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    Published on: June 4, 2010

    The Consumer Goods Forum (CGF) Global Summit - the first under the new organization that was created by the merger of CIES, the Global CEO Forum and the Global Commerce Initiative (GCI) - is scheduled to take place in London on June 23-25...and MNB will be there, as we have been since Content Guy Kevin Coupe covered his first CIES Summit in Stockholm a decade ago.

    In anticipation of the London CGF Summit, MNB engaged in an e-interview with Jean-Marc Saubade, CGF’s managing director, in which he discussed the ways in which CGF is evolving and how that will be reflected in the Summit.

    What makes the Consumer Goods Forum different from the organisations that it replaces?    And what will make this year’s Summit different from past Summits?  And future Summits?

    Jean-Marc Saubade: The Consumer Goods Forum was founded on the basis of parity. The board is made up of an equal number of retailers and manufacturers. The reason for this is very simple: we want to work together on a number of shared issues and common goals and develop solutions for the whole industry. To do this, both parties need an equal voice. Both former organisations were exclusive operations, driven by one set of stakeholders or another. The Consumer Goods Forum is all-inclusive and outward-looking. I think we will see this inclusivity beginning to be reflected in The Global Summit, but the important point about The Forum is that it is a work in progress. This will be our first Summit since the creation of The Forum. We have had a year to work on our vision for the future. This Summit will be a time to agree this, to set out our agenda and our plan of action. Future Summits will be different again, as we will be reporting back on our progress. I also think the sense of inclusivity will develop as time goes on.

    In what way do you believe that sustainability is evolving as a consumer value?  Is it different in different parts of the world?  And how should retailers and manufacturers be responding to this shift?

    Saubade: I would say that, from the consumer point of view, sustainability has evolved already to the point where it is what I call an entry-level requirement. If you want to play in consumer goods, in any market, your products and business practices have to be sustainable and ethical. If they are not, consumers will find you out. If you are lucky they will simply pass you over until you get it right. If you are unlucky they will destroy your reputation within a few seconds online and you may never recover. Further, the window for competitive advantage on sustainability is very small and is closing fast. Today this is a shared responsibility and must be tackled on a shared platform. Manufacturers and retailers have understood the first point a long time ago: I can’t think of any company today that doesn’t have clear goals and targets on sustainability or indeed that hasn’t already made great strides. The creation of The Forum, with a mandate for collaborative action on sustainability as a prime objective, shows they have also understood the second part. What comes next is down to participation.

    You have a session on efficient Consumer Response (ECR) on the agendas for the Summit, which I would think would surprise a lot of Americans for whom ECR would seem like a dated initiative.  What makes it relevant for 2010...and how has the concept evolved since the halcyon days when it was a state-of-the-art concept?

    Saubade: Well, first of all, ECR is still a thriving concept in Europe and Asia, although I agree that the US has favoured other approaches. ECR’s inclusion in The Summit is a good illustration of your earlier point about what is different about The Forum. There is considerable scope for schemes and associations with common goals to align more closely and work together in appropriate areas. The Forum is not a lobby, but we will look to work closely and align ourselves with the FMI and GMA in the States, with AIM and EuroCommerce in Europe, since these associations do work on industry advocacy. We will look to work more closely with JCA in Japan, with CCFA in China and with ECR Latin America, so that we are covering all the regions and learning about those markets. If we want to get something done as an industry then all the cogs in the wheel need to be moving together.

    I’m curious about the session featuring London School pupils - what is the mindset behind this session?  What are you hoping to achieve?  Do you believe that the food industry needs to do a better job of getting in touch with the tastes and priorities of young people who will soon be core customers?

    Saubade: Absolutely, yes. The session is about the trends that are reshaping consumer behaviour and business growth. There is no point asking executives in their fifties how kids want to shop, where they go online, what media channels hold their attention and what sorts of products and shopping experiences they are looking for. You go to the source. So, to answer the second part of your question, we are hoping to learn something. I would add, however, that these are not merely the core customers of tomorrow. They are also the core customers of today. Kids may not actually hold the family wallet, but if you think they are not influencing purchasing decisions and brand loyalty from the earliest age then you are missing a trick.

    What do you feel is the most controversial issue facing the food industry today?  And how should retailers and manufacturers respond to it?

    Saubade: I think consumer health and wellness continues to be a very controversial topic, particularly when it comes to obesity. This is partly because the stakeholders are so diverse and partly because their motivations are not always compatible. Central to this controversy, in my view, is the issue of who is responsible. I believe the way for the food industry to respond is to focus on what we can actually do. We can firstly listen to consumers and understand what consumers want and don’t want in their products. Then we can sit down together and work out how to communicate and educate on ingredients, nutrition and diet in a way that consumers can understand, that is science-based and in whose credibility they can trust. If we do this effectively and quickly, we can avoid unnecessary legislation that will only serve to limit consumer choice. The industry has acknowledged the need to collaborate on this via The Forum, by making health & wellness one of our five strategic pillars. But to get moving on this, we need you at the Summit. We need your input and participation. It’s no good if only a few companies or a few countries work on this.

    It seems to me - and a lot of my readers - that more than ever there is at least the appearance of a divergence of interests in the food industry.  Big companies have less in common than ever with small companies, manufacturers have less in common with retailers, and both people and companies operate within silos of self-interest.  How can the CGF help to create a global climate that breaks down some of these barriers, to create commonality when addressing divergent interests and issues?

    Saubade: I don’t believe there is a divergence of interests in the food industry or in the consumer goods industry in general. Everyone competes, yes of course. But the focus for everyone is the same: the consumer. This is the same whether you are a one million-dollar manufacturer or a 300 billion-dollar retailer. You keep your eye on the consumer’s needs and the rest will follow. Healthy, vital competition is essential to consumer choice, if that is what you mean by silos of self-interest.

    But our job at The Forum is to show how certain problems are in fact a joint concern, and how shared problems require shared solutions. By sharing the burden of building those solutions at The Forum, you also share in the benefits. The benefits of collaboration on these non-competitive issues are more time, cash and resources to compete where it really counts for consumers – on innovation, quality, price, service and experience. There’s no point in retailers and manufacturers competing with each other on food safety, for example. Safe food is the minimum price of entry and your licence to continue doing business with consumers.

    To put it another way, if you really want to look at it through the lens of self-interest, if your rival suffers a food safety problem, you have a problem too. Look at what happened with peanuts and spinach. The global spinach market has still not recovered from the E. Coli problem in 2006, which was traced to a single field. Consumers today understand that supply chains are global; a pathogen outbreak in the US will affect consumer confidence in Europe and Asia, no question. That makes competition irrelevant where safe food is concerned. It is much better if we can work together on this. The same is true of sustainability and health & wellness. By the way, both the one million-dollar manufacturer and the 300 billion-dollar retailer are welcome at the Forum and both would have an equal voice. The best way for them to get that voice heard is to join our working groups and take an active role in driving change.

    Look for MNB’s exclusive coverage of the 2010 CGF Summit, beginning June 23...with special “Content Guy On The Road” blogs, sponsored by TCC, the global leader in retail marketing programs.
    KC's View:

    Published on: June 4, 2010

    The New York Times reports this morning that Walmart had six years notice that it was vulnerable to gender discrimination suits, and yet apparently did nothing to deal with the situation ... and now faces the biggest gender discrimination class action suit in the nation’s history.

    Here’s how the Times tells the story:

    “More than six years before the biggest sex discrimination lawsuit in history was filed against Wal-Mart Stores, the company hired a prominent law firm to examine its vulnerability to just such a suit.

    “The law firm, Akin Gump Strauss Hauer & Feld, found widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores and urged the company to take basic steps — like posting every job opening and creating specific goals to promote women and minorities — to avoid liability.

    “The 1995 report said that women employed by Wal-Mart earned less than men in numerous job categories, with men in salaried jobs earning 19 percent more than women. By one measure, the law firm found, men were five and a half times as likely as women to be promoted into salaried, management positions.

    “Without significant changes, the lawyers said in their confidential analysis, Wal-Mart ‘would find it difficult to fashion a persuasive explanation for disproportionate employment patterns’.”

    Walmart has criticized the new release of the 15-year-old report, saying that it is “deeply flawed” and “stale,” and does not represent the reality of how it hires and rewards its employees. The company also has a number of labor experts who are criticizing the law firm’s methodology.

    The plaintiffs’ attorneys, however, say that they were not aware of the report but now plan to subpoena it for use in their lawsuit.
    KC's View:
    I wonder if the “Gump” in the law firm title is any relation to Forrest?

    Even a stale report is likely to create problems for Walmart, which just sounds as if it is on the wrong side of history in this case. I cannot imagine that the company wants this to end up in front of a jury...there has got to be a settlement in here somewhere.

    (In writing that, I feel like the kid who enthusiastically digs his way through a pile of manure, saying that “there’s got to be a pony in here somewhere...”)

    A quick update: An MNB user sent me some links that detailed the accomplishments of Akin Gump Strauss Hauer & Feld...and this is no fly-by-night firm that can be tarred with the brush of having done incomplete or inadequate work by Walmart. In fact, I’d expect that the folks at Akin Gump would be likely to want to testify, if only to protect their own reputations.

    Blaming the messenger may not work in this case.

    Published on: June 4, 2010

    The New York Times reports this morning that the Federal Trade Commission (FTC) has come to an agreement with the Kellogg Co. that will restrict the cereal manufacturer’s ability to make health claims about Rice Krispies.

    The company has been saying that Rice Krispies ““now helps support your child’s immunity” and that the cereal “has been improved to include antioxidants and nutrients that your family needs to help them stay healthy.”

    According to the story, “The agreement expands on a settlement order that Kellogg agreed to last July over similar claims that another cereal, Frosted Mini-Wheats, was ‘clinically shown to improve kids’ attentiveness by nearly 20 percent’.”

    The FTC move comes as there is more and more public reaction to any suggestion that sugared cereals are healthy.
    KC's View:
    I loved the Times lede on this story:

    “Maybe it should have just stuck with Snap, Crackle and Pop.”

    No kidding.

    Published on: June 4, 2010

    The Chicago Sun Times reports that Target is ramping up the health care clinic competition in Chicago - and likely elsewhere - with new clinics inside five of its area stores.

    According to the story, “The news follows earlier announcements by CVS, Walgreen and Wal-Mart of clinic expansions as the retailers seek to take advantage of the 32 million Americans who will eventually obtain health insurance coverage under the Obama administration’s health-care reform initiative.

    “CVS, with 22 clinics in the Chicago area, has announced plans to double the number of its in-store clinics nationwide in five years. Walgreen, with 41 Chicago-area clinics, hasn't specified its growth but confirmed that it is negotiating with hospital and health systems nationwide to create partnerships to expand its Take Care Health Systems clinics ... Wal-Mart has said it, too, is negotiating with hospitals and health  systems to open clinics nationwide.”
    KC's View:

    Published on: June 4, 2010

    • The New York Times this morning reports that Walmart “is dipping its toe into the online-education waters, working with a Web-based university to offer its employees in the United States affordable college degrees.”

    According to the story, American Public University “will offer eligible employees 15 percent price reductions on tuition, and Wal-Mart will invest $50 million over three years in other tuition assistance for the employees who participate ... To be eligible for the program, employees must have been in the job at least one year full time, or three years part time, and must also score ‘on target’ or ‘above target’ on their most recent evaluation.”

    Walmart says that it hopes by encouraging and partially funding education programs, it will end up with a higher-level work force.

    “It’s important because it reflects the kind of company we are,” Eduardo Castro-Wright, Walmart’s US CEO, told employees attending the company’s annual meetings in Arkansas. “A company that says, ‘Anyone who wants to learn, who wants to grow with us, who is willing to work hard to get a college degree, can do that.’ ”
    KC's View:
    I love this idea. An educated workforce is a better, more motivated and more innovative workforce.

    Published on: June 4, 2010

    The Winston-Salem Journal reports that there is a new billboard in Mooresville, North Carolina, that apparently passes the sniff test.

    The billboard, for Delhaize-owned Bloom, “emits the smell of black pepper and charcoal to promote a new line of beef ... A giant fork rises from the ground to the billboard, where it pierces a piece of meat.”
    KC's View:
    Love it. Smell is one of the great under-utilized sense in most of America’s supermarkets.

    Here should be the goal:

    People walk in the store. People get hungry. People try samples. People buy more stuff.

    Repeat. Often.

    Published on: June 4, 2010

    Bloomberg reports that is poised to start selling its Kindle digital reading device this weekend in Target stores all over the country. The company hopes that this platform expansion - previously, sales have been limited to Amazon’s only website - will better position it to compete with Apple’s iPad, not to mention the Barnes & Noble Nook and the Sony e-Reader.

    Apple, while late to the digital book party, is getting people’s attention - the company said that it has already sold more than two million iPads.

    Amazon, however, does have a built-in advantage - it reportedly dominates the digital book industry with a 90 percent market share.
    KC's View:
    Am I being self-indulgent in wanting to have both a Kindle and an iPad?

    Published on: June 4, 2010

    MSNBC reports that efforts to demonize high fructose corn syrup (HFCS) as having an outsized impact on the nation’s obesity epidemic seem to be having at least some impact: “US use of the sweetener found in most soft drinks, cereals and a range of other products dropped 11 percent between 2003 and 2008, the most recent year figures were available.

    “A number of companies also have stopped using corn syrup in some or all products, including Hunt's ketchup, Snapple, Gatorade and Starbucks' baked goods.”
    KC's View:
    Corn producers say it isn’t just health activists who are having an impact...they say that they can detect the presence of the sugar industry in the efforts to marginalize HFCS.

    Published on: June 4, 2010

    • The Albany Times Union reports that Golub Corporation’s Price Chopper Supermarkets has opened a new, six-story, 240,000-square foot office tower headquarters in Schenectady, NY, that is energy efficient; the story says that the company “is seeking gold certification from the U.S. Green Building Council's Leadership in Energy and Environmental Design program.”
    KC's View:

    Published on: June 4, 2010

    The National Retail Federation (NRF) is out with its annual Father’s Day Consumer Intentions and Actions Survey, saying that the average person will spend $94.32 on dad this year, up from $90.89 last year. Total Father’s Day spending is expected to reach $9.8 billion.

    According to the report, “Shiny new toys for dad will be one of the biggest hits this year, along with special outings, gift certificates and clothing. The survey found 39.9 percent of those celebrating dad this year will treat him to a special outing such as dinner or brunch, spending $1.9 billion. With 36.7 percent planning on spending a total of $1.3 billion on clothes, dad can expect a few more work shirts and ties to add to his collection as well. Others will shell out $1.2 billion on electronics, $749 million on greeting cards, $578 million on tools or appliances, $550 million on home improvement or gardening tools and $400 million on automotive accessories. Three out of 10 (31.2%) will give dad a gift card, spending an estimated $1.2 billion on those purchases.”
    KC's View:
    Damn! I’m going to be in Australia on Father’s Day. (Though I probably shouldn’t be complaining about that...)

    Published on: June 4, 2010

    ...will return.
    KC's View:

    Published on: June 4, 2010

    Interesting to see this week news that two familiar companies - Toys R Us and Zipcar - are in various stages of going public.

    Let’s be clear. I’m not a stock analyst. Only a fool would take stock recommendations from me. And I have no dog in this hunt.

    But if were going to invest in one of these two companies, I’d choose Zipcar. Not on the basis of financials (which might prove me to be completely wrong about this), but because one company seems to be part of the past, while the other is focused on a vision of the future...not just its own future, but a broader future connected to how people will live and work in cities, how personal transportation will evolve, and the importance of sustainability in a 21st century world.

    I’d bet on the future. I couldn’t help myself. I might end up being wrong, but I’d feel good about the bet.

    Now here’s an iPhone application I can’t wait to try.

    The New York Times describes the app, Snapfinger, this way: it is “a Web and mobile app for ordering takeout from chain restaurants like California Pizza Kitchen, Outback Steakhouse and Subway. Diners craving a pizza or burger can pull out their phones on their way home from work and arrive at the restaurant to find their meal waiting for them ... Snapfinger presents menus from 28,000 restaurants in 1,600 cities nationwide and in Canada. The service is most popular, the company says, in Orlando, Fla.; Chicago; San Francisco; Portland, Ore.; Houston; and Winnipeg, Manitoba.

    “People can search for restaurants nearby, order and pay from their phones. There are tools for group ordering for an office lunch, ordering favorite items with one click and getting location-based, limited-time coupons.”

    I read each new Robert B. Parker novel - now being published posthumously after his untimely death last January - with a certain degree of sadness, because it means the pretty soon, there will be no more. (It may be a while, however. We all thought that “Split Image,” published last February, would be the last Jesse Stone novel...but on there is something called “Jesse Stone #10” listed as an audio book due in January 2011, so hope endures. Parker always said he was several years ahead on his publication dates, so hopefully we will be reading Parker novels for some time to come.)

    The newest in bookstores is “Blue-Eyed Devil,” a western that is the fourth in a series that started with “Appaloosa,” about gunslingers Virgil Cole and Everett Hitch. “Blue-Eyed Devil” brings them back to the frontier town of Appaloosa, where they previously served as the law; this time, they find that the town is growing fast and is governed with an iron fist by a lawman who has his hands out for protection money and his eyes on high national office. Naturally, their own moral code conflicts with the lawman’s priorities, and that’s where the action begins.

    While I loved the novel, I do have to concede that there are a couple of weaknesses in the book that would have been solved either by slower writing or better proofreading. The biggest problem is that at one point, a character who has been moved out of town for her own safety suddenly returns because her presence is needed for a plot point; a couple of chapters later, she’s gone again, with no explanation. Still, the language is minimalist and evocative, yet another almost musical riff on male bonding and moral behavior from a writer who knows this tune well.

    There is a lovely moment in the book when Cole and Hitch, having been briefly deputized by the sheriff in another town, are riding back to Appaloosa. In one place they represent the law, while in the other they are perceived as being outside the law...and yet they haven’t changed who they are or what they represent. They appreciate the irony, but keep riding...because being who they are is not only the best thing they can do, but the only thing they can do.

    Good news.

    HealthDay News reports on a new study from Spain’s University of Valencia suggesting that moderate drinking may help “protect against the onset of Alzheimer's disease among otherwise healthy people.”

    And Wine Spectator notes that there is a “new French study, scheduled to be published in an upcoming issue of the European Journal of Clinical Nutrition, that finds that people who drink moderate amounts of wine are healthier in several key categories than nondrinkers ... the study authors conclude that moderate drinkers tend to have healthier diets, balance work and leisure more effectively and exercise more. In comparing the groups of drinkers versus nondrinkers, study co-author Dr. Boris Hansel said in a statement, ‘Importantly, the findings showed moderate alcohol consumption is a powerful general indicator of optimal social status, and this could be a key reason for improved health in these subjects’.”

    I’ll drink to that.

    My wines of the week:

    • 2009 Sole Beech Sauvignon Blanc from New Zealand, which was cold and sprightly, great for a hot summer day.

    • 2007 L’Ecole No. 41Columbia Valley Syrah, which was wonderful.

    • 2005 Captain’s Reserve Syrah from Francis Ford Coppola’s Rubicon Estate, which was thick and delicious, and a perfect accompaniment for the filet mignon we served for my son’s 21st birthday.

    Speaking of my son...thanks to all of you for the good wishes you offered to him after I mentioned his meniscus surgery last week. He’s still in a brace, on crutches and can’t bend his leg at the moment...but his mood is pretty good (except when the Mets lose). So we’re making progress.

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Fins Up!
    KC's View: