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    Published on: September 17, 2013

    by Michael Sansolo

    Life is full of moments of humility. Frequently, when I’m exercising on my bicycle other riders zip by me, completely shattering my delusions of speed. (None of them on training wheels, thank goodness. At least, not yet.)

    But here’s the thing: when that happens I always have two thoughts. First, I size up their sleeker bikes and professional-level clothing and remind myself that I’m not out there to race (but maybe I should trade up…) Second, I pedal harder, speed up and get a better workout.

    That’s what competition and context does. Those forces remind us that we may not always be the best and push us to find ways to get better, stronger and faster.

    I got thinking about that a week ago when I read an incredible article in the Washington Post about Steve Ballmer, the oft-criticized CEO of Microsoft, who recently announced his intention to retire. The article, detailing the company’s sluggish sales, began with an excerpt of an interview Ballmer did with Fortune in 2006. The interviewer asked Ballmer if he had an iPod.

    “No, I do not. Nor do my children. My children - in many dimensions they’re as poorly behaved as many other children, but at least on this dimension I’ve got my kids brainwashed. You don’t use Google, and you don’t use an iPod.”

    No doubt since 2006 Ballmer’s kids have been forbidden from using an iPhone, iPad, Facebook, Twitter and lord knows what else. And since they probably go to wonderful schools filled with the Zune-carrying/Bing searching children of other Microsoft executives, they probably have no idea what the rest of us are doing.

    Kind of explains a lot, doesn’t it?

    Sure, loyalty is fabulous, but think of what Ballmer might have learned if he simply let his children use Google. They might have found advantages or insights that all the professional competitive checkers at Microsoft have clearly been missing.

    This article isn’t for Ballmer, but rather the rest of us because whether we admit it or not, we all do the same.

    I’ve had the opportunity to visit far too many stores with excellent retailers who can rapidly find all the flaws at the competition that they manage to gloss over on their home turf. I’ve talked to too many manufacturers who can point out the shortcomings of a competitor’s product, marketing or supply chain, without seeing exactly the same problems in their own.

    At those moments we are just like Ballmer and just like him we need to let the “kids” use an iPod. Just like him we need to let non-biased eyes (friends, neighbors and children) show us what we simply cannot see.

    Kevin wrote last week of the danger of “breathing your own exhaust”—essentially getting too wrapped up in your own version of your own success. It's true -
    context and competition really kill all the fun sometimes. Let’s be glad they do. Because that’s when we get better.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: September 17, 2013

    Over the past week, close to five million people have viewed what essentially is an infomercial on YouTube.

    But not just any infomercial. It is, in fact, what one critic has called "the most beautiful, haunting infomercial you'll ever see." The product is Chipotle, the upmarket Mexican fast food chain, but there is almost no reference to the brand or its products. Rather, the film - called 'The Scarecrow" - is a poetic look at the impact that processed food production can have not just on our stomachs, but also on our souls. The music is a Fiona Apple cover of "Pure Imagination," the song from "Willy Wonka and the Chocolate Factory, and it is perfect.

    "The Scarecrow" isn;t just an attack on "big food," however. More importantly, it is a paean to the virtues - nutritional, psychological, spiritual, physical, economic - of sustainable farming practices.

    And perhaps most importantly, "The Scarecrow" is incredibly well done. Kudos to Chipotle for commissioning it, and to Academy Award-winning Moonbot Studios for producing it.

    Watch it. It is an Eye-Opener.

    KC's View:

    Published on: September 17, 2013

    The Washington Post reports that the Washington, DC, City Council today is expected to vote on whether to override Mayor Vincent Gray's veto of a "living wage" bill that would require large retailers such as Walmart to pay employees at least $12.50 per hour, above the local minimum wage of $8.25.

    Gray vetoed the bill, calling it a "job killer" and saying that it was impractical. Gray also pledged to try to raise the DC minimum wage.

    The original bill was passed 8-5, but it will require nine votes to override the veto. According to the Post story, "none of the five council members has indicated a willingness to change his or her vote."

    Walmart, which wants to open six stores in the district, has pledged to severely cut back on its plans there if the "living wage" bill becomes law.
    KC's View:
    My view of the situation hasn't changed. I don;t think it makes sense to have one set of wage rules for one kind of store, and a different set of rules for another. But, I also remain concerned about the larger issue - that a lot of people who work very hard, for 40-50 hours a week, cannot afford to support their families. This strikes me as an unsustainable trend that is not good for the culture. Or the economy.

    I said something along these lines the other day, and it prompted one MNB reader to respond:

    We have seen the protests at fast food restaurants and we have heard over and over again about Americans not being able to support their families when earning a certain income.  However, there are two sides to the "supporting a family" formula - why don't we talk about the expense side?  Why don't we share what the average American working very hard for 40-50 hours spends as compared to their income?  And what expenses - in what amounts - are actually necessary to "support a family?  Do we need the latest 32 gb cell phone with the extended data plan, or the premium cable packages, or the latest fashion on our bodies and feet, do our children need the same for themselves, do our kids need cars at 17 - I could go on.

    The income side is an easy target - and it is somewhat a reflection of personal choice.  However, the expense side is far more controllable - much more a reflection of personal choice.  All of our families are little businesses - each with income and expense.  Any comprehensive discussion about income must include equal time for a review of expense.

    This strikes me as such a deeply cynical view of the American working class. Sure, there are people out there who don't behave responsibly when it comes to their personal expenses. (Hell, how many of those people buy cigarettes while being unable to support their families? It isn't just cars, sneakers and fancy cell phones.)

    But I prefer to believe that most people - in every demographic - are good a decent people who work hard and only want to be compensated fairly so they can support their families - meaning put a roof over their heads (not an expensive roof), put food on the table (not gourmet food), put clothes on their bodies (not designer duds), and get their children a good education and maybe send them to college (and are happy to settle for state schools).

    I'm not suggesting government handouts here, nor am I promoting some sort of minimum wage increase that will actually hurt the ability of businesses to hire. But I do think it is myopic not to consider that there likely are a ton of families out there where both parents work really hard at their jobs, try to pass those values on to their children, but find it hard to make ends meet because of wage scales that don't allow them to do so. (While the top execs at some of these companies enjoy big salaries, big benefits packages, and even big severance agreements when they don't do their jobs very well.)

    I'm just convinced that this subject is not being discussed in a mature, considered way. And that, if we don't find a way to deal with the problem, the culture will end up going down a road that is unsustainable.

    It is easy to criticize people in the struggling class for being fiscally irresponsible - for spending too much money on cell phones or sneakers or whatever - when one is comfortable in one's own circumstances. And it is easy to say that people who don;t make enough money to support themselves are just guilty of poor choices.

    This may be epistemic closure at its worst. Not to mention an appalling lack of compassion.

    Published on: September 17, 2013

    The Associated Press reports that the fight in Washington State is "intensifying" as both sides debate the merits of a statewide initiative that would mandate the labeling of foods with genetically modified (GM) ingredients.

    The statewide vote is scheduled for November 5.

    The story says that "opponents of Initiative 522 have so far raised $12.1 million, with $4.8 million from Monsanto and $3.4 million from DuPont Pioneer, according to the latest reports filed with the Washington state Public Disclosure Commission. Both companies were top donors in the effort to defeat California’s Proposition 37.
    The Yes on 522 campaign has raised $3.4 million, with nearly $1 million from Dr. Bronner Magic Soaps. Other top donors include the Organic Consumers Fund and Mercola Health Resources."

    Opponents of the initiative say that it will result in misleading information that will frighten consumers and a costly infrastructure that will hurt farmers. Proponents say that consumers deserve to know what is in their food.
    KC's View:
    Count me among the latter group.

    Someone said this on MNB a few months ago. Labeling isn't condemnation.. It is just information.

    Companies afraid of information are not to be trusted.

    Published on: September 17, 2013

    Advertising Age has a piece about how the beer industry's biggest companies, Anheuser-Busch InBev and MillerCoors, "are being battered by a new wave of competition from inside and outside the beer market and starting to lose their grip.

    "On one side, newly aggressive liquor brands are stealing share, especially among the coveted young-adult demographic. As a result, beer has seen its piece of the total alcohol market fall to 48.8% last year from 56% of sales in 1999, according to the Distilled Spirits Council of the U.S. On another, craft brews, once a trendy badge for beer geeks, are now mainstream options for Joe Sixpack, a development that has contributed to eight of the top 10 U.S. beer brands losing share at stores in the 52 weeks ending Aug. 11, according to IRI."

    The story goes on: "The situation is grim, but not irreversible. The two big brewers still control 74% of beer-shipment volume in the U.S. by Beer Marketer's Insights' calculations. And with their massive scale and marketing machines, the companies have experienced early success with new brands meant to take on liquor and smaller craft beers. But before the beer industry can regain its buzz, it's important to understand the six-pack of hurdles it has in front of it."

    Among the most important of these challenges:

    • Taste. The story suggests that while mainstream beer companies have focused on going lighter and broad-based, craft brewers have gained share by being more focused on specific tastes, offering a range of darker and more complex brews.

    • Advertising. Beer companies have been known for great ads, but that has been less the case in recent years, when they have largely come up with ads that are "lackluster."

    • Women. Beer companies generally have not targeted women, and have portrayed them in less than complimentary ways in advertising. To grow their brands, mainstream beer companies have to find a way to appeal to women.
    KC's View:

    I thought that it was ironic that almost at the same time as this piece appeared in AdAge, the Boston Globe was reporting on how the craft beer segment grew 15 percent during the fast half of 2013, while total US beer sales were down two percent ... and largely because of his success in the craft beer business, Jim Koch - founder of Boston Beer Co., manufacturer of Sam Adams - has become a billionaire. (Not that he seems to care about the money very much.)

    Also ironic that Bloomberg Businessweek has a story about how Walmart is so intent on becoming the nation's biggest beer retailer that "it has been selling Budweiser, Coors and other brews almost at cost in at least some stores ... part of a plan to double alcohol sales by 2016 and seize a larger slice of a U.S. beer market worth about $45 billion."

    (Is it a symbol of a larger strategic problem at Walmart that it is spending a lot of money seeking to dominate a segment in decline?)

    To me, it comes down to highest common denominator marketing vs. lowest common denominator marketing. The companies doing the former seem to be growing, while the mainstream beer companies, which sort of reflexively do the latter because that's what big companies do, are suffering.

    And just one more time ... it is worth looking at the recent ad for Guinness, which is highest common denominator marketing at its best. Check it out at right.

    Published on: September 17, 2013

    • The Boston Business Journal reports that Ahold-owned Peapod "has been adding pickup service at its Stop & Shop and Giant stores at a rate of two to six stores a week in recent months. The company started about a year ago with a Stop & Shop in Abington, and now has more than 80 locations, including 29 in Massachusetts, Peapod director of marketing Peg Merzbacher says. Four are being added this week, including one in Wayland, and the company expects to have 100 by Thanksgiving.

    "We’re finding that it’s definitely growing our e-commerce sales, for sure,” Merzbacher says. “It resonates for people for whom home delivery might not have worked.”
    KC's View:

    Published on: September 17, 2013

    USA Today reports that early in 2014, China will replace Canada as Starbucks' "second-largest market, where Starbucks plans to open its 1,000th store sometime before the end of 2013. As it expands in China – where Starbucks announced the opening of two iconic, flagship stores on Monday – Starbucks is experimenting both with the interior and exterior designs of its new stores in a bid to appeal to Chinese customers ... For Starbucks, it's all about tapping into growth markets with room to run. The chain, which has more than 12,000 U.S. locations, now views China as its biggest growth market, which can help it taper the pace of domestic growth. By the end of this year, Starbucks will have 4,000 locations across China and Asia Pacific."

    • Florida-based Riteway Sales and Marketing said yesterday that it is launching a fresh foods division, Riteway Fresh, to target the southeastern US. The company has hired Don Bishop, the former Eastern region vice president for Del Monte Foods as well as president of Tampa-based Bishop Targeted Marketing, to run the new division.
    KC's View:

    Published on: September 17, 2013

    • PepsiCo reportedly has named Seth Kaufman to be its new VP-brand marketing. Kaufman is the former VP-general manager of the Starbucks Joint Venture, and before that was director-media strategy and investment for PepsiCo beverages.

    Kaufman succeeds Angelique Krembs, who becomes VP-field marketing and innovation for North American Beverages.

    • The Grocery Manufacturers Association (GMA), announced the appointment of Dr. Brian Bedard as Executive Director of the GMA Science and Education Foundation (SEF). Dr. Bedard is described as "a veterinarian, international agriculture and food safety specialist and senior manager with 30 years of experience in China, Southeast Asia, Africa, the United States and Canada .. More recently, he has been employed by the World Bank to manage international programs including the Global Food Safety Capacity Building Partnership, coordination of the global avian influenza program and evolving initiatives related to the prevention and control of diseases at the animal-human interface diseases in developing countries."
    KC's View:

    Published on: September 17, 2013

    ...will return.
    KC's View:

    Published on: September 17, 2013

    In Monday Night Football action, the Cincinnati Bengals defeated the Pittsburgh Steelers 20-10.
    KC's View: