The Classic Brands You Love Are In Trouble
Some brands are more than just logos, mascots, catchphrases, and packaging. They're part of the American identity. But no matter how sentimental you might be, the simple fact remains that the free market has a short memory.
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When tastes change, even the most recognizable sellers will have to change with them or risk extinction.
Last updated: July 9, 2021
Budweiser
Adolphus Busch, a German immigrant who arrived in America in 1857, went to work at a brewing supply company. Busch ended up marrying the daughter of his client Eberhard Anheuser and joined his company after the Civil War. In 1880, Busch took over the company, one year after it was renamed Anheuser-Busch.
Busch would go on to revolutionize the beer industry, incorporating refrigerated rail cars and pasteurization to start shipping his beer across the country and turning it into a national industry.
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Budweiser: What’s Happening?
As early as 2017, CNN was reporting that "America is falling out of love with Budweiser." The King of Beers, it seemed, was losing subjects to craft beers, microbrews, wine, and spirits. One year later in 2018, Bud and Bud Light were continuing to hemorrhage market share and brand loyalists as parent company Anheuser-Busch InBev reported that U.S. revenue had dropped by 3.1% in a single quarter.
A year later in 2019, Anheuser-Busch InBev missed its earnings targets yet again, and yet again the culprit was the company's flagship brand. In 2020, alcohol sales soared as people drowned their sorrows while quarantining, but according to Bloomberg, even that was not enough to change Budweiser's fortunes. America was drinking, it just wasn't drinking that. Revenues from Bud, Stella Artois, and Corona -- Anheuser-Busch InBev's three biggest brands -- had fallen by 11%.
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McDonald’s
Ray Kroc was a traveling salesman who had spent most of his life bouncing from job to job when he discovered a burger restaurant in San Bernardino, California. It was called McDonald's. Kroc convinced the brothers who owned the restaurant to franchise it. As of 2020, there were 39,198 McDonald's restaurants worldwide.
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McDonald’s: What’s Happening?
During the second quarter of 2018, McDonald's missed its same-store sales estimates, a key factor in calculating restaurant sales, for the first time in at least two years, according to Reuters. The decline sent its stock shares down as much as 2.3%, but that was just the beginning.
In February 2020, just as the pandemic was poised to change the country's restaurant landscape forever, Forbes reported that "McDonald's declining customer traffic is a death march to the future." Guest counts had been declining for years, and even when same-store sales were up, they were up on higher individual checks -- not increased traffic. By mid-summer of that same year, Fortune was reporting that McDonald's had suffered its worst global sales decline in at least 15 years.
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Coca-Cola
In 1886, Atlanta pharmacist Dr. John S. Pemberton created a flavored syrup to mix with soda water and started selling the concoction for 5 cents a glass. It was his partner, Frank Robinson, who named the beverage and wrote "Coca-Cola" on the labels in the now legendary script. Today, roughly 2 billion people around the world drink Coca-Cola every day.
Coca-Cola: What’s Happening?
After smoking went out of vogue in the United States, the crosshairs landed squarely on sugar as public health enemy No. 1. The biggest villain of all was high fructose corn syrup, which gives Coke and other sodas their magic. In the U.S. during 2017, both Coke and Pepsi brands declined by volume -- a key indicator of product demand -- whereas brands like Aquafina and Poland Springs increased, according to Beverage Digest's annual report.
In 2020, research from Harvard showed that the trend started long before 2017. In fact, consumption of sugary drinks like Coke had been declining steadily from 2003-2016 -- and that trend is now extending into the century's third decade.
Barbie
Ruth Handler watched her daughter, Barbara, playing with paper dolls one day in the 1950s and got an idea. She launched her Barbie doll line in 1959 and co-founded Mattel, one of the biggest toy companies in the world.
Barbie: What’s Happening?
As Barbie became an analog artifact in the digital age, Mattel attempted to update the beloved doll's image for the modern era, expanding the line to include ethnically diverse dolls of different heights and weights. After a steep dropoff in Barbie sales pummeled Mattel quarter after quarter in the mid-2010s, something needed to be done.
Although the new-and-improved Barbie had won back some of her brand's prestige, she proved once again to be a relic of the 20th century when the pandemic hit. In 2020, overall toy and game sales soared by 7.6% as people sought refuge from cabin fever. Family-friendly things like board games did especially well. Barbie, however, was not invited to the revival, and Mattel reported a 14% drop in sales in the first quarter alone.
Fisher-Price
In 1930, Herm Fisher saw the need for a higher quality toy for preschool-aged children and decided to do something about it. He founded Fisher-Price with Irving L. Price and Helen M. Schelle. The company had considerable success in marketing developmental toys for young children.
Fisher-Price: What’s Happening?
Traditional toy brands like Fisher-Price, which has been owned by Mattel since 1993, are on the decline. For the first quarter of 2019, Mattel reported a decline of 8% in gross sales with its Fisher-Price Brand driven "by a decline in Infant/Toddler/Preschool Fisher-Price and Thomas & Friends products," according to a Mattel financial report.
That was just one year. Fisher-Price did $1.55 billion in sales in 2016, $1.37 billion in 2017, $1.19 billion in 2018, $1.31 billion in 2019, and $1.07 billion in 2020.
Kraft Macaroni & Cheese
The Great Depression inspired Kraft to make its classic boxed macaroni and cheese. Kraft introduced the product in 1937, and because it fed four people for just 19 cents, it quickly caught on. The company sold 8 million boxes in a year and never looked back -- Kraft Macaroni & Cheese has become an American dinner staple.
Kraft Macaroni & Cheese: What’s Happening?
Kraft's iconic brand has seen competition from higher-quality, healthier mac and cheese options that have eaten away at its sales -- it lost 2% of the total macaroni and cheese market from 2012 to 2016. Then, in February 2019, Kraft Heinz took another hit when its shares plunged more than 27%. The massive drop followed the write-down of $15.4 billion in assets and a government investigation into the company's finances, according to CBS News.
But the brand fought back, boosting sales by removing artificial dyes from the classic recipe. Then, the pandemic breathed new life into an old classic as the homebound turned back to the simple and satisfying golden goodness of Kraft Mac & Cheese. Sales soared as the virus kept people indoors and on a budget, but there's no telling if Kraft's luck will hold now that the world is reopening.
Hamburger Helper
Hamburger Helper was launched in December 1970 as part of a response to the rising price of beef, giving consumers the chance to stretch a single pound of ground beef into a meal for the whole family. It was a hit, with more than 25% of American families purchasing the product in its first year of existence. As for the iconic "Helping Hand" mascot, that didn't debut until 1977.
Hamburger Helper: What’s Happening?
Hamburger Helper, owned by General Mills, commanded 61% of the dinner mixes market at the start of the 2010s. As of 2016, however, that number had fallen to 40%, a decline of more than 20%. The company even dropped the "Hamburger" from some of its products to reflect the declining popularity of beef. But processed foods in general continue to fall out of fashion and General Mills doesn't see robust growth prospects for this product going forward, but hopes that value-oriented shoppers will continue to buy it.
Chef Boyardee
Chef Ettore "Hector" Boiardi came to America in 1914, and he started a business selling takeout meal kits -- consisting of his popular take on spaghetti -- that would lead to him launching the Chef Boiardi Food Company in 1928. Marketing wizards changed the spelling of his last name to make it phonetic, and it quickly became a standard canned food in America's pantries.
Chef Boyardee: What’s Happening?
Sales are down for Chef Boyardee products, and the company closed its Milton, Pennsylvania, plant. Chef Boyardee's share of shelf-stable, ready-meal sales declined 8% in the 2010s. In honor of the product's 90th anniversary, and to reignite interest in the brand, Chef Boyardee recently arranged a collaboration between Donny Osmond and rapper Lil Yachty to update its classic jingle. The brand also created throwback recipe cans for Beef Ravioli, Lasagna and Beefaroni that include a simplified ingredient list reminiscent of days past.
Like Kraft Mac & Cheese, Chef Boyardee enjoyed a pandemic revival as the homebound and hungry turned to cheap, filling food with far-off expiration dates. Also like Kraft, it's unclear whether the trend will continue.
Tootsie Roll Industries
Leo Hirshfield started selling his hand-wrapped little candies out of his Brooklyn store in February 1897, naming them after his daughter Clara, whose nickname was Tootsie. Hirshfield started delivering them with a horse and carriage, and in 1922 he took the company-- Sweets Company of America -- public. Today, the company produces 64 million Tootsie Rolls a day.
Tootsie Roll Industries: What’s Happening?
Americans are eating much less sugar in an effort to be more health-conscious, which is eating into Tootsie Rolls' sales, and candy sales in general. The company saw stagnant sales become declining sales in 2016 and 2017. In 2019, second-quarter net sales rose slightly to $106 million compared to 2018's second quarter of $105.6 million, however.
Then the pandemic hit and robbed the world of the group gatherings where so many Tootsie Rolls are consumed. In 2020, net sales dropped by 14% and net income fell by 17%.
Sears
Richard W. Sears moved his fledgling watch company to Chicago in 1887, where he joined forces with Alvah C. Roebuck. They launched a mail-order business that grew into a massive department store empire, which remained the largest retailer in America from the end of World War II until Kmart surpassed it in the 1980s. In 2004, the companies merged.
Sears: What’s Happening?
Sears' strategy of closing hundreds of underperforming stores in an effort to leave its better-performing stores in play eventually made a difference. In the second quarter of 2018, the company reported that its same-store sales losses had decreased from the previous quarter -- from 11.9% to 3.9%. Then in October 2018, the company filed for bankruptcy and CEO Eddie Lampert stepped down.
Soon after, the company was facing liquidation. But in February 2019, a judge approved a $5.2 billion sale of the retailer to Lampert. According to Business Insider, the deal kept the company running and about 400 stores open. Going into 2021, Forbes estimated that Sears/Kmart had less than 100 stores between them, and expects that number to be cut in half by 2022.
Red Robin
Red Robin started out in 1940 as a restaurant in Seattle called Sam's Tavern. Sam, the owner, liked to sing the song "When the Red, Red Robin (Comes Bob, Bob, Bobbin' Along)," which is where the new name originated. Things took off in 1979 when regulars Mike and Steve Snyder became the first franchisees. From there, the store grew to more than 175 locations by 1985 and more than 500 by 2015.
Red Robin: What’s Happening?
The burger market has gotten more competitive in recent years, making it pretty difficult for sit-down restaurants like Red Robin to keep attracting customers, especially considering its business model was so closely tied to struggling malls. Even though the company has implemented some cost-cutting measures and has been working on menu innovation, operational efficiency and an improved customer service platform to boost revenues, the future does not look bright for Red Robin. For the second quarter of 2019, the brand reported a 2.3% decline in same-store sales.
The pandemic crushed restaurants like Red Robin, which reported a 47% drop in revenue by summer of 2020 -- and that was supposed to be good news. Soon after, the chain temporarily closed dozens of struggling restaurants and, moving into the second half of 2021, it's unclear if Red Robin will survive.
Wheaties
In 1921, when a health clinician spilled some wheat gruel onto a hot stove and saw it turn into golden wheat flakes, he dubbed them "Washburn's Gold Medal Whole Wheat Flakes." He changed the name to Wheaties, and the brand gained popularity when Lou Gehrig and 46 of the 51 players on the 1939 Major League Baseball All-Star team gave testimonials for the cereal. In the late 1950s, the company signed sponsorship deals with sports legends, who would appear on the box, which explains the slogan "The Breakfast of Champions."
Wheaties: What’s Happening?
People just aren't eating much cereal anymore. As consumers continue to gravitate toward healthier, fresher food, many classic brands are taking a heavy hit. General Mills, Wheaties' parent company, reported that 2017 marked the third straight year of declining sales.
In 2018, the company announced it was planning to cut 625 jobs due to declining overall sales and increased freight costs. It also raised prices on some products, including cereals that are packaged in smaller boxes and with higher per-ounce prices.
Like several other foods on this list, cereal consumption soared during the pandemic -- like Mac & Cheese and Chef Boyardee, cereal is cheap, filling, and long-lasting -- but here, too, it appears to be a virus-specific flash.
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Andrew Lisa contributed to the reporting for this article.
This article originally appeared on GOBankingRates.com: The Classic Brands You Love Are In Trouble
