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Carolina Foods, Inc.: Can the Duchess Become Queen? 107

Carolina Foods, Inc.: Can the Duchess Become Queen? Tamara L. Cohen, UNC Charlotte Linda E. Swayne, UNC Charlotte

Copyright © 2015 by the Case Research Journal and by Tamara Cohen and Linda Swayne. This case is intended as a basis for classroom discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The authors thank the three anonymous CRJ reviewers for their construc- tive comments.

The principals of Carolina Foods, Inc. (CFI) were mulling over the future direc-tion of the company in Fall 2014. Paul Scarborough, president and CEO (chief executive officer) of CFI said, The new Hostess has spent a lot of money on advertising that the Twinkie is back. Our sales at Carolina Foods (CFI) for 2013 were up significantly and I suspect some of that was because Hostess entered Chapter 11 and then sold off its various lines. Hostess was shut down for more than seven months, but the new Hostess is back to baking. We need to have a plan to make sure our revenues don’t fall and to protect our profitability. We’d like to continue growing as we did in 2013.

Paul’s daughter, Katie Scarborough Caldwell, responsible for finance and strategy, explained,

We have great products in the Duchess line, although we haven’t advertised since the 1980s. I created a webpage for Carolina Foods and we are starting to use social media, but we need to engage our consumers more. We have some friends on Facebook and a few on Twitter, but I would love to sell Duchess products online directly to consumers so they could taste our fresh Duchess Honey Buns and other products. The issue is sell- ing $1.29 items online because of shipping costs. Plus, we have this great baker in our test kitchen. Adding new products might be a way to grow.

Paul responded, “If we could develop a new product that warrants it, I would sell this property and build a new bakery that is energy efficient and has the most up- to-date technology. Efficient production is a critical success factor in baking today; however, without a new product that warrants a new facility, I can’t justify the expense and disruption to current operations.”

Ruffin Scarborough, Paul’s son, was responsible for sourcing raw materials and buying of futures to control costs. He said,

Our two basic ingredients for baking—sugar and flour—impact our raw material costs. Prices have been volatile and have had a significant effect on profitability. If we grow the brand in any way, we might be able to purchase larger quantities and lower our costs to produce Duchess products.

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108 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

Doug Newton, responsible for Carolina Foods’ sales, commented, We definitely need to have a reason to go into the stores and sell more products. Store managers are happy to see us but they are always looking for something innovative or new to drive sales. So, I agree with Paul, that we need a new product that will really appeal to our target market. Having new and innovative items will give us another rea- son to see the retailers. We have always been successful in convenience stores because our portfolio of products has most of the core items that are ranked in the top ten in sales for convenience stores. I think online is definitely another way to get your prod- ucts to market. Creativity, hard work and people are what we really need to make it happen. Although I like online I don’t believe it should be the only way to get your products to market.

Paul summarized, “We want to grow Carolina Foods. We have discussed a number of ideas recently, but I believe we should focus on investigating these three:

1. Make Duchess the brand of choice for consumers. 2. Come up with a brilliant new product for the Duchess brand. 3. Develop our social media marketing and an online store.”

He looked at Katie, “We are a pretty lean organization so I don’t believe we can do all three. Let’s get back together next month after Doug and I return from the NACS show (Fall 2014 National Association of Convenience Stores show) in Las Vegas and see what you have come up with.”

The Bakery IndusTry

Carolina Foods, Inc. was one of the 2,923 commercial bakeries in the U.S. in 2014 that accounted for approximately $30 billion in annual revenue.1 Eighteen of the com- mercial bakeries each had over $50 million in sales annually; these large bakeries on average spent about 0.7 percent on advertising and sales.2 Operating income for large bakeries averaged 4.2 percent and net income 2.3 percent.3 Competition was intense among national and regional bakeries, and from supermarkets and grocery stores with their own bakeries. The output of U.S. bakery products manufacturing was forecasted to grow at an annual compounded rate of 4 percent between 2014 and 2018.4 Indus- try demand was driven by consumer preferences and by the extent to which grocery stores chose to operate their own bakeries rather than buy from commercial bakeries.

Commercial bakery products were divided into four categories: 1) baked breads, mainly wheat, white, and rye (40 percent of industry sales); 2) rolls, buns, muffins, bagels, and croissants (20 percent); 3) pies, pastries, donuts, and other sweet goods (30 percent); and 4) soft cakes (10 percent).5 The segment that CFI targeted was pies, pastries, and sweet goods. A commercial bakery mass produced various baked goods to sell to customers such as restaurants, hotels, grocery stores, fast food outlets, schools, prisons, convenience stores, discount stores, club stores, and vending operations. The industry was very competitive and highly concentrated; fifty of the largest companies generated 75 percent of the total revenue.6 Average annual revenue per worker in the U.S. for commercial bakeries was about $170,000.7

In contrast, retail bakeries were more prevalent—more than 6,000 of them in the U.S.—but accounted for slightly less than $3 billion in annual revenue.8 Sell- ing baked goods to individual consumers through a storefront, the retail sector was quite fragmented with the fifty largest retail bakeries generating just 15 percent of the total revenue. In addition, retail bakeries represented 68 percent of the locations for

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Carolina Foods, Inc.: Can the Duchess Become Queen? 109

bakeries, yet they generated just 9 percent of the total bakery revenue.9 Average annual revenue per worker in the U.S. for retail bakeries was about $50,000.10 Baking was a low tech business that generally produced low-priced products from commodity ingre- dients. Bread bakers bought wheat, yeast, and shortening to mix into various dough combinations, then baked, packaged, and distributed the products. Sweet baked goods bakeries used wheat, yeast, and shortening, plus additional raw materials such as fruits, eggs, sugar, oils, milk, and chocolate.

The costs of major raw materials, such as wheat, vegetable oils, sugar, fuel for delivery fleets, and natural gas for ovens, could change rapidly. Prices for wheat and vegetable oil could vary more than 40 percent during a year; commercial customer nat- ural gas prices by more than 25 percent; the cost of ingredients on average was about 30 percent of the wholesale selling price.11 Because prices for wheat, sugar, and other commodities fluctuated, most large bakers participated in the commodities futures markets.

Paul recognized the strategic sensitivity concerning raw materials: Another example of the challenges we face for our raw materials is when the federal government wanted to push biofuels and mandated that 40 percent of corn had to go into making ethanol for gasoline. Shortening prices doubled in a year—that was 2007—and so did the cost of wheat flours as farmers switched from growing wheat and soybeans to corn. When the FDA required all trans-fats to be identified in label- ing, there was a huge run on palm oil which is only produced in Malaysia and the Philippines. Palm oil went from 30¢ to 70¢ a pound. All Duchess products have been trans-fat free for a long time.

Paul concluded, When a sugar refinery in Savannah, Georgia burned to the ground in 2008, sugar prices went from 30¢ to 50¢ a pound. When the natural gas pipeline capacity in the Northeast was interrupted, the price went from around $4.50/dekatherm to more than $30/dekatherm to get delivery for a month until it was repaired. Competitors do have the same risks with these types of incidents, but if your firm cannot deal with these sudden spikes, it makes for a financial crunch.

In addition to a focus on lowering production costs, management in most com- mercial bakeries attempted to lower distribution costs. Distribution costs were high because products had to be fresh—some stores received deliveries as often as three times per day. Some bakers invested heavily in computer technology to coordinate ordering and distribution systems. Delivery might be direct from the bakery, called direct store delivery (DSD), or via a distribution center. Bakeries often had their own distribution staffs and fleets of delivery vehicles, or used independent distributors or truckers. Depending on the size of their distribution areas, some bakers had a network of distribution warehouses.

Economies of scale occurred for baked goods, because labor costs could be reduced dramatically in large bakery facilities; however, a production facility’s size was limited by its need to distribute a highly perishable product to a large number of customers who were geographically dispersed. Usually a large baking facility could service an area within a 300-mile radius.12 Most large bakeries were highly automated, enabling bakers to produce a more consistent product with higher quality and greater food safety. Bakery production personnel needed minimal training for production facilities and, on average, hourly industry wages were somewhat lower than the national aver- age.13 To track and help assure compliance with government regulations that affected

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110 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

bakeries, companies utilized specialized software. Efficient bakeries used computer systems to receive orders, track sales, and exchange other data with large customers. Large baking companies achieved scale advantages in procurement, production, and distribution. Small companies could compete by offering specialty goods or superior local distribution services, or by exploiting niche markets.

Consolidation in the supermarket industry produced large chains that could efficiently operate their own bakeries. Grocery-owned bakeries typically supplied “fresh-baked” goods, whereas longer-shelf-life products were bought from commercial bakers. These large chains were able to exert greater leverage with suppliers and desired nationwide contracts. The major competitive factors in the industry included product quality, price, customer service, brand recognition and loyalty, promotional activities, access to retail outlets and shelf space, and the ability to identify and satisfy consumer preferences. To survive and succeed in a stiff competitive environment, a company needed to differentiate its product and service offerings through a clear and unique value proposition. If a company was not able to maintain its product quality and consumer loyalty, increased competition could force the company to reduce its prices which in turn would adversely affect its margins.

Consumption was limited by the growth of the U.S. population, about 1 percent per year.14 With modest population growth, most bakeries were looking for innova- tion to drive revenues. As a mature industry, increased market share for any individual bakery directly impacted the market share of others. Many larger bakeries increased revenues by introducing new products, often through mergers or acquisitions. The industry was consolidating.

CompeTITIon

Paul said, “It used to be all of our competitors were family bakeries. Most have been bought by vertically-integrated food companies that acquired these small firms to add sweet baked goods to the lines of products they sold.” He continued, “It really changed the products and who the customers were. Today, we are a niche player in the industry, but I saw in the Red Book that we are listed in the top ten U.S. producers of pastry/ Danish/coffee cakes, and donuts categories” (see Exhibit 1). Despite the consolida- tions and changes swirling in the baked goods industry, Carolina Foods maintained its status as a privately held, family business.

Katie agreed with her father, adding, “We view our major competitors as Hostess, Flowers, and Cloverhill.”

hosTess Brands, LLC15

Interstate Bakeries, Inc., producer of the Hostess cupcake brand, was the largest U.S. baking company in 2004; however, it entered Chapter 11 reorganization that year.16 The following eight years saw Hostess’s fortunes wax but mostly wane, and ultimately succumb to overwhelming labor issues.17 Hostess asked the courts for permission to sell off parts of the business (legally it was an, “emergency motion to wind down the debt- ors’ businesses”) which was granted on November 30, 2012 and Hostess shut down operations. More than 18,500 jobs were lost; thirty-three factories were shuttered.18

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Carolina Foods, Inc.: Can the Duchess Become Queen? 111

Exhibit 1: Top Ten U.S. Bakeries, 52 Weeks Ending May 18, 2014

Top 10 Suppliers Dollar Sales in 000s

Dollar Sales % Chg versus YA*

Dollar Share

Unit Sales in 000s

Unit Sales % Chg versus YA*

Pastry/Danish/Coffee Cakes $1,111,257 (0.75) 100 417,236 (7.33) 1. Private Label 273,485 6.83 24.61 99,024 3.36 2. McKee Foods Corp. 199,412 11.81 17.94 112,976 10.25 3. Bimbo Bakeries USA 138,441 (4.36) 12.46 41,377 (4.67) 4. Cloverhill Pastry 87,019 (4.57) 7.83 38,340 (36.12) 5. James Skinner Baking Co. 63,808 3.79 5.74 16,332 2.80 6. Svenhards Swedish Bakery 52,646 (0.57) 4.74 9,211 (4.54) 7. Tasty Baking Co. (Flowers) 30,641 40.37 2.76 15,911 68.18 8. Carolina Foods Inc. 22,728 10.66 2.05 7,026 3.46 9. Upper Crust Bread Co. 20,606 (29.20) 1.85 3,609 (38.89) 10. Give & Go Prepared Food 19,593 (5.53) 1.76 4,784 (10.23) Doughnuts $1,210,912 8.96 100 474,309 9.63 1. Private Label 317,398 13.51 26.21 119,022 6.58 2. Bimbo Bakeries USA 288,123 3.99 23.79 92,859 3.96 3. Krispy Kreme Doughnut Co. 164,332 0.60 13.57 40,959 (0.44) 4. McKee Foods Corp. 135,399 37.10 11.18 82,161 38.88 5. Hostess Brands 107,378 (10.43) 8.87 59,514 (2.39) 6. Tasty Baking (Flowers) 59,864 131.07 4.94 30,899 166.79 7. Carolina Foods, Inc. 19,982 21.62 1.65 4,218 4.92 8. Flowers Foods Bakeries 18,759 (53.34) 1.55 7,547 (61.34) 9. United States Bakery 11,613 31.93 0.96 4,673 40.01 10. Maple Donuts, Inc. 10,096 (7.91) 0.83 3,996 (7.20) Source: Red Book: “Bakery Production and Marketing,” Sosland Publishing, 2014.

NOTE: The largest category, “private label,” was an accumulation of goods produced by various manufacturers for brands mar- keted by other companies (includes co-packing).

*% Chg vs. YA = Percent Change versus a Year Ago

The company split up in March 2013: McKee Foods bought Hostess’s Drake’s brand (pies and snack cakes) for $27.5 million; Flowers Foods paid $360 million for the Hostess bread brands (Wonder, Nature’s Pride, etc.) plus twenty bakeries; Apollo Global Management, LLC and C. Dean Metropoulos & Co. in partnership paid $410 million for ownership of the Hostess brand name, the sweet goods, and eleven facto- ries.19 The new Hostess partners relaunched Hostess Cupcakes and Hostess Twinkies. Factories were cut from eleven to four, and employees were reduced from 19,000 to 1,800. No Hostess products were available for more than seven months.20

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112 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

Hostess’s long-term advertising agency was retained and developed a roughly $3 million campaign, “The Sweetest Comeback in the History of Ever,” that was touted on outdoor billboards, street activities, and social media with the relaunch date of July 15, 2013.21 Those forgoing a Hostess Cupcake, Twinkies, Ding Dong, or Ho Hos fix were able to buy their favorites again. Hostess’s snack-cake brands had been expected to generate $380.4 million in 2012, prior to the sell-off (about a 10 percent market share). According to Landor Associates’ BrandAsset Valuator, Hostess brands (used on the various snack cakes) had been gaining in popularity despite little to no dollars invested in marketing efforts. “There’s a true affection for Hostess that has survived decades of being ignored by marketing dollars,” according to Wendy Hunt of Landor Associates, who noted the strong word-of-mouth for the Hostess-brand products.22

“The new strategy will be focused on innovation, efficiency, and getting Twinkies in more places,” according to the Apollo/Metropoulos partnership. “We’re looking to push products to channels where they never have been before—anywhere candy bars are sold.” Other places being investigated included sports stadiums, continental breakfasts in hotels, at movie theaters, and on cruise ships, as well as the more tradi- tional convenience stores, dollar stores, club stores, drug stores, and vending machines. Hostess already entered into an agreement for products to be sold in Big Lots. Hostess was also investigating healthier options such as added whole grains, or gluten free, and lower calorie snack packs. “We want to capitalize on the nostalgia of the brand, but we also want to make sure we’re relevant to this generation and not just the generation of the past,” concluded Metropoulos.23

Social media was being used extensively for the Hostess comeback. A “prepare your cake face” website was developed for consumers to post pictures of their excited faces as they looked forward to the return of Twinkies. Hostess street teams distributed Twinkies, plus T-shirts and buttons that touted, “I saved Twinkies,” to consumers whose pictures were posted and videos were shared (many TV stations carried the clips.)24

FLowers Foods25

Flowers Baking Company became the second largest producer and marketer of pack- aged bakery foods in the United States through its growth by acquisition, buying over 100 bakeries. Its direct store delivery system (DSD) employed about 4,000 indepen- dent distributors who owned the rights to distribute certain brands of the company’s fresh packaged bakery products; about 500 distributorships were company owned. Its warehouse division (20 percent of sales) sold/shipped fresh and frozen products directly to national accounts’ warehouses. Flowers’ largest customer was Walmart in 2012 (20 percent of Flowers’ sales.)

Flowers became the first commercial bakery to introduce sugar-free bread as well as low carbohydrate bread. Its sweet goods divisions included Mrs. Freshley’s brand on fifty different pastries and snack cakes, including cupcakes, “Dreamies” (simi- lar to Twinkies), cinnamon rolls, Danishes, honey buns, donuts, and fruit pies; the Tastykake brand (acquired in 2011) was used on many cupcakes, donuts, and fruit pies; and the Blue Bird Bakeries brand was used on affordable snack cakes including the Pink Snowball and Bingles. A corporate goal was to develop new products; nearly $2 million was spent annually for new product development. Because of the growing interest in health issues, Flowers introduced a number of 100-calorie products such

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Carolina Foods, Inc.: Can the Duchess Become Queen? 113

as mini-muffins and mini-cupcakes for the weight-conscious market under the Mrs. Freshley’s and Blue Bird brands. In addition, it began making corn and flour tortillas.

Flowers, Mrs. Freshley’s, and Tastykake had specific websites and social media pages that were well designed and had great photography to illustrate products. In addition, recipes and store locator information was provided. Mrs. Freshley’s launched its first- ever sampling tour, making stops at various convenience stores and supermarkets in February 2014. Customers were invited to taste the brand’s different pastries and snack cakes and could win a $50 gas card at each stop. The objective was to introduce new packaging, a new logo, and to better build brand awareness.

CLoverhILL Bakery 26

Cloverhill, founded as a family-owned bakery in the Chicago area in 1961, was famous for its Big Texas cinnamon roll (named “Pastry of the Year” by Automated Merchandiser for the fifth consecutive year in 2013).27 A third-generation family business, Cloverhill- Vend, LLC was purchased for approximately $670 million by the Swiss bakery goods company, ARYZTA AG, in March 2014. ARYZTA was a leading global supplier of specialty baked products to customers in the foodservice industry, as well as consumers through retail outlets in Australia, Europe, North America, and parts of Asia. In the U.S., ARYZTA owned cookie maker Otis Spunkmeyer, artisan bread maker La Brea Bakery, frozen pizza and appetizer maker Great Kitchens, and California-based Fresh Start Bakeries. Cloverhill introduced its GoGoodness, a healthy line of fruit-filled pas- tries designed to appeal to health-conscious on-the-go snackers.28

BImBo BakerIes usa29

Grupo Bimbo was the largest baking company in Mexico and eventually the world. “To nourish, delight and serve our world” was Grupo Bimbo’s corporate statement. Bimbo entered the U.S. market with the purchase of La Hacienda, a California tortilla company in 1994. In succession it acquired Mrs. Baird’s Bakery of Ft. Worth, Texas (at the time the largest family owned bakery in the U.S.); George Weston Ltd (owner of well-known brands including Entenmann’s sweet goods, Thomas’ English Muffins, Arnold and Brownberry breads); and Sara Lee’s North American bread business.

Bimbo was committed to improve healthy eating and reducing sugars, sodium, and saturated fats in more than 125 of its products. Its website documented its ongoing efforts for healthy eating, including partnership with Weight Watchers, and offered nutritional information on the front of its packages. It sponsored many American soc- cer teams (as well as others around the globe.)

In 2014, Bimbo Bakeries U.S. (and Canada) represented 46 percent of Grupo Bimbo’s revenues; Mexico accounted for 38 percent, Latin America accounted for 13 percent, and Europe 3 percent. Given its founding and early success in Mexico, it was not surprising that Bimbo had the largest portfolio of Hispanic brands.

Bimbo Bakeries USA had a fairly comprehensive website, but did not use social media; however, the individual brands engaged customers through social media as well as individual brand websites. For example, in 2014 Entenmann’s had 1.2 million likes on its Facebook page; Thomas’ English Muffins had 561,773 likes; and Sara Lee had 155,343. Entenmann’s VP of marketing, Maureen Sticco, said, “Entenmann’s sees

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114 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

the most organic growth from visuals of products. Entenmann’s actively advertises on Facebook and we use Facebook to test new types of ads.”

mCkee Foods30

In 2014 McKee Foods was led by third-generation Mike McKee, the founders O.D. and Ruth McKee’s grandson; thirteen other family members worked for the organiza- tion. Growth was organic and through acquisitions, the latest being Drake’s snack cake brands from the 2013 bankruptcy of Hostess Foods. McKee Foods had five bakeries, each employing more than 6,300 people; products were sold in the United States, Canada, and Mexico. McKee Foods was the first bakery to sell individually wrapped cakes in multi pack cartons with value pricing. Two other divisions completed McKee Foods: Sunbelt Bakery offered granola cereals and thirty-two different multi pack and single-serve snacks (primarily granola bars), and Fieldstone Bakery targeted the food- service industry.

McKee’s Little Debbie brand, named after the McKees’ granddaughter (in 2014 Debbie McKee-Fowler was executive vice-president of McKee Foods) was the lead- ing snack cake in unit sales for 2013. More than 100 varieties of Little Debbie multi packs and single serve snacks were sold. Little Debbie was a common lunchbox treat and after-school snack, as thirty single-serve products were offered between the prices of 25¢ and 79¢ making the sweet goods affordable. In recognition of changing con- cerns about health, McKee offered a smaller version of its Little Debbies that had 100 calories. It introduced Little Debbie chocolate cupcakes (crème filled) to compete head-to-head with Hostess cupcakes (and gained share while Hostess was shut down.)

Little Debbie sponsored Marcos Ambrose, a NASCAR driver. The Little Debbie Facebook page had 2,058,500 likes in the fourth quarter 2014.

Bon appeTIT Bakery 31

Bon Appetit was a twenty-year old, privately-owned baking company that specialized in gourmet baking and distribution of top quality Danishes, cinnamon rolls, jumbo muffins, jumbo honey buns, packaged donuts, cakes, gourmet Hispanic pastries, and a vast assortment of other fine gourmet products to the retail and convenience store industry. Its state of the art facility was designed to house its customized gourmet bak- ing equipment.

A CSD (Convenience Store Decisions) sales tracking study rated Bon Appetit the top fresh bakery supplier to retailers (cited from Bon Appetit web page). Bon Appetit was voted top bakery by 23 percent, compared to Interstate Bakeries (Hostess) which received 12 percent of the top vote; Pillsbury achieved 10 percent, and Sara Lee Food- service 8 percent.

See Exhibit 2 for a summary of CFI’s competitors in the industry.

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Carolina Foods, Inc.: Can the Duchess Become Queen? 115

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116 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

Exhibit 3: Carolina Foods’ Duchess Billboard, Circa 1950

Source: CFI company photo.

CaroLIna Foods, InC.—hIsTory

The Early Years Vernon Scarborough was good-looking, gregarious, energetic, and a serial entrepre- neur. In 1934, at the age of twenty-two, he launched the Carolina Sandwich Company in Charlotte, NC. Starting at midnight and working with a sole employee, he made fresh sandwiches, delivering them to local soda shoppes, textile mills, and various other customers.

After the bombing of Pearl Harbor and the U.S. declaration of war in 1941, Vernon joined the Navy. He was posted to Camp Pendleton in California where he ran the food service operation, feeding 100,000 servicemen at every meal. When the War was over, Vernon returned to Charlotte and focused on growing the business; he began making bakery items and sweet goods (donuts and fried pies).

Vernon recognized the value of advertising his products to local consumers. In 1950 there were print advertisements for his Mammy’s Fried Pies in the Charlotte Observer (local newspaper), and the firms’ delivery trucks had pictures of CFI’s prod- ucts painted on the sides. An iconic bill board featuring a 3-D slice of pie stood on the outskirts of Charlotte. See Exhibit 3.

The company’s name was changed to Carolina Foods as it expanded into making yeast-raised glazed donuts as well as baked pies. The company’s bakers perfected manu- facturing of its signature honey bun. (Years later the Duchess Honey Bun attracted national attention when it was featured on the Food Network’s program, Unwrapped.)

Paul Takes Over Paul Scarborough was the oldest of Vernon’s three children. He recalled, “I was not pressured to join the family business. I went to college to earn an engineering degree and an MBA to support my career goal of becoming an investment banker.” He lived and worked in Washington DC for a couple of years. He realized that he didn’t want

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Carolina Foods, Inc.: Can the Duchess Become Queen? 117

to live in New York City, mecca of investment bankers. Paul continued, “I came home to Charlotte in 1977 and began working for my father at Carolina Foods, addressing issues in the company’s sanitation department. I learned the business and worked my way up, taking over from my father in 1984.”

Upholding family tradition, Paul did not pressure either of his children to enter the business. He said, “In fact, I tried to dissuade them, but they came back.” Katie, the eldest, earned her undergraduate degree and master of accountancy at Wake Forest University in 2004 and 2005. She worked at the SEC for two years, then at a hedge fund for a year. She asked to join the business, “But Dad said he’d have to fire someone to make a place for me.” Some months later the controller quit, and Katie stepped into his position. After two years, Katie left to earn an MBA from Wharton, subsequently returning to manage the company’s finance and strategy functions. Katie’s younger brother, Ruffin, earned his civil engineering degree from Duke University in 2008. His initial interest was in commercial real estate, but given the country’s economic straits at the time, prospects were not encouraging. Ruffin joined Carolina Foods in the pur- chasing department. See Exhibit 4 for CFI’s organizational chart.

Exhibit 4: Carolina Foods Organizational Chart

President & CEO Paul Scarborough

Finance & Strategy Ka.e Scarborough

Caldwell

Sales Doug Newton

Manufacturing

Packaging Purchasing

Raw Materials Purchasing

Ruffin Scarborough Personnel Sanita=on Quality Assurance Produc=on Shipping Maintenance

Source: CFI files.

Family had long been a theme for this company in its ownership model, its employment culture, and its marketing image. Carolina Foods celebrated its eightieth anniversary in September 2014, with a party for all its 450 employees and their fami- lies. The company identified itself as “bringing families together for breakfast, snacks, and on holidays and special occasions.”

CFI was established as a wholesale sweet goods bakery, producing pies, pastries, donuts, and other sweet goods marketed under the brand name, Duchess. Carolina Foods made all of its products “from scratch” using the finest ingredients, blended in house to ensure superior taste and quality. Annual sales increased steadily as CFI’s product line expanded, and as business grew to include co-packing for other man- ufacturers and mass market customers such as wholesale distributors, food service distributors, and vending distributors.

Contract manufacturing, also known as co-packing, was common practice in the baking industry in the USA. A co-packing manufacturer such as CFI entered into a contract with a customer to produce goods under a particular brand label, according to

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118 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

the customer’s specifications. The customer created the brand; the co-packing manu- facturer made the product. Such customers could range from mass merchandisers to smaller grocery chains and convenience stores to other baked goods manufacturers, including competitors. Consumers were largely unaware that a certain product was made FOR a given brand, rather than BY that brand. Being asked to make someone else’s brand was a vote of confidence in CFI’s manufacturing abilities and quality con- sistency. In general, margins derived from the co-packing business were not as large as profit from the manufacturer’s own brand; however, some benefits occurred, such as economies of scale in purchasing, manufacturing, and distribution.

While markets and sales were growing, Carolina Foods’ production facilities were stretched to the limits in the original factory, just over 1.5 miles from the center of the city, now on prime real estate in Charlotte, the second largest banking center in the U.S. The company’s seven high-speed, state-of-the-art production lines fully occupied the factory space, pushing warehousing and some personnel functions off site. The factory operated some lines on three shifts, others on two shifts. Since 1998, Paul Scarborough harbored plans to build a new factory to facilitate greater production capacity.

Despite the constraints of the factory, CFI attained Safe Quality Food Program (SQF) 2000 Level 3 certification; it was one of the baking industry’s few firms whose entire production facility was SQF Level 3 certified. In addition, CFI received the highest rating for eleven consecutive years in all five areas of the American Institute of Baking (AIB) International Consolidated Standards for Inspection of Prerequisite and Food Safety Programs. CFI was kosher certified by the Orthodox Union, the most widely recognized and largest kosher certification agency in the USA.

duChess Brand produCTs

The bakery produced a number of products, all of which were introduced before 1992 (see Exhibit 5). The Duchess brand name was selected sometime before 1950, as far as can be documented; however, the name was not registered as a brand owned by CFI until Katie, after returning from earning her MBA, investigated and completed the application process to register the brand as CFI’s.

“New products can change the industry and grow your market share. We thought we had a winner this year (2014), but then the test kitchen just couldn’t bake it to where it met our standards,” concluded Paul. “We are still trying different ideas and will add new products if they contribute to our line and of course they have to taste good.”

In 1987, Carolina Foods was the first bakery in the USA to offer single portion bakery sweet snack items in modified atmospheric packaging.32 Paul said,

Using German technology, we came up with extended-life packaging that enabled our product to have a seventy-day shelf life. We thought that could provide a competitive advantage for us with the club stores. It works well on anything that doesn’t have pow- dered sugar which occasionally blows into the seal area and causes the food to spoil in less than seventy days. The number of spoiled packages is small, but it is too large for the stores. If honey buns don’t have a seventy-day shelf life, our customers require direct store door deliveries and that is really expensive—especially with gas prices today and the cost of labor.

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Carolina Foods, Inc.: Can the Duchess Become Queen? 119

Exhibit 5: Duchess Brand Product Line

Duchess Glazed Honey Buns Duchess Iced Honey Buns

Duchess Gem Donuts • Crunch • Powdered Sugar • Chocolate Covered

Duchess Pecan Pies Duchess Coconut Pies

Duchess Fried Pies • Apple • Cherry • Lemon • Peach • Chocolate • Sweet Potato

Duchess Cinnamon Rolls Duchess Dunking Sticks Duchess Apple Fritters

Source: CFI files.

duChess markeTIng

When Paul assumed leadership in 1984, he focused on baking great products, and wide distribution; he did no advertising—a policy that prevailed. Katie restarted the company’s promotional activities when she developed CFI’s first website in 2012 and

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120 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

began the Carolina Foods, Inc., Facebook and Twitter accounts. In the fourth quarter 2014, CFI’s Facebook had 896 likes; the Duchess Snacks Twitter handle had thirteen tweets and four followers. The CFI website was not set up to accept orders and a Duchess brand website did not exist. Katie and Paul were interviewing candidates for a marketing position; the person selected would be expected to manage the website.

Katie commented, If social media is properly developed and active including interesting posts, games/ contests or other user generated reviews or comments, developing an online presence can be accomplished at a rather low cost. But at this point in time, Duchess is relatively unknown online. I think offering Duchess-branded honey buns, donuts, etc. online is possible with larger packs if distribution costs can be negotiated at a lower cost point.

She continued her musings: Freshness and convenience are possible competitive advantages to highlight in promot- ing the brand online. Some marketing dollars would have to be spent in paid media to drive the consumer to the Duchess website. Games/contests that engage the con- sumer with the brand can speed awareness through sharing. Small rewards—coupons especially—could be offered online for ‘liking’ the site on Facebook or tweeting or re- tweeting. We haven’t used coupons before but it might be good to try them. Something new to increase sales . . .

CFI’s community contributions included sponsoring a youth softball team, sup- porting North Carolina troops via Operation North State, and donating to the Charlotte Rescue Mission. The management team considered community support to be part of the company’s marketing activities.

The sales force, led by Doug Newton, included three salesmen who called on cus- tomers such as club stores, mass merchandisers, drug stores, the military, vending distributors, convenience stores, and grocery stores. Paul, Doug, and other company personnel regularly attended trade shows including: NAMA (National Automatic Merchandising Association, i.e., vending), PLMA (Private Label Manufacturers’ Asso- ciation), ACE Vending (Atlantic Coast Exhibition), and NACS (National Association of Convenience Stores).

Doug related CFI’s pricing policy: “We quote all customers the lowest price. We don’t offer rebates or discounts, but we do have special pricing for those customers that order by the truckload.” Prices to consumers were determined by the various retailers that purchased CFI products. Most retail selling prices were comparable to those the retailers set for Hostess, Little Debbie, Tastykake, etc.

Paul reflected on the growth of the company: CFI started doing business with a warehouse/club store in 1992 and by 1994 our geo- graphic reach grew to include all states in the USA, with additional markets in Canada, Mexico, and Puerto Rico. We use our own trucks to deliver to warehouses as far away as Georgia. These trucks back-haul raw materials and packaging. For customers who are further away, we use contract carriers, a common practice for a company of our size in the food industry. We don’t use direct store delivery (DSD), because of the high cost of gas and labor. Modified atmospheric packaging has helped with our distribution costs.

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Carolina Foods, Inc.: Can the Duchess Become Queen? 121

Issues oF ConCern For The BakIng IndusTry and CFI

Paul stated: My biggest concern is if the “Feds” start tampering with what people eat. In Mexico, they have regulations and extra taxes on some items that contain sugar. Soft drinks are an example. Here in the U.S., we had to change the recipe for products we sold to the New York state prison system that required low salt and low sugar. Prisons have a cap- tive audience, all of whom have to eat what is available to them. Remember when New York City tried to tax super-sized soft drinks? People do not want that much govern- ment interference.

People are eating healthier, but foods consumed in moderation make up a normal diet. One of the good things about our business is that our consumers are not that health conscious; they don’t care about organic. Organic products, gluten free, etc. are higher-end and cost more, [Paul said.] Entenmann’s has a fat free line. Lance has a reduced fat line. Our honey buns have never had trans-fats and they have always had 43 percent less fat than the competition. However, when we tried to sell products on that basis, nobody bought them, even though the recipe hadn’t changed. Salty snacks and the savory snack market are potential competition, but it’s not head-to-head. People generally want something sweet or something salty. But CFI is so small that we’re not worried about trends, except the long-term healthy trend, government restrictions, and taxes.

Another issue of concern for Paul was the growth of private labels. He explained: Private label is similar to co-packing, but not the same. Although co-packing (contract manufacturing) has a manufacturer making or packing product for another manufac- turer or distributor, a private label is a national brand equivalent, made and packed under a retailer’s brand name. Private label is sometimes called a controlled label or store brand. Many convenience stores are looking for their own branded product for their stores. For instance, 7-Eleven has quite a number of baked sweet goods using the 7-Eleven private brand. The recession caused many consumers to switch to lower- priced store brands and store brands are more profitable for the store.

Private label dollar share in the U.S. during 2008–2013 increased from 15.3 percent to 17.4 percent. North American consumers had a high rate (94 percent) of saying they would continue to buy private label products after the recession ended.33

Paul continued with his concerns: Then there is par-baking that is really a variation of a private label. Commercial baker- ies are marketing par-baked products to grocery stores and restaurants as a faster and more cost-effective alternative to baking from scratch. The product is 80 percent baked and then immediately flash-frozen at the factory. Then the frozen product is shipped to a grocery store or a restaurant, where the product’s baking is finished onsite. Piping those baking odors into the store or restaurant results in those tantalizing smells that propel consumers to buy baked goods!

By purchasing frozen par-baked products, grocery stores and restaurants were able to offer fresh-baked goods without having to hire bakers or worry about products spoil- ing quickly.

Paul stated: Lastly, the industry is concerned about bakery product contamination from allergens. Recalls of foods containing allergy-provoking ingredients are increasing. As a result of growing concern by consumer groups, the FDA strengthened manufacturing and label- ing guidelines. The Food Allergen Labeling and Consumer Protection Act (FALCPA)

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122 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

requires that labels identify—in plain English—eight categories of allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, and soybeans. Three or four of those may be used in baking sweet goods.

Bakery IndusTry Trends

Katie agreed with her father’s concerns and thought she should investigate any other trends in the food industry that might pertain to Carolina Foods before working on her recommendation. She knew that energy efficiency and managing raw material costs were on-going drivers in the industry. But she wanted to know what others thought might be important trends. She knew that it was important for bakeries to monitor public preferences to produce products that appealed to consumers. Successful bak- eries anticipated changes in consumer tastes, dietary trends, and product packaging preferences, but product taste was important.

Gluten-free Market Gluten-free bakery products were in greater demand not only from those who suffered from celiac disease (an autoimmune digestive disease that damaged the villi of the small intestine and interfered with absorption of nutrients from food), but also others who were gluten-intolerant. An even larger market existed that believed gluten-free was bet- ter for overall health.34 Some consumers believed gluten-free products were of higher quality. The gluten-free market in the USA was estimated to be worth about $490 mil- lion, comprising $282 million from bakery, and was expected to see annual growth of nearly 40 percent through 2018, according to Euromonitor International.35 Prices for gluten-free products tended to be higher than for regular, equivalent products—often twice the price.36

Demand for Organic Foods The U.S. market for organic food and beverage products grew from $1 billion in 1990 to more than $29 billion in 2011, according to the Organic Trade Association.37 Foods must comply with regulations to bear the organic label; however, producers often found compliance difficult because of the length and complexity of the federal regulations. In addition, the states established their own organic labeling require- ments. Noncompliance resulted in substantial fines. People were not concerned just about sugar and fat, but also preservatives and long lists of ingredients that implied “processed” rather than natural foods. “Shortening ingredients lists and substituting artificial and unrecognizable ingredients with natural or recognizable ingredients con- tinue to be winning strategies for many packaged food manufacturers” according to Packaged Facts.38

Snacks and Savory Market The snacks and savory market was growing rapidly. U.S. retail sales of packaged snacks were nearly $64 billion in 2010 and projected to reach $77 billion by 2015, a total market increase of over 20 percent.39 American consumers were snacking more than ever, as they dined less frequently in restaurants and increased their on-the-go eating, replacing meals with several smaller snacks. According to Snack Attack, 36 percent of

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Carolina Foods, Inc.: Can the Duchess Become Queen? 123

people snack because they are bored; 73 percent of the time they snacked because of hunger or they needed an energy boost.40 More than 50 percent of individuals were eating three or more snacks a day in 2013, compared to just over 20 percent eating three snacks per day in 2010.41

Beck and Schatz reported in the Wall Street Journal that Americans’ eating habits were changing toward healthier options, especially among working adults. Healthy snacks had a growth rate of 6.4 percent.42 Salty snacks represented snacks of choice for many who preferred them over sweet snacks (sweet baked goods, candy, cakes, pies, etc.). This market was enticing because of its current growth; negative features included the big players already dominant in this space, such as PepsiCo’s Frito Lay (FLNA) division (44 percent value share in 2014).43

Hispanic Market Growth The 2010 census identified more than 50 million Hispanics residing in the United States (a 43 percent increase over the 2000 census). Hispanics were the fastest growing segment and comprised more than 17 percent of the U.S. population in 2013. Their heritage was diverse: 63 percent identified themselves as Mexican, 9.2 percent Puerto Rican, 3.3 percent Salvadoran, 3.2 percent Cuban, 2.1 percent Guatemalan, and 1.8 percent Colombian. What was popular with one of these groups was not necessarily with another.44

In 2012 Dunkin’ Donuts introduced both limited time and permanent menu items that appealed to various sub-markets of Hispanics—a Cuban sandwich and Café con Leche in Miami, Huevos Rancheros Wake-up Wrap in Phoenix, and Latin-inspired donuts in New York City. Dunkin’ Donuts saw “an opportunity to increase consumer engagement and enhance the brand equity within the Hispanic marketplace.”45

Hispanics were brand-loyal consumers, especially when marketing campaigns included family, heritage, pride, and collective togetherness. Hispanics value the rela- tionship between the consumer, the food manufacturer, and the retailer. They were more likely to have a smartphone than a computer (great for scanable mobile coupon- ing). Further, Hispanics were 25 percent more likely to follow a brand on social media. Hispanics were the fastest growing ethnic group in 2012 year over year for Facebook and Wordpress.com according to Nielsen.46

Websites and Social Media Most U.S. bakery companies had websites, and many had individual brand websites. These ranged from an opening page with a minimum of information to sites that were elaborate, interactive, and detailed (all products with sizes, colors, specifications, etc.) and intended to generate sales. Many of the companies wanted user-friendly sites and organic search engine optimization rather than using paid “ad words,” as some con- sumers ignored the ads. Online shopping for food was expected to increase by 126 percent as families tired of trudging the aisles of supermarkets.47

Americans eighteen and older spent on average eleven or more hours per day on electronic media including computers, TVs, smartphones, etc.48 Nearly 75 percent of online adults used social media sites. Facebook was the largest social networking site (67 percent of American adult internet users). Second was LinkedIn (20 percent); third was Twitter (16 percent); and two tied for fourth: Pinterest (15 percent), and Instagram (15 percent). Pinterest was the fastest growing (88 percent) in 2013 over

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124 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

2012. The newest social media sites with increasing users were: Snapchat (fastest with millennials); Vine (micro-videos of six seconds or less); and WhatsApp (used with a subscription on smartphones to provide instant messaging around the globe).49 All of these social media sites sold advertising.

Digital native millennials used the Internet for socializing, purchasing goods and services, researching product reviews (that they valued over advertising), comparing features and checking prices. “Millennials are more engaged with products online. They want to interact with brands and to share feedback.”50 In 2012 Nielsen determined that earned media sources remained the top trusted source of consumers: “92 percent of consumers around the world say they trust earned media, such as word-of-mouth or recommendations from friends and family, above all other forms of advertising—an increase of 18 percent since 2007.”51 Earned media sources constituted the public conversation about a brand.52

Top Food Trends—2014 Institute of Food Technologists (IFT) identified top food trends for 2014.53 Four of the trends were apropos to bakeries:

• Bakery products represented 12 percent of global product launches with posi- tioning of economy (value) during 2013.

• Health consciousness was increasing across America, with nearly a third of U.S. consumers saying they were knowledgeable about health and nutrition.

• Superfood claims continued to soar, led by products with organic positioning. Also prominent were products marketed as allergen- or gluten-free, with no additives or preservatives, or containing antioxidants.

• Thirty percent of U.S. consumers chose foods because they were high in pro- tein; those consumers were willing to pay 5 percent more for products that contained added protein. New protein product development for bakery items and plant-based protein were expected to gain strength.

Speakers at the 2014 IFT meeting identified other issues that were important for sweet goods bakeries:

• No pronounced trend in sugar reduction; flavor was first and health attributes second. “Consumers aren’t afraid of sugar and salt. They’re just afraid of too much sugar and salt.”54

• No-sugar-added claims surged in food product launches to 59 percent in 2013, and no-trans-fat claims showed strong growth in categories including baked goods.

• “Stealth reduction” occurred when companies reduced sodium, sugar, and trans fats without promoting the new formulations.

• The “free-from” food movement was booming. Consumers believed free-from (as in free-from additives, free-from preservatives, etc.) was healthier; however, they expected more options without sacrificing flavor. Innovation expanded over a broad range of products with a focus on improved taste; categories receiving particular attention were dairy alternatives, including almond milk and coconut milk that were free from lactose. In general, dietary intolerances were attracting attention in the food marketplace.

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Carolina Foods, Inc.: Can the Duchess Become Queen? 125

whaT To do aBouT duChess?

Katie mulled CFI’s options for the future while her father and Doug Newton were away at the trade show in Las Vegas. She knew the family business and its flagship Duchess brand stood at a crossroads near the end of 2014. The future was full of able competitors, new trends in consumption, and myriad opportunities. Change was imperative to accomplish the growth Paul wanted.

With all the concerns for the baking industry and the possible impact of the vari- ous trends she had been reviewing, Katie was excited about some of the new products developed in the company’s test kitchen, though none was ready for market yet. She knew there was good potential to strengthen the Duchess brand, deepening CFI’s penetration in its existing markets. The use of social media marketing also appealed to her as did opening an online store for her family’s company. She had established a corporate website, but how did you turn that into a store? She thought, “Everything seems to be sold online these days and our Duchess Honey Buns taste so great when they are fresh. I believe we could fill orders quickly—delivering a really fresh product conveniently.”

Each of the three ideas for growth seemed to be a good possibility, but which would she recommend to her father on his return?

noTes

1. Mergent: Commercial Bakeries. Mergent Intellect Database. http://www.mergentintellect.com.

2. Mergent Intellect: Bakery Industry—Sales & Marketing. 3. Mergent Intellect: Bakery Industry. 4. Mergent Intellect: Bakery Industry—Critical Issues. 5. Mergent Intellect: Bakery Industry—Major Products. 6. Top Trends Revealed at I.F.T. 2014, http://www.foodbusinessnews.net/resources/

slideshow/2014. 7. Mergent Intellect: Bakery Industry. 8. Mergent Intellect: Bakery Industry—Retail Bakeries. 9. http://www.foodbusinessnews.net/resources/slideshow/2014. 10. Mergent Intellect: Bakery Industry—Human Resources. 11. Mergent Intellect: Bakery Industry—Critical Issues. 12. Mergent Intellect: Bakery Industry. 13. Mergent Intellect: Bakery Industry—Human Resources. 14. http://foodbusinessnews.net/resources/slideshow/2014. 15. Information in this section came from Hostess Brands website: www.hostessbrands.

com. 16. http://www.uscourts.goc/bankruptcybasics.html. 17. “Twinkies Likely to Survive Sale of Hostess,” USA Today, November 19, 2012. 18. “Hostess Bankruptcy Judge Just Approves Liquidation Plan, Approves Firing

of 15,000 Employees, Judge Keeps Existing Management in Place. Keeps Case

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126 Case Research Journal • Volume 35 • Issue 4 • Fall 2015

as a Ch. 11 Restructuring for Privately-held Hostess Brands During ‘Orderly’ M&A Process,” www.privco.com, November 21, 2012.

19. McCarty, Dawn and Phil Milford, “Hostess Chooses Apollo, Metropoulos as Lead Bidder,” Bloomberg, January 31, 2013.

20. Lapowsky, Issie, “Inside Hostess’s ‘Sweetest Comeback’ Campaign,” Inc., July 15, 2013.

21. Schultz, E. J., “News Analysis: Hostess with Mostest,” Advertising Age, December 3, 2012, p. 11.

22. Schultz, E. J., “What to Watch for When Hostess Has Its Bake Sale,” Advertising Age, December 3, 2012, p. 1.

23. Ibid. 24. Stanley, T. L., “Twinkies Relaunch as Dude Food,” Adweek, August 7, 2013, p.

11. 25. Information in this section came from Flowers Foods website: www.flowersfoods.

com. 26. Information in this section came from Cloverhill Bakery website: www.cloverhill.

com. 27. Maras, Elliot, “State of the Vending Industry Report” Automatic Merchandiser,

June/July 2012. 28. “Cloverhill Go Goodness Healthy Pastry Alternative,” Vending Market Watch,

http://www.vendingmarketwatch.com/product/10352603/cloverhill-bakery- cloverhill-go-goodness-healthy-pastery-alternative.

29. Information in this section came from Grupo Bimbo website: www.grupobimbo. com.

30. Information in this section came from McKee Foods website: www.mckeefoods. com.

31. Information in this section came from Bon Appetit website: www.bonappetitbakery.com.

32. For more information: http://modifiedatmosphericpackaging.com/applications/ modified-atmospheric-packaging-bread-products.

33. Private Label Foods & Beverages in the U.S., 8th edition, September 8, 2014, http://www.packagedfacts.com/private-label-foods-8358109/.

34. Yang, M., (2013) “Dunkin’ Donuts Will Sell Gluten-Free Baked Goods,” Time Magazine, http://newsfeed.time.com/2013/06/21.

35. Mergent Intellect: Bakery Industry. 36. Yang, 2013. 37. Mergent Intellect: Bakery Industry. 38. “U.S. Market for Flavors,” Packaged Facts, http://www.packagedfacts.com/

flavors-8129951/. 39. “Snackfood Update in the U.S.,” PRNewswire, New York: June 25, 2011. 40. “Snack Attack,” Entrepreneur 42(7): 28, 2014. 41. Snyder’s Lance, Inc. presentation, datasource: ABC Research, Inc, 2014.

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Carolina Foods, Inc.: Can the Duchess Become Queen? 127

42. Beck, Melina and Amy Schatz, “Americans’ Eating Habits Take a Healthier Turn, Study Finds: Working-Age Adults Consume Fewer Calories, Eat Out Less,” Wall Street Journal, January 16, 2014, p.B-2.

43. Presentation by VP Sales, Frito Lay North America, Nov. 24, 2014. 44. Whitaker, Shane, “Hanging on to Heritage,” Food Business News, August 21, 2013,

www.foodbusinessnews.net/articles/news_home/Consumer_Trends/2013/08. 45. MacArthur, Amanda, “Dunkin’ Donuts & Loyalty: 5 Reasons Why They Rank

#1,” Swipely, March 11, 2013. 46. Whitaker, 2013. 47. Poulter, S., Mail Online, www.dailymail.co.uk/news/article/-2418414/online-

food-shopping-increases-families-fed-trudging-aisles-supermarket.html. 48. Petronzio, Matt, “U.S. Adults Spend 11 Hours Per Day With Digital Media,”

Mashable.com, March 5, 2014. 49. http://www.masters-in-marketing.org/the-social-media-war/. 50. Powell, Matt, “Sneakernomics: Marketing with Millennials,” Forbes, August 6,

2014. 51. “Global Trust in Advertising and Brand Messages,” Nielsen, 4-10-2012, http://

www.nielsen.com/us/en/insights/reports/2012/global-trust-in-advertising-and- brand-messages.html.

52. “The Evolution of Influencer Marketing and the 5 Influencer Insights That Matter,” Tracx Social Intelligence.

53. http://www.foodbusinessnews.net/resources/slideshow/2014. 54. Ibid.

For the exclusive use of N. Bardawil, 2017.

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