business 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: May 4, 2015

    by Kevin Coupe

    There is an interview in a magazine called On Earth with chef/restaurateur Tom Colicchio, who has moved beyond his cooking and entrepreneurial roots to found an advocacy organization called Food Policy Action, which endeavors to pressure lawmakers to make food part of the national public policy discussion.

    There were a couple of interesting observations in the piece. One is what seems to be an evolving attitude toward meat:

    "We just announced at Colicchio & Sons that we’ll be shrinking our entrées down from the six- or seven-ounce piece of protein to three to five ounces," he says. "So that represents one way to do it. People need to start eating a little less—of certain types of food especially. Can we change the American diet? Yes, but if we’re going to encourage eating more fruits and vegetables, or if we’re going to go so far as to say they should be eating organic fruits and vegetables, then first we need to rethink certain things—like the way we price crop insurance or allocate our agricultural subsidies ... I’ve never suggested not eating meat - I have two steakhouses. But I do think it’s a good idea to eat less of it, for both health and environmental reasons."

    The other observation concerned GMO labeling:

    "I'm not anti-science; I do believe there’s some good that could come out of biotech in agriculture. But given the overuse of herbicides and the stronger insecticides that come with it, what are all these doing to the environment? Now glyphosate is showing up in freshwater streams and in breast milk. What are the effects of that? The biotech companies originally did a great job selling this product to farmers, but they never had to sell it to the American public.

    "So now you’re seeing pushback, with 90 percent of the country wanting labels. You hear people argue, 'If you want to buy GMO-free, just buy organic.' Well, what if I can’t afford organic? Should I be left out? I should be able to purchase something that’s not GMO. I think [labeling] would probably end up helping biotech companies in the long run. If they become more transparent and then try to explain to the public why their products are so good - why they’re necessary, what they can do - then we could be having a very different debate."

    Now, to be fair, probably the reason I think this latter comment is an Eye-Opener is that it is pretty much the argument I've been making here on MNB. (Though he makes it better.)

    In the end, I think, the biotech companies are hurting themselves by fighting against GMO labeling, because this effort creates more questions about GMOs. If they accepted labeling, and embraced the idea that they need to explain GMO technology to consumers, then I think they change the focus of the discussion. Which, in my view - and, apparently, Colicchio's - would be better for consumers, biotech companies, and the food industry.
    KC's View:

    Published on: May 4, 2015

    MarketWatch reports that "Made in the U.S.A. is hot again, and the number of manufacturing jobs that are returning to the U.S. - or coming to the U.S. for the first time - from overseas has hit a record level."

    According to the story, "Sixty thousand manufacturing jobs were added in the U.S. in 2014, versus 12,000 in 2003, either through so-called reshoring, in which American companies bring jobs back to the U.S., or foreign direct investment, in which foreign companies move production to the US ... In contrast, as many as 50,000 jobs were 'offshored' last year, a decline from about 150,000 in 2003."

    That means, MarketWatch writes, a net increase of at least 10,000 jobs, which is "the first net gain in at least 20 years."

    The numbers come from a study by an organization called the Reshoring Initiative.
    KC's View:
    I was curious, just for context, if the Reshoring Initiative has any sort of obvious political connections that could influence the way the numbers are calculated. So I checked, and the answer is no. The organizations that sponsor the Reshoring Initiative seem to be all trade associations, manufacturing companies and a couple of banks - hardly obvious bastions of liberalism.

    And the site seems assiduously non-partisan. Just FYI.

    Maybe there's really something happening here.

    The story also makes the point that "among the world’s top 10 export economies, the U.S. last year ranked No. 2 - behind only China - for cost competitiveness, according to the Boston Consulting Group, with real estate and natural gas and other energy prices tending to apply downward cost pressure in the U.S." And, a 2013 Gallup poll "found 45% of Americans saying they had made a special effort to buy U.S.-made products. The survey showed 64% said they would be willing to pay more to buy a U.S.-made product than a similar item made overseas."

    Published on: May 4, 2015

    The Atlantic has a long piece looking at Starbucks' experiment with Arizona State University in which it is looking to make a college education accessible to company employees working for 20 hours or more a week.

    The article looks to put the experiment in a broader context, noting that "when it comes to college, the central challenge for most Americans in the 21st century is not going; it’s finishing. Thirty-five million Americans now have some college experience but no degree. More Americans than live in Texas, in other words, have spent enough time at college to glimpse the promised land - but not enough to reap the financial bounty. Some are worse off than if they’d never enrolled at all, carrying tens of thousands of dollars in debt, not to mention the scar tissue of regret and self-doubt."

    The story goes on: "We like to think of college as a meritocracy, a place where only the dedicated and smart survive. But it seems to be something else. Between 1970 and 2012, the proportion of American 24-year-olds who came from affluent families and had a bachelor’s degree rose from 40 percent to 73 percent—quite an enlightenment period for privileged kids. But over the same period, the proportion of American 24-year-olds who came from low-income families and had a bachelor’s degree rose from 6 percent to just 8 percent. The country’s uneven public-school systems cannot be blamed entirely for this state of affairs. Too many people come to college unprepared academically, it’s true. But even those low-income students who outperform their affluent peers on tests are less likely to graduate from college."

    When Starbucks announced its partnership with ASU, "the goal was not to print a pile of get-out-of-tuition-free coupons. It was something less expensive and possibly more important: to help more students finish what they’d started ... The most revolutionary part of the program had nothing to do with tuition and got far less media attention. In their announcement, Starbucks and Arizona State also committed themselves to providing all enrolled employees with individualized guidance—the kind of thing affluent American parents and elite universities provide for their students as a matter of course. Starbucks students would each be assigned an enrollment counselor, a financial-aid adviser, an academic adviser, and a 'success coach' - a veritable pit crew of helpers. Like a growing number of innovative colleges around the country, Starbucks and Arizona State were promising to prioritize the needs of real-life students over the traditions of academia."

    To be clear, the experiment has not been embraced to the extent that Starbucks and ASU might have expected, and they plan to continue to promote it within the company and figure out ways to make it more accessible and more successful. Starbucks CEO Howard Schultz has said that the effort could cost the company tens of millions of dollars a year, which is a lot of money, though not even close to the $250 million a year the company spends on health care.

    "Since Starbucks announced the program in June, 20,000 people who have applied online for jobs at the company have cited the college benefit as a reason for their interest. One barista I interviewed had quit her office job in Dallas and taken a $4-an-hour pay cut to attend college for free through Starbucks. The company does not have data yet on whether employee retention has increased, but so far, it has spent very little and received significant PR and HR returns."

    It is a fascinating piece, because it contrasts the Starbucks/ASU experiment against the crushing economic realities of modern higher education ... and you can and should read it in its entirely here.

    To be sure, the experiment is unfinished and the experience is far from perfected. But I can't help but think about one of the statements made in the story: that Starbucks "is acknowledging an awkward truth about working at Starbucks: no one wants to be a barista forever."

    And there's another line, from Arizona State’s president, Michael Crow: “We’re not trying to save the world. We’re trying to show that the world can be saved."
    KC's View:

    Published on: May 4, 2015

    The Tampa Bay Times reports that Winn-Dixie has introduced a new mobile app, which, the paper writes, "is not unlike Grandpa getting an iPhone."

    According to the story, "The spotlight features of the cozy and free app, available for Apple and Android products, are 'personalized' digital coupons, all stored on your smartphone or other electronic device. Winn-Dixie, a subsidiary of Bi-Lo Holdings, partnered with for this new savings system, which sends you cyber coupons based on your own shopping preferences."

    Other app features include "a virtual shopping list that users can compile by scanning product bar codes with their smartphones ... fuelperks rewards for discount-gas club members ... a GPS-enabled store locator ... a weekly sales circular specific to a user's closest stores."
    KC's View:
    I find the whole "grandpa gets an iPhone" metaphor enormously amusing, especially because the paper notes, quite correctly, that a company like Winn-Dixie does have to work hard to seem as modern as competitors such as Publix and Whole Foods.

    I'm not sure that the whole "grandpa" image is helpful ... but at least, in this case, "grandpa" is trying t get with it.

    Published on: May 4, 2015

    Advertising Age has a follow-up story to last week's coverage of the Bud Light labeling controversy, in which the brand and its parent company, Anheuser-Busch InBev, were hammered in social media because of labels that seem totally insensitive to growing concerns about date rape.

    The label was part of Bud Light's "Up for Whatever" campaign, and describes Bud Light as being "the perfect beer for removing ‘no’ from your vocabulary for the night.”

    According to Ad Age, "The brew's 'buzz' score fell from 6 on Monday to zero as of Thursday morning, according to the YouGov BrandIndex, which measures daily brand consumer perception. The average score for domestic beers is currently 4, putting Bud Light below its peers. Among women, Bud Light fell from a 5 to -3."

    The story goes on to quote Alex Lambrecht, VP of Bud Light, as saying that "the media coverage and social conversations about the label are understandably negative, and we are listening. As of today, our research shows that consumers understand mistakes happen, and remain loyal to the brand. We don't take that for granted, and we also understand that there are some consumers who want to see us do better. And we will. We're looking at our creative again to be sure of it."
    KC's View:
    I continue to argue that this is not just a matter of misguided creative. It'd be nice to think it is that simple, but it probably isn't.

    The problem, I think, is too many companies with too little diversity, and too many companies where people are guilty of corporate-think in a way that makes them insensitive to larger issues. I originally suggested that there likely were no women in the room when that label was chosen, but I was correctly chastised for that position by MNB readers, who said that there could have been women in the room who weren't thinking, and that any man in the room should have been sensitive enough to know better.

    I agree. I have no idea whether this will do long-term damage to the brand, but I'd suggest that the folks at Bud Light get busy and start writing checks to anti-rape initiatives, just to do a little financial penance. (That won't be enough, but it'll be a start.)

    Just as a side note. I was at a reception over the weekend where the choice of beers and wines was rather limited, but when they went through the list, the one brand I just rejected out of hand was Bud Light ... because right now, the brand leaves a bad taste in my mouth. I wonder how many other people will feel this way.

    Published on: May 4, 2015

    In Minnesota, the Star Tribune has a story about how Target is refiguring its priorities, which is creating major questions for its suppliers.

    "For vendors, it’s an unsettling time as they wonder where their products will rank on Target’s reconfigured priority list," the story says. "Will they get as much shelf space as in the past? Or will they be shrunk down to make room for up-and-coming products or one of Target’s private-label brands?"

    The story goes on to note that at a financial meeting in March, Target CEO Brian Cornell and other Target executives "laid out more details about that re-prioritization, classifying products as falling into one of four boxes. After the signature categories, the next level is 'outperform,' which includes items like laundry detergent and pet care that help drive trips to the store. That grouping will receive some investment, but not as much as the first. The next tier is 'perform.' Those are the things that shoppers pick up while they’re in the store because it’s convenient, such as baking needs and automotive. This group will receive fewer resources.

    "The final category is 'reposition,' which is a temporary classification for areas Target wants to reinvent. The most prominent example is grocery, with Target in the early stages of an overhaul of that department to offer more natural, organic and premium items."
    KC's View:
    I'm sympathetic ... but the thing is, I'm always arguing that retailers need to reset their priorities when it comes to selection and brands. Any retailer that hangs its hat on the sale of products that everybody else sells is making a mistake. Success is in the differences, not the similarities.

    Published on: May 4, 2015

    The Seattle Times has a piece about two former Amazon employees, Jon Jenkins and Darren Vengroff, who have started a company called Meld that "upgrades existing stovetops to have automatic temperature control" using a smartphone app.

    According to the story, "Vengroff, an amateur chef, and Jenkins, who also loves to cook, wanted to figure out a way to automatically regulate temperature while cooking. Medium on different burners can range over a 200-degree difference, which Jenkins said can mean 'the difference between completely undercooked and burnt'."

    The Times writes that "the Meld Knob and Clip work together with a cellphone app. The knob is controlled by the temperature-sensing clip placed in a pot on the stove top. The user selects a recipe from the app, or manually selects a temperature, and the phone will use information from the clip to tell the knob what to do. The knob will then adjust the temperature automatically. "

    The kit, which is adaptable to pretty much any stovetop, will cost about $149.
    KC's View:
    If you want proof that there is some consumer interest in this app, check out the company's Kickstarter campaign. Meld wanted to raise $50,000, and hit that number the first day; as I write this, Jenkins and Vengroff have raised $182,936. (The campaign ends on Friday.)

    I wonder if, years from now, we'll look at Amazon not just as a game-changing retailer, but also as a place that served as a kind of crucible for smart and progressive thinkers who have changed the world in a variety of different ways.

    Published on: May 4, 2015

    • The St. Louis Business Journal reports that "Schnuck Markets Inc. has laid off 52 corporate employees, the company said Friday.

    "The move affects about 10 percent of the company's corporate workforce of about 500, according to Paul Simon, a spokesman for the St. Louis-based grocery chain. He said that positions were in 'several departments and levels within the company’s headquarters'."

    • The Chicago Tribune reports that "two new farmers markets are joining Chicago's vibrant warm-weather market scene, thanks to Treasure Island Foods. The grocer is bringing its Urban Islander Farmers Markets, with locally grown and produced items, artisanal products, food trucks, craft beers on draft, plus music and kids activities, to its Lincoln Park and Lakeview locations.

    • The National Association of Chain Drug Stores (NACDS) said last week that Randy Edeker, chairman/CEO/president of Hy-Vee, has been named the organization's new chairman.

    In prepared comments, Edeker said that "the evolution of healthcare is here, with pharmacies as the face of neighborhood healthcare. The new healthcare definition includes environmental factors, nutrition, the social environment, emotional and spiritual factors. All of that is now in the healthcare definition."
    KC's View:

    Published on: May 4, 2015

    Regarding last week's FaceTime about misguided targeted marketing that only annoyed me because it classified me as a "senior," MNB reader Jim Nolan wrote:

    I do not know what many of the advertisers are thinking. They just get a list of over 50 somethings from AARP and blanket mail thinking they are "targeting".  I get that sometimes I'm in their perceived demographic.  Others are just wrong. My favorite irritant was the ad mailed to my home address for hearing aids.

    From another reader:

    Your commentary on "Hello, seniors" and the response from readers via "Your Views" on May 1st had me rolling with laughter.   I totally get what you are saying... I am a part of Generation X and my parents are Baby Boomers -- in their late 60s and the word "senior" is not at all a word I would use to describe them.   The irony is how much consumer knowledge there is circulating (at least in the CPG industry) about how Baby Boomers do not see themselves  as seniors nor do they want to ever see themselves as seniors.  I  have been in CPG for 23 years and I do not remember a time in our industry where such robust insights into consumer strata like generations, and other groups was so readily available (versus just in binders in the marketing department).    Bottom-line, whoever the company is that is calling you is ignorant and lazy.   It is a shame they are too lazy to at a minimum google "tips on how to connect with Baby Boomers" and craft a compelling message.    Too bad... however, they probably won't be in business long.

    Another MNB reader had an interesting observation about supermarket technology:

    I shop at a store that is less than a year old (70,000 square foot).  This store is a brand of one of the top three chains in the US.

    The cashiers have no way to access my frequent shopper card by my phone number at the register.  Grocery store technology still has a long way to go.


    Finally, thanks to all of you who wrote me on Friday to congratulate Mrs. Content Guy and me on our 32nd anniversary. We appreciate it more than you can possibly know.
    KC's View:

    Published on: May 4, 2015

    • American Pharoah won the 2015 Kentucky Derby, the first leg of the Triple Crown. The horse delivered on pre-race expectations, which had it as a 3-1 favorite.

    • Floyd Mayweather defeated Manny Pacquiao in a 12-round unanimous decision to retain the welterweight world championship.

    The New York Times reports that, in fact, "both men were runaway winners financially. The purse, the majority of it from pay-per-view revenue from several million American households paying about $90 each to watch, was estimated at roughly $300 million. The contract called for Mayweather to receive 60 percent, win or lose."
    KC's View: