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    Published on: April 22, 2013

    Future Connect 2013 provides a roadmap to success in the dynamic food retail industry.

    Drive your team to their best potential at this unique leadership event. Your investment in this conference will ensure that your company has the leadership skills, knowledge, business partnerships and resources needed to be successful in the next generation and beyond.

    Programming addresses four concurrent breakout tracks: Strategic Leadership, Operations Leadership, Industry Collaboration and Technology. Reach your company's leadership goals faster and make it a team effort.

    Join us in Orlando April 30-May 2. Register today by clicking here.
    KC's View:

    Published on: April 22, 2013

    Artificial is out…organic is in! Natural sweeteners are flying off grocery shelves faster than retailers can restock. With consumers demanding natural sweeteners at an exponential rate, now is the time to incorporate Wholesome Sweeteners Organic Stevia into your set.

    According to Spins, organic and natural low calorie sweeteners are up 10% in the natural channel and responsible for all positive growth in the conventional channel. Have you refreshed your category to reflect this seismic shift in how people shop?

    Now in a NEW convenient 4.2 oz. flip-top jar, Wholesome Sweeteners Organic Stevia provides customers with a quick and easy way to sweeten just about anything-tea, coffee, oatmeal, cereal and fruit. The easy to open wide-mouth lid makes the jar perfect for everyday tabletop use.

    Say goodbye to the pink, blue and yellow. Give your customers what they want and be the first retailer in your area to carry Wholesome Sweeteners Organic Stevia in a 4.2 oz. convenient flip-top jar.

    Contact us today to be first to carry this HOT NEW product: 1-800-680-1896 or email CS@OrganicSugars.biz.
    KC's View:

    Published on: April 22, 2013

    by Kevin Coupe

    An MNB user drew my attention to a BBC story about how "the latest in 3D printing technology" is being used in Amsterdam to build a house.

    That's right. A house is being built by a 3D printer, which prints "thin layers of the construction materials on top of each other rather than out of bricks and mortar."

    Since I cannot begin to explain this in my words, let's leave it to the BBC:

    "The printer that will make this possible - the KamerMaker - is a marvel in itself. The name translates from Dutch as 'room-maker'.

    "With a shiny metallic exterior, built from the carcass of a shipping container, it is 6m (19ft 8in) tall and would easily fill the average sitting room.

    "Using different types of plastics and wood fibres, the device takes computer-drawn plans and uses them to make first the building's exterior walls, then the ceilings and other parts of individual rooms and then finally its furniture.

    "The pieces will be assembled on site like a huge jigsaw with parts attached to each other thanks to some of their edges having being shaped like giant Lego pieces, and the use of steel cabling to 'sew' the elements together.

    "Each part is created using a layer-by-layer process in which solid objects take shape by printing thin 'slices' of the construction materials, one level at a time, which bind together."

    And here is the passage that really caught my attention:

    "It may seem like science fiction or the kind of fantastical vanity project expected of a millionaire, but this is really a visionary concept of idealistic but level-headed architects operating with modest budgets, whose focus is on social housing.

    "Developers may not be quaking in their boots just now but 3D printing has the potential to disrupt construction and the very look of our towns and cities."

    Pay attention to the use of the word "disrupt." It is happening everywhere, even building construction. It can happen to any of us.

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

    Published on: April 22, 2013

    A site called ecommercebytes.com reports that Amazon may be considering the opening of a bricks-and-mortar store in London.

    It is all speculation, based on the fact that there apparently was an online posting for job availabilities at an Amazon store that would be located in East London, on property where some of the Olympics were played. But there is even some question about the validity of the ad, and Amazon is not commenting.

    The story notes that "Charlie Rose interviewed Amazon CEO Jeff Bezos last year and asked him if Amazon would develop brick-and-mortar stores. Bezos said he would love to, but only if Amazon had a 'truly differentiated idea'."
    KC's View:
    Jeff Bezos is a lot smarter than I am, but for the life of me I cannot understand why he'd want to have a bricks-and-mortar store. Drop-off points maybe, but not actual stores - the minute they lease a space, install utilities, lay out shelves and hire staffers, Amazon would give up many of the advantages that have allowed it to disrupt traditional retail.

    Published on: April 22, 2013

    The City Wire has a piece about the four people most likely to succeed Walmart president/CEO Mike Duke when he steps down ... an event that could happen as soon as this year, some people speculate. (Some think it could happen before Walmart's June 7 shareholders meeting.)

    "The most likely choices for the next CEO are Bill Simon, 52, CEO of Walmart U.S., and Doug McMillon, 44, CEO of Walmart International," the story says. "Other possibilities include Rollin Ford, 48, chief information officer, and Charles Holley, 54, chief financial officer ... All four of the executives report directly to Duke and have international management experience, which is key given Wal-Mart’s global presence and ongoing probes into possible corrupt practices regarding expansion in India, Mexico, China and Brazil."

    You can read the entire story here.
    KC's View:

    Published on: April 22, 2013

    The Cincinnati Enquirer reports on how Kroger "is tinkering with technology that allows customers to scan grocery items themselves as they take them off the shelf. Called 'Scan, Bag, Go,' it provides interested shoppers hand-held scanners and bags as they walk in the door. Customers scan and bag items as they navigate the store, then scan a bar code at the front of the store that transfers their order to the checkout ... Kroger has been testing Scan, Bag, Go technology at a few stores in the region since fall 2009. It has added two new stores for a total of five in the pilot project in the last year. Upgraded software with more vivid text displays is being rolled out to test stores."

    While Kroger is said to be "tight-lipped about their plans for the technology."
    KC's View:
    Combine this kind of customer scanning with the data being generated by its shoppers and evaluated by Dunnhummby, and Kroger's long-term strategic potential looks enormous. The upside is huge, and the company clearly is positioning itself to have more actionable information about its shoppers than almost anyone else.

    Published on: April 22, 2013

    Perhaps it was inevitable after the events in Boston last week, where bombs set off at the Boston Marathon finish line resulted in the deaths of three people, including an eight year old boy, and injured more than 170, that there would be concerns about bombs at retailers around the country.

    Published reports in Auburn, Maine, say that both a Walmart and a Home Depot there had to be evacuated. In the case of the Home Depot, it was a reaction to a suitcase left in a shopping cart by a customer who was clearing out his car to make room for materials he bought; at the Walmart, there was a bomb threat phoned into the store, but no explosive devices were found when police searched the store.

    In addition, Walmart stores in Arizona and Louisiana were evacuated when people called police with concerns about packages that seemed to be out of place. In both cases, the packages were found to be harmless.
    KC's View:
    Reality kicks in. And it probably is going to be kicking for a long time to come.

    The key will be to make sure that we deal with such problems in a way that does not allow commerce to grind to a halt.

    I cannot help but think of the Ernest Hemingway line from "A Farewell to Arms":

    "The world breaks everyone and afterward many are strong in the broken places. But those that will not break it kills. It kills the very good and the very gentle and the very brave impartially. If you are none of these you can be sure it will kill you too but there will be no special hurry."

    We may break, but we must heal, and be stronger in the broken places.

    Published on: April 22, 2013

    The Boston Globe has a fascinating story about how, when Boston got locked down last Friday as law enforcement officials searched for the second suspect in the Boston Marathon bombing, one local chain was allowed - even encouraged - to stay open.

    According to the story, officials asked Dunkin' Donuts "to keep some restaurants open in locked-down communities to provide hot coffee and food to police and other emergency workers, including in Watertown, the focus of the search for the bombing suspect." Dunkin’ Donuts, the story says, responded by "providing its products to them for free."

    And, the story says, the stores "were serving anyone who came in, whether they were looking for a cup of Joe or a place to charge their phone. In the heart of Boston’s business district, where public transit commuters and travelers became stranded when the T shutdown, that was more than a few.

    "Across from South Station Friday, early morning coffee drinkers watched through the windows of a Dunkin’ Donuts as yellow-jacketed, heavily armed Boston police officers patrolled the area. And when a smaller-than-normal lunch crowd started hitting the Dunkin’ Donuts on State Street and Broad around noon, the two employees bustling behind the counter just smiled wider in welcome."

    Starbucks, the Globe reports, "shuttered 64 stores once the city went into lockdown," and "it was clear amidst the chaos Friday which was the hometown coffee chain."
    KC's View:
    I cannot imagine anyone not being emotionally moved by the events in Boston over the weekend, as people streamed onto the streets to thank law enforcement officials, and as fans filled Fenway Park for Saturday's Red Sox game, and were treated to a scene of enormous pride, including Neil Diamond singing "Sweet Caroline" live (the song is played at every game) and David Ortiz giving voice to what every citizen of the city was thinking. (If you haven't seen the clip, check it out on YouTube. It is classic.)

    The pundits have it right. Massachusetts is a state of grace, and Boston is its very soul. Over the weekend, against all odds and despite the carnage and emotional baggage, spring became the summer, and good times never seemed so good.

    Published on: April 22, 2013

    Just caught up with a Time piece about how and why Walmart has decided that a "made in America" initiative makes sense, noting that "the same forces that are making the U.S. a more hospitable place for manufacturing —higher shipping costs and wage rates overseas among them—have prompted the company to reevaluate its sourcing on a variety of products."

    It is worth reading, and you can do so here.
    KC's View:
    Clearly, Walmart believes that it can use a made-in-America program to clear up some supply issues without raising its prices, which marks a real sea change in how the company works. And, at a time when the company has taken some hits because of issues like foreign bribery, a made-in-America initiative also can have a positive PR impact.

    The big challenge for Walmart, I think, is making sure that whatever it does is credible and sustainable. If it is sloppy in the certification process, then it will take another PR hit, and it will be entirely justified.

    Full disclosure: Made in USA Certified is a longtime MNB sponsor. However, I'd be making this argument about Walmart needing to be vigilant and flawless in its certification process even if I didn't have such a sponsor ... and this opinion is consistent with my broader feelings about transparency and accuracy.

    Published on: April 22, 2013

    • The Austin American-Statesman has a piece about Whole Foods "has rolled out a series of standards regarding animal welfare, seafood sustainability and genetically modified ingredients — to name a few — that is unprecedented in scope for a major food retailer," suggesting that "while it’s impossible to predict the future, given Whole Foods’ prominence, it could influence the larger grocery industry as well."


    • The Associated Press reports that "Anheuser-Busch InBev has reached a final agreement with the U.S. Department of Justice that could settle a dispute over its $20.1 billion acquisition of the Mexican brewer Grupo Modelo."

    And CNN says that "under the agreement, Anheuser-Busch InBev can move ahead with plans to acquire the 50% of Grupo Modelo it does not already own for $20.1 billion, but it must sell Modelo's U.S. business in order to preserve competition in the American beer market. It must also sell one of Modelo's brewing facilities in Mexico.

    "The proposed buyer is Constellation Brands -- a wine and liquor producer whose brands include Robert Mondavi and SVEDKA Vodka -- which will acquire the assets for roughly $4.75 billion. Constellation will then have the exclusive right to sell Modelo products in the U.S."
    KC's View:

    Published on: April 22, 2013

    Al Neuharth, the longtime chairman/CEO of Gannett Co. who through force of will created USA Today and kept it alive through years of years of losses while simultaneously turning a chain of local newspapers into a diversified media conglomerate, died Friday. He was 89.
    KC's View:
    It so happens that both Michael Sansolo and I worked for Gannett in the late seventies/early eighties, and Michael actually had stories appear in USA Today; he will devote his column tomorrow to some thoughts about Neuharth's vision and leadership, and I don't want to step on his toes.

    I think that legitimate criticisms can be made about the USA Today approach to journalism. To me, the issue was not so much that it "dumbed down" the news or was the journalistic equivalent of junk food, but rather than it made the assumption that every story could be told in short stories and few words. I don't think that's true. On the other hand, we now live in a time when communications often are measured in characters, not words ... and so it could be fairly suggested that Neuharth was ahead of his time.

    For me, the worst sin that Gannett committed was its focus on the bottom line at the expense of experienced journalism. At least at the chain where I worked, reporters were paid terribly. In 1978, I started at about $7,600 a year. When I left after several years, I was making around $9,000 a year ... and they were thrilled to see me go, because they could replace me with a man or woman making $7,600 a year. I'm hardly the only former Gannett reporter who would make that observation, and I think it represents a bottom-line orientation that did not serve its newspapers and readers well.

    That said, by the way, that first job as a newspaper reporter was the best job I ever had until this one. So for that, I'm grateful to Gannett for giving me a shot.

    Published on: April 22, 2013

    On Friday, MNB took note of a Wall Street Journal report that Procter & Gamble has informed its suppliers that it "is planning to add weeks to the amount of time it takes to pay its suppliers, a shift that could free up as much as $2 billion in cash for the consumer products giant." The story noted that P&G is hardly alone in doing this, and that it wants to change payment terms from 45 days to 75 days. "To help suppliers deal with the changes, P&G is working with banks that will offer to advance cash to suppliers after 15 days for a fee, some of the people said. The changes are expected to be phased in over three years and ultimately could affect hundreds of companies, the people said."

    I commented:

    I have to be honest here. This is an area about which I know very little, though the explanation for why it makes sense for P&G to do so certainly rings true. I'm not sure that suppliers who now will have to borrow money for a fee will agree with the logic, however. And I wonder how P&G would react if its major retail customers decided to delay paying invoices issued by the CPG giant because they wanted to be smarter about managing their money, and told P&G that it's okay, they can just get a low-interest loan to cover the longer payment period.

    One MNB user responded:

    P&G is flexing its buying muscle….just like the retailers have been doing. We have been hit with payment term extensions by many retailers and early payment discounts that have moved. For example we used to be 1% 30, net 31…..with most retailers paying in 45 days and still deducting the 1%. That has moved to 2% 30 Net 60 days.

    From another reader:

    As a former retailer who ran merchandising efforts for some very large companies, I can tell  you unequivocally how P & G reacts to customers who pay late – C.O.D!!!  No ifs ands or buts.

    And another:

    Really?

    That is the word that popped into my mind first when I read about P&G stretching out payments to suppliers.   That thinking seems so outdated.  As an integral part of the ECR effort in the 90's, we all were exploring ways to shorten the cash cycle, not lengthen it, thinking we all should get paid when we provided goods or a service to each other.  Technology was going to be the tool by which that could occur.  So to lengthen the time paid seems so much like a last century idea.  Not something one might expect from P&G.   Without a doubt, their customers will be reading about this and demanding extended terms on their side as well.

    While we are at it, I want those terms too.  I want to go to the store, buy my groceries and pay in 60 days.   I can only imagine the reaction if I tried.


    And still another:

    I would suggest to you, P&G learned this technique from being on the receiving end from retailers! Many retailers have been doing this for decades. In addition, as they increase the costs of their 3rd party manufacturers; Procter's costs will increase on their finished goods and guess who pays for that?

    Another reader chimed in:

    Two things about P & G and extended payments. Many grocery chains already do delay payments to suppliers (along with taking unreasonable deductions). In the N/W one exception is Winco and many in the industry say Winco gets better deals than others; suppliers know they won't have to wait beyond terms for payment. Secondly, those companies delaying payments to some extent limit the number of vendors willing to serve them, thus theoretically reducing competition and potentially increasing customer costs.

    And another:

    I know these practices of paying invoices somewhere beyond 60 days is common across all industries, but I guess my upbringing doesn’t allow me to accept that.  What if all consumers of P&G products, or anyone’s products and services for that matter, basically said, “check is in the mail...in 60 + days”.  Not sure that is good for anyone.  My parents taught me to pay my bills when due, whether immediately or monthly.  Seems like everyone is trying to squeeze something out of everyone else...a societal problem in the making?

    And yet another:

    What a terrible idea.  In times like these, of cheap money, the impact is less than in times like 1981, remember those interest rates? 

    How long will it take suppliers to P&G to adjust prices for the delay in payment?





    MNB had a piece about IRI's rebranding efforts, which led one MNB user to question whether its strategic efforts were good ones.

    Another MNB user responded:

    Regarding the comments one of your readers made about IRI, I find myself compelled to respond.  I think the term “former employee” says all we need to know about how much he/she knows about what’s going on at IRI.  The company has owners (New Mountain Capital) who have shown they know how to walk the walk, putting their money into the company, not squeezing it out.  They have made some very progressive investments in infrastructure and products/services.  About a year ago they hired a new CEO, Andrew Appel, who seems to never spend a day in his office.  He is constantly meeting with clients, spending time with employees at all levels, and calling on retailers, who, I assure you, know very well who IRI is.  He insists on employees calling him Andrew.  He maintains a true open door, granting access to any employee who has something to say.  And he has a great vision for the future of IRI.
     
    Everything I have seen since New Mountain assumed ownership and Andrew Appel assumed the role of President/CEO has been positive and encouraging.  Notwithstanding the insights from someone who does not work for IRI, this is a company moving in the right direction.

    Clearly your commenter has some sort of axe to grind.  That’s fine.  But I, for one, am proud to be an IRI employee and categorically dispute the ridiculous assertions made by a disgruntled former employee.


    Disgruntled or not, that former employee was not alone, as another MNB user wrote:

    IRI’s business model generally lets subscribers know what has happened. The better business models which are out there today use the internet/social mediums/blogging sites and crowdsourcing to let us know what is happening. Big difference to marketers of any product or service offerings, because it allows them to adjust or change their strategies faster than they could before.

    For the record, I have no dog in this hunt. I have friends at IRI, and I suspect they know they have issues with which they have to deal. After all, companies don't rebrand when everything is going swimmingly. This exchange of ideas simply points to some of these issues, and I think that it is better to have an open discussion about them and embrace them. (What do you think Andrew Appel is doing out in the field?)




    On another subject, one MNB user wrote:

    Regarding the Fresh & Easy dialogue, which I am sure will go on for days, I would add that I was an believer in their demise simply because they got almost everything wrong from the start.

    I won't go into details, but even in Tesco's attempt to reconfigure F & E several years ago, they suggested that one of the main reasons they were struggling with poor sales numbers is that during their initial visits with American consumers spent poking around in their refrigerators and freezers, they failed to take notice of larger refrigerators and freezers found in garages and basements. "We didn't visit their basements."  Their detachment from reality was--and remains--mind boggling.  To this day, this explanation remains one of my favorite corporate justifications for failure.

    Oh, and don't worry about being a bit wrong in your initial enthusiasm. Like that scene in Defending Your Life, where Albert Brooks gets to revisit every one of his life's blunders in the form of a five minute video clip - which I'm sure you'll know as a movie buff -- my clip could go on for many hours.


    From another reader:

    A loud lesson to retailers from Tesco's demise is that USA customers love our brands.

    Tesco's assortment weighed heavily on private label product. USA consumers shop multiple channels every week. Little incentive to buy private label as our favorite brand is available at a better price somewhere in the weekly shopping tour.

    Note to Kroger, Safeway, Whole Foods, Wegman's etc. who aggressively try and convert shoppers to their private labels.

    Consumers seek good value on the brands we love, not your private label. Trader Joe's accounts for less than 2% of the market and is the exception not the rule!


    And another:

    It might be interesting to look back at some of the articles that were written when Tesco announced plans to enter America.  I seem to recall a lot of articles suggesting that they were going to kick major butt and show U.S. grocers how it’s done.

    As I've said here before, I plead guilty to having been enthusiastic about Tesco's chances in the US, confident that after the initial missteps it would figure things out, and finally, disappointed that it seemed to make such a total mess of things.

    But trust me. When I have my Defending Your Life moment, there will be a lot of things that come up before they ever get to my feelings about Fresh & Easy.

    (And you're right. For my money, it is the best Albert Brooks movie ever made, and one of my favorite comedies. if you haven't seen it, you should.)
    KC's View: