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Friday, May 24, 2019

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Friday Eye-Opener: Double Down

by Kevin Coupe

The Dallas Morning News reports that even as H-E-B invests in technology, it also is “doubling down on people.”

In a speech this week at the Federal Reserve Bank of Dallas, about technology-enabled disruption, H-E-B president Craig Boyan “argued that companies' use of technology should be focused on creating jobs and making their customers' and employees' lives better — rather than simply squeezing out more money for shareholders. 

“And Boyan said he's troubled by how venture capitalists and other investors are giving huge sums of money to tech companies that are putting retailers out of business and thousands of people out of work — even though they have no viable business plan.”

"We have unicorns going public that will probably never make money, wiping out jobs for your grandkids," Boyan said. "That is a huge problem.”

He’s playing my song.

H-E-B has hardly avoided investing in technology, but this understanding that people are the ultimate difference in a shopper’s experience is a key reason that H-E-B is H-E-B, and most everybody else is everybody else.

Putting employees’ and customers’ best interests ahead of those of investors and shareholders is incredibly important as a differentiator … though it must be noted that as a private company, H-E-B doesn’t have some of the pressures faced by public companies. (It has different pressures, of course…)

Putting people first? That’s an Eye-Opener.

FDA Urges Move Away From Strict Expiration Dates

Gizmodo reports that the US Food and Drug Administration (FDA) has issued guidance to the food industry, “throwing its support behind a growing trend to almost universally adopt a ‘Best if Used By’ date label on products.”

The goal is to move the food industry away from strict expiration dates, which are government-mandated for most foods. The problem, Gizmodo writes, “is that, while people tend to assume they’re looking at a product’s expiration date, the labels are just supposed to convey the quality and freshness of the food, not whether it’s safe to eat. Even by that standard, the date is a rough guess, so many foods will stay fresh past the predicted day.”

When people throw out food based on an expiration date, the story says, the result almost certainly is food waste: “According to the U.S. Department of Agriculture, some 30 percent of Americans’ food ultimately goes to waste on store shelves or in people’s homes, amounting to roughly $161 billion lost annually.”

The FDA guidance is in line with recommendations made by the Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA) two years ago.

In a response to the FDA guidance, FMI President/CEO Leslie Sarasin said, “On behalf of FMI’s retail, wholesale and manufacturer members, we sincerely appreciate FDA’s recognition of the industry’s dedication to seeking solutions and mitigating consumer confusion in the marketplace regarding how best to navigate the myriad product code date labels on grocery shelves across the country. The agency’s endorsement signals a best practice in ways industry partners can truly deliver on a promise to provide guidance to our customers that is easier to understand.”

KC's View: The story makes the point - with which I totally agree - that in the end common sense has to be the arbiter of what is good or bad … if it looks, smell or feels different than it is supposed to, throw it out.

One thing, though … I have to imagine that at store level, there may be some folks who worry about this shift. The thing about an expiration date is that it is an expiration date - no ambiguity, no decision-making required. That’s a lot easier to communicate to the person stocking the shelf or cooler.

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From United Fresh...

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Target Looks To Buy Retail Ad Agency

The Wall Street Journal reports that Target Corp. is negotiating to acquire “retail advertising firm Triad Retail Media from WPP PLC, as the retailer seeks to boost its digital advertising business.”

The story says that “Triad sells ad space on retail websites and other digital properties. It also helps brands create digital ad campaigns … Target, one of WPP’s large media-buying clients, would likely use Triad’s talent and system to expand its ad-sales efforts.”

The Journal offers some context for the negotiations:

“Retailers such as Walmart Inc. and Target are increasingly selling ad space to brands, using data and insights to reach consumers shopping online. Those companies are trying to mirror Amazon.com Inc., which has become a big seller of ad space. The e-commerce juggernaut is the third largest online ad seller in the U.S. behind Alphabet Inc.’s Google and Facebook Inc. Its U.S. ad business is expected to grow more than 50% this year to $11.3 billion, according to eMarketer.”

KC's View: I have no idea is this is a smart move. On the one hand, it seems like a wise way to go … but it also strikes me as the kind of acquisition that, if things begin to tank, will be the first thing cited as an example of how the company took its eye off the ball.

Like I said, I have no idea. I bow to Target’s greater wisdom.

For now.

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From The Organic Produce Summit...

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Food Halls Use Free Rent As Inducement For Startups

The Wall Street Journal reports that “in the trendy world of food halls, the newest twist is free rent for a handful of startups—giving novice restaurateurs a leg up in a tough business and the hall a source of fresh tastes.”

An example: New York City’s Chelsea Market, which is proving the means for startup restaurants and culinary entrepreneurs of offer pop-up residencies of several months.

It isn’t all altruism. The Journal notes that “such initiatives can help a food-hall operator stand out, especially as the halls proliferate throughout the city.”

KC's View: Wow. Isn’t this almost exactly what I was suggesting food retailers should do in yesterday’s FaceTime commentary?

Today, I think it is an even smarter idea.

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From GMDC...

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Worth Reading: Life, In Perspective

This has nothing to do with business, but the New York Times has an extraordinary story that I want to recommend to you … especially if maybe you’re feeling that maybe life isn’t fair and you don’t know what to do about it.

It is the story of Isabella de la Houssaye, 55, “an outdoors enthusiast, longtime mountain climber, veteran marathoner and triathlete, and her husband, David Crane, a top financier in the energy industry, have raised their five children, who all use the surname Crane, on adventure. These excursions, like riding horses from Siberia to the Gobi Desert, often with no one but their mother, led them to extraordinary athletic feats.

“At 20, her eldest son, Cason, became the first openly gay mountaineer to climb the highest peak on each continent, which are collectively known as the seven summits. Her second child, David, cycled from Cairo to Cape Town when he was 19. When Bella was 19, she hiked the Pacific Crest Trail, a 2,650-mile route that winds through the Sierra Nevada and Cascade Range, stretching from Mexico to Canada. Last year, Isabella’s fourth child, Oliver, became, at 19, the youngest person to row solo across the Atlantic Ocean. Her youngest son, Christopher, 16, is among New Jersey’s top high school distance runners.”

And then, Isabella de la Houssaye was diagnosed with Stage Four lung cancer. She was not sure how long she had to live. When treatment alleviated at last some of the pain, she made a decision: “She made plans to go on adventures — maybe the final ones — with each of her children, ages 16 to 25. There were lessons she wanted to share with her children about grit, persistence and mindfulness.”

The story is mostly focused on one of those trips, with her daughter, Bella, to the top of Aconcagua, the highest summit outside the Himalayas, “an elevation of about 22,840 feet … often called ‘the roof of the Americas’.” This trek, the Times writes, “was an attempt to deliver a few essential lessons to her daughter while she still could, including the acceptance not only of life’s triumphs, but its woes — ‘joy and suffering alike’, she said.”

You can read the story here.

Pitching By The Book

The Wall Street Journal has a cool little piece about Sean Doolittle, the closer for the Washington Nationals, a voracious reader who has set himself a goal for the current season: “He vowed to seek out an independent bookshop on every road stop this year and share his adventures with his Twitter following of nearly 100,000.

“The idea began as a way for Doolittle, a two-time All-Star, to take advantage of a job that allows him to travel to cities around the country. It has allowed Doolittle to use his platform as a famous athlete for a cause that matters to him.”

“I want to support local businesses,” Doolittle tells the Journal. “I want to support these places that are active in their communities, that are trying to be supportive and inclusive spaces for their communities.”

The Journal writes that “before a game in New York against the Mets on Wednesday, Doolittle and his wife, Eireann Dolan, visited Three Lives & Company in Manhattan’s West Village. On a trip to Los Angeles earlier this month, he found Vroman’s in Pasadena. A series in Denver brought him to Tattered Cover and Mutiny Information Cafe … This summer, he and Dolan are slated to attend events at Washington public libraries to read to children.”

KC's View: Normally I would be loathe to say anything nice about anyone connected with the Washington Nationals, though it is a little easier at the moment since the Nationals are lower in the NL East standings than my perpetually struggling New York Mets.

I love this story, though. I love that Doolittle is doing this because he wants to get more people, especially kids, to read, and because he supports the independent bookseller community. He also, as it happens, is a believer in using his position in the service of a variety of causes, according to the Journal, “defying the sport’s longstanding conservative culture by serving as an activist for political and social issues most of his peers avoid.”

E-conomy Beat

• One-day shipping, apparently, has a cost.

CNet reports this morning that as Amazon transitions from two-day shipping to one-day for Prime members, it realizes that it needs more merchandise in its distribution centers. So, Amazon “sent out an email to sellers, offering discounts of up to 75% on Amazon warehouse storage fees in exchange for sellers storing more of their most popular products with the company. Amazon stores, packages and ships independent sellers' items through a program called Fulfillment by Amazon. 

“If the plan works as expected, these merchants will sell more stuff and Amazon will be able to promote a large selection of one-day shipping inventory. Plus, consumers will benefit from faster shipping of more products. These independent merchants are particularly important for Amazon to power one-day shipping, since they account for about 58% of Amazon's total online sales. Amazon directly sells the rest.”


• Amazon announced yesterday its plans to open a fourth Amazon Go store in San Francisco, in the city’s Embarcadero Center. No specific opening date has been set.

There currently are 12 Amazon Go stores now open in Seattle, Chicago, San Francisco and New York City.

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Industry Drumbeat

From Cornell University...


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FastNewsBeat

• Publix Super Markets announced this week the opening of its second GreenWise Market, in Mount Pleasant, South Carolina.

In a prepared statement, Publix President Kevin Murphy says that “GreenWise Market is more than a store. It’s a gathering place where our customers can discover local items, indulge in a decadent treat or find the items they need to support their healthy lifestyle.”

Publix describes GreenWise as “a specialty, natural and organic store featuring grab-and-go options, organic produce, indulgent gourmet treats, local and unique products, bulk items, body care, and a variety of in-house made products like smoked meats and sausages. Customers can purchase a glass of wine, locally brewed beer, locally roasted coffee, tea or smoothie to enjoy while they shop or relax in one of the store’s seating areas.”

The first GreenWise Market opened in Tallahassee, Florida, in October 2018. Eight additional locations have been announced, three of which are expected to open this year.


• It was announced yesterday that Oisix ra Daichi Inc., Japan’s largest meal kit and organic food delivery service, has agreed to acquire plant-based meal kit company Purple Carrot. Terms of the transaction include an upfront payment of $12.8 million, with an earn-out potential of an additional $17.2 million through 2021, creating a total deal value of up to $30 million.”

Purple Carrot started doing business in 2014. Oisix said in a prepared statement that “with Oisix’s platform and access to fresh produce through thousands of farmers and Purple Carrot’s U.S. market penetration, the company is poised for explosive global growth in what experts predict will be a $9 billion global market by 2025 … The acquisition represents the first global alliance between two health-centric companies in Asia and the United States who will be able to leverage their food service and plant-based expertise to capitalize on the better-for-you trends that extend across the world.”

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Corporate Drumbeat

From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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Report From The Grass Roots

• In Pennsylvania, the Tribune Review reports that “people can now buy cannabidiol, or CBD, at more than 140 Sheetz stores across the region … Stores will sell topical rubs, patches, tinctures, vape pens, oral pouches and other CBD products. They will be kept behind the counter like tobacco products and those who buy them must provide proof they are over 18.”

According to the story, “Cannabidiol products have become popular for a variety of ailments and, although it’s derived from marijuana, it’s legal to sell in Pennsylvania outside of medical marijuana dispensaries.

“Sheetz is the first chain convenience store to offer CBD products at this magnitude, the company said.”

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From Webstop...

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From The MNB Politics Desk

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

• The Washington Post this morning reports that Sen. Elizabeth Warren (D-Massachusetts) and Rep. Alexandria Ocasio-Cortez (D-New York) are challenging Treasury Secretary Steven Mnuchin’s ties to Sears (he was on its board) and its primary owner, Eddie Lampert - with whom he roomed at Yale.

The two high-profile Democrats - Warren is running for the party’s 2020 presidential nomination, and Ocasio-Cortez is one of its most popular first-term representatives - want “Mnuchin to be more transparent about his time on Sears’s board as the retailer plunged into bankruptcy. They also take issue with his possible oversight of the company’s pension plans.”

The Post writes that “Mnuchin was one of several former board members named in a lawsuit last month, in which Sears Holding Company accused its former chairman, Eddie Lampert, and others of siphoning billions of dollars from the company as it closed stores and shed staff … The department store chain filed for bankruptcy in October and subsequently handed over responsibility of its two pension plans to the Pension Benefit Guaranty Corp., which is overseen by Mnuchin, as well as the secretaries of commerce and labor. The pension plans, which were underfunded by about $1.4 billion, affect more than 90,000 Sears workers.”

In a letter to the Treasury Secretary, the two members of Congress wrote, in part, ““We are deeply concerned by the financial engineering and potentially illegal activity that took place at Sears Holding Corporation while you served on the company’s board … In addition, we are concerned that, as Treasury Secretary, you are in position to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers."

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From IDDBA...

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Your Views: Differences

Commenting yesterday on a clothing rental business, I wrote:

There are some companies and business leaders that seem to be conscious of the less-is-more movement, but I wonder how many businesses are factoring this into their long-term strategies and tactics. If less-is-more takes hold, what will this mean to businesses that depend on a certain amount of sustained growth for the perception of success and legitimacy? Isn’t this something that business leaders ought to be thinking about?

Prompting MNB reader Howard Schneider to write:

You are spot on, Kevin. I think everyone in the developed world, not just business leaders, should focus on the potential impact on our culture, which is so dependent on continued growth. A serious slowdown in consumption could crash entire economies. At the same time, such a sea change could help our planet survive, by doing away with our unsustainable behavior. Lots to think about…



Responding to yesterday’s FaceTime piece about Assembly Chefs hall in Toronto, MNB reader George Denman - VP of sales at Graeter’s Ice Cream (an MNB fave, I’d like to point out) - wrote:

I loved your article in visiting the Assembly Chefs Hall in Toronto and the subsequent idea of a restaurant rotating in young innovative chefs quarterly to drive innovation and keep the menu fresh.

Graeter’s recently partnered with a five chain upcoming restaurant Taste of Belgium here in Cincinnati and had their owner chef, Jean-François Flechet, create a signature dish featuring our new mystery flavor for 2019, Maple Cinnamon Crunch and his Liegois waffles. Jean -Francois success has centered around offering an unique menu that features dishes from his hometown Liege, Belgium and where I studied in high school. Jean -Francois said that this partnership drew some of the largest crowds into his restaurant  since opening with lines down the street. He has decided to extend the promotion through the rest of summer and looks to create additional indulgent pairings using his signature Belgian waffles and Graeter’s. This is an example of a manufacturing partnering with a local upcoming chef and creating differentiation for both brands in the market.

We did something similar with an upcoming local craft beer company, Braxton Brewery, of Covington, KY and over the past two years they have created craft beer variations that each feature a Graeter’s top ice cream flavor. This partnership has put Braxton on the map and is now one of the top local craft beers loved by millennials. It has generated enormous PR for both brands and once again differentiated both brands.


Great examples, I think, from a company that makes great ice cream and continues to innovate.

And, from MNB reader Kelly Nott:

I just went to Toronto as well and we LOVED Assembly Chef’s Hall. We went in March and the weather was still cold, and we were able to sample lots of foodie style cuisine in the middle of the city without freezing.

I think Toronto does this indoor model so well, and to your point, every stand had excellent chefs doing what they love.

Had to share in your excitement about this place! If you haven’t checked out Marché in Toronto it has a similar vibe. Our beloved Wegmans here in NY does as well with the bonus of grocery shopping too.




The other day, we took note of a story about how Dunkin’ Brands VP of brand stewardship Drayton Martin tried to draw a thick line that was neither red nor blue between how his company operates and how rival Starbucks does.

““We are not Starbucks, we aren’t political … We don't want to engage you in political conversation, we want to get you in and out of our store in seconds,” she said.

Yahoo Finance wrote that “Starbucks in the past has occasionally used its cup designs and baristas to attempt to start cultural conversations on issues like race,” and that “in a country that is increasingly divided politically, consumer-facing brands are finding themselves drawn into political debates, even at times when they have tried to avoid commenting on such issues. It has happened to Tic Tac, Tiki Brand torches, Papa John’s pizza, and Under Armour, to name just a few.”

I commented:

I think that Dunkin’ is perfectly within its rights not to publicly adhere to any political agenda … a lot of people and companies would suggest that this is the smart move, especially in a highly polarized and divisive political environment.

But … a lot of companies that have been more engaged in politics would argue that they felt it was entirely consistent with their brand values to do so … or that it is important to be involved with public discourse, that responsible citizenship is not inconsistent with private business.


One MNB reader responded:

When I buy something I buy it because it’s convenient, it’s priced right, it’s the right color , or I just like it. I normally don’t ask what the political views are of those that are selling it to me, nor do I care. If I did care then I would just buy it somewhere else and keep my mouth shut.....let my dollars do the talking ......we would all be better off if we followed that rule.

I don’t agree. I’m not saying that every decision has to have a political component, but it pleases me when I can patronize companies or brands that reflect my beliefs or have supported issues to which I am sympathetic. Like, say, Newman’s Own, or Ben & Jerry’s. And I have no problem not doing business with companies that may be taking positions that I find objectionable.

As for keeping my mouth shut … I must confess that this isn’t an approach with which I am familiar.

OffBeat: Divergences


I’ve previously expressed my enthusiasm in this space for the return of Patrick Stewart in his iconic “Star Trek: The Next Generation” role, Jean-Luc Picard, in a new series that reportedly will debut this fall on CBS All Access, exploring Picard’s life two decades after we last saw him.

Last time I mentioned the series it was because the title of the new series had been announced - “Star Trek: Picard.”

Now, I’m happy to say, the first teaser trailer is out … and I’m happy to share it with you. I know there are a lot of Trek fans in the MNB community (I’m looking at you, Lisa Sedlar!), and I think that to say the least, we’re all engaged.



Mrs. Content Guy and I went to see Long Shot the other day, on the recommendation of our two sons, each of whom had seen and liked the romantic comedy starring Seth Rogen and Charlize Theron.

I agreed, for the most part, with my boys. Long Shot is a hard-R-rated comedy about a counterculture journalist (Rogen) who ends up serving as a speechwriter for the Secretary of State, who is running for president … and who also happens to be his former babysitter. Basically, it is “The Odd Couple” meets “The West Wing” meets Knocked Up.

What works best about the movie is the relationship between Rogen and Theron - I genuinely felt that there was a real connection and chemistry between the two. While Rogen delivers a typical Rogen-esque performance, Theron shows utterly fearlessness in throwing herself into the occasionally raunchy proceedings. In its own way, she may have found Long Shot as much of a challenge as her characters in Monster, Atomic Blonde, and Mad Max: Fury Road; one of the things I love about her is that she could’ve had a career playing variations on her The Italian Job role, but instead has really challenged herself - even in a romantic comedy like Long Shot, she’s the best thing in it.

There are some nice supporting turns by O”shea Jackson Jr. and Bob Odenkirk, but I have to say that there are some moments where the comedy goes a little too far in terms of both raunch and credibility. But I was willing to go along for the ride, mostly because I liked Theron and Rogen so much.

However, I must be honest. While I liked Long Shot, Mrs. Content Guy walked out of the theater muttering about how those were two hours of her life that she’d never get back. So let’s say that there was a divergence of opinion.



I do have a wine to recommend to you this week - the Principe Pallavicini 2017 Poggio Verde Frascati Superiore, a lovely white blend from Italy that, served nice and cold, is perfect on a warm spring day or with a nice spicy seafood dish.


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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe


In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new technological, demographic, competitive and cultural prism. These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely pave the path to irrelevance; Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand. See a sample at left…




Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

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A Retail Tomorrow Podcast: Inside The Kroger-Microsoft Alliance

In this new edition of the Retail Tomorrow Podcast, we discuss the unique partnership between Kroger and Microsoft, developing cutting edge innovations that will take each of them to the next level when it comes to things like digital shelving, video analytics, sensor networks, temperature tags … and beyond. And here’s the thing - the innovations that emerge are not proprietary, but will be available to any retailer looking to leap into the future.

This podcast was recorded at GMDC’s recent Retail Tomorrow Immersion conference in Los Angeles.

Our guests:

• Kevin Fessenden, Senior Product Manager at Sunrise Technology, which is a Kroger company.

• Chris Dieringer, Senior Director of Industry Solutions for the Retail and CPG Industry at Microsoft.

The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

You can listen to the podcast here, or on iTunes and Google Play.

Pictured, from left to right:

Kevin Coupe, Chris Dieringer, Kevin Fessenden.




A Scheduling Note From The Content Guy

Monday is celebrated as Memorial Day here in the US, and is a national holiday ... which means that MNB will not be posted.

But, we’ll be back Tuesday, May 28, with all-new, hand-crafted news and commentary.

Have a great weekend.

Sláinte!!

PWS 51