Davis Brand Brief: August 2014
The team at Davis Brand Capital has a longstanding love affair with clients in and around the food space. Truth be told, the Davis team members are “foodies” at heart. This month’s Davis Brand Brief takes a closer look at food – trends, issues, concerns and concepts, exploring how brands in and around the food industry “feed” their consumers. Which brands are nourishing consumers and which are starving them? Want to weigh in on the conversation? Share your thoughts with us on Twitter. #foodbrands
__________________________________________________________________
STRATEGIC
31 Flavors
Food was once simple and straightforward – a source of income, energy and community. Now food is a nuanced, complicated and debated issue. Today’s food conversations present a multitude of issues for brands that play out on a personal and societal level simultaneously. From farm to table may sound like a simplistic and idealistic notion, but it has become a popular shortcut for brands trying to capitalize on the constantly shifting consumer mindset. More than ever, it is critical for companies to be close to their consumers, and with food brands, “31 flavors” truly takes on a new meaning.
From a strategic perspective, a key ingredient in any food brand’s success is to remain in dialogue with the consumer. It is crucial they know the consumers and communities they serve and be willing to reinvent themselves based on what they learn. Consumer involvement, as seen this summer with the Lay’s “Do Us a Flavor” contest, raises awareness, engages opinions and keeps brands in consumers’ minds and social feeds. But be prepared for the heat, the results can cut both ways. #savewasabi
On a more serious note, issues that are relevant to consumers also influence how brands approach their strategic communications and commitments. Consider Oxfam’s #behindthebrands campaign. They listened to consumer concerns and responded. Hats off to all of the participating food and beverage brands for addressing complex societal issues! Taking a cue from an evolving marketplace and consumer, two iconic beverage brands have recently illustrated what strategic brand management can look like. While remaining true to their brand essence, they have evolved their narratives to connect with new consumer expectations.
Last month Panera Bread formally announced its new overall food policy and messaging around “food you can trust.” Responses like that impact not just communications but also operations. In that same vein, Nestlé announced this week their plans to adopt animal welfare standards within their food supply chain.
__________________________________________________________________
ECONOMIC
Disruption in the Fast Food Economy
As the 3rd quarter comes to a close next month, earnings are on the minds of most companies, as is long-term success. Fast food giant McDonald’s earnings in July reflect its worst slump in a decade. Long a much-cited case study in operational efficiency and supply chain management, the golden arches appears to be losing ground with millennial consumers.
Millennials place a premium on quality ingredients, meaning that fast casual restaurants, such as Chipotle and Five Guys are positioned much more effectively to serve these consumers. Losing young consumers doesn’t bode well for McDonald’s long-term economic success. While McDonald’s has set up a “learning lab” to better understand consumers, it is not yet clear what they will cook up to bridge the divide in the eating preferences of millennials and older consumers.
And this just in: There is a new, third-largest fast food chain in the world as Burger King is about to merge with Canada’s beloved Tim Horton’s. Though the economics of the transaction primarily involve taxes (the company will be headquartered in Canada and enjoy a 26% corporate tax rate instead of the nearly 40% it pays in the U.S.), the acquisition gives Burger King a much-needed brand name in the coffee space. Yet another pressure point for McDonald’s given their success with McCafé.
This competitive pressure will continue, as innovative startups continue to upend what a fast-food restaurant looks like. For example, startup Sprig will operate a central kitchen in cities and deliver food by car as ordered by consumers via an app.
__________________________________________________________________
CULTURAL
You Are What You Eat
Food knowledge as social currency is everywhere these days: from those meal shots on Instagram to cultural fluency. This poses challenges for companies who cannot (and should not) get away with tricking the consumer into thinking things about their products that are not authentic and real.
How consumers share food narratives is shaped by the fact there is more information available about food available to them. Far beyond taste, the big issue with many parents and educators is how brands influence children, including beloved characters of sugary cereals. Bolthouse Farms’ commitment is a refreshing step in the right direction. Their recent push to encourage grocers to display kid-friendly snack zones in the stores, promoting their new products that are perfect for back-to-school lunches reflects a cultural awareness and recognition of the roles that brands play on the food choices children make. Big brands Nestle and Coke, among others, have also agreed to stop the advertising targeting youth.
Food has always been at the heart of any culture, so it makes sense that brands like Chipotle have created images, messages and burritos into a cultural recipe of their own. Success in the food industry, is a genuine and transparent approach to engaging the consumer.
__________________________________________________________________
CREATIVE
The Art of Food
Transparency in food content is not the only concern when it comes to food brands. That transparency also applies to food packaging and design. How a brand expresses itself on the outside often reflects the contents on the inside. There is a strong movement to ensure that the creative undertones of marketing and advertising do not entice consumers in ways that contribute to the obesity rates that have more than doubled in children in the United States. Could taking the toys out of the Happy Meal play an effective role in this movement?
The visual appeal of food, however, has always played a critical role in how people experience food. Delivering images that are almost edible has become an increasingly popular way to capture the imagination and attention of consumers across platforms.
Food brands are trying to solve for challenges in creative ways that leverage technology, content and consumer insights. As in many industries, companies like Coca-Cola and General Mills are looking to multi-media, creative content to boost consumer engagement.
In the last quarter of 2014, it will be interesting to look back at social and economic factors that played a role in the conversation. Were predictions and assumptions right?
