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    Published on: September 9, 2021

    Today's business lesson comes compliments of tennis phenomenon Leylah Fernandez, just one of the young crop of talented players who, KC says, have disrupted business-as-usual at the US Open and who show what is possible in the world outside tennis.

    Published on: September 9, 2021

    The Jacksonville Daily Record has an interview with Kroger CEO Rodney McMullen in which he says that by entering Florida with a pure-play e-commerce model - building high-tech distribution centers rather than stores to build its consumer business there - the company is not looking to steal business from market leader Publix Super Markets.

    Here's the quote:

    "We don’t look at it as we’re going to go and take (Publix’s) Florida’s market share away … We look at, here’s what we offer uniquely and we’re going to do an incredible job serving an individual customer. And then we’ll earn the business over time."

    KC's View:

    I have enormous admiration for Kroger, but I had to chuckle when I read this story.

    I mean, really?

    When a company starts to do business in a market where it does not operate, the predicate has to be that it will be able to steal (earn?) business away from those retailers already doing business there.

    In Florida, Publix is the biggest target because it is the biggest grocer.  Though i'm sure Kroger will be happy to steal business away from anyone - including Amazon and Walmart.

    The billion-dollar bet being made by Kroger is that it can use name/brand recognition (because so many people in Florida came from markets served by Kroger) to build a consumer business without building stores.  I've always thought that this is a compelling idea, especially because Kroger's data analytics capabilities make it possible to reach out to those people to an extent a lot of other retailers can't.  

    Kroger better steal some business from Publix if it is going to make this bet pay off.

    By the way … Publix has just announced that it is going to open its first store in Kentucky, a market in which Kroger has stores.  In fact, best I can tell, there is a Kroger about two miles from the Publix planned location - and I bet Publix would like to steal some business from it.

    I like companies that play offense and defense.

    Published on: September 9, 2021

    Walmart yesterday announced what it called "a cross-platform partnership with Meredith Corporation, the leading multi-platform media company reaching nearly 95% of women in the U.S., to help millions of busy families plan and prepare meals faster and more easily through AI-powered meal planning, shoppable recipes, visual search, chatbots, and more.

    The key to the partnership is that it will make meal-related content shoppable, allowing customers to plan their meals on Meredith's sites and shop for ingredients on Walmart'

    s website.

    "The partnership pairs Meredith’s expertise in food content, hyper-local consumer insights and proprietary technology platform with Walmart’s wide customer reach, omnichannel presence, deep product assortment, convenient shopping experience and delivery options. This is the latest strategic addition to Walmart’s thriving grocery eCommerce business."

    The announcement notes that Meredith is predicting that "views of 'Meal Plans'-related articles and plans will be up 30% across its sites in 2021 versus last year."

    Among Meredith's titles are People, Better Homes & Gardens, Allrecipes, Southern Living, and Real Simple, with a reader reach that totals some 150 million a month.

    KC's View:

    Makes sense.  And if you're going to have a formidable offering in this space, it makes sense to be between two giants in their spaces.

    Published on: September 9, 2021

    From Bloomberg:

    "The Biden administration is taking aim at major meatpackers, charging that 'pandemic profiteering' is squeezing consumers and farmers alike, with a few companies that dominate the industry raking in record profits.

    "White House National Economic Council Director Brian Deese said Wednesday that increases in the prices of beef, pork and poultry are responsible for half the jump in food prices since late 2020, yet farmers have seen little gain in what they are paid by giant meat companies."

    "'It raises a concern about pandemic profiteering, about companies that are driving price increases in a way that hurts consumers who are going to the grocery store,' Deese said. What’s happened 'isn’t benefiting the actual producers, the farmers and the ranchers that are growing the product'."

    The industry hit back.

    North American Meat Institute COO Mark Dopp issued the following statement:

    "As with almost every industry, meat and poultry packers and processors of all sizes have been, and continue to be, affected by the global pandemic and the inflationary trends that challenge the U.S. economy.  American consumers of most goods and services are seeing higher costs, largely due to a persistent and widespread labor shortage. The meat and poultry industry is no different. Issuing inflammatory statements that ignore the fundamentals of how supply and demand affects markets accomplishes nothing. Meat and poultry markets are competitive and dynamic with no one sector of the industry consistently dominating the market at the expense of another."

    Bloomberg writes that Tyson also “categorically rejects” the accusations:

    “We have seen a rise in availability and quality of beef, while the price has become more affordable over the past quarter century,” the company said.

    KC's View:
     

    It sort of sounds like Tyson was answering a different question.

    Seems to me that it is possible for two things to be happening at the same time - that, in fact, a labor shortage is having an impact on the supply chain and resulting in product shortages and higher prices, and that meatpackers could be taking advantage of the moment to add to their margins.

    The proof will be in the pudding.  Let's see what profits look like when these companies report their financial results in coming quarters.  The bet here is that they'll be doing just fine, that their senior executives and investors will be amply rewarded, and they'll be hoping that everyone will have forgotten these specific accusations.

    But let's see.  I'm willing to be surprised.

    Published on: September 9, 2021

    MNB Covid-19 Coronavirus Update

    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 41,397,587 Covid-19 coronavirus cases, resulting in 671,183 deaths and 31,667,507 reported recoveries.

    Globally, there have been 223,509,451 coronavirus cases, with 4,612,004 resultant fatalities and 200,055,619 reported recoveries. (Source.)


    •  The Centers for Disease Control and Prevention (CDC) says that 73.3 percent of the US population age 12 and older has received at least one dose of vaccine, with 62.4 percent being fully vaccinated.


    •  From the New York Post:

    "They are the new 99 percenters - the vast majority of Americans who are getting serious cases of COVID-19 or dying are unvaccinated.

    "While COVID-19 cases continue to spike across the US, the overwhelming majority of deaths and hospitalizations from the virus continue to overwhelmingly be among unvaccinated Americans, according to data from the Centers for Disease Control and Prevention.

    "Between Jan. 1 and Aug. 30, about 99 percent of hospital admissions were among those who hadn’t been fully inoculated, which is defined by the CDC as two weeks after the second dose of a Pfizer or Moderna shot or two weeks after Johnson & Johnson’s single-dose jab."


    •  Axios reports that Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID)says that "Americans are now getting infected with COVID-19 at 10 times the rate needed to end the pandemic, which will persist until more people get vaccinated."

    "The endgame is to suppress the virus," Fauci says.  "Right now, we're still in pandemic mode, because we have 160,000 new infections a day. That's not even modestly good control ... which means it's a public health threat … In a country of our size, you can't be hanging around and having 100,000 infections a day. You've got to get well below 10,000 before you start feeling comfortable."

    Fauci notes that once enough people have been vaccinated, "you'll still get some people getting infected, but you're not going to have it as a public health threat."


    •  And, a cautionary note from the Wall Street Journal:

    "The last flu season was mild. The coming one is expected to be worse, concerning hospitals overrun by Delta cases. 'We are worried,' one hospital official said.

    "The season could also strike earlier and more severely than usual, doctors and researchers said, because many people haven’t been able to build up their natural immune defenses while working from home and avoiding strangers.

    "Several factors are behind the expectations for a potentially difficult flu season, though it is notoriously hard to predict how badly the virus will hit."

    Published on: September 9, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Axios reports that "Amazon's proposed $8.45 billion purchase of Hollywood studio MGM is presenting the Federal Trade Commission, which will soon decide whether to block the deal, with a kind of ideological Rorschach test.

    "Progressives see it as self-evident that regulators should not allow Amazon to further extend its already vast market power. They expect to find an ally in FTC chair Lina Khan, who built her reputation making the case that Amazon is a monopolist that should be checked.

    "But business groups and conservatives point out that Amazon has nothing like a lock on the highly competitive marketplace for streaming movies and TV shows, making any case against the MGM deal unlikely to pass muster in court."

    It is an interesting debate.  Folks who oppose the acquisition say that it is reflective of an omnivorous Amazon, sucking up so much market power, spread across so many industries, that a line has to be drawn to prevent further growth and allow for greater competition.  But the opposition would argue that even if it acquires MGM, Amazon won't be the biggest studio out there - there is a ton of competition, and the movie/TV business can be extremely fickle, with size hardly being a. guarantee of success.

    Me, I'm with the latter group.  But I also think that the FTC is likely to try to block the deal, and that the whole thing will end up in the courts, which will be charged with figuring out how competition should be defined for the 21st century.


    •  The New York Times reports that "the California State Senate on Wednesday approved a bill that would place limits on production quotas for warehouse workers.

    "The bill, which passed the Senate 26-to-11, was written partly in response to high rates of injuries at Amazon warehouses. The legislation prohibits companies from imposing production quotas that prevent workers from taking state-mandated breaks or using the bathroom when needed, or that keep employers from complying with health and safety laws.

    "The Assembly, which passed an initial version in May, is expected to approve the Senate measure by the end of the state’s legislative session on Friday … Gov. Gavin Newsom had not indicated before the vote whether he would sign the bill, but his staff was involved in softening certain provisions that helped pave the way for its passage."

    Published on: September 9, 2021

    •  The New York Times reports that the California State Assembly yesterday passed a bill that would ban companies from using recycling symbols "unless they can prove the material is in fact recycled in most California communities, and is used to make new products … The measure, which late Wednesday received enough votes to pass the assembly, is expected to clear the State Senate later this week and be signed into law by Gov. Gavin Newsom, is part of a nascent effort across the country to fix a recycling system that has long been broken."

    Proponents argue that this is all about truth-in-advertising.  I would agree … the existence of those familiar arrows on packaging carries with it the clear implication that the packaging can be and is being recycled.  (Assuming, of course, that consumers actually do their part.). 


    •  The Food Industry Research and Education Center (FIRE) at Western Michigan University’s Haworth College of Business announced this week that it "will offer professional training, education and category management certification for professionals in the consumer packaged goods and retail industries this fall. The program is in partnership with Learning Evolution (LE), a leader in online professional training and certification solutions … The first jointly developed training program is for a two-level Professional Category Management Certification. LE will develop, maintain and provide technical infrastructure for the certification curriculum."

    Published on: September 9, 2021

    A reaction from one MNB reader about a continuing subject we address here:

    Instacart is just one competitor of the current age retailer.  It is becoming increasingly difficult for retailers to maintain exclusivity with their customers.  On the physical store front, customers can shop many options in their local areas.  On the e-commerce front the choices expand to global competition.  At least for now, Instacart enables retailers to maintain some connection with their customer, so that they can capture sales from the ones that don’t or can’t shop in their store.  The retailer needs to offer more to the customer instead of whining about instacart.  They should be asking themselves what needs to change so the customer wants to shop with us.  What needs to change in our current model to make the experience a pleasant one?  What do I need to do to create “the experience”?  Has anyone ever noticed that each chain has a different smell when you walk in the door?  The olfactory response is your strongest.  Does your store smell like fried chicken or fresh flowers?  Hmmm, maybe that would be a good place to start.  These chains sure have: Wegmans, Trader Joe's, Whole Foods, Uncle Giuseppe’s, Dave's, Stew Leonard’s … just to name a few.


    And, regarding Marc Lore's vision for a new urban utopia, MNB reader Phil Herr wrote:

    Hi Kevin, I read with interest the story about Marc Lore’s vision for a sustainable city. And while I have no idea of whether or not it will be successful, I am struck by the ventures and visions of our contemporary billionaires.  Andrew Carnegie built libraries, Bill Gates seeks to eradicate disease and other billionaires have created foundations to address social issues.

    By contrast Bezos, Musk and now Lore are seeking projects that transcend society’s problems. While I don’t want to resort to the trope that suggests “how many people can we feed/clothe/educate with these billions”?, I can’t help but feel irritation (anger?) that while the world is literally on fire, they choose to bypass our problems to seek out enterprises that are likely to immortalize themselves. It is almost as if they are saying, “screw it, this one is done for, let’s head somewhere else.”

    Sad.

    I'm not sure I agree, though I certainly understand your perspective.

    I guess I'd ask whether these billionaires are trying to "bypass" our societal problems, or "transcend" them?

    Governments - at least, our government, as currently constituted - are quite literally as well as figuratively trying to put out fires.  It is almost impossible to to have a long-term focus, like trying to builds an infrastructure for the future, when it seems politically impossible to even repair the infrastructure of the present.

    Bezos isn't just flying rockets;  he's also contributing enormous sums to fight climate change (though it also can be argued that Amazon contributes mightily to environmental problems).  Musk may also be flying rockets, but his belief in electric cars that will help eliminate the use of fossil fuels could make a major contribution to fighting climate change.  And Lore's vision for an urban utopia has a major sustainability component.  

    Meanwhile, one of our current problems is that there are folks out there who still don't believe that climate change is an existential problem facing what appears to be an increasingly fragile planet.

    So, maybe they're not saying "screw it, this planet is done for."  Maybe they're saying, "If nobody else is going to have long-term vision, I will."

    Not maybe not so sad after all.  Maybe hopeful.