business news in context, analysis with attitude

Published on: August 3, 2011

by Kevin Coupe

Some eye-opening numbers popped up on the laptop yesterday, reflecting different views of how retailing continues to evolve...

• Fast Company reports that Coinstar-owned Redbox says that its DVD and video game kiosks are generating an average of 55 million rentals per month, and up to 40 rentals per second. In addition, Redbox says that it “has seen more than 4.5 million iPhone app downloads and more than 2.1 million Android app downloads. Additionally, Redbox.com is now receiving nearly 9 million monthly unique visitors, while it also boasts 30.5 million newsletter subscribers and 2.7 million SMS subscribers.” All of which adds up to a customer base that sees Redbox accessibility that goes beyond just the kiosks.

• MarketWatch reports that CVS Caremark-owned Minute Clinic said this week that it has treated its 10 millionth patient, at a clinic in Quincy, Massachusetts. According to the piece, “MinuteClinic opened the industry's first retail-based clinic in Minneapolis in 2000 and today has nearly 600 clinics in CVS/pharmacy stores located in 26 states and the District of Columbia. Nine million of the visits have occurred since the beginning of 2007.”

Big numbers. Changing consumers. Evolving retail.

Published on: August 3, 2011

• In California, the Daily Breeze reports that Tesco hopes to have its first Fresh & Easy Express store - a really small 4,000 square foot version of its 10,000 square foot small store format - open in San Pedro by Thanksgiving, though it concedes that it may not open until early 2012.

Fresh&EasyBuzz.com notes that Tesco is looking for other locations where it can put the Express stores, and will model them to some degree on its successful Tesco Express stores in the UK. Two other locations in Southern California reportedly have been identified, and Northern California - especially urban San Francisco - also is said to be a target market for the format.

• Published reports say that Tesco is so pleased with the test of a virtual supermarket in South Korea that it plans to expand the concept ... and is even looking for other places it can use it, such as the UK.

In late June, MNB reported on how Tesco-owned Home Plus in South Korea had been endeavoring to grow market share, especially in its online business. Central to its strategizing is the fact that a population of less than 50 million uses 10 million smart phones, and that it is extremely time-constrained.

And so, Tesco tested a concept that had it plastering the glass walls of select subway stations with pictures of their products, laid out just as they’d be in a traditional shop. The ‘shelves’ featured QR codes that could be scanned by a mobile phone, building up a shopping basket in the few minutes before the train arrives. If the train comes before the basket is complete, the shopper can carry on shopping without the pictures and codes, or simply wait until they get to the next subway station with the system.

The virtual store will be available throughout the Seoul subway system next month, in other areas of South Korea over the next two years ... and after that, who knows?

Published on: August 3, 2011

New York Times wine critic Eric Asimov has a piece this morning about boxed wines, and concludes that while “the quality of the boxed wines sold in this country has been uniformly bad,” a change seems to be taking place. Based on a testing session with a number of critics, he writes, “without a doubt, the choices are far superior to what was available five years ago. Among the wines we liked best, we found more than a few that we’d be happy to serve as a house pour, especially among the reds. We liked the boxes brought in by two small importers who specialize in French wines: the Wineberry Boxes from Wineberry America, and From the Tank from Jenny & François Selections, who focus on natural wines.”

Now, there is a downside to boxed wines: “Unopened boxed wines have a shorter shelf life. The box and bag are more porous to air than an unopened bottle, so they must be consumed relatively young. What’s more, because they are so inexpensive, they may not be handled or stored with great care. Heat and vibration can be hard on whites in particular, which is one possible reason the whites didn’t perform as well as the reds.”

Published on: August 3, 2011

MyWebGrocer announced that it will power digital services for Marsh Supermarkets, the 97-unit Midwest food retailer. Marsh will now offer its customers a completely integrated digital platform across web, mobile and social media channels - including online ordering, online circulars, and mobile applications for iPhone and Android.

John Kelly, VP of Marketing for Marsh, said, “Our partnership with MyWebGrocer allows us to connect with our customers through the platforms they use every day – web, mobile and social media. The fact that these platforms integrate seamlessly gives us confidence that our shoppers will love the digital grocery shopping experience.”

Marsh joins 112 other grocery retailers that use MyWebGrocer services, available at MyWebGrocer.com.

Full disclosure: MyWebGrocer is a longtime and valued MNB sponsor, making it possible for you to get MNB and the email Wake Up Call each day.

Published on: August 3, 2011

• The Seattle Times has a story suggesting that “after years of shipping beer farther and farther away, many small brewers are now shrinking distribution to sell beer more profitably at home.

“The strategy reflects the nation's growing thirst for boutique beers from independent breweries that can't produce enough to meet the demand of a larger market — so they're putting local customers first.”

One example - the Maryland-based Flying Dow Brewery, which has had beers like Doggy Style and Raging Bitch in 46 states, is eliminating 13 states from its distribution map, and plans to cut back even further. The company now has a goal “of selling 70 percent of Flying Dog's output in Maryland, the District of Columbia and Northern Virginia within three years. The region (now) accounts for about 50 percent of the 1 million cases Flying Dog sells annually.”

• The Los Angeles Times has an interview with Tom Long, CEO of MillerCoors, who says that post-merger, he is looking past the synergy phase to something more sustainable.

"Organic growth in craft and imports and light beer is our ambition because our future earnings power will come from that growth more than from cost savings, and so that is the challenge of the business,” Long tells the Times, which positions the strategy this way:

"’[There] will not always be thousands and thousands of tiny brands,’ Long said, referring to the 1,700 brewers in the U.S. today. ‘Big brands will emerge, and they already have: Sam Adams and Fat Tire and others. Certainly Blue Moon fits into that category.’

“MillerCoors' goal ‘is to make sure that some of those emerging winners are ours,’ Long said. To do that, he said, the company will have to be successful in gateway beers that introduce consumers to the craft segment, as well as to other brews for ‘eclectic palates’.”

• Meanwhile, the Associated Press reports that “Gov. Jerry Brown has signed a bill prohibiting the production and retail sale of caffeinated beer, making California the seventh state to do so. Critics say the beverages are aimed at young people and make it easy to drink too much. They typically come in large containers, with high alcohol content and sweet, fruity flavors.”

Published on: August 3, 2011

• The Private Label Manufacturers Association has released the results of a study suggesting, not surprisingly, that “a summer shopping basket of store brands vs. national brands and finds that consumers can save more than 35% off their grocery bill, on average, by opting for the retailer’s brands ... The study results indicate that consumers who choose the retailer’s brand for products on the list rather than the national brand could save, on average, $44.04 off their total market basket – a savings of 35.7%. When buying national brands, the total bill came to $123.23 on average over six separate trips, while the same purchases for the retailer’s brands cost $79.19.”

• The Wall Street Journal reports that “ground turkey contaminated with a particularly dangerous and antibiotic-resistant form of salmonella is being investigated for links to dozens of illnesses and one death, according to the Centers for Disease Control and Prevention ... The U.S. Department of Agriculture is investigating the source of contamination and has issued a public-health alert on ground turkey, but no recall for the product has been announced.”

According to the story, “The CDC said it is investigating a total of 77 people who reported illnesses, one of whom died, in 26 states. Symptoms of diarrhea, fever, and abdominal cramps, which are common in people sickened by salmonella, were severe enough with 22 people to require hospitalization. The ages of those infected with the bacteria ranged between 1 and 88.”

• The New York Daily News reports that the city’s “new system of giving restaurants letter grades for cleanliness has been such a hit it should be expanded to food-cart vendors,” according to Mayor Michael Bloomberg.

According to the story, “Since the letter-grading system began last summer, 90% of city restaurants have been inspected. Some 69% got an A grade, 15% scored a B and 4% earned a C. Bloomberg crowed that the new system has saved eateries that made fast improvements about $3 million in fines citywide - savings that in some cases may have prevented restaurant owners from jacking up prices.”

"I love to eat from the street vendors," Bloomberg tells the News. "Personally, I would love to see ... a sign up there telling whether or not the guy washed his hands before he reaches in and pulls out the hot dog.”

Published on: August 3, 2011

Unified Grocers, the largest wholesale grocery distributor in the western United States, announced that it “is providing 57 high school students an opportunity to learn how the supermarket industry works while participating in the Company's sixteenth annual Summer Youth Employment Program.

“The students, 32 from the Los Angeles metropolitan area, 7 from Northern California (Livermore and Stockton area), 9 from Portland, Oregon and 9 from Seattle, Washington are either attending or are recent graduates of local high schools. They were selected for the program after completing an extensive application and interview process.

“Unified's Summer Youth Employment Program is designed to give the students an understanding of the grocery industry, teach them how corporations function, and develop job skills while working in various departments throughout the Company. During the seven-week program (June 27 through Aug. 12), the students' activities include hands-on instructional presentations, visits to retail grocery stores, and tours of food manufacturing facilities operating in their local communities ... Unified's Summer Youth Employment Program students also have an opportunity to win scholarships to help further their education. The scholarship winners are announced at graduation ceremonies held in each region at the conclusion of the program.”

Published on: August 3, 2011

Responding to yesterday’s piece about hotels sewing RFID chips into towels and robes so they can keep track of them and reduce theft, one MNB user wrote:

Now there is a great business model in the making. Imagine a business like a Kinkos Fed Ex or UPS store you can go to to have your possession RFID tagged in the eventuality of a theft or loss.  Your kid's bikes sport equipment?  School's equipment?  The carpenter's tools?  Your laptop, IiPhone, iPad?  For a nominal registration fee and tagging, a service that will locate your losses... Then, imagine the social revolution and altercations that will ensue when we endeavor to reclaim our property... Will it make honest people or just brain fried ones and will a new entrepreneur then set up a shop to negate and void the RFID tagging.  Human enterprise in its wondrous glory!

MNB user Donna Burns wrote:

I too read this article and found it interesting relative technology although there was also a piece in the article that mentioned that most of the lost laundry was from when the establishments send out their laundry to an outside service not from guests pilfering bathrobes or towels. They simply could not keep track of what went out the door versus what came back in.  This is a loss prevention opportunity which will only serve to keep costs under control.  I applaud their efforts.




Yesterday, MNB took note of a the Journal-Sentinel report that the US Food and Drug Administration (FDA) has sent a letter to the makers of Muscle Milk, a fortified drink, saying that its name is misleading since it actually contains no milk. The absence of actual milk - though it does include ingredients “derived from milk” - is noted on the product’s label, though in smaller typeface than other information.

According to the story, manufacturer CytoSport says on its website that it is addressing the concerns, though it suggests that the FDA’s concerns are being driven my the dairy lobby.

My comment:

I have to be honest on this one. I don’t know what to think. On the one hand, milk is milk, and products that are not milk ought not be able to call themselves milk. After all, transparency is transparency.

On the other hand, does anyone really think soy milk comes from a cow?

Muscle Milk seems more egregiously deceptive - I’ve seen this stuff on shelves, but had no idea that it did not contain milk.

One MNB user wrote:

I think you have hit the nail on the head with that observation.

Muscle Milk is not taking sales away from the dairy industry - but soy milk, almond milk, rice milk etc. are.  The dairy lobby used "Muscle Milk" to try and get FDA motivated to go after Soy Milk etc.  That's not going to work ... There is a way via proper labeling they could retain use of the "Muscle Milk" trademark - we'll see if their lawyers can find it.

Maybe the dairy lobby will next go after "Milk of Magnesia" and "Cream of Wheat".

And, from another MNB user:

Kevin’s article about the dairy industry and Muscle Milk also got me thinking – if this is the precedent for regulating common nouns associated with beverages, what will the FDA do about products like vitaminwater?  Where is the crackdown on the use of the word “water” in a product name that has as much sugar as something we call “cola?”  The Center for Science in the Public Interest had to bring the false advertising suit against Coca-Cola last year, but where are the FDA guidelines when it comes to labeling a water product?  In the end, when our government is used as a tool for industry lobbyists, good old-fashioned label reading is the only way to know what you are truly putting in your body.

MNB user Dianna Chiu wrote:

Seriously?! Did the FDA really just do that? Honestly, I don’t think it matters. It’s just a brand name! The consumer of Muscle Milk most likely knows almost every ingredient backwards and forwards on that label. After all, they are consuming that product for nutrition/body building. These people are by far the most health conscious people out there without a nutrition degree.

What are they going to do next? Make Special K change their label because it’s really not all that “Special?”

Y’know, in the past I might have agreed with the notion that the people who drink things like Muscle Milk would be highly familiar with its ingredients. But then we had all these ballplayers who claimed that if they took steroids it was accidentally, because they didn’t know and didn’t ask what was in this cream or that hypodermic needle.

Another MNB user chimed in:

So from where does "The Milk of Human Kindness" come?

Mrs. Content Guy.

What else could explain her sticking with me for all these years?




Yesterday we posted an email from sone who was commenting on the 30th anniversary of MTV, and who said that he looked forward to MNB celebrating its 30th anniversary. I replied that I’ll be 76 if that event occurs...which led another MNB user to write:

You better be interviewing some young journalists and trying to create a succession plan. Last time I looked, I think you and Michael are on the same exit time frame. Will MNB adapt to the next generation and continue to provide meaningful discussions with the same level of attitude?

I look forward to your commentary when you reach 76. I think most men (self included) just get more opinionated with age.

I continue to enjoy the morning comments every day. Don’t ever stop.

I’ll try.

My kids would agree that I’m getting more opinionated with age. (Though they might argue that I’m not necessarily getting any wiser.)

If I’m doing this in my seventies, though, I may have to work on Johnny Carson’s old schedule...