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    Published on: July 21, 2005

    The Great Atlantic & Pacific Tea Co. has announced that as it sells off its profitable Canadian operations to shore up its troubled US finances, it will bring Eric Claus – currently president of A&P Canada – to the US and president/CEO of the company.

    Christian Haub, the current chairman/CEO, will become executive chairman of the company.

    Brian Piwek, A&P’s President and COO, is scheduled to retire at the end of July.
    KC's View:
    We hope that Claus will be able to spread a little Canadian magic over A&P’s US operations, because they need some help. Very few industry analysts with whom we speak seem to feel that A&P is making the kind of headway it needs to in order to be relevant to the 21st century consumer in some kind of enduring way.

    Published on: July 21, 2005

    The Contra Costa Times reports that men apparently are paying more attention than ever to their looks, buying skin care products to an extent that has not been seen before.

    “Sales of men's skin care products sold in department stores jumped 13 percent last year, more than twice the total growth for the overall and women's skincare markets, according to NPD Group, a marketing information company,” the Times writes. “In 2003, revenues from men's skin care products rose 10 percent while the women's and total market advanced only 6 percent.

    “The growth in the market isn't relegated to the high-end products. Sales of men's skincare products surged 68.6 percent at mass market retailers compared to a 6 percent increase for women's products, according to the research firm ACNielsen. Men's shampoo and conditioner sales rose 17 percent while the market for women and unisex hair products was flat.”

    The shifts are affecting product selection in mainstream stores as well as in upscale shops, as men react to cultural pressure to look younger/fitter/better. And analysts expect that the trend will continue for at least several years, in part because to a great extent the category remains fairly untapped.
    KC's View:
    We were in NYC yesterday, and were walking through Grand Central Terminal – and noted an enormous amount of advertising for L’Oreal’s new line of men’s skin care products. A phenomenal amount of advertising, really, impossible to miss or ignore.

    So this clearly is a big deal.

    We have a little trouble relating to this trend, but on the other hand, maybe a little something to tighten up the sagging skin and maybe get ride of some wrinkles might not be a bad idea.

    Published on: July 21, 2005

    Caribou Coffee Co. announced that it plans an initial public offering that it hopes will help it fund new store openings that will allow it to compete more effectively with industry giant Starbucks.

    In addition to adding stores in the US, Caribou reportedly would like to expand internationally for the first time.

    The company said in a filing with the US Securities and Exchange Commission (SEC) that it plans to open 63 to 73 more coffeehouses in the US this year; the company already has opened 17 in 2005. Next year, it plans to open between 105 and 115 units.

    As of May 29, Caribou Coffee had 322 coffeehouses in 12 states and in Washington, DC.
    KC's View:
    Strikes us as a win-win-win situation. A win for Caribou because it gets to grow. A win for Starbucks because good, strong competition will make them better. And a win for consumers because competition is always good for the consumer.

    Published on: July 21, 2005

    New Zealand’s Sunday Star Times reports that there is a new development in the cork vs. screwtop wars – a new French process in which “natural cork is first ground into a powder then treated with carbon dioxide in a process similar to that used to decaffeinate coffee or extract fragrances from plants to make perfume. The powder is then moulded into a cork stopper which is marketed under the Diam (pronounced dee-am) brand.”

    The process is said to address the cork shortage by using less of it, while offering greater quality certainty and still providing the tactile experience of pulling a cork from the wine bottle.

    This would be a major shift for the New Zealand wine business, which has adopted screwtops with alacrity – about 70 percent of all wines produced there are in screwtop bottles.
    KC's View:
    This kind of the cork at the end of the bottle also strikes us as a light at the end of the tunnel.

    Published on: July 21, 2005

    •, the New York City-based e-grocery company, is expanding to New Jersey. It has started serving Jersey City, and expects to be in Hoboken by the end of the year.

      “We love New Jersey because the people there have been very patient waiting for FreshDirect to come into their neighborhoods," said company president Steve Michaelson. "Both the residents of Jersey City and the corporate clients have elected to do business with a company that offers a variety of fresh and prepared foods -- as well as the staples - custom fit to your order.”

      In the three years since launching, FreshDirect has filled more than two million orders and says it has more than 200,000 customers in the city of New York.

    • Costco reportedly has expanded its online presence in Canada, bringing the total of SKUs available there to about 1,000 after about six months of testing.

      The company says it will eventually bring the SKU count on the Canadian site to 3,000, the level maintained on its US site.

      The Canadian Costco site can be viewed in both French and English.

    KC's View:

    Published on: July 21, 2005

    The Grocery Manufacturers Association (GMA) and the Food Marketing Institute (FMI) have recognized four industry initiatives that have successfully addressed the challenge of reducing unsaleable costs.

    The 2005 Innovation Awards, sponsored by GMA and FMI, were awarded to:

    • Campbell Soup Company and Food Lion for working together to identify a secondary packaging flaw in V8 and Tomato Juice packages in a matter of 15 days, resulting in a long-term solution for the entire supply chain.

    • Kellogg USA for creating an innovative system that delivered a 75 percent reduction in damage related to Morning Food products over a five-year period.

    • Land O’Lakes, Inc. for reducing overall unsaleable percent to sales below 1 percent over a three-year period.

    • MeadWestvaco Coated Board for taking steps to reduce damaged goods by evaluating paperboard compression and choosing paperboard substrate, which ultimately reduced unsaleables by 20 percent to 30 percent.

    “The winners of the Innovation Award clearly showcased dynamic solutions for reducing the costs associated with unsaleable products. The goals achieved by these companies can serve as models for others in the industry,” said GMA’s Senior Director of Industry Affairs Karin Croft.

    “We are very pleased to recognize the outstanding accomplishments made by each of these companies,” said Patrick Walsh, senior director, industry relations, FMI. “Their innovative initiatives provide excellent examples of how collaborative efforts can significantly reduce unsaleables losses and improve operating efficiency across the board.”

    The awards came as the “2005 Unsaleables Benchmark Report,” sponsored by GMA and FMI, was released yesterday at the Joint Industry Unsaleables Management Conference in Vancouver, British Columbia. This report said that the cost of unsaleables declined last year to 1.06% of sales for the average CPG manufacturer, and that the total industry cost of unsaleables last year was $2.52 billion.
    KC's View:

    Published on: July 21, 2005

    • A July 27 hearing into whether the US border should be permanently closed to Canadian cattle – or, to be more accurate, re-closed, since another court opened it this week – has been delayed.

      The Montana judge who issued a temporary injunction keeping the border closed – which was overruled by the appeals court – said he needed more time to review the appeal court decision before dealing with the issue from the bench.

    • The state of Ohio, falling into line with what appears to be the prevailing legislative and judicial mood, has struck down restrictions on out-of-state direct wine shipments to the state’s residents and businesses. The previous restrictions were overturned by a US District judge who ruled that the rules were discriminatory.

    • Cadbury Schweppes America's Beverages has announced that it will discontinue its caffeinated version of 7Up, known as dnL (7Up upside down), because of poor performance.

      The product was launched in 2002 to compete with energy drinks.

    • Japanese c-store operator FamilyMart has opened its first US store – what it calls a “luxury convenience store” with Japanese foodservice offerings - in West Hollywood, California. The chain plans to have 200 US units by 2009.

    KC's View:

    Published on: July 21, 2005

    • Masao Kiuchi, CEO of Seiyu, has resigned from the company, taking responsibility for the company’s poor performance. Seiyu is Wal-Mart’s Japanese affiliate, but it has not been responding as expected to Wal-Mart’s supply chain and marketing ministrations.

      Seiyu's current chairman, Noriyuki Watanabe, takes over as CEO.

    KC's View:

    Published on: July 21, 2005

    • Supervalu posted first quarter net sales of $6.0 billion, up from $5.9 billion during the same period a year ago, and net earnings of $91.2 million, down from $149.4 million a year ago. The Retail Food division saw same-store sales increase 1.7 percent.

      During a conference call with analysts yesterday, company CEO Jeff Noddle said Supervalu would help Save-A-Lot franchisees remodel between 200 and 300 units during the coming year as a way of helping to bolster their performance.

    • The Coca-Cola Co. reported second quarter earnings of $1.72 billion, compared to a profit of $1.58 billion in the same period a year ago. Revenue in the quarter was $6.31 billion, a seven percent increase from the $5.91 billion recorded in the same three-month period a year ago.

    • Spartan Stores reported first quarter overall sales of $429.3 million, down 3.1 percent from the same period a year ago, with same-store sales down 2.8 percent during the quarter. Earnings improved 23% to $6 million.

    • Nash Finch reported a second-quarter net profit of $9.7 million, as compared to a net loss of $15.6 million for the second quarter of 2004. Total sales for the second quarter of 2005 were $1.085 billion as compared to $906.4 million in the prior-year period.

    KC's View:

    Published on: July 21, 2005

    • “Star Trek” fans everywhere are mourning the death of James Doohan, who played the role of Chief Engineer Montgomery Scott on the original television series and in seven movies. Doohan died at age 85 of pneumonia and Alzheimer's disease, according to a family spokesman.

    KC's View:
    We’re avoiding “beam up” and “final frontier” jokes because of yesterday’s little controversy.

    See “Your Views”…

    Published on: July 21, 2005

    Regular readers of MNB know that we are afflicted with a joke reflex, the instinct to make a joke out of almost anything…if only to lighten the mood a little bit.

    Our kids tell us that we are only half as funny as we think we are. Yesterday, apparently, we wrote something that led at least some of you to think that our kids have vastly overrated us.

    We made brief mention yesterday of the death of Gerry Thomas, who created the TV dinner while working for the Swanson Co. in 1952, at age 83. We noted with due respect that more than 8.4 billion TV dinners have been sold since their invention, but then made a little joke in our commentary, saying that we were "working to check out rumors that he will not be buried or cremated, but rather frozen with his body kept in an aluminum container complete with tasteless meat, some kind of brown sauce and a gelatinous dessert impossible to identify."

    The operative words here, it seems, are “little joke.”

    One MNB user wrote:

    Boy … are you gonna get letters !

    But on the up side your article sparked a 10 minute conversation in our work area regarding the TV dinners that we used to LOVE and look forward to when we were all kids. Salisbury steak with mashed potatoes and peas was my personal favorite. And make sure you keep the “apple cobbler” compartment covered to prevent burning. And how about the Banquet Chicken Pot Pies ! Especially on “babysitter night”. Then finish it all off with some Jiffy-Pop popcorn after the Mutual of Omaha’s Wild Kingdom show. Ah memories, … you’ll never take those away from us.

    As a special celebration we all decided to go out and get some TV meals for lunch today to celebrate. We’ll miss you, Gerry Thomas.

    MNB user Glenn Harmon wrote:

    Your comment on the death of Gerry Thomas, creator of the TV dinner, was in poor taste. No pun intended.

    Another MNB user wrote:

    Pretty tasteless comment on your part.

    MNB user Damian Dotterweich wrote:

    “Tasteless” also describes your attempt at humor in this story. Give the man credit for his innovation, don’t take potshots at him when he just passed away.

    MNB user Bruce MacDonald wrote:

    I am guessing that your mailbox will be filled by tomorrow.

    Disrespect is likely being generous. An apology to Mr. Thomas's family and the entire board of people you have just insulted is not even enough to cover your remark regarding the death of Gerry Thomas.

    What achievements have you brought to the food industry?

    MNB user Bob Bartels wrote:

    An inappropriate comment.

    Okay. Maybe we went a little far.

    For the record, these are all the critical emails we got about our comment…which means that the other 13,000+ people who get MNB each morning either didn’t object or didn’t write in.

    Also, you should know that you can make inappropriate jokes about us whether we are dead or alive. We dish it out, so we can take it.

    There was, by the way, one MNB user, Jeff Green, who got the joke:

    I appreciate your sense of humor and never cease to be surprised when some people take your obviously off-beat statements seriously.

    Don't change.

    We probably won’t. For better or worse.

    Here’s the philosophy, in the words of the great Monty Python:

      Always look on the bright side of life.
      Always look on the right side of life…

      For life is quite absurd
      And death's the final word.
      You must always face the curtain with a bow.
      Forget about your sin.
      Give the audience a grin.
      Enjoy it. It's your last chance, anyhow.

      Always look on the bright side of death,
      Just before you draw your terminal breath…

    Grinning yet?
    KC's View: