retail news in context, analysis with attitude

MNB had an email last week from a reader who was critical of Daymon Worldwide in the wake of the decisions by Supervalu and Safeway to no longer do business with the private brands giant.

Another MNB user, who works for Daymon, offered this response:

On Wednesday you had a comment in your views from a reader commenting about Daymon Worldwide and “their kind” (I’ll assume he is referencing other service providers/consultants who work in-house with retailers/companies).  It sounded to me like an indictment of Daymon, in-house brokers and anyone else who acts as a consultant trying to add value in a different way and is now “old thinking” based on  Safeway and SuperValu’s recent decision to no longer work with Daymon.  I didn’t agree with the statements made and would like to offer an alternative to think about while addressing a few comments made.

The first comment was, “don’t you think that leading retailers like Walmart, Target and Walgreens would use these guys if they had real value”.  True that not all retailer’s work with in-house brokers, but a large amount of the best retailers with great Private Brand programs in the world do.  When you think of the best Private Brand programs in the supermarket industry in the US, I’m sure you’d start the list with folks like Wegmans, Kroger, Topco and Costco, all of whom work with some form of in-house brokers.  Many of these and other successful retailers also work with other consultants who help them accomplish their goals in areas where they can offer specific expertise, like supply chain.

Another comment was, Daymon brings value to retailers that are financially “sick”.  Daymon is now a 40 year old company, would it make sense for them still to be around if they only worked with financially “sick” retailers?  If that was the case, my guess is that they would have no long term relationships, right?  Daymon has worked with multiple, successful retailers and suppliers for more than 20 years.  Also, I wouldn’t include any of the above retailers into the “sick” bucket.

Another comment was, “in-house brokers bring no value except administrative help”.  I would ask your readers to check the facts on private brand growth. Retailers who work with Daymon are growing their programs at a faster pace than those who don’t.  All the work done to drive a Private Brand program isn’t just high level strategic work and some times it does require some administrative, education and execution work.  Sometimes this ability to educate and execute are what make the difference in taking a program to the next level.  Also, being the Worldwide Private Brand experts you’d think Daymon would know all the Best in Class attributes of a successful Private Brand program in many different classes of trade.  Do you know all those attributes?  Do you know what new services Daymon is providing to help their supplier and retailer partners that have evolved in the last couple of years and are the most innovative?  Although the general model of in-house brokers hasn’t changed, the services Daymon and others provide have changed significantly.  If you don’t know what the latest in private brand value and innovation is, maybe Daymon or “their kind” could help you?

Lastly, were inferences that Daymon doesn’t introduce new supply options and that “kick backs” are given to fund the bottom line.  Although some brokers do give what you call kick backs, Daymon does not promote this and prescribes to a strategy of adding value through their key asset, great people.  With these great people, their expertise and focused resources Daymon works with their partners to drive a great Private Brand program and innovate in areas most important to those partners.  Daymon also believes in bringing suppliers and retailers closer together and not acting as any type of roadblock.  What your writer failed to mention was how Daymon directly works for the suppliers to drive their sales and help them accomplish their goals.  If Daymon was such an added cost, how could so many retailers be able to work with them and still be competitive?  Why would SuperValu and Safeway have stayed with Daymon for that long (over 5 years)?  I’m also a little confused on the motivation Daymon would have to not bring new supply opportunities that would help retailers grow their brand, that doesn’t seem logical as Daymon’s goal is to drive sales for the supplier and retailer (and to grow their own bottom line).

I’m sure it’s become obvious by now that I’m a proud and passionate Daymon associate.  I’m not trying to sell you that Daymon is perfect or the perfect partner for everyone, because I don’t believe we are.  What I can tell you is that Daymon owns the most intelligence on Private Branding in the world.   When you agree to partner with Daymon we are totally dedicated to help you accomplish your goals, but like all partners we need clear, common goals and measures.  Like other consultants or experts in their field we have relationships that begin and some that end.  Some will choose others paths to accomplish their goals outside of Daymon expertise and that’s doesn’t make them right or wrong, good or bad.

So here’s my alternative to the idea that working with Daymon/in-house providers and consultants is “old thinking”.  Maybe “old thinking” really is that trying to do everything by yourself means you are in control.  That looking for outside ideas and expertise doesn’t apply to me and that having empowered partners working to achieve common goals is a myth that only puts you at risk.  I feel that those interested in being great surround themselves with others who are great, have expertise, passion and can challenge them with what’s new, how to think differently and what is the best of what others are doing (a reason why many elite athletes have coaches and trainers).  This constant challenge and focus on continuous improvement is usually what makes leaders, athletes and organizations .great in the long run.  Old thinking may be that you can do that all by yourself.  I’ll vote that the latter is the real “old thinking” but I’ll leave it to you and your readers to decide.

Two quick observations here.

One is that whatever the reasons for Supervalu and Safeway to take their private brand operations in-house, it strikes me as at least possible that it will not be long before at least one of the companies discovers that Daymon was bringing more to the table than they realized ... and perhaps reconsiders its decision.

Two, one of the things that Daymon said when addressing the changes was that it would do its best not to have any layoffs...that it would move people around as best it could to assure that nobody would lose a job (though obviously there could be exceptions if people are unable or unwilling to move). There are a lot of companies that have suffered reversals over the past couple of years, but I would suggest that the nation’s economy would be in a lot better shape if more companies had taken an approach similar to Daymon’ opposed to using a chain-saw to eliminate people and positions.

On the subject of stagnant consumer spending, one MNB user wrote:

I may have a more cynical view of why your typical grocery customer is in a “holding pattern” on increased spending. I believe that it is due to financial survival. Jobs are not rebounding, the government continues out-of-control spending on bailouts/stimulus/entitlements, and I’m guessing  that most of your readers are not on the receiving end of these programs. Therefore, her grocery spending is inhibited by what all of this will cost her family when she has to pay for the government programs for all of her neighbors. I think that this is the new reality!

Regarding a film festival - featuring movies about the environment and the food supply - being sponsored by Whole Foods to celebrate what it calls “Earth Month,” one MNB user wrote:

I just hope the festival doesn't become one big forum to bash commercial agriculture. Without commercial ag we cannot hope to feed the billions of people that populate the world. Local, organic and sustainable are great practices, just not yet practical on a large enough or economical scale. Many times those who advocate these practices - because they generally come from comfortable means - forget that there are millions of families everywhere who have to choose between putting food on the table or filling a prescription or paying the electric bill. Those disadvantaged families would starve - or go even hungrier - without commercial agriculture.

Another MNB user wrote:

I appreciate the passion that Whole Foods has for the environment. I think most people want to do the “right thing” when it comes to the environment as our choices will effect not only us, but our children and our children’s-children, etc.

However, the movies Whole Foods intends to screen are hardly based on facts. Food Inc. and Fast Food Nationn are truly propaganda films disguised as documentaries. Soylent Green and Silent Running are just what is stated in the article, “science fiction” and certainly were intended to promote a slanted agenda. It’s great to make people think but I’m hopeful that someone will counter this effort to push a biased agenda with a more balanced, truthful approach. That said, sensationalism seems to sell, as we can all witness nightly with shows  like  Bill Maher or Glen Beck, Keith Olbermann or Hannity. I’d love to see some truthful balance and civility return these important discussions. I fear we’ve become so divided that many are willing to protect their position without any regard for getting to the truth. As for me……as Sgt. Joe Friday from the television show “Dragnet” used to say, “Just give me the facts…….”

These days, “facts” and civil, reasonable discourse don’t sell newspapers, tickets or generate ratings. Which is sad.

Another MNB user wrote:

For Whole Foods to promote a one-sided controversial film like Food Inc. is disingenuous and irresponsible.   While I will always contend that improvements can ALWAYS be made in EVERY facet of the food industry, to hold up as an unbiased, balanced, and responsible source of information is ludicrous.

Responding to a story last week about the scarcity of “local” seafood in places such as Florida, and concerns about w global shortage of seafood because of over-fished oceans, one MNB user offered:

Since I moved to Britain over two years ago, eating fish has become a larger part of my diet, and I rarely eat it less than twice per week. I think living on an island, as opposed to the American mid-west, makes fish just naturally a much larger part of everyone's diet. But the over-fishing is a concern over here, too. I mean, restaurants boast how they use haddock or cod for their fish and chips, and if that isn't what's used, well, people turn away. But that's why there are some sustainability issues with haddock, cod and many other fish. And the increase in prices at the supermarket goes to show how scarce these fish are becoming.  But that's where finding alternative fish is the solution. Other fish populations are thriving, possibly even growing, with the reduction of the other fish populations. It then becomes the restaurants', supermarkets' and media's responsibility to educate people on alternatives. So there's some fish you haven't heard of before. Is it a white fish or an oily fish? Is it flaky like lemon sole or meaty like monk fish? How do you prepare it? Shoppers need to know these things. Over-hunting an animal to the point of extinction is not new. Britain lost all its bears, beavers and wolves due to over-hunting. Just because the seas seem so endless doesn't mean there isn't a finite amount of certain fish in there, too.

MNB user Jim DeLuca wrote:

When I was living in Massachusetts, I clearly remember the Georges Bank overfishing debacle that decimated the Cod fish population due to the same reasoning that we can't let the fishermen's livelihood be diminished.  Well, bye-bye cod and haddock and more; very limited  fishing income for anyone without risking life and limb by going far out to sea for days at a time.

The NY Times magazine ran a big article comparing the fishing issues in Massachusetts with those in Sydney Australia.  The fishermen there lived in nice houses on the bay and only had to day fish so could return to their homes at night.  They earned a very good living.  Their boats were really nice.

The difference was that in Sydney, fishermen were licensed and the number of licenses was limited; kind of like NYC cabs. So, not so many fishermen could make a living in Sydney, but all that could purchase a license, also got a decent lifestyle. And the fish stock stayed healthy.

Fear of job loss is not a good way to plan for the future.  Democracy includes the responsibility to protect the seas for future generations.

Commenting on Walmart’s ability to absorb and learn from its competitors, last week I said I was reminded of what Shylock says in “The Merchant of Venice” at the end of his “I am a Jew speech”:

“The villainy you teach me I will execute, and it shall go hard, but I will better the instruction.”

Which led one MNB user to write:

Every now and then I go through a patch when you’re not the first thing I read in the morning… And then you remind me why you nearly always are.  Great comment and the Shylock quote is brilliant on a couple of levels.  But most of all just love that you quoted Shakespeare.

Shakespeare is like The Godfather - a source of great wisdom applicable to almost all situations.

There’s nothing like a great Shakespeare production. There’s also nothing like a horrible Shakespeare production - I once saw an execrable version of “Richard III” starring William Hurt, and a laughable production of “Macbeth” starring Charlton Heston and Vanessa Redgrave. (Though I always figured the backstage political discussions between Heston and Redgrave must have been entertaining.) But I also saw Meryl Streep and Raul Julia do “The Taming of the Shrew” in Central Park,” and Ian McKellen in “Acting Shakespeare,” and they were two of the most memorable theatrical events of my life.

It also is great to know that Shakespeare lives not just on the British stage and in the rarefied air of certain highfalutin theatrical companies, but also in middle America. For example, an old friend of mine, Tania Myren, runs the Susquehanna Shakespeare Festival in central Pennsylvania...and there are companies like this all over the country and, I suspect, all over the world.

This speaks well of our culture, I think. Such companies deserve our support. Maybe we would all do better if we paid attention to what Portia tells us in “The Merchant of Venice”

The quality of mercy is not strain'd,
It droppeth as the gentle rain from heaven
Upon the place beneath. It is twice blest:
It blesseth him that gives and him that takes.

KC's View: