Absolute Steve

Hostess Brands an American Icon facing hard times

Recently I read in the Wall Street Journal about the possible bankruptcy of Hostess Brands, an american icon who is facing hard times.

I was a bit crest fallen when I read about this privately held company who has been producing tasty treats for over 80 years.  From what I've read, Hostess has millions of dollars worth of debt they can't pay for such things as "llegacy pension and medical fees" guaranteed to the present and past workforce.  They also site the increased cost of doing business thanks to increases in raw materials and fuel costs.

What is the answer?  After taking a gander at their webpage I discovered Hostes Brands also offers a number of other Branded product lines beyond their core products.

A shift in tastes  

In my household we have never bought Wonder Bread much less white bread. We enjoy brown bread as in whole wheat and whole grain breads.  The store shelves are also filled with more and more of these types of mass market brown breads.  Specialty breads have also become much more popular as in Panera Bread styles of breads.  The taste buds of Americans has been slowly shifting away from tasteless white bread to more flavorful healthier bread types. 

Shifting tastes have also shifted in other sectors.  Not all that long ago, Americans were happy to wake up with a Folgers coffee in their collective coffee cups, but that has changed thanks to Starbucks who changed what good coffee is supposed to taste like.  Beer has also undergone a shift in tastes with half of all shelf space now dedicated to smaller Micro Brews verses the old mainstream standbys of yesteryear.

In my book, Hostess has to shift more of its emphasis to more healthful options such as their Natures Pride.  Maybe they can also begin creating a specialty bread line such a Penerra Style breads.   Hey they could also start a line of Craft Wheat Beer line.  Ok, now that's really stepping outside the bread box, but hey, it's worth a thought.  

So as I said before, I don't pretend to understand the financials but I do know a bit about the world of branding and Hostess is a great Brand in the world of ttasty treats.  My hope is Hostess Brands will get through this and they can be saved. 

Hostess conjures up great memories in my mind such as: eating hostess cupcakes at lunch time while out on the berry fields as a kid, getting a tiger tail in my lunch box durring middle school or trips to the Hostess outlet store on Saturday grocery days as a kid.  Lastly, lets not forget all those midnight munchie attacks only satisfied by a box of Ding Dongs. 

Here's to Hostess may you get things right, so you can be around for many more years to come.

What it takes to make a TV show Part 1

For my faithful readers I have not been very active with keeping up with this blog as of late and now you will have the reason.

On top of running my business Sound Image Solutions. Producing the Hog Radio show I have been involved with creating a TV Pilot which we plan to market to the networks by early spring before sweeps week.

Yep, I'm making a TV show well TV show Pilot. The difference is we get no money to create our 22 min show to be used to market the show to networks.  The reason for doing so is: We have no real track record so its best to create a show out of sweat equity for the purposes of selling it to network. 

If we were a known commodity we could most likely get away with a treatise but we aren't so a final product is needed. Thus I am hard at work creating a TV Show Pilot and am I ever loving it! 

What it takes to make a TV show is going to be an ongoing series of blogs which will take you week by week into the day to day of the inner workings of creating a TV show Pilot.

But a little back ground first.  How did I get involved with the making of a TV Pilot?  Great question and here is the short answer.

1. It started out as an idea for a book I began writing.

2. The need for a video to promote the book (books require marketing a video highlighting various points from the book is a great vehicle).

3. Call to a friend who is in Video Production.

4. The idea for a marketing video becomes the foundation for a TV Show.

5.  The idea is transferred into an outline

6. We bring in the first person to assist with the concept he likes it now there are 3 of us.

7. We meet for many months with the addition of 4th person.

8. We set dates and I go to work with Real script

9. A dozen or more rewrites the script is almost ready, then the team goes to work to refine and make it work.

10. We begin casting calls for co-host

11. This is where we are right now 12/09/11 so follow along as I lead you through the real world of creating a TV show Pilot.

Note I will give you details of show and how you can even participate by assisting us with funding, but that's for the next group of blogs.

Best,

Steve Johann

 

SABMiller wins support to buy Fosters Group Australia's largest brewer

SABMillerwins support to buy Fosters Group Australia's largest brewer according to the LA Times article.  According to what I have read it was a bit of a hard sell, but in the end it looks like it may go through as planned. If it does, SAB Miller will now have access to half of Australians beer distribution. 

Having spent time in Australia back in 1984, I can tell you at that time they had a law which restricted beer sellers from selling beer made in one province being sold in another.  Australia has 7 provinces or states. If things haven't changed then that's why Fosters will give SABMiller access to half of the Australian beer market.

So just why does a mega company like SAB Miller wish to buy out another rival beer company?  Aren't they satisfied with what they already own and manage? Nope they aren't, its called world dominance.  By owning half of the Ausi market SAB will have a chance to bring in their own products into the distribution chain to sell to current and potential beer drinkers. 

More selection more sales is one reason companies buy out their competitor. The other less obvious is access to their former competitors distribution channels, which in some cases are more valuable than the products being sold through them.

Distribution is a huge topic which requires another treatment, lets just say one of the biggest reasons why corps buy out other corps is because of the valuable infrastructure they gain not just the brand name everyone recognizes. Thats called being shrewd. 

Something we can all tip a cold one over.

Tang joins the ranks of Billion Dollar Brands

How do you become a billion dollar brand?  Short answer: A lot of work, luck and time. 

I just heard that Tang Breakfast Drink had just joined the ranks of the Billion Dollar Brands (a billion dollars worth of Tang sold each year.  Who else is a billion dollar brand?

Oreo Cookies

Trident Gum

MJB Coffee

These brands along with Tang are all Old Line Brands within the Food category.  None of these companies/brands were over night successes they have had millions of dollars worth of advertising poured into them to make them what they are today.  They have the backing of their parent company along with world wide distribution and support and manufacturing behind them.

If you want to become a billion dollar brand start with becoming a million dollar brand, better yet  maybe a $10,000 dollar brand which then becomes a $50,000 brand which becomes a $100,000 brand etc. until you reach the million dollar mark.  Once there you can quite possibly contact the billion dollar brand companies and seek their help as in buying you out or distributing your product for a piece of the action.

Kraft Foods is the parent company to the above mentioned brands Kraft isn't just a Mac and Cheese company but a conglomerate who owns numerous billion dollar brands along with million dollar brands. So the next time you take a stroll down the grocery isle stop and read some labels and discover just how many of your favorite brands are owned by Kraft.

Here's to Tang a favoite of mine as a kid.  They have reached the rank of the Billion Dollar Brands.

Old Brands never die they just get purchased by the big guy

If you're like me you enjoy old time brands like Hires Root-beer, W-D 40, Squirt and other old fashion names.  While doing research for a future book project I have come to see many of these time tested brand names, started out as independent companies.  But after decades of time they were eventually swallowed up by one of the giants who now control the manufacturing and distribution of these Old Time Brands.  As stated in the title, Old Brands never die they just get purchased by the big guy.

One of those big guys is Berkshire Hathaway owned and managed by Warren Buffet. His company owns and operates Yum who in turn operates A&W, KFC, Pizza Hut and many more Old Time Brands.  Speaking of WD-40 the company itself has become a brand manager buy purchasing such long standing well recognized brands as Lava Soap, 3 in One Oil and Carpet Fresh to name a few. 

So how does this relate to Branding? Branding is the ability to create a product which is considered a household name.  When you can create a product line which is a house hold name brand you have a winner on your hands.  Well, sort of.  Sometimes winners take a lot of cash to expand beyond a regional ornational position.  Many times a small to medium sized company can't manage on their own, so they opt to sell their brand to a company who has the means to carry the brand forward. It may also mean in the case of WD-40 going public to gain the operating capital required to not only expand theirbasic product line (WD-40) but also purchase other name brands (Lava, etc.) who needed help.

In the end in many cases, you have these Corprate Cconglomerates to thank for keeping your favorite brand on store shelves the world over.  If it weren't for thisapproach to maintaining Old Brands all you would see is private label and just a handful of company names at the retail outlets. 

In the end, I prefer choice as most consumers do, so I am relieved that my favorite brands I grew up with are still available thanks in part, to Corporate Cconglomerates.  Because we can all site various old brands we grew up with who aren't available anymore and that's kind of sad.   

Is it real? Or is it Memorex? Imitation verses the real thing!

For those of us who lived in the Tape Deck world there was great Ad campaign put out by Memorex Cassette Tapes.  It asked the question: Is it real or is it Memorex? The assumption was theirproduct was so good you couldn't tell the difference between a recorded session using Memeorex tapes or a live session.

It was a great campaign and I for one bought a lot of Memorex tapes to dupe off albums to cassette for car playing. 

So this brings me to the subject at hand. Companies selling imitation verses real.  Imitation Vanilla extract, imitation maple syrup, imitation butter, imitation fur, imitation leather shoes. 

For those not accustomed to the Real Thing you wouldn't know the imitation you are consuming was inferior would you?  Not until experienced the Real Thing.

Examples:  Fake Leather boots crack and can not be polished like real leather can.  These shoes are inferior and don't last worth a plug nickle.  They make your feet sweat and they just look fake.  On the other hand leather boots will outlast the soles in most cases.  They can be polished and kept in near to new condition for years to come and they don't make your feet sweat.

Fake vanilla tastes ok until you have tasted the real thing, especially when you apply it to French Toast or Egg Nog.  Try 100% pure Maple syrup sometime and then try to go back to Mrs Butterworth! You will never go back to flavored corn syrup again unless of course you can't aford the real thing like parents with a hoard of young kids. 

One company selling flavored Crisco stated in their ad:  "I can't tell that's it's not butter" well that individual never ate real butter!  The margarine makers sold the US public on how bad Butter was for you and the dairy farmers failed to fight back.  They stated such things as fat (butter) can cause  heart disease.  Never mind, their vegetable oil substitute had to be chemically changed to stay hard isn't good for you either.

Dairy farmers dropped the ball and should have ran an opposing Ad campaign stating the obvious "If it's good enough for God, it's good enough for you! Noting that Milk is natural and comes from cows and margarine is made in a chemical plant!

Another imitation which has been foisted upon the US public is the addition of Ethanol in our gasoline.  This non gas additive has been prov-en to reduce the gas mileage of the vehicles that burn it.  Why?  Because ethanol burns cooler than gasoline does thus you have a liquid that produces less effective combustion which in turn leads to poor mileage. 

So who foisted this upon us? The Giant Agri companies who just like the margarine makers pushed bad press about Gasoline and now we are stuck with 10 to 15 % addition of ethanol in our gas tanks.  I thought the idea was higher gas mileage vehicles but that's not the case here  instead it biz as usually as politicians were bought off by big Argi biz.

Branding is what makes these imitation such a part of our life.  Without the long term campaigns mounted by these companies designed to re-educate us we would have rejected them as substitutes and imitations! 

Don't let anyone tell you Advertising doesn't work!  Indeed branding is powerful and as a nation we are now faced with living with bad legislation, bad food and poor quality goods because we ignored the truth and bought a falsehood foisted upon us through well organized marketing campaigns.

Hey and I don't begrudge anyone for having done their work as good marketers that's their job. It's our job as consumers to stay on top of things and make sure we are allowed a choice if we don't we end up with what we now have.

P.S. do a web search on ethanol verses gasoline also do a word search using Germany and how it is dealing with this situation its eye opening.

Franchise brands you can count on

In the December 2010 edition of Entrepreneur Magazine they list off the top 10 Franchises.  In this list are many recognizable names we have all come to trust.

Who made the top 10 list?  Hampton Inns, McDonalds, Denny’s, Subway and Days Inn to name a few.  These names are icons of our culture which can be found in almost every community.  The article listed out a few reasons why each entity was doing so well.  But one of the glaring reasons I wish to note is the how these successful franchises own so much Brand share within the consumers mind.

Here is a tip, if you’re thinking of buying a franchise find a brand you can count on to be recognized the world over.  Because it’s hard to argue with a trusted brand.   Unless you have something unique to offer, it will be an uphill struggle to overcome these well known brands when you are establishing your own start up company.

The reason so many business people go with a name brand franchise, is because it’s a lot harder to start from scratch than to open up a Branded entity.  These companies have the system down pat and they will assist you with starting and running your own franchise.

Speaking of branded entities I noted in the same issue Mr. Clean is now into offering business owners a chance to open up a Mr. Clean Branded car wash.  Tide is offering branded Dry Cleaners (which my wife noted has nothing to do with dry cleaning) but the fact remains Tide is a proven Brand and will set your dry cleaner apart from a non name competitor.

Bottom line, in most cases established Branded franchises will do better than a Mom and Pop dinner.  In addition the wise business people go to work establishing as many outlets as possible - because power is found in numbers. Be it coffee stands or cafes or parts houses.  If you have what you believe is a successful system for turning profits and creating repeat clients, then find investors and have them come in with you to buy out competitors (other small mom and pops) and convert them into your own franchise 

That’s what Ray Kroc did.

Subway works to Brand Foot long

In an Associated Press news article posted at ABC 2 we find out Subway has been in process of rolling out the "footlong" slogan on its menu boards.  As part of their role out they have been working behind the scenes to Trademark the word “footlong”.  So far it Subway has not been granted the exclusive use of this word.  To date a number of parties including rival fast food companies have been working through the courts to prevent Subway from doing this.

This reminds me of how at one time (Legend would have it) the Harley-Davidson Motor Company tried to trademark the word Hog.  They couldn’t.  But they do own the rights to H.O.G. Harley Owners Group. But they don’t own the rights to the generic word Hog.  I did research on this when I went to name a radio show I produce called the Hog Radio show. 

In truth Subway may have a case if they work to trademark “Five dollar footlong”  if this be the case which it sound like it is, they are trade marking a specific phrase. But I suspect the generic word “footlong” will not be trademarked.  If it is imaginethe backlash?  What will the adult movie industry do, if they can no longer use the word “footlong” to describe one of its rising stars!

In the end trying to trademark a commonword or slogan which has been is use for decades shouldn’t be an acceptable practice.  But the mix of various words to form a specific sentence on the other hand should be allowed. I know a bit about such things I filed for and was awarded a Trademark for a radio station I once co-owned. TRI ROCK Your intelligent rock station.

One more thing needs to be considered when trade-marking a slogan.  How will hold up over time?  In the case of Subway, how long will the famous five dollar “footlong” stay five dollars?  Quite possibly in a couple years we will see a new slogan arrive price adjusted for inflation. “The Six Dollar Six Incher!

Now that’s food for thought.