business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: March 24, 2022

    Content Guy's Note:  This week, Indra Nooyi, the former Chairman-CEO of PepsiCo, was a keynote presenter at the Western Michigan University 56th annual Food Marketing Conference.  Nooyi was unable to be in Grand Rapids in person for logistical reasons, and so I was lucky enough to be asked to share the electronic "stage" with her.  We engaged in an extended Zoom conversation that was shown at the WMU event, focusing to a great extent on her terrific memoir - "My Life in Full: Work, Family and Our Future” - as well as on leadership issues of great importance not just to today's workforce, but also to the university students going out into the "real world."

    WMU was kind enough to allow me to use the entire conversation here on MNB, and because of its length, I am going to break it into three parts, with the subsequent segments running tomorrow and Monday.

    Today, in Part One, we talk about the importance of professional and personal networking … the qualities that make a great CEO … and lessons from the pandemic.

    I hope you enjoy it.

    If you'd like to listen to our conversation as an audio podcast, click and download below.

    Indra Nooyi's “My Life in Full: Work, Family and Our Future” is available on Amazon, the iconic Portland independent bookstore Powell's, on, and wherever books are sold.

    Published on: March 24, 2022

    The Information reports that Instacart plans to open mini-warehouses - it calls them "nano-fulfillment centers" - that will promise 15-minute delivery services in a n umber of markets.

    The new facilities could begin opening as soon as next month, the story says, and will be positioned as serving Instacart's client supermarket chains, such as Publix, which will be able to store their products there for fast delivery to local neighborhoods.

    The Financial Times says that Publix will initially begin offering the service in Miami and Atlanta.

    Instacart also has identified Aldi as being one of its partners for the new service, though it has not identified any others.

    Published reports say that all the SKUs in the facilities will be owned by the client retailers, though it has not defined what the ownership structure for the facilities will be.  Some of the mini-warehouses could be attached to existing stores, and some could be standalone facilities.

    FT writes that Instacart's CEO, Fidji Simo, describes the move as a "broader pivot" from its core business "into becoming a platform offered to retailers, incorporating advertising technology, warehouse logistics and data analytics". … The warehouses will be part of a bundle of services — including advertising, data insights and in-store tech such as “smart” trolleys — known as Instacart Platform."

    The Information writes that "the move is a response to pressure from instant-delivery rivals Gopuff and Getir, which raised billions of dollars last year to expand across major U.S. cities, as well as from more-established firms like DoorDash that have also jumped into the fast-delivery market. These services operate warehouses known as dark stores from which couriers can deliver groceries and convenience items in 15 minutes or less, faster than Instacart’s typical multiple-hour delivery window. Instacart’s effort, which will accelerate the firm’s cash burn, shows the lengths the San Francisco company is going to in revamping its business, which slowed sharply as pandemic restrictions eased last year."

    KC's View:

    The prediction here for years has been that Instacart would get into the dark store business, and so this does not come as any sort of surprise.  It is interesting to me that it only has identified two client retailers as being all-in on the program, which could mean that it simply hasn't finalized any other deals yet.  But it seems to me that Instacart now has a cudgel it can use when negotiating with other client retailers:  Adopt this program (which means that they will become even more dependent on Instacart for their e-grocery business), or we may have to open dark stores that serve customers without being tethered to a retail brand.

    This is hardly out of the question.  We know that Instacart has established direct relationships with suppliers, and even is getting promotion dollars from manufacturers that allow it to offer direct, Instacart-centric promotions to shoppers.

    Several questions occur to me.

    How is this going to work in markets where Instacart actually is the e-grocery partner for a number of competitors?  Is it possible that retailers will be sharing space?  Is it possible that companies that nominally do not compete with each other could share dark store space?

    Are retailers even a little concerned about the degree to which Instacart is going to be able to have an even more granular understanding of their customers' spending habits?

    I also think the Aldi connection is fascinating … certainly taking that company in an ambitious new direction at a time when it is opening a lot of new stores.

    I remain skeptical about the 15-minute promise … I just think that there are going to be lots of times and places where getting an order from dark store to a home or business in 15 minutes will defy the laws of physics.  (Another word for physics:  traffic.)  I have to wonder if Instacart is encouraging retailers to go down a rabbit hole that will take them no place good, and where they may largely find frustrated customers.

    The idea of placing these nano-fulfillment centers/dark stores in localities all over the country also could create tensions at a time when there have been more than a few stories about how such facilities are changing the nature of various neighborhoods;  I can see arguments breaking out in planning/zoning board meetings all over the country.

    To me, there's also a "tell" in the FT story, in which CEO Simo is quoted as saying that Instacart is trying to build “something that is fundamentally different” from how investors had viewed the company.

    In the end, this is all about the investors.  Not the retailers.  Not the retailers' customers.

    Remember, it was just 10 days ago that The Information reported that "some large investors in Instacart have marked down the value of their stakes in the privately held grocery-delivery company by as much as 18% since it raised funds a year ago at a $39 billion post-investment valuation, previously unreported figures show. The moves indicate that the recent sell-off in technology stocks may be starting to affect investor perceptions of startups that raised at high prices last year, particularly in competitive sectors like online delivery."

    In other words, Instacart is looking for ways to get its valuation up.  But in helping Instacart to do this, retailers may end up diminishing their own value to the marketplace by putting even more distance between their brands and their shoppers.

    Published on: March 24, 2022

    From Business Insider:

    "Low-wage workers, including many who were praised as 'essential' or as 'heroes' during the pandemic, 'have not been given adequate compensation,' according to Kaitlyn Henderson, author of a new report from Oxfam America analyzing pay in the US.

    "Those low wages come amid a period of soaring corporate profits, which 'are not being equitably distributed to workers,' Henderson, senior researcher at Oxfam America, told Insider.

    "The report from Oxfam America finds that there are over 51.9 million US workers — about a third of the labor force — who are making less than $15 per hour, or about $31,000 per year working full-time. Henderson said this level of pay 'is just not livable.'

    Inflation, which is at a 40-year high, isn't helping, with Henderson noting that it can be difficult for these workers to be able to pay for basic necessities. The prices of important goods and services, like electricity and medical care are far higher than before the pandemic."

    KC's View:

    One of the points of the study is to urge an increase in the federal minimum wage, which has been $7.25 an hour since July 2009.  Activists have been pushing for an increase to $15, though they haven't made much headway.

    But let's put the dollar amounts aside for a moment, and ask a few questions.

    First, if you are a business leader, does your rhetoric about "essential" workers and "associates" or "partners" match the way you compensate (and, by the way, empower) your employees?

    If you are facing discontent in the ranks - which could be reflected in resignations, or unionization moves, or just lousy morale - is it possible that it is because of a gap between rhetoric and policy?

    Is a core, foundational value in your business the notion that employees who feel invested in, who feel essential, can be enormous factors in the degree toi which your customers view you as essential?

    If you were to look at the degree to which higher ranking executives in your company have seen their compensation packages increase in the past five years, say, does it track with the degree to which front line employees have seen their compensation increase?

    Just curious.  At the risk of course, of being described again by an MNB reader as a "leftist" living in a fantasy world.

    Published on: March 24, 2022

    The New York Times this morning has a story about how Amazon is working to influence unionization votes taking place at facilities in New York and Alabama.

    An excerpt:

    "On Staten Island, Amazon supervisors often refer to them as 'training.' At an Amazon warehouse in Alabama, supervisors refer to them ambiguously as 'meetings.' Amazon says they’re officially 'small group meetings.'

    "Whatever Amazon calls them, the anti-union sessions that the company has held for employees this year have been part of an effort to fend off unions in two contentious elections … Amazon has used the regular meetings, which typically include a few dozen employees and last roughly 30 minutes, to create a false impression of what unionizing would entail, the union supporters said.

    "In a video message played for workers at a recent meeting on Staten Island, the company said of the union: 'From their Twitter handle to their chants, their answer to most things is they should shut down Amazon. How would that solve anything?'"

    The Times goes on:  "Amazon says that deciding whether or not to unionize is up to employees and that the mandatory meetings are intended to educate workers about what a union could mean for them. The company cites its competitive pay — just under $16 per hour for a full-time entry-level worker in Alabama and over $18 per hour on Staten Island — and benefits, which include health care benefits for full-time employees as soon as they join the company."

    And, some context from the Times:

    "Employees at the warehouse in Bessemer, Ala., are voting on whether to be represented by the Retail, Wholesale and Department Store Union. Ballots in the mail-in election, which the labor board sent out in early February, are due Friday and will be counted shortly after.

    "A union win at either facility — each employs more than 5,000 workers — would be the first in Amazon’s history in the United States and would almost certainly alter the labor model that makes same-day delivery possible. But the odds for the unions remain long.

    "The Amazon Labor Union qualified for the Staten Island election only on its second try, after failing to sign up the 30 percent of employees it needed in its initial petition to the N.L.R.B. Organizers typically seek to sign up a majority of eligible workers before filing for an election because attrition is common once a union campaign begins.

    "The retail workers union is on its second election at the Amazon warehouse in Alabama, having lost by a more than 2-to-1 ratio last year. The labor board later ordered a revote after it concluded that Amazon had violated election rules, but unions tend to lose in so-called rerun elections."

    KC's View:

    If I had to bet, it would be on a split decision - Amazon could lose in New York and win in Alabama.  But, to be honest, that's just a guess.

    I don't think unionizing solves all of the Amazon workforce's problems, but I do think that there are issues with which Amazon is not dealing … certainly not with the kind of innovative perspicacity that it brings to so many other challenges and opportunities.

    Published on: March 24, 2022

    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 a total of  81,527,329 total cases of the Covid-19 coronavirus, resulting in 1,001,175 deaths and 63,623,166 reported recoveries.

    Globally, there have been 476,707,125 total cases, with 6,129,846 resultant fatalities and 412,045,923 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 76.8 percent of the total US population has received at least one dose of vaccine … 65.4 percent are fully vaccinated … and 44.6 percent have received a vaccine booster dose.  The CDC also says that 49.8 percent of the eligible US population has not received a vaccine booster.

    • From the New York Times:

    "The chief executives of the largest U.S. airlines asked President Biden on Wednesday to allow a federal mask mandate at airports and on planes to expire next month.

    "The group also asked that the government drop a requirement that visitors from abroad provide a negative coronavirus test before traveling to the United States.

    "'The persistent and steady decline of hospitalization and death rates are the most compelling indicators that our country is well protected against severe disease from Covid-19,' the chief executives of American Airlines, Delta Air Lines, United Airlines and several other passenger and cargo carriers wrote in a letter to Mr. Biden.

    "'Given that we have entered a different phase of dealing with this virus, we strongly support your view that ‘Covid-19 need no longer control our lives,’” they said, citing a phrase the president used in his State of the Union address earlier this month.

    "The letter represents the first time that the industry has publicly united against the mask mandate, which was recently extended until mid-April."

    Published on: March 24, 2022

    •  Kroger yesterday announced a strategic collaboration with NVIDI "to reimagine the shopping experience using AI-enabled applications and services."

    The two companies said they will build "a state-of-art AI lab and demonstration center to expand Kroger’s freshness initiatives, improve shipping logistics and create a better shopping experience in stores through digital twin simulations — virtual models designed to accurately reflect store layouts and other operations … The lab will be located in Kroger’s Cincinnati-based headquarters office.

    “Our collaboration with NVIDIA supports Kroger’s ‘Fresh for Everyone’ commitment,” said Wesley Rhodes, vice president of Technology Transformation & Research and Development at Kroger, in a prepared statement. “We look forward to learning more about how AI and data analytics will further our journey to provide our customers with anything, anytime, anywhere.”

    Published on: March 24, 2022

    •  The CBC writes that in Calgary, "Walmart has invested $118 million dollars into a new 430,000 square foot fulfillment centre that the company says will expand its shipping operations.

    "Set to open in September, the facility will act as the main distribution hub for the company's operations in Western Canada, and will process millions of items annually. 

    "Horacio Barbeito, president and CEO of Walmart Canada, says the new centre will help Walmart get products to customers faster through the use of robotics that are not meant to replace workers but make their jobs easier … He also noted that due to the influx of online shopping brought on by the pandemic, Walmart will continue to focus on building more fulfillment centres like this one."

    Published on: March 24, 2022

    •  From The Wall Street Journal:

    "Nestlé SA is to significantly scale back what it sells in Russia, suspending production of pet food, coffee and confectionery, a move that comes after the KitKat maker has faced pressure from politicians, employees and consumers for its continuing presence in the country.

    "The Swiss packaged-foods giant said Wednesday that it would focus on providing essential food while the war continues. It said that while it doesn’t expect to make a profit in Russia or pay any taxes in the country for the foreseeable future, any profit it does generate would be donated to humanitarian relief organizations.

    "Nestlé said the only products it would continue to sell in Russia would be baby food and other infant nutrition products, specialist veterinary meals and medical-nutrition products.

    "While Nestlé had previously suspended imports and exports of products it deemed nonessential, such as Nespresso pods and San Pellegrino water, the company has kept all six of its Russian factories open to produce goods for local sale, including confectionery and coffee. About 90% of what Nestlé sells in Russia is made there. It previously described its products as essential saying it had a responsibility to its employees in the country.

    "Wednesday’s announcement means Nestlé will suspend the 'vast majority of our prewar volume' in Russia, according to a spokesman. 'We are in the process of identifying solutions for our people and our factories in Russia,' he said. 'We will continue to pay our people.'  The company has about 7,000 workers in Russia."

    Published on: March 24, 2022

    •  The Associated Press writes that "Madeleine Albright, a child refugee from Nazi- and then Soviet-dominated Eastern Europe who rose to become the first female secretary of state and a mentor to many current and former American statesmen and women, died Wednesday of cancer, her family said. She was 84 … Albright was chosen in 1996 by President Bill Clinton to be America’s top diplomat, elevating her from U.S. ambassador to the United Nations, where she had been only the second woman to hold that job.

    Published on: March 24, 2022

    Yesterday, MNB reader Tom Hahn criticized my endorsement of an SEC decision "to propose regulations that, for the first time, require companies to disclose their greenhouse gas emissions as well as their exposure to climate change risks."

    He wrote:

    Of course you have no problem with this approach Kevin, it’s consistent with your leftist POV. You hope the SEC gets guidance from “climate change experts”? The same ones that are running the Biden administration? The same ones that have been wrong on most policy decisions over the last couple years? Not a very comforting thought.

    In your green fantasy world, do the Chinese, the Indians, and the Russians also mandate these measures for companies operating in those countries? If not, what sense does it make to add bureaucracy and cost to US companies to do nothing but further fuel inflation and joblessness among American workers? As with most policies pushed by the left, this is a solution looking for a problem.

    Prompting another MNB reader to write:

    Tom Hahn’s extremely “rightest” point of view ignores the facts and tries hard to make a fallacious point. His “Why should we try to do better when the other guy isn’t?” argument suggests that no one should ever try to improve because we can always find a guy who is preserving the worst of the status quo.

    I would agree with the suggestion that we should not follow the Chinese, the Indians, and the Russians off an environmental cliff if we have the ability to affect our own behavior and its consequences.  I think that's called leadership.

    I'm also not sure that at this particular moment it is fair to talk about joblessness in America being attributable to climate policies.  Unemployment is pretty low and there seem to be more jobs out there than people who want to or are able to fill them.

    I would also suggest that the current geopolitical situation highlights one very good reason that we need to be aggressive in our shift away from fossil fuels - it takes a weapon away from the war criminal in the Kremlin.

    None of this is easy, none of this can be accomplished overnight, and there almost certainly will be pain.  But if you accept the notion of climate change, then this all seems pretty inevitable.  If you don't … well, I guess we'll have to talk about something else.

    Responding to yesterday's story about LL Bean reacting to a record sales year by giving all its employees a 20 percent bonus, one MNB reader wrote:

    The retailer I work for could learn a lesson from LL Bean.  I get a yearly cost of living increase that is always right around 1.73%.  Except for the fact that yearly inflation is just over 2% and insurance premiums go up yearly.  We get thanked a lot for our hard work, but "thank you" doesn't pay the bills.  

    We had a piece yesterday about how "the rich may be different from you and me, in the words of F. Scott Fitzgerald, but they also are worried about the state of the economy."  For different reasons than less affluent people, but still worried.

    Axios wrote that "even though they're still flush with cash from the booming market, wealthier people are increasingly worried about the economy, especially inflation … In March, consumer confidence dropped 7% for those earning more than $100,000 — a much larger dip than for those earning less than $50,000, according to a measure of consumer sentiment out today as part of the Morning Consult/Axios Inequality Index."

    One MNB reader responded:

    Interesting point.  My only question is when did $100,000 income become wealthy?  That level especially now, is smack in the middle of middle class and they need to be conservative in spending.  So wealthy? I don’t think so.


    But if $100,000 a year doesn't make you wealthy, then what does $30,000 a year make you?

    On an other subject, from another reader:

    I always perceived Starbucks as being a very progressive company, hiring across all genders, socially conscious, almost hippie like.  That to me was the vibe I got in the stores, like it or not.   Now it feels like an angry, overworked vibe.  Sad.  I don’t have a solution, but I do think $20 to pour coffee is not it.

    And from another reader:

    For me, there has been a culture change in what Starbucks is a business.  Is it a destination?  Not for many, as you can see the lines of cars lining up for coffee to go where a Starbucks used to be a place you would actually *stay* and enjoy your coffee.  Is it a differentiated experience?  Not so much anymore, as Dunkin and others offer similar flavored coffee drinks.  Is Starbucks offering a value proposition?  I doubt anyone would claim that.  So where does their staff fit in this equation?  Are they adding to the experience of going to Starbucks anymore?  At one time they did, but I don’t think so anymore with the business model seemingly to crank out coffee so fast they are yelling your name to expedite a line.  I think their team members feel like they got a bit forgotten in the shift.  If Starbucks wants to stop union gains, they should rethink the role of what their employees are and maybe what value they feel they are in the dynamic.

    Yesterday we took note of a Financial Times piece about how companies should not just hold "exit interviews" for people who are leaving for greener pastures (or, as seems to be happening more and more recently, just leaving).  Rather, FT says, companies should consider holding "stay interviews" with people who appear to not be leaving, as a way of retaining them and have a better sense of the temperature of the workplace.

    One MNB reader responded:

    Employers may see this more as a punch in the eye, rather than an eye opener.  Stay interviews sound great, but, do they truly generate true feelings?  In the past if you wanted to stay employed you better not state negative comments, constructive or not.

    You're right.  If that's the climate, then stay interviews won't be worth a damn.  I'm arguing for a cultural shift that values employees as essential, and this is one way to show it.

    I wrote yesterday that "I like the idea of commandeering ships taken from Russian oligarchs and turning them into aid vessels serving Ukrainians."

    One MNB reader responded:

    You and Chuck Rhoades--two of a kind.

    Maybe.  Certainly "Billions" season six-style Chuck Rhoades.

    Though there are other personal characteristics/predilections that Chuck Rhoades and I do not share.  (At least, none that I care to admit to.)