The Bayer Monsanto merger needs your attention

The world of crop protection, if you’re not aware, is both important and cutthroat. And it’s something of which we should all pay attention.

There are a handful of main competitors who are either constantly battling the EPA or fighting environmentalists along side the regulatory agency, depending on your bent.

Bayer Monsanto
Growing crops is about to get a whole lot more expensive.

It’s also a changing industry. The main players, such as Monsanto, Syngenta and Bayer, have long been under fire because their lead products were pesticides. Those chemicals raised the hackles of environmental groups and have spawned thousands (if not millions) of papers, editorials and books (started by Rachel Carson’s seminal book, Silent Spring.)

Today, however, those manufacturers are increasing their investment in seeds, which are genetically modified to increase crop growth and stave off infection from pests and disease.

That is why Bayer is offering $62 billion for Monsanto, the largest seed producer in the US, for a Bayer Monsanto merger I can see happening.

The pitfalls of the Bayer Monsanto merger to you.

There are positive and negative outcomes of this proposed merger, starting with the benefit the companies themselves would receive. The battlefield now is over combined resources, especially worldwide, to increase research and development, and also to enter into developing markets.

The power of the seed market is that the next worldwide shortage is promising to be food. The population of the Earth is increasing but the amount of farmland is not. The only way to meet the world’s future needs is to make crops more robust and stir up agricultural production in those developing countries.

Leaving aside the potential negative effect of genetically modified seeds, the effect on the farmer – and the US economy – is potentially deadly. Mergers are becoming the norm in crop protection, with Dow and DuPont joining forces last year and rumors of Chinese companies interested in Syngenta still circulating.

Mergers mean less competition and less competition means higher prices.

Keeping track of the mergers in crop protection is not usually top of mind for consumers but they are important developments to notice. Seeds are seen as a healthier alternative to pesticides, but more research to needs to be done.

But sticker shock will soon be coming to your nearby grocery store. In the US, we take for granted what is available and what food costs. However, a Bayer Monsanto merger will change all that. Prepare to spend more of your dollar at the grocery store.

Chipotle and food safety

First it was E.coli and now norovirus. With that, Chipotle, the once darling of Wall Street and consumers looking for a healthier fast food option, has a serious brand problem.

Earlier this year, more than 50 customers in nine states became ill with E.coli after eating at Chipotle. Yesterday, 80 students from Boston College became ill with norovirus after eating at a local Chipotle.

This is a huge problem for a brand that has built itself on sourcing and serving the best ingredients available.

Chipotle
The outbreak at Chipotle is even worse considering what its brand means.

To be fair, Chipotle is not alone in having to deal with food-borne illnesses. McDonalds had an outbreak of E.coli in 2014 due to suspected undercooked hamburgers. In 2006, Taco Bell had a E.coli outbreak due to some tainted lettuce.

But neither McDonalds or Taco Bell claim to be in the business of “…finding the very best ingredients we can—with respect for animals, farmers, and the environment…” You see, Chipotle’s point of differentiation – best ingredients – is exactly why this is a much larger problem for Chipotle than any of its competitors. Failing on food safety is the antithesis of what the Chipotle brand is supposed to be about.

What Chipotle is saying.

Yesterday, at the Bernstein Consumer Summit, Chipotle CEO Steve Ells told investors, “We have the desire to be the safest place to eat.” Think about that statement in terms of the Chipotle brand. Shouldn’t being the safest place to eat have been part of finding the very best ingredients? It is akin to an airline saying, “We have the desire to have the fewest plane crashes.” It is a table stake. It is part of what every restaurant has to do. Food safety should be a given.

For a company whose brand is about the quality of its food to now say that, after E.coli and norovirus outbreaks, that they “have the desire to be the safest place to eat” is almost comical. It should never have been an issue.

The best brands have a sense of forethought. Meaning, because of what the brand stands for, the brand should be a guide for what the business should plan for, now and into the future. Take a brand like Servpro whose brand promise is to return things the way they were before, like the event never happened. From a business perspective, what does that mean? It means that Servpro must have all of the right tools, processes and methods to respond to any kind of disaster. It also means that the tools, processes and methods it uses don’t make things worse or hurt anyone.

The outbreaks and Chipotle’s response to them illustrate that Chipotle has not completely used the power of its brand appropriately. It either has lacked conviction or complete understanding of what its brand promise should mean to its business and now its brand may be in serious trouble.

Preference. It’s amazingly flawed.

Why your preference is misguided

Preference in blindfolded tests
Blindfolds often reveal truths

A Bud Lite drinker once told me that Miller or Coors “would not cross these lips unless they were cold, blue and dead.” He had unshakable preference. I asked him why he hated the other lagers so much and he said “they taste like raccoon urine.”

I asked a large assembly of bankers once if they felt like they were much affected by brand in their preferences. About two-third raised their hands to let me know that brand had no influence on their purchase decisions. Budweiser preferenceI then asked a few of the brand deniers what brand of mayonnaise they had in the refrigerator. To a person, they all responded, “Well, Hellman’s of course.” By a show of hands, almost three-quarters of the group who said they were not influenced by brands admitted that they too had Hellman’s mayonnaise in their fridge. So much for brand having no influence on decisions.

For those of you who are thinking that Hellman’s just tastes better, I have a few facts to share with you that might just surprise you.

Remember the Bud Lite drinker I mentioned earlier. In blind taste tests with hundreds of subjects, beyond the normal distribution of randomness, no one, NO ONE could tell the difference between Bud Lite and its light beer competitors. But it gets worse.

Preference is not a reliable barometer of goodness.Preferences

If you are over the age of 71, in blind taste tests (blindfolded), you can’t tell the difference in taste between Coca-cola and…  7-Up. (Read my article on what happened to 7 Up here) That’s right. They taste the same to you. This is not because human taste buds die at age 71, the age is simply a dividing line between those that grew up on soft drinks and those that did not.

Preference in sodaAs most of you reading this are under the age of 71, I challenge you to do this. Buy either Coke or Pepsi (I don’t care which one but they must not be a diet version) and a non-diet can or bottle of 7-Up.  Have your significant other blindfold you and pour some of each into identical glasses. Then take the blind taste test. Will you be able to tell the difference? Probably. But, you will be shocked at how similar they taste. If it weren’t for a hint of lemon/lime scent from the 7-Up, you would find them identical. The reason is that the predominant flavor exciter is sugar.

I share all this with you because none of us do blind taste tests to choose the things we prefer. Have you ever made two batches of potato salad, one with Hellman’s mayo and another with the store brand? Have you ever compared the side-by-side results of two batches of laundry cleaned with your preferred laundry soap and that of a competitor? I think you get my point. If things that seem so different as Coke and 7-up can be confused, imaging how much of our lives are directed from perceived differences that have nothing to do with rational reasons.

Preference is confusing
Brand prejudice is a reasonable thing

Purchase decisions, ALL PURCHASE decisions are emotional decisions. We perceive the differences that we anticipate and we reinforce our past decisions with over stated differences and inflated preference memories.

This is not a damnation of human behavior. Brand loyalty is a needed and necessary means of simplifying our lives. We place trust in our preferences because it allows us to live in the crowded and loud world we find ourselves in today. Having to make a continual series of rational choices would be exhausting to us. Prejudice, in terms of making sense of our consumer world, is not only a good thing but it is a necessary thing.

So I leave you with one more example. Can you imagine your misfortune to be a child of a brand strategist like myself? When my kids were young, I blindfolded the lot of them and gave them a choice of Nestle’s Quick in whole milk and the same whole milk with confectioner’s sugar. Sure enough, my hapless guinea pigs could not tell the difference.

(Read an article on motivations and brand preference here)

Lean Cuisine brand gets a makeover

If you’re like me, you eat lunch at your desk. For many of us (again, including me), that also means heating up a frozen meal in the microwave because it’s easy.

That’s why it was surprising to me to find that sales of frozen foods in general are dropping and that the leading diet brand, Lean Cuisine, is trying a new approach away from dieting.

Screen Shot 2015-06-29 at 10.19.35 AMIn this first spot, a line is spoken by the narrator (a nurse), “I eat the way I want to eat,” that is an important message that signals an independence that can be attractive to target audiences.

It’s a shift for the Lean Cuisine brand because, as Lean Cuisine Brand Manager Chris Flora said, “We recognize that diets are dead and we want to show that we are truly shifting away from diet.”

Diets may be dead, as Flora puts it, and it’s been replaced by fresh. Some many not associate fresh with frozen foods, although a $30 million campaign by many of the frozen food producers are telling us that frozen is “nature’s pause button.”

The Lean Cuisine brand hasn’t gone far enough.

This is an issue for frozen food producers and Lean Cuisine has recognized that it needs a brand shift. The problem is that Lean Cuisine hasn’t gone all the way. Packaging is new for the brand and the foods it makes will have an overhaul.

But the Lean Cuisine brand, which is owned by Nestle, hasn’t answered the question of what it stands for. Who is the Lean Cuisine eater today? The Lean Cuisine eater was once the one wanting to lose weight. Now?

The “eat the way I want to eat” is smart, but it becomes easily forgettable in how it’s used. It’s not prominent enough, which speaks to the problem with most brand advertising.

Instead, the campaign’s headline is “Feed Your Phenomenal,” which sounds like it was written by Madison Avenue and, therefore, is not believed. “Eat the way I want to eat” is in spoken language and taps into a true emotional value. “Feed Your Phenomenal” is just adspeak.

There’s the other issue, of course. The Lean Cuisine name. As much as Lean Cuisine would like to get away from diet, the name suggests as much. If Lean Cuisine really wants to stem its dropping sales (its sales have dropped 20% in the last two years), its name needs to be different.

Lean Cuisine was correct in making changes (I once ate a lot of Lean Cuisine but got tired of its blandness), but it and its advertising agency, Grey, need to go a few steps farther.

To win, Lean Cuisine needs a new brand. And it needs to stop with the trite “Feed Your Phenomenal.”

Organic food scam

Organic foods have a problem, a perception problem. Many Americans believe organic labeling is a scam, a marketing scheme that gives brands permission to charge higher prices.

That’s the finding in a new research study by Mintel that demonstrates that the organic wave is slowing down as consumers are getting more cynical about what “organic” really means.

What does organic mean?
What does organic mean?

You can see it in the bottom line. Whole Foods, the organic grocery leader, has seen its growth drop from the heydays of 20.4% growth in 2000-2008 to 9.9% last year.

The study backs up those numbers. According to Mintel, more than half of US consumers believe that labeling something organic is “an excuse to charge more” and more than a third (38%) view “organic” as simply a marketing term. Similar numbers show that consumers believe that organic-labeled products are not actually organic.

What is happening here?

There are several facets to all this. For one, as Mintel notes, the organic brands, including Whole Foods, have done a poor job in defining what organic really means. For some of us, we believe organic food is healthier, but we don’t really know nor, it seems, really care.

As sad as it may sound, lower cost trumps the need for healthier food. We are still a country in which we often choose less healthy items over better choices, even knowing that there might be health risks.

Who is the organic food shopper?

There’s another part to this, which I think is the larger issue. Even if you have defined what “organic” means, the consumer reflection of those consumers is not emotional and even seems untrustworthy.

The image of an organic food shopper is something soft and ill defined. It’s food in a hemp tote bag. The brands are too focused on the food and not on the definition of who those shoppers are when they buy organic.

Instead, the marketing is all about the foods and process: What are the good foods to eat, how to prepare them and how to shop for them. There’s very little focused on defining the emotional life of that shopper that would be an attractive aspiration to the target audience.

Organic brands are like any other failing brand, depending on product features and process, which are never enough to overcome price or the emotional brand reflections of non-organic foods.

That leaves shoppers with the idea that, “Hey, it’s just a tomato!” and choosing what they believe is the best tomato. It’s only natural that they then tell themselves that there is an organic food scam because few see themselves in the brands.

If the organic food brands continue to ignore market trends and the ability to tap into the emotional undercurrents of target audiences, “organic” will eventually be seen as nothing more than snake oil.