business news in context, analysis with attitude

Published on: November 21, 2019

Published on: November 21, 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.

So the other day I had a chance to spend some time at the Fulton Fish Market, down in the Bronx … and when I saw "the other day," I really mean "the other night," because I was there from about 11:45 pm until 2:30 am. Not really my most productive time of day, but I was glad I went because I saw something that was really impressive.

The Fulton Fish Market dates back to 1831 … it originally was in Manhattan, but moved to the Hunts Point location in the Bronx in 2005. The building itself is about a quarter-mile long, and in some ways it hasn't changed all that much over the years. There are dozens of seafood companies, most of them small and independent, doing business there, bringing in an enormous variety of fish that they then sell to local stores and restaurants … you can see then cutting and trimming and filleting and then marketing their wares to reps who come in to see what looks good.

It really is extraordinary … I walked away from it thinking to myself that it was a tough way to make a living, and when I got home I tossed my clothes in the wash, my sneakers in the trash, and took a long, hot shower.

But the reason I was down there was because the Fulton Fish Market has entered the 21st century with FultonFishMarket.com, which is designed to serve consumers directly, as well as restaurants and retailers.

In charge of FultonFishMarket.com is Mike Spindler, a well-known guy in the food industry when it comes to technology and e-commerce. I've known Mike since the early days at MyWebGrocer, where he was one of the pioneers, and I was interested in seeing what he is up to in the early morning hours at the Fulton Fish Market.

Essentially what they are doing is re-engineering the seafood supply chain, bringing what you might call a little Amazon-like magic to a centuries old business. The goal, quite simply, is to cut down on the time between the sea and the plate so that businesses are selling and consumers are eating the freshest seafood possible.

Their conceit is that the traditional way of getting fish from sea to plate involves going from the boat to a market to a refrigerated processing warehouse to a consolidated warehouse to a store or restaurant and then, finally to the consumer. At FultonFishMarket.com, they've developed a supply chain that goes from the sea to their market and onto an airplane and then to the store, restaurant or consumer - cutting out a couple of steps by use of a technology that never freezes the fish.

It is yet another case where friction created through years of tradition creates an opportunity for a disruptive influence to make a difference.

In some cases, this all means sourcing product directly from the Fulton Fish Market - those dozens of fishmongers are a great source of the freshest product possible. Plus, Mike and his team are sourcing products from other places that might not have been available to many of us - I tasted this amazing smoked salmon from a London smokehouse called H. Forman & Son, which has been smoking salmon since 1905. It was extraordinary, but I might never have tasted it if FultonFishMarket.com were not bringing it in.

I have to be honest. I'm fascinated - not just as a consumer (and I plan to be a regular customer of
FultonFishMarket.com, which inevitably will reduce the amount of seafood I buy at local supermarkets, but also because I think that this presents retailers with an opportunity to take advantage of a streamlined supply chain and a proven history - Fulton Fish Market has an amazing narrative - to grow seafood sales.

It is, I think, a great category in which businesses can differentiate themselves. And maybe attract new customers … reeling them in, you'll excuse the expression, hook, line and sinker.

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

Published on: November 21, 2019

by Kevin Coupe

CNBC has an interview with Walmart CEO Doug McMillon in which he says that one of the biggest problems the company has in growing the in-home component of its e-commerce business comes down to one word:

Dogs.

As in dogs that are there to "greet" people delivering e-commerce orders being fulfilled by Walmart.

“We have this place on the app where customers can tell us whether they have a dog or not,” McMillon tells CNBC. “And sometimes they misinform us about whether the dog is in the house, or not in the house. We’ve had a few instances where we just stop the delivery, exit the home, call the owner and say, ‘We’ll need to resolve the dog issue before we put your food in the refrigerator.’”

Now that's an Eye-Opener. Though i have to think that down the road, there will be a lot bigger problems with this model than dogs.

I also know this - give our dog an Oreo and Zazu not only would hold the refrigerator door for you, but probably would help you clean out the safe (if we had a safe, and if it actually had anything in it).

Published on: November 21, 2019

Bloomberg reports that Amazon "is preparing to open Amazon Go supermarkets and pop-up stores, an expansion of the company’s cashierless ambitions that includes the possibility of licensing the technology to other retailers."

The chain of the stores would be separate from both the company's Whole Foods chain and the new chain of supermarkets that it has confirmed that it will begin opening early next year (and which, it has said, will not have checkout-free technology).

From Bloomberg: "The new store formats and licensing initiative could launch as soon as the first quarter of 2020, according to a person familiar with the project. Amazon is testing a supermarket equipped with Go technology in a 10,400-square-foot retail space in Seattle’s Capitol Hill neighborhood."

While "customers have praised the Go stores as technical marvels," retail analysts "have wondered whether the low margins at a typical corner store chain would offset the costs of the Go technology, a complicated array of cameras and software that figures out what shoppers have grabbed and automatically charges them when they exit.

"The Go team, which recently folded previously separate hardware groups and engineering support staff into a new entity called Physical Retail Technologies, has spent the past two years streamlining the technology. The efforts were aimed at making the existing Amazon Go stores more profitable and the guts of the system cheap enough to entice other retailers, said the person, who requested anonymity to discuss an internal project … Now, having improved the technology, the company is getting closer to its original ambition. Amazon aims to support stores as large as 30,000 square feet, the size of a typical modern supermarket. At the Capitol Hill space in Seattle, engineers are stress-testing the camera arrays with large groups of people, the person said."

Published on: November 21, 2019

CNN reports that Walmart announced yesterday that "it will renovate produce areas with new signs highlighting prices and shorter merchandise bins to create an 'open market feel' for customers. Walmart will also move all of its organic items into a single area of the department to make them easier to find. And it will widen the aisles to try to keep them from clogging up with customers and employees who pick up online grocery orders."

The timeline: "The revamp, which Walmart has dubbed 'Produce 2.0,' has already started at more than 200 stores. Walmart expects to complete it at the majority of its 4,700 US stores by next summer."

The reason: Walmart does considerable produce picking for online orders in its stores, and it needs a more open format if it is going to give its associates access to the department with the least amount of interference with customers.

And, "Walmart hopes a new merchandising look will help convince shoppers that it offers high-quality fruit and vegetables."

Published on: November 21, 2019

C+R research is out with a new study about package delivery, illustrating some of the problems inherent with e-commerce delivery programs:

• "92% of consumers expect to get a least one online order delivered this holiday season."

• "54% are fearful of packages being stolen when making online purchases, 42% avoid buying certain items due to theft."

• "36% of consumers have reported having a package stolen once within the last year (This is up from 31% from a separate 2017 study on package theft)."

• "44% of those impacted installed a camera or a doorbell camera after having a package stolen (82% believe this provides 'peace of mind')."

Published on: November 21, 2019

CNBC reports that not only does Chipotle plan to put drive-thru lanes, called "Chipotlanes," in half the new restaurants it currently is building, but it believes it can surpass the speed of its competitors.

“It takes us all of 12 seconds to get you your food when you pull up in your car because you’ve already paid in advance and made the whole order,” Chipotle CEO Brian Niccol tells CNBC.

The story notes that a recent survey found that "on average, customers spent more than four minutes from speaker to order window … Chipotle is able to keep its drive-thru times fast by restricting its Chipotlanes only to digital orders, which also happen to be the most profitable type of transaction for the company."

The story goes on: "In recent quarters, the chain has spurred growth by focusing on digital sales. During its third quarter, digital sales, which include delivery, grew 87.9% and accounted for nearly a fifth of Chipotle’s revenue."

Published on: November 21, 2019

Bloomberg Businessweek answers the question, "Who will be the Warby Parker of contact lenses?"

Answer: Warby Parker.

According to the story, the company has unveiled "Scout, a line of daily contact lenses. It’s the first time Warby Parker Retail Inc., whose $95 tortoiseshell frames are ubiquitous in coworking spaces and third-wave coffee shops, has expanded beyond eyeglasses since Gilboa and co-Chief Executive Officer Neil Blumenthal started the company almost a decade ago. At $440 for a year’s supply, the lenses will be slightly cheaper than many daily contacts but will be sold with what Warby says will be a much improved ordering process."

Some context from :

"If anyone could make contact lenses cool, it would be Warby Parker. The company is often credited with creating the direct-to-consumer craze. (“Direct to consumer” is a fancy term for product makers who eschew wholesalers and sell their stuff on the internet.) Investors have pumped enormous sums into millennial-friendly businesses marketed as “the Warby Parker of X.” Allbirds, Casper Sleep, Dollar Shave Club, and Glossier—the Warby Parkers of sneakers, mattresses, razor blades, and makeup, respectively—each achieved valuations of $1 billion or more thanks to clever social media marketing and clean-looking websites. Those are the most successful Warby clones, anyway. There are also Warby Parkers of short-shorts (Chubbies), vitamins (Care/of), dog toys (BarkBox), and untucked buttoned-downs (Untuckit)."

Published on: November 21, 2019

The New Yorker has a story that sets the stage this way:

"In a laboratory in Denver, on a decommissioned U.S. Army base, a baby sits in a high chair with two electrodes attached to his chest. To his left, on a small table, a muffin tin holds four numbered cups, each filled with a green substance. On the walls and the ceiling, four cameras and an omnidirectional microphone record the baby’s every burble and squawk, then transmit them to a secure server in an adjacent room … The Good Tastes Study, as the baby experiment is called, is in a similar spirit. The two electrodes on the baby’s chest will monitor his heart rate and how it fluctuates with his breathing. A third electrode, on the sole of the baby’s foot, will measure his 'galvanic skin response,' or how much he’s sweating. Together, they’ll indicate whether the green substance is triggering a fight-or-flight response. Does the baby sense danger?

"The enemy in question is kale."

That's right. Kale. And the goal of the study is to figure out how to get kids to eat more of it, and other vegetables, and how to get adults to serve them more of it.

"Baby food shouldn’t be this hard," The New Yorker writes. "After a few hundred thousand years of raising children, humans ought to have this part down. No food has been more obsessively studied, no diet more fiercely controlled, no dining experience more anxiously stage-managed. Yet we still get it wrong. On any given day, a quarter of American toddlers eat no vegetables. When they do eat them, the most popular choice is French fries. Why don’t babies know what’s good for them? And why don’t we?"

Great piece … and you can read it here.

Published on: November 21, 2019

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

• Leanplum is out with a new study concluding that more than 95 percent of consumers plan to do at least half their holiday shopping online.

Sixteen percent of younger Americans (Millennials and Gen Zs), the survey says, will do all their holiday shopping online.

More from the study: "Three-quarters of shoppers find it helpful to receive emails from retailers regarding deals and promotions. Interestingly, 74 percent of those surveyed said they were 'excited' to receive notifications from retailers about offers/sales. After receiving a notification from a brand about a deal, almost 70 percent said they would check out the offer and probably purchase the item.

"However, 75 percent of respondents said generic messages from retailers annoy or bother them."

It needs to be pointed out that Leanplum describes itself as a "multi-channel engagement platform," so it has a dog ion this hunt. But … even if the conclusions are only half right, they are worth noting, because we ain't going back, folks.

Published on: November 21, 2019

• Motley Fool reports that Walmart, looking to compete more effectively against D-I-Y retailers Home Depot and Lowe's, "is launching a wide-ranging line of tools in areas from home improvement to lawn and garden to automotive, including items like leaf blowers, lawn mowers, and chain saws. Operating under the brand Hart, which will be exclusive to Walmart, the new product line works with an interchangeable battery platform of 20 or 40 volts, allowing Walmart customers to layer on new tools according to their need. Since Hart tools don't require cords or gas or traditional batteries, the rechargeable platform should help create a valuable brand ecosystem, as customers are likely to expand their collections over time."

The line is designed to appeal to a higher-end customers than its entry level Hyper Tough tool line.

The Motley Fool story concludes with the following analysis: "Like it's done with Allswell in mattresses, MoDRN in furniture, and Parent's Choice in baby products, Walmart should continue to launch new private and exclusive brands to help differentiate it from the competition. With its network of stores, economies of scale, and reputation for low prices, Walmart is capable of competing in any retail category it sees opportunities in."

Published on: November 21, 2019

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

• Happi.com reports that Tom's of Maine "has begun shipping a first-of-its-kind recyclable toothpaste tube recognized by the Association of Plastic Recyclers. The tube is designed to be compatible with the #2 HDPE plastic stream.

"Toothpaste tubes typically haven't been recyclable because most are made of a mixed material that doesn't have a second life and has to be landfilled. The #2 plastic continues to have a strong recycling stream and is the same material used in most laundry detergent bottles. The new Tom's of Maine recyclable tube is designed to be circular, so that the material can be re-processed into new products and packaging."

I'd never thought about it before, but it is sort of surprising that toothpaste tubes never have been recyclable. I hope this sets a new bar that other manufacturers work to match.


• Bloomberg reports that "two years after Bumble Bee Foods pleaded guilty to price-fixing, the canned tuna producer is in talks with seafood industry peer FCF Fishery to buy it during a bankruptcy reorganization … Taiwan-based FCF Fishery would act as a stalking-horse bidder in a Chapter 11 reorganization, which San Diego-based Bumble Bee could file as soon as this week."

Context: "Bumble Bee, the largest North American brand of packaged seafood, is beset with criminal fines and civil lawsuits stemming from a federal price-fixing case. It pleaded guilty in 2017 to conspiring with Starkist Co. and Chicken of the Sea Inc. to fix and raise prices of canned tuna in the United States from 2011 through at least late 2013. The company also agreed to cooperate with the antitrust investigation.

"Bumble Bee flagged its financial distress during the case, arguing that the $81.5-million fine initially contemplated could push it into insolvency. The U.S. Department of Justice agreed, cutting the amount to $25 million and giving Bumble Bee an installment plan over several years that required no more than $2 million upfront.

"Former Chief Executive Christopher Lischewski pleaded not guilty to related criminal charges in 2018, and his trial in California federal court began Nov. 4. The hearings have featured testimony from cooperating witnesses that include executives from Bumble Bee and its competitors."

Published on: November 21, 2019

MNB reader Brian Blank had some ideas about Kroger's decision to test the sale of produce that actually is grown in its stores:

Growing produce and fresh herbs on-site is a pretty cool sounding proposition.  And now that I have the sincerity out of the way…gotta say, my mind pretty quickly leapt to the idea that maybe Kroger’s King Soopers division could employ that technology to grow a different crop…one that is legal in Colorado, if you get my drift…  From Private Selection to Private Stash.

I commented in part:

Many, many years ago, I remember covering the installation of an enormous hydroponics facility in a Texas supermarket - I'm pretty sure it was a Fiesta Mart. And while that didn't work because it wasn't economically sustainable, it was, I think, a foreshadowing of where the world eventually would go.

Prompting MNB reader Dave McKelvey to write:

Yes, your memory is intact.

Fiesta built a store in Clear Lake, a Houston suburb that had a hydroponic garden.

The store wasn’t popular, as Fiesta was known for catering to Hispanics, and at the time Clear Lake ( where NASA is located) was primarily a upper middle class area.

They tried to cut the footprint in half to keep it open, but eventually closed.

What I remember best about the store was the single lane ingress from NASA Rd 1. In my opinion, that had a impact as much as any in the lack of volume.

Last I checked, it is a Burlington coat factory.

Would you like a jacket to go with your parsley?



Responding to Kate McMahon';s column about the continued growth of cauliflower, MNB reader Mark A. Boyer wrote:

I enjoyed Kate’s take on the rise in cauliflower, but my key takeaway is less about cauliflower and more about “kale being a fad.” Apparently my wife hasn’t heard the news that kale is a fad.



MNB took note yesterday of an Eater report that "climate-conscious states like California are taking aim at gas stoves, with 13 cities and one county adopting building codes that ban gas or encourage all-electric new construction."

MNB reader Andy Casey wrote:

Pretty funny coming from a state which is routinely turning off electricity to hundreds of thousands of customers during fire season.

From another reader:

Ahh Berkeley, the pinnacle of reason! Unsure of the science, but here are 3 practical thoughts from someone who has had both: 1) gas is instant on/off so feel certain overall energy use is less; 2) try a gas stove in California when PGE cuts off your power!!; 3) You can get a plumber to run a gas line to your kitchen for less than $1,000 so no need to move. Bon appetit!

But I want to move. Thirty-five years in the same house is too long.

Yesterday we wrote about how neatness expert and minimalist guru Marie Kondo, having convinced the world to get rid of stuff that doesn't bring joy, now wants people to acquire stuff to replace the stuff they got rid of. Her stuff. Kondo has come out with a line of 125 home and self-care products that 'spark joy.'

I commented:

Pretty convenient that she has figured out a way to help people fill the space they created through decluttering, and make a buck along the way.

I must admit that I'm sort intrigued by the idea that she could identify 125 items that bring her joy … in part because there is as assumption that what brings her joy will bring other people joy, and in part because 125 is a big freakin' number.

I tried to identify the "things" in my life that bring me joy - as opposed to the people, like family and friends(and dogs), whom I assuming she doesn't think of as being disposable. There's the laptop on which I am writing this. The Mustang convertible. A few watches - all gifts, including one that my wife gave me in 1980 and another that she gave me two weeks ago for my birthday (I'm a watch guy). But then I started thinking about the difference between "joy" and "pleasure," and wondering where one ends and the other begins, and if it matters, because my iPhone and iPad and my hundreds of books give me pleasure ("joy" would be overstating it) and I'm not giving them up no matter what Marie Kondo says. And then I started getting a headache, because maybe it is just possible that this is just a great marketing gimmick and too many people are taking way too seriously?

For example, does a tuning fork sold on her site that, when used, allows people to "clarify their energy" really fall into the joy category? For how many people? Or is Marie Kondo just selling this year's version of snake oil that, when applied, is supposed to make our lives perfect but really just makes her life richer?

Too cynical?

One MNB reader responded:

Too cynical?

Not at all.

MNB reader Howard Schneider wrote:

Too cynical? Nope, Kevin, I think you’re right on. Wonder when KonMari will merge with goop?

Let's not lump Marie Kondo in with Gwyneth Paltrow, for whom I kind of have a thing that goes back to Shakespeare in Love.

And from another reader:

Snake oil, the world does not need more tuning forks and I am sure Himalayan Salt Lamps all over. If she had credibility it is gone like trust! Not being true to her own brand.

Agreed.



I made a comment the other day about how Starbucks' rest rooms are nicer than McDonald's, and was challenged by someone who asked if I actually went to enough McDonald's to make that distinction.

My response:

Absolutely. I am a man of a certain age, which means that I use restrooms wherever and whenever I can find them. I don't usually eat at McDonald's, but when I'm on the road - which is often - I'm happy to take advantage of their facilities.

One MNB reader chimed in:

Being 5-6 years your senior, I also find myself not passing up the opportunity to use a restroom wherever and whenever I have the chance. On a recent trip to the United Kingdom, we utilized McDonald’s and Starbucks facilities regularly, finding them both relatively clean and more importantly convenient. Additionally, we were able to access their free WiFi, saving us from using the data from our cell phone international plan.



Finally, I continue to get email about MNB's 18th birthday.

MNB reader Tom Kroupa wrote:

I've been with you since your pre-carnation. I am one of the fortunate ones to have met you in person, at a trade show around the year 2000, when you were writing the business newsletter prior to this one. Ideabeat is what I remember it was called. Am I right?

Don't stop doing what you are doing, okay

Yes, it was called Ideabeat, though to be honest, it is a site better off dead and buried.

And I have no plans of stopping doing MNB anytime soon.

From MNB reader Mark Taylor:

Congrats on 18 years!  Roughly 16 years ago my boss at the time turned me onto morningnewsbeat.com.  And ever since then I’ve paid it forward.  Over the years I’ve told countless new Key Account Managers and young broker managers about your daily site.  I always tell them this…  “it’s the best way in 20 minutes every day to get a pulse on the grocery industry, with some other interesting sidebar nuggets thrown in for good measure along the way.”  It’s educational, but with a perspective I find both refreshing and honest.  My favorite saying of yours I refer to all the time is what you say about choosing a path and staying on it.  That trying to do everything puts you in the middle and that’s where you find roadkill.  Growing up on a farm that saying always resonated with me.   Your daily read is delightful.  Keep it up!

And from MNB reader John R. Hurguy:

I’d like to belatedly congratulate you as you start your 19th year. Around 2003-2004, I found myself in Seattle on business and had the chance to meet you at Etta’s one afternoon. Good time with good wine and great conversation. Just like 15 or so years ago, I still start my day reading MNB even though I’ve been retired for almost 5 years. Keep up the great work!

Published on: November 21, 2019

Past Retail Tomorrow podcasts have focused on how technology can have an impact on business models and people's lives. In this edition, however, we drill down to talk about how technology affected one life … and, in fact, makes living a best life possible.

Our guest: Heidi Dohse, senior program manager in Google's Cloud - Health and Life Sciences division. Dohse's personal and professional story makes for a compelling narrative that is at once provocative and inspiring.

Hosted by Kevin Coupe, MorningNewsBeat’s “Content Guy."

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

This edition of the Retail Tomorrow podcast is brought to you by GMDC, the Global Market Development Center.