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    Published on: October 27, 2008

    Walmart, along with a number of food and beverage manufacturers – including Coca-Cola, Kraft, Unilever, ConAgra, General Mills, Kellogg’s and PepsiCo – reportedly have signed on to support a new, voluntary front-of-pack nutrition labeling system called the Smart Choices Program, which is expected to begin implementation in mid-2009.

    According to the announcement released on Friday, “The Smart Choices Program was motivated by the need for a single, trusted and reliable front-of-pack nutrition labeling program that U.S. food manufacturers and retailers could voluntarily adopt to help consumers make more nutritious food and beverage choices that fit within their daily calorie needs … The Smart Choices Program was developed under the leadership of The Keystone Center, a non-profit organization that specializes in creating consensus solutions to public health problems.

    “The Smart Choices Program includes a symbol that identifies more nutritious choices within specific product categories and provides calorie information that identifies calories per serving and servings per container on front-of pack, with the intent to help people stay within their daily calorie needs … Products that qualify for the Smart Choices Program symbol also will display calorie information on the front of the package, which clearly states calories per serving and number of servings per container. The goal is to help people stay within their daily calorie needs and make it easier for calorie comparisons within and across product categories.”

    The aforementioned companies have said that while not all details of the program have been finalized, they are “likely implementers” of the program.

    The coalition developed by the Keystone Center is said to have “worked collaboratively to develop the science-based nutrition criteria for the Smart Choices Program, relying on the Dietary Guidelines for Americans and additional sources of authoritative guidance from consensus science, including FDA standards and reports from the Institute of Medicine and other groups. To qualify for the symbol, products cannot exceed standards for specific ‘nutrients to limit’ and, for most categories, must also provide positive attributes: ‘nutrients to encourage’ or ‘food groups to encourage.’ Specific qualifying criteria were developed for 18 different product categories, such as beverages, cereals, meats, dairy and snacks.”

    “This effort has been extraordinary on two levels,” said coalition participant Eileen T. Kennedy, Dean of the Friedman School of Nutrition Science and Policy at Tufts University. “First, it’s been a tremendous accomplishment to achieve consensus among a diverse group of influential stakeholders. Second, we’ve created a program that shows real promise in assisting people in making positive dietary changes to help enhance public health.”

    KC's View:
    Add another player to the list of nutritional labeling initiatives that already includes Hannaford’s Guiding Stars program and the ONQI system that is being heralded by companies such as Topco and Hy-Vee.

    The good news here is that more and more companies are taking the notion of nutrition labeling seriously, and the idea of putting such labels on the front of food packages gives a sense of the new priorities – it will almost certainly make things simpler for the shopper.

    My only concern is that with a growing number of systems coming on-line, and probably a few more waiting in the wings, at what point do things become confusing for the shopper. After all, it isn’t hard to imagine that some stores could have products that have one or two stars, an ONQI number, and the Smart Choices label. One assumes that they will all roughly match…but what if they don’t because of the different formulas being used?

    The premise is correct – people need more effective and more easily understandable nutrition labeling. The number of big guns behind these varying systems is impressive. But we have to be careful not to muddy the waters up too much, to make sure that clarity for the consumer is always the top priority.

    Published on: October 27, 2008

    The Austin Business Journal has a story about a new survey conducted by the Opinion Research Corp. saying that “more than half of Americans say they have had to cut back on the quantity or quality of food they buy because of rising prices.” Among the specific results of the survey:

    • “Sixty-seven percent of those polled nationwide in a recent survey say food prices have increased significantly in the last year and 58 percent say they have had to make cuts to their purchases as a result.”

    • “Two-thirds of Americans say they are losing economic ground as inflation outstrips any increase in income. In addition, 47 percent say they are having more trouble paying their bills this year than last year, and 84 percent are concerned about rising food prices.”

    • “More than half of those polled in the survey taking multiple steps to reduce food costs, such as using coupons, buying more generic or store brands, eating at home more often, buying less expensive cuts of meat and buying more of less expensive staples such as rice and potatoes.”

    • “Meanwhile, 14 percent say they or someone in their immediate family have received food from a food bank, shelter or other charitable organization in the past year because of lack of money for food. Among those who have not received food donations in the past year, 21 percent say it is very or somewhat likely that rising costs or some other change in circumstance may force them to ask for food from a charitable organization in the future.”

    Meanwhile, the New York Times reports that as a response to the harsh reality of the nation’s economy, “a veritable tidal wave of ads devoted to saving money is washing over the country,” and that “the decision to concentrate on frugality echoes the shifts in the tone and emphasis of ads during recessions in 1973-74 and 1990-1, after the stock market crash in 1987, and after the dot-com bubble burst in 2000-1.”

    But here’s where it gets interesting. The Times also writes that “a focus in the short term on pinching pennies could in the long run have a deleterious effect on the images of brands or products by cheapening them.” The concern is that by focusing relentlessly on bargains, brands could actually diminish the equity that they have built up over a long period of time.

    KC's View:
    Seems to me that there are two words that have to be considered here. They are very close to being the same word, but they are not, and they have entirely different meanings.

    Value.

    Values.

    In most cases, retailers have to pay more attention to the first word than they ever have before, but they must be careful not to lose touch with the second word, because that ultimately is the foundation upon which the business or brand is built.

    Lose touch with your values as a brand, and your foundation becomes corrupted. It may be a good short-term play, but the long term will not prove to be a friendly place.

    It’s like the line from the old John Mellencamp song:

    You’ve got to stand for something or you’ll fall for anything…

    Published on: October 27, 2008

    Forbes reports that Brenda Barnes, the CEO of Sara Lee, has created a new program at her company called a “returnship,” which essentially is “a four- to six-month paid internship for people who have been out of the workforce for three to five years.”

    While the company cannot guarantee that people who take these positions eventually will get full-time jobs – there are just 10 to 12 just positions available at Sara Lee headquarters, and the company just laid off 300 staffers, 100 of them in the home office – the goal of the program is to both help these people get reacclimated to the workforce while providing Sara Lee with a valuable resource. After all, most of the people (expected to primarily be women, though men are welcome to apply) are likely to be roughly in the target demographic that is Sara Lee’s customer, and they may bring some unique insights to the brand.

    KC's View:
    This is incredibly smart and innovative.

    Published on: October 27, 2008

    • The Financial Times reports that Tesco is asking its nonfood suppliers to wait an extra 30 days for their bills to be paid. Tesco is said to be looking to use the extra time – moving from 30 to 60 day terms - to allow it to be more competitive for the end-of-year holiday season.

    • Tesco’s Fresh & Easy neighborhood Markets division in the western US announced that it has opened an additional 11 stores in Arizona, with another one to open in mid-November. This will bring the company’s fleet in Arizona to 27.

    KC's View:

    Published on: October 27, 2008

    The Associated Press reports that the US Food and Drug Administration (FDA) is being urged by consumer groups and environmentalists to be more vigilant about testing Chilean farm-raised salmon. The move is a reaction to recent reports out of Germany that some banned chemicals had been found in the Chilean salmon.

    According to the story, it wouldn’t take much to increase testing of the fish – last year, the FDA tested 40 samples out of more than 100,00 tons of salmon imported into the US from Chile.

    KC's View:
    Well, at least the FDA doesn’t play favorites. The agency brings the same sense of vigilance to the salmon issue that it has brought to concerns about mad cow disease in the US.

    Published on: October 27, 2008

    The Wall Street Journal this morning reports that while McDonald’s new coffee strategy has been getting credit for being at least part of the reason that higher-priced Starbucks has less buzz lately, the fast feeder is facing its own challenges on the caffeine front.

    “The weak economy has prompted some consumers to brew coffee at home instead of buying it at coffee shops,” the Journal writes. “A sharp pullback by Starbucks Corp., which is shutting hundreds of stores as its sales slow, has analysts questioning whether now is the right time for McDonald's to roll out its premium line of lattes, cappuccinos, smoothies and sweet, ice-blended frappes.

    “Meantime, some McDonald's franchisees don't want to spend the money to implement the full beverage program and the remodeling that goes with it. McDonald's has estimated it will cost an average of $100,000 per location, and pledged to cover a portion of that expense. The credit crunch is expected to make it harder for franchisees to secure financing although McDonald's executives say franchisees have ample financing options.”

    About 3,000 McDonald’s locations out of a possible 14,000 currently have the McCafé program, which continues to be tweaked by the company to make it more accessible to a broader consumer base.

    Meanwhile, McDonald’s top management maintains that the program is on track and on schedule.

    KC's View:

    Published on: October 27, 2008

    BrandWeek reports that a new study suggests that Coca-Cola is the most talked-about brand in the US. Coming in second was AT&T, while Verizon was number three and Pepsi was number four.

    Number five: Walmart.

    • The United Food and Commercial Workers (UFCW) announced that its members who work for Penn Traffic’s BiLo stores in western and central Pennsylvania have ratified a new three-year contract that gives them a raise and access to improved health care coverage.

    • Smithfield Foods said late last week that it has completed the $565 million sale of its beef business to JBS SA, a Brazilian company.

    KC's View:

    Published on: October 27, 2008

    • Ahold said Friday that its third quarter sales increased 3.9 percent to the equivalent of $7.45 billion (US), and said that the two-year overhaul of its Us stores was beginning to show positive results.
    KC's View:

    Published on: October 27, 2008

    There was a story on MNB last week that a new survey from Ketchum's Global Food & Nutrition Practice suggests that only about one-third of Americans, and even fewer Europeans, say that brand names play a role in their choice of food products.

    Rather, 74 percent of global consumers aid that taste was important, 73 percent said quality was important, and 70 percent said that price was important.

    I expressed a certain skepticism about the accuracy of these findings.

    MNB user Dave Tuchler wrote:

    I share your qualified disagreement about the low perceived influence of brands per the Ketchum report - - brands are still extremely important in driving purchase decisions.

    My company regularly surveys consumers internationally about some controversial food ingredient topics. Generally we find that consumers are reluctant to admit (either in surveys or focus groups) that they are either a) influenced by non-objective things like brand names or celebrity endorsements, or b) that they would buy/serve food products that might be seen as making them 'bad parents' (e.g., "of course I don't have Sugar Blast Cereal in my pantry").

    Our general findings:

    - Taste is always issue #1 and an ante for any product, regardless of the health benefits.

    - While consumers may not admit they're influenced by brands, they use embedded brand equity as shorthand to give them information on the things they state as important: quality, price, taste, etc. But they don't want to admit that they're swayed by something as simple as a brand.

    - Consumers very often act very differently than they claim to. While there may be a stated resistance to a certain ingredient when asked in absence of any other benefits or tradeoffs, in the store a shopper will often buy based on benefits (e.g., reduced fat or calories) but never check the ingredient line.

    Net - if you ask a question in a vacuum (like importance of brands) you'll get an answer that only works in a vacuum.

    Having said that, consumers are increasingly checking the objective facts like calories, etc. -- and this will increase in importance going forward. As evidence, yesterday The Coca-Cola Company announced that they will be showing sugar content on the front of their beverage products.





    Responding to last week’s piece about the “Ten Things The Food Biz May Not Want Consumers To Know,” one MNB user wrote in about growing consumer cynicism about the food industry:

    Maybe the food industry should start spending their money on making foods that are actually good for us rather than paying people to keep quiet or discrediting them. Then maybe those retailers should start selling foods that actually have nutritional value.

    It is a growing perception among consumers.


    MNB user John Thompson wrote:

    I could not agree with you more. I found it interesting that the first seven points were subjective points somewhat void of a political agenda, then her last points were nothing but political statements and really work to discredit her motives.

    Setting the stage for a we against them battle and attempting to create a scandal where one does not exist, has not proven to be a successful strategy to bring about change. As a society we are more aware of what we eat. Increasing the communications on our need to become a healthier society and letting people ultimately choose is the key to success. Our industry needs to lead the way in this communication and work to regain the trust that it once had in the days of corner grocery markets and local ownership.





    We took note last week of a Washington Post piece challenging the conventional wisdom that modern technology – computers, cell phones, email, text messaging and the like – has weakened family connections in the US.

    Rather, the Post wrote, a study published by the Pew Internet and American Life Project suggests that, in fact, “families have compensated for the stress and hurry of modern life with cell phone calls, e-mail and text messages and other new forms of communication … In the poll, 60 percent of adults said that the new technologies did not affect the closeness of their family, while 25 percent said cell phones and online communication made their families closer and 11 percent said that the technology had a negative effect.”

    I noted in my commentary that the Pew study reflects my experience, and that text messaging has become a valued and welcome way for me to stay in touch with my kids; I never used to talk to my parents when I was in college (long distance phone calls were expensive!), so this is a welcome evolution.

    MNB user Gary Harris wrote:

    I’ve had similar concerns about the intrusiveness that some folks (my 30 year old daughter included) allow technology to have on their lives. (‘Off’ button, it does have an ‘Off’ button doesn’t it?) But I also know how much more connected we are as a result of that. The spontaneous text message I get when she and her family have seen or done something cool is a real treat. I also know how much my son and his family appreciated having a satellite cell phone set up that allowed him to keep in touch with all of us while he was deployed to Korea for a year. And I know that when he was in Iraq in ’03 that e-mail allowed me to say things to him that I wouldn’t have been able to articulate in person. Every significant development in the history of humanity brings with it the capacity for good and evil. As for most things in life, it’s what we do with them that makes all the difference.

    MNB user Amy Buttery wrote:

    I agree with your assessment of the way communication technology (texting, cellphones and email) are probably more likely to increase communication between parents and kids, and I too love hearing more often from my kids as they “touch base” with me. However, I’m not sure this is in all cases a great thing, because now we have young adults (I’ll talk about people 18-22, but the age could be extended based on the context) who are so accustomed to checking in or asking advice about mundane things that they aren’t making what I consider necessary breaks from parents, and parents too are failing to detach, becoming what are often called “helicopter parents.” Read the Wikipedia entry on the term for more. Of course there have always been intrusive, overinvolved parents, but the cell phone especially (sometimes described as “the world’s longest umbilical cord”) has contributed substantially to this trend.

    I one watched my sister take a call from her daughter, a sophomore at college. The daughter was calling to ask for guidance on doing laundry in the dorm’s facility. My sister walked her through the whole process—at least 10 minutes on the phone. While I’m sure my niece found it helpful, part of living away from home is figuring out how to deal with the world without asking mom or dad about everything. (That same daughter, incidentally, would never have called her mom for advice about how to get home from a party when she’s had too much to drink—trust me, I know the people involved.)

    Connection and communication are, on the whole, very good. But as with every major new technology, new communications technology is neither good nor bad but depends on how it’s used. And every major shift in the way we live holds both perils and pluses. It’s good to be aware of all the possible ramifications, I think.

    Another MNB user wrote:

    Ditto on text messaging bringing the family closer together.

    I travel a lot and getting TM's throughout the day from my 15-year-old during her first year in High School, from my 24-year-old in his first year of a hopefully long career in Sales, and from my wife who keeps everything together in my absence reduces the stress of three and four-day trips around the country.

    Two years ago, I would have NEVER paid $30/month for unlimited family texting. Now, it’s a no-brainer.


    I agree. Unlimited text messaging is one of the world’s great bargains.

    Another MNB user wrote:

    Our son is 20 now and has had his own cellphone since he was 11. He lives at home while attending college. We communicate with him by phone (landline and mobile), text, email, and in person. We still sit down to dinner as a family at least 4 nights a week, where we talk about jobs, school, finances, schedules, entertainment (TV, music and movies). We have never restricted his use of communications devices (video games are another matter...) and because of that he has never abused them, or gone over his allotted minutes or text messages. He doesn't answer his phone when he's driving, even if he has seen me talk and drive (hands-free, we're in California). He was overseas at school for a year, and tech was a necessity to keep in touch. For our family tech is not a toy, it's a tool.

    MNB user Marty Gillen wrote:

    I'm with you on taking advantage of technology to stay connected with my children; one a senior at Penn State and one a sophomore at Brigham Young. It doesn't get much better when a "good mornin' Dad" text message pops up. All is good in my life when that happens.

    MNB user Ben Del Prince summed it up:

    I too enjoy the ability of my kids to reach me via text and e-mail. They know I can always be reached and am no further away then a couple of finger movements.




    Finally, I got the following email from MNB user Craig Espelien that followed up on one that we ran a week or so ago that explained how a specific customer experience at a Dunkin’ Donuts was superior to one at a specific Starbucks:

    I have been a loyal Starbuck’s consumer (great coffee, great selection of breakfast items) but was not surprised by the discourse earlier this week (or maybe last) on the experience one of the other readers has with having to wait for a traveler pack. Her experience did not dissuade me from continuing to support Starbuck’s with my business – until today.

    I have a 7:00am design meeting every Friday and was going to treat the team to breakfast and coffee. There are two Starbuck’s on my way to the office – I went to both and was told the same thing – 15 minutes to get me coffee. The first told me my business was not as important as the rest of the customers who did not want traveler packs (she said it would take so long as they needed to brew additional coffee so they could take care of the other customers with the available coffee). The second told me the exact same thing – 15 minutes. I refused both times as I feel that if that is your business, it is a bit ridiculous to have to wait to brew coffee – especially at peak time of the day (in the first, the price was clearly marked – there was even a little display of the traveler and what came with it).

    I walked out of both outlets and have vowed to never darken a Starbuck’s door again (I hope I can keep that promise – as I love their scones).


    What’s the old truism about a chain only being a strong as the weakest links?

    That certainly seems to be the case here.

    The good news, I think, is when companies like Starbucks use this kind of exchange of information to address the problems and make things better.

    It never is easy to hear these things about your own company, but complaints are always more important to hear and learn from than compliments.

    KC's View:

    Published on: October 27, 2008

    In World Series action, on Saturday the Philadelphia Phillies defeated the Tampa Bay Rays 5-4, and then on Sunday night the Phillies wiped out the Rays with a 10-2 win.

    This leaves the Phillies with a 3-1 lead in the best-of-seven series, and the Rays now face possible elimination tonight.



    In Week Eight of the National Football League…

    Oakland 10
    Baltimore 29

    Tampa Bay 9
    Dallas 13

    Buffalo 16
    Miami 25

    San Diego 32
    New Orleans 37

    Atlanta 14
    Philadelphia 27

    Cleveland 23
    Jacksonville 17

    Seattle 34
    San Francisco 13

    Arizona 23
    Carolina 27

    Washington 25
    Detroit 17

    St. Louis 16
    New England 23

    Kansas City 24
    NY Jets 28

    Cincinnati 6
    Houston 35

    NY Giants 21
    Pittsburgh 14
    KC's View: