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    Published on: June 3, 2008

    by Michael Sansolo

    Of all the places on earth to get a sense for just how much things can change, few can match Berlin, Germany. But there I stood on a recent night, my hand against one of the remaining pieces of the Berlin Wall, considering just how insignificant it looks today, with hotels, buildings, shops and activity taking place on either side.

    If I had any doubts that it wasn’t always that way, I got a quick lesson from the young woman who led a friend and me on this visit. She had grown up in East Berlin in a time when the wall was The Wall. At that time, the eastern side of the divide was vacant, the easier to identify and stop anyone trying to escape.

    As I stood touching the wall, this young woman began an impromptu dance, leaping over the line that is embedded in the ground to remind visitors of the entire path of the wall. She jumped from the east side to the west of the former divide singing: “I’m in the West; I’m in the East…” Things, as they say, change.

    There was nothing so dramatic about the conference I was attending, but then again, change usually doesn’t seem very dramatic when looked at from the present. Only when we look back do we suddenly glimpse how different life is today than it was a short while back. It wasn’t that long ago that car seat belts were unused or smokers walked and sat among us at conference, restaurants or even college classrooms.

    Which raises the question of where will we head in the future on the issue of healthy eating and will the time come when the point of sale will become the point of wellness, as suggested by Dominique Reiniche, president of the European Union Group for Coca-Cola.

    The issue of health and wellness goes well beyond the US these days as does the level of concern…and the notion of possible solutions range just as far. Only two week ago, an obesity conference in the United Kingdom drew headlines for suggesting that pharmacists will need to play a bigger role in guiding customer choices for health. The surprising news wasn’t that pills and advice will be dispensed together, but rather that Britain medical community is behind the idea.

    The notion of how to change the discussion on health and wellness is the essential element of the newest report from the Coca-Cola Retailing Research Council of which I am a member. (And for total full disclosure, I was the presenter of the report at the ECR Conference in Europe and a member of the panel discussion where Reiniche made her comment.) The report, conceived and directed by retailers, was produced by the Institute for the Future. It merits your consideration as you think about how things may yet change again.

    Using a range of research techniques to create insights into the future, the Institute shows how the intersection of changing lifestyles and societal issues could alter the way consumers shop for food, health and information into the future. It offers forecasts of connections that might change the ways shoppers engage in all sorts of behaviors, including: How health could become a filter for decision making; How health advisors might be found anywhere and everywhere; And how concern for the environment may shape and alter purchasing patterns.

    The future, of course, is unknowable and the key to the Institute’s work is the debate it can help create inside your company on what the future might resemble and how you are prepared to address it. The information you find on the report isn’t so much a solution, as it is an invitation to consider what might be and what steps you will need to take to get there first.

    Remember, walls come down unexpectedly all the time. Especially in Berlin.

    KC's View:

    Published on: June 3, 2008

    Stories in both the New York Times and the Washington Post this week seem to be making essentially the same point – that at least in some venues, healthier fast food seems to be catching on.

    The Times notes that Let’s Be Frank, a three-unit hot dog stand chain in California, “is among a small but thriving segment of the fast-food world offering grass fed and other naturally raised meats to the masses. Others include Chipotle Mexican Grill Inc., which operates more than 730 eateries in over 30 states, and Burgerville, which has 39 restaurants in Washington and Oregon.

    “Those eateries and others are providing a new market for beef and pig ranchers around the country who eschew the widespread factory-farm model and instead raise animals the old-fashioned way in pastures and outdoor pens.”

    According to the Times piece, there are compelling reasons to choose such fast food places over more traditional options: “A recent study funded by the Pew Charitable Trusts found that intensive industrial livestock production has yielded antibiotic-resistant bacteria, degraded the environment and devastated rural communities by replacing farm and ranch jobs with poorly paying feedlot positions. By contrast, operations such as Hearst Ranch raise their animals without growth-promoting hormones or antibiotics, and don't confine their livestock to teeming feed lots.” Consumers are becoming aware of the chasm between these old-fashioned/newfangled agricultural operations and the industrial model – in part because of stories like the one in the Times - and are trying to make more healthful decisions.

    Meanwhile, the Washington Post reports that the market for organic fast food “in the Washington area are about to grow. Organic to Go, a Seattle company founded in 2004, said yesterday that it has purchased locally based High Noon's four cafes, as well as its catering operation, and plans to turn the lunch hot spots into places where office workers can flee their cubicles and devour a meatloaf sandwich made with organic beef.”

    According to the Post story, “The company is not first to the D.C. market with quick, organic food. Last year, three Georgetown University graduates opened a restaurant called Sweetgreen, on M Street in Georgetown. Sweetgreen serves salads that are mostly organic in environmentally friendly surroundings. The packaging is biodegradable … Other chains popping up include Evos, a Tampa company with fast food outlets in several states offering soy burgers and air-baked fries. Gusto Grilled Organics' flagship restaurant is in midtown Manhattan and serves eat-in, takeout, or delivery -- steak sandwiches, empanadas, pizzas and more.”

    KC's View:
    While being assiduously anti-fast food, MNB has long lauded companies such as Chipotle and Burgerville for raising the bar on such products – they prove that a little time, a little care and some intelligent sourcing can turn out a better product, and that smart marketing can turn the company into a success story.

    It will be interesting to see if a down economy has more of a negative effect on such chains than it does on the likes of more traditional – and less healthful – operations such as McDonald’s and Burger King. I hope it doesn’t….it seems to me that it is almost always worth a little bit more money to get food that tastes better and is better for you. But that’s not an opinion shared by everybody. (There are things in life to skimp on…but I’ve never thought that food and drink are among them. Rather eat less and eat better.)

    Published on: June 3, 2008

    BrandWeek reports that as retailers look to cope with the troubled economy by providing shoppers with new levels of convenience – which they define as one-stop shopping – they increasingly are turning to the concept of partnering.

    For example, these are some of the pairings that can be seen on the US retail landscape:

    • Wal-Mart and McDonald’s, Blimpie, Dunkin’ Donuts and Campero Chicken.
    • Macy’s and FAO Schwarz.
    • JC Penney and Sephora.
    • Stop & Shop and Starbucks.
    • Borders and Seattle’s Best Coffee.
    • Target and Starbucks, Jamba Juice and Cold Stone Creamery.

    “Many retailers can use the added attractions,” BrandWeek writes. “While discount retailers have reported higher-than-expected first-quarter earnings, some of the country's major department stores are seeing revenue drops as high as 50%. Other big box retailers like The Home Depot, are closing locations and scrapping expansion plans.

    “In this tough economic climate, bringing in well-known brands can boost a retailer's foot traffic, brand integrity and consumer interest, said Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm in New York.”

    KC's View:
    I am reminded that in “The Prince,” Niccolo Machiavelli wrote that “the forces of a powerful ally can be useful and good to those who have recourse to them... but are perilous to those who become dependent on them."

    Words worth considering as companies partner up.

    Of course, there is another sentiment worth considering….that the most important partner a retailer can have is its customer.

    Published on: June 3, 2008

    The California State Assembly has approved a bill that would require the disclosure of specific nutritional information – including calories, fat content, trans fats, carbohydrates and sodium – at all chain restaurants with at least 20 units in the state.

    However, the information can be provided through a variety of means, including point of sale posters, menus, table tents, tray liners, brochures and kiosks. The variety of options was diverse enough to earn the bill the approval of the California Restaurant Association, which labeled the legislation both responsible and sweeping enough to help its members avoid a “patchwork of local regulations.”

    The bill now goes to the State Senate and then, if approved there, to Governor Arnold Schwarzenegger for his signature.

    KC's View:

    Published on: June 3, 2008

    The Syracuse Post-Standard reports that German discounter Aldi has opened a new generation “green” store in East Syracuse: “Its customers will notice the skylights, higher ceilings than found in older stores, high windows facing Bridge Street and, perhaps, the unusual lighting in the cooler cases … On the green side, diamond-shaped LED lighting on the inside frames of the store's upright coolers provide more than enough light to see the products, and just enough to give the store 80 percent in savings over fluorescent lighting employed in older stores.

    “The street-front exterior sign also uses LED lighting to cut back on the typical yearly-or so sign maintenance that comes with replacing fluorescent fixtures. Like the LED lighting, much of the ‘green’ in this $2 million green Aldi store is behind-the-scenes. New cooling and refrigeration systems were chosen as more Earth-friendly and to save money.”

    Aldi, which credits Wal-Mart for both pioneering many of these energy-saving measures and sharing the technologies even with competitors, hopes to achieve a 30 percent overall savings in its utility footprint.

    KC's View:

    Published on: June 3, 2008

    FedEx announced yesterday that it will change the name of its Kinko’s printing and office services business to FedEx Office. FedEx bought Kinko’s in 2004 for $2.4 billion.
    KC's View:
    I bring this up because it is yet another branding decision that I do not understand.

    I gather, based on the stories about this name change, that the Kinko’s concept is “struggling.” But clearly it wasn't struggling in 2004 when FedEx bought it.

    So the question I would ask is simple: Why?

    Is it the name? Somehow I doubt. In fact, I’m willing to bet that for many of us who have used Kinko’s over the years, the chain is going to remain Kinko’s, no matter what the name is on the front door.

    No, I’d suggest that maybe there’s something amiss either with the service being provided or the specifics of the offering. One of two things is likely – that either the people behind the counter aren’t doing their jobs, or somehow the basic Kinko’s offerings hasn’t kept up with the evolving needs of small business owners.

    My guess – and I’m probably not representative of Kinko’s broader customer base – is that it is the former. My experience is that the customer service can be hit or miss…it depends on the store, the location, the manager, and the personalities involved. But there isn’t much consistency.

    The decision to lose the name – with no mention of addressing any of these other issues – strikes me as an example of what a lot of companies do when faced with “struggling” operations. They look for the easy fix, the so-called low-hanging fruit. But these aren’t always the problems…and these moves won’t do anything other than cost the company money for new signs.

    Published on: June 3, 2008

    Dow Jones reports that Wal-Mart has launched a free Internet classified advertising service that allows people to sell or buy pretty much anything they want. The service is accessible through Walmart.com, currently carries some 30 million items – ranging from foreclosed homes to basset hounds – and has been created through an alliance with Oodle.com, which already was in the Internet classified ads business.
    KC's View:
    One or two of the stories I read about this suggested that the new Wal-Mart classified would compete with services such as Craigslist.com…but I’m guessing that there are things for sale on Craigslist that never will see the light of day on Wal-Mart’s site.

    Not that this is a criticism…

    Published on: June 3, 2008

    • The Washington Post this morning reports that “world food production must rise by 50 percent by 2030 to meet increasing demand, U.N. chief Ban Ki-moon told world leaders Tuesday at a summit grappling with hunger and civil unrest caused by food price hikes. The secretary-general told the Rome summit that nations must minimize export restrictions and import tariffs during the food price crisis and quickly resolve world trade talks.”

    • GMDC this week presented its 2008 Lifetime Achievement Award to Norton Sarnoff, President of Handi-Foil Corporation, at its General Merchandise Marketing Conference in Orlando, Florida. Sarnoff served as Chairman of GMDC’s General Merchandise Advisory Board in 1991, and was a GMDC Board member for seven years, from 1985 to 1992.

    KC's View:

    Published on: June 3, 2008

    Bo Diddley, the blues singer and guitarist who helped to create the foundations for rock ‘n roll, died yesterday at age 79.
    KC's View:

    Published on: June 3, 2008

    I love it when MNB users file their own reports about what they are seeing in the marketplace….such as this one:

    Yesterday, I attended a lacrosse jamboree in Somers, CT where there were hundreds of girls/boys and their families watching great lacrosse all day. Among a few team tents, there were vendors selling lacrosse equipment and local Somers' folks selling hot dogs and Costco purchases but what struck me was the quite prominent STARBUCKS tent. I dodged it at first because I wasn't prepared to pull the cash from the wallet at that ungodly hour on a Sunday morning (7:30) although the caffeine did finally call. I walked over and saw a beautiful display of muffins, scones, donuts, cookies and jugs of caffeine-laden coffee and refreshing iced Tazo passion tea. FREE. All 100% free. Yes, FREE. I almost passed out. All the muffins and caffeine I wanted for FREE. I did not take advantage, I assure you. Although the excitement of FREE in this day and age did make me quite giddy.

    At one point, an entire team of lacrosse players swarmed the tent after a hot game. There were two very kind, generous workers fielding these girls at the tent offering fresh iced passion tea and all the baked goods their metabolisms could handle -- all the time smiling.

    I yelled, "What do you guys say to Starbucks?" The girls all screamed, "Thank you!"

    Talk about early brand loyalty. If I were 12 years old, that's an experience I'd never forget -- keep me coming back for more. At 42, it's still an experience for which I am eternally grateful. Thank you, Starbucks. Step aside, DD and your free iced coffees, Starbucks is back in the coffee game!


    The folks in Seattle will no doubt be pleased to read this.

    Also regarding Starbucks and its current travails, one MNB user wrote:

    The Starbucks brand has positioned itself to be the “3rd Place.” I have watched over the years, being a Starbucks fan, as their coffee appeared in the best restaurants, then airlines, and then their own retail locations…I also watched a troop of ex-NIKE boys go to Seattle to create the myth of the 3rd place. Also being an ex-NIKE boy…that is when they lost me as a customer. They tried to reinvent what the third place looked and felt like…when the original look and feel was IT. I hope Schultz can rediscover the lost attitude of the Starbucks 3rd place…it’s a great concept.




    Got a couple of emails in response to yesterday’s commentary about the basic nature of the food chain, and where both animals and humans fit into it.

    MNB user Bill Bodine wrote:

    Thanks for your response to the comment you published regarding treatment of animals in the food chain. You couldn’t be more correct when you stated that farmers don’t hate animals just because they understand that their animals will be a source of food. Farmers care for their animals every day of the year. When they go to their barns, the care of the animal is at the top of their minds. Farmers provide a comfortable environment, food, water, medical treatment, etc. for their animals because it is the right thing to do and it helps assure a safe and quality food supply.

    You are also unfortunately correct that you will probably get in trouble for your comment. I am sure the activist community will start e-mailing you soon.

    Thanks again for supporting livestock farmers and the meat industry.





    Responding to yesterday’s brief piece about an interview with former Wal-Mart executive Don Soderquist, one MNB user wrote:

    From a person who worked for and knew both Mr. Sam and Mr. Soderquist, I can only think of one more Wal-Mart HERO that is missing from this list of GREAT LEADERS and that's Mr. David Glass. All three of the leaders while different in the style, always share the same views, thoughts and believes. I can think of very, very few companies that have been bless to have had such great leaders all at the same time. They all wanted to take care of the customers and associates and trust me they made sure that all of us knew that, that was our mission as well. "The customer is the Boss, and our associates make the difference" were not just sayings but were words of action for all. The world is a better place to live do to these three great Wal-Mart leaders.




    And, we got the following email from MNB-fave Glen Terbeek:

    You wrote, "There is no question that retailers are going to have to defend their turf using price and value as their primary weapons. But they also would be well advised to define value in a number of ways. Customers may be cutting back, but they will retain many of the same aspirations that they had before the economy hit the skids…and retailers that can figure out how to satisfy both impulses will have an advantage."

    You are right on again. If shoppers are forced to give up many of their large indulgences such as travel, new cars, clothes, and other big ticket items due of the economy, food may be the small indulgence to satisfy some of their frustrations for whatever disposable income they have left.

    The trick for the industry to remember is that it isn't the price per pound or unit that matters, it is the price per serving that counts. Maybe meat should be cut into smaller pieces, or smaller apples should be offered, or even the amount in a packaged item should be reconsidered. The good news is that people have to eat regardless of the economic environment, and the supermarkets should get a larger percentage of their total spend, including discretionary, if they do the right things.

    KC's View: