Fresh & Easy to carry Reed’s beverages
LOS ANGELES Fresh & Easy stores throughout California, Arizona and Nevada will begin carrying selected Reed’s and Virgil’s products in all of the chain’s 159 locations.
“Fresh & Easy is a true innovator, providing the highest quality, freshest food to neighborhoods in the Western United States with stores that are about a third of the size of the average U.S. supermarket,” stated Chris Reed, founder and CEO of Reed’s. “[Fresh & Easy’s] smaller size format and focus on quality and freshness makes this a perfect fit for Reed’s all-natural products. We are very excited to be working with them as they increase their footprint in the United States and position themselves to become one of the top supermarket retailers in the country.”
Dr Pepper Snapple Group signs agreements with Coca-Cola
PLANO, Texas Dr Pepper Snapple Group has entered licensing agreements with Coca-Cola, which are subject to Coca-Cola’s completed acquisition of Coca-Cola Enterprises’ North American bottling business.
Under new licensing agreements, Coca-Cola will distribute Dr Pepper in the United States and Canada Dry in the northeasten United States. where they currently are distributed by CCE. Coca-Cola also will continue to distribute Canada Dry, C’Plus and Schweppes in Canada. Additionally, in certain U.S. territories where it has a manufacturing and distribution footprint, DPSG will begin selling Squirt, Canada Dry, Schweppes and Cactus Cooler, which currently are sold by CCE.
The new agreements will have an initial term of 20 years, with 20-year renewal periods, and will require Coca-Cola to meet certain performance conditions. As part of these transactions, DPSG will receive a one-time cash payment of $715 million before taxes, fees and other related expenses.
“These agreements build a strong foundation for the continued growth of Dr Pepper and our leading flavor brands,” said Larry Young, president and CEO of DPS. “It solidifies Coke’s support of the Dr Pepper trademark, while enabling us to optimize our route-to-market by assuming distribution of several key brands. Additionally, we’re increasing our fountain presence, enabling millions of consumers to sample our brands each day — a great win for Dr Pepper.”
Restaurants serve up home cooking for consumers
Restaurant-branded products are popular with consumers as people opt to prepare more meals at home. Consumer spending in restaurants in 2009 was down 3%, according to the NPD Group. All segments of the industry, from quick-service restaurants to fine dining, took a hit as consumers ate more meals at home in an effort to save money. The downturn began in summer 2008 and accelerated in mid-2009, according to NPD’s report.
At the same time, the popularity of celebrity chefs and restaurant culture among consumers continues to grow, driven in large part by the dominance of food-related media. There’s been a steady stream of restaurant-branded food products flowing into the market. “We’ve noticed more restaurant brands on the shelves of grocery and other retailers selling food, and the sales levels and trends for these products are significant and growing,” said Todd Hale, SVP consumer shopping insights at Nielsen.
Hale said for the 52-week period ended March 20, sales of a large sample of these brands across food, drug and mass merchandisers (including Walmart) reached $4.6 billion and were up 7.2% versus the prior year.
Dan Simons, principal of VSAG, a restaurant consulting and development firm based in Kensington, Md., believed more restaurant-branded products are on the horizon. “Anywhere a restaurant feels products won’t hurt the brand will offer potential,” he said.
“With fewer people going out to restaurants, chains are looking for new revenue streams, and bringing products to retail channels is a big opportunity,” said Eric Giandalone, director of research for Mintel Foodservice. “It’s also a way for a regional restaurant brand to expand its reach nationally.”
Giandalone said Hooter’s chicken wings and T.G.I. Friday’s mozzarella sticks have performed well across all three channels, since they are strong products that reinforce what those restaurants are known for. Packaged Facts data indicated that the Boston Market and California Pizza Kitchen brands have seen double-digit increases in sales.
One recent entry to the frozen entree category is Unilever’s P.F. Chang’s Home Menu line of eight frozen entrees. Inspired by the chain’s best-selling recipes, the line includes orange chicken, Shanghai-style beef, sweet and sour chicken, General Chang’s chicken, ginger chicken and broccoli, shrimp in garlic sauce and shrimp lo mein. All dishes can be prepared in 13 minutes or less and will retail for between $7.49 and $9.99. The product already is on shelves at Walmart and will be sold at Walgreens.
Rachel Porges, Unilever’s brand manager for the new line, said the company approached the new product line from an ethnic cuisine standpoint, and set out to find the partner for the brand. “P.F. Chang’s, with [its] great reputation for freshness and 200 bistros globally rose to the top of the list. It’s attractive to start a product line from a great brand.”
Giandalone called the product launch “the biggest surprise” in the category due to the restaurant chain’s upscale positioning. “Having the name positions it as a ‘better product,’ and if the line is treated right, it could be a big one. It will have to deliver on the promise,” he said.
Upscale branding and higher pricing has worked for Rao’s line of pastas and sauces, named for the tiny, 10-table, family-owned Northern Italian gem in upper Manhattan in New York City. The restaurant is notorious for an unyielding reservation-only policy and a several years-long waiting list—there is a standing reservation every night for all 10 tables, each “owned” like a condominium by Rao’s exclusive clientele. The brand has had double-digit increases despite top-of-category pricing on its jarred sauces, and has significantly expanded its distribution.
Frozen entrees isn’t the only food category seeing restaurant-branded introductions. Early this year, smoothie chain Jamba Juice launched a line of all-natural smoothie mixes. Available in Razzmatazz, Mango-a-Go-Go and Strawberries Wild—three of the most popular flavors at the chain’s nearly 750 locations—the 8-oz. smoothie package mix contains frozen fruit, nonfat yogurt and an antioxidant boost, and retails for between $2.99 and $3.29. Consumers only need to add fruit juice and blend to create their Jamba smoothie at home.
Starbucks is rolling out its Via instant coffee to food, drug and mass outlets. The company plans to roll out a stream of new products in the next year that debut in Starbucks retail locations and then make the crossover to mass retail outlets. Starbucks CEO Howard Schultz called consumer-packaged goods a “centerpiece” of the company’s growth strategy.