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    Published on: April 22, 2008

    by Michael Sansolo

    One of my favorite quotes comes from former Secretary of State Henry Kissinger. During a particularly rough time in the early 1970s (Vietnam, Watergate, an Arab-Israeli conflict, the Cold War…) Kissinger said, “Next week there can’t be any crisis, my schedule is already full.”

    Mr. Secretary, we know how you feel.

    Wherever you are reading this today you are probably feeling a little overwhelmed. Inflation is back; economic news is upsetting; competition is raging on; consumers are cranky, food safety requires constant monitoring…fill in your list here. Well, sorry to bother you, but it’s time to think about a crisis about 10 years off.

    Because of simple demographic realities, whatever company you are in is staring at a talent shortage. You probably have been hearing about this with more frequency on the news. The airlines, the military, local governments and school districts—it’s a topic for everyone. The facts are these: Because the enormous post-war Baby Boom generation is closing in on retirement age, the US (and some other countries by the way) are headed for a massive loss of top management, top performers, knowledge keepers and more.

    What that means is that 64 million workers will be eligible for retirement in 10 years and already the government predicts there will be 10 million more jobs than people.

    Luckily, there is a huge generation set to replace us—Gen Y—but the 70 million young people in that cohort are only partially in the work place and many are still in middle school. The real dilemma is that Generation X, the so-called baby bust years, are next in line and their numbers aren’t large enough to replace the Baby Boomers.

    Jeff Noddle, the ever-insightful CEO of Supervalu, talked about this problem at a recent meeting of the Western Association of Food Chains (WAFC). His words bear careful consideration. As Noddle explained, the numbers create a dire situation because more than ever the food industry will be competing for a smaller than ever number of the best and brightest.

    Which means the industry has to quickly get its act together on improving recruitment and retention. (Ok, there is a huge full disclosure statement you need here. I personally worked with Jeff on the plan to switch the FMI show to an education format every other year, beginning in 2009. And I continue to work with FMI on building that new event. Full disclosure aside, if I didn’t write about this issue I’d be doing you a disservice in this column. This is an issue that must not be ignored.)

    This problem won’t be any easier to solve than inflation. The food industry already has a problem with a less than stellar reputation as a place to work. The hours are long and the work can be tough. The industry’s image is constantly (and usually incorrectly) damaged in popular culture. (Mr. Whipple didn’t help us look cool.)

    The challenge we face today (and tomorrow) is finding a way to change all these with incredible speed. We need to improve the image as we train the people we currently have to move up to the higher levels of their companies. We need to sell the image of the industry’s importance as a place to work and in the fabric of every town. We need to emphasize the wonderful diversity of jobs and talents that are used in so many companies.

    In short, we need to get cracking. Over the next few weeks, you are going to hear lots more about the new FMI 2009 event called Future Connect. Because of my personal connection, I won’t comment on the quality of the program and the importance of attending, because I think the event will speak for itself.

    But I can say this, there’s another great historical quote reminding us that Noah didn’t start building the ark when it started raining. Usually, things go best when you act before the storm. That means now.

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

    KC's View:

    Published on: April 22, 2008

    The New York Sun reports that “major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.”

    According to the story, shoppers at Costco stores in places as far apart as Mountain View, California, and Queens, New York, have been frustrated by shortages in certain categories.

    For example, “The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99.” And, the Sun reports, “An employee at the Costco store in Queens said there were no restrictions on rice buying, but limits were being imposed on purchases of oil and flour. Internet postings attributed some of the shortage at the retail level to bakery owners who flocked to warehouse stores when the price of flour from commercial suppliers doubled.”

    One of the demographic groups that seem to be hoarding product – survivalists, “who view the phenomenon as a harbinger of more serious trouble to come.”

    KC's View:
    If this is just a series of isolated incidents that can in part be attributed to a bunch of isolated survivalists, then there probably isn’t too much reason for concern. But if this starts to emerge as a more significant trend, then it is going to be far more worrying.

    Published on: April 22, 2008

    The United Food and Commercial Workers (UFCW) began circulating an online newsletter yesterday entitled, “Who Knew The View from Planet Tesco Was So Different Than Earth?”, in which it contrasted what it said was Tesco’s overly sunny view of its US-based Fresh & Easy business to what analysts have been saying about it.

    The emphasis in the piece is on two issues: 1) allegations that the majority of Fresh & Easy’s stores in Los Angeles, Arizona and Nevada are not meeting sales goals set by Tesco, and 2) speculation about the current 90-day “pause” in store openings that Tesco is saying was planned all along, but that some analysts believe reflects a starker reality about the stores’ inability to attract customers.

    KC's View:
    The UFCW hardly is dispassionate about Fresh & Easy, since it was unable to get the chain’s employees unionized. And while there certainly is a sense of glee in the email the union sent around, I’m not sure that Fresh & Easy’s failure – if indeed that’s what happens to chain – does much to help supermarket employees anywhere. And it certainly doesn’t establish the UFCW as a viable partner for other chains, since it was so willing to dance on the not-yet-dug grave of one competitor.

    Besides, if I were running the UFCW, I’d take it a little show with a gloating. Some analysts are jumping ugly with Fresh & Easy, but I still believe that it is way too early to count Tesco out.

    Published on: April 22, 2008

    Interesting – and somewhat alarming – article on CNetNews.com in which Jim Cicconi, vice president of legislative affairs for AT&T, warns that unless there is an investment in the Internet’s current infrastructure, “the current systems that constitute the Internet will not be able to cope with the increasing amounts of video and user generated content being uploaded.” In other words, “We are going to be butting up against the physical capacity of the Internet by 2010,” Cicconi says.

    "The surge in online content is at the center of the most dramatic changes affecting the Internet today," Cicconi says. “In three years' time, 20 typical households will generate more traffic than the entire Internet today."

    The investment projected to be necessary in the US to get the Internet to where it should be - $55 billion in the next three years. The worldwide requirement - $130 billion.

    KC's View:
    Well, I’m willing to take up a collection…especially since my livelihood sort of depends on Internet infrastructure holding up.

    Published on: April 22, 2008

    Advertising Age reports that Starbucks, while attempting top get back to its coffee-brewing roots, also is taking a more mass-market approach to building sales – “the company is estimated to have nearly doubled its marketing spending to $100 million, and last week it began an aggressive coupon program unlike anything in its history, raising questions about its turnaround strategy.”

    According to the story, “The coffee chain distributed coupons good for free tall-size coffees every Wednesday through May 28 in USA Today, The Washington Post and several other markets Starbucks declined to reveal. Last week it also passed out coupons in New York City good for a free cup of coffee.”

    Some say that the strategy makes sense because it could generate sampling among those who have resisted Starbucks’ charms; but critics say it smacks of desperation, and will only get people who already like the product to pay less for coffee they probably would have bought anyway.

    Interestingly, Ad Age also reports that an analysis of some of the ideas promoted by customers on Starbucks’ new blog – MyStarbucksIdea.com – suggests that what people really want is free coffee, which they could earn through the use of a loyalty card.

    "What they want is for Starbucks to buy them coffee for the loyalty they're showing," RBC Capital Markets analyst Larry Miller tells Ad Age. "I see very few customers looking for lower cost. They say, 'You should buy me a free coffee on my 10th visit,' 'You should have a loyalty card.'"

    KC's View:
    Starbucks should listen to its customers on this one. It makes a ton of sense, and you actually have shoppers asking Starbucks to track their behavior.

    Published on: April 22, 2008

    • Wal-Mart has yet again claimed the top spot on the Fortune 500 list of top American companies, edging out ExxonMobil in terms of revenue ($378.8 billion vs. $372.8 billion). However, ExxonMobil had triple Wal-Mart’s profits ($40.6 billion vs. $12.7 billion).

    The other companies making the top 10 spots on the list were, in order, Chevron, General Motors, ConocoPhillips, General Electric, Ford Motor, Citigroup, Bank of America and AT&T. The most profitable US companies in 2007 were ExxonMobil, General Electric, Chevron, JPMorgan Chase, and Bank of America.

    KC's View:
    Not surprising that three of the top five companies in the Fortune 500 are oil companies, and that two of the top five companies in terms of profit are oil companies.. After all, we put them there every time we fill our SUVs with gasoline.

    Hell, Wal-Mart ought to adopt a new slogan: “Sure, we’re big and we’re everywhere. But at least we’re not an oil company.”

    Sales would double.

    Published on: April 22, 2008

    • The Orlando Sentinel reports that Freshco International Supermarkets, a small chain of stores that caters specifically to the Hispanic marketplace, “has quietly expanded in Central Florida during the past few months, opening grocery stores in Orange City, Kissimmee and Orlando … The chain now has six locations, with two stores in Port St. Lucie. ”

    The moves come as much bigger companies such as Publix and Wal-Mart ramp up their Hispanic offerings in order to appeal to local consumers in the region.

    USA Today reports that “federal food-safety officials are considering whether labels on some frozen chicken products adequately inform consumers that the chicken is raw and provide sufficient cooking instructions. Stuffed chicken entrees — which look cooked because they're breaded and prebrowned so that the breading sticks — are blamed for five salmonella outbreaks since 1998 that sickened 71 people, Minnesota health officials say. For every illness detected, more go unreported, officials say.”
    KC's View:

    Published on: April 22, 2008

    Today is Earth Day, and it seems appropriate that there is a plethora of environmentally themed stories on the wires…

    • Safeway, according to a press release has “unveiled its newest solar-powered grocery stores in Northern California to kick off a week of Earth Day activities and programs focused on the company’s commitment to the environment and helping consumers pursue greener, more sustainable lives.

    State and local officials joined Safeway representatives on a tour of the Placerville store's rooftop solar panel installation. It is one of 23 stores in California targeted for renewable solar energy. The Safeway store in Fairfield is also unveiling its new solar power system, which harnesses energy from the sun and decreases the store’s reliance on traditional greenhouse gas (GHG)-emitting fossil fuel energy.”

    • Food Lion announced that it will begin selling reusable shopping bags in all of its stores beginning April 22, 2008. The bags are made of a poly woven polypropylene, feature the Food Lion logo and will be available in all Food Lion stores beginning Earth Day for $0.89 each. The company’s Bloom and Bottom Dollar Food stores already offer similar reusable bags.

    “There are several reasons why we have made the decision to offer these bags to our customers” said Brian Stokes, Food Lion’s Project Manager. “First and foremost, more and more people are becoming aware of the effect grocery bags can have on the environment. Reusable bags make sense. Second, we purchase millions of plastic grocery bags each year. By reducing the cost of buying bags, we can pass on those savings to our customers.”

    • The Business Journal of Phoenix reports that “the Bashas' family of stores and Shamrock Farms will celebrate Earth Day on Tuesday by introducing reusable bags that will be tied to money-saving offers throughout the year … To obtain a free bag, Arizona customers need to take five or more plastic bags to a Bashas' store on Earth Day. Two hundred bags will be available at each store throughout Arizona on a first come, first served basis.”

    "We're calling it the 'ultimate green bag,' because it's good for the environment and good for your wallet," Johnny Basha, vice chairman of the grocery store chain, tells the Journal.

    • Stop & Shop announced that it have been awarded LEED Certification by the U.S. Green Building Council. According to the press release, “This achievement distinguishes Stop & Shop not only as the first supermarket chain, but also the first company in the country earning Volume Certification under the Portfolio Program. Fifty-one existing stores and close to 3.4 million square feet of stores have met the green and sustainable criteria of USGBC. LEED is a third party certification program and the nationally accepted benchmark for the design, construction and operation of high performance green buildings.”

    • Tesco’s Fresh & Easy Neighborhood Markets announced that to celebrate Earth Day today, it plans to give away reusable "bags for life" at all Fresh & Easy stores and unveil a dedicated green building Web page.

    Fresh & Easy said it will bag customers' groceries in reusable "bags for life" for free on Tuesday. The "bag for life" is larger and more durable than a standard grocery bag and, if damaged, the company will replace the bag for free, forever. These bags are made with recycled material and are 100% recyclable. Fresh & Easy offers its customers two different types of reusable bags, including a $2.50 canvas bag and the plastic "bag for life," which retails for $.20.

    Also today, Fresh & Easy will also launch a Web page dedicated to the company's green building initiatives. The site will highlight Fresh & Easy's green building practices and incorporate a real time green energy meter from its 500,000 sq. ft. solar panel on its
    Riverside, CA distribution center.

    • Wal-Mart has released new consumer research that shows shoppers are considering the environment before making a purchase. According to the statement released by the company, there has been an adoption rate increase of 66 percent from last year in its sustainability Live Better Index, which has been tracking consumers' decisions to purchase five key eco-friendly products since April 2007. This growth in the sustainability index shows that concern for the environment has a growing presence in shopping baskets of the retailer's 200 million annual customers:

    - Compact fluorescent light (CFL) bulbs - Average adoption rate of 19.7 percent (up from 13.39% in 2007); Delaware leads the category with an adoption rate of 25.8 percent.

    - Organic baby food and formula - Average adoption rate of 4.12 percent (down from 4.31% in 2007); California continues to lead the category with an 8.58 percent adoption rate.

    - Organic milk - Average adoption rate of 1.58 percent (up from 1.15% in 2007); Virginia has the highest adoption rate of organic milk at 2.7 percent.

    - Extended life paper products - Average adoption rate of 67.5 percent (up from 50.77% in 2007); Minnesota has the highest adoption rate with 78.1 percent.

    - Concentrated/reduced-packaging liquid laundry detergents – Average adoption rate of 76.3 percent (up from 22.86% in 2007); Oklahoma leads the category with an adoption rate of 96.3 percent.

    • And, in another environmentally themed story, the Los Angeles Times reports this morning: “Conscientious consumers who want to tread lightly are increasingly concerned about their own carbon footprints. They've changed lightbulbs. They covet a Prius more than a Porsche. Now their anxiety over global warming has shifted to the supermarket and dinner table.

    “The global food and agriculture system produces about one-third of humanity's contribution to greenhouse gases. So questions about food are shifting from the familiar ‘Is this good for me?’ or ‘Will it make me fat?’ to ‘Is it good for the planet?’

    “But what's the right thing to do? It's not just paper versus plastic anymore. Is throwing out leftovers better than taking them home in a plastic container? Is refrigerated better than frozen? A French brie sandwich or chicken salad?

    “Sensing this, the country's major food service companies are talking about energy efficiency, waste reduction and, now, how to reduce carbon emissions associated with the food they serve … Food science has begun to look beyond transportation, to the smorgasbord of contributors to carbon dioxide and other gases with even greater atmospheric warming potential, such as methane.”

    KC's View:
    Kudos to all companies and individuals who are paying attention to environmental issues. There all are important moves…though I would point out (and I’m sure these companies would agree) that while it is important what you do on Earth Day, it is even more important what you do during the days and weeks that follow.

    Published on: April 22, 2008

    • Loblaw Cos., still struggling to turnaround the company’s poor recent performance, is replacing two of its top executives. After two years as president of the chain, Mark Foote is departing, as is CFO William Wells, who will become CEO at Biovail Corp.

    Foote will be replaced by Loblaw deputy chairman Alan Leighton, a former executive at Wal-Mart who will add the presidential duties to his current portfolio.

    • The Business Courier of Cincinnati reports that Kroger has hired Angel Colon, formerly of the Goya Foods company, “to lead Kroger's multicultural business development in a newly created position.”

    • Winn-Dixie Stores announced the promotion of Jim Carrado to Vice President, Neighborhood Marketing, responsible for executing strategies centered on Hispanic, Urban and Affluent clusters. Carrado previously was Senior Director of Neighborhood Merchandising for Winn-Dixie.

    KC's View:

    Published on: April 22, 2008

    The bad news, according to the Chicago Sun Times, is that DEET insect repellent is winding up in the nation’s rivers and lakes…and now has been found in the Chicago public water supply. The concentration is low and experts say is no threat to public health; it apparently has gotten there because so many use the product during the summer and then show and wash their clothes, allowing the DEET to seep into the system.

    The revelation comes not long after a similar study found that a wide range of pharmaceutical traces also are ending up in the water supply, at last in part because people were dumping drugs down the sink and flushing them down the toilet.

    KC's View:
    And the good news, you ask?

    Well, it seems pretty obvious to me that if there is DEET in the water supply, that certainly reduces the likelihood of one getting a stomach bug…

    Published on: April 22, 2008

    Responding to yesterday’s interview with Harold Lloyd on the subject of leadership, one MNB user responded to Harold’s contention that companies need to view the development of leadership skills as an investment, not a cost:

    Investment is a cost and must be identified as such. Investment should also be a budgeted cost. Unfortunately, very few companies see the value in the type of employee investment required to develop leaders. Part of the problem is loyalty. In light of the volatility in United States businesses over the past several years it has been made clear to most that American companies are not loyal to their employees. That must change if companies want employee loyalty. Isn’t it interesting that the buzz has lately gone to smaller store formats, when will that shift to having smaller companies? It is ever so much easier for smaller companies to develop employee loyalty than large companies that is right up to the point where the small company is purchased by a large company. As long as short term profits are more important than long range viability the development of leaders will continue to suffer.

    MNB user Edward F. Ogiba chimed in:

    Great interview.

    Among many Harold Lloyd's many powerful insights, is the not so obvious notion that great leaders "discontinue things". Managers will quickly dump new programs that have obviously failed, but usually pour more and more resources into yesterday's successes that have outlived their usefulness. It takes a leader to pull the weeds.

    Peter Drucker encouraged companies to periodically ask "if weren't already doing this, would do so now?" Unless the answer was an unqualified "yes", he maintained the odds are the brand or program should be curtailed, perhaps even dropped.

    Managers often fail to recognize that what they postpone, they actually abandon. But real leaders recognize these situations for what they are, a gridlock to future growth.

    Thanks for featuring Harold Lloyd's wisdom to remind us all.


    My pleasure.

    A reminder - for more information about “Am I The Leader I Need To Be?”, Harold Lloyd’s new book on the subject, or to order a copy, go to:

    > http://www.raphel.com/catalog/product_info.php?products_id=52




    Still catching up with last week’s emails…

    We had a piece last week about a USA today story saying that new legislation drafted by Democratic leaders in the US House of Representatives could require new fees charged to food and drug companies that would in turn be used to increase government oversight of these industries.

    However, opponents said that any fee increase would come at precisely the wrong time.

    "We should not be taxing food companies at a time of record food prices," Scott Faber, vice president of the Grocery Manufactures Association, tells USA Today. "Congress ought to provide the (Food and Drug Administration) with ample funding and not pass that cost on to companies and consumers.”

    My response at the time:

    If Congress provides the funding, the money has to come from somewhere. I’m thinking taxes. Taxes get paid by consumers.

    If companies have to pay fees, they’re going to have to find the money somewhere. I’m thinking higher prices. Last time I checked, higher prices get paid by consumers.

    I agree that the FDA and USDA need to do a better job, and that they need more funding. I also agree with FMI CEO Tim Hammonds that a single food safety agency would be a better, more efficient approach.

    But I think we have to be honest about where the money is going to come from, no matter how it is raised. Or am I missing something here?


    One MNB user referenced a Washington Post story that I did not see, that focused on the legislators’ desire for Country of Origin Labeling:

    You really did miss something in this article...it was about "COOL"...and would require US based companies to pay roughly $600 million annually in fees to cover additional FDA responsibilities and pay for the cost of COOL labeling...It was about having "COOL" and perhaps a reduction in deaths.

    You’re right…I didn’t see the COOL references. Can I blame it on being in Barcelona and being exhausted? Actually, that’s no excuse…and I should have caught it.
    KC's View: