December 31, 2007
Food and Drink
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Waking up and discovering I was in for a cold day cold by Californian standards, my thoughts turned to how nice it would be to have a cup of that warm dark chocolate drink, Cocoa with its sweet aroma slowly trickling down my throat; a picture of my childhood Minnesota days flashed before me my mother pouring from my thermos steaming hot cocoa into my cup sitting next to my liverwurst sandwich.
Yep, you guessed it! Even before my micro wave beeped informing me that my warm delicious brew awaited me, my inquisitive mind flashed the question before me, Where did this sinfully delectable drink I was anticipating slowly sipping while letting the aroma from its steam seep through my nostrils originate?
So, I called Google and asked,” Just where did this delectable drink, called cocoa originate?” As always his reply was not only informative it was surprising. “Cocoa, he replied, cocoa derived from the Aztec word cacahuatl; the Olmecs, the oldest civilization of the Americas (1500-400 BC), were probably the first users of cocoa, followed by the Maya, who not only consumed cacao-based drinks made with beans from their plantations in the Chontalpa region; who drank a drink called ‘chocolatl’ made from roasted cocoa beans, water and a little spice.” “Furthermore,” he added,” the cocoa were quite valuable; the Maya’s not only used the beans as a currency, they were given as gifts at ceremonies such as a child is coming of age and at religious ceremonies.”
So the next time you set with a friend drinking cocoa on a cold day, you can tell them, that delectable warm dark drink seeping between your lips and trickling ever so slowly down your throat as you savor its sweet aroma and taste, It not only has historical value…It has economical value as well. Well at least to the ancient cultures and to today’s modern coffee houses.
Writing has become an avocation of mind; the more I write the more I want to write. Especially on subjects that have histoirc meaning; they can be made entertaining as well as informative.
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December 30, 2007
Food and Drink
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Well I have been looking at some data from 2000 and 2001, economic data. And some of the hot trends then are certainly changed now. For instance in August of 2000 in Chain Leader News for QSR-Quick Service Restaurants, national sandwich chains were losing market share to independents, nearly 41% over the previous two years and as much as 9.1% in the first and second quarter of 2000. This trend was changed in part by Wendy’s open late program and the recession where Brand Names and Franchises always thrive. Back then Thursdays and Fridays were the busiest days. 19% of revenue coming from Thursday and 18.5 from Friday, primarily due to the biggest shopping day of Thursday due to grocery ads and fast food coupon inserts. Friday due to increased spendable income from cashing paychecks. A trend we also see in our washing business on the consumer side of things.
Fast Food back then drew in a generally married customer 56.7 % of the time and singles 33% with divorcees only 10% of the time. Back then the customer was generally white 83% of the time and had a sizeable household income of 50K plus nearly 30% of the time and the second highest percentage of revenue came from the customers whose household income was 75K plus. Middle Class and Upper Middle class people buy more fast food, they also tend to get more car wash services and pay more for add-ons too. Lunch was the favorite meal 57% of customers came in at lunch back in 2000. Unfortunately they were spending money they should have spent to wash their car. You see, QSRs are a good weather meter of the economy. In August of 2001 QSRs all reported lower same store sales with only Wendy’s reporting only modest same store sales, with lower profits and higher cost to stay open later. That strategy worked as it is working for us running multiple shifts and washing at night, thus employing more people. McDonalds reported lower than expected same store sales and actually thought they would go into the car wash business. It was not until this month that they changed their minds and decided they would not enter this industry. Good idea, because from what I have read about Ray Kroc the team he left behind was not quite the tiger he was and our team is tougher that Ray ever thought he was.
http://www.carwash.com/news.asp?N_ID=31919&mode=4
I guess the new motto this year is “Core Business” like the Ford Grandson said, “We will be getting back to our core business.” Probably right after all the lay offs? Think on this.
Lance Winslow - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/
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December 29, 2007
Food and Drink
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Why Don’t Supermarkets Have Brands?
It may come as a surprise to the category of supermarket chains to learn that almost to a fault, none of them owns a brand. They think they do, but they do not. The proof, as they say, is in the pudding. The only reason to invest in the building and maintaining of a brand is to increase your preference or increase your margins. Against that acid test, supermarket chains come up sucking hind teat.
There are a few major exceptions, and we will disclose them as we proceed, but the battle for supremacy in the supermarket gambit has come down to location, location, location. Look around at your own neighborhoods and you will quickly see the reality of the situation. Supermarkets, like their poor stepsisters the pharmacy chains, are in a rush to build more and more stores. They realize that in order to dominate a local market, they need to be the closest purveyor to the shopper’s home. That is not exactly the pure definition of a brand is it?
The Business Model Tells the Story
They recognize this fact in their bones which is why their business model has them scampering to build new stores as close as possible to developing residential areas. Yet, they pretend to themselves (and their stockholders) that they have a brand. To Harris Teeter, ACME Markets, Lowes Foods, A&P, Pathmark, PUBLIX, GIANT, Win-Dixie and the Piggly Wigglies of the word I have a short and pointed warning Watch Out! Wegmans is coming!
Harris Teeter, for example, believes they have a brand. They believe they are “the upscale choice” but deep down they recognize the fallacy in that claim as they build more and more stores in more and more neighborhoods. They realize that their brand is not a destination, and that aside from the “brand” of habit, shoppers will not ride by a competitor’s store on a regular basis to shop at a Harris Teeter. They know that their store does not represent a “destination” there is no sense of arrival, no sense of specialness and therefore no REAL brand.
Wegmans is a Juggernaut
What makes Wegmans so formidable? They learned their brand lessons well and are playing brand hardball. Borrowing on the specialty marketers like Whole Foods, Fresh Market and Bread & Circus, and the upscale brands of Four Seasons and Ritz Carleton, they recognized that brands that differentiated the customer enabled these brands to become destinations. They became a magnet for those seeking specialness, specialty, high quality foods, and experience within a geographic area. When the shopper believed they were a more discriminating shopper(what we call a Brandface),these shoppers were willing to inconvenience themselves by traveling a greater distance to satiate that self-identifying need. They would also be willing to pay higher costs for that same self-identification.
Remember that brand, the kind of brand that makes a category player a destination, is not a description of the store, it is the self-description of the customer who they believe they are. The greater the store’s ability to satiate that self-description, the more powerful the brand. Does the Harris Teeter or Publix shopper believe they “have arrived” when they shop? Do they see themselves as smarter, mores discerning and erudite? Not according to Harris Teeter or they would not need to build a new market every 1.8 miles!
Think Differently
Wegmans took the lessons from Fresh Market and Starbucks and recognized that the modern grocery shopper wanted to have an experience when they shopped. They believed that shoppers wanted to have access to and be surrounded by “the world of fine choices” even when they were simply shopping for Campbell’s Soup. The baby boomers, Gen-x and Gen-y customers believe the shopping experience should be as entertaining as utilitarian and that the yearning fordiscovery was woven into the fabric of their being.
Does it cost more to create a Wegmans than it does a Lowes Foods? You bet it does. It requires an investment in brand, brand management, architecture, interior design, customer anthropology, and world-class buyers. However, these costs are dwarfed by the short term solution of the escalating construction costs of duplicating sores in repeated markets within saturated residential areas.
The Category’s Problem
Why then, is the supermarket category so stale and delinquent in its own space? It is not because they lack talented people or smart planners. It is because they have bought into an old and stale idea of brand. They have come to believe that they can differentiate themselves from the competitive set by restating generic category descriptions like fresh, quality, selection and fair prices. They think they can OWN a position that is the providence of the entire category like, “the beef people.”
Where is the Future?
What does this mean for the future of the category? It means the stakes are being raised because the category is demanding more. The real problem for the major players can be found in the existing store space. The sooner they invest in their brands, the better for their shareholders because an investment in today will ultimately cost less than a forced investment tomorrow. Experience and discovery has as its table stakes; larger more open square footage, broader specialty departments, and an understanding of the preceptive fabric of the target audience. This means existing store locations may be inadequate in the future.
Bigger is not necessarily better, it is only better when bigger incorporates entertainment, discovery and experience. These are the hallmark of the busy and demanding shopper of today, as well as the shopper of tomorrow. Will a Starbucks coffee bar differentiate your brand? Not on your life. Instead of adding a Starbucks coffee bar to your offering, ask yourself why the customer wants such an addition? Who that shopper believes they are and what other offerings might satisfy those beliefs. The answer to these questions might lead the chains to build Wegmans copies. However, without the brand knowledge and management of a Wegmans, they will simply seem like artifice and be nothing more than pretenders to the throne.
Wegmans has brand permission and that permission should spell fear in the souls of other chains and even the specialty retailers like Dean & DeLuka, Whole Foods, and Fresh Market.
Tom Dougherty
CEO, Senior Strategist at Stealing Share, Inc. (http://www.stealingshare.com) Tom began his strategic
marketing and branding career in Saudi Arabia working for the internationally
acclaimed Saatchi & Saatchi. His brand manager at the time referred to Tom
as a “marketing genius,” and Tom demonstrated his talents to clients such as
Ariel detergent, Pampers and many other brands throughout the Middle East
and Northern Africa. After his time overseas, Tom returned to the US where
he worked for brand agencies in New York, Philadelphia, and Washington, DC.
He continued to prove himself as a unique and strategic brand builder for
global companies. Tom has led efforts for brands such as Procter & Gamble,
Kimberly Clark, Fairmont Hotels, Coldwell Banker, Homewood Suites (of
Hilton), Tetley Tea, Lexus, Sovereign Bank, and McCormick to name a few. Contact Tom at tomd@stealingshare.com.
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