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    Published on: January 24, 2023

    Today, the second and concluding segment in my conversation with Chieh Huang, the co-founder and CEO of Boxed, in which we chat about the singular insights he thought Boxed brought to ther marketplace when it was founded a decade ago … what he knows now that he wishes he'd known then … and what the driving insights will be that power the company's future.

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


    Boxed yesterday announced that it has "entered into a second lien secured term loan facility with a lender (the “Lender”) that provided $10 million of new funding to the Company at close. The new facility also provides for an additional $10 million in funding, subject to the completion of certain milestones in a process for the sale of the Company. Concurrently with the financing with the Lender, the Company entered into an amendment to its existing first lien debt facility with funds and accounts managed by BlackRock that, among other things, reduces the Company’s minimum liquidity covenant by $5 million."

    KC's View:

    This reads to me like a kind of bridge loan/investment that still has Boxed pursuing a sale, though it remains to be seen what kind of company might buy it.  (My bet remains on a sale that gives both Boxed and the acquiring company strategic advantages, as opposed to a purely cash-driven deal.)

    The bridge financing isn't to be minimized, however - getting even $10 million in financing can be tough in the current environment.  And I'm glad that Boxed is getting what appears to be breathing room.

    Published on: January 24, 2023

    Amazon has unveiled a new subscriptions service that it says will allow Prime members to "receive all of their eligible generic medications for just $5 a month and have them delivered free to their door. Medications that treat more than 80 common conditions, such as high blood pressure, anxiety, and acid reflux, are included in the RxPass subscription."

    Here's how Amazon introduces the new Prime benefit, called "Rx Pass:"

    "Nearly half of adults take two or more medications each day, and one quarter of adults say they find it difficult to afford the medications they need. Amazon Pharmacy is tackling these challenges by making medications more accessible, affordable, and convenient. RxPass helps patients manage common health conditions - high blood pressure, anxiety, or acid reflux, for example - by providing reliable access to commonly prescribed medications, delivered with the ease and support customers expect from Amazon."

    The intro goes on:  "With RxPass, Prime members can get as many eligible medications as they need for one flat, low fee of $5 and have them conveniently delivered free to their door. It’s estimated that more than 150 million Americans take one or more of the medications available through the RxPass monthly subscription. RxPass is our latest effort to help patients save time, save money, and stay healthy. It’s available now to customers in most U.S. states."

    This analysis from CNBC:

    "Amazon has pushed deeper into health care in recent years. The company launched its own online pharmacy in 2020, a service that was born out of its acquisition of PillPack in 2018. Amazon introduced, then shuttered, a telehealth service called Amazon Care, and announced in July it would acquire boutique primary care provider One Medical.

    "Amazon also offers a Prime prescription savings benefit, which offers a discount of up to 80% on generic medications and up to 40% on brand-name prescriptions.

    "Amazon is beefing up perks for its Prime subscription program as CEO Andy Jassy looks to cut costs elsewhere in the company. Amazon has eyed laying off about 18,000 employees, while it froze hiring in its corporate workforce and axed some projects. Still, Jassy has said Amazon intends to keep pursuing long-term opportunities, including health care."

    The CNBC story notes that "RxPass doesn’t offer insulin or specialty medications, and it’s not available for people on Medicaid or Medicare."

    KC's View:

    This announcement suggests that while Amazon continues to make cuts throughout the company, its ambitions to make Prime as attractive as possible - because it leads to customer acquisition, which drives sales - have not subsided.

    In many ways, this kind of move makes more sense than, say, the acquisition of MGM - it seems to me that giving Americans access to less expensive prescriptions is the kind of game-changing move that Amazon needs to be making.  Much of the tech world is retrenching and rightsizing, and companies that continue to innovate are more likely to be rewarded.

    However, I think it remains to be seen whether Amazon is going to be able to implement this and get scale to the degree that it needs to.  So many of its healthcare initiatives have either been abandoned or have had minimal impact (is PillPack any bigger now than it was when Amazon acquired it?) that Amazon has some proving to do.

    I'm not sure about the legal issues involved, but it is a shame that RxPass doesn’t offer insulin or specialty medications, and isn't available for people on Medicaid or Medicare - this would seem to be fertile ground on which to grow a business centered on low-cost prescriptions.

    Published on: January 24, 2023

    The Wall Street Journal reports that a new Morning Consult poll suggests that "Americans are cutting back on many everyday purchases amid inflation, while splurging on a few big-ticket items. Think shopping for staples at the dollar store dressed in Gucci sneakers.

    "Welcome to the split-brain budget."

    According to the story, "Economists call this an attempt to reclaim agency over their finances. Some shoppers are splurging occasionally to remind themselves that they still lead a good life, economists say."

    The Journal goes on:  "A slowdown in economic growth and still-high inflation are fueling these types of spending decisions that feel good, even if they’re not especially budget-friendly, says Michael Liersch, head of advice and planning at Wells Fargo. 

    "It’s a phenomenon similar to staying up late to reclaim hours in the day lost to work and chores, behavior known as revenge bedtime procrastination. Call it revenge inflation spending."

    KC's View:

    This makes me wonder if, while we're going to see a lot of market share growth among price-oriented retailers, we're also going to see stability at specialty food retailers what offer small and affordable luxuries.  Think retailers like Dorothy Lane Market, Bristol Farms, Metropolitan Markets, Westborn Markets, Lunds & Byerlys - grocers who embrace their food-centric roots, who educate their shoppers, who offer both inspiration and aspiration in a way that is key to their value proposition.

    I think these sort of retailers are going to be conscious of economic realities, but also will find ways to help consumers reward themselves with the food luxuries that will make them feel good.

    Published on: January 24, 2023

    There are a number of stories this morning about how marketing decisions made by Mars Inc. about its M&M brand advertising have caused a cultural kerfuffle, leading to a move away from its animated "spokes-candies" in commercials and hiring of comedian Maya Rudolph for a new campaign that will be launched during Super Bowl LVII next month.

    Here's how the Wall Street Journal describes the scenario:

    "Changes to the candy cartoon appearances stirred up debate last year - particularly the decision to swap the green M&M’s heeled boots for sneakers. At the time, the brand marketed these changes as part of their commitment to inclusion, saying the green M&M’s new look gave the character a more laid-back style for the post-pandemic world. The decision drew jokes and criticism online. A petition to 'keep the Green M&M sexy' generated more than 20,000 signatures."

    In September, the Journal writes, "Mars announced the addition of its newest character, Purple, which was 'designed to represent acceptance and inclusivity,' the company said. Earlier this month, the brand unveiled limited-edition packaging featuring Purple and two other female 'spokes-candies' to promote female empowerment, with some money from those sales going toward nonprofits."

    The New York Times writes that "the characters, which have featured in the company’s ads for decades, were not weighing in on abortion or the storage of classified documents. But figures on the political right, including Tucker Carlson of Fox News, have criticized the candy as 'Woke M&M’s,' owing to a series of cosmetic tweaks in recent years … 'M&M’s will not be satisfied until every last cartoon character is deeply unappealing and totally androgynous,' Mr. Carlson railed on his show. 'Until the moment when you wouldn’t want to have a drink with any one of them. That’s the goal. When you’re totally turned off, we’ve achieved equity. They’ve won'."

    KC's View:

    The thing is, there are things in the world worth arguing about.  There are things in the world worth fighting for.

    But something else is true.  Which is that some people will fight and argue about stupid stuff just because they like the fight, not because the core disagreement is particularly meaningful.  These aren't necessarily stupid people, just people who like to create chaos for fun and, often, profit.  (Who, exactly, even thinks about having a drink with or being turned on by an animated candy character?)

    To meet, the kind of shoes that animated candy characters wear, or what color these animated candy characters happen to be, fits the definition of not worth noticing, much less arguing about.

    Published on: January 24, 2023

    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 US Food and Drug Administration (FDA) has proposed "a crucial change in the way the coronavirus vaccine is handled: Switching to a once-a-year shot that targets the strain expected to pose the greatest threat during the following winter — a system akin to what is used for the influenza vaccine," the Washington Post reports.

    "The proposed change is designed to reduce the complexity of the vaccine regimen for the public, doctors and manufacturers," the Post writes.  "It also reflects a view that “chasing variants” with ever-changing booster formulations is ultimately futile, in part because the public has little interest in getting repeated injections, according to a person familiar with the situation who spoke on the condition of anonymity because they were not authorized to speak publicly about it.

    "The FDA would choose the annual strain for the shots every June, in time for the updated shots to be manufactured and then administered in September, as part of a yearly inoculation campaign. The goal would be to select the strain most likely to be dominant in the winter, when people are indoors and covid cases typically rise."

    •  The US now has had 103,888,296 total cases of the Covid-19 coronavirus, resulting in 1,129,145 deaths and 100,943,432  reported recoveries.

    Globally, there have been 673,629,982 total cases, with 6,748,650 resultant fatalities and 645,593,294 reported recoveries.  (Source.)  

    •  The Centers for Disease Control and Prevention (CDC) says that 81 percent of the total US population now has received at least one dose of vaccine, with 69.1 percent. being fully vaccinated.

    Published on: January 24, 2023

    •  The St. Louis Post-Dispatch reports that "Roger Dierberg, scion of the Dierberg family and former executive vice president of Dierbergs Markets grocery stores, died Wednesday, a few days shy of what would have been his 89th birthday … An engineer, Dierberg first worked at McDonnell Aircraft, leaving in 1969 to work for the family business. He was the cousin of the growing company’s chairman, Bob Dierberg."

    The story notes that Roger Dierberg "was active in philanthropy and charity. He worked closely with Operation Food Search and was also involved in Food Industry Crusade Against Hunger, an organization devoted first to feeding people in underdeveloped parts of the world and, later, in the United States."

    Published on: January 24, 2023

    Got the following email from MNB reader Cindee Lolik:

    Just wanted to comment on the comment about employers taking on the cost of ServSafe certification.  Our Co-op has always picked up the cost of certification for our Food Service Managers, but when I read the article, I immediately looked for an alternative to the National Restaurant Association as our business does not want to contribute to the fight against minimum wage.  It may be a cost of doing business, but our dollars will not support this organization going forward and I can't imagine anyone who cares about their staff continuing to use ServSafe or requiring their staff to use it.

    Regarding the reformulation of Fat Tire beer, MNB reader Mike Sommers wrote:

    Having lived in Fort Collins for 2 years after first moving to CO back in the early 2010s, I can say I've been on enough brewery tours that I could be the tour guide.  While I haven't had a Fat Tire in years, when I heard the news I went to my local liquor store and saw some of the original formula/labels on shelf, so thought I better pick it up before I lose the opportunity.  Got home, cracked open a bottle, and thought to myself...this isn't the Fat Tire I remember.  1 of 2 things happened.  My mind is playing tricks on me (only 36 so hopefully not) or they changed the recipe early and used old labels anyway.

    I reached out to their contact form.  I'm sure that team is inundated with comments, etc. at this time, but I am interested to hear what they say.  

    Why on earth would you change the beer that put you on the map.  I know the market is saturated, sales have been down 14%, 5%, and 5%, but changing the recipe can't be a good thing.  Why not have kept Fat Tire and came out with a series of Fat Tires like they're Voodoo Ranger IPA series.  Good luck with that New Belgium!  

    Will keep you updated if I do hear a response. 

    I got the following email from MNB reader Duane Eaton about the sale of Frieda's Branded Produce:

    When I was first hired as trade show manager by the Produce Marketing Association in 1979, one of the first exhibitors I met at that year’s Phoenix show was Karen Caplan.  We’ve laughed about that a few times over the years because I was in the booth to complain about having to replace some aisle carpeting because someone had gotten spray paint on it.  When she asked how I knew the culprit was someone from her booth I showed her a piece with purple paint on it.  Case closed.

    It seems appropriate that Frieda’s will be part of Legacy Farms because legacy is the word that comes to mind when I think of the Caplan family and the unique company and culture they developed and nurtured.  While I too am glad the plan is to keep Frieda’s distinctive branding, I feel it’s equally important that they maintain the legacy of opportunity, mentoring and empowerment Frieda’s has provided to so many women in the produce industry over the past 60 years.  I’d like to thank them for the many years of industry support and wish them all the best in whatever future endeavors they may pursue.

    Published on: January 24, 2023

    The Oscar nominations are out this morning, and the major categories broke out this way:

    Best Picture

    “All Quiet on the Western Front” (Netflix) 

    “Avatar: The Way of Water” (20th Century Studios) 

    “The Banshees of Inisherin” (Searchlight Pictures) 

    “Elvis” (Warner Bros.) 

    “Everything Everywhere All at Once” (A24) 

    “The Fabelmans” (Universal Pictures) 

    “Tár” (Focus Features) 

    “Top Gun: Maverick” (Paramount Pictures) 

    “Triangle of Sadness” (Neon) 

    “Women Talking” (MGM/United Artists Releasing) 

    Best Lead Actor

    Austin Butler (“Elvis”) 

    Colin Farrell (“The Banshees of Inisherin”) 

    Brendan Fraser (“The Whale”) 

    Paul Mescal (“Aftersun”) 

    Bill Nighy (“Living”) 

    Best Lead Actress

    Cate Blanchett (“Tár”) 

    Ana de Armas (“Blonde”) 

    Andrea Riseborough (“To Leslie”)

    Michelle Williams (“The Fabelmans”) 

    Michelle Yeoh (“Everything Everywhere All at Once”) 

    Best Supporting Actor

    Brendan Gleeson (“The Banshees of Inisherin”) 

    Brian Tyree Henry (“Causeway”) 

    Judd Hirsch (“The Fabelmans”)

    Barry Keoghan (“The Banshees of Inisherin”) 

    Ke Huy Quan (“Everything Everywhere All at Once”) 

    Best Supporting Actress

    Angela Bassett (“Black Panther: Wakanda Forever”) 

    Hong Chau (“The Whale”) 

    Kerry Condon (“The Banshees of Inisherin”) 

    Jamie Lee Curtis (“Everything Everywhere All at Once”) 

    Stephanie Hsu (“Everything Everywhere All at Once”) 

    Best Director 

    Martin McDonagh (“The Banshees of Inisherin”) 

    Daniel Kwan, Daniel Scheinert (“Everything Everywhere All at Once”) 

    Steven Spielberg (“The Fabelmans”) 

    Todd Field (“Tár”) 

    Ruben Östlund (“Triangle of Sadness”) 

    Best Adapted Screenplay

    “All Quiet on the Western Front” (Netflix)   

    “Glass Onion: A Knives Out Mystery” (Netflix)  

    “Living” (Sony Pictures Classics) 

    “Top Gun: Maverick” (Paramount Pictures) 

    “Women Talking” (MGM/United Artists Releasing) 

    Best Original Screenplay

    “The Banshees of Inisherin” (Searchlight Pictures)  

    “Everything Everywhere All at Once” (A24)  

    “The Fabelmans” (Universal Pictures)  

    “Tár” (Focus Features)  

    “Triangle of Sadness” (Neon)