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    Published on: May 16, 2012

    Part one in a 12-part series.

    This morning, as promised, MNB begins a series of videos culled from a presentation that I did at the recent Food Marketing Institute (FMI) 2012 Show in Dallas. The session, entitled "From Amazon to Zipcar: Innovations from the E-Revolution," featured an extended conversation with Tom Furphy, CEO of Consumer Equity Partners and the guy who helped Amazon.com get into the grocery business. (If you don't know that Amazon has an aggressive CPG offering, or have never bought groceries from Amazon, then this series is must-viewing.)

    Today: The importance of embracing change, and why companies need to have a "today is day one" attitude and culture.

    This series is made possible by MyWeb Grocer, the leading provider of digital grocery and CPG solutions.

    For more information about how you can fight an efficient and effective battle in the e-revolution, email MyWebGrocer by clicking here, or call  (888) 662-2284.

    KC's View:

    Published on: May 16, 2012

    by Kate McMahon

    Though John Belushi’s legendary “Animal House” character Bluto would surely scoff at this particular usage of the term, “web food fight” has now entered the social networking lexicon. In the 1978 classic movie, food literally flew across the Faber College cafeteria. Today, consumers are launching salvos over Facebook, Twitter, YouTube and petition sites such as Change.org.

    The most recent web food fights began with backlash against Ashton Kutcher’s “brownface” commercial for Popchips, genetically modified ingredients in Kashi’s “natural” cereal, the “pink slime” meat controversy, and crushed bug extracts in a Starbucks specialty drink.

    Different flashpoints – similar immediate results.

    Consumer outrage was fast and furious, prompting the producers to scramble and make amends or promise to change. A closer look, however, shows that while the Popchips controversy generated headlines and thousands of YouTube hits, the resolution was simple. Popchips yanked the commercial and apologized to Indian-Americans and those who found Kutcher’s portrayal of “Raj” -- a Bollywood producer looking for a date – as racist and offensive. (Not to mention stupid, in my opinion. But then again Kutcher is the brand’s “president of pop culture.” Enough said.)

    The other cases are more complex. The Kashi kerfuffle commenced when the owner of The Green Grocer in Portsmouth, Rhode Island, pulled the popular cereal from his shelves, posting a note saying he learned Kashi used genetically engineered soybeans that are resistant to an herbicide. A photo of the sign went viral, and blogs and Facebook pages lit up. Kashi responded with a video on Facebook, defending the product as being “natural” (but not “organic”) under FDA regulations. Within a week, the Kellogg Co. unit announced an initiative promising that by the end of 2014, all Kashi GOLEAN cereals and Kashi Chewy Granola Bars will be Non-GMO Project Verified and by 2015 all new products will “contain at least 70% USDA organic certified ingredients.”

    The Starbucks crushed beetle brouhaha began when a vegan barista tipped a vegan blogger that the company was using “cochineal beetle extract” to color its Strawberry & Crème Frapuccino and other products red. A chorus of “gross” and “disgusting” erupted online and more than 6,500 people signed a Change.org petition. Starbucks, to its credit, reacted quickly and promised to switch a tomato-based lycopene dye by July in U.S. stores.

    Which brings us to “pink slime,” so named for the ammonia-treated beef scraps showing up in hamburger at U.S. schools. Bettina Ellis Siegel, a blogger, former lawyer and Houston mother of two, started a Change.org petition against the filler and had 260,000 signatures in no time. Soon the U.S. Department of Agriculture (USDA) said it would let schools order beef without the scrap meat, and producers of said beef were crying foul and shuttering plants. The fallout continues.

    All these case studies point to the lightning quick speed and clout of the consumer’s wrath on the internet. And in the case of Kashi, Starbucks and “pink slime,” that transparency and honest, accurate labeling is clearly the only acceptable response.

    In these food fights, the game may be rigged - with technology assuring that in the long run, the only real winners will be consumers.

    Comments? Send me an email at kate@morningnewsbeat.com.
    KC's View:

    Published on: May 16, 2012

    The Associated Press reports on a new AP-CNBC poll saying that half of those surveyed say that Facebook is just a "passing fad," with an equally high percentage saying that the company's expected Initial Public Offering (IPO) price is "too high."

    Not surprisingly, 59 percent of those surveyed under the age of 35 said that they think an investment in Facebook would be a good bet, while only 39 percent of those over 65 think the same thing.

    As the story notes, "The company Mark Zuckerberg created as a Harvard student eight years ago is preparing for what looks to be the biggest Internet IPO ever. Expected later this week, Facebook's Wall Street debut could value the company at $100 billion, making it worth more than Disney, Ford and Kraft Foods.

    "That's testament to the impressive numbers Facebook has posted in its relatively brief history. More than 40 percent of American adults log in to the site --to share news, personal observations, photos and more-- at least once a week. In all, some 900 million people around the world are users. Facebook's revenue grew from $777 million in 2009 to $3.7 billion last year. And in the first quarter of 2012 it was more than $1 billion."
    KC's View:
    I'm not sure that "fad" is the right word. It may be that business cycles move faster than ever, and that company lifespans are shorter than ever ... unless they continue to innovate, challenge their own processes, strategies and tactics, and embrace the changes that, if implemented by a competitor, might put them out of business.

    Is Facebook that kind of company? Maybe. Maybe not.

    But the continuum of which it is a part is in no way a fad. People who think that it is are just kidding themselves.

    Published on: May 16, 2012

    US News and World Report has a story saying that Walmart "has quietly transformed itself into a technology powerhouse to compete more fiercely with Amazon and other online rivals. Walmart, highlighted by U.S. News as one of America's Most Connected Companies for its e-commerce investments, is aggressively seeking to position itself for a future in which more shoppers interact with it via computers, tablets and mobile devices."

    The story goes on:

    "Walmart has long been a pioneer in the warehousing and analysis of customer data and use of so-called RFID technology that uses bar codes to track and manage inventory. Now, as its customer base flocks to smartphones and social media, and as it faces new competitive pressures, it aims to be an e-commerce leader ... It has introduced more products online, including thousands since January (particularly apparel, health and beauty items, and packaged foods), offers free shipping options, and regularly upgrades the search capabilities of its site."
    KC's View:
    Walmart's intentions have been clearly stated, and they are ambitious ... and probably appropriate, considering Amazon's goals.

    But there are a lot of people out there who believe that its ability to implement those online strategies is severely compromised by a corporate culture that favors brick-and-mortar, that sees everything in terms of driving same-store sales, that will always view online as an outlier segment of the business.

    Published on: May 16, 2012

    The New York Times reports this morning that more and more, soft drink manufacturers are having to focus on the non-carbonated offerings in their portfolios, as the cultural zeitgeist moves away from such products.

    Here's how the Times frames the story:

    "Cold, bubbly, sweet soda, long the American Champagne, is becoming product non grata in more places these days. Schools are removing sugary soft drinks from vending machines at a faster pace, and local governments from San Antonio to Boston are stepping up efforts to take them out of public facilities as the nation’s concerns about obesity and its costs grow.

    "Last year, the average American drank slightly under two sodas a day, a drop in per capita consumption of about 16 percent since the peak in 1998, according to Beverage Digest, a trade publication.

    "What began as a slow decline accelerated in the middle of the last decade and now threatens some of the best-known brands in the business. Coke and Pepsi are relying more than ever on the 'flat' drinks and bottled waters in their portfolios and on increases in the price of sodas, forcing die-hard drinkers to pay more to feed their sugar habits."

    While industry insiders say that they believe the carbonated business will continue to grow, albeit more slowly than in the past, they also concede, according to the , that "unless the industry stumbles upon what it calls the holy grail, an all-natural sweetener with no calories, the future is going to be more firmly anchored in noncarbonated drinks."

    Anti-obesity advocates, on the other hand, seem thrilled about the shift, though they also are "worried about what may be taking the place of carbonated soft drinks in the American diet. They note the increasing appetite for energy drinks, loaded with sugar as well as caffeine, and noncarbonated sports drinks, which may have as much sugar as sodas."
    KC's View:

    Published on: May 16, 2012

    • The Philadelphia Inquirer reports that "an African American shopper who says he suffers emotional distress and mental afflictions caused by a racist intercom announcement he heard two years ago at a Wal-Mart store in Washington Township, Gloucester County, is suing the retail giant for $1 million.

    Donnell Battie, 35, of Winslow Township, was in the crowded store on Route 42 the evening of March 14, 2010, when a male voice said over the loudspeaker: 'Attention Wal-Mart customers, all black people must leave the store'."

    A sixteen year old boy was arrested, charged with harassment and bias intimidation, and was sentenced to probation and forced to apologize in writing to Battie.
    KC's View:
    I want to be a little careful here, because I do not want to minimize this kid's crime. Not only should he have been punished, but I might have thrown the book at his parents - if I found out that my kid had done such a thing, I'd be mortified at having done such a lousy job raising my child.

    That said, suing Walmart for $1 million seems a little extreme.

    Published on: May 16, 2012

    National Public Radio reports on how Californians going to the polls this November likely will "have the chance to make California the first state in the nation to require labeling of genetically engineered food. That's according to California Right to Know, which filed a petition to force a statewide vote."

    While some 40 nations require the labeling of foods that contain genetically modified ingredients, the US does not, with the FDA maintaining that GM food "is essentially the same" as traditional food.

    In addition, the story says, "a new analysis of the labeling initiative suggests that if it passes, it would create a complex mandate for food companies that may make it harder — not easier — for consumers to figure out what's really in their food. That's because the initiative muddies the definition of a 'natural' food.

    "The word 'natural' on a food label is already pretty controversial. It's more of a marketing tool than anything else — seducing consumers into thinking it means healthier, or nearly organic, although it may simply mean minimally-processed and free from artificial ingredients. The federal government has so far declined to make the term clearer, which has led to many processed foods using the 'natural' label.

    "The activists behind the labeling initiative say they want California consumers to know what they're eating. So they're calling for any processed food or raw agricultural commodity (like corn) that has been or may have been partially or wholly produced with genetic engineering to be labeled as such. And they want to prevent processed foods with GE ingredients from using the 'natural' label, too."
    KC's View:
    Maybe I'm misunderstanding the initiative. Or maybe I just don't understand the definition of the word "muddled."

    Here's where I come down on all this stuff. We all know what "natural" ought to mean - as opposed to the crappola definition provided by the federal government. So why can't we have a common sense definition that everybody abides by, as opposed to definitions that companies have to maneuver to adhere to, even though these movements defy common sense?

    Same goes for GM products. Just label them. Putting labels on them doesn't muddle anything. It just provides consumers with transparent information and a clear choice.

    I get frustrated with this stuff because it all seems to be about maneuvering and manipulation and flirting with the the borders about what is acceptable and legal. In today's technology-driven environment, in which information is easily available and PR wildfires can be created whenever companies seem to be obfuscating rather than being honest, the approaches that so many companies - and quite frankly, the government - seem to be on the wrong side of where things are going.

    And all they are going to do, in the long run, is erode trust.

    Published on: May 16, 2012

    USA Today reports that there is a segment of the traveling public that makes decisions about what hotel to stay in by finding out where the closest Whole Foods, Trader Joe's or other specialty food store is.

    Among the reasons for using such criteria are food allergies or dietary restrictions, and the desire to buy the same organic/specialty foods that they buy at home.
    KC's View:
    My needs are less esoteric.

    I look for nearby major league or minor league baseball stadiums. Or good brewpubs.

    Published on: May 16, 2012

    Amazon put out a press release yesterday offering its list of the nation's best-read cities, based on sales data of all books, magazines and newspapers in both print and Kindle format since June 1, 2011...and the winners, in order, are:

    • Alexandra, Virginia
    • Cambridge, Massachusetts
    • Berkeley, California
    • Ann Arbor, Michigan
    • Boulder, Colorado
    • Miami, Florida
    • Arlington, Virginia,
    • Gainesville, Florida
    • Washington, DC
    • Salt Lake City, Utah
    • Pittsburgh, Pennsylvania
    • Knoxville, Tennessee
    • Seattle, Washington
    • Orlando, Florida
    • Columbia, South Carolina
    • Bellevue, Washington
    • Cincinnati, Ohio
    • St. Louis, Missouri
    • Atlanta, Georgia
    • Richmond, Virginia

    In addition, the survey found that Berkeley topped the list of cities where people ordered the most Travel books, Boulder has the most buyers of Health, Fitness and Diet books, Alexandria had more people ordering Romance books, and Cambridge was tops when it came to people ordering books about Business and Investing.
    KC's View:

    Published on: May 16, 2012

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

    • Kroger has been named as the 2012 recipient of the prestigious Black Pearl Award for advancing food safety and quality by the International Association for Food Protection (IAFP), which names one company annually for its efforts to advance food safety and quality through consumer programs, employee relations, educational activities, adherence to standards, and support of the goals and objectives of the IAFP.

    ClickOrlando.com reports that Walmart has begun a hardball ad campaign in Florida, suggesting that Publix shoppers can get lower prices on the same times if they were just to shop at Walmart. While the story says that a price check indicates that this is a reasonable claim, once one factors in coupons and BOGO offers, Publix is more than competitive with Walmart on price.

    • The Napa Valley Register reports that the 130-year-old Oakville Grocery, closed for renovations since January, will reopen for business on May 22.

    According to the story, "Leading the kitchen and overseeing the market’s revamped culinary program is rising star Chef Jason Rose, formerly of Ram’s Gate Winery in Sonoma ... Chef Rose’s new menu will feature seasonal prepared foods, made-to-order sandwiches and salads, breads, cheeses, charcuterie and baked goods. The ingredients are sourced from nearby farms, including Rudd Farm and Orchards on Mount Veeder.

    "The new market will also offer an espresso bar, with an option for ordering coffee from a take-out window at the front of the store, and an ice cream counter with cones and cups of Three Twins organic ice cream.

    "Neighborhood wines are available for purchase by the bottle and the glass. Other products for sale include local olive oils and vinegars, mustards, handmade preserves, candies and other specialty foods. Just-picked fruits and vegetables, all sourced from Rudd Farms, will be for sale at the Farm Stand outside the market."

    I'd just like to say that the world is a better place with a place like the Oakville Grocery in it. Simple as that.

    • The Detroit News reports that Kellogg's has announced that "it will refresh its brand, introducing an updated version of its classic logo, adding a consumer-friendly website and placing a heavier emphasis on the importance of breakfast ... Kellogg has launched www.kelloggs.com to connect with younger consumers and will add a new tagline — "Let's Make Today Great" — which the company says reflects the reasons consumers choose Kellogg's brands."

    • The Associated Press reports that Nash Finch's U Save Foods subsidiary has agreed to buy the 18-unit, Omaha-based No Frills Supermarkets. Terms of the deal were not disclosed.
    KC's View:

    Published on: May 16, 2012

    • Supervalu announced yesterday that Tim Lowe, current president of the company's SHOPPERS chain, will join the company’s merchandising organization as senior vice president, reporting to Janel Haugarth, executive vice president of merchandising and logistics. Lowe will transition to this role over a period of time, continuing to also lead SHOPPERS until a new president is named.
    KC's View:

    Published on: May 16, 2012

    ...will return.
    KC's View: