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    Published on: January 18, 2010

    The New York Times has a piece this morning suggesting that Johnson & Johnson - long the model for corporate responsibility and accountability for how it handled the Tylenol recall back in 1982 - is getting far poorer marks these days for what is being termed a slow, inefficient and ineffective response to new problems with a variety of its medicines.

    According to the Times story, “On Friday, McNeil Consumer Healthcare, a division of Johnson & Johnson, announced the recall of several hundred batches of popular over-the-counter medicines, including Benadryl, Motrin, Rolaids, Simply Sleep, St. Joseph Aspirin and Tylenol.

    “According to a federal inspection report, the response was anything but swift. The recall came 20 months after McNeil first began receiving consumer complaints about moldy-smelling bottles of Tylenol Arthritis Relief caplets, according to a warning letter sent by the Food and Drug Administration to the company on Friday. Since then, a few people have also reported temporary digestive problems like nausea, vomiting and stomach pain, the agency said.

    “The McNeil unit of Johnson & Johnson had recalled some batches of the arthritis drug at the end of 2009. But the company did not conduct a timely, comprehensive investigation, did not quickly identify the source of the problem, and did not notify authorities in a timely fashion, prolonging consumer exposure to the products...”

    McNeil is saying that “the breakdown of a chemical used to treat wood pallets that transport and store product packaging was the source of the moldy smell in some products,” the Times reports.
    KC's View:
    Not sure what happened here, but the reality of such situations is that yesterday’s paradigm of excellence is just that - yesterday’s.

    This is a lesson that all businesses need to take to heart. Trust needs to earned every day, and can never be taken for granted. Brand equity only goes so far, and can be corrupted very easily.

    Published on: January 18, 2010

    Bloomberg reports that drugstore chain Walgreen Co. is talking to a range of food manufacturers - including Unilever, Nestle and Sara Lee - that could help it develop fresh foods and prepared meals that it could sell to its shoppers both as national and private brands.

    “Everyone is time-starved and we have the most convenient 7,000 locations in the US,” Bryan Pugh, the company’s vice president of merchandising, tells Bloomberg. “They’re on-the-way-home destinations that are easy to get in and out of and will provide a good value.”

    According to the story, Walgreen has not set a time or cost for an expanded food program, but is anxious to engage competitively with supermarkets, supercenters and even convenience stores.

    Bloomberg notes that Pugh is about to hire someone to run the company’s fresh food program; it also suggests that some clues to Walgreen’s likely approach may be found in Pugh’s previous employer - Tesco.
    KC's View:
    Like Jimmy Durante used to say, “Everybody wants to get into the act...”

    (Boy, I’m dating myself now. There are several generations of MNB readers that have absolutely no idea who I am talking about.)

    Walgreen certainly is right about the convenience issue, but it is all going to be in the execution. Walgreen is going to have to convince people that it is a reliable source for fresh food, and that is a tall order.

    But it also ought to be a wake up call for anyone who already is in the food business. There is a target on your back...and that’s the best reason in the world to get real focused on being a category killer in the food segment.

    Published on: January 18, 2010

    The New York Times reports on growing concerns at the US Food and Drug Administration (FDA) that bisphenol-A (BPA), a compound used in plastic bottles and food packaging that some people believe may have a negative health impact.

    According to the story, “The agency said Friday that it had ‘some concern about the potential effects of BPA on the brain, behavior and prostate gland of fetuses, infants and children,’ and would join other federal health agencies in studying the chemical in both animals and humans.”

    It has taken some time for the FDA to come to this conclusion, the the story suggests that the change of heart may be partially attributable to the Obama administration, which is being more aggressive about regulatory issues.

    In 2008, the FDA drafted a report saying that BPA was safe, but shortly thereafter a division of the National Institutes of Health questioned that conclusion. The FDA position was further thrown into doubt, the Times< notes, when the agency “asked an independent panel of scientific advisers to review its draft report, and the panel gave it a scathing review. It accused the FDA of ignoring important evidence and giving consumers a false sense of security about the chemical. The drug agency promised to reconsider BPA, and the announcement on Friday fulfilled that pledge.”

    There are some pretty impressive institutions lining up on both sides of this issue. Among those saying that BPA is safe when consumed in small amounts, including the 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 states of Connecticut and Minnesota, 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 New York State, Suffolk County has banned the use of bisphenol A (BPA) in empty beverage containers for children under the age of three.
    KC's View:
    You could figure out where this story was going months ago. MJy feeling from the beginning was that Walmart was the tipping point on this one - when Walmart came out against BPA, that was the end of the story.

    Published on: January 18, 2010

    A number of retailers continue to line up to support relief efforts aimed at helping the citizens of Haiti devastated by last week’s earthquake. Among the programs:

    • Safeway launched a companywide initiative to provide humanitarian relief for people impacted by the Haiti earthquake. The Safeway Foundation will make an initial contribution of $100,000 to the American Red Cross and UNICEF, two organizations at the forefront of the earthquake disaster relief mission. The company’s stores throughout the U.S. and Canada has begun collecting donations for Haiti Disaster Relief through a checkstand program. In addition, Safeway’s corporate offices and other non-store facilities will conduct employee fundraisers so the company’s entire workforce can contribute to this important effort.

    • Winn-Dixie Stores is implementing its “Neighbors Helping Neighbors” program in all of its 514 stores to help support the American Red Cross disaster relief efforts in Haiti. “Neighbors Helping Neighbors” allows Winn-Dixie customers to donate to the Red Cross by simply indicating the amount of their choosing (between 50 cents and $500) at the cash register. The cashier will automatically add that amount to the total bill.

    • Weis Markets has begun collecting donations on behalf of the American Red Cross's Haiti Relief and Development Fund in all of its stores,allowing customers can donate the amount they wish by adding to their grocery bill at check out or at the courtesy desk.  This option is available to customers paying with cash, check, and credit or debit cards.

    • Rite Aid announced that The Rite Aid Foundation is making a $50,000 donation to the American Red Cross International Response Fund to help the victims, families and communities affected by the recent earthquake in Haiti. In addition,
    shoppers will be able to donate funds by purchasing $1 disaster relief certificates at any Rite Aid store across the country in a program similar to ones Rite Aid conducted to support tsunami relief efforts in 2005 and aid the victims of the attacks on 9/11. Rite Aid associates in the corporate and field offices as well as the company's distribution centers will also participate in the program. All funds raised will be donated to the American Red Cross International Response Fund for earthquake relief.
    KC's View:
    Yesterday I bumped into Stew Leonard Jr. at his store, and I was amazed to hear that there are 89 people of Haitian descent working in his Norwalk store, and well over 100 people of Haitian descent working in his company overall. That’s extraordinary.

    Stew said that in addition to raising money for the American Red Cross, he’d decided to write a check from his family foundation and make the funds available for his affected employees to use the money in ways that would help their families and their communities. In other words, he was making the donation personal ... which I think is very smart and very compassionate. And one of the reasons, I suspect, that Stew Leonard’s makes the annual list of best places to work in Fortune magazine.

    Published on: January 18, 2010

    The Wall Street Journal reports that the Reader’s Digest Corp. is expected to exit bankruptcy now that at judge has approved its reorganization plan that “slashes the company's $2 billion debt load and hands the company to senior lenders led by JP Morgan Chase & Co.”
    KC's View:
    Managers at the magazine, familiar for having been at supermarket front ends for decades, no doubt are preparing for a world that includes color television, touch-tone telephones and women going out into the workplace.

    Okay, I’m just kidding. To be fair, Reader’s Digest does publish Every Day With Rachel Ray. So its feet are not irretrievably planted in the fifties.

    But I still cannot shake the impression that the company’s main publishing vehicle is one that is pretty much obsolete in a time of Google, Yahoo and Wikipedia.

    Published on: January 18, 2010

    • The reports on this story have been all over the map, but this morning there seems to be new speculation that Kraft Foods will sweeten its $16.5 billion offer for Cadbury; it has until tomorrow to do so, based on British rules covering such cases.

    Cadbury has dismissed Kraft’s previous bid as “derisory.” There also have been reports that Hershey could submit a competitive bid.

    CNN reports that Starbucks has raised the prices on certain “complex beverages” by as much as 35 cents, in what it says is the “normal course of business.” According to the story, “At one location in New York, prices went up by 20 cents, with local customers paying more than $4 for a tall mocha latte. Prices have also gone up in California, Washington, D.C., and other large U.S. markets.”
    KC's View:

    Published on: January 18, 2010

    • Walgreen Co. announced that Kermit R. Crawford has been promoted from senior vice president to executive vice president of pharmacy services.

    In addition, Dana I. Green also has been promoted from senior vice president to executive vice president and general counsel.

    And, Colin F. Watts, divisional vice president of innovation and new product development, has been promoted to a corporate vice president.
    KC's View:

    Published on: January 18, 2010

    We have a story today about Walgreen considering a move into the food business, which follows last week’s story about Walgreen testing out some new health care initiatives. Interestingly, we got very different responses to last week’s piece.

    MNB user Connie Montgomery wrote:

    When is the last time you tried to speak with the Pharmacist at a Walgreens?   The last time I did, I had to wait about 30 minutes. And if you've ever had to wait for an Rx; that is even worse.  So if the Pharmacist stops putting together the Rx's to talk to the Type 2 Diabetes customer, the filling of the Rx is extended even longer.

    I can't see this program working well for them.

    I shop at Walgreens, but stopped using them for Rx years ago because of their service in the pharmacy.  I go to Wal-Mart or HEB.

    But another MNB user wrote:

    I took my sister to a Walgreen Clinic recently for her H1N1 and reg. flu shot! It was perfect. In addition they were offering several other vaccinations there, and I would have no issues getting them there as opposed to having to drive the 15 miles to my doctors office and get them. It was clean, professional, and within walking distance for us!

    As long as they are clean, sterile, and professional I think they are an awesome idea!

    Responding to last week’s news about Procter & Gamble creating a new website for direct selling of some of its products, one MNB user wrote:

    This seems like a response to the retailers attempt to diminish the role of branded items and increase the role of private label. The mantra is to have a few branded best sellers and a ton of private label. It is called SKU rationalization.

    Basically, P&G loses retail space. They need an alternative. Looks like e-commerce is it. I imagine that there will be efficient home delivery of bulky items like Charmin, Pampers, Iams dry dog food etc “as a convenience to the shopper”. Then they will move to speciality items that have been pushed off of the retail shelves.  If P&G is feeling this pressure, and responding, imagine what is happening to its less sophisticated competitors.

    My review of “The Blind Side” last week generated the following response:

    You mention “the usual Hollywood approach” re: Blindside.  Two thoughts – first, it’s a true story, so it wasn’t Hollywood in this case.

    Second, I tend to notice just the opposite – the trend and subliminal message in the majority of sitcoms and movies is to portray ‘the rich” as evil, greedy, selfish people and they should share their toys and the sandbox.  Especially “white men”.  According to the media, TV, movies, ads – they’re the worst!  Rich white men = “bad”.

    Blindside showed there are actually good “rich” people!  Who can be altruistic and unselfish.  It just so happens that Michael Oher was/is “black”.  It’s not the fault of the family who adopted him.  (I loved the pictures at the end of the movie, with the “real” family!! )


    I took note last week of the fact that a new Whole Foods being built around the corner from my home will have free charging stations for electric cars - not something you see a lot of in this part of the world. Which prompted one MNB user to write:

    Here at our Food Co-op in Burlington we reserved a space for electric cars with free charging when we built our larger store in 2002.  At the time we chose to do this because it was a nice way to reward customers who chose a greener form of transportation.  It’s always interesting to see big business getting press for similar initiatives years down the road for something Co-ops did for the sake of doing the right thing.

    We’ve discovered over time that Co-ops are great at providing cutting edge services to our customers well in advance of the corporate industry, we just haven’t been as effective in tooting out own horn. As folks learn more about our food system I suspect that the masses will recognize that food co-ops offer something corporations can’t buy from their ad agencies.

    Fair points. All of them.

    I mentioned last week that I wouldn’t use the charging stations because IU don’t own an electric car and can actually walk to the store, which prompted one MNB user to write:

    I hope that if you are walking to Whole Foods that you are not returning home with one of their shopping carts.

    Of course not. I’ll be carrying my genuine, limited edition MNB canvas shopping bags, made by our sponsor, EcoBogs.

    Finally, MNB user Katherine Dykes wrote:

    A writer who does a fairly obscure Risky Business reference and a Johnny Carson reference in one week will keep me reading!  Thanks so much!

    My pleasure. “Obscure references” is practically my middle name.
    KC's View:

    Published on: January 18, 2010

    MNB is thrilled to welcome a new sponsor to MNB this morning - Caribou Coffee, which will be using our site to communicate with you about its exceptional products, customer-oriented solutions, and the kinds of partnerships that it believes can provide your business with a differential advantage.

    So check out Caribou Coffee - not just because the company is supporting MNB, but because Caribou represents the kind of passion, hard work and excellence that can make the difference at retail. Click here.
    KC's View:

    Published on: January 18, 2010

    In the weekend’s National Football League divisional playoffs, there were three blowouts and one upset that went down to the wire.

    The New Orleans Saints defeated the Arizona Cardinals 45-14, the Indianapolis Colts beat up on the Baltimore Ravens 20-3, and the Minnesota Vikings whipped the Dallas Cowboys 34-3.

    But, in the only tight game of the weekend - in which the winner was both the road team and the underdog - the New York Jets defeated the San Diego Chargers 17-14.

    Next weekend, the Jets will go to Indianapolis to play the Colts in the AFC Championship game, while the Vikings will go to New Orleans to play the Saints for the NFC Championship.
    KC's View:
    Oh, baby...there was a lot of fingernail gnawing in the Coupe household last night, let me tell you.

    Let’s hear it again...

    J-E-T-S...JETS, JETS, JETS!!!!!