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    Published on: April 30, 2021

    Food trucks catering weddings?  That seems to be the trend of the moment.  It's a good business lesson.  Plus, KC ponders if one of those trucks would've been a good idea when he got married.

    Published on: April 30, 2021

    by Kevin Coupe

    I'm not a composter, and had to go to Wikipedia this morning just so I could be clear about exactly what composting is:

    At its simplest level, composting requires gathering a mix of 'Greens' and 'Browns'. Greens are materials rich in nitrogen such as leaves, grass, and food scraps. Browns are more woody materials rich in carbon-like stalks, paper, and wood chips. The materials are wetted to break them down into humus, a process that occurs over a period of months.

    The story that made me look up "composting" was in the New York Times, and it reported that "the Colorado State Legislature passed a bill on Tuesday that would allow composting of human remains in lieu of traditional processes like burial and cremation … If Gov. Jared Polis signs the bill into law, which he said he would, Colorado would become the second state to legalize human composting. Washington State did so in 2019, and legislators in Oregon, California and New York have proposed human composting legislation.

    It seems to be a practice that has some level of bipartisan support:  liberals like it because of the environmental implications (one expert says that the practice saves "one metric ton of carbon dioxide for each body that is composted rather than cremated or buried traditionally"), while conservatives include "farmers or ranchers who really like the idea of being connected to the land that they were born and raised on.”

    The good news for food companies is that probably don't have to worry about adding "grown in compost made from human remains" to the labels of the products they sell.  At least in Colorado, the Times writes, "it would be illegal to sell the soil produced from human compost or to use it to grow food for human consumption."

    Until, of course, someone finds out that human compost is particularly fertile … and then, there will be a run on black market human compost that will almost certainly end up with a scene like the Gourmet Club's Komodo dragon dinner in The Freshman.

    Now that'll be an Eye Opener.

    Published on: April 30, 2021

    Amazon said yesterday that its Q1 revenue was up 44 percent compared to the same period a year ago, to $108.5 billion.  Net income for the period more than tripled to a record $8.1 billion.

    Some of the media coverage:

    •  From the Seattle Times

    "The pandemic has brought record profits for Amazon, as homebound shoppers have turned to online retail amid a wave of physical store closures and lockdowns. The number of subscribers to Amazon’s Prime membership club rose by nearly 33% in the past year, from 150 million to more than 200 million.

    "Amazon forecast continued growth, estimating revenue of between $110 billion and $116 billion in the quarter ending in June; that would represent growth of between 24% and 30% compared with the same period last year. Analysts, on average, had estimated second-quarter sales of $108.4 billion, according to data compiled by Bloomberg."

    •  From GeekWire:

    "Even as life returns to some level of normalcy in parts of the world, Amazon’s growth continues to accelerate, much like other tech powerhouses such as Microsoft, Facebook and Apple, which all reported giant revenue gains this week … Amazon’s cloud business was up 32% at $13.5 billion, with $4.1 billion in operating income, continuing to help drive Amazon’s profits. AWS is now a $54 billion annual sales run rate business. A new report from Canalys shows AWS with a 32% share of the cloud infrastructure services market, ahead of Microsoft (19%) and Google (7%). Cloud infrastructure spending spiked 35% to $41.8 billion in Q1, according to Canalys."

    •  From Variety:

    "More than 175 million Prime members have streamed TV shows and movies in the past year.

    "Founder Jeff Bezos revealed the new figure in announcing the Q1 results, adding that Prime Video streaming hours are up more than 70% year over year. He also noted that Amazon Studios received a record 12 Oscar nominations and two wins, and called out the performance of the company’s AWS cloud division, which now has a $54 billion annual sales run rate."

    •  From the Wall Street Journal:

    "The company said Thursday that it expects its annual Prime Day shopping extravaganza to occur in June. The event, which is typically held in July, is a windfall for sales.

    "Amazon Chief Financial Officer Brian Olsavsky said the company is focused on building out its one-day shopping service and continues to zero in on employee hiring and expanding warehouse capacity. 'The economy is starting to open up, and there is a lot of need for new employees for a lot of different industries,' he said."

    KC's View:

    This seems like a good place to remember some of the core values at the heart of Amazon's approach … that it doesn't want to sell stuff, but rather wants to make it easier to buy stuff … that it wants to innovate with an "every day is Day One" culture … and that … and that it wants to continue adding value to its Amazon Prime offering to the point where it would be irresponsible not to be a member.

    And then, there's the bottom line - that everything Amazon does is rooted in customer-centricity.

    Look, there's no question that Amazon has issues.  There are legitimate issues that can be discussed about its approach to distribution center labor.  And, there will be constant regulatory issues being raised by both sides of the aisle.

    But one strikes me as being evident - that Amazon will continue to move forward, with its foot down hard on the gas pedal.  Its goal is for everyone else to have to play catch up.

    Published on: April 30, 2021

    NielsenIQ is out with its Omnichannel Shopping Fundamentals Survey, concluding that consumers are making delivery speed their top priority when placing online orders.

    According to the survey 61 percent of respondents - largely interviewed during March 2021 - said they want their orders delivered as fast as possible.  Just 39 percent said that they would accept slower delivery speeds if it would cut down on packaging or could reduce the number of trips that need to be made by the delivery services.

    KC's View:

    The sad reality - and I'm actually not sure how sad it is - is that many of us have become addicted to speed.  Especially when certain companies have made over-delivering on promises part of the culture and infrastructure.

    Published on: April 30, 2021

    The North Dakota Retail Association and the North Dakota Petroleum Marketers Association’ have filed a lawsuit against the Federal Reserve Board of Governors, calling for a lowering of interchange fees charged by banks for debit card transactions.

    This is the second time the groups have sued the Federal Reserve on this issue;  they won a 2011 case, though the decision was overturned on appeal.

    FMI–The Food Industry Association released a statement from its vice president, Political Affairs, Hannah Walker, supporting the suit:

    “FMI was an original plaintiff in a November 2011 lawsuit against the Federal Reserve Board of Governors and argued it set the regulated rate too high and did not meet the statutory requirement that it be reasonable and proportional to the issuer costs.  Now, almost a decade later, the issuer costs have continued to go down, but the regulated rate has stayed artificially and unjustifiably too high. FMI members pay some of the highest swipe fees in the industrialized world, and it is time for the Fed to provide the relief that was envisioned in the debit reform law.”

    She continued, “Banks have - for years - exponentially profited off the artificially high and unchecked credit and debit card swipe fees merchants pay, and it’s the shopper who ultimately suffers. According to Nilson Report, processing fees paid by U.S. merchants to accept card payments totaled $116.4 billion in 2019, which is up 88% since 2009."

    Published on: April 30, 2021

    The Washington Post this morning reports that the nation is in the middle of a chicken shortage - and not just the wing shortage that many were anticipating.

    It seems, the Post writes, that "the poultry paucity has arrived, heralded by a series of fast-food executives describing in earnings calls their stores’ struggles to stock enough chicken - nuggets, tenders, wings, patties, all shapes and sizes - to keep pace with legions of peckish Americans."

    Some context:

    "Chicken has for years been the most popular meat in the United States and experts and analysts have cited several reasons for the current deficit. Some are related to the coronavirus — pandemic-spurred disruptions in the market and supply chain and an increased demand for a comfort food that is takeout- or delivery-friendly. Others, industry watchers say, include increased competition, volatile feed prices and even the deadly winter storms that swept over the South in February, halting the work of chicken processors."

    The Post writes that "one industry official in North Carolina predicted the crunch would get more acute as the weather warms and more Americans begin grilling regularly."  That official also said that "what we need is a four-winged chicken."

    KC's View:

    Would this be a cluster-cluck?

    Published on: April 30, 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 a total of 33,044,068 Covid-19 coronavirus cases, resulting in 589,207 deaths, and 25,641,574 reported recoveries.

    Globally, there have been as total of 151,240,633 coronavirus cases, with 3,182,093 resultant fatalities, and 128,650,078 recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 54.9 percent of Americans 18 years of age or older have received at least one Covid-19 vaccination, and 38.4 percent have received their full dosage.

    • The Wall Street Journal reports this morning that "as more Americans are vaccinated against Covid-19 and as rules on social distancing are relaxed, interest in activities such as travel and live entertainment is starting to recover, new data on app usage suggest.

    "Trends seen from a range of sources, including information on active users of a variety of consumer apps as estimated by the data tracker Apptopia, indicate that those factors, along with warming weather, federal aid dollars and a general desire to get out of the house, are helping some consumer and social activities approach pre-pandemic levels."

    Published on: April 30, 2021

    •  CNBC reports that "for the first quarter, Shopify posted revenue of $988.6 million, which was up a whopping 110% compared with a year prior and trounced consensus estimates of $862.7 million."

    According to the story, "Shopify cautioned that it expects revenue to keep growing in 2021 but at a slower rate than what it experienced last year … The company highlighted that gross merchandise volume more than doubled to $37.3 billion in the quarter as a sign that momentum remains robust. GMV is a metric often used in the e-commerce industry to measure the total value of goods sold over a certain period of time."

    Published on: April 30, 2021

    •  From the Wall Street Journal this morning:

    "The U.S. pork industry faces a new speed limit on hog slaughtering, the result of a court ruling that worker groups welcomed and industry officials warned could disrupt farmers and processing plants.

    "The U.S. Agriculture Department has notified pork processors that plants running at higher speeds should prepare to process no more than 1,106 hogs an hour, meat industry executives said. That guidance follows a March federal court ruling that found the USDA, which regulates meatpacking plants, hadn’t fully assessed how faster processing affects worker safety.

    "Slowing the lines that slaughter hogs and disassemble carcasses would affect some of the U.S. pork industry’s biggest plants, including facilities owned by JBS USA Holdings Inc., Clemens Food Group, and Seaboard Corp., that together represent nearly a quarter of U.S. pork processing capacity. The shift would partially reverse the USDA’s 2019 revamp of hog slaughtering rules, representing a victory for labor unions and worker advocates who argued faster-moving processing lines challenge workers and inspectors to keep up, jeopardizing employee and food safety."

    •  The New York Times reports this morning that McDonald's is saying that "sales of Big Macs, chicken nuggets and french fries got back to pre-pandemic levels in the first part of the year.

    "Global same-store sales grew 7.5 percent in the first quarter from the year-earlier period. That was driven by a big jump of 13.6 percent in the United States, McDonald’s reported. Revenues for the quarter rose to $5.12 billion, topping the $4.7 billion brought in a year ago as well as the $4.9 billion in the first quarter of 2019, before the pandemic struck.

    "Chris Kempczinski, the president and chief executive officer of McDonald’s, touted the company’s rebound, noting that it had occurred 'even as resurgences and operating restrictions persist in many parts of the world'."

    Published on: April 30, 2021

    Glen Terbeek has a thought prompted by our story about BJ's Wholesale Club downsizing its headquarters because the pandemic illustrated less of need for so much space:

    So maybe when the virus is over, retailers should change from “Work From Home” to "Work From Store” in the future.  "Work From Headquarters" is so old fashioned!  Headquarter could/can be spread throughout the stores in the chain to be close to the markets, shoppers and competitors.

    Regarding what we referred to as the death of the 24-hour store, one MNB reader wrote:

    I wouldn’t use Covid as a main reason they can’t get people to work the 3rd shift.  That shift has always been very difficult to staff for any locations.  Quality of personnel, security, shrink, cost to keep the lights on, and low sales have all contributed to the loss of 24 hr locations.  Covid just added to the reasons. 

    MNB reader Michael Seelig wrote in about our coronavirus coverage, especially mask guidance:

    I have not done an exhaustive search, but in the several articles I have read and news stories I have seen, no one is asking how we will know who is vaccinated and who is not. Now, I am not proposing any type of vaccine passport, or tattoo. However, if I head to my local farmers market and half of the folks are no longer wearing a mask, and I suspect the number will be higher, how am I to be relatively confidant that everyone is following the rules. Over the past year we have seen way too many examples of folks who refuse to do so.

    Regarding Sephora's plans for its Kohl's boutiques, one MNB reader wrote:

    Curious what Sephora has learned from its similar in store shops at JC Penney.  I have never, not once, had a good experience in one.
    Some kind of issue at every visit - unhelpful and unknowledgeable staff, horrific out of stocks, variable pricing between online and/or standalone Sephora storefronts, and the inability to use Sephora gift cards as a form of payment or return/exchange items purchased at a JCP location to a standalone store and vice versa. 

    In other words, the kind of things that can kill a brand.  Not surprising for JC Penney.

    We had the story yesterday about Amazon giving  a half-million employees a raise, which prompted MNB reader Kelly Dean Wiseman to write:

    It’s funny how the article you quoted from listed Amazon as “leading the industry” at $15/hour.

    Based on what I see $15 is quickly falling behind… 

    Another MNB reader wrote:

    This goes back to the additional story.  Of this $2.5 billion investment, how much will affect their prices to the consumer?  Will they take a margin hit?  Will they further squeeze the manufacturer?  Both? It will have to come from somewhere.  It is not an investment if you ask someone else for the money.

    We took note the other day of a New York Times story about how consumers should expect prices to go up in coming months, as a receding pandemic makes it more palatable for manufacturers to raise their prices because of rising commodity costs, and retailers feel empowered to pass those increases on to shoppers as opposed to absorbing them.

    I commented:

    The guess here is that retailers will pass along the increases until a retailer a) decides to absorb the hikes and b) make a marketing and differentiating point out of the fact that its prices are lower.  Then others will do the same, and then they'll start pressuring suppliers for lower prices.

    Which seems to be how the game always is played.

    One MNB reader responded:

    I wonder if the NYT will write a story that talks about the BS fees, charges, programs and high margin requirements of the retailers.  That is also how the game is played.  Retailers are good, manufacturers are bad.  You want to open a friend’s eye’s who are not in the food industry, tell them how much the manufacturer has to spend in slotting just to get on the shelf.  Tell them how much one little block in the ad costs.  Tell them how much margin the retailer demands in the selling price to their customers. Then tell them about the covid increased fees they charge for late deliveries, bad pallets, lumpers, mysterious damages, etc.   Watch your friends' minds explode.  Now that, is a REAL story.  If retailers, and some do, just worked on selling goods instead charging fees, maybe their prices would actually go down.  Hmmm. Manufacturers raising costs?  Just another partial story from NYT.

    That just wasn't the story the Times was working on.   Not everything is a liberal media conspiracy.

    Published on: April 30, 2021

    …will be back next week.

    In the meantime, I hope you have a great weekend, and I'll see you Monday.

    Stay safe.  Be healthy.