business news in context, analysis with attitude

Published on: August 30, 2022

by Michael Sansolo

Here’s a painful truth: despite having spent nearly my entire career working in multiple roles with the food industry, I am near worthless in the kitchen. To be blunt, I love eating, but I’m an inept cook.

That reality hasn’t impacted me much thanks to my very good decision to marry a woman nearly four decades back who, among her many good traits, is an amazing cook. Thanks to her, my role in the kitchen is simple: I do the dishes.

But my marital bliss isn’t the point of this article; rather it’s about overcoming things we cannot do. So here’s another truth, I’m not good at many things and if you found my old high school teachers they would assure you that I was never meant to speak anything but English.

And they were wrong. Thanks to a business assignment in the past decade, I got to spend considerable time working with retailers in Latin America, which meant I had to vastly improve my Spanish skills. And believe me, I was intimidated by that task.

Then I found an app called Duolingo, which is not only free, but also helps people like me learn to read, speak and understand a new language through fun, simple lessons and the continuing challenge of maintaining a learning streak and, of course, competing with other learners.  (I tried some other apps, both free and not, and none compared to Duolingo for me.)

While I’m not quite ready to deliver an entire presentation in Spanish, I can now easily navigate an airport in say, Buenos Aires, or order the correct food in Spanish at any local Mexican restaurant. My daily lesson streak at Duolingo is over 3,000 days and my skills are vastly improved.

But here again, this article isn’t about my abilities in Spanish (though I have also dabbled in German, Czech and Klingon. Duolingo can help with all, even for us Star Trek nerds.) It’s about helping people overcome their lack of abilities.

For example, Duolingo is about to launch an entirely new educational effort with mathematics, a subject that vexed countless students in school and then adults in real life. The new program, reported by Fast Company, aims to help everyone - from nine to 92 - improve their math skills and based on my experience with languages, I’m betting it will work.

As I read about the new effort on math, it occurred to me that academic subjects aren’t the only place where many of us struggle.  Perhaps game-like efforts could help in other areas, specifically cooking. A few years back I would have thought Gamification was a weird concept, until I actually dipped my toe into the Duolingo waters. Making learning a game hasn’t made me fluent, but it has made me more committed in a way that would shock my 10th grade Spanish teacher. 

Cooking is a vastly different skill than math or language, but breaking it down into small parts - the way Duolingo does with language - might help even the least confident cook get a better sense of how to prepare dishes one small step at a time, which in turn would make a lot of self-proclaimed terrible cooks, far more able to start getting some meals on the table. 

And for once, we’d have a game that’s a true win-win, well at least for the supermarket industry.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com.

His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

And, his book "Business Rules!" is available from Amazon here.

Published on: August 30, 2022

We had a story last week about how malls are turning to food retailers to save what in many cases can be described as distressed real estate.  I recently had a chance to visit a new Eataly in Silicon Valley - more precisely, in the Westfield Valley Fair mall in San Jose, where it opened last June, taking up part of three floors in a facility that seems to have more than its share of vacancies.  To be honest, I remain skeptical about the fit.

And, some bonus pictures from Eataly…nice store, but not a lot of customers.

Published on: August 30, 2022

Here's a story from Bloomberg that ought to grab the attention of anyone in the food business … or, for that matter, eats food:

"Drought is shrinking crops from the US Farm Belt to China’s Yangtze River basin, ratcheting up fears of global hunger and weighing on the outlook for inflation. 

The latest warning flare comes out of the American Midwest, where some corn is so parched stalks are missing ears of grain and soybean pods are fewer and smaller than usual. The dismal report from the Pro Farmer Crop Tour has helped lift a gauge of grain prices back to the highest level since June.

"The world is desperate to replenish grain reserves diminished by trade disruptions in the Black Sea and unfavorable weather in some of the largest growing regions. But an industry tour of US fields over the past week stunned market participants -- who had been more optimistic -- with reports of extensive crop damage due to brutal heat and a lack of water."

The story goes on:

"Traders always watch weather forecasts closely but this year the vigilance has intensified -- every bushel matters. While corn, wheat and soybean prices have cooled off from record or near-record highs seen earlier this year, futures remain highly volatile. Bad weather surprises from now until fall harvests are finished could send prices soaring again."

You can read the entire, entirely sobering story here.

Published on: August 30, 2022

Advertising Age has a story about how "the nation’s largest food delivery app, DoorDash, is putting a positive spin on what it does for local communities with a major new campaign called 'A Neighborhood of Good in Every Order'."

According to the story, the campaign - which will cut across platforms from broadcast TV to digital media and other out-of-home media - will convey "the economic trickle-down effect of every single order placed on the platform, including supporting jobs for delivery 'Dashers' as well as sales for local merchants.  'Who knew heartbreak could be so good for business,' declares one ad, showing a retailer packing a bag of tissues, chocolate and wine destined for delivery to a victim of a breakup."

The goal of the campaign is to put DoorDash "at the center of an economic ecosystem".'

“Most of our campaigns to date have been primarily in service of driving new customers, driving volume, and we’ve known since the early days that we have a bigger story to tell - and the question has always been how do we do both: How do we drive business outcomes, but truly start to tell the story to tell of DoorDash and the impact it can have in communities,” David Bornoff, DoorDash’s senior director, head of brand marketing, tells Ad Age. “What we are really trying to do is communicate that there is a lot more behind an order and an order truly kicks off a butterfly effect in the neighborhood … It empowers a Dasher to earn and it empowers a merchant to drive more sales through their store.”

Published on: August 30, 2022

Interesting piece from CNBC as it analyzes Amazon's decision to shut down its Amazon Care business, described as "its effort to tackle telemedicine and primary care for the employer market on a national basis – which Amazon itself trumpeted as gaining more and more clients."

"Is that all the proof we needed of what many people have said over the years: health care is just harder to disrupt than most industries?

"Maybe not," CNBC writes, "though maybe it is a signal of a change in the approach to how Amazon will attempt to gobble up more health industry market share. The shutdown of Amazon Care may come back to a simple choice that companies, especially those with a lot of cash, have to make when it comes to breaking into new markets: build or buy?

"For some health-care industry watchers, it’s no surprise that Amazon Care is going away as a stand-alone entity. When Amazon made the decision in July to acquire primary care company One Medical, which does what Amazon Care was hoping to ultimately do on a national basis, it was the writing on the wall that something was going to change. And for a cash-rich company looking for opportunities to buy into a stock market that had pushed down the value of recently public health companies – One Medical had traded as high as $58 in 2021 and Amazon announced plans to buy it for $18 a share – Amazon may have been more opportunistic than anything else in plotting the next stage of its future in health."

At the same time, Fierce healthcare writes that "analysts at Forrester called the shuttering of Amazon Care 'a strategic move' rather than a failure.

"'We believe the closure of Amazon Care comes at an opportune time alongside Amazon’s planned acquisition of One Medical and entry into the bidding war for Signify Health,' wrote Forrester vice president and research director Natalie Schibell along with researcher Kara Wilson in a blog post.

"Amazon has reportedly put in a bid for Signify Health, a home health technology and services provider.

"'This is unequivocally not the end of the retail titan’s healthcare ventures. Instead, the shut down of Amazon Care is a strategic plan to move the focus of their healthcare offerings from the employee to the consumer,' Schibell and Wilson wrote.

"Citi analysts agree, writing in a flash note last week that Amazon's move to get rid of its virtual care solution 'is far from the death knell for Amazon's healthcare ambitions' but is 'more like just the beginning,' Seeking Alpha reported."

CNBC concludes:

"It’s clear Amazon still plans to be a formidable player in the health-care space. It can leverage its ability to personalize its offerings, connect to its pharmacy, and ultimately pose a threat to many other retail giants aiming to upend healthcare. Walmart acquired telehealth company MeMD in 2021; CVS, which already offers telemedicine through a deal with American Well, is another rumored bidder for Signify; and Walgreens has VillageMD and is opening up hundreds of offices in markets around the country.

"That retail disruption is only going to grow, for a bottom-line reason. When you look at the share of wallet, from consumers to employers, the health-care market is a big part of spending. Amazon is already in almost every chunk of the wallet, maybe not banking (though it does have credit cards)."

Published on: August 30, 2022

The Los Angeles Times reports this morning that the California State Senate and Assembly have both passed a new bill that "aims to improve and standardize working conditions for fast-food workers," creating a new state Fast Food Council that would have "the authority to establish standards for wages, working hours and conditions," and would include representatives from both management and labor.

According to the story, "The bill establishes that legislators will have sufficient time to review and potentially block any standards set by the council, and the council has a sunset in six years, allowing legislators to evaluate its effectiveness.  The new version of the bill also limits the minimum wage from rising above $22 an hour in 2023."

The bill, while supported by organized labor forces, has been "heavily opposed by the California Restaurant Assn., International Franchise Assn. and California Chamber of Commerce," as well as other pro-business organizations.

The Times writes that it is by no means a certainty that the bill will be signed by Gov. Gavin Newsom, who "has not stated a position on the bill."  However, the Governor's but his Department of Finance "released an analysis in June opposing the measure, saying it would create 'significant ongoing costs' at the Department of Industrial Relations and a 'fragmented regulatory and legal environment' for employers."

Published on: August 30, 2022

The New York Times has a story about how more Americans than ever are responding to inflation pressures by using  “buy now, pay later” services to buy food and other essentials.  In the process, the Times writes, they may be putting themselves into debt.

An excerpt:

"When pay-later services like Klarna, which was founded in Sweden, arrived in the United States about a decade ago, they were largely used for one-time, discretionary purchases like concert tickets and high-end clothing. But as inflation mounts, Americans are increasingly turning to them to finance something much more mundane and essential: what they eat.

"And there are signs that the use of these services for repeated, everyday expenses like groceries and restaurant meals is pushing some users, particularly younger people who are already overextended, deeper into debt."

The story notes that "pay-later companies say their products are a convenient tool — like layaway plans or credit cards — to help consumers manage their finances in tough times. The services, with breezy names like Zip, Zilch and Affirm, are easy to use, with well-designed apps, websites, virtual credit cards and widgets. Shoppers can apply for them in a checkout line and be approved in minutes.

"Unlike credit cards, most of the services don’t charge interest or require applicants to undergo extensive credit checks. There is usually a processing fee for each purchase, typically paid by the merchant."

But, there are some harsh realities:

"Some services charge late fees that can exceed the interest charges on credit cards, according to a March report by Consumer Reports. Companies aren’t always transparent about the terms of using the service, and missed payments can hurt users’ credit scores.

"Pay-later users tend to be economically vulnerable. A July report by the financial services company Fitch Ratings found that they carry more debt than the general population, and that more than 41 percent of applicants have a poor credit history.

"The report showed that delinquency rates for some pay-later services more than doubled from June 2021 to last March — from 1.7 percent to 4.1 percent at Afterpay, for example — while delinquency rates for major credit cards remained unchanged, at roughly 1.4 percent."

Published on: August 30, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  Advertising Age reports that Ahold Delhaize-owned FreshDirect, even as it pulls the plug on operations in the Philadelphia and Washington, DC, markets, is out with a new broadcast television ad campaign "that posits the brand as a destination for busy consumers looking for value and convenience."

It is, the story points out, "FreshDirect’s first foray into broadcast TV as it tries to raise brand awareness following a boost from COVID-19."

“The pandemic really gave us a lot of a kick in the butt to say there’s so much demand out there,” John MacDonald, FreshDirect’s chief marketing officer, tells Ad Age, adding the previous marketing efforts were "more about function and food than how to connect with customers."

I would argue that they have to do something.  I love it when companies fight above their weight class, but this seems to be a case in which Ahold Delhaize and FreshDirect are fighting below their weight class.  

Published on: August 30, 2022

•  The Associated Press reports that "Walmart filed a motion on Monday to dismiss a Federal Trade Commission lawsuit that accuses the nation’s largest retailer of allowing its money-transfer services to be used by scam artists.

"The motion calls the FTC’s June lawsuit an 'egregious instance of agency overreach.'

"The FTC alleges in its lawsuit that for years, Walmart failed to properly secure the money-transfer services offered at its stores, stealing 'hundreds of millions of dollars' from customers. The agency said Walmart didn’t properly train its employees, failed to alert customers, and used procedures that allowed fraudsters to cash out at its stores. The FTC had asked the court to order Walmart to return money to consumers and to impose civil penalties on the company."

Published on: August 30, 2022

•  Chattanooga.com reports that Food City announced its intention "to acquire the Cooke’s family of stores in the Greater Cleveland market area. The stores range in size from 15,000 to 35,000 sq. ft., and include five Fresh n’ Low locations and the Cooke's Food Store and Pharmacy.  Cooke's was founded in 1936, and at least for the immediate future, the plan is to maintain those banners after the acquisition closes.

In a prepared statement, Steven C. Smith Food City president, said, "We’re extremely excited to add the Cooke’s family of stores to our existing Food City locations, which have served the Cleveland community for many years. We plan to make some large investments in the greater Cleveland area to ensure the future success of our new teammates."

•  In Bend, Oregon, the Bulletin reports that "a Safeway employee who tried to disarm a gunman Sunday was fatally shot during the encounter, but police say he likely prevented more bloodshed at the east Bend grocery store.

"Donald Ray Surrett Jr., 66, of Bend, was praised for his heroic actions while trying to stop Ethan Blair Miller, said Bend Police Department spokesperson Sheila Miller at a press conference Monday.

"Moments before his encounter with Surrett, Ethan Miller, 20, of Bend, also fatally shot customer Glenn Edward Bennett, 84, of Bend, and injured two other people, police said.

"Ethan Miller killed himself as officers stormed the grocery store in The Forum Shopping Center on U.S. Highway 20 near NE 27th Street, police said … The shooter appeared to have left behind a series of violent threats on the online social reading platform Wattpad, but they have now been removed. One post said an attack was initially planned at Mountain View High School on the first day of school. Krantz said at the press conference Monday that he could not confirm the shooter’s connection to the high school."

Published on: August 30, 2022

•  Stater Bros. Markets has hired Rebecca Calvin, most recently the SVP/Chief Merchandising Officer at The Save Mart Companies and former Kroger executive, to be its new Senior Vice President and Chief Marketing Officer, succeeding Dennis McIntyre, who is retiring.

Published on: August 30, 2022

…will return.