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    Published on: February 11, 2008

    The Dallas Morning News reports that “with meat and milk from cloned animals expected to be allowed into the U.S. food supply in a matter of months, and their offspring already permitted, consumers have two choices. They can ignore the controversy and chow down with abandon, or they can quiz each of their grocery stores, restaurants and dinner hosts about their policy on using food developed with cloning. That's because, unless Congress intervenes, regulators have decided that the products require no special labeling.”

    That doesn’t mean that so-called “cloned food” is going to slip into the food supply without anyone knowing about it. “Wary of consumer backlash, some large grocers and restaurant operators say they plan to shun such products – whether from clones or their offspring – and will make sure their suppliers help them keep that vow,” the Morning News writes. Among them: Kroger.

    "We've already communicated this to our suppliers," Gary Huddleston, a spokesman for Kroger, tells the paper. "The supplier that wants to do business with Kroger is going to comply."

    And, the Morning News writes: “Two Dallas-based companies, restaurant operator Brinker International and Dean Foods, the nation's largest dairy producer, are among those that have established a ‘no clones’ policy for meat and milk from the cloned animals and their offspring. So have national grocers like Kroger and Whole Foods Markets, based in Austin.

    “Wal-Mart, the nation's largest retailer, and Tyson Foods, the biggest beef processor, both based in Arkansas, said they have no plans to buy products from cloned livestock. But when asked about the offspring of clones, Tyson said it does not have a specific position, and Wal-Mart declined to respond to questions.”

    KC's View:
    Could be wrong about this, but I think that specificity and the willingness to answer questions will be the price of entry for companies in the food business. And I continue to believe that some sort of labeling – if not mandated – ought to be allowed by the government.

    The more I hear pro-cloning advocates talk, the more they sound utterly condescending if their references to people expressing concerns about cloned food. It is as if they are the keepers of all knowledge and everyone else is a Luddite.

    Which simply isn’t true. I actually am not against cloning in principle…but I think it is a new technology and that some sort of intelligent, transparent labeling makes sense so that consumers can make informed decision. If this puts the onus on manufacturers to persuade consumers that their products are safe, so be it.

    Published on: February 11, 2008

    USA Today this morning reports that, as previously announced, Trader Joe’s will have eliminated all single-ingredient Chinese imports from its store shelves, citing concerns about food safety that were created by a spate of recalls last year.

    “Trader Joe's stance isn't likely to be widely copied,” USA Today writes. “Major grocers depend on a global market to meet consumer demands for variety. Instead of relying upon blanket bans, retailers say they must choose product sources carefully and check that safety standards are met.”

    "There are good suppliers and there are bad suppliers in any country," says Jeanne Colleluori, a spokeswoman for Wegmans Food Markets, tells the paper, noting that the chain “dropped Chinese garlic last year because of consumer concerns.” However, “sales of other Chinese products, such as frozen tilapia, a fish, have stayed strong, Colleluori says.”

    The paper notes that Whole Foods “says 2% of its private-label items come from China. Like Wegmans, it says it relies on strong sourcing policies to ensure safety.”

    KC's View:
    It is a measure of Wegmans’ reputation that I probably would buy Chinese tilapia from the company … even though the New York Times reported a few weeks ago that at least some Chinese tilapia was being raised in ponds so polluted that they had to be given enormous amounts of antibiotics so they can be kept alive long enough to be harvested.

    Published on: February 11, 2008

    Interesting piece in the Wall Street Journal about a new company called TRA (for "True ROI Accountability for Media") that “merges data from people's cable set-top boxes with consumer-purchase databases, such as the information stores gather from frequent-shopper cards. For instance, a company could see whether households that watched an ad for its toothpaste later bought that brand of toothpaste … TRA is using data from cable boxes to measure second-by-second viewership of TV programs and commercials in 300,000 households in Southern California. The company says it expects to have more than one million households across the country by the end of this year. The company will match that information with data from seven grocery-store chains, with information about more than 12 million households' grocery-store purchases based on frequent-shopper-card data. Those cards track what a consumer buys on each trip, including the brand, specific product, price paid and date and time bought. The information is anonymous -- that is, TRA says it doesn't see the identities of the people in the household.”

    And, the Journal notes, “As the Web's ability to target specific consumers races ahead, TV advertisers, who collectively spend about $70 billion a year in the U.S. alone, are under increasing pressure to demonstrate that their money is well-spent. For years, the industry has searched for ways to better measure the results of ad campaigns. Some services offer estimates of how many people see an ad and are affected by it, but efforts to get more detailed data have been stymied because of the costs of such research, which often includes developing panels and paying households to participate.”

    KC's View:
    Makes sense. If people are going to spend millions of dollars on ad campaigns on the major networks, then it seems sensible to find ways to track whether that money is being well-spent.

    Published on: February 11, 2008

    Crain’s New York Business reports that DeCicco Markets, a six-store family-owned chain that operates stores north of New York City, plans to stop selling tobacco products once its current stock has been sold off.

    This makes DeCicco Markets the fourth retail chain to make such a decision - ShopRite Supermarkets of Cherry Hill, New Jersey, made the same decision last August when it acquired three former Stop & Shop Supermarkets last year, followed by both Wegmans and Andronico’s since the beginning of the year.

    “We want to try to promote health as much as possible,” said John DeCicco Jr., vice president of operations. “It’s a moral decision as well in that we don’t’ want to promote underage smoking.”

    The decision was lauded by the American Lung Association.

    KC's View:
    Again, this isn’t a decision that every chain will make, nor one that every chain should make. But for those looking to make real connections between health/wellness and food, this may well be a decision that will look more and more attractive…even inevitable.

    Published on: February 11, 2008

    The Wall Street Journal reports that in the most recent quarter, Tesco’s market share in the UK dropped slightly from 31.5 percent to 31.4 percent. During the same period, Wal-Mart’s Asda Group saw its market share increase from 16.8 percent to 16.9 percent.

    J. Sainsbury’s market share also dropped slightly, from 16.5 percent to 16.4 percent, and William Morrison Supermarkets saw its share go up, from 11 percent to 11.5 percent.
    KC's View:

    Published on: February 11, 2008

    Interesting piece in the Vancouver Sun suggesting that “Wal-Mart deserves the 2008 Nobel Peace Prize.”

    Why?

    Well, the Sun lists a series of accomplishments that it believes qualify the company for the same prize that has been given to the likes of Jimmy Carter, Henry Kissinger and Anwar Sadat. They include:

    • “Provides employment to 1.9 million people; the best defence against poverty is a job.”

    • “Creates thousands of job opportunities for people in developing countries like China and India; this keeps hunger at bay in many households.”

    • “Doles out hundreds of millions of dollars each year in dividends that help fund the retirement of millions of people; the company had sales in excess of $348 billion and a net profit of $11.3 billion in 2007.”

    • “Sells food, clothing and other necessities to Canadians, Americans and others at prices that are 15 to 25 per cent below what other supermarkets charge; this helps millions of low-income families stretch their dollars.”

    • “Pushes the inflation rate down and helps keep interest rates low; this comes in handy for millions of families when borrowing to buy a house or household appliances.”

    • “Disburses $415 million in cash and in-kind merchandise annually to 100,000 charitable organizations around the world.”

    • “Pursues environmental sustainability; sells more organic produce than most retailers; works with the Clinton Foundation to lower prices on sustainable technologies such as energy-efficient lighting and building materials; has opened the first in a series of high efficiency stores that will use 20 per cent less energy than a typical Wal-Mart. And its proposed Vancouver store is more environmentally friendly than any building in the Lower Mainland.”

    “All of this was made possible by Wal-Mart's innovations,” the Sun concludes.

    KC's View:
    I gather this is tongue-in-cheek, but it is sort of a fascinating view of Wal-Mart.

    The piece also suggests that properly positioned, the Vatican might want to consider Wal-Mart for sainthood…though it concedes that this might be a more difficult goal for the company to achieve, since sainthood only has been given to individuals, not corporations.

    Published on: February 11, 2008

    Reuters reports that Matt Kistler, Wal-Mart's senior vice president of sustainability, told the Clean-tech Investor Summit in Indian Wells, California, last week that Wal-Mart would be willing to pay more for longer-lasting, environmentally friendly products…and would not necessarily pass the cost onto consumers.

    “Bad quality products create waste, and so having tighter standards on the social side, on the environmental side and on the quality side will reduce waste," he said. "We are even willing to pay more for products that have that … we are finding because of sustainability in some cases will more than offset the incremental costs of what we are paying for a better quality item.”

    KC's View:

    Published on: February 11, 2008

    • The St. Louis Post-Dispatch reports that “Aldi, the German discount grocery chain, has chosen St. Louis as the test market for a price-cutting program aimed at bringing in new customers in a weakening economy. Under the pilot program, Aldi will lower prices on more than 100 commonly purchased items at all 38 St. Louis area stores over a nine-week period … This is the first time that Aldi has launched a broad price-cutting program, and if it is successful, it will implement similar tests in other areas of the United States, the company said. The company defined success as increasing sales of the items and attracting shoppers.”

    • The US Environmental Protection Agency (EPA) announced that it has named Stop & Shop and Giant Food as 2007 Energy Star Leaders, recognizing the chains for green-friendly business practices.

    • In the UK, Marks & Spencer said that it plans to open a new, stand-alone sandwich shop next to its Kensington High Street store in London. The move is said by the company to be a way of “extending its presence” in the neighborhood…which saw the opening of the UK’s first Whole Foods store about seven months ago.

    Sandwich stores are a kind of UK specialty, with perhaps the best known being Pret a Manger.

    KC's View:

    Published on: February 11, 2008

    • PriceSmart, which operates warehouse clubs in Central America and the Caribbean, said that its January sales rose 27 percent to $83.3 million from $65.6 million during the same period a year ago. Same-store sales were up 20.6 percent.

    • Family Dollar reports that its January sales increased 2.9 percent to $482.3 million compared to the same period a year ago; same-store sales were off 0.1 percent.

    KC's View:

    Published on: February 11, 2008

    • Schwan Food Co. CEO/president Lenny Pippin resigned from the company last week. He will be succeeded on an interim basis by Greg Flack, who is president of the company’s Global Consumer brands.

    No reason was given for Pippin’s departure.

    KC's View:

    Published on: February 11, 2008

    Roy Scheider, who will forever be known by moviegoers as stalwart Police Chief Martin Brody in “Jaws,” died yesterday at age 75.

    Scheider had suffered from multiple myeloma for several years, and died of complications from a staph infection, according to press reports.

    KC's View:
    While “Jaws” is the movie for which he will be best remembered, there are tons of great Scheider performances in movies like “All That Jazz,” “Marathon Man,” “2010,” “Klute,” “Still of the Night,” “The French Connection,” and even “52 Pickup.” Unfortunately, Scheider’s later career is testament to the fact that most Hollywood stars tend to flame out…the movies he made were generally pretty lousy, but he kept working, best I can tell, because he was an actor, and that’s what he did. And when I’d see him on screen, I always thought there was a kind of integrity and dignity about him, even when the role or the movie didn’t deserve it. I wish he’d worked more and in better projects.

    Maybe it’s because he had one of the great lines ever uttered in the movies: “You’re gonna need a bigger boat.” And here’s the kicker…according to Carl Gottlieb, one of the “Jaws” screenwriters, it wasn't in the script. Scheider improvised the line.

    Published on: February 11, 2008

    MNB user … and MNB-fave … Glen Terbeek had some thoughts about last Thursday’s radio commentary, entitled, “Can Dominance & Innovation Coexist?”:

    Maybe the question is better stated as "Can large centralized organizations (i.e., national retailers) and innovation coexist? I say no. History shows that many companies became dominant because they took a new product/retail concept to market. Unfortunately, they build centralized organizations, focusing only on that product/retail concept, limiting their ability to adapt, let alone innovate. They quickly changed from being dominant to just being large. In retailing, Kmart, Sears, and A & P might be good examples. Wal-Mart might be next!

    In most large companies, the "innovators" are so far removed from the marketplace and so restricted by their functional organizations and the way they are measured, that they can't innovate, they can only improve what they are responsible to do. Therefore most good ideas often emerge at small or startup companies. The big guys only option then is to use their dominance to acquire the innovator, usually at a premium. The Microsoft/Yahoo potential merger that you mentioned is a good example. Microsoft is being challenged by the new and frustrating upstart Google. Why didn't Microsoft "innovate" Internet search in the first place?

    It is interesting that Google allows each employee to spend 20% of their time on independent research, research on any idea that the person believes will add value to Google's business. They then try to sell the concept within the organization and with customers. Now that is a commitment to innovation! Much more than lip service. The emerging new concept of "Clouds" or network computing, is an example of Google employee research, and it is not directly related to Internet search.

    How many retailers would do the same? How many retailers even have a research group looking at the threats and opportunities of the future?

    I know several retailers that clearly dominate the local markets that their individual stores operate in (Wegmans for one, Whole Foods is another). One reason is that the stores are encouraged/expected to innovate and try new things that their local shoppers might want, within the overall brand image of the company. Much of the innovation comes from the people close to the marketplace. In further support, retailers with both corporate stores and franchise stores all readily admit that many of their innovative ideas come from the franchise operators. McDonald's breakfast concept comes to mind. Innovation is more than a package redesign or a store remodel.


    Glen is absolutely right. I was speaking recently with an executive from a bottled water company, and I asked if the company had someone in a room somewhere who was at least thinking about how the company would have to change if, say, plastic bottles ended up being banned for environmental reasons (or just become so politically incorrect that their continued usage didn’t make sense).

    This executive looked at me as if I had three heads…and said no, such an effort didn’t make sense because such a thing could never happen.

    My feeling generally is that executives who use the word “never” are venturing into dangerous territory.

    Remember “Fart’s Law”? The likelihood of an innovation succeeding increases exponentially with the number of old farts who refuse to endorse it.

    Organizations, it seems to me, need to be organized around innovation, not maintenance. For many, this will be an enormous shift in priorities. But one of the comments made by an analyst looking at Microsoft’s bid for Yahoo! stays with me:

    "In a world where users -- not companies -- are continually innovating and upending the business world, creating an ever-larger bureaucracy does not seem like a guarantee of anything.”

    It is customers who increasingly create change in the business world through their demands and needs and desires. Businesses need to start organizing themselves around the notions that everything changes, that everything changes faster than you expect, and that innovation often springs from the most unlikely places.

    KC's View:

    Published on: February 11, 2008

    MorningNewsBeat would like to welcome two new sponsors – the Healthy Foods International Exposition and Conference, scheduled for Dallas on June 18-19, 2008, and the Kitchen ’08 consumer Marketing Summit, which will take place in Portland, Oregon on April 23-24.

    While these two events have different approaches and goals, they share a common theme – how consumer values can be connected to business performance and priorities. This also is an ongoing theme on MorningNewsBeat…and we’re thrilled that the powers that be behind these two summits have decided to use this site to promote their efforts.

    And we hope that you’ll check out both events … because they help to make MorningNewsBeat possible.

    KC's View:

    Published on: February 11, 2008

    Join an intimate gathering of underdogs, mavericks and challenger brands – organizations looking to grow without compromising their values – at the third annual Kitchen Conference.

    Hear advice and observations from New York Times marketing columnist Rob Walker; case studies from Burt’s Bees, KEEN Footwear, Method and Annie’s Homegrown; debates on green washing and standard setting; new research on consumer behavior; and much more.

    Registration is capped to ensure intimate sessions.

    Join us April 23-24, 2008 in Portland, Ore., one of the most sustainable cities in America.

    Register at > http://www.kitchenconference.com

    It’s table talk for smart marketers.

    KC's View:

    Published on: February 11, 2008

    IRI’s annual Reinventing CPG and Retail Summit is the industry’s only broad-based, high-level forum taking a closer look at the major issues facing CPG via the application of cutting-edge content, technologies and best practices.

    Scheduled for March 3-5 at the Gaylord Palms Orlando Resort & Convention Center, the Summit will feature a world-class lineup of general session speakers, including Joan Chow, Chief Marketing Officer, ConAgra; Paul Beahm, Senior Vice President/GM Pharmacy, Wal-Mart; Billy Beane, general manager of the Oakland A's; Cathy Green, Chief Operating Officer, Food Lion; Tom Furphy, General Manager CPG, Amazon.com; and Rob Price, Chief Marketing Officer, CVS Corp.

    And, the 2008 Summit will also feature more than 30 breakout sessions that address today’s most critical business issues. These sessions, led by the industry’s leading domain experts, will feature such topics as “Innovation in Shopper Insights,” “Pricing in Inflationary Times,” “Breakthrough Retail Collaboration Strategies,” and an “Apollo Space Management User Symposium.”

    For more information:

    www.cpgsummit.com

    KC's View: