business news in context, analysis with attitude

Published on: November 22, 2019

by Kevin Coupe

I am happy to report that this weekend, "CBS Sunday Morning," hosted by Jane Pauley, will feature a profile of Frieda Caplan, the founder of Frieda's Specialty Produce. (Check your local listings for time and channel.) The piece will be part of the program's food-centric Thanksgiving coverage.

This makes me happy, which is why I am sharing it with you.

Correspondent Rita Braver recently spent some time at the company, including an interview with founder Frieda Caplan, a trailblazer who created the business back in 1962 to bring unique produce items such as kiwifruit and dragon fruit to the US. I had the chance to spend some time with Frieda the other day - not because I was doing an interview, but because she has become a good friend over the years - and "CBS Sunday Morning" is lucky to get her; Frieda, now in her mid-nineties, remains totally engaged in her business, the business, politics, culture and pretty much everything.

If you've never met Frieda - or even if you have - I urge you to watch the program on Sunday. She's one of the great people in the business, and deserves all the attention and plaudits she gets.

Frieda, as always, is an Eye-Opener.

Published on: November 22, 2019

The Boston Globe reports that 99 Ranch Market - which it describes as an "Asian Wegmans" is coming to Boston with a store in Quincy that will be its fifth on the east coast.

The other East Coast units are in New Jersey and Maryland; 99 Ranch Market ownership says it could open more in Massachusetts if this one works out. The bulk of the company's 52 stores are on the west coast.

The Globe writes that "like Wegmans, the 99 stores are big and bright and have a cult-like following. They are known for a wide selection of Asian snacks (like brown sugar boba) and instant noodles (more than 50 kinds)."

The story also makes the point that there is plenty of competition: "Anyone familiar with Quincy knows there’s no shortage of places to buy Asian groceries in the city, whether they’re looking for pea pod stems, oyster sauce, or dried shiitake mushrooms. From the parking lot of the future 99 Ranch you can see another Asian grocer, C-Mart, in the next lot over.

"Drive a three-mile stretch of Hancock Street, a main artery, and you can easily find at least four other Asian grocery markets … Across town, Wan Wu, general manager and co-owner of Kam Man Food, has just one question: What took 99 Ranch so long to break into the Boston-area market?

“We expected them to be here much earlier," he tells the Globe.

The story goes on: "Asian food chains are expanding because they see opportunity. There’s more revenue growth in the ethnic grocery market — about 2 percent annually over the next five years, compared with just 1 percent for the overall supermarket sector, according to the research firm IBISWorld. One reason: The Hispanic and Asian populations are fast growing, and they tend to eat more often at home than in restaurants, reports IBISWorld. Asian consumers, according to Bureau of Labor Statistics, spend on average 8.3 percent more on food eaten at home than do others."

Published on: November 22, 2019

Ahold Delhaize division Retail Business Services said yesterday that it has developed "new frictionless store technology, piloted under the name lunchbox, which enables individuals to shop a small format store in seconds by scanning in, shopping and walking out," similar to Amazon Go technology.

However, the company says, "compared to other frictionless store concepts, lunchbox is efficient. The solution carries a lean cost and can be implemented in a matter of weeks."

Here's how it works: "The application technology for lunchbox, created in Retail Business Services’ innovation lab and tech hub, is powered by a Retail Business Services’ proprietary app, which admits shoppers to the store and charges shoppers for purchases. For ease of payment, services such as PayPal, Venmo, Apply Pay and Google Pay are integrated into the wallet. Inside the store, AI running on Intel Core i5 and i7 processors-based systems optimized with the Intel Distribution of OpenVINO toolkit detects which products are being removed from shelves in the store and anonymous body skeletal tracking connects the right products to the right shopper. The Intel Distribution of OpenVINO toolkit enabled lunchbox to use existing Intel-based point-of-sale systems and deploy on-premise AI at maximum performance."

Here's where it works: "The technology is currently being tested in Retail Business Services’ Quincy, Mass. office."

The lunchbox technology reportedly will be on display at the National Retail Federation (NRF) Big Show in January in New York City.

Published on: November 22, 2019

In Canada, the Financial Post reports that Loblaws "is launching an online marketplace featuring toys and furniture from new vendors, as Canada’s largest retailer seeks to be more like Amazon.com Inc. or Walmart Inc. in the home delivery of a multitude of products … The new offerings include products by Canadian design and décor firm Umbra and Lennox Furniture Inc. and other products from baby-care to pets the grocery and pharmacy chain owner hasn’t traditionally stocked in a bid to boost complementary sales."

“Through this expanded PC Express offering, we will provide (customers) with a curated, edited assortment of products that complement their current shop, from some exciting new vendors,” Garry Senecal, Loblaw’s chief customer officer, said in a statement.

The Post writes that Loblaws "is betting on the expansion of business as online shopping and home delivery become the new normal with giants such as Amazon, much like printed catalogues heralded the consumer age a century ago."

Published on: November 22, 2019

The New York Post reports that "there’s a new startup in town that’s vowing to sell New Yorkers a cup-of-joe cheaper and faster than the competition. 

'Bandit, founded by one of Uber’s earliest employees, is based on a pop-up coffee shop concept that’s exploding in China because it eschews the traditional brick-and-mortar model.

'"Bandit cafes look more like mall kiosks than coffee shops because they center around prefab, coffee-making equipment built at a factory in Michigan. The modules come fully equipped and can be easily moved, allowing Bandit to set up shop anywhere with a power outlet, including a warehouse, office building or hotel lobby, says founder Max Crowley."

The company says that the lower construction and opening costs mean that the stores can sell coffee for about 25 percent cheaper than the likes of Starbucks or Dunkin'.

There's just one location open at the moment, in in Midtown Manhattan, but Crowley says he plans for more.

Published on: November 22, 2019

There is a new television commercial that is worth watching,. because it is totally on-trend in terms of being both self-aware and for multiple brands.

And, it features Ryan Reynolds, always a hoot.

The ad starts out being an ad for the new Samsung’s QLED TV … but also as an ad for his new movie, 6 Underground. But then it shifts into being an ad for Aviation gin - a brand in which Reynolds has an ownership stake. He explains to a director that he "bought mid-roll ad placement" for Aviation … and then the commercial sort of segues into being an ad for Netflix, the streaming platform on which 6 Underground will run.

Confusing? Actually, not really … because the staging, writing and Reynold's delivery all make it work, and in fact all the brands end up being more memorable than they might've been in stand-alone commercials.

Which may be a lesson all by itself.

You can check it out above left.

Enjoy.

Published on: November 22, 2019

Good piece in the Wall Street Journal that sort of follows up on a Seattle Times story the other day about how many Amazon graduates have started their own companies.

"For decades, General Electric Co. was America’s breeding ground for corporate chiefs," the Journal writes. "Executives who rose through the conglomerate’s ranks in its heyday and passed through its rigorous management program went on to run behemoths such as Home Depot Inc. and 3M Co.

"In the Big Tech era, Amazon has become the incubator for CEOs and entrepreneurs. At the core of Amazon’s ethos is a scrappy startup mentality that encourages employees to constantly innovate and challenge the way things are typically done.

"There’s one element some ex-Amazonians are leaving behind: the harsher parts of Amazon’s culture, such as hiring practices that favor skills over collegiality. Amazon is known for disregarding social cohesion in interviewing candidates, former employees said, elevating other traits over an ability to work well with colleagues."

You can read the story here.

Published on: November 22, 2019

• The Associated Press reports that "a group of Democratic U.S. senators is questioning Amazon about the security of its Ring doorbell cameras following reports that some Ukraine-based employees had access to video footage from customers’ homes.

"A letter to Amazon Wednesday from Sen. Ron Wyden of Oregon and four other Democrats said the internet-connected devices may pose national security concerns.

"News site The Intercept reported in January that Ring employees in the U.S. and Ukraine had access to personal data from cameras around the world. The report said Ring gave a variety of employees and executives access to recorded and sometimes live video footage from customers’ homes.

"Besides citing the report, the senators noted that Ring devices routinely store video recordings and other data on Amazon servers."

Published on: November 22, 2019

• Beckers Hospital Review reports that Albertsons has become the first retailer to offer the diagnostic technology called diabetic retinopathy eye exams.

The diagnostic equipment is located in clinics that are "in five Albertsons locations — four Acme Markets grocery stores and one Safeway … The AI technology works completely autonomously to identify patients with diabetic retinopathy and macular edema, diabetes-related complications and leading causes of blindness … Results of the exam, along with patient vitals and other health information, are immediately transmitted from the CarePortMD clinic to the patient's physician."


• Bumble Bee Foods has filed for Chapter 11 bankruptcy protection, as expected.

Bloomberg writes that the filing came as the company deals with "criminal fines and civil lawsuits stemming from a federal price-fixing case. The canned-tuna purveyor has plans for its assets to be acquired by FCF Co. for about $925 million."


• USA Today reports that "more than 75,000 pounds of packaged salad is being recalled after seven people were hospitalized with E. coli and two of them developed kidney failure, the U.S. Department of Agriculture said Thursday.

"A New Jersey company, Missa Bay, issued the voluntary recall, worried that the romaine lettuce may be contaminated with the bacteria following an investigation by the Centers for Disease Control and Prevention.

"In all, 17 people have been infected with E. coli in eight states, the CDC found. No one has died."

Published on: November 22, 2019

Regarding Amazon's bricks-and-mortar strategies, one MNB reader wrote:

It might be Amazon is pulling a sleight of hand, or it might be a last ditch effort to make something of Go technology.  According to a story a few months ago, Amazon originally envisioned a fully functioning grocery store but killed that idea because they couldn’t figure out a way to “Go” with variable weight and fresh items.

Then there was an article that shows the blue print for this new “grocery store” (as the helpful Bloomberg author called it in the title of the article you wrote about today).  Notice there still is no fresh or produce section, this is just a 7k sq foot Go, not a 10k sq foot “grocery store.”  Even a neophyte like myself knows grocers are increasing the perimeter to drive traffic, not eliminating it!

Add in the other articles talking about how much more modest the growth in store count has been, as well some speculation about shrink still being too high, and the commentary in this latest article about the fact they “might” start to license the tech in a couple months strikes me as 100% marketing of a future offering.
 
Get a friendly reporter to call a 3x bigger Go store a grocery store, make sure he includes Amazon going to get to 35k sq feet eventually, have him write the costs have come down despite not giving any more detail on that, and then give them the hook of “or we might license it to the industry.”  In other words, this was a very long “We’re coming after your business, but if you want to do business with us, at least you stand a shot.”  Grocers in the 1950s dealt with this issue too.  It was called Mob protection.  “Nice store, would be a shame if something happens to it.”
 
For a litany of reasons, Go can’t handle fresh and variable weight.  It might not even handle packaged goods that well.  And it for sure doesn’t do it cheaply.  And don’t take my word for it, Amazon isn’t even using itself in its new stores (if it were close, why would they not wait to start this roll out, what’s the rush?).
 
And if you think grocers that outsource delivery to Instacart should have their heads examined, any grocer that would allow Amazon cameras into their stores and Amazon hooks into their apps and customer data and transaction data, should have their whole bodies examined to make sure their heads are actually still attached.
 
Go is a cool tech that isn’t yet anywhere ready for prime time and might very well never be.  For the foreseeable future, it can solve not really pressing problems for a lot of money.  Which explains why Amazon has been rolling these out so much slower than originally planned. 
 
Now to be clear, like you, I admire the company’s prowess and think failing is a wonderful outcome, it’s the only way to move forward.  And I don’t think this should give grocers a sense of complacency overall, they still need to innovate and remove friction from their ops at an ever increasing pace to survive. 
 
But this whole “grab and go” paranoia is misplaced, and this specific article reeks to me of a shake-down, written in part by a compliant author. It stinks.  As you’ve written about in other recent examples, Amazon really has a different mentality these days then always do right by the customer.  It seems more like it’s “how can we rip off our (current and potential future) customers.”
 
And by the way, for all the Amazon Go wannabes?  This article doesn’t “validate their opportunity.”  It should scare the living daylights out of them.  Amazon has spent over $1 billion on salaries for Go employees alone.  Good luck beating Amazon with that $7 million you just raised.



Responding to our piece about disruptor Warby Parker getting into the contact lens business, one MNB reader wrote:

I got a chuckle from your comment, “Warby Parker is a fashion business, and contact lenses by their very nature are not a fashion accessory.”

I think you’ll find many of us consider contact lenses just that, a fashion accessory.  Most of my friends and I turned to contact lenses as soon as our parents would allow, because we felt we looked more glamorous without glasses hanging on our noses.  And I admit, I still wear them decades later because I like how I look without glasses.  I remember wanting to make an even bigger fashion statement by using green lenses for a while to change the color of my eyes.  And these days, you can acquire such exotic looks as vampire eyes in an array of colors and styles, the ultimate Goth accessory.

Wow. I had no idea. I'll have to think about that next time I am looking to Goth accessorize.




On another subject, package delivery, MNB reader Brian Packert wrote:
 
Something not mentioned in The Whole Package article was the new Amazon Key feature. I just signed up for it and had my first delivery this week. Amazon links to my garage door and the driver puts the package in my secured garage – not leaving it prone to the world of my front porch.
 
Huge win for me and my family!



MNB reader John Rand wrote:

Re: your comments on the interview with Tim Armstrong and the idea that brands may want to go direct to consumer —

My own experience is, to say the least, erratic. For many items I rely on Amazon, and it is often where I seek a new item I have not previously bought online.

But it is also a pain in some categories, for a variety of reasons. Small items, such as hardware parts are often poorly described or insufficiently displayed. A total lack of a way to ask a question before purchase and get a reliable and timely answer often sends me elsewhere (crowdsourced answers are not always pertinent, accurate, or prompt). It is a mixed bag.

In several cases (one example was a humidifier filter) there are tons of choice but a range of prices for a supposedly identical item  that creates hesitation. From experience I know some of those listings are imitative knock-offs, poorly made or of questionable provenance. It may have “fallen off a truck” as we used to talk about gray or black market items, but it was the wrong truck.

In that particular case, after a poor Amazon experience, I searched for and easily found the manufacturer’s website, offering the correct item, at a fully competitive price, and it is the easies thing in the world to bookmark that site and return there every season  when it is time to stock up. They have been fairly reasonable about marketing to me (certainly no worse and no more irrelevant than Amazon, whose marketing to me is driven by algorithms that are less intelligent than a small dog if no less persistent. The shipping is free, if not quite as prompt as Prime, but I order a dozen filters at a time and the cold dry heating season is pretty predictable.

That brand is a keeper. They did all the right things.

Amazon is good, but it is not perfect. And personally, if I were a branded manufacturer, I would never ignore that consumer who might well want to look me up and deal with me direct. It may not have all the potential volume of an Amazon or a Walmart, but why would any brand NOT want to be directly available to their ultimate customer?



I continue to get nice notes about MNB's 18th birthday earlier this week.

Like this one from MNB reader Rich Heiland:

Congrats on 18 years! I am constantly sharing MNB with former clients, friends.

And this one from my friend and longtime MNB reader Marv Imus:

Happy Anniversary from one “dinosaur “ to another!

The "dinosaur" reference goes back a long time, to a 2004 story that I wrote for a magazine that the Food Marketing Institute (FMI) used to publish and that was reprinted with permission here on MNB.

The story was about a dinner that I shared with Al Lees Jr. and Marv, at the time two independent grocers, at Greystone, the restaurant located at the Culinary Institute of America. It was one of the most memorable meals I've ever had - not just because the food was great, but because the conversation was candid and focused on whether the independent grocer would be able to survive. (We talked a lot about Walmart. Amazon never even came up. Go figure.)

How they saw themselves was reflected in the story's title: "Dining With Dinosaurs."

I love those guys, the education they gave me and the time we spent together.

You can read the story here.

Published on: November 22, 2019

In Thursday Night Football, the Houston Texans defeated the Indianapolis Colts 20-17.

Published on: November 22, 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.

Published on: November 22, 2019

Ace Atkins is back with his latest novel featuring Robert B. Parker's iconic detective, Spenser, in "Angel Eyes," out just this week, and once again Atkins proves that he is more than up to the task of continuing the enormously popular series.

"Angel Eyes" takes Spenser out of his usual milieu, Boston, and brings him to Hollywood, where he is tasked with finding a young woman who has vanished; aiding him is Zebulon Sixkill, a Native American who he mentored back in Boston but who has moved to Los Angeles and started a career as a private detective.

Atkins has been enormously, almost spookily effective at capturing Spenser's first-person narrative voice without it ever seeming imitative; his deep affection for the characters and the form shows in every one of the seven Spenser novels he has written (Parker wrote 39 of them before his death in 2010). And, he's managed to do it while writing his own series of novels featuring Quinn Colson, an Army Ranger turned southern sheriff who is working to tame an unruly (to say the least county in Mississippi - you should definitely catch up with them if you haven't yet done so.

In "Angel Eyes," naturally, not everything is what it seems. The young woman isn't really missing, but has been absorbed into a cult that seems like a little bit Scientology and a little bit NXIVM. But the woman, Gabriele Leggett, either way may be a damsel in distress, and Spenser's always had a hard time resisting those, even if it doesn't always end well, as in multiple cases that brought him into the life of April Kyle. Which means that no matter who tries to get him to give up the case, he doesn't, which means he has to deal with a sleazy Hollywood agent, an even sleazier Hollywood producer, and members of the cult who give sleaze a whole new level of toxicity. Spenser's never better than when he's ironic and skeptical of his surroundings, and the Hollywood setting gives him plenty of opportunity for that.

There are lots of references to California detective noir - from the work of Dashiell Hammett (Gabrielle Leggett is a character from "The Dain Curse," as are Eric Collinson and Joseph Haldorn, two other names that show up in "Angel Eyes") to Robert Crais (not sure how he resisted a Michael Connelly-Harry Bosch nod, unless I missed it), and it is sort of entertaining to wonder how much Atkins' own recent Hollywood experiences informed the novel.

At one point in the book there is a comment that if Spenser's life were turned into a movie, they'd have to make him edgier by having him coming out of prison; Atkins' second Spenser novel, "Wonderland," has been turned into a Netflix film - directed by Peter berg and featuring Mark Wahlberg as Spenser - and, in fact, they're reportedly turned Spenser into a just-released ex-con. (I'm withholding judgement on this until I see the movie and how they make it work; after all, there have been plenty of things that Spenser has done in the series that should have resulted in him doing some time, so maybe it'll play out. We'll see.)

"Angel Eyes" also features Atkins' gift for characterization - Sixkill especially remains a terrific invention, and there is a pink-haired hacker named Jem Loon who is a delight (I hope she recurs). Susan Silverman, Spenser's longtime paramour, is in the book just the right amount and moves the plot forward in significant ways; Hawk, alas, does not make an appearance, and he is missed.

I have to admit that my favorite passage of the book has nothing to do with the case and nothing to do with Hollywood. It is Chapter 26, and Spenser is out for a run in Runyon Canyon Park, thinking through the facts of the case. But his thoughts turn to Boston, which he misses, and Susan, and Pearl the wonder dog, and Hawk and the life he has built for himself there. It is just a few paragraphs, but evocative to the point that I missed Boston, too.

The good new is that I'm sure Spenser will be back next year in a new novel, almost certainly in Boston, where he will be in the skillful hands of Ace Atkins.



Ford v. Ferrari is, I think, easily one of the best movies of the year - director and co-writer James Mangold (Logan, 3:10 to Yuma) has fashioned a fast-paced, enormously entertaining narrative based on the true story of how the Ford Motor Co. tried to dislodge Ferrari from its place as the perpetual winner at the 24 Hours of Le Mans road race in 1966.

Matt Damon plays race car designer Carroll Shelby and Christian Bale plays driver Ken Miles, each of whom finds themselves doing battle not just against other cars and drivers, but also about the bureaucratic group think and micromanagement at Ford, especially as exercised by Leo Beebe, an executive vice president. (Tracy Letts is fantastic as Henry Ford II - imposing, autocratic, but always aware that he is not the Henry Ford.)

Not only is Ford v. Ferrari a terrific movie, but it also is replete with business lessons about how to - and how not to - run a business and manage people. One can't help but watch this movie and think about how many companies do not achieve their potential because they are unable or unwilling to take advantage of the enormous talents and passions of the people who work there.

Go see Ford v. Ferrari. Thank me later.



I'm not yet how I feel about "The Mandalorian," the new Disney+ series that takes us into an offshoot of the Star Wars universe, five years after the events portrayed in Return of the Jedi.

There are eight episodes in the first season of The Mandalorian, which already has been renewed for a second eight-episode season; three have been released to this point, and I've seen the first two. This is a Jon Favreau baby, and he does a pretty good job of combining all the directing skills that he's honed on Iron Man and live-action versions of The Jungle Book and The Lion King - The Mandalorian looks great, with all the money (a reported $30 million per episode) seeming to be onscreen.

Mandalorians, it should be pointed out, are a helmeted species that are expert gunfighters and bounty hunters, and the series follows one of them (played by Pedro Pascal, though we never see his face) on a series of adventures. I won't say more than that for fear of spoiling some twists and turns, but let's just say that some of them are made for the Christmas shopping season.

My general feeling about The Mandalorian is that it is pretty engaging, and I'll stick with it, though it lacks some of the cheesy, ramshackle charm of the series "Firefly" and its film sequel, Serenity, which made many of us stand up and proudly say, I am a Browncoat.

Here's what I do know. I had to pay for a Disney+ subscription, which I was happy to do because I can share it with my kids, and because I wanted to be able to review "The Mandalorian" here. (See what I do for you?) But there is virtually nothing else on the streaming service that I have any interest in watching, so this may end up being a short-term experiment. (Maybe I'd watch the Marvel superhero movies, if I get really, really desperate.)

I can see where if you had little kids Disney+ would be a good idea - there is a ton of child-centric content there, almost all of it old movies and TV shows. But it is hard for me to imagine that there is enough variety on Disney+ to make me a believer and long-term subscriber.

We'll see.



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

Back Monday.

Slàinte!

Published on: November 22, 2019

Bloomberg reports this morning that Walmart plans to end its Jet fresh food delivery business in New York City, and will close a Bronx warehouse that served as a base for the service.

The decision comes just a year after it was launched.

According to Bloomberg, "Jet - which will continue to sell dry groceries like cereal and other general merchandise - will inform customers of the news Friday and fulfill any existing orders already placed."

The Bloomberg story says that "since its launch last fall, Jet’s fresh-food service has struggled, according to three people familiar with the business. The company has resorted to raising prices to offset the hefty costs of fulfilling orders in the nation’s biggest city. Key executives left, and in recent months items like avocados and strawberries have been out of stock."

The move also reflects the reality that as an entity within Walmart, Jet seems to be losing currency and the culture battle with the bricks-and-mortar bureaucracy that dominates the world's largest retailer.

Walmart bought Jet for $3.3 billion 2016 - and with it, acquired the services of its founder, Marc Lore, who has been running Walmart's US e-commerce businesses. The goal was "to reach urban millennial," the story notes, and "the company’s online revenue has increased -- but most of the unit’s success has come from its popular curbside grocery pickup service, which is cheaper to operate than home delivery.

"Jet’s customer traffic, sales and overall relevance inside Walmart’s sprawling retail empire, meanwhile, have dwindled. Its staff was fully integrated into Walmart over the summer and the parent is losing patience with some of the expensive online ventures that generate buzz but crimp profits."

Some context: "Jet debuted what it dubbed its “City Grocery Experience” last September, opening a 200,000-square-foot distribution center in the Bronx, hiring executives from companies like PepsiCo Inc. and splashing ads over New York City buses and subway stations. Jet hoped to lure New Yorkers away from established online-grocery players like Fresh Direct, Ahold Delhaize’s Peapod and Amazon.com Inc., in part by offering upscale local brands such as Orwashers breads. Jet planned to expand the service to other cities."

You can read the entire story and analysis here.