business news in context, analysis with attitude

Published on: October 11, 2019

by Kevin Coupe

Bloomberg reports that TV chef Rachael Ray is opening her first restaurant - a virtual establishment that will operate in 13 cities through the end of the year, powered via a partnership with Uber Eats.

"There will be no brick and mortar Rachael Ray to Gos," the story says, but rather will be ":a network of independent, delivery-only kitchens (that) will prepare the meals. If you want her pulled buffalo chicken chili with ranch, you have to order it via Uber Eats."

Expect Ray to promote the enterprise on her daytime TV show at the same time as she promotes a new cookbook that is coming out. It is a way for her to enter the restaurant business in a relatively unconventional way after a career built on cookbooks and TV shows.

"The Rachael Ray to Go menu will include around 11 options, many of which are in her cookbook, including the pulled buffalo chicken chili with blue cheese ranch, one of Ray’s most downloaded recipes. Also on the menu: a dozen spiced fried chicken drummettes, jalapeño popper grits and tagliatelle with Bolognese." the menu will be available via mobile app to customers in New York, Los Angeles, Baltimore, Austin, Dallas, Houston, Minneapolis, Portland, Seattle, Miami, Fort Lauderdale, Chattanooga and Toronto.

And, Bloomberg writes, "Rachael Ray to Go also marks an unconventional path for Uber Eats in the increasingly crowded, and profitable, online food delivery market: Tapping notable food professionals who don’t have restaurant spaces to create dishes for delivery, from restaurateurs to authors, like say, Chrissie Teigen.

"Online food delivery is projected to be worth $161.7 billion globally by 2023. Uber Eats generated $3.39 billion in gross bookings in the second quarter of 2019, up 91% from the second quarter of 2018. The company’s first virtual restaurants opened in Chicago in early 2017; they now have more than 5,500 globally and over 2,100 in the U.S. and Canada. But they’re not the biggest players: in August 2019, Door Dash represented 36 percent of meal deliveries in the U.S.; Uber Eats stood at 15 percent."

What strikes me as the Eye-Opener here is how it illustrates how easily - and "easily," I grant you, is a relative term - new competitors can get into the food space. Companies don't have to invest in the traditional infrastructures in order to launch a business. In this case, Uber is providing the delivery mechanism and Ray is providing the recipes and the brand - she's not actually going to be in these kitchens making the food.

The competitive landscape has the potential to be changed significantly by concepts like ghost kitchens or dark stores, which can bring new energy to their spaces and new danger to traditional businesses. Attention must be paid.

Published on: October 11, 2019

Walmart announced yesterday that John Furner, who has been running its Sam's Club division, will step up to be CEO of Walmart US.

He succeeds Greg Foran, who is leaving the company to become CEO of Air New Zealand Ltd.

The Wall Street Journal provides the following context:

"Mr. Foran, 58, took over Walmart’s biggest division in 2014 and led a turnaround in the U.S. by pulling back on new-store openings and investing to improve existing stores.

"Mr. Foran is known as a demanding, detail-oriented boss who worked long hours and often took other executives with him on a company plane on Saturdays to visit stores. He has focused on reducing the inventory in stores and more consistently stocking shelves to boost sales, improving customer service, as well as cutting spending on store labor to invest in such new projects as online grocery delivery.

"He clashed with the head of Walmart’s U.S. e-commerce operations, Marc Lore, over spending and strategy, according to people familiar with the matter. Mr. Foran didn’t return a request for comment. Mr. Lore declined to comment."

And, there's this information: "Like Walmart CEO Doug McMillon, Mr. Furner is a Walmart veteran who joined the company as an hourly store worker and worked his way up the ranks. Mr. Furner’s father was a Walmart executive and still works part time at a Walmart store near the company’s Bentonville, Ark., headquarters."

In a statement, Walmart CEO Doug McMillon said: "Greg Foran has made a huge difference for Walmart, and we are grateful. He built a strong plan from the beginning to strengthen the U.S. business – a plan that made significant choices around investing in wages and benefits for associates and investing in price for customers. Greg’s ability to innovate, whether it’s making our stores a competitive advantage in an omnichannel environment or equipping associates with next generation technology and training, has helped position us for the future. The results have been impressive – every quarter he led Walmart U.S. it has had positive comps. Before leading us to a stronger position in the U.S., he did the same thing in China. We will miss Greg and thank him for his leadership. He has made a difference for our customers, associates and shareholders.”

And, he added: “John has done a fantastic job at Sam’s Club, and he will continue the momentum we have in Walmart U.S. John knows our business well, having held many different jobs in the company over more than 25 years, and he is helping transform it for the future. He has the experience and judgment to know what we should continue doing and what we should change. He embraces technology and new ways of working, and he keeps our customers and Sam’s Club members at the center of everything we do, while delivering results for the business. I look forward to seeing his impact for our customers and associates in Walmart U.S."

Published on: October 11, 2019

CNBC has a story about how financial services company Jefferies has downgraded Kroger's stock "due to what it believes was a key mistake: investing in centralized fulfillment centers instead of micro-fulfillment."

Jefferies analyst Christopher Mandeville wrote in a note to clients this week that retailers looking to compete with Amazon "are grappling with how to fulfill and deliver customers’ orders of fresh produce and groceries quickly and cheaply. Mandeville said a grocery chain’s fulfillment method is a make-or-break investment. It could opt for large, central warehouses, also known as centralized fulfillment, or it could go with so-called micro-fulfillment, in-store or store-adjacent spaces that are close to urban centers.

"Kroger’s decision to invest in centralized fulfillment centers could be a multiyear mistake, Mandeville wrote. A year after Amazon’s 2017 merger with Whole Foods, Kroger signed an agreement to build 20 centralized fulfillment centers with British online grocery Ocado’s robot technology."

The Mandeville argument is that "centralized fulfillment centers require high up-front costs" while micro-fulfillment "naturally puts the grocery picking closer to urban centers," which makes delivery "much cheaper. In particular, the notoriously difficult 'last mile,' or the final delivery step to a shopper’s home, is more efficient from a nearby micro-fulfillment center."

“We view Kroger’s centralized fulfillment center platform as a considerably more expensive, time-consuming model that carries higher risk in what is still a nascent market,” Mandeville wrote.

Published on: October 11, 2019

The Atlanta Journal Constitution reports on new research from the Silent Spring Institute saying that people who eat home-cooked meals "had significantly lower levels of PFAS in their bodies, while those who ate more fast food and at restaurants had higher levels of it."

And PFAS, FYI, are NG.

Here's how the story explains them:

"PFAS are a class of chemicals used in nonstick, stain-resistant and waterproof products, such as cookware and food packaging. The chemicals have been linked to an array of health issues like cancer, thyroid disease, low birth rate and decreased fertility."

Restaurant and especially fast food tend to be prepared or contained in cookware and containers that are high in PFAS, the study maintains, which accounts for the fact home-cooked meals are healthier. The Silent Spring analysis is blunt: "The general conclusion here is the less contact your food has with food packaging, the lower your exposures to PFAS and other harmful chemicals."

Published on: October 11, 2019

Business Insider reports that "a new Oxfam report grades Walmart highest and Amazon-owned Whole Foods lowest on workers' rights issues throughout the supply chain … Oxfam 's report reflects increasing criticism against Whole Foods and Amazon, while Walmart sheds its reputation as the biggest villain in retail."

The story goes on: "While Whole Foods has long been an industry leader on fair-trade-certified goods, it failed to meet most of the markers examined by Oxfam. Walmart earned points for things such as publishing labor rights policies for its supply chain and making a specific commitment to support small-scale farmers, both things that Whole Foods has failed to do."

And, Business Insider writes: "Whole Foods and its parent company, Amazon, have faced controversy around their treatment of workers. Whole Foods recently faced backlash after Business Insider reported last month that it plans to cut benefits for part-time workers in 2020. Amazon has also been criticized for the working conditions of its warehouse workers and delivery drivers."

In a statement, Whole Foods responded that the report "does not accurately reflect Whole Foods Market's long-standing efforts to address human rights and labor issues in our supply chain."

Published on: October 11, 2019

• Walmart Canada yesterday announced that it is "expanding its official partnership with Cornershop, growing its offering from five to 14 stores in the Greater Toronto Area (GTA).
Cornershop is an express delivery service that customers can use to order groceries on-demand in as quick as 60-minutes, and its popularity and convenience influenced Walmart's decision to expand the partnership … Through the Cornershop app and website, users can order groceries for delivery.

"Cornershop's trained shoppers then go to one of the 14 participating Walmart stores in the GTA to pick out quality groceries. They call every customer at the end of each shop, and customers can approve any replacements or request another item to be added to the cart. Cornershop has a high availability for on-demand time slots, and customers can subscribe to Cornershop Pop for $99/year to get free delivery on every order over $40 and steeper discounts."

Published on: October 11, 2019

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

• Amazon has been getting grief about the fact that teams of employees have been listening selectively to people using its Alexa-powered systems as a way to improve voice recognition capabilities; while Amazon said that this was only being done as a way of helping Alexa to get “smarter,” it concerned privacy experts that Alexa, essentially, always has access to users’ homes and offices.

Now, Bloomberg reports that teams of employees may also be looking at footage from the Cloud Cam security devices that it has been selling to consumers.

According to the story, "Dozens of Amazon workers based in India and Romania review select clips captured by Cloud Cam, according to five people who have worked on the program or have direct knowledge of it. Those video snippets are then used to train the AI algorithms to do a better job distinguishing between a real threat (a home invader) and a false alarm (the cat jumping on the sofa) … At one point, on a typical day, some Amazon auditors were each annotating about 150 video recordings, which were  typically 20 to 30 seconds long, according to the people, who requested anonymity to talk about an internal program."

I have no problem with this. Amazon's interests seem to driven by a desire to make the technology better, as opposed to anything prurient. But … I think that it is in Amazon's best interests to not just disclose these systems, but be really upfront about them. Small print here in the "terms and conditions" just won't cut it anymore.


• The Wall Street Journal reports that Dollar General is planning to begin testing a new click-and-collect option, looking to build a competency in an area already developed by competitors such as Walmart and Target.

According to the story, "Marshal Cohen, chief retail analyst at market-research firm NPD Group Inc., said the move could help the company attract customers between the ages of 21 and 37, who are set to become more cost-conscious as the economy shows signs of cooling down. Historically, Dollar General’s average consumer has been between 35 and 55, Mr. Cohen said. The younger demographic is digitally savvy and 'all about convenience,' he said. 'Nobody even wants to get out of the car anymore'."

Published on: October 11, 2019

• CNN reports that Danish beer company Carlsberg has "revealed two new recyclable prototypes of the sustainably-sourced wood fiber bottle it hopes to eventually bring to market."

Yup. Carlsberg wants to sell beer in paper containers.

"One version is lined with a thin film of recycled PET plastic to keep beer from seeping out. The other uses a bio-based lining. The prototypes will be used to test the linings.

"For Carlsberg, the innovation is a way to lower its impact on the environment and present consumers with an interesting new option."

Published on: October 11, 2019

MNB reader Robert Wheatley wrote:

Your FaceTime post today lands squarely on the essence of best practices in marketing strategy: uniqueness and differentiation. Disrupting the category go-to-market norms – said in another way zigging when everyone else zags – is the lynchpin to owning a place in the consumer’s mind (the Holy Grail of marketing outcomes). We find in many consumable product categories there is rampant sameness between entrants whose messaging and behaviors tend to run together like a pack.

The courageous marketers work to upend the rules and look for ways to rethink the conventions to both separate and elevate themselves from the other brands. The litmus test of doing this well must include observing the rule of relevance. Unless your solution sits squarely in the wheelhouse of what benefits and matters to people buying your product, and works to enhance their experience and lives, then its tough to make it stick.

Nicely done, Kevin.



Yesterday we took note of a Fast Company piece about how Ikea, which has faced some significant product safety issues in the past, is investing in a new "Safer Homes" initiative, described as a suite of tools and activities "geared toward helping create a safer life at home for families and children." However, the story suggests that the initiative may be more aimed at shifting responsibility than it is at insuring customers' safety.

One MNB reader responded:

I know safety is an important topic but my mind went immediately to this Jeff Foxworthy quote…

“When I was a kid, my parents had a 900-pound television on top of a TV tray. My dad's theory was, "Let him pull it on his head a few times, he'll learn. You wanna put a penny in the light socket? Try that out. OHH! Hurt like hell, didn't it? Don't do that no more."



And finally, when commenting on the story about scotch being available in Tide-style pods, I asked hat would happen if I tried to wash my clothes in Glenlivet.

MNB reader John Rand had an answer:

One rather hopes they would all come out in Tartan plaid.

Boom! (We'll be here all week…)

Published on: October 11, 2019

In the fifth game of their best-of-five American League Divisional Series, the Houston Astros defeated the Tampa Bay Rays 6-1, and now will move on to play the New York Yankees in the AL Championship Series.


In Thursday Night Football, the New England Patriots stomped on the New York Giants 35-14.

Published on: October 11, 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

Published on: October 11, 2019

You know how some retailers are experimenting with different formats and different sized stores, figuring that they need different offerings in order to appeal to different consumers and different times?

This can be enormously effective, I think. Not only does it expand a company's potential appeal, but it also can force a company and its personnel to develop new competencies. In the end, it creates learnings that can only benefit a business.

I mention this because that's what the current producers of 'Star Trek" are doing. As noted here numerous times, having successfully developed a new series called "Star Trek: Discovery," which has been taking place about a decade before James T. Kirk took command of the USS Enterprise (Christopher Pike is the captain), they are shortly going to release "Star Trek: Picard," which will explore the late-in-life adventures of Jean-Luc Picard, who when last we saw him was captain of the USS Enterprise-E. (These are all seen on CBS All Access, the network's streaming service.)

Now, for the second year in a row, they are coming out with a series of what they're calling "Short Treks," mini-films of about 15 minutes or so that explore different characters from the various series in unusual ways; they often employ first-time directors new to the property, and take liberties with style and tone that might not be taken in the regular series.

It is, I think, a very smart idea. It is a way of creating a kind of chef's table of programming … it satisfies the audience, challenges the business to innovate, and gets people to develop new competencies.

The first of the 2019 "Short Treks" is "Q&A," written by novelist Michael Chabon, and it is a humorous glimpse of Mr. Spock's first few hours on Pike's Enterprise, when he is stuck in a turbo lift with Number One, the ship's second in command. Ethan Peck (Gregory Peck's grandson, go figure) continues to give us an entirely legitimate new spin on Leonard Nimoy's iconic character and Rebecca Romjin puts real flesh on a character who was only briefly seen in flashbacks in the original series. (And Anson Mount returns, briefly, as Pike - making me yearn for a new series that focuses on his adventures - he's terrific.) "Q&A" is funny and charming and a worthy addition to the show's mythology.



I have a new white wine to recommend this week - the 2015 Heritance Sauvignon Blanc from California's Napa Valley, which has a lovely tropical thing going for it and was great with a shrimp-and-scallop cake dish that I made the other night and served with sautéed spinach.



That’s it for this week. Have a great weekend.

Back Monday.

Slàinte!