These classic brands you love are in trouble

24-Oct-2018

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Find out now if your favorite brand might be going away

Certain brands are more than just products — they’re iconic pieces of the American landscape, engrained in the fiber of the culture. Of course, no matter how sentimental you might be, the simple fact remains that the free market has a short memory. When tastes change, even the most recognizable sellers will have to change with them or risk obsolescence.

Click through to see which classic brands were able to successfully reinvent themselves and which are still struggling.

Budweiser

Adolphus Busch, a German immigrant who arrived in America in 1857, went to work at a brewing supply company. Busch ended up marrying the daughter of his client Eberhard Anheuser and joined his company after the Civil War. In 1880, Busch took over the company, one year after it was renamed Anheuser-Busch.

Busch would go on to revolutionize the beer industry, incorporating refrigerated rail cars and pasteurization to start shipping his beer across the country and turning it into a national industry.

Budweiser: What’s Happening?

In 2017, Budweiser was knocked out of the three top-selling beer brands in the country, another fall from the No. 2 spot it held in 2011. The culprit? Most likely the increased popularity of craft brews and more flavorful beers. Just a decade ago, the top 10 beer brands made up 66 percent of beer sales, a figure that has plunged to 50 percent today.

Budweiser’s parent company Anheuser Busch InBev reported U.S. revenues fell 3.1 percent in the second quarter of 2018 due to lower volumes and a continued decline in market share. To boost sales, the company is launching more expensive Budweiser options, such as the August 2018 release of Budweiser Reserve Copper Lager for lovers of beer and bourbon.

McDonald’s

Ray Kroc was a traveling salesman who had spent most of his life bouncing from job to job when he discovered a burger restaurant in San Bernardino, Calif. It was called McDonald’s. Kroc convinced the brothers who owned the restaurant to franchise it. As of 2016, there were 36,899 McDonald’s restaurants worldwide.

McDonald’s: What’s Happening?

During the second quarter of 2018, McDonald’s missed its same-store sales estimates, a key factor in calculating restaurant sales, for the first time in at least two years, according to Reuters. The decline sent its stock shares down as much as 2.3 percent. When McDonald’s introduced its all-day breakfast back in 2015 the move helped some, but the company reported in its 2018 second-quarter earnings call that its U.S. breakfast category is weak, still underperforming like it did in the first quarter of 2018.

To compete with fast-casual restaurants like Chipotle, which have changed the food landscape in America by offering better-quality food without sacrificing speed and convenience, McDonald’s introduced fresh beef quarter-pounder burgers, which it began rolling out last March. This initiative is just one more step McDonald’s is taking to remain relevant in the fiercely competitive fast-food sector. It also has a $6 billion makeover planned.

Coca-Cola

In 1886, Atlanta pharmacist Dr. John S. Pemberton created a flavored syrup to mix with soda water and started selling the concoction for 5 cents a glass. It was his partner, Frank Robinson, who named the beverage and wrote “Coca-Cola” on the labels in the now legendary script. Today, nearly 2 billion people around the world drink Coca-Colas every day.

Coca-Cola: What’s Happening?

People are drinking a lot less soda pop in favor of water as they attempt to be more health-conscious. In the U.S. during 2017, both Coke and Pepsi brands declined by volume — a key indicator of product demand — whereas brands like Aquafina and Poland Springs increased, according to Beverage Digest’s annual report. Overall last year, carbonated drinks experienced a 1.3 percent loss by volume and bottled water saw growth of 6.2 percent.

In 2018, Coca-Cola rebranded Diet Coke with new, slimmer cans and enticing flavors such as feisty cherry and ginger lime. Its marketing strategy paid off. In 2018’s second quarter, the Coca-Cola Company surpassed estimates for quarterly sales and profit due to more sales of sodas targeted at health-conscious consumers, like its Zero Sugar option and new Diet Coke line, according to Reuters. The company is also investing in non-soda brands, like Kobe Bryant’s BodyArmor.

Toys ‘R’ Us

In 1948, Charles Lazarus opened a store called Children’s Bargain Town in Washington, D.C., which eventually became Toys “R” Us. It was originally a children’s furniture store, but the shift to selling a mind-boggling variety of toys in a big-box environment helped catapult the business to national success. At its peak, Toys “R” Us controlled 25 percent of the world’s toy market

Toys ‘R’ Us: What’s Happening?

After filing for bankruptcy in 2017, Toys “R” Us began liquidating its American assets in March 2018, starting a ripple effect expected to affect 30,000-plus people. The once-great toy giant closed its doors in the U.S. on June 29, 2018. The combination of losing market share to online retailers — Amazon saw toy sales grow 24 percent, to $4 billion, from 2015 to 2017 — and a botched effort to take the company private were too much for the classic retailer.

A Toys “R” Us brand auction is set to take place in October 2018, with former Toys “R” Us CEO Jerry Storch as one of its prospective buyers. Could a Toys “R” Us reboot be in America’s future?

Barbie

Ruth Handler watched her daughter, Barbara, playing with paper dolls one day in the 1950s and got an idea. She launched her Barbie doll line in 1959 and co-founded Mattel, one of the biggest toy companies in the world, which started in a garage.

Barbie: What’s Happening?

Barbie sales had been declining for years, shaving a quarter off their value over the last five years. In 2017 alone, Mattel’s Barbie sales declined by 6 percent. But, for now, doll sales are actually on the rise. Mattel reported that Barbie gross sales are up by 12 percent in the second quarter of 2018, due to the line of redesigned Barbies that include dolls of different heights, weights and various ethnically diverse features. Only time will tell if the product’s recent success will hold.

Fisher-Price

In 1930, Herm Fisher saw the need for a higher quality toy for preschool-aged children and decided to do something about it. He founded Fisher-Price with Irving L. Price and Helen M. Schelle. The company had considerable success marketing developmental toys for young children.

Fisher-Price: What’s Happening?

Traditional toy brands like Fisher-Price, which has been owned by Mattel since 1993, are on the decline. For the second quarter of 2018, Mattel reported a decline of 14 percent in worldwide gross sales for the Fisher-Price and Thomas & Friends brands, partially due to the impact of the Toys “R” Us liquidation and closure. Fisher-Price needs to reinvent itself like Lego did.

Kraft Mac & Cheese

The Great Depression inspired Kraft to make its classic, boxed macaroni and cheese. Kraft introduced the product in 1937, and because it fed four people for just 19 cents, it quickly caught on. The company sold 8 million boxes in a year and never looked back — Kraft Macaroni & Cheese became an American dinner staple.

 Kraft Mac & Cheese: What’s Happening?

Kraft’s iconic brand has seen competition from higher-quality, healthier mac and cheese options that have eaten away at its sales — it lost 2 percent of the total macaroni and cheese market from 2012 to 2016. The brand is fighting back, though, and has boosted sales by removing artificial dyes from the classic recipe.

Hamburger Helper

Hamburger Helper was launched in December of 1970 as part of a response to the rising price of beef, giving consumers the chance to stretch a single pound of ground beef into a meal for the whole family. It was a hit, with more than 25 percent of American families purchasing the product in its first year of existence. As for the iconic “Helping Hand” mascot, that didn’t debut until 1977.

Hamburger Helper: What’s Happening?

Hamburger Helper, owned by General Mills, commanded 61 percent of the dinner mixes market as recently as a decade ago. As of 2016, however, that number had fallen to 40 percent, a decline of more than 20 percent. The company even dropped the “Hamburger” from its name to reflect the dropping popularity of beef after sales tanked 14 percent in 2012 alone. General Mills doesn’t see robust growth prospects for this product going forward but hopes that value-oriented shoppers will continue to buy it.

Chef Boyardee

Chef Ettore “Hector” Boiardi came to America in 1914, and he started a business selling takeout meal kits — consisting of his popular take on spaghetti — that would lead to him launching the Chef Boiardi Food Company in 1928. Marketing wizards changed the spelling of his last name to make it phonetic, and it quickly became a standard canned food in America’s pantries.

Chef Boyardee: What’s Happening?

Sales are down for Chef Boyardee products, and the company closed its Milton, Penn., plant. Chef Boyardee’s share of shelf-stable, ready-meal sales declined 8 percent over the last decade. In honor of the product’s 90th anniversary, and to reignite interest in the brand, Chef Boyardee recently arranged a collaboration between Donny Osmond and rapper Lil Yachty to update its classic jingle. The brand also created throwback recipe cans for Beef Ravioli, Lasagna and Beefaroni that include a simplified ingredient list reminiscent of days past.

Tootsie Roll Industries

Leo Hirshfield started selling his hand-wrapped little candies out of his Brooklyn store in February 1897, naming them after his daughter Clara, whose nickname was Tootsie. Hirshfield started delivering them with a horse and carriage and in 1922 he took the company– Sweets Company of America — public. Today, the company produces 64 million Tootsie Rolls a day.

Tootsie Roll Industries: What’s Happening?

Americans are eating much less sugar in an effort to be more health conscious, which is eating into candy sales in general — and Tootsie Rolls in particular. The company saw stagnant sales turn to declining sales in 2016 and 2017. In 2018, second quarter net sales increased a meager 1 percent from 2017.

Sears

Richard W. Sears moved his fledgling watch company to Chicago in 1887, where he joined forces with Alvah C. Roebuck. They launched a mail-order business that grew into a massive department store empire, which remained the largest retailer in America from the end of World War II until Kmart surpassed it in the 1980s. In 2004, the companies merged.

Sears: What’s Happening?

Sears’ strategy of closing hundreds of underperforming stores in an effort to leave its better-performing stores in play has finally made a difference. In the second quarter of 2018, the company reported that its same-store sales losses had lessened from the previous quarter — from 11.9 percent to 3.9 percent — but it warned that it still might have to go out of business despite its efforts to stay afloat.

In 2017, Sears sold its iconic Craftsman brand to Black and Decker. This year, it’s considering selling its longtime Kenmore appliance brand, but it must get the go-ahead from its special committee and shareholders. Sears is planning to close an additional 149 stores in the second half of 2018.

Red Robin

Red Robin started out in 1940 as a restaurant in Seattle called Sam’s Tavern. Sam, the owner, liked to sing the song “When the Red, Red Robin (Comes Bob, Bob, Bobbin’ Along)”, which is where the new name originated. Things took off in 1979 when regulars Mike and Steve Snyder became the first franchisees. From there, the store grew to more than 175 locations by 1985 and more than 500 by 2015.

Red Robin: What’s Happening?

The burger market has gotten more competitive in recent years, making it pretty difficult for sit-down restaurants like Red Robin to keep attracting customers. Even though the company has implemented some cost-cutting measures and has been working on menu innovation, operational efficiency and an improved customer service platform to boost revenues, the future does not look bright for Red Robin. For the second quarter of 2018, the brand reported a 2.6 percent decline in same-store sales, as well as a guest traffic decline of 0.7 percent from the previous year.

Wheaties

In 1921, when a health clinician spilled some wheat gruel onto a hot stove and saw it turn into golden wheat flakes, he dubbed them “Washburn’s Gold Medal Whole Wheat Flakes.” He changed the name to Wheaties, and the brand gained popularity when Lou Gehrig and 46 of the 51 players on the 1939 Major League All-Star team gave testimonials for the cereal. In the late 1950s, the company signed sponsorship deals with sports legends, who would appear on the box, which explains the slogan “The Breakfast of Champions.”

Wheaties: What’s Happening?

People just aren’t eating much cereal anymore. As consumers continue to gravitate toward healthier, fresher food, many classic brands are taking a heavy hit. What’s more, 40 percent of millennials said that cereal was “inconvenient” to eat in 2015. General Mills, Wheaties’ parent company, reported that 2017 marked the third straight year of declining sales.

In 2018, the company announced it was planning to cut 625 jobs due to declining overall sales and increased freight costs. It also raised prices on some products, including cereals that are packaged in smaller boxes and with higher per-ounce prices.

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