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Friday, February 22, 2019

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Friday Eye-Opener: Brains, Snouts, & Cheeks

by Kevin Coupe

Food retailers looking for ways to stay ahead of the culinary curve apparently now have more weapons to help them differentiate themselves.

Calf brains, pig snouts and beef cheeks … which are part of what is called the nose-to-tail movement.

Bloomberg has a story about how, “while the rest of the world has been doing this for centuries, Americans are just starting to catch up when it comes to nose-to-tail eating. Nontraditional cuts of meat are popping up on menus from Portland to Miami. And people are loving them.”

An example:

“At Cafe Marie Jeanne in Chicago, chef and owner Mike Simmons said he was getting bored playing it safe with dishes like cheesy broccoli. So he bought 10 pounds (4.5 kilograms) of calf brains, prepared them with lemon, capers, and herbs, and offered them at brunch. He figured he’d sell a few and throw away the rest. Instead, he sold out, and customers came back asking for the dish that’s now become a menu staple.”

Or: “In Denver’s historic Larimer Square district, you can order Pad Thai Pig Ears at gastropub Euclid Hall, and in Phoenix, grab some pig face dumplings at Asian fusion joint Clever Koi.”

The story makes the point that these nontraditional cuts of meat serve to provide some interest and variety in the segment at a time when plant-based meals seem to be all the rage. At the same time, it isn’t just exotic purveyors making the leap into the nontraditional …Tyson Foods tells Bloomberg that “an increasingly diverse American population” is creating and expanding “the domestic market for so-called variety meats” such as “chicken paws, tripe and tongue.”

It will only increase: “A third of the nation’s shoppers are African-American, Hispanic or Asian, and their buying power is increasing.”

Now, I have to be honest here … I’m not immediately turned on by this trend, but I’ve watched enough Anthony Bourdain in my life to be persuaded that his observation is true, that “"life without veal stock, pork fat, sausage, organ meat, demi-glace, or even stinky cheese is a life not worth living.” And even the option of trying calf brains, pig snouts and beef cheeks.

And that’s an Eye-Opener.

Publix To Expand GreenWise Format

Publix Super Markets has announced that it is adding three cities to the list of markets being served by its GreenWise Market format, which it described as “a specialty, natural and organic store” offering everything from kombucha, locally-roasted coffee, wine, local beer and smoothies at an in-store beverage bar to local and unique products, indulgent gourmet treats, body care and bulk items.

The three cities are Odessa, Florida; Nocatee (Ponte Vedra Beach), Florida; and Lexington, South Carolina. The company has a GreenWise Market operating in Tallahassee, Florida, with previously announced locations are Mount Pleasant, South Carolina; Lakeland, Florida; Boca Raton, Florida; Marietta, Georgia; Mountain Brook, Alabama; and Ft. Lauderdale, Florida.

GreenWise is still just a tiny part of the Publix fleet; it operates more than 1,200 grocery stores throughout seven states in the Southeast.

KC's View: I’m a fan of the GreenWise format, which strikes me as differentiated not just from the competition, but also from other Publix stores. That’s a good thing, especially in the right market.

I was in a Publix store the other day in Lighthouse Point, Florida, which, while it has been kept up, it certainly isn’t keeping up … if you get my meaning. I was a little surprised, because it is just a mile from some very expensive houses that are right on the water, and there’s a Whole Foods right across the street. Even Publix can’t afford to have too many of those in the current competitive environment.

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From FMI...

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Soda Taxes: Sometimes They Work, Sometimes Not So Much

On National Public Radio’s The Salt, there is a story about how soda taxes - designed to raise revenue and help fight the obesity epidemic - may work, though “sometimes not as well as hoped.”

The story looks at a variety of studies into the efficacy of the taxes, such as in Berkeley, California, the first US city to impose them. A study there showed a 52 percent decrease in consumption - though that is based on consumers’ own recollections and statements, not any sort of objective analysis.

Analysis of an even more sweeping soda tax in Philadelphia has shown a 46 percent drop in consumption of soda, though there’s a catch - there has been an increase in soda sales outside the city limits, where there is no tax.

According to the story, “There are political obstacles as well. The soda industry has been fighting back, arguing that soda taxes are unfair to consumers and won't really make people healthier. In fact, it recently strong-armed California's legislature into reluctantly passing a moratorium on further soda taxes by cities in that state. San Francisco and Oakland, Calif., however, have soda taxes already in place, and Seattle implemented one at the beginning of 2018.

“Soda tax advocates, meanwhile, say that there's a simple way to keep people from avoiding the tax by going outside the city: Just pass a tax that covers an entire state — or maybe even a whole country.” Like in Mexico, where there has been one since 2014, and consumption of sugary sodas is down eight percent.

KC's View: The Philadelphia situation makes an important point - people will find what they want to find, no matter what obstacles government policies may put in their way. And so the taxes are not having the impact that some would’ve hoped.

I’m conflicted about the whole idea. I don’t think that soda should be demonized to the degree that, say, tobacco is and should be. But if it can be demonstrated that sugary drinks have an impact on public health, which then has an impact on public policy because of rising health care and insurance costs, then I do think there needs to be an appropriate policy response. Now, I think it probably is more appropriate to, say, not serve it for lunch in schools that always has struck me as sort of silly.

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From WAFC...

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Brands Pull Ads From YouTube Over Pedophilic Content

The Washington Post reported that a number of brands, including Disney and Nestlé, pulled their advertising from YouTube after it came to light that “comments and recommendations on the platform direct users to potentially sexual videos of children, allowing them to participate in a ‘soft-core pedophile ring’.”

The story says that “YouTube on Thursday cracked down on pedophilic content on the site by purging comments on tens of millions of videos … YouTube also terminated more than 400 channels on Thursday that posted the comments on videos featuring children.”

The Post writes that the inappropriate content was pointed out by a video blogger: “In a video that has been viewed nearly 2 million times since its release Sunday, video blogger Matt Watson detailed how users who visit YouTube for bikini shopping videos can eventually be nudged to watch videos featuring young girls. After clicking on several bikini videos, YouTube’s recommendation engine suggests that users watch videos with minors, Watson said.

“The videos are not sexual in nature — they involve children talking to the camera, performing gymnastics or playing with toys, but they are interpreted by users in inappropriate ways. The comments on the videos include hyperlinked time stamps, Watson said, allowing users to jump to moments when the girls are in compromised positions; in other instances, users posted sexually explicit comments about the children.”

KC's View: Disgusting, and brands have no choice but to quickly and publicly distance themselves from the problem. What’s interesting is how insidious it all is … it is all achieved via a variety of links that take people deeper and deeper into this content, where young people are being exploited and abused.

It demonstrates the degree to which companies like YouTube have to be vigilant about and responsible for their content.

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From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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Tough Quarter For Kraft Heinz As It Faces SEC Probe

The New York Times reports this morning that Kraft Heinz announced “a multibillion dollar write-down signaling a plunge in the value of some of its most famous brands” while at the same time saying that it “received a subpoena from the Securities and Exchange Commission related to an investigation into the company’s accounting and controls.”

According to the story, “The huge write-down appears to come from a shift in how consumers eat, emphasizing fresh food over processed products. The write-down reduced the value on the balance sheet of United States and Canadian operations and the Kraft and Oscar Mayer trademarks, the company said.”

And, the Times writes, the SEC investigation seems to be related to decisions made after the 2015 merger of Kraft and Heinz. The story says that “Kraft Heinz said that the regulator looked at ‘agreements, side agreements, and changes or modifications to its agreements with its vendors.’ With external accounting and legal advisers, Kraft carried out an investigation that led to it recording a $25 million increase in costs in the fourth quarter. The company said it should have recorded the $25 million in earlier periods.”

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From Webstop...

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Worth Reading: The Power Of Algorithmic and Human Curation

Great piece in Fast Company about Stitch Fix, an e-commerce company that specializes in automatic fulfillment of women’s and men’s clothing “using a mix of algorithmic and human curation.”

Stitch Fix, the story says, “is using its data prowess across every aspect of its business to reinvent the $334 billion U.S. apparel industry. For consumers, it’s solving the discovery problem exacerbated by the endless sea of product online, where more than a quarter of clothes are now sold … By soliciting millions of customers’ feedback and precisely measuring every aspect of the clothes it sells, from more than 1,000 brands plus its own in-house labels, Stitch Fix can offer personal styling at scale, widening the market from the very rich to the average consumer, who currently pays the company an average of $55 per item to avoid the headache of shopping.”

And it makes money: “Stitch Fix has been profitable since late 2014. It generated $1.2 billion in its fiscal 2018 with earnings of $45 million and took in $366 million in its first quarter of 2019.”

You can read the entire story here.

KC's View: One of my sons and my daughter, as well as my wife, are all dedicated Stitch Fix users … they love the idea of curated products just showing up, based on what they’ve liked and kept in the past. Interestingly, the stuff sent to my son has a higher success rate … the algorithms just seem to get him and his tastes.

There is no question in my mind that they will all respond to similar offers made to them in other retail categories.

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From The Organic Produce Summit...


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Delivery & Disconnection & Modern Day Conundrums

Wired has a piece by writer/reporter Collier Meyerson in which she talks about insights gleaned from the avoidance of supermarket shopping via Instacart.

“I signed up for the grocery delivery service exactly two minutes after a neighbor told me about it a couple of years ago,” she writes. “My local supermarket wasn’t local in the marketable sense of that word; it was the type of place where you bought a banana that had two bruises on it at purchase but somehow the next day had 19. Instacart seemed to solve so much. It alleviated my grocery shopping anxiety by taking the responsibility out of my hands entirely. It put my chefing aspirations literally on the table. And I assured myself the extra financial burden would be worth it because I would be valiantly contributing to someone in the gig economy.

“I used the service for a few months, but over time, it exacerbated a certain current-day conundrum: The more we remove ourselves from our food, the less familiar with it we become. When I used Instacart, I never touched my avocados for ripeness or assessed tomatoes for their size. I already felt profoundly disconnected from my food. I’ve never cared for a farm animal or pulled a carrot from the ground. I like cheeseburgers, but I would never personally handle ground beef. By pressing a few buttons to have a person show up to my house with a bag of groceries, I cemented that disconnection and delegated away a core part of my personal health and nutrition to someone else. Someone who likely does not have adequate time to select that food. Someone whose objective is to get it done as quickly as possible so they can drive my groceries to me so they can start the process again for their next customer.”

Meyerson argues that “using apps like Instacart should be the exception, not the rule. The further we get away from our food, the harder it becomes to understand its significance … So here’s a challenge for us all, me included: Sign off and go touch an apple.”

You can read the entire piece here.

KC's View: What this suggests to me is that companies that do a good job of connecting the e-commerce consumer to their food have an opportunity to create for themselves a real differential advantage. It means having the ability to use technology tell a compelling story, and not thinking that the technology is the bee-all and end-all. What matters is the narrative.

I think this is what Farmstead is trying to do, for example.

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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe


In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new 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 pave the 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.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand. See a sample at left…




Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

Now back to regularly scheduled editorial...

FastNewsBeat

• Albertsons-owned Safeway announced the opening of five new Akos Med Clinics - offering what it calls “a completely automated health encounter using Artificial Intelligence and Augmented Reality” - in stores located in the Phoenix, Arizona, market, which doubles the number of in-store Akos clinics it has been opened in the area.

Another two are scheduled to open in the next month, one in Arizona and one in Boise, Idaho.

James Bates, president and CEO of Akos Med Clinic, says that “much like the self-checkout for groceries, patients appreciate the autonomy our clinics provide, as well as the affordability and speed. Like many other things, Artificial Intelligence is changing how we consume healthcare, and our AI system is giving time back to providers to spend consulting with patients.”


• Southeastern Grocers - which operates Bi-Lo, Harveys, Winn-Dixie and Fresco y Mas supermarkets - said yesterday that it plans to close 22 stores as it continues to struggle competitively.

The Post & Courier reports that “Bi-Lo’s departure marks the third grocer to leave the affluent but brutally competitive East Cooper market. Food Lion closed its last store in the Charleston suburb in 2012, and Piggly Wiggly exited the next year after running into financial trouble. The area is now served by Harris Teeter, Publix, Walmart, Whole Foods, Trader Joe’s and Aldi. Newcomers Lowes Foods and Publix GreenWise are expected to open over the next few months.”

The story notes that “the financially troubled Southeastern filed for bankruptcy reorganization in March 2018 and announced it would shutter 94 underperforming stores … The measures were meant to trim the Jacksonville, Fla.-based company’s debt by about $500 million. When it emerged from bankruptcy in May, the chain had 582 stores and began upgrading several of them.”

Your Views: Deal Memo

Regarding our stories and emails about the dollar store phenomenon, one MNB reader wrote:

I'll bet more than a few of my former Walmart brothers & sisters recognize the current dollar store strategy from how Mr. Sam started: small general merchandise stores in rural areas with a commitment to low costs… what's old is new again, eh?



On another subject, from MNB reader Mike Carter:

Your story on what P&G is doing with Tide Cleaners brought to mind something my twin daughters told me recently. They are freshmen at a medium size university. They live in separate dorms and both report that most of their friends are clueless about how to wash/dry their clothes using the machines conveniently located in their dorms. My girls find it funny since they were responsible for their own laundry growing up (thanks to training from my very smart wife). So P&G may be on to something about exposing these students to their products that they are likely unfamiliar with. Our campus does offer the Tide Cleaners service and it was promoted heavily prior to start of fall semester.



Responding to yesterday’s FaceTime piece about how both New York and Amazon lost control of the narrative in their HQ2 dispute, never bothering to tell the story the way it needed to be told, one MNB reader wrote:

You are absolutely right.   Communication and education up front may have saved this marriage.   They had to know that throwing around a $3B figure was going to cause some discontent.   The business lesson is that when there are limited resources, people need to understand the trade offs.  In this case, does the $3B in incentives reduce spending elsewhere?  Will it increase my taxes?  Or is it self funding?   Same thing when projects are prioritized at retail.  People need to know how leaders choose which projects are funded and whether other projects are dead or could be resurrected if certain conditions are met.

From MNB reader Tom Robbins:

Kevin, your comments are absolutely spot on. It seems quite incredible to me, that we have “leadership” that doesn’t take time to have thoughtful discussion before racing to the media/TV cameras for sound bites. Many New Yorkers were anticipating job opportunities.

MNB reader Howard Carr chimed in:

While I agree with everything you pointed out, we must all realize what Amazon was able to accomplish at the expense of every municipality that responded to their solicitation for the HQ2 facility.  Every state, city and town that responded gave up valuable insight and factual information relating to the willingness of communities to provide incentives that, most likely, had never before even been thought of, to lure a company like Amazon into their fold.

Now Amazon, a company who’s foundation is built on data, now has the most extensive database of financial incentives for corporate location and incentives available to private industry.  The question that needs to be asked now is, “What will they do with all this information and data?”  How will they use it to enhance their objectives?  Will they share this with the rest of corporate America, or will they commercialize to their benefit?

On the blame side of the argument, I believe we have yet to hear the REAL truth as to what made Amazon walk away after having vetted all these proposals. Having been a real estate professional for more than 50 years, I can tell you that when a political/municipality wants something, they make all the obstacles fall away very quickly.  Long Island City, with the Mayor’s support and the Governor’s backing, would have been able to overcome any obstacles and gotten the approvals needed to build the project.  One lonely dissenter on the committee would not have had the political strength to shut this deal down.  There is one glaring. If not many, other reasons.  The bigger questions is:  Will the public ever find out the truth about what really killed this deal?

OffBeat: Judgement Day

With the death last November of writer William Goldman - he was best known for both the novel and film of “The Princess Bride,” as well as the screenplays for Butch Cassidy and the Sundance Kid, All The President’s Men, Marathon Man, The Stepford Wives, The Great Waldo Pepper, The Hot Rock, Harper, A Bridge Too Far, and Misery, among others - came the realization that there was one of his nonfiction books that I’d never read, but always meant to - “Hype & Glory,” which chronicled a single year in which he was a judge both at the Cannes Film Festival and the Miss America Pageant.

Not that it matters, but he may be the only person ever to do that … and certainly the only person to do it in the same 12-month period.

Published in 1990, “Hype & Glory” suffers a bit from being dated, especially the latter chapters about the beauty pageant. But the writing - funny, pointed and highly observational - transcends that small problem, and actually allows the book to provide a kind of looking glass-experience. Business is business, and both Cannes and Miss America were both businesses trying to retain relevance in a changing world; Goldman is never so caught up in either experience that he loses perspective, and in fact, his observations are pointed and right on.

At the same time, Goldman was going through some personal turmoil - he was in his late fifties, his 30-year marriage was unraveling, and he also was dealing with some physical indignities that made the two judging experiences a kind of pleasurable escape.

Goldman’s sardonic wit makes it all work. There is a wonderful moment when he goes out for a walk and decides to enjoy a vanilla ice cream cone on a beautiful day. The only downside is that the ice cream seems to be melting onto his hand at a rapid pace; then, he realizes that the white stuff all over his sleeve and hand is not vanilla ice cream, and that a seagull has defecated on him. It seems a fitting metaphor for both experiences.

Fun book, and I was thrilled when my oldest son, David, tracked down a used copy and gave it to me for Christmas.



Have you seen the trailer for the new TV version of “The Twilight Zone” being produced and hosted by Jordan Peele on CBS All Access? If not, and like me, you are a “Twilight Zone” fan, then you should, here.

It looks like lots of creepy fun … I’m totally on board. (To steal a line from the 1983 movie version - which wasn’t that good, save for the opening and closing bracketing scenes and the final segment, “Want to see something really scary?”



A reminder … I’m hosting a series of sessions next week at the National Grocers Association (NGA) Show in San Diego - one on in-store technology, one on delivery, and one on using voice technology to connect with shoppers. And, I’ll also be on the show floor on Monday afternoon, where we’ll be taping a new Retail Tomorrow podcast, looking at “Technology, Innovation & the Independent Retailer,” and featuring a great power panel. I hope you’ll stop by to say hello.



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

Sláinte!!

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From City of Hope...


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A Freshly Crafted ‘Retail Tomorrow’ Podcast

Some call it BOPIS (Buy Online, Pickup In Store). Some call it click-and-collect. No matter what you call it, this segment of e-commerce, while it presents challenges, also is an enormous opportunity for retailers that want their bricks-and-mortar stores to remain relevant, and who want to satisfy an established consumer need. (And when you put two things together, it can do magic, believe it or not.)

In this special Retail Tomorrow podcast, recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show, we convene a panel of experts from a wide range of fields to open our eyes to the possibilities.

This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

Pictured below are our panel members, from left:

• The Content Guy.
• Lee Peterson, EVP of Thought Leadership at WD Partners.
• Ben Conwell, Senior Managing Director & National Practice Leader of the E-commerce Fulfillment Group at Cushman Wakefield.
• Jeff Baskin, EVP, Global Partnerships at Radius Networks.
• Dror Cohen, Chief Of Staff of Waze Ads at Waze.
• Chris Lydle, Retail innovation Lead for Google.

Enjoy!



PWS 53