Innovation: Ultra-Thin Slices at Sargento

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I love sandwiches.

My wife says I grew up in a “sandwich culture.” She grew up in the American South where people sat down to eat full meals a lot. We did that too in New York City, where I grew up, but sandwiches were a key part of life.

I’d stop by the deli on my way to my job after the school day was done and pick up the sandwich that would be my “dinner” that night. I rotated through roast beef and corned beef and pastrami. Cheese. Rye bread. I’d use some of my earnings to buy sandwich fixings for the weekend when I didn’t work. The best sandwiches were the ones you ate leaning over the sink.

Sometime in the last twenty years, sandwiches changed. The bread got flimsy and there was a lot less meat. People wanted to eat healthy so they cut back on the bread and the meat, but kept the cheese. Then came “low calorie” cheese.

Ugh. Low calorie cheese tastes like drywall. I kept my rye bread and I wanted a slab of cheddar or swiss on my roast beef, but I was the exception.

The sandwich in the age of the obesity epidemic

The challenge was pretty straightforward. As cheese became a more and more important part of the sandwich, people wanted it to taste good. Cheese makers responded by making low calorie cheese in various formulations. It tasted like drywall. They tried other formulas. It still tasted like drywall. Then the people at Sargento rethought the challenge.

Sargento: a history of innovation

Sargento is a big player in the packaged cheese business. They’re also a family owned company that’s been around since the 1950s with a history of innovation. In 1969, they introduced the pegbar system that’s now standard in supermarkets. They were the first to use re-sealable packages for cheese and the first to package shredded cheese.

Changing the challenge

The company figured that whatever they came up with would have to meet two criteria. It would have to use real cheese, not low-calorie, horrid tasting “cheese.” In other words, it would have to taste the way customers wanted cheese to taste. And, each slice would have to have no more than 45 calories.

Somebody at Sargento must have thought: “We can’t make low calorie cheese that tastes good. And we can’t offer smaller slices. What if we could reduce the calories in a slice of cheese by slicing real cheese thinner?”

The new challenge

That’s a great idea, but existing equipment couldn’t do it. Sargento could slice the cheese thinner, but then the slices would stick together. Whatever they came up with would have to work with existing packaging. Meeting that challenge took a $20 million investment in new technology. Sargento made it work.

The big payoff

Ultra-Thin Slices were released in 2012 and did $60 million in sales the first year. The second year sales more than doubled to $157 million. Even better, Ultra-Thin Slices attracted a lot of people who weren’t eating packaged cheese before. In other words, much of the sales growth was from new customers. That’s a breakthrough innovation by any standard.

What you can learn from Sargento’s Ultra-Thin Slices: rethinking the challenge

The breakthrough innovation didn’t happen until someone reconceived the challenge. Before, everyone, including Sargento, had conceived the challenge as coming up with a lower calorie cheese. When Sargento changed that to “slice cheese thinner so it’s only 45 calories” solutions became obvious.

What you can learn from Sargento’s Ultra-Thin Slices: the courage of conviction

It looks obvious now, but it took real courage to commit $20 million to develop new technology to support the reconception of the challenge. It may not have been a “bet the company” moment, but it was close.

Bottom Lines

Great innovation will not happen until you think of the challenge differently.

Making a great innovation a reality will not happen without courage.

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