IBM CEO Arvind Krishna the other day framed the decision that his employees will have to make about working remotely vs. spending time in the office. In the end, he said, it is their choice - not just about where they do most of their work, but between whether they want a job or a career.
Bloomberg reports that Kroger CEO Rodney McMullen is "committed to hunkering down for a long legal battle if US regulators attempt to block its $24.6 billion acquisition of Albertsons Cos."
McMullen said yesterday that "usually you wouldn’t commit in advance to litigate. In this case we both committed to litigate in advance."
Bloomberg writes that this statement does not mean that Kroger and Albertsons expect their proposed merger to be rejected by the Federal Trade Commission (FTC); McMullen said that the process is “where we thought we would be at this time."
The story goes on:
"'We believe very strongly that we had the best professional advisers, and Albertsons had the best professional advisers, on being able to find a viable solution,' McMullen said. A successful outcome would mean that 'the combined company will create the right environment and lower prices, and we’ll be able to divest stores to somebody that’s good' … McMullen said he believes there’s a 'meaningful number' of potential buyers who could purchase stores without taking on too much debt, including private equity companies and existing retailers."
I don't know much about how the process works, but I'm a little surprised that Kroger and Albertsons are willing to wave a red flag in front of a bull - they're essentially telling the FTC that regardless of how and why it rules on the proposed deal, they're prepared to go the mattresses to make it happen.
I'm not sure if this will have any impact on how the FTC decides on this. But I guess discretion is out the window.
California is responsible for more than 12 percent of the agriculture in the US, but, as CalMatters reports, "The future of farming in California is changing as the planet warms, altering the rain and heat patterns that guide which crops are grown where."
Take for example, Gary Gragg, described as "a nurseryman, micro-scale farmer and tropical fruit enthusiast," who believes the time is quickly coming when "he can grow and sell mangoes in Northern California."
"'I’ve been banking on this since I was 10 years old and first heard about global warming,' said Gragg, 54, who has planted several mango trees, among other subtropical trees, in his orchard about 25 miles west of Sacramento.
"Gragg’s little orchard might be the continent’s northernmost grove of mangoes, which normally are grown in places like Florida, Hawaii and Puerto Rico.
"Northern California’s climate, he said, is becoming increasingly suitable for heat-loving, frost-sensitive mango trees, as well as avocados, cherimoyas and tropical palms, a specialty of his plant nursery Golden Gate Palms … Mangoes may never become a mainstream crop in the northern half of California, but change is undoubtedly coming. Hustling to adapt, farmers around the state are experimenting with new, more sustainable crops and varieties bred to better tolerate drought, heat, humidity and other elements of the increasingly unruly climate.
"In the Central Valley, farmers are investing in avocados, which are traditionally planted farther south, and agave, a drought-resistant succulent grown in Mexico to make tequila.
"In Santa Cruz, one grower is trying a tropical exotic, lucuma, that is native to South American regions with mild winters. Others are growing tropical dragonfruit from the Central Coast down to San Diego.
"Some Sonoma and Napa Valley wineries have planted new vineyards in cooler coastal hills and valleys to escape the extreme heat of inland areas. And several Bay Area farmers have planted yangmei, a delicacy in China that can resist blights that ravage peaches and other popular California crops during rainy springs.
There is, of course, good news and bad news. CalMatters points out that "pistachios have grown to one of the state’s mightiest crops," but climate change means that "crop scientists are working to save these valuable orchards from the effects of warming."
And there will be other repercussions. Think, for a moment, about those mango groves in Florida, Hawaii and Puerto Rico - if the weather has warmed to the point that they can be grown less than 100 miles from San Francisco, does that mean that they can't be grown in the places where they traditionally have thrived? What will climate scientists do in those places to preserve that sector of their farming business?
(A thought occurs. Perhaps they can come up with a way to convert the massive Nordstrom store being closed in downtown San Francisco into an indoor hydroponic or vertical farming installation? They're certainly going to have the space, and it is hard to imagine another retailer taking that square footage. It could, in fact, reflect a radically different approach to urban development in troubled times.)
This all matters to the food business community because retailers have gotten used to a steady supply of everything, sourced from all over the world. It is not hard to imagine that this could be a supply chain that could be broken by climate changes, which could mean that retailers will have to change their mindsets about selection and communicate effectively to shoppers about why these changes are taking place.
"Advisers to the Food and Drug Administration on Wednesday unanimously endorsed making birth control pills available without a prescription, overriding concerns raised by the agency about whether the medication could be used in a safe and effective manner without physician oversight.
"The FDA’s outside experts expressed confidence, in a 17-0 vote, that consumers could use an oral contraceptive called Opill correctly. They said the benefits of over-the-counter status, such as increased access to contraception, outweighed the risks, including a potential lack of adherence to daily pill-taking that could result in unintended pregnancies.
"The move sharply bolsters the likelihood that Opill, made by HRA Pharma, which is owned by the consumer health giant Perrigo, will become the first birth control pill available in the United States without a prescription. The FDA does not have to follow the guidance of its advisers, but a rejection of the OTC application — especially given the committee’s view — would be awkward for an administration that has repeatedly pledged to protect reproductive rights following the Supreme Court’s overturning of Roe v. Wade, which guaranteed the nationwide right to abortion."
A final FDA decision on OTC availability of this particular birth control pill is expected this summer or early autumn.
I mention this because "OTC" means that these pills potentially could be sold at a lot of retailers around the country with HBC departments, which means that there also is the potential for their availability could become yet another battle in the culture wars over women's reproductive rights. Inevitably, there will be protests in some places where they don't want certain FDA-approved medicines to be available, which will mean that retailers will have to make decisions about what they are going to carry or not carry.
Retailers need to be prepared to be plunged into a battle with which they'd rather not be associated, but that's life these days. Get ready.
As Axios points out, "If the FDA follows the recommendation and switches HRA Pharma's Opill away from prescription-only use, it could expand the availability of contraception — and deepen partisan rifts over reproductive health in the post-Roe landscape … Reproductive rights advocates say that allowing for the over-the-counter sale of birth control pills could increase access to the 19 million women living in contraceptive deserts."
"The F&B industry has always been about building brands from Coca-Cola to Pepsi, Oreos to Lay’s. What’s in a name? A lot. But after the pandemic and inflation, are brands dying a slow death – or at least facing new resistance? In a world of billion-dollar brands, what one might call “no names” – or at least not conventional brands — are turning into among the biggest names in the industry as private label soars amid skyrocketing inflation and brand backlash. We may be in a golden age of private label, even if Americans’ romance with F&B brands remains very much in place.
"Studies show that more consumers are willing to go from 'Buy, buy brands' to 'Bye bye brands' as prices increase, even as brands report robust profits. It’s a big shift in consumer behavior, as the pandemic and inflation leave their imprint on F&B in a topsy-turvy world where private label is on the rise … there are signs of slowing brand loyalty amid rising prices. Private labels such as Trader Joe’s; Kroger, Simple Truth and Private Selection at Kroger, Archer Farms at Target, Great Value at Walmart, and 365 by Whole Foods are winning over the public. While Americans still love their brands, the pandemic and inflation have turned the past year into a showcase for private label power. More Americans are turning a new leaf when it comes to private label."
"A top Amazon executive told CNBC the company is 'not concerned' about a wave of unionizing globally because the e-commerce giant has competitive pay and benefits.
"The comments come amid high-profile efforts in the U.S. and U.K. from Amazon warehouse workers to form unions.
"Stefano Perego, vice president of customer fulfilment and global ops services for North America and Europe at Amazon, said the company’s pay and benefits are attractive.
"'As long as we offer competitive pay invaluable benefits, we don’t think that our people will choose to be represented, but this is their choice,' Perego told CNBC in an interview on Tuesday.
"There appears to be a rising push for unionization among Amazon workers."
• Sprouts Farmers Market announced that it is launching a new retail media network with Instacart, using the latter's Carrot Ads system to allow advertisers to have a consistent presence across websites and apps operated by both Sprouts and Instacart.
An excerpt from the announcement:
"Brands can now combine the power of Instacart's robust advertising solutions with Sprouts' healthy approach to grocery shopping to drive measurable growth for their businesses. In addition to allowing brands to increase the reach of their Instacart Ads campaigns to include the Sprouts ecommerce experience, for the first time, brand partners can target specific ad campaigns to consumers solely on the Sprouts' ecommerce experience leveraging Instacart Ads technology.
"Califia Farms, General Mills, Primal Kitchen, and Siete Family Foods are using Carrot Ads to reach, inspire, and connect in a variety of ways with consumers shopping Sprouts' ecommerce experience."
• From CNBC:
"Wendy’s CEO Todd Penegor told CNBC’s Jim Cramer on Wednesday the fast-food chain’s artificial intelligence partnership with Google is the 'first step' toward additional technology changes at its restaurants.
"Wendy’s and Alphabet-owned Google worked to create an AI chatbot specifically designed for drive-thru ordering. The Ohio-based burger chain will run a pilot program of the AI drive-thru at several locations in the Columbus area starting in June, Penegor told Cramer.
"This new drive-thru feature aims to 'take out the slowest point in the order process, ordering at the speaker box,' to create a more pleasant restaurant experience, the CEO said. 'We’re going to learn a lot. First step on a lot of innovation,' he added.
"Penegor stressed his commitment to modernize Wendy’s over the next few quarters, emphasizing the opportunity with digital menu boards, for example. All together, he said Wendy’s is trying to 'drive the restaurant of the future' with these initiatives."
The comments came in the same week that CKE Restaurants Holdings, the parent company of fast food chains Carl’s Jr. and Hardee’s, said that it is rolling out artificial intelligence at its drive-thrus.
"Food prices were flat for a second straight month in April, relief for many Americans who have faced higher costs at the grocery store in recent months.
That is a big improvement from February, when prices rose 0.4 percent over the month.
"Prices for food at home fell 0.2 percent in April compared with the month before. Prices for food at restaurants continued to pick up, rising 0.4 percent over the month, a slight decline from 0.6 percent in March.
Despite the relief in food price growth, costs are still much higher than they were before the pandemic. Overall, food prices have climbed 7.7 percent over the last year.
"Prices for fruits and vegetables decreased 0.5 percent over the month, and the index for meats, poultry, fish, and eggs also declined 0.3 percent. Prices for milk fell 2 percent, the largest decline since February 2015. Egg prices, which spiked after an outbreak of avian influenza and the cost of fuel, feed and packaging rose, fell 1.5 percent after a 10.9 percent decline in March.
"Prices for cereals and bakery products rose 0.2 percent, down from 0.6 percent the month before."
• Associated Food Stores (AFS), a provider of groceries and other goods and services to independent retailers in nine Intermountain states, and Symbotic Inc., an A.I.-enabled robotics technology company, "announced they have entered into a commercial agreement to implement Symbotic’s A.I.-powered robotic warehouse automation technology in AFS’ Utah distribution center.
Symbotic’s end-to-end automation system, with robotic case pick capabilities, will allow AFS’ distribution center to improve a variety of retail-facing experiences, including overall supply, expanded selection and delivery of products to stores."
Got the following email from MNB reader Tim McGuire:
Kevin - on the topic of mass shootings and the unwillingness of many politicians to enact sensible gun control laws. As another reader pointed out, gun violence is the number one killer of children in the US, so my question is “How about we protect our kids from bullets instead of from pronouns?” Just saying.'
We had a story the other day about Michelle Obama serving as a co-founder and strategic partner for a new company, PLEZi Nutrition, which has as its stated goal "to create higher standards for how the U.S. makes and markets food and beverages for kids, leading with nutrition, taste, and truth." I pointed out yesterday that I got several emails about this story that, to be honest, I'd rather not post - they took aim at Michelle Obama in a personal way that I found unnecessary. A common point was that PLEZi Nutrition is a for-profit company, and therefore it - and the former First Lady - have no credibility.
Which led me to comment:
It is true that it is a for-profit company, describing itself as "a public benefit corporation, meaning that the for-profit company was created specifically for the public's benefit and will balance its profit needs with its mission to help improve child nutrition."
You can believe that or not. You can be a fan of Michelle Obama or not. You can trust her motives, or impugn them. Up to you.
But, let's be fair. Are you equally harsh about other former White House residents and employees who have left government and then moved into for-profit enterprises? Or is this a purely partisan enterprise?
Which led one MNB reader to write:
No one attacked Mrs Obama… Bottom line … Mrs Obama’s Nutritional Program failed miserably.. which is something you failed to report. Having healthy selections are coming from home … and not government!!
First of all, you don't know that "no one attacked Mrs. Obama." Unless, of course, you are hacking my email.
I'm not sure that it can be said that Michelle Obama's efforts "failed miserably." I think that she raised people's consciousness about nutrition in some circles, and not in others. It is true that she didn't change the world, and also true that we'd be better off if all parents fed their kids healthy food. But I also think that as a taxpayer, I'd prefer that government money dedicated to school lunches ought to go toward healthy food.
Still, I think she was fighting an honorable fight, and one that needed to be fought.
The other day we took note of a Marketing Daily report that Safeway and its parent company Albertsons have agreed to write a $107 million check to settle a lawsuit charging that stores in Oregon deceptively inflated meat prices before launching a buy-one-get-one (BOGO) promotion … Safeway and Albertsons will pay $107 million into a settlement fund to benefit shoppers who participated in Buy One, Get One Free or Buy One, Get Two Free promotions at Safeway locations in Oregon using a Club Card between May 4, 2015 and Sept. 7, 2016.
According to the story, "In a suit filed May 2016, Oregon residents and Safeway shoppers Schearon Stewart and Jason Stewart alleged that Safeway inflated the regular purchase price of meat in order to pass along the cost of the supposedly 'free' items to its Club Card members."
The irony, of course, is that theoretically, Club Card holders are supposed to be the retailer's best customers - you know, the ones who are supposed to get the best deals, preferential treatment. The ones to whom a retailer should be most loyal. Guess they didn't get that memo.
MNB reader Monte Stowell wrote:
Who keeps their receipts from 2015 or 2016? Is Safeway and Albertsons going to identify those people who have the Club Memberships from those years? These BOGO ads only tell me your prices are too damn high to begin with. Second, these BOGO promotions penalize those people who are single or people who do not have freezers to store these bargains. People vote with their pocketbooks, and this is why retailers like Winco Walmart, etc. are prospering.
On the subject of food inflation, MNB reader Thomas Parkinson wrote:
I asked Google Bard how much grocery prices have gone up in the past two years. I think, from a consumer's point of view, it is not the percentage of inflation but just the basic price increase of groceries. When I hear inflation is going down, it doesn't repair what has already occurred to prices. Here is Bard's answer:
The following are some examples of how much grocery prices have risen in the past two years:
A gallon of milk was $3.50 in March 2021 and is now $4.20.
A dozen eggs was $1.75 in March 2021 and is now $2.50.
A pound of ground beef was $3.25 in March 2021 and is now $4.00.
A loaf of bread was $2.00 in March 2021 and is now $2.50.
Yesterday we pointed to a CBS News report about how Starbucks has announced that it is now going to charge patrons a buck for one special request that used to be free.
According to the story, "The coffee chain will charge customers a dollar extra to get their Refresher beverages made without water, angering some brand loyalists. Starbucks said the charge is necessary because the juice drinks are more expensive to make when they're not diluted … Refreshers are cold beverages consisting of flavored juices, freeze-dried fruit chunks, water, various milk choices and lemonade, according to the chain's website. Fans of the drinks took to social media to express their disappointment."
"There will be an additional cost of $1 for Starbucks Refreshers Beverages customized with no water, as this customization requires extra ingredients," the company said in a statement.
However, CBS News notes that at some stores, customers also are being charged an extra dollar if they order refreshers "with light ice," which is not mentioned in the new corporate policy.
I commented, in part:
I didn't have to take to social media to tap into the outrage over this new policy. We had plenty of it in my own family, where my daughter traditionally has ordered a "venti strawberry acai refresher with no ice, no strawberries and no water." (I don't know how she drinks the stuff, but that's what she likes.) What she would do is bring the drink home and then split it into two, adding her own preferred amount of water and ice, and giving one of them to Mrs. Content Guy.
Now, one could argue that in some ways she was gaming the system - but it was Starbucks that set up the system and made the rules. And it was our local baristas who encouraged her to order the drink without water, ice and strawberries, because they saw how often she was placing the same order. They tried to save her some money.
Now, the company is changing the rules. And instead of being an advocate for the shopper, Starbucks has decided it is better off being an advocate for its own bottom line.
One MNB reader reacted:
Why is it bad policy to charge a fair price for the ingredients used to make your preferred drink? They are willing to customize their standard offering to cater to your personal preference. If in doing so, they incur incremental cost, it seems reasonable that they price to recover that cost.
To begin with, they don't charge for many customizations.
My daughter also points out that when she has ordered refreshers at different Starbucks, the recipe seems to be variable - it almost never is the same. So her response - and apparently that of many fellow customers - is to bring consistency to a system that doesn't have it.
As I said yesterday, these all are first world problems. But I still think that Starbucks is abandoning its role as advocate for patrons in a way that may be good for the short-term bottom line, but damaging to long-term relationships. And they're doing it at a time when it already has raised prices several times, and has conceded that many of its stores are inadequate to what consumers are ordering today.
Finally, yesterday I cited an Axios piece about the cost of food. At least, some food:
"A new restaurant called Mischa in midtown Manhattan is serving a $29 hot dog that's being skewered as a symbol of krazy food inflation … The restaurant's dinner menu describes the $29 dog as coming on a potato bun with chili and condiments."
The Axios story also points out that in New York City, you can get a $29 ham-and-cheese takeout sandwich at Eli Zabar’s E.A.T. on the Upper East Side and a $50 burger at the Minetta Tavern.
Hot dog aficionados in the New York metropolitan area should know that they can get one of the world's best hot dogs just 30 minutes away, in Mamaroneck, New York, at the iconic Walter's, for less than four bucks. Which is more than it used to cost when Michael Sansolo, Mrs. Content Guy and I were growing up just blocks away (Michael and Mrs. Content Guy went to high school together across the street), but a bargain.
MNB reader Stanton Love responded:
While you’re making ready to eat food comparisons, why not mention Manhattan’s Costco Wholesale’s iconic hot dog and soda for $1.50 + tax?
I would guess Costco’s reason to avoid raising their hot dog price is closely tied to their customer draw and very strong price image . . . regardless of everything else.
For the record, as iconic as Costco's hot dog may be, it is a poor imitation of the vastly superior hot dog served at Walter's.
And, from MNB reader Neil Brown:
My wife of 48 years, who grew up on Sylvan Avenue in Mamaroneck, was ecstatic to hear that her beloved Walter's is still thriving. Thanks for making her day.
I've written a lot about Walter's over the years. For your wife, here's a golden oldie from 2015: