This holiday season, Kraft (KHC) - Get Kraft Heinz Company Report wants to buy your holiday dessert. Or more precisely, it wants to pay you back for the dessert you had to buy because you couldn’t use its Philadelphia Cream Cheese to make your holiday cheesecake.
Unfortunately for cheesecake lovers, a shortage of the treat’s main ingredient has become a problem.
So if you could not be mad at them about the whole cream cheese shortage situation and the effect it’s having on your holiday planning, the company would really appreciate that. No hard feelings, right?
As part of that effort, starting at 12 p.m. EST on Dec. 17 and 18, you can visit a website set up by the company and sign up for a chance to claim a limited dessert reservation.
If you manage to snag one, you will be eligible for a chance to submit your dessert receipt and receive a $20 digital reimbursement.
Who Moved Your Cream Cheese?
Until recently, things were all good in the world of cream cheese.
While social media might have you believe that sourdough was the only thing people started baking during quarantine, amateur chefs were putting all sorts of dishes in the oven during their down time. Demand for cream cheese jumped about 18% compared to 2019, and stayed at that level for most of the year.
But now the ongoing COVID-19 pandemic has resulted in a supply shortage that is making many household staples harder to come by and more expensive.
Plenty of items are in short supply at the moment, from canned goods (there’s an aluminum shortage) to Lunchables, but the shortage of cream cheese has received a great deal of attention, in part because of its long reputation as the condiment of choice for bagels.
And while a thick smear, perhaps with some lox and a strong coffee, is the way many like to start their day, cream cheese also plays a part in some families’ preferred end-of-the day dessert.
Spreading The Blame
Kraft estimates that it will take three months for the supply issue to resolve itself. But since there’s only so much the company can do about its production issues, Kraft is instead focusing on trying to maintain its reputation and keep its customers happy.
Chelsea Wiater is a portfolio manager at EFG New Capital, who specializes in the research and analysis of consumer discretionary and consumer staples.
She says that Kraft’s reimbursement move is sharp one.
“[It's a] great example of how companies are keenly becoming aware that any small mishap could be misconstrued by their core consumer base and be blown out of proportion," she said. "And by getting ahead of this potential blow-up, Kraft is being very methodical about their brand’s positioning.”
We’ve all seen seen stories go viral of somebody who is displeased with their purchase, and the company getting a black eye online as a result. Wiater thinks Kraft is doing what it can to avoid that.
“Just a few weeks ago Marie Callender’s pies had to delicately confront an angry customer who claimed on Facebook that the brand had ruined her family’s Thanksgiving by selling her a defective pie, when in fact, she herself had overcooked the pie,” says Wiater.
But the bigger issue beyond gripping customers and irate viral content is that Kraft risk customers shrugging their shoulders and deciding to try something else, such as giving a non-dairy or vegan cream cheese substitute like Miyoko's a try.
One of the first rules of business is that it’s much more expensive to make a new customer than it is to keep an existing one, so the investment in a $20 refund campaign is worth it to a company like Kraft’s to keep their customers happy.
“The threat of substitute products is particularly high in condiments, where loyalty to certain brands or flavors has to be built delicately over years and careful management,” says Wiater.
“By taking a potential negative, out-of-stock cream cheese, and harnessing the power of social media to spin it into a positive, Kraft is hoping to authentically connect with their customer and keep their brand’s reputation intact."