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    Published on: June 17, 2010

    ...sponsored by TCC, “changing shopper behavior”

    A beautiful day in the neighborhood...

    It is reminiscent of the European approach to supermarket site selection that the two supermarkets that I visited here on Thursday both were part of a larger shopping complex; they didn’t even look like so-called “anchor tenants,” even though they clearly were the biggest retailers in the mall. Rather, they were just sort nestled among the other shops, even taking a little work to find.

    In the case of the older Coles store at King’s Crossing, it was actually a two story store that seemed to occupy the basement and then the sub-basement of the building on the corner of Darlinghurst and William Streets. A nifty and very modern looking IGA store I saw - located in the AMP Retail Plaza near Circular Quay - was nestled in the corner of the plaza in a very understated way. (This IGA may have been one of the nicest IGA’s I’ve ever seen, right up there with the Kress IGA in downtown Seattle.)

    The thing about these stores is that in some ways they actually compete head-to-head with other food shops located in their malls, and in other ways they create a symbiotic relationship; this is especially true in the case of the IGA, which concedes any level of foodservice offering to shops that surround it. This is an observation, not a criticism one way or the other; it is just a different real estate construct than we’re used to in the US.

    But the competition and proximity don’t seem to matter. Here’s what seems most important about the two stores. One, they seemed expert at cramming as much merchandise into relatively small spaces as possible. (The Coles was a lot bigger than the IGA, with a greater emphasis on price, but the latter certainly offered a full, albeit convenience-sized, shopping experience.) And two, they both seemed busy, reflecting a correct reading of what their local neighborhoods needed and wanted out of a supermarket.

    Can’t do better than that.

    G'Day Mate!

    Beach music...

    One of my goals on Thursday was to get outside the city, so I took the Bondi Explorer bus tour, which took me to the eastern and southeastern beach communities that surround Sydney; there’s the opportunity to get of the bus and explore these small towns, and then catch up with the next bus that comes along.

    It’s a great way to see towns like Bondi Beach, Tamarama, and Bronte Beach, and even get a sense of how people live there. They seem like an odd yet perfect combination of an English seaside village and Manhattan Beach, California - some of the houses are old and charming, some are sort of mid-seventies nondescript, and others are modern and gleaming. It all fits somehow, though there did seem to be a lot of them on the market or up for auction. (One was advertised as being a “beach pad with a long rug.” I have no idea what that means, but it sounds cool.)

    In Bronte Beach, I got a good lesson in how a standard meal can be made transcendent with a little bit of care. I was looking for something to eat, worried that my growling stomach would scare away the wildlife. There was a row of cafes across the street from the beach; some were closed, some were open but looked a little chic for my taste, and then there was The Bogey Hole Cafe - nondescript in grays and blues, and with just a few tables outside and in. And then, there was the kind of sign that always lights up my eyes - “Breakfast served until 3 pm.” (The only better sign is “breakfast served all day.” I view such messages as things of beauty, like an answer to an unstated prayer.)

    So I went in and ordered a long black coffee (which ended up coming in a short white mug), and a bacon and egg roll with the works (cheese, tomato, lettuce and barbecue sauce). Now, this could have been nothing special, but it was precisely the opposite - fresh and delicious and cooked to perfection, on a thick roll, steaming with flavor. It was wonderful.

    Now some of this may have had to do with the fact that I was famished, and with the fact that sea air makes everything taste better, and that I was romanced by being in a tiny village on the other side of the world from home. But it was still a great sandwich, made with care. Nothing lowest-common-denominator about it.

    Quaffers...

    When I returned to the city, I had a hankering for a beer...so I stopped at the Glenmore Hotel (all the hotels here seem to have charming pubs inside) for a Coopers Pale Ale. Delicious. Cold. Fresh. Yummmm...

    Later in the evening, looking for something more refined, I found it in a fabulous wine from the New South Wales winery called Mirrabooka - the 2008 Eloquesta, which is a blend of Shiraz and Petite Verdot. This is an amazingly good wine, not available outside of Australia because it is handmade in small amounts, that manages to be both soft on the palate and delicately balanced between robust and fruity. It was just really, really good.

    So good, in fact, that I drank a toast to all of you.

    And will again tomorrow.

    My Web Grocer

    BTW...I’ll continue to post pictures from my Sydney trip on our MNB Facebook page.

    Thanks to TCC ... which is sponsoring “The Content Guy On The Road.”

    TCC offers customized retail marketing programs that change shopper behavior - attracting new customers and building customer loyalty...generating 4-5 percent sales increases and expanding basket sizes...generating in-store excitement and creating real and tangible differential advantages for your stores.

    For more information, Click here.
    KC's View:

    Published on: June 17, 2010

    Thirteen nutrition experts making up the US Dietary Guidelines Advisory Committee have issued a draft report suggesting changes in the nutrition recommendations made by the government. The main advice, according to the Wall Street Journal: “People should consume more vegetables and whole grains, and less fatty meats, salt and sugar.”

    The report goes on, “Among the recommendations: Americans should consume no more than 1,500 milligrams a day of salt. Current guidelines recommend a maximum of 2,300 mg, equivalent to one teaspoon of salt, for the general population, and 1,500 milligrams for at-risk adults, such as those with high blood pressure. The panel recommended 1,500 mg for everyone.

    The report also said children should be discouraged from drinking sugar-sweetened beverages and get more physical exercise and people generally should limit saturated fats to less than 7% of overall calorie intake.”

    The US Congress mandates that the government’s nutrition recommendations be updated every five years. The committee’s suggestions are designed to be factored into whatever final plan is developed later this year by the US Department of Agriculture (USDA) and the Department of Health and Human Services (HHS).
    KC's View:
    I know that scientists and experts need to use calculations like “1,500 milligrams a day of salt,” but it always seems to me that these kinds of numbers are lost on most Americans, who aren’t doing the math and keeping track from meal to meal and day to day.

    I’m not exactly sure what the solution is, but it seems to me that a more holistic approach needs to be taken, one that stresses moderation and education, that includes the need for exercise as a counter-weight, and that doesn’t demonize the notion of indulgence from time to time. The approach needs to be cultural, not legislative, and it has to start with parents, not elected officials.

    Published on: June 17, 2010

    Fast Company reports on the proposal in California proposal that would have shoppers paying five cents for single-use bags. The receptivity of the state’s population to such a law, Fast Company suggests, may be seen in how Walmart has been doing in its own bag test.

    As the story notes, “This past October, Walmart launched an experiment: three stores in Sacramento and Ukiah stopped selling single-use bags. Instead, the Walmart stores started offering small, lightweight polypropylene bags for 15 cents along with larger bags for 50 cents. The bags aren't all that durable, but Walmart claims that each reusable bag offsets the use of 75 plastic bags--not bad for the price.”

    And, the magazine writes, “Consider this: the average California resident goes through 600 plastic bags each year. That's a whole lot of plastic that could potentially be kept from littering both the streets and the ocean.”
    KC's View:
    Fast Company suggests that the reality is that if California were to adopt a similar approach to single-use bags, there would be extreme reactions from both sides of the issue. For me, it is all about salesmanship.

    I’ve not been in the Walmart stores involved in the test, but I’d guess that they’re selling the idea - not just the bags - pretty hard. In the end, this is a battle of ideas, not just bags. The shame is that it all becomes partisan and political, and we seem to avoid a comprehensive and strategic approach to such issues. It’d be nice if we could just cut down on the trash - through aggressive recycling, through the availability of multi-use bags, and through educations (as opposed to legislation) that sells the notion of why this is important.

    Of course, this assumes that most people would agree that a strategic and intelligent approach to such issues is both important and necessary,. There may be some that don’t. But the vitriol with which some on both sides approach the issue - and each other - makes it difficult to get anything done.

    Published on: June 17, 2010

    Crain’s New York Business reports that more than 16,000 unionized employees at more than 150 supermarkets in the New York City area are threatening a strike as soon as June 26 if a new contract is not reached with Stop & Shop, Pathmark and King Kullen.

    The United Food and Commercial Workers (UFCW) charges that the three chains want to cut health benefits and pensions while freezing ages, and that continuing to insist on “historic concessions” will lead to the first supermarket strike in NYC in more than three decades.

    Crain’s reports that “the three companies are bargaining together on most of the major economic issues, though they will all need to hammer out separate deals. Negotiations started several weeks ago, but union officials say little progress has been made ... Officials from the three supermarket chains did not immediately respond to requests for comment.”
    KC's View:

    Published on: June 17, 2010

    Wegmans announced that its Employee Scholarship Program, now in its 27th year, will award college tuition assistance to 1,506 Wegmans employees totaling $5.5 million for the upcoming 2010/2011 academic year - the largest number of scholarship recipients in one year to date.

    Since the program began in 1984, more than 24,000 Wegmans employees have been awarded scholarships totaling $77 million.

    “Nothing is more gratifying than seeing our employees achieve their dreams and knowing that our scholarship program is one of the reasons,” says Wegmans’ President Colleen Wegman.

    To receive a scholarship, Wegmans employees must meet academic and work-performance criteria. Eligibility is also based on a minimum number of work hours over a specified time period.
     
    Scholarship applications are reviewed by an outside committee of college admissions professionals and a team from Wegmans. The external committee evaluates student grades, extracurricular activities, and SAT scores; the internal Wegmans committee evaluates employee work performance.
    KC's View:
    See stories like this, and it is no mystery why Wegmans is not just an iconic name in food retailing, but an important fixture in the communities it serves. Kudos!

    Published on: June 17, 2010

    The Chicago Tribune reports on a Florida woman who found a glob - described as an “oval, skin-like substance” that ended up being mold naturally formed when air got into a damaged package - inside her daughter’s Capri Sun juice pouch.

    Here’s how the Tribune reports the real problem, which has more to do with communications than the mold:

    “The unpleasant finding by Melissa Wiegand Brown went viral after she posted photographs of the oval, skin-like substance on her Facebook page, representing the power of the Internet in its own unique — and arguably nauseating — way.

    “Reports of the monster mold spread via blogs and began to dominate Kraft's Facebook page, where some posters expressed not just horror at the photos, but also outrage at what they perceived to be the company's slow response to the Memorial Day weekend issue.

    “So Northfield-based Kraft reacted, not with threats, but by creating a special section of its Facebook page devoted to answering Capri Sun-related questions. The company also sent a courier to pick up a sample of the glob. Its own tests determined it was mold, which an independent laboratory confirmed, Kraft spokeswoman Bridget MacConnell said.” The story notes that “Kraft has two employees monitoring the company's Facebook page and participating in discussions.”
    KC's View:
    Of course, the woman with the mold is paying for her own tests because she does not quite trust Kraft.

    The thing is, stuff happens sometimes. Unfortunately, problems that used to be communicated in letters and in phone calls now get registered in a way that millions can see.

    The only thing Kraft can and should do is be honest about what happened, transparent in its communications, and speedy in its responses. Ultimately, that’s the best and only weapon in dealing with these issues.

    Published on: June 17, 2010

    Interesting piece in Time about how the recession seems to have affected people’s beverage consumption habits - while healthy drinks seemed to be making inroads while the economy was more prosperous, “recession has brought that growth to a screeching halt as consumers have returned to their once true — and cheap — love, soda pop. The sweet bubbly beverage had a bigger jump in sales than bottled water, juices, sport drinks and most other segments did over the past 18 months, reports Mintel International Group, a market-research company.” At the same time, milk, yogurt drinks, fruit juices, bottled water and sports drinks all saw sales declines - save for energy drinks, which still saw sales increases though not as much as in the recent past.

    The irony, Time points out, is that at least some of the soft drink companies have invested in the healthier drink business, believing that this might be where the future is.
    KC's View:

    Published on: June 17, 2010

    The New York Times reports about a company called Automated Media Services (AMS) that “has been working for years on a system that would deliver television in retail environments in a way that would allow media agencies to plan and buy commercial time in stores just as they do on the networks, channels and stations watched at home. The system, which the company calls 3GTV, also includes provisions to verify that commercials have actually run ... The presence of the 3GTV screens near or in front of the products advertised in the commercials represents an advantage ... compared with existing systems in stores that use TV screens at or above check-out counters, after purchase decisions have already been made.”

    The initial test of the system is slated to take place at nine Delhaize-owned Bloom stores in Maryland and Virginia. The Times notes that “as the test nears, Bloom will work with Automated Media Services on placing the screens and determining how many are needed in each store to minimize any consumer perception that the system is intrusive or bothersome.”
    KC's View:
    It probably was inevitable that as more of us use DVR technology to avoid commercials, advertisers would find new ways to get them in front of us. If they are good commercials, we probably won’t mind. Much. If they are annoying commercials, we will mind. A lot.

    Published on: June 17, 2010

    The Boston Globe reports that Coca-Cola CFO Gary Fayard told an analysts meeting this week that while the soft drink industry needs to fight the imposition of soda taxes by the government because it will hurt profits, people will continue to buy soda even if the prices go up because of taxation.

    "We're an easy target as an industry, and this is one where we're all going to have to pull together and work diligently because it's a threat," Fayard said at a conference held by trade publication Beverage Digest.

    Fayard also noted that the soft drink industry “has been cutting calories to help fight obesity,” and that “45 percent of the Coca-Cola brand's business is now from diet drinks, which would not be subject to soda taxes.”
    KC's View:

    Published on: June 17, 2010

    The Wall Street Journal reports that Blockbuster Inc. is looking for short-term financing that will allow it to stay in business in the event that it has to file for bankruptcy protection - something it will only have to do, CEO Jim Keyes says, if it is not able to restructure its $900 million in debt outside of court.

    According to the story, “Mr. Keyes emphasized that ‘speed is of the essence’ in any restructuring the company pursues. According to a person familiar with the matter, Blockbuster would likely try to file a ‘prepackaged’ or ‘prearranged’ bankruptcy if it has to restructure in court. In such bankruptcies, a company lines up approval for a bankruptcy plan from many creditors in advance of a filing, with a goal of limiting its stay in court.”
    KC's View:
    Once again, an object lesson in what happens if you allow yourself to become irrelevant.

    Blockbuster was a retail mainstay. But technology changed, consumers changed, and suddenly there was Netflix and Redbox and iTunes and all sorts of other competitors that were more in line with shopper needs and wants than Blockbuster...and suddenly it has $900 million in debt and, I would think, a dubious future as an independent entity.

    Bankruptcy and new financing may protect Blockbuster from its creditors and an immediate demise. But that may not be enough.

    Published on: June 17, 2010

    • According to The Nielsen Company’s Retail 2015 Forecast, revealed at its Consumer 360 Conference in Las Vegas, “the pace of change is only accelerating as technology, marketing trends and retail formats converge to redefine how CPG retailers and manufacturers interact with consumers.”

    By 2015, Nielsen predicts, “mass supercenters and e-commerce to be the big winners by dollar share gains, growing by a combined five share points between 2009 and 2015. Warehouse club, dollar store and pet stores will also grow share positions. Nielsen forecasts that supermarkets will continue to lose share, but at a declining rate. While both high-end and low-end niche grocers will grow share, overall share positions will remain fairly low given lower per-store sales compared to larger formats. Other key CPG channels, including drug stores, mass merchandisers and convenience stores, will grow dollar sales but will suffer share losses.”

    “While e-commerce sales felt the recessionary pain in 2008 and 2009, Q4 2009 sales were solid and interest from both CPG manufacturers and retailers to provide online buying options has never been stronger,” said Todd Hale, senior vice president, Consumer & Shopper Insights, The Nielsen Company. “With tech-savvy Generation X and Millennials growing in importance in both numbers and spending power, the time is ripe for the next step in the evolution of online searching and buying.”

    Nielsen also notes that “driving the rapid adoption of smart phones is the seemingly endless variety of apps, which take full advantage of the smart phone’s geographic location and interactive capabilities. Retailers are already using smart phones as a replacement for frequent shopper cards, sending store coupons and deals directly to a shopper’s phone. Nielsen expects CPG companies to further leverage the smart phone’s location tracking abilities to target communications and promotions to shoppers both in and out of stores, and up sell consumers on other items based on prior purchases. In addition, consumers will have the ability to locate the best available price for a given item, access real-time product reviews and promotions and manage everything from household budgets and pantry inventory to tax preparation and filing.”

    • Want to have successful new product innovations at your CPG company? Keep senior management out of the way.

    That’s the result of a new study by The Nielsen Company that looked at “the innovation processes at 30 large CPG companies operating in the U.S.,” according to a Nielsen report. The study “reveals that companies with less senior management involvement in the new product development process generate 80 percent more new product revenue than those with heavy senior management involvement. Companies that employ this and other best innovation practices derive on average 650 percent more revenue from new products compared to companies that do not.”

    According to the report, “Nielsen’s research shows that simply being physically near corporate headquarters can stifle new idea generation. In fact, it turns out that having no Blue Sky innovation team at all is better than having a team on-site at corporate headquarters. The best place for your breakthrough innovators? Far, far away. According to Nielsen, companies with an off-site Blue Sky innovation team report 5.7 percent of revenues coming from new products, compared to 4.8 percent from companies with no Blue Sky team at all. Companies with Blue Sky teams on site report just 2.7 percent of revenues coming from new products.”

    Management does have a role, Nielsen says: “Senior management needs to play a different, more important role in new product development. Nielsen’s research shows that another important key to success is for senior management to precisely manage the new product development process, not the ideas themselves. According to Nielsen, CPG companies with rigid stage gates - - decision points in the process where a new product idea must pass certain criteria to proceed forward - - average 130 percent more new product revenue than companies with loose processes.”
    KC's View:
    These are two intriguing studies that speak volumes about the ways in which the CPG world is changing. Proximity, it seems to me, is the common thread between them. In the case of the technology study, it suggests that CPG companies are going to use the means at their disposal to get ever closer to the customer; in the case of the innovation study, it suggests that senior execs should not be too close to the product development process.

    It is all a balancing act. The good ones are going to pull off both tricks, and it will give them a strong differential advantage in the marketplace.

    Published on: June 17, 2010

    • The Seattle Times reports that Trader Joe’s plans to open its first store in West Seattle in 2011. The company already has 16 stores in Washington State; this new one will be down the street from a planned development where Whole Foods was seen as a probable tenant.

    • The Los Angeles Times reports that the National Milk Producers Federation board of directors has voted to support “a plan called Foundation for the Future, which could change the direction of federal price support programs,” proposing a transition from federal financial safety nets “into a new Dairy Producer Margin Protection Program, which would guard against a collapse in producer prices. It would also establish a Dairy Market Stabilization Program to prevent imbalances in milk production and demand.”

    According to the Times, “The federation's proposal to overhaul the federal safety net involves creating a sort of insurance program against fluctuating prices. If farmers chose to enroll in the program, they would receive indemnity payments during periods when their margins are ‘compressed,’ as they were in 2009. In addition, farmers would have the option of buying supplemental coverage to protect a higher margin level between feed costs and milk prices.”

    CNN reports that “five months after Johnson & Johnson drugmaking division McNeil Consumer Healthcare recalled millions of Tylenol and Motrin products, store shelves across the nation are still bare of these medications.” Among the retailers reporting shortages are CVS, Walgreen, Target, and even Walmart, though the latter says that there has been a “tightening of supply” that isn’t as bad as it was.
    KC's View:

    Published on: June 17, 2010

    ...is off this week. But will return.
    KC's View:

    Published on: June 17, 2010

    A lot of you may have been the recipients of an email from MNB earlier this week in which Michael Sansolo and I offered a special deal on our book, “The Big Picture: Essential Business lessons from the Movies.”

    What you may have noticed is that there was an expiration date on the special offer: May 31, 2010.

    In publishing and marketing circles, this is what is technically known as a “goof.” (Which would make the guys who actually sent the email “goofs.” Mea culpa, mea culpa, mea maxima culpa....)

    The good news is that the expiration date was supposed to be July 31, 2010. And is again.

    So if you’re interested in our book, click here. (If you’re not, sorry to have wasted your time.)

    BTW ... we think you will be amused by one small anecdote about this screw up.

    Both Michael and I read the copy. Our publishers read the copy. And nobody noticed the incorrect date.

    The email went out, and within an hour, both Mrs. Content Guy and Michael’s wife sent us emails pointing out the error.

    Which only means that we should have let them proofread the copy before we sent anything out.
    KC's View:

    Published on: June 17, 2010

    ...will return.
    KC's View: