the
innovative LEDGER
An e-Newsletter from The Innovative Edge™ Inc.
Vol.
8, No. 6 - June 2008
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Sunny Side Up in a Bad Economy
By Jeff Govendo
One
might assume that the only companies that could possibly be doing
well in this economic downturn are those in the oil industry, or perhaps
alternative energies.
And,
with gas at $4+ per gallon, I would guess public transportation systems
are seeing a spike in business. Also, companies that make walking
shoes.
I
suppose accounting and law firms specializing in bankruptcy might
be doing nicely.
Yes,
there are some companies who are no doubt succeeding against the grain.
But
there’s no particular reason to expect the kind of growth we’ve
seen from a company called Cal-Maine Foods. They produce eggs.
More eggs than anyone else in America, in fact. (Although strangely
enough, while they sell in California, they have no presence whatsoever
in Maine.)
In
the quarter just ended, Cal-Maine Foods reported a 229% gain in net
profits, on sales that rose 59%. Annual revenues are expected to rise
as much as 50%.
Why
eggs? Is it a known fact that as our economic worries grow, we turn
to eggs? Do Americans seek solace from the recession in a mushroom
omelet?
Perhaps
some do. But Cal-Maine’s success is not attributable to Americans
eating more eggs. In fact, the company sold about as many nationwide
as it did the year before. Rather, what Cal-Maine has done with
great success is re-invent the age-old breakfast staple, particularly
in response to concerns of Americans.
For
example, Americans are more aware of their cholesterol intake than
ever (with eggs long having been identified as a major contributor
to high readings). So Cal-Maine has become the leading producer of
reduced cholesterol eggs. Many folks have also become far more aware
of what goes into our foods (and therefore, us), so Cal-Maine is now
the leader in sales of organic eggs. They also have popularized eggs
laid by hens on a vegetarian diet, as well as cage-free eggs. If there’s
a specialty egg to be laid, Cal-Maine has it. Fully 15% of the
nearly 700 million dozen eggs Cal-Maine sold last year were premium-priced
products, commanding up to $6 per dozen.
There
is a natural tendency to associate innovation with high technology
and gadgetry. Talk about it and people immediately begin thinking
iPhone, hi-def TV, Toyota Prius, Web 2.0 and the like. Few think of
the mundane, everyday items we live with and take for granted. Like
eggs. Yet it may be in these where the greatest opportunities for
re-invention, re-branding and re-positioning of products lie, perhaps
because so few think of it, or expect it.
What
is your company’s product or service? How long has it been around,
doing essentially the same thing, with little if any consideration
of what can be done differently? When is the last time you gave
thought to possible new markets, new applications for existing capabilities,
or new ways of marketing to the buying public?
It
doesn’t require an eye-popping new toy or technology to capture
the imagination of your customers, even in challenging economic times.
One look at what Cal-Maine has done with the egg should be plenty
proof of that.
Innovation
has really brought home the bacon for them.
