By Kimeko McCoy • November 15, 2024 •
Ivy Liu
It has been just over six months since Campbell’s officially acquired Sovos Brands, Inc., bringing Rao’s Homemade under its brand umbrella. Originally a more regional brand, the jarred pasta sauce has built up a cult-like following, especially with home cooks.
After news of Campbell’s acquisition of the brand broke, fans expressed concern that Campbell’s would change Rao’s taste or ingredients, and possibly scale back its product quality to maximize profits. It’s a familiar tale: A big corporation buys a smaller brand known for its ingredients and fans get worried. (A similar story is playing out with Siete Foods, a Mexican-American brand set to be acquired by PepsiCo in the first half of 2025.)
Despite Rao’s fate under Campbell’s, the brand’s new parent company is already shaking things up when it comes to marketing and advertising.
Even with its acquisition, the pasta sauce brand (which has expanded into soups and pastas) is battling a brand awareness problem, according to Alan Creveling, vp of marketing for distinctive brands at Campbell’s. Rao’s is banking on this year’s Macy’s Thanksgiving Day Parade to help solve that problem.
The crown jewel in Campbell’s acquisition of Sovos Brands, Inc., Rao’s raked in nearly $775 million in organic net sales last year, up 37% from the prior year’s $566 million, and it’s expected to grow into a $1 billion brand, according to a Campbell’s news release.
Rao’s has spent the last year beefing up its media channel mix with a bigger marketing budget, tapping for the first time into live sports, pop-up experiences and traditional radio. This year, Rao’s plans to show up at the Macy’s Thanksgiving Day Parade with its own float as part of its effort to double down on live television events.
It’s unclear by how much exactly Rao’s marketing spend has increased or how much Campbell’s has contributed to that increased spend, as Creveling did not disclose specific figures. However, at least half of Rao’s Homemade’s marketing budget over the last two years was dedicated to digital advertising, which included TV commercials, influencer marketing and paid media, according to Creveling. In the past, Rao’s has had a digital-focused strategy. In order to build out its national footprint and reach a broader audience, the sauce brand has incorporated more live sports and radio ads into its marketing strategy.
“Even with all of that stuff, we’re only at 65 to 67% awareness,” Creveling said. “Of people that are walking down the pasta sauce aisle, 67% of people have heard of us. So we recognize that closing that gap is our No. 1 goal.”
Notably, marketers have found themselves in a conundrum as of late, tasked with more storytelling campaigns to build brand awareness amid the scramble for attention in today’s saturated digital marketplace. It’s a slow burn that could take a while to see return on ad spend, according to John Geletka, founder and chief experience officer of creative and strategic agency Geletka+.
“I always tell people in the brand versus performance marketing argument, on the brand side, this is a three-to-five year investment I’m making. I’m not going to see [an immediate] return. But it is a multiplier,” Geletka said, referring to brand awareness channels being the catalyst for sustained brand growth.
For some marketers, that has meant more storytelling with less marketing budget. Rao’s, however, has seen its marketing budget increase year over year, at least for the past two years, per Creveling. That trend is expected to continue with support from Campbell’s, alongside the brand’s investments in live sports and radio, he added.
“Before the acquisition, before this year, it was an ‘either/or’ question,” Creveling said, referring to Rao’s previously digital-focused media channel mix. “Now, it’s more an ‘and’ [brand awareness channels] question.” Meaning, the larger budget has enabled Rao’s to tap brand awareness channels, like live sports and radio ads, while maintaining its digital-first, performance marketing-driven channels.
Seemingly, Campbell’s made a bet on the brand, which could put pressure on Rao’s. In the acquisition news, Campbell’s said it sees Rao’s as a “significant whitespace opportunity” for profitable growth. That growth is expected to stem from increased household penetration, or, in other words, brand awareness.
Here, the live sports spots and radio ads make sense, according to Geletka and Barry Lowenthal, former CEO of Media Kitchen and current president of ad company Inuvo AI. In fact, the two execs said they expect to see more brands leverage offline channels as it gets harder to stand out in digital spaces and sports proves to be the last bastion of live television.
Although Geletka+ clients still spend the bulk of their media dollars on digital, 2025 budgets are shaping up to include more radio and television because of the ability of those channels to reach a broad audience, Geletka said.
As noted, brand awareness is a long game. In the short term, however, Rao’s hopes to bump its 67% awareness to 80% using its beefed-up media channel mix. “Of course, long term, we want to get as much as possible. But we know a lot of that has to do with time, and it’s more than advertising or distribution,” Creveling said.
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