Business

Ruling the roost: Tyson wants a perch in both the poultry and meat substitute markets

June 18, 2019

What “tastes like chicken” (aside from such exotic edibles as frog and snake meat)? It’s no surprise that it’s a new product from Tyson—one of the world’s largest poultry producers—but it is a little odd that it doesn’t originate from something farm-raised and feathered.

Tyson is jumping on the meat substitute bandwagon, the company announced on June 13, with “chicken nuggets” made from pea protein scheduled to be stocked at grocery stores this summer. A blended burger made from beef and pea protein will follow this fall.

Both will be sold under a new brand, Raised & Rooted, which will continue to develop plant-based and blended products for both groceries and restaurants.

In addition, the company’s existing Aidells brand has launched Aidells Whole Blends sausage and meatballs, made with chicken and plant-based ingredients.

It’s clear that Tyson doesn’t want to miss out on the growing global trend toward plant-based eating. U.S. sales of meat substitutes are expected to jump 78%—to $2.5 billionbetween 2018 and 2023, according to Euromonitor. Global sales could reach $23 billion in that same timeframe.

“Today’s consumers are seeking more protein options so we’re creating new products for the growing number of people open to flexible diets that include both meat and plant-based protein,” said Tyson CEO Noel White in a press release.

“For us,” he said, “this is about ‘and’—not ‘or.’ We remain firmly committed to our growing traditional meat business and expect to be a market leader in alternative protein, which is experiencing double-digit growth and could someday be a billion-dollar business for our company.”

Research contact: @TysonFoods

Car dealerships offer manicures and movies to draw in maintenance customers

June 17, 2019

Most people who bring a car into the dealership for a tune-up or a repair come prepared with a book or a laptop, a cup of upscale coffee or tea, a smartphone, and as much patience as they possibly can muster.

Progress reports are few and far between, asking plaintive questions at the intake area of the auto service department is frowned upon, and the hours stretch ahead—time you will never get back, but will pay for (in big bucks, for labor and parts).

And the waiting rooms, themselves? They tend to be forlorn places, with cable news on a glitchy TV and last year’s copy of Newsweek, if you’re lucky.

But now, all that is changing, The New York Times reports. Today, you can get blackened chicken or grilled salmon on the lunch menu at Honda of Fort Worth, or a complimentary workout at the fitness center attached to the Lincoln-Mercury/Land Rover-Jaguar store in Merritt Island, Florida, the news outlet informs us—assuming you wouldn’t rather play pool or watch a movie.

This amenity-laden shift can be traced straight to dealers’ bottom lines. Vehicle sales may be down this year, but service revenues continue to be reliable—and promise to grow, if dealers can make vehicle maintenance a more engaging experience.

Already, at the end of 2018, half a typical dealer’s gross profits came from the service department, according to Patrick Manzi, senior economist at the National Automobile Dealers Association.

 “Service and parts are very important to dealerships right now,” Mr. Manzi told the Times. “Cars are selling on the internet, and there’s more competition and more access to vehicle prices than ever before. Margins from selling new cars have been consistently on the decline, so dealers are focusing on service. They’ve realized they can help grow customer loyalty by standing out in the amenities.”

According to the Times report, Lexus might be the pacesetter in this cushy new world— and women are being specially targeted and pampered, with beauty services and childcare.

“In one of our stores in San Antonio, Texas, we have a free coffee bar with snacks, a manicurist and a masseuse,” Kimberly Sherron, the dealer facilities manager and design leader at Lexus, told the news outlet “In Wichita, Kansas, you can drop your vehicle off at the service department, get taken to the airport and then picked up when you come back. In the Tampa area, we have a store that features a manned barista bar, with free macchiatos, croissants, and sandwiches.”

Ms. Sherron added, “They go above and beyond.”

That may be understatement, but this new twist on the waiting room is not just for luxury brands like Lexus. A range of dealerships have been adding amenities.

Toyota— a notch downscale from the same Japanese company—has a play area for children in its Chesapeake, Virginia dealership, as well as (can you believe it?) a movie theater, a hair salon and a shoeshine area. On Wednesdays, it provides free manicures.

What’s more, the Times reports, automakers also are supporting their brands with “experience centers” that are even more over the top. At Intersect by Lexus—dubbed “An Immersive Cultural Space”—in Manhattan, which opened last fall after similar centers in Dubai and Tokyo, there’s an auto parts wall installation, fine dining with rotating chefs (currently, one cooking avant-garde tapas from Chile), a circular bar featuring the same leather used on Lexus car seats, and a third-floor exhibition space.

“It’s an homage to the cars,” Kirk Edmondson, the general manager, told the newspaper. “We reference the brand’s legacy of hospitality, design and craftsmanship — but we don’t scream about it.”

Research contact: @nytimes

Poshmark adds a home décor marketplace to its fashion platform

June 13, 2019

Redwood City, California-based Poshmark—a social commerce marketplace where users can buy and sell new and secondhand fashion items— is moving into home furnishings, as well, where it will compete with the likes of Wayfair and its subsidiaries, Joss & Main, Birch Lane, and AllModern.

The company has announced the launch of Home Market—“an in-app marketplace to buy, sell, and connect around home decor.” Starting on June 11, Poshmark shoppers and sellers began buying, listing, “and discovering” a wide selection of home decor products, in addition to the 75 million listings in apparel, shoes and accessories already on the platform.

“With the launch of the Home Market, we’re taking our first step into broader lifestyle categories and expanding our social marketplace beyond the closet,” said Manish Chandra, founder & CEO of Poshmark, in a company press release. “This market launch reiterates the power of Posh Markets to scale social commerce and enables Poshmark to continue transforming the e-commerce experience.”

The expansion comes as more and more shoppers are turning to secondhand marketplaces like Poshmark, Rebag and TheRealReal to buy used designer handbags or sneakers at lower prices, CNBC reports.

The secondhand apparel market in the U.S. was worth $24 billion in 2018, compared with $35 billion for fast-fashion companies like H&M and Zara, according to data compiled by ThredUp and GlobalData Retail. But by 2028, CNBC notes, the used fashion market is set to jump in value to $64 billion, while fast fashion will only reach $44 billion, the firms said.

Poshmark’s new home vertical will be for things like wall art, pillows, candles and other smaller home goods, but not bulky furniture, Chandra said. Poshmark is still working on perfecting its logistics to be able to handle and ship heavier items, he explained.

Research contact: @Poshmarkapp 

Hardee’s partners with young YouTube influencer to relaunch kids’ meals

June 12, 2019

The fast food chain, Hardee’s, is partnering with a seven-year-old YouTube star, Ryan—the influencer and star of the popular Ryan ToysReview channel—to bring back its kids’ meals.

Ryan, who goes by his first name only for privacy, was the top-paid YouTube star last year, according to Forbes. His channel has over 19 million subscribers.

The partnership is a first for Hardee’s, and it’s one that could help the venerable, 59-year-old hamburger stands to reach consumers, particularly families, in an entirely new way, CNN reported on June 11.

The meals being introduced will include four exclusive, new toys from Ryan’s World, a brand of toys. Later this summer, toys   animated YouTube show, HobbyKids Adventures, also will be distributed via the meals.

YouTube is an important channel for Hardee’s. “Our consumers are digital-first,” Jenna Folk, Hardee’s director of Brand Marketing, told CNN Business. “We want to connect with them where they are.” She added that the video platform in particular is “an exciting space for us.”

The burger chain stopped selling its Star Pals kids’ meals eight years ago. But since then it has noticed an increase in families eating at quick-service restaurant chains, Folk said. She cited a University of Connecticut study that found that in 2016, 91% of parents said they had purchased lunch or dinner for their kids at a major fast food chain—up from 79% in 2010.

The return of the kids’ meal could encourage parents to choose Hardee’s. And the brand is hoping a collaboration with family-friendly YouTubers will make the meal even more attractive.

Ryan will feature the four toys on his YouTube channel, Folk said. The Hardee’s Star Pals kids’ meals, which include a choice of chicken tenders or a burger, plus an optional side and drink and start at $3.99 per meal, will become available for purchase next week. The toys will also be available in kids meals from Carl’s Jr., which has the same parent company as Hardee’s.

Research contact: @Hardees

Nearly 200 CEOs sign letter calling abortion bans ‘bad for business’

June 11, 2019

More than 180 CEOs from a who’s who of U.S. and global consumer-facing companies have signed a letter opposing laws and regulations that restrict women’s reproductive healthcare, including abortion, CNBC reports.

Twitter and Square CEO Jack Dorsey, Glossier CEO Emily Weiss, fashion designers Rebecca Minkoff, Eileen Fisher, and Diane Von Furstenburg; and the chief executives of companies including Yelp, Warby Parker, Ben & Jerry’s, Birchbox, United Technologies, Amalgamated Bank, Atlantic Records, and The Body Shop, say they signed the letter to send a clear message that restricting access to reproductive care, including abortion, is “against our values, and is bad for business.”

Such legislation, they say in the ad, inhibits “our ability to build diverse and inclusive workforce pipelines, recruit top talent across the states, and protect the well-being of all the people who keep our businesses thriving, day in and day out.”

The letter appeared yesterday as a full-page ad in The New York Times under the heading “Don’t Ban Equality”— and comes less than a month after Alabama Governor Kay Ivey (R) signed the most restrictive abortion legislation ever in the United States— banning doctors from performing abortion at any stage of pregnancy, punishable by 99 years in prison. The law includes no exceptions—period—even for cases of rape or incest.

Several other states— including Georgia, Arkansas, Indiana and Missouri—have adopted similar laws this year, CNBC noted.

Andrea Blieden, U.S. general manager of The Body Shop told CNBC Make It that “access to reproductive healthcare is recognized as a human right” and says the letter emphasizes the company’s outlook that it is essential U.S. law to “respect, protect and fulfill the human rights of women.”

“We believe that a woman’s ability to access reproductive health care is critical to her autonomy, economic success, physical and mental health and general empowerment in the workplace,” said Blieden. “As a brand that stands for equality and women’s empowerment, we believe it’s important that we take a stand and join this cause.”

Seventh Generation CEO Joey Bergstein told the news outlet that now, more than ever, it’s essential for CEOs and executives to speak up. “We’re deep believers that companies and businesses can and must be a force for good,” he says. “You’ll notice in our mission that we don’t talk at all about selling eco-friendly home and personal care products. We talk about the change we’re trying to create in the world, and that’s inclusive of social change, with this being a pivotal issue.”

A 2017 survey conducted by public relations firm Weber and Shandwick found that 47% of Millennials believe CEOs have a responsibility to speak up about issues that are important to society. Additionally, 28% of Gen Xers and Boomers agreed.

The letter that appeared in the Times was spearheaded by a group of advocacy organizations that comprises the American Civil Liberties Union (ACLU), Planned Parenthood Federation of America, NARAL Pro-Choice America, and the Center for Reproductive Rights. These organizations also have partnered to launch DontBanEquality.com, a site where people can learn more about the group’s mission and where CEOs can add their names to the letter.

“It’s critical that business leaders stand up and use our voice on incredibly important issues,” says Bergstein. “And I think reproductive rights and women’s equality is one of the most important issues of our time.”

Research contact: @CNBCMakeIt

Barack and Michelle Obama seal podcasting deal with Spotify

June 10, 2019

Swedish audio-streaming platform Spotify Technology has sealed a deal with the Higher Ground production company—helmed by Barack and Michelle Obama—to develop and produce podcasts.

The former president and first lady are expected to participate in at least some of the podcasts covering a range of topics, the companies said in their announcement, released on June 6. That could potentially mean that they will take hosting, narrating, or interview roles. Financial terms of the multiyear agreement weren’t disclosed, nor were details about programming or how many podcasts the deal might include, according to a report by The Wall Street Journal.

In a formal press release, the Obamas noted that, when they launched their production company last year with an initial partnership with Netflix, their goal was “to create compelling content that entertains and inspires viewers.” Recognizing that content is consumed in many forms, this new partnership will give them the ability to expand the conversation—educating and engaging Spotify’s diverse and extensive audience.

Spotify, which recently surpassed 100 million premium subscribers and has more than 217 million monthly active users, will distribute the podcasts exclusively to audiences worldwide.

 “We’ve always believed in the value of entertaining, thought-provoking conversation,” President Obama said. “It helps us build connections with each other and open ourselves up to new ideas. We’re excited about Higher Ground Audio because podcasts offer an extraordinary opportunity to foster productive dialogue, make people smile and make people think, and, hopefully, bring us all a little closer together.”

“We’re thrilled to have the opportunity to amplify voices that are too often ignored or silenced altogether, and through Spotify, we can share those stories with the world,” Michelle Obama said. “Our hope is that through compelling, inspirational storytelling, Higher Ground Audio will not only produce engaging podcasts, but help people connect emotionally and open up their minds—and their hearts.”

“President Barack Obama and Michelle Obama are two of the world’s most important voices and it is a privilege to be working with them to identify and share stories that will inspire our global audience, which looks to Spotify for unique, breakthrough content,” said Spotify Chief Content Officer, Dawn Ostroff. “Connecting people with original and thoughtful creators — especially those with the ability to highlight underrepresented and indispensable narratives — is at the core of our mission and we are thrilled that not only will the Obamas be producing content, but that they will be lending their voices to this effort.”

Research contact: @Spotify

Traditional MBA programs are toppling, as online education catches on

June 7, 2019

Gies College of Business at the University of Illinois at Urbana-Champaign has joined other major business schools nationwide in announcing that—pending University approval—it will shift investments away from its residential full-time and part-time MBA programs. Instead, the college will focus its investments on its rapidly growing online iMBA as well as a suite of specialized master’s programs, undergraduate education, and lifelong learning. The College plans to stop enrolling new students in the full-time and part-time residential programs.

Indeed, according to a report by The Wall Street Journal, applications to traditional M.B.A. programs have languished in a strong U.S. job marketdeclining last year, even at Harvard Business School, Stanford University’s Graduate School of Business and other elite schools

The business news outlet reports that Millennials, saddled with more college debt than previous generations, have grown more reluctant to leave jobs for a year or more to pursue one of the nation’s priciest degrees.

Between 2014 and 2018, the number of accredited full-time M.B.A. programs in the U.S. shrank 9% to 1,189, with schools reporting 119 fewer two-year degrees in the most recent survey by the Association to Advance Collegiate Schools of Business. Wake Forest University and Virginia Polytechnic Institute and State University, commonly known as Virginia Tech, are among the others to recently cut their traditional M.B.A. programs, the Journal reports.

Against that backdrop, shorter and more-flexible graduate business degrees have proliferated. At the business schools in the same survey, there were 140 new masters programs in specialized subjects like data analytics last year, marking a 16% jump from 2014, to 981.

“The iMBA is the right format for the times— providing a powerful learning experience with anytime/anywhere accessibility at an affordable cost,” said Jeffrey Brown, dean of Gies College of Business, in a university press release. “Given the global reach and accessibility of this program, we are creating what I call the world’s MBA. With this and with our innovation in undergrad, specialized masters, and lifelong learning, we are playing to our competitive advantages and positioning ourselves for tremendous impact and steady growth. These moves will focus our investment in ways that will make us unquestionably one of a handful of the world’s very best and most innovative business schools.”

At Geis, Brown says, applications to the iMBA have nearly tripled—from 1,100 in 2016, when the program was launched, to a projected 3,200 in 2019. He says the new program is “revolutionary”in its delivery, stackable structure, concentrations, immersions, accessibility, and career-curated content. It combines material in ways that professionals use it in the real world, not in traditional academic silos.

Even better, iMBA students earn the same MBA that on-campus students have been earning for decades—at a total cost of less than $22,000, compared to the $80,000 full-time program.

“Our iMBA is the most innovative, highest-value MBA of any kind anywhere in the world,” said Brown. “Because it is online and offered at an affordable cost, it creates access to a high-quality, high-impact business education for larger numbers of talented people. It fulfills our land-grant mission and serves our state spectacularly well. At the same time, by being fully online, it extends and deepens our reach as a global player — ensuring a worldwide reach for our college and alumni network.”

In May, Stetson University in Florida also said it would stop admitting new students to its full-time, on-campus M.B.A. programs, funneling resources instead to more popular online equivalents.

Research contact: @WSJ

Off-the-wall: Ikea soon will offer shape-shifting, robotic furniture

June 6, 2019

Several years ago, MIT Media Lab made a splash with a piece of “shape-shifting furniture”—a glowing robotic box that could transform a 200-square-foot apartment into a 600-square-foot apartment by expanding or contracting at the push of a button to reveal a bed, bathroom, and storage. Eventually the academic—known as Cityhome from January 2011 to December 2016—became a Boston-based company called Ori Living.

Now, Fast Company reported on June 5, the startup works directly with developers to integrate its robotic units into apartment buildings, and will even mail you a robotic walk-in closet.

But for the past two years, Ori has been working on something new: The company is working on the design, production, and release of a robotic furniture line developed alongside Ikea–and at Ikea prices.

The new collaboration is dubbed “Rognan,” and it will launch in Japan and Hong Kong in 2020. Ikea is licensing the technology from Ori as part of an ongoing partnership.

According to Fast Company, Rognan is essentially an L-shaped storage unit that moves with motors and a switch. It functions as a room divider that you can slide left or right to shape your apartment’s space to its function.

On one side, the Rognan features a full-sized bed that can roll in and out from the unit to build a bedroom when you want to sleep. On the other side, there’s a small couch for entertaining in your living room. On both sides, Ikea has integrated support for its Platsa modular storage system, which allows buyers to completely customize the unit with shelving and drawers.

Hasier Larrea, the MIT researcher who founded Ori, recently told Fast Company in an interview that, while Rognan may look similar at first glance, it is significantly different from earlier Ori units.

In the United States, Ori units have been packaged as entertainment centers for small home theaters. But for the large Asian markets where Rognan will first launch, the promise of giant TVs was less appealing than offering more practical storage and the additional seating of a built-in couch. The design teams also significantly lowered the height of the unit, as apartments in Japan and Hong Kong tend to have lower ceilings than the U.S.

Pricing is yet to be announced, and will likely vary by level of customization. Ori’s own Pocket Closet starts at $2,650, but it looks like Ikea’s offerings may be cheaper; Larrea promised the Rognan will be offered at “an Ikea price point.”

Research contact: @ori_living

To attract teenage staffers, Walmart offers free SAT and ACT prep

June 5, 2019

Walmart, the nation’s largest private employer, announced on June 4 that it will offer free college SAT and ACT prep courses to its high school-age workers, as well as several online, general education college classes at no cost through Guild Education, The Chicago Tribune reported.

Walmart estimates about 25,000 people under the age of 18 work at its stores—a fraction of its 1.3 million person U.S. workforce. The company is looking to attract and retain more workers, right from the start of their careers.

The new offer represents an expansion of a program Walmart launched last year called Live Better U, which provides affordable access to a college degree for full-time and part-time workers who have been with the company at least 90 days.

Based in Denver, Guild Education offers “education as a benefit” to corporate workers through a program that costs $1 a day. Classes are sourced through nonprofit universities with online programs that have had success working with adult learners.

Guild, which is a startup says it is planning on expanding the number of degrees it offers—beyond business and supply management to an additional 14 that will include cybersecurity and computer science. Walmart says these programs will help provide workers with skills it needs in the future.

About 7,500 adult workers are already enrolled in the program. Walmart expects 68,000 of its employees to be enrolled in the next several years.

Walmart is competing with other major employers to find and retain higher quality, entry-level employees in a historically strong labor market.

The unemployment rate dropping to a five-decade low of 3.6% in the most recent jobs report issued by the Labor Department, and the average hourly pay rose 3.2% compared with a year ago. The economic expansion, which has fueled 103 straight months of hiring, is set to become the longest in history next month.

High schoolers represent an increasing challenging group for recruiters. In fact, only 26.4% of teens are expected to have a job by 2024, according to the Bureau of Labor Statistics. That’s down from 34% in 2014.

Research contact: @ChiTribBiz 

As business wilts, flower and gift delivery service FTD seeks bankruptcy protection

June 4, 2019

Flower and gift delivery service FTD filed for bankruptcy protection on June 3, with a plan to sell some businesses while paying down debt, according to a report by The Chicago Tribune.

In addition to FTD and Interflora, the nearly 110-year-old company—headquartered in Downers Grove, Illinois–has portfolio of brands that includes ProFlowers, ProPlants, Shari’s Berries, Personal Creations, RedEnvelope, Flying Flowers, and Gifts.com.

According to the Tribune, FTD had warned in March that it could go out of business or shrink its operations this summer if it didn’t find a buyer or raise enough money to pay back $217.7 million in debt due in September.

“With the advice and support of our outside advisors, we have initiated this court-supervised restructuring process to provide an orderly forum to facilitate sales of our businesses as going concerns and to enable us to address a near-term debt maturity,” Scott Levin, FTD’s president and chief executive officer, said in a news release. “Importantly, everyone involved with this process understands the critical role of our talented member florists, and we intend to continue supporting them as normal throughout this process.”

FTD said it is continuing to operate its businesses and has lined up $94.5 million in financing from existing lenders to fund operations while it restructures and works to sell pieces of its business.

A California-based private equity firm, Nexus Capital has agreed to buy FTD’s North American and Latin American consumer and florist businesses, including ProFlowers, for $95 million, FTD said.

It has also signed letters of intent with potential buyers for its Personal Creations and Shari’s Berries businesses. Any sales will still require the bankruptcy court’s approval.

In the meantime, FTD said its businesses are continuing to operate as usual, taking new orders and filling those already placed.

FTD’s Interflora business, which is based in Europe and is not part of the Chapter 11 filing, has been sold to a subsidiary of The Wonderful Co., based in California,  for $59.5 million, the company said.

Research contact: @laurenzumbach