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News in Review
Market Reports
Food Quiz
Industry Discussion
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Subway vs. Quiznos
By: Steve Weiss
In 2005, Subway founder Fred DeLuca went on the record with an almost-fond acknowledgment of Quiznos, Subway's then fast-growing rival. Observing that both outfits were engaged in a share-of-stomach battle versus the burger chains, he acknowledged that there were often menu category benefits when a Quiznos moved into a Subway trade area. "If they never existed," DeLuca said, "our overall growth probably would be slower."
Any thoughts that this notion might develop into something downright chummy were obliterated, however, when in the fall of 2006 Quiznos fired the first shot in what quickly became dubbed "the Sandwich War." To support the launch of its Prime Rib Cheesesteak sandwich, Quiznos created aggressive ads that played up the macho content of its offering juxtaposed against a scrawnier Subway cheesesteak. Basically, the ads showed average people on the street praising Quiznos for its sandwich virility while they figuratively kicked sand into the face of its less popular rival.
Conceivably Subway might have overlooked this high-spirited and reasonably countered affront had it not been for step two in the campaign. Next Quiznos created a competition, with the assistance of online viral video firm iFilm (since purchased by MTV and branded as Spike), in which amateur videographers were invited to create and post their own (not all that surprisingly, exaggerated) versions of the "cheesesteak challenge" commercials. The "Quiznos vs. Subway TV Ad Challenge," as the contest was officially titled, is on its way to trial, and the implications of the court's findings for the modern marketing industry might be rather profound.
With apologies to any lawyers who might be reading this and could say this smarter, the Subway suit is invoking the provisions of the Lanham Act that provide for trademark protection and defense against false or misleading advertising claims. Indeed, many of the online entries use the Subway logo, and a number of entries appear to use product, both Quiznos and Subway, that has been manipulated to show bias to the Quiznos brand. The tone of some of the ads could be characterized as defamatory—in one ad, a young man cleverly shouts "Subway sucks" before heaving his sandwich across a parking lot.
Quiznos' defense is they didn't make the ads. And as equivocating as this might sound, Quiznos actually has persuasive legal justification for this position. In 1996, Congress passed a landmark piece of legislation called the Communications Decency Act. Section 230 of that act stipulates that an interactive Internet service provider such as iFilm cannot be held liable for the postings of users.
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Giving people self-confidence is by far the most important thing that I can do. Because then they will act.
- Jack Welch
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View updated pricing and information each week on the website for the following food-commodity markets:
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Beef, Veal & Lamb |
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Beef output last week fell 5.6% and was 2.3% less than a year ago. Beef packers may slow beef output this week as well due to waning margins. The beef trimming markets are moving lower which is typical for this time of year. Additional trimming markets declines may be impending. Still, sluggish imports and continued retail feature focus on beef grinds are expected to cause the beef trimming markets to remain notably above 2007 levels. Beef middle meat demand is reported to be suffering from consumer economic concerns. Prices per pound FOB from USDA.
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Dairy |
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The CME cheese markets are moving sharply lower. History suggests that modest cheese market declines may be coming during the next 2 weeks. Still, CME cheese prices are not likely to fall appreciably below the $1.65 level. Milk production growth could be tempered as the fall progresses due to waning milk farmer margins. August milk cow slaughter was 6.6% greater than 2007. The US butter market could turn lower soon as it currently holds a $.20 premium to the international butter market. Prices per pound, except Class I Cream (hundred weight), from USDA.
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Poultry |
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Chicken production for the week ending September 20th was 2.6% less than last year. Chicken output is expected to track below 2007 levels through the fall. Chicken breast and wing prices typically move downward during October. However, fairly steady to modestly higher chicken breast and wing prices are expected this month due to the aforementioned chicken output slowdown. The current 6 week moving average for broiler egg sets is 4.9% less than last year. Chicken producers could intensify future chicken output slowdown plans if their profits don?t improve soon. Prices USDA, FOB per pound except eggs (dozen).
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Seafood |
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The salmon markets remain relatively inflated due to disease concerns in Chile and a historically depreciated US dollar. However, if the world economy continues to suffer it may be modestly bullish for the value of the dollar which could bring a moderate boost to US salmon imports. Further, salmon demand typically wanes in the coming weeks putting moderate downward pressure on the whole salmon markets. Prices for fresh product, unless noted per pound from Fisheries Market News.
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Pork |
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The September 1st US hog and pig inventory was 2% larger than a year ago. The September swine breeding herd was 3% less than last year and the smallest for the date since 2005. Swine breeding herd liquidation could escalate in the coming months due to poor hog farmer margins. Pork output is expected to begin to trend below year ago levels sometime this winter. Most of the pork markets typically move downward over the next few weeks. Prices per pound FOB from USDA.
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Produce |
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Idaho potato prices have fallen to their lowest levels since May. 26% of the Idaho potato harvest is reported to be completed compared to the average for the date of 32%. Additional modest Idaho potato market declines may occur over the next few weeks; however prices are anticipated to remain substantially above prior year levels into next year. The iceberg lettuce market remains inflated due in part to light head weights which are forcing processors to purchase extra product leaving less supply on the open market. Volatile iceberg lettuce prices may persist next week. Prices shipping point unless noted (terminal) FOB from USDA
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Oil and Grains |
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The corn and soybean markets are lower due to a USDA revision in US stocks and deleveraging by investment firms. Grain markets could settle soon. Prices per pound (oils) or bushel (grains) FOB from USDA.
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Canned and Frozen Food |
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Tomato Products, Canned - California tomato processing has been historically strong since late August. We are now estimating 2008 US tomato for canning output at 12 million tons, 5.5% less than 2007. The markets are firm. Price per case (6/10) FOB from Supply and Market Report.
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Processed Fruits and Vegetables - The Midwestern green bean and corn for processing harvests are finishing nicely due to warm temperatures. Still, elevated raw product costs are expected to cause inflated processed vegetable prices to persist. Prices FOB per case from Supply and Market Report.
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Profit Sharing
Community member rob0225 writes...
I would like to get opinions on this and please point out any weakness. I own a small bagel/coffee shop and have been open for 9 months. I want to start a profit sharing program for our employees. My thought is I will set a monthly sales goal and 50% of sales over that goal will be split between the employees based upon the # of hours they work. I am not yet turning a profit so that is why I plan on using a goal vs. actual profit initially.
I see...
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Brandon was right!
Community member J.P. writes...
Brandon, I want to thank you for the good advice on trimming my menu down.
I didn't want to listen when you said that I had too many menu items. I had everything cross-utilized out the wazoo. I was personally in love with every item. The kitchen could put everything out, no problem. That Brandon guy doesn’t know what he’s talking about…
But I kept thinking about it. Late at night...
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You want to be compensated for what??!!
Community member Eddinger writes...
Hey to all - I got a good one for you here...
I know the economy is really tight right now - our recent sales have confirmed that for us - but give me a break. It seems like everyone thinks that if they complain about something you are supposed to automatically bow down to them and give them whatever they want because the customer is always right. Well this week I had a customer call me to complain that he was in our restaurant for lunch that afternoon, he had went to the cash register...
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Some call me a nut and I look like a mutant
I am the fruit of the Soapberry tree. I am native to China, but today I am cultivated all over the globe. My single black seed is surrounded by smooth aromatic and juicy opaque flesh while covered by a rough, slightly spiked, leathery reddish pink shell. I have a wild cousin who grows hair on his shell, but he had to get radiated to travel so you don't see too much of him. I have been referred to as a nut, but I look more like a mutant strawberry. Eaten fresh I have a sweet acidic musty flavor and I get devoured out of hand or in fruit salads. You will also find me canned in a dried form where my pulp turns black and my flavor becomes similar to that of a Muscat grape. I am rich in vitamin C.
What am I?
The Food Quiz has is brought to you by Culinary Specialty Produce, a specialty produce broker that scours the world for the very best in specialty produce. Contact them at 908-789-4700 or by sending an email to info@culinaryproduce.com.
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