• The Wall Street Journal (subscription required), Wednesday, November 29, 2006 11:45 AM

Hormel Foods' identification with Spam and other processed meats is proving to be a drawback as it pursues the small but fast-growing premium, ethnic and health-conscious markets.

Earlier this year, it pulled all four of the new ethnic-themed varieties of its Refrigerated Entrees line that it introduced in February 2004. Consumers were skeptical that the maker of Spam could also deliver restaurant-quality ethnic fare. The company has also failed to convince Whole Foods to carry Natural Choice, a line of preservative-free deli-style meats.

The company is not neglecting its traditional consumers. Innovations include single-serve packets and new flavors of Spam, such as Stinky French Garlic. And next year, it will double to a 20,000-an-hour production of Microwavable Trays, its "shelf stable" entrees that can sit on a shelf for at least 18 months. This month, Hormel kicked off its most ambitious ad campaign in years. Print ads feature a svelte, cocoa-toned woman raving about using Hormel's chili to make penne pasta.

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