This Week in Food and Restaurants
by Aristotle Munarriz (TMF Edible)

Miami, FL (June 6, 1997) -- ``I will never eat oatmeal again!'' Those were the words shouted by Wendy Kaufman as she lead a caravan of Snapple trucks down New York City's Fifth Avenue yesterday. With the sale of the troubled beverage line to TRIARC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TRY)") else Response.Write("(NYSE: TRY)") end if %> finalized last week, QUAKER OATS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OAT)") else Response.Write("(NYSE: OAT)") end if %> had figured it had put the liquid mess behind it.

Conservative, though not quite as clean as the stately killjoy on their Quaker Oatmeal box, the company had taken the cutting edge company and squeezed it of its Generation X roots. Gone were controversial spokesmen Howard Stern and Rush Limbaugh. Also bid adios was Wendy, their fictional ad receptionist with quirky responses to customer requests.

While Rush and Howard are on hold, Wendy is back and the abridged parade in New York City was a clear sign that Triarc is out to regain the grass roots marketing which Quaker Oats ferociously mowed down as annual sales dipped from $720 million to $550 million under their watch. The cheery actress will also star in the first televised spot, this time to introduce the new Snapple flavor, Orange Tropic.

To Quaker's credit the bum $1.7 billion purchase did not fail because of their Puritan ways. The entire new age beverage sector was spinning down as patrons tired of the fruit flavors, an unusual phenomenon that had not occured in the fizzier carbonated niche. New entrants have not fared any better.

Their conservative marketing approach was also mandated more by necessity than choice. By associating their newly-bought beverage line with cutting-edge personalities they were also easy targets for backlash. When the Mexican community in Texas was outraged by Stern's take on the death of Tejano-star Selena they knew exactly what to do. They announced they would boycott all Quaker products, including their more successful ventures in Gatorade and Cap'n Crunch unless they dropped off as a sponsor to the shock jock's show.

Triarc can afford the controversy. Their other beverage lines, RC Cola, Diet Rite, Nehi and Snapple peer Mistic, are all underdogs. Their fast-food Arby's chain is a feisty player as well. In short, their armour is better-suited for a hip brand and it is apparent that their marketing wheels are loving every minute of their apparently bargain priced buy of Snapple for $300 million.

So, while Quaker's stock has been lingering, Triarc has soared in the recent months and was featured yesterday as Motley Fool's Daily Double. If Wendy remains for more spots or if Howard will again sample his former drinkable fave remains to be seen but apparently investors know who got the better deal. Triarc de Triumph.

THE EDIBLE EIGHT

If May was a giant step for E8 then June has been a baby step back for E8-kind. Of course, we are just four days into the new month. Let's give the month some time to grow some teeth before we chew it out. Actually, while the Olympics were last year all the benchmarks looked like candidates for synchronized swimming. They are all down between 0.6% to 1.1% for the month-to-date. The Edible Eight? They're the ones in the Speedos sporting a 0.7% dip. Not a pretty picture but still taking the gold with a 38% gain since it's debut last January. While the S&P 500 is closing in, hoping to swap their silver for some Au the amazing thing is that Investors Business Daily index of more than 130 restaurant stocks is actually showing a loss over the same period. So, let us soil our diapers this month, we're doing well among relatives.

1997 Returns To Date:

The Edible Eight      +3.4%
NASDAQ                +7.7%
S&P 500              +13.9%
Fidelity Sel:Food     +3.6%

The June Edible Eight
June to June 5, 1997
Rainforest Cafe <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %>          +3%
Lone Star Steakhouse <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STAR)") else Response.Write("(Nasdaq: STAR)") end if %>     -1%
Rock Bottom Rest. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BREW)") else Response.Write("(Nasdaq: BREW)") end if %>        -2%
Bertucci's <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BERT)") else Response.Write("(Nasdaq: BERT)") end if %>               +1%
Quality Dining <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QDIN)") else Response.Write("(Nasdaq: QDIN)") end if %>           -5%
Coca Cola <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> ***short***        +3%
Garden Fresh <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LTUS)") else Response.Write("(Nasdaq: LTUS)") end if %>             -1%
Grist Mill <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GRST)") else Response.Write("(Nasdaq: GRST)") end if %>               -2%

Until next week, Digest Foolishly,
MF Edible

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