Perishable Pundit

More Thoughts About Wal-Mart’s Marketside

Jim Prevor's PerishablePundit — Mon, 06 Oct 2008 19:30:00 EST

After visiting Phoenix to see the launch of Wal-Mart’s Marketside concept, we wrote a Special Report which we entitled, A Triumph in Phoenix — Wal-Mart’s Marketside Hits The Trifecta… One Open Question: Do Suburban Consumers Want Small Grocery Stores? Now that we had a chance to sleep on it, a few additional thoughts come to mind: The enormous power of brands. It is not just a matter of the appeal to consumers of the brand. It is a matter of getting all manner of muscle vested in the retailer’s success. Sara Lee/Bill Mar was at Marketside grilling hot dogs and giving them away, Stemilt had people distributing apple and pear samples and Dietz and Watson practically ran the service delis for Marketside. And Marketside was lucky to have them as they did so excellently with highly experienced manpower. It actually is kind of ironic because Dietz and Watson always refused to sell the Wal-Mart supercenters but obviously was persuaded that the Marketside concept was appropriate for the brand.

Disputed Link To Aunt Mid’s Cut Lettuce Reveals Need For Industry Firms To Have Easy Access To Top Epidemiologists

Jim Prevor's PerishablePundit — Mon, 06 Oct 2008 19:30:00 EST

The papers have been filled with news reports indicating that Aunt Mid’s Produce Co. has been the source of an E. coli 0157:H7 outbreak -- this one linked to distribution of foodservice or institutional size packages: The Michigan Department of Community Health recently issued a public health alert in response to an outbreak of illnesses caused by E. coli and thought to be spread through industrial-size packages of iceberg lettuce. The alert names Detroit-based Aunt Mid’s Produce Co., which distributes lettuce directly to restaurants and institutions, as the common thread among some of the… people who have been sickened since September 8.

Perishable Thoughts

Jim Prevor's PerishablePundit — Mon, 06 Oct 2008 19:30:00 EST

We have run several pieces on the financial crisis, including the following: 1. Government Bailout Requires Deeper Analysis, 2. Pundit’s Six-Point Proposal To Fix Financial Failures,3. McCain And Obama Make A Proposal — The Intellectual Bankruptcy Of Our Politics May Be A Bigger Problem Than The Financial Insolvency Of Wall Street

Special Report: A Triumph in Phoenix — Wal-Mart’s Marketside Hits The Trifecta — One Open Question: Do Suburban Consumers Want Small Grocery Stores?

Jim Prevor's PerishablePundit — Sat, 04 Oct 2008 19:30:00 EST

After touring British retail operations — including those of Tesco and Wal-Mart — and speaking at the annual Citi Retail Conference in London, we zoomed into Phoenix to catch the unannounced “quiet opening” of Wal-Mart’s new Marketside concept. The official opening of the first four stores is today, October 4, 2008. We were hardly alone. Just walking around the stores the night before the grand opening we met representatives of many of the nation’s top retailers plus many suppliers. Although Tesco’s launch of its Fresh amd Easy concept, which we have chronicled here, has attracted great interest. It has always been, for the American trade, something of a novelty, an interesting prospect for business and competition. In contrast, Wal-Mart is the biggest buyer and biggest retailer in the world and even more so in America, what it does is of immense importance to both its suppliers and competitors.

Pundit’s Six-Point Proposal To Fix Financial Failures

Jim Prevor's PerishablePundit — Tue, 30 Sep 2008 19:30:00 EST

With the collapse of the Treasury Department’s proposed bailout plan, we have avoided, at least for the moment, a very unfair plan. As we mentioned in our last piece on the subject, which you can read here, the bottom line of the Paulson plan is that either the Treasury was going to buy assets at the market price — in which case, there is no need for a government plan — or the Treasury would have paid more than the market price — in which case, the plan would unfairly bail out specific Wall Street interests because of supposedly “systemic risks.”

McCain And Obama Make A Proposal — The Intellectual Bankruptcy Of Our Politics May Be A Bigger Problem Than The Financial Insolvency Of Wall Street.

Jim Prevor's PerishablePundit — Tue, 30 Sep 2008 19:30:00 EST

It is a sign of the bankruptcy of our politics that both Senators McCain and Obama independently called for precisely the wrong change in FDIC insurance coverage. The Washington Post ran a piece entitled Obama and McCain Call for Increase in Deposit Insurance: In a moment of unintentional unity, Sens. Barack Obama and John McCain today both proposed raising the cap on federally insured bank deposits to $250,000 from $100,000 in an effort to broaden support among Republicans for the financial rescue package that failed on a close vote in the House yesterday.

Tesco Puts Positive Spin On Fresh and Easy Numbers

Jim Prevor's PerishablePundit — Tue, 30 Sep 2008 19:30:00 EST

Tesco came out with its first hard numbers on Fresh and Easy, and the numbers don’t illuminate much. Tesco said it had 74 Fresh and Easy stores open as of August 23, 2008, and would have 200 stores open by February 28, 2009. However, there is no particular reason to believe the company will be able to keep this schedule. It acknowledged that after losing £17m last year, its losses so far this fiscal year have been £60m, so total losses to date on Fresh and Easy have been £77m — in contrast to total sales of the division of £76m.

Perishable Thoughts

Jim Prevor's PerishablePundit — Tue, 30 Sep 2008 19:30:00 EST

With the economy on a tightrope and a recession in the offering, we are grateful to Scott Danner, Chief Operating Officer of Liberty Fruit Co., Kansas City, Kansas, for sending along this quote: “Always bear in mind that your own resolution to succeed is more important than any other one thing.“ — Letter to Isham Reavis, Abraham Lincoln, November 5, 1855

Despite Fresh and Easy Sales Growth, Challenges Lie Ahead

Jim Prevor's PerishablePundit — Thu, 25 Sep 2008 19:30:00 EST

Next week Tesco is due to announce financials, and it is expected we will get the first “hard numbers” on how the Fresh and Easy rollout here in the US is going. There is little question that Tesco’s efforts to boost sales have been met with some real success. Our best information is that Fresh and Easy has seen sales growth between 6-12% month over month on a “same store sales” basis for the last six months or so.

Wal-Mart’s Marketside Format Opens In Fresh and Easy’s Back Yard

Jim Prevor's PerishablePundit — Thu, 25 Sep 2008 19:30:00 EST

Simultaneously with Tesco’s release of financial results that will provide some hard numbers on its Fresh and Easy chain, Wal-Mart will open the doors on its first four Marketside stores in the Phoenix area. Although British newspapers have portrayed the Marketside concept as a response to Tesco’s Fresh and Easy venture, we think that this point can be overstated. Wal-Mart has many reasons to be interested in smaller stores. In its existing markets, they may serve to help keep fill-in business between trips to Supercenters in Wal-Mart’s hands. In big unionized cities where a combination of scarce real estate and political opposition have made it difficult for Wal-Mart to open supercenters, a new smaller concept may provide a point of entry. Wal-Mart also has plenty of worries regarding deep discounters such as Aldi, and this concept might be a tool to deal with these competitors.

Government Bailout Requires Deeper Analysis

Jim Prevor's PerishablePundit — Thu, 25 Sep 2008 19:30:00 EST

The government’s plan to “fix” the financial crisis is built on an incorrect premise and probably won’t work. In any case, it is either unnecessary or immoral. The government identifies the problem as a lack of liquidity. So the government proposes to buy up to $700 billion of distressed assets, which supposedly will restore liquidity to the marketplace. But this is an incorrect diagnosis of the problem because there is no absence of liquidity in the market. There are plenty of buyers for real estate, for mortgages, even complex paper after mortgages have been sliced and diced in tranches of different levels of risk — the problem is that sellers don’t like the price.

Perishable Thoughts

Jim Prevor's PerishablePundit — Thu, 25 Sep 2008 19:30:00 EST

A hat tip to Tim York, President of Markon Cooperative, based in Salinas, California, who sent a quote perfect for reflecting on a financial meltdown:“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” — The Road Ahead, By Bill Gates, Nathan Myhrvold, Peter Rinearson, Published by Viking, 1995, Page 38. The quote appears in Chapter 3, “Lessons from the Computer Industry,” and continues with these next sentences: “And it’s an unreliable guide to the future. What seems to be the perfect business plan or the latest technology today may soon be as out-of-date as the eight-track tape player, the vacuum tube-television or the mainframe computer.”

Filth Flies And Cultural Research

Jim Prevor's PerishablePundit — Wed, 17 Sep 2008 19:30:00 EST

We wrote a bit about the Fresh Express Fresh Produce Safety Research Conference here, but one of the research presentations — that about filth flies — has occupied many hours of thought as holding the key to food safety. Oh, it is not the actual research, which is quite preliminary. A hat tip to Michele Jay-Russell, DVM, MPVM, Dipl. ACVPM of the Western Institute for Food Safety and Security, for pointing out to the Pundit that the researchers summarized their report this way:

AIG Bailout Gives Short-term Relief Many Dangers Long-term

Jim Prevor's PerishablePundit — Wed, 17 Sep 2008 19:30:00 EST

The Fed’s decision to lend $85 billion to AIG in exchange for an ownership stake just under 80% is very dilutive to shareholders, and with the terms of the loan precluding common and preferred dividends and the interest rate being about 10 percentage points over what the government is paying for funds, the most likely outcome is that AIG will sell off virtually everything to pay off the US government. What the government is basically doing is putting the company into bankruptcy but in an orderly way so that its obligations will be honored and its assets do not have to be sold at fire-sale prices.

Tomato Farmers Get A Little Help

Jim Prevor's PerishablePundit — Wed, 17 Sep 2008 19:30:00 EST

Although CDC won’t exonerate tomatoes as a possible cause of the Salmonella Saintpaul outbreak and the chances for compensation aren’t very good, it does seem as if one segment of the federal government is trying to help: SCHAFER ANNOUNCES PURCHASE OF UP TO 3.6 MILLION POUNDS OF FRESH TOMATOES — WASHINGTON, Sept. 17, 2008 — Agriculture Secretary Ed Schafer today announced that the U.S. Department of Agriculture (USDA) is purchasing up to 3.6 million pounds of fresh tomatoes with currently available Farm Bill funds. The tomatoes will be donated to child nutrition and other domestic food assistance programs.

Pundit Mailbag – Obtaining Leafy Greens For Research

Jim Prevor's PerishablePundit — Wed, 17 Sep 2008 19:30:00 EST

Our piece, Fast-Tracked Food Safety Research Findings Presented at Fresh Express, brought several letters including this one from a prominent presenter whose fascinating research dealt with the potential for internalization of E. coli 0157:H7: My name is Manan Sharma, and I was one of the presenters at the Fresh Express Research conference last (Sept 11th, 2008) in Monterery, CA. I was reading Perishable Pundit today (like I do on many days!) and came across the following description (emphasis is mine in bold):

Perishable Thoughts

Jim Prevor's PerishablePundit — Wed, 17 Sep 2008 19:30:00 EST

In a rare example of rectitude, we will withhold our opinions on the relative qualifications of (in alphabetical order) Joe Biden, Barack Obama, John McCain and Sarah Palin for the office that each person respectively seeks. We will, however, extend a hat tip to Richard A. Lust of LiquidPress Company, a cold asceptic bottling technology consulting and implementation company headquartered in Lake Forest, California. He sent along one of his favorite quotes, which focuses on how to hire great people: “Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience. Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind. Experience is easy to provide and quickly put to good use by people with all the other qualities.”

FDA Should Listen To GSA When It Comes To Evaluating Risk

Jim Prevor's PerishablePundit — Mon, 15 Sep 2008 19:30:00 EST

We hope that someone at the FDA reads The New York Times, as a recent story entitled, Agency Fights Building Code Born of 9/11 — though about building codes for skyscrapers in a post 9/11 world —might as well have been about food safety policies promulgated by the FDA. The gist of the story is that after 9/11 a special report by the National Institute of Standards and Technology gave recommendations on how to make non-residential skyscrapers (buildings over about 40 stories tall) more survivable and more easily evacuated. Something called the Code Council adopts so-called Model Codes that jurisdictions all over the country adopt as their own standards or, at very least, consider when adopting their own standards.

Fast-Tracked Food Safety Research Findings Presented At Fresh Express

Jim Prevor's PerishablePundit — Mon, 15 Sep 2008 19:30:00 EST

Missed United’s Washington Public Policy Congress last week as the Pundit was in Monterey to participate in the Fresh Express “Fresh Produce Safety Research” Conference. Our team at United’s DC event reports it was a terrific event, and we always find the WPPC to be the quintessential event by which a trade association demonstrates its connections and advocate role for the industry. In fact the feedback this year was that United seems to have maxed out the capacity at the Mayflower Hotel and may need to consider larger venues. Though we regret missing WPPC this year, we confess that the Fresh Express event was really quite fascinating.

Pundit Mailbag — New Points Of Vulnerability

Jim Prevor's PerishablePundit — Mon, 15 Sep 2008 19:30:00 EST

With each food safety crisis, we seem to become more fully aware of changes in the industry and the broader society that have increased the vulnerability of the trade to outbreaks. For example, by the time the spinach crisis of 2006 was over, we realized the industry developed a number of non-traditional vulnerabilities: The development of modified atmosphere packaging and the concomitant ability of the trade to keep things looking fresh longer itself enormously increased the vulnerability of the trade. Prior to the advent of such technologies, produce often went rotten and thus wouldn’t be eaten before pathogens would grow. Longer shelf life also translates into more time for pathogens to grow.

Perishable Thoughts

Jim Prevor's PerishablePundit — Mon, 15 Sep 2008 19:30:00 EST

With the Dow Jones Industrial Average down over 500 points on Monday and The New York Times headlining Wall Street in Worst Loss Since 2001, we thought it appropriate to contemplate the words of a noted financier: “If you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right.”— Bernard Mannes Baruch, Quoted in the St. Louis Post-Dispatch, June 21st, 1965 (Pg. 5A) (Note, published the day after he died)

Though Traceability Initiative Is A Big Win, Weak Links Still Exist

Jim Prevor's PerishablePundit — Mon, 8 Sep 2008 19:30:00 EST

For a long time we have focused much attention on traceability. Recently, of course, traceability was the buzzword that the government and non-governmental organizations focused on as a weak link in the food safety system during the Salmonella Saintpaul outbreak. The focus on traceability as our Achilles heal of the industry was not really accurate. In fact, as our interview with Jim Gorny of UC Davis predicted, the problem was actually epidemiology, not traceability.

New York Times Incorrectly Pegs Hunts Point On Illegal Gambling Venue

Jim Prevor's PerishablePundit — Mon, 8 Sep 2008 19:30:00 EST

One of the issues that arose during the recent Salmonella Saintpaul outbreak was the distressing tendency for the media to simply report as fact whatever the government had to say. Indeed, as we mentioned here, the reporting on the outbreak improved as the outbreak dragged on primarily because reporters became more skeptical about government pronouncements. We also pointed out that some media outlets seemed to have gotten lax on fact checking as we mentioned in this piece regarding an Associated Press story that misconstrued the meaning of import statistics.

Pundit’s Mailbag — Be Careful Where You Grow

Jim Prevor's PerishablePundit — Mon, 8 Sep 2008 19:30:00 EST

Now that the Salmonella Saintpaul outbreak has officially been declared to be over, the world is left to deal with many questions in its aftermath. Some questions involve the food safety system broadly considered, but others are more prudential-related. This letter expresses a concern many in the industry have shared with us: We have been following your coverage of the Salmonella Saintpaul outbreak like the rest of the produce industry, and I have a question that you might consider addressing in the Pundit.

Perishable ThoughtsPerishable Thoughts

Jim Prevor's PerishablePundit — Mon, 8 Sep 2008 19:30:00 EST

In the midst of the Salmonella Saintpaul outbreak, we received a contribution to our Perishable Thoughts section quoting an important governmental official: The note came from a distinguished academic: Donald W. Schaffner, Ph.D., Director, Center for Advanced Food Technology, Extension Specialist in Food Science, Department of Food Science, School of Environmental and Biological Sciences, New Jersey Agricultural Experiment Station, Rutgers, The State University of New Jersey, New Brunswick, NJ . The quote Dr. Schaffner sent was as follows: “Food safety recalls are always either too early or too late. If you’re right, it’s always too late. If you’re wrong, it’s always too early.” — Dr. Paul Mead, Epidemiologist, US Centers for Disease Control

Digging Into Wal-Mart’s ‘Locally Grown’ Numbers