Today Peter A.J. Cross graduates from Suffolk University.
Congratulations!!
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Broad Street Licensing Group Food News
Congratulations, College Grad!
May 19th, 2013
Breaking News: Applebee’s Franchisee Goes Belly-Up
May 17th, 2013
Despite the rosy press releases coming out of the restaurant industry, it’s not surprising us to hear that at least eight Chicago Applebee‘s will be shuttered after a franchisee there filed for Chapter 11.
AppleIllinois (based, however, in Kentucky) is apparently looking for a buyer or buyers to take over 25 remaining units. The closed units were built after 2005 in areas that never attracted the kind of traffic needed to succeed. Translation: they were in shopping malls and other sites hit hard by the Great Recession. We should point out that Applebee’s has over 2,000 other units, most of which are franchised.
Regular readers of this blog know that we’ve been saying for months now that some chain restaurants are really dead men walking, while others are struggling to keep profits up by squeezing their suppliers, jiggering their menus (often in the name of giving consumers lighter fare, which just happens to be cheaper to produce), and pretending that the good times are just around the corner again.
We continue to marvel, however, at the restaurants who refuse to support their brands at retail, or fumble the ball when given a chance to do so. It may not be rocket science, folks, but you can’t reach consumers at retail if you aren’t there.
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Processed Foods Are Good for You. No, Really
May 16th, 2013
Image source: http://www.lallemand.com/
Lallemand/American Yeast Division brought in two eminent nutrition experts at last year’s 8th annual Innovations in Baking seminar to defend processed foods.[1]
They pointed out how the enrichment of flour, iodized salt, and vitamin D fortification in milk eliminated deficiency diseases like pellagra, rickets, goiter, and beriberi. These conditions were common across North America prior to World War II, when enrichment was first required under War Food Order No. 1.
Currently up to 50% of vitamin B1 & B2, along with nearly 60% of vitamin D in our diets comes from fortified foods.
While some critics call for a return to minimally-processed food, the panelists maintained that a lack of vitamin D has been linked to osteoporosis, hypertension, cancer, and diabetes.
Recent innovations in this area include the increase in vitamin D2 in bakers yeast through UV light exposure.
While processed foods have seen an increase in dietary fiber and other attributes associated with minimally-processed foods, the trade-off has been an increase in sugars, sodium & saturated fats. The food industry is under pressure from the “clean label” movement that wants to eliminate or severely cut back additives, including beneficial ones.
[1] Prof. Connie Weaver, head of the department of nutrition science at Purdue University, and Victor Fulgoni III, PhD, SVP at Nutrition Impact, LLC.
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The End of Highway Beautification?
May 15th, 2013
It has been nearly a half-century since President Lyndon Johnson’s wife, Lady Bird Johnson, used her influence with the president to push through the Highway Beautification Act of 1965.
The law banned billboards, roadside restaurants, gas stations and other unsightly commercial enterprises on all Interstate highways being constructed in the 60s to move America quickly around the stoplights and strip malls that once lined the roads from here to there.
One exception was toll roads that were part of the national Interstate system, where “rest stops” meant motorists didn’t have to exit the highway to find food & fuel. States have found them to be goldmines, and now several are pushing for Republican Senator Rob Portman of Ohio’s amendment 1742 to the American Energy and Infrastructure Jobs Act 2012. It would allow states to construct restaurant complexes alongside Interstate highways where they’re currently banned. Joining Senator Portman in the House were Ohio Congressmen Steve LaTourette (Rep) and Dennis Kucinich (Dem) with their own bipartisan amendment.[1]
The bill passed the House in February 2012, but has not been adopted into law.
One study claims local restaurants will likely see their business plummet by as much as 44% if drivers no longer need to get off to eat.[2]
Not surprisingly, a powerful consortium of lobby groups working together under the banner of the Partnership To Save Highway Communities has coalesced around fighting this legislative end-run. It includes the Petroleum Marketing Association of America, the National Association of Convenience Stores, the National Association of Truck Stop Operators and the Society of Independent Gasoline Marketers of America. The groups says it represents 97,000 “highway-based businesses” employing up to 2 million workers who will be harmed if the legislation goes through. The National Restaurant Association is monitoring the fight, too.
[1] The House version is known as the Surface Transportation Bill.
[2] Source: Virginia Tech’s Transportation Institute.
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The Digital Coupon User
May 14th, 2013
We hear all the time how the shopper of tomorrow will only want digital coupons.
Well, a new study will put some teeth into that assertion.[1]
Out of nearly a quarter of a millions shoppers studied, digital coupon users—
- make 22% more shopping trips per year than the average shopper (69 vs. 57 trips)
- spend 23% more per trip ($55.05 vs. $44.87)
- spend 49% more annually ($3,803 vs. $2,545) and
- make 48% more “stock up” trips (18.6 vs. 12.6)
What’s more, research showed digital coupon users plan their trips to the store: 62% plan on grocery buying within 2 days of printing their coupons or saving them to a loyalty card, with 43% of them planning on shopping within 24 hours. When asked “when do you plan to shop next?” they answered:
- 18% that day
- 25% planned on shopping the next day
- 19% within two days
- 22% within 3-7 days
- 11% planned to wait at least 7 days
Estimates are nearly 56MM American consumers are now using online coupons (25% of the population). As one might expect from avid computer users, household incomes and education levels surpass those of newspaper coupon clippers and the general population.[2]
[1] Source: GfK Knowledge Networks in a study of over 200,000 shoppers commissioned by Coupons.com.
[2] The overall household income of consumers using digital coupons is $96,900, 20% greater than the U.S. average and 20% above that of conventional coupons; 38% are college-education vs. 30% those who use printed coupons vs. 27% of the general population.
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What Will Tomorrow’s Restaurant Consumer Look Like?
May 13th, 2013
With many restaurants barely keeping the doors open in the current economy, growth is an elusive goal.
So a study identifying the restaurant customer of tomorrow may indicate where restaurants will go.[1]
The top three demographics reportedly will be:
- consumers over 55
- those under 11
- Hispanics
This isn’t exactly news.
Numerous sources have been trumpeting the US’s aging population, but the study says these groups are all eating out more and are looking for products aimed at their needs. While the 18-24 year old group spends the most per capita, it is shrinking as a percentage of population.
Hispanic births outpace non-Hispanics 4-1, which would indicate a lot more children under 11, too.
Tastes are unexpectedly changing as well: Italian, Spanish and Thai trump both Mexican and Chinese.
Among other trends identified are:
- solo dining is increasing
- snacking at restaurants[2]
- smaller portions
- more breakfast
Among the marketing trends identified are precious descriptors like “Copper River Salmon,” Myer lemons or grape varietal names getting shout-outs.
Yawn.
[1] Source: Sloan Trends Inc. in a presentation at the 12th annual Research Chefs Association Annual Conference & Culinology Expo in San Antonio March 2012.
[2] The study says 40% of those surveyed claim they would buy a restaurant snack if it offered “a new flavor.”
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China World’s “Thirstiest” ABev Market Again
May 10th, 2013
This article says that, once again, China is the world’s top consumer of alcoholic beverages.
That’s not entirely surprising, since China is the world’s most-populous country with none of the religious or cultural barriers to drinking alcohol one finds, say, in India. Consumption was up 5% in the face of a slowing economy, with volume set to hit 5bn liters, while growth will be a robust 16% through 2016.* By comparison, India is third with 4.4bn liters, a full 55MM liters behind.
But does that mean bright prospects for Western booze companies?
Nearly 85% of the market is for beer, with a hefty amount going to home-grown breweries. And several spirits makers have found sales lagging in the Middle Kingdom. Cognac appears to be one of the few success stories, with Chinese consumers favoring it at banquets (often mixed with sugary soft drinks) and for gifts. Volumes were up 20% in 2011 with over 160MM bottles sold (up 6%). Both the North America (50.8MM bottles) and Europe (46.9MM) were far behind China for sales of this aromatic beverage.
(Our thanks to Liesbeth Buffels at Dirafrost for the heads-up on the lead article).
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*Source: Euromonitor.
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Playboy Spirits Makes Top Ten Launches for April
May 9th, 2013
This article in The Spirits Business says it all.
Playboy has licensed its brand for a line of vodka the will bear the distinctive Rabbit Head logo and name that says “party” and “fun” around the world. In fact, Playboy enjoys a global 97% recognition among consumers. The licensee VuQo is a Philippines-based company famous for the world’s only vodka distilled from coconuts.
Naturally, we’re pretty jazzed about this, since Broad Street Licensing Group brokered the deal.
Stay tuned for more news soon about Playboy and spirits.
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Another Story About Marketing Unhealthy Foods to Kids
May 8th, 2013
Before I begin, I warn that this is very much an opinion piece…
I am fed up with reading about various groups moaning because food companies are using well-known kids’ cartoon characters for marketing purposes. Here is my re-enactment of going down the grocery aisle with my kids when they were anywhere from 3 to 10 years of age: “Can we get —-?” One or both of them would say as they pointed to an unhealthy food item. “No”, I would reply. This would go on throughout our shopping experience. Was it annoying? Of course! But as a parent it is our job to say NO! I think the problem is less about the food companies and more about just bad parenting! After all, I don’t know many kids under the age of 10 going to the grocery store and purchasing their own sugary cereals and snacks for the week. It’s an adult who makes the decision to purchase these items!
Danielle Foley
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So You Think You Can Start a Food Brand?
May 7th, 2013
Thought I’d share a situation that recently came up involving a wannabe food brand and how lack of adequate, thorough research and preparedness will almost always result in an unsuccessful food program.
A gentleman called me the other day explaining that he has been working with an iconic rock musician to develop a line of branded food items (the brand was actually the musician’s initials), and wanted to discuss a potential food licensing program. It sounded intriguing at first: the musician has been around since the late 60′s, has a very distinct look and is pretty well-known within his genre (at least his band is very well-known). Additionally, the gentleman I was speaking with advised that he had been in the food business for the majority of his lengthy career, so I figured they must know what they’re doing, right?
I received some samples of two shelf-stable sauces that are currently being marketed online and at concert venues. While the sauces were delicious, that proved to be the end of the love affair for me.
Unfortunately, the (generic) glass bottles and caps along with the label artwork (a photo of the musician whose image is less than savory) and (boring) copy left very little to be desired; I won’t bore you with details of all the things that were wrong, you’ll have to just trust me on this one. Although discouraged, I decided to see if this could be salvaged and turned into a successful food licensing program. It only seemed logical at this point to request more information… Simple information, such as:
- What are the monthly sales figures for each SKU since launch?
- What are the demographics of target market?
- What are the past and future public relations and marketing efforts (any trade shows, appearances, etc..)?
- Any data stating the level of “brand” awareness for the musician, especially as he relates to food?
- What are the goals for program, i.e. to be distributed at specialty, mass, etc…?
The only thing I received were a few jpegs of the sauce labels and a photo of the musician holding a bottle of the product. I sent a second email requesting the same information but have not heard back from anyone. I can only assume that they have no such information. What a shame.
Danielle Foley
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