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Monday, September 25, 2017

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Monday Morning Eye-Opener: Turn The Page

by Kevin Coupe

Hate to begin the week on a downer, but…

The New York Times has a piece about how, within weeks of the announcement that famed magazine editor Graydon Carter was stepping down from his leadership of Vanity Fair, “three other prominent editors - rom Time, Elle, and Glamour - announced that they, too, would be stepping down.”

Then, Jann Wenner, who founded Rolling Stone, said he plans to sell his controlling stake in the company. “Suddenly, it seemed, longstanding predictions about the collapse of magazines had come to pass,” the Times writes. “Magazines have sputtered for years, their monopoly on readers and advertising erased by Facebook, Google and more nimble online competitors. But editors and executives said the abrupt churn in the senior leadership ranks signaled that the romance of the business was now yielding to financial realities.”

The Times notes that “before Mr. Wenner put Rolling Stone up for sale, Wenner Media sold Us Weekly and Men’s Journal to American Media Inc., the owner of the National Enquirer. Johnson Publishing, which is based in Chicago, sold the magazines Ebony and Jet last summer to a private equity firm. Rodale, whose titles include Bicycling, Runner’s World and Men’s and Women’s Health, recently said it, too, was for sale; a deal is expected to be announced in the coming weeks.”

The Times goes on: “Kurt Andersen, a former editor of New York and, with Mr. Carter, a founder of Spy magazine, said that print magazines were still breathing, but that the recent upheaval was a sign that the denouement might not be far off. ‘The 1920s to the 2020s was kind of the century of the magazine,’ he said, noting that The New Yorker and Time were founded in the decade before the Great Depression. Today, he added, the industry was in ‘more of a dusk, a slow dusk, and we’re closer to sunset’.”

“Andersen, who now writes books and hosts a public radio show, said that magazines might eventually gain a cult following akin to the interest around other obsolete media, like vinyl records. ‘Eventually, they’ll become like sailboats,’ he said. ‘They don’t need to exist anymore. But people will still love them, and make them and buy them’.”

It is a shift that is worth paying attention to, especially because magazines aren’t alone in being threatened with obsolescence; any company that is adhering to traditional business models risks being disrupted out of business, or at least out of relevance. The thing is, a number of magazines have done a pretty good job of trying to diversify, adapting and exploiting digital platforms, and yet the numbers for what they see as the core products have largely continued to decline. It simply has not been enough.

It is a scenario that other business sectors - especially retailers have to look at it and think about and - most important - act upon. It can and should be an Eye-Opener.

Navigating The Strong Headwinds Of The Future

In the Harvard Business Review, there is a piece by author/growth strategist Eddie Yoon in which he concludes that one of the reasons that the traditional supermarket industry is facing “strong headwinds” leading to “long-term decline” has nothing to do with disruptive competition, but rather because most people hate to cook, and the evidence suggests that this group is getting larger rather than smaller.

An excerpt:

“I’ve come to think of cooking as being similar to sewing. As recently as the early 20th century, many people sewed their own clothing. Today the vast majority of Americans buy clothing made by someone else; the tiny minority who still buy fabric and raw materials do it mainly as a hobby. If that’s the kind of shift coming to the food industry, change leaders and corporate strategists will have their hands full.

“The risk to traditional grocers and Big Food is not just market share declines but category obsolescence. To prevent that, the industry needs to stop putting Band-Aids on a major bleed-out, and instead make a decision to amputate through ruthless portfolio strategy. Food manufacturers need to identify categories that are long-term losers, and exit by selling them while they can.”

This means embracing technological innovations that may seem futuristic in nature but could be game changers - for example, something called MATS technology, or microwave assisted thermal sterilization, in which food is sterilized “with minimal heat, pressure, and time so that the texture and taste of the food remains restaurant-quality, but “remains packaged at room temperature, and remains safe to eat for months on end.” This may be “a tough sell to consumers, but it represents a profound breakthrough in shelf life that could have a massive impact on inventory management, distribution, and broader supply chain benefits.”

This is just one option. The bottom line, Yoon writes, is that the food industry “must stop trying to live in the past, when most households cooked most meals from scratch.” Survival for the industry likely rests in the rediscovery of its “pioneering spirit and missionary DNA” and the willingness to “embrace new science and technology.”

KC's View: In other words, moderate change isn’t enough. Supermarkets started out being category killers, but many have lapsed over the years into something bigger and yet somehow less dangerous. I’m not sure if this is complacency, or just the kind of inevitable sanding off of the edges that comes with age and bulk. Now, killers no longer, many supermarket companies risk being road kill. MATS technology may be a solution, or not … but it seems evident to me that Yoon is right - amputations are called for, and band-aids are not nearly enough.

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From MyWebGrocer...

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Ahold Delhaize Looks For Its Own Path To Survival

Bloomberg has a piece in which it quotes Dick Boer, chief executive officer of Royal Ahold Delhaize, as saying that “we have to make the store more exciting. The shopping environment needs to be easier, less complex and more entertaining.”

According to the story, “Boer estimates that as much as 15 percent of grocery purchases will move online by 2025, but that means most customers will still visit stores -- especially for fresh items like meat and produce. To make Ahold’s stores more enticing, they may add restaurants and other gathering spots.”

Boer seems to believe that the key to survival is to make sure “traditional supermarkets are still exciting places to visit.” While the company’s online business, Peapod, has been operating for 25 years, Boer says it isn’t yet profitable - though it is a necessity in this marketplace. And he says that Ahold Delhaize-owned chains will offer their own meal kits through Peapod, though he also believes that the meal kit business needs “the support of a home-delivery system” and “the support of dry groceries.”

KC's View: In some ways, this is the third story in a series this morning … but I also have to suggest here that at least when I visit my local Stop & Shop, there seems to be very little evidence of innovative thinking or a desire to make the store more exciting. I can’t talk about every store in every market that is owned by the company … but my everyday shopping experience at an Ahold Delhaize-owned leaves a lot to be desired.

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Food Delivery Biz Competition Ramps Up

The New York Times has a story about how UberEats - the food delivery business owned by the disruptive ride-hailing company - is seen as a component that could be a big winner.

According to the story, “UberEats stands out even from the rest of the company’s fast-growing — and unprofitable — business. The delivery service, available in more than 120 markets globally, sometimes eclipses Uber’s main ride-hailing business in markets like Tokyo; Taipei, Taiwan; and Seoul, South Korea, the company said. The number of trips taken by UberEats drivers grew by more than 24 times between March 2016 and March 2017. As of July, UberEats was profitable in 27 of the 108 cities where it operated. Uber declined to reveal the service’s revenue.”

The Times writes that “Uber executives said UberEats … had several advantages over rivals. For one, Uber has a network of more than two million drivers who can also deliver food. Cars used for UberEats also do not need to pass all of the inspection standards required to carry passengers, widening the potential delivery labor pool. (Drivers need not own a car at all; UberBike is a popular delivery method for food orders.) Uber has also spent the better part of a decade mapping cities and finding the most efficient routes, which the company said may help improve delivery times.”

The story points out that “the competition is stiff. Postmates, which established a foothold six years ago, has raised more than $250 million, has more than 100,000 delivery drivers (the company calls them “postmates”) and makes 2.5 million deliveries every month. Grubhub, a public company, had $3 billion in gross food sales in 2016, with an active base of 8.17 million customers.”

And then, there’s Amazon … which “has teamed up with a company called Olo, which provides digital order and pay technology to 200 restaurant brands with about 40,000 U.S. locations, potentially giving Amazon access to a slew of delivery orders … The deal with New York-based Olo, which counts Shake Shack founder Danny Meyer as an investor, could bring fast-food restaurants like Chipotle, Five Guys and Wingstop to the Amazon Restaurants delivery service. Olo provides the technology platform to publish menus and take orders while Amazon arranges the deliveries.”

KC's View: If the predictions are right, and the $10 billion fast food delivery business actually does pass $35 billion by 2020, we can expect a lot more competition and probably some more mergers and acquisitions. I can’t say I’m thrilled about an Uber driver delivering my food, but maybe that’s just me.

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From Webstop...

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From The Path to Purchase Expo...


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Target Expands Restock Program To Eight New Markets

In Minnesota, the Star Tribune reports that the Target Restock program to eight new markets, bringing it to a total of 11 markets with potential access to 70 million people, or about one-fifth of the US population. Among the cities now served by the program are New York, Chicago, Los Angeles, San Francisco and Washington, DC.

Target Restock, the story explains, “allows online customers to pick from a list of 15,000 household items to fill a box, which is delivered the next day for $4.99. The products range from personal care and baby items to cleaning supplies. The weight limit is 45 pounds … It's one of the latest examples of how Target is combining stores and digital with the aim of making shopping more convenient for customers - and competing against Amazon, in this case its Pantry service for Prime members.”

KC's View: It is movement in the right direction, but sometimes it seems as if Target too often is moving in slow motion. Even the best of intentions are of limited value when other companies are innovating faster and dancing around you.

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From the National Grocers Association...

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Worth Reading: Toy Story

Good piece in the Washington Post about how, throughout the country, “independent toy stores are seeing a revival as parents — and their children — look for unique shopping experiences that stand out at a time when so many of their shopping habits have been reduced to impersonal clicks of a button. While adults may be inclined to compare prices or shop from their living rooms, children would rather take their allowances and birthday money to a store that allows them to play and explore.

“It’s a wildly different story than at Toys R Us, which for decades was the country’s preeminent toy retailer, with a towering flagship in New York’s Times Square and a ubiquitous icon, Geoffrey the Giraffe. The company had been in free fall for years and analysts said the bankruptcy filing was inevitable.”

In other words, bricks-and-mortar can work … albeit, in this case, independent bricks-and-mortar that has been able to find success that lately has eluded the much bigger Toys R Us.

Go figure. You can read the entire story here.

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From ProLogic Retail Services, an AppCard company...

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The MNB Walmart Watch

The Street reports that Walmart plans “to offer meal kit services on its website in December, according to the owner of a meal kit company that's currently in talks to work with the grocery behemoth … Essentially, Walmart will be a portal for different meal kit companies to sell their products as a third-party host. The meal kit companies will then pay the retailer a referral fee for driving customers to them.”

FastNewsBeat

• The Washington Post has a story about pea milk, described as “the newest nondairy beverage on the block. It’s vegan, nut free, soy free, lactose free and gluten free. It’s better for the environment than almond milk. And it has more protein and calcium than other alternative milks … Pea milk doesn’t taste like peas, and it’s not made in the same way almond milk is, by soaking in water. For Bolthouse Farms’ Plant Protein Milk, the process begins with harvesting yellow peas and milling them into flour. That flour is processed, separating the pea protein from the fiber and starch. The pea protein is further purified and blended together with water and other ingredients, including sunflower oil and sea salt, as well as vitamins like B12.”

The Post notes that “Plant-based milk sales are on the rise, while sales of traditional dairy milk continue to decline — though sales of yogurt and cheese are staying strong. Recent research from Nielsen has found that the plant-based milk category is up 3.1 percent since last year, while cow’s milk sales are down about 5 percent over the same period. According to Nielsen research from 2016, almond milk is the top-selling milk substitute in America, with sales growth of 250 percent from 2011 to 2015.”

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From the National Grocers Association...


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Your Views

…will return.

From The MNB Sports Desk

In Week Three of National Football League action - during which politics seemed to get a lot more attention than the field of play - the games ended up this way:

Baltimore 7
Jacksonville 44

Denver 16
Buffalo 26

Pittsburgh 17
Chicago 23

New Orleans 34
Carolina 13

Tampa Bay 17
Minnesota 34

Cleveland 28
Indianapolis 31

Miami 6
NY Jets 20

Houston 33
New England 36

Atlanta 30
Detroit 26

NY Giants 24
Philadelphia 27

Seattle 27
Tennessee 33

Kansas City 24
LA Chargers 10

Cincinnati 24
Green Bay 27

Oakland 10
Washington 27




In Major League Baseball, the playoff picture is becoming a lot clearer - in the American League, the Cleveland Indians have clinched the Central Division championship and the Houston Astros have clinched the Western Division championship. The Boston Red Sox and New York Yankees have both clinched playoff berths, though the Eastern Division championship is yet to bd determined.

In the National League, the Washington Nationals have clinched the Eastern Division championship, while the Los Angeles Dodgers have won the Western Division. The Arizona Diamondbacks have clinched a playoff berth, but while it looks like the Chicago Cubs are likely to win the NL Central, they can’t mathematically do so for another cup of days.

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"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

Editorial continues after a word from our sponsor...

Industry Drumbeat

Good Is Not Good When Better Is Expected

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

Finally, a word from our sponsor...

Industry Drumbeat

"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

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