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    Published on: June 8, 2018

    by Kevin Coupe

    Here’s something you probably didn’t know. I didn’t.

    Apparently, there are places in this country where kids who open lemonade stands find themselves in legal jeopardy.

    Like in Texas. You know, the “Go Big or Go Home” and “Don’t Mess With Texas” state. That’s where two girls’ lemonade stand was shut down because they didn’t have a $150 "peddler's permit.”

    And in Maryland, the “Free State,” where a family got hit with a $500 fine when its children opened a lemonade stand without a permit. (Ironically, Maryland has another nickname - the Cockade State. Go figure.)

    Now, it isn’t like there are hundreds of these legal challenges breaking out. But there are enough to get the Kraft Heinz-owned Country Time lemonade company involved, providing what it calls ‘Legal-Ade’ to kids who are hit with such fines.

    “Any child fined for running a lemonade stand without a permit can have his or her parent apply for reimbursement," the company says. "To apply, simply upload the image of your child's permit or fine along with a description of what your lemonade stand means to your child, in his or her own words. The submission will be reviewed by the Legal-Ade team and if it complies with the terms, you will receive the exact amount to cover the permit or fine, up to $300.00.”

    The company has put aside $60,000 for the fund, and will pay out reimbursements as long as there’s money in the fund.

    Big deal? No. (Unless you’re a kid with an illegal lemonade stand.) Smart deal? Absolutely … because it is getting Country Time all sorts of Eye-Opening good publicity, and positioning it with kids and summer.
    KC's View:

    Published on: June 8, 2018

    Bloomberg reports that Walmart has sued Lisa Wadlin, a former senior vice president and top tax executive with the company, “for violating her employment agreement by defecting to online rival Amazon.” Walmart is “seeking to stop Wadlin from taking the Amazon position until May 2020 and bar her from handing over ‘sensitive business information obtained at Walmart’.”

    It isn’t the first time Walmart has made such a move: “In August 1997, Amazon appointed former Walmart information systems vice president Richard Dalzell to the position of chief information officer. Walmart sued alleging the online retailer was targeting its tech workers to pick up secrets about its computer systems. The companies later settled.”

    Wadlin and Amazon have not commented on the suit.
    KC's View:
    Yikes. I’ve argued for a long time that the pitched battle between Walmart and Amazon is only going to get bloodier, with more collateral damage, with every passing day. This is yet another example of intense things are going to get.

    Published on: June 8, 2018

    Interesting piece in the Wall Street Journal suggesting that Starbucks, which has opened more than 2,000 new stores in the US alone during the past three years, may have contributed to “an oversupply of coffee shops” and may have to “put the brakes on new-store openings.”

    The story notes that “the opening of so many new stores is proving distracting to management, analysts say, at a time when it is juggling multiple tasks - from selling the rights to distribute Starbucks’s packaged-coffee business to Nestlé SA to integrating a joint venture in China. In the U.S., the chain is trying to figure out how to revive afternoon sales while still reeling from the controversy over the arrests of two black men at a Philadelphia Starbucks in April.”

    This is all happening at a time when the company’s longtime leader, Howard Schultz, has announced that he will be stepping down at the end of the month, with speculation focusing on a possible political career.

    The story notes that “Schultz was the chain’s strongest advocate of aggressive growth. For years, he talked about the impact declining mall traffic was having on brick-and-mortar retailers. In late 2013, Mr. Schultz declared there was a ‘seismic shift’ in consumer behavior in which online shopping was posing a great threat to malls—and to retailers that depend on mall traffic.

    “His answer: Build even more stores, but not just any stores. High-end cafes, he said, would give people an experience worth leaving their homes for. The company said it would build 20 to 30 giant Roastery stores serving rare and exotic coffees and up to 1,000 smaller stores under the Reserve brand that would do the same.”

    Analysts suggest that Schultz’s departure could clear the way for Starbucks to back off some of those store opening plans.
    KC's View:
    If I remember correctly, this is one of the problems that Starbucks had back in 2008, when it hit a rough patch … too many stores, and it had to retrench a bit. And I’ve never been persuaded that the high-end strategy is the best approach … that much investment in Roastery and Reserve stores had the potential of putting the company at risk in the event of an inevitable economic decline.

    I do think it will be interesting to see how Starbucks adjusts its strategies and tactics in a post-Schultz era.

    Published on: June 8, 2018

    The Washington Post has a story about a study saying that soda promotions often are timed “to the days states distribute food stamp benefits.” The promotions tend to be for sugary drinks and not low-calorie varieties.

    The Post writes that “low-income Americans drink far more soda than their wealthier neighbors, according to the Centers for Disease Control and Prevention. The Supplemental Nutrition Assistance Program, better known as food stamps, has recently come under fire for the amount federal benefits recipients spend on sugary beverages, with some critics calling on the federal government to ban soda purchases. But this study demonstrates those trends are not entirely the fault of low-income shoppers, who are disproportionately bombarded by junk-food ads.”

    According to the story, “This study is the first to tie food advertising to SNAP distribution patterns. Because food-stamp benefits are dispersed in a lump sum each month, and because many recipients spend those funds within a week of receiving them, stores frequently see higher sales and traffic in the days after benefits get reloaded.”
    KC's View:
    There are several potential problems with this study.

    One is that all the data was generated in New York State, and may not be applicable to what happens elsewhere in the country. The data also is several years old, and the American Beverage Association (ABA) maintains that its members have “taken numerous steps to encourage consumers to drink less sugar since then. Soda companies have begun offering more diet drinks and repackaged full-sugar sodas in smaller sizes.” Soft drink companies say they do not take food stamp distribution into account when creating their marketing plans.

    And Heather Garlich at the Food Marketing Institute (FMI) says that its “members have long advocated that there be no distinction made between SNAP customers and traditional customers. To suggest they would single out a segment of shoppers does not align with our philosophy regarding SNAP.”

    I hope that’s true. Because to time ads to take advantage of disadvantaged folks would just be so cynical.

    Published on: June 8, 2018

    Bloomberg reports that Amazon is facing some tension over the timing of its annual Prime Day promotion, which traditionally takes place in early July and creates one of the busiest days of the year at its warehouses.

    According to the story, Prime Day inevitably will overlap with Ramadan, “30 sacred days during which many observant Muslims fast and seek time off. That’s creating tension in Minnesota’s Twin Cities region, where activists say Inc. employs more than 1,000 East African Muslim immigrants at four warehouses.”

    Bloomberg reports that “the conflicting demands of the religious holiday and the corporate one has helped spur something almost unheard of: Concerted workplace activism by employees of Amazon. In a tight labor market, at a sensitive moment for management, employees say the company is making moves to address the culture clash.”

    In a statement, Amazon said it would “respect the religious practices of employees and offer accommodations as needed,” with sources telling Bloomberg that “Amazon has historically made accommodations for workers observing Ramadan, such as providing prayer space and mats and adjusting break times.”
    KC's View:
    These are the things that companies never used to have to worry about, but do today. And should. We live in a more diverse world, and companies have to be sensitive about people’s issues and sensitivities if they are going to be employers of choice.

    Published on: June 8, 2018

    • Save Mart Cos. has announced its launching of a ClickCart program that offers online ordering and both store pickup and delivery, at stores in Modesto and Dublin, California, with plans to expand to other stores later this year.
    KC's View:

    Published on: June 8, 2018

    • The JM Smucker Co. said yesterday that higher costs have hurt its profitability and that it needs to raise retail prices on some foods.

    The Wall Street Journal writes that “Smucker has been trying to reshape its business as well-established brands—like Crisco oil and Pillsbury cake mixes—struggle with sales declines. Like other food makers, Smucker has invested in adapting its brands to consumers’ demand for fresher, more natural food. But the persistent declines in certain areas of the grocery store continue to weigh on Smucker.” And, like many of its brethren, Smucker says that it has faced “higher costs for producing and transporting … products as certain ingredients and freight expenses rise.”

    Supermarkets, however, have been resistant to higher prices because of a need to be price-competitive in an increasingly cutthroat environment.

    • The Chicago Sun Times reports that McDonald’s, looking to cut operating expenses by $500 million by the end of next year, plans a round of layoffs at US regional offices, though it has not yet been specific about how many and when.

    “I recognize that change is difficult, and that eliminating layers within our organization means some employees will ultimately exit our system,” says McDonald’s USA President Chris Kempczinski.

    Ironically, the Sun Times writes, “The news of the layoffs comes after McDonald’s officially opened its corporate headquarters in the West Loop earlier this week.”
    KC's View:

    Published on: June 8, 2018

    • Amazon-owned Whole Foods yesterday announced that it has named Kelly Landrieu to be its Global Coordinator of Local Brands.

    The company said that Landrieu previously developed and managed the “Friends of Whole Foods Market” program, featuring artisan and restaurateur partners operating their own independent venues within the walls of Whole Foods Market stores.
    KC's View:

    Published on: June 8, 2018

    News came this morning about the death of Anthony Bourdain, the chef turned “:Kitchen Confidential” author who then became a television fixture with series that traveled the world and celebrating cultures and cuisines; most recently, he was working on the CNN series, "Parts Unknown,” and he was on location in France working on an episode at the time of his death.

    CNN and other news outlets said that the cause of death was suicide. Bourdain was 61.

    Bourdain’s death comes just days after the suicide of designer Kate Spade at age 55, who was said to have long dealt with severe bouts of depression.
    KC's View:
    CNN notes that “the US Centers for Disease Control and Prevention published a survey Thursday showing suicide rates increased by 25% across the United States over nearly two decades ending in 2016. Twenty-five states experienced a rise in suicides by more than 30%, the government report finds.”

    That’s extraordinary. And terribly sad.

    If you are having thoughts of suicide, call the National Suicide Prevention Lifeline at 1-800-273-8255 (TALK). Or, you can click here.

    Published on: June 8, 2018

    Responding to something I made a quick mention of earlier this week, MNB reader Joe DiVincenzo wrote:

    I share your passion for manual transmission cars and have never owned an automatic.

    I doubt many people will pick up on this, (and at the risk of getting nit-picky), but I think you were referring to what we used to call Bump-Starting or Push-Starting, vs. Jump starting by connecting the battery to the battery in another car.

    I think I push started my old Triumph Spitfire almost as many times as I was able to start it using the starter, and yes, it sure helped to be facing downhill!

    Today I drive a 2001 BMW Z3 5 speed and a 2017 BMW 340i 6 speed.  Thankfully these cars always fire right up first try, and they sure are a blast to drive!  I also have a 1989 Harley that gets the occasional Push-start. 

    Thanks for the memories, and sure glad Bump Starting seems to be a thing of the past (at least in the Automotive world).

    I am in awe.

    Regarding yesterday’s FaceTime video about middle age, MNB reader Alex Drew wrote:

    Funny that you had this on today.  I just saw the article in the Harvard Business Report, and it really hit me.  I actually posted it to my linked in with the comment, “We really are more and more segmented into our age categories than ever. We now even use them to blame societal problems on each other. Think about how often the generational classifications and stigmas are used in analysis, marketing, reporting, etc... Just last month there was a widespread article on how Millennials blamed Boomers for the issues in the US! It is causing barriers that could cause unknown longer term effects within the US culture, economy, society…”

    I really feel that the silos that we are putting on age is becoming more and more of issue than most people want to recognize.  Understand that with age comes transitions and changes in who we are (or that can be called experience/wisdom), but it is different for everyone at different times.  Like most everything else this is not a black and white siloed topic, and if treated that way by businesses can lead to missing out on sales.  A person at 60 can have just as much positive and negative impact on social media and backlash to a company as a person at 20.

    MNB reader Michael Seelig had a slightly different take:

    I have always thought middle aged was simple… Die and divide by two. Until then, live life to the fullest.

    Following up on our piece about Major League Baseball joining with a private equity group to buy Rawlings, MNB reader Chris Kohls wrote:

    Good move by MLB in today's unpredictable PE mkt.

    MLB is proactively controlling a long time supplier of baseball and equipment, Rawlings, who's future may be unclear due to the fact it is owned by a PE firm.  We've seen Toys R Us turn down deals to sell portions to others like Target because they thought liquidation would generate a better return.   Smart play by MLB for a mere $395M to control a big segment of the game. It also allows them to change the ball to accommodate for concerns of too many home runs and other topics in the future.

    I’ve worked for 3 PE companies and it is nothing less than chaos.  Too many people making decisions that are too removed from the business and implementing "spreadsheet decisions" which dilute the core business.   At least 2 of the 3 PEs did or are experiencing major financial losses and underperforming in production, which means customers are not receiving their products; much less ever be able to partner to drive innovation. 

    Controlling Rawlings from a PE is a great idea since the MLB depends on their products.

    And, a note about the passing of Red Schoendienst's passing from one MNB reader:

    Red Schoendienst's passing leaves Tom Lasorda as the oldest living member in the Hall of Fame and Whitey Ford as the oldest living member inducted as a player.

    Should I be depressed that I can vividly remember watching Whitey Ford pitch?
    KC's View:

    Published on: June 8, 2018

    The Washington Capitals last night won the national Hockey League’s Stanley Cup for the first time in the franchise’s history, defeating the Vegas Golden Knights 4-3 to win the best-of-seven series four games to one. It is the first major sports title to be won by a Washington, DC, team since the Washington Redskins won the Super Bowl 26 years ago.

    As Tony Kornheiser probably would say, the Capitals are “choking dogs” no longer.
    KC's View:

    Published on: June 8, 2018

    “Brockmire,” on IFC, continues to be a laugh-out loud comedy series that in its second season is deepening just a bit in terms of how it portrays its protagonist, Jim Brockmire, a broken down, alcoholic minor league baseball announcer trying desperately to get back to the big leagues.

    Hank Azaria is amazing as Brockmire - funny as hell even as the character gives in to almost all his self-destructive impulses. I wrote here about the first season that "Brockmire" is alternately depraved, profane and subversive, but it also is surprisingly literate and charming - and I have no reason to adjust that assessment. My only problem with the new season is that Amanda Peet, raunchily charming in season one, has only been in the second season intermittently, and the series misses her.

    However, the silver lining is that Tyrel Jackson Williams has more to do as Charles, the teenager who hates baseball but loves technology, and becomes Brockmire’s enabler in all sorts of unexpected ways.

    I love “Brockmire” - it is profane, irreverent, dark, and very, very funny.

    I finally caught up with a movie called Love, Simon the other night, and found it to be utterly charming - a coming-of-age and coming-out romantic comedy about a gay teenager living in the suburbs of Atlanta. The movies doesn’t really make any pretense at being realistic, but rather opts for a Ferris Bueller-style of irony. The cast is terrific, especially Nick Robinson in the title role, and they totally sell it.

    We watched Love, Simon as a family the other night, and to be honest, it was with varying degrees of appreciation. But we all were in tears at one point late in the movie, during one scene with Simon and his dad (Josh Duhamel) … which I think means that we were a lot more invested in Simon’s life than we even thought.

    Love, Simon at its core is a movie about how the assumptions and preconceptions that we bring to our lives often are wrong. It is charming, and, ultimately, affecting.

    Longtime MNB readers know that mysteries - especially the American hard-boiled variety - are my favorite literary genre. I read a lot of stuff - a lot of nonfiction lately - but give me a terrific mystery any day. I wouldn’t even call it a guilty pleasure, because I don’t feel guilty about it at all. I love reading and often rereading the work of people like Michael Connelly, Ace Atkins, Reed Farrel Coleman, Bob Morris and, of course, Elmore Leonard and Robert B. Parker … at their best, they can be as piercing and evocative as any writer out there.

    Which is why it is great fun to come upon a new writer working in the category - in this case, Thomas Kies, whose new novel, “Darkness Lane,” has just been published by Poison Pen Press.

    Kies’ heroine is Geneva Chase, an alcoholic newspaper reporter working in Fairfield County, Connecticut, and dealing with the precipitous decline of print journalism, though not well. (Maybe this is part of the reason I liked it so much - the story takes place in my backyard, for all practical purposes, and the newspaper business is one that I’m passionate about.) When a local teenaged girl goes missing, Geneva finds herself in a unique position to cover the story - her adopted daughter was the missing girl’s best friend, and she knows most of the players personally as well as professionally. But that gives her blind spots as well as access, and she seems equally capable of making bad life choices while making good investigatory moves.

    “Darkness Lane,” the second in a promised series, is solid, entertaining work, and I look forward to more from Kies.

    That’s it for this week.

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

    KC's View: