December 2009 Archives

The Marie Callender's restaurants are sheer heaven for the comfort-food aficionado. The restaurant is homey, and the food is well-prepared and heavy with the kind of calories that make us remember Mom's cooking. The array of pies makes being prudent about making healthy diet choices nearly impossible. But her restaurants are not everywhere. In fact, they are nonexistent in many parts of the country. But never mind; you can go to your supermarket and purchase everything except the atmosphere. The very same foods that destroy the diets of so many diners in the restaurants are available for self-preparation. The setting may not be so cozy, but the food is good.

The current trend to eat at home with the family around the table, brought about to some extent by the need to contain costs in the current economic downturn, has led many restaurant chains to start packaging their most popular dishes and sell them through supermarkets. However, according to Business Week, it's not easy to accomplish, especially for smaller restaurants or chains. They tend to be nonexistent because it costs too much to distribute and market.

You can start out ahead of the pack, of course, if your product is already popular with some people--your customers. You have a recognizable brand already, at least locally. If you really want to do this, you need to take some things into account. For one, the supermarket is big and competitive, it makes enormous demands on its vendors.

The supermarket will charge you a fee for putting your products on their shelves, and sometimes those fees are outrageously high. You might be able to negotiate them, and if sales are good, the supermarket may even be willing to forgo fees completely. You need to be prepared to pay for promotion and advertising. In addition, there will probably be "failure fees" if your product doesn't sell well. Products are usually given 120 days to succeed and if they don't, your products may be returned.

Supermarkets want up to a 60% margin on a fresh and/or refrigerated items, and they will want you to deliver directly. They may even require you to restock or turn your product. In order to do so, you'll probably need to be located a commutable distance from the supermarkets you want to house your products in.

You also need to keep in mind that your food will be inspected by the same inspectors that enforce such high standards on supermarkets. Take into account that you might need to beef up food preparation in your restaurants in order to sell the same products in a supermarket.

This is not to say that you shouldn't try to expand your business for your restaurant. It very well may bring new customers into your restaurant. However, you should know ahead of time that it can be a pretty tough road to success.

Gidget is rolling over in her grave right now.

Who is Gidget? Well, she was the once-famous Taco Bell Chihuahua who coined the famous phrase "Yo quiero Taco Bell." She died at the age of 15 in July and less than six months later the brand has taken on its next leading lady, Christine Dougherty.

To clarify, Christine is not Gidget's replacement. The dog has long been retired, and it's understating Christine's roll in the company's new marketing efforts by calling her simply a "spokeswoman."

Christine is a success story and to be more specific, a dieting success story! In Taco Bell's newest round of advertising (say goodbye to the guy dressed up as a pregnant woman sneaking nachos into the game), Christine outlines how she lost 54 pounds eating at the brand's drive thru.

In her commercials, she happily explains how she stuck with Taco Bell's Fresco menu items to achieve her weight-loss goals. Of course, there is fine print explaining the details of her experience and the media has instantly latched on to that fact.

But if you're thinking this story sounds familiar, that's because Jared Fogle did the same thing on a far bigger scale by eating sandwiches from Subway more than a decade ago. He lost more than 200 pounds and was catapulted to pop-culture stardom after staring in a series of commercials for the company. There have been others, but no one has come close to Jared's notoriety until recently.

In all the recent talk about Christine's Taco Bell success, however, Jared seems to be the real winner. From the NY Daily Post to ABC News to the Huffington Post, major news outlets can't seem to cover Christine's story without throwing in Jared's name and his accompanying brand. So while the Taco Bell team surely worked long and hard to develop the Drive Thru Diet commercial, Web site, and coupon, Subway sat back and reaped the benefits.

It's that fact that would have Gidget mad if she were around today. When she was the brand's icon, she was the trailblazer and other brands replicated her campaign. Today, Christine seems to be a copycat version of a success story we've all already heard.

What do you think about Christine's story? Is this the beginning of a great marketing relationship? Or is this too close to Jared's story to be successful? Who's the real winner? Christine and Taco Bell? Jared and Subway? Or, perhaps, Gidget?
  

And the hits keep coming for the beverage industry. The NYC Health Department in its campaign to fight obesity has released a new video that portrays what amounts to a man drinking a cup of fat to convey the harsh message that drinking soda is nothing more than drinking fat. This video does not come as a surprise from the state of New York which has always been a leading state in addressing consumer nutritional concerns. If you remember, NYC was the first municipality to ban trans fat in food items served through food service outlets and one of the first cities to mandate that restaurants with over 20 locations post nutritional labels right on the menu.

Response from the beverage industry is quite obviously less than positive. The consensus being that this video portrays drinking soda as the root of the problem when the real obesity issue amounts to consumers understanding and abiding by the simple natural law of calories consumed to calories burned to manage weight issues. Both sides are right in my opinion.  But check out this video: 



It is pretty gnarly indeed. I think NYC is aiming to get your attention with this one…and they definitely got mine.

Speaking of trends for 2010, McDonald's is planning to offer WiFi to its customers in 2010.This in addition to adding smoothies and frapuccinos to the McCafe line with the hope that McDonald's will become a hangout spot for customers who may otherwise choose to go to Starbucks or some other cozy environment to "chill". They are hopping on the "destination" bandwagon and hoping that by offering additional perks, they may be able to convince customers to stick around and make purchases during snack and off peak meal time hours.

I think McDonald's has the right idea, but I am having a hard time picturing what McDonald's is going to do to its atmosphere aside from adding WiFi. Starbucks and other coffee houses are known for their comfortable, home away from home type of atmosphere. Most have plush chairs and comfy couches where you can literally sit for hours and never grow uncomfortable. I'm not so sure that McDonald's current set up provides the sense of familial warmth most coffee shoppers are looking for. I never think of plush chairs and comfy couches when I think of McDonald's.

Perhaps they will add additional elements to have a separate McCafe area that can house the type of ambience they will need to succeed as a restaurant and a cafe. This could get complicated though, especially if you've got someone scarfing down a Big Mac, sitting right next to someone breezing through a magazine and sipping a latte. How will McDonald's keep their cafe furniture ketchup and grease free? Can McDonald's be both?

There are exactly two weeks left in 2009, and it's time we begin to part ways with the old decade and set our sights on the New Year ahead. Without a doubt, 2009 was a tough year on consumers, businesses, and Tiger Woods. Quick-service did better than many other segments and industries, but this year's economic climate would not have been anyone's first choice of scenarios.

So we turn our attention to 2010. There are already lots of predictions about what trends will take off next year. But one study I always watch for around this time is the National Restaurant Association's chef survey. The study surveys more than 1,800 American Culinary Federation chefs and always comes away with some great predictions, and this year's survey is no different.

The clear trends are sustainability, local sourcing, and nutrition. And what often happens is that today's trends become tomorrow's menu staples. So if I were a betting woman, I wouldn't bank on any of these trends going away any time soon. If anything, the quick-serve industry needs to embrace them even more. Let's look at each individually.

The specific trends listed in the local category are locally grown produce, local meats, and local beers & wines. As big as this trend is, you don't see quick serves doing much on this front. Of course, there's Burgerville, which uses local cheeses on some of its cheeseburgers and Chipotle that prides itself on its ingredients, but there aren't many more. None of the Big Guys have tapped into the local trend and if one of them figures out the operations behind supplying a special local menu, consumers will reward the company in a big way.

Then there's nutrition. The quick-service industry was taught long ago to pay attention to calorie counts. But today's consumers are more sophisticated. They're worried about sodium levels and gluten and peanuts. It's essential for quick serves to let consumers know that they're worried about those things too. It's not necessary to transform your menu. Heck, I might hurt someone if I couldn't get my Taco Bell Mexi Melts (hold the fiesta sauce). But show consumers you care by offering gluten-free options and knowing what exactly is in your menu items.

The last category is sustainability. It's more than a buzz word now. Consumers can sniff out greenwashing, so it's not even worth trying to pull a fast one. Equipment, menu items, packaging--it all should be sustainable. Eventually. Consumers understand that it can't all happen at once, but those are great New Year's resolutions.

The full list of the chef's top trends is below. Take it to your next team meeting and figure out what trends would make sense at your brand.

1. Locally grown produce
2. Locally sourced meats & seafood
3. Sustainability
4. Mini desserts
5. Local wine & beer
6. Nutritious kids' meals
7. Half portions
8. Farm-branded ingredients
9. Gluten-free
10. Sustainable seafood

Back in October, Blair pointed out the seemingly scarce existence of multi-concept franchisors. "Like a good man", she said, "they are not easy to find". I recently came across an article that brought this topic back to the forefront of my mind.

Ray Wiley is a veteran Subway franchisee that has struck out on his own. Ray and his wife Cynthia opened their first Hothead Burritos fast-casual in 2007. Today they have seven locations in the Dayton, OH area and have just signed their first franchisee, set to open mid-December. According to aol.com this could be the start of something big...as in naming Hothead Burritos one of the next big restaurant chains. Wiley's goal is to open 30 franchise operations by the end of 2010 with the ultimate goal of competing with Chipotle Mexican Grill and other fast casuals within a few years.

Wiley says there are no hard and fast rules to becoming a franchisee. This may be in part because he admits that he himself did not fit the bill of a Subway franchisee starting out. However, he clearly had the tenacity and forthrightness to be successful. The Hothead concept may be especially appealing to hopeful franchisees because the startup and royalty fees are lower than most at $23,000 and 5.5% royalty + 3% marketing respectfully. Wiley says it's not all about the money for him. He wants to help others achieve their dreams.

So returning to the original question: where are these multi-concept franchisors and do they exist? Yes, Virginia, they do exist. And Ray and Cynthia Wiley paint a perfect picture of what they look like.

McDonald's has the budget to make this marketing partnership a success, no doubt. McDonald's is not only connecting with its customers through this campaign, it's giving back to them as well. How cool is it to actually engage in the reality that is Avatar?

Blair brings up an interesting point though. Is McDonald's leaving out a large part of its customer base being that this type campaign is quite obviously geared toward the younger generation? Probably, yes. However, this campaign and all the elements of it taking place in McDonald's locations everywhere could make McDonald's more of a 'family' destination than it already is. Sure, Grandma may have no idea who, what, when, where or how an Avatar is, but then again, who really cares? I think Grandmas across America will seize this opportunity to engage in an activity with their grandchildren that is part of their world. Not an easy feat for a grandparent in the day and age of texting and Twittering.

This morning I attended a McDonald's press conference that featured an all-star lineup: director James Cameron, producer Jon Landau, the company's global CMO, Mary Dillon, and its USA CMO, Neil Golden. As if that wasn't enough, I got to do it all from the comfort of my own desk.

OK, so the word "attended" is used loosely in this situation, but it was one of the cooler Web-based media calls I've ever been on.

Usually, when a brand puts together this kind of a media effort the announcement is big. Think: Church's move to give away thousands of dollars to unsuspecting consumers earlier this year or Quiznos' new CEO announcement a few years back. In those instances what you usually get is a conference number to dial into and then, if the presentation is really advanced, watch accompanying PowerPoint slides on your computer.

This press conference was different. McDonald's pulled out all the stops and presented the half-hour call in real time in a studio and beamed the live video feed to journalists across the world. Yes, the world.

All this work was to announce the brand's involvement in the new Fox sci-fi film "Avatar." Although Dillon wouldn't put a dollar amount on the company's efforts, they're clearly quite extensive. Let me tell you a bit about what they have in store for consumers across the globe.

• Photo backdrops in Latin American stores will allow McDonald's visitors to photograph themselves in Pandora, the alternate planet featured in the film. There will even be table-side augmented-reality elements.
• In Australia, diners can find hidden codes on their cups to unlock prizes online.
• European consumers have the always-popular option of uploading pictures to a special Web site that then turns their images into Na'vis, the strange, blue cat-like creatures that inhabit Pandora in the film. (I predict this will be on your Facebook news feed in a matter of hours since these types of efforts seem to go viral faster than you can Tweet "I told you so.")
• Some of the best tie-ins are saved for U.S. customers. The Pandora ROVR allows diners to explore the world of Pandora and even snap high-resolution images from their adventure to post online. My personal favorite is a packaging campaign that allows diners to rip off a Thrill Card from their Big Mac clamshells, put it in front of a webcam, and access "Avatar"-themed adventures (similar to the latest issue of Esquire).

So what does all this effort get a brand besides blog posts like this? According to Dillon, the brand wants to be where its consumers are. If that means Facebook and online games, this is a heck of a campaign, but it certainly does leave out large segments of the population.

I'm not seeing grandma being very interested in manning the Pandora ROVR and sending photos of her adventure with the Na'vis to her bridge gals. But I do believe the campaign will be wildly successful with the younger generations who are comfortable with advanced technology and have come to expect heavy marketing initiatives like this online. I, for one, have seen a lot of marketing roll outs but none has made me want to go buy the product to try it out more than this one.

With McDonald's relationship with Fox slated to last through 2011, I'm sure we'll be seeing more efforts like the ones promoting "Avatar" in the future. In fact, Cameron was already hinting at a sequel to "Avatar" that might even feature a McDonald's on Pandora. Now that would be augmented reality!

Fructose is a simple sugar that is found naturally in most fruits and vegetables. The amount of naturally occuring fructose found in whole foods is small, and because there is evidence showing that small amounts of fructose do not raise blood sugar levels significantly, fructose has long been considered a good sugar and a healthy substitute for refined sugar. Enter high fructose corn syrup. Since its introduction, the amount of fructose consumed on a daily basis has skyrocketed, and with that, so has the fructose debate.

Ultimately, the fructose debate boils down to a single simple question: Is fructose good for you? Because the main source of fructose in the modern diet now comes from high fructose corn syrup, this product tends to be at the center of most debates.

High fructose corn syrup is a highly processed sugar that consists of both glucose and fructose. However, the amount of fructose in a single gram of high fructose corn syrup exceeds the amount of fructose found naturally in fresh fruits and vegetables.

For some, the issue is centered around processing. The argument is that because high fructose corn syrup does not exist in nature, it cannot be called a natural product, and therefore is not to be considered healthy. In support of this argument, studies reveal that the process by which corn is turned into high fructose corn syrup requires mercury. This process has led to trace amounts of mercury being found in h.f.c.s., substantiating the claim that it is not a healthy sweetener. In addition, it is argued that high fructose consumption leads to high density belly fat which has been linked to many health and medical issues.

Advocates of high fructose corn syrup claim that fructose causes no more unhealthy belly fat or obesity than other sweeteners, and that it contains no artificial ingredients. In fact, some studies show that the body breaks down glucose in the same way it does fructose, and the two are equally safe. Instead of targeting fructose as the evil sweetner, some say, consumers should instead focus on reducing the amount of sugar in any form because of the belief that sugar is not healthy no matter what form it comes in.

I expect that this debate will continue until public attention is turned to the next health debate, but in the meantime - what's your stance?

 

McDonald's is one of a handful of globally recognizable companies. It's accompanied by brands like Coca-Cola and, perhaps now, Apple. And many would argue that it's brand suicide to tamper with any image that has that kind of marketing power. You don't see Coke changing its iconic cursive to Times New Roman or Apple filling in its mysterious missing bit, do you?

It's a risky move for McDonald's to change its European logos to green.

We're so programmed to believe that anything McDonald's does is automatically a home run, it's important to point out how big of a leap of faith the company is taking. Sure, consumers will still recognize the Golden Arches, but the leading company in our industry is changing a logo that's proved successful all around the world. There's a huge opportunity for failure there.

I applaud McDonald's for taking the risk and making the logo change. As the most successful company to come out of our segment, McDonald's sales are more than triple it's closest competitor. There's no doubt the company sets the pace for the rest of the industry. And with the corporation's ramped-up environmental efforts (and accompanying logo), it sends the message to other brands that sustainability is here to stay.

Like Steffen, I'm interested to see what this means for the domestic McDonald's units. Surely, if the new logo is successful in Europe there won't be much stopping the brand from taking it state side as well.

For now, however, McDonald's is sending a strong signal that environmental consciousness is part of its business plan moving forward. The logo change is a small part of that, but let's not forget that the company is taking a big risk and with that could potentially come a big reward.