http://consumeredgeresearch.com/index.php Company news en rrussell@consumeredgeresearch.com Copyright 2011 2011-08-15T13:02:20+00:00 http://consumeredgeresearch.com/news/people_report_and_black_box_intelligence_create_research_powerhouse_in/ http://consumeredgeresearch.com/news/people_report_and_black_box_intelligence_create_research_powerhouse_in/#When:14:02:20Z CONNECTICUT, 8-15-11—Black Box Intelligence LLC (BBI), Consumer Edge Research LLC (CER), GuestMetrics LLC (GM) and People Report , announced today the formation of a joint venture that will capture the combined product offerings of the 4 companies and provide revolutionary foodservice industry data and analytics. Together the four firms track the financial, consumer and human capital metrics of over 200 hospitality and restaurant companies, 60,000 households annually and one million employees. BBI provides benchmarked weekly and monthly financial reports & insights, directly captured from over 12,000 locations in the casual, fast casual, fine dining and quick service segments. GM is the leading enterprise management provider of foodservice industry spending data, and currently captures over 250M transactions per year across the quick service, fast casual, casual, fine dining, bar and hotel industries. CER is a preeminent independent research boutique firm, focused on the global consumer sector, combining primary research with rigorous analytics. People Report is the only source of benchmarked human capital metrics for public and private foodservice companies, reporting on 20,000 outlets monthly on the demographics, turnover, and compensation practices in the service sector workforce. Commenting on the new partnership, Wallace B. Doolin, Founder, Chairman and CEO of BBI said, "This joint venture allows BBI and People Report to deepen its penetration into restaurants, enter hotel foodservice and add leading macro and consumer research insights to its rich executive summary and benchmarked reports. Our combined technologies utilizing direct data feeds will fuel continued innovation in product offerings and speed of reporting. This is truly the next generation of game changing business intelligence. Our combined goal is to provide our members and clients the predictive analytics that lead to best in class performance and a sustainable competitive advantage." Mr. Doolin is a widely recognized and respected global restaurant industry leader, who has served as the CEO of multiple brands, including Carlson Restaurants Worldwide, La Madeleine, and Buca di Beppo. His accomplishments include leading the acquisition and serving as President of Applebee’s, and leading the global expansion of T.G.I.Friday’s from 135 restaurants in 2 countries to over 750 units in 55 countries, exceeding $2 billion in revenue. He has served on the board of the National Restaurant Association for fifteen years, and was the Chairman of its Educational Foundation. Today he serves on several public, private and non-profit boards. Bill Pecoriello, CEO of Consumer Edge Research, said "I’m thrilled to be bringing the collective best in class capabilities of these four companies together to help revolutionize the data and value added insights we can collectively provide on the foodservice industry." Prior to founding CER in January 2009, Mr. Pecoriello was a Managing Director at Morgan Stanley covering the Beverages and Household/Personal Care sectors. He also spent over five years at Sanford Bernstein, where he was a Partner, and was a project manager at Mars & Co where he consulted to the senior management teams of consumer product companies. About Black Box Intelligence LLC Black Box Intelligence was launched in 2009 as a membership model providing weekly intelligence on 12 key revenue metrics in 82 DMA’s. Additionally, on a monthly basis BBI also provides benchmarking on food, beverage and labor cost metrics as well as an overall industry insights report for our members. All reporting is done by direct data feed from its members resulting in web enabled reports through our state of the art interactive dashboards. All reporting is benchmarked to give members business Intelligence to determine how well they are performing against their key competitors and the industry overall. It is the most comprehensive product on the market. Contact: Wallace Doolin, Founder, Chairman, & CEO at wally.doolin@prbbi.com or (214) 728-2216 About People Report People Report, is the foremost provider of human capital metrics for the service sector workforce. Founded in 1995 by Joni Thomas Doolin, CEO, and a group of five chain restaurant companies, the People Report consortium has grown to represent hundreds of chains, hundreds of thousands of managers, and millions of employees. Our hallmark is dish room to boardroom business intelligence, that provides industry leading, benchmarked research for key human capital metrics, best employment practices, total rewards and compensation for chain operators, franchisees and other service sector employers. In addition to its reports and publications, People Report offers first-rate speakers, newsletters, webinars and acclaimed industry conferences throughout the year. Contact: Joni Thomas Doolin, Founder & CEO at joni.doolin@prbbi.com or (214) 437-9216 About GuestMetrics LLC GuestMetrics, is the leading provider of Customer Insight Solutions for the hospitality industry and its suppliers/distributors. The GuestMetrics software is fully integrated with the leading point-of-sale (POS) systems and allows hospitality providers at every level of the market to improve business operations. For the first time in the marketplace, GuestMetrics, through its data mining process, provides beverage alcohol and food suppliers with actionable insight into consumer behavior at the guest check-level through. From world-class beverage alcohol suppliers to fine dining establishments and regional/national restaurant chains, clients depend on GuestMetrics tools to build stronger brands and drive revenue growth. For more information, please visit http://www.guestmetrics.com. Contact: Brian Barrett, President at bbarrett@guestmetrics.com or (703) 297-3410   2011-08-15T14:02:20+00:00 http://consumeredgeresearch.com/news/more_signs_of_weaker_consumer_spending/ http://consumeredgeresearch.com/news/more_signs_of_weaker_consumer_spending/#When:13:26:34Z The debt ceiling debate, a slowing economic recovery, and the more recent slide in stocks has given consumers plenty of reasons to be cautious, and it’s starting to show up in the numbers. First Data’s latest Spend Trend report showed consumers spent less on credit cards in July, started shopping more at value retailers, and purchased fewer discretionary items. The average ticket, or the amount consumers spend in each transaction, also declined. “Consumer angst increased in July, as a succession of negative economic headlines and the debt ceiling debate combined to put a damper on consumer spending,” First Data said in their report. “Even though input costs have risen with inflation, many merchants have responded by slashing prices in order to spur consumer demand. This trend will have a negative impact on these retailers heading into the peak of the back-to-school shopping season.” Year-over-year volume growth was 7.3 percent in July, which was a significant slowdown from June’s 8.8 percent growth, and the largest month-to-month decline in six months. The numbers are based on aggregated year-over-year, same-store sales activity for card-based payments. Meanwhile, the average ticket growth was 1.1 percent in July, First Data said. This is a significant slowdown from June, when the average ticket grew 2.1 percent. The slowdown is even more concerning when one considers that gas prices are on the rise again and are helping to push up the size of the average ticket. Also noteworthy, higher-end consumers, which have been helping to prop up consumer spending, were among those pulling back on credit-card spending last month. Of course, part of what is driving this weaker spending is souring consumer confidence, and that trend does not seem to be reversing itself. In fact, one research firm, Consumer Edge Research, issued a survey of consumer confidence, and it shows confidence has fallen sharply in the first 10 days of August. The interim CER Consumer Economic Index, which tries to gauge the Conference Board’s consumer confidence index, was at 46.9 in mid-August. That’s an 8.5 percentage point deterioration from the final CER CEI of 55.4 in July. What’s more, the reading is also the weakest Consumer Edge has measured since it began the index in March 2010. “Although there are many casual factors behind the changes in consumer confidence, the employment picture is likely one of the biggest,” ConsumerEdge said. By: Christina Cheddar Berk @ CNBC Specifically, Consumer Edge cited the acceleration in the the U6 “full” unemployment figure in the Department of Labor’s monthly employment report. From March to July, the U6 deteriorated 40 basis points and is now at 16.1 percent. That’s a reversal of earlier this year, when the U6 number had a break-out period improving from 17.0 percent to 15.7 percent. With this backdrop, it’s not surprising that the more recent back-to-school spending forecasts have offered an uncertain outlook for back-to-school shopping season. One of the latest came from BDO USA, which said it expects consumers and retailers to play a “cat and mouse” game when it comes to buying back-to-school items. Instead of heading out for one big back-to-school buying binge in a single weekend, consumers will be spending in fits and starts as they seek out the best deals and comparison shop online to make sure they are getting the best deal. And they may find them because back-to-school merchandise was ordered in February and March, when many had a more positive outlook about where consumer spending would be at this time. As a result of this volatility, BDO doesn’t expect this back-to-school shopping season will offer investors a good sense of how holiday sales will fare. 2011-08-10T13:26:34+00:00 http://consumeredgeresearch.com/news/consumer_edge_research_launches_cer_china_consumer_tracker/ http://consumeredgeresearch.com/news/consumer_edge_research_launches_cer_china_consumer_tracker/#When:15:33:14Z STAMFORD, CT, May 16, 2011—Consumer Edge Research announced today the inaugural publication of the firm’s CER China Consumer Tracker, which will help Consumer Edge’s clients keep on top of key consumer trends in the most important emerging market in the world.  The CER China Consumer Tracker captures the views of 2,000 Chinese consumers each month using a proprietary methodology to ensure a geographically diverse sample, capturing respondents from across China’s 665 largest cities.  The sample is designed to be representative of China’s growing Internet population in terms of age, income, and gender. The first wave of the study was launched in October 2010.  The CER China Consumer Tracker is designed to link consumer attitudes and macroeconomic conditions with category and brand-level behaviors in a wide range of sectors such as consumer packaged goods, retail, restaurants, apparel, luxury goods, and electronics.  Key conclusions from the first published report include: The overall picture of China’s consumers in April 2011 was generally positive.  Positive findings include: consumer confidence remains above levels seen during late 2010, wage growth continues to outpace cost inflation, and there is increased willingness to spend, which are all positive signs for spending among the consumer base in China.  Negative findings include: an increase in the portion of consumers who are seeing higher real estate costs and finding it more difficult to borrow, which is a headwind for consumer spending. The CER China Consumer Tracker includes several proprietary indices to capture overall sentiment and trends, including: “China CER Consumer Economic Index”:  The China CER CEI is a robust measurement of overall consumer confidence about economic conditions and expectations.  After rising to a 6-month high of 107 in March, the CER CEI slipped back to 101 in April, but remains above levels seen in late 2010.  “China Willingness to Spend Index”:  The China Willingness to Spend Index is the roll-up of a dozen detailed questions about spending and economizing behaviors.  After hitting a low of 96 in November 2010, the index has risen sequentially 5 months in a row and is now at 121, representing a 7-month high, a positive sign for consumer spending in China. “Buy China-Staples Index”:  To quantify consumers’ willingness to purchase Western consumer staples products, the “Buy China-Staples” Index is a roll-up of six category-specific questions about preferences for purchasing staples made by Chinese firms.  Compared to the October 2010 base of 100, the index has declined to 66 in April 2011, a positive indication for Western-based firms selling staples in China. Consumer Edge Research will be publishing detailed results each month including a comprehensive view of macro-economic conditions through the eyes of consumers as well as detailed industry vertical reports with company-specific information including:  Retail, Staples, Restaurants, Consumer Discretionary. For additional information, please contact: Bill Pecoriello, CEO, Consumer Edge Research wpecoriello@consumeredgeresearch.com Peter Reidhead, Vice President, Consumer Edge Research preidhead@consumeredgeresearch.com David Decker, President, Consumer Edge Insight. ddecker@consumeredgeinsight.com About Consumer Edge Research: Consumer Edge Research LLC is a preeminent independent equity research boutique focused on the global consumer sector, including consumer staples and consumer discretionary. We generate non-consensus ideas combining uniquely thorough, fact-based, primary research with rigorous valuation analysis and perspective from years of covering our sectors. Our team has over 100 years of combined experience in the consumer and financial services industries. Our data are gathered both from global syndicated sources as well as primary research surveys, industry insights and other proprietary data collection. We offer a high level of service and responsiveness by keeping a focused client list.  To learn more about CER please visit consumeredgeresearch.com About Consumer Edge Insight: Consumer Edge Insight LLC is a market research and consulting firm that helps investors and companies that want to have deeper insight into how consumer behavior is changing around the world and how to profit from those changes. We help institutional and private equity investors make better investments by identifying which companies are most likely to prosper in the future and tracking company performance. We help companies monitor key trends and develop strategies to enhance shareholder value.  To learn more about CEI please visit consumeredgeinsight.com 2011-05-17T15:33:14+00:00 http://consumeredgeresearch.com/news/the_year_ahead_2011_predictions_for_marketers/ http://consumeredgeresearch.com/news/the_year_ahead_2011_predictions_for_marketers/#When:15:14:06Z The Year Ahead: 2011 Predictions for Marketers What to Expect in Personal Care, Food, Beverages and Retail By Ad Age Staff It’s officially the New Year. What now? Well, the economy might be brightening, but we’re not in the clear yet. Ad Age took the pulse of top executives in the major industry sectors to compile this preview. See sidebar for more predictions. Personal care This year, it’s all about volume growth while holding or raising pricing. Last year saw a major step up in marketing support as many players attempted to build growth that lagged behind the modest economic recovery. But consumers kept a tight hold on their wallets. Volume across the industry was largely flat as sales rose an anemic 1% through the first 11 months of the year, according to SymphonyIRI data from Deutsche Bank. There were some bright spots. Procter & Gamble Co., while perhaps not producing the growth numbers some analysts had hoped and making its gains at the expense of thinner margins, did work its way back into the top half to third of its competitive set in organic sales growth by year end. L’Oreal, behind a big ramp-up in spending globally, also produced a major sales turnaround. But it’s going to be harder for everyone to maintain promotional- and ad-support levels in 2011, because commodity costs, which had been down to neutral last year, are on the rise again this year. Another factor draining the top line this year are demands from Walmart and other big retailers to take over product shipping at the supplier’s dock, which, while largely neutral from an earnings standpoint, can shave as much as 2% off the reported top line of U.S. operations, like that of Clorox (CPG players actually spend more on transporting their products than making them). Another potential positive is a changing of the guard at Walmart to U.S. CEO Bill Simon, who appears to have shifted the emphasis from margin improvement through assortment streamlining to top-line growth through wider assortment, new products and less restrictive in-store marketing. The caveat: Mr. Simon’s shift hasn’t ended Walmart’s string of six consecutive quarterly declines in same-store sales yet. To Sanford C. Bernstein analyst Ali Dibadj, it increasingly looks like such factors as high long-term unemployment and the end of middle-class consumers’ ability to use their homes like ATMs is creating permanent, more frugal behavior among most consumers. It all ads up in his mind to the sort of lower-growth expectations for CPG that drove waves of consolidation among pharmaceutical players over the last decade. So he, like other industry analysts, is on the lookout for merger activity. Among major factors to watch on the marketing front, said former P&G Global Marketing Officer and now consultant/professor Jim Stengel, is the explosive growth of tablet computers and how they’ll change media strategy, consumption and advertising “more than any new technology yet.” Tablets are already helping drive a fundamental shift in how marketers think about digital marketing, said Kelly Mooney, CEO of Resource Interactive, Columbus, Ohio. Mobile used to be the last thing considered in digital campaigns, often tacked on after all else was complete, she said. Now, it’s usually the first thing. Packaged food Packaged-food companies experimented with heavy discounting in 2010, which often hurt their bottom line. In many cases marketers failed to lure enough business to boost profits, so now executives are trying to figure out how to raise prices. Breyer’s ice cream Consumers are “still being very cautious with their dollars,” said Sandra Williams, a brand director for ConAgra Foods. “You’ve got to really show what value you are giving consumers with your products.” Brands this year will continue to reduce unhealthy ingredients, such as sodium, but they might not make a big a deal out of it, for fear of turning off consumers who associate it with bad taste, according to Mintel. The market researcher also expects brands to keep experimenting with retro packaging and ad campaigns, noting that “retro means something different to each age group, providing significant opportunities for many brands.” Beverages In the beverage space, John Sicher, editor and publisher of Beverage Digest, said: “Probably the biggest challenge continues to be concerns around soft-drink taxes and the health advocates’ concerns about sweetened beverages. But there is huge potential opportunity if and when the beverage companies can make progress on new sweetener technologies.” New sweeteners such as Coca-Cola’s Truvia and PepsiCo’s PureVia represent potential for the beverage giants as they look to cut calories but maintain taste to appeal to increasingly health-conscious consumers. At a conference hosted by Beverage Digest in December, Indra Nooyi, PepsiCo’s CEO, said the company is “very close” to launching new products that use a mix of sweeteners. PepsiCo’s PureVia sweetener “We see incredible opportunity in the beverage sector—mostly tied to innovation,” said Lauren Hobart, chief marketing officer-sparkling beverages at PepsiCo Beverages Americas. “By that, we mean everything from product innovation to breakthrough packaging innovation to marketing innovation that uniquely engages consumers.” Ms. Hobart added that the beverage giant would be paying attention to how consumers play, watch, enjoy and manage their lives in a multi-screen environment, as well as how its brands can play a role in that space. Bill Pecoriello, CEO-Consumer Edge Research, cites potential taxes on beverages, particularly at the state and local level, given continued budget deficits, as a key concern. Beer A year ago in this space we wrote that the biggest challenge for brewers in 2010 was to restore luster to their flagship brands. Not much has changed. Beer shipments are expected to be down 1% to 2% when the final numbers are tallied, according to Beer Marketer’s Insights. The only megabrand expected to end 2010 in positive territory is Coors Light. Coors Light may be the only beer megabrand to win in 2010. Bright spots heading into 2011 are imports, which had better sales after a terrible 2009, as well as craft brews, which had a great year and show no signs of slowing down. A big change will come next fall when Anheuser-Busch replaces MillerCoors as the official beer sponsor of the National Football League. The brewer paid an estimated $50 million a year for the privilege, which could turn out to be a bad bet if there’s an NFL lockout and no season. Meantime, brewers are expected to continue to invest in digital media, with an emphasis on social-planning tools—because the more people get together, the greater the chance they will drink more. Fast food Among some of the biggest challenges the fast-food industry has to face, the largest is government regulation. President Barack Obama in March 2010 signed the health-care reform legislation into law which will require restaurants with 20 or more locations to list calorie counts on menus by March. On the state and municipal level, locales like San Francisco are limiting restaurants in how they market to children. The perpetual promotion of dollar-menu and value-meal items may prove to be a bad move for McDonald’s. Another issue the industry faces is the rising prices of commodities. Costs of ingredients keep increasing, yet many chains are reluctant to raise prices, especially for value offerings. The perpetual promotion of dollar-menu and value-meal items may prove to be a bad move in the long run. Bonnie Riggs, restaurant-industry analyst at NPD Group, said, “Restaurants should wean people off the steep discounting and divert their attention—introduce new products, new promotions, limited-time offers and premium products. The value menu isn’t going away, but it may be better to promote it less.” Retail “Curb your enthusiasm” will be the mantra for retail in 2011. Mike Gatti, executive director of the Retail Advertising and Marketing Association, said expectations are likely to go up after a fairly successful holiday season, even as pricing pressure and promotions remain. “Everyone is still competing for fewer dollars.” Marshal Cohen, chief industry analyst at NPD Group, expects this year will be challenging, if retailers and manufacturers don’t put out new, exciting merchandise. “Those new products stimulate spending growth,” he said. Retailers will also have plenty of new technology to wrap themselves around. Tablets and mobile phones, in particular, will have an impact on how consumers shop. The onslaught of new devices is also likely to boost online shopping. “It’s going to become a much more competitive environment between online and brick and mortar,” predicted Mr. Gatti. 2011-01-10T15:14:06+00:00 http://consumeredgeresearch.com/news/basket_cases/ http://consumeredgeresearch.com/news/basket_cases/#When:12:42:58Z “WE WON’T let up,” insisted Bob McDonald, the boss of Procter & Gamble (P&G) at the annual shareholder meeting of the world’s biggest consumer-goods company on October 12th. He promised that P&G was still on track to have 5 billion customers by 2015. But it is a struggle for the maker of Pampers nappies and Fairy washing-up liquid. “Many of the economies in which we operate are still recovering from recession,” Mr McDonald admits. P&G and its archrival Unilever, another global consumer-goods firm, had a grim time last year: profits plummeted. This year has been only slightly better. Economies are still ailing, and the cost of raw materials is climbing. But there is something else happening. Basic consumer goods were long assumed to be more or less recession-proof. Shoppers may not be able to afford Dior dresses or Cartier watches, went the argument, but they still need loo paper and detergent. Yet people are finding ways to save money even on daily necessities. They are shopping less and with more purpose. Some people deliberately pick up a basket rather than collect a trolley in supermarkets, to prevent themselves from buying too much. Some buy smaller packets, which are cheaper, or huge ones, which are better value. Many make do without air fresheners, hair conditioner and other fripperies once deemed essential. Many scour the internet for special deals. According to a report by PwC, a consultancy, 93% of shoppers say they have changed their behaviour as a result of the economic downturn. Many have traded down from name-brand to store-brand products. Alarmingly for, say, Kellogg’s or Heinz, many have discovered that Tesco’s cornflakes and Wal-Mart’s baked beans taste no worse. A survey of 2,500 American households by Consumer Edge Research found that supermarkets’ own labels have become increasingly popular, especially for staples such as milk, peanut butter, bottled water and cooking oil. Trading down is most common among households with an income of more than $100,000 a year. (Poorer people bought fewer posh brands in the first place.) Store-brand goods are especially popular in Spain, the Netherlands and Germany (see chart). Consumers are also trading down from one name-brand to another: for example, from Lindt chocolates to Cadbury’s. Some 18% of packaged-goods buyers switched from a premium brand to a cheaper one during the recession, according to McKinsey, another consultancy. Most said they found that the pricier brand “was not worth the money”. Ebbing tide Terrified consumer-goods firms have cut costs and slashed prices. P&G launched a less expensive “basic” version of its Tide brand of washing powder, but then withdrew it because it was too popular. Many firms are pushing “three for the price of two” deals and the like. Some see opportunities amid the gloom. As people eat out less, Kraft Foods, an American firm, sells more Macaroni & Cheese and other ready-made meals. As hedonists cut back on spas and beauty salons, P&G sells more beauty products that can be applied at home. Companies with a strong presence in emerging economies have the rosiest prospects. Shoppers in China and Brazil are trading up to foreign brands, making up for some of the new frugality in the West. Mr McDonald tries to sound cheery. In 173 years, P&G has survived many recessions. No doubt, but what if this one teaches consumers that supermarket brands are just as good and, when the economy recovers, they spend their extra cash on holidays or college fees instead? Oct 13th 2010, 20:38 by The Economist online 2010-10-18T12:42:58+00:00 http://consumeredgeresearch.com/news/colgate_sales_growth_softens_as_global_competition_builds_-_dow_jones/ http://consumeredgeresearch.com/news/colgate_sales_growth_softens_as_global_competition_builds_-_dow_jones/#When:12:38:54Z NEW YORK (Dow Jones)—Colgate-Palmolive Co. (CL), the world’s largest maker of toothpaste, is starting to see sales growth lose steam as rival Procter & Gamble Co. (PG) makes a more aggressive push into oral care globally. The maker of the Colgate toothpaste, Palmolive dishwashing soap, and Hill’s pet food in July acknowledged that competition in the household and personal-care sectors had spiked, and its second-quarter sales were weaker than expected. Those pressures are likely to linger on in the third-quarter, which Colgate reports at the end of this month. In the U.S., Procter has launched a stream of new oral-care products like the Crest 3D White line of tooth-whitening products. It boosted its presence in the oral-care market in Brazil with the 2009 introduction of the Oral-B Pro Saude toothpaste for that market, and has started launching a Pro-Expert line of toothpastes and toothbrushes in parts of Central and Eastern Europe, Middle East and Africa. Colgate is the world’s biggest maker of toothpaste by sales and market share, but it is a smaller company than rivals P&G and Unilever PLC (UL), both of which compete in a wider variety of categories and have deeper pockets. Unilever, which sells toothpaste brands like Signal in some markets outside the U.S., has also turned more aggressive in pushing for global market-share gains across its categories. There has been speculation P&G could launch a new toothpaste in India, another Colgate stronghold. A spokeswoman said P&G sees “many opportunities for growth” in oral care through innovation and expansion into new markets. In soap, another area of competition with Colgate, P&G has made a bigger push by launching a new Gain dishwashing liquid in the U.S. Colgate has long been an investor favorite, particularly in difficult economic times. Some long-term investors say they still like the stock, but acknowledge concerns about the competitive onslaught. Andrew Burns, chief investment officer of Hamilton Point Investment Advisors, which holds shares of Procter & Gamble Co. (PG) and Colgate-Palmolive Co. (CL), likes both for their growth potential in emerging markets. But Colgate is probably “not the story it was 10 years ago,” Burns acknowledges. “The old story was: P&G was domestic and Colgate was international. But P&G has woken up to the fact they have to play catch-up.” Colgate’s second-quarter growth in organic sales—a key measure that excludes acquisitions and foreign exchange—was 3.5%, slower than 6% in the first quarter. Emerging regions like Latin America have traditionally been Colgate’s stronghold. But P&G across all its businesses is now launching new products and investing more in growing its businesses in these fast growing markets, particularly where it had previously lagged. Colgate’s stock is down 8% for the year, even as P&G has gained 3% and the broad S&P 500 has risen 6%. Consumer Edge Research analyst Bill Pecoriello expects Colgate’s slower second-quarter sales growth to continue into the third quarter. For the year to date, it has lost two points of market share in the U.S. toothpaste industry, he says. Pecoriello believes Colgate will have to increase its marketing and promotional spending, and that could hurt 2011 earnings. “They will have to step up spending to defend share in toothpaste. It’s a matter of when, not if,” says Pecoriello. A Colgate spokeswoman didn’t comment. The company pointed to a slowdown in consumer categories after reporting weaker-than-expected second-quarter sales growth. It expects to keep growing volumes in the 4% to 7% range, but expects to be at the lower end of that estimate for the balance of this year. In its second-quarter report it said its global toothpaste market share strengthened amid gains in places like Brazil and India. The company said new product launches in the U.S., like Colgate Max White with Mini Bright Strips toothpastes, have done well and that it has many new product launches in the pipeline. Thursday, October 14, 2010 11:05:00 AM By Anjali Cordeiro 2010-10-18T12:38:54+00:00 http://consumeredgeresearch.com/news/cer_holiday_trends_in_bloomberg/ http://consumeredgeresearch.com/news/cer_holiday_trends_in_bloomberg/#When:13:56:47Z Wal-Mart to Benefit From Budget-Conscious Shoppers, Survey Shows By Matthew Boyle - Oct 11, 2010 Wal-Mart Stores Inc., the world’s largest retailer, will attract a bigger share of holiday shoppers this year as budget-conscious consumers seek discounts, according to a survey released today. The amount of consumers who said they plan to do more holiday shopping at Wal-Mart exceeded the share of those who expected to do less by 22 percentage points, according to the survey by Consumer Edge Research in Stamford, Connecticut. The study canvassed about 2,500 people in the U.S. Consumers are curbing spending as the unemployment rate hovers near a 26-year high, prompting stores to boost promotions to draw shoppers. Other retailers that may profit from shoppers’ caution include Amazon.com Inc., EBay Inc., and Target Corp. More shoppers plan to avoid stores owned by Costco Wholesale Corp., Toys ’R’ Us Inc., and department stores like Macy’s Inc. “While consumers are indicating they will be spending about as much on the holidays this year as they did last year, they are also indicating they will be increasing their holiday shopping at the discount retailers, likely to seek out the best deals possible,” analyst Bill Pecoriello said in the report. Wal-Mart U.S. stores chief William Simon told investors last month he expects “a very, very competitive and aggressive holiday selling season.” The executive aims to boost sales at U.S. stores open at least a year, which have declined for five consecutive quarters. The Consumer Edge survey also found that 27 percent of shoppers plan to spend less over all this year, compared with 13 percent who said they will spend more. Simon told investors last month that he expects shoppers to spend on their children and not themselves. “You should plan on socks and underwear for Christmas,” he said. The National Retail Federation is forecasting holiday sales will be the best in four years, and some retailers, such as department-store chain Kohl’s Corp., are planning on stepping up hiring as a result. Retail sales in the U.S. probably increased in September for a third month, easing concern consumer spending will weaken and endanger the recovery, economists surveyed by Bloomberg said in advance of the Commerce Department’s Oct. 15 report. To contact the reporter on this story: Matthew Boyle in New York at Mboyle20@bloomberg.net. To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net. ®2010 BLOOMBERG L.P. ALL RIGHTS RESERVED. 2010-10-15T13:56:47+00:00 http://consumeredgeresearch.com/news/coke_is_still_the_real_thing_-_wsj/ http://consumeredgeresearch.com/news/coke_is_still_the_real_thing_-_wsj/#When:13:10:01Z By John Jannarone It’s time for investors to reconsider a liquid diet. Thanks to its larger emerging-markets exposure and higher-margin products, Coca-Cola historically has enjoyed a healthy premium to stodgier packaged-food makers such as Kelloggand General Mills. A year ago, Coke traded at 14.7 times 12-month forward earnings, compared with 11.6 times for the average packaged-food company, says Bill Pecoriello of Consumer Edge Research. But Coke has been squeezed by worries over weak beverage sales and its pricey deal to buy the North American bottling business from Coca Cola Enterprises. The company now trades on a forward multiple of about 14 times, just a sliver above the average packaged-food company. The convergence has gone too far. Coke still has advantages that should help restore its premium. One is a limited threat from private-label brands. For packaged foods like cereal, private label has gained share in recent years. Even though brand-name companies have cut prices in response, increased volumes haven’t been enough to offset the lower selling prices. Coke, in contrast, has managed modest price increases in the mature North American market without sacrificing market share. The company said Wednesday that its second-quarter volumes in the region rose 2%, the first increase in many quarters. And in the longer term, food products probably will remain tough to introduce in emerging markets where consumer tastes vary considerably. Coke, on the other hand, has successfully marketed its iconic drinks in more than 200 countries. While Coke is unlikely to win back the sky-high multiple of the 1990s, its edge over food companies should give its shares some extra pop. 2010-07-22T13:10:01+00:00 http://consumeredgeresearch.com/news/private-label_consumer_goods_making_mark_on_public/ http://consumeredgeresearch.com/news/private-label_consumer_goods_making_mark_on_public/#When:16:52:31Z CNBC.com 18 May 2010 By: David Lariviere For many generations, the average consumer woke up every morning and reached for their favorite cereal, let’s say, Kellogg’s Frosted Flakes. Later, they lunched on a sandwich of Skippy peanut butter and Smuckers jam on Wonder Bread. Then they washed their hands with Dial and rinsed their mouths with Listerine. No more. Photo By: Liz West Today, consumers don’t always reach for a brand-name. Private-label, or store-brand, grocery items have become increasingly popular across many product categories, and the trend is not likely to diminish in the future, according to Bill Pecoriello, president of Consumer Edge Research. But that doesn’t mean all categories of consumer products will be affected in the same way. After surveying more than 2,500 households, Pecoriello rated 90 categories of grocery products based on the likelihood of consumers to continue to prefer the private-label versions as the economy improves. Milk, cooking oil, bleach, paper napkins and spices were the most popular private-label items. Peanut butter, cereal and bottled water were also at the top of the “high risk” category for private-label penetration, based on Pecoriello’s research. This study reinforced Pecoriello’s expectation that sales of store brands will continue to rise over time, he said. What’s more, economic downturns, like the latest recession, are not the primary factor driving the trend, he said. Instead, it is that increasingly value-conscious consumers are recognizing a good deal when they see one, and they are happy with the quality of today’s store-branded products. “There are high levels of satisfaction when trading down to private labels from brand names. The performance is pretty good here,” he said. In addition, private-label growth isn’t being driven by consumers who are struggling. According to a Nielsen study, it’s households making more than $100,000 a year that are the fastest-growing segment of the trend. While that bodes well for the future of private labels, it’s important to recognize which consumer packaged good companies will be most pressured by the increased competition. According to Pecoriello, Dean Foods , the nation’s largest dairy company by revenue, ranked at the top. The impact of private-label’s encroachment has already left its mark on Dean. The company’s shares have fallen sharply since the company reported a 43 percent decline in first-quarter profit earlier this month, citing market share gains of store-branded milk for its disappointing results. According to Dean’s CEO, private-label competition is making it difficult for the company to raise prices and improve its profitability. Other companies are also at risk, according to Pecoriello. He cited spice company McCormick , and food giants like Kraft , Kellogg’s and Campbell Soup as examples. Pecoriello isn’t alone in his assumption that private-label brands will hold onto their gains as the economy improves. Major retailers such as Wal-Mart and Target have made big investments to revamp the packaging and presentation of their store brands. This has helped drive more consumers to private-label products inside their stores. In most categories, consumers have been “pleasantly surprised” with the quality of the products, said David Browne, a senior analyst at Mintel International Group. “They have something for everybody at different price points and they also offer natural and organic products,” Browne added. Browne said there are still “huge opportunities” for growth in private label. “We saw a huge growth in the canned soup market in the private-label brand in the last year,” he said. “People looked at brand names like Campbell’s and Progresso and said, ‘Where can I cut costs?’” Since 2007, the private-label market share has risen 2.1 percent to capture 17.3 percent of the total market, measured in dollars, and by 1.9 percent to a 21.9 percent share of the market, in units, according to market researcher Nielsen.  Despite the surge in private label, don’t write off the brand-name companies yet. Brand names still controlled 82.7 percent of the dollar market share in March, according to the Nielsen research, while holding 78.1 percent of the unit share. “There’s some information that there’s a gradual move back to name brands and that the private-label growth is slightly diminishing,” Browne said. “Name brands are becoming much more aggressive and spending more on promotions and discounts.” The key factor may be performance. Pecoriello’s survey showed that consumers are not satisfied with store-brand trash bags, liquid cleaners, disposable razors and batteries. “When push comes to shove, they are going to move to the (name) brand,” Pecoriello said. Other categories that have a low risk are energy drinks, tobacco, candy, and wine and spirits. That trend favors companies like Hansen’s , the maker of Monster Energy drink, and Hershey’s, which owns Hershey’s chocolate and Reese’s Peanut Butter Cups, among others. Baby food also is an “underdeveloped” area for private label, Browne said. Private-label brands have only about 3 percent of the market. Another factor is product innovation, which can capture consumer dollars with new products. Pecoriello said, “The leading brands will still be there with lots of innovations.” © 2010 CNBC.com 2010-05-18T16:52:31+00:00 http://consumeredgeresearch.com/news/7-elevens_impulse_shoppers_fuel_recovery_for_hershey_pepsico/ http://consumeredgeresearch.com/news/7-elevens_impulse_shoppers_fuel_recovery_for_hershey_pepsico/#When:10:55:26Z April 30, 2010, 12:16 AM EDT By Duane D. Stanford April 30 (Bloomberg)—Impulse buyers are heading back to convenience stores for sodas and Hershey bars. PepsiCo Inc. and Coca-Cola Co. say the volume declines at convenience stores slowed last quarter for the first time in at least a year. Hershey Co.’s first-quarter chocolate, mint and gum sales in those stores grew about 6 percent. “We’re definitely seeing improving trends,” said Dennis Phelps, senior director of beverages for 7-Eleven Inc., the world’s largest convenience retailer. “Maybe customers feel a little better about letting go of some money.” Consumers bought less candy and soda last year at 7-Eleven and other on-the-go stores that typically generate higher profit margins for manufacturers. Dollar sales excluding cigarettes at U.S. convenience stores rose 0.5 percent in March after a 1.3 percent decline during the previous 52 weeks, according to Consumer Edge Research LLC. “We saw a pick-up in consumer discretionary spending, which resulted in improved sales for impulse purchases in convenience stores,” said Bill Pecoriello, chief executive officer of Stamford, Connecticut-based Consumer Edge. The research firm analyzes store scanner data from Information Resources Inc. to determine sales. ‘Encouraging’ Trends “Encouraging” volume trends for beverages at U.S. convenience stores continued into the second quarter, Eric Foss, head of PepsiCo’s bottling unit, said on an April 22 conference call. Coca-Cola also saw slight improvement at convenience stores, said Dana Bolden, a spokesman for the Atlanta-based company. Snacks, too, showed signs of recovery in the first quarter, said John Compton, CEO of Americas Foods for Purchase, New York- based PepsiCo, the world’s biggest snack maker. “I would characterize it as improving,” he said during the call. “It has a ways to go as the unemployment numbers need to improve and the overall economy needs to improve.” The recession, record high gas prices and increased federal cigarette taxes imposed in March 2009 reduced convenience-store visits in the U.S., 7-Eleven’s Phelps said. In 2009, soft-drink volume industrywide at U.S. convenience stores fell 0.6 percent to 1.74 billion liters, according to Chicago-based researcher Euromonitor International. Customer Counts That trend may be reversing. U.S. customer counts at 7- Eleven fell less in the first quarter and may grow in the current quarter, now that the tobacco-tax increase is a year old and gas prices are stable, Phelps said. There are 38,000 7- Eleven stores worldwide. Dallas-based 7-Eleven, a unit of Seven & i Holdings Co., operates or franchises 6,000 in the U.S. Non-alcoholic beverage sales at 7-Eleven stemmed declines in the first quarter, compared with the fourth quarter of last year, Phelps said. He declined to provide dollar sales figures. In April, packaged beverages “will probably have one of the best months we’ve had in over a year,” Phelps said. U.S. retail sales increased 1.6 percent in March, more than anticipated and the biggest gain in four months, according to Commerce Department figures. The Conference Board’s consumer confidence index jumped to 57.9 in April, the highest level since September 2008. “We really saw volume in convenience return in a big way,” Hershey CEO David West said on an April 22 conference call. Half of convenience store purchases are on impulse, he said. Convenience stores accounted for 13 percent, or about $590 million, of the company’s $4.5 billion in U.S. sales last year, according to Hershey, based in the Pennsylvania town of the same name. “There’s no question about it, we’re seeing better sales,” said Mike Thornbrugh, a spokesman for closely held Quiktrip Corp., the Tulsa, Oklahoma-based operator of 548 convenience stores. “It’s not as much as we’d like but they’re still spending.” —With assistance from Lynn Thomasson in New York. Editors: Andrew Dunn, Jennifer Sondag.   2010-05-03T10:55:26+00:00