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    Published on: February 12, 2008

    The Financial Times> reports this morning that Wal-Mart, in a trademark application, has published the logo it plans to use for the new “Marketside” small-store, food-driven format it plans to begin opening this summer in the Phoenix region. According to the FT story, the logo “includes the word ‘marketplace’ in lower case green lettering, adjacent to a stylised pile of pile of fresh food items.”

    Expectations are that the new “Marketside” stores will be about 15,000 square feet, about half the size of the 130 Neighborhood Market stores that Wal-Mart has opened around the country, but that never have gotten the kind of broad rollout that many expected. In the Phoenix area, at least some of the stores seem to have been located on sites that will put them in direct competition with Tesco’s new Fresh & Easy small stores.

    FT writes: “Wal-Mart has played down the significance of the new format, arguing that the stores represent another variation on its existing neighborhood market format. However, the stores are widely expected in the industry to reflect a new, more focused approach to developing its own private-label fresh and prepared foods, as part of a broad push by Wal-Mart to improve its performance in the grocery business.”

    KC's View:
    Best I can tell, the name “Wal-Mart” isn’t included in the “Marketside” logo … which at the very least would be a marked shift for the world’s largest retailer.

    From all reports, the biggest problem that Wal-Mart has had with its Neighborhood Market stores has been ROI…it has been unable to generate the same numbers in those stores than in its Supercenters, which has led the company to focus on the latter format…in part because stock analysts like ROI.

    The betting here is that Wal-Mart has figured out the ROI issue with these small stores…and that the battle about to take place between Wal-Mart and Tesco will be a bruising one. Add to that the fact that Safeway is developing its own small store format, slated to be tested in California later this year…and we have the potential for a small revolution taking place in how food retailers sell, and even the way that food shoppers shop.

    Published on: February 12, 2008

    by Michael Sansolo

    Food safety advocate Nancy Donley made a point recently that bears repeating. Donley, who lost a child to a food borne illness, says a remarkable change has happened in the food safety wars. The change is about people.

    At one point, she said, consumer groups blamed industry for all the problems in food safety. Industry, in turn, blamed consumers for poor food handling at home. “We said the enemy was the industry and the industry said the enemy was the consumer. Now we agree that the enemy is the pathogen.” That is why Donley is now part of Cooperating for Food Safety, a joint group of industry and consumer groups looking for solutions to food safety problems.

    As Donley points out, the two sides don’t agree 100% of the time, but they agree enough to make real progress.

    It’s an example that bears repeating, but it won’t be easy.

    Here’s another example. Last week I wrote a column about the need for the food industry to recognize that information is becoming as important to consumer satisfaction as having the right products, the right prices and the right solutions. However, I began the column with a story about information in which I used genetically modified organisms as an example. I could have written “red” or “purple” food to make the point, but I wrote GMOs. I didn’t say they were good or bad, just that there are polarized and partially informed views about them.

    And immediately I got e-mails about the evils of GMOs. Well folks, that ain’t the point.

    Luckily, a Texas professor far more eloquent than I am actually wrote a similar article the same day for the New York Times. The professor, James T. McWilliams of Texas State at San Marcos, wrote about a recent news conference about cloning and food products at which a government official essentially said cloning technology was beyond questioning, which McWilliams correctly found to be a vast exaggeration. The resulting problem, he said, is that opposing groups feel necessary to match the rhetoric with pronouncements of “Frankenfoods” and such.

    McWilliams’ point is that instead of educating and talking about these new technologies, we instantly run to the extremes and discussion dies. He likened food technology to the most divisive issues in our society today in their ability to immediately split the opposing sides to extreme positions, which helps almost nothing.

    The similarity to polarized viewpoints on food safety bears consideration. As with most issues, there is rarely an all or nothing answer. There is room for discussion, for education and possibly even for growth.

    We’ve been down this path before and we have the results. Consider this: in the current issue of Men’s Health, which runs interesting food stories in nearly every edition, there is an article about the hazards of eating hamburger thanks to E. coli 015:H7. Along with examining why incidents of food safety rose in the past 12 months, the article outlined steps on how to build a safer burger.

    The first suggestion is about the benefits of eating irradiated foods. Here’s the problem though: Because irradiation was seen as such an off-putting and divisive word, the entire technology never took off to the level possible. It only worked when innovative retailers like Wegmans took the risk to explain why irradiation made sense and used it as a way to sell ground beef, not to avoid it.

    The challenge facing the industry is to recognize the very real concerns shoppers have that science may not make everything better. Shoppers have history and experience that teaches them that science can make mistakes and needs to be questioned.

    So the challenge is how the industry can begin educating. A change in tone may make even the most skeptical consumers believe that their concerns matter, that their fears are real and will be respected.

    Or we can just keep fighting.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

    KC's View:

    Published on: February 12, 2008

    The Wall Street Journal reports this morning that Safeway “is embarking on a new policy that will elevate animal welfare as a priority when buying the meat and eggs that line its shelves.” According to the story, Safeway “is ‘actively looking’ to increase the amount of poultry it buys from producers that use ‘controlled-atmosphere stunning,’ an ostensibly more humane method of killing birds that uses gas rather than the more common method of electricity and a mechanical blade. It also will increase the amount of pork from suppliers that are phasing out gestation crates to confine sows, which are perceived by some to be too cramped. Also, Safeway will increase the quantity of cage-free eggs it sells from about 3% of overall egg volume to 6% over two years.”

    Brian Dowling, vice president of external affairs at Safeway, tells the Journal that “the changes generally won't mean higher prices for consumers -- in part because the company is making sure the changes will be done in a ‘careful, thoughtful way.’ Still, most producers that change production practices have to spend millions of dollars installing equipment and retrofitting factories, and that could affect prices.”

    The Journal notes that “the changes come as animal-rights groups People for the Ethical Treatment of Animals, or PETA, and the Humane Society are turning up the heat on food producers and food retailers.”

    KC's View:
    Not to suggest that Safeway or any other retailer will or should raise prices as they institute these sorts of programs, but since prices on almost all food products are going up anyway these days, this would seem to be the right time to charge more for so-called ethical foods.

    It also seems to me that at some point a basic premise has to be tested – whether people will spend more for products that they deem to be ethical.

    Abraham Lincoln, whose birthday happens to be today, once said, “When I do good, I feel good; when I do bad, I feel bad. That's my religion.” But doing good, doing the right thing, often has a cost … and people need to be willing to pay it.

    Published on: February 12, 2008

    The Financial Times> reports this morning that Supervalu has made internal communications a high priority as it integrates Albertsons’ operations into its own since its acquisition of more than a thousand Albertsons stores in 2006.

    Supervalu CEO Jeff Noddle tells FT that “the communications effort included a hotline for employees, a monthly video-conference to all staff and newsletters ‘almost every other week’. Some of the material was focused around Supervalu's statement of ‘core values’ and how it translated into employee benefits, compensation and diversity.”

    Says Noddle, “I don't think Albertsons talked about those kind of things … We've taken time to explain what we're doing. We're working really hard on that. Showing them the options we had and saying this is why we did what we did.”

    FT writes: “Mr. Noddle says a survey of staff last summer was broadly positive - about 80 per cent said they thought the merger would benefit the consumer. But the survey, with 36,000 responses from a workforce of 190,000, also prompted the company to redouble its efforts to set out the rationale for change.”

    KC's View:
    We often talk about transparency as being a key value when communicating with consumers … but there is no question that transparency also is a key value when it comes to dealing with employees.

    Published on: February 12, 2008

    MNB has been reporting about supermarkets that have made the decision not to sell tobacco products, a list that includes three former Stop & Shop stores operated by ShopRite Supermarkets of Cherry Hill, New Jersey, as well as Wegmans, Andronico’s, and DeCicco Markets, a six-store family-owned chain that operates stores north of New York City.

    Yesterday, we received an email pointing out yet another grocer to be added to the list – Dorothy Lane Markets of Dayton, Ohio.

    KC's View:
    To repeat yesterday’s comment … 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.

    I’ve gotten a lot of emails on this issue questioning whether this somehow is a shortsighted or even hypocritical decision by these companies, since at least some of them sell alcohol and all of them sell products containing fat.

    But the comparison is specious, I think. It can be fairly argued that of all these products and ingredients, tobacco is the only one engineered to addict and, eventually, kill you. For retailer working to encourage a connection between good food and good health, selling tobacco may actually violate and subvert the essential value proposition … which never makes sense.

    Published on: February 12, 2008

    Published reports say that a consent decree has been signed by News America Marketing In-Store and the Minnesota Attorney General’s office, resolving a case in which Insignia Systems – a developer and marketer of in-store advertising products and programs - charged that News America Marketing violated laws protecting competition and laws prohibiting commercial disparagement. The State of Minnesota joined in the suit.

    News America reportedly has agreed not to make any representations to any CPG manufacturer or other customer or potential customer regarding Insignia’s compliance rates prior to a specified date, not to disparage any of its competitors, and not to violate Minnesota’s statutes prohibiting commercial disparagement.

    News America also agreed to pay the State of Minnesota attorneys’ fees and costs. The court reportedly will maintain jurisdiction for ten years to take action if News America violates the decree.

    KC's View:
    News America has long been accused of being predatory and anti-competitive in its business practices, so this isn’t a surprising story.

    What really worries me that is that the same company that owns News America also now owns the Wall Street Journal. Actually, it doesn’t worry me.

    It scares the hell out of me.

    Published on: February 12, 2008

    In an indication of the kind of food safety issues affecting Chinese producers and manufacturers, the New York Times reports about how a caterer working for the US Olympic Committee found a 14-inch chicken breast in a Chinese supermarket last year…and when he tested it, found that it contained so many steroids that an athlete who ate it would have tested positive for performance-enhancing drugs.

    The Times reports: “In preparing to take a delegation of more than 600 athletes to the Summer Games in Beijing this year, the U.S.O.C. faces food issues beyond steroid-laced chicken. In recent years, some foods in China have been found to be tainted with insecticides and illegal veterinary drugs, and the standards applied to meat there are lower than those in the United States, raising fears of food-borne illnesses.

    “In the past two years, the U.S.O.C. has tried to figure out how to avoid such dangers at the Olympics. It has made arrangements with sponsors like Kellogg’s and Tyson Foods, which will ship 25,000 pounds of lean protein to China about two months before the opening ceremony, but will hire local vendors and importers to secure other foods and cooking equipment at the Games.

    “The bulk of that food will be served at the U.S.O.C.’s training center at Beijing Normal University, about 20 minutes from the Olympic Green, where for the first time United States athletes will have access to their own facility providing three meals a day. The dishes served will be compliant with the U.S.O.C.’s overhauled diet plan, placing a greater emphasis on nutrition, which officials hope will boost athletes’ performance.”

    KC's View:
    This story may be bad news for US Olympic athletes, but it could be very good news for Roger Clemens. When he goes before Congress this week to talk about charges that he used steroids, now all he has to do is say, “I never used any needles or used steroids on purpose…but there was that Chinese chicken I used to eat before playing in important games.”

    This wouldn’t be so far-fetched; after all, didn’t Wade Boggs eat chicken before every game during his entire career? (Maybe that was a steroid deal and we never suspected…)

    One other note. The USOC may be able to provide good food for its athletes, but providing breathable air is likely to be an entirely different challenge. In China, the air is almost as chewable as the chicken.

    Published on: February 12, 2008

    The Los Angeles Times reports that the California Supreme Court has ruled that six supermarket chains – including Kroger, Safeway, Costco, and Albertsons – must face consumer lawsuits charging them with having sold farm-raised salmon that was artificially colored to resemble wild salmon.

    Farm-raised salmon is naturally gray in color; wild salmon tends to be pinkish. (Actually salmon-colored…but describing it that way would be redundant. And repetitive.)

    According to the story, “The justices unanimously overturned lower court rulings that threw out deceptive-marketing lawsuits over the fish .. The suits say the use of color additives should be disclosed on the package's label. The companies counter that federal law doesn't require such disclosures and that Food and Drug Administration labeling rules precluded lawsuits based on state-law claims … Consumers contend that by coloring the salmon, the grocery chains are trying to pass off farm-raised fish as wild fish, which sell at higher prices. They also contend that the artificial coloring agents pose a health risk.”

    KC's View:

    Published on: February 12, 2008

    The Wall Street Journal reports that Starbucks has signed a deal with AT&T that will allow it to offer free wireless Internet service to some of its customers.

    “The move comes as the Seattle chain is trying to improve the experience customers have inside its stores and as competing restaurants and cafes increasingly are offering wireless Internet access for little or no cost,” the Journal writes.

    “The deal will give AT&T's roughly 12 million broadband customers unlimited free access to wireless Internet service at more than 7,000 Starbucks cafes in the U.S. People who have a Starbucks card, a loyalty card that customers load with money to pay for purchases, will get two hours of free wireless Internet service a day starting this spring. Otherwise customers will pay $3.99 for a two-hour session, or they can buy a monthly membership for $19.99 that will include access to any of AT&T's other hot spots world wide.”

    KC's View:
    This is a good start. But if Starbucks really wants to improve the customer experience, it ought to simply go the way of many other retailers, such as Panera and Cosi, and just offer free Internet. It’d be a big statement…and even though some free Internet is better than none, it does seem as if Starbucks is being too cute by half.

    Published on: February 12, 2008

    Just FYI…I will be flying to Amsterdam in The Netherlands tonight, arriving there tomorrow morning in time to attend the annual CIES Global Food Safety Conference, where I’ll be showing a video I produced as well as moderating a panel of US retailers talking about food safety issues.

    If all the connections work, posting MNB on time tomorrow morning shouldn't be a problem…and the time differences shouldn’t prevent MNB from being posted for the rest of the week. However, if there are glitches beyond my control, I thank you in advance for your patience and understanding.

    KC's View:

    Published on: February 12, 2008

    USA Today this morning reports that “soaring energy costs may be roiling the financial markets, but world governments are also being rattled by a more basic form of inflation: sky-high food prices.

    “Pakistan is stockpiling wheat and using its military to guard flour mills. Indonesian consumers have taken to the streets to protest rising soy prices. Malaysia no longer lets people take sugar, flour or cooking oil out of the country. North Dakota, the top U.S. wheat-producing state, may import from Canada due to tight supplies … Soaring demand, rising oil prices and government-mandated biofuel use have sent many commodity prices to their highest levels in history. The impact is hardest in the developing world: The United Nations says increasing prices will make it tougher to meet international goals of reduced hunger. Rising prices are squeezing food aid budgets that were already falling far behind growing need caused by war and increasing weather disasters. Worse, soaring costs are adding to political instability in countries such as Afghanistan, where flour prices are up more than 60% in the past year, and as much as 80% in some areas.”

    • In upstate New York, WKBW News reports that a Wegmans employee working at the chain’s Williamsville store has contracted hepatitis A, prompting county health officials to warn shoppers who may have purchased and consumed certain kinds of produce from the store.

    Wegmans reportedly pulled all produce from the store and has been placing automated phone calls to shoppers identified as potentially at risk.

    According to the story, “Not everyone is affected by this scare. Only shoppers who purchased produce after January 7, 2008 and ate that produce raw since January 26, 2008 could be affected. People who fall into that category should consider seeing a doctor and/or getting vaccinated. Erie county officials are telling people tonight not to panic. So far the Wegmans employee is the only one with hepatitis A and they want to keep it contained to just that one person.”

    • The Minneapolis / St. Paul Business Journal reports that Target Corp. “will launch two store prototypes this year that are larger than existing Target stores, are green certified and add more space for food and electronics.”

    USA Today reports that “the Food and Drug Administration is considering whether to remove salt — also known as sodium chloride — from its list of foods categorized as "generally recognized as safe," or GRAS.

    “Salt ‘is the single most harmful element in the food supply, even worse than saturated fat and trans fat, or food additives and pesticides,’ says Michael Jacobson, executive director of the Washington, D.C.-based Center for Science in the Public Interest.”

    KC's View:

    Published on: February 12, 2008

    Got a number of emails reacting to yesterday’s story about a piece in the Vancouver Sun suggesting that Wal-Mart deserves to get the Nobel Prize for the opportunities it provides to millions of people, the affordable products it makes available to millions of consumers, and its approach to charitable giving, sustainability and the environment.

    MNB user Guy P. DiCenzo wrote:

    Not only are the aforementioned items correct, the efficiency of their supply chain and the fact that consumers don't have to make multiple trips to different stores to buy all the goods they need has saved the world more energy than any left leaning interest group.

    Another MNB user wrote:

    Save money, live better.

    Another MNB user wrote:

    While I am a big fan of Wal-Mart, I could find even more compelling reasons to give other retailers the prize as well. Sure there is a long list of reasons to give Wal-Mart the prize, but I could make a similar list for Publix, Wegmans, Hy-Vee, and Aldi to name a few.

    I wondered aloud yesterday if the Sunpiece was tongue-in-cheek…which led MNB user Rick Heineman to write:

    If you read the article you can see that it is not tongue-in-cheek. Wal-Mart is clearly both good and bad based on the subject and your point of view. It is a mistake to have an opinion without understanding the issue from all sides. As retailers you can consider Wal-Mart an enemy from a competitive point of view, but you must consider all sides in order to win.

    I only meant tongue-in-cheek in terms of it being unlikely that a retail would be given such a prize…and especially the part where the Sun suggested that sainthood might be appropriate. Which prompted one MNB user to write:

    While sainthood is reserved for individuals and not corporations, it would seem to be that this saint would be named Sam, posthumorously of course.

    I’m not sure if he meant posthumously or really meant to coin a new word, posthumorously. So I decided to leave it the way he wrote it.

    Because posthumorously is a great, great word. I hope that’s how people think about me when I’m gone.

    KC's View: