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    Published on: April 1, 2009

    Articles in the Wall Street Journal and USA Today look at the same story this morning but from different perspectives.

    The Journal writes that the US Department of Agriculture (USDA) is saying that “farmers intend to idle millions of acres of land this spring as they cut production of most of the nation's major crops, including corn, wheat and cotton, and plant far fewer acres of soybeans than widely anticipated.

    “The retreat by recession-battered farmers -- the broadest in two decades -- is helping to set the stage for more volatility in prices of the crops used for everything from packaged food and biofuels to fattening livestock. The nation's major food brands were battered last year by gyrating crop prices in part because several companies made bad hedging decisions.

    “In a sign of what food executives fear is to come, crop futures prices leapt Tuesday on worries that any weather problems this summer could result in supply disruptions next year.”

    USA Today notes in its lead the same cutback in planting, but immediately notes that “industry experts say consumers should not expect a big jump in prices at the grocery store.” An increase of three to four percent in the consumer price index for food is expected this year, according to the report.

    KC's View:
    Not much that retailers and manufacturers can do about this, except that they need to be alert that rising prices in this economic environment is only going to fuel consumer discontent and cause even greater cutbacks in spending.

    I don't know about you, but I grow increasingly dubious when I hear people talk about an economic turnaround by the end of this year. I hope I’m wrong, but I keep thinking that with almost every passing day there is more bad news…and that there are doors still to be opened that we don't even know exist yet.

    Published on: April 1, 2009

    The Kansas City Business Journal reports that Walgreens has instituted a new program that will provide basic health care services to “current and future patients who lose their jobs after Tuesday and have no health insurance.” The plan provides for the treatment of “respiratory illnesses, such as colds, sinus infections, bronchitis and strep throat … common conditions, such as seasonal allergies and pink eye … (and) skin conditions, such as dry skin, poison ivy, minor skin infections and burns.”

    The plan, which will be administered by Walgreens’ Take Care Health Systems clinics Monday through Friday between 11 am and 3 pm, does not include vaccinations, health evaluations, and physicals.

    “Walgreens and Take Care Health Systems strongly believe that a family’s health care needs should not take a backseat to the economy,” Hal Rosenbluth, president of Walgreens’ health and wellness division and chairman of Take Care Health Systems, said in a written statement. “Take Care Clinics were founded on the principle of providing patient-focused care and doing all that they can to help every patient in the communities they serve.”

    KC's View:
    This is sort of the health care version of the offer being made by some car companies to take back new cars from people who lose their jobs after buying them. It is smart marketing, it demonstrates a connection to real world problems…and you have to believe that it will create some long-term loyalty.

    Published on: April 1, 2009

    The Los Angeles Times this morning reports that the US Food and Drug Administration (FDA) is working overtime on the current pistachio contamination problem as it tries “to prevent a repeat of a recent salmonella outbreak from peanuts that has sickened more than 690 people in 46 states.”

    According to the story, as supermarkets pulled the nuts off shelves and the FDA warned consumers not to eat pistachios because of concerns that they could be contaminated with salmonella, as it was revealed that three stains of salmonella had been detected in samples pulled from a plant operated by Kraft Foods and other manufacturers. The nut packer that recalled its products is Setton Pistachio of Terra Bella Inc.

    The Times also reports that the new salmonella scare has prompted the introduction of a bill in the California state legislature that “would require food processors to adopt detailed plans to ensure their products were safe, mandate periodic testing of food at California's food-processing facilities and tell companies to report to state authorities within 24 hours any positive test result for a dangerous contaminant.”

    KC's View:
    There have been some criticisms that the FDA is moving too fast on this one, and that it is creating panic by overreacting to the contamination of what is believed at this point to be a small number of nuts.

    But I’m not sure FDA has any choice at this point. It would be foolish of it to ignore history, and the presence of pistachios in a wide number of foods – in much the same way that peanuts are in a lot of different foods – creates the possibility of broader problems and certainly raises questions about traceability and transparency.

    Published on: April 1, 2009

    The Conference Board said yesterday that its March 2009 consumer confidence index was 26.0, up slightly from 25.3 in February but still a long way from the 37.4 recorded in January and the 65.9 registered in March 2008.

    There also were slightly mixed signals from consumers. The board’s “Present Situation Index,” which looks at how people feel now, was 21.5, down from 22.3 last month. But the “Expectations” index, which is how they think the economy will fare in the next six months, was up to 28.9 from 27.3 in February.

    KC's View:
    In other words, nothing has really changed. It’ll be interesting to see how the Obama administration’s approach to General Motors and Chrysler will affect the April numbers.

    Published on: April 1, 2009

    This is what is called an opportunity.

    Reuters reports that “across the country, the recession is giving extra sizzle to cooking at home. But this isn't Mom's meatloaf or macaroni and cheese. People who grew accustomed to dining out every night still want to eat in style. Besides cooking lessons, they are poring over food magazines, snatching up cookbooks and replacing their dingy pots and pans in hopes of creating gourmet meals on the cheap.”

    According to the story, housewares sales at stores ranging from Walmart to Sur La Table are on the rise, as are the use of cooking magazines, cooking websites, and cooking television shows.

    KC's View:
    This just reinforces a point made before here on MNB. The aspirational customers that existed before there was a recession still have their aspirations…just less money.

    Which is a wonderful opening for any food store that wants to market aggressively to these folks.

    Published on: April 1, 2009

    An annual survey of moms conducted by Produce for Better Health Foundation (PBH) suggests that “although 60 percent of moms continue to believe that their families eat too few fruits and vegetables, moms are including less of them in meals and snacks,” a trend attributed to the recession and its impact on people’s buying habits.

    According to the survey, “fruit consumption has dropped 12 percent since a year ago and vegetable consumption is down 6 percent … This the fourth year PBH has conducted their moms survey, and the first year a decrease in fruit and vegetable consumption has been noted.”

    KC's View:
    So in our previous story, we established that there is an aspirational America where people buy expensive pots and pans to cook because they cannot afford to eat out anymore. And this story suggests that there is an America where people are eating fewer fruits and veggies because of economic concerns.

    No reason that these two Americas can’t coexist, though at the moment I wonder if they are growing closer together or further apart.

    Published on: April 1, 2009

    The Detroit Free Press reports that the US Senate Banking, Housing and Urban Affairs Committee has approved legislation that would stop “credit card issuers from increasing interest rates on cardholders for reasons unrelated to their monthly bill and require a longer-notice period before imposing a higher interest rate.” The bill also would “prohibit interest charges on any portion of a credit card debt which was paid on time during a grace period … allow higher interest rates to apply only to future credit card debt, not to debts incurred prior to the increase … (and) require credit card issuers to offer consumers the option of operating under a fixed credit limit that cannot be exceeded.”

    However, the story says that it is expected that credit card companies will lobby intensively to water down the provisions or defeat the bill entirely.

    The full Senate now gets to act on the bill, which also need to be approved by the US House of Representatives before going to the White House for President Obama’s signature.

    KC's View:

    Published on: April 1, 2009

    Both The Nielsen Company and TNS Worldwide are out with UK grocery market share figures, and while not all the numbers match up, both agree that Tesco continues to lose market are to the competition in what has become a small but consistent erosion.

    Nielsen says that in the most recent quarter Tesco had a 27.6 percent share, compared to 28 percent during the same period a year ago. Walmart-owned Asda Group was up to 15.3 percent from 15.1 percent a year ago, while Sainsbury remained even at 14.8 percent. William Morrison Supermarkets rounded out the top four with a 10.5 percent market share, up from 10.3 percent a year ago.

    TNS Worldpanel said that Tesco’s market share in the last quarter was 30.4 percent, down from 30.8 percent a year ago, and its growth figures were pretty much in line with those reported by Nielsen.
    KC's View:

    Published on: April 1, 2009

    Advertising Age reports that Reckitt-Benckiser plans to shift $20 million of its annual ad budget on online advertising in 2009…20 times what it spent there in 2008.
    KC's View:
    People are spending so much more time online than they are watching TV or reading newspapers and magazines. It simply does not make sense for CPG companies or retailers to be depending on those analog properties to communicate effectively in a digital world. Unless, of course, irrelevance and obsolescence are the ultimate goals.

    Published on: April 1, 2009

    • Published reports say that A&P could be facing a strike in 15 Connecticut stores, as members of the United Food and Commercial Workers (UFCW) have authorized a job action against the retailer that could happen in the next two weeks if no agreement is reached.. The old contract expired at the end of February.

    • The New York Times reports this morning that Glacéau Vitaminwater, which has 50 calories per eight ounce serving, now is marketing a low calorie version of the product – Vitaminwater 10, which has just 10 calories per eight ounces.

    The reason? The Times writes that “as consumers become more weight-conscious, the lack of a lower-calorie version of Vitaminwater had become problematic for the brand — particularly since many of its fans are women. And the calorie chasm between eight ounces of Vitaminwater (50 calories) and eight ounces of vitaminless water (0 calories) loomed large.”

    • The Chicago Sun Times this morning reports that McDonald’s “will survey its U.S. potato suppliers and compile a list to its suppliers best practices to reduce pesticides, the result of an agreement with a shareholder group concerning the company’s pesticides use. McDonald’s the nation’s largest buyer of potatoes also said it would share information regarding the use of pesticides in its products.”

    KC's View:
    Which is pretty amazing when you think about it, because I’d always assumed that those fryers and that oil would kill off any pesticides, germs or other bacteria that might be present on McDonald’s potatoes.

    Published on: April 1, 2009

    Responding to the ongoing stories about food safety, MNB user Jackie Lembke wrote:

    I haven’t purchased baked goods with peanut butter in months and the headlines don’t stop as now I can’t have pistachios either nor spices in California. If I am that cautious and I work in the food industry, what about Joe Blow or Josephine Blow who just reads the headlines and doesn’t understand anything except peanut butter is dangerous. This isn’t going away and the food industry needs to take notice and do something before it is legislated. Food safety shouldn’t have to be forced upon us, we should take action because it is the right thing to do.

    Michael Sansolo used his column yesterday to write about possibilities and opportunities, which prompted MNB user Al Kober to write:

    I am one of those who believe that these could be the best of times for many Americans. We have gotten so use to the “good times” that we have lost sight of what is really important. We have forgotten the value of many things and have replaced these things with what we thought were better. The things mentioned here were reinforced at the AMC by the first speaker. Today’s kids are beginning to see the shallowness of some of our values and are looking for something better. Family, parents, eating together at home, cutting out of our lives those things that do not and have not satisfied our inner cravings, revaluating everything for their true importance and impact on their lives.

    I see today’s events as a cleansing process. Like when a storm impacts an old mature forest that has become so cluttered with wild growth and dying trees. A strong wind is needed to blow down the “dead Wood” that is blocking the sunlight and rain, keeping new growth from happening. Once those obstacles are removed then the new growth can begin. We are at one of the most opportune times in modern history … This is the current place we all stand. We all have the same information. We all have a choice. Will we continue to repeat the past or learn from it? One of my own quotes, “If it doesn’t really matter 100 years from today, it doesn’t really matter. That helps me keep it all in perspective.

    Not to be contrarian, but I’d point out that this all gets interesting because what is important to Al Kober may not be important to me. And neither of us can or should argue that we are absolutely right. So the values debate goes on…

    Michael also reflected yesterday on the importance of teaching people how to cook, which led MNB user Kevin P. Nolan to write:

    Your article reminded me of the late, great George Carlin and how he actually modified the very same Chinese proverb that you quoted in MNB to better reflect our times “Give a man a fish and he will eat for a day. Teach him how to fish, and he will sit in a boat and drink beer all day.”

    The man had a way with words!

    Also a way with essential truths.

    And MNB user Chris Buss chimed in:

    In reference to Sansolo's recent essay saying that many folks have "forgotten " the basics of meal planning & preparation. If my personal experience is any indication its worse than that....I assert that a generation of folks like me NEVER Learned the basics.

    I am 48 yrs old.....until I took a personal interest in cooking and food about 3 yrs I knew next to nothing about it. The fact that I grew up in a home that rarely ate out makes it even scarier. Until recently, Meal planning, knowing cuts of meat, types of vegetables etc were all foreign to me. There's a huge opportunity for companies that reach out to me, and others like me, to TEACH us the basics for the first time.

    Here is one of the reasons I love MNB.

    Yesterday, commenting on a story about how new studies have concluded that lobsters and crabs do feel pain, which is something of a shift in scientific knowledge, I wrote:

    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…”

    Which led MNB user John Rand to write:

    Let me add my voice to that of the inestimable Jack Lemmon. As a long time resident of Maine (though not a native; my decades there do not earn me the right to say I am “from” Maine, that is reserved for my wife and children who were actually born there) I learned long ago to get our lobsters “drunk” before cooking.

    Either wine or beer may be used, though I have always preferred wine. Needless to say, lobsters, whether they feel pain or not, have a poorly developed palate for wine and do not deserve a high quality vintage. We always use a jug of inexpensive white wine.

    Pour the wine into a large pot able to hold your lobsters “head down” and submerge the head and body in the wine. Wait a while. Enjoy some better wine with your friends. The wine in the lobster pot will bubble a bit as the lobsters drink it in. After a while, they stop moving very much. If you flick their tails they have no resistance. They are drunk, and will go quietly and with no further difficulty.

    Then REMOVE THEM FROM THE WINE. If you actually boil them in the wine, lightning may strike you, certainly you will be cursed by either Bacchus or whatever deity watches over crustaceans, or maybe both together. If you are right on the coast, try using seawater, but plain tap water will do fine.

    Cook till done. Eat. Enjoy. Go easy on the butter, good lobster needs nothing much more than itself. If fresh corn is locally in season, that will do nicely.

    The lobster will be much more tender and very flavorful without being overpowered.

    Though I long ago moved to Massachusetts, I am happy to report that unlike some other things moved from Maine to the flatlands, this will work even down here.

    But another MNB user wrote:

    Re: the Jack Lemmon movie called “That’s Life,” in which ………..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.

    No No No! I did this with a lobster bought straight off the harbour in a small port near Cork in Ireland. The slow heating caused the lobster extreme discomfort, it tried very hard to escape from the pan, so much so that it was impossible to keep it there.

    So I had to remove the lobster, boil the liquid, then put him in back in headfirst to a quick , though - I now realise - painful death.

    But he still tasted excellent!

    Your problem was that you happened to have that one Irish lobster who didn’t like to drink.

    Clearly both you and Jack Lemmon had it wrong…and John Rand has the right idea. Can't wait to try it.

    It is six in the morning as I post this, and I’m getting hungry for lobster.

    KC's View:

    Published on: April 1, 2009

    Two major retail-oriented stories broke this morning just as MNB was being posted…

    • Four major yet troubled retailing brands announced yesterday that they are being acquired by a major Chinese-owned venture capital firm, and that they will use their new alliance to develop mini shopping centers built around their individual concepts.

    The China-based investment firm, Marco Polo Finance, is quoted as telling major media outlets that it is a government-funded operation created out of concern about the huge amount of American debt being purchased by China. “If we’re going to buy something, we might as well buy retail brand names that have some value,” Raymond Shaw, the American named as Marco Polo’s CEO, is quoted as saying. “This way, we actually will have some control – and hence, can make a profit - over the coffee, books, music and drugs being purchased by decadent Americans used to self-indulgent lifestyles. We would have bought a fast food chain, but they are too expensive at the moment. But that’ll change eventually.”

    The retailers initially involved in the deal – Starbucks, Target, Borders, and Rite Aid – are all chains that have found themselves in varying degrees of trouble as the recession has worn on, and have been trying to figure out ways to regain past levels of profitability. Sources say that Marco Polo Finance has plenty of money left, and plans to acquire other chains in coming months; Marco Polo was planning to buy Circuit City, according to reports, but the company’s fortunes sank too fast and eventually it was not worth spending money on; Best Buy is projected to be a likely target of the Marco Polo group.

    Executives from the US chains were not available for comment, though local Seattle media said that Starbucks CEO Howard Schultz was happy with the deal, saying that this would take off some of the financial pressure under which he has been operating, plus open up the possibility of building “about a trillion” Starbucks stores in China, where it plans to introduce a new $2 instant tea product called ‘Tia.’ “Just put it in water, and you get a cup of tea that won’t just refresh you, but will change your life,” said one Starbucks development executive. “We’ve never seen anything like this before.”

    One of the goals of the Marco Polo retail consortium is to put Target’s supercenter growth plans on a fast track, sources say. “The Chinese government is one of the few entities in the world that has almost as much money as Walmart,” Shaw is quoted as saying. “So we think we can start building Target Supercenters at a fast clip, providing our own financing and taking advantage of the troubled US real estate market.”

    There are reports that the US government has antitrust concerns about the Chinese government’s entry into US retailing, and Sen. John Yerkes Iselin has scheduled hearings into the matter for later this month.

    • Ahold USA announced that it will shortly complete the integration of its Super Stop & Shop and Giant of Landover chains, going one step beyond the meshing of staff and operations that it began several years ago as a way of trimming costs and bringing new efficiencies to the company.

    According to sources, by the fourth quarter of this year all of the Super Stop & Shop and Giant stores in the fleet will be rebranded as “Super Giant Stop & Shop,” except at stores where the physical location is such that this is too long a name to put on the building and sign.

    In addition, Ahold USA executives said that, having been frustrated by charges that moving Giant’s operational center to Stop & Shop headquarters in Massachusetts has made its staff out of touch with the Baltimore-DC market, they now plan to move the headquarters for both chains to Boise, Idaho, where the state has offered tax breaks and infrastructure improvements to lure Ahold’s operational center. “Being local is overrated,” said one Ahold USA source. “We can do everything from a remote location two thousand miles away and be just as effective as we’ve been over the past few years.”
    KC's View:
    It’s extraordinary how these kinds of stories always seem to happen on this particular date every year. It must be something about the first of April…

    Content Guy’s Postscript: Shortly after this piece appeared, we got a phone call from the folks at Stop & Shop. While they had a sense of humor about this piece, apparently they have been deluged with phone calls from people within the industry as well as members of the local media…none of whom looked at a calendar.

    So let me be clear here, so that the folks who work Stop & Shop’s switchboard can get a break. Today is April 1, and this is the latest in a long line of APRIL FOOL’S JOKES that we’ve posted here on MNB.

    Remember…if we didn’t laugh we’d all go insane!

    Published on: April 1, 2009

    GS1 US has announced that supply-chain executives from CVS/pharmacy, Lowe’s, Macy’s and Wal-Mart will take the stage at its annual U Connect Conference in the Retailer Panel Keynote, with Kevin Coupe of moderating.

    Taking place on Wed., June 3, the panel will be the highlight of the first general session of the conference, which will be held June 2-5, in Orlando, Fla.

    The keynote panelists will share how they’re reducing costs and modifying their operations to survive and thrive in the current economic downturn. They will support the conference theme, “Transforming Your Supply Chain for Extraordinary Times,” as they draw on their experiences, successes, and observations of what makes for a successful supply chain.

    The executives are: Peter Longo, president of Logistics for Macy’s; Mike Mabry, executive vice president of Logistics and Distribution for Lowe’s; Gary Maxwell, senior vice president of International Supply Chain for Walmart; and Ramesh Murthy, vice president of Inventory Replenishment for CVS.

    For more information:

    KC's View: