REPORTER'S NOTEBOOK: TALES OF LOW PROFITS AND KNOWLEDGEABLE RIVALS

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Observations from the Food Marketing Institute's annual supermarket exposition May 4 to 7 in Chicago:

Turning a profit: According to FMI statistics, there are 127,000 supermarkets in the country employing 3.4 million people. Total grocery sales in 1997 will be $425.7 billion. But net profit after taxes is still very low: This year the average supermarket will see a profit of 1.2%.

Celebrity spotting: It wouldn't be FMI without the fair share of celebrities, and this year was no exception. Chef Paul Prudhomme was spotted in his whites cruising the show floor in his motorized cart; autographs were inked by singer/sausagemaker Jimmy Dean and football Hall of Famer Gale Sayers; and one of New York's most famous divorcees, Ivana, was on hand to make an appearance at Coors Brewing Co.'s booth.

It's all in the packaging: In the quest for the most visibility money can buy, messages came in all sorts of packaging. In addition to its ultra-modern display with booming music and constant advertising, PepsiCo prominently posted its logos on a trolley ferrying weary showgoers across the convention floor. Conde Nast Publications flagged the launch of its Conde Nast Sports for Women with water bottles bearing that label. Tropicana Dole Beverages outfitted workers in the shoe-shine stands with bright yellow T-shirts and logos.

Surge's surge? Coca-Cola Co.'s display contained the following information-Surge has hit a 1.6% share of carbonated soft drinks in its initial markets.

Ads vs. promotion, again: ACNielsen Corp.'s seventh annual Trade Promotion Practices Survey found trade dollars are going back to the consumer in the form of advertising and frequent-shopper programs. Off-invoice allowances, Nielsen said, are falling; they now account for 36% of the trade promotion dollar vs. 50% prior to 1995. Local merchandising dollars now account for 60% of trade promotion expenditures, Nielsen said.

Sirloin-citrus salad anyone? That's one of several recipes the Florida Department of Citrus is touting as a way to use its citrus fruits as a meal solution.

Simple answers? Kraft's booth, always among the largest and loudest, boasted "Simple answers, smart results," from several signs and banners. But when Group VP Bob Eckert couldn't immediately recall the name of a test product, he simply asked someone wearing a badge identifying him as the employee of a rival food company. "He used to work for us," explained Mr. Eckert.

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