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    Published on: April 25, 2022

    I talk a lot here on MNB about technology innovation, but I want to emphasize something - there are few things in the world that differentiate a great food store better than … wait for it … great food.

    I'm in Southern California, where I had a chance to visit a Northgate Market in La Habra, and found a store that continues to delight the senses and stimulate the appetite.  Even though I was there on a slow afternoon, there was enormous energy generated just by the marketing and merchandising, and in my FaceTime video, I talk about what it all ads up to, with some bonus pictures and video below.

    Published on: April 25, 2022

    The Dallas Morning News reports that grocers in the Dallas-Fort Worth market are preparing to bring their A-game as H-E-B starts opening stores bearing its eponymous banner there later this year - with the likely result being that "Dallas-Fort Worth grocery shopping is going to be the best it’s ever been in 2022 … The race for more than $24 billion in annual grocery spending is intensifying, and experts say the winner will be the consumer."

    For example, the Morning News writes, "After a multiyear pause in construction, some major grocers say they’re ready to start building stores again.

    "Kroger is planning a new store in Melissa and said it will replace one of its Plano stores when a new one is built.

    "Whole Foods Market will anchor the retail section of a 50-acre mixed-use apartment and office project called West Grove at the southeast corner of Custer Road and U.S. Highway 380 in McKinney.

    "Target, which has been busy remodeling its local stores but hasn’t opened a new one in the market since 2018, is building a 140,000-square-foot store on U.S. Highway 380 and Preston Road in Prosper … Trader Joe’s is looking for new sites again.

    "Sprouts Farmers Market, which just opened stores in Grand Prairie and Las Colinas, will open in September in East Dallas’ Hillside Village in a space that had been a Stein Mart.

    "Albertsons is opening in south Irving after a 15-year absence when it completes an extensive remodel of a former Fiesta Mart."

    Plus, the story says, "Walmart is planning 115 remodels in Texas this year — 50 of them in D-FW — including one in Forney that’s underway. It’s just across U.S. Highway 80 from land purchased by H-E-B. Walmart is planning to call attention to some of its local remodels with reopening events."

    According to the piece, at the moment Walmart & Sam's Club combine for a market-leading 35 percent share of the area's grocery business, followed by Kroger at 16.3 percent, and then Albertsons (which also owns Tom Thumb and Market Street) at 11.7 percent.  Target has an 8.2 percent market share.

    KC's View:

    Funny … on Friday the story was about how H-E-B has grown market share in San Antonio, but now will face a new pure-play competitor as Kroger brings its e-grocery service to town.  And now the story is about how H-E-B is bringing its eponymous stores to a market where Kroger already has a physical presence.

    My guess is that in the short-term, H-E-B will be able to disrupt the Dallas market more than Kroger will be able to move the needle in San Antonio, where I continue to believe it will hurt smaller plays than H-E-B.

    But Kroger's play in San Antonio is one with long-term implications, if it works.  But they're going to have to be patient, and not worry too much about ROI for a couple of years.

    Published on: April 25, 2022

    Excellent piece in the Wall Street Journal about the tough decisions that Howard Schultz has to make now that he has returned as Starbucks' CEO for the third time, since the company that he created as a model of "third place" thinking has evolved into one where 70 percent of orders are placed "to go."

    "Cafes designed to sell espresso to people lingering inside now dispense iced coffee through drive-through windows to customers lined up in cars," the Journal writes.  "Workers have grown frustrated by changing procedures, hours and customer demands, circumstances that were exacerbated by pandemic worker shortages that often left some cafes understaffed. Worker dissatisfaction has spawned a unionization push, with more than 200 of the company’s 9,000 U.S. locations filing to be represented by the Starbucks Workers United union … Operations at some stores have become a struggle. Baristas juggle coffee requests coming in through drive-through windows, mobile devices and for delivery, a challenge for a chain that also scores workers on their ability to connect with customers. Many cite persistent problems with the ice machines, which frequently break and are too small to meet the demand for cold drinks."

    The piece also points out that Schultz's return has received mixed reviews - some within the company are glad that someone with such a strong sense of the company's origin story now is in charge, while others see him as a reflection of the past, not the future.  Schultz, for his part, says he is committed to examining every part of the business,  and needs time to re-establish trust with the company's army of baristas.

    KC's View:

    I think it also is fair to note that Schultz's return also has been characterized as surprisingly tone deaf, at least in the beginning;  it has been as if he is trying to make changes through pure force of will, and has responded to resistance by being even more willful.

    I've been tough on Schultz's messiah complex here, even as I argued that his return was entirely predictable (and I did predict it months before he returned).  In so many ways, Starbucks' problems can be traced to a fundamental conflict between two impulses - efficiency and effectiveness - on which we often dwell here on MNB.  The bigger the machine got, the more the emphasis was on efficiency … and being effective got less attention.

    I'm sympathetic.  I went into a Starbucks the other morning to order a coffee, and found the place was crowded - with almost everybody there to pick up orders they placed via the mobile app.

     If I'd been planning to sit and enjoy my coffee, it would've been uncomfortable to do so.  The next morning, when I wanted coffee, I used the mobile app so I could get in and out quickly.

    Maybe that's Starbucks future.  It isn't the one that Schultz foresaw in the early days of the company, but sometimes evolution is inevitable.  And maybe not even necessarily bad.  Just different.

    But he has to decide, and has to do it from a place of reality, not wishful thinking.

    I'm not sure that Schultz's latest hire points the company away from its focus on efficiency, by the way - the company just hired Deb Hall Lefevre, who when she was a McDonald's executive was instrumental in the development of its app and in-store digital ordering kiosks, as Starbuck’s new chief technology officer.

    Published on: April 25, 2022

    The Los Angeles Times has a long piece about "a new state law punishes those who improperly use the California name to peddle oil from elsewhere … The movement that led to the new law triggered one of the biggest food fights in California since Napa vintners got the state to ban charlatans from marketing their wines with the region’s name. It has implications extending far beyond the scenic olive groves of Northern California, drawing into the debate food safety advocates, global marketing consultants, even hedge fund players who see potential for big profits in products labeled as Californian."

    The story notes that "food industry players worldwide have closely watched California’s dispute between boutique operations and the nation’s olive oil giant, Chico-based California Olive Ranch. Backed by tens of millions of dollars from equity firms and institutional investors, California Olive Ranch has industrialized olive oil making in the state, replacing handpicking with machines and supplanting the traditional olive grove with a method called super-high-density planting.

    "Its lower-cost bottles are on the shelves of 30,000 big-box stores, supermarkets and other retailers around the country. But the labels on its Global Blend had to be changed with the new state law that mandates the word 'California' — even in a brand name — cannot be any bigger on the bottle than the type used to disclose other places where the olives came from."

    The story points out that it could've been worse - an early version of the law would've prevented it from even using the California Olive Ranch name on any bottle containing olive oil sourced from anyplace else.

    The Times also offer some context, that California Olive Ranch originally only sold olive oil sourced from the state, but had to expand its sources "when drought hit in 2018 and the olive harvest plummeted."  But while the opposition tends to characterize the company as being run by hedge fund interlopers from out of state, CEO Michael Fox says that it is a Californias company run by Californians that has "has done as much as any producer in the state to burnish the California extra virgin brand, pushing regulators to impose strict quality controls for anything labeled as such."

    KC's View:

    First, let me get one thing out of the way:  When California Olive Ranch was in its early days trying to establish the brand, it used MNB as an advertising vehicle, and even ran a pretty successful recipe contest on MNB.  For which I am grateful.  And, I continue to be a user of their product.

    I've used the company's California oil, and its global blend, and I have to say that I've always been pretty clear about what I was buying and where it was sourced;  not once did I feel deceived or misled.

    But I remain interested in the subject of sourcing, because I know it is one near and dear to farmers and regional authorities who feel legitimately passionate about their brand equity.  I do think that Californias Olive Ranch seems to have been above board in their attempts to communicate transparently about its products, but I'm also glad to see that the company plans to add a QR code that will help consumers get more information about the olive oils they are buying.

    More transparency and greater amounts of information always are good approach in retailing … I've said it hundreds of times here on MNB, and I continue to believe it.

    Published on: April 25, 2022

    The New York Times has an excellent op-ed piece by  Moira Weigel, an assistant professor of communication studies at Northeastern University, in which she argues that Amazon has successfully rewired the retail experience in a way that may not ultimately be good for consumers or society - interposing itself between sellers and customers in a way that prevents any level of transparency about the third-part sellers from whom are sourced so many of the items sold via Amazon.

    An excerpt:

    "If you are like most Americans, you think you know Amazon. Recent polling shows that 72 percent of us view the company favorably. This makes it the second-most-trusted institution in the country, after the military. A 2018 study found that Amazon is the only institution to appear among the five most trusted by both Democrats and Republicans. And the Covid pandemic has made Amazon ever more dominant. Industry research estimates that there are now 153 million Prime members in the United States, nearly as many as the number of voters in the 2020 election. About 40 percent of online purchases in the country take place on the site, at the low range of estimates — compared with roughly 7 percent on the site of its closest competitor, Walmart.

    "Over the past few years, Amazon has mostly avoided the crisis of trust that has engulfed other tech companies. It has had no Cambridge Analytica scandal. There have been no Amazon Papers. Despite some initial difficulties, the pandemic has strengthened its position. Amazon stock prices increased by more than a third since March 2020. This year, as the value of Meta crashed, Amazon’s stock suffered a relatively minor decline. CNN ran its stock market story with the headline 'Amazon Is the Anti-Facebook.'

    "If you are reading this, there’s a good chance you’re an Amazon customer. And if you feel guilty about that, it is probably because you are thinking about the warehouse and delivery workers whose labor Amazon exploits, the small merchants whose successful products Amazon copies, the beloved local bookstores whose bottom lines they undercut. Or maybe you just think about all the boxes piling up by your door.

    "You should feel guilty. I do, anyway. Convenience is not a good reason to participate in exploitation or waste. But guilt is a weak political emotion. In my experience, it can easily lose out to the 3 a.m. realization that Baby Two has soaked through her sleepsack and we need more Huggies Overnites ASAP.

    "But a series of product safety cases that have been brought against Amazon over the past few years makes clear that its rewiring of retail poses risks to customers as well. Above all, the cases highlight a significant gap between how most people understand the world’s largest e-commerce company and what that company actually does.

    Conversations about Amazon tend to emphasize the company’s omniscience — the cutting-edge technologies that it uses to gather data on its competitors and customers and to discipline its workers. But in reality, as the scholar Miriam Posner has written, supply chains that drive global capitalism depend on 'partial sight.' Companies are able to get customers so many things so cheap and fast because they know only what they have to; toward everything else, they often turn a blind eye."

    You can read the entire piece here.

    Published on: April 25, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Salon reports that "leaked footage of a video call in which Starbucks' billionaire CEO urges managers to step up their efforts to thwart worker unionization is yet another sign of the company's growing desperation, labor advocates said on Thursday.

    "In the undated video published by the pro-worker media organization More Perfect Union, Starbucks founder Howard Schultz - who earlier this month became the company's CEO for the third time - implored managers 'to encourage [employees] to really understand what it might mean to vote for a union.'

    "Offering no evidence, Schultz - who referred to unionizing employees as 'so-called workers' and 'a new outside force that's trying desperately to disrupt our company' said, 'I wasn't there, but there are stories that people potentially had been bullied not to vote.'

    "Starbucks North America president Rossann Williams also appears in the video, telling managers that it's their 'number one responsibility' to 'do your role' to ensure that employees 'get balanced information about what's going on'."



    •  The New York Times reports that "the National Labor Relations Board issued a complaint against Starbucks on Friday for what the agency said was the unlawful firing of seven employees in Memphis in retaliation for seeking to unionize.

    "The labor board said the company fired the workers in February because they 'joined or assisted the union and engaged in concerted activities, and to discourage employees from engaging in these activities' … Starbucks did not immediately comment but said at the time that it had fired the workers for violating safety and security policies, including allowing members of the media into the store to conduct interviews after hours and failing to wear masks during the encounter."



    •  The Wall Street Journal reports that "several Apple stores have shown interest in unionizing, according to organizers. Workers from a store in Atlanta last week filed for a union election with the National Labor Relations Board, the agency confirmed, and could soon approve a vote. Apple employees at a New York store are also aiming to file for an election, according to organizers.

    "While demands could vary by store, some Apple organizers have said they seek higher pay, increased tuition reimbursement and larger 401(k) matches, among other goals. Some organizers have said Apple workers haven’t been given equitable stock options or cost-of-living adjustments, as the tech giant has soared to new financial heights during the pandemic and as inflation in the U.S. has risen to historic levels."



    •  This isn't a labor story in the strictest sense of the word, but it is relevant to the broader discussion …

    The Information writes that "Netflix’s stock collapse this week has wiped out the value of all stock options issued to company employees since 2018. It didn’t take long for employees to complain: At a staff meeting the day after the company’s earnings report on Tuesday, employees pressed the company to consider issuing extra option grants to offset losses, as a morale booster, according to people familiar with the situation.

    "The complaints put the spotlight on Netflix’s approach to stock compensation. The streaming giant allows employees to decide how much of their compensation should be paid in stock options and how much in cash … Co-CEO Reed Hastings, for instance, took 98% of his $34.65 million compensation as stock options in 2021, Netflix has said. His co-CEO, Ted Sarandos, who earns the same, took only 42% of his compensation as options."

    Published on: April 25, 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…

    •  The United States now has had a total of 82,662,748 total cases of the Covid-19 coronavirus, resulting in 1,018,335 deaths and 80,465,351 reported recoveries.

    Globally, there have been 509,596,118 total cases, with 6,243,268 resultant fatalities and 462,467,440 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 77.5 percent of the total US population has received at least one dose of vaccine … 66.1 percent are fully vaccinated … and 45.6 percent of fully vaccinated people have received a vaccine booster dose.

    Published on: April 25, 2022

    On Friday we took note of a Business Insider story "about something that someone, somewhere finds to be controversial - a TikTok video suggesting that Trader Joe's is a chain primarily targeted at affluent people.

    "According to the story, the video "spurred discussion around Trader Joe's, a chain with around 530 stores and 10,000 workers, predominantly being for rich people. It's not the first time that debate over the grocery chain's perceived priciness has gone viral on TikTok, either."

    I commented:

    As you might be able to tell from the my characterization above, I'm more shocked that this is seen as news than I am by the idea that Trader Joe's attracts an educated, well-off customer base.

    The key to Trader Joe's success, to my mind, is less about price than it is about differentiated products that appeal to people who know something about food.  It is not as health-oriented as some might think, nor is it particularly good at fresh foods.  The magic happens with the private label items that are high-quality and give the buyer a sense of being special because the products are positioned that way.

    That's a really good combination.  What is more mystifying is why more retailers don't try to find their own way to the same formula for success.

    MNB reader Steven Ritchey responded:

    I have to admit, I took a tiny bit of exception to one of your comments about Trader Joe's, you said it seems to attract younger, well paid people who seem to actually know something about food.  I sort of felt like you should have finished by adding, "unlike the rest of you clowns who wouldn't know good food if it hit you in the face."

    Really, I'm being a bit facetious here.  But for a brief moment I felt like I was being told that those who know food shop at Trader Joe's, or at least a trendy store like it.

    I've been in the business for a long time, 45 years now, so I like to think I know a bit about food.  I've been in Trader Joe's and they do run a nice store, but to me it's like a niche store.  They are missing too many brands I like, and the foods they sell are frequently not what I want.  That doesn't mean it's a bad store, because it's not.  They aim for a certain segment of the market, which is smart, every company out there has a target market, or at least should, or if they have several target markets, they have different formats to cater to each one.

    I think what I'm trying to say is that, however flippant you may have intended that remark to be, it came off, at least to me as a bit condescending.  You don't have to be a foodie to know food.

    That certainly was not my intention … to be honest, I'm not a huge Trader Joe's fan.  During the early days of the pandemic, I found the one near me to fit into the "non-essential" category, and so I think I've been inside it twice in two years.  (To be fair, though, one of the things that my local Trader Joe's had lots of during the pandemic was lines, so not everybody would agree with me.). I agree with your characterization, in general - I think that one of the things Trader Joe's is selling is a bit of snob appeal, though there also is some aspiration mixed in.



    USA Today reported the other day that "a group of scientists at the Massachusetts Institute of Technology dug deep into the science by devising an Oreometer, a device designed to split the iconic Oreo cookie with a specific amount of force. The goal was to create a perfect split every single time: one side a clean cookie, the other side with all the filling."  There's actually a name for this line of research:  Oreology.

    The story noted that one thing the scientists couldn't figure out is "how to manipulate the perfect split Oreo split with equal cream on each side of the cookie."  But you can do it so "all the cream winds up on one side," as long as the Oreo is from a freshly opened pack and separated with a twisting motion."

    I commented:

    First of all, I don't have a degree from MIT, but I think I sort of knew some of this intuitively.

    Second … I checked, and it costs more than $53,000 a year just in tuition to go to MIT.  I know I sound like a parent here, but if I were spending that kind of money on my kid's education there, and this is what they had to show for it, I might be a tad peeved.  On the other hand, if they're paying for it themselves … no, I'd still be sort of annoyed that in a world with all the problems that it has, really smart people are trying to figure out the best way to separate an Oreo.

    Especially because the best way to eat an Oreo isn't to split it.  You leave it intact, dunk it in cold milk, and then eat it.

    Prompting one MNB reader to write:

    Had to check my calendar when I read the Oreology story – thought for sure it was April 1st!

    And everyone knows that breaking two Oreos in half and creating a new double stuff cookie with two chocolate wafers as an extra is the way to eat Oreos (even better when you start with two double stuffed Oreos and make a quadruple stuffed Oreo).

    I'm a single-stuff guy, myself … and I also have to admit that I can of like it when Oreos get a little stale and soften up a bit.   



    Also got this email from MNB reader Rich Heiland:

    Your comments on the newspaper dropping delivery hit a sore spot with me. I, too, started as a paper boy, ended up as a reporter, then editor, the publisher/CEO.

    One of my former papers in Huntsville Texas came out three years ago with the announcement it was only going to do a print edition Tuesday-Thursday-Saturday. They said they were going to put their resources in a strong digital 24/7 presence. Except, they didn’t. That had cut down to an editor, two reporters, two sports reporters. As recently as a month ago they were down to an editor, one reporter, two sports reporters. Their announcement that they would have a stronger product was, well, bull …..

    The fact is that when you go digital, as opposed to a physical paper, readers no longer accept the time lag. They expect currency. They want the latest, now. This means that if a paper is going to succeed digitally it needs to increase the newsroom substantially to meet that 24/7 demand for currency. The majority of papers that have gone digital have not put the money saved from printing and distribution into news, so they will continue to slide more and more into irrelevancy (and forget attracting new generations of readers), and that’s bad news not just for readers but the very core of our democracy.

    Spot-on analysis.  Except that the sad thing, in my view, is that there are a number of people out there who do not equate a robust news media with the survival of our democracy.