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Tesco, Disney and Dunnhumby

Jim Prevor’s Perishable Pundit, October 24, 2007

It was over a year ago that Tesco signed a deal with the Walt Disney Company to license Disney Characters for use on fresh fruit. Now, without reference to that deal, the headline is that Tesco and Disney Partner on Branded Foods:

Tesco, Britain’s biggest retail supermarket, and Disney are merging to launch and increase production of a range of co-branded food products.

The two are set to start with the production of fresh fruits and later expand to include a variety of products ranging from yogurt to breakfast cereals, milk and bakery goods.

”Production of the first items, the fruits and fruit products, is set to go on sale early next month,” said Tesco’s director of chilled foods, Kari Daniels. He added that Tesco is determined to help its customers make healthier choices for their family and that the company’s relationship with Disney will offer parents an easy way to make healthier eating fun.

”The merger between Tesco and Disney has marked an important milestone for Disney’s growing UK food business, and Disney consumer products is committed to giving parents food choices they can approve of while at the same time exciting their kids,” said Dan Dossa, director of Disney consumer products, food, health and beauty UK.

The use of the word ‘merger’ must be a British usage because this is clearly not a merger in the legal sense. The announcement sounds like a program similar to what Disney has with Kroger in the U.S., an independent Disney tie-in that pre-exists the Imagination Farms project.

All of this is interesting because Dunnhumby, a consumer data consultancy, majority owned by Tesco, works with both Tesco — where it was instrumental in the development of the Tesco’s Clubcard, a loyalty card that many perceive as instrumental in Tesco’s success in the United Kingdom — and with Kroger.

Forty percent of American households have a Kroger banner loyalty card. The percentage is much higher in areas where Kroger has stores. And Kroger CEO Dave Dillon sings Dunnhumby’s praises:

In a conference call with analysts in September 2005, Kroger Chairman and CEO David Dillon said, “dunnhumby has helped me reset my understanding of what the customer is after, and it helps replace intuition with actual data and actual facts. And it’s those facts that are driving our decision-making.”

He added that “our commitment is to make sure that every decision we make positively influences the way our customers feel about Kroger. This emphasis on placing the ’customer first’ generated increased customer traffic and higher average transaction size.”

One suspects that someone at Dunnhumby is partial to a certain mouse named Mickey or, more accurately, the research says that a lot of consumers like the mouse.

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