BrandWatch by Michel Gutsatz

Marketing vs. Michael Pollan: 1-1

For over 20 years, Michael Pollan has been carrying out the passionate work of deconstruction of food industry abuses, and their consequences in matters of health and nutrition. He sees himself as a defender of "real foods", and critic of "food-like products".  The defenders of organic and natural, the "Locavores", the proponents of "slow food" are among his most assiduous readers. Now he has a new category of readers: marketers of food brands.

In his book "In Defense of Food: the Myth of Nutrition and the Pleasures of Eating" (2008), Michael Pollan warns us: "Avoid food products containing ingredients That are a) Unfamiliar b) unpronounceable c) more than 5 in number, or that include d) high-fructose corn syrup". Marketers of several brands have taken it literally. Here are three examples:
Häagen-Dasz launched a new range of ice cream, "FIVE" in 2009: "All-natural ice cream crafted with only five ingredients for incredibly clean, balanced flavour and ... Surprisingly less fat!". A huge success, it already represents approximately 10% of sales of the brand.
 


Let's look more closely at the nutrition claims for this range of ice cream.

• The first point is clear: the five ingredients are presented on the front of the pack - and not in an incomprehensible table on the back of the packaging.
• The nine varieties are mono-products (vanilla, caramel, lemon, mint, etc.). The brand has therefore taken precautions against introducing complexes combinations such as "Banana Split" or "Caramel Cone", which contain up to 17 ingredients, some "unpronounceable" and including "corn syrup". 

  
  
  
• Four of the varieties are actually a reformulation of the traditional range of the ice-cream brand (chocolate, vanilla, strawberry, coffee) – already made from ... 5 ingredients! 
 
 

  
  
  
  
• The essential difference lies in the efforts made on the fat content - hence the calorie content - of the ice cream. The vanilla ice cream therefore was brought down from 290 to 220 calories, and total fat content from 27% to 17%.

Frito Lay calls attention to its Classic Potato Chips - by advertising the fact that they are composed of just "three simple ingredients: potatoes, natural oil and a pinch of salt" ... one can even enter a code found on the packaging on their website and identify the producer of the potatoes.

Pillsbury offers a new range of cookie dough 'Simply' - using "recognizable" ingredients and the manufacturing process "just like home-cooking".

What can we learn from these recent examples (there are others such as Starbucks, Campbell, Kraft ...)?

Health Allegations: Kellogg and Others

April 2009: The FTC (Federal Trade Commission) pulled up Kellogg (see decision here), which had proclaimed, on its packaging and in its advertisements, that its "Frosted Mini Wheats" cereal was "clinically shown to Improve kids' attentiveness by Nearly 20%".  Although only 11% of the children involved in the study in question showed a 20% improvement in concentration as claimed...

May 2009: FDA bans General Mills from claiming that their Cheerios lowers the rate of cholesterol (see the article in the WSJ blog).
November 2009: Kellogg is obliged to delete the claim that cereals build the immune defence system of children from its Cocoa Krispies packaging (see my post of November 7, 2009).
June 2010: FTC prohibits Kellogg from claiming that its Rice Crispies has health benefits...
 ... and the company decides, in order to settle this dispute, to avoid asserting the benefits relating to, "cognitive health, process or function provided by any cereal or any morning food or snack food", except if these claims were scientifically validated.

Actimel UK: Of course, this might lead us to think that all these examples only concern the U.S. - and that the new European regulations regarding health claims and nutrition claims will protect us from these marketing excesses. However, one of the major consequences of these issues was the withdrawal of Danone's Actimel and Activia files last April. Danone had also been targeted last October by the Advertising Standards Authority (UK) that banned an Actimel advertisement, stating that the health benefits claimed for the product had not been proven.

However, the most serious indirect consequences lie elsewhere: consumers lose confidence in brands, in advertisements and in their "green", "health" or "nutrition" claims (see the paper presented at the Sustainable Brands Conference 2010). By resorting to greenwashing and claims that are misleading, brands are merely feathering the nests of private brands.

A&P's Private Brand Strategy

In less than three years, The Great Atlantic & Pacific Tea Co., a distributor in northeast America, has completely revamped its private brand strategy (see Store Brands Decisions for the complete document). It deserves a detailed analysis.

1. A&P has 435 stores, with four different formats (and 6 store names): Fresh (A&P, Waldbaums, Superfresh) / Gourmet (The Food Emporium) / Discount (Food Basics) / Price Impact (Pathmark). The choice of private brands was made by adapting to the format, the ensign, the store itself and the profile of its catchment area - in a completely flexible manner: "We don't change the strategy of own brands based upon store format. We also don't take a carte blanche approach and put items everywhere. What we do is provide that portfolio of brands within each one of those formats and we determine what best suits what best suits their customer base".
2. To implement this strategy, A&P hired Doug Palmer who successfully launched the "O Organics" private brand at Safeway (which I have several times spoken of on BrandWatch): This is a private brand that is today the leading organic brand in the USA.
3. The private brands (which represent 18% of sales volume) were structured in a conventional 3-level manner (Hartford Reserve as a private label Premium / America's Choice as core range / Smart Price as entry-level) with the creation of two transversals that are completely new: Green Way, an organic private brand and Via Roma, an Italian private brand.
   
   
   
   
   
   Each of these private brands was structured like a real national brand: they carry a story, have a strong graphic identity ... and are presented mostly as independent sales displays, giving them even more impact. Via Roma is in this respect, a real success: it conveys authenticity, proximity, fun ... and not the nth 'Italian brand" of the market (all the visuals are pictures of the inhabitants of an Italian village).
   
   
   
4. There is no mention of the retailer and its stores on the private labels. If one considers the "O Organics" case (which is now present in several stores in the U.S. and abroad), the objective is clear: distribute these private brands at other retailers.

A strategy that is comprehensive and sophisticated - modern design, proximity to consumer expectations: this is in complete contrast to the French strategies where private labels are all standardized under a single store name. Will the sole French distributor who can develop such a strategy (Intermarché) take inspiration from it?

USA: Retailers Promote Local Products

In recent months, several U.S. distribution chains in the U.S. have become aware that consumers are increasingly looking for products that are guaranteed of local origin. Several converging reasons have led to this:

• Some see it as a means of defending regional employment;
• Others see it as a guarantee of authenticity (taste, traditional recipes, handcrafted, products that respect the cycle of the seasons...)
• While others see it as a means of reducing the carbon footprint of the product.

It is for these consumers - called "locavores" – that several initiatives have been taken recently:

1.   Weis Markets, a chain of 154 supermarkets on the East Coast, launched a campaign entitled: "Local and Proud of It”. Wishing to promote the almost 10,000 tonnes of products purchased from 150 regional producers, the brand highlights the fact that 20% of its fresh produce is purchased locally.
   
2. Spartan Stores, a group of 99 supermarkets in the Midwest, promotes 2400 fresh and grocery products produced in Michigan by 42 local suppliers (including Yoplait and Kellogg): "Michigan's Best". The retailer maintains that 10% of the products it sells are produced locally – as against 20% of their private label products.
   
3. The most interesting initiative comes from Meijer which has recently repositioned its premium private label, Meijer Gold, with the slogan "Unique Foods from Unique Places". It is built around 3 main themes: "produced locally" / "family recipes" / "local specialties". Here we find the themes already employed by French private labels such as “Nos Régions ont du Talent” ("Our regions have Talent") from Leclerc or "Reflets de France" (“Reflections of France”) from Carrefour. However Meijer innovates by highlighting producers who are either local or "family owned" - like Whole Foods Market already does.

Thus a growing number of retailers seek to equip themselves with new key factors for success – other than the price factor. Highlighting the origin of their products and the links it creates with the regional production network, in my view, is a way to progress in the future.

Brands & Kidexpo "Could do Better"!

A very special exhibition for children is held every year in Paris since 2007: Kidexpo. Kidexpo is a source of ideas and solutions in all matters related to the bringing-up of children. It is therefore aimed primarily at parents, teachers, childcare professionals ... and at children themselves. 60,000 children attend it along with 30,000 parents ... I was interested in this exhibition because I saw in it a wonderful means of communication and education on topics as sensitive as those of nutrition or organics. But the numbers are (unfortunately) very revealing: Out of the 191 exhibitors (2009) there were in all and for all 7 food brands (Ferrero / Cereal Bio / Coca Cola / D'Aucy / Bel / Orangina Schweppes / Yoplait), and not a single distributor! Some even used the exhibition as just a platform to launch new products (like distributing free samples....).
I think that brands and retailers still have an "archaic" conception concerning communication with regard to children. The reason is twofold:

1. They have not yet understood that they have an important educational role to play: the parents expect institutional and industrial brands and retailers to lead the way and guide them in the basics - how to eat well, how to respect the environment, how to encourage accountable behaviour ... but they are looking for approaches that are enjoyable, new, innovative...
2. They find it difficult to accept the non-commercial: Consumers today expect a relationship that is not immediately targeted sales or marketing. They seek advice and experience. A brand like Apple has understood this perfectly (see my post of 29 June 2008): it is by being strong in the non-commercial aspects that its sales have grown.

Fortunately, others have grasped the opportunity that such a show represents. France Info organizes programs where children act as journalists: Encouraged by real journalists who train them, the children learn to create a programme, and leave with a CD on which it has been registered.

As for the CNIEL (a professional organization on milk), it has admitted that the art of cooking is not transmitted from most mothers to their children and, often, only the grandparents still possess culinary skills. They therefore organized "Cooking Workshops" where grandparents teach their grandchildren how to cook. They discover taste, how ingredients work ... and become keepers of a tradition.
How is it that distributors who wish to be pioneers in matters of nutrition or sustainable development do not invest in this exhibition? How is it that organic brands do not deploy a whole arsenal to teach children about taste? Though they must be careful: They should show imagination and creativity … and turn it into a real strategy!

"Guiding Stars" Goes On-pack

On 4 October 2008, I discussed "Guiding Stars", the nutritional assessment programme from Hannaford Brothers, and explained their strategy:

• Develop an indisputable tool to assess all the products sold on the shelves (including products from national brands) - only 23% had right to a one star minimum!
• Indicate the healthiest products using shelf placards;
• Measure the effect on sales - sales 2 to 4 times higher (depending on category) than products without stars;
• Extend this system to all Delhaize’s U.S. subsidiaries;
• ... then offer Guiding Stars under license to any dealer wishing to implement it.  

The Delhaize Group has just entered a new phase in its strategy: It is displaying on-pack stars on its private brands (Mypbrand.com thank you for the information and photo). It just launched a new private label for children "Good 4 Kids", and "Simple Living" this month, which bear the stars of Guiding Stars!

Thus the national brands are completely encircled : "Guiding Stars", recognized as a reliable system, is displayed on shelf placards (for national brands) – thereby showing up the products that do not carry them, with on-pack stars seen only on the Delhaize private label brands. This initiative plunges many distributors into the heart of the debate on nutrition – barely a few months after the abject failure of the Smart Choices "on pack" indicator launched by ConAgra, General Mills, Kellogg, Kraft, PepsiCo, Unilever, etc.

Cereal Bio – A Pleasant Surprise

In September 2008 the CEO of Nutrition & Santé (Gerblé, Cereal, Milical, Isostar ...) asked me to undertake an analysis of dietary brands and their futures, with a focus on their own brands. When this work was over, I offered three suggestions (among others):

• In a difficult market environment where diet brands are competing with Organics, they should come out of their ghetto and rely upon taste;
• They need to have a real commitment, tell a story, explain the difference between good and bad ingredients, provide information and be transparent;
• Given this context, Céréal is a much stronger brand name than Gerblé ....

He then told me of his plans to make Céréal his Organic brand.
A year later he sent me his wishes, together with a green box: A range of biscuits for children had been added to the Céréal Bio brand. I find this stand quite interesting: a national organic brand for children establishes itself in hypermarkets & supermarkets - this allows it to leave the diet-food shelves (very marginalized) and find a place among the Organics or children’s biscuits... at very competitive prices; a far cry from organic prices (300g of 15 sandwich biscuits at € 2.65 - or 8.83 € / kg compared to Bjorg Bio at 12.18 € / kg), but still quite far from the national brands (low-sugar Prince de Lu at 5.38 € / kg).

My reticence relates to another aspect: the discourse of the brand. Here are two points that seem problematic:

• Cereal Bio has chosen a universe (graphic style and tone) that has become commonplace today – one that all brands (national and private brands) for children adopt today: a totem figure that addresses children in an entertaining and educational manner;
• The packaging is publicized by a website on which there are games and information, www.grainedebio.com, which in itself is an excellent initiative. My question concerns the content of the site itself. What more does it offer than other distributors’ Private Brands’ sites for children (Auchan’s Rik & Rok / Carrefour Kids / the Zigos Club from Intermarché ..)? The motto "apprendre en s’amusant” (“have fun while you learn") endorsed by everyone involved is a capitulation to contemporary triviality, what Hermann Hesse called "a deluge of cultural values and fragmented knowledge, isolated and deprived of their meaning" (The Glass Bead Game, 1943). All Céréal Bio does here is to copy private brands, when it should adopt a national brand attitude and create a world that speaks about organic in an original way.

We are far from the worlds of Innocent and Michel & Augustin: these brands invented a universe immediately identifiable – one that addresses (and appeals to) both adults and children. It has two characteristics:

1. It is based on humour;
2. It is educational – giving meaning to consumption and to the purchase the products: All the games, riddles and information help consumers to increase their knowledge in matters of nutrition.

There remains the question of coherence in this children’s range with regard to Céréal Bio: The latter is a classic organic brand, serious, i.e. indistinguishable from the competition. I suggest making the tenor of the children’s brand that of the entire range, and gaining in humour: Of course, this would mean venturing into the territory of Michel & Augustin, but this is modern distribution after all, and supermarket customers (other than Monoprix) also have the right to eat organic and have fun while doing so!

The Consumers Take Control: The GoodGuide Case

One of the topics to which I frequently return in BrandWatch is the taking over of power by consumers: all mega-trends that I have been analyzing in my studies show that the balance of power between brands and consumers is changing. The preferred tool for this empowerment is the Internet, and Web 2.0 in particular. I shall analyze a recent example that originates in the USA. 

The New York Times of June 14, 2009 announced that Dara O'Rourke, professor of environmental policy, University of California, Berkeley, had launched a website, GoodGuide.com, the purpose of which is to provide consumers with more information about consumer products: When a name is entered, one obtains all the nutritional, environmental and social information concerning it, and information about the company that introduced it in the market.
The objective is to measure the impact of each product on (See the methodology adopted here):

• Consumer health when using the product;
• The health of the employees of the companies - by analyzing methods of production and the risks involved;
• Environment - Analysis of the life cycle of the product (among other criteria);
• Society - Analysis of the social policies of the companies, governance, etc ...

This is a proper expert system, that gathers information from dozens of independent sources. More than 70,000 products in food, beauty, home maintenance, etc. have been analyzed and recorded. The beta version currently available, gives the average prices found on the Web for certain products. We learn that the cereal best rated is "Nature's Path Organic Kamut Puffs" (rating of 8.3 out of 10)… and another organic product has the lowest rating: "Kashi, Strawberry Fields Organic Cereal" (rated 4.1).

"What we're trying to do is flip the whole marketing world on its head", said Mr. O'Rourke. "Instead of companies telling you what to believe, customers are making the statements to the marketers about what they care about".
To illustrate this reversal of power, it is worth noting that the iPhone has an application that scans the barcode of a product on the shelves: All the GoodGuide information concerning this product is then downloaded.
Brands must be vigilant and anticipate the development of such initiatives - which I will put on a par with the announcement of the Sustainability Index by Walmart. They will have to reflect on the consequences of this converging movement of consumers and some retailers (mostly American) and therefore fundamentally rethink their values to align them with the fundamental values of the new ethics of consumption that we see emerging before our eyes: respect and transparency.

Nutrition: Target Marks a Perfect Score

Target's private food label brand, Archer Farms, is positioned premium & accessible. It is under this private label that we find the Organic Target range (100 references) and products presented as having "nutritional benefits" ("healthier than other alternatives on the market"). To give substance to this claim, Target accomplished two actions that deserve our attention:

1. The entire Archer Farms range was reformulated in 2008, removing all "trans fats" from its ingredients in order to conform to FDA standards.
2. The "Simply Balanced" range was launched on 30 October (70 references). All these products meet the following criteria:

• Less than 30% of calories from fat;
• Less than 10% of calories from saturated fat;
• 0 grams of "trans fats";
• Less than 25% of calories from added sugar;
• No artificial flavours, synthetic colours, or sweeteners;
• Presence of at least one positive nutrient such as fibres ...

In the absence of national norms - we saw that the FDA has only recently taken up the issue following the "Smart Choices" fiasco - Target defined its own standards of quality nutrition. However, "Simply Balanced" also introduces two significant innovations:

1. Detailed information about Target's criteria on the facing:  The consumer immediately understands the benefits of the product range (as opposed to "Smart Choices" which gave no indication of its criteria on the pack).
2. An offer of "nutritionally balanced" products at private label prices (e.g. breakfast cereals at $ 3.99, where national brand products sell at $ 5.75, or whole wheat pasta at $ 1.48 - the national brand marked at $ 2) - or 25% to 30% cheaper.

This initiative shows once again that retailers are developing private label distribution strategies as real challengers - and that national brands are far from having the imagination, coherence and proximity to the consumer that private labels show.

Nutrition: after Smart Choices, Kellogg's

In May 2009 Kellogg's launched a new variety of "Cocoa Crispies" enriched with vitamins A, B, C & E, in the market.  Nothing extraordinary for the U.S. market. Except that the packaging has a large yellow band saying: "Now helps support your child's IMMUNITY".
It did not take long to hear the outcry. Some have accused Kellogg's of playing on the fears associated with influenza A. The Attorney of San Francisco sent a letter to the FDA and to Kellogg, asking the latter to prove its claim: "I am concerned the prominent use of the immunity claims to advertise a sugar-laden chocolate cereal like Cocoa Krispies may mislead and deceive parents of young children". A professor of nutrition at New York University put forward that, of course, the vitamins in question help to strengthen immunity defences, … just like other nutrients. Another expert went so far as to say that if we followed Kellogg's logic, "you can spray vitamins on a pile of leaves, and it will boost immunity".

After denying all these accusations by highlighting consumer demand for foods with enhanced nutritional qualities ("a need for more positive nutrition"), on November 6th Kellogg's announced that they were withdrawing the incriminating statement from the packaging.
A week after the withdrawal from "Smart Choices" (programme in which Kellogg's took part), we have here another example showing that, in matters of nutrition, nothing will ever be the same again in the US. Food brands will have to fundamentally reassess their approach to nutrition and the FDA will most likely implement regulations similar to those adopted in Europe. I also believe that criticism of industrial foods will intensify - with repercussions felt throughout the world.