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: May 5, 2010

    by Kate McMahon

    In a high-stakes battle for the consumer’s sweet tooth, a grass roots uprising has the edge on Big Corn.

    Just another example of the power of social networking.

    As noted in the New York Times and on MNB earlier this week, there is a debate raging about the health impact of high fructose corn syrup (HFCS) vs. sugar as a sweetener in processed foods. I’ve read the scientific studies, expert interviews and competing claims, and have to tell you that both sides present impressive data and conclusions. As a mom, as well as a columnist, this debate doesn’t give me any sure conclusion on which to act.  So if I'm making a decision about what to feed my kids, I'm probably going to go with the loudest voice that seems most in tune with my priorities. Which in this case is sugar rather than the more highly processed HFCS.

    And that is clearly the loudest voice in cyberspace, as the anti-HFCS folks rule the internet, whether it is on Facebook, Twitter or YouTube. And by mobilizing consumer sentiment, they have prompted major food manufacturers to shelve HFCS for plain old sugar.

    The Times article cited ConAgra’s decision to reformulate Hunt’s ketchup, replacing HFCS with sugar, following the lead of such heavy-hitters as Gatorade, Pepsi Throwback, Ocean Spray cranberry juice, several Kraft salad dressings and more.

    ConAgra said the change was based on “consumer preference” and not science, and the Hunt’s bottle appearing in stores this month will be emblazoned with the banner “No high fructose corn syrup.”

    The Goliath in this showdown is the industry group the Corn Refiners Association, which contends that HCFS is a safe natural ingredient processed from corn. The CRA has poured $30 million in the past two years on its “Sweet Surprise” publicity campaign, yet its TV ads have become the subject of pointed, much-viewed spoofs on YouTube.

    The unlikely David is one Ivan Royster, 27, a citizen activist with a day job at the North Carolina State University library. Royster just last year started his Ban HFCS page on Facebook and now has more than 125,000 followers and a growing Twitter audience. He told me yesterday the reaction to the 2,000-word article in the Sunday Times had been “phenomenal” and “sent a very strong message to the food companies that the consumers do not want to partake in the ingestion of their cheap processed syrup. They would rather have a natural product such as sugar.”

    And that sums up the spirited dialogue on the internet, and the important lesson for food producers, retailers and marketers. Consumers are demanding to know precisely what they – and their families – are eating. They are concerned about obesity and diabetes and are eager to share scientific information, opinions and more on Facebook and on blogs. They share links to documentaries such as Food, Inc. and King Corn.

    In this case, they prefer that old devil sugar over its less-costly competitor, HFCS. They are not only calling for a ban of products with HFCS, but are rallying support for Hunt’s ketchup and other products now made with sugar.

    In today’s world, you don’t need pricey market research or a focus group to listen to what the consumer is saying.

    Just an internet connection.

    Comments? Send me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: May 5, 2010

    The Chicago Tribune reports that the improbably - if not impossible - happened in the Windy City this week: Walmart executives met with labor leaders to see if they could resolve their differences over a proposed Walmart store on the city’s South Side.

    The meeting came two days before today’s scheduled City Council meeting at which the store will be considered. Organized labor has been against the store’s construction, and some elements are pushing for a “living wage ordinance” that would require large retailers to pay a minimum of $11.03 an hour; Walmart is against any ordinance that only applies to large retailers.

    According to the story, “Union and company officials focused largely on wages, but could not bridge their gap, said one of several sources who knew of the meeting.”

    The Chicago Sun Times is reporting, however, that union officials are urging the City Council to delay their vote on the new Walmart proposal, believing that sufficient groundwork was laid in the Walmart meeting to merit further discussions and negotiations.
    KC's View:
    If you’re walking down Michigan Avenue these days, you’d better duck...because there clearly are pigs flying over Chicago these days.

    It is unclear to me, however, that the government should be setting different minimum wages for certain kinds of businesses, and it certainly is unlikely that Walmart is going to agree to a “living wage” stipulation that won’t affect some of its competition.

    If the City Council wants to figure out the best approach, maybe it could run a limited referendum. Get the people in a two or three mile radius of the proposed new store to vote on whether they want the Walmart. Let the chips fall where they may.

    Published on: May 5, 2010

    AdWeek has a story about a new Deloitte survey about consumer attitudes toward food quality and safety, reporting:

    “Sixty-five percent of Deloitte's respondents said they're more concerned than they were five years ago about the food they eat. Thirty-four percent rated themselves as highly concerned about the quality and safety of foods they eat at home. Even more, 44 percent, felt that way about foods they eat elsewhere. When asked to identify their primary concerns about foods they buy, 49 percent cited ‘healthiness’ and 36 percent ‘safety.’ Also high on the list were ‘possible use of chemical ingredients that are detrimental to long-term health’ (29 percent) and ‘use of high-fructose corn syrup’n(27 percent).”

    In addition, “53 percent of Deloitte's respondents said they ‘frequently or always read the list of ingredients on an unfamiliar packaged/bottled food item’; 54 percent frequently always check the ‘Nutritional Facts’ box when considering such products. Atop the roster of items they're examining are calories (71 percent), total fat (63 percent), sugars (50 percent) and sodium (45 percent).”

    Despite industry resistance to Country of Origin Labeling (COOL), “ The survey found 51 percent of respondents regarding country-of-origin labeling for fresh meat, fish, fruit and vegetables as ‘extremely’ or ‘very’ important to them, along with another 35 percent saying it's ‘somewhat’ important. Moreover, 45 percent said they'd ‘like to find out country-of-origin on a Web site for all ingredients in a packaged/bottled food product’.”
    KC's View:
    The simple fact is that people are looking for transparency and clarity, and expect it to be provided via the various technological tools that exist today. Combine this with the fact that people’s trust in the food supply gas been eroding, and you’ve got both an enormous challenge and a great opportunity.

    Published on: May 5, 2010

    “Prompted by belt-tightening as consumers respond to the long-tailed economic downturn, store brand offerings posted value or currency share gains in two-thirds of the 21 European and North American countries” included in a new Nielsen study, the company said. In addition, “the U.S. trajectory was more pronounced, with store brands advancing to a 17.3% share of dollars and a 21.9% share of units by March 2010 - up 2.1 and1.9 points respectively from 2007. Branded products, however, still drive the vast majority of dollar (82.7%) and of unit (78.1%) sales ... Store brands demonstrated its power by capturing a 20 unit share or higher in 48 of the 117 categories analyzed by Nielsen. Store brand share fluctuated widely by department from a high of 40% for the dairy department, to a low of less than 1% for alcoholic beverages.”

    However, Nielsen said, “even as store brands secured their spot on consumer shelves, branded offerings demonstrated consistent, gradual improvement over the last half of the year. During this time, store brand average period unit sales grew by 2.5% while brands realized incremental growth of 0.4%. Increases in promotional support behind branded products helped stabilize a declining trend.”

    Another interesting note from the report:

    “In contrast to the manufacturer coupon model, where the heaviest users are the most affluent consumers, store brand heavy users cluster in the middle income range with annual household earnings of $30,000 to $69,999. While it’s logically consistent that bigger households, with more mouths to feed, would be focused on a savings-based shopping strategy, store brands also have a loyal following among two-person households looking for value.

    “Perhaps surprisingly, younger female heads of household have a propensity to shop store brands, which is contrary to the conventional brand management wisdom of targeting young buyers to secure their loyalty early on. At the opposite end of the spectrum, the lightest store brand shoppers are men over the age of 65. Heavy store brand buyers tend to be white vs. ethnic households that live in comfortable country or plain rural living areas with 3+ person families. Brands beware—the demographic segment that experienced the fastest growth in store brand unit sales among the heaviest store brand buyers came from households with incomes of $100,000 or more.”
    KC's View:

    Published on: May 5, 2010

    “Satisfaction with Top 100 e-retailers rebounded from a dive this time last year, to an all-time high score of 78 points out of 100, a five point increase,” according to an annual study by ForeSee Results’ Top 100 Online Retail Satisfaction Index. The study concludes that “consumers are more satisfied with their online experiences than ever before. Nearly every individual retailer registered a score that matched or exceeded previous satisfaction levels.

    In addition, the study says, “for the sixth year in a row, Netflix leads the pack with a score of 87, up two points from last year. Amazon, just a single point behind, also maintains its second-place position for the sixth year running. In 2009, only five websites scored more than 80 (generally considered the threshold for excellence in studies using this methodology), but in 2010, a shocking 28 websites scored 80 or higher. Not a single e retailer studied scored below 70 (usually the cut off for bottom performers), an unprecedented event in the research’s six-year history. Several companies made huge jumps in score, the most improved being MarketAmerica.com (+12 to 75), Etronics.com (+10 to 73) and Ambercrombie.com (+9 to 79).”
    KC's View:

    Published on: May 5, 2010

    • In the UK, a magazine called Discount Vouchers News reports that Walmart-owned Asda Group is being criticized in some quarters for its new Price Guarantee campaign, which promises vouchers plus cash rewards to customers that find comparable products at Asda that are cheaper elsewhere.

    According to the story, at issue is the word “comparable,” which as Asda is defining it actually applies to a small percentage of products carried at a competitor like Tesco.

    Asda is defending the program, saying it has saved shoppers more than the equivalent of $7 million (US) since the campaign began.
    KC's View:

    Published on: May 5, 2010

    The Fresh Market, the 95-store chain based in North Carolina, reportedly has filed for an initial public offering aimed at raising as much as $345 million.

    It was a little less than two years ago that the Berry family, which owns The Fresh Market, decided not to sell the company after considering offers over the past three or four months.

    In the 22 months since it came to that decision, the retailer has continued to grow, opening 18 more stores.
    KC's View:

    Published on: May 5, 2010

    The Washington Post reports that “federal officials said Tuesday that the sole plant that manufactures children's and infants' Tylenol, Motrin and other popular over-the counter pediatric medicines lacked quality controls, used raw materials contaminated with bacteria and failed to investigate consumer complaints that some medicines contained black particles.

    "’The findings are serious,’ said Deborah M. Autor, a senior official at the Food and Drug Administration, which documented 20 problems at the Fort Washington, Pa., plant owned by McNeil Consumer Healthcare, a division of Johnson & Johnson. She said the agency is weighing whether to take action against McNeil, pending the completion of its investigation.”

    The company has voluntarily recalled 43 over-the-counter pediatric medicines in the United States and nine other countries, including Tylenol, Motrin, Zyrtec and Benadryl.
    KC's View:

    Published on: May 5, 2010

    CNet reports that there is now an app for that - and by “that,” we mean the ability for a shopper to use his or her iPhone as a bar code scanner “that allows you to manage shopping and gift lists from your phone ... the idea is you could instantly tap into more info without having to talk to a salesperson.”
    KC's View:
    This just points up something that retailers need to realize - that more and more, shoppers are going to be carrying technological hardware into the store with them in the form of their smart phones, and retailers should be developing software that connect them to shoppers, forging bonds that will persist even after the consumer leaves the store.

    It strikes me as silly to be investing in kiosks and other hardware-driven solutions. These days, we carry our own kiosks with us. Just give us information that is appropriate, relevant and both inspirational and aspirational.

    Published on: May 5, 2010

    The Food Marketing Institute (FMI) named the nine finalists in its 11th annual Store Manager Awards competition, which honors managers based on their ability “to develop programs that created positive growth and customer satisfaction in their stores during the past 12 to 18 months,” as well as for “leading, mentoring and motivating store associates ... demonstrating a balance between people skills and operations skills ... communicating company goals and store milestones to associates” and “improving the financial performance of the store.”

    The finalists are:

    Category A (1-49 stores):
    • Michael MacRae, store manager at Byerly’s in Eagan, MN  
    • Dave McCleery, store director at Russ’s Market in Lincoln, NE
    • Jeremy Ruppel, store director at Niemann Foods, Inc. in Dixon, IL  
    Category B (50-199 stores):
    • Sharon Boyett, store director at Brookshire Grocery Co. in Monroe, LA
    • Phyllis Scott, store manager at Food City in Vansant, VA
    • Ed White, store director at Raley’s in Elk Grove, CA
     Category C (200+ stores):
    • Jamie Franck, store director at Hy-Vee, Inc. in Cedar Rapids, IA
    • Walt Leonard, store manager at a Publix Super Market in Smyrna, GA
    • Molly Stiles, store manager at The Kroger Company in Farragut, TN

    The winners will be announced next week at the annual FMI show in Las Vegas.
    KC's View:

    Published on: May 5, 2010

    Reuters reports that Starbucks is being sued by a customer at one of its Manhattan stores who says that his tea was served “"unreasonably hot, in containers which were not safe,” causing him “"great physical pain and mental anguish.” The sit is similar to one about 16 years ago, when McDonald’s was sued for the same sort of infraction; a jury awarded the customer more than two million dollars in damages, though the two sides later settled.
    KC's View:

    Published on: May 5, 2010

    • Walgreen has named Cheryl Pegus, M.D., M.P.H., to the new position of chief medical officer. Pegus is the former general manager and chief medical officer for SymCare Personalized Health Solutions.
    KC's View:

    Published on: May 5, 2010

    Ernie Harwell, the smooth and familiar voice of the Detroit Tigers for 42 seasons, and who called more than 8,000 games over a 55-year career, died yesterday after a long battle with cancer. He was 92.
    KC's View:
    Harwell retired from broadcasting in 2002, but for many baseball fans remains an indelible and cherished memory because of a voice that became part of the soundtrack of their lives. During his last broadcast, he told his audience, “I might have been a small part of your life, but you've been a large part of mine.”

    And here’s something I didn’t know, that Harwell called the “shot heard round the world” in 1951 when the New York Giants’ Bobby Thompson hit a home run off the Brooklyn Dodgers’ Ralph Branca, sending the Giants to the World Series and ending the Dodgers’ season.

    Published on: May 5, 2010

    On the subject of whether economic realities and the recession will lead to a permanent “new frugality,” one MNB user wrote:

    I’m a little mixed yet on how long-term much of this new found frugality will last. One thing I am interested in  though is the change in available money this recession has produced as a result of at least short-term frugality. Many people I know have been cutting down on the amount of debt they have, mostly on credit cards; I’ve even seen this supported in some news articles. What I’m wondering is how many people will have more money to spend than they did before the recession with basically the same income? I’ll use my girlfriend as an example (please don’t tell her!). She had large balances on several credit cards, but over the last year she has really buckled down (been frugal) and paid them off. So even though her income is the same she now has much more money to spend every month, even after putting some away in a new savings account.

    So will the ‘new frugal’ be the new wave, or will it be ‘lesson learned’ from past mistakes of credit card debt? Retailers surely hope for the second where more people will buy their goods instead of sending money off to credit card companies.





    Regarding the closure of the Hollywood Video chain, one MNB user wrote:

    Your story reminded me of one of Netflix's newest innovations that I don't believe you've written about.  Netflix is now offering discs to be used with Wii consoles.  Netflix users could always log in to their accounts and choose titles to watch instantly online (the selection is limited, but includes many older offerings).  However, now the Wii disc is available and makes it incredibly easy to watch Netflix's instant offerings on TV instead of on the computer.  Most of my favorite TV shows are available in the instant offerings selection, so I've been working my way through seasons of my favorite shows in addition to watching the occasional movie.  I like it enough that I cancelled my cable and now pay less than $15/month for Netflix instead of $80/month for a very basic cable package.  Looks like I'm one consumer who's helping to make traditional cable and movie rental services obsolete.

    The lesson is an important one. There is no such thing as an unassailable advantage.



    We had a story the other day about the so-called “post privacy era,” which allows companies to create virtual portfolios about how specific people shop, behave, travel, etc...

    Which led one MNB user to write:

    Seems to be a two way street. People willingly join  social media like Facebook and Linkedin. They want people to track them and see their every move. Also, when the story about the failed bombing attempt in Times Square broke , they allowed as how there were several hundred private and public surveillance cameras in that area . They were confident that they would catch the bad guys. And, as the Goldman Sachs hearings showed, reasonably smart people still don’t understand that “ private” e-mails are the first thing to be grabbed by the authorities. I guess the message is, if you don’t want to spied on, don’t make it so darn easy to track you.




    Finally, responding to Michael Sansolo’s column yesterday, MNB user Dan Jones wrote:

    Great insight on the complexity of research.  I hope next week you follow up on the “50 Great Things To Do With Your Breasts.”

    And if you don’t get the reference...check out our archives.
    KC's View: