business news in context, analysis with attitude

…with brief, occasional, italicized and sometimes gratuitous commentary…

• The New York Times this morning has a story about there are antitrust concerns in some quarters that a possible acquisition by farmer-owned cooperative Dairy Farmers of America (DFA) of the assets of Dean Foods, "the century-old milk processing company that sought bankruptcy protection in November."

According to the story, "The biggest dairy co-op in the United States, with more than 14,000 members from New York to California, D.F.A. was established in 1998 to help farmers … market their raw milk to dairy processing companies, which prepare the milk for distribution to retailers.

"Over the years, however, the co-op has also invested heavily in milk-processing operations, meaning that it buys some of the milk its own marketing arm sells. Those investments have created a conflict of interest, farmers and the lawyers who represent them say, since milk processors benefit from lower prices, while farmers benefit from higher ones."

This is not "the first time the co-op has faced allegations of anticompetitive behavior," the Times notes. "In 2018, D.F.A., which makes billions of dollars in annual revenue, paid $50 million to settle a long-running class-action lawsuit brought by farmers who claimed the co-op had colluded with Dean Foods to lower milk prices. A group of the plaintiffs dissented from that settlement, filing a separate suit against D.F.A. in federal court in Vermont.

"That suit alleges that D.F.A. has engaged in a wide range of anticompetitive practices: making deals with other co-ops not to poach one another’s members, sharing milk-pricing information with those rivals to suppress payments to farmers, and signing restrictive supply contracts with processors like Dean Foods and Farmland that made it impossible for farmers outside the co-op to sell to those companies directly."

The Vermont suit is moving forward, despite the fact that DFA has decried it as being "without merit." It also remains "unclear" whether DFA will move to acquire Dean Foods' assets, or whether such a deal would be approved by antitrust regulators.

• Lord & Taylor has returned to New York's Fifth Avenue, just in time for the end-of-year holiday shopping season. But it isn't in the iconic location where it operated for more than 100 years before closing down less than a year ago; rather, it is in a pop-up shop in SoHo "selling a limited collection of inoffensive holiday gifts to last-minute shoppers."

The Times suggests that this is "a symbol of 'change and flexibility and newness that we’re bringing to the brand'," as expressed by Le Tote, the clothing rental startup that bought Lord & Taylor last summer for $100 million.

Not everyone is impressed.

"I don’t think anyone’s been hoping and praying someone would do this," Mark A. Cohen, director of retail studies at Columbia University, tells the Times. "A pop-up can work if it’s different and distinctive and you can’t find it anywhere else — something brand-new and edgy. If, at the end of the day, it’s just a lot of stuff with a formerly famous name attached to it, it’s not going to fly."

But Le Tote seems undeterred. The company has plans to open boutique-style stores around the country even as it decides what to do with existing department store locations. But the challenge is considerable - maintaining its relationship with the older customers it has established over decades while cultivating new connections to younger customers that it feels it needs to grow the brand.

Good luck with that. I always thought of Lord & Taylor as an old-person brand when I was young, and I still think of it that way now that I'm … well, older. It would take a lot of work to lure me into one of its stores without Mrs. Content Guy dragging me in, though to be fair, I'm not the target customer Lord & Taylor is seeking.

USA Today reports that Nestlé is selling its US ice cream business - brands that include Dreyer’s, Häagen-Dazs, Outshine, Skinny Cow, Edy’s and Drumstick - to Froneri, described as "a joint venture Nestlé created in 2016 with PAI Partners to manage Nestlé’s European ice cream business in 20 countries."

The story says that "Nestlé will continue to manage its remaining ice cream businesses in Canada, Latin America and Asia as part of its market structure. Froneri has operations in Europe, Latin America, Africa and the Asia-Pacific region."

"We are now making this business our global strategic partner in ice cream and are convinced that Froneri’s successful business model can be extended to the US market," says Nestlé CEO Mark Schneider. "With this transaction, we are taking a decisive step towards our goal of achieving global leadership in ice cream."

Business Insider reports that IHOP has unveiled a new format - Flip'd by IHOP, which will see its first location open in Atlanta next April, with more versions elsewhere in the country on the drawing board.

According to the story, "Flip'd serves menu items that are not available at IHOP, including breakfast burritos and pancake bowls, the latter of which are intended to make it easier to eat pancakes on the go … IHOP developed a new menu for the Flip'd chain that mixes classics with new menu items. Among the new options are breakfast burritos, sandwiches, and pancake bowls, which allow customers to add sweet and savory toppings to made-to-order pancakes — served in a bowl to allow for on-the-go consumption."

The story says that "IHOP aims to use mobile ordering and kiosks to get customers' orders in quickly and allow for faster turnaround."

It isn't the speed that bothers me about IHOP. It is the awful feeling in my stomach that I get after eating there. Sort of like when I go to White Castle. I always end up feeling like I need to have my stomach pumped, except that an hour later, nature takes care of that for me. So I suspect that the 'by IHOP' part of this banner won't exactly be a selling point for me.

Fast Company reports that Dwayne Johnson - one of the biggest movie stars in the world - apparently has a jones for Salt & Straw ice cream.

The story says that he and his business partner Dany Garcia have invested in the Portland, Oregon-based ice cream chain that has a cult-like following, now with 19 locations on the west coast.

The size of the investment was not disclosed. Fast Company says that "for Salt & Straw, the investment represents the latest in a growing portfolio of notable partners. Back in 2017, Danny Meyer’s Union Square Hospitality Group invested in the company, and in May, the burgeoning chain reported $4.2 million in new investors, including half of that from Oregon Venture Fund."

In a statement, Garcia says that “Salt & Straw’s proven commitment to connecting with local communities through their storytelling and creativity make this strategic investment a natural fit. We’re thrilled to provide our expertise to build upon their forward-thinking and disruptive approach that has delighted consumers and inspired meaningful brand experiences.”

Plus, the story says, "It’s a fun departure for Johnson, whose brand extensions to this point—Under Armour, Voss water, and the Athleticon conference announced in September with Garcia—have tied closely to his commitment to, and identity as, an absolute tower of muscle. But cheat day’s also full of business opportunity."
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