retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: November 5, 2009

    Now available on iTunes…

    To listen, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    Content Guy’s Note: My voice is extremely ragged this week, so Michael Sansolo was kind enough to do this week’s MNB Radio commentary...

    It’s rare that a presentation at a conference takes my breath away once, no less twice. Yet I experienced just that last week at a general session of the Worldwide Food Expo.

    The speaker, Temple Grandin, a professor at Colorado State University, would be worth hearing just to hear her somewhat radical methods of improving the treatment of animals on the slaughter line or in dairy farms. She demonstrates an understanding for the welfare of the animals that is extraordinary at the very least. And she makes it clear that her methods come with objective, scientific measures to help companies have simple, but effective ways of knowing if their animals are healthy and well.

    But that’s the smaller part of the story. What’s more stunning is this: Temple Grandin is autistic.

    Honestly, I didn’t know that an autistic person could accomplish the kinds of things this remarkable woman has done. I didn’t know they could get a PhD, teach at a university, get recognized as a global expert on animal welfare or be an effective public speaker. I learned I was terribly wrong.

    Janet Riley of the American Meat Institute, who conducted the speech as a conversation with Grandin, asked a simple question at the beginning of the presentation. She asked everyone in the room to raise a hand if they were related to or knew someone with autism. My hand was up along with two-thirds of the crowd. Then our education began.

    Grandin explained that she has become stronger and more functional through the years and today, in her 60s, is far better than ever. In her view, autistic people do best when given many experiences and learning opportunities that help fill their minds with knowledge and make it easier for them to operate. Grandin said her mind operates like a computer search engine, which searches for files and data depending on the situation. By doing that she can easily process information from the scientific to the comic.

    When asked by Riley if, given the option, would she want to be cured of autism, Grandin said no. She said without people like her with autism or other maladies, society would be made up of nothing but “dried up bureaucrats.” As Grandin made clear, she has a sense of humor too.

    Most importantly, she explained how her autism allowed her to excel. Grandin says she experiences everything visually in much the way animals do. So to help design more humane pens, she gets down in them like an animal and tries to absorb the sights and sounds the animals experience. By doing so she sees small things that would upset her and corrects them. When those ideas are implemented it creates an environment where the animals seem happier too.

    While Grandin’s business is obviously difficult and certainly untenable for animal rights activists, it’s easy to agree with her. She is clearly a person with a mission of humanity and she carries it out with seriousness and purpose.

    She’s also a speaker I will never forget. Temple Grandin will be the subject of an upcoming HBO film. It’s one I don’t intend to miss.

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

    Published on: November 5, 2009

    The Rochester Democrat and Chronicle reports that as Wegmans continues to grow, the company is targeting areas outside its home market of western New York.

    "We see our growth in a defined crescent between Washington and Boston, extending from Pennsylvania, Virginia and Maryland and up into Massachusetts," CEO Danny Wegman tells the paper. "We're looking at Connecticut." The company currently has 75 stores in New York, Pennsylvania and the Washington, DC, region.

    One challenge the company is facing is real estate prices. According to the story, “Danny Wegman said moving into Massachusetts has been a costly venture so far. ‘This is the most expensive real estate we've ever seen,’ he said, adding that the company first considered building a store in Boston, near Fenway Park, but that land acquisition costs were prohibitive. ‘We went west and are now 50 miles outside the city, which gives some idea how expensive land is’.”
    KC's View:
    Wegmans makes very few mistakes, and it will be very interesting to see what the company’s next moves are. My understanding is that the company still has a number of properties in the DC market that it hasn’t yet built on, so this probably all is long-term...but as a Connecticut resident, I have to admit to being intrigued about what Wegmans might have planned.

    Published on: November 5, 2009

    Interesting piece in the Los Angeles Times about how some entrepreneurs have defined a new marketing opportunity. Now that the Obama administration has decided not to prosecute medical marijuana dispensaries, these businesses have been growing “like weeds.” In Denver - as it happens, the Mile High City - there are more than 60 such dispensaries in Denver and Boulder, with more than 10,000 registered medical marijuana users in the state of Colorado.

    Well, where there is marijuana, inevitably there will be the munchies. Which is why Hapa Sushi, a local restaurant chain, has begun advertising the fact that some of its locations are close to the dispensaries.

    “We’re just kind of saying, ‘Look, these dispensaries exist and they’re becoming part of our community, so let’s welcome them in and have some fun,’ ” says Mark Van Grack, the chain’s owner. “If you’re going to smoke pot, you’re going to get the munchies, so come to Hapa to eat.”
    KC's View:
    Business development and marketing are all about finding opportunities and innovating around them. If the use of medical marijuana spreads - or, if as some people think, legalized pot is just around the corner - just imagine how good business is going to be for companies in the munchie business.

    Published on: November 5, 2009

    7-Eleven announced yesterday that it is teaming with Seven-Eleven Japan to sell a new private brand wine called Yosemite Road, that will as a Chardonnay and a Cabernet Sauvignon.

    According to the announcement, “Available in the companies’ collective 15,000 convenience, department and grocery stores, the introduction of the two California wines is the culmination of a collaborative, global merchandising effort for the world’s largest convenience retailer. The same-day launch marks the first global product designed and developed exclusively for Seven & i stores. Taking their experience and knowledge of product development to a new level, the companies’ international plan reduces provides a very reasonable sales tag for the consumer. Suggested retail price for a standard 750 milliliter bottle is $3.99 in the U.S. ($4.99 in Florida because of state taxes) and 598 yen in Japan.”

    “The development and production of Yosemite Road wines was a global team effort and is just the beginning,” said Kevin Elliott, 7-Eleven senior vice president of merchandising and logistics. “By using our collective purchasing power to negotiate product exclusivity and pricing, we can meet customer demand for quality and value, as well as differentiate our brand from the competition.”
    KC's View:
    The “big gulp” jokes are, of course, will be hard to resist. But there are two points here that should be taken seriously.

    One is that this move to offer a private brand wine signals how serious 7-Eleven is about changing its traditional approach to convenience.

    The other is the way in which the company clearly plans to learn as much as it can from its global brethren, which suggests that its approach to innovation is going to be very, very interesting.

    Published on: November 5, 2009

    Internet Retailer reports that “U.S. consumers age 65 and older are most likely to shop online (77%). Consumers ages 45-64 and ages 30-44 follow at 71% with those ages 18-29 at 70%, a new report finds. And when it comes to gathering information online, which can include researching products, 67% of baby boomers (45-64) and gen Xers (30-44) are on the hunt while 65% of matures (65+) and 55% of millennials (18-29) are collecting information.”

    The report means that while conventional wisdom suggests that high-tech marketing efforts are best used to target younger shoppers, in fact the use of computers and cell phones cuts across demographic lines - they are used by seniors, boomers, millennials and gen Xers. This creates a real opportunity for marketers to develop multi-tier programs, though they need to be customized for these different generational groups.
    KC's View:

    Published on: November 5, 2009

    Interesting piece in the New York Times yesterday about how Sam Kass, a White House chef, is playing a dual role in the Obama administration: “When he’s not grilling fish for the first family or tending tomatillos in the White House garden, he is pondering the details of child nutrition legislation, funding streams for the school lunch program and the best tactics to fight childhood obesity. Part chef and part policy wonk, he is reinventing the role of official gastronome in the Executive Mansion.”
    KC's View:
    There will be those who will see the negatives in this story, but my feeling is that a chef is far better able to talk about nutrition than a lot of elected officials. I also think that it always make sense to enlarge the circle so more perspectives can be heard. Maybe a chef - who understands how to cook, how to feed people, and the importance of taste - can see a way through this debate that makes sense.

    Published on: November 5, 2009

    • Kellogg Co. said yesterday that it will stop making immunity claims for its Cocoa Krispies and Rice Krispies cereals, a practice that had drawn criticisms because it was seen as exploiting the current H1N1 flu epidemic. The company had said that it began adding antioxidants and vitamins before this variety of flu was identified, and will continue offering these components even after it stops making immunity claims.

    • The US Department of Agriculture (USDA) said yesterday that it has identified a strain of the H1N1 flu virus in commercial herd of pigs in Indiana. It is the first time that the virus - also known as the swine flu - has been found in actual swine.
    KC's View:

    Published on: November 5, 2009

    • The Business Courier of Cincinnati reports on the announced retirement of Steve Kaczynski, who has served as the head of Bigg’s since 2006, has announced his retirement. He will be succeeded by Jimmy Nichols, vice president of merchandising at the 11-store chain.

    Supervalu, which owns the Bigg’s chain, said that Kaczynski will pursue other interests.
    KC's View:
    There’s a lot of that “he retired to pursue other interests” going on at Supervalu.

    It is worth noting that Kaczynski, who worked for Supervalu from 1981 to 1990, was hired away from Wild Oats, where he was senior vice president of sales and marketing, in 2006. It seems like that kind of experience and expertise is of less value at Supervalu in 2009 than it was just a few years ago.

    Published on: November 5, 2009

    • Whole Foods said that its fourth quarter profit was $36.4 million, up from $1,5 million during the same period a year ago, when there were a “host of charges” that depressed earnings. Q4 sales were up 2.3 percent to $1.83 billion, on same-store sales that were down 0.9 percent.

    • Miller Coors said that its third quarter earnings were up 37 percent to $229.7 million, on Q3 revenue that was up three percent to $2.01 billion.

    • Caribou Coffee said that its third-quarter profit was $654,000 up from a loss of $8.7 million during the same period a year ago. Q3 sales were up three percent to $62.7 million.
    KC's View:

    Published on: November 5, 2009

    Responding to one of yesterday’s stories, MNB user Jeff Weidauer wrote:

    There’s been a lot of opinion floating around that once the economy revives, brands will come roaring back. I would submit that brands never left, but for many consumers the term “brands” now includes not just national brands, but store brands as well. The paradigm has changed, for reasons beyond the recession. Consumers are looking for alternatives; they are better informed and more cynical about advertising claims (as they should be). They also trust their local store more than large manufacturers.

    National brands that believe they will push out store brands just because shoppers are feeling less pinched are in for a rude awakening. Store brands are here to stay as viable alternatives for shoppers; not because  of price, but because they have built a strong connection, just like a national brand. The rules have changed. Shoppers no longer view private label as just a cheap replacement for the “real” thing, and national brands need to adjust their strategies accordingly.

    MNB took note yesterday of a Consumer Reports story saying that the chemical Bisphenol A (BPA) - controversial because while it has been used in food containers, especially baby cups, for years even though there is some evidence that it may be linked to a variety of cancers, diabetes and heart disease - has been found in 19 name brand foods, including canned foods, including soups, juice, tuna, and green beans that were packaged in containers with BPA.

    One MNB user wrote:

    Let’s see if the CPG companies step up to the plate and solve this issue immediately, instead of waiting for multiple government agencies to battle a ‘turf war’ and come up with conflicting data and recommendations.  In light of all the recent food recalls, I believe consumers will stop buying products that use BPA.  CPG companies are ‘on the clock’ to solve this issue.

    One does have the sense that the eventual banning of BPA is almost inevitable. And you’re right - CPG companies do have a choice. Seems to me that it makes sense to get ahead of this one.

    Responding to yesterday’s story about online sales expected to be up during the end-of-year holiday season, compared to projections that brick-and-mortar sales will be stagnant at best, one MNB user wrote:

    How can on-line sales be a bright spot if those sales are merely taking away from brick and mortar? This does not help the country climb out of the recession, it merely moves sales on line and additionally often reduces vital sales tax revenue that state’s need.  I have no problem with technology changing the way we shop but let us not call it a bright spot and imply that it is helping anything.

    Better to light a candle than curse the darkness. A bright spot is a bright spot. Besides, I’m not convinced that this is an either/or situation. This represents a shift in what shoppers want and how they behave.
    KC's View:

    Published on: November 5, 2009

    In the sixth and final game of the Major League Baseball World Series, the New York Yankees defeated the Philadelphia Phillies 7-3, winning the series 4-2 and achieving the 27th championship in franchise history.
    KC's View: