business news in context, analysis with attitude

Published on: June 9, 2015

by Michael Sansolo

CHICAGO - The usual discussion of superstar CEOs was turned on its head at the Monday general session for the Food Marketing Institute (FMI) Future Leaders conference here, as three industry leaders preached the importance of humility, teamwork and patience.

I was lucky enough to moderate the panel titled “Insights from Industry Leaders,” designed to let conference attendees hear current industry leaders offer their hard-learned lessons in leadership and growth. The panel gave the lessons complete with personal stories and an unusual level of emotional honesty.

The panelists: Laura Fulton, senior VP operations for Hy-Vee’s North Region, Bob Mariano, the chairman and CEO of Roundy’s and Mariano’s stores, and Dave Skogen, chairman of Festival Foods, offered numerous lessons including:

• The importance of humility among leadership, which is essential in leading any team. The panelists shared stories of how others had influenced their thinking, including subordinates and emphasized the importance of listening as a leadership skill.

• Risk taking is essential both personally and professionally. Fulton talked about being pushed by an early mentor into applying for a job even though she lacked confidence - a move that kicked her career into high gear. Mariano talked of the challenge of leaving a company, Dominick’s, that he loved - a move that led to his future success. And Skogen talked of the financial and operational challenges of growing a small, family-owned company.

• All three emphasized the importance of building teams around them, especially adding people with complimentary skills.

• Skogen in particular emphasized the need for professional patience, urging the crowd to look past quick financial gain in order to build a strong foundation for leadership. In addition he talked about the importance of philanthropy and community ties.

• Plus, all three discussed mistakes they had made in their careers and explained the importance of learning from such mistakes to grow stronger and better at their jobs.

What was clear through the hour-long session was the passion all three have for the food industry and they urged the younger attendees in the Leadership conference to find the same passion. Fulton said that without passion and focus on every job through a career, no one could advance or find a sense of accomplishment.

The Future Leaders event runs through Wednesday attached to the main FMI Connect show.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: June 9, 2015

by Kevin Coupe

Fascinating story from Reuters about how Amazon and Google are engaged in a kind of race "to store data on human DNA, seeking both bragging rights in helping scientists make new medical discoveries and market share in a business that may be worth $1 billion a year by 2018."

To begin with, the companies are providing services - Google Genomics or Amazon Web Services - that allow scientists to store the massive amounts of data that is being used to do things like develop "personalised medicine, which aims to base treatments on a patient's DNA profile. Making that a reality will require enormous quantities of data to reveal how particular genetic profiles respond to different treatments."

However, Amazon and Google also "are going beyond storage to offer analytical functions that let scientists make sense of DNA data. Microsoft and International Business Machines are also competing for a slice of the market."

To me, this is really interesting, Eye-Opening stuff, especially because it suggests the degree to which science and commerce can intermingle toward greater ends. This is an evolution not without peril ... we have a story below about a new study suggesting that Americans have a growing discomfiture with the degree to which companies can access, analyze and act upon their personal data. And if companies can access our data, it means that this information also is vulnerable to hackers, which creates all sorts of other problems.

That said ... sometimes, the subject of data collection can take on an entirely different tone. Last weekend, I had the opportunity to attend a local benefit in my town that was raising money for a young man who needs a bone marrow transplant, and one of the things they did at the party was offer every attendee to have their mouths swabbed so their DNA could go into a national registry that would be accessible to patients needing transplants. To be honest, I didn't think twice - of course I did it. This wasn't about data, but about lives.

There's no question that we as a society are going to have to make some hard and important decisions about how far is too far when it comes to our information. And companies will, if they are smart, be sensitive to consumers' needs and concerns before the federal government gets involved, which it inevitably will if the world of data collection and analysis becomes the wild west.

These are not just business decisions. They are moral and ethical decisions, and conversations that business must be prepared not just to have, but to embrace.

They - and we - have no choice.

Published on: June 9, 2015

Re/code reports that Apple is adding private-label credit cards from BJ’s, Kohl’s and J.C. Penney, as well as loyalty cards from Dunkin’ Donuts and Walgreens, to its Apple Pay system. The story says that the cards all will be stored in a new app called Wallet, which is replacing the Passbook app, and take Apple "one step closer to fully replacing your wallet."

The Wall Street Journal reports that Apple also "is extending Apple Pay next month to the U.K., where it will be accepted at more than 250,000 locations, including the London transportation system."

Apple says that its payment system shortly will be accepted in more than one million locations as of next month.

The Re/code story goes on to say that "the compatibility with these private-label cards will also eliminate one planned difference between Apple Pay and CurrentC, a competitive app being developed by a consortium of retailers called MCX that hasn’t yet publicly launched. The inclusion of Kohl’s means Apple Pay has lured another MCX merchant to its competitive system, following an announcement from Best Buy earlier this year." Trader Joe's is said to be about to start accepting Apple Pay.

The story notes that "the introduction of the store-branded cards should be an important one for Apple since the store cards are attractive to both shoppers and retailers — something that’s not always common in the payments industry. Shoppers are attracted to the cards because they often come with perks, like 5 percent back on every purchase and free shipping in the case of Target’s Redcard. Retailers like them because they’re typically cheaper to process for the stores than mainstream credit and debit cards."

The Apple Pay expansion plans were announced at the company's Worldwide Developers Conference.

Published on: June 9, 2015

The New York Times reports on a new study from the Annenberg School for Communication at the University of Pennsylvania saying that "many Americans do not think the trade-off of their data for personalized services, giveaways or discounts is a fair deal."

According to the study, "55 percent of respondents disagreed or strongly disagreed that 'it’s O.K. if a store where I shop uses information it has about me to create a picture of me that improves the services they provide for me,' and "about seven in 10 people also disagreed that it was fair for a store to monitor their online activities in exchange for free Wi-Fi while at the store. And 91 percent of respondents disagreed that it was fair for companies to collect information about them without their knowledge in exchange for a discount."

The Times writes that "the findings are likely to fuel the debate among tech executives and federal regulators over whether companies should give consumers more control over the information collected about them."

One such executive, Apple CEO Tim Cook, gave a speech earlier this week in which he endorsed the "simple idea" that consumers should be able to control the degree to which companies collect and utilize personal data.

And, the Times writes that "the report on consumers’ attitudes to commercial surveillance comes at a pivotal moment for online marketers and advertisers. Companies are scrambling to develop new techniques to influence people who increasingly use mobile devices to shop, bank and socialize. Yet, even as millions of people embrace these data-driven services, many are mistrustful of the kinds of inferences that companies might make based on information gathered about them."

Published on: June 9, 2015

CNBC reports that Dunkin' Brands chairman/CEO Nigel Travis believes that ""delivery is clearly a big opportunity," saying that the company currently is developing a mobile ordering app as it also conducts a "private test."

"We'll move to a more public test later this year," Travis says. "We'll probably launch mobile ordering sometime next year."

Published on: June 9, 2015

Time reports that "Chipotle Mexican Grill next month is planning to offer tuition reimbursement and paid vacation days to part-time employees, making the fast-casual chain the latest to tout expanded perks in a move to lure and retain top talent."

The new perks also will include sick days for part-time employees, the story says.

These benefits, Time notes, "previously only been given to salaried workers, but will now expand to all that the restaurant chain employs."

Published on: June 9, 2015

Ad Week reports that publisher Condé Nast's Food Innovation Group has established a partnership with a company called Popcart, described as "a digital service that makes recipes 'shoppable' by converting ingredients into a list of items that can be purchased through online grocers.

The story says that "the partnership - Popcart's first with a publisher since it launched last summer - will allow consumers to buy ingredients for all Bon Appétit and Epicurious recipes across desktop, tablet and mobile sites, as well as the brands' apps, when it goes live June 18. Fresh Direct, Peapod and Roche Brothers will provide e-commerce fulfillment. Later this year, the Popcart integration will also expand to the U.K., with Sainsbury's as its retail partner."

Published on: June 9, 2015

Interesting piece from Seeking Alpha suggesting that Walmart may be better positioned to capture millennials' business than Costco.

Here's the logic: "Costco seems to have done little or nothing to adapt to changing realities and attract millennials’ business ... Costco has a limited social media presence and it has few sales channels outside of its club stores to reach millennials where they live."

According to this analysis, things actually get even worse for Costco:

"Millennials prefer to live in urban areas, while a large percentage of Costco stores are located far out in the suburbs ... Costco specializes in selling large amounts of bulk items, but millennials that live in small apartments may not have the room to store all that stuff ... A car is required to reach Costco and haul all that stuff home, but many millennials do not own cars, and some of them do not even drive ... Many millennials simply lack the money needed to shop at Costco because of student loans and income inequality ... A large percentage of millennials seem to have little or no interest in home ownership. Costco's business model is based upon the presumption that its customers will own houses."

As for Walmart...

"Wal-Mart seems to be the only one of the big three retailers that realizes it needs to change its business plan to reach the next generation. CEO Doug McMillon and his team realize that something needs to change if they want to grow. They're also making some very dramatic moves designed to get millennials' business back, including: Accelerating the construction of its small box concept, Wal-Mart Neighborhood Market, with plans to open several hundred of the stores in the next few years ... Expanding its online retail infrastructure to reach millennials at the one place they like to shop online. The retailer has opened two additional 1.2 million square foot fulfillment centers, Tech Crunch reported."

Other millennial-centric options being offered or explored by Walmart include "offering more alternatives to traditional big box retail, including a same day delivery service; offering a free shipping subscription plan called ShippingPass; pick n' pull, the ability to pick up items ordered online at its stores; and experimenting with lockers where customers can pick up online orders."

Published on: June 9, 2015

• Reuters reports that the US Supreme Court has agreed to hear Tyson Foods' appeal of a $5.8 million judgment in a case where some of its Iowa employees successfully sued "claiming they were entitled to overtime pay and damages because they were not paid for the time spent putting on and taking off protective equipment and walking to work stations."

According to the story, "the court will consider the company's objection to the use of statistics to determine damages instead of assessing individual damages for each plaintiff. Business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers, had asked the Supreme Court to take the case."


• The Chicago Tribune reports that Walgreen is on the defensive over its decision last month to dump the inventory of a closed Wyoming store in a landfill rather than donate it to charity.

The store apparently had been closed for more than a year because of safety issues related to a landslide. Walgreen says that it was not confident in the safety and efficacy of the products that had been sitting inside the store for all that time, and so decided to dump the products. Critics, however, say that items like paper towels, toilet paper, toys and cleaning suppliers should not have been dumped.


• According to the National Retail Federation (NRF) 2015 Father's Day Spending Survey, total spending on dad this year is likely to hit about $12.7 billion. "The average person will spend $115.57 on gifts, nearly even with last year’s $113.80. The survey found 75.4 percent of Americans said they plan to celebrate Father’s Day."

Published on: June 9, 2015

Yesterday, in the Eye-Opener, I wrote a bit about the Duggars and Hastert cases, suggesting that they illustrate to differing degrees the extent to which our world's growing transparency affects people.

MNB user Bill Crawford responded:

The innovative ways in which you connect dots usually impresses me.  I get great insight seeing parallels and even connections between seemingly disparate parts of the marketplace and/or society.  However, I think that it is a reach, at best, to connect the Duggars and Dennis Hastert.  (In the interest of full disclosure, I have never watched the Duggars’ show – and have no plans to.)

While the Hastert case in still shrouded in mystery and may be until court procedures force it out into the open, the Duggar case is not.  The teenager that was involved with the molestation was taken to the local police to confess his crimes by his own parents.  There was a full investigation which, due to his being a juvenile, was sealed by court order.  This took place long before this family had any semblance of fame.  The Hastert case, which apparently involves an adult imposing himself improperly on at least one juvenile to whom he was an authority figure, has apparently not (yet) been investigated and adjudicated.  Vastly different.

A common thread here appears to be why has there not been any outcry against the person or people who leaked the sealed records in the Duggar case and who is doing the blackmailing in the Hastert one?  In the Duggar case, what was done was deplorable, but was sealed by legal authority for a reason.  How many leaders in all facets of society would be undone if their past misdeeds when minors were released? In the Hastert case, why is there no outcry against the blackmailer?  That action is still a crime.

I am not in any way excusing what Hastert may have done – or, based on his willingness to pay so much money, what he did.  However, are there not proper channels for this matter to have been heard?  After this many decades, the motive appears to be based more in finances than in justice.  These are not matters of crimes vs. cover-ups; they are matters of selectively choosing which crime to condemn and which crime to condone.

Another MNB user responded:

Like you, I had known little about the Duggars story, as well as, former Speaker Hastert. I have never watched the TLC show. I hadn't even heard about it until the controversy began. I had never seen much about either of these cases either the Duggars or Dennis Hastert.

What strikes me about both instances, is the intent to cause harm. The term for it used to be called malice. True or not, the origins of both stories have a political and socially based agenda. As, Kevin Bacon would have said "These are the facts of the case and they are indisputable".

Regardless, both are unique. One is of a 15 year old within a family. The other is of an adult in a position of supposedly respected authority. That, of course does not excuse the prior, but indeed does make them completely different. I'm not sure that the 15 year old deserved a life sentence. I do know for certain he has now been given one even if not from a court. In addition, so have the victims. That's given little, if no regard for our society's need for sensation.

In the case of the Duggars, I did watch the interview with the sisters on Megyn Kelly's show on Fox News. Yes, I'm aware of all of the sentiments towards Fox News. Nevertheless, of the many commentators on this network, Megyn Kelly may be the most direct, balanced, and fair.

Here's where the malice comes into play. The hatred and malice against this family for other perceived reasons drove malice over the top to the extent that these young women were victimized yet again, in fact likely worse than their initial victimization. In this case, the victims themselves felt it to be worse. That is not my opinion, it is theirs. Yet, no matter, it was more important to those that put this story out and the intent was more important than the casualties. There is no question that in this case, no concern whatsoever was taken to protect these women. That's a promise we make as a society - a good one. It is a matter of trust. Its been violated and it is irreparable.

Sure, one can disagree politically, socially, and spiritually with this family. That disagreement does not make victims in this case fair game. In the case of the Duggars, one can think what they like of them. Agree or Disagree. They've been called hypocrites. Are they a greater hypocrite than those that chose harm over the young women for their own profit? Yet, had it been the other way around would have yelled from the mountain tops?

I think we know the answer.

You mention trust in your points, especially the trust of young people. In both cases, the victims are young people. Yet, there is no regard for them or instilling any trust in future victims that they will not be victimized worse should there be an opportunity to inflict harm for an agenda. In this case, for the purpose of forwarding an agenda and for profit, the victims, the family, and the juvenile record were tossed aside for the purpose of inflicting harm. Will future victims be helped or harmed by what has been done in this case? Will they give us as adults their trust to report these instances? I can't help but think we've crushed that by continuing to allow their victimization.

I don't condone either of these cases. I'm definitely not defending either case.

With respect to Mr. Hastert, I know nothing about and likely the less the better.

Too often we forget of fail to think about these young victims and their rights instead of a political and social agenda. I know how I'd feel if they were my daughters under the same circumstance. The editors of "In Touch" are, however, apparently immune to that.

All reasonable points to make, I think, especially about the victims.

Though to be fair ... while extortionists are bad, child molesters are much, much worse.

My larger point - perhaps made inarticulately yesterday - was simply that we live in a world where people increasingly distrust institutions ... and that this is a condition that retailers need to factor into their strategies and tactics. And when hypocrisy becomes transparent, it is particularly jarring.

I'll speak for myself on this one. I have trouble coming up with one single institution in which I have much faith. There are people I trust - like my wife and kids - but no institutions. None.

I have to believe that this abundant lack of trust and faith will influence the choices I make as a citizen and consumer ... and I don't think I'm alone.