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    Published on: May 1, 2006

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    KC's View:

    Published on: May 1, 2006

    MSNBC reports that US Secretary of Agriculture Mike Johanns said last week that he believes that there are, at maximum, a total of between four and seven cases of bovine spongiform encephalopathy (BSE), better known as mad cow disease, in the entire United States. Johanns said this estimate is based on new testing data compiled by the Us Department of Agriculture (USDA), and that once it is reviewed by an independent panel, a reduction in BSE testing will almost certainly be the result.

    “The data shows the prevalence of BSE in the United States is extraordinarily low,” Johanns told reporters on a conference call. “In other words, we have an extremely healthy herd of cattle in our country.”

    While there have been just three cases of BSE identified in the US, MSNBC notes that "the brain-wasting disorder infected more than 180,000 cows and was blamed for more than 150 human deaths during a European outbreak that peaked in 1993."

    However, MSNBC reports that to USDA is cooking the numbers to some degree - the first case in the US, "a Canadian cow found in Washington state, is not included in the testing analysis. Including that animal would have revised the estimate of infected cows upward to five to 11 nationwide."

    USDA announced in late March that it planned to scale back its BSE testing, but then changed its institutional mind because Johanns suddenly realized that he wouldn’t be able to persuade a BSE-paranoid Japan to reopen its borders to US beef if he was simultaneously reducing the US surveillance effort. Japan, which tests every cow, for BSE, currently has a ban on US beef imports.

    According to the new MSNBC report, Johanns now says "there is little justification for keeping up the higher testing levels, which rose to about 1,000 samples daily, from about 55 samples daily, after mad cow turned up in the U.S. The current level is around 1 percent of the 35 million cattle slaughtered last year in the U.S.
    "Johanns pointed out the testing is not supposed to protect food from mad cow disease; testing is supposed to show how prevalent the disease is."
    Meanwhile, the Wall Street Journal reports that in a speech to the World Meat Congress last week, Gary Johnson, McDonald's senior director for worldwide supply chain management, called for mandatory cattle traceback programs that would assure consumers about the safety of the meat they consume.

    "Consumer trust in the safety of the food they eat across the entire food chain including the proteins is the single most critical factor for our industry," he said.

    Calling the expense of a traceback program "essential" and a "down-payment on consumer trust," Johnson said, "Any company that can't build and maintain their public trust doesn't have to worry about any other trend in the food industry - that company will simply not be in business any more."

    The Journal notes that the US beef "industry is lumbering toward adopting programs that can trace back retail beef to cattle on farms, but not without some industry opposition - and considerable intransigence in some quarters." And, it reports that the willingness of other countries – notable Australia – to invest in traceback programs could and should put competitive pressure on the US to do the same thing.
    KC's View:
    Whenever we read a quote from Mike Johanns, we are reminded of what writer William Goldman once said about the movie business in his book, "Adventures in the Screen Trade."

    "Nobody knows anything."

    And then seems to go extra for USDA.

    Not only does the USDA not factor in the first case of mad cow found in the US, it clearly has not factored in any cases of mad cow that it has not yet found.

    Johanns says that testing is not supposed to protect food from mad cow disease, but just show how prevalent the disease is.

    And then he wants to scale back testing.

    We think that the only thing that should be scaled back is Johanns' period of public service. Put him out to pasture. Now.

    Published on: May 1, 2006

    Dateline NBC last night featured an extensive report on the possible health threat from the consumption of bagged salads because of the E.coli bacteria that has been found in some versions of the product during an outbreak last year.

    "To solve the mystery of how bag salad is contaminated," Dateline reported, "state and federal health officials have launched a wide ranging investigation. So far, that investigation shows that lettuce implicated in last fall’s outbreak was grown in seven different fields in the Salinas valley of California. It was processed at a Dole packing plant in Soledad. Beyond that, the government has no idea where the E.coli came from and…the industry is just as mystified."

    While there seems to be confusion and mystery surrounding the E.coli occurrences, Dateline noted that health experts believe that consumers have to wash bagged lettuce even if it is pre-washed, as well as paying attention to expiration dates and keeping bagged salads refrigerated.
    KC's View:
    We watched the entire piece last night, and the best we can say about it is that we were impressed that Dateline thought it important enough to put on before the Angelina Jolie interview that it promoted all week.

    That said, we hate it when news programs say things like "Dateline went on the hunt for the E-coli bacteria," like they were actually going to find it when nobody else could.

    The 60 Minutes profile of Stephen Colbert was better. And funnier. And truthier.

    Published on: May 1, 2006

    The Indianapolis Business Journal reports that American Financial Group has sold the $3.1 million worth of stock that it owned in the soon-to-be sold Marsh Supermarkets, but that it did so for almost $23,000 below the sale price that it could have gotten…which the Journal suggests could mean that the company feels the sale of Marsh could fall apart.

    On the other hand, the deal could just mean that American Financial wanted to get out while the getting is good.

    It is the second major sale of Marsh stock that American Financial has executed in the last four months. The Business Journal notes that it was American Financial that urged the Marsh board to find a buyer for the company so that it could get a return on its investment in the company.

    Marsh has agreed to a deal in principle to sell the company to a private equity form for about $88 million.

    Meanwhile, a story in the Indianapolis Star suggests that Marsh's top management has plenty of reasons to hope that the sale of the company goes through. While management is almost certain to depart once the sale takes place, it also will do very well in the compensation department. "Chairman Don Marsh will get severance pay of at least $1.2 million a year for the next five years, according to federal filings," the Star reports. "Marsh also is eligible for an annual pension of more than $430,000. And he will get more than $13 million for the stock he owns if the letter of intent signed April 20 with Sun becomes a definitive agreement."
    KC's View:

    Published on: May 1, 2006

    ABC News reports that "the 'Certified Humane Raised & Handled' label, a certification created in May 2003 through Herndon, Va.-based Humane Farm Animal Care, is becoming a more-popular and sought-after sticker for producers and stores, alike" as they try and cater to consumers who are becoming increasingly concerned about the humane treatment of the animals they eventually will eat."

    Numerous questions are being asked by shoppers, ABC notes: "Are the eggs brown or white? Are they organic? Hormone-free? Free-range? Cruelty-free? And how are these things even justified? Certified? Legitimate?"

    More than 50 companies have been granted the right to use the "Certified Humane" tag on their labels, and it has just recently been reported that New York-based D'Agostino's Supermarkets , is asking all its suppliers to become certified humane.

    Now, there's a good competitive reason for D'Agostino's to make such a move. Trader Joe's and Whole Foods are becoming increasingly important players in its market area, and are both appealing to roughly the same demographic as D'Agostino's – and therefore the company cannot afford to be left behind in this increasingly important area. At the same time, though, it isn’t just the competition that is driving the initiative – it is the customers, who are asking for this certification and voting with their wallets and pocketbooks.

    "People are more concerned about where their food comes from," owner Nick D'Agostino III tells ABC News. "People are very, very concerned. There is no reason why animals shouldn't be treated in a reasonable manner." The company already only sells veal that carries the label.
    KC's View:

    Published on: May 1, 2006

    Reports in the Italian media say that a restaurant in Vicenza, a city in the northeastern part of the country, has been fined the equivalent of $855 for displaying live lobster on ice. The charge was cruelty to animals, since the display doomed the lobster to a long, slow, cold death by suffocation.

    According to reports, this hardball approach to animal cruelty is common in Italy. A new law in Turin requires dog owners to walk their pets at least three times a day, and in Rome there is an ordinance that bans goldfish bowls.
    KC's View:
    We suppose stretched out on ice is a tough way to go.

    As opposed to, say, being plunged into a large pot of boiling water.

    Published on: May 1, 2006

    • The Pew Internet & American Life project reports that its newest study suggests that almost a third of US citizens – 32 percent – say that the Internet has significantly improved their ability to shop. This is double the number of Americans who said the same thing just five years ago.

    At the same time, 42 percent of Americans said they have broadband connections at home, up from 29 percent in January 2005.

    Almost three quarters of Americans – 73 percent – use the Internet, up from 66 percent in January 2005. The numbers tend to decline with advancing age – 88 percent of those between the ages of 18 and 29 use the Internet, compared to 84 percent of those between 30 and 49, 71 percent of those between 50 and 64, and 32 percent of those 65 and older.

    The Pew project also makes clear that income has a lot to do with people's ability to access the Internet – with only 53 percent of households earning less than $30,000 a year going online, compared to 80 percent of households earning between $30,000 and $50,000 a year, 86 percent of households making between $50,000 and $75,000 a year, and 91 percent of households making more than $75,000 a year.
    KC's View:

    Published on: May 1, 2006

    Starbucks reportedly has signed a deal with the William Morris Agency in Hollywood, according to a report in the Los Angeles Times, looking to toward expand "its involvement in the entertainment business, seeking movies and books to promote in the hope of duplicating the success it has had with music." The agency will actively seek projects that Starbucks can back and promote.

    Its first effort in the movie business, ""Akeelah and the Bee," opened last Friday; while Starbucks had no role in its production, the company has been heavily promoting it in-store, and gets a producer's credit. The movie, described as "an inspirational tale about an African-American girl in Los Angeles who competes in a spelling bee," was not an enormous box office success, making just $6.25 million over the weekend, but most of the critics seemed to love it, and industry experts believe that it could have a long life on DVD and on cable.
    KC's View:
    The movie business is a dicey one at best, but if Starbucks chooses carefully and appropriately, there's nothing wrong with finding new ways to reach out to consumers. The company just has to be careful that it is not perceived as losing interest in its core priority – coffee – but we suspect that this isn’t likely to happen.

    Published on: May 1, 2006

    The New York Times reports this morning about how Miller Beer seems to believe that "the days of beer commercials stocked exclusively with brainless party boys and buxom blondes are over," and is now using a campaign that features a group discussion by a bunch of guys about what manhood is all about. "Among others," the Times writes, "they are the former National Football League star Jerome Bettis; the World Wrestling Entertainment wrestler Triple H; Aron Ralston, the rock climber who cut off part of his arm after being pinned under a boulder; and the discussion group's leader, the actor Burt Reynolds."

    The Times writes, "In the ads, the actors are assembled around a large square table, sitting before beer bottles and solemnly debating 'Man Laws,' the rules by which men should ideally govern themselves. When toasting, should one clink tops or bottoms? (Answer: bottoms.) Is the high-five officially played out? (Yes.) How long must a man wait before dating his buddy's ex-girlfriend? (Six months.)"
    KC's View:
    First of all, we have to believe that Burt Reynolds would rather be hanging out with bodacious babes than sitting around talking about how to clink beer glasses. (Unless everything else about him is as fake as his hair.)

    But we also think that while we'll buy into Jerome Bettis and Aron Ralston, the use of someone like Burt Reynolds only points to the fact that someone at Miller or its agency is desperately out of touch. We're not suggesting that they use Ryan Seacrest instead…but if they think that anyone in their target demographic is going to use Reynolds as a role model for modern manhood, they are sadly mistaken. Assuming, of course, that the target demographic even knows who Burt Reynolds is.

    Published on: May 1, 2006

    The boards of the Grocery Manufacturers Association (GMA) and the Food Products Association (FPA) announced Friday an agreement in principle to merge as of January 1, 2007, pending a formal vote by the GMA board in June and a vote by both organizations' membership.

    If, as expected, the merger takes place, FPA president/CEO Cal Dooley will become president/CEO of the merged organizations when GMA president/CEO Manly Molpus retires at the end of the year as previously announced.

    The combined organization will be known as GMA/FPA for the first year, after which it will be known as GMA.
    KC's View:

    Published on: May 1, 2006

    • The Minneapolis Star Tribune reports that while Twin Cities grocers traditionally have managed to avoid some of the competitive pressures that come with aggressive national chains such as Wal-Mart, this is changing…and so many of the local companies – ranging from Lunds/Byerly's, Kowalski's, Rainbow, and Cub - are emphasizing increased "service, amenities and convenience" as their differential advantage.

    • Forget rising gas prices. Reuters reports that there could be a shortage pf green coffee beans next year because of a) increased demand, and b) a less than optimal growing season. The result is likely to be a hike in the price of a cup of coffee that could last as long as two years.

    • The Sacramento Business Journal reports that the Bronco Wine Co. has agreed not to sell three brands of wine with labels suggesting that the wine comes from Northern California's Napa Valley unless 75 percent of the grapes used to make the wine actually come from Napa.

    The deal follows a long legal battle in which some Napa vintners looked to restrict use of the Napa name to companies actually using Napa grapes.

    • The Irish Examiner reports that since the abolition of what in Ireland was called the Groceries Order – which set minimum prices for food products – prices on supermarket products actually are up a little bit. The order was abolished because of a dominant opinion that it was keeping prices artificially high, and there was an expectation that food bills might drop close to 10 percent with its elimination.
    KC's View:

    Published on: May 1, 2006

    Federated Department Stores has announced that when it changes the name of its Marshall Fields store in Chicago to Macy's at State Street, it hopes to partner with a grocer such as Whole Foods to sell food there.
    KC's View:
    Federated already should be found guilty of misusing a great trademark. We have no idea whether selling food can make the difference…though we're dubious.

    Published on: May 1, 2006

    The Wall Street Journal reports about the newest food rage in Paris – eating in supermarkets.

    Actually, they're not precisely supermarkets. They're actually a form of gourmet shop that is known as a épicerie-restaurant.

    "With a midday meal with wine at a three-star Paris restaurant like Pierre Gagnaire running almost $400 a person, even finicky gourmets see the appeal of eating a tartine of the highest quality ham, sweet onion jam and melted cheese for $10 or $15 -- no matter if it's served at a table next to crates of apples and shelves of homemade preserves," the Journal writes.

    "For visitors to Paris this spring and summer, the épiceries-restaurants may be a good option. Because they are, at heart, gourmet shops, the products are excellent, and you can taste what's new (currently raisins soaked in Sauternes and coated with bittersweet chocolate). Rather than making a three-hour, three-course commitment when you'd rather be at the Louvre or Galeries Lafayette, you can simply order a salad or daily special with a glass of wine."
    KC's View:
    In France, they understand something that we in America do not. It is all about the food.

    Published on: May 1, 2006

    • The New York Times this morning reports that "two groups, Wal-Mart Watch and Sprawl-Busters, have teamed up to create an online toolkit for community groups opposing the giant discount retailer. The site, called Battlemart, features everything a local activist needs: grants…reports on the economic impact of a Wal-Mart…the names of local traffic engineers…and even advice on how to name a group."

    According to the Times, "Wal-Mart Watch — which has received hundreds of thousands of dollars from the Service Employees International Union — will be host of the Web site and offer start-up grants of $500 to $3,000. So far, it has financed 10 groups, including Gresham First in Gresham, Ore., and Great Falls First in Great Falls, Mont."

    KC's View:

    Published on: May 1, 2006

    • Supervalu named Kevin Kemp, the company's vice president of supply chain services, to be president of the company's eastern region.

    KC's View:

    Published on: May 1, 2006

    …will return.
    KC's View: