Case study: Gallina Blanca

The story. 
Gallina Blanca, one of Spain’s leading global brands, began exporting to Africa in 1972. To gain entry into local markets, the company’s marketing included a change in the brand name from Gallina Blanca – “white hen” in Spanish – to Jumbo, which is easier to pronounce in English and French. Over the years, Jumbo bouillon became a common ingredient in many African culinary traditions. Adding a bit of bouillon to a handful of rice or pasta and a few vegetables meant a tasty, nutritious meal could be prepared on a shoestring.


The challenge. 
By 2005, the company faced growing competition from its direct competitor, as well as from new local entrants and Chinese brands. Consumers were more sophisticated and demanding, and becoming more concerned with food health issues. At the same time, the World Health Organisation and other NGOs were promoting programmes for fortifying foods in Africa with extra nutrients.

Gallina Blanca’s marketing and R&D executives looked at enriching bouillon cubes with nutrients. They considered vitamin A because it helps develop healthy eyesight, teeth, bones and soft tissue and it may be helpful for reproduction and lactation.

However, the retail price would rise by as much as 20 per cent if it accurately reflected the R&D and ongoing manufacturing costs.

Gallina Blanca was reluctant to raise prices. African consumers have low purchasing power and any price increase could hurt sales volumes. Like its main competitor, Gallina Blanca had gone years without raising prices, so a big change could cause major fluctuations in their respective market shares.

Ultimately, a price rise was unfeasible, yet the questions still remained: should Gallina Blanca launch a new, vitamin-enriched product? If so, how?


The strategic response.
In 2008, Gallina Blanca decided to take the plunge. It hoped increased sales would cover the costs of the necessary R&D investment and marketing for the first two years. A new logo and packaging made it visually clear to consumers that it was offering an enriched product. In ads, people enjoying the product appeared to have a healthy “aura” or glow. The company insisted, however, that tastiness was the key benefit, and it did not raise the price.

One fear was that the launch could trigger an “enhanced-food war”. Gallina Blanca rolled out the campaign quickly across various countries to get a head start.


Did it work? 
After the launch, Jumbo bouillon cubes lost market share slightly before steadily regaining ground. Consequently, Gallina Blanca decided to enrich all Jumbo products, instead of just one premium product that included vitamins.

In sub-saharan Africa, there are more or less four industrially-produced, widely-used food items that can be easily enriched: flour, cooking oil, tomato paste and bouillon cubes. The latter were the first to be enriched, and the first company to do so was Gallina Blanca.


The key lessons. 
One of the key factors in the successful launch and acceptance of the product was that Gallina Blanca worked closely with NGOs such as the World Health Organisation and Hellen Keller International throughout the process.

Backed by these groups, the new product won credibility in the eyes of local authorities. In Africa, this is imperative, since food laws are often unclear and the authorities have a big impact on how they are implemented.

Finally, taking the initiative – and the risk of investing in something new, but ultimately beneficial for the population – turned out to be a winning move. Its overarching goal was to meet the food needs of the local population while remaining commercially competitive.

The result proved to the company’s leadership that it was possible to “do good and do well”.
- Financial Times, 23 Feb 2011