Internet long on potential, short on delivery, say speakers

The dot-com business model is alluring if not downright sexy. You start it up in your garage, generate a buzz, get some financing, float an IPO and watch the riches come in. But as delegates to Strategy's Online to Profit conference...

The dot-com business model is alluring if not downright sexy. You start it up in your garage, generate a buzz, get some financing, float an IPO and watch the riches come in.

But as delegates to Strategy’s Online to Profit conference last week were reminded more than once, there’s no question that there’s an advantage to having an established brand and a good ol’ sidewalk storefront, too. For the Internet, with all its promise, is still but one channel – and one that’s being shaped and formed by both marketers and consumers.

‘There is no question that there is some

advantage to brick-and-mortar companies if they’ve invested in their brands,’ said Doug Keeley, president of ICE Integrated Communications & Entertainment, and chairman of the first day of the two-day event, held in Toronto. ‘The message coming out today is, if you are starting a dot-com and you don’t have a ton of dough, you should probably stay home. (Otherwise) you will be one of

the 75% (of dot-com businesses) who just don’t make it.’

Start-up or not, Online to Profit was also

about exposing strategies that would help

marketers thrive in an era in which the old

business-to-customer marketing model has been turned on its head.

Peter Evans, vice-president of marketing for Toronto-based e-mail marketing service provider FloNetwork, told delegates that Web-based marketing will require ever more relevant and database-driven customer offers and engaging creative formats to better-targeted prospects.

In contrast to the rosy outlook Evans and other speakers presented, Creative Good CEO Phil Terry stated flatly: ‘There is a lot of hype and I want to bust it.’

Terry pointed out that despite its promise, e-commerce also has a huge ‘unrealized’ potential – as much as $14 billion in the U.S. alone, with that number arising from lost or abandoned e-commerce purchases in 1999.

‘The Internet has failed to live up to its promise,’ he continued. ‘There is a gap between the promise and the reality for most people who use the Internet. The promise is convenience and making our lives easier; the promise is to give us access to products and services that we’ve never had before. That’s not the reality.

‘If you understand the implications of this, your business will be more successful – by simplifying and focusing. You must ask yourself: How can we solve a customer need?

‘In other words, think from the point of view of your customers.’

Meat and plant-based sales are both strong at Maple Leaf

Both priority areas performed well in the company's full-year results, helped by a boost in marketing for new products.
Maples Leaf All Natural 4

Maple Leaf Foods reported higher Q4 and full-year 2020 sales, driven by its sustainable meats and plant-based proteins. 

The CPG co. reported quarterly sales of $1.13 billion, up from $1.02 billion for Q4 2019, as well as net earnings of $25.4 million, compared to $17.5 million for the same period the year prior (an increase of 45.2%).

For full fiscal 2020, the company reported a total increase of 9.2% in sales, driven by what it says is “strong growth in both the meat and plant protein groups.”

“We have repositioned our portfolio towards two high-growth categories now representing 20% of our annual sales generating a compounded growth rate in excess of 25% over the last three years,” says Michael McCain, the company’s president and CEO.

Meat protein group sales  comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations  grew 11.3% for the quarter. 

Meanwhile, sales of plant protein products  refrigerated plant protein brands such as Lightlife and Field Roast, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels  was up 5.5% over the same period. 

Sales growth for its meat portfolio was driven by “a favourable mix-shift towards sustainable meats and branded products,” but also growth in exports to Asian markets, and pricing actions implemented to mitigate inflation and other structural cost increases, according to the company. Strong demand in the retail channel was offset by lower volume in foodservice as a result of COVID-19.

For its plant-based offerings, sales for 2020 were $210.8 million compared to $176.4 million last year, representing a growth of 19.5%, or 18.1% after excluding the impacts of foreign exchange. The segment was driven by expanded distribution of new products, continued volume increases in its existing portfolio, and pricing actions implemented to mitigate inflation and other structural cost increases.

SG&A expenses totalled $144 million for the plant group alone in 2020, with investments focused on advertising, promotion and marketing to build awareness, as well as supporting brand renovation and new product innovation. SG&A for meat proteins were $346.6 million for the full year, and the company says it expects SG&A levels and marketing investment in 2021 to be largely in line with where they were in 2020.

The company, which in 2019 announced it had gone carbon neutral, says it’s amplifying this commitment while “focusing on eliminating waste in any resources it consumes, including food, energy, water, packaging, and time.”