Why food insurance is taking over holiday marketing

What Whole Foods is offering for the main course, Campbell’s and Instacart are doing for sides. Through its “dinner insurance” program, Campbell’s will send customers a replacement dish — either stuffing, mashed potatoes, green bean casserole or baked brie — for free. The cupcake maker Baked by Melissa, meanwhile, lets customers change the delivery address of their cupcake delivery up to three days before Thanksgiving — a relatively basic feature that the company rebranded as “cupcake insurance.” (To be eligible, customers have to purchase a 25-pack of mini cupcakes.)

This upcoming holiday season is an extremely hard one for any marketing department. Emphasizing family togetherness, as companies tend to during the holidays, feels out of touch given the requirements of social distancing. On the flip side, going the cynic route of “this holiday year sucks” will not get customers clamoring to buy turkey. “Food insurance” may help split the difference. Yet beyond their sheer headline value, these marketing gimmicks are also a way to drive people to sign up for corporate membership programs. Whole Foods customers partaking in the insurance program, for example, must already Amazon Prime members.  

“I think what Whole Foods did is pretty close to brilliant,” said Russell Zwanka, a professor at Western Michigan University who studies food marketing. Referring to Whole Foods and Progressive, he said, “the two companies are spending $35,000 and they’ve got the whole country talking about them.”

These food insurance programs don’t have a lot of downsides, in part because they are all relatively limited in scope. For instance, the Campbell’s program is only available to people who 1) are Manhattan residents, 2) submit ruined dish “claims” between noon and 5 pm on Thanksgiving Day, and 3) ordered their original Campbell’s dish through Instacart. There is also a limit of 100 customer returns, well below Whole Foods’ 1,000 max.  

But, of course, nothing is truly free. To be eligible for the Whole Foods turkey return, customers have to first be a member of Amazon Prime — giving the turkey promotion a small-scale version of the incentives of Prime Day. And on the Campbell’s end, only sides ordered through Instacart are eligible for the return. (Campbell’s, however, says that it is footing the bill of all the insurance claims — not Instacart.)

That tactic — exchanging several thousand dollars of spending for membership sign ups or, at the very least, access to more customer data — is smart marketing. “It gets you excited to get your information, and then we’ll keep trying to build that relationship with you,” said Zwanka. To take Whole Foods specifically, Zwanka said, “for a limit of 1,000 [people], you’re giving an insurance company information and you’re signing up Prime subscribers. That’s a great deal.”

Thanksgiving is a major sales day for grocery stores. Much of the explosive grocery industry growth has started to level off — this includes companies like Whole Foods and Instacart. Buzzy promotions aimed at signing people up for Prime and Instacart memberships might be one way to ensure growth and retain customers going into the holidays.

Retailers have long offered free or discounted products in exchange for, say, following a corporate Instagram account or signing up for their mailing list. Companies have long offered small upfront discounts in exchange for access to potentially longer-term customers.

Conceptually, “food insurance” is a new approach. The main precedent might be Domino’s “carry-out” insurance, which gave refunds for any pizza-related accidents customers might have on their way home, like slipping and dropping a pizza on the sidewalk or a sudden rainstorm destroying the pie. Fittingly, to be eligible for carry-out insurance, customers have to be a Domino’s rewards members — the program is only open to people who are part of its Piece of the Pie rewards program.

Domino’s might have started the trend, but the fact that the language of “insurance” — which in normal times most people see as a massive burden or, at best, a boring industry — might become a mainstream marketing tactic is very 2020. This year especially, consumers may truly be a lot more willing to buy a turkey from Whole Foods if they believe that, should a catastrophe happen, they’ll be covered. “It’s no surprise that multiple brands are looking to provide comfort and stability this year,” Linda Lee, the chief marketing officer at Campbell’s, said in an email. “Brands want to come to the rescue in an uncertain year that I think we all wish we could enter a ‘claim’ for.”

After a year in which seemingly everything has gone wrong, there’s a perverse logic to brands offering a refund to catastrophe. It’s even more apt that there’s hidden fine-print.

“This is kind of a year that’s so upside down, and people are looking for any kind of safe harbor,” said Zwanka. “That’s really what insurance has always been. You do it for peace of mind, and I think if there’s anything people want in 2020, it’s some sort of peace of mind.”