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    Published on: November 8, 2013

    by Kevin Coupe

    The Nielsen Co. is out with a new study speaking to how the consumption of news has changed radically because of the internet: "Whether browsing the news headlines about international news, U.S. politics, or the latest tech gadgets, 111 million Americans visited news websites in September 2013. That’s more than half of the Americans (54%) who were active on the Web, and each visitor to news sites spent an average of 1 hour 32 minutes on those sites during the month."

    What's interesting is the list of top ten news sites visited by consumers - it is dominated by traditional news names that seem to have successfully adapted to the digital age - ABC, CNN, NBC, the New York Times, Fox News and the Washington Post.

    Sure, there's a Huffington Post thrown in there for good measure - a company that represents a pure play startup that was made possible by the internet, and that was not a brand extension by an existing media company. But the lesson, I think, is that traditional brands that have earned trust over the years have been able to transfer that trust to a new venue without being challenged - so far - by a news media version of Amazon.

    That doesn't mean it can't still happen. And it doesn't mean that all these media companies have totally figured out the profitability part of the equation.

    But it does mean that traditional brands can adapt to a digital world and be successful … in part by emphasizing the traditions that have made them trustworthy, and in part by being willing, wherever necessary, to abandon old-world ways of doing business and adapt to the new world's demands.

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

    Published on: November 8, 2013

    The US Food and Drug Administration (FDA) proposed yesterday measures that, as the New York Times reports, "would all but eliminate artery-clogging, artificial trans fats from the food supply, the culmination of three decades of effort by public health advocates to get the government to take action against them."

    The FDA is saying that artificial trans fats not longer can be described as safe, and is giving the public 60 days to comment on its proposal, which requires that food producers prove that any trans fats in their products are safe to eat, which is a very high bar to clear.

    The story goes on: "Artificial trans fats — a major contributor to heart disease in the United States — have already been substantially reduced in foods. But they still lurk in many popular products, like frostings, microwave popcorn, packaged pies, frozen pizzas, margarines and coffee creamers. Banning them completely could prevent 20,000 heart attacks and 7,000 deaths from heart disease each year, the F.D.A. said."

    While there is a period during which the public can comment, the Times writes that it appears that very likely that the proposed measures will become regulations. And, it writes, "The proposal is a rare political victory in an era when many regulations to protect public health have stalled. A landmark food safety bill took years to carry out, in part because it collided with the 2012 election season. And rules to regulate the tobacco industry are still stuck, four years after the law calling for them was passed."

    The Center for Science in the Public Interest (CSPI) points out that artificial trans fats in foods already have been eliminated by a number of countries, including Denmark, Austria, Iceland and Switzerland.
    KC's View:
    In responding to the FDA announcement, the Grocery Manufacturers Association (GMA) released the following statement:

    “Product safety is the number one priority for America’s food and beverage companies and we invest our reputations and resources to provide consumers with safe and nutritious products that meet their preferences and lifestyle needs.
     
    “Through our efforts at product reformulation and the development of suitable alternatives, trans fats that are not naturally occurring have been drastically reduced in the food supply.  Since 2005, food manufacturers have voluntarily lowered the amounts of trans fats in their food products by over 73 percent. 
     
    “Consumers can be confident that their food is safe and we look forward to working with the FDA to better understand their concerns and how our industry can better serve consumers.”


    I have to be honest here. I have no idea what that statement means. Is GMA in favor of a ban? Or against it? It is like GMA felt the need to make a statement, but didn't want to be for or against.

    The fact is that many food companies already have gotten rid of artificial trans fats, and now the ones that haven't almost certainly will have to. There seems to have been a real impact on public health because of the voluntary elimination of artificial trans fats, and so it makes sense to go all the way.

    Published on: November 8, 2013

    The US Senate voted 64-32 yesterday in favor of the Employment Nondiscrimination Act (ENDA), which would ban discrimination in the workplace based on sexual orientation and gender identity. The 54 members of the Democratic majority were joined by 10 members of the Republican minority in approving the legislation, in what the New York Times called "bipartisan show of support that is rare for any social issue. It was the first time in the institution’s history that it had voted to include gay, lesbian, bisexual and transgender people in the country’s nondiscrimination law."

    However, there is no guarantee that the anti-discrimination legislation will become law. The Republican-controlled House of Representatives may not even vote on it, since Speaker John Boehner opposes it; his office released a statement saying that ENDA "will increase frivolous litigation and cost American jobs, especially small business jobs."

    There have been some objections to ENDA on religious grounds, though the Times notes that "the bill includes a number of protections for religious entities, some of which were added this week to gain more Republican support. It now contains a provision that says no federal agency or state or local government that accepts money from the federal government can retaliate against religious institutions for not complying. This would include actions like denying them tax-exempt status, grant money, licenses or certifications."
    KC's View:
    I'm not sure how this is going to cost American jobs.

    I think most Americans are in favor of not discriminating against anyone, including for reasons of sexual identity. I think most Americans believe that legislation requiring non-discrimination against gay, lesbian, bisexual and transgender people in the workplace is not going to force any religious organization to violate what to them are sacred beliefs.

    America is a country that, while not perfect, is a place of increasing tolerance and acceptance. And I think that the people voting against this legislation - or not allowing it to be voted on - are going to be seen as on the wrong side of history.

    Published on: November 8, 2013

    The Northwest Arkansas Business Journal reports that Walmart is building its first convenience store, in Bentonville. It will open by spring 2014.

    “We know this type of convenience store is popular with customers,” Walmart spokesperson Deisha Barnett tells the Business Journal. “We’re excited about the opportunity to test a new store and learn.”

    Walmart says that there are no plans to build additional c-stores.
    KC's View:
    Yet.

    But we all know that Walmart has an increasing fascination with small store concepts. This may just be a toe in the water, but there's no doubt in my mind that Walmart is perfectly willing to go swimming in the c-store ocean if profitability and relevance can be proven. Though, as the Neighborhood Market experience shows, it won't necessarily be a brief process.

    Published on: November 8, 2013

    Bloomberg Businessweek reports that Jamba Juice,, facing smoothie competition from companies that include McDonald's and Panera, is hoping to generate new sales with a new vending machine it calls JambaGo, described as "a self-serve machine that can be installed in cafeterias, schools, and convenience stores. Jamba Juice makes money by selling the prepackaged, pre-blended smoothie ingredients to JambaGo vendors, like a soda maker selling syrup to the owner of a soda fountain. The advantages: Jamba doesn’t need to build a store and the labor costs are much lower compared with hiring staff to concoct made-to-order drinks."

    Target has agreed to install some 1,000 JambaGo units in its cafes arounds the country, a deal that will more than double the current number, to 1,800. Since Jamba Juice only has 850 stores at this point, this means that the vending initiative has the chance to radically expand its visibility, as well as adding some dollars to its bottom line.
    KC's View:
    Never having used the JambaGo machine, I have no idea how the quality measures up to the smoothies served by its retail stores. I'm a big Jamba Juice fan, but my enthusiasm for the brand would be tempered if I thought they were diluting their quality for a buck.

    Published on: November 8, 2013

    The Wall Street Journal has a piece about the search for a "better egg," which has been launched by companies that recognize that the specialty egg business is growing faster (up 13.5 percent so far this year) than the traditional egg business (up 2.5 percent).

    Until recently, the story says, "sales of regular eggs have been mostly flat or falling for decades … Now the industry is getting a boost from rising sales of eggs which tout various attributes on their labels: organic, extra omega-3s or cage free. These 'specialty eggs,' as they are known in the industry, are sold at a premium, which means egg producers, sellers, and grocery chains all want to find ways to sell more. Organic eggs tend to be the most expensive on shelves, while those with added nutrients are the top sellers among specialty varieties."

    The holy grail of specialty eggs, at this point, is to "get enough calcium into eggs to brag about it on the label. Executives believe calcium is an appealing claim to most buyers, especially women. The average egg has about 28 milligrams of calcium—about 3% of the recommended daily intake of calcium for people ages 19 to 50—concentrated primarily in the yolk." The goal is to get enough calcium into eggs to be 10 percent of recommended daily intake.
    KC's View:

    Published on: November 8, 2013

    Reuters reports that "more than 50 people demanding better wages for Wal-Mart workers in a protest organized by a union activists were arrested outside the retailer's store in the Chinatown section of Los Angeles on Thursday night … Glen Arnodo, staff director of the Los Angeles County Federation of Labor, which organized the demonstration, said the intent was to draw attention to what he said was Wal-Mart's role in income inequality."


    CNN reports that the two winners of Walmart's "Get On The Shelf" contest, which guaranteed that the successful applicants would be stocked by walmart.com and possibly in some of the company's bricks-and-mortar stores, are a company that makes bedding with Elvis Presley's image, and a company that makes customized silicon wrist bands.

    According to the story, "Wal-Mart said thousands of inventors, entrepreneurs and small businesses participated in this year's challenge. They sent in video submissions of inventions, ranging from interactive pajamas to a GPS tracker for your pets. The top 20 finalists -- chosen through an online vote -- pitched their products in person to Wal-Mart's merchandising team.

    "Five winners were selected, and their products were made available for purchase on Walmart.com. The two products with the most pre-orders were selected as the grand prize winners."
    KC's View:

    Published on: November 8, 2013

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

    • The Cincinnati Business Courier has an interview with Dave Dillon, the Kroger CEO who will retire from that role at the end of the year and be succeeded by current COO Rodney McMullen.

    Asked about his legacy, Dillon said, "I view it as being part of a team that led us through one of the many transitions the company has gone through. I’ve often said food retailing is a team sport, and I’m part of the team." And, he added, "If I haven’t accomplished what I wanted to after 10-and-a-half years, then shame on me."

    That's what has made Kroger so formidable. It isn't all about the people at the top. It's about the stores, and the team.


    • Walmart may have gotten a lot of attention in Washington, DC, with its move to build a number of stores there (which then resulted in an unsuccessful move by some to force it to pay more than the minimum wage to its employees, which also got a lot of notice), but its not the only retail chain that sees the nation's capital as a place of opportunity.


    • The Chicago Tribune reports that Safeway-owned Dominick's is warning that the closure of its stores at the end of the year could result in the layoff of more than 5,600 employees.

    Safeway announced that it would either sell or close the stores by December 28, after years of market share declines. Four stores have been sold to Jewel, and there are reports about various competitors circling the chain with plans to bid on groups of stores, but at this point there remain 68 stores for which there are not yet any clear plans.



    • The Washington Post reports that less than two weeks "after reaching a deal to open a store in a $443 million development on New Jersey Avenue SE near Nationals Park, the grocer’s regional president said the chain has signed a lease to open another on H Street NE between 6th and 7th streets," that "will be the high-end grocer’s fifth and sixth in the District."

    And, the retailer says it is still actively eyeing other sites there - including one at the former Walter Reed Army Medical Center that Wegmans long has coveted.
    KC's View:

    Published on: November 8, 2013

    • The Atlanta Journal-Constitution reports that Truett Cathy, the founder of fast feeder Chick-fil-A, has stepped down from his role as chairman, and is being succeeded by his son, Dan Cathy. Truett Cathy, 92, will remain with the company as chairman emeritus while focusing on other projects, such as Truett's Luau, a new concept the company is testing.

    The company described the move as part of a long-planned succession plan.


    • Priceline Group announced that Darren Huston, who runs the company's hotel reservation business, has been named CEO of the entire company. He succeeds Jeffery Boyd, who has been CEO since 2002 and who will remain with the company as chairman.
    KC's View:

    Published on: November 8, 2013

    …will return.
    KC's View:

    Published on: November 8, 2013

    In Thursday Night Football, the Minnesota Vikings defeated the Washington Redskins 34-27.
    KC's View:

    Published on: November 8, 2013

    Thank goodness for the fall movie season.

    After a summer where it seemed difficult to find a movie with any sort of adult appeal, it has been a terrific season so far. I've found Captain Phillips and Gravity to be enormously engaging, and the latter may be one of the best pieces of pure filmmaking I've seen in years.

    And now, there is All Is Lost, which in its own way equals Gravity as a compelling survival tale pitting an individual against enormous odds, and an exemplar of fabulous move-making skill by JC Chandor, who last brought us the terrific Margin Call.

    All Is Lost is the simplest of stories. Robert Redford plays the role of his life as a man who is sailing by himself around the world. While in the Indian Ocean late at night, his boat is rammed by a cargo container, putting an enormous gash in the hull and rendering virtually all his electronics useless. From there, he must repair the ship and cope with an enormous storm that puts to the test every survival instinct he can muster.

    It is quite literally a one-man show, with Redford - now in his late seventies, showing wear and tear as well as wisdom that tempers the cockiness he had in his youth as the Sundance Kid - fights the elements, frustration and growing sadness and exhaustion as he tries to survive.

    (Great business lesson here. Sometimes you do everything right, and everything goes wrong. But great leaders keep going, keep trying to turn defeat into victory.)

    Whereas Margin Call was filled with plot turns and incisive dialogue, All Is Lost reportedly was made from a 32-page script that was mostly outline, and is almost dialogue-free. And yet, it is absolutely mesmerizing and a demonstration of consummate skill and artistry.

    There are times I despair a bit about all the comic book and special effects-laden movies that seem to dominate the cultural landscape. Some are good, some are lousy, but there is a sameness that I find worrisome.

    But movies like All Is Lost prove that all is well. There are still adults working in the movie business.

    Go see this movie.




    My wine of the week: the 2010 Roads End Pinot Noir from Oregon's Carlton Cellars. I'm a big fan of this winery, and Roads End is perhaps its finest wine … a delicious Pinot that I served last weekend with a shrimp risotto hat was (if I do say so myself) wonderful.




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

    Slàinte!
    KC's View: