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    Published on: May 18, 2007

    There is a great story by MarketWatch about how Safeway – possibly the largest consumer of electricity in California – hired an energy industry executive, Joseph Pettus, to help it find new ways of buying electricity, saving money, and being more environmentally aware.

    “Pettus immediately went to work finding ways for Safeway to cut costs by directly purchasing energy from electricity providers,” MarketWatch writes. “That effort then snowballed into Safeway making increased purchases from ‘green’ energy generators, catapulting the California-based company into the realm of being one of the nation's biggest buyers of clean energy.”

    According to the story, “It all started for Safeway when Pettus began navigating his way through the minefield left in the wake of the energy crisis that rocked California. A former employee of ExxonMobil and Fluor Engineering, Pettus recognized that businesses could negotiate directly with power wholesalers, but there were really only the big utilities available since the market liquidity for electricity had dried up after California's power debacle.

    “So Pettus started trading natural gas futures. Once Safeway had accumulated enough of a stake in that form of energy, he sought out idle power plants that were state-of-the art but had been shuttered after the industry scaled back operations. With those power plants, Safeway forged what are known as ‘tolling’ agreements in which they brought the ingredients to the power marketer and asked them to produce electricity that it could buy.”

    The story continues, “By employing generators that were both more modern and more efficient, he said, Safeway was able to cut the carbon dioxide produced in creating the amount of electricity needed to run its 1,800 stores nationwide. Initially that was just a pleasant side effect for Safeway…But now the company has embarked on a variety of green initiatives.

    “Safeway now can generate its own energy if it wants. It went to the Federal Energy Regulatory Commission and obtained a wholesale energy marketing license. While Safeway doesn't produce its own energy, it can get creative about where it gets it, Pettus said…(Safeway) also pays wind-based producers to generate a supply equivalent to what it needs to power 18 stores, the company's corporate headquarters in Pleasanton, Calif., and all of the 280 retail gas-pumping stations that it owns.”
    KC's View:
    What we like about this story, and Safeway’s focus on energy, is that it isn’t accepting the status quo, but rather is looking for new angles to take in approaching old problems.

    As we’ll note below in “OffBeat,” this sort of aggressiveness is needed in dealing with the national energy issue. Timidity gets you nowhere.

    Published on: May 18, 2007

    Publix Supermarkets yesterday announced that it has set two new locations for its GreenWise Markets concept, which is focused on health, natural and organic products with an emphasis on prepared foods. The two new stores will be in Naples and Coral Springs, Florida, with the former a conversion from an existing Publix unit and the latter a ground-up construction.

    The first four of the GreenWise units in Florida will be in Palm Beach Gardens, Boca Raton, Vero Beach, and Tampa.

    In addition, Publix announced that it will open two new cooking schools – in Alpharetta, Georgia, and Boca Raton, Florida – to add to the three already operating in Tampa, Sarasota and Jacksonville.

    And, Publix said, it also plans to test an expansion of its “Publix Apron” program, offering meal assembly sessions in two sites, in Jacksonville and Lithia, Florida.
    KC's View:
    Compete is a verb. We approve.

    Published on: May 18, 2007

    The San Diego Union-Tribune reports that as management and labor continue to negotiate – and negotiate and negotiate – in Southern California, the United Food and Commercial Workers is both sponsoring pro-union rallies and embarking “on a door-to-door campaign designed to educate customers on the issues behind the contract negotiations.”

    The goal is to ratchet up pressure on the region’s three major chains – Albertsons (owned by Supervalu), Ralphs (owned by Kroger), and Vons (owned by Safeway).

    The contract ran out in March, but has been extended several times as negotiations continue, and both sides seem to want to avoid the extended strike/lockout that roiled the Southern California supermarket industry three years ago.
    KC's View:
    Normally, we tend to think that consumers increasingly are trying to be socially conscious in making their shopping decisions.

    But in this case, we have a feeling that Southern California’s consumers may be so fed up by this protracted nightmare that there are a lot of doors being slammed on a lot of faces.

    Published on: May 18, 2007

    The Business Journal of Phoenix reports that “Bashas' will open its first Ike's Farmers' Market grocery store this weekend in Oro Valley,” which the company describes as a new concept that “features organic breads, an extensive offering of bulk food items such as nuts, grains and coffees, organic wines and health-oriented products including supplements and natural body care items.”

    Bashas’ already operates three formats – AJ’s Fine Foods, Food City (a discount format), and its eponymous chain.
    KC's View:
    Mutliple formats is the way of the future. It allows retailers to avoid the mushy middle by working different niches.

    Published on: May 18, 2007

    Mark P. Kaiser, the former marketing executive at Ahold’s soon-to-be-sold US Foodservice, has been sentenced by a federal judge to seven years in prison for his role in an $800 million accounting fraud. The sentence includes two years of supervised release after the prison term and a $50,000 fine.

    Kaiser and the company’s former CFO, Michael Resnick, both were indicted for their roles in the fraud back in 2004. Resnick pleaded guilty and was sentenced to house arrest for six months.
    KC's View:

    Published on: May 18, 2007

    The Seattle Post Intelligencer reports that a new study done by the Fred Hutchinson Cancer Research Center and National Cancer Institute suggests that the notion that “antioxidants in tomatoes can prevent prostate cancer appears to be false.” The new study describes the old conclusions as largely based on an unproven hypothesis.

    This may come as a surprise to the US Food and Drug Administration (FDA), which allows tomato sauce manufacturers to claim on their labels that ingesting their products can help lower the risk of various cancers.
    KC's View:
    The bad news is that all the tomatoes, V-8 and tomato sauces we consume may not have been helping us lower the risk of contracting cancer.

    The good news is that we love tomatoes…so we’re not going to stop.

    Published on: May 18, 2007

    Food safety transparency in a British pub? That seems to be the case at the Shannon Inn in Bucklesham, Suffolk, England, where the owners have installed a webcam in the kitchen so that people hanging out at the bar can not only track the progress of their meal orders, but also can judge the safety of the food handling techniques employed by the cooks.

    “It’s a bit of a unique idea and we wanted to show our customers that we have nothing to hide,” says Paul Freeman, one of the pub’s owners. “Trade has moved forward and everyone who visits thinks it’s a good idea.”
    KC's View:
    We remember a few years ago when a London pub in the financial district there decided to let the people ordering beer determine the prices they should pay. It set a floor and a ceiling, and then created a kind of trading board – the more that people ordered a certain product, the lower the price got…which created a certain level of excitement among the drinkers who traded stocks for a living. (Of course, the stock market works the opposite way – the more you buy, the higher the price – but the idea seemed to click.)

    Good show, chaps.

    Published on: May 18, 2007

    • The Columbus Dispatch reports that Meijer “has rolled out a text-messaging program that alerts drivers via their cell phones when the company is getting ready to raise gasoline prices. The program, which the grocery retailer began testing last year in its Michigan and Indiana stores, now is available in central Ohio.”

    • Applebee’s announced yesterday that it will join the long list of restaurant chains eliminating trans fats from their cooking oils.

    • The New York Times reports this morning that Cadbury Schweppes has received about a dozen expressions of interest in its US drinks business.

    • The Wall Street Journal reports this morning that it has stopped manufacturing its Spykes malt beverage line of drinks because of what is termed “disappointing sales” and “unfounded criticism” by advocacy groups that have accused A-B of marketing Spykes to underage drinkers.

    MNB reported earlier this week that the US Alcohol and Tobacco Tax and Trade Bureau ruled that Spykes violated federal law because their labels are too hard to read. As a result, A-B stopped production on the product line for a week while it brought its labeling specs up to code.

    But now, the line is history.
    KC's View:

    Published on: May 18, 2007

    • Spartan Stores reports that its fourth quarter net income was 7.2 million, compared with $5.3 million during the same period a year ago. Net sales rose more than 26 percent to $559.5 million.

    The company said that net sales in the distribution segment increased 12.8 percent to $293.8 million in the quarter. In the retail segment, sales rose 38.2 percent to $265.7 million.

    • Longs Drug Stores said that its first quarter net income fell to $13 million, from $15.8 million in the prior-year period. Revenue grew 6 percent to $1.3 billion from $1.23 billion.
    KC's View:

    Published on: May 18, 2007

    …will return.
    KC's View:

    Published on: May 18, 2007

    I heard a story on the radio the other day that I couldn’t quite believe.

    It seems that the County Legislature in Rockland County, NY – which, as it happens, is where I had my first newspaper job back in 1979 – has passed legislation that would make it illegal to smoke a cigarette while driving a car with children in it.

    Okay, take a moment a read that sentence again. Because I couldn’t quite believe it, either.

    Now, let’s be clear about this. You will find no person who is as anti-smoking, and anti-tobacco company, as I am. They all ought to burn in a particularly hot corner of hell, choking on their own product. And I think parents who expose their kids to this stuff can be accused, at the very least, of being negligent. (I say this as someone who grew up in a household with a mother who was a two-pack-a-day smoker for most of her adult life. My dad never smoked, in fact hated it, and I’m proud to say that neither I nor any of my six sisters and brothers ever smoked. My mom’s only excuse would be that she started in the late forties and didn’t know any better. She finally quit, after numerous attempts, around the time she turned 60. She died at age 67 of lung cancer.)

    That said, this legislation is nuts. At what point does the government stop sticking its nose into people’s personal business and decisions?

    The chief health official in Rockland was quoted in the story as saying that case law has shown that a person’s car is not his or her own domain, that a person’s car is a public place and therefore this legislation is both appropriate and constitutional.

    On what planet?

    I’d defer to the lawyers on the question of constitutionality. Some say that it unlikely that this law ever will be enforced, simply because it may be unenforceable. What happens, say, on the New York State Thruway, which runs through Rockland? One can easily imagine checkpoints at the border, with policemen stationed to arrest people who venture into the county with kids in the backseat and a cigarette between their nicotine-stained fingers.

    This is craziness. There has to be a point at which people actually are allowed to make decisions for themselves, to act on the information that is available to them. I think it is fair to say that pretty much everybody knows that smoking kills and that secondhand smoke is almost as bad. Anybody who thinks otherwise is, to put it kindly, a moron.

    But until the day that smoking is made illegal in this country, I think you have to allow people to do it in places that are specifically theirs. Like their homes and their cars. And if their actions hurt their children, well, I’m not sure that arresting and ticketing them is the best solution.

    We may have to settle for knowing that the circle of hell reserved for tobacco executives is going to be a little more crowded.

    Here’s something else I don’t understand.

    I keep reading that people in the US automobile industry are worried that improved mileage standards will hurt the car companies and cost jobs.

    I don’t get it. What jobs? And why?

    If the US automobile industry banded together on a major project to create a car that would, say, get a minimum of 50 miles per gallon, and did so with the same kind of dedication and declaration that President Kennedy brought to sending a man to the moon, wouldn’t this create jobs? If there were some sort of incentive – like a multi-million dollar prize – wouldn’t this get all the country’s great minds working on a solution that would both address the environmental problem and help address the issue of energy dependence on foreign and sometimes unfriendly governments?

    Maybe I’m wrong. Maybe I’m naïve. But this seems more a matter of will than anything else.

    I have a great, great book for you to read.

    “Opening Day: The Story Of Jackie Robinson’s First Season,” by Jonathan Eig.

    This strikes me as a meticulously researched and entertainingly written account of the 1947 Brooklyn Dodgers, and of Robinson’s trials and tribulations becoming the first black man to play major league baseball. The characterizations - of Robinson, Branch Rickey, Pee Wee Reese and the rest – are compelling, and the story is remarkable. Sometimes heartening, sometimes sad, and with an ending that is troubling because it is not entirely happy.

    I’ve long thought that Jackie Robinson was one of the most important people of the 20th century, and Eig’s wonderful book did nothing to dissuade me. And now, when I wear my battered old Brooklyn Dodgers cap, I do so with a little more knowledge and insight into what that cap symbolizes.

    Because of my travel schedule, I will have to watch the season finales of both “24” and “Heroes” via iTunes next week.

    And I will watch “Heroes” first, because this season it has been far more entertaining than “24.”

    “24” isn’t a lost cause, but it does require a fresh approach. It even offers a lesson to retailers – go back to the same well too often, and eventually it is going to run dry.

    Also on the TV beat…

    Last night’s “CSI” season finale was genuinely creepy.

    And next Tuesday night, I’m looking forward to Tom Selleck’s latest adaptation of a Robert B. Parker novel, “Jesse Stone: Sea Change,” the fourth movie in which he plays the alcoholic police chief of a small and troubled New England village. The first three were top notch, and I expect no less from this one. (Of course, I’m going to be depending on the DVR for this one, too, because of my schedule. Ah, well…)

    Here’s an idea somebody ought to work on: live radio that works like TiVo, with the ability to go backward at will to listen to something you want to hear again, or just missed.

    Wine of the week: the 2004 Woodthorpe Cabernet/Merlot blend from the TeMata Estate in Hawkes Bay, New Zealand.

    One word: Yummmmm…..

    That’s it for this week…
    KC's View:

    Published on: May 18, 2007

    The timing of next week’s MorningNewsBeat and emailed Wake Up Calls may be a little weird, because on Monday I’ll be filing from London, and the rest of the week I’ll be filing from Amsterdam, where I’ll be speaking and moderating Spar International’s annual summit. I’ll do my best to make sure things are out on time , but I hope you’ll be patient with me.

    Here’s the added bonus (I hope): after four days in Amsterdam, next week’s “OffBeat” ought to be interesting…

    Have a great weekend.

    KC's View: