Toxic Skittles, Mini Snack Packs, Velveeta Marketing Stunt

The changing role of social and search, who ever would have thought that Skittles could be toxic, store brands go to battle with CPG, there is one bright spot to food inflation, those mini snack packs are back, Category Management Association talks about meeting consumer needs through retail analytics and on the Bullseye – yet another marketing stunt – this time from the makers of Velveeta.

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Phil 0:06

Welcome to the Lempert Report LIVE. The changing role of social and search. Whoever would've thought that Skittles could be toxic. Store brands go to battle with CPG brands. There is one bright spot to food inflation. We're gonna talk about that one. Those mini snack packs are back. The Category Management Association talks about meeting consumer needs through retail analytics, as inflation goes up. And today on the bullseye, another marketing stunt this time from the makers of Velveeta. Let's get started. So Sally, Google's Senior Vice President said in a conference this month, that new internet users don't have the expectations and the mindset that we've become accustomed to in the Google studies. Something like almost 40% of young people. When they're looking for a place for lunch, for example, they don't go to Google maps. They don't go to search. They go to TikTok or Instagram. What's up with that?

Sally 1:12

Well, it's, it's very telling of our younger generation coming up and that they are looking for a more visually rich experience. It seems as though they're looking for influencers , people that they admire, that they like seeing on social media to give their opinions about things. TikTok , now has 24% of their global audience are women 18 to 24 years old. And then under that is 18% of men that are 18 to 24 years old. And so this is definitely the direction. It seems like that our younger generation is going. I mean, I remember the days of when, you know, we would look up , Ask Jeeves on the internet to like to find the answer to something, but it's a whole different experience now doing research.

Phil 2:07

And now I think what's so interesting to me is a lot of the junk food brands are encouraging TikTok users to market their products for them. You know, that just came out from BGM global health and new study was published there. And the health experts are saying that given the video hosting service popularity with kids, especially the policies are needed to protect them. The researchers found that unhealthy food and drink brands are encouraging TikTok users to market these products actively turning them into brand ambassadors, as well as using their own accounts for promotional activity. The bad news to your point, more than a third of TikTok daily users in the US are 14 years and younger.

Sally 2:59

Wow. That is a younger audience. And I know we've heard things about energy drinks and junk food and alcohol and those being the, the big ads that are getting in front of these young people. So we'll see what sort of , what sort of steps these companies take to c urb that.

Phil 3:17

And as we're talking about , you know, kids and we're talking about, you know, j unk food, I'm sure everybody h as now heard about the class action lawsuit that was filed. I think it was July 14th in California against Mars, I nc. T hey're stating that the candy maker back in 2016 had promised to remove titanium dioxide from their ingredients i n Skittles. And they stated it publicly that i t posed a significant health risk to unsuspecting consumers. Now here's the facts titanium dioxide is found in thousands of foods, everything from chewing g um to baked goods, to salad dressing, even in ice creams. It's also used in medication a nd sunscreens paint and plastics. But according to the FDA who approved it back for use in 1966, it is safe as long a s it does not exceed 1% of the food's weight. Now in the past couple years, just over the past two years due to new research, it's been banned in France and then the EU with the exception of Britain for use a nd f oods, scientists disagree about its toxicity. So it's not clear if it's safe or not. But according to the environmental working group, even if you t ry to avoid it and s ay, this is what scares me, it could be difficult as food companies are not required to include it and listing it in their ingredients. And in a lot of cases like on processed foods, it just states on the label color added. So the best bet to avoid it is to avoid foods that do not contain added coloring. Y ep. It's another food crime. What do you think?

Sally 5:08

I found that absolutely disturbing. What, what you just pointed out about the fact that this ingredient, you know, may or may not be listed on packaging. And it makes me wonder about other things too, but, but the most important thing is that, you know , I read that Dr. Marion Nestle , who, you know, we have a great deal of respect for, she made a point about this particular topic that I thought was really fair that, you know, to the Mars company, if there is a chance that it's in there and it's that it's getting in and causing cancer, then why wouldn't you just take it out?

Phil 5:44

Yep . Yep . And even if it costs you more yes. Who cares? There's a new report called the power of private brands , that FMI just came out with and what they found is three quarters of shoppers anticipate continuing to purchase more store brands in the future. Now, the problem is that brands face more threats from private labels as this food inflation keeps on going up and up and up. And now a lot of these retailers are fighting back against brands. What, what is really curious to me, Sally, is whether or not we're gonna see a fight really taking place between brands and retailers and the retailers just stop carrying a lot of brands.

Sally 6:36

I wonder the same thing reading about this. And, and you know, one of the things that I learned was that, you know, most consumers, when they're shopping online on a retailer site, that after the first page of searching for something, they're more than likely not going to be on go beyond that, to see what their other brand alternatives are. So if you don't get your product on that first page, and you know, a lot of these retailers are gonna want their own brands on that first page, then you may not get very much visibility with shoppers.

Phil 7:11

And what you're also seeing is now , they're calling it swaps. So I go for a certain brand, I click on that online and guess what, you know, the private brand comes up. And it says how much difference it costs in price and the availability and things like that. So a lot of changes are gonna happen. So some good news about food inflation. Costco is not raising the price of its rotisserie kitchen. It's still $4 and 99 cents. The price that's been for 12 years, even though in the past year, chicken prices have increased by 18.6%. So Costco big in the chicken business, they sell a hundred million chickens every year. They use it as a loss leader in the same way they do with their hot dogs and, and soda. You know, I think the thing that I find the weirdest is Costco's rotisserie chickens have its own Facebook page and their own hours . And Hey, you know, I give a lot of credit to Costco, not only about the price of what they've done, but, you know, they're vertically integrated as it relates to chickens. So what they've done is they've made improvements in the slaughter of the chickens. They've improved the conditions for meat processing workers. They're cleaning up the air and the water pollution from these factories. So, you know, the bottom line is it's possible to make improvements in our food supply and still keep the price low. Are you a Costco rotisserie chicken person?

Sally 8:50

I am not a Costco shopper, and I really want to be, I keep trying to remember that I need to get out there and try it out. But , this, you know, I know a rotisserie chicken at my local Kroger , or my Publix is, is going to be eight to $10 there. And so, I mean, this is a great way, especially right now, to get people into the store , and to fill their carts up with other items and totally agree with the vertical integration that, you know, this is something that, you know, not only is probably helping them keep the cost down and saving them money, but maybe it actually allows for a little bit more of regulating of the process of the poultry farms and making sure that everything is, you know, is going according to ethics.

Phil 9:41

Yeah. And, you know, we've, we've seen a lot out of the Biden administration where they're talking about, you know, going after meat packing facilities because it's only in the hands of four companies. It really, you know, hurts consumers, but this story with Costco, it really proves that you can do it right, and you could save money. You'll probably remember Sally that, you know, a few years ago, I think we did a story when Kraft came out with their hundred calorie packs. It was a way to try to help consumers to eat less, have less calories. And the problem was that bottom line is all the customers were calling up the Kraft hotline, the 800 number complaining that the hundred calorie packs didn't have enough food. So , you know, you almost can't win. But you know, a new report come out from the future market insights. And they anticipate that the portion packs this time around is gonna hit 3.6 billion this year and grow to 7.3 billion by 2032. And what they're saying is really because of the pandemic, we got used to packaging in single servings. And as a result of that, we're not gonna move away from it, whether it's because of the pandemic or frankly , you know, to save money , or to eat healthier, any of those things are just not gonna happen. You know, PepsiCo noted in its earnings released this month, that small formal snacks are seeing huge growth, especially products with full sugar in them. Danon known for yogurts like Activia, Danon, Okios is seeing heightened demand and popularity, different formats beyond the cups of yogurt. We're just seeing everybody getting into these small packs again.

Sally 11:44

Yes. And , you know, it does make sense on the heels of a pandemic. I can say as a mother, I am exhausted from preparing food and you know, just all of the things that came along with the pandemic. And so , it makes sense that, you know, people want a break, just, they just want something to be easy. It's portion control. It's great for kids, but then on the other hand, you know, there's the other side , which I wonder, you know, how, what will be the effect of this is there's the planet conscious people.

Phil 12:19

Yep.

Sally 12:19

And those mini packs, you know, I know some of my planet conscious friends would give me the stink eye if I had, you know , a mini bottle of water or something like that, you know , because that would not be taking care of a planet in their mind. So, you know, so there's the waste issue as well. So maybe we can find a balance in that, you know, materials that, and packaging that are used, that aren't that are recyclable and so that we can enjoy buying food this way.

Phil 12:48

Yeah. And, and there's a lot of new packaging materials that plant-based packaging and so on. And we really need to, to explore that. So Category Management, Association's recent webinar took a look at meeting the shopper's needs in these inflationary times through retail analytics for the complete webinar, just go to Category Management Association's website, but here's a teaser.

Jonah 13:15

So we look at who's winning as consumers focus on affordability. There's tons of data points out there it's really difficult for you and your teams to monitor it . Couple of the interesting ones that we've still pulled out is that lower income buyed trends they're shifting away from fresh. The affordability aspect is really hitting hard in fresh meat and produce, and there's alternatives here. There's high quality alternatives, but additionally, it's coming back to affordability. So those losses that we're seeing in terms of some of the higher cost items, some of those hit more by inflation. They're shifting to things with a bit more stable pricing, where consumers are feeling there's more bang for their buck. Okay ? So with 25% switching to stores offering more coupons and deals, that's a real odd one. In my mind, in past periods of inflation in past periods of rising costs , we heard a lot of consumers saying I'm gonna shift to a different store that has more everyday low pricing that has a better value proposition. But now what we're hearing is consumers saying I'm only gonna buy when it's on sale . And I'm those special deals , little bit different we've seen in past markets. And we're really interested to continue tracking that trend and seeing how it's being activated

Phil 14:50

On today’s Bullseye, the 100 year old Velveeta brand’s marketing team wants to shake things up a bit and create buzz and relationship with younger generations. How? Well, last year they launched a Velveeta scented nail polish and with BLT restaurants launched this summer a Velveeta infused martini aptly named the Veltini. The Kraft-Heinz marketers are trying to make Velveeta an aspirational lifestyle brand. I accept Velveeta for what it is – a pasteurized prepared cheese product. It can’t even be labeled cheese food. I grew up with my dad being in the cheese business and my father wouldn’t allow it in our house. Even though my mom liked the way it melted on macaroni. The truth is the original recipe was made from Swiss cheese and whey – yes, real cheese. It was created in the early 1900s and Kraft bought it in 1927. From then on the recipe evolved into what it is today – milk, whey, whey protein concentrate, milkfat, sodium phosphate, milk protein concentrate and contains less than 2% of various preservatives and coloring. The brilliant marketers at Kraft were able to buy the American Medical Association’s endorsement in 1931 – they said that Velveeta’s nutritional value builds “firm flesh” – what does that mean? Fat? And no, Velveeta does not require refrigeration and according to the company has a shelf life of 210 days. Maybe nail polish isn’t such a bad idea after all. Sally. Any comments today?

Sally 16:46

Yes, we do have some comments. Suzette McKee has commented on Facebook and she says that she prefers to buy meat from animals raised ethically that have had a better life. Uh, she also says that she would be interested in your thoughts on placement of global foods in either their own aisle or integrated with other choices. For example, gray coupon versus Chinese mustard. One is in the condiment aisle and the other is in the ethnic or global aisle .

Phil 17:15

Now a lot of that has to do with distribution. So what you have is you have specialty food distributors , uh, for example, that, you know, sell the Chinese mustard, they get a section of the shelf , usually five to six feet, and they can put on that shelf, whatever they want. Other brands like Grey poupon go into the supermarket's warehouse. So there was actually a Tops Market in Buffalo, New York , that created a format. This goes back , maybe 30, 35 years ago, c alled World Market and Suzette, they tried exactly, you know, what you're proposing that, you know, all the, all the global foods were together and made it easier to find didn't work. What other comments do we have?

Sally 18:03

John Pandol has commented on Facebook and he says, consumers supposedly want to know where their food comes from. Then increasingly by store brands where the origin is a state secret . Do I co-pack private label or turn down that business what to do.

Phil 18:20

Yep . And, and also I think, you know, goes beyond food when I'm starting to see now as more supermarkets or selling supplements, nutritional supplements, they're not even putting a country of origin on it. And I'll tell you, during the last administration, they got rid of country of origin for meats. And so on. The good news is the Biden administration is reinstituting that. But I believe John, as I think you do everything should have on its country of origin. I don't care where it comes from. And then this whole idea of not having to list titanium dioxide as an ingredient. I mean, it's shameful, as I said, it's a food crime. So with that, thank you all for joining us. Don't forget to go to SupermarketGuru.com. You could see all the episodes, all our past episodes, and until next week where we will meet you here again, same time, same place , have a great week read those labels. And if you see something that's a food crime . Tell me about Phil@SupermarketGuru.com.