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    Published on: June 5, 2014

    Article text.
    In anticipation of next week's Food Marketing Institute "FMI Connect" conference and exhibition in Chicago, MNB this week will feature interviews with three FMI board members.

    Today: Colleen Wegman, president, Wegmans Food Markets and the new vice chairman for food safety with the Food Marketing Institute.


    What is the biggest transition you think the industry is going to have to make over the next 10 years?

    Colleen Wegman:
    Our industry has consolidated and new forms of competition have emerged everywhere.  An important transition for the future is to focus on the end consumer, and ensure each business offers something uniquely positioned for its target segment.

    Customers in general expect more of our industry today.  Safety is a given in their minds, however, it requires constant attention and collaboration across our supply chain.  Especially as people are consuming more fresh products.  Our standards need to be consistently high across the industry with full transparency, traceability, and open sharing of best practices.  FMI is working hard to ensure this is happening, and we continue to improve.

    What do you think will be the biggest adjustment you'll have to make in your own company, and how are you laying the groundwork for it now?

    Colleen Wegman:
    Food safety remains a priority to our company, and our industry.  FMI considers Food Safety as one of its key strategic priorities.  This is not a competitive issue.  We are all only as strong as our weakest link here.

    What demands do you think an empowered consumer base will put on the food industry? How about an entire new generation of employees that make have different expectations of what the work experience should be like?

    Colleen Wegman:
    The consumer demands transparency, and deserves information at their fingertips.  It’s very evident with new generations that they are asking more questions and wanting to know the “why” behind what they’re being asked to do or support.

    Employees seek and deserve meaningful work, in a respectful environment.  Our industry is unique in that it employs more young people than most other industries.  We are the first job for most Americans.  We have a great responsibility to train the future workforce.
     
    How important do you think transparency (about product sourcing, nutritional info, GMOs, etc...) will be going forward, and is there a line you think retailers should not cross because it will be going too far?  Do you think that retailer priorities will always be in synch with supplier priorities in this area?

    Colleen Wegman:
    Transparency is critical.  GMO is the hot topic today.  We fully support a Federal standard for labeling foods that do not contain GMO.  Our job is to ensure safety in everything we sell.  The choice of consuming GMO should be up to the customer.

    What's the biggest - and in retrospect, the most important - mistake that you've ever made, and how did you grow from it?

    Colleen Wegman:
    You raise a good point here.  It’s fine to make a mistake once, as long as you learn from it and don’t make the same mistake twice.  I’m lucky enough to have opportunities to learn and grow everyday, whether I make mistakes or not.  Perhaps one important mistake I made early in my career was to try to do everything myself.  I clearly remember one of my mentors teach me to use my resources.  To involve people around me to do the work, and that they will enjoy it more, and so will I.  This has held true ever since.

    What is the most significant thing you do each week, and why?

    Colleen Wegman:
    Balance time between my priorities of family, work, and community.   This is an important value to our family company.

    What is the single-most important retailing rule that you've learned in your career, and how did you learn it?

    Colleen Wegman:
    To treat others the way you want to be treated.  From my parents, and then realizing business is no different when I began visiting stores with my dad since 5 years of age.

    If you had to define the most important aspect of leadership, what would it be and why?  (And, if you are so inclined, could you give an example of this quality in practice?)

    Colleen Wegman:
    Ethics, and remaining true to your core values.  There are many examples.  Stop selling cigarettes.

    My dad always taught us to lead with our heart.  Leading with your heart can make a successful business. That’s how free enterprise works.
     
    Bonus question:   What is your favorite movie, and why? (And is there a business lesson in it)?

    Colleen Wegman:
    The Wizard of Oz.  There’s no place like home.  Yes, a big business lesson there.


    Tomorrow: Randy Edeker, CEO, Hy-Vee, Inc.

    KC's View:

    Published on: June 5, 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, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    Every once in a while, one gets a dose of reality.

    I got one last weekend. Now, for a long time I've had some rotator cuff issues. They come and go, and a few times a year, my shoulder gets sore … and it usually just takes some aspirin and ice, and in a few days, all is well.

    But last weekend, it didn't seem to get any better. In fact, on Saturday, it seemed to get progressively worse … until by dinnertime, it was radiating up into my neck and down my arm. We'd been planning to go to a movie that evening, but when I said I didn't feel like it, that's when Mrs. Content Guy figured there really was something wrong with me. And when a guy my age starts having pain up and down his arm, apparently the first thing my wife and daughter started thinking about was that I was having a heart attack.

    Now, my wife said she didn't really think that I was having a heart attack. But as she escorted me to the car and drove me to the hospital emergency room, she said that we'd feel pretty stupid if I did have one and ignored the signs. Which is true.

    Now, here's how sick I am. All the way to the hospital, I'm thinking to myself that however this turns out, I'm going to get a FaceTime piece out of it. Especially if, as I fully expected, the Stamford Hospital emergency room turned out to be the bureaucratic nightmare I expected it to be. As Nora Ephron used to say, everything is copy.

    Okay, spoiler alert. I survived.

    When we first got to the emergency room, I described my symptoms. The receptionist asked which arm, and I told her it was my right one. She smiled and said that when people have heart attacks, the pain usually is in the left arm. Which made me feel better, until she said, "But not always." She took our insurance info and told us to have a seat in the waiting room, at which point I figured my long nightmare would begin.

    Except that in about five minutes, they came and ushered us to the back, where they did an EKG and checked me out. Everything was fine. But, because my dad has had heart disease and bypass surgery, they wanted to be sure…so they put us in a room and very quickly started a series of blood tests, plus sent me out for chest and shoulder x-rays.

    These doctors were about as fast, informative and pleasant as I can imagine ER doctors to be. We were out in about two hours, and they sent us off with a simple message: your heart is in great shape, your blood is fine, but you ought to go see an orthopedist. Which I did this week - apparently I have severe tendonitis in my rotator cuff, which required a cortisone shot (from a really, really big needle), as well as ice and a little bit of time. Whew.

    Still, it was an interesting and unexpected experience. I came away totally impressed by the emergency room. (Though to be fair, we hit them pretty early in the evening, so things weren't crazy yet. Also, I had good insurance, which I'm sure helps.) They were both efficient and effective, which is a great combination in any experience, but especially in a medical setting.

    Strange, though. I found it sobering to find myself in an age group where severe arm pain starts one thinking about heart problems (though Michael Sansolo points out that I've been in that demographic for a long time … I just never thought about it before). But I also came away feeling pretty good. Sure, my arm hurt, but I felt like I dodged a bullet … and I apparently have a great heart and great blood.

    It goes to show that even the kinds of experiences that we all think are going to be miserable don't have to be, at least not if the people in charge make it their business to think about it from the point of view of the customer. Whether it is supermarket shopping, or buying a car, or going to the emergency room … there is plenty of room to make these things positive experiences. It just has to be a priority. In other words, you'll excuse the pun, we have to take it to heart.

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

    KC's View:

    Published on: June 5, 2014

    by Kevin Coupe

    For those of you of a certain age, let me tell you a little something about history…

    There used to be just three major networks. And each night, for 30 minutes, a middle-aged white guy - with a name like Walter Cronkite or John Chancellor - would come on the air and deliver the news in stentorian tones, a voice of authority telling Americans what they needed to know about critical events during the past 24 hours. Cronkite, in fact, consistently was voted the "most trusted man in America."

    Things have changed. And there are several stories that illustrate this, to the larger effect of showing how the people who consume content (and lot of other things) have evolved.

    Last week, on his new "Last Week Tonight" show on HBO, John Oliver engaged in a detailed and, I think, fairly sophisticated - not to mention very funny - discussion of the concept of "net neutrality, about which the Federal Communications Commission (FCC) is slated to make a decision. (The debate is about whether major conglomerates should be able to pay for an internet fast lane to deliver specific content, or whether such fast lanes should be available to everyone and anyone.) Oliver capped off the segment by urging viewers to weigh in with FCC against preferential treatment for certain companies.

    The segment quickly went viral, generating more than 700,000 views online … and reportedly shut down the FCC website for a short time when so many people went to it to register their opinions. What really made this significant, Variety writes, is that the point of Oliver’s segment was that "big Internet providers have made the issue so boring that it is hard to draw journalistic attention." He challenged that notion … and seems to have done so successfully (though whether the FCC will pay attention is another story).

    Meanwhile, the Huffington Post reports that a recent study by the University of Pennsylvania's Annenberg Public Policy Center concluded that "The Colbert Report" on the Comedy Central cable network "did a better job of teaching people about campaign finance in the last presidential election than MSNBC, CNN, Fox News or broadcast evening news."

    The report said that the satirical new show "not only increased people’s perceptions that they knew more about political financing, but significantly increased their actual knowledge, and did so at a greater rate than other news sources."

    This isn't the first time that such a study has made similar conclusions. "The Daily Show," which precedes "The Colbert Report" in late night, has been cited as being a greater source of news to young people than "traditional" news sources.

    But it seems to me that the real issue is not how seriously such programs are taken by an increasing number of people. Rather, it is that the people who are watching these shows are treated to detailed, contextual discussions of important issues that don't get the same time and attention on other "news shows," which might feature celebrity interviews, pet stories, cooking segments and assorted other pablum, while Jon Stewart, Stephen Colbert and John Oliver focus on things like the elections in India, the crackdown on protestors in Egypt, campaign finance reform and net neutrality. Sure, they have an attitude … but so do the people who watch them.

    When Walter Cronkite famously did an editorial on CBS News that came out against the war in Vietnam, President Lyndon Johnson famously said that if he'd lost Cronkite, he'd lost the country.

    Today, the same could be said of Stewart, Colbert and Oliver.

    The broader lesson is this. There are a lot of traditional businesses out there that are ripe for the kind of disruption that these late night shows have provided to traditional news sources. And young people are ripe to be taken … so attention must be paid.

    It is an Eye-Opener.

    One other thing…Last night on his show, Colbert really took off on Amazon, being highly critical of the e-tailer in its dispute with Hachette … at least in part because, as he freely admitted, Colbert is published by Hachette, and suddenly his books are not available on Amazon. Not only did he discuss the issues involved, but he announced that his website has established a relationship with independent bookseller Powell's Books of Portland, Oregon … and he urged book buyers to shop there rather than Amazon.

    Let's see how he moves the needle. It could be yet another Eye-Opener.
    KC's View:

    Published on: June 5, 2014

    The New York Times has a long story about how, since revelations in late 2011 that the company had engaged in systemic and systematic bribery of Mexican officials to facilitate its growth there, a number of high-level executives who held critical positions during those events have departed from the company, "but no departure has been cited by Walmart as a way to clean house after those scandals."

    It was the Times that first reported the bribery scandal:

    "The federal investigation into Walmart’s global operations centers on whether the company violated the Foreign Corrupt Practices Act, a law that prohibits companies from bribing foreign officials. The Times reported in 2012 that Walmart consistently bribed public officials in Mexico for things like building permits to speed its expansion in that country. Executives at company headquarters in Bentonville learned of those supposed misdeeds in 2005 but subsequently shut down an internal investigation instead of reporting potential violations of the law to the United States government."

    Here is how the Times frames the new story:

    "While the investigations are still pending, Walmart has substantively changed its compliance structure and personnel, at times with great fanfare and at others without a whisper.

    "While the circumstances surrounding each executive’s departure are unclear, a pattern has emerged. At least eight of Walmart’s most senior executives in Mexico, India and Bentonville, Ark., have left the company since the latter part of 2011, when Walmart learned of The Times’s investigation. In the same two years, the company has revamped its global compliance program. In a move that swims against the current of Walmart’s corporate culture, the company has increased its compliance staff by more than 30 percent, to 2,000 people, in that short time.

    "Other changes the company has made - including mandating that any potential foreign corruption violations be reported to corporate headquarters and the board - may make it more difficult for senior executives to plead ignorance in the future.

    "It is in Walmart’s interest, particularly as it negotiates with federal prosecutors, to show how it has strengthened its compliance efforts." However, the new Times story makes the point that while Walmart has reported spending more than $400 million on its internal investigations, compliance programs and related legal costs (though, to be fair, the US Department of Justice has never officially confirmed or denied a probe into the Walmart bribery allegations), there are those who suggest that its compliance moves have been perfunctory or "window dressing."

    Fascinating story, and you can read the entire piece here (though you may be a Times subscriber to do so).
    KC's View:
    I've been carping here for some time about how long it seems to be taking for the feds to complete their probe, but the Times piece does assuage my anxiety a bit on this one, suggesting that probes into violations of the Foreign Corrupt Practices Act often can take years.

    It is interesting that so many top execs who may have known about the bribery practices have left the company, though Walmart denies that there is any connection. The one thing new CEO Doug McMillon needs to do, I think, is make sure that if and when the accusations really hit the fan and become something more - like indictments - he's got a clearly defined path on which to take the company … and that includes anticipating legal issues by moving pieces around the board to insure the greatest possible deniability and show some credible level of penitence.

    Published on: June 5, 2014

    The Los Angeles Times this morning reports that over the past couple of years, more than a dozen 7-Eleven franchisees have sued the company, accusing it of "stripping" them of their "successful stores in high traffic areas" for "bogus" reasons and then "flipping" them to new franchisees who paid higher fees.

    7-Eleven, however, "counters in court documents that some of those franchisees were stealing - depriving the company of its full share of the store profits, often by falsifying sales records. Company investigations led to hardball negotiations between the store owners and 7-Eleven, which pressured franchisees to give up their stores or face potential prosecutions, according to court records … The company has said in court documents that its asset protection agents rigorously investigate suspicious franchisee behavior, viewing hours of in-store footage, taking covert photos and tracing red flags in sales records."
    KC's View:
    This is an interesting piece, and I suppose it is a good thing that it will be decided in the legal system … because, on the face of it, it seems very much like a "he said, she said" sort of scenario.

    There are two things that seem very clear. One is that 7-Eleven spends tens of millions of dollars each year on personnel and technologies that can keep a close eye on franchisees, which suggests that the exhibits at trial will be revelatory. The other is that 7-Eleven knows that it needs to make sure that that its retail offering is consistent from place to place, as a way of protecting and growing its brand. Both of which, I think, are perfectly within its rights.

    Published on: June 5, 2014

    The Associated Press reports that Walmart is expanding its Savings Catcher online price comparison tool nationwide, after a seven-market test that allowed "customers to go to Walmart.com and compare prices of 80,000 grocery and household products at Wal-Mart with many of its competitors with physical stores. If the tool finds a lower price elsewhere, it refunds the difference to shoppers in the form of a store credit."

    According to the story, "The discount behemoth is the latest retailer to aggressively court customers with a price-matching policy. Wal-Mart and other stores long have offered to match the lower prices of competitors. But those programs only offer to match lower prices if shoppers do the research on their own, while Savings Catcher is designed to do the legwork for customers.

    "Wal-Mart is expanding its price-matching tool at a time when rivals are pushing ever lower prices. Wal-Mart built its business on offering the lowest prices on staples such as milk, bread and laundry detergent. But its 'every day low price' model is under attack from dollar stores, grocery stores and online retailers, including Amazon. On top of that, the retailer’s primarily lower-income customers continue to struggle in the economic recovery."
    KC's View:
    If Walmart is to take back its "always low prices" reputation, then it has to do stuff like this … and has to find a way so that online shoppers think of Walmart's website first, rather than after Amazon.

    Published on: June 5, 2014

    We've had a lot of discussion here on MNB about the quality of cafeteria lunches in public school districts around the country, and how they may be responsible in part for the nation's childhood obesity problems.

    Well, someone seems to be a business opportunity here.

    The New York Times reports that Revolution Growth, the investment fund co-founded by Steve Case, who also co-founded AOL, is investing $30 million in the conveniently named Revolution Foods of Oakland, California, which "makes healthier lunch meals for children."

    According to the Times, "It is the second food-related deal for Mr. Case’s fund, which invested in Sweetgreen, a 'farm-to-table' salad chain, late last year. While the fund is better known for backing technology companies, Mr. Case said that the food business — whether it’s school lunches or restaurant salads — was 'ripe for disruption' … Food is a big part of our lives, and healthier options are going to become increasingly important."

    The story says that Revolution Foods, "which was founded in 2006 by Kristin Groos Richmond and Kirsten Saenz Tobey, originally focused on selling lunches to schools, and it says it now serves over one million meals a week at over 1,000 schools in 26 cities in the United States, including New York, Washington and Los Angeles.

    Last year, it introduced prepackaged meal kits in grocery stores, with the aim of giving children a healthier alternative to Lunchables, a competing brand. Its prepackaged business is smaller, though the company says it sells the meal kits at 2,000 store locations across 50 cities.

    "When its fiscal year wraps up at the end of this month, the company expects to have revenue of more than $80 million, according to Ms. Richmond, who is the chief executive."
    KC's View:
    Big idea. Especially because ideally it will take away any excuse that school districts have to serve slop. The bigger question is why some local food retailers have not figured out a way to offer this kind of service to school districts themselves.

    Published on: June 5, 2014

    The Wall Street Journal reports that Google is expanding its Google Shopping Express overnight service "across northern California so that it will stretch from the Oregon border to Fresno, roughly 400 miles to the south." To this point, it has been operating in San Francisco, Los Angeles and New York, using its own vans to make deliveries ordered online or via mobile from retailers that include Target, Toys R Us, Walgreen and Whole Foods; the expansion will have Google using third-party carriers to make deliveries.

    The goal of the service, at least in part, is to provide competition with Amazon and Amazon Fresh.
    KC's View:
    One gets the sense that the roads are going to get a lot more crowded, as more and more companies get into the overnight delivery service. In fact, it may be that before too long, not being in overnight delivery will be seen as a competitive disadvantage.

    I'm glad I don't have to get in my car to commute anywhere.

    Published on: June 5, 2014

    Good piece in Fast Company about how "too many choices exhaust us, make us unhappy and lead us to sometimes abscond from making a decision all together. Researcher Barry Schwartz calls this 'choice overload.' And it's not just insignificant details like which brush to wipe the inside of the toilet with--having too many choices in our creative and professional lives can lead us to avoid making important decisions … Understanding how and why we make decisions can perhaps help us make better choices down the line."

    This isn't a new topic. Schwartz wrote "The Paradox of Choice: Why More Is Less" back in 2003. But it is worth taking a look at here, if only to see the context for the revelation that Amazon sells 1,161 kinds of toilet brushes.
    KC's View:
    I've long been the proponent of the notion that more retailers ought to edit their grocery selections … that they could actually drive sales and customer loyalty by doing a better job culling and curating selection, making recommendations rather than just putting stuff on the shelves. So I find this fascinating.

    Published on: June 5, 2014

    Amazon is scheduled to hold a new product launch event in Seattle on Wednesday, June 18 … and customers can sign up to be invited on its home page, which features a video of customers looking at the new product (which is unseen) and raving about it.

    Speculation is that the product could be a 3D smartphone.
    KC's View:
    Whatever it is, we know two things.

    It will be designed to help customers buy more stuff via Amazon.

    And at least in the short term, it won;t have any books published by Hachette.

    Published on: June 5, 2014

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

    • Mi Pueblo Foods, the financially troubled California-based Hispanic grocery chain, said yesterday that it has emerged from bankruptcy, after having worked "closely with its vendors and creditors … to reach mutually-beneficial agreements that will best position Mi Pueblo for a successful reorganization," plus receiving $56 million in financing from Chicago-based investment Victory Park Capital.

    As part of the reorganization, the company announced that it has a new president/CEO, Javier Ramirez, described as having "a proven track record of leading operational improvement strategies, developing strategic expansion initiatives, and accelerating growth in profitability." He succeeds founder Juvenal Chavez, who becomes chairman of the board.


    • The Midland Reporter-Telegram reports that "following Albertsons LLC’s, recent acquisition of Lubbock-based United Supermarkets, Midland’s three Albertsons grocery stores will soon be operated by United and rebranded as 'Albertsons Markets'." The story says that the name change will be tied to a store-wide price cuts.


    TheDrinksBusiness.com reports that Coravin, manufacturer of what it called a "transformational wine access system" that allowed people to get wine out of a bottle without having to pop the cork, but rather by using a thin needle, now has stopped selling the product and is warning people not to use it "after it caused a number of wine bottles to explode."

    The company posted the following note on its website:

    “It has come to our attention that, in certain circumstances, wine bottles can burst when used with the Coravin System, presenting a risk of lacerations. We believe the likelihood of this occurrence is very rare since wine bottles are designed to withstand significantly greater pressure than the low pressure the Coravin System places into the bottle. Nevertheless, Coravin has now received seven reports of bottles bursting including one report of a laceration.

    “We have voluntarily reported these incidences to the US Consumer Product Safety Commission (CPSC) in anticipation of a recall. We have submitted a Corrective Action Plan to update the Coravin System instructions and warnings and will provide all existing and future customers with a remedy package that includes a neoprene wine bottle sleeve for use with the Coravin System.

    “We have voluntarily stopped selling and shipping Coravin Systems until we can fully implement an approved Corrective Action Plan. We are hopeful that in the next 30 days Coravin will be receiving, processing and beginning to ship remedy packages to our customer base. Once we have received approval for the Corrective Action Plan we will begin shipping Coravin Systems containing a wine bottle sleeve. We hope this disruption will be over in July and apologize to you for the inconvenience.”

    As one MNB reader said yesterday when sending me this item, can you imagine how different things would be for GM if it had behaved this way, instead of the way it did?


    • The National Retail Federation says that it expects Fathers Day spending to decline "a bit" to $12.5 billion this year, with those buying gifts likely to spend 113.80, compared with $119.84 last year.


    • The Los Angeles Times reports that apparently 105 Los Angeles stores and 127 San Diego stores is not enough for Starbucks, which now has a food truck in Southern California,"dedicated to the company's ever popular frozen beverage, the Frappucino. A selection of their signature flavors will be available, along with some limited-time offerings, including Mocha Cookie Crumble and Caramel Ribbon Crunch. The truck doesn’t offer any other Starbucks drinks besides the frappé."

    According to the story, "The rainbow coffee caravan launched in San Diego on May 15 for a two-week stint, and is now rolling in Los Angeles. It will be based in L.A. until June 15. It will stop at classic L.A. destinations, such as Hollywood and Highland, the Venice Beach boardwalk and the Hollywood Bowl. The truck will tour cities around California until June 30."
    KC's View:

    Published on: June 5, 2014

    • Don Zimmer, one of the most iconic figures in the history of baseball, passed away yesterday at age 83. He underwent heart valve surgery a few weeks ago, and since then was diagnosed with fibrosis on his lungs; he's also been taking dialysis treatments for the last couple of years.

    Zimmer, described by the New York Daily News obituary as "one of the game’s all-time good will ambassadors, humorists and raconteurs," began his career as a Brooklyn Dodger, later played for the original 1962 New York Mets and the Washington Senators, endured two serious beanings, was a lifetime .235 hitter, married his wife in 1951 at home plate before a minor league game in Elmira, New York, and later went on to manage both the Boston Red Sox and the Chicago Cubs before becoming a bench coach for the Joe Torre-managed New York Yankees team that won four world championships.
    KC's View:
    We should all go through life with as much joy and gusto as Don Zimmer appeared to enjoy. And it seems like pretty much everyone who knew him personally said that he was the best person they ever knew. The Daily News got it right: "Baseball is forever poorer with the passing of Don Zimmer."

    Published on: June 5, 2014

    …will return.
    KC's View: