business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: October 1, 2019

    by Michael Sansolo

    How older people are portrayed in advertising may be an issue ticking off the AARP (for some good and obvious reasons) but it’s a topic that businesses cannot avoid. If they think they can, they are delusional.

    Here’s two simple reasons: First, we’re all getting older and secondly, that means some drastic demographic shifts are coming our way. The US Census bureau says nearly 15 percent of the population was 65 or older as of July 1, 2015. By the year 2060 the percentage rises to one-fourth, meaning nearly in that year nearly 100 million Americans will officially be senior citizens and nearly 20 million will top 85.

    Keep in mind that we are now closer to 2060 than we are to 1978, which really doesn’t feel all that long ago (though my hair would disagree). Or to make this more immediate, 10,000 Boomers turn 65 every day!

    These massive changes are only going to accelerate. In a world where 25 percent of shoppers are senior citizens or where a massive population cohort reaches age 65 daily, we need think about exactly how accessible our stores and how on target our products are for a massive shopper cohort.

    For countless reasons, I’m lucky to still have my parents around and every shopping trip with them brings insights. I see them struggle with the entire experience from the busy parking lot to the self-service checkouts. They find the small font sizes used for prices and ingredients to be an endless frustration, along with the abundance of package sizes that are far too large for their purposes. Or I watch them tire of the endless walks up and down aisles.

    It’s not hard to project forward a decade and imagine those hoards of retired boomers turning to delivery services simply so they don’t have to lug half-gallons of milk, laundry soap or heavy pet food home. A decade from now, concierge services that include shopping and then loading my pantry may seem a whole lot more attractive to me.

    Which brings me back to the story that launched this conversation - how older people are portrayed in advertising, if at all.

    We are a generation that still finds Bruce Springsteen pretty cool even if he may need multiple tries to blow out all 70 candles on his birthday cake. (Actually, Springsteen is so cool that he probably just has to look at the candles to extinguish them.) Painting all older people with a broad brush is as misguided as any other generalization. Keep in mind that Bill Gates is in his mid-60s and Jeff Bezos his mid-50s. I’ve got a feeling at least one of them is really up on new technologies.

    There’s a simple way to fight back.

    Diversity on our teams is more essential than ever. We need those diverse voices to help us better understand the vastly different needs, wants and backgrounds of our shoppers these days. If our executive teams resemble the cast of "Mad Men," change is way overdue - but not just to bring on young people, as important as that is. Diversity by gender, race, ethnicity and age can help steer us away from endless problems and possibly open our eyes to new opportunities for sales, profits and customer satisfaction.

    At a minimum, that internal diversity could help us avoid needless mistakes that bring us ridicule in social media circles by, I don’t know, painting all older people as inept when it comes to technology.

    As always there’s a movie to help you understand the power of age diversity. Check out how Dame Judi Dench’s character schools a team of telemarketers in The Best Exotic Marigold Hotel … though it is entirely possible that Dame Judi can be as fearsome as The Boss.

    Older can be wiser. I know this, because the image in my mirror tells me so daily.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

    KC's View:

    Published on: October 1, 2019

    by Kevin Coupe

    From the moment I met her, I really liked Frieda Rapoport Caplan … she's just so interesting, and fun to hang out with, and loaded with great stories, and amazingly inquisitive, and incredibly impressive because in 1962 she started her own specialty produce distributor and marketer, and today, at age 96, she's still extraordinarily focused on the business.

    That's a long sentence. Fifty-seven words, to be precise. But is somehow seems appropriate to talk about Frieda in a way that a) makes me breathless, and b) emphasizes how much she's done and continues to do.

    I bring this up because it pleases me enormously to see that the Washington Post has a story about Frieda, and the eponymous company she started, and the succeeding two generations of family members that now run it.

    This story is familiar to some, I know, but worth pointing out to people who may not know about Frieda's. (Here's all you really need to know. She was the first person to bring kiwifruit to the US. Really.)

    It is an Eye-Opener, and you can and should read it here.
    KC's View:

    Published on: October 1, 2019

    The New York Times reports on a new study published in the Annals of Internal Medicine and conducted by "an international collaboration of researchers," suggesting that concerns about the consumption of red meat and processed meat may be much ado about nothing.

    That's right. After years of being told to cut back on red meat consumption "because of concerns that these foods are linked to heart disease, cancer and other ills," the public now is being told that "the advantages are so faint that they can be discerned only when looking at large populations … and are not sufficient to tell individuals to change their meat-eating habits."

    According to the story, "The new reports are based on three years of work by a group of 14 researchers in seven countries … The investigators reported no conflicts of interest and did the studies without outside funding … The new analyses are among the largest such evaluations ever attempted and may influence future dietary recommendations. In many ways, they raise uncomfortable questions about dietary advice and nutritional research, and what sort of standards these studies should be held to."

    "Uncomfortable questions" may be an understatement.

    The Times reports that the new conclusions "have been met with fierce criticism by public health researchers. The American Heart Association, the American Cancer Society, the Harvard T.H. Chan School of Public Health and other groups have savaged the findings and the journal that published them.

    "Some called for the journal’s editors to delay publication altogether. In a statement, scientists at Harvard warned that the conclusions 'harm the credibility of nutrition science and erode public trust in scientific research'."

    And, the red meat debate is only partially about nutrition: "The prospect of a renewed appetite for red meat also runs counter to two other important trends: a growing awareness of the environmental degradation caused by livestock production, and longstanding concern about the welfare of animals employed in industrial farming … Questions of personal health do not even begin to address the environmental degradation caused worldwide by intensive meat production. Meat and dairy are big contributors to climate change, with livestock production accounting for about 14.5 percent of the greenhouse gases that humans emit worldwide each year."
    KC's View:
    While I'm sure some consumers may be alternately confused and delighted by this new study, in some ways researchers seem equally perplexed … not so much by the data, but by the diametrically opposed conclusions.

    As best I can understand it all - and you can add nutritional research and data analysis to the long list of subjects about which I am far less than expert - much of this comes down to the difference between statistical research and observational research; the latter is easier to do than the former, but may be less scientifically conclusive.

    In the end, consumers will make the best decisions they can based on the available and understandable data, or they'll make the decisions they want to make, not because of data but because they are the decisions they want to make. (Or they'll choose only to pay attention to the data that supports their own biases.)

    I know what I'm going to do. Occasionally eat steak or hamburgers or pork or chicken, eat seafood several times a week, and try to eat more fresh produce whenever I can. It just seems sensible, and I feel better when I eat that way. Plus wine, of course. Add in jogging 20 miles a week (four miles, five times a week), and maybe I'll live a long time. And maybe I'll get hit by a bus, but I'll have done what I can to be both happy and healthy.

    Published on: October 1, 2019

    CNBC reports that Amazon is negotiating with a variety of players to bring its Amazon Go checkout-free technology to other retailers, such as movie theaters, sports venues and airport shops, a move that "would help Amazon grow its retail presence so the company can lower its reliance on online shopping, but at a faster pace and at lower cost than building its own stores."

    At the same time, the story says, such an effort "might help Amazon form bonds with companies that would ordinarily consider Amazon the competition. That type of collaboration could lead to further growth of Amazon’s cloud business.

    The CNBC story says that "the idea is to start installing the technology working for customers in the first quarter of 2020 and have hundreds of these stores working by the end of 2020, two of the people said. One person said Amazon hopes to have the upgrade process take just two weeks.

    "Amazon has explored different business models for its third-party Go strategy. The company looked at asking for a percentage of sales from the goods people purchase through the Go-equipped stores, or charging retailers up-front and then taking a monthly fee, two people said. It’s not clear if the Amazon brand name will be visible on the Go hardware or which app customers would use to sign in."

    There are currently 16 Amazon Go stores in markets that include Seattle, San Francisco, Chicago and New York.
    KC's View:
    There occasionally have been stories in recent days suggesting that Amazon Go is not really a success story because there only are 16 of them and Amazon wanted more by this point, but my response to that is that Amazon actually has 16 of them. Not aware of anyone else actually operating that many checkout-free stores at this technological level. Lots of talk, lots of tests, but that's about it.

    This is an interesting idea. From the moment Amazon Go debuted, the question was whether it would keep the technology for itself or license it out. In this case, the retail experiences that it would be partnering with seem to be only those with which Amazon does not compete directly, and so this could be both smart and transformative in terms of scale.

    Published on: October 1, 2019

    The Auburn Citizen reports that Sen. Kirsten Gillibrand (D-New York), has asked the US Department of Agriculture (USDA) to conduct an inquiry into whether fruit and vegetable farmers "are receiving fair market prices for their crops."

    In her letter to Agriculture Secretary Sonny Perdue, Gillibrand pointed out that such a federal inquiry has not been conducted in almost three decades, during which there "have been significant changes to agriculture." Gillibrand argued that "the prices paid to wholesalers for selling crops to grocery stores have increased at a higher rate than the prices paid to farmers," and that attention needs to be paid.

    The Citizen writes that "the latest Census of Agriculture, which is conducted every five years, found New York lost 11,000 acres of vegetable farms from 2012 to 2017."

    Gillibrand wrote, "Losing more farmers is not an option. We cannot stand by and do nothing as our produce farmers are being hurt." 

    The Citizen notes that "crops account for 39% of New York's agricultural sales. The market value of the state's fruits, tree nuts and berries ranks seventh in the country. The state ranks 12th in sales of vegetables, melons, potatoes and sweet potatoes."

    Tom Stenzel, president/CEO of the United Fresh Produce Association, released a statement responding to Gillibrand's request.

    “The fresh produce industry operates on extremely tight margins, at every stage from grower to wholesaler to retailer," he said. "Our industry is the ultimate supply-and-demand economy, and our real goal must be to increase demand for fresh fruits and vegetables. That’s the key to raising prices paid to farmers, allowing reinvestment for growth. Transparency in any supply chain is a good thing, and we always welcome USDA’s analysis of our markets. It’s important for each sector in our supply chain not to lose sight of our goal to grow fresh produce consumption, while fighting with one another over whose share of a dwindling pie is bigger.”
    KC's View:
    Not to be overly cynical about this, but I would note that Gillibrand has just ended her campaign for the 2020 Democratic presidential nomination, so this may fall into the category of tending to the folks back home. (She's not up for re-election until 2024, so she has some time.) There's nothing wrong with tending to local politics … in fact, calling attention to this issue almost certainly is a result of her constituents making her aware of their concerns.

    One thing not to lose sight of is that the loss of some farms is almost a certainly because of climate change. Inevitably, ground that used to be fertile is going to be less so, and all of the inquiries in the world by USDA won't change that.

    Published on: October 1, 2019

    Bloomberg Law reports that the US District Court in Arizona has ruled that Amazon is not responsible - at least in one specific case - for problems with products that are sold by third party vendors on its Marketplace site.

    The case concerned two hoverboards made by a company called Super Engine and sold on Amazon; the person who bought them then sold the boards to someone else, and when that person was charging the hoverboards, they caught fire and caused some significant home damage.

    The insurance company in the case sued Amazon, saying that it was responsible under Arizona law.

    However, the judge in the case ruled that "Amazon didn’t participate significantly in the stream of commerce that delivered the hoverboards to the consumer … Despite bearing some responsibility for third-party vendors’ products during transit, Amazon provides no warranty for them, doesn’t have a meaningful ability to inspect them for defects, doesn’t take title to them, derives only slight economic benefit from transactions involving them, exerts only indirect pressure on product design or manufacturing processes, and doesn’t foster significant consumer reliance by facilitating the transactions."
    KC's View:
    Seems pretty cut and dried to me. And, upon reflection, fair.

    But … I do think that Amazon (and other retailers) should not be complacent about this. It is critical, I believe, for retailers to take on even more responsibility than the courts would insist on, since that may be what their customers expect. In the end, customers are more more important than the courts when it comes to such things. Retailers need to be sure, as best they can, that the products they sell are what they say they are, made of the ingredients listed on the label, and made where the label says they were made.

    Published on: October 1, 2019

    The Wall Street Journal has an excellent story about how PetSmart, which just a few years ago found its sales eroding, identified e-commerce company Chewy as being at least part of the problem - and then bought the online retailer for $3.35 billion.

    While the deal was criticized in many quarters (though not in MNB … we saw the opportunities as well as the challenges), it has worked out: "These days, Chewy is worth about $11 billion, and PetSmart is shaping up to be one of the most successful private-equity turnarounds in history. Chewy went public in June, and its shares have climbed nearly 20% since then in what has been a busy year for initial public offerings and despite the recent tumult in the IPO market. PetSmart’s roughly $10 billion paper gain on Chewy’s first day of trading is one of the largest ever from a private-equity-backed IPO. Its bonds are back near par thanks in part to $826 million of debt reduction fueled by proceeds from the share sale."

    One of the keys to making it work: superior customer service.

    You can read the entire story here.
    KC's View:
    I don't think it is an accident that high levels of customer service were critical to making the deal work, since it also is a relentless focus on the customer that ultimately is Amazon's secret sauce. E-commerce isn't just an alternative way to sell stuff … it is an opportunity, because the data is both plentiful and specific, for retailers to gather far more actionable information about their shoppers … and then actually act on it.

    Published on: October 1, 2019

    Bloomberg reports that Amazon and other big tech companies are facing yet another Congressional probe, as Rep. Nydia Velazquez (N-New York), chairwoman of the House Small Business Committee, plans to invite representatives from Amazon, Google and Facebook "to face questions from her committee on how the companies may be damaging the competitive landscape for small businesses."

    In the hearing, the story says, "Velazquez plans to home in on issues small businesses face when trying to compete with or promote themselves on the companies’ platforms. That’s a central issue in congressional and federal investigations of Amazon, whose online market is used by thousands of third-party sellers to reach customers. The inquiry could give ammunition to critics who complain that big internet platforms are abusing their dominance to harm competition."

    Bloomberg notes that the hearing "would be the latest front in the government’s probe of the companies that already face investigations from the House Antitrust Subcommittee, the Federal Trade Commission and the Justice Department."
    KC's View:

    Published on: October 1, 2019

    • The New York Times reports that "Walgreens, Rite Aid and CVS have moved to stop selling the heartburn medicine Zantac and its generic versions after the Food and Drug Administration warned this month that it had detected low levels of a cancer-causing chemical in samples of the drug," with the moves affecting both branded and private label versions.

    There has been no official recall of the drug. However, the US Food and Drug Administration (FDA) says that "it is investigating the source of the contamination as well as the risk to patients, recommending that they talk to their doctors and that those who take over-the-counter versions consider switching to a different medication."

    • National Public Radio (NPR) reports that the United Food and Commercial Workers (UFCW) Local 555 has reached a tentative deal with grocers in the Pacific Northwest, ending a weeklong boycott of Kroger-owned Fred Meyer.

    According to the story, "While details of the contract remain unclear, the dispute centered in part on wages. The union also said it had discovered a gender pay gap at Portland-area Fred Meyer stores that should be addressed.

    "In a statement, Fred Meyer director of corporate affairs Jeffery Temple said the business was glad to have a tentative agreement that 'secures increased wages, continued premium health care coverage and pension stability'."

    • Kroger has announced that it soon will open a new Kitchen 1883 restaurant across from its store in Anderson Township, Ohio. It will be the company's third.

    The first was in in Union, Kentucky, and opened in 2017; the second was in Kroger's new food hall, just opened recently in Cincinnati.

    • The News & Observer reports that when Wegmans opened its first North Carolina store - and its 100th store overall - on Sunday, some 3,000 people waited on line for the doors to be unlocked, further cementing the retailer's reputation for having a cult-like following obsessed with its approach to food retailing.

    According to the report, Wegmans "said the line broke the company's store-opening record. The Raleigh store is the first of five that are expected in the Triangle, with two also coming to Cary, one to Wake Forest and one to Chapel Hill."
    KC's View:

    Published on: October 1, 2019

    MNB yesterday took note of a CNBC report that "General Motors is partnering with Amazon to enable the tech company’s Alexa voice assistant in millions of its vehicles … the popular voice technology will be available on model year 2018 and newer Buick, Cadillac, Chevrolet and GMC vehicles with compatible infotainment systems in the first half of next year."

    MNB reader Howard Schneider responded:

    …and another way for Amazon acquire more data on where and how you drive, where you work, shop, eat and relax.

    And, from MNB reader Monte Stowell:

    Great idea GM and Amazon getting together to add Alexa into my car next year. I do have a 2019 Impala that will be ready for me to use Alexa. I also have subscribed to Sirius XM radio. Assuming I will be able to have access to Amazons music, I will be discontinuing Sirius XM. “Another Bites the Dust.”

    Excellent point.

    On another subject, MNB reader Tim Heyman:

    Malls in America are dying no doubt, and it’s typical throughout the USA as of the county, in PA, that I grew up in outside of Pittsburgh.

    In Beaver County there are 3 Walmart’s that combined, probably do in excess of 5 million in sales weekly.

    If this amount of consumer spending was done at the Mall(s), they would be thriving. Amazon is a factor, sure but look at the big “W” for the demise of retail and the middle class in America.

    The Poughkeepsie Journal yesterday had a story about the Applestone Meat Company there, which "has created a whole new way of shopping for freshly butchered local meat, with high-end, gleaming-clean retail shops that are open 24/7. They offer serve-yourself vending machines stocked with vacuum-sealed packages of everything from Porterhouse steaks, short ribs and rack of lamb to hamburger meat and homemade sausages … You just swipe your credit card, push a button, slide open the door and retrieve your sustainably raised meat selection. Fire up the grill at home and you’re good to go."


    MNB reader Jeff Lenard wrote:

    Nice story today on the new vending machines.

    I was born in Poughkeepsie, grew up in Poughkeepsie and still have family there and will visit that place over the next month and send back a report.

    It’s certainly an interesting concept for how to differentiate from the dominant player there, Adams, which is a bit like Wegmans and Stew Leonard’s combined.

    Also, from my sister in Kingston:

    Other farms in our area do the same thing. Similar process for dairy and raw milk. There are 24-hour fridges in little trailers by the side of the road.

    And from MNB reader Janis Raye, who live sin Vermont:

    I can go you one better… I buy organic beef, pork, and lamb from a farm near us that has all their meat in a building on the farm, in freezers (their “Farm Store”). You go in and pick out what you want, total up your purchases, and leave the money in a box. Totally self-service and no one is there to watch. I’ve asked them if theft is a problem — there are tens of thousands of dollars worth of meat there all the time — and they say it isn’t. “I guess we should install a camera…” they say. One of the many reasons I love living here! (Of course, it hasn’t started snowing yet…)

    One other thing. When I posted the butcher story on MNB yesterday, I added the headline, How Do You Pick Your Meat In Poughkeepsie? and wondered how many readers would get the movie reference.

    Lots of you did, and quickly.

    The headline paraphrased a line from The French Connection (1971), which Gene Hackman, as New York detective Jimmy "Popeye" Doyle, looks to throw an interrogation subject off stride by constantly asking him, "Did you ever pick your feet in Poughkeepsie?"

    You all make me proud.
    KC's View:

    Published on: October 1, 2019

    In Monday Night Football, the Pittsburgh Steelers defeated the Cincinnati Bengals 27-3.
    KC's View:

    Published on: October 1, 2019

    Yesterday's MNB Sports Desk recap of the Major League Baseball playoff teams, because of an editing error (which I can't blame on anyone but myself) accidentally had the Washington Nationals playing the Milwaukee Brewers in the American League wild card game, and the Tampa Bay Rays playing the Oakland Athletics in the National League wild card game … when, in fact, it is the other way around.

    Mea culpa, mea culpa, mea maxima culpa.
    KC's View:

    Published on: October 1, 2019

    The Retail Tomorrow podcast goes to GroceryShop 2019 in Las Vegas for an in-depth discussion of not just the strategies and tactics preoccupying many of the attendees, but the motivations behind the decisions they are making with regard to brand identity and technology.

    There were some three thousand attendees at GroceryShop this year, from about a thousand companies and 30 countries, all looking for a competitive edge found in innovative technologies, disruptive business models and provocative insights. Sifting through the presentations and exhibits for Retail Tomorrow, looking for nuggets of wisdom that have the potential to animate and differentiate a retailer, are:

    • Lisa Sedlar, CEO, Green Zebra Grocery.
    • Scott Moses, Managing Director at PJ Solomon.
    • Bob Perry, Director of Business Development, NBC Universal
    • Tom Furphy, CEO/Managing Director, Consumer Equity Partners.

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

    You can listen to the podcast here, as well as on iTunes and GooglePlay.

    This edition of the Retail Tomorrow podcast is brought to you by the Global Market Development Center (GMDC), connecting people & companies to opportunities for growth.

    Pictured, below: Lisa Sedlar, Scott Moses, Tom Furphy, Bob Perry

    KC's View: