June 17th, 2013
The IHOP and Applebee’s parent, DineEquity blames an unstable economic environment and aggressive value promotions by competitors for their nearly 42-percent decline in first-quarter net income.
At Applebee’s domestic systemwide same-store sales declined 1.3 percent for the quarter, reflecting a drop in traffic that was partially offset by a higher average check. IHOP’s domestic system-wide sales also decreased 0.5 percent for the same reasons.
Reported by NRN.com, the decline was partly based on the company’s shift to an almost all-franchised operation. During the first quarter, DineEquity owned significantly fewer Applebee’s restaurants, most of which have been re-franchised. And one franchisee filed for bankruptcy protection last month (reported by us here).
Said Julia Stewart, DineEquity’s chair and chief executive, “The industry was clearly faced with macroeconomic headwinds which contributed to viability and variability during the quarter”.
June 13th, 2013
There are many celebrity owned and/or licensed spirit brands on the market today.
From Dan Akroyd‘s Crystal Head Vodka (complete with creepy skull bottle) to Justin Timberlake‘s 901 branded line of tequilas, the category is suddenly hot.
What will ultimately set them apart from other spirit brands, at least initially, will be the amount of advertising (to ensure consumer awareness) and how well they are liked by their target market. For instance, the average vodka drinker is faced with at least ten vodka brands in each segment: budget, middle of the road and high end. I believe that, assuming there has been enough advertising to create an awareness to link the branded spirit to the celebrity, fans of the celebrity will feel compelled to purchase the brand based solely on the fact that they feel a sense of obligation and loyalty to that celebrity right out of the gate… Before even tasting the product!
But unfortunately for the celebrity that won’t guarantee repeat purchases! And as the story goes, some products will be of quality and others will be pulled off the shelves before most of us even get a chance to taste them!
June 11th, 2013
As part of our continuing efforts to serve our clients, we are attending the “Think Asia, Think Hong Kong” event in NYC sponsored by the Hong Kong Trade Development Council.
Several heavyweight speakers will discuss topics like:
- Hong Kong – The Gateway for Chinese Outbound Investment
- Selling to China and throughout Asia
- The Perspective from Chinese Enterprises
Our goal is pretty simple: keep our international bona fides current and helpful to our clients.
June 7th, 2013
Disproving F. Scott Fitzgerald’s famous dictum that there are no second acts in America, Italian dairy giant Parmalat will reenter the US market after purchasing Lactalis American Group, Inc. (LAG) for $904MM (€715MM).
In 2004, Parmalat imploded when massive debt and fraud were discovered by European regulators. Both firms are owned by the Belgian conglomerate BSA-International, so technically speaking, this is just a reshuffling of internal monies (the company denies it). The move will also strengthen operations in Latin America where Parmalat currently operates only in Colombia and Venezuela. It will now be able to include Brazil, Argentina, Mexico and other high-growth territories.
In the US, Lactalis is primarily in the high-margin cheese segment, especially soft & fresh cheeses with brands like President, Galbani, Sorrento, Precious and Mozzarella Fresca. Parmalat hopes to introduce some of its Italian brands to the US market as well.
 Parmalat is a subsidiary of Lactalis (France).
June 6th, 2013
Some restaurants we talk with are hinky about having their licensed products in “dollar stores,” but the segment has gone from the place where brands go to die to one of the rising players in the frozen food channel.
Now Family Dollar Stores is partnering with the McLane Company, a provider of frozen foods for foodservice outlets. A former subsidiary of Wal-Mart Stores now owned by Berkshire-Hathaway, McLane will be offering “local” solutions to Family Dollar’s 7,200 outlets across 45 states. Additionally, McLane will help Family Dollar set up a national supply chain system to handle its growing offerings of frozen food. Originally dollar stores carried discontinued items and lines, but now are figuring prominently in the strategies of CPG houses looking to attract the value-oriented customer.
Meanwhile, ConAgra has been acquiring companies in order to increase its ability to navigate the store brand world, and has purchased Wisconsin-based Kangaroo Brands’ private label pita chips business (Kangaroo will continue to own its pita bread & frozen sandwich operations). The giant food marketer has been on something of an acquisition spree during the past two years after its bid to buy giant Ralcorp Holdings failed to happen.
In addition to Kangaroo, it has already bought up Odom’s Tennessee Pride (breakfast sandwiches & sausages), Del Monte Canada (packaged veggies, fruits & snacks) and National Pretzel Company (private label pretzels). The strategy appears to be the acquisition of a market basket of targeted manufacturers rather than a large holding company like Ralcorp.