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    Published on: June 17, 2016

    by Kevin Coupe

    Have you ever had a moment where you saw a new product and immediately smacked your head because it seemed like such an obvious innovation that you've never seen before, and maybe never even thought about?

    That happens to me all the time. (Probably because of a lack of imagination.) And it definitely happened to me last weekend when I went to the Global Market Development Center (GMDC) GM16 business session. I was scheduled to do a version of "The Innovation Conversation" there (with Tom Furphy participating via video because of a scheduling conflict), but I came in early because I wanted to check thing out. (Thanks to Patrick Spear and the entire GMDC membership and staff, by the way, for being terrific hosts ... there seems to be a genuine hunger there for change and innovation, and I think GMDC's size and focus will serve it well.)

    What I found was a ton of energy and a desire for change at both the business meetings and the exhibit floor - and one product that made me smack my head.

    The item - which to be fair, is not yet on the market, but will be shortly, and I can't wait - is a combination LED light bulb with a built-in bug zapper. You insert the bulb in any standard light fixture, and you can turn the bulb and zapper on together, or just the zapper. The company that makes this item is called Pic, which has been in the pest-fighting business for a long time, though I predict this will be the most successful item it ever has had.

    Brilliant.

    Now, the only thing they have to do is come up with one that is part of an exterior floodlight, and they'll have the whole package. (I'm told that is in the works.)

    I love companies that innovate, and unless I'm missing something, this strikes me as a terrific idea with natural consumer appeal.

    It was an Eye-Opener, and I just wanted to share it.

    KC's View:

    Published on: June 17, 2016

    Kroger yesterday announced its fiftieth consecutive fiscal quarter of positive same-store sales growth, with Q1 sales that were up 4.7 percent to $34.6 billion from $33.1 billion during the same period a year ago; excluding fuel, sales were up 7.8 percent. Same-store sales were up 2.4 percent for the period, excluding fuel.

    Q1 net income rose about 10 percent to $680 million.

    In a statement, CEO Rodney McMullen said that the company is "very pleased with a solid quarter during which we continued to strengthen our connection with customers and expand our ClickList offering to more customers in more markets. Fifty consecutive quarters of positive identical supermarket sales growth, excluding fuel, is extraordinary. Our associates work tirelessly to produce these consistently remarkable results. We've been through all kinds of business cycles during the last 50 quarters, and we've demonstrated time and again that regardless of the environment, you can count on Kroger to continue executing our strategy, investing in growth and creating value for our customers and shareholders."

    And, the Cincinnati Business Courier writes that Kroger "is looking at getting into the prepared foods business å la Blue Apron."

    On an analyst conference call this week, the story says, McMullen left open the possibility that Kroger could launch such an effort on its own, or buy an existing business.

    "Absolutely,” McMullen said. “We would look at any and all approaches. The thing that’s important is if we find somebody to make an investment in that would value the leverage that we bring to the party, as well. We would be very open to doing it on our own or doing it with somebody, and I think if you look at our track record, we’ve taken both approaches.”

    The Courier also reports that Kroger has expansion plans for Mariano's, the urban store chain that it acquired when it bought Roundy's last year; it has set a goal of opening four or five new stores a year, on a current base of about 30. McMullen described it as "a very aggressive capital plan."

    As for remodeling of existing Roundy's units, Kroger execs say they are behind schedule, but not concerned.

    “On remodeling stores and making some of those changes it took a little longer to get started than what we would have guessed,” McMullen said. “Now why we thought we could have got it started so quickly I’m not sure, and we’ll learn that for the next time we do something, because we’re still doing it faster than what we could do it within one of our historical Kroger divisions.”
    KC's View:
    I find myself wondering if one of the reasons that the Roundy's remodels are going more slowly than originally planned might have something to do with Kroger trying to figure out how far any of these stores can be pushed into new directions. It may be that these are mainstream stores that need more than a facelift, but figuring out where they fit into a company that is doing some very interesting things - ranging from ClickList to Main & Vine - may take some time. Better to go a little slowly in the beginning and get it right, than rush in and make mistakes. Speed, in this case, probably would look better to Wall Street than Main Street, and Kroger doesn't want to make that mistake.

    Published on: June 17, 2016

    Reuters reports that Walmart CEO Doug McMillon has a goal of growing Walmart's sales by as much as $60 billion during the next three years.

    At the annual Consumer Good Forum (CGF) conference in Cape Town, South Africa, this week, McMillon said, ""So sometimes people say Walmart is not really a growth company any more. I want to say: 'Well, if we layer on $50 to $60 billion, would that count, in three years?'"
    KC's View:
    It is good to get up in the morning like your hair is on fire. This seems awfully ambitious to me ... and I probably wouldn't bet my own money on Walmart's ability to grow sales to this extent. But they're a lot smarter than I am, and I would assume that to some degree, McMillon is putting his own leadership on the line by making such predictions.

    Published on: June 17, 2016

    As expected, the Philadelphia City Council yesterday passed legislation that will assess a tax on sweetened beverages - 1.5 cents an ounce on all sugary or artificially sweetened drinks sold by distributors in the city. The tax is expected to increase prices, but also raise more than $90 million a year for the city.

    The debate about the efficacy of such a tax continues, with proponents saying that it will result in the reduction of sugary drinks that have been linked to obesity and diabetes, as well as raising money that can be used for things like public libraries and pre-K education. Opponents, on the other hand, say that the tax reflects a "nanny state" attitude that only will really impact lower-income residents who will be paying more for the drinks, and that there is no real evidence that such an approach to public policy has an impact on the public's health.

    A lawsuit against the city is anticipated.
    KC's View:
    I'm skeptical about how the funds are going to be used; I always think that elected officials rarely live up to these kinds of commitments. And I do tend to believe that it is likely that this bill will be wrapped up in litigation for years to come, which will cost the city all sorts of money that might be better used elsewhere. (Like libraries and pre-K.)

    Published on: June 17, 2016

    Amazon announced yesterday that it will release a new food-related Prime Video series in September, "Eat The World with Emeril Lagasse," which will feature Lagasse and fellow chefs wandering the world in search of great food.

    The six-episode series is described as a kind of combination cooking and travel show. For example, in one episode, Lagasse and Mario Batali "start off their journey with ravioli in New York City, and then head to China in search of the best soup dumpling in Shanghai."

    The entire series is slated to be made available on Amazon Prime on September 2.
    KC's View:
    I suspect that binge watching will be healthier for me than binge eating ... so you can sign me up now.

    Published on: June 17, 2016

    • The Seattle Times reports that Amazon "wants to spread the knowledge of how it put together an ambitious employee-training program that prepares entry-level, mostly warehouse workers for better-paying careers outside the company."

    The company reportedly is "open sourcing" the program, called Career Choice, making the "blueprint" available to other companies to customize and improve upon.

    According to the story, "Career Choice is an Amazonian twist on the tuition-reimbursement programs common among many employers. The difference is that Amazon prepays 95 percent of the cost, and staffers aren’t required to study something related to furthering their Amazon career. In fact, Amazon will pay for training only in high-demand fields that could lead to better-paying jobs, CEO Jeff Bezos said in a recent interview at a Recode conference in California. That means jobs in health care or, say, as an airplane mechanic. The program is 4 years old."
    KC's View:

    Published on: June 17, 2016

    NextAvenue.org has a story about a Global Benefits Attitudes survey indicating that "American workers aged 50 or older think there’s nearly a 1 in 2 chance they’ll still be working at 70 but many employees who expect to work longer are exactly the ones who’ll likely be least able to do so."

    The reason? According to the story, "The workers expecting to keep plugging away until 70 ... are often 'the most vulnerable' and 'showing higher levels of stress, lower levels of health and lower levels of engagement with their current jobs' ... And if these vulnerable workers find themselves out of work, but wanting to be employed, the psychological effects - not to mention the financial ones - could be devastating."

    The study goes on to say that of those planning to retire after 70, "only 47% say they are in very good health" ... "40% feel they are stuck in their jobs (compared with 27% who plan to retire before 65)" ... "40% have high or above average stress (compared with 30% of those expecting to retire at 65) ... (and) "48% of workers earning below $35,000 expect to work to 70 or later (vs. 20% of those making $75,000 or more)."
    KC's View:
    It seems to me that established businesses have to take these kinds of studies very seriously, because the numbers suggest both a weakness in the workforce as well as in the consumer class. Neither weakness is good for business.

    Published on: June 17, 2016

    • The Minneapolis / St. Paul Business Journal reports that Target has hired Sam Parnell - described as "the former chief technology officer of sports news website Bleacher Report" - to be "vice president, innovation engineering. Based in Target's office in Sunnyvale, Calif., he'll focus on building an engineering team to support Target's innovation efforts."

    The story notes that Parnell will be focused on Target's top-secret "Goldfish" project, details about which have not been released to this point. However, Target has been staffing up for the project, with hires of people who do not have retailing on their resumes.

    ""Sam is unique as a startup leader in that he also has experience working within large companies," Stringfellow tells the Business Journal. "His ability to gracefully straddle early-stage startups and massive corporate structures is exactly what we need to attract talent from all over the globe to accelerate Target's innovation efforts."
    KC's View:

    Published on: June 17, 2016

    ...will return.
    KC's View:

    Published on: June 17, 2016

    Finding Dory, the long-awaited sequel to the classic Pixar film Finding Nemo is out today, and I am happy to report that it is a wonderfully entertaining piece of filmmaking that will appeal to, as they used to say, kids of all ages. It also is, as befits the film's locale, remarkably deep and perceptive in its view of the human condition.

    Finding Nemo, you may remember, was about how a clownfish named Marlin searches the ocean for his son, Nemo, who has been abducted by scuba divers and taken to Sydney, Australia, where he lives in a dentist's aquarium. Marlin is accompanied in his quest by a blue tang named Dory, who suffers from short term memory loss but displays a consistent and persistent optimism. The movie was an instant classic, and the vocal interplay between Albert Brooks voicing Marlin and Ellen DeGeneres as Dory was wonderful.

    It has taken more than a dozen years to come up with a sequel, but it was worth the wait. Dory is at the center of the action this time, and the movie starts with her beginnings, as her parents (voiced by Diane Keaton and Eugene Levy) try to help her get along despite her memory disability. But when she is separated from her parents, she ends up forgetting them, and she forges an entirely separate life in a different part of the ocean.

    For reasons too complicated to explain, Dory starts to recover some of her memories, and she sets off in search of her parents, accompanied by Marlin and Nemo ... and the movie veers effortlessly from emotionally touching to outright slapstick, with tons of heart and lots of laughs. (The ongoing joke about Sigourney Weaver made me giggle every time it was used. And there is a subtle adult joke involving octopus ink that made me laugh out loud.)

    If anything, Finding Dory may be even more visually arresting than its predecessor - the ocean has never looked so deep and vast and beautiful. And its message - which in the end, is about the acceptance of people who are different from us - is deep and vast as well. Nemo, you may remember, has a deformed fin ... but he is accepted as an equal by other fish. And while Dory clearly has special needs because of her memory issues, her way of looking at the world - seizing the moment without worrying about the legacy issues that hold so many of us back - eventually is seen as an advantage, not a handicap.

    Finding Dory is a terrific movie, not just a wonderful animated film. Find a kid and take him or her to it. And if there is no kid available, go see it anyway.




    That's it for this week.

    Have a great weekend, and I'll see you Monday.

    Slàinte!
    KC's View: