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    Published on: August 2, 2013

    by Kevin Coupe

    You may recall that earlier this month, there was a lot of debate about the decision by Rolling Stone to put accused Boston Marathon bomber Jahar Tsarnaev on its cover, with most of the complaints focused on the fact that many saw the cover photo as making the accused terrorist look like a rock star.

    A wide range of retailers - including Roche Bros., Wegmans, Tops, Stop & Shop, Rite Aid BJ's Wholesale Club, Costco, CVS, Walgreen and Tedeschi Food Shops - said they would not sell the issue. And a "Boycott Rolling Stone" campaign took shape in social media.

    But the actual impact on magazine sales seem to have been exactly the opposite. Ad Week reports that "retail sales of the issue jumped 102 percent over average per-issue sales for the past year, according to Magazine Information Network. Figures are based on point of sale data from 1,420 retailers from July 19 to July 29. Among those retailers, 13,232 copies were sold, more than double the magazine's average sales for the prior year."

    Tsarnaev is accused of carrying out, with his brother, two separate bombings during the Boston Marathon that killed three people and wounded more than 260. The brother was killed before being apprehended. Tsarnaev has pleaded not guilty to 30 federal charges related to the bombing.

    From the beginning, I felt that while Rolling Stone was completely within its rights to run the story and the picture, it might have been more sensitive to use another photo. But sensitive doesn't sell magazines. And, to be clear, reports are that the story itself - which talks about how young people like Tsarnaev end up being alienated from a culture that offers them so much - is supposed to be extremely well reported and written. (I haven't read it yet. But it is on the list.)

    Still, the entire episode has been an Eye-Opener.
    KC's View:

    Published on: August 2, 2013

    Ad Week reports that "energy drink makers Red Bull, Monster, and Rockstar took a pounding Wednesday in a Senate Commerce hearing about their marketing practices, which the senators argue are targeting children and teens." However, when it was over, "none of the three companies would agree to put a label on their product limiting consumption to older than 16."

    The core of the hearing consisted of Sen. Richard Blumenthal (D-Connecticut) and Sen. Edward Markey (D-Massachusetts) challenging the beverage manufacturers in the light of reports that "have raised serious questions about the health risks energy drinks pose to youth, suggesting that children and adolescents should not consume caffeine. Last month, the American Medical Association said it would support a ban on marketing energy drinks to children under 18 because the caffeinated beverages could cause heart problems and other issues."

    The beverage makers, however, pushed back, saying that they were being unfairly demonized, that children get more caffeine from the coffee they drink than from energy drinks. All three have agreed not to market under 12 years of age and to abide by voluntary guidelines established by the American Beverage Association (ABA), but they seem to be going that far, and no farther.
    KC's View:
    I have no idea if the stat about getting more caffeine from coffee is true or not, but I think part of the danger has been the popularization of drinking energy drinks mixed with alcohol. But I'm reasonably sure that companies like these depend on young teens for a percentage of their revenue, and they won't give up that money without a fight.

    I've never allowed the damn things in the house. I just think they are a disaster in the making.

    Published on: August 2, 2013

    The Wall Street Journal reports that Procter & Gable now is "spending more than a third of its U.S. marketing budget on digital media, an aggressive shift as Americans for the first time are expected to spend more time online this year than watching television ... That is well beyond the estimated 20% to 25% share that digital ads typically claim of companies' marketing budgets and highlights the threat to traditional advertising media like print."

    "The bottom line is we need and want to be where the consumer is, and increasingly that is online and mobile," a P&G spokesman tells the paper.

    The story goes on: "P&G's deeper dive into digital ads comes as online advertising is gaining ground on television, even though there is little evidence so far that television companies are suffering as a result.

    "Digital ad spending in the U.S is expected to grow 14% this year to $41.9 billion, while TV ad spending is expected to grow just 3% to $66.4 billion, according to eMarketer.

    "Mobile devices are the biggest beneficiary of the shift in American's attention. Adults will spend an average of two hours and 21 minutes per day on devices like smartphones and tablets doing something other than talking. That is longer than they will spend online on desktop and laptop computers and nearly an hour more than they spent on mobile last year, according to eMarketer."
    KC's View:
    This trend is only going to gain momentum, as marketers realize that to an ever-expanding degree, people who matter are accessing content via digital venues, and that traditional print media are dying. There will be exceptions, but for the most part, this is the inevitable truth. And those who suggest that somehow this is a negative trend miss the point. Because values are found in the content, not the form.

    Published on: August 2, 2013

    As debates over minimum wages and living wages continue to take place around the country, has a piece suggesting that rather than resisting the trend, it may make sense to embrace it.

    An excerpt:

    "As the income inequality gap has widened popularity has grown for this movement, however, and now 70% of Americans support higher minimum wages, almost 3 times those who don’t.  Whether effective or not, this week fast food employees took to old fashioned strikes and picket lines in New York City, Chicago, St. Louis, Milwaukee and Detroit for higher wages.
    Regardless of your opinion about the economics (or politics) of such a move, the trend is definitely building for taking action."

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

    Published on: August 2, 2013

    Bloomberg Businessweek reports that India has eased foreign investment restrictions, a move that it seen as allowing companies such as Walmart and Tesco to open stores there.

    According to the piece, "Rules covering sourcing, infrastructure investment and store location have been amended ... The government is loosening rules to attract overseas investors to stem a ballooning current-account deficit and a weakening rupee. While the nation changed laws in September to allow foreign retailers to own majority stakes in stores selling multiple brands, no companies have sought such licenses yet ... foreign investment up to 49 percent will be now allowed under the automatic route in sectors including petroleum and natural gas, commodity and power exchanges as well as in stock exchanges."
    KC's View:

    Published on: August 2, 2013

    The Philadelphia Business Journal reports that Walgreen is rebranding its in-store health clinics, changing the name from Take Care Clinic to Healthcare Clinic.

    The move will affects some 370 stores with clinics.

    The Take Care moniker dates back to 2004, when Walgreen acquired Take Care from the founders and turning it into a subsidiary.

    The story notes that "Dr. Jeffrey Kang, Walgreens senior vice president of health and wellness services and solutions, said the clinic rebranding is part of an effort to bring the national pharmacy chain’s health care assets and affiliations under a 'singular, trusted' brand identity."
    KC's View:

    Published on: August 2, 2013

    • The New York Times reports that JC Penney's fortunes appear to be more tenuous than ever, as it appears that its stores and products are not resonating with shoppers at the same time as arguments concluded in the court case dealing with whether Penney and Martha Stewart Omnimedia violated the terms of Stewart's contract with Macy’s when they agreed to establish Stewart boutiques within its stores.

    It has, of course, been a tough year for Penney. The company fired its CEO, Ron Johnson, who had been hired to reinvent the company, when things did not turn around fast enough, and then rehired Myron E. Ullman III, who Johnson had replaced.

    • The Los Angeles Times reports that more than 50,000 pounds of ground beef produced by the National Beef Co. in Kansas City and sold to retailers has been recalled because of concerns about possible E. coli contamination.

    USA Today reports that the share price for Sprouts more than doubled in the first day of trading, going from the initial pricing of $18 per share to close at $40.11.

    The story notes that "the strong performance of Sprouts is yet another vote of confidence for the organic and natural food business. The company sells a variety of fresh produce, vitamins and meats targeted at consumers interested in adjusting their food to be healthier. Investors are hopeful the company could grow dramatically, perhaps increasing its number of stores tenfold."

    • The Huffington Post reports that KFC is opening a new concept in Louisville, Kentucky, called KFC Eleven, which is a fast-casual restaurant that serves an entirely different menu of items.

    "Notably absent from KFC Eleven is the fried chicken bucket, or any bone-in chicken at all, for that matter ... Gone, too, are the chain's famous biscuits. Mashed potatoes have been given an upscale makeover: Now they're 'smashed' and infused with garlic. Other menu items include grilled or fried chicken sandwiches, in flavors like Original 11, California Club, BBQ Bacon Ranch and Habanero Jack. Chicken 'Crispy Bites' are served with dipping sauces like Orange Ginger, Kickin' Buffalo and Island BBQ."

    The company is said to be planning a second location in Louisville before the end of the year, but beyond that the company is being tight-lipped about roll-out plans.
    KC's View:

    Published on: August 2, 2013

    • Ahold USA announced that Nick Bertram has been appointed to the position of Senior Vice President of Store Strategy & Execution. Bertram joins Ahold USA from Jewel-Osco, where he oversaw store operations across Illinois, Indiana and Iowa.
    KC's View:

    Published on: August 2, 2013

    Got the following email yesterday from MNB reader Sarah Hamaker:

    In response to your comment: the federal government could require retailers to post a breakdown at checkout and on receipts of exactly how much of the bill is going to the banks that issued the debit and credit cards.

    As someone who's covered this issue for the convenience store industry, I think retailers would, for the most part, be happy to show customers exactly what banks charge for the credit and debit card transactions, but the banks and financial firms don't want to share that information--even with retailers. Many retailers have a hard time figuring out what cards have transaction fees because the banks don't provide a clear picture at all of fee breakdowns. So it's really not the retailers who are balking at your proposal--it's the banks and financial firms.

    I didn't mean to suggest that retailers were the problem here. Far from it. So your point is a good one.

    Yesterday, we linked to a terrific piece in Forbes by Jason Nazar entitled "20 Things that 20 Year Olds Don't Get," that as soon as I read it, I instantly emailed it to my kids. You ought to do the same ... the story is here.

    MNB user Mark Boyer responded:

    Interesting read on 20 year olds. You either are one, were one, or work with one.


    And MNB reader Brian List wrote:

    I had the same opinion on the piece, and immediately emailed to my 20 and 30-something co-workers and friends. Having just turned 30 myself and at the start of the midst of my professional career, I thought the author made some great points.

    And, on another subject, from an MNB reader:

    Kevin, absolutely thrilled with your positive reporting about your stay in Portland.
    This morning you mentioned Salt and Straw. Really a great successful concept, and I believe much of that concept growth occurred at the Food Innovation Center, a joint effort of the Oregon Department of Agriculture and Oregon State University. In general its goal is to help start up food companies become successful.
    Other Oregon efforts to encourage start up food biz: Oregon State's Food Science Technology department performs outreach to artisan cheese makers and offers its facilities for a limited time for starting cheese makers to hone their skills.
    Not sure how much time you are in our fair city, but perhaps you will have chance to check these things out. Might be worth a story.
    Thanks for all your good writing (not only about Portland, just good writing).

    One of the great things that PSU did at its most recent Executive Forum was feature a number of small, innovative companies that were producing new and interesting products, and I believe it was linked to the Food Innovation Center. But you're right ... I should visit next time I'm in Portland.

    And MNB reader Melinda Merrill wrote:

    Thanks for all these plugs for our fair city, it’s been fun reading them. Hope your stay out here has been great.

    My pleasure.
    KC's View:

    Published on: August 2, 2013

    Last year, coming off my first summer of team-teaching a marketing course at Portland State University's School of Business, I wrote the following:

    At my age, life-changing experiences don't come around all that often. When they do, they often involve a blonde, a motorcycle, a tattoo, body piercings, alcohol, sex, drugs and/or divorce. Or, the prostate.

    I got lucky. I had a life-changing experience, and none of that was involved.

    Well, I hate to repeat myself. But...

    I've just returned from Connecticut after spending my second straight summer in the Pacific Northwest, with much of my focus on teaching a marketing class and working with PSU's Center for Retail Leadership, run by Tom Gillpatrick. The joke in my house was that when Mrs. Content Guy went to pick me up at the airport here, she'd instantly recognize me, because I would be the one weeping.

    Well, I've been holding it together so far, but the honest truth is that when you get to spend a month the way I've spent the last two Julys, it does change you. For the better, I think.

    The top picture at right is this year's class. I'm immensely impressed with them - they range in age from the early twenties to the mid-thirties, and they have a variety of life experiences. (Three of them are veterans, having served in Iraq and Afghanistan.) Most of them have jobs, but they're also in school, taking classes, learning, trying to achieve something more with their lives. During some of the recent discussion here on MNB about how much gumption young people have, I actually would get upset that anyone would question the motivations of this generation. These people are special - thoughtful, committed, and smart.

    Once again, this year, I had a chance to share with them some of my perceptions on where consumers, technology and the food retail/manufacturing industry are going, and get them to think and speculate about the same thing, and how they'd like to fit into the picture. We were lucky enough to have some highly accomplished top executives from a number of companies (not all of them from Portland - we had some folks fly in from across the country) come to class to engage in a colloquium with them ... a real give and take that was designed to be provocative and enlightening on a number of levels. (Thanks to those execs, by the way. I don't go public with their names, because we promise them that everything said in class is off the record. That way, they don't worry about stuff showing up in MNB. But they know who they are, and their contributions were invaluable.) And I couldn't do any of it without Tom Gillpatrick, with whom I teach the class, and who provides such a strong environment for learning.

    By the time class is over, I feel like I've learned as much as the students. Maybe more.

    Which is why if you get a similar opportunity, even if just to spend an hour or two in a teaching environment, you should do so. (Let me know if you do. I can probably help arrange something.)

    Of course, the whole trip was a learning experience.

    Starting the trip in Vancouver and going up Whistler ... hiking around Mount St. Helens, which gives one enormous respect for the power of nature ... going on numerous hikes in oregon, whether out at the beach or on some of the many hiking trails, like the beautiful one that leads to Opal Creek ... visiting wineries, especially Willamette Valley Vineyard, where the awesome Wende Bennette and Daniel Shepherd, the assistant winemaker, gave us an afternoon to remember and wines to savor ... and having some extraordinary meals along the way. I got to share much of it with Mrs. Content Guy, some of it with two of my kids, and a lot of it with you, via the Facebook postings of the past month.

    Another thing. The Portland Farmers Markets ... best ever! I was totally overwhelmed by them, especially by the one on Saturday mornings at PSU. They were so extensive and varied that I walked away believing that if I had access to such a market on a regular basis, it would change my eating habits forever.

    Oddly enough, one of the fun highlights came one afternoon after our daughter came to town. We thought we'd treat her to something fun and unexpected, and we'd spied in the Pearl District something called the Foot bar, which offers "therapeutic foot massage and reflexology." It looked like something she'd enjoy, so we made appointments for her and Mrs. Content Guy ... and then I got persuaded to join them. I was a little leery about this, being a guy and all, but after a 45 minute session involving a hot and cold foot bath, massage and the use of hot stones, I can tell you this: my feet haven't felt that good since birth.

    And it was fun to do something totally unexpected.

    Enjoy these pictures, just as I enjoy the memories.

    Of course, it isn't over yet. I have exams to grade. I hope I'll continue to hear from some of my students. And with any luck, the PSU Center for Retail leadership will have me back again next year.

    Because doing this each July is one of the best things I've ever done. And I'm only hungry for more.

    That's it for this week. Have a great weekend, and I'll see you Monday.

    Fins Up!

    KC's View: