retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: June 13, 2014

    by Kevin Coupe

    Now this is my idea of looking into the future of retailing…

    Advertising Age writes about how home improvement chain Lowe's, looking to figure out what the future of its industry might look like, is using science fiction writers to help them.

    "A lot of companies have outside spaces, but we approach it in a different way, through science-fiction prototyping," says Kyle Nel, executive director of Lowe's Innovation Labs, where the company creates and tests new technologies. "You take all of your market research, all of your trend data and hire professional science-fiction writers. And they write real stories with conflict and resolution and characters. We turned it into a comic book and created possible stories or visions of the future."

    For example, one of those stories "involved giving homeowners the ability to envision remodeling projects with augmented reality."

    "Because it was a sci-fi story, it really opened up people's imaginations to understand what was possible," Nel says. "Now that we've gone through it, it seems weird we wouldn't work in this way."

    In a paragraph that sounds like it could have come out of "Star Trek," Ad Age writes that "the first project to come out of the Labs and science fiction-prototyping is the 'Holoroom.' The 20-foot- by-20-foot room allows customers to simulate renovation projects. Customers can create realistic rooms on an iPad -- stocked with anything Lowe's sells, right down to Valspar paint colors -- and then enter the Holoroom to experience a 3D version of the room. An app, paired with a printout of the room, allows customers to view and adjust their 3D creation at home, as well as share it with friends."

    It isn't a far jump, I think, from a Holoroom to a Holodeck and a Holosuite.

    Like I said, it's the final frontier….

    And an Eye-Opener.
    KC's View:

    Published on: June 13, 2014

    The Grocery Manufacturers Association (GMA) said yesterday that it has filed a federal lawsuit challenging the new Vermont law requiring the labeling of products containing GMOs. The suit has been joined by the Snack Food Association, International Dairy Foods Association and the National Association of Manufacturers.

    The statement announcing the suit reads, in part:

    "Vermont’s mandatory GMO labeling law – Act 120 – is a costly and misguided measure that will set the nation on a path toward a 50-state patchwork of GMO labeling policies that do nothing to advance the health and safety of consumers.  Act 120 exceeds the state’s authority under the United States Constitution and in light of this, GMA has filed a complaint in federal district court in Vermont seeking to enjoin this senseless mandate … The Constitution prohibits Vermont from regulating nationwide distribution and labeling practices that facilitate interstate commerce.  That is the sole province of the federal government."
    KC's View:
    I agree completely that a national standard is a far better way to go … and I look forward to the day when GMA decides to spend some of the money it has spent lobbying and advertising and doing battle against state GMO rules, and devotes it to some sort of national GMO labeling law. But that ain't gonna happen….

    Until, that is, we get to the point when retailers have to face down manufacturers in this issue. Because that's what a lot of retailers tell me they think will happen … that they inevitably will take the side of their shoppers, and shoppers want transparency.

    Published on: June 13, 2014

    The US Supreme Court ruled 8-0 yesterday that Pom Wonderful can sue Coca-Cola for what it views as misleading label claims, a ruling that is seen as having important implications for marketers, which no longer can rely on compliance with Food and Drug Administration (FDA) rules as protection against such charges.

    Pom Wonderful had gone to court to say that Coca-Cola misled consumers when it labeled a Minute Maid "pomegranate blueberry" product that only contained 0.3% pomegranate juice and 0.2% blueberry juice. Coke had said that it could not be sued because it met FDA regulations.

    The Supreme Court ruling does not validate the Pom claim, but rather just enables Pom to pursue its claim in the courts.

    "We respect the Court's decision and remain committed to clear labeling that fully complies with FDA regulations," Coca-Cola said in a statement. "The Court has decided that even though the name and label for our product was authorized by FDA regulations, Pom is entitled to present its legal claims to a jury. We intend to defend against Pom's claims that our labeling is misleading, and the evidence at trial will show that our product was not the cause of Pom's poor sales."

    Pom, of course, has skin in the game because it makes a pomegranate juice product that makes its own health claims.

    The Wall Street Journal reports that "the high court case is one of two closely watched marketing cases involving Pom Wonderful. The juice maker, owned by Los Angeles billionaires and philanthropists Lynda and Stewart Resnick, is on the defensive in the second case, which is under consideration by a federal appeals court in Washington. There, Pom is fighting Federal Trade Commission findings that it made misleading ad claims about the disease-fighting benefits of its products."
    KC's View:
    I'm no lawyer, so I'm probably unqualified to offer an opinion on this. But I think it is legitimate to suggest that something that is 0.3% pomegranate juice and 0.2% blueberry juice really isn't pomegranate/blueberry juice at all … or at least there is a little bit of bait and switch taking place. At the very least, this strikes me as something that ought to be litigated in the courts … and certainly in the court of public opinion. It is sort of the same thing that happens when you look at the ingredient list on some boxes of frozen blueberry pancakes and find out there really aren't any blueberries in them at all.

    It is interesting. Several stories about this case note that in oral arguments, Justice Anthony Kennedy said that "I think it’s relevant for us to ask whether people are cheated in buying this product," which prompted Coke's lawyer, Kathleen Sullivan, to respond, “We don’t think that consumers are quite as unintelligent as Pom must think they are … They know when something is a flavored blend of five juices and the nonpredominant juices are just a flavor."

    Justice Kennedy replied: "Don’t make me feel bad, because I thought that this was pomegranate juice."

    Sullivan's comments strike me as typical lawyer-speak, and Coke probably wants to be careful about heading in this direction. Because I think can be argued that while its lawyer says that they believe that consumers are intelligent enough to know the difference, marketers often depend on precisely the opposite. And consumers - when presented with the facts in the harsh light of day - know the difference.

    Finally, the irony is that when it comes to being accused of deceiving customers, Pom could be hoisted on its own petard.

    Fascinating cases. In the end, they are all about transparency and accuracy … and an environment that increasingly will be harsh to people and companies that obfuscate.

    Published on: June 13, 2014

    UPI reports that the city of San Francisco will put it to the voters whether to raise the minimum wage there to $15 per hour, the result of an agreement between business leaders and local politicians.

    The story says that "if passed, San Francisco's minimum wage would raise to $10.74, to $12.25 May 2015, then to $13 in July 2016 and $1 each year until 2018." The phase in is similar to the approach taken in Seattle, where the City Council raised its minimum wage to $15, though that increase is being challenged in the courts.
    KC's View:
    Democracy at work … though I think we can expect a lot of money to be spent on influencing opinions one way or the other.

    Published on: June 13, 2014

    Bloomberg reports that Uber, the car-sharing service that seeks to supplant much of the traditional taxi industry in many big markets, "is fighting its biggest protest from European drivers who say the smartphone application threatens their livelihoods."

    According to the story, "Traffic snarled in cities from London to Madrid and Berlin to Paris as strikes and gatherings by more than 30,000 taxi and limo drivers blocked tourist centers and shopping districts. They are asking regulators to apply tougher rules on San Francisco-based Uber, whose software allows customers to order a ride from drivers who don’t need licenses that can cost 200,000 euros ($270,000) apiece."
    KC's View:
    It's ironic. While the cab drivers were protesting by parking their cars in the middle of the street and trying to snarl traffic, it is a pretty good bet that Uber drivers were picking up fares and making some money.

    I'm sympathetic to the idea that the taxi drivers are seeing their livelihoods challenged … but that just puts them in good company, because pretty much every industry out there has either been challenged or is under threat of challenge.

    As I noted yesterday, I talked to a lot of people this week in Chicago who, while attending the FMI/United Fresh shows, used Uber when taxis were in short supply. I got a lot of email yesterday after I first noted this, and had people coming up to me on the floor of the exhibit hall to tell me about their Uber experiences.

    I think that traditional cab drivers perhaps would be better served if they examined their own levels of service, to see if there are ways that they could be more competitive. I get really tired of people who complain when they find that the rules of the game have changed, and that innovations threaten traditional business models.

    As Spenser says in several Robert B. Parker novels, "The ways of the Lord are often dark, but never pleasant." Adapt or die.

    Published on: June 13, 2014

    Amazon may be getting some bad press these days because of the pricing disputes with Hachette over books and Warner Bros. over DVDs that are preventing those companies' products from being sold on its site, but Fortune has a piece suggesting that we are living in an Amazon economy, and it is only going to become more so.

    You can read the entire story here, but essentially, here's the argument: Amazon is hiring a lot of people. (Whether these are high-paying jobs is another issue.) It continues to grow. That means that there are a lot of companies on which it depends that have to hire people to keep up with demand. That means they continue to grow. Sure, some people lose jobs because of Amazon, but the net effect remains positive.

    And it is likely to become more so over time.

    Check out the article. Form your own opinion. And then think about while you are waiting for Amazon to deliver whatever it is you ordered from it over the past 72 hours.
    KC's View:

    Published on: June 13, 2014

    CHICAGO - The Food Marketing Institute (FMI) yesterday announced the winners of its 2014 Store Manager Awards…

    - Category A (1-49 Stores): Larry Hack, Martin’s Super Markets, Granger, Ind.
    - Category B (50-199 Stores): Kate Allred, Lowes Foods, LLC, Clemmons, N.C.
    - Category C (200+ Stores): Randy Kruse, Hy-Vee, Inc., Ames, Iowa
    - Category D (International): George Katsifolis, Delhaize Group, Kalamata, Greece.

    The 2014 Store Manager Awards were announced at FMI Connect and winners each received a $1,000-prize and a crystal award.

    • FMI also introduced its new slate of officers this week, with Jerry Garland, president and CEO of Associated Wholesale Grocers, taking over as chairman.

    In addition to Garland, the 2013-2014 officers include:

    Vice Chairman, Wholesaler: J.H. Campbell, Associated Grocers, Inc.
    Vice Chairman Independent Operators: Kevin Davis, Bristol Farms, Inc.
    Vice Chairman, Member Services: Randy Edeker, Hy-Vee, Inc.
    Vice Chairman, Finance: Darioush Khaledi, K.V. Mart Co.
    Vice Chairman, Communications, Tres Lund, Lund Food Holdings, Inc.
    Vice Chairman, Public Affairs, Randall Onstead, Bi-Lo Holdings
    Vice Chairman, Industry Relations: Joseph Sheridan, Wakefern Food Corporation
    Vice Chairman, Food Safety: Colleen Wegman, Wegmans Food Markets
    KC's View:

    Published on: June 13, 2014

    • The Dallas Morning News reports that "Wal-Mart is testing healthcare clinics in three Texas stores that will charge its own employees $4 a visit if they are covered by Wal-Mart’s health insurance. The charge for everyone else, including customers, is $40."

    The program is seen as a way of delivering health care services to employees - 1.1 million of which are covered by Walmart health insurance - in a more efficient and effective way.
    KC's View:

    Published on: June 13, 2014

    • Associated Wholesalers, Inc. (“AWI”) today announced that President and Chief Executive Officer J. Christopher Michael is retiring from the Company after 41 years with the company. Matthew Saunders has been named President and Chief Executive Officer of AWI, effective immediately.

    AWI also announced today that the AWI Board of Directors has decided to pursue a sale of its White Rose Food subsidiary. This action is described as "a key part of steps AWI is taking to set a strategic direction that will provide the cooperative with the opportunity to refocus on AWI’s core legacy business – a business that was built on the entrepreneurial spirit of AWI’s members."


    United Press International reports that Missouri-based Fruitland American Meat has recalled more than 4,000 pounds of beef because of concerns about bovine spongiform encephalopathy (BSE), better known as mad cow disease.

    The Associated Press reports that "the products were produced between September 2013 and April 2014 and were distributed to a restaurant in New York City, another in Kansas City, Missouri, and a Whole Foods distribution center in Connecticut."

    It's not that the beef is infected. The problem is that, according to the story, "branches of the animal's central nervous system," also called "dorsal root ganglia," were not removed when the muscle was extracted. That's a "potentially fatal federal health violation," because it can be a carrier for BSE.


    Cincinnati Business Courier reports that Kroger plans to "build a massive $250 million distribution center in suburban Atlanta … The company plans to open it by 2015 and hire between 700 and 900 workers … The center will be more than 1 million square feet."


    • Yesterday, MNB reported that Anheuser Busch and Miller Coors were the targets of an online campaign to force them to disclose the ingredients in their beers. To this point, they have not had to because their industries are controlled by the Department of the Treasury, not the Food and Drug Administration (FDA).

    Well, USA today reports this morning that A-B has "rolled over," and has started posting its beer ingredients online.

    "As American consumer needs evolve, we want to meet their expectations," said Terri Vogt, vice president of communications of Anheuser-Busch, in a statement. "Therefore, we are working to list our beer ingredients on our website, just as you would see for other food and non-alcohol beverage producers."


    • Fresh & Easy said yesterday that it is continuing to expand its Wild Oats branded product selection, offering a broader range of Wild Oats Marketplace Organic and Wild Oats Marketplace items.

    "We are excited about bringing innovative new products to our customers and believe that FRESH is the natural evolution in organic food offerings," Jim Keyes, CEO of Fresh & Easy, said in a prepared statement. "Wild Oats products have been a huge hit and contribute to our mission to make Fresh & Easy the preferred destination for convenient, affordable and high-quality foods."
    KC's View:

    Published on: June 13, 2014

    • Ruby Dee, one of the most accomplished and long-lasting actresses of her generation, as well as a prominent civil rights activist with her late husband, actor Ossie Davis, has passed away. She was 91.

    When Dee and Davis were jointly received the Kennedy Center Honors in 2004, they were described as “one of the most revered couples of the American stage, two of the most prolific and fearless artists in American culture. As individuals and as a team they have created profound and lasting work that has touched us all. With courage and tenacity they have thrown open many a door previously shut tight to African American artists and planted the seed for the flowering of America’s multicultural humanity.”
    KC's View:

    Published on: June 13, 2014

    Got the following email from Tom Stenzel, president/CEO of the United Fresh produce Association:

    Kevin, I enjoy your biting commentary and edgy perspectives that make Morning News Beat the great read that it is.  But I have to take strong exception to your personal comments about Stewart Resnick and his company Wonderful Brands.  It’s great to share your views criticizing the fluidity or content of the Q&A session, but you went on a personal attack on a person and a company with no reason, and without the facts.  In fact, FMI and United asked Mr. Resnick to do the Q&A session; neither he nor his company asked for that role.  We had originally planned for both Leslie Sarasin and me to sit with Secretary Clinton to have a conversation, but the Secretary’s team required only one questioner.  We made the decision to ask Mr. Resnick if he would be the moderator, as we didn’t want to choose only one association for that role, and potentially confuse our members about whether one association was closer to Secretary Clinton than the other.  Your rant about Wonderful Brands is also a pretty cheap shot without all the facts – they’re a company pushing the envelope on health claims no doubt, but tackling some of the same issues that the broad food and beverage industry is facing trying to talk with consumers about the health benefits of their products.  You should cover those issues in depth if you want.  But it’s simply wrong to toss in unrelated vitriol about a company or individual, just because you didn’t care for the performance.  Keep up the satire and sarcasm, but you’re better than the snide attacks without the facts.

    I went back to read what I wrote over the past two days. I actually think that I was a lot tougher on Hillary Clinton than I was on Resnick, though upon reflection I'd probably change two words from yesterday's commentary. But I'll come back to that in a minute.

    I'm not sure I crossed the line into snide, but that may be in the eye of the beholder. I was - and usually am - going for sardonic. No matter. It is fair to say that I walked away from Tuesday night's Clinton speech and Q&A session in high dudgeon … I'm not even entirely sure why. The whole thing set me off - the lateness of her arrival on stage, the cursory nature of her attempt to customize her opening remarks, the over-rehearsed quality of the speech itself, and then an "interview" that utterly lacked in any spontaneity … made even worse by the fact that Resnick was completely out oh his element.

    Maybe that wasn't Resnick's fault. I completely accept the explanation that the Clinton camp put demands on FMI and United that created the situation, and that by trying to protect her from what could have been an engaging conversation admittedly without a safety net, they made the situation worse.

    It is possible that this is one of the things that annoyed me so much about Tuesday night. I have the utmost respect for both Tom and FMI's Leslie Sarasin, but I also think that Clinton - who, let's face it, has gone head-to-head with US senators, heads of state and her husband - could've handled anything they threw at her. But she - or her staff - played it safe. Big mistake, in my view.

    I've gone over in my mind what, if I'd been writing her speech for Tuesday night, she should've said. I think it might've gone something like this, at least in the first few minutes…

    One of the reasons it is such a pleasure to be with you today is because food has played a central role in our lives over the years. You all know that it wasn't that long ago that my husband loved to jog to McDonald's and never met a barbecue stand he didn't like. But years of bad eating habits caught up with him, and in the end he's had two heart surgeries, and now pretty much is a vegan. Which means that his dietary habits and changes reflect those of many Americans.

    But you see, we were lucky. We had terrific doctors. We had access to wonderful hospitals. We've enjoyed the advice and friendship of nutritionists and dietitians who guided us along our path. And, best of all, through it all we've had the pleasure of great food.

    Now, here's the good news. Most of us in this auditorium are, to varying degrees, the same way. We have access to health care and quality food and the kind of information necessary to make intelligent and informed decisions. But many people in this country don't. Not yet.

    So I'm here today to talk about my book, "Hard Choices," but I also want to ask you to make the choice to work together - with me - to change this. To commit to doing what we need to do in order to improve the quality of life for our citizens. To understand that helping people live healthier lives and eat healthier food - to want to adopt healthier lifestyles - is a matter of both common sense, good economics, and smart business - since both your employees and customers will live longer to buy more, and that's good for all of us.


    But she didn't. (And I suppose that people far smarter about such things than I am can point out all the reasons such a speech would not have made sense.) And because she retreated to the safe, I got irritated. And Resnick, who was part of the problem (even if not of his own making), got caught in the line of rhetorical fire.

    Now, let's get to my Resnick remarks…

    I am completely comfortable with my comments about Pom Wonderful. It has, in fact, been the subject of a long-running argument with the Federal Trade Commission over what the FTC says is deceptive advertising of health claims not supported by science. And that is all I said. (I was actually pretty careful about that.)

    I actually like guys who push the envelope. I do a little of that myself. But the confluence of a sponsorship by a company with that baggage and a politician on stage playing it safe (and maybe even playing with the facts a bit) was too much for me to resist, so I drew the connection. I think that was fair. I'm not sure it was so much a cheap shot as a cheap joke.

    As far as a personal attack on Resnick, I suppose some would suggest that my saying that he was wearing "an appallingly ugly pair of striped socks" crossed the line. But to be fair, I only brought up his wardrobe because I'd been criticized for mentioning Clinton's wardrobe and not his in my original column. And the socks were really awful.

    But I said earlier that I'd probably change two words from yesterday's commentary. Those words would be in the phrase, "as bad as the socks were, they paled next to the sheer incompetence of the way in which he asked questions."

    "Sheer incompetence" was maybe a little harsh. While Resnick had no idea what he was doing up on stage, a simple fact that was evident to every single person with whom I spoke after the event, it never occurred to me that it was as painful for him as it was for us, that he'd been placed in that uncomfortable position though no fault of his own … and so perhaps I could've - and should've - been kinder.

    But hey. Clinton is a professional politician and a multi-millionaire. Resnick is a hotshot businessman and a professional gazillionaire. I'm just a professional wisenheimer … I was fighting way above my weight class, trying to have a little fun.




    Let's get to something less controversial. Fatherhood. Except in this case, it is a little controversial, because it has to do with the comments that NY Mets second baseman Daniel Murphy made at a conference defending his decision to miss two games when his wife gave birth to his first child, noting that he'll be a husband and a father long after he's stopped playing baseball.

    I totally agree with him on this one, despite the carping of some that he let down his teammates.

    MNB reader Thomas Palmer wrote:

    I have to agree with you on Daniel Murphy’s decision. A baseball fanatic in my youth and a baseball and softball coach for 25 years through 4 children, I was present for every birth and cut every umbilical cord. I was even there for a C-section on one, taking the baby from the doctor while he put everything back together.

    Now a grandfather of 4 with more surely on the way, I have always thought that parenting and engaging with your children and their friends was a very special thing. My hats off to someone who thinks past the “kids game” - as Andy VanSlyke once coined it on TV regarding his disbelief in getting “paid to play a kids game and have fun” -  to things of the future!


    MNB reader Steven Ritchey wrote:

    At first when I saw the subject line, I thought maybe you’d been able to do something cool with your Dad, like the baseball road trip.  However, I agree with you wholeheartedly about Daniel Murphy.  There was a time when baseball was a real Scrooge, umpires didn’t get any days off during the season, so they missed important family events, were never home once the season started.  Baseball players were expected to stay with the team no matter what.  I’m glad to see that in some respects, baseball is joining the 20th or maybe even the 21st Century.

    While I expect the player to do the best they can every day, and  be loyal to the team, I expect loyalty from the  team to the player.  Mmmm, think maybe there’s a business lesson there.  I remember many  years ago, when Doug Melvin became the GM of the Texas Rangers, and he hired Johnny Oates to be his manager.  First training camp, Oates' wife got sick.  Melvin and Oates won my respect when Melvin allowed Oates to tend to his wife, drive her home across several states and make sure she was cared for before rejoining the team in spring training.  They showed me they had their priorities in order.


    And, from another MNB user:

    I'm totally with you on this one too as are countless others. And not because I am a mother and wife. Because I'm a PERSON with a heart and a brain. I think Murphy has it absolutely right. Good for him.

    Agreed.
    KC's View:

    Published on: June 13, 2014

    Chef is the most fun I've had at the movies in quite some time. Written and directed by, as well as starring Jon Favreau, who had moved on from low-budget movies like Swingers to high-concept comic book movies like the Iron Man movies and Cowboys and Aliens, Chef is a return to exuberant, low-budget form. Favreau plays high profile Los Angeles chef Carl Casper, who finds himself the unexpected subject of critical ridicule on a foodie website; when he tries to turn the tables on the critic, he finds that social media is not his friend, and he ends up out of work, with few prospects except, perhaps, a reality TV show.

    But that's not what he wants. It takes a while, but eventually his ex-wife, played by Sofia Vergara (who gets the award for best ex-wife in a movie, ever), convinces him to rehabilitate a broken down food truck and do the cooking he used to love doing. She's aware that Casper's career ambitions have marginalized their son, and she sees this as an opportunity to get them back together. Which it does, as they set off on a road trip of culinary excellence that starts in Miami and takes them to New Orleans, Austin, and, finally, a return to Los Angeles.

    Chef is filled with terrific performances - the aforementioned Favreau and Vergara, plus John Leguizamo as a sous chef along for the ride, Emjay Anthony as the son who yearns to connect with his dad, and Dustin Hoffman, Scarlett Johannson and Oliver Platt in extended cameos. It also is filled with sharply etched business lessons - the importance of not playing it safe, of doing what you love, and being open to constant learning and illumination. (Pay close attention to the scene when, just after the truck has opened,one of the sandwiches gets slightly burned. The scene takes less than a minute, but has an entire business course's worth of wisdom.)

    Best of all, Chef is likely to make you very hungry. I can't remember food being shot so lovingly in a movie, and there's a wonderful sequence during the credits that shows Chef Roy Choi teaching Favreau how to make perhaps the best grilled cheese sandwich ever made. Plus, Chef almost certainly is going to make you crave a cubano sandwich, since that is the food truck's specialty.

    Chef is a fun, exuberant and wise little movie. I'd take second and third helpings of a movie like this any day.




    My wine of the week … the 2011 Pazo Torrado Albarino from Spain, a bright and lively white wine that is wonderful with spicy seafood and pasta, but also lovely just to sip on a warm spring or summer evening.



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

    Slàinte!

    KC's View: