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Forbes
a day ago
- Business
- Forbes
Tweaking Big Brands And Pleasing Consumers
As times and tastes change, many companies are rolling the dice and taking a chance on reformulation ... More of their classic products. From the Colosseum to Coca-Cola, Mona Lisa to Mondelez's billion-dollar brands, classics are classics, right? They're timeless things that, precisely because they don't change, are reliable and reassuring. Consumers love the safe harbor of something that they have loved for years. But can tweaking turn a big seller into a bigger one, even if it's done with some risk? It can backfire, per the effort to introduce the 'New Coke,' but it can also inject new life. At least in F&B lately, as times and tastes change, many companies are doing what they can to reinvigorate and remake classics, changing everything from size to packaging to that third rail of formula. And, surprise, surprise, sometimes it actually works as they remake and extend brands. Classics tend to have big sales, not necessarily big growth, which makes growing a household name very different from growing a startup. Still, the potential can be irresistible. Chips Ahoy!, for instance, might be a classic case of a classic experiencing change. Mondelez International said the cookie — which dates back to 1963 and is the second biggest seller behind Oreos (also their brand) — was known by 95% of consumers but only in about 30% of homes. The company saw that disparity as an opportunity. Rather than rest on its laurels, Mondelez rolled the dice and bet some of its chips on the classic cookie, adding chocolate chips with higher cacao and Madagascar vanilla extract, according to Food Dive, which called this 'the biggest update for the $1 billion brand in nearly a decade.' Others point to AI and technology in general, making it more attractive to reformulate even classic products with a 2.0 to keep up with changing tastes. In a blog about F&B, Siemens said, "Frequent product reformulation is necessary to meet evolving consumer preferences and regulatory changes.' Still, the stakes are higher when the brand and sales are bigger. While reinvigorating a household brand can sometimes call for reformulation, it may also mean ... More extension into new products, flavors, or offering health-conscious options. According to Siemens, maintaining a centralized database of ingredient specifications and past formulations lets R&D teams 'speed up reformulation' while ensuring compliance and consistency. However, messing with the recipe is only one thing on the menu of change at big brands. Mondelez, for instance, didn't just change ingredients but sought to extend the Chips Ahoy! brand into cakes and pastries, launching Baked Bites in addition to muffins. Along with minis, it rolled out bigger cookies, gluten-free cookies, and new flavors, such as chocolate caramel, red velvet, Reese's, and s'mores. Mondelez has also modified its marketing, shifting from TV to social media to win over Gen Z consumers. Chips Ahoy! ads have been showing up on TikTok, Twitch, and YouTube, as well as online gaming, the NCAA, and the Boys & Girls Club. As Food Dive puts it, 'extensions provide additional choices for consumers' who are finding the classic snack in less classic media. But isn't it risky to play with the marketing formula as well as the formula to make the product? Sure, it is, but with risk can come reward. So, what are the wages of change? For the half year leading up to March 29, 2025, Chips Ahoy! sales edged up 2.3%, while the biscuit category dropped 0.3%, according to Food Dive. The brand added 2 million homes, a sign that, sometimes, classics and change combine well. Coca-Cola has been trying new things, even if changing the flavor of Coca-Cola in 1985 for what it dubbed the 'New Coke,' designed to battle back against Pepsi's popularity, backfired. Instead of a 'New Coke' wave, it led to an uproar and battle to bring back the old Coke. After three months, Coca-Cola retreated to its old formula, with the byproduct of an even bigger love after a brief loss. 'If that is what the consumer wants, that is what we will give him,' Coca-Cola Bottling Co. of New York Chairman Charles Millard said at the time. Not all change is good — quickly after its release, Coca-Cola pulled "New Coke" from shelves after ... More consumer uproar. What do consumers want now? Well, that depends on the consumer, first of all. But companies keep chasing the consumer. Coca-Cola more recently rolled out Coca-Cola Spiced, which it discontinued after a little more than half a year, proof that change (or expansion and extension) doesn't always please consumers. Coca-Cola tweaked Coke Zero, adding Stevia, a sweetener from plants, after making changes in 2021 and in 2017, 'reformulating' it to taste more like traditional Coca-Cola. If Coca-Cola has been embracing change by including new products, PepsiCo has also been doing more than steady as it goes. Kadence International, a global market research firm, noted that classic brands are taking new tacks to hold prices down, touting smaller portions as healthier. Success tends to breed the status quo, while adversity is the mother of invention — and intervention. PepsiCo's fourth quarter 2024 net revenue, for instance, slipped 0.2%, according to Kadence, which said its Frito-Lay brand dipped 3%, Quaker Foods tumbled 6%, and its beverage segment fell by 3% as some soft drinks fell on harder times. According to Kadence, PepsiCo is 'pushing portion control and value packs — smaller products positioned as both health-friendly and cost-effective.' PepsiCo also spent $1.2 billion to buy Siete Foods with its grain-free, gluten-free snacks. 'PepsiCo markets its smaller snack packs as portion control options, framing them as a wellness move rather than a cost-cutting tactic,' according to Kadence. Smaller snack packs are on the rise as consumers shift their focus to health-friendly options that ... More provide portion control. Kadence also said Coca-Cola's mini-cans follow the less-is-more playbook, offering lower prices and smaller portions for health-conscious consumers. PepsiCo, with Frito-Lay, Quaker Foods, and beverages, is betting on single-serve and multipack options as healthier and budget-friendly, Kadence said. 'By rolling out smaller Lay's chip bags, Gatorade bottles, and Quaker oat packs, PepsiCo hopes to keep customers loyal while adjusting to changing eating habits,' according to Kadence. Meanwhile, Kadence said Nestlé is 'betting big on plant-based proteins and dairy alternatives," and McDonald's reformulated its menu to better suit the 'health-conscious" consumer. It's tougher to turn a big boat, but that doesn't mean you shouldn't at least adjust course now and then. While older consumers may remain loyal, big brands sometimes make changes to attract or even chase younger consumers. Practices, not products, can be the key to some young consumers' hearts and wallets. Gen Z consumers born between 1997 and 2012 and Gen Alpha born from 2010 to 2025, for instance, are 'heavily weighing corporate accountability,' according to Inc. magazine. Packaging will continue to play a pivotal role in what attracts and retains customers, whether it's ... More the design, manufacturing transparency, or environmental impact. Packaging is also a key component, according to a Menu Matters survey, which found that 32% of consumers are turned off by packaging that feels 'weird,' and 31% dislike a lack of information on a product's background or story. Coca-Cola has reportedly been rolling out shorter, lighter bottles to have less environmental impact and win over more consumers. Could there be a backlash from those who love the old bottles? It's tough on or toward the top of the pyramid, but that's still, really, a pretty good place to be.
Forbes
2 days ago
- Business
- Forbes
How One California Winery Is Reinventing Wine Clubs For Millennials And Gen Z
A growing number of younger consumers are opting out of traditional wine clubs in favor of more flexible, personalized membership models. The traditional wine club—long defined by quarterly shipments, fixed selections and rigid commitment structures—is showing signs of strain. Amid shifting consumer behavior and mounting pressure to adapt, some wineries are beginning to rethink a model that has remained largely unchanged for decades. In El Dorado County, California, a few hours north of Napa Valley, Edio Vineyards has introduced a new approach that challenges the standard template. The winery now offers a monthly, pay-as-you-go membership in which funds accumulate in a customer account that can be used at their discretion—for wine, cider, food or goods from an on-site bakery. Christine Noonan, co-owner and general manager, says the motivation to rethink the system emerged from personal experience. 'Being in the wine industry for a while now, I have felt and learned that the traditional wine club system is a little archaic,' says Noonan, via Zoom. 'It's dated. Consumers don't want to be forced to take certain wines and are more interested in customizing.' Traditional wine clubs continue to serve an aging demographic, with a 2024 study showing that the average member is 59 years old and more than 75% are over the age of 50. Nearly 50% are retired, and about 33% earn more than $400,000 annually. This entrenched model faces increasing pressure as younger consumers—particularly millennials and Gen Z—show limited interest in rigid, quarterly-shipment clubs and instead favor flexible, personalized options. According to the 2024 Silicon Valley Bank Direct-to-Consumer Wine Survey, 19% of wine club members canceled their memberships, reflecting widespread dissatisfaction with the conventional structure. Despite this, 40% of wineries do not track member churn, limiting their ability to address retention issues and respond to shifting expectations. Flexibility is at the center of the model. Members pay a monthly fee—starting at $39—which builds over time and never expires. The funds can be redeemed on a timeline that suits the customer. The structure is designed to resemble a digital wallet rather than a subscription. 'We don't like calling it a 'subscription club' because it is so much more than that,' Noonan says. 'The word 'subscription' can be overused, often not even providing you with that much. Subscriptions can also be shady, continuing to charge people without them even realizing it.' Instead, Edio calls it a 'member account.' The goal is to eliminate surprises and remove the pressure to purchase unwanted products. Members can choose when and how to engage. For some, that might mean a single annual visit to restock. For others, it could mean smaller, more frequent visits with the option to use funds on a bottle of cider and a cheese plate. The approach is rooted in a generational shift. With Millennials and Gen Z consumers driving most new membership sign ups, wineries are facing increased demand for personalization and transparency. 'With all of us owners being Millennials, we obviously think a lot about what we would like,' Noonan says. This shift hasn't been without challenges. Moving away from fixed shipments complicates forecasting and inventory management. 'For larger wine brands, it might be hard to know what wines will move,' she says. 'Will you have an inventory issue? Will you find you shouldn't be making a particular SKU now?' Edio's solution is to release wines first to members, adopting a first-come, first-served model. Once a product is gone, it's gone. Communication is key. 'We've had to focus a lot on communication,' Noonan says. 'We frequently reach out to encourage members to make an order once their funds build up.' The model also addresses a longstanding concern for wineries: financial predictability. Even with flexible redemption, Edio still receives a steady monthly income. 'That was my biggest challenge when trying to figure out a new club structure—we need the dependable income,' Noonan says. 'But the beauty of this club structure is that we still get it. It's just monthly now.' So far, the results appear promising. 'The cancellation rate is significantly lower than what our traditional club was, and we are seeing a better retention rate,' she says. 'Our customers love the customization as well as smaller monthly payments instead of larger quarterly charges.' Other wineries are watching the shift with interest, but many are not ready to overhaul their own models. At Romeo Vineyards and Cellars in Napa Valley, general manager Mary Simmons says tradition still holds value. Romeo does allow members to adjust or skip shipments, but the core structure remains fixed. She says the model offers benefits of its own. 'Our members value the consistency and quality of our traditional biannual shipments, which offer a thoughtfully curated selection without overwhelming them with frequent deliveries,' Simmons says. 'This approach allows us to maintain a meaningful connection with our members while ensuring they receive just the right amount of wine at well-timed intervals.' Still, she acknowledges external pressure. 'There is a growing industry trend toward more customizable memberships, particularly among younger wine enthusiasts who appreciate flexibility.' Wayfarer Vineyard, located on the Sonoma Coast, takes a hybrid approach. The winery offers three annual shipments and allows full customization, including alternate selections and access to library wines. 'Why set ourselves up for failure by forcing our members to take a set selection of wines or quit the membership?' says Cleo Pahlmeyer, proprietor and general manager. 'Our club membership receives top priority in all that we do.' For Wayfarer, club tiers are deliberately limited. 'Our entry-level tier membership receives 18 bottles per year and the majority of our bottlings are $100 or over,' Pahlmeyer says. Still, the winery has introduced a second label, WF2, at a lower price point in an effort to reach younger audiences. 'We are finding these wines, with their value proposition and affordable price point, are resonating with younger audiences,' Pahlmeyer says. 'We have clientele who only purchase our WF2 [pinot noir] wines at the moment—but we hope with time they'll engage with the rest of our portfolio.' That long-term vision—creating a lower barrier to entry and building loyalty over time—is shared by Edio. 'A pay-as-you-go structure could serve as a stepping stone for customers who may later transition into a more traditional membership,' Simmons says. Pahlmeyer echoes the importance of deepening customer relationships over time, regardless of the model. 'The goal is to provide a compelling value proposition that also drives deeper engagement with our wines,' she says.
Yahoo
3 days ago
- Business
- Yahoo
Ulta sees signs of improvement in Q1, but stays cautious
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. After a year of mixed performance, Ulta Beauty showed some positive momentum in the first quarter, with net sales up 4.5% to $2.8 billion. Comps in the quarter also increased 2.9% in the period, per a company press release. Ulta is seeing improvement in the performance of stores that were hit by competitive openings, like Sephora's Kohl's shop-in-shops, CEO Kecia Steelman said Thursday on a call with analysts. The retailer's stores recorded their first positive comps in more than a year. The executive added that Ulta's efforts to improve operations, including store cleanliness, appropriate staffing and fully stocked inventory, have helped as well. Total inventory was up more than 11% in the quarter, helping Ulta's in-stock positioning. Though Ulta executives expressed confidence in the beauty retailer's strategy and raised guidance slightly as a result, the company remains cautious about how consumer spending will shape up for the rest of the year. Steelman referenced beauty's recession-proof qualities, as well as shoppers' view of the category as a 'comfort and escape' from the stress of the current macro environment, as positives for Ulta. At the same time, though, she said customers are prioritizing value and warned that they may not follow through on their planned spending. 'While they tell us that they intend to prioritize beauty and wellness — that's what they say — but they could also do something very different depending on the environment,' Steelman said. 'So we're being really prudent.' CFO Paula Oyibo also stressed that while beauty is usually resilient, it's not 'immune to consumer pressure,' especially given the chaos and uncertainty caused by the Trump administration's tariff policies. 'One quarter doesn't make a trend,' Oyibo said as an explanation for why Ulta's guidance remains relatively conservative. Nevertheless, Ulta is seeing some green shoots from its operational initiatives as well. During the quarter, the retailer invested in higher staffing in stores, added more newness to stores and tweaked its marketing approach. In particular, Ulta cut back on less productive sales offers and made more distinct calls to action in communicating with shoppers. The retailer is on track to launch its marketplace in the second half of the year and will open its first stores in Mexico City, Kuwait City and the United Arab Emirates' Dubai later this year. Ulta said last year it planned to expand to Mexico. Less tangibly, Steelman also noted that Ulta is making progress on 'reenergizing our culture,' which she described as a competitive advantage. Steelman took over as CEO for Dave Kimbell in January and has since announced several leadership changes, including naming a chief merchandising and digital officer last month. This quarter marks the 'first time in a while' that Ulta drove share across the category, according to Steelman. The retailer lost share in beauty for the first time last year. 'It seems like everything the team is doing is showing signs of effectiveness, and in a fairly quick manner,' Piper Sandler analysts led by Korinne Wolfmeyer said in an analyst note. 'This undoubtedly builds on our optimism around the [long-term] opportunity here, but we still want to be prudent around competition, market volatility, and margin risks that could come.' Recommended Reading The Weekly Closeout: Coty to cut 700 jobs, Adidas sports double-digit growth Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
6 days ago
- Business
- Bloomberg
Making the Case to Raise US Alcohol Taxes
Good morning, it's Fiona in New Americans probably don't realize they pay an alcohol tax on every bottle of wine they buy and every beer they have at a bar. Some people argue these taxes should be increased. More on that in a moment, but first ... Arthur Robin Williams, an associate professor of clinical psychiatry at Columbia University, says we're entering a new era when it comes to alcohol. Consumers are cutting back, quitting entirely and exploring alternatives, and both cancer warnings and higher taxes could accelerate the change.
CNA
6 days ago
- Business
- CNA
Chinese consumers travel and spend less, LVMH deupty CEO says
PARIS :French luxury group LVMH has noticed Chinese consumers have been travelling and spending less over the past three months, Deputy CEO Stephane Bianchi said on Wednesday. Demand in the United States, however, showed some first signs of a rebound, but as long as trade tensions with the European Union over threatened tariffs are not being eased, the climate will remain difficult, he added.
