Monday, June 30, 2008

Food Product Development Guest Memo: Taste Is On the Agenda For Military Meals Ready To Eat

Finding a way to a soldier's heart through chipotle chicken. Next challenge: eggs.
By Tom A. Peter Staff writer of The Christian Science Monitor
Natick, Mass. - Like any chef, Jeanette Kennedy's pallet has become so refined over the years that, given any dish, she can single out virtually every ingredient – the pinch of black pepper, the hint of oregano, or the vegetable oil subbing for olive oil. [Ms. Kennedy is pictured above working in her Natick, Mass., USA military base test kitchen.]
On a recent morning she was testing a slab of pound cake, her face blank as she silenced her other senses and focused on taste and texture.
After a good long chew, Ms. Kennedy spit the cake into a paper cup – an indelicacy that was not a comment on the cake (which she deemed pretty good), but the result of a high calorie occupational hazard. This pound cake is no tea party trifle; it's combat cuisine – part of an MRE, Meal Ready to Eat – designed to fuel soldiers lugging 100-pound packs all day.
A food technologist at the US Army Natick Soldier Systems Center (NSSC) west of Boston, Kennedy faces creative challenges unlike those before any other chef. Meals can't just taste good; they've got to last ... for three years stored at 80 degrees F., be capable of withstanding chemical or biological attacks, and survive a 10-story free fall (when packed in a crate of 12).
In this world, making something as seemingly simple as a sandwich earns a food technologist rock star status, even if only within the confines of the lab.
• • •
Ask anyone who has worn a US military uniform and they'll have an opinion about rations. MREs – the name given to the rations first served in the 1980s when canned fare gave way to meals packed in sturdy beige pouches – have nicknames that pretty much sum up what many troops think: Meals Rejected by the Enemy, Meals Rarely Edible, and Meals Refusing to Exit (a name that continues to stick despite the addition of more fiber).
"You go into [your first MRE] with a preconceived notion, just from what you've heard from either your instructors or other people that you're in training with, that they're not good," says Jeremy Whitsitt, a former Army soldier and now program outreach coordinator at NSSC. "But I think a lot of that has to do with the early days of the MRE, and just with military rations in general. Over time they've kind of developed a bad reputation, because for a long period of time we weren't customer focused."
Considering the difficulties of the durability requirements, it's easy to see how taste and customer satisfaction were low priorities. The only reason MREs aren't supposed to be consumed after three years is because science hasn't found a way to stop the deterioration of taste. But technically – if not gustatorially – they're still edible long after the expiration date.
But, Jill St. Jean, who ate a 6- or 7-year-old MRE beef patty during her training to become a certified MRE taste test evaluator at NSSC, admits, "That one pretty much tasted like dog food smells."
In years past, the canned C-rations that served the military from World War II through Vietnam actually looked a lot like wet dog food, which is also how many soldiers remember the taste. But these rations came from a very different time, an era when cigarettes were still standard issue.
Today, troop acceptance of the meals, which cost the military $7.13 each, has taken center stage. Back in 1982 when MREs debuted, designers assumed they could hang up their aprons. But when the first Gulf War broke out, the new ration moved from limited training use to the only food soldiers ate for months on end. Angry letters flooded in from the trenches, and the military realized that rations had to be a work in progress.
Now food technologists conduct focus groups with troops across the country, follow restaurant fads, and even attend culinary school to make sure their approach isn't entirely scientific.
"[MREs] really go along with the trends," says Kennedy. "As new things come out at restaurants, new flavors like chipotle or buffalo [get popular], they get incorporated into the MRE.... The trend [now is] going to more comfort foods like Salisbury steak, beef briquette, but it's not just macaroni and cheese, it's Mexican macaroni and cheese."
Just as in the first Gulf War, when NSSC misses the mark today, soldiers in the field let them know. After living off nothing but MREs for 45 days in Afghanistan, Spc. Colin Hankinson wrote a letter that included samples of packaging from Canadian rations that offered troops customer feedback cards with every meal
He also suggested that MRE designers "expunge" Cinnamon Imperial candies from the ration. "They are not satisfying to eat or useful to trade," explains Specialist Hankinson. "During the past 45-day mission, the primary consumers of Cinnamon Imperials were Afghan children and the burn pit."
Since 1993, NSSC has tried to avoid letters like Hankinson's by creating more than 189 new MRE menu items, almost 12 per year.
• • •
The kitchen lab where Kennedy and a number of other food technologists whip up the latest MRE dishes resembles a cross between a school cafeteria kitchen and a third world operating room. There are walk-in freezers, multiple meat slicers, a retorting machine bigger than a mid-size car, and lab coats and hair nets (for both head and facial hair) are required.
It was in this kitchen that Kennedy dreamed up what she considers her tastiest creation: a spicy vegetarian penne pasta. Mixed with a soy-based, non-meat sausage crumble, the pasta is covered with a zesty sauce that Kennedy says has "kick."
Asked to describe the inspiration for the penne platoon-pleaser, she ponders a moment before responding, "Well, I can't really say there was an inspiration."
Quite simply, she was under military orders to create a new vegetarian dinner with a protein source. Beyond that, she was like Michelangelo with a chisel and a slab of marble, limited only by her imagination.
The new emphasis on customer satisfaction has made it an exciting time to be a food technologist. In many ways, it's even led to rethinking the MRE.
Take the new First Strike Ration (FSR) for example. It's meant to provide service men and women with snacks throughout the day that add up to the equivalent of three square MREs. Since the FSR is intended for soldiers on the march, and not in a position to easily prepare food, it was what ultimately inspired the creation of the three-year sandwich – currently barbecue beef or chicken and Italian sausage, among others.
Though it might seem a minor innovation, for food technologists it was a breakthrough. Previously, finding a way to stop wet ingredients like BBQ sauce smothered chicken from seeping into the bread was impossible. But through tinkering with chemicals in the wet center. they managed a long-life rendition of a sandwich resembling a Pop-Tart).
After clearing the sandwich hurdle, Michelle Richardson, a food technologist for 19 years, looks forward to overcoming the next MRE conquest: eggs.
"Now I'm trying to give [troops] a breakfast burrito, the same thing you can get at McDonald's but doesn't require any refrigeration and is shelf stable for two years," she says. "Egg is really kind of difficult [to preserve], but that's OK. I like a challenge and I don't get bored."

Sunday, June 29, 2008

Sunday Roundup Memo: A Weekend Roundup of News, Features and Information for Your Weekend Reading

Ethical Foods Memo: The United Kingdom's Times Online is reporting today the animal rights group Peta is trading in its campaign against celebrities who wear fur and going after the whole animal so to speak, as well as now being able to target both genders equally--or at least those male celebrities who don't normally wear fur who might have been left out in the earlier campaign.

Peta is beginning to target high-profile celebrities in the U.S. and UK who eat meat, going after them for their meat-eating ways in a manner similar to how the animal rights advocacy group has conducted its anti fur-wearing campaign for the last few years. One of the first celebrities in Peta's sights is the singer and sometime actress Jessica Simpson. Read the piece, "Animal rights group turns its fire on celebrity meat-eaters," from today's Times Online here.

Retail Memo: Speaking of United Kingdom-United States' connection, including animal welfare issues, Tesco PLC, the UK's largest retailer and the third-largest retail company in the world, held its 2008 Annual General Meeting (AGM) on Friday afternoon in the UK. Tesco owns the fast-growing Fresh & Easy Neighborhood Market small-format food and grocery chain which currently has 61 stores in California, Arizona and Nevada, in the U.S. and will open 30 more stores in the next 90 days in these same states.

The AGM on Friday featured a vocal cast of Tesco critics, numerous activist groups, and even lots of shareholders. Among those activist groups were a coalition of animal welfare groups lead by popular British celebrity chef and animal welfare activist Hugh Fearnley-Whittingstall, who hosts a popular TV cooking program in the UK from his River Cottage farm. The chef and activist launched a shareholder resolution at this year's annual meeting, which if it had passed (it didn't) would have changed Tesco's chicken selling policy, limiting the number of small or battery cage-raised chickens it could sell, in favor of forcing the retailer to sell more free-range birds in its UK stores.

Numerous other activist groups attended the annual meeting on Friday. These included: a group protesting what it says is Tesco's practice of paying at one of its clothing factories in India sub-minimum wages; a group protesting Tesco's treatment of live turtles in its stores in China; the U.S. United Food and Commercial Workers union (UFCW), which has launched a campaign in both the U.S. and the UK designed to get Tesco executives to meet with union leaders about unionizing the retailer's Fresh & Easy grocery stores in the U.S.; and others.

The blog Fresh & Easy Buzz, which covers Tesco and its Fresh & Easy Neighborhood Market chain in the U.S. in-depth, has a piece today about the Tesco annual meeting on Friday. The piece includes numerous links to stories published about the AGM in a variety of UK publications as well. Read the Fresh & Easy Buzz piece here.

Prepared Foods Memo: Florida's Palm Beach Post has a story today that suggests despite the soaring cost of food in the U.S., supermarkets and natural foods stores are still seeing strong sales in the fresh, prepared foods category. Retailers and others quoted in the piece attribute this to consumers eating out at restaurants far less than they were just a year ago and spending their prepared foods' dollars at supermarkets instead. As a result, although many consumers are cutting back on the overall quantity of prepared foods they purchase, supermarket sales are benefiting from a shift in those purchases from restaurants to in-store prepared foods departments.

Food retailers also are aiding category sales by offering more value-oriented prepared foods items and holding the line on prices for the ready-to-eat and ready-to-heat items. Read the story from Today's Palm Beach Post here.

Specialty Foods Memo: The Superbowl of specialty and gourmet food shows (with lots of natural and organic products included), the National Association for the Specialty Food Trade's (NASFT) annual Summer Fancy Food Show, starts today at the Javits Convention center in New York City. Despite the global economic slowdown, which has hit specialty foods producers and marketers fairly hard with soaring fuel costs and high food inflation, NASFT says this year's summer show will be its biggest ever. The show runs through Tuesday. To read more about this year's fancy food show go to Also learn more at:

Slow Foods Memo: The return of the victory garden to be part of Slow Foods Nation's big August 29 -to- September 2 conference and food festival in San Francisco, California.

Starting July 1, Slow Food Nation will herald the end of urban food deserts with the creation of an ornamental edible garden in the heart of San Francisco’s Civic Center. The garden will be part of Slow Food Nation's transformation of the Civic Center into a Slow Food Marketplace during the event. The artist's rendering above depicts what the Civic Center Slow Food Marketplace will look like.

Created in collaboration with Victory Gardens 2008+, the Victory Garden project takes its name from 20th Century wartime efforts to address food shortages by encouraging citizens to plant gardens on public and private land. In the early 1940s, gardens sprouted in front yards and vacant lots throughout the United States, and produced 40 percent of the nation’s vegetables.

San Francisco’s victory garden program became one of the best in the country; Golden Gate Park alone had 250 garden plots.
The Slow Food Nation Victory Garden will demonstrate the potential of truly local agriculture, bring together and promote Bay Area gardening organizations and produce high-quality food for those in need.
On Saturday, July 12, San Francisco Mayor Gavin Newsom and Slow Food Nation founder, Alice Waters, will introduce the Slow Food Nation Victory Garden at San Francisco’s Civic Center. Over 100 volunteers and 10 garden leaders will join us to plant the garden. If you are interested in volunteering, please email:

For more information about Slow Food Nation:

Food & Society Memo: From, Tulsa, Oklahoma. Eco-friendly fashion statement: You could fill a shopping bag with groceries for a decent night's meal or tomorrow's lunch. But this particular bag can feed many more than just you and your family. Whole Foods Market and FEED Projects, a socially minded business with hopes of feeding the world, recently introduced the FEED 100 reusable shopping bag. Made from organic cotton, each bag will help provide 100 nutritious meals to hungry school-age children in Rwanda through the United Nations World Food Program's School Feeding Program. It's a lightweight, fresh-white tote that collapses easily into its base, which is a zippered rectangular burlap pouch emblazoned with the FEED logo and the number 100.

When a Whole Foods Market customer buys a bag (a mere $29.99), $10 will be donated to the Rwanda feeding operation. The remainder covers the cost of the bag and oversight of the program by the FEED foundation.

FEED Projects, which previously launched the original FEED 1 bag, was founded by Lauren Bush, a former fashion model, as well as Ellen Gustafson, a former World Food Program communications officer.

[Natural~Specialty Foods Memo note: Lauren Bush happens to be the niece of George W. Bush, President of the United States. However, since President Bush's approval rating in the U.S. is below 30% (and worse globally), please don't hold that against her if you happen to be among the 70-plupercent of those who disaprove of the job he is doing as President. It's good work on Ms. Bush's (Lauren's) part.]

Natural-Specialty Foods Industry Website Memo: We suggest you take a look at the design and content improvements editor-in-chief Dan Bolton and his team are doing over at (Natural Food Network.)

The natural foods industry business network and portal is adding additional features, along with refining its look and design. Additionally, more new features are on the way, says editor-in-chef Bolton.

One feature of is the ability for users to create custom news feeds as a way to keep informed about industry and related news and information. Natural~Specialty Foods Memo is included among those RSS feeds on the website, so you can now include us among your custom publication choices.

If you haven't visited before, when you get to the homepage just click on the MyNaturalFoodNet link at the top (you will see a menu). Once there, you can register for the website. Once registered, it shows you how to create your own custom dashboard, which allows you to create your own RSS feed publication list, including Natural~Specialty Foods Memo (NSFM) of course.

NSFM also is linked with an RSS Feed on the homepage.

There's a link to the Natural Foods Network online magazine, along with other features of the site, on the homepage as well.

Friday, June 27, 2008

Retail Memo: Wal Mart Has Created A New, More Upscale Supercenter Store Design Prototype; Submitting Plans For the Stores Selectively in U.S.

Wal-Mart, Inc. has created a new Supercenter design prototype (pictured above) which the retailer is currently submitting plans for to a select number of cities and counties in the U.S. where it hopes to build and open the first of these new design stores.

The prototype Supercenter, pictured at top in the artist's rendering of the design, has a completely different look and feel compared to the retailer's existing battleship blue and grey Supercenters.

The new Supercenter prototype is much sleeker in design than Wal-Mart's existing traditional big box Supercenter design and is rather upscale in its look and feel.

It still is a big box store in that it will feature all of Wal-Mart's traditional Supercenter departments, but it also has numerous new features and elements including: glass windows or large skylights on the roof to let in natural sunlight; numerous green building design elements which Wal-Mart has been using in its prototype "green" Supercenters for some time; and energy-efficient lighting systems that turn on when they detect a shopper and off when shoppers leave the particular area of the store.

The new design prototype Supercenter also features new department titles or names throughout the store, less clutter and in-store signage, curved lines rather than the square edges common in Wal-Mart's traditional Supercenters, and multiple earth-tone colors used throughout the store rather than the traditional blue and grey-only standard color scheme.

The new Supercenter prototype also features a new Wal-Mart logo to be placed on the stores. The new logo has two color schemes we've viewed. The first color scheme (pictured above) has blue lettering with a gold/orange starburst after "Wal-Mart." The second color scheme has "Walmart" in white letters on an orange background, with a white starburst after.

Wal-Mart, Inc. plans to officially unveil a new corporate logo next week, something that's being anxiously anticipated by company stakeholders, analysts and others. We believe Wal-Mart's new corporate logo might well be the one above, in one or the other color schemes. You read it (and viewed the logo) here first.

One of the handful of U.S. cities and counties Wal-Mart has submitted plans to for the new Supercenter prototype stores is Cordova, in Shelby County, Tennessee, according to a senior Wal-Mart official.

That plan initially called for the new design prototype Supercenter to be a whopping 267,000 square feet, which would have made it Wal-Mart's largest Supercenter built to date.

However, the Shelby County Land Use Control Board rejected the mega-retailer's plan for the mega-Supercenter earlier this year because of extensive objections by nearby residents over its size, along with having concerns about potential noise and traffic issues. The Supercenter's size also was objected to by the Shelby County Division of Planning and Development, along with it having some serious concerns about increased traffic on existing roads.

Wal-Mart went back to the drawing board, and on July 10 will present a revised plan to the Shelby County Land Use Control Board for a much smaller 151,908 new design prototype Supercenter for the same site in Cordova, in Shelby County, according to the senior Wal-Mart official. Cordova is near Memphis. The Supercenter site is at Macon and Houston Levee in Cordova. The county has jurisdiction over planning in Cordova.

The design elements of the revised, smaller 151,908 square foot Supercenter are identical to those of the initial 267,000 proposed monster-store, acccording to the Wal-Mart senior official. The only change is one of scale, he says.

One of the features of the new design prototype Supercenter is that it can be of variing sizes--as big as the 267,000 square foot model (and bigger if desired) described above, and as small as about 100,000 square feet. This feature allows Wal-Mart to moreeasily adapt the prototype to specific neighborhoods, as well as municipal and county political situations aand conditions.

The site for the Supercenter in Cordova, in Shelby County, Tennessee, is a 26-acre development which includes numerous other commercial buildings besides the proposed Supercenter. Wal-Mart has a contract to buy the land on which the proposed Supercenter would sit and will do so if its plans for the 151,908 square foot new design prototype Supercenter are approved by the county land use board, according to the senior Wal-Mart official.

If approved at or not to long after the Shelby County Land Use Control Board meeting on July 10, when Wal-Mart officials will present the revised Supercenter plan, we're told by the Wal-Mart senior official the Tennessee new design prototype likely will be the first of the new design Superstores to be built and opened in the U.S.

It's far from certain the revised Supercenter will gain approval however. There remains much opposition to it among various citizens and groups in the area, although thy've yet to see Wal-Mart's plans for the smaller Supercenter.

The Supercenter's opponents' primary concerns are traffic and noise. The county also has concernes because it says it will have to spend a considerable amount of money on road and intersection improvements because of the heavy volume of automobile traffic the new Supercenter will generate in the area.

What's significant though, at least for this piece, is that Wal-Mart has created this new age design Supercenter prototype. You can bet if this particular new Supercenter doesn't get built in this particular part of Tennessee, one of the new design Supercenters will be built soon elsewhere in the U.S.

As we wrote about here, Wal-Mart has become flexible with its Supercenter size recently, when historically it's been rigid over tweaking the size of the mega-stores. For example, the retailer is converting a 105,000 square foot former big box retail building in Modesto, California into a Supercenter which will be one of only two in that small size range it currently has. The other is near Fresno, California.

Additionally, as we reported here, Wal-Mart is converting a number of its Wal-Mart discount format stores in Southern California's Orange County into Supercenters, adding about 50,000 -to- 75,000 square feet to them, which will be used for food and grocery (including fresh foods) product merchandising.

These "hybrid" Supercenters will be much smaller than the average 180,000 square foot Wal-Mart Supercenter but will allow for a full selection of fresh foods and grocery products to be sold in them, which is a top priority for the mega-retailer, since food and grocery now comprise 41% of Wal-Mart's overall sales, according to the most recent categorysales numbers from the retailer.

Despite being the world's largest corporation and retailer, Wal-Mart isn't letting that prevent it from innovating. In fact, when it comes to retail format innovation, Wal-Mart is currently innovating more so than it's done at any time in its history.

In addition to the multi-format Supercenter concepts mentioned above, along with Wal-Mart's "green Wal-Mart Supercenter prototype, the mega-retailer is set to open its new Marketside small-format grocery stores, or what we call "Small-Mart's," in four cities in the Phoenix, Arizona Metropolitan region this fall.

The Marketside "Small-Marts" at about 15,000 square feet are about the size of the meat department in one of the retailer's 200,000 square foot Supercenters.

The stores are being positioned by Wal-Mart as small community grocery stores with a focus on service. The product merchandising focus in the Marketside stores will be in-store made fresh, prepared foods, fresh produce and meats, and basic and specialty grocery products, including some new store brands to be introduced by Wal-Mart just for the Marketside grocery stores.

Additionally, Natural~Specialty Foods Memo has learned Wal-Mart plans to convert more former big box stores in the 100,000 square foot range into smaller Supercenters like it's doing in Modesto, California, in other selected cities which like Modesto it's been difficult if not impossible for the retailer to get new Supercenters approved due to extensive city and community opposition. This is particularly true in California.

Further, as we wrote about in this May 6 piece, "Ethnic Retailing Memo: Wal-Mart to Open the First Store of its 'Hispanic Community' Store Ethnic Retailing Format Tomorrow Morning in Garland, Texas," Wal-Mart also recently created a brand new "Hispanic Community Sstore" format, opening the first one in a converted Supercenter in Garland, Texas in May.

Lastly on the format innovation front, we've learned Wal-Mart is working on some new design changes, tweaks and upgrades to its 45,000 square foot Neighborhood Market supermarkets. The retailer hasn't done much in terms of expanding its Neighborhood Market store count since it created the format and opened the first store in 1998. However, in the last couple years its opened a higher than historic annual average number of the supermarkets, and plans on continuing to do so for the next few years in select regions of the U.S.

For the last few years, Wal-Mart has been customizing the design of its Supercenters in a few regions of the U.S., where doing so has helped it to gain approval for the stores. For example, in Colorado, Wal-Mart has built two Supercenters that blend in with the respective communities' mountain setting, using earth-tone colors and brick on the store facades rather than the traditional blue and grey-colored materials it normally uses, as well as adding features like bicycle paths around the store, and even a bicycle shop inside one of the Colorado stores.

It appears to Natural~Specialty Foods Memo the new design prototye Supercenter is an evolution of that customization as well as a "mass customizatio"n of many elements of the handful of "green" Wal-Mart Supercenters the retailer has opened over the last few years in the U.S.

The flexibility of the new design prototype Supercenter--to go from say 267,000 square feet -to 152,000 sqaure feet for example--also has an element of "mass customization" in it which should serve Wal-Mart well.

The fact the new design prototype Supercenter is much more upscale and attractive than the basic format Supercenter (which wouldn't take much), seems to send a signal from the brawny big box retailer from Bentonville it believes its low and value price positioning won't be hurt by housing such merchandising--the key to the retailer's success--in a more sleek, upscale and considerably more attractive retail box (a box with lines even).

As far as we are aware, Wal-Mart doesn't intend at this point in time to completely do away with its standard Wal-Mart Supercenter battleship blue and grey big box. Although, based on conversations with our sources, we suspect eventually doing so will be the case for the mega-retailer from Arkansas, especially if the new logo Wal-Mart unveils next one is the one we have pictured in this story.

Thursday, June 26, 2008

Small-Format Food Retailing Memo: Post-Pause Frenzy: Tesco to Open at Least 30 New Fresh & Easy Stores Over Next 90 Days Beginning On July 2

Pictured above is the Fresh & Easy grocery market set to open on July 2 in a shopping center in Manhattan Beach, California. The photograph of the Fresh & Easy store was taken from in front of a Trader Joe's, which is nearly next door to the Fresh & Easy in the shopping center. The two stores even share the same parking lot. (Photo: copyright, 2008 Natural~Specialty Foods Memo.)

Tesco plans to open between 30 -to- 37 new Fresh & Easy Neighborhood Market grocery stores over a 90-day period beginning on July 2 when it opens its first new store, in Manhattan Beach, California, since taking a three month new store opening pause which began in Early April, based on information the retailer published in this press release yesterday.

Tesco currently has 61 of its small-format (10,000 -to- 13,000 square foot) combination basic grocery and fresh foods grocery markets open in Southern California, the Phoenix, Arizona Metropolitan region, and in the Las Vegas, Nevada Metropolitan market area.

In the press release, Tesco announced it will hire an additional 750 new employees over the next 90-days for the new Fresh & Easy Neighborhood Market stores it plans to open during this time period. Most of those new employees will be at store-level.

Additionally, in the press release, Tesco says it employs an average of 25 workers per-store

[Note: In most its previous press releases, Tesco's Fresh & Easy Neighborhood Market has said it employs and average of 20 workers per-store. We assume the average is 20 -to- 25, and the retailer has decided to use 25 rather than 20 now. If not, it would then appear Fresh & Easy Neighborhood Market has either revised the average, or has recently increased the number of employees it has on a per-store basis. You will see below why we mention this. It's not to knit-pick.]

Based on this data in the press release--hiring 750 employees over the next 90 days; the majority of which we know to be store-level hires from our sources--it's a good estimation that Tesco will be opening about 30 -to- 37 new Fresh & Easy stores beginning on July 2 and for the 90-day period following that.

Here's the math: 25 employees per-store on average; hiring 750 new employees over the next 90 days; equals 30 new stores during that three month period. At 20 employees average per-store, it works out to about 37 new stores. Therefore, we estimate Tesco will open between 30 -to- 37 new Fresh & Easy grocery stores over the next 90-days beginning on July 2.

We've been reporting Tesco would resume its rapid new store opening pace with Fresh & Easy at roughly the same frenetic clip it's been opening the stores at since November, 2007, which has been the opening of a new Fresh & Easy grocery store about every two and one-half -to- three days.

Numerous publications have written during the current three month new store opening pause it was likely Tesco would open fewer stores once the break ended. However, we've stated all along that would not be the case.

Rather, we've said, as the data from yesterday's press release and our analysis indicates, Tesco would start its rapid-fire new store opening machine back up once the three month pause ended and resume opening new Fresh & Easy stores once again on the average of about one new store every two and one-half -to- three days, which opening 30 -to- 37 new stores over the next 90 days in fact equates to. In other words, the new store pipeline is full and ready to be opened.

With a current store count of 61 Fresh & Easy stores, opening about 30 -to- 37 new stores over the next three months will give Tesco 91 or slightly more Fresh & Easy stores by early fall, 2008, with about three more months to go in the year still remaining to open more.

Initially, Tesco said it planned to have 200 Fresh & Easy stores open and operating in the Western USA by the end of 2008. Earlier this year the company revised that number downward, saying it would have more like 150 stores opened by the end of 2008.

In large part, Tesco revised that number down from 200 to 150 stores because initially it planned to start opening the about 50 Fresh & Easy stores that will open in the new markets of Bakersfield, Fresno, the Sacramento Metropolitan region and the San Francisco Bay Area, this year. However, the retailer has said those stores won't start opening until early 2009.

Even if Tesco has 100 Fresh & Easy stores open by say October 1, that would still leave 50 new stores to be opened between October 1 and December 31, in order to achieve the 150 stores open by the end of 2008 estimate.

In our analysis that's not likely to happen for a couple reasons.

First, it would mean opening a new store nearly every day, which we don't think Fresh & Easy plans to do; one every three days is hectic enough.

Second, October -to- December is the holiday shopping season--Thanksgiving and Christmas--which is the busiest time of the year in food and grocery retailing, making it difficult if not near- impossible to open that many, or close to that many, stores during the season.

We do believe it possible Tesco could open an additional 30 new stores during those remaining months of 2008 however, which would give the retailer in the neighborhood of 130 stores opened by the end of the year, which is close enough to 150 for even the most ambitious food retailer or pickiest analyst.

As we've written before, we can't recall another grocery retailer in modern food retailing history that's embarked on as rapid of a new store opening blitz as Tesco has with its Fresh & Easy Neighborhood Market USA venture, especially in a concentrated market region like the Western U.S. In fact, in only three Western USA states--California, Arizona and Nevada thus far--for that matter, limiting the geographic region even more.

Of course, doing so is key to Tesco's Fresh & Easy retail marketing and positioning strategy for the small-format Fresh & Easy grocery stores. It's what we call a "critical mass" store opening and location strategy: opening up as many stores within two miles or so of each other in selected markets as fast as possible with the goal of becoming in a sense the de facto neighborhood grocer in those cities and neighborhoods.

The question is: Has the three month new store opening pause given Tesco's Fresh & Easy Neighborhood Market enough time to improve and optimize its marketing, merchandising and operations in its stores so as to better compete for primary shoppers along with creating the means to generate needed new consumer trial?

Our analysis is no it hasn't. However, Tesco is viewing Fresh & Easy as a work in progress. Therefore "getting it right" right now isn't as important as getting more stores open "right now" is for the retailer. Remember, "critical mass" is crucial to Fresh & Easy's overall strategy.

Of course so are sales, margins and profits, as they must be to any food retailing chain. But the logic within Tesco in the main is those will come later.

Also what will have to come later in our analysis is a re-evaluation of many of the Fresh & Easy Neighborhood Market store locations in all three current market regions--Southern California, Las Vegas and Phoenix, Arizona Metro market.

Most of these Fresh & Easy stores are located in retail store buildings formerly owned and operated by supermarket chains like Albertsons and Ralph's, and in former Rite Aid drug stores, as well as in various former big box retail stores of various retail types.

These various stores were closed by their respective retail operators for various reasons; among them being sales underperformance in the locations.

Fresh & Easy, being a different format than say the Albertsons and Ralphs stores could eventually perform well in these locations. Additionally, in those former non food retailing locations, a food retailer might succeed where a non-food retailer failed. However, we know many cases in which Fresh & Easy stores in these locations aren't currently performing very well, particularly in the Las Vegas market, but in the other two markets as well.

That's not Tesco's primary concern at present however. Rather, "critical mass" is the focus, which is why starting once again on July 2, with the opening of the new Fresh & Easy grocery store in Manhattan Beach in Southern, California, followed by one new Fresh & Easy grocery market opening about every three days for the 90-days following that, Tesco will once again be on a Fresh & Easy Neighborhood Market new store opening tear.

Wednesday, June 25, 2008

Retail Intelligence Guest Memo: Researchers Honing in on Ways to Use GPS Data to Pick Retail Store Sites, Better Understand Consumer Behavior

Gregory Skibiski, left, and Tony Jebara of Sense Networks, a company that uses location data to make recommendations for businesses and consumers. [Photo: Suzanne De Chille/The New York Times.]

The New York Times
June 22, 2008

THAT hoariest of real estate truisms — location, location, location — may soon be a clarion call for all sorts of businesses.

We’re in the midst of a boom in devices that show where people are at any point in time. Global positioning systems are among the hottest consumer electronics devices ever, says Clint Wheelock, chief research officer at ABI Research, a technology market follower. And cellphones increasingly come with G.P.S. chips. All of these devices churn out data that says something about how people live.

Such data could redefine what we know about consumer behavior, giving businesses early insight into economic trends, better ways to determine sites for offices and retail stores, and more effective ways to advertise.

Just this month, the journal Nature published a paper that looked at cellphone data from 100,000 people in an unnamed European country over six months and found that most follow very predictable routines. Knowing those routines means that you can set probabilities for them, and track how they change.

“What we do is really not random, even though it may appear random,” says Albert-László Barabási, a physicist at Northeastern University who is one of the paper’s authors.

It’s hard to make sense of such data, but Sense Networks, a software analytics company in New York, earlier this month released Macrosense, a tool that aims to do just that. Macrosense applies complex statistical algorithms to sift through the growing heaps of data about location and to make predictions or recommendations on various questions — where a company should put its next store, for example. Gregory Skibiski, 34, the chief executive and a co-founder of Sense, says the company has been testing its software with a major retailer, a major financial services firm and a large hedge fund.

Tony Jebara, also 34, the chief scientist and another co-founder of Sense, said, “We can predict tourism, we can tell you how confident consumers are, we can tell retailers about, say, their competitors, who’s coming in from particular neighborhoods.”

Mr. Jebara, who is also an associate professor of computer science at Columbia University, says the key to drawing such conclusions starts with having very large sets of data that go back several years. Sense’s models were developed initially from sources like taxicab companies that let it look at location data over such a period. Sense also uses publicly available data, like weather information, and other nonpublic sources that it would not disclose. “We had three-quarters of a billion data points from just one city,” Mr. Skibiski says.

Mr. Jebara’s statistical models interpret those patterns and look at whether they correlate with things in the real world, like tourism levels or retail sales. The algorithms are complex. Even so, the model doesn’t work for everything Sense tries it on, often because more data is needed. But Mr. Jebara says that when it has the data, the model works well. Several hedge funds made an investment in Sense earlier this year.

The Macrosense tool lets companies engage in “reality mining,” a phrase coined by Sandy Pentland, an M.I.T. researcher who was also a co-founder of Sense and now advises it on privacy issues.

Sense is not the only company engaged in reality mining. Inrix, a Microsoft spin-off, uses traffic data to predict traffic patterns. Path Intelligence of Britain monitors traffic flow in shopping centers by tracking cellphones.

Reality mining raises instant questions about privacy, especially when cellphone data is involved. In the United States, it is illegal in many cases for cellphone companies to share customers’ location data without their consent.

Mr. Skibiski says that Sense is interested only in aggregate data and that it’s looking for broad patterns, not the specific behavior of individuals. But he recognizes the privacy issue. He says he believes that people should own their own data, control when it is disclosed and receive some remuneration for it. His original idea in 2002 was to pay people for their data, but a formula for doing so proved too complicated.

Instead, Sense decided to trade services for data. On the same day it released Macrosense, it announced a new software package called Citysense, which uses location data to show where people are going, say, for nightlife, and maps their activity. Consumers who have iPhones or BlackBerrys can sign up for the service, which does not ask for personal information. Over time, the software will learn their patterns and recommend places they might like to go, or show them where other people with similar patterns are going. If they want to purge their data, they can do so at any time. [Click here to view Blackberry graphic.]

There’s little doubt that products we use everyday, like our cellphones or cars, will increasingly allow for us to be tracked. And after years of hype, there also seems to be demand for services built around location. Gartner, a technology researcher and consulting firm, says that the market — which includes various navigation and search devices and subscriptions and services — will nearly triple in revenue this year, to $1.3 billion from $485 million in 2007, and will reach $8 billion in 2011.

Annette Zimmermann, a Gartner analyst, says Macrosense seems to have a novel offering, one with a potentially large market.

“So many companies are just sitting on data” that they can’t do much with, she says. That could make Macrosense a powerful tool.

Still, Sense’s model is not a sure thing.

“The reality is that location data is new, and we don’t have 10 years of history to work from,” says Ted Morgan, the chief executive and founder of Skyhook Wireless, which sells a service that lets people use WiFi network access points to get information about their location.

“But if their algorithms can do the things they say, we’d probably do a lot with them,” Mr. Morgan says.

Michael Fitzgerald writes about business, technology and culture. E-mail:

Small-Format Food Retailing Memo: Wal-Mart Launches New Website For 'Marketside' Small-Mart Stores; Says Arizona Stores Will Open in Fall

Wal-Mart has launched a new, colorful website for its Marketside small-format (15,000 -to- 20,000 square foot) community grocery stores and has announced its first four combination grocery and fresh foods stores in the Phoenix Metropolitan/East Valley region cities of Gilbert, Mesa, Chandler and Tempe will open in the fall rather than this summer as the retailer originally had planned.

View the new Wal-Mart Marketside website here.

Natural~Specialty Foods Memo first reported in August-September, 2007 that Wal-Mart would open the first four of the new Marketside format stores in these Arizona cities. Wal-Mart confirmed this two months ago when it created the website where it listed job postings and began excepting online applications for store manager and assistant manager positions at the four Marketside stores in these four Arizona cities.

Wal-Mart originally planned to open at least one or more of the four stores this summer, according to our sources. In fact, it was hoped the first store would open before August 4, when David Wild, Wal-Mart's senior vice president for business development and the head of the Marketside format development team, leaves the company to become CEO of Halfords, a United Kingdom-based car part and bicycle retailer.

Based on Wal-Mart's announcement today, that's not going to be the case. Wal-Mart offered no specific month or date this fall when the first store would open; just that they will open in the fall of 2008.

As we've reported previously, Wal-Mart's Marketside will have its own offices in Tempe, Arizona, rather than being operated out of Wal-Mart corporate headquarters in Bentonville, Arkansas. Starting on June 30, Marketside will open a recruiting office to hire for the Arizona stores at this address: 800 E. Southern AvenueTempe, AZ 85282. Marketside has already been accepting applications and conducting interviews for positions. But the opening of this recruiting office will kick the process into high gear, according to our sources.

The new Marketside website positions the stores as we've been reporting for months now, as small "community grocery stores" with a focus on fresh foods and basic grocery items. In fact, on the new website, Wal-Mart describes Marketside this way "Marketside is a small community grocery store owned by Wal-Mart Stores, Inc."

Interestingly, Tesco originally planned to name its Fresh & Easy USA division and stores, Fresh & Easy Community Market, but changed it to Fresh & Easy Neighborhood Market after the retailer said research with focus groups demonstrated a preference for "Neighborhood" over "Community" in the name. [This has been publicly stated by both Tesco PLC CEO Terry Leahy and Tesco Fresh & Easy Neighborhood market CEO Tim Mason. Tesco makes no mention on its Fresh & Easy website that Fresh & Easy Neighborhood Market is owned by Tesco, like Wal-Mart mentions about Marketside being owned by Wal-Mart on the new Marketside website.

Ironically, Wal-Mart's original small-format supermarket (at least small-format for Wal-Mart at the time at 45,000 square feet), which it continues to expand in terms of store count, is called Wal-Mart Neighborhood Markets. Wal-Mart built its first Wal-Mart Neighborhood Markets store in the mid -to- late 1970's.

The Marketside website plays up the stores' and its workers passion for food, especially fresh foods, with pictures and text about food and Marketside's commitment to offering "the freshest food available in-store and the best customer service."

As we've reported, the Marketside stores will have in-store kitchens where the fresh food items will be prepared, along with a seating area that will sit about 10 customers at any one given time. Take-out is expected to be the big draw for the fresh in-store, prepared foods in the stores however.

Tesco's Fresh & Easy Neighborhood Market makes its fresh, prepared foods at a central kitchen in Southern California and ships the items to its current 61 stores in Southern California, Nevada and Arizona.

The new website also makes an effort to reinforce the message that Marketside prices will be value-oriented, rather than having high prices like some publications have been suggesting recently in various stories using the angle that Wal-Mart plans to open upscale and high-priced small-format stores.

Wal-Mart's positioning for Marketside--fresh, quality foods at affordabel prices--is clear from reading this key introductory statement on the website reprinted below in italics:

Welcome to Marketside

"Marketside provides fresh, innovative answers to the daily question, "What's for dinner tonight?" Our unique product and shopping experience will change the way you shop for — and think about — fresh food, and our prices will keep you coming back."

It's clear Wal-Mart is positioning Marketside as a small, community grocery store as it calls it, featuring basic groceries and fresh foods with a clear value proposition.

Our sources have told us all along, and we have reported, that the Marketside stores will be slightly upscale but also will offer value pricing, which is Wal-Mart's stock in trade across all of its formats.

The new Marketside website also has photographs of the uniforms (burnt red-color grocery aprons with Marketside in gold lettering) store-level employees will wear. The uniforms, which are in the same colors used in the website and in other Marketside design and marketing elements and materials (hint: look for these to be the design colors used in and outside the stores) are designed to depict "freshness," which is the key marketing and positioning element for Marketside.

The website also features a sign up area here called "Stay in the Know," where consumers can sign up to receive a Marketside newsletter on a regular basis as well as receiving email up dates about Marketside.

The new Marketside website incorporates Wal-Mart's earlier job listing-only website (, including having listings in its "Join Our Team" section for the new store-level Pantry Controller and Meal Specialist positions as we reported in this piece, Small-Format Food Retailing Memo: Wal-Mart's Marketside Hiring For More Positions; Getting Closer to Summer Opening Date In Arizona yesterday, along with the store manager and assistant manager positions we've previously reported on.

Wal-Mart is looking for sites for the Marketside community grocery stores throughout California.

Natural~Specialty Foods Memo also reported in this piece, "Small-Format Food Retailing Special Report: Is Reno, Nevada Next After Arizona For Wal-Mart's Small-Format Marketside?" about Wal-Mart's interest in locating a Marketside Small-Mart in a new and upcoming development in Reno, Nevada.

In terms of the Arizona market, Wal-Mart plans to use Marketside as part of its three format--Supercenters, 45,000 square foot Neighborhood Markets and now Marketside--food and grocery retailing strategy in Arizona to become the market share leader in the state.

Secondarily, Wal-Mart plans to use Marketside, along with its other formats, to attempt to strike a serious competitive blow to the start up Fresh & Easy chain.

It looks like readers and others will have to wait until the fall to see the Fresh & Easy vs Marketside Small-Mart battle begin (the first four Marketside stores are very close to existing Fresh & Easy stores) rather than this summer.

That gives Tesco time to open more Arizona Fresh & Easy stores as well, which it will soon start doing after ending its three month new store opening pause on July 2 when a new store opens in Manhattan Beach in Southern California. New Arizona stores will start opening shortly after that date. Their currently are about 20 Fresh & Easy grocery markets open and operating in Arizona.

The launching of its new Marketside website by Wal-Mart though is a clear indication things are getting serious with the world's largest retailer when it comes to its new Small-Mart development, Marketside. After all, fall is just around the corner.

Related Reading:
Click here to read recent coverage and analysis by Natural~Specialty Foods Memo about Wal-Mart's Marketside Small-Mart community grocery store development.

Green Transportation Memo: Coca-Cola Enterprises, Inc. to Go Green; Plans to Add 142 Hybrid Electric Delivery Trucks to its North American Fleet

In a major green transportation move that not only should save the beverage bottling industry giant substantial diesel fuel costs over the long term as well as reduce its delivery fleets carbon emissions, Coca Cola Enterprises, Inc. plans to add 142 hybrid electric delivery trucks to its huge North American fleet this August. [The picture above is what the Coca-Cola Enterprises, Inc. hybrid electric delivery trucks will look like.]

Coca-Cola Enterprises, Inc. is the bottling arm of beverage industry giant Coca-Cola Co. and is a separate company.

The beverage bottling industry leader plans to add the 142 hybrid electric delivery vehicles throughout the United States and Canada, once it completes a huge addition its adding to its already large Midwest Coca Cola Bottling facility in August. The Midwest bottling facility is located in the Minneapolis-St. Paul USA Twin Cities region in Minnesota.

In announcing the major green transportation initiative, which will result in Coca-Cola Enterprises, Inc. having the largest hybrid electric delivery fleet in North America when it adds the 142 delivery vehicles, company CEO John Brock said the initiative is part of a larger environmental and conservation program the giant beverage bottler is embarking on.

"Coupled with other energy saving measures here in the Twin Cities and elsewhere, adding the hybrid electric vehicles not only is a commitment to the environment, but it's also good business practices," Brock says.

According to Brock, the hybrid delivery trucks will be the largest such vehicles in use in North America.

The hybrid electric trucks cost considerably more than conventional Coca-Cola delivery trucks, about $85,000 each, according to Brock. However, it's estimated the hybrid electric delivery trucks will use 32% less fuel than the company's standard trucks, which with diesel fuel averaging about $6 a gallon in North America will be a substantial savings, both in the short and long term.

The hybrid delivery vehicles also produce 37% less carbon emissions than the standard delivery trucks, which will amount to a significant carbon reduction for the company once all 142 of the hybrid trucks are in service, which should be by the end of August, according to the company.

Since Coca-Cola Enterprises, Inc. is one of the largest beverage bottlers in North America, as well as a major truck fleet operator, the company's investment and commitment to hybrid electric technology by buying the 142 trucks and adding them to its conventional truck fleet, could serve as a leadership initiative for other beverage bottlers and grocery industry companies to do the same.

With diesel fuel averaging $6 a gallon (numerous oil and gas industry analysts are predicting $7 a gallon diesel fuel by the end of this year), it seems a tipping point has arrived in which food, grocery and beverage industry companies and transportation firms would benefit economically in both the shorter and longer term by investing in hybrid electric trucks and incorporating them in their fleets.

The time also is good for the U.S. department of Transportation to sponsor a bill which would give tax rebates to companies for each hybrid electric delivery truck they purchase, in Natural~Specialty Foods Memo's analysis and opinion. The economic and social benefits--fuel reduction and the carbon emissions decrease--make it a worthy use of taxpayer money in our view.

Doing this would provide an incentive--along with the market incentive of current $6 a gallon and soaring diesel fuel prices, for companies to make this investment.

If numerous industry companies were to begin purchasing these hybrid electric delivery trucks in serious numbers, the increased demand for the trucks would increase the supply of them, thus resulting in the cost of the vehicles coming down, thereby making them affordable for smaller companies as well as larger ones.

Additionally, with each truck using 32% less fuel and emitting 37% less carbon than standard delivery trucks, the potential exists for substantial fuel savings, along with real carbon reduction over time.

Coca-Cola Enterprises, Inc. bottles various natural beverages along with Coca-Cola and the company's other varieties of soda pop. These include bottled water, Vitamin Water and various juice and other beverage products.

Monday, June 23, 2008

Retail Memo: Whole Foods Market, Inc.'s Plans For its First of the Format 'Whole Foods Express' Small-Format Market in Boulder, Colorado On Hold

Whole Foods Market, Inc.'s plans to convert the Wild Oats natural foods market at 2584 Baseline Road in Boulder, Colorado, Wild Oats' former corporate headquarters town, into the first store of its Whole Foods Express small-format, fresh foods-centric natural and organic foods format store has been put on hold, Natural~Specialty Foods Memo has learned.

As we reported last year and updated throughout this year, Whole Foods' has planned to have the Whole Foods Express market in the converted Wild Oats' store open by the end of this year, possibly as early as late summer. However, the lease on the Wild Oats market building is coming due, and Whole Foods is currently in negotiations with the landlord of the building, which is located in Boulder's Basemar Shopping Center, over the terms of a lease extension, according to Will Paradise, Whole Foods Market, Inc.'s Rocky Mountain region president.

A spokesperson for the landlord would only say the lease discussions are ongoing and that no agreement has been reached as of yet.

When Whole Foods acquired Boulder-based Wild Oats Markets, Inc. last year, it inherited a number of Wild Oats banner and owned natural foods markets in the hometown city. These stores include: A Wild Oats store at 1651 Broadway; a Wild Oats Natural Foods Marketplace (a larger store) at 303 Marshall Road in nearby Superior, Colorado; the Wild Oats banner store at 2584 Baseline in the Basemar Shopping Center (the one set to be turned into the Whole Foods Express store); and Ideal Market (at 1275 Alpine Avenue), a Wild Oats'-owned store it bought from a local independent many years ago but retained the name because the store and the store name have historic significance in Boulder.

Whole Foods is currently remodeling Ideal Market, and will keep the name, according to Paradise. The remodeled historic boulder store is set to open in August, paradise says.

The supernatural foods retailer converted the larger former Wild Oats Natural Marketplace store into a Whole Foods Market banner store in January.

Another project coming up in Boulder is to remodel the Wild Oats store at 1651 Broadway. Whole Foods has a unique plan for this store, which is to completely remodel it and rename it Alfalfa's, which was the popular Boulder-based natural foods store chain Wild Oats acquired in the late 1990's, according to Rocky Mountain region president Will Paradise. Wild Oats renamed all the Alfalfa's stores Wild Oats.

It's doubtful Whole Foods is attempting to create a new national, or even regional, banner by bringing back the Alfalfa's name, although they might use it to a limited extent elsewhere in the Rocky Mountain region.

Rather, Whole Foods has approached the Rocky Mountain region, and especially Wild Oats' hometown of Boulder, Colorado, in a unique way because of its history of being where the no longer Wild Oats Markets, Inc. was founded, along with the fact Whole Foods inherited numerous stores in the city.

Prior to the Wild Oats acquisition-merger, Whole Foods had only one Whole Foods Market in Boulder. That store, which is located on Pearl Street in the city, still remains open along with the others mentioned above. Whole Foods has plans to enlarge and remodel that store as well. Plans are to have the project completed by late 2010 or early 2111, according to Paradise.

Meanwhile, with the lease negotiations for the Wild Oats building, which is set to be converted to the first of the format Whole Foods Express, still in progress, it appears the conversion of the store into the new fresh, prepared foods-focused 15,000 -to- 20,000 square foot natural and organic small-format food store is in limbo at present.

Since Whole Foods has had problems arriving at the lease extension terms with the landlord thus far, the retailer has yet to begin converting and remodeling the store to the Whole Foods Express format. Therefore, it's unlikely that even if the parties agreed on the terms of a lease extension this week, it would be possible for Whole Foods to open the Express store this year.

The supernatural foods retailer hasn't given up on or shelved the Whole Foods Express format though, according to Paradise. Rather, it's a lease extension issue on the Wild oats store building, not a format issue.

Converting the store into the Express format though is key to Whole Foods' Boulder strategy, which is to have two Whole Foods banner stores, one Alfalfa's (which will have some format differences as well), one Ideal Market (which is a bit different format than a Whole Foods market), and the Whole Foods Express small-format combination fresh, prepared foods and natural foods market.

If the lease negotiations fall through, it's likely Whole Foods would close the Basemar Shopping Center Wild Oats banner store.

The conversion of the Basemar Shopping Center store also is important in that it will be Whole Foods' first Whole Foods Express format store and thus a model for any others the retailer might want to open in other parts of the U.S.

It also would spell Whole Foods Market, Inc.'s introduction into what Natural~Specialty Foods Memo calls the small-format food retailing revolution currently going on in the U.S. and internationally--with players like Trader Joe's, Tesco's Fresh & Easy, Aldi, SuperValu's Sav-A-Lot, Safeway's "The Market" format and numerous others all leading the charge in America.

We will report on any new developments regarding the lease negotiations between Whole Foods Market, Inc. Rocky Mountain region and the Basemar Shopping center Wild Oats store's landlord as information becomes available. At present though, it's our best analysis that it's unlikely the Whole Foods Express store will be able to open at the Boulder location this year.

Sunday, June 22, 2008

Small-Format Food Retailing Memo: Wal-Mart's Marketside Hiring For More Positions; Getting Closer to Summer Opening Date In Arizona

Wal-Mart, Inc.'s first four small-format (15,000 -to- 20,000 square foot) new combination fresh foods and grocery markets are getting closer to their upcoming summer opening in the Phoenix, Arizona Metropolitan region market.

As we wrote in this piece, "Small Format Food Retailing Special Report: Raising (the stakes in) Arizona: Wal-Mart On-Track to Open First Marketside Stores in Arizona This Summer," on May 18, Wal-Mart set up a new website specifically dedicated to Marketside--which also will have its own office in Arizona rather than being run out of corporate headquarters in Bentonville, Arkansas--and placed ads on the website for store managers and assistant managers for the four Phonix-area stores in Mesa, Chandler, Tempe and Gilbert.

Wal-Mart has now added job postings for full-time store-level Pantry Controllers and full and part-time Meal Specialists for the four Arizona stores set to open this summer.

Reprinted below in italics are the job descriptions from the Marketside website for each of those positions. The job descriptions for all positions are the same for all four stores. They also are the same for the full-time and part-time Meal Specialist positions.

Title: Full Time Pantry Controller

Description: Pantry Controllers work with the management team to provide customers what they are looking for every time they visit. Specifically, Pantry Controllers receive and stock merchandise, reconcile invoices and manage the administrative tasks of ordering and replenishment, actively managing overall inventory levels. In our small store format, Pantry Controllers also have the opportunity to be personally involved in engaging customers, modeling outstanding service and coaching Marketside Meal Specialists.

Location: AZ - Gilbert

About the Organization

Our Culture: We offer fresh product, value and convenience in a brand new way, and this is your opportunity to be a part of it!

The Opportunity includes:
- A chance to truly impact the retail industry
- The sense of pride and stability that comes with being a part of the world's largest retailer - Excellent opportunities for advancement

Title: Full Time Meal Specialists

Description: Meal Specialists work as a team to provide excellent customer service across all operational areas of the store. Their job is varied, including cashiering, food preparation and service, merchandising and store presentation. Perhaps the most fun however is the opportunity for this knowledgeable team to engage with customers, sharing cooking tips or providing recommendations for meal solutions.

Location: AZ - Chandler

About the Organization
Our Culture: We offer fresh product, value and convenience in a brand new way, and this is your opportunity to be a part of it!

The Opportunity includes:
- A chance to truly impact the retail industry
- The sense of pride and stability that comes with being a part of the world's largest retailer - Excellent opportunities for advancement

As you can see by the brief but descriptive enough job descriptions for both positions, the Marketside stores are going to be extremely fresh food-centric, as we've been reporting in Natural~Specialty Foods Memo since last year, when we were one of the first publications to report on the format development by Wal-Mart.

The Pantry Controllers at the Marketside stores, who will be full-time employees, will be combination store-level buyers/merchandisers and supervisors for the Meal Specialists, along with engaging in customer service activities.

The Meal Specialists will be the primary point of contact with customers, doing everything from operating the checkout stands and serving fresh, prepared foods to shoppers, to some stocking and merchandising and other customer service and store-related tasks. There will be a mix of full and part-time Meal Specialists in all four Arizona stores.

As we've reported, the Marketside stores will prepare fresh foods in-store for both take out and eating in. There will be a kitchen in each store, along with a small eating or dining area which can seat about 9 -to- 10 customers at a time right in the store.

Natural~Specialty Foods Memo has learned a number of Tesco Fresh & Easy Neighborhood Market store-level employees are applying for the Wal-Mart Marketside positions in Arizona.

The Phoenix Metropolitan region is one of Tesco's three current markets for its small-format (10,000 -to- 13,000 square foot) Fresh & Easy combination basic grocery and fresh food format grocery stores.

Tesco Fresh & Easy Neighborhood Market store-level employees are all part-time except for the store manager. Even the assistant manager, which Fresh & Easy calls a team leader, is part-time in most of the stores. The store-level workers are paid a starting wage of $10 an hour and get a limited health insurance plan as long as they work at least 20 hours per week. Each Fresh & Easy store employees about 20 workers, according to Tesco Fresh & Easy Neighborhood Market.

According to our Wal-Mart source, a number of Tesco Fresh & Easy store-level employees who want to work full-time, which isn't an option at Fresh & Easy, are applying for the full-time Pantry Controller Positions, as well as the full and part-time Meal Specialists positions. Our source says the full and part-time Meal Specialist positions at Marketside start at about $12 an hour, which is $2 an hour more than Tesco's Fresh & Easy is currently paying.

We've also learned Wal-Mart's Marketside has interviewed more than one former and current Tesco Fresh & Easy corporate employee for its Phoenix, Arizona Metropolitan Marketside buying, merchandising and operations corporate office.

As we reported in this piece, "Small-Format Food Retailing Memo: Wal-Mart's Small-Format Marketside 'Developer-in-Chief' Leaving for CEO Position at British Bicycle Retailer," David Wild, Wal-Mart's senior vice president of business development and the company executive who's been in charge of the Marketside development from the start, is leaving the company to become the CEO of Halfords Group PLC, the United Kingdom's largest bicycle retailer. Wild, who is a British native and worked for Tesco PLC for 18 years, will start at Halford's on August 4.

Our source says one of the reasons Wild is waiting until August 4 to start at Halfords is because he wants to remain with Wal-Mart until the first Marketside store opens this summer, which means the first store will likely open before August 4.

The source tells Natural~Specialty Foods Memo that Wild wants to be around when the first Marketside store opens since he's been leading the format development since day one, as well as wanting to still be in the game so he can see the reaction from his former co-workers at Tesco PLC, Fresh & Easy's parent company.

Small-Format Food Retailing Memo: Wal-Mart's Small-Format Marketside 'Developer-in-Chief' Leaving for CEO Position at British Bicycle Retailer

David Wild, Wal-Mart, Inc.'s senior vice president of business development and the company executive who's been in charge of its new small-format Marketside grocery and fresh food format stores, is leaving the world's largest retailer to accept a position as CEO of Halfords Group PLC, the United Kingdom's largest retailer of car parts and bicycles, according to a statement just released by the Redditch, England-based company.

Wild was named to the position of senior vice president of business development at Wal-Mart in January, 2007. He held other executive positions with the company prior to that appointment.

Wild, who spent 18 years with UK-based Tesco PLC, will start his CEO duties at Halfords Group PLC on August 4, according to the statement.

In an interesting twist, he succeeds former CEO Ian McLeod, who left the car parts and bicycle retailer to run Australian supermarket chain Coles Group Ltd. as CEO. Halfords Group PLC apparently likes food and grocery retailing CEO's, as its replacing one, Ian McLeod, with another, David Wild. McLeod and Wild aren't strangers either. Both worked for Wal-Mart in Germany before the mega-retailer exited the German market in 2006.

During his 18 years with Tesco PLC, Wild was heavily involved with the retailer's European expansion, including having a hand in the development of its successful Tesco Express small format combination convenience and grocery stores in Europe.

"He (David Wild) brings over 20 years' retailing experience, gained at two world-leading businesses (Tesco and Wal-Mart), and clearly has the skills and ability to move the company forward,'' Halfords Group PLC Chairman Richard Pym said in the statement. "We are confident that David will add tremendous value to Halfords.''

Wal-Mart put David Wild in charge of spearheading its Marketside small-format combination grocery and fresh foods store development project in part because of his extensive experience at Tesco, which has been an innovator in small format food retailing with its Tesco Express stores in the UK and elsewhere in Europe, and now with its Fresh & Easy Neighborhood Market small-format, convenience-oriented grocery markets in the Western USA.

Wild led the Marketside development team, as we first reported in late 2007, in San Francisco where the group first conducted extensive format and consumer research and planned, developed and honed the concept and format. Wal-Mart has an office near San Francisco where it operates aspects of its business.

Wild also has been the corporate cheerleader for Marketside inside Wal-Mart, Inc., and was the one who championed having the stores' prepare fresh foods in-store in kitchens rather than having the fresh, prepared foods made at a central kitchen and shipped to the stores like Tesco is doing with its Fresh & Easy Neighborhood market stores.

Wal-Mart's first four Marketside stores are set to open in the Phoenix, Arizona Metropolitan region this summer, as we've reported in Fresh & Easy Buzz.

Additionally, as Natural~Specialty Foods Memo has reported, Wal-Mart is looking for sites for the small-format Marketside stores in both Northern and Southern California. We also reported here that Wal-Mart is likely to be locating a Marketside store in this new development in Reno, Nevada.

Since the development phase for Marketside is complete, and the first four stores are set to open soon, its unclear if Wild's leaving Wal-Mart will be a setback for the retailer and Marketside. At this point, according to our Wal-Mart sources, operations is taking priority over development with Marketside, as the company has set up an office in Phoenix and is currently hiring managers and assistant managers for the four stores, along with getting the stores ready to open.

As the senior vice president of business development, Wild was preparing to move on to some new ventures in his position at Wal-Mart, therefore his timing in terms of leaving and accepting the CEO position at Halfords isn't likely to create a major shakeup with Marketside, although as the new format's head developer and cheerleader he will obviously leave somewhat of a void.

Wild isn't starting at Halfords Group PLC until August 4. And our Wal-Mart sources tell us in part that's because he wants to be around when the first of the Marketside stores opens in Arizona. In other words--and you read it here first--the first Arizona Wal-Mart Marketside grocery and fresh foods store will open before August 4, 2008.

Friday, June 20, 2008

Retail Innovation Memo: The 'Econvenience Store' Will Be the Next New Thing, and is A Convenience Store Industry Green Retailing Trend in the Making

Alvaro Garza of Dallas, Texas is a retailing pioneer in a brand new green-oriented retailing concept which Natural~Specialty Foods Memo predicts will become a convenience store industry retail niche trend in the not to distant future.

Mr. Garza and a partner recently opened an "econvienece store" (the 'e' stands for eco) named the green spot market and fuels in Dallas, Texas, in a converted and remodeled Mobile gas station.

The two retailing eco-entrepreneurs' have turned the traditional convenience store, the product mainstays of which are gasoline, snacks (mostly junk food) and beverages (mostly soda and beer) on its head, creating a format which not only doesn't merchandise junk food but puts an emphasis on selling natural and organic foods, including grab-and-go prepared items, healthy snacks and generally good-for-you beverages that taste good too.

The green spot market and fuels also sells fair trade organic coffee rather than the traditional C-store java, and serves the organic fair trade brew in compostable cups made from corn, which also are used to contain the all-natural soda's from the store's soda taps. No Coke and Pepsi at the green spot.

The Dallas "econvenience store" also offers biodiesel fuel in its fuel pumps and is the only service station or convenience store in Dallas County (which is a huge area) doing so currently, according to co-owner Garza.

Garza has researched the "econvenience store" concept in the United States extensively and says other then his green spot market and fuels, he's found just one other similar comprehensive and fully-integrated "econvenience store" in the U.S. That store is in Portland, Oregon, he says.

Dallas TV station WFAA recently did a report on the Green Spot, which its customers are calling one-part Whole Foods Market, one-part 7-Eleven.

Natural~Specialty Foods Memo believes Garza and company are onto something major with their "econvenience store." The C-store format, which has as its two main product categories fuel and food and drink, offers a perfect concept for green retailing in a niche manner.

We believe this to be particularly true for entrepreneurs who are looking for a way to differentiate themselves in convenience store retailing. Chains control the C-store arena in the main, and it's difficult for independents to compete in the retailing category.

However, the "econvenience store" format offers a real point of differentiation for independents. It also taps into something consumers already spend their money on in the billions of dollars annually in the U.S.--natural, organic and healthy foods and beverages. There's nothing radical anymore about selling these foods and beverages in any type of retail format store.

While its true biodiesel is in its infancy and therefore not a very lucrative proposition, start up "econvenience store" retailers can still offer gasoline alongside the biodiesel at the pump. Additionally, as electric cars become more common, we see a niche for having battery charging kiosks at the stations as well, which can provide an additional revenue stream.

Further, we would suggest having numerous pressurized air hoses (say at 25 cents for a certain period of time) so bicycle riders can fill their bike tires up at the store. Once they learn its availability, they will make it a regular stop, thereby also buying beverages and snacks at the store while filling their bike tires. In fact, anything that's an logical "eco-product niche" makes since for the "econvenience store."

Another idea is to hook up with a local group and hold weekly farmers' markets in the "econvenience store" parking lot. A farmers' market fits the format perfectly, as well as being a great way to introduce consumers to the store, along with generating lots of food traffic, which in-turn will generate even more word of mouth communications.

Today, natural and organic food and beverage items taste as good or better than conventional C-store fair. They also can be sold at a reasonable retail price by "econvenience store" retailers as long as they don't try to make Whole Foods Market gross margins.

Since convenience store format stores have much lower overhead (small and no frills) and have far less operating expenses than say a Whole Foods Market does, doing so is achievable. Further, "econvenience retailers" can make a higher margin on the products than traditional C-store retailers do in many cases and still do well in terms of volume.

Imagine the look on the face of the traditional C-store customer in Dallas when they go into the green spot for a six pack of beer, a pack of cigaretts (which the store doesn't sell at all), a couple of ham sandwiches on white bread, a cheap burrito and a couple of Cokes.

Of course, once they get inside, they will buy despite their startled look because they're hungry and thirsty.

Perhaps after they instead purchase a bottle of Vitamin Water, a delicious sandwich on whole wheat bread, a tasty organic instead of cheap, tasteless burrito, and a six pack of organic craft beer, they just might not only be happy, but also might go out and convert their pickup truck to biodiesel fuel, as well as stopping in every morning at the green spot for a fresh-brewed cup of organic fair trade coffee in a compostable cup made from corn, on their way to work.

Food Innovation Guest Memo: An American Professor's Food Revolution Starts With Rice

International Herald Tribune
June 18, 2008
By William J. Broad

Many a professor dreams of revolution. But Norman Uphoff, working in a leafy corner of the Cornell University campus, is leading an inconspicuous one centered on solving the global food crisis. The secret, he says, is a new way of growing rice.

Rejecting old customs as well as the modern reliance on genetic engineering, Uphoff, 67, an emeritus professor of government and international agriculture with a trim white beard and a tidy office, advocates a management revolt.

Harvests typically double, he says, if farmers plant early, give seedlings more room to grow and stop flooding fields. That cuts water and seed costs while promoting root and leaf growth.

The method, called the System of Rice Intensification, or SRI, emphasizes the quality of individual plants over the quantity. It applies a less-is-more ethic to rice cultivation.

In a decade, it has gone from obscure theory to global trend — and encountered fierce resistance from established rice scientists. Yet a million rice farmers have adopted the system, Uphoff says. The rural army, he predicts, will swell to 10 million farmers in the next few years, increasing rice harvests, filling empty bellies and saving untold lives.
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"The world has lots and lots of problems," Uphoff said recently while talking of rice intensification and his 38 years at Cornell. "But if we can't solve the problems of peoples' food needs, we can't do anything. This, at least, is within our reach."

That may sound audacious given the depths of the food crisis and the troubles facing rice. Roughly half the world eats the grain as a staple food even as yields have stagnated and prices have soared, nearly tripling in the past year. The price jolt has provoked riots, panicked hoarding and violent protests in poor countries.

But Uphoff has a striking record of accomplishment, as well as a gritty kind of farm-boy tenacity.

He and his method have flourished despite the skepticism of his Cornell peers and the global rice establishment — especially the International Rice Research Institute, which helped start the green revolution of rising grain production and specializes in improving rice genetics.

His telephone rings. It is the World Bank Institute, the educational and training arm of the development bank. The institute is making a DVD to spread the word.

"That's one of the irons in the fire," he tells a visitor, looking pleased before plunging back into his tale.

Uphoff's improbable journey involves a Wisconsin dairy farm, a billionaire philanthropist, the jungles of Madagascar, a Jesuit priest, ranks of eager volunteers and, increasingly, the developing world. He lists top SRI users as India, China, Indonesia, Cambodia and Vietnam among 28 countries on three continents.

In Tamil Nadu, a state in southern India, Veerapandi Arumugam, the agriculture minister, recently hailed the system as "revolutionizing" paddy farming while spreading to "a staggering" million acres.

Chan Sarun, Cambodia's agriculture minister, told hundreds of farmers at an agriculture fair in April that SRI's speedy growth promises a harvest of "white gold."

On Cornell's agricultural campus, Uphoff runs a one-man show from an office rich in travel mementos. From Sri Lanka, woven rice stalks adorn a wall, the heads thick with rice grains.

His computers link him to a global network of SRI activists and backers, like Oxfam, the British charity. Uphoff is SRI's global advocate, and his Web site ( serves as the main showcase for its principles and successes.

"It couldn't have happened without the Internet," he says. Outside his door is a sign, "Alfalfa Room," with a large arrow pointing down the hall, seemingly to a pre-electronic age.

Critics dismiss SRI as an illusion.

"The claims are grossly exaggerated," said Achim Dobermann, the head of research at the international rice institute, which is based in the Philippines. Dobermann said fewer farmers use SRI than advertised because old practices often are counted as part of the trend and the method itself is often watered down.

"We don't doubt that good yields can be achieved," he said, but he called the methods too onerous for the real world.

By contrast, a former skeptic sees great potential. Vernon Ruttan, an agricultural economist at the University of Minnesota and a longtime member of the National Academy of Sciences, once worked for the rice institute and doubted the system's prospects.

Ruttan now calls himself an enthusiastic fan, saying the method is already reshaping the world of rice cultivation. "I doubt it will be as great as the green revolution," he said. "But in some areas it's already having a substantial impact."

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