Late & Great: Giorgio’s Fred Hayman

The New York Times: The late Fred Hayman “was the banquet and catering manager at the Beverly Hilton in 1961 when he invested several thousand dollars to become the silent partner in Giorgio, a struggling women’s clothing store off Rodeo Drive … The location was nothing special.”

“They saw the street, in their dreams, as a rival to Bond Street in London or Fifth Avenue in New York. Mr. Hayman showcased top designers new to the West Coast … He created a sunny, eye-catching exterior with awnings in bright yellow and white and a clubby interior with a pool table and an oak bar, with free drinks, so men could relax while their wives or girlfriends shopped.”

“Drawing on his hotel experience, he lavished the attentions of a concierge on his customers. He sent handwritten thank-you notes, set up a valet parking service and delivered packages to his best customers in a 1952 Rolls-Royce. By the mid-1970s the A-list clients were pouring in … spending tens of thousands of dollars in one go. Some patrons arrived with an extra limousine to haul away their purchases.”

“It was incredible how the money just flowed in,” Mr. Hayman told The New York Times in 1991. “You really didn’t have to sell. You’d just stand there and the customer would say, ‘I’ll have that and that and that and that.’” Fred Hayman was 90.

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Fashionably Moo: The Rise of the Microdairy

“Add milk to the long list of traditional foods that are being rediscovered by young entrepreneurs and reintroduced in small-batch — and often high-priced — form,” reports The New York Times. “As historically low milk prices leave many mom-and-pop farmers struggling, some are choosing to ride the wave of the nation’s new food awareness … bottling their own milk (and ice cream and yogurt) and selling it directly to customers. And they are heralding the various ways it may be different from conventional milk — whether unhomogenized, organic, from grass-fed cows or locally produced.”

“Now many restaurant menus cite the provenance of their dairy products in the same way they boast of grass-fed rib-eyes and hydroponic tomatoes. And consumers are willing to spend more for boutique milk at farmers’ markets and upscale grocers … Manhattan Milk, a small distributor in New York City, evokes the days of the milkman, delivering glass bottles of grass-fed, organic milk from dairies in the region to doorsteps as far away as Greenwich, Conn … Customers of 1871 Dairy, in Wisconsin, “want more than the word organic slapped on a label; they want the satisfaction of knowing the milk was made close to home, in small batches rather than industrial vats.”

“Customers want to learn the story behind the food to see if it’s the values they hold,” says Joe Miller, the marketing director at Trickling Springs Creamery, a small dairy in Chambersburg, Pa. “The more you open the door for them to see behind the scenes, the more comfortable they feel with your product.”

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Sam Adams: The Craft Beer Revolution Comes To a Head

The Wall Street Journal: “The volume shipped by Boston Beer Co., which makes Sam Adams, last year grew just 3.6% after back-to-back years of more-than-20% gains. The company’s shares have plunged 32% over the past year as investors lose confidence in a quick turnaround. The problem? Sam Adams has gotten too big and familiar to be considered an authentic craft by elitist beer connoisseurs, yet it isn’t hefty enough to have the cost advantages of big brewers.”

“There are more than 4,200 craft breweries now—up from 1,564 in 1999—and together they outsell Boston Beer’s offerings. Plus, over the past year, AB InBev acquired Arizona’s Four Peaks and Los Angeles’ Golden Road breweries, MillerCoors scooped up San Diego’s Saint Archer, and Heineken invested in California’s Lagunitas Brewing Co.”

In response, Boston Beer “is concocting new variations of Sam Adams such as last year’s Sam Adams Rebel Rouser IPA and Grapefruit IPA. This year’s mix includes Rebel Raw, a double India pale ale loaded with bitter hops, and brews infused with nitrogen for creaminess like Nitro Coffee Stout. But even with new recipes, Boston Beer expects beer volume to decline in 2016.”

Founder Jim Koch says he’s been hearing that Sam Adams is no longer new or local since 1985. “I’m excited to see the success of this revolution I helped start,” he says. “I want to continue to drive that success.”

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Chemical Reaction: Hain Celestial Reformulates

The Wall Street Journal: “Hain Celestial Group Inc., like upstart Honest Company Inc., has long said its products have no ‘harsh chemicals’ such as sodium lauryl sulfate, or SLS, that could irritate some people’s skin. Instead, some of their products use an ingredient called sodium coco sulfate, which the companies say is a milder cleaning agent.” However, The Wall Street Journal commissioned tests, and found that “sodium coco sulfate is a blend of cleaning agents that contains roughly 50% SLS … Honest disputed the test results for its detergent. Hain Celestial said last week that Earth’s Best ‘does not add’ SLS to its products but that the company was changing its labels to increase transparency.”

“Hain Celestial uses sodium coco sulfate in several Earth’s Best baby-care products, some Alba Botanica shampoos and a facial scrub, and some of its Jason shampoos and body washes. Their containers say they have no SLS … Products with the new labels are expected to hit store shelves by this summer, and will gradually replace products with the existing labels.”

“Honest, which also sells diapers and other consumer products, has disputed the test results and says its products don’t contain SLS … Honest disagreed with the methods used by the Journal’s labs and said its own testing found no SLS in its detergent. Honest also said it relied on assurances from its suppliers that there was no SLS in the product … During the Journal’s reporting, Honest made changes to the wording on its website … It now says the products are “Honestly made without” SLS and other ingredients it has banned. Honest said it plans to change its product labels to match the wording on its website but has no plans to reformulate its detergent.”

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A New Blue Ribbon For Pabst

The New York Times: Eugene Kashper, who “made a fortune reviving several all-but-moribund Eastern European breweries … bought Pabst Blue Ribbon beer in 2014 with the private equity firm TSG Consumer Partners for a reported $700 million … Mr. Kashper says he saw a big opportunity. ‘Beer, you know, it’s just fun,’ he said.”

“Now chief executive, he is pushing an aggressive effort to leverage the company’s distribution network, a part of the business that had been built up under previous owners, and dusting off old beer recipes and brands to capitalize on consumer desire for local products. Pabst will soon start producing Rainier Pale Mountain Ale at a brewery in Washington State … using a recipe derived from the one for a Rainier beer that was last brewed in the 1930s and 1940s. Other brands include Lone Star, Schlitz, Olympia, National Bohemian, Colt 45, Schmidt and Pearl.”

Says Kashper: “We’re ideally suited for the whole locavore thing … We can take advantage of the heritage embedded in our brands … We don’t have to spend money convincing consumers our brands are authentic — they already know they are.” He has already “found one hit to pump through the system right after buying Pabst, in Not Your Father’s Root Beer, a ‘hard’ or alcoholic soda made by Small Town Brewery that became the beer industry’s sleeper success story of 2015. The product helped raise Pabst’s overall sales in 2015 by 20 percent and pushed its market share up by a percentage point — even as sales of its main brand declined.”

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YouTube is the ‘Hometown TV’ of Presidential Marketing

The Washington Post: YouTube “has become not just the Web’s biggest petri dish for the funny, weird and astronomically popular. With its 1 billion viewers and cultural omnipresence, it now offers campaigns a breadth no hometown TV network can match … Republican front-runner Donald Trump has been the most digitally prolific, with more YouTube views and videos about his campaign than all other candidates, data provided by Google show. Bernie Sanders, Hillary Clinton and Cruz follow, in that order, closely resembling the real-life race.”

“In an encouraging sign for campaign ad makers — and a reflection of how bizarre or amusing this race has become — many viewers are seeking out the same political ads they only previously endured during commercial breaks. Since April 2015, Google data show, Americans have watched 12,500 years’ worth (110 million hours) of YouTube videos about the 2016 issues and candidates.”

“Though broadcast TV remains king, gobbling up $2 billion of ad budgets, campaigns are increasingly turning to YouTube for its finer precision in targeting voters and its potentially viral popularity. Old-fashioned commercials are pricey, time-limited and impossible to pass on, while YouTube lets campaigns experiment with a wider range of lengths, costs and talking points.”

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The ‘Overton Window’ Is Broken

Zeynep Tufekci, writing in The New York Times: “For decades, journalists at major media organizations acted as gatekeepers who passed judgment on what ideas could be publicly discussed, and what was considered too radical. This is sometimes called the ‘Overton window,’ after Joseph P. Overton of the conservative Mackinac Center for Public Policy, who discussed the relatively narrow range of policies that are viewed as politically acceptable.”

“What such gatekeepers thought was acceptable often overlapped with what those in power believed, too. Conversations outside the frame of this window were not tolerated. For worse, and sometimes for better, the Overton window is broken. We are in an era of rapidly weakening gatekeepers.”

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Plants or Petroleum: The ‘Natural’ Difference Isn’t Clear

The Wall Street Journal: “Many retailers and consumer products companies classify their products as natural if some of their ingredients were originally sourced from plant-based materials. But the top ingredients in many natural or ‘green’ consumer goods aren’t that different from mainstream products, whose ingredients often come from petroleum-based sources … The main ingredients in Tom’s of Maine Simply White toothpaste, for instance—including sodium fluoride, hydrated silica, sorbitol and sodium lauryl sulfate—are also in some types of Colgate toothpaste. Tom’s of Maine, which says all its ingredients ‘originate from nature,’ is owned by Colgate-Palmolive Co.”

“Whole Foods Markets Inc. last fall started selling a new brand of laundry detergent called Nature’s Power, whose green bottle claims the product is made ‘with plant-derived soaps.’ Its top active ingredient, a commonly used cleaning agent called sodium laureth sulfate, is found in plenty of its mainstream peers, including Arm & Hammer, which like Nature’s Power is made by Church & Dwight Co. Sodium laureth sulfate can be produced from coconut oil, palm oil or petroleum. ‘It is the same chemical compound, regardless of what it’s derived from,’ says Clarence Miller, a professor emeritus of chemical and biomolecular engineering at Rice University in Houston.”

“While the Food and Drug Administration regulates foods and personal-care products and requires detailed ingredient labeling, it isn’t clear who is checking the labels of household products or the contents of bottles … The use of term “organic” is more closely regulated. Makers of household cleaners that label their products organic must have their ingredients certified by an independent body that follows guidelines from the U.S. Department of Agriculture.”

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Tory Sport: Retail Store as Marketing Medium

“Tory Burch’s new Tory Sport store shows how selling fashion today isn’t really about advertising. It’s about making a store into the marketing vehicle,” The Wall Street Journal reports. “People are still tactile. They want to feel the product,” Ms. Burch says. “Stores are changing, Ms. Burch says. Their purpose is to engage customers and to build a community. They also can be a place where the online and offline worlds merge.”

“With just one or two sizes of most styles on display, the Tory Sport store isn’t meant to be shopped the way mass-market flagship stores are … Instead, a designer store is a place to immerse and entertain shoppers in the fictitious, tightly controlled world the brand creates. It’s a chance to show and explain all that a brand stands for—and to seduce a shopper into buying something … Both Ms. Burch and Roger Farah, Ms. Burch’s co-chief executive, insist the Tory Sport store remains very much about sales, though.”

“We definitely want it to be profitable but we also want the experience to be one that people really like and get to know,” Ms. Burch says.

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