Wednesday, December 31, 2008

Retail Memo: Marc Bolland, the CEO of UK Supermarket Chain Morrisons Wins Sunday Times' 2008 Business Person of the Year'


Marc Bolland (pictured above), the chief executive of Britain's Morrisons supermarket chain, which is the UK's fourth-largest food and grocery retailing chain after number one Tesco, Wal-Mart, Inc.-owned Asda (number two), and number three Sainsbury's, is unique among the nation's top grocery chain chiefs for a number of reasons.

First, he's a Dutchman rather than a native Brit, something the chief executives of the other three chains are. Tesco's Sir Terry Leahy, Asda's Andy Bond and Sainsbury's Justin King all are proud natives of Britain. It's a real rarity for one of the CEO's of Britain's major supermarket chains (Marks & Spencer (Sir Richard Rose) and Waitrose (Mark Price) also have British CEO's, for example) to be from without the country.

The UK also honors its supermarket industry leaders. You might have noticed the title Sir in front of Tesco CEO Terry Leahy's name. Yes, given to him by the Queen for his leadership at Tesco. Then there's former Morrisons CEO and chairman Sir Ken Morrison, who just retired last year. He was knighted while leading Morrisons. Ditto Sir Richard Rose, the CEO and chairman of Marks & Spencer. Also knighted for his leadership of that venerable British retail chain. There's even a Lord in the bunch, billionaire Lord Sainsbury, who chairs Sainsbury's board but isn't involved in the day-to-day operations of the supermarket chain. Among other activities he is giving millions to Britain's fledgling space program and has a passion for politics, which he backs up with millions of dollars worth of donations to candidates he likes.

Morrison's chief executive Bolland also is unique among the CEO's of Britain's top four supermarket chains, and unique in this quality in general, in that before taking over the leadership of the supermarket chain that was founded as a market stall in 1899 by Sir Ken Morrison's father, Marc Bolland had zero previous retail experience.

Bolland came to Morrisons -- after having a number of meetings with Sir Ken Morrison who retired as chairman of the company last spring after 37 years as chief executive, in which he built the primarily family-owned grocery chain from not much more that one market stall into the UK's fourth-largest supermarket chain -- from Dutch beer giant Heineken, where he rose from starting out as a trainee fresh out of graduate school to the company's number two man, including having a seat on the beer bottler and marketer's board of directors.

The former beer company senior executive joined Morrisons shortly after Sir Ken executed his final coup, the acquisition of Britain's Safeway supermarket chain. Upon his retirement last spring, the last Morrison, Sir Ken, to perhaps ever run the family-founded supermarket chain, turned over the integration of British Safeway into Morrisons to Marc Bolland, who prior to that hadn't worked in, let alone run, a supermarket chain, particularly one that has 130,000 employees, as Morrisons' does as of the end of 2008.

Bolland rose to the challenge. Since his taking over Morrisons, the supermarket chain's customer count is today at 10 million shoppers, up by 700,000 from a year ago.

Additionally, last month Morrisons reported its strongest quarterly sales in 5 years -- an increase of a whopping 5% -- despite the severe economic recession in the UK. As a comparison, Tesco reported only a 2% sales increase for the same period.

Further, Morrisons has gained market share on number one Tesco and on number three Sainsbury's in the last year, a direct result of merchandising and operations changes Bolland has made at the chain.

The last thing making Bolland unique among the CEO's of Britain's top four supermarket chains is that this year the Sunday Times of London has awarded Morrisons' chief executive Marc Bolland its "Business Person of the Year" award for 2008.

The award is not just for the grocery sector, or the retail sector, but it's across the board for the entire UK business sector.

The chief grocer at Morrisons did good, as the Sunday Times' annual award is a coveted honor for many business people in the UK.

Sir Ken is likely proud of his choice, particularly because the only slight reservation he had about choosing Marc Bolland to lead Morrisons after his retirement was that he had no previous grocery retailing experience.

However, that didn't stop Ken Morrison from choosing March Bolland as the supermarket chain's CEO -- and it certainly hasn't stopped Bolland from taking Morrisons to a new level.

As part of its naming Marc Bolland as its UK "Business Person Of The Year" for 2008, the Sunday Times has published a detailed profile piece about him and his tenure thus far as chief executive of the Morrisons supermarket chain. The piece is written by Kate Walsh. It's a good and highly informative read, as well as a nice overview of the current state of food and grocery retailing in the UK.

You can read the profile from the Sunday Times of London, "Morrisons saviour Marc Bolland uses his loaf to boost sales: Marc Bolland, chief executive of the supermarket chain, has won our Business Person Of The Year award for reviving the ailing group," here.

We congratulate Marc Bolland on winning the honor, as well as on his tenure thus far at the helm of the supermarket chain that Sir Ken built -- Morrisons.

Innovation Memo: Innovation Will Be Just as Important, and Maybe Even More Important, In An Economically Challenging 2009


The temptation in very bad economic times like the present is to hunker down, cut-back and just stay the course. This is true for all companies in the the food and grocery industry, from small natural and specialty foods manufacturer-marketers and single-store retailers, to global food companies and large retail chains.

The problem with taking that approach only is that it tends to shut down innovation, which is something industry companies of all shapes -- suppliers, marketers, distributors, retailers -- and sizes -- small, medium, large and mega -- need to continue doing in an economic recession. In fact, one could argue that although its much more difficult to do, innovating during a serious economic downturn is perhaps the most important time to do so.

Cutting back, hunkering down, trimming expenses -- these are all essential things to do in this global recession. They are survival mechanisms and strategies. But companies and individuals need to do so in a way that preserves, and even encourages, innovation. It can be done. The first step towards making it happen is to recognize it.

2008 has already ended in parts of the world, and will do so in just a few hours in other parts like the United States. So as the new year, 2009, begins -- a time when we all look to changes --one change we won't be seeing is an improved global economy. No indeed. In fact, we, along with many others, see the current global recession lasting through all of 2009, and likely getting worse before it starts to get better.

This does not mean innovation must come to an end though, or even slow down. Rather it just needs to change, to adapt, as all strategic elements must in a super-sour economy.

To this end, we've put together a list of recent articles and reports regarding innovation. All of the articles look forward to innovation in 2009, in a difficult economic environment. It's must reading for the new year. The list: click on the green titles below:

~Innovating in the Great Disruption
By Scott Anthony

~An Entrepreneur's Look at 2009: The End or A New Beginning?
By David Silverman

~Special Report: Making Innovation Work

~Special Report: Slimming Innovation Pipelines to Fatten Their Returns

Tuesday, December 30, 2008

Green Memo: Interview - Coca-Cola CEO John Brock Says Sustainability is No Longer 'Niche'


In an interview published in Knowledge@Warton, an online publication of the University of Pennsylvania's Wharton School of Business, Coca-Cola Enterprises CEO John Brock talks about his push to "green" the giant beverage bottler, marketer and distributor.

Environmental sustainability is "absolutely key" to the strategy of Coca-Cola Enterprises. "It's center of play. It's not niche anymore," Brock tells the interviewers.

Coca-Cola Enterprises is the world's largest marketer, producer and distributor of Coca-Cola products. It has operations in 46 U.S. states and Canada, and is the exclusive Coca-Cola bottler for all of Belgium, France, the United Kingdom, Luxembourg, Monaco and the Netherlands. It's sales represent 18 percent of The Coca-Cola Company's worldwide volume. Coca-Cola Enterprises isn't to be confused with Coca-Cola Company, which is a separate corporate entity.

In June of this year, Natural~Specialty Foods Memo reported on and wrote about one of Coca-Cola Enterprises' new"green" efforts, this one in the transportation sector. In this piece [Green Transportation Memo: Coca-Cola Enterprises, Inc. to Go Green; Plans to Add 142 Hybrid Electric Delivery Trucks to its North American Fleet] we wrote about Coke Enterprises' plans to buy 142 hybrid- electric delivery trucks, the start of what the company said would be an eventual conversion of its entire diesel fuel-powered North American delivery truck fleet to 100% hybrid-electric.

In the Wharton interview, CEO Brock says Coca-Cola Enterprises has now purchased all 142 of those hybrid-electric delivery trucks -- and plans on buying more.

The hybrid-electric trucks, custom built for the company, use 35% less fuel and produce about 35% less emissions than conventional diesel fuel-only powered delivery trucks do. They also cost the company about 45% more than the conventional trucks, according to Brock.

Brock appears to be big on the hybrid-electric delivery trucks though, as you can read in the Wharton interview, despite the significantly higher upfront cost.

Part of his glee has to do with the fact -- despite the per-gallon cost of diesel fuel having decreased considerably over the last couple months (it will go back up) -- that with the high price of diesel fuel being pretty much a constant, he knows the hybrid-electric trucks will pay for themselves over time. [The reduced carbon emissions also will come in handy in the event the U.S. Congress passes carbon cap-and-trade legislation in 2009, which is something a majority of Democrats, President-elect Barack Obama, and some Republicans support.]

In the Wharton interview, CEO Brock also addresses a number of other environmental issues, including recycling and what the beverage giant is doing in that regard, since it is one of the biggest users of plastic packaging in the world.

In the interview piece, the chief executive of Coca-Cola Enterprises also discusses corn -- and its soaring cost -- which is used to make Fructose corn syrup, the current sweetener of choice in the bottler's carbonated beverage brands, including its flagship Coke. He also touches on the "green" issues of packaging reusability, climate change, energy conservation and other related sustainability issues.

You can read the Wharton interview with Coca-Cola Enterprises CEO John Brock here.

Monday, December 29, 2008

Retail Memo - Breaking News: New Seasons Market Doesn't Turn Over Trade Secrets to Whole Foods Market Despite Deadline to Do So Being Today

In our story yesterday (Sunday, December 28) [Retail Memo: Tomorrow Deadline For Portland, Oregon's New Seasons Market to Turn Over Trade Secrets to Whole Foods Market's Legal Counsel], we reported that today (Monday, December 29) is the deadline Federal Trade Commission (FTC) Administrative Law Judge Michael Chappell has given Portland, Oregon-based New Seasons Market to comply with Whole Foods Market, Inc.'s subpoena for the nine-store natural grocer's financial records, sales data, strategic marketing plans and related trade secrets.

We can now report that as of the end of business today, New Seasons Market has not submitted the information demanded in the subpoena to lawyers for Whole Foods Market, Inc., as directed by the FTC judge.

This has been confirmed by Brian Rohter (pictured at left), the CEO of New Seasons Market.

Rohter says he can't talk about any other aspects of the subpoena or the legal issue at present, on advise of his legal counsel.

We can report however that New Seasons Market has no plans to turn over the information demanded by Whole Foods Market, Inc. on Tuesday, December 30. And since Wednesday is New Year's Eve, and Thursday and Friday are part of the four day New Year's Day holiday weekend, don't expect to see New Season's submitting its trade secrets to Whole Foods' legal counsel at all this week.

New Season's CEO Rohter says he hopes to have more details regarding the subpoena issue as soon as he can. Right now though he says he's essentially being kept on a short leash by his legal counsel in terms of discussing the issue.

What we do know is that Rohter and other members of the New Seasons Market management team huddled with their lawyers last week in an attempt to come up with a strategy to fight the FTC Administrative Law Judge's ruling that the Portland natural grocer turn over its trade secrets to Whole Foods' legal counsel by today.

Therefore it's possible the natural grocer and its legal counsel have come up with such a strategy but can't announce it publicly as of yet.

Stay tuned.

Independent Grocer Memo: Natural-Organic, Local, Fresh and Premium Keys to Pacific Northwest USA's Haggen Foods; Now Adding Value

Independent Food & Grocery Retailing USA - Pacific Northwest

Although it's stores are experiencing a recession-influenced drop in category sales like retailers throughout the U.S. are, Pacific Northwest USA-based family-owned supermarket chain Haggen, Inc. says natural-organic food and grocery products, along with locally-produced specialty-oriented and fresh, prepared foods, continue to be three of the fastest-growing category segments for the 33-store Western Washington state-headquartered supermarket chain, which operates stores in Washington and Oregon under the Haggen Food & Pharmacy and TOP Food & Drug banners, according to company CEO Dale Henley

"Organic products continue to be one of our fastest-growing segments. The next is local products, which I think will surpass organic soon. There are a lot of great local products in Western Washington, and I think more will come because of customer demand," the CEO of the privately-held independent supermarket chain said in a recent profile piece in the Bellingham Herald, a local newspaper that serves the Western Washington state region.

Haggen, which was founded by the family of the same name in 1933, this year is celebrating its 75th year of owning and operating supermarkets in Washington and Oregon.

Haggen, Inc.'s 33 stores grossed a whopping $870 million in its fiscal year 2008, and the chain is headed towards sales of $1 billion annually, perhaps as early as by the end of 2009, as it remodels and expands a few existing stores and plans to open one or two new stores next year, along with taking over and remodeling a former upscale Larry's Market supermarket in Oregon in 2009. Nearly $1 billion in sales is excellent by industry standards for operating 33 (or 40 for that matter) supermarkets.

The company's 33 supermarkets are divided about in half, with 16 stores currently under the Haggen banner and 17 currently under the TOP banner and format.

The Haggen Food & Drug stores are large supermarkets with an upscale-oriented format. The stores merchandise a full selection of conventional food, grocery and non-foods products (they aren't specialty supermarkets) but put a major emphasis on natural, organic, locally-produced, specialty and ethnic food and grocery items, in-store premium, fresh prepared foods, quality fresh-baked goods, wines, cheeses and other upscale natural and premium food offerings, along with fresh meats and fresh produce, including numerous organic and locally-grown varieties.

The TOPS format is similar to the Haggen banner format stores except it puts an emphasis on discount pricing and value via offering lower everyday prices and deeper promotions, especially on conventional food and grocery items. Both formats though put a focus on natural, premium and fresh foods.

Among the recent additions to the Haggen banner stores include expanded gourmet and artisan cheese departments. The retailer is rolling out new cheese departments in some of its stores that feature about 300 varieties of cheeses, including many produced locally in the Pacific Northwest region.

"Americans are much more interested in cheese. I think it's an industry that's in a position where wine was 10 years ago," CEO Henley said in the recent Bellingham Herald Review profile piece.

Haggen also is putting a major focus on its own store brand food and grocery items, which range from value brands to its premium "Premiere" store brand. In addition to "Premiere," the grocer offers over 100 skus in its "World Classics Trading Company" store brand, which are specialty and artisan-produced food products. The grocer says it now offers about 900 items total under its various store or private label brands.

Haggen also offers the "Full Circle" proprietary brand of natural and organic food and grocery products. "Full Circle" is a control brand which is offered exclusively to only one or two supermarket chains in a given geographical market region. The brand offers natural and organic products to the retailers across all categories, even in the fresh meat category. [You can read more about Haggen's store brands here.

The Haggen Food & Drug banner stores have long been considered the "go to" market for premium and specialty foods in the parts of Washington and Oregon where the stores are located. Additionally, in recent years the family-owned chain has been gaining that same reputation for natural, organic and locally-produced food and grocery products. That's a strong achievement because Washington and Oregon are packed with retailers that not only sell but specialize in those respective categories.

Below are a few other in-store features of the Haggen banner supermarkets:

>In-store bakeries offering specialty desserts, pastries and artisan baked goods made fresh daily.
>Wine Specialists available for recommendations, case orders and special requests.
>In-store Pharmacies with licensed professionals specializing in community healthcare.
>Floral departments offering fresh cut flowers, design, delivery and FTD Service.
>Market Street Caf├ęs with dining area offering specialty wraps and panini sandwiches, authentic oriental cuisine and more.
>Just for Kids child care center offering a fun, safe and professionally staffed facility as a free service to our guests available in some stores.


Natural, organic and specialty foods suppliers and distributors have long used Haggen as their retail point-of-entry in the Pacific Northwest market for new product and item introductions since it is a retailer that for decades has been on the cutting edge in terms of introducing new items in the categories.

In the current economic downturn CEO Henley says Haggen is upping its value proposition, including in the natural-organic, specialty and fresh, prepared foods categories.

He offers some analysis in that regard in this quote from the Bellingham Herald Review profile piece:

"Our meals-to-go segment is still growing, particularly the simpler items, such as soups. But we also see some moving away from that segment and buying more of the basics, like sugar and flour to make food at home. What we think is happening is the new food-service customers are people who used to regularly eat at restaurants and are now doing that less. Then some of our regular food-service customers are moving into the basics in order to save money. Time is still an issue for many families, though, so meals-to-go is growing overall."

The Haggen banner stores in particular have somewhat of a high-price profile among Pacific Northwest consumers because of their upscale, premium and specialty-oriented focus. The company is trying to counter that perception in these down economic times, which have consumers searching for value, by increasing its value proposition, including in the natural, specialty and prepared foods categories, according to the supermarket chain's CEO.

This new focus includes offering stronger price promotions in-store and in its weekly advertising flyer, on both conventional food and grocery products and on premium, natural-organic and specialty products. It's all about adapting to the current bad times, as we say often in Natural~Specialty Foods Memo.

As we write often, regardless of format or key customer base, all food and grocery retailers, from the most discount-oriented to the most upscale and natural-organic-focused, need to create their own unique value proposition during this severe global recession, which in the case of the U.S. is shaping up to be the worse sustained economic downturn since the great depression of the 1930's. Warning: We, along with many independent economists, see the recession lasting all of 2009.

Haggen, Inc. though appears to be not only surviving in the economic downturn in its Pacific Northwest market, it also continues to thrive, albeit with a good amount of struggling like nearly all food and grocery retailers are doing, by focusing on what it does best -- doing basic food and grocery retailing with a special focus on premium, specialty, natural and fresh foods merchandising -- while adapting to the current economic climate by upping its value proposition.

Haggen also focuses on the local communities where it has its stores. And as a locally-based, family-owned company, which is among the largest employers in Western Washington and a significant one in Oregon, it touts its local impact, as well as participates in numerous community and neighborhood-based non-profit and charity programs. It's positioning -- and it walks that walk -- is as the local food and grocery retailer supporting local jobs and residents.

This local emphasis also is taking the form of an expanded effort and program by the supermarket chain to buy and merchandise more locally-produced food and beverage items in its stores -- ranging from wines and cheeses to organic and specialty food and grocery products -- and much more, including even non-foods products made by local companies and entrepreneurs.

We believe local-product buying and selling by food and grocery retailers is only going to get more popular (and stronger among local consumers) in 2009 because of the recession. The concept of buying and shopping local will grow because it's a way to encourage keeping money and tax revenue locally, creating jobs in cities and states, as well as providing increased revenues for cash-strapped local governments.

This trend fits well with Haggen, Inc's location in the Pacific Northwest. Oregon and Washington state offer a bounty of wines, specialty, natural and organic food and grocery products, many produced by small, artisan operations, that can be offered for sale and touted in the locally-based supermarket chain's stores.

It appears the family-owned grocery chain, who's matriarch Dorothy Haggen recently passed away (the chain is owned by her sons Don and Rick Haggen), has figured this out, and is moving even stronger in the "local" direction in everything it does.

Focusing locally in everything they do -- from merchandising and marketing to community involvement -- is one of the key reasons the independently-owned supermarket sector, whether its a 33-store operator like Haggen, Inc. or a single-store independent grocer, is so vibrant in the U.S. -- and will continue to be despite the strong competitive pressure from the mega-chains.

Sunday, December 28, 2008

Retail Memo: Web Site and Blog-Driven Viral Boycott of Whole Foods Market Stores in Portland, Oregon Region Going On; Could it Intensify?

The Portland, Oregon USA region offers lots of fresh air, green grass, public transportation and one of the highest per-capita natural foods shopping consumer population segments in the United States. Portland-area consumers love -- and buy -- natural and organic. Portland is a key market for any natural products retailer, and Portland market region consumers are people those retailers want (and need) on their side.

An informal, primarily Web site and Blog-driven, viral boycott of Whole Foods Market stores in the Portland, Oregon USA region is being conducted by an intere,sting decentralized collection of consumers -- political progressives, libertarian types, local business advocates, and others who just plain dislike Whole Foods' issuing of a subpoena earlier this year to Portland-based New Seasons Market.

The subpoena, which also was issued to 92 other natural foods retailers throughout the U.S., demands that the local, nine-store natural foods grocer turn over its sales and financial information, strategic marketing plan (including plans to open new stores), e-mails and other proprietary information to Whole Foods Market, Inc.'s legal council as part of the Austin, Texas-based natural grocery chain's battle against the U.S. Federal Trade Commission's attempt to overturn its friendly acquisition last year of Wild Oats Market, Inc.

As we've reported, Whole Foods Market, Inc. issued subpoenas to 93 natural products retailers in the U.S., including Portland's New Seasons Market. The subpoenas demand the information detailed above from the retailers because Whole Foods' says it must have the data to fight the FTC's legal claim that a combined Whole Foods-Wild Oats is a monopoly in what the regulator calls the "Premium Natural and Organic Retailing Segment" in some near-30 markets in the U.S. Whole Foods says this claim is folly, and that the information from its competitor natural foods grocers will help it prove in court that the FTC is wrong.

The informal boycott, which is using the Internet -- Blogs and Web sites -- as its organizing point (organizing from a viral standpoint that is), is based on the simple premise that New Seasons Market is a local business and natural foods retailer (David), while Whole Foods is a mega-chain (Goliath), which by its subpoena is attempting to put unfair and onerous demands on the local New Seasons Market, along with engaging in "big brother" tactics by legally demanding the smaller natural grocer's trade secrets, which New Seasons Market CEO Brian Rohter believes could be used by Whole Foods Market, Inc. against his company, despite assurances by Whole Foods Market, Inc. and the FTC that only Whole Foods' lawyers FTC commission members and others related to the court proceedings will be able to view the data and related information.

Suggestions of such a boycott of Whole Foods' Portland stores first started appearing in the comments section of a post by New Seasons Market CEO Brian Rohter on the company's Blog in early December in which he talked about the subpoena against his company and how he planned to fight it. The comments to his posting were spontaneous, individual comments by local Portland area consumers saying they would no longer be shopping at Whole Foods stores because of the subpoena.

Many of these commentors took to e-mail, sending messages to friends in the region, asking them to boycott Portland-area Whole Foods stores. [Natural~Specialty Foods Memo has been sent copies of those e-mails because many Portland region residents have been following our coverage of the issue.]

At one point, the comments on the natural grocer's Blog got so hot and numerous about boycotting the Portland-region Whole Foods stores, that New Seasons' CEO Rochter made a brief post, reminding his readers that they shouldn't take out their anger on the Portland-area Whole Foods Market store-level employees, who he called "our friends and neighbors."

Additionally, in early December, Leslie Carlson, a contributor to the popular and politically progressive-oriented Blue Oregon.com Web site, wrote a post in which she said she would no longer shop at any Portland-region Whole Foods Market stores because of the supoena of New Seasons trade secrets.

Below is the leed paragraph from her stinging post in early December, in which she announces she will boycott Whole Foods Market stores in the region:

"I'm spitting mad about Whole Foods' latest, thuggish attempt to mess with Portland food retailer New Seasons. You may have read the Oregonian story or New Seasons' CEO Brian Rohter's post about the subpoena asking for proprietary and confidential business information. The subpoena sent to New Seasons is part of a screwed-up merger that Whole Foods has been trying to execute with rival Wild Oats for the past 18 months."

And, the closing paragraph of Ms. Carlson's post:

"In the past, I have occasionally stopped into Whole Foods. That ends today. Threaten my favorite locallly-owned grocery store, and I promise to never darken your door again."

You can read her complete post here.

In the post, Ms. Carlson also called for readers of the progressive Web site to join her in boycotting Oregon's Whole Foods stores because of the subpoena issue. There are currently 43 reader comments on her post. You can view the comments here.

BlueOregon.com has a substantial readership among political progressives -- not just in Oregon but throughout the Pacific Northwest and in California -- who just happen to be a significant portion of Whole Foods Market's customer base.

Since Ms. Carlson's post came out in early December, it has been e-mailed to people all over Oregon (and throughout the U.S. for that matter), with notes attached asking them to boycott Whole Foods stores in the Portland region and throughout the state, because of the subpoena issue.

Patrick Alan Coleman, a Blogger at the popular Portland Mercury alternative newspaper Web Site, also has come out in favor of boycotting Whole Foods Market stores in the region because of the natural foods grocery chain's subpoena for local guy New Seasons Market's proprietary information. You can read him here.

Portland Food & Drink, a local Web site that covers all things consumable in the Portland region, also received numerous responses to a post it made about the issue in early December. Not all of the comments were advocating a boycott of the local Whole Foods stores. But a considerable number of them do -- such as these three examples below:

>lauhal63 says:
December 3, 2008 at 9:45 pm
Bullies! Whole Foods will not get another dime from me. Ever.

>Jessica Roberts says:
December 8, 2008 at 1:52 pm
Just sent WF management a message:
I was disgusted to read of your attempt to subpoena New Seasons’ sensitive corporate information. What, you are afraid that big bad 9-store chain New Seasons might offer better customer service and better products compared to poor little Whole Foods, with only 270 stores around the nation?You’re not fooling anyone. While I understand why it would benefit you to know exactly what next move your competition will take, I don’t see that it’s worth creating an image of yourself as an anticompetitive corporate bully. I used to shop at Whole Foods several times a month, because my work is right near one of your shops. No more. I’ll make sure to boycott your business for as long as you’re bullying local businesses in my back yard.


>Heather says:
December 16, 2008 at 11:36 am
I, too, will continue to shop at New Seasons, but now it will be exclusively. Furthermore, I will Twitter my “boycott Whole Foods” message, blog it, and take any opportunity to slam them verbally. I always knew there was something I didn’t like about WF. They really shoulda known better than to screw with Portland.
You can read the post, and the reader comments, at Portland Food & Drink here.

It isn't clear if the Portland region Whole Foods Market stores are overall experiencing a significant drop in sales because of this informal, primarily Web site and Blog-promoted boycott. However, this is what we do know, based on our reporting and research:

> Customer counts are down at some Portland-region Whole Foods Market stores. A Natural~Specialty Foods Memo (NSFM) correspondent was in Portland two weeks ago. While there he visited a number of Whole Foods stores. While in the stores he talked with employees, asking if they had noticed any drop-off in sales because of the New Seasons subpoena issue. First off, almost every single store employee he asked was aware of the issue. Second, a number of them told the correspondent they did believe there was a slight drop in business because some customers were boycotting the stores over the issue.

>During the two days in Portland, the NSFM correspondent also taked to four different sales representatives who call on Whole Foods stores. Two of the sales reps said they couldn't tell if there was any drop in customer counts since early December. However, the other two said in at least a couple of Whole Foods stores they call on, employees have been talking openly about a drop in business, which the store workers attribute primarily to the subpoena issue.

>The NSFM correspondent also visited a number of New Seasons Market stores. Employees at two stores in Portland said they've seen a significant increase in customers coming into the stores, both saying they thought it has lots to do with Portland residents not shopping at Whole Foods over the subpeona issue. In fact, one of the New Seasons store employees pointed out the post on the BlueOregon.com Web site to the NSFM correspondent. Additionally, the manager of one of the two New Seasons stores told the NSFM correspondent that numerous customers had mentioned they are doing all of there shopping at the store and Boycotting Whole Foods over the subpoena issue.

>NSFM talked to two vendors in the Portland market today. They commented that it appeared to them a number of the New Seasons stores had higher Christmas holiday shopping customer counts they they could recall seeing last year. One of the vendor represenatives also said he saw a man handing out flyers on day about two weeks ago in tee parking lot of a Portland Whole Foods Market store. He says the flyers asked consumers not to shop at Whole Foods because of its demands in the subpoena to New Seasons. We haven't been able to track down any of those flyers to date. It appears it was a "one-man effort" rather than part of a mass anti-Portland region Whole Foods mass-flyer distribution campaign.

>Lastly, it is without a doubt that Whole Foods Market is being hurt from a reputational and public relations standpoint in the Portland Metro region over the New Seasons subpoena issue. It appears there is very little support for Whole Foods' side of the issue, and lots of support for local guy New Seasons Market, as evidenced by the posts and comments on the local Blogs and Web Sites, along with all of the other observable activity regarding the issue.

Whole Foods Market and New Seasons Market essentially share the same customer base in the Portland regional market -- well educated consumers who buy primarily natural and organic foods, groceries and related products, but also desire and buy specialty, premium and ethnic foods. This shared customer base also consists of consumers who are "greener" than the average shopper, believe and practice sustainability more than the average consumer, and care more about local foods and ethical retailing than the general shopper does. In fact, the FTC sites New Seasons as one of its examples of "Natural and Organic Premium Segment" key competitive retailers to Whole Foods Market in its legal case against the Wild Oats acquisition.

In other words, this is Whole Foods' key customer base, as it is News Seasons,' and in Portland, as is the case elsewhere, it can't afford to lose very many of the consumers that comprise the segment because they are core Whole Foods Market customers.

However, although we have no quantification on the matter, we do know many of these consumers are being lost to New Seasons over the subpoena issue, and probably to other grocers, right now. This isn't good news for Whole Foods, particularly in Oregon, which is one of the top per-capita states in sales for natural products retailing. It will be even worse news if this informal, primarily Internet-driven boycott picks up steam and takes on more formal organizational characteristics in the days and weeks to come.

Since, as we reported earlier today, tomorrow is the deadline given to New Seasons Market by the FTC Administrative Law Judge to comply with Whole Foods' subpoena, the issue isn't going away, particularly in Portland, Oregon, anytime soon.

Based on our extension reporting and research on the issue, we wouldn't be surprised to see the boycott of Whole Foods stores in the Portland, Oregon region -- as well as seeing it spread throughout the state and maybe into other parts of the Pacific Northwest -- grow and intensify over the coming weeks, both via the Internet and in other more formal, person-to-person ways.

The power of using the Internet alone to spread such campaigns virally (social media) today is significant and real. Thus far the efforts to convince Portland-area consumers to boycott Whole Foods stores in the region have been mostly individual and spontaneous. However, that could easily change -- and change rapidly because of the speed of "Internet time."

Reader Resources

Most recent, related posts from Natural~Specialty Foods Memo (NSFM):

~December 28, 2008: Retail Memo: Tomorrow Deadline For Portland, Oregon's New Seasons Market to Turn Over Trade Secrets to Whole Foods Market's Legal Counsel

~December 24, 2008: Retail Memo: It's 'Deja Vu All Over Again' - Judge Paul Friedman to Whole Foods Market, FTC: 'What's My Role Here?'

~December 22, 2008: Retail Memo: Only Slightly More Than Half the 93 Natural Foods Retailers Issued Subpoenas By Whole Foods in its Case against the FTC Have Complied

FTC v. Whole Foods Market - Whole Foods Market v. FTC: Recent coverage and analysis in Natural~Specialty Foods Memo (NSFM):

December 24, 2008: Christmas Eve Memo 2008: 'Twas the Night Before Christmas' - FTC v. Whole Foods Market, Inc. Version....December 24, 2008: Independent Grocer Memo: From Mrs. Gooch's to the Auto Body Business, Then Back to Retail, Chris Kysar is On A Healthy Organic Foods Retailing Roll....December 24, 2008: Retail Memo: It's 'Deja Vu All Over Again' - Judge Paul Friedman to Whole Foods Market, FTC: 'What's My Role Here?'....December 23, 2008: Retail Memo: FTC Postpones Scheduled February 16 Administrative Hearing on Whole Foods-Wild Oats Deal Break-Up Until April 6, 2009....

December 23, 2008: Independent Grocer Memo: National Grocers' Association Asks President-Elect Obama to Look Out For Independent Grocers When He takes Office in January....December 22, 2008: Retail Memo: Only Slightly More Than Half the 93 Natural Foods Retailers Issued Subpoenas By Whole Foods in its Case against the FTC Have Complied.... December 22, 2008: Retail Memo: Whole Foods Market Wants to Depose and Obtain Internal E-Mails From FTC Commissioner, Suggesting Possible Conflict of Interest Situation....

December 22, 2008: Retail Memo: At Hearing Today Judge Tells FTC to Provide Road Map of How Whole Foods Could Take About Merged Companies Should Ruling Go In its Favor....December 19, 2008: Retail Memo: Whole Foods' Lobbying Effort Baring More Fruit - House Committee Leaders Send Letter to FTC Chair Similar to One Sent By Senate Leaders.... December 18, 2008: Retail Memo: 'This Isn't Over Yet' - New Seasons Market CEO On Judge's Decision the Natural Gorcer Must Turn Over Trade Secrets to Whole Foods Market.... December 18, 2008: Retail Memo: The 'Whole Primary Source Scoop' -- FTC and U.S. Federal Court Documents on the FTC v. Whole Foods Market, Inc. Case....

December 17, 2008: Breaking News: Judge Orders New Seasons Market to Comply With Whole Foods' Subpoena and Submit Sales Data, Financial Records and Other Trade Secrets....December 16, 2008: Retail Memo: Whole Foods, Wild Oats and Boulder, CO...And the Rocky Mountain News' Editorial Take On FTC v. Whole Foods Market, Inc....December, 15, 2008: Retail Memo: Eight Members of U.S. Senate Judiciary Committee Send Letter to FTC Chairman Regarding FTC's Legal Case Against Wild Oats' Acquisition....

December, 13, 2008: Retail Memo - Analysis & Commentary: More On FTC v. Whole Foods Market, Inc. and Whole Foods Market, Inc. v. FTC....December 9, 2008: Organics Category Memo: Wither Organics? Organic Food & Grocery Category Sales Down; But Double-Digit Growth Still Likley With Mass Market Lift....December 9, 2008: Retail Memo: Whole Foods Markets' 'Whole Legal Paycheck:' Three Top Washington, D.C. Law Firms Teaming Up On The Natural Grocery Chain's FTC Lawsuit....

December 9, 2008: Retail Memo: Whole Foods Market CEO John Mackey and Team Launch First Aggressive Attack Against the FTC's Legal Case at Press Conference This Morning....December 8, 2008: Retail Memo: Mr. Mackey (and the Whole Foods Market Troops) Goes to Washington....December 8, 2008: Retail Memo: Breaking News - Whole Foods Market, Inc. Files Lawsuit Against the FTC; Argues the Regulator Violated the Company's Due Process Rights....December 7, 2008: Retail Memo: New Seasons Market CEO Brian Rohter and Whole Foods Market Co-President Walter Robb Discuss and Debate the Subpoena Issue Online....

December 7, 2008: Retail Memo: New Seasons Market CEO Brian Rohter Speaks Out Again Today on the Whole Foods Market, Inc. Subpoena of His Company's Data....December 7, 2008:Retail Memo: Whole Foods Market Retains Top Washington D.C. lawyers and Politically-Connected Lobbyists to Plead its Case Against the FTC....December 6, 2008: Retail Memo: Fast-Growing and Scrappy Sunflower Farmers Market Ventures Deep in the Heart of (Whole Foods Country) Texas....

December 6, 2008: Retail Memo: Fast-Growing NF Chain Sunflower Farmers Market Responds to Whole Foods Market, Inc. Subpoena For Sales, Financial and Related Information....December 3, 2008: Retail Memo: More on the Whole Foods Market-New Seasons Market Subpoena Issue; FTC Holding Firm For February, 2009 Hearing....December 2, 2008: Retail Memo: Whole Foods Market, Inc. Closes $425 Sale of Stock to Private Equity Firm; Adds Members of the Firm to its Board of Directors....

December 2, 2008: Retail Memo: Portland, Oregon-Based New Seasons Market CEO Brian Rohter Responds to Whole Foods Market's Paige Brady....December 2, 2008: Retail Memo: Whole Foods' Paige Brady Responds to Yesterday's New Seasons Market Piece; Lots of E-Mails; Issue Heats Up On the New Seasons Market Blog....December 1, 2008: Retail Memo: Whole Foods Wants A Court-Mandated Financial Records Dump from Portland-based New Seasons Market; it Says For its Battle Against the FTC.

FTC v. Whole Foods - Linkage from the Natural~Specialty Foods Memo archives:

Click here, here and here for stories about the FTC-Whole Foods issue from our archives, including pieces about mass market and natural foods class of trade retail competitors.

Retail Memo: Tomorrow Deadline For Portland, Oregon's New Seasons Market to Turn Over Trade Secrets to Whole Foods Market's Legal Counsel

Whole Foods Market, Inc., New Seasons Market, and the Subpoenas

Tomorrow (December 29, 2008) is the deadline Federal Trade Commission (FTC) Administrative Law Judge Michael Chappell has given nine-store Portland, Oregon natural foods grocer New Seasons Market to turn over its trade secrets to lawyers for Whole Foods Market, Inc. [Here's a link to the ruling.]

As Natural~Specialty Foods Memo reported on December 17 in this story [Breaking News: Judge Orders New Seasons Market to Comply With Whole Foods' Subpoena and Submit Sales Data, Financial Records and Other Trade Secrets], the FTC Administrative Law Judge ruled against New Seasons' appeal of the Whole Foods' subpoena, ordering the natural grocer to submit its sales, financial and other proprietary information called for in the subpoena to Whole Foods' lawyers by tomorrow.

The next day, December 18, we reported in this piece [ Retail Memo: 'This Isn't Over Yet' - New Seasons Market CEO On Judge's Decision the Natural Grocer Must Turn Over Trade Secrets to Whole Foods Market], that Brian Rohter, the CEO of New Seasons Market, said he was huddling with his lawyers following the Administrative Law Judge's ruling, looking for ways to continue fighting the subpoena.

As of Friday, December 26, New Seasons hadn't filed any formal legal appeal to the FTC, according to our sources; nor have we been able to find anything legally filed.

Therefore, tomorrow is S (subpoena) Day for Portland's New Seasons Market. The natural foods retailer can either comply with the judge's order and submit its trade secrets to Whole Foods' lawyers, which is something CEO Rohter has been strongly against doing, or it can join a number of the other 92 natural products retailers issued subpoenas and not comply with the legal documents. As we reported here, as of last week only about 50 of the 93 retailers issued subpoenas by Whole Foods Market, Inc. have complied. The deadline to do so was November 4, 2008.

Portland's New Seasons Market is the only one of the 93 retailers to date that has publicly opposed the subpoenas and filed an appeal with the FTC. The others who haven't complied have done so silently, merely refusing to submit the information. Additionally, a number of the 93 natural products retailers that have complied with Whole Foods' subpoena for their trade secrets, have self-edited the information submitted, thus only partially complying with the demands made in the legal documents.

Since New Seasons is the only one of the 93 retailers to oppose the subpoenas and take a public stand in doing so, it is flying above the radar (the others that haven't complied are flying below the radar screen in terms of visibility on the issue) in terms of its decision tomorrow. There are certain negatives as well as certain benefits of doing so.

Most of these 93 natural products retailers are privately-held companies like New Seasons Market is. As such, they aren't required to publicly disclose annual sales and profit information, which the Whole Foods subpoena calls for.

But the subpoena calls for far more than this data. It also demands the retailers locate, make copies of, and submit to Whole Foods' any internal company e-mails that might discuss competitive issues as they relate to Whole Foods Market, Inc. in each of the 93 retailers' respective markets.

In addition, the Whole Foods' subpoena demands the retailers disclose in writing their respective strategic plans, including any new stores they plan to open in the next few years.

Whole Foods says obtaining this information is essential in order for it to demonstrate that a combined Whole Foods-Wild Oats is not a monopoly in any U.S. Market.

Late last week, New Seasons Market CEO Brian Rohter indicated the natural foods grocer might have something more up its sleeve in terms of continuing to fight the demands made in the subpoena.

We should know tomorrow. Stay tuned.

Reader Resources

FTC v. Whole Foods Market - Whole Foods Market v. FTC: Recent coverage and analysis in Natural~Specialty Foods Memo (NSFM):

December 24, 2008: Christmas Eve Memo 2008: 'Twas the Night Before Christmas' - FTC v. Whole Foods Market, Inc. Version....December 24, 2008: Independent Grocer Memo: From Mrs. Gooch's to the Auto Body Business, Then Back to Retail, Chris Kysar is On A Healthy Organic Foods Retailing Roll....December 24, 2008: Retail Memo: It's 'Deja Vu All Over Again' - Judge Paul Friedman to Whole Foods Market, FTC: 'What's My Role Here?'....December 23, 2008: Retail Memo: FTC Postpones Scheduled February 16 Administrative Hearing on Whole Foods-Wild Oats Deal Break-Up Until April 6, 2009....December 23, 2008: Independent Grocer Memo: National Grocers' Association Asks President-Elect Obama to Look Out For Independent Grocers When He takes Office in January....

December 22, 2008: Retail Memo: Only Slightly More Than Half the 93 Natural Foods Retailers Issued Subpoenas By Whole Foods in its Case against the FTC Have Complied.... December 22, 2008: Retail Memo: Whole Foods Market Wants to Depose and Obtain Internal E-Mails From FTC Commissioner, Suggesting Possible Conflict of Interest Situation....December 22, 2008: Retail Memo: At Hearing Today Judge Tells FTC to Provide Road Map of How Whole Foods Could Take About Merged Companies Should Ruling Go In its Favor....

December 19, 2008: Retail Memo: Whole Foods' Lobbying Effort Baring More Fruit - House Committee Leaders Send Letter to FTC Chair Similar to One Sent By Senate Leaders.... December 18, 2008: Retail Memo: 'This Isn't Over Yet' - New Seasons Market CEO On Judge's Decision the Natural Gorcer Must Turn Over Trade Secrets to Whole Foods Market.... December 18, 2008: Retail Memo: The 'Whole Primary Source Scoop' -- FTC and U.S. Federal Court Documents on the FTC v. Whole Foods Market, Inc. Case....

December 17, 2008: Breaking News: Judge Orders New Seasons Market to Comply With Whole Foods' Subpoena and Submit Sales Data, Financial Records and Other Trade Secrets....December 16, 2008: Retail Memo: Whole Foods, Wild Oats and Boulder, CO...And the Rocky Mountain News' Editorial Take On FTC v. Whole Foods Market, Inc....December, 15, 2008: Retail Memo: Eight Members of U.S. Senate Judiciary Committee Send Letter to FTC Chairman Regarding FTC's Legal Case Against Wild Oats' Acquisition....December, 13, 2008: Retail Memo - Analysis & Commentary: More On FTC v. Whole Foods Market, Inc. and Whole Foods Market, Inc. v. FTC....

December 9, 2008: Organics Category Memo: Wither Organics? Organic Food & Grocery Category Sales Down; But Double-Digit Growth Still Likley With Mass Market Lift....December 9, 2008: Retail Memo: Whole Foods Markets' 'Whole Legal Paycheck:' Three Top Washington, D.C. Law Firms Teaming Up On The Natural Grocery Chain's FTC Lawsuit....December 9, 2008: Retail Memo: Whole Foods Market CEO John Mackey and Team Launch First Aggressive Attack Against the FTC's Legal Case at Press Conference This Morning....December 8, 2008: Retail Memo: Mr. Mackey (and the Whole Foods Market Troops) Goes to Washington....

December 8, 2008: Retail Memo: Breaking News - Whole Foods Market, Inc. Files Lawsuit Against the FTC; Argues the Regulator Violated the Company's Due Process Rights....December 7, 2008: Retail Memo: New Seasons Market CEO Brian Rohter and Whole Foods Market Co-President Walter Robb Discuss and Debate the Subpoena Issue Online....December 7, 2008: Retail Memo: New Seasons Market CEO Brian Rohter Speaks Out Again Today on the Whole Foods Market, Inc. Subpoena of His Company's Data....December 7, 2008:Retail Memo: Whole Foods Market Retains Top Washington D.C. lawyers and Politically-Connected Lobbyists to Plead its Case Against the FTC....

December 6, 2008: Retail Memo: Fast-Growing and Scrappy Sunflower Farmers Market Ventures Deep in the Heart of (Whole Foods Country) Texas....December 6, 2008: Retail Memo: Fast-Growing NF Chain Sunflower Farmers Market Responds to Whole Foods Market, Inc. Subpoena For Sales, Financial and Related Information....December 3, 2008: Retail Memo: More on the Whole Foods Market-New Seasons Market Subpoena Issue; FTC Holding Firm For February, 2009 Hearing....December 2, 2008: Retail Memo: Whole Foods Market, Inc. Closes $425 Sale of Stock to Private Equity Firm; Adds Members of the Firm to its Board of Directors....

December 2, 2008: Retail Memo: Portland, Oregon-Based New Seasons Market CEO Brian Rohter Responds to Whole Foods Market's Paige Brady....December 2, 2008: Retail Memo: Whole Foods' Paige Brady Responds to Yesterday's New Seasons Market Piece; Lots of E-Mails; Issue Heats Up On the New Seasons Market Blog....December 1, 2008: Retail Memo: Whole Foods Wants A Court-Mandated Financial Records Dump from Portland-based New Seasons Market; it Says For its Battle Against the FTC.

FTC v. Whole Foods - Linkage from the Natural~Specialty Foods Memo archives:

Click here, here and here for stories about the FTC-Whole Foods issue from our archives, including pieces about mass market and natural foods class of trade retail competitors.

Saturday, December 27, 2008

Supply-Side Memo: 'Look What We Found' Sounds Like an Odd Name For A Line of Premium, Prepared Foods; But Read On; It Makes Perfect Sense

British food industry entrepreneur Roger Mckechnie had combined a unique recipe of ingredients -- premium and gourmet, natural, gluten-free, locally-produced, wild-foraged and the use of game meats-- into the creation of his 'Look What We Found' brand of prepared foods, which include ready-meals, soups and sauces at present. Annual sales are £6-million and growing. [Photo Credit: Katie Lee/Sunday Times of London.]

What others are writing: From the Sunday Times of London

Roger Mckechnie had spent most of his career working for the storied British food company United Biscuits, working his way up from a marketing manager for the company to the chief executive of its popular Smith's Crisps' brand.

Born, raised and educated in Northumberland, England, Mckechinie was happy to be able to remain nearby in his job running the Smith's Crisps brand for United Biscuits. However, as often is the case, especially when one performs well, United Biscuits had bigger ideas for the northern England native, and told him they wanted him to move to the south for the company.

He wanted to stay put, despite the fact United Biscuits' told him if he didn't move he would be out of a job in six months, according to a profile of the food industry entrepreneur in tomorrow's Sunday Times of London.

Mckechnie stayed put and left the corporate world to start Derwent Valley Foods, which produced the popular Phileas Fogg tortilla chips in the United Kingdom. Ten years later the corporate food industry executive-turned-entrepreneur sold the company for £24-million (pounds) to none other than his former employer, United Biscuits.

"It was the right time to sell it," he says in the Sunday Times' profile piece. "Once it got to the point where I was employing huge numbers of people and there were politics and organisational issues, I started to lose interest. I'm more of a creative independent."

The "creative independent" bought an old country house, which he converted into an award-winning boutique hotel, after selling Derwent Valley Foods. 'Starting to feel this guy's Midas touch? like we are.'

But the food business remained in the entrepreneur's blood. So in 1999 he went back into the food industry in the UK as a consultant to Northumbria Larder, a group of 60 meat, cheese and game producers.

It's taken the entrepreneur a few years since then to figure out his next new big thing. However, Mckechnie, who went on to launch his current food company, Tanfield Foods in association with these UK meat, game and cheese producers, thinks he's now on to it with his Look What We Found brand of ready-meals (just heat and eat), which feature such interesting varieties as: Herdwick Mutton Stew with Pearl Barley and Root Vegetables; Gloucester Old Spot Pork Meatballs with Butter Beans in a Rich Tomato Sauce; Wild Rabbit in Leek & Elderflower Sauce with Camargue Red Rice; Mushroom Stroganoff with hand-picked Scottish Mushrooms, and a number of other varieties you can view here.

In addition to the line of Look What We Found brand premium ready-meals, the company also markets a line of gourmet soups under the brand name. Some of the varieties in the prepared soup product line are: Country Cured Ham in Delicious Pea Soup, Tweedside Honey in English Parsnip Soup, English Tomato Soup with Cheviot Cheese Pesto and others.

Lastly, the company produces a gourmet sauce line under the brand, which you can view here.
The soups and sauces all are gluten-free and are made using locally-produced (in the UK), premium ingredients.

Most of the upscale ready-meals also are gluten-free. They too feature locally-produced fresh meats and produce and other ingredients; items like locally-foraged wild mushrooms and local dairy products are used in them as well.

You can read the interesting profile by Rose Gamble in the London Times here.

You can view the Look What We Found Web site here.

Wednesday, December 24, 2008

Christmas Eve Memo 2008: 'Twas the Night Before Christmas' - FTC v. Whole Foods Market, Inc. Version

Pictured above: Whole Foods Market, Inc.'s corporate headquarters in Austin, Texas, on a day without snow.

'Twas the night before Christmas, when all through the house of Whole Foods, not an employee was stirring, not even the CFO's organic whole grain-fed mouse;

The organic cotton fair trade stockings were hung all along the receptionist's counter with care, In hopes that St. Judge Paul Friedman soon would be there;

CEO John Mackey and co-president Walter Robb were nestled all snug in their corner offices, while visions of full dismissal of the FTC case danced in their heads;

And head legal counsel Lanny Davis in his high thread-count artisan hand-made kerchief and co-counsel Paul Denis in his Whole Foods store brand knit cap; had just settled their brains in the conference room from a week-long cold legal snap;

When out in the office complex parking lot arose such a clatter, I (John Mackey) sprang from my locally-made sustainable bamboo desk chair to see what was the matter.

Away to the office lobby window I flew like a flash, tore open the recycled-wood shutters and threw up the green-certified sash.

The moon on the beast of the new fallen snow (snow in Texas, what global warming?) gave a luster of midday to objects below;

When, what to my wondering eyes should appear, But a miniature sleigh and two grown men and a woman dressed as reindeer;

With a serious-faced driver, so determined looking and slick, I knew in a minute it must be ... FTC Commissioner J. Thomas Rosch. [Click here.]

More rapid than eagles his coursers they came, and he whistled and shouted and called them by name;

'Now Commissioner Kovacic!, now Commissioner Jones Harbour!, and Commissioner Leibowitz! all.

To the top of the Austin corporate headquarters building, to the top of the wall! Now dash away, dash away, dash away all!'

As dry leaves that before the wild hurricane fly, When they meet with an obstacle, mount to the sky;

So up to the building-top the coursers they flew, with the sleigh full of injunctions, subpoenas and writs, And a bound and blindfolded Judge Paul Friedman too.

And then in a twinkling I heard on the roof The prancing and pawing of each Gucci-clad hoof.

As I drew in my head and was turning around, Down the lobby chimney (made of 100% reclaimed brick) FTC Commissioner Rosch came, holding Judge Friedman who was blindfolded and bound;

Rosch was dressed all in non-sustainable fur from his head to his foot, and his non-organic cotton and wool clothes were all tarnished with ashes and soot;

A bundle of legal injunctions, subpoenas and more he had flung on his back, And he looked like a peddler just opening his pack.

His eyes how they twinkled! his dimples how merry! His look was so steely, his nose like a cherry;

His droll little mouth was drawn up like a bow, And the synthetic fake beard (no doubt made in China) on his chin was as white as the snow.

The stump of a pipe he held tight in his teeth, And the smoke it encircled his swell head like a wreath.

He had a broad face and a bit of a belly (no organic eater he) That shook, when he strutted, like a bowl full of discount supermarket store brand jelly.

He was chubby and plump, a right jolly old FTC Commissioner, and I laughed when I saw him (remembering we asked Judge Friedman for Rosch's e-mails), in spite of myself -- Rahodeb.

The steel in his eyes and the turn of his head Soon gave me know I had much to dread.

He said not a word, but went straight to work, and filled the stocking marked John Mackey with injunctions, supoenas and writ after writ; then turned with a jerk.

And laying his finger aside his nose, And giving a nod, he grabbed blindfolded and bound Judge Friedman, and up the LEED Platinum-certified lobby chimney they rose.

Commissioner Rosch sprang to his sleigh, to his team gave a whistle, and away they all flew like the down of a thistle.

But I heard him exclaim, ere he drove out of sight, 'Happy Christmas to all, except to the other side in this fight!'"

-With apologies to Clement C. Moore

[Copyright, December 24, 2008: Natural~Specialty Foods Memo-NSFM]

[Click here for a bibliography of recent coverage in NSFM of the FTC-Whole Foods issue. Scroll to the bottom at the linked page. For readers not familar with FTC v. Whole Foods, the posts in the linked bibliography offer a roadmap.]

Christmas Eve 2008 Memo: 'A Visit From St. Nicholas - 'Twas the Night Before Christmas'


"Twas the night before Christmas, when all through the house, Not a creature was stirring, not even a mouse;

The stockings were hung by the chimney with care, In hopes that St. Nicholas soon would be there;

The Children were nestled all snug in their beds, While visions of sugar-plums danced in their heads;

And mama in her kerchief, and I in my cap, Had just settled our brains for a long winter's nap,

When out on the lawn there arose such a clatter, I sprang from my bed to see what was the matter.

Away to the window I flew like a flash, Tore open the shutters and threw up the sash.

The moon on the breast of the new fallen snow Gave a luster of midday to objects below;

When, what to my wondering eyes should appear, But a miniature sleigh and eight tiny reindeer,

With a little old driver, so lively and quick I knew in a moment it must be St. Nick.

More rapid than eagles his coursers they came, and he whistled and shouted, and called them by name;

'Now, Dasher! now, Dancer! now, Prancer! and Vixen! On Comet! on, Cupid! on, Donder! and Blitzen!

'To the top of the porch, to the top of the wall! Now dash away, dash away, dash away all!'

As dry leaves that before the wild hurricane fly, When they meet with an obstacle, mount to the sky,

So up to the house-top the coursers they flew, With the sleigh full of toys, and St. Nicholas too.

And then in a twinkling I heard on the roof The prancing and pawing of each little hoof.

As I drew in my head and was turning around, Down the chimney St. Nicholas came with a bound.

He was dressed all in fur from his head to his foot, And his clothes were all tarnished with ashes and soot;

A bundle of toys he had flung on his back, And he looked like a peddler just opening his pack.

His eyes how they twinkled! his dimples how merry! His cheeks were like roses, his nose like a cherry;

His droll little mouth was drawn up like a bow, And the beard on his chin was as white as the snow.

The stump of a pipe he held tight in his teeth, And the smoke it encircled his head like a wreath.

He had a broad face and a little round belly That shook, when he laughed, like a bowl full of jelly.

He was chubby and plump, a right jolly old elf, And I laughed, when I saw him, in spite of myself.

A wink of his eye and a twist of his head Soon gave me to know I had nothing to dread.

He spoke not a word, but went straight to his work And filled all the stockings; then turned with a jerk.

And laying his finger aside of his nose, And giving a nod, up the chimney he rose.

He sprang to his sleigh, to his team gave a whistle, And away they all flew like the down of thistle.

But I heard him exclaim, ere he drove out of sight, 'Happy Christmas to all, and to all a good night!'"

-By: Clement C. Moore

Independent Grocer Memo: From Mrs. Gooch's to the Auto Body Business, Then Back to Retail, Chris Kysar is On A Healthy Organic Foods Retailing Roll

Natural-Organic Foods Retailing USA

One of the early and most successful natural and organic food retailing pioneers was Southern California-based Mrs. Gooch's Natural Foods Market, which started with one store founded by a former teacher who suffered from food allergies. She became frustrated about not being able to find the types of chemical-free and additive-free "clean" and healthy foods she needed as a shopper in other natural food stores, so started her own -- Mrs. Gooch's.

Over a number of years, Mrs. Gooch's grew into a multi-store natural and organic foods mini-chain in Southern California. In 1993 it was acquired by Whole Foods Market, Inc., which at that time was a fairly small, fledgling natural foods retailer itself. In fact, the acquisition of Mrs. Gooch's really was the start of Whole Foods' rapid expansion program, which finds it today with about 280 stores and $8 billion in annual sales, as well as being the subject of an antitrust legal case by the FTC regarding its acquisition last year of Wild Oats Market, Inc.

From 1983 -to- 1992 Chris Kysar was the director of purchasing for the original, pre-Whole Foods acquired Mrs. Gooch's Natural Foods Market chain.

After that, Kysar (pictured at left) made a career change, opening up his own auto body shop. But natural and organic foods retailing was still in his blood, so he closed the body shop and took a job as a bagger at a natural foods store, starting back at the bottom of the healthy foods chain, so to speak.

He then moved to Sonoma, in Northern California, where he operated his own natural foods store for five years, until it burned down in 2000.

In 2001, Kysar heard about a small natural foods store, Earth Song, for sale in the small Gold Rush city of Nevada City, which is not far from Sacramento. He bought the store in August, 2001.

After operating Earth Song for about a year as it was, Kysar changed the store's name to California Organics in 2002 and began converting the store's product mix to 100% organic food items and to near 100% other organic products.

Today the store boasts of having the only 100% certified organic service meat counter in the nation. All of the fresh produce sold in the store is organic and is certified by a third-party inspection and testing firm as being so.

Additionally, California Organics' in-store grill and prepared foods operation (which includes eating inside the market) uses 100% organic ingredients for its made-from-scratch meals, side dishes and desserts.

The independent natural-organic grocer has operated California Organics successfully since 2001, incorporating many of the ideas and the buying and merchandising experience he gained all those years heading up purchasing for Mrs. Gooch's, along with applying the single-store entrepreneurial skills he developed operating his store in Sonoma, growing the business significantly.

Kysar's grown the business at California Organics so much in fact that he's ran out of room, and wants not only a bigger but a more visible location for the independent organic foods market.

And the organic products grocer has big plans to do just that. Those plans start with relocating the store into a much larger building, a former furniture store in the city, which he plans to remodel and have open by the middle of next year.

The Union newspaper, which serves the Nevada City area, has a profile today about Chris Kysar and his California Organics independent organic foods market.

Read the profile, "California Organics looks to expand on Broad Street," here.

Chris Kysar and his California Organics market is another example of how numerous independent grocers of all formats -- be they natural-organic, upscale, specialty or discount -- find a niche in the U.S. food and grocery retailing industry and not only survive but thrive against the giant chain operators. It's all about combining the fundamentals of food retailing with the creation of points of differentiation, and then executing each and every day.

[Photo credit: John Hart/The Union]

Retail Memo: It's 'Deja Vu All Over Again' - Judge Paul Friedman to Whole Foods Market, FTC: 'What's My Role Here?'


FTC v. Whole Foods Market - Whole Foods Market v. FTC

In this December 22 story [Retail Memo: Whole Foods Market Wants to Depose and Obtain Internal E-Mails From FTC Commissioner, Suggesting Possible Conflict of Interest Situation] about the FTC v. Whole Foods Market, Inc. antitrust case and the related Whole Foods Market, Inc. v. FTC counter lawsuit hearing this week in the U.S. Federal Court for the District of Columbia courtroom of Judge Paul Friedman (pictured at top), we commented:

"Something tells us Judge Friedman is less than happy to have the case back in his courtroom. However, he signaled today he plans to give the deal complete new consideration in terms of the anti-competitive arguments from the FTC, saying at the hearing that the appeals court wouldn't have sent the case back to him unless it thought doing so was valid."

This comment has to do with the fact that Judge Friedman is the federal jurist who heard the original FTC v. Whole Foods Market, Inc. case last year in which the federal regulatory agency filed a legal claim opposing Whole Foods' acquisition of Wild Oats on antitrust grounds, claiming (as it still is) that a combined Whole Foods-Wild Oats is a monopoly in numerous U.S. markets in what the FTC calls the 'premium natural and organic retailing segment."

After numerous back-and-forth legal motions and hearings, Judge Friedman ended up ruling in Whole Foods' favor and against the FTC, giving the natural foods grocery chain the green light to go forward with the merger and integrate Wild Oats into its operations and culture, including changing the Wild Oats' banner stores over to the Whole Foods brand.

The FTC reopened its administrative case against the deal this year though, as federal regulations allow it to do. It then appealed Judge Friedman's ruling in favor of the merger to a federal appeals court, which ended up ruling in favor of the FTC and sending the 'whole matter' back to Judge Friedman.

As we've reported, the FTC also has set an administrative trial before an FTC Administrative Law Judge, first for February, 2009 and now postponing it until April 6 of next year. At that hearing or administrative trial, the Administrative Law Judge will make a ruling on the merger, either that it can remain a done deal or that it should be overturned. If the ruling goes against it, Whole Foods can appeal to a federal court.

Meanwhile, since the matter is now back before Judge Friedman, he also will rule on the deal -- once again.

For the judge it's, as we wrote yesterday in this piece [Retail Memo: FTC Postpones Scheduled February 16 Administrative Hearing on Whole Foods-Wild Oats Deal Break-Up Until April 6, 2009], in the words of Yogi Berra, deja vu all over again.

The fact is, Judge Friedman thought he had obtained a couple of legal careers' worth of premium organic category and segment talk, whole grain and oats' (wild or otherwise) debates, and whole rather than partially-whole foods' retailing written and oral arguments as it all pertains to natural and healthy foods retailing in America. But like baseball great and sidewalk philosopher Yogi Berra also has said: "It's not over until it's over."

The Legal Times legal publication appears to agree with Natural~Specialty Foods Memo's analysis of Judge Friedman and his return to the world of natural and organic food retailing merger and acquisition debate in the form of FTC v. Whole Foods Market, Inc. 2.0 and now Whole Foods Market, Inc. v. FTC, "The Lawsuit."

In a piece in its Blog published yesterday titled: "Judge to Whole Foods, FTC: What's My Role Here?, written by Mike Scarcella, the writer describes a scene in Judge Friedman's courtroom at the first status hearing on Monday, December 22. Below (in italics) is the writer's post from the BLT (Blog of the Legal Times):

Judge to Whole Foods, FTC: What's My Role Here?
Blog of the Legal Times (BLT)
By Mike Scarcella
December 23, 2008

There was a homecoming of sorts in the D.C. courtroom of U.S. District Judge Paul Friedman this week when lawyers for Whole Foods and the Federal Trade Commission gathered together for the first time in court in a long time. The BLT did not note any hugs.

The saga of the Whole Foods antitrust dispute with the FTC is long and complicated, and somewhere in the middle—or perhaps on one side—is Friedman (pictured at left). Friedman ruled against the FTC effort to block the merger between Whole Foods and Wild Oats. The companies merged in a $565 million deal in August 2007.

But Friedman’s decision was reversed on appeal this year in a rare 1-1-1 vote by Judges Janice Rogers Brown, David Tatel, and Brett Kavanaugh of the U.S. Court of Appeals for the D.C. Circuit. Brown and Tatel voted for remand. And so the lawyers met again before Friedman.

“It is truly a pleasure to see you again,” Matthew Reilly of the FTC’s Bureau of Competition told Friedman. “I’m much happier to see you than Judge Brown or Judge Tatel,” responded Friedman, drawing laughter from the more than two dozen people at the hearing.

Dechert partners Paul Denis and Paul Friedman (not the judge) were among the lawyers representing Whole Foods, which is now defending the merger in federal court and at the FTC. An FTC administrative trial is set for next year.

Lanny Davis of Orrick, Herrington & Sutcliffe was there, too. Davis, also representing Whole Foods, is fighting the FTC in court in a suit that alleges the FTC is biased and should be barred from holding the administrative trial. In the suit filed this month, Davis says the FTC has prejudged the merits of the merger and that Whole Foods won’t find impartiality at the FTC. The complaint is also before Judge Friedman; government lawyers have filed a motion to dismiss.

At the status conference Monday, Judge Friedman said he would hold a subsequent hearing on the government's motion to dismiss. Simple enough. The more complex issue discussed at the hearing was the scope of the remand proceedings. Friedman and the lawyers struggled over what is expected from the judge.
Judge Friedman compared the D.C. Circuit split opinion to the Supreme Court’s decision in 2000 in Bush v. Gore. The appellate court opinion, Friedman said, “doesn’t stand for anything” because there is no clear majority.

Friedman asked Whole Foods’ lawyers and the FTC to write up briefs—no more than eight pages—telling him how he should interpret the D.C. Circuit opinion. “My gut reaction is that it requires me to read these two opinions a couple more times,” Friedman said. Friedman will issue an opinion articulating his role in the remand proceedings.

Not to take the quoting business too far (we hope readers will allow us just one more) but Natural~Specialty Foods Memo is reminded of just one more quote. This one is from the late comedian Flip Wilson, and it is his signature line, which is -- "Here Come Da Judge."

Stay tuned.

Tuesday, December 23, 2008

Retail Memo - Specialty Foods: Balducci's Creates Some Value On the High-End With 'Balducci's Own' Specialty Store Brand, Now Including Caviar

Pictured above: The Balducci's store in Manhattan's Chelsea neighborhood, one of the 10 upscale specialty and epicurean foods markets operated by the gourmet grocer. The Chelsea Balducci's is an urban store. The specialty foods retailer's store's in other places like Maryland and Virginia has a more suburban look to them however.

Upscale Food Retailing in the Recession: Let Them Eat (Balducci's Own Store Brand) Caviar

Bethesda, Maryland USA-based specialty and epicurean foods retailer Balducci's is sticking a gold-plated fork in the eye of the current economic recession as well as adapting in its own unique way by creating a value proposition around its Balducci's Own store brand specialty and gourmet products, which now includes caviar.

The storied specialty foods retailer, which has survived many an economic recession, has introduced a line of caviar under its own store brand -- the "Balducci's Own Brand."

"In this economy, Americans everywhere are scaling back on their holiday menus," says John Coleman, Balducci's wine, cheese and coffee merchant. "However, many party planners, food connoisseurs and epicureans alike are still looking for ways to enjoy their annual holiday luxuries."

There you go. Balducci's is a perfect example of what we've been saying -- that regardless of format or income-level consumer catered to, retailers must create their own unique value propositions in this serious economic recession.

Granted, this is an interesting and rather high-end value proposition in general. But that's Balducci's niche, and always has been. But even the wealthy can use a little relief, even when it comes to caviar prices.

The most value-priced Balducci's Own brand caviar is Farmed California White Sturgeon. It retails for $55 to $299 per ounce through New Year's Day. The caviar regularly goes for $80-$475 per ounce, according to John Coleman.

The caviar comes in three different types: Wild Caspian, which comprises the Sevruga ($199-$1,175 per ounce) and Royal Osetra ($249-$1,500 per ounce) varieties; Farmed International, which consists of the Farmed California White Sturgeon and the first true Russian Sturgeon to be successfully cultivated in Germany for the production of genuine Osetra caviar ($120-$725 per ounce); and Domestic, which consists of salmon caviar from Alaska and paddlefish caviar from the Tennessee and Mississippi rivers (($9.99-$29.99 per ounce and $35-$199 per ounce, respectively).

"With the new line of Balducci's Own caviar, you can still indulge, and very often under $100," says Coleman. "And with the Balducci's brand, you can rest assured that you are getting -- or giving -- the highest in quality."

The 10-store specialty and epicurean foods retailer has been beefing up its Balducci's Own store brand over the last year. The line includes numerous varieties of products in the cracker, cookie, oil, vinegars, condiment, coffee, sauces and others categories. All are priced below comparable domestic and imported manufacturers' specialty and gourmet brands.

Balducci's also offers a second store brand line -- Balducci's Premium -- which offers numerous epicurean food and grocery items across numerous categories. It's priced higher than its Balducci's Own brand.

In addition to operating 10 specialty-gourmet foods markets on the east coast, Balducci's has a significant online shopping and mail order delivery business via its Web site here.

The Balducci's stores are smaller-sized markets but are packed full of fresh and shelf-stable specialty food and grocery products across all categories, including fresh produce, meats, deli-prepared foods, dairy and grocery. The are best described as neighborhood-sized stores packed to the ceiling with specialty foods of all types, in an upscale setting.