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    Published on: March 11, 2009

    New research from The Nielsen Company says that “during the four-week period ending February 21, 2009, sales of jarred peanut butter fell to $87.2 million, down 2.3 percent from the same period in 2008.” The reason – there remains considerable consumer trepidation about peanut butter consumption because of the salmonella outbreak connected to peanut butter and paste emanating from factories owned by Peanut Corp. of America (PCA). Jarred peanut butter has not been implicated in the outbreak, but has been feeling the effects nevertheless - close to 42 million pounds of peanut butter were sold during that four-week period, down more than 13 percent from a year ago – the lowest number of pounds of peanut butter sold during any four-week period in the past three years.

    “While most brands of peanut butter - including the name brands that many consumers know and enjoy - were not subject to recall, the coverage the outbreak received has caused consumers to exercise an abundance of caution with respect to buying this product. The fact is that these brands are safe and should benefit once consumers recognize that the safety of these and most jarred peanut butters were not in question,” said Todd Hale, Senior Vice President, Consumer & Shopper Insights at Nielsen.

    The Georgia Peanut Commission, by the way, is saying that the salmonella outbreak is likely to cost the nation’s peanut producers $1 billion in lost sales and production. More than 2,100 products have been recalled because of the outbreak, which has sickened close to 700 people and may have caused nine deaths.

    KC's View:
    Some of this is normal caution, since consumers tend to be an impressionable lot.

    However, this also can be attributed to the fact that – best I can tell, though it hardly is a complete sample – a number of the retailers I have visited in recent weeks have not done a very good job of communicating with consumers about what is safe and what is not. Sure, they’ve participated in recalls … but they’ve hardly been transparent and aggressive in their communications with retailers. (I saw an endcap just a few days ago that was loaded with peanut butter, but nary a sign addressing the headlines that nobody has been able to avoid. This strikes me as being naïve, at best.)

    Peanut butter manufacturers have done a good job in communicating via advertising, but retailers ought to be more pro-active in their support of the category … especially because it firmly would position them as advocates for the shopper.

    Funny thing. The Nielsen story carried a headline that said, “Peanut Butter Sales Still Stuck.” But I thought it said, “Peanut Butter Sales Still Suck.” Which surprised me, because that didn’t seem very Nielsen-like to me.

    Of course, when I read it the second time, I saw what it really said. Though my original impression would have been just as accurate, if not more so.

    Published on: March 11, 2009

    The New York Times reports that Walmart is getting into the electronic health records business, and “plans to team its Sam’s Club division with Dell for computers and eClinicalWorks, a fast-growing private company, for software. Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half.”

    The cost of the package will be under $25,000 for the first doctor in a practice, and $10,000 for each additional physician in a given practice. Annual support services are estimated to cost about $5,000 a year.

    While Walmart has been interested in this business for awhile, the timing is particularly propitious…part of the stimulus package endorsed by the Obama administration includes $19 billion in incentives designed to get doctors and hospitals to adopt digital medical records.

    KC's View:
    Whether this will stimulate the economy is probably an open question, but there seems to be a pretty good bet that it will stimulate Walmart’s bottom line.

    On the face of it, this seems to be an idea more than ready to be implemented. I don't know about you, but whenever I walk into a doctor’s office and see stacks and stacks and shelves and shelves of file folders, all I can think is that they seem to be depending on a technology that is pretty much the same as it has been for centuries.

    Published on: March 11, 2009

    Reuters reports that Kroger CEO David Dillon has weighed in on the pricing tensions that have emerged between retailers and wholesalers, saying that while he has seen some price reductions, there are not in synch with commodity cost decreases.

    Retailers have been calling for manufacturers to lower their prices because commodity costs have been coming down and because the recession has had such an impact on consumer shopping behavior. Manufacturers, however, have been resisting because they say that they are locked into commodity contracts that remain high.

    Dillon said that private label sales have hit “historic highs,” and that this is likely to continue as long as manufacturers don't toe the line on price …and that he is perfectly happy with this scenario, especially since the retailer makes more margin on own-label products.

    According to the company, private label sales registered a record 35 percent of unit sales during the fourth quarter.

    KC's View:
    The question that needs to be considered – both by retailers and manufacturers – is whether the expansion of private label sales is a long-term shift, or just a reaction to the current economic situation that will go back to “normal” when the recession recedes.

    Ultimately, this will be up to retailers, and whether they want to put the branding and marketing muscle behind these products to make them viable alternatives long-term.

    Published on: March 11, 2009

    Forbes reports on the brands – ranging from Snapple to Frito Lay to Heinz to Walmart – that are “hoping to woo consumers with fresh, friendly new looks. A number of companies looking to divert attention from flat sales or reverse losses in market share are casting out tired logos in favor of friendly, more approachable looks. Some are taking the opportunity to play up fresh ingredients to customers who care more than ever about what goes into their food. The thinking: Maybe a face lift will help boost sales--or at least make the brand worth a second glance.”

    Sometimes the shift is just skin deep, but sometimes it means something more – as in the recent decision by Snapple to switch to a hipper design - “a taller, slimmer, cup-holder-friendly bottle” that emphasizes the natural ingredients that no longer includes high fructose corn syrup.

    KC's View:
    There’s nothing wrong with changing logos or packaging, but it is interesting that so many companies seem to be doing it at the same time, and during recession, no less. I wonder if they would have made the same moves if the economy were surging.

    Published on: March 11, 2009

    In New York City, CBS News has a story charging a number of foodservice operations with what it is calling a “calorie cover-up,” or not being accurate about the calorie counts they list on menu boards, as required by city law.

    For example, according to the report, a blueberry muffin at a Starbucks was listed as being 420 calories but actually was 580 calories. At Dunkin’ Donuts, a turkey, cheddar, bacon sandwich was supposed to be 360 calories but really was 460 calories. In fact, all of the seven items tested by CBS were inaccurately labeled…though to be fair, two of the seven actually had fewer calories than labeled.

    The story has prompted calls for the city Health Department to pay closer attention to claimed and actual calorie counts.

    KC's View:
    I suspect that these discrepancies are not deliberate or malevolent. But in a world where transparency is both a priority and hard to avoid, you have to have to get it right. And if you get it wrong, expect it to be all over the Internet or the evening news. C’est la vie.

    Published on: March 11, 2009

    • Safeway yesterday announced the formal introduction of its Waterfront Bistro line of more than two dozen exclusive “seafood selections and prepared entrees that make preparing a restaurant-quality meal at home easy.”

    The company noted that Waterfront Bistro products “can be found in the frozen food section in all Safeway, Vons, Pavilions, Tom Thumb, Randalls, Dominick’s, Genuardi’s, Carrs and Pak ‘N Save stores. The line is the newest addition to Safeway’s popular family of private label brands, which includes O Organics™, Eating Right, Primo Taglio, Signature Café, Lucerne, Rancher’s Reserve and Safeway SELECT.”

    KC's View:

    Published on: March 11, 2009

    • Kroger Co. reported that its fourth quarter income was up 8.1 percent to $349.2 million, with total Q4 revenue up to $17.3 billion from $17.2 billion. Same-store sales were up 3.8 percent.
    KC's View:

    Published on: March 11, 2009

    • Giant Food of Carlisle, Pennsylvania, has promoted Laura Williams from vice president/general counsel to senior vice president/general counsel.

    KC's View:

    Published on: March 11, 2009

    …will return.
    KC's View: