Jul 12, 2019

Axios AM

😎 Happy Friday! Today's Smart Brevity count: 1,191 words ... 4½ minutes.

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1 big thing: Iconic brands lose their luster

Illustration: Aïda Amer/Axios

From Oscar Mayer and Campbell's to Clairol and CoverGirl, some of America's most famous supermarket and drug store brands are losing market share as consumers' tastes and shopping habits change, Axios' Courtenay Brown writes.

  • Why it matters: The challenges facing well-loved brands reflect shifts that aren't likely to swing back in their favor.

The state of play: Legacy brands are concentrated within a handful of huge corporations that are losing money on various business lines as their products fade in relevance and popularity.

  • Kraft Heinz said this year that the value of its Oscar Mayer and Kraft brands — with products like Oscar Mayer hot dogs, Jell-O and Kraft Mac & Cheese — was $15 billion less than it had previously stated.
  • Sales of Campbell's soups have fallen in eight of the past 10 years, per the Wall Street Journal.

These companies' "standard prescriptions for defending" their brands "no longer seem to be yielding results," Carol Phillips, founder of the Brand Amplitude consulting firm, which counted Campbell's as a client, tells Axios.

  • "The tough thing about these products is they are really hard to improve on," she says.
  • "About the only thing you can do to it is change the package."

What's happening: Consumers are piling into nouveau and generic brands, like Kylie Jenner's Kylie Cosmetics and Brandless — some of which aren't even sold in physical stores.

  • Newer brands captured 31% of revenue share growth within the last four years — an increase from 27% in prior years, according to a Bain & Co. report.
  • "The barriers to entry and the cost of launching a new brand have never been lower," the Bain report said.
  • Amazon has launched hundreds of its own brands.

Between the lines: The companies that used to set the trends are now the followers. Desperate to remain relevant, old-line companies — already late — often jump into fads like plant-based foods.

  • These strategies are "a total crapshoot," says Robert Passikoff, founder of the consultancy Brand Keys.
2. Trump's cave on Census stuns allies
President Trump departs his press conference on the Census with Commerce Secretary Wilbur Ross (left) and Attorney General William Barr. Photo: Alex Wong/Getty Images

Top figures in the conservative legal community are stunned and depressed by President Trump's cave in his fight for a citizenship question on the 2020 Census, Axios' Jonathan Swan reports.

  • One GOP strategist called it a "punch in the gut."

A week after insisting that he was "absolutely moving forward," Trump said in the Rose Garden that he instead was directing federal agencies to try to compile the information using existing databases. (AP)

  • Trump said: "There used to be a time when you could proudly declare, 'I am a citizen of the United States.'"
  • Democrats, including Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer, cheered.

Sources say Leonard Leo and other Federalist Society stalwarts were shocked and floored by how weak the decision was.

  • "What was the dance ... all about if this was going to be the end result?" a conservative leader asked.
  • "A total waste of everyone’s time. ... It’s certainly going to give people pause the next time one has to decide how far to stick one’s neck out."

A senior administration official summed up the internal frustration at the opposition to the fight from key Justice Department lawyers:

  • "What's sad is the President has been right on this since Day 1, but he’s being told it's too hard and too long a road legally. Washington lawyers too often bow to the courts and treat them like a higher branch, when this is ripe for a fight, with American people in full support."
3. A recession made in Washington?
Courtesy The Economist

At the end of July, America’s economy will have been growing for 121 months, the longest run since records began in 1854 (165 years), The Economist writes.

The puzzle:

  • "History suggests there will be a recession soon. And plenty of people are gloomy. Bond markets have been sounding the alarm. ... Manufacturing firms are wary; indices of business confidence are tumbling."
  • Yet the stock market "is going gangbusters, rising by 19% so far this year. And in June America’s economy created a whopping 224,000 new jobs, more than twice as many as needed to keep up with the growth of the workforce."

The bottom line: Between President Trump and 2020 Dems, the "greatest threat to America’s long and placid expansion is that a new era of wild policy may be just beginning."

4. Pic du jour
Photo: Matthew Hinton/AP

Terrian Jones feels something moving at her feet as she carries Drew and Chance Furlough to their mother during flooding in New Orleans.

  • Hard test for levees as storm bears down ... This weekend's danger to New Orleans is threefold: storm surges from the sea, rain from the sky and water from the rising river if the levees fail. (AP)
5. ⚡ Breaking

R&B singer R. Kelly was arrested in Chicago after a federal grand jury returned a 13-count indictment that includes charges of child porn and obstruction of justice, per the Chicago Tribune:

  • Kelly, 52, "was arrested in Chicago about 7 p.m. while walking his dog near his residence at the Trump Tower."

P.S. "At least a dozen new victims have come forward to claim they were sexually abused by Jeffrey Epstein," write the Miami Herald's Julie K. Brown and David Smiley.

6. Tech's summer camp
Photo: Drew Angerer/Getty Images

Uber CEO Dara Khosrowshahi rides a bike yesterday at the annual Allen & Co. conference in Sun Valley, Idaho, which brings together some of the world's wealthiest and most powerful executives from media, finance, and tech.

7. Milestone

Seven months after Jim Mattis resigned as defense secretary last December, the U.S. still has no confirmed replacement — with the nation facing potential armed conflict with Iran, AP's Bob Burns writes.

  • Why it matters: That's the longest such stretch in Pentagon history.
  • There is also no confirmed deputy defense secretary, and other senior civilian and military Pentagon positions are in limbo, more than at any recent time.
8. Kamala Harris proposes $1 billion plan to cut rape kit backlogs
Sen. Kamala Harris speaks Saturday at the Essence Festival in New Orleans. Photo: Gerald Herbert/AP

By Alexi McCammond

With Jeffrey Epstein under national scrutiny for allegations of child rape, Sen. Kamala Harris unveiled a $1 billion plan to fully eliminate states' rape kit backlogs if elected president.

  • Why it matters: Hundreds of thousands of untested rape kits are estimated to be sitting around in police stations around the U.S.

The backstory: As California attorney general, Harris implemented a program to clear a backlog of 1,300 untested rape kits around the state.

  • In January, Joe Biden, who wrote the first rape kit backlog law, tweeted: "An untested rape kit means a survivor without justice."

Between the lines: Harris has made justice for women a campaign theme, from the gender pay gap to an abortion plan in the mold of the Voting Rights Act.

9. Green checkmarks as hedge against deepfakes?

By Kaveh Waddell

With a rising danger that deepfake videos will flood the 2020 conversation, experts are developing methods to verify photos and videos at the precise moment they're taken.

  • In the early stages of a quest for a universal indicator of veracity, several startups are working on this nascent technology with insurers, body camera makers, and media companies.
  • Why it matters: These efforts are the leading edge in a massive scramble to stave off a potential landscape where it's impossible to know what's true.

The bottom line: The digital detectives are losing.

  • With billions of photos uploaded to social media every day — and deepfakes ever-easier to make — automated tools are unlikely to catch the majority.
10. 1 fun thing

"Gen Z Is Blowing Open the Market for Men’s Makeup ... Companies target younger males who grew up with less rigid gender boundaries," Bloomberg's Lisa Du reports:

  • "L'Oréal ... and Estée Lauder, as well as smaller brands and startups, are beginning to develop and market color cosmetics aimed specifically at men."

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