I walked into a friendly neighborhood grocery store yesterday, and much to my surprise I saw a display.
In nice bottles, with McDonald's logos, stood Big Mac sauce, Filet-o-Fish sauce and McChicken sauce. I found out later these sauces went on sale in Canada-only earlier this spring.
This was, on the surface, kind of a curious decision. McDonald's selling their sauces (through a licensing deal with Kraft) is an affront to their core product (restaurant sales), right? If people can buy the taste of McDonald's on the grocery isle it would seem so.
It's also a potential detriment to franchisees, who they have to keep happy. A McDonald's franchisee pays big money to own a McD's and works on a high volume low margin business model. For example, a front-line employee who makes $20,000/year has to bring in $200,000 of revenue, or the franchise resale cost will go down. It's why they fight margins, and squeeze suppliers so hard.
Offering a product "off book" is probably no bueno to business owners.
So why would they do such a thing, and why would restaurants accept it?
According to BNN, these sauces act as a gateway product to introduce the flavors to people who have not tried McDonald's. In particular, four of five millienials in Canada do not eat at the food giant, and being front and center on grocery shelves - McDonald's believes - can help. In addition, it's pretty obvious that the flavors keep McDonald's on your tastebud radar, and you can't make the real thing at home, so it helps restaurant sales that way.
What strikes me, reading about the above, is that racing has done exactly the opposite.
When Betfair came to partner with racing a dozen or more years ago with a licensing deal - just as Kraft did to McDonald's - they were told to take a hike; that the core product would suffer, so there's no growth.
When Derby Wars came to partner with racing, the same thing. Take a long walk off a short dock. Quit "stealing". Even worse, they pulled out the legal muscles.
Both exchange wagering and contests work outside the core product. Both products act as a gateway. Both products help keep people engaged and following horse racing. Both products work in tandem with the core product. Both products are the sauce to the pari-mutuel beef.
McDonald's (and other businesses who sell condiments like this) see potential. Potential for core revenue, yes, but potential to keep their product in the minds of consumers. Racing, on the other hand, sees them as threats. They always have. It's ingrained in its culture.
One business is probably right and one is probably wrong. My money is on the golden arches.
Have a nice Wednesday everyone.
(PS - The sauces are quite good)
Subscribe to:
Post Comments (Atom)
Most Trafficked, Last 12 Months
-
Auckland Reactor is coming to the US from New Zealand and he landed in the barn of the very sharp Kelvin Harrison. I don't think many w...
-
Have you seen the RCI's recent push to change the narrative on drugs and racing? The story they tell is accurate, and has been for some...
-
Back in the early 1990's I got my first real job. I was a pretty much an office gofer for a mining consortium. One day a gentleman cam...
-
Yesterday on twitter there was a conversation about why some people are withholding money from Keeneland this meet. A simple question, with...
-
Elmer Patzer walked up to a betting machine and started popping in tickets to see if he won. All of a sudden, whamo, he cashed for $6.5 mill...
-
Every time I flip on twitter someone is annoyed that NBC is tape delaying some of the events for prime time television. Columnists have join...
-
Horses opening with 10k to win on them, at smaller venues lately? I have not been playing too seriously the past two days, however I did che...
-
Canterbury Park - the small Minnesota track that lowered takeout last year, only to raise it this season - concluded their meet recently. Th...
-
Good morning folks. On Awful Announcing, columnist Matt Zemek tore a hide off ESPN for what he thinks is the dumbing down of tennis cover...
Similar
Carryovers Provide Big Reach and an Immediate Return
Sinking marketing money directly into the horseplayer by seeding pools is effective, in both theory and practice In Ontario and elsewher...
No comments:
Post a Comment