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    Published on: March 22, 2018


    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.

    I was reading an interesting column in the San Diego Union-Tribune, by Neil Senturia, the other day, that carried the headline:

    “Why Entrepreneurs Should Read The Obituaries.”

    The argument is that “reading about people’s lives, mostly semi-famous lives, which is what newspapers cover both nationally and locally, will inform your own life in various and significantly meaningful ways. The lives chosen to be written about are picked because those lives have helped shape the tale of their times. They are iconic in some way and when they were born and when they died - the arc of their personal history – adds to the fabric of our society during that time.”

    Now, the sad truth is that newspapers don’t run obituaries the way they used to. I find this personally upsetting because I got my start in newspapers writing obits. Now, for most people, if you want an obit in the paper, you have to pay for it. Which is sort of dumb, because obits actually are something that people get the newspaper for.

    Senturia’s larger point is that coverage of the tech sector amounts to what he calls “bloviated crap that comes to us every day about the successes and the fundings and the small actions of the current crop of actors on the stage, but the play never ends, and new replacement actors arrive. It is only in the obits that you have the chance to see both the compression of a life, as well as the mountains that the person scaled. You only get a snapshot, but it is indelible. It forces you to pause and consider. It does not ask you to measure yourself against the person, but rather to find a place to stand for a moment and contemplate. It gives you perspective.”

    I think he makes a very good point - not just to the tech sector and not just to entrepreneurs. I read them as well - and not just, to quote the old joke, to make sure I’m not in there. I learn a lot from these stories - without being eulogies, they manage to convey the facts of a person’s life and, if well written, the sense of a person’s life as well. They are stories, and often affecting ones.

    Perspective is good - not only because it allows you to consider how much or how little you’ve actually accomplished, but also because it reminds you that there is no time to waste. Lives have expiration dates. We have to use, not waste, our time.

    I do want to tell you a story from my obit writing days. It was 1978, I had just started at my first newspaper job, and was working the night desk. I’d written an obit based on information given to me by the funeral home about a person who had passed away, and was pretty proud of it. In the morning, my editor, Bill Chanin, came into the office, grabbed the just published paper and started to peruse it. Suddenly, I heard him yell at the top of his lungs, “Coupe!”

    Now, I’d just started, but I knew this wasn’t good.

    I went to his office and he tossed the paper at me. It was turned to the page with the obit I’d written. “Read the first graf to me,” he said.

    I did. It went something like, “John Smith of Nanuet, New York, died yesterday of natural causes. He was 62.”

    What did I do wrong, I asked him.

    He looked at me, very seriously, and said something I’ll never forget: “Nobody dies of ‘natural’ causes at age 62. They die of something, and I expect you to find out what they died of ands then write it. I’ll only accept ‘natural causes’ if they’re older than 80.”

    It was another good lesson from the obits. Never just accept. Always question. Get beyond the obvious.

    It’s called perspective.

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

    KC's View:

    Published on: March 22, 2018

    by Kevin Coupe

    Got a note this morning from Amazon saying that it is grateful for having been named number one in the Harris Poll’s annual corporate reputation survey. It is the third straight year that Amazon has been n umber one, and it has been in the top 10 for the past decade.

    "On behalf of Amazonians everywhere, I extend a huge thank you to customers. We wake up each day thinking about how to delight customers and invent on their behalf - and it's energizing to see the results of these surveys," said Jeff Bezos, Amazon founder and CEO. "And big kudos to the Amazonians all around the world who are doing this creative and missionary work every day for customers - thank you and congrats!”

    Which is sweet.,

    And to thank its customers, Amazon says, it is “taking 20% or more off select Alexa-enabled devices today.”

    Which also is sweet.

    Things have changed, though.

    I’m a early Amazon adopter. As I’ve mentioned here before, I made my first Amazon purchase in April 1997 - a paperback entitled, “Now I Know Why Tigers Eat Their Young: How to Survive Your Teenagers-With Wisdom and a Little Humor.” (You know what was on my mind…)

    But as an early adopter, I remember one Christmas getting in the mail an Amazon coffee mug, with a note from the company thanking me for being a good customer.

    I don’t know where the mug is, but I remember getting it … and thinking of its an an Eye-Opening demonstration of gratitude from a retailer unlike anything I’d seen before.

    Now, they just offer a discount. Not a small thing, but it is different.

    On the other hand, I’ve seen reports that Amazon currently has 310 million active customers. So maybe free coffee mugs for everyone is a little out of the question…
    KC's View:

    Published on: March 22, 2018

    Bloomberg reports that Marc Lore, who is running all of Walmart’s US e-commerce operations, said this week at the Shoptalk conference in Las Vegas that the company “remains in buying mode as it looks to differentiate its online inventory to compete with Amazon … Future acquisitions will likely be in the $50 million to $300 million range, and could go higher.”

    “We’re looking and talking to more companies than we ever had,” Lore said. “We’re definitely in an acquisition mode.”

    In addition to buying Jet, which brought its founder Lore to Walmart, the retailer also has acquired such primarily online brands as Bonobos and Moosejaw, which give it a marketing diversity by appealing to a customer base that goes beyond its traditional core.
    KC's View:
    Lore also said that he’s in for the duration, committing to remaining with Walmart for at least five years. And, he suggested that while Walmart/Jet e-commerce numbers were down in the last quarter, this is all part of the process … that patience, persistence and commitment are required to make the segment work in a sustainable way.

    All of which I agree with.

    Published on: March 22, 2018

    The Wall Street Journal reports that “more than a dozen executives and senior managers have left since Amazon acquired Foods last year, according to former employees and recruiters steering them to new jobs. People who have left include leaders of the bakery, produce, sustainability and local-foods divisions.

    “Some veterans have left even though higher-ups asked them to stay. Others say they were pushed out after the deal was announced but before it closed, as Whole Foods sought to tighten command.”

    While some who have remained say that the two businesses share a strong customer focus, there also is the suggestion that “the distinctive approach that made Whole Foods a natural and organic powerhouse won’t endure under Amazon’s ownership.

    The story goes on to say that “some cited the two organizations’ fundamental differences on issues such as promoting and grooming talent, and whether to focus more on needs of customers or employees. They have noted pressure to put on a good face for Amazon executives, including among the rank and file during town hall meetings.

    “Some suppliers said new hires at Whole Foods have been slow to master the chain’s techniques for sourcing and marketing healthful foods. Many executives who have left, meanwhile, are consulting for other natural-food companies and interviewing with other retailers, taking that knowledge to competitors.”
    KC's View:
    This is, I think, a delicate balance. Of course there will be defections, but Amazon/Whole Foods has to hope that there will mostly be by execs who have a “we do it that way because we’ve always done it that way” mindset. It isn’t an easy task to remake Whole Foods’ operations in such a way that they make the company both more effective and efficient while retaining and even enhancing core values.

    Published on: March 22, 2018

    Nielsen has a report about how meal kits in just a few years have “carved out a unique - and profitable - niche in the U.S. grocery landscape. And what’s more, they’re no longer the exclusive domain of innovative start-ups aiming to deliver fresh, time-saving options to time-strapped consumers’ doorsteps.”

    Some relevant numbers:

    • “In the year ended 2017, in-store meal kits generated $154.6 million in sales, posting growth of more than 26% year-over-year. For context, total brick-and-mortar sales for center store edibles (grocery, dairy, frozen foods) dipped 0.1% last year to $374 billion.”

    • “Overall, 9% of Americans say they’ve purchased a meal kit in the last six months - that’s 10.5 million households. What’s more, 25% of consumers say they would consider trying a meal kit in the next six months - that’s more than 30 million households.”

    • “Of the 9% of Americans who have tried a meal kit, 6% have purchased exclusively online. And as a result, online meal kit companies are seeing tremendous growth.”

    A Nielsen analysis of consumer behavior suggests that “almost 60% say value for the money is extremely important, and almost half (49%) say low-cost items are important. In terms of what they experience across the meal kit landscape, 56% of consumers disagree that meal kit services are affordable for everyone. For retailers and pure-play meal kit providers alike, this insight suggests that they need to clearly articulate the value their offerings provide when pitted against traditional options.

    “As retailers look at the potential in the meal kit space, they will need to understand the attributes that customers look for and develop offerings that clearly highlight the value they offer when compared against more traditional offerings.”
    KC's View:
    I had a chance this week to moderate a panel of millennials at Western Michigan University’s annual Food Marketing Conference, and one of the subjects that came up was meal kits. (For the record, these were all millennials who are employed by retailers or CPGG companies, are motivated and successful, and who in most cases were single and time-constrained. I would’ve hired any of them.)

    In the discussion of meal kits, these millennials generally said that they saw them in a positive light, though they had a problem with the subscription nature of many programs - it simply does not give them the kind of flexibility, in terms of timing and menu selections, that they need and want. I don’t think this is unique to millennials, and that greater growth can be achieved by companies that figure out how to shape their meal kits in this direction.

    Published on: March 22, 2018

    CNBC yesterday said that “it has achieved 100 percent pay equity for women and men, and employees of all races in the U.S. The company said it is now looking to achieve pay equity for employees globally.”

    Lucy Helm, Starbucks executive vice president and chief partner officer, said at the company’s annual meeting that “the gender pay gap is real and Starbucks is committed to not only talking about it but addressing … We believe it is important, as company of our scale, to help bring more attention to this critical issue.”

    CNBC says that “in 2016, U.S. women working full time were typically paid 80 percent of what men were paid, according to Census Bureau estimates. According to Helm, the gap is even worse in the retail sector, with women typically making 70 cents on the dollar compared with men.”

    In other Starbucks news, MarketWatch reports that the company’s COO, Roz Brewer, told the annual meeting that it plans to ride its mobile ordering app to stronger US sales.

    The app, she said, “helps Starbucks target products to customers more effectively. That could be an important tool as the chain also adds more lunch items and cold drinks to its menu to draw in more customers after the morning coffee rush.”

    In addition, the story says, “In the US, Starbucks wants to require customers who use its in-store wi-fi to enter their email address in the first store where they get connected. Thereafter the company's software would remember their device and connect automatically. That would give Starbucks new email addresses for non-rewards members that Starbucks could target with promotions.”
    KC's View:
    I’m reasonably sure that it won’t take long for someone to point out that there are places in the US where Starbucks has missed the mark on this. It won’t be for lack of trying or lack of intent, but at a company the size of Starbucks there always are accidental gaps.

    That said, I applaud them for making this a priority and shining a spotlight on the issue.

    Published on: March 22, 2018

    USA Todayreports that Isaac Larian - CEO of Bratz doll-maker MGA Entertainment - has put together a group of investors that has “pledged a total of $200 million in financing and hope to raise four times that amount in crowdfunding in order to bid for up to 400 of the Toys R Us stores being liquidated in bankruptcy.

    “The unsolicited bid still faces many hurdles, including finding other deep-pocked investors and getting a bankruptcy judge to agree to it. But this is the first public plan to keep the cherished toy brand in existence in the United States … Larian says he and the other investors, which he declined to name, believe salvaging part of the Toys R Us business will be good for the toy industry, customers and workers. They’re interested in more than half the 735 U.S. stores Toys R Us plans to liquidate, and want to be able to use the valuable brand name.”

    The story notes that many toy manufacturers believe that the collapse of Toys R Us is potentially enormously harmful to them, in part because it eliminates a sizable part of the toy pipeline and in part because it centralizes too much buying power in remaining competitors such as Amazon and Walmart.
    KC's View:
    Keeping some of the stores open is one thing. Making them vibrant and relevant and profitable is something else.

    On the other hand, if they want to create something new - a retailer that has the Toys R Us name but actually serves as a vehicle through which manufacturers can pursue z consumer-direct strategy, disintermediating traditional retailers … well, that sounds sort of interesting.,

    Published on: March 22, 2018

    The New Yorker has a fascinating story - of the kind that only The New Yorker would publish - about jousting over the relative merits of the iconic cookbook, “Joy of Cooking.”

    “Joy of Cooking,” the story says “has been subject to very little criticism in its eighty-seven-year life. Smart, bossy, funny, a little bit cornball, the book has been a staple in countless American kitchens, a go-to gift for newlyweds and recent grads, its adherents spreading the gospel to their own children … About the worst that’s been said of the book is that it’s more useful as a general-reference volume than as a recipe go-to, which - given the cooking world’s overabundance of recipes and its shortage of genuinely useful reference books - is actually sort of a compliment.

    “So it came as a shock, in 2009, when the prestigious scholarly journal Annals of Internal Medicine published a study under the pointed headline ‘The Joy of Cooking Too Much’.”

    That study, authored by Brian Wansink, who runs Cornell University’s Food and Brand Lab, argued that the cookbook was a contributor to the nation’s obesity crisis, and that “classic recipes need to be downsized to counteract growing waistlines.”

    While there was some pushback on those conclusions, now there appears to be some payback, since Wansink’s research standards have been called into question, with some evidence suggesting that “Wansink regularly urged his staff … to manipulate sets of data in order to find patterns,” rather than following the data where it leads.

    And so, the debate continues, and you can read about it here.
    KC's View:

    Published on: March 22, 2018

    TechCrunch reports that Amazon has added some functionality to its Amazon Key application, which allows users to control who goes in and out of their homes, including Amazon delivery personnel. In addition to being able to open the door remotely and use a Cloud Cam to monitor what’s going on inside the home, the app now also offers fingerprint ID authentication technology.

    The fingerprint technology currently is available for the Android version of the app, and will shortly be made available for iOS.
    KC's View:

    Published on: March 22, 2018

    • The Houston Chronicle reports that H-E-B’s upscale grocery division, Central Market, plans to add at least two more stores to the five that already operate in the Dallas market, with one of them scheduled to open this summer.

    Houston division president Stephen Butt tells the paper, “At this stage, Central Market’s growth plans are in the Dallas-Fort Worth metroplex. We add a Central Market store when we feel we have the right real estate and the right demographic and amount of customers to support the store. We only want to put our stores where we’re confident we’ll be successful.”

    The story says that H-E-B’s focus on Dallas for Central Market expansion has much to do with the fact that there is tougher competition there than in Houston, where it enjoys a dominant market position; the company is opening more H-E-B stores there, as well as rolling out a curbside pickup service, to help it cement its competitive position.
    KC's View:

    Published on: March 22, 2018

    Responding to our story about Target;’s expanding loyalty marketing efforts, one MNB reader wrote:

    I also have become less than thrilled with Target stores in the past couple of years.  I was a frequent, Red Card holder and did much of my grocery, HBA and household shopping there.  But constant out of stocks has led me to other retailers, and Amazon on line.   Their prices were ok, but after too many trips that ended with me leaving the stores empty handed, there are just better alternatives.  Ominous sign, I would think.

    Oh, and nobody has contacted me to ask why I haven't used my card in the last 8 months or so…


    From another reader:

    I think that Target is simply moving slow with loyalty, store format and getting the sexiness back that they had prior to 2005. Last year they hired a Kroger blue blood to run the grocery business, don’t be surprised if they come out strong with a new store format and strong loyalty program in 2018. He has the creativity and drive, if allowed to execute.





    We had a reader the other day who argued, in the context of stories about retailers becoming more restrictive about who they sell guns to, that “it is not the responsibility of retail to make federal law … When the federal government move to create the 21 age to purchase all firearms and ammunition then retail will be obligated to follow the laws of the nation.”

    Another MNB reader rejected that notion:

    I wholeheartedly disagree with this assessment. Is CVS trying to change the federal law by not selling tobacco or Chick fil A trying to change federal law by closing on Sundays?

    If CVS helps to save a few lives of people dying from cancer or Dick’s/ Walmart by denying an 18 year old the ability to buy a gun, it seems like a win/win.


    I agree.

    Edward W. Stack, the CEO of Dick’s Sporting Goods, which was the first company to tighten its rules about who could buy guns, has a Washington Post op-ed piece today in which he writes about corporate and personal responsibility.

    Some excerpts:

    As a gun owner, I support the Second Amendment and understand why, for many, the right to bear arms is as American as baseball and apple pie. But I also agree with what Supreme Court Justice Antonin Scalia wrote in his majority opinion in 2008's landmark Heller case: "Like most rights, the right secured by the Second Amendment is not unlimited." It is "not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose.”

    It is clear we have a problem with the gun laws in this country. They are not squarely focused on keeping all of us safe - especially our children.


    There continue to be mass shootings - at our schools, churches and entertainment venues. Following each of these senseless, tragic events there's a great deal of idle, fruitless talk in the halls of Congress, and then the conversation quickly comes to an end. It's our great hope and belief that this time will be different. It has to be different.

    Maybe it's because the survivors of the Parkland, Fla., massacre - and the thousands of students who made their feelings known for 17 minutes last week - are standing up and shouting "enough is enough" and "never again." They are demanding that our elected officials come together to find solutions. These brave young men and women are not going away.


    We understand this is a complex issue and Congress has a number of constituencies with broad agendas. But we hope Congress will take notice of not only what students are saying but also what the private sector is telling it. Two of the three largest firearms retailers in the country have publicly said we are implementing our own policies for the sale of firearms.

    This issue transcends our company's bottom line. We suspected that speaking out would have a negative impact on our business. But this was about our values and standing up for what we think is right.

    After we announced our new firearms policy, we were gratified that Walmart, Kroger, L.L. Bean and REI showed courage and leadership by announcing their own new policies. We hope others in the private and public sectors join us in this effort.

    A group of us in corporate America have taken a stand, made hard choices and enacted reforms on our own because we firmly believe it's the right thing to do for our kids and for our country.


    It seems to be that this reflects both a respect for the Constitution and a desire to do the right thing. I respect that.

    Folks can disagree with the position, but I wish they’d at least respect the motivation.




    Regarding the gender inequality survey published the other day by the Network of Executive Women (NEW), one MNB reader wrote:

    Gender equality has been a hot topic for decades in the CPG industry (all industries). Has it dawned on anyone that companies especially the fortune 500 are actually committed to gender equality and are hiring female leadership. But in the rush to support this worthwhile effort, like with any hire female or male bad hire or promotion decisions are made and turnover occurs? The bottom line is, who can run the business well is #1, who is best qualified. The real question here is are the fortune 500 companies picking and training high potential female and male employees to succeed?
     
    Change involves a process, it’s not an event. We can’t go from fossil fuel to electric, wind and solar overnight, it’s a process that no one has the patience or vision to understand.





    We had a story the other day about how Whole Foods is telling its suppliers that buying into a new buying program was a way for them to grow, which prompted MNB reader Ken Wagar to write:

    OMG….How many times have I heard this said over the past 50 years in the food industry! It brings to mind so many programs over the years designed to pad retailer and wholesaler bottom line profits by squeezing the vendor for participation dollars. Is this different? Maybe, but only if the “support” reflects actual efficiency for the vendor, increases the vendor’s profitable sales, and applies to only that share of product sales that actually pass the discount through to the ultimate customer.

    I’m a huge fan of Amazon but this smacks of going backwards rather than forward. Are the small vendors they talk about going to be able to bear the weight of this program or be closed out of it for lack of additional “discretionary” funds.





    And finally …

    Yesterday, MNB took note of a New York Times report that as part of its renegotiation of the North American Free Trade Agreement (NAFTA), the Trump administration is trying “to limit the ability of the pact’s three members - Canada, Mexico and the US - “to warn consumers about the dangers of junk food.”

    A draft proposal put forward by the Office of the US Trade Representative, the Times wrote, “is pushing to limit the ability of any … member to require consumer warnings on the front of sugary drinks and fatty packaged foods.” Specifically, the US wants to “prevent any warning symbol, shape or color that ‘inappropriately denotes that a hazard exists from consumption of the food or nonalcoholic beverages’.” The The Trump administration’s position, the story says, “reflects the desires of a broad coalition of soft-drink and packaged-foods manufacturers in the United States.” And, the story said, it “reflects an intensifying battle among trade officials, the food industry and governments across the hemisphere. “

    I commented:

    And, in a related story, the US government reportedly is considering no longer requiring the placement of health warnings on tobacco products, a position being urged with some effectiveness by major tobacco companies.

    Just kidding. (If April 1 had been a weekday this year, that might’ve been one of my April Fools jokes.)

    That said, the Times story does note that “some experts have likened the fight over food labeling to that over tobacco — and the fierce if ultimately unsuccessful opposition and lobbying that industry waged to prevent the imposition of health warnings on packaging.”

    Obesity and resultant health problems continue to be enormous issues. I’m not sure that putting restrictions on what other countries can do to deal with them in potentially effective ways is exactly what we ought to be doing, even if we don’t want to do it ourselves.


    To which one MNB reader responded:

    Kevin, you have to be a complete idiot to think that a warning on a candy bar would stop obesity. I also think you would be quite cozy to live your life completely controlled by the government.

    What you and most far left individuals want is to tell people what to do and when to do it. I just don't understand why people want to live like this.


    Well, I don’t think I’m a complete idiot. I also don’t think I’m a “far left” individual who would be happy to have his life “completely controlled by the government.” But you are entitled to your opinion.

    I don’t want to tell people what to do. I do, however, think that sometimes it makes sense to tell corporations what to do, especially when it comes to being transparent about what is in the products they sell.

    Information is not regulation. Information is just information. People still get to make their decisions, except that maybe those decisions are a little better informed. At least some of the companies that fight against this kind of transparency, I think, may have something to hide.
    KC's View: