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    Published on: November 30, 2010

    by Michael Sansolo

    More than ever, the average is dwindling in size and importance as the population becomes more polarized. We can see it in so many places beyond politics. It’s in the spread in household incomes, the wildly different choices made in television viewing among different demographic groups and the markedly different uses of technology. And now we find it in what we eat for dinner.

    Newsweek’s current issue examines: “The Dinner Divide: How our Foodie Obsession is Driving Americans Apart.” That might be a little overstated, but not by much. The cover story looks into the eating habits of some families in Brooklyn, NY, and the range is startling. Through the article we visit with fully committed locavores who spend countless hours each day finding local foods - usually organic - to feed their families. And we visit families struggling to make ends meet or even find time to get some quick nutrition into the mouths of a busy family.

    Their habits couldn’t be more different or more important. It’s almost shocking that these families live in such close proximity to each other, but that’s probably a usual occurrence and not just in densely populated areas like Brooklyn.

    I honestly believe the food industry understands this issue. More than ever retailers target key segments of consumers, understanding the value equation they bring to the aisles differs starkly by neighborhood, family or even mood. Manufacturers are aware also, which explains why so many have expanded their portfolios to include products that range from traditional to new food movements.

    But the truth is also that we can’t ever know this well enough because this new reality of polarized behaviors impacts everything.

    Far too often we see studies or articles documenting consumer behavior or activity and we have to understand the context that surrounds it. It was startling in just the last few days to see news stories about increased holiday spending on Black Friday juxtaposed with reports on the growing number of homeowners who simply stop paying their mortgages. Both are true at the same time.

    The truth is there are shoppers moving ever more upscale or more deeply into food buying habits that require more time, more care, more knowledge and many times more money. And the truth is that there are shoppers moving ever more strongly in the direction of penny pinching, looking for ways to get calories into their family’s bellies as inexpensively as possible.

    I got a personal reminder of this last week when a quote of mine appeared in Everyday with Rachael Ray. Asked to comment on supermarket trends for 2011, my responses were all about price, price and price. So after talking about price for most of my interview I suggested that flavorful ethnic foods that are lower in calories will be a growing trend. I added that supermarkets will continue to look for new products and services to enhance the shopping experience for busy moms. Everyday (which is a terrific magazine, in my opinion) isn’t about price, it’s about making interesting meals. So I wasn’t surprised that the comments about ethnic foods and new services made the article, while the price part didn’t. And in the context of Everyday, that was the right decision.

    There is no typical trend, just as there is no typical shopper, store or product. It’s a caution we need to remind ourselves as we read anything these days, whether it’s a new consumer study or an article in Everyday with Rachael Ray. The average doesn’t matter, the context does. The families Newsweek profiled in Brooklyn would all provide a starkly different view of the world of food right now and all would be true. You need context to understand what is true for you.

    These days you have to ask your questions carefully and consider the answers—and the averages—even more carefully.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: November 30, 2010

    The New York Times writes that “Google, which only 12 years ago was a scrappy start-up in a garage, now finds itself viewed in Silicon Valley as the big, lumbering incumbent. Inside the company some of its best engineers are chafing under the growing bureaucracy and are leaving to start or work at smaller, nimbler companies.”

    The Times goes on: “Corporate sclerosis is a problem for all companies as they grow. But a hardening of the bureaucracy and a slower pace of work is even more perceptible in Silicon Valley, where companies grow at Internet speed and pride themselves on constant innovation — and where the most talented people are often those with the most entrepreneurial drive.

    “Much of Silicon Valley’s innovation comes about as engineers leave companies to start their own. For Google, which in five years has grown to 23,000 employees from 5,000 and to $23.7 billion in revenue from $3.2 billion, the risk is that it will miss the best people and the next great idea.”

    The Times notes that “Google, which has always been generous with salary, stock options and benefits like massages, dry cleaning and free food, is going a step further to keep employees happy. This month, Google gave every employee a raise of 10 percent or more.” But that may not be enough for many people, who are looking for something other than money from their careers.

    MNB fave Glen Terbeek, upon reading this story, offered the eye-opening take:

    Thought there is a good lesson in this for retailers.

    I have always believed that retailers often grow to a point of irrelevance, too far away from the action, and rely on rules and processes to manage and thus dumb down the business.

    Why does a retailer grow bigger than self managed modules of, say, 15 stores? Big enough to have marketing merchandising skills. But small enough where its management is relevant to the shoppers and staff.


    All good - and eye-opening - questions.

    - Kevin Coupe
    KC's View:

    Published on: November 30, 2010

    The Seattle Times reports that Kraft is responding to charges by Starbucks that it mismanaged the coffee company’s packaged goods business “by starting arbitration proceedings and issuing press releases about its position, which is that the contract between the companies lasts ‘indefinitely’.”

    Starbucks is looking to end the companies’ relationship and take greater control of its packaged goods business.

    Kraft continues to maintain that Starbucks will have to pay it fair value for the business it has built, which some analysts peg as being as high as $1 billion.
    KC's View:
    A little marriage counseling seems to be in order here...though it also seems like a costly divorce likely is in the offing.

    Published on: November 30, 2010

    Bloomberg reports that President Barack Obama yesterday welcomed two major American business leaders to the Oval Office - Walmart CEO Mike Duke, and recently retired Procter & Gamble CEO AJ Lafley.

    The meeting was engineered by the administration, lasted about 40 minutes, and, according to White House press secretary Robert Gibbs, “ is one of a series of sessions aimed at soliciting the views of some of the nation’s largest employers on efforts to spur the recovery of the U.S. economy.”

    As Bloomberg reports, “Obama is stepping up his engagement with the business community following this month’s midterm elections in which his party lost control of the U.S. House and saw its majority narrowed in the Senate. Some executives and business groups, including the U.S. Chamber of Commerce, have criticized Obama on issues including taxes and regulations.

    “Obama blamed the election results on voters frustrated with the weak economy. The nation’s unemployment rate has remained at 9.5 percent or higher for more than a year.”
    KC's View:
    If there is one thing that the Obama administration needs right now, it is great engagement with the business community. It’d be nice to see the White House draft people like Lafley and former Walmart CEO Lee Scott, bringing them into the fold and getting their constant input and management skills.

    Published on: November 30, 2010

    The Anniston Star reports that “Winn-Dixie employees were scrambling Friday to get to the bottom of a malfunction that overcharged an unknown number of pre-Thanksgiving shoppers at the grocery chain’s 485 stores. Officials at Winn-Dixie, one of the nation’s largest grocery store chains, say they believe the malfunction was corrected by Friday.

    “Credit- and debit-card machines at Winn-Dixie stores charged some shoppers twice for groceries bought Wednesday, one of the nation’s biggest grocery shopping days. No discernible pattern has emerged as to which shoppers were double-charged. The number of customers overcharged and how much money was involved won’t be known until next week, sources within the company said.”

    Winn-Dixie has promised to refund any erroneous charges.
    KC's View:

    Published on: November 30, 2010

    The Wall Street Journal reports on two new studies that “add to a burgeoning body of evidence that developing heart-healthy habits as a youngster or adolescent may have lasting benefits in adulthood.

    “One of the reports, based on a pooling of data from four major studies that tracked people from early childhood into their 30s and 40s, suggests that the presence of such risk factors as high blood pressure and abnormal cholesterol by about age 9 strongly predicts a thickening of the walls in the carotid or neck arteries in early adulthood. Experts consider this condition, called carotid intima media thickness, a precursor to heart attacks and strokes.

    “The second study found that children who consumed fruits and vegetables once a day had healthier arteries as young adults than those who reported eating fruits and vegetables less than twice a month. Low consumption was associated with stiffening arteries, a warning sign of future heart problems.”

    The story goes on: “Interest in children's heart health is driven largely by the epidemic of obesity, which has more than tripled in prevalence among children over the past three decades, according to the U.S. Centers for Disease Control and Prevention. Nearly one in five children between 2 and 19 years old is considered obese; nearly one-third are overweight or obese. Obesity is associated with unhealthy cholesterol and blood pressure and also heightens a person's risk of heart attack.

    “Such statistics have many heart experts worried that more than four decades of declining death rates due to cardiovascular disease, the Western world's leading killer, may unravel if the problem goes unaddressed.”
    KC's View:

    Published on: November 30, 2010

    The Boston Globe reports on a new study released by the Institute of Medicine “recommends tripling the amount of vitamin D most Americans should take and small increases in calcium levels for children to build and maintain strong bones.”

    According to the story, “For vitamin D, the panel tripled the daily recommended allowance from 200 international units to 600 units for people aged 1 to 50. It also recommended that amount for people up to age 70. Previously, the amount for that group had been 400 units. Over age 70, it recommended 800 units. The guideline changes for calcium were less dramatic: The panel suggested 700 milligrams daily for children 1 to 3 years old, up from 500 now; and 1,000 mg. for 4- to 8-year-olds, up from 800. For most adults, the daily intake remains at 1,000 mg. It kept the recommended 1,200 mg. for women over 50, but reduced the amount for men that age to 1,000.”

    Some experts said the recommendations were flawed. One example: “Dr. Walter Willett, chair of the nutrition department at Harvard’s School of Public Health, said the panel’s recommendations for vitamin D were too low and its recommendations for calcium too high.

    “He said the panel’s conclusion that the ‘majority of Americans’ are receiving adequate amounts of vitamin D is “flawed.’’ He said strong evidence indicates that most adults need nearly twice the amount of vitamin D that the panel recommended — at least 1,000 units a day, not 600. He said there is strong evidence that higher levels of vitamin D not only reduce the risk of fractures in older adults, they also reduce the risk for colon cancer.”
    KC's View:

    Published on: November 30, 2010

    The Los Angeles Times reports that Fiji Water is shutting down its Fiji Island operations, complaining about a tax increase and growing political instability that creates an uncertain business environment.

    The story notes that “the Fijian government was installed in a military coup in 2006. It has been widely criticized for not holding elections.” The government is saying that Fiji Water pays less than $600,000 a year in taxes, and that the company should be shouldering more of the country’s tax burden.

    Executives are not saying where Fiji Water will come from in the future.

    Fiji Water is owned by Lynda and Stewart Resnick, who also are under attack for their Pom Wonderful product, which the Federal Trade Commission (FTC) says is making unsubstantiated health claims.
    KC's View:
    Not sure what the law says about this, but basic truth in advertising principles suggest that they’ve got to change the name if they’re not getting the water from Fiji.

    Published on: November 30, 2010

    Crain’s Detroit Business reports that “the flurry of lawsuits over former Farmer Jack stores continues with a commercial real estate broker now suing the closed stores' parent company.

    “On the heels of landlords claiming they have not been paid rent since June, a lawsuit has been filed by Farmington Hills-based Howard Schwartz Commercial Real Estate LLC, claiming The Great Atlantic and Pacific Tea Co. Inc. has not paid the commissions or expenses the firm is owed.”

    This is the 26th lawsuit filed against A&P in the Detroit area. Crain’s notes that “in 2007, A&P decided to leave the region, vacating 66 stores. Twenty were either bought or leased by Kroger Co., and several others have been leased or subleased.”
    KC's View:

    Published on: November 30, 2010

    • Irwin Kershner, director of The Empire Strikes Back as well as the rogue James Bond movie Never Say Never Again, has passed away of cancer at age 87.

    Kershner, who was a mentor to filmmaker George Lucas, took the job of directing the first sequel to his protege’s hit film Star Wars after he was guaranteed creative independence. And it is was in that sequel - which many people believe to be the best of the Star Wars series, that audiences were introduced to Yoda and found out about the unique connection between Luke Skywalker and Darth Vader. And, it was in that film that Kershner and actor Harrison Ford veered away from Lucas’s script, allowing Ford’s Han Solo to respond to Princess Leia’s “I love you” with one of the best lines in the series: “I know.”
    KC's View:

    Published on: November 30, 2010

    Responding to my criticism of Blockbuster, one MNB user sent me the following email, which is already my favorite of the week (even though it is only Tuesday):

    Kevin, I am going to make a wild guess that most of your bricks and mortar retail experiences are not favorable for you, as neither are any of your experiences one-on-one with the masses...to put it gently...you probably come across in person as a bigger ass than you do sitting behind your computer screen blogging away.

    Enjoy reading your blog anyway as you do your job well.


    So I think what this means is that this fellow thinks that I’m good at being an ass, which is good since it is my job.

    I can live with that.

    I won’t defend myself against the “you’re an ass” accusation since I’m probably not the most objective person to speak on the subject. (I like to think I’m not all that bad, but then again, it wasn’t that long ago that I’d actually convinced myself that I was 5’10”, until Mrs. Content Guy put her foot down and said I was fooling myself. So who knows?)

    However, I will defend myself against the charge that I hate going to bricks-and-mortar stores. I can name any number of stores that I like going into: The Apple Store, Sur La Table, Nordstrom, and Costco are just some of them. As for supermarkets, there are plenty that I enjoy visiting and shopping: Stew Leonard’s, Fairway, Dorothy Lane Market, Publix, HEB, Central Market, Lunds/Byerly’s, PCC Natural Markets, Haggen, and Metropolitan Markets are just some of them. And hopefully when I walk into any of those stores, I’m not behaving like an ass.

    MNB user Greg Kozminske had another thought about the Blockbuster discussion:

    First time, long time…  I am a longtime NetFlix hold out, no real reason other than the feeling that I get walking into a brick and mortar… but to the point,  I was recently in a Blockbuster Video and was pleasantly surprised at what I found; as I walked into the store I was greeted the instant I stepped in by two friendly employees, then as I walked the outer walls of the store looking at the “New Releases”  I was approached again by an associate asking if I was able to find everything I was looking for, he went as far as asking me if I had questions on the particular movies in the section I was looking at and offered reviews on movies if I was to have a difficult choice selecting one.

    As a customer service vet. It was nice to see that someone still cares, I go day in, and day out, getting rude responses, short tempers and ever famous “it’s not my job”.  Blockbuster is making improvements (at least in West Michigan) but I stay weary as it may be too little too late.

    Thank you for wonderful, thought provoking articles and opinions each day, don’t stop!


    I think it’s great if Blockbuster is making a change in its culture.




    On a different issue, MNB user Ken Wagar wrote about the MNB coverage of the story in the New York Times about Rhonda Kallman, founder of the New Century Brewing Co. and one of the co-founders of the company that makes Samuel Adams, who developed a caffeinated beer called Moonshot ’69, which has been positioned as an upscale, gourmet beer sold in small batches.

    But now, Kallman’s company is one of those being targeted by the US Food and Drug Administration (FDA), which is calling on companies making caffeine-and-alcohol drinks - such as Four Loko and Joose - to reformulate them or face regulation.

    I found it interesting that after taking such a vocal and visible position against Four Loco and similar beverages that you had no editorial comment on Moonshot 69. It’s being targeted obviously smacks of unintended consequences but is it really or should parents also be concerned about a caffeine infused 5% alcohol beer?  I am a beer drinker and enjoy craft beers and I tend to be anti over regulation, however if Four Loco is bad and should be banned I have a hard time accepting that Moonshot 69 should be an exception. This is what makes regulation so damned difficult, things don’t often fit in the neat little boxes we would like them to be in. I was disappointed that after your position on Four Loco you shared no thoughts regarding Moonshot.

    Fair enough.

    The reason I didn’t comment yesterday, to be honest, is that I wasn’t sure what I thought. I needed a little more time to think about it.

    Having had some time, and being pushed against the wall, I now would suggest that while it seems clear that Moonshot is a different animal, its makeup probably means that it will be a victim of this regulation. That may be unfortunate, but addressing the Four Loko problem seems a bigger priority.




    Regarding the Starbucks-Kraft contretemps, one MNB user wrote:

    My first thought (as a former  long time veteran of the sales agency aka food broker world) is that Kraft is now feeling what every broker or sales force feels – no matter what the reason, nothing is good enough and the supplier blames the sales force first.

    My second thought is laughter at Kraft expecting a premium for getting fired.  I imagine everyone wishes that.

    My third thought is that almost certainly this is a result of the total lack of effort that filters down to actual retail these days – trade dollars are spent but no one makes sure the mission gets accomplished.


    Another MNB user wrote:

    The report on Starbucks shows they haven’t lost their arrogance.  Isn’t it interesting that Starbucks moved their earnings call up ahead of Kraft’s quarterly earnings call - then announced they were terminating the agreement without warning?   Kraft, in fact, should be complimented on taking the PR high road in what they have said publicly about this “situation”.
    KC's View:

    Published on: November 30, 2010

    In Monday Night Football action, the San Francisco 49ers defeated the Arizona Cardinals 27-6.
    KC's View: