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    Published on: July 25, 2019

    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, Kevin Coupe here and this is FaceTime with the Content Guy, coming to you from one of the classrooms in the new Karl Miller Business School building at Portland State University, where I am once again enjoying a summer adjunctivity.

    As I record this, though, I am thinking of the recent Organic Produce Summit in Monterey, California, where I contributed to the onstage content and have been lucky enough to be included on the agenda every year since it began. (It is remarkable, by the way, what Matt Seeley, the meeting’s co-founder and CEO, and his team have done with this event - it is almost double the size it was just a few years ago, and I find it always to be an instructive and energized experience. If you’ve never been, you should go.)

    This year, there were a pair of excellent keynote presentations that I want to tell you about.

    There was Dan Barber, who is the most renowned chefs in America - he is the owner and chef of Blue Hill in New York City and Blue Hill at Stone Barn, up in Westchester County, and is one the most prominent advocates of the farm-to-table movement in America. (I’ve eaten at Blue Hill and Stone Barn, and it was one of the most distinctive meals of my life. Also, by a long shot, the most expensive.)

    Barber told some great stories, but his essential premise was that “deliciousness” is the ultimate differentiator if you are in the food business. That’s certainly a concept I can get behind, and I don’t think it has to be limited to expensive gourmet meals - I think that real ingredients used in imaginative cooking can help people in the food business stand apart. These days, the lowest common denominator shouldn’t be a goal … it should be a label to be avoided at all costs, because it is the opposite of being an achievement.

    Even better than Barber was someone I’ve never heard of before - and that’s my bad. Robyn O’Brien is a financial analyst turned food evangelist, and she told a compelling story about how she evolved from being a working mom who didn’t think much about food - she said he’d feed her kids artificial waffles for breakfast and was highly capable of burning scrambled eggs - to someone with a serious agenda to change the way we think about the products we consume.

    Her transformation came when one of her children developed a serious food allergy that could’ve been life threatening, which prompted her to start researching the additives and GMOs in many foods. Now, I’m not going to tell her stories word-for-word - you can learn more about her here, and see a version of her speech here. But I will offer one telling note from Robyn O’Brien’s story - she is clear that “correlation is not causality,” and that not nearly enough research has been done to prove that the growing use of additives and GMOs in food is responsible for the growing number of food allergies, especially in children.

    But, she says, this means that as a matter of smart public policy we need to do that research, and that in the meantime, ought practice what she called “radical transparency.” When she said that, I knew she was playing my song - I’ve long argued here that retailers and suppliers ought to be as transparent as possible about the products they sell and the ingredients in those products (not to mention where they come from and how they are made and by whom) as a matter of good business, that it is not to be afraid of.

    One of the powerful things about O’Brien’s approach is that she brought a financial analyst’s attitude and acumen to a very different subject, the result being a critically important message that needs to be heard.

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

    KC's View:

    Published on: July 25, 2019

    by Kevin Coupe

    This story from Variety is, I think, a good example of how fast-evolving business realities can force companies to get outside their traditional lanes as they seek greater - or just sustained - relevance.

    It has to do with AT&T, which has just acquired the parent company of HBO, and now is launching a new streaming entity called HBO Max.

    Essentially, AT&T wanted WarnerMedia - which owned HBO - so that it would have content that it could supply to its customers on its service via its various devices. As part of that effort, the company has bee marshaling various properties - like the TV series “Friends” - and taking it off competitive services so it can be seen on HBO Max.

    But that’s not enough, and so AT&T CEO Randall Stephenson now is saying that the HBO Max streaming service “will eventually include live sports and news programming,” shows that ordinarily are seen on mainstream broadcast networks … though streaming services like Amazon Prime have been making plays for sporting events as a way of driving up their viewership and membership.

    According to the story, “Stephenson cited WarnerMedia’s existing relationships with Major League Baseball, the NBA and NCAA men’s basketball tournament but it was unclear if he was indicating that HBO Max would seek to acquire streaming rights from those leagues.”

    I find in all this an Eye-Opening metaphor for what retailers, faced with greater competition than ever, need to be doing these days.

    You look for every possible advantage, every possible strength, every available differentiator, and you exploit them in every possible way. You offer products and services that strengthen your connection to the shopper, that whenever possible create barriers to the shopper looking elsewhere. You develop a narrative that will resonate with your customers, and you actually use available and actionable data.

    You do all these things. And then you do them again. And again. And again.
    KC's View:

    Published on: July 25, 2019

    The Washington Post reports that Treasury Secretary Steven Mnuchin, in the wake of an announcement that the US Department of Justice will conduct an antitrust probe in tech giants, said that it is a good idea because one of those companies, Amazon, has “destroyed the retail industry.”

    Mnuchin told CNBC, “I think if you look at Amazon, although there are certain benefits to it, they’ve destroyed the retail industry across the United States, so there’s no question they’ve limited competition. There’s areas where they’ve really hurt small businesses.”

    Asked if Amazon’s dominance is any different from Walmart’s, Mnuchin said, “In a way it’s the same, and in a way it’s different. People had those concerns about Walmart. As you see, Walmart developed a business where small businesses could continue to compete with them. And, look, Walmart ceded a lot of the retail business to Amazon.”

    Amazon’s initial defense has been that its “retail revenue makes up less than 4 percent of U.S. retail sales and less than 1 percent globally,” the story says, and that in fact “independent sellers make up more than 58 percent of physical gross merchandise sales on Amazon.”
    KC's View:
    What a load of crap.

    Look, if regulators and legislators want to examine tech giants’ use of data to see if they have an unfair advantage or are able to use that information in ways that are not in consumers’ best interests, I’m fine with that. I’m in favor of healthy and nuanced oversight. But Mnuchin’s rationale about how Walmart was less impactful on competitive retailers than Amazon, and how Amazon has “destroyed” retail, strikes me as utter nonsense.

    Many retailers suffering because of Amazon - and Walmart - have committed suicide. It isn’t homicide. Not by a long shot.

    Does Amazon have an unfair advantage over many retailers? Sure it does - because it has been more innovative, disruptive, insightful and in touch with what consumers needed and wanted even before those shoppers knew what they needed and wanted. Walmart had similar advantages just a few years ago, because it was able to identify weaknesses in traditional retail and then exploited them.

    That’s what insurgent retailers do. But what Mnuchin doesn’t understand is that this still leaves room for competitive retailers to find ways to come at the market with their own unique expertise and offerings. But they have to do it. They have to compete. They don’t get to just complain about how unfair the world is and how the government ought to regulate their competition out of their earned advantages.

    Ironically, as the Post reports, Mnuchin does have some experience with retail: He “is one of several former board members being sued by Sears Holding Corp. for allegedly stripping the retailer of billions of dollars as it spiraled into bankruptcy. Sears, the more-than-a-century-old American icon, filed for bankruptcy last year after years of mounting losses during private equity ownership.”

    Oh yeah. This is the guy we want protecting the interests of “small businesses” - someone who was in cahoots with Eddie Lampert, who has done almost nothing to create value at Sears during his ownership and management of the company.

    Give me a break.

    Published on: July 25, 2019

    Wakefern has announced its decision to open a 24,300-square-foot micro fulfillment center in Clifton, New Jersey, which will be designed to serve online customers of fewer than a dozen ShopRite stores operated by member Inserra Supermarkets.

    The mini-warehouses will fulfill both pickup and delivery orders, and are said to be able to robotically assemble orders of 60 SKUs or fewer in a matter of minutes.

    The fulfillment center is powered by Takeoff Technologies, which partnered with Wakefern for the project.

    "We are excited to partner with Takeoff Technologies to see how their hyperlocal automation technology will benefit our cooperative, retail members, and shoppers," said Steve P. Henig, Wakefern's Vice President of Digital Commerce & Analytics, in a prepared statement. "We are really proud of our e-Grocery shopping platform, ShopRite from Home, and believe this partnership will enhance our online shopping service.”

    The goal, according to both companies, to open additional micro fulfillment centers, designed to serve high-density urban and suburban neighborhoods, in the future.
    KC's View:
    This is how you compete. You find ways to exploit your local connections, to take advantage of proximity and speed up your operations in a way that gives you a differential advantage.

    This is one of the things I love about Wakefern and its retailers. They do the hard work, they play all the angles available to them, and they see a few angles that nobody else does. No whining. Just hardball competition.

    Published on: July 25, 2019

    Bloomberg has a story about how, while Kroger “has unleashed a flurry of initiatives to ensure it won’t get thumped in a post-Amazon-buying-Whole-Foods world,” almost certainly its biggest gamble “is a partnership with British online grocer Ocado,” with which it plans “to build as many as 20 automated grocery warehouses in the U.S. to help Kroger turbocharge its e-commerce operation.”

    The story argues that it seems like a good bet: “Ocado has focused specifically on digital grocery shopping for its entire corporate life, and it shows. At its newest online grocery fulfillment center outside London, 1,000 robots zoom around a grid at a speed of four meters (13 feet) per second, extending a gripper to pick up and transport bins of groceries. The system strips out labor costs and enables human workers to pack about 600 items per hour. Every aspect of the fulfillment process is designed for the unique quirks of grocery, including systems that cue workers about what items in a given order they should put in a single grocery bag … There is a real benefit to specializing in solving the grocery conundrum, as Ocado has done. The company’s sales increased 12% last year to 1.6 billion pounds ($2 billion), according to its annual report, and its active customer count increased 11 percent from the previous year.”
    KC's View:
    The Bloomberg story and analysis argues that Kroger’s biggest problem may be time - it will take years to get all these distribution centers online and up to speed. The competition isn’t waiting to allow Kroger to catch up … they’ve got their own momentum.

    Tick tock.

    Published on: July 25, 2019

    Albertsons yesterday announced that its first quarter digital and e-commerce sales grew 33 percent, even as its same-store sales for the period were up just 1.5 percent.

    The company said that its Q1 net income of $49.0 million compared to a net loss of $17.7 million during the same period a year ago.

    Sales and other revenue increased 0.5 percent to $18.74 billion during the quarter, compared to $18.65 billion a year ago.

    In a prepared statement, Vivek Sankaran, Albertsons’ president/CEO, said, "I am pleased with the position of our business at Albertsons Companies … We are focused on our sales momentum and will continue to elevate the end-to-end customer experience as we work to create a next-generation food retailer. We recognize the ever-changing retail consumer and are working swiftly to adapt our business to allow customers to shop with us whenever, wherever and however they want."
    KC's View:

    Published on: July 25, 2019

    Fast Company has an interesting piece charting a significant change in attitudes toward something that has long been a part of our lives - plastics.

    An excerpt:

    “We’re drowning in plastic. Literally. By 2050, scientists predict that there will be more plastic than fish in the world’s oceans. And since plastic does not biodegrade, it will remain in our landfills and oceans for at least 500 years.

    “Step into your kitchen, and you’ll get a sense of how we ended up here. The majority of food products you bring home from the grocery store, from produce to condiments, meats to beverages, are wrapped in plastic … The good news is that consumers are increasingly aware of their plastic consumption and eager to move to more sustainable alternatives. European countries—and some American cities—are beginning to impose bans on single-use plastics, and many companies are scrambling to provide effective and convenient alternatives to plastics.”

    And so, Fast Company offers a sense of the alternatives to plastic that are available to consumers (and that, by implication, savvy retailers may want to start integrating into their strategies and tactics).

    You can read the story here.
    KC's View:

    Published on: July 25, 2019

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

    Reuters reports that Bed Bath & Beyond is cutting seven percent of its corporate staff, including its COO, Eugene Castagna, “following a review of office costs … The layoffs include vice presidents, directors and managers at its headquarters in Union, New Jersey, and at other select locations, the company said.”

    The retailer has been suffering through years of declining sales and profits.

    Wow. Some companies eliminate some administrative assistants, and maybe cut back on travel expenses. These folks seem serious … which is appropriate, since Bed Bath & Beyond is in serious trouble with very little about its stores to draw in and captivate customers.

    CNN reports that Jollibee, described as the Philippines' largest fast food chain, is acquiring California-based Coffee Bean & Tea Leaf, which has nearly 1,200 stores across more than 25 countries. According to the story, “Jollibee said the total value of the Coffee Bean & Tea Leaf deal will be $350 million.”
    KC's View:

    Published on: July 25, 2019

    • Rutger Hauer, the Dutch actor who was perhaps most memorable as the outlaw replicant that faces off against Harrison Ford’s Rick Deckard in the original, classic Blade Runner (1982), has passed away at age 75.

    Other films and television shows on the prolific Hauer’s resume included Soldier of Orange, Spetters, Nighthawks, Buffy the Vampire Slayer, Sin City, Batman Begins, The Hitcher, “True Blood,” and “Inside the Third Reich.”
    KC's View:

    Published on: July 25, 2019

    In this new Retail Tomorrow podcast, recorded at GMDC’s annual GM conference in Denver, we focus on the ways in which startups are working to disintermediate traditional retailers … how retailers can turn these innovations to their own advantage … why cultural resistance within companies can be the ultimate enemy of progress … and even brainstorm about a business model that could’ve made Toys R Us relevant again.

    You can listen to the Retail Tomorrow podcast here, or on iTunes or GooglePlay.

    The Retail Tomorrow podcast series is a production of GMDC, the Global Market Development Center.

    Our guests:

    • Patrick Fore, CEO and co-founder of Fleat.

    • Sterling Hawkins, co-founder of the Center for Advancing Retail & Technology (CART).

    The host: Kevin Coupe, MorningNewsBeat’s “ContentGuy.”

    Pictured, left to right: Patrick Fore, Kevin Coupe, Sterling Hawkins

    KC's View:

    Published on: July 25, 2019

    I’ve gotten some 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 … let's get together Thursday night, August 8, 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.

    Once again, I’m thrilled that our get-together will be sponsored by Portland State University’s Center for Retail Leadership.

    Put it on your calendar.
    KC's View:

    Published on: July 25, 2019

    Yesterday we had a story about Larry Ely Murillo-Moncada, a 25-year-old employee at a No Frills Supermarket in the Council Bluffs, Iowa, market, who disappeared on November 28, 2009. This week, almost a decade after he vanished, Murillo-Moncada’s body was found - behinds the coolers of the supermarket where he worked. The store had been closed since 2016, and the decaying body was found when workers came in to dismantle the long-abandoned equipment.

    Our headline:

    A Cold Case Reaches Its Expiration Date

    Which prompted one MNB reader to write:

    I think your headline was very cruel in regards to a tragic situation. You don’t always have to make a joke.

    Point taken. You may be right on both counts.

    We’ve had an ongoing exchange about the minimum wage on MNB over the past few days, leading one MNB reader - who has been disagreeing with me on the issue - to write:

    Just wanted to let you know how much I appreciate your open forum. Not every site would so openly show opposing or different views. There are so many perspectives to the issues of our time, being able to air them out is refreshing.

    I had the opportunity to spend over thirty years in the supermarket business and now close to ten in the fresh produce supply side. I thought all those years buying, merchandising, and marketing fresh produce taught me quite a bit about how the grower side works. But…It’s what you don’t know that you don’t know that is always surprising, and I’ve had my eyes opened more than once in the last ten years.

    We’re located in the central valley of CA. where most all of the tree fruit, grapes and nuts are grown. On day’s like today where the temperature will get up to 107, field crews will stop work by 10:00 AM. maybe a bit later, but before the real heat of the day sets in, which oddly enough peaks around 6:00 PM here. As you can imagine, farm labor like everything else, is highly regulated in CA. so you should feel good that there is no dawn to dusk work going on as far as field work goes. Grapes are about the only commodity that is still actually packed in the field, all the tree fruit is packed into bins, or buckets, etc. then shipped to a packing facility where the folks packing the fruit work in 8 hour shifts in indoor facilities that more often than not are air conditioned.

    Now, I’m talking trees and vines, I can’t really speak in detail about row crops like all the veggies and berries grown mostly in the temperate climate of the coastal areas, but my observations are that the harvest of those commodities is becoming more and more mechanized than just a few years ago.  The work is what the work is, no different than working on an assembly line somewhere, but the folks that harvest the crops aren’t being forced to work and they surely are not oppressed, I think that oppression is what they’ve escaped if they’ve found their way here.

    I’ve always felt there is no point in doing this if I don’t give space (and credence) to people with different opinions than mine.
    KC's View: