PepsiCo Inc.'s Frito-Lay unit uses online video games and concerts to disguise marketing campaigns for its Doritos chips aimed at teenagers, consumer groups said in a complaint to U.S. regulators.
The Federal Trade Commission should investigate PepsiCo and Frito-Lay for deceptive and unfair digital marketing practices, including collecting teens' personal information "without meaningful notice and consent," according to the complaint filed today by the Washington-based Center for Digital Democracy, Consumer Watchdog and two other groups.
"Frito-Lay has infiltrated the lives of teens by developing covert advertising campaigns centered on things teens love," including video games and music, according to the complaint. The digital campaign influences teens to buy Doritos, a salty snack high in calories and fat that contributes to adolescent obesity, the complaint alleges.
PepsiCo is the world's largest snack maker, controlling almost two-thirds of the U.S. salty snacks market. The company's Frito-Lay North America unit, with brands including Doritos, Cheetos and Lay's potato chips, accounted for $13.4 billion of the company's $57.8 billion in global sales last year.
"We haven't received a copy of the filing or any documents from the organizations," Aurora Gonzalez, a Frito-Lay spokeswoman, said in an e-mail last night before the complaint was filed. "Without seeing the documents first hand, I wouldn't want to conjecture on the allegations." Ms. Gonzalez didn't immediately return calls and e-mails today.
The FTC has received the complaint and will "review it carefully," Elizabeth Lordan, an agency spokeswoman, said in an e-mail. The complaint is the first filed to the FTC about digital marketing to teens, Ms. Lordan said.
Food companies that once relied primarily on television to reach children are now using a variety of digital media in their marketing campaigns, Mary Story, a professor specializing in child and adolescent nutrition at the University of Minnesota, said in an interview.
"It's a whole new frontier that parents are not really aware of, and there's just not regulation at all about these new types of marketing," said Story, who isn't involved in the complaint. Story directs the Robert Wood Johnson Foundation Healthy Eating Research Program, which has provided grant funding to the Center for Digital Democracy. Within the food industry, PepsiCo stands out for "aggressively using the most sophisticated tools to target teens in far-reaching ways," Jeff Chester, executive director of the Center for Digital Democracy, said in an interview.
"Pepsi has purposely created immersive environments that are designed to influence the attitudes and behaviors of young people, including at the subconscious level," he said. "I don't think anyone has come close to what Pepsi has done."
The "immersive" Doritos marketing campaigns have included Hotel 626 and Asylum 626, online interactive games that provide a horror-film experience, and a website featuring video of pop singer Rihanna, according to the complaint. Such campaigns conceal the nature of the marketing and are deceptive, the complaint says.
President Barack Obama's administration is trying to reduce a child obesity rate that has almost tripled since 1980 to 17 percent, or 12.5 million Americans, William Dietz, the Centers for Disease Control and Prevention's director of nutrition and obesity programs, said last week at a joint hearing of two House Energy and Commerce subcommittees. A working group of officials from the FTC, CDC and two other agencies in April proposed voluntary guidelines for advertising to children for food with added sugars, salt and saturated fat.
The regulators, facing resistance from food companies including Nestle SA and Kellogg Co., are now scaling back those guidelines to address concerns raised by industry and lawmakers, David Vladeck, director of the FTC's Consumer Protection Bureau, said at last week's hearing.
The final guidelines will recommend restricting food ads targeted at children younger than 12, rather than anyone under age 18 as originally proposed, Mr. Vladeck said. "The FTC still has a 20th-century mindset when it comes to protecting consumers in today's digital environment," Mr. Chester said. "They have been lagging and foot-dragging, and consumers, especially teens, are being placed at risk."
The other two groups filing the complaint are Consumer Action, a nonprofit advocacy group founded in 1971, and The Praxis Project, a Washington-based nonprofit that seeks to promote community health.
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Pepsi has recently been called out on the allegations of deceptive marketing to teens for their promotion of Doritos. In their new marketing scheme Pepsi has used interactive games and has apparently collected personal information on teens without their consent. This has finally led to an investigation by the Federal Trade Commission. "It's a whole new frontier that parents are not really aware of, and there's just not regulation at all about these new types of marketing," said Story a professor of nutrition. Obama has recently tried to lower obesity in young Americans and this marketing technique is going against the cause.
Sunday, October 23, 2011
McDonalds introduces chicken Mcbites
McDonald's is introducing "Chicken McBites" nationally in early 2012, our sibling publication Crain's Chicago Business reported today.
The move is not only the biggest alteration to the fast food giant's U.S. menu in 2012, it also appears to be part of a plan to try and steal share from fast-food chains like Kentucky Fried Chicken, Popeye's and Boston market, based on documents obtained by Ad Age.
A memo about the soon-to-be-widely-available boxes of tiny chicken morsels that was distributed by OPNAD makes it clear that McDonald's vision is "to be the restaurant that consumers choose first for chicken anytime, anywhere." (OPNAD is not a sinister cabal out of a Bond film, but rather the U.S. cooperative of McDonald's Owner/Operators known as the Operator's National Advertising Fund, which pools its resources to buy national television advertising).
The memo goes on to say January 2012 marks the start of "phase 2 of the chicken strategy toward becoming a credible destination for chicken" and that McDonald's is aiming to put an end to the "switching behavior consumers are displaying within the category." That is to say, McDonald's wants people to eat only its chicken all the time.
McDonald's wouldn't comment on the memo, but here's what you need to know about the McBites:
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McDonalds recently announced an addition to their menus all over the country. They announced new chicken Mcbites which are smaller pieces of popcorn chicken. The article recognizes that this move will most likely steal share from fast food markets such as Kentucky Fried Chicken and Popeyes. The product is supposedly going to be introduced in January of 2012 and has received good reviews in locations where the product has been tested. Finally, McDonalds is hoping that this new innovation will take over the fast food chicken market for years to come.
The move is not only the biggest alteration to the fast food giant's U.S. menu in 2012, it also appears to be part of a plan to try and steal share from fast-food chains like Kentucky Fried Chicken, Popeye's and Boston market, based on documents obtained by Ad Age.
A memo about the soon-to-be-widely-available boxes of tiny chicken morsels that was distributed by OPNAD makes it clear that McDonald's vision is "to be the restaurant that consumers choose first for chicken anytime, anywhere." (OPNAD is not a sinister cabal out of a Bond film, but rather the U.S. cooperative of McDonald's Owner/Operators known as the Operator's National Advertising Fund, which pools its resources to buy national television advertising).
The memo goes on to say January 2012 marks the start of "phase 2 of the chicken strategy toward becoming a credible destination for chicken" and that McDonald's is aiming to put an end to the "switching behavior consumers are displaying within the category." That is to say, McDonald's wants people to eat only its chicken all the time.
McDonald's wouldn't comment on the memo, but here's what you need to know about the McBites:
- They are targeted at "multicultural adults 18-49"
- They are expected to roll out across restaurants around the country for three months next year.
- They have been in testing in Detroit and Phoenix and were apparently well-received and deemed a good value for money
- They are all breast meat and golden brown color with a "light delicate crispness"
- They have a "craveable, home-style flavor profile" made with buttermilk, onion, garlic sugar and salt.
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McDonalds recently announced an addition to their menus all over the country. They announced new chicken Mcbites which are smaller pieces of popcorn chicken. The article recognizes that this move will most likely steal share from fast food markets such as Kentucky Fried Chicken and Popeyes. The product is supposedly going to be introduced in January of 2012 and has received good reviews in locations where the product has been tested. Finally, McDonalds is hoping that this new innovation will take over the fast food chicken market for years to come.
Thursday, October 20, 2011
starbucks goes blonde
In a move to capture a bigger share of the U.S. coffee market, Starbucks today announced the latest product in its coffee line: a "blonde" roast, its lightest offering yet.
Annie Young-Scrivner, global CMO, said at a Chicago press conference that 40% of the 130 million coffee drinkers in the U.S. prefer a lighter-roast coffee. She added that the blonde-roast will appeal to existing Starbucks customers, as many of Starbucks' customers have complained about its coffee being "too heavy," as well as to non-Starbucks customers who generally prefer lighter blends.
McDonald's and Dunkin' Donuts offer milder brews and have in recent years gotten into espresso-based drinks.
Ms. Young Scrivner said the launch is a bigger investment than Via, its instant-coffee offering it announced in 2009. The marketing, which will coincide with blonde's January launch, will be a "360-degree" approach and will include TV, digital and social media.
The blonde roast will be available in Starbucks brick-and-mortar locations as well as in the grocery aisle -- the first simultaneous launch for both retail and grocery -- and will be available in whole bean, roast and ground, as well as in Via and K-cups. Blonde will come in two varieties: Veranda and Willow.
The chain also today announced an overhaul in its packaging, which will be organized by roast: blonde, medium (its Pike Place variety) roast and dark roast (such as its Verona offering). Ms. Young-Scrivner said the move "will allow our customers to pick out coffee much more easily in the grocery aisle." She added that for existing products, the new packaging could appear as early as November.
That move is not unlike the chain's Seattle's Best brand's overhaul of its line last year called the Levels system, with varieties simply named one through five that vary in flavor from mild to bold.
Starbucks had been testing a lighter roast for the last year, and went through about 80 different iterations. The coffee giant spent nearly 20 years developing Via.
The move into lighter blends is part of a continuing expansion. So far this year, Starbucks has introduced petite desserts, an expansion of its food line with "bistro boxes," gotten into the single-serve market with K-Cups, and unveiled a massive brand relaunch as part of its 40th anniversary, which included an updated logo that dropped the green ring with the text "Starbucks Coffee" and more prominently displayed its famed siren.
Earlier this year Starbucks surpassed Burger King and Wendy's to become the number 3 chain in the U.S. by sales, trailing only McDonald's and Subway. In 2010, it posted $9.07 billion in domestic restaurant sales last year, up 8.7% from 2009.
The chain's growth has come despite limited ad spending. Although Starbucks last year doubled its measured media spending, according to Kantar, it still only spent $94.4 million. Compare that to the measured-media spending of McDonald's, perennially the top restaurant chain in U.S. sales, spent about $887.8 million on U.S. measured media spending in 2010, up from $872.8 million in 2010.
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To summarize this article, Starbucks has taken a new approach in selling their coffee products. After a recent survey and a lot of customer reviews the company has decided to make their coffee a lighter roast. This idea takes after that of McDonalds and Dunkin Donuts as they both brew very light coffee that have built up an excellent fan base. The CMO of Starbucks also went on to say that this is just part of the companies 360 degree new approach. It will include TV, digital and social media as well. Starbucks hopes that this move will steal some of Dunkin Donuts and Mcdonalds customers, who are their biggest competitors.
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