Dean & DeLuca, Millennials, And Why Smaller Brands Will Succeed In A Global Market

For a moment, I completely forgot where I was. Where I actually was, at that particular moment, was starting out on my morning run in Tokyo while on a recent business trip. Where, just for an instant, I thought I was, was on 85th Street on the Upper East Side of Manhattan. The reason for my momentary mistake was the Dean & DeLuca gourmet food store on the Tokyo street corner near my hotel. From the outside it looked exactly like the one in my New York City neighborhood. From the inside, which I checked out while getting my habitual after-run cup of coffee, it also looked exactly the same (but with a few more Japanese businessmen).

The motivation for this personal anecdote is not to receive accolades for keeping up on my fitness routine after traveling 13 hours on an airplane. It’s to pass along some thoughts on why I believe smaller, or niche, brands will be able to take on a global market and succeed. I was, after all, in Tokyo on branding business, so the topic was on my mind.

It’s well known that big brands have been going global for decades, including big food brands such as McDonald’s, Burger King, KFC, and Starbucks. When a country reaches a certain level of economic development, when it has the class structure big enough to support it, you’ll most likely see the iconic logos of these establishments dotting the cityscapes. (Or, as author and columnist Thomas Friedman said, somewhat tongue-in-cheek, a few years back, “No two countries that both have a McDonald’s have ever fought a war with each other.”)

Dean & DeLuca opened its first international location in Tokyo in 2003.

This first wave of brand globalization now appears to be giving way to another wave of globalization. And my sense is that this new one is being driven by what demographers refer to as millennials, those born between about 1980 and 2000. It’s a group that has grown up during a time of rapid change, giving them a set of priorities and expectations sharply different from those of previous generations. Among these priorities is a desire to experience brands that are authentic, that offer hand-crafted or artisanal goods, specifically those with an appreciation for how things are made, for who makes them, and for health and wellness. This is a generation which also considers agility, open-mindedness, and the ability for a brand to evolve and change as conditions change, of equal importance. So, too, it’s the first generation for whom technology is not something they’ve had to learn to adapt to, but have grown up with. It plays an integral role in how they shop, compare products and prices and, critically, get reviews from peers—and a huge role in how marketing happens.

The dining space of the Grand Central Oyster Bar in Tokyo’s Shinagawa Station mimics that of the original New York location.

My opinion is that it is as the result of these “millennial” factors that smaller, niche brands will have the chance to play in the global market and succeed. This younger generation (and the older generations they influence) doesn’t want the mass-produced, less-than-healthy fare of fast food. Nor do they find any great interest in posting a picture of a hamburger on Instagram. Rather, they want the authentic New York flavors offered by a Dean & DeLuca, a Sarabeth’sbakery, or a Grand Central Oyster Bar, all smaller brand names which can now be found in many of the international locales once the stronghold of only big companies. Millennials and their ilk don’t want to drink and share stories of global brand beers, but of microbrews and the good times had at local breweries.  The bottom line is that big brands are falling out of favor. And, it’s genuinely real flavor and social media that have leveled the playing field.

Sarabeth’s, founded in New York, now serves breakfasts in Tokyo and Osaka.

Just for illustration purposes, for those of you who are not familiar with Dean & DeLuca, it became a gourmet landmark in New York City in the mid-1980s, opening its first store in SoHo, an area of New York populated by those with both the taste and the wallet for the finest fare the world had to offer. The interior of the store was fashioned to resemble the food section of Europe’s luxe food establishments, fitted with white tile walls, Carrara marble floors, steel shelving, and exposed white columns. Although the architectural details signaled a delicious retail experience, it continues to be the labels on the food items themselves that have become among Dean & DeLuca’s most powerful branding signals. More specifically, the typeface on the labels. Jars and packages, truffles to jelly beans, caviar to coriander, all bear a simple white label with the name Dean & DeLuca handwritten (albeit, now done digitally) in black Magic Marker. This minimalist design is meant to convey that nothing is as important as the food inside. When Dean & DeLuca set out to expand to other markets, it was very careful to gain a clear understanding of what made for its retail alchemy, and to reproduce whatever this was to every single other location.

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Now, of course, I will say that the KFCs, the McDonald’s, and Starbucks of the world all do a pretty good job of transporting their architecture and their menus to far-flung locations. What they don’t do, what they can’t do, is offer experiences that make for memories that friends want to share with friends on the ever-growing number of social media sites. It’s not Super Bowl ads these consumers “like,” nor is it the traditional corporate brands that define them. The millennial generation is differentiating itself by using brands that are differentiated by authenticity, and they are creating their own scale by way of technology. This next tier of brands has the agility and the ability to go global without massive ad budgets and without mass production. Next time you’re in Tokyo, or Dubai, or Singapore, or Kuwait, stop in at a Dean & DeLuca’s. Just as I did, for a second, you may forget exactly where you are.