Friday, 27 January 2012
Saturday, 21 January 2012
How Danny Meyer Is Going Global
Meyer, Ross, Himmel, and Flug at Union Square Events' kitchen in Manhattan Noah Kalina for Bloomberg Businessweek
By Jonathan KeehnerDanny Meyer’s burgers and shakes are poised to go global. The restaurateur who created Shake Shack has agreed to sell part of his company to Related, the New York real estate developer behind Manhattan’s Time Warner Center in Columbus Circle. For Related, the deal captures a marquee name in the restaurant world to enhance the cachet and foot traffic of its varied office, entertainment, and retail holdings. For Meyer, it provides a way to take brands such as Shake Shack and barbecue chain Blue Smoke into stadiums, parks, and other properties around the world. “The senior leaders at Related have abundant hospitality experience, so they speak our language,” says Meyer. “With them we can be more strategic in scaling our business.”
Related is buying a partnership stake in Union Square Events, the catering, sports, and entertainment unit of Meyer’s culinary empire. Events operates concessions at ballparks including Citi Field, home of the New York Mets, and caters events for the Central Park Zoo, Goldman Sachs, and the Whitney Museum of American Art. Meyer, 53, made his name with elegant New York City restaurants such as Union Square Cafe, Gramercy Tavern, and Eleven Madison Park. Stephen M. Ross, Related’s founder and chief executive officer, says he anticipates the first major project with Meyer will be Hudson Yards, the 26-acre development on Manhattan’s West Side that Related calls the biggest undertaking by a single developer in New York City since Rockefeller Center. “We can collaboratively grow across numerous opportunities,” says Ross.
Neither side would disclose financial details of their venture. The partners say Union Square Events will more than double sales within three years as Meyer opens outlets at Related projects and elsewhere. Related, which owns a $15 billion real estate portfolio and has raised more than $1.5 billion in investment funds, is developing properties including MiMA, a 1.2 million-square-foot mixed-use project on West 42nd Street in Manhattan, and the Galleria at Sowwah Square, a 355,000-square-foot shopping and dining complex in Abu Dhabi scheduled for completion this year. Having access to Meyer—and the consumers he draws—can help attract tenants to Related’s current and planned projects.
Meyer’s brands and restaurant expertise will also help Related expand into new businesses, such as providing food for sports stadiums. “We’re targeting professional sports teams and owners on a global scale,” says Kenneth A. Himmel, president and chief executive officer of Related Urban, a division that oversees mixed-use developments. With Meyer, he adds, “we’ll be able to add a new dimension to the fan experience.”
Ross, who founded Related in 1972, is the majority owner of the National Football League’s Miami Dolphins. Beyond baseball and football in the U.S., the partnership may look to break into sporting events overseas, according to Himmel, such as English Premier League Football. He envisions launching new concepts such as Asian and health-focused lines of cuisine.
Born and raised in St. Louis, Meyer opened the Union Square Cafe in 1985 on East 16th Street in New York City after working as assistant manager at Pesca, an Italian seafood restaurant in the city’s Flatiron district. He followed in 1994 with Gramercy Tavern, located north of Union Square on East 20th Street, which has consistently ranked among the most popular New York restaurants in the Zagat Survey. “Danny Meyer is probably, if not the best, certainly one of the best restaurateurs in America and the world,” says Bob Goldin, executive vice-president at restaurant researcher Technomic in Chicago. “His batting average is as good as you can get.”
Meyer began moving beyond haute cuisine in 2002 with Blue Smoke, which features “real pit barbecue” smoked over hickory and apple wood. His best-known venture, launched in 2004, is Shake Shack, whose ShackBurgers and frozen custard shakes have a cult following. Fans have been known to stand in line for an hour or more at the original Shake Shack in Madison Square Park. To accommodate the hungry, the restaurant has set up a webcam so fans can see how long the wait is before they arrive. Today there are 14 Shake Shacks in New York City, Miami, Westport, Conn., Saratoga Springs, N.Y., and the Middle East in Dubai and Kuwait City, according to the company’s website. Nationals Park, the baseball stadium in Washington, D.C., features both Shake Shack and Blue Smoke.
Berlin Dispute Erupts Over Marx, Engels Memorial in City Center
Jan. 18 (Bloomberg) -- Marx and Engels belong in the center of Berlin, the city’s top culture official, Andre Schmitz, said in a statement, rejecting a proposal by Construction Minister Peter Ramsauer to banish the monument to the outskirts.
The bronze memorial to the pioneers of Communism was erected in 1986 by the East German regime. It is located in a park near where Berlin’s royal palace once stood, on Unter den Linden, the main central boulevard.The palace, once home to Prussia’s rulers, is to be rebuilt from 2013 with government funding more than 60 years after the communist regime demolished it. Ramsauer said the rebuilding of the palace is a chance to restore Berlin’s historic core and suggested shunting the memorial to the gardens of Friedrichsfelde palace on the edge of the city in an interview with the Morgenpost newspaper.“History cannot be disposed of just like that,” Culture Secretary Schmitz, a member of the Social Democratic Party, said in a statement sent by e-mail today. Ramsauer is a member of the Christian Social Union, the Bavarian sister party of Angela Merkel’s Christian Democratic Union.“As witness to a very particular era in Berlin’s history, the Marx-Engels monument deserves a worthy place,” Schmitz said in the statement.Karl Marx (1818-1883) was the author of “Das Kapital.” Friedrich Engels (1820-1895) published volumes two and three after Marx’s death.--Editors: Jim Ruane, Farah Nayeri.
To contact the writer on the story: Catherine Hickley in Berlin at chickley@bloomberg.net.
To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.
Map Apps: The Race to Fill in the Blanks
The new cartography
By Peter BurrowsVisitors to the sprawling Powell’s Books in Portland, Ore., often grab one of the fold-up maps available at the entrances to the four-story, city-block-size store. Without one, locating a particular genre can be “daunting,” says Darin Sennett, the store’s director of strategic projects. Since April, tech-savvy customers can download a smartphone app instead. Type in the title you’re looking for and check a box to indicate your starting point, and the app displays the quickest route along with turn-by-turn directions. Thanks to the app, “people aren’t using their phones to check Amazon to see if there’s a better deal,” says Sennett. “They’re using them to look at more of our books.”
Just as MapQuest kicked off a rush to provide street-by-street navigation for Web surfers a decade ago, the race is now on to map the Great Indoors. Startups such as Aisle411, Micello, and Meridian, which worked on the Powell’s app, are creating detailed digital portraits of shopping malls, airports, arenas, and other places that were once big blank spots. On Nov. 29, Google introduced maps for more than 20 airports, hundreds of Home Depots, and every Ikea store in the U.S., all of which are now available on the search giant’s Android operating system for smartphones. “This market is getting real,” says Jeff Lewis, co-founder of one-year-old Guidebook, which has created maps for about 900 museums, industry conferences, and other clients.
Indoor mapping enthusiasts envision apps that pull up relevant information on many everyday journeys: to the roulette tables at a casino, to a Psych 101 class on campus, or to the right conference room in a labyrinthine office. In November, Wal-Mart Stores released a trip-planning iPhone app that shows the shortest path to complete your shopping list at select locations. As systems get better at determining where you are, stores will be able to beam discounts to shoppers as they go, perhaps offering 10 percent off pretzels for those who linger in front of the beer case. “Ultimately, you’ll be able to follow your phone to your seat in Madison Square Garden or to find the pair of jeans you’ve been looking for at the Gap in one of our malls,” says John Batistich, director of marketing for the Westfield Group, owner of 124 malls around the world.
At this point, the process for getting a building’s floor plan online is far from elegant. Mapping companies ask venues to send in whatever information they have—architectural drawings, engineering files, photos—and then have programmers create a digital, clickable diagram. The process is very labor-intensive, and generally done only for big, well-trafficked sites like airports. Google hopes to make indoor mapping possible even for smaller locations with a free online tool called Floor Plans, which accepts documents from building owners and generates a map. “We’re just getting started,” says Steve Lee, a director of product management at Google. “Our eventual goal is for any user of Google Maps to be able to go into any public space and be able to find their way around.”
Micello, a Sunnyvale (Calif.) startup, has digitized 8,500 locations, including 100 airports. The results are usually embedded into apps offered by the venues themselves. While its software does much of the work automatically, Micello also ships a building’s documents to “mapping factories” in India, where workers manually finish the job. The startup charges $50 per month per map, or less for companies with more than 25 locations. Since Google’s November announcement, “It seems like every big store, university, business campus, and hospital group is working on a mobile app, and a map is going to be a standard part of that,” says Micello founder Ankit Agarwal.
Shake Shack's Danny Meyer on Growing National Brand
CES Showcases Innovation on Wheels
Friday, 20 January 2012
Who Do You Trust More with Your Data: Facebook or a Bank?
If you want to know how much Web companies know about you, talk to Max Schrems. The Austrian law student used European Union privacy laws to obtain all the data Facebook had collected on him over a three-year period. It amounted to 1,222 pages of information, including copies of posts he had deleted months earlier and the time and date of each of his log-ins. “It’s very frightening,” says Schrems.
Facebook, Google, and other companies collect and use such data to make billions of dollars on targeted advertising. Now SWIFT (the Society for Worldwide Interbank Financial Telecommunication), the nonprofit global cooperative that handles wire transfers between financial institutions, is working on a system that would let Web surfers store and manage their own data, much like money in a bank account, and selectively lend it to companies that provide a benefit in return. It will allow people to “take back control of their digital assets,” says Peter Vander Auwera, a member of the nine-person team, dubbed the Innotribe, that’s working on the project.
The idea comes as privacy advocates push for tougher controls on Web companies that track users as they shop, socialize, and hang out online. To settle complaints by the U.S. Federal Trade Commission, Facebook recently agreed to obtain consent from users before sharing certain data. After a government audit in Ireland, Facebook has promised to purge data quickly from its servers when European users delete information they’ve posted. Pending legislation in the U.S. Senate and European Union would give consumers the right to opt out of data-tracking entirely. Spokesmen for Facebook and Google say the companies have taken steps to give customers more control over when their data are released.
SWIFT, though, figures that people don’t always mind sharing their data, so long as they get something in return. The Brussels-based group plans to set up and run an online network similar to the financial-transfer system it now operates, but for trading data rather than money. The way SWIFT envisions it, trusted companies such as banks and cellular carriers would have the right to set up so-called digital asset accounts to store details about users’ online activities, as well as health and financial records. Account holders could use the SWIFT system to release information to third parties at their discretion. They might agree to provide their data to a merchant in exchange for a discount, for instance, or sell information to data-collecting companies. As a nonprofit, SWIFT “has no stake in the data,” says Drummond Reed, a San Francisco entrepreneur who is advising the Brussels group. It’s a “trusted intermediary,” he says. SWIFT plans to start internal tests of the network this spring.
Creating the system is one thing. Getting people to use it is another. Under SWIFT’s plan, customers would probably have to pay to maintain digital-asset accounts, which would limit their appeal. And banks aren’t the most popular institutions these days; it’s debatable whether consumers trust them more than Google and Facebook. Those Web giants are also unlikely to consent to a SWIFT-operated data-trading network unless hordes of Web users flock to it. (Spokesmen for both companies declined to comment on SWIFT’s prototype because they are not familiar with it.) “Once a few companies defect, the entire system undergoes what economists call unraveling,” says Arvind Narayanan, a Stanford University researcher who is writing a book about online trading of personal data.
A final obstacle is SWIFT itself. Because its interbank transfer network has to be foolproof, it’s obsessed with testing and retesting new ideas before debuting them to the public. The group says that its data-trading network won’t be ready for launch for at least five years—an eternity in Internet time.
SWIFT’s management figures the project is worth pursuing, even if its only accomplishment is to shake up the group’s risk-averse culture. The interbank financial network “is well protected, for good reasons,” says Konstantin Peric, who was named in 2007 as SWIFT’s first head of innovation. “But we need to make sure that outside the castle is a sandbox for experimentation, where people can try things and fail.”
The bottom line: SWIFT’s data-trading system faces long odds with consumers, but it could spur innovation at the nonprofit.
Matlack is a Paris correspondent for Bloomberg Businessweek.Thursday, 19 January 2012
Chrysler's Francois Is Convinced `Detroit Is Back'
Washington Crosses the Delaware in Met’s Grand New Wing: Review
Jan. 18 (Bloomberg) -- The Metropolitan Museum of Art is a magnificent puzzle. The last piece of its current configuration, the New American Wing Galleries for Paintings, Sculpture and Decorative Arts, has just been put in place.
The most direct way is up a small glass elevator -- which will surely have to work like a piston to accommodate crowds.Once upstairs, however, the suite of 26 galleries is spacious. A minimalist interpretation of 19th-century Beaux Arts galleries, the arrangement is mostly sky-lit and includes high cove ceilings. Although it adds a modest 3,300 square feet, the galleries feel expansive. Their range of thematic spaces -- from monumental to intimate niches -- flows naturally.The installation of almost 600 artworks from the 18th to the early 20th century provides long-range views of classics, such as Emanuel Leutze’s 21-foot-wide “Washington Crossing the Delaware” (1851) -- America’s response to grand-manner European history painting.The Leutze work has just been restored, replete with a new hand-carved, gilded frame based on a recently discovered 1864 photograph. The frame is crowned by a commanding crest comprising weapons, an eagle, a stars-and-stripes shield and waving banners.Trumpet BlastsOne of the most famous of U.S. artworks, the painting provides patriotic trumpet blasts and is the designated hallmark of the collection.I was surprised to learn that Leutze’s “Washington” is also the most popular object in the museum. It beats out the Vermeers, Rembrandts and Van Goghs, El Greco’s “View of Toledo” and Bruegel’s “The Harvesters.”For me, it’s when the drums aren’t beating and the flags aren’t waving, when the galleries feel less like boastful history lessons, that the artworks shine.The great 19th-century U.S. landscape painters Albert Bierstadt, Frederick Edwin Church and Thomas Cole are represented here. Yet when their landscapes are compared to those by Cezanne, Claude, Corot and Poussin, the American pictures feel burdened by well-intended morality tales.Fluid StudyCole’s small study for the painting “View from Mount Holyoke, Northampton Massachusetts, after a Thunderstorm -- The Oxbow” (1836) is more fluid and convincing than the larger, stiffer finished work.You’ll find many crowd-pleasers by Thomas Eakins, Childe Hassam, Winslow Homer, Charles Willson Peale and James McNeill Whistler in galleries devoted to American Impressionism; History, Landscape and National Identity; Portraiture in the Grand Manner; the West; and the Civil War Era. There’s also, of course, John Singer Sargent’s infamous “Madame X,” the wife of a banker. Poorly received at the Paris Salon of 1884, the portrait made the painter flee to London and sent the poor, odd- shaped woman into the vale of tears.A room of works by John Singleton Copley includes the masterwork “Daniel Crommelin Verplanck” (1771), that strange little portrait of a squirrel with a seated child who is perched like a bird and has the knowing, if not predatory, countenance of a man.The new American Wing Galleries’ most compelling works are often small, humble and restrained. They include furniture, silver and folk art, such as Ammi Phillips’s portrait painting “Mrs. Mayer and Daughter” (1835-40) and a beautiful grouping of hand-carved, 19th-century wildfowl decoys.A sheet-metal, iron and gold-leaf weathervane of a bird (c. 1874), which once topped the barn of a New Jersey shooting retreat, is elegant and quirky.Make TimeThere are two little dark, moonlit masterpieces by Albert Pinkham Ryder in a corner. In the small Portraits in Miniature Gallery, you’ll find, among other gems, Emily Drayton Taylor’s coin-sized painting on ivory “Eye of Maria Miles Hayward” (c. 1930).The new galleries are packed with big favorites. Allow yourself to venture off the beaten path, away from the grandstanding and into its nooks and crannies, and you will be rewarded by an astounding range of small treasures, made in America, newly discovered.(Lance Esplund is U.S. art critic for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)--Editors: Jim Ruane, Farah Nayeri.
To contact the writer on the story: Lance Esplund in New York at lesplund@gmail.com.
To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.
The Greatest Running Shoe Never Sold
Photograph by Daniel Shea
By Bob Parks (Corrects the year the sneaker was patented.)Late one night in August 1997, 54-year-old inventor Lenn Rockford Hann placed two bottles of Gatorade near Concourse F of Chicago O’Hare International Airport, unlaced his sneakers, removed his socks, then dodged curious maintenance workers for two hours while running 13.1 miles on the walkways. His pace surprised him. He was convinced the springy, resilient surface was almost perfect. “My legs felt amazing,” says Hann, a marathoner. “I’ve been chasing a shoe that feels that good ever since.”
For years, Hann had been designing a running shoe that he hoped would give him an edge. After his airport run (in the days of lighter security, naturally), he knew he was on to something, and he became obsessed with O’Hare’s movable sidewalks. Finding a walkway in the midst of repair on a subsequent jog, he jumped into the pit to look at its clockworks. There he found rollers on each side, with nothing holding people up in the middle but the belt’s tension. The next day, Hann called the belt company, Dunlop Conveyor Belting, and learned they were adjusted to 2,500 foot-pounds of force to create the right balance.
Athletic brands spend millions every year trying to build a better sneaker that will propel them to the front of the $6.3 billion running shoe business, one of the biggest and most visible areas of sporting goods, with 11 percent growth in 2011, according to industry analyst SportsOneSource. Nearly all sneakers have a sole that looks like lasagna, composed of layers of rubber, foam, and plastic. The fluffy foam is made from ethylene-vinyl acetate, or EVA, which has its critics: EVA adds weight to shoes, and lab tests show it requires more energy per stride. Running shoe companies have long sought an EVA substitute that absorbs shock but also returns more energy. “Consumers like the cushioned feeling associated with a conventional running shoe,” says Darren Stefanyshyn, a University of Calgary researcher and former chairperson of the Footwear Biomechanics Group. “If you could provide that without using foam, you’d have a winner.”
It took him eleven years, but Hann finally converted his airport research into a breakthrough sneaker patented in 2008, a shoe with an entirely different system to cushion and propel the foot. It quickly attracted the attention of fast-growing athletic brand Under Armour, which spent two years and hundreds of thousands of dollars to develop it as the prospective centerpiece of the company’s first line of footwear. Hann’s shoe was scheduled to launch early this year and was poised to rock the footwear industry, but it never quite made it to market.
Hann is a former software engineer with glasses, short brown hair, a high domed forehead, and ears that stick out like antennae. He is talkative, relentlessly upbeat, and consistently attired in marathon T-shirts. His Volkswagen bears the license plate TNASHS, for “tenacious.”
In the years following his midnight airport jog, Hann licensed several inventions—an electronic cat toy among them—that brought him modest income, but the shoe was always his favorite project. He tried many materials before landing on carbon fiber, an ultra-strong substance that holds its shape after years of pounding. He engineered carbon fiber shock absorbers into his shoe to give it cushioning and stability in one mechanism. A hinge in the forefoot provided flexibility.
Three days before the 2002 Chicago Marathon, Hann bought industrial carbon fiber fabric and baked it in his kitchen. Once the fumes dissipated, he cannibalized the uppers of a pair of New Balance 763 running shoes for his proto-types. As he hacked off layers of EVA foam from the sneakers with a table saw, his hand slipped and the blade cut deeply into his thumb, embedding bits of blue foam into the wound. Hann rushed to the emergency room, then assembled the shoes the next day.
Natalie Dessay’s Soulful Manon Starts Paris Homage to Massenet
Jan. 16 (Bloomberg) -- France is celebrating the centenary of Jules Massenet, its most successful Belle Epoque composer.
The country’s reigning diva, Natalie Dessay, has the title role in “Manon,” one of his two masterpieces, at the Bastille Opera. There’s also a charming exhibition at the Palais Garnier, “La Belle Epoque de Massenet.”Dessay has played the frivolous Manon already in Geneva, Barcelona and Chicago -- yet, strangely, never before in Paris.While her voice has lost some of its youthful sheen, Dessay is still a perfect interpreter of that complex character -- naive, coquettish, soulful and, in the end, tragic. If you want to catch her in one of the stellar moments of her career, get the DVD of her Barcelona “Manon” with Rolando Villazon as her passionate partner.Giuseppe Filianoti isn’t in Villazon’s league. He is a small-scale Chevalier Des Grieux with a restricted top and a thick Italian accent, reminding us of the sad fact that the elegant conversational style of the Opera-Comique, where “Manon” was a staple of the repertoire since its premiere in 1884, is irretrievably lost.Paul Gay is more at ease as the Chevalier’s father. Franck Ferrari, on the other hand, is a coarse Lescaut, Manon’s cousin. The orchestra, conducted by Evelino Pido, turns in an effective though not particularly subtle performance.In an interview with the Bastille Opera’s house magazine, director Coline Serreau said that she saw no need to go on an ego trip: Thanks to her films she had plenty of possibilities to live out her fantasies. In fact, she has made her name in the movies; “Manon” is only her third opera staging.Egomaniacal ColleaguesThat laudable modesty didn’t prevent her from falling into the bad habit of her more egomaniacal colleagues to update the plots. That she does so only partially is no great help.What we see is an incoherent mix of 18th-, 19th- and 20th- century dresses (costume designer: Elsa Pavanel). Lascaut appears as a punk rocker with metal chains and red hair.The hostelry at Amiens in Act I looks like the main hall of New York’s Grand Central (sets: Jean-Marc Stehle and Antoine Fontaine). Instead of a coach, the two lovers flee on a motorbike.Nor will everybody share Serreau’s fondness of visual jokes: Des Grieux’s big number in Act II, in which he daydreams about married bliss, is illustrated by a 1950s-style poster promoting kitchen utensils. The lady devotees of the preacher Des Grieux in Act III sail into his church on roller skates.Rating: **.Garnier ShowThe exhibition at the Palais Garnier takes you back to where it all began. It brings together scores of Massenet’s operas, maquettes of their first productions, photos of the first casts, costumes and posters.You also find views of Massenet’s overstuffed apartment and snapshots from his life as a professor at the Conservatoire where he taught from 1878 to his death. Gustave Charpentier, Ernest Chausson and Georges Enesco were among his pupils.The show confirms Massenet’s reputation as a ladies’ composer. Of his 27 operas, 17 have female title roles. With quite a few of his stars, particularly the U.S. soprano Sibyl Sanderson, his first Thais and Esclarmonde, he had more than professional relationships.Maybe that was the reason why he hated his first name: “Jules” is French slang word for “pimp.”“Manon” is in repertory at the Opera Bastille through Feb. 13. “La Belle Epoque de Massenet” at the Palais Garnier runs through May 13. Information: www.operadeparis.fr.(Jorg von Uthmann is a critic for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)--Editors: Mark Beech, Farah Nayeri.
To contact the writer on the story: Jorg von Uthmann in Paris at uthmann@wanadoo.fr.
To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.
Warhol Foundation Sued by Velvet Underground Over Banana Design
Jan. 12 (Bloomberg) -- The Andy Warhol Foundation was accused in a lawsuit by The Velvet Underground of infringing the trademark for the banana design on the cover of the rock group’s first album in 1967.
The band’s founders, Lou Reed and John Cale, said that the foundation infringed the design by licensing it to third parties, according to the complaint filed yesterday in federal court in Manhattan.The band, which was active from about 1965 to 1972, formed an artistic collaboration with Warhol, who designed the banana illustration for “The Velvet Underground and Nico,” which critics have labeled one of the most influential rock recordings of all time, according to the complaint.The Warhol Foundation claimed it has a copyright interest in the design, according to the lawsuit. The Velvet Underground partnership said in the complaint that the design can’t be copyrighted because it’s in the public domain. The banana image Warhol furnished for the illustration came from an advertisement that was in the public domain, according to the complaint.The illustration appeared on the album cover without a copyright notice and no one sought to copyright it, according to the complaint. That put the design in the public domain, the group said in the lawsuit.“The banana design is a significant element of Velvet Underground’s ongoing licensed merchandising activity,” the group said. Use of the design as a trademark by the band “has been exclusive, continuous and uninterrupted for more than 25 years.”Pop ArtWarhol, one of the most celebrated Pop artists, began his collaboration with the band in 1965. The group performed at his New York studio, the Factory, and in his traveling light show, the Exploding Plastic Inevitable. Warhol died in 1987.Nina Djerejian, a spokeswoman for the New York-based foundation, didn’t return messages yesterday seeking comment on the lawsuit.Warhol’s copyrighted works have a market value of $120 million and the foundation has earned more than $2.5 million a year licensing rights to those works, according to the complaint.The Velvet Underground is seeking a judicial declaration that the foundation has no copyright to the banana design, an injunction barring the use of any merchandise using the artwork and monetary damages. The group is requesting a jury trial.In the so-called Banana Album, the Velvets chronicled the 1960s hard-drug scene in songs written by Reed such as “Heroin” and “I’m Waiting for the Man.” Released by MGM Records, the album was a commercial failure, according to the complaint. The catalog of MGM became part of Vivendi SA’s Universal Music Group, which has re-released the album.The case is The Velvet Underground v. The Andy Warhol Foundation for the Visual Arts, 12-0201, U.S. District Court, Southern District of New York (Manhattan).--With assistance from Patricia Hurtado in New York. Editors: Mary Romano, Andrew Dunn
To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at +1-415-6‘ mhytha@bloomberg.net.
Macy's Mentors Minority Vendors
Lamik's Kim Roxie in her Houston workshop Photograph by Jeff Wilson for Bloomberg Businessweek
Terry J. Lundgren, Macy’s chief executive officer, has research showing that more than half the people in the biggest Macy’s urban markets—including New York, Los Angeles, and Chicago—are Hispanic, African-American, and Asian. The chain already uses various tactics to woo minority shoppers, such as its deal to sell an exclusive line from rapper-turned-clothier Sean “Diddy” Combs. Coveting a deeper relationship with minority customers, Lundgren decided to seek out mom-and-pop retailers already serving minority consumers and get their products on Macy’s shelves.
Small businesses, however, often lack the wherewithal to supply a behemoth like Macy’s, the second-largest U.S. department store chain after Sears Holdings. So Macy’s last year developed a training program designed for minority vendors. Participants learn the basics of big-time retail, and the most promising get to sell through Macy’s. In November the retailer awarded its first orders to four graduates: two makers of cosmetics targeted at African-American and multi-ethnic women; a designer who makes dresses primarily for Hispanic women; and a designer of plus-size swimsuits. “We are doing this not just as a nice thing,” Lundgren says, “but as a business proposition.”
It’s a sizable one: By 2015, Hispanics will spend $1.5 trillion on U.S. goods and services, according to the University of Georgia’s Selig Center for Economic Growth, 50 percent more than they spent in 2010. Blacks’ buying power will expand by about a quarter, to $1.2 trillion, in that period, and Asians by more than 40 percent, to $775 billion. Macy’s forecasts its sales of goods from minority- and women-owned businesses will jump to $1 billion in two years, after rising a projected 22 percent, to $683.2 million, in 2011. (Macy’s total sales were an estimated $26.4 billion last year.) “When we get there,” he adds, “I can assure you I will raise that goal.”
The initiative wasn’t launched without some internal debate, says Bill Hawthorne, Macy’s senior vice-president for diversity strategies. “When I started on this path, there was a prevailing point of view: That we do not see color, we are all the same,” he says. “There are differences, that is the beauty of diversity. Let’s celebrate those. And let’s figure out as a retailer how to merchandise that.”
The training program is an extension of the retailer’s 13-year-old relationship with rap artist Combs, who, like many entrepreneurs, wanted to create products he couldn’t find at the time. Combs preferred urban streetwear with a more glamorous take, so he put fashions such as winter-white jackets with faux fur collars and tracksuits in glittery black velour onto Macy’s shelves. The retailer is also drawing on its experience with Lisa Price, whose Carol’s Daughter line of personal care products for African-American women has been available at Macy’s stores since 2006. Price, who created her line of body butters and oils in her kitchen, originally sold them at flea markets. Lately, Macy’s has been collecting requests from minority customers—and using them to figure out in which stores it needs to add more zero-size apparel for Asian women, brightly hued outfits for Hispanics, and hats and white suits for church-going black ladies.
In 2009, Lundgren named Macy’s Divisional Merchandise Manager Shawn Outler to head the minority vendor program. Outler unearthed about half a dozen prospects who already had boutiques and online businesses but soon realized they lacked some of the basics to scale up to service an operation of Macy’s size. So she came up with the idea for the workshop.
Macy’s partnered with Babson College, a Boston-area school specializing in entrepreneurship, and decided on a free, four-and-a-half-day crash course taught largely by Macy’s executives. Applicants were required to submit two years of financial information, product lists, and photos to a special website. Of 250 applications reviewed, Macy’s interviewed 50 candidates and selected 22 for the first program.
Wednesday, 11 January 2012
Seattle Goes Green With Marine Toilets, Big Solar Hat: Review
Jan. 10 (Bloomberg) -- In Seattle, contractors have begun digging for an office building that will eventually wear what looks like a big cocked hat.
It’s a solar-panel array topping off the five-story home for the local Bullitt Foundation.When it opens next winter, the Bullitt Center will also scrub its own water with the aid of composting toilets.The new building reflects founder Dorothy Bullitt’s aspiration to turn the Pacific Northwest into a global model of environmental sustainability.The foundation sources many of its components locally, and strives to eliminate toxins in building materials and ventilating air. Its self-imposed high standards have often been a challenge to the Miller Hull Partnership, the project’s Seattle architect.These are all requirements of the Living Building Challenge, a program to improve health and minimize building energy use and waste.Among other things, Miller Hull had to ask manufacturers to reformulate products and dig into the energy performance of desktop computers.Then they had to figure out how to do all this affordably.Airy FeelOn its small site, the Bullitt’s roof was the only place to put the solar panels needed to generate the building’s power.Since Seattle’s ubiquitous clouds admit so little sunlight, Miller Hull partner Ron Rochon, working with PAE Consulting Engineers, had to keep squeezing energy out of the building design to match the panels’ output.Geothermal wells will supply most of the heat. Offices will feel airy with high ceilings that allow much of the space to forgo electric lights in daytime. Windows will open to cool breezes during Seattle’s mild summers.The team slashed the usual energy-wasting systems to such a degree that desktop computers dominated the building’s energy demand.Even so, the building still used too much energy.The architects and engineers identified slimmed servers and efficient laptops to reduce a standard computer’s consumption of 1,150 watts to just 250, about the same as two household bulbs.They talked city officials into letting Bullitt expand the solar array by projecting the roof over the sidewalk, normally not permitted. That involved relocating power lines and persuading skeptical neighbors that the roof wasn’t too intrusive.There were more hoops to jump through. The foundation hoped to harvest drinking water from the roof and avoid chlorinating it.So far the Environmental Protection Agency has nixed that idea, though the designers are appealing its decision. To treat all the water used onsite, Rochon’s team found marine toilets that will deliver waste to a basement composting room. No one has ever done that, he said.Well-meaning as they are, I do wonder if many of these measures are worth the effort. Solar -- for now anyway -- is a lost cause in such a dim climate, especially in a city largely driven by clean hydropower.City LevelWater pollution needs to be tackled at a neighborhood or city scale, not within individual buildings.Still, there’s a crazy-like-a-fox quality to the Bullitt effort. It has encouraged a German high-performance window-wall manufacturer to build a facility in nearby Everett. A waterproofing-compound manufacturer called Building Envelope Innovations has agreed to reformulate its product without phthalates, a class of chemical compounds that may harm reproductive health.Seattle has established a 2030 District in and around its downtown to achieve carbon-neutrality by the year 2030.With Congress hopelessly gridlocked about any energy legislation and Iran blustering as usual, Seattle and Bullitt are pointing the way to a possible future. For $30 million Bullitt won’t just get a handsome, healthy, zero-energy workplace, but one that incubates job growth.(James S. Russell writes on architecture for Muse, the arts and culture section of Bloomberg News. He is the author of “The Agile City.” The opinions expressed are his own.)--Editors: Manuela Hoelterhoff, Daniel Billy.
To contact the writer of this column: James S. Russell in New York at jamesrussell@earthlink.net. web.me.com/jscanlonrussell
To contact the editor responsible for this column: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.
Velvet Underground Sues Warhol Foundation Over Banana Album
Jan. 12 (Bloomberg) -- The Andy Warhol Foundation was accused in a lawsuit by The Velvet Underground of infringing the trademark for the banana design on the cover of the rock group’s first album in 1967.
The band’s founders, Lou Reed and John Cale, said that the foundation infringed the design by licensing it to third parties, according to the complaint filed yesterday in federal court in Manhattan.The band, which was active from about 1965 to 1972, formed an artistic collaboration with Warhol, who designed the banana illustration for “The Velvet Underground and Nico,” which critics have labeled one of the most influential rock recordings of all time, according to the complaint.The Warhol Foundation claimed it has a copyright interest in the design, according to the lawsuit. The Velvet Underground partnership said in the complaint that the design can’t be copyrighted because it’s in the public domain. The banana image Warhol furnished for the illustration came from an advertisement that was in the public domain, according to the complaint.The illustration appeared on the album cover without a copyright notice and no one sought to copyright it, according to the complaint. That put the design in the public domain, the group said in the lawsuit.“The banana design is a significant element of Velvet Underground’s ongoing licensed merchandising activity,” the group said. Use of the design as a trademark by the band “has been exclusive, continuous and uninterrupted for more than 25 years.”Pop ArtWarhol, one of the most celebrated Pop artists, began his collaboration with the band in 1965. The group performed at his New York studio, the Factory, and in his traveling light show, the Exploding Plastic Inevitable. Warhol died in 1987.Nina Djerejian, a spokeswoman for the New York-based foundation, didn’t return messages yesterday seeking comment on the lawsuit.Warhol’s copyrighted works have a market value of $120 million and the foundation has earned more than $2.5 million a year licensing rights to those works, according to the complaint.The Velvet Underground is seeking a judicial declaration that the foundation has no copyright to the banana design, an injunction barring the use of any merchandise using the artwork and monetary damages. The group is requesting a jury trial.In the so-called Banana Album, the Velvets chronicled the 1960s hard-drug scene in songs written by Reed such as “Heroin” and “I’m Waiting for the Man.” Released by MGM Records, the album was a commercial failure, according to the complaint. The catalog of MGM became part of Vivendi SA’s Universal Music Group, which has re-released the album.The case is The Velvet Underground v. The Andy Warhol Foundation for the Visual Arts, 12-0201, U.S. District Court, Southern District of New York (Manhattan).--With assistance from Patricia Hurtado in New York. Editors: Mary Romano, Andrew Dunn
To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at +1-415-6‘ mhytha@bloomberg.net.
Reinventing Lincoln
The new Lincoln MKZ Floto + Warner for Bloomberg Businessweek
By Keith NaughtonOn his very first day as the new chief designer of the Lincoln line from Ford Motor, Max Wolff had, in his words, an “oh, shit moment.” Touring Ford’s design studio in Dearborn, Mich., last January, Wolff made his way to the latest model of the MKZ, Lincoln’s top-selling car, which Ford hopes will finally reverse decades of decline at Lincoln and catapult it into a pantheon with Audi, BMW, and Lexus. Trouble was, the MKZ was a dud. The boxy, narrow model had doors identical to the Ford Fusion, the carmaker’s family sedan for the common man. Its prominent grille with cascading chrome ribs had the look of your grandfather’s mustache, and its boxy headlights evoked Milton Berle’s eyeglasses. Wolff, a 39-year-old, faux-hawk-sporting Aussie, turned to the car’s designer, Solomon Song, and asked: “What were you thinking?”
As Wolff recalls, Song said: “We’ve sort of been waiting for you to turn up so that we can do something different.”
They did. One year since his arrival at Lincoln, Wolff is unveiling the redesigned MKZ on Jan. 10 at the Detroit Auto Show. The car, expected to start at about $35,000, bears little resemblance to the homely model Wolff encountered last January. Wolff, whom Lincoln hired away from Cadillac at General Motors, has retooled the car to make it lower, longer, and wider. The most striking change comes on what Wolff calls the car’s “face,” which he contends can make or break a design. Gone is the geezer grille. In its place are side-by-side sleek chrome apertures, bisected by horizontal ribs that stretch like eagle’s wings into swept-back headlights that flow into the front fenders.
Whether or not car buyers go for the sexier, sleeker Lincoln remains to be seen, but there’s no question that Lincoln needs a hit, if not a miracle. The car was the epitome of cool when JFK was in the White House and the Rat Pack was headlining in Vegas. From a sales standpoint, Lincoln reached its zenith in 1990, when 231,660 were sold. As recently as 1999, the heyday of Lincoln’s behemoth Navigator SUV, the line ranked first in U.S. sales among luxury car brands. Today, Lincoln stands eighth, its image defined largely by the black Town Cars that transport people to and from airports. (Ford stopped production of the Town Car in September.) The average Lincoln driver is 65 years old. Lincoln says it sold 85,643 cars in 2011, down a breathtaking 63 percent since the 1990 peak. The latest indignity came last month, when a 1970s-era Lincoln Continental was used to carry the coffin of deceased North Korean dictator Kim Jong Il. “Lincoln’s image is as an old person’s car or a taxi,” says Rebecca Lindland, an auto analyst with researcher IHS Automotive.
A succession of designers have tried to recapture Lincoln’s faded glory, with little success. In 2001, Gerry McGovern, now chief designer at Land Rover, crafted a slab-sided concept car in homage to the classic ’61 Continental in which President Kennedy was riding when he was assassinated. After that, Peter Horbury, who went on to become Volvo’s design director, sought inspiration from the split-bow grilles of 1940s’ Lincolns. Neither paean to the past worked.
“We’re well past the window on Lincoln of being able to relive the glory years,” says J Mays, Ford global design chief. “We’re in a situation now where we need to reinvent the brand.”
Doing so involves transforming consumer expectations about what a Lincoln looks like. “Lincoln is a brand that’s got authenticity and credentials,” says Leslie Butterfield, a luxury car specialist with Interbrand, a consulting company, and author of Enduring Passion: The Story of the Mercedes-Benz Brand. “But it’s important that the design be a break with tradition. I don’t want to feel I’m buying Old Lincoln, I want to feel like I’m buying New Lincoln.”
Tuesday, 10 January 2012
Rovio's Stalbow on Angry Birds Marketing, Film
Tebow-Mania Helps Companies Cash In
Seattle Goes Green With Marine Toilets, Big Solar Hat: Review
Jan. 10 (Bloomberg) -- In Seattle, contractors have begun digging for an office building that will eventually wear what looks like a big cocked hat.
It’s a solar-panel array topping off the five-story home for the local Bullitt Foundation.When it opens next winter, the Bullitt Center will also scrub its own water with the aid of composting toilets.The new building reflects founder Dorothy Bullitt’s aspiration to turn the Pacific Northwest into a global model of environmental sustainability.The foundation sources many of its components locally, and strives to eliminate toxins in building materials and ventilating air. Its self-imposed high standards have often been a challenge to the Miller Hull Partnership, the project’s Seattle architect.These are all requirements of the Living Building Challenge, a program to improve health and minimize building energy use and waste.Among other things, Miller Hull had to ask manufacturers to reformulate products and dig into the energy performance of desktop computers.Then they had to figure out how to do all this affordably.Airy FeelOn its small site, the Bullitt’s roof was the only place to put the solar panels needed to generate the building’s power.Since Seattle’s ubiquitous clouds admit so little sunlight, Miller Hull partner Ron Rochon, working with PAE Consulting Engineers, had to keep squeezing energy out of the building design to match the panels’ output.Geothermal wells will supply most of the heat. Offices will feel airy with high ceilings that allow much of the space to forgo electric lights in daytime. Windows will open to cool breezes during Seattle’s mild summers.The team slashed the usual energy-wasting systems to such a degree that desktop computers dominated the building’s energy demand.Even so, the building still used too much energy.The architects and engineers identified slimmed servers and efficient laptops to reduce a standard computer’s consumption of 1,150 watts to just 250, about the same as two household bulbs.They talked city officials into letting Bullitt expand the solar array by projecting the roof over the sidewalk, normally not permitted. That involved relocating power lines and persuading skeptical neighbors that the roof wasn’t too intrusive.There were more hoops to jump through. The foundation hoped to harvest drinking water from the roof and avoid chlorinating it.So far the Environmental Protection Agency has nixed that idea, though the designers are appealing its decision. To treat all the water used onsite, Rochon’s team found marine toilets that will deliver waste to a basement composting room. No one has ever done that, he said.Well-meaning as they are, I do wonder if many of these measures are worth the effort. Solar -- for now anyway -- is a lost cause in such a dim climate, especially in a city largely driven by clean hydropower.City LevelWater pollution needs to be tackled at a neighborhood or city scale, not within individual buildings.Still, there’s a crazy-like-a-fox quality to the Bullitt effort. It has encouraged a German high-performance window-wall manufacturer to build a facility in nearby Everett. A waterproofing-compound manufacturer called Building Envelope Innovations has agreed to reformulate its product without phthalates, a class of chemical compounds that may harm reproductive health.Seattle has established a 2030 District in and around its downtown to achieve carbon-neutrality by the year 2030.With Congress hopelessly gridlocked about any energy legislation and Iran blustering as usual, Seattle and Bullitt are pointing the way to a possible future. For $30 million Bullitt won’t just get a handsome, healthy, zero-energy workplace, but one that incubates job growth.(James S. Russell writes on architecture for Muse, the arts and culture section of Bloomberg News. He is the author of “The Agile City.” The opinions expressed are his own.)--Editors: Manuela Hoelterhoff, Daniel Billy.
To contact the writer of this column: James S. Russell in New York at jamesrussell@earthlink.net. web.me.com/jscanlonrussell
To contact the editor responsible for this column: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.
Sunday, 8 January 2012
Saturday, 7 January 2012
Michael Jackson's Estate Wants to Keep Thrilling
Long Live the King: Michael Jackson's executors are intent on pitching the artist to a new generation of fans Ho New/Reuters
More than two years after his death, Michael Jackson is still moonwalking to the bank. Already one of the best-selling artists of all time, the singer was the top-selling act of 2009, thanks to a post-mortem surge in interest in his albums. That raised his career total to more than 750 million records worldwide. This Is It, the backstage look at Jackson’s unrealized final tour, was released four months after his death and became the highest-grossing concert film ever. In the 18 months after his passing, his estate reported that it collected $310 million from music, merchandise sales, and its share of publication rights on a music catalog that includes songs by the Beatles, Elvis Presley, and Jackson himself.
Now the hard part begins. As unseemly as it may sound, the first year of a celebrity’s death can be a bonanza. “When a star first dies, fans are desperate for just one more performance,” says Mark Young, a University of Southern California professor who specializes in sports and entertainment. Maintaining that buzz could be a challenge for even the King of Pop as fans move on to the next Lady Gaga-du-jour. Jackson wouldn’t be the first king to fade. The Elvis Presley estate, long the gold standard of money-making by dead stars, now has all the earmarks of an aging brand. In 2010 the estate generated $57 million for CKX, which owns the rights to the Elvis name.
Not bad for someone who’s been dead for more than 30 years. Still, tourist visits fell in five of the last six years at Graceland, Presley’s Memphis home, which provides more than half the estate’s revenue. Occupancy at the Heartbreak Hotel next door slid from 80 percent in 2006 to 67 percent in 2010. That’s a reason the estate scrapped plans to develop a hotel and convention center adjoining Graceland, taking a $900,000 write-off. “We learned a lot from the Elvis estate, and we see opportunities,” says John Branca, Jackson’s former lawyer who is co-executor for the estate with music executive John McClain.
Branca has tackled some urgent financial issues. He refinanced $300 million in debt that was pledged against the singer’s 50 percent stake in Sony/ATV, the music catalog behind much of his wealth. The estate paid off Jackson’s $4 million mortgage on the family home in Encino, Calif., and paid $35 million to concert promoter AEG to satisfy debts from the singer’s aborted tour. In all, Jackson’s debt was cut to around $300 million from $500 million. In November the estate was part of a group that agreed to pay $2.2 billion for EMI’s music publishing business, bolstering the revenue stream for its beneficiaries—Jackson’s mother Katherine, his three children, and some unnamed charities.
Now, the estate is focusing on projects to keep the Jackson flame alive for long-time fans while introducing younger audiences to his work. Jackson left behind enough music for one more album, according to a person with knowledge of the singer’s business. (A 2010 album of new songs that the estate released sold a half-million copies.) Plans for a biopic film have been shelved, however, until the right script and director come along. The executors can wait: The estate has rights to Jackson’s music, so an unauthorized film is unrealistic.
The estate signed with Ubisoft for a video game Branca hopes will help introduce a new generation to moonwalking like the master. It also paid half the $60 million production cost for Michael Jackson: The Immortal World Tour, a show by Cirque du Soleil that opened in October. Rather than backing a show anchored on Broadway or in Las Vegas, Branca opted for a touring show in hopes that fans will bring their kids—who later may become fans themselves. The estate gets half of ticket and merchandise sales plus royalties.
Once The Immortal’s U.S. tour is over, foreign versions will continue. A permanent Cirque show will open in Las Vegas in 2013, along with an interactive museum where fans can dance with the mummies from the Thriller music video. A Broadway show and a tribute concert tour could be next. “There’s a whole generation out there who doesn’t know about Michael and his music,” says Branca. “We’re going to change that.”
The bottom line: Thanks in part to a wave of fan interest, Michael Jackson’s estate was able to trim about $200 million from his debts after his death.
Grover covers the media and entertainment industry for Bloomberg Businessweek in Los Angeles. Fixmer is a reporter for Bloomberg News.Weight Watchers Stock Soars 47% in 2011
Wendy's Goes Beyond the Dollar Menu in Japan
In the age of the gourmet hamburger, there’s no shortage of pricey patties. At his Miami and Manhattan eateries, chef Daniel Boulud serves up a $34 burger packed with braised short ribs and truffles. The herb butter-spiked classic at New York’s 21 Club is priced at $32. And at Gordon Ramsay’s Maze Grill in London, the burger will set you back 15 quid ($23).
To that list now comes an unlikely addition: Wendy’s. The third-biggest U.S. fast-food chain hopes to win over Japan’s trend-driven consumers with the Foie Gras Rossini burger, a 1,280 yen ($16) hamburger topped with truffles and goose-liver pate. The premium burger debuted at Tokyo’s Omotesando luxury shopping district on Dec. 27 and will eventually be sold in 100 Wendy’s restaurants across the country. “We think the fast-food market here is ready for something different,” says Ernest Higa, chief executive officer of Wendy’s Japan.
This is Wendy’s second run at the world’s second-biggest fast-food market. It quit Japan in 2009 after local partner Zensho Holdings declined to renew an agreement. Its new joint venture is with Higa Industries, which previously operated Domino’s Pizza stores in Japan.
Wendy’s is the most U.S.-dependent of the three major fast-food chains. The Dublin (Ohio) company derives 92 percent of revenues from its home market and has posted losses in six of the past eight quarters. Wendy’s aims to triple the number of restaurants overseas to about 1,000, Chief Executive Officer Emil Brolick told analysts in November. Darrell van Ligten, international division president, says Wendy’s hopes to eventually have 700 restaurants in Japan. That compares with about 3,300 for McDonald’s and 42 for Burger King.
While Japan is often portrayed as a tradition-bound culture, its consumers eagerly embrace fads. To feed that hunger, companies often resort to limited-time-only products. For the launch of Windows 7 in 2009, Burger King teamed up with Microsoft to introduce a seven-patty burger. Since 2010, McDonald’s Holdings Japan has been running special promotions under the Big America banner that feature burgers with names such as the Beverly Hills and the Grand Canyon.
The pressure to stand out from the crowd is likely to intensify amid a weak economy. McDonald’s is forecasting sales of 304.5 billion yen this year, a 25 percent decrease from 2008. “With the economic situation, you need to bring something that is unique and exciting,” says Higa, adding that the “new fashion” of high-end fast food will give Wendy’s what it needs to thrive.
The bottom line: Wendy’s is betting that premium fare like its new $16 foie gras burger is the key to unlocking the world’s No.?2 fast-food market.
With Eleanor Warnock Cheng is a reporter for Bloomberg News in Tokyo.Heineken Finds Help South of the Border
Heineken’s namesake beer was the first foreign brew to come to the U.S. after Prohibition ended in 1933, and being first helped fuel its success for decades. The Dutch company ceded its No.?1 import crown to Grupo Modelo’s Corona in the 1990s as more youthful drinkers were drawn to the lighter taste and fun lifestyle associated with the Mexican brand. Now Heineken is counting on its own champion from south of the border to bolster its U.S. standing: Dos Equis. The fast-growing Mexican beer, which Heineken picked up as part of its €5.4 billion ($7 billion) acquisition of Fomento Economico Mexicano’s beer brands in 2010, is key to plans to revive its fortunes in North America. Dos Equis is “our shining star” in the U.S., says John Nicolson, head of the Americas unit. “We’ve got to be young. We don’t want to be part of the past.”
Sales of Dos Equis, named for the two Xs on its label, soared 17 percent in the third quarter, compared with the Heineken brand’s 1 percent sales decline and industry-wide drop of about 2 percent, according to research by Sanford C. Bernstein analyst Trevor Stirling. At the core of Dos Equis’s success is effective marketing, he says. That includes its “Most Interesting Man in the World” ad campaign, featuring tales of one worldly man’s experiences—and the catchphrase “I don’t always drink beer, but when I do, I prefer Dos Equis.”
The offbeat spots, which won a Titanium Lions award at the ad industry’s Cannes Lions International Festival of Creativity in 2009, have shown the character doing everything from jumping out of an airplane strapped in a kayak to arm-wrestling with heads of state including Mao, Stalin, and Churchill. All the while, the copy trumpets his cool. (“If he were to pat you on the back, you would list it on your resume,” notes one spot.)
The ads, created by Euro RSCG Worldwide, a unit of Havas, have gained a cult following on YouTube and Facebook. Such buzz has been crucial to getting the brand on the radar screens of younger beer drinkers, and sales of cases surged 21.5 percent soon after the campaign started. “Dos Equis has done well because of its very good advertising,” says Andrew Holland, an analyst at Societe Generale. “[The brand] Heineken used to be the master of good, quirky advertising, and they don’t seem to have managed that” in the last few years.
The Americas, including the U.S. and Brazil, is Heineken’s second-biggest market after Western Europe, accounting for 23 percent of the brewer’s €8.36 billion first-half sales. There are limits to how much Dos Equis can boost the company’s momentum, however. That’s because the Mexican brew represents just 0.6 percent of U.S. beer market volume, vs. the Heineken brand’s 2.2 percent in 2011—down from 2.6 percent in 2006, estimates consumer researcher Euromonitor. Increasingly, the Heineken brand is thought of as a quaff for older American drinkers. It’s been scaling back some distribution outlets in the U.S. after it became “ubiquitous” during the 1990s, losing its aura of exclusivity, Nicolson says.
The company is trying to reposition the flagship brand to again appeal to young affluent drinkers. New television spots created by Wieden & Kennedy, which depict a young hipster’s bacchanalian whirls through parties and restaurants, look more like upscale fragrance or fashion ads than beer promos. “The new, much edgier global ad campaigns for Heineken appear to be working to arrest the decline,” says Sanford C. Bernstein’s Stirling. The Heineken brand’s volume grew 3.9 percent in the four weeks ended Nov. 26, Ian Shackleton, an analyst at Nomura, said in a note, citing Nielsen data. (Dos Equis Lager Especial bounced 25.6 percent and Dos Equis Ambar 18.1 percent.) The Heineken brand, which in December announced a global partnership with Facebook to collaborate on digital campaigns, now has over 5 million “Likes.”
Still, Banco Santander analyst Anthony Bucalo doubts the flagship brew can show much long-term improvement. “A lot of the big macro brands have about 25-year life cycles where they start to peak out and start declining,” he says. Heineken “hit that point in the middle of the last decade,” he says. “They can stabilize the business, but the future of Heineken USA is in the Dos Equis brand.”
The bottom line: Heineken, once the No. 1 import in the U.S., has stalled. It’s pinning its hopes on Dos Equis, which grew 26 percent in November.
Fletcher is a reporter for Bloomberg News.Show Business: King of Pop Still Raking It in
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Thursday, 5 January 2012
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Wednesday, 4 January 2012
Lavish Homes of Emir, Gold Digger Star in Paris Show: Review
Jan. 4 (Bloomberg) -- He married the daughter of a U.S. robber baron and, with her fortune, built the Palais Rose, the most sumptuous mansion in Belle Epoque Paris.
In 1906, Anna Gould divorced Boni de Castellane, her profligate and philandering husband, and in 1969, the Palais Rose was demolished to make room for a dull luxury block.An exhibition at the Palais de Chaillot in Paris revives such bygone glories and invites you to explore a local specialty, the “hotel particulier.”Under the monarchy, Parisians reserved the honorary title of “palais” to royal residences. Other mansions, even the most palatial, were modestly called “hotels particuliers” or private townhouses.Unlike their Roman or Florentine peers, French aristocrats didn’t flaunt their wealth: Most hid their residences behind high walls. You had to be invited to discover the splendors inside.Some mansions are now museums and open to the public, such as the Musee de Cluny, the Musee Carnavalet or the Musee Picasso. Most, though, have morphed into ministries or embassies and are off limits to tourists.At the Cite de l’Architecture, a wing of the Palais de Chaillot, you can have a look behind the closed doors even if you don’t know anybody in the French administration or the corps diplomatique.The first section recreates the ground floor of an archetypal hotel particulier with its traditional sequence of rooms -- the entrance hall, the antechamber, the salon, the dining room and the gallery.Trendy AreasAfter that introduction, you enter the historical part of the show which relates how the fashionable neighborhoods changed over time.In the Middle Ages, a man of taste built his mansion near the Louvre. Under Louis XIII, the fashionable quartier moved to the Marais and the Ile Saint-Louis, under Louis XV to the Saint- Germain and Saint-Honore suburbs, and in the 19th century to the new neighborhood around Parc Monceau.The changing styles are illustrated with maquettes, paintings, photographs and architectural drawings of outstanding specimens.One of those, the Hotel Lambert on the Ile Saint-Louis, made headlines in recent years after the Rothschild family sold it to a brother of the emir of Qatar. His plans to modernize the venerable building sparked a storm of protest: The authorities were accused of sacrificing France’s national heritage to the whims of Oriental potentates.After a venomous debate, a compromise looks to be in the works.Great CocotteAnother gem, the Hotel Beauharnais, was bought in 1818 by the King of Prussia and is now the residence of the German ambassador. Eugene de Beauharnais, son of Josephine who later married Napoleon, almost went bankrupt decorating his acquisition in the then fashionable Empire style.It’s the most ravishing ensemble of that period in Paris.The exhibition is discreet about the turbulent life of La Paiva, the great cocotte who built the only surviving hotel particulier on the Champs-Elysees.Born Esther Lachmann in Moscow, the daughter of a Jewish weaver, she decided that she wasn’t made for a life in poverty and became the mistress of a series of rich men. One of these, a Marquis de Paiva, married her only to discover that his fortune couldn’t keep up with his wife’s lifestyle.After inviting his creditors to an opulent last supper, the marquis shot himself. The mansion now belongs to the Travellers Club.In niches, the show explores characteristic details of the hotel particulier: facades, doors, wall decorations, ceilings, gardens.Boni de Castellane’s knowledge of those details and his exquisite taste helped him survive in style after his divorce: He became an antiques dealer, with mostly U.S. customers, and titled his memoirs “L’Art d’Etre Pauvre,” or “The Art of Being Poor.”“L’Hotel Particulier: Une Ambition Parisienne” is at the Cite de l’Architecture et du Patrimoine through Feb. 19. Information: www.citechaillot.fr.(Jorg von Uthmann is a critic for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)--Editors: Jim Ruane, Mark Beech.
To contact the writer on the story: Jorg von Uthmann in Paris at uthmann@wanadoo.fr.
To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.
Design That Transforms the Eating Experience
Food is the most fundamental product we consume, yet most people don’t appreciate the amount of research, design, and engineering that goes into many of the items at their local supermarket or favorite restaurant. Although design's role in other consumer goods, especially electronics, is widely acknowledged, the contribution of product design to food and culinary items is often overlooked. Designers have, in fact, come up with countless innovations to command shelf space and redefine established categories in the hotly contested culinary marketplace.
As is the case with most new products, delivering a memorable user experience has become an important goal of many food-related items. Whether it's an attempt to renew interest in a proven brand or a fresh approach to bring consumers together through food, a well-designed eating experience can sooth, satisfy, and entertain us in the most powerful ways.
The past year has seen the introduction of hundreds of new food-related products, not to mention the start of innumerable food-related trends. Here’s a brief roundup of the designs and innovations I predict will have staying power, as well as a few I’m hoping will slide off the cultural radar faster than fried eggs on a Teflon pan.
Joel Delman is creative director for the Los Angeles office of Product Development Technologies in Lake Zurich, Ill. He blogs about product innovation at www.productfetish.com
Are Consumers Going to Keep Spending?
Twelve Decades of Innovations in Food Design
From Jell-O to Jiffy Pop, TV dinners to Tupperware, product design has radically altered the way we carry, cook, and consume food. While many food innovations fail the test of time (see a brief review of this past year’s new products and designs), some endure to become cultural icons of the most visceral kind—smells, tastes, and experiences that are part of our lives and social interactions to a degree that rivals the cultural contribution of any smartphone or electronic gadget. The following slides offer some of the innovations that have changed our food experience over the past 100 years.
Joel Delman is creative director in the Los Angeles office of Product Development Technologies in Lake Zurich, Ill. He blogs about product innovation at www.productfetish.com.