Efficiency Is No Cure for Phony Baloney

The Wall Street Journal: “Over the past 2½ years, thousands of workers lost their jobs, and iconic Kraft buildings, including the original Oscar Mayer headquarters in Madison, Wis., have been shuttered and sold. The cost-cutting project is now wrapping up, giving Kraft Heinz Co. the highest operating profit margin among its peers in the U.S. food industry.”

Troy Shannan, Kraft Heinz’s head of North America supply chain, comments: “We look at pretty much any opportunity we have to drive efficiency. And we use the savings from those efficiencies to reinvest in our brands and our businesses and back into our supply chain.”

“Still, Kraft Heinz is grappling with a problem that can’t be solved by increasing efficiency: U.S. sales of cold cuts and other processed meats slipped to $21.3 billion last year, from $21.9 billion in 2015. Oscar Mayer’s market share dropped to 17.5% from 18% five years ago, according to Euromonitor. Natural and organic brands, as well as small labels buying from local farms, have nibbled away at sales. ‘Consumers are looking for something they think is handmade or looks handmade,’ said Chris Fuller, a consultant to meat processors.”


Unilever to Weed Out ‘Fake News’ Ad Support

The Wall Street Journal: “Unilever PLC is threatening to pull back its advertising from popular tech platforms, including YouTube and Facebook Inc., if they don’t do more to combat the spread of fake news, hate speech and divisive content.” In prepared remarks, Chief Marketing Officer Keith Weed said: “Unilever will not invest in platforms or environments that do not protect our children or which create division in society, and promote anger or hate … We will prioritize investing only in responsible platforms that are committed to creating a positive impact in society.”

“Unilever has been among the more outspoken advertisers pushing for the online ad industry to clean up the ad fraud that exists on the web and offer up stronger measurement standards to ensure that advertisers are buying ads that can be seen by real people. While the company continues to push for those initiatives, Mr. Weed said that consumers don’t care about online advertising measurement issues. They do care about ‘fake news’ and ‘Russians influencing the U.S. election,’ he added. Rather than issue a public list of demands, Mr. Weed said he wants to work privately with the tech companies to come up with solutions.”

“Mr. Weed said that advertisers need to be outspoken about issues on tech platforms, since they are almost entirely supported by billions of ad dollars. ‘One can start by not putting ads on content we do not want to encourage,’ he said.”


Bad Apples Spoil Bean’s Return Policy

Business Wire: “It used to be that customers could bring back items bought at L.L. Bean’s stores and online any time they felt it didn’t live up to their expectations. The guarantee covered the item’s full lifetime. Now, the policy extends for one year only. After that, customers can only return an item if it proves defective. In another change to the policy, customers will also now need to provide a proof of purchase for a return or exchange.”

“L.L. Bean relayed the news to customers in the form of an emailed letter from Shawn O. Gorman, the company’s executive chairman and great-grandson of founder L.L. Bean. In the letter, Gorman wrote that it was people who took advantage of the generous return policy that forced the company’s hand.”

He wrote: “Increasingly, a small, but growing number of customers has been interpreting our guarantee well beyond its original intent. Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales. Based on these experiences, we have updated our policy.”


Purchase Brands vs. Usage Brands

Harvard Business Review: “Where traditional brands focus on positioning their brands in the minds of their customers, digital brands focus on positioning their brands in the lives of their customers. Furthermore, they engage customers more as users than as buyers, shifting their investments from pre-purchase promotion and sales to post-purchase renewal and advocacy.”

“Purchase brands focus on creating demand to buy the product, while usage brands focus on creating demand for the use of the product … Purchase brands emphasize promotion; usage brands emphasize advocacy … Purchase brands worry about what they say to customers; usage brands worry about what customers say to each other … Purchase brands try to shape what people think about the brand along the path to purchase; usage brands influence how people experience the brand at every touchpoint.”

“The simple view would be that traditional brands are purchase brands and digital brands are usage brands. But there are exceptions, including brands like Visa, FedEx, Lego, and Costco, which exhibit many of the characteristics of usage brands … They think of customers less as one-time buyers and more as users or members with an ongoing relationship … Purchase brands focus on the ‘moments of truth’ that happen before the transaction, such as researching, shopping, and buying the product. By contrast, usage brands focus on the moments of truth that happen after the transaction, whether in delivery, service, education, or sharing.”


My Esel: Bespoke Design in Wood

Bike Rumor: “We’ve seen plenty of bike frames made out of wood over the past few years, but few have taken advantage of the material’s workability to add more customization into the frame building process. My Esel takes that issue head on … For each bike that they produce, My Esel uses a configuration tool that lets buyers enter their exact body measurements and desired riding position, to scale the frame fit specifically to them, before it is produced through a CNC manufacturing process tailored to each buyer.”

“The key to that customization has been developing a parametric design software that lets My Esel plug in all of the key measurements of a rider’s body and translate that into a scalable frame layout part of which is then produced on a CNC mill … The software also adjust to three primary riding styles Sport/Racing, Urban/Trekking, or Comfort/Holland … so you not only get a bike the right size for you put with a position adjusted to your intended style of riding.”

“The bikes get customizable finish too. The frames are built from ash veneer hardwood plywood and can get four layers of clearcoat to show the grain, with black or white painted finishes optional as well. A walnut veneer is apparently available as an upgrade, as is a dark black stain of the standard ash.”


How IKEA changed the shopping experience

The Washington Post: IKEA, “which has 412 locations in more than 40 countries, has become an international empire. Its sprawling stores with their tortuously winding routes have continued to thrive in an era of hurried online shopping. Analysts say Ikea has been successful in not only getting shoppers to linger for hours, but also getting them to come back, over and over, whether for mattresses or meatballs.”

Warren Shoulberg, a consultant, comments: “Before Ikea came along, furniture shopping was a laborious task that a lot of people dreaded because they felt like they were making a decision they had to live with for 30 years. Then Ikea showed up and said, you can buy something and use it for a couple of years — or you can keep it longer — but this isn’t necessarily something you’re going to pass down to your kids or your grandkids. That was a remarkable transition.”

“The retailer has also been successful, he added, in creating a shopping destination. Traditional furniture stores may line up all of their sofas in one section and beds in another, but Ikea displays items by room, so shoppers can see how different pieces might look together … Its success has also given way to a cottage industry of businesses that specialize in assembling Ikea furniture. Ikea itself has gotten into the fray: In September, it purchased TaskRabbit, a start-up that providers contractors for odd jobs, to appeal to a generation of time-strapped consumers who want Ikea furniture without the hassle of assembling it.”


Retail Theater: The Shellfish Spa

Supermarket News: “Retailers say making the shopping trip an experience is one way they can drive traffic into their stores. And a little theater in the seafood department is actually helping to drive sales, according to one Northeast retailer, Shoprite, which has added the Shellfish Spa. The device preserves live product such as clams, oysters, mussels, steamers and cockles while presenting them in an eye-catching display. The container bathes shellfish in a continuous stream of saltwater and maintains an ocean-like environment for peak freshness.”


Why Do Pizza Chains Attract Republicans?

Morning Consult: “Large pizza chains accounted for 36.5% of sales in states that President Donald Trump won in 2016, compared to 23% of sales in states that voted for Hillary Clinton … Pizza industry experts suggest the popularity of major chains in traditionally conservative states — and to some extent, price and the level of more premium toppings — could be reasons for the political divide.”

A theory: “While pizza was plentiful in Italian immigrants’ urban communities along the East Coast around the turn of the 20th century, it was sparse elsewhere in the United States. It wasn’t until the late 1950s and early 1960s, when companies like Pizza Hut, Domino’s and Little Caesars cropped up in the Midwest, that pizza was brought to the wider American public. During the industry’s early years, when chains were starting, companies focused their marketing on lower-income neighborhoods and presented pizza as an inexpensive dinner option in those Midwestern hubs.”

Carol Helstosky, author of Pizza: A Global History, comments: “If we think about this in culinary terms, the emphasis is on cost, reliability, standardization and efficiency … Food historians might label these culinary values conservative, in the sense that the consumer wants the same product, and qualities like fast delivery matter more than particular ingredients or the overall taste.”


Jen Yee: The Architecture of Dessert

The New York Times: Jen Yee “who oversees pastry for all the restaurants in the Resurgens Hospitality Group, used to be an architect, and she designs desserts the way she once did building interiors: meticulously sketching every element, testing many prototypes. And these days she has plenty of company: Many of the country’s top pastry chefs have practiced or studied architecture.”

“Tired of having to abide by mundane building codes and regulations, and wanting something more creative, she began studying pastry in 2002 at Le Cordon Bleu in London, while working as a pastry assistant at the Connaught hotel for the chefs Gordon Ramsay and Angela Hartnett. She found that her architectural training applied in the pastry kitchen as well.”

She comments: “Being an architect is not all about the structure. It’s about the intent. How will this improve someone’s life? Desserts are also about thoughtfulness. What are the ways I can manipulate this apple? What will highlight what’s grown here? It’s about looking at your environment and seeing what will be functional and beautiful in that space.”


Drone Promo: The Kentucky Flying Object

The Verge: KFC’s “new, India-only Smoky Grilled Wings will come packaged in a box with detachable drone parts. Although customers will have to look up instructions online, they can eventually assemble the box and its parts to turn it into a Bluetooth-connected drone.”