retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: June 20, 2008

    MUNICH – Thursday was a day in which CEOs challenged attendees at the CIES World Food Business Summit here to change their approach to business. And offered examples of how they have done so.

    For example…

    • Alain Caparros, CEO of the REWE Group, which operates in 14 European countries and generates more than $67 billion in annual sales, told the assembly, “We must change fundamental aspects of our business. We must revolutionize parts of it. And we must get started quickly.

    “Most of the things we do today are based on traditional business models, or on sector customs, if you will. If we continue to take this approach, then – I fear – we, retail and industry, will drive off a cliff side by side.”

    Increasingly, Caparros said, “We see that our customers in grocery retailing expect much more from us than low prices. They want ‘fair’ prices and ‘fair trade.’ And this approach should be a business-defining attitude, and not just a marketing gag. Customers are extremely sensitive to the ethical, social and environmental aspects of our business … We are locked in a new qualitative competition for customers’ trust. Here, we can create something of substance or fail. There is nothing in between, I’m afraid.”

    One example cited by Caparros: “Since the beginning of this year, the REWE Group in Germany has been using electricity generated completely from renewable energy sources. Today, we are Germany’s biggest user of bio-electricity. This is not some sort of environmental fad. Rather, it is a responsibility that we assume in our portion of the value chain – in our warehouses and in our supermarkets.

    “Many of our customers are assuming this responsibility in their homes as well. What about our suppliers? Are they also taking responsibility for our natural resources?

    “In the future, our customers will pay much closer attention to the way that products are made and processed. For this reason, environmental protection is not only sensible, but also good for business. It creates a competitive edge and builds a solid foundation for tomorrow’s turnover.”

    In other words, good for business…even as it is good for the planet.

    Also of interest was Caparros’ take on the European consumer: “We are stubborn, idiosyncratic and erratic. Our actions no longer follow any particular law: We drive Porsches and scrimp on groceries. We combine Prada with H&M and fly off to Paris with a ticket costing 28 euros for a luxury weekend at the Ritz or Plaza Athenee.

    “The logic of simple truths – black and white, good and bad – no longer exists. Our society has brought forth new types of customers from the jumble of attitudes and influences, experienced emotions and changes. Today, our customers are smart shoppers or hybrid consumers or clever cosmopolitans or illiquid traditionalists.” And, he said, these “idiosyncratic and erratic” customers increasingly are seeking retail solutions to their specific life challenges…and that it is in understanding this challenge and meeting it that retailers can created the kind of added value that will differentiate them in the marketplace.

    (To be fair, this was a somewhat different take on consumer trends than that offered by Stephan Grunewald, managing director of the Rheingold Institute, who suggested that if you really put German consumers “on the couch,” you find out that they are being politically correct in their concerns about sustainability out of a sense of guilt. His premise seemed to be that as baby boomers age and become more affluent, they realize that they have lost touch with their youthful ideals, and so become politically correct because they feel guilty about that.

    I have no idea if he’s right about this or not. I do know that during his presentation, which was given in German, he used a word that was instantly translated as “erectile,” which woke the audience up and got everybody’s attention. Once again, a CIES speaker broke new ground…)

    • There also was an excellent presentation by Franck Riboud, chairman/CEO of Groupe Danone, in which he described his company’s efforts to “bring health through food to the largest number of people,” and how this mission has been realized in Bangladesh, where 41 percent of the population is under the age of 14, 56 percent of the population is illiterate, 60 percent of the population lives on less than two cents a day, and just five percent of the population has access to tap water. “Classic business models and affordability don't allow us to reach the poor,” he said, so the company developed a joint effort with a socially responsible bank to build a factory there that not only employs local people, but makes yogurt that is designed specifically to meet the locals’ nutritional needs. There’s one factory now, he said, but the company hopes to build two next year and have as many as 50 in Bangladesh in 10 years – all small, local facilities that can provide low-cost, quality product while supporting and bolstering the local economy.

    • Muhtar Kent, the president/COO of the Coca-Cola Co. – and soon to become CEO with the retirement of Neville Isdell – spoke of “manual distribution centers” that have been set up in Africa that allow independent entrepreneurs to set up business on behalf of the company. There are more than 2,000 of them at present, he said, many of them owned and run by women, and the company expects to establish thousands more in the next few years, creating tens of thousands of jobs and generating upwards of $300 million in revenue. Kent described this as a “virtuous cycle of community building,” and said it is about “making the right choices, the right decisions to run the business better…to create a culture of sustainability.”

    • Mark Price, the managing director of Waitrose, described in his presentation how his company has created a different kind of sustainable culture – one in which employees are not just treated as owners, but in fact have a stake in the business. Last year, he said, every employee – from the top to the bottom – got a 20 percent bonus based on the company’s performance…and the company publishes its numbers every week so that everybody within the organization can know how he or she is doing. The company maintains boats, country houses and even golf clubs that all employees have equal access to. And, because workers are highly committed to the success of the business, Waitrose has just a 24 percent employee turnover rate and a minimal number of sick days taken by employees, which in turn allows the company to spend more money on training, which raises the bar even further, and the cycle continues.

    One other thing about Price. You need to check out his blog on www.Waitrose.com, in which he opens up about his life, his work, and even his ongoing attempts to lose weight. It is an impressive piece of work, mostly because it engenders a sense of community that many grocers miss out on.


    Riboud. Kent. Price. Three guys who appear to be putting their money and efforts where their mouths are.

    As Ray Anderson, chairman of a flooring company called Interface which has made a major commitment to developing a sustainable approach to its business, put it, “it isn’t enough not to do any harm. You also have to do good … What if every decision we made took into account the impact on people seven generations from now?”

    Good question.

    More to come…

    KC's View:

    Published on: June 20, 2008

    USA Today reports on a new study by the Business Roundtable saying that 31 percent of the nation’s CEOs expect to cut their payrolls in the coming months – up from 22 percent who said the same thing way back in April 2008.

    Here’s the interesting thing. These cuts are expected to be a reaction to the housing crisis and the increased cost of energy, but these same CEOs say that they expect sales and capital investments to remain at current levels of even improve between now and the end of the year.

    According to USA Today, “That's consistent with expectations from the Federal Reserve and other economists who say they think the fragile economy will strengthen later this year and into next year — even as the nation's unemployment rate, a lagging indicator of business health, rises. As in the past, many employers won't want to ramp up hiring until they are sure the economy is really back on a firm footing.”

    KC's View:
    I’m not as sure as the Federal Reserve and these economists that we’re in for any sort of sustained or meaningful rebound by the end of the year, especially if gas prices and unemployment rates continue to rise. In fact, if there’s a rebound despite these two trends, wouldn’t that rebound be defined as illusory?

    I would suggest that if executives really expect a rebound to come, this would be a good time not to lay people off…but rather to use the moment to go out and aggressively get new customers, market new services and products, and establish a beachhead on the landscape of consumer expectations. Act as if you are dealing from a position of strength…because if the competition is weakened or just is acting like it, that’s a perfect time to make inroads.

    Published on: June 20, 2008

    Salon carried a story the other day about a study saying that while a lot of companies try to limit how much their employees use the Internet for personal reasons while working, not only are they not succeeding but they may be missing the point” and that “installing filters to block access to Web sites and e-mail services could backfire by reducing job satisfaction and thus productivity.”

    According to the story, “Many legitimate reasons may be at play, speculates R. Kelly Garrett, one of the study's authors and a communications professor at Ohio State University. For instance, people may use the Web at work to help balance job and life= responsibilities; with the personal matters taken care of from work, they can focus on the task at hand … The study didn't attempt to go much beyond trying to gauge the types of employees who use the Internet for personal reasons. Garrett said more research is needed to determine motives and measure effects on productivity. Those studies, researchers say, would then help companies figure out how best to control and accommodate personal use.”

    KC's View:
    Obviously there are limits, depending on what kind of job a person has.

    But it seems to me that in 2008, companies expect much of their employees. They should want their employees to feel a sense of ownership about their jobs, to think of jobs as life choices, not just a paycheck. This, I think, is what distinguishes good and great employees from people who just fill chairs.

    If this is the expectation, then companies should understand that there are not clear line of delineation between life and work, that one often will intrude on the other. In the best of circumstances, this will be good for the company and good for the life. Both will be enriched.

    Besides, filters and blacklists suggest a lack of trust. I, for one, wouldn’t want to work for anyone who didn’t trust me. (Been there, done that, got the t-shirt.)

    Published on: June 20, 2008

    Check out the Time magazine piece from a week or so ago about hotel companies that are creating a new kind of experience for road warriors under the age of 35.

    “Like the changing focal point of the home--the combined kitchen/family room where everyone now hangs out--the Gen Y customer wants a similar seamless experience on the road,” Time writes. “That's a big change from boomers, who wanted to be rewarded for traveling. They expected a hotel that was nicer than their home, which Fairmont, Four Seasons and Ritz-Carlton have provided since the '80s. According to Y Partnership, this next generation of travelers wants casual food available anytime, free Internet, views and self-service check-in/checkout. Gen Y may represent only 9% of business travelers at the moment, but it is 75 million strong. Change is coming. Fast.”

    Take, for example, the new chain of hotels being developed by the Starwood chain. “Party on, traveler. The company that started the industry's bedding wars is looking to define a new segment called ‘lifestyle’ hotels: chic, sociable and affordable. The first Aloft outpost opened in Montreal in June, and a further 17 openings are planned this year. Aloft is focused on attracting the road warrior, a customer who has grown up with the irreverent, friendly service of Southwest Airlines, the open office, the work-among-the-crowd Starbucks culture, and is accustomed to innovative design, via Target and Ikea, at a good price. The next generation of business travelers may have meetings with Wal-Mart in Bentonville, Ark., but they don't want to be separated from their hip, urban social lifestyle.

    “And they won't have to, since the competition is revving up new hotel designs too. Hotel Indigo, which InterContinental Hotel Group launched in 2004, is rolling out in Miami, St. Louis, Mo., and 12 other locations. NYLO, created in part by an executive from Starwood's W, hopes to trade on Manhattan coolness. Even familiar faces like Wyndham, Hyatt, Marriott's Courtyard and Hilton's Garden Inn are getting wired for Gen Y.”

    KC's View:
    Tell you one thing. I’m about 20 years older than their target audience, and I want to stay in these hotels. (Though the other people there will probably think I’m sort of chaperone or hall monitor.) It just sounds like a lot more fun.

    Tell you something else. People in the retail business – especially the food retail business, which remains the place where people shop most frequently – ought to be reading this story and asking themselves, “how are we changing for this next generation of consumers?”

    And if they aren’t planning such fundamental changes, they have to ask themselves if they plan on being relevant in about a decade or so.

    Published on: June 20, 2008

    MSNBC reports that as high interchange fees combined with high gasoline prices are putting the squeeze on gas stations around the US, some owners and managers are taking steps to fight the trend – they are no longer accepting credit cards.

    They do so at some risk, since not taking credit cards will actually inconvenience a great many customers; NACS says that two-thirds of all station transactions last year were by credit or debit cards. But stations are stressed, and looking for any alternative to bankruptcy.

    KC's View:
    For the record, if I can get a cheaper gasoline price at a station that does not accept credit or debit cards, I’ll go there and make sure I bring cash. Hell, I’ll bring barter if that’ll help me keep my costs down.

    Discounts-for-cash clearly is a better way to go, but in some states there are legal impediments to such a policy. So simply banning the cards strikes me as a smart business move.

    Published on: June 20, 2008

    • The Northwest Arkansas Morning News reports that “Wal-Mart is working with farmers to incorporate more local sourcing into its produce assortment, Jack Sinclair, executive vice president for grocery merchandise, said Thursday … The retailer's move toward locally-sourced products is part of a broader initiative to ethically source its merchandise and promote social responsibility.”

    According to the story, “Wal-Mart's new local sourcing efforts benefit the company two-fold -- it reduces transportation costs and supports its sustainability goals to sell products are earth-friendly and ethically sourced.

    “It will also mean customers will find produce that is fresh and ripe, and helping support the local economy.”

    KC's View:
    Bingo.

    The other stuff is important, but it is the “produce that is fresh and ripe, and helping support the local economy” that will resonate with shoppers.

    And ought to worry competing retailers who should have staked out this territory years ago.

    Published on: June 20, 2008

    CNN reports that the US Congress, as expected, has overridden President Bush’s veto of the $300 billion farm bill.

    According to the story, “Two-thirds of the $300 billion in spending for the farm bill will go for nutrition programs such as food stamps. Another $40 billion will go toward farm subsidies, and $30 billion is allocated for payments to farms to keep land idle and other environmental programs.”

    President Bush vetoed the bill because he objected to what CNN describes as “its continued subsidies for the wealthy and its use of budget gimmicks to hide a $20 billion increase in spending.” But the veto override was by a comfortable margin, and the bill has become law.

    • Kroger announced that its unionized employees in the Indianapolis, Indiana, area have ratified a new contract agreement that covers more than 4,200 employees at 60 stores in the region.

    KC's View:

    Published on: June 20, 2008

    • Michael T. Vail, senior vice president of operations at Delhaize-owned Sweetbay Supermarkets, has been promoted to president/COO of the Florida chain of stores. He succeeds Shelley Broader, who left the company earlier this month to become president/COO of the Michael’s arts and crafts chain.

    Crain’s New York Business reports that Steve Michaelson is leaving FreshDirect, the New York-based pure play online grocer where he has served as CEO, to become chief marketing officer at Supervalu.

    Michaelson will be succeeded at FreshDirect by Richard Braddock, the former Citibank executive who also served for six years as chairman/CEO of Priceline.com. Braddock has been serving as chairman of FreshDirect.

    Crain’s Chicago Business reports that Alwyn B. Lewis, who was ousted from his role as CEO of Sears Holdings Corp. last January, will become the new president/CEO of Potbelly Sandwich Works, which has more than 200 stores in 13 states. His goal is to turn the chain into an “iconic national brand,” according to a statement released by the company. Lewis is a former COO of Pizza Hut.

    KC's View:
    Running Potbelly has got to be more fun than working for “Fast Eddie” Lampert, trying to turn around a dinosaur of a retailer with no seeming relevance in 2008 America. (Hell, it may not even be relevant for 1980 America. Which is sort of the problem.)

    As for the FreshDirect change….well, if I am not mistaken, Braddock was one of the people primarily responsible for Priceline’s misconceived attempt to get into the “name your own price for groceries” business. Which was one of the dumbest business schemes that I’ve ever run up against.

    Not for Priceline, which was trying to get a piece of the grocery pie. But for the grocers who opted into the program, thereby giving away whatever differential advantage they had and turning their stores into basic commodities. Priceline should have known from the beginning that the program was built on a faulty foundation…but it didn’t, or it ignored that reality, and the whole thing collapsed. As it deserved to.

    By the way, I’m not piling on here. I used to work for a website called IdeaBeat, and was consistently critical of Priceline’s grocery efforts at the time. In fact, I was so critical that the majority owners of IdeaBeat threatened to fire me if I kept it up, because they thought that such attitude was unbecoming. (In the end, they couldn’t fire me because I had a contract, and I outlasted both Priceline’s grocery business and IdeaBeat. Living well is the best revenge.)

    Published on: June 20, 2008

    MNB took note yesterday of a New York Times review of the Ikan system, which allows people to scan the packaging of empty products at home, compile an online shopping list by doing so, and then use a one-click system to have the items delivered to your house. The Times liked it, and MNB thinks that this is at least one part of the future of food retailing. Got a lot of email on this, though…

    MNB user Glen Terbeek wrote:

    To close the productivity gap between creating demand and fulfilling demand, Ikan should also scan bar codes in ads. How often does a shopper see a great item advertised and/or offered by coupon, and forget about it by the time they get to the store? A huge marketing productivity waste. This could be another great opportunity for the manufacturer to go around the retailer or to force the retailer to carry their items.

    MNB user Chris Esposito wrote:

    While this seems like a time saving device that many city dwellers may adapt to, for the manufacturers, it keeps the individual out of the store, and is thus lost opportunities for new products, sale items, etc. Also, it seems that an individual would become stuck in a rut of purchasing the same items over and over. Maybe for some, this is the way they like it, but to me, the "treasure hunt" aspect of going to the grocery store, seeing what's new and fresh, getting ideas from what it see, makes the chore easier. Maybe for your staples, it works, but for your fresh items, I'd always like to see and touch them first.

    The question is whether some consumers would give up the store visit to automatically replenish certain staple items. I think the answer is yes….whether this is good for retailers and manufacturers and new product introductions and impulse sales or not.

    MNB user Marc Jones wrote:

    Seems to me retailers have two choices when presented with technology like the Ikan…recognize that shopping in your store is a painful experience and take advantage of technology like this to make it easier for your customers to perform the chore…OR…make their shopping trips such fun, and educational, and rewarding experiences that a visit to your store easily outweighs the “fun” of scanning an item. Of course some may argue that the smart choice is to do both – to pursue both the science and art of retailing. Maybe they’re right but I think the second option is certainly a lot more fun to be a part of…granted I’m not a CIO.

    Those would be the choices. As someone once said, when you come to this fork in the road, take it.

    MNB user Richard Heineman wrote:

    This system assumes that the consumer wants to always stay with the same brand and store taking into account no other factors such as price or sales. For example the consumer might have 2 or 3 preferred brands that they are willing to choose and make the decision in the store based on price or other factors such as projected use. Jam might be used for a recipe or on toast. The consumer might choose different brands based on this use. This system cannot really take off until it is interactive and provides options. In addition no consumer package goods company is going to be happy unless they have the ability to influence of purchase at point of sale. Given the control that the retailer has over the customer they would be advised to supply the unit for free. I for one am not willing to give that much power to the retailer; I do not have enough faith in any of them. There are no Wegmans where I live.

    The system needs to be connected by Wi-Fi to the Internet to allow full on-line shopping to allow the consumer to split his order between retailers and to allow comparison shopping. The display would provide alternatives to the scanned item based on sales and other factors. This can be advertising supported with display ads from CPG companies or competing retailers. Offers can be split where if grape jelly is scanned the options can be offered with multiple brands and multiple stores. The software can be written to take into account the delivery fees to make sure that the orders are not split between retailers such that a bad economic decision is being made. Of special interest is that Wal-Mart will be the big winner from this technology. The people most likely to use this system are not currently Wal-Mart customers and this would be almost all incremental business.

    It is indeed a brave new world. We have only just started in the information age.


    MNB user Michael Griffin wrote:

    My initial reaction to reading the NYT article excerpts regarding the Ikan system was positive...this seems like a great idea. Following a bit more consideration, I can't see that this would ever have any place in my life.

    For those consumers who can afford to ignore the rising cost of food, and are not concerned with actually 'shopping' for food, this could be all it's cracked up to be. But those who do not have to shop for the best prices would also be likely to afford to shop the store perimeter...the fresh departments of deli, bakery, produce, meat, seafood, and more.

    For those who are not concerned with the perimeter of the average grocery store, all those wonderful fresh items that need to be seen, touched, smelled, and in some cases tasted (for those who like to sneak the odd grape), this might be the solution. In order to realize the savings on gas and time, the personal selection and/or consumption of fresh items must be abandoned. For me, fresh foods are a critical component of my (and my family's) diet, and buying a melon requires a different investment when compared with buying a can of beans. Shopping for staples takes very little additional time, no extra gas, and the checkout line is the same either way. So, is this device/system all it's cracked up to be? For me, the answer is an emphatic no!

    As I shop, I like to be influenced. If the broccoli looks particularly good that day, it quickly finds its way into my basket. I want to be teased and influenced as I make my decisions. New products find their way on to the shelves of my preferred retailer all the time, and I want to see them there, read the label, contemplate the flavors and health benefits, and make my decisions 'in the field'. Shopping, for me, is a process that I enjoy...not all of the process, but most of it.

    I suppose it's possible that my shopping habits and requirements are different than those of the average food consumer. I guess that remains to be seen. Online grocery shopping has already gained considerable traction.

    Then again...I never understood that one either. My suggestion: get your kids off the PlayStation, take them to the grocery store, and interact with them and your community.


    MNB user Jonathan Birchall is skeptical:

    As a NYC resident I read with interest bordering on amazement the incredibly boosterish NYT piece on IKAN - which I'd had a look at and then concluded it was a hopeless project that no one should waste their money on.

    First, they claim they thought of it so it would be easier to decide what packages to recycle - do we really need to acquire a large piece of equipment to do that? Secondly, why not just await the day we'll all have refrigerators that scan EPC/RFID tags on food and automatically update our shopping lists - is it worth spending $400 in the
    meantime for a large plastic scanning device that clutters up your shelf top? My household used a pen and pad on a cupboard door - which seems far more efficient.

    It is doomed, I tell you, doomed.


    Maybe this iteration won’t work. But I prefer to consider the words of Jean-Luc Picard: “Everything is impossible. Until it’s not.”



    Finally, I got a great email in response to the CIES coverage:

    I enjoyed your reporting today…very interesting. However…the grey and blue suited gentlemen and ladies attending are the wrong audience. The suits should have sent their summer interns, young managers, boxboys, sons and daughters…for they are the ones that will make the changes you are thinking about today…not the suits – their behavior is locked in and unlikely to change.

    Excellent point. CIES does have a terrific Future Leaders conference each year at which many of these same issues are discussed. But wouldn’t it be interesting if CIES 9and other trade associations) encouraged the CEOs to bring along a Future Leader under the age of 35 to sit in on these meetings…not just to be exposed to these ideas but also to offer feedback to the CEO on what seems relevant and should be made a priority. It would be like an instant B.S. test…

    KC's View:

    Published on: June 20, 2008

    As I mentioned earlier this week, I was and am a huge Tim Russert fan, and was saddened by his death last week. Even so, I have had a few moments during the past seven days, especially as I’ve read about his wake and funeral from some distance while in Munich on business, when I wondered about the attention paid to Russert on the networks. Too much? Too self-referential? Maybe, and I wondered if perhaps a line was being crossed – from love and respect, not crass exploitation, but a line nonetheless.

    But on second thought, maybe not. Maybe all the attention paid to Russert’s death actually is a learning moment for the rest of us. About the importance of family and friendships. About priorities. About authenticity. About the importance of finding one’s own voice and using it for good effect.

    There was a presentation here at the CIES World Food Business Summit in Munich by Caroline Sami, who has a company called ID:OLOGY that says that its goal and mission is “to awaken the best in the human spirit.” It was hard to figure out how to write about Sami’s talk because to try to boil it down to a hundred words or so would make it sound less profound than it was.

    But one of her central tenets was the importance – no matter what one does for a living – of finding your own voice and using it effectively. And while she never mentioned Russert – the audience, with very few Americans, probably wouldn’t have known him – it occurred to me that this is precisely who she was talking about. And one of the things we learned during the last week was how that voice resonated to an extent that few people would have predicted.

    Extraordinary.

    I’ll tell you one other thing, and I say this is as a dad. Tim Russert had a lot of accomplishments, but there is nothing more impressive about his life than his son, Luke Russert, who demonstrated over the last week a level of grace and poise and eloquence and love for his old man that was breathtaking.




    Want more evidence that the world is changing? There was a story in USA Today recently noting that Americans drove 30 billion fewer miles between November 2007 and April 2008 than they did during the same six months a year earlier. That puts the miles driven by Americans during that six months at 2005 levels…when, extraordinarily enough, there were eight million fewer people in the US.

    If you don't think this trend is going to continue, then I think you are sadly mistaken.

    And here’s how you can tell a person’s mindset. Some people will say that the situation will “worsen,” meaning that people will continue to drive less and less. And some people will say that the situation is getting “better,” meaning that people are using less and less of a finite resource.

    Count me among the latter. And to make things even better, my wife and kids got me a bicycle for Father’s Day.




    Another sign of the coming apocalypse.

    The Washington Post reported the other day on the decline of the sentence. The problem is that young people, used to writing emails and sending text messages, are taking shortcuts that eliminate verbs and vowels. This creates, according to some experts, a kind of “creeping inarticulateness” and assaults the “basic component of human communication – the sentence” and, eventually, storytelling itself.

    The Post writes:

    “The sentence itself is a story, with a beginning, a middle and an end. Something happens in a sentence. Without subjects, there are no heroes or villains. Without verbs, there is no action. Without objects, nothing is moved, changed, destroyed or created. Plus, simple sentences clarify complex situations. (‘Jesus wept.’)

    “Since its invention centuries ago, the sentence has brought order to chaos. It's the handle on the pitcher, a tonic chord in music, a stair step chiseled in a mountainside.

    To combat writer's block, Ernest Hemingway advised: ‘All you have to do is write one true sentence . . . and then go on from there’.”

    Agreed. People don’t know how to write anymore. Don't take pleasure in a well-crafted sentence.

    Here’s a radical notion. Companies ought to invest serious money in making sure that all of their employees are literate. The ability to communicate, to write a simple declarative sentence, ought to be a prerequisite for getting a job, or at least keeping one.

    This may sound silly. But imagine how an improved ability to communicate could revolutionize an organization, from the top down. The bottom up. It could be spectacular.

    And could stave off the coming apocalypse.




    Let me be clear about this. I have no problem with extra bag fees by airlines. And I have no problem with them enforcing carry-on rules more strictly. The airlines have significant business issues, and it probably is better for all of us if they stay in business.

    But they start charging for water bottles – especially when you’re not allowed to carry liquids through security – and I’m going to have a little problem.

    That just strikes me as being a line they don't want to cross.




    By the way, I’m intrigued that even as the airlines announce all sorts of cutbacks, this story ran in the San Francisco Chronicle:

    “United Airlines is giving some passengers the option of plugging their iPod or iPhone into their seat's entertainment console to watch videos on their personal 15.4-inch screen - and all while the device charges.”

    That’s smart. It is a way of making the airplane more user-friendly at a time when other cutbacks threaten to alienate consumers.

    Just one problem. They are reserving the service for first class and business class travelers. Which at a time when prices are going through the roof, seems a little insulting to those of us who spend a massive amount of time on airplanes but do so in coach, because that’s what the budget will bear.




    Right now, plan on seeing the new Michael Mann movie, “Public Enemies,” which stars Johnny Depp as John Dillinger and Christian Bale as the FBI man, Melvin Purvis, who hunted him. The movie doesn’t come out until next summer, but they’ve been shooting in Chicago…and there is at least one scene that features a gifted young actor named David Coupe in a small non-speaking role.

    I’ve seen some stills from the set, and I couldn’t be prouder.




    I had a really yummy white wine the other night. (In most wine reviews, they use words like “bouquet,” “tannins,” “acidity” and “balance.” On MNB, you get “yummy.” Mostly because I don't completely understand what those other words mean, but partly because I think “yummy” is more descriptive. But I digress…)

    The Four Graces 2006 Pinot Blanc from Oregon is unbelievably good – so much so that when we finished that first bottle I went out and bought a bunch more. My wine guys, the estimable Nicholas Roberts Ltd., say the following about it: “Opening with aromas of nectarine and lush white peach, with a hint of pineapple, it’s visually vibrant with a charming light straw color and tint of pale green. The palate is soft and creamy with a bold mineral-laden finish that is perfectly balanced with fresh, crisp acidity. Drink now.”

    All of which is good. I’m sticking with “yummy.”

    Also worth noting that the wine has been produced by vintners committed to sustainable farming techniques.

    When we had it, I served it with grilled scallops, which I’d never made before. I got jumbo scallops and marinated them for about six hours in a wonderful Tequila Agave Marinade from Williams Sonoma, and then put them directly on the grill (with the grates being well greased, of course). Three to four minutes on one side, then turn the scallops and dust them lightly with a bit of Emeril’s Essence. Then another three minutes or so, and then they’re done…perfect to be served with a bit of pasta or rice.

    Unbelievable. And, if I do say so myself, yummy.




    That’s it for this week. Coming back to the states tomorrow…and while I will be on the road again all next week…MNB will still be around and kicking.

    Have a good weekend.

    Sláinte!!
    KC's View:

    Published on: June 20, 2008

    • The Northwest Arkansas Morning News reports that “Wal-Mart is working with farmers to incorporate more local sourcing into its produce assortment, Jack Sinclair, executive vice president for grocery merchandise, said Thursday … The retailer's move toward locally-sourced products is part of a broader initiative to ethically source its merchandise and promote social responsibility.”

    According to the story, “Wal-Mart's new local sourcing efforts benefit the company two-fold -- it reduces transportation costs and supports its sustainability goals to sell products are earth-friendly and ethically sourced.

    “It will also mean customers will find produce that is fresh and ripe, and helping support the local economy.”

    KC's View:
    Bingo.

    The other stuff is important, but it is the “produce that is fresh and ripe, and helping support the local economy” that will resonate with shoppers.

    And ought to worry competing retailers who should have staked out this territory years ago.

    Published on: June 20, 2008

    CNN reports that the US Congress, as expected, has overridden President Bush’s veto of the $300 billion farm bill.

    According to the story, “Two-thirds of the $300 billion in spending for the farm bill will go for nutrition programs such as food stamps. Another $40 billion will go toward farm subsidies, and $30 billion is allocated for payments to farms to keep land idle and other environmental programs.”

    President Bush vetoed the bill because he objected to what CNN describes as “its continued subsidies for the wealthy and its use of budget gimmicks to hide a $20 billion increase in spending.” But the veto override was by a comfortable margin, and the bill has become law.

    • Kroger announced that its unionized employees in the Indianapolis, Indiana, area have ratified a new contract agreement that covers more than 4,200 employees at 60 stores in the region.

    KC's View:

    Published on: June 20, 2008

    • Michael T. Vail, senior vice president of operations at Delhaize-owned Sweetbay Supermarkets, has been promoted to president/COO of the Florida chain of stores. He succeeds Shelley Broader, who left the company earlier this month to become president/COO of the Michael’s arts and crafts chain.

    Crain’s New York Business reports that Steve Michaelson is leaving FreshDirect, the New York-based pure play online grocer where he has served as CEO, to become chief marketing officer at Supervalu.

    Michaelson will be succeeded at FreshDirect by Richard Braddock, the former Citibank executive who also served for six years as chairman/CEO of Priceline.com. Braddock has been serving as chairman of FreshDirect.

    Crain’s Chicago Business reports that Alwyn B. Lewis, who was ousted from his role as CEO of Sears Holdings Corp. last January, will become the new president/CEO of Potbelly Sandwich Works, which has more than 200 stores in 13 states. His goal is to turn the chain into an “iconic national brand,” according to a statement released by the company. Lewis is a former COO of Pizza Hut.

    KC's View:
    Running Potbelly has got to be more fun than working for “Fast Eddie” Lampert, trying to turn around a dinosaur of a retailer with no seeming relevance in 2008 America. (Hell, it may not even be relevant for 1980 America. Which is sort of the problem.)

    As for the FreshDirect change….well, if I am not mistaken, Braddock was one of the people primarily responsible for Priceline’s misconceived attempt to get into the “name your own price for groceries” business. Which was one of the dumbest business schemes that I’ve ever run up against.

    Not for Priceline, which was trying to get a piece of the grocery pie. But for the grocers who opted into the program, thereby giving away whatever differential advantage they had and turning their stores into basic commodities. Priceline should have known from the beginning that the program was built on a faulty foundation…but it didn’t, or it ignored that reality, and the whole thing collapsed. As it deserved to.

    By the way, I’m not piling on here. I used to work for a website called IdeaBeat, and was consistently critical of Priceline’s grocery efforts at the time. In fact, I was so critical that the majority owners of IdeaBeat threatened to fire me if I kept it up, because they thought that such attitude was unbecoming. (In the end, they couldn’t fire me because I had a contract, and I outlasted both Priceline’s grocery business and IdeaBeat. Living well is the best revenge.)

    Published on: June 20, 2008

    MNB took note yesterday of a New York Times review of the Ikan system, which allows people to scan the packaging of empty products at home, compile an online shopping list by doing so, and then use a one-click system to have the items delivered to your house. The Times liked it, and MNB thinks that this is at least one part of the future of food retailing. Got a lot of email on this, though…

    MNB user Glen Terbeek wrote:

    To close the productivity gap between creating demand and fulfilling demand, Ikan should also scan bar codes in ads. How often does a shopper see a great item advertised and/or offered by coupon, and forget about it by the time they get to the store? A huge marketing productivity waste. This could be another great opportunity for the manufacturer to go around the retailer or to force the retailer to carry their items.

    MNB user Chris Esposito wrote:

    While this seems like a time saving device that many city dwellers may adapt to, for the manufacturers, it keeps the individual out of the store, and is thus lost opportunities for new products, sale items, etc. Also, it seems that an individual would become stuck in a rut of purchasing the same items over and over. Maybe for some, this is the way they like it, but to me, the "treasure hunt" aspect of going to the grocery store, seeing what's new and fresh, getting ideas from what it see, makes the chore easier. Maybe for your staples, it works, but for your fresh items, I'd always like to see and touch them first.

    The question is whether some consumers would give up the store visit to automatically replenish certain staple items. I think the answer is yes….whether this is good for retailers and manufacturers and new product introductions and impulse sales or not.

    MNB user Marc Jones wrote:

    Seems to me retailers have two choices when presented with technology like the Ikan…recognize that shopping in your store is a painful experience and take advantage of technology like this to make it easier for your customers to perform the chore…OR…make their shopping trips such fun, and educational, and rewarding experiences that a visit to your store easily outweighs the “fun” of scanning an item. Of course some may argue that the smart choice is to do both – to pursue both the science and art of retailing. Maybe they’re right but I think the second option is certainly a lot more fun to be a part of…granted I’m not a CIO.

    Those would be the choices. As someone once said, when you come to this fork in the road, take it.

    MNB user Richard Heineman wrote:

    This system assumes that the consumer wants to always stay with the same brand and store taking into account no other factors such as price or sales. For example the consumer might have 2 or 3 preferred brands that they are willing to choose and make the decision in the store based on price or other factors such as projected use. Jam might be used for a recipe or on toast. The consumer might choose different brands based on this use. This system cannot really take off until it is interactive and provides options. In addition no consumer package goods company is going to be happy unless they have the ability to influence of purchase at point of sale. Given the control that the retailer has over the customer they would be advised to supply the unit for free. I for one am not willing to give that much power to the retailer; I do not have enough faith in any of them. There are no Wegmans where I live.

    The system needs to be connected by Wi-Fi to the Internet to allow full on-line shopping to allow the consumer to split his order between retailers and to allow comparison shopping. The display would provide alternatives to the scanned item based on sales and other factors. This can be advertising supported with display ads from CPG companies or competing retailers. Offers can be split where if grape jelly is scanned the options can be offered with multiple brands and multiple stores. The software can be written to take into account the delivery fees to make sure that the orders are not split between retailers such that a bad economic decision is being made. Of special interest is that Wal-Mart will be the big winner from this technology. The people most likely to use this system are not currently Wal-Mart customers and this would be almost all incremental business.

    It is indeed a brave new world. We have only just started in the information age.


    MNB user Michael Griffin wrote:

    My initial reaction to reading the NYT article excerpts regarding the Ikan system was positive...this seems like a great idea. Following a bit more consideration, I can't see that this would ever have any place in my life.

    For those consumers who can afford to ignore the rising cost of food, and are not concerned with actually 'shopping' for food, this could be all it's cracked up to be. But those who do not have to shop for the best prices would also be likely to afford to shop the store perimeter...the fresh departments of deli, bakery, produce, meat, seafood, and more.

    For those who are not concerned with the perimeter of the average grocery store, all those wonderful fresh items that need to be seen, touched, smelled, and in some cases tasted (for those who like to sneak the odd grape), this might be the solution. In order to realize the savings on gas and time, the personal selection and/or consumption of fresh items must be abandoned. For me, fresh foods are a critical component of my (and my family's) diet, and buying a melon requires a different investment when compared with buying a can of beans. Shopping for staples takes very little additional time, no extra gas, and the checkout line is the same either way. So, is this device/system all it's cracked up to be? For me, the answer is an emphatic no!

    As I shop, I like to be influenced. If the broccoli looks particularly good that day, it quickly finds its way into my basket. I want to be teased and influenced as I make my decisions. New products find their way on to the shelves of my preferred retailer all the time, and I want to see them there, read the label, contemplate the flavors and health benefits, and make my decisions 'in the field'. Shopping, for me, is a process that I enjoy...not all of the process, but most of it.

    I suppose it's possible that my shopping habits and requirements are different than those of the average food consumer. I guess that remains to be seen. Online grocery shopping has already gained considerable traction.

    Then again...I never understood that one either. My suggestion: get your kids off the PlayStation, take them to the grocery store, and interact with them and your community.


    MNB user Jonathan Birchall is skeptical:

    As a NYC resident I read with interest bordering on amazement the incredibly boosterish NYT piece on IKAN - which I'd had a look at and then concluded it was a hopeless project that no one should waste their money on.

    First, they claim they thought of it so it would be easier to decide what packages to recycle - do we really need to acquire a large piece of equipment to do that? Secondly, why not just await the day we'll all have refrigerators that scan EPC/RFID tags on food and automatically update our shopping lists - is it worth spending $400 in the
    meantime for a large plastic scanning device that clutters up your shelf top? My household used a pen and pad on a cupboard door - which seems far more efficient.

    It is doomed, I tell you, doomed.


    Maybe this iteration won’t work. But I prefer to consider the words of Jean-Luc Picard: “Everything is impossible. Until it’s not.”



    Finally, I got a great email in response to the CIES coverage:

    I enjoyed your reporting today…very interesting. However…the grey and blue suited gentlemen and ladies attending are the wrong audience. The suits should have sent their summer interns, young managers, boxboys, sons and daughters…for they are the ones that will make the changes you are thinking about today…not the suits – their behavior is locked in and unlikely to change.

    Excellent point. CIES does have a terrific Future Leaders conference each year at which many of these same issues are discussed. But wouldn’t it be interesting if CIES 9and other trade associations) encouraged the CEOs to bring along a Future Leader under the age of 35 to sit in on these meetings…not just to be exposed to these ideas but also to offer feedback to the CEO on what seems relevant and should be made a priority. It would be like an instant B.S. test…
    KC's View:

    Published on: June 20, 2008

    As I mentioned earlier this week, I was and am a huge Tim Russert fan, and was saddened by his death last week. Even so, I have had a few moments during the past seven days, especially as I’ve read about his wake and funeral from some distance while in Munich on business, when I wondered about the attention paid to Russert on the networks. Too much? Too self-referential? Maybe, and I wondered if perhaps a line was being crossed – from love and respect, not crass exploitation, but a line nonetheless.

    But on second thought, maybe not. Maybe all the attention paid to Russert’s death actually is a learning moment for the rest of us. About the importance of family and friendships. About priorities. About authenticity. About the importance of finding one’s own voice and using it for good effect.

    There was a presentation here at the CIES World Food Business Summit in Munich by Caroline Sami, who has a company called ID:OLOGY that says that its goal and mission is “to awaken the best in the human spirit.” It was hard to figure out how to write about Sami’s talk because to try to boil it down to a hundred words or so would make it sound less profound than it was.

    But one of her central tenets was the importance – no matter what one does for a living – of finding your own voice and using it effectively. And while she never mentioned Russert – the audience, with very few Americans, probably wouldn’t have known him – it occurred to me that this is precisely who she was talking about. And one of the things we learned during the last week was how that voice resonated to an extent that few people would have predicted.

    Extraordinary.

    I’ll tell you one other thing, and I say this is as a dad. Tim Russert had a lot of accomplishments, but there is nothing more impressive about his life than his son, Luke Russert, who demonstrated over the last week a level of grace and poise and eloquence and love for his old man that was breathtaking.




    Want more evidence that the world is changing? There was a story in USA Today recently noting that Americans drove 30 billion fewer miles between November 2007 and April 2008 than they did during the same six months a year earlier. That puts the miles driven by Americans during that six months at 2005 levels…when, extraordinarily enough, there were eight million fewer people in the US.

    If you don't think this trend is going to continue, then I think you are sadly mistaken.

    And here’s how you can tell a person’s mindset. Some people will say that the situation will “worsen,” meaning that people will continue to drive less and less. And some people will say that the situation is getting “better,” meaning that people are using less and less of a finite resource.

    Count me among the latter. And to make things even better, my wife and kids got me a bicycle for Father’s Day.




    Another sign of the coming apocalypse.

    The Washington Post reported the other day on the decline of the sentence. The problem is that young people, used to writing emails and sending text messages, are taking shortcuts that eliminate verbs and vowels. This creates, according to some experts, a kind of “creeping inarticulateness” and assaults the “basic component of human communication – the sentence” and, eventually, storytelling itself.

    The Post writes:

    “The sentence itself is a story, with a beginning, a middle and an end. Something happens in a sentence. Without subjects, there are no heroes or villains. Without verbs, there is no action. Without objects, nothing is moved, changed, destroyed or created. Plus, simple sentences clarify complex situations. (‘Jesus wept.’)

    “Since its invention centuries ago, the sentence has brought order to chaos. It's the handle on the pitcher, a tonic chord in music, a stair step chiseled in a mountainside.

    To combat writer's block, Ernest Hemingway advised: ‘All you have to do is write one true sentence . . . and then go on from there’.”

    Agreed. People don’t know how to write anymore. Don't take pleasure in a well-crafted sentence.

    Here’s a radical notion. Companies ought to invest serious money in making sure that all of their employees are literate. The ability to communicate, to write a simple declarative sentence, ought to be a prerequisite for getting a job, or at least keeping one.

    This may sound silly. But imagine how an improved ability to communicate could revolutionize an organization, from the top down. The bottom up. It could be spectacular.

    And could stave off the coming apocalypse.




    Let me be clear about this. I have no problem with extra bag fees by airlines. And I have no problem with them enforcing carry-on rules more strictly. The airlines have significant business issues, and it probably is better for all of us if they stay in business.

    But they start charging for water bottles – especially when you’re not allowed to carry liquids through security – and I’m going to have a little problem.

    That just strikes me as being a line they don't want to cross.




    By the way, I’m intrigued that even as the airlines announce all sorts of cutbacks, this story ran in the San Francisco Chronicle:

    “United Airlines is giving some passengers the option of plugging their iPod or iPhone into their seat's entertainment console to watch videos on their personal 15.4-inch screen - and all while the device charges.”

    That’s smart. It is a way of making the airplane more user-friendly at a time when other cutbacks threaten to alienate consumers.

    Just one problem. They are reserving the service for first class and business class travelers. Which at a time when prices are going through the roof, seems a little insulting to those of us who spend a massive amount of time on airplanes but do so in coach, because that’s what the budget will bear.




    Right now, plan on seeing the new Michael Mann movie, “Public Enemies,” which stars Johnny Depp as John Dillinger and Christian Bale as the FBI man, Melvin Purvis, who hunted him. The movie doesn’t come out until next summer, but they’ve been shooting in Chicago…and there is at least one scene that features a gifted young actor named David Coupe in a small non-speaking role.

    I’ve seen some stills from the set, and I couldn’t be prouder.




    I had a really yummy white wine the other night. (In most wine reviews, they use words like “bouquet,” “tannins,” “acidity” and “balance.” On MNB, you get “yummy.” Mostly because I don't completely understand what those other words mean, but partly because I think “yummy” is more descriptive. But I digress…)

    The Four Graces 2006 Pinot Blanc from Oregon is unbelievably good – so much so that when we finished that first bottle I went out and bought a bunch more. My wine guys, the estimable Nicholas Roberts Ltd., say the following about it: “Opening with aromas of nectarine and lush white peach, with a hint of pineapple, it’s visually vibrant with a charming light straw color and tint of pale green. The palate is soft and creamy with a bold mineral-laden finish that is perfectly balanced with fresh, crisp acidity. Drink now.”

    All of which is good. I’m sticking with “yummy.”

    Also worth noting that the wine has been produced by vintners committed to sustainable farming techniques.

    When we had it, I served it with grilled scallops, which I’d never made before. I got jumbo scallops and marinated them for about six hours in a wonderful Tequila Agave Marinade from Williams Sonoma, and then put them directly on the grill (with the grates being well greased, of course). Three to four minutes on one side, then turn the scallops and dust them lightly with a bit of Emeril’s Essence. Then another three minutes or so, and then they’re done…perfect to be served with a bit of pasta or rice.

    Unbelievable. And, if I do say so myself, yummy.




    That’s it for this week. Coming back to the states tomorrow…and while I will be on the road again all next week…MNB will still be around and kicking.

    Have a good weekend.

    Sláinte!!
    KC's View: