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    Published on: July 6, 2017


    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, coming to you from Portland, Oregon, where I've begun my summer adjunctivity, teaching at Portland State University's business school.

    I was walking along Southwest Third the other day, and was sort of hungry. I wasn't thinking specifically about visiting a food truck, but I found myself on that side of the street because I had to choose between the side of the street with the local Scientology headquarters, and the side with the tattoo parlors and strip joints, and I was less threatened by the latter. That also happened to be where the food trucks were...

    I probably went by a half dozen of the trucks, and then turned me on until one guy offered me a sample. It was for lamb, and it was so good that I immediately ordered a gyro sandwich.

    Go figure. The old truism still works - if something tastes good and smells good, people are a lot more likely to buy it.

    The importance of sampling shouldn't be news to anyone, but there still are a lot of retailers out there that really don't do a very good job of it. Maybe they do it a bit, but not with the frequency and alacrity that they should.

    That is more important now than ever. If retailers really want to compete with e-commerce providers, and offer something that their digital competitors do not and really cannot, sampling has to be part of the equation. Stores need to smell great, they need to offer food that tastes great, and they have to do their best to make people hungry the moment they walk through the door.

    This is a singular advantage. Waste it, and you abandon a major competitive weapon.

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

    KC's View:

    Published on: July 6, 2017

    by Kevin Coupe

    Three recent stories grabbed my attention, reinforcing the degree to which change is inevitable...

    To begin with, there was the announcement yesterday by Volvo that, as the New York Times writes, it will become "the first mainstream automaker to sound the death knell of the internal combustion engine, saying that all the models it introduces starting in 2019 will be either hybrids or powered solely by batteries."

    It is, the Times writes, "the boldest commitment by any major car company to technologies that currently represent a small share of the total vehicle market but are increasingly viewed as essential to combating climate change and urban pollution." While many carmakers have offered hybrids and battery-powered cars, low gas prices in the US have meant that automakers here have continued to push SUVs and pickup trucks. And yet, the Times, suggests, "Volvo’s move may be the latest sign that the era of the gas guzzler is slowly coming to an end ... by focusing on electrification, Volvo can concentrate its limited research and development resources on new technologies rather than continuing to invest in fuel-powered motors that may become obsolete."

    In other words, embracing change, and trying to turn it into a competitive advantage.

    I was reminded of the GMDC Retail Tomorrow technology conference on which I reported earlier this year, where Marc Tarpenning, one of the co-founders of Tesla, said that as his company developed its technology, they assumed that they'd face enormous competition from car companies that would under-price them. "We never discussed the possibility that the other car companies wouldn't do anything to compete with us," he said. But, of course, that's exactly what happened.

    Though maybe now the tide is shifting.

    And then, there was the story in the Washington Post about how Sony Music - almost thirty years after it decided to stop producing vinyl records - has announced that it once again will produce them.

    Despite the fact that there have been numerous alternative formats over the years - the cassette, compact disc, digital MP3 and streaming - vinyl continued to have niche appeal, and the Post writes that lately sales have been skyrocketing.

    In 2014, more than 9.2 million records were sold. In 2015, the number grew to almost 12 million. And there even was a week last year in the UK when vinyl sales eclipsed digital music downloads.

    The niche, it seems, has gotten larger: "Vinyl has always offered a more intimate experience," the Post writes. "The large format feels more substantial and turns the design of the cover and the inserts into satisfying artworks in their own right in a way that a CD never could. There’s something wonderfully interactive about putting on a record, listening to a side, and then flipping it over to hear the other side. It makes the listening experience something in which you are constantly physically and emotionally involved. It’s social, and fun, a far cry from the passive aural experience of CDs or digital."

    There was, however, one problem: "Most record presses closed down when it seemed vinyl was a commercial goner. NPR reported that only about 16 operating presses remain in the United States, most of which are overloaded with demand." And so Sony will have to use a Japan vinyl pressing plant to make its new records.

    But in this case, the change changed back.

    Finally, Salon reports that after four decades, National Public Radio (NPR) no longer will offer "Car Talk," the Boston-based radio show in which brothers Tom and Ray Magliozzi offered advice and guidance - leavened with hoary jokes and good humor - about car repairs.

    The thing is, the show has been in repeats since 2012, when the brothers retired, saying they wanted to “smell the cappuccino.” Two years after that, Tom Magliozzi passed away from complications related to Alzheimer's disease.

    Even in repeats, I must say that "Car Talk" was a reassuring presence, and the brothers - who sometimes referred to themselves as Click and Clack - remained an entertaining fixture on my radio dial, even though I know little about cars and would never even try to repair one on my own.

    But I guess that NPR figured that five years of repeats was enough, that it was time to stop living in the past and begin devoting that air time to the future. Change had to be embraced.

    Which I understand. Though I'll miss "Car Talk."

    It's all an Eye-Opener.
    KC's View:

    Published on: July 6, 2017

    Business Insider reports that Kroger has filed a trademark infringement lawsuit against Lidl just two weeks after the Germany-based retailer opened its first stores in the US.

    Kroger says that Lidl's private label, "Preferred Selection," is an attempt to confuse consumers because it is designed to resemble its own "Private Selection" own label.

    According to the story, "The lawsuit claims Kroger started using and marketing its 'Private Selection' brand more than 20 years ago, and that Lidl filed a trademark for 'Preferred Selection' last September. 'As a direct result of Lidl’s wrongful conduct, Kroger has suffered and will continue to suffer irreparable injury,' the lawsuit states."
    KC's View:
    The two labels look similar enough to me to suggest that Lidl knew want it was doing ... so I think it makes sense for Kroger to play hardball on this.

    In fact, Kroger is going to have to play hardball on everything when it comes to this new competition.

    Published on: July 6, 2017

    Bloomberg reports that Amazon's $13.7 billion bid to acquire Whole Foods has ramped up interest in the US for some retailer here to license the technology used in the UK by pure-play e-grocer Ocado.

    According to the story, "Ocado’s so-called smart platform encompasses everything from robots that pick groceries to software that routes delivery vans."

    Ocado CEO Tim Steiner says that the Amazon-Whole Foods deal has "caused skeptical U.S. supermarket operators to rethink the potential size of the online market," which has led to "increased interest from players in the US."
    KC's View:
    Of course, the story also notes that Ocado "generates minimal profit from its own retail business and securing licensing deals is crucial to justify years of investment and secure more profitable growth."

    So maybe one of the questions that has to be asked is why Ocado hasn't been very profitable. Maybe the robots are overcharging?

    Published on: July 6, 2017

    The San Diego Union-Tribune reports that the Brewers Association, in response to concerns that it has become increasingly hard to identify legitimate craft beers, has "unveiled a way to identify beer from small and independent breweries: a seal that can be slapped on bottles, cans, six-pack holders and other beer-related merchandise."

    The story notes that Association members "worried that recent acquisitions of craft breweries by multi-national corporations ... are confusing consumers. Is this beer from an independent company with local roots? ... The label is available, free of charge, to breweries that meet the association’s definition of 'craft' - annually producing less than 6 million barrels of beer, and with no more than 25 percent of ownership in outside hands."

    Bob Pease, president and CEO of Brewers Association, says that the goal is "to differentiate, not denigrate.”
    KC's View:
    As someone who always asks bartenders "what's local" when I'm looking for something tall and frosty, I'm totally in favor of anything that differentiates. If I were a craft brewer, I'd jump all over this.

    Published on: July 6, 2017

    Business Insider reports that a recent price study "found that Lidl was about 9% cheaper than Walmart, the largest grocer in the US. Lidl claims to offer products for as much as 50% less than rival stores."

    Lidl has opened 10 stores in the eastern US, with plans to have 80 open over the coming year.
    KC's View:
    I would expect Walmart to pretty much open its arsenal to make sure that stories like this don't become common, and to blunt any impact that Lidl might have on its image.

    Published on: July 6, 2017

    MarketWatch has a pretty interesting story about the influence that millennials are exerting over the culture: "They’re getting rid off beloved American staples like movies by binge-watching shows online, putting the death knell in sitcoms, and even single-handedly bringing about the end of churchgoing.
    Some of these trends may be overstated, but millennials do have different tastes and priorities than past generations ... Millennials, those born between 1977 and 1994, are also more socially and politically aware: 61% believe in equality and 75% feel the economic and political state of the world will have a big impact on their generation."

    MarketWatch then goes to detail some of the things that millennials have ruined, and the list ranges from the 9 to 5 work week to sex to paper napkins. And if you want more, you'll have to read it here.
    KC's View:

    Published on: July 6, 2017

    Re/code reports that Amazon has announced the launch and sale on its site of a "new wine brand produced by King Vintners, a subsidiary of Oregon’s King Estate Winery ... the new wine brand is described as 'the first wine ever developed from conception to release with Amazon Wine'."

    The new line includes a Pinot Gris for $20, a Red Blend for $30 and a Pinot Noir for $40, which the story suggests is "not extravagant," but higher than one might expect of an Amazon private label wine.
    KC's View:

    Published on: July 6, 2017

    Bloomberg reports that "Wal-Mart Stores Inc. has upgraded its beef to certified Angus across the U.S. as the fight for food shoppers’ cash intensifies ... The higher-quality cuts have been available in all of Wal-Mart’s 4,700 U.S. stores since March, but the retailer hasn’t announced or advertised the shift yet."

    Walmart's efforts are keyed to his desire to differentiate itself from new competition from Lidl, expanding competition from Aldi, and re-energized competition likely to emerge from an acquisition of Whole Foods by Amazon. The story also points out that "Wal-Mart also wants to entice shoppers by offering curbside pickup of online grocery orders and improving the quality of fresh foods like produce and meat that are a key draw for customers."
    KC's View:

    Published on: July 6, 2017

    • The Organic Trade Association (OTA) is out with its annual business survey, reporting that organic food sales grew 8.4 percent in 2016 to $43 billion, saying that organic food sales now represents 5.3 percent of all US food sales.

    Organic produce sales were up more than eight percent, to $15.6 billion, and now represents 15 percent of all produce sales. Organic meat and poultry sales were up 17 percent to $991 million, while organic non-food sales grew 8.8 percent to $3.9 billion.

    Gets me all excited for attending and moderating a couple of panels at next week's Organic Produce Summit, which I expect to be just as vibrant as last year's inaugural event.
    KC's View:

    Published on: July 6, 2017

    ...will return.
    KC's View:

    Published on: July 6, 2017

    "It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
    - New York Magazine/Grub Street


    At Samuel J.Associates, we have a response to this assessment:

    Bull.

    We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

    And, we know this: Those businesses require, and are fueled by, great people.

    People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

    And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

    At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

    No bull.

    Click here to find out more.

    KC's View: