business news in context, analysis with attitude

Published on: November 16, 2012

by Kevin Coupe

One of the great things about the 21st century is when someone comes up with a killer business idea.

Well, Fast Company looks at just such a person. Tom Jackson, a Canadian businessman who has "launched an online service ... that enables people to send emails and videos posthumously, should they die unexpectedly."

The site: NowSayIt.com.

According to the story, "Jackson’s online business model relies on subscriptions: For $15 annually up to a lifetime fee of $140, the company encrypts and stores multimedia messages. NowSayIt’s 'MoreThanWords' service allows subscribers to attach videos, photos, and important documents to their email message, and the site provides 5GB of storage space to support files. Users assign two trustees who are empowered to release material in the advent of their demise."

Fast Company goes on: "While Jackson’s business model may seem morbid, it’s also possibly lucrative. Every year about 118,000 people in the United States die as a result of accidents, according the U.S. Centers for Disease Control. Comparable Canadian numbers are harder to come by because the government breaks them out according to province and specific types of accidents, differentiating road from rail, and accidents from dangerous goods, for example. But a 2004 private study of found 10,000 unintentional deaths. And there’s still the rest of the English-speaking world, including the U.K., Australia, and New Zealand, to mine."

(To be fair, there are other companies that offer similar services. This one just happens to be top of mind at the moment.)

Why did Jackson create the site? "It’s a combination of age, entrepreneurial spirit, and a desire to have a business that offers a service of real value to people," he says.

It's an Eye-Opener, and an example of how a smart businessman can see opportunities even in the darkest corners.

Published on: November 16, 2012

Bankrupt Hostess Brand, the manufacturer of Twinkies, said this morning that it is seeking court permission to go out of business and sell its brands and infrastructure, saying that "a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities, and it had no choice but to give up its effort to emerge intact from bankruptcy court."

According to the Reuters story, "Hostess, which has about $2.5 billion in sales from a long list of iconic consumer brands of snack cakes and breads said it had suspended operations at all of its 33 plants around the United States as it moves to start liquidating assets ... The Irving, Texas-based company said the liquidation would mean that most of its 18,500 employees would lose their jobs."

Published on: November 16, 2012

The New York Times reports this morning in a front page story that Walmart's concession yesterday in a regulatory filing that its internal probe of possible violations of federal anti-bribery laws has been extended beyond Mexico to China, india and Brazil seems to suggest that the world's biggest retailer "has uncovered evidence into potential violations of the Foreign Corrupt Practices Act."

The Times goes on: "The announcement underscores the degree to which Wal-Mart recognizes that corruption may have infected its international operations, and reflects a growing alarm among the company’s internal investigators. People with knowledge of the matter described how a relatively routine compliance audit rapidly transformed into a full-blown investigation late last year - involving hundreds of lawyers and three former federal prosecutors - when the company learned that the Times was examining problems with its operations in Mexico.

"A person with direct knowledge of the company’s internal investigation cautioned that Thursday’s disclosure did not mean Wal-Mart had concluded it had paid bribes in China, India and Brazil. But it did indicate that the company had found enough evidence to justify concern about its business practices in the three countries - concerns that go beyond initial inquiries and that are serious enough that shareholders needed to be told."

Walmart has said that all the investigations are not expected to hinder international growth.

You can read the entire story here.

Reuters also reports this morning that "Indian authorities are investigating claims that Wal-Mart Stores Inc. violated foreign exchange rules when it invested $100 million in a domestic unit owned by its wholesale joint-venture partner ... Wal-Mart, the world's largest retailer, has denied any wrongdoing. The allegations relate to the company's complex investment through debentures -- which could later be converted to an equity stake -- at a time when direct ownership by foreign firms was prohibited."

Published on: November 16, 2012

Politico reports that John Metz, who operates close to a 100 different franchise restaurants, plans to compensate for the increased health care costs required by the Affordable Care Act - better known as Obamacare - by charging customers for it, labeling receipts with the surcharge so that customers know about it.

"Although other restaurants have mused about the prospect of cutting hours for employees or passing a few pennies in costs onto customers, Metz’s surcharge proposal goes furthest in linking the customer experience with the Affordable Care Act," Politico writes, adding that "earlier this year, John Schnatter, CEO of Papa John’s, estimated that the ACA could cause him to tack a few cents onto the price of his pizzas. And Darden Restaurants - which oversees Red Lobster and Olive Garden - described plans to reduce its fulltime workforce to avoid paying health benefits."

Published on: November 16, 2012

The New York Times reports this morning that the US Food and Drug Administration (FDA) has released records "about fatality and injury filings that mentioned the possible involvement of three top-selling products.

"The Web posting of the records by the agency included 13 previously undisclosed injury filings that mentioned Rockstar Energy. The F.D.A. also released filings related to 5-Hour Energy, a popular energy shot, and Monster Energy, another popular brand."

These filings go beyond previous released information about the possible involvement of 5-Hour Energy and Monster Energy in a number of deaths.

The story notes that a report does not equal responsibility of a death, and that it can be difficult to investigate such allegations.

Published on: November 16, 2012

Online Media Daily reports that "a judge has dismissed a lawsuit alleging that Wal-Mart violated a consumer protection law by sending unwanted text messages to a customer who filled a prescription at the retailer's pharmacy.

"U.S. District Court Judge C. Lynwood Smith in the Northern District of Alabama ruled last week that Wal-Mart didn't violate the law because the customer, Stephanie Pinkard, gave the pharmacy her cell phone number. Pinkard's disclosure of that information amounted to consent to receive texts, Smith ruled ... Pinkard alleged in her court papers that she provided her cell phone number because a Wal-Mart employee said the store might need to contact her if there were problems with the prescription. Instead, Wal-Mart allegedly enrolled her in a text-message program that automatically sent messages to everyone who filled a prescription at the company's pharmacy."

Published on: November 16, 2012

The Wall Street Journal reports this morning that Hubert Joly, the new CEO of troubled Best Buy, has a refreshing attitude when it comes to "showrooming," which is the practice of going into bricks-and-mortar stores to look at items, only to turn around and order them online from the likes of Amazon.com.

“We love showrooming,” he says. “We want to turn the tables and embrace showrooming.”

The Journal writes: "What it comes down to, he said, is once a customer enters a Best Buy store, 'they are ours to lose' – whether or not their intention is to window shop and do the purchasing via Amazon. Converting more of those store visits into sales (40% of visits currently result in a purchase) is a lucrative business: improving that conversion rate by a single percentage point is worth $200 million in addition operating income, the company says."

According to the piece, Best Buy wants to both offer matching of online prices (with some limitations) and put "a broader focus on making the stores better, ranging from the mix of products on offer to more investments in training up and incentives for the 'Blue Shirts' who walk the company’s floors."

But here's the interesting part: "Another side is becoming a showroom for the company’s own website, with Mr Joly saying there is 'no reason' Best Buy can’t claim the same share of the consumer electronics market online as it does offline. It currently holds 18% of the market in physical stores, but just 7% online (Amazon has a 21% share)."

Published on: November 16, 2012

• CNN reports that "a group of Wal-Mart workers are planning to stage a walkout next week on Black Friday, arguably the biggest holiday shopping day for the world's largest retail store. The walkout builds on an October strike that started at a Wal-Mart in Los Angeles and spread to stores in 12 other cities. More than 100 workers joined in the October actions."

According to the story, "The union-backed groups OUR Walmart and Making Change at Wal-Mart, and a watchdog group Corporate Action Network, are calling on the nation's largest employer to end what they call retaliation against employees who speak out for better pay, fair schedules and affordable health care."

The story goes on: "A Wal-Mart spokeswoman said the number of workers who are raising concerns is very small and don't represent the views of the vast majority of its workforce of 1.3 million." However, some labor experts say that Walmart may be understating the potential impact of walkouts on Black Friday.

Published on: November 16, 2012

The Seattle Times reports that Starbucks has opened its first Tazo tea retail location, in University Village, "devoted more to selling tea for home brewing than to in-store tea drinking.
It includes 80 loose-leaf teas and a blending station for customers to create their own with ingredients ranging from rooibos to marigold petals.

"A small tea-barista bar at the back will serve hot and iced tea, tea lattes and sparkling tea drinks steeped and carbonated while you wait. A 12-ounce brewed tea runs $2.45; a regular latte is $3.45."

The story suggests that Starbucks is not sure the extent to which this format will be replicated; earlier this week, it acquired Teavana, another tea retailer, for $620 million.

Published on: November 16, 2012

Advertising Age reports that Frito-Lay is expanding its Cracker Jack line, with "Cracker Jack'd," which will include "a caffeinated variety called Power Bites that is drawing criticism from a health-advocacy group that fears the snack might make little Johnny a bit too hyper."

According to the story, "A Frito-Lay spokesman told Ad Age that Power Bites will include 'two flavors that will contain coffee, a natural source of caffeine, as an ingredient.' He added: 'We stand by the safety of all products in the Cracker Jack'd line, including those that contain coffee. It is worth pointing out the regulation referenced in CSPI's letter to FDA speaks to caffeine -- not coffee -- and is not an exhaustive list of the safe uses of caffeine in foods and beverages. Rather it represents one particular recognized safe use'."

The Frito-Lay spokesman added: "Cracker Jack'd is a product line specifically developed for adult consumers and will not be marketed to children. All marketing for the products will be exclusively aimed at adult consumers, and the package design and appearance are wholly different from Cracker Jack to ensure there is no confusion among consumers. The presence of coffee and the caffeine that comes with it is clearly called out on both the front and back of the package."

Published on: November 16, 2012

• The Wall Street Journal reports this morning that Kroger Co. is acquiring Axium Pharmacy, described as "a provider of brand-name and compounded pharmaceutical products ... to treat chronic, genetic and other complex medical conditions such as cancer, hepatitis C and rheumatoid arthritis."

Terms of the deal were not disclosed. The story says that Kroger is making an effort "to attract customers who require complex drug therapies."

Published on: November 16, 2012

• Thomas O'Boyle, who resigned just days ago from his post as an executive vice president at the Great Atlantic & Pacific Tea Co. (A&P), has been named chairman/president/CEO of Marsh Supermarkets, based in Indianapolis.

He succeeds Bill Holsworth, who has beens serving as interim CEO since Joe Kelley left Marsh to become president of Ahold-owned Stop & Shop.

• Publix Super Markets announced six new officer positions to take effect in 2013...

Chuck Roskovich, SVP product business development, will become division VP for the Charlotte Division.

Alison Midili-Smith, director of organizational development, has been named VP talent and organizational development.

Erik Katenkamp, director of business application delivery, will assume the role of VP information systems — application development.

Renee Kelly, director of business application delivery, also has been named VP information systems — application development.

Tom Larson, director of IS engineering, has been named VP information systems — engineering and operations.

Steve Wellslager, director of architecture and engineering, has been named VP information systems — architecture and security.

• McDonald’s announced that Jan Fields, a 35-year veteran of the company who has been running its US operations, is leaving the company after a quarter in which sales were down more than two percent. She will be replaced by Jeff Stratton, currently the company's global chief restaurant officer.

• Campbell Soup Company named Luca Mignini Senior Vice President and President-Campbell International, reporting to Campbell’s President and Chief Executive Officer Denise Morrison. Mignini currently is the CEO of the Findus Italy division at European frozen food company IGLO.

Published on: November 16, 2012

Love this email from an MNB user:

My grandfather always told me three subjects should never be discussed publicly unless one was prepared for an argument. Your recent discussions of all three… politics (today on the fiscal cliff), religion (Chick-Fil-a uproar) and sex (Petraeus scandal) certainly challenge "epistemic closure". PS, I liked how you linked the fiscal cliff discussion to a retail food business lesson with the Mark Twain "hamburger" quote.  Good Stuff.

I like to think that there is very little that I'm not willing to talk about on MNB. There have been some folks over the years who have suggested that I am playing with fire in discussing such topics and by going outside the lines of traditional business reporting.

But the simple truth is that I don't want to just go outside the lines. I want to trample them. I want MNB to be fun to read, with unexpected insights and provocative ideas. I don;t want you to get bored ... and I don't want to get bored.

MNB user Steve Paul wrote:

I am not normally moved to commentary by reporting from industry news feeds, but your opening thoughts on David Brook’s ‘epistemic closure’ point inspired me to want to rise in support of your words. Close minded approach to politics as well as business has served to put all of us in many of the sour situations we find ourselves.

When did give and take become so foreign to us? When did open minded observation and common sense solution i.e. give and take, compromise cease to be the most desirable path? If we can’t be open, observe, let go of old, embrace new, we will not evolve in response to needs before us, and ultimately fail.

Kudos to you for pointing out the obvious, and encouraging moving forward rather than stagnation.




Commenting yesterday on the meeting between President Obama and a number of CEOs in which they discussed fiscal issues, I wrote, in part:

It seems to me, based on what I read and hear, that when you come right down to it, defining the parameters of a likely deal should not be hard. Like it or not - and nobody wants to pay higher taxes - the deal is going to have spending cuts, entitlement reform, and higher revenues ...
Now all we need is for politicians to stop thinking about the next election, and start thinking about actual governance. Everybody is going to have to give in on something, everybody is going to have to feel some pain, and everybody is going to have to risk annoying their political bases.

Which led one MNB user to respond:

Your views on this are genius, we need to focus on fixing our economy instead of focusing on wasteful arguments and angry statements by citizens that are disappointed in who got elected. Both presidents had positive plans to get our economy back on track, whether we are a republican or a democrat, we all must make sacrifices and accept changes.

No, not at all. It is just common sense. And it is a sad state of affairs when common sense can pass for genius.

Though I appreciate the compliment.

MNB user Bob Vereen wrote:

Seems to me a sensible compromise on tax matters might be to have the "Millionaire's tax" take effect on incomes of $500,000 or more.   $250,000 in some high-cost areas, like NYC or DC, with both husband and wife working, is not an outrageous income.   Cost of living in those areas eats up a lot of income.

I think it seems like a pretty good bet that the annual income level above which taxes will be raised to Clinton-eras levels will be $500,000 or a million dollars ... I'm guessing that Obama is saying $250,000 as a bargaining position, and that he'll give the GOP room to maneuver. Though that may be wishful thinking.




Got a number of emails regarding the "Worth Reading" piece I posed yesterday, referring people to an absolutely savage review written by New York Times reviewer Pete Wells about a new restaurant opened by Food Network celebrity Guy Fieri in Times Square.

You can read it here.

One MNB user wrote:

Loved the review.  The ironic part is that this is a tourist place in Time Square.  No repeat visits necessary.  Guy is a celebrity and they can experience some of that.  Guy wins.=

And MNB user Steve Ritchey wrote:

I have the same comment here I have whenever a  sports columnist savages a coach or player, a political pundit goes after a elected official for a policy decision or read a movie critic disparage a movie.

Have you ever run a sports team, restaurant, held elected office or made a movie?  Just what are your credentials, and don’t tell me you learned it in a vacuum in college.  What have you done in the ‘real world’ that should compel me to read your reviews.

Maybe I’m cynical, but I’m tired of reading so called experts, or as I call many of them, self-proclaimed experts who openly disparage and denigrate others work, though I  think they could do no better and probably not as well themselves.

Reading reviews like this do not make me want to read this guys work again.  It makes me wonder if he doesn’t like Guy Fieri and has a personal agenda at work here, or if he is trying to make a name for himself as the reviewer who trashed Guy Fieri.  I don’t think of this as great writing, to me it’s more like meanness for the sake of being mean.

We'll have to agree to disagree.

Yes, it was mean. But that's okay with me.

I also disagree with you on the role of the critic. I think that critics, by the very nature of their jobs, have the right to be exceedingly complimentary or outright dismissive, even mean, when the situation calls for it.

Let me bring it back to MNB for a moment.

On Fridays, I write about movies, TV shows, books, wines and beers. I tell you what I think, and why. Over the years, I'm guessing, people have figured out whether they tend to agree with my taste or not, and know whether they should follow my recommendations. I'm sure there are some folks who see that I like a movie, and know that they won't.

In the same way, over the past 11 years I've taken my fair share of shots at CEOs of various companies. Could I do their jobs? No. Never been a CEO. But I try to explain my positions, and then people can figure out whether they agree with me or not. (And can respond.)

That's the name of the game. Am I a self-proclaimed expert? Maybe. Though I'd describe myself as a self-proclaimed pundit.

But criticism is a legitimate art, and I think that critics have a right to their opinions, stated as such.

Published on: November 16, 2012

• In Thursday Night Football action, the Buffalo Bills defeated the Miami Dolphins 19-14.

• And, in Major League Baseball, Buster Posey, catcher for the World Champion San Francisco Giants, won the National League Most Valuable Player award, while Miguel Cabrera of the Detroit Tigers, who won the Triple Crown this year by having the best batting average, hitting the most home runs and having the most runs batted in, earned American League Most Valuable Player honors.

Published on: November 16, 2012

Skyfall is magnificent, not only the best James Bond movie ever made, but also a terrific movie by any standard. (It also is the beneficiary of good and inadvertent timing. Is there a news channel over the past week that has not used the phrase "Spyfall" to describe the travails of former CIA chief David Petraeus?)

Skyfall also is an example of how taking your time and having the right priorities can be a smart business decision. The last James Bond movie, Quantum of Solace, came out in 2008, and was not a favorite of critics or fans. (I liked it, despite the darkness of the script. I thought that Bond, having gone through the trauma of losing Vesper Lynd in the terrific Casino Royale, needed the kind of revenge-driven catharsis provided in Quantum. It compares favorably, I think, to the way the series dealt with the death of his wife - perhaps the only other time the character has suffered any personal trauma - at the end of On Her Majesty's Secret Service; at the beginning of Diamonds Are Forever, it was never even mentioned.) But since Quantum came out (and made a lot of money, by the way), the studio with rights to the Bond films had financial problems, placing the future of the series in jeopardy.

This allowed the producers, director and writers to take their time in crafting Skyfall, and what they came up with is the best-written and directed film of the series - thoughtful, well-plotted, with characters that have an emotional stake in the proceedings. At the same time, they've done so with the requisite light touch ... there is more humor than in any of the other Daniel Craig films, and they've shot must of the film in London, giving Skyfall a realistic geographic grounding as well as an emotional foundation. (Kudos to director Sam Mendes and writers Neal Purvis, Robert Wade and John Logan.)

I actually don't want to describe the plot in any sort of detail, except to say that just six years after Casino Royale, which rebooted the series by detailing Bond's days as a young agent just having gotten his license to kill and 007 designation, Skyfall shows a man who has been worn down by all the killing, who - along with M, the head of MI6 - finds himself and his skills being marginalized by shifting geopolitical events. In addition to being a crackerjack thriller, Skyfall also is a redemption story of sorts. (At least twice in the story, there are images of cleansing and baptism ... watch for them.) It is about Bond's roots, and core values, but it handles these matters in ways that are never less that total fun.

Without overworking the themes, Skyfall has resonances of earlier Bond films. There are scenes in Istanbul and a great train fight (think From Russia With Love, until now my favorite Bond film ... I'm not one of those who prefers Goldfinger). A scorpion makes an appearance that reminded me of the tarantula in Dr. No. And there are a number of characters and references from earlier movies.

Perhaps my favorite little moment that shows institutional memory is when, for a brief moment, there is a glimpse of a painting - Modigliani's "Woman with a Fan," which was actually stolen from the Museum of Modern Art in Paris in 2010. It so happens that in the first Bond movie, Dr. No, there is a brief glimpse of another stolen painting - "The Duke of Wellington," by Goya. I love little touches like that.

I saw Skyfall in the wonderful AMC Imax theater in Port Chester, New York, and I heartily recommend that if you can see it in Imax, it is worth the investment. Skyfall is big and beautiful and an absolutely blast. See it.

And a memo to co-producers Michael G. Wilson and Barbara Broccoli (who I sat next to in a film class at Loyola Marymount an eon ago, though I did not know her). There are those who want you to rush out the next Bond movie to take advantage of the fact that Skyfall is such a hit. But you should take your time. Let the story and characters marinate. Get all the elements right. Because you've demonstrated with Skyfall that when you do so, nobody does it better.




I have two wonderful wines to recommend to you this week.

• the 2011 Alain Paret Cotes-du-Rhone Valvigneyre, a Viognier that is bright and refreshing and perfect with seafood.

• the 2009 Villa Cafaggio Chianti Classico, which is fantastic with spicy Italian food ... instantly becoming one of my favorite chiantis ever.

Both, by the way, are available from Nicholas Roberts Ltd, which powers the MNB Wine Club. And if you haven't checked it out, you ought to click here to look into the MNB Wine Club. It is a great way to find out about and taste some unusual and hard-to-find wines, and be a part of a growing segment of the MNB community.




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

Slàinte!