hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a
spreadsheet, or
transmitted in any form or by any meanselectronic, mechanical, photocopying, recording, or otherwisewithout the
permission of
the Kellogg School of Management.

BEL BRAND

KEL631

Bel believed that organic growth was critical to running a sustainable business.
To drive
growth, Bel was committed to innovation as well as developing strong, differentiated
brands. The
company had launched nearly eighty new products since its inception to meet
consumers
growing expectations. Consumers were at the forefront of Bels efforts, and the brands
thrived
Bels key
success
in its impressive
portfolio of brands.
company
globally
through
its lay
commitment
to developing
productsThe
that
were had
relevant to
themaintained
local
a
communities
presence
in the
in which
Unitedthey
States
were
forsold.
nearly
In forty
2006years,
more than
selling
33The
million
Laughing
portions
Cow,
of Bel
Mini
cheeses were
Babybel,
eaten around
Boursin,
Kaukauna,
the globe,
and Merkts
underscoring
branded
the
cheeses.
successThe
of the
majority
company
of Bel
and
products
its brand.
sold in the
Bels corporate philosophy reflected core values such as ethics (i.e., honesty, trust,
United
States
respect
werefor
made in Leitchfield, Kentucky, and Little Chute, Wisconsin.
people and the environment); innovation (i.e., anticipation, creativity,
entrepreneurial spirit);
enthusiasm (i.e., drive, audacity, commitment); competence (i.e., broadening the brands
knowhow by using new technology and delivering excellent products); and cohesion
(i.e., sharing,
listening, team spirit). Consistent with the importance of food quality in the French
culture, Bel
emphasized a serious commitment to nutrition and believed that eating well was
The
Laughing Cow
an essential
component of healthy living. Bel executives felt that the reliance on Frances cultural
In 1921
image
was Leon Bel introduced the first spreadable cheese under the registered
trademark
name
a key
asset that
could be leveraged to support the brand in the market.
La Vache Qui Rit to the French marketplace. It was the first branded cheese, and also the
first to
be packaged in miniature, individual portions. The products unique texture, taste,
personality,
addition tohelped
being ato
pioneer
marketing,
LeonThe
Bel was
also an
early
andInmarketing
build of
a modern
powerfulbrand
global
brand, and
Laughing
Cow
grew
adopter
into a
household
of
advertising
name.
techniques that would be widely used in later years. Not only did he make
great use
of Frances new radio networks in the 1920s and 1930s but he also
communicated about his
brands by using multiple supports (such as posters) and clever product placements,
including a
bicycle race, games, and childrens giftssuch as trading cardsincluded in the
cheeses
packaging. Bel followed these initiatives up by creating a publicity department in 1926,
By at
the early 1930s The Laughing Cow had become an international favorite.
aimed
developing
Bel started
new customer insights through multimethod techniques such as
questionnaires
importing
the cheese
and to the United States in 1957, and began manufacturing its flagship
tasting groups. The companys advertising remained very dynamic, embracing both
product
The currentKentucky,
global positioning
television
in
Leitchfield,
in 1975. of The Laughing Cow was as a wholesome family
andproduct.
radio. InAn
addition, the brand had a strong presence on the web and was actively
involved inon children permeated its advertisements (see Exhibit 1), which presented the
emphasis
social networking
cheese
as
websites such as Facebook.
a tasty, friendly companion that complemented family values. This strategy proved
to be a
2

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BEL BRAND

successful way of extending consumption to more than one target, as winning the
childrens
market was a key to the whole family.

The Laughing Cow in the United States

Pre-South Beach Diet (before 2003)
Prior to 2003 The Laughing Cows target was undefined and generic, with Bel
hoping to
reach all cheese lovers. At times the company borrowed advertising messages it had
used in
other parts of the worldwhich reinforced the product as a family staplein the United
States,
Theretaking
was into
littleaccount
sales strategy
and,ofatthe
that
theOther
companys
size in the
without
the specifics
U.S.time,
market.
times advertisements
paired
United States
the cheese The
prevented
with Laughing
wine to make
Cowit from
seem more
beingupscale
distributed
to fit as
in grocers
widely as
specialty
executives
sections.
wished. The
company formed different relationships with grocers of various types and sizes, which
meant that
the product was presented in diverse places in stores
depending on grocers policies.
In some
stores The Laughing Cow appeared in the deli with specialty cheeses, but in others it was
placed
Overall,
Belsection.
recognized
lack
of a consistent,
strategy andefforts,
clear brand
in the
dairy
Thisthe
only
complicated
the coherent
brands positioning
as the
cheese
positioning
had
different
as
a stumbling
meanings
block
tothat
consumers
had prevented
depending
The on
Laughing
where itCow
wasfrom
carried.
taking
Foroff
example,
in the U.S.
when
placed in
market.
the
specialty
section,
The Laughing Cow was seen as a gourmet, imported cheese
South
Beachcheese
Diet Craze
(20032006)
spread.
When
included
in the of
dairy
section,
it was
viewed
as a versatile
familyStates,
snack.most notably
In 2003
a number
low-carb
diets
became
popular
in the United
the
Atkins and South Beach Diets. The South Beach Diet in particular singled out The
Laughing Cow
embraced
this serendipity
in the marketplace
as a strategic opportunity. From
as aBel
healthy,
low-calorie,
portion-controlled
snack.
2003 to
2006 the brand drastically changed its marketing strategy to match this new
perspective. The
brands typical target was Diana, defined by the demographics of existing
Laughing Cow
consumers as suburban, higher-income, mature 35+ moms. Whereas the brands past
positioning
was vague and inconsistent, it now become concrete and focused on health and diet,
specifically
Market
and the
Competition
by reinforcing
low-carb, low-calorie benefits followers of the South Beach and Atkins
Diets
Aslooking
a worldwide
cheese
packaged
in individual-size
The Laughing
were
for in leader
a brandin(see
Exhibit
2 for sample
advertisingportions,
execution).
Cow
was often seen as a family staple strongly associated with childhood. However, whereas
Bels
brands had dominated the childrens market in France, the United States was highly
crowded with
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BEL BRAND

KEL631

other competitors and presented a challenge to Bels dominance. Despite its

presence in the
United States for decades, by the turn of the twenty-first century The Laughing
Cow brand
(including Mini Babybel) commanded less than 5 percent household penetration and less
than 50
Substantial
players such
as Kraft and
Sargento
thehad
U.S.been
market.
Kraft
enjoyed the
percent
brand awareness.
Marketing
efforts
to thatled
point
simple
cut-and-paste
exercises
highest
from other
level
of awareness
markets,(76
targeting
percent)
the
and
cluttered
represented
all-family
34 percent
segment.
of the market share
(see
Exhibit 3).
Its flagship product, the classic silver-packaged brick Philadelphia Cream Cheese,
emphasized its
sweet taste, with a promise of delivering a Philly moment. Bels other
When the popular
competitors,
Saputo South Beach Diet singled out The Laughing Cow as a healthy, lowCheese
calorie,
and Sargento, had fair recognition as well, and adopted a more local positioning
centered
portion-controlled
snack, the brand was temporarily set on a different trajectory (see
on Midwestern
home values.
Exhibit
4
for the financial results of this approach). The brand team jumped on the excitement
surrounding
its newly found popularity and positioned The Laughing Cow as a health brand for adult
women.
However, shortly after the South Beach Diet craze dwindled, the brands growth hit a
plateau.
Global stakeholders, particularly those attached to the brands initial positioning, resisted
having
two almost opposite versions of the brand in different countries. The U.S. brand team was
Decision
faced
with the challenge of developing and growing a brand that was relevant and connected to
theLegan
U.S. reviewed the three positioning alternatives developed during the
meeting:
audience
while staying true to the brands DNA that had been established in France and
1.
the brand in a manner consistent with its European heritage as a
the Position
other
family
staple it dominated.
global markets
strongly associated with childrens needs in order to align the United States
with the
2. overarching
Position theglobal
brandpositioning.
around the health halo that South Beach created in a
manner that was
somehow more relevant now that the low-carb craze was dissipating.
3. Choose a new position for the brand that would increase The Laughing Cows
autonomy and
its own identity in the United States. This might entail leveraging the brands quality,
taste, or
Legan
needed to recommend a positioning that would help The Laughing Cow build on
other values.
its
recent success and adapt to changes in the U.S. market.

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KEL631

BEL BRAND

Exhibit 1: Sample Ads for Family-Focused Global Positioning

EUROPE

MIDDLE

EAST

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BEL BRAND
KEL631

BELKEL631
BRAND

Exhibit 3:
2: Snapshot
Sample AdofCopy
the Market,
following
2006
South Beach Diet Craze, 2006
Competitor Brand
Philadelphia Cream Cheese (Kraft)
Saputo Cheese

Awareness
Excellent
Fair

Sargento
Great Lakes Cheese
Bel Brand

Market Share (%)

U.S. Sales
($ in millions)

>30
<10

2,540

Fair

<10

1,443

Poor

<5

753

Fair

<10

1,729

756

Note that market share and sales reflect different metrics in Exhibit 3. Market share reflects the overall proportion of sales, whereas sales
reflects both volume and differences in unit price and type of offering.

Exhibit 4: Financial Figures ($ in millions)

Revenue from sales
Gross margin
Net profit

2005
1,777.3

2006
1,729.4

550.7
77.7

510.7
84.5

Source: Bel Business Report for U.S. Market.

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