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    Published on: March 31, 2009

    by Michael Sansolo

    In the universe dominated by talking heads, there is a very strange question rearing its head: Is it possible that today’s economic crisis is actually good for us?

    Don’t laugh too quickly. The point has some merit if we see this as the moment that Americans (and presumably others on this planet) start relearning some very important things, such as living within our means and stop believing that easy wealth is a birthright. There might be some gain from all this pain.

    Anna Quindlen’s column in the March 30th issue of Newsweek is must reading along these lines, reminding us about a lot of things that we’ve all forgotten. In the column, Quindlen admits that she really doesn’t understand things like swaps, derivatives, hedge funds and more and offers a bet that most Americans don’t either. Worse yet, she points out that many of us have over the years lost touch with the most basic skills in life, such as how to shut off the water in our homes when a pipe bursts.

    So while the column touches on our anger and bewilderment over the friendly folks at AIG and the Madoff clan, it also reminds us how we fooled ourselves and got into this pickle. (By the way, Quindlen is also a sensational author. Pick up a copy of Black and Blue and get insights into spousal abuse like you have never read before. It’s just one of her many fine books.)

    The message resonates with this industry. In the middle of this economic storm there are all kinds of strange messages out there. You hear how Americans are permanently changed financially and gastronomically. You hear how eating habits are shifting back to meals at home, which would suggest that supermarkets need do nothing more than open their doors and wait for the money to flow in.

    Except, of course, in the middle of a storm it isn’t always apparent where we are really headed once things calm down.

    Regular readers of this column know I see opportunity in this period. I do think shoppers are looking for ways to rebalance their spending; eating at home has a chance, but is not a guarantee of growth. But it won’t just happen.

    If Quindlen’s point is correct, and I think it is, Americans have forgotten. They have forgotten how to select food, how to assemble menus and certainly how to cook. So simply building displays of low-priced goods isn’t going to solve any problems right now.

    More than ever, we need creative merchandising that helps the shopper figure out how to make a meal. Remember, it’s about solutions, not ingredients. They want solutions to busted budgets and bulging waistlines. We have answers, but we need to guide them to it. They may be returning to home cooking out of necessity right now, but it won’t last if they don’t learn something about how to assemble great tasting, healthy meals. We have to grab them while we can.

    I ran into a stunning example of how this could happen this past weekend, while doing a stock up shopping trip at Wegmans, the poster child for doing things right. In the produce aisle, I ran into the strangest sampling ever—steamed broccoli, brushed with garlic butter. Needless to say, it wasn’t the most popular sample ever.

    The woman handing out the samples (I was one of the few takers) said the demonstration was aimed at teaching people about making good foods taste great. Nearby was a cooking station where a tasty dish of sesame noodles, chicken and asparagus was being prepared. As the woman there explained, the dish is easy to make and everything I needed was right at hand. In short, she was showing me—a bad cook how to make a great meal.

    Remember the old Chinese proverb: Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.

    Teach him or her to cook it tastefully, and you may win over a customer too.

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

    Published on: March 31, 2009

    The Chicago Tribune reports that a new study by The NPD Group suggests that the number of shoppers who have confidence in the US food safety system has declined to 63 percent, from 68 percent in 2004.

    NPD VP Harry Balzer tells the Tribune that he attributes the decline to the greater number of prepared foods sold by supermarkets, and the feeling on the part of consumers that food handling by retailers is not as expert as in restaurants.

    Balzer suggested that he does not think that current salmonella contamination scares will have a long-term impact – that they raise concerns temporarily, but that things go back to normal when the headlines subside.

    KC's View:
    I’m not sure I entirely agree with this last point, mostly because the headlines never seem to subside for very long.

    I’m actually surprised that the confidence number isn’t a little lower.

    Published on: March 31, 2009

    The Washington Post reports that the US Food and Drug Administration (FDA) is warning consumers to stop eating all foods containing pistachios, and said that Terra Bella Inc., the nation’s second largest pistachio processor, was recalling more than two million pounds of nuts that had been shipped since last fall.

    The reason: concerns about salmonella contamination, though a firm connection has not yet been established.

    "Our advice to consumers is that they avoid eating pistachio products, and that they hold onto those products," said Dr. David Acheson, assistant commissioner for food safety. "The number of products that are going to be recalled over the coming days will grow, simply because these pistachio nuts have then been repackaged into consumer-level containers."

    The recalled nuts is just a small percentage of the 278 million pounds of pistachios produced annually by California, which is the world’s second largest producer of the nuts.

    According to the story, “The FDA learned about the problem last Tuesday, when Kraft Foods notified the agency that it had detected salmonella in roasted pistachios through routine product testing. Kraft and the Georgia Nut Co. recalled their Back to Nature Nantucket Blend trail mix the next day … By Friday, grocery operator Kroger Co. recalled one of its lines of bagged pistachios because of possible salmonella contamination, saying the California plant also supplied its nuts. Those nuts were sold in 31 states.”

    KC's View:
    Not a development likely to reassure consumers about the general state of food safety, noting coming on the heels of the peanut butter salmonella case that has yet to go away.

    I was riding the train in Chicago yesterday, and noticed that there were a bunch of ads posted talking about the various nutritional benefits of peanuts. And all I could think was that the product’s new ad slogan ought to be: peanuts. We won’t kill you. Really.”

    Published on: March 31, 2009

    The >Knoxville News Sentinel reports that some area Kroger stores are cutting back on opening hours and no longer will be open 24 hours a day – a decision that is being in made in reaction to the economic downturn and is being made on a case-by-case basis.

    “As we continue to evaluate our business and area locations, what we want to make sure is we’re offering real value and service to our customers when they need it most, primarily during these economic times” said Glynn Jenkins, director of communications and public relations at Kroger’s Atlanta Division, in a prepared statement.

    KC's View:
    Suspect we’re going to see more of this, as companies look for ways to cut costs.

    Published on: March 31, 2009

    Der Spiegel has an interesting – and a little frightening – story, reporting that “a mysterious illness is causing calves to bleed to death on German farms. Veterinarians are stumped over what is causing the deaths: vaccines, genetically modified feed or perhaps even the first mother's milk?”

    According to the story, “The afflicted two-to-three-week-old calves begin bleeding massively and are often dead within hours. More than 100 cases have been documented throughout Germany, most of them in Bavaria, but the number of unreported deaths is believed to be much higher. Cases have also been reported in Belgium, but experts are still puzzled over what causes the condition.”

    The disease has been occurring over the past two years, and “the experts have discovered massive bleeding of the subcutaneous tissue and intestines. The bone marrow is also severely damaged, and veterinarians describe its consistency as ‘gel-like.’ Blood cells are formed in the bone marrow, and the sick animals apparently lack platelets, which are indispensible for coagulation. In addition, the calves' white blood cell counts are substantially lower than normal, making the animals more susceptible to infection.”

    KC's View:
    Great. Just what we need. Another disease without an explanation or cure.

    Published on: March 31, 2009 carries a story from the Discovery Channel sure to inflame passions among animal rights activists, saying that there new studies concluding that lobsters and crabs do feel pain, which is something of a shift in scientific knowledge.

    According to the story, “crustaceans possess ‘a suitable central nervous system and receptors.’ They learn to avoid a negative stimulus after a potentially painful experience. They also engage in protective reactions, such as limping and rubbing, after being hurt. Physiological changes, including release of adrenal-like hormones, also occur when pain or stress is suspected. And the animals make future decisions based on past likely painful events.

    “If crabs are given medicine — anesthetics or analgesics — they appear to feel relieved, showing fewer responses to negative stimuli. And finally, the researchers wrote, crustaceans possess ‘high cognitive ability and sentience’.”

    KC's View:
    When I saw this story, all I could think of was a long-forgotten and not very good Jack Lemmon movie called “That’s Life,” in which he says that if you want to have a better tasting lobster, the way to do it is to cook it in wine, not water…if I recall correctly, he suggests putting the lobster into a pot filled with room temperature wine, and then slowly raising the temperature to boiling. The lobster dies, he says, but it dies happy and tastes better.

    Which sounds reasonable to me.

    I want my crustaceans to be treated humanely, but I’m not going to stop eating them. Because as a famous poet and troubadour once sang, “I’m living on things that excite me, be they pastries, lobsters or love…”

    Published on: March 31, 2009

    The Seattle Times reports that coffee sales at Pacific Northwest Krispy Kreme stores were up 229 percent last week, compared to the week before, when the company dropped its coffee prices to Depression-area levels – a small cost a nickel, a medium cost a dime, and a large cost a whopping 15 cents. (Compared to the usual $1.45, $1.65 and $1.75 charged by the chain.)

    The company says that while it is not making money on the coffee, people are also buying doughnuts, which is contributing to the chain’s bottom line.

    KC's View:
    Can’t remember the last time we had a good news story about Krispy Kreme, which has been suffering through a long period of slowing sales and financial reversals, in part created by its over-expansion at a time when low carb diets were becoming all the rage.

    I can imagine that a warm, fresh Krispy Kreme might be just the thing to soothe ragged nerves during tough times. Maybe things will turn around for Krispy Kreme.

    Published on: March 31, 2009

    • Published reports say that PepsiCo is testing a new “green” vending machine in the Washington, DC, area, that uses 15 percent less energy that traditional machines and emit 12 percent less greenhouse gas – though they are more expensive than the old boxes. The new machines have been lauded by Greenpeace and if tests are successful, they could be rolled out globally in a couple of years.

    • The Wall Street Journal reports that “Sara Lee Corp. said it is exploring options for its international household and body-care business, including a possible sale, after receiving expressions of interest.”

    The company has been in the process of selling its lower growth businesses, but didn’t name the companies from which it received expressions of interest.

    • The Greenville News reports that as Bi-Lo restructures its finances under the supervision of a bankruptcy court, Ahold – the former owner of the chain - has offered a financing package that competes with the $100 million worth of financing arranged by GE Capital.

    According to the story, Ahold offered “Bi-Lo $35 million in debtor-in-possession funding, but the package rivals GE Capital’s bid in terms of new money available to Bi-Lo.”
    KC's View:

    Published on: March 31, 2009

    • Starbucks announced that it is adding a new member to its board of directors – Facebook COO Sheryl Sandberg, who formerly was vp/online operations at Google.
    KC's View:
    Don't usually get into people getting nominated to various boards, but this struck me as an interesting move by the troubled coffee company. Being based in Seattle, it has plenty of access to high-tech intelligence, but putting a Facebook/Google veteran on the board shows a commitment to figuring out the new generation of consumers.

    It is a move that more retailers ought to emulate. Do you have people with experience on the Internet, with next generation thinking, on your board, or serving as an advisor to your company? If you don't, you probably are missing potential opportunities.

    Published on: March 31, 2009

    …will return.
    KC's View: