The economy's new threat: Pantry deloading?

I don't normally listen to earnings calls by public companies, but I found myself tuning in to Pepsi's call last night for some reason.  Their sales are tanking, and their stock was rewarded with a healthy beating this morning as a result. But for all the depressing news, I learned something interesting - it's a phenomenon called "pantry deloading," and Pepsi execs blamed it in part for their slowing sales.

Simply put, in good times, we tend to over-shop. If something's on sale, we buy lots of it and store what we can (assuming it's not perishable, of course). Fill-up trips are bigger than they need to be, as each of us basically builds up a small inventory of frequently-used or sale-priced items.

Fast forward to today, where more people are trying to stretch out every last dollar. Instead of filling up (or over-filling), we're emptying out those stores of sale-priced items.  So instead of sticking another 12-pack of Mt. Dew in our cabinets, we're dusting off the old 12-packs that we so cleverly purchased and stored some time last year.  And when it comes time to replenish the dwindling stocks, some consumers will go back to the name-brand stuff, but others might be tempted to try cheaper private-label variants from their local supermarket or discount stores.  Still others will simply decide to do without altogether.

So there you have it: pantry deloading.  Any interesting phenomenon with real-world economic effects and a funny-sounding name :)

Tags: pantry deloading, shopping, retail, business

America at Home

Ordinary People Provide the Best Glimpse into Everyday Life

If you’ve ever seen the book series, A Day in the Life or America 24/7 (photos from a single, day across America) you get an amazingly broad and deep sense of how people spend their days. Now, editor and photographer Rick Smolen has published a book of photographs of Americans in their homes – exploring everyday life, domesticity, and how people set up and enjoy their private spaces. Smolen believes readers get a glimpse into someone’s life or reminders of someone they know.

America at Home is a beautiful book, and, to my mind, the kind of social documentary that will eventually be a great historical record. At the same time, it’s an amazing document full of data about how people live, their relationship to the material world, the variety of ways in which we consume, construct domesticity, leisure, and community. Ikea, one of the book’s sponsors, is both sincere and savvy about what the book provides for the company and Americans in general. As they describe it,

IKEA is dedicated to HOME. We reached out and asked questions. And what we learned is 94% of polled Americans said that Home is the Most Important Place in the World. This finding is at the heart of the IKEA ‘HOME IS THE MOST IMPORTANT PLACE IN THE WORLD’ campaign that includes a compelling documentary film, a landmark study, and the America at Home photo-journalist book of everyday Americans taken by the world’s top photographers.

The interesting thing about this campaign is that everyone from market researchers to ordinary folks can get engaged in questions about how others live. Besides providing a glimpse beyond the living room window, the book situates the information in an easily accessible context about our world. Each set of images is tied to relevant statistics. The juxtaposition of fact and home image gives the exact type of context that marketers are always looking to find (did you know the average house costs ten times more than it did in 1970? Sure you did. But look what a variety of homes it buys!) This general information is then deepened with the inclusion of essays by Amy Tan and David Pope and an introduction by Matt Groening of The Simpson’s fame.

Finally, while I don’t want to reduce the book to fodder for the retail machine, it’s worth considering how Ikea and others might use it to see what people want and how they use products and spaces in ways other than they were intended for. It embodies the “active listening” that the Advertising Research Foundation has been pushing in its recent workshops, but does so in a way that is interesting, informing and entertaining all at once.

For more than you ever wanted to know about America At Home, there’s a terrific podcast interview with editor Rick Smolen on the IT conversations website.

Natural -- As Nature or Marketers Intended It?

Anyone who buys from the organic end of the food aisle knows that labels are designed to be confusing, misleading, and downright annoying. In my local supermarket there are now four or five different kinds of eggs in the "natural" refrigerator case. I can get cage free, which means the chickens live well. I can get organic, which means they ate okay and now I will, too. There are also High Omega 3 and Certified Humane options. Or I can get cage free and organic eggs, which means I'm now paying 40 cents more per dozen than I would be if I just bought the ones that say "natural," which, apparently, means nothing except a 40 cent savings and a few worries about just how safe and/or ethically farmed these eggs might really be. My supermarket, like many, also has its own product line that prominently features the word "nature" -- but I'm still sticking to the Newman's Own Oreo-like cookies rather than their brand because I can tell what "organic" actually means.

Unfortunately, "natural" stopped meaning "safely made in nature" a long time before the USDA got in on the act and started certifying all sorts of things as "organic." Indeed, recent lawsuits in California concerning "natural" cosmetics that were found to contain known carcinogenic chemicals have prompted the FDA to take interest. Perhaps it's too late to rescue the word from its confusing mass of associations -- although a small bakery in Colorado, Rudi's Organic, has made some good noise with its clever commercials parodying the supermarket "all natural" breads that contact such healthy-sounding ingredients as "azodicarbonamide."

In his wonderful book, Appetite for Change, Warren Belasco charts the whole foods movement of the 1960s and 70s (and this was before that term -- whole foods -- was co-opted by a giant supermarket chain in fancy green clothing), when the move back to nature was a collective response to the industrial food system. Brands we now take for granted, like Celestial Seasonings Tea, were once small, alternatives to the big corporate food-in-a-box. But then home made granola morphed into chocolate coated breakfast bars and...well, you know the rest of that story. Belasco documents what feels like an inevitable hegemony of big business and money making over creating alternatives. What's unfortunate, of course, is that more and more people want natural and organic products -- and big companies often do have the potential to generate and support these items.

Burt's Bees is a brand that still feels like something out of the whole foods movement of the 60s. There's the great story behind the company -- Roxanne Quimby "finds" her way to Maine, befriends Burt Shavitz, an older man who's a beekeeper, starts a small business that they promise to keep to ethical natural standards -- and then sells out to a big conglomerate for millions while Burt got a small settlement and is rumored to be living back in his original turkey coop. Let's remember that she sold not just any conglomerate either, but Clorox, which sounds like the home planet of bad household chemicals.

That could have been the end of the story, but Clorox is actually working hard to prove that it's products can be as natural as any small-time competitor's. They're also working to ensure the integrity of many of Burt's original products like lip balm, sunscreen, and baby lotion (a recent profile shows the CEO John Replogle eating avocado butter face cream to prove it has nothing "unnatural" in it), but as the line expands into new territory, one wonders how soon it will be like other niche product lines that lose their uniqueness as they widen their appeal.

One way that "green" companies try to prevent this dilution is by developing industry-wide certification standards. Organic florists are a good example with Organic Bouquets, at the forefront creating and enforcing standards, developing certifications and selling and listing a variety of types of flower certifications. Similarly, this spring the nonprofit Natural Products Association launched a certification program which will certify products as natural if they contain at least 95 percent ingredients from renewable resources found in nature, with no petroleum compounds. According to the president of Dr. Bronner's Magic Soaps, "Organic products aren't necessarily inherently safer than non-organics. But if they're certified and not making bogus claims, it does guarantee they can't use a lot of problematic petrochemicals."

While letting companies certify in this way (and thus get to put the spiffy little logo on their packages) is a terrific idea, the real challenge will be for marketers to either pull back and try to make "natural" a meaningful word again (unlikely) or find a new way to attach integrity and certainty to the type of products consumers want. So, until I have a better idea of what "natural" means in industry-speak, I'm probably going to keep shelling out (pun intended) the extra forty cents for the organic eggs.

I'm just not ready for a hen house behind the basketball hoop