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: September 29, 2008

    The Wall Street Journal this morning reports that “food companies hope to capitalize on the slumping economy by steering consumers to cheaper, high-margin products. On Monday, Kellogg Co. is beginning a new advertising push for staple cereals such as Corn Flakes and Rice Krispies, while Campbell Soup Co. is about to launch a multimedia campaign to trumpet its condensed soups as a bargain buy. Kraft Foods Inc. has begun advertising its Kool-Aid powdered beverages on national radio for the first time in 11 years. Campbell and cheese giant Kraft are also teaming up to promote meals of soup and grilled-cheese sandwiches. Kraft's Web site will add recipes for cheap sandwiches and suggest Campbell soups to pair them with.”

    The story notes that “it is a big shift for food makers. For several years they have tried to increase their profit margins by promoting higher-priced ‘premium’ brands such as Campbell's Pepperidge Farm cookies and Kraft's Wheat Thins crackers. But lower-priced ‘value’ products can also have wide margins because they're cheaper to make.”

    KC's View:
    This isn’t to say that the marketplace is going to become exclusively price-driven, though clearly value will be a greater component of most stores’ selections and marketing efforts.

    Seems to me that one of the great advantages that supermarkets have is that they can stress the fact that in the grocery aisles, consumers don't actually have to compromise between cost and quality – you can eat good, nutritious and inexpensive meals by shopping intelligently.

    Two great examples of this approach: the new Walmart and Boar’s Head ad campaigns.

    Food companies can capitalize on the trend not just by providing such products, but also educating shoppers about their value and values. It will be an evolutionary process…but companies need to start now if they have not done so already.

    (Michael Sansolo will have a good column about economic issues in tomorrow’s MNB, so stay tuned.)

    Published on: September 29, 2008

    Interesting story in Forbes about how foods rich in antioxidants have become extremely popular in the US marketplace, noting that “according to the market research firm Datamonitor, one in 20 food and beverage products launched in the U.S. so far this year has claimed to be high in antioxidants, almost double the rate from three years ago. Some 340 antioxidant products have reached the market since the beginning of last year.”

    However, there remains some debate about the value of some of these products. While some “marketers have been pushing fruits that are known to be especially rich in antioxidants, such as acai (the fruit of a South American palm, pronounced ah-SIGH-ee), goji (a Chinese berry), pomegranate and mangosteen,” Forbes writes, there are other companies “pushing antioxidant-rich candies and sweets. From Hershey to haute, chocolatiers are marketing the benefits of dark chocolate in candy bars, hot chocolate mixes and chocolate sauces. Belizza sells a line of antioxidant-rich sorbets heavy in either acai or pomegranate.” In the case of these latter products, some analysts say, the calories and saturated fat may be offsetting the value of the antioxidants and deceiving consumers.

    KC's View:
    Supermarkets may be able to cash in on the antioxidant craze in another way, according to the Forbes piece. Shots that can provide ample amounts of antioxidants are likely to be on the market soon, and supermarkets with health care clinics might be able to begin selling them.

    At least until the next craze comes along.

    Published on: September 29, 2008

    Bloomberg reports that Walmart’s troubled Seiyu subsidiary in Japan plans to close 20 of its 390 stores and eliminate some 350 jobs in its continuing quest for lower costs and greater efficiency. The company also said that it would renovate about 100 stores during the next two years.

    • Walmart announced that its newest store in the Chinese city of Wangjing also is the company’s first environmentally friendly unit there, with technology including LED lighting that will save 23 percent on annual energy consumption.

    KC's View:

    Published on: September 29, 2008

    USA Today reports that supermarkets are responding to recent studies showing that “riding in a shopping cart beside meat and poultry is risky for infants younger than 6 months,” as much as tripling the likelihood that they contract salmonella and quadrupling the chance they will get campylobacter, a diarrhea illness. The strategies “range from providing sanitary wipes to installing high-tech cart-cleaning systems,” according to the story.

    However, there is an argument against the use of such technologies – which is that a cultural obsession with eliminating germs and bacteria has resulted in a generation that has not developed natural immunities, and in fact made it more susceptible to long-term health problems.
    KC's View:

    Published on: September 29, 2008

    • The Daily Mail reports that a Muslim man who worked in a UK Tesco warehouse facility is suing the company, saying that the retailer forced him to carry cases of alcoholic beverages, which violated both his religious beliefs. The man quit his job, he says, when the warehouse would not acquiesce to his request for another assignment, and he now says that he was ”victimized and harassed.”

    • In the UK, the Sunday Express reports that despite the economic crunch that is sweeping through the nation, Tesco plans to “press ahead with plans to create 30,000 jobs by February, up to 10,000 of which will be in the UK.”

    KC's View:

    Published on: September 29, 2008

    The Washington Post reports that the tainted milk scandal in China continues to spread and have repercussions, despite assurances from the Chinese government that it has things under control. More than a dozen countries have banned or recalled items containing even a trace of Chinese dairy products, and the story notes that the World Health Organization (WHO) has said that the problem has been worsened by “a combination of ignorance and a deliberate failure to report.”

    The dairy products have been found to be tainted with melamine, the same poisonous industrial chemical that can artificially inflate the protein levels of products to which it is added, and that recently sickened or killed thousands of pets before it was discovered in a number of brands of pet food.

    According to the story, “Chinese health officials have confirmed the deaths of four infants who had kidney stones caused by drinking tainted milk powder. More than 54,000 babies have been sickened, including 12,892 who have been hospitalized, officials said. State media have reported that two other babies with kidney stones died this summer and that their parents said they had used a brand of tainted milk powder. But local officials have not confirmed a link to the scandal.”

    An example of how the scandal has spread: USA Today reports this morning that Kraft Foods and Mars are investigating allegations that high traces of melamine have been found in Oreos, Snickers and other products imported from China.

    KC's View:
    The bet here is that there is no way this problem has been contained, and that the situation is going to be found to be a lot worse before it gets better.

    Published on: September 29, 2008

    There is an excellent story this month in Food Nutrition & Science from The Lempert Report about the state of food irradiation in the US, noting that of shoppers aware of what irradiation is, “about two-thirds of those consumers indicate that they would be willing to purchase foods treated with this process. Additional research studies at leading universities show that with education, at least 80 to 85 percent of consumers are willing to purchase irradiated foods.”

    The story notes that despite some bad press, irradiated meat and produce sales are either holding steady or increasing, and that with proper education, irradiation could help the nation deal with at least some of the food safety issues that have been in the headlines recently. There are other experts who believe that consumers should not buy irradiated food, and that instead the food chain needs to be made more secure. And FNS suggests that “though irradiation can help promote food safety, it is not a substitute for safe food handling. Retailers should continue to communicate the standard food safety guidelines to their consumers, even when selling irradiated products.

    For more about irradiation, and other stories in Food, Nutrition & Science, go to:

    http://www.foodnutritionscience.com/

    KC's View:

    Published on: September 29, 2008

    Interesting piece in Barron’s over the weekend about Starbucks, and what management there plans to do in order to get its house in order. Some excerpts:

    • According to the story, CEO Howard Schultz “says Starbucks will unveil a Starbucks card program this fall that will ‘surprise and delight’ customers. At a more traditional company that might mean cash back with purchases, but Starbucks customers seem to appreciate other things, like the company's commitment to sourcing coffee beans from growers who practice sustainable farming. The new program might well have a charitable angle, though Schultz won't comment.”

    • “Starbucks is assuming its new products and promotions will boost same-store sales growth into the mid-single digits, while, on the cost side, some big expenses will decline. Milk prices, for instance, soared 80% at some points in 2007, but have been trending lower recently. The cost of leasing real estate also should fall, as more empty storefronts appear.”

    • “If the economy continues to weaken, Starbucks would be wise to publicize the fact that its drip coffee doesn't cost much more than the next guy's in many markets. A 16-ounce cup of coffee at a Starbucks on New York's Long Island fetches $1.85, only a penny more than a medium at the Dunkin' Donuts across the street, and a dime more than a cup of Joe at the deli next door. Yes, McDonald's charges only $1.19, but many coffee aficionados say the 55% price differential is worth it … Schultz believes the next wave of Starbucks customers will be folks trading up from McDonald's and other chains who want a little ambience with their brew.”

    And, the company says, there will more innovation in its stores in the next 18 months than in the last five years.
    KC's View:
    There is more than enough cynicism about Starbucks’ future, but it is interesting that Barron’s points out that there are analysts out there who believe that the company has a significant upside, and that management is taking the chain in the right direction. (I, for one, will be interested to see what the company’s new card program is going to be like.)

    You can believe in Starbucks or not. I still have a sense that the company is throwing a lot of tactics against the wall to see what sticks. But that said, I keep going back for venti skim lattes, and no matter what Starbucks I visit, I always find a line.

    And in the retail biz, a line is almost always a positive sign.

    Published on: September 29, 2008

    “What we have here is a failure to communicate,” Paul Newman’s Luke Jackson says during the character’s final moments in “Cool Hand Luke,” mocking with ironic humor the phrase uttered with far more seriousness by Strother Martin’s prison captain earlier in the 1967 movie.

    Communication was never a problem for the real-life Paul Newman, who died last Friday at age 83 of complications from lung cancer. In addition to his sterling career as an actor and movie star – and make no mistake, he was both – Newman’s legacy may well be seen his extraordinary philanthropy, most impressively with the Newman’s Own food products that have resulted in the donation of more than $250 million to various charities. Started as a lark with his friend, writer AE Hotchner, the product line has grown to include everything from spaghetti sauce to salsa, lemonade to cookies, and a variety of organics.

    There was never any doubt about the goal of the Newman’s Own products. It never seemed to be about ego or self-aggrandizement. Using as a mantra the phrase “shameless exploitation in pursuit of the common good,” Newman once told an interviewer that he wanted to be like the farmer who nurtured the soil from which his crops emerged; he felt lucky, and wanted to give something back. And there may be few better examples of good humored and dedicated philanthropy.

    In addition to his acting career and food business, Newman also was a passionate racecar driver. When I was learning to drive a racecar at the Skip Barber Racing School, at the Lime Rock, Connecticut, track where Newman often raced, one of the teachers told us about a recent race in which Newman (then in his late 70’s) was competing. During the race, his windshield cracked, and got to the point where Newman couldn’t continue. Newman, he said, pulled the car into the pit and proceeded to kick the windshield out of the car, and then got back behind the wheel and finished the race. It didn’t matter, the teacher said, that Newman couldn’t win. What mattered was that he was going to finish what he started.

    So when I think of Paul Newman now, I don't just think of the excellent food products that bear his name and likeness. I don't just think of the characters he played in the movies, including favorites such as Butch Cassidy in “Butch Cassidy and the Sundance Kid,” Henry Gondorff in “The Sting,” Reg Dunlop in “Slap Shot,” or Frank Galvin in “The Verdict.”

    No, I think of him kicking out that windshield, intent on finishing what he started and doing what he said he’d do.

    No failure to communicate there.

    KC's View:
    This would be a good time for the food industry to follow Newman’s example. My friend Jack Allen, who has helped shape so many minds and attitudes at Michigan State University, wrote to me over the weekend to suggest that the industry ought to come together in some sort of major promotion of Newman’s Own products, with all profits going to the Hole in the Wall Gang Camps, which Newman started to serve children with serious illnesses.

    It is an excellent idea, especially now, when so many eyes are focused on economic crises and financial bailouts. What a good time to look beyond ourselves and do something not just to honor the memory of Paul Newman, but to actually do some good.

    Published on: September 29, 2008

    Got an interesting email from MNB user Linda Ballew-Johnson responding to our story about the three-foot long CVS receipt and the company’s seeming inability to use its card program to target customers effectively:

    We had one of our computers crash this week and as a result, I ended up creating a gmail account for totally boring and really complicated reasons that don't matter for what I want to tell you.

    Since using gmail, I am so amazed at the ability to recognize information in email messages and make relevant suggestions available to me like mapping, search or purchase options . For instance, today when I opened my MNB email, the bar on the right offered mapping to the address in the email, then asked if I wanted some of the dates added to my calendar. Next asked if I wanted contacts added. Finally, it made shopping suggestions for canvas tote bags among other things. The information is on the right side of the screen and does not interfere with the email any more than the Google shopping suggestions interfere with Google search. The suggestions did not require me to do anything if I had no interest - in other words, I didn't have to refuse the help. It was there if I needed or wanted it. IMHO, very clever, useful and (maybe because it is new to me) not clutter. If only more "target marketing" could really read my needs and not just spit out some register coupons.


    I should say for the record that I had a phone call on Friday from a CVS executive who read my column about the three-foot receipt, and he patiently explained to me how the coupons were created based on past purchases…and he seemed genuinely interested in my opinion, in part because I’d used my soapbox to criticize the company, and in part because based on his reading of my purchase history, I’m apparently a really, really good CVS customer.

    I inferred from our discussion that the CVS system continues to evolve…and I’ll be interested to see the next iteration.




    We continue to get email about the use of canvas shopping bags…

    MNB user Ron Pizur wrote:

    I'm with you on this one. I bought my 2 cotton reusable bags from my grocery store 10 years ago and have used them religiously ever since. I think at that time they cost $2.99 each and I still bought them because I wanted to be a good global citizen. Honestly, I do not follow the argument that a reusable bag is worse than a plastic bag. I don't care what it is made out of, actually I think the more durable the better, because the longer it lasts the less plastic bags that are used. Sure, someday the reusable bag will be so beat up and worn out that it must be thrown out, but hopefully by that time it has saved the world a few hundred plastic bags. My 2 bags are just wonderful - as it is just me and my wife we don't buy a lot and there are very few times that my grocery order can not be jammed into just the 2 bags. In those rare cases that we do need more room my wife just whips out the emergency reusable plastic bag she carries in her purse.

    MNB user Len Abeyta wrote:

    I am all for reusable bag as an alternative. However there is another side of the story, some customers actually like the connivance of disposable plastic bags, I am surprised that someone hasn't tried to come up with a billion dollar idea to create a bag that is disposable, not made from oil, reality cheap to produce and environmentally friendly. Can anyone tell me why this doesn't seem to be brought to the table?

    MNB user Phyllis Palmer wrote:

    There IS another reason to use recyclable bags…. reducing clutter in our lives which, from some “experts” views, reduces stress and improves the quality of our lives. That’s MY personal rational for using recyclable bags. I just hate having all those bags which take up space in my house (if I save them to “reuse later”) and in my trashcan (if I throw them away). The added bonus is that these sturdy bags are great for other things as well…. toting stuff on picnics, packing things to eat on car trips (they stand up on a car floor unlike plastic bags). I’m one of “those” who don’t buy into the whole GREEN aspect of this issue. I started it because Trader Joes had a drawing for a $25 bag of groceries if you bring in your own bags (and still do) and because I couldn’t stand having so many paper TJ bags in my closet. The whole trick to making it work is to be organized enough to keep them in your car, take them in the store when you shop, and bring them back out to your car when you’ve emptied them into your fridge. In reality THAT’S the crux of it actually working.

    MNB user Tod Davis wrote:

    Since we are making the seemingly simple reusable bags issue complicated, I thought I would throw in another curve ball. I don't remember the exact statistic but cotton uses a disproportionately huge percentage of the farm chemicals used in the US making it one of the "least green" crops known. I see an opportunity for the greenest solution of-late which seems to be textiles made from bamboo. With the right education campaign someone could make a real impact (and bundle of money).




    Had several emails about the story last week saying that that People for the Ethical Treatment of Animals (PETA) has called on Unilever-owned Ben & Jerry’s Homemade Ice Cream to stop using cow’s milk in its products, but instead use human breast milk.

    My comment: PETA, in my mind always a fringe group, has now seriously crossed the line into being seriously demented.

    This suggestion isn’t just implausible. It’s nuts.

    And by the way, since when did milking a cow become unethical treatment?

    I mentioned this story to Mrs. Content Guy, and her first reaction was PETA clearly cares more about cows than people. I suspect that a lot of women, especially those who have breast-fed their babies, will feel the same way.


    One MNB user responded:

    I imagine you're going to get more than a few e-mails about this one.

    1. PETA is completely wacko. Looney toons. More than one crayon short of a box.

    2. Dairy cows are treated incredibly badly and inhumanely (which makes me wonder - does "inhumane" even apply when you're talking about a cow?) - there is plenty of information on the web about the way dairy cows are raised, treated and then end their lives.

    3. The answer is clearly not to switch to human breast milk but I think Ben & Jerry's response is amusing - they say that human milk should be used for human babies, right? Isn't the inference there that cow milk should be for cow babies? Doesn't quite make sense to me.


    MNB user Brian List wrote:

    I watched an HBO special on PETA’s founder, and let me tell you, this lady is pretty crazy in my opinion. Much of the group’s tactics are downright comical, but sometimes quite disturbing. Don’t get me wrong, I’m all for the fair treatment of animals (as most people are) but PETA’s shock tactics are tired and ineffective, which was the first thing that came to mind when I read this story.

    MNB user Robert S. Edwards wrote:

    I remember when I worked on a Dairy Farm and milked cows that if I did not get all the cows in from the pasture and one went astray, I was sent out to find the missing cow. Reason was that you had to milk all the cows on time, or they really hurt. That would really give PETA something to gripe about.

    MNB user Kathleen Whelen wrote:

    While milking a cow would seem to be perfectly humane, I think they refer to the mechanized milking equipment and the whole - dare I say - "debovinizing" processes that go along with it. That being said, PETA is nuts.

    And still another MNB user wrote:

    No doubt that I think the suggestion is nuts, however I feel the need to play devil's advocate. We are the only species that drinks the milk of another mammal, which I do find to be strange. Also, while milking a cow is necessary, the cruelty in mind is the way the milking cows on factory farms are treated, and the amount of antibiotics and steroids that are pumped into them are consumed by US. Yuck. This is a bigger issue than most people care to think about. Six Deadly Diseases and How We are
    Causing Them is a simple read and an amazing book, they tie the way cows are treated into the start of mad cow disease (a prion), very interesting, and if nothing else it might open you mind an make you think about how the animals are treated, and how it does indeed relate to our health. But I digress.......


    KC's View:

    Published on: September 29, 2008

    In Week Four of play in the National Football League…

    Cleveland 20
    Cincinnati 12

    Atlanta 9
    Carolina 24

    San Francisco 17
    New Orleans 31

    Green Bay 21
    Tampa Bay 30

    San Diego 28
    Oakland 18

    Washington 26
    Dallas 24

    Houston 27
    Jacksonville 30

    Denver 19
    Kansas City 33

    Arizona 35
    NY Jets 56

    Minnesota 17
    Tennessee 30

    Buffalo 31
    St. Louis 14

    Philadelphia 20
    Chicago 24


    In Major League Baseball, the postseason begins this week and the playoff picture finally shook out this weekend (almost completely) with the following teams scheduled to play in October:

    National League East – Philadelphia Phillies
    National League Central – Chicago Cubs
    National League West – Los Angeles Dodgers
    National League Wild Card – Milwaukee Brewers

    American League East – Tampa Bay Rays
    American League West – Los Angeles Angels
    American League Wild Card – Boston Red Sox

    However, the American League Central remains up in the air…with the Chicago White Sox scheduled to play a makeup game against the Detroit Tigers today; if the Sox win, they would then go on to a one-game playoff game against the Minnesota Twins, with whom they would be tied for the AL Central lead.

    KC's View:
    The New York Mets falling short for the second season in a row was a bitter pill to swallow yesterday. But I will tell you this. Michael Sansolo and I took our wives the second to last game ever played at Shea Stadium on Saturday, and it was a game none of us will ever forget. Johann Santana took the ball on short rest, and threw a 2-0 complete game shutout against the Florida Marlins. It was a classic case of a guy with tremendous skills simply picking up an entire team and carrying it for three-plus hours.