Category Archives: Trade Shows

The Perfect Storm, Part 2. Fixing “Pale, Stale and Male”

Posted on February 22, 2019 by davetuchler

The mood at last week’s Miami Boat Show was sunny, like the weather. Enthusiastic shoppers, lots of shiny new boats, and based on conversations with manufacturers, not enough new boats to meet demand.

However, as previously posted, some clouds on the horizon foreshadow the powerboat industry’s vulnerability in a way that will redefine the landscape over the next 10 years.

The core buyer base is aging. The 55-60 year old buyer base (let’s generalize and call them Boomers), are committed and usually repeat buyers. And they look a lot alike (in the words of one industry executive: “pale, stale and male”).
But there aren’t enough younger first-time buyers (generalized as Millennials) to replace their unit or dollar sales. Over the last 15+ years, the share of new boats sold to first-time buyers has dropped dramatically.
It’s the same old dudes buying more boats.
Recession bites. The next recession, like the last one, will flood the market with used boats when owners sell, crushing new boat sales – – a sales circuit-breaker if enough Boomer owners exit the market permanently. Remember, older buyers generally buy the more expensive boats.

Typical core new boat buyer

This post tries to explain why there are not enough younger boat buyers, and offers some ideas of what can be done to prepare for the future. While a bit longer than my typical post, there are lots of pictures, so please read on.

Source: NMMA

Following our Miami visit we circled back to get input from senior leaders representing manufacturers, dealers, Freedom Boat Club (the leader in this segment) and the NMMA, the leading trade association.

The upshot: the core appeal of powerboating is not going anywhere, but the industry will need structural changes to address some fairly major challenges to sustain health (read: sales) over the long term.

And the current pace of innovation is not enough to drive the changes necessary. Disruptive innovation is needed in everything from boat design, mode of power, sales/distribution channels to marketing. This is not about reducing price or offering new colors or more horsepower.

Disruptors transform the way a basic demand is delivered. Myopia has led to the downfall of many former market leaders.

Home Video: Blockbuster (VHS/DVD) yields to Netflix (streaming)
Personal photography: Kodak (film) yields to digital / smartphones
Books: Borders (bricks & mortar) yields to Amazon (online)

Based on appearances, the powerboat industry seems headed this direction – – focused on maximizing revenue with the current model (largely fiberglass gas-powered outboard boats sold through dealers).

There are signs that disruptors are at work — but there is a long way to go.

To explain where the industry has been and where it needs to go, we compared the buying process of legacy (Boomer) core buyers with considerations of potential Millennial buyers, in a 4-step process.

INTEREST EXPERIENCE PURCHASE HABIT

So what are some paths to long-term growth?

Here are some ways the industry can take action (with some examples):

Before addressing new buyers, the industry must keep current owners around as long as possible.
Slow down defections – – aggressively court current owners and build relationships through CRM, owner events and personal outreach – build loyalty and maybe get another purchase

To encourage Millennial first-time buyers:

INTEREST

Accelerate development of more agreeable, alternative power sources:
- GM’s experimental marine division, Forward Marine, introduced a 100% battery-powered boat. With a max speed of 20mph and a range of 1 hour at that speed, it’s not ready for prime time yet, and won’t get you many dates, but this is the direction some of the industry will go. Think Tesla. Maybe a hybrid as well.

GM Forward Marine prototype

Indmar just introduced EcoBoost, the marine version of Ford’s EcoTec engine – gets the same horsepower and torque with 4 cylinders as a typical V-8. More environmentally friendly.
Indmar EcoBoost
Torqeedo is an established German company offering quiet, efficient electric motors. Due to relatively low gas prices and a maximum of 100 hp, growth is slow but it is steady. They’re getting traction.

Torqeedo Deep Blue 80R

BlueGas Marine has developed economical natural gas power for boats. Traction is difficult for the above reasons as well as infrastructure (need the gas equivalent of charging stations), but the equation can change quickly if oil prices spike.

More aggressive marketing

Cross-market! Boating should not just be for insiders anymore! Visibility must be increased by pursuing prospects with related affinities: skiing, hiking, etc. Not just a booth at the boat show.
Be more inclusive, diverse and experiential. Feature a range of age, ethnicity, interests. Leverage social media to reach prospects beyond the familiar core demographics.

700-00039414

Innovate beyond current offerings – materials, design, features
- New boaters don’t have the burden of tradition and will likely be more open to unconventional but more functional approaches (after all, someone had to buy the first Prius)
- RIBs – Rigid Inflatable Boats (Axopar, Technohull) offer more efficient performance using different hull design and materials. They are really cool, perform great, look different, and that’s ok.

Technohull (top); Axopar

Powered catamarans look different but offer advantages of smooth ride and more space

EXPERIENCE

Leverage technology to reduce fear as a barrier to purchase

Self-docking boats will be available in 2020
On-board digital video tutorials can provide much more effective learning than paper manuals

Evinrude iDock

Controls are shifting from analog to digital, to mimic/integrate with smartphones

Yamaha 275 SD floating dash

OWNERSHIP

Offer more versatile/multi-use boats at attractive price points – not single purpose (e.g. fishing) but can handle a variety of activities on any given day (analog: SUVs), making purchase more acceptable
- Sea-Doo introduced a jet ski that converts to a fishing craft – – and it starts at $15k

Sea-Doo Fish Pro

Yamaha’s 2018 Boat of the Year (the FSH 210) is an affordable, do-it-all boat that is an excellent choice for first-time boaters.

Yamaha FSH 210

Don’t require purchase to participate
- Freedom Boat Club is a franchisor with 178 locations, with a model based on eliminating some key barriers to purchase (includes lessons, takes care of maintenance and insurance). The goal – make participation frictionless.
- Members pay a monthly fee for unlimited access to a variety of boats in a huge number of locations, rather than committing 6-figures for a single boat.

Other similar models such as peer-to-peer rental, fractional use, etc. will undoubtedly increase as there is less reliance on solely purchase
More fully integrate the internet in the shopping/buying process – as in the auto industry, reduce reliance on aggressive final-mile dealer salespeople.

HABIT

No surprises!

Full transparency in the sales process, specifically costs/ obligations of ownership
Continuous on-boarding/learning from the dealer, not just 2 hours when the boat is picked up
Aggressively encourage new boater networking to share tips, experiences, and create peer communities
Mentoring programs linking experienced boaters with new boaters. Older boaters would love to pass along insights; a no-judgment setting makes it a win-win.

Mentor

These are just a few things the industry can do to mitigate unavoidable changes. It will take foresight, patience, and investment – – and may not pay off immediately.

But an industry that proactively and creatively adapts to the needs of new boaters with great product and a great experience, will be much more successful than what we currently seem to have – – an industry that asks potential new buyers to adapt to the way things have been.

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Posted in Branding, customer loyalty, Marketing Strategy, New Products, Product Management, Trade Shows and tagged Aging buyers, AirBnB, Axopar, Blockbuster, BlueGas Marine, Boating, Boomers, Borders, Carvana, CRM, Disruption, EcoBoost, Electric power, Evinrude iDock, Freedom Boat Club, GM Forward Marine, Indmar, Kodak, Miami Boat Show, Millennials, National Marine Manufacturers Association, NMMA, Peer-to-peer, Powerboating, Powered catamarans, Recession, SeaDoo, Technohull, Tesla, Torqeedo, TrueCar, Uber, Yamaha, Yamaha 275SD, Yamaha FSH 210. Bookmark the permalink.

How Do You Reinvigorate a Mature, Cyclical (but still really fun) Industry? Part 1: The Challenge

Posted on February 13, 2019 by davetuchler

This is a story about a great industry that was extremely hot…until it suddenly wasn’t.
It presents a unique challenge in how to navigate long-term growth in a world with changing values, attitudes and demographics – – in an unpredictable economic and political climate.

This is Part 1 of a two-part post. Part 1 sets up the challenges to the boating industry.

In Part 2 we’ll discuss some things the industry is doing to meet these challenges, based on observations at the industry’s premier annual event, the Miami Boat Show – which begins on February 14, 2019.

Perfect Storm - Title

Powerboats are indisputably lots of fun, whether it’s to fish, ski, dive or just to cruise around. It’s no surprise that about 140 million Americans participate in boating annually, and that in 2018 the industry generated an estimated $170 billion in annual economic activity (Source: NMMA).

Source: NMMA

But as we’ll see, even with several years of growth, the powerboat industry is facing some real headwinds in countering demographic shifts and bracing for the inevitable next recession.

Please read on, and if you’d like, post your ideas on how you’d attack this challenge in the comments section.

———–

The Ultimate Discretionary Purchase

At the very far endpoint of the need-want continuum (aka 0% need, 100% want), beyond ice cream, puppies, personal Zambonis or large screen TVs, there are recreational boats. Unless you make your living on the water, you don’t need a boat.

And with considerable entry costs leading to ongoing expenses (fuel, insurance, dock space, maintenance, accessories, etc.), this is an industry that is inextricably linked to economic ups and downs.

As a CNBC commentator put it: “Boating is perhaps the most cyclical consumer sector imaginable. Vessels are expensive to purchase, time consuming and completely discretionary.”
https://www.cnbc.com/2014/04/01/yachts-a-practical-investment-for-regular-investors.html

Entry-level recreational boats can be very affordable, but prices can easily push six or even seven figures as size and complexity increase. A relatively ‘entry-level’ 25-foot recreational boat can cost $200,000 or more. A 40-footer can be well over $1 million. This is an industry that has historically tried to push the envelope during optimistic economic times.

National Marine Manufacturers Association

But the seas are not always smooth. Powerboating, in particular, is vulnerable to a perfect storm.

Not counting the very wealthy, most people considering a major discretionary purchase will delay or just not buy in an unstable economy
Like the tide drawing out, when economic uncertainty hits, many existing boat owners sell their boats, creating a large pool of relatively new and very affordable used inventory. Anyone still interested has ample reasons to buy used, which is crippling if you’re trying to make or sell new boats.
The average age of boat owners is relatively advanced (currently around 55), meaning that a lot of purchasers (many of them Baby Boomers) from earlier growth years are permanently exiting the market. There are new, younger buyers, which is great, but currently not enough of them to sustain continued growth.
In an economic downturn, related personal factors such as existing loans, lack of available credit and home sales come into play as people make decisions – and cutting boat expenses can be considered a less painful way to try to balance the family books.
As powerboats generally use internal combustion engines, they can be subject to the political climate and resulting legislation. The ‘un-green’ optics of boating are a turn-off for a certain population segment, and ‘greater good’ legislation can create negative real consequences for marine (one example: ethanol is widely mandated but causes expensive damage in marine motors which are run more sporadically).

National Marine Manufacturers Association

This perfect storm was on full display in the few years leading up to 2010.

The Great Recession – all kinds of ugly

In the early 2000s, economic optimism drove strong unit growth, with about 375,000 new powerboats sold in 2006. Dollar growth was even higher, as convenience features like stereos and refrigerators, the conversion from 2-stroke to cleaner/quieter 4-stroke motors, greater available horsepower and resulting higher prices all increased industry sales markedly.

And while there was some softness in 2007, when the stock market tanked in 2008, the industry nose-dived. Annual sales dove to about 150,000 in 2010. Even with several recent years of strong market growth, as of 2018 it has not fully recovered, with sales of new powerboats reaching 280,000 – – still below levels of a decade earlier.

As one industry official put it in 2015: “We fell off a cliff about five years ago. Homes were going into foreclosure, and people were making hard choices. On top of that, manufacturers didn’t build many boats in those years. But we lived through it.” https://www.sacbee.com/news/business/article8801072.html

Numerous manufacturers and dealers simply closed up shop. One estimate had the boat manufacturer workforce reduced by 50-75% as a result of the recession.

In some ways, boating faces a long-term challenge.

Many current boaters will eventually age out of the market
New younger (and less affluent) boaters are interested in experiences but less interested in possessions — including single-family homes where possessions (like a boat in the driveway) can be stored. They are also influenced by ecological considerations.
A multitude of other factors complicates things: consumer confidence, rising student debt, an increasingly diverse population that may not have boating as a shared experience – – even concern about fuel price stability

Make no mistake, as of now the industry continues to grow, it is expected to grow further in 2019, and there are several bright spots of strong growth – – like the emerging wake sports segment, and personal watercraft (aka jet skis).

Brands pictured: Malibu, SeaDoo

And the economy still appears strong, consumers appear to be confident, and the boating industry is continuing to extract growing revenue from ever more big, exotic and outrageous products (a 627 HP, $90k motor was introduced a few years ago, and immediately a 53-foot, $3 million luxury fishing boat was introduced deploying 4 of them – along with 50 neon-ringed speakers. Rumor is that there will be a six-motor boat at this year’s show). So making hay while the sun shines is definitely a current strategy – take advantage of consumer confidence and feelings of wealth.

Pictured: HydraSports 53 Sueños

But the next recession is not a matter of if, it’s a matter of when, and Boomers will continue to exit the market.

SO – WHAT CAN BE DONE TO ENSURE SUSTAINABLE GROWTH IN THIS MARKET?

Maximize growth with current products? Introduce game-changing products? Hedge with counter-cyclical products? Double down on technology? Pivot to something else entirely?

Would love to hear your thoughts.

For Part 2, we’ll report back within a week, including some evidence of the current (greater luxury and features) and future (laying the groundwork for the next few decades).

See you at the show!

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Posted in Marketing Strategy, New Products, Retailing, Trade Shows and tagged Boating, Great Recession, Marketing Challenge, Miami Boat Show, Miami International Boat Show, National Marine Manufacturers Association, NMMA, Perfect Storm, Powerboats. Bookmark the permalink.

Unexpected game-changers for our future food supply

Posted on October 12, 2014 by davetuchler

[NOTE: If you are getting this post in an email, click on www.thearmchairmba.com to see the accompanying graphics.]

I recently participated in an IFT (Institute of Food Technologists) workshop on the long-term future of our food supply. These are the same food scientists that midwived the difficult births of Count Chocula, Betty Crocker and Chef Boyardee, but they have also developed fortified, functional and better for you foods and beverages. And they play a critical role in defining our food future. (I previously wrote about IFT’s FutureFood2050 initiative).

Supply Chain as rendered by Chipotle

You may think: How complicated can food be? Haven’t we been farming, shipping, making and eating for quite a while now?

It turns out that managing the food supply to meet future consumer, economic and regulatory needs is about as simple as airline scheduling logistics.

Supply Chain – Actual

And as the workshop revealed, it will only get more complicated going forward. Why?

First, consumer demands continue to increase: lower cost, variety, customization, easier/faster shopping, nutrition, natural, sustainable…and of course great tasting. Not all simultaneously compatible.

Second, farmers, manufacturers and distributors are pressured to meet these needs and still make a profit.

Finally, innovations, often seemingly not food-related, will play a critical role as the food industry evolves.

This future could be very interesting.

Consider these trends /technologies that might impact the future of food, all of which are happening now:

– Farm drones/robots/blimps – – to monitor crop conditions continuously, greatly increasing farming efficiency

– Resource-sharing – – rather than time-sharing a car, how about meat-sharing a cow? More accurately matching supply to demand.

– Crowdsourcing product design – – leading to higher success rate of new products

– Versatile manufacturing – – economical short production runs, allowing more customization

– Urban farming – – new technologies enable repurposing declining urban areas (Detroit-like)

– Automated delivery – – driverless delivery to homes (drones, copters) – taking cost and time out of supply chains

– Rise of B Corporations – – (“a new type of company that uses the power of business to solve social and environmental problems.”) Transparency in social benefit, an additional differentiator.

– Shorter IP protection – – forcing faster innovation and creating increased competition

– Remote smell – – transmitting tastes/smells through the internet, making product development quicker and more successful. (Were this previously available, we may have been able to avoid Brussels sprouts.)

oPhone

– Genetic consumer cohorts – – low-cost genetic typing enables segmenting consumers by health-driven factors like allergies, facilitating meeting needs of key segments.

– Expanded definition of acceptable food – – e.g. ground insects as source for cheap, high efficiency protein, creating an affordable ingredient for billions, and one heck of a marketing challenge for some.

What does all this mean?
Well, we don’t know yet. That’s why they call it the future.

One set of outcomes could be:

Greater ability for consumers to quickly get foods customized to their wants/needs
More tools for farmers, manufacturers, retailers and distributors to drive down costs

A parallel set of outcomes could also be:

Benefits limited to those who can afford customization and speed (and the tools that enable them)
A more commoditized supply chain complementing the customized offerings, with lower cost, slower delivery and less choice – – for those who cannot afford (or just do not value) the more tech-enabled offerings

There would likely be huge collateral impacts, like increased complexity in regulation, labeling and distribution; new retailing models, etc.

Like it or not, food science and technology professionals will need to be prepared to meet these potential future challenges.

The rate of change in the food industry is accelerating. I’m all for it, as long as there’s still bacon.

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Posted in Marketing Strategy, New Products, Technology, Trade Shows and tagged agriculture, allergies, B Corporation, Betty Crocker, brussels sprouts, Chapul bar, Chef Boyardee, Chipotle, Count Chocula, cricket flour, crop efficiency, crowdsourcing, customization, DNA, farm blimps, farm drones, farm robots, farmer, farming, Food scientist, future, FutureFood2050, genetic cohorts, ground crickets, IFT, Institute of Food Technologists, oPhone, Philly Cowshare, protein, Remote Smell, resource sharing, supply chain, urban farming, vertical farming. Bookmark the permalink.

We Tested it On You, So It’s Probably OK for Your Pet

Posted on October 1, 2014 by davetuchler

I had the pleasure of attending a brand new trade show – Petfood 2.0 – in Chicago recently.

Not surprisingly, this show is still getting its furry legs under it – – a very manageable group of 35 disparate exhibitors made for a quick and interesting, if not yet cohesive, experience.

Overall, though, a larger theme presented itself:
Following thousands of years of dogs serving man, the tables have turned.
Man now serves dog.

Exhibit 1: Hemp for Pets.

Now available from our friends at HempMeds, is a line of products made from hemp to benefit your pets. aNew™ Pet Nutrition‘s products provide essential fatty acids (EFA – – Omega-3 and -6) and are made from a blend of hemp seed oil and raw hemp stalk oil (which is rich in cannabidiol – CBD). EFAs, as we know, are highly beneficial – – just don’t ask the industry to agree on what the top benefits are.

This innovation in pet health could not have been possible without the committed testing of hemp products by millions of Americans in the 1960s and 1970s. So while the outcome of all that testing is up for discussion, your cat or dog is possibly benefiting now from what you did in college then.

OK, that’s not accurate.

While hemp is illegal to grow in the US, it is perfectly legal to import any part of the hemp plant in all 50 states.
And while the prospect of Fifi or Rover lying on his or her back contemplating the ceiling tiles for hours on end and giggling is intriguing, these products contain virtually no THC – the active ingredient that makes marijuana psychoactive.

Although it would be interesting to see if Nigel would behave any differently with the munchies. Doubtful.

Exhibit 2: Functional ingredients for pets – – it worked on Man, so it’s probably safe for Rover.

We long ago realized that we could do better than feeding our pets Ol’ Roy (WalMart). Thus emerged added value feed (e.g. Iams, Eukanuba, Science Diet, etc), offering different formulas for large breeds, older pets, etc. as well as some medical needs.

Meanwhile, human foods and beverages have increasingly been stuffed with a dizzying array of functional ingredients, many of which have no empirical basis in efficacy. But we humans have shown that we’re willing to buy them anyway. What did Charles Revson say about hope?

Based on this massively-scaled test market on mankind, it apparently has been deemed that animal-kind is now ready to safely ingest all sorts of functional ingredients that may or may not actually ever benefit them.

Incorporating things like ancient grains, fiber, medium-chain triglycerides, probiotics and ionic trace minerals, your pet can now get benefits heretofore only considered for the human species (notwithstanding hairballs and a healthy coat).

One company, PetNaturals of Vermont, offers products to address the following areas:
– Agility, Antioxidant, Bladder Support, Breath, Calming, Daily Multivitamin, Digestion, Hip & Joint, Immunity, Slim-down, Urine pH balance (really – to avoid yellow spots on the lawn), Periodontal health, Fecal function, and Skin/Coat health.

You dog and cat owners will probably recognize some of the benefit areas in the products below.

We live in a world where the things we eat promise magical powers to fix whatever marketers insist needs fixing. And regardless of the effectiveness, manufacturers have made a tidy business catering to hope.

Now, due to the significant sacrifice, expense and effort expended in testing on humans, our pets will soon be able to have their diets enhanced, and your wallet may end up just a little lighter. So when your pet looks up as if to say ‘Thanks, Man’, now you know what’s going through that little brain.

I have no doubt that many of these ingredients can provide real benefits to some of the 150 million dogs and cats out there.

Except I’m not believing anything that promises intelligence to an Irish Setter.

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Posted in Marketing and Media, Marketing Strategy, New Products, Product Management, Trade Shows and tagged agility, ancient grains, aNew Pet Nutrition, antioxidants, bladder support, breath, calming, Cannabidiol, cat food, cats, CBD, Charles Revson, digestion, dog food, dogs, EFA, Essential Fatty Acids, Eukanuba, fiber, functional ingredients, hairballs, Hemp, Hemp Oil, hemp seed oil, hemp stalk oil, HempMeds, hip & joint, Iams, Illegal, immunity, ionic trace minerals, Marijuana, medium-chain triglycierides, munchies, Ol’ Roy, Omega-3, Omega-6, pet, Petfood 2.0, PetNaturals, Pets, probiotics, psychoactive, Science Diet, THC, Urine pH, WalMart. Bookmark the permalink.

A Non-Techie’s Guide to the Internet Commerce Trade Show (IRCE)

Posted on July 16, 2014 by davetuchler

This year was the 10th anniversary of the Internet Retailer Conference and Exhibition (IRCE) and my first year of attendance.

Trying to neatly summarize this sort of confab without a experience as an e-commerce operator is sort of like assuming you can translate Portuguese based on having watched the World Cup. The show was large, chaotic and alien – sort of like walking into 100 Star Wars bars simultaneously.

So while I have decent e-retailing experience, I will not attempt to make sense of all of this.

But I do have some observations.

E-Commerce is based on a few simple objectives, not too different from the marketing funnel used for any other product marketing, but with different terminology:
– gain the right customers’ attention (‘engagement’, ‘click thru’, ‘open rate’)
– encourage purchase (‘conversion’)
– efficiently delivering (‘fulfillment’, ‘final mile’)
– establish a relationship (‘customer experience’)
– encourage repeat purchase (‘loyalty’, ‘retention’)
– encourage WOM, referrals (‘evangelism’)
– etc.

Simple, no? I mean, we all shop online, how difficult could it be?

Well, let’s illustrate some of the complexities using a typical grocery store as the template. Imagine running this store.

This is a store where:
– the store itself serves the entire world — yet it needs to be built to serve the right volume of customers profitably
– finding the store requires a guide — yet the description that will lead to your store changes every 6 months
– your most loyal customers can be lost if a competitor offers to carry the groceries to the car for free
– one of your big vendors (i.e. ISP) can have a bad day and you are unable to open, with no control
– competitors can pop up virtually next door – instantly – and go away just as fast
– about 4 in 10 customers fill up their carts and then exit the store, leaving the cart in the aisle
– a person with bad intent could lock the doors of your store – from thousands of miles away
– your loyal shoppers are barraged with promotional messages from stores right next door – and around the world
– your competitors’ customers don’t necessarily live nearby – – but you still have to find them
– some of your competitors sell products to an enormous store that’s in every market, and which sells them cheaper (hint: starts with an ‘A’)
– and all of this is changing at light speed — Yikes!

On the other hand, all is not lost. Imagine if your store could:
– remind customers when important events are, and even suggest items to buy for the occasion
– send customers totally personalized communications, including catalogs – – as often as you want, for almost nothing
– make recommendations to your customers about what they might love, based on what they’ve already bought
– send customers not just promotions, but at the exact time that you know they typically buy, and the deals that they respond to
– enable your customers to tell all their friends about your great store – – instantly, when they’re most excited
– follow up every single purchase to make sure everything is ok
– dress your store up for the holidays or another event – – instantly
– change what your store offers based on what your customers are buying elsewhere
– enable customers to order merely by touching the picture in the ad

This is the magic of e-tailing. The ability to reach and influence is remarkable, and the rules are constantly changing.

Here are a few companies whose products looked interesting:

Ship 2 My ID – – from their website: “Ship2MyID is a social commerce enabler that will allow users to buy items online and send them to others without needing to know the receiver’s physical address. Both the sender and the receiver’s physical addresses are kept hidden from each other, and the receiver has to accept the shipment, ensuring security.” Got it? You give them your email or social media ID, they help someone ship something to you without their knowing your address. yes, me too.

OrderGroove – encourages all-important loyalty by enabling subscription ordering (i.e. they figure out when you run out of vitamins, diapers, dog treats, whatever, and facilitate having the manufacturer send to you.)

Bitpay – Still don’t understand bitcoins? Doesn’t matter. With these guys, your store can still accept them.

From their site: “Instant conversion, no transaction fee, and bank deposits in US Dollars, Euros, GBP, CAD and more. We take the bitcoin exchange rate risk, your customers get the best rate on the market, and you get a payment you can count on, every time.”

Sounds pretty low-risk to me.

FeedVisor – Algorithmic Repricing for Amazon Sellers! I will admit – – not 100% sure what these guys do. Maybe not even 50%. There was a crowd of intimidating techies crowded around the booth so I just gave them wide berth and moved on.

The IRCE show is one trade event that is actually worth attending every year, because you know that in a year everything will be completely different.

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Posted in Marketing Strategy, Retailing, Social Media, Technology, Trade Shows and tagged algorithmic repricing, amazon, bitcoin, Bitpay, cart abandonment, click-thru, conversion, customer experience, email marketing, engagement, etailing, evangelism, FeedVisor, final mile, free shipping, fulfillment, internet retailer conference and exhibition, IRCE, loyalty, MapMyID, open rate, OrderGroove, retention, Ship2MyID, subscription, World Cup. Bookmark the permalink.

Top 5 SWEET Treats from the Sweets and Snacks Expo (Part 2)

Posted on June 2, 2014 by davetuchler

Last in a series: Here are the Top 5 Cool Sweets products I observed at the 2014 Sweets & Snacks Expo. (previously I reported on the Top 5 Snacks, available here.) As always, all links and photos are active.

Chocolate is the centerpiece of the sweets part of the show. And certainly by now we’ve seen every possible permutation of chocolate, no?

No. Among a few evolving trends: (thin ‘bark’-like chocolate products and ‘minis’, smaller versions of mainstream products) there were some exciting new products.

Top 5 Sweets Products

1. Energy chocolate – Awake, Scho-ko-lade, energems

As you may know, chocolate already has some caffeine – about 12mg/oz typically. These caffeinated chocolates think you need more. Awake has about 66/oz; 101 for a 1.55oz bar. Scho-ko-lade is a 100 year old German formula that combines the caffeine from chocolate, coffee and the kola nut to deliver 95 grams for 6 sections (about as much as what’s in 8 oz of coffee). And it comes in a nifty round tin as well. Energems takes a different approach, calling itself a nutritional supplement and puts 15mg of caffeine in each stylish round candy.

– They all taste great and are an excellent excuse to work chocolate into your breakfast routine.

2. Vitamin candy – Supercandy, Vitamingum, Vitamincandy

One thing the world didn’t think it needed is candy that is good for you. All the company officials I spoke with were quick to mention that these are not supposed to replace sensible eating, but “as long as you’re having candy, why not have some vitamins as well” seems to be the prevailing rationale. We are one very messed up species. – at any rate, there were some tasty examples.

Supercandy comes in hard, gummy and gum forms and promises B-vitamins, antioxidants and electrolytes. Vitamincandy comes in 6 flavors and most offer a small dose of Vitamin C. Vitamingum Fresh offers ‘Fresh Breath and 12 Essential Vitamins’.

– Ultimately, though, if you really feel you need to supplement your diet with vitamins, a pill is probably a more practical delivery system.

3. High-tech breath mints – EatWhatever

Perhaps inspired by 2-part epoxy resins, the folks at EatWhatever believe in “Two Steps to kissable breath”. In this case, there are two pills – a gelcap that you swallow after a meal (“especially with smelly garlic or onion”), and while it’s de-funking you from the inside there’s also a mint to suck on for instant hit of date-saving fresh breath.

The mint tasted good (like most mints) but I only tried it once and can’t testify to the effectiveness of the 2-part system. But they claim it works great – – you will just need to be clever to discreetly deploy this system in a date situation.

4. New chocolate shapes – Chocolate Moonshine hand painted artisan fudge bars

Just when you thought there’s nothing new, you run across the booth of the Chocolate Moonshine Company of Pittsburgh. 33 flavors, gorgeous presentation, and absolutely terrific fudge. A bit pricey at $2/bar, but these are an innovative approach to an old product and are a great indulgence (especially if one of the 33 available flavors matches your team colors), and an even better gift.

5. MEGA candies – more of what you already get too much of

Finally, the good old American approach of “if I can’t give you something new, I’ll give you more of the old stuff”.

MEGA products are basically pumped up versions of old favorites, with absolutely no nod to nutritional benefits, GMO-free, added vitamins or any of that stuff. If many of today’s new candy products are sensible like a Camry, these Mega products are 1960s V-8 powered muscle cars.

NY-based Megaload Chocolates sells all sorts of weird combinations that you might dream up on a sugar high: Oreos sitting on peanut butter cups like the Space Shuttle on a 747, or topped with a chocolate chip cookie. They may need to create one topped with a little insulin packet.

M&Ms MEGAs are comparatively tame, but prove that size matters in the chocolate world. Same concept, just 3x the size you’re used to. And the large size is surprisingly satisfying in your mouth.

Megaload Chocolates!

Honorable mentions

– Tabasco Chocolate – after chocolate with chiles and bacon, this was inevitable

– Sugarpova candies – yes, this is Maria’s vanity candy. And she’s got game here too. Sometimes you just need a good angle.

– Customization (TicTacs) – the only line at the show was for making your very own custom TicTac blend. Surprised there wasn’t more of this sort of personalization. There will be.

– Milk Flavoring Pods from JohnnyMoo. It’s a version of a flavored milk straw that has taken two giant steps forward technologically and now looks a little like your very own Space Needle. But much better tasting. Fun!

– Tongue tattoos from Tungtoos – Definitely an innovation I didn’t see coming. Why, you ask? Because, as the old punchline goes, we can.

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5 Snacks to Watch – Sweets and Snacks Expo, Part 1

Posted on May 28, 2014 by davetuchler

Last week was a double-dip of intense investigative pseudo-journalism. First the National Restaurant Association show, then the Sweets & Snacks Expo.

Following summarizes The Armchair MBAs discoveries from 5 hours of walking the Sweets & Snacks Expo floor at McCormick Place in Chicago, 5 miles of shoe leather, and way too many samples.

The short story – while the overall sweets and snacks landscape is relatively stable (popcorn, nuts, chips, chocolate, etc), around the edges you could see green shoots of innovation. And that was about the only green I saw at this show.

Snacks are covered today; Sweets to follow soon.

Snacks – mega trends

– Popcorn dominated the floor, with dozens of options in every flavor, claim, and form imaginable. Many were jumping on the SkinnyPop ’35 calories per cup’ bandwagon – – when of course no one has EVER had less than 5 cups of ‘CrackPop’ at a sitting. It is impossible to describe all the popcorn products that were shown.

– Flavored nuts, veggie, fruit and grain based chips, and other things that started life simple and healthy and then got transformed beyond recognition.

– Jerky. Around for centuries, jerky’s high protein/low carb profile has moved it beyond trucker feed to be now ready for its close-up. At least 20 companies were showing off their jerky.

Here’s a little Brand Extension 101 for you:
– Expanded category definition: from beef to elk, bison, turkey, chicken, salmon (the salmon jerky is extra high protein, and tasted great — if sometimes a little chewy)

– Flavor proliferation: pepper, acaí berry, ginger & wasabi, jalapeño, honey spice, chile ‘n lime, roasted cayenne, etc.

– Price stratification: companies like Duke’s are now selling ‘small batch’ jerky at higher prices.

– Form differentiation – a company called Kratos is trying to avoid the impending jerky shakeout by positioning (and shaping) their beef product like a healthy protein bar, complete with “Unleash your Warrior” tagline and impossibly fit people on their website. Nice work, actually.

5 snack products worth keeping an eye on:

1. SuperSeedz gourmet pumpkin seeds – high protein, claims galore, 8 flavors and a clever name; delicious

2. EatKeenwa Krunch – the only quinoa-based cluster snack that I noticed, and quite tasty, even if the ‘clusters’ crumbled a bit in the bag

3. Ocean’s Halo seaweed chips – if I got the backstory right, 2 dads from Korea who grew up eating seaweed, and 2 dads from the U.S. who grew up eating tortilla chips got together on this – the not-surprising result being a hearty chip that is somewhat reminiscent of sushi. Surprisingly good, particularly with a salmon jerky chaser. The only seaweed chips at the show.

4. Snikiddy Eat Your Vegetables veggie chips –a strong claim of ‘1 full serving of vegetables in every ounce’, offset somewhat by fat count (7g/oz) which is a bit on the high side for a vegetable

5. Simple Squares organic snack bars. Reflective of trends toward raw/paleo (minimally processed), simple label products. 5 ingredients, non-GMO, etc.

That’s it for this installment. Coming up: Sweets!

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Top 5 Observations! – National Restaurant Show (Part 2)

Posted on May 23, 2014 by davetuchler

This is part 2 of coverage of the 2014 National Restaurant Association show – too much great stuff to fit into one post.

I’ve ranked my top 10 observations; this post features my Top 5.

(If you missed my previous post, you can see #6-10 here).

Again, all links are live so please click through with abandon.

OBSERVATION #5. School Lunch is a Battleground.

Remember when school lunch was a PBJ, apple and Twinkie in a paper bag or Superman lunchbox? How many ways would that not work now?

Two trends are making school lunch planning fiendishly difficult.

A) FLOTUS Michelle Obama’s Healthy, Hunger-Free Kids Act of 2010 sets limits for sodium, fat, sugar and calories, among other things.
– What’s happened is that compliant healthy meals are often too skimpy (or not tasty), kids are not eating them, and some schools are dropping out because they are losing money (even with subsidies).

Check out these funny-yet-sad tweets from kids complaining about their lunch offering:

B) Separately, allergens (like nuts) are becoming more of a center of the plate issue.

The result of all this is that there were numerous products specifically positioned as not only allergen-free, but also satisfying the school lunch nutritional requirements.

Home Free, Skeeter and Funley’s are on the market touting such mouth-watering claims as ‘Nut Free’, ‘School Compliant’ and ‘Gluten Free’ and other ‘free-from’ things. Which is a shame, because beneath those claims they all tasted really good – a message that seemed somehow forced into 2nd place.

Separately, organizations like Wholesome Tummies are offering alternative programs providing ‘fresh, nutritious and exciting foods’.

There were a lot of school nutritionists asking lots of questions. And ultimately the market will decide.

OBSERVATION #4. Liquor-flavored meat.

With these two manly ingredients, how could you lose? There were quite a few examples of meat flavored with some sort of macho alcohol. We’ve seen things like Jack Daniel’s barbecue sauce for years, but these examples had the flavor infused into the meat.

A few examples:
– Family Brands has just introduced meat products infused with Ole Smoky White Lightnin’ Tennessee Moonshine. You can get pulled pork, sausage and other products flavored with with regular, apple pie or other moonshines. They taste great, but don’t overdo it – – you may get Dukes of Hazzard flashbacks.

– Over at Zoe’s Meats, they’re offering Ghost Pepper Salami with tequila

– And my friends at Kronos Foods were sampling their brand-new Beer Can Chicken, which I can testify is better than anything I get from my smoker. Perhaps one reason is that they use PBA (Premium Brown Ale), while I use PBR.

OBSERVATION #3. Food Trucks Mainstreamed.

Food trucks have long been thought by some of as being on the funky fringe of foodservice, operating from recycled ice cream trucks. Well, this year served notice that food trucks are now driving right down the middle of the road.

Several companies offered custom foodservice trucks, built to spec and coming in at around $150,000. These are impressive, well-equipped, heavy duty vehicles specially built to bring the finest cuisines right to your doorstep.

At that point, whether you go for kimchi, po’ boy, pupusas or paletas is entirely up to you.

OBSERVATION #2 – RUNNER-UP: Kallpod. ‘What’, you say?

How many times have you had an otherwise great meal spoiled by:
– waiting for a refill on your drink
– waiting for your check
– otherwise having your server disappear into the ether never to be seen again

Well, this tech innovation gets super-high marks because it focuses on diner satisfaction. What a concept.

The best analogy for Kallpod is the ‘Call Attendant’ button in an airplane – – only in this case it’s on your restaurant table and it’s wirelessly connected to a special Dick Tracy-like device that your server wears.

The concept is simple: you hit a button (refill, check please, etc) and your server gets a small vibration/shock and message like ‘check, table #8’. How great is that? Awesome, although possibly less so if you’re a server, I suppose.

Reminds me a little of the Burger King Subservient Chicken that was compelled to respond to commands from strangers (shown in redemption video here):

http://adage.com/article/news/burger-king-s-subservient-chicken-video/292953/

So Kallpod offers something for everyone:

– Diners get quicker, better service and for a select few, the opportunity to indulge hidden sadistic tendencies
– Operators convert more drink requests, and can turn tables more quickly
– Servers get the opportunity to see their guests more, and for a select few, the opportunity to indulge hidden masochistic tendencies.

Kidding aside, this is a palm-to-forehead great idea, well executed.

And the winning #1 observation at this year’s NRA is: SCHMACON!

Yes, Schmacon. It’s not a trend or even a fad, it’s the sort of cosmic occurrence that we unfortunately see all too infrequently in our short time here on this mortal coil.

My first minutes at NRA, at 9am, took me directly into the olfactory territory that the modest Schmacon booth was invisibly marking.

Schmacon is ‘smoked and cured glazed beef slices’ , but think of it as beef bacon, which by one account tastes like ‘crispy glazed pastrami’ (thanks Kevin Pang). By all accounts it is delicious, as demonstrated by the growing line for samples (of which I had two, for research purposes).

In addition, it is lower in calories, fat and sodium than traditional bacon. A bit ironically, it is not pork but neither is it kosher. But who are we to quibble about a technicality?

Schmacon is from Schmaltz Products in the Chicago area – a company with a funny name, but serious deli DNA.

Schmacon was a Food & Beverage 2014 award-winner. I took home Schmacon literature and a scratch ‘n sniff button to remind me of my experience. It’s mostly just for foodservice now, but you can taste it for yourself when it hits retail shelves later in the year.

———–

So that’s it for the Top 10. I do have some Honorable Mentions directly below:

Ice Beer. Basically a beer slurpee, complete with alcohol.

Nutella Poppers. Like little chocolate beignets – awesome (and proof that carbs are alive and well)

Neat meat replacements. Mixes made from nuts, beans, grains and other ingredients. Really tasty with great texture.

Poppies Dough. Terrific products (but I’d be lying if I didn’t say I had a little Seinfeld moment…)

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Top 10 NRA Show Observations (Part 1)

Posted on May 22, 2014 by davetuchler

Once again, I’ve taken one for the team and walked the floor at the National Restaurant Association show (yes, that NRA; sorry Mr. Nugent).

Show Floor – 2014 NRA – McCormick Place

In addition to things I reported on last year, there are some exciting new offerings.

Because there’s so much cool stuff, I’ve separated my Top 10 list into #6-10 (today’s post) and Top 5 (coming soon). So here we go.

[NOTE: as always, all links and photos are live: click on them to learn more]

Observation 10. Tea! Tea! More Tea! – as you may recall, tea was originally introduced at the 3000 B.C. NRA show (held outdoors in Wrigley Field).

The news this year is that every time you turned around you bumped into another tea purveyor trying to look old and mystical and yet hip at the same time. (sort of like Cher? Keith Richards?) Dozens of them. Perhaps it’s an echo effect from Starbucks’s Teavana venture. Or maybe they’ve been there all along and I’m just noticing. At any rate, hot or cold, flavored or straight, Oprah’s Chai Latte or not, prepare to be offered tea more and more often.

Observation 9. Greater Sales through Big Data. Have you heard this term before: ‘big data’? Of course you have. Not to be confused with ‘Satisfying Customers through Big Data‘ (more on that later). The restaurant business is increasingly swimming in POS data, and LOTS of companies are trying to use it to help restaurants pry every last dollar from your wallet.

Essentially it comes down to driving traffic, increasing loyalty, up-selling, and above all, getting you to buy more high-margin beverages. You out there, experimenting with different restaurants and learning about different food cultures? Well, STOP IT! Do you want to be just average, or do you want to be LOYAL? Yes, a restaurant-centric, not consumer-centric way of looking at things.

One loyalty company called Paytronix allows operators to send geofenced messages (it is what it sounds like), lets them pay for food with their phones, and more. Just when we thought our ability to actually communicate with each other couldn’t get any worse, there are now even more distractions available.

Paytronix also models guest behavior to project potential high-value customers and nurture them. Which of course sounds familiar, since the casinos have been doing it for years. Except you will never be comped drinks and a hotel room in a restaurant.

Observation 8. Responsible/Local Sourcing – Whether it’s produce, protein or grains, where food comes from is increasingly getting attention. However, it’s one thing to say it, quite another to do it on a meaningful scale. As Chipotle found out recently when they faced a shortage of ‘responsibly raised beef’, reducing your supply options means the margin for error shrinks as well.

Observation 7. Mobile to help back office. Could there be a less sexy title? Doubtful. The point here is rather than ‘mobile’ being a buzzword but not really ready for primetime, Mobile is starting to be leveraged in a way totally relevant to the frenetic nature of hospitality.

One startup, Partender, has developed a mobile app to get real-time inventory updates for the bar area. In the bar business, making money is a lot about tightly controlling inventory to keep service levels high, while making as much cash available for the important stuff: hiring trick bartenders like Tom Cruise.

Seriously, I saw this app at work and it is slick, intuitive, and totally appropriate for the use. When inventory is sitting on the shelves, it’s hard to input with a fixed desktop or laptop. Mobile is increasingly adding real value where it makes sense..

Observation 6. Plant-Based Dinnerware – compostable products have been around a while; this year there were more products that were plant-based. Specifically, companies like World Centric and Vegware offer tableware, utensils, napkins, hot/cold cups, to-go packages and more made from things like sugar cane, wheat straw, and corn. As volume increases, costs will come down and you’ll see more of this approach.

…But wait – – Now you can also get utensils that you can not only eat with, but that you can EAT. Foodie Spoon offers a selection of different serving shapes (spoons, cones, shapes) that you can put stuff on, and then eat the whole thing. Think of a mini-me taco.

So next time you’re at a party and a waiter offers you an elegant canapé on a spoon, amaze your friends and chomp the whole thing down. (But maybe check first.)

THAT’S IT FOR OBSERVATIONS 6-10. COMING SOON: THE TOP 5, which promises to be even more exciting.

In the meantime, a few bonus experiences from the show:

Silpat Girl

Espresso Cheese!

Stay tuned!

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Chicago IFT: Michael Jacobson, CSPI, the Food Babe and the curious impact of social media

Posted on February 11, 2014 by davetuchler

I had the privilege of attending a recent meeting of the Chicago Section IFT (Institute for Food Technologists). The guest speaker was Dr. Michael Jacobson, Executive Chairman of the Center for Science in the Public Interest (CSPI), who spoke about America’s progress in becoming a healthier-eating nation.

Dr. Michael Jacobson

Over the last 40 years or so, the CSPI has helped to reduce saturated fats, sodium and sugar in our food supply, among other things. While CSPI has often been a thorn in the side of Big Food in America, its efforts have resulted in meaningful change, usually brought about by government mandate (as opposed to corporate altruism). And Jacobson is no party-line activist – – he independently assesses the social benefits vs cost on any initiative, including things as controversial/PC as GMOs (he’s open-minded on this, in case you were wondering).

My key takeaway: regardless of the advances in food science, our chances of becoming a healthier nation lie in the hands (and mouths) of the consumer. The locus of influence in food and nutrition is becoming decidedly less institutional.

Food Scientists – heal!
Dr. Jacobson offered that while food scientists have culpability in having created most of the ‘Franken-foods’ that he reviles (“…a breakfast cereal that is nothing more than vitamin-enriched marshmallows…”), these scientists now play a key role in creating healthier alternatives that can be adopted by mainstream America.

Two things occurred to me during Dr. Jacobson’s presentation, illustrating both the weakness and strength of the consumer:

1) You can build it but they will not necessarily come. These healthier foods need to appeal to intended consumers for this to work, as was brought home by an attendee who commented that her school district’s new, more nutritional lunches, in addition to costing more, are also discarded much more often by the kids.

The problem is that consumers typically don’t want foods that make health claims. Putting ‘reduced sodium’ on a package, for example, is almost like saying ‘don’t buy me’.

So the conundrum is: how do you get people to eat healthier foods without them knowing it? Not easy.

2) According to Dr. Jacobson, the rise in social media has accelerated the process overall, despite consumers’ sometimes misguided crusades.
Consumers, who previously had no voice, are now collectively applying pressure through social media.

Just this week, the so-called ‘Food Babe’ helped prompt the removal of azodicarbonamide from Subway bread, through a petition that is at 78,000 signatures and counting. We have been unable to detect one shred of relevant credentials in the area of nutrition, food science, or science in general, about the Food Babe. She apparently has an undergraduate degree in computer science. But she cleans up well, is able to get access to influential people, and operates a successful blog. And guess what – she’s helping dictate your food options! Deal with it.

Vani Hari – the Food Babe

Earlier examples of removed ingredients include:
– Kraft Singles removing an artificial preservative (sorbic acid)
– General Mills’ Cheerios removing GMOs
And that’s just 2014.
– Other recent examples are here, including Starbucks, Gatorade, Kraft Mac and Cheese, and Chick-Fil-A. These are not inexpensive or simple changes to make, and speak to the power of the consumer.

Yes, the consumer is a fickle, capricious creature and quite often prone to acting immediately (or signing petitions) without checking facts. But overall, the ability to project a collective voice is starting to make a difference in the food landscape – – and on balance, it appears to be for the better.

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The Armchair MBA

Category Archives: Trade Shows

The Perfect Storm, Part 2. Fixing “Pale, Stale and Male”

How Do You Reinvigorate a Mature, Cyclical (but still really fun) Industry? Part 1: The Challenge

We Tested it On You, So It’s Probably OK for Your Pet

Top 5 SWEET Treats from the Sweets and Snacks Expo (Part 2)

5 Snacks to Watch – Sweets and Snacks Expo, Part 1

Top 5 Observations! – National Restaurant Show (Part 2)

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