In an interview with Fortune, a Wal-Mart honcho talking about the holiday season says in passing:
Bikes are going to be big. Electric bikes are something that we’re having a hard time keeping in stock at Wal-Mart.
I poked around a (very little) bit and wasn’t able to immediately come up with any echo of this. I’m curious about it in part because electric bikes and Wal-Mart shoppers aren’t two concepts I would have matched up intuitively. I’m not sure what to make of it.
The other day I linked to this Chews Wise (Sam Fromartz, author of Organic Inc.) post about Honest Tea‘s new relationship with Coca Cola. Two updates on that. Marketing Profs blog offers a few other examples of niche food/beverage brands, particularly with some kind of organic or other feel-good hook, being bought giants. (It also notes that Clorox “quietly” bought Burt’s Bees recently. I’m not sure how quiet that was, but here’s a huge New York Times story on the subject from a month ago.) The blog says:
On the positive side, the mega food companies also greatly expand distribution for their acquired brands, and have the ability to market with much deeper pockets. They sometimes even allow their new baby brands to influence some of their business thinking. While it is now au courant to become green or more natural, for example, the insights and influence corporate giants are getting from their newly acquired brands has actually begun to effect change in their thinking. . .and that’s a good thing.
Second, Mr. Fromartz has gone direct to the source and done a quite interesting Q&A with Honest Tea co-founder Seth Goldman. I recommend checking out the whole thing, but a few things I want to highlight here.
Goldman specifically mentions the distribution issue noted above as a major plus for his company in the new deal. I can’t tell you how many times this comes up when I interview startup entrepreneurs — you can have all the clever marketing and awesome consumer evangelism you want, but without distribution, you’re limited.
Most interestingly, Goldman even cites McDonald’s as “an example of the kind of account that we will now have access to,” meaning they can at least get in the door for a meeting, because of the Coke connection. It might seem surprising that a successful new beverage can’t do that on its own. And I’m not in a position to say with certainty whether it’s 100% true all the time. But it doesn’t surprise me at all; it’s quite consistent with stories I’ve heard before, in plenty of categories.
Then Goldman offers another example: Wal-Mart, he says, is a place where Honest Tea “should be.” Fromartz of course brings up the obvious question of how Honest Tea loyalists might respond to their little brand popping up in such places. Goldman:
We’ve gotten a lot of emails, mostly positive but some negative. One of the most important points is I’m not trying to excuse or rationalize what Coke sells. They’ve obviously been successful at it. But if people think their product is unhealthy, then their desire should be to see more Honest Tea available wherever Coke is sold.
Business Week had a story recently about Kenneth Cole’s brother, Neil, who is now running a company called Iconix. The business model of Iconix is that it buys fashion brands — but just the brand, not the company. Through a licensing arrangement, it sells others the right to actually design and manufacture the apparel, in exchange for a “guaranteed royalty of 4% to 10%.” (I’m assuming that’s a percent of gross, not net, but if the article says for certain, I missed it.)
I was interested to see that its most recent deal is with Wal-Mart, which will be “the exclusive U.S. licensee of the surfwear pioneer Op brand.” I used to wear Op when I was in junior high or so, and about two years ago I think I noticed that a boutique I like in Manhattan, Gerry’s (which tends to stock brands like Ted Baker and Modern Amusement), was carrying Op stuff, which I hadn’t seen in many years. I remember chatting with clerk about it, and he claimed it was selling well. Since then I’ve seen some Op ads in some hipster lifestyle magazines, and even briefly considered doing a Consumed on it, but never did.
Other Iconix brands include Joe Boxer and Mossimo (which I gather are exclusively sold in Sears/K Mart and Target, respectively), and, I was surprised to learn, Roca Wear.
The article spends more time on Cole’s up and down career than on details of this business, but supposedly it’s doing well. (Although some of the downs in his career kind of give me pause.)
What’s interesting about licensing businesses in general is that despite the assorted chatter about brand-skeptical consumers, licensing can be very lucrative precisely because of brands’ power to transform commodities. It’s particularly interesting when it happens with brands that have fallen on hard times, but are still familiar. With the right cost structure and the right marketing, they can build on that familiarity. (This is the subject of an article I’m working on now, actually, so more on that in the future.)
Op will be an interesting one to watch, and I wish I knew more of the back story. Was it totally dead for a while? Who was behind the Op stuff that was popping up in Gerry’s, of all places? From whom did Iconix acquire the marks, and when? Who will be doing the designs? Lots of people will recognize the brand when they see it, but younger people probably won’t. Who will the consumer be? Etc. Like I said, should be an interesting one to watch.
UPDATE: An incoming link leads me back to this bit on an interesting blog called Legal Fixation: “Although there are numerous OP and OCEAN PACIFIC trademark registrations, the assignment history of this OCEAN PACIFIC registration gives some good clues as to the transactions.”
Either way, draw your own conclusions about how this news relates to our earlier discussion:
The world’s largest retailer on Wednesday is launching the “Roommate Style Match” group on Facebook, a social networking site that has millions of college-age users, in the hopes of grabbing a larger chunk of back-to-school shopping dollars.
Facebook users who join the Wal-Mart group will be able to take a quiz to determine their decorating style and get a list of “recommended products” they can buy at Wal-Mart to mesh their style with their roommate’s.
Via Retail Design Diva.
Is all publicity good publicty? I’m no expert, but when your company is the focus of a 214-page report by Human Rights Watch, that can’t be good for the brand.