retail news in context, analysis with attitude

Published on: March 10, 2016

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

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

We talk a lot about food here on MNB, in part because a significant portion of our readership is in the food business. It also is a subject that can examined from a lot of different angles ... while I think the subject of GMOs in food is important, for example, I don't think it is any more important than talking about why In-N-Out burgers are far better than McDonald's, why a great Oregon pinot makes life better, or why food stores need to do a better job of actually being about food, and not just efficiently selling boxes, bottles and bags.

All of these subjects can be contentious, depending on who you are talking to. If you're talking to someone who eats to live, not so much. But if you're talking to someone who lives to eat ... well, a discussion of barbecue styles or great New Orleans restaurants or the elegant simplicity of a shrimp-and-lobster risotto or why bread pudding is always different depending on where you order it - all these things can raise in people enormous passion. (In case you haven't been paying attention, I'm one these latter folks.)

To be honest, one of the things I don't think about very much is agriculture. Not that I am unaware of its importance. I know where food comes from, at least intellectually, but I'm not a guy who has spent any time on a farm, or a ranch. Farmers markets, sure, but not actual farms. It's just not my thing. (Though I have to admit I was intrigued when one of my favorite people in the world told me that she'd compiled a list of things she wanted to do before she turned 50, and one of those things was to milk a cow. I'm intrigued ... but not enough to join her in the barn.)

That said, I also was intrigued the other day when I watched a recent TED talk by Caleb Harper, director of the Open Agriculture Initiative at the MIT Media Lab, on the subject of how computers will grow food in the future, and why it is important to enlist electrical engineers, mechanical engineers, environmental engineers, computer scientists, plant scientists, economists, urban planners, and yes, even farmers, as the next generation of people who will develop the next generation of farms, networking them and empowering them with technology in ways that, quite frankly, I'd never even considered.

I mean, I've seen hydroponic farms - I remember years ago when Fiesta Mart down in Texas actually built an enormous one right next to a produce department in one of its stores. It was impressive, theatrical, way ahead of its time ... and ultimately, if I remember correctly, not economically sustainable. And I know some people who are flirting with doing some of this stuff in their homes; I have a cousin who has something called a Grove Ecosystem in her home, also designed by the folks at MIT, which she uses to grow actual food that she actually eats. (The Grove system just got funded through Kickstarter, FYI...)

This is all a little foreign to me, but I'm at least smart enough to recognize that there are some significant problems that the food industry needs to start examining and addressing.

Here's an alarming statistic offered by Harper: Just two percent of the US population is in the farming business. And, he asks, "What good answer comes from two percent of any population?"

There's a window below in which you can see Harper's talk, or you can see it here. I think it is worth a look. Maybe you'll learn something you didn't know. I did.

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

Published on: March 10, 2016

by Kevin Coupe

Spoiler alert: I'm going to say something nice about McDonald's. (Longtime MNB readers may want to sit down...)

Fortune has a story saying that since McDonald's raised salaries for employees around the US, it appears that turnover is down and customer service scores are on the rise.

The raises brought McDonald's-owned restaurants (just 10 percent of the national fleet) "to $9.90 from $9.01 starting July 2015, with average wages climbing above $10 per hour by the end of 2016," Fortune writes. "The company also said it would allow those employees to earn up to five days of paid vacation every year following one year of employment. " While franchised restaurants did not have to match those raises, they felt pressure to do so, and many did.

“It has done what we expected it to—90 day turnover rates are down, our survey scores are up—we have more staff in restaurants,” McDonald’s U.S. president Mike Andres said yesterday. "So far we’re pleased with it—it was a significant investment obviously but it’s working well.”

A couple of things here...

First, it is important not to make too much of this. It is a limited sample, within a short period of time. Even though I agree with the approach of paying people more money as a way of helping to create greater loyalty and engagement, lower turnover, and higher productivity, I would never suggest that this sample proves the case.

But I do think it is a helpful bit of information ... though I would, since I agree with the approach of paying people more money as a way of helping to create greater loyalty and engagement, lower turnover, and higher productivity.

There are those who suggest that the only thing that higher wages will create is less profitable companies, but I'm not sure this always is the case.

To be clear, this is a different discussion than the one about government-mandated minimum wage hikes, which, whether you agree with them or not, are more about paying people enough money so they don't work full-time jobs or in multiple jobs and still have trouble making modest ends meet.

Taken in context, and with an understanding that one cannot take too much from the results, the McDonald's scenario strikes me as an Eye-Opener.

Published on: March 10, 2016

Politico New York reports that the New York City Council will shortly begin considering legislation that would require "the city’s health department to create a poster detailing the 'risks of excessive sugar and other carbohydrate intake for diabetic and pre-diabetic individuals'." The information would be made available in city restaurants.

The bill's introduction comes as the city is fighting with the National Restaurant Association (NRA) over regulations that require chain restaurants to post a warning symbol next to food items that contain more than 2,300 milligrams of sodium; the legality of this regulation is currently before an appellate court.

The story notes that "more than one-in-five New Yorkers are pre-diabetic, according to the health department, and more than 700,000 are estimated to have diabetes ... Many of the bill's details, including what the poster would look like and the amount of sugar and carbohydrates that would be deemed excessive, would be left up to the city's health department. 

"The American Heart Association recommends no more than half of your daily discretionary calorie allowance come from added sugars. This is no more than 100 calories per day for most American women and no more than 150 per day for men."

Published on: March 10, 2016

Reuters reports that discounter Aldi "is expanding the range of products available on its British website for home delivery by adding non-food items such as electrical goods and garden tools."

Aldi only has been offering customers an online shopping alternative for about two months, and the company says it currently is attracting about one million users a week. However, it is not offering its regular food lines for sale online, but rather is just using its website to offer wine by the case and so-called "Specialbuys." The company has said that it would not be economically feasible to sell groceries online.

Published on: March 10, 2016

Politico reports that Starbucks is urging its US employees to vote in both the primaries and the upcoming presidential election, and "will be using TurboVote to make it easy for all U.S. employees to register to vote from both computers and mobile devices."

In a letter to all US employees, CEO Howard Schultz wrote that "for decades we’ve created meaningful connections with our customers and served communities ... We’re about to answer these questions once again by addressing a problem that many partners have identified as extremely important: increasing voter registration and participation across America.”

Schultz added that the "intention is nonpartisan, and it is simple: by helping to increase voter registration and participation, we believe more people will have an opportunity to make their voices count."

The idea came from an employee forum attended by Schultz, at which a shift supervisor urged him to make it easier for workers to vote in elections. It is not the first time that Starbucks has promoted the importance of voting; in 2008, people who voted were treated to a free cup of coffee in its stores.

Published on: March 10, 2016

New York Times technology columnist Farhad Manjoo offers an assessment of Amazon's Echo technology, which he describes as "a screenless, voice-controlled household computer." But, the column suggests, that description hardly does it justice.

"A bit more than a year after its release, the Echo has morphed from a gimmicky experiment into a device that brims with profound possibility," Manjoo writes. "The longer I use it, the more regularly it inspires the same sense of promise I felt when I used the first iPhone - a sense this machine is opening up a vast new realm in personal computing, and gently expanding the role that computers will play in our future."

Manjoo goes on: "More important, just like the early iPhone, Amazon has managed to turn the Echo into the center of a new ecosystem. Developers are flocking to create voice-controlled apps for the device, or skills, as Amazon calls them. There are now more than 300 skills for the Echo, from the trivial — there is one to make Alexa produce rude body sounds on command — to the pretty handy. It can tell you transit schedules, start a seven-minute workout, read recipes, do math and conversions, and walk you through adventure games, among other possibilities."

And help people shop online. At Amazon.

Manjoo's piece is an excellent assessment of a game-changing technology, and you can read it here.

And by the way ... this is along the same lines as what Tom Furphy said about the Echo in one of our Innovation Conversations, which you can read here.

Published on: March 10, 2016

• Minnesota-based Lunds & Byerlys announced yesterday what it called the launch of its "new eCommerce and digital customer engagement program. The first six stores are now live at their Lunds & Byerlys Kitchen, Ridgedale, Chanhassen, Maple Grove, France Avenue Edina and Burnsville locations, with the subsequent stores to be rolled out this month." The new eCommerce program is said to offer "1 to 1 personalization across the entire shopping experience, from homepage to catalogue to search to product recommendations. Each step of the shopping journey will display the most relevant items for each shopper based on their individual purchase history and ongoing transactions."

The Lunds & Byerlys e-commerce solutions are powered by Unata.


• TechCrunch reports that "Amazon’s logistics arm is taking a big step forward by leasing a fleet of Boeing 767s that will ship packages to customers in North America. Air Transport Services Group (ATSG), an air cargo transportation provider, said that Amazon has agreed to lease 20 of its planes for five to seven years."

The leases build on reports that Amazon plans to take more control of the fulfillment process, even competing with FedEx, UPS and the US Postal Service where and when it can.

Published on: March 10, 2016

• The Charlotte Business Journal reports that "Food Lion is investing $215 million into the Charlotte market.The Salisbury-based grocer says it plans to remodel 142 stores, with projects slated to be complete between May and October. The goal is making the stores easier to navigate and shop, while also cutting prices on frequently purchased items from apple juice to produce."

The story goes on to note that "Charlotte is the fourth market across Food Lion’s 1,100-store footprint to be remodeled. When complete, one-third of the grocer’s stores, which span the Southeast and Mid-Atlantic, will have been updated."

Published on: March 10, 2016

• SpartanNash announced the hiring of Chris Meyers, CFO at KeHE Distributors, to be its new chief financial officer.

He succeeds Dave Staples, who has been acting as SpartanNash’s interim CFO since March 1, 2015, when he was appointed the company's COO.

SpartanNash also has announced the retirement of chairman Craig Sturken, who has served in that role since the 2013 merger of Spartan with NashFinch. Before that, he was Spartan's president/CEO.

The SpartanNash board of directors has nominated CEO Dennis Eidson to succeed Sturken as chairman.


• Aldi announced that Brent Laubaugh, vice president of its Saxonburg division, has been promoted to co-president of Aldi in the US, joining David Behm and Chuck Youngstrom, who continue in their roles as co-presidents. All three co-presidents report to Jason Hart, CEO, Aldi.

Laubaugh has been with Aldi for more than two decades.

The move is seen as part of the company's efforts to build out its US infrastructure as it expands its national footprint.

Published on: March 10, 2016

...will return.