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    Published on: December 22, 2006

    The San Francisco Chronicle reports that once the Democrats gain power in the US Congress next month and Sen. Tom Harkin (D-Iowa) becomes the chairman of the Senate Agriculture, Nutrition and Forestry Committee, it is expected that he will push for legislative controls on the marketing of food products to children. The goal is to find a way to slow the growth rate of childhood obesity in this country.

    While some companies, such as Kraft and Disney, have made moves in this direction on their own, there are those who say that a voluntary approach simply isn’t enough, that the obesity and health crisis is serious enough to require a comprehensive and holistic approach to some sort of solution.

    Meanwhile, in a similar vein, AdWeek writes that as major liquor companies “continue to pour more ad dollars into cable and spot TV, underage viewers' exposure to alcohol advertising has exploded, per a new study conducted by the Center on Alcohol Marketing and Youth at Georgetown University. Between 2001 and 2005, 1.4 million alcohol ads ran on TV at a cost of $4.7 billion, per CAMY. The number of ads spiked 34 percent during that five-year span, thanks largely to the fact that distilled spirits companies broke a 48-year-old self-imposed ban on TV advertising.”

    KC's View:
    While we would prefer that companies self-regulate, we do think that in general, industry hasn't done in enough in this area. It is as if, once many people leave their homes and go off to work, they forget that they also are parents, and that sometimes the bottom line isn’t the bottom line. This is especially the case in the area of liquor advertising, where a 34 percent spike in advertising simple seems irresponsible.

    This said, we’re not sure that reducing kids’ exposure to certain kinds of food advertising is going to somehow slow obesity growth rates. If parents continue to allow their kids to pig out on foods of questionable quality and don’t teach them about things like calculated indulgence and the need for a balanced and intelligent diet, then all the advertising controls in the world won’t help.

    Published on: December 22, 2006

    The Washington Post reports that “obese people have a distinctive mix of bacteria in their digestive systems that seems to make them prone to gaining weight,” which it then describes as “ a startling discovery that could lead to new ways to fight the obesity epidemic.”

    The study, done by the Washington University School of Medicine in St. Louis, suggests that not only could the results “lead to profound new insights into one of the nation's biggest health problems,” but could also create new ways of manipulating people’s physical makeup to address proclivities toward obesity.
    KC's View:

    Published on: December 22, 2006

    • The Milwaukee Journal-Sentinel reports that Anheuser-Busch is selling a gluten-free beer, Redbridge, that it describes as “a fine, handcrafted specialty beer made without wheat or barley.” The product isn’t the first such beer – the paper notes that Milwaukee's tiny Lakefront Brewery also makes a gluten-free product, New Grist, that's been popular enough to drive the tiny brewery's double-digit sales growth.

    KC's View:

    Published on: December 22, 2006

    • Price Chopper Supermarkets/Golub Corporation announced that W. Thomas Bird, most recently the company’s vice president of Warehousing.
    has been promoted to the position of vice president of Transportation.

    In addition, the company announced that Robert Doyle, its vice president of Transportation. has been promoted to the position of vice president of Warehousing.
    KC's View:

    Published on: December 22, 2006

    • Drug chain Rite Aid reported that its Q3 revenues increased 4.2 percent to $4.32 billion from $4.15 billion a year ago, on same-store sales that were up 3.4 percent. The company reported a loss for the period of $6.82 million, about half the loss of $12.5 million reported during the same period a year ago.
    KC's View:

    Published on: December 22, 2006

    MNB user Matt Weeks had some thoughts about yesterday’s story about how some chains are not posting voluntary advisories about seafood consumption:

    I read with interest and concern the story about voluntary labeling/disclosure about seafood. I have long been a seafood lover, and was disappointed decades ago (as a bachelor) when my beloved canned tuna fish was exposed as being mercury-laden.

    So I go back to a Saturday Night Live -esque scenario--- "would you like the extra-low-low-mercury fish, or our regular mercury-level Mrs. Jones?" or-- "gosh Mrs. Smith, I'd suggest the low-level mercury fish for you, since you are going to feed it to your three small children. Costs a bit more, but then aren't they worth it?" I wonder what the Monty Python guys would have done with it.

    So we are stuck. Probably too late for me. After some forty years or so of consuming fish with abandon, I've probably got several dozen thermometers' worth of mercury stored up in my frame here. And I can withhold most of the offending "wild" fish from my five-year-old (along with the wonderful flavors, the omega-3 fatty acids, etc)... but what about the millions of consumers who have not read what I have read?

    And who is accountable to their children and future children? Are we in the "plausible deniability" zone at large grocery companies? Can Sarbanes Oxley help us out here, (for public companies) with executive suite accountability for known dangers like this - extending into some sort of fiduciary malfeasance? Do we "sick" the lawyers on them for this one? Do we alert the tobacco lawsuit companies to another gold-mine of litigation? That would be a sad day for everyone if we had to go to that dark corner of so called consumer protection.

    How much of a brain does it take to figure this one out? If it has mercury, and if mercury is bad, then we owe it to the consumer to try to inform them of "reasonable" risks and "recommended" doses and portions. What they do with that information is their business.

    As trusted providers of food, we ethically own a reasonably aggressive disclosure process. Is it a hassle? Sure. If you don't enthusiastically embrace consumer warnings, get out of the business. To violate that trust in these matters is to be complicit in slow poisonings of the least empowered among us. There is no alternative interpretation. Certainly the profit margin on fish can't be high enough to make a deal with the devil.





    On the subject of out-of-stocks, reportedly on the rise in the UK, MNB user Dan Jones wrote:

    Grocers in the US run out of product because of terrible shelf and category management. Many years back, working with a top retailer in Texas, they told me my leading brand only sold three cases per week, and therefore only justified one facing. They had huge data reports to back up their claims. I asked them to run daily sales in their stores for a week, and it looked like this, in units sold: 24-0-24-0-24-0-0. Each store received three shipments a week, immediately sold out the product, and sat with empty shelves, losing sales. But with other competitors willing to pay slotting to get their product on the shelf, the retailer did not want to give me a second facing – “it cost them money.” Sad that is was worth more to this retailer to fill a warehouse with slow-moving product than to service the customer.




    We wrote yesterday about transparency at store level, citing Aeon in Tokyo, where we saw “QR” tag/technology that allows people to use their cell phones to access information about the growers and growing conditions behind certain products. To which MNB user Jim Swoboda responded:

    If I am not mistaken, Superquinn (in Ireland) was doing this in the mid 1990's. I had the privilege of meeting Fergal Quinn on an industry trip. Photos were shown of his stores and in the fresh departments, the time the product was picked and whose farm it came from were clearly shown. It was a huge advantage for his stores then and I would be surprised if it were not in place to this day. His presentation was outstanding and clearly ahead of what we were doing in the states. It reminds me of an old friend who was fond of saying...learn globally, not locally, act locally, not parochially. A ton of truth in that statement.

    Absolutely right.

    And MNB user Vince Dispenza wrote:

    Recent discussions about providing signage for "valued Customers", or inaccurate labeling, or even "QR" tags, have convinced me that while we have commoditized food distribution, the true leaders will win with information. Whether the information is for our safety, to actually inform, or perhaps to entertain, we should all want to know more about what we eat. The companies that choose to inform rather than just sell, will win.

    Agreed.




    We were critical yesterday of chains such as Long John Silver’s that pass off langostino as lobster, and of the US government for allowing such deceptions to stand. MNB user John Tatum responded:

    Wish it were that simple, but it is not. While in Tokyo, check out the vast variety of lobster available on the local menu and then let’s see if you have the same opinion.

    And another MNB user wrote:

    Here's where you went soft. Anyone who goes to Long John Silver for lobster deserves what they get.

    True.



    And finally, one MNB user wanted to weigh in on the charges that Wal-Mart forced out its new marketing executive, Julie Roehm, because of charges that she accepted a free meal from a vendor in violation of company rules:

    I had a boss once that said, “If I hire an employee that is so easily influenced because somebody bought them dinner, then don’t fire them, fire me for being such a poor judge of character and for being stupid enough to hire them in the first place.” Perhaps CEO Lee Scott needs to evaluate his knack for picking the right person to do the job.
    KC's View:

    Published on: December 22, 2006

    As in past years, I’m going to take off the week between Christmas and New Year’s…it’ll be a nice time to spend a little time with the family and maybe even recover from jet lag. I’ll be back January 2…rested and ready to get back to work.

    Of course, the MNB archives will always be open for your viewing pleasure. And we’ll have a special “Christmas Card” posted for you all next week.
    KC's View:

    Published on: December 22, 2006

    Last year around this time, an ugly truth about my past came to light, one that seemed to capture the imaginations of numerous MNB users.

    I’d never seen 1983’s “A Christmas Story.” Never.

    The emails that poured in when that particular bit of cultural deprivation became known were amazing. I even had people willing to buy it for me, so distressed were they by the fact that I’d never seen a move that for them was a holiday touchstone.

    Well, fret no more.

    I bought it. (The 20th anniversary two-DVD version, no less.)

    And it was wonderful.

    I watched it on the plane from London to Tokyo this week, and I was laughing so hard that I think I was annoying the other passengers.

    The pink bunny outfit. The bullies. The Christmas duck. The lamp. (I loved Darren McGavin’s reaction shots in almost every scene – priceless.)

    It is one terrific holiday movie, and I can’t believe I’d never seen it.

    And if by some mysterious turn of events you haven’t seen “A Christmas Story,” rent it, buy it or borrow it.




    Sometimes in the US, I think we forget or ignore how things are perceived by the rest of the world. And it takes a trip outside our borders to gain some of the perspective back.

    There was, for example, few subjects that ignited the passions of MNB users this past year as Al Gore’s hit documentary films about global warming, “An Inconvenient Truth.” Some folks loved it, and some hated it. Some hated it and Gore so much that they would even argue whether or not it was a hit, ignoring the cold economic reality that it is the third highest-grossing documentary in history.

    But in the Financial Times this week, columnist Gideon Rachman identified the movie’s release as one of the year’s five most significant events.

    Why?

    Rachman noted that Gore held special showings of the movie for legislative bodies in Australia, Paris, London and Brussels. And, he wrote, while “Europeans are still clearly more exercised about global warming than Americans…things are changing even in the US.” States such as California are passing legislation to try and cut down on carbon emissions, and both the federal government and industries need to pay attention. (Witness the news this week about how Tesco is converting its delivery fleet to biodiesel, and all the sustainability initiatives being adopted by Wal-Mart. The global warming train is leaving the station, it’s running on alternative energy sources, and industry needs to be on it.)

    “Of course, none of this is likely to stop global warming,” Rachman wrote. “But at least we can be guaranteed a significant increase in global hand wringing.”

    I hope that’s not all it is. Hand wringing is fine if it only last a short time, and then is converted into hands that take action.

    Hand wringing only wastes energy. And I’m not sure we have a lot of that to spare.




    There was another column in FT the other day that was interesting, about the “story of champagne,” but a line leapt out at me that I though applied to so many businesses. It was by author John Kay, and went like this:

    “Economic rent arises from differentiation and migrates to wherever in the value chain scarcity is found.”

    If I’m reading that right (and there is some doubt about that because my grasp of English clearly isn’t up to his), what I think he’s suggesting is that being tangibly different is good, and that being both tangibly and intangibly good is better because it tends to be rare.

    I’m not sure that his line is the kind to be hung in locker rooms and company cafeterias, but the point is an excellent one. It isn’t the kind of point that can be drilled into people’s heads, but it is the kind that companies can try and graft onto their own DNAs, or make part of their genetic code from the beginning.




    My only regret about this round-the-world trip – and it is the usual regret I have about business trips – is that I cannot spend a little longer in each of the places I visited. London is a place I could spend weeks in (and probably have if I were to tally up all the time I’ve spent there over the years), and my Tokyo excursion was far too brief for a place I’d never been before.

    I’ll have a lot more to say shortly about the level of retail I found here; for the moment, I’m pouring it into my script for the food safety video that I’m producing about Aeon and three other companies around the world. But I will say that I found Aeon’s superstore to be theatrical, effective and highly efficient.

    The company’s attitude toward customers can be summed up in something that happens three times a day. At 11 am, 3 pm and 7 pm, the company jingle begins to play, and virtually every store employee emerges from the back rooms and begins facing off and organizing the shelves, counters and cases. Folks have been doing so throughout the day, but this is a three-time-daily effort that results in a sea of people flooding the store to make sure things are in shape, and it is a highly effective moment – both tangible and intangible.

    One other thing. As each person steps onto the sales floor, they bow deeply, as is the Japanese custom…it is a way to show respect for the customers they serve. And, when they return, they turn before going through the doors and bow yet again. This is something that everyone who works there does whenever they go in and out of the back room…a continuing sign of respect that seems to influence everything Aeon does.

    Remarkable.




    My wine of the week: the 2003 Vasse Felix Cabernet-Merlot blend from western Australia’s Margaret River region, one of those places on earth that I hope to visit before I die. (Or sooner, if I can get a business trip out if it.) It is a lovely little wine, delicious without being too heavy.

    For New Year’s Eve, by the way, I’m pretty sure we’re going to crack open a bottle of Coppola’s Sofia to go with the lobster (real lobster, not langostino, for the record).

    I’ve gotten a couple of emails this week asking if I’ll post a list of all the wines recommended by MNB this year…and I think it is an excellent idea. It may take a few days…I’m going to ask one of the Content Kids to do the actual research, and maybe pay him or her 25 cents per bottle their find. But I’ll try to have this done by January 5 or so.




    My beer of the week is one that apparently cannot be purchased in the US, but one that I loved with a meal of fish and chips at a local pub in downtown London – John Smith’s Extra Smooth, which has a kind of Guinness-like texture while being just a little bit lighter. Sitting at the window of a warm pub, drinking a great beer while looking outside at the Christmas shoppers walking up and down the street…it was almost Dickensian. (Except, of course, for the flatscreen TV in the corner that was reporting news about what are being referred to as the “Suffolk Murders,” which sounds like something out of Agatha Christie or Arthur Conan Doyle. But even the murders seemed typically British, so the mood was intact.)




    That’s it for this week. As I said above, I’ll be off for a few days next week, but will be back on January 2.

    I hope you have a happy and safe holiday, and a prosperous New Year. Peace.

    And, as always, Sláinte!!

    KC's View: