business news in context, analysis with attitude

Published on: May 15, 2015

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe. This is a Friday FaceTime with the Content Guy.

While I'm here in Oregon, I thought it made sense to visit one of the Haggen conversions. After all, we've had lots of coverage and emails about Haggen's sudden growth from 18 stores to more than 160, through its acquisition of stores being divested by Albertsons/Safeway after their merger.

So I drove to Lake Oswego, just south of Portland, to look at one of these new stores ... and I have to note here that I have no idea if this is representative of all the stores being converted in short order to the Haggen banner.

That said, I will tell you this. The store isn't awful. But there is precious little that is distinctive about it.

In produce and bakery, for example, it looks like there are new fixtures, flooring and lights ... but it still looks like a diminished version of what Haggen was known for offering in its Washington State stores.

The service meat and seafood department is, in fact, awful - crammed into a corner of the store, looking like an afterthought. Ironically, the guy behind the counter was the only person I met who greeted me. I can tell you two things about this fellow. One, he is a friendly guy. Two, he does not suffer from claustrophobia.

The grocery aisles may be worse. There are two reasons. One is strips of fluorescent lighting that looks like it belongs in a fifties-era A&P. The other is what appears to be a significant out-of-stock problem - there was not one aisle I walked down that did not have a gaping hole, and some of them were pretty big. (I could be wrong, but it did not feel like the place had been picked apart by customers.) I can't speak to price, but there were no deals that shouted out to me.

Here's the thing. As has been written numerous times here on MNB, you rarely get a second chance to make a first impression. I'm not rooting against the Haggen folks. Far from it. But I do think that for the moment they have bitten off more than they can chew, but that's not an auspicious way to launch a new enterprise.

Not only does the store not offer any apparent differential advantages, but it also has some tough competition. There's a wonderful Zupan's store across the street that is kicking its butt when it comes to fresh foods ... and there are a Walmart Neighborhood Market (one of the worst I've seen, by the way) and a nice Safeway just down the road that have to be challenging it on price.

Success can be found in identifying ways to be unique, not similar, to the competition ... and in getting the details right. But here's something I saw that illustrates how Haggen is getting it wrong...

The endcaps have all been changed so they feature what essentially are faux shipping crates with the Haggen name - it is cosmetic, but a nice touch. One of them I saw featured a sign proclaiming Haggen's dedication to all things local ... but on the endcap was a selection of wines ... from California's Napa Valley.

Doesn't sound local to me, not with all the wineries in the Pacific Northwest. It doesn't sound like they're paying attention to the details, but rather are creating mass programs that will lose them any local advantage they may have.

Is it a unique approach? Maybe. But not in any way that will help the Haggen brand.

The more I think about that Haggen store, the more I wonder if they'll have the time to get it right. And the more I wonder if the real estate it is built on may be worth more than the shopping experience it offers.

That's what is on my mind this Friday morning. As always, I want to hear what is on your mind.

Published on: May 15, 2015

by Kevin Coupe

Yesterday, while going through a bunch of stories about the possible merger of Ahold and Delhaize, I saw one piece with the following headline:

Potential Ahold-Delhaize merger likely would form super retailer.

Now, I don't want to go all English professor here, but ...

If Ahold and Delhaize were to merge, it certainly would create a big retailer. Lots of stores - more than 2,000 of them - up and down the east coast of the US.

But a super retailer?

Let me suggest that we don't really know that. Not yet.

I would argue that the combination has the potential to be super, but only if, when combined, they focus as much on being effective as being efficient. That doesn't always happen when big companies merge their operations. The dollar signs they see usually have to do with things they can cut, not things they can add. "Economies of scale" is a term often tossed around with glee. They justify their moves by talking about cost savings, and when talking about the advantages of being merged, they use language that could have been used 20 years ago.

And because these mergers tend to be big financial deals, the companies involved can be tempted to pay more attention to Wall Street than Main Street.

I'm not saying that this will happen if Ahold merges with Delhaize. Only that the jury is out. Too early to judge either way. So let's be careful with our adjectives.

Here's the lesson of the day.

Big is not a synonym for super.

And if you think it is, and you get the two words confused, that's the beginning of nine miles of bad road.

And to anyone paying attention ... it is an Eye-Opener.

Published on: May 15, 2015

The Associated Press reports that the US Department of Agriculture (USDA) "has developed a new government certification and labeling for foods that are free of genetically modified organisms.."

Called "USDA Process Verified," the certification will be voluntary and will carry a cost - companies that want it will have to pay for it.

According to the story, "The government says G.M.O.s on the market now are safe, so mandatory labels are not needed. But consumer groups say shoppers still have a right to know what is in their food."

Published on: May 15, 2015

The Minneapolis / St. Paul Business Journal reports that Target, having tested the idea of "standalone connected home sections" that sell products allowing people to control and/or monitor their homes via their smartphones, "will install 8-foot displays in its 1,800 stores later this month."

Published on: May 15, 2015

CNBC has a fascinating story about "a growing group of global leaders who are making it their business to confront the dramatic growth of the world's population, estimated to exceed 9 billion by 2050, which would require raising overall food production by at least 70 percent," which would place "a huge burden on the planet's livestock, land, water and other resources."

This movement is claiming a large audience among technologists and venture capitalists who see this as an enormous opportunity to disrupt an entrenched and aging industry with a new approach that, while not without challenges, can potentially change the world.

You can read the entire story here.

Published on: May 15, 2015

Yesterday, we reported that Walmart will launch a subscription shipping service designed to compete with Amazon Prime, charging customers just $50 a year for unlimited deliveries in three days or less of qualified products.

Amazon charges $99 for its Prime service, offering two-day delivery.

For the moment, the service will be available by invitation-only.

Published on: May 15, 2015

• The Wall Street Journal this morning writes that "dozens of companies are sprouting to help U.S. food makers tackle a wave of new federal safety regulations and intensified enforcement of the nation’s food laws. The startups are racing to capitalize on the need by farms and food processors to step up vigilance of food-borne pathogens after a string of outbreaks in the last decade have sickened thousands, prompting a major overhaul of U.S. food safety laws and stepped-up criminal prosecutions of executives at companies implicated in the cases.

"Some fledgling food-safety companies are getting a boost from venture-capital investors, which pumped $179 million into the segment over the four years through 2014, up 40% from the previous four-year period."

You can read more about it here.

Published on: May 15, 2015

• BB King, the "King of the Blues," who helped define the genre with distinctive guitar playing and emotional singing, has passed away. He was 89, and has been in hospice care in Las Vegas.

Published on: May 15, 2015

...will return.

Published on: May 15, 2015

Over the past week I've seen a couple of projects that struck me as being interesting for reasons beyond their entertainment value.

The first was a movie called Five Flights Up, which stars Morgan Freeman and Diane Keaton as a couple married for four decades trying to figure out where the next stage of their lives should take them. They've spend all those years in a Brooklyn walk-up, but for a variety of reasons are thinking about a move; an elevator would be nice, and the market is hot, which could make them a bunch of money.

But they're also dealing with the fact that they're being marginalized somewhat because of their age, and they resent it, though it is more a simmering resentment than anything histrionic.

I liked Five Flights Up a lot - it has a nice, lived in feel to it, like that old apartment the characters live in. The plot is thin, but Freeman and Keaton, old pros that they are, manage to invest the movie with an enormous amount of charm and passion, which counts for a lot.


The other project is called "Gracie and Frankie," a new TV series starring Jane Fonda and Lily Tomlin as a couple of women who find themselves thrown together in emotional pain when their law partner husbands, played by Martin Sheen and Sam Waterston, announce that they are gay, have been having an affair for 20 years, and are now getting married - because they can.

"Grace and Frankie" isn't all that good, mostly because it is written in the manner of a B-level TV sitcom - going for cheap jokes when it doesn't have to, which is a shame because the acting talent with which it has to work is all A-level. That's a lot of horsepower to be wasting on not-great jokes, and I have to say that all four stars manage to transcend the material. Maybe that't the definition of a star. But I wished this were more "Transparent" and less "Two and a Half Men."


But here's what interests me about these projects. They're obviously aimed at older audiences, by dint of their casting and subject matter. But "Gracie and Frankie" is a Netflix series, with 13 episodes being released all at once. And Five Flights Up, while in theaters, also is available for streaming at the same time on iTunes.

What this suggests is that the degree to which these technological alternatives to more traditional methods of entertainment consumption are being adopted even by older audiences.

That's an important thing to remember. We talk here about the next generation of consumers, but in a lot of ways, maybe we are the next generation ... and there is less time than we think for businesses to adapt if they want to be relevant.



I had a terrific new beer this week - the King Kitty Red Ale, from, naturally, Oregon's Coalition Brewing Company. Just yummy.



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

Slàinte!