business news in context, analysis with attitude

We got the following email from an MNB user:

I was very interested in your article about the "mainstreaming" of gluten-free products. After months on the elimination diet I have discovered that I am allergic to wheat (not suffering from Celiac Disease which is a genetic disorder)- unfortunately many other tasty food items as well. So finding safe things to eat has become a real challenge. As a "foodie" (I've worked with the food industry for half my life!) I'm even tempted to open an allergy-free cafe (eating out is pretty difficult for me) or to create another one of the many gluten-free products hitting the shelves.

Unfortunately, having an allergy or Celiac is not a fad so hopefully it is as you have predicted - that this is not a fad and that the trend of gluten-free products will continue.

Regarding the closure of most of EatZi’s stores, MNB user Ted File wrote:

I recall having lunch many times in the Dallas store shortly after their opening. Being totally amazed is an understatement. Their presentation was meticulous, their product assortment that appealed to the upper income was right on track. While in the store I spoke with many customers and asked them "why do you shop here?" Their responses were "they are unique and have done all the work. All I have to do is warm it up or put it in the oven to finish cooking. Besides my husband thinks I am the world's best cook." But I can certainly see why that approach would wear thin after a few years. In the Dallas store the employees serviced and catered to the consumer....they literally fell over them and were able to call them by name- something we don't see anymore in the supermarkets.

But time goes on and its unfortunate that owner Phil Romano sold out to the investors who knew little about running a business as Phil did in the first store.

Another MNB user wrote:

This is absolutely not an issue of losing touch with the customer, but rather a case of not understanding the economics of a business model and not understanding demand. The retail rear view mirror is littered with the carcasses of the “Meal Store” concept and the “Home Meal Replacement” idea. The Presidents of most food retailers look at the Wegmans, Whole Foods perishable model, or the “Home Meal Replacement” idea, and think there is a free standing model out there without doing any business planning.

The fact is that they do not make money because the inputs of labor, shrink and production are greater than the output of sales demand. Wegmans does a great job, but without the rest of the store to support the profitability, there would be no concept. Additionally, Home Meal Replacement only existed in the minds of the marketers. Mom does not want to be taken out of the meal preparation. What Mom wants is for the food retailer to make her life easier. Which is why bagged salads, pre-cut and value added produce, oven ready meat and seafood items and par baked bread demand far outpace any sales in the “Chef Prepared” case.

And MNB user Paul Schlossberg wrote:

That is disappointing. When they opened in Dallas, we lived about 16 miles away and shopped there about twice a month. Their food was good, the bread and bakery were exceptional and the wine selection was also good. It was a great, although crowded, place to meet for lunch. Being in the food business, it was fun to bring other (out-of-town) food industry colleagues there. This was more of a European store than what most people had seen in the U.S. If you recall, their sales per square foot was outrageously high.

They expanded too fast. Going in to Macy's showed poor insights about site planning. At that time opening up in the upper east or west side would have made more sense. Zabar's was on the west side, so the east side might have been a better choice. They should have done a hub and spoke execution in Dallas...with a central production kitchen feeding smaller neighborhood stores to become the singular source for meal solutions in the market. That would have been the business model to roll out in other cities.

This is a classic example of - "Having vision is not enough. Everything depends on execution."

We had a piece last week about new studies offering insights into the benefits of resveratrol, a substance found in red wine, which led MNB user Anita French to write:

In regards to your report in today's (11/17) MNB about the benefits of resveratrol, you said someone is going to figure out how to boil all this down to a single pill. As a matter of fact, resveratrol already comes in pill form — I know because I take it myself. But the scientists say that, right now, you would have to take the equivalent of a "whole bottle of Tums” for it to offer the same benefits as that used in the scientific tests. Who knows? Maybe they will come up with a pill that solves this problem.

On this same subject, another MNB user asked:

What's wrong with 300 glasses of wine a day?

Good question.

One of our MNB users wrote:

I was in my local Albertson's last night and saw something that made me think immediately of you.

In the self-checkout area, Albertson's has assembled bags of groceries that you can buy for $10. These bags hold items that local food banks need -- pasta, tomato sauce, canned vegetables, fruit juice, cereal, peanut butter -- and they advertise, prominently, that if you buy the pre-assembled bag of food, you're saving $8 compared to buying each item separately.

This is a win-win for everyone. The consumers get the sense of altruism -- at a bargain, and with very little time on their part. Albertson's fills the bags with house-label goods, sells the goods rather than donates them outright, and it still gets the patina associated with community involvement. And the food banks will – I hope -- get the food they need.

I just thought it was a smart way for a grocer to do business. By bundling cost and convenience with charity, these bags can appeal to impulse shoppers. I'll be curious to see whether this is a practice adopted by lots of grocers, and how other consumers respond.

Great idea.

On the subject of the EU’s continuing attitude toward biotech foods, which we characterized last week as a kind of “cultural revulsion” that the US seems unwilling to recognize, one European MNB user wrote:

The freedom of choice argument seems to fly out the window on this issue. Consumers have made clear that they want to choose whether or not to eat genetically modified food but American producers have made clear that they have no intention of providing sufficient information on labels. No wonder there's a stand-off. Customers are demanding responsibility for their purchases and diets but manufacturers are refusing to take responsibility for what they're selling. So that's two American principles that don't seem to apply when profits are at stake.

We had a story and an exchange of emails last week about Al Gore’s planned appearance at the 2007 FMI Show and what it means in terms of trade association bipartisanship, which prompted one MNB user to write:

I’m just glad I know about it now and can save my money by skipping FMI in 2007.

Guess you won’t be asking Santa for a DVD copy of “An Inconvenient Truth” this Christmas…

Finally, we note last week that when “Black Friday” – the day after Thanksgiving, a major shopping day here in the US – happens later this week, we will be anywhere BUT in the stores, and will probably wait and do our shopping later at

To which MNB user Jackie Lembke responded:

Totally agree, unless someone is dying and cannot live without whatever it is they need at a retail location of any kind I will avoid any semblance of shopping next Friday.

But another MNB user wrote:

You must have too much money!

KC's View: