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    Published on: May 4, 2012

    Notes and comment from the Content Guy

    DALLAS - The Food Marketing Institute 2012 Show came to a fitting conclusion Thursday with a celebration of food, as Keoni Chang of Honolulu’s Foodland Super Markets won the title of Grand Chef in FMI’s first-ever Supermarket Chef Showdown.

    Chang’s winning creation was Deconstructed Ahi California Roll, created for the Indulgent recipe category.

    The runners-up were Brian Dunn of Roche Bros. Supermarkets with Indian Five Spice Lamb; Rachael Perron of Kowalski's Markets with Spiced Orange Yogurt Parfaits; and Amber Pruett of Publix Super Markets with Italian Pie.

    FMI said there were 357 recipes submitted to the contest, with 20 finalists, and four category champions, with the recipes rated for flavor, presentation, creativity, consumer appeal and showmanship.

    In addition to the $1,000 category prize, Chang earned admittance to a professional development course at the Culinary Institute of America (CIA).

    This event did not just offer an entertaining diversion on the show floor, but also trained the spotlight on something that, ironically, the food retail business does not focus on enough - food. It is a smart idea, because it puts the emphasis where it should be, and I hope this becomes a regular event at FMI shows. Kudos, by the way, to FMI’s Dagmar Farr, who brought enormous passion to this project ...

    In other news from the show, FMI released its first “Sustainable Seafood Toolkit,” described as “a free resource providing food retail answers to the integration and implementation of seafood sustainability procurement policies and procedures ... Created by FMI’s Sustainable Seafood Committee (SSC) and funded by Bumblebee Foods, LLC, this guidance document cites industry expertise on how to approach sustainable seafood sourcing. The SSC provided helpful steps for development and implementation across data collection, procurement, education and reform. The toolkit features best practices and case studies among retailers, suppliers and non-governmental organizations.”
    KC's View:

    Published on: May 4, 2012

    The New York Times reports that the California State Teachers’ Retirement System, which owns about 5.3 million shares in Wal-Mart, worth about $313 million, plans to file a lawsuit “accusing Walmart’s leadership of breaching its fiduciary duty in connection with a bribery scandal at the retailer’s Mexican subsidiary ... The suit names the company’s board and several current or former executives or board members as defendants.”

    According to the story, “The type of lawsuit, called a derivative suit, is not uncommon after accusations of corporate misdeeds. But the pension plan, known as CalSTRS, has never brought such a lawsuit before.

    “The suit, filed in Delaware, asks that damages from the result of any violations be awarded to Wal-Mart, and that the company reform and improve its corporate governance and internal procedures.”

    Earlier this week, leaders of New York City’s pension funds said they would vote their 4.7 million company shares against five directors - including CEO Mike Duke and former CEO Lee Scott - standing for re-election to the retailer’s board at its annual shareholder meeting next month.”

    This is yet another response to the recent Times piece that provided an inside look at Walmart’s Mexico division, suggesting that its fast growth over the past decade was fueled by bribes, and that top management was more concerned with details not being revealed and investigations not being allowed to move forward than it was with stopping the systematic corruption and adhering to US law that forbids American companies from bribing foreign officials. Both Duke and Scott, among other senior executives, were implicated in the story and identified as both knowing about and covering up the bribery.

    Meanwhile, Fortune reports that Walmart “is far from the only U.S. company that has been caught greasing the wheels of commerce in the past few years. Two more examples of that came on Wednesday. The Securities and Exchange Commission charged a former Morgan Stanley executive Garth Peterson with bribing an official of a state-owned Chinese company in order to win business for the investment firm. Also on Wednesday, media conglomerate News Corp. confirmed that it too was the subject of a U.S. bribery investigation, more fall-out from its phone hacking scandal.

    “There are at least 81 public companies under investigation by the Securities and Exchange Commission or the Department of Justice for running afoul of the Foreign Corrupt Practices Act, which makes bribery in foreign countries punishable in the U.S. In addition, a growing number of companies have started placing disclosures in their financial documents that say their employees may at times violate the U.S.'s overseas bribery law, despite the company's best efforts to prevent it.”
    KC's View:
    First of all, I don’t care how many companies are doing it.

    Second, I know there are a lot of companies that are assiduous about making sure this kind of crap does not happen, precisely because their leaders don;t want to put the company in jeopardy. (They also want to stay out of jail.)

    Finally, I know that some will discount the pension fund move because it represents unionized workers, the bane of Walmart’s existence. And sure, there is some of that going on.

    But this is just the beginning - Walmart is facing what the late, great Bob Murphy used to call “nine miles of bad road.”

    Published on: May 4, 2012

    by Kevin Coupe

    The Worcester Telegram reports on how, inspired by the opening of a Wegmans store in Northboro, Massachusetts, a local high school has created a musical comedy entitled - go figure - “Wegmans - The Musical.”

    According to the story, “Drama teacher Maura Morrison and her students decided to take this larger-than-life grocery store that opened here last fall — where people camped out overnight for opening day and where a couple actually got engaged in the café aisle — and turn it into a comedic musical ... The musical focuses on the relationship between twin brothers — Teddy, a manager at the new Wegmans, and Roy, who works at a mediocre competitor, the fictitious Acme Food Store. Roy, long jealous of his brother, sends a spy to work at Wegmans to sabotage the store and humiliate Teddy. But the spy falls in love with the store and a Wegmans employee, and struggles with whose side to take.”

    Wegmans reportedly is excited about the project, and has donated t-shirts, chef hats and jackets, signs and shopping carts.

    Interestingly, the project grew out of improv classes taught by Morrison, with students contributing ideas for characters, plot points and songs.

    For the moment, there is just one free performance planned - at Algonquin Regional High School at 8 pm on May 10.

    But as everyone who knows Broadway is aware, the Boston area has long been a place for shows to try out before coming to the Great White Way...
    KC's View:

    Published on: May 4, 2012

    Supervalu announced yesterday that Pete Van Helden, executive vice president of retail operations, will be leaving the company this spring, and will be succeeded by Kevin Holt, described as “a former Meijer, Inc., executive who has significant experience leading teams in similar turnaround environments.”

    According to the official announcement, “This was a mutually beneficial decision that comes at the right time for both Supervalu and Van Helden, as the company continues to implement its business transformation strategy and as Van Helden moves on to opportunities that will better utilize his strengths.” Van Helden began his career with Albertsons in 1978, and moved over to Supervalu when it acquired much of the Albertsons chain in 2006.

    As for Holt, here’s what Supervalu has to say about him:

    “During his 13-year career with Meijer, Holt held a number of leadership positions, including roles in information technology and strategic planning. He successfully improved sales and profits, increased productivity and efficiency, and strengthened customer engagement. After leaving Meijer as the executive vice president of retail operations in 2007, Holt spent three years with Sears Holding Company, where he went on to become executive vice president and president of stores. He most recently served as president of Hudsonville Ice Cream and Kilwin's Quality Confections in Michigan.”
    KC's View:
    Betcha those three years with Sears Holdings just warm the hearts of the retail teams with which he will be working.

    But let’s be serious for a moment.

    This could be a case of CEO Craig Herkert continuing to clear the decks and install his own people as he tries to remold Supervalu to his own vision. Maybe van Helden simply did not fit the mold.

    It could be a case of Herkert trying to buy time. People one step down from the CEO’s office often are most vulnerable when a company and a CEO are in trouble ... by firing them, they can create the illusion of change when what’s really happening is the big stall. (This could be even more important now that Herkert has been implicated in the Walmart Mexico bribery scandal - since he got the Supervalu job at least in part because of his work for Walmart in Mexico.)

    Or, it could be a case of simply getting rid of executives with Albertsons pedigrees. Over the years, one of the consistent complaints I’ve heard is that in the wake of Supervalu’s acquisition of many Albertsons stores, it was the Albertsons people who ended up in control of the company. So maybe Herkert is trying to rectify that problem.

    Or...it could be some combination of all three.

    Regardless, one has to wonder if Herkert is simply rearranging the deck chairs on the Titanic.

    Published on: May 4, 2012

    The Associated Press reports that federal investigators probing the California recent case of bovine spongiform encephalopathy (BSE), better known as mad cow disease, “have tracked down at least one of her offspring in another state.” The cow was euthanized, brain samples were examined, and the result came back negative for BSE. (There is no way to test a live cow for BSE.)

    According to the story, “The USDA has declined to name the dairies or the state where the offspring was found.

    “USDA officials also said on Wednesday that within the last two years, the diseased cow gave birth to a stillborn calf. They did not say how that carcass was disposed.

    “Officials also are investigating the calf ranch where the diseased cow was raised before she was sold into dairy productions. Investigators said they have been unable to locate for testing the cattle that were raised with the one who developed mad cow disease.”

    The California case is just the fourth time BSE has been detected in a cow living in the US. There are some 35 million cattle slaughtered in the US each year, and the federal government tests just 45,000 of them annually.
    KC's View:
    I really hate phrases like “they have been unable to locate for testing the cattle that were raised with the one who developed mad cow disease.” I also hate it when the feds won;t identify states or dairies or how things are being handled. It runs contrary to the kind of transparency that I expect, the kind of transparency that might actually give people some faith in the process.

    Published on: May 4, 2012

    • Walmart has announced the winner of its “Get on the Shelf” contest - Humankind Water, which gives 100 percent of its net profits to provide clean drinking water for some of the one billion people in this world dying without it, and will now likely have a lot more money to give away because it will be carried in all of Walmart’s US stores as well as on Walmart.com.

    The runners-up are Plate Topper, which “transforms dinner plates into airtight food storage containers to save meals, leftovers and snacks,” and SnapIt Eyeglass Repair Kits, described as “an easy way to fix your sunglasses or eyeglasses in 30 seconds.” The two runners-up will now be carried on Walmart.com.

    The retailer said that the contest was originally entered by more than 4,000 inventors, entrepreneurs and small businesses, with voting by more than one million consumers.
    KC's View:
    Maybe I’m getting old and cynical. But the first thing I thought when I saw this was that it probably was not a coincidence that Walmart, being attacked on a number of fronts right now because of the Mexico bribery scandal, decided to give the big prize to a product with humanitarian connections.

    I’m not saying there is a definite connection. Just that it is a nice coincidence.

    Published on: May 4, 2012

    • CVS has announced that it has updated it mobile app so that shoppers can digitally store their Extra Care loyalty card in their smartphones.

    According to the announcement, “the redesigned and updated CVS mobile app now allows members to simply scan the barcode on the back of their card or type in their account number manually. After the barcode is captured, customers' smartphones will work just like ExtraCare cards at the register ... the CVS app also offers prescription management, mobile shopping, store locating services and access to the CVS/pharmacy weekly circular.”
    KC's View:
    What took them so long? As far as I’m concerned, these apps are really only relevant - and applicable to my life - if I can use my smartphone instead of a card, all the deals are available to see on the smartphone, and then the discounts are instantly applied to the products I’ve bought when the bar code is scanned or my phone number is entered. (Being able to use the phone number, IMHO, is key to making a card program work.)

    Published on: May 4, 2012

    The changes being made at JC Penney by new CEO Ron Johnson, who reportedly is rebuilding the store experience around lifestyle specifics rather than categories, apparently are not being taken in stride by every employee.

    Over on The Consumerist, there is a blog entry from a company employee identified only as “H,” who works in one city’s flagship JC Penney unit. It reads, in part:

    I write this as a commentary of the new "fair-and-square" jcpenney under new CEO Ron Johnson. I'm in [state redacted], in the flagship store in the flagship mall of the area, and we are going downhill bit by bit. Fair and square is a failure. Retailers will not tell a customer that outright, but it's true. We are sinking around lack of coupons (there are coupons, but you have to work for it) and lack of business.

    On the final day of April, the store secretly fired five managers, one of which was my department. Corporate sent out an email, and the store manager followed - one just got back from vacation, one is on vacation, and the other three were off and were told to come in. And the secret spread like wildfire, so a meeting has been called for May 2nd to discuss the fact that we've lost close to 25 associates (via firings and resignations), five managers, have only five people working the entire second floor, the possible elimination of the catalog department, and the elimination of two register areas (loss of six registers total).

    All of this is because of fair-and-square. We have lost our way and corporate keeps saying "It will get better. Customers will come around. We still have sales, trust us!" Some nights, we have one associate working an entire department alone. I fear we are turning into Sears, the laughing stock of retail establishments.

    Associates like me, who are full-time and have been here for two years, and those who have been with the company for over ten, fifteen, even twenty years, know the ship is sinking slowly, and corporate doesn't believe that.

    KC's View:
    Hey, this could be an enormous disaster. Or, it could reinvent the company and the category. We won’t know until Johnson’s plans have actually been realized.

    I am sure of this. JC Penney’s ship was sinking before, and something had to be done.

    But maybe Johnson has some internal PR work to do.

    Published on: May 4, 2012

    ...with brief, occasional, italicized and sometimes gratuitous commentary...

    • The San Francisco Business Times reports that Safeway is “going national with a personalized pricing program that offers special deals based on each shopper’s purchasing history ... The Pleasanton grocer, with $44 billion in annual revenue, is expanding Just for U after initial testing in Northern California and Chicago over the last year or so.”

    “It’s the wave of the future, and we think we’re on the front edge,” says Safeway Chairman and CEO Steve Burd. “It’s where the world is going — personalization.”

    Environmental Leader reports that 72 percent of US companies surveyed “say sustainability influences their purchasing decisions and is an important factor when selecting a service provider.” Outside the US, the number of companies saying the same thing is 91 percent.

    According to the story, “The survey results show sustainability expanding from a ‘nice to have’ to a ‘need to have’ as companies understand that selecting solid partners as part of their supply chain translates into lower risk and more efficiency.”

    The survey also found that “26 percent of respondents said cost considerations outweighed environmental factors when purchasing products and services;” “54 percent of companies said when two purchasing choices are equal (including cost), the greener product or service is better;” “20 percent said when two purchasing choices are not equal, greener is better;” and
    “17 percent of companies said sustainability is a standard part of their request for information, proposal or quote system.”

    Again, maybe I’m getting cynical. But I only would have been shocked if a study from this source had said anything else. I hope the numbers are right and that these trends actually are taking place ... but I’m not totally swayed.

    • The Associated Press reports that a new program from the US Department of Agriculture (USDA) will begin tracing beef potentially contaminated with E. coli “as soon as there is an initial positive test.

    “Current procedures require USDA officials to wait until additional testing confirms E. coli before starting their investigation. Under the new process, government officials could trace the source of E. coli 24 to 48 hours sooner.”

    • The Wall Street Journal reports that PepsiCo plans to use the late singer Michael Jackson’s image on a billion Pepsi cans “as part of its newly launched ‘Live For Now'’ global marketing campaign.

    Jackson, who died three years ago, had a longtime sponsorship agreement with Pepsi.

    Well, I guess that “Live for Now” is better than “Dead Forever.”

    I cannot imagine how putting the image of a dead singer who seems to have had serious drug problems, was suspected of pedophilia, and who at the very least was one of the creepiest celebrities in recent history is going to sell soft drinks.

    Then again, maybe I’m not the target demographic.


    • Did you see where Spirit Airlines is going to start charging $100 per bag for bags carried on the plane and put in the overhead bin? The current charge is $45, but Spirit says it needs to raise the price to keep its fares low.

    Of course, that’s only for carry-on bags paid for at the gate. Pay for them at booking or at check-in, and it will cost about half that.

    Bags that you can fit under the seat in front of you, however, are free.

    For now. It is hard to imagine that Spirit’s fares are so low that these exorbitant bag fees won’t be a problem for the airline. Not sure about you, but for me this is a bridge too far...
    KC's View:

    Published on: May 4, 2012

    • Price Chopper Supermarkets/Golub Corporation announced today that Keith Frosceno, Vice President of Produce Merchandising, has been promoted to the position of Group Vice President of Fresh Foods Merchandising.

    The company also announced that Matt Johnson, Senior Category Manager, Meat, has been promoted to the position of Vice President of Meat Merchandising, and that Jessica Morin, most recently a district manager for Safeway in its Phoenix division, has been hired to the position of Zone Director, responsible for 12 stores in New York.

    Finally, the company announced today that Elaine Garner, who has held several positions in tax and payroll areas of the company, has been promoted to the position of Vice President of Taxation.

    • Barry Judge, chief marketing officer for Best Buy, has resigned “to explore the next chapter in his career.” No replacement has been named by the company, which is already looking for a new CEO after Brian Dunn resigned last month because of questionable behavior. Best Buy also lost its Chief Technology Officer when Robert Stephens, who founded the Geek Squad, left the company a couple of months ago.
    KC's View:
    Okay, the Best Buy reference on Judge’s resume probably won;t be his biggest selling point.

    Could be worse. Could be Blockbuster. Or Virgin Superstores. Borders. Or (gasp!) the US Postal Service...

    As for Best Buy ... it apparently is not a case of people being asleep at the wheel. There’s nobody at the wheel!

    Published on: May 4, 2012

    ...will return.
    KC's View:

    Published on: May 4, 2012

    Just a few things I’d like to talk about this week...

    First of all, Michael Sansolo and I want to thank the 200+ retailers who joined us at our margarita-and-beer-and-lots-of cool-food party at FMI 2012 this week. We were thrilled to spend the evening with you all ... some old friends, and some new faces, but all part of the MNB community that continues to grow and thrive (and provide me with gainful employment). In addition, thanks to the sponsors that made it possible - TCC Global, WorldPay, Diversey, and Balance Innovations.




    When good things happen, you’re supposed to share it with friends, right? And I’d like to think that you all are my friends, so here goes...

    I am thrilled to announce that this July, I’ll be moving to Oregon, where I’ll be team-teaching a marketing class at Portland State University. This is the fulfillment of a long-held goal, and I’m grateful to Professor Tom Gillpatrick for making this opportunity available to me. It won’t affect MNB at all ... I’ll plan the beginning of my time there to coincide with the time off I take every July, and the rest of the month will simply do MNB on east coast time while living for the on the west coast.

    Those of you who read MNB will know that living in the Pacific Northwest is another long-term goal of mine ... which means that I’ll be spending at least part of the month that I’m there convincing Mrs. Content Guy (who never has been to the region) what a great place it is. It shouldn’t be hard ... and I am over the moon about the whole experience.




    I’m a little skittish about recommending the last movie I saw - The Five-Year Engagement, starring Jason Segel (who also co-wrote it) and Emily Blunt. The plot concerns a couple that gets engaged at the beginning of the movie, and because of a series of personal and professional changes,ends up not getting married for a long, long time. I’m torn because I liked some of the humor, and found Segel and Blunt to be engaging performers (no surprise there). But, the movie seemed stretched to me, and many of the jokes were thin. Plus - and I’m not overstating this - Mrs. Content Guy hated it. Really, really hated it.

    On the other hand, any movie that has Zingerman’s in it can’t be all bad.




    My wine of the week ... The Black Minnow, a 2008 blend of Sangiovese, Cabernet Sauvignon, Malbec, from Minnow Creek in Australia. It is very good - we had it with burgers, but it also would go very nicely with a thick steak. (And to my friend Austin, who may enjoy these wine reviews more than anyone...I’m sorry that you’re only going to be able read about this one.)




    That’s it for this week. Have a great weekend...and I’ll see you Monday.

    Slainte!
    KC's View:

    Published on: May 4, 2012

    Mariano Rivera, the best relief pitcher in baseball history and arguably one of the great pitchers of any kind in the history of the game - and certainly one of the most clutch postseason players - is out for the rest of the season after he tore his right anterior cruciate ligament as well as sustaining meniscus damage while shagging flies in the outfield, as was his longtime practice, before a game in Kansas City.

    Rivera, 42, had said that he’d already decided whether his season would be his last, though he had not revealed that decision.
    KC's View:
    I’ve hated the Yankees (though not with the vitriol of some Mets fans) for a long time. But I feel awful about this. Rivera always seemed to be a class act - a genuinely decent individual of enormous talent and skill, with a high level of spirituality that he nevertheless did not wear on his sleeve. A true sportsman, in the best sense of that word. The Yankees are devastated by the loss ... and baseball is poorer for it as well.