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    Published on: July 23, 2008

    There seems to be at least some confusion and resistance to the US Food and Drug Administration (FDA) newest approach to the salmonella outbreak that has sickened more than 1,200 people in 47 states. Now that tomatoes have been cleared as the source of the contamination and jalapeno peppers from a small Mexican packer are seen as a possible source, FDA is pushing for a voluntary recall of all jalapeno peppers in the US and is urging consumers who may have bought them to throw them out.

    The Los Angeles Times reports this morning that supermarkets in Southern California initially did not pull all the peppers from their shelves, but rather just those that came from Mexico. But then, after the FDA said that all peppers needed to be pulled – allegedly because it does not know where in the supply chain the contamination may have occurred – the chains there reversed themselves and pulled all the peppers.

    At the same time, MNB got an email from a user who asked not to be identified by name – but who works for a food industry company east of the Mississippi River – who made the following point about the current recall:

    The FDA, the MNB user wrote, has “discovered a problem at a small packer in McAllen, Texas, that handled Mexican peppers. For the last 3 months we have been buying all of our Jalapeno’s from Florida and South Carolina. We know exactly where our peppers came from and the growers who grew them, yet we and our retailers are required to throw them out. Now the FDA will attempt to correct the first mistake with a series of larger mistakes. You can trace the bad decisions on this situation.”

    KC's View:
    I suspect that these are not isolated cases, and that there is a lot of frustration in the produce community right now. One problem that the FDA has to address is how and where the salmonella contamination took place…but the longer-term problem may be how to restore an awful lot of lost credibility.

    Published on: July 23, 2008

    • The Baltimore Sun reports that “legislation that would have made Baltimore the second city in the nation to ban plastic bags at grocery stores and retail chains was killed by the full City Council last night. Intended to keep plastic bags from clogging waterways, the proposal would have required large stores - those with $500,000 or more in gross revenue - to bag groceries in paper or reusable bags only. Days after it was approved by a committee, the full council voted against the proposal, 11-3.”

    • The Seattle Post-Intelligencer reports that “Seattle city officials…moved a step closer Tuesday toward becoming one of the few major American cities to discourage paper and plastic bags in favor of reusable bags, and to ban polystyrene food and drink containers.

    “The full City Council is expected to vote on the proposals Monday that were passed Tuesday by a committee. If adopted, the new legislation will launch a 90-day campaign to educate residents and shoppers before the 20-cent per bag fee goes into effect on Jan. 1.

    “The ban on plastic foam food take-out containers and cups also will take effect that day, if approved. However, a ban on plastic meat trays will be delayed for a year, allowing stores time to figure out alternatives.”

    • The Los Angeles Times reports that “the Los Angeles City Council voted Tuesday to ban plastic carryout bags in the city's supermarkets and stores by July 2010 -- but only if the state fails to impose a 25-cent fee on every shopper who requests them. Council members said they hope an impending ban would spur consumers to begin carrying canvas or other reusable bags, reducing the amount of plastic that washes into the city's storm drains and the ocean.”

    KC's View:
    I still think that eventually we’re going to see the usage of plastic and paper disposable bags drop dramatically in the US – possibly because of legislation, possibly because consumers begin to realize that reusable canvas bags just make more environmental sense.

    A word to retailers – more and more I keep hearing shoppers tell me that they would love it if grocers would put up signs in the parking lot reminding them not to forget their canvas bags. (They want to use the bags but haven't gotten in the habit yet.) So do it! Customers want it. And it makes sense for your bottom line.

    Published on: July 23, 2008

    The New York Times this morning reports that “at the end of the summer, the gastronomic organization called Slow Food USA will host a little party for more than 50,000 people in San Francisco.

    “To get things ready, the mayor let the group dig up the lawn in front of City Hall and plant a quarter-acre garden. It will be the centerpiece of the festival, ambitiously named Slow Food Nation. Events will pop up all around the city over Labor Day weekend. Fifteen architects have volunteered to build elaborate pavilions dedicated to things like pickles, coffee and salami. Lecture halls have been booked, politicians invited and dinner parties planned. Nearly $2 million has been raised. And for the first time in its 10 year history, the notoriously finicky organization has embraced corporate partners like Whole Foods, Anolon cookware and the Food Network.

    “The Slow Food faithful say they want the festival to be the Woodstock of food, a profound event where a broad band of people will see that delicious, sustainably produced food can be a prism for social, ecological and political change. They also realize that it may be their best chance to prove that Slow Food, as a movement, is not just one big wine tasting with really hard to find cheeses that you weren’t invited to.”

    KC's View:
    It sounds like a great party…wish I could find a way to be in San Francisco to cover it.

    Part of the problem that the Slow Food movement seems to have, at least here in the US, is that there are people who perceive – perhaps with some justification – that its priorities are pro-hedonist, with a leftist political agenda that is anti-technology and anti-globalization.

    (It has not been my experience that most leftists are anti-technology and anti-globalization. They may indeed be pro-hedonism…though the headlines over the past few years would suggest that there are plenty of hedonists on both sides of the aisle.)

    The Times notes that Slow Food’s leadership would like people to perceive it as being interested in food as being more than just about cooking and eating….that there are environmental, cultural and economic benefits in looking at food through a broader, less mass-production focused prism. And I’m okay with that…there should be certainly room for that approach in a diverse food culture.

    Though I would have to admit that for me, the most important elements connected to food are, in fact, cooking and eating. Because that’s where all the pleasure is….and that’s what most important to me, even if it makes me a hedonist.

    Published on: July 23, 2008

    Good interview with retiring Procter & Gamble CMO Jim Stengel in Advertising Age in which he addresses his track record and legacy. Excerpts:

    On the achievements of the past seven years… “The company was in a new situation then. [P&G CEO A.G. Lafley] was new in the role. Our business was not as strong. We were about half the size we are today. ... We needed to get back at what we're fantastic at, which is loving brands, loving and delighting consumers, innovation and the desire to be the best in the world but to do it in the right way … We have a fantastic organization and agencies. If they can be day in and day out inspired to a higher purpose, a deeper meaning, via our brands and our marketing, we're unbelievable. That one word, ‘inspiration,’ is what keeps coming through. And that's what I hope my legacy to be. And I think it is. “

    On balancing creativity with discipline… “If you look at my story over the past seven years, it's been one of creativity, innovation and ROI. Look at the speeches made, the progress our company has made, the capabilities we've built over the past seven years. I think the magic is discipline and creativity. If you're off balance in either direction, you get off track. So it's very much part of the continued story … In tough economic times, it's ever more important to be focused on creativity and consumer value and ROI.”

    KC's View:
    It isn’t new, but it is good to be reminded about P&G’s commitment to “loving and delighting consumers” through innovation. Sometimes, I think, the food industry…especially on the retail side…forget about the importance of “delight.”

    Here are the questions I would ask if I were a retailer…

    Are shoppers delighted by some surprise (a new product, promotion, display) when they walk through the front door?

    Are there moments of surprise and delight scattered throughout the store, perhaps unusual sampling or educational opportunities that catch the customer off guard?

    And what am I doing to do something innovative at the front end, to turn what is usually the worst part of the shopping experience into something that differentiates my store?

    Some of the answers will be found in technology, some in product and some in people. But all of the answers will be rooted in both creativity and discipline … in making “delight” a central tenet in the shopping experience.

    Even in these tough economic times, the importance of “delight” cannot be underestimated as a differential advantage. Everybody is working to drive down their prices…and it will still be on the margins where many stores will establish their unique identities.

    Published on: July 23, 2008

    Bloomberg reports that the US Food and Drug Administration (FDA) plans to have regulators working full-time in China, India, Europe and Latin America to assure that manufacturers in those areas are meeting US safety standards. The Middle East also has been slated as a place where the FDA would like to have regulators on the ground.

    However, despite the fact that FDA Commissioner Andrew von Eschenbach announced his plans to station employees overseas in January, it is anticipated that these full-time employees won’t be stationed abroad until the end of 2009.

    KC's View:
    At which point we will be 25 percent of the way through the first McCain or Obama administration…so who knows what the leadership at FDA will look like, or what the priorities will be.

    I understand that there are some bureaucratic hoops through which the US has to jump in order to get investigators on the ground … though as a major importer of goods from all these countries, you'd think that we’d have enough clout to expedite the process.

    It just seems to me that if the FDA wants the citizens who pay for its existence through their taxes to take its efforts seriously, maybe it could do better than a two-year delay in stationing people in companies exporting products to the US.

    Published on: July 23, 2008

    The Charlotte Business Journal reports that Delhaize-owned Food Lion has begun to roll out the Guiding Stars nutrition labeling program that has been used to great success at the company’s Hannaford and Sweetbay chains.

    The system uses a proprietary algorithm to analyze every product in the store, and then awards one, two or three stars to products that qualify as good for you, better for you and best for you. Hannaford has said that sales of starred products have grown more significantly than similar products that did not earn stars.

    KC's View:

    Published on: July 23, 2008

    The Milwaukee Journal-Sentinel reports that John Nehring, the owner of the upscale V. Richards store in Brookfield, Wisconsin, and his store’s produce manager have been charged with knowingly buying stolen produce to sell in the store.

    According to the complaint, “the two paid $1,500 cash to a delivery driver for stolen cases of pineapple, peaches and boxes of Gala apples last summer. The produce included 70 cases of pineapples, 102 cases of peaches and 42 boxes of Gala apples, which in total were valued at $2,883.”

    The story goes on: “The fruit was stolen from the Milwaukee-based Tropic Banana Co., the complaint says. An employee of the N. Van Buren St. business confronted Nehring on Aug. 29 regarding the stolen produce, and both Nehring and Vasquez admitted to paying a driver for the stolen produce, according to the criminal complaint. Nehring told the employee that he would pay full price for the produce, the complaint says.

    “The driver, who has not been charged, told investigators that Vasquez asked him in July 2007 if he had anything he wanted to get rid of and that the store would give him a good price, the complaint says. The driver said he started taking items from the company’s warehouse and selling them to the store for cash. According to the complaint, all the stolen items were taken to V. Richards, the driver said.”

    The two men are scheduled to face the felony charges in court on August 6.

    KC's View:
    Could have been worse. Could have been jalapeno peppers.

    Published on: July 23, 2008

    • Costco Wholesale said yesterday that because of increased energy prices that have increased its costs, made fuel sales les profitable and also inhibited shoppers’ purchasing power, its earnings this year will be “well below” analysts’ estimates.

    The announcement comes after similar statements by Supervalu and Safeway, both of which have said that profit won’t meet projections.

    • The Wall Street Journal reports this morning that a fuel price war has broken out in the UK among some of its biggest grocers, with Tesco, Walmart-owned Asda and William Morrison Supermarkets all cutting per-liter gasoline prices over the past few days. Tesco’s cut included an even deeper discount for consumers who use its Clubcard loyalty program.

    Dow Jones reports that Tesco’s UK market share feel slightly in the last quarter from 31.5 percent during the second quarter a year ago to 31.3 percent this year. Walmart’s Asda Group saw its share grow to 16.9 percent from 16.7 percent a year ago. Sainsbury’s share of the market was down from 16.2 percent a year ago to 15.9 percent this year, while William Morrison Supermarkets saw its share grow from 11.1 percent to 11.3 percent.

    KC's View:

    Published on: July 23, 2008

    Reuters reports that Napa Valley’s Chateau Montelena wine estate will be acquired by France’s Chateau Cos d'Estournel. Terms of the deal were not disclosed.
    KC's View:
    Seems like a minor deal, but…

    What you need to know about this is that in 1976, at the famous Paris Tasting – where local wine critics were shocked when some California wines won top honors – it was Chateau Montelena’s wines that transformed the image of California’s then unimpressive wine industry.

    Chateau Montelena has been owned by the Barrett family…and its struggles to improve the quality of California wines is the subject of a new movie, “Bottle Shock,” that is scheduled to be released in the US on August 8. (Check out the trailer online…it looks great!)

    Not sure why the Barrett family decided to sell, but it can't have helped that the US dollar is in the tank. Chalk up another victim of the current economy.

    Published on: July 23, 2008

    …will return.
    KC's View: