business news in context, analysis with attitude

Published on: March 23, 2021

by Michael Sansolo

There’s a sizeable chance that most of the retailers reading MNB have been celebrating some fantastic sales numbers for the past 13 months. To be honest, with the food-away-from-home industry largely shut down, that’s created a pretty nifty scenario for the food-at-home sector.

But let’s get real. At some point (hopefully soon) the pandemic fears and lockdowns are going to end and we’re going to hear homemakers across the land shout out in unison: “I’m not cooking for three weeks! Get in the car, we’re going out to eat.”

Beyond that momentary shift, there’s something else we need to keep in mind. Supermarkets aren’t the only businesses that keep hunting for ways to evolve, to find new ways to win over and delight shoppers. That’s why even in pandemic times McDonald’s has rolled out a new chicken sandwich (just one example) and other innovations are getting a very, very soft opening.

This past weekend, my daughter introduced me to one such innovation and frankly, I think it’s going to work even though the neighborhood in which she lives has almost as many restaurants as residents. The innovation we visited is being called a “virtual food hall,” and frankly, it was pretty darn good.

The virtual hall is called Ensemble and it occupies a small retail space. But that’s all that’s small about it. A local restaurant group created the virtual food hall allowing customers to order items from any of four local eateries, including the well-known Federalist Pig. (Here in the DC area, even eateries get a little governmental connection.)

All Ensemble orders are placed through an app. Customers are e-mailed a code they use to open a locker to find their order ready and waiting. Ensemble has no tables and seemingly no space for them once restaurants open again. There isn’t even a cash register. (Currently, the restaurants in this neighborhood have all placed tables on a now-shut avenue to create the "streetery," complete with some tents and space heaters for cold weather days.)

What Ensemble does have, and what dominates the store’s space, is its kitchen, which, staff assured me, is run by executive chefs from the four restaurants. All orders are prepared on site and, speaking from my first experience, emerge hot, well seasoned and very tasty. The quality, like the prices, has nothing in common with a fast-food restaurant.

The beauty of the virtual food hall is that it allows groups to order vastly different cuisines from different restaurants and yet can collect them at the same place. (For example, our lunch consisted of one pulled barbecue pork plate, a fried chicken sandwich and a shrimp po’ boy. The only complaint came from our beagles, who couldn’t understand why no one ordered bacon.)

Ensemble reminds us is that restaurant innovation continues, which means the battle for share of stomach wasn’t ended by the pandemic. Once Covid is tamed, consumers may go charging back to those restaurants for a break and clearly the foodservice industry isn’t taking any chances on losing decades of momentum thanks to freaky period of lockdowns.

Compete, as the Content Guy likes to say, is a verb.  It’s important to remember that yours isn’t the only business competing, innovating and trying to grow. The other guys are doing the same. Whether at Ensemble or elsewhere, someone is always looking to eat your lunch.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.

Published on: March 23, 2021

Go figure.  The Apple Store figured out another way to surprise and delight customers.  But only some customers.  KC explains, and extrapolates a lesson for other retailers.

Published on: March 23, 2021

An MNB reader sent along a fascinating study, produced by a think tank called RethinkX, suggesting that before long, "the current industrialized, animal-agriculture system will be replaced with a Food-as-Software model, where foods are engineered by scientists at a molecular level and uploaded to databases that can be accessed by food designers anywhere in the world. This will result in a far more distributed, localized food-production system that is more stable and resilient than the one it replaces."

The study goes on:  "The new production system will be shielded from volume and price volatility due to the vagaries of seasonality, weather, drought, disease and other natural, economic, and political factors. Geography will no longer offer any competitive advantage. We will move from a centralized system dependent on scarce resources to a distributed system based on abundant resources."

But let's back up a minute.  This is how ReThinkX frames the transition:

"We are on the cusp of the deepest, fastest, most consequential disruption in food and agricultural production since the first domestication of plants and animals ten thousand years ago. This is primarily a protein disruption driven by economics. The cost of proteins will be five times cheaper by 2030 and 10 times cheaper by 2035 than existing animal proteins, before ultimately approaching the cost of sugar. They will also be superior in every key attribute – more nutritious, healthier, better tasting, and more convenient, with almost unimaginable variety.

"This means that, by 2030, modern food products will be higher quality and cost less than half as much to produce as the animal-derived products they replace.

"The impact of this disruption on industrial animal farming will be profound. By 2030, the number of cows in the U.S. will have fallen by 50% and the cattle farming industry will be all but bankrupt. All other livestock industries will suffer a similar fate, while the knock-on effects for crop farmers and businesses throughout the value chain will be severe.

"This is the result of rapid advances in precision biology that have allowed us to make huge strides in precision fermentation, a process that allows us to program microorganisms to produce almost any complex organic molecule.

"These advances are now being combined with an entirely new model of production we call Food-as-Software, in which individual molecules engineered by scientists are uploaded to databases – molecular cookbooks that food engineers anywhere in the world can use to design products in the same way that software developers design apps. This model ensures constant iteration so that products improve rapidly, with each version superior and cheaper than the last. It also ensures a production system that is completely decentralized and much more stable and resilient than industrial animal agriculture, with fermentation farms located in or close to towns and cities."

Here are some of the economic impacts sketched out in the report:

•  "The cost of modern foods and other precision fermentation products will be at least 50% and as much as 80% lower than the animal products they replace, which will translate into substantially lower prices and increased disposable incomes."

•  "At current prices, revenues of the U.S. beef and dairy industry and their suppliers, which together exceed $400 billion today, will decline by at least 50% by 2030, and by nearly 90% by 2035. All other livestock and commercial fisheries will follow a similar trajectory."

•  "The volume of crops needed to feed cattle in the U.S. will fall by 50%, from 155 million tons in 2018 to 80 million tons in 2030. This means that, at current prices, feed production revenues for cattle will fall by more than 50%, from $60 billion in 2018 to less than $30 billion in 2030."

•  "The average U.S. family will save more than $1,200 a year in food costs. This will keep an additional $100 billion a year in Americans’ pockets by 2030."

You can read the report here.

Published on: March 23, 2021

Boulder, Colorado, law enforcement authorities continue to investigate the mass shooting of 10 people  by a single gunman at a Kroger-owned King Soopers supermarket there.

It was the second mass shooting in the US in a week.

The gunman, who reportedly was using an AR-style rifle in the attack, is in custody, police said.  While the man has been identified, his motive has not yet been disclosed by police. He has been charged with 10 counts of first degree murder.

The shootings started at about 2:30 pm local time yesterday, when the man - who one report said was wearing an armored vest - opened fire.  Some customers rushed to get out of the store, while others barricaded themselves inside the store.

While most of the victims have not yet been publicly identified, one has - Police Officer Eric Talley, 51, an decade-long veteran of the Boulder force who was the first officer to respond to 911 calls.  The Washington Post this morning writes that "For years, Eric Talley had a stable job in information technology that provided for his children and his wife, who educated their seven children in their Colorado home.

"But in 2010, after one of his closest friends died in a DUI crash, he quit, left behind his master’s degree, and enrolled in the police academy at 40 years old, according to his friends and family."

Kroger released a statement that said, in part, "We are horrified and deeply saddened by the senseless violence that occurred at our King Soopers store located on Table Mesa Drive in Boulder, CO.

"The entire Kroger Family offers our thoughts, prayers and support to our associated, customers and the first responders who so bravely responded to this tragic situation.

"We will continue to cooperate with local law enforcement, and our store will remain closed during the police investigation."

Published on: March 23, 2021

Talk about a shift in the numbers.

CNBC reports that announced store openings actually exceed announced store closures this year - a major turnabout from 2020.

According to the story, "U.S. retailers have announced 3,199 store openings and 2,548 closures year-to-date, according to a tracking by Coresight Research. For comparison, the firm recorded a whopping 8,953 closures, along with 3,298 openings last year, as the Covid pandemic upended the retail industry and pushed dozens of businesses into bankruptcy."  At the same time, "The National Retail Federation is forecasting retail sales in the U.S. could grow anywhere between 6.5% and 8.2% this year, with the economy accelerating at its fastest clip in two decades."

One of the things driving the openings:  "The real estate market … presents an opportunity in 2021 for companies looking to grow. They will likely pay less in rent and have more flexible lease terms. A glut of vacancies has left landlords more desperate to fill space and sign deals they wouldn’t have ever considered pre-pandemic."

Among the companies planning a bunch of openings:  Ulta Beauty, Sephora, Burlington Stores, and Dick;'s Sporting Goods.

And another:  Amazon, which is growing its physical footprint through its Amazon Fresh grocery store format, which is expected to have dozens of locations open by the end of the year.

Published on: March 23, 2021

Axios reports that DoorDash "has launched a new initiative to provide same-day on-demand delivery of FDA authorized COVID-19 test collection kits,," partnering with a pair of digital health companies to source the testing kits

According to the story, " The initiative could go a long way in helping make at-home COVID-19 testing more accessible, as many Americans prepare to reenter workplaces and schools."

The program will be available to DoorDash customers in markets that include Baltimore, Chicago, Cleveland, Dallas, Denver, Minneapolis, and Phoenix, with plans to roll out further later this year.  The kits are being delivered via the company's DashMart convenience store business.

Published on: March 23, 2021

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, we've now had 30,578,674 confirmed cases of the Covid-19 coronavirus, resulting in 555,991 deaths, and 22,846,553 reported recoveries.

Globally, there have been 124,376,605 total coronavirus cases, with 2,737,462 resultant fatalities, and 100,356,276 reported recoveries. (Source.)

•  The Washington Post reports that "at least 82.8 million people have received one or both doses of the vaccine in the U.S.  This includes more than 42.5 million people who have been fully vaccinated … 156.7 million doses have been distributed."

•  From the Wall Street Journal:

"Newly reported coronavirus cases in the U.S. edged higher, as many states push forward with vaccinations programs and look to reopen schools.  The U.S. reported more than 50,000 new cases for Monday, according to data compiled by Johns Hopkins University that was published early Tuesday."

Keep in mind that from the beginning, public health experts said that it was important to keep the daily case numbers under 20,000.  While our numbers are better now than they were a few months ago, they're not where they need to be.

•  Just a day after reports that Oxford University and AstaZeneca said that their vaccine was safe and 79 percent effective, and likely would be submitted to US regulators for emergency use authorization, the National Institute of Allergy and Infectious Diseases (NIAID) has issued what the Washington Post called an "unusual rebuke," saying that "it was concerned AstraZeneca used outdated information from the large-scale trial when it reported the results Monday, 'which may have provided an incomplete view of the efficacy data'."

According to the Post, NIAID "urged the company … to work with the U.S. Data Safety and Monitoring Board to review the data and release the updated information 'as quickly as possible'."

•  From the New York Times:

"For the last year, New York City has been running in the shadow of a deadly pandemic, with many city and private sector employees forced to work from home, stripping New York of its lifeblood and devastating its economy.

"But with virus cases seeming to stabilize and vaccinations becoming more widespread, city officials intend to send a message that New York is close to returning to normal: On May 3, the city will compel its municipal office employees to begin to report to work in person … Workers will return in phases over several weeks.

"Mayor Bill de Blasio’s decision to bring the nation’s largest municipal work force back to the office signals a remarkable turnabout in the fortunes of a city that served as the national epicenter of the coronavirus pandemic, coming to symbolize the perils of living in densely packed global capitals.

"The move is meant to broadcast that New York City will soon be open for business, and to encourage private companies to follow suit - lifting the hopes of landlords whose skyscrapers have largely sat empty as office workers stayed home."

•  The Seattle Times reports that "for the first time since the outbreak of the pandemic more than a year ago, Microsoft is allowing its Seattle-area workforce back into the office.

"Microsoft’s roughly 57,000 employees in Redmond, Bellevue and Seattle will have the option to return to the office March 29 … Microsoft is the first major local employer to announce a general return to the office. The Redmond tech giant has for months been allowing a limited number of employees to work from the office."

The story says that employees are allowed to continue working remotely, and that there will be a cap on how many people can occupy shared spaces.

The announcement came as Microsoft released an internal survey saying that "65% are craving in-person face time with their teams. Remote employees also reported being overworked and exhausted — though managers said their teams were more productive than ever.

"Still, Microsoft’s report indicated that 70% of workers want to have the option to work remotely, a future Microsoft is not alone in dubbing a 'hybrid workplace'."

•  The Minneapolis Star Tribune reports that Best Buy, as part of its employee health screening process - workers who go into stores have to fill out a mobile screening questionnaire before going to work - now is providing them with a free Covid-19 at-home test kit if requested.

Workers with any symptoms or exposure are required to quarantine, with pay, while test results are processed.

Best Buy also is giving employees paid time off to get their Covid-19 vaccinations.

•  The New York Times notes this morning that "of the vaccine doses given globally, roughly three-quarters have gone to only 10 countries. At least 30 countries have not yet injected a single person.

"Scientists have long warned that such unfair treatment could not only haunt poorer countries, but also rich ones, if the continued spread of the virus allows it to mutate in ways that undermine vaccines. But the greatest human costs will almost surely be borne by less wealthy nations.

"Already, unvaccinated doctors and nurses have died this year in countries including Kenya, Mozambique, Nigeria and Zimbabwe, depleting health systems that can ill afford to lose any more workers and threatening to diminish the level of care in nations overrun by variants.

"The toll in Africa could be especially profound. The continent has 17 percent of the world’s people, but so far, it has administered roughly 2 percent of the vaccine doses given globally."

Yogi Berra wasn't referring to pandemics when he said, "It ain't over till it's over."  But … the sentiment stands.  Global pandemics are exactly that - global.   It is smart public health policy - not to mention essentially moral and ethical - to minister to people who someone once referred to as "the last of my brothers."  And sisters.

•  Axios reports that "With each shot in the arm, more and more Americans are letting down their guard — seeing family and friends outside the home again, venturing out to eat or relaxing social distancing precautions, according to the latest installment of the Axios/Ipsos Coronavirus Index."

According to the story, "Nine in 10 respondents said they know someone who's already been vaccinated, and 36% said they've been vaccinated themselves. Meanwhile, the share who know someone who died from COVID-19 has leveled off at around one in three, after climbing through 2020."

More stats:  "45% said they'd gone out to eat in the past week, up 12 percentage points from a month ago and the highest share in a year … 48% said they visited friends or relatives outside the home, up nine points from a month ago and the highest share since October … 67% said they're staying home and avoiding others as much as possible, down seven points from a month ago and the lowest share since we began asking the question 11 months ago … 17% said their emotional well being has improved over the past week, the highest share in a year."

But, Axios writes, "It's the unvaccinated in some cases who are returning to activities outside the home at the highest rates … 52% of unvaccinated Americans reported seeing friends and relatives outside the home in the past week, compared with just 41% of those who'd been vaccinated.

"The share of Americans saying they are 'not at all' likely to take the vaccine remained steady at around one in five.

"Their reasons included not trusting the vaccine or in some cases not trusting the government; wanting more information about side effects; or thinking they don't need it because they feel healthy now or already got the virus."

The Associated Press reports that "TSA continues to screen more than 1 million a day, as flying rebounds a bit.

"More than 1.5 million people streamed through US airport security checkpoints on Sunday, the largest number since the pandemic tightened its grip on the United States more than a year ago. It marked the 11th straight day that the Transportation Security Administration screened more than 1 million people, likely from a combination of spring break travel and more people becoming vaccinated against COVID-19."

It isn't what Shakespeare was referring to, but "Lord, what fools these mortals be!"

(By the way, it is a good day when I can work both Shakespeare and Yogi Berra into the commentary.)

Published on: March 23, 2021

With brief, occasional, italicized and sometimes gratuitous commentary…

•  In comments delivered to Citigroup’s Retail Madness Virtual Conference, Albertsons CEO Vivek Sankaran said that the company's curbside pickup service, Drive Up & Go, now is the fastest growing component of its business.  Sankaran also said that he expects e-commerce to comprise 20 percent of Albertsons' total business.

Sankaran said that Albertsons' investment in micro-fulfillment technology  is paying off.  The company has been piloting two micro-fulfillment centers, and he said that another seven will be opened this year.  However, Sankaran declined to predict how many MFCs eventually would serve the company's more than two thousand stores.  (MFCs generally serve pods of 6-10 stores.)

•  Reuters reports that "Amazon workers in Italy went on a 24-hour strike on Monday in the first such action by the U.S. company's entire logistics operation in the country, including third-party delivery service providers."  The strike was called after several unions failed to reach agreement with Amazon in talks that took place in January;  the disagreement reportedly is not over pay increases, but rather the unions' call for more humane working conditions.

I'm not sure if we're going to hear Italian trade unionists singing "Sweet Home Alabama," or Amazon employees in Alabama singing "Bella Ciao."

Published on: March 23, 2021

•  Marketing Daily reports that Procter & Gamble is launching a spring advertising campaign for Tide detergent that "aims to get consumers to wash their clothes in cold water, revving up efforts to get people away from the idea that hot water and suds is the way to go.

"The company will partner with the Hanes apparel brand to push the cold-water angle on Hanes packaging.

"The multiyear deal means the apparel brand will feature a 'wash in cold' call-to-action on its packaging, along with coupons and product samples of Tide Pods.

"Hanes will emphasize the cold water wash will do a good job even on underwear, T-shirts and socks.

"According to Tide, over two-thirds of all greenhouse gas emissions (GHG) involved in the entire Tide laundry lifecycle come from the consumer use phase.  That’s because 90% of the energy involved with a load of wash comes from heating water to do it."

The goal is said to be having 75 percent of laundry loads in the US washed using cold water.

Published on: March 23, 2021

•  Elgin Baylor, an 11-time National Basketball Association All-Star, has passed away.  He was 86.

ESPN writes, "Considered one of basketball's greatest players, Baylor was an 11-time All-Star and 10-time All-NBA selection during his 14 seasons with the Lakers from 1958 to 1971. He was the 1958-59 Rookie of the Year as well as the All-Star Game MVP that year. He averaged a double-double for his career, posting 27.4 points and 13.5 rebounds per game … He holds the single-game Finals scoring record with 61 points against the Celtics in 1962 … Baylor's scoring highlights also included becoming the first player to score 70 points in a game and going for 71 against the New York Knicks in November 1960."

Published on: March 23, 2021

…will return.