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    Published on: April 30, 2015

    Article Text

    Hi, Kevin Coupe here, and this is FaceTime with the Content Guy.

    I've gone on record here as being a big proponent of targeted marketing, and being a little tired of efforts by retailers and manufacturers that seem totally irrelevant to who I am and what I want and need.

    I crystalize it this way. I don't like cats. I love dogs. Don't send me cat food coupons. If you send me cat food coupons, you immediately prove that you are just throwing stuff against the wall to see what sticks. You are wasting my time and your money. I often cite FSIs as a prime example of this approach - almost never open them, never read them, because they simply are irrelevant.

    Now, to be clear ... I understand that there are some folks who still like and use such promotions and ads. But I also think that the tide is turning because of the advantages of technology, and these mass, poorly defined approaches to marketing are going to wither away and die.

    Except ... and there's always an except ... there are times when targeting can cross the line.

    Recently, we've been getting robocalls at the house that begin this way: "Hello, seniors!"

    To which my response would be: "Goodbye." Or would be, if I didn't hang up the phone so quickly.

    I may be 60 years old, but calling me a "senior" is not exactly the fastest way to my heart.

    Now, to be clear ... I'm not one of those guys who is desperately hanging onto youth, dressing in inappropriate clothing, dying my hair, driving a convertible and chasing women half my age as a way of proving I've still got it.

    (Okay. I have a convertible. A 2014 Mustang convertible. But at least I'm not dying my hair, wearing inappropriate clothing and chasing young women.)

    But I still resist the "senior" definition, if only because I think that I, and a lot of people my age, feel way too young to accept that classification. "Senior" suggests something that I'm just not comfortable with ... and companies marketing to me better be careful about using that term.

    In this case, using the word "senior" is only slightly more targeted than sending me cat food coupons.

    And while I'm ranting ... I got this thing in the mail from a local senior living community the other day, and using things like "free computer lessons" as a way of getting me in the door to check out the facilities.

    Well, for the record...I've been using a computer for something like 30 years. I placed my first order on Amazon in 1997. I don't need computer lessons, much less an apartment in a place filled with old people.

    To me ... and I don't think this is just me ... the best way to remain active and interesting is to remain engaged and interested. I want to be around lots of different people, not just lots of people my own age and older.

    I'm a big fan of the Jimmy Buffett song: "Growing Older, But Not Up," especially the chorus:

    I'm growing older but not up
    My metabolic rate is pleasantly stuck
    So let the winds of change blow over my head
    I'd rather die while I'm living than live while I'm dead.

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

    KC's View:

    Published on: April 30, 2015

    In a letter sent to US Senate and House of Representative leadership, a numb er of food industry companies and associations have come out in support of legislation that would increase the US Food and Drug Administration’s (FDA) food safety budget by $109.5 million, to be used for Food Safety Modernization Act (FSMA) implementation.

    The letter argues that the Food Safety Modernization Act (FSMA) makes  prevention a  cornerstone of our nation’s food safety strategy, saying that "it includes new requirements for manufacturers and provides the FDA with the authorities it needs to adequately fulfill its food safety mission. This new focus on prevention and expanded authority as granted by Congress necessitates an update and increase to FDA’s food safety tools, from regulations to infrastructure.”

    The letter goes on: "Our commitment to food safety is steadfast and we need a strong FDA as our partner to fully implement FSMA and to play its proper role in ensuring the safety of the nation’s food supply. With the additional $109.5 million in new budget authority requested by FDA, we also welcome congressional oversight; not only to ensure these investments are implemented effectively, but also to make certain that the agency’s regulatory implementation of FSMA is consistent with what the law requires, and what Congress intended in adopting the law."

    Signatories include the American Bakers Association, the American Frozen Food Institute, Campbell’s, Inc., Cargill, Inc., Coca Cola, Costco, ConAgra, Dannon, General Mills, the Grocery Manufacturers Association the International Bottled Water Association, Kraft Foods, Land O’Lakes, Mars, Nestlé, PepsiCo, Produce Marketing Association,Tyson, Unilever, Wal-Mart, Kellogg's, and the American Spice Trade Association.
    KC's View:
    Good. There are too many people and companies arguing that this law is an overreach, and that if they just wait long enough, FDA can be de-fanged and the legislation made moot.

    Look, I'm not an enormous fan of the FDA. But events have proven that we need to do more on the issue of food safety ... that we need greater transparency, trackability and traceability ... and that companies abusing the public trust need to be held culpable.

    Fund the damned thing. Let the process work. In the long run, it is in the consumer's interest, and the industry's.

    Published on: April 30, 2015

    The Wall Street Journal has a story suggesting that there is a strong feeling among retailers and consultants that a perceived consumer desire for same-day delivery is "overblown," and that the retailers (among them Amazon, Walmart, and Macy's) "scrambling" to get their products to online shoppers faster and faster may in fact be focusing on the wrong target.

    "Some logistics experts are skeptical," the story says. "Satish Jindel, president of SJ Consulting Group Inc., said same-day service is the most expensive type of delivery to provide, and something customers aren’t willing to pay for." And, the Journal writes, "A 2013 survey of online shoppers by researcher comScore Inc. showed 92% were willing to wait four or more days for free delivery. The shoppers said they choose the most economical shipping option three-quarters of the time and the fastest option only 1% of the time."

    Sean Monahan, partner at A.T. Kearney, tells the Journal that "there are some 'irrational' offers being made now as retailers are trying to grab market share. But eventually, third-party providers of same-day delivery services could become the norm because retailers will likely find that offering the services themselves is too costly to be scalable.

    "While same-day deliveries are a hot topic now, things eventually will settle and the service 'will be a commodity,' he said. 'Pricing will stabilize to a normal level' - one that doesn’t cost too much to offer - and such services will no longer be a differentiator."
    KC's View:
    While logistics experts may think that same-day delivery is not the game-changer that others do, there are also people who have suggested for years that the principal advantage that bricks-and-mortar stores have over online stores is that they offer immediate gratification.

    It won't come as a surprise to MNB readers that I think Amazon has found the right balance. Same-day and next-day delivery increasingly are options, but you have to pay for it. Two-day delivery also is available at a cost, but that cost gets mitigated if you are part of its loyalty program - Prime - which you also pay for. Beyond that, if you spend enough money, shipping is free.

    I do think that same-day and next-day delivery will increasingly need to be an option that retailers will have to offer if they want to be current and relevant ... but it almost doesn't matter what percentage of consumers want or use it. You offer a suite of options, and let the consumer decide. It is when retailers decide what the consumer needs or wants that they get into trouble.

    Published on: April 30, 2015

    In the New York Times this morning, technology columnist Farhad Manjoo has a piece about Instacart, the company that has since its beginning transitioned from being a personal shopping service to being the e-grocery arm of a number of retailers ... a shift that has enabled the company to experience enough growth for venture capitalists to value the company as worth $2 billion.

    This smacks of being a kind of "bubble," Manjoo writes, though the company also seems to be showing the ability to build incremental sales for retailers with which it is going into business.

    Manjoo writes: "Instacart shows great promise - its founders and investors believe it could provide employment to tens of thousands of workers, improve the reach and financial prospects of small and large physical grocery stores, and eliminate what many people consider the drudgery of grocery shopping.

    "Yet its success may rest on some unproven assumptions about the market: that delivering groceries can be done efficiently enough to sustain its low prices; that it can be done in sprawling suburbs as well as dense cities; and that, if it takes off, it will add to, rather than siphon off, business from large grocery chains."

    You can read the entire column here.

    To summarize, the story says that Instacart offers service in 15 cities and plans further expansion this year, and that for the first time, it is making the majority of its money from retailers, not consumers. It used to be that Instacart, serving as a personal shopper, would shop at a variety of stores and mark up items on delivery. Now, it is being transparent about pricing and taking a cut from retailers with which it has cut deals ... and those retailers are reporting an apparent bump in incremental sales.

    Still, Manjoo writes that "the long-term danger for Instacart may be that as it grows, a declining number of sales will be incremental to physical stores - and, instead, will come at the expense of people going to the store, a situation that may put off retailers from working with the company."

    BTW ... Instacart also has been expanding in other retail venues: It announced this week that it is expanding its partnership with Petco, delivering pet products in 14 cities around the country after a successful test in Boston and San Francisco.
    KC's View:
    It is a column worth reading, because while Manjoo demonstrates a fascination with the technology side, he seems more than a little skeptical about whether this is a sustainable business model. In fact, he even suggests that Instacart would be the next Webvan ... though he does not go so far as to suggest that it will be.

    I continue to be more than skeptical, in the same way that years ago I was highly critical of Priceline's attempt to apply its "name your own price" model to the grocery business, which went down in flames even though some pretty major retailers thought that it serve as their long-term e-commerce solution. (I used to write critical columns about Priceline's grocery business for a website called IdeaBeat, which led to Priceline's management trying to get me fired. I'm happy to say that while Priceline's grocery business collapsed under the weight of its own arrogance, and IdeaBeat also went out of business, I'm still kicking.)

    Trust me on this one. Retailers that outsource the fulfillment part of their businesses to companies like Instacart are making a potentially disastrous mistake. I think you can outsource some functionality, especially on the technology side, but you have to not just preserve your relationship with the shopper, but nurture it so that it grows and deepens over time. E-commerce is not a short-term tactical play ... done right, it is a long-term strategic play that is all about the consumer relationship.

    Published on: April 30, 2015

    CityWire has a piece about Walmart's recent global sustainability update, in which the retailer looked to update some of the programs and initiatives in which it is engaged:

    • "Wal-Mart’s efforts to source $250 billion in products supporting U.S. jobs over 10 years has been a high-profile initiative. The retailer said it is on target to reach its commitment by 2023. From light bulbs, to towels, patio furniture to toys, Wal-Mart said suppliers are expanding manufacturing and assembly in the U.S."

    The story goes on to say that "Wal-Mart’s decade-long commitment of $250 billion is expected to create one million U.S. jobs in manufacturing and related services, according to the Boston Consulting Group. Two years into the commitment the job creation numbers are behind the 100,000 annual average needed. Wal-Mart has not given a total tally of jobs created from its supplier commitments. However, the individual reports given thus far tally less than 10,000 jobs  created."

    • "Since Memorial Day 2013, Wal-Mart said it has hired more than 77,000 veterans. Also, through a $20 million philanthropic investment, Wal-Mart and the Wal-Mart Foundation are working with private and public sector organizations to support veteran reintegration."

    (In 2013, the story notes, "then CEO Bill Simon, announced a commitment to offer a job to any eligibly discharged veterans within their first year post active duty.")

    • "A big part of Wal-Mart’s efforts to empower women is to bring on more of them as suppliers. Since 2011, Wal-Mart said it has sourced $11.24 billion in products from women-owned businesses, including $4.16 billion in the most recent fiscal year ... In 2011, Wal-Mart committed to source $20 billion from women-owned businesses by the end of 2015. The retailer said it’s $775 million ahead of its goal to date."
    KC's View:

    Published on: April 30, 2015

    New York has a story about Maple, described as "a new service with a commissary kitchen in Brooklyn and the first of a future network of delivery-kitchen hubs serving Manhattan below Chambers Street as of today. It has everything you’d expect from a newfangled 21st-century delivery app: a mouthwatering website, $22 million in Series A-round funding, a 'lightning-fast' algorithm. But it also has David Chang, recruited by the Maple team as chief culinary officer and source of the start-up’s culinary cred."

    Chang, a highly regarded chef, "feels strongly that the future of food will be outside the traditional restaurant setting, in hospitals, schools, offices, and, yes, digital delivery services that offer good, healthy meals for $12 at lunch and $15 at dinner — tip, tax, and delivery included," the story says.

    New York goes on to say that "while Maple’s tech crew designed software that plots routes and bundles orders to best ensure 'oven-to-doorstep' times of less than 30 minutes, the cooks endeavored to solve delivery’s most puzzling conundrums: which foods travel well (Moroccan chicken, baked arctic char) and which don’t (eggplant Parmesan, anything fried); how to plate and pack meals to survive high-speed bicycle delivery; which salad greens best withstand being vigorously shaken for six minutes straight."

    Fast Company also has a story about Maple, in which it makes the following observations:
    "By only cooking for delivery, Maple can develop recipes specifically to withstand a Manhattan bike commute—and thus, significantly enhance the potential deliciousness of the meal that arrives on your doorstep or stoop. Fried food, in Maple’s early tests, failed to arrive crispy. Loose sauces migrated; tacos arrived looking more like burrito bowls. So it adjusted its offerings accordingly. Maple’s focus is on getting the food as quickly as possible from oven to your door, because delivery is not a side business, it's the only business. Maple also avoids paying for expensive real estate, instead housing its inventory and most of its kitchen space in an old Pfizer factory in Williamsburg. It can serve more people with fewer staff, and the number of dishes it sells is not limited by a line that spills onto the sidewalk."
    KC's View:
    It's shame about the eggplant Parmesan...I would've tried that in a second.

    I have no idea whether Maple will work or not ... but I find it fascinating as entrepreneurial-minded people try to solve puzzles in different ways, creating competition that didn't exist before.

    The Fast Company piece is worth reading, by the way ... and you can check it out here.

    Published on: April 30, 2015

    USA Today has a story about how Whole Foods is facing criticisms "on social media after one of the Baltimore stores posted photos of National Guard members holding free food from the grocery chain. People on Twitter and Facebook lashed out against Whole Foods and called the move tone deaf to the children in Baltimore public schools who were going without free lunch while schools were closed Tuesday over safety concerns."

    The story notes that more than eight out of 10 Baltimore public school students "receive free or reduced-price lunches," and that Whole Foods has responded to the criticisms "by partnering with rec centers and community organizations."
    KC's View:
    I am not going to pretend to have any sort of insights into the horrible events that are unfolding in Baltimore. I cannot imagine what it is like to be a member of a community that find sit hard to conceive of a future with any hope, and I am struggling to appreciate the difference between destructive rioting and what I've heard described as non non-violent civil disobedience.

    But I think that Whole Foods feeding people who are trying to keep the peace - who have been thrust into a seemingly unsolvable situation that is decades in the making - is worth admiring, not criticizing. And I expect that Whole Foods and other retailers, if history is any indicator, are doing a lot to help Baltimore's children. They almost always do.

    Published on: April 30, 2015

    • The Indianapolis Star reports that "in the latest salvo in central Indiana’s increasingly aggressive grocery wars, Kroger said Wednesday it will build 11 new stores in the Indianapolis area and expand or remodel 22 others in a massive growth plan that will cost $465 million. The expansion will create 3,440 permanent jobs, as well as construction jobs in the interim.

    "The expansion signals an attempt by the Cincinnati-based grocer to widen its leading market share in the Indianapolis area even as new competitors such as Fresh Thyme are moving in."

    • The Houston Business Journal reports that "just a few months after its parent company was sold, Houston-based Fiesta Mart LLC has now been acquired.

    "Washington, D.C.-based international private equity investment firm Acon Investments LLC acquired the 43-year-old grocery store chain from the Levit family, the companies said April 29. Financial terms of the deal were not disclosed."

    The story also says that Acon has hired Michael Byars - most recently president/CEO of Bi-Lo and previously president/CEO of Minyard Food Stores - to be president/CEO of Fiesta.

    • The Los Angeles Times reports that the "El Super supermarket chain is facing a complaint from the National Labor Relations Board accusing the grocer of preventing its workers from advocating for their rights and refusing to bargain with unions."

    According to the story, the complaint alleges that El Super "interfered, restrained and coerced employees participating in a boycott after the chain failed to agree on a contract with the local United Food and Commercial Workers union ... The union represents about 600 El Super workers at seven stores in Southern California. The UFCW said that the supermarket has refused to negotiate with the union for more than a year, and that El Super employees have been working without a union contract since September 2013."

    • The Bismarck Tribune reports that SpartanNash Company is buying the six-store Dan's Supermarket chain, which has operated in the area for six decades. Terms of the deal were not disclosed.
    KC's View:

    Published on: April 30, 2015

    Advertising Age reports that JC Penney has hired Mary Beth West, the former chief marketing officer at Mondelez International, to be its new executive vice president/chief customer and marketing officer.
    KC's View:

    Published on: April 30, 2015

    ...will return.
    KC's View: