|
Shopper
Marketing News:
Valentine's Day: Chocolates & home cooked meals...
Valentine’s Day is still expected to provide the usual boost to a number of food sectors, although those choosing to dine out may find it easier to get a table than in recent years.
Couples are likely to choose confectionery and cards over bouquets and ‘bling’, according to business information analysts IBISWorld.
This year, IBISWorld (Australia) General Manager, Mr Robert Bryant, says Valentine’s Day spending will rise a mere 0.5% from 2008 to total $894.2 million, compared to an overall rise in retail Valentine’s Day spending of 2.2% since last year. “Tightening household budgets will make it difficult to justify splurging on loved ones this year,” Mr Bryant suggested, “especially for couples with children who have just had to budget for the Christmas holiday. Valentine’s Day is considered a more discretionary occasion than Christmas and birthdays, which means it will be hit particularly hard by the current economic climate.”
IBISWorld expects many couples will substitute pricier gifts such as jewellery and lingerie for a simple box of chocolates and a card, forgo a dozen red roses for a single stem, and try to come up with inexpensive ways to celebrate such as cooking a romantic meal at home rather than splashing out on an expensive restaurant meal.
Those who do purchase gifts will be looking to discount and online retailers rather than specialty outlets and boutiques, with supermarket greeting cards likely to outperform those sold at newsagents - according to the research.
Greeting cards, chocolates and flowers will all still perform reasonably well, according to IBISWorld, with card sales expected to grow by 3.8%, chocolates and confectionery sales tipped to rise 3.9% and flowers enjoying a 3.4% rise - although Mr Bryant noted that strong growth in flower revenue could be largely attributed to the significant mark-up on February 14.
Dining out sales will decline 1.4% on last year’s figures according to the forecasts, though that doesn’t appear too bad when compared to the downturn expected in the US - where dining out sales could fall by an alarming 6.1%.
Nielsen US has estimated that around 5% of annual chocolate sales take place in Valentine’s week, with the day before Valentine’s Day seen as the busiest for chocolate sellers. The day after Valentine’s day also draws in plenty of consumers looking for chocolate bargains, making it the second busiest day for chocolate sales in the month of February.
In the lead up to Valentine’s Day, supermarkets in recession-hit Britain have begun introducing deals on cook-at-home foods they consider to be ‘restaurant quality’ in a bid to capitalise on the rise in home cooking. Michelin-starred restaurants have even responded with set price lunch at dinner menus for as little as £12 (A$26.50).
Source: AFN
Food & Beverage companies amongst world's most sustainable...
The annual Global 100: Most Sustainable Corporations in the World list has featured nine companies that either manufacture or distribute consumer staples, two more than last year.
Announced at the Economic Forum in Davos, the world’s 100 most sustainable corporations list was created for the fifth time by Corporate Knights Inc. and Innovest Strategic Value Advisors Inc., and once again did not feature any Australian companies outside of the financial and materials sectors.
Coca-Cola (beverages), Danone (food/beverages), Diageo (alcoholic beverages), Procter & Gamble (consumer goods) and Unilever (consumer goods) were the five manufacturers of food and beverages to make the list, with Kesko (Finland), Sainsbury (UK) and Aeon (Japan) the three grocery retailers to make the list. The other consumer staples company to make the list was cosmetics company L’Oreal, which is part-owned by food group Nestlé.
Nestlé, the world’s largest food manufacturer, was one of 35 dropped from last year’s list, with Aeon, Danone and Procter & Gamble among those added to the list this year.
Sustainability is currently a contentious but very important issue for companies around the world, with businesses that fail to act likely to be punished by consumers in the years ahead.
“We do not have the pretence to know how to resolve [the dispute over the true definition of sustainability], let alone be able to produce an authoritative blue-print for ‘sustainable behaviour’,” the Global 100 website reports. “What we do know is that social, environmental and governance factors are increasingly relevant to financial performance, and that companies which show superior management of these issues are fast gaining an edge over their competitors - an edge which we believe will translate into outperformance in the long haul.”
Source: AFN
Lower income groups a big opportunity for brands...
Lower-income shoppers are increasing in number around the world, with the latest American-based research from Information Resources, Inc. (IRI) revealing that these consumers represent an enormous opportunity for retailers and manufacturers during the slow economy. That is provided they understand that lower-income shoppers are not a homogenous group. “The Lower-Income II Report: Serving Budget-Constrained Shoppers in a Recessionary Environment” report uncovers the critical differences and recessionary spending patterns and behaviours of lower-income micro segments that are driving today’s CPG growth.
Five key lower-income micro segments have been identified and they will be responsible for many growth opportunities. The report empowers retailers and manufacturers to better understand the key differences among lower-income households, so that they can use these valuable insights to their competitive advantage in hopes of attracting and retaining lower-income household loyalty.
“Lower-income households are one of the hottest opportunities in the marketplace and will provide real growth for those who want to truly learn about the various micro-segments and their changing behaviours due to the economy,” IRI Consulting and Innovation President, Thom Blischok, advised. “Our latest research goes beyond the usual narrowly-focused reviews and provides meaningful implications and action steps which retailers and manufacturers can use today to drive growth. At this point in history, the lower-income shopper is continuously challenged to stretch each and every one of their dollars, which will continue for at least the next four-to-eight years.”
“Our detailed channel and category-level analysis focuses on how the five lower-income micro segments are changing where they shop and what they buy during the current recession,” Sean Seitzinger, senior vice president at IRI Consulting and Innovation, explained. “Once you understand the wants and needs of the different shopper segments, you can then put the right products with the right pricing on the right shelves with the right displays to meet all of their needs.”
Lower-Income Micro Segments
IRI studied five lower-income micro segments, which are positioned to drive a large share of sales growth for retailers and manufacturers during the challenging economy, including:
* Singles and married couples aged 25-34
* Seniors older than 65
* Households with children
Shopping and Spending Trends
During the third quarter of 2008, CPG spending and private label performance has improved, which is a trend being led by lower-income shoppers. However, most retailers are still missing the mark on their private label offerings and marketing to lower-income shoppers, who represent the single largest private label opportunity in the next five years. Progressive retailers can drive private label growth if they focus on building stronger relationships with lower-income shoppers by improving variety and packaging.
Compared with other income groups in today’s economy, budget-constrained, lower-income shoppers are shopping more frequently, but are spending less per trip. They are also aggressively shifting spending across channels, retailers, categories and brands.
In addition, younger households and households with kids are driving growth across key food categories, the report noted.
Retailer and Manufacturer Action Steps
Retailers can make the most out of their own unique opportunities by working with the following four-phase process:
* Value the size of the business opportunity and investment implications
* Utilise lower-income household segmentation as a means to differentiate from competitors
* Understand lower-income spending nuances and proactively adjust store offerings
* Validate the required steps towards success and execute and drive the process
Manufacturers can also win a larger share of spending across lower-income segments by sharpening their focus on these groups and improving understanding of emerging trends and future implications for their categories and brands. Identifying opportunity gaps is a key, the research concluded.
Source: AFN
The great chain saw massacre...
There’s an old line that says, “...going broke happens slowly, then suddenly.” Tell that to the operators of Crazy Clarks, Go-Lo, Sam’s Warehouse, The Silk Shop, Starbucks, Shoo-biz, Easy DVD, Kleins, Toy Kingdom, Herringbone and Dare Gallery and they will probably look at you in disgust.
It’s tough out there. David Jones is reporting a sales decline of 9.5% and has sacked 150 head office staff. Myer is “pessimistic” on its sales forecast, projecting nearly 4% sales decline and is raising $2.8 billion in capital to satisfy its debt.
The question on everyone’s lips is, “Where is the bottom?”
The number one issue for retailers is profitability. Boom rents in shopping centres have killed many retailers as years of accumulated compound rent increases during the lease and at renewal take their toll. The rent frenzy has risen to the point where many retailer’s occupancy costs defy gravity.
Any simple analysis of JHD URBIS figures benchmarked against other retail industry sector standards (for gross margin and all other non-occupancy costs) show most specialty shops in shopping centres are barely viable. And as many in retail know, retailers go broke in boom times. Perhaps the carnage is just around the corner if the long predicted sale dip bites hard creating numerous little shops of horrors.
Recent boom states of WA & Queensland have seen rent increases of 100% which will surely turn sour if, or when, the tills stop ringing.
Does that mean the retail property bubble is bursting? Is that hissing you hear the bubble deflating? You bet.
Centro US is reporting its major tasks now are to manage retailer bankruptcies. UK retailers are dropping like flies. Is the rest of the world a harbinger of what’s ahead for us? Global giant Westfield has reported a rise in rent arrears and some Australian shopping centre developments of others are on hold as they scramble around for finance that’s evaporated in the credit crunch.
The ASX200 property index has plunged and taken GPT and others along with it.
The major chains, often with net profits of less than 4% of turnover are rethinking their property plans. Harvey Norman, Clive Peeters and others won’t be so coy about shutting up shop. Will there be a mass exodus from the mall to the high streets as retailers choose viability over brand presence?
The interesting thing is now, “What is a current market rent?” Shopping centre valuations are clearly under pressure. Assessing true market rentals will be a perplexing problem. While all the past evidence may show boom rents, going forward is a quagmire.
We live in interesting times here at Australian Retail Management.
Source: Brandish
Breast cancer screening an extra...
WOMEN will be able to combine retail therapy with healthcare in department stores, which have opened breast cancer screening clinics on the shop floor.
The NSW Breast Cancer Institute and Myer are trialling a service where customers can have mammograms in the lingerie departments of four Sydney stores. The mammograms are then transmitted in seconds to the BCI Breast Centre at Westmead, where they are read by two doctors.
The clinics -- the first of which opened at Parramatta yesterday -- will be fitted with the latest digital screening equipment to reduce examination time and improve accuracy, reporting time and image quality.
BCI executive director John Boyages said one in 200 women tested at Myer would be diagnosed with breast cancer. "They will receive co-ordinated care by teams of experts at Westmead and associated hospitals," Professor Boyages said.
"We live in a juggling society where women are juggling children and grandchildren, juggling their work and often leave themselves to last. Here's a chance to have a mammogram when you're shopping."
The move by Myer at its Parramatta store follows the lead of Target, which since 2001 has launched a range of clothing every August as part of its Fashion Targets Breast Cancer campaign to raise money for the National Breast Cancer Foundation. About 35 Australian women are diagnosed with the disease every day.
Elizabeth Moulang, 60, was the first customer to have a mammogram at the clinic yesterday and said she welcomed the convenience of it.
"I think it is nice that the clinic is in the lingerie department as it's very comfortable and girlie," Ms Moulang said.
"I think it's becoming evident that it is so important for women to have the screening so they can catch cancer in the early stages and it is an excellent service."
Myer chief executive Bernie Brookes said the clinic provides a one-stop shop for female customers, who can do their shopping, grab a cup of coffee and have a mammogram.
"There is a degree of warmth about the clinic and it ... is extremely convenient for women," Mr Brookes said.
"It's a great example of where everybody wins because it increases the penetration for people getting scanned and over three-quarters of Myer's staff are women."
Source: The Australian
Top 10 online retailers...
The online retail sector has been dismissed as a distraction from the real game – even recently, by retail giant Gerry Harvey – but the figures, and the trend, tell a different story.
In November 2008, Gerry Harvey issued SmartCompany with a challenge – find 10 Australian online retailers who are making “real money”. Harvey was convinced the world has been conned by online retailing, claiming the concept is “a complete waste of time”.
Sorry Gerry, you’re wrong.
While Australia’s online retailing scene remains dominated by big foreign-owned players such as Amazon.com, eBay and Apple’s iTunes, thousands of smaller Australian companies have built strong brands and solid sales by catering to niches of the retail sector.
And Australian shoppers are increasingly voting with their mouses. Recent figures from business research firm IBISWorld show Australian online spending will grow by about 5.5% annually for the next five years, from $15.1 billion in 2007-08 to $21.2 billion during 2013-14.
Australia’s biggest online retailers say if businesses are looking to survive – especially through the downturn – they need to meet customers on the web.
Fred Milgrom, who founded and operates Zazz.com.au (which has based its business model around offering one heavily-discounted product for sale each day) says all retailers need to be online.
“If you want to survive in retailing, you need a strategy to cope with online sales. You have to think about it and not ignore it,” he says. “More and more people will move online, because it’s fast, convenient and you get better value for money.”
Craig Reardon, director of online solutions group The E Team, agrees and says Australian business leaders – like Gerry Harvey – have been too slow to grasp the online selling trend.
“Australian retail as a whole just really doesn’t get the online thing. They don’t understand there are people behind computers, the value of whom is just the same as someone who walks into the shop.”
Veteran online retailers such as Paul Greenberg, who operates Australia’s largest online department store Deals Direct, and Naomi Simson, SmartCompany blogger and founder of online gift retailer RedBalloon, says many Australian retailers have misconceptions about how online retailing actually works.
“It’s hard work. If anyone thinks this is just two guys sitting in a small house, like the two guys who started Google, they’re wrong,” she says. “We have a massive warehouse and employ plenty of staff; this is a full-size operation.”
While the convenience and flexibility offered by the internet offers many advantages over traditional bricks-and-mortar, the age-old rules of retail – such as the importance of brand, customer service and supply chain management – still apply.
“The fundamentals of marketing remain the same,” Simson says. “Do I trust that brand? Can I rely on them to deliver what they’ve promised? None of that is negated because it’s online.
“But one of the great things about online is that it’s quite egalitarian. I could be a small business, but if the customer was having a better online experience at RedBalloon than at David Jones, they’re going to buy from me. It’s not about the size of the organisation, it’s about the experience,” she says.
“But at the same time, online shopping requires a lot of trust. When you try and sell something unknown you’ve got to really trust the description and images.”
Another advantage of online retailing is being able to receive customer feedback almost immediately through surveys and polls. Milgrom says this forces retailers to be quick on their feet.
“People don’t want to wait for a response online when they could go down the street. You have to be responsive and very fast at replying to queries and so on,” Milgrom says.
Simson agrees, but says not being able to “eyeball” a customer can be a disadvantage. “They don’t get to touch and feel us, so traditional stores should have an advantage.”
Reardon argues that traditional retailers who are yet to embrace online could even find themselves with some big advantages over pure online shops.
“The thing that never ceases to amaze me is that traditional retailers have the infrastructure to do this. They have the stock and financial systems, they have means of fulfillment, so they have a massive head start,” he says.
“It’s quite a bizarre scenario where those who are most equipped are the least embracing. For under $5000 they can get established and get marketing done. I’m not saying it’s simple, but it’s now affordable enough to trial and error very effectively.”
In answer to Gerry Harvey, here are 10 of Australia’s top online retailers, and they are all making “real money”. To be eligible, companies had to be Australian owned and sell actual product or services via their website. Aggregators and auctions were excluded.
Deals Direct
This online department store is Australia’s largest, selling everything from office chairs to blenders.
Founded by Paul Greenberg and Michael Rosenbaum, the store has surged in popularity and, according to online monitoring firm Hitwise, is now the fifth most popular shopping website in Australia. According to Greenberg, the site records over two million visitors a month and ships between 15,000 and 20,000 parcels a day.
Greenberg would not reveal revenue figures, but it is believed revenue in 2007-08 was around $80 million.
Kogan Technologies
This online retailer, started by entrepreneur Ruslan Kogan in 2006, produces its own products by building televisions, DVD players and other electronics with parts from different manufacturers. This allows Kogan to sell the devices at a cheaper price, but with the same parts from larger brand names, such as Samsung or Sony.
While the retailer has had its setbacks – it delayed and ultimately cancelled the release of a mobile phone based on Google’s Android operating system – Kogan projects a revenue level of between $15 million and $20 million for 2008-09.
Zazz
Zazz is built upon a concept used in sites such as US-based Woot.com – sell one product a day, all day, until it sells out, then do it again with another product. The products range from gadgets such as magnetic wrist bracelets to kitchen wares.
The site incorporates forums and a blog to enhance a sense of community, and it seems to be working. Revenue is around $4 million.
RedBalloon
Rather than sell a specific type of product, Naomi Simson’s RedBalloon focuses on selling an experience. The site offers packages for interstate trips, massage services and even cooking classes in the form of vouchers.
The site also puts an emphasis on customer feedback, which Simson says is a vital part of surviving online.
Simson claims the site receives about 15,000 customers a month, and recorded revenue of $18 million for the 2007-08 year. She projects revenue of $23 million for 2008-09.
Catch of the Day
Similar to Zazz and Woot, this site sells one product a day until it sells out, but customers can also buy different products from other sections of the site.
Founded and operated by Gabby Leibovich, Catch of the Day is the 19th most popular shopping and classifieds website in the country, according to Hitwise. It also made the BRW Fast 100 revenue growth list, and claimed a revenue level of $40 million in the 2007-08 financial year.
Officeworks
The online version of the office supply superstore has helped transform its reputation from purely an office supplier to a more general department store. The site sells everything that’s available in the bricks-and-mortar stores, but often sells computers and software at discount prices online.
The site has beat Kmart and even electronics giant JB Hi-Fi to be the 33rd most popular shopping site in Australia.
Dick Smith
The online branch of this electronics giant has gone through a rebranding exercise over the past year, helping to make it the 18th most popular Australian shopping website position on Hitwise lists.
Similar to Officeworks, the site focuses solely on electronics, but offers exclusive online prices and sales.
Peter’s of Kensington
This homewares company, which is a Sydney institution thanks to its retail store in the Sydney suburb of Kensington, made the jump online in 2000 and found a ready market for its discounted brand-name kitchen products.
While it mostly offers kitchen products such as glass ware, dinner ware, cook ware and collectables, it has recently started to offer beauty and travel products. The site is the 55th most popular online shopping destination, and expects to grow by venturing into luggage and stationary products.
Oo.com.au
Oo.com.au was launched in September 2005 and offers a range of products in 35 different categories. General manager Gavin Basserabie describes the operation as a “bargain mega-store,” and focuses on providing products at the cheapest possible price.
The site recorded 70% growth during the 2007-08 year. Basserabie says revenue was over $30 million.
Shopping Square
Similar to Deals Direct and Oo.com.au, this department store boasts over 20 different categories for products ranging from DVDs, gadgets, homewares and even mobile phones. The site also offers a reward points program, as well as constantly updating discounted products.
The store also updates itself with news regarding product deliveries to keep customers up-to-date, and has surged in popularity to be the 28th most popular shopping and classifieds site in Australia.
Source: Smart Company
The lipstick effect...
Since the day's news brought us a bit of a bounce in retail sales, and Revlon just reported that while its total net sales are off, sales of color cosmetics are up, we decided it's time to take a closer look at the Lipstick Effect--the theory that holds that in rough economic times, a woman may not buy shoes, diamonds, or sofas, but she will comfort herself with lipstick and other affordable splurges.
Marketing Daily asked Nancy Upton, assistant marketing professor at Northeastern University College of Business Administration and an expert on hedonistic spending--what makes people feel happy when they go shopping--to explain a few things.
Q: What, exactly, is "The Lipstick Effect?"
A: During the Depression, we saw an increase in cosmetic sales, especially lipstick. It's a small, relatively inexpensive purchase that cheers you up. We're seeing similar patterns today. McDonald's sales are up, as are other lower-end restaurants--people know it's cheaper to eat at home, but it's an inexpensive way to lift their mood--especially if they're working late. Workplace morale is low, stress levels are high--people are looking for short-term gratification.
Q: Mass color cosmetic sales are up 3.6% in the last quarter. Yet fragrance sales fell in 2008. Isn't perfume an affordable splurge?
A: We put it on for somebody else, not for us. After a few minutes, we don't even notice we're wearing it. We notice that new lipstick all day long.
Q: Since lipstick is such a feel-good purchase, is it entirely emotional?
A: No. In fact, with the extensive trading down we're doing, consumers are very interested in finding out, for example, exactly what ingredients are in a skincare or cosmetic product. When they learn that there is little difference between an expensive department store product and a drugstore splurge, it doesn't just pick up their spirits--it makes them feel smart.
They think, "I don't have to pay $40 for a Lancome product--I can get one just as good for half that." It makes them feel rewarded for trading down in retail channels. That's why we're seeing so many of the mass merchandisers add things like cosmetics kiosks--it's giving consumers a bit of that department store feel, while letting them pay a much lower price.
Q: So do high-end cosmetic companies still have anything to offer consumers?
A: It depends. I think very high-end brands, like Crème de la Mer, for instance, may be able to keep that elite following. And some cosmetics offer a discreet opportunity for conspicuous consumption. So a consumer may very well pay more for a Chanel lipstick, which she can put in front of other people. But will she pay more for Chanel nail polish when no one will be able to tell what the brand is?
Q: What else, besides lipstick, provides that hedonistic benefit?
A:Consumers are really getting a lot of pleasure now out of price transparency--there are so many Web sites, for example, that allow them to research the cost of an item from many sources. It's not even so much that people need to save money, but it's almost a game mentality for many people. They say, "I'm not going to let Williams-Sonoma take advantage of me--I'll find the best price for that Calphalon cookware."
Q: What kind of purchases are least pleasurable?
A: When people are anxious, they want short-term gratification and very low-risk decisions. High-risk purchases, like cars, are very anxiety-provoking--forcing consumers to make all kinds of trade-offs between safety, style, mileage and price. It's so uncomfortable, many will just exit the shopping process and put off any decision.
Q: How long will this new frugality last?
A: Not very. People might become really careful about spending when they're anxious, but many of these changes just aren't sustainable--they are giving up things that make them happy, like having their hair colored and going out to dinner. Workplace morale is low, and they are going to return to the purchases that help them mood-regulate.
Q: So we'll go back to reckless spending?
A: No. People are learning new skill sets, and those will stick. Now that they're learning how to do extreme comparison-shopping, people won't go back to careless spending. Smart shopping makes them feel savvy--they like it. But they will return to their go-to services and products, the things that make them feel good.
Source: Marketing Daily
Steak out, snags in as shoppers cut grocery bills...
THE bleak economic climate is forcing shoppers at Coles to trade down from T-bones to sausages, in an attempt to cut their shopping bills.
In the latest sign of the drift to thrift, consumers are also swapping expensive cuts of meat for chicken and eggs, and branded products for generic and private label goods.
Coles's merchandising boss, John Durkan, said yesterday that in the past three months sales of beef, lamb and pork had grown at a slower rate than turnover of food and liquor at its 765 Coles and Bi-Lo supermarkets and 772 bottle shops.
"At best [sales by volume of beef and lamb] are flat versus the rest of our business," he said.
Mr Durkan said that he had seen similar shopping behaviour during economic downturns in Britain, where he spent 17 years working for major supermarket chains. "Through tough times we do see switches," he said. The number of units of chicken sold had increased by the "double digits" over the past three months, compared with sales during the previous six months.
The private label eggs had also increased rapidly, and sales of Coles' brand tuna and baked beans had grown "substantially". "They are moving away from the more expensive proteins," he said.
Across all products sales of private label goods have increased by 12 per cent in the six months to December, but sales of private-label baked beans and tuna have grown at a higher rate.
"It has been well into the double digits in the past three months," Mr Durkan said. "We are seeing a switch from branded products to our own brand."
Mr Durkan's comments echo those made by Woolworths chief executive Michael Luscombe, who last year said shoppers at his stores were increasingly buying cheaper cuts of meat.
While non-food retailers around the country watch sales slide backward, all supermarket chains hope to see an increase in sales in coming months as shoppers cut back on eating out and try to save a few dollars by buying at a supermarket.
Stores such as the discounter Aldi hope to attract shoppers with their house-branded products, which sell for less than many of their branded equivalents.
In response to the economic downturn, the company behind IGA supermarkets has doubled the number of budget-priced private label goods it offers.
"I do think that consumer confidence has been dented … and people will be looking for value," Coles's chief executive, Ian McLeod, said yesterday.
He had attempted to keep the price of staple products down, but the price of bananas had increased in recent weeks due to floods in far north Queensland, as they were now flown to stores rather than transported by road.
Sales at Coles supermarkets and liquor stores open for a year or more rose by 3.8 per cent in the three months to December, but its Kmart discount department stores and Officeworks stores have been hit by the downturn.
Kmart's sales increased by just 0.4 per cent and Officeworks sales have been down due to small businesses cutting back on office supplies amid growing pressure to remain afloat.
Officeworks expects to be hit by "difficult trading" for the next six months.
Kmart's chief executive, Guy Russo, said many customers had walked into stores ready to buy something but "walked out with nothing in their hands", due to its failure to stock the right products at the right prices.
Source: SMH
Mars sustainable...
A research partnership between CSIRO and Mars Australia has produced a database and information toolkit that will be available to wide range of food businesses to help improve their sustainability strategies.
CSIRO Deputy Chief Executive, Science, Dr Alastair Robertson, said: "CSIRO has worked with Mars to produce 'life cycle analyses' on a range of Mars' food products that are relevant to almost every major food commodity produced in Australia.
"The development of sustainability indicators for agrifood businesses will make environmental impacts transparent and create drivers for sustainable agriculture and food manufacturing," Dr Robertson said.
CSIRO scientists and Mars sustainability experts met this week with policy makers, suppliers and trade partners to explore how recent collaborative work in areas such as assessing and minimising the carbon and water footprint of Mars' operations are increasing scientific understanding of the environmental impacts of the food industry.
Mars Australia Research & Development Director, Nick Hazell, said global concern for environmental sustainability need to be translated into local actions.
"We need to ensure we deliver benefits to the business, the community and the environment, and apply our Australian experiences and learning around the world," Mr Hazell said.
Source: RW Bites
The seven biggest food trends in the US..
With economic uncertainty influencing consumer purchasing decisions and interest in healthy eating on the rise, food and beverage manufacturers can feed consumer demand for products that provide more bang for the buck. Ingredients firm Tate & Lyle spoke with several food and beverage manufacturers and spotted seven food trends that American consumers are keen on this year - primarily linked to an overall health and wellness trend.
1. Reduced Calories
Consumers are being advised to reduce calories through portion control and eating lower calorie foods. As such, food and beverages that reduce sugar and calorie content without compromising taste have an excellent chance of getting into consumers’ homes.
2. Healthy Lifestyles
Consumers want food and beverage products that support their healthy lifestyles. Tate & Lyle’s 2008 U.S. market research found that consumers prefer products with functional health benefits including digestive health, immunity defense and weight management. Prominent ingredients sought in 2009 include: Dietary fibre, vitamins and protein.
3. Budget Management
With the economy in a downturn, it’s no surprise consumers are tightening their belts. Food and beverage manufacturers can help them save cash by partnering with suppliers on sweetener or texturant optimisation processes that could lead to significant production savings, which can be passed on to consumers, while delivering a final product with an improved health profile, according to Tate & Lyle.
4. Functional Ingredients
Food isn’t just what’s on the plate. The added value of the ingredients used in products has gained a starring role. Consumers are seeking foods that deliver benefits against multiple conditions, such as added-fiber products promoting digestive health and appetite-curbing benefits or probiotics.
5. Comfort Foods
Many foodies are saying farewell to nightly dining at restaurants in favour of preparing meals at home. Consumers are also going back to foods that are reminiscent of their childhood in a sign that they are hoping to gain an experience from the meals they eat.
6. Simple Ingredients, Clean Labels
The International Food Information Council (IFIC) reported in its 2008 Health and Wellness survey that 51 per cent of consumers look at ingredients on the label when determining what to purchase and eat. The report also indicated that 52 per cent of consumers are looking for fibre and 40 per cent are seeking protein. Foods with functional, recognisable ingredients on the label are in. Ingredients requiring an advanced degree in biochemistry to understand are out.
7. Healthy Indulgence
Consumers want to have their “indulgent cake and eat it too.” Decadent foods with a healthy twist are sparking great interest. Consumers are seeking their favourite desserts, like ice cream and cookies, fortified with nutrients to enjoy without the residual guilt.
Source: AFN
Australian
News:
WOW snaps up online wine retailer...
Woolworths has purchased upmarket online wine business Langton’s Fine Wines Auctions as they seek to further expand their online and liquor market presence.
Australia’s largest supermarket operator and owner of the Dan Murphy’s chain of liquor stores believed the purchase would offer an effective way to enter the online fine wine liquor market. “It’s a really good business, Dan Murphy’s has been a customer [of Langton’s] for quite some time,” a Woolworths spokeswoman told AAP. “It’s a really good fit for us in the fine wine and liquor market and it also gives us access to their online fine wine liquor channel.”
Langton’s owner, Stewart Langton, reported that he had received a number of offers for his business previously and believed the current offer would provide the ability for expansion over the years.
“In this case, the Woolworths approach was one that suited because it will enable me to grow my business in way that I want to,” he said, according to AAP. “As a small independent operator, it’s very difficult, so quite simply it was the right deal for me and my business.”
Mr Langton added that he would remain with the business, which would operate as usual until Woolworths has a complete grasp of its day-to-day operations. “[Woolworths] will look at the business over a period of time, the same way they did with Dan Murphy’s when that was purchased - for the first four years nothing was done, it was just allowed to operate and they learned to understand it,” he said. “And of course it went from five shops to 96 at the present time I think and with Langton’s they will look at it and discuss with me what I want to do.”The purchase price was reportedly in the vicinity of $13 million.
Source: AFN
Coke bid loses its fizz...
LION NATHAN'S $8 billion takeover tilt at Coca-Cola Amatil has been brought to an abrupt end by the Coke bottler's major investor, the Coca-Cola Company, which yesterday pulled out of talks over a possible deal with the brewer's controlling shareholder, Kirin.
The decision by the American soft drinks giant, owner of a 30 per cent holding in the Australian Coca-Cola supplier, prompted Lion Nathan to walk away from the bid, which it launched three months ago with the financial backing of the Japanese brewing conglomerate.
Lion expressed disappointment with the stance adopted by CCA in refusing to engage in direct talks about the proposed deal. However, according to observers yesterday, the reality was that a successful takeover was always dependent on Atlanta's Coca-Cola Company and Kirin agreeing on satisfactory terms.
The Australian brewing group, which is 46 per cent owned by Kirin, called a halt to the battle, as it had indicated from the beginning in November that a deal needed to be done on a friendly basis.
That was in the knowledge of the Coca-Cola Company's dominant position on CCA's share register. Its refusal to sell would have prevented Lion from taking full control of the company and consolidating its operations, even if all of the remaining holders of 70 per cent of its shares had agreed to the terms.
"We made a very attractive offer at a 30 per cent premium in one of the most challenging financial markets in decades," Rob Murray, Lion's chief executive said yesterday of its proposal of $6.15 cash plus 0.469 of a Lion share for every CCA share.
Based on Friday's CCA closing price of $9.35, the offer put a price of $10.60 a share on the company, valuing it at $7.8 billion. That compares with its present sharemarket value of $6.8 billion.
Mr Murray expressed surprise that the Coca-Cola Company had ended several weeks of direct discussions with Kirin given that he claimed "all Australasian aspects" of the deal had virtually been agreed.
That was a reference, the Herald understands, to the American group's desire to own part of Kirin's Berri fruit juice company, which competes with CCA, and its wish to take on the Mount Franklin brand of water from its Australian associate if the takeover had gone ahead.
However, while the eventual price on a successful deal had yet to be agreed, it is believed the deal could not be consummated because of differences between the Coca-Cola Company and Kirin over their positions in the Japanese soft drinks market.
The two companies are direct competitors, with the Coca-Cola Company holding 29 per cent of the market and Kirin 12 per cent.
CCA would not comment yesterday on what caused the Coca-Cola Company to pull out of the talks with Kirin over the Australian deal.
"Given that the proposal required the support of the Coca-Cola Company as a condition of [it] being able to proceed, the CCA board takes the existence of the letter [terminating discussions with Kirin] as bringing the proposal to an end," a CCA statement said.
The company had only told the ASX less than a week ago that the negotiations were continuing, which prompted analysts to speculate that a deal was still likely, although brokers ABN Amro had indicated that Lion would have to lift its offer to more than $11 a share to get the Coca-Cola Company over the line.
That estimate was based on the $1.2 billion offer made in late December by Kirin's Japanese rival, Asahi, to buy CCA's soft drinks competitor, Cadbury Schweppes.
Source: AFN
Cadbury marketing boss quits...
Cadbury Australia’s director of
marketing Michael Magee has
resigned and is set to take up a
senior marketing role at Kraft.
Cadbury Schweppes confirmed
that Magee left the company
on Friday, with a
spokesman saying that he will be
able to start at Kraft in May.
Kraft had not returned calls
at the time of publication, but
it’s understood that Magee will
fill the role recently vacated by
Nikki Anderson, the FMCG
giant’s former marketing chief.
Anderson resigned from Kraft
in December, after spending less
than a year at the company.
Following her departure, Kraft
said it was hoping to appoint a
replacement in the New Year.
Magee was the marketing
director of the entire Cadbury
Schweppes business before the
ongoing split of the company
saw him handed the confectionery
portion of the marketing.
He recently oversaw a creative
agency review for the flagship
Dairy Milk brand, with
Saatchi & Saatchi winning the
business from Publicis Mojo.
A Cadbury Schweppes
spokesman said: “Michael has
left to go to Kraft. We are undertaking
a search to replace him.
This is an ongoing search that
will take place as we split the
confectionery brands from the
drinks side of the business.”
Source: B&T
Patties Foods gets new CFO...
Australian manufacturer Patties Foods has announced the appointment of Michael Knaap to the Chief Financial Officer (CFO) role after their previous CFO, Beth Schofield, stepped down in November last year.
Mr Knaap moves from his previous role as CFO at Unibic Pty. Ltd. ‐ a privately owned family company manufacturing and marketing biscuits and other food products into the retail and foodservice channels.
“Michael brings extensive experience in manufacturing performance I.T. systems, a deep understanding of growth drivers in the FMCG sector and strong relationships with external investors,” CEO Greg Bourke said. “After a transition period, Michael will take over the Company Secretary role from Philip Thomas and I thank Philip for his work in this important area.”
There has been a host of changes at the top at Patties in the past six months, with Mr Bourke taking on the CEO role in September and the CFO and Chairman both resigning in November. Ernest Barr has since been holding down the role of Acting Chairman.
Source: AFN
Coles to donate profits to bushfire appeal...
Coles will donate this Friday’s (13 Feb) profits from its 750 stores nationally to the Government’s Bushfire Appeal Fund in partnership with the Red Cross, as Australian companies continue to offer support to those affected by the tragedy.
Coles Managing Director, Ian McLeod, said the devastating bushfire had touched a number of Coles team members, some of whom have lost loved ones in the fire, and a number who have lost their homes. “Like everyone in the community, we’ve been shocked by the devastation these fires have wrought, and we extend our deepest sympathies to those who’ve suffered loss in this terrible event,” Mr McLeod said.
Mr McLeod added that the size of this Friday’s donation would depend on customer support, but could be several million dollars. “Our customers often have set days for their supermarket shopping, but we’re asking people to change their habits this week and to do their shopping on Friday, to support this special fundraising event. We hope Australians will help us make this Friday’s donation as substantial as possible,” Mr McLeod said. “There’ll be extra team members working in stores to help manage what we hope will be a very busy day. We’ve also ordered extra stock deliveries into stores.”
Coles advised that they had been helping ground level relief agencies over the weekend, providing essentials such as food, water and toiletries.
A host of food companies have offered their support, with discount supermarket chain Aldi pledging $250,000, supermarket giant Woolworths donating $1 million, alcoholic beverage group Foster’s - which has seen two of their wineries destroyed by fire - providing $750,000, and conglomerate Wesfarmers ($500,000), among those to donate.
Customers will also be able to donate to the Victorian Bushfire Appeal Fund at all Coles and Woolworths stores (except Woolworths’ Queensland stores where money is being raised to assist those affected by floods in northern Queensland).
The Red Cross has reported that the relief fund has already surpassed the $15 million mark.
Source: SMH
Coca-Cola resilient but not crisis proof...
The Coca-Cola Company overnight reported that they had again exceeded growth targets, with unit case volume growth of 4 per cent in the fourth quarter and 5 per cent for the full year propelling them to a yearly profit of US$5.8 billion. The profit was, however, down 3 per cent on last year’s figures due to the impact of one-time charges.
Sparkling beverages increased unit case volume 2 percent in both the quarter and full year, the Company noted. While stalwarts Coca-Cola, Fanta and Sprite contributed to strongly to the results, increasing unit case volume 2 per cent, 3 per cent and 6 per cent, respectively, for the year.
Still beverage unit case volume increased 11 per cent in the quarter and 13 per cent for the full year, led by strong growth across the portfolio, including juice and juice drinks, teas, active lifestyle and water brands. Their emerging markets were assisting them as their home market of America continued to be impacted by a recession.
Coca-Cola’s Russia, Ukraine and Belarussian boss Zoran Vucinic told a news conference on Wednesday that they were pursuing an aggressive growth strategy in Russia, which would see them spend US$1.2 billion (A$1.83b) over the next 3-5 years.”The company can afford to have aggressive positions in Russia,” he said. “The market of non-alcoholic beverages is growing during (the downturn) and we want to continue investing in the Russian market.”
The Company remained on track to deliver $500 million in annualised savings from productivity initiatives by year-end 2011, with the continued acceleration of these efforts will enable cash flows to be redeployed to drive investments for growth.
“Our performance in the fourth quarter was very solid,” Muhtar Kent, President and CEO of The Coca-Cola Company, commented. “Our fourth quarter and full year 2008 results reflect both the universal appeal of our global brands and the unrivalled reach of one of the world’s leading consumer products distribution systems. For the year, we again exceeded our long-term growth targets despite a very challenging economic environment. And importantly, we gained volume and value share in most of our leading markets through solid execution of our strategies.”
Mr Kent added that 2008 saw them heighten their focus on investments that can generate more sustainable results in the years ahead. “Working in close collaboration with our bottling partners, we successfully accelerated actions, refocused investments and intensified our disciplined execution to drive results,” he advised. “We also made significant gains in realigning our organisational structure to generate greater productivity and in rewiring our business for sustainable results.”
“While certainly not crisis proof, as no company is, I do believe our global business model is relatively resilient, as we bring simple moments of pleasure to our consumers, nearly 1.6 billion times a day, for cents at a time. We recognise that 2009 will bring many unique challenges to us and our consumers, customers, and bottling partners. Yet, I believe that our solid brand and business fundamentals - together with a fundamentally sound balance sheet, robust cash generating model and strong global bottling system - provide a sound foundation for our management team to continue driving long-term sustainable growth,” Mr Kent concluded.
Source: AFN
Diageo raises spirits...
Premium alcohol beverage giant, Diageo, has reported organic profit growth of 6% for the first half of 2008/09 despite facing stronger economic headwinds in the last two months of the year.
“Diageo’s performance in this first half again demonstrates the resilience we have from our brand range across categories, price points and geography,” Paul Walsh, Chief Executive of Diageo, said. “The global economic slowdown has affected business in the period and in November and December this impact was more pronounced. In this difficult market environment Diageo has delivered 3% organic net sales growth, 6% organic operating profit growth and 9% underlying eps growth and we have maintained our financial strength. We have delivered value in the half from the brands we have added, Ketel One, Rosenblum Cellars and Zacapa.”
Diageo, which owns the Guinness, Smirnoff, Johnnie Walker and Baileys brands, reported the ready-to-drink market in Australia was a key reason behind a fall in sales for the region - attributing the drop to the rise in tax on such products in April last year. The decline in performance of this division helped reduce volume growth by 4 percentage points and net sales growth by 6 percentage points in Australia, part of an overall decline in volumes in Asia Pacific. North America and International divisions (which includes Africa and South America) were the two regions were volume growth was achieved, while Europe and Asia Pacific both realised volume declines.
Of their most well-known brands in Australia, Smirnoff was the best performed - achieving global volume growth of 1 per cent and organic sales growth of 8%. Guinness (-1%), Baileys (-5%) and Johnnie Walker (-6%) all saw volumes fall worldwide, although Guinness (7%) and Johnnie Walker (5%) still managed to achieve organic sales growth.
The spirits leader reported they are implementing a restructuring programme “designed to ensure that Diageo emerges from this challenging time with improved routes to market, even stronger brand positions and enhanced financial strength.” The restructure will create full year savings of £100 million a year, largely accrued in fiscal 2010.
Mr Walsh remained confident about the final six months, but was cautious given the prevailing economic environment. “Current economic trends indicate that consumer confidence will reduce further and the outlook for the second half is more difficult to predict. However, across Diageo we have an experienced management team which combined with the consumer appeal of our brands, the effectiveness of our routes to market and our geographic diversity gives us confidence in our business,” he suggested. “In the second half we will be yet more agile in our response to changing consumer demand and we will continue to invest behind our business while achieving efficiencies across the regions particularly in marketing spend where we are seeing strong media rate deflation. Given these strengths, albeit with more uncertainty about the wider economic environment, we believe we can deliver organic operating profit growth for the full year in the range of 4% to 6%.”
Source: AFN
Coles turnaround 'to gather pace'...
Wesfarmers Limited, the owner of Coles supermarkets, today announced a 46.3 per cent lift in net profit after tax to $879 million for the half-year ended 31 December 2008, which was in the upper range of guidance provided on 14 January 2009, and includes $125 million (post-tax) in write-downs and provisions.
The all-important Coles turnaround was gathering pace, Wesfarmers Managing Director, Richard Goyder, advised. “Despite the impact of a tougher consumer environment, the Group’s retail businesses have generally weathered the downturn well and the Coles turnaround is gaining momentum,” he said.
Operating revenue for the six months increased to $26.4 billion, boosted by the inclusion in the current period of a full six-month period of ownership of the Coles, Target, Kmart and Officeworks businesses.
Mr Goyder reported that the signs are suggesting the five-year Coles turnaround plan remains on track. “Our turnaround retail businesses are generally performing well despite the challenging conditions,” he advised. “Particularly pleasing are the signs that the turnaround in Coles is gaining traction. In the second quarter of the financial year, Coles’ Food and Liquor comparative store sales growth was 3.8 per cent compared with 1.3 per cent in the first quarter.”
“The business achieved a record Christmas trading period driven by its fresh offer. We’ve also seen the upward trend continue since 31 December 2008,” Mr Goyder said about Australia’s second largest supermarket operator. “Under Ian McLeod’s leadership, there is a strong new senior management team, a new customer focused culture and a more efficient head office. During the period the team has continued with the development of new store formats, achieved much better in-store availability (up 50%) and an improved fresh offer.”
“Liquor sales have grown while the Convenience business continues to show strong non-fuel sales growth.”
The first phase of the Coles recovery strategy revolves around developing strong retail disciplines, improving operating standards, effective financial control, changing the culture, and starting the process of reformatting the stores to create a stronger fresh offer and a more customer friendly shopping experience, the company explained.
“Recognising that further consistency of Fresh in-store will be required, early stage actions to improve quality, display and availability delivered solid trading uplifts. Christmas trading was encouraging, with notable improvements in Produce, Bakery and Seafood. For example, sales of prawns and lobsters grew by over 50 per cent year on year,” Wesfarmers reported.
The pilot store trials, which are gauging customer reaction to help Coles determine the most effective format for the future of the supermarket, had received “encouraging” responses from shoppers and there are plans for a “further roll-out next financial year, subject to successful refinement.”
A stronger promotional programme was developed and aligned to peak trading days, with a positive response in both customer reaction and sales impact. While Coles’ housebrand review was also completed, with the supermarket chain reporting Housebrand sales grew three times faster than alternative branded products. Sales of the ‘You’ll Love Coles’ brand had risen 12% year-on-year.
“While initial response is pleasing to an array of early programmes that have been instigated in all parts of the business, it is recognised that delivering the necessary change required to a business that had lost its way will take time,” the company warned. “Despite the scale of change required, this can be achieved.”Mr Goyder explained that the economic environment would be challenging for most of the Group’s businesses over 2009 but still anticipates momentum to pick up for the Coles business.
“I expect the turnaround of Coles to continue to gather pace over the next 12 months,” he concluded.
Source: AFN
McLeod stems bleeding at Coles...
THE new boss of Coles says he has stabilised the loss of market share to rival Woolworths and other specialist grocery stores, following several years where the chain has been walked all over by its rivals.
Ian McLeod, who has been in the top job for nine months, yesterday said the 765 Coles and Bi-Lo supermarkets and 772 bottle shops' share of the overall market was "broadly stable".
"We actually did see a small increase in market share over the Christmas period. Our overall market share is broadly in line with where it was [in June 2008], so it has stabilised," he said.
He conceded market share growth had been "marginal".
Coles's owner, Wesfarmers, posted a net profit of $879 million for the first half of the 2009 year, up 46 per cent on the same half a year ago when earnings came in at $601 million.
Yesterday's result included $125 million in write-downs and provisions and was largely driven by high coal prices.
Its retailing division has been buttressed by its homewares operation, Bunnings, which lifted its contribution to earnings by 14 per cent to $363 million.
Nonetheless, the group cut its half year dividend from 65c to 50c, a decision made against the backdrop of gradually decreasing debt pile that was taken on to pay for the $20 billion purchase of Coles.
Wesfarmers said its borrowings had fallen from $9.7 billion to $6.8 billion by the end of December after its recent capital raisings.
The gradual turnaround proclaimed by the group at Coles meant sales in supermarkets and liquor stores opened for a year or more rose by 3.8 per cent in the second quarter, well below Woolworth's sales growth of 7 per cent for the same period.
Mr McLeod hopes to narrow the gap with the company's rival by rolling out a new store format to appeal to customers. He is working on a series of pilot stores that will help determine future look and layout.
The pilots, which began in Melbourne in October, are running in four Melbourne stores.
The Ivanhoe, Werribee, Burwood East and Port Melbourne stores will help the company decide whether customers want a smaller range of products on shelves, a larger range or an increase in budget-price own-label products.
They will compete with Woolworths, which has had its new format stores open for more than a year. A Coles rollout is still up to a year away.
When asked whether the company might have budget-style stores for lower socio-economic areas as well as upmarket versions, Mr McLeod said "they will be variations on a theme".
He added that in the current environment "consumer confidence has been dented … and people will be looking for value".
Guy Russo, the new head of the company's discount department store Kmart, said he had a big job ahead of him to turn around the 183 stores, which reported negative real sales growth in the half year to December.
"I think it would be fair to say if you looked across the whole 12 months of Kmart that it has got a couple of months with its head above water and many months with its head below," Mr Russo said.
Wesfarmers shares closed up 8c at $16.23.
Source: SMH
Heinz's new appointment...
Peter Widdows has been appointed to the role of Regional CEO of Heinz Japan, Australia, New Zealand, and Korea, following six years as the Managing Director of Heinz Australia.
Suzanne Douglas will return to Heinz Australia as Managing Director, reporting to Mr Widdows.
Mr Widdows was appointed as the Managing Director of Heinz Australia in February 2003 and has led its successful transformation into one of the most successful businesses in the Global Heinz portfolio, with sales growing 50 per cent and profits growing more than fivefold during his tenure.
Ms Douglas joined Heinz six years ago as the General Manager of Marketing for Heinz Australia and is currently Chief Marketing Officers for Heinz UK and Ireland.
Source: RW Bites
Campbell's reports sales decline...
Campbell Soup Company, the owner of Arnott’s biscuits and world’s largest soup maker, has joined the growing list of global food manufacturers realising volume declines.
The American-based manufacturer saw sales fall 4 per cent for the second quarter due to the negative impacts of volume and mix (-3%), currency fluctuations (-5%), divestitures (-2%) and increased promotional spend (-3%). These factors were partially offset by price and sales allowances, which provided a 9% boost.
Douglas Conant, Campbell’s President and Chief Executive Officer, reported that sales for their soups had been strong as consumers looked for convenient meal options from supermarkets. “For the first half, we delivered strong sales growth in our key value-oriented businesses, including US soup and sauces. US soup sales increased 8 per cent with growth in all formats: condensed, ready-to-serve and broth. As planned, we invested in our US soup portfolio and supported three major new product introductions,” he advised. “Beyond soup, other parts of our portfolio, such as beverages and premium breads, continued to grow but at slower rates during these difficult economic times. Overall, the categories in which we compete are growing, and our businesses are performing well within those categories.”
“We remain encouraged by the successful launches of ‘Campbell’s Select Harvest’ and ‘Campbell’s’ ‘V8′ ready-to-serve soups and ‘Swanson’ stock. ‘Prego’ and ‘Pace’ sauces also benefited from consumers eating more meals at home,” he added. “Overall, we are pleased with our performance in the quarter, especially considering that currency negatively impacted results and major retailers significantly reduced inventory levels. While these inventory reductions have impacted our US soup, sauces and beverages businesses, encouragingly consumer takeaway has outpaced sales growth.”
On a currency-neutral basis, the company now expects to deliver sales growth of between 3 and 4 per cent for the year; with adjusted earnings before interest and tax growth slightly below its long-term growth target of between 5 and 6 per cent, as the impact of one less week, higher marketing spending and increased investment spending in Russia and China take their toll.
The company reported significant growth in Arnott’s, although the biscuit brand’s sales declined due to the divestiture of certain salty snack foods brands in May 2008 and the unfavourable impact of currency. Excluding these factors, sales increased due to growth in all three segments: savoury, chocolate and sweet.
In their International Soups, Sauces and bevergaes division, their Asia Pacific sales rise was primarily due to gains in the Australian soup business and Malaysia.
Mr Conant remained bullish about the future as the value-oriented section of their portfolio is anticipated to spur growth. “Campbell remains well positioned during this economic downturn due to the focussed and value-oriented nature of our portfolio, the relative vitality of the categories in which we compete and our position within those categories. Despite broad economic challenges, we are optimistic about the second half of the year,” he concluded.
Source: AFN
Global
News:
US: 'Kid-Adult fusion' trend gathers pace...
Independent restaurant operators in the US are leading an emerging “kid-adult” fusion trend by promoting adult-style offerings to kids in greater numbers. Their menus target kids with smaller portions of premium steaks, fresh fish, locally-sourced healthy foods and bolder ethnic flavours that are usually the domain of adult palates.
These are the findings of the 2009 Kids’ Marketing & Menu Report released by foodservice consultants Technomic.
“The ability to develop menu offerings around a local, organic or natural culinary focus is a trademark of independent concepts that operate in the higher-end, fine-dining realm,” Darren Tristano, Executive Vice-President at Technomic. “Parents who value these attributes in food are beginning to steer their children away from mac-and-cheese and chicken finger entrees in favour of fresh seafood, baked or grilled chicken, organic vegetables and premium cuts of meat. This trend has notable trickle-down potential for the Top 250 chains.”
Among menus of the Top 250 chains, pasta, sandwiches and chicken are the most popular children’s lunch and dinner entrees, the report found. Dips, such as barbecue, honey mustard and sweet-and-sour sauces, were often used to impart flavour and differentiate offerings from the competition. Healthy offerings were on the rise in children’s menus, with a surge in the number of listings of vegetables and fruits, healthy beverages and smoothies, and items described as natural or organic. There is also a growing preference for bolder, spicier flavours like teriyaki, chilli and chipotle. Children are clearly beginning to broaden their accepted flavours beyond those found in traditional American fare.
Some of the most common tactics used by limited-service chains to attract families with children are the seprate menus for kids’ combo meals, availability of toys and prizes, websites with online activities and birthday clubs and play areas. While full-service chains often promote “kids eat free” nights, birthday clubs and family-sized to-go meals. Seventy-eight per cent of the Top 250 chain restaurants now have menus specifically for children, with the occurrence higher for full-service restaurants (88.1%) than for limited-service outlets (70.5%).
The survey follows previous indications of a broadening of diets amongst Gen Y and teenagers and suggestions parents are now exerting greater control over what their children eat.
Source: AFN
US: The contrasting fortunes of retail channels...
Shopping and buying less, American consumers are increasingly relying on supercentres, according to The Nielsen Company. Nielsen’s analysis of 2008 unit sales found budget-conscious consumers increased their supercentre spending across nearly every department, including dairy, dry grocery and prescription drugs.
According to Nielsen’s research, the ’supercentre’ channel - which includes the likes of the world’s largest retailer, Wal-Mart - was the only retail channel to post overall unit sales growth at one per cent. While four retail channels (drug stores, supercentres, club stores and dollar stores) recorded sales gains from consumers shifting department purchases across channels, these gains were offset by consumers cutting back on purchases for an overall decline in unit sales.
“Mass merchandisers and grocery stores are feeling the impact of the supercentre,” said Todd Hale, senior vice president, Consumer & Shopper Insights, The Nielsen Company. “Where we really start to see the expanding reach of the supercentre is in grocery, where a shift is occurring in everything from dairy and produce to meat and frozen foods. While the grocery channel has traditionally been viewed as recession-resistant, it is not recession-proof.”
Grocery Gains
The grocery channel was not without bright spots. Tens of thousands of conveniently-located grocery stores helped some grocers grab general merchandise sales from mass merchandisers, dollar stores and other channels. Promotions tying in-store spending to discounted petrol prices helped the channel capture sales from convenience and gas retailers. “Grocery stores have found gas promotion tie-ins to be very successful in capturing shopper trips, especially when high gas prices were putting a serious crimp on consumer spending for the first eight months of the year,” Mr Hale advised. A marketing idea Australia’s two largest supermarket chains are well aware of.
2009 Expectations
Not surprisingly, most major industries are struggling with lower consumer spending and will continue to do so as unemployment increases in 2009, but grocery retail will be better shielded than most.
“All retail channels are being impacted by consumers cutting back on purchases to cope with tough economic conditions,” Mr Hale noted. “The good news for traditional retailers is that this means consumers will be spending more time at home, serving up opportunities for at-home consumption of food and non-food products.”
Source: AFN
UK: Michelin starred restaurants taking on the supermarkets...
A number of Michelin-starred restaurants in London are slashing the prices of set course menus at lunch and dinner to as low as £12 (A$26.50) in order to entice consumers confronted with a recession and new ‘luxury’ meals from supermarkets.
Tesco, Asda and Marks and Spencer are all heavily promoting ‘restaurant quality’ meals for two in the lead up to Valentine’s Day, a move clearly designed to tap into the ‘eating in’ trend picked up by market researchers around the world.
Tesco is seeking to undercut Marks and Spencer who were first to introduce the concept last year at around £10 (A$22) for a three course meal for two and a bottle of wine. Tesco’s offer for two incorporates a selection of the Finest range meals (Tesco’s most expensive private label option) with a separate side dish, a dessert and a bottle of wine for £9 (A$20) - less than half the price if bought individually.
The introduction follows the success of a small trial of the deal before Christmas that has gone on to boost sales of luxury convenience foods, Tesco advised. Stores that ran the initial trial reported a 20 per cent increase in sales of convenience meals.
The trial was in response to customer research highlighting that people don’t want to give up “the good life” because of the credit crunch and are finding ways of continuing to enjoy life’s little luxuries. Instead of going out to dine in expensive restaurants many are occasionally treating themselves to top of the range meals and wines which they are enjoying at home but for far less money, the UK’s largest retailer claimed.
Customer feedback also found that most men wanted a red meat option and a good quality wine as part of the package, while the most important requirement for women was a chocolate dessert included in the offering.
Source: AFN
US: Starbucks enters the value zone...
US coffee chain Starbucks is to roll out its first value menu in order to recover from recent losses due to the recession, changing customer habits and growing competition from fast-food chains. With the new value menu, customers will get a latte with coffee cake or a drip coffee with hot sandwich for USD3.95. The food and drink ‘pairing’ programme will be rolled out in March in all company-owned US outlets all day. Terry Davenport, Marketing Chief at Starbucks, said: “The most important definition of value is the one our customers have. In this environment, it's about everyday affordability.” Howard Schultz, Chief Executive of Starbucks added: “I strongly believe we are going to be in this environment for years. It is a reset of both economic and social behaviour." Starbucks’s effort is an attempt to regain market share from competitor McCafé, McDonald’s.
In late January, the chain said that sales at US outlets open at least a year fell 10% in its first fiscal quarter, while net income dropped 69%. The company also revealed its intent to shut 300 units.
Source: Planet Retail
US: A Way to save and still have crisp clothes...
TOUGH economic times are forcing everyone to find ways to do things a little differently
For consumers, that means finding creative ways to stretch a paycheck, like shopping at less expensive stores or machine-washing clothes that would normally be dry cleaned.
For retailers, it means helping customers cut back — even if it means going outside their comfort zone.
A new partnership between the retailer Ann Taylor Loft and P&G is turning stores into launching pads for two new products, Tide Total Care and Downy Total Care. Both products claim to cut down on dry cleaning bills by helping clothes look new for a longer time.
The store chain is handing out free samples and coupons to customers who buy machine washable clothes, while posters and decals throughout the stores alert customers to the products’ benefits. The retailer has also produced an eight-page magazine, available free in its stores, that provides tips on how to keep clothes looking fresh (hint: they require Tide or Downy Total Care).
The arrangement may be the first of its kind between a consumer packaged goods company and a fashion retailer, most of whom avoid associating themselves with laundry detergent. But dwindling store traffic and budget-conscious shoppers have retailers like Ann Taylor experimenting.
“The partnership between Loft and P.& G. is not typical, and we admit that at first we had concerns,” said Robert Luzzi, chief marketing officer of An Taylor Stores. “But we decided that the partnership at this time was incredibly relevant for our clients in this pretty tough economy.” The promotion started in September and will run through November.
Ann Taylor operates about 360 of its stores and more than 500 of its lower-price Loft outlets in the United States, but announced plans this year to close about 117. (The company’s stock has dropped by about 10 points in the last year.) Overall sales in the women’s apparel category have dropped by about 3 percent, according to the research firm NPD.
“The economy is fairly tough right now, and we want to deliver value for our clients,” Mr. Luzzi said.
For Procter & Gamble, which is based in Cincinnati, the introduction of the Total Care line represents years of research into preserving the shape and color of clothes after repeated washes. The ads assert that they keep clothes looking new for up to 30 washes.
At a time when people are looking to save money, Procter & Gamble sees an opportunity to attract customers who will gladly machine-wash clothes they formerly dry cleaned if there is no loss in quality.
“Women and families can’t afford to buy clothes as frequently, and are searching for ways to keep clothes looking newer longer,” said Kash Shaikh, a manager of communications for the North American fabric care unit of Procter & Gamble. “Women spend $1,500 a year on dry cleaning, and 65 percent of those clothes are actually machine washable.”
The company is spending $60 million to market the new products, the largest marketing investment ever in its fabric care category, Mr. Shaikh said. Tide accounts for $3.2 billion in annual sales, and Downy about $1 billion, he said.
Pairing a retail brand with a product like detergent is “definitely a new and cool idea at this level,” said Mike Gatti, executive director of the National Retail Federation, a trade group. "Target did it years ago by making ads that featured lots of different brands, but this is different because it’s a high-end clothing store.”
It is a message that could resonate now, which would be good news for struggling retailers like Ann Taylor, said Marshal Cohen, chief industry analyst at NPD.
Retailers are looking “for any reason they can give customers to come in,” he said. “This message is different. It says, ‘We understand you want clothes that are going to last.’ ”
In addition to the partnership with Ann Taylor, the introduction includes three TV commercials — one for Downy and two for Tide — and special events and Web promotions. P.& G. is also running print ads, some of which include the Ann Taylor brand, for the first time in fashion magazines like Elle and InStyle. The TV spots are running on networks like NBC, ABC & CBSS.
The ads for Tide were created by Saatchi & Saatchi in New York, part of the Publicis Groupe; ads for Downy were created by Grey, part of the WPP Group.
Procter & Gamble has also enlisted the help of fashion arbiters like Tim Gunn from the Bravo series “Project Runway” and the celebrity stylist Jorge Ramon, who make several appearances throughout the campaign. The idea is to assure women that they do not need to spend a lot of money on dry cleaning to keep their clothes looking stylish.
Indeed, Procter & Gamble said it approached Ann Taylor because the stores appealed to the target audience for the new detergents: budget-conscious women who are interested in fashion.
“This idea of fashion combining with value, that’s why Loft was a perfect fit for us,” Mr. Shaikh said.
In addition to the giveaways and signs, Ann Taylor Loft will hold events around the country in coming months where women will have a chance to get personal styling tips from Mr. Ramon.
Source: NY Times
Belgium: Supermarket freezes Unilever order over pricing dispute...
Belgium’s second-largest supermarket chain, Delhaize, has placed a halt on orders of around 300 Unilever products following a break-down in pricing negotiations.
The consumer goods giant, which reported sales growth of 7.4% last week despite flat volumes, supplies Delhaize with just under 500 different products in a wide range of categories and the failure to come to terms suggests tensions between retailers and manufacturers are on the rise. With supermarket chains keen to push their private label products and lower prices to attract cost-conscious consumers, the relationships between manufacturers and retailers are likely to be stretched in coming months.
Unilever spokeswoman Liesbeth Rogiers told Reuters on Tuesday that the two parties has failed to find a middle ground in their discussions but hoped a deal could be reached during the year. “We did not reach an agreement during our annual negotiations. The price of goods is a part of that agreement,” she said.
The Belgian supermarket chain reported in a statement yesterday that Unilever’s requests were “unprecedented”, admitting that the relationship with the supplier was “tense.” Delhaize suggested that Unilever was asking for price hikes of up to 30%, a figure disputed by the manufacturer - who has said the price increases are around 2.5% and have already been accepted by other Belgian supermarkets.
Both companies are blaming each other for the failure of negotiations, with Delhaize claiming they have never been “confronted with this attitude” and Unilever arguing that Delhaize are “being really tough on negotiations.” The breakdown has also been caused by disagreements on the in-store promotion of products.
How the dispute pans out will be intriguing, after all Unilever is one of the world’s largest supermarket suppliers. Their sales in Belgium will obviously be affected while the dispute simmers, but can Delhaize afford the likely backlash from customers expecting Unilever brands such as Dove, Lipton and Knorr soup to be offered at a major supermarket?
Source: AFN
| 
