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    Published on: August 7, 2007

    by Michael Sansolo

    Not many of us are prone to cheering for new laws, but every now and then one comes along we should consider in a new light.

    For example, the locality I live in, Montgomery County, Maryland, (motto: Yup, we’ve got a law for that too!) has a new idea with some merit. The county wants restaurants to start listing ingredients and nutritional information in easy to find places for patrons.

    Now I’m certain that my home county, which is famous for studying the same road project for 20 years, will find a way to make this complex beyond belief. Yet the idea is actually one we should all be pushing despite the dislike of most legislation. Consumers tell us health and wellness has become one of their biggest worries. They have connected the simple logic that what they eat can lead to how they weigh (and feel). And while their dieting strategies might be lacking, their concern and anger is not.

    Here’s the intersection with supermarket interests. For years (decades actually) supermarkets have lost an increasing share of meal time to eating out. We’ve all known for a while that half of food dollars are now spent outside the home and we actually cheer the lack of further erosion. What’s worse, the younger the shopper the more ingrained the culture of eating out. The battle for the future is worrisome beyond belief.

    The battle for meal time and health and wellness has to be fought on two fronts. The first is the proverbial level playing field. Shoppers want and get nutrition information in the store on everything they buy. It’s easy to find, easy to read and fairly easy to understand. Improvements are always possible, but honestly it is pretty good. Let’s make sure the same shopper who has become radicalized about trans fats in the supermarket know what they are getting when they sit down at a restaurant for an 8 ounce burger with cheese and fries. It might not change meal time completely, but it certainly couldn’t hurt. In that light, Montgomery County (this time at least) may not be off base.

    Then supermarkets have to continue to build on the really impressive efforts being made to win that same shopper back to the supermarket aisles. This too doesn’t get talked about enough, but the work on meal solutions type products is really impressive. Food quality and taste is up, the diversity of menus is growing and the theater of prepared foods is constantly improving throughout the industry.

    So many steps can be taken by simply applying some new ideas and thinking. This came across to me during a recent visit to a new Harris Teeter store, which really does a superlative job on meal products. This store features an incredible array of food prepared choices, geared to different times of the day. In truth, the scope might be beyond many retailers or might be wrong for your shopper base.

    But the simple ideas in the store certainly could be mimicked. For instance, on prepackaged egg salad, Harris Teeter took the little step of just adding to the label the brand name of mayonnaise used. That’s a small step that could be taken on so many prepared products in virtually every store.

    It’s not very profound, but it sends a message to the shopper that the products we use are the products they use. It reminds them that our concerns about nutrition are the same as theirs. And that we are all in this together.

    I’ll say this for the industry. While we’ve been at this issue longer than Montgomery County has been trying to build that one road, we’ve made way more progress. But that may not be the best benchmark either.
    KC's View:

    Published on: August 7, 2007

    The Sacramento Bee reports on the growing trend toward take out food, noting that the NPD Group says that the average American ate 208 meals prepared outside the home last year, and that the National Restaurant Association (NRA) says that Americans spend 48 percent of their food dollars on restaurant food, up from 25 percent 50 years ago.

    According to the story, “Fast food still dominates takeout -- it makes up as much as 70 percent of a typical McDonald's business -- but demand for to-go meals has grown for national players such as franchisor Applebee's International Inc. and Brinker International Inc.'s mid-range brands: Chili's Grill & Bar, Romano's Macaroni Grill and On the Border Mexican Grill & Cantina.

    “Takeout now accounts for about 12 percent of business for restaurants with receipts averaging $10 to $23 per person, the so-called ‘casual dining’ segment.” And the NRA expects that number to grow. A lot. Especially as wireless and mobile technology makes the act of ordering easier, and the younger generation of consumers demonstrates its facility with such tools.
    KC's View:
    The short message here is that the supermarket may be flirting with irrelevance, if not extinction.

    Read Sansolo Speaks, above.

    And then think about how to compete with these guys.

    I hate to raise an issue on which I got shellacked pretty good last week, but it has to be pointed out that by selling gift cards for these restaurant locations, or branded frozen or packaged products carrying their logos, supermarkets are only giving them further credibility, visibility and possibly sales. Some will argue that this is the only way for supermarkets to get a piece of their business, but if this is true, then the war is already lost.

    “Compete” is a verb, dammit.

    Published on: August 7, 2007

    Publix Super Markets announced yesterday that seven popular antibiotics will be available at no charge for people with valid prescriptions. The free antibiotic, according to the company, will be made available to customers regardless of their heath care coverage and will be provided in up to two-week supplies.

    The prescription antibiotics available under the program include:

    • Amoxicillin
    • Cephalexin
    • Sulfamethoxazole/Trimethoprim (SMZ-TMP)
    • Ciprofloxacin (excluding ciprofloxacin XR)
    • Penicillin VK
    • Ampicillin
    • Erythromycin (excluding Ery-Tab)

    “At Publix, we’re working hard to develop a complete health and wellness program,” said Charlie Jenkins Jr. “From the nutrition information in our stores to the services in our pharmacies, Publix is committed to the health and wellness of our customers. I’m pleased that we can make this program available and use it to further serve the needs of our customers and their families.”

    Publix estimates that the now-free antibiotics account for almost 50 percent of generic, pediatric prescriptions filled at the supermarkets’ pharmacies.

    The program reportedly mimics one already begun by Meijer in the Midwest.
    KC's View:
    In a game of “can you top this?”, it makes sense that the only way to beat Wal-Mart’s cheap generic drug program would be to give them away.

    It used to be that people were satisfied with a free lollipop. Now, they’re going to expect free antibiotics.

    What I don’t quite understand, and what I suspect could worry consumers, is exactly how all this works. On the one hand, all we hear about is how expensive the US health care system is and how so many people can’t get appropriate care. On the other hand, some retailers are offering cheap or free drugs, other chains are opening inexpensive health care clinics, and one can only wonder what the next health-related innovation will be.

    It begins to sound like, depending on where you live, health care is both highly available and pretty inexpensive.

    Which I would think this sort of dents all the various health care arguments being made by people running for office.

    But as I say, I’m not sure how this all works. But neither do most consumers, and they may well be as confused as I am.

    Published on: August 7, 2007

    The US House of Representatives has voted 237-18, with most Republicans abstaining, to pass a $90.7 billion funding bill requiring the US Food and Drug Administration (FDA) to come up with a plan to revamp the nation’s food safety procedures and then implement the plan by July 2009. The bill also mandates that a Country of Origin labeling (COOL) program for beef, pork, mutton and goat be in place by October 1, 2008.

    The GOP members of the House refused to vote on procedural grounds, claiming that the Democratic majority was trying to muzzle debate.

    The bill now goes to the US Senate. However, President Bush has said that he will veto the bill if it is passed by the Senate and ends up on his desk; the administration argues that the bill is too expensive and restrictive, and does not give it enough latitude to operate in a variety of areas.

    President Bush named a working panel – largely made up of Cabinet officers – to evaluate the nation’s food safety apparatus and report back to him by mid-September.
    KC's View:
    It isn’t surprising that the White House would object to a bill that essentially preempts the President’s working panel.

    Frankly, I don’t care whether the Republicans or the Democrats win the day on this one – as long as the result is a bill that works, that both makes the system more efficient and effective, and that puts science and safety above political and commercial concerns. Actually, a pretty good argument could be made that no political body or administration is capable of creating legislation and a revamped food safety system that meets these criteria…but we can always hope.

    Then again, as Benjamin Franklin once said, “He that lives upon hope will die fasting.”

    Published on: August 7, 2007

    The Grand Rapids Press reports that as Spartan Stores spends as much as $20 million to upgrade the 20 Felpausch supermarkets that it acquired earlier this year for about $38.5 million, it also will consider rebranding the units as either D&W Fresh Markets or Family Fare Supermarkets, two other banners owned by Spartan.

    Spartan reportedly is very happy with the increased business done by remodeled D&W stores; it acquired D&W’s 20 stores earlier this year for $45 million, and then closed four of the units and began a remodeling program that eventually will cover all of the remaining stores.
    KC's View:

    Published on: August 7, 2007

    • The Washington Post reports that during a campaign visit to Boone, Iowa, former New York City Mayor and current Republican presidential nomination contender Rudy Giuliani decided to stop at a Wal-Mart. He reportedly was looking for a book by Pakistani President Pervez Musharraf (not in stock), but settled for two boxes of power bars, and a junior-sized football to play with on his campaign plane.

    Giuliani said during the visit that he had always supported big box stores while he was mayor of New York. “ I always liked big box stores," he said. "I think they bring the prices down.”
    KC's View:
    I’d like to know, just for the fun of it, when the last time was that Giuliani did some actual shopping in a Wal-Mart or any other big box store. Y’know, real, actual shopping. Not sending out an aide or one of his wives to run an errand for him. But actually crossing the Hudson River to New Jersey (because despite his support, there aren’t any actual big box stores in Manhattan, which is where he lives) to go pick up some shirts or garden supplies or even some food. Not that doing such shopping ought to be a prerequisite for running for president. I’d just sort of like to know.

    I’d also like to know how many Wal-Mart’s in the US actually stock “In the Line of Fire: A Memoir” by Pervez Musharraf. Just a rough count. (To be fair, you can buy it on Wal-Mart’s website for $17.74, a $10.26 discount off the list price.)

    Not sure why I just flashed on this, but I remember when another New York City mayor, Ed Koch, was running for governor of New York, he all but destroyed his chances when he made a derogatory remark about how people from upstate were reduced to shopping at Sears for gingham dresses and the like. It’s a pretty good bet that Giuliani won’t make the same mistake.

    Published on: August 7, 2007

    • Rite Aid has announced that it will expand the GNC store-within-a-store concept from the 1,275 currently operating to more than 2,000 by the end of 2014. The nutrition center boutiques will largely be added to Brooks and Eckerd stores acquired by Rite Aid, according to a report in Drug Store News.

    Crain’s Chicago Business reports that McDonald’s Corp. will sell its Boston Market chicken chain to private-equity firm Sun Capital Partners Inc. Terms of the deal were not disclosed, but the deal is expected to close in just a few weeks.
    KC's View:

    Published on: August 7, 2007

    • Evian Natural Spring Water has announced the appointment of Elio Pacheco, a 14-year veteran of Groupe Danone, as President and General Manager of Evian North America.

    At the same time, Jeff Caswell, Evian’s former Senior Brand Manager, has been promoted to Vice President of Marketing of Evian North America.
    KC's View:

    Published on: August 7, 2007

    We got a number of emails yesterday about the new Amazon Fresh program being tested in the Seattle marketplace.

    MNB user Mark Collier wrote:

    I agree with you on the credibility of Amazon.com. I use them regularly. I don't believe, however, that the perishable delivery idea will fly. Even if it’s Amazon. I can't imagine customers, when we are talking so much about food safety, are going to allow someone to pick out their grapes, peaches, and New York strips and then deliver them via a delivery van and trust that product enough to feed it to their families.

    If you’re right, then the whole idea of online grocery shopping is doomed. But I don’t believe it is. I think it is just getting started, and that our kids are going to embrace it to an extent we can’t even imagine…because they don’t even remember a world without Amazon.

    MNB user Mike Spindler wrote:

    Amazon’s entry into this market has some interesting differences from prior efforts, specifically WebVan.

    The full, online grocery business has of course, never gone away. While certain e-tail specialist folks (Peapod and Fresh Direct) get occasional press treatment, most of the business today is done by area grocers who offer online shopping as an additional convenience to the grocery consumer. Folks like Safeway, Albertsons, Kroger (King Sooper specifically), D’agostino, Harris Teeter, Lowes Foods, Shoprite, Raley’s, Brookshire and many other national and regional grocers, and scores of Independents offer full online grocery shopping with either delivery or with at-store pickup. This business has grown significantly over the years, despite the well publicized WebVan implosion, and same store sales increases are very significant double digits if the retailer puts any oomph behind the service at all.

    Drug stores too (Drugstore.com, CVS.com, Walgreens.com) take a significant bite out of business that used to go through the local corner Walgreens or CVS pharmacy.

    The primary differences for Amazon from Webvan are, near as I can tell, three:

    1. Amazon has a brand name, familiar to all. Webvan had no real reputation to work from or risk when it entered a market. It (Webvan) built a local reputation using big marketing dollars and green-fielding the effort from scratch. Amazon has millions of customers to which it can appeal with some understanding of that consumer.

    2. Amazon has distribution centers which are already cost-covered, by other merchandise sales which flow through them. Webvan had to cover the cost of each distribution center pretty much on the basis of the groceries it sold without having any base of business. Groceries do generate a very slim margin in a traditional supermarket environment. However, the gross margins, if fixed costs are covered, and if you can generate other basket building business whilst you are at it, are not inconsequential.

    3. Pickup stations are much less expensive to operate than delivery vans. If you can get the consumer to stop by and pick up their order at a convenient location, you don’t spend 1=2=1 labor, nor gas nor equipment. Some grocer’s have known this for years.

    The technology guys who have been at the forefront of this movement are, as one would suspect, not the big technology companies but small, fast growing, never heard of firms such as MyWebGrocer on the application side, and Gladson which supplies the critical product content, for just about anyone in this particular space.


    It should be noted, in the interest of full disclosure, that Mike Spindler is the CEO of Gladson and the former president of MyWebGrocer…and both those companies have been sponsors of MNB. Which I think means that he knows what he’s talking about, even if he does have a rooting interest in promoting the online side of the grocery business.

    Another MNB user wrote:

    The most interesting thing about their variety of sources is the potential part played by the local "best in breed" vendors. Local sourcing has been one of the responses to the concerns about food safety and ingredient uncertainty. Admittedly, local sourcing will be more expensive, but people who shop at Whole Foods have already shown a willingness to pay more for peace of mind. It may be that Amazon.com is seizing on a topical issue in the grocery world to build a niche.

    Excellent point.



    We also got a number of emails about the hiring by Cerberus of deposed Home Depot CEO Bob Nardelli to run Chrysler. My comment yesterday:

    It is a pretty safe bet that Nardelli is going to have a big paycheck that will not be related to his performance. Of course, if he does well he’ll have a really, really big payday…but this doesn’t seem to be a guy who believes in pay-for-performance, especially when it comes to his own job.

    It’s ironic – when Lee Iacocca took over Chrysler in 1978, he took the enormous salary of $1 a year. He eventually got rich, but it was after he turned the company around. While the company’s circumstances may not be quite as dire as they were in 1978, things aren’t good for Chrysler…and one has to wonder if Nardelli – someone with no experience in the auto business – is the guy to turn things around.

    One suggestion to the folks at Cerberus. If the name Larry Johnston comes up in discussions with Nardelli, cut your losses. Fast.


    MNB user Gary R. Loehr chimed in:

    You left out the other possible outcome of Nardelli taking this job. If he is a disaster, he will still get a really big paycheck. You can bet that he already negotiated his exit package.

    MNB user Mike Griswold wrote:

    This news is disappointing to say the least. Based on some recent announcements, I thought Cerberus was a better judge of talent. Nardelli’s arrogance and management style are the last thing the auto industry in general and Chrysler in specific need.

    And another MNB reader summed it all up:

    Another reason not to buy a Chrysler!

    To be fair about this, there was one report – in the Los Angeles Times this morning, based on a “source” and unconfirmed – that Nardelli took the job but will earn a salary of just $1 per year until he turns the company around. If that’s true, then my opinion of Nardelli will change a little bit … even though the circumstances of his departure from Home Depot may have forced him to accept such a deal if he wanted to have any credibility.




    On another subject, MNB user Elizabeth Archerd had some thoughts about the ongoing debate about whether Whole Foods should be allowed to acquire Wild Oats:

    Always left out of the Whole Foods/Wild Oats/FTC story - whether for good or bad - is the third largest network of stores dedicated primarily to natural and organic food: the consumer co-ops. Consumer-owned cooperatives not only survived the silly 70s and constant attempts by both national media and retailers (John Mackey once blogged that we all died out in the 70s) to ridicule our past, we are thriving. There are hundreds of consumer-owned cooperatives, many working together and moving many millions of dollars of natural, locally-sourced and organic products.

    We are competitive. Whole Foods made us do some things better than we used to (thanks for that) and they can never offer what we do: consumer ownership.


    Again, full disclosure: Elizabeth Archerd is Member Services Director for the Wedge Co-op in Minnesota.




    I wrote yesterday that the new botulism-related recall will probably just increase calls for increased government oversight of the food industry, which led one MNB user to write:

    Just what we need, more incompetent/political oversight by the government who cannot handle the BSE issue. Right on.

    I agree that it can’t be the same method of oversight. But something has to change.




    Yesterday, MNB wrote that the Economist had an interesting story, citing a new study by JWT suggesting that the six million Muslims living in the United States “are, on average, richer and better educated than the general population. Two-thirds of Muslim households make more than $50,000 a year and a quarter earn over $100,000; the national average is $42,000. Two-thirds of American Muslims have a college degree, compared with less than half of the general population. Muslim families also tend to have more children. So the perception that marketing specifically to Muslims is not worthwhile would appear to be wrong."

    According to JWT, food, finance and packaged goods are the three consumer markets most affected by Islamic law. The global halal market is worth some $580 billion annually. In America an estimated 16% of sales in the $100 billion kosher industry comes from Muslims who lack adequate halal options. Manischewitz, the leading maker of kosher foods, has already spotted an opportunity. Last year it launched its first campaign under the theme ‘Simply Manischewitz’ designed to reach out beyond Jewish customers.

    I commented: The broader point here is that we live in a more diverse and pluralistic society than ever before, and retailers need to understand that both their customers and their employees may look, act and think differently…and will have to begin to cater to those differences. Is there a mainstream, major supermarket chain in this country that has a section for Muslim or halal food? If so, I’m not aware of it. But then again, I’m not even exactly sure what halal means, and I wonder how many retailers understand it … These are the kinds of leaps that we’re all going to have to make. These folks aren’t just going to be our customers and co-workers. They’re also going to be our neighbors and our friends.

    Which led MNB user Mary S Pollack to question my use of tenses:

    THEY ALREADY ARE (our neighbors and friends)!!! And how lucky we are to know them as individuals.

    Good point.

    Another MNB user wrote:

    Wait a minute Kevin; Muslims are buying kosher foods to meet their religious diet? I’m confused; this has to be the ultimate example of irony here … now if we could only get them to set down to share a meal together.

    I know; that caught me off guard, too.

    Just another example of how food, and the act of consumption with friends or enemies, actually can go a long way toward creating community and understanding.




    I got a lot of email yesterday about my “Sports Desk” story that mentioned Alex Rodriguez’s 500th home run and Tom Glavine’s 300th win, while pointedly ignoring another “record setting” home run hit by a member of the San Francisco Giants who has, I believe, sullied the game and the milestone through the use of steroids. Almost everyone who wrote in approved of the way I wrote the piece…but one MNB user, it is fair to say, just didn’t get it:

    Is the reason there are so many ways to earn a "record" in baseball is so that everyone gets a chance to feel like they have accomplished something? I would say that quite often when I'm watching baseball on TV the announcer always brings up how close one of players is to reaching a "record" in baseball history. I'm not knocking the players accomplishments, but it seems like a player could earn a record by being only the 98th player in history to trip over his right foot, bang his head into the wall and still catch a fly ball in left field (okay, that's a bit of an exaggeration, but you get my point). By the way, who does keep track of all of that information?

    You’re right that baseball, more than any other sport, seems captivated by statistics; I’ve actually never been a big stats guy, and for the most part can’t remember players’ numbers, names,, stats or teams. One of the wonderful things about baseball is that you can love it for the stats (my 18-year-old son is one of those who can rattle off the batting averages of every minor league player in the Mets system), or you can love it for the beauty and leisurely pace of the game, the strategy and the challenge involved in playing it, and even, yes, for the hot dogs and beer that go with it so well on a hot summer night. You can love it because even when you couldn’t talk to your father about anything else back in the seventies, you could always talk about baseball.

    Or, you can love it for the same reasons that Terrence Mann, played so memorably by James Earl Jones, did in “Field of Dreams” (1989):

    “The one constant through all the years, Ray, has been baseball. America has rolled by like an army of steamrollers. It has been erased like a blackboard, rebuilt and erased again. But baseball has marked the time. This field, this game: it's a part of our past, Ray. It reminds of us of all that once was good and it could be again. Oh... people will come Ray. People will most definitely come.”

    And that’s about the best I can explain it.
    KC's View: