business news in context, analysis with attitude

On the subject of the new California law requiring chain restaurants to post calorie counts on their menu boards, MNB user Edward Zimmerman wrote:

This is the beginning of the type of dance that the trial lawyers used to topple the cigarette manufacturers. What did you know, when did you know it….?

Approximately 70% of restaurant meals receive some type of customization, “Can I get extra mayo?”

“Chain” restaurants will publish the calorie count and some unsuspecting employee will indeed slaver a bun with the extra mayo. The “customer” will run out the door, hand the sandwich to a lawyer who will have it “tested” and sue the chain because the restaurant violated the “Truth in Menu Act”.

Once restaurants realize the game, they will refuse to customize and more restaurant food will become automated, assembled in a factory, frozen, shipped, heated and served. This will reduce quality, freshness and ultimately offer customers less choice.

Can the government please, please stop telling us how to live and eat? Let Americans be free to live their own lives and make their own choices.

Not sure that calorie count transparency is at odds with the ability to make choices.

Responding to our stories about tainted Chinese dairy products, one MNB user wrote:

I found it interesting that Heinz (one assumes others) found it necessary, on Monday last, to FINALLY check the materials they have been receiving from China that they have been putting in BABY FOOD. Hello America, hello world, where are you? Candy, pet food, dairy, toys (lead) maybe everything else – what makes any executive think that EVERYTHING coming in from China does not need to be checked for hazardous content (and every other foreign country with no safety checks)? Where is the consumer outrage towards our own companies for this delay? Is it possible that consumers are unaware of how much of their food products contain ingredients from China and other foreign countries? Do consumers know that processed food will not be covered by the new COOL enactment? It is unfortunate that situations like this continue to show that so many of our companies put profits so far ahead of people that product safety is investigated after the problem is exposed. Either that or we are incompetent. I hope that MNB continues to push on safety – for example –your stand on Mad Cow testing.

Got the following email from MNB user Matt Nitzberg responding to my rant yesterday about in-store sampling:

The challenge for most manufacturers and retailers is not around the conceptual appeal of demonstrations and sampling. The problem (as is often the case) is about money and the ability to calculate an ROI from what is a relatively expensive marketing effort, especially compared to traditional methods of coupons and discounts.

What’s the problem with the calculation? Most companies account for the expense of in-store demos and sampling on the day(s) it occurs. Unfortunately, this same accounting approach is often used to calculate the benefit as well: ‘How many incremental purchases were there during the event, compared to stores where the sampling did not occur?’ Since demonstrations and sampling are typically employed to create quality trial – which in turn is meant to increase the repeat purchase rate – it’s paradoxical that repeat purchase behavior often goes unmeasured.

As a result of the short time horizon for calculating the return, manufacturers and retailers are frequently discouraged by the appearance of a weak (often negative) ROI. Thus, shoppers are given far fewer chances to get exposed to new products in this compelling way.

The good news is that some retailers and manufacturers are beginning to use shopper data to create a more realistic ROI model. Instead of using only the purchases during the event, these companies can evaluate the 6-month or Year 1 impact of converting shoppers via in-store demos or samples, and compare this information to the results from other means of conversion. These companies are learning what works and what doesn’t, often from small, below-the-radar efforts. They are also learning which types of shoppers react to the in-store efforts (for example, are they brand loyals, store loyals, new triers, variety seekers, etc.) and whether additional promotion activity is helpful or wasteful. And they are learning this over time, taking the pressure off the short term focus for calculating the ROI.

My hope – as an industry member and as a shopper – is that companies will use these insights to support more demonstrations and sampling events, leading to better shopping experiences and raising the level of new product success.

MNB user Aleta Fullenwider chimed in:

I love the fact that you continue to report on this marketing approach. I was a sampler while in college and represented all different types of companies in the retail environment. I couldn’t agree more with your statement that “Too many stores think that sampling is a program that needs to be funded by manufacturers, or that they are the exception only to be run on the occasional busy Saturday...” Samplers that are representing a CPG are primarily concerned with that specific product and have no incentive to learn anything about the store. I remember that consumers asked me all types of questions from “Where is the bathroom ”to“ How is long is this product going to be on sale?” Unless I shopped at that store, I usually could not answer their question. I believe that if retailers had their own staff to sample food products (i.e. Private label), this could enhance the customer experience by ensuring that samplers were very educated about the store, layout, products, etc. This helps to provide a consistent image for retailers and allows them to have more control over the messages that are being delivered to their customers.

While this email actually was about Fresh & Easy Neighborhood Markets, it relates to the discussion of sampling:

I do have to say that I've shopped there on 4 occasions in the last 2 weeks. To dovetail on the sampling article from today.. I sampled the F&E frozen Pizza and was so impressed that we ended up with 3 varieties for dinner that night. I also sampled the carnitas (a fresh, ready to eat item) that were really good, too, and have plans to purchase them next time I go in.

‘Nuff said.
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