Several items of interest in the news this week:
Drinking Habits of Millennials – Even though the decline in alcohol consumption is frequently said to be caused by millennials’ lack of interest,
it turns out that the fastest growing alcoholic drinks in the U.S. are “alcopops” – strong, sugary alcohol sodas that are produced specifically to attract younger drinkers and sold through convenience stores. Last year, Diageo/Guinness released Smirnoff Ice Smash, a fruit-flavored drink that contains 8% alcohol by volume, as a follow-up to its lower-alcohol Smirnoff Ice alcopop. After just six months, sales of Smash have grown by 400%. It’s a puzzling dichotomy – at a time when most Americans are reaching for healthy options for their drinks, there’s clearly a distinct sector that is interested in both sugar and alcohol.
Luxury Spending – China accounts for about one-third of all luxury spending. Tiffany & Company has gone all-out in recent months to transform itself into a brand that is appealing to U.S. millennials. There’s a new “edgy” marketing campaign with the likes of Lady Gaga wearing Audrey Hepburn’s Tiffany diamond, among other things. However successful those efforts have been, they have failed to offset the reduced spending by Chinese tourists. In North America, same-store sales were flat for the quarter, and in Asia they declined 1%; in Europe, 3%. The result has necessitated that Tiffany executives assume that the trend will continue through the year by adjusting their forecast to the low single-digit increase, contrary to the 6.9% that analysts had predicted as a result of the new marketing efforts.
Growing Suite of Services – WeWork has added an additional company in support of its office services. Managed by Q runs a platform that office tenants can use to hire service providers like clerical staff, cleaning crews, IT support. The company was recently purchased by WeWork, using cash and stock in the purchase arrangement. Currently Managed by Q works primarily with medium-sized companies – an area where WeWork hopes to expand after building its customer base focused presently on smaller companies and large corporations.
Growing the Freezer Section – Conagra was met with analysts’ disdain a few months ago when they reported that sales had plunged at their newly-acquired Pinnacle Foods, owner of Birds Eye frozen foods. Recent quarterly earnings, however, have shown that situation to have been largely reversed, with strong sales in the company’s premerger lines. Conagra has shown consistent success with its packaged frozen foods, by rejuvenating old brands like Healthy Choice and Marie Callender’s. And, it’s moving quickly to apply the same precepts to Pinnacle brands, planning product improvements and revamped packaging for its Wishbone dressing and Duncan Hines among the Pinnacle line, and a “deluge” of innovation for its Birds Eye frozen vegetables. Conagra has certainly shown in the past that it knows how to make this marketing magic work.