business news in context, analysis with attitude

Published on: May 14, 2012

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Published on: May 14, 2012

by Kevin Coupe

Excellent column this morning from David Carr in the New York Times, which reflects on the fact that this week, the major television networks will conduct an annual event known as the "upfronts," when they unveil the fall schedule to advertisers and the media; it traditionally has been when they have begun the process of selling advertising, and the public starts to get a sense of what the winers and losers might be.

Carr's point, however, is that this traditional process gets less relevant with every passing year, because the whole notion of a TV schedule is antiquated and rather quaint. Fewer people each year actually watch TV shows when they actually are on - between on-demand, Hulu, iTunes and a variety of other sources, people now watch programs when they want to watch them. Increasingly, they also watch programs on devices other than traditional television sets.

In part, this is simply because technology enables these shifts. But it also because people's lives have changed, and there is increasing competition for people's time and attention.

But these trends need to be calculated into how every marketer thinks about business and customers. The same impulse that allows a viewer to watch an episode of "Game of Thrones" on an iPad while waiting in an airport terminal will come into play when they decide to shop ... even for groceries. The momentum is all moving in the same direction, and marketers - whether at retail or on the supplier side - must move with it, not against it.

To do otherwise is to risk irrelevance and, eventually, obsolescence.

Published on: May 14, 2012

Last week, the National Consumers League (NCL) complained to the federal Food and Drug Administration (FDA) about the NuVal nutritional labeling system, saying that it "gives snack chips, soft drinks, and desserts scores as high as or higher than some canned fruits and vegetables."

NCL gave three reasons of its complaint:

"First, as mentioned above, it often generates scores that may do more to confuse and mislead consumers than to help them make educated nutritional decisions. Secondly, NuVal scores are based on an algorithm that has not been publicly released, meaning it has not been subject to necessary and intense scrutiny from nutritional professionals.

"Finally and most importantly, NCL believes that FDA, not a private company, should be the one giving nutritional advice to consumers. We urge FDA to promulgate a nutritional rating system that would clarify things for consumers and is in line with IOM recommendations."

Dr. David Katz,Chief Science Officer for NuVal, LLC and the person largely responsible for turning essentially academic research into a timely for-profit venture, responded to the criticism via the Huffington Post, saying that NuVal "uses a robust, vigorously tested, thoroughly validated, widely vetted, extensively applied, and independent algorithm to determine the truth. An algorithm that correlates with health outcomes -- including all-cause mortality. An algorithm shielded in perpetuity from industry or political influence. An algorithm that does what the NCL claims to care about: protect consumers. That's why it was built, and the only reason."

Katz also questions who - or what - is behind the NCL criticisms, and he says that if NCL had wanted to review the algorithm, all it had to do is ask. Katz also suggests that while NCL says it is complaining on behalf of consumers, consumers themselves have not complained, but rather have embraced the system.

Published on: May 14, 2012

Reuters reports that Fairway Market, which has nine stores in the New York metropolitan area, is considering an initial public offering (IPO) that would make it a public company and could raise hundreds of millions of dollars to help fuel further growth.

Fairway, founded as a fruit and vegetable stand in 1933, was family-owned until a majority of its stock was acquired by Sterling Investment Partners.

Published on: May 14, 2012

Bloomberg reports on a study by the International Food Information Council suggesting that "twenty-four percent of respondents said they would prefer more information on labels, including data on nutrition, ingredients and potential allergens and their side effects," up from 18 percent two years ago. "Sixty-nine percent were very or somewhat confident in U.S. food safety, the same as two years ago," the story says.

Published on: May 14, 2012

Reuters reports that at both the retailer and supplier levels, companies are "laboring harder than ever to meet consumers' demands for ground beef free of the ammonia hydroxide-treated filler that roiled the beef industry this spring due to health concerns even though there have been no reported cases of illness due to its consumption ... The effort has helped lift retail beef prices just ahead of the U.S. grilling season while compressing margins for beef processors who have struggled in recent years to cope with rising feed costs and falling per-capita consumption."

Some examples of what is happening:

"Leading beef producer Cargill Inc has reverted to hand-carving meat out of trimmings cut from carcasses as a way to salvage some of the lean bits and avoid grinding more expensive cuts -- part of a sector-wide scramble to replace what the industry calls 'lean, finely textured beef' (LFTB) but what has been more damningly dubbed by the media as 'pink slime'."

"Beef Products Inc, the leading U.S. producer of the beef filler, said last week that the media furor has led it to close three of its four plants and lay off 650 people."

"The hunt for a substitute has also has fueled a boom in U.S. imports, benefiting beef exporters in Australia, New Zealand and Uruguay, where cattle are grass-fed and tend to be less fat than their U.S. counterparts."

Published on: May 14, 2012

Fortune has a good piece about Coca-Cola CEO Muhtar Kent, lauding his management style and focusing on his result-oriented management style and goal of doubling the company's sales. You can read the entire profile here, but there is a passage from the story, written by Patricia Sellers, that I thought worth sharing:

"Muhtar Kent says he is constructively discontent. It's day one of the trip through Asia (Coke is letting me tag along), and Kent and I are having breakfast in Bangkok -- coincidentally, the first home he recalls from childhood, when his father was Turkey's ambassador to Thailand. I ask Kent what 'constructively discontent' -- his preferred description of his leadership -- means exactly. 'Not fast enough, not innovative enough, not entrepreneurial enough,' he replies. 'It's all about an entrepreneurial mentality. I've worked religiously to get that into the company.'

"Injecting entrepreneurial religion involves getting Coke's 146,000 employees to think like owners. 'People need to feel like they are chasing pennies down the hallway,' says Kent, who has been known to roam the 25th floor of Coke's Atlanta headquarters and turn off lights when he works late. At Kent's Coke, managers must pay $15 monthly if they use their cellphones for personal calls. (The rule applies to the CEO too.) He believes that one of Coca-Cola's problems was -- and America's problem still is -- lack of respect for cash. 'When you don't see cash, all sorts of things go wrong,' he says. 'You overspend as an individual and overspend as a company.'

"The CEO pays cash when he fills his BMW at the gas station. When I ask him how much cash he has on hand he pulls out a money clip and counts $181. In fact, the only currency Kent doesn't monitor seems to be Coke stock. The CEO tells me that he looks at the share price only once a week."

Published on: May 14, 2012

• Reuters reports that Amazon.com "is prepared to run losses in China to secure a position among the top three players by sales in the country's cut-throat but booming e-commerce market, its China chief said on Thursday.

"China's $36 billion e-commerce industry is hyper-competitive with online retailers and marketplaces such as Dangdang Inc., 360buy and Alibaba Group's Taobao Mall frequently launching price wars and marketing campaigns to win market share."

"We are not so concerned about when we make money or how much money we make," Wang Hanhua tells Reuters. "We tend to take a very long-term view of things. We believe that China's e-commerce eventually will be huge. It's not going to be a winner-takes-all market...We will definitely aim for the top three in China."

Published on: May 14, 2012

Fast Company reports that the US Postal Service (USPS), suffering from budget shortfalls in the billions of dollars, has decided to "prohibit iPads, Kindles, smartphones, and other electronics with lithium batteries from being mailed to overseas troops or foreign customers," which means that people wanting to ship such items "will have to use private parcel services at higher prices."

The reason, according to the USPS, is that "lithium batteries, which power many personal electronic devices, can explode or catch fire in certain conditions."

The story notes that "in order to get around this, consumer electronic manufacturers such as Apple or Amazon ship their products with a minimal charge - which mitigates the safety risk."

Published on: May 14, 2012

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

• Mintel is out with new research suggesting that motherhood affects the way women shop, with 51 percent of those with kids under six saying that they now question how safe things products are to use, wear and eat, 40 percent they think about the long term impact of products on their kids, and more than a third say that they think more about chemicals in food and beverages they give their kids.

Gee, y'think? I, for one, am shocked to find out that having kids affects the way people shop...

• Publix Super Markets said over the weekend that because of its emphasis on reducing the use of paper and plastic single use grocery bags, "the number of bags saved since mid 2007 surpassed the 2 billion milestone." Now, the company says, it is reducing the use of such bags at the rate of one million per day.

• The Washington Post reports that beginning next month, the US Department of Agriculture (USDA) will begin testing raw ground beef for the six strains of the E. coli pathogen that "have been repeatedly tied to multi-state outbreaks and illnesses."

The story goes on: "Most of those illnesses were not linked to beef. They were linked to sprouts or lettuce or no source at all. The meat industry argues that it is being unfairly targeted. Only once before — with the notorious E. coli O157:H7 — have regulators banned a pathogen from fresh meat.

"If the Food and Drug Administration detects any pathogens in the food it oversees — vegetables, fruits, seafood and just about everything other than meat — it yanks the products. But the resource-strapped agency inspects only a fraction of its plants every year. By contrast, the law requires the USDA to inspect all meat plants daily."

• USA Today reports that 7-Eleven is introducing a new product - Slurpee Lite, a lower calorie version of the "brain-freezing drink best known for its weird colors, wild tastes and wacky name."

Am I alone in the fact that I've never had a Slurpee? And that the existence of a Lite version makes me no more likely to ever have one?

• The Baltimore Sun reports that "Wegmans: The Musical," described as "a student-created show about sibling rivalry between two brothers who work at competing supermarkets," played to am enthusiastic and standing-room-only audience last Thursday night for its one-time only performance at Algonquin Regional High School in Northborough, Mass.

Published on: May 14, 2012

• The Financial Times reports that Tesco is replacing Stefan De Loecker, who has been running its Slovak operations, with Martin Dlouhý, who joined Tesco in January after stints with German retailer Metro and McDonald's.

Published on: May 14, 2012

Responding to last week's story about how a norovirus outbreak was traced to as reusable grocery bag that was placed on a bathroom floor, one MNB user wrote:

Shopping bags are probably not nearly as prevalent as a woman’s purse.  I bet not all the stalls have purse hooks, and even if they did the key term here was “viral particles floated” to the bag.  On the floor or not, a purse would have also been susceptible.

This seems to be a theme, as another MNB user wrote:

Now you know why women are so concerned about what to do with their purses when using a public restroom...

I actually didn't know that.

And MNB user VL Chendorani added:

I have been waiting for something like this to hit the airwaves. Reusable bags aren't all they are cracked up to be! I get the environmental side of all this but these folks aren't looking at the big picture. I was involved in developing a Reusable Bag for the Grocery chain I worked for. We included our Quality Assurance department in the development. What came out of our due diligence was the fact that MOST reusable bags harbor bugs and as your story states, viruses. so our mission was to develop a bag that met these issues.

Our problem was having customers bring bugs/viruses into our stores, which is happening at an alarming rate!

We succeeded in our quest by figuring out why the bugs/viruses like the bags. Light for the most part played a big part in the bug issue. So our bag was a design that had an open weave to it yet was very sturdy. It was a coated vinyl so was clearly washable which took care of the virus issues. Retailers should pay attention to this issue, but alas have their minds on other issues and rightfully so.




Regarding our story about how an advocacy group is petitioning the White House to make sure that unhealthy foods - like hot dogs - never are shown in official photos, MNB user John
Baragar wrote:

You missed the point about the Physicians Committee for Responsible Medicine – a colossal lack of transparency.  You write about this a lot on MNB - calls for transparency in advertising. labeling and you call out MNB’s link anytime you have a connection to a story or company.

Yes, their petition is foolish, but it has nothing to do with healthy eating.  Their agenda is to get you to stop eating meat or any other product produced by animals.  They cloak it in a “healthy eating” agenda because that is more palatable than promoting veganism.  An even finer point is that their veganism agenda is not about healthy eating, it is about Animal Rights.  They have no problem if you eat unhealthy as long as it does not involve a product produced using an animal.  They didn’t mention President Reagan’s love of Jelly Beans (which was widely reported) or the numerous campaign stops eating apple pie or doughnuts.

The PCRM is a radical animal rights group, not a group interested in your health.  One need look no further than their main source of funds to get at their real intent – People for the Ethical Treatment of Animals.   Even their name is intended to mislead.  In fact, there are very few “physicians” even affiliated with the them (the AMA regularly denounces their “studies” and tactics).

I have no problem with people who believe that you should not eat meat and I support anyone who chooses to live and promote a vegan lifestyle, but the PCRM uses questionable tactics at best and at worst uses outright false information.  Anytime you feel the need to go to such great lengths to mislead and hide your real purpose, you will ultimately hurt those that are honest and upfront about it.




On another subject, one MNB user wrote:

"Back to the basics" ! Your not the only one that hates the term, Kevin. You can throw me on that pile too. Good managers don't usually need to go "Back to the basics ". They never forgot them to begin with.




Finally, it is only on MNB that you'll read an email like this one...

It’ll be interesting to see how many e-mails you get on this vs. the many more important things you report about...

You erroneously called Hulk’s alter ego David Banner, instead of his actual name Bruce Banner.  Innocent enough mistake, but the interesting part is where “David” actually came from.  When CBS was going to put The Incredible Hulk on TV back in the 70’s, the name Bruce was deemed to be too much of a homosexual stereotype or not macho enough, so they made the producers change the name to David.  Could you imagine that happening now and what kind of (totally appropriate) outcry there would be within minutes of release?  Thought since how you reference the need for transparency and full disclosure all the time, this was worth mentioning.

I love emails like this...because it illustrates the breadth of the MNB audience.

You are absolutely right.

The funny thing is that I had just that conversation with my family when the movie came out. Mrs. Content Guy called him David Banner, and I explained that it was Bruce Banner, and used almost exactly the same words you did. Then, when I wrote my Avengers review, I had brain freeze.

Not the worst mistake I've ever made ... but the broader point you make is a good one, that public attitudes towards certain things have changed dramatically over the years - it was just the late seventies that the name "Bruce" was not used because of a supposedly "gay" connotation.

Thank goodness the world has changed. IMHO...