March, 1999

From the Editor

Building Brands

It is easy for members of an industry to delude themselves. With our generally hectic lifestyles in late 20th century America, it is pleasing for the food industry to think that consumers are so busy they simply don’t have time to shop and cook.

The implication is that everyone would just be thrilled to shop and cook – if only they weren’t so busy.

It is like the comfort food we promote in our deli; just to say it is somehow reassuring. Unfortunately there is precious little evidence that it is true.

The old model of shopping and cooking has fallen by the wayside, not because of a shortage of time, but because of an active choice by consumers. In our more affluent society, families are choosing to spend that money to avoid the drudgery of a shopping trip, of cooking and of cleaning up afterwards.

For most people, this means a lot more fast food; for those more affluent, casual dining establishments.

So what does this all mean for supermarkets? As incomes rise, people seem willing to spend more money on food and the challenge for supermarkets in general and deli departments in particular is how to position themselves to capitalize on the tsunami of interest in food.

Forbes magazine just put out an issue highlighting celebrities that are successfully building business franchises around a name. Most of those highlighted are the usual suspects – big name entertainers and athletes like Jerry Seinfeld, Michael Jordan, etc. But also prominently listed are those whom Forbes identifies as the “Dough Boys” – celebrity chefs building businesses around their image, reputation and activities. We’re talking about people such as Emeril Lagasse, television’s hottest chef. His show on the Food Network, Emeril Live, does for cooking shows what Garth Brooks did for country music – mainstreams it so that one doesn’t have to be an aficionado to enjoy it.

And multitudes are reacting: Lagasse has his own spice line – it sold 1500 units in two minutes on QVC. His most recent cookbook was on the New York best seller list in 1998. He also has five restaurants – three in New Orleans, one each in high tourist locations in Las Vegas and Orlando.

This is all just beginning. But the point is that Lagasse is developing a brand, and it is in brand development that most supermarket delis are very weak. Start with the name. The typical supermarket deli is identified by a sign saying “deli”, indistinguishable from other supermarkets with the exact same sign.

Then the food is not generally promoted as having been made by anyone in particular or made in any kind of style. It is rare for stores to sell a line of seasonings or cookbooks. In fact, most deli food is rather nondescript.

This doesn’t mean it is bad, it just means that it is network – and this is the age of cable.

The big TV networks have long battled to attract large undifferentiated audiences by running a kind of race for the lowest common denominator – what is the show that everyone will tolerate?

Cable, with so many more channels, fights for the audience in a different way: it offers lots of specific programming to attract only those interested in that subject. Perhaps it is sports, or old movies, or comedy or news. In any case, it is something specific, and each cable channel trades off some mass for a committed audience.

It strikes me that today’s kind of undifferentiated delis are in desperate need of overhaul to correspond with the zeitgeist. Serving some mediocre Chinese, with some mediocre Italian, with some mediocre Mexican is simply not a recipe for success.

In an age where chefs are celebrities, supermarket chains with multiple units have an ability to do in a moment what Emeril Lagasse or Wolfgang Puck spend a lifetime trying to do: build a business.

First, retailers must determine what a given deli will do uniquely and well. A chain may well need two, three or five concepts, depending on how diverse a community it serves and how different in size and layout are the stores. One concept or 10, though, the steps to building the business are clear once the concept is determined:

Brand it with distinctive name, signage and packaging. Sell both prepared foods under this brand and private label ingredients, such as spices and sauces. Produce the stuff at retail, in a commissary or partner with manufacturers of distinctive products.

Chefs, under the auspices of the brand, should offer cooking classes. And full professional cookbooks should be published with signature recipes.

The goal is to build brand equity by differentiating the deli in your store from someone else’s deli.

For too long, delis have been seen as support departments, there to serve the clientele attracted by the grocery offerings. Today, it makes more sense to turn the equation around. Use a great differentiated, branded deli to attract customers and sell them some groceries, as well. Of course, one day we might wonder why we care so much about selling those low-profit grocery items, when we can sell branded fresh food at margins to make a grocery manager green with envy.  DB