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    Published on: May 8, 2008

    Notes & commentary from Kevin Coupe

    There was a sense of both anticipation and trepidation at this year's annual Food Marketing Institute (FMI) Show in Las Vegas, based on various casual conversations held and overheard during four days there.

    Much of it was keyed to the imminent leadership changes taking place at FMI; CEO Tim Hammonds announced his retirement just days before the conference began, and there is tremendous speculation about who will replace him and what it will mean to the organization. There is a sense – both on the part of retailers and manufacturers – that this is a time of opportunity for FMI…though there is by no means any sort of unanimity about whether the organization's leadership will meet the challenge.

    What should be the role of a trade association? And how should the business model of a trade show change to reflect an evolving marketplace? (People continue to wonder about a food industry trade show at which companies such Pepsi and Sara Lee do not exhibit. Can such a show be relevant? And does going to an every-other-year schedule make it more relevant, or less so?) These are the questions that people seemed to be asking, and it may be that FMI's members are ready for a little revolution, even if the notion worries them a bit.

    "Think big, act bold, start simple, iterate fast," said futurist/author John Patrick in his Monday presentation about the Internet, and that seems like a pretty good model for how FMI should proceed at this juncture in its history. People with whom I spoke suggested that bold moves are called for, such as the consideration of new alliances or even mergers with organizations such as CIES, the Grocery Manufacturers Association (GMA), the National Grocers Association (NGA) or the National Association of Convenience Stores (NACS).

    (In fact, NACS CEO Hank Armour often is mentioned as the model for the kind of person who could replace Hammonds; Armour is smart, relatively young, energetic, extremely aggressive and very focused in pursuing the NACS agenda, and he is a former retailer who "gets it.")

    And so, there is much anticipation about next steps for FMI, even if there is trepidation…because there are more than a few people who think that it is unlikely that a bold move will be made, and that the opportunity will be missed. Or worse, avoided.

    However, while there are those who feel anticipation and others who feel trepidation – and some who feel both – there is another group of people who feel something else. Apathy. They think that it doesn’t matter what FMI does, or any trade association, for that matter. They think that this is all "inside the beltway" stuff, and that it has little impact on the day-to-day conduct of business.

    Apathy, I suspect, is FMI's worst enemy. And if it is to be relevant for a changing industry, and to embrace the kind of revolution that can redefine its role and mission, then it has to take aim at apathy first and make a persuasive and compelling case for why people and companies should care.

    KC's View:

    Published on: May 8, 2008

    In a story that hints at the kinds of problems that private industry will face in just a few years, the Washington Post reports that US federal agencies could lose as many as 25 percent of their employees by 2012, mostly through retirements by baby boomers – and that this trend could severely compromise the government's ability to deliver basic services.

    And, the Post writes in a sentence that could reflect a lot of industries, not just the federal government, "there are growing concerns that the government may be at a disadvantage in competing for talent, especially among young people, because of its slow and cumbersome hiring practices."

    KC's View:
    As the retirement wave approaches, it isn’t just the federal government that has to be concerned (and I'm pretty sure that there are plenty of people out there who think that a federal government with 25 percent fewer employees is a good thing).

    The same problem is going to affect a lot of businesses, and retailers especially have to worry about how they are going to attract young people since they also are often at a disadvantage in attracting new talent.

    Interestingly, I got an email yesterday from an MNB user who is thrilled with the incipient retirement of an entire generation…and it is relevant to this story:

    I am tired of them standing in my way and taking up space. I am 46 years old, been in the business all my life … I have been stuck behind these boomers all my career.

    Retire and get out of my way. I am ready to lead. Now that the Boomers are going away, perhaps there is opportunity. Many of these Boomers have looted companies and run them into the ground for their personal gain.

    Pretty cynical. But maybe it points to a larger problem that the industry needs to address.

    Published on: May 8, 2008

    A new study by TNS suggests that "holographic sales assistance, interactive dressing rooms, biometric fingerprint payments and intelligent shopping carts could depart the realms of science fiction for the real world if shoppers’ opinions on how the shopping experience will change in the next decade hold true."

    The study, which looked at attitudes in the US, Canada, Europe and Asia, reached the following conclusions:

    • Sixty percent of shoppers across the globe believe that they will be able to pay for purchases using just their fingerprint by 2015—with this innovation rated top by 25% of shoppers. However, the innovation is not as popular with US shoppers—just 19% voted for it as their favorite.

    • US consumers are most keen on “smart” shopping carts—28% rank it top vs. 19% of all shoppers and just 9% of shoppers in France and Germany.

    • Spaniards are keener than other Europeans on the concept of a refrigerator networked into other devices to order and have groceries delivered (45% compared with 25% of U.K. shoppers)

    • A confident 73% of shoppers globally say they expect to be using interactive touch screens in dressing rooms to communicate with sales assistants by 2015, while half or more expect that 3D body scanning and interactive dressing room mirrors will eliminate the stresses of trying on that new outfit.

    KC's View:

    Published on: May 8, 2008

    USA Today reports that Ireland-based IdentiGEN Ltd., which uses DNA tracing technology to track meat back to the source animal, is coming to the US after successfully worked with European companies such as Superquinn and Tesco. The company says it has at least three US companies that want to work with it, but none are yet prepared to go public with that information.

    KC's View:
    Superquinn has been engaged in a broad and ambitious traceability effort for years, and it is one of the reasons that the company has an enduring and sterling reputation with Irish shoppers. It wasn't that long ago that Feargal Quinn told me that traceability and transparency were key tenets in the operation of a retail business today. "I don't think you can give too much information to consumers," he told me. "The big word there is trust…the cost is well-worthwhile.”

    Couldn’t have said it any better myself.

    Published on: May 8, 2008

    The East Bay Business Times reports that Safeway CEO Steve Burd described produce as "the medicine cabinet of the future" in a speech to the United Fresh Produce Association – a statement that, not surprisingly, generated significant applause.

    However, Burd also told the audience that he " favors coupling good nutrition with market-driven reform of the nation's ailing health care system," a mission to which he has devoted much of his time over the past few years.

    KC's View:

    Published on: May 8, 2008

    Starbucks has announced that it will soon begin offering its patrons free Internet service…but not all its customers, and not free all the time.

    The company said that it will offer two hours of free wireless high-speed Internet service each day to people who hold a Starbucks card and use it at least once a month. According to a spokesman for the company, its records show that most people go online for about an hour a day while at Starbucks, so the offering seemed like a "meaningful benefit.

    The new policy is keyed to coincide with Starbucks' switch from T-Mobile Wi-Fi service to AT&T.

    KC's View:
    At one level, I applaud this decision by Starbucks – I've been urging it here on MorningNewsBeat for a long time.

    That said, it is as if Starbucks wants to be just a little bit pregnant. Not possible. If indeed holding a Starbucks card is to be the qualifier – and that seems like a reasonable condition – then don't put a timer on the people using it. After all, they've already established their loyalty, and the longer they are in the store, the more opportunities Starbucks has to sell them something else.

    Published on: May 8, 2008

    • The Baltimore Sun reports that Harris Teeter has signed a lease to open its first store in the Baltimore market. The new 60,000 square foot store will go into an area called Locust Point and, the Sun says, "will fill a void in an area where there are few choices."

    • The Washington Post reports that organic beers are a niche within a niche, constituting probably less than 1 percent of the craft beer segment (which itself produces less than 4 percent of the beer consumed in this country). But the sub-niche is growing rapidly: In 2006, sales totaled $25 million, up 32 percent over the previous year, according to the Organic Trade Association in Greenfield, Mass."

    USA Today reports that Coca-Cola's second-ranked sports drink PowerAde, which competes with Gatorade as a way of providing electrolytes to athletes after exercise, is upping the ante with a new zero-calorie line that will be endorsed in advertisements by tennis star Venus Williams and basketball star Carmelo Anthony, among others.

    KC's View:

    Published on: May 8, 2008

    • Steve Smith, Sweetbay Supermarkets' senior vice president of merchandising, has been promoted to the position of Senior Vice President of Marketing & Communications for Delhaize Belgium, Sweetbay's parent company.

    • Ed Shivers, Publix Super Markets' vice president of risk management, is retiring from the company after 50 years of service. He started with the company in 1958 as a part time front-end clerk, and worked his way through the company; he also served at one point in his career as chairman of the Food Marketing Institute's committee of risk management.

    Shivers will be succeeded by Marc Salm, the company’s director and counsel of risk management.

    KC's View:

    Published on: May 8, 2008

    Hi, I'm Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and sponsored by Webstop, experts in the art of retail website design.

    Well, it has been a busy week. In addition to my regular MorningNewsBeat duties, we also were in Las Vegas this week shooting the first edition of FoodWireTV, the new webcast that we are producing to help consumers shop, cook and eat smart. I'm gratified by the response we've gotten since FoodWireTV was first announced here on MorningNewsBeat…the kinds of emails we've gotten – both from interested sponsors and from eager potential viewers – have served as the kind of positive reinforcement that convinces us that this is a good idea.

    That's one of the wonderful things about the MorningNewsBeat community. You aren’t shy about telling me when I mess up, but you also are tremendously generous in your encouragement. That's something to be treasured. In the more that six years that I've been doing this, one of the things that really amazes me is how much you pay attention and remember. It's scary. I sometimes will comment on a story and someone will shoot me an email within minutes to tell me that I said the opposite thing back in 2003. 2003? I can barely remember what I wrote last month!

    And you pay attention to everything – even to all the things I say about Mrs. Content Guy. (By the way, thanks for all the nice congratulatory notes you sent about our 25th wedding anniversary last week.) Over the years, I've described her and her attitudes to varying degrees…so maybe I shouldn't have been shocked when MNB user Geoff Harper actually wrote and performed a song about her, integrating much of what I've said about her, that he emailed to me. Should have been shocked, but wasn't.

    So as a little change of pace this week, I'm going to play Geoff's song – the world premiere of a song entitled, "A Mrs. Content Kind Of Girl."


    KC's View:
    To listen to Geoff's song, you have to access the audio version of MNB Radio…either by clicking on the icon at left, or by going to iTunes and searching for MorningNewsBeat.

    Published on: May 8, 2008

    On the subject of food retailers exchanging gift cards plus a 10 percent bonus for the government-issued economic stimulus checks in the mail this week, one MNB user wrote:

    I spoke with a client today and they are going to start selling $330 cards for $300 as an ongoing promotion and it will be mutually exclusive from the stimulus checks. Look to see other retailers do this as well.

    My client stated that just from the reduced credit card transaction fees they will save a lot of money. Better to have one $300 transaction than ten $30 ones.

    Credit card companies are going to hate this.

    Gee, that's a shame.

    MNB user Baronda Bradley wrote:

    With all of the news stories and follow-the-leader tactics that the grocery stores are pursuing regarding cashing tax rebate checks, the clearest benefit I see is that those same retailers are getting fresh, warm leads--namely, updated names and addresses of clients who are extremely likely to shop in their stores--for the price of a fresh, warm loaf of bread.

    Sounds like a good trade to me!

    Regarding yesterday's story about supermarkets disappearing from New York City neighborhoods for a variety of economic reasons, one MNB user wrote:

    I think we need to ask ourselves why we don’t care more about solving this problem that has been escalating over the years. With all the government subsidies and corporate charitable donations being done today, you would think someone would at least see this as an opportunity to differentiate themselves from a “good corporate citizen” standpoint. The difficulties in managing stores in these areas must make this equation not work out. Is anyone even having the conversation?

    MNB had a piece yesterday about an FMI session focusing on industry collaboration, which prompted MNB user Jim Swoboda wrote:

    OK, the key takeaways were:

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

    Geez, that sounds strangely like ECR!


    We also had a piece yesterday about how the high cost of corn is creating an environment in which some manufacturers may move away from high fructose corn syrup (HFCS) and toward the use of sugar. MNB user Ellen Ornato observed:

    It would be interesting if a health organization would track the connection between the obesity curve and the introduction and then pervasive insertion of high fructose corn syrup into nearly every packaged good. A return to sugar is a good thing; we know what sugar is, where it comes from and what it does! Now if we can just get them to eliminate aspartame from everything we’ll be back on the path to consuming purer foods.

    It may sound like whining, but aspartame is now in ALL gum, not just gum that’s “sugar free.” Juicy Fruit and even the kids’ Bubble Tape have it in there! No gum is safe to chew anymore. Yikes.

    MNB user Marc Berliner had some thoughts about the possibility of Wegmans opening a store near Boston:

    I live in Westwood and this issue is receiving a lot of attention in town. There is a town meeting tonight were the issue is sure to be a hot topic of debate. Wegmans is already being heavily marketed in town. Yesterday we received a 4-page brochure from the developers of Westwood Station (where the Wegmans would exist) talking about what Wegmans offers to shoppers, how they get so involved in their communities, etc.

    Commenting on our recent review of a terrific book entitled "Death To All Sacred Cows," MNB user Glen Terbeek wrote:

    If the supermarket industry is to put "Death To All Sacred Cows", then it better start thinking about convenience (and the supply chain) all the way to the dinner table, not just to the store shelf. There is a lot more to preparing and serving meals than shopping in the store. In fact, to really attack "the" Sacred Cow, it is time to start thinking about convenience (and the supply chain) in reverse order, starting at the completion of the meal and working backward. I call it the Demand Chain. The current food distribution model will continue to come under attack by outsiders who understand the consumers' false economics (including convenience) in the way business is done (meals are served) today.

    As usual, Glen Terbeek nails it.

    Attention must be paid.

    KC's View:

    Published on: May 8, 2008

    The convergence of wellness marketing and shopper marketing provides an exciting opportunity for retailers. Healthnotes has been evolving to meet this emerging market—adding new content and shopping tools, and creating a storewide platform to drive sales. Now, we've evolved our brand.

    As Aisle7, we’ll create new and exciting opportunities for stores to connect with shoppers. After all, who’s better prepared to help you navigate the latest trends in wellness than the company with 20 years of innovative experience? Let Aisle7 help you expand your business in every aisle, every day.

    Aisle7: Fresh Ideas for Wellness Marketing

    KC's View:

    Published on: May 8, 2008

    The convergence of wellness marketing and shopper marketing provides an exciting opportunity for retailers. Healthnotes has been evolving to meet this emerging market—adding new content and shopping tools, and creating a storewide platform to drive sales. Now, we've evolved our brand.

    As Aisle7, we’ll create new and exciting opportunities for stores to connect with shoppers. After all, who’s better prepared to help you navigate the latest trends in wellness than the company with 20 years of innovative experience? Let Aisle7 help you expand your business in every aisle, every day.

    Aisle7: Fresh Ideas for Wellness Marketing

    KC's View: