2011 sees The Value Engineers celebrate its 25th anniversary. As an homage to the branding world which has been our life for the last quarter of a century, we will be posting a blog on the 25th of every month, discussing everything ’25′.

The year we started The Value Engineers we did a review of the food market for a client. Back then, information on food trends or helpful websites didn’t exist – so we had to find the data for ourselves.

One source was the Good Food Guide. We sampled editions back to the early 1950s, charting the rise of ethnic food, the slow decline of eclectic (and insincere) ‘continental’ restaurants that served anything you could freeze and re-heat, and the painfully slow emergence of regional cuisine.

Looking back now at the 1986 Good Food Guide, I’m struck by what – and particularly who – is not there.

Of the celebrity chefs we now celebrate or sneer at only Raymond Blanc and ‘Richard’ (never Rick) Stein get a mention. No Gordon Ramsay, no Marco Pierre White. Jamie Oliver was only 11 – still five years away from going to catering college – and Heston Blumenthal still had hair, though he started his self-taught progress towards the Fat Duck. Top chefs – including Ken Whitehead of Boulestin – not only endorsed but even cooked with Uncle Ben’s rice. ‘Come off it, old son’ said the Guide.

The Dorchester Hotel – under Anton Mosimann – had the infamous Lymeswold cheese on its menu, because, so they said, the ‘Americans ask for it’.

Italian restaurants went big on ‘chicken Kiev’. Vacuum packed boil in the bag food was a new – and welcome – trend, replacing the frozen entrees and frozen broccoli that dominated the British restaurant trade.

Then the restaurant empires were those of the Roux Brothers and Peter Langan – though the latter’s drunken antics were already beginning to raise eyebrows.

The Guide lamented the level to which prices had risen. Lunch at Le Manoir was £25; getting out of a ‘top end’ restaurant for less than £40 a head was rare – and compared with Chelsea season tickets at £154 or Wimbledon Finals tickets for £18 restaurant prices were exorbitant and ‘arrogant’. Lunch at the Manoir is now around £60; Chelsea season tickets are between £550-1200. Maybe good food is not such a rip-off after all. 

The big trend for the future – said the Guide – was ‘Real Food’. Local ingredients, locally sourced. The Hilton Hotel on Park Lane even had a British Harvest restaurant, with regional British cheeses and English wine. However, ethnic restaurants dominated the Guide. They were ‘head and shoulders’ above the European restaurants for value, quality of food and even service.  French food was the ‘major area of activity for the processed food industry’ and English food was ‘confused and in search of an identity’.

In 1986 The Value Engineers successfully sold to Tesco – via a tasting – the idea and appeal of English cheeses (including Yarg) but the rest of the supermarket trade would take many years before they caught on. We were, perhaps, ahead of our time.

Elsewhere, the Guide lamented, the British were ‘content to talk about a tomato or a potato as if the strain, where they were grown, how long they have been unearthed matters not a jot’.

All this was to change.  Or almost all…

Le Manoir aux Quat’Saisons and Le Gavroche were top of the pile then.  They still are.

But what is also interesting about the GFG of 1986 is that much of what they were campaigning for 25 years ago is still on the agenda today.

Firstly, their campaign for ‘real food’ (named ingredients, freshly sourced from local resources) can be seen in the trend towards what one could call the ‘uber-real’ movement. Foraging for indigenous ingredients has been on the key success factors in René Redzepi’s acclaimed Noma Restaurant in Copenhagen. The name itself gives away the secret. Short for Nordisk Mad (or Nordic food), Noma is a restaurant bent on re-discovery and reinvention of its Nordic heritage of edible plants, woodland berries and forest riches. 

Back in 1986 the Guide was acclaiming the rebirth of Anna’s Place, a one room Nordic restaurant in Stoke Newington. Now a second key trend for the future is the renaissance of supper clubs – food sourced, prepared and cooked for in-the-know small groups by enthusiastic amateurs rather than the big brand professionals.

And my third trend? The rebirth of street food. It’s been an unnoticed and unsung feature of British food for a thousand years or more. And it’s on its way back. We will see a shift away from the mega-restaurants towards the street vans and the pop-up restaurants that will once again celebrate the value of fast, local, community-based food.

When the exotic becomes commonplace courtesy of the big chains it’s time to get local again.

2011 sees  The Value Engineers celebrate its 25th anniversary. As an homage to the branding world which has been our life for the last quarter of a century, we will be posting a blog on the 25th of every month, discussing everything ’25′.

To start our year of twenty fives is a story from 25 years ago but one for which the moral is as central to branding today as it was then. It’s a story of when 250,000 people were wrong and involves the world’s most valuable brand; Coca-Cola.

In the early 1980s Coca Cola (which according to some surveys is the second most recognised word in the world after ‘ok’), was in trouble. It faced the frightening prospect of losing its number one spot in the American soft drink market.

Pepsi’s aggressive ‘Taste Challenge’ campaign was winning market share and Coke had to rely increasingly on its dominance in restricted markets such as vending machines and fast food outlets to maintain its market leader position. Adding to the problem was the success of the brand’s stable mate, Diet Coke. As sales of Diet Coke increased and people become converted to the new brand, the pool of available sugar cola drinkers was getting smaller.

The team in Atlanta embarked on a mission to beat off the Pepsi challenge. Blind taste tests, whereby people are given samples to drink and rate but are not told what brand they are, were conducted. They showed – horror of horrors! – that people preferred the taste of Pepsi.

So the team decided to develop a new Coke. The new formulation they settled on was based on Diet Coke but instead of artificial sweeteners, high fructose corn syrup was added to create a drink that was sweeter and smoother than original Coke and in fact more like Pepsi.

It is reputed that Coke then undertook the largest ever programme of taste panel research, interviewing over ¼ million people.  A clear and significant majority of these preferred the taste of New Coke.

So what should the executives in Atlanta do, launch New Coke alongside ‘Old’ Coke or replace it outright?  Worried that if they retained the original alongside the new it might split sales and give the leadership of the sector to Pepsi they chose to replace the old with the new. The need to maintain secrecy, however, meant that this decision had been taken without ever asking the consumers whether they wanted a new, improved Coke.

On April 23 1985 New Coke was launched and production of the original formulation was halted later that week. And everyone in Atlanta lived happily ever after. Well no, not exactly….

America was outraged. Rather than welcoming the better tasting New Coke, millions of Americans decided they hated it, even before they tasted it. Even amongst those who did taste it, the vast majority were convinced they still preferred the original! (So much for the 250,000 people with whom it had been researched!)

For so many Americans, Coke was much more than just a product: it was an institution, a way of life. It was something they had grown up with, something with which they felt they had a relationship. It was their brand. They reacted with horror to this change. They protested long and loud.

In the end senior executives were forced to hold a press conference to announce the return of the original – now called Classic Coke.

Perhaps luckily for Coke, the real surprise was that after the outrage came forgiveness and then celebration and while Coke did lose leadership to Pepsi in 1985, Classic Coke, the re-launched original regained its leadership in 1986 and kept growing. New Coke faded away.

And the moral of the story? Today, as well as back in 1986, a brand is much more than a product; it exists in the mind as much as it does on the ‘shelf’.

Sampling is a great way of raising the awareness and trial of your brand. It can be a clever way of getting the most out of a small marketing budget. This is especially true for challenger brands.

Golden Wonder: The Nations Noodle has had a fantastic year in 2010, enjoying sales growth of 318.4% in the instant pot snacks category. The growth was partly down to a summer sampling campaign, in which the snack was distributed free at music festivals. The key music festivals were V festival and Creamfields. There was a chance to win an iPad or get a year’s supply of Golden Wonder for free.

This is a great example of a tightly defined marketing activity that targets a specific consumer segment and has led to Symington’s getting the best bang for their buck!

Just in time to cure lingering New Year’s hang-overs, Starbucks announced a change to its logo:  no longer will “Starbucks” and “coffee” appear on its products. Just a tailed siren will stay put, coloured in white and green. Pundits, journalists and coffee lovers each have a view. While reaction has been mixed, on key criticism is being voiced: that the logo change may limit Starbucks’ capacity to deliver on its ‘core’ product; coffee.

Yet in my view, these concerns are misguided. The logo change reflects a broader business and brand strategy.

New joiners at The Value Engineers receive weekly training on all areas of branding in a course called ‘The University of Gav’ – named after one of our experienced Engineers. A core lesson of our Uni is that brands must deliver through its products. Richard Brandson, the serial entrepreneur, said as much: “The brand is only as good as your product”.

So, where does this fit into Starbucks? Three years ago, it was down in the dumps – Frappachinos did not taste as sweet in the context of the global recession. Its CEO battled back: closing stores, but also diversifying products: in addition to coffee, it expanded into icecream, music, and tasty in-store snacks. Since 2009, it has run a series of unbranded stores that serve as ‘laboratories’ for new in-stores concepts, such as ‘open mic’ nights – a favourite of poets everywhere.

Moreover, as international sales become more important to Starbucks, a broader sense of its brand becomes important. Countries such as Saudi Arabia, Turkey, and Taiwan may already have local coffee favourites, but what they get with the new Starbucks logo is something bigger: a unique in-store experience that delivers beyond coffee.

In sum, it is not all about coffee anymore. To be successful as a business, Starbucks needed to be something bigger – and that’s what the logo represents. It is a source of entrainment: a brand that represents quality across its products and does so while being a responsible corporate citizen. The new logo isn’t just a visual gimmick – it represents Starbucks’ broadening ambition.

“In Seattle” said Jeff Bezos, “you haven’t had enough coffee until you can thread a sewing machine while it’s running”. Without a doubt, Bezos referred to the coffee culture in Seattle, Washington in America’s Northwest. From the humble beginnings of Pike’s Place Market, Starbucks has taken drip coffee, espresso, and teas international: today it is active in 50 countries, has 11,000 stores in the US, 700 in the UK, and 100s across Asia.

Over the past few years Starbucks has struggled in the coffee market. It closed down 325 stores globally between 2008-2009. Of concern to shareholders, the board, and coffee lovers, 84% of total net revenues from retail stores globally. The Great Recession threatened the viability of the Starbucks bread and butter: tired people getting their morning Java at their ‘local’.

Starbucks innovated around the retail decline. It expanded to offices, hotels, airlines and supermarkets. Over the holidays I noticed a new trend at a supermarket in London: a refrigerated Starbucks coffee, packaged like an in store product (below). This seems to be targeted at shoppers that want the handy Starbucks cup, with the convenience of the daily shop.

Yet Starbuck’s product innovation misses a key trend among coffee consumers: they have shifted to in home brewing. Consumers are cutting purchases of ground coffee as they shift to coffee ‘Pods’. In response, Starbucks launched Via – a sachet of coffee that does not need any brewing kit – but such speciality items were 19% of total net revenue for 2009.

Moreover, Starbucks has limited options in the supermarket. Its exclusive distribution relationship with Kraft curtails options to find a new partner or a better deal in US grocery chains. On the home brewing front, Kraft’s Tassimo brewing machine has a 2.6% market share compared to Keurig’s 71%. The once fruitful relationship with Kraft seems to be losing steam due to changing preferences, an inflexible distribution agreement, and innovation.

Such trends suggest that consumers want to have a degree of creativity and flexibility in their coffee choices, rather than being vulnerable to untrained baristas. From burgers, electronics, and sportswear, it is clear that consumer choice in how one interacts with a product may determine success or failure. For the time being, it seems that Starbuck’s caffeine-fed sewing machine has slowed significantly.