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    Published on: September 15, 2004

    US Senator Byron Dorgan (D-North Dakota) has called for the creation of a government task force that would oversee the development of radio frequency identification (RFID) technology.

    Saying that government oversight was necessary to both help RFID reach its full potential and protect consumer privacy rights, Dorgan called for quick government action. He also noted that Congress has done little on RFID to this point. “So far in Congress, there has only been two speeches, one hearing and one piece of legislation regarding RFID,” he told a technology trade show this week. “The technology draws almost no interest in U.S. Congress.”
    KC's View:
    At least, until now.

    We can’t imagine that RFID professionals will be overjoyed by the prospect of the government getting involved. After all, the US government’s idea of oversight usually has more to do with using the brakes than the accelerator.

    Published on: September 15, 2004

    A study conducted for the Natural Marketing Institute (NMI) says that more than 38 percent of consumers report that they shop for healthy and natural products at a warehouse or club store, up from 25 percent in 2001. Nearly 17 percent of consumers indicated that they purchase these products over the Internet, up from just over six percent in 2001.

    Additionally, according to NMI, consumers are seeking to integrate health and wellness products in a number of ways. Sixty four percent of consumers stated that they try to maintain the same healthy eating standards when eating away from home, and nearly 43 percent of consumers responded that they would eat more fast food products if they were available in healthier versions.
    KC's View:
    Think of this story as a corollary to yesterday’s story about organic foods being available in more schools around the country. It’s all about greater penetration through greater availability and exposure.

    Published on: September 15, 2004

    The Los Angeles Times reports this morning that Robert Mondavi Corp. has put the company’s landmark winery and its high-end wine brands, including its stake in the Opus One in France and Ornellaia in Tuscany, Italy.

    The company plans to retain its low-end properties, including the Woodbridge brand, that account for more than three-quarters of company revenue.

    According to the LAT, “The winery and its more than 1,500 acres of prime vineyard could be worth upward of $400 million.”

    In a memo to employees, CEO Greg Evans said that the pressures of running a public company led to the decision, and that the high end properties would be better off in the hands of a private company.

    There is some speculation that the Mondavi family might try and regain control of the winery and high-end brands. Just last month, the company announced that the family’s voting control had been reduced from 85 percent to 40 percent.
    KC's View:
    The Mondavi family revolutionized the American wine business, and for that deserves the gratitude of every wine drinker.

    It’s a shame that the pressures of running a public company somehow are inconsistent with having a broad, multi-tiered and sophisticated approach to marketing.

    Published on: September 15, 2004

    It doesn’t look like the prospects are getting any rosier for the French wine industry, which continues to show a decline in popularity both at home and abroad. (In part, ironically, the troubles in the French wine industry can be traced back to the rise in quality of American wine, which was pioneered by the Mondavi winery…which is now on the sales block. Go figure.)

    Numbers released by the French government indicate that domestic consumption of French wine dropped by five percent last year, with the average French citizen drinking half as much wine during the year as he or she did 40 years ago.

    At the same time, fewer than one in six bottles of wine bought by Americans comes from France, compared to one in three a decade ago. US sales of French wine declined more than 10 percent last year alone.

    Experts say that French vintners need to change the way they do business. One important shift would be for the government to simplify labeling regulations so they are more understandable to consumers; another positive change would be to allow modernized irrigation techniques that might allow vineyards to create more consistent products.

    But in some ways, the French wine industry’s future may be linked to global perceptions about the nation as a whole, especially since there remains some antipathy in the US about France when that nation did not support the invasion and occupation of Iraq.
    KC's View:
    It’s amazing to us how much hostility remains towards the French. Yesterday we had an essay about Parisian food stores, and received a few nasty emails about the French.

    We would suggest to the folks sending us these largely unprintable emails that they should take a good look at the Content Guy’s last name to see if they are going to find a sympathetic ear; while we are primarily Irish American, there is a bit of French and Alsatian blood coursing through our veins. We like to think of ourselves as both Gaelic and Gallic…which probably explains why we have so much gall…not to mention our taste for beer and wine.

    C’est la vie!

    Published on: September 15, 2004

    • The Wall Street Journal this morning reports on one of the issues that most irks communities and Wal-Mart competitors – the company’s enormous fleet of empty, unused locations that have been abandoned in favor of newer, better locations.

      “While big retailers can afford to write off or absorb the cost of closed stores and their ongoing leases, communities are often stuck with a different kind of bill,” the WSJ reports. “They complain that the empty buildings are eyesores that can boost crime and vandalism and bring down property values. And where darkened stores anchor strip malls, they can depress sales of remaining retailers.

      “While the stores' owners typically continue to pay property taxes on the vacant properties -- that is, if they remain in business -- the buildings no longer generate jobs or lucrative sales-tax dollars for state and local governments.”

      And compounding the problem is the fact that Wal-Mart often will prevent these locations from being leased to competitors, which in many cases can dramatically reduce the potential pool of lessees. The paper cites as an example a 69,000 square foot former Wal-Mart in La Junta, Colorado, which has been vacant since 2000…and Wal-Mart holds the lease until 2017.

    KC's View:

    Published on: September 15, 2004

    Interesting interview in the San Francisco Chronicle with David Neeleman, the CEO of upstart JetBlue Airways.

    Some management related excerpts:

    • “What you can't buy is the loyalty that comes through our dedicated crewmembers…Our people get profit-sharing checks. I got a report the other day that says that 84 percent of our people participate in our stock purchase program, where they can buy stock at a 15 percent discount…It amounts to 15 percent of pretax profits. Last year, that was almost $31 million that we gave back…It's proportionate to their salary. Last year, it amounted to 17 percent of their salary. Everyone who worked there got another 17 percent.”

    • Regarding possible unionization. “I love American history, and I've studied it. I understand we had a big need for unions in this country. You basically had unscrupulous people who were building companies on the backs of their people without giving them health care and without giving them other benefits. They made them take on hazardous jobs and work long hours.

      “We aren't one of those companies. We don't do that to our people.

      “We don't want a third party who may or may not have our best interests in mind or our crew members' best interests in mind because they may be serving a union of one of our competitors. They are trying to equalize us and take away our competitive advantage.

      “We are just interested in dealing with the people we're paying every day. We know federal law allows them to vote in a union at anytime, but we think we can resist that by talking to our own people and giving them enough upside.”

    • On training. “It starts with selecting the right person. It's really tough to change somebody. It's a people business.

      “We're not putting someone off in a factory and have them sitting there and making widgets all day long. We have a saying at JetBlue that you're either serving a customer or serving someone who is serving a customer.

      “So, everybody has this human contact. We have over 100,000 resumes we receive every year for only 1,600 positions, so we can be very choosy about who we pick to work for the company.

      “When they walk out of training, they make good pay and they are an upside for the company. We want our people to want to come to work.”

    • “We focus a lot on supervisors. We have one supervisor for every 80 people. I can't know 7,000 people. But I tell the supervisors, "You can know 80 people. You can know who they're married to, you can know who their kids are, what their challenges are." They know we will deal with their issues, make them feel like there is a personal touch at the company.

    KC's View:
    Good stuff.

    We love the focus on appropriate compensation and generous profit sharing…the willingness to coach people on an ongoing basis…and the understanding that the people who work for the company are assets, not costs.

    Lessons that we all can learn from.

    Published on: September 15, 2004

    The Army & Air Force Exchange Service (AAFES) announced that it has opened Iraq’s first Subway restaurant – joining three Burger Kings and two Pizza Huts in that nation. AAFES plans to open more than 50 name brand fast food facilities over the course of the next twelve months as part of Operation Iraqi Freedom.
    KC's View:

    Published on: September 15, 2004

    • Fleming Cos. and several of its suppliers have reached a partial settlement with the US Securities and Exchange Commission (SEC) in an investigation of artificially inflated earnings and vendor rebates.

    • Deposed Ahold CEO Cees van der Hoeven reportedly is threatening to sue auditor Pricewaterhouse Coopers over a report suggesting that van der Hoeven’s actions contributed to the multimillion do9llar accounting fraud that has thrown the company into turmoil and resulted in the forced resignations of numerous senior executives, including van der Hoeven.

      The auditor has not yet released the report, which was drafted after it conducted a study in the wake of the revelation of accounting irregularities.

    KC's View:

    Published on: September 15, 2004

    • C&S Wholesale Grocers has named William Copacino, formerly of Accenture, to be the company’s chief administrative officer and Richard Burgess as senior vice president of human resources.

    KC's View:

    Published on: September 15, 2004

    • Kroger Co. reported that it earned $142.4 million in the second quarter, down 25 percent from $190.4 million in earnings posted during the same period a year ago. The company blamed the four-month strike in Southern California for the down performance.

      Sales for the quarter rose 5.1 percent to $13.0 billion; same store sales were up 1.1 percent.

    KC's View:

    Published on: September 15, 2004

    Responding to yesterday’s piece about the Colorado community fighting against Wal-Mart, one MNB user wrote:

    It seems to me that the “right to make a choice” in a free society would be up to the people who choose to shop at a store--not to the ones who decide that, if they don’t want to shop there, no one else should be able to either.

    We don’t entirely agree. If you feel that a Wal-Mart would change the nature of your community, protesting the building of one seems like an entirely legitimate exercise of one’s basic rights.

    And regarding the newest discovery of mad cow disease in Japan, one MNB user wrote:

    What the story about Japan and new found case of Mad Cow fails to mention is that due to US pressures, Japan was/is considering lowering the number of tests they perform for the disease and reducing standards for imported beef.

    Let's do the math. Japan tests EVERY cow before it enters the food chain and they've found 3 cases of Mad Cow this year. I don't have figures in front of me but, I bet the US consumes as much if not more beef than Japan. And how many cows are tested?

    Japan began their program because consumers were concerned about Mad Cow…What has our government done besides taking a ridiculously long time to enact laws that were supposed to have already been followed, place the blame on other countries, and try to bully another nation into to making their food supply less safe?

    What does the US consumer get out the this? Maybe they should act with more alarm as the Japanese have or maybe they should be able to expect more from their government.

    We got a couple of nice emails regarding yesterday’s essay about the Parisian shopping experience.

    MNB user Denise Remark-Lundell wrote:

    Your article read like a story -- engaging me to want to see what was around the next turn-of-phrase. What commanded my attention most was your summary of "shopping as event".

    Here in humble Akron, Ohio, we have a family owned store called The West Point Market. The WPM is the local "foodie" store, offering high-end and gourmet selections. The store carries mostly fresh foods and is comprised primarily of perimeter departments. They offer a small center-of-store selection of boxed or canned foods, but again, mostly high-end. Although I do 95% of my weekly shopping there, each time I enter the store, I anticipate the event nature of my shopping experience. The food is always beautiful and fresh, and the offerings in the Tea Room & Cafe are delicious. I really cannot imagine shopping anywhere else because it couldn't compare to the "event" that is WPM.

    You made us want to visit…maybe we should book a trip to Akron…

    And another MNB user chimed in:

    You took me right to the Champs Elysees this morning. Once again, you have listed many of my favorite foodie places in your article on Paris. The French do know how to promote food, really the love of food, and they want you to share it.

    I had the same experience in Provence that you mentioned in your article...the only difference; most of the food is sold in their outdoor markets. The merchants were eager for you to taste the food, and they savor every bite with about the ultimate 'retail' experience.

    And maybe after we go to Akron, we should go to Provence…

    Actually, if we had to choose three places to travel to tomorrow – places to which we’ve never been – they would be Provence, Tuscany, and Australia, all places renowned for wonderful wine and food and people.

    We appreciate the nice reaction to our ‘on the road” pieces…we’ve got a little Charles Kuralt in us, and we love hitting the road to see new places, eat and drink new things, and meet new people. It is some of our favorite work.
    KC's View: