In this first of a two-part conversation, KC engages with Errol Schweizer, who has been in the food industry for almost three decades and now finds himself working with retailers and suppliers to bring "food system consciousness and ethics to the forefront." Schweizer is highly focused on bringing a greater degree of social responsibility and egalitarianism to the food industry - and while you won't like some of what he says and won't agree with some positions he takes, his message is one that needs to be heard and paid attention to if the industry is to forge a more responsible and sustainable path going forward.
Errol Schweizer's new podcast, "The Checkout," has as its goal bringing "forward diverse voices and stories from the frontlines of our food system," focusing on farm, retail and wholesale sector analyses as well as on public policy, labor organizing and community struggles. It can be heard here, or on Apple Podcasts, Spotify, and Stitcher.
Amazon, according to a new report from Bloomberg, plans to open more than a thousand "small delivery hubs" around the country that "will bring products closer to customers, making shopping online about as fast as a quick run to the store."
Eventually, the story says, Amazon hopes to have as many as 1,500 up and running, which "will also help the world’s largest e-commerce company take on a resurgent Walmart Inc."
Bloomberg provides more context:
"A recently opened warehouse in Holyoke, Massachusetts, exemplifies Amazon’s answer to this existential challenge. Located not far from a once vibrant mall, it’s just a short drive from more than 600,000 people. The goal is to creep closer to almost everyone in the U.S.
"Beyond Amazon’s retail rivals, the mass opening of small, quick-delivery warehouses poses a significant threat to United Parcel Service Inc. and the U.S. Postal Service. Being fastest in the online delivery race is so critical to Amazon’s business that it doesn’t trust the job to anyone else and is pulling back from these long-time delivery partners. Amazon is basically duplicating UPS’s logistics operation. Many of Amazon’s new hubs are within walking distance of UPS facilities."
KC's View:
If the goal is to have so many small delivery hubs around the country that will make online shopping and quick delivery as convenient as going to the store, this could be a more important strategy for Amazon than opening more Amazon Go, Amazon Go Grocery, and Amazon Fresh stores.
Heaven knows there is a lot of available real estate out there, though the Bloomberg story makes the point that the malls that some of us would expect Amazon to access may not be available; they may not have the right shipping configuration, or may have lease restrictions designed to protect existing mall stores.
But that doesn't matter. There's a lot of other locations available for Amazon to continue to establish a presence that will build the brand and intertwine its services into our lives.
The San Antonio Express News reports that H-E-B is working with Swisslog Logistics "to set up automated micro-fulfillment centers, which will help it manage curbside pickup and delivery orders."
H-E-B is not commenting on the report, and it is unknown how many of these centers will be created.
But, the story says, the micro-fulfillment centers "look like grids with bins. The bins hold items ordered by customers, and robots take the bins to stations so employees then can prepare the orders for patrons … The system is intended to make the process of filling orders speedier and more efficient. It will enable the grocery chain to 'meet the growing demand for curbside pickup without negatively impacting customer experience in the store,' Swisslog said in a statement. The company specializes in warehouse automation and software."
KC's View:
Makes a lot of sense, especially now. Retailers' physical locations are being stressed out by growing e-commerce sales, and so creating satellite locations and micro-fulfillment centers is a sensible way to alleviate some of that pressure.
The Cincinnati Enquirer has done an analysis of Kroger's online sales, and concluded that it "has done more business selling groceries online than Levi Strauss did selling blue jeans or Harley-Davidson did selling motorcycles."
While Kroger said that in its most recent quarter more than seven percent of sales were done online, it "stopped short of spelling out their total digital sales volume as it has taken off in 2020, growing at 127% in the last quarter."
The story goes on:
"An Enquirer analysis of Kroger's sales disclosures indicates Kroger's digital sales - groceries bought online for home delivery or for pickup in a parking lot – hit roughly $5.8 billion in the last 12 months – large enough to be a Fortune 500 company. Further, the disclosures indicate Kroger's digital sales could top $7 billion this year."
"Kroger's strong digital business is a key contributor to this growth as the investments made to expand our digital ecosystem are resonating with customers," CEO Rodney McMullen told analysts.
KC's View:
That may be the understatement of the year, if the Enquirer analysis is accurate.
One of the reasons this is interesting to me is that Kroger is building distribution centers in places where it doesn't have stores … which suggests to me that it could decide to open a pure-play e-grocery business serving those markets. After all, it has a ton of consumer data, and one of those markets, Florida, is filled with people who used to live elsewhere and may have shopped with a Kroger banner. It could do some data mining, determine who and where those people are, and then offer them e-grocery services … becoming a competitor even in places where it doesn't have stores.
It isn't an unknown model. After all, isn't that what Amazon has done?
Earlier this week, Walmart lost out in its effort to be part of an acquisition of Chinese app TikTok's US operations, when the company decided instead to make a deal with Oracle, which now is being positioned as a "partnership" rather than an outright sale.
Walmart was part of a competing bid from Microsoft, and was clearly interested in using TikTok as a way to access a younger customer base with an online marketplace.
But, according to numerous published reports, there remain a lot of moving pieces, and Walmart remains engaged.
President Trump - who precipitated the scenario when he demanded that TikTok's US operations be sold because of national security concerns about data usage - has not signed off on a "partnership."
"I’m not prepared to sign off on anything. I have to see the deal," he said yesterday. (He also conceded that the US government could not legally get a cut of the deal, as he had proposed.)
Walmart, the company said in a statement, "continues to have an interest in a TikTok investment … We know that any approved deal must satisfy all regulatory and national security concerns."
KC's View:
This was predictable … I can't see any reason off the top of my head why Walmart and Oracle could not make a deal. They have different and non-competing interests in TikTok, best I can tell, and so there ought to be ways to work together.
And Walmart is motivated - a TikTok relationship could give it a powerful weapon in its battle against Amazon.
I said it on Monday, and I'll say it again. I may be wrong about this - I know very little about this subject - but this somehow doesn't feel like a done deal to me.
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 6,828,301 confirmed cases of the Covid-19 coronavirus, resulting in 201,348 deaths and 4,119,158 reported recoveries.
Globally, there have been 30,063,255 confirmed coronavirus cases, with 945,542 fatalities and 21,819,114 reported recoveries.
• Dr. Robert Redfield, director of the Centers for Disease Control and Prevention (CDC), told a US Senate subcommittee on appropriations yesterday that a Covid-19 coronavirus vaccine may not be widely available until the middle of 2021.
"If you’re asking me when is it going to be generally available to the American public, so we can begin to take advantage of vaccine to get back to our regular life, I think we’re probably looking at third, late second quarter, third quarter, 2021," Redfield said.
Any limited supply available earlier - perhaps as soon as the end of this year - should be prioritized for first responders and high-risk communities, he said.
Redfield also emphasized the importance of wearing a mask, saying that it “is more guaranteed to protect me against Covid than when I take a Covid vaccine." He called masks "the most powerful public health tool we have," and said that if everyone in the country wore a mask, it would bring the pandemic under control in 12 weeks or less.
• Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told the Wall Street Journal yesterday that "Covid-19 can be removed as a public-health threat with good, widely administered vaccines and strong public-health measures, and a degree of normality might return by the end of 2021."
“With a combination of a good vaccine together with good public health measures, we may be able to put this coronavirus outbreak behind us, the way we put the original SARS behind us,” he said.
According to the story, "Dr. Fauci said it is unlikely Covid-19 could be eradicated. But he said that it would be possible under the right conditions to remove it as a public-health threat. Whether or not that happens will depend on how effective vaccines that are currently in development or testing prove to be, how many people get them, and how well public-health measures such as isolating exposed or infected people are deployed, he said."
• Southwest Airlines yesterday pledged to extend its no-middle-seat occupancy policy through the end of November as it looks to assuage customers still nervous about flying during the pandemic.
CNBC reports that the decision comes as Southwest announced that "it expects revenue to drop 65% to 75% in October and capacity to be down 40% to 50% from the same month last year as the coronavirus pandemic continues to hurt travel demand. It forecast November capacity to drop 35% to 40% from 2019."
• Eater New York reports that the New York City Council has passed a new bill "that will give restaurants in the city the option to add a surcharge of up to 10 percent to diners’ bills as an economic recovery support measure during the pandemic. The provision will go into effect immediately after the mayor, who is in support of the bill, signs it into law. It will extend until 90 days after indoor dining at full capacity is allowed … The extra revenue from the surcharge can be put towards any part of the business that the restaurant owner chooses, although it has to be clear to customers that the charge isn’t interchangeable with tips and the money doesn’t go towards staff wages."
"Federal Reserve leaders predict that unemployment will fall to 7.6 percent by the end of this year, and to 5.5 percent by the end of 2021, even as much about the path of the novel coronavirus and its influence over the economic recovery remain unknown.
"As the Fed concluded two days of policy meetings Wednesday, the projections suggest Fed leaders are growing more optimistic about the recovery than they were earlier this summer. By 2023, policymakers’ projections put the unemployment rate at 4 percent … At the same time, the majority of Fed officials expected the benchmark interest rate would stay at or near zero through 2023. The Fed also said it would increase holdings of Treasury securities and agency mortgage-backed securities at the current pace, which officials say is helping stave off an even deeper financial crisis."
KC's View:
The story also makes the point that the fed's projections don't - or can't - take into account a lot of issues that remain unknowable. Like how and when the pandemic's impacts will recede, or the potential impact of the regular flu season, or how natural disasters will impact various areas of the country, or how the election will play out.
I'm not sure you have to be an economist to have the sense that we're in unknown territory these days. Not only can anything happen, but it seems likely as if anything does happen.
The New York Times reports that "retail sales rose 0.6 percent last month, the Commerce Department reported on Wednesday, and the 1.2 percent increase in July was revised down to a 0.9 percent gain. Still, Americans continued to spend on home computers, new cars and online groceries, and some retailers serving those pandemic-related needs reported record sales."
The Times goes on: "The slower rise in consumer spending in August occurred against a grim economic backdrop that grew even darker as the $600-a-week supplemental unemployment assistance expired and Congress failed to agree on new stimulus measures. Unemployment declined, but stayed high as huge sectors of the economy — like hospitality, food service and travel — remain largely shut down.
"The slight monthly sales increase — many economists had been predicting a higher number — showed just how vital that government assistance has been in raising incomes. The latest sales data is likely to amplify calls for Congress to pass another round of stimulus before the November election."
• Reuters reports that Amazon "relies on extensive worker surveillance to boost employee output and potentially limit unionization efforts around the United States, says a research paper issued on Monday by the Open Markets Institute."
The Institute says that "Amazon uses such tools as navigation software, item scanners, wristbands, thermal cameras, security cameras and recorded footage to surveil its workforce in warehouses and stores.
"The paper says Amazon moves employees around in what could be an attempt to limit union organizing. For example, it creates heat maps and uses data such as team-member sentiment and a diversity index to figure out which of its stores may have a higher risk of unionizing, the report says.
"This can have an impact on workers’ ability to advocate for better working conditions and push for collective action, the paper said."
• From The Motley Fool:
"Amazon is expanding its Prime Air fleet at such a rate that it will likely surpass the third-largest shipping carrier, DHL, next year, before taking aim at FedEx and UPS.
"A study by the DePaul University Chaddick Institute for Metropolitan Development released last week found that from May to July, Amazon grew its fleet of cargo planes at the fastest rate since it began building out the business.
"The study's authors said that Amazon added nine planes to Prime Air during the three-month period, bringing its fleet size to a total of 50, for a 21.4% increase. They also note that since the end of their study, Amazon added four more planes and is expected to add another four, possibly by the end of the year."
• In the UK, retailer John Lewis is saying that because poor performance so far this year - in just the first half of the year, it had a loss of more than $800 million (US) - it will not pay out staff bonuses - for the first time since 1953.
While store closures during the pandemic contributed to the decision, the BBC notes that "even before Covid-19 hit, the chain had warned it might not pay the usual staff bonus as competition ate into profits."
• From the Wall Street Journal:
"GNC Holdings Inc. is moving ahead with a sale to China’s Harbin Pharmaceutical Group Co. after no other offers emerged, even as the deal drew scrutiny from Sen. Marco Rubio.
"The vitamin retailer said Monday it was canceling a bankruptcy auction and proceeding with a sale of its assets to Harbin for $760 million.
"Sen. Rubio (R., Fla.) last week asked Treasury Secretary Steven Mnuchin for a review of the deal by the Committee on Foreign Investment in the U.S. Known as Cfius, the Treasury-led panel vets acquisitions of American companies that might put national security at risk. The senator argued that through the deal, the Chinese government could gain access to sensitive health data about U.S. consumers."
• From the Wall Street Journal:
"Starbucks Corp. said its sales recovery in the U.S. is at least another six months away as consumers continue to work from home and many of its stores in central business districts remain closed.
"Comparable sales at Starbucks’s company-owned stores in U.S. urban centers are still down from last year as many workers haven’t returned to offices due to the pandemic, Chief Financial Officer Pat Grismer said Tuesday. Roughly 3% of the 8,900 stores in the U.S. that Starbucks owns remain closed, most of them in city centers, Mr. Grismer said."
GQ has a piece about how clothing manufacturer/retailer, which never has been shy about taking political positions, has gotten even more vocal in the days leading up to the presidential election - adding a message to the underside of its Regenerative Organic Stand-Up Shorts.
According to the story, the phrase appearing on the tags is one often used by CEO Yvon Chouinard in reference "to politicians from any party who deny or disregard the climate crisis and ignore science."
GQ writes:
"Patagonia has also announced that it will work with BallotReady to encourage people to vote climate-change deniers out of office. It’s not the only brand to go all in on voter turnout this year - many brands are making T-shirts and other merchandise with much tamer messaging and partnering with bipartisan and liberal-leaning organizations alike - but Patagonia has gone further than any other company to make its political intentions clear. Last year, for example, they stopped producing vests for several finance firms, and Chouinard has frequently locked horns with Donald Trump. While only a few years ago most companies would avoid the sort of radical clarity that Patagonia promotes for fear of backlash, it seems more and more that Patagonia’s climate change–centered leftism only builds their fandom - and that it’s good for business."
Someone just sent me your video from this morning. Good news for you is that someone passed on content from your website.
That was funny watching a grown man all by his lonesome in a mask outside. It is funny because – well how could it not be.
This is the classic example of the blind leading. Sheep following.
There is no science in that act. No possible contribution you made to anyone else or yourself or to society by standing in an empty parking lot with a mask on.
Some know the truth, some seek the truth, some think they know the truth, some foster lies disguised as the truth.
Truth is not for everybody.
You're right, It isn't.
May I suggest that you go back and watch the video again?
The truth is that there were several people standing outside the clinic where I had my Covid-19 test done. I'd just been inside, wearing a mask, and had to walk by them to get to the parking lot, so it made sense to keep the mask on.
The truth is that the parking lot wasn't empty. If you watch the video, other people are walking into the clinic, and at one point I actually shifted where I was standing because a car was pulling in next to me into the only available space in the lot. (You wouldn't know that, since I didn't start with a wide/establishing shot of the parking lot.)
The truth is that I'd just been inside the clinic being tested for Covid-19, and wearing a mask outside while waiting for the results simply seemed like the responsible thing to do. Over-cautious? Maybe - after all, I was outdoors where there is far less chance of transmission, and I was for the most part more than six feet from other people.
The truth is I was lucky. My test came back negative. But I would've felt awful had it come back positive and I'd behaved in a way that might've put other people at risk.
The truth is that pretty much everyone else in the parking lot and in the clinic was there for the same test I was, so an overabundance of caution seemed appropriate.
The truth is that wearing a mask wasn't a political statement on my part.
The truth is that I don't think I was trying to deceive anyone with my actions, nor "foster lies disguised as the truth."
It was just one person trying to be responsible, because that's one way that the country will deal effectively with the pandemic - people, one by one, trying to do the responsible thing.
And the truth is that Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, told a Senate committee yesterday that "face masks are the most powerful public health tool we have. I appeal to all Americans to embrace these face coverings … We have clear scientific evidence they work. This face mask is more guaranteed to protect me against COVID19 than when I take a COVID vaccine."
So when you talk about "truth is not for everybody," I'm not exactly sure what you are talking about …
Another MNB reader had a different problem with me yesterday, commenting about our story saying that Amazon-owned Whole Foods Market is planning a new round of price cuts and quoting CEO/co-founder John Mackey as saying, "We’re going to continue to lower our prices over time at Whole Foods. Cut our costs, lower prices, get more business, lower prices, cut costs, and so I think we’re in a virtuous circle right now."
To be clear, I actually questioned this strategy, calling it more of a vicious circle than a virtuous one, since the focus on price is, in the eyes of many, undermining the brand's core value proposition.
This MNB reader wrote:
The rich get richer, thanks to the media, and Whole Foods Market gets to benefit from free exposure and advertising regarding their pricing strategy. You know for an independent natural food store that has to spend precious dollars to generate buzz through local and probably ineffective marketing channels, this sort of thing really blows. And as far as MorningNewsBeat, this sort of "news" only serves to solidify the mass market-centric angle of this publication.
Is MNB designed to have mass appeal? I plead guilty. (I can always use more mass by the way. Tell your friends…)
You're correct that when Whole Foods lowers its prices, it gets more media attention than if an independent operator does. That's because - and you may hate me for this - it matters more, at least in terms of its impact on the marketplace. Whole Foods has more than 500 stores, is owned by Amazon (the purchase price was $13.7 billion), and the moves it makes has a potential impact on every retailer with which it competes. (Since Amazon owns Whole Foods, by extension this actually means every retailer.)
What's interesting to me about this criticism is that it actually comes less than a week after I ran a two-part interview with Benjamin Lorr about his new book, "The Secret Life of Groceries," which actually is a somewhat subversive look at the cost of a mass-market food system, examining the real costs in terms of resources and people. And today, I have an interview with Errol Schweizer, who talks about issues such as food system ethics and egalitarianism - challenging traditional ways of doing business in ways that I'm sure will annoy a number of MNB readers.
So am I seeking mass appeal? Sure. I want an audience. The bigger the better. But do we at least try to give voice to people and ideas outside the mainstream? I'd argue yes … and I'd even like to do more of it. That's how I learn. I hope that's how other people learn, too.
Also responding to yesterday's FaceTime about Covid-19 testing, one MNB reader wrote:
Happy to hear you were negative for Covid-19. Did you get a flu shot for this upcoming flu season? I am just curious because I got a flu shot about 3 weeks ago. I have gotten flu shots every year for the past 7 years. I always made it a point to get mine at least 2 weeks before our industry’s largest trade show, PMA Fresh Summit. It has grown to 22K + attendees the past couple of years so the flu shots have served me well.
I hope you feel better soon!
I already do. Thanks. And I'm getting my flu shot on Saturday morning.
I mentioned yesterday that I don't have access to Walmart+ subscriptions services, nor was I invited to shop on Amazon's new luxury pages. What am I? Chopped liver?
But one MNB reader wrote:
Lighten up, Kevin (regarding feeling underappreciated). There is nothing about Walmart+ to make you want it and you are not the Luxury type of guy...except for good food and wine!
Fair enough.
Yesterday we took note of a CNBC story about how John Mackey, CEO of Amazon-owned Whole Foods, said that "we’ve made three significant price reductions since the merger, and we have a fourth that we’re beginning now … We’re going to continue to lower our prices over time at Whole Foods. Cut our costs, lower prices, get more business, lower prices, cut costs, and so I think we’re in a virtuous circle right now."
Prompting one MNB reader to write:
If the steps that WF lists are sequential, they seem to be misaligned. For most retailers, they work on lowering costs, then reinvest those savings back into price. WF has always had a higher cost structure, which makes it near impossible to make a long-term commitment to lower prices. If and when Amazon exerts a greater influence on WF in the area of reducing the cost structure, then price investments will communicate a longer term commitment, versus a short-term, temporary price reduction program.
We reported that Bruce Springsteen did a virtual First Year Academic Convocation speech for Boston College this year, saying, in part:
"What you’re about to embark on will be the greatest adventure of your young life. You can waste it, you can half-ass your way through it, or you can absorb every minute of what you’re experiencing, and come out on the other end an individual of expanded vision, of intellectual vigor, of spiritual character and grace, fully prepared to meet the world again on its own terms."
One MNB reader responded:
Excellent Bruce Springsteen! Simple, clear and so well put.
As always.
On another subject, from MNB reader Brian Blank:
I can’t believe that you buried the item about KraftHeinz selling off its natural cheese business in the FastNewsBeat section when you had a ready-made (and 12-year-old approved) headline there for the taking: “KraftHeinz Cuts The Cheese."
