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    Published on: January 21, 2009

    by Michael Sansolo

    Between the frosty economic climate and the ridiculously cold weather through much of the country it’s hard to imagine a less exciting time to talk about the environment. Climate change seems like an awfully remote concept when the mercury is hovering at 11 degrees.

    But it’s a topic that demands our attention all the same. Because whether you agree or disagree with the arguments about global warming and other environmental issues you certainly believe in addressing issues that impact the bottom line. Therefore, you have no choice but to consider the environment and what you, your company, your associates and your trading partners are going to do about it. Because, if you don’t, you run the risk of problems coming at you from government, your shoppers, your associates and certainly your competition.

    To put it simply, if your competitor finds a way to cut costs by making changes related the environmental improvements, you are suddenly at competitive disadvantage. That is why sustainable and profitable go hand in hand and you need a plan to make it work.

    An incredibly practical tool to address this issue debuted last week at the FMI Midwinter Executive Conference. The Global Coca-Cola Retailing Research Council Forum report, based on a meeting of retailers worldwide, outlines the issues, the challenges and, most importantly, offers a wealth of already implemented ideas from all corners of the globe. The report, available at (click the “global” tab) is well worth the download.

    (In the name of transparency, I must admit that I’m not a bystander on this issue. I was a moderator at the global forum in Beijing and I helped present the report at FMI...)

    The report breaks down the topic into four pieces. The first consists of comments from global experts on climate change who detail how the changing demographics of the planet—from growing populations to the growing middle class lifestyles around the globe—are further stressing the environment, especially in developing countries that are increasingly the home of the factories for many of our products.

    The three other pieces detail the agenda the industry itself may face in reducing carbon use, eliminating waste and securing a sustainable supply of food into the future. And it’s there that even skeptics need to take notice.

    In carbon reduction, for instance, you can learn about the steps retailers are taking to reduce their energy footprint from relatively simple measures such as shifting to compact fluorescent bulbs or as complex as designing more environmentally friendly stores and warehouses. And you can get a sense of just how much of the industry’s carbon footprint comes from the production of food to gain an understanding of the importance of working with trading partners on this issue.

    In the zero waste section, the old business mantra of doing more with less is laid clear. Companies show how they to address waste in all its forms—from trucks idling in parking lots to the disposal of food wastes in creative and profitable methods. And in the section on sustainable agriculture you can easily see how an industry built on the abundant supply of food has to grapple with the worldwide stress on supplies before products disappear from shelves.

    In all three areas the same plan of attack is laid out: start with how to address the issue inside your company by engaging associates at all levels (and many retailers worldwide report this is an effort frequently seized with enthusiasm.) Continue by working with your supply chain to examine all the areas where together you create waste and inefficiency. And conclude by reaching out to your community and your shoppers to both educate and motivate them to make correct choices and understand the changes taking place.

    Throughout the report you can hear the retailers around the world voicing their thoughts and concerns and you’ll get a sense of the different perspectives of the developed and developing world. As Al Plamann of Unified Grocers said at FMI, you gain an understanding that the US industry is far from the cutting edge on this issue and needs to get working quickly.

    And consider the words of Amory Lovins of the Rocky Mountain Institute: “While politicians and governments are debating the theoretical costs of getting greener, smart companies are racing to pocket the real profits today.”

    Kermit the Frog may have been right when he sang “it’s not easy being green.” But he never had to contemplate the hard price of the alternative. That’s a choice you have to make.

    Michael Sansolo can be reached via email at .
    KC's View:

    Published on: January 21, 2009

    In Albany, the Business Review reports that Golub Corp.’s Price Chopper Supermarkets will unveil a nutritional rating system this week that ranks every product in the store on a scale of 1-100. The program will be rolled out to all of Price Chopper’s 117 stores.

    The system being adopted is the NuVal system, which already has gotten support from both Topco Associates and Hy-Vee. NuVal used to be known as ONQI.

    In its announcement, Price Chopper says, “Uninfluenced by the retail world or manufacturers, NuVal is powered by pure science based on how more than 30 nutrients, USDA dietary guidelines and Institute of Medicine Dietary Reference Intakes impact health. When applied to products in the supermarket, this science generates a score from 1 to 100. The higher the NuVal score, the higher the nutritional value. By scoring virtually every single item in the store, NuVal sets an unprecedented standard for consumer accessibility and is poised to revolutionize the way nutritional information is read and understood.”

    According to the NuVal website, the scoring system “summarizes the overall nutritional value of food. It uses the Institute of Medicine’s Dietary Reference Intakes (quantitative reference values for recommended intakes of nutrients) and the Dietary Guidelines For Americans (advice from the Department of Health and Human Services, HHS, and the Department of Agriculture, USDA, about how good dietary habits can promote health and reduce risk for major chronic diseases) to quantify the presence of more than 30 nutrients – including vitamins, minerals, fiber, and antioxidants; sugar, salt, trans fat, saturated fat, and cholesterol. The system also incorporates measures for the quality of protein, fat, and carbohydrates, as well as calories and omega-3 fats. The NuVal System also takes into account how these nutrients influence health based on broadly accepted, published scientific literature.”

    The adoption of the NuVal system by Price Chopper is scheduled to be announced at a press conference this afternoon in Schenectady, New York.

    KC's View:
    Good for Price Chopper, which is at the leading edge of what I expect will be a continuing movement toward greater nutrition-consciousness on the part of food retailers and manufacturers. I remain concerned that there are too many competing systems that could confuse shoppers, but in the end, they will be best served by companies being transparent and information-driven in their approach to marketing and merchandising.

    Published on: January 21, 2009

    Arizona-based Bashas’ Supermarkets announced that it is introducing a comprehensive nutrition program for customers called “Eat Smart,” which includes nutrition tags that identify whether a food is a "healthier option," is "heart healthy," has "low sodium," is "calcium rich," has "reduced sugar" or is an "immune booster.” In addition the program will provide a regular newsletter and nutritional cards with recommendations and recipes, regular monthly shopping tours, and an endcap display in every store featuring “Eat Smart” foods.
    KC's View:
    More evidence of what I talked about above.

    Published on: January 21, 2009

    MSNBC has a story about how woman are les able to suppress their hunger than women, which could help explain why the obesity rate is higher among females than males; recent studies have shown that 35.3 percent of American women and 33.3 percent of men are considered obese.

    According to the story, “In the study, participants were quizzed about their favorite foods, which ranged from pizza to cinnamon buns and burgers to chocolate cake, and then were asked to fast overnight. The next day they underwent brain scans while being presented with their favorite foods. In addition, they used a technique called cognitive inhibition, which they had been taught, to suppress thoughts of hunger and eating.

    “While both men and women said the inhibition technique decreased their hunger, the brain scans showed that men's brain activity actually decreased, while the part of women's brains that responds to food remained active.”

    KC's View:
    I’m not sure what this says about me, but I was born hungry and am hungry almost all the time. And I’m not sure that I’m even capable of using something like cognitive inhibition, much less understanding it.

    This also surprises me because it challenges my working premise that women are in almost every way superior to men.

    Published on: January 21, 2009

    In Minnesota, the Star Tribune reports that “Minneapolis and St. Paul are preparing ordinances to ban chain restaurants and other dining outlets from using trans fats, which have been linked to heart disease and elevated cholesterol levels.

    “Ordinances are also in the works in both cities to require calorie labels on menus and menu boards.”

    A vote by the two city councils could come as soon as February.

    There are some differences in how the two cities seem to be approaching the proposed legislation. “The St. Paul ordinance would apply to chain restaurants that have at least 15 locations nationwide,” the Star Tribune writes. “Foods containing vegetable shortening, margarine or any partially hydrogenated vegetable oil would be affected. The ordinance wouldn't affect prepackaged foods with nutrition information labels … The Minneapolis proposal likely would apply the trans-fat ban to restaurants, groceries and bakeries, with different phase-in periods for each.”

    The paper also notes that the Minnesota state legislature also is expected to consider bills that would address nutrition and obesity issues.

    KC's View:
    I’m generally in favor of this kind of information being provided, but I’m beginning to wonder at what point it is going to be more sensible to address it at a national level. After all, does it really make sense for Minneapolis and St. Paul to have different regulations? Is the consumer well-served by such differences? Doesn’t this ultimately make it harder for retailers to do business?

    Published on: January 21, 2009

    Yesterday, MNB noted that both Sweetbay Supermarkets and Albertsons are closing stores in Florida, dealing with underperforming units in a state that has been reeling from the impact of the recession.

    But it should have been noted at the same time that Publix Super Markets will open its 1,000th store next month, in St. Augustine, Florida – the state where the company has about three quarters of its units, and where it has roughly 40 percent of the grocery business.

    KC's View:
    The record speaks for itself, and has since 1930.

    Published on: January 21, 2009

    The Seattle Times reports that as the recession continues in the US, the news is good for pasta manufacturers, who saw their sales go up five percent last year.

    In part, the increase seems to be because pasta remains a bargain and therefore is attractive to families trying to rein in their spending. At the same time, the low-carb fad seems to have subsided, and pasta no longer is being demonized as an evil, weight-inducing food.

    KC's View:
    If I were a retailer, one of the things I would do is create a “pasta of the month club,” which would offer subscribers new and interesting pastas each month, accompanied by unusual sauces that they might not have heard of. Some could be private label, some could be branded. In appropriate states, there even could be wines included. The products would be boxed together and available for pickup.

    My goal would be to create an ongoing and evolving relationship with customers interested in good food and saving money, and to create a little marketing magic in a section of the store.

    Published on: January 21, 2009

    In the UK, the Telegraph reports that Tesco’s Fresh & Easy chain in the western US is using the Twitter text messaging service “to interact with customers and inform them of new offers and store openings. In addition, it is answering customer queries about missing products in certain stores, and about services offered … Though perhaps not gripping correspondence, Twitter does help to establish loyalty by giving customers an active way of communicating with the company's management.

    “The Fresh & Easy Twitter feed has 915 followers – a fair number given that a chain the size of Starbucks only has 30,591 followers.”

    KC's View:
    It is important for retailers to embrace as many of these technologies and opportunities as possible, because they each shed a little bit of light on what the future is going to look like, and on the road that leads to that future. Sure, there will be missteps and wrong turns…but even those will inexorably lead to the future.

    Published on: January 21, 2009

    • The Washington Post reports this morning that “the federal government is advising consumers to avoid cookies, cakes, ice cream and crackers made with peanut butter or peanut paste while it continues to investigate an outbreak of salmonella illness that is believed to have killed six people and sickened at least 485 others across the country.”

    The cause of the salmonella contamination remains unknown, though the suspected products all contain ingredients supplied by a factory owned by Peanut Corp. of America.

    • The New York Times reports that Heartland Payment Systems, “a major payment processing company, disclosed a data breach on Monday that potentially exposed tens of millions of credit and debit cardholders to the risk of fraud in what could quickly become one of the country’s biggest data compromises.” The story says that the breach is believed to have begun last May, but was not detected until late fall.

    Heartland reportedly works with 175,000 small businesses and processes about 100 million transactions a month.

    KC's View:

    Published on: January 21, 2009

    • Johnson & Johnson reported that its fourth quarter profit was up 14 percent to $2.71 billion, from $2.37 billion during the same period a year ago. Revenue fell 4.9 percent, to $15.18 billion, from $15.96 billion.

    For the fiscal year, Johnson & Johnson’s net income was up 22 percent, to $12.95 billion, as revenue rose 4.3 percent, to $63.75 billion.

    KC's View:

    Published on: January 21, 2009

    I noted in a comment the other day that there was a story in the Rocky Mountain News the other day in which Burt Flickinger of Strategic Resource Group suggested that a total of 200,000 retail stores – ranging from big box stores to the smallest mom-and-pop shop – are likely to close in 2009 because of the recession, and I noted that this is “an almost unimaginable number, and a reflection of the tough times in which we all find ourselves.”

    To which one MNB user responded:

    Not as much a reflection of the “tough times”, but a reflection of the market/consumer reaction to unnecessary and excessive retail expansion.

    There are too many retail stores of nearly all types. We don’t need more places to buy TV’s, porterhouse steaks, pizza, hardcover books, and t-shirts. We need the right places to buy them (and at the right price). The market takes care of itself and the market is reacting….consumers are voting with their feet and those establishments that don’t answer the value proposition are going out of business.

    Amen to the free market.

    We had a piece the other day about “counterfeit foods,” which led MNB user Mike Blume to write:

    If a consumer buys something only to be “fooled” when they get home, will they return to the same outlet to purchase that product again? I think not – and I hope not!!! You say, “Retailers should push for such improved transparency…” and I agree, but are some retailers doing the same thing? Many retailers are selling “Sweet Onions” that we call “imposters” because they are not sweet!!! Our company utilizes a third party laboratory to test our onions and to work with our growers to assure the “Sweet Onions” we are selling to retailers and food services companies are truly sweet. Some retailers are willing to pay us our price to assure they are buying what they think they are buying – ultimately satisfying their customers… Why wouldn’t all retailers take this approach? We know the answer… To save money! But are they loosing sales (and money) in the long run? Too many retailers are concerned with instant gratification and not long term satisfaction of their customers!!! Processors, manufacturers, growers, and retailers should all be held accountable; but the bottom line is if the consumer is not satisfied, they may take their business elsewhere… can anyone afford to save money now and hope to have their customers business in the future???

    MNB ran a story about how the FDA, in the waning days of the Bush administration, published a rule saying that foods made from genetically engineered animals did not need to be labeled as such, which I said did not strike me as a consumer-friendly stance…and I suggested that the FDA’s next step might be to tell manufacturers that they cannot say when their products are not made from GM sources.

    One MNB user responded:

    I’ve never had a problem with the FDA’s stance on clone labeling because I assumed the market would address the issue. Those with naturally reproduced products would clearly want to say so. If that weren’t allowed, then the FDA is going to see some extreme consumer outrage.

    The only reason that the FDA would even think of taking that extreme stance would be the difficulty of administering the lineage of animals. Though I would think it may be near impossible, consumers are going to demand it.

    This is the same government, don't forget, that has said that companies cannot test their own animals for mad cow disease and then say that their products are BSE-free.

    Wait a minute.

    It isn’t the same government. Not as of noon yesterday.

    So maybe there will be changes in what is permissible and appropriate.


    KC's View: