Tuesday Talking Points Memo: Spilled Milk

'Got Pus? Milk Does' says a new anti-milk marketing slogan and campaign from PETA: Cease and desist or face a lawsuit is the reply from the California Milk Processor's Board

An interesting war of words and exchange of letters (with threats of a lawsuit) has broken out between the California Milk Processors Board, the non-profit group that represents the state's milk processors, and PETA (People for the Ethical Treatment of Animals), the nonprofit animal rights organization.

PETA, which advocates a dairy-free lifestyle, recently launched an advertising and PR campaign featuring the slogan, 'Got Pus? Milk Does.' The group has run print ads and put the slogan on T-shirts, coffee mugs and other merchandise as a way to draw consumer attention to what it says are "dangerous levels of somatic cells--pus--in most if not all of the milk sold in the U.S.

Pus has the potential to get into milk when a cow has an udder infection called mastitis. PETA says it occurs regularly and thus the pus is in milk. The dairy board, government officials and most scientists and large animal Veterinarians disagree.


The California Milk Processors Board, which owns the trademark 'Got Milk,' is demanding PETA stop using the 'Got Pus? Milk Does' slogan immediately or face a copyright infringement lawsuit.

PETA recently gave the Associated Press a letter sent to the group by the milk board which demands the organization immediately cease the campaign by December 15 (3 days ago) and turn over all the merchandise with the tag line on it, along with any profits made from the sales of the items.

As of today, PETA hasn't met the milk group's demands; it hasn't ceased the campaign or turned over any logo-embossed goods or monies from their sales. In fact, PETA's lawyers have replied to the California Milk Processor Board with it's own letter, which says the trademark infringement charge is "entirely without merit."

In the letter to the milk board's lawyers, PETA's lawyers write, "Your client cannot seriously contend that an appreciable number of consumers who see a T-shirt bearing the 'Got Pus? Milk Does' slogan would be confused into thinking your client is the source of the T-shirt, attempting to sell milk by letting the public know that when they drink milk they also are consuming pus."

We aren't sure that response addresses the actual thrust of the milk processor' board's letter and trademark infringement claim. The ''Got Pus? Milk Does' tag line is clearly a rip-off of the "Got Milk" slogan. It's designed to play off of the popular media slogan. However, whether it meets the legal test of trademark infringement will be up to the courts to determine if a lawsuit is indeed filed, as it looks like will be the case.

If a lawsuit is filed, it won't be the first time a California milk and dairy trade group and PETA have faced each other in a courtroom. A few years ago PETA sued the California Milk Producers' Advisory Board, a separate but sister organization to the processor's board. The producer's group represents California's dairy farmers.

PETA filed suit against the dairy farmers' group over their popular advertisements which depict happy and contented cows grazing in a California pasture. 'Happy Cows Produce Great Cheese' is the slogan in these television and print ads. PETA's lawsuit argued the "Happy Cow" ads were false and misleading, saying the cows are neither happy, content or treated well. A California state court dismissed the case in 2003, and the state's Supreme Court denied PETA's motion to review it.

This time the shoe is on the other foot (or perhaps hoof), as it's a milk board that's threatened to file suit against PETA. PETA also isn't the first group or organization who've created a knock-off based on the 'Got Milk' marketing slogan. Most of these slogans were humorous and didn't strike at the very nature of the product and it's integrity like the PETA campaign does. As such, the milk board ignored them, and even in some cases relished the free publicity. But there's no ignoring or looking away this time for the milk group

It looks like the two groups are headed to court unless something can be worked out, which doesn't look likely at this point. The California Milk Processor Board hasn't filed a lawsuit as of today.

The milk processors' say there's absolutely no truth to PETA's claim regarding pus being in milk, especially milk produced and processed in California. Further, they say PETA is infringing on the trademark--"Got Milk"--which they own.

"Milk is one of the most regulated, tested and therefore safest products that consumers can buy," Steve James, the milk board's executive director said in a recent statement about the issue. "Pasteurization has been required for almost a century in order to remove harmful organisms and bacteria so it's safe for human biology."

Both sides have indicated they have experts lined up who can prove their respective points. First, if the case does go to trail it will be interesting to review the scientific evidence regarding pus in milk. Is it there? At what levels? If so what is the scientific consensus in terms of it's potential harm--and at what levels? If it's not there, the case will be moot. If pus is present in milk based on scientific findings, then there will be a basis for PETA's claims and campaign.

Second, the first amendment aspects of the case could be interesting. Milk is a generic term. As such, don't groups like PETA have a right to use it in a social marketing campaign? On the other hand, the U.S. Supreme Court has made clear that commercial speech is protected speech, and the milk board does have a trademark on the 'Got Milk' slogan. One could argue PETA's take-off on that popular slogan is just that--designed specifically to tap into the commercial popularity of the 'Got Milk' branding in order to create awareness and commercial gain in the form of getting people to drink less or no milk at all.

We're a bit surprised that the milk processors board hasn't rebutted PETA's campaign more solidly from a scientific standpoint--supporting there position that milk is pus-free and safe. Further, on their website the board makes little or no mention of the issue and their positioning on it.

By the same token, we haven't heard much about the PETA campaign. If we didn't search out such information as industry analysts and writers, we doubt if we would even be aware of the issue. Have you seen many 'Got Pus' T-shirts or coffee mugs around? We haven't. Additionally, PETA isn't showcasing the campaign prominantly on its website at present.

The best way to solve food safety issues like this is through science. Fact-based inquiry. Once the closest approximation of the truth is determined through the use of the scientific method, courts of law can then be used to determine potential remedies.

Of course, even if milk has pus as PETA argues, the milk board can still argue the group's use of the 'Got Pus' slogan is an infringement on their trademark. However, the issue is bigger than that--it's about the purity, safety and integrity of the product. In the final analysis, what's best for the consumer--safety, health and other variables--is what's most important for all concerned. It might take a court to sort that out.

Green Memo: Reusable Grocery Bags

A Stupid Bag: The reusable canvas grocery bag with an attitude

Start-up company A Stupid Bag has found a way to cut-through all the serious debate about using paper or plastic bags to package your groceries at the supermarket checkout. The company has introduced a line of four self-mocking, "eco-friendly" canvas grocery tote bags; each with a cheeky saying all it's own emblazoned on it.

The first bag embodies the company's name and motto as it's statement. Printed on the canvas bag in bold black letters is the simple phrase, "I'm Just a Stupid bag." This humble bag shows it isn't afraid to poke fun at itself. There's nothing "smart" about it.

The slogan on the second grocery tote speaks to both the bag line's simple design and reasonable price tag. It says proudly in bold black letters, "I'm a Very Cheap bag."

The third canvas grocery carrier--the" cheap bag's" naughty sister--states, "I'm A Cheap Shit bag." Not extremely creative, but it does scream CHEAP in a loud sort of way for those who aren't satisfied with a merely "cheap" tote.

The fourth and last bag kicks-up the humility and cheekiness (and foul language) quotients quite a bit. The message on this bag screams out, "I'm Just a F#*king bag." We wonder if a shopper might be asked to leave the supermarket with that one?

The tongue-in-cheek logo-bags are made in the USA from 100% unbleached canvas, according to a stupid person at A Stupid Bag. The lightweight bags are 15 x 15 in size and can be easily folded-up (perhaps a good idea with bag number four especially) when not packed with groceries.

Each canvas tote hold contents equal to two standard plastic grocery bags, the company says. Further, a company spokesperson says one tote can easily replace 700 plastic bags over the course of a year for a shopper who buys an average amount of groceries each week or month. (We did the math, and that's a reasonable estimate.)

All three bags in the line sell for $10.00 each. They're currently for sale only at the company's website: http://www.astupidbag.com/. However, the canvas tote line should also be available soon in stores in the U.S., Canada and the U.K.

In addition to the canvas shopping bag line's green attributes, A Stupid Bag offers an economic analogy, to suggest owning and using their bags provides an economic benefit to shoppers as well.

The company sights the fact that at Whole Foods Market, Inc. stores, shoppers get a 10-cent per-bag discount for using their own reusable grocery tote. Therefore, since the canvas bags only cost $10.00 each, they pay for themselves after only 100 uses at a Whole Foods supermarket--or at other stores offering a similar discount. After the first 100 uses then, it's money in the bank until the canvas bag falls apart.

Let's also not forget the personal statement the reusable grocery bags make. For some shoppers, that's worth even more than the environmental and economic benefits the cheeky totes offer.

Increased consciousness about using plastic grocery bags is creating a market for all sorts of reusable shopping or grocery bags--from 99-cent synthetic carriers made from biodegradable materials like corn and sugar cane, to fancy, high-end shopping totes created and marketed by celebrity fashion designers.

A Stupid Bag has jumped right in the middle--and a little off to the side--of this market, creating a line of inexpensive reusable canvas bags with attitude. And, perhaps ironically, the "I am an F#*king bag" is currently sold out on the company's website. Supply and demand issues, we expect. We can't wait to see their line extensions.

Friday Fishwrap: Business & Economy Memo

Warren Buffett Speaks: The 'Oracle of Omaha' on business, the U.S. economy, society and politics. He says the current sub-prime and securitized mortgage credit mess in the U.S. even perplexes him.

On Tuesday, billionaire investor Warren Buffett joined U.S. Presidential candidate Senator Hillary Clinton on a ballroom stage at the Hilton Hotel in San Francisco for a combination fundraising luncheon and question and answer session covering a wide range of topics.

On stage, Senator Clinton played the interviewer (a switch for her these days), asking Buffett her own questions and reading pre-written audience questions addressed to the legendary investor, about business, the U.S. economy and other weighty issues.

About 1,500 people paid from $100 to $2,300 to attend the luncheon and Q&A session with the Presidential candidate and the humble billionaire from Omaha, Nebraska. The event was a fundraiser for Clinton's Presidential campaign.

However, the Senator from New York and two-term First Lady doesn't have Buffett--or his support--all to herself. Instead, the 77 year-old founder and Chairman of holding company Berkshire Hathaway Inc., says he's supporting both Clinton and Senator Barack Obama for the Democratic Presidential nomination. He's also helping both raise money for their campaigns. (Half of Buffett is better than none of Buffett might be the feeling both candidates have.)

Buffett's Berkshire Hathaway Inc. owns 49 companies. Among these holdings are a number of food and grocery industry companies: confection maker and retailer See's Candies, grocery and foodservice distributor McLane Company, and International Dairy Queen, Inc., the fast food restaurant chain. Through Berskshire Hathaway Inc., Buffett also owns $1 billion worth of stock in British international retailer Tesco, which is a 4% to 5% ownership stake in the company. Tesco launched it's first U.S. retailing venture, Fresh & Easy Neighborhood Markets, last month in Southern California, Arizona and Nevada.

Below is a snapshot of Buffett's answers (and opinions) to questions asked by Senator Clinton and audience members at Tuesday's luncheon and Q&A session with the Presidential candidate and the billionaire:

Buffett on sub-prime and securitized mortgages, those risky financial instruments that have put the U.S. economy on the brink of recession.

Buffett: "You can't turn a financial toad into a prince by securitizing it," the Sage from Nebraska told Senator Clinton in response to a question she asked on the topic.

Buffett added that "even after spending a considerable amount of time scrutinizing funds that package up (the) mortgages", he found them confusing. Comenting on the morgages, Buffett said: "One can make more money selling toxic waste to customers (too), but that doesn't mean it's a good idea."

"In believing it's own PR on this (the mortgages)--they (Wall Street) started holding the stuff (securitized morygages) themselves (the funds and firms) because they couldn't sell it. It worked wonderfully until it didn't work at all. Now Wall Street is reaping what they've sown," Buffett said. "It will work itself out over time with a fair amount of pain. We (the U.S.) have an economy that can take it," he concluded.

Buffett on tax disparities in the U.S.:

In response to an audience question about the U.S. tax code, Buffett said he recently surveyed 13 workers in his Omaha, Nebraska office and found they paid an average tax rate of 32.9%, compared to the 17.7% that he, the worlds second-richest man, pays.

"My cleaning lady pays a higher tax on her earnings than I do on my dividends and investments," he told the audience. "It's better to earn in the boardroom than in the bathroom."

Buffett on the repeal of the estate tax:

Buffett, who's giving most of his fortune (estimated at about $50 billion currently) to the Bill and Melinda Gates foundation over a period of time while he's still living, told the crowd he opposes the repeal of the estate tax in the U.S. The estate tax brings in $24 billion a year to the federal government's coffers.

"Leona Helmsley (the late New York multi-millionaire who was nicknamed the "Queen of Mean" for the way she treated her employees) left $12 million to her dog," Buffett said smiling. "If there was no estate tax, the dog would have gotten $22 million."

Buffett on the growing income disparities between average and wealthy Americans:

"In the last seven years, the super-rich have gotten a huge break," Buffett said. "It's been a marvelous, marvelous time to be super rich. But too bad, nothing trickles down," he added.

Buffett on the U.S. economy and its ability to rebound:

Buffett told the Hilton ballroom audience he has faith in "the ability of the American economy to generate more and more prosperity. The real test of this country will be how widely is that prosperity shared," he added.

The "Oracle from Omaha" sounded a cautionary note when he said he feels "strongly that the U.S. is making a serious mistake by importing $2 billion a day more than it exports."

He explained with an analogy: "If you force-feed $2 billion a day to the rest of the world, they get somewhat less enthusiastic over time--and their dollar is worth less," Buffett said. "We're (the U.S.) like a very rich family; we own a farm the size of Texas but want to consume more than the farm generates. Every day, we sell off or mortgage a piece of the farm."

"If this policy continues, the rest of the world will own more of our farm," Buffett added. "Future generations will not like that they spend part of their workweek paying off (this generation's) cost of consumption."

Buffet on how he chooses and votes for a Presidential Candidate:

Answering an audience question about how he chooses a candidate, Buffet smiled and said, "I vote the same way I select a CEO--I'm looking for someone with brains and quality who can lead."

Our view:

Suggestion to both Clinton and Obama: You could make a worse choice than Warren Buffett as your Vice Presidential running mate.

Why? He will keep you down to earth for starters. The Oracle of Omaha's favorite beverage is Diet Coke. His favorite meal is a burger and milkshake from Dairy Queen. Buffett suffers no fools.

He also would provide you with an ongoing education on the U.S. and international economies. Buffett's favorite hobby isn't a hobby--it's reading and gaining more knowledge than he already has. He's said that's the main reason he owns a newspaper among his many holdings. He's also a pretty good investor, we might add.

Buffett also would be a pretty good point-man in the selection of your Secretaries' of Commerce and Treasury. One can imagine he would have a few good questions for the perspective candidates for those positions.

Buffett is the perfect link to both Wall Street and Main Street. He's as comfortable in the boardroom as he is on the shop floor, or talking to managers at the local Dairy Queen or See's candy shop. Buffett also has a great BS detector--something every President should demand his key aids come equiped with--and use.

Buffett also wouldn't be too shabby as an international representative, a role Vice Presidents seem to have been filling more and more in the last two administrations. The plain-spoken Sage from Nebraska is well-known and respected internationally at the highest levels of government and business. When recently in China, Buffett was mobed on the street like he was a rock star. (He is an economic rock star in capitalisy-hungry China.) He also was invited to meet with China's top government officials when they heard he was in town.

Lastly, Buffett is frugal--notoriously so. Don't believe us? Take a look at the Berkshire Hathaway website, for example. Spare comes to mind. He also travels alone, even internationally. No aids, assistants or secretaries travel with Buffett. He does take a handful of the Presidents of his holding companies with him wherever he goes overseas. But there's a frugal strategy behind that as well. Buffett says if there's an opportunity for a company President to do business in a country he's traveling to, he takes them because it helps make the trip better pay for itself in terms of a cost-benefit analysis.

If, as most of the candidates say, they want to cut spending--Buffett's your man for that. If allowed to, he could probably find so much waste in government that Congress would be faced with a new problem: How to spend the huge surplus the legendary investor handed them. Our tongue is only partially in our cheek, by the way.

These are just a few of Buffett's many qualities. In fact, he's probably overqualified for the VP position. And, alas, we doubt either Clinton or Obama--or any other candidate--will ask Buffett to serve as their VP. However, the next President--Democrat, Republican or Independent--would be well-served to ask Buffett for his advice on a wide-range of economic and social issues. If the new President does that, he or she also will get that Washington, D.C. rarity--the honest, plain-spoken, unvarnished truth as Buffett sees it.

(Photo of Hillary Clinton and Warren Buffett courtesy of KCBS Radio.)

Mid-Week Marketing Memo: Tesco's Fresh & Easy

Analysis: Three reasons why Tesco's Fresh & Easy Neighborhood Markets venture could be a huge success--and three reasons it could be a historic food retailing failure

Unless one lives in a media-deprived cave these days, they likely know all about the launch last month in the Western USA of Fresh & Easy Neighborhood Markets, the convenience-oriented, hybrid basic grocery market, fresh foods format retail food store from British grocer Tesco. (If you do live in that media-deprived cave, just type Fresh and Easy, or Fresh and Easy Neighborhood Markets into the search box at the top of this blog.)

To date, Tesco has opened 24 Fresh & Easy grocery markets in Southern California, Arizona and Las Vegas, Nevada. The majority of the stores thus far are located in Southern California. As we've reported, Tesco also will begin opening Fresh & Easy stores in Northern California early next year. The grocer also is looking to expand--perhaps as early as mid 2008--to Chicago, New York and Florida.

We call the 10,000 to 13,000 square foot, convenience-oriented Fresh & Easy Neighborhood Markets format, a cross between a limited assortment, neighborhood independent grocery store and Trader Joe's. Like the limited assortment neighborhood independent, or limited assortment, small format price-impact chain (think Aldi or Supervalu's Save-A-Lot for example), Fresh & Easy stores offer a selection of national brand and private label groceries.

And, similar to a Trader Joe's, the grocery markets' offer a selection of fresh produce (mostly pre-packaged), meats (all pre-packaged) and other perishables. Fresh & Easy stores also feature (more so than Trader Joe's) a strong selection of prepared foods, ranging from basics like meat loaf and mac n' cheese, to more upscale offerings. All of the prepared food items are made at the grocer's kitchen facility in Southern California and delivered to its stores daily.

On the basic grocery side of the strategy, Tesco is positioning the stores as a price-impact/low-price leader grocery store. Early November price comparisons in Southern California done by us and others like the Los Angeles Times, showed Fresh & Easy to have lower overall prices on a market basket of basic grocery items than all the region's major supermarket chains: Ralph's, Von's, Stater Bros and a couple others. In fact, Fresh & Easy store retail prices on the items in the basic grocery market basket were about the same as those at the region's leading price-impact warehouse store.

At the other end, strategically speaking, Tesco has positioned the grocery markets as the "premium" retail destination for fresh, prepared foods--ready-to-eat, ready-to-heat, and grab-and-go selections. The stores' also have a slight hint of upscale in their wine, beer and spirits selections; a nod to Trader Joe's merchandising philosophy. There's even a version of TJ's famous "Two-Buck-Chuck" $1.99 per- bottle wine. Fresh & Easy's version is a Shiraz variety from Australia, branded as "Big Kahuna." It sells for $1.99 bottle as well.

The Fresh & Easy format

The Fresh & Easy format qualifies as "new" in U.S. food retailing in our analysis. That's not to say it isn't more like existing formats than it is different, as we described above--but rather that the grocer's positioning and merchandising strategy in the small format box qualifies it as "new" to the U.S. food retailing scene in the main. (Note: we use quotes around "new" to denote a nuanced definition of the word.)

What makes the Fresh & Easy format qualify as "new" in our analysis is the combination of price-leading, basic grocery product retailing, combined with fairly upscale prepared foods retailing at the same time in the same small box. The only similar food retailer doing this type of "high-end/lower-end" merchandising and positioning in a large way is Costco. It's extremely successful warehouse stores combine low prices on basic groceries and other consumer goods with specialty, gourmet, natural and organic grocery offerings.

Costco's prepared foods program also ranges from the very basic, to much higher-end offerings. It's the preferred place to shop for everything from inexpensive car batteries, to expensive champagne and organic cereal, which you see co-mingled together in the shopping carts at the stores' regularly.

However, it's one thing to be able to do such low-price/high-end merchandising successfully in a big box like Costco does, and quite another thing to be able to do it successfully in a 10,000 square foot store.

Three reasons why Fresh & Easy could be a big success

Here are the three reasons Tesco's Fresh & Easy stores could be successful. First, is what we call the "big box blues." Shoppers (especially middle-aged and older ones) are getting tired of navigating huge Supercenters and superstores. Everything from the amount of time it takes to find a parking spot in the stores' huge parking lots, to traveling miles inside the store while shopping, to waiting in long checkout lines, is making many shoppers in the U.S. seek out smaller format alternatives. There are numerous studies backing up this fact. Walgreens, which is about the size size as Fresh & Easy, is one of the hottest drug retailers in the nation, for example.

With it's small footprint size and combination low-price focus and fresh, prepared foods positioning, Fresh & Easy stores might be able to capitalize on this growing consumer trend. If shoppers feel they can get their Bounty paper towels, Tide detergent, and Best Foods Mayonnaise, along with prepared foods and fresh produce and meat, at a convenient store that offers good prices, they just might make the switch to Fresh & Easy from their current supermarket. It's these primary shoppers Tesco hopes to lure to its stores in addition to secondary ones. In fact, it needs to lure a mix of primary as well as secondary shoppers to succeed.

The second reason Fresh & Easy stores could succeed is what we term "the ubiquity factor." Tesco's strategy is one that plans on emulating that of powerhouse coffee retailer Starbucks. Put a Fresh & Easy grocery market in every neighborhood in its trading area, Tesco's philosophy goes, and shoppers will beat a path to your door--just like they do at Starbucks.

Ubiquity is a good strategy, but not by itself. Like Starbucks, the Fresh & Easy retail offering must be appealing to consumers first. If so, then having stores in "every" neighborhood will not only reinforce that positive offering with shoppers, it also will add a uniformity and convenience factor. Like Starbucks or McDonalds, consumers know that regardless if they visit a store in California, New Jersey or South Dakota, there will be a uniformity in the experience.

Third and last, Tesco's Fresh & Easy format could succeed do to the most basic of all retail variables--price. If Tesco can maintain it's current retail prices on basic groceries--which we have doubts about--it will essentially be the low-price leader in it's markets. In the Southern California market basket price surveys we mentioned earlier, Fresh & Easy stores were 8-10% cheaper than nearby Ralph's (number one market share) and Von's (number two) supermarkets. (The market basket contained basic items like milk (gallon), eggs (dozen), laundry detergent, toilet paper, mustard, ketchup, and other everyday grocery items. Only everyday retails were compared. Items on special were excluded.)

These percentage differences are huge. However, we have doubts Tesco can maintain these retail price differences over time. It's one thing to price that low early in the game, but maintaining such prices over the long-term is another story. At some point a retailer has to make money. At the current retail prices, Fresh & Easy stores' will have to sell lots of higher margin prepared foods to even come close to hitting standard U.S. gross margin levels for food retailers.

However, if the British grocer can somehow maintain these low retails, it could make them a formidable competitor in the basic grocery sector. There is one problem though. The store's selections are just too limited in assortment. To grab primary, basic grocery shoppers, Tesco will have to expand the grocery selection (especially national brand) in the Fresh & Easy stores, in our analysis.

Three reasons why Fresh & Easy could be a big failure

The often repeated phrase, "I have good news and bad news, which do you want to hear first?" seems a good opening sentence at this point. We gave the good news regarding Fresh & Easy's potential fate first. So here's the bad news--three reasons why the British grocer's U.S. venture could go the way of Webvan (1990's online delivery service flop touted by many as a venture that would revolutionize food retailing) and Krispy Creme Donuts (one of the most promoted concepts and hottest stocks in the 1990's. Today, it's nearly bankrupt.)

First, Fresh & Easy could fail do to "operational and retail ethnocentrism." What, you ask? We'll explain. Tesco has imported from the UK nearly it's entire supply chain for it's Fresh & Easy Neighborhood Markets venture. It's fresh produce and meat procurement is being done by a British firm, which has set up shop in Southern California. Ditto with it's wine and spirits importation and supply chain. It's private label program also is imported from the UK.

The grocer's prepared foods operation also is British. Rather than preparing the foods in-store, as is the proven method with U.S. supermarket chains and independents that are successful in prepared foods merchandising, Tesco's operation is a centralized kitchen operation. The prepared foods items are then delivered to the stores. While we understand why the grocer is doing this (store size is a key factor), it's risky to do in the U.S. based on a number of similar attempts--and failures--by other food retailers to so so. (We aren't suggesting it's wrong to try it though.)

The stores also offer too few nationally branded grocery items, and too many private label we believe. Clearly, Tesco likely believes that if Trader Joe's can do so well with mostly private label, so can Fresh & Easy. However, part of TJ's charm is it's quirky store brand items, mostly specialty, natural and organic packaged goods. Additionally, it's taken TJ's many years to establish it's private label program. When it comes to more basic grocery items, rather than specialty and natural groceries, U.S. consumers generally look to national brands, although that is changing with the advent of quality store brand lines.

In order to succeed, we believe Tesco will need to localize it's operations and product mix more--not only to the U.S. as a whole but to the communities and even neighborhoods where its stores are located. Buying local is one of the top trends in the U.S. It's also a wise move from a marketing perspective for a foreign retailer (ask Wal-Mart, especially in Canada and in the UK with ASDA) to localize it's operations and merchandising mix as much as possible in the countries where it does business. In fact, Tesco has a major local initiative in the UK. Why not in the U.S. with Fresh & Easy? Maybe it's coming?

The second potential ingredient for failure is ironically one of Fresh & Easy's ingredients for success. It's flip side if you will. That ingredient is the stores' format and positioning itself. The combination basic grocery/low-price leader/prepared foods positioning runs the risk of confusing shoppers. For example, primary shoppers want extensive fresh produce and meat departments in the stores they shop regularly at. Fresh & Easy has neither. They also want an extensive enough selection of basic groceries, and national brands, available to them so as to not have to always shop at two different stores. Fresh & Easy fails on that count as well.

Despite the great prices, the store's currently seem in our analysis to be secondary and tertiary retail destinations rather than primary ones. Trader Joe's does very well as a secondary shopping-type retail chain. However, it's a strong secondary retailer. The question is, with TJ's playing that role well, is there room in that same space for Fresh & Easy? We think not. Rather, it needs a mix of primary as well as secondary shoppers in order to succeed, especially on the scale Tesco has in mind for the chain.

Lastly, Tesco's Fresh & Easy franchise could fail based on customer service. The chain is using a self-scanning, self-checkout scheme in its stores. Each checkout has a scanner that customers are to use on their own to compute their order. Currently, in the stores thus far opened, staff is at the checkouts to help shoppers, and to help them bag their orders if it looks like they're adverse to doing so themselves. We can tell you from observation shoppers are in the main adverse to doing so.

Most shoppers we've (and others) have observed didn't seemed all that pleased to do the self-checkout. Although tried by some food retailers in the U.S.--mostly limited assortment warehouse-type stores--it isn't as of yet a popular option with U.S. shoppers. At Fresh & Easy stores, self-checkout also lends to the format confusion mentioned above. The somewhat upscale store design, combined with the extensive prepared foods offerings, tends to negate a feature like self-checkout. There's an incongruity to it.

Most of the store staff we've observed, and heard about from other observers, are friendly and try to be helpful. They seem like a great bunch of people. However, we've also heard from many that compared to Trader Joe's, for example, Fresh & Easy staff seems far less knowledgeable about the stores' product mix and operations. We're willing to chalk that up to the newness of the venture--after all the first stores just opened a month ago, and some have only been open for weeks or days. It's something Tesco must correct however, and build better training into their culture so that new hires can hit the ground running from nearly day one. In stores that small, associates should be neighborhood friendly, and extremely knowledgeable about store product mix and operations.

Conclusion: balance, perspective and the future

In many ways, while writing this piece we thought it premature of us to even do so, considering the newness of Tesco's Fresh & Easy retail venture. However, in part we're doing so because we think some analysis and perspective needs to be offered on the operation to date.

About 70% of the U.S. business press is proclaiming Fresh & Easy as the second coming in food retailing in the U.S. writing that it will become a dominant player nationally in as little as five years, for example. Conversely, about 15% of the business press has already doomed Fresh & Easy to the dust bin of U.S. retailing history. This is especially true among the UK business press, by the way. The remaining 10% seems to be offering a balanced picture of the venture. They're offering that Fresh & Easy stores offer something new, with the potential to succeed, but with lots of improvements needed in order to get there.

Our main point in this piece is just that. It's clear Fresh & Easy is far more than an experiment for Tesco in the U.S. It's a major venture. The grocer has hit the ground running--and with a fat wallet--offering up a food retailing start-up the scale of which hasn't been seen in the U.S. for a long time, especially from a foreign retailer. Stores are opening weekly and major geographic expansion plans are being rolled out at the same time. Success and failure will come, as it does in all aspects of retailing, based on having the correct strategy, positioning and execution, along with those external variables like timing and the economic environment.

Tesco has miles to go with Fresh & Easy to get there (success) in our analysis. The strategy, positioning and execution all need evaluating and some rethinking. In particular, we suggest reviewing the extensive research the chain did on U.S. consumers. There is some disconnect between all the valuable data the grocer gathered and how that information ended-up getting translated at retail.

Additionally, localize. Tesco needs to shed its ethnocentrism a bit and bring in more U.S.-based trading partners, as well as tailor the stores more to their communities and neighborhoods. Lastly, don't make (retail pricing) promises you can't keep. Nothing will hurt Fresh & Easy more than Tesco having to raise its retail prices on basic groceries considerably down the road because the items were priced to low to begin with. Consumers are likely to take this as a bait-and-switch type scenario and might not forgive it.

Being a low-price grocery leader, along with a fresh, prepared foods leader and somewhat upscale grocer combined, isn't an easy niche to build. We give Tesco credit for attempting it. We also suggest Tesco executives study Costco in that regard. Positioning is identity. A strong identity can lead to retail success. A bad one to failure. The good news is, there's plenty of time to make that positioning and identity better for Tesco. The bad news is, it can only be done by first shedding some of that operational and retail ethnocentrism.

Farm-to-Food Memo: An Independent grocer's view

We are what we eat: A Boston, Mass. independent grocer talks about clean, organic and local food; sustainability, mass food production and society, and how his family market and cafe fits into the picture

Writing today at alternet.org, independent grocer Jamey Lionette says, "I am not a scientist, journalist or other specialist. I sell food. I help run a family-owned and operated neighborhood market and cafe that buys and sells predominantly local, clean and sustainable food."

In his article, Lionette, who with other family members runs Lionette's The Garden of Eden Market and the Garden of Eden Cafe, both located on Tremont Street in Boston's South End neighborhood, says "We Are What We Eat," which is the title of his piece. "I cannot speak about the reality of our food supply around most of the world," Lionette writes. "I can only speak of what is happening in the first world, where, unfortunately, only the privileged elite can choose to put real food on their dinner tables.

We believe Lionette's piece (and opinion) is an important one, especially since it comes not from a professional analyst, industry consultant, or pundit. Rather, it comes from an independent grocer, who deals with customers each and every day in his store and cafe. An independent grocer who spends much of his time buying from local growers, wholesalers and others, and has created a strong niche so that the store can not only compete against the large chain supermarkets in the region, but also can offer shoppers something more: that local touch only an independent grocer who lives and works in the neighborhood can bring when it's done well.

Lionette also discusses farming today, and how it impacts on his family's grocery store and cafe vis-a-vis his larger grocer competitors, such as Whole Foods Market, Inc., Trader Joe's, Wal-Mart and others. He further offers his opinion about the social implications of mass-production on the overall farm-to-food picture, and contrasts it with organic and local foods. But at what financial cost he asks, in discussing the prices of organic foods at retailers like Whole Foods and others.

We invite you to read Lionette's piece, which is excerpted from the book, Manifestos on the Future of Food and Seed, edited by Vandana Shiva (South End, 2007), as an independent grocer's (as well as writer's and citizen's) analysis of modern farming, food manufacturing, marketing and retailing. It also focuses on the larger economic and social implications of all of the above.

We believe the independent grocer's perspective is more important today than ever before. It's the independent who's been the innovator in food retailing. The first mover if you will. The first to merchandise organic foods, local goods, specialty products and so much more. The independent also is the backbone of the community and neighborhood. He or she is often the first merchant to put out a fund-raising canister, the first to support local groups and food drives, and the one who sustains those efforts in the neighborhood over time.

Often, when people discuss "buying local," they tend to leave out "shopping local" when it comes to their food shopping. In other words, shopping at the local independent grocer's store. How often do you here someone say: "I bought some great locally-grown vegetables at Whole Foods?'" Or, (fill-in the chain store name) offers locally-grown fruits, and I buy them every week? The point is: "eating local" folks also should think more about shopping local as well. Often supporting ones local grocer is supporting those same ideals involved in buying local foods.

We agree with some of what Lionette says in his piece and disagree with other parts. However, that's not what's important. What's key, and what we hope you walk away with after reading his piece, is his perspective on the issue, along with some new knowledge you can think about and perhaps even put to work in your day-to-day business activities.

Read the full piece, We Are What We Eat, by Jamey Lionette

Monday Morning Java: Safeway Small Format Stores On the Way

The small food store format invasion is coming: Safeway, perhaps Wal-Mart, to counter Tesco's Fresh & Easy Neighborhood Markets' San Francisco Bay Area entry

As our readers know, we've been reporting on and writing extensively about Tesco's Fresh & Easy Neighborhood Market format. In particular, we've been among the first publications to break news about the retailer's Northern California plans. (Read our December 5 story about Fresh & Easy store developments in Northern California and the Bay Area here.)

We also were one of the first publications to report that Wal-Mart has had a high-level team in the San Francisco Bay Area working on the development of two small format retail stores--one a small footprint, convenience-oriented grocery store similar in concept to Tesco's Fresh & Easy markets, and the other a stand-alone health and wellness-style format which would feature an in-store health and wellness clinic and sell a wide range of health-oriented goods, including natural products. (Wal-Mart has trademarked two retail store names, "City Thyme" and "Field & Vine," as we reported here.)

We named the Wal-Mart small format project--along with the Fresh & Easy format and other new age convenience-style stores from the likes of Giant Eagle (Giant Eagle Express) and Whole Foods Market (Whole Foods Market Express; a prototype store being developed in Boulder, Colorado)--"Small Marts," a play on words combining the Wal-Mart name and the shortened name often used for a retail market or store.

In our September 6, 2007 piece, The invasion of the "Small Marts": Will there be a small format revolution by U.S. retailers, we provided an analysis of what Tesco's Fresh & Easy format could mean in terms of other food retailers following a similar path in the U.S. In addition to discussing Giant Eagle's, (Express) Whole Foods' (Express) and Wal-Mart's developments, we also talked about Pleasanton, California-based Safeway Stores, Inc. It's CEO, Steve Burd, said the grocer is watching Tesco closely, and researching the Fresh & Easy format, it's potential locations, and possible competitive pressures on the retailer's Western U.S. operations, especially in California. (Read more here.)

In the "Invasion of the Small Marts'" piece mentioned above, and in all of our writing on the issue, we've discussed how one market in particular, Northern California and particularly the San Francisco Bay Area, will be the most competitive and difficult for Tesco with its Fresh & Easy stores thus far--compared to Southern California, Nevada and Arizona--where the British grocer now has about 20 stores open.

Among the reasons for this increased competition, we've sighted Safeway Stores--the fact that it's the food retailing market share leader in the region, that the Bay Area is home to it's corporate headquarters, and of course the small format research project articulated by CEO Burd in response to the entering of Fresh & Easy stores in the region.

Additionally, we've discussed the major expansion efforts in Northern California (focused in the Bay Area) by Whole Foods Market, Inc., which plans to build 20-25 large supernatural supermarkets in the region (in addition to the 20-plus it already has) in the next five years, according to former Whole Foods' Northern California president Anthony Gilmore, who left his position with the grocer in October to join Safeway Stores as a director of new store development.

Safeway moving from research to action in small format store development

According to a story today in The Silicon Valley/San Jose Business Journal, CEO Burd and Safeway are moving from the research phase of their smaller format food store project to an action phase. That's right, according to the publication's sources (and confirmed by a number of our own), Safeway Stores is seeking as many as five locations in the San Jose area for stores of about 20,000 square feet, which would feature extensive selections of fresh, prepared foods, Tesco's "stock-in-trade" in it's Fresh & Easy format. At 20,000 square feet, these smaller-format stores would be less than half the size of Safeway's new Lifestyle stores, which average 45,000 to 65,000 square feet, but about double the size of Tesco's Fresh & Easy markets.

According to the Business Journal story, Safeway has retained Cornish & Carey Commercial Real Estate Brokerage to find locations for the five stores in and around the San Jose area. This is the same Bay Area region where we reported Tesco has inked a deal for it's first store in the Bay Area, on Bird Avenue in San Jose, and likely will locate as many as ten to twelve stores in the city and it's immediate environs.

Word is Safeway has Cornish & Carey trying to lock up a number of former Albertsons' supermarket buildings in the San Jose area for its new small format food stores. This is interesting since Tesco's Bird Avenue location is a former Albertsons' store, which the grocer closed a couple years ago along with a number of others in Northern California. Tesco has been targeting these empty Albertsons' stores throughout the Bay Area as locations for its Fresh & Easy Neighborhood Markets.

Safeway is a major commercial real estate player in the Bay Area, with almost 300 stores. In other words, it's a priority customer for shopping center and other commercial real estate managers. As such, it looks like the grocer is playing some store location hardball with Tesco in terms of that retailer's sight search. In the Business Journal piece, local commercial real estate sources give Safeway the thumbs up in terms of being the preferred tenant for any of the vacant Albertsons' stores. As we've reported however, Tesco already has a number of store locations locked-up in the Bay Area, with numerous other sights in negotiation.

As mentioned above, some months ago before Tesco opened a single Fresh & Easy store, CEO Burd said Safeway was preparing itself for the British grocer's small format stores, which combine basic private label and nationally branded grocery items with prepared foods offerings. Burd said, among other things, he believes Safeway has an advantage in that the grocer is a well-known brand in California (especially in the Bay Area), especially in the prepared foods niche. In fact, Safeway has been perfecting it's fresh, prepared foods over the last five years in it's Lifestyle format stores, including branding the items with an upscale flavor, using such names as Safeway Signature and Safeway Select.

Along with the extensive prepared foods initiatives in-store in its Lifestyle format supermarkets, Safeway purchased a restaurant in San Jose last summer, where it's been testing various prepared foods entrees it wants to sell in its stores. Ownership of the restaurant, called Citrine New World Bistro, was announced last month by CEO Burd. It's an innovation incubator, and consumer test kitchen for a variety of prepared foods that observers expect will be offered in the new, smaller format food stores.

Anthony Gilmore, the former president of Whole Foods' Northern California division also joined Safeway in October as a director for new store and format development. While in charge of Whole Foods' Northern California operations, Gilmore lead the development of a number of innovative formats, resulting in new stores opening this year. Among them are the European Food Hall format store in Oakland, which opened in October, and the Northern California flagship store in the Silicon Valley city of Campbell, which features a food and wine bistro in-store, along with the supernatural grocers first mini day spa, among other innovative features.

Gilmore was hired in large part to bring that experience in retail food store format innovation to Safeway, where he began his retail grocery career as a courtesy clerk. He's involved in the new small format store development, including the prepared foods offerings, as well as in another new development for Safeway--the design of a "next generation" Lifestyle format, which is part Safeway Lifestyle stores, part Whole Foods Market. As we reported three months ago, Safeway is planning to build this new, Whole Foods-like store in Pleasanton, where it's corporate headquarters is located. (More on this development soon.)

Turf war battle, small format competition could get even hotter in Bay Area

As we mentioned at the beginning of this piece, and first wrote about in August and again in September and November, a high-level team from Wal-Mart was in the Bay Area for some time researching and developing two small retail formats for potential implementation by the retailer. These two formats, a small-footprint grocery market and health and wellness store, would allow Wal-Mart to enter into markets such as the San Francisco Bay Area where they've been unsuccessful in getting permits to build Supercenters do to objections by city officials, community groups and the retail clerks union, which represents workers in nearly every Bay area supermarket.

We've continued to follow this story closely. However, our commercial real estate and industry sources in the region haven't heard much in the last couple months. Here's what we know: First, as reported earlier, Wal-Mart has trademarked two trade names for use on "unspecified retail stores." These names are "City Thyme" and "Field & Vine." Both these names sound like they would fit a retail food store but we can't independently confirm that, nor is Wal-Mart confirming it for us.

Second, we know the Wal-Mart team is no longer in the Bay Area. Our sources told us the group completed their project, at least the on-site aspects of it. We have been told, but can't confirm, that a report on the small format research has been given to Wal-Mart CEO Lee Scott.

We've also been told by multiple sources that, in terms of the small format grocery market, there's a division within the team in terms of going forward with it or just focusing on the retailer's existing smaller format grocery store, Wal-Mart Neighborhood Market. These stores average about 48,000 square feet in size, and are a full-department supermarket. Although much smaller than a Supercenter, they aren't considered "small format" in terms of the supermarket industry. Rather, they're about average size in terms of a stand-alone grocery store.

Regarding the small format health and wellness stores, we've been told Wal-Mart is more excited about their potential, especially the combining of in-store health clinics with the natural, health and wellness-oriented product mix. (Wal-Mart is putting an increasing number of health clinics in its Supercenter stores.) Beyond that, we don't currently have any further specific information we're comfortable reporting in terms of that format's status.

We do know Tesco's rapid rollout of it's Fresh & Easy stores has taken Wal-Mart a bit by surprise, and that the retailer is concerned about Tesco's taking food dollar market share away from the retailer in California. Wal-Mart has only been able to build about half of the number of Supercenters in the state as it planned to build to date, do to the highly-organized campaigns against the big box stores throughout California. As a result, this fact has caused the retailer to lower its projections considerably in terms of the share of retail food sales it planned to have in the Golden State.

Wal-Mart recently announced it would build two Neighborhood Markets in Southern California early next year, its first in the state. This has lead to speculation that the retailer will rollout this format as a way to increase its retail food dollar market share in California as an alternative to its original Supercenter strategy. There's less organized objection to this Wal-Mart format.

If Wal-Mart either rolls out its Neighborhood Market stores in a big way in California--including Northern California and the Bay Area,which is logical as that's where the strongest Supercenter objections are--or goes forward with its "Small Mart" grocery market format, this will add even more heat to the smaller food store competitive landscape in the region. Not only will Safeway be challenging Tesco with it's 20,000 square foot format, but Wal-Mart could pose a serious challenge to both with either its 48,000 square foot Neighborhood Markets or the yet to be officially announced smaller format grocery market (the "Wild Thyme" or "Food & Vine" concepts).

As we've written extensively, Northern California and the Bay Area will be a competitive and operational challenge for Tesco's Fresh & Easy Neighborhood Markets. It also seems the region's going to become a small format food retailing laboratory of sorts as a result of Fresh & Easy's entry into the market next year. Our sources tell us there are a number of other retailers looking at the small format food retailing opportunities for them in the region as well. The small format turf battle and competitive environment in the region is just beginning--and will heat-up even more soon.

Friday Fishwrap

Week-ending news, analysis and insight

Retail Innovation: British grocer Waitrose opens second 'premium' store

Upscale British grocer Waitrose opened the second store in its new "premium" store format last week in North London. The new store follows on the heels of the first "premium" store, which opened in June 2007 in Central London, and has been deemed a success by the growing and innovative grocer.

Key to Waitrose's "premium" store concept and format is the tailoring of each store to the culinary taste's and shopping habits of customers in the store's local neighborhood. It's a form of "hyper local" merchandising by Waitrose, which is considered to be Britain's leading upscale specialty grocer.

The new North London store, located on Finchley Road, follows this localization concept established by the prototype Central London "premium" store. To accommodate all its premium features and offers, Waitrose expanded the formerly 9,000 square foot North London store to 28,000 square feet, by taking over and renovating a former retail store located next to the market.

Among the new premium features the grocer has added to the store include what is calls The Time of Day Shop. At the shop, customers can order prepared foods depending on what time of day it is. In the morning for breakfast shoppers can order granola, smoothies, muesli, fresh fruit and juices. For lunch, the shop features fresh, prepared soups and an extensive selection of made-to-order sandwiches. For dinnertime, customers can choose from a menu of ready-to-eat meals, entrees and side dishes.

The store's butcher shop features a bounty of fresh cuts of meat and lots of poultry. The extensive selection includes local dry-aged and organic Angus beef, local Berkshire free-range pork, and local organic and free-range birds.

There's also a fresh fish and seafood department that offers over 70 varieties of fresh-caught fish and other delights from the sea and the (fish) farm. Included are sustainable-farmed fish varieties and "cruelty-free" caught versions of wild fish and seafood.

In the center of the store is what Waitrose says is its "premium" format's showpiece, a grouping of patisserie, cheese and charcuterie counters that form a gourmet island right in the middle of the store. This "gourmet island" features the best quality cheeses, meats and baked goods. Local delights are mingles with the best from around the globe.

As part of it's "premium" format, the store (as does the Central London market) merchandises an expanded (and even more high-end) selection of specialty and gourmet groceries. Since all Waitrose stores carry more specialty, gourmet, ethnic, natural and organic packaged goods than the average supermarket in Britain, this means the premium stores are jam-packed with the specialty goods.

The store also carries this expanded theme in the specialty and natural foods categories over to it's produce department, where the store offers expanded selections of fresh organic, specialty and exotic fruits, vegetables and herbs.

Upscale, premium wines, spirits and beers also are given center stage in the "premium" stores adult beverage department. In particular, the wine selection is extensive and impressive.

The "premium" store format is Waitrose's attempt to take it's upscale everyday merchandising philosophy up further a notch into an even more culinary focus. It's also an attempt to drill-down even further on a neighborhood level and offer custom-tailored items, along with its premium selection, based on the particular tastes of local shoppers.

The launching of the premium format was prompted in part by the entry into London by U.S. grocer Whole Foods Market. Whole Foods opened it's first European store in London about six months ago. Waitrose is Britain's leader in specialty and natural foods merchandising and has said it doesn't plan to cede sales in any form to Whole Foods. The "premium" store format is in part a demonstration of that commitment by the upscale British grocer.

Friday Fishwrap Wrap-up

What others were writing about this week

Holiday Ham Promotion From Hell: Someone at Balducci's famed Greenwich Village, NY gourmet grocery store either made a monumental promotional merchandising mistake, or was stretching for some retail humor last Saturday, when they labeled a boneless spiral ham in the store's meat case as "Delicious for Hanukkah." (See pic below, left.)

The colorful red, white and blue sign, labeled with bold black letters, was spotted by Manhattan novelist Nancy Kay Shapiro, who took a picture of the ham and the sign and gave a copy to the New York Daily News, who reported on the incident today.

Shapiro, who refers to herself as an unobservant Jew, told the Daily News she first saw the sign on the ham in the store on Saturday. She returned on Sunday with her camera. The sign was still on the ham she said, so she snapped a few pictures. Rather than tell the store management about the promotional mix-up--observant Jews generally don't eat pork for those who don't know--she posted the pics on her personal blog.

"I just thought it was funny," Shapiro told the Daily News. "I wasn't offended in any way. I just thought, here's somebody who knows nothing about what Jews eat.'

Somebody must have let Balducci's in on what must be the worst kept secret in food history because Shapiro said when she returned to the store to do some shopping that following Tuesday night, the sign was gone. It was Hanakkah that Tuesday night. (read the New York Daily News story here.)

More Ethnic Marketing Failures: Wal-Mart, the world's largest corporation and international retailer, seems to have found itself in one country where it isn't having success--South Korea. At a recent symposium at South Dakota State University, South Korean exchange professor Dr. Kye-Song Chung told the audience Wal-Mart's lack of current success in the Asian country is largely do to it's failure to adapt it's stores' to South Korea's local custom's and practices, according to a report in The Collegian, the student-run campus newspaper. (Read The Collegian story here.)

Speaking of South Korea, and Koreans: Korean bakeries are booming--and raking in dough--in Atlanta, Georgia, according to a story in the Atlanta Journal Constitution. Not only are these growing, single-format ethnic bakeries drawing Korean immigrants by the throngs, they're also becoming increasingly popular with shoppers of all ethnic backgrounds.

Atlanta has the third-fastest growing Asian population in the U.S. The Korean-owned bakeries are a fusion of European-style breads, cookies and cakes, with Korean ingredients like sweet rice and red bean paste. They also have French and Germanic sounding names like Hansel & Gretel and Cafe Mozart, giving them a multicultural flair. (Read the AJC.com story here.)

U.S. Consumers Trust Grocers, Activists Far More Than Government: The old saying, "I'm from the government and I'm here to help you," is often used as a joke to warn of the evils of believing anything a government official tells you, or offers to help you with. In the case of food information, it seems consumers are taking that joke to heart, according to a just released study on who U.S. consumers believe most about food, nutrition and related information.

According to the survey, conducted by GFK Roper Public Affairs for a group of PR and communications firms, the majority of consumers (64%) in the national poll said they trust activist groups the most when it comes to getting the facts and information about food choices, according to a report in Progressive Grocer Magazine. Further, they said these groups have consumers' best interests in mind when giving that information to them.

The survey respondents ranked retail grocers a close second. Sixty-two percent said they trust grocers for their food choice and related information. Food manufacturers ranked third at 53%, followed by government, in fourth place. Only 47% said they trusted the U.S. government as a source for food choice information. The U.S. government should thank the fast food industry, as it was the only institution or business the government beat in the survey. Only 26% of the consumers polled said they trust fast food companies for food choice information. (You can read the Progressive Grocer story here.)

More About Consumers: Flavor Food Trends: Speaking of the consumer, a new report from Datamonitor says consumers are polarized between two new food trends: exotic flavors and retro flavors, those foods from their past that evoke feelings of comfort and simpler times.

The trend towards exotic tastes--and foods and beverages--is well known to those of us who analyze or work in the industry. It's what's fueling the double-digit sales growth of ethnic foods and beverages and "exotic" products like superfruits, new-age beverages and other foods and beverages that tickle the palate.

Datamonitor says the two trends--exotic and retro seem to be polar opposites. However, they do have hedonism in common the report says. A summary of the research published in Foodnavigator.com suggests marketers can use the knowledge of these two trends to increase sales. One example is the use of "scent story" marketing to engage consumers on a sensory level and encourage emotional buying. (make your food or product smell like Mom's meat loaf, and her kitchen at home, and consumers will beat a path to your brand.)

Both exotic flavors and retro flavors lend themselves to "experiential" marketing in many other ways as well. With the exotic, its that popping on your taste buds--the taste sensation. With retro, it's that emotional connection and comfort feeling. (You can read the Foodnavigator.com survey summary here.)

Connecticut Whole Foods' Team Leader is A Green Leader: There's an old saying in retail that "If it doesn't happen at store level, it won't happen at all." We agree. And in the case of green or environmental principles, philosophies and practices for retail chain's, the store-level saying is even more true.

Whole Foods Market, West Hartford, Conn. The handmade sign on the store's door is a store-level touch by Tom Neal and his retail team.

Lucky for Whole Foods Market, Inc. they have Tom Neal as store team leader at the grocer's West Hartford, Conn. store.. When it comes to green principles and practice's, Neal is a true believer, and motivator, according to a story in the Hartford Courant. Neal and his store department managers carryout Whole Foods' green principals with gusto. And when it comes to environmental retailing, they ass their own store-level touches at their West Hartford store. Neal and company believe a green shopper is a happy shopper, and do their best to prove it daily. (You can read the Hartford Courant story here.)

Product Marketing Report

New product-line of the week: Crummy Brothers Cookies

There's nothing crummy about Crummy Brothers Cookies. The three Crummy Brothers (there real last name), Todd, Brain and Mark, have produced a line of gourmet cookies which incorporate two of the fastest growing food trends: organic ingredients combined with premium taste.

The line of indulgent cookies, made with Dagoba premium organic chocolate, include: Original (chocolate chip with a high chip count), Orange Blossom (organic chocolate and orange), Lemon Ginger (with dark chocolate chocolate chips from Costa Rica), and Chocolate (an infusion of pure organic cocoa along with organic milk and dark chocolate chips.)

Each of the Crummy Brothers has his specialty when it comes to making premium tasting cookies. Todd is a culinary perfectionist. He's the brother who can nuance a cookie recipe to perfection--and insists on organic ingredients. Brian is the chocolate chip expert. He demands only the best organic chips for the cookies which bare the family name. And Mark says he's on a cookie mission--to save the world from syrupy-sweet cookies.

Together, the three brothers have created a line of organic, gourmet cookies which are tempting the the sweet tooth's of cookie lovers throughout the U.S. Word is, seldom is there ever a "crumb" left. The cookie line is currently being slotted in all of the Whole Foods Market stores in the U.S., and also is available in select specialty stores. and online at the Crummy Brother's website.

The indulgent organic cookies don't come cheap--but then quality foods that combine organic and premium ingredients into a gourmet-quality product seldom do. Less can be more--and better. Crummy Brothers cookies sell for about $5.99 for a box of six.

The brothers are expanding distribution rapidly as well as working on some new flavors for introduction in 2008. Among the new varieties in development include: Chai Town (made with organic Chai), Peppermint Chocolate Chip, Oatmeal Chocolate Chip, Peanut Butter Chocolate Chip and German Chocolate Chip. All are organic of course.

One of the Crummy Brother's fans is celebrity chef Rachael Ray, who featured the Orange Blossom Chocolate Chip cookie as the "Snack of the Day" recently on her Food Network show

The brothers Crummy are tapping into three of the fastest-growing food trends in the U.S., and elsewhere. These trends are organic, premium quality taste, and indulgence. By combining all three of these hot-button food trends into a product, and creating a cookie that tastes great, the brothers should find some sweet success--as long as they can keep prices as reasonable as possible, gain distribution, and continue their fun-loving approach to marketing the brand.