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    Published on: June 4, 2008

    Variety reports this morning that Warner Bros. has signed a deal with Safeway to promote the retailer’s Eating Right Kids line of healthy foods and beverages, making it easier to identify healthy options; the line will hit store shelves this summer.

    According to the story, “As part of a licensing deal with Warner's consumer products unit, Safeway's Eating Right Kids packaging will exclusively feature such characters as Bugs Bunny, Tweety, Taz, Sylvester, Wile E. Coyote, Roadrunner, Marvin the Martian and Daffy Duck … Overall product line covers more than 100 items across 30 categories including breakfast foods, portable meals, dairy, snacks and beverages. Products are formulated based on the most recent dietary recommendations from several federal and state agencies, including the Dept. of Health and Human Services, the Dept. of Agriculture, Alliance for a Healthier Generation, as well as California's school nutrition guidelines.”

    Variety also notes that “as part of the deal, Warner Bros. said it will no longer feature its Looney Tunes characters on unhealthy food packaging, other than certain ice cream products or birthday cakes.”

    KC's View:
    Appropriate that Bugs Bunny get involved in this project, since he famously once said, “Carrots are divine... You get a dozen for a dime, it's maaaa-gic!”

    Magic indeed. Kudos to Safeway for a smart move.

    That’s all folks…

    Published on: June 4, 2008

    Information Resources Inc. (IRI) has released a new study, “IRI Times & Trends Special Report: Competing in a Transforming Economy,” that essentially argues that regardless of whether the nation officially is in a recession, the US economy is most assuredly undergoing a significant transformation that can been in increased prices, high unemployment and declining real estate values.

    “These burdens,” says Thom Blischok, president of IRI Consulting and Innovation, “are driving fundamental shifts in what consumers buy and where they shop. Consumers are forced to make tradeoffs. Competing in this new, evolving economy requires fine-tuned pricing, promotion, assortment and brand development strategies that are built on an in-depth understanding of a changing consumer in a transforming economy. The challenges of growing in this economy are significant, but there are windows of success.”

    Among the key findings:

    • “Escalating prices have bred exceptionally high price sensitivity, driving declining demand across multiple categories, growth in private label, trial of lower-priced brands and accelerated channel migration.”

    • “Long-standing consumer purchase drivers, including convenience and health and wellness, are losing some momentum; consumers are foregoing ultra-convenience, and some shoppers are unable to afford healthier foods.”

    • “Consumers are increasing purchases of basic ingredients and meal components due to reduced restaurant spending and are decreasing purchases of ‘non-essentials’.”

    KC's View:
    Transformation.

    That’s a serous word. But the argument that IRI makes is a compelling one, and it is an argument that we’ve been advancing around here for some months.

    It just feels like the world is changing. Culturally. Economically. Environmentally. Geo-politically. It just feels like the old assumptions are falling away, and that everything is in play, from how we work to how we travel to how we perceive our customers to what kind of world we are going to leave our children. (I say this on a day when it has been reported that General Motors is looking to unload its previously profitable and prestigious Hummer division, and that Ed McMahon may lose his Beverly Hills house because of the mortgage crisis. Talk about dominoes falling…)

    This isn’t cynicism or pessimism…rather, I think it is a time of tremendous opportunity, if we marshal our forces and collective intelligence and deal with reality. And even have the tenacity and temerity to think we can shape a better, more sustainable reality.

    Published on: June 4, 2008

    The Dallas Morning News has a nice piece about the Dallas Farmers Market, suggesting that its current direction reflects a larger truth about the food business.

    “The Dallas Farmers Market is caught up in a trend in which chef and consumer demand for locally produced fruits, vegetables, meats and artisan foods is converging with an increase in people who are eager to provide them,” the News writes. “The convergence feeds off environmental interests that include organic foods, sustainability, animal welfare and reducing carbon imprints, as well as a desire to know about a food's origin. You see it not only at the Dallas Farmers Market, but also in the growth of regional markets and the popularity of stores such as Central Market, Whole Foods Market and Sprouts Farmers Market.

    “Chefs have always been concerned about flavor. And nothing beats farm-fresh foods – from a juicy Texas peach or tomato to chicken that's been pasture-raised or a delicate, handmade cheese from a farm 20 miles away. Big changes to make the Dallas market more foodie-friendly are yet to come. But small ones, such as the effort to attract more farmers as sellers, already are making a difference.”

    KC's View:
    Small changes almost always precede big changes...and one of the things that has to happen in the food industry is the education of customers that can make big changes possible.

    I was talking to a friend the other day who is a regular shopper of farmers’ markets, and he was telling me about how he was talking to an acquaintance about her first experience shopping at one. She was complaining about the lack of variety, saying that they only seemed to have certain products…and was chagrined when he explained to her that the whole nature of shopping and eating local products means paying attention to seasonality.

    That’s the crux of the dilemma facing stores looking to focus on local foods. Shoppers may walk through the door with certain expectations…and retailers may have to educate, illuminate, and even, occasionally dissuade them.

    Published on: June 4, 2008

    USA Today reports that Starbucks, in yet another effort to reconnect with a customer base that it fears could be slipping away to economic hard times as well as to some of its competitors, has begun offering two hours of free Wi-Fi each day to patrons who use one of its Starbucks Reward Cards at least once a month.

    New card holders also are getting a voucher for a free drink.

    The Wi-Fi service is being provided via AT&T; Starbucks is in the process of phasing out its relationship with T-Mobile.

    KC's View:
    Close but no cigar.

    As has been said here many times, Starbucks ought to just go the whole way and provide free Wi-Fi in its stores. I think that such a move is inevitable, and the need for baby steps in that direction escapes me.

    It is interesting, by the way, that Reuters had a story yesterday saying that “record high U.S. gas prices threaten a new level of pain for casual dining restaurants stuck between value-oriented fast food and high-end eateries whose customers can afford to shrug off the economy's woes.” And one of the major victims of these new consumer priorities, experts told the news service, is likely to be Starbucks, which is described as being “at risk.”

    Free Wi-Fi won’t solve this problem. But it shouldn't hurt.

    Published on: June 4, 2008

    The Boston Herald reports that “nearly two dozen lawsuits arising from a data breach at Hannaford Bros. Co. are likely to be consolidated into a single class-action lawsuit, with two competing groups of law firms vying to lead the case.”

    The security breach is believed to have potentially compromised more than four million credit and debit cards used at both Hannaford and Sweetbay stores, both of which are owned by Delhaize. According to the Herald, at least 22 lawsuits have been filed, and a panel of federal judges is expected to rule on how they can best be consolidated.
    KC's View:
    Any chance that as the two competing groups of law firms fight over which one gets to lead the case, it will have the same sort of impact as when matter meets antimatter?

    Published on: June 4, 2008

    Published reports out of Alabama say that the opening early last month of a new Publix store in Gulf Breeze, and the company’s apparent plans to open additional units in the southwest part of the state, suggests real and significant change in how people in that region do their supermarket shopping.

    The Mobile Press-Register suggests that the shift could be akin to what happened in the 1990s, when Wal-Mart came to the region with the first of 11 supercenters – which forced the merger of Delchamps and Jitney Jungle, and eventually the failure of Delchamps to survive.

    KC's View:
    The feeling on the part of experts – especially Burt Flickinger III, who is one of the smartest guys in the business – is that this is a smart move for Publix, which will be able to dominate the upper end of the market. Wal-Mart, in turn, will have the lower end of the market. Getting squeezed, in the inevitable and unappetizing middle, will be Winn-Dixie and Bruno’s.

    Published on: June 4, 2008

    The Washington Post this morning reports that South Korean president Lee Myung-bak has retreated from his pledge to open his nation’s borders to US meat imports; the change of mind occurred because of public concerns there that such a move would increase the risk of mad cow disease in South Korea.

    According to the Post, the South Korean government “asked the United States on Tuesday to refrain from shipping beef from animals that were more than 30 months old at the time of slaughter, which many people here believe raises the risk of mad cow infection. Until the U.S. government complies, it appears that all beef imports will remain on hold.”

    KC's View:

    Published on: June 4, 2008

    • The Washington Post reports this morning that the Center for Science in the Public Interest (CSPI) is asking the US Food and Drug Administration (FDA) “to ban the use of eight artificial colorings in food, asserting that the additives may cause hyperactivity and behavior problems in some children.” The FDA released a statement saying that the dyes have been tested and that there is no reason for a ban.

    • The Wall Street Journal this morning reports that JM Smucker Co. is expected to acquire the Folgers Coffee brand from Procter & Gamble for a price tag that could be north of $2 billion. The move would almost double the size of Smucker and, according to the Journal, “will catapult Smucker into the leading position in the coffee market. The brand, though, has to contend with the popularity of Starbucks Corp.'s chain of coffee stores and the proliferation of gourmet coffee brands.”

    • The Seattle Times reports that Haggen and Top Food stores “will give free prenatal vitamins and fluoride supplements to anyone who has a prescription for them beginning June 4. No insurance plan is required for the handouts.”

    • The Wall Street Journal reports that Tyson Foods is voluntarily withdrawing – albeit under pressure – the “antibiotic-free” labels that it has been using on chicken products for the past year. The company said it was doing so despite the fact that the labels were approved by the US Department of Agriculture (USDA), saying that it was “due to uncertainty and controversy over product labeling regulations and advertising claims.” Tyson said in a statement that it was doing so “in order to preserve the integrity of our label and our reputation as a premier company in the food industry,” and that the company believes that “there needs to be more specific labeling and advertising protocols developed.”

    The controversy – which was generated by some of Tyson’s competitors – was linked to Tyson’s use of using ionophores, an antibiotic that the Journal describes as “widely used in the industry but considered less harmful by some because, generally, it is administered to animals and not humans.”

    KC's View:

    Published on: June 4, 2008

    • Ahold-owned Stop & Shop announced that Jim Wonderly, the company’s vice president of GM/HBC, has been promoted to the role of vice president of pharmacy for both Stop & Shop and Giant Food.

    At the same time, Joel Berman, previously the company’s regional pharmacy manager and senior director of pharmacy operations, has been named vice president of pharmacy operations.
    KC's View:

    Published on: June 4, 2008

    • Walgreen said that its May sales were up 10 percent to $5 billion, from $4.6 billion during the same period a year ago. Same-store sales for the month were up 3.9 percent.

    For the nine-months of the year to date, Walgreen said that its sales were $44.4 billion, up 10.1 percent, on same-store sales that were up 4.5 percent.
    KC's View:

    Published on: June 4, 2008

    …will return.
    KC's View: