Published on: 24 Sep 2017
Did you have anything for breakfast this morning before you headed to work?
If I’d asked that question a few years ago the chances are that the reply would have been positive and brought back nice memories of what had been eaten earlier at home.
Things are changing though and according to a recent study for the Grocer magazine, nearly half of those surveyed who were between 16 and 34 skipped breakfast altogether. Even those who had breakfast were only likely to grab a croissant from a coffee shop on the way to the office or eat a breakfast biscuit.
The report said that “Millennials may be more clued up to food and health trends than older generations, but in terms of traditional breakfast there are empty seats at the table”.
Whilst skipping breakfast isn’t necessarily that good for your health, there are also financial health consequences for companies who produce breakfast cereals. In the UK, sales of cereal over the last 12 months are down by £40 million.
A number of companies are trying to regain some of these lost sales though.
Weetabix Limited, the company that produces yes, you guessed it… Weetabix, are now producing biscuits, bars and breakfast drinks that can be consumed on the go or taken to work to be eaten.
Weetabix has been made in the UK since 1932 but in 2012 was sold to Shanghai-based Bright Food.
Bright Food had hoped that as part of the general trend to more western eating habits in China, eating cereals would become more popular. Whilst sales of Weetabix have increased in China, the market share was disappointing as the traditional rice and steamed bread maintained their popularity for the first meal of the day.
Weetabix has now changed hands and was purchased by the US company Post Holdings for $1.7bn (£1.3bn).
Post Holdings already own the Shredded Wheat and Bran Flakes brands so the acquisition of Weetabix seems a good fit.
Back to breakfast on the go though and if you’re one of those people who struggle to get out of bed in the morning and miss breakfast then look on the bright side, if you’re getting into the office late then at least you’re closer to lunchtime.
Published on: 19 Sep 2017
Are you happy when you spend money? I guess the answer depends on what you’re spending the money on but over in China, KFC have just introduced technology which enables a person to pay for their KFC meal with a smile.
Yes, a smile.
Nothing else is needed – no bank card, no phone app. Just a smile.
That’s a pretty advanced system and involves facial recognition technology.
Customers who want to get their dose of fast food at the KFC branch in Hangzhou can leave their cash and cards behind and instead smile at a scanner, press confirm and then hey presto you’ve paid for your meal without moving your hands and you will soon be tucking into your Kentucky Fried Chicken.
Payment is taken from a cash account which has been linked to the person’s face.
China has some of the most advanced facial scanning technology in the world. Collecting images of the public doesn’t need any consent in China and the technology is likely to spread.
For example, it’s been reported that students in several universities in China are now registering by scanning their faces and lecturers will soon be able to track the facial expressions of students to see how well they are following the lectures.
It may be advisable for these students to master the act of hiding those yawns during a boring lecture and instead start to practice for the KFC they’re planning to get after the lecture…
Published on: 09 Aug 2017
If you buy a Chelsea or Manchester United football shirt and it turns out to be a fake it can be annoying but if you buy medicines and they turn out to be fakes it could be a lot worse as it could kill you.
Illegal copies and fakes of products are one of the big problems facing businesses today (£300 billion is the estimated size of the global counterfeit market) but some scientists have recently developed what they believe could be a cheap solution to the problem.
The technology is currently being developed by a company called Quantum Base and in simple terms involves placing an extremely small microdot onto the product which gives off a unique light signature.
The microdot is really small and I do mean really small – it’s a tiny flake of atoms which is a thousandth of the width of a human hair. Not only will it be impossible for a human to see but it will be unique. The flake of atoms which will make up the microdot will be unique and cannot be cloned. They will be placed on the product at the production facilities and then the atomic structures will be recorded on a database.
The technique for preventing fake products is that when an individual buys a product such as medicine or designer clothes they can scan their phone over the label and an app on their phone will identify the light source from the atomic structure on the microdot and send it to the database to confirm whether or not it is on the database.
If it is on the database, it’s genuine. If it’s not, it’s fake.
An excellent way of identifying whether the product you are buying is real or fake.
As mentioned, the technology is still be developed and made ready for the market by Quantum Base but it looks very promising in terms of helping to eradicate the problem of fake products.
Published on: 06 Aug 2017
How do you make $1 billion in 4 years?
Well, the answer is fairly straight forward if you come up with a good idea and have some good friends.
I guess it also helps if you are the famous actor George Clooney…
Mr Clooney and two of his friends – Rande Gerber (the husband of super model Cindy Crawford) and Mike Meldman the property tycoon – reportedly used to play golf together and had properties on a golf development called Casamigos (meaning House of Friends in English).
Playing golf wasn’t the only thing that they did together as friends as they also used to drink tequila. The problem was that they found that the tequila they drank was of mixed quality. Some was good but at the other extreme some was pretty bad.
It was reported that Mr Clooney suggested that they create their own tequila which “didn’t burn going down, that was super smooth and … that we could drink all day long and not be hungover in the morning”.
As a result of that idea, back in 2013 they set up a business producing Casamigos tequila and it’s done pretty well. So well in fact that the drinks giant Diageo has purchased the business for $1 billion split between a $700 million initial payment and $300 million over the next 10 years depending on performance.
Given that only 120,000 cases of the Casamigos tequila were sold last year, that’s a big figure but Diageo are obviously looking to scale up sales it up to a global audience (so far Casamigos has been targeted at the North American market).
Either way, it’s a good return for Mr Clooney and his friends and I’m sure they toasted the sale with a shot or two of tequila.
Then again, maybe they decided to celebrate with champagne and we’ll see a George Clooney champagne in a few years’ time…
Published on: 17 Jul 2017
Roger Federer became arguably the greatest ever male tennis player when he won a record 8th Wimbledon title by beating Marin Cilic but did you see what he was wearing?
Now, I’m not talking about his shoes, shorts or top but rather something less associated with the sport of tennis.
Sponsorship is big business for the top sports stars and as far as Mr Federer goes he’s doing pretty well when it comes to sponsorship. Forbes named him as the world’s highest paid tennis player last year when his prize winnings and sponsorship deals earned him over £50 million.
Winning Wimbledon was a good opportunity for Federer to add to his earnings (the prize money for winning Wimbledon was £2.2 million this year) but it was also a good opportunity for the sponsors to be associated with such a successful person (and of course hope that people will buy more of their products!)
Federer has a number of sponsors ranging from Nike to Credit Suisse but back to what he was wearing though and did you notice the watch that he wasn’t wearing during the match but was wearing when he was presented with the trophy?
Another of his sponsors is the Swiss Watch Manufacturer Rolex and after Federer won the match he quickly put his £6,000 Rolex Oyster Perpetual Datejust II onto his wrist before the presentation.
The end result was no doubt a very happy Rolex company whose watch was on the front pages of all the newspapers.
Some great publicity for the company.
Will we see this trend for tennis players putting designer watches on before they are presented with a trophy expand to other sports?
Will we see the captain of the winning team at next year’s football World Cup wearing a watch when he lifts the trophy??
Published on: 22 Jun 2017
One of life’s great mysteries for men when they are at a bar or club is why women always seem to go to the ladies “powder room” in groups.
There could soon be an equally mysterious occurrence that women will puzzle over and that is why men will soon disappear to the “gents” together during a social evening out.
Well, it won’t be to adjust their makeup or to catch up on the local gossip.
No, if UK company Captive Media has anything to do with it the visits to the toilet by men could soon be a great marketing opportunity.
It’s been estimated that on a night out a man spends on average 55 seconds relieving himself each time he visits the urinals in the gents (if you ever saw a person with a clipboard and a stopwatch behind you at the urinals now you know why…)
In the eyes of Captive Media this represents a great advertising opportunity as rather than staring blankly at the wall in front of you (or telling the person with the clipboard and stopwatch to go away) they have developed a urinal-based games console which allows men to, how can we say it but aim and shoot at targets with their “stream”.
The games are mixed with adverts and include for example a downhill skiing game which is controlled by your “stream”.
It remains to be seen what products will be advertised in this way but one thing for sure ladies is that if your boyfriend or husband returns from the gents whilst you’re out together on a social evening and he says that he’s just beaten his personal best then you know what it refers to.
Published on: 16 Jun 2017
“Smoothie drinks” have become very fashionable over recent years.
Smoothies are drinks made out of crushed fruit and are seen as a healthy alternative to carbonated drinks such as Coke or Pepsi.
Perhaps the most famous smoothie manufacturer in the UK is Innocent Smoothies. The business was set up in 1999 by three friends who famously gave up their jobs to start the business after they invested £500 on fruit and turned it into smoothies and sold them at a music festival. The business has grown since then and been a true success story.
The brand has a “quirky, playful” image as well as promoting itself to be ethically aware (it donates 10% of its profits to charity).
So, what has Coca-Cola got to do with all of this? Porter’s 5 Forces strategy model is well known to students of professional exams. See our free ExPress notes for more details but one of the forces concerns “substitute products”.
If a 5 forces analysis is done on for example the traditional Coca-Cola carbonated drink then a substitute product would be a smoothie. There is a general trend in a lot of countries towards healthier living and the threat of a substitute product such as a smoothie could be seen as a threat.
In 2009 Coca-Cola bought an 18% stake in Innocent for £30 million and then in the following year increased its shareholding to 58% for a reported £65 million. They then increased their shareholding to over 90% for an undisclosed sum. From a Porter’s 5 forces point of view this is a good move as it means that one of the substitute products is now within the Coke family.
There has been a fair amount of discussion since the aquisition about whether Innocent is still the ethical likeable “under dog” that it was given that it is now part of one of the biggest companies in the world.
One thing is for sure though and whilst it was certainly an Innocent transaction it was also definitely a well thought out strategic acquisition.
Published on: 28 May 2017
With celebrity clients such as Angelina Jolie and Victoria Beckham, Jimmy Choo is one of the most famous shoe brands in the world.
It is a real success story having been started 21 years ago by Malaysian shoemaker Jimmy Choo, who trained at the renowned Cordwainers Technical College in London, and Tamara Mellon, a former editor at Vogue magazine, with a loan from her father of £150,000.
The pair started the business after Ms. Mellon met Mr Choo during her time with Vogue. Mr Choo used to make a small number of handmade shoes which the magazine used for photo shoots. Ms. Mellon saw the potential in scaling up the business and 21 years later there are now over 150 stores around the world with prices for some shoes being well in excess of £1,000.
So, why has the business been so successful?
Whilst design and quality are obviously key features, the brand arguably took off when famous celebrities such as Julia Roberts and Beyonce started wearing them.
But it’s not just shoes that they sell. They have also expanded into items such as handbags, sunglasses and scarves. In business speak this is referred to as “brand extension”.
The original founders sold their shares in the business a number of years ago and the company is now quoted on the London stock exchange with the main shareholder being JAB Luxury GmbH, owned by the German billionaire Reimann family.
They have recently announced that they were putting the company up for sale. In a statement, they said that “The board of Jimmy Choo announces today that it has decided to conduct a review of the various strategic options open to the company to maximise value for its shareholders and it is seeking offers for the company.”
It’s been reported that the company could be worth in the region of £700 million.
So why is JAB looking at disposing of a very successful fashion brand?
Recent acquisitions made by the company may give a clue.
JAB, the gigantic investment firm backed by the billionaire Reimann family has made a number of significant purchases recently.
They already have controlling interests in food and beverage brands such as Keurig Green Mountain, Douwe Egberts, and doughnut maker Krispy Kreme.
A few weeks ago they purchased the US bakery business, Panera Bread, for $7.5bn (£6bn).
It looks therefore like the owner of Jimmy Choo is more interested in concentrating on building up its food and beverage businesses than growing a high fashion business like Jimmy Choo.
I guess we’re unlikely to see doughnuts and Jimmy Choos in the same shop…
Published on: 15 May 2017
According to the World Health Organisation, worldwide obesity has more than doubled since 1980 and more than 10% of the world’s population are now classified as obese.
In the UK, NHS obesity statistics suggest that nearly 60% of women and 70% of men are overweight.
The number of hospital admissions in the UK linked to obesity has increased 10 fold from 52,000 in 2006 to 520,000 in 2016.
Now whilst this obviously isn’t good news for the health of the individuals concerned it also raises challenges for businesses which are affected by this increase in weight.
Airlines for example will soon need to be looking at different sized seats or charging people over a certain weight for 2 seats.
Theatres and cinemas will also no doubt be reviewing seat sizes when the venues next come to be refurbished.
Clothing manufacturers will face higher average material costs and in the public sector, hospitals and ambulances will soon need to invest in stronger beds and stretchers to transport the larger patients.
According to recent reports for example, ambulance services in the UK are now having to purchase specialised ambulances costing significant amounts of money to transport the most obese patients. The London ambulance service has purchased 3 specialist bariatric ambulances and strechers which can take patients weighing up to 70 stone (444.5kg).
These ambulances aren’t cheap and can cost in excess of £100,000 each. Specialised heavy duty stretchers alone cost between £7,000 and £10,000 each.
These are some pretty significant costs and some people may argue that people should simply lose weight rather than rely on the National Health Service to fund these expenses.
Whether these people will get themselves down to the gym though is a different matter. Whilst there could clearly be an opportunity for businesses such as health clubs to try and target these individuals are they simply too busy to head to the gym and do they literally have too much on their plates to find the time?
Published on: 06 Apr 2017
There are clever frauds and there are not so clever frauds.
Both are morally wrong but this gentleman’s attempt at fraud clearly showed that he wasn’t the brightest individual. It’s also resulted in him receiving an 8 year jail sentence.
Mohammed Shareef from Harrow in the UK ran a number of ice-cream shops and thought that an easy way to fraudulently obtain money was via his VAT affairs.
If somebody is registered for VAT they have to charge VAT on their sales but they can offset any VAT on eligible expenses. If the VAT on their sales is greater than the VAT on their purchases, they pay the balance to the tax authorities. If VAT on their sales is less than the VAT on their purchases, they can reclaim the excess VAT suffered from the tax authorities.
This is where Mr Shareef’s grand plan originated.
His plan was to submit false VAT repayment claims and to do so he needed some false VAT expenses.
Mr Shareef’s plan went to his head though as instead of small amounts, he submitted false VAT repayment claims amounting to £1,669,463 over a number of years.
These claims came to the attention of the authorities and they investigated the expenses. They found that Mr Shareef clearly didn’t have the greatest criminal mind in history.
Ignoring the shops he actually owned, he instead submitted invoices for shops that didn’t even exist.
He also claimed he had no knowledge of certain documents but they were all found on his computer and investigators proved he was the author of the documents.
He also created fake bank statements but these statements were obviously fake as they had spelling errors in them. He also had fake 2012 statements where he had mistakenly put transactions in with a date of 2011.
He was found guilty of cheating the public revenue and sentenced to 8 years in jail.