April 27, 2024

Archives for January 2012

Advertising: Tabasco and Frank’s RedHot in a Buffalo Wing Sauce Duel

Now, a hot sauce war has broken out in time for the Super Bowl, perhaps the most snack-centric day of the year. According to a survey from the Retail Advertising and Marketing Association, consumers who plan to watch Super Bowl XLVI on Sunday will spend $11 billion on food and other goodies, compared with the $10.1 billion they said they would spend before Super Bowl XLV last year.

One hot sauce warrior is the McIlhenny Company, which is introducing a seventh flavor in its Tabasco line, Tabasco Buffalo Style hot sauce, joining varieties like the original, known as Tabasco pepper sauce, and chipotle pepper sauce.

The new flavor is celebrated in a campaign by Ogilvy West in Los Angeles as “from the people who perfected hot sauce,” offering “classic Buffalo flavor with just the right amount of heat.”

As those ads begin, Tabasco’s principal rival, Frank’s RedHot sauce, is expanding to national television a sassy campaign, previously in print and on radio, that carries the theme “I put that — — on everything.” ( The campaign, with a budget estimated at $15 million, is created by Euro RSCG New York.

In the frank Frank’s commercials, a bleeping sound is heard over the word as it is uttered by a mischievous older woman named Ethel. On screen, her mouth is covered by a splat, as if a censor spilled sauce on the film.

Ethel adds “a little bit of heat” to everyday life, “and not only metaphorically,” said Rahul Sabnis, executive creative director at Euro RSCG New York, part of the Euro RSCG Worldwide unit of Havas.

Because “we want to be clever and fun, but we don’t want to go over the top,” he added, the intent is to portray her as “your grandmother being a straight talker.”

The maker of Frank’s, Reckitt Benckiser, also plans to send a branded bus on a cross-country Frank’s to the People tour. It starts this week in Indianapolis, this year’s host of the Super Bowl.

When Buffalo wings were first served, in Buffalo, N.Y., in 1964, Frank’s RedHot was an ingredient in the sauce. Frank’s also offers a RedHot Buffalo Wings sauce, introduced in 1996, and even sells a flavor called Frank’s RedHot Hot Buffalo Wings.

The heating up of the hot sauce category is indicative of the increasing efforts by marketers of packaged foods to take advantage of a trend that began in 2008, when consumers seeking to economize started eating at home more often. That dovetailed with another change, a yen for bolder, intensely flavored foods.

For instance, the inside front cover of the Feb. 6 issue of Time magazine carries an ad for Lay’s Kettle Cooked Mesquite BBQ potato chips, sold by the Frito-Lay division of PepsiCo. “BBQ so real,” the headline promises, “you’ll want to wipe the sauce off your face.”

(Hmmmm. Maybe Lay’s could flavor a chip with Tabasco or Frank’s RedHot.)

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“We did a ‘needs gap’ study with consumers in 2010,” said Martin Manion, vice president for corporate marketing at the New Orleans office of McIlhenny, and “over 80 percent of the people we talked to thought that Buffalo would be a great addition to the Tabasco portfolio.”

Although “Frank’s is aligned with chicken wings through the story of Buffalo wings,” Mr. Manion said, in taste tests with consumers “six in 10 preferred the Tabasco formula to the one we tested against.”

The campaign promotes the product as “a Louisiana twist on something you’re familiar with,” he added, echoing a commercial that declares, “Buffalo, New York, meet Buffalo, Louisiana.”

“What McIlhenny has done is try to understand and remain on the leading edge of how palates have evolved over time,” Mr. Manion said. “When we introduced chipotle sauce, 90 percent of people couldn’t pronounce it.”

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The campaign for Tabasco Buffalo Style, with a budget estimated at $3 million, includes television, radio and online ads; the Tabasco Web site, tabasco.com; and social media like Facebook and Twitter. The campaign carries a theme, “Are you one of us?,” created by Ogilvy West for the Tabasco brand.

“There are people who get hot sauce, and those who don’t,” said Colin Drummond, senior partner and head of planning at Ogilvy West, part of the Ogilvy Mather Worldwide unit of WPP, and Tabasco is particularly interested in those “we call ‘zesties,’ who share a zest for life and the food they eat.”

His colleague at Ogilvy West, Peter Kang, senior partner and executive creative director, said: “It’s kind of like life turned up to 11. Zesties carry Tabasco with them to put on their Egg McMuffins in the morning and on their dinners at four-star restaurants.”

As Reckitt Benckiser confronts competition in hot sauce, it is introducing a $20 million multimedia campaign — also by Euro RSCG New York — for another of its pantry staples, the French’s line of mustards, which carries the theme “Friends. Family. French’s.” In mustards, too, flavor is a focus, with ads for products like Spicy Brown and Dijon With Chardonnay along with original yellow.

Although they are “so different as brands,” said Paolo Zotti, vice president for marketing in the food division of Reckitt Benckiser in Chester, N.J., each campaign is about “trying to leverage and nurture a brand experience” centered on variety.

“I’m a romantic marketeer,” he added. “You’re successful if people love your brands.”

Article source: http://feeds.nytimes.com/click.phdo?i=aff80e06ac7e6ffe76243e8662e52ad2

Expanding Reach, Cuomo Creates Second Cop on Financial Beat

But one could be forgiven for being confused. Since Gov. Andrew M. Cuomo installed him as superintendent of a new state agency, the Department of Financial Services, which became active in October, Mr. Lawsky has been making headlines normally associated with attorneys general.

He has forced insurers to turn over more than $100 million in unpaid death benefits to surviving family members, dispatched rafts of subpoenas to banks, and pressed lenders to curb abusive foreclosure practices.

Critics say the new financial services agency reflects Mr. Cuomo’s expansive view of his executive powers, which he has continually sought to strengthen during his 13 months in office. They also see an attempt by the governor to encroach on the turf of Attorney General Eric T. Schneiderman, a fellow Democrat with whom Mr. Cuomo has had a precarious relationship.

Supporters say it is an auspicious time to have two cops on the financial beat — after all, the agency, which subsumed the existing Banking and Insurance Departments, came into being as the Occupy Wall Street movement was finding its footing and focusing its critique on those very industries.

Mr. Lawsky, in his first few months on the job, is using a playbook that he helped write as a top lieutenant in the attorney general’s office when Mr. Cuomo held that post, gravitating toward headline-grabbing cases while looking for negotiated solutions with industry executives.

“We set our priorities here often simply based on what the big issues are,” Mr. Lawsky, 41, said in an interview. “Does that come from the world of Andrew Cuomo? Yes, because government shouldn’t be a waste of time. Government should be about making a difference in people’s lives.”

For his part, Mr. Schneiderman has not allowed himself to be rolled over.

Last year, he helped beat back an effort by Mr. Cuomo’s office to give Mr. Lawsky and the new agency even more expansive powers that would have cut into the heart of the attorney general’s jurisdiction.

The governor’s proposal, which would have allowed Mr. Lawsky to investigate violations of the Martin Act, the sweeping state securities law used by former Gov. Eliot Spitzer and his successors to pursue financial malfeasance, alarmed Wall Street and even academics.

Writing in The New York Law Journal, Jonathan R. Macey, a Yale Law School professor, called it “a naked and highly suspicious power grab.”

And in a recent interview, John C. Coffee Jr., a law professor at Columbia University, put it this way: “Cuomo made his fame as attorney general, and he sort of treated that jurisdiction as portable and took it with him as governor.”

The Cuomo administration backed off, dropping the Martin Act provision. Nonetheless, the new agency, besides absorbing two major regulatory bodies, has gained a number of new powers. It has broader authority to fight fraud beyond the insurers and state-chartered banks it licenses, and its reach has extended to all manner of financial products, including student lending, credit cards and tax refund anticipation loans.

Eric R. Dinallo, a partner at Debevoise Plimpton and former state insurance superintendent, likened the new agency to the Securities and Exchange Commission, in the way it combines regulation and enforcement under one roof.

“It’s not common to have a combined regulatory and enforcement function,” he said, adding, “It’s effectively very competitive with the attorney general’s jurisdiction.”

The two agencies are publicly cordial, but behind the scenes they are much like two boxers feeling each other out in an opening round. Already, turfs are overlapping.

Mr. Schneiderman, a liberal-minded attorney general, made a national name for himself in his first year by spurning a settlement that the Obama administration and other attorneys general had been negotiating with the banking industry over foreclosure practices. Then last week, President Obama, vowing to get tougher on Wall Street, reached out to Mr. Schneiderman, naming him co-chairman of a new financial crimes unit to prosecute large-scale financial fraud.

At the same time, Mr. Cuomo, in his State of the State address this month, turned to Mr. Lawsky, not Mr. Schneiderman, on the issue, directing the Department of Financial Services to create a Foreclosure Relief Unit. And Mr. Lawsky has moved on his own to secure deals with smaller lenders on curbing abuses.

Asked whether he supported Mr. Schneiderman’s stance on the national negotiations, Mr. Lawsky was noncommittal.

“We’re not commenting at all on the ongoing negotiations because we are at least tangentially a part of them and could ultimately be called on to sign or not sign,” he said, adding, “We want to see what the final proposal is.”

Danny Kanner, a spokesman for Mr. Schneiderman, said in a statement that the two offices “will continue to work together toward our common purpose of protecting consumers, investors, and the integrity of New York’s global markets.”

“In the aftermath of the financial crisis,” the statement said, “we need more willing hands on deck, not less, to meet that critical objective.”

Article source: http://feeds.nytimes.com/click.phdo?i=b3c8f53081475ce90cd427fe950c43b6

DealBook: Exxon Mobil to Sell Its Japanese Arm for $3.9 Billion

Exxon Mobil said on Sunday that it had agreed to sell its Japanese subsidiary to TonenGeneral Sekiyu, a major refinery operator in Japan, for about $3.9 billion, as part of a revamping of the oil giant’s operations in that country.

Under the terms of the deal, Exxon will sell a 99 percent stake in the subsidiary, ExxonMobil Yugen Kaisha, to TonenGeneral. Exxon will in turn shed most of its controlling stake in TonenGeneral, keeping a 22 percent interest in the Japanese refiner.

The deal represents the latest move by Exxon and other major oil companies to shift their focus from refining operations to higher-margin businesses like exploration and development of new sources of oil and natural gas.

There is surplus refinery capacity in many parts of the world in large part because of the economic downturn, which has sliced into demand for gasoline and other petroleum products.

Meanwhile, high oil prices and relatively low gasoline prices have squeezed refinery profits. Royal Dutch Shell and BP are selling refineries in Western Europe and the United States. Several refiners have closed a handful of refineries on the East Coast in recent years, and a few are up for sale. ConocoPhillips plans to separate its refinery operations from oil and gas exploration and production.

TonenGeneral will also streamline its operations in light of what it says is declining demand for oil in Japan, which has put pressure on the company’s profit margins.

“The company will be able to more effectively execute locally driven investments and other business decisions that will help the company adapt to the challenging operating environment,” TonenGeneral said in a statement.

TonenGeneral will continue to have exclusive use of Exxon brands like Esso, Mobil and General in Japan. Exxon will also provide technology and supply services to TonenGeneral.

The Japanese refiner plans to finance the transaction with some of its 100 billion yen ($1.3 billion) in cash on hand and with bank debt. The deal is expected to close by June 1.

TonenGeneral was advised by Nomura Securities and the law firm Nishimura Asahi.

Article source: http://feeds.nytimes.com/click.phdo?i=ba8efbe0da161b3154dbcb7039e98ea7

Dreamworks Caught in a Real-Life Drama

But Hollywood is pondering something else: What becomes of DreamWorks Studios, the boutique studio behind those films?

The 10 nominations between the two movies, including best picture for each, have made DreamWorks a strong contender for honors on Oscar night, Feb. 26. The two dramas already lead the best picture pack at the box office, with “War Horse” passing “Moneyball” over the weekend, according to estimates, to become the second most popular nominee, behind “The Help,” which had domestic ticket sales of about $170 million.

Behind the scenes, however, executives at DreamWorks and its partners are quietly opening discussions that in the next few months will determine its future and answer a broader question about the state of Hollywood: Can a faltering film industry sustain a company that insists on making ambitious, Oscar-caliber, studio-size films — but without the deep pockets of a Viacom, which owns Paramount Pictures, or a News Corporation, the parent of 20th Century Fox?

Created four years ago by Steven Spielberg and Stacey Snider in partnership with Reliance Entertainment, an Indian financier, DreamWorks was a successor to DreamWorks SKG. The earlier DreamWorks was an independent studio that was created amid much fanfare by three Hollywood heavyweights — Mr. Spielberg, Jeffrey Katzenberg and David Geffen. Eventually they sold it to Paramount and briefly worked with the studio in what became a failed marriage.

(The new DreamWorks is unrelated to the publicly held DreamWorks Animation.)

Over the years, small, independently financed companies — some with their own distribution mechanisms, others, like DreamWorks, without — have generated hits, only to disappear or be merged into larger corporations. Miramax Films was acquired by Disney after releasing “The Crying Game,” a box-office success and best picture nominee; Disney has since sold the unit. Summit Entertainment was recently sold to Lions Gate; Summit investors saw the end of their blockbuster “Twilight” series as a prime moment to cash out.

For smaller film companies, the hunger for capital is a perennial problem. Making a studio-level film can require an immediate investment of $100 million or more. But even the hits pay back their investors slowly, over a cycle that may last as long as 10 years, as movies are sold successively in theaters, on DVDs, to Internet streaming and cable television services and so on.

DreamWorks is now in the ticklish position of having nearly exhausted its first round of financing, which included $325 million in equity from Reliance, and a matching $325 million in lending from banks led by J. P. Morgan Securities. An original plan called for more from each, but the struggles of the national economy brought the investment up short. Now, DreamWorks is left to line up new financing at a time when movies are struggling.

Attendance at North American movie theaters hit a 16-year low last year. DVD sales continue to drop. Although some emerging overseas markets are picking up steam, Europe and other important sales territories are uneven. And there are no indications of an immediate reversal of the trends.

So the question becomes whether, or to what extent, Reliance and allied lenders are prepared to back another round. Executives from Reliance and DreamWorks declined to discuss their plans. Over the weekend, however, they said in a joint e-mail that they remained pleased with their partnership.

“Our relationship has always been structured to allow us to adapt to changing market conditions and to create the best chance for success for all parties involved,” they said in a statement.

Speaking on condition of anonymity to avoid conflict with executives of the companies, people familiar with the situation said talks about further financing will probably open in the next few weeks. The outcome will determine whether DreamWorks, which distributes its films under a long-term deal with Walt Disney Studios but has also worked with other partners, will be able to maintain its ambitious course.

Article source: http://feeds.nytimes.com/click.phdo?i=13df14cc2eb484fd614a68c9dd42933f

Greek Coalition Partners to Back New Reforms

Prime Minister Lucas Papademos had sought agreement among coalition partners on the broad outlines of a deal with private creditors to erase $130 billion of debt as well as a recovery plan suggested by the European Commission, European Central Bank and International Monetary Fund, collectively known as the troika.

Athens had reported progress over the weekend between Greece’s political leadership and Charles Dallara of the Institute of International Finance, the bankers’ lobby representing most investors, regarding how much of a loss the private sector creditors would be willing to accept on their bond holdings. A deal is expected within days.

The statements on Sunday by Greece’s technocrat premier suggested that he had overcome some of the objections of the party leaders — his Socialist predecessor George Papandreou, the conservative leader Antonis Samaras and the right-wing leader Georgios Karatzaferis — to new austerity measures proposed by the troika, although some points of contention remain.

The three party leaders were later quoted on Sunday as saying that their only objections were to proposed cuts to wages in the private sector — which would intensify a deep recession — and to reported German demands for a European Union commissioner to oversee Greek budget decisions.

Still, any new measures could face a struggle to pass the Parliament, where many lawmakers remain resistant to unpopular measures.

Mr. Papademos said that the alternative to the completion of talks on the debt swap and on a second bailout for Greece was a potentially catastrophic default.

“If this process is not completed successfully, we will find ourselves faced with the specter of bankruptcy, which will have serious repercussions for society and especially for the economically vulnerable,” he said.

The talks with private creditors have broken down twice before, largely because the International Monetary Fund and European leaders have pushed for greater debt reduction in light of Greece’s worsening economic outlook, so there is again the possibility that these negotiations will founder.

Reining in Greece’s budget problems will not be the only item Monday in Brussels.

Leaders are expected to bow to mounting evidence that austerity alone risks stoking recession and plunging fragile economies into a downward spiral; a draft of the European Union summit meeting communiqué calls for “growth-friendly consolidation and job-friendly growth.”

Leaders will discuss long-term structural reforms and better use of European Union subsidies, while avoiding mention of fiscal stimulus from Germany, the powerhouse of the euro zone.

Then the meeting, which will be held at the same time as a national strike in Belgium, will try to satisfy Berlin’s desire for fiscal discipline by wrapping up talks on a new intergovernmental treaty.

Meanwhile, several nations are also expected to champion the need for a financial transaction tax, a plan that one official study suggested could cut growth.

Stephen Castle contributed reporting from Brussels.

Article source: http://feeds.nytimes.com/click.phdo?i=2b89d18b4bbd8a165b042f88551abf15

With ‘Homeland,’ Showtime Makes Gains on HBO

At the Golden Globes, “Homeland” won the best drama award, helping Showtime match HBO in the number of awards won (three) and setting up what could become a more competitive battle between the rivals. As Showtime edges closer to its competitor’s subscriber numbers, though, HBO is ready to counter with a host of prominent projects over the next six months.

Awards mean a lot to pay-cable channels. “They are particularly important because you are trying to create a sense of value that’s worth subscribing to on a monthly basis,” said David Nevins, Showtime’s president for entertainment. He added, “That best-series win is a breakthrough moment that says cutting-edge stuff is being done here.”

Offering compelling series is the main way premium channels keep the subscriber cash flowing. “We don’t think it’s an accident that five years ago we were at 13 million subs, and now we’re pushing 22 million,” Mr. Nevins said.

Showtime has improved its subscriber base to 21.3 million from 13.8 million in 2005, according to the media analyst firm SNL Kagan. Over the same period, HBO has held relatively steady at 28 million to 29 million.

The leveling off of HBO’s growth, its executives conceded, can be traced in part to a fallow period in its series development about four years ago, when its entertainment management was going through an upheaval as Chris Albrecht was replaced by Michael Lombardo, the president for programming at HBO, and Richard Plepler, the co-president of HBO.

“We had precious little in the coffers,” Mr. Plepler said.

Mr. Lombardo added, “We were getting a little spooked by our own success. ‘Sopranos’ and ‘Sex and the City’ were so big, what happened was an inertia to try new things.”

HBO famously passed on “Mad Men” — which has collected a trove of awards for AMC — and it took time and “a full-court press,” as Mr. Plepler put it, to bring the biggest names in Hollywood back to HBO.

But HBO never lost the advantages it has always enjoyed, money and brand identity. And those factors have long drawn many stars to HBO.

The talent agency WME represents big series at both pay-cable networks, including “Homeland” at Showtime and “Boardwalk Empire” at HBO. Ari Emanuel, the head of the agency, said Showtime was surely becoming more relevant.

“ ‘Homeland’ has helped them,” he said. But he added, “What we know is there are two iconic brands in cable: ESPN and HBO.”

One reason, he said, is that “HBO has huge advantages” in areas like financial resources, technological innovation and brand recognition. While Leslie Moonves, the chairman of Showtime’s parent, CBS, is “an executive you never bet against,” Mr. Emanuel said, “Les doesn’t have the economic firepower of HBO.”

In recent years, HBO has earned about a quarter of the total annual profits for its parent, Time Warner, generating slightly more than $1 billion annually. Showtime is growing, but remains considerably behind. A Morgan Stanley report on CBS estimated that the cable channel would earn $692 million in 2011.

The channels earn significant revenue from subscriber fees: usually about $16 a month for each subscriber. HBO also owns virtually all of its programming while Showtime owns about 50 percent. (“Homeland” is owned by the Fox studio.) That means HBO makes more in ancillary sales — to international outlets, for example. And HBO has been ahead in distribution expansion, most recently with the mobile app GO, now available to more than five million users.

Article source: http://feeds.nytimes.com/click.phdo?i=a3d27e342e628f37b116d468e125486c

Bucks Blog: Friday Reading: Teaching the Volt to Charge Smarter and Cleaner

January 27

Friday Reading: Teaching the Volt to Charge Smarter and Cleaner

Making the Volt charge smarter and cleaner, an online retailer gets five-star reviews for $2 a star, using symptom checklists to sell drugs and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=1b7710df4b9b03d4a67e2984b8ae1a14

Bucks Blog: Looking for Alternatives to Safe Bonds

Paul Sullivan, in his Wealth Matters column this week, discusses higher-yielding, but safe, alternatives to United States Treasuries and other high-grade bonds. Those bonds have long been the favorites of older investors because they were a safe way to guarantee income. At the moment, though, they’re barely generating income.

And most anyone near retirement or already there has been wary of investing in the stock market, given the turbulence there.

So what other choices do older investors have? One alternative, Paul writes, puts aside four years of expenses in safe bonds, leaving the rest of the portfolio to grow. A second investor he spoke with avoids stocks and invests instead in real estate investment trusts, master limited partnerships (most often companies involved in the transportation of natural resources) and annuities.

What has been your investment strategy, given the low interest rates and a volatile stock market?

Article source: http://feeds.nytimes.com/click.phdo?i=5ef3e4b75b223295bc98aad87830009d

Consumer Confidence Rose in January

Sunday Review »

Opinion: Hysteria and the Teenage Girl

Teenage girls, it seems, are more likely to exhibit extreme and bizarre psychological symptoms than boys.

Article source: http://feeds.nytimes.com/click.phdo?i=7194c674ad353013aab575edbea148b6