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    Published on: April 24, 2014

    This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, Kevin Coupe here, and this is FaceTime with the Content Guy, coming to you this week from Orlando, Florida, where I had the opportunity this week to speak to the Association of Coupon Professionals (ACP).

    The other day I was discussing the allure of the Ford Mustang to my 19-year-old daughter, who says that the car is "totally dope," and so I decided to do something that I'd previously done with my somewhat older sons.

    I showed her the chase scene from Bullitt.

    Now, I've raised my kids on old movies, and my sons especially have always had a taste for the classics. That's not to say they always like them, but they've certainly always been able to put them in historical context.

    Not so my daughter. She was yawning 30 seconds into the famous Bullitt car chase, wondering what all the fuss was about. From her perspective, Steve McQueen might as well have been rolling a wheelchair around the streets of San Francisco. It simply didn't compare to the Fast and the Furious movies that she's seen and loved. Thank goodness she didn't say the words I'm sure she was thinking - "he's no Paul Walker" - because my head probably would've exploded.

    But that's a pretty good business lesson, when you think about it.

    Just because it appeals to people of a certain age doesn't mean it is going to appeal to our kids. And our kids are the next generation of shoppers. We've got to start figuring out now what is going to light their fire, or we run the risk of stumbling around in the darkness.

    We also have to keep in mind that not everybody is the same. My boys can appreciate Paul Walker and Steve McQueen, but they were more open to the experience … and they also were open to being educated about the charms of a movie like Bullitt. My daughter, not so much. That doesn't make her wrong. Just different. Like customers.

    By the way, it isn't as foregone conclusion in my view that all the old stuff is better than the newer stuff. I'm a big fan of the remake of The Thomas Crown Affair, but for some reason I didn't have any strong memories of the original, which happened to come out the same year as Bullitt, and also starred Steve McQueen. So, thanks to Netflix or Amazon or Apple - they're all pretty much interchangeable at this point - I went back to watch it.

    Y'know what? The original Thomas Crown Affair isn't that good. It isn't that it is bad, but it doesn't hold up over time - it seems too rooted in the sixties, mostly in terms of how it is directed and produced. The newer version, with Pierce Brosnan, actually is less anachronistic and, I think, will stand the test of time better.

    Go figure.

    There's a pretty good business lesson in there, too.

    That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: April 24, 2014

    by Kevin Coupe

    ORLANDO - At this week's annual meeting of the Association of Coupon Professionals (ACP) here, I had a chance to spend some time with David Diamond, the former Catalina Marketing executive who now is president of David Diamond Associates, who followed me on the agenda.

    I thought Diamond made a couple of excellent points definitely worth repeating:

    • "Nobody wants to be marketed to," he said, but "everybody wants great customer service." The magic of companies like Amazon and Zappos is that they both deliver a great customer experience with great customer service - and that service is filled with marketing messages. The reason they're not perceived as marketing messages is that they are completely relevant to the individual customers.

    • The barrier to delivering coupons and promotions that are highly targeted and relevant is "not technology," he said. "The barrier is us … all the technology exists, and we just need to agree on standards, figure out who is paying for it, and then deploy it." Of course, this isn't as easy as it sounds, since the interests of various segments of the industry are not always aligned…and, he said, these segments aren't always very good at getting past these disagreements.

    • "The agricultural age, for its first 500 years, didn't really work," he said, suggesting that it took that long for people to really figure out how to be effective and efficient farmers. "For the first 100 years of the industrial age, nobody knew how to build a factory. We're now just in the very beginning of the information age, and we're in the period where things don't work."

    But, Diamond said, they will … and the various retail, supplier and vendor interests that have an investment in the coupon business have to work together toward being ready for when that moment comes, lest they be left behind.

    Smart, Eye-Opening points, I think.
    KC's View:

    Published on: April 24, 2014

    The New York Times reports this morning that the Vermont House of Representatives has passed a law requiring the labeling of products containing genetically modified organisms (GMOs) in their ingredients. The vote came about a week after the Vermont State Senate passed the same bill, and Gov. Peter Shumlin has promised to sign the bill into law, saying, "There is no doubt that there are those who will work to derail this common-sense legislation. But I believe this bill is the right thing to do and will gain momentum elsewhere after our action here in Vermont."

    According to the Times, "Though the move came in a tiny state far from the nation’s population centers, proponents of such labeling immediately hailed the legislative approval as a significant victory. Labeling efforts are underway in some 20 other states, and the biotech and food industries have been pushing for federal legislation that would pre-empt such action."

    The story goes on to point out that "Connecticut passed a law requiring labeling last June, but it was contingent on several requirements, and Maine passed a similar law last year. Labeling will not go into effect in Connecticut, for instance, until at least four other states, one of them contiguous, pass similar requirements. And the combined population of those states must be at least 20 million.

    "Vermont has roughly 626,000 people, census figures show, so food companies could simply stop stocking grocery shelves without much lost revenue."

    The Grocery Manufacturers Association (GMA) immediately went into attack mode after the vote, releasing a statement saying that the law is "critically flawed and not in the best interests of consumers.  It sets the nation on a costly and misguided path toward a 50-state patchwork of GMO labeling policies that will do nothing to advance the safety of consumers.  We are currently in the process of evaluating the legislation to determine the best course of action in response to its passage."

    Lawsuits are expected.

    In its statement, GMA said: "“We encourage policymakers in Vermont and across the nation to support alternative legislation that would ensure that food labels are accurate and consistent for consumers. Bipartisan federal legislation, the Safe and Accurate Food Labeling Act, HR 4432, would require a label on foods containing GM ingredients if the FDA – our nation’s foremost food safety authority – determines there is a health or safety risk. Any labeling of GM ingredients would therefore be based on science, not fear or the varying politics of the 50 states."

    Karen Batra, a spokeswoman for BIO, a biotech trade group, tells the Times: "Any law requiring the labeling of food that contain G.M.O.s creates extra costs for farmers, food manufacturers, distributors, grocers and consumers. The bill passed today is especially problematic because it puts these additional burdens solely on Vermont’s citizens without any added benefit."
    KC's View:
    The interesting thing about all this activity is that it suggests that there is a grass roots support for GMO labeling, which is what concerns organizations like GMA and BIO, not to mention specific biotech companies. They may feel like they are starting to lose control of the message, which is why they are trying to get federal legislation that will supersede any state regulations.

    I continue to believe that GMO labeling seems reasonable, that it doesn't have to be punitive in nature, and that it can actually be a positive for the biotech industry if people actually end up being educated about GMOs.

    Published on: April 24, 2014

    Reuters reports that Safeway, the nation's second largest supermarket chain, said yesterday that "it plans to boost results by passing higher costs for meat, produce and other staples on to shoppers at its U.S. grocery stores."

    CEO Robert Edwards said in a statement that "we expect to pass along most of the inflation we are experiencing," though he did not say the extent to which these pass-alongs would increase prices.

    Safeway currently is in the process of being acquired by Cerberus Capital Management for $9.4 billion, a move that will result in Safeway's operations being merged with those of cerberus-controlled Albertsons. This acquisition is scheduled to be completed in the fourth quarter.
    KC's View:
    I never think that there is anything wrong with customers actually beginning to understand what things cost. It can make life tough, sure, but there's nothing like the lesson in economics one gets when watching the price of food go up. It always makes sense for retailers and manufacturers to try and hold the line for consumers, but when raw materials get more costly, there are consequences.

    Published on: April 24, 2014

    The Charlotte Observer reports that Harris Teeter plans to lower prices "on thousands of items" in its Charlotte and Asheville stores, a move made by possible by efficiencies created by the company's acquisition by Kroger.

    The story notes that "the grocer has faced increased competition in its core market in North Carolina. In Charlotte, Walmart has opened its Neighborhood Market grocery-format store and plans more. Whole Foods has one store in the area and is planning two more, and Publix is opening more than a dozen supermarkets, including one that opened Wednesday in Matthews." However, the paper says that Harris Teeter denies that increased competition played any role in the price cuts.
    KC's View:
    Forgive me, but would it be so terrible to admit that sure, lower prices - made possible by the acquisition - allow Harris Teeter to be more competitive with others in the marketplace? Come on … it is hard to believe that competition had nothing to do with the price cuts.

    Published on: April 24, 2014

    Internet Retailer reports that Walmart is about to roll out a national e-receipts program that will give consumers the option of getting their receipts sent via text to their cell phones and also will give the retailer a new and powerful "data collection and marketing tool."

    According to the story, the program "will enable the big retail chain to accumulate large quantities of data about what a shopper buys and send personalized offers to shoppers who opt into the program … Wal-Mart will mine the data to provide new services for shoppers, Thomas says. For example, it could analyze the items a Wal-Mart shopper buys each week and provide her with a shopping list of items she may want on her next trip to a Wal-Mart store. Or, if a consumer regularly buys cereal, Wal-Mart can send her a coupon for her favorite brand."
    KC's View:
    Very smart. If this means Walmart will be making moire relevant offers to its shoppers, then this is a very good idea.

    Published on: April 24, 2014

    Amazon yesterday announced a content licensing deal with HBO that it said will make its Prime Instant Video " the exclusive online-only subscription home for select HBO programming.

    "The collection includes award-winning shows such as "The Sopranos," "Six Feet Under, ""The Wire," "Big Love," "Deadwood," "Eastbound & Down," "Family Tree," "Enlightened," "Treme,": early seasons of "Boardwalk Empire" and "True Blood," as well as mini-series like "Band of Brothers," "John Adams" and more. Previous seasons of other HBO shows, such as "Girls," "The Newsroom" and "Veep" will become available over the course of the multi-year agreement, approximately three years after airing on HBO. The first wave of content will arrive on Prime Instant Video May 21. This is the first time that HBO programming has been licensed to an online-only subscription streaming service. This programming will remain on all HBO platforms.

    "In addition, HBO GO will become available on Fire TV, targeting a launch by year-end. HBO GO is HBO's authenticated streaming service offering subscribers instant access to over 1,700 titles online including every episode of new and classic HBO series, as well as HBO original films, miniseries, sports, documentaries, specials and a wide selection of blockbuster movies."
    KC's View:
    This isn't just a coup for Amazon. It also is a blow to Netflix and Apple's iTunes Store. These folks are all looking for differential advantages, and the battle for exclusive content is ongoing.

    Look for Netflix or Apple to announce deals with Showtime and other cable networks any day now.

    Published on: April 24, 2014

    Los Angeles magazine reports that personal shopping service Instacart, which already has been shopping at Whole Foods for residents of select area of Los Angeles, now is expanding its reach. The company is adding Costco and Ralphs to its roster of stores, and "expanding its local service to the neighborhoods of downtown L.A. and Culver City."

    The story notes that "the company employs a crew of 'personal shoppers' who, when an order comes in, run inside, buy your stuff, and drive it to wherever you are within two hours for a for a fee of $3.99. Or for $99 users can can subscribe to an Amazon Prime-like service called Instacart Express that waves delivery fees for one year on orders over $35. Grocery prices are set by Instacart, not by the stores, so you may end up paying a bit more for some items, and its up to the consumer to pay attention."
    KC's View:

    Published on: April 24, 2014

    • The Wall Street Journal reports that Walmart said yesterday that its executives have made "adequate progress" on resolving compliance issues designed to address allegations of systemic and systematic bribery of foreign officials by company officials looking to grease the wheels of global growth.

    The company had decided to link executive compensation to its compliance overhaul, and the Journal writes that on Wednesday, Walmart said that "executives had made enough progress on the timetable for implementing global compliance enhancements, that the board determined it did not need to hold back pay in that area … The compliance enhancements included areas such as anti-corruption, anti-money laundering, employment, licensing, environment, health and safety, Wal-Mart said in the (SEC) filing. But it didn’t give details of how executives performed on each specific measure."


    • The Associated Press reports that former Walmart CEO Mike Duke's pay dropped 73 percent last year "because he received a lower performance-based bonus and he didn't get stock awards that are given in anticipation of future performance." The APsays that Duke got a 2013 compensation package totaling $5.6 million, down from $20.7 million the year before.

    Duke has been succeeded by Doug McMillon, who, the AP writes, "received a compensation package valued at $25.6 million for 2013. The bulk of the package, $23 million, is in stock grants over three years that are linked to company performance goals."


    • Walmart also said yesterday that former former CEO Lee Scott won't stand for reelection to Wal-Mart's board at the company's annual shareholders meeting on June 6.
    KC's View:

    Published on: April 24, 2014

    • In Minnesota, the Star Tribune reports that "per capita U.S. butter consumption has hit highs not seen in about 40 years. The once demonized fat is downright de rigueur in cooking circles, a star on celebrity chef shows. It has become a natural food darling … Butter owes much of its comeback to its simplicity. Consumers have become increasingly picky about processed foods with lists of indecipherable ingredients."

    Overall, the story says, "U.S. butter sales by volume increased 5 percent last year."


    USA Today is reporting on rampant speculation that Starbucks could be about to acquire at least some percentage of SodaStream, the Israeli-owned company that "makes carbonated beverage machines that allow consumers to create their own sodas as a greener, cheaper alternative to bottled soft drinks."

    This is not the first time that SodaStream shares have been reported to be in play; last year, there were rumors that PepsiCo was interested in taking a position in the company.
    KC's View:

    Published on: April 24, 2014

    • The Wall Street Journal reports that Troy H. Risch has resigned from his job as RadioShack's executive vice president for store operations after little more than a year there, "to pursue other interests."

    Risch, a former Target executive, reportedly turned down a $275,000 retention bonus to stay at RadioShack.

    RadioShack is in the middle of considerable turmoil, with announced plans to shutter more than a thousand of its 4,300 stores, though tensions with lenders have meant that it is currently only focusing on the closure of 200. The bigger problem, of course, is that the retailer is perceived as out of synch with consumer and retailing tastes.
    KC's View:

    Published on: April 24, 2014

    …will return. Really.
    KC's View:

    Published on: April 24, 2014

    The world’s only Executive MBA in food marketing, from Saint Joseph’s University’s Haub School of Business, is now available online! This is the same, AACSB-accredited Food Marketing MBA that is offered on campus - with courses in finance, leadership, marketing strategy, sales, retailing, supply chain, and more - all designed to prepare food industry professionals for senior management positions in this great industry.

    Our first online classes begin in September and we have a rolling enrollment - so students may sign up any time. The program is self-paced but can be completed in as little as two years.

    For more information, visit www.sju.edu/executivefood .

    KC's View: