business news in context, analysis with attitude

Published on: October 29, 2014

by Kate McMahon

You can run, but you can’t hide, from Pumpkin Spice. It’s peak season for the sweet cinnamon- sugar-nutmeg flavor/scent that has infiltrated scores of products and is the talk of Twitter and late-night comedians.

It even has a hashtag: #pumpkinization.

You can credit, or blame, Starbucks for this seasonal obsession, which began with the October 2004 launch of its now iconic Pumpkin Spice Latte. Sales increased 11% the following month, and Starbucks baristas have since whipped up more than 200 million servings of the frothy treat. Cementing its celebrity status, TheRealPSL debuted on Twitter in August and now has 95,000 followers.

On grocery shelves this month, you will find pumpkin spice or pumpkin flavor in such classic products as Pepperidge Milano cookies, Thomas’ bagels, Oreo cookies, Kraft’s Jell-O, Pillsbury Grands, Quaker Instant Oatmeal, M&Ms, Welch’s juice, Pop Tarts, Jif Whips and Chobani Yogurt. (You need to read the ingredient list to determine if there is indeed pumpkin, or pumpkin spice, in all of these products).

On the beverage front, Dunkin’ Donuts has a Pumpkin Spice coffee, McDonalds sells a Pumpkin Spice Latte and a 670-calorie Pumpkin Shake, and Coffee Mate peddles a Pumpkin Spice creamer.

There are at least two pumpkin spice vodkas, but the real action is in the beer aisle. Sales of pumpkin flavored beers have grown by more than 1,500 per cent in the last 10 years, and the number of brands has jumped from two in 2000 to 65 last year. (The segment leader continues to be Blue Moon Pumpkin Ale, with roughly 65% of the market.)

But the hands-down leader in retail pumpkin-mania has to be Trader Joe’s, which is showcasing more than 60 products ranging from private label pumpkin croutons to dog biscuits and Pumpkin O cereal.

Which begs the question – when will American consumers max out on all things pumpkin spice?

The answer is now, if you watch the Pumpkin Spice Pro and Con list by Jimmy Fallon, the YouTube clip by John Oliver or the “rant” by Jimmy Kimmel, who wondered aloud when the Pumpkin Spice iPhone 6 would debut.

But many trend prognosticators and taste experts quoted in mainstream media believe that prevalence of pumpkin and pumpkin spice is here to stay, as it evokes nostalgia about the fall season and the holidays and the flavor is appealing to all age groups.

I would have to disagree. I think adding pumpkin spice and whipped cream to a latte, at 380 calories and 40% of your recommended daily saturated fat allowance per serving, is a pricey way to ruin a good cup of coffee. I tried pumpkin flavored beer and couldn’t get past the first sip. I believe introducing pumpkin spice flavored dog chews, beef jerky and even Oreos is a waste of design, manufacturing and marketing budgets for a seasonal fad. Do we really need a pumpkin spice Milano or M&Ms? The time and money would be better spent on creating tasty, healthier year-round offerings.

I’m with Jimmy Fallon who said that while the Pumpkin Spice Latte may make Starbucks smell like a bakery, the down side is “it makes your breath smell like you ate a Yankee Candle.”


Comments? As always, send them to me at kate@mnb.grocerywebsite.com .

Published on: October 29, 2014

by Kevin Coupe

It is time for my almost-weekly John Oliver link…

YouTube has posted an 11-minute segment from Sunday's "Last Week Tonight," the John Oliver series that has gotten a lot of recognition for tackling, within a comedic context, stories and issues often be ignored elsewhere - like net neutrality, payday loans, FIFA corruption, and the spiraling-out-of-control cost of college.

On Sunday, Oliver's show looked at sugar consumption in the US … and the segment has been variously described as "devastating" and "pretty sweet." As in all of Oliver's segments, there's some vulgar language (and my only criticism of "Last Week Tonight" would be that he relies on the f-bomb a little too much for punctuation), but the piece is worth watching - it is very funny, and makes a point that, I think, with which the food industry is going to have to grapple.

I know the Oliver is not to everybody's taste, and there are some in the MNB community who are mystified by my devotion to his show. If you are not among them, and you want to watch the segment, click on the video screen at left.

Enjoy. It's an Eye-Opener.

Published on: October 29, 2014

Advertising Age reports that DIT retailer Lowe's is getting ready to deploy robots as its latest attempt to improve customer service.

Yup. Robots.

According to the story, "Customers can talk to the robot, OSHbot, like they to would speak to a typical sales associate, and it recognizes and responds in multiple languages. It's equipped with a screen that shoppers move through "Minority Report-style" -- it recognizes hand gestures made in front of the screen and can be used as a typical touch screen as well. OSHbot is also mobile and will roll up to customers to greet and escort them through the aisles.

"Outfitted with a 3D scanner, OSHbot can help shoppers locate items, even if they don't know what they're called. For example, customers can scan a screw or nail brought from home, and OSHbot will search its database to locate it in the store or online … The robot's primary goal is to improve in-store navigation, but it has a number of other features as well. For example, its telepresence allows shoppers to connect with off-site experts who can consult on projects."

The robots will be tested first, probably before the holidays, at Lowe's-owned Orchard Supply hardware in San Jose, California. A rollout will depend on the test goes.

Published on: October 29, 2014

In the UK, This Is Money reports that some of Tesco's biggest suppliers - including Unilever, Procter & Gamble and Reckitt Benckiser - have begun internal audits "to ensure their figures have not been distorted as part of the financial scandal engulfing Britain’s biggest retailer … They want to verify their own accounts are accurate and their income and costs relate to correct periods after Tesco pulled forward payments from suppliers and pushed back bills to inflate its profits by £263m."

Tesco is doing its own internal investigation, as well as cooperating with a governmental probe, since it came to light that its financial projections were overstated by more than $400 million (US) because of manufacturer promotion moneys that were recognized too early and expenses that were being tallied up later than they should have been.

According to the story, "The concern is that in order for Tesco to have inflated its profits, even temporarily, the flip side is there will be a black hole wherever the sums came from. It is not known which suppliers are implicated. Unilever, Reckitt Benckiser and Procter & Gamble have been quick to perform internal health checks, but there is no suggestion that they are involved in any wrongdoing. Other big suppliers including Coca-Cola, Kellogg’s and Dairy Milk-maker Mondelez refused to comment."

Published on: October 29, 2014

Canadian Grocer reports that Loblaws and "finally" launched its online ordering, click-and-collect service at one store in the Toronto suburbs, with two more stores to be added "in coming weeks."

The story notes that Loblaws is making 20,000 SKUs available online, and is charging between three and five dollars to use the service.

Published on: October 29, 2014

In Minnesota, the Star Tribune reports on a new survey suggesting that stung by the deluge of last-minute orders during the 2013 holiday season, retailers will be setting their deadlines earlier this year.

According to the story, "About 79 percent of retailers will set their standard shipping deadlines for guaranteed Christmas delivery to expire at least a week before the holiday, compared to 74 percent who said they would do so last year, according to a survey conducted for Shop.org, a division of the National Retail Federation. And about 21 percent will set deadlines to expire Dec. 19 or later, compared to 26.3 percent who said they would do so last year."

Last year, the story notes, retailers and shipping companies were "overwhelmed" by procrastinating shoppers who placed last-minute orders and then were upset when the presents did not make it to their destinations on time.

"The caution this year also comes at a time when UPS and FedEx are being more proactive in talking to retailers about what is realistic," the Star Tribune writes. "UPS, for example, has been pushing retailers to hold their biggest sales in mid-December and to banish overnight shipping offers on Dec. 23."

Published on: October 29, 2014

• The Wall Street Journal reports that Jack Ma, executive chairman at Alibaba Holdings, the Chinese internet behemoth that recently raised $25 billion in an IPO, told a technology conference that he'd like to find a way to partner with Apple in the financial payments category. The story notes that "Alibaba is already a giant in payments. Its PayPal-like payments service … Alipay, has 300 million active users."

Apple, of course, recently launched its Apple Pay mobile payments business, which has been embraced by some retailers and spurned by others; the businesses that have rejected Apple Pay seem largely to be those that have a stake in the success of a competing system.

The story also says that "Apple Chief Executive Tim Cook said at the same conference he is going to meet with Mr. Ma later this week to discuss potential partnerships. He said Alibaba has all the traits of a company that Apple would like to partner with, though he didn’t specify whether Apple will work with Alibaba in payments."

Published on: October 29, 2014

...with brief, occasional, italicized and sometimes gratuitous commentary…

• The Wall Street Journal reports that "McDonald’s Corp. is hoping a new marketing campaign can add some much-needed flavor to its business.

"Facing sagging profits, the fast food giant plans to launch a new advertising campaign starting early next year with the slogan 'Lovin’ Beats Hatin'' - which aims to spread happiness in the face of Internet hate, said people familiar with the matter.

"The ad push will not replace McDonald’s longtime catchphrase 'I’m Lovin’ It,' but seeks to give it broader marketing heft around the world, said a person familiar with the campaign. The campaign is expected to roll out on Jan. 1 and include a 60-second spot during Super Bowl XLIX, which airs on NBC on Feb. 1, they said."

I'm not nuts about the new slogan. Though it does open the door to other companies to create their own alternative slogans, such "Real meat beats whatever-the-hell-McDonald's-is-serving."


• Dow Jones reports that "a bankruptcy auction drove up the price for cooperative food distributor Associated Wholesalers Inc . to $288 million, according to an attorney in the case, with competitor C&S Wholesale Grocers Inc . emerging the winner.

"C&S served as the lead bidder going into Friday's auction with a largely debt-forgiveness offer valued at up to $170.1 million. The higher final bid will pay off the company's secured debt and leave money for other creditors, said Mark Indelicato, a partner at Hahn & Hessen LLP who represents the committee of Associated Wholesalers' unsecured creditors."


• The Charlotte Business Journal reports that Publix Super Markets may debut a small-store format, 20,000 square foot prototype in Charlotte, though the company is not confirming the report.

The story says that "Publix's current urban stores measure about 28,000 square feet, and the company's traditional stores are about 49,000 square feet. A new smaller model would offer a more feasible way for the grocer to enter more high-barrier-to-entry markets, such as urban locations, college towns and coastal areas."

Published on: October 29, 2014

Several weeks ago, I bemoaned the decision by Apple to discontinue the iPod Classic, a piece of technology that I've loved since I bought my first one when it came out in 2001.

You can see the commentary here.

Well, the San Francisco Chronicle is reporting that Apple CEO Tim Cook now is saying why the iPod Classic was quietly discontinued - Apple could not longer buy the parts needed to manufacture it.

"At the heart of the final iPod Classic was a 160-GB hard drive made by Toshiba, a product that dates back to 2009," the story says. "If sales of the device were low, it’s likely the demand wasn’t enough to keep Toshiba building it.  It’s also older, slow technology – spinning at 4,200 RPM – and so wouldn’t be in demand for other devices, either." And Cook said that "there wasn’t enough demand for the device to justify putting big research-and-development bucks into redesigning it."

"We couldn’t get the parts anymore, not anywhere on Earth,” Cook said. “It wasn’t a matter of me swinging the ax, saying ‘what can I kill today?’”

Published on: October 29, 2014

…will return.

Published on: October 29, 2014

In the sixth game of the 2014 World Series, the Kansas City Royals pummeled the San Francisco Giants 10-0, forcing a seventh and deciding game in the best-of-seven series that will be played tonight.