business news in context, analysis with attitude

Published on: June 29, 2020

KC offers an example of yet another business - in this case, the ironically named Aftermath, that found a way to pivot when the pandemic changed everything and even offered some new opportunities.

Published on: June 29, 2020

There were reposts circulating on Friday on TMZ about how Winn-Dixie was considering changing its name, which somehow seemed credible because it was just last weekend that the Dixie Chicks changed their name to The Chicks - the word "dixie," with its implication of a Deep South history inextricably linked to slavery.  The word - and the history - are seen as increasingly problematic, even toxic, at a time when racism and social justice are of growing concern throughout the country.  It was emblematic of this raised consciousness that the Mississippi legislature voted over the weekend to end the use of a state flag that includes in it the battle flag of the Confederate States of America.

But Winn-Dixie isn't going there.  At least not yet.

In an email to the Jacksonville Daily Record, Joe Caldwell, a spokesman for Winn-Dixie's owner, Southeastern Grocers, said, “While we have no immediate plans to rename this banner, we have always been and will continue to be responsive to the needs and concerns expressed by the communities we serve … At Southeastern Grocers we’re committed to cultivating an inclusive culture and community that promotes belonging, inclusion and diversity. As such, we stand against racism and support the Black Lives Matter movement across our country."

Published on: June 29, 2020

The New York Times reports that Facebook is "seeing a growing boycott by advertisers unhappy with its handling of misinformation and hate speech."

The list now reportedly includes Coca-Cola, Diageo, PepsiCo and Unilever.  Not all of the companies are being overt about the boycott;  some are just terming it a time-out to assess their own approaches to social media.

The Times writes that "the effort gained traction earlier in June amid pressure from civil rights organizations like the National Association for the Advancement of Colored People and the Anti-Defamation League. Color of Change, one of the groups backing the boycott, said that nearly 100 advertisers have joined.

"Many of the participants are small businesses, which make up the bulk of Facebook’s eight million advertisers. But recently, several large companies that spend millions of dollars a year on the platform have also distanced themselves. Some are also halting their advertising from Twitter and other social media sites, along with Facebook’s platforms."

Previously announced companies participating in the boycott are Birchbox, Eddie Bauer, Honda America, Levi Strauss & Company, Lululemon, The North Face, Patagonia, REI, Starbucks and Verizon.

Bloomberg writes that "no single company can significantly dent growth at Facebook, which generated $17.7 billion in revenue last quarter alone. But a rising tally adds to pressure on other brands to follow suit, and when combined with a pandemic-fueled economic slowdown, the threat to Facebook deepens."

The Bloomberg story says that Facebook founder-CEO Mark Zuckerberg "responded Friday to the growing criticism, saying that Facebook would label all voting-related posts with a link encouraging users to look at its new voter information hub. The social network also expanded its definition of prohibited hate speech for advertising."

Digital News Daily writes that "the policy changes announced by Facebook Inc. CEO Mark Zuckerberg … are limited, but could have significant political ramifications for the company - particularly given Zuckerberg’s refusal up to now to flag or remove even false and inflammatory content and political ads, including those from President Donald Trump and extremist groups.

"The changes include what amounts to a partial reversal of the company’s stance not to remove posts deemed 'newsworthy' even if they would normally violate its policies against organized hate movements and inciting violence."

Published on: June 29, 2020

The Boston Globe reports on how workers at a number of Whole Foods stores - in places like Seattle,  Philadelphia, and, Cambridge, Massachusetts - have been sent home from work because they were wearing "Black Lives Matter" face masks.

In a statement, Whole Foods said, “In a customer-focused environment, all Team Members must comply with our longstanding company dress code, which prohibits clothing with visible slogans, messages, logos or advertising that are not company-related. Team Members who do not comply with dress code are always given the opportunity to comply. If a Team Member is wearing a face mask that is outside of dress code, they are offered a new face mask. Team Members are not able to work until they comply with the policy.”

The policy isn't just be applied to "Black Lives Matter" masks, but also to New England Patriots masks and other masks with a variety of messages.

The Globe notes that "earlier this month, Amazon, which owns Whole Foods, said it would donate $10 million to organizations dedicated to racial justice, and chief executive Jeff Bezos posted a letter on social media from a customer attacking the company’s support for Black Lives Matter, replying: 'You’re the kind of customer I’m happy to lose'."

But now, having been told not to wear the masks in the stores, some employees are pushing back, primarily via social media, suggesting that the company is being at best inconsistent and at worst hypocritical.

Published on: June 29, 2020

Microsoft announced on Friday that it will close down virtually all of its 80 retail stores, reimagining four of them - in New York, London, Sydney, and on its Redmond, Washington, campus - as "experience centers."

The reason:  “Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location,” said  David Porter, a Microsoft vice president.

The company did not say when the stores would be shuttered, nor if they would even reopen since being closed by the pandemic.

Published on: June 29, 2020

Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

•  In the United States, there now have been 2,637,077 confirmed cases of the Covid-19 coronavirus, with 128,437 deaths and 1,093,456 reported recoveries.

Globally, we now have crossed two lines, with more than 10 million confirmed coronavirus cases and more than a half-million fatalities.  Specifically:  10,267,259 cases, 504,757 deaths, and 5,568,672 reported recoveries.

•  The Washington Post this morning reports that "Anthony S. Fauci, the nation’s top infectious-disease expert, told CNN on Sunday that an eventual vaccine for the coronavirus may not be enough to achieve herd immunity in the United States."

In addition, the Post writes, "in Florida, where the seven-day average of new cases has hit new highs for 21 days in a row, Gov. Ron DeSantis (R) said that young people who ignore social distancing rules were largely to blame for the rise in infections."

And, "as new coronavirus cases continue to rise in California, Gov. Gavin Newsom (D) has shut down bars in some areas of the state, including Los Angeles."

The Post also has an interview with former Food and Drug Administration commissioner Scott Gottlieb, in which he says that "the surging number of coronavirus cases could result in nearly half the country infected with the virus by the end of 2020.

“By the time we get to the end of this year, probably close to half the population will have had coronavirus, and that’s if we just stay at our current rate,” he told CNBC.  “We don’t need to vaccinate the entire population because a lot of people would have already had this by the time we get to a vaccination.”

The Post writes that "Gottlieb said parts of the country are showing signs of serious community spread that will probably increase in the coming weeks.

"Younger people appear to be the most impacted in those states, which means that death rates and hospitalization numbers might not be as severe as they were in the first wave, but all that could change with transmission … 'Eventually, it will start to seep into older people, more vulnerable people, and you’ll start to see the total number of deaths go up even if the death rate has come down,' he said. 'We’ll probably get above 1,000 deaths a day on average as the infection starts to widen out'."

•  From CBS News:

"H-E-B has announced they will once again be implementing purchasing limits on certain products, as Coronavirus cases continue to rise.

"While some products have remained under a purchasing limit since the COVID-19 outbreak, essential items, such as toilet paper and paper towels, have been added back to the list after buying restrictions were temporarily lifted."

The company said this was "in an effort to make sure all customers have access to products they need."

Texas currently is seeing a spike in coronavirus cases.

•  The Wall Street Journal reports that "at least 15,000 more Americans have died in recent months from Alzheimer’s disease and dementia than otherwise would have, health officials believe, pointing to how the coronavirus pandemic has exacted a higher fatality toll than official numbers have shown.

"As Covid-19 devastated older Americans this spring, often by racing through nursing homes, the deadly outbreaks compounded the devastation of Alzheimer’s and other forms of degenerative brain disorders that are common among elderly residents in long-term care facilities."

The story notes that "although not all the extra deaths were directly caused by the coronavirus, that fatality rate is 18% higher than average for those disorders in recent years."

The CDC also has compiled numbers suggesting that thousands more excess deaths have occurred from various diseases - hypertension (8,000), diabetes (5,000), stroke (3,700) and coronary artery disease (2,900) - during the past few months than ordinarily would.  Again, these folks aren't all dying directly because of Covid-19, but they may be dying as a result of the coronavirus disrupting the kind of care they would've gotten in more ordinary times.

•  The Dallas Morning News reports that Amazon is using its Flex drivers - who use their own cars to make deliveries and are paid $18-$25 per hour on an as-needed basis - to make deliveries to two area food banks chosen by the company "to receive monetary and delivery aid to manage the surge in food assistance needs created by COIVD-related job losses."  Amazon, the story says, "is using its drivers to provide contactless, doorstep deliveries for pre-packaged meals."

The story notes that "one location, Crossroads Community Service, saw a 400% spike in demand since February. The second location, Sharing Life, has seen a 200% increase in demand since mid-March."

•  Fox Business reports that "hourly Walmart employees in the U.S. received another coronavirus bonus … The bonuses were broken down to $300 for full-time hourly employees and $150 for part-time hourly and temporary employees who were employed as of June 5. This includes Walmart store and Sam's Club associates, supply chain and offices, truck drivers and assistant managers. A higher bonus of $400 was paid out to assistant managers at Sam's Club."

The story notes that Walmart has paid out close to $1 billion in various pandemic-related bonuses so far this year.

•  From the Associated Press:

"Lobster prices are falling in New England as the industry deals with the effects of the coronavirus pandemic, and they could drop even more later this summer, industry officials said.

"The American lobster fishing industry, based mostly in Maine, has had to cope with a supply chain that has been disrupted by the pandemic. Wholesale prices were lower than previous years this spring, and consumers started to see lower prices at markets earlier in June.

"Members of the industry said prices could likely fall more in July. America’s lobster catch typically picks up in the summer, when lobsters shed their shells and reach legal trapping size. This year, fishers will likely bring lobsters to the docks in a time when restaurants are slowed or shuttered and seafood processors aren’t taking nearly as many of the crustaceans, industry members said."

•  Axios has a story about how the pandemic has affected the fast food business, accelerating certain trends that work well for such restaurants.  By moving customers from dine-in options to advance ordering, pick-up and drive-through options, these locations are moving to offerings that have higher margins.  At the same time, many locations have trimmed their menus, which allow them to get rid of extraneous items and offer faster service.

The bottom line, according to Axios:  "Necessity and competition have spurred a solid 5 years or more of innovation in about 4 months."

•  The New York Times reports that "after decades of emphasizing ambience, BOGOs and Dollaritas, big restaurant chains like Fridays and Applebee’s are hyping germ-free dining as they try to coax customers back from quarantine. It’s a difficult sell, but a crucial one as the country attempts a lumbering return to normal."

The chains have to "adapt the familiar, beloved pageantry of chain-restaurant dining — featuring buoyant servers, unlimited breadsticks, ample portions, entrees with 'fiesta' or 'dragon glaze' in their name, and value, value, value — to the Covid-19 era."  The new playbook, the story says, "has particulars on everything from menus (one-page, disposable) to condiments (single-use containers only) to how diners should be greeted by hosts (with hand sanitizer)."

One example … "Several corporations have created a new job: designated scrubber. This is an employee who does nothing but roam the restaurant armed with spray bottles and paper towels, like a bounty hunter for microbes."

You want fries with that Lysol?  We haven't been to a restaurant since February, and to be honest, other than feeling a little cooped up, there isn't a lot calling out to us to get us to venture out.  A number of our friends have gone out to restaurants, and it sounds like it has been a mixed bag - happy to get out, happy with the restaurants where they've gone, but very aware of the other customers and how they are behaving.  It doesn't sound very relaxed … though, to be fair, I'm very conscious of other customers when I go to Whole Foods, Stew Leonard's or Stop & Shop.  Nothing feels very relaxed these days.

•  The Seattle Times reports that Sur La Table is blaming the pandemic for a series of moves it made last week - deciding to lay off 27 corporate employees, or roughly 20 percent of its headquarters staff, without severance packages, and laying the groundwork for the closing of five of its 130 retail stores.

Sur La Table closed all of its stores because of the pandemic on March 20, and says that despite “record growth” in online sales, it continues to suffer the "effects of the pandemic" as a result of those closures.

I happen to love Sur La Table, and so it gives me no pleasure to say this, but this may well be a case of using the pandemic as a convenient excuse to make cuts that probably would've had to happen anyway.  Everything I've seen has suggested that it over-expanded its store network and wasn't making money in the stores, and has had some leadership and strategic direction issues since being acquired by a Bahrain-based investment group.

•  There have been numerous stories in the media about the San Diego Starbucks store where a woman walked in without wearing a mask, and when 24-year old barista Lenin Gutierrez asked her if she had one, she started to curse him, flipped him the bird, took his picture, and then went on social media to criticize him.

The social media posting didn't exactly have the desired effect.  One person who read it felt bad for the barista, and so started a GoFundMe page where people could give Lenin tips and actually reward him for standing up to the customer.

As of this morning, Lenin's tip jar is pretty full:  it has $90,156.  (More than 2,000 people have donated.)

Matt Cowan, the man who launched the page, has pledged that all the money is going to Lenin, and has arranged for Lenin to meet with a financial advisor to help him understand the best way to handle the money.

It is worth noting that California has a state rule saying that you have to wear a mask if you are standing within six feet of other people, the Centers for Disease Control and Prevention (CDC) recommends the wearing of masks to prevent transmission of the coronavirus to other people, and Starbucks' own request is that customers do so to protect other customers and employees.

Also worth noting that California's numbers have been going up … and so greater vigilance obviously is required.  (California has been pretty progressive about its approach to dealing with the virus, unlike some other states where infection numbers have been spiking, which is concerning to public health officials.)

•  The Hollywood Reporter has a story about how "Disneyland Resort employees on Saturday protested at the shuttered theme park over their disagreement of proposed conditions when the Anaheim destination once again reopens.

"The resort has been closed since mid-March due to the novel coronavirus pandemic. However, the company made moves in recent weeks to reopen Disneyland; its initial targeted date for the theme park portions being July 17, which marks the 65th anniversary of its grand opening."

That date has been postponed because of concerns about infection spikes in California.

If Mickey and Minnie don't show up because they are afraid of being infected - after all, at their advanced age (they're both 91!) both would be considered high-risk - then the whole Disney thing falls apart.  

•  Variety reports that Disney has decided to delay the premiere of Mulan, its expected blockbuster summer movie, until August 21.

It is the third delay.  Mulan was scheduled to open in March, then was moved to July because the coronavirus closed all the nation's movie theaters.  While theaters have begun to reopen around the country, New York and Los Angeles - two markets critical to the success of movies released in theaters - remain problematic.

Variety notes that "the move comes after news that Warner Bros. postponed the release of Tenet, a sci-fi epic from director Christopher Nolan, for a second time. That film — starring John David Washington and Robert Pattinson — is now expected to debut on Aug. 12.

Seems like a pretty good bet that both films could get delayed until Christmas, assuming that the studios remain firm on not putting them on pay-per-view.  The Washington Post characterizes these moves as "throwing in the towel" on July, but that may be an understatement….

Published on: June 29, 2020

The New York Times has a terrific story about Carlton McCoy, CEO of Napa's Heitz Cellar, described as the first African-American to run a major winery as well as one of just three African-Americans certified as a master sommelier in the US.  (That designation is being changed by the Court of Master Sommeliers, it was reported last week, because of concerns that the use of the word "master" is racially offensive.)

One excerpt from the story:

"The pandemic struck at a particularly inopportune time for Heitz, which was three months from reopening its tasting salon. Mr. McCoy did not lay off any of the winery’s 52 employees, but he did have several conditions for the new state of work: no Zoom meetings ('I cannot express how much I hate Zoom culture,' he said. 'I need to make eye contact and see body language'), no internal emails longer than five sentences, and mandatory suggestions for improving Heitz — two per day.

"The worst idea he received, he said, was to re-bottle existing wine with a new label and higher price, 'something that happens in the wine industry all the time.' The best was so good, he said, he couldn’t share it publicly."

One interesting thing about McCoy is that he is aware of his unique position in the industry as well as being committed to changing the equation.

McCoy says that he frequently texts "with one of my mentors, Maverick Carter, the chief executive of SpringHill Entertainment, who is also LeBron James’s business manager. Maverick started out as a wine client at the Little Nell, then became a friend. For African-Americans who make it out of poverty, you’re a bit of an island, and as I’ve progressed in my career, I have found fewer people of color in the room. Maverick and I connect about music, food, business and things happening in the country."

At the same time, McCoy works with the Hue Society, which he describes as "an organization devoted to diversifying wine culture. We all want to give back to the community, but how we do it is a matter of disagreement. Personally, I would like to focus on job placement and education. The result of this call is that we are going to create a new arm of the society called the Roots Fund, which will fund wine scholarships for the black community, followed by guaranteed job placement. We already have verbal commitments from 20 wineries."

Published on: June 29, 2020

•  The US Centers for Disease Control and Prevention (CDC) is "warning consumers and retailers in eight Midwestern states to stay away from some bagged salad mixes as officials investigate an outbreak of an intestinal illness caused by a microscopic parasite," the New York Times reports.

"More than 200 people in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and Wisconsin who reported eating the salad mixes before getting sick have lab-confirmed infections of the illness, cyclosporiasis," the story says, all of which were made by Fresh Express.  Two dozen people have been hospitalized, but no deaths have been reported.

The story notes that "Fresh Express announced a separate voluntary recall on Saturday of dozens of products produced in Streamwood that contain iceberg lettuce, red cabbage and carrots, after it learned from the F.D.A. that the products may be linked to the outbreak."

•  From the Washington Post:

"Consumer spending rebounded a record 8.2 percent in May as many states began lifting stay-at-home orders and businesses reopened, according to federal data released Friday.

"The increased spending comes despite a 4.2 percent drop in personal income, the Commerce Department reported. Personal incomes soared 10.5 percent in April, thanks to $1,200 stimulus checks and other federal help."

The Post writes that "the spending surge is the largest on record, stretching back to 1959, said Jeannine Aversa, a spokeswoman with the Bureau of Economic Analysis, and helped mitigate the 6.6 percent drop recorded in March and the 12.6 percent tumble in April, when the pandemic forced much of the economy into hibernation and set off a recession. There have been more than 47.3 million applications for unemployment benefits filed since March."

Published on: June 29, 2020

•  FMI – The Food Industry Association announced this morning that Heather Garlich, the organization's Vice President, Media and PR, has been promoted to the role of senior vice president, communications, marketing and consumer/community affairs.

At the same time, FMI announced the retirement of Robert Garfield, senior vice president of the Safe Quality Food Institute, a division of FMI.

FMI said that "Garfield’s retirement signals a new opportunity for leadership at SQFI, with Gigi Vita as the incoming chief food safety assessment officer and senior vice president of the program. Originally hired to lead sales for SQFI, Vita’s appointment cements her operational effectiveness through best in class business-to-business and business-to-consumer insights and sales teams, as well as supply chain, manufacturing, and globally sourced customer offerings."

Published on: June 29, 2020

•  Milton Glaser, the graphic designer perhaps best known for the "I ❤ NY" logo and the first graphic designer to be awarded the National Medal of Arts, has passed away.  He was 91.

The New York Times writes in its obit that Glaser "was hired by the British tycoon James Goldsmith in 1978 to redesign the interiors, exteriors and packaging of the Grand Union chain of supermarkets, which Mr. Goldsmith had just acquired. Mr. Glaser designed several projects for the restaurateur Joe Baum, most memorably the Big Kitchen food court on the ground-floor concourse of the World Trade Center, the 1990s redesign of Windows on the World there and the Rainbow Room in Rockefeller Center."

Among other things, Glaser designed the logo and packaging for Brooklyn Brewery, and was a co-founder of New York magazine.

“I’ve always believed that the idea of beauty and the idea of aesthetics are very much linked to a social benefit. That the species couldn’t survive without art, because art is a kind of mediating device in human culture. People need it to survive,” he said in a 2003 interview with Metropolis Magazine.

Published on: June 29, 2020

MNB reader Bob Thomas had a perspective on the possibility of increased wine import tariffs:

The tariffs, though terrible, will not be as bad as one would think.  Tariffs would be based on the landed cost of the wine, not the current retail price.  A way to reduce the impact of the tariff would be for a foreign winery to set up a subsidiary in the US to import and then distribute the wine.  Though there may be small problems with the price charged to the subsidiary (“transfer pricing”) it is not an insurmountable problem.  Or a very astute company could serve as a clearing house for the various wineries willing to enter into a distribution partnership. 

Regarding the mask debate, one MNB reader wrote:

The issue of wearing masks is not a partisan issue, or even a philosophical issue. It does make it easy to determine who the sociopaths are.

I wouldn't go so far as "sociopath."  Label people that way and it sort of ends the possibility of reasonable discussion.

Though I would agree that it is hard to understand why this has become a cultural issue and not a matter of health and smart public policy.

Responding to last week's piece about the stirring rendition of the National Anthem on the campus of Portland State University (which I've embedded below), MNB reader Greg Kerr wrote:

Gave me the chills, and a tear in my eye!

With all that is going on in the U.S. and the world these days, what a great clip to provide at then end of this week.  Both Madisen and Emmanuel were phenomenal.  Thank you for sharing!

MNB reader Julia Ann Mataras wrote:

The PSU video was beautiful.  Thank you for sharing.

Another MNB reader, who also attended the MNB Virtual Happy Hour on Friday night, wrote:

Brought tears to my eyes.  Thank you for hosting tonight’s happy hour.  I always learn and enjoy the perspectives of other people in different parts of the country. 

It was fun.  And instructive.

And from MNB reader Monte Stowell:

Thank you for sharing this video to your MNB audience. Portland has a diverse population, and to see what happened in this video was really heart warming to see and hear this beautiful version of our national anthem.I have lived in PDX all my life and attended PSU when it was Portland State College in the mid1960’s, so it was great to see PSU get some props from your missive and this video.

It all brought a tear to my eye, too … in part because of how much I am going to miss Portland and PSU this summer.

But no whining … or at least, not much.