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    Published on: March 17, 2017

    by Kevin Coupe

    "The Daily Show with Trevor Noah" this week featured a segment about the impact of connected technology - or, as correspondent Ronny Chieng put it, "connecting as much stupid garbage as you can to the internet ... just because you can make something smart doesn't mean you should."

    It is a pretty funny segment, with some real truth at its core (like when he suggests that an alternative to a "smart hairbrush" is a mirror), and so I offer it here.

    As usual when I link to late night cable comedy, let me remind you that some of the language and attitude is edgy, and so you may want to be careful if you work at home and there are kids in the room, or your office computer can be heard by a wider audience.

    Other than that ... Enjoy.
    KC's View:

    Published on: March 17, 2017

    AgWeb reports that the 2018 budget proposal unveiled by the Trump administration this week "requests $17.9 billion for USDA. This represents a 21% decrease from 2017." However, AgWeb also notes that despite the budget cuts, "the Food Safety and Inspection service would be fully funded."

    The Special Supplemental Nutrition Program for Women, Infants and Children (WIC), on the other hand, "would receive $6.2 billion ... approximately $400-500 million lower than assistance in 2015 and 2016."

    The Washington Post writes that "the programs facing cuts fall under 'discretionary' spending, which includes food safety, rural development and conservation funding, research grants and international food aid. The cuts will not affect mandatory spending programs such as the Supplemental Nutrition Assistance Program - SNAP, also known as 'food stamps' - and crop subsidies for farmers."

    The Post also notes that "the McGovern-Dole International Food for Education Program, which distributes food aid to children living in poverty abroad, would be eliminated under the budget proposal, saving about $200 million. The document says the program - named after former U.S. senators George McGovern (D) and Bob Dole (R), who pushed for it - 'lacks evidence that it is being effectively implemented to reduce food insecurity' .... The program estimates that it helped feed more than 2 million people in developing countries in fiscal 2016, including in Cambodia, Ethiopia, Guatemala, Haiti, Kenya, Laos, Malawi and Tanzania."

    Reuters reports that the cuts will also affect "some statistical and rural business services ... Farm groups warned that farmers and rural communities could suffer."

    John Newton, director of market intelligence with the American Farm Bureau Federation (AFBF), tells Reuters that the cuts are "a big concern because a lot of farmers and growers rely on USDA's statistical capabilities to make a lot of marketing and risk management decisions and planting decisions."
    KC's View:
    At least in the initial version, it would appear that the Food Safety Modernization Act (FSMA) is not being watered down or unfunded by the new administration ... which will be a little bit of a surprise to the companies that thought that they didn't have to adhere to its dictates because eventually they'd go away when the GOP got total control of the food safety vehicle.

    That's not the case. And I, for one, am glad ... because I think that a system that creates greater transparency is a good one for everybody.

    Full disclosure: In the interest of my own transparency, I need to point out here that ReposiTrak - which has created automated information management technology that allows companies to do the things necessary to comply with evolving FSMA regulations - is a longtime MNB sponsor, and I've produced a number of videos for them on the subject. Those videos - largely with senior food industry executives with a great deal of objectivity and knowledge - have convinced me about the seriousness of the situation and the need for retailers to get with the program.

    Published on: March 17, 2017

    The Chicago Tribune reports that while Costco did not have a great holiday season, there was one major bright spot for the retailer - booze.

    "Alcohol sales have surged at the warehouse-club chain, lifted in part by the cult status of Costco's Kirkland Signature-branded liquors," the story says. "Many customers swear by the private-label products, and some are even convinced that the spirits are actually top-shelf liquors such as Grey Goose and Tanqueray hidden behind Costco packaging." While quality is a major, draw, so is price: "Costco's markup on its alcohol is in the range of 10 percent to 14 percent -- extremely low by industry standards. In contrast, most retail liquor stores add from 25 percent to as much as 45 percent, especially for premium items."

    Indeed, the Tribune reports that "alcohol brought in $3.8 billion for Costco in its latest fiscal year, with wine sales accounting for almost half of the total. The category has grown 46 percent during the past five years," outpacing every other category at the store.

    And now, the story says, other retailers - including Target and Whole Foods - are trying to mimic Costco's approach to alcohol, establishing their own private label booze brands that they hope will differentiate them.
    KC's View:
    One of the challenges in trying to mimic what Costco does in its alcohol departments is trying to replicate its pricing discipline. It seems to me that Costco's approach is one that reflects its broader DNA ... and that is tough to replicate.

    I heard a funny story the other day on one of the cable news channels about Sergey Kislyak, the Russian ambassador to the US who has gotten a lot of publicity lately because of allegations that he has a too-cozy relationship with Donald Trump and his minions. Someone was saying that Kislyak has a reputation for throwing great parties, but that people started talking about how much trouble the Russian economy must be in since at a recent party, they were serving Costco private label vodka.

    On the other hand, maybe Kislyak just knows something that the rest of Washington doesn't.

    Published on: March 17, 2017

    The Seattle Times reports that Amazon has developed a mechanism that allows people to access its voice-enabled assistant, Alexa, via an iPhone mobile application.

    While Alexa has to this point been available via the Echo family of products, as well as via Amazon's Fire TV and tablet computers, this represents a major expansion "by incorporating Alexa into the iOS Amazon app," which brings "the voice interface to its widest audience ever.

    "It also addresses a critical problem," the story says. "Until now, Alexa has been relatively homebound. But this puts Alexa on a smartphone, side by side with Siri, Apple’s own digital assistant. It’s a move that could enhance Alexa’s relevance at a time when Amazon is jostling for dominance against Google’s Assistant, Microsoft’s Cortana and Siri."
    KC's View:
    This certainly works for me, since I've always called Alexa a "Siri that actually works." The integration of a system like Alexa into various venues - like smartphones and cars - seems inevitable ... as does the use of them to shop in entirely different ways.

    BTW ... takeout ordering service Grubhub announced this week that it is "integrating its ordering capabilities with Amazon Alexa," which "will make it easier for customers to reorder food from Grubhub's network of more than 50,000 restaurants using only their voice."

    For the moment, it is just reordering that is possible ... but one has to assume that this is just a temporary limitation.

    There are a lot of inevitabilities here. None of them strike me as being positive developments for traditional retailers that do not adapt.

    Published on: March 17, 2017

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    • Interesting story from Bloomberg about how Amazon, contrary to pretty much all expectations, has become a major procurer "of services and supplies from mom-and-pop merchants, even those it might consider as rivals."

    "Our fulfillment centers across the U.S. are encouraged to work with local businesses to support the site’s needs whether that’s connecting with local restaurants and catering companies to provide employee appreciation meals to purchasing supplies from local vendors," Amazon spokeswoman Kelly Cheeseman tells Bloomberg. "Whether it’s through the creation of jobs, purchasing from local suppliers or local giving, we’re proud to support the communities where employees live and work."

    One example:

    "Hondo Guillen's family runs Schaefer's Food 'N Drinks, a catering company in Chino, California. A few years ago, they started serving Amazon warehouse workers in San Bernardino tacos from a cart in the employee parking lot. Soon they were being asked to cater celebrations for Thanksgiving and Christmas and the occasional manager meeting.

    "They started with tacos, quesadillas, beans and rice, keeping it simple because they'd have to serve hundreds of people at a time during a brief lunch break. Their biggest Amazon order was feeding 2,000 workers over two days, 600 at lunchtime and 400 in the evening each day. An event like that costs about $15,000 ... Business from Amazon is helping the family expand from catering to a 135-seat restaurant and bar scheduled to open any day."

    Listen, there's no question that Amazon can be a retailer-and-job killer. And what it is doing in terms of supporting the local communities where it has facilities is no different from what a lot of other companies do.

    But I thought it worth noting - and a kind of Eye-Opener - that reality, as always, is a little more nuanced and complicated than some might think.


    • The Wall Street Journal this morning reports that while e-commerce is enormously popular in China, e-grocery has lagged in terms of acceptance. But that's changing.

    "Chinese shoppers spent 90.5 billion yuan ($13.1 billion) buying fresh produce online last year, an 86% jump from the previous year, according to research firm iResearch," the Journal writes. "Alibaba and its main rival, JD.com, are ramping up their efforts to grab a slice of the online grocery-shopping market by using a new form of courier service. The service works like the Uber of delivery, and is similar to Instacart, the Silicon Valley-based grocery-delivery startup valued at roughly $3.4 billion after a funding round earlier this month."

    The story continues: "The lower cost in China and a consumer culture already used to ordering restaurant meals via phone apps give the Chinese startups a chance at conquering the online grocery-shopping barrier faster than Instacart or other U.S. services such as Amazon Fresh.

    "The business model has the potential to disrupt traditional courier services, with their higher efficiencies and lower costs. But there are challenges and a big question: Are Chinese shoppers ready to buy groceries online?" But the big players are convinced that by using algorithms to target customers who might be predisposed to shop for groceries online, they can get over the hump and generate some momentum for the trend.
    KC's View:

    Published on: March 17, 2017

    • Kroger announced that more than 15,000 employees working at 103 stores in its Michigan division have ratified a new agreement with the United Food and Commercial Workers (UFCW) that "provides wage increases, affordable health care and ongoing investment in our associates' pension fund to support their retirement."


    CNBC has a story saying that Dollar General seems to want to become a lot more like Walmart, outlining a strategy for the coming year that goes beyond the 1,000 new locations it plans to open.

    Among the plans - invest in lower prices, give store managers a pay increase, put more focus on fresh produce, develop a small-store/express format, and invest in e-commerce.

    All of which, CNBC suggests, are initiatives in which Walmart has engaged in recent years.


    • The Richmond Times-Dispatch reports that "Kroger is using a lighter weight, more environmentally friendly milk jug," rolling out "a gallon-sized jug that is 6 grams lighter than the previous version. The difference per jug is small, but the savings in terms of less trash adds up ... Plans are to roll out the jugs at Kroger stores nationally over the next two years — and when that is complete the upgrade is expected to cut about 5 million pounds of plastic per year from the waste stream."
    KC's View:

    Published on: March 17, 2017

    • Albertsons announced the promotion of Jonathan Mayes, the company's SVP public affairs, government relations, sustainability and diversity affairs, to the role of SVP external affairs and Chief Diversity Officer.

    in his new role, the company said, Mayes "will head up the company’s diversity and inclusion efforts, as well as its government relationships, philanthropy and sustainability departments."
    KC's View:
    Good guy. And a good move for Albertsons.

    Published on: March 17, 2017

    • Coborn’s, Inc. announced this week that Daniel G. (Dan) Coborn, former chairman/president/CEO of the company, passed away on Wednesday at the age of 86.

    Dan Coborn started delivering groceries at age 10, when most adult men were off fighting World War II; he'd sit on a pillow while driving the truck so he could see over the steering wheel. And the obit notes that "Dan led the company for the greater part of the 20th century, serving as its chief executive from the late 1950s until 1999."

    Coborn’s, Inc. was once named one of the Ten Most Generous Companies in America, and Dan Coborn was also well know for his personal philanthropy.
    KC's View:
    The obit take note of a number of different sayings for which Dan Coburn was known, but I think I like this one best:

    “You can’t sell from an empty shelf.”

    Published on: March 17, 2017

    ...will return.
    KC's View:

    Published on: March 17, 2017

    There is a sort of weird confluence going on.

    I must admit to being pretty much addicted to politically themed TV shows, and lately have been watching "Homeland," "24," "Designated Survivor," and "Madame Secretary" (my wife's favorite), while awaiting the May 30 return of "House of Cards."

    I'm probably a glutton for punishment, since I also find myself rotating among the various cable news channels during the day. The fictional versions of Washington intrigue often seems only marginally crazier than the stuff going on in the nation's capital these days, and sometimes not nearly as crazy.

    But it is hard to keep track. Elizabeth Marvel, who plays the president-elect in "Homeland," played a presidential candidate in the last season of 'House of Cards." Kiefer Sutherland, who plays the accidental president in 'Designated Survivor," used to be the take-no-prisoners Jack Bauer in "24." Miranda Otto, who was a duplicitous CIA agent in the last season of "Homeland," now is a righteous (so far) anti-terrorism agent in "24." And Jimmy Smits, who plays a Senator running for president in "24," played a Congressman who won the presidency years ago in "The West Wing."

    And this doesn't even count the fact that Mandy Patinkin, who hunts terrorists on "Homeland," used to hunt serial killers on "Criminal Minds."

    I'm so confused. Every once in a while we have to check to make sure we are assigning the right backstories to the right characters on the right shows.

    That said ... I am happy to confess my hopeless addiction to all these shows, and to recommend all of them to you. There are all escapism - mostly in the conceit that in each case there is someone who is flawed yet noble trying to do the right thing. (Not in "House of Cards," of course, where abject cynicism is the coin of the realm.)

    I must confess that my main problem with these shows is that they unfold slowly, on a once-a-week basis, in the manner of traditional television series. I want more, and faster ... I'm primed for binge viewing, and think that'll be the primary appeal of "House of Cards" when it returns - I can gobble it all up as fast as I can, in the manner of a can't-put-it-down novel.

    But I'm in for the duration ... though I'm dreading the inevitable, which is that Martin Sheen gets cast as the head of some terrorist cell. If that happens, my head may explode.




    That's it for this week.

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

    Sláinte!! And Happy St. Patrick's Day, especially to my friends Anne & Fiach, Denise & Feargal, who for me personify the soul of a land that brims with optimism, compassion and human poetry.
    KC's View:

    Published on: March 17, 2017

    AgWeb reports that the 2018 budget proposal unveiled by the Trump administration this week "requests $17.9 billion for USDA. This represents a 21% decrease from 2017." However, AgWeb also notes that despite the budget cuts, "the Food Safety and Inspection service would be fully funded."

    The Special Supplemental Nutrition Program for Women, Infants and Children (WIC), on the other hand, "would receive $6.2 billion ... approximately $400-500 million lower than assistance in 2015 and 2016."

    The Washington Post writes that "the programs facing cuts fall under 'discretionary' spending, which includes food safety, rural development and conservation funding, research grants and international food aid. The cuts will not affect mandatory spending programs such as the Supplemental Nutrition Assistance Program - SNAP, also known as 'food stamps' - and crop subsidies for farmers."

    The Post also notes that "the McGovern-Dole International Food for Education Program, which distributes food aid to children living in poverty abroad, would be eliminated under the budget proposal, saving about $200 million. The document says the program - named after former U.S. senators George McGovern (D) and Bob Dole (R), who pushed for it - 'lacks evidence that it is being effectively implemented to reduce food insecurity' .... The program estimates that it helped feed more than 2 million people in developing countries in fiscal 2016, including in Cambodia, Ethiopia, Guatemala, Haiti, Kenya, Laos, Malawi and Tanzania."

    Reuters reports that the cuts will also affect "some statistical and rural business services ... Farm groups warned that farmers and rural communities could suffer."

    John Newton, director of market intelligence with the American Farm Bureau Federation (AFBF), tells Reuters that the cuts are "a big concern because a lot of farmers and growers rely on USDA's statistical capabilities to make a lot of marketing and risk management decisions and planting decisions."
    KC's View:
    It would appear that the initial budget recommendations do not indicate any sort of impact on the Food Safety Modernization Act (FSMA), which is administered by the Food and Drug Administration (FDA) ... but the comments about the Food Safety and Inspection service being fully funded give me hope.

    There are folks out there who have not done what they need to do in order to comply with FSMA because they thought eventually its dictates would go away when the GOP got total control of the food safety vehicle.

    I hope they're wrong, and that FSMA remains intact ... because I think that a system that creates greater transparency is a good one for everybody.

    Full disclosure: In the interest of my own transparency, I need to point out here that ReposiTrak - which has created automated information management technology that allows companies to do the things necessary to comply with evolving FSMA regulations - is a longtime MNB sponsor, and I've produced a number of videos for them on the subject. Those videos - largely with senior food industry executives with a great deal of objectivity and knowledge - have convinced me about the seriousness of the situation and the need for retailers to get with the program.