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    Published on: September 11, 2007

    “Fundamental changes” in the way products being imported into the US are inspected are being recommended by the Cabinet-level working group charged by the Bush administration with addressing a rash of safety issues that have cropped up in recent months, according to a story this morning in the New York Times.

    The most profound change, the story suggests, is to deal with safety issues before products ever reach the US by building safety mechanisms and testing procedures into points of vulnerability where items are manufactured.

    “The group recommended preventing problems by building safety into manufacturing and distribution, intervening when risks were identified and responding quickly after an unsafe product made its way into the country,” the Times writes. “Such risk based approaches have been embraced by private industry and some federal agencies as better and more efficient ways to ensure product safety. The Agriculture Department, for example, uses this approach for meat inspections.”

    Critics of the report – which President Bush mandated had to be issued within 60 days of the date on which he created the panel – said that it was long on generalities and short on specifics. Michael O. Leavitt, the secretary of the Department of Health and Human Services (HHS) as well as chairman of the working group, said that more specific recommendations will be made in November, after the public has had a chance to comment on the initial findings.

    "One way to think about this is that our current strategy is really a snapshot at the border," the Los Angeles Times quotes Leavitt as saying. "We're recommending a change that would create a video, in essence, through the entire process."
    KC's View:
    Now, to be fair, I haven't read the report. Just the Times coverage.

    But I have to say that the results are simultaneously disappointing and utterly unsurprising. I said back in July that I couldn’t imagine that a group of cabinet secretaries with a lot of other things on their plates would be able to solve the import safety problem in 60 days, and that the whole thing sounded more like a political maneuver than anything else.

    If indeed the report says that the best way to import safety problems is to build greater risk-based safety precautions into both manufacturing facilities and distribution procedures…well, I could have told them that back in July.

    What Americans want to know, I think, is why this hasn’t been done all along. Why weren’t imported toys being tested to see how much lead was being used in their paint? Why wasn’t imported toothpaste being tested to see what it was made of? How come pet food wasn’t being tested to see what ingredients wee really being used?

    And then come the follow-up questions.

    Telling the Chinese government, for example, that their manufacturing plants have to meet US safety standards and need to be inspected by us on a regular basis could have political implications, and the US government could have t make some hard choices between such inspections and appeasing a foreign government we need to remain friendly. What will we do in such a case?

    And who, ultimately, will have the responsibility? Private enterprise or government? If it is to be the government, what will it cost? Will the Administration and the Congress appropriate the kind of funding necessary to make it work? (This is a government, by the way, that wanted to shut down testing facilities in the interest of efficiency.)

    These are extraordinarily complicated issues, and simplistic responses won’t cut it. Ultimately, I can't help but think that pretty much everybody in Washington, regardless of party, hopes that the string of import safety issues subsides and that consumers start worrying about something else.

    Published on: September 11, 2007

    Interesting piece in the Wall Street Journal this morning about a new company called Cellfire that “lets cellphone users sign up for mobile coupons that offer discounts on products ranging from CDs and DVDs to fast food.” Consumers signs up for the service, which emails coupons to the user’s cellphone; when patronizing a participating retailer, the shopper simply shows the coupon as displayed on his or her cellphone screen to the cashier or checkout person, who then applies the discount.

    While not available yet, the implication is that at some point people will be able to email the coupon to the cash register, making the process even more seamless.

    “The firm has linked up with about 200 marketers, including entertainment and fast-food shops such as Virgin Megastores, Hollywood Video, Domino's Pizza and Quiznos Subs,” the Journal writes. “For the right to send mobile coupons, the marketers pay Cellfire an upfront fee and additional subscription rates if the number of cellphone subscribers to their coupons increases. Cellfire has separate arrangements with major cellphone carriers such as Verizon Wireless to ensure its coupons are available through their services. The companies declined to discuss the terms of these arrangements.”
    KC's View:
    My first reaction to this story is that it almost certainly should increase coupon redemption rates. It certainly shouldn't hurt.

    But where I think this has to go is a system that puts the consumer in far greater control of the process. I would never sign up for a service that would allow a marketing company to send me whatever coupons they wanted o, even if I had a fair expectation that they’d only send me demographically appropriate coupons. I ma be part of a (rapidly aging) demographic group, but I don't want to be treated that way. No, I want a far more customized experience, and I want to be able to control it myself.

    The Journal concedes this point: “One big challenge for marketers contemplating cellphone advertising is to figure out how much and what kind of advertising will be tolerated by consumers. While marketers have long felt little compunction about saturating airwaves, print media and billboards with advertising messages, they are conscious that some consumers feel cellphones are personal space.”

    I’m frankly fed up with the saturation approach to advertising. (I’ve made that clear enough with my various criticisms of CBS’s supermarket-related ad strategies over the past few days.) And I have a feeling that younger people – who are far more used to the notion of controlling their experiences because of their facility with technology – will be even more adamant about not being inundated with stuff they don't want and that is, quite frankly, irrelevant to them.

    Relevance, customer control and at least the illusion of individualized strategies are key to making all this work in the future, I think.

    Published on: September 11, 2007

    by Michael Sansolo

    In the never-ending battle to create differentiation in the marketplace, Hannaford Bros. gets a gold star. Or maybe two or three.

    A year ago, Hannaford took a big chance with its Guiding Stars program. In retrospect, the program looked like a sure winner by highlighting healthier product choices to a population that is growing increasingly concerned with how they eat. Remember though that success always looks like a sure thing when considering it in retrospect.

    Let’s also recall that many sure things become anything but. The economic turbulence of the past year could have easily overwhelmed the Hannaford program if consumer choices became more price-based than usual. And let’s not forget how many healthier products have shown only marginal success when shoppers desire for a healthier lifestyle didn’t translate into checkout lane bonanzas.

    Hannaford took a chance and consumers responded by taking Guiding Stars and its suggestions very seriously. As Hannaford told MNBin an exclusive interview, starred products widely outperformed their competitors. Hannaford’s suggestions helped shape shopping and buying and the program is now set to grow.

    Differentiation is the constant buzzword of the industry these days. Of course, differentiation also means taking a chance that your shoppers will like what you have decided will make you special. There are countless examples of store designs, format and products that didn’t make the cut. Figuring out value is anything but clear-cut.

    A big part of the problem is that shoppers can be so wonderfully contradictory. The same shopper who will complain loudly over a five-cent rise in the price of one product will eagerly spend that additional money and more on a product they see as providing a special value. (Otherwise, someone explain the lines for coffee at Starbucks.)

    Yet there are tools to understanding shoppers. The World According to Shoppers, a study released in 2004 by the Coca-Cola Retailing Research Council of North America, is one such tool. It examines the different mindsets that might move a customer to choose one store or another and how those mind sets change between shopping trips. The bottom line of the study was simple: be something or be nothing, but make sure that whatever you choose is what your customers want. And make sure it is something you do better than the competition. The study can be found at (Full disclosure time here: I am a member of the Coke Council through my work at FMI.)

    But the study can only take us so far. We all have to stay up on the changing goals and desires of shoppers that now translate into their choices in so many ways. What’s unthinkable one day might be perfectly valid the next.

    I saw a powerful example of this during my recent trip to Australia. Sydney’s major morning newspaper reported that about eight percent of Australians were willingly spending more money to sign up for environmentally friendlier energy. The cost for an Australian family opting into this new program ranges from $50 to $400 per year.

    Now clearly, eight percent could easily be explained as reaching a small, but committed audience with the financial power to absorb the cost. However, the lesson is just as profound. People are spending more for a cause they believe in.

    We all know it will happen again. It might be issues of health, environment, politics or any other cause that strikes at the heart of a shopper. It might be an issue we don’t even see yet or one that no one can articulate. But it’s coming and the question that should be asked inside every company is pretty simple: How are we going to shoot for the stars?
    KC's View:

    Published on: September 11, 2007

    In Pennsylvania, the Patriot-News reports that a new 132,000-square-foot Wegmans is shaping up as new and formidable competition in the Harrisburg market for Ahold-owned Giant Food, which dominates the food business there. Giant got aggressive even before Wegmans opened, lowering the prices on 10,000 items at about 20 area stores. And the expectation is that Giant will continue to fight back against Wegmans, refusing to go down quietly in the face of such impressive competition.

    Indeed, Giant has experience with competition, with Weis Markets being a tough competitor in many communities. Dennis Curtin, a spokesman for Weis tells the Patriot-News that when it has competed wit Wegmans in the past, it has fared "very effectively" in terms of prices, convenience of locations and the quality of its private-label offerings.
    KC's View:
    My first reaction to this story was that lowering prices may not be the best way to fight against Wegmans, since that isn’t necessarily what that legendary retailer is known for.

    But then I thought back to the time I had a chance to moderate a focus group near Washington, DC, that was made up of people who shopped at Wegmans regularly. We wanted to find out what they liked best about Wegmans. The fresh foods? The sales help? But it ended up that almost to a person, they said they liked the prices.

    This astounded me, until I drilled down a little bit. They said that in center store, they found the grocery prices to be highly competitive. In fresh foods, they said, they got s much more value for the money that they considered the prices to be excellent.

    This was interesting, because that’s not how I would have interpreted an endorsement of Wegmans’ prices. You say you like the prices, I immediately think “cheap.” But that’s not how consumers necessarily think…and we al have to be willing to drill down to find out what really matters to shoppers.

    You can bet your bottom dollar that Wegmans knows. The question is whether Giant has done the same kind of research. If it is, the battle in Harrisburg ought to be very interesting.

    Published on: September 11, 2007

    Sesame Workshop, producers of the longtime children’s television series “Sesame Street,” has joined with and the nonprofit organization Nemours Health and Prevention Services (NHPS) to create a new program called the “Healthy Habits for Life Child Care Resource Kit.”

    The kit comes in both English and Spanish and is designed to help child care programs “establish a foundation of healthy habits during the early years,” according to a statement released by the partnership.

    The kit includes lesson plans for teachers, specific activities and handouts, recipes, take-home materials for parents, and a DVD and storybook using the “Sesame Street” characters t make the point about god nutrition. Sesame Workshop also is offering sponsorship opportunities to companies looking to associate themselves with the program.
    KC's View:
    Actually, I’ve rethought my headline for this story. The thing is, Cookie Monster is probably the right character to be teaching kids about nutrition, about intelligent indulgence and the need for balance in one’s diet. I just hope they also have Elmo…who always was sort of my favorite as my kids were growing up.

    Published on: September 11, 2007

    The New York Times reports that PepsiCo is spending about $25 million to launch a new Quaker product called Quaker Simple Harvest, which is “an instant, multigrain hot cereal, made from whole grain rolled oats, whole grain rolled wheat, rolled barley and whole grain rolled rye.” The company is emphasizing the “all natural” nature of the product in its marketing and packaging, even though, as the Times notes, virtually all of its oatmeals are made up of natural oats.

    The reason? One ad expert says that Quaker needs to make the point loudly because there are so many niche brands that are making noise about their all-natural characteristics; even though Quaker dominates the segment, its message could be lost if it doesn’t mark its territory with clear, unambiguous language.

    “This is tapping into an important and big opportunity for our business going forward … simpler foods with less complex ingredients,” Dave Kimbell, marketing director for Quaker breakfast products, tells the Times.
    KC's View:
    Actually, I think it makes sense to trumpet the beneficial qualities of oatmeal, even though they are well known. I happen to be one of those people who eats various kinds of oatmeal four or five days a week from October through April, always topped with fruit, and always one of those things that helps get MNB done each morning. (Together with the requisite two or three cups of Starbucks, of course.)

    I knew that oatmeal is good for me, but I frankly didn’t think much about it beyond that. There’s nothing wrong with reminding people like me that we’re actually doing something intelligent if we eat oatmeal on a regular basis, and remind people who don't eat oatmeal that they’re missing an easy opportunity for a smart nutritional decision.

    Published on: September 11, 2007

    The Minneapolis Star Tribune reports that Supervalu plans to spend some $1.2 billion revamping old stores and building new ones during the coming year – but that it is doing so by relying “on census data, sales records and a grocer's knowledge that we don't all shop the same way.

    “It's not just new shelves and shining up the meat counter. There's little left to chance in the layout of a grocery store. Aisle widths, product placement, wall colors and lighting all play a role in sales.” And Duncan MacNaughton, Supervalu’s executive vice president of merchandising and marketing, tells the paper that there’s one central goal: “We want the food to pop … We want the store to disappear.”

    The Star Tribune writes: “Remodels certainly aren't new at Supervalu. But they have become increasingly sophisticated.

    “The company has nearly completed construction of a test store a mile from its Eden Prairie headquarters to experiment with store layout, lighting and design, the first such venture in company history. The test store also houses a kitchen for development of Supervalu private label foods.

    “To know their customer, the folks at Supervalu use everything they can get their hands on. Surveys they conduct themselves, data they collect through loyalty cards (which give discounts to those enrolled and have become popular in other markets but not so much in the Twin Cities), census data that show ethnicity, income levels and education in the surrounding community, and records that show what's selling.

    “This is what it knows. Supervalu's primary customers are women, 25 to 54 years old, with children. And shoppers generally fall into one of seven types, according to Supervalu, including the convenience shopper, the luxury shopper who looks for gourmet products, the cooks, the healthy shopper, the aspiring shopper who wants to cook but doesn't know how, the deal-seekers and the one-stop shopper who does everything all at once.”

    And here’s another key insight: “Instead of just building bigger stores, the company has begun a new focus on the food, with signs explaining the nutritional values of peppers, for example, and butchers coming out from the back of the store to stand behind meat counters and interact with customers.”
    KC's View:
    Good piece, and good for Supervalu doing what is necessary to try to reinvent the shopping experience.

    I would only make one observation. Supervalu’s primary customers may be women, aged 25-54, with children. But I’d be spending an awful lot of my time talking to people between the ages of 14 and 20 to find out about their shopping habits…which certainly are dramatically different than those of older generations. Some of these habits will change as they become adults, but some of them will not – they could have wildly different expectations about the food shopping experience, and we all have to figure out how the industry has to change to meet them.

    This is a generation that does not remember a world before, before 500 channels, before cell phones, before TiVo. It is probably fitting, especially today, to suggest that they don't really remember a world before 9-11.

    I don't necessarily think they are going to come to us. We have to go to them.

    Published on: September 11, 2007

    • In San Francisco, the 9th Circuit Court of Appeals has ruled that Judge Jeffrey S. White of the U.S. District Court for the Northern District of California acted appropriately when he granted Albertsons a preliminary injunction allowing it to use the “Lucky” brand name that Grocery Outlet claimed it had abandoned.

    In making its original claim, Grocery Outlet branded a single store as Lucky. Since disputing the Grocery Outlet claim, some Albertsons stores have been sold to Save Mart, which is rebranding some of them as Lucky.

    The case now returns to Judge White for further – and, presumably more permanent – action.

    Forbes reports that on Monday, the US Food and Drug Administration (FDA) held a meeting for “food companies, trade groups, watchdog organizations, medical experts and its overseas counterparts to share how front-label symbols, like the ‘traffic light’ system used in Britain, can improve public health.

    “The FDA stressed the meeting was a preliminary step as it considers whether to establish a national symbol system. Any action is likely years away - and, even then, any system is likely to be voluntary.”
    KC's View:

    Published on: September 11, 2007

    • PriceSmart, which owns and operates U.S.-style membership shopping warehouse clubs in Central America and the Caribbean, reports that its August sales increased 22.9 percent to $75.5 million from $61.4 million in August a year earlier. For the twelve months ended August 31, net sales increased 20.8 percent to $869.1 million from $719.6 million in the same period last year. August same-store sales were up 22.5 percent, and annual same-store sales were up 20.1 percent.
    KC's View:

    Published on: September 11, 2007

    Anita Roddick, who founded The Body Shop and pioneered an environmentally friendly approach to manufacturing and retailing long before it was chic, died last night of a massive brain hemorrhage. She was 64.
    KC's View:

    Published on: September 11, 2007

    MNB reported yesterday that CBS is continuing its efforts to target supermarket shoppers and get them to watch its network programming.

    Last week, CBS acquired SignStorey, the digital display company with flat-screen televisions in more than 1,400 US supermarkets, for $71.5 million. And yesterday, we noted that Advertising Age was reporting that “after inscribing laser-coded CBS logos and slogans last year on more than 35 million eggs to promote its fall schedule, the network is staking out new territory at local supermarkets around the country … labels touting CBS’ new prime-time lineup are expected to appear on packaging and containers available at supermarket deli counters. So your half-pound of sliced honey ham could bear a label that tells you to be sure to tune in for CBS shows such as “Viva Laughlin,” “Cane,” or “Two and a Half Men.”

    According to the story, “The promotion involves the printing and distribution of millions of coupons and labels to thousands of grocery stores nationwide, including Safeway, Albertsons and Price Chopper, among others. CBS said 70% of shoppers frequent the deli, meat and seafood section of their supermarkets, which means its food labels will have the potential to snare attention.”

    I have been, to say the least, cynical about the CBS efforts, suggesting that once again it puts retailers in the real estate business, willing to sell almost anything for a buck even if it diminishes or dilutes the shopping experience. Which I think it does.

    MNB user Annette Knapp seems to think I am overreacting:

    Just yesterday, I was going through the blue envelope of ValPak coupons that comes in the mail regularly and imagine my surprise that one of the inserts was the CBS fall television schedule. I literally said "what the heck?" when I saw that. It got my attention.

    Yes, but will it change your viewing habits?

    More importantly, the ValPak envelopes are designed to be vehicles for a wide range of promotions. I’m not sure that the supermarket should be in the business of promoting non-related and ultimately irrelevant experiences and products for a buck. (I might feel differently about the ad programs, by the way, if the Food Network were involved…because I’d see the connection. But Charlie Sheen?

    MNB user Chuck Kilgore wrote:

    I'd be more concerned with CBS allowing Chuck Lore (Two and a Half Men's producer) to insert his philosophical, social, semi-political etc. views and opinions onto the viewing screen at the end of the show. Some of these are pretty radical and or bizarre. These are seen when using TIVO or a DVR and freezing the action.

    I always thought those were a joke.

    Another MNB user wrote:

    Other buyers within have stated that CBS has been after General Mills for a couple of years to strategically place the CBS symbol on the front of the Cheerios box and use the side panel for fall line ups. If they put them on eggs ...

    But hey, a quick nickel is better than a promised dime these days. The Mrs. was in a mall over the weekend and was given an iPod thing that she could wear while shopping in a certain store, it played a commercial free (almost) episode of 'Sex in the City', and kept her in the store about 30+ minutes longer than she said it would have normally done, and of course the wallet is a bit lighter as a result...only ad was for some summer clearance and info on the hot colors for fall winter...I wonder...if I'm in Home Depot on Saturday and ESPN was on some LCD monitors instead of DYI.. would I hang out a bit longer?.....maybe...

    Another MNB user wrote:

    The average person in bombarded by advertising in this country. ENOUGH. I do not ever want audio advertising while shopping anywhere. I do not shop with a list for weekly grocery trips. My mind is focusing on the items I need, the quality of the products and produce, pricing, what should I buy for the next meal and finally getting into line, placing items on the belt in the way I want them to go into the bags (refrigerated items together, canned goods together, crushable items last, etc.) I will block out any audio messages to the best of my ability because my mind is full of things I need to have there. This is why I prefer self-check out. I can concentrate on what I am doing rather than getting involved in conversation with the checker.

    Also, I do not wish such intrusions to reach me at the gas pump or in a restroom (I have had such experiences). It is enough that my relaxation in front of the TV is constantly interrupted with repetition of mindless commercials, some of which I must watch several times to figure out what they are advertising (if I am that interested, which is rare). It is distressing to think that companies are given tax breaks to annoy the public like this. Put out a sample of a new product so I can taste it or try it, put up an interesting display of a new item to cause me to pause to look, but do not assault my senses to make the shopping process more difficult. In addition, background music is too stimulating on any level.

    There are several chain restaurants whose food is appealing to me, that I will not visit because their music (not even something I would chose to listen to) is so loud I cannot block it out of my mind. I value my sanity, and quiet to enable thinking is a big part of that.

    Another MNB user made an excellent point:

    If the grocery chains say they promote bringing the family back to the table for dinner, advertising TV shows isn’t the best way to do it.

    You’re right. And this really is the issue.

    Getting the family back to the dinner table (where they presumably will eat more food sold by supermarkets) is supposed to be the industry’s long-term strategy. At least, it should be.

    Selling ad space to CBS is a short-term tactic, and it violates the essence of the strategy. And yet companies put out their hands, accept the checks, and don't understand why this doesn’t make sense.
    KC's View:

    Published on: September 11, 2007

    In a Monday Night Football doubleheader, the Cincinnati Bengals defeated the Baltimore Ravens 27-20, and the San Francisco 49ers beat the Arizona Cardinals 20-17.
    KC's View: