business news in context, analysis with attitude

Published on: October 22, 2014

by Kevin Coupe

"Fresh Talk" is sponsored by Invatron: Proven Technology.  Innovative Thinking.  Intelligent Solutions for Fresh.

Content Guy's Note: "Fresh Talk" is a new MNB feature, scheduled to alternate on Wednesdays with "Kate's Take."  It will examine all aspects of "fresh," in both the broadest and most focused meaning of that term (depending on the whims of the columnist). "Fresh Talk" is sponsored by Invatron...which you can learn more about here…but which has no input into the subjects covered or responsibility for the attitudes taken.

Two stories this week that strike me as emblematic of fresh food-related consumer trends….

Or, to put it another way, I've got good news and bad news.

Of course, the bad news probably isn't bad news at all, unless of course you happen to be a McDonald's shareholder.

The fast feeder said yesterday that its third quarter net income was down a whopping 30 percent to $1.07 billion, and Reuters reported that this reflected "traffic declines in every major region." CEO Don Thompson, who has only been in that job for two years and who may find that he is in the wrong place and the wrong time, conceded that his company is facing a kind of existential question: "McDonald's is in the business of satisfying customers and that will never fall out of favor. The question is what do you do to do that?," he told Reuters.

Thompson said that in order to re-establish some level of consumer relevance, "McDonald's is simplifying menus, tailoring food to local tastes, offering custom burger and sandwich options, rolling out mobile services such as payments and ordering, and opening a social media 'dialogue' with customers." But it remains to be seen whether this will be enough, at least in the short-term, to arrest the business decline.

The good news?

Well, I think it is the other side of the coin - that, according to the Produce Marketing Association (PMA), more than 40 retailers representing more than 19,000 stores across the U.S. and Canada supporting the ‘eat brighter!’ movement, which is using the Sesame Street Muppet characters as way of marketing fresh fruits and vegetables to kids.

Indeed Walmart reportedly has joined the list of companies joining in the program; it has already accepted Sesame Street-branded products from suppliers, according to published reports, and plans to sign a licensing agreement that will allow it to use the characters in approved ways to market fresh fruits and vegetables.

I can't help but think this is a good thing. There is no way that fresh fruits and vegetables will ever get the kind of marketing support and ad dollars that McDonald's is willing and able to throw behind its burgers, shakes and fries (and yes, salads, too). But from the time that MNB broke the news about the Sesame Street-themed program, which allows the use of the Muppets for no fee as a way of influencing in a positive way the eating behavior of young people, I've been convinced that this has the potential to be a game changer.

Are the decline at McDonald's and the industry enthusiasm for the initiative connected? probably not in any substantive way.

But maybe there's something happening here, even if what it is ain't exactly clear…

Published on: October 22, 2014

by Kevin Coupe

This morning's Eye-Opener is brought to you by Barnie's CoffeeKitchen…


Thanks to MNB reader Carl Jorgensen, who sent along this story from MulticulturalRetail360, detailing the decision by Mrs. Green's Natural Markets "to offer English as a Second Language (ESL) courses for associates across Westchester County, NY as part of a larger investment in its workforce."

According to the story, "Mrs. Green’s launched the ESL classes at six stores following requests from associates. One of the chain’s employees personally designed the curriculum and leads the language classes. The goal is to provide every employee with the confidence to speak to co-workers, customers, neighbors, friends and family in English."

And here's the key phrase, from the company's new CEO, Pat Brown:

Our associates are our most important asset. These language classes continue our efforts to invest in our own people and make sure they have the resources they need – from health benefits and good wages to quality training – to feel at home.”

Bingo.

(No surprise that Pat Brown's most recent job was as COO at New Seasons Markets in Portland, Oregon - a chain where, in my experience, people feel very much the same way about the place where they work.)

Kudos to Mrs. Green's … and an Eye-Opener for retailers who may not think that their employees are their most important asset.

Published on: October 22, 2014

The Wall Street Journal reports this morning that Target Corp. "is dropping shipping fees for all online orders from Oct. 22 through Dec. 20, raising the stakes in the battle with Amazon.com , Wal-Mart Stores Inc. and other retailers for shoppers who avoid brick-and-mortar stores … The promotion is one step Target is taking as it tries to bounce back from last year’s disastrous holiday season when a huge data breach hit the retailer in the weeks before Christmas, leading to its worst customer-traffic levels since it began reporting the number in 2008."

Of course, Target already offered free shipping for orders of $50 or more, or for customers using Target-branded credit or debit cards. Amazon offers two-day "free" shipping to people who pay to be part of its Prime program, or 5-8 day free shipping to to people spending $35 or more. And Walmart offers 6-9 day free shipping on orders over $50.

Published on: October 22, 2014

The Chicago Tribune reports that Sunset Foods in Chicago plans to join the Instacart network later this month,.

As the story notes, "Instacart hires independent personal shoppers who use their own cars to make deliveries, sometimes in as little as an hour. It currently has more than 300 such shoppers in the Chicago area delivering orders from chains including Costco, Jewel-Osco, Tony’s Fresh Market and Whole Foods."

According to the Tribune, "Along with Instacart’s usual delivery, which starts at $3.99, Sunset Foods shoppers can also choose curbside pickup at its stores for $1.99 per order. Those fees are well below the $10 online shopping and curbside pickup service Sunset Foods has been offering at three of its locations for a little over two years … Sunset Foods is going to send Instacart at daily file of items and prices, so pricing should reflect the store’s pricing, according to Steve Erl, e-commerce coordinator at Highland Park-based Sunset Foods."

Instacart was founded in 2012 and now operates in 15 US cities.

Published on: October 22, 2014

The Associated Press reports that CVS, which has pulled all tobacco products from its shelves as a way of demonstrating that it is more than just a drug store, but rather a part of the health care solution continuum, is going one step further to make its point.

According to the story, CVS "is developing a new tobacco-free pharmacy network that it will offer as a choice to employers and other clients of its Caremark pharmacy benefits management business. Employers, insurers and unions hire pharmacy benefits managers, or PBMs, to run their prescription drug coverage.

"The new CVS network will slap an extra co-payment on patients who fill their prescriptions at stores that sell tobacco. That payment won't apply to prescriptions filled at stores in the tobacco-free network, which would include CVS and Target or other stores that don't sell tobacco. Target Corp. quit selling tobacco in 1996."

Published on: October 22, 2014

• Marketing research firm Jumio is out with a mobile commerce analysis concluding that "although U.S. retailers are expected to enjoy the most successful mobile holiday shopping season ever," in 2014, "they will miss out on up to $8.6 billion in sales due to the prevalence of outdated mobile checkout experiences."

Published on: October 22, 2014

In Minnesota, the Star Tribune reports that "IKEA's U.S. division is raising the minimum wage for thousands of its retail workers, pegging it to the cost of living in each location, instead of its competition.

"The 17 percent average raise, announced Thursday, is the Swedish ready-to-assemble furniture chain's biggest in 10 years in the U.S. The pay increase will take effect Jan. 1. It will translate to an average wage of $10.76 an hour, a $1.59 increase from the previous $9.17.

"About half of IKEA's 11,000 hourly store workers will get a raise."

The story says that Rob Olson, the division's acting president, says that in making the decision "he was guided by its vision of 'creating a better life' for its workers. That will improve the company's relationship with employees and reduce worker turnover, which he says is already well below the retail industry's average."

Published on: October 22, 2014

• Reuters reports that Eataly, the upscale Italian-themed gourmet store, plans to open a store in London next year, in a joint venture with Selfridges, the British department store company.

The Eataly website notes that there are 27 Eataly stores in the world - 10 in Italy, 13 in Japan, and one each in New York, Chicago, Dubai and Turkey.


• The New York Times reports that Coca-Cola, which has been suffering through a decline in soft drink consumption, plans to cut its costs by $3 billion a year "through a variety of measures, like revamping its global supply chain. It did not specify how many jobs would be lost as a result."

Published on: October 22, 2014

• Ben Bradlee, the legendary Washington Post executive editor who led the paper during its coverage of the Watergate scandal that resulted in the resignation of President Richard Nixon under threat of impeachment, passed away yesterday at age 93.

Once referred to as the "last of the lion-king newspaper editors," Bradlee, with the support of owner Katharine Graham, turned the Post from a largely provincial newspaper into a world-class journalistic enterprise that was aggressive, innovative and even swashbuckling … which is to say, molded in Bradlee's personal and professional style.

In its obituary this morning, the New York Times writes that in his memoir, Bradlee said his journalistic goals were simple: “Put out the best, most honest newspaper you can today, and put out a better one the next day.”

Published on: October 22, 2014

I'm on the road, with limited time to go through email, so let me just make one quick point…which is to thank the enormous number of people who liked Michael Sansolo's column yesterday about the new Delta Airlines safety video, and almost all of whom get extra credit for getting the Star Trek reference in the video - "The Trouble With Tribbles."

Of course, if you were a total geek - like Michael and me - you also would've pointed out the terrific episode of 'Deep Space Nine" called "Trials and Tribble-ations" that serves as a great companion piece to one of the best episodes of "Star Trek"…

Published on: October 22, 2014

In Game One of the 2014 World Series, the San Francisco Giants ended the postseason aura of invincibility enjoyed by the Kansas City Royals, convincingly defeating the AL team that had gone through the playoffs without a single loss by the score of 7-1.

The best-of-seven series continues in Kansas City tonight.