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    Published on: December 15, 2021

    The continuing goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    Today, in the last Innovation Conversation of 2021, Tom and KC look forward to the coming year, focusing on two stories that could help reshape the retail landscape.

    First, they discuss Amazon's reported plan, in both the US and UK, to become a major player in the grocery-delivery market, which in the U.S. means competing with Instacart.  How retailers will - and should - react to this development is a major focus of their conversation.  Spoiler alert:  The term "Trojan Horse" comes up.  A lot.

    Second, Tom and KC talk about Albertsons' launch of a new consumer auto-replenishment program, dubbed Schedule & Save, which is reported below on MNB.  Tom has a unique perspective on this development since he is the CEO of Replenium, which is powering Schedule & Save - and he led the team that developed Subscribe & Save for Amazon.  But the conversation focuses on how auto-replenishment has the potential of reshaping the conventional store format and help retailers put a greater emphasis on the elements that truly differentiate them.

    If you'd like to listen to The Innovation Conversation as an audio podcast, click below.

    Published on: December 15, 2021

    Albertsons today said that it has launched a new consumer auto-replenishment program, dubbed Schedule & Save, in select markets, with plans to roll it out nationally.

    Albertsons describes the offering as a "new auto-replenishment offering online so loyalty members can ensure their grocery and household essentials always remain in-stock. Developed with convenience-seekers in mind, the new offering automates the task of routine shopping. This allows customers to automatically replenish their more frequently purchased items across categories in a way that is adaptable to every lifestyle. The products scheduled for purchase will be offered at an attractive discounted price, reflecting significant savings off the average shelf price, available for pick-up or delivery.

    "Currently available to select Safeway customers in northern California, Schedule & Save was developed in partnership with auto-replenishment and predictive shopping platform Replenium. In 2022, Albertsons Cos. plans to expand the program nationwide and include a continuous expanding list of items for members to add for auto-replenishment."

    Full disclosure:  Replenium's CEO is Tom Furphy, who engages with MNB readers in "The Innovation Conversation" here every other week.  Including above, where he and the Content Guy discuss this move by Albertsons.

    Albertsons also said it is launching a new Meal Plans feature that "provides an easy, convenient and personalized way to plan meals and cook recipes that is unrivaled in the market. Members have access to thousands of delicious, shoppable recipes developed by professional chefs and dietitians that are curated and refined based on taste and dietary preferences … Members can break out of that food rut and complete their weekly shopping in less than 10 minutes with the option for pick-up and delivery, or in-store shopping."

    KC's View:

    Tom and I spend part of this week's Innovation Conversation talking about Albertsons' new Schedule & Save program, as powered by Replenium.  But let me add a couple of notes here.

    Amazon's pioneering version of this program, Subscribe & Save, was launched more than a dozen years ago, and I was an early adopter.  One of the earliest items I bought via Subscribe & Save was Tide laundry detergent, and since I created that subscription, I don't think I have ever bought laundry detergent at a store other than Amazon, and I don't think I've bought a laundry detergent other than Tide.  Subscribe & Save created both brand and retailer loyalty - and we now have added a couple of dozen other items to the program.

    In addition to creating that loyalty, an auto-replenishment program also has the potential for allowing retailers to give greater focus - physically, financially, and thematically - to items and categories that differentiate them.

    I argue all this not because Tom's business, Replenium, has been designed to offer Subscribe & Save to retail businesses not named Amazon, but because I've seen it work, and would feel this way even if I'd never met Tom Furphy.

    Published on: December 15, 2021

    Hy-Vee yesterday announced that it is launching a new business subsidiary called RedBox Rx, which it describes as "a new national subsidiary that provides low-cost telehealth and online pharmacy services, and ships prescribed treatments directly to patients’ homes throughout the U.S."

    Here's how Hy-Vee frames the new offering:

    "RedBox Rx makes it easy for people to get the treatment they need by offering quick, easy and discreet access to a provider who can prescribe prescription medication that is then shipped for free directly to the patient. This low-cost service bypasses insurance and offers treatment plans for men’s health, women’s health, hair and skin, mental health, migraine headaches, primary care and more …  Telehealth consultation fees range from FREE to $39, depending on the type of treatment and are provided via a partnership with Reliant Immune Diagnostics’ MDbox platform that integrates with RedBox Rx. Consultation fees are often less expensive than typical medical insurance copays. To keep prices low and save patients the hassle, RedBox Rx does not accept insurance. Patients may, however, use their HSA or FSA card to pay for the telehealth visit or prescription costs."

    KC's View:

    It is interesting that Hy-Vee is making this move at the same time as CVS says that it is orienting its business strategy toward a greater role in primary care.  And we all know that both Amazon and Walmart have aggressively looking for paths that will build up their healthcare-oriented businesses.

    The thing that interests me about the Hy-Vee offering is that there is the potential to connect the delivery of healthcare services and the food business, especially when it comes to fresh food, the consumption of which can have an enormously beneficial impact on people's health.  This approach isn't described specifically in the materials I've seen, but it certainly is a possibility - and one that would seem to make sense in the current environment.

    I do have one question:  RedBox Rx, best I can tell, does not seem to be connected to Redbox, the kiosk-centric video rental company.  If that's accurate, the choice of name seems odd and maybe not on-brand when it comes to delivering quality health services.

    Published on: December 15, 2021

    Technomic is out with its annual take on major trends "poised to make a global impact on foodservice … plus some up-and-comers likely to break out."

    Among them:

    •  "Eggs are the restaurant darling of 2022. Egg sandwiches are having a moment in many parts of the world and will soon dethrone the chicken sandwich as the next must-have-on-my-menu restaurant item. Operators will showcase eggs in more all-day sandwiches and handheld offerings, complementing them with premium ingredients, housemade sauces and elevated preparation methods."

    •  "The crisis may have prompted some chains to cut back on breakfast over the past year, but the daypart is poised for a big bounce back in 2022. With recovery scenarios on the horizon, consumers are settling into a less-disruptive reality, one in which some are fully home-based, while others head back to the workplace. And—crucially—kids are going back to school campuses. For many, sourcing a morning meal from a restaurant is once again a part of the routine. Expect chains to employ subscription deals, multiperson bundles, product innovation and amped-up marketing to capture morning traffic and establish loyalty."

    •  "Delivery kitchens have had their 15 minutes of restaurant-trend fame and will garner less attention in 2022. Not that they’re going away—not by a long shot. The dark kitchen model, like once-hyped formats such as food trucks, food halls and fast-casual spinoffs, no doubt will retain a permanent place in the industry. But that will be a return from a pandemic high to a pre-crisis place in the market."

    •  "This will be the year that it’s all about functionality on the dessert list. Think skin care-enhanced ice creams, immunity-boosting hand pies, mood-modifying macarons and so on. A key trend in recent years—and certainly amid the pandemic—has been the expansion of the functional concept to more types of foods and beverages, and this will start to play out in the dessert category to a larger extent in the coming year."

    •  "As we have noted in recent years, halloumi is primed for the center stage as a craveable, vegetarian-friendly alternative to meat. Next year, operators will menu mutabal, the lesser-known sibling of baba ghanoush, especially at fast casuals. Plant-based egg will make its mark among the many animal protein alternatives already flooding the market. With the killer combo of craveability and gluten-freeness, Brazilian cheese bread—pao de queijo—will gain traction well beyond its homeland. Soups and stews will get a fresh look, with comforting, homey recipes from all over the world and a delivery-friendly format. Tlayudas deserve some time in the spotlight, and the Mexican flatbreads will start getting it in 2022. Finally, avocado coffee will expand out of Indonesia and other parts of Asia into global markets."

    Technomic suggests that 2022 will be "all about labor, supply disruption and inflation," affecting "restaurants, bars and other operators across the food and beverage ecosystem … While these issues will continue making headlines across global markets, they will also spur lasting innovations that will ultimately put foodservice back on the path to long-term prosperity."

    KC's View:

    I'm pretty good with these, since I love eggs, breakfast and desserts.  The only thing that would have made these predictions better would've been the inclusion of a healthy, life-extending cheesecake.

    Published on: December 15, 2021

    The Wall Street Journal reports on a new study from Datassential suggesting that "this year, 60% of restaurants reported reducing their menu size … The menus at fine-dining establishments were hit especially hard, with the number of items declining 23% over 2021."

    The editing of restaurant menus has happened as "the consumer-price index for food away from home, which includes purchases from restaurants, rose 5.8% over the past year, the largest 12-month increase since 1982, according to Bureau of Labor Statistics data."

    Datassential’s Sean Jafar tells the Journal that "restaurant menus often expand and shrink with the economy. Many menus shrank after the onset of the 2009 recession, but expanded as business came back … The number of menu items can tick up or down by roughly 10% depending on the year."

    KC's View:

    Sounds like a marketing opportunity for supermarkets, which can brag about unlimited potential and opportunities that can be found it their aisles and departments.  

    That said, I have to admit that I like it when restaurants offer a few items that they're great at, as opposed to an endless menu that shows off no particular expertise or passion.

    Published on: December 15, 2021

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  In the United States, we've now had 51,136,442 total cases of Covid-19 coronavirus, resulting in 821,335 deaths and 40,239,513 reported recoveries.

    Globally, there have been 271,905,597 total cases, with 5,340,623 resultant fatalities and  244,470,121 reported recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 76.7 percent of the US population age five and older and 72.2 percent of the total population has received at least one dose of vaccine, while 64.8 percent of the five-and-under population and 61 percent of the total population has been fully vaccinated.

    The CDC also says that 29.5 percent of the 18-and-older US population and 27.2 percent of the total population has received a vaccine booster shot.

    •  From the New York Times:

    "The proportion of coronavirus cases in the United States caused by the Omicron variant has increased sharply, and may portend a significant surge in infections as soon as next month, according to new data from the Centers for Disease Control and Prevention.

    "During the week that ended on Saturday, Omicron accounted for 2.9 percent of cases across the country, up from 0.4 percent in the previous week, according to agency projections released on Tuesday.

    "In the region comprising New York, New Jersey, Puerto Rico and the U.S. Virgin Islands, the percentage of Omicron infections had already reached 13.1 percent.

    "In a briefing on Tuesday with state and local health officials and representatives of public health labs across the nation, C.D.C. officials warned of two possible scenarios. The first was a tidal wave of infections, both Omicron and Delta, arriving as soon as next month, just as influenza and other winter respiratory infections peak … Federal health officials also proposed a second scenario in which a smaller surge in Omicron cases occurs in the spring. It was unclear which forecast was more likely."

    •  The Washington Post adds:

    "Officials stress that early data shows that individuals who are fully vaccinated and received a booster shot remain largely protected against severe illness and death from omicron. But they worry about how few Americans have been boosted to date. Over 55 million people in the United States have gotten the additional shots, out of 200 million who are fully vaccinated, according to the CDC."

    •  CNBC reports that "Google has told its employees they will lose pay — and will eventually be fired — if they don’t comply with the company’s Covid-19 vaccination policy, according to internal documents viewed by CNBC.

    "A memo circulated by leadership said employees had until Dec. 3 to declare their vaccination status and upload documentation showing proof, or to apply for a medical or religious exemption. The company said after that date it would start contacting employees who hadn’t uploaded their status or were unvaccinated, as well as those whose exemption requests weren’t approved.

    "The document said employees who haven’t complied with the vaccination rules by the Jan. 18 deadline will be placed on 'paid administrative leave' for 30 days. After that, the company will put them on 'unpaid personal leave' for up to six months, followed by termination."

    •  The Wall Street Journal reports that "Apple Inc. stores across the U.S. are returning to requiring masks as Covid-19 cases surge.

    "The iPhone maker said Tuesday that the new mask mandate would apply to all customers and employees. The company’s prevention efforts have waned in recent months in step with U.S. infection rates, with masks being optional in domestic Apple stores since the first week of November … Throughout the pandemic, Apple has been quick to close locations and institute mask mandates and other protocols in its retail stores. During the first year of the pandemic, some observers noted that Apple store closures often came ahead of big waves Covid-19 cases in certain areas."

    Published on: December 15, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Washington Post this morning:

    "Buoyed by the coronavirus pandemic, Amazon’s retail business in 2020 generated 599 million pounds of plastic packaging waste, a 29 percent increase from the year before, according to the environmental group Oceana.

    "Amazon, however, said that it is taking steps to cut back plastic use and that Oceana had grossly miscalculated the giant retailer’s plastic packaging waste.

    "'Amazon shares Oceana’s ambition to protect the world’s oceans and respects their work but, for a second year, their calculations are seriously flawed,' the company said in a statement. 'They have overestimated our plastics usage by more than 300 percent, and use outdated assumptions about the sources of plastic waste entering our oceans.'

    "Amazon did not say whether its plastic use had grown and by how much. Last year, it also said Oceana had overestimated its plastic usage by more than 300 percent."

    •  From Fox News:

    "Police in Blaine, Minnesota say charges are likely to be filed in the near future against an Instacart delivery driver accused of leaving a derogatory message on an elderly couple’s grocery receipt and running over their groceries with her car. The driver allegedly did this in response to a 'Thank you Blaine PD' yard sign supporting the police department.

    "According to Blaine police, on Dec. 6 the couple reported that they had placed a grocery order from a local Cub Foods, with delivery through Instacart. They told police that once they received a notification that the driver was at their house, they decided to meet the driver outside due to the amount of snow in their driveway and being worried the driver may get stuck."

    But when they went outside, they were verbally accosted by the driver, who had left them a vulgar written note placed inside their Christmas wreath;  he'd also run over their groceries.

    According to the story, "Blaine police said the homeowners received a full refund from Instacart."

    There's no question that Instacart gets tainted by this event, but if I were Cub Foods, I'd be concerned that this is the company representing me in a critical part of the customer experience.

    Published on: December 15, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times this morning reports that "shoppers may no longer come in droves for wrenches, watches or washing machines. But Sears, the once-ubiquitous department store that has been battered by the growth of e-commerce, may have one last thing of value to market: its own buildings.

    "Starting about a decade ago — and accelerating over the past few months as its owner embarked on the equivalent of a clearance sale — investors have been betting on new uses for vacant Sears stores, from Santa Monica, Calif., to southern New Jersey.

    "Many of the sites, often older, windowless hulks connected to shopping malls, are not straying far from their original mission: They’re being overhauled for new retailers.

    "But some addresses, in line with a trend of repurposing dusty commercial properties, are being given fresh and sometimes unexpected new functions. At more than a dozen sites across the county, developers are installing high-end apartments, cutting-edge classrooms and even labs where classified weapons systems are conceived."

    There are those who have argued that this has all been deliberate, that Sears' utter incompetence at retailing masked its desire to make the company more of a real estate play.  Maybe that's true, but if so, you'd think that they could've done in a way less drawn out and painful.

    Published on: December 15, 2021

    Yesterday we took note of a Wall Street Journal report that Kroger "is eliminating some Covid-19 benefits for unvaccinated employees," telling employees that "it will no longer provide two weeks of paid emergency leave for unvaccinated employees who contract Covid-19, unless local jurisdictions require otherwise. Kroger will also add a $50 monthly surcharge to company health plans for unvaccinated managers and other nonunion employees."

    I commented:

    The argument here, since the moment federal vaccine mandates were announced, has been that the feds were giving businesses cover - that they could get tougher in their own mandates and blame it on the Biden administration.

    I think this is a good move by Kroger, and I hope other businesses follow its lead.

    I've been saying here for some time - and we have this conversation below in "Your Views" - that insurance companies ought to tell people that if they don't get vaccinated and get Covid, their medical expenses will not be covered.  And the government ought to tell people that they can't claim unemployment benefits or any other government benefits of they're not vaccinated.

    We had a story yesterday about organized labor demanding greater Covid protections from retailers.  Step one ought to be to require employees to be vaccinated, and the unions ought to be on board with that.

    One MNB reader responded:

    To be blunt, I find these types of decisions and the widespread support of them terrifying. I hate to use cliches, but “slippery slope” immediately comes to mind.

    Businesses and insurance companies have long desired these sorts of rules to cut costs and increase profits, respectively. I believe you’ve published stories about companies floating the idea of giving potential employees a genetic test to determine their prospective liability (both work availability and impact on insurance costs). Many businesses offer lower deductibles to associates that buy healthy foods (data gathered by associates sharing their grocery purchase data). Will either of these become a requirement for employment?

    How would you feel if an associate that has a family history of diabetes getting fired or having their insurance canceled because they buy too much fruit, juice, or Twinkies? I know people will think this is some sort of straw man argument, but many pundits (some in the medical community) have floated denying care to the unvaccinated who go to the hospital with COVID. Would you deny care to someone with heart disease who’s overweight? What about someone who hurts themselves while mountain biking?

    Probably not, but that’s only because those aren’t hot political topics, driving the 24-hour news cycle. Yes, COVID is a serious health concern that’s killed millions of people worldwide. I don’t think the vast majority of people would deny that (yes, some do… but they also don’t believe in the moon landing). My argument is that when these types of policies get widespread acceptance, they’ll be looking for another ox to gore.

    MNB reader Mike Blume chimed in:

    Why stop at Covid vaccinations.  Are you on board with the same regulations for Flu Shots?  And will this apply for EVERY Covid Booster shot that comes along every several months for the remainder of our lives?  When has it become okay to allow the government to dictate what goes into our bodies?  What’s next, will they dictate what we can eat?  Oh wait, they are already trying to do that by eliminating Cow meat!

    When they start mandating and adhering to the same rules they want for the American people, for themselves and all the illegal immigrants coming into this country, then maybe I will reconsider my position.  This is America.  The best Country in the World.  A Free Country (for now).

    It is a free country.  If you work for Kroger, you're free not to be vaccinated … but you're going to end up paying more for health insurance.  Kroger, it seems to me, is free to make this decision.

    We're talking here about a contagious disease that has killed some 800,000 members of the US population in less than two years, and for which vaccines have been proven to be effective and safe.  If Kroger decides that it needs to find new ways to incentivize employees to get vaccinated so they don't infect shoppers and fellow employees, that seems reasonable to me.

    Me, I'd like to be free of people who keep talking about freedom but never talk about mutual responsibility.

    From MNB reader Steve Williams:

    I am on your page in this subject. Then my wife and I were discussing it and she disagreed with me. Her point was where do we draw the line on insurances refusing to pay for procedures, or up-charging for perceived health issues? We don't charge over weight people more, or refuse to cover their hospital bills. We pay for drug addiction and drug addicts have free access to drugs that will reverse an overdose. People can get a sex change and insurance covers that. 

    I think Covid is clearly a public health issue, but at this stage of vaccinations, I hate to say we probably won't get the remaining population in the US vaccinated. They made their decision and are holding their ground. Punishing them will not help convince them to get vaccinated.  It will probably just make them more likely to refuse the Covid vaccine and maybe even future vaccines. 

    I wish I had a perfect solution for everyone. Here in NY they reinstated the indoor mask mandate, unless you are requiring vaccination to enter the building. We know even vaccinated people can catch and spread Covid, so that notion of being "safe" and free to go maskless if you're vaccinated just make no sense to me. Full disclosure,  I'm fully vaccinated and have had my booster. But these mandates are just driving a wedge between the two sides when we need to move on and work on mending the division thats spreading like wildfire.

    Okay … I'd agree that how to respond to Covid-19 is something that has helped drive a wedge between people in this country.  (Though not the only thing.)

    But if removing the wedge means taking a less assiduous approach to public health and the notion of mutual civic responsibility, I'd vote no.