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    Published on: March 15, 2017

    by Kate McMahon

    The latest food sensation riding a wave of popularity on social media is a blue-hued newcomer named mermaid toast.

    For the past 10 days, this creation from Miami-based food stylist Adeline Waugh has been heralded as “our new breakfast obsession,” “mesmerizing” and the “most Instagrammable thing on the internet.”

    Waugh was a player in the recent rainbow food craze (which even permeated bagels and pizza) with her multi-colored unicorn toast. But the ocean-inspired look posted on her #vibrantandpure Instagram feed last week is hers alone.

    She achieved the aquatic swirl by adding blue green algae powders and liquids to almond milk cream cheese, and then spreading it on toast, with a sprinkling of gold flecks. Waugh said she was “beyond flattered” by all the positive attention and spotlight on her Instagram page.

    I think there are two business takeaways worth noting here. From a social media perspective, it illustrates how quickly an innovative, stylishly photographed idea can become a food phenomenon on social media.

    Additionally, it shows that Facebook, Instagram, Pinterest and Twitter continue to grow as platforms where casual cooks, sophisticated diners and culinary professionals alike create a virtual community focused on food. Retailers and marketers need to be tapped into that community to engage those consumers online, and by extension, in the store or on a website.

    Waugh’s choice of ingredients also speaks to the evolving American grocery-shopping list. Twenty years ago you would have been hard pressed to find almond milk in a traditional supermarket, let alone almond milk cream cheese. And algae was the slimy-green film on the side of a fish tank.

    No more. In fact SPINS, a national organic food industry tracker, recently reported that plant-based foods outpaced the growth of the whole food and beverage industry last year by 3.5% and that it now exceeds $4.9 billion in sales in the U.S.

    On the beverage side alone, market researcher Mintel notes the $2 billion U.S. non-dairy alternative industry (led by almond milk) has experienced explosive growth, and is set to expand another 50% between 2015 and 2020. As reported here on MNB, that and the corresponding decline in traditional milk sales has prompted the dairy industry to lobby Congress to restrict the use of the word “milk” to products from lactating animals like cows.

    Which brings us finally to that very unique blue green mermaid hue, created by the microscopic algae called spirulina. Admittedly, I knew very little about this super food’s provenance and its potential until discovering mermaid toast last week.

    But Fast Company said it all in an article last month with the headline: “Hope You Like Algae, Because It’s Going To Be In Everything You Eat.” And just this week a new study by Persistence Market Research predicted that growing awareness about the nutritional benefits of spirulina will serve as a key driver for the growth in the next decade.

    The mermaid toast photo is in effect a microcosm of two significant trends impacting the grocery and retail industry – social media and the shift towards more plant-based food sources. A unique combination – just like a mermaid - that is making a splash.


    Comments? As always, send them to me at kate@morningnewsbeat.com .

    KC's View:

    Published on: March 15, 2017

    by Kevin Coupe

    The Wall Street Journal this morning reports on a Northern California based food technology startup - improbably named Memphis Meats - that has "successfully developed the world’s first chicken strip grown from self-reproducing cells without so much as ruffling a feather."

    According to the story, "Scientists, startups and animal-welfare activists believe the new product could help to revolutionize the roughly $200 billion U.S. meat industry. Their goal: Replace billions of cattle, hogs and chickens with animal meat they say can be grown more efficiently and humanely in stainless steel bioreactor tanks."

    Taste-testers reportedly have weighed in favorably about both the taste and texture of the new chicken strips.

    However, there is a long way to go before such strips are economically competitive with what most probably would think of as the real thing.

    The Journal says that "Memphis Meats estimates its current technology can yield 1 pound of chicken meat for less than $9,000." However, "Boneless chicken breast costs an average $3.22 per pound in U.S. grocery stores, according to the Bureau of Labor Statistics."

    In fact, there is a long, long, long way to go. But Memphis Meats estimates that it will be able to sell its meat commercially - and, presumably, competitively - by 2021.

    Even if it takes a little longer, the impact that technology is likely to have on the food we eat is an Eye-Opener.
    KC's View:

    Published on: March 15, 2017

    The Wall Street Journal reports that a South Dakota judge has ruled that a $1.9 billion defamation lawsuit against ABC News and journalist Jim Avila can move forward, setting the stage for a trial focusing on ABC's reporting about "lean, finely textured beef," a filler found in about 70 percent of ground beef sold in supermarkets.

    In the original story, which ran in 2012, ABC News reported about the existence of lean finely textured beef, made of trimmings washed with ammonia to remove pathogens, in ground beef products. The filler was labeled "pink slime,"

    The ABC stories led to a number of retailers, restaurants and school districts to only buy meat without the lean finely textured beef trimmings, even though the trimmings were perfectly safe; it was the opinion of some microbiologists with the US Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) - though not the official conclusion - that the trimmings were "salvage," not meat." In fact, it was a FSIS employee who originally came up with the "pink slime" label.

    The Journal writes that the judge - while dismissing claims against then-ABC News anchor Diane Sawyer - said that a jury trial could conceivably conclude that the network was looking for a "negative spin" and that Avila had an anti-meat agenda, and therefore the case should go forward. The judge also said that Avila was “rude, agitated and hostile” in his questioning of beef execs.

    Beef Products Inc. which was one of the companies affected by the story says that "it was forced to close three of its four plants and erase hundreds of jobs when consumers recoiled." However, it does not provide current production figures.

    The Journal story notes that "due to a South Dakota food-libel law that triples damages against those found to have knowingly lied about the safety of a food product, ABC News could be hit with as much as $6 billion in damages."

    ABC News stands by its story.
    KC's View:
    To be honest, I had totally forgotten about this story.

    I went back and saw something I wrote back in 2012:

    I suspect that the legal wranglings about this case will go on for a long time, but I'm also reasonable sure that ABC News is not going to be willing to settle it - the precedent and impact on the free press would be chilling.

    Not being a lawyer, I have no idea how this will all turn out. But as a consumer and a member of the media, I have to say that I think that BPI may have only itself to blame - because in the end, its mistake was a lack of transparency, which is a real problem in today's world.


    I'll stick with that.

    I suppose that if BPI wins the suit, there will be a feeling that it was right all along. If so, that'll miss the more important lesson - that transparency is critical, especially in today's world.

    Published on: March 15, 2017

    The San Francisco Business Times reports that Walmart plans to hire "hundreds of tech workers in the Bay Area" for its dot-com operations "as it tries to compete with Amazon Prime's free two-day shipping for online orders."

    According to the story, "Walmart.com currently has 2,300 employees in the region. The new hires will come shortly after job cuts of about 175 Walmart.com workers across the Peninsula."

    Those job cuts occurred last January when Marc Lore - who sold Jet to Walmart for $3.3 billion and then was put in charge of all of Walmart's internet operations - said that “while some roles are going away ... we’ll be investing in our business and adding new skillsets during the year.”

    Six weeks ago, Walmart said it was ending its competitive response to Amazon Prime, a program called Shipping Pass that offered customers unlimited three-day shipping for a $49 annual fee. In its place, Walmart now offers free two-day shipping on two million SKUs as long as the order totals $35 or more.
    KC's View:
    Think of this as just one dispatch from the Walmart-Amazon wars, which are going to last a long time, and leave a lot of collateral damage.

    Published on: March 15, 2017

    The Ann Arbor News reports that "Shipt has begun hiring more than 10,000 shoppers this year to deliver groceries to Meijer customers."

    "Hundreds of shoppers" will be deployed to the 14 stores where Meijer will be offering delivery services, the story says.

    "We think there is going to be a huge amount of demand," Bill Smith, Shipt's founder/CEO, tells the paper. "We have already seen it in Detroit, when we launched in that area. We think that will carry out in the 6-state region that Meijer operates in."

    The story notes that Shipt, in fact, "learned a lesson in the Detroit area pilot program: it underestimated how many shoppers it would need. Customers have placed more than 65,000 orders since the service launched in September."
    KC's View:
    This is one of the ways that retailers can avoid becoming collateral damage in the Walmart-Amazon wars. It is why every food retailer has to be developing their own competitive responses to what Walmart and Amazon are doing.

    Published on: March 15, 2017

    The Dallas Morning News reports that "AmazonFresh is adding Martha Stewart's Martha & Marley Spoon meal kits to its online grocery shopping service in four cities," including Dallas, New York, San Francisco and Philadelphia.

    "Meal-kit services have attracted a lot of competition, but this partnership is putting a new twist on it," the story says. "Same-day shipping of the meal kits will be available via AmazonFresh's delivery service. The typical meal-kit subscription program ships food for two or three recipes and requires orders be placed a week in advance.

    Fortune writes, "One key way that Martha & Marley Spoon's tie-in with AmazonFresh will help it stand out from rival offerings is that it allows a customer to order a meal kit without having to commit to several nights of meals that are ordered a week in advance. That's a big differentiating point as many meal kits require a weekly subscription commitment. Some consumers say they've canceled a meal kit service because they felt that the weekly commitment was too restrictive."

    The Fortune story also provides the following context: "There are more than 150 meal delivery kit services in the U.S. today - including Blue Apron, HelloFresh and Plated - all targeting a slim group of Americans that have tried those kits and all trying to get more Americans to try the service. Meal kits are essentially aiming to 'disrupt' two industries: grocery stores and restaurants. They are more convenient and introduce consumers to new ingredients, but are also criticized for excessive packaging and being too costly."
    KC's View:
    Very smart idea, I think. We know that Blue Apron is conducting a test with Whole Foods, and so it makes sense for Amazon Fresh to create its own alliance. The brand has equity because of Stewart's name, and making the kits more easily accessible should be a win-win for both sides.

    Published on: March 15, 2017

    • The Puget Sound Business Journal reports that Amazon seems to be making progress on the opening of Amazon Fresh Pickup locations in both the Ballard and Sodo neighborhoods, with construction well underway and the city approving signs for both locations.

    The story notes that these are very different locations. Ballard actually has a lot of grocery options, including Fred Meyer, Trader Joe's and a planned New Seasons, while Sodo does not have as many supermarkets.

    Amazon has not said when the two locations will open.
    KC's View:

    Published on: March 15, 2017

    • The Ann Arbor News reports that discount department store Gordmans has filed for Chapter 11 bankruptcy. Gordmans currently has 106 stores across 22 states.

    Gordmans' home page proclaims its continued viability, saying, ""It's business as usual ... In light of our recent decision to file Chapter 11 bankruptcy, rest assured that you'll still find the same great values, styles and exceptional service. Our doors are open - and spring is waiting!"

    However, the story notes that "there are plans to liquidate assets, depending on the outcome of bankruptcy proceedings," as Gordmans joins the list of traditional retailers disrupted by online offerings and a rapidly changing retail landscape.


    • The Wall Street Journal reports on the increased prices that seem to have accompanied the UK's decision to leave the European Union.

    According to the story, "The sharp drop in the pound following Britain’s June vote to leave the EU has boosted the cost of imported goods as well as British-made products containing foreign ingredients or parts. Some companies have resisted passing on those higher costs to consumers, or have been protected by currency hedges. But in the more than nine months since the vote, many others have been raising prices."

    The Journal says that the price increases have affected everything from computers to frozen food, with the only silver lining being that British consumers "have enjoyed several years of falling prices thanks to competition and aggressive expansion by discount retailers." But this era may be about to end.
    KC's View:

    Published on: March 15, 2017

    • WalgreensBoots Alliance announced yesterday that it has promoted Adam Holyk, its Vice President, Corporate Strategy Development, to be its new Chief Marketing Officer.

    At the same time, it promoted Joe Hartsig, Senior Vice President, Merchandising at Walgreens, to be its new Chief Merchandising Officer.

    The announcement said that "the two executives will replace Linda Filler, who served as President of Retail Products and Chief Merchandising and Marketing Officer."
    KC's View:

    Published on: March 15, 2017

    We continue to get email about assertions that Starbucks is suffering from diminution of its brand image - and store traffic - because of an announced program designed to hire 10,000 refugees globally over the next five years, which some have suggested supersedes its commitment to US veterans.

    This is an assertion that strikes me as demonstrably and factually inaccurate.

    MNB reader Ben Ball wrote:

    You hit the nail on the head with that one.  It is one of the most frustrating parts of this entire broader debate. For those trying to write and enforce sensible laws in this arena it must be absolutely maddening. They keep talking about ILLEGAL immigration, while the press and the left keep talking about “immigrants and refugees”. It seems they conflate the two on purpose and for obvious ends. No matter how loudly anyone shouts “we are PRO- legal immigration!!!!”  it seems to disappear into a deafening din of “you are a bigot and anti-immigrant”.  This sword not only cuts both ways – it hurts too.

    I agree with you - except where you blame the left and the media for conflating the two. That's neither fair nor accurate. There's been plenty of conflation to go around, from both sides of the aisle.

    Another MNB reader wrote:

    Kevin, regarding Starbucks and immigrants, vets, disabled, underprivileged, racial issues, Christmas rather than holidays, health insurance, minimum wage, college for baristas, fair trade, organics and some items not as controversial such as climate change; perhaps sales are down because most of the time people just want a cup of coffee. Perhaps Starbucks' competition, whether better coffee or not, has simply stayed on script.

    In the Northwest, where I reside, there is an interesting and growing coffee chain called Dutch Brothers. I used to think they were "low brow" with more attention given to sugar and extra flavors than coffee. Their stores play loud music, the employees are more pep squad caricatures than enlightened hipsters and most locations are drive through stands. However, in my town, there are waiting lines to buy Dutch Brothers coffee. People I talk to rave about Dutch Brothers. Perhaps people just want to buy a cup of coffee and not have to think about all the problems in the world when doing so.


    I have to chuckle a little bit at this. For one thing, I think it probably is fair to suggest that Starbucks always has tried to write a different script than other companies. Sometimes it works, and sometimes it doesn't. But it never has been a company that only was interested in selling coffee.

    I also chuckle at the suggestion that Starbucks' appeal is to enlightened hipsters; I'ma regular customer, and that probably is the last way anyone would describe me. ("Boyish and probably delusional middle-aged man" is probably more like it.) While I'm aware of Dutch Brothers' appeal, it is important to remember that Starbucks tends to have lines, too - in fact, it generally has been my observation that if you walk into any mall in America, the two stores that are most likely to be crowded are the Apple Store and Starbucks.

    Finally, where I come from, the notion that a company, even with all the pressures that come from being publicly traded and seeking consistent profitability, continue to try to provide a good wage, reasonable health care benefits, the ability for employees to get a college education, source product in a sustainable way, hire disabled people, veterans and refugees, and even try to be inclusive of non-Christian and transexual customers while trying to address divisive social issues such as race ... well, I'd think that company is pretty extraordinary. Even when it makes missteps and miscalculations. The vast majority of these initiatives have little to do with politics.

    It Starbucks a perfect company? No. But I do think it tries to write its own script, and do the right thing. In some cases, it ends up doing the left thing, and it will have to live with those repercussions.

    Finally, the following email from MNB reader John Rand, who always provides insights that make me feel smarter:

    This debate which has been slowly unfolding on your website, and which is so clearly reflective of the larger issues under discussion in our country these days, seems to me to be so telling in so many ways.

    I personally do not think it matters one bit to Mr. Shultz if his stand on the issue of hiring refugees costs some business. I also do not think he much cared whether his stand on hiring veterans cost him much business either.

    And in neither case do I hold up a frame of reference of my own and approve or disapprove of Starbucks as a result. It’s basically outside my areas of passionate concern.  The whole point of debate and argument over public issues  is everyone gets to make that choice for themselves.

    We used to do that a little more privately, perhaps, a little more politely perhaps, but even that is largely an exaggeration of the true reality. I remember a little farther back than most people (even you, Kevin, youngster that you are!) and I remember boycotts on grapes that were divisive. I remember a time when supporting veterans was more of a risky position than supporting migrant farm workers. I remember when people were killed for protesting, when dogs and fire hoses were loosed on American citizens for a variety of reasons, when ordinary people were murdered for stating their political beliefs and more extraordinary people earned the word “assassination” for the same thing. And  I had older relatives who went to jail for supporting unions, and were shunned by other relatives who disagreed, creating family feuds that literally lasted for generations.

    We are not always a polite and well-behaved society. That really is not news. People who wring their hands over the current lack of civility because they think it is a departure from prior norms are both right and wrong – we have always had passionate and often destructive moments of public disagreement.

    What concerns me is how long it might take to get back to the essential genius of America – which is, ultimately, that nobody wins. In the end, we have always, slowly and sloppily and often painfully, found our way to the middle – to compromise and acceptance of differences, to some sort of recognition that you give a little to get a little, that not every issue is, in the end, worth fighting to the death over. We are not all the same, no one ever wins all the time, and no one ever loses all the time either. In the long run we create a sort of average of what offends the fewest number of people and what doesn’t matter all that much gets recognized as not very important, so we can really work on the big things.

    So drink coffee wherever you like. And you can fill it up with milk or cream or sugar or frothy air in whatever proportions you like, or you can drink it black and bitter and no one cares enough to make you do it any other way or in any other place. Take a deep breath. Civilization is not dependent on where you get coffee, or on where someone you will probably never meet in some town you will never visit uses a certain bathroom, or makes family choices you would never make, or has hobbies that you would never  want to experience.

    But it does matter if there are no jobs for people who want to work. It does matter if there is no food for people who are hungry. It does matter if some insect somewhere carries a disease that will kill or cripple your child if nothing is done. It does matter if the water stops running or the bridge you are on falls into the river while you are driving on it.

    If we all pay attention to what  actually matters we may discover we get along rather better fixing stuff that we all agree needs fixing.


    Words worth heeding.

    John is only wrong about one thing. I am plenty old enough to remember the grape boycott. In fact, I once met Cesar Chavez, a man I admired enormously.

    Sí, Se Puede!
    KC's View: