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    Published on: November 29, 2016

    by Michael Sansolo

    According to one famous political axiom, all politics is local. The food supply, however, is a very different thing.

    Granted this may upset those in the locavore movement, but the reality is that we all eat foods that travel to us. Weather and farming realities make anything else pretty much impossible.

    Sure, the future could offer vertical farming in cities, 3D food in our homes or even food replicators in our starships. For now though, the food supply relies on a massive supply chain that spans the entire nation and links around the globe.

    And every so often we need to pay a little attention to that.

    The New York Times ran a fascinating story this past weekend about a small link in our supply chain that is in danger of rupturing.

    The story focused on two locks - numbers 52 and 53 - along the Ohio River, where it separates Illinois and Kentucky, just before it meets the Mississippi River. More traffic passes though those two locks than any other point on the inland waterway system. Sadly, both locks are apparently falling apart and their long awaited replacement is behind schedule.

    You can count waterways, dams and locks among the many things I don’t fully understand. But the article laid out clearly why this small patch of river matters so much.

    It starts with the reality that the waterways are an essential part of our supply chain. More than 70 percent of all international trade is done by water and while domestic transport is far more reliant on trucks and trains, the waterways are still a vital piece of the puzzle. None of the three modes - train, truck or water - have enough capacity to make up for a major problem in any of the others.

    That means that a problem at locks 52 and 53 or any place else in the supply chain could instantly reverberate throughout the food supply, driving up both prices and product scarcity.

    This is why groups like the Food Shippers of America (a group I’ve happily spoken to over to the years) talk with concern about a shortage of truck drivers and the many problems existing drivers encounter when delivering to food industry facilities. In short, many companies make the process unnecessarily difficult, disrespecting the lifelines that actually feed you.

    But it’s more than this. An article about locks 52 and 53 may make even New York Times readers think a little bit more about the miracle of how efficiently and inexpensively food travels. That’s a lesson that should be shared.

    The locavores actually have done all of us a great service. They have made consumers aware of agriculture in a time when so few actually work in the fields. They’ve reminded shoppers that food comes from somewhere, not just a supermarket shelf.

    We celebrate local when possible, which is great, but many times it isn’t. When that’s the case we might want to provide a little education on just where the products do come from, how they get there and why a super-efficient supply chain really does matter.

    Sometimes a little knowledge can go a long way as well.

    Michael Sansolo can be reached via email at . 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.
    KC's View:

    Published on: November 29, 2016

    by Kevin Coupe

    The Financial Times has a curious piece about how appliance maker Electrolux "is exploring starting an 'Uber for laundry' in which consumers would use their own washing machines to wash other people’s clothes."

    CEO Jonas Samuelson says that the idea has potential, since most washing machines have a lot of down time when they are not being used. On the other hand, he says, "there are enormous complexities such as what happens if the clothes come out and are ruined?"

    The story notes that " Samuelson is seeking to make the company focus more on the demands of consumers by, for instance, making ovens that cook a joint of beef until it is rare rather than requiring the customer to set the temperature and time."

    There is a broader goal in mind here - "boosting its profitability amid tepid revenue growth for white goods such as dishwashers, vacuum cleaners and tumble dryers."

    And it illustrates, I think, what every company has to do - consider even the most unlikely ideas to see if there are grains of potential and possibility to be mined. An "Uber for laundry" may seem like an improbably construct ... but perhaps no more improbable than Uber itself sounded in 2008, the year before the company was founded.

    Could be an Eye-Opener.
    KC's View:

    Published on: November 29, 2016

    The Washington Post reports that early sales numbers on Cyber Monday pointed toward e-commerce sales that were expected to be up 9.4 percent over the same day in 2015.

    And USA Today writes that "in the hours between midnight and 10 a.m., consumers had already spent $540 million."

    However, the Associated Press reports that what has become a "one-day Cyber Monday frenzy" may be going "the way of the dial-up modem," largely because retailers are spreading out sales and promotions over days and weeks - which in part may explain why there were more e-commerce sales on Black Friday than bricks-and-mortar sales.

    According to the story, "Cyber Monday still packs the biggest punch in terms of a single online shopping day — for now. As of 7:30 p.m. EST on Monday, shoppers were on track to hit a record of $3.39 billion, up 10.2 percent from a year ago, according to a tally by Adobe Digital Insights, which tracks online retail transactions.

    "But other days are catching up. On Black Friday, consumers spent $3.34 billion, a 21.6 percent jump from last year, according to Adobe."

    And the Post concedes that "social media mentions of Cyber Monday have fallen a staggering 82 percent compared to last year: People have already gotten their goods, or they’re planning to hold out for the next round of discounts."
    KC's View:
    Re/code makes one compelling observation, I think - that the apparent dominance of e-commerce over bricks-and-mortar for holiday shopping, as well as the way this affects consumer behavior, make sit very obvious that "Walmart’s future runs through Amazon."

    And, by the way, potentially everybody else's.

    For its part, Amazon says that it was on pace yesterday to have the best Cyber Monday in its history, according to a story on GeekWire, which also reports that the best-selling item on Amazon so far this season has been the Echo Dot. The Dot, of course, is designed as one way for Amazon to make it easier for people to buy other stuff on Amazon.

    Just sayin'...

    Published on: November 29, 2016

    Bloomberg has a story about how Amazon, frustrated by hundreds of millions of dollars in sales going to counterfeiters of branded products, is "getting serious" about the problem.

    Amazon "has made fighting phonies a major goal for 2017, building teams in the U.S. and Europe to work with major brands on a registry to prevent fakes, according to a person familiar with the initiative, who was not authorized to speak about the matter and requested anonymity. Discussions with Major League Baseball and the National Football League about selling merchandise on Amazon hit a standstill earlier this year due to concerns about Amazon's lack of control over fakes, the person said."

    The story goes on: "The new Amazon teams will encourage brands -- even those that don't sell on Amazon -- to register with the online store, the person said. Once registered, Amazon requires any marketplace merchants listing those products to prove that they have the brand's permission to sell them online. Amazon began experimenting with the registry earlier this year with Nike and other companies. The bigger push in 2017 will target thousands of large companies, including those that have been reluctant to sell on Amazon because of knock-offs."

    “Amazon has zero tolerance for the sale of counterfeit items on our site," Amazon says in a statement.
    KC's View:
    I've felt for a long time that this is something for which Amazon has to take responsibility. It is a time suck for vendors to have to track it, Amazon traditionally has not been very responsive about dealing with complaints, it was costing vendors a ton of money in terms of potential sales, and it was costing Amazon in terms of credibility.

    I'd suggest that the time to get serious was a long time ago. But better late than never.

    Published on: November 29, 2016

    The Chicago Tribune reports that ItemMaster, described as a startup that creates "tools for food brands to create detailed and accurate product labels," as well as offering "a platform through which food brands can update product information online, so that retailers can better categorize products," has raised $7.5 million in investment capital, which will allow it to expand its staff and product development efforts.

    ItemMaster, as it happens, was incubated by Ahold-owned Peapod before being spun off as an independent company earlier this year.

    The story says that ItemMaster "works with 1,700 manufacturers and 85,000 products."
    KC's View:
    "Product information" is just another phrase for "telling a story," and I think anything companies can do to help retailers and suppliers create more compelling and relevant narratives is a good thing.

    Published on: November 29, 2016

    The Financial Times has a story about the building that Amazon appears to be ready to turn into its first bricks-and-mortar grocery store, which the piece says "functions around a drive-in concept, and features a large tilted awning that gives it the air of a 1950s drive-in diner. Customers who come here will not browse the aisles — they will order their goods online in advance, then stay in their car while their groceries are brought out to them.

    "Amazon’s move into bricks-and-mortar outlets marks a dramatic departure from its online-only strategy, whose success has made the company one of the most valuable businesses in the world. It also underscores a key new goal, one that has so far proved elusive: mastering the grocery market."

    You can read the entire story here.
    KC's View:

    Published on: November 29, 2016

    The New York Times has a story about what could be a harbinger of a trend that could affect digital consumers - dozens of California cities are debating the possibility of taxing video streaming services, "a step that could make up for lost tax revenue from growing numbers of cord-cutters."

    In Pasadena, "at 9.4 percent, the so-called Netflix tax would treat streaming services as a traditional utility, the city said. If you use multiple services - for example, Hulu, Amazon Video and HBO - it would be added to each bill.

    "The move in Pasadena, with a population of about 140,000, has drawn consternation from technology companies and consumers who worry that it could be copied across the state." But some public officials "have argued that taxation rules need to be revised to account for changing technologies. It is unfair, some say, that people who get video through cable television are taxed while those who have shifted over to internet streaming services are not."
    KC's View:
    I don't think this would cause me to change my viewing habits. I do think it could affect my voting habits.

    Published on: November 29, 2016

    • The Chicago Tribune has a story about Hormel is working with the Cancer Nutrition Consortium has has developed "a line of foods for cancer patients under a new brand called Vital Cuisine." The initiative at Hormel was largely driven by the then-CEO of Hormel, Jeff Ettinger, whose mother had died of cancer and wanted to explore "how to help people undergoing treatment or recovering from it."

    According to the story, "The ready-to-make meals are easy for fatigued patients to make whenever their appetite allows and are packed with protein, calories and help with hydration — which have been identified as problem areas during treatment. These new products for cancer patients are under the purview of Hormel Health Labs, a subsidiary of Hormel Foods Corp. formed in 1994 that sells to the health care market. Its portfolio includes foods designed for people with swallowing difficulty, dietary restrictions and other conditions that chiefly affect the elderly."

    • In the UK, the Guardian reports that "Morrisons is reviving the Safeway brand after 11 years as part of its attempt to move back into the fast-growing convenience market.

    "The former supermarket brand, which disappeared in November 2005 after being bought by Morrisons, will front a range of hundreds of food and grocery products, many of which will be produced within the Bradford-based company’s own factories. Morrisons will begin distributing the range in the first half of next year, although the retailer has not confirmed whether it will be handling relations with independent stores directly or working with a distribution firm."
    KC's View:

    Published on: November 29, 2016

    Advertising Age reports that "Mondelez International hired two outsiders with plenty of consumer packaged goods experience to run its media and digital team and its e-commerce business as the snack maker looks for ways to operate both operations more effectively."

    The company has hired Bob Rupczynski,most recently of Kraft heinz, to be head of global media and digital. And Jeff Jarrett, formerly of Kimberly-Clark, has joined Mondelez as VP-global head of e-commerce.

    The goal, the story says, is to move e-commerce and digital "out from under the marketing umbrella."

    • Frieda’s Specialty Produce announced that it has hired Allen DeMo to be its new Director of Procurement and Sourcing, responsible for directing the company's grower development team. DeMo previously has worked at Green Thumb Produce, DiMare Fresh, Ready Pac Specialties and most recently DLJ Distributing. 
    KC's View:

    Published on: November 29, 2016

    Yesterday, when writing here about three notable deaths that occurred while MNB was on a brief Thanksgiving hiatus, we actually forgot a fourth - the passing of Ralph Branca, the former Brooklyn Dodger pitcher (who also over the course of his career played for the Detroit Tigers and New York Yankees), who died last week at age 90 in a Rye, New York, nursing home.
    KC's View:
    Everything you need to know about Ralph Branca - beyond the fact that he was a three-time All Star with a .564 winning percentage and 3.79 ERA over 12 seasons in a career shortened by injury - can be summed up by two important events in his career.

    By far, the more famous was when he gave up the winning home run - "the shot heard 'round the world" - to Bobby Thompson of the New York Giants in the final game of the best-of-three 1951 National League tie-breaker series. But while Branca was excoriated by Dodger fans for giving up the homer, he became friends with Thompson over the years and behaved as a gentleman even when it became evident that the Giants had been stealing signs during the series.

    But even more important was the day in 1947 - Opening Day of the baseball season - when Branca lined up before the game with rookie Jackie Robinson, even when other players would not. I've always felt that Jackie Robinson, was one of the most important people of the 20th century, but the willingness of people like Branca to stand up for his rights cannot be forgotten.

    Published on: November 29, 2016

    Responding to yesterday's story about how some video stores are finding ways to be viable even in a world of video streaming, MNB reader Sara Freitag wrote:

    Having made the trek from Cincinnati to northern Michigan over the Thanksgiving holiday, I was amazed to find video stores in almost every small town.  Small town USA is very different than urban USA – very different consumers with very different wants and needs and perhaps slow internet!

    Two things.

    First, I do a little trekking across middle America myself, and I've never noticed the video stores that you talk about. Next time I drive to Oregon, I'll try to pay more attention.

    Second, I would simply argue that slow internet is nothing to feel nostalgic about.

    From another reader, on the same subject but with a different perspective:

    I have a comment on the video rental story. While I agree differentiation is the way for retailers to stay relevant, the WSJ made a misstep claiming that these unique video rental stores create a ‘browsing experience impossible online’.

    Pre-2000s would they have said it would be impossible for an online retailer to push bookstores out of business, impossible to do your primary grocery shopping online, or impossible to replace DVDs with streaming videos? Someone must only create a better browsing UI, a more niche service, or offer more movies a la carte.

    From Amazon I can buy almost any video I want that isn’t available on one of the subscription services. A targeted streaming platform called Crunchyroll already exists for Anime shows. Then examine how much more coherent Netflix has become since it was first released. Streaming services will only become more specific, better designed, and more fully stocked.

    The past 10 years suggest nothing is impossible online.


    A question from MNB reader Michael Stephan about how I do my football scores:

    Why is it that you list every team name except for the Redskins?  For that team you list them as "Washington."

    Because I got several emails from readers suggesting that "Redskins" was offensive. It seemed like a small thing to do in order to be sensitive to what seems to me to be an entirely legitimate complaint.

    Got the following email from MNB reader Kevin Hollenbeck:

    I received a delivery today from Amazon.

    However, when I first went to the door, I saw a person that I first thought was a new neighbor that I had not met yet, because she was dress in regular clothes. When I asked how I could help her she handed me a package and asked me my name ( since she could she I was not my wife, who had ordered the package). I asked her where the Package came from, her response “Amazon”…I immediately looked for the brown truck and said what company are you with? She said she was with Amazon, then I saw she had a lanyard with Amazon written on it and an ID badge that I would see said Independent contractor… since I am a fairly loyal daily reader of your Blog, I remembered reading that Amazon was starting to use their own delivery services, so I quickly realized what happen.

    I was thinking it would have been nice to know that someone else other than a usual delivery service would be used. We live outside of Philadelphia where the was just an incident where someone had a packaged delivered and it was an explosive.

    Not that I was that concerned, but I did ask Alexa to track my packages and she told me that we just had a package delivered, so I knew that Amazon had delivered a package.

    I still think if Amazon is going to expand this delivery method they might want to let their consumers know more about it?

    Lastly I notice the person was driving what looked like a family van….how can Amazon afforded to pay a person enough to deliver packages in their own personal van and do it cheaper than UPS or FED EX?

    Finally, responding to my brief comments about Fidel Castro's passing, one MNB user wrote:

    It was the most perfect expression of what he was that I've read or heard. The hero who became the villain.

    Thanks. You are very kind.
    KC's View:

    Published on: November 29, 2016

    In Monday Night Football, the Green Bay Packers defeated the Philadelphia Eagles 27-13.
    KC's View: