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    Published on: October 10, 2018


    Note from the Content Guy: Michael Sansolo and I have been in Las Vegas this week, attending and speaking at the annual NACS show there. Not only did we get a lot from the experience - the NACS Show continues to be vital and vibrant, plus we got to have burgers at In-N-Out and margaritas at, well, Margaritaville - but it was one of those rare times that we actually found ourselves in the same place at the same time.

    So, we took advantage of the moment and taped this Eye-Opener video about the shifting definition of convenience and the importance of looking for solutions to problems that people don’t even know they have. There’s no text version of this - just the video - and we hope you enjoy it.


    KC's View:

    Published on: October 10, 2018

    by Kate McMahon

    “An almond doesn’t lactate, I will confess,” Dr. Scott Gottlieb, commissioner of the US Food and Drug Administration (FDA), at a July Politico conference.

    And there we have it, folks, the great “what defines milk” debate in a nutshell.

    For years, the nation’s dairy producers have been at odds with makers of plant-based beverages over the definition of milk. That feud has only escalated as soy, almond, coconut and oat “beverages” continue to siphon market share from the traditional dairy drinks.

    In fact, the market-research firm Mintel reported that non-dairy milk sales in the U.S. have increased 61% during the past five years, and the category was estimated to hit $2.11 billion in 2017. Overall sales in the dairy milk category have fallen 15% since 2012, reaching an estimated $16.12 billion in 2017.

    Currently, the FDA defines milk as “the lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows.” (Yuck!) Hence, that almond beverage can’t be called milk. Ditto any plant-based drink or even the “lacteal secretion” from a goat or a sheep. Go figure.

    Under pressure from the dairy lobby to crack down on the use of the word milk, the FDA recently announced the agency was on a "fast track to take a fresh look" at how non-dairy substitutes are being used in the marketplace.

    In a September 28th filing in the Federal Register, the FDA said it was seeking “insight into how consumers use plant-based alternatives and how they understand terms like ‘milk’ or ‘cheese’ when used to label products made, for example, from soy, peas or nuts.”

    The public has until November 27th to file a written or online comment.

    In a statement, Gottlieb he was concerned that consumers might mistakenly assume that non-dairy alternatives labeled “milk” would have the same health and nutrition benefits associated with cow’s milk, making them a “dairy product in disguise. “

    In an interview with CNBC, Gottlieb also called it a “commercial speech issue,” and he did concede that the second definition of milk in the dictionary is a “substance derived from a nut.”

    Of course, this definition battle extends beyond milk and plant-based yogurts and cheese. There has been linguistic wrangling, threatened and actual litigation and in some cases FDA warnings about eggless-mayonnaise, cauliflower and broccoli “rice” and “plant-based” beef.

    Honestly, I don’t think the aforementioned labels put the American consumer at a nutritional disadvantage. I know that chopped cauliflower isn’t rice, Beyond Meat’s plant-based burger is exactly that, and the quart of Almond Breeze in my fridge did not come from a cow. It’s obvious.

    The more important issue is clear and transparent labeling on all products regulated by the FDA. I would agree with the California Federal District Court Judge Vince Chhabria, who tossed out a 2015 lawsuit claiming Trader Joe’s soy milk label was misleading. He noted the product never tried to pass itself off as milk, and said “any reasonable consumer, indeed even an unsophisticated consumer” would not assume two distinct products would have the same nutritional content. And that’s what nutritional labels are for.

    It seems to me the dairy lobby is just crying over spilt milk.

    Comments? Send me an email at kate@morningnewsbeat.com .


    KC's View:

    Published on: October 10, 2018

    TechCrunch has a fascinating piece about how a lot of technology money is being invested in the food business, with the goal being to successfully challenge traditional ways of building businesses that feed people for a living, and gain an increasing share of stomach that could disrupt every corner of the food business.

    Here’s how TechCrunch frames the subject:

    “If investors at some of the biggest technology companies are right, the next big restaurant chain could have no kitchens of its own.

    “These venture capitalists think the same forces that have transformed transportation, media, retail and logistics will also work their way through prepared food businesses … Investors are pouring millions into the creation of a network of shared kitchens, storage facilities, and pickup counters that established chains and new food entrepreneurs can access to cut down on overhead and quickly spin up new concepts in fast food and casual dining.

    “Powering all of this is a food delivery market that could grow from $35 billion to a $365 billion industry by 2030, according to a report from UBS’s research group, the ‘Evidence Lab’.”

    You can read the entire story here.
    KC's View:
    Just in case you are skeptical, here’s another passage from the story that I found to be persuasive:

    Uber, the world’s largest taxi company owns no vehicles, Facebook the world’s most popular media owner creates no content, Alibaba, the most valuable retailer has no inventory and Airbnb the world’s largest accommodation provider owns no real estate. Something interesting is happening.

    No kidding.

    One of the things that I find so interesting about this story is how it portrays not just tech entrepreneurs as being focused on this sector, but also people from various corners of the food business. Whether it is investment portfolios created by CPG companies to fund startups that could diversify their businesses, or executives from the fast food and fast casual restaurants worlds who sense that something interesting is happening and want to be part of it (or just sense that career sustainability is dependent on investing in future models, not past constructs), it strikes me that there is so much brain power, creative elbow juice and money being put into the sector that something is going to change.

    My sense is that at some point a dam is going to break, and companies that define the world differently through original insights into consumer needs and desires (not always the same thing) are going to flood the culture with exciting options.

    It also seems to me that food retailers that are not in the game run the risk of being caught flat-footed, which could be a problem. (Could be?) And when I talk about being in the game, I’m not talking about outsourcing delivery to a third party and persuading oneself that an e-commerce strategy has been achieved. Far from it. I’m talking about finding a way to partner with, invest in, and learn from the smart start-up companies that are going to rock the food world.

    Published on: October 10, 2018

    Business Insiderreports that Walmart Canada has been exploring the sale of marijuana products - specifically CBD-infused beverages - in its stores there, though the company says it has no immediate plans.

    CBD is described as “a non-psychoactive component of marijuana that's linked to a range of health benefits but can't get you high.”

    According to Business Insider, “Canada is set to legalize marijuana federally on October 17. In the US, the CBD market is estimated to be a $1 billion business, and some analysts believe the market could explode to $22 billion across a range of categories, including beverages, snacks, and beauty products, in the next four years.”
    KC's View:
    Coke, Pepsi,Walmart … the list of companies preparing to get into the weed business continues to grow. There’s simply too much money on the table for them to back away, and when marijuana finally becomes legal throughout the US, they’ll be prepared to make their move.

    Published on: October 10, 2018

    various Canadian casinos offering real money games reports that France-based supermarket retailer Casino has opened a new checkout-free store in Paris, featuring “image recognition technology” and allowing “shoppers to buy with an App and pay online or at a self-service check-out.”

    Called Le Casino 4 and located near the Champs-Élysées, the store “has three floors and offers 6,000 products. It’s open 24 hours, seven days a week. And it boasts a selection of organic products, a ‘smart wine and spirits cellar,’ and sample dishes prepared by a chef. There is also a showroom for products from French ecommerce site Cdiscount and a free coworking space.”

    The story notes that customers can take products home but also “have the option of ordering home delivery through a digital wall, where they can scan items and schedule delivery.”

    KC's View:
    I obviously haven’t been in this store, but this strikes me as a good example of a retailer looking to find ways to reinvent itself … which is something that every retailer needs to consider. Not every experiment will succeed, but remember the Jeff Bezos line: “It isn’t an experiment if you know how it is going to turn out.”

    Published on: October 10, 2018

    Danny Meyer, the restaurateur perhaps best known for his Shake Shack chain, has invested $15 million in an e-commerce business called Goldbelly, which, the Wall Street Journal writes, “specializes in shipping favorite food items from restaurants, bakeries and other purveyors.” According to the story, it is the largest initial investment that the fund - worth $220 million - ever has made.

    Among the other companies that Meyer’s fund, called Enlightened Hospitality Investments, has put money into are Salt & Straw, the iconic ice cream company based in Portland, Oregon; Joe Coffee, a New York City-based specialty coffee roaster; and Resy network, an online restaurant reservation app.

    The Journal writes that Goldbelly, which started up five years ago, “has offerings from more than 350 establishments across the country, including Los Angeles’s Langer’s Deli, Pittsburgh’s Primanti Bros. and Baltimore’s Faidley Seafood. Such New York institutions as Russ & Daughters and Magnolia Bakery also are part of the Goldbelly mix.”

    Meyer tells the Journal that “he first became aware of Goldbelly when someone sent him a gift of Ted Drewes frozen custard from his hometown of St. Louis via the company. The online store tapped into an ‘an idea I always loved,’ he said. ‘Which is, how do you give people the taste memory and emotional memory for what they discovered somewhere else and make it easy for them to have it wherever they may be?’”
    KC's View:
    I’ve spent a bit of time on Goldbelly, and I have to say that I’m intrigued … after about 30 seconds, I was hungry, and that’s a pretty good achievement for a website. There is a lot to be said for tapping into emotional memories and the visceral reactions people have to great food.

    And you know what made me really happy? Seeing that Dorothy Lane Markets’ Killer Brownie is available there … because it demonstrates how this iconic supermarket company really understands the power of food.

    Published on: October 10, 2018

    Food writer Mark Bittman - who made a brief and apparently unsatisfying foray into the meal kit business after leaving his column-writing gif at the New York Times - is back, with a new online newsletter and, soon, a podcast.

    Food & Wine reports that “the emphasis will be on recipes at first,” but “the content will run the gamut.” Bittman tells Food & Wine that “there are like 15,000 'Mark Bittman' recipes, so certainly the core will be: 'Here’s something we think you’d like to cook.’ I believe my style is unusual enough that people will find that appealing. Then, we’ll try other things, and see how they fly.”

    It will, Food & Wine suggests, come as a relief to Bittman fans who may have been “bemoaning the absence of regular columns distilling some of the food world's biggest obstacles into intelligible terms where solutions actually feel within reach, and the approachable - and importantly flexible - recipes from the former New York Times columnist.
    KC's View:
    You can count me among the Bittman fans who are happy about this. I love the newsletter, and already am ready to try making his “Simplest and Best Shrimp Dish.” I’ve always found his insights on food culture to be intriguing, and I look forward to having them delivered to my in box on a regular basis.

    Published on: October 10, 2018

    Oakland University, in Rochester, Michigan, is the home of a new Plum Market that is designed to provide healthier shopping options to students on campus.

    A student review in the Oakland Post says that “with its sleek, open kitchen and helpful staff, Plum Market looks and feels upscale, yet is inviting. There are multiple seating areas conveniently located by Plum Market now, making it a great place to grab lunch and meet up with friends.

    “The main attraction of Plum Market is the rotating selection of foods, making it a place students can eat at often without getting bored of the selection. In a glass case, there are multiple salads and cold foods. They have classics such as pasta salads, as well as more unique ones, such as their artichoke and egg salad … While the food selection is already great, the drink selection has so many diverse options. The drinks at Plum Market are an excellent alternative to the less healthy options around campus and are worth the walk to the Oakland Center … the addition of Plum Market is a huge bonus. It is a great choice for anyone looking to get fresh, healthy alternatives to other options on campus.”
    KC's View:
    Love this. Having a great food store on campus is an enormous advantage … as I’ve found with Green Zebra at Portland State University. Smart move.

    Published on: October 10, 2018

    The Wall Street Journal reports that Sears Holdings has hired “M-III Partners LLC to prepare a bankruptcy filing that could come as soon as this week,” though Sears also “continues to discuss other options and could still avert an in-court restructuring.”

    Sears “has $134 million in debt due on Monday. Edward Lampert, the hedge-fund manager who is Sears’s chairman, chief executive, largest shareholder and biggest creditor, could rescue the company, as he has done in the past by making the payment.” But, Lampert has been pushing for “a broader restructuring that would include shaving more than $1 billion from Sears’s $5.5 billion debt load, selling another $1.5 billion of real estate and divesting $1.75 billion of assets, including the Kenmore appliance brand, which he has offered $400 million to buy himself.”
    KC's View:
    At this point, a Sears bankruptcy will be the least surprising “news” story that I can imagine.

    Published on: October 10, 2018

    The New York Times has a fascinating column by Farhad Manjoo in which he writes about “a future in which everything becomes a computer.” An excerpt:

    “In recent years, the tech industry’s largest powers set their sights on a new target for digital conquest. They promised wild conveniences and unimaginable benefits to our health and happiness. There’s just one catch, which often goes unstated: If their novelties take off without any intervention or supervision from the government, we could be inviting a nightmarish set of security and privacy vulnerabilities into the world. And guess what. No one is really doing much to stop it.”

    It is definitely worth reading here, even at the risk of being totally creeped out.
    KC's View:

    Published on: October 10, 2018

    DC Velocity reports that Amazon has opened a pop-up store in the parking lot of a Wilmington, North Carolina, Whole Foods store, that is designed to allow local residents still reeling from the damage caused by Hurricane Florence to “receive parcel deliveries even if their homes are still isolated by storm damage … the site consists of an Amazon Prime delivery van, a temporary tent, and enough staff to handle the incoming packages holding important items for storm recovery.”


    • FAO Schwarz is back.

    CNN reports that thew retail brand’s owner,ThreeSixty Group (which bought the brand from Toys R Us in 2016), plans to open a 20,000 square foot store at 30 Rockefeller Center in Manhattan next month, in time for the end-of-year holiday shopping season.

    The story notes that “FAO plans to open airport stores, including at New York's LaGuardia Airport, and in Canada. It has also started selling inside Kohl’s,” as it looks to re-establish itself as a viable toy retailer.
    KC's View:

    Published on: October 10, 2018

    Got the following reaction from MNB reader Steve Dirnberger to the GH Lab store opened at the Mall of America:

    Being a merchant at heart I didn't care for the store. I like HUGE displays - not one of each item.

    Stack it high and let it fly baby!

    Since I am in the grocery business I wondered what a grocery store with the smile codes would look like? One can of corn sitting on a shelf?


    I get your point, but I guess I would suggest the following…

    True, the approach may not make sense for every retail format. Though I might argue that limited assortment stores - I’m talking everything from Aldi and Lidl to Trader Joe’s and Stew Leonard’s - already have gotten the SKU editing part down. Could they open stores where a person could walk through, use a smart phone to choose items quickly by scanning codes placed next to a single display item, and then have the order immediately delivered to a person’s car? I certainly wouldn’t argue that this is an impossibility. In fact, as I describe it, I’m sort of nodding to myself and thinking that I might want to patronize such a store.

    As a merchant, you may not like the idea, but what really matters is whether there are consumers who would like it. Not every consumer, and not all the time … but maybe enough consumers enough times to make this a viable format in certain categories. Again, don’t bet against it.

    On the same subject, one MNB reader wrote:

    A quick thought on the GH Labs pop-up store at Mall of America:  On top of all you wrote about, I think the folks who came up with this deserve some kudos for keeping (returning?) the Good Housekeeping Seal of Approval relevant.

    Good point.



    On the subject of Instacart, and how we’ve been talking about it here on MNB, one reader wrote:

    I’ve been watching the Instacart rant on here for a while. As a brand manager, I can understand the caution, but Michael Sansolo’s piece highlights something I’ve been thinking about - the average grocery shopper shops at multiple stores and to believe otherwise is just silly. Instacart offers that “average shopper” one convenient location to shop at multiple stores. This is a huge benefit. In our market, our brick and mortar stores that do the best are positioned near other grocery stores because of just this reason. Seems counterintuitive, but it’s not really. It’s about convenience and the understanding you can’t be all things to all people (unless of course you’re Amazon, according to KC).

    Geographic proximity is one thing, but would you share employees with your competition? I’m guessing not.

    Seems to me that the best retailers are the ones that differentiate themselves, and do their best to drive home competitive advantages, not competitive equivalence.

    One other thing. I would never argue that retailers can or should be all things to all people. Not even Amazon. In fact, I’d argue that retailers that try to be all things to all people are the ones most at risk for irrelevance, because they end up being nothing special to anyone.

    MNB reader Andy Casey wrote:

    You are right on with your thinking on this.  For example, some people never shop in Aldi because they just do not like the experience but when ordering a few staples (milk, eggs and similar) online does it make sense to pay more for them from Publix than from Aldi?




    Got the following email responding to yesterday’s criticisms of Target’s food merchandising acumen, at least as displayed by its downtown store in Portland, Oregon:

    This rule must apply to So Cal stores as well. Every time I shop in my local Target store (Anaheim, Ca.) I find pallets of water or cereal  in the kids clothing department, ½ dead flowers at the door,  or other crazy merchandising that just doesn’t make sense.

    I just feel like sub-par merchandising gives a black eye to grocers that work hard to create an experience when shopping for groceries. The “stack it high and watch it fly” philosophy, (at least in So Cal) just doesn’t work anymore.

    Don’t get me wrong, I love Target. I just feel like they need to stick to what they are good at.


    And MNB reader Monte Stowell wrote:

    It is quite obvious that from day one when Target got into the grocery business, that they did not know what they were doing. I remember seeing their very first Super Targets on the west coast when they introduced groceries and fresh produce. A lot of hype, but there was no “Wow Factor.”

    They hired a lot of young people who were never mentored by people who had journeyman or managerial experience in the grocery departments. Too many out of stocks, product was not rotated, nobody around to talk to about perishables, did not teach the young people how to merchandise and display product, among other issues. Bottom line with Target, is they do not have an effective training and mentoring program to execute good merchandising.

    Still today, “No Wow Factor.”


    Wow.



    On the subject of the Mattress Firm bankruptcy, MNB reader Brian Blank wrote:

    I don’t know that the whole bed-in-a-box thing is really the issue.  Mattress Firm very recently spent heaven knows how much money to buy the Sleepy’s chain and convert those stores to the Mattress Firm banner.  Sleepy’s already seemed to have way more locations than were necessary (my small town had 2!) and I’m sure there was even more redundancies in markets where both stores operated.  True, adding another form of competition couldn’t have helped, but I suspect they overspent on buying up the competition and that’s the core of the financial woes.



    Got the following email fromMNB reader John Rand:

    I love Costco. I really really do.  And yet I let my card expire and never go there.

    The nearest Costco to me is about 50 miles. In my part of Massachusetts, that is a variable drive of between 45 and 90 minutes on a good day, two hours on a bad one. It is not a pleasant drive in any case – we are not talking courteous drivers, splendid scenery, and a sense of community here, we are talking competitive driving, traffic weavers, and universal tailgating – and those are the good drivers.

    That’s not a complaint. I am one of them, although a recognition that age has slowed my reflexes came over me some time ago and I try to tone it down these days. On the whole we are only really polite to one another on the roads on the morning after a final World Series victory or a game that eliminates the Yankees from contention.

    But Costco seems to think 100 miles is somehow reasonable.  So I am no longer a Costco member. If Costco did for me what Amazon does, I would still pay for the card and still use it, both locally and when traveling.

    I doubt I am the only one who thinks this is amazingly shortsighted of Costco. But then I was fond of a lot of other retailers who are no longer with us.

    *sigh*

    KC's View:

    Published on: October 10, 2018

    The Boston Red Sox defeated the New York Yankees last night 4-3, closing out the best-of-five American League Divisional Series 3-1, and now moving on to play the Houston Astros in the AL Championship Series.
    KC's View: