Using Food Stamps at Whole Foods

Posted on : 16-03-2010 | By : admin | In : business

A Salon article on how many “hipsters” are using food stamps to buy a lot of foodie-friendly products (arugula, of course, is the default reference) nicely illustrates the intellectual conundrums that poverty and government welfare present, especially when it comes to food.

Most basically, what is poverty? The article doesn’t go into much detail about the backgrounds or personal finances of its twentysomething urbanites, but it’s clear that none of them would be on food stamps unless they felt they had to be. Still, they are presented as coming from “educated,” and thus presumably economically comfortable, families.

But the central problem isn’t the fact that they’re on food stamps, it’s the stuff they’re buying with them: Japanese eggplant, mint chutney, raw honey, fresh-squeezed juices, “soy meat alternatives,” and gourmet ice cream. And it’s the stores from which they procure their food: Whole Foods (WFMI), Rainbow Grocery in San Francisco, and the Wedge in Minneapolis.

This “marks an interesting shift from the classic critique that the program subsidizes diets laden with soda pop and junk food,” says Salon writer Jennifer Bleyer on Pinched, the site’s recession blog. “But from that perspective, food stamp-using foodies might be applauded for demonstrating that one can, indeed, eat healthy and make delicious home-cooked meals on a tight budget.”

As always, the answer lies somewhere between the two extremes. Whether they are unemployed single mothers or young singles with pink Chuck Taylors and experimental facial hair, the best thing food-stamp recipients can do to both avoid criticism and live more healthfully is to avoid both the gourmet mint chutney and the Funyons. And it helps to wait until you’re back on your feet before you shop at Whole Foods. You can get plenty of inexpensive, healthful foods at your Safeway (SWY) or Kroger (KR).

Or, dare I say it, at Wal-Mart (WMT). You can always say you’re doing it ironically. 


How Bud Light’s Lame "Drinkability" Ads Came to Be

Posted on : 16-03-2010 | By : admin | In : business

What do you get when you hire consultants? You get a four-year-long campaign to convince beer drinkers of your product’s “drinkability.” A campaign that failed miserably, because, as the marketing executives at Anheuser-Busch (BUD) should have asked: Shouldn’t we assume drinkability, and work from there?

But they didn’t ask that; rather, they slavishly followed Cambridge Group’s advice to make “drinkability” the focus of A-B’s campaign for Bud Light, which according to Advertising Age is “considered a major factor in Bud Light posting the first full-year sales decline in its history.”

What’s interesting about Ad Age’s examination of the now-abandoned campaign is that the reporter, Jeremy Mullman, doesn’t even really address what was wrong with it. He just assumes as an obvious fact that if you have to market your liquid beverage as “drinkable,” you’re already behind.

Rather, Mullman takes on the question of whether consultants should even be involved in creating marketing campaigns, and if they are, how much power they should have. As I’ve seen close-up in several of the news media organizations I’ve worked for, overreliance on consultants (and focus groups) is the bane of any creative business. It happens because in-house managers (or editors) want to cover their asses. Hiring a consultant is a good way to outsource responsibility. If things go wrong, you can blame the consultant–hey, you followed the report!. But if they go right, you still look good–you hired the consultant!

Ad Age says fear-driven marketing executives, “skating on ever-thinner ice, are trying to bring a more scientific approach to a discipline traditionally heavily reliant on gut calls.” But science goes only so far in a business that relies on human connection. Gut calls can be risky, but business relies on risk for success. More importantly, gut calls are human. Consultants’ reports aren’t.

Consultants and focus groups can be helpful for things like analyzing demographics and forecasting trends. But when it comes time to actually communicate with people, you have to leave the science behind. People don’t respond to meaningless marketing jargon like “drinkability,” they respond to genuine communication. If “drinkability” is supposed to mean “tastes good” (is it? I’m still not sure), then find an effective way to tell beer drinkers that your beer tastes good. Miller Lite did that, and even managed to add a second concept, and “Tastes Great, Less Filling” became one of the most effective ad campaigns in history. Human communication, using simple language.


Developing Countries Love Tang, Hate Mac And Cheese

Posted on : 15-03-2010 | By : admin | In : business

If Kraft (KFT), Sara Lee (SLE) and other makers of packaged foods hope to grow, they must inject their brands into developing nations. “But packaged-food firms face a special challenge,” writes the Chicago Tribune’s Mike Hughlett. “Food, more than most products, is an expression of culture.”

For instance: In general, only Americans are interested in Kraft macaroni and cheese. Kraft has tried, but mostly failed, to get anyone else to eat the stuff. It has stopped trying. By contrast Kraft’s Tang, which a few decades ago was a huge brand in the United States and isn’t any more, is a “juggernaut” in developing countries like China and Brazil. “The upshot: Powdered cheese food doesn’t travel well” but “powdered beverages do,” says Hughlett.

He cites data showing that other industries generally have much better foreign-market penetration than the food business does. Kraft, though, does better than the average for all industries (according to this data set, anyway), with 41 percent of its sales coming from foreign markets compared to 38 percent. And that’s before the company’s acquisition of Britain’s Cadbury. Also, developing markets contributed more to Kraft’s sales growth over the past couple of years than any other division. 

Kraft’s success comes down to research and precise targeting. A few years ago, it stopped flinging all its brands across the globe and began to concentrate on specific brands for specific markets. People in China don’t eat a lot of cheese, much less powered cheese that comes in packets. But they love Tang. So do people in Brazil and Mexico. But they love it even more when its targeted to their particular tastes. In Brazil, guava Tang is big. In Mexico, they like tamarind Tang.

Campbell Soup also tried a blunt approach and failed. Now, rather than just selling its condensed soups to Chinese and Russian consumers, it sells them concentrated broth and other products that help them make their own soup, which is what they prefer.

For all their success, food companies can only envy certain other industries. It took Campbell a couple of years to do the research and create its new products for Russia and China. All Hollywood has to do is make films with lots of chases and explosions.


USA Today Back In Starbucks

Posted on : 15-03-2010 | By : admin | In : business

USA Today has returned to Starbucks after 10 years of the New York Times being the only national paper available in the chain’s outlets.

“Starbucks positioned its new openness as an effort to better serve its customers, who’ve come to expect more choices in media throughout their days,” reports Advertising Age.

It also helps Starbucks (SBUX) present itself as more egalitarian and less “elitist,” though of course the company isn’t saying that. The irony is that these days just about everybody who reads any newspaper at all is subject to being called an elitist.

Ad Age seems to fully expect that the Wall Street Journal will be next. Starbucks isn’t saying. 


The Feds Go After Big Food

Posted on : 13-03-2010 | By : admin | In : business

“The farm fight begins,” P.J. Hufstutter announced this morning on the Los Angeles Times’ Money & Company blog.

The farm fight has been going on for a few years now (or, depending on your perspective, since before the founding of the republic). But with the Justice Department’s hearings on consolidation in the food and agriculture industries, the fight now has a formal, government-mediated venue.

Sadly, I can’t be at today’s hearing in Ankeny, Iowa, the first of several that are planned. But from what I’ve seen so far, the biggest news to come out of it was the announcement by Attorney General Eric Holder (whose presence quite effectively signaled how serious the DOJ is about taking on Big Food) that Monsanto’s seed patents won’t protect it from possible antitrust enforcement. “The question is how those patents are used,” he said. And “there is room for enforcement” despite the protection patents on life forms give their owners.

Monsanto (MON) is a big target of today’s hearing. It is also the target of antitrust investigations and lawsuits from competitors. It stands accused of using its patents to stifle competition. Christine Varney, head of the DOJ’s antitrust division, said the hearings are meant in part to determine “whether patents potentially could be used to protect monopolies.”

Though Monanto is cast as the villain of the day, no big food or ag company should feel secure. Later hearings will focus on the dairy, livestock, and poultry industries, but it appears that the DOJ isn’t planning to be too discriminating. Varney promised that the DOJ is looking closely at the whole industry. Her division is on an “unrelenting quest to find the correct balance” in the food industry and will “carefully and closely scrutinize every single merger.” 

And Holder said: “We’ve learned the hard way that long periods of reckless deregulation have restricted competition and harmed farmers.”