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    Published on: May 3, 2006

    While MNB has been offering regular previews of next week's Food Marketing Institute (FMI) Show, it should be emphasized that there are four other shows co-locating with FMI in Chicago – the Fancy Food Show, All things Organic, the US Food Export Showcase, and, of course, the United Produce Show, sponsored by the United Fresh Fruit & Vegetable Association.

    Full disclosure: MNB Content Guy Kevin Coupe will be speaking twice at the Produce Show – on Saturday, March 6, at 11:15 a.m., and again on Sunday morning at the show's invitation-only Retail Executive Forum.

    To get a sense of what's in store for Produce Show attendees, MNB engaged Tom Stenzel, president/CEO of United, in the following exclusive e-interview.

    MNB: What’s new on the agenda and the exhibit floor for this year’s Produce Show?

    Tom Stenzel: The new Produce Show Hospitality Center, located in the Produce Show expo, will give all attendees a place on the show floor to network, learn, and relax throughout Sunday, Monday and Tuesday. At lunch time, chefs will be demonstrating new produce dishes, and after lunch our Fresh Produce Outlook Roundtable Discussions will address retail, foodservice and consumer issues. At the end of each day, all attendees can enjoy drinks and appetizers during happy hour.

    In addition, we offer an outstanding conference program. Keynote speaker Bill Moran, CEO of the 1,150 store chain Save-A-Lot, will kick off the Saturday conference program followed by a full day of workshops and our opening reception at the Art Institute of Chicago. U.S. Secretary of Agriculture Mike Johanns is speaking at our Monday morning breakfast session, where we’re also presenting the 2006 Retail Produce Manager Award Winners.

    MNB: Clearly the continuing enthusiasm for organics is changing the way stores merchandise and market produce. But what kind of impact is it having on relationship between suppliers and retailers, as well as suppliers and consumers? Does it ratchet up the responsibility for providing information as well as product?

    Tom Stenzel: Anytime a retailer stocks a new produce item, whether it is conventional or organic, there is a learning curve on the storage, handling, and promotional aspects of that item. Everyone throughout the distribution chain, including customers, needs to know how to maintain the quality and how to incorporate that item into their daily diets.

    MNB: There seems to be an implication in all the discussions of natural and organics that they are better than mainstream products – which would mean that organic produce is simply better that conventional produce. Do you subscribe to that, and how do you deal with this issue?

    Tom Stenzel: The United Fresh Fruit & Vegetable Association supports the entire produce industry; our membership includes both organic and conventional growers, processors, distributors and retailers, and exhibitors of both organic and conventional can be seen at the Produce Show at FMI. Consumers choose fruits or vegetables based on a variety of reasons, including production method. We believe it is irresponsible to the entire industry and damaging to consumer health to cast false aspersions about the healthfulness and safety of any produce. All produce, whether organic or conventional, offers consumers a wonderfully nutritious and healthy food choice.

    MNB: An industry analyst told me recently that he thought that as he looked beyond mad cow disease and avian flu, the next big issue in the food industry might well be pesticides on produce imported from overseas, where the growing and sanitation controls are not as strict? Do you think this is a fair assessment, and how should the industry deal with it?
    Tom Stenzel: Both imported and domestically-grown produce must adhere to strict U.S. government regulations and standards. Consumers can be confident that all produce sold in this country is being equally regulated.

    MNB: But clearly, stuff happens that even regulations and standards cannot control, sometimes because of human error and sometimes because of circumstances that cannot be foreseen. If analysts are already suggesting this could be a problem, it strikes me that it isn’t an enormous leap to the point where 60 Minutes and/or Dateline are doing stories about the possible threat of imported produce. So what does the industry need to do to 1) minimize the possible problems, beyond relying on standards and regulations, and 2) maintain consumer confidence?

    Tom Stenzel: There's no question we have to be on top of our game. First, we have to make sure produce grown for export to the United States really does meet all those standards. We're developing industry guidelines that apply to production no matter where it takes place, and education programs to make sure those guidelines are understood. Also, retailers play a major part in making sure they know who they are buying from, and that sound food safety practices are in place from grower through to retail store.

    Second, we also have to be able to talk openly and confidently about our food safety practices. A potential TV expose is always just a moment away, but we've learned the best way to approach journalists – and consumers -- is to be open about our practices and show them all we are doing in food safety. Food safety is a process of constant improvement, and we are striving through industry and government research and process operations improvement to deliver the safest possible products.

    MNB: What’s the next big produce trend, in your mind?

    Tom Stenzel: We’ve seen a tremendous increase in the demand for new, convenient, produce items such as salads, fresh-cut fruits and similar products. The most convenient, freshest, and highest quality items are the most successful. Consumers looking to double their consumption, as recommended in the government’s 2005 U.S. Dietary Guidelines, will also be looking for easy-to-eat produce items.

    MNB: With convenience can come trade-offs...or at least, that’s what some would have us believe. Can you offer some perspective on the recent Dateline NBC piece about E.coli in bagged salads, and what industry and government should be doing to combat both the actual issue and the public relations problem?

    Tom Stenzel: I don't share the view that convenience requires trade-offs, especially not in safety. In fact, the research that has gone into developing bagged salads and other fresh-cut products has actually helped improve industry safety practices from field to table. A story like this on Dateline is always troubling, but I think consumers realize that these are extraordinarily safe products.

    With more than 6 million bags of salad sold every day, any incidence of illness is extremely rare. But, even one illness is too many, so we are working as hard as we can to reduce any risk even further. As for the PR problem, we think the answer is to be open with our customers and show them what we're doing, not get defensive. I can tell you that bringing the Dateline crew to a lettuce ranch in Arizona where they could film our harvesting and talk directly with our Board member who grows that lettuce was one of the best choices we made. Our chief food safety expert Dr. Jim Gorny sat with Dateline for an hour long interview detailing all the scientific ins and outs of this issue. I've always believed that the best PR is doing a good job in the first place, and being open about it.

    The United Produce Show is scheduled for May 6-9 in Chicago, Illinois.
    KC's View:
    We have to say that we like Stenzel's attitude toward the media, at least as he expresses it in this interview. Too many times, organizations think that by not talking to the press they can control the flow of information…when, in fact, usually the opposite is true. Sure, there are responsible journalists and irresponsible journalists…and there probably even are a few that we wouldn’t talk to. But we saw the Dateline piece, and we can only imagine how different/bad it would have been if United hadn't cooperated.

    By the way, we want to once again remind you about a little MNB get-together that we'll be sponsoring in Chicago this weekend…On Sunday, May 7, we will be hanging out at the bar at one of our favorite Chicago bistros, Bin 36, from 6-7:30 p.m. And if any members of the MNB community would like to stop by, say hello, and chat for a bit…well, the first couple of bottles of wine will be on us.

    It’ll be a great opportunity for all of us to put faces and voices with the names and words that appear on MNB plus an excuse to drink good wine. (Not that we need an excuse…)

    (Bin 36 is located at 339 N Dearborn on the west side of Marina City, between the river and Kinzie.)

    We’ll see you in Chicago.

    Published on: May 3, 2006

    MSNBC reports that the United States government "forecasts massive disruptions if bird flu or some other super-strain of influenza arises, with as much as 40 percent of the national work force off the job, but it doesn't foresee closing U.S. borders to fight the spread, according to a draft of the national response plan obtained Monday by The Associated Press.

    "An outbreak could lead the government to limit international flights, quarantine exposed travelers and otherwise restrict movement in and around the country."

    According to the MSNBC report, "The plan says preparedness for a pandemic could take years, and so significant steps must be taken immediately across all levels of government and the private sector to protect national security, the economy and the basic functioning of society.

    "The report aims to energize the private sector, noting that 85 percent of the systems that are vital to society, such as food production, medicine and financial services, are privately run."

    Telecommuting will probably be a major part of how companies will cope with a pandemic, according to the government report. "Not only would sick workers stay home, but so would anyone who caring for ill family members, under quarantine because of possible exposure to the flu or taking care of children when schools shut down. The same could go for anyone who simply feels safer at home," says MSNBC.

    "Included in the report's advice for employers: Have workers remain at least three feet apart or otherwise limit face-to-face contact to limit the flu's spread, including by working from home or substituting teleconferences for office meetings.

    "The report envisions possible breakdowns in public order and says governors might deploy National Guard troops or request federal troops to maintain order.

    Meanwhile, the Philadelphia Inquirer reports that "a strain of bird flu found in a Camden County market last week likely was not the deadly strain found in Asia, New Jersey health officials said yesterday. Initial tests from a federal lab were negative." More than 100 bird were destroyed last week after a routine inspection showed a strain of bird flu in the store.
    KC's View:
    If the pandemic hits, suddenly the notion of online grocery shopping may look a helluva lot more appealing.

    By the way, if you think the public isn't interested in this kind of stuff, did you see that ABC plans to air a movie entitled "Fatal Contact: Bird Flu in America," on May 9?

    Just in case anxiety isn't ratcheted up enough…


    Published on: May 3, 2006

    This week's Advertising Age features a column by Laura Ries in which she characterizes Starbucks as a company that has taken its eye off the ball:

    "At Starbucks plans are brewing to triple its size and become the world's largest fast-food brand," she writes. "And then there's the music and movie businesses the chain has gotten into.

    "It's the same old story. A company narrows its focus and becomes a big brand and a big success. Then it gets arrogant, cocky and greedy and decides it can take over the world and be all things to everybody. Wrong.

    "When will company leaders learn? Starbucks is a strong coffee brand because its brew packs a powerful punch. Dilute the thing with too much water and you'll end up with a lousy brand and a terrible cup of coffee."

    Ries describes Starbucks as a "monster global 'coffee' brand with lots more potential to grow in both the U.S. and abroad. I just don't think it can be a global "fast-food" brand. Why try to be everything to everybody? It adds costs, cuts profits and weakens the brand."

    The most potent competitor to Starbucks, Ries writes, is Dunkin' Donuts…but she suggests that this company has its own challenges:

    "Dunkin' Donuts built its brand on donuts. But expanding waistlines have moved people away from donut shops and into Starbucks' coffee culture. Dunkin' Donuts, of course, was also well known for coffee. It must drive them nuts to see Starbucks pre-empt a product that Dunkin' Donuts pioneered.

    "In the past few years, Dunkin' Donuts has been chasing the latest trends, adding bagels, muffins, hot sandwiches, high-end coffee and a variety of, non-fat, low-carb items. All products for which they have no credibility.

    "What should the new owners of Dunkin' Donuts do with the brand? Well, I believe they do have credibility in coffee, but not the Starbucks stuff. They need their own coffee twist. They need to be the opposite of Starbucks. Strong No. 2 brands don't emulate the leaders, they become the opposite."
    KC's View:
    We agree with Ries. To a point.

    It is fair to say that if you want to compete with a powerhouse, the best way to go is to find an entirely different approach, not imitate the bigger competitor. That makes sense.

    But we're not sure that it fair to suggest that Starbucks shouldn’t go into the music business (where it already has been successful) or the movie business (where time will tell). And while we wouldn’t buy any kind of sandwich from Dunkin' Donuts because they simply don’t seem fresh, it probably isn’t fair to suggest that the company should stick to coffee and doughnuts.

    If that were true, nobody would ever try anything new. For that matter, Ad Age wouldn’t be available on the Internet, and we wouldn’t have read Ries' column.

    In the case of Starbucks, the company seems to have been pretty clear about its game plan. It is a company with a lifestyle orientation – focused on coffee and the 'third place," but aware that sensible diversification can help the company as consumer tastes and preferences evolve and change.

    Dunkin' Donuts has been less sure-footed, but that may be because it has been so identified with high-carb doughnuts in a low-carb world.

    Published on: May 3, 2006

    Published reports say that Marks & Spencer is considering changing its name.

    The company is testing the use of the name "Your M&S" on one store, looking to see how consumers react. If the public responds positively, the company may consider changing its name on every one of its 440 stores in the UK.
    KC's View:
    If Marks & Spencer really wants to attract more people into its stores, we have a suggestion for a name that it could use that would prove its consumer relevance and get people flocking through the front door.

    Tesco.

    Published on: May 3, 2006

    The New York Times this morning reports that a company called Sonoma Foie Gras has filed a lawsuit against Whole Foods Market, charging the retailer with interfering with its contractual relationship with another company, Grimaud Farms.

    "According to the complaint, filed in January, Whole Foods told Grimaud Farms last fall to stop processing and distributing Sonoma's ducks and foie gras or the grocer would no longer do business with the company," the NYT writes. "Grimaud, which sells ducks to Whole Foods, will terminate its contract with Sonoma at the end of this month."

    Whole Foods does not sell foie gras because of what it feels is the cruelty to ducks and geese involved in its production.

    KC's View:

    Published on: May 3, 2006

    The St. Paul Pioneer Press reports on the caffeine addiction being developed by thousands of young teenagers, often lured by upscale coffee drinks that taste more like milkshakes than coffee.

    "According to nutrition specialists at the Mayo Clinic in Rochester, short-term side effects of caffeine can include heartburn, headaches, stomach troubles and a jump in blood pressure," the Pioneer Press writes. "Caffeine can also aggravate heart problems or nervous disorders, and children and parents might not even be aware of the risk. Since caffeine is a stimulant, it can also produce symptoms like jitters, irritability and hyperactivity."
    KC's View:
    We would agree that too much coffee is probably not a good thing for young people.

    But part of the problem is that we have all these kids getting up at 6:30 am to go to school, when their bodies simply aren’t oriented that way.

    We spent a fair amount of time this morning trying to get our 16-year-old and 11-year-old out of bed and off to school. Frankly, there were moments when we thought that intravenous caffeine sent directly into their veins seemed like a pretty good idea.

    Published on: May 3, 2006

    • The Houston Chronicle reports that Andy Stern, president of the Service Employees International Union (SEIU), actually said some nice things about his arch-enemy, Wal-Mart, the other day.

    "I think it's very good that Wal-Mart is starting to do some positive things," Stern said, referring to the retailer's decision to focus on diversity, sustainability, and energy conservation.

    But lest he be accused of going soft on the retailer, Stern also said, "On one hand they have done some very good things. On the other hand they have a business model that's really not good for American workers."

    Wal-Mart spokesperson Sarah Clark was moderately gracious about Stern's comments. "I would love to be able to say it is good he is finally coming around and we appreciate the fact that he is able to see how Wal-Mart is good for working families," she said. "Hopefully, they'll stop attacking us and let working families decide where to shop and work."
    KC's View:

    Published on: May 3, 2006

    • Fresh Direct, the online grocery service that currently delivers Manhattan, parts of Brooklyn, Queens, and Westchester and sections of Northern New Jersey, announced that it is expanding to parts of Long Island. By summer, the company expects to be delivering to the eastern end of Long Island, offering service to residents and vacationers in East Hampton, Amagansett, Southampton, Bridgehampton, Westhampton, Sag Harbor and Hampton Bay from Memorial Day weekend through Labor Day.

    KC's View:

    Published on: May 3, 2006

    • The Washington Post this morning reports that Wegmans Food Markets will build a new store near Largo in Maryland's Prince George's County. It will be the company's third store in the state.

    According to the Post, "The site in Prince George's carries special significance for a community that has largely been ignored by upscale retailers. The county, part urban and part rural, has an ailing school system and last year recorded a record number of homicides. It is also home to expensive gated communities, a growing number of $1 million homes and a population that bristles at having to travel outside the county to spend money.

    • Czech this out.

    Published reports say that Tesco has unveiled its Express convenience stores in the Czech Republic, opening the format in several city centers.

    However, at the same time, there are unconfirmed reports that Delhaize may be planning to sell its 90+ Delvita stores in the Czech Republic and exit the market.

    • Publix reportedly has started up a wine club designed to help its shoppers learn more about wine, and also is publishing a quarterly magazine tied to this theme called Publix Grape.
    KC's View:

    Published on: May 3, 2006

    • Pathmark announced that its preliminary first quarter sales were $998.6 million compared to $1,002.5 million in the prior year's first quarter, with same-store sales that were essentially flat.

    • Walgreen Co. reported April sales of $3.9 billion 948,015,000, an increase of 13.1 percent from $3.5 billion during the same month a year ago. Same-store sales were up 8.4 percent.
    KC's View:

    Published on: May 3, 2006

    • The National Association of Convenience Stores (NACS) announced that Christopher Tampio, formerly of the National Association of Manufacturers (NAM) and the Retail Industry Leaders Association (RILA), has joined its staff as senior director of government relations.

    • The Grocery Manufacturers Association (GMA) today announced that Caroline Silveira will join its staff as the new director of state affairs for the western region of the United States. Most recently, Silveira was the legislative director for California State Senator Jeff Denham, the current chair of the California Senate Agriculture Committee.
    KC's View:

    Published on: May 3, 2006

    We had a story yesterday about how some California consumers are underwhelmed by the new Lucky store opened by Grocery Outlet, and that is the subject of considerable litigation between it and Albertsons (which used to own the Lucky name but may have let the trademark lapse).

    MNB user Dave Wiles wrote:

    If Grocery Outlet just renamed their older smaller stores "Luckys", they are making a huge mistake.

    The Lucky's I knew (in the late 60's and early 70's) were larger and carried almost everything under the sun. One stop shopping. Not all Luckys were a "LDC" or Lucky Discount Center which was this "total store". They carried not only a full grocery store but a large non-foods section. A drug store with pharmacy and clothing, hardware, some even had a full paint department and a large toy section.

    Smaller stores (Lucky's) had a full grocery department and as much additional departments as the square footage would permit. The largest stores were named "Gemco" which at first had sub-leased areas to cleaners, shoe stores and other merchandisers to fill these (at the time) gigantic square footage stores….Grocery Outlets should look into the history of why Lucky's made their name. Not just pass off their old tired stores as a "Lucky's".




    MNB has a story about how six of the twelve members of a Japanese research panel looking into the safety of US meat imports – which currently are banned because of mad cow disease concerns – have resigned, complaining that there was too much political pressure to reopen the nation's borders to American beef.

    To which one MNB user responded:

    Well, hooray for the Japanese for standing on principles - what a novel idea! Too bad the resignation of these panel members who were feeling the pressure from Americans to reopen the importation of American beef hasn't made front page news across this country. Here we have a group of people for whom food safety is paramount for their country while in the good ole USA, it's capitalism at its worst that runs through the blood of the cattle industry right up to the White House.

    MNB user Phillip W Censky had a question about the USDA's priorities:

    If the USDA doesn't think it's the government's job to safeguard the meat supply, who's job is it? If the answer is private industry, why won't the government allow meat producers to test every cow and label as such?

    And MNB user Sue DeRemer wrote:

    Silly me… Here I thought the purpose of the USDA was to protect the American food supply, not just to tell us how bad it is. But wait… the USDA website says the following:

    "USDA is responsible for the safety of meat, poultry, and egg products."

    Hmmm…perhaps Secretary of Agriculture Mike Johanns is unaware of his Department's purpose?


    MNB user Richard Alt wrote:

    Once again the USDA, in cahoots with beef ranchers, is placing a high risk bet for the sake of saving a few dollars. The bet on the $70 billion industry that reduced testing is the right thing to do carries an ominous potential outcome. If they are wrong it will lower the U.S. consumers trust in the beef supply chain. The cost to the Industry will certainly be vastly higher than the BSE testing cost. How many more times do U.S. business leaders need to learn the lesson of avoidable catastrophic consequences to save a few pennies? Moreover, both the USDA and cattle ranchers should be focused on safeguarding their image by providing a quality and safe product to their consumers.

    There are two simultaneous crises taking place here.

    A crisis of confidence. And a crisis of competence.

    And one is feeding into the other.

    KC's View:

    Published on: May 3, 2006

    Can a simple strip of paper really reduce labor costs? It can when it’s a Gladson QuickSet® Image Strip.

    In this age of expensive technology and software solutions, QuickSet® Image Strips and Image Back Tags significantly cut costs associated with new store set-ups, remodels and category resets. QuickSet Strips and Tags are built directly from the electronic planogram file. Images on the strips show set crews exactly where products are supposed to go on the shelf.

    “The tool is so intuitive, our customers find they save as much as 60% of the labor time with 100% shelf set accuracy versus using planogram outputs alone,” says Greg Gates, Director of Image Merchandising Solutions. “When the employee sees the picture, they are less likely to place the item in the wrong position on the shelf.”

    Contact Greg Gates at ggates@gladson.com today to start saving money on your next set.
    KC's View: