Save the Deli

The Dangers of Licensed Branding

A few years ago I was talking with my good friend Jeremy on the drive back from Montreal. We’d just pounded away a meal at Schwartz’s after a ski weekend, and Jeremy, who works in Private Equity, was quizzing me about their business model.

“How do they make money?”

By selling sandwiches, steaks, drinks, and fries.

“What about other locations?”

Nope

“What about merchandise”

Nope

“Just one 80 year old spot with smoked meat?”

Yep

I asked Jerermy what he’d do if he acquired Schwartz’s.

“With a name like that you have a powerful brand recognition. I’d license the name to a bunch of different products; mustards, spices, meats, etc….which you could sell in stores across the country. That’s how you leverage a brand name.”

Perhaps, but as I explained to him, not doing so is what’s kept Schwartz’s special. Because it hasn’t changed, branded, expanded, or licensed, it is regarded by deli lovers (like all us), as a revered institution. We do our part by eating there. Schwartz’s does their part by keeping it on track. Everyone’s happy.

I tell this little tale after reading the news this past week about the meat recall and bacterial infection that’s occurred at Canada’s Maple Leaf Foods. So far, four people are confirmed to have died, and hundreds have been made seriously ill by the listeriosis bacteria, which appeared in a large batch of processed deli meats that Maple Leaf Foods recently sold. Maple Leaf is one of Canada’s largest food and meat processors, and as with meat recalls and infections in the United States (e-coli in burgers or poop in spinach), the scale of their operation allowed the bug to spread far and wide and fast.

Maple Leaf is by no means a Jewish deli company, and has never claimed to be, but a side story in the tale of the recall has been the contamination of a batch of instant Reuben sandwiches, sold in grocery stores under the Shopsy’s deli-fresh brand name.

As Health Canada reported:
The Canadian Food Inspection Agency (CFIA) and Royal Touch Foods are warning the public not to serve or consume the Shopsy’s deli-fresh Classic Reuben sandwich described below because the product may be contaminated with Listeria monocytogenes.

The affected product, Shopsy’s deli-fresh Classic Reuben, is sold in a 180 g package bearing UPC 7 76393 17001 8 and Best Before dates AU 22 and AU 24.

The owners of Shopsy’s have come out to assure the public that the corned beef in their insta-Reuben, made by Maple Leaf, is a completely different product than what’s served in their restaurants.
They come from different sources, are handled differently, and taste different. Small comfort. People will be associating “Shopsy’s” and “recall” for some time. The damage has been done, regardless of spin.

Once upon a time, the Shopsowitz family ran Shopsy’s
, but they soon partnered with Maple Leaf to brand their manufacture and sell their products…to “leverage the brand” as Jeremy would say. Though once considered Toronto’s premier delicatessen, Shopsy’s is now the prime example of the pitfalls of licensed branding. Over the years, the Shopsowitz family has been pushed out by a succession of owners who have included the soap conglomerate Unilever, a burger chain, hedge funds, and private equity investors. It is now owned by Gavin Quinn, who operates several Irish pubs in Toronto. With each sale, branding, and change, Shopsy’s became less of a Jewish deli and more of a general restaurant. With each outsourced product, they lost some control and a lot of trust from their customers. No one who seriously considers themselves a deli eater in Toronto mentions Shopsy’s. They’re the equivalent of the Jewish son who drops out of law school and becomes a nude performance artist.

Great delis are built upon relationships of trust. We trust they are selling us food that is well made, and that the owner has control over. We trust they aren’t getting too greedy and sacrificing quality for profit. This trust is the core of the deli/customer relationship. Once it is broken, repairing it is close to impossible. Deli eaters seldom forgive and rarely forget.

So while the meat served in Shopsy’s restaurants may have nothing to do with the outbreak, it is the Shopsy’s name that inevitably appears in headlines and warnings. Their reputation is damaged, the brand sullied, and the public’s trust is broken, all because they leveraged and licensed and sold out way beyond their control. Despite assurances, the Shopsy’s name and logo adorns packages of potentially deadly meat. Imagine what would happen if Schwartz’s had branded their name…perish the thought.

5 Responses to “The Dangers of Licensed Branding”

  1. Marc-A. Comtois Says:

    …..perish the thought, all right.
    I’m with you!
    Great article.
    Thank you.
    Not even Jewish!!

  2. Christopher Farber Says:

    From connoisseur of all things salted, brined and cured to purveyor of righteousness in the trust and bond of the local businesses/customer relationship, let me be the first to applaud this blog entry (“blentry”?) for its honesty. It is refreshing to read a blog that is uncompromising in its defense of quality and consistency, rather than peddling hype and hysteria.

    I will, however, note that I personally dropped out of law school to pursue the natural arts, and have had nothing but support from every Jewish member of my family and social circle.

  3. VD Twyman Says:

    Hi-
    I remember the “Shopsy’s” brand from years ago when I lived in and around Toronto. It was our favorite hotdog. So now years later to remember the good ol’ days my dachshund has been named “Shopsy” – a weiner dog named after a weienr company….:-) Only wish I could find a little bandana with the “Shopsy’s” name on it so he could wear it. Everyone loves the story of how he got his name….and I love my picture with me standing beside the “Shopsy’s” vendors cart downtown Toronto by the water front a few years ago.
    If you can help me get a “Shopsy’s” logo bandana for my puppy I would greatly appreciate it!

  4. Business Accelerators Says:

    Such a useful and insightful blog?wow !!!!

  5. Toronto Law Says:

    A fantastic Lawyer should dedicate their company in providing professional legal services to individuals and businesses of all sizes too in many of areas. Ensuring the firm covers a wide range of cases involving all amounts of complexity is key to legal success.

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