business news in context, analysis with attitude

Published on: March 28, 2022

Content Guy's Note:  Last 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've edited it into three parts;  parts one and two ran last Thursday and Friday.

Today, in Part Three, we talk about Nooyi's focus on "Performance with Purpose" at PepsiCo … and whether during her career it was tougher to be a woman or a person of color in the business world.  (And we also talk about what I see an an inexplicable passion for the New York Yankees.)

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 Bookshop.org, and wherever books are sold.

Published on: March 28, 2022

by Kevin Coupe

Two things, to start:

One, we talk a lot here on MNB about the importance of constant communication with shoppers and about celebrating the people on the front lines.  Expect that to continue.

Two, some of you may be getting worn out by the number of times I've referenced Stew Leonard's, especially over the past two years - it is almost as if Stew's, which was really well-known and successful before the pandemic, raised the bar since Civid started …. and has continued doing so.  But no matter.  Because when Stew Leonard's hits a home run, I'm going to tell you about it.

Which is why I want to share with you the email that Stew Leonard's sent out to its customers this weekend.  Among other things, it talks about inflation and how both stour and customers are trying to navigate it - which is a really smart thing to do.

And, there is a YouTube encounter with a customer in the store that is very funny, because she doesn't really believe that Stew Leonard Jr. is Stew Leonard Jr.

This is the kind of email that retailers ought to be sending out to shoppers on a regular basis, especially now.

Like I said.  A home run.  And an Eye-Opener.

Published on: March 28, 2022

Content Guy's Note:  Willard R. Bishop - 'Bill' to the countless  industry people who knew him and his work in the supermarket business - passed away Friday.  He was 80.

I asked Michael Sansolo, who knew Bill far better than I did, to offer some thoughts about his life and work.

Bill Bishop, whose research projects and leadership were part of the supermarket industry for five decades, most recently was the creator and “chief architect" of Brick Meets Click, a web service aimed at helping the industry understand, discuss and cope with the changes and challenges of web-based shopping.  It only was a month ago that he stepped away from his regular activities; a quick look at the hundreds of messages on his Linked In page following the announcement last month of his retirement and illness speaks volumes about the depth and breadth of Bill’s impact and connections through the years.

I first learned of Bill in 1983 while attending my first Food Marketing Institute (FMI) annual convention (then the industry’s most important event), where Bill was a key presenter in multiple sessions I attended. His insights were that broad and his knowledge was incredible.

Later in my career I oversaw all research and education at FMI, a very similar position to the one Bill held with the Super Market Institute (SMI), FMI’s predecessor, in the 1970s. And still later in my career I became research director of the Coca-Cola Retailing Research Councils for supermarkets and then convenience stores, in both cases faced with the daunting task of succeeding Bill.

Anyone who worked with Bill, as I was fortunate to do repeatedly, quickly saw how incredibly knowledgeable he was about an enormous range of issues, but more importantly how passionately and diligently he approached all his projects. I was proud to have him as a mentor and prouder still that I had the chance to follow in his footsteps.

But what’s possibly most impressive and insightful about Bill was how, at age 70, he launched an entirely new project - Brick Meets Click - with his usual foresight on an issue that would rapidly become so central to all forms of retail. Despite some health problems in recent years, he continued to work with the energy well beyond what anyone would expect from a 30-year-old, no less a man of 80 years.

Once again, a role model for all of us.  I'll miss him.

Information about services and memorials for Bill along with connections to his family can be found here.

Published on: March 28, 2022

The  Los Angeles Times reports that " tens of thousands of Southern California grocery workers voted to authorize a strike if supermarkets don’t meet their wage demands as negotiations on a new contract resume in the coming weeks."  The vote, according to the Times, "could lead to walkouts beginning at some Albertsons, Vons, Pavilions and Ralphs markets stretching from Central California to the Mexican border … Negotiations over a new agreement began in January but stalled three weeks ago. Workers seek substantial wage bumps, higher minimum hours for part-timers and store-level health and safety committees as pandemic concerns persist."

The Times writes that "the United Food and Commercial Workers announced its seven local unions voted 'overwhelmingly' in favor of authorizing a strike, but delayed releasing a full breakdown of votes, citing a glitch in its electronic voting system.  A spokeswoman for Los Angeles-based Local 770, which includes 18,000 grocery workers, said 94.3% of those voting favored the strike."

There is a difference between this scenario and the five-month strike that took place in 2003 and 2004;  at that time, the en tire workforce walked out, but "this month’s authorization is framed as an 'unfair labor practice' action. Under federal law, that allows walkouts at selected stores instead of a full-blown strike."

The Times also frames the underlying tension that exists between the two sides this way:

"Supermarkets traditionally operate on thin profit margins of about 2%. But the pandemic turbocharged revenues as restaurants closed and more people ate at home. Kroger’s operating profit nearly doubled to $4.3 billion from 2019 to 2021.

"In 2020, the company paid out $1.3 billion to investors — money that workers say should have gone to pay them more as they faced COVID-19 risks on the job. Kroger Chief Executive Rodney McMullen was criticized for collecting a $22.4-million pay package in 2020 — his largest ever — even as the company ended a $2 an hour hazard bonus for frontline workers after two months."

Published on: March 28, 2022

The Information has a piece in which it speculates about - now that he has decided to close bricks-and-mortar book stores and pop-up shops around the country - which Amazon businesses that relatively new CEO Andy Jassy might shut down next.

The Information frames the discussion this way:

"The big priorities of the new Amazon CEO include the company’s burgeoning streaming-media business, retail and Amazon Web Services, the cloud computing juggernaut Jassy previously ran, according to a person who has discussed the topic with him. This person said Jassy doesn’t appear to have the same attachments to other parts of Amazon’s business.

"It isn’t regime change alone at Amazon that could lead it to winnow underperforming projects. The company’s revenue growth has slowed sharply from the first year or so of the pandemic, when it saw a huge spike in online shopping. As a result, in early March, Amazon’s stock fell to its lowest point in 12 months—just before it began climbing after the company’s board authorized a 20-for-1 stock split and a $10 billion share repurchase program. Both tactics are among the conventional tricks maturing companies often employ to boost the value of their shares.

"But Jassy, who took over the top job at Amazon last July, may also want to bring a bit more focus to a company that has embarked on a head-spinning array of new initiatives—from launching satellites to buying an autonomous vehicle maker (both of those projects are favorites of Jassy's, according to a person with knowledge of the matter). Focus appears to be a factor behind Amazon's decision to close its bookstores and other retail outlets, while it continues to invest in the much larger category of grocery stores and cashierless checkout technology."

Among the business that The Information and its sources say could be on the chopping block are:  delivery drones (still in test phase a decade after Jeff Bezos announced the initiative) and Amazon Key (the program that allows delivery people into customers' houses, though "growing public concerns around privacy may make Amazon Key a difficult service for most shoppers to get comfortable with."

Published on: March 28, 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 81,621,888 total cases of the Covid-19 coronavirus … 1,003,467 deaths … and 64,457,026 reported recoveries.

Globally, there have been 482,113,408 total cases … 6,148,272 fatalities … and 416,358,569 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 76.9 percent of the total US population has received at least one dose of vaccine … 65.5 percent is fully vaccinated … and 44.7 percent has gotten a vaccine booster dose.

•  National Public Radio reports that "anyone 50 years and older could soon be eligible for a second booster dose of the Moderna or Pfizer-BioNtech COVID-19 vaccine. The Food and Drug Administration is expected to authorize the additional booster shots without holding a meeting of its independent vaccine advisors.

"The plan comes as evidence increases that protection from three shots is fading and a fourth shot would help boost immunity back up. And as BA.2, an even more contagious version of the omicron variant continues to spread in the U.S., concern is mounting it could fuel another surge."

According to the story, "Administration officials say it's important to give people the option of a second booster as quickly as possible. The plan to offer it to people younger than 60 was made to ensure that more vulnerable people, particularly people of color who are more likely to suffer other health problems that put them at risk, also have the option of an additional booster.

"But other infectious disease specialists say the administration should be focusing on getting people their primary doses and first boosters."

I have no idea if it makes medical sense and good public health policy to offer those of us of a certain age a second booster shot immediately.  I know, however, that I'm happy to get another booster whenever I'm able to.  As for focusing more on people who have not yet gotten their primary shots and boosters, well … it seems to me that for the most part, if you have not gotten a vaccine or booster shot yet, the odds are it will be hard to persuade you to get one.  They'll be available if you want them, and there should be continued persuasive campaigns aimed at inoculating a higher percentage of the population.  But those of us who have done our best to stay safe, to behave responsibly, ought to be  able to remain that way however and whenever appropriate.

Published on: March 28, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From Business Insider:

"Amazon's autonomous delivery drones have crashed at least eight times in the past 13 months, a review of federal crash reports and internal documents shows. 

"At least one of these crashes, when a drone that was being tested dropped from 160 feet, resulted in an acres-wide brush fire last June … The most recent crash Insider confirmed was at an eastern Oregon airfield on February 1 of this year.

"Amazon is testing these drones under its ambitious Prime Air program, which in 2020 was granted license from the Federal Aviation Administration to test in limited capacities. Confirmation of these crashes comes as the company looks to secure new registration that would allow it to test its unmanned vehicles closer to population centers and with fewer restrictions."

The story goes on:  "The company conducted more than 2,300 drone test flights last year, according to internal documents obtained by Insider. Amazon has previously said that no one has ever been injured as a result of the company's flight tests."

Guess Walmart won't have to invest in all those anti-aircraft guns after all.   I wonder if this increases the odds that CEO Andy Jassy will cut the program?

Published on: March 28, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Sbarro, which describes itself as "the global leader in the impulse pizza category," announced late last week that it plans to open 100 new restaurants - both company-owned and franchised - in the coming year.

According to the announcement, "Sbarro has established key franchise relationships with ARKO Corp's GPM Investments, EuroGarages, EG America and Travel Centers of America which are fueling the growth and development of the brand in the United States and United Kingdom.  These strategic partnerships have allowed Sbarro to expand its existing footprint, which has been primarily in malls, airports and travel plazas into new venue categories."

Some of these locations will be in gas stations, which makes sense, because they can use the grease from Sbarro's barely mediocre pizzas to provide lubricant for cars that they happen to be servicing.  I just hope that there are no supermarkets out there that decide to get into the Sbarro business … if a food store can't do better than this, then they shouldn't be in the food business.

•  In Illinois, the Daily Herald reports that "the Sweetgreen restaurant Schaumburg trustees approved Tuesday night will be the first of the specialty salad chain's many locations across the nation to feature a drive-through pickup window for customers ordering and paying on its app … Though the building already had a drive-through system in place, PDQ's order window will be replaced by a round observation window through which motorists can watch employees preparing the meals while in line for the pickup window.

'Representatives of the restaurant told village officials that there will be no way to order from the outside line. The app will be the only way to place orders and pay for meals delivered to the pickup window.  To-go orders may also be placed inside the restaurant, where dine-in service will be available. Current expectations are for about half of the sweetgreen location's customers to order inside and the other half to use the app."

•  From the Washington Post:

"Restaurant Brands International, which owns Burger King, Tim Hortons and Popeyes, announced plans … to phase out these chemicals in its food packaging worldwide by 2025. Chick-fil-A announced a similar commitment Wednesday evening on Twitter to phase out these chemicals in packaging by the end of this summer.

"The companies’ embrace of doing more to stamp out chemicals is in response to a just-published investigation by Consumer Reports that detailed how they found toxic chemicals in a majority of the food wrappers and packaging from chain restaurants and grocery stores that they tested … These chemicals, called PFAS, short for per- and polyfluoroalkyl substances, are used in hundreds of products to make them resistant to heat, water, oil and corrosion. They are sometimes called “forever chemicals” because they are resistant to breaking down naturally in the environment and can remain in people’s bodies for years. PFAS from grease-resistant food wrappers can seep into food and contaminate soil and water when packaging reaches landfills.

"Consumer Reports tested multiple samples of 118 food packaging products from major restaurant and grocery chains, including paper bags for french fries and wrappers for hamburgers, as well as paper plates and molded fiber bowls for salads. The organization found PFAS chemicals in more than half of the food packages tested."

Published on: March 28, 2022

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

•  The White House reportedly will propose a minimum tax on the richest Americans - those whose households are worth $100 million or more.

The tax, the New York Times writes, would require these citizens "to pay a rate of at least 20 percent on their income as well as unrealized gains in the value of their liquid assets, such as stocks and bonds, which can accumulate value for years but are taxed only when they are sold."

The Washington Post writes that "many billionaires can pay far lower tax rates than average Americans because the federal government does not tax the increase in the value of their stock holdings until those assets are sold. Billionaires are able to borrow against their accumulated gains without triggering taxes on capital gains, enabling huge accumulations of wealth to go virtually untaxed by the federal government … The White House Office of Management and Budget and Council of Economic Advisers estimated this fall that 400 billionaire families paid an average federal tax rate of just over 8 percent of their income between 2010 and 2018. That rate is lower than the rate paid by millions of Americans."

From the Wall Street Journal:  "The plan would generate roughly $360 billion in revenue over 10 years, according to a White House fact sheet released in advance of Monday’s full budget proposal. That is about twice as much money as raising the top individual income-tax rate to 39.6% from 37%, and it would affect a much smaller group of people.

The biggest chunk of money in the new Biden plan would come from taxes on unrealized gains built up over many years, which could include much of the wealth of founders of large technology companies such as Amazon.com Inc. and Facebook parent Meta Platforms Inc. Those people could spread their initial payments over nine years; subsequent annual minimum taxes could be spread over five years.

"There would be no exemptions for particular asset classes, but there would be special rules for illiquid taxpayers. People wouldn’t have to make annual valuations of illiquid assets, and they could defer some taxes - with interest charges - until death or asset sale."

The Times makes the point that the implementation of such a tax plan faces a number of obstacles.  There are members of the administration - such as Treasury Secretary Janet L. Yellen and Natasha Sarin, the Treasury Department’s counselor for tax policy and implementation - who have expressed public skepticism about it in the past.  There also are lawmakers inside the Democratic caucus who have balked at the idea.  And, there are questions about whether such a tax would be constitutional.

If there are any MNB readers who would be affected by this tax … well, good for you.  Plus, I wouldn't worry too much about this tax taking effect.

Published on: March 28, 2022

…will return.

Published on: March 28, 2022

The 2022 Academy Awards were last night, and the winners in major categories were:

Best Film:  "CODA"

Best Actress:  Jessica Chastain, "The Eyes of Tammy Faye"

Best Actor:  Will Smith, "King Richard"

Best Supporting Actress:  Ariana DeBose, “West Side Story”

Best Supporting Actor:   Troy Kotsur, "CODA”

Best Director:  Jane Campion, "The Power of the Dog"

Best Original Screenplay:  "Belfast"

Best Adapted Screenplay:  "CODA"

Best International Film:  “Drive My Car” (Japan)

Best Animated Feature:  “Encanto"

Best Song:  "No Time To Die"

It is worth noting that "CODA" broke new ground, becoming the first film distributed by a streaming service - in this case, Apple+ - to win Best Picture.