A Twitter conversation last night instigated by Olivier Blanchard and carried on ad nauseum elsewhere, sales reminded me of a long-time guilty pleasure: Nutella. Just typing the word makes me salivate – and I have to restrain myself from running upstairs to slather some of that rich hazelnutty goodness on melba toast. And apparently I’m not alone: in additon to Twitter fetishists, Nutella has 3.5 million fans on Facebook.
So why all the nuts?
Dutch Hagelslag: The chocolate-on-bread option I grew up with.
I didn’t grow up with Nutella. As a Dutch-Canadian kid, if we wanted chocolate on bread, by golly, we just put chocolate on bread. “Hagelslag” (pronounce the g as if you are lightly hacking up a small furball) or “chocolate hail” or just “sprinkles” were always available at my Oma’s house. My first Nutella purchase came as a student, when my room-mate had to have it in the house, and I in turn have had my own jar on the shelf ever since. And now, although we don’t let the kids have it (far too precious), my pregnant wife is currently making sure we stay stocked up.
But I wasn’t conscious of where it comes from (Italy), or its fascinating history, which Wikipedia has done a much better job of than I could manage in a blog post. Basically, it comes from a war-time innovation by Pietro Ferrero to produce a cheaper alternative to chocolate using cocoa and the hazelnuts that were plentiful in that region. Nutella in its present form emerged in 1964, with 179,000 tons produced in Italy every year.
Building a fan base
But I can’t remember seing an ad for Nutella, and can’t recall a single in-store promotion or Point-of Purchase display. It was always just there on the shelf alongside the Peanut Butter, calling “Dennis! DEEEENNNNISS!”. <more saliva> But I digress.
Apparently Ferrero does do some advertising – particularly in Europe, as in this nicely toned French ad that promises that Nutella will give you the energy of a child. But according to this site, Ferrerro USA only spent $300,000 on advertising in 2008.
It’s interesting that the positioning is built around “energy” and “youthfulness” rather than being explicitly “healthy”. In Canada, Nutella labels feature a boy kicking a soccer ball to highlight their support for amateur soccer, while in Italy, the connection with futbol was made even clearer in one commemorative package (right).
But in the UK, the “energy” positioning has gotten Nutella into hot water as misleading for a product that contains so much sugar and fat (thanks to @kaitli for the tip!).
The secret to Nutella’s long term success seems to be consistency, living up to the promise by just being there, and by the affectionate devotion of its fans who carry a craving for that taste well into their adult lives. And not just consumption, but even geeky fixation.
Just do a quick YouTube search on Nutella, and you’ll find hundreds of fans geeking out on all aspects of the product. Check out this clip from a German television show that compares the consistency of French Nutella with German Nutella in agonizing (and entertaining) detail. But note that when they actually call Ferrero in this clip, the brand-er doesn’t do much to help the geeks in question with their free advertising.
So the question for you DIFFER brand geeks: what should Ferrero be doing to capitalize on all these nuts who obviously want to help them spread the love? Social Media campaigns? More traditional media advertising? Just staying out of the way? Looking for your comments as always.
Coffee giant tries to get their mojo vibrating again
Once, Starbucks was just a local coffeeshop in Seattle. Then it became a mega-brand, standard-bearer for the premium coffee category worldwide. But lately, the “star” has been fading, and even the “bucks” are drying up. So now the chain will be re-launching a few of its many under-performing stores under a new name – and it ain’t “Starbucks”. Brand seppuku, brilliant extension strategy, or just a curious experiment?
Photo from Seattle Times article – 15th Avenue Coffee & Teas (nee Starbucks)
Many little rocks; one Goliath target
I won’t spend a lot of time documenting all the many woes of Starbucks – from closing 1000 stores worldwide over the last few years, to endless streams of controversy , to an actual bombing this year at a Manhattan Store. The bigger story is actually thousands of small stories: how Starbucks is being beaten in the ground wars by smaller, more flexible, more community-minded local shops – like Ottawa’s fair trade coffee champs Bridgehead (of whom I’ve written at length in another post).
Starbucks’ erstwhile strength – ubiquitous presence in major markets worldwide – has almost become an Achilles Heel. Comedian Lewis Black thinks it is surely a sign of the end of the world (WARNING: contains hilarity – may not want to play this in a cubicle):
Starbucks responds
They’ve been fighting back of course, with their new “Starbucks™ Shared Planet™” brand and a pledge to apply renewed attention to three big perceived areas of weakness:
Ethical sourcing – to answer the Fair Trade movement, which, because of their size and massive bean-supply-chains, they have been slow to embrace. Notice they still don’t call it “Fair”;
Environmental Stewardship – to try to get back some of their tree-hugging mojo; and
Community Involvement – to fight the idea that they are the rapacious corporate villains strip-mining local economies and ruthlessly targeting competitors without giving much back – largely fair complaints.
In which the corporation offers to share… the planet
These three principles are embodied (and proclaimed loudly) in three new Starbuck’s branded “Green Stores” , the first of which opened July 1st at Paris Disneyland (of all places Press Release / Pictures)
At Brandvelope, of course we think all this is great. We’re sure Starbucks is sincere in their commitment to these ideals, and we applaud the incremental steps they are taking in this direction. The problem is their ability to move their Titanic-sized infrastructure to match their ocean-sized ambitions, and navigate around the great big pointy icebergs they face.
For example, Starbucks™ Shared Planet™ says “by 2015, we want to: Purchase 100% of coffee through ethical sourcing practices.” Great. But in the intervening 6 years, a goodly chunk of their coffee will come from, um, less-than-ethical sourcing practices, while local chains (like the Bridgehead where I’m sitting right now) are already at 100% and have been for years. And they’re already intensely environmental, and already deeply committed to their communities. So Starbucks: welcome to the club (let us know when you get here).
The problem with local
Which brings us to Starbucks’ latest uphill battel – its attempt to make itself more local, and more responsive to the communities in which it operates. Because, even on on its home turf in Seattle, where Starbucks still has some claim to being “local” – small coffeeshops are thriving and forcing Starbucks store closures.
So it shouldn’t be a surprise when a small army of field-tripping keeners were spotted at several Seattle area coffeeshops over the last few months, making loud observations about store design and product lines, and filing their notes in folders marked “Observations” in large letters. The results? Wait for it…
The new brand: “15th Avenue Coffee & Tea”
Branded by location: “15th Avenue”. That’s the name of the new game-changing Starbucks location on (surprise!) 15th Avenue in Seattle.
So does this mean a “15th Avenue” will be coming to a neighbourhood near you. Nope. Yours would be “Main Street Coffee & Tea” or “Broadway” or “Grosse Pointe Strip Mall” or “All-Knowing Supreme Leader Boulevard” or whatever. The idea would be to have each location branded with its location to make it seem like it grew organically in that space.
Two other stores in Starbucks’ native Seattle will follow suit, each getting its own name to make it sound more like a neighborhood hangout, less like Big Coffee, a Starbucks official told The Seattle Times on Thursday. Chicago Tribune.
Booze & guitars: The field-trippers focused on coffeeshops that serve alcohol alongside their hot drinks, as well as those that feature live events like poetry readings and guitar-jams. So nosurprise that these will be part of the cocktail mix at the new shops. The idea is 1) to prop up sales in the traditionally flat evening hours, 2) tap into lucrative alcohol profit margins, and 3) to make Perez Hilton very very happy.
No logo: all the media I’ve read are saying that no Starbucks logos will appear on the signage, the products, or anywhere else in the store. I can’t confirm this, so if any Seattle-based readers can visit and confirm, please do!).
But if this is a purely “white label” approach to branding these new locations, I’m interested to see how Starbucks is going to evolve this concept as they go forward. For now, the perceived independence of the locations is a useful way to allow the clipboard-toters at Starbucks to experiment and study the new format without dilluting the corporate brand.
Coffee industry analyst Andrew Hetzel: “It looks to me that they are testing a specialty sub-brand to see if they can capture some other segment of the market that would otherwise be disillusioned by a large corporate chain,” Hetzel said, adding that opening only one at first “gives them a live shop to test changes in menu offerings, store design and, perhaps, procedures quickly” without disrupting operating stores branded with the Starbucks name. Whole
article here.
Where to from here?
But this can’t last forever. Assuming the format works and Starbucks wants to roll it out to different markets, eventually, they’ll see the need to create visible connections (and brand equity) between locations. Because creating a series of purely local brands with no overall brand marketing synnergies across the chain would be counter-productive for a company of Starbucks size and clout. And I find it hard to believe they’d be that stupid.
AdAge article: Technomic President Ron Paul… predicts the concept will look much different if rolled out on a national stage. “I still think it’s more a of test lab than something they’re more serious about rolling out,” he said. “That’s not a national strategy.” Full article here.
So three basic brand strategy options:
1) New “family” brand:
Starbucks name would not appear in branding. Instead, the new shops would be given their own umbrella brand which would operate as a stand-alone “entity” within the broader corporate portfolio. So for example, the new branches could use a high-character name like “Mermaid Cafe” or a more neutral name like the “Your Independent Grocer” chain in Canada.
Advantage: diversifies the Starbucks portfolio without risk of brand dillution or confusion around over-extension.
Disadvantage: little transfer of brand equity – must essentially start from scratch building a new brand.
2) Premium brand extension:
This new format becomes a flavour of the existing Starbucks brand, but is given a descriptor or “soft brand” name of its own – like Starbucks Plus or Starbucks Cofeehouse.
Advantage: Leverages 30+ years of brand equity, but Disadvantage: seriously undermines the consumer’s current idea of what a Starbucks is and what they can expect when they walk through the door.
3) Endorsed brand:
The new brand has its own brand identity and branches would clearly not be “Starbucks” but everywhere the name appeared in graphics or formal text (like a Press Release), it would be “endorsed” by the Starbucks brand – as in “Courtyard by Marriot” or “Clever Cutter from K-Tel“.
Advantage: blends clear connection with separate identity. Disadvantage: requires careful management to balance the two aspects of the brand.
So which way do you think Starbucks should go? Your thoughts are welcome as always.
A recent Twitter friend of mine, ask David Olinger, who is the Manager of Marketing and Communications at the small Alberta City of Grande Prairie (population 50,000) has just announced the winning bidder for a branding project for Grande Prairie: a company from Seattle that specializes in tourism destination branding Great Destination Strategies . Was there great rejoicing in Grande Prairie? Um. Not exactly.
The response:
This was the grumpy and YIMBY (Yes In My Back Yard) response to the project from the editor of the local newspaper The Daily Herald Tribune:
The old saying, “a picture is worth a thousand words” can sometimes be even more important when it comes to picking just one image that is supposed to identify an entire community. Such is the challenge the City of Grande Prairie finds itself in right now as it embarks on a new “branding” campaign.
So with such a sensitive job one would think it would be important to consult with people from this region, lifelong residents and newcomers alike. But instead, Grande Prairie’s brand will be made in the U.S.A. in some Seattle offices 1,304 km away.
Will an American company know who Alexander Forbes was? Will they know what the Stompede is? … Will they know how to spell Muskoseepi without having to look it up everyday?
The Muskoseepi dilemma
Now, without knowing anything about the company in question or very much about Grande Prairie (I thought it was in South-Eastern Alberta, not North-Western), and certainly having no clue what a “Muskoseepi” is (?) this debate raises an interesting question for brand managers everywhere:
Is branding better done by insiders (people who live, breathe, and bleed the brand every day), or by outsiders (people who come in “cold” and learn about the brand)?
I’ll let you think about that for a moment.
[pause, soft music plays]
The answer:
My own take on this: neither one. You need both insiders and outsiders for a great branding campaign to succeed.
The insiders:
The process and outcome have to be driven and owned by insiders – and particularly by leaders with enough 1) power (and courage) to make the big changes that a whole-brand approach will require, and 2) humility to truly listen to the voices of outsiders (by which I mean customers). If the insiders abdicate this responsibility, the brand will be defined by outsiders, and not necessarily with the best intentions or proper perspective.
The outsiders:
Because a brand is a promise that is actually owned by its customers, successful branding can’t ever be an internal exercise only. Otherwise it’s just an exercise at best (like an orchestra rehearsing without an audience), a time-wasting navel-gazing as middle ground (executive retreat anyone?), or at worst, a spectacular public blunder (like Pizza The Hut or last week’s Syfy debacle).
That’s not to say you need to hire an expensive American firm to do your work for you. A sensibly priced Canadian firm would be better, but even that isn’t strictly necessary. This role could be played by your Board of Directors or a panel of advisors, or if you have a really active customer base, include some real customers in the process.
The most important things are 1) to make sure somebody at the table is speaking for the customers. That is, they give themselves permission to challenge you, ask “dumb outsider” questions, and maybe even tell you that your customers don’t care about things you hold very dear (e.g. Is the “Stompede” really that important? Really?), and 2) to make sure somebody on the “insider” side of the table is listening.
So as I write this, illness the newly re-christened SciFi Channel is ringing the bell at the NASDAQ to celebrate their name change to “Syfy” (Siffy?) and the Twitter hash tag #syfy is alive with unanimous pans of the new name: “Worst. Re-branding. Ever.” That might be a stretch, mind but so is the new name.
Screen captures from http://www.syfy.com/imaginegreater/. A distorted disorienting funhouse with no discernable direction or exit. Welcome to "Siffy".
Variety, page noting the fan outrage and commenting on the trend of cable channels renaming themselves in search of wider audiences, said NBC Universal had tripped the light gooftastic. “Syfy … opens up new possibilities for confusion,” the trade publication wrote. “If the network is trying to expand beyond science-fiction programming, why go with a new name that’s still pronounced ‘Sci Fi,’ but with a goofy spelling?”
My take:
Captain, I’m a brander not a Cable programmer, but they’re trying to have it both ways here. They’re trying to 1) preserve brand equity by pretending that the word will be pronounced the same way, while 2) leaving themselves open to the possibility of expanding to non-science fiction programming, and 3) building a distinctive protectable trademark in the package.
All of which sounds great on paper but to ordinary earthlings, it seems like a big stretch. Which is the trade-off when you choose a plain-language descriptive name like “SciFi” in the first place. Instant category recognition, but you have to live with (and respect) the expectations you create.
Or maybe I’m wrong. Maybe this weekend’s Cisco Ottawa Bluesfest should rebrand as “Blewsfest” now that KISS, Styx, and Ice Cube are all on the same bill. Note to Bluesfest: gimme a call, ‘kay?
A quick word on the tag line:
Oh, and when you put the “Siffy” name together with the mostly opaque and totally illiterate tagline “Imagine Greater” one wonders if the marketing team has been abducted by aliens (and not by the smart ones).
So you ask: “Mad at Switzerland? What could anyone possibly have against the Swiss” – those lovely Alp-ine purveyors of Rolex watches, visit this Nestle chocolate, and fastidiously discreet banking services? Sorry Switzerland. It’s not about you. It’s about you beating the pants off Canada in the global branding arena.
And to be fair, in the rant video attached you’ll note that I have equal opportunity anger issues against Sweden, Finland, and even my own ancestral homeland the Netherlands. And as you’ll see, it’s all because of their brands. Each of these countries punches far above their weight in the contest for the global brand belt. As you’ll see in the stats below, these countries even beat the heavyweight in the ring – the USA – when you take their population into account.
So why the anger?
Okay, I’m a Canadian. I’m not actually angry per se: just hurt, frustrated, envious, mildly apologetic, etc.
Actually, I want Canadian brand managers to stand up and take notice. We need to get more internationally respected / recognized brands. In this deck on SlideShare, you’ll find some supporting data (from Interbrand / Business Week) and my challenge to Canadian Brand Managers.
