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    Published on: July 26, 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. This is FaceTime with the Content Guy. I’m Kevin Coupe.

    As I record this, I am in Portland, Oregon, standing on the Hawthorne Bridge overlooking Tom McCall Park, site of the annual Portland Waterfront Blues Festival. I love this event, and have attended it every year since I’ve been coming here to teach a summer class at Portland State university (PSU). The city clearly loves it as well - the festival celebrated its 31st year in 2018, and you can see and hear the crowds behind me.

    This year, though, there was something different. I thought the lineup was a little weaker than in past years, but there also was something else different - for the first time in a long time, the Oregon Food Bank was not a sponsor and a recipient of the profits. And at least in part because the food bank was not involved, Safeway also was not a sponsor.

    Now, there was another food-related charity that stepped in, but that’s actually not the point I want to make.

    As it has been explained to me, when the Oregon Food Bank started working with the festival, it was able to bring home hundreds of thousands of dollars that could be used in their mission. Part of the reason for that was the willingness of some great artists to work for less than their usual fees because they generated a lot of CD sales during the festival. But as time passed, as we all know, CD sales have plummeted, which meant that artists had to raise their fees. Which meant that the Oregon Food Bank made less money, and even started to go into the red … which is something a charity cannot do.

    This is yet another example of how changing technology and changing realities can have an unexpected impact, even, in this case, having an effect on feeding the hungry.

    It is collateral damage, to be sure. The changes themselves are neither good nor bad, but certainly the results are not a good thing.

    It is the kind of change that every business has to think about … focusing not just on the technology, but also the impact, which sometimes can hit you in unexpected ways and unexpected places.

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


    KC's View:

    Published on: July 26, 2018

    Chef’d, the meal kit company that said the other day that it was ceasing operations because of expense and financing issues, has been acquired by True Food Innovations, which describes itself as developing, commercializing, and selling food products for domestic and international channels.

    Terms of the deal were not disclosed.

    The announcement says that “True Food Innovations acquired all Chef'd assets, including plant, property, equipment, brand and intangible assets for an undisclosed amount, and plans to consolidate these assets into the existing businesses of True Food Innovations.”

    Robert T. Jones, president of True Food Innovations, says that his company has “already developed and are in market with long shelf-life retail meal kits under the brand of True Chef, so we seized the opportunity to acquire the assets and brand of Chef'd as the transaction will be accretive to our business from day one. We believe the retail channel will continue to grow and we will concentrate our efforts on that portion of the Chef'd business.”

    The Los Angeles Times coverage of the deal notes that “Chef’d, which was backed by big food companies including Campbell Soup Co., sold meal kits through grocery stores and also offered online ordering and home delivery, similar to better-known meal kit companies Blue Apron and Hello Fresh.”

    The expectation is that True Food will focus on the supermarket distribution side of the business, not the direct-to-consumer delivery side.

    The Times writes that “Chef’d and other companies have struggled to be profitable amid the costs and complications of shipping fresh meat and produce directly to customers. That has led some meal kit companies to try to sell their goods through retail locations. Blue Apron meal kits went on sale at some Costco locations in May.”
    KC's View:
    The notion that meal kits may only be a strong performer when taken out of the pure-play e-commerce world seems to be gaining currency. The question will be if retailers decide to partner/acquire existing meal kit companies, or develop their own.

    Published on: July 26, 2018

    Bloomberg reports that Walmart is teaming up with autonomous vehicle company Waymo to trial a program that will “shuttle passengers in self-driving minivans to their retail stores.”

    According to the story, “ It’s starting small, operating only in a suburban region of Phoenix, Arizona — where Waymo’s already running tests — and with only select passengers invited into the free program. Yet it’s a first hint of how Waymo plans to commercialize the nascent technology beyond ride-hailing.”

    Waymo, a spinoff from Google, also is working with an area mall operators and a hotel company to test out its service.

    The announcement of the trials indicate that it is only a matter of time before the service gets rolled out elsewhere in the country.

    The Bloomberg story says that “the Waymo cars will only be doled out to Phoenix residents under its ‘early rider’ program, an experiment to warm consumers up to the novelty of self-driving cars. Waymo, which recently announced it had clocked 8 million autonomous miles, is widely considered the technical front-runner in the market. The company said it has more than 400 people participating in the program for now, and plans to begin a paid self-driving service in Phoenix by the end of 2018.”
    KC's View:
    I have to admit that I’m not the biggest fan of the self-driving car concept, but I do think that one way to make it acceptable is to expose people to it in small bites. It also says a lot, I think, about how willing Walmart is to try new things and establish itself as an innovator. This may not work, but it remains a statement with implications.

    Published on: July 26, 2018

    The Atlanta Journal-Constitution reports that the same week as it announced that it is going to test the meal kit business, Chick-fil-A announced the opening of its first store outside the US - in Toronto, Canada.

    “We’ve wanted to come to Toronto for a very long time because we believe Toronto is one of the best and most vibrant cities in North America,” explains Chick-fil-A president/COO Tim Tassopoulos.

    The goal is to have the first franchised location open during the first half of 2019, and the goal is to open another 15 within the next five years.

    The first Toronto location will open in the first half of 2019. The company plans to open 15 additional restaurants to the greater Toronto area over the next five years.

    The company already has launched a website to promote its Canadian incursion, including an explanation for why it is closed on Sundays.
    KC's View:
    Relationships between the US and Canada may be frayed these days, but opening Chick-fil-A restaurants is one way to salve the open wounds of diplomatic missteps.

    Published on: July 26, 2018

    Interesting research from Nielsen confirming that “consumers’ desire for health, wellness and convenience are driving growth across the store,” and in fact driving the development of departments and categories as shoppers’ interests and desires become more specific and sophisticated.

    An excerpt:

    “For example, frozen meats were the original source of convenience in grocery stores. Over time, prepared foods stepped up and have developed into an increasingly prominent and important contributor in terms of on-the-go convenience. As prepared areas gained traction,  rotisserie chickens and pizza flooded deli counters. But over time, once again, consumers sought out greater variety as palettes blended.

    “Today, health and wellness are center stage, and competitive offerings abound both in and outside of the market’s retail walls.

    “To meet demand, retailers began offering sushi stations and rolls, which were met with rapid success. Today, poke bowls - even stations - along with unique combination plates, are providing complete meal solutions to complement and/or compete with the rise of meal kits. They’re also fueling sales growth. While traditional sushi sales have slowed from the 12% it averaged each of the past three years, poke bowls and poke stations, often complemented by Negiri or other sides, posted dollar sales growth of 9% for the 52 weeks ended June 30, 2018.”
    KC's View:
    I just hope retailers on the east coast, especially in Connecticut, pay attention to this study and decide to start installing poke bars in their stores. I love them when I’m in Portland during the summer, but can’t get decent poke when I’m back home the rest of the year.

    Because studies like this one are all about me. Right?

    Published on: July 26, 2018

    CNBC reports that by one measurement - stock price - Dunkin’ Brands appears to be in the catbird seat in its battle with Starbucks.

    According to the story, “Over the past two years, Dunkin’ shares have rocketed around 50 percent higher, while Starbucks has fallen more than 10 percent.”

    While analysts concede that this won’t last forever and that Dunkin’s stock price may be over-indexing its actual performance, there seems to be a general feeling at the moment that Dunkin’ may have the wind at its back. Starbucks, on the other hand, is seen by analysts as a maturing company that probably has too many stores, is having to close underperforming units, and has had to deal with executive departures, including that of chairman Howard Schultz.
    KC's View:
    Stock price, of course, is only one way to measure success. While I’m not sure that I completely buy the idea that Dunkin’ Donuts is going to supplant Starbucks in the public consciousness, I do think it is fair to argue that Starbucks is a) maturing, and b) is in need of some sort of internal disruption that reinforces its relevance.

    Published on: July 26, 2018

    Arkansas Online reports that Walmart plans to donate $2 million to the Congressional Black Caucus Foundation and the Congressional Hispanic Caucus Institute, each of which will receive $1 million over the next three years that will go “toward paid congressional internships, housing, monthly stipends, professional development and leadership training.”

    The story notes that in making the announcement, Walmart “cited statistics from the Pew Research Center that show that while non-white Americans comprise approximately 36 percent of the population, less than 20 percent of congressional representatives are people of color.”


    USA Today reports that Walmart, sensing opportunity now that Toys R Us is defunct, “is pushing more aggressively into the space, making it simpler for millennial parents to outfit their baby's nursery with items ranging from changing tables to bassinets. The retailer will launch a new online experience Thursday that enables parents to choose among six curated baby collections, as well as focus their searches to specific areas like diaper changing, nursing and storage.”
    KC's View:

    Published on: July 26, 2018

    Produce News has a story about how Ahold Delhaize is testing a new vending machine at its Albert Heijn division in the Netherlands that “offers a variety of fresh, nutritious meals any time of day,” including meal boxes and salads designed to be appealing to customers seeking healthier products.

    The machine was designed by a group at Albert Heijn charged with developing new and innovative concepts.


    • The Wall Street Journal reports that Coca-Cola plans to raise prices on its soft drink products, saying that the move is “in response to rising costs, including higher freight rates and metal prices after the U.S. placed tariffs on Chinese imports earlier this year.” The company also said that it had “rising drink volumes in its latest quarter, boosted by demand for diet sodas in the U.S. and by experiments abroad.”
    KC's View:

    Published on: July 26, 2018

    MNB took note yesterday of a New York Times report about how “more than 7,000 Nike employees will be getting raises after an internal pay review, undertaken after claims of workplace misconduct and discrimination against women, shook the company and forced out several of its top executives … Such an overhaul is rare in the corporate world, but the shake-up at Nike has been seen as an illustration of how pressure from employees is forcing even huge companies to quickly address workplace problems.”

    I commented:

    I bring this up because I wonder how many companies would find themselves with similar results if they did an internal, across the board pay review.

    One MNB reader responded:

    I have two millennial sons and both say that talking about their salary is  a common subject ,  it’s not a taboo subject.   In my historical career, I just assumed that I was being treated fairly.  After I found out that I was not being treated fairly, I left a company after 20 years because they would not adjust my salary.   If millennials truly do talk about what they make on a regular basis,  I think pay reviews will be more in line with what they should be and there will be no discrimination.

    Women in particular can help other women.  Once I left the company of 20 years and got into upper management I made sure that the women who worked for me were paid well and recognized for their contributions.  

    My last company was thrown into a tizzy when they fired a female employee after three weeks of work and she was an excellent worker.  Needless to say my experience  of not being treated fairly helped me to speak up for this woman.  In the end they  settled out of court but I was only one person and I made an impact for several women. Just can’t be afraid to speak up.

    Same is true for any group being discriminated against,  you can’t be afraid to speak up.




    Regarding the Albertsons acquisition of Rite Aid, one MNB reader wrote:

    Starting to wonder, KC, if the Rite Aid vote is going to pass.  Judging by the message board posts, they are all against the merger, and adding more debt.  Above my pay grade, and I'm sure there are institutions that own more shares than most, and will push it through, we'll find out soon enough.

    And, about the new, upmarket Albertsons store, another MNB reader wrote:

    I'm guessing the store isn't far from corporate HQ, and will be visited often by bigwigs.  I think it's a great concept, not sure if it can be widely rolled out but it's a good learning tool for the company.  It'll be interesting to see where it goes, at the least.



    We repeated yesterday the story about a young man who walked 20 miles to work when his car broke down, prompting one MNB reader to write:

    Kevin, thank you for sharing that story.  I have printed it out and plan on reading it to my kids (ages 7 and 8) tonight at dinner before putting it in a plastic sleeve to keep in my parenting tool box.  My wife and I both had jobs starting the summer after 6th grade, and both worked part time in high school and college.  We are blessed to have both been professionally luckcessful (all success is part luck) and I attribute 90% of that to our early start in the workforce.  Our kids will have the same advantage.  And I plan on lovingly reminding them, when they don’t want to wake up for work at 7 am some July morning 7 years from now just exactly what a strong work ethic entails (and how it rewards) by threatening to re-read this story to them again for what will by then be the 1000th time.  So thank you for passing along that story and helping give them the lifelong advantage that comes from getting out of that bed 7 years from now.

    And another MNB reader wrote:

    Thanks for sharing this story, KC, it shows there is still a lot of good in this world, where only the bad gets reported, unfortunately.
    KC's View:

    Published on: July 26, 2018

    As often happens at this time of year, I’ve been getting emails from Portland, Oregon-area MNB readers wondering if I am going to have one of those casual get-togethers that we've done here the past few years.

    The answer is yes … and this year, I’m thrilled that it will be sponsored by Portland State University’s Center for Retail Leadership.

    So, let's get together Thursday night, August 2, at 5 pm, at Nel Centro, located at 1408 SW 6th Ave, in Portland. I'll plan on being there for a couple of hours, hopefully on the outside patio - and I hope that any MNB readers who'd like to stop by will do so. Put it on your calendar.
    KC's View: