Tuesday, October 19, 2004

Service, marketing and food...in that order

Two items caught my attention this morning as I listened to the radio. The first was a story about caviar. The other was about Starbucks. Both concern food and marketing, which have been my life for about thirty-five years.

The gold standard for caviar is Caspian beluga sturgeon. Without going into detail, Russian caviar has been a treasure from the beginning because the supply is smaller than the demand. Like estate wines, saffron, ivory or gold, the supply is not likely to grow, but opportunities are there for well done, high-end alternatives.

It takes years for a sturgeon to mature enough for a viable caviar harvest, but domestic aquaculture has been on the job long enough now that a niche market has developed. I was surprised last year whe on a trip to Kentucky I learned that former tobacco farmers were experimenting with raising shrimp, of all things. Far from a coastline, in ponds, domestic shrimp is being grown for market, so caviar from Idaho or California is not a crazy idea.

Changing the subject for a moment, a couple of weeks ago I was listening to the radio on the way to work when a new music album was being played followed by an in-depth interview with the group that just released it. On an impulse, I stopped at a mall with the intention of buying the album.

I admit to being old, but I had forgotten how old I was until I realized that they don't sell records any more. They don't even sell tapes, for that matter, except for a small display at the rear of the store. It's like trying to find suspenders. Thrift stores and flea markets is as good as it gets.

Music today means compact discs. And not necessarily a commercially produced CD. Four years ago, before Napster got castrated, one of my employees was downloading music and burning CD's to be used as Christmas gifts, each one with music especially picked for the person receiving the gift! That was a lot more creative than fruitcake. And the idea has not gone away.

Starbucks is rolling out a CD burning service in conjunction with their coffee. The idea didn't just pop into someone's head last year and emerge as a fully-developed marketing plan a year later. They were thinking out of the box for some time.

Starbucks has been quietly preparing for an entry into the music business for more than a decade. It has had modest but growing success with its 'artist's choice' albums and other compilations that showcase musicians that appeal to its core customers. Five years ago, Starbucks bought HearMusic, a small group of West Coast record stores founded by McKinnon and staffed by music aficionados. HearMusic was the first to offer CD listening stations in the early '90s. Link

The food business has always been vigorously competetive. My career started with retail cheese, a boutique idea grabbed by grocery chains as soon as demand made it feasible. Cafeterias were preempted by food courts (and their little sisters, buffets and food bars). Labor intensive products are cranked out by factories as technology has made it easier, safer and cheaper to use butter, pie shells, mayonnaise, artificial flavors, frozen pre-breaded items, poultry and other meats without bone or gristle and an endless list of canned, packaged and substitute products.

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