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    Published on: March 5, 2009

    Now available on iTunes…

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    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and sponsored this week by Webstop, experts in the art of retail website design.

    There are a lot of studies and surveys and reports out there. I’m not sure if there are more than there used to be, or if there just seem to be more because the Internet makes them so much more available. As might be expected, I read a lot of these things. Sometimes I find them believable, sometimes not so much. Sometimes they seem to be consistent and part of a larger, discernable trend…and sometimes they seem to be outliers, and it is hard to figure out how legitimate and accurate they are.

    Frankly, it is enough to give us all massive headaches.

    Now and then, though, a study gets passed along that catches my attention for all sorts of reasons…and just such a survey came out a few days ago from Sodexo, which is a facilities manager and foodservice provider on hundreds of campuses all over the United States.

    The point of this survey was that students’ taste buds are a lot more sophisticated today than they were 20 years ago … which is something that needs to be noted by food retailers that are going to be charged with feeding this segment of the population when it becomes the middle of the bulls eye, responsible for feeding themselves and their families.

    Among the favorite foods cited by students: locally-grown fruits and veggie, crispy garlic-ginger chicken wings, green tea and pomegranate smoothies, crab cake sliders, mini samosas, Tilapia Veracruz, and Chicken Molé.

    I actually think this is encouraging…

    However, I was really interested to see the favorite foods that reportedly were cited by students 20 years ago. They included fruit and cottage cheese plate, chicken nuggets, turkey tetrazzini, chicken chop suey, whatever they could graze from the taco bar, and Algerian lamb stew.

    Wait a minute. Algerian lamb stew? You gotta be kidding me. What students exactly were they surveying? (When I went to Loyola Marymount University, we survived on mac and cheese, beer, burgers, pizza, beer, burritos from a local dive called Los Amigos, and did I remember to mention beer? I don't remember anyone ever offering Algerian lamb stew…)

    Well, no matter. The real lesson here is that good, healthy and innovative food has become a lot more common than it used to be, especially to college students still in the process of forming their tastes and preferences. This is a trend that needs to be taken seriously by retailers who want to be relevant to these sophisticated shoppers of the future.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: March 5, 2009 reports that a new study from McMillan/Doolittle suggests that while the recession has not had any discernible impact on the sale of “green” products and consumers’ commitment to environmentally friendly items, retailers and manufacturers have to stress value as well as values if they want to maintain momentum in the category.

    “The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements,” says McMillan/Doolittle senior partner Neil Stern. “The message has got to be about value … “Communication is key. You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves.”

    The study is contained in the book, “Greentailing and Other Revolutions in Retail,” which says that industry cannot afford to be complacent about customer interest in environmentally friendly products.

    KC's View:
    This is pretty good logic no matter what you’re selling. If your products can represent both value and values, it gives you a leg up on the competition because it allows you to forge a stronger connection with the consumer. It isn’t always possible, and not everybody has these kinds of priorities…but value plus values always seems to improve one’s chances for success in the marketplace.

    Published on: March 5, 2009

    Newsday reports that the Suffolk County Legislature this week has voted to ban polycarbonate baby bottles, which the paper says will protect children from exposure to bisphenol A (BPA), a compound included in such bottles as well as in other forms of commercial plastic. According to the story, a public hearing is required before the ban can become law.

    BPA has been the subject of some controversy. As previously reported here on MNB, there have been a series of studies linking BPA with health problems that include diabetes and heart disease. However, 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, that hasn’t stopped the Canadian government, Consumers Union (CU), the Consumer Federation of America (CFA) and Walmart from disagreeing with the FDA decision; in Walmart’s case, it is not selling children’s products containing BPA.

    In addition, an independent panel of scientific advisors has told the FDA that its reasoning was flawed when it issued a provisional ruling that BPA is safe.

    KC's View:
    And now, Suffolk County is weighing in. Which, if nothing else, established how much credibility the FDA has with the general population.

    Published on: March 5, 2009

    The other day, MNB had a story noting that a Washington, DC, area ice cream chain, Gifford’s, was going against the grain and actually increasing the size of its ice cream cartons without increasing the price…an unusual approach in an economy where many manufacturers are doing their best to hold fast on both prices and margins.

    Now, Unilever is wading into the fray on behalf of its Ben & Jerry’s brand, sending the following email to consumers on its mailing list:

    One of our competitors (think funny sounding European name) recently announced they will be downsizing their pints from 16 to 14 ounces to cover increased ingredient & manufacturing costs and help improve their bottom line.

    At Ben & Jerry’s we think downsizing pints is downright wrong. We understand that in today’s hard economic times businesses are feeling the pinch. We also understand that many of you are also feeling the same, & think now more than ever you deserve your full pint of ice cream.

    We are even more committed today to lead with our values through the quality of our ingredients & how we source them to make the best ice cream possible. So, while our competitor may be experiencing a bit of shrinkage, rest assured that your Ben & Jerry’s will still be standing tall in the freezer. Enjoy!

    KC's View:
    Forget for a moment who might be right in the retailer-manufacturer debate about costs and prices. The shopper is who ultimately will decide who is right and wrong, through a choice of brands and stores. Now, if you ask me, a message like “we’re holding the line on prices” is a lot more compelling to most shoppers than “we have to make up for increased ingredient and manufacturing costs.” And that goes regardless of whether it is a retailer or a supplier delivering the message.

    Published on: March 5, 2009

    • In the UK, the Guardian reports that Tesco has won an appeal against a proposed rule that would have limited the number of new stores that the nation’s largest supermarket retailer could open. The rule had been proposed by the UK’s Competition Commission, which wanted to force new supermarkets to meet a series of criteria before being allowed to go ahead; the test was described as being one way to prevent any single retailer from becoming too dominant, but experts said it was targeted mostly at Tesco.

    In a prepared statement, Tesco director Lucy Neville-Rolfe said, "We are delighted with the judgment, which is a victory for common sense, and endorses our view that the proposed competition test was ill-founded. A new test in the planning system would increase costs and make the process even slower and more bureaucratic. It would be particularly perverse to introduce a test that would block investment in the current economic climate."

    KC's View:
    As was pointed out here yesterday, the market seems to be taking care of the dominance question, as Tesco has been losing a tiny bit of market share for some months now.

    Published on: March 5, 2009

    Crain’s Chicago Business reports that Kraft CEO Irene Rosenfeld plans to cope with the recession by introducing line extensions of proven products rather than taking a risk on new concepts.

    “You will see lots of new products — they are the lifeblood of our business — but you will see them in the context of platforms and ideas that have essentially already been proven in the marketplace," she tells Crain’s.

    The feeling seems to be that by focusing on already validated concepts, Kraft accomplishes a couple of things. It cuts down on research and development costs at a time when the economy is putting a lot of pressure on sales and profits, plus it puts SKUs into the pipeline that are more likely to be competitive with the private label brethren that suddenly are becoming more attractive in a recessionary environment.

    There is no question that Kraft is pursuing the safe strategy, one analyst tells Crain’s…but the more important question is whether this is the smart strategy.

    KC's View:
    It seems to me that this is a time for both retailers and suppliers to be in the market share business…accepting that during a recession they will not be able to achieve the sales and profits of recent years, but building a share of market – and a share of stomach – that will serve them well when the days get brighter and the nation’s mood lightens.

    I’m not sure that this approach is better for building market share or defending current market share…but I guess we’re going to find out.

    When I read the original story in Crain’s, I couldn’t help but think of “Tucker: A Man & His Dream,” the terrific 1988 film with Jeff Bridges and directed by Francis Ford Coppola. The movie, which is a bio of the automobile innovator Preston Tucker, has a scene in which an executive from one of the major auto companies says, “A well run company doesn’t spend money on research and innovation, unless keeping up with the competition demands it.”

    That’s a lousy approach to business, and it certainly explains the problems that the American automobile industry is having. I trust it is not being emulated by Kraft, which knows better.

    Published on: March 5, 2009

    • The Boston Globe reports that a customer at a Walmart in Falmouth, Massachusetts, found a wallet while wandering through the store…and then discovered that the wallet contained 10 human teeth. The man turned the wallet into the store manager, who gave it to police…who said that they could not use forensics to find out who the teeth and/or wallet belonged to because there was no gum or blood tissue attached.
    KC's View:
    Assuming Hannibal Lecter is still in the asylum for the criminally insane, it still should be fairly easy to figure out who the teeth belong to.

    First, look for a recalcitrant CPG manufacturer who lately has been gumming his food…

    Published on: March 5, 2009

    Pacific Business News reports that Target has announced that it will open 27 new stores, including its first two in Hawaii and six Super Targets. The openings, according to the story, give Target stores in every state but Vermont.

    • The Washington Post reports that the Maryland State Legislature is considering a number of food-related initiatives, including a ban on trans fats in restaurants, a requirement that chain fast feeders post calorie and nutritional information, and even a requirement that foods from cloned animals or their progeny be labeled as such. While it is unlikely that all the measures will become law, the Post notes that the plethora of regulations reflects a growing national interest in food-related problems.

    • In western New York, local reports say that Wegmans has pledged to provide up to $2 million to allow poor children to attend local Catholic schools, contingent on the Rochester Catholic Diocese itself raising a half-million dollars to be used for the same purpose.

    The diocese has long been troubled, and a year ago was forced to close 13 schools. The pledge is seen as a way to help economically challenged families give their children a religious education while grappling with the recessionary economy.

    KC's View:

    Published on: March 5, 2009

    • BJ’s Wholesale Club reports that its fourth quarter profit was up five percent to $52.7 million, from $50.2 million during the same period a year earlier. Revenue grew three percent to $2.56 billion from $2.48 billion, on same-store sales that were up 1.7 percent.

    The company’s annual profit was up10 percent to $134.6 million, from $122.9 million a year earlier. Annual sales were up to $10.03 billion, from $9.01 billion a year earlier, on same-store sales that were up 9.4 percent.

    • Family Dollar reported that its Q2 sales were up 8.7 percent to about $2 billion, on same-store sales that were up 6.4 percent.

    KC's View:

    Published on: March 5, 2009

    …will return.
    KC's View: