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    Published on: March 25, 2013

    by Kevin Coupe

    There is a fascinating video piece on FastCompany's website that looks at a German production company called The Marmalade that specializes in the creation of what is called "food porn," which might include "the surreal images of a stream of milk chocolate colliding with dark chocolate in midair, or a perfect, effervescent beer hitting a frosty glass with all the force of class-five whitewater rapids."

    It is worth watching, just for the fun of it.

    But it also strikes me that there are a couple of business lessons inherent in the video.

    One is the fact that to a great degree, The Marmalade actually creates many of the tools that allow it to make these videos and commercials. In other words, its people are not satisfied with simply using the tools to which everybody has access ... they recognize that they have to change the nature of the game if they are going to dominate the competition. That's a philosophy, I think, with broader applications.

    There's also a comment in the video about how there are two critical factors in creating these videos - physical tools and digital tools, each of which plays a role, and neither of which would be as effective without the other. It essentially is about the inter-connectivity of high-tech and high-touch.. Which also is a lesson worth taking seriously.

    Check it out. It is an Eye-Opener.
    KC's View:

    Published on: March 25, 2013

    On Friday, Supervalu announced several changes to its executive roster, just one day after the company finalized the sale of five of its retail banners to Cerberus-owned AB Acquisition LLC. And, the company announced that Janel Haugarth will continue as executive vice president and president of independent business and supply chain services, overseeing the company’s wholesale and distribution business that is expected to account for nearly 50 percent of Supervalu’s annual revenues after the transaction closes. 

    The changes include:

    • Randy Burdick has been named executive vice president, chief information officer, responsible for Supervalu's information technology infrastructure and personnel, as well as the shared service/contact center organization. He joins Supervalu after spending the past eight years as chief information officer at OfficeMax.  Burdick replaces Kathy Persian, senior vice president and chief information officer, who will leave the company.

    • Michele Murphy has been named executive vice president, human resources and corporate communications for the company, overseeing all human resources functions, labor relations and corporate communications. She has spent the last seven years as Supervalu’s senior vice president of corporate human resources and labor relations.  Murphy replaces Dave Pylipow, executive vice president, human resources and corporate communications, who will leave the company at the end of April.

    Supervalu also said that J. Andrew Herring, executive vice president, real estate, market development and legal and a 15-year Supervalu veteran, will depart the company.
    KC's View:
    I know from a lot of the email I've been receiving that folks at Supervalu are on tenterhooks waiting to find out what's going to happen this week and next, as the new Supervalu leadership makes staffing decisions and many feel will result in broad downsizing. I'm certainly not arguing that changes don't need to be made, but how Supervalu handles this - and lets its people know that they are valued and have value - will say a lot about the company and its prospects.

    As one MNB reader wrote:

    Next week is when the employees at many SV locations(mainly Minneapolis) will find out if they are still employed or not. The layoffs will be massive as the company is now "rightsizing". Next week, will be a very interesting week,and please  keep reporting on what is sent to you, we need to know someone still cares.

    Absolutely.

    Published on: March 25, 2013

    There is a story on MapLight.com, a website that describes itself as "a nonpartisan research organization that reveals money’s influence on politics," saying that there is language in the 2013 continuing resolution preventing a government shutdown that essentially "stripped federal courts of their power to restrict the use of genetically modified crops that they find have not undergone a complete environmental impact assessment from the USDA. The rider essentially eliminated the only legal tool environmental advocates had for slowing down or stopping the use of new genetically modified crops."

    According to the story, the bill passed the Senate "by a vote of 73-26 and the House today by a vote of 318-109. Sec. 735 was inserted in the bill when it was in the Senate Appropriations Committee, although so far no member of the Committee has publicly acknowledged putting it in."

    Where it gets interesting is where MapLight offers "analysis of campaign contributions to members of the 113th Congress from the political action committees of several organizations supporting the use of genetically modified crops, since January 1, 2009," based on data provided by the US Federal Elections Commission (FEC), and finds that "current members of Congress have received $7,450,434 from the PACs of these organizations," and that "members of the Senate Appropriations Committee have received $371,925 from the PACs of these organizations."
    You can read the donation breakdown here.
    KC's View:
    I'm not sure what I find scarier - the implication that our government may be for sale (which we all knew, but hey, seeing the numbers still can be alarming) or the fact that when I read Sec. 735 of the continuing resolution, I never would have guessed that this has anything to do with genetically modified crops.

    (Here is a link to the text of the continuing resolution. You see if you can figure out where it talks about genetically modified crops and the federal court system. Though the notion that legislation would be written in an obtuse way also is hardly a surprise.)

    But on reflection, I guess I find it scarier that government is for sale. Though in this case, the fact that nobody is taking "credit" for the rider, would suggest something far more frightening about government officials - that they themselves have been genetically modified to have no backbone and no cojones.

    Published on: March 25, 2013

    eMarketer.com has a report that looks at the depth and breadth of internet usage in the US, finding that "75.7% of the population goes online at least monthly, and penetration is even higher among younger demographic groups." The report also looks at mobile internet/phone usage as a growing piece of this pie.

    "Among Gen Xers, for example - defined as people born between 1965 and 1980 - 88.8% were monthly internet users as of December 2012," according to eMarketer. "Gen Xers are also highly connected on the go, with nearly 95% using mobile phones, and 60.3% of that group using smartphones. In 2012, 38.4 million Gen Xers, or 62.2% of Gen X mobile users, used the mobile internet at least monthly. That accounts for three in 10 mobile internet users in the US."

    The study also shows that 93.2 percent of Millennials are using the internet at least once a month, and that "92.3% used a mobile phone in 2012, among whom 63.2% used the mobile web and slightly fewer used smartphones."

    As for Baby Boomers, they "do not reach quite such high levels of activity as their younger counterparts, but they aren’t far behind. Nearly eight in 10, or 59.9 million baby boomers, were regular internet users in 2012 - and they were even more likely to use mobile phones, though mobile internet and smartphone uptake were slow compared to other groups." The study says that mobile web and smartphone penetration is expected to pass 50 percent in 2013.
    KC's View:
    Seems to me that if marketers are smart, they ought to be looking at these trends and developing plans for where things are going to be in a few years. If the vast majority of people are going to have and use smartphones by 2018, let's say, there ought to be little problem with developing labeling and informational programs for consumers that build on this availability.

    Published on: March 25, 2013

    The website called AndNowUKnow.com reports that researchers at the University of California - Los Angeles have "produced genetically engineered tomatoes to produce a peptide that mimics the actions of good cholesterol," and found that "mice that were fed these tomatoes in freeze-dried, ground form had less inflammation and plaque build-up in their arteries."
    KC's View:
    I wouldn't know a peptide from a popsicle, but I'm perfectly willing to accept the notion that these scientists have done something good. I daresay that if these tomatoes were sold in a produce department, or used as an ingredient in a product, and were marketed as being engineered for positive health benefits, a lot of people would be willing to eat them and even seek them out. I easily could be one of them.

    At the same time, some people would want nothing to do with them - for the same reason that some people only eat organic, and other people don't give a damn.

    Which is why I continue to believe that such products should be labeled, and then explained to the shopper in a specific and transparent way. Let the consumer make a judgement, based on information. To resist such labeling, I think is both lazy and deceptive.

    Published on: March 25, 2013

    Starbucks last week did something it never had done before - it issued a Groupon offering consumers a $10 gift card for five dollars. More than 100,000 were sold in short order, and the Groupon was listed as "sold out" ... but not before it crashed the Starbucks page on Groupon because of high demand.

    According to Reuters, company spokesperson Linda Mills said that "it was just a really great offer for us to be able to give to our customers."

    The story notes that last year Starbucks did similar deals through Google Inc. and LivingSocial.
    KC's View:
    I have to be honest here - I have no idea why Starbucks, which would appear to be a company that has little problem generating customer traffic, which would seem to be a common characteristic among the companies that use services like Groupon and LivingSocial. On the other hand, if you're planning to open 1,500 stores in the US over the next five years, which is what Starbucks says it plans to do, maybe there is no such thing as enough traffic.

    Published on: March 25, 2013

    Well, here's one way for a retailer to get rid of a product that it has too much of and that not enough people wanted.

    Give it away.

    The Chicago Tribune reports that Barnes & Noble which has said that its Nook e-reader business has been so soft that it may try to sell it, plans to give away Nook Simple Touch e-readers to anyone who buys a Nook HD+ tablet, a sign, the story says, " it may still be grappling with excess inventory of the unpopular e-reader."
    KC's View:
    Y'think?

    The real question is whether getting an item for free that people didn't want will serve as an incentive for buying a product that also presumably has been experiencing soft sales.

    Reminds me of the retailer who once told me that when he had an item that he couldn't move to save his life, he decided to fix the problem by selling two for the price of one, only to realize when that didn't work that if people didn't want one, they almost certainly did not want two.

    I actually sort of feel bad for Barnes & Noble. This would appear to be one of those cases when coming late to the party just isn't good enough. The Nook got some decent reviews, and could have been a way to blunt the competitive dominance of Amazon's Kindle and the Apple iPad. except in this case, it didn't work because those products were so well-entrenched and especially Amazon's Kindle strategy was so well-developed.

    Sometimes, better late than never works. But these days, the speed at which game-changing companies can affect the marketplace makes it important not to be too far behind the wave, because you may not be able to catch up.

    This is what happened to Barnes & Noble. Other retailers in other venues should learn the lesson well.

    Published on: March 25, 2013

    • The San Francisco Chronicle reports that "world wine production dropped 6 percent in 2012 to the lowest level in at least 37 years on smaller grape crops in France, Spain and Argentina," that "output fell to 6.63 billion gallons, a drop of about 6 percent from 2011," and that "bulk white-wine prices in France, the world's largest producer, jumped 45 percent since the start of August, while those for bulk reds advanced 17 percent."

    The numbers come from the International Organization of Vine and Wine, which noted that "vineyards in France, Spain, Italy and Argentina all suffered weather damage last year, including hail and drought. Last year's production was the lowest on record going to back to 1975."

    • Tonight's "The Late Show with David Letterman" will feature the winner of the National Grocers Association (NGA) 2013 Best BaggerContest - Andrew Borracchini of Metropolitan Market at Admiral, in Seattle, Washington.

    The appearance of the Best bagger champion on "Letterman" has become an annual event, the final reward at the end of what is described as "a year-long nationwide program in which the top grocery baggers in the country compete for prizes and the title of 'America's Best Bagger.'" At the annual NGA convention in Las Vegas, contestants were judged on speed,bag-building technique, weight distribution between bags, and style, attitude, and appearance.
    KC's View:

    Published on: March 25, 2013

    On Friday, there was an MNB story that read:

    Reuters reports that in a filing with the US Securities and Exchange Commission (SEC) this week, it said that "fixing its performance could take more time than it initially believed and suggested that any change in its strategy could be expensive.

    Now, I know many of us in the MNB community are on the same wavelength ... but that doesn't mean I should expect you to read my mind. I never said in that story what company "it" referred to ... in fact, the company was JC Penney.

    Sorry about that. Sometimes my fingers go faster than my brain.
    KC's View:

    Published on: March 25, 2013

    Got a number of emails responding to last week's piece about the coming end of Tesco's Fresh & Easy experiment in the US.

    One MNB user wrote:

    One of Tesco's big mistakes was not learning from all the other EU food retailers that entering the US market is not that “easy” and business here is not done the same way as over there. Having worked with many EU based food manufacturers and retailers I can tell you that they really don’t get the US, or if they do, think they can change it to their style of operations, forgetting about the size, difference in population and culture, brands vs. store brands and the list goes on. Said way back at the beginning, they wouldn’t make it.

    And another:

    Tesco’s failure in the U.S. points to one of the faults of marketing in the 21st century- what people say they want is not what they actually want.  Additionally, measuring the responses only from people who are willing to provide information ignores the vast, so-called “silent majority” who don’t provide marketing input. 

    A great example of U.S. food marketing success is Shop Rite/Wakefern in the Northeast.  Stores are locally owned and decision makers know instinctively what their shoppers want.


    The argument was made last week that Tesco's Fresh & Easy effort was one of the biggest flops in recent food retailing history, which led one MNB user to write:

    I would put the purchase of Dominicks by Safeway right there with the Tesco flop.   Safeway purchased Dominicks for about 1.6 billion dollars and then tried to sell it off a few years later and could NOT command even 500 million dollars for a loss of over ONE BILLION DOLLARS.  what Safeway has done with a vibrant competitive chain is a travesty.  and Safeway made many of the same errors that Tesco delivered.  Safeway did please one group…..Jewel and Supervalu!!

    And another MNB user chimed in:

    Maybe we're finally close to sticking a fork in Fresh & Easy. In my mind it just appeared to be DOA. Small, conveniently located stores with fresh food sounds like a great idea. Tesco's execution seemed awful at every turn. Just the appearance of the stores was the first sign that something was seriously wrong. I fully expect someone to be wildly successful with this kind of store. Tesco just proved to not have a clue about the US market.




    We continue to get email about the CVS decision to establish a new rule for its employees - they have to go through an annual evaluation of their weight, blood sugar, blood pressure, cholesterol and body mass, or pay an annual $600 surcharge on their insurance premiums. And "going forward," the company policy says, "you'll be expected not just to know your numbers - but also to take action to manage them." In addition, employees have been told that they have to stop smoking by May 1, 2014, or have enrolled in the company's smoking cessation program, or will face potential fines and penalties.

    MNB user Peter McNaughton wrote:

    Kevin ,you surprised me when you seemed to miss the obvious tone deafness CVS has displayed toward their employees. Many companies today including my own want this type of information to manage employee health programs with the obvious goal of reducing healthcare costs, but the heavy handed give us the info or we will surcharge you not nearly as effective as perhaps a program where the data is supplied and discounts given to employees premium contributions, for improvement in the numbers. Since that approach was taken with my employer several years ago, company average cholesterol, BP, and BMI numbers have decreased and employees have a positive attitude toward healthcare….or I guess a company can just tell it’s employees give us the info or we will surcharge you…all about the tone.

    Another MNB user wrote:

    Our company, too, has 4 major wellness scores that must be met in order to keep employee's medical insurance contributions to zero.  Fail one or two of those goals and premiums increase a certain amount.  Fail three or four of those goals and a higher premium contribution is required.  This is an annual process, has been so for several years.  Regardless of what some of your readers may say, our company's goal is to have every employee pay zero toward their coverage.

    One of the intended consequences of this process is finding employees each year w/life-threatening scores in blood pressure, cholesterol, and/or glycemic index (smoking is the fourth criteria) that can be treated because the condition is now known (all names are masked to the company).  Even though our company has "Cadillac" insurance, there are still employees who never think of visiting a doctor.  As such, life-threatening conditions go undetected. It is not a stretch to say that our wellness plan has significantly affected specific employee's health in a most positive way.


    And from another:

    Hum, what I don’t get is people don’t want the government in the business, don’t want the employer in the business, don’t want Obama Care, don’t like the high cost of medical care, don’t want to ban smoking, large sodas, the intake of salt, sugar etc… BUT at the same time do little if anything themselves to help themselves, beside be part of a growing deadly health issue that is being passed down to the kids like the federal debt…




    We had a piece the other day about a new Seattle store called Hointer, which sells men's jeans. According to the Seattle Times, at Hointer "designer jeans hang from metal racks attached to the ceiling, their QR code tags easily accessible. Shoppers use smartphones to scan what they like, and a robotic system in the back delivers items to their dressing rooms, where they can then send for different sizes and colors via the Internet. To make a purchase, shoppers simply slide their credit cards through a machine and leave without ever talking to a single salesperson."

    One MNB user responded:

    Regarding your mention of the new men's clothing store called Hointer, I've had the chance to visit it on two occasions and thought I'd offer a few observations. Contrary to its owner's assertion that it is an "ugly duckling" I thought it was actually really cool looking.

    On each occasion there were numerous technological glitches, but I'm sure they will iron those out. The only thing I'd add is that the overall experience really isn't markedly different than purchasing jeans at Macy's.

    You pick out a pair of jeans you are interested in, you try them on, decide whether or not to buy them, and then pay and leave. True that you can pay without talking to someone, but there are plenty of friendly workers to chat with while you're there. I'll certainly go back because they're in the neighborhood and the people were nice. But this is hardly some disruptive new retail experience.


    From another reader:

    I love this concept. It would be enough, if locally available, to have me upgrade to a smartphone. Pushy or intrusive sales people are one of my pet peeves, but alternatively, finding someone when you need the fitting room door opened can be even more challenging than dealing with an overzealous sales associate. I would frequent a store that made it easier for me to try on clothes and have alternative sizes whisked to my fitting room. I am ready to go shopping.

    MNB user Don Skiver disagreed:

    What the hell? Am I the last person on earth that actually enjoys talking to sales people, seeing people interact in a store and so not impressed with the whole “I can order, check myself out, and never interact with a human person” experience? I would hate to shop in a store like that.  Not saying there are people out there that might like it, but I am not ready to give up the human dynamics yet.  I refuse to use self-checkout.  Even bad experiences in checkout lines once in a while are not worth the trade off of missing the human interaction to me.




    Finally, reacting to the fact that the federal General Accounting Office (GAO) has said that the US Postal Service (USPS) lacks the authority to simply stop doing Saturday mail delivery, one MNB user wrote:

    I’m about two more mailboxes full of direct mail and political crap away from discontinuing my mail service completely. The only thing holding me back is figuring out how to get annual tax filing information sent to me online???

    That's a good point. There ought to be a way, for example, to have companies send me 1099s via email, rather than using paper and stamps. I could then just forward them to my accountant, who could include electronic versions with my tax returns. Be a lot easier...
    KC's View: