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    Published on: September 26, 2011

    FMI2012 lets you focus on your customers as people, not datapoints. Buzzing with new ideas, teeming with new products, and sizzling with new solutions, this event brings 25,000 of your industry colleagues – retailers, wholesalers, suppliers and manufacturers together, and delivers fresh ways to satisfy the customers who drive your sales.

    Co-located with the U.S. Food Showcase, AMI Convention and Exposition and United Fresh 2012, FMI2012 is the food distribution industry’s premier event, and one you can’t miss. Dallas housing will be at a premium so register today by clicking here
    KC's View:

    Published on: September 26, 2011

    The pace of global business is more feverish than ever before. Innovation, branding, design and execution are no longer enough; in addition, successful firms must gather knowledge and personal connections from a variety of places.

    Industry leaders and experts from a myriad of fields will convene on October 20 at Portland State University’s annual Food Industry Leadership Center’s Executive Forum and share knowledge critical to operating a 21st century business ...and you are invited to share in this cross-pollination of ideas.

    Among the speakers:

    • Jeff Hansberry, President, Global Consumer Products, Starbucks, who is leading the company’s consumer products business with the introduction of new brands and products to more markets around the world.

    • Lisa Sedlar, President of New Seasons Market, who will talk about her company’s unique combination of creative energy, sustainability and high quality food.


    • Tom Furphy - formerly of Wegmans and (where he developed the CPG business) and now the founder and CEO of Seattle-based Consumer Equity Partners, and MNB’s Kevin Coupe will engage in a provocative dialogue about where the food industry is heading, what can be learned from e-grocery successes, how to compete in the new environment, and how to understand the new consumer.

    For information and to register, click here.
    KC's View:

    Published on: September 26, 2011

    by Kevin Coupe

    Talk about technology engineering a fundamental change in how a particular item - one with a long tradition - is bought and sold....

    The Wall Street Journal reports that Harper Collins Publishers has announced that “it would make about 5,000 current paperbacks available to bookstores through On Demand Books LLC's Espresso Book Machine. The desk-sized device can custom print a book in just a few minutes. That means even if a physical copy is not in stock, it's still available almost immediately.

    “Though the number of Espresso print-on-demand machines in use in the U.S. is small, the agreement underscores how publishers are rethinking the retail landscape now that Borders Group Inc. is in the final stages of liquidation.

    “The hope is that the surviving bookstores will be able to boost revenue by selling titles that they might not have in stock.”

    It is an Eye-Opening development.

    What is interesting about the Journal story is the fact that a number of retailers seem to see this as a way for them to successfully combat the likes of - almost ignoring the fact that the online retailer is equally capable of having such machines on hand and reducing the number of books it has in its warehouses.

    It also is interesting because it points to the way in which industries are adjusting to new competitive realities, adapting technologies in a way that change/shorten supply chains, and potentially changing consumer expectations.

    It’s happening in the book industry. It’s happening in pretty much every industry.
    KC's View:

    Published on: September 26, 2011

    The Los Angeles Times reports that California Gov. Jerry Brown has signed into law “legislation to require and many other out-of-state Internet retailers to collect sales taxes on purchases by California customers.”

    However, the law does not require the actual collection of these sales taxes by internet retailers until September 15, 2012 - a compromise that was sought and granted to, which in turn agreed not to push for a state-wide referendum preventing online sales tax collections. Amazon has said it will be seeking a national approach to the issue during the year of breathing room that the California law gives it.

    According to the story, “Experts predicted that the new law would help bricks-and mortar stores that have sales staffs compete with e-commerce companies that need fewer people to fill orders. They also predicted that new jobs would flow into the state if Amazon, as expected, opens some large distribution centers to better serve California, which is estimated to represent as much as 20% of the company's market.”
    KC's View:
    It is time to collect online sales taxes. I’m sure there are arguments on both sides about whether the solution should be national or state-by-state. But e-commerce has matured to the point where at least on a taxation basis, it is playing on a level field with bricks-and-mortar retailers.

    Published on: September 26, 2011

    The Los Angeles Times reports that a new study, entitled “Apples to Twinkies: Comparing Federal Subsidies of Fresh Produce and Junk Food,” suggests that “among the billions of dollars spent each year in federal subsidies for commodity crops, a steady flow of these taxpayer dollars are going to support high fructose corn syrup and three other common food additives used in junk food.”

    The story goes on: “From 1995 to 2010, $16.9 billion in federal subsidies went to producers and others in the business of corn syrup, high fructose corn syrup, corn starch and soy oils,” or enough to buy 19 Twinkies for each taxpayer per year. By comparison, the report says, “federal subsidies for fresh produce would cover only a few bites of an apple per taxpayer a year.”

    The study was conducted by by CALPIRG and the U.S. PIRG Education Fund.
    KC's View:
    Seems to me that at a time when everybody is looking for ways to shrink the size of government, eliminating these kinds of subsidies makes perfect sense - especially at a time when there seems to be agreement in many quarters that the nation’s obesity epidemic is creating a health care crisis and adding to our economic woes.

    This represents an easy $17 billion cut in the federal budget. At least, IMHO.

    Published on: September 26, 2011

    The Los Angeles Times reports that members of the United Food and Commercial Workers (UFCW) in Southern California have voted to ratify a new contract that was negotiated by the union with Albertsons, Kroger-owned Ralphs and Safeway-owned Vons. Support for the deal was described by the union as “high.”

    The deal was reached after eight months of negotiations, which had taken on a down-to-the-wire tone when more than 50,000 employees at the three chains seemed poised to walk out. The chains were trying to balance their desire for the best deal possible with a need to avoid the 141-day strike/lockout of six years ago, which cost the chains an estimated $2 billion; in addition, Strategic Resource Group says that the previous labor action cost the chains market share - they had a combined 60 percent of the market then, and now share a total of 23 percent of the market.

    According to the story, “One key sticking point was healthcare funding: A key question, for the UFCW and the three employers, was how much each side would have to pay to ensure that a healthcare trust fund covering workers would be economically viable for the long term.

    “Among the issues resolved in the complicated deal, according to sources familiar with the negotiations, is that grocery workers would pay $7 a week for individual coverage and $15 a week for a family starting next April. (The grocers have previously said these premiums were necessary to help offset rising medical costs.)”
    KC's View:

    Published on: September 26, 2011

    Visa and MasterCard announced last week that they intend to raise debit card fees for small ticket purchases, from eight cents to 23 cents on a two dollar purchase.

    As explained by the Bloomberg story, “the Federal Reserve said June 29 that U.S. debit-card transaction fees, mandated by the Dodd-Frank Act, can’t exceed 24 cents on an average transaction, replacing a formula that averages 1.14 percent of the purchase price, or about 44 cents.” Visa and Mastercard fought bitterly against those restrictions, saying it would cost them billions of dollars; this new fee structure is seen as a way of getting around the federal regulations.

    The Merchants Payments Coalition, which represents retailers and trade associations in their fight against the debit card and credit card companies, came out with a statement charging that the new fees “will hurt those small businesses that Congress set out to protect when they passed swipe fee reform last year.”

    “This move by Visa and MasterCard clearly hurts businesses and consumers by undermining Congress’ intent that swipe fees be reasonable and proportional,” said Mallory Duncan, chairman of the Merchants Payments Coalition. “Attempting to charge the public the maximum ceiling amount, no matter how small the transaction is, unfortunately is all too typical of what we’ve come to expect from the card companies and their banks.”
    KC's View:
    No real surprise here. Of course the banks are going to do everything they can to recoup the revenue they believe they’ll lose because of financial regulations. The interesting thing will be how retailers respond ... perhaps by offering cash discounts on purchases?

    Published on: September 26, 2011

    Nova Scotia-based Sobeys and Target Canada announced that they have entered into a long-term wholesale distribution arrangement that will have Sobeys supply Target stores in Canada with select food and grocery products, beginning in 2013. The distribution deal will include both national brands and Target’s private brands.

    According to the announcement, “The two companies have also agreed to leverage each other's distribution networks to mutually reduce transportation expenses. In addition to the wholesale distribution arrangement, both companies will also explore additional supply chain opportunities.”

    Target has announced plans to open 125 to 135 stores in Canada, most of which are slated to debut in 2013.
    KC's View:

    Published on: September 26, 2011

    • In the UK, the Mirror reports that more than 14,000 staffers worked round the clock over the weekend to “change millions of price labels as the store giant launches the biggest price war in 25 years,” looking to cut prices on more than 3,000 “essentials.”

    Tesco’s competitors are expected to follow suit, as all the food retailers seek to address what is called “the biggest squeeze on the cost of living for 60 years and ­growing fears of a double dip recession.”
    KC's View:

    Published on: September 26, 2011

    As previously reported on MNB, Unilever-owned Ben & Jerry’s has stirred a bit of controversy by coming out with a new limited edition ice cream flavor keyed to an old “Saturday Light Live” skit in which host Alec Baldwin played a character named Pete Schweddy.

    Schweddy owned a store that made Christmas-themed foods. Especially different kinds of balls - popcorn balls, cheese balls, rum balls, etc... And because it was “Saturday Night Live,” these were called “Schweddy Balls.”

    Hence, Ben & Jerry’s new Schweddy Balls ice cream, made up of vanilla ice cream with a hint of rum and ... loaded with fudge covered rum balls and milk chocolate malt balls.

    Now, not everyone found this funny. One Million Moms, an offshoot of the conservative American Family Association, is threatening to boycott Ben & Jerry’s because of the flavor, saying that “the vulgar new flavor has turned something as innocent as ice cream into something repulsive.”

    Over the weekend, Alec Baldwin guest hosted the season premiere of “Saturday Night Live,” and he briefly mentioned the controversy in his opening monolog, saying that the company has now come up with a new flavor for the protestors.

    “It’s called ‘Go Fudge Yourself,’” he said.
    KC's View:
    See “Your Views” for email on this subject...

    Published on: September 26, 2011

    • There was a story the other day in the Toronto Globe and Mail saying that Walmart’s activities in Canada is driving a broader price promotion approach across the market, which in turn “ is leaving little room for supermarket retailers such as giant Loblaw Cos. Ltd. to gain sales.”

    Galen G. Weston, executive chairman of Loblaw, told a Scotia Capital conference that “we do have what I would consider to be a disruptive entrant in the marketplace – in the fresh-food segment in particular – and that is Wal-Mart, the great retail bogeyman ... [It] is a real and material force, has been for 15 years. But their presence in the market today really is having an impact on the fresh business.”

    • The Financial Times reports that Procter & Gamble “has thinned the ranks of senior managers by 10-15 per cent and is considering ways to restructure further as investors press it to improve profitability.

    “Bob McDonald, P&G’s chairman and chief executive, told the Financial Times that P&G was also examining possible broader changes after several quarters in which its profit margins and share price have stagnated, while analysts clamour for it to shift its centre of gravity to emerging markets.”
    KC's View:

    Published on: September 26, 2011

    So, we got a number of emails regarding the “Schweddy Balls” ice cream controversy...about which I have said the following:

    I’m sympathetic to the moms, and have gotten a couple of emails myself from parents who think that this is a little tasteless. I’m a parent, and when my kids were young we had to occasionally navigate our way around uncomfortable situations that occasionally led to questions that I preferred not to answer. But the point is that I was able to do that, and when I didn’t or couldn’t, I dealt with it. That was my job.

    And I don’t think that all marketing has to be child-friendly.

    MNB user Steve Sullivan wrote:

    Half the country out of work.  World Economy in the toilet.  Can’t get Palestinians and Israelis to agree to a peace that could only benefit all of them.  Terrorists around the world.  Education being endangered because of underfunded schools. Hunger effecting millions in our own country. 

    Earthquakes.  Hurricanes.  Tornados.  Frogs. Locusts.

    And they are worried about Schweddy Balls.

    You forgot fire and brimstone coming down from the skies! Rivers and seas boiling! Forty years of darkness! Earthquakes, volcanoes... The dead rising from the grave! Human sacrifice, dogs and cats living together... mass hysteria!

    Another MNB user wrote:

    Kevin... I'm a regular reader of MNB- first time that I've written. Excellent reply expressed in KC's view about Ben & Jerry's. Rather than trying to shelter your children from everything they may face in life (and they will encounter a great many things!)... use it as an opportunity to have a good conversation with them. Help them to learn to analyze things and make GOOD choices about things that matter.

    From another MNB user:

    Why is it everybody who doesn’t agree with some thing or want to consume something feels compelled to “protect” the rest of us grown ups form doing what we feel comfortable with.

    Here’s a novel idea simply don’t buy it…that should pretty much shield your child from the dreaded plague of humor.

    MNB user Guy Wheeler wrote:

    I liked your comment - "and I don't think all marketing has to be child
    friendly." i.e. Viagra and Cialis?

    Hey, I’ve had plenty of times when I’ve shut off the radio or changed the channel because I find those commercials were simply hard to explain to my kids. That’s called being a parent.

    And, from still another MNB user:

    I agree completely.  So while this Limited Edition is out, stay away from Ben & Jerry's when you get ice cream, there are many wonderful brands out there. That company is known for controversial flavors, remember them changing "Chubby Hubby" to Hubby Hubby" in support of gay marriage?  They bring it out and then it goes away quietly in a very short time if you let it be, all the groups do that protest it is...draw more attention to it. Most kids have never seen SNL and will not even know what that means UNLESS their parents start going crazy about it.....then they may have  some explaining to do. There are a lot of foods out there with the word "Balls" in it....Cheese Balls, Snow Balls, Oreo Cookie Balls, etc, are we going to protest those, too? Nah,  just quietly don't buy need for protest.

    MNB user Clayton R. Hoerauf wrote:

    I must admit I got a little worried when it looked like you were going to cave to the mommy’s….. but you hit it out of the park at the end. Everything in life offends someone. I’m on my way to pick up some ice cream!

    Regarding the recent Sur La Table acquisition, one MNB user wrote:

    Hi, Kevin, I wish your excitement over possibly getting a new kitchen shop nearby had been tempered by the disturbing news that this icon of Seattle has been acquired again, this time by foreign investors (or maybe US investors who avoid taxes by basing offshore). Besides the political and economic implications, how does becoming an investment to “1000+ high-net-worth clients” bode for Sur la Table’s future customer experience?

    To be honest, I thought about the foreign aspect of the story when I commented on it. But the thing is, the company was already partially owned by a private equity group, and the reality is that we live in a global economy. Rather than complaining about foreign companies buying US companies, maybe US companies ought to get more aggressive about global expansion.
    KC's View:

    Published on: September 26, 2011

    In Week Three of National Football League action...

    New England 31
    Buffalo 34

    Jacksonville 10
    Carolina 16

    San Francisco 13
    Cincinnati 8

    Miami 16
    Cleveland 17

    Detroit 26
    Minnesota 23

    Houston 33
    New Orleans 40

    NY Giants 29
    Philadelphia 16

    Denver 14
    Tennessee 17

    NY Jets 24
    Oakland 34

    Kansas City 17
    San Diego 20

    Baltimore 37
    St. Louis 7

    Green Bay 27
    Chicago 17

    Arizona 10
    Seattle 13

    Atlanta 13
    Tampa Bay 16

    Pittsburgh 23
    Indianapolis 20
    KC's View: