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    Published on: February 12, 2013

    by Michael Sansolo

    LAS VEGAS - Bryan Silberman, the always-insightful head of the Produce Marketing Association (PMA), offered an interesting perspective on food trends Monday at the National Grocers Association (NGA) show here.

    Silberman noted that many emerging food tastes start in the restaurant industry and migrate to supermarkets. It makes sense and it’s an important reason for supermarkets to always keep a competitive eye targeted at restaurants because like it or not, that’s the competition for the food dollar.

    Just understand that the competition cuts both ways. Sometimes it cuts really close.

    For years I’ve written and done speeches about the importance of winning back family mealtime, with all the benefits that has for the retail food industry and American families. I’ve cited countless statistics about the benefits family meals have on health—and way beyond physical health. As repeated studies have shown, teens in families that eat together have better grades, better habits and are better connected to their parents.

    Turns out that someone was listening…McDonald’s!

    I recently caught a radio ad with McDonald’s talking about family breakfast time. It wasn’t just about food. It was about the teen-age daughter disclosing the name of her new boyfriend and grandma talking about her week and…well, you get the picture.

    That is exactly the dynamic of family meals. And that’s what supermarkets should be talking about.

    Now, I have nothing against McDonald’s. Especially when I’m on the road I know I can count on the Golden Arches for two things: really fast food that tastes the same every time. I admire the company’s dedication to detail, plus its endless search to find new ways to make the same old meal seam interesting. I mean, really is it such a big thing that the McRib is back again?

    And no doubt there are families who for countless reasons (economic and convenience, primarily) find McDonald’s the best place for food when they have no time to cook. You may disagree on their choice, but McDonald’s value proposition is simple and undeniable.

    But the family meal belongs elsewhere. It belongs at home. For lots of reasons.

    First, restaurants are distracting. Have you ever tried to have a conversation in McDonald’s? It’s noisy, distracting and remember, the goals is to get out quickly. I’d stay to use their free Wi-Fi, but a conversation isn’t happening. And it gets more challenging at slightly nicer restaurants that these days seem decorated with endless television sets turned to various sporting events.

    Second, family meals are about compromise. At my family table as both a child and a parent we had simple rules on food choices. It all started with whatever my mom or wife (I’ve been blessed with the company of terrific cooks) made. Substitutions were possible only after you tried what you were given and those substitutions were limited.

    At restaurants, we all get what we want. We’re eating at the same time, but really not together.

    Third, while many restaurants now feature calorie counts (and isn’t that a way to quickly lose your appetite) it’s hard to get a more nutritious or economical meal than one made at home. Sure, the McDonald’s value menu is a tough proposition to beat, but there are countless dishes that can be made easily, cheaply and more healthily at home.

    Now, certainly not everyone has the time, skill or inclination to cook, but that’s the need the supermarket has to keep addressing. Stores need to talk to shoppers about the fun, taste and ease of getting meals on the table. Even though this has been a priority for years—and much progress has been made—it’s a subject that needs constant attention.

    Because McDonald’s, which is having significant challenges maintaining or growing sales at the moment, just upped the ante by talking about the dynamic that is family mealtime, with the hijinks, conversations and whatever else makes it memorable.

    The challenge has been issued … now how will you answer? Remember, when it comes to competition, you don’t ever get a break today.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: February 12, 2013

    Notes and comment from the Content Guy

    LAS VEGAS - There were a couple of sessions yesterday at the National Grocers Association (NGA) convention here that struck me as pointing to the enormous challenges facing all retailers, but especially the independent grocer segment.

    One came in a workshop that seemed primarily designed to motivate grocers to get involved in an NGA initiative that will look to replicate some of the data analysis functionality offered by dunnhumby and used by retailers such as Tesco and Kroger.

    Gary Hawkins, of Hawkins Strategic, said that retailers need to find ways to engage consumers by being relevant to their specific needs and wants, that the next big retailing battle will be over which companies can do this best, "and what is fueling this battle is data," which will allow retailers to offer consumer-specific promotions. Kroger, Hawkins noted, does precisely this by using dunnhumby-generated data, which has allowed it to have 37 consecutive quarters of same-store sales growth; it has more than 300 full-time data crunchers analyzing Kroger sales data to find the best ways to appeal to shoppers.

    Kroger, he said, is sending out personalized promotional pieces to 10 million shoppers on a quarterly/seasonal basis, and is getting a 66 percent response rate. "They are weaponizing big data," he said.

    "As Kroger gets more of the high-spending shoppers who are more profitable, you may be getting...the lower spending shoppers who are less profitable," Hawkins said.

    In addition, he suggested, marketing/promotion money offered by manufacturers is moving away from old-world, mass-audience programs and moving toward more targeted initiatives. "You can't blame the brands for this," he said. 'This is all about economics."

    Later in the day, in a general session panel discussion, Natan Tabak, senior vice president at Wakefern Food Corp., made a similar point. Speaking about mobile marketing, he said, "You can't just send them information they don't want." Once you get consumers to opt into these programs, he said, it is important only "to send them relevant information." And, he argued, this will become even more important as the next generation of shoppers comes of age, because they are used to systems that are targeted and relevant.

    Tom Furphy, CEO/Managing Director of Consumer Equity Partners, agreed, and suggested that there are technologies coming online that will make targeting even more feasible. Now, he said, smart phones can contain chips "that learn and learn and learn," and will allow app developers to create functionality that will build on how people use their smartphones, what they buy and look at with them, and even where they go. "It'll blow you away," he said.

    The broad message, it seems to me, is that retailers of all stripes need to be thinking carefully about the mass merchandising/mass marketing efforts of the past, and doing whatever they need to do in order to create more focused targeting mechanisms that can compete more effectively with the kind of data analysis being done by retailers such as Kroger, Tesco, and, of course, Amazon.com.

    The primary battle will not be fought between bricks-and-mortar retailers and e-commerce, but between those who have and use data in relevant ways, and those who do not. A kind of new world thinking has to take place ... and those who do not embrace such an approach may find themselves to be out of synch with their shoppers.

    Which is not a good place to be.

    Other news from NGA...

    • The announcement of the 2013 Creative Choice Contest winners took place, with the "Best of Show - Advertising" award going to Mollie Stone's Markets of Mill Valley, CA, for its "Shop Local" ad.

    The co-recipients of the 'Best of Show - Merchandising" award were Harmons Grocery of West Valley, UT and The Fresh Grocer of Drexel Hill, PA. Harmons promoted its 16th location opening with the "Harmons City Creek Grand Opening" campaign, while The Fresh Grocer unveiled a new, health-focused supermarket field trip program to educate grade school students on healthy eating.

    • Also announced were the winners of the annual Food Industry University Coalition Student Case Competition. St. Joseph's University won first place, with participants Mark Lang (faculty advisor), Lauren DeLeon, Norene Drici, Edward Fagan, Mary Sisti, and Devin Tanney taking home a combined $8,000. Runner-up California State University - Fresno received $2,000.
    KC's View:

    Published on: February 12, 2013

    by Kevin Coupe

    The so-called "smart watch," which could have all sort of wearable technology designed to further the interweaving of technology into our everyday lives, may be on a drawing board.

    And to make the whole idea even more intriguing, the drawing boards on which it may exist are said to be at Apple headquarters in Cupertino, California.

    According to a New York Times story, people in the know are saying that "Apple is experimenting with wristwatch-like devices made of curved glass ... Such a watch would operate on Apple's iOS platform, two people said, and stand apart from competitors based on the company's understanding of how such glass can curve around the human body.

    "Apple declined to comment on its plans. But the exploration of such a watch leaves open lots of exciting questions: If the company does release such a product, what would it look like? Would it include Siri, the voice assistant? Would it have a version of Apple's map software, offering real-time directions to people walking down the street? Could it receive text messages? Could it monitor a user's health or daily activity? How much will it cost? ... Such a watch could also be used to make mobile payments, with Apple's Passbook payment software."

    The story suggests that experts believe that Apple has all the necessary technology available to it in order to make an iWatch work, and that investors would embrace such a project enthusiastically, since there seems to be a growing consensus that an iWatch will replace the iPhone eventually.

    Apple is not alone in this; Google, for example, also is working in the field of wearable technology, including eyeglasses that include a computer screen built into them.

    Can't wait. I may be a digital immigrant, but I think this would be totally cool. And a total Eye-Opener.
    KC's View:

    Published on: February 12, 2013

    The Tampa Tribune reports that Publix Super Markets will launch a digital coupon system this week that "lets shoppers browse hundreds of relatively higher-value coupons online, virtually clip them out, and redeem the discounts automatically at the checkout lane."

    According to the story, shoppers will register online to participate in the program, and use their phone numbers for identification purposes; the company has to use phone numbers since Publix does not have a card program, which ordinarily would be used to link customers to the coupons redeemed.

    The company emphasizes in the story that this is designed to supplement, not replace, traditional paper coupons.
    KC's View:
    The digital coupons may not replace paper coupons for the moment, but it strikes me as totally inevitable that paper coupons - especially the mass mailing of FSIs and coupon packages that offer often irrelevant discounts to people who may or may not be shoppers at a particular store - are going away. (See the references to what Kroger is doing in the "Reporting In" piece, above.)

    Published on: February 12, 2013

    Bloomberg Business Week reports on a new study from the Hudson Institute suggesting that the sales of high-fat items such as cheeseburgers and fries at US fast food restaurants are falling, with people appearing to choose lower calorie items: "Sales of all higher-calorie foods fell by 1.3 billion orders from 2006 to 2011, according to the report. Orders of fries dipped by 1.9 percent at the largest fast food chains."

    However, it needs to be noted that "high calorie" and "low calorie" are relative, since McRib and Egg McMuffin sandwiches make the "low calorie" cut under the rules of the study.

    The story notes that "calorie consciousness will likely rise as restaurants with more than 20 locations will be required to post calorie counts, probably as of 2014, under the Affordable Care Act."
    KC's View:
    Say what you want about the Affordable Care Act, which has plenty of problems with it. Anything that mandates the posting of calorie counts in fast food restaurants is a good thing. It doesn't tell people what to eat, but it gives them more data so they can make more informed decisions.

    Published on: February 12, 2013

    In the UK, the Telegraph reports that Tesco has begun a new service called "Clubcard TV," which offers the streaming of movies and TV programs - essentially, the same service that Netflix offers - for free to people who are members of the company's Clubcard program.

    According to the story, "Clubcard TV is a joint offering from Tesco Clubcard and blinkbox, the movie streaming service which Tesco bought 80 per cent of in 2011. The service is currently in beta, a software development stage, but customers who have a Clubcard are able to sign up now to watch."
    KC's View:
    What I like about this is that Tesco seems to be taking a page from Amazon's book. Amazon keeps adding features to its Prime program without raising the price, because it knows that cementing those shopper relationships has enormous long-range implications. And that's exactly what Tesco is doing.

    Published on: February 12, 2013

    Slate.com has a piece about the "fresh wars" that are taking place among fast food chains. Here's how the site frames the story:

    "The Fresh Wars have advertisers, marketers, and chefs embroiled in a battle for the title of freshest American fast food—and for the business of an increasingly sophisticated and conscientious populace of eaters. Taco Bell vs. Chipotle is just the start. The tagline "Eat Fresh" has helped Subway eclipse McDonald's as the world's largest fast-food chain. But Arby's crusade to "Slice Up the Truth About Freshness" aims to sow doubts about Subway's food sourcing while wooing customers with meat sliced on-premises. Meanwhile, Domino's Pizza has spent more than three years and untold millions reinventing its pizza and its image as models of quality and transparency, a gambit that has at least two high-profile competitors following suit.

    "The skirmishes emphasize the extraordinary value of one abstract concept for an industry desperate to capitalize on health and sourcing trends without actually having to invest in high-quality ingredients. Fresh doesn't have to be low-calorie or even especially nutritious—a burrito with ingredients prepared on-site at Chipotle may pack three times the calories of a burger. Nor does fresh require pathologically locavorian supply-chain standards: As Arby's has revealed, a sandwich from Subway might contain cold-cuts processed, packaged, and shipped from a centralized facility in Iowa. Better yet for retailers like Taco Bell, Domino's, and Arby's, the mere implications of freshness can be sold at a premium to new customers who otherwise might have avoided those chains' wares altogether. The only unabashedly pure thing about the concept of fresh is its subjectivity."

    The entire story can be read here.
    KC's View:
    In some ways, this story builds on the themes sounded by Michael Sansolo in his column, above ... how the battles for share of stomach are becoming more intense, with fast feeders looking to grab credit for characteristics (freshness? family togetherness?) that just a few years ago never would have been ascribed to such formats.

    Published on: February 12, 2013

    Publishers Weekly reports that "with e-books’ share of unit sales rising from 14% for the first nine months of 2011 to 22% for the same period in 2012 ... Amazon’s share of all unit book sales rose to 27% at the end of September 2012 from 21% during the previous year."

    According to the story, "The gain in market share of e-books in the period came at the expense of the three print categories. Mass market paperback and hardcover each lost three percentage points while trade paperbacks’ share fell two percentage points."
    KC's View:

    Published on: February 12, 2013

    The BBC reports that Tesco has discovered that it has been selling private brand Everyday Value Spaghetti Bolognese that contains 60% horsemeat, leading Tesco Group technical director Tim Smith to say: "The frozen Everyday Value Spaghetti Bolognese should contain only Irish beef from our approved suppliers. The source of the horsemeat is still under investigation by the relevant authorities."

    The product has been pulled from shelves.

    The horse meat scandal continues to gain momentum, as it has spread to at least 16 European countries and there are concerns that this is not accidental contamination but rather a criminal conspiracy.
    KC's View:
    There are some folks who are saying that this is much ado about nothing, that there's nothing wrong with horse meat, and that the French (especially) have been known to eat a lot worse stuff.

    Maybe this is true, but it misses the point. Horse meat isn't beef. The labels said the products had beef in them, not horse meat. And this is just a colossal screw-up at almost every level, one that threatens the sense of security about the foods that people buy and consume in Europe.

    Published on: February 12, 2013

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

    • The New York Times reports on the move toward digital price tags in supermarkets, which will allow retailers to "go completely paperless by putting small, battery-powered digital price tags on the shelves. Price changes can then be received wirelessly from the store’s network, ensuring that the price displayed on the shelf and the one called up at the checkout counter are the same."

    Digital price tags may actually allow retailers to do something potentially more important than maintain pricing integrity between the shelf and the checkout lane. They will allow retailers to engage dynamic pricing, able to change prices with close to the same facility that Amazon and other online retailers do. One can even imagine that such tags would display one price for "regular" shoppers, and a lower price for "best shoppers" who have earned it, and who have chips in their smart phones (or smart watches or other form of wearable technology) that identify them to the digital price tag system.

    • The Wall Street Journal reports that "twenty-one U.S. companies have reduced salt content in pre-packaged or restaurant foods as part of an effort led by New York Mayor Michael Bloomberg to slash the amount of sodium in the national diet.

    "The National Salt Reduction Initiative, a partnership of more than 90 city and state health authorities and organizations launched in 2008, is trying to cut sodium by 25% in packaged and restaurant foods by 2014. The goal is to reduce national sodium intake 20% by then. The effort has led 24 companies that distribute food nationwide to pledge to reduce the sodium in some of their products."

    Food Safety News reports that the Obama administration is warning that "if Congress allows the sequester to kick in on March 1, cuts to food safety would be one of the 'most damaging' consequences of the automatic budget reductions ... The analysis by the Obama administration’s Office of Management and Budget said the U.S. Food and Drug Administration could conduct 2,100 fewer inspections at domestic and foreign food facilities and the U.S Department of Agriculture’s Food Safety and Inspection Service could have to furlough all employees for approximately two weeks to meet the across the board budget cuts."

    Count your horses. Heaven knows what'll be in our spaghetti sauce if the sequester happens.

    • The Puget Sound Business Journal reports that "Starbucks Canada says it will undergo the largest expansion this year in the company’s 26-year history, with plans to open more than 150 stores across the country ... With more than 1,200 locations, Canada is Starbucks’ biggest international market."
    KC's View:

    Published on: February 12, 2013

    Responding to yesterday's story about the political discussion taking place at the NGA Show in Las Vegas, by Erskine Bowles and former Sen. Alan Simpson, one MNB user wrote:

    I was politically active in my younger days and was involved enough to get a close look at the gerrymandering of Congressional Districts.  The way to solve the problem—if you DON’T want as a homogenous group of voters—is to create a standard ratio between the circumference of the boundary to the area it defines.  They will never do it, but it would work.

    From another reader:

    At least these guys know that the $16 trillion debt is a problem. It seems like the folks in charge in DC pay lip service to it, but cut last minute deals that protect their cronies. The most sensible thing I've heard is an across the board cut of ALL gov't programs. Social Security, Medicaid, WIC,  Solyndra "wind down expenses", tax subsidies for the Bush and Clinton Libraries …everything. Everybody in the pool. No exceptions. Short of that, it becomes a lobbying feeding frenzy with political pals winning out over the less well connected. And those would have to be real cuts…not "reductions in the rate of growth" which is what the pols now call cuts. 




    The other day, I expressed my distaste for Brussels sprouts, which got some blowback from some MNB users.

    Those comments prompted MNB user Mike Burrington to write:

    Bryan Silbermann hit the nail on the head when placing much of the blame for the bad rep of Brussels sprouts at the feet of boomer parents. Despite my Mom’s best attempts to get us to like “baby cabbages”, I was firmly in your camp (and largely remain there) because of how they were cooked – except for the attached recipe. I estimate we have served this dish to more than 30 people over the years (and shared the recipe with far more) with virtually all of them agreeing the “Veggie Crack” title is well deserved. The WORST response from an adamant Brussels sprout hater was, “Well, I don’t love it, but I could eat them this way now & then.”

    BTW, I really like seeing Bryan’s recognition that an influencer such as yourself must become a Brussels sprouts convert. It fits what I know of his personality and I expect no less from the CEO of the Produce Marketing Association…


    Thanks for the recipe. I'll think about it. But no guarantees.




    Lots of reaction to the decision by the US Postal Service to eliminate Saturday delivery.

    MNB user Sharese Alston wrote:

    Is Friday so far away from Saturday?  If their business model can’t adapt to a one day delivery difference, they should close shop anyway.  I totally agreed with you in regards to cutting to 3-4 days a week.  I’m a 32yo working mom and full-time student, and if I check my mailbox 3-4 times a week, I’m either on vacation or spring break.  I could care less what’s in my mailbox because the important stuff typically comes in my email.  Except for stuff from slow-changing organizations like the IRS, student loan people, or anything else remotely government related.  I hate paper.  They can stop mailing it to me altogether.

    MNB fave Glen Terbeek wrote:

    I suggest that the USPS goes to 1 delivery per week.  It would save 5 trips to the recycling bin weekly.

    From another reader:

    The USPS needs to figure out what they can do with the enviable position of being able to hit, theoretically, every house in America, every day. Which companies industries can benefit from this service, and figure out a business model that drives efficiencies in distribution for the potential company, and profit for the post office.

    Plus I’m sure there’s plenty of crazy, unsustainable union benefits, and pension packages that have a lot to do with the lack of profitability.

    Not sure when these unions are going to realize that you can’t have someone contribute 10% a year for 30 years, and then let them retire and pay them for the next 25-40 years (on the taxpayers back).


    From another reader:

    I agree with what the USPS is doing, I feel that the the people that are against the Saturday delivery cutback should make certain that from now on, that they send all bills thru the mail, versus paying them on-line, also the complainers should also stop sending e-mails and start sending  all correspondence by mail , the old way, this would help out the USPS profits. If people are not willing to do this, then these same people should stop complaining. This is reality, the USPS is losing money and has lost lots of business and profit to the internet, so have the complainers stop the whining.

    And another:

    The USPS could go to every other day to residential addresses - Monday, Wednesday, Friday on some routes, Tuesday, Thursday, Saturday on others.  Commercial addresses and PO Boxes could continue with every day delivery.  There would have to be some adjustments, of course, for holiday weeks.  But what mail do people really get that couldn't wait another day?

    And still another:

    If the Post Office was a private business, Saturday delivery would have been dropped years ago. Six day schedule is what drives overtime.
     
    No one needs Saturday delivery, ditto PO office open (to buy stamps?) or Saturday package deliver either. Somehow, our society has managed to survive with the DMV open 5 days a week.





    Regarding our story about how research shows that the move to reusable shopping bags is actually creating some disease problems, because people are not washing their bags.

    One MNB user wrote:

    While it’s a great idea to wash the reusable bags to prevent the spread of disease, that puts responsibility on the general public and that seems to never work.

    Another reader chimed in:

    I faithfully bring my reusable bags and wash them......but I would be interested in an environmental impact study of washing the bags, use of electricity, water, and yes I use biodegradable soap, trying to be a good guest on earth so long as I am here, but.....what if we find the environmental impact zeros out the benefit?

    When I lived in Hawaii, the "conscientious" among us recycled faithfully, then we learned that the recycling program took the bottles, Plastic and paper, shipped it to the mainland, as we call it, for processing.  The fossil fuels used in shipping the weight of the recyclables far outweighed the value of recycling.... But our motives were right, our goals were to treat the earth better.....so we got to pat ourselves on the back, right?

    On a similar topic, people are growing rooftop gardens in downtown LA, and studies show the use of water, the evaporation compared to food production far outweighs any environmental benefit.....of course, southern CA, if we allowed it to be truly "natural" would be an uninhabitable desert, and the population here would be a fraction of what is here now.  No one wants to mention that elephant in the room, except the farmers up north who are lacking local water because we are siphoning it off down south to support the completely unnatural population here. And out to Vegas, which is also an uninhabitable desert, but for the redirected water.

    So.... it's more complex than the feel good action of bringing your own bags.  My premise on all of this, we must be open to truth and facts, because things aren't always as they appear from the spin we currently get from media channels.

    But, I still bring my bags....wondering as I  do so, if it's making an atom of difference...


    Another MNB user offered:

    KC...we take the other view...recycle the damn plastic bags ! Doesn't seem very hard now does it? ....and on the plus side...you don't have to waste water washing your reusable bags that were made in China which ultimately end up in the landfill..!  Recycling is readily available in every major chain and more and is still the best solution after all the facts are in...




    And, regarding some criticism of a program developed by CEO Jim Donald to reinvigorate the Extended Stay American hotel chain, MNB user Bob Anderson wrote:

    I would tell you from reporting to Jim Donald at Walmart, that Jim has a great passion for his job, for the associates and customers. This maybe the reason why Sam Walton personal hired Jim after seeing all of these traits and more in him. Perhaps if Mr. Schillo had the chance to have a cup of coffee or a run with Jim, he too would be in the Jim Donald camp.
    KC's View: