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    Published on: January 26, 2011

    by Kevin Coupe

    PHOENIX -- Hard choices and hard decisions are not just the purview of food retailers and manufacturers looking to make their businesses sustainable and relevant. Challenges of various kinds are being faced by a wide swath of other industries, especially those that cater to a fast-evolving consumer population.

    At yesterday’s Food Marketing Institute (FMI) Midwinter Executive Conference here, I had the privilege of moderating a panel discussion with senior executives from a number of other disciplines - sports, journalism, entertainment and advertising - to examine how they are approaching their specific business challenges.

    Laura Hollingsworth, for example, is the president and publisher of the Des Moines Register and Des Moines Register Media, as well as President of the West Group for Gannett’s U.S. Community Publishing Division. She told the audience that while newspapers are widely believed to be dying, the truth is that only the “paper” part seems to be endangered, and that her company is endeavoring to reinvent itself as a content provider that cuts across all media, able to provide it to consumers via iPads or other new technologies. One interesting comment from Hollingsworth: She said that she does not measure herself or her company’s success by benchmarks within the newspaper industry, but rather believes that Gannett must “distance” itself from the competition by doing things differently.

    The importance of being a content provider also was stressed by Beau Fraser, Managing Director of The Gate Worldwide, a global advertising agency with offices in New York, Europe and Asia, as well as the co-author of “Death to All Sacred Cows.” Fraser said that more than ever, ad agencies - while continuing to be in the primary business of coming up with good ideas for clients - have to be in the content generating business, going deeper and wider than ever, providing information to a demanding and insatiable consumer population in a wide variety of venues. ‘Don Draper would probably not recognize The Gate as an ad agency if he walked in the front door,” he said.

    Gerry Lopez, President/CEO of AMC Entertainment Holdings, the nation’s second largest movie theatre chain, pointed to all the ways in which his company is working to know and serve its customers better - developing a frequent theater-goer program that is modeled on Amazon.com’s for acting on previous behavior and rewarding consistency, developing better foodservice programs and even serving alcohol in certain locations as a way of bringing in new customers, and finding ways to source films not being provided by the major studios - in essence developing a private brand to compete with the national brands.

    And Stu Upson, Executive Director of the US Bowling Congress, which has more than two million members, spoke to the challenges his industry is facing - bowling centers that have invested in restaurants and other entertainment options (such as video games) as a way of attracting new customers, but run the risk of alienating frequent bowlers who don’t like the changes. Upson said that the industry has to be very careful about balancing short-term returns with long-term strategic priorities, which is made more difficult in an environment that offers young people so many entertainment alternatives.

    All of the participants pointed to the importance of providing strong leadership - that while consensus is important, at the end of the day they have to make the tough decisions, sharing the credit if things work and shouldering the blame when things go wrong. And they agreed that it is critical to be able to look at and change their businesses without being jaundiced by the past.

    It certainly is doable. The fifth panelist, Leo Hopf, a teacher, consultant and co-author of “Rethink, Reinvent, Reposition: 12 Strategies to Renew Your Business and Boost Your Bottom Line,” told the story of Boise Cascade, a lumber company that saw its business model as being unsustainable and decided to sell all of its mills and buy Office Max, a retailing enterprise that it believed had a brighter future than its traditional business.

    I can’t speak for the audience ... but I hope they found the panelists to be as interesting as I did.

    (BTW...both “Death to All Sacred Cows” and “Rethink, Reinvent, Reposition: 12 Strategies to Renew Your Business and Boost Your Bottom Line” are available on Amazon.com.)

    In other news from FMI Midwinter...

    • Tim Devanney, president of Highland Park Market, Inc., received the Food Marketing Institute (FMI) Glen P. Woodard, Jr., Public Affairs Award today.  The award recognizes Devanney’s leadership in helping the supermarket industry address important government issues.

    Devanney is the 16th recipient of the Woodard Award, named for Glen Woodard, who led public affairs advocacy in the supermarket industry during the second half of the 20th century, representing Winn-Dixie Stores, Inc., and FMI.

    • Richard G. Wolford, chairman, president and chief executive officer of Del Monte Foods, received the FMI William H. Albers Industry Relations Award today, along with Arthur B. Drogue, retired senior vice president of customer development for the America’s at Unilever.  Both men were recognized for their excellence in trading partner relations and consumer and community service.
    KC's View:

    Published on: January 26, 2011

    by Kate McMahon

    When a news story combines Walmart, the White House and the nation’s obesity epidemic, it’s certain to spark spirited debate on the internet.

    And so a search of Walmart’s new health initiative revealed bloggers lobbing bouquets and brickbats at the nation’s largest retailer for the ambitious plan announced last week in Washington.

    With First Lady Michelle Obama on hand, Walmart unveiled a five-year effort to reformulate thousands of its store brands to make them healthier - and to push its suppliers to follow suit. It also pledged to lower prices on produce, build stores in economically-depressed “food deserts” and develop a logo for healthier items. (As reported by MNB, The Food Marketing Institute and Grocery Manufacturers Association on Monday revealed details of their voluntary front-of-packaging labeling initiative, called “Nutrition Keys.” At least one report, in the New York Times suggested that it fell short of Mrs. Obama’s vision for labeling.)

    While the FMI/GMA announcement prompted chatter online, it was a blip compared to the commentary on Walmart, as is always the case with the marketplace monolith.

    Experts, including Dr. Kelly Brownell, director of Yale University’s Rudd Center for Food Policy and Obesity, supported the move. “Food companies have systematically trained Americans to eat in perverse ways. We now expect extreme levels of sweetness, fattiness and saltiness in our foods,” Brownell wrote. “It’s time to turn this ship around.”

    Bur Brownell warned “if the change stops with Walmart, a major opportunity will be lost.”

    In a competing column on huffingtonpost.com, “Diet for a Hot Planet” author Anna Lappé criticized the mainstream media for falling for an effective publicity ploy by Walmart: “Making a big PR splash about improving the health qualities of its food is a smart tactic to deflect attention from the real impact of Wal-Mart on the quality of life for Americans.”

    And over at the MyFoodMyChoice.org site, the headline read “Walmart caves to government bullies.” On the group’s Facebook page, the posts ripped the First Lady for her acting as the “Food Police” and Walmart for acquiescing to government pressure.

    Elsewhere, the dialogue included the typical criticism of Walmart for “slave wages” and being a “job killer” and the more subject specific comment that “reducing added sugars and transfats on the surface sounds like a good move, but it is still ‘putting lipstick on a pig.’”

    Others sounded what I consider a more reasonable response, such as “I'm not pro-Walmart as a company but people need to take responsibility for what they eat no matter where they shop.”

    And this: “Looking down your noses at the masses who can't afford to shop at Whole Foods or go to 5 different stores to buy organic everything is not helpful or realistic. I don't personally ever shop at Walmart either, but in the wake of our current obesity epidemic, we have to take whatever action we can.”

    As might be expected when the world’s biggest retailer takes a strong position on an important issue, the voices are loud. It will be interesting to see if people continue to be as vocal as Walmart’s implementation takes place.


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

    Published on: January 26, 2011

    by Kevin Coupe

    Sometimes, it’s the stuff you don't think about - the little stuff - that ends up being the most important.

    Fascinating story in the Detroit Free Press about a shortage of what arguably is the most important ingredient in Detroit-style pizza.

    Not the cheese. Not the sauce. Not the thick airy crust.

    Nope. It is the pan in which the pizza is traditionally baked, described as “a certain blue-steel
    industrial utility pan made for decades by a small company in West Virginia.” The pan originally wasn’t even intended to be used for cooking - it was made to hold small parts in factories.

    The problem is that the West Virginia company stopped making the pan about a year ago and moved production to Mexico, where production is stalled. Thousands of orders have backed up, and pizza makers are complaining that they have not been able to find a legitimate replacement that can yield the same kind of crust.

    A solution may be coming. One pizza maker, frustrated by the delay, got the pans analyzed, made a deal with a local manufacturer to produce a replica, and expects to have them rolling off the production line soon.

    It is a great example of how the little stuff - the stuff to which few people pay attention - often can matter in big ways. Good lesson to keep in mind.

    And that’s our Wednesday Eye-Opener.
    KC's View:

    Published on: January 26, 2011

    The Washington Post reports that “in response to a new federal food safety law and growing consumer interest, vast amounts of new data are being generated about the complicated path that food takes from field to supermarket shelf.

    “And, increasingly, some of that information is being offered to curious shoppers, who in some stores can wave a smartphone above an apple or orange and learn instantly where it was grown, who grew it and whether it has been recalled. They can even contact the farmer, if they feel moved.

    “A provision of the federal food safety law passed last year requires that all players in the country's food supply chain be able to quickly trace from whom they received a food product and to whom they sent it. They'll have to maintain that information in digital form, creating deep wells of information that, in some cases, consumers could tap into through their computers or cellphones ... But the new law has triggered a small gold rush for technology companies angling for a piece of an emerging market, which covers food other than meat, poultry and egg products. They are competing to develop the tracking technology and manage the data.”
    KC's View:
    The interesting thing about the story is how much of this technology exists, and just needs to be applied to the important causes of traceability and transparency. I’ve always believed that this is as much a matter as will as capability, and while I do know there are some retailers who think I need to jump off this soapbox - or at least ought to jump up on it a little less often - I’m glad to see that systems are being created that make everyone accountable.

    Published on: January 26, 2011

    Dow Jones reports that Walmart “has started aggressively asking suppliers for opening-price-point goods in recent weeks, taking aim at dollar stores' low prices ... This means the world's largest retailer will be pressing partners such as Procter & Gamble Co. and Kraft Foods Inc. to make smaller, more affordable packages of their products.”

    The San Diego Union-Tribune reports that the San Diego City Council seems likely to repeal the ordinance making it difficult for supercenters to be built by companies such as Walmart. The reason: Walmart collected enough signatures to force a referendum on the issue, but the Council seems more inclined to simply repeal the ordinance rather than spend more than three million dollars that it doesn’t have on a special election.
    KC's View:

    Published on: January 26, 2011

    The Boston Globe reports that “scientists are using the powerful tools of modern biology to decipher the genomic recipes that give rise to the fragrant flesh of a strawberry or the complex bitter flavor of dark chocolate ... The studies are not just academic: As researchers learn how genes are linked to different traits, they hope to breed crops or livestock that are hardier, tastier, or healthier.”

    According to the story, “Genomes are being deciphered by large, international consortiums of scientists funded by private and public sources that can range from the National Science Foundation to big-brand chocolate manufacturers such as Hershey Corp. or Mars Inc.”

    “We can breed potentially for types of plants with higher levels of a certain kind of flavor — fruity notes, raisiny notes, nutty notes . . . it will help us to understand the genetic basis of flavor,’’ Mark Guiltinan, a professor of plant molecular biology at Pennsylvania State University, tells the Globe. “Especially the gourmet, high-end chocolate manufacturers are interested.’’
    KC's View:

    Published on: January 26, 2011

    • The Los Angeles Times reports this morning that “the U.S. Department of Agriculture's Economic Research Service released its 2011 Consumer Price Index analysis for projections on food prices this week, and reported that overall food prices are expected to increase 2% to 3% this year.

    “The projected rise comes after a stretch of relative price stability in recent years. The agency's all-food index showed a modest 0.8% increase from 2009 to 2010, and a rise of just 0.3% in prices for food consumed at home, the lowest food inflation rates seen in the U.S. since 1962 and 1967, respectively.

    “However, food prices are expected to rise even more this year, agency researchers said. The causes include rising commodity prices, shrinking supplies of key ingredients and increasing demand for corn-based ethanol for vehicle fuel.”

    • The Chicago Sun Times reports this morning that Supervalu is closing a Jewel-Osco store on Western Avenue on the city’s South Side, one that has been serving the local community for a quarter-century. However, the story notes, “residents will soon have a smaller, lower-cost and limited-assortment grocery alternative when Save-A-Lot opens five stores Feb. 24 on Chicago’s South Side, including one at 6701 S. Western Ave., a company spokeswomen said.

    • The New York Times this morning reports while the US Food and Drug Administration (FDA) planned “to begin tests this month on the milk from farms that had repeatedly sold cows tainted by drug residue,” in an effort to assure that Americans are not drinking contaminated milk, “the testing plan met with fierce protest from the dairy industry, which said that it could force farmers to needlessly dump millions of gallons of milk while they waited for test results. Industry officials and state regulators said the testing program was poorly conceived and could lead to costly recalls that could be avoided with a better plan for testing.

    “In response, the F.D.A. postponed the testing, and now the two sides are sparring over how much danger the antibiotics pose and the best way to ensure that the drugs do not end up in the milk supply.”

    Reuters reports that the Chinese government has fined both Walmart and Carrefour “for either over-stating their discounts by inflating pre-discounted prices, or for charging prices higher than what was labeled or advertised.

    “Carrefour and Wal-Mart had engaged in such practices in various Chinese cities including Shanghai, Kunming, Shenyang, Harbin and Chongqing, the commission said on its website. Worried about rising price pressures, the Chinese government usually conducts random checks of store prices ahead of holidays, especially when the country is fighting inflation.”

    KC's View:

    Published on: January 26, 2011

    • Molson Coors Brewing named Bill Waters, currently the company’s controller and chief accounting officer, to be its chief corporate strategy officer. The company is said to be seeking a new controller and accounting officer and Waters will take on his new position only after that person is recruited.
    KC's View:

    Published on: January 26, 2011

    Michael Sansolo had a piece yesterday about Disney’s line management issues in its theme parks, which led MNB user Chelle Blaszczyk to write:

    Loved Michael's piece on Disney World as we were just there last week for the first time. Since it was chilly and January, we had 3 days of very little crowds which was wonderful. And= then Saturday was warmer (and being a 3 day weekend), it was busier; so we got to experience both ways. I was totally impressed with the details that Disney put into making sure that the guest has a fabulous time. From the lining up for the tram to the waiting in line for the Winnie the Pooh ride, they have it figured out how to manage crowds. And, then on slow days to make people not feel like they are lost in never ending lines that have no people in them. They shut off parts of the queuing so that you don't see it; wow, not only are they concerned to make sure the crowds are comfortable but also that when there aren’t crowds, guests are handled wonderfully also.

    Yes, every business could learn something from Disney; talk about using every opportunity to make it the happiest place in the world. They know how to do it right!!!


    MNB user John Rand wrote:

    Like many, my family has been to Disney a number of times, every few years almost since the park in Orlando opened.  I remember thinking a few years ago about how clever they were getting in using in-park communications and such to reduce line time. Clearly that continues to evolve.

    But there are also customer strategies – there are whole books devoted to helping park visitors plan their days in the park to avoid traffic – identifying “hot spots” and times when certain areas of the park are more or less patronized.

    And herein is a lesson – because as difficult as it is to manage and smooth out the customer experience in busy times, there are a lot of shoppers who have learned their own strategies to avoid crowds and lines. In retail, that means shopping at odd hours, mid week, evenings, etc.

    And I have seen a lot of retail fall apart when the pressure is off. Service employees who ignore shoppers. So few registers open that they actually create an artificial and unnecessary line. Taking self-check- out stands out of service (why, for gosh sakes?).  Unmanned departments. Out of stocks. (Try buying store made bakery products on a Wednesday evening.)
     
    There are highs and lows in shopping traffic and patterns of behavior one can use to minimize overhead, labor, and to maximize consumer experience.

    But if you drop the experience down far enough, you might as well close the darn doors. You are putting yourself out of business.


    Another MNB user wrote:

    I'm gonna go out on a limb and ask what may be an obvious question... Why hasn't Disney kicked their app development up for smart phones?  Most smart phones have built-in GPS and are carried just about everywhere.  For a small fee Disney could "empower" a smart phone app that assigns priority "seating" on rides that are proximate to the phone.  Folks would then be completely unchained from lines to wander the entire park (and spend) to their heart's content.  They could board rides closest to them based upon a mix of priority and availability.  "We are #3 for the Tea Cup and #18 for Space Mountain; what'll it be kids?"  GPS tracking could easily keep the app synched with direction of travel and location to alert the individual rides and texting to the user could confirm that it's time to "all aboard!"...

    MNB user Philip Herr wrote:

    In my opinion, Disney created the problem when abandoning the market system. Way back, you used to be issued with a set of tickets at entry to the park. Each had a different value from A to E, with the E ticket gaining entry to the premium rides. Kiosks would sell additional tickets. So effectively, the market would determine the length of the line. Pay more for E tickets and get on the best rides. But once the ticket system was abandoned and (dare I say) a “socialistic” approach of equality across all rides was implemented, the lines increased at the most exciting attractions. I know you can “bribe” your way to the front of a line by paying a premium, but this seems far less fair than an open bidding system. I’d suggest Disney return to the system with a loaded value card – assigning a set number of points on arrival which get used up (or recharged) as the day progresses. And perhaps they can experiment with load pricing – changing the number of points needed at different times of the day?




    On the subject of Walmart’s healthy initiative and the front-of-packaging labeling program developed by food retailers and manufacturers, much of it in tune - to varying degrees - with priorities put out there by First Lady Michelle Obama, one MNB user wrote:

    Has anyone questioned Mrs. Obama's self-acclaimed credentials as a nutrition expert?

    I think that this is unfair. She hasn’t presented herself as a nutrition expert - just a concerned mom with access to experts who is using her soapbox for positive purposes.

    In my view, this is a good thing.




    MNB user Tom Cobb had a thought about the lawsuit charging that the beef served at Taco Bell is more filler than meat:

    Maybe their new slogan should be "Think outside the cow.”

    Boom!
    KC's View:

    Published on: January 26, 2011

    The 83rd annual Academy Award nominations were announced yesterday morning, and here are the finalists who will competing for the major Oscars on February 27.

    Best Picture
    Black Swan
    The Fighter
    Inception
    The Kids Are All Right
    The King’s Speech
    127 Hours
    The Social Network
    Toy Story 3
    True Grit
    Winter’s Bone


    Best Actor
    Javier Bardem in Biutiful
    Jeff Bridges in True Grit
    Jesse Eisenberg in The Social Network
    Colin Firth in The King's Speech
    James Franco in 127 Hours

    Best Actress
    Annette Bening in The Kids Are All Right
    Nicole Kidman in Rabbit Hole
    Jennifer Lawrence in Winter's Bone
    Natalie Portman in Black Swan
    Michelle Williams in Blue Valentine

    Best Supporting Actor
    Christian Bale in The Fighter
    John Hawkes in Winter's Bone
    Jeremy Renner in The Town
    Mark Ruffalo in The Kids Are All Right
    Geoffrey Rush in The King's Speech

    Best Supporting Actress
    Amy Adams in The Fighter
    Helena Bonham Carter in The King's Speech
    Melissa Leo in The Fighter
    Hailee Steinfeld in True Grit
    Jacki Weaver in Animal Kingdom

    Best Animated Feature Film
    How to Train Your Dragon
    The Illusionist
    Toy Story 3


    Best Director
    Black Swan- Darren Aronofsky
    The Fighter - David O. Russell
    The King's Speech - Tom Hooper
    The Social Network - David Fincher
    True Grit - Joel Coen and Ethan Coen

    Writing (Adapted Screenplay)
    127 Hours
    The Social Network
    Toy Story 3
    True Grit
    Winter's Bone


    Writing (Original Screenplay)
    Another Year
    The Fighter
    Inception
    The Kids Are All Right
    The King's Speech

    KC's View:
    First of all, my apologies. Yesterday was the first time since I started doing MNB that I didn’t have the Oscar nominations posted on the site as soon as they were made public....but at the time of the announcements, I was getting ready to go onstage at FMI Midwinter. (I know these things don’t matter to most people, but I take pride in the little stuff.)

    As for the nominations themselves, I have to say that it strikes me as a strong field, and I’ve seen eight of the 10 Best Picture nominees - clearly I need to see 127 Hours and Winter’s Bone. For me, it would be hard to choose which of the following three films I’d vote for: True Grit, The King’s Speech, and The Social Network.