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Hispanics Celebrate the Day of the Dead

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With 59 million Hispanics in the U.S., they represent almost 18 percent of the U.S. population and their buying power grew to $1.4 trillion in 2016, according to Nielsen. Hispanics are now the nation’s largest minority and have accounted for nearly half of the population growth in the U.S. since 2010.

Need to win over Hispanic customers?

Starts by understanding who they are. First of all, they’re young. Their median age is 29 compared to 41 for the rest of the population. They also use their mobile phones more than non-Hispanic populations to purchase and share purchase experiences online. But they also watch TV. Advertisers spent $9.2 billion in 2017 to reach Hispanic consumers, over $6 billion of that on TV advertising.

In general, Hispanics tend to:

  • Embrace family, cultural traditions and heritage and many stay in contact with friends and relatives in their home countries.
  • Pay attention to ads that include aspects of their culture, whether the ad is in Spanish or English.
  • May prefer messaging in Spanish. For example, Best Buy’s Mexico Spanish-language website gets more traffic from within the U.S. than Mexico and Latin America combined.

One of Hispanics important cultural traditions is The Day of the Dead (Dia de los Muertos), a Mexican holiday that honors the lives of deceased friends and family. Celebrated in the U.S. from Oct. 31 to Nov. 2, the holiday tradition includes the creation of altars to deceased loved ones decorated with photos, meaningful objects and their favorite foods which are said to attract their souls.

In towns and cities throughout Mexico, individuals wear costumes, hold parades and parties and make offerings to lost loved ones. The success of Disney’s recent Coco which centered around the holiday has heightened awareness and sales of Day of the Dead products and are expected to spike this year.

Retailers taking part include:

  • Etsy, with over 87,000 results in its Day of the Dead online collection,
  • 30,000+ product results on Amazon.com, and
  • Target’s web page dedicated to Day of the Dead items available online and in store,
  • Walgreens is offering an LED figurine and wooden table decor among them in most of its stores.
  • 1-800-FLOWERS offers a skull flower arrangement, a special edition tin from The Popcorn Factory and skull truffles from Simply Chocolate skull truffles and Day of the Dead Oreo cookies.

Pet Food Market Growing by Leaps & Bounds

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The global pet food market is projected to reach nearly $99 billion by 2022, according to a new report by Grand View Research, Inc. Demand for dog food products is predicted to grow 2.7% annually in volume over the next four years. Sales of wet/canned products is projected to expand at a CAGR of 4.9% over the same period.

What’s fueling the growth?

A fitter Fido is one reason. As consumers become more interested in health and wellness, they want the same for their pets. That is, pets are no longer just pets. As a result, there is a rising demand for higher quality and nutritious, healthy, and organic pet food.

My BFF. The rise in pet adoption is expected to continue to be a major factor driving growth. Increases in one-person households have led to more people seeking pets for companionship. Plus, increasing life expectancy (for humans) has led to greater numbers of aging adults adopting pets for the same reason.

PET FOOD TRENDS

Online sales jumping – Like many products, pet food is seeing rapid acceleration of online sales, particularly on specialty sites like Chewy.com.

Natural selection – Higher priced natural and organic products are becoming mainstream. In 2017, premium dog and cat food purchases made up more of total sales than economy and mid-priced segment sales combined.

Feed your breed – Pet food makers are creating specialized menu options and developing meals to meet needs based on breed, size/weight, age, activity level and more.

Itching for more – Pet owners are looking for food solutions that address their pet’s allergies and intolerances. Nutrition specialists at tails.com reported a 75% increase in the demand for hypoallergenic food blends for dog food since 2016.

Stress rehearsal – According to business solutions agency Gale, 44% of Millennials see their pets as ‘practice’ before they have children.

Unleashed innovations – Pet food manufacturers have come up with a range of pet foods paralleling human food such Sheba Classic Soup range, Natural Instinct Fish Fingers, Whiskas Casserole and even Bowser Beer. (But you’ll still be drinking alone. This pooch hooch is non-alcoholic.)

Leading the pack? – Petco announced it will not sell dog or cat food containing artificial colors, flavors and preservatives after May of next year.

Food Giants Thinking Small – The Rise of Stealth Brands

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It’s quite possible your favorite new food item you thought was made by a small, independent startup actually comes from a very large CPG company. It’s easy to get fooled, as the label may not make any mention of the parent company. Plus, the brand name, the packaging design and brand story would lead you to believe it really comes from a small batch, artisan firm. But is it?

Just-Food’s columnist Victor Martino has coined a term for these new types of brands:  stealth small brands.

Unlike corporate acquisitions (think General Mills purchase of Annie’s Homegrown) stealth small brands by definition, are created and developed internally by large corporations, but marketed as if they come from a much smaller firm.

Some examples:

  • Maker™ Overnight Oats (breakfast entree) – owned by PepsiCo’s Quaker Oats
  • Wildscape (frozen entrees) – owned by Nestlé
  • Véa World Recipes World Crisps (snacks) – owned by Mondelez International
  • Autumn’s Gold (granola products) – owned by General Mills
  • Joybol (smoothie bowls) – owned by Kellogg

Why is this happening?

According to IRI’s most recent New Product Pacesetters Report, more than a quarter of the top-performing food brands launched in the U.S. last year, came from smaller food manufacturers.

Who’s driving this?

Likely Millennials. They are driving the growth in healthier and more natural food products and are behind the jump in produce category sales in grocery stores in recent years. Millennials (ages 22 to 36) are now the largest segment of the workforce and smart companies are responding to their tastes and preferences.

Why not just acquire a small food company?

Acquisitions are still happening, but premium prices are being paid as you’re usually competing with other food giants with deep pockets. Angie’s, maker of BOOMCHICKAPOP kettle corn was purchased by ConAgra a year ago for $250 million. The snack company’s annual sales were less than $100 million.

 A grain of truth

The websites of these stealth brands do an excellent job of portraying the image of a small, folksy startup with messaging from the “owners”. E.g. “Jess & Barry” explain “The Maker Way” on the Maker Overnight (Quaker) Oats website and sign off with “Gotta dash”.

Web content on stealth food brand sites includes the healthy language you’d expect like natural, organic, gluten free, no GMO, etc. Some are even “Paleo Certified” – which means the product is grain-free, legume-free, dairy-free and additive-free. Paleo Certified, however, won’t indicate whether it is a stealth brand as is the case with Autumn’s Gold.

Plus, you’re not likely to find the parent company’s name on the stealth brands’ website or even a mention of the stealth brand on the parent company’s website. But these are healthy products and the ingredient labeling is accurate. So consumers are getting what they want.

The question is will customers care when find out their favorite new mom & pop food snack is actually made by a global food giant?

Stay tuned.

Best Brand Stunts

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Brand stunts seem to be growing and getting more and more creative. Why? A clever brand stunt flawlessly executed can create lots of buzz and that means unlimited free publicity via news organizations and social media. It can also help invigorate a brand in a way that paid ads cannot. Plus, if the stunt is recorded, the buzz can continue in video ads and commercials.

Here are some of our favorite brand stunts from 2018:

Drone Dance – For the opening ceremony of the 2018 Winter Games in South Korea, Intel launched 1,200 lighted drones choreographing them to fly together to form a moving snowboarder, a dove flapping its wings and the Olympic rings. The dancing drones were actually filmed in South Korea in December 2017 and rebroadcast for the event. The drones have been used at other events forming many other shapes including the Intel logo.

Fast Lane – SpaceX’s Falcon Heavy rocket took off earlier this year with an extra payload – a Roadster, an electric sports car built by sister company, Tesla. Strapped inside the red convertible is a mannequin wearing one of SpaceX’s spacesuits. Both of Elon Musk’s brands should get plenty of mileage from the stunt as the car is expected to orbit the sun for hundreds of millions of years.

Whopper of a Deal – To get customers to download their app, Burger King enticed them with a one cent whopper. The catch: they had to be in close proximity of a McDonald’s to activate the coupon. Why? Well it creates more buzz when you clog your rival’s parking lots and cause confusion as some customers mistakenly asked for the penny Whopper at McDonald’s. Maybe McDonald’s should have countered by offering a Big Mac for a penny – after downloading their app of course.

Win Diesel – Part of Diesel’s “Go with the Flow” campaign created by Publicis New York, the clothing brand opened a one-off store in an area of Manhattan known for offering cheap fakes of well-known brand names. To make sure customers thought the items were truly knock-offs, the T-shirts, hats and jeans were labeled with Diesel misspelled as “Deisel”.

But all of the clothing items were genuine Diesel products made in their manufacturing plant in Italy and sent to the pop-up shop on Canal Street. The store was only open for two days, but the company recorded customer interactions at the store and will feature them in an ad campaign making the prank a long term win for Diesel.

Priceless Payless Prank – Like Diesel, Payless Shoes opened a fake store, but it went in the opposite direction. Payless created a high-end, fashion shoe store brand in a posh Los Angeles neighborhood with an Italian sounding and brilliant name that played off their own; “Palessi”.

Dozens of VIP fashion “influencers” from around LA were invited to Palessi’s private “grand opening”. Actual sales were recorded (to be used later in commercials) showing the fashionista’s exclaiming about the high quality and style of the footwear. Many paid as much as $645 for shoes that Payless normally sold for $19.99 to $39.99. The duped buyers were informed of the prank soon afterward and received full refunds. They got to keep the shoes along with a few scuffs on their reputations.

Online Retailers Thinking Mall

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More and more online brands are getting physical and opening brick-and-mortar stores. How many? JLL Research reported the top 100 digital-native brands they researched have announced plans to open at least 850 stores over the next five years.

Some start off as pop up stores and move into permanent spaces. Many are locating in upscale, premier malls. Most are what you’d expect — higher-end fashion clothing retailers where customers prefer to try on items before they buy. Some examples include Fabletics, an online active wear retailer, which recently added two dozen stores, and women’s intimates retailer Adore Me, which is planning 300 additional stores.

Other examples where customers want to interact with products before purchasing include mattress maker Casper (already in Target stores), which plans to open 200 of its own stores. The original online eyeglasses retailer, Warby Parker, opened its first retail location in SoHo in 2013. It now has 75 brick-and-mortar stores in the U.S. and more opening soon. Indochino offers tailored suits for men. You send them your measurements or visit one of their stores (now in most major markets) where a professional can take your measurements.

What’s driving this?

Boosting online traffic – For a brand that’s less than 10 years old, new store openings will result in a 45 percent increase (on average) in online traffic according to a recent survey by International Council of Shopping Centers. Plus, acquiring new customers via online marketing is getting more costly and difficult.

Expand customer base – In categories like clothing, there will always be a large customer segment that will only buy if they can first try it on. Yes, items can be returned, but many customers dislike having to re-package and send items back to the online company. Returning items to brick-and-mortar stores is relatively easy especially when it’s a store they visit regularly.

Deeper insights – Online retailers have compiled valuable customer product preferences and buying behaviors, which help them to choose ideal store locations, design appropriate floor plans, and determine optimal product assortment. Plus, gaining face-to-face customer intelligence can lead to new areas of opportunity.

Flexible leasing – Store closings have led to excess retail space and that means landlords are more open to shorter leases and lower rental costs. Plus, landlords can be more flexible when there’s less risk leasing to an established online brand.

Innovative strategies – The showroom model allows customers to interact with products, but they’re shipped from a warehouse. No onsite inventory = less square footage = lower rental costs.