The food business blog from Dean Best
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Ferrero sees sense after Nutella sugar rush
23 May 2013 15:43
Would your company issue a cease and desist letter to one of its biggest fans? That's what Ferrero did. However, in a last-ditch outbreak of common sense, it withdrew its attack on someone who has promoted Nutella worldwide.
The Italy-based confectionery giant sent Sara Rosso, the founder and promoter of the annual World Nutella Day (which seeks to "celebrate" the spread brand), the letter, ordering the blogger to stop the event.
It was a bizarre action. Rosso has held the event seven times to hail "Italy’s edible treasure". A website, nutelladay.com, suggests recipes for the chocolate spread. Nutella Day's Twitter feed has over 6,000 followers. The day's Facebook page has more than 35,000 fans. It is, in a day and age when brand owners are struggling to harness social media (and work out how to resource it), a marketer's dream.
Ferrero, the intensely private food group, has seen sense and pulled the suit. But not after putting pressure on Rosso. "They asked me to take down the site because they consider it to be an unauthorized use of their intellectual property and trademarks—the Nutella logo and brand," Rosso told Bloomberg Businessweek in an article posted by the publication on Tuesday.
However, Ferrero quickly saw sense. "Positive direct contact between Ferrero and Sara Rosso, owner of the non-official Nutella fan page World Nutella Day, has brought an end to the case," the company told just-food.
"Ferrero would like to express to Sara Rosso its sincere gratitude for her passion for Nutella, gratitude which is extended to all fans of the World Nutella Day. The case arose from a routine brand defense procedure that was activated as a result of some misuse of the Nutella brand on the fan page.
"Ferrero is pleased to announce that today, after contacting Sara Rosso and finding together the appropriate solutions, it immediately stopped the previous action. Ferrero considers itself fortunate to have such devoted and loyal fans of its Nutella spread, like Sara Rosso."
With the rise of social media, brand owners do need to watch how its logos and brands are used. However, Ferrero has done its peers a favour in showing them how not to act.
Annoyed M&S boss Bolland brushes off questions over his position
21 May 2013 15:30
Bolland insisted M&S was "delivering" on its strategy
In some areas, notably food, Marks and Spencer is performing well. However, the UK retailer attracts scrutiny like few others in the consumer sector and, today (21 May), after reporting another year of falling profits, chief executive Marc Bolland faced media questions about his future.
M&S booked a 6.5% drop in net profit to GBP458m for the year to 30 March. Higher operating and finance costs weighed on M&S's bottom line, as did the expected fall in annual sales of general merchandise. Adjusted pre-tax profits were down 3.2%. It was the second year in a row M&S had booked falling earnings.
Bolland, the former boss of rival UK retailer Morrisons, joined M&S in 2010 and has been dogged by media and analyst criticism over his strategy for general merchandise, which has fallen in the retailer's last two financial years. The pressure has grown over the last 12 to 18 months as M&S's clothing business has faltered. In the year to 30 March, results for which were issued today, general merchandise like-for-like sales fell more than 4%.
While food ticks over nicely for M&S, the retailer is hoping its new autumn and winter wear collections can boost its clothing business.
Speaking to reporters in London today, Bolland was asked, first, if he would accept his bonus for the year and, more pointedly, what he thought of comments from investors that he had 12 more months to demonstrate progress in clothing.
The M&S boss refused to be drawn on his bonus, pointing out the information on his remuneration would be published next month.
However, he was rattled by suggestions some shareholders thought he had a year to show M&S was moving in the right direction.
"The time-frames are irrelevant. We are delivering this plan, we're delivering it very consistently," Bolland said. "I've always said it's a big job. It's a difficult job to see through. I'm prepared for it because I like a job like that."
CFO Alan Stewart supported the M&S boss and insisted the retailer's underlying profit performance was flat, once one-off items, as well as ongoing investment, was excluded from the numbers.
"In terms of the results, the [adjusted pre-tax profit] number is down 3% on a LFL basis. From my perspective the number is pretty flat year-on-year," Stewart said.
He added: "The investors we have spoken to say we are abs behind this strategy, don't get distracted by things along the way."
A launch of a full online grocery service, meanwhile, does not appear to be part of that strategy.
Bolland said M&S has "no plans" to expand its limited online ordering service to home delivery.
After last week's announcement of a deal between Morrisons and Ocado, M&S is set to be the only major UK grocer not to offer home delivery and there had been talk the retailer could look at extending its online party food, flowers and wine offer.
Bolland, however, argued the move would not fit M&S's food business. And that is a division that, for all the criticism of the retailer's general merchandise arm and questions over Bolland's future, remains robust.
M&S could face questions over long-term online food strategy
20 May 2013 16:01
When Morrisons makes its first home deliveries in January, Marks and Spencer will be the only major UK food retailer not to have a full online grocery service. M&S's food arm has been ticking over nicely and much of its focus is elsewhere but the retailer could face questions over its online plans for food when it reports its annual results tomorrow.
M&S customers can order food online for delivery to stores but the retailer does not offer a full home delivery service like its major rivals, competitors that now include Morrisons after its distribution and technology deal with UK online specialist Ocado.
When he was at Morrisons, Marc Bolland, now M&S chief executive, was reluctant to take the UK's fourth-largest grocer online. Now at M&S, the Dutchman is still said to be unsure about the benefits of launching a full online grocery service, questioning the return on investment.
Tomorrow, when M&S reports to the City, a lot of attention will be on whether the retailer is seeing improvements from its clothing business. Its food division has performed well in the last 12 months (Q4 food like-for-likes were up 4%). But that does not mean industry watchers will not be wondering what M&S's plans are for online grocery - especially as there is speculation Morrisons' deal with Ocado could spell the end of the online specialist's deal with another upmarket UK grocer in Waitrose.
For its part, Waitrose said little about the Morrisons/Ocado venture, revealing only it had asked lawyers to look into the agreement to see if it breached its deal with the online specialist. The Waitrose/Ocado deal runs until 2020 but there is a break clause that allows Waitrose to walk away in 2017.
The upmarket retailer refused to comment on whether it would activate the clause but there is a feeling in the City it could quit the deal in four years time, leaving Ocado with a potentially big hole in its sales.
If Waitrose walks away, could that hole in time be filled by M&S?
Now we wait for Waitrose lawyers to issue Ocado verdict
17 May 2013 18:02
Today's top story has, obviously, been news that Morrisons and Ocado have a struck a deal that will see the UK grocer at last launch into online grocery. However, industry watchers are waiting to see what Waitrose, Ocado's existing partner, does next.
Waitrose, which has a long-standing relationship with online specialist Ocado, was initially coy when just-food called the upmarket retailer in the wake of the Morrisons venture being announced this morning.
A couple of hours later, Waitrose did issue a formal statement, pretty much repeating what a spokesperson told us this morning.
That said, the statement made plain Waitrose will be calling in the lawyers to look at the Morrisons deal to see if there is a breach of the contract between it and Ocado.
"We have asked to see the detail of the deal and the operating arrangements. Meanwhile, we have instructed lawyers so that we can get a clear and unequivocal view of the contract and examine what might constitute a breach. This process will take some time so we are unlikely to comment again in the near future," Waitrose said.
Some industry watchers think Waitrose could pragmatically decide Ocado's deal with Morrisons gives the online firm more scope for investment in its technology.
Others think Ocado's agreement with Morrisons means it is now more likely Waitrose will walk away from its deal with the online specialist in 2017.
The UK grocery sector now awaits to see what Waitrose's riposte will be.
Sir Alex Ferguson admirer Justin King rebuffs questions over his future
08 May 2013 17:44
"The only good news about the speculation swirling around me means I have had my name mentioned in the same breath as Alex Ferguson today. The great man himself." So quipped Sainsbury's chief executive Justin King as he again faced questions over when he, like the legendary Manchester United manager, could step down from his post.
On the day Sir Alex announced his retirement as United manager after almost 27 years in the job (prompting a cloud of gloom to descend over part of the just-food editorial team), King had to fend off renewed queries over his plans after nine years at the helm at Sainsbury's.
"I've been very clear about my position and that is this is a great company with fantastic future prospects. I see myself playing my part in that," King insisted.
Two weekends ago, reports claimed Sainsbury's had hired executive search firm Egon Zehnder to find a replacement for King. That weekend, King popped up on TV to insist he was "not going anywhere" but, at the press conference to discuss Sainsbury's annual results, the questions returned.
King and Sainsbury's chairman David Tyler refused to confirm whether headhunters had been appointed.
"We haven't confirmed headhunters have appointed as we never comment on rumours or speculation," King said.
Tyler echoed King's stance. "Let me just reaffirm what Justin said: we never comment on market rumours on this matter."
He added: "We have a cracking management team here and my job as chairman is to look after that and develop it for the future and that's what we're doing right now." Tyler then referred to the going-on at United and added: "The only rumour I will scotch is that it is not true that I had a call from Old Trafford to see if Justin might be available."
Asked how much longer Tyler would like to see King stay at Sainsbury's, he said: "I think he is doing a cracking job and he'd have to persuade me hard if he wanted to leave at any stage."
In some ways, the speculation over King's future at Sainsbury's, which returns every few months, is something of a sideshow - at least in the near term - while the UK's third-largest grocer continues to churn out solid results.
That said, shareholders will be keen to hear King's comments each time he - perhaps annoyingly for him - is asked about his plans.
The Sainsbury's boss this afternoon insisted he was "committed" to the retailer and labelled the rumours as "speculation".
Some mischievous industry watchers may draw parallels between King's comments and Sir Alex's programme notes before the Chelsea game on Sunday in which he said he had "no plans to walk away".
But it seems, for now, the Sainsbury's boss and United fan will remain in his post. For how long? Diageo CEO Paul Walsh, who will step down in July, has been CEO at the drinks group for 13 years. There could be a bit of time in King's tenure yet.
Iceland Foods claims "encouraging" start to online return
07 May 2013 15:02
Iceland axed service in 2005 as it looked to turn itself around
We reported a fortnight ago Iceland Foods was to start trialling an online service in weeks - and, over the weekend, the UK retailer announced its return to the channel.
Iceland, which launched online in 1999 but shelved the service six years later as it fought to turn itself around, said "a small number" of stores had kicked off the trial.
The retailer said the stores - in London, the South West, the North West and the Nort East - had seen "very encouraging initial results".
Iceland already offers a home delivery option for in-store orders over GBP25 and the retailer said the full online service would build upon a scheme that caters for 180,000 transactions a week.
Chairman and chief executive Malcolm Walker said: "Iceland was the first UK food retailer to launch a nationwide online shopping service as long ago as 1999, but maintaining it was not a priority when I was faced with the challenge of turning around a near bankrupt company on my return to the business in 2005. Now the time is right to re-launch the service, building on our well-established and smoothly running home delivery infrastructure with an easy-to-use website that sets new standards for customer friendliness."
John Mackie, director of delivered sales at Iceland, added the retailer was "delighted" with the start of the trial.
"This is exceeding our expectations for the number and size of orders we have received, and for the proportion of new customers to Iceland that the service is attracting," he said.
Nestle's Maggi the food brand bought most often, says Kantar Worldpanel
02 May 2013 15:59
Nestle's Maggi is the food brand purchased most regularly around the world, according to a new survey from industry analysts Kantar Worldpanel.
The number-crunchers at the firm have developed data that they claim show the "brand footprint" of the world's largest FMCG brands.
The list, published today (2 May), gives a brand's "consumer reach points", which Kantar Worldpanel says measures for the first time how many households around the world are buying a brand (its penetration) and how often (the number of times shoppers acquire the brand).
Kantar Worldpanel analysed data from 32 markets and the numbers led to Coca-Cola (a little unsurprisingly) coming out on top. The analysts said Coke had a penetration of almost 44% of households and was bought by homes 15 times a year on average. The scores combined meant it was chosen (and had achieved consumer reach points) 5.3bn times.
The top five places were made up by drinks (Nescafe and Pepsi) and personal care brands (Colgate toothpaste and Lifebuoy soap). Incidentally, Colgate was second but had the highest penetration score, meaning its reach is wider than that of Coke.
Maggi was sixth on the list, chosen 1.58bn times a year. Unilever's Knorr was the next highest food brand at eight, with households purchasing the brand 1.29bn times a year. PepsiCo's Lay's brand was in at nine. Some 1.14bn households put that brand in their baskets a year.
Kantar Worldpanel CEO Josep Montserrat said: "Now brands demand more in-depth analysis of their current basket reach compared to their competitors and opportunities for growth around the world. Consumer Reach Points reveals which brands are already achieving global success and provides insight that will help other FMCG brands with international ambitions to set global targets more accurately and improve their global business growth."
In the coming days, we will run a full-length interview with Kantar Worldpanel in which it explains why it developed the data, what the survey can offer FMCG companies and why certain brands scored highly.
Mondelez faces fresh UK union criticism over Cadbury
01 May 2013 18:17
The takeover of Cadbury was one of the most debated deals of recent times, particularly in the UK, where the then Kraft Foods faced union and political criticism. Now the confectioner's current owner, Mondelez International, is in the spotlight.
The Unite union today (1 May) accused the company of "human rights abuses" in north Africa. It said Mondelez had been linked to the "sacking" of five union officials in Egypt, and the dismissal of a worker who spoke out after getting injured in one of its plants in the country. Unite also claimed Mondelez has "locked out legitimate trade unions" at sites in Egypt and Tunisia.
"This is a company that has repeatedly demonstrated that it has little respect or concern for its workforce and their employment rights," Unite national officer Jennie Formby claimed. "Unite warned Kraft that their future behaviour towards workers would be under close scrutiny following the hostile Kraft-Cadbury takeover in 2010. As soon as they took over the company, hundreds of jobs were lost. Yet Kraft is still allowed to continue this bad management in dealing with its workforce today."
She added: "Our members take this unjust attack on its fellow brothers and sisters in Egypt very seriously and they will not stand by when their rights or any workers' rights are under attack. It is totally unacceptable and must stop. We'll fight-back together until we end these unjust attacks on workers in Egypt and to defend workers' rights."
Mondelez could not be reached for immediate comment. Tomorrow, Unite and the International Union of Food Workers will host a reception in Birmingham, not far from Cadbury's flagship Bournville site to "highlight their concerns" with Mondelez. Two of the supposedly sacked union workers from Egypt will be present.
We'll chase Mondelez for comment again tomorrow.
Danone's Oikos tops US NPD poll - and here's the top ten
24 Apr 2013 16:21
Underling the buoyancy of the Greek yoghurt sector in the US, Danone's Oikos brand has topped a poll of the best-selling new products in the US - and here we list the top ten.
The French food giant saw sales of its Dannon Oikos line reach US$283.8m last year as demand for Greek yoghurt in the US continued to grow, IRI's New Product Pacesetters survey said.
IRI measures the best-selling launches each year. The poll looks at sales of products in their first year at grocery, drug, mass market retailers, dollar and club stores, plus, for the first time, Wal-Mart outlets.
The top ten new products are listed below. In at two, Starbucks' K-Cups coffee reinforced the popularity of single-serve coffee at home. Dean Foods' TruMoo chocolate milk was fourth; flavoured milk is a segment keenly eyed by dairy companies, particularly in mature markets, as they look for areas of growth.
At eight was General Mills' Nature Valley protein bars, which has tapped into demand for on-the-go snacks while also offering a health benefit.
ConAgra Foods' Orville Redenbacher popcorn brand also featured on the list and looked to offer even more convenience from a snack - by providing consumers with a bowl they could then throw away, without using their own.
Not sure it would make this correspondent rush to the popcorn shelf but, hey, some do want ultimate convenience.
US consumer study brings cheer to private label, concern for brands
18 Apr 2013 14:40
US shoppers, historically some of the most brand-hungry on the planet, have become more accepting of own label during the downturn - and a survey suggests store brands will remain a key part of the basket even when the economy improves.
Deloitte's annual American Pantry Study, released this week, underlines how US consumers have adapted to the recession. Shoppers have become more frugal and smarter about what they buy since the onset of the financial crisis and Deloitte's survey showed such behaviour continues.
However, it is some of the more forward-looking data in the survey that will cheer the country's private-label manufacturers and cause furrowed brows at brand owners.
Deloitte said 94% of respondents claimed that even if the economy improves, they will remain cautious and keep their spending at the current level. And, notably, only 27% of shoppers say they will buy more national brands instead of private label when the economy improves. That figure is down on the 35% recorded in the last two of these surveys.
More shoppers are buying own-label lines in categories they hadn't before. Fewer consumers feel they are "sacrificing" when buying private label. And more consumers feel they have found store brands that are "just as good" as national brands.
"Prudent consumers and improving perceptions about store brands are squeezing national brands' position. The gap between the few must-have brands on shoppers' lists and others on the shelf may be widening, making it more important for brands to differentiate through innovation, quality and performance," Pat Conroy, vice chairman and consumer products leader at Deloitte, said. "Consumer product companies may also consolidate low and mid-level performers and shift investment to the category leaders."
The study, which surveyed over 4,000 consumers, obviously gives support to the strides ConAgra Foods - which owns brands including Hunt's ketchup and Banquet ready meals - has made in own label in recent years, including the acquisition of US private-label group Ralcorp Holdings.
However, it will cause concern for brand-owners in categories where the prevalence of own label is highest. Think cereal or soup. And therefore think Kellogg, General Mills and Campbell Soup Co.