Private label ISP to let marketers sell branded Web access

In an effort to deepen their relationships with their customers, a yet-to-be-identified Canadian financial institution and dot-com group will soon be adding Internet access to their list of customer offerings. Earlier this year, Andover, Mass.-based Navinet, an Internet access wholesaler, announced...

In an effort to deepen their relationships with their customers, a yet-to-be-identified Canadian financial institution and dot-com group will soon be adding Internet access to their list of customer offerings.

Earlier this year, Andover, Mass.-based Navinet, an Internet access wholesaler, announced it will launch a private-label Internet access service in Toronto, Montreal and Ottawa. The service will allow Canadian marketers to buy Internet time from Navinet, and in turn supply branded Internet access to their customers. Navinet provides the access (dial-up or broadband), registration, e-mail, Web site content and, if desired, customer care and end-user billing.

While he will not reveal Navinet’s partners for the launch, Brendon Howe, vice-president of product marketing and development at Navinet, says they include a financial institution and a pure-play Internet company – that is, a Web company without a bricks-and-mortar counterpart.

The fee structure for the service is at the client’s discretion – for-free, for-fee or in between – but Howe suspects companies with strong consumer relationships, like banks and telcos, could bundle the service as an element of its existing services, or take a tiered approach depending on the customer’s status. Elements like reward points or additional e-commerce-enabling capabilities would be delivered by the sponsoring brand.

In many ways, it makes sense for an ISP to bury its brand under a bigger name, according to David Ellis, president of Toronto-based research firm Omnia Communications, provided the partnering company offers the ISP a cut of its transactional revenues, such as those derived from e-commerce activities or advertising. The headlining brand, particularly in the case of a financial institution, he says, provides a very high level of trust among consumers and therefore a higher willingness on their behalf to engage in e-commerce activities.

‘Providing access is a losing business – people are already giving it away,’ says Ellis. ‘It doesn’t make sense for ISPs to hand over their bandwidth without getting something in return. If it doesn’t bring in any money, what’s the point?’

In a case where the access component is given away for free, someone has to pay, says Howe, but most of the prospects Navinet is talking to are looking at bundling it with other services, and ultimately charging for it.

Kraft Heinz beats the street, but reports slight sales slide

The company's Q2 net sales, while down slightly, reveal continued demand for snacks and pre-packaged meals.
Kraft Heinz

Kraft Heinz is reporting earnings of 78 cents a share, beating Wall Street’s estimate of 72 cents a share, thanks to continued demand for snacks and pre-packaged meals. However, the company also reported a net sales decline of 0.5% compared with the same period last year, to $6.6 billion, according to its latest Q2 earnings report, released Tuesday.

The company experienced a favourable 2.3 percentage point impact from currency and a negative 0.7 percentage point impact from its February divestiture of Hormel Foods – including the Planters peanut brand – which closed in the second quarter of 2021.

Its cheese divestiture – which included the sale of its natural cheese division to Lactalis – is expected to close in the second half of 2021, says Kraft Heinz Global CEO Miguel Patricio in this morning’s conference call.

Adjusted EBITDA slumped 5.2% versus the year-ago period to $1.7 billion and increased 6.6% versus the comparable 2019 period. Higher transportation and inflation-related goods costs continue to affect the company’s bottom line.

Kraft Heinz’ organic net sales declined 3.6% in Canada over the last three months compared with a comparable period last year, this as total net sales rose 8.8% year over year. 

However, its overall organic net sales slipped 2.1% compared with 2020 figures. This includes the negative impact stemming from exiting its McCafé licensing agreement. However, this decline was partly offset, Kraft Heinz reports, by “partial recovery in foodservice channels and retail consumption trends.”

“Food service is recovering, and recovering fast,” Patricio stressed in today’s earnings call. He said “the bet to support QSR” early in the pandemic, with individual packets of ketchups and sauces, is paying off.

Channel trends are still normalizing, he warns, and it’s too early to see how at home or away from home, will net out. “We have big ambitions for away from home business,” he said. Consumers continue to evolve how they eat, with Patricio saying that Kraft Heinz is collaborating with a popular DTC brand for its Philadelphia cream cheese.

Accrued marketing costs, the company reports, rose to $968 million from $946 million in December 2020.

“We are investing more in our brands, and better as well, building a much more creative company,” Patricio reported.

Kraft Heinz is also strengthening and diversifying its media presence, he said, driving repeat rates for those discovering and rediscovering the brand. Patricio added that the company is continuing to drive its transformation program forward, modernizing its brands and better connecting with its consumers.