How the Decadent Cookie Line Conquered Chicago Contests

Book Excerpt: Loblaw's President's Choice Label Revolutionized the Concept of Private Label

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"The Edible Man," Canadian journalist Anne Kingston's book on former Loblaw International Merchants President Dave Nichol ($26.95, Macfarlane Walter & Ross, Toronto) provides an in-depth look at the way Loblaw's President's Choice label revolutionized the concept of private label. This excerpt focuses on Mr. Nichol's drive to bring President's Choice to prominence in the U.S., with the Decadent chocolate chip cookie's introduction at Jewel stores in Chicago.

To have A.C. Nielsen count the Decadent the No. 1 cookie in Chicago, it was necessary to increase its shelf turnover at Jewel by eight times. There were several ways to achieve this goal. Most crucial was ensuring the support of Jewel store managers so that they would give the cookie prominent display. To do this, LIM arranged in-store contests with prizes for managers, assistant managers, and supervisors who sold the most cookies.

They debated giving away silk shirts and ties, covered with graphics of President's Choice cookie packages. But Nichol had other ideas.

"Maybe a trip to Kitchener to see the [cookie] plant will do it," he joked.

"Second prize will be two trips to Kitchener." Then, he was hit by another inspiration. "What about a year's supply of my beer? What about coupons I could give away that the beer stores would accept for free beer?" He was off on a beer riff. "Yeah, that's going to turn the store managers's cranks. We could give them a choice. They could have coupons for beer, or soft drinks or Memories of Champagne."

Nichol's eyes swept the room. "It's absolutely essential that by the end of this year the Decadent is the No. 1 cookie in Chicago," he said. "Do you get that?"

"Right," said [Scott Lindsay of Loblaw procurement arm Intersave]. "You know what Nabisco salesmen are doing at Jewel? They're turning the package over so the French shows."

Packaging law in Canada required that one side be printed in English, the other in French. Nichol hooted; he considered this a good sign, evidence that the guys at Nabisco were aggravated.

The meeting turned to pricing schedules, mapped out on a board beside him. Nichol paced back and forth. "On the first of May, I'd like to see them come back with a buy-one-get-one-free, and a two-packages-for-$4 for six weeks," he said. "In this period I want to go from a 14-ounce to a 12-ounce pack so we can get EDLP of $1.99."

EDLP was grocery lingo for "everyday low price." It became a popular strategy in 1992 when the major manufacturers, realizing that they were getting squeezed on in-store specials, decided to institute one fixed price.

Using the smaller format would enable LIM to lower the price to $1.99 and make it an easier sell.

Still, Nichol was not content. "What other ideas do we have?" he asked. Lindsay, who had been taking notes, spoke haltingly. "The only thing we thought of was the possibility of starting TV or radio [ads] in April or May. Not only do we need to sell more bags of cookies, we also need more customers to buy bags of cookies." Nichol quickly dismissed the suggestion. "I don't think at this stage we can move people into Jewel by talking about the Decadent," he said.

A larger concern was ensuring that bags sold in the two-for-one promotion would be recorded as two bags rather than one, by International Research Inc., the New York-based marketing firm that tracked sales for Jewel. "If they don't, I think we'll be in trouble," Nichol said.

He pondered the plan for a moment. "The one thing that's missing is sampling. We should do this in July," he said, writing "sampling" on the board. In-store sampling was expensive, but essential to getting shoppers to try new products.

"What about going on TV with the results of a taste test against Chips Ahoy! in Chicago?" Lindsay suggested. "We can say of 100 people sampled, 99 found the Decadent better. And you can only get it at Jewel."

Nichol liked this idea. "It also sets the stage for the No. 1 cookie being something you talk about."

By the end of April, earlier than expected, A.C. Nielsen Co. had declared the Decadent the best-selling cookie in Chicago. That performance was repeated in May, although in June it fell to third, behind Chips Ahoy! and Oreo.

That was all Nichol needed. In August, he went on television to announce that the Decadent was Chicago's No. 1 cookie. Nielsen protested. It allowed clients to use tracking data in internal communications and within the trade, but publishing or advertising was out of the question. Nielsen account manager Tracey Hodgen went to visit Nichol. He backed down and the commercial was taken off the air. Again in September, the Decadent had catapulted to first place. In the year ended September 1993, sales of President's Choice cookies in the U.S. were $21.4 million, up 140% from the year earlier. In fact, while total sales in U.S. supermarkets rose 37% that year, the sales of PC products jumped 127%. Riding the popularity of the Decadent, President's Choice products were available in 1,200 stores in 34 American states in early 1994. "President's Choice," Brian Sharoff, president of the New York-based Private Label Manufacturers Association, told Canadian Business magazine, "raises the standards by which every retailer who has a private-label program will have to judge the consequences of that program in terms of quality and price."

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