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    Published on: July 3, 2008

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    The Boston Globe had a story this week about a new technology start-up that has created a service called, which is designed to allow people shopping in the supermarket to have access to user-generated reviews to help choose products in a wide variety of categories. The Globe reports that “is part food search engine, part community website. Users can look up food by name or by specifying criteria such as gluten-free or calorie count. They can also read about and review products, create shopping lists, make profiles, and join communities of like-minded eaters.”

    The service is about to be made available via mobile web browsers, which means that it will be very simple for a person on aisle six in a specific store to query other shoppers about the quality of this or that product. It means that diabetics or people allergic to gluten will be able to turn to each other for advice about what kinds of foods they can eat. It means that parents trying to figure out how to get their kids to eat vegetables can use the Internet to access ideas and suggestions while they are in the store…which is precisely when they are thinking about shopping.

    The Globe suggested that the supermarket may not be the best place for such social interactions over products that on the face of it seem fairly simple to understand. But I think that underestimates the complexity of the food shopping experience.

    Let’s say, for the sake of argument, he average store has 45,000 items. I wonder how many of those items customers actually “know” – and by “know,” I mean they maybe know the cost, something about the nutritional value, and maybe something about the taste. Do you think they know one percent of the items in the average supermarket, which would be 450 items? Little high? How about one-half of one percent, which would be 225 items? Still too high? How about one-tenth of one percent, which would be 45 items? Am I getting closer?

    In one way, the lack of familiarity that most customers have with products in the supermarket is one of the best arguments for limited assortment stores, whether they be called Trader Joe’s, Aldi, Stew Leonard’s, or Fresh & Easy. In another way, this lack of knowledge about merchandise carried by most supermarkets is a great argument for why technologies like Zeer make sense, especially for a younger generation of consumers that finds the grocery store an increasingly foreign land, and who are comfortable with technologies that make it easier to navigate and understand.

    Zeer, and other, similar technologies that are likely to emerge in coming months and years, can be the supermarket’s enemy, or they can be the supermarket’s friend. If they turn into the retailer’s enemy, however, it will because the business was unwilling or unable to understand why they must embrace such possibilities.

    The world of Zeer and the young people who will gravitate to such technologies is the world we all have to figure out how to live in. Denial or hostility aren’t an option, at least not a legitimate one. We all have to figure out how to adopt such technologies and use them to build our business, engender loyalty, and create a new and sustainable business model that works.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: July 3, 2008

    The Organic Trade Association (OTA) and the International Dairy Foods Association (IDFA) have gone to court to challenge labeling rules imposed by the Ohio Department of Agriculture.

    According to a statement released by OTA, they are “challenging as unconstitutional an ‘emergency’ rule seeking to prevent labeling that tells a consumer whether the cows were treated with rBST, the synthetic growth hormone manufactured and sold by Monsanto under the brand Posilac. The lawsuit represents a determined effort not only to protect the consumer’s rights to receive truthful information about how organic milk and dairy products are produced, but also to protect the rights of organic dairy farmers and processors to communicate truthfully with consumers.”

    Forbes reports that “the Ohio rule, adopted in May and scheduled to begin Sept. 19, says any dairy producer that advertises its milk as hormone-free must place a disclaimer next to the label that the U.S. Food and Drug Administration has found no significant difference between milk coming from cows treated with the hormone and those that are not. The disclaimer must be in seven-point size and in the same font, case and color, the rule states.”

    The statement goes on: “The federally mandated USDA National Organic Standards prohibit the use of hormones to promote growth or increase production, genetically engineered organisms (GMOS), antibiotics and toxic, persistent pesticides and have a rigorous system for inspection, certification and verification which protects consumers from false claims. In issuing its rule prohibiting organic products from being labeled ‘produced with milk from cows that have not been treated with synthetic growth hormones’, the State of Ohio, however, has essentially chosen not to recognize the federal Organic Foods Production Act (OFPA).”

    Ohio officials have defended their rule as legal and appropriate.

    In its statement, OTA blames Monsanto for the dispute, saying that the company was “the driving force behind getting FDA approval for rBST and then turned its substantial resources towards lobbying the Ohio Department of Agriculture for this new ‘emergency’ rule.”

    KC's View:
    I have to admit to being a little torn on this one. On the one hand, I believe in full transparency – and that means telling both sides and letting the consumer make the decision.

    On the other hand, it seems implicit that “organic” means no added hormones or antibiotics…so it doesn’t even matter whether the hormones make a difference in the milk or not. They just ought not be there…because organic is organic is organic.

    Seems to me that this debate isn’t really about full disclosure. It is about eating way at the meaning of “organic” wherever and whenever possible. That isn’t a good idea, because it eventually will wreck consumer confidence in what the label means.

    It’s interesting. Where I buy my milk, Stew Leonard’s, there long has been a sign saying that its milk contains no added hormones or antibiotics, even though the milk is not advertised as being organic. Stew’s can do that because the company has its own farm, cows and dairy bottling plant – it controls the entire dairy supply chain. As a customer, I’ve never gone out of my way to buy organic milk….but I always have found the Stew Leonard’s sign to be reassuring.

    Published on: July 3, 2008

    The new TNS Retail Forward ShopperScape Survey suggests that as gasoline prices skyrocket, shoppers are moving away from the convenience stores where they traditionally have fueled their cars and are embracing so-called “alternative gasoline retailers” such as supercenters, supermarkets and warehouse clubs. One-third of shoppers are using such alternative outlets, which often offer special deals tied to loyalty marketing programs, compared to just 22 percent who were using such locations three years ago.

    In addition, TNS Retail Forward says that alternative gasoline retailers now own 13 percent of total US fuel sales, and that this number will grow to 16 or 17 percent by 2012.

    KC's View:
    Gas prices keep going up and I’m going to get into the hay business. Because horses are going to start looking like a real good alternative.

    Published on: July 3, 2008

    The Chicago Tribune reports this morning that “the expanding availability of printable coupons online, of paperless digital coupons that can be accessed from cellphones and store loyalty cards, and an explosion of Web sites and bloggers focused on sharing coupon information are also feeding a comeback of what had been a fading Sunday tradition in American households. But it's mainly the economy that has people of more diverse ages and income clipping and clicking. ”

    The story notes that last year was the first time in 16 years that coupon usage did not decline in the US, and that expectations are that the use of coupons in American supermarkets is likely to spike this year based on current redemption trends.

    The challenge to both manufacturers and retailers, according to the Tribune story, is to figure out which delivery methods are most relevant to the new breed of coupon-sensitive shoppers…and to use these systems in a way that gets the biggest bang for the buck.

    KC's View:
    It occurs to me that while the couponing industry may be able to revive itself on the backs of the current troubled economy, they still need to figure out how to be relevant once prosperity returns. (If it ever does. You read about all the layoffs taking place around the country, and you can't help but wonder…)

    I’d still be more impressed if I actually got coupons that had some connection to products and categories I actually buy.

    Published on: July 3, 2008

    USA Today reports this morning that the US Centers for Disease Control and Prevention (CDC) is now focusing its attention on fresh salsas made with tomatoes and other ingredients such as onions, jalapenos, garlic and cilantro as they continue to look for the cause of a nationwide salmonella outbreak that has sickened almost 900 people and sent more than 100 to the hospital.

    The salsas that seem to be concerning the CDC is the fresh variety made in restaurants, not the commercial kind that comes in jars and is sold in supermarkets and other food stores. Most of the people who got sick are reported to have eaten in Mexican restaurants, hence the current interest in salsa by the CDC.

    KC's View:

    Published on: July 3, 2008

    The Los Angeles Times reports this morning that Kroger-owned Ralphs Supermarkets in California spent the day restocking their meat counters with ground beef from a different supplier after all of the product from Nebraska Beef was pulled off the shelves because of concerns about E. coli contamination.

    Originally, the recall by Kroger was limited to the stores in the Midwest but as expanded yesterday to all of its stores in more than 20 states. Kroger now is asking its customers to return any ground beef purchased by its shoppers that has sell-by dates of between May 21 and July 3.

    Nebraska Beef has recalled 531,707 pounds of ground beef produced since May after some of it was linked to illness suffered by some 38 people in Ohio and Michigan.

    KC's View:

    Published on: July 3, 2008

    On the heels of yesterday’s opening of its 62nd Fresh & Easy Neighborhood Market in the western US – this one in Manhattan Beach, California - Tesco announced that it plans to open one of the small format stores in South Los Angeles, an inner city neighborhood closely associated with gang violence, that has been underserved by the mainstream supermarket business.

    The store will be opened at the corner of Central Avenue and Adams Blvd., according to Tim Mason, CEO of Fresh & Easy, who said that the location – along with a unit opened in Compton earlier this year - underlines the company’s desire to open stores in a wide variety of venues and serve people in disparate economic circumstances.

    KC's View:

    Published on: July 3, 2008

    • The Wall Street Journal reports that Smithfield Foods, the largest pork producer in the US, is selling a five percent stake in the company for $122 million to COFCO Limited, China's government-owned agricultural-trading company, a deal that the paper says “spotlights China's growing importance in the world meat market.”

    • Supervalu-owned Jewel-Osco said this week that it has sold more than one million green reusable shopping bags since it introduced them last August, which it sees a proof positive that shopper concerns for the environment are increasing and becoming part of their ongoing behavior.

    KC's View:

    Published on: July 3, 2008

    • Price Chopper Supermarkets/Golub Corporation announced that Jody Plonski, a Zone Director with the company, has been promoted to the position of Regional Vice President of Operations, replacing Jay Ropietski. He will report directly to David Golub, Vice President of Store Operations.

    • Hannaford Supermarkets announced that Beth Newlands Campbell has been promoted from senior vice president of retail operations and business strategy, has been promoted to executive vice president, with additional oversight responsibilities for real estate, design and construction.

    At the same time, Hannaford has promoted Mark Doiron, senior vice president of merchandising and distribution, to executive vice president, with additional oversight responsibilities for information technology.

    KC's View:

    Published on: July 3, 2008

    • Family Dollar Stores said that its Q3 net income rose 7.1 percent to $64.67 million, from $60.37 million during the same period a year earlier. Quarterly sales rose almost three percent to $1.702 billion, on same-store sales that were up 0.1 percent.

    • Walgreen said that its June sales rose 9.9 percent to $4.81 billion compared to a year ago, on same-store sales that were up 3.4 percent for the month.

    KC's View:

    Published on: July 3, 2008

    Lots of reaction to yesterday’s announcement that Starbucks is closing some 600 stores as it attempts to get its coffee house in order. But since it is a holiday weekend and you probably have a lot to do, let me just offer two of them:

    MNB user Glen Terbeek wrote:

    Like every large retailer, Starbucks started off with a very successful local offering. They then wanted to leverage their success by rolling out the concept across the country and world, and by making it more efficient. So they did things like go public, automate the barista activities, add additional products, and make central decisions about everything from furniture to a standard blend of coffee.

    The problem is that there is nothing more local than the coffee house experience and coffee tastes. Has Starbucks made the same mistake that Sears, Kmart, and others have made? I would guess that a Starbucks at a university is much different then one at a surfing beach, or downtown location.

    Maybe it is time to reorganize into many small logical marketing units, each with the authority to anticipate what that customer set desires. History shows that a centralized retailer can often grow fast, but then reaches a point of declining returns, that are difficult to stop, because the centralized, functional organization cannot respond to the market needs.

    As a coffee lover, I hope that isn't the case for Starbucks.

    One of the great things about Glen’s email is that it isn’t just about Starbucks. It is about something far greater. We need to pay attention.

    MNB user Bob McMath wrote:

    I am reminded of the "icon" which developed over Krispy Kreme donuts. Everyone went crazy for them, and the stock rose to unbelievable heights before the bubble burst. Part of their trouble was the over expansion. Particularly the loss of the charm of going into one of their stores and picking up a package of hot, fresh donuts and digging into the box right then and there.

    They placed them in supermarket cabinets and on shelves, where the chances are you might take home a box of yesterday's or even the day before's donuts -- no longer the really great experience of the individual stores. Down went the stock, and down went the image. They are still around, but who ever talks about them with the same reverence these days.

    One must remember that no product, not even Coke or any other icon lasts forever, unchallenged. Even the "charm" of effervescent drinks has challenged Coke and Pepsi to continue to introduce new beverage types which no long have bubbles! Look at Sears stores, which used to be the leading retail chain in the US. Or General Motors, which was the leading car manufacturer/seller in the world. Or Volkswagen as the undisputed leader in the small car category.

    Our population is fickle, and goes from one trend or fad to another as the winds blow. Remember some of the various diet fads that took the market with a storm, only to fade away.

    Starbucks has an unusual flavor which most people who have ever tried it could recognize. It is due, I am told, by actually over roasting the beans. So their various coffee variations all taste different from others because they are "burned." Anyway, other chains like McDonalds and Yum Yum and other operations have developed their own "tastes." and many people like them -- for a greatly reduced price I might add. With the economy in the mess it is right now, people may even be exchanging that $4.00 cup of coffee for an extra gallon of gas to get to work or to go shopping or to go to the doctors, etc!

    Nothing lasts forever as the unchallenged leader which can go ever upwards.

    It is, I think, the ability to surmount challenges such as these that distinguishes great retailers from the rest. We’re about to find out which category Starbucks falls into.

    KC's View:

    Published on: July 3, 2008

    Not that you are interested in my morning routine, but most days I get up between 5 and 5:30 am and go into the kitchen, where I start the coffee (Starbucks Verona, natch), let Buffett, our exuberant lab, out and then feed her, fetch the New York Times from the driveway, wash down my Lipitor, Nexium and baby aspirin with a small smoothie made up of orange and mango juice, banana and vanilla yogurt, and then eat a small bowl of watermelon.

    I tell you this because of the last step in the process before I sit down at the laptop – eating a small bowl of watermelon. I’m thinking that I may have to change my routine because of a story I saw this week saying that scientists are working to develop watermelons that will have Viagra-like properties.

    Real scientists. At Texas A&M University.

    I don't completely understand the science here. (I actually understand very little science.) It has something to do with a chemical called citrulline that is found in watermelons that the body converts into an amino acid that has, shall we say, beneficial effects on the body. I gather it will take some cross-breeding and genetic engineering to get watermelons to the point where eating some will have the same “enhancing” impact as the little blue pill.

    But they’re working on it.

    Over the years I frequently have been asked how I get up for writing MorningNewsBeat each day.

    Little did I know.

    There was a good piece in the NY Times the other day about how a shopping center developer in Fort Worth, Texas, decided to do something radical when designing a new mixed-use facility – not only did it hire two female consultants, but it also invited a couple of dozen women from the local area to be part of the planning process; these women “weighed in on dozens of features, like the center’s layout, landscaping, parking options, pedestrian walkways and outdoor art.”

    Here’s what’s amazing. The Times writes that “listening to women shoppers may seem like an entirely logical thing to do, yet many retail developers and consultants say such participation is often missing during the early stages of shopping center development.”

    And, I would guess, missing from the early stages of most retail store development.

    What’s wrong with this picture?

    Hopefully, things are changing. The Times notes that a number of shopping center developers are starting to use women shoppers as a sounding board much earlier in the process – not just relying on surveys and focus groups, but actually bringing them into the planning process and integrating their suggestions and desires into their plans.

    Smart. Very smart.

    How great is this.

    Trump’s Coastal Marina in Atlantic City, New Jersey, is being sold to a company that will work with Jimmy Buffett to turn the facility into a Margaritaville Resort & Casino.

    Not being a gambler, I’m not an enormous fan of Atlantic City. But when Margaritaville comes to town, I may have to change my mind.

    On the way own or on the way back, I’ll be able to stop at Mueller’s Bakery in Bay Head, New jersey, for the best crumb cake on the planet.

    Plus, in Atlantic City itself, I seem to remember that there is a great sandwich place called the White House Sub Shop that serves outstanding food. (Am I remembering this right?)

    Yummm. Getting hungry just thinking about it.

    Now, if we can just get them to rechristen Atlantic Avenue as “A1A,” we’ll be all set.

    Had one of those magical moments last weekend. I was heading from my brother’s place in Redondo Beach, California, to Los Angeles International Airport. It was about 5:30 am, I’d picked up a latte at Starbucks in Manhattan Beach, and was driving north on Vista del Mar, listening to my iPod, which was plugged into the car stereo and was shuffling “my favorites.”

    Then, I made a right on Imperial Highway. And almost on cue, the iPod went to one of my favorite Randy Newman songs, “I Love LA.”

    The lyric?

    Rollin' down the Imperial Highway
    With a big nasty redhead at my side
    Santa Ana winds blowin' hot from the north
    And we was born to ride…

    So I rolled down the window and cranked up the music…because I was born to ride.

    It’s a good life.

    Here’s a story high on my list for this week:

    In The Netherlands, the government has banned smoking cigarettes indoors, including in restaurants and bars. The ban went into effect this week.

    The ban apparently also applies to so-called coffee shops and marijuana bars where people are able to buy and smoke pot.

    It does not apply to the actual smoking of marijuana, however.

    One story had a great line from one coffee shop owner: “It's the world upside down: In other countries they look for the marijuana in the cigarette. Here they look for the cigarette in the marijuana.”

    My book recommendation of the week: “Resolution,” a new western by Robert B. Parker, which picks up on the story he started in “Appaloosa.” Typical Parker prose – short, punchy sentences and crisp, revealing dialogue – is used to tell the story of gunfighters Virgil Cole and Everett Hitch, who find themselves caught in a moral dilemma in a small town where they are employed by a man intent on dominating the town’s government and businesses. The businessman is prepared to use whatever means necessary…which is where Cole and Hitch have to draw the line, governed as they are by an unspoken moral code.

    Plus, there are gunfights and horses.

    Classic stuff. The move version of “Appaloosa,” directed by and starring Ed Harris, along with Viggo Mortensen, Jeremy Irons, & Rene Zellweger, is due out in mid-September.

    Can’t wait.

    On these hot summer nights, sometimes a great beer is the only thing that tastes right. I’ve recently discovered Sankaty Light, a blonde ale made by Nantucket, Massachusetts-based Cisco Brewers, makers of the wonderful Whale’s Tale Pale Ale. On a hot night, a cold Sankaty is just perfect. My compliments to the brewers.

    KC's View:

    Published on: July 3, 2008

    Tomorrow is the Fourth of July, celebrated here in the US as Independence Day, a national holiday. So MNB won’t be posted tomorrow.

    And, as has become a tradition at this time of year, I’m going to take the week adjacent to the Fourth of July off…it is the beginning of the summer, the news cycle tends to be a little slow, and at this point in the year I can use the break. So this will be my last MNB until Monday, July 14…at which point I’ll be back, tanned, rested and ready.

    I know this isn’t a lot of time, but if you could fix the economy while I’m gone, I’d appreciate it.

    Have a great weekend…a great week…and I’ll see you on July 14.


    KC's View: