Will new nutrition labels lead to healthier consumers?

The FDA is set to impose major changes to nutrition labels on food packages for the first time in over 20 years. The organization sites the need to bring labels up to speed with the contemporary American diet as a catalyst for the change. New labels are meant to be easier to understand and will be based on expanded portion sizes. Added sugars are in the center of the change with new labels making the distinction between natural and manufactured sugar additives. Many in the FDA and other nutritionists explain that the expensive change is necessary in the fight against obesity in the US. Even First Lady Michelle Obama praised the initiative and promoted the changes at the anniversary celebration for her “Let’s Move” campaign aimed at reducing obesity.

Consumers have a right to know what they are putting into their body. However, some new label requirements could force food and beverage companies to put nutritional information both good and bad on the front of their packaging. Could this potentially impact the branding and packaging of these products? What about products high in added sugar? Does this change damage their brand? What impact will these changes have on the way consumers view food and beverage products? 

CVS snuffs tobacco companies

Earlier this month, CVS announced they will no longer carry tobacco products in their stores. This decision comes at a great cost for the company. Accounting for 3% of the company’s total profit, CVS brings in $2 billion annually from the sale of tobacco products. According to CVS CEO Larry J. Merlo, eliminating tobacco from their stores is in line with the company’s purpose of helping customers on their path to better health. But is this move to better brand image worth the cost? Sure CVS is a pioneer and is demonstrating that the company is on a righteous mission to promote the fact that they care about their customers’ health but they are doing this at the expense of 3% of their annual revenue. Do you think this move will help to strengthen the brand and ultimately increase sales enough to cover the lost revenue?  Do you think this strategy is sustainable? What other benefits or costs do you see could come out of this move? Do you think other companies will follow suit? What does this mean for tobacco sales? Is it ethical to cut out a certain product completely or could this be seen as discrimination?

Part of a nutritious breakfast?

A few years ago I posted about Nutella’s deceptive ads claiming the spread was a healthy addition to a nutritious breakfast. After a class action settlement, Ferrero, the makers of Nutella, agreed to change their messaging in advertisements, on the label and on their website. However, it seems that Nutella is still trying to promote a healthy image for the brand. A food blogger has examined what is in Nutella and has discovered that the spread is far from healthy....but Nutella's website and other brand messaging still implies that it is healthy. Did Nutella change their advertising message enough? Should there be a warning on the label saying that it contains a high amount of sugar? How do you feel about marketing foods that are known to be unhealthy? Do you think there should be more or less regulation?

Are retailers the new Big Brother?

These days we rely heavily on our smartphone to get around. It is so easy to ask Siri where the nearest In-N-Out is and how to get there….but is this convenience at the cost of our privacy?

Google has started to expand its maps to include the inside of museums, airports and large stores in a number of countries. According to a recent article, stores have started to experiment with harnessing indoor positioning technology in order to track a customer’s movements within the store. The article says that some systems use video cameras, sound waves and magnetic fields. However, the most widely used technique is to intercept Wi-Fi signals emitted by shoppers’ smartphones, allowing their position within the store to be calculated. Stores also collect a unique identifier that allows them to build up behavioral information on return visitors. Ultimately, this technology will enable stores to push behavioral ads to shoppers’ smartphones.

Of course our movements as consumers are tracked online but indoor positioning is a new frontier of targeted advertising.  Is this an invasion of consumer privacy? Should stores be allowed to track and record movements of customers? How about using this data to push targeted ads? Could this new technology have an effect on the sales and marketing of brick and mortar stores? Comment with your opinion.

Online Reviews - True or False?

In today’s digital world, it is common for companies to be represented online. Social media and the like open the forum to consumers to start a conversation about businesses and products. Most of the time these discussion forums act as a consumer’s first impression on a company they may not be familiar with….but how much of this information is true?

A recent article discusses the increasing trend of companies writing or buying fake reviews to improve their online presence. Many popular sites such as Yelp have started policing such activities with algorithms aimed at targeting and removing fake reviews. As marketers we know how much misrepresentation can damage a product’s reputation…so why do it? Why is it attractive to companies to publish fake reviews? What are the risks companies take when publishing fake reviews? What are the potential impacts on the customer? Should the FTC ramp up regulation on online forums? Comment with your opinion.

Up in Smoke

New York’s city council voted this week to raise the legal age to buy tobacco products to 21. The reason for the change - NY Health Commissioner Thomas Farley says 80 percent of the city’s adult smokers start before age 21. Additionally, New York has set the minimum price of a pack of cigarettes at $10.50 and upped the fines for illegal and untaxed sales.  Mayor Michael Bloomberg argues that these measures will effectively decrease the use of cigarettes among 18-20 year olds.

We all know smoking causes cancer yet cigarettes are still a part of pop culture and are marketed to young people. Tobacco companies, although heavily regulated, look to appeal to a young, hip generation. Will these changes help to deter young people from smoking? What implications could this potentially cause for tobacco business? Do you think these new restrictions are fair for tobacco businesses? Will this new policy have an effect on tobacco advertising’s target market? Comment with your view on this ethical issue.

Will eating McDonald's make me able to dunk like LeBron James?

Athletes, being the epitome of health and fitness, create mixed messages when it comes to endorsing junk food. An article about athlete endorsements asks if athletes really eat the junk food they endorse. LeBron James and Serena Williams testify that they stick to a strict diet of healthy foods. They make no mention of eating the junk food they endorse. If they don’t eat it, why do they endorse it?

(http://www.entmoney.com/wp-content/uploads/2010/02/Lebron_James_McDonalds_All_American.gif) 

And this is not a new phenomenon. Athletes like Babe Ruth endorsed tobacco products back in the day….except at that time they probably used the products too....but does that make it right? Do you think there is a difference between athletes and other celebrities endorsing junk food? Should athletes endorse foods known to be bad for you especially when they don’t use the product themselves? What impact does this have on consumers? Are consumers being tricked? Weigh in on this issue in the comments.

Return Whatever, Whenever?

Should a customer be able to return any item that he or she has purchased? And should this "right" be a "forever" right?  This is a question posed in an article about LL Bean. The store famously allows returns from customers at any point....for any reason. In their words, they have " an astonishingly lenient return policy."

Take a moment and read the linked article and then give your input as to the impact (on the business) of this type of policy. Does it benefit the company more than it harms the company? Is it only appropriate for certain types of companies (consumer packaged goods? automobile companies? clothing companies? grocery stores?)? What do you see as the upside for the company that extends this benefit to customers? What are potential downsides? How do you weigh them against each other?

If 300 is Good, 1000 Must be Better. Right?

We discussed this in the first week of class....thread count on sheets. If you have bought sheets lately (or, honestly, at any point in your life) you probably have come across a characteristic of sheets that is known as "thread count." It refers to the number of threads per square inch of fabric. And higher is better....supposedly. Traditionally speaking, higher thread counts meant a more luxurious feel to the sheets.

According to a new study by Consumer Reports, there is not necessarily a link between high thread counts and more luxurious feel.

"Thread count is the number of vertical and horizontal threads per square inch. Not long ago, sheets typically had thread counts of 120 with 60 horizontal and 60 vertical threads. In the 1960’s, a sheet with a 180 thread count was considered a luxury.  “Now you see 1,000 thread count sheets but you just can’t get that many threads on a loom,” says Pat Slaven, a textile expert at Consumer Reports.

To get that higher number, manufacturers use thinner strands of fabric twisted together as if they were one. Then they double, triple or even quadruple the thread count to make the number more attractive to the consumer. “It ups the count but doesn’t give you a better sheet,” says Slaven. “The sweet spot is 400.”"

The problem is that consumers are generally willing to pay more for higher thread counts...believing that these will be softer, more luxurious and more durable. And, if they were all of those things...perhaps they would be worth more money. But they aren't.

Also at issue is going by how sheets "feel" in the store. If you zip open the package of sheets and feel the sheets and they are soft, almost slippery to the touch....don't be fooled. Manufacturers apply "hand enhancers, silicone softeners" that wash out the first time that you do laundry.

Thoughts?

Wear and Return? Not so fast....

Have  you ever bought a piece of clothing only to get it home and find out that it *appears* to have been worn by someone already? You swear that you just paid retail price for it...in a retail store...thinking that you were walking home with a brand new item. And yet.....ick. It HAS been worn already.

It is a crime called "wardrobing" and Bloomingdale's is making an attempt to stop it from happening to you in the future.

It is more likely to happen with high price items like prom dresses and formal wear, but it also happens with lower priced clothing. People "buy" the clothing, wear it for whatever function they have coming up and then, once the "dinner with the new parents-in-law" is over....they return the item to the store and get their money back. ....And then you or I buy it, not knowing that it has already been worn (beyond the dressing room).

It is illegal. It is return fraud and it costs the industry an enormous amount of money each year ($8.8 billion. That is billion with a B in 2012).

Bloomingdale's new way to combat this retail crime is to attach a big black tag in a very obvious place on the clothing (in the front, near the hem, for example) which, once removed, makes the clothing ineligible to be returned.

Brilliant? Or not?  What are your thoughts on this new practice of reinforcing the return policy?

Beautiful, Haunting Infomercial...True?

Recently Chipotle released an infomercial  (Scarecrow) that has gained a lot of attention. It is said to be more beautiful than many Hollywood films. The message is (mainly) that the factory farms of America are destroying our society (overstatement? What do you think the message is?). There is very little branding in this message - just a brief shot at the very end of the video.

You can find copies of this in many places around the internet. On the page that I linked, there is a large section of comments at the bottom of the page. One of the comments reads as such, "This is great, but they're conveniently leaving out the part where they still slaughter a bunch of (happier?) cows, chicken and pigs for their burritos. It's not like Chipotle is vegetarian, which is what you'd think from this ad? The scarecrow is just chopping up veggies at the end."

Chipotle is hopeful that consumers will see their company as a fast food restaurant with a brain. What are your thoughts on the film?

Banning of E-Cigarette Advertising?

Within the US, the advertising of tobacco products (cigarettes, cigarette tobacco, roll-your-own-tobacco and smokeless tobacco) on television was banned in 1971 (in the UK, the ban has been in effect for over 20 years).

Within the past couple of years, however, advertising of electronic cigarettes has boomed. The advertising of so-called e-cigarettes is currently unregulated. Print ad spending on e-cigarettes has increased approximately 72% from 2011 to 2012, while TV ad spending on the same has increased approximately 18%.

The Food and Drug Administration is expected to give opinions regarding the safety of e-cigarettes in October, 2013 and to suggest a ban on TV advertising as well as a ban of online sales of these devices. Online sales are expected to reach between $500 to $625 million this year (2013) with overall sales of e-cigarette reaching $1.7 billion by the end of 2013.

What are your thoughts on the potential banning of TV advertising of these products? Should there be an outright ban (similar to other tobacco products)? Should it remain unregulated? Should there be some rules regarding where and when on TV these e-cigarettes can be advertised? Please weigh in with your opinions and give your reasoning.

Overly Caffeinated?

Caffeine is a drug that many of us consume on a daily basis....in our morning cups of coffee, in our afternoon sodas and perhaps in our late night study-help energy drinks. Most of us are aware of the amount of caffeine we're taking in and have made a conscious decision to consume it. The FDA considers less than 400mg/day of caffeine to be "safe" for adults. There is no established amount of caffeine that is safe for children, according to the FDA.

There is new concern over some recently released products that contain caffeine. The reason? Because these are products that wouldn't "normally" be associated with caffeine. Waffles, syrup, sunflower seeds....sound strange? Caffeinated jelly beans?  Hmmm....

What are your thoughts on these new products? Do you think that there is anything wrong with adding caffeine to "non-traditionally caffeinated" products? If not, should there be any regulations?  What should the FDA's role be?

Social Seating?

Do you want to know who you're about to sit next to on the airplane?  Would you go so far as to sign up for a "Seat and Meet" social networking site in order to pick who you'll be sitting next to?  Business contacts?  Potential dates?

That is what two airlines are proposing.  KLM Royal Dutch Airlines and Malaysia Airlines are allowing passengers to share their social profiles and photos prior to boarding, in order to have a greater probability of sitting next to someone that they share interests with/are attracted to.  At this point it is definitely an opt-in program and your profile gets deleted at the end of the flight.  Still....



What are your thoughts on this?

Digitally Amputating Limbs?

What are your thoughts on the ad from New York's health department's attempt to get people to eat less?  In an effort to get people to choose smaller portions, this ad was created. The man's leg was digitally amputated. 

Do you think the ad is impactful?  Will it have the intended effect?  Should the ad agency have found someone who actually suffered from diabetes and who actually had their leg amputated or does it not make a difference?

Message from Patagonia: Buy Less

Can a consumer goods company make a profit while making a difference?  We've been looking at that question all semester.  We have looked at many corporations that have an interest in social responsibility and "do good" for the community around them.  What we haven't seen yet (until now) is a company that actually tells you to buy less of their product.  Enter Patagonia. 

Patagonia is asking their customers to "Reduce What you Buy" and are "encouraging their customers to reduce, repair, reuse, and recycle their clothing and equipment." At first glance this might seem as though it would hurt their bottom line, but Patagonia is banking on it doing just the opposite.

They are partnering with eBay in this endeavor.  Yes, you need to read the linked articles to understand the business plan, but once you read it I have a couple questions for you:

What are your thoughts on this?  Can Patagonia make a go of this?  Could other companies do the same?   Does the company that tries this need to have a certain "mindset" before they could be successful at it?

Adieu Foie Gras

Foie gras will become illegal in California in July 2012, so eat up now....if you so choose.  Foie gras, a delicacy popularized in France but eaten by many who desire luxury in fine dining, is a dish made from the liver of ducks and geese that has been specially fattened.

The liver is made fatty by a forced feeding (gavage) of the ducks and geese in the last 12-15 days of their lives, by inserting a tube down their throat which forces the food (corn mash) directly into their stomach, thereby fattening up the liver. This tube is said to not hurt the animal. 

Foie gras has been banned in certain areas before, notably in 2006 in Chicago.  The ban there lasted two years before protestors had it brought back on the market.

Do you think the California ban of 2012 will stand?  Would you support the ban or are you against banning foie gras?  

Fat tax

"On Saturday, Denmark became the first country in the world to introduce a "fat tax," surcharge on unhealthy foods that are high in saturated fat in hopes of curbing bad eating habits."

Everything that contains more than 2.3% saturated fat (bacon, butter, pizza, oil, red meat, cheese, milk etc.) will have an extra $1.28 per pound ($2.87 per kilogram) of saturated fat added to the price.  They are doing this in order to fight the rate of obesity in their country and to encourage healthier eating.  The money that is raised by this additional tax will be used to educate consumers and other obesity-fighting measures.

What are your thoughts on this?  Is it right for the government to try to mandate healthier eating?  Is it fat that is the culprit?  What about taxing sugars and refined carbohydrates as well (or instead)?   Do you think that other countries will follow?

Economist Steve Sexton says that instead of taxing food that is fat, we should tax people who are fat.  He lays out a way for doctors to report to the government who is fat and who is not (allowing for genetic per-disposition) and then levying a tax on those individuals.  Thoughts on this?

Making Tobacco Less Attractive. Literally.

We talked about how, in the U.S., labeling of cigarettes will change in September 2012.  The new labels will require one of the vivid health warnings to cover 50% of the front and 50% of the back of the cigarette package and to be in the upper 20% of each cigarette advertisement.  
 
There are new laws being considered in the UK that would prevent cigarette packages from being colorful and "glitzy."

This is one company's idea of what the packages could look like.  

Australia has already enacted a similar law that will take place in 2012.  "From July 2012, manufacturers would be required to drop all colour and branding logos from cigarette packets."

What are some of the positive points of these laws in the UK and Australia?  Negative points?

Is that meal "all natural?"

Marketers put many words on labels that form an instant connection with the consumer.  "Wholesome," "Healthy," and "Natural" are some of them. There is much controversy (read that as "lawsuits") in the food labeling world regarding the use of the term "natural."  What does it mean to you?   All of these bottles of Wesson Oil are labeled "All Natural" (it is in the banner, above the type of oil). 

The truth though, is that approximately 75% of corn and 95% of soybeans in the United States are genetically modified (GMOs).  This then leads to the oil that results from that corn or soybeans to be GMO as well.  Is this natural?  Maybe so.

Some of you are familiar with the bottled drink known as "Skinnygirl Margarita."  Until recently it was sold in Whole Foods, but in September was pulled off the shelves due to a claim that is contained an ingredient that is "unnatural," sodium benzoate, which is a common (although synthesized in a lab) food preservative. Sodium benzoate is in a large majority of preserved foods and drinks.

What in the heck is natural??  Does anyone know?  Does the FDA have a definition for it and do they regulate the use of that word?  Um, no.  They have largely declined to define the term.  "With the few precious dollars the FDA has, we largely choose to focus on topics that affect public safety.  The 'natural' issue doesn't. That's not to say it's not important, but we frankly have more pressing issues to deal with."

When I type "natural food" into google images, I get the following images:

To me, this means that most people think of fresh fruits and vegetables as natural. But does that preclude other foods or drinks from being in that category as well?  Are we misinforming our consumers if we label something as "natural," since we don't have a hard and fast rule on just what that means?