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    Published on: May 7, 2008

    Content Guy's Note: On Tuesday, at the Food Marketing Institute (FMI) Show in Las Vegas, the trade association unveiled some of the details for the 2009 event – which will be an education-only program entitled Future Connect and is scheduled for May 4-6 in Dallas, Texas. (Future Connect will alternate with the more traditional FMI Show, which is next scheduled to take place on May 10-13 in Las Vegas.)

    Leading the effort for FMI in terms of designing the new event is our own Michael Sansolo, who spent 13 years as the organization's senior vice president of education before going off on his own about a year ago. So it made sense to ask Michael to explain exactly what Future Connect is going to be, and the rationale behind it…


    The closing of the FMI show in Las Vegas today marks the beginning of a new era. A year from now, FMI will take a hiatus from its annual exhibit show and open in its place a brand new event geared to building leadership throughout the industry.

    Few can debate the need for the new event. As Denise Morrison of Campbell's explained at the FMI show, demographic realities loom large for the staffing of every company. Over the next decade, the children of the massive Post-War Baby Boom will begin retiring. The impact of that event will create a gulf of 10 million jobs in the United States. More frightening, those retirees will deplete the management and leadership ranks of companies throughout the economy. FMI's new event, Future Connect, is aimed at filling that gap.

    Future Connect, which was designed by a committee of retailers, wholesalers and suppliers, aims to build leadership and management skills for current employees ranging from front line store level or sales jobs all the way up to top management. The range of courses includes basic skills such as how to hire better and manage an increasingly diverse workforce; how to improve financial and budget skills; and more difficult skills such as improving trading partner relations or understanding the changing nature of food, shopping and shoppers themselves.

    The new educational program will feature tracks for front line managers, middle managers and top management, as well as focus on building personal performance, better guiding the people around you and building store and company profit. Courses will be designed to maximize discussion and networking by including team exercises in problem solving. Among the speakers already signed up to participate are management guru Dr. Stephen Covey, business publisher Knight Kiplinger and a host of industry leaders and topic experts.

    (Additional information on the program, including early registration discounts, can be found at www.fmi.org.)


    Other FMI Show notes from the Content Guy…

    In comments made about the newest study done by the Coca-Cola Research Council, the current chairman of the council, Sweetbay Supermarkets CEO Shelley Broader, noted that the notion of drawing a direct line between food and health/wellness is a tremendous opportunity, "but it also is a tremendous risk" because of the disconnect between what consumers say and what they do. Not only do shoppers not believe that supermarkets are the best connection between food and health, but while they say they want to eat healthy, they simply don't follow through on those statements when making shopping decisions.

    There is, Broader said, the wide chasm between "stated importance and derived importance," and it is not unique to health and wellness. She said the same gap existed in the area of sustainability, when consumers would say one thing and do another, "but then something happened to close that gap." In the case of sustainability, it was the high cost of energy…which has driven consumers to start to follow through on the statements they were making. "Something will happen to close the gap in health and wellness," Broader said. "We don't yet know what it will be." It could, she said, be a personal health issue for some shoppers, or it could be a macro event affecting the health care system. But it is all a matter of both timing and patience…and being ready to deliver on the promise when those events occur, and not being "outfoxed by another channel of trade."

    In the same session, Christopher Dimos, president of pharmacy operations for Supervalu, suggested the idea role of the in-store pharmacy – "solution center for the sick, and destination center for the healthy." Which sounded like a pretty strategy to us.



    A panel of retailers and manufacturers – including Coleen Wegman of Wegmans and Sandy Douglas of Coca-Cola – participated in a panel discussion about industry collaboration, based on a pilot program designed to help trading partners work together more successfully.

    Essentially, the bottom line was this – that as trading partners work together to jointly own the process of moving product through the system, the goal ought to be to focus on working together to satisfy and sell products to the end consumer, rather than on just fixing trading partner problems.

    The four pillars of such an effort should be, according to the panel:

    • Focus on the consumer;
    • Connect business information with trading partners;
    • Prepare your people for a new world;
    • Share the supply chain.



    Martin Lindstrom, author and self-described "brand futurist," revisited remarks that he made at the FMI Midwinter Executive Conference earlier this year, but one of his points was certainly worth reiterating – the role of the senses in in-store marketing. He suggested what he called "5-D space management," which endeavors to engage all the consumer's senses as he or she walks through the store.

    Of particular merit – especially in the supermarket – was the role of smell. While Lindstrom talked about "sensory chaos," in which colliding smells cancel each other out and confuse the consumer, it would actually be more accurate to suggest that most supermarkets – which should, by their very nature, be filled with enticing and appetite-inducing aromas – have little nose appeal. They simply aren't designed that way.

    One would hope that at least some of the audience members might return home to their stores and try to figure out how the aromas of fresh breads and cookies, for example, might be used to bolster their image as compelling, food-driven retailers.



    More tomorrow…

    KC's View:

    Published on: May 7, 2008

    The Washington Post reports that US shoppers are likely to be hit with a new round of food price hikes, led by inflation expected to hit the price of chicken and pork.

    "Food inflation hit 4 percent last year, up from 2.4 percent in 2006," the Post writes. "While beef prices were already high, chicken and pork prices didn't reflect record costs for feed and fuel. That's poised to change as chicken and pig producers who have been losing money slaughter (fewer) animals to decrease the supply and raise the prices they can charge."

    Such a trend, according to the Post, "would further challenge shoppers who are already limiting themselves to sale items and store brands as they contend with the worst food inflation since 1990."

    And, the Post notes that there seems to be general agreement that a truism in the United States – that its residents spend a lower percentage of their income, 5.8 percent, on food than any other nation – may be coming to an end as high prices and global realities come crashing down on shoppers.

    KC's View:
    Seems to me that there probably will be three kinds of retailers dealing with these economic issues.

    There will be the retailers that focus relentlessly on their price advantages, and value images that have long been part of their offering to consumers.

    There will be retailers that have always emphasized the value-added component of their businesses, that have demonstrated real loyalty to their shoppers, and that will have much good will to fall back on. (Of course, they'll have to keep prices sharp or risk losing that good will.)

    And, there will be retailers that will do little or nothing, waiting for things to change.

    Of the three, the first two groups stand a pretty good chance of surviving whatever happens to the economy. But the last group has almost no shot at all.

    I actually overheard a retailer say this week at the FMI conference that he was "waiting for things to get better."

    Waiting is a loser's game, I think.

    Published on: May 7, 2008

    The role of the supermarket in the community is underlined this week by a story in the New York Times saying that "a continuing decline in the number of neighborhood supermarkets has made it harder for millions of New Yorkers to find fresh and affordable food within walking distance of their homes, according to a recent city study … According to the food workers union, only 550 decently sized supermarkets — each occupying at least 10,000 square feet — remain in the city."

    This isn't just a matter of reduced convenience, the Times notes: "The dearth of nearby supermarkets is most severe in minority and poor neighborhoods already beset by obesity, diabetes and heart disease." And the closings aren't just taking place in poor neighborhoods; affluent areas are affected as well, as high rents and tight margins force out food stores.

    The story notes that at least some of these food stores are being replaced by chain drug stores that "stand to make money coming and going — first selling processed foods and sodas, then selling medicines for illnesses that could have been prevented by a better diet."

    KC's View:
    Not a line likely to thrill those in the drug store business.

    This is an interesting story because it underlines the connections between the supermarket and the community, and between food and health. When a store closes, it doesn’t just inconvenience local residents; it can have dramatic and long-term consequences.

    According to the NYC study, the city could support at least another 100 supermarkets…and the administration is considering economic incentives of various kinds of attract new stores. Which is good news, especially if these neighborhoods get good stores.

    (Gee, NYC would like to have 100 supermarkets of at least 10,000 square feet that carry fresh food and offer easy access to an urban population. Sound like maybe Fresh & Easy could find an east coast home there…?)

    Published on: May 7, 2008

    The Wall Street Journal this morning reports that CVS Caremark, which operates more than 500 in-store health clinics around the country, has decided to scale back expansion of the concept – opening just 100 new clinics this year, half of what was originally planned.

    The shift in strategy comes because of simple economic reality. Early in the process of developing the concept, expectations were that units could become profitable within six months, but experience has shown that it can take as long as two years. And these fiscal realities have caused the shut down of 69 in-store clinics in 15 states over the past months, affecting retailers that include Wal-Mart, Meijer and Bi-Lo.

    CVS says that instead of opening so many new clinics, it now will focus on "enriching the services" provided by existing units. And the company CFO, David Rickard, says that the company believes its MinuteClinics will be a "terrific, successful little business."

    Not every company is backing off, however. The Times notes that Walgreen plans to continue a rapid expansion policy for its clinic concept, and that Wal-Mart "plans to partner with hospital systems to open as many as 400 co-branded store clinics by the end of 2010, up from about 50 sites in operation now. That approach is a departure from an earlier strategy under which Wal-Mart leased space to operators like CheckUps that weren't associated with hospital systems."

    KC's View:
    There were bound to be problems as the in-store clinic concept developed, but that doesn't mean that conceptually it isn’t a great idea. And, it can be made even better as retailers do what the Coke Research Council suggests – using the clinics in a strategic way that draws a thick, straight line between food and health, thus giving consumers the best of both worlds.

    Published on: May 7, 2008

    • The Denver Business Journal reports that Albertsons LLC is selling 72 convenience stores and gas stations - located in Colorado, Texas, Arizona and Louisiana - to the Valero Energy Corp. Terms of the deal were not disclosed.

    • The Wall Street Journal this morning reports that "rapid increases in high fructose corn syrup prices will encourage a return to sugar usage in U.S. soft drinks and foods -- a move that is already gathering steam among consumers -- sugar industry members predict."

    KC's View:

    Published on: May 7, 2008

    • General Mills CEO Kendall J. Powell has been given the addition role of the chairman of the company, effective May 23, when the current chairman, Stephen W. Sanger, is scheduled to retire as chairman after 34 years with the company.
    KC's View:

    Published on: May 7, 2008

    • Arden Group, parent company to Gelson's Markets, announced that its first quarter sales were $118.8 million, down from $120.4 million during the same period a year ago. Net income for the period was $6.5 million, up from $6.4 million a year earlier. Same-store sales were own 1.3 percent.

    • Sara Lee Corp. said that its third quarter profits were up 82 percent to $211 million, from $116 million a year ago. Q3 sales rose 10 percent to $3.24 billion from $2.94 billion.
    KC's View:

    Published on: May 7, 2008

    Irvine Robbins, the surviving half of the team that created the Baskin-Robbins ice cream chain and popularized the notion of 31 flavors – in the late forties, an enormous number of options – died Monday at age 90. Baskin-Robbins, the co-creator of which was the late Burt Baskin – currently has more than 5,800 stores around the world.
    KC's View:

    Published on: May 7, 2008

    …will return.
    KC's View: