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    Published on: September 26, 2007

    The East Bay Business Times reports that UK-based Tesco has added some 48 locations – in Riverside and San Bernadino counties - to its plans for a Southern California rollout, in addition to the 50 previously announced units in Southern California, Las Vegas and Phoenix/Scottsdale.

    In addition, Tesco now is saying that it plans to expand into Northern California and the San Francisco Bay Area, possibly as soon as early 2008.

    The Tesco stores, called Fresh & Easy Neighborhood Markets, are scheduled to begin opening in November. While the company has played its cards close to the vest, it is known that they will be about 10,000 square feet, will emphasize healthy and nutritious foods, and will feature proprietary brands as well as fresh and packaged, prepared “convenience” driven products. To this point, Tesco seems to be interested in a range of demographic locations, choosing inner city locales as well as upscale suburban neighborhoods.

    Tesco’s desire to localize its offering is seen in an interview run by with its group IT director, Colin Cobain, who says that “Technology is an important part of the international growth strategy. What we want to do is create a common suite of processes and systems that we can use in all of our countries. To do that what we've started off in the US - where we're due to launch later this year - we're building a suite of integrated processes and systems that will enable us to run that business. We'll have common processes and systems but the offer to the customer will be very local. It will not look like it does in Cheshunt (the company’s UK headquarters) or Korea. It will be a very specific offer for that group of customers and that's really important for us.”

    Cobain also suggests that by being choosy and focused, Tesco actually is able to spend less on technology than other retailers of its size. “We try not to spend money on things which don't add value and then we can actually invest wisely in things which really improve our processes and deliver competitive edge,” he says.
    KC's View:
    You have to figure that Tesco has its folks on the ground researching possible expansion not just in Northern California, but also in places like Sacramento, Portland, Seattle, and Denver. I wouldn’t be surprised if they’re also looking at some Texas locales, though that would take real guts because of both HEB and Whole Foods. And I’d also guess that Tesco has a pretty specific game plan for how it might roll out stores in other regions of the country, like Chicago, Boston, or Washington, DC and Baltimore.

    These folks are not wallflowers, and I’d expect them to move very fast if the first stores gain traction quickly.

    Published on: September 26, 2007

    Reuters reports that there is a collection of studies in the current American Journal of Preventive Medicine suggesting that not only is there no easy answer to the problem of childhood obesity, but that “environmental factors and policies conspire to challenge the health of children in America.”

    In essence, the premise is that American kids don't really stand a chance. There is a plethora of television advertising for less-than-healthy products. The foods they are served in school are often marginally nutritious, at best. Time-stressed parents often rely on convenience foods – whether from fast food restaurants or convenience stores – to feed their children. And, because of school policies that have sometimes eliminated physical education from the curriculum and a cultural climate that often leads to kids sitting at the computer or the television, young people simply don't get nearly enough exercise.

    It is a kind of “perfect storm,” says one of the study’s authors, Frank Chaloupka, an economics professor the University of Illinois at Chicago, “that will continue to feed the childhood obesity epidemic until we adopt policies that improve the health of our communities and our kids.”
    KC's View:
    I think this is a fair assessment – not a wildly surprising one, but fair.

    The question is, what do you do about it?

    The easy answer – and the one that most of us would prefer – is to say that parents have to do a better job of raising their children. If they cooked more and made sure that the family gathered around the table for dinner more often, and then went out and shot hoops or went bike riding with their kids, then maybe there would be less to worry about.

    I also think parents have some institutional responsibilities – to force schools to serve better foods, teach nutrition and cooking, and hold gym classes; to vote for candidates who support things like the creation of bicycle lanes on streets and the development of parks so that there are more options. And maybe even support the idea of restricting hat kinds of ads are shown on kid-oriented television programs; while a parent can restrict TV time, I’m not sure there is anything wrong with asking companies – whether food manufacturers or television networks – to be responsible about how they use the airwaves.

    It also is hard to apply easy answers to complicated issues. For example, definitions are very much in play from a legislative perspective, as they often are once one crosses the Beltway into Washington, DC. (“It depends on what the definition of ‘is’ is.”)

    The Washington Post this morning writes that “in an attempt to limit the sale of high-calorie sodas, candy bars and other snacks in schools, Sen. Tom Harkin (D-Iowa) has introduced has introduced a bill that would have the government set new nutritional standards for the foods and drinks that schools sell to students outside cafeterias. But just what those standards should be is the issue. Public health advocates want the standards to ban the sale of Gatorade and Powerade, which typically contain as much as two-thirds the sugar of sodas and more sodium, as well as sweetened waters such as VitaminWater and SoBe Life Water. Excessive sodium intake by young people could fuel a surge in high blood pressure, which until recently was considered a health threat only in later life, they said.”

    Nothing is easy. One can expect this debate to go on for a one time, especially because there will plenty of lobbying on both sides of the issue.

    This is a big problem, and it requires a holistic, multi-faceted and consistent approach. We can’t do much about the weather, but this is a perfect storm over which we can exert some influence and control.

    Published on: September 26, 2007

    The Arizona Republic reports that a new survey by iCrossing Inc. says that “39 percent of online adults make purchases on the Web at least once a month, up from 30 percent two years ago.” In addition, the story says, “Some 49 percent of those surveyed said they look for customer product reviews and evaluations, up from 40 percent two years ago. Blogs, which just 4 percent of shoppers consulted two years ago, more than doubled in popularity to 10 percent of shoppers now.”

    And, the Republic reports, “Some 70 percent said they now also search for Web sites from which to buy, up from 54 percent two years ago. And 56 percent use the Web to find a local store, up from 43 percent previously … Some 21 percent buy $501 to $1,000 worth of goods and services online annually, compared with 16 percent two years ago. The share of people spending less than $100 a year shrunk, while the share of those spending $101 to $500 held steady at about 36 percent.”
    KC's View:
    I’ve said this before, but I’ll say it again. There are a lot of companies out there doing demographic and psychographic research among adults between the ages of, say, 20 and 45…but they really ought to be talking to kids between the ages of 13 and 18, because these are the target customers of the very near future, and they are going to have vastly different acquisitional habits from people just a few years older than them.

    Published on: September 26, 2007

    The Wall Street Journal joins the chorus of media outlets reporting on the opening of the new Publix GreenWise store in Palm Beach Gardens, Florida. (MNB reported on this weeks ago, and it seems like everybody in Florida has carried a story about the format, which Publix describes as “the future” and what it has to do to remain competitive.)

    For Publix, the Journal writes, “it's the next step in trying to capture more of the fast-growing organic food segment after it started selling organic and natural products under its GreenWise brand eight years ago. The store “carries meats with no added hormones and a produce section that has 50% organic products compared with roughly 10% in conventional stores. It will also have hundreds of other products not available in conventional Publix locations.

    “Publix also hopes to appeal to health food buffs and gourmands with prepared foods like Italian stuffed shrimp, low carb mashed cauliflower and Japanese-style tempeh. The prepared fare also includes an Asian fusion hot bar with vegetarian options, cold salad bar, a gelato and organic coffee bar, a Mediterranean pizza oven and a grill and carving station.” As well as Oreos and other mainstream offerings, of course – Public hopes to differentiate itself from the likes of Whole Foods by having a broader selection that will appeal to more shoppers.
    KC's View:
    The question, I guess, is whether the typical GreenWise shopper will find the combination to be inconsistent and jarring, or will welcome it as particularly sited to his or her needs. I’d bet on the latter…but only time will prove if Publix is right in placing its bets on GreenWise.

    Published on: September 26, 2007

    The Pioneer Press in Minnesota reports that the trial has begun in the class action suit brought by four women against Wal-Mart, accusing the retailer of forcing them to work through breaks and off the clock, without pay, before and after their sifts.

    According to the story, “Four women brought the case on behalf of 56,000 current and former Minnesota employees of Wal-Mart Stores Inc. All of them at one time worked for either Wal-Mart or Sam's Clubs but claim they were not properly paid for hours worked in violation of the Minnesota Fair Labor Standards Act.

    “Attorneys for the workers said in opening statements before Judge Robert King Jr. that they have collected more than 1 million documents, including time records, internal memos and timekeeping audits Wal-Mart conducted on its own. Their witnesses will include store workers, high-level executives, store managers and regional and district managers. The nonjury trial is expected to go for months.”

    Wal-Mart declined to make an opening statement, and said that it would present its case once the workers have completed theirs. The retailer has lost a couple of similar cases elsewhere in the country, and is facing a number of others, according to press reports.
    KC's View:

    Published on: September 26, 2007

    The New York Times> has a piece this morning addressing the battle between cork and screw tops in the wine industry.

    “Given the maddeningly random problem of wines contaminated by cork taint, it’s easy for consumers to wonder why the entire industry has not moved to screw caps,” the Times writes. “Sure, some people will always prefer corks for aesthetic reasons and because of tradition. The ceremonial flair of uncorking a bottle has yet to find its counterpart in an unscrewing. And while it’s not yet clear how age-worthy wines will evolve under screw caps, the question remains: Why would anybody want to risk corked wines?”

    There is at least one good reason, the Times suggests – a little process called “reduction”:

    “Winemakers battle endlessly with air. In general, they want to protect their wine from too much exposure to air in order to prevent oxidation. That is why wine bottles are filled nearly to the brim and then sealed.

    Yet a little bit of air can be a good thing. A chardonnay, for example, can be protected from air by covering it with inert gas and aging it briefly in steel tanks. When bottled, it will mostly likely be a straightforward wine, juicy, fruity and crisp. But chardonnay aged in oak barrels will be exposed to the minute amount of air that penetrates the wood, which can add pleasing elements of complexity. It’s all a matter of the winemaker’s goals and the quality of the grapes.

    “Depriving a wine completely of air can produce the opposite of oxidation, reduction. Broadly speaking, reduction is a kind of catchall term for the bad things that can happen in what scientists call anaerobic conditions. Those bad things involve sulfur chemistry and can ultimately include aromas of burned rubber, cabbage and rotten eggs.

    “Yes, screw caps, the good guys in the battle against corked wines, have been implicated in reduction problems.”
    KC's View:
    Last week, the news said that cork actually is a more “green” alternative to screw tops. And now, screw tops apparently are responsible for their own kind of taint.

    The news gets better and better – or at least more encouraging - for those of us who are holding out for cork as a symbol of that which makes wine special.

    Published on: September 26, 2007

    USA Today reports that Wrigley has gotten the American Dental Association (ADA) to give its seal of approval to the company’s Orbit, Extra and Eclipse sugarless gums – the first time chewing gum has gotten the endorsement. The deal is expected to be prominent in future advertising for the brands.

    However, some critics – such as the Center for Science in the Public Interest (CSPI) – suggest that the ADA is essentially selling its authority, and that the deal is a conflict of interest. USA Today reports that “ADA executives say no payment is involved for the seal, but that it charges fees to defray the program's cost. Wrigley paid $36,000 ($12,000 each) to submit the three gums for scrutiny. It will pay a $2,500 annual ‘maintenance’ fee to use the seal.

    “In addition to the fees, Wrigley spent $26,000 to sponsor the program for the ADA's annual meeting this week in San Francisco and $6,000 for exhibit space. Wrigley also has bought $19,000 of ad space in ADA publications and contributed $25,000 to an American Dental Association Foundation health-screening program.”
    KC's View:

    Published on: September 26, 2007

    • The Wall Street Journal this morning reports that “a sharp climb in costs for wheat, dairy and crude oil has forced firms ranging from cereal companies to cheese makers to raise their prices. But while the higher prices have helped keep profits robust, they also run the risk of forcing consumers to buy less or to look for better bargains.”

    • In Canada, Sobey’s reportedly has launched a new line of about 100 kids-oriented products in concert with Disney, targeted at kids between the ages of three and 12. Called Compliments Junior Disney, the brand contains no artificial flavors or colors and no added hydrogenated oils.

    • New Jersey-based Topps Meat Co. reportedly has recalled more than 150 tons of frozen ground beef products that may be contaminated with the E. coli bacteria.

    • Happy Birthday, Pathmark. The company reportedly plans to celebrate the 39th year of its existence with a series of promotions…knowing, of course, that if it is acquired as planned later this year by the Great Atlantic & Pacific Tea Co. (A&P), it won’t be around to celebrate its 40th birthday.
    KC's View:

    Published on: September 26, 2007

    Published reports say that Barry Scher, who has worked for Giant Food for more than four decades and served not just as a spokesman for the company but also as an influential voice within the industry in the area of public affairs, will retire at the end of the month. He will continue to work for the Ahold-owned company as a consultant.
    KC's View:

    Published on: September 26, 2007

    From the Food Marketing Institute…

    “The Food Marketing Institute (FMI) announced today a comprehensive compendium of strategic resources, consumer research and educational events to help the industry implement sustainability programs.

    “FMI’s Board of Directors chartered a Sustainability Task Force in 2006 to help food retailers and wholesalers integrate sustainability into their operations wherever possible and practical.

    “FMI’s announcement came during the September 24 meeting of the task force. ‘Our mission is to help companies chart a course to help preserve the planet through initiatives that make sense economically. The task force has already made considerable progress in creating a platform for food retailers and wholesalers,’ said Bob Garrity, senior vice president of Construction and Conservation at Giant Eagle, Inc., who chairs the 22-member task force.

    “FMI’s sustainability effort is being led by FMI Senior Director Jeanne von Zastrow.”

    From the Grocery Manufacturers Association…

    “The Grocery Manufacturers Association’s (GMA) today testified before the House of Representatives Appropriations Subcommittee on Agriculture, Rural Development, FDA, and Related Agencies regarding its proposal to improve the safety of imported food. On behalf of GMA, Joseph A. Levitt outlined GMA’s Commitment to Consumers: The Four Pillars of Food Safety, a comprehensive proposal designed to protect consumers by strengthening, modernizing, and improving the system governing food imports.

    “’Food producers have an abiding interest in safe food,’ said Levitt. ‘Maintaining consumer confidence in our products, our brands, and our companies is the single most important goal of the food, beverage, and consumer packaged goods industry, and product safety is the foundation of consumer trust. The industry devotes enormous resources toward this goal, and effective regulation and oversight by federal regulatory agencies such as the FDA are critical and complementary elements of the fabric of consumer protection.”
    KC's View:

    Published on: September 26, 2007

    …will return.
    KC's View: