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    Published on: September 17, 2021

    Reporting in (live!) from the annual Organic Produce Summit (OPS) in Monterey, California, KC considers the challenges facing the industry in both the retail and supplier segments, including alternative means of harvesting product (in the loosest sense of the word "harvest").  As always, these challenges also create opportunities.

    Published on: September 17, 2021

    by Kevin Coupe

    I was interested in a story that ran on Gizmodo yesterday about how "beginning on September 15, anyone who once subscribed to HBO via their Amazon Prime Video account will have their subscription terminated as part of a deal cut by HBO’s parent company, WarnerMedia, to remove the channel from Prime Video’s Channels service.

    "Previously, a placement deal that secured HBO’s presence in the Amazon Channels store had allowed users to access regular HBO programming within the Amazon Fire TV user interface, allowing customers to easily sign up through their Amazon accounts."

    Now, you may be wondering what this has to do with retail.

    Fear not.  There's a lesson in here.

    The story says that even though HBO will lose some five million subscribers when the current deal expires, the folks at WarnerMedia - which owns HBO - decided that it wanted to cut out the middleman in its relationship with viewers.

    Andy Forssell, the chief executive over at HBO Max, says that "a short-term culling makes sense in the long run if it will mean that the company can consolidate access in order to cultivate a more direct relationship with consumers."

    Here's the exact quote:

    “It’s important for us to own the customer,” Forssell said. “If the viewer is in the app, we can tailor the home page to them. We can tailor what they show them next. We can respond to that in real time.”

    Which, of course, spoke to my conviction, expressed here ad nauseam, that retailers have to be careful in developing relationships with outside vendors (you know what I am talking about here) that end up owning their lists, their data and, potentially, their customers.

    “It’s important for us to own the customer."

    That's the Eye-Opener.

    Published on: September 17, 2021

    CNBC reports that "retail sales posted a surprise gain in August despite fears that escalating Covid cases and supply chain issues would hold back consumers, the Census Bureau reported Thursday.

    "Sales increased 0.7% for the month against the Dow Jones estimate of a decline of 0.8%."

    At the same time, the CNBC story says, the US Department of Labor reported that "weekly jobless claims increased to 332,000 for the week ended Sept. 11," higher than the Dow Jones-predicted 320,000.

    According to CNBC "Economists had expected that consumers cut back their activity as the delta variant continued its tear through the U.S. Persistent supply chain bottlenecks also were expected to hold back spending as in-demand goods were hard to find."

    KC's View:

    As Jeff Goldblum says in the original Jurassic Park, "Life finds a way."

    He said more than that, of course.  But he was a mathematician, not an economist.  (Meaning, I think, that his numbers add up.)

    But seriously … observers say that the back-to-school season - many are reopening after being closed all or most of last year - almost inevitably would lead to a sales increase.

    And economists also are saying that the slight rise in the unemployment rate isn't worth worrying about since it may have been the result of businesses that were shuttered down south by Hurricane Ida.

    Published on: September 17, 2021

    Bloomberg reports that "a startup that makes cultured mozzarella and ricotta cheeses without cows has just got record funding from investors looking to tap the growing market for environmentally friendly dairy alternatives.

    "Berlin-based Formo will use the $50 million of Series A funding - a record for a European foodtech - to expand its product range into mature and ripened cheeses like cheddar and gruyere. The company will also scale up its precision fermentation technology."

    “What our products contain are the actual milk proteins, but we don’t get them from a cow,” Britta Winterberg, Formo’s co-founder and chief scientific officer, tells Bloomberg. “We get them from our micro-organisms."

    The story goes on to say that "investors are putting money into a new generation of startups that seek to replicate the pleasures of eating cheese, without the climate-warming impact of livestock farming. Companies including Miyoko’s Creamery in the U.S. and Sweden’s Stockeld Dreamery have secured funding in recent weeks, while bigger companies including Oatly Inc. view it as a new frontier for product expansion."

    KC's View:

    Fresh and creamy mozzarella is one of the great pleasures of being alive.  Am I being environmentally irresponsible to not want it replaced, to not want future generations to grow up without knowing what it tastes like?

    Published on: September 17, 2021

    The New Yorker has an excellent piece about the water emergency facing the state of California - an emergency that, because California is such an enormous source of agricultural products, has implications for the entire country.  In fact, the entire world.

    An excerpt:

    "Life-style adjustments help, but eighty per cent of water usage in California is agricultural. Almonds are famously water-intensive, and so is alfalfa, a top agricultural commodity for California and a preferred feed among livestock handlers. In an arrangement of synchronicity known as the dairy-forage continuum, alfalfa, 'the queen of forages,' is one of the state’s highest-acreage crops, and California is the leading dairy producer in the United States: nearly two million dairy cows loiter about, chewing.

    "California exports about fifteen per cent of its alfalfa, to markets in China, Saudi Arabia, South Korea, Japan, and the United Arab Emirates - areas where demand for dairy products is rising. In the twenty-tens, the cultivation of animal-feed grasses was banned in Saudi Arabia, owing to unsustainable water consumption, and Almarai, a multinational dairy company based there, purchased thousands of acres of farmland in California and Arizona, and used them to grow alfalfa. Foreign investment in California farmland is not new - international firms, many British, own more than a million acres - but the cultivation of a water-intensive crop in a drought-addled state has proved controversial: 'We’re not getting oil for free, so why are we giving our water away for free?' an Arizona county politician once asked."

    In other words, with the drought comes nothing but implications.

    You can read the story here.

    Published on: September 17, 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…

    •  Here are the current US Covid-19 coronavirus numbers:  42,634,054 total cases … 688,486 deaths … and 32,347,726 reported recoveries.

    The global numbers:  227,837,899 total cases … 4,684,172 fatalities … and 204,490,578 reported recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 74.2 percent ion the US population age 12 and older has received at least one dose of vaccines, with 63.5 percent being fully vaccinated.

    •  The Cincinnati Enquirer  reports that Kroger "is requiring its workers – again – to wear masks to prevent the spread of COVID-19.

    "The tightening of safety requirements comes months after they were relaxed following an easing of the pandemic. A national resurgence of cases, driven by the highly infectious delta variant of the novel coronavirus, has intensified debate on whether mask mandates should be reimposed.

    "Kroger said the new rule went into effect on Sept. 10 but does not apply to its customers."

    Kroger, it seems to me, is trying to be a little pregnant. It would be a statement of caring for its employees to also require customers to wear masks.

    •  From the Washington Post:

    "The delta variant of the coronavirus roared into California midsummer, striking hard even in places where many people were vaccinated. Cases spiked. Hospitals again began to swell with patients. The daily death toll climbed into the triple digits for the first time in months.

    "But after a season in which the highly transmissible variant wreaked havoc on the nation, California is reporting sustained progress against delta … An aggressive push for vaccines, coupled with masks mandates at the local level and a public largely willing to go along with them, appear to have helped flatten the state’s curve, experts said."

    The story says that "earlier this week, California dropped from 'high' to 'substantial' virus spread, according to the Centers for Disease Control and Prevention. It later bounced back up, but total new cases per 100,000 residents are still lower than any other state. The change in CDC designation — a barometer of how well states are doing in combating the virus — was celebrated by public health officials, who suggested it was a signal that California could be close to a turning point."

    Published on: September 17, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Fortune is out with its annual Best Workplaces For Women list, and the list includes a number off retailers:  Target (#13), Wegmans (#17), Publix Super Markets (#59), and Sheetz (#64).

    It almost came as a shock to me that Wegmans wasn't in the top three - it almost always when it makes these lists.

    •  Pennsylvania-based Weis Markets said yesterday that "more than 90 percent of its stores no longer use ozone-depleting refrigerants and that its distribution, manufacturing and support facilities have also transitioned away from the use of these refrigerants."

    The press release points out that "the United Nations (UN) adopted the Montreal Protocol in 1987 to phase out substances depleting the Earth’s ozone layer, which protects us from receiving harmful levels of the sun’s ultraviolet light, a known cause of skin cancer and cataracts. The Protocol is the only UN treaty to have been ratified by all 198 UN Member States.

    "Developed countries have banned the production and import of new HCFCs as of January 1, 2020, while developing countries are to complete the phase-out by 2030. To date, the Parties to the Protocol have phased out 98% of ozone-depleting substances globally compared to 1990 levels."

    “Over the past fifteen years, as part of our work with the U.S. Environmental Protection Agency’s (EPA) Green Chill partnership, we’ve worked to reduce our store and facility refrigerant emissions, which deplete the ozone layer and contributes to climate change,” said R. Kevin Small, Weis Markets’ Vice President of Development

    •  The New York Times reports that Marks and Spencer is closing its 11 food stores in France and is blaming Brexit for the decision.

    “The supply chain complexities in place following the U.K.’s exit from the European Union, now make it near impossible for us to serve fresh and chilled products to customers to the high standards they expect,” Paul Friston, the company’s managing director for international business, said in a statement.

    According to the Times, "The stores were supplied with products made in Northampton, near the middle of England, and shipped across the English Channel each day. At the start of the year, once Britain began its new trading relationship with the European Union, the stores’ shelves emptied out in Paris as new customs checks and tariffs upended the retailer’s supply chain."

    Published on: September 17, 2021

    •  The Atlanta Business Journal reports that "Chick-fil-A Inc. announced Sept. 16 that Andrew T. (Truett) Cathy will become CEO on Nov. 1, succeeding his father Dan T. Cathy, 68.

    "Following the transition, Dan Cathy will remain chairman of the Atlanta-based restaurant chain, and Tim Tassopoulos will continue as president and chief operating officer."

    Andrew Cathy is just the third CEO of the company, following in the footsteps of this father and grandfather.

    Published on: September 17, 2021

    Got this email from an MNB reader:

    I want to provide some context in regards to the new Walmart App.  It definitely has some issues.  My wife placed an on-line grocery pickup order like she normally does on the app (doing this for at least 3 years).  She hated it and then hated it even more when she got a subsequent email in regards to status on some items on the order.  The reasons for the hate:

    First,  she had to go back and remove a bunch of items she didn’t order from her basket that were automatically placed there based on her preferences from previous trips.  If she did not catch this, we would have had a whole bunch of items we did not need or order.

    Second, some items were not available. Instead of just removing from the order, Walmart said they would direct ship up to 3 days later.  Why would we want to wait 3 days for an item on a grocery order? 

    I also had lunch with a friend of mine who is a Walmart buyer.  Indicated the app is a disaster and based on their experience no longer uses Walmart grocery pick-up.  In fact, no longer shops at Walmart due to the customer experience.   I have been a shopper, a supplier, and a Walmart associate for almost 30 years and have not ever seen these type of struggles before.  It is a shame.

    When these things go wrong, it gives one total respect for the companies that are able to get it right.

    Responding to yesterday's mention of a piece about how Facebook knew about the toxicity of its Instagram site for young people, and then pretty much ignored it, one MNB reader wrote:

    I feel the hardest point to combat, is the concept instilled by Facebook, regarding the expansion of the definition for “friend”.  It is really disturbing that younger people use this term for anyone that connects, links, or comments, with them.  You and I connect on this platform, but we are not friends.  Acquaintances maybe, but not friends.  Plus, the jealousness, feelings of inadequacy, and lack of personal communication that these apps foster, is disturbing.  They are marketing to the most pliable segment of our population by design and creating a generation of immediate “needers”.    Not a fan at all. 

    I'm a social media skeptic, but even I'm not quite that cynical about the notion of friendship.

    After all, it was the Irish poet William Butler Yeats, long before there was social media, who once surveyed a pub and reportedly said, "There are no strangers here; Only friends you haven't yet met."  (Which is sort of the way I feel about the MNB community.  Also, for another example of this spirt, see "OffBeat," below.)

    I don't blame the kids for seeking connections, or even for overstating their importance.  After all, they're kids - they haven't learned yet that not everything is important.

    We had a story yesterday about the debate taking place between some politicians and some national security experts about current inclinations to aggressively regulate big tech companies such as Amazon.  Lawmakers seem to want to do it because they believe the companies are anti-competitive, while national security experts believe that "antitrust legislation to break up U.S. tech giants — without targeting Chinese companies like Huawei, Tencent and Alibaba — could impede innovation 'critical to maintaining America’s technological edge'."

    I commented:

    The feeling until now seems to have been that some sort of increased regulation of big tech companies - including  Amazon - was inevitable, and maybe even forced breakup of one or more of them.  (Though, to be sure, court challenges could delay any actions for some time.)

    I have to wonder if the innovation vs. competition conversation will take place in any sort of meaningful way.  The initial reaction from lawmakers seen as hostile to these companies wasn't open-minded, and, to be honest, I'm not sure how to resolve the question.

    One MNB reader reacted:

    Kevin, I feel as long as any issues like these are clouded by self-interest and partisanship from members of Congress on both sides, then resolutions to the issues will also be flawed.  When did the rule of law and ethics take a back seat in government?

    I'm not sure that partisan politicians acting in their own self-interest is as new a phenomenon as we'd like to think.  Now we just have cable TV.

    Regarding the climate changes that could end up the relocation of some of the agriculture industry, one MNB reader wrote:

    Moving grain production to outside US changes the trade balances. US economic impact moving from export to import, further increasing costs of production.  Not good.

    Moving production to SA would reduce old growth forestry to clear cut for grain fields. Potential for global environmental climate change.   Less regulation on crops.  Monsanto would be happy. Not good.  Let’s not even think about ethanol in our gas.  We would not only be dependent for oil, but also 10% of an additive we put in.  All around not good.  Anyone have a flux capacitor I can borrow? 

    Regarding the sense that Amazon is taking over the world, MNB reader Chris Hansen wrote:

    Remember “back in the day” when Walmart was the evil empire, with their very visible big box presence driving mom and pops into the ground?  Until their own fleet of trucks and delivery vans began hitting the road, Amazon was able to run pretty much in stealth mode.  Based on the kids’ reaction noted in your piece, the spotlight is now clearly on Amazon.    

    That's the price of doing business.

    Published on: September 17, 2021

    In Thursday Night Football action, the Washington football team defeated the New York Giants 30-29.

    Published on: September 17, 2021

    Michael Sansolo and I have at various times here on MNB waxed rhapsodic about "Come From Away," the hit Broadway musical, and I am happy to say that it now is available to a mass audience even if you can't get to the Great White Way.  (Though, to be fair, you do have to have an Apple TV subscription, because that is where it is being streamed.)

    "Come From Away" was recorded in much the same way that "Hamilton" was, taped in front of a live audience in the same theater where it was being performed.  In this case, the taping has a little greater sense of frisson - the taping took place over the summer, in front of an audience made up largely of first responders who helped get New York through the pandemic, all of them masked and vaccinated.

    These circumstances are particularly appropriate for "Come From Away," which is a musical recounting of a true story - after the terrorist attacks of 9-11 and all airspace was shut down, dozens of flights were diverted to Gander, New Foundland, a community of some 7,000 people that found its population more than doubled when the passengers disembarked.  What was remarkable in that moment of international tensions was the degree to which basic human kindness met the moment, as the townspeople fed, clothed and housed the passengers - and, most importantly, nurtured their spirit.

    "Come From Away" is enormously entertaining - amazing, considering the subtext - and energetically performed by a dozen actors and actresses (most of them from the original Broadway cast) each of whom plays three or more roles.  It all works fabulously well on the screen, and I cannot recommend it enough.

    I haven't watched the whole series yet, but I find that the second season of "Modern Love" on Amazon Prime Video, based on a regular column that has run for years in the New York Times, is much like the first - uneven, but when it works, it is terrific.  And, I think, the show benefits from not being as New York City-centric as the first season;  several of the segments were shot in Ireland.

    In the case of the new season, my favorite episode so far is the first, "On a Serpentine Road, With the Top Down," which stars Minnie Driver as a woman who is having trouble separating from her vintage sports car.  It grabbed my heart for all sorts of reasons - I've always had a thing for Minnie Driver, I love Ireland, and I'm a total ragtop guy.  But I don't think those three factors are necessary to love this episode, which is sweet without being sentimental, and, in my humble opinion, an almost perfect 35 minutes of television, serving the same role as a well-crafted short story or one-act play.

    That's it for this week.  Have a great weekend, and I'll see you Monday.

    Stay safe.  Be healthy.