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    Published on: September 23, 2008

    by Michael Sansolo

    In the never-ending battle for share of stomach, there’s always been a challenge I felt supermarkets should pose.

    Give a shopper one minute to order a pizza by phone from Dominos, Pizza Hut or whoever. Then let them grab any pizza out of the frozen, refrigerated or dairy case and put it in an oven. And 30 minutes later ask a series of questions:

    Which was cheaper? I’m betting the supermarket variety wins this hands down.

    Which was ready to eat faster? This may be a tie, but again in a majority of cases the supermarket pizza will win.

    Which was more nutritious? This one will be impossible to battle. Because the supermarket pizza will come loaded with nutritional information. The delivered pizza isn’t likely to have that.

    Which tastes better? Given the vastly improved quality of meal products in the supermarket, this one should be an easy win too.

    In other words, it’s a win.

    And in short, it’s why supermarket operators should be looking at the current economic climate with unbridled optimism. Now, sure I understand how the tough economy is impacting us all. It is plainly apparent from financial reporting by retailers and suppliers these days that profits are being pinched hard by rising costs and a well-founded reluctance to pass all the hikes onto increasingly budget minded shoppers.

    So where is the optimism?

    Look at the pizza example above and think of all the things shoppers tell us are most important these days. It comes down to money, feeding their family, eating more nutritiously somehow with less time than ever and somehow making it all taste good.

    Ergo, the pizza. Because in these challenging times we can demonstrate to shoppers how well aligned we are with their needs and wants. Perhaps, and I know this is radical, we can bring them back to the home dinner table when they realize how good and easily food can be put on the table.

    It’s a lesson we shouldn’t have to repeat constantly, but reminders are necessary. And this is the perfect time to discuss this given that yesterday was the annual celebration of Family Meal Day. You might recall Family Meal Day is a holiday created at the suggestion of the Center for Addiction and Substance Abuse at Columbia University. That’s the group that went looking for insights into dangerous behaviors among teenagers and came back with a stunning finding:

    Children who eat at home with their families a majority of nights during the week have lower rates of cigarette smoking, eating disorders, and alcohol and substance abuse. And they have higher grades and friends who have similar traits. In short, it makes a powerful case for family mealtime at home.

    The idea couldn’t be more tailor-made for this industry, but you wouldn’t know if from the lack of activity around Family Meal Day. The industry should not only push it as an annual holiday, it should push it weekly. The importance of family meals should be getting shouted from the mountains, but it isn’t. It isn’t even getting whispered.

    Now, I have talked about this issue for years and always have been disappointed that beyond Subway and its ubiquitous eater, Jared, I never saw these kinds of messages. That was until a recent Sunday morning. There on television was a woman talking about preparing a pizza at home. The voiceover talked about the cost of doing that each week compared to buying from a restaurant and totaled up the savings impact of one pizza a week.

    The total saved in a year: $312.

    The company running the ad: Walmart.

    I wonder: Does it make sense now?

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

    KC's View:
    I’m going to use the Content Guy’s prerogative and use this space to comment on Michael’s story.

    First of all, I agree with him about Walmart. As has been previously pointed out here on MNB, the new Walmart grocery-oriented, price-driven ad campaign is an excellent one…it does not just point to low prices but also to quality, and sets the bar for consumer expectations even in those markets where Walmart is not a player. (If you watch MSNBC, the Walmart ads seem to be on even more than T. Boone Pickens’ commercials.) And, by the way, in pretty much every Walmart ad the consumer is shown using a canvas reusable shopping bag – talk about consistency!

    Second, regarding Family Meal Day…I’ll go farther than Michael on this one. This is a colossal example of the supermarket industry dropping the ball on a game-changing issue. Now, I’ve been suggesting for years – long before the creation of Family Meal Day – that the family dinner ought to be the centerpiece of promotions and marketing efforts engineered both by individual chains and the industry as a whole. I agree with Michael that the goal ought to be one more dinner a week … one more dinner a year is, to be honest, a joke. (A well-intentioned joke, but a joke nonetheless.)

    But aside from a couple of brief mentions on the news yesterday, apparently engineered by the National Center on Addiction and Substance Abuse at Columbia University (CASA), which created the concept a couple of years ago, I’ve seen almost nothing on this subject from the supermarket industry or the chains that comprise it.

    Now, to be fair, the notion of the family meal is an ongoing theme for some chains. Wegmans immediately comes to mind. And Walmart is doing a better job these days. But best I can tell, most chains either ignored the notion of Family Meal Day, or simple let it pass as irrelevant to their goals and priorities.

    Well, let me be blunt. There is no more relevant issue – both to the health of the supermarket industry’s bottom line and the health of the family – than getting families to sit down at the dinner table together as often as possible.

    Published on: September 23, 2008

    Advertising Age reports that any sales increases being experienced by supermarket retailers and packaged foods manufacturers this year are largely due to price increases – for example, the Food Marketing Institute (FMI) says that the average grocery bill is up five percent this year compared to a year ago.

    The story also notes that anecdotal evidence suggests that while people may be eating more at home, they are not necessarily cooking more, which explains why prepared meals and items like cereal and macaroni-and-cheese may be doing better than ingredients when it comes to sales improvements.

    KC's View:
    It is possible that one of the reasons that the food industry seemingly ignored Family Meal Day this year is because of this trend – the powers that be figured that since people were eating at home more because of the economy, it would be redundant to focus on the broader issue addressed in Sansolo’s column above.

    But again, this is a miscalculation in my view, because it is reactive rather than pro-active.

    Published on: September 23, 2008

    BrandWeek reports that “food giants like Kraft and ConAgra are targeting new launches at lunches,” and that the return to brown bagging – it is at its highest level since 2001, with almost 12 percent of lunchtime opportunities being fulfilled with food brought from home - has prompted food companies to reexamine their portfolio of brands.

    This means that a variety of companies are looking at the possibilities, considering everything from cold cuts to frozen entrees and soups – looking for new combinations and packaging that can take advantage of the current brown bagging trend.

    KC's View:
    It is very smart for CPG companies to be doing this, and retailers ought to be doing the same thing – creating branded and customized lunchtime options that people can purchase for themselves and their families.

    Published on: September 23, 2008

    The New York Times this morning reports that Li Changjiang, the chief of China’s food and product quality agency, has resigned in the wake of revelations that the country’s tainted milk supply has sickened more than 50,000 infants and killed at least three children.

    According to the Times, “His resignation was announced Monday evening, as the government widened its investigation into how an industrial chemical contaminated powdered baby formula and milk products made by some of the country’s biggest dairy companies.

    “It is one of the nation’s worst food safety scandals in memory, exceeding the troubles of a year ago when China was found to have exported tainted pet food ingredients, toothpaste, seafood and dangerous lead-contaminated toys.”

    Nineteen people already have been arrested by the Chinese government, which suspects them of intentionally spiking the milk with melamine, a poisonous industrial chemical that can artificially inflate the protein levels of products to which it is added.

    The Times reports that “millions of gallons of dairy products have been recalled in Hong Kong, elsewhere in China, and in Taiwan, Singapore and other countries, devastating China’s fast-growing $18 billion dairy industry. The government fired the head of one large dairy company, and on Monday, fired the Communist Party chief in the city of Shijiazhuang, home of one of the dairy companies at the center of the scandal. China’s dairy products are not approved for export to the United States.”

    KC's View:
    The question that needs to be answered is whether this is systemic or an aberration based on individual greed.

    The more it happens, the more it looks systemic. And raises a lot of issues about all Chinese exports.

    Published on: September 23, 2008

    The Wall Street Journal reports this morning that US federal prosecutors “have opened separate criminal probes into possible price-fixing by major egg producers and California tomato processors, the latest in a series of U.S. investigations of alleged collusion in food and agriculture.

    “The investigations, which have not been previously reported, add to concerns that beyond the rising cost of fuel and feed, a hidden factor may be driving food prices higher: collusion among farmers, food processors or exporters.”

    According to the Journal, “A Justice Department official confirmed that it had opened investigations into tomatoes and eggs. Federal agencies already are pursuing criminal or civil inquiries in markets including fertilizer, cheese and milk, examining whether suppliers worked in league to manipulate prices. The Justice Department said it had also opened a probe last year into the citrus-fruit industry.

    “Higher food prices have become a hot issue in the presidential campaign and a rising source of anxiety in the global economy.”

    KC's View:

    Published on: September 23, 2008

    Discounter Aldi announced that it will open its first 10 central Florida stores this Thursday, saying that it will be “offering high quality, fresh produce, meats and grocery items at up to 50 percent less than the competition,” and that it is “bringing 400 jobs to the area in 2008 and helping fill the void by other grocers who have left the market.”

    According to the announcement, “The first 10 Aldi stores will open Sept. 25, followed by another 10 on Oct. 27 and an additional five on Nov. 10. Customers can expect to find 1,400 of the most frequently purchased items at an average 16 percent to 24 percent less than big box and discount stores and 40 percent less than store brands at traditional supermarkets.”

    Germany-based Aldi, which specializes in inexpensive own-label alternatives to national brand items, currently has 950 stores in the US.

    KC's View:

    Published on: September 23, 2008

    Publix has closed on its $500 million acquisition of 49 Albertsons stores in Florida that previously were owned by Cerberus Capital Management. The company estimates that the stores will be closed and remodeled, with the time frame said to be one to 18 months, depending on the store.

    Fifteen of the stores are located in North Florida, 30 in Central Florida and four in South Florida.

    KC's View:

    Published on: September 23, 2008

    BusinessWeek reports that Walgreen Co, maintaining that its $2.8 billion bid to acquire Longs Drug Stores is superior to a bid made by CVS Caremark, plans to take its offer directly to Longs shareholders if it cannot get management to give its offer serious consideration.

    • The Seattle Times reports that McDonald’s is saying that the nation’s current economic woes won’t derail its plans for a national presence in the espresso business…despite the fact that Bloomberg reports that some franchisees have run out of money and cannot buy the espresso machines, and another report that the Bank of America won’t lend McDonald’s money for the equipment because it is buying Merrill Lynch and has other priorities at the moment.
    KC's View:

    Published on: September 23, 2008

    MNB had a story yesterday about how a federal grand jury has indicted eight current and former executives of the Kroger-owned Ralphs Grocery Co., charging them with being engaged “in a course of criminal conduct” and hiring “employees under false names, Social Security numbers and documentation” during the labor dispute that roiled the Southern California market five years ago. We commented that it is interesting to ponder the broader philosophical issues that these indictments raise – because the government is saying clearly that the “I was only taking orders” defense doesn’t fly … that people, and not just companies, have to take responsibility for their actions.

    Ralphs as a company already has spent $70 million in fines and restitution in this case … but $70 million, apparently, wasn’t enough to make this case go away.

    One MNB user wrote:

    Now we will see where justice draws the line…at what management level do you get house arrest and millions in retirement package versus serving time in the big house if convicted…

    MNB user David Livingston wrote:

    What about all the store level employees? Should not they face the same fate? Why does government concern themselves with petty human resource errors in judgment? We turn a blind eye to millions of illegal immigrants who use false names and probably no social security numbers, yet we punish a business trying to survive while being tormented by labor union maniacs. I trust Kroger would have corrected the books after the strike was over. Criminals? Or perhaps good soldiers? If some extremist labor union was trying to keep me from working, I would be very grateful to a corporation that allowed me to continue to work, even in the underground. Kroger employees criminals? Or a modern day Oskar Schindler?

    Well, that may be stretching the metaphor a little farther than it can legitimately go…




    Chiming in on the ongoing discussion about the emergence of reusable canvas bags in a wide variety of retail venues, MNB user Kerley LeBoeuf wrote:

    My wife and daughter-in-law give each other shopping bags from interesting places - essentially trading bags - a Wegmans for a Superquinn. Prediction: consumers trading canvas bags - at the supermarket - at the farmer's market - on line?

    I’ve already had trading offers for the new MorningNewsBeat canvas bag that is coming soon. I’m sensing a real opportunity here.

    And responding to our note that even the New England Patriots have a new canvas bag in their gear and memorabilia shops (an announcement that came immediately after the team got drubbed by the Miami Dolphins on Sunday), one MNB user wrote:

    It was too soon to read anything about the Patriots today, regardless of whether it was good for the environment.

    I feel your pain. I’m a Mets and Jets fan.

    KC's View:

    Published on: September 23, 2008

    In Monday Night Football action, the San Diego Chargers defeated the New York Jets 48-29.
    KC's View: