Daily Buzz

By Karlene Lukovitz

Kraft Foods expects to realize annual pre-tax cost savings of at least $675 million by the end of 2012, some of which will be used to further increase advertising and consumer spending as a percentage of revenue, chairman/CEO Irene Rosenfeld reported during the company’s Q4/year-end fiscal 2009 earnings call on Tuesday.
The global food giant increased advertising and consumer spending to 7.2% of net revenues in 2009, versus 6.7% in 2008, she pointed out. The increased advertising support for key brands, including the Philadelphia Cream Cheese “Spread a Little Love” and Miracle Whip “We Will Not Tone It Down” television campaigns, have been “extremely well received” and effective at building the brands’ franchises, Rosenfeld said.
In addition, significant investments in improving the quality/taste of Kraft’s products since 2007 have enabled “improved alignment of price levels,” as consumers now prefer about two-thirds of Kraft’s products over the competition, versus the 44% that were preferred in 2006, she said.

By Wayne Friedman

The Vancouver Winter Olympics on NBC continues to post big results among U.S. viewers on Monday. On the heels of some 28.6 million average viewers on the weekend — 25% more than the last Winter Olympics in Torino, Italy — Monday’s coverage continued its big numbers, posting a Nielsen preliminary 25.5 million viewer average and 7.2 rating/18 share among 18-49 viewers.
The 28.6 million average viewers for the opening weekend of the Vancouver Games are the most for a non-U.S. Winter Olympics since the 1994 Lillehammer Games, which landed at 39.9 million.
On the digital front, NBC has already seen rocketing results from NBC’s Olympics Web site, NBCOlympics.com. Over the weekend, it averaged 4.2 million unique users — 250% higher than the opening weekend in Torino in 2006, which was at 1.02 million.

By Karlene Lukovitz

Fresh off announcing an unusually strong Q4 and full-year 2009 (particularly by current restaurant industry standards), Chipotle Mexican Grill is looking to build on the momentum with a new marketing campaign to launch in Q2, a new rewards program and new packaging — not to mention expansion into Europe.
For 2009 overall, the fast-casual chain reported revenue up 14% (to $1.52 billion), net income up 62% (to $126.8 million) and diluted EPS up 67% (to $3.95). The sales gain reflected both revenue from 121 new stores opened during ‘09 and comparable-store sales growth of 2.2% (including a 2% gain in Q4). Like other chains, Chipotle saw some traffic fall-off, but comp-store sales grew as a result of menu price increases instituted in 2008.
The price increases, combined with labor efficiencies and decreased marketing/promotional expenses, resulted in restaurant-level operating margin growth of nearly 25%.
Based on the ‘09 results and Chipotle management’s indicators about current-year plans, the marketing expenditures conservatism seems to reflect strategic emphasis on ensuring bang for the buck via high-exposure, relatively low-cost channels.

By Tripp Mickle

The U.S. Olympic Committee is expected to announce a sponsorship with worldwide energy company BP, boosting the organization’s roster of sponsors as Team USA steps into the spotlight of the Vancouver Olympics.
Terms of the agreement were not available, but sources said it was a multiyear agreement through the 2012 London Games that will deliver low to mid-seven figures in annual revenue to the USOC.
It was unclear whether BP would be the USOC’s exclusive petroleum partner or have a broader definition within the energy category. Worldwide Olympic partner General Electric, the International Olympic Committee’s exclusive provider of energy products, controls a portion of the energy category.

By Terry Lefton & John Ourand

The AVP is close to finalizing a deal with ESPN, ending an association with NBC that dates to 1990.
As part of the time-buy agreement, ABC would carry four events, while ESPN2 will carry the rest of the AVP’s schedule, which has yet to be released.

By Jon Show

American Express has signed a three-year renewal of its sponsorship with the U.S. Golf Association that provides access to the U.S. Open.

By Don Muret

The Charlotte Bobcats have signed a three-year sponsorship with US Airways. It’s the NBA club’s first true partnership in the airline category.
The team wouldn’t comment on the value of the deal, but an industry source valued it at six figures annually.