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    Published on: December 3, 2018

    by Kevin Coupe

    The New York Times had a story the other day that struck terror into my aging soul … saying that french fries, one of the finest culinary creations in the history of civilization, should be considered “starch bombs” that lead to “an increased risk of obesity, diabetes and cardiovascular disease.” And that’s the good part.


    We all sort of knew this, but there it was in print: “Potatoes rank near the bottom of healthful vegetables and lack the compounds and nutrients found in green leafy vegetables … If you take a potato, remove its skin (where at least some nutrients are found), cut it, deep fry the pieces in oil and top it all off with salt, cheese, chili or gravy, that starch bomb can be turned into a weapon of dietary destruction.”

    Studies point out that the condiments and adornments that usually go on french fries only make them less healthful, and that even worse, most restaurants don’t change the frying oil often enough, which “promotes the creation of unhealthy fatty acids.” You can eat a few, but more than that is courting dietary disaster.

    Not exactly an Eye-Opener, in the sense that none of this information is a huge surprise. But there it was, in black-and-white … information that may make life last longer, but doesn’t really make life any more pleasurable.

    And so it goes. (Sigh!)
    KC's View:

    Published on: December 3, 2018

    The Wall Street Journal this morning reports that Amazon is testing the checkout-free Technology that it is currently employing in seven stores - three in Seattle, three in Chicago and one in San Francisco - “in a larger space formatted like a big store.”

    It is, the story says, “unclear whether Amazon intends to use the technology for Whole Foods, although that is the most likely application if executives can make it work … Amazon has previously said it has no plans to add the technology to Whole Foods.”

    The story notes that while “the technology functions well in its current small-store format, it is harder to use it in bigger spaces with higher ceilings and more products … meaning it could take time to roll out the systems at more larger stores.”

    There have been reports - which may fall more securely into the realm of speculation - that Amazon plans to open as many as 3,000 Go stores over the next few years.
    KC's View:
    This is one of the less surprising stories that I can imagine, considering that we’re less than a year out from the public debut of the first Amazon Go, and two years out from the original opening (just for Amazon employees). Of course, they’re testing it in larger locations - they have larger stores, and might as well find out if it works. There’s also the possibility - I wouldn’t bet a ton of money on this - that Amazon could license out the technology to a third party, in which case it’d be important to make it work in a larger format.

    I’ve said almost from the beginning that I think the 365 by Whole Foods stores would be a perfect testing ground for Amazon to play around with checkout-free technology in a larger environment - they are of a more manageable size, with virtually no service components. It’d work, I think. Or, they could test the format by creating a small store format that exists within a larger Whole Foods store.

    The Journal correctly suggests that one potential problem in testing the Go technology in a traditional Whole Foods store would be the possibility that it would be perceived as antithetical to the chain’s traditional value proposition.

    This sort of test is inevitable. We know that Standard Cognition and Zippin, each of which is testing the same sort of technology, say that they are negotiating with retailers to test their versions. Amazon is way ahead of them, and I’d expect it to continue to be so as they figure out technological advances that they think will service the customer.

    Published on: December 3, 2018

    United Natural Foods Inc. (UNFI) announced on Friday that it is selling seven Hornbacher’s locations, which it picked up when it acquired Supervalu earlier this year for $3 billion, to Coborn’s. Terms of the deal were not disclosed.

    In addition to the seven existing stores, a new store being developed in West Fargo, North Dakota, is included in the deal. Not included is an existing store in Grand Forks, North Dakota, which will be shuttered after a liquidation sale.

    According to the announcement, “As part of the sale, Coborn's plans to retain the Hornbacher's name and will enter into a long-term agreement for Supervalu to serve as the primary supplier of the Hornbacher's locations. As well, Supervalu will enter into an expanded supply relationship with Coborn's. Both of these supply agreements will include minimum purchase requirements.”

    In a prepared statement, Supervalu CEO Sean Griffin says that the company’s “strategy is to focus on the wholesale business going forward, so finding a strategic buyer for Hornbacher's with continued supply opportunity was a top priority. Coborn's is a long-standing Supervalu wholesale customer and we're excited that they will carry on the Hornbacher's name and tradition of quality products and service.”

    The Star Tribune notes that “Ted Hornbacher opened his first store in Moorhead under the name Ted’s Supervalu in 1951. The name later was changed to Hornbacher’s and expanded to eight locations. Supervalu bought the grocery store chain in 1975.”
    KC's View:
    At a time when heightened competition and consolidation, which could lead to the elimination of stores and banners, it is heartening to see deals that will keep retailers alive and, hopefully, thriving.

    Published on: December 3, 2018

    Business Insider reports that Cleveron, described as the technology firm that designed the pickup towers being used in some Walmart stores, has developed “a self-driving car that delivers packages to homes and businesses. The car uses a robotic arm to place the packages in pickup lockers outside homes and businesses. Eventually, it will be able to deliver to mailboxes and pickup towers as well.

    “Autonomous delivery could be a boon for retailers, which have seen shipping costs balloon in recent years.”

    The development would seem to be right in line with where prognosticators believe the world is going: “A 2016 McKinsey study estimated that autonomous vehicles, including drones, would account for about 80% of all consumer parcel deliveries during the next 10 years. And according to a new study from the consulting firm KPMG, approximately one million autonomous delivery robots could be on the streets by 2040.”

    The story notes that “Ford and Walmart recently partnered to begin testing the delivery of goods using autonomous vehicles in Florida.”
    KC's View:
    Vox has a story about the same subject, suggesting that while a majority of Americans worry about being transported in autonomous vehicles, there is less concern about packages and products being transported in such vehicles.

    I don’t know about you, but I worry more about getting hit by one of the damn things than riding in them.

    Like drones, autonomous cars probably will take a little longer to gain popular and regulatory acceptance … but we’ll get there. It won’t be for everyone, everywhere. Some cars - like my manual transmission Mustang convertible - will be seen as dinosaurs, driven by dinosaurs.

    But I won’t judge you if you won’t judge me.

    Published on: December 3, 2018

    Bloomberg reports that “employees of Sears Holdings Corp., inspired by the hardship fund for workers affected by the collapse of Toys R Us Inc., are asking chairman Eddie Lampert and the firms involved in the chain’s bankruptcy to preserve jobs and stores as well as guarantee severance pay and pensions.”

    The story notes that two of the three private equity groups that owned Toys R Us have agreed, under pressure from organizations representing former employees, to each kick in $10 million for workers who lost their jobs when the retailer collapsed.

    Sears, Bloomberg writes, “says it has no plans to liquidate after filing for Chapter 11 court protection in October, but it has been closing stores and cutting jobs as part of that process. It’s still working to keep several hundred outlets alive as part of Lampert’s plan to buy the company out of bankruptcy. Sears has lost billions of dollars since Lampert combined the Hoffman Estates, Ill.-based company with Kmart in 2005 … Sears won a second round of bankruptcy financing this week, and says it will need another $239 million in order to keep operating 505 stores beginning next year. Lampert is teaming up with investor and debtholder Cyrus Capital Partners to make the bid to buy and operate those stores.”
    KC's View:
    Hard to imagine that treatment of Toys R Us employees would be seen as a role model for anybody or anything. But there you go.

    I just wouldn’t count on Sears doing anything that even remotely might reflect what some might call servant leadership.

    Published on: December 3, 2018

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    Yahoo! Finance has a piece about Fiona Ma, the newly elected Democratic state treasurer in California, who has established that one of her priorities is to “get Amazon to collect taxes for its billions of third-party sales” after she takes office in January. She says that she will be “pushing for a state law that would put the burden on powerful e-commerce giants like Amazon to collect taxes on behalf of third-party sellers who sell on their platforms.”

    The story notes that Amazon “has already been collecting sales tax for its own products in all 45 states with such tax. However, in most states, it doesn’t collect sales tax for third-party sellers on its marketplace — which account for over half of Amazon’s sales.”

    California, the story says, “has been pressuring the e-commerce giant to provide tax information for third-party sellers - ostensibly, so the state can make sure those businesses are collecting sales tax, too. However, Ma says that collecting taxes would be a burden for third-party sellers,”: and she wants to put the onus on platform providers like Amazon.

    Bloomberg reports that Amazon and Apple announced that Apple Music is going to be available on Amazon’s Alexa-powered devices, making it the second collaboration between the two tech giants during the past month.

    According to the story, “Subscribers will be able to control Apple Music with Amazon’s Alexa digital assistant, the first time Apple has opened up its music service to full voice control outside its own Siri technology.

    “The decision pushes Apple’s music service into more living rooms at a time when its own internet-connected speaker, the HomePod, hasn’t sold as well as the competition. Given the breadth of Alexa-enabled speakers on the market, the move could also boost Apple’s own subscription numbers.”

    Bloomberg notes that “earlier this month, the e-commerce giant began selling the latest Apple iPhones, Watches, and iPads on its website. One notable exclusion is the HomePod.

    “It’s unclear if the two moves are related. But the e-commerce deal could spur more purchases of Apple devices by Amazon customers. While Amazon is the market leader in smart speakers, the company’s efforts to design and sell its own smartphone flopped, and it doesn’t sell pricey tablets like the iPad or high-end wearables like the Apple Watch.”

    I’ve been generally unimpressed with Apple’s HomePod - it has struck me as a me-too item (not typical for Apple) that gives me no reason to abandon Alexa. But this may point to a deepening relationship between two tech giants that tend to get A+ grades, but do have weaknesses for which the other might be able to compensate.
    KC's View:

    Published on: December 3, 2018

    • The Arkansas Democrat Chronicle reports that “starting Jan. 1, Walmart Inc. will require employees needing spinal surgeries to travel at the company's expense to one of eight designated hospitals for the operations. Walmart, which is self-insured, says the program that has been voluntary since 2013 has cut down on unnecessary procedures.

    “The Bentonville retailer will pick up the tab for the surgeries and all related travel expenses for patients on the company's health insurance plan, including a caregiver.”

    For other types of surgeries - transplants, heart surgeries and knee and hip replacements, for example - there are also designated/preferred hospitals, but it remains voluntary for Walmart employees to use those facilities.

    The story notes that “Walmart's approved medical centers for spinal surgeries are the Mayo Clinic's three locations -- in Rochester, Minn., Jacksonville, Fla., and Phoenix; Mercy Hospital Springfield in Missouri; Memorial Hermann Health System in Houston; Emory Healthcare in Atlanta; Virginia Mason Health System in Seattle; and Geisinger Medical Center in Danville, Penn. These facilities, known in health care as designated ‘centers of excellence,’ were chosen ‘for their demonstrated expertise in high-risk procedures’.”
    KC's View:

    Published on: December 3, 2018

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    • The Washington Post reports on how Marriott has disclosed that “hackers have had access to the reservation systems of many of its hotel chains for the past four years, a breach that exposed private details of up to 500 million customers while underscoring the sensitive nature of records showing where and when people travel — and with whom.”

    The Post goes on to point out that “the breach of the reservation system for Marriott’s Starwood subsidiaries was one of the largest in history, after two record-setting Yahoo hacks, and was particularly troubling for the nature of the data that apparently was stolen, security experts said. That includes familiar information — such as names, addresses, credit card numbers and phone numbers — and also rarer prizes for hackers, such as passport numbers, travel locations and arrival and departure dates.”

    The Oregonian reports that businessmen from Portland and Salem “became among the first in the nation Friday to file a class-action lawsuit against Marriott … The lawsuit’s class representatives are listed as Chris Harris, a Portland businessman who frequently travels, and David Johnson, a Salem attorney who believes the breach could be responsible for suspicious activity he noticed on his credit card in the past year.

    • The Wall Street Journal has a story about how tuna companies are struggling to find ways to make their products relevant to younger consumers, as demand “has fallen steadily compared with fresh and frozen fish.”

    They are, the story says, “trying to reboot demand for tuna fish—selling it in cans, pouches and kits with trendy flavors or as a healthy snack—as they seek to hold on to their dominance in a shrinking market … The traditional tuna makers are facing problems that have plagued other providers of packaged foods, such as soup. Canned tuna is struggling to connect with younger generations who favor fresher, less-processed options. It is also dealing with competition from newer and fancier brands, which see an opportunity to innovate in a category they think big brands have let slide.”

    While packaging changes are being implemented as one way of creating greater appeal, “two of the big traditional tuna makers have launched their own premium brands in recent years. Bumble Bee sells Wild Selections and StarKist offers Blue Harbor, marketing the lines as sustainably fished. The smaller brands’ fishing methods have been certified by a marine stewardship group, though in some cases they don’t differ from those used by their parent company’s products.”

    I completely get this. I don’t think I’ve ever seen any of my kids eat tuna … it just isn’t on their radar as an option. Mrs. Content Guy does, and I do … though I must confess that after a childhood in which my mom made me tunafish sandwiches a couple of times a week and way too many tun noodle casseroles, I went a few decades without eating tuna…but my love of tuna was awaked by two things. One was the great tuna melt they make at Green Zebra in Portland. The other - a passion for spaghetti al tonno, which I love to make and eat (but can’t get anyone else in my family to eat).

    • Last week, MNB noted that Starbucks has announced that it would be installing a new filter on its wifi network that would prevent customers from watching porn while in its stores.

    Now, according to the Daily Caller, “Two prominent pornography websites have responded to Starbucks after the Seattle-based coffee company announced a plan to block explicit material accessed via their in-store WiFi.”

    One, called YouPorn, has said that it is retaliating by banning the consumption of Starbucks products in its workplaces.

    Another, PornHub, said it will create a separate channel for content that is appropriate to be seen at work or in other public places, like Starbucks.

    Not to be contrarian here, but isn’t the idea of safe-to-watch-at-work-or-Starbucks porn sort o an oxymoron?
    KC's View:

    Published on: December 3, 2018

    • The Fresh Market said last week that it has hired Chris Himebauch, the former chief human resources officer at Stein Mart, to be its new SVP and chief human resources officer.
    KC's View:

    Published on: December 3, 2018

    George Herbert Walker Bush, the 41st President of the United States, passed away late Friday at age 94.
    KC's View:
    After I saw the news break late Friday night, I found myself up for several hours, watching the television coverage and reading stories online about President Bush - a man who was not a perfect politician or president (he cheerfully admitted this), but who by all accounts was a good, decent, nice man.

    It was mentioned by almost everyone that he was the last president to have served in the armed forces, and the last president of the “Greatest Generation.” Almost everyone pointed out that he is likely to be assessed by historians as perhaps the most consequential one-term president in the nation’s history, serving at a time of enormous global tumult and the end of the cold war, and managing both with dexterity and humility.

    In some ways, though, I found one line from The New Yorker to be both accurate and sad - that he is “likely to be remembered as the last President of the Republic not to have been intensely despised by a significant portion of its population.”

    Published on: December 3, 2018

    I keep railing against companies where senior execs manage to walk away from disasters without feeling pain, even getting bonuses, while front line employees get screwed.

    MNB reader Tom Murphy wrote:

    Years ago there was a solution for companies that lined the pockets of their managers at the expense of their employees…it was called unionization! Now, even though I am liberal, I am not a big fan of unions as they tend to create an us vs. them mentality that stifles innovation, productivity and competitiveness. IMHO, this is was killed the auto industry and destroyed Detroit. However, I have worked for several unionized companies myself (only once being in the IBEW as a young computer programmer for a public utility). In general, corporations that have unions generally deserve them…for either past or current reasons.

    We need a new corporate structure that makes both manages and employees partners in the success of the company…oh wait, isn’t that profit sharing and employee ownership?

    Regarding retailers that no longer take cash, one MNB reader wrote:

    I was at a banking seminar and the question was asked about the demise of cash.  The speaker immediately responded with a quick “NO”.  When pressed for an explanation, the rational was “there will always be a need for anonymous transactions.  We exchange goods/services for cash.  No records, no trail of any type.”  Rather spooky but real world nevertheless.

    Oh, good. Monetary policy is being dictated by lobbyists and the Sopranos.

    MNB reader Mark Phillips wrote:

    Interesting (and not that surprising really) article on more and more retailers not accepting cash. I ALWAYS carry some cash, because there are inevitably some establishments that I have a “sixth sense” about the security of their card processing equipment. Regardless of government mandates for requiring chip processing, have you ever noticed the irregularities of the equipment itself and the practices merchants use to “authorize” your identity? Almost laughable. Some have virtually none, some want your ID, some have you sign while others don’t, etc. Lastly, I was (almost) shocked when I noticed a transaction that still inscribed my actual credit card number (allegedly banned years ago) on an independent restaurant receipt. I crossed it out, sought out the owner and advised him to update his equipment or face a big fine. And told myself I should have used cash, which I’m sure HE would have preferred anyway!

    We had a story last week about how bankrupt Sears has identified 505 store locations that it would like to sell as a group next year, which would help it reduce debt and costs and find a path to some sort of survival; it also is hoping for rent reductions from sympathetic landlords.

    I commented:

    Good luck, especially selling them in one fell swoop. I would imagine that there is a lot of distressed real estate in this group, in part because Sears has driven the value of the stores into the ground through mismanagement and incompetence, and in part because the whole mall business model is facing nine miles of bad road anyway.

    One MNB reader responded:

    Have you thought of this- maybe a REIT buys the whole lot, seeing they see that Sears has driven the value down, and with their expertise they can make a nice return on a “good buy” and spruce up the properties?

    They still have to deal with the problem of malls become distressed properties in general.

    On an other subject, from MNB reader Tim McGuire:

    The idea that “we shouldn’t do anything about climate change because other countries aren’t doing enough” is equivalent to being in a leaky lifeboat and refusing to bail the water out of the boat because there are other passengers who aren’t bailing the way you think they should. You may feel justified in doing nothing but you’re still going to drown.


    MNB reader Glenn Cantor has a suggestion for CVS, now that it has acquired Aetna:

    Provide in-store or web-site based live video feeds to Aetna customer service reps who can provide health insurance answers.  Be part of the solution.

    I had a piece the other day about a new marijuana delivery service that is cropping up, promoting one MNB reader to write:

    “Big business, high hopes, and definitely an Eye-Opener.”  “High” hopes?  Pun intended? 

    I have images in my head of what the delivery vehicles might look like…similar to Domino’s or the Bug Zapper guy…It will be interesting to see whether they go discreet worrying about reactions from the general public, or whether they cater to their target market…

    We’ve had a couple of pieces recently about what we called “an ongoing and pitched battle taking place in Oregon over the legitimacy of a wine brand that claims to be from the Willamette Valley, but is not. Now, federal regulators have ruled in favor of Oregon winemakers seeking to defend their terroir.

    The wines in question were made and bottled by Copper Cane in Rutherford, California, with a label saying that the source of the grapes was “the Willamette region of Oregon’s coastal range.” The clear implication was that this was a pinot noir from the Willamette Valley, which it was at the very least questionable.

    When this claim was questioned by Jim Bernau, founder and principal owner of Willamette Valley Vineyards, Copper Cane owner Joe Wagner’s response was to file a petition “to rescind Willamette Valley Vineyard’s nearly 40-year-old trademark” and claim that Willamette was now “a winemaking region, and were no longer worthy of a trademark.”

    Now, Wine Spectator reports that “Wagner can no longer reference specific Oregon appellations on his Oregon wine labels. That's according to the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), which has pulled its earlier label approval for Wagner's Elouan and Willametter Journal Pinot Noirs. The wines, which are made with Oregon grapes but produced in California, have been mired in controversy over their use of Oregon's appellations, or American Viticultural Areas (AVA), on their labels and packaging.” The move essentially reinforces federal labeling rules requiring “that a wine must be produced in Oregon in order for it to display one of Oregon's viticultural areas on the label. Wines produced in neighboring states may only use the broader Oregon designation.”

    MNB reader Katianna Sokol responded:

    I often read your MorningNewsBeat and it has proved quite enlightening. As someone relatively new to the agriculture world, it has helped me learn some of the nuances of the happenings in the industry. I did have a few thoughts, however on this Oregon Vintner’s lawsuit.

    My gut reaction was that the ruling was, in simple terms, unfair. While I recognize the desire for transparency and honesty, the grapes, as your share, are in fact *grown* in Oregon. While winemakers do have influence on the product through their decisions of yeasts, additives, etc, wine drinkers know that the earth in which the grapes grew, the climate in the area, and the overall grape growing experience often hold the heaviest weight in a wine’s ultimate palate.

    There are a multitude of wineries that, for one reason or another, send out grapes to be custom crushed elsewhere. I do not think that noting where the grapes were grown is a lie—even a white one.

    That being said, I have not delved deep in the lawsuit and its workings, and I have a majority of my experience with wineries in Washington and California, so I am of course open to hearing how my instinct could be misdirected. Regardless, I thought it was worth reaching out.

    MNBB reader Greg Steven disagreed:

    Totally agree with your assertions, and appreciate the outcome … Labeling in the US is a hypocrisy.   We claim China steals our technology IP, yet we steal everyone else’s food IP, or allow inordinate number of fake products into our stores. 

    As a consumer I want to find something I like and be able to trust that it is what it is, and that other products made the same way or in the same region, will likely follow suit.    It’s for convenience.  It’s because I appreciate the farmer who prunes his vines, limits his yield, and doesn’t manipulate his wines.  It’s because I don’t want Gallo to be the only producer.   I don’t want to be duped into buying a knock off product that emulates the real thing.
    Labels, accuracy, and…. Tradition/terrior/quality… matter.

    On another subject, from another reader:

    I enjoyed the piece about Sierra Nevada’s new beer to help those hurt by the fire. My household is located in Asheville, NC and one of my roommates works for SN at their second location in Mills River. He told me that a large portion of employees that work at the original location lost their homes in the fire. This is more than just a story about a company donating money to a cause, it’s about a company that values the lives of its employees and other people in the community. This will likely make a lot of people SN drinkers for life.

    And, another observation, from MNB reader Steve Workman:

    Your piece on phone booths made me recall the Outdoor retailer Show in Utah few years back. It was the last show in Salt Lake after a 23 year run. If you recall, the Industry rebelled against the removal of Historical Monuments supported by the Governor as presented by President Trump. One of the Trade Show Exhibits, I believe it was KEEN Footwear, had an operating phone booth, the classic Red frame with glass all around (London like). They were promoting the cause and anyone could step into the booth and call the local representatives and voice their opinion on the ruling. I was impressed with their creativity.

    The show ended early on the last day when every booth closed down about 4 hours early and a huge crowd marched downtown Salt Lake to the Capital to show solidarity. The show moved to Denver and now they reap the benefit of the Hundreds of thousands of dollars associated with Hotels, Restaurants, etc. that Trade Shows bring and the have two a year, Winter and Summer.

    Anyhow, it shows that phone booths can be relevant in certain context.

    KC's View:

    Published on: December 3, 2018

    In Week Thirteen of National Football league action…

    Chicago 27
    NY Giants 30

    Arizona 20
    Green Bay 17

    Indianapolis 0
    Jacksonville 6

    Cleveland 13
    Houston 29

    Carolina 17
    Tampa Bay 24

    Buffalo 17
    Miami 21

    Denver 24
    Cincinnati 10

    Baltimore 26
    Atlanta 16

    LA Rams 30
    Detroit 16

    Kansas City 40
    Oakland 33

    NY Jets 22
    Tennessee 26

    Minnesota 10
    New England 24

    San Francisco 16
    Seattle 43

    LA Chargers 33
    Pittsburgh 30
    KC's View: