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    Published on: May 4, 2018

    by Kevin Coupe

    The Wall Street Journal reports that Diageo, owner of the Ketel One vodka brand, is going to address declining sales in the US by introducing a new vodka that isn’t technically vodka.

    According to the story, at 30% alcohol by volume, “the new drink doesn’t meet the definition of vodka under U.S. and European regulations, which mandate that neutral distilled spirits must be bottled at 40% alcohol by volume and flavored ones at 37.5%. Instead, Diageo will market the new Ketel One as ‘made with vodka’.”

    The Journal writes that “Ketel One and other big vodka brands have been losing market share to Fifth Generation Inc.-owned Tito’s Handmade vodka, which is made from corn and is advertised as gluten-free … In its previous attempts to bolster its vodka brands, Diageo has sponsored music festivals, marketed to the U.S.’s gay and lesbian community and experimented with flavors. In 2016 it began selling Smirnoff infused with real fruit. More recently, the London-based company has cut prices on Ketel One to try to compete with Tito’s.”

    The new item is called Ketel One Botanical. “A 1.5 oz. shot of Ketel One Botanical will have 73 calories, 40% less than in a 5 oz. glass of white wine and 25% less than in a shot of regular Ketel One.” It is, the story says, “the first time Diageo has sold a low-alcohol version of the vodka brand. It comes as many consumers, and especially millennials, are cutting back on alcohol, both by having fewer servings at a time and switching to weaker drinks.”

    A few thoughts here.

    The story reminds me of the time I was in a bar and ordered a margarita - rocks, salt - and the bartender asked if I wanted a regular margarita or a Skinny Girl margarita. I looked at her and said, “Do I look like a person who would drink a Skinny Girl margarita?”

    Of course, it occurred to me later that maybe she thought I looked like the kind of person who should drink a Skinny Girl margarita. So, point taken.

    I also worry that some folks will think that they can drink more of this before getting behind the wheel of a car.

    Finally, I may be wrong about this, but there is something about the Ketel One Botanical that somehow feels inauthentic.

    That’s what Tito’s has going for it - it feels entirely authentic, with a brand identity that has been baked in from the beginning. That’s hard to compete with, and I’m not sure that this new competitor will find it easy to develop any buzz.
    KC's View:

    Published on: May 4, 2018

    Fox News reports that the federal Equal Opportunity Employment Commission (EEOC) has sued Albertsons, charging that one of its Southern California stores “harassed its Hispanic employees and subjected them to a hostile work environment by limiting when they could speak Spanish on the job.” The suit says that store managers “barred Hispanic workers from speaking Spanish around non-Spanish speakers, even during breaks or when dealing with Spanish-speaking customers.”

    Anna Park, an EEOC attorney, said in a statement that “targeting a particular language for censorship is often synonymous with targeting a particular national origin, which is both illegal and highly destructive to workplace morale and productivity.”

    The EEOC says that the Albertsons policy violates the Civil Rights Act of 1964.

    According to Fox News, “Albertsons wouldn't comment on the lawsuit, but said in a statement that it does not require its employees speak English only. ‘Albertsons serves a diverse customer population and encourages employees with foreign language abilities to use those skills to serve its customers,’ the statement said.”
    KC's View:
    Hard to say, because the charges have just been filed, but this sound suspiciously like an isolated case where one or two managers overstepped their authority and imposed rules that they thought sounded good but actually created discord.

    That doesn’t mean the the EEOC suit is wrong. In fact, iut serves as a strong reminder - like the recent events at a Philadelphia Starbucks that resulted in a racial bias controversy - of bow easily a company’s image and reputation can be damaged when one or two people go off the rails, even while trying to do what they think is the right thing. It is a reminder of how important communication, people management and actual leadership are.

    Published on: May 4, 2018

    Reuters reports that Sprouts Farmers Market is ending its relationship with Amazon, which used Prime Now as a delivery mechanism, and will instead expand on its deal with Instacart to provide delivery services.

    The Sprouts-Amazon deal predates Amazon’s acquisition of Whole Foods, which is a direct competitor to Sprouts.
    KC's View:
    I would always argue against partnering with Amazon - there always is a danger when you get into bed with the enemy. But I’m not sure that doing business with Instacart is any safer … Instacart a) wants to be a powerful delivery brand, as opposed to just serving the brands of the companies with which it does business, and b) also is doing business with competitive retailers.

    All of these deals should be seen as stopgap measures while companies figure out their own proprietary approaches, or just identify partners that are interested in serving their brands.

    Published on: May 4, 2018

    USA Today reports that Perdue Farms is challenging a recommendation from the advertising business’s self-regulating National Advertising Division that it “modify or discontinue” commercials it is using for organic chicken; Perdue says it will appeal the decision to the National Advertising Review Board.

    According to the story, “At issue is whether the ads' claims apply to the way Perdue raises all of its chickens or solely those bearing its Harvestland Organic label.” The ad authorities seem to feel that the commercials suggest that all of Perdue’s chickens have features that include  "free range," "organic," "non-GMO," "100 percent vegetarian fed," and "no antibiotics ever,” while in fact it is only Perdue’s Harvestland Organic brand that has these attributes.
    KC's View:
    I’ve watched the commercials, and I think the ad folks are off-base on this one … and keep in mind, I’m a stickler about transparency and accuracy. I think they are funny, cleverly written, and are specifically about a new generation of chickens, using the new generation of company leadership (Jim Perdue’s sons Ryan and Chris appear in the ads along with their dad, and the whole concept is about a changing of the guard).

    There never was any doubt in my mind that the ads were about the Harvestland Organic brand.

    Published on: May 4, 2018

    The New York Times this morning has an interesting economic story about how major tech companies - Facebook, Apple, Netflix and Google, and especially Amazon - are the elephants in the room when it comes to antitrust decisions and enforcement in the US.

    Regulators have to deal with the proposed mergers of AT&T with Time Warner and Sprint with T-Mobile, with all of these companies arguing that they need to integrate their operations in order to compete more effectively with tech companies that already are vertically integrated.

    You can read the entire story here.
    KC's View:
    There are all sorts of landmines here, but the bottom line for me is that antitrust regulators have to adopt a 21st century definition of competition - too much has changed or been disrupted to continue applying 20th century constructs. I argued this constantly when, during the Obama administration, regulators essentially set up a scenario in which, when Albertsons bought Safeway, so many stores were sold off (to Haggen) that it almost had to fail. And I would argue the same thing now.

    Published on: May 4, 2018

    CNBC has a story about Trader Joe’s that, it says, teaches a “valuable lesson” about being customer focused … and it all has to do with the price of bananas, which it sells for 19 cents apiece.

    It goes back to a time when chairman/CEO Dan Bane was in a store, standing in the produce department, where, like most stores, bananas were sold by the pound.

    Bane says, “I was watching [shoppers] in Sun City, [Arizona], which was near a retirement complex. Customer — nice little lady — customer comes up and she looks at all the packages but didn't put one in her cart. And so I asked her, I said, 'Ma'am, if you don't mind me asking, I saw you looking at the bananas but you didn't...put anything in your cart.’

    "And she says to me, 'Sonny, I may not live to that fourth banana,'" Dane recalls.

    "And so we decided the next day we were going to sell individual bananas. And they've been 19 cents ever since," Bane says.

    It is, CNBC says, “a brilliant lesson in business and in leadership: Listen to your customers.”
    KC's View:
    This is Retail 101, and I’m sure that many in the industry are familiar with this story. But it bears repeating and remembering.

    Published on: May 4, 2018

    • The Vancouver Sun reports that Loblaw “is adding more markets to its e-commerce home delivery and store pick-up service — including Shoppers Drug Mart sites — as supermarkets across the country mobilize for the battle with Amazon.”

    According to the story, “Chief executive Galen Weston told analysts on the retailer’s conference call that Loblaw intends to ‘blanket the country’ with e-commerce after seeing positive traction with its early efforts, which include pickup at about 200 grocery stores and commuter train stations and home delivery…”

    CNN reports that Amazon is getting into the private label dog food business with a brand called Wag, described as “a line of kibble available exclusively to Prime members (that) launched this week.”

    According to the story, “Wag adds to Amazon's rapidly expanding private label line, which includes AmazonBasics household products, Wickedly Prime food, Stone & Beam furniture and Presto cleaning products. In the same way Amazon's purchase of Whole Foods forced down prices in supermarkets, Wag will intensify price competition among pet food retailers, especially online…”
    KC's View:

    Published on: May 4, 2018

    CNBC reports that JBS USA, a North Carolina food processor, “has recalled more than 35,000 pounds of ground beef, some sold in Kroger stores, for possible contamination with plastic bits, according to the U.S. Department of Agriculture … The recall comes after a consumer found blue, hard plastic pieces in one of the products, the USDA says.

    “The department says there have been no confirmed reports of adverse reactions due to the consumption of the products, which were produced March 22, 2018.”
    KC's View:

    Published on: May 4, 2018

    …will return.
    KC's View:

    Published on: May 4, 2018

    One of the best things about May is that inevitably it brings a new Spenser novel. This month it is “Old Black Magic,” the latest entry in the series by Ace Atkins, who succeeded Robert B. Parker after he passed away in 2010, and it is yet another engaging work about the iconic Boston private detective.

    It starts as so many Spenser novels do. He’s in his office, drinking coffee, and a case walks in the door. This time, it is an old friend, an art investigator who is dying and wants him to pick up the strands of a long dormant case - the theft two decades earlier of priceless paintings from a Boston art museum. This sends Spenser into two worlds - snooty upper crust Boston society, and various levels of the underworld and black market. As always, Spenser is quick with a quip and insightful in his assessments of these two ends of the spectrum, which is the fun of a these books - the mystery is always less important than the tone and repartee.

    While Parker used to say that his books were “never about who stole the Maltese Falcon,” Atkins’ Spenser novels tend to actually have a mystery that needs to be solved. But what I also like about his books is the fact that the author seems to set himself challenges with each new version. The last book, “Little White Lies,” was more Hawk-centric and much of it took place in the South, with lots of action and violence. Hawk isn’t even in “Old Black Magic,” and it seemed to me that Atkins challenged himself to write a book with a lot less fighting and gunplay, working to sustain the narrative with plot, character and language.

    Parker also used to say that he thought people liked his books because they enjoyed the way they sounded; he believed in the innate musicality of the language. Atkins is as strong a stylist, as he has proven both in the Spenser series and in his own series of Quinn Colson novels, which take place in the Deep South.

    “Old Black Magic” is yet another winner from Ace Atkins. I heartily recommend it.

    I’m sorry I just can’t get totally on board with the whole Marvel universe thing (even though I’ve seen almost all the movies). For me, Avengers: Infiniti War is kind of a mess, though it probably as good a movie as could be made from the source material - it is just that the movie is like 20 pounds of flour in a 10-pound bag. It is all about this intergalactic fascist named Thanos who is trying to accumulate a group of stones that will give him absolute, universal power, and how the Avengers come together to try to stop him.

    The problem with the movie is that absolutely no character in it - other than Thanos - has a narrative arc, which leaves the film existing as a series of individual scenarios, all well-produced and directed, some actually moving, some not really fitting stylistically, but never really gelling to the degree that I would’ve liked. Victories and defeats alike seem temporary and illusory, which takes away some of the dramatic impact, as does the future production schedule of Marvel films.

    In addition, the movie doesn’t really end - there will be a sequel out next summer, and it no doubt will make as many billions as Infiniti War will. I’ll see it, but I won’t be excited about it.

    Last week I told you that I was about to do something that I’d never done before - officiate at a wedding. (I am an ordained minister in the Universal Life Church, which cost me a few minutes on the Internet and a couple of dollars. Say hallelujah.)

    It all went well. Nobody backed out, the serious rain held off until the outdoor ceremony was over, and my attempt at a sermon seemed to work - I’ve just celebrated my 35th wedding anniversary, so I had a few bits of wisdom to share about marriage. (Mostly, it is about having the right spouse who will put up with all your nonsense.)

    In fact, I enjoyed myself so much that I’ve decided to offer this service to MNB readers - if anybody is looking for someone to officiate at their wedding, just let me know. If I can do it I will, and I’ll only charge you for my travel expenses. (If it is someplace fun, I may ask you if I can bring Mrs. Content Guy. But she’s fun to have at a wedding.)

    That’s it for this week. Have a great weekend, and I’ll see you Monday.


    KC's View: