MNB had a story on Friday about how Burger King is licensing out its name to a company that will begin selling fried potato chips that will come in two flavors - Ketchup & Fries and Flame-Broiled burger. These chips will be available in supermarkets, if Burger King has its way…which led me to reiterate a position that I’ve stated in this space before:
…at the risk of seeming completely reactionary, I am going to suggest that supermarkets not carry this product – because they should not carry ANY PRODUCTS that carry the brand name of a competitor. Any item that carries the brand name of a fast food or restaurant chain that competes for the consumer’s share of stomach simply should not be stocked by a supermarket that really, really wants to be competitive.
I understand that this seems drastic, and that supermarkets see themselves as providing the broadest possible choices for consumers. But I submit that no consumer will stop shopping at a supermarket that doesn’t carry this sort of stuff, and that instead carries high-quality, high-value food items that reinforce or simply don’t damage a store’s brand image.
And that’s what items from places like Burger King do, in the long run. They erode equity.
Draw the line now, and stop carrying them. Celebrate your own brand, and stop giving shelf space to the competition.
MNB user Aaron Algazy wrote:
There are many items in stores that have ‘competitors’ (as you say) names; Wolfgang Puck, California Pizza Kitchen, Starbucks to name a few. I am surprised to hear you say that the stores should not carry these items. To use your words, with a little tweak: ….I submit that no consumer will stop shopping at a supermarket that DOES carry this sort of stuff. AND, it is not like the supermarkets are expecting to take all the business away from fast food places (that’s just crazy talk), if we can take some of the profits by selling what someone wants, isn’t that what it’s all about? Sales, Sales, Sales.
Grocers need to give the Customer what they want when they want it.
Another MNB user wrote:
I can’t wait for the shellacking you’re going to take for the BK Chips comments.
Here in Kansas City you can buy all kinds of items from local and chain restaurants. Just a sampling:
• V’s Italian Restaurant – Frozen pasta sauce and meatballs (which I absolutely love!)
• Chili’s Restaurant – Salsa
• On the Border Restaurant – Chips and Salsa
• KC Masterpiece – BBQ Sauce (albeit the sauce was first, then the eatery)
• Zarda BBQ – Baked beans and smoked ribs usually fresh in the deli case
• White Castles – You can get their burgers (belly bombers) in the freezer case, but wouldn’t recommend it, yikes!
And that is just a small sampling.
I actually think it’s a Win-Win. Restaurants get to keep their brands top of mind, while the grocer is selling mostly higher quality prepared items that encourages people to eat at home. Some people actually like the “idea” of dining out while eating at home.
My wife loves it when I prepare a V’s Italian feast…I pick up a bottle of Chianti, some garlic bread, and a salad kit. And if it’s one of her late working nights and I’ve surprised her?? Light the candle sticks, and turn on the Sinatra, we’re not going out for the rest of the night!
OK, so we’re a little weird, we have a passion for food at our house…and a gym membership.
Another MNB user wrote:
Would you have grocers remove the bagged whole-bean Starbucks coffee from the shelves as well?
MNB user Terry Pyles wrote:
Your position on this subject is well documented and consistent for a long time, now. And yet there are any number of successful, well respected grocery chains who carry these products, and have been doing so for years now. There must be a reason for it. Perhaps it’s because this isn’t really a share-of-stomach issue at all. Maybe you are interpreting that metric too broadly. I suggest that the consumer doesn’t really decide whether to go to TGI Friday’s for their mozzarella sticks, or buy them frozen at the grocery store and heat them up at home. Likewise Chi-Chi’s tortilla chips, Taco Bell cheese sauce, and on and on. I submit to you that these will always be separate and different eating occasions. If the consumer wants the dining out experience they will decide from among the plethora of restaurant choices and formats. Rather the choice taking place on the grocer’s aisle is all about those eating occasions already decided to be in-home. When I choose to snack at home do I want the usual standard fare? Or do I want something that maybe reminds me of one of my favorite restaurants? As an eating destination these restaurants are no threat to the grocer, as the consumer has already made up their mind to go out. On the grocer’s shelves these restaurants become just another brand. One whose name recognition may influence the buying decision and ultimately increase sales and profits for the retailer. Nothing wrong with that that I can see.
Now, if the argument is that the supermarket is losing eating occasions to dining out, well, that’s a whole different issue. One that requires strategic decisions way beyond whether or not to stock a certain brand.
MNB user Al Kober wrote:
Then get rid of all Bob Evens, Chilies, Boston Market, etc Brands that are, as your called them, competitors. The reason these retailers do carry these brands is because many retailers do not see these others as competitors. Yes, they compete for "share of stomach" but are not competitors. Many successful and progressive retailers embrace these other food outlets with great success, and without loosing market share to them.
MNB user Mike Kirshenbaum wrote:
I disagree with your view. That would exclude supers from carrying things like Starbucks Coffee and Carvel ice cream cakes.
And there were plenty more.
I think that qualifies as a “shellacking.”
Look, I understand that what I’m suggesting is fairly radical. (Haven’t done much radical since I protested against Nixon back in the early seventies…so what the hell.)
And I can appreciate the fact that if my position were adopted, a lot of excellent brands would not be found in supermarkets.
Let me put it another way.
Why can’t the supermarket make a better ice cream cake, better mozzarella sticks, better barbecue sauce than the packaged products that carry names licensed out by fast feeders and other restaurant chains?
See, I do think that supermarkets are losing eating occasions to dining out. Or taking out from other dining establishments. And I’d be surprised if anyone would disagree with me.
I’m not really suggesting an absolutist approach. What I am suggesting is a complete change of mindset on the part of many supermarket chains, one that identifies all the possible competitors for share of stomach and get aggressive about competing.
Fast food and restaurant brands are just a symbol of what I’m talking about here. But symbols can be important. And I think I’m right on this one.
By the way, I shop at a store each week that pretty much does this, focusing almost exclusively on its own brands and working to find differential advantages for itself in all the categories that it believes matter. And the store where I shop each week – Stew Leonard’s - only does about $2 million a week in sales with a total of about 1,200 SKUs.
In a story about the difficulty of avoiding “made in China” products MNB quoted a CNN story as saying that “50 percent of the apple juice imported in the United States today comes from China. That's an estimated 161,000 tons of apple juice compared to the 110,000 tons produced in the United States, according to the USDA.”
Which prompted MNB user Christina Daugert to write:
My question is WHY do we import apple juice? I had noticed this on a bottle … that stated made with concentrate from China about 6 months ago and haven't purchased a bottle since.
This statement explains why so many people in the US food industry are afraid of Country of Origin Labeling (COOL) legislation.
MNB noted that Fortune reported on continuing problems being encountered by Wal-Mart in Japan, in part because it fired 25 percent of headquarters management there when it took control of Seiyu, and I suggested in my commentary that I couldn’t imagine Wal-Mart under its current management pulling out of Japan because it would be such a “loss of face.”
One MNB user responded:
Well, Kevin, obviously you've never worked directly with a Japanese company. For all the progressive and innovative things that come out of Japan, certain management styles and employee issues reign supreme - a lesson that Wal-Mart may have ignored to the ultimate tune of $1 billion plus. You can't shove your management style down people's throats -- no matter which company you have acquired, no matter in which part of the world, but especially in Japan. And there are plenty of corporate cadavers out there to prove it. Was Wal-Mart so stupid or so arrogant not to study the Japanese marketplace and cultural mindset thoroughly before alienating such a staunch an loyalty-based culture. I guess so. It's a wide gap between Bentonville and the Land of the Midnight Sun. My quarter is on Wal-Mart limping along for 2-5 years and then finding a suitable cash buyer to recoup their ever widening losses. My money is on the uber determined Japanese to outmaneuver and thus firmly put shame on Wal-Mart. They have more practice at it...trust me!
MNB user Tim Pacey wrote:
Two small statements struck me in this article: The use of “carping” in the quote from Fortune, and your “loss of face.” Were either of the authors aware of the significance of their choice of words in Japan? While “carping” is negative in western culture, a carp is considered good luck and a sign of fortune in Japan. I would never use that word when speaking in context of Japan. When you used “loss of face” did you think how appropriate it was and the gravity of meaning in the oriental world? I’m sure Wal-Mart has used (incidentally, I personally hate it when utilized is over utilized) tremendous assets to examine the Japanese market, but how well do they understand it when they fired 25 percent of the headquarters staff. Did they not know how that would be received?
While I don’t expect you, Kevin, to be an expert on Japanese business, I’m wondering if Ed Kolodzieski (who runs Wal-Mart’s Japan operations) was conscious of his choice of words, and Wal-Mart of its decisions. Sure, the country is westernizing/ed, but from the U.S. individual to the U.S. corporation, only an understanding of their culture, business and traditional, similar to how we understand our own, allows an enterprise or international relationship to flourish, just as inversely an ignorance of our domestic customers diminishes our industry here.
MNB had a story the other day about Sainsbury in the UK testing something that already has been implemented in Australia – the use of plastic soda-type bottles for wine. Which I decried as yet another symbol of the decline of western civilization.
MNB user Jim Klump responded:
As the proprietor of a fine wine shop in upstate New York, I felt the need to weigh in on this one. I have not yet seen plastic wine bottles, but one of my distributors brought in Australian wine in one liter aseptic "juice box" style containers the other day. Just what we need, adult juice boxes. This is being done as a move toward "greening" the wine industry. The package is recyclable and weighs less than glass, thus saving energy in transportation.
I have no problem with screw tops on wine or "alternative closures" as we call them in the industry, and we are already seeing better, but not great, wines in 3, 4 or 5 liter BIB or bag in box containers, but the thought of the traditional 750 ml bottle giving way to either plastic or the "juice box" is a bit hard to accept. Plus, while the juice box may "keep" the wine as well as glass, plastic "breathes" and wine, like soda, would have a severely limited life if bottled in plastic. No laying down the plastic bottled cabs in the old wine cellar for a few years.
The mind reels. The heart breaks.
I got some criticism for my suggesting that before people start calling for the ouster of Whole Foods CEO John Mackey, they ought to wait for some sort of finding that Mackey actually did something wrong when he used message boards to anonymously criticize his competitors.
One MNB user wrote:
You should give us a break on this one. I have nothing to do with the company or the situation. But I think any observer of food retailing, and business in general, might suggest that Mackey step down. Ask yourself - if Ed Lampert (or someone else with whom you don't approve) had been doing the same thing, would you be waiting for government regulators to determine any illegal conduct before calling for his head on a platter?
I don’t particularly approve of Mackey…I just think he’s a better retailer than Lampert or Larry Johnston, and my arguments against them were more related to performance issues than legalisms.
Besides, if I can’t use MNB to smack around people of whom I don’t approve, what’s the point?
But I got at least one email I liked:
Thank you for the link, for your selfless attitude, common sense, sense of humor and terrific, well-balanced site. It is always a good read. On rare occasions I disagree with your point of view, but find I always respect it.
Thanks, Mom.
Actually, this wasn’t from my mom. But somewhere, she’s smiling.
…at the risk of seeming completely reactionary, I am going to suggest that supermarkets not carry this product – because they should not carry ANY PRODUCTS that carry the brand name of a competitor. Any item that carries the brand name of a fast food or restaurant chain that competes for the consumer’s share of stomach simply should not be stocked by a supermarket that really, really wants to be competitive.
I understand that this seems drastic, and that supermarkets see themselves as providing the broadest possible choices for consumers. But I submit that no consumer will stop shopping at a supermarket that doesn’t carry this sort of stuff, and that instead carries high-quality, high-value food items that reinforce or simply don’t damage a store’s brand image.
And that’s what items from places like Burger King do, in the long run. They erode equity.
Draw the line now, and stop carrying them. Celebrate your own brand, and stop giving shelf space to the competition.
MNB user Aaron Algazy wrote:
There are many items in stores that have ‘competitors’ (as you say) names; Wolfgang Puck, California Pizza Kitchen, Starbucks to name a few. I am surprised to hear you say that the stores should not carry these items. To use your words, with a little tweak: ….I submit that no consumer will stop shopping at a supermarket that DOES carry this sort of stuff. AND, it is not like the supermarkets are expecting to take all the business away from fast food places (that’s just crazy talk), if we can take some of the profits by selling what someone wants, isn’t that what it’s all about? Sales, Sales, Sales.
Grocers need to give the Customer what they want when they want it.
Another MNB user wrote:
I can’t wait for the shellacking you’re going to take for the BK Chips comments.
Here in Kansas City you can buy all kinds of items from local and chain restaurants. Just a sampling:
• V’s Italian Restaurant – Frozen pasta sauce and meatballs (which I absolutely love!)
• Chili’s Restaurant – Salsa
• On the Border Restaurant – Chips and Salsa
• KC Masterpiece – BBQ Sauce (albeit the sauce was first, then the eatery)
• Zarda BBQ – Baked beans and smoked ribs usually fresh in the deli case
• White Castles – You can get their burgers (belly bombers) in the freezer case, but wouldn’t recommend it, yikes!
And that is just a small sampling.
I actually think it’s a Win-Win. Restaurants get to keep their brands top of mind, while the grocer is selling mostly higher quality prepared items that encourages people to eat at home. Some people actually like the “idea” of dining out while eating at home.
My wife loves it when I prepare a V’s Italian feast…I pick up a bottle of Chianti, some garlic bread, and a salad kit. And if it’s one of her late working nights and I’ve surprised her?? Light the candle sticks, and turn on the Sinatra, we’re not going out for the rest of the night!
OK, so we’re a little weird, we have a passion for food at our house…and a gym membership.
Another MNB user wrote:
Would you have grocers remove the bagged whole-bean Starbucks coffee from the shelves as well?
MNB user Terry Pyles wrote:
Your position on this subject is well documented and consistent for a long time, now. And yet there are any number of successful, well respected grocery chains who carry these products, and have been doing so for years now. There must be a reason for it. Perhaps it’s because this isn’t really a share-of-stomach issue at all. Maybe you are interpreting that metric too broadly. I suggest that the consumer doesn’t really decide whether to go to TGI Friday’s for their mozzarella sticks, or buy them frozen at the grocery store and heat them up at home. Likewise Chi-Chi’s tortilla chips, Taco Bell cheese sauce, and on and on. I submit to you that these will always be separate and different eating occasions. If the consumer wants the dining out experience they will decide from among the plethora of restaurant choices and formats. Rather the choice taking place on the grocer’s aisle is all about those eating occasions already decided to be in-home. When I choose to snack at home do I want the usual standard fare? Or do I want something that maybe reminds me of one of my favorite restaurants? As an eating destination these restaurants are no threat to the grocer, as the consumer has already made up their mind to go out. On the grocer’s shelves these restaurants become just another brand. One whose name recognition may influence the buying decision and ultimately increase sales and profits for the retailer. Nothing wrong with that that I can see.
Now, if the argument is that the supermarket is losing eating occasions to dining out, well, that’s a whole different issue. One that requires strategic decisions way beyond whether or not to stock a certain brand.
MNB user Al Kober wrote:
Then get rid of all Bob Evens, Chilies, Boston Market, etc Brands that are, as your called them, competitors. The reason these retailers do carry these brands is because many retailers do not see these others as competitors. Yes, they compete for "share of stomach" but are not competitors. Many successful and progressive retailers embrace these other food outlets with great success, and without loosing market share to them.
MNB user Mike Kirshenbaum wrote:
I disagree with your view. That would exclude supers from carrying things like Starbucks Coffee and Carvel ice cream cakes.
And there were plenty more.
I think that qualifies as a “shellacking.”
Look, I understand that what I’m suggesting is fairly radical. (Haven’t done much radical since I protested against Nixon back in the early seventies…so what the hell.)
And I can appreciate the fact that if my position were adopted, a lot of excellent brands would not be found in supermarkets.
Let me put it another way.
Why can’t the supermarket make a better ice cream cake, better mozzarella sticks, better barbecue sauce than the packaged products that carry names licensed out by fast feeders and other restaurant chains?
See, I do think that supermarkets are losing eating occasions to dining out. Or taking out from other dining establishments. And I’d be surprised if anyone would disagree with me.
I’m not really suggesting an absolutist approach. What I am suggesting is a complete change of mindset on the part of many supermarket chains, one that identifies all the possible competitors for share of stomach and get aggressive about competing.
Fast food and restaurant brands are just a symbol of what I’m talking about here. But symbols can be important. And I think I’m right on this one.
By the way, I shop at a store each week that pretty much does this, focusing almost exclusively on its own brands and working to find differential advantages for itself in all the categories that it believes matter. And the store where I shop each week – Stew Leonard’s - only does about $2 million a week in sales with a total of about 1,200 SKUs.
In a story about the difficulty of avoiding “made in China” products MNB quoted a CNN story as saying that “50 percent of the apple juice imported in the United States today comes from China. That's an estimated 161,000 tons of apple juice compared to the 110,000 tons produced in the United States, according to the USDA.”
Which prompted MNB user Christina Daugert to write:
My question is WHY do we import apple juice? I had noticed this on a bottle … that stated made with concentrate from China about 6 months ago and haven't purchased a bottle since.
This statement explains why so many people in the US food industry are afraid of Country of Origin Labeling (COOL) legislation.
MNB noted that Fortune reported on continuing problems being encountered by Wal-Mart in Japan, in part because it fired 25 percent of headquarters management there when it took control of Seiyu, and I suggested in my commentary that I couldn’t imagine Wal-Mart under its current management pulling out of Japan because it would be such a “loss of face.”
One MNB user responded:
Well, Kevin, obviously you've never worked directly with a Japanese company. For all the progressive and innovative things that come out of Japan, certain management styles and employee issues reign supreme - a lesson that Wal-Mart may have ignored to the ultimate tune of $1 billion plus. You can't shove your management style down people's throats -- no matter which company you have acquired, no matter in which part of the world, but especially in Japan. And there are plenty of corporate cadavers out there to prove it. Was Wal-Mart so stupid or so arrogant not to study the Japanese marketplace and cultural mindset thoroughly before alienating such a staunch an loyalty-based culture. I guess so. It's a wide gap between Bentonville and the Land of the Midnight Sun. My quarter is on Wal-Mart limping along for 2-5 years and then finding a suitable cash buyer to recoup their ever widening losses. My money is on the uber determined Japanese to outmaneuver and thus firmly put shame on Wal-Mart. They have more practice at it...trust me!
MNB user Tim Pacey wrote:
Two small statements struck me in this article: The use of “carping” in the quote from Fortune, and your “loss of face.” Were either of the authors aware of the significance of their choice of words in Japan? While “carping” is negative in western culture, a carp is considered good luck and a sign of fortune in Japan. I would never use that word when speaking in context of Japan. When you used “loss of face” did you think how appropriate it was and the gravity of meaning in the oriental world? I’m sure Wal-Mart has used (incidentally, I personally hate it when utilized is over utilized) tremendous assets to examine the Japanese market, but how well do they understand it when they fired 25 percent of the headquarters staff. Did they not know how that would be received?
While I don’t expect you, Kevin, to be an expert on Japanese business, I’m wondering if Ed Kolodzieski (who runs Wal-Mart’s Japan operations) was conscious of his choice of words, and Wal-Mart of its decisions. Sure, the country is westernizing/ed, but from the U.S. individual to the U.S. corporation, only an understanding of their culture, business and traditional, similar to how we understand our own, allows an enterprise or international relationship to flourish, just as inversely an ignorance of our domestic customers diminishes our industry here.
MNB had a story the other day about Sainsbury in the UK testing something that already has been implemented in Australia – the use of plastic soda-type bottles for wine. Which I decried as yet another symbol of the decline of western civilization.
MNB user Jim Klump responded:
As the proprietor of a fine wine shop in upstate New York, I felt the need to weigh in on this one. I have not yet seen plastic wine bottles, but one of my distributors brought in Australian wine in one liter aseptic "juice box" style containers the other day. Just what we need, adult juice boxes. This is being done as a move toward "greening" the wine industry. The package is recyclable and weighs less than glass, thus saving energy in transportation.
I have no problem with screw tops on wine or "alternative closures" as we call them in the industry, and we are already seeing better, but not great, wines in 3, 4 or 5 liter BIB or bag in box containers, but the thought of the traditional 750 ml bottle giving way to either plastic or the "juice box" is a bit hard to accept. Plus, while the juice box may "keep" the wine as well as glass, plastic "breathes" and wine, like soda, would have a severely limited life if bottled in plastic. No laying down the plastic bottled cabs in the old wine cellar for a few years.
The mind reels. The heart breaks.
I got some criticism for my suggesting that before people start calling for the ouster of Whole Foods CEO John Mackey, they ought to wait for some sort of finding that Mackey actually did something wrong when he used message boards to anonymously criticize his competitors.
One MNB user wrote:
You should give us a break on this one. I have nothing to do with the company or the situation. But I think any observer of food retailing, and business in general, might suggest that Mackey step down. Ask yourself - if Ed Lampert (or someone else with whom you don't approve) had been doing the same thing, would you be waiting for government regulators to determine any illegal conduct before calling for his head on a platter?
I don’t particularly approve of Mackey…I just think he’s a better retailer than Lampert or Larry Johnston, and my arguments against them were more related to performance issues than legalisms.
Besides, if I can’t use MNB to smack around people of whom I don’t approve, what’s the point?
But I got at least one email I liked:
Thank you for the link, for your selfless attitude, common sense, sense of humor and terrific, well-balanced site. It is always a good read. On rare occasions I disagree with your point of view, but find I always respect it.
Thanks, Mom.
Actually, this wasn’t from my mom. But somewhere, she’s smiling.
- KC's View:
