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    Published on: September 17, 2008

    The New York Times reports this morning that there seems to be a cultural shift toward what is being called “positive eating,” which is defined as “shunning deprivation diets and instead focusing on adding seasonal vegetables, nuts, berries and other healthful foods to their plates.”

    According to the story, “The market research firm NPD Group gets a glimpse of national eating habits through the food diaries it has collected from 5,000 consumers since 1980. The percentage of those consumers who are on a diet is lower than at any time since information on dieting was first collected in 1985. At the peak in 1990, 39 percent of the women and 29 percent of the men were dieting. Today, that number has dropped to 26 percent of women and 16 percent of men.

    “The diarists also report eating more organic foods and whole grains, said Harry Balzer, an NPD vice president.”

    Other indicators: “In May, the market research firm Information Resources reported that 53 percent of consumers say they are cooking from scratch more than they did just six months ago, in part, no doubt, because of the rising cost of prepared foods. Sales of organic foods have surged, and the number of farmers’ markets has more than doubled since the mid-1990s.”

    And, “nutrition experts and consumers say positive eating trends are being fueled in part by the failures of the past. A national epidemic of obesity suggests that the spread of diet foods, sugar-free soft drinks and low-fat snacks hasn’t helped people manage their weight.”

    There are, of course, some naysayers. The Times writes that “some nutritionists aren’t convinced that the positive eating trend will catch on with time-strapped families. Others worry that people will wrongly interpret positive eating as over-indulging, rather than adding moderate amounts of healthful foods into the diet.”

    KC's View:
    As has been noted often here on MNB, the reason there are so many diet books on the best seller lists is that the ones that were there last month didn’t work.

    Of course, there’s no way that this trend will be fast-moving. There simply isn’t the same kind of marketing muscle and money behind it as propels diet books and diet foods into the national consciousness.

    But it seems to me that “positive eating” is the kind of message that retailers, in particular, ought to be adopting and marketing. It’d be good for their customers and it’d be good for their bottom lines. They’d sell more interesting products, they’d be serving as a resource for shoppers, and they’d be creating more lasting relationships with the consumers who walk in the front door.

    Published on: September 17, 2008

    In the UK, the Telegraph reports that Tesco has announced the launch of a new line of 350 discounted products, while Walmart-owned Asda Group said that it has cut prices on more than 5,000 SKUs, including on its Smart Price line of products.

    Reuters reports that “Tesco said the new range of 350 goods, called Discount Brands at Tesco, would span tea bags, biscuits, shampoos and washing up liquid, and was its biggest package of money-saving measures since the launch of its Value range 15 years ago.” The story also notes that Tesco said it plans price cuts on “hundreds” of SKUs.

    The moves by these two companies seem prompted by a pair of circumstances. One, polls show that British consumers are extremely concerned about food prices. Two – and perhaps even more importantly – both chains are concerned about shoppers defecting to Aldi and Lidl, the German discount chains that are expanding their presence in the UK.

    The Financial Times writes this morning that “Tesco is moving to claw back lost ground” from the competition, and Richard Brasher, Tesco’s commercial director said that “price was now more important to consumers than it had been for 20 years.”

    KC's View:
    The British market remains one of the most interesting to watch, if only because of how the major chains there seem able to pivot into price-driven campaigns while still maintaining a narrative that focuses on other kinds of values associated with their brands.

    Published on: September 17, 2008

    As the nation’s economic stability seems more precarious with every passing day and every new headline, a new survey shows that 72 percent of online retailers believe that the online channel is better suited to withstand an economic slowdown than offline channels.

    The survey is part of The State of Retailing Online 2008, the 11th annual Shop.org study conducted by Forrester Research.

    According to the study, “About one-third (35%) of online retailers surveyed said they expect their online business to perform better than expected in the next 12 months, while another third (33%) anticipate their online business will perform the same as expected. This optimistic outlook is driven primarily by past results. According to the report, 81 percent of online retailers surveyed reported that their eCommerce business was profitable in 2007, and 75 percent were also more profitable last year than in 2006. Almost half (49%) of online retailers said that their average conversion rate in 2007 was higher than in 2006, and that 36 percent of total sales for the online retailers were driven by repeat customers—higher than in 2006. However, due to their outlook for the US economy, 37 percent of survey respondents noted that they’ve lowered their expectations for their online business performance in the next 12 months.”

    KC's View:
    Pretty much everybody should be lowering their expectations at this point, if only because all of the financial news these days seems to be bad or worse. It also seems fair to suggest that the online sector may be a little more resistant – in part because with every passing day, the percentage of the population that is comfortable with – or even prefers – the online experience gets larger. Online marketers have time and momentum on their side.

    Published on: September 17, 2008

    Reuters reports that a new study by British researchers has linked bisphenol A (BPA), a compound used in used in plastic drink containers and baby bottles, with health problems that include diabetes and heart disease.

    The study adds yet another voice to what has been a contentious debate about BPA. The US Food and Drug Administration (FDA) has published a draft assessment saying that BPA does not pose a health hazard when people are exposed to small amounts, and that conclusion has been confirmed by European Food Safety Authority (EFSA) Authority, Health Canada, the World Health Organization, Health and Consumer Protection Directorate of the European Commission; the European Chemical Bureau of the European Union; the European Scientific Panel on Food Additives, Flavorings, Processing Aids, and Materials in Contact with Food; and the Japanese National Institute of Advanced Industrial Science and Technology, as well as the Grocery Manufacturers Association (GMA) and the American Chemistry Council.

    However, the Washington Post has reported that the FDA finding “stands in contrast to more than 100 studies performed by government scientists and university laboratories that have found health concerns associated with bisphenol A (BPA). Some studies have linked the chemical to prostate and breast cancers, diabetes, behavioral disorders such as hyperactivity and reproductive problems in laboratory animals.” Both the Canadian government and Walmart have decided that baby products should not contain BPA because of these concerns, and the Consumers Union (CU) and the Consumer Federation of America (CFA) have said they disagree with the FDA conclusion.

    KC's View:
    Think it is time for labels that indicate whether there is BPA in a particular container? Because if we’re going to have all these scientists disagreeing with each other, leaving most consumers without a clue as to what they should do, maybe simply providing shoppers with relevant information is the best alternative. (Though BPA supporters will say that labels aren’t needed because it is safe, which will only extend the debate.)

    If scientists cannot come to an agreement, then give me the information so I can make the decision for my family.

    Published on: September 17, 2008

    IGA said that it will expand into Russia during the fourth quarter of this year. According to the announcement, “Megapolis Trading Company, the largest Fast Moving Consumer Goods (FMCG) distribution company in Russia and one of the largest in the world, has been approved as an IGA licensed distribution company. Megapolis Trading Company is a division of the Mercury Group of Companies, a Moscow-based holding with businesses concentrated in four main divisions, including distribution and logistics; retail; heavy industry, manufacturing and mining; and property development.”

    IGA said that “Megapolis Trading Company will be given the right to license independent Russian retailers under the IGA banner, as well as exclusive distribution rights to those retailers. As an IGA licensed distribution partner Megapolis Trading Company will obtain, among other benefits:

    • Exclusive distribution rights for IGA Private Brand products.
    • Access to the IGA Coca-Cola Institute's online training resources and certification programs.
    • The opportunity to build business relations with IGA's Global Partners, a group of leading manufacturers who devote expertise and resources that enable IGA retailers to differentiate themselves in the market and accelerate store growth.”

    KC's View:

    Published on: September 17, 2008

    • The Atlanta Journal-Constitution reports that Coca-Cola’s new CEO, Muhtar Kent, “has begun shifting his global executive team and could make more changes by the end of the year to turn around the North American unit, industry experts say.

    “Kent, previously Coca-Cola’s chief operating officer, has moved quickly to put his mark on the company. As he took the reins in July, he realigned the top layer of management, adding a chief administrative officer. This month, he added a new position, head of productivity and corporate affairs, tasked with helping Coca-Cola find $400 million to $500 million in annual savings by the end of 2011.”

    In addition, Kent reportedly is focused on rejuvenating Coke’s North American business, which has been stagnant or down over the past few years.

    • Green Mountain Coffee Roasters reportedly has entered into an agreement to acquire Seattle-based Tully Coffee Corp. for $40 million. Tully sells its brand primarily on the west coast, and the deal will give Vermont-based Green Mountain a presence and an infrastructure in a region where it has not been a player.

    KC's View:

    Published on: September 17, 2008

    • Kroger Co. said that its second quarter net income was up 3.4 percent to $276.5 million, from $267.3 million during the same period a year ago. Q2 revenue was $18.1 billion, up nearly 12 percent, with same-store sales up 4.7 percent excluding fuel, and 9.7 percent including fuel sales.
    KC's View:

    Published on: September 17, 2008

    • Steven Spinner, the former CEO of Performance Food Group, has been named the new CEO of United Natural Foods. He succeeds Michael Funk, who will remain with the company as chairman.

    • NACS announced that Robert Block, most recently the vice president of business development for Ink2.com and the former associate publisher for Post/Newsweek Tech Media, has joined the organization as associate publisher of NACS Magazine.

    KC's View:

    Published on: September 17, 2008

    …will return.
    KC's View: