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    Published on: June 12, 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, coming to you this morning from Chicago, where I am attending the Food Marketing Institute (FMI) Connect and United Fresh shows. Behind me is what is billed as the Retail Experience of the Future, which to my mind is interesting mostly because it illustrates just how difficult it is to predict the future.

    The emphasis here is on what the store and shopping experience will be like in 10 years, but that's really hard to predict, especially because change happens so fast … and to be honest, many of the innovations show already exist in various iterations, or on the verge of existing; very little seemed to me to be a decade away.

    For example, there's a presentation about frictionless check-out…but when you think about it, IBM did a TV commercial about that concept a decade or so ago. There's also a presentation about mobile applications, and how smart phones will be able to customize lists and buying experiences based on preferences and past behaviors, but that hardly seems like a radical notion. The use of iBeacons is one of the more exciting ideas presented; they allow retailers to target consumers when they're standing in front of a display, giving shoppers targeted messages and deals based on proximity and demonstrated interest … but they actually are being today by MyWebGrocer. (Full disclosure: MWG is a longtime MNB sponsor.)

    I don't mean to sound critical here. In fact, I think this is mostly good news, because if it points out how hard it is to predict the future, it also suggests that there are a lot of tools out there that can help businesses be a lot more efficient and effective. But it seems to me that the real issue is not when technology is available, but how quickly and enthusiastically retailers are willing to embrace these possibilities and opportunities, to disrupt their businesses from within.

    They'd better. If they don't, someone else will. That "someone else" is called competition.

    Even some of the folks responsible for this installation imply in conversation that, to quote Shakespeare, the fault is not in our stars but in ourselves … or, in other words, that the biggest impediment to retail disruption is food retailers' unwillingness or inability to believe that fundamental disruption can affect this industry. These experts worry, if I get their gist, that many food retailers essentially believe that if they can get their horses to go faster and straighter and longer, people won't really need cars. And we all know how that worked out.

    One other thing. I think that it is critical, as retailers consider all these possibilities and opportunities, that they not allow themselves to be distracted. For example, if there's one question I've been asked the most while in Chicago, it is what I think about the rumored acquisition of Whole Foods by Publix. What I think is that it makes absolutely no sense whatsoever, and in fact strikes me as the kind of deal that was dreamed up by some analyst with little understanding of retail fundamentals but a very large craving to end up on CNBC.

    The same goes for the other one I heard - that RadioShack's terrible numbers create an opportunity for Amazon to come in and buy the company and give it a bricks-and-mortar presence. This strikes me as absurd … that the last think Amazon would want is to be anchored to earth by such a fleet; I had the same reaction a few months ago when there were rumors that Amazon might be Sears.

    Disruption, not distraction. That's what people ought to be focused on, and 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: June 12, 2014

    by Kevin Coupe

    I was at an event last night in Chicago, and was speaking to some folks who'd gotten there a little later than expected. The problem, they said, was that at the McCormick Place convention center, there were about 200 people waiting for cabs - and no cabs.

    They'd circumvented the problem, he said, by using the Uber application on a smartphone, which allows passengers to instantly connect with private drivers … in just a few minutes, a large black SUV showed up, picked up his group, and then delivered them to the party. The cost? $40 - higher than a cab would've been, but worth it because there were no taxis to be found.

    I didn't know a lot about Uber, though I'd certainly heard of it; I'd even had a Chicago cab driver complaining about it was wrong that he'd paid so much for a taxi license and had to follow certain rules, and that Uber drivers could put him out of business.

    I think that's called disruption.

    Then, just in the last 12 hours, there have been a number of stories in the media about Uber - especially because cities are trying to figure out how to regulate a business that so far has defied regulation, and is costing some of these cities revenue.

    But what is clear in most of the stories about Uber - which I have yet to try - is that consumers like it. It isn't a perfect service, but people seem to like the fact that it is highly responsive to their needs, and that while costs are different from traditional taxis and limos, the numbers are transparent and seem fair.

    In other words, it is a system designed for consumers, without the shackles of legacy systems and traditional rules.

    It never stops. It pervades every industry. it changes lives and businesses.

    And it consistently is an Eye-Opener.
    KC's View:

    Published on: June 12, 2014

    Oceana, the environmental advocacy group, has released an interactive map that is designed to show what it calls "the global reach of seafood fraud," compiling the results of more than 100 studies from 29 countries and every continent except Antarctica.

    The average level of seafood fraud in these various markets, weighted for sample size, is said to be about 22 percent, though the per-case instances range from 1.5 percent to 100 percent. There have been studies in the US suggesting that between one-fifth and one-third of wild-caught seafood imported into the United States "comes from illegal, unregulated and unreported or 'pirate' fishing."

    The examples cited include fish that have been deliberately mislabeled so that suppliers could charge a higher price than they might ordinarily get, or misidentified so that "endangered species" rules can be circumvented. In addition, mislabeled seafood can create safety problems since they allow people to consume harmful compounds such as neurotoxins that can cause severe health issues.

    “Seafood fraud is a global problem that requires a global solution,” said Beth Lowell, campaign director at Oceana. “Because our seafood travels through an increasingly long, complex and non-transparent supply chain, there are numerous opportunities for seafood fraud to occur and illegally caught fish to enter the U.S. market."

    The map can be accessed here.
    KC's View:
    This is not necessarily the kind of story I would have paid a lot of attention to, once upon a time … but I am persuaded that I need to do so because of the story we had here about the recent court ruling that said, essentially, that retailers are totally responsible for the products they sell, and are culpable for problems in the supply chain that affect their shoppers, even if they had no knowledge about or power over how the products are produced. The specific case had to to with Walmart and its responsibilities for the 2011 Jensen Farms cantaloupe Listeria outbreak … but the implications are far-reaching.

    (You can read our story here.)

    I said it before and I'll say it again: It does not matter to shoppers how long and complicated the supply chain may be … they buy products from stores, and will ultimately hold stores responsible for what they sell. Which means that retailers need to understand the supply chain in an intimate way, if only so they can protect themselves and their shoppers.

    Ignorance may not be a legitimate defense if retailers are selling seafood that is what what they say it is. If retailers find themselves in a position where they have to defend themselves in the courts, not to mention the court of public opinion, they will already have lost.

    Published on: June 12, 2014

    In the Food Marketing Institute (FMI) annual Supermarket Chef Showdown, Chef Rachael Perron of Minnesota's Kowalski's Markets was named Grand Champion for her Greek Grain Salad with Dilled Feta Dressing, which also won in the Healthy Meals category.

    The other categories and winners were

    • Family Meals - Keoni Chang, Foodland Super Market, Korean-Style Hillshire Farm Dogs with Kimchi Slaw and Alexia Garlic Sweet Potato Fries.

    • Ethnic Meals - Andrew Kintigh, Hy-Vee, Inc., Moroccan Style Chickpea and Kale Stew with Date Gremolata.

    • Side Dish/Mini Meals - Erin Horton, Orchard Fresh, Mediterranean Chicken Meatballs.

    • Desserts - Michael Brady, FRESH by Brookshire's Grocery, Banana Beignets.

    Twenty four chefs competed across five categories in front of a live audience on the exhibit floor of FMI Connect. The chefs were challenged to create meals in less than 20 minutes featuring products from Supermarket Chef Showdown sponsors, including McCormick’s and Cans Get You Cooking.
    KC's View:

    Published on: June 12, 2014

    The Detroit Free Press reports that the PF Chang's China Bistro chain "is investigating a report of a possible data breach involving credit and debit card data that may have been stolen from its restaurant locations nationwide.."

    The Krebs on security website says that "on June 9, thousands of newly-stolen credit and debit cards went up for sale on … an underground store best known for selling tens of millions of cards stolen in the Target breach. Several banks contacted by KrebsOnSecurity said they acquired from this new batch multiple cards that were previously issued to customers, and found that all had been used at P.F. Chang’s locations between the beginning of March 2014 and May 19, 2014."

    The security website says that "the most common way that thieves steal this type of card data is by hacking into cash registers at retail locations and 'planting malicious software that surreptitiously records mag stripe data when cards are swiped through the machines'."
    KC's View:
    This should be taken very seriously. Though, to be honest, I wish that someone would hack into PF Chang's systems and do something to improve the quality of its food.

    Published on: June 12, 2014

    NBC News reports that Chinese e-commerce giant Alibaba has launched a beta version of its site, 11main.com, which it says will feature a broad array of products, including one-of-a-kind items not usually available at other mass retailers.

    According to the story, Alibaba control 80 percent of all online retail in China, had sales of about $250 billion in 2013, and is expected to raise more than $15 billion in a soon-to-come IPO.


    Reuters reports that Amazon "plans to launch a marketplace this year for local services, a broad term that encompasses anything from baby sitters to handymen." The move would position Amazon directly in competition with consumer review sites such as Angie's List and Yelp.
    KC's View:

    Published on: June 12, 2014

    The Washington Post reports that an acquisition of Hillshire Farms by Tyson Foods reflects a great deal of centralization in that industry: the top four US beef packers - Tyson Foods, JBS USA, Cargill, and National Beef - control between 75 and 80 percent of the US beef market, depending on who is doing the calculations. Fifty years ago, those four firms controlled about 25 percent.

    The problem? The Post writes that "consumers are becoming increasingly more concerned with how their meat is produced. Part of that is born from a demand for more humane practices—the meat industry's malpractices are well documented—and part of that stems from a heightened awareness about what people are putting into their bodies—the meat industry has come under fire for both its questionable practices and potential for large-scale contamination. An ever-shrinking pool of options will only make it more difficult for consumers."
    KC's View:

    Published on: June 12, 2014

    The Associated Press reports that the Washington, D.C.-based International Franchise Association is suing the Seattle City Council, which recently voted to raise the city's minimum wage to $15/hour over the next three years.

    According to the story, the association says that the law is unfair to small franchises: "For example, it says an independently owned Holiday Inn Express in Seattle with 28 workers is considered a 'large' business under the law, because Holiday Inn franchises nationally have more than 500 workers. Meanwhile, other Seattle companies with up to 500 workers are considered ‘'small’' and given extra time to adopt the wage.
    KC's View:
    This strikes me as a legitimate complaint … and ought to be addressed by lawmakers.

    Published on: June 12, 2014

    • The Christian Science Monitor reports that "the European Union's antitrust regulator has launched an investigation into tax deals that Apple, Starbucks and Fiat struck with some European countries, the start of a wider push to keep multinationals from taking advantage of loopholes. EU antitrust commissioner Joaquin Almunia said Wednesday a preliminary probe by his office has found the arrangements are improper, though the companies as well as the countries involved — Ireland, the Netherlands and Luxembourg — must be given a chance to respond."

    While tax deals are allowed, they apparently go too far when they give certain companies a financial advantage over competitors that don't get the same deal.

    I'm no lawyer, so I have no idea if these deals are legal or illegal. But it occurs to me that of course these tax deals give certain companies advantages over others … isn't that the whole point of a tax deal?


    • Starbucks and Duracell have announced a partnership that will lead to the installation of wireless phone chargers in Starbucks and Teavana locations around the country.

    "Starting at stores in the San Francisco Bay Area," USA Today writes, "consumers will be able to set their cellphones down on designated spots on their tabletop, and their batteries will charge as they eat, drink, read or chat. No plugs. No cables. No cost. No joke.

    "Over the next three years, more than 100,000 table chargers — built-in Powermat charge pads — will be installed in Starbucks' 7,500 company-owned stores in the U.S. That's about a dozen per store."


    USA Today reports that Anheuser Busch and Miller Coors "are getting cold water thrown on their long-held policies of not disclosing all of the ingredients in their brews."

    The reason beer is not required to have its ingredients labeled is that the industry is regulated by the Department of the Treasury, not the Food and Drug Administration (FDA). But now food blogger and nutritional activist Vani Hari, creator of FoodBabe.com, has launched an online campaign to change the rules and mandate ingredient labeling.

    The paper writes that "among the ingredients Hari has discovered in some beers sold by the big beer makers: Prolyene Glycol, which is commonly used in airplane de-icing liquids, but used by some beermakers to control the head on their beers. Also, something called Isinglass, which comes from fish swim bladders, is used to make beer more clear. Some use high-fructose corn syrup, artificial colors and stabilizers that are linked to intestinal inflammation, she says."


    • Disgraced former Food Network star Paula Deen said this week that she will launch an subscription-only online cooking network this fall, with fee-paying fans able to access videos, recipes and cooking tips at any time.

    Time notes that Deen "lost most of her endorsements, her book deal and her TV deals in 2013 after she acknowledged having used racial slurs—including the N-word—in the past."

    "The fans are going to see things they have never seen before," she tells Time. "They are going to see all of me."

    As far as I'm concerned, I've seen and heard about as much about Paula Deen as I care to.
    KC's View:

    Published on: June 12, 2014

    Just a quick note this morning as I head over to FMI/United Fresh…

    Yesterday, in my coverage of Tuesday night's speech by Hillary Clinton, I wrote that she was wearing a pink blazer and black pants. It was noted to me in several emails, as well as in person as I walked the show, that I'd made a classic misstep - that I had described her clothing while not saying anything about what was worn by her nominal questioner, Stewart Resnick of Wonderful Brands. That's not fair, the messages clearly stated.

    Which is absolutely correct. I was wrong.

    When I wrote the words, it was because I had noted she'd been wearing the same outfit earlier in the day at a NY-area book signing, and I was impressed that despite the plane trip to Chicago and the lousy weather, she hadn't changed. (I would have, if I'd been giving a speech … especially at those prices.) But I never followed through on the thought, which made what she was wearing irrelevant. I was wrong.

    Just for the record, Resnick looked to be wearing a dark gray suit, white shirt, tie and what appeared from a distance to be an appallingly ugly pair of striped socks. But as bad as the socks were, they paled next to the sheer incompetence of way in which he asked questions, the lack of spontaneity in the answers Clinton offered, and my amazement that she wanted to be onstage with a guy who owns a company that has been the subject of deceptive advertising charges by the Federal Trade Commission (FTC).

    I hope I've cleared up the controversy. I'll try not to make the same mistake again.
    KC's View: