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    Published on: December 16, 2022

    A few weeks ago, I did a short piece about Titan Caskets, which is a disruptive influence in the funeral home business.  The more I learned about Titan, the more curious I got … and so I arranged for a Zoom conversation with the company's COO, Joshua Siegel, in which we discussed the impetus behind the company's creation, Titan's somewhat unconventional marketing approach, and some commonalities that Titan's priorities have with with those that I think retailers should have.

    (One note:  a technical glitch affected the format in which we did this.  Hope you don't find it too distracting.)

    If you'd rather download and listen to The Innovation Conversation as an audio podcast, click below.

    Published on: December 16, 2022

    by Kevin Coupe

    Axios reports that "dishes that are an aggressive mash-up of global flavors — like sashimi tostadas and tandoori spaghetti — will hit restaurant menus in 2023, a style that's been dubbed 'chaos cooking' … With dining out almost back to pre-pandemic levels, people continue to crave novelty in their meals."

    According to the story, " A review of year-end restaurant prediction reports reveals many common themes, such as the rise of 'eatertainment,' new interest in Latin American cuisine and nonalcoholic booze, and the emergence of a jumbled culinary genre called chaos cooking.

    "Eater describes chaos cooking as 'a new, brash food style' that's 'part neo-fusion, part middle finger.'

    "Examples include pork keema papadi nachos from Nashville's Chauhan Ale & Masala House and pastrami tacos from Delirama in Berkeley, California … Colombian restaurants are having a moment, as is other Latin and South American fare, as well as Hawaiian cuisine."

    Fascinating stuff … and I, for one, am all in for sashimi tostadas and tandoori spaghetti.  Plus, I have a hankering to travel to Nashville so I can visit the Chauhan Ale & Masala House.  (Not the kind of stuff we tend to get in suburban Connecticut … which may explain why I still love traveling.)

    I've always believed that this kind of stuff should not just be the province of restaurants.  It wouldn't be right for every food store in every place, but more than ever, people in all corners of the country have access to information about exotic foods and innovative meals via the internet and television programs that feature what sometimes is referred to as "food porn."

    Stores have the opportunity to provide Eye-Opening food experiences for their shoppers.  If I were a retailer, one of the things I would do is make sure that near the front of my store there would be a small display kitchen, and I'd be hiring chefs to come in on a rotating basis to make exciting, challenging, provocative foods that would appeal to people's imaginations.  Lots of aromas, lots of sampling … and in some cases, these chefs might be able to use their rotations to launch their own businesses.

    This is a moment to be bold, to be innovative.  It is a remarkable time in the world of food, and supermarkets should not let is pass by.

    Published on: December 16, 2022

    CNBC reports that "Walmart CEO Doug McMillon says the retail giant is managing for inflation and a slowdown in consumer demand that extends into 2023, and the economic conditions are changing what shoppers will see on the shelves of the nation’s largest retailer.

    “We’re managing this item by item, category by category,” McMillon says.  “We have a plan and adjusted our inventory to be ready for this next year."

    CNBC writes that "grocery sales, responsible for 56% of Walmart’s revenue, is a key inflation read for the McMillon and company."

    “What we’re seeing is that if you take the fresh food categories, commodities, things like proteins, things are starting to move. Chicken right now is more expensive, but beef is down. Fruit and vegetable is in pretty good shape,” McMillon says. “But dry groceries, consumables is where we’re seeing the most stubborn and persistent inflation, mid double-digit inflation. And we’re not hearing from our suppliers looking forward that’s going to come down soon."

    According to the piece, "McMillon said Walmart is continuing to look for new technology to maintain inventory and increase the speed of its e-commerce business. That includes a commitment to purchase thousands of delivery EVs from General Motors’ subsidiary BrightDrop and Canoo; the opening of next-gen fulfillment centers that use automation and artificial intelligence; and the acquisition of robotics startup Alert Innovation."

    KC's View:

    If fresh food costs are under control for the most part, and packaged food prices are staying stubbornly high, isn't this a great time for retailers to try to move shoppers into fresh food categories that tend to be higher-margin and more differentiating?  Maybe this is a time to turn traditional metrics on their head, and reorient food businesses toward food, with less of a focus on bottles and bags and cartons and jars.

    Published on: December 16, 2022

    The New York Times reports that "Amazon has agreed to a settlement with European Union regulators that will force the company to make significant changes to its business practices but also allows the e-commerce giant to avoid a drawn out legal fight and billions of dollars of potential fines, according to three people with knowledge of the deal.

    "The settlement, expected to be announced on Dec. 20, will end two antitrust investigations in Europe. The deal will require Amazon to give makers of rival products equal access to valuable real estate on its website, said the people, who would speak only anonymously before the official announcement. The company will also be barred from using nonpublic information it gathers about independent merchants to inform Amazon’s own product offerings, among other changes.

    The story says that the deal "will last five years and applies only to Amazon’s operations in the European Union, though the company could choose to adopt some of the changes outside the region. The deal helps Amazon avoid a fine of up to 10 percent of its global revenue, which was about $470 billion last year."

    KC's View:

    I'm not an antitrust expert, but I would have to imagine that the Federal Trade Commission (FTC) will be looking at the EU agreement for signs of how far it can push Amazon on making changes here in the US.

    Published on: December 16, 2022

    The Conference Board is out with a new economic forecast, predicting that "the global economy will grow 2.1 percent in 2023 … That’s down from 3.2 percent in 2022, and notably below the average pace of growth (3.3 percent) set between the Great Recession and COVID-19 pandemic."

    The forecast anticipates "global GDP to see slower, but still positive, growth through 2023," and that "regional downturns remain highly likely. Facing inflation, rapid interest rate hikes, and war, both the US and Europe are on the cusp of recessions. However, these should be relatively short and shallow, leaving growth for 2023 as a whole at zero in the US and 0.2 percent in the Euro Area."

    And, the Conference Board says, while there are "better days ahead," folks probably shouldn't get too excited:  "As inflation and COVID disruptions are tamed, the global economy is set for a modest revival in 2024, though growth will remain below the prepandemic average."

    KC's View:
     

    Everything is cyclical, and it is important to remember that sometimes one has to endure a certain amount of pain to get to the other side.  That said, the modesty of the recovery means that retailers able to offer consumers aspirational offerings without breaking the bank are likely to be winners.  

    Published on: December 16, 2022

    A coalition of organizations and advocates - including FMI-The Food Industry Association, the National Grocers Association (NGA), and the Consumer Brands Association (CBA) - is asking Food and Drug Administration (FDA) Commissioner Robert Califf "to make a commitment to support a new leader to oversee its food program in light of the Reagan Udall Foundation’s report detailing longstanding problems that have undermined the agency’s effectiveness.

    "The groups urged Commissioner Califf to name an empowered deputy commissioner to manage the program, one of the options recommended in the Foundation’s report to strengthen leadership and accountability at the FDA.  The coalition letter calls on Commissioner Califf to appoint a food safety expert by February to serve in that role on an acting basis while the agency works through how best to implement the empowered deputy commissioner model."

    An excerpt from the letter:

    "We believe the Expert Panel report the Foundation issued on December 6 accurately captures the problems involving the structure, leadership, culture, transparency, and accountability within the FDA’s foods program, all of which are preventing the agency from doing its best to protect consumers and enable industry to innovate. We also appreciate the Expert Panel’s conclusion that having a single leader who is empowered and accountable for the success of the foods program is central to its success; it is noteworthy that all of the panel’s options for structural change include this critical element. We also agree with the Expert Panel’s recognition that the inspection and compliance functions of the Office of Regulatory Affairs (ORA) needs to be integrated with the policymakers that reside in the FDA’s Centers.

    "We continue to believe that the option of placing an empowered food expert in a deputy commissioner position with line authority over all elements of a unified Human and Animal Foods Program is the critical element of a successful organizational and leadership structure."

    Published on: December 16, 2022

    Capterra - which describes itself as "a free online marketplace vendor serving as an intermediary between buyers and technology vendors" - is out with its 2022 Amazon Seller Survey, which suggests that "while just 31% of surveyed FBA (Fulfillment By Amazon) users currently sell on eCommerce marketplaces other than Amazon, 99% intend to sell on other marketplaces in 2023, including Google Shopping, Facebook Marketplace, and Walmart Marketplace."

    Here's the rationale:

    "Amazon has again raised fees for its third-party sellers, in response to the rising cost of eCommerce logistics. This time, it’s through a new holiday peak fulfillment fee for Fulfillment by Amazon (also known as FBA, Amazon’s sprawling in-house fulfillment service that makes Prime same-to-two-day delivery possible).

    "While fee hikes are nothing new for FBA users, especially since the beginning of the pandemic, small retailers may be approaching the end of their rope … Nearly half of small retailers on Amazon say recent fee hikes will make their business less profitable."

    The argument is that "the increasing cost of using Fulfillment by Amazon is a risk to Amazon, given sellers’ reliance on FBA and customers’ expectations for low prices and fast shipping. By making it more expensive for sellers and consumers to participate in its marketplace, Amazon is opening the door to rivals like Walmart, which offers similarly convenient shopping and selling experiences at a lower cost."

    KC's View:

    Are we getting to a tipping point where some of Amazon's e-commerce dominance may be diminished?  It kind of feels that way to me … it is likely to happen slowly, maybe even imperceptibly at first, but I have this sense that there's something happening.

    I suggested in our Innovation Conversation predictions segment this week that Jeff Bezos will return to Amazon as CEO in 2023.  The more I think about it, the more it comes back to this - Andy Jassy, the current CEO, is in the unfortunate position where he is battening down the hatches, patching holes, and shoring up defenses as Amazon deals with significant headwinds.  The question is whether, under these circumstances, Amazon is able to innovate and grow to the degree it needs to so that its influence and roles in our modern life remains undiminished.  If attention is steered away from shopper-centric innovation and toward operations-focused efficiency, the ground will have been prepared for a Bezos return.

    That's my prediction, and I'm sticking to it.

    Published on: December 16, 2022

    •  From Fox Business:

    "For the first time ever, some Walmart customers in Florida, Texas and Arizona will be able to have their packages delivered by drone.

    "Walmart's drone service officially launched for select customers in Tampa and Orlando, Florida; Phoenix and the Dallas-area just ahead of the holidays.

    "The nation's largest retailer has been working with national drone services provider DroneUp since 2020 when it began trialing deliveries of at-home COVID-19 self-collection kits.

    "Walmart announced in May 2022 that it was expanding its DroneUp delivery network to reach 4 million U.S. households across six states including Arizona, Arkansas, Florida, Texas, Utah and Virginia by the end of the year.

    "This means drone deliveries will be available in 23 cities across the nation by the end of the year, according to Walmart."

    •  Walmart said this week that it has launched a new Text to Shop offering, which it says is "seamlessly connected to your Walmart account, so we know your usual ordered items. Simply text the items you need, and they get added to your cart. Choose from the full selection of Walmart’s products, including items from your local store and from Walmart.com. Text 'reorder' to quickly review and add your frequently ordered items to your cart."

    The Text to Shop experience is available on iOS and Android devices.

    Published on: December 16, 2022

    •  The Associated Press reports that "the number of Americans applying for unemployment benefits fell significantly last week, a sign that the labor market remains strong even as the Federal Reserve continues to raise interest rates in an effort to cool the economy and slow inflation.

    "Applications for jobless claims fell to 211,000 for the week ending Dec. 10, down by 20,000 from the previous week’s 231,000, the Labor Department reported Thursday. Jobless claims are seen as a proxy for layoffs, and last week's level was the lowest in more than two months."


    •  The Wall Street Journal reports that "November retail sales fell 0.6% from the prior month for the biggest decline this year, the Commerce Department said Thursday. Budget-conscious shoppers pulled back sharply on holiday-related purchases, home projects and autos. Manufacturing output declined 0.6%, the first drop since June, the Fed said in a separate report."


    •  From the Associated Press:

    "Starbucks workers around the US are planning a three-day strike starting Friday as part of their effort to unionize the coffee chain’s stores.

    "More than 1,000 baristas at 100 stores are planning to walk out, according to Starbucks Workers United, the labor group organizing the effort. The strike will be the longest in the year-old unionization campaign.

    "This is the second major strike in a month by Starbucks’ US workers. On Nov. 17, workers at 110 Starbucks stores held a one-day walkout. That effort coincided with Starbucks’ annual Red Cup Day, when the company gives reusable cups to customers who order a holiday drink.

    "More than 264 of Starbucks’ 9,000 company-run US stores have voted to unionize since late last year.  Starbucks opposes the unionization effort, saying the company functions better when it works directly with employees. But the company said last month that it respects employees’ lawful right to protest."

    Published on: December 16, 2022

    …will return next week.

    Published on: December 16, 2022

    In Thursday Night Football action, the San Francisco 49ers defeated the Seattle Seahawks 21-13.

    Published on: December 16, 2022

    I have to admit it - I watched the entire second season of "The White Lotus" on HBO.  I did this despite the fact that I wasn't an enormous fan of the first season.  But the buzz about the second season was so great that I decided to give it a shot … and found it to be every bit as irresistible as a great trashy novel, with a knock-out finale that aired last weekend.

    I have two favorite characters from the second season - F. Murray Abraham's Bert Di Grasso, who is an aging womanizer torn between regret and what he remembers as being lust, and Tom Hollander, who plays Quentin, a British expat in Italy with expensive tastes and questionable motives.

    One note:  there was a moment when I was at speaker's bootcamp earlier this week when several of us were saying that we hadn't seen the finale and were avoiding all press coverage because of concern about spoilers.  One woman said that she couldn't wait to get on an airplane so she could watch it, and my response was fast:  "You can't watch that on an airplane!  Somebody might be sitting behind you and will see your screen!  Plus, it could be a kid, or someone with sensitivity to sex and violence."

    Which also is my message to you.  "The White Lotus" is great, decadent fun, but be careful about where and when you watch it.


    I want to be clear about something:  This is not a movie in which I had the slightest scintilla of interest.  None.  But … this morning this trailer dropped, and suggests a subversive approach that I must admit got me a little bit interested:


    My wine of the week:  the 2019 Sokol Blosser Estate Pinot Noir, from the Dundee Hills of Oregon's Willamette Valley, which is perfect with grilled salmon or even a nice seafood risotto.  Fantastic!


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

    Sláinte!!