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    Published on: January 20, 2016


    by Kevin Coupe

    Having shopped at the original Stew Leonard's in Norwalk, Connecticut, almost weekly for the past 32 years, I'm used to the seeing the rock whenever I walk up to the front door.

    The rock, of course, is the enormous boulder on which Stew Leonard's has inscribed its two rules - "the customer is always right," and "when the customer is wrong, reread rule number one." That boulder has been duplicated in each of Stew Leonard's stores ... in Danbury and Newington, Connecticut, and Yonkers, New York. That rock has seen Stew Leonard's through good times and bad, and reflects the philosophical foundation for this family-owned company that has become iconic for its idiosyncratic approach to retailing.

    Yesterday, I drove out to Farmingdale, New York, on Long Island, to get a sneak peek of the newest Stew Leonard's, scheduled to open today. And as I waited for Stew Leonard Jr. to join me - he'd kindly offered to give me a tour of the new store - I looked around for the rock ... but all I saw was a familiar outline covered by a dark cloth. The rock, it seems, would not be seen until it was curtain-up for the entire store ... which strikes me as a good metaphor for the kind of retailing that Stew Leonard's is bringing to the flat, shopping center-laden, middle class suburban community that has at various times been home to people such as Ed Kranepool, Ron Swoboda and Joe Pepitone.

    Stew Leonard's is all about the curtain going up, about creating as theatrical a food shopping experience as you're going to find. And in this new store, Stew Jr. told me, an effort has been made to pull the curtain away from much of the food preparation work, doing things like moving bakery and pizza ovens, as well as the extensive display kitchen, closer to the sale floor than in other stores so customers have a better sense of where their food comes from.

    Stew Leonard's hallmarks all are there - the roughly 40,000 square foot sales floor has about 2,000 SKUs, mostly fresh and private brand, so that the consumer gets a highly curated shopping experience. Instead of hundreds of varieties, brands and sizes of soup, for example, Stew's sells maybe a dozen - chilled, fresh, and carrying its own label. Differentiation is taken very seriously here ... there is a concerted effort not to be "me, too" ... and it is critical in a market that already is served by ShopRite, Stop & Shop, Trader Joe's, Costco, Whole Foods and a variety of small independents and specialty food retailers.

    (A note here. As a longtime regular Stew's customer, I can testify that I can't get everything there. But I can get what I need there, and if I do fill-in shopping elsewhere, Stew's has remained my main shop. FYI...Amazon has become number two.)

    Fresh foods are enormously important. The biggest, most dramatic spaces are given to the bakery, meat, seafood and prepared foods departments ... and one can best understand how important this is by watching Stew Jr., company founder Stew Leonard Sr., and assorted other family members sampling the store's pizzas and comparing them to those made by a local and popular pizza parlor. This is serious business, and this is a family that is highly granular in how they approach the details of the business. Is the crust thick enough, the sauce tangy enough, the cheese in the right proportions? And Stew Sr. keeps driving home the point: none of this matters if it doesn't taste great. (Not good. Great.) He is relentless.

    I think the Stew Leonard's team is aware of the fact that this store won't be a slam-dunk; even getting it to the point where the doors are opening has been anything but easy, taking more than a dozen years to find the right spot and get the stars aligned. There's lots of competition, and Stew's may not be as well known in Farmingdale as in other markets that it has served. But the company has enormous discipline about how it approaches marketing and merchandising, maintaining that delicate balance between being effective and efficient, making sure it is always playing its own game rather than being lured into playing the other guy's.

    I also was impressed with the degree to which Stew Jr. seemed totally relaxed yesterday. (Or at least created the appearance of relaxation.) He spent more than an hour with me, walked around the store chatting with employees and vendors getting ready for the grand opening, posing for pictures and making it all seem effortless. But maybe once you've worked for more than a dozen years getting a store ready, the day before the opening actually is the only time you get to relax. A bit.

    One of my favorite features is totally cosmetic and completely new for Stew Leonard's - a cow hung upside down from the ceiling. Stew Jr. takes a lot of pride in this cow, and he pointed to a sign explaining the rationale behind it. It seems that the Stew Leonard's design team visited with Disney's Imagineers when putting together the store, and one of the things they emphasized was that "good design begins with the premise that gravity doesn't matter."

    In other words, it is critical not to be earthbound by proven, traditional ways of doing business ... because that's not where the magic happens. And so, Stew's folks hung a cow upside down - a reminder to its own team not to be earthbound, and to customers that the store they are in has different aspirations.

    There are two themes we talk a lot about here on MNB - the importance of storytelling (both Chelsea Ware and Michael Sansolo have had columns about that this week alone), and the importance of differentiation, especially by bricks-and-mortar stores competing with the online experience. Walking through Stew Leonard's, I got the sense that it exemplifies both themes ... it tells a compelling story about fresh, quality food, and it presents its products in a differentiated atmosphere that cannot be duplicated online.

    The new Stew Leonard's is worth seeing ... it is an Eye-Opener.

    KC's View:

    Published on: January 20, 2016

    by Kate McMahon

    Each year at this time, I find myself scouring the internet to take the pulse of what people are saying is hot and what’s not on the table, on retail shelves and in restaurants. That's particularly appropriate this year, which has been named the “International Year of Pulses.”

    That pulse declaration was made by the United Nations General Assembly, and is being touted on social media platforms worldwide. Full disclosure: I just learned that pulses are legumes such as dry beans, lentils and peas. On a macro level, the UN’s Food and Agriculture Organization is promoting pulses as “nutritious seeds for a sustainable future.” And in the gourmet legume aisle, tastemakers will find that cranberry beans and black beluga lentils are the “it” pulses this year.

    Acai, I say: Challenging pulses for the “superfood” designation is the acai berry. Having mastered the pronunciation of quinoa, we can now add acai (pronounced ah-sigh-EE) to our vernacular. The acai berry is a grapelike fruit harvested from acai palm trees, which are native to the rainforests of South America. Acai bowls utilizing the berry and a variety of toppings (oatmeal, peanut butter, fresh fruit) are being touted as the new go-to breakfast favorite at smoothie and juice shops across the country.

    Cue the disrupters: According to consultants Baum and Whiteman, the two most noteworthy trends in 2016 are not food-centric, but rather “disrupters” in the form of high-speed food delivery to homes and offices and a national conversation regarding the tipping and pay disparities at restaurants. Consumers who are accustomed to immediate delivery gratification from a high-end restaurant or 7-Eleven will be demanding the same from their local retailer, whether it be via uberEats, Amazon Prime Now or a yet-to-be-named service. Look for high expectations in urban areas.

    More boxed dinners on doorsteps: The popularity of subscription delivery meal kits continues to grow. Consider this: Blue Apron now delivers 5 million meals a month, up from 500,000 just 18 months ago. It continues to lead the category with Plated and Hello Fresh. But upstart competitors such as Sun Basket and Freshology are moving beyond the standard and vegetarian menus, offering gluten-free, organic, paleo diet, low cholesterol and lactose free meal options.

    An oenophile’s worst fear: Sales of wine packaged in a can are on the rise. Whole Foods will introduce Presto sparkling wine in a can this spring, and the Union Wine Company in Oregon is proud to bring “good wines everywhere with less fuss.”

    Other predictions percolating on line:

    • The National Restaurant Association survey of 1,600 chefs reported consumers remain focused on locally sourced meat, seafood and produce. The chefs themselves are looking farther afield to Africa for inspiration and spices.

    • Expect more bold new ice cream flavors such chorizo-caramel, hibiscus-beet and black pepper-butter pecan.

    • ”Grass-fed” will be a new buzzword for products ranging from milk, eggs, yogurt, butter and cheese to packaged meat snacks and even protein powders.

    • Purple potatoes, corn and beets will be adding that hue to snacks, drinks and even organic cornflakes.

    • Look for vegetables to dominate the plate in the form of carrots wellington or beet tartare, with meat, poultry or fish as the side dish. Zucchini ribbons will be replacing traditional pastas as well.

    • Savory flavored yogurts will compete with vanilla and fruit flavored offerings

    • Seaweed is the new kale.

    What’s the business takeaway here? Savvy retailers should of course capitalize on the big trends - promoting locally sourced products and increasing delivery options. But there’s also a great opportunity to create easy-to-prepare packaged meals a la Blue Apron for in-store pick up or do a store demonstration on how to make an acai bowl at home (use the frozen puree with a blender and toppings).

    As far as the wine in a can … I think I will let the millennials in my household give it a try first. They are already accustomed to wine in a box.

    Comments? As always, send them to me at kate@morningnewsbeat.com .
    KC's View:

    Published on: January 20, 2016

    Amazon announced yesterday partnerships with a number of appliance and hardware manufacturers that will now begin incorporating Amazon Dash Replenishment technology, enabling "connected devices to automatically order physical goods from Amazon when supplies are running low."

    For example, Brother now will make a printer that automatically orders toner or ink from Amazon when running low, GE will make a washer machine that orders detergent, and the Gmate SMART blood glucose monitor will also be able to order supplies when needed.

    It won't just be new equipment. Amazon says that these manufacturers already make some products that are compatible with the system, and consumers can just sign up for the Dash replenishment program.

    Amazon also is making the code for the Replenishment system available to manufacturers so that they can integrate the automatic replenishment software into their products.
    KC's View:
    This is a potentially enormous deal, and extends not just the existing Dash Replenishment system but also extends the notion of an ecosystem in which Amazon becomes the first, best option for a wide range of products. It creates the potential for some interesting alliances between appliance and product manufacturers as they create direct lines to Amazon's system.

    And it ought to be a wake up call for any retailer who is just putting detergent or printer ink or pretty much any other disposable product on its shelves, thinking that the old paradigm still works.

    Published on: January 20, 2016

    Los Angeles Times columnist David Lazarus has a piece about how the food industry works overtime to prevent the mandating of warning labels on some products.

    An excerpt:

    "A statewide Field Poll last week found that 78% of California voters support placing labels on sugary drinks that warn of possible health hazards, up from 74% two years ago.

    "Yet the soda and beverage industry has spent millions of dollars over the last couple of years fighting such a requirement and similar regulations.

    "And it's not just the soda people. The agriculture industry doesn't want labels that say that genetically modified ingredients are included in food products. The meat industry would prefer if people didn't know the country of origin of their steaks and pork chops.

    "The message is clear: Consumers should make informed decisions, but not that informed, thank you very much."

    The question Lazarus asks is whether industries can survive by taking positions that seem to be antithetical to what consumers want and need.

    "The issue," he writes, "is one of transparency. Consumers should be able to know as much as they can about the products they buy. Does it make a difference if a baby stroller was made in America? To my mind, it implies higher quality and reliability, not to mention a livelihood for U.S. workers."

    You can read the entire column here.
    KC's View:
    This isn't just the question that Lazarus is asking. It is the question that I've been asking here for years ... I think in the end, many in the food industry may be perceived and/or exposed as working against the interests of their customers. And I don't think that's going to be a good thing for them.

    Published on: January 20, 2016

    Variety reports that Netflix said yesterday that it "surpassed 75 million members on Jan. 1, just hours after the end of the Q4 period ... Netflix said its members streamed 42.5 billion hours of video in 2015, up from 29 billion hours in 2014."

    The story notes that "earlier this month, Netflix surprised investors with the announcement earlier this month that it had expanded to 130 additional countries, bringing it to a total of 190 worldwide (virtually everywhere except China)."

    In a letter to investors, the company said that it intended to continue building on its growth by owning "more of our original programming to allow for greater creative and business control and to ensure global access to content."
    KC's View:
    This isn't a new thought, but it is worth thinking about Netflix as trying to following the Amazon model ... wanting to be the first, best choice for content. That's a much trickier proposition than it is for Amazon, because entertainment content is a lot harder to corner the market on, but it tells us about Netflix's broader disruptive strategy.

    Here's the thing. I think that it won't be long before companies like Amazon and Netflix begin bidding for the rights to stream major sporting events. The Super Bowl on Amazon? Not as hard to believe as it would've been five years ago.

    Published on: January 20, 2016

    A new study released this week at the National Retail Federation (NRF) show in New York City said that

    • "66 percent or consumers are more likely to shop at retailers offering an in-store mobile technology shopping experience, an increase of 52 percent year over year."

    • "Retailers are increasingly using location-aware beacon technology to deliver promotions and coupons to consumers, with almost 40 percent of respondents reporting they have experienced this in the past year, an increase of 33 percent from the previous year. Further, 85 percent of respondents would like to see more customized, location-based coupons and promotions from retailers while in-store."

    • "The showrooming phenomenon has increased by one-fifth, with 90 percent of consumers now using their smartphone to compare in-store prices with online internet prices right."

    • "1 in 5 respondents expressed strong uncertainty on how to use the technologies in-store, signaling the need for increasingly user-friendly mobility experiences and better consumer education."

    • "7 out of 10 consumers prefer mobile POS instead of traditional cashier checkout, an increase of 20 percent from the previous year. An additional 45 percent report that they would be more likely to shop at a store that offers mobile POS, an increase of 25 percent from 2014."
    KC's View:
    It is important to note that the research was released by SOTI, Inc., which describes itself as a provider of mobility solutions.

    That's not to say that I doubt the numbers. Most of them seem reasonable to me. But the real surprise would've been if a mobility-oriented company had come out with numbers that downplayed the trend.

    Published on: January 20, 2016

    • There are reports out of India that Amazon plans to launch an online grocery-ordering-and-delivery service there later this year, perhaps as soon as April.

    According to the story, "Amazon is planning on expanding the initiative into a 'full-fledged' business. The publication added that Amazon's grocery delivery service will expand to up to 10 cities across India this year and the majority of orders will be delivered by Amazon's own logistics service."
    KC's View:

    Published on: January 20, 2016

    USA Today reports that McDonald's Japan is introducing a new product - french fries smothered in chocolate sauce and white milk chocolate, creating what it describes as "a wonderful salty and sweet harmonious taste."

    The story says that "on social media, the reaction to the chocolate fries was mixed, though some said they were ready to move to Japan to get their hands on the McChoco Potato."
    KC's View:

    Published on: January 20, 2016

    "Walmart has announced plans to close 269 stores. And this time, they're Walmart stores." - Stephen Colbert, on "The Late Show with Stephen Colbert"
    KC's View:

    Published on: January 20, 2016

    Got the following email from MNB fave Glen Terbeek:

    Closing small stores and increasing Walmart's emphasis in Walmart Technology seems counterintuitive to me.  In my opinion. real stores will exist in the future if they provide a value above and beyond a distribution value.  Values such as solutions, information, showrooming, social, convenience, pick up, etc, that are leveraged by a virtual shopping experience come to mind.  That probably means smaller and more frequent local stores not bigger super centers selling mostly non-differentiating items.  Applying technology to retailing requires rethinking the shopping experience values across the real and virtual “Stores."

    I agree. I tend to think that Walmart's small-store experiment didn't work because it didn't think of them in terms of how shopping will be done in 2020 and beyond.




    Responding to last week's piece about Roche Bros.' new Brothers Market in Massachusetts, MNB user Randy Evins wrote:

    That’s exactly how Bricks and Mortar compete in the future, make it an event not just a chore. A place to gather AND get a good meal. Amazon and Wal-Mart cannot pull that off (although in the South Wal-Mart actually does a good job of being a gathering place).




    And, I got a lot of email about the death of Glen Frey, which I wrote about yesterday.

    MNB reader Jim DeLuca wrote:

    What a fine sight to see.  This registers deeply for me in an odd way.  Back in 1973 when driving my Karman Ghia back east from San Francisco, the engine blew in the desert and I hitchhiked back to Atlanta from Arizona.  In Winslow the cops harassed me and made me walk to just outside of the city limits to continue my hitchhiking. So, no luck with the pretty girls.  I did get a ride from a Mormon truck driver who was pretty interesting...

    MNB reader Mike Moon wrote about my comment that "Heartache Tonight" was not just my favorite Eagles song, but one of my favorite rock songs ever:

    That song was hot when I was a junior in high school. We were allowed to leave the high school campus for lunch as long as we weren't late returning. There was a Burger King just a few blocks away, just close enough to get there in your car, hit the drive thru, and get back. My regular meal was a Whopper with Cheese (hold the tomato..). That song was in the regular lunchtime rotation of the radio station I would listen to in my car. Now, every time I hear it, I think of a Whopper sandwich...
     
    Sorry, it popped into my head. Had to share.


    I'm glad you did. Though I have to tell you that in 1979, when "Heartache Tonight" was released, I was 25 years old ... and Whoppers definitely were not what I was thinking about when I heard it.
     
    MNB reader Bill Raterink wrote:

    Just wanted to say that for the Eagles, or ANY artist, the greatest test is the test of time.  I personally know of 3 separate generations that all sing along like you do.  Not all the same songs, but still vintage Eagles, nonetheless.  Personally, for me, it's Peaceful Easy Feelin', followed closely by "Get Over It".

    A dark somber cloud rests silently over Winslow, AZ tonight.


    MNB reader Mark Boyer wrote:

    Too many of the artists we grew up with seem to be dying off here lately. And only in their late sixties. Do you remember when you thought 60 was really, really old?
     
    I turn 60 this year, and know you have already made the turn.


    Thanks for reminding me.

    But in the words of a different singer who originally found fame in the seventies, I like to think that I'm growing older, but not up.
    KC's View: