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    Published on: February 2, 2005

    The Denver Post reports that a group of American cattlemen have filed a suit that would stop “the U.S. Department of Agriculture from allowing live cattle and expanded beef imports from Canada until the merits of its case challenging the plan because of mad-cow disease are considered.”

    The suit is an extension of litigation filed last month by the cattlemen, who object to Canadian beef imports because that nation has had two confirmed cases of mad cow disease in just the last two months.

    USDA maintains that the fact that the mad cow cases have been found speaks to the effectiveness of Canada’s detection procedures.
    KC's View:
    We’re with the cattlemen on this. Not because we think Canada’s procedures are inadequate, but because we think that there are too many good questions that remain unanswered. If mistakes are made, it could devastate beef sales in this country…and it could take years to recover.

    Published on: February 2, 2005

    MSNBC reports that a Texas state senator is introducing a law there requiring schools to weigh each student, compute the student’s body mass index, and then include that information on the child’s report card.

    The law would be similar to one enacted in Arkansas, except that in that state, the weight information is sent home in a separate report, not included with grades.

    And, as reported here on MNB late last week, the New York State Legislature is beginning the consideration of a bill that would require school report cards to include how much kids weigh, as well as where they rank on the weight scale compared to other kids their age.

    There is some resistance among Texas residents, some of whom feel that such a move will create more of the kind of pressure that leads to anorexia or bulimia in children.
    KC's View:
    It is worth noting that these kinds of initiatives are taking place in both blue states and red states…cutting across some of the kinds of demographic divides that often separate them.

    Published on: February 2, 2005

    The New York Times reports on a new campaign being launched by a group of bread-oriented manufacturers in order to fight back against the low-carb movement.

    The group, known as the Grain Foods Association, consists of 90 companies that include ConAgra, Flowers Industries, General Mills, Interstate Bakeries and Sara Lee.

    Some of the ads promote high-fiber diets and the folic acid found in enriched grain foods, but others are more general and focus on grains and carbohydrates in a more generic sense.
    KC's View:
    The NYT correctly notes that not all breads are created equal – and that while whole grains are good for you, processed grains are certainly less beneficial.

    While we understand that a grain association has to treat all its members equally, it may want to be careful about undermining its credibility with somewhat faulty science.

    Published on: February 2, 2005


    • The Associated Press reports that if its $55 billion acquisition of the Gillette Co. is to be successful, Procter & Gamble probably will have to sell off some of that company’s brands because of likely conflicts that will raise concerns among antitrust regulators.

      The categories that probably will come under scrutiny would be deodorants, toothbrushes and dental floss.


    • The Cincinnati Enquirer reports that when it acquires Gillette, Procter & Gamble will find itself with a new marketing target: men.

      P&G CEO A.G. Lafley told employees in a memo that Gillette’s understanding of the male market was one of the things that was most interesting to Procter. "Their deep knowledge of the men's grooming category and expertise in marketing to men broadens our capabilities," Lafley wrote.

    KC's View:

    Published on: February 2, 2005


    • The International Herald Tribune looks at how Wal-Mart’s Asda Group in the UK offers its female employees five days of “fertility leave” so they can undergo in vitro fertilization. Men whose wives are undergoing in vitro fertilization can get one day’s leave.

      This is part of what is seen as progressive labor policies at Asda, where, the paper reports, “there is maternity and paternity leave, of course, but also grandparents' leave, adoption leave, religious festival leave and Benidorm leave - named for the Spanish beach resort and offered to employees over age 50 who want to spend the winter months in a warmer climate.

      “There is also the possibility of a ‘career break’ of between six months and two years for employees who have been with ASDA for at least three years. The leave is unpaid in all of these cases, but employees know that their jobs are waiting for them when they return - and their pension and seniority stay intact.”

    KC's View:

    Published on: February 2, 2005

    Shareholders of the Adolph Coors Company have overwhelmingly approved a merger with Molson Inc. of Canada. Molson’s shareholders approved the deal last week.

    The $3.4 billion deal should be finalized next week, and the new Molson Coors Brewing Company will rank fifth globally in both revenue and barrels sold.
    KC's View:

    Published on: February 2, 2005

    Industry issues, initiatives and challenges can look vastly different, depending on your perspective. This year, at Western Michigan University’s annual Food Marketing Conference, one of the sessions will endeavor to engage both industry leaders and university students in an examination of the critical challenges facing the business – in essence, talking about the issues and problems that most people don’t want to talk about. The goal will be to bridge the generational divide, stimulate fresh thinking, and expose each side’s preconceptions and misconceptions.

    Among the industry leaders who have already agreed to appear – Michael Sansolo, senior v.p. at the Food Marketing Institute (FMI). And moderating the session – leading the participants through the minefield of industry issues – will be Kevin Coupe, “Content Guy” at MorningNewsBeat.com

    But here’s where you come in: We want to know what issues you think ought to be discussed, what usually unmentionable topics not only ought to be mentioned, but examined…even at the risk of political incorrectness.

    Let us know via email: kc@morningnewsbeat.com .

    For more information about this session and the WMU Food Marketing Conference, which is celebrating its 40th anniversary this year, go to:

    http://www.hcob.wmich.edu/fmk/
    KC's View:

    Published on: February 2, 2005


    • Published reports say that Costco grew its online sales by 70 percent in 2004, as they reached $376.6 million, compared to $226.2 million in 2003.

      Costco offers just 4,000 SKUs for sale online, and reportedly uses an aggressive e-mail marketing program to reach a list of five million email addresses.

    KC's View:

    Published on: February 2, 2005


    • Rite Aid Corp. reported that total January sales fell one percent to $1.26 billion from $1.28 billion a year earlier. Same-store sales were off 0.6 percent.

      Total year-to-date drugstore sales rose 1.4 percent to $15.11 billion from $14.91 billion, with same-store sales up 1.7 percent.


    • Drugstore.com reported a 47% year-over-year increase in net sales for the full year, to $360.1 million, and fourth quarter 2004 net sales of $103.6 million. The company’s net loss for the fourth quarter was $5.4 million and $47.7 million for the year.

    KC's View:

    Published on: February 2, 2005

    By Kevin Coupe

    In addition to writing MorningNewsBeat each day, Content Guy Kevin Coupe also contributes regular columns to a wide number of publications, including Chain Store Age. As a regular MorningNewsBeat feature, the folks at Chain Store Age have graciously agreed to let us reprint some of these columns.


    In a food industry that seems defined by value, is there a role for values?

    I would argue that there is. Especially because most food retailers need to define their positions in the marketplace using something other than low prices. After all, you-know-who dominates the low-price position, making it tough for anyone else to use that to competitive advantage.

    (Not that it matters. If I had a dollar for every retailer who told me that he planned to compete with Wal-Mart on price, it would be just a few more than the number of dollars I’d have for the number of retailers who have told me that if they can just hang on until the government puts Wal-Mart out of business, they’ll be okay. In other words, they’re smoking something.)

    I think that a focus on values is something that is sorely missing from the ongoing evolution of American retailing, and especially the food business. Perhaps it is because “values” is a tough word to define, or implies areas of discussion that Americans are vaguely uncomfortable with. Maybe they see “values” as something that should be taught in church or school, but really has no place in the conduct of commerce,

    But they’re wrong.

    A store that has a goal or mission statement has, in essence, a set of values in place to which it can aspire. Of course, most employees in food stores (and many senior executives, for that matter) would have a hard time identifying or reciting their companies’ mission statements, which means that they are not values at all, but rather empty strategies unfulfilled.

    Values are things taken to heart and mind, embraced as central to the store’s operations. They require focus and constant attention. Often, they mean that a store has to be far more targeted in its definition of the customer…because values can mean a relentless concentration on one facet or another of the store’s operation. For example, if I were operating a store in the current environment, I might make a core value helping parents feed their kids more intelligently, and creating a kid-friendly environment that embraces and entices children. I might say that because children are the customers of the future, and have an enormous role in dictating their parents’ purchases, my store needs to make connecting to these little people a core value.

    Now, if I took that approach, it might mean that catering to senior citizens might not be a core value. But that’s okay, because one can assume that if I made this a core value, it is because there are a lot of kids in the neighborhood, as opposed to seniors. And by being the kid-friendly store in the market, I’d hope to become a compelling alternative to supercenters and chain stores eating away at my business.

    This is just one hypothetical example. Emphasis on the word “hypothetical.” In real life, I’d defy you to identify more than a few stores in the US that are using “values” as a key selling and strategic proposition. (If you know of one, let me know. I’d love to hear about it.)

    But there is some stirring in this area. I recently had the opportunity to moderate a two-day conference sponsored by CIES: The Food Business Forum in Dublin, Ireland, on the subject of values – and it was a remarkably comprehensive examination of the issues that can work for retailers in this area.

    CIES and many of its global members believe, quite rightly, that food retailers don’t get enough credit in communities for the both the value and values they bring. And CIES has engaged researchers from Oxford University’s Templeton College to conduct an audit quantifying some of these values, planning to create a database that retailers can use as a resource. (I’ll have more on this in coming months.)

    The opportunities for retailers to define values-oriented strategies are numerous. It can have to do with how a retailer treats its employees. It can have to do with environmental policies practiced by an organization (not just lip service). It can mean making sustainable development a guiding principle. It can mean being both informative and responsible in dealing with health and nutrition issues. It can mean being assiduous in being fair with trading partners. And, it can mean looking at consumer activists not as foes, but as customers with legitimate concerns and points of view.

    Some of you will read these opportunities and think of them as being soft-sided initiatives that have little to do with selling more merchandise and making more money. But I think you’d be wrong about that…and there are plenty of companies that also would disagree with you.

    Among them: France’s Carrefour and Casino. Ireland’s Superquinn. Switzerland’s Migros. And manufacturers and service providers that include ACNielsen, Kraft, Nestle, and PepsiCo.

    Here’s the kicker, and the thing that I find amazing. There were no US retailers in attendance, apparently because US retailers don’t see “values” as a legitimate focus of discussion. Which I think is spectacularly short-sighted, if peculiarly American.

    Of course, US retailers were represented in some sense…by European retailers that own US chains. Delhaize – which owns Hannaford, Food Lion and Kash n’ Karry – was there. As was Marks & Spencer, which owns Kings in New Jersey. And Ahold, which owns a number of chains on the US east coast.

    And another company was there – one often lambasted as being so completely focused on value that there is no room in its portfolio for any consideration of values: Wal-Mart.

    In fact, there were two Wal-Mart representatives there. Ron Virta, who is vice president of international operations, and David Smith, who is “people director” for Wal-Mart’s Asda Group in the UK, and who gave an excellent presentation about how and why Asda has been named the top employer in the UK.

    It is a hard-nosed business reality that differentiation is a critical component of any retailing venture that wants to have any chance to succeed. And it seems clear that focusing on the value of values is one way to achieve a measure of compelling differentiation.

    If it is done right, with commitment and heart.


    Reprinted with permission Chain Store Age (6/2004). Copyright Lebhar-Friedman Inc., 425 Park Ave., NY, NY 10022.

    For further information about Chain Store Age, go to:

    http://www.chainstoreage.com
    KC's View:

    Published on: February 2, 2005

    …will return.
    KC's View: