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    Published on: October 7, 2010

    Now available on iTunes…

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    Hi, I’m Kevin Coupe and this is MNB Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

    I’ll make this short this morning because, as you probably can tell from my voice, I’ve got a pretty bad cold and listening to me talk may be almost as painful as actually doing the talking.

    We’ve had a lot of discussion over the past several months here on MNB about outmoded business models, and one of the institutions that occasionally pops up as being possibly outmoded is the public library. The question I’ve asked is whether in a world where every person has access to enormous resources online, are public libraries really necessary? Are they redundant? Do they have to change in certain fundamental ways to adjust to the changing needs of the communities they serve?

    All good questions, I think. Of course, in many communities and to a lot of people, public libraries are a sacred cow. But to steal the title of a book we’ve talked about from time to time here on MNB, the first thing you do is kill the sacred cows...

    And so it was with great interest that I read a story in the New York Times the other day about how “a private company in Maryland has taken over public libraries in ailing cities in California, Oregon, Tennessee and Texas, growing into the country’s fifth-largest library system.” Now, the company has been hired to run the library in Santa Clarita, California, described as a “relatively healthy city,” and the move is raising all sorts of questions about the role of outsourcing and whether it should only be used as a last resort. To say the least, some citizens are upset by the city’s decision.

    I actually give the city fathers some credit here. Smart organizations anticipate problems and act before they get serious. They’re operating in a state with severe budget problems, and it probably isn’t hard to imagine that while Santa Clarita may be a relatively healthy city, that may not always be the case. So if the city can outsource certain departments and functions, either saving tax dollars and perhaps even creating a cushion for the tough times, that seems like a pretty business-like way to serve the people of the community.

    Are there risks? Of course. Some are worried that when a library is outsourced to a private company, it will mean less accessibility, fewer books and, eventually, greater cost. As someone to whom books are a precious commodity, I certainly can sympathize with this concern.

    But the Santa Clarita library is remaining as a public library - it is just that the operating of it - including the staffing - is being contracted out. It isn’t hard to imagine that this actually could make the library more efficient and market-responsive...because that’s what private companies do.

    Are libraries, as some say in the Times story, the cornerstone of democracy, and therefore should be shielded from such moves? Well, that’s a decision the communities have to make for themselves.

    Don’t get me wrong. I’m not anti-libraries. I’m not suggesting that all governments should be run like businesses. Really, I’m not.

    But the world has changed. The way we access information has changed. And I think at every level we have to be willing to look even at the items that we have viewed as cornerstones to see if they are holding up a structure that has outlived its usefulness, or at least needs to be repositioned for a relevant future.

    That seems to be what they are doing in Santa Clarita. And it is what we all should be doing, virtually every day, in our own businesses.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:

    Published on: October 7, 2010

    If an old lefty like Seeger can do it, anyone can.

    With that line on Monday, Kevin described Pete Seeger’s support for people learning to listen to even those they disagree with. It’s a position that we’ve long advocated here as healthy for our political discourse and incredible vital for business success. But let me counter Kevin’s comment with one of my own:

    Sometimes old righties can say the same and do it with a dose of humor.

    If you missed it, this past Sunday’s episode of “Family Guy” featured Rush Limbaugh willingly taking jabs, counter-punching and, most hilariously of all, partaking in a big Broadway style song called “Republicantown.” He also packed a message about listening.

    Early in the episode, Limbaugh is confronted at a book signing by Brian, the intellectual talking dog and outspoken liberal member of the cast. Limbaugh asks Brian what he really knows about him. Brian admits he’s never read anything Limbaugh has written, but has read what others have written about what Limbaugh wrote. Limbaugh challenges him to even read four pages of a recent book (with an incentive that he hides bologna in the pages; Brian is a dog after all).

    Now, “Family Guy” is usually loaded with bathroom jokes, widespread insults and overall insanity (it’s my guilty pleasure), but that one line packed a message. We’re all entitled to opinions, but let’s make sure we actually consider those opinions and don’t base them on what others say or the sometime incredibly misleading stuff we see on television, the internet or group e-mails. I know this is shocking, but sometimes that stuff is wrong. Let’s listen and educate ourselves to form our own opinions.

    And even those of you who can’t stand him, give Limbaugh credit for being willing to laugh at himself, for handling jokes on his dittoheads and even on his man-boobs. (As I said, this is low-brow humor.)

    That’s my Thursday Eye-Opener.

    - Michael Sansolo
    KC's View:

    Published on: October 7, 2010

    • Walmart announced that it has teamed up with Worldwise, an environmentally oriented CPG company, “to bring the latest generation of environmentally responsible products to consumers nationwide. Under this partnership, Walmart will provide Worldwise with recyclable waste materials that will be turned into a variety of pet products for sale at Walmart starting in October 2010.”

    The companies said that bottles are being recycled into dog beds, hangers are being turned into cat litter pans, scoops, and scratchers, bags are being converted into cat littler liners, and corrugated cardboard is being processed into cat scratchers.

    • The Baltimore Sun reports that when Walmart was engaged in discussions with a Baltimore City Councilwoman about higher wages for employees at one of its area stores, one of the things it requested was that she not support a “living wage” bill proposed by another official.

    According to the story, the bill “would have required city retailers that gross more than $10 million annually, or are part of a chain that does, to pay workers the city's living wage.” Councilwoman Belinda Conaway says that “Walmart representatives pledged to pay workers more than the minimum wage if she withdrew her support from Clarke's bill,” the Sun writes. Conaway says she stopped talking to Walmart after the company made the request.

    Walmart is not commenting on the report.
    KC's View:
    It is almost as if Walmart is bipolar. On the one hand, it gets nice press with an environmental program. And then, its motives are questioned with a labor-related story.

    They must be pretty much inured to this stuff in Bentonville by now. As they say in The Godfather Part II, this is the life they have chosen...

    Published on: October 7, 2010

    Crain’s New York Business reports that King Kullen plans to shutter “its third store on Staten Island in less than two years.” Last year, the story notes, “two King Kullens were shuttered on Staten Island, one just 12 months after it had been converted from a Pathmark store.” As of next year, the retailer will have just three stores left on Staten Island.

    According to the story, “Supermarket consultant Burt Flickinger says that the store closings have more to do with the weak economy on Staten Island than the financial health of the grocer. ‘Its sales and market share have never been better,’ Mr. Flickinger said. He also noted that the company has largely exited New York City in order to focus more on Nassau and Suffolk counties.”

    King Kullen VP Thomas Cullen said that the store’s lease expired and that the company could not reach an agreement with the landlord.
    KC's View:
    I might get out of town, too, if I thought that companies like Walmart and Target were developing a small-store strategy targeting places like NYC.

    Published on: October 7, 2010

    In yesterday’s “Kate’s BlogBeat,” because of an editing error, the Price Chopper employee who caused a bit of a social media controversy by overreacting to a criticism of the company on Twitter was described as the "customer service rep at the center of the storm.” In fact, the employee was a relatively new hire who was not in customer service, nor was she part of the company’s social media team.

    The postscript...

    One of the reasons that the issue became public was that Syracuse University professor Anthony J. Rotolo learned of it and wrote about it on his blog, and it was then picked up by the media (including MNB). This week, MNB has learned, the notion of “continuing education” got new meaning, as Price Chopper’s president/COO, Jerry Golub, and the director of consumer insights, Heidi Reale, visited Rotolo’s class for a discussion of the events.
    KC's View:
    Just the fact that many of us misunderstood the initial events underlines the importance of separating noise from news. I know I should have done a better job on this one.

    I will say this. Despite the (sometimes misreported) noise, my feeling from the beginning has been that this was an isolated incident that in no way reflects on Price Chopper as a whole.  It's just that isolated incidents can get a little bit more traction these days because of social media...

    Published on: October 7, 2010

    As the coverage of the egg-related salmonella contamination story winds down, the New York Times has a story this morning that may have startled people reading their newspapers as they ate their scrambled eggs or omelets for breakfast:

    “In Henhouse No. 1 at the Hi-Grade Egg Farm here, the droppings from 381,000 chickens are carried off along a zig-zagging system of stacked conveyor belts with powerful fans blowing across them.

    “The excrement takes three days to travel more than a mile back and forth, and when it is finally deposited on a gray, 20-foot high mountain of manure, it has been thoroughly dried out, making it of little interest to the flies and rodents that can spread diseases like salmonella poisoning.

    “Standing by the manure pile on a recent afternoon, Robert L. Krouse, the president of Midwest Poultry Services, the company that owns the Hi-Grade farm, took a deep breath. The droppings, he declared, smelled sweet, like chocolate.”

    The story goes on:

    “Controlling manure and keeping henhouses clean is essential to combating the toxic strain of salmonella that sickened thousands of people this year and prompted the recall of more than half a billion eggs produced by two companies in Iowa.

    “Chocolaty smells or not, the Hi-Grade facility appeared very different from the descriptions released by federal investigators of the Iowa farms that produced the recalled eggs. Those farms, most of them owned by Austin J. DeCoster, one of the country’s largest egg producers, were portrayed as filthy and badly maintained, with manure piles teeming with maggots and overflowing from pits beneath henhouses.

    “Those are not the images the egg industry wants consumers to have. Nor are they necessarily representative of most egg farms, federal regulators and industry officials agree.”
    KC's View:
    This actually is the kind of story that needs to be told more often as the food industry marginalizes anyone who threatens to undermine the image of an industry first and foremost concerned with food safety.

    Published on: October 7, 2010

    Forbes is out with its annual list of the World’s Most Powerful Women, concluding that two CPG company CEOs - Irene Rosenfeld of Kraft Foods and Indra Nooyi of PepsiCo - are in the top 10.

    The ranking “reflects the New Order of now, the story says. “When we set out to identify this year's list, we decided it was time to look up and out into the broader culture. Our assessment is based less on traditional titles and roles and more on creative influence and entrepreneurship. These power women have built distinctive companies and brands and championed weighty causes, sometimes through unconventional means; in other cases they have broken through gender barriers.”

    The top 10:

    • Michelle Obama, First Lady of the United States
    • Irene Rosenfeld, CEO, Kraft Foods
    • Oprah Winfrey, media mogul and talk show host
    • Angela Merkel, Chancellor of Germany
    • Hillary Clinton, US Secretary of State
    • Indra Nooyi, CEO, PepsiCo
    • Lady Gaga, singer/performance artist
    • Gail Kelly, CEO, Westpac
    • Beyonce Knowles, singer
    • Ellen DeGeneres, talk show host
    KC's View:
    I’m sure that in putting together this list, the folks at Forbes were focused on generating debate and discussion. That’s the only reason, in my view, that Lady Gaga ends up at number seven...and Sarah Palin is number 16. (On the other hand, maybe that’s a US-centric view...)

    Published on: October 7, 2010

    Wakefern Food Corp./ShopRite is this year’s winner of the Garden State Green Award in the Corporate Citizen category, which is given annually to organizations that have a significant positive impact on the environment through their daily business practices.

    According to the announcement, “Wakefern/ShopRite is working on everything from reducing the amount of shopping bags in store to making more reusable bags available. The corporation has historically been active with recycling and taking materials out of the waste stream.  In fact, in the last two years more than 70 million bags were reused by ShopRite customers and diverted from our landfills and in 2009 ShopRite recycled nearly 1110, 0000 tons of cardboard, plastic film, bags, newspaper, office paper and metal ... Additionally, a number of stores are moving toward energy efficient lighting as this saves significant amounts of energy. Wakefern is also keeping an eye on sustainable seafood, educating store associates, and providing information for customers to educate them about sustainability initiatives.”
    KC's View:

    Published on: October 7, 2010

    The Los Angeles Times reports this morning on the Federal Trade Commission (FTC) continuing investigation into the health claims being made by Pom Wonderful, the pomegranate juice company, and its owner, Lynda Resnick, who has an almost evangelical belief in her product.

    “It's not surprising that the people at her company are outraged that the Federal Trade Commission and Food and Drug Administration have accused them of hyping the health benefits of Pom juice as though they're just a gang of cheap hucksters,” the Times writes. “Pom contends that the agencies are adulterating its right of free speech. The company says the regulators should focus on firms that make unhealthy products or drugs, not those that market pure produce bursting with healthfulness, like Pom.”

    The Times goes through the claims made by Pom, ands concludes that there is little, if any, objective evidence that it does what the company claims; there are some cases where the evidence cited is based on studies paid for by Pom.

    The Times goes on, “The problem identified by the government regulators is that Pom makes its boasts in the name of marketing, but dresses them up as scientifically valid. Long experience should tell the average consumer that marketing and science seldom make for a good marriage.

    “Science is about trying to establish truth. Marketing is about convincing consumers that smoking the right cigarettes will get you girls even if you look like a camel, or that - as Resnick showed by marketing Fiji Water - they're being ‘green’ by drinking water shipped from a dictatorship 5,000 miles across the sea.”
    KC's View:
    The problem is that as the FTC tries to reign Pom in, the company seems to be getting more aggressive with its claims and advertising. Not a good idea ... because there’s going to be a lot more coverage prompted by the fight. And I’m guessing that the loser, in the long run, will be Pom’s credibility.

    Published on: October 7, 2010

    The Queens Gazette reports that “the National Labor Relations Board last week approved a request by a group of FreshDirect employees to hold a union election at FreshDirect’s Long Island City warehouse.”

    An election is expected to held later this month. As the Gazette writes, “Company officials last August balked at a request by 23 FreshDirect maintenance workers who called for unionization of the plant. Officials said the workers’ attempt to join Teamsters Local 805 was ‘inappropriate’ because the group did not include all FreshDirect warehouse production employees.”
    KC's View:

    Published on: October 7, 2010

    Brand Keys is out with a report projecting that Halloween spending this year is likely to be up 15 percent over last year, in part because it falls on a Sunday, leaving the entire weekend for parties and celebrations.

    It is predicted that the average household will spend $70 on Halloween this year, with about 30 percent of it on candy. This year the top-10 most coveted candies are:

    • Hershey Chocolate Kisses
    • Snickers
    • Nerds/3 Musketeers
    • M&Ms
    • Gummies
    • Nestlé Crunch/MARS bar
    • Candy Corn/Twix
    • Reese's Pieces
    • Tootsie Roll/Pops
    • Hot Tamales/Kit Kats

    That means the other half will be spent on costumes...and Brand Keys has a list of the top-10 favored costumes for 2010. Among young adults, 18 to 24 years of age, the top-10 favored costumes are:

    • Jersey Shore cast member
    • Lady Gaga
    • Avatar character
    • Snooki
    • President Obama
    • Iron Man
    • Buzz Lightyear/Woody
    • Pirate
    • Alice In Wonderland/Mad Hatter
    • Batman

    According to the study, “Children are sticking with the traditional tried and true. Girls are planning on being witches, princesses, ballerinas, angels, and pop stars, while boys plan to be pirates, cowboys, skeletons, superheroes, policemen and firemen.”
    KC's View:
    And the really interesting thing is that all those little girls walking around dressed as witches will be saying, “Trick or treat...and no, I’m not a senator.”

    Published on: October 7, 2010

    Mobile Commerce Daily reports that “grocery store chain Shop ‘n Save is ramping up its mobile initiatives to help its customers find what they are looking for and access coupons and promotions via their handsets.” According to the story, “Shop ‘n Save customers can locate products in stores, down to the specific section of the aisle, find product reviews, manage shopping lists, share experiences with friends via social media integration, then get reward points and mobile coupons for using the service.”
    KC's View:

    Published on: October 7, 2010

    • Costco CFO Richard Galanti said yesterday that it plans to open 29 new stores next year, up from the 13 opened during the previous year.


    BrandWeek reports that “Clorox is feeling charitable. The packaged goods company's Green Works brand has kicked off a social media campaign to help raise money for U.S. schools in exchange for ‘green footprints’ ... The grand prize is a $5,000 grant, awarded to the school that earns the most ‘green’ points. Funds go towards the creation of eco-friendly initiatives at the school, such as a new playground, Clorox said.”

    The campaign aims to get parents to walk their children to school each day, counting steps as a way of maintaining good health, as well as sharing health tips via Facebook.
    KC's View:

    Published on: October 7, 2010

    • Advantage Sales & Marketing announced the appointment of Tanya Domier, a 20-year company veteran, as president and chief operating officer, reporting to Chairman/CEO Sonny King.
    KC's View:

    Published on: October 7, 2010

    ...will return.
    KC's View:

    Published on: October 7, 2010

    The Major League Divisional Playoffs got started yesterday, and did so with a bang, as Roy Halladay of the Philadelphia Phillies pitched a no-hitter against the Cincinnati Reds, winning 4-0 in the first no-hit playoff game since Don Larsen’s perfect game in the 1956 World Series. It gives the estimable Phillies a 1-0 lead in the best-of-five National League Divisional series.

    Over in the American League, the Texas Rangers defeated the Tampa Bay Rays 5-1, and the New York Yankees defeated the Minnesota Twins 6-4, giving the Rangers and Yankees each a 1-0 series lead.
    KC's View: