October 15, 2007
June 4, 2007
“It’s a new way to drink beer at home, so potentially it’s the biggest thing to come along since somebody put beer in a bottle,” says analyst David Williams, commenting on Heineken’s DraughtKeg, in a Forbes article by Stephanie Fitch (10/15/07). It’s certainly been the biggest thing for Heineken in a good long while. “Heineken is on pace to sell 10 million worldwide this year,” according to Information Resources. It took engineer Harold Vlooswijkand a team of about a dozen others about seven years to come up with this innovative minikeg for the home. “I see it in my sleep,” says Harold.
Holding five litres (about 14 bottles), the design involves putting an aerosol canister of C02 inside the keg. The design is “simple and cheap enough to toss into the recycle bin.” So far, that’s good enough to “represent perhaps $300 million in revenue after the impact of lost sales from bottles and cans.” It’s not that the beer is different (Heineken says it still uses the same recipe it perfected for export in the 1880s). It’s that beer from a keg forms a thicker head of bubbles that protects its flavor from the elements. While it’s possible to put a head on beer from a bottle, those bubbles are larger in diameter and disappear faster.
Priced at $20, the draught taste costs consumers about an extra penny per ounce. Retailers, meanwhile “can pocket 35 percent to 40 percent gross margins on them — 17 to 20 percentage points better than … a six-pack.” For Heinkeken, the result is not only more sales, but also an enhanced image. “Innovation in our industry is not usually a key driver for growth,” says Heineken ceo Jean-Francois van Boxmeer. Admitting that the DraughtKeg still has some design flaws, he adds: “It’s not perfect, but the draught keg reinforces the premiumness, the wittiness and the innovative character of the Heineken brand.” Heineken expects to sell 1.4 million of the kegs in the U.S. alone next year. ~ Tim Manners, editor
March 12, 2007
Chances are you’ve never heard of Nottingham-Spirk, the industrial-design firm whose creations include the Crest SpinBrush, the Dirt Devil vacuum cleaner and the ever-popular Sherwin-Williams twist-and-pour paint can, reports Anne Fischer in Fortune (6/11/07). In fact, over the past 30 years, Nottingham-Spirk has “patented 464 products, with combined sales of more than $30 billion.” What’s their secret? Craig Saunders, who has been with the firm for 24 years, “says he’s gotten the most useful insights from focus groups by asking them what makes them mad.” That’s how Nottingham-Spirk came up with the SwifferVac, for instance. People said they “loved the Swiffer mop” but were frustrated by its inability to clean up anything other than dust.
“So if you spilled cereal or dry dog food or jellybeans on the floor you had to go get out the vacuum cleaner,” says Craig. “People really hated that.” Another favorite research technique is simply to walk the aisles at Wal-Mart, and, as co-founder John Spirk says, “looking for what’s not there.” That’s how Nottingham-Spirk came up with the idea for the blockbuster Crest SpinBrush — just noticing how expensive electric toothbrushes were, how they were locked up in cases, and thinking how great it would be if you could just grab one for five bucks from the regular old, manual toothbrush rack and toss it in your shopping cart.
Nottingham-Spirk vets such ideas in meetings of 8-10 designers, who rate them as either “wow”, “nice” or “who cares?” You need “wows” all around to get to the next stage. That’s another Nottingham-Spirk hallmark — it actually engineers and markets what it dreams up. “Coming up with a great concept is wonderful, but it has to be workable,” says Craig. “We don’t necessarily set out to win design awards. Our goal is to help our clients make money.” It’s a mission that began in the firm’s earliest days, when it helped a company called Rotadyne realize that its rotation-molding machinery could be making toys instead of bedpans. At the time, Rotadyne had revenues of $1 million. As of 2005, the company, now called Little Tikes, makers of the Cozy Coupe, “reported revenues of $250 million.” ~ Tim Manners, editor
February 23, 2007
Tesco, Timberland and Stonyfield Farm are leading the way toward eco-labeling on the products they sell, reports Amy Cortese in The New York Times (3/7/07). Tesco ceo Sir Terry Leahy “has proposed labeling products to reflect their carbon footprint, starting with tens of thousands of Tesco-branded food and clothing products” (more information here). Timberland ceo Jeffrey B. Swartz is championing a “nutrition label” for its footwear, “detailing the energy used in making the shoes, the portion that is renewable, and the factory’s labor record.”
Gary Hirschberg, ceo of Stonyfield Farm, “is expected to announce that Climate Counts, a nonprofit group it helped found, will independently evaluate leading consumer-products companies’ efforts to manage their climate effect. The idea is to create a metric that will allow consumers to compare, say, McDonald’s and Burger King.” That’s not easily done, of course. “We found that our supply chain goes farther than we imagined,” says Jeffrey Swartz of Timberland. “The vast majority of our carbon footprint comes before we even make the shoe.”
Indeed, "more than half of the energy used (and greenhouse gases generated) in making a pair of shoes comes from processing and producing the raw materials. The next-biggest energy drain is the retail environment … followed by factory operations and, finally, transportation" Timberland actually makes "hundreds of calculations" of its "footprint" and has developed "green index tags" that evaluate each item across "a range of issues." Consumers do say that they’d sooner buy "socially responsible products," but questions remains whether eco-labels will change consumer behavior "any more than nutrition labels stop people from eating junk food." ~ Tim Manners, editor
Interest in “all things pink” and a perception that rose wine is “young and extroverted” is propelling a growing market for nonvintage rose champagne, reports Sarah Nassauer in The Wall Street Journal (2/15/07). This trend, which “most producers believe … is a structure shift, not just a trend” — a new category, in fact — is being promoted most notably by Moet & Chandon, which made a decision that pink champagne made sense about six years ago. Part of their thinking was pure economics. It’s less expensive to produce a bottle of nonvintage rose champagne than nonvintage white champagne (nonvintage wines mix “grapes from different harvests”). The margins on the pink stuff are also better, with bottles of nonvintage rose priced “15 percent to 20 percent higher than a bottle of nonvintage white champagne.”
That’s not to say the move into rose champagne wasn’t risky for Moet & Chandon. Their decision meant “transferring valuable grapes to rose production years before any actual sales while the bottles aged.” They couldn’t just plant more grapes because of “a 1927 French law, aimed at maintaining quality, that fixed France’s Champagne region at about 84,000 acres, most of which is already planted.” But Moet figured if they got the marketing right, they should have a hit on their hands. The marketing began with “rose-petal covered Valentine’s Day ads in glossy magazines and special packaging in the late 1990s.” But the real focus has been the fashion industry. For three years running, Moet & Chandon has hosted the Moet Rose Lounge in New York’s Bryant Park during fashion week.
The events cost “hundreds of thousands of dollars” but when Paris Sheraton‘s publicist calls and asks for a VIP pass, Moet assumes it’s getting the right kind of buzz. Next up are Moet Rose "picnic bags, complete with magnums of Rose Imperial. Only 10 will be available for sale in the U.S., priced at $1,500 apiece." Other champagne houses balk at that kind of marketing, but Moet brand manager Franklin D. Isacson says it’s what’s required: "They’re so jaded," he says of the fashion crowd, "We have to do something to stand out." So far, so good: "For decades, rose’s share of the French champagne export market hovered around two percent to three percent. But since 2000, rose champagne’s share has climbed to more than seven percent, with exports soaring 37 percent in the first nine months of 2006," versus a year ago. ~ Tim Manners, editor