In an effort that both taps moms for new ideas and ensures some goodwill, diaper giant Huggies has launched a program that provides venture capital funding to entrepreneurial moms.
The site, called HuggiesMomInspired.com, launched last week. An open submission process for new business ideas kicks off this month. The outreach is part of parent company Kimberly-Clark’s efforts to further strengthen its relationship with its core consumers, many of whom are business-minded, social media-savvy moms.
K-C launched the program to address a perceived need in the market: Female-run businesses grew at a rate of nearly 23 percent—two times faster than businesses as a whole—according to a 2008 research report from the National Association of Women Business Owners. But women have a harder time securing funding for their startups—only 3 percent of all venture capital funds go to women, said K-C, citing Babson College research.
Under the program, K-C is awarding grants, up to $15,000 for a total first-year total contribution of $250,000. The former amount is an average sum compiled from talking to different women and learning their startup monetary needs, said Stephen Paljieg, senior director of growth and innovation.
“One mom said, ‘I need $15,000 to secure an attorney and file a patent on this idea. But I work and I’m losing sleep at night because the only place I can get it is in the money I’ve been saving up for my kids’ college fund. How do I cobble together capital to get to the next step, to get this a little further?’” he said.
The effort may be a first in the packaged-goods world. Procter & Gamble, for instance, has a program called Connect + Develop, in which it collaborates with “individual innovators, small- and medium-sized business partners [and] universities,” and other entrepreneurial entities on new ideas. Clorox’s Pine-Sol, on the other hand, gives out grants and scholarships to women who are making “a powerful difference in their homes or communities.” None, however, provide business funding to women, as K-C’s program does.
Tony Palmer, CMO for K-C, said the program taps into one of marketing’s core lessons, which is that “great ideas on innovation tend to come from the consumer.”
Said Palmer: “What we’ve learned over the years is that by opening up your mind to where ideas come from and truly getting close to your consumer and listening to them is the best way to innovate and come up with new ideas.”
K-C is promoting the campaign via ads and links on its Huggies homepage, as well as partnering with influencers like Maria Bailey, owner of BSM Media, a player in the “marketing to moms” space. Bailey will blog and tweet to get the word out. K-C, too, is tapping social media for the launch.
The effort comes as the Federal Trade Commission has cracked down on bloggers who accept money from advertisers without disclosing the relationship. Last month, for instance, the agency announced that it had investigated clothing retailer Ann Taylor for offering gift card prizes of between $50 to $500 to bloggers who attended its summer fashion preview event. (The FTC decided not to take action against the brand.) When asked if K-C’s program could be seen as a form of blog payola, Marti Barletta, founder of The TrendSight Group, a company that specializes in marketing to women, said there was nothing untoward about the company’s approach. “As far as this goes, companies have been incentivizing consumers for ages and ages and ages,” she said, adding that “this isn’t all that different from a sweepstakes or contest” offer except that it’s more impactful.
When Social Ads Collide With Stated Interests, Awareness Goes Up
It pays to have fans on Facebook if you want your ads to work there too, according to the first public study to come out of the collaboration of Nielsen Co. and Facebook.
Ads that included mentions of friends who were brand fans saw an increase in recall of 16%, and 30% when the ads coincided with a similar mention in users' news feeds.
The study of more than 800,000 Facebook users and ads from 14 brands in a variety of categories shows a marked increase in ad recall, awareness and purchase intent when home-page ads on the social network mention friends of users who've become fans of the brand in the ad.
The impact on awareness and recall is even more pronounced when a home-page ad coincides with what Facebook and Nielsen term "organic" social advocacy, i.e. an item in a user's news feed indicating a friend has become a fan of a brand.
In short, so-called earned media generated when people mention or advocate brands makes the paid media considerably more effective, according to the study. Nielsen and Facebook plan to discuss results of the study in a session at Ad:Tech in San Francisco on Tuesday.
Increased recall Facebook-home-page ads on average generated a 10% increase in ad recall, a 4% increase in brand awareness and a 2% increase in purchase intent among users who saw them compared with a control group with similar demographics or characteristics who didn't.
But the increase in recall jumped to 16% when ads included mentions of friends who were brand fans, and 30% when the ads coincided with a similar mention in users' news feeds. Brand awareness saw similar bumps: up 2% from just a home-page ad, 8% with a "social ad" bearing mentions of friends who were brand fans and up 13% when a home-page ad appeared along with a mention of friends who were brand fans in the users' news feeds.
Purchase intent was 2% higher among viewers of home-page ads vs. nonviewers, but got a four-times-bigger bump, up 8% either from social ads or when ads appeared alongside organic mentions of the brand in the news feed.
Earned and paid media One major takeaway from the research is that paid and earned media work together in ways that could have implications well beyond Facebook, said Jon Gibbs, VP-media analytics at Nielsen. "The market has been talking very much about how to buy paid media and earn earned media, but there's been very little attention to the types of hybrid impressions and hybrid experience that blends these two," Mr. Gibbs said.
While Facebook's social ads present a fairly unique way of blending the paid and earned impressions, Mr. Gibbs noted that it's not a totally isolated example. He cited rich-media vendors that allow for Twitter feeds, social commentary or other kinds of consumer input within their ads. But he said having specific friends linked to a brand, as Facebook does, appears to have more impact than just incorporating social commentary broadly.
The recall levels for home-page ads on Facebook appear "slightly higher than standard norms we've done on other projects," Mr. Gibbs said. "What we've seen in both social ads and organic [mentions] are much higher than we've seen in other campaigns along these lines."
Results 'unremarkable' Rex Briggs, CEO of the analytics firm Marketing Evolution, which has conducted numerous online advertising effectiveness studies, called results for Facebook's regular home-page ads "unremarkable and in line with banner ads [generally]," but he added that the results for social ads and the impact of organic mentions make for "a really interesting story."
Nielsen appeared to employ a good methodology used since the first online ad effectiveness studies in the mid 1990s, Mr. Briggs said.
"It does what Facebook wanted to do, which is legitimize the advertising and business model of Facebook," he said. "What it doesn't do is give the cross-media understanding of how does this piece fit into overall marketing plans."
What Facebook also hasn't done, he said, is open its doors and data to a variety of research companies as others, such as Microsoft, Yahoo or AOL have done. That its internal data remain largely under wraps, and its template for creating fan pages remains relatively limited compared to what marketers can do with their own sites or other networks may also be limiting revenue for Facebook, he said.
Paid media cheaper In all, Nielsen projects around 18 million Facebook users saw ads measured as part of the study, of which around a million also saw organic mentions of their friends in social ads. Roughly another million saw organic mentions of the brands featured in the study without seeing the ads.
Based on those numbers, it's still a lot easier -- if not necessarily cheaper -- to buy scale on Facebook than earn it by winning fans. It's also an indication to Mr. Gibbs that marketers need to focus on winning Facebook fans over the long haul if they want to improve their odds of success when advertising there.
Of the 18 million users exposed to the ads, only around 130,000, or less than 1%, "engaged" with them by clicking on them. But around 40,000, or around 4%, of users who saw organic mentions of their friends become brand fans clicked on those news items. The higher click-through on organic impressions is another indication of the power of earned media on Facebook, Mr. Gibbs said.
"I do think it requires a level of ongoing investment in social media," Mr. Gibbs said, as opposed to a series of short-term projects. He also said marketers who have large e-mail databases should probably be encouraging consumers in e-mail programs to join their Facebook pages.
Mr. Gibbs said he doesn't believe Facebook's plans to move from "become a fan" to the more click-prone "like" as a means of joining brand pages would have much impact on the numbers in the study. And he believes, though it wasn't part of the survey, that users by now have been exposed to enough of Facebook's social ads to realize that when they become fans of a brand, they may also become endorsers in that brand's Facebook ads.
The Nielsen BrandLift polls used to survey Facebook users was a "lightweight" poll, generally with only two questions, aimed at maximizing response rates.
Nielsen didn't incorporate actual purchases, as opposed to purchase intent, "because this is the first generation of this research," Mr. Gibbs said. "We wanted to stick to branding because it's language the market is very comfortable with. In next generations, I would assume we will start incorporating offline purchase and other transactional data as part of the analysis."
Greater Emphasis on Creative-Packaging Initiatives Follows Growing Importance of in-Store Marketing
As in-store marketing grows in importance and marketers focus more at winning over consumers at the shelf, one discipline is seeing its star rise: design.
No less a giant than Procter & Gamble Co. has incorporated design into its comprehensive brand-building function under the group headed by Global Brand-Building Officer Marc Pritchard. After initially carving design shops out of its new "Brand Agency Leader" model for managing and paying marketing-services shops, P&G now increasingly includes them in the system, in which lead creative agencies essentially function as general contractors over other marketing services shops.
A FRESH APPROACH: P&G Global Design Officer Phil Duncan sees the Febreze Home Collection (above) and Pantene's new line of products as an example of the sorts of design-intensive initiatives that are growing business.
The growing importance of the store has been central to Mr. Pritchard's "store back" concept, in which all marketing ideas need to prove their mettle by whether they work at the shelf. And bringing design into the brand-building organization is a key part of implementing that strategy.
A study last year by Nielsen Co.'s Bases unit found in-store marketing clearly beats TV as the leading medium creating awareness of new package goods in the U.S. and five other key developed markets. About half of consumers in Bases' survey cited in-store as their source of awareness of new products, vs. only a third citing TV. Peel the onion further, and it turns out of that half of consumers who became aware of products for the first time in store, 71% became aware simply by seeing them on the shelf. And what drives that shelf awareness is the package.
"We now are brand-building from the eyes of the consumer toward us," P&G Global Design Officer Phil Duncan said in an interview at the company's Cincinnati offices. "We've always believed the consumer should be boss, but we had an organization that was a little function-specific. ... By coming together as a real multifunctional team, I think we're already seeing bigger and better ideas."
Early gains It's been less than a year since P&G incorporated design into the global brand-building organization, so the initiatives it's started to develop under the new system haven't hit stores yet.
But Mr. Duncan sees the Febreze Home Collection as an example of the sorts of design-intensive initiatives, with product, packaging and marketing seamlessly aligned, that the new order can help bring. Designers spent time in consumers' homes and boutiques, segmenting consumers by home-decor preferences and developing fragrance and decorative ranges for each segment that include battery-powered flameless luminaries with changeable scented shades, along with reed diffusers, scented candles and room spays. The initiative has helped P&G add two share points in air fresheners since launching last year.
Bigger ideas are critical, because designers at P&G and other package-goods companies are staring at two huge dilemmas these days.
First, even as in-store marketing becomes more important, big retailers have been putting more restrictions on it as they adopt or toughen "clean store" policies that restrict use of displays and point-of-purchase advertising. That makes the role of the package that much more important, but the second dilemma is that under the banner of sustainability, retailers and consumers are also pressuring marketers to make their packages smaller.
"It's a constant challenge," Mr. Duncan said, "but one that makes design so critical."
Big ideas His solution to the problems is far more easily said than done: Come up with better ideas. When retailers see big ideas, they tend to give them more space, he said, so the challenge is coming up with big ideas that work in the store. "We're really asking our communications agencies," he said, "to vet [their] idea first in store, because that often can be the most challenging environment for us to communicate that idea."
The clean-store movement is one Mr. Duncan supports, because he believes "the pendulum had swung too far to everyone trying to break through, which meant nothing breaks through." Less-cluttered stores also mean the payoff for a big design idea that gets a green light from retailers can be all that much bigger, because shoppers see fewer competing marketing programs in the store.
Having more design impact with less space, less cost and less environmental impact is a classic "design thinking" challenge, Mr. Duncan said.
For Pantene, whose last restage didn't go over so well with consumers, a "design thinking" session was the start of the solution, Mr. Duncan said. Design thinking, which includes heavy doses of consumer co-creation and prototyping concepts, helped lead to a lineup hitting stores in June in the U.S. and early 2011 in Europe that will include 25% fewer items, considerably less packaging material and cost, and more prominently color-coded packages that delineate product ranges for different hair needs.
"We're paying attention, finally, to the things that matter to consumers, and stripping out the things that don't, as well as thinking about footprints across the franchise," Mr. Duncan said.
Herbal Essences Five years ago, P&G began applying a similar "design thinking" approach to another hair-care brand in trouble: Herbal Essences. P&G took a team to its offsite Clay Street facility in Cincinnati's impoverished but architecturally rich Over-the-Rhine neighborhood for what Mr. Duncan calls "design thinking on steroids."
Pantene's new line of products
The result was the launch in 2006 of a dramatically different look and product lineup that ultimately made Herbal Essences a survivor in the battle with L'Oréal's Garnier Fructis and Unilever's then-upstart, now largely vanquished brand Sunsilk.
But design thinking isn't just about turning around hair-care brands. P&G is also applying it to a broad range of business issues. The decision to reorganize P&G's beauty care and grooming marketers along women's and men's lines rather than product category lines, for example, also culminated from a design-thinking session, Mr. Duncan said.
For just about any problem, design thinking now can be a solution at P&G, he said. So Mr. Duncan spends a lot of time in meetings looking for problems, specifically ones he believes a design-thinking session could help solve.
Mr. Duncan is perhaps the highest-level outsider that traditionally promote-from-within P&G has recruited, though he wasn't entirely an outsider. He started his career with P&G with four years in brand management before becoming a design executive for 13 years, ultimately with P&G shop Landor Associates, including a stint heading the Cincinnati office and the P&G account.
For design, he sees a lot of potential both for improving efficiency and breaking new ground in marketing.
So he's in the process of helping P&G winnow a large palette of package colors built up from years of product launches by 30% to 40%. And he sees opportunities for electronic inks and other digital and packaging technologies to create breakthroughs in in-store marketing, like displays where each package becomes a component in a big-screen presentation not unlike an electronic billboard.
"You always have to be looking at frontiers of innovation for ideas," he said. "It's kind of like haute-couture fashion. It's eventually going to come in. You may not recognize it in the same form, but it's going to be there."
Five ways P&G is using design
The traditional way: Package design remains the key to winning consumers at the shelf, what P&G calls "the first moment of truth."
CREATING NEW FRANCHISES AMONG BRANDS: To leverage its scale in countries where both Crest and Oral-B are established brands, notably the U.S., P&G is using design to forge a franchise linking products from both brands for beauty-focused consumers with the 3-D White line of products in toothpaste, toothbrushes, mouthwash and whitening strips. It has a similar Pro-Health franchise linking toothpaste, mouthwash and brushes for more health-focused consumers.
TO EXPAND BRANDS AND BUSINESS MODELS: Besides expanding the brands into service and retail, Mr. Clean Car Washes and Tide Dry Cleaners are also a design exercise, adding another dimension of retail space and experience to the brands.
TO TURN AROUND BRANDS: Design-thinking exercises -- and design revamps -- have been key to saving Herbal Essences from the brink of extinction at the retail shelf and, P&G hopes, will reverse share losses in recent years for its hair-care category leader Pantene, a $3 billion global brand.
TO SOLVE BUSINESS PROBLEMS: P&G has used "design thinking" exercises, which include lots of co-creation with consumers or other affected parties, to try solving a number of other business problems, including how to organize its beauty and grooming marketers. The result: P&G moved to reorganize along men's and women's lines as opposed to traditional category lines.
NEW YORK (AdAge.com) -- PepsiCo is taking advantage of the 2010 Census with an initiative called "Yo Sumo" (Spanish for "I count") that encourages Hispanics to go beyond just being counted numerically and to share their experiences that have helped shape the American landscape. Working with Pepsi, actress Eva Longoria Parker will make a documentary based on the stories posted to the pepsiyosumo.com website set up by Pepsi.
Like the last Census a decade ago, the 2010 poll is expected to give a big boost to Hispanic advertising, as marketers are expected to be impressed by the sheer number of Hispanic consumers and how fast that market is growing.
"We felt the Hispanic consumer needs to go beyond simply being counted, and count," said Martha Bermudez, Pepsi's senior marketing manager, multicultural marketing. "Pepsi partnered with Eva Longoria Parker, who will direct and produce [the documentary]. We want to bring the stories to life in a creative and compelling film."
Ms. Longoria Parker has worked with Pepsi before, appearing in a Hispanic spot for brand Pepsi a few years ago, Ms. Bermudez said.
The "Yo Sumo" effort is being announced today, but a soft launch using social media is already drawing about 100 fans a day to its Facebook page, said Melisa Quiñoy, CEO of Dieste, Pepsi's Hispanic agency. Many of the fans have started posting their stories on the pepsiyosumo.com site, in a mix of Spanish, English and Spanglish, about growing up Hispanic in America, or arriving as young immigrants.
Actress Eva Longoria Parker, seen here in a previous Hispanic spot for Pepsi, will direct and produce the documentary.
Pepsi and Dieste are working with Telemundo, the No. 2 Spanish-language TV network owned by NBC Universal, and Telemundo's youth-oriented cable channel Mun2 and Telemundo.com site. Dieste has done a commercial for "Yo Sumo" featuring quick cuts of young Hispanics talking about being counted, with both English and Spanish-language voiceovers.
Ms. Bermudez said Telemundo will also be broadcasting integrations to drive awareness of Pepsi "Yo Sumo" and the stories that are being collected. For instance, Patricia de Leon, an actress in Telemundo telenovela "Perro Amor," will do a two-minute segment on Telemundo's daily entertainment show "Aceso Total" telling her story and talking about why she supports the "Yo Sumo" effort.
Another partner is Edoardo Chavarin, who started trendy Mexican T-shirt business NaCo and designed the Pepsi "Yo Sumo" T-shirt that is turning up in a growing number of Facebook pictures.
Is organically grown food safer or more nutritious? Consumers should weigh the cost vs. benefits
Some consumers are more than willing to pay higher prices for organically grown food. But are organic strawberries worth the extra dollar?
The health benefits of organic food are one of the most intensely debated issues in the food industry. By definition, organically grown foods are produced without most conventional pesticides, fertilizers made with synthetic ingredients or sewage sludge. Livestock aren’t given antibiotics and growth hormones. And organic farmers emphasize renewable resources and conservation of soil and water.
The U.S. Department of Agriculture, which runs the National Organic Program, says that organic is a “production philosophy” and an organic label should does not imply that a product is superior. Moreover, some say there’s no need to eat organic to be healthy: Simply choose less processed food and more fruits and vegetables.
The crux of the argument often comes down to the nutritional benefits of organic foods, something that’s hard to measure. To compare the nutrient density between organically and conventionally grown grapes, for example, researchers would have to have matched pairs of fields, including using the same soil, the same irrigation system, the same level of nitrogen fertilizer and the same stage of ripeness at harvest, said Charles Benbrook, chief scientist at The Organic Center, a pro-organics research institution.
Last summer, the debate came to a head after the American Journal of Clinical Nutrition published a comprehensive systemic review that concluded organic and conventional food had comparable nutrient levels.
The outraged organic community criticized the study for not addressing pesticide residues, a major reason people choose organic. The study also did not address the impact of farming practices on the environment and personal health.
Maria Rodale, a third-generation advocate for organic farming, urges consumers to look beyond nutrition to the chemicals going into our soil, our food and our bodies. “What we do to our environment, we are also doing to ourselves,” said Rodale, chairwoman and CEO of Rodale Inc., which publishes health and wellness content.
Some experts also suggest consumers focus on the producers rather than the product itself. For example, Vicki Westerhoff, 54, owner of Genesis Growers in St. Anne, Ill., uses organic procedures but calls her food “natural” and “chemical-free” because she hasn’t gone through the expensive certification process.
Here’s a closer look at some of the factors that may influence your decision whether to buy organic products.
Fruits and vegetables
Farmers using conventional practices treat crops with pesticides that protect them from mold, insects and disease but can leave residues. Organic fruits and vegetables have fewer pesticide residues and lower nitrate levels than do conventional fruits and vegetables, according to a 2006 scientific summary report by the Institute of Food Technologists.
The bottom line: Experts say pesticide residues pose only a small health risk. But fetuses and children are more vulnerable to the effects of the synthetic chemicals, which are toxic to the brain and nervous system, said Dr. Philip Landrigan, director of the Children's Environmental Health Center at the Mount Sinai School of Medicine in New York City. The Environmental Working Group recommends buying organically grown peaches, apples, bell peppers, celery, nectarines, strawberries, cherries, kale, lettuce, imported grapes and pears because they are the most heavily sprayed. Onions, avocado, sweet corn and pineapple have some of the lowest levels of pesticides, according to the EWG's Shopper's Guide to Pesticides.
As for nutrition, one French study found that, in some cases, organic plant products have more minerals such as iron and magnesium and more antioxidant polyphenols. But although mounting evidence suggests that soil rich in organic matter produces more nutritious food, “we are never going to be able to say organic is always more nutrient dense; that’s going beyond the science,” said Benbrook of The Organic Center.
Dairy and meat Organic dairy and meat products come from animals not treated with antibiotics or genetically engineered bovine growth hormones, which are used to stop the spread of disease and to boost milk production. Past rules on “access to pasture” were vague and didn’t require that the animals actually venture into it. But a new regulation requires that animals graze for a minimum of 120 days. In addition, 30 percent of their dietary needs must come from pasture.
The bottom line: The dairy cow’s diet is key. Organic milk has more vitamins, antioxidants, omega-3 fatty acids and conjugated linoleic acid because the cows eat high levels of fresh grass, clover pasture and grass clover silage. Research published in the British Journal of Nutrition found organic milk can improve the quality of breast milk and may protect young children against asthma and eczema.
Though the FDA says milk from cows treated with bovine growth hormone is safe and indistinguishable from other milk, consumers are spooked. Dean Foods, the nation’s largest dairy producer, no longer sells milk from those cows, and Krogers, Wal-mart, Costco, Starbucks, Dannon, Yoplait and several other companies have pledged not to use it.
As with dairy, organic meat has higher levels of omega-3’s because of the higher forage content in their diet. It also has lower fat overall than animals fed a high-corn diet, said Benbrook. Eating organic dairy or meat also can help with another issue: The use of antibiotics on farms has contributed to an increase in antibiotic-resistant genes in bacteria.
“Pushing animals to grow really fast has a cascade of effects on the environment and the health of the animal,” said Benbrook. “We need to back off the accelerator and focus on the health of the plant, the health of the animal, as well as the nutrient composition of the food.”
Cosmetics, personal care Chemicals in personal care products have been linked to both environmental pollution and human health concerns. Of particular concern are phthalates, which have been linked to endocrine disruption. Environmental concerns also are rising about the tiny nanoparticles now being added to cosmetics, sunscreens and other products. Notably, organic personal care products can be labeled “organic” but still contain synthetic ingredients.
The bottom line: Of the 3,000 chemicals used in high volume in personal care products, only half have been put through basic toxicity testing, according to Landrigan. You may be paying more for “organic” products that aren’t actually organic; the USDA regulates organic personal care products only if they’re made of agricultural ingredients. Look for the USDA logo rather than the word “organic” on the label.
Processed foods Many processed foods — pasta, candy, cookies, crackers, baby food — now come in organic versions. Products made from at least 95 percent organic ingredients can carry the “USDA Organic” seal if the remaining ingredients are approved for use in organic products. Products with at least 70 percent organic ingredients may label those on the ingredient list.
The bottom line: Processed organic food hasn’t been shown to be any more nutritious than processed conventional food.In conventionally processed products such as baby food, pesticides aren’t commonly detected because the processing steps “are quite effective in breaking down trace residues of pesticides,” said food toxicologist Carl Winter, director of the FoodSafe Program at the University of California at Davis and co-author of the Institute of Food Technologists scientific summary.
“Pesticides are rarely used on crops grown for baby foods since the ultimate appearance of the crop is less important due to the processing before the product is ultimately sold,” Winter said.
Some consumers may decide to choose organic because those products are not supposed to contain genetically modified organisms.
Cotton, coffee
Cotton and coffee are two of the most pesticide-intensive crops in the world. Pesticide residues have been detected in the cottonseed hull, a secondary crop sold as a food commodity. It’s estimated that as much as 65 percent of cotton production ends up in our food chain, whether directly through food or indirectly through the milk or meat of animals, according to a report by the Environmental Justice Foundation. Conventional coffee production also has contributed to the deforestation of the world’s rainforests.
The bottom line: Pesticide residues are generally removed during the processing but the chemicals can have a huge impact on the local land, biodiversity and the health of the workers involved. Though buying organic can help preserve environmental health and support farmers who use ecological methods, “it’s more important to focus on the circumstances of growers and farms versus the product itself,” said food writer Corby Kummer, the author of “The Joy of Coffee.”
Dr Pepper bottles are seen inside a store in Port Washington, New York May 7, 2008.
Credit: Reuters/Shannon Stapleton
CHICAGO (Reuters) - The North American beverage sector has started to see some weak trends reverse, but pricey drinks are not likely to see the lofty growth that they had before the recession, an analyst said on Wednesday.
"Demand is getting less bad -- and what I mean by that is that the big categories are generally in decline, but rates of decline, particularly on the nonalcoholic side, are moderating," said Stifel Nicolaus analyst Mark Swartzberg during the Reuters Food and Agriculture Summit.
Higher-priced noncarbonated drinks, which were hit hard as the downturn pressured consumers, are now seeing some improvement, he said.
Snapple, for example, has returned to growth, Swartzberg said. Those iced tea and juice drinks made by Dr Pepper Snapple Group Inc (DPS.N) had suffered along with other drinks such as bottled water, as consumers sought out cheaper refreshment.
Energy drinks also returned to growth in late 2009, he said.
Still, Swartzberg said he does not expect to see rates of growth that such drinks experienced in 2006 through 2008.
Looking at potential deals, he said Molson Coors Brewing Co (TAP.N) would be "a great takeout candidate" and suggested it would be a natural fit for SABMiller PLC (SAB.L) to buy.
The U.S. beer category is poised to have a good second half of 2010, but much of that is due to its comparison with a weak second half of 2009. January shipments of higher-priced imported beers rose, suggesting there has been an inflection point in beers as well.
The biggest beneficiaries from a lift in imported beer sales would be Constellation Brands Inc (STZ.N) and Grupo Modelo (GMODELOC.MX), Swartzberg said.
Constellation and Modelo have a joint venture that distributes Modelo's Corona and other beers in the United States. Modelo sued Constellation in late 2009 over marketing at their venture.
Wendy's is attempting to insinuate itself into this year's NCAA Basketball Championships with a social media push designed to create real-life parties.
The fast feeder has worked with Kaplan Thaler Group for Facebook- and Twitter-based promos dangling gift cards for Boneless Wings to consumers who organize viewing parties over the social network. The Facebook effort, breaking today, gives 100 random $50 gift cards to such consumers.
On Twitter, the gift cards are awarded to those who have the funniest and quirkiest responses to various challenges. For instance, in the first week, Wendy's is asking consumers on Twitter to finish the statement "If taste buds could talk, they'd say: 'Boneless Wings (finish this from a quirky perspective)."
Wendy's is awarding three $50 gift certificates a day to the winners of the Twitter contest. Both promos conclude on April 4.
The effort will not receive any advertising support. Myles Kleeger, managing director of digital and experiential engagement at Kaplan Thaler, said he hopes the buzz will get around on its own. "We're really working hard to build up our community of users," he said.
Wendy's currently has about 321,000 fans on Facebook, and 2,818 followers on Twitter.
CHICAGO (AdAge.com) -- Let's get this straight right away: Return on investment in social media is not measured in how many friends you have on Facebook or how many followers you have on Twitter. It's not calculated in trending topics or YouTube comments. It should, in fact, be held to the same criteria other marketing channels are: Did it move your business?
It's done just that at Starbucks, which is a digital marketer worth watching.
No one would have guessed at that turn of events during the chain's dark days of early 2008. Sales and traffic had begun to slip for the first time in its history as a public company. Founder Howard Schultz, returning to handle day-to-day management, even admitted that Starbucks had lost its soul. As part of Mr. Schultz's multifaceted turnaround plan, the chain launched MyStarbucksIdea.com in July 2008 as a forum for consumers to make suggestions, ask questions and, in some cases, vent their frustrations. The website now has 180,000 registered users. Some 80,000 ideas have been submitted, 50 of which have been implemented in-store.
Chris Bruzzo, Starbucks' VP-brand content and online, said amassing Starbucks' 5.7 million Facebook fans and 775,000 Twitter followers could be tougher for a dental-floss brand. "Maybe we have an unfair advantage because in so many ways Starbucks and the store experience is like the original social network," he said. Consumers "come in, hang out and talk to our store partners. They sort of got to know us as a brand in a very social way."
But he's quick to point out that Starbucks' advantage could easily have been squandered. "If we had approached it not from 'what you know and love about Starbucks' but as a marketing channel, we would have taken this down a path that would have been very different," he said. "This was not [built as a] marketing channel, but as a consumer relationship-building environment."
More important than the number of fans, however, is that the coffee chain is beginning to see sales lifts following social-media promotions.
Results Starbucks posted its first U.S. same-store sales gain in two years for the last quarter during a time when the company relied on digital and social-media promotions instead of what had become an annual TV blitz. The chain partnered with Pandora to sponsor holiday playlists, staged a Facebook sing-a-long and leveraged its partnership with Project RED to drive traffic to a dedicated microsite -- and its stores, offering a free CD with a $15 purchase.
Mr. Bruzzo said that the company is benefitting from a trend "toward this intersection between digital and physical."
"We're seeing the beginning of that," he said. "The experiences you have online can translate to rich offline experiences."
The first time Mr. Bruzzo noticed this intersection was on Starbucks' "Free Pastry Day" last summer, when consumers could visit the company website or its Facebook page and download a voucher for a free pastry. Mr. Bruzzo, who visited multiple stores that day, said he was amazed at the number of people standing in line holding coupons they'd printed out. He said the impetus for free pastries was the volume of faithful online followers asking to be included on new products or other company news.
The secret to Starbucks' social-media success is, at least in part, the fact that it plays it cool. "It's not like we started our Facebook community, got to a million people and started pushing offers at them," he said. "We built up a community of people who enjoy engaging with our photo albums from our trip to Rwanda, who loved to have these shared moments around their favorite drinks." Then, fans started asking the company what was going on, and how they could be included.
'Straight scoop' An added benefit of Starbucks' social-media progress has been the ability to quickly manage rumors that could have dogged the company for days. Last January, a story spread that Starbucks was donating its profits in Israel to fund the country's army -- even though Starbucks doesn't have any cafés in Israel. These days, Mr. Bruzzo said, when misinformation gets out, it's easier to nip it in the bud.
Chris Bruzzo, VP-brand content and online, Starbucks
Internally, it's called the "embassy strategy." Starbucks strives to make MyStarbucksIdea and its Facebook and Twitter pages places that "when you go there you know you're going to get the straight scoop," he said.
After ceding its usual first-to-market status to competitors, Starbucks launched two iPhone apps in September, one for general café purposes, with store locators, details about specific blends and nutrition information, and the other to support its loyalty card. Moving forward, Mr. Bruzzo said the company will be looking for ways that consumers can connect with each other from inside the apps.
In the meantime, Starbucks is testing functionality that allows loyalty-card holders to pay with their phones.
Starbucks' agencies are BBDO, PHD and Blast Radius.
Starbucks tweeter in chief
Unlike many marketers, Starbucks doesn't run its Twitter feed out of its PR department. The chain's voice on Twitter is Brad Nelson, 28, a former barista who rose through its IT ranks.
When the company was looking for ideas to re-engage with its core customer in 2008, Mr. Nelson suggested that he begin a Twitter handle for the brand, and it now has 775,000 followers. The brand relies on the 28-year old to translate the Starbucks experience for the online community, search out confused or disgruntled consumers, chat about store offerings and even crack jokes.
Chris Bruzzo, VP-brand, content and online, said that Starbucks was beginning to institute its turnaround plan in early 2008 when Mr. Nelson announced he was ready for something new and wanted to get involved in the chain's online efforts.
"I sent him away and said 'Fine, sure,'" Mr. Bruzzo said. But about two weeks later, Mr. Nelson gave him a presentation about Twitter and the opportunity to communicate directly with consumers as questions arise. Mr. Nelson sweetened his pitch by adding, "It's a lot like being a barista on the internet." Mr. Bruzzo recalls greenlighting the project, and after a period of working with Mr. Nelson, let him loose on Twitter.
Mr. Bruzzo gives credit to Mr. Nelson and his "willingness to take smart risks," but shares some of the kudos for Starbucks. "I guess you have to have a brand like this and an environment that's open to innovation and someone like Brad with the passion and personality."
Now Starbucks is finding more ways to use Mr. Nelson. He took a week-long cross-country drive last fall with comedienne Erin Foley and an Edelman entourage to help launch Via. The group made stops for a web series along the way, passing out product samples.
In an effort that both taps moms for new ideas and ensures some goodwill, diaper giant Huggies has launched a program that provides venture capital funding to entrepreneurial moms.
Wendy's is attempting to insinuate itself into this year's NCAA Basketball Championships with a social media push designed to create real-life parties.
