business news in context, analysis with attitude

Published on: March 9, 2011

by Kate McMahon

The government’s first consumer product safety complaint website, set to officially launch this Friday online, is already under siege.

And we’re only halfway through National Consumer Protection Week.

The public database, SaferProducts.gov, will allow consumers to share complaints about unsafe products ranging from toasters to toys to disposable diapers. The Consumer Product Safety Commission (CPSC) will review each complaint before posting, notify the manufacturer and give it the opportunity to respond publicly on the site.

Consumer advocates have long supported the “sunshine” provision in the mandate, signed into law by President Bush, while groups such as the National Association of Manufacturers and the Toy Industry Association have argued it allows for abuse and unsubstantiated claims.

The CPSC has received about 900 complaints since its “soft launch” of the site in February, and only four were determined to be inaccurate, according to the Washington Post. The commission will start publicly publishing the comments when SaferProducts.gov goes live on Friday.

However, there’s already a roadblock. At the urging of freshman Rep. Mike Pompeo (R-Kansas), the House of Representatives last month passed an amendment to the 2011 budget bill which blocks the CPSC from spending any money to operate the database. The battle now moves to the Senate. (A group of Senate Democrats has promised to fight the Pompeo amendment. As of yesterday afternoon, the CPSC vowed to launch the site “on time, on budget” this Friday, the final day of National Consumer Protection Week.)

Unfortunately, instead of focusing on the balance of consumer safety and manufacturer responsibility, the online debate has deteriorated into typical partisan sniping and criticism of “the Nanny government.”

It’s important to note that the consumer complaints to SaferProducts.gov are limited to product defects that could cause injury or death. The database is restricted to the 15,000 types of consumer goods overseen by the CPSC, which do not include food, drugs, medical devices, cosmetics, tobacco, automobiles or tires.

If I’m a manufacturer, and my product could pose risk of harm or injury to anyone’s safety, I would certainly want to be immediately alerted of a potential problem, investigate and respond.

And for manufacturers, marketers and retailers, there’s another reality to consider. And that is the speed and strength of the internet, where one irate blog posting (particularly from a Mommy Blogger) can set off a firestorm of criticism, leaving even nimble companies scrambling to respond in the chaos of social media, where there are few rules and fewer filters.

Pompeo wants to delay the database launch to make changes, claiming it could hurt American business by raising costs and subjecting manufacturers to frivolous complaints. He called it a defense attorney’s “bar dream.”

I’m sorry, Congressman, but I don’t think there’s anything frivolous about safety concerns such as lead paint in children’s toys. If a product is sound, a public database does not pose a threat. Consider the brouhaha last year when thousands of parents stormed the blogosphere charging that the new Pampers Dry Max caused rash diaper rash and chemical burns on infants. The database would have revealed the results of the CPSC’s four-month “exhaustive investigation” which found the Procter & Gamble diaper did not pose any safety threat -- and, oh yes, diaper rash happens.

And attempts to defang the law would certainly be rejected by Nikki Johns, whose 9-month-old son Liam died after he was caught in a faulty drop-side crib nearly six years ago at their home in Citrus Heights, Calif.

“If I had know there had been children killed in drop-sides, it would have swayed me against them,” she said.

The SaferProducts.gov site is a forum for shared information – not an imposition by the “Nanny state.” It may cause a logistical headache for some manufacturers, but could also save lives and prevent injury. And recalls and lawsuits. Better than a fair trade, I’d say.


Comments? Send me an email at kate@mnb.grocerywebsite.com .

Published on: March 9, 2011

by Kevin Coupe

The folks at COLLOQUY, who take the world of loyalty marketing very seriously, are out with a study that qualifies and quantifies something that many marketers probably have a sense is true - that angry customers are far more likely to talk about their bad product and shopping experiences than they are to share stories about satisfying experiences.

According to the study, “Of 3,295 U.S. consumers surveyed by COLLOQUY, slightly more than one out of every four (26%) said they are far more likely to spread the word to family, friends and coworkers about a bad experience with a product or service than a good one ... In a survey finding of equal significance, even among consumers who are most loyal to, engaged with and willing to recommend brands they like - a group COLLOQUY calls WOM Champions - 31% said they are far more likely to share information about a bad experience with a product or service than a good one.

“Among key demographic groups, Affluent consumers, at 30%, scored highest for saying they're far more likely to spread a bad experience. Seniors scored the lowest at 19%. In the other demographics, 25% of Young Adults and 25% of Women said they're far more likely to share a bad experience. Hispanics' score was 21%.”

COLLOQUY has come up with a term for these consumers who are dissatisfied and more than willing to share it - “Madvocates.” And, the simple reality is that in today’s information-driven and technology-savvy consumer environment, “madvocates” have both a larger megaphone and an increasing willingness to use it.

To their credit, COLLOQUY’s analysts also have come up with suggestions for how to convert “madvocates” to “advocates.”

Among them:

“Make sure customers not only have an opportunity for a dialogue (not a monologue) with the brand, but with each other ... Get the conversations started by asking for opinions and insights, and recognize contributions.”

“Involve customers in WOM programs by forming online social sharing communities, panels and co-development platforms. Do your own social media.”

“Be innovative and make sure content is relevant, fresh and rewarding. Start by transforming your marketing mindset from ‘incentive’ to ‘service.’ Be sure to nip any service problems in the bud and head off any negative WOM that can quickly go viral from these well-connected customers.”

All excellent observations, and very good advice ... not to mention an Eye-Opener for marketers not paying attention to the “madvocate” revolution.

Published on: March 9, 2011

The Bergen Record reports that the judge overseeing the bankruptcy of the troubled Great Atlantic & Pacific Tea Co. (A&P) has denied the part of a proposed “retention plan” that would have paid $1.3 million to three top executives.

At the same time, the Record writes, “U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., on Tuesday gave the company permission to pay bonuses to more than 140 ‘second-tier’ managers, saying those bonuses had triggers that were not a ‘walk in the park.’ He said the company needs to develop a business plan, negotiate more terms for its reorganization and show more business metrics before granting $440,000 per person to three top executives, however.”

The proposed retention bonuses to the top three executives raised hackles among creditors and union members who objected to so much money going to so few individuals.

Published on: March 9, 2011

Fascinating piece on Forbes.com about how US Census results suggest that reports on how America’s big cities are growing are a kind of urban myth, and that “growth in America’s large core cities has slowed, and in some cases even reversed. This has happened both in great urban centers such as Chicago and in the long-distressed inner cities of St. Louis, Baltimore, Wilmington, Del., and Birmingham, Ala.

“This would surely come as a surprise to many reporters infatuated with growth in downtown districts, notably in Chicago, Los Angeles, Denver and elsewhere.”

Forbes continues: “The urban option will continue to appeal to small but growing segment of the population, and certain highly paid professionals, notably in finance, will continue to cluster there.

“But the bigger story — all but ignored by the mainstream media — is the continued evolution of urban regions toward a more dispersed, multi-centered form. Brookings’ Robert Lang has gone even further, using the term “edgeless cities” to describe what he calls an increasingly ‘elusive metropolis’ with highly dispersed employment.

“Rather than a cause for alarm, this form of  development  simply reflects  the protean vitality of American urban forms.”

“So what does this tell us about the future of the American urban region?” Forbes asks. “Certainly the expansion of relatively low-density peripheral areas negates the notion of a  ‘triumphant’ urban core. Dispersion is continuing virtually everywhere, and with it, a movement of the economic center of gravity away from the city centers in most regions.

“But in another way these patterns augur a bright future for an expansive American metropolis that, while not hostile to the urban center, recognizes that most businesses and families continue to prefer lower-density, decentralized settings.  The sooner urbanists and planners can accommodate themselves to this fact, the sooner we can work on making these new dynamic patterns of residence and employment more sustainable and livable for the people and companies who will continue to gravitate there.”

The whole story - which gets very specific about certain metropolitan areas - can be read by clicking here.

Published on: March 9, 2011

CNN reports that “two recent price comparisons of grocery and household goods revealed that Target's prices are lower than at No. 1 retailer Wal-Mart.”

According to the story, Customer Growth Partners “compared 35 brand-name items sold at Wal-Mart and Target stores in New York, Indiana and North Carolina. They consisted of 22 common grocery goods such as milk, cereal and rice; 10 general merchandise products such as clothing and home furnishings; and three health and beauty items.

“Target's shopping cart rang in at $269.13 (pre-tax), a hair lower than the $271.07 charged at Wal-Mart.” The story says that people using Target’s Redcard program would have seen even greater savings.

At the same time, a Kantar survey of “just one Wal-Mart and one Target store in Massachusetts... found Target's prices in January were about 2.8% lower than Wal-Mart's.

“Among the goods that Kantar compared, cheaper health and beauty items, and particularly smoking cessation gum, helped Target beat Wal-Mart. But in groceries and household goods such as light bulbs, trash bags and detergent, Kantar found Wal-Mart still boasted better prices than its rival.”

Published on: March 9, 2011

The Vancouver Sun reports that the former head of the Canadian Food Inspection Agency (CFIA) says that food labels with “B.S.” claims are “rampant” in Canada - but that regulators ought not crack down on them.

Ronald Doering, who now serves the agency in an advisory capacity, says that there are not so much lies as much as implied misdirection “such as the ‘shameless proliferation of implied claims’ about the power of antioxidants in food products that contain trace amounts of green tea, blueberry, acai or just ‘blueberry flavour.’ Green tea is the only prepackaged food in Canada allowed to make claims about antioxidants, so including a small amount of it as an ingredient in a product implies the product contains antioxidant properties.”

The story goes on to say that other implied but essentially incorrect claims include “implying that sea salt is healthier than ordinary salt, writes Doering. The same goes, he says, for claims which leave the false impression that brown eggs are different nutritionally from white eggs, or labeling products as being free of genetically modified organisms, creating the impression the products are therefore safer.”

But Doering, while challenging the validity of these claims, says that the CFIA does not and probably should not take action against these companies “unless there is a pushy competitor complaint,” adding, “In the broader scheme of things, is there any real harm and can't most consumers recognize the BS for what it is?”

Published on: March 9, 2011

Advertising Age reports that fast feeders are embracing marketing buzzwords like “wholesome,” “fresh,” “natural,” “local,” and “premium” as a way of expanding their customer appeal, in part because they are just vague enough not to raise the ire of regulators, and in part because research shows that “consumers are buying into the hype.”

"More traditional health claims on the menu tend to get an adverse reaction by the customer because they associate healthy claims like low-fat with less taste," Darren Tristano, exec VP at Technomic, tells Ad Age. "Newer descriptions are designed around the idea that the food is better for you, is of better quality, but is still food. When you start to say low-fat or low-carb, consumers think of diet."

Even so, there is a risk of making even vaguely healthy claims, the story suggests, because they could alienate some traditional fast food customers or be seen as disparaging core menu items.

Published on: March 9, 2011

• The Huffington Post reports that Walmart and Procter & Gamble are teaming up for yet another family-friendly TV movie, “Magic Eye,” to be shown on NBC later this year.

According to the story, the movie is about “a star high school quarterback facing a moral dilemma,” and “will be the fifth production for the pair, who in February of 2010 announced a producing partnership as part of the Alliance for Family Entertainment, which the two companies co-founded.”

Published on: March 9, 2011

The Virginian-Pilot reports that Smithfield Foods is “releasing seven videos offering an inside look at the pork company’s hog farms ... The release of the videos came less than three months after the Humane Society of the United States publicized an undercover video taken at a Murphy-Brown farm in Waverly. It showed workers prodding sows and tossing baby pigs. The video also reignited criticism of Smithfield’s use of 2-by-7-foot “gestation crates,” which house pregnant sows.”

According to the story, “Smithfield’s videos said the company’s handling of pigs minimizes the risk of disease. They also said the company is switching from gestation crates to “group housing.” The videos include commentary by Temple Grandin, an animal-welfare researcher respected by many animal-rights groups. Grandin also participated in Smithfield’s internal investigation of the Waverly farm after the Humane Society released its video.”

“These video tours give viewers a close look inside our hog farms and let people see firsthand how we put our commitment to product quality, food safety and animal care into practice,” said Don Butler, a spokesman for Murphy-Brown LLC, the Smithfield subsidiary that operates the farms.

The article goes on: “Josh Balk, a spokesman for the Humane Society, said in an e-mail: ‘Instead of bringing PR specialists in to make a whitewashing video, Smithfield should keep the promise it made in 2007 that by 2017 the company would phase out the inhumane confinement of its gestation pigs in crates so small they can’t even turn around.’

“Smithfield dropped the deadline in 2009 while it was suffering multimillion-dollar earnings losses. Officials have since said they are committed to eliminating gestation crates but have not re-established a timeline.”

Published on: March 9, 2011

The National Retail Federation (NRF) is out with the inevitable “2011 St. Patrick’s Day Consumer Intentions and Actions survey,” and it concludes that “52.4 percent of Americans will celebrate the Irish holiday, up from 45.2 percent last year and the most in the survey’s eight year history.”

The survey also found that “while more people will celebrate, the average amount they plan on spending will be a lot closer to what it was last year ($33.97 vs. $33.05 in 2010). Total spending is expected to reach $4.14 billion.”

The report goes on: “Fans of the holiday will celebrate in more ways than one; the most popular form being wearing green apparel. Nearly 102 million people (83.3%) will wear green for the holiday. In recent years, restaurants and bars have also upped the holiday spirit as well, hosting parties and serving green beverages. Thirty-eight million Americans (31.2%) will attend a party at a bar or restaurant – also the highest in the survey’s history. Additionally, 41 million (33.9%) will make a special dinner, 31 million people (25.1%) will decorate their home or office and 23 million (19.1%) will attend a private party.”

Published on: March 9, 2011

The New York Times reports on how “researchers in the Netherlands set out to see whether, all other things being equal - meaning people ate the exact same quantities of the exact same food - the speed of consumption had an effect on diners’ feelings of satiety and hunger and on the chemical signals, or hormones, that are involved in appetite regulation. The researchers also wanted to see how the pace of the meal affected postprandial snacking.

Th result: “Though people said they felt more sated and less hungry after a staggered meal that lasted two hours with breaks between courses and didn’t really want to eat more afterward, the experience didn’t change their snacking behavior.”

Published on: March 9, 2011

CNBC reports that Costco, which has been selling engagement and wedding rings for years, is taking one step further down the matrimonial marketing aisle - it has begun selling wedding gowns.

According to the story, “Costco has struck a partnership with Los Angeles designer Kirstie Kelly to sell a line of wedding dresses at in-store trunk shows. The first of these events will take place in California, but the trunk shows will tour to other Western states such as Colorado, Arizona, Washington and Oregon, as the year progresses, according to Costco spokeswoman Kara Hawker ... . The six designs offered in the Costco line range in price from $699 to $1,399, compared with $2,000 to $7,000 Kelly's dresses usually cost.

“According to the Knot, most brides spend about $1,099 on their gowns.”

Published on: March 9, 2011

• Tesco-owned, California-based Fresh & Easy Neighborhood Markets announced yesterday that is introducing 27 new private brand wines, broken into seven brand names and priced from $3.99 to $19.99 per bottle.

The company noted that close to 50 percent of the wines sold in its stores are exclusive to Fresh & Easy, with the majority selling for $10 or less.

Published on: March 9, 2011

• NamNews reports that A&P-owned Pathmark has launched a new “Perks” promotion, which offers shoppers who spend $300 or more a five percent discount voucher to be used for future purchases. The vouchers can be used individually, or collectively up to a total of 20 percent.

The promotion is scheduled to run through the end of April.

• The Washington Post reports that one year after the District of Columbia began charging a five-cent bag tax for bags handed out by grocery stores, legislators in Maryland Montgomery County are considering a similar tax that “would apply to nearly all retail establishments, from hardware stores to wig shops. Tens of thousands of merchants would be covered.”

The story notes that DC bag tax has both raised $2.3 million in revenue during its first year of implementation and coincides with a reduction in the amount of disposable bags found in the nearby Anacostia River.

• The BBC reports that some British food manufacturers are shifting away from some recycled packaging because of safety concerns. According to the story, “researchers found toxic chemicals from recycled newspapers had contaminated food sold in many cardboard cartons.

“The chemicals, known as mineral oils, come from printing inks ... Exposure to mineral oils has been linked to inflammation of internal organs and cancer.”

• USA Today reports on a new study from the university of Pennsylvania revealing that children think that packaged products will taste better if the boxes feature cartoon characters.

Go figure.

Published on: March 9, 2011

• It is reported that Robert P. "Bobby" Ingle II will take on the title of CEO at Ingles Markets following the death Sunday of his father, Robert P. "Bob" Ingle.

The younger Ingle has been chairman since 2004; James Lanning will remain as Ingles’ president.

Published on: March 9, 2011

MNB fave Glen Terbeek had some thoughts about a recent Eye-Opener, which took delight in an Onion satirical piece about Netflix wanting to open brick-and-mortar video rental stores.

In my original commentary, I wrote:

The sad fact is that every once in a while there will be a serious report about speculation that Amazon might be interested in acquiring a company like Borders or Barnes & Noble, or might be intent on finding a use for all the Blockbuster sites that are about to come on the market.

Which just goes to show how short-sighted some people are, or how rooted they are in old world business models that are on their way to obsolescence.

Companies like Netflix and Amazon were founded, and continue to be successful, on the premise they were going to disrupt traditional and vulnerable business models. It’s not like Reed Hastings and Jeff Bezos - the two companies’ founders - were looking to mark time before taking on the trappings and limitations inherent in these old world models.

No, they were looking to blow the old models up.

People rooted in traditional models need to wake up, to open their eyes. The “ultimate intent” of companies like Netflix and Amazon is to move forward, not backward ... and that ends up leaving a lot of traditional thinkers in the dust.

To which Glen responded:

The difference between Amazon and the traditional retailer is that Amazon is in the "shopper relationship business" (SRB) whereas the traditional retailers, especially food, are in the product distribution business.  (I often thought that FMI should really be called FDI,  Food Distribution Industry.)  Yes, I could see Amazon opening small stores in the future to build on their relationship business model.  And I could see Best Buy move to smaller stores (showrooms) to support their shoppers' service needs and virtual sales. I would guess even today that many Best Buy shoppers compare the BB prices on the internet before they buy.

All trends point to the fact that the future SRB will replace traditional retailer models by offering a continuum of real and virtual shopping experiences.  They will win by really knowing their shoppers and anticipating what they may want through this shopping continuum.  Of course, dIfferent shoppers will shop at different locations on that continuum as they feel comfortable.

Small, focused stores will be an important part of that offering; competing by creating value above and beyond distribution value.  These real stores will offer such shopper values as information, solutions, unique items, new item presentations, convenience, pickup points, shopper relationship centers, social centers, entertainment, problem solving, customization, service, listening post, etc.

In addition, these new SRBs will offer any/all items the CPG companies want to put in that market through their virtual store offering, for pick up or delivery to the home. Why wouldn't they?  Why have your shoppers go somewhere else to get what they want.  This will be accomplished by a market level "CPG agent" operating in a quick response manner. This agent will be funded by the CPGs on an activity based cost fee basis. After all, it makes no sense to have multiple retailers' redundant logistics systems (Stores/DCs) each carrying the same, high volume national products as we have today!  Really, is one retailer's Tide better than their competitors?  And it makes no economic sense to continue to try to make money by buying and reselling the same items in today's saturated marketplaces.  It sure doesn't make shopper sense.  Yes, the virtual price of national brands will be the same for all SRBs.  The product is the same, why wouldn't the price be the same?    And second, the SRB is only creating a demand for the item, not adding any value to it. Accordingly, the SRB will get a marketing fee for creating the item's sale. On the other hand, the retail price of the same items carried in the real store will be set by the SRB since they are taking the marketing risks associated with carrying the item in their stores.

We have to remember that the shopper is now in control via information. Yet we force them to deal with a marketplace that requires them to go to many different stores to get what they want at the price that they should pay for it.  Makes no sense to me.

The comic relief will be guessing what will happen to all the big box stores (including today's supermarkets) in the not so distant future.  Do you think that roller rinks will make a comeback?




I wrote yesterday about regulations being considered that would curtail the harvesting of shark tails, used to make shark tail soup. The New York Times reported something that a lot of people may not know, that shark finning is “a brutal, bloody practice of the global trade in which the fins are typically hacked off a live shark, leaving it to die slowly as it sinks to the bottom of the sea ... As the once-ceremonial dish becomes more accessible, up to 73 million sharks are being killed a year.”

And I noted that “it probably is a pretty good bet that over the years, a lot of people ordered and enjoyed shark fin soup without knowing precisely how it is made. The price of transparency is that our eyes are opened to the realities of the world around us, and we actually have to take responsibility for the things we sell, buy and consume.”

MNB user Bob Norman wrote:

I’m glad that you poked a toe into the door that leads to more awareness about the bigger picture of diminishing shark populations. The decimation of shark populations around the globe have dramatically impacted the entire oceanic food chain. Top-of-the-heap ocean predators are a very necessary link in the chain that provides resources (think food and oxygen) that are critically important to all of us inhabiting the planet.

And MNB user Sean C Mullen wrote:

I was thrilled to see the proposed legislation being considered to ban the sale and possession of shark fins – People need to wake up to the fact that we are fishing into extinction hundreds of species of sharks that play a critical role in the ecosystem of our oceans.   This is a good start but will make only a very small impact if Asian countries don’t take similar actions.




On another subject, MNB user Alan Preston wrote:

In your comments about your Toyota Corolla rentals, I think I read them as intended.  That is, in relationship to Toyota's recent struggles that seemingly are continuing and will for some time.   When I read it, I knew it may instinctively stir someones ire.  It did.

It’s curious, however, in the feedback, that the comment used "US Made".  It didn't mention "Detroit Made" or "Detroit based" cars.  Its really easy to bash Detroit and I have to admit they brought that on themselves.  But I digress.

What really is a "US-Made" car?  My Honda is US made.  The car, the engine, the assembly - all US.  The only major component coming from Japan being the transmission.  The reader might take a look through that Buick and realize that while its final assembly 'might' be US, its filled with international parts.  Even so, my interpretation of your observation was totally different.  Your observation was more related to the place where Toyota has found itself today.  Maybe there's a lesson there.  Nevertheless, there are dozens of lessons in Toyota's position today.  There are also dozens of lessons in how others are capitalizing on Toyota's perceived weakness - in particular Ford.

The lessons are remarkable in their impact or dare I say "Sudden Impact". 

The 'ire' does show how no matter what 'car' it is, for many, ownership is a love affair.  That affair stirs emotion.  Another lesson is connecting that emotion to other products.  The lessons just keep on coming. 

It’s astonishing that Toyota hasn't been impacted even worse than they have.  That itself may be another case of lessons in loyalty and passionate ownership.

Some carry that US made flag.  However, many, many more carry the flag of loyalty to what ever car it is they own - Toyota, Chevy or otherwise.  (Even a US made Honda)  It’s interesting how few products stir that emotion and that ownership of a product does become an emotional love affair.

To me, it is fascinating how even an innocent comment can raise ideological objections. I was just commenting on what I perceived as strong performance by a much-maligned brand, and to some folks it was seen as being less than patriotic, at least by omission.




And, responding to Michael Sansolo’s column about the culinary choices being offered this season by the Akron Aeros, one MNB user wrote:

When you get to Akron you have to try some Hoppin Frog beers. Made locally and outstanding! The stadium should put them on draft for some real differentiation along with the local support angle.

Not affiliated at all… just a fan of good small batch beer!!

A subject close to our hearts here at MNB.