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    Published on: August 7, 2013

    by Kate McMahon

    "Kate's Take" is brought to you by Wholesome Sweeteners, Making The World a Sweeter Place.

    The Twinkie is back, resurrected from bankruptcy with old-fashioned taste and a cutting edge social media campaign.

    The iconic Twinkie and other Hostess snack cake products returned to shelves last month for the first time since November, in what is being billed as “the sweetest comeback in the history of ever.”

    It’s a comeback to the tune of $410 million, which is what two private equity firms paid for the snack cake line when Hostess Brands filed for Chapter 11 bankruptcy. Hostess’ Wonder Bread and other bread products were sold separately.

    In addition to the Twinkie, Hostess CupCakes, Donettes, Zingers, HoHos and Ding Dongs are rolling out of four non-union manufacturing plants to a store near you.
    Though a strike by the bakers’ union was the final blow for the old Hostess, I had to wonder how a line of dated high-calorie desserts wrapped in plastic could compete in today’s marketplace.

    But, hey, that first sinful bite of golden sponge cake filled with sweet “cream” clearly still has its appeal, with demand and sales for the products at a record high. Fifty million Twinkies were shipped in the first two weeks, and some retailers reported selling out within hours. Some stores (including Walmart, with a First Batch collectibles box) jumped the July 15 release embargo, and one customer in Rhode Island sustained minor injuries when she was jostled by other patrons trying to grab her boxes of snack cakes.

    What’s most noteworthy is Hostess’ decidedly hip, cross-media channel marketing approach, well beyond just a Facebook page. Hostess has launched a website, encouraging fans to post Instagram and Vine videos of themselves enjoying their favorite Hostess product. (Vine is the newest mobile app for sharing short videos; Instagram users share photos and videos.)

    Hostess tells MNB that there are 1,000-plus consumer-generated videos with the #cakeface tag trending nationally on Vine and a more than 2,100% increase in Instagram followers in only three weeks. To hit every social media channel, Hostess is also sending the videos out to its Twitter followers.

    While staying true to original recipes, Hostess also believes it must continue to innovate and is exploring new products in health-oriented categories which could include whole grains and added fiber.

    It will be interesting to watch whether the new owner can sustain a nostalgia-based comeback, meet its goal to more than double distribution to 110,000 stores nationwide and still evolve to meet changing tastes.

    In a blend of old and new, the relaunch campaign also features a traditional promotional truck handing out free Twinkies across the country. But in a timely twist, the recipients also receive a handstamp reading #comeback to promote its return on Twitter. Not bad for an 83-year-old.

    Comments? Send me an email at .
    KC's View:

    Published on: August 7, 2013

    by Kevin Coupe

    Just favorite headlines about the $250 million purchase of the Washington Post by Amazon founder/CEO Jeff Bezos actually came from a pair of internet new sites.


    "The Iceberg Just Rescued The Titanic."

    From the Daily Beast:

    "The Washington Post Survived Nixon, But Not The Internet."

    Lot of truth in both of them.

    And I thought they were Eye-Openers.
    KC's View:

    Published on: August 7, 2013

    Superquinn, the iconic Irish supermarket chain founded by Feargal Quinn in 1960 and turned into a globally recognized symbol of customer service that was an early mover in the shopper loyalty business, soon will be no more.

    Musgrave, which acquired the 24-store chain from Select Retail Holdings in 2011, said this morning that it plans to combine Superquinn with its SuperValu chain and rebrand the Superquinn stores under the Supervalu banner.

    Feargal Quinn sold the company to Select Retail Holdings in 2005. Shortly thereafter, as the Irish economy was hit hard by the global recession, Select seemed unable to maintain the connection with Irish shoppers that Quinn had nurtured for more than four decades.

    According to the Irish Times, "As a result of the reorganisation, 102 staff at Superquinn’s support office in Lucan are to be made redundant, Musgrave said. The merger will not, however, affect the 2,500 staff working across Superquinn’s branch network."

    Musgrave CEO Chris Martin released the following statement: “Combining our SuperValu and Superquinn stores creates an unrivalled Irish retail brand, enabling shoppers to access SuperValu’s offer nationally, while incorporating the best of Superquinn ... We understand that some customers will be sad to see the Superquinn name change. However, the decision follows a considered review of all options and is an inevitable next step given the realities of a totally changed grocery market and what the Irish consumer now needs."
    KC's View:
    I find this to be personally distressing, since I've done a lot of stories about Superquinn over the years, and have enormous respect for Feargal Quinn, who I am lucky enough to count among my friends. (And, through him, I've connected with the wondrous Anne O'Broin and her husband, Fiach O'Broin, who my son calls "the smartest man in the world" - both of whom have become my extended Irish family.)

    But I guess that some things outlive their usefulness, and maybe, at a time when the Irish economy continues to struggle, Superquinn simply wasn't a sustainable business model anymore. It also is possible that Musgrave simply is looking for efficiency as opposed to effectiveness, but I'm not on the ground there and it is hard to judge.

    The good news is that since selling Superquinn, Feargal Quinn has had an ongoing and distinguished career as a statesman in the Irish Senate, and also has a TV program in which he advises small Irish businesses about how to be more competitive. So the chain that bears his name may be going away, but the Quinn magic lives on.

    Published on: August 7, 2013

    The Wall Street Journal reports this morning that "the obesity rate for low-income preschool-age children declined between 2008 and 2011 in 19 of 43 states and territories measured, federal data showed on Tuesday ... This followed a leveling off of childhood obesity rates in recent years, a generation after they began a climb to levels that alarmed pediatricians and public-health experts and prompted national campaigns to bring the rate down ... The decline was greatest in the U.S. Virgin Islands, where the obesity rate in such children fell to 11% in 2011 from 13.6% in 2008. Drops of more than one percentage point were also seen in Florida, Georgia, New Jersey, Missouri, and South Dakota."

    Public health officials say that while the movement is small and limited to young, low-income children, it suggests that the efforts focused on addressing childhood obesity may indeed be having an impact. "Small, but statistically significant," said one expert.
    KC's View:
    Good news. But public policy makers and private policy makers cannot rest on whatever laurels they think they have. Through better food in the schools, more physical education classes, greater transparency about nutritional issues and education of parents, this issue requires constant vigilance and attention.

    Published on: August 7, 2013

    The Associated Press reports that Target Corp. plans to acquire DermStore beauty Group, an online retailer, "in a bid to tap into the online beauty market and set itself apart from other retailers ... Target has been buying up a number of smaller specialty businesses lately in an effort to expand its presence in niche markets. It announced in March that it was buying Chefs Catalog and the assets of in two separate transactions to create a subsidiary."

    The company said it plans to keep the retailer on the website.

    Terms of the deal were not disclosed.
    KC's View:
    I suspect we may see a lot of these kinds of deals, as retailers look to create some sort of scale in order to compete online with the likes of Amazon, and compete in a kind of retailing firefight that is likely to take place between Amazon and Walmart.

    Published on: August 7, 2013

    The Boston Globe reports that Ahold-owned Stop & Shop has decided to close its six stores and three gas stations in New Hampshire, saying that were underperforming.

    The story says that the stores will close by September 21

    Stop & Shop said that while the closures will leave the company without a physical New Hampshire presence, it will continue to provide its Peapod home delivery service to a number of southern New Hampshire communities.

    Stop & Shop will continue to operate more than 400 stores in Massachusetts, Connecticut, Rhode Island, New Hampshire, New York, and New Jersey.
    KC's View:

    Published on: August 7, 2013

    The Chinese government is using the current tainted powdered baby formula scandal as a way to build sales and confidence in equivalent domestic products.

    As reported here on MNB yesterday, both China and Russia have stopped importing some milk powder from New Zealand's giant Fonterra Cooperative Group after the company warned that some batches of the product made last year have have contained bacteria that can cause a rare illness called botulism.

    Such products made abroad had been boosted by China's own food safety issues, specifically China-made powdered formula that was unsafe because of the presence of melamine.

    But the Wall Street Journal reports this morning that now "Chinese state-run media have ramped up criticism of foreign baby formula ... The scare - for which Fonterra Chief Executive Theo Spierings on Monday apologized on a visit to Beijing - has given Beijing's efforts to help its own dairies a rhetorical shot in the arm. Beijing this year has intensified efforts to bolster a domestic industry hobbled by a 2008 tainted infant-formula scandal that killed at least six babies and hospitalized thousands of others, in one of China's most shocking food-safety scare."

    In a related story, the Associated Press reports that China "has fined six milk suppliers, including Mead Johnson and New Zealand's Fonterra, a total of $108 million for price-fixing after an investigation that shook the country's fast-growing dairy market ... The investigation reflected intensifying scrutiny of business under China's 5-year-old anti-monopoly law. Most targets so far have been foreign-owned. It was carried out against the backdrop of Chinese probes of possible bribery and other misconduct by global suppliers of pharmaceuticals and other products."
    KC's View:

    Published on: August 7, 2013

    Information Resources Inc. (IRI) is out with its Q2 2013 MarketPulse survey, saying that it suggests that "consumers have settled into the 'new normal' of conservative purchase behaviors and attitudes, so consumer packaged goods (CPG) marketers must keep their finger on the economic pulse and find innovative ways to entice consumers to loosen their purse strings."

    There is some measure of optimism in the survey: "28 percent (of millennials) feel their financial situation has improved during the past year, versus 20 percent of those aged 25-54 and 16 percent of those aged 55-plus," and "42 percent (of millennials) expect their financial position to improve it the coming year, versus 26 percent of those aged 35-54 and 17 percent of those aged 55-plus."

    The survey goes on: According to the Q2 2013 MarketPulse survey, 56 percent of consumers will decide on most of the products they will purchase before they step foot out of their homes, versus 59 percent in Q2 2011. While 58 percent of consumers say coupons and 76 percent say brand experience are important, today's shoppers are very in tune with price. In fact, the survey also uncovered that 52 percent of shoppers choose the store in which they will shop, because it offers lower prices on items they need. To find the lowest prices, shoppers are embracing a variety of tools, such as:

    • 65 percent use prices advertised in retailers' weekly grocery circular to compare prices.
    • 56 percent compare prices across area retailers to identify lowest prices.
    • 26 percent use prices on retailer websites to compare prices

    And, not all purchase decisions are made at the kitchen table. The following store-based marketing tactics still influence the final brand decision:

    • Shopper loyalty card discount, 48 percent.
    • In-store circular, 44 percent.
    • Signs/displays in store, 28 percent.
    • In-store kiosk, 10 percent.
    • In-store touch screen digital display, 4 percent.
    KC's View:

    Published on: August 7, 2013

    • The San Diego Union Tribune reports that discount supermarket Grocery Outlet "will continue its expansion into San Diego County by opening three new stores in North County by the end of next month. Grocery Outlet, which opened its first North County store in Oceanside two years ago, will open additional stores in Poway on Thursday, in Escondido on Aug. 15 and in San Marcos on Sept. 19."

    • Crossmark, the Texas-based marketing company, said yesterday that it is acquiring Marketing Werks, a Chicago-based experiential marketing firm. Terms of the deal were not disclosed.
    KC's View:

    Published on: August 7, 2013

    • The Virginian-Pilot reports that "Bill Parker, the third president of Farm Fresh in less than four years, left the company as of Tuesday." A Supervalu spokesman said that the change would "allow the company to go in a different direction."

    Chad Ferguson, vice president of marketing and consumer insights for Supervalu, takes over Farm Fresh as interim president.

    The story notes that Farm Fresh has suffered from a lot of leadership issues recently. Supervalu, the story says, "made Parker the official president of the local chain five months ago, after Parker became acting president in September. Having worked for Farm Fresh for 14 years at the time, Parker replaced Gaelo de la Fuente, who served as president for 2-1/2 years. De La Fuente succeeded Ron Dennis, who led Farm Fresh for more than 12 years before retiring."

    • The Campbell Soup Co. yesterday said that it has promoted Ed Carolan, who has been leading Campbell’s core U.S. Soup and Simple meals business, to be president of US Retail.

    Tim Hassett, senior vice-president of sales for Campbell North America, has been promoted to the role of senior vice-president and general manager, Away from Home, and chief customer officer of Campbell North America.

    Darren Serrao, vice-president of innovation for Campbell North America, has been promoted to be the company's senior vice-president of innovation and new business development.
    KC's View:

    Published on: August 7, 2013

    ...will return.
    KC's View: