Whole Foods 365: It’s All About Efficiency

The Washington Post: We’re inching closer to the launch of 365 by Whole Foods Market, a new, lower-priced grocery store that the organics giant is betting will help pull it out of a rough patch … The first 365 store is slated to open May 25 in the Silver Lake neighborhood of Los Angeles … Jeff Turnas, president of 365 … said in an interview that he and his team have ‘looked and turned over every stone to find efficiencies.’ That includes, for example, trying to lay out stores in a way that reduces the time it takes for a worker to get from the stockroom to the shelves.”

“Even the product assortment in these smaller format outposts is designed in part with an eye toward greater efficiency … with a center-aisle grocery item like olive oil, Turnas said, they tried to narrow the offerings … prepared food bars will be ‘a little more get-it-yourself, self-serve’ than those in a traditional Whole Foods … There will also be a kiosk called TeaBot built by a company of the same name that allows shoppers to create customized tea blends that are served up hot to the user in less than 30 seconds.”

“365 is also building its stores around a program called Friends of 365, in which it will turn over a small section of its square footage to like-minded retailers to make shopping more of an experience … Speculation has been running wild about what kinds of retailers might be included … Turnas said they’ve received video pitches or other inquiries from at least one tattoo parlor, more than one marijuana dispensary, and a pet grooming business. The thought process for choosing the Friends will vary from location to location.”


Sam Adams: The Craft Beer Revolution Comes To a Head

The Wall Street Journal: “The volume shipped by Boston Beer Co., which makes Sam Adams, last year grew just 3.6% after back-to-back years of more-than-20% gains. The company’s shares have plunged 32% over the past year as investors lose confidence in a quick turnaround. The problem? Sam Adams has gotten too big and familiar to be considered an authentic craft by elitist beer connoisseurs, yet it isn’t hefty enough to have the cost advantages of big brewers.”

“There are more than 4,200 craft breweries now—up from 1,564 in 1999—and together they outsell Boston Beer’s offerings. Plus, over the past year, AB InBev acquired Arizona’s Four Peaks and Los Angeles’ Golden Road breweries, MillerCoors scooped up San Diego’s Saint Archer, and Heineken invested in California’s Lagunitas Brewing Co.”

In response, Boston Beer “is concocting new variations of Sam Adams such as last year’s Sam Adams Rebel Rouser IPA and Grapefruit IPA. This year’s mix includes Rebel Raw, a double India pale ale loaded with bitter hops, and brews infused with nitrogen for creaminess like Nitro Coffee Stout. But even with new recipes, Boston Beer expects beer volume to decline in 2016.”

Founder Jim Koch says he’s been hearing that Sam Adams is no longer new or local since 1985. “I’m excited to see the success of this revolution I helped start,” he says. “I want to continue to drive that success.”


Breadsticks & The Olive Garden Comeback

The Wall Street Journal: The Olive Garden’s turnaround began when Dave George, its president, “and members of his senior management team flew to different Olive Garden restaurants around the U.S. to work alongside busboys, dishwashers and cooks … Busboys said they cleared tables and set them with napkins, cutlery and glasses for a full party. If a hostess seated two people at a table for four, she would remove the extra settings, undoing their work. Cooks said they spent too much time filling cups of precisely measured basil for garnish—a regimen created to save waste. They also complained of having to weigh servings of uncooked pasta to fill 8-ounce bags.”

“We were spending a lot of labor hours on preparation and production and it added no benefit to the guest,” said Mr. George.

Then there were the breadsticks: “The quality of the breadsticks at Olive Garden … had declined, with the popular appetizers often cooling and hardening after sitting at the table for more than seven minutes … Managers were told to stick to the policy of delivering more breadsticks only on request. As the chain grew over the years to more than 800 restaurants with 90,000 employees, the policy wasn’t consistently followed, with some servers bringing out more without being asked.”

The chain also introduced “tabletop tablets for customers to order and pay for meals … to reduce wait times,” which allowed ” restaurants, on average, to close out checks seven minutes faster.” In addition: “Last summer, the chain began offering guests waiting for a table a 50% discount on a glass of wine, encouraging some guests to order a second glass.”

Since the moves, which followed “a rare shareholder coup 18 months ago” by Starboard Value LP, “the previously struggling stock has risen 47%, versus 6% for the S&P 500; much of its real estate has been spun off, giving shareholders a second stock; and year-over-year sales at existing locations of the Olive Garden chain have increased for six straight quarters.”


Quotes of the Day: Logan Green

Lyft CEO Logan Green, in The Wall Street Journal, on the difference between his company and Uber:

“We treat people better. When the driver enjoys driving and working with Lyft, that shows. They’re happier. Every pickup they do, they’re in a better mood. And they feel encouraged to go above and beyond and treat passengers better. When you get the same basic service level from both companies, more people are choosing to support the company whose values they align with.”

And on why Lyft drivers no longer offer passengers a fist-bump:

“Doing a fist-bump is fine when you take two or three Lyfts, but when you’re taking 100 over the course of a year, it loses its magic.”


Steve Case: The Internet’s Third Wave Is Here

The “third wave” of the Internet is upon us, writes AOL co-founder Steve Case in The Wall Street Journal. “The First Wave was about building the Internet,” he writes. “This phase peaked around 2000, setting the stage for the Second Wave, which has been about building apps and services on top of the Internet.”

“Now the Third Wave has begun. Over the next decade and beyond, the Internet will rapidly become ubiquitous, integrated into our everyday lives, often in invisible ways. This will challenge industries such as health care, education, financial services, energy and transportation.”

“Take education … entrepreneurs are revolutionizing how instructors teach and students learn … Or look at health care … the real action to improve America’s medical system is coming from entrepreneurs. They are inventing better ways to keep us healthy, and smarter ways to treat us when we get sick.”

“The world is changing for all of us, and a new playbook is required.”


Fina Finds New Beginning As Dot-Com

The New York Times: “On April 16, Michael C. Fina, which had sales of $16 million last year, will close its sole brick-and-mortar store, laying off about 20 workers and bringing to an end an 81-year run in Manhattan. Instead, the retailer is moving entirely online, including teaming with Amazon.com as part of a planned revamping of the e-commerce giant’s wedding registry service.”

Fina “already operates an e-commerce site, but it can take up to 72 hours for a product to be shipped … Amazon has told him that its fulfillment centers will be able to ship an order in as little as two hours. Mr. Fina also said he expected shipping costs to fall by as much as 50 percent, because of Amazon’s economies of scale.”

The bridal-registry retailer “will also offer its wares on Zola.com … Shan-Lyn Ma, founder of Zola.com, said that because couples in the United States were marrying much later than ever, and because they increasingly lived with their partners before tying the knot, their wedding gift needs had shifted away from the housewares and appliances that traditionally went toward setting up a first home.” She explains: “Couples are really starting to value experiences rather than straight wedding products.”

“On Zola.com, couples can list hiking trips, hot air balloon rides and food delivery subscriptions, as well as funds for puppies, honeymoons and even fertility treatments.” Ms. Ma started Zola in 2013. “But she has since realized that many couples want to add a few traditional items into their wedding registry mix. And a partnership with Michael C. Fina, she said, gave Zola access to brands that the site might have trouble courting.”


American Idol: The World’s Longest April Fool’s Joke

Surprise! American Idol is ending its 15-year run on the Fox network this week, but it is not ending, period. The show’s creator, Simon Fuller told The Hollywood Reporter that Idol “will certainly be coming back for sure — will have a youthful glow and it will be pioneering again, just as it was when we first began.”

He elaborates: “There are loads of ideas being shared and I’m deep in thought about how we can evolve Idol. We debuted at the very beginning of the digital world. So the next generation of Idol will be a lot more interactive, a lot more immersive. For me the most exciting thing is we can really now dive deep with all the new technology that’s coming. My head is exploding with opportunities … Now I can actually revamp it and come up with a new version.”

(Special thanks to Holly Reustle for the tip!)


Chemical Reaction: Hain Celestial Reformulates

The Wall Street Journal: “Hain Celestial Group Inc., like upstart Honest Company Inc., has long said its products have no ‘harsh chemicals’ such as sodium lauryl sulfate, or SLS, that could irritate some people’s skin. Instead, some of their products use an ingredient called sodium coco sulfate, which the companies say is a milder cleaning agent.” However, The Wall Street Journal commissioned tests, and found that “sodium coco sulfate is a blend of cleaning agents that contains roughly 50% SLS … Honest disputed the test results for its detergent. Hain Celestial said last week that Earth’s Best ‘does not add’ SLS to its products but that the company was changing its labels to increase transparency.”

“Hain Celestial uses sodium coco sulfate in several Earth’s Best baby-care products, some Alba Botanica shampoos and a facial scrub, and some of its Jason shampoos and body washes. Their containers say they have no SLS … Products with the new labels are expected to hit store shelves by this summer, and will gradually replace products with the existing labels.”

“Honest, which also sells diapers and other consumer products, has disputed the test results and says its products don’t contain SLS … Honest disagreed with the methods used by the Journal’s labs and said its own testing found no SLS in its detergent. Honest also said it relied on assurances from its suppliers that there was no SLS in the product … During the Journal’s reporting, Honest made changes to the wording on its website … It now says the products are “Honestly made without” SLS and other ingredients it has banned. Honest said it plans to change its product labels to match the wording on its website but has no plans to reformulate its detergent.”


Oh To Live On Sugar Mountain

“The goal for soda companies is to spritz up fizzling soft-drink sales. The appeal: Sugar is natural,” The Wall Street Journal reports.

PepsiCo CEO Indra Nooyi: “If you had asked me a few years ago, people were moving to diet sodas. Now they view real sugar as good for you. “They are willing to go to organic non-GMO products even if it has high salt, high sugar, high fat.”

“PepsiCo says the formula of its new line, called 1893, is inspired by the cola created by Pepsi founder Caleb Bradham. The company says it is made with premium kola nut extract … cane sugar and ‘a touch of aromatic bitters.’ Pepsi Made with Real Sugar launched in 2014 … Last summer, it introduced a line of fountain drinks called Stubborn soda, sweetened with sugar, for restaurants.”

“Nutritionists caution that more-natural ingredients don’t necessarily mean they are health foods. Some types of sugar may promote vitamins or minerals. That doesn’t mean consumers should reach for them to get those nutrients, says Sara Haas, a dietitian based in Chicago and spokeswoman for the Academy of Nutrition and Dietetics.”


High Times Plots Pot as Lifestyle Brand

The New York Times: “Just as Playboy transformed from a skin magazine to a branding behemoth during the sexual revolution, a new management team at High Times is looking to pare back its outlaw image to become a lifestyle brand. Its big plans to capitalize on the era of legalized marijuana include a revamped website, apparel, furniture, nightclubs and eventually ganja-themed cruises, hotels and casinos.”

“While deals have not been completed, the company is deep in talks with partners to open a series of high-end cannabis-consumption lounges in Colorado, where adult use of marijuana is legal, and in Las Vegas, where medical marijuana is legal under Nevada state law. In Las Vegas, the company’s partners have also secured a cabaret license and a gambling license as well as approval for an off-site dispensary at an undisclosed location 150 feet off the Strip … this cannabis gambling lounge would provide a springboard for a potential High Times hotel and casino, following the model of the Hard Rock Cafe.”

“ArcView Group, a cannabis research and investment firm, recently called legal marijuana ‘the fastest growing industry in America,’ having rocketed 74 percent, to $2.7 billion, from 2013 to 2014. Attitudes seem to be changing just as quickly. In popular culture, potheads are no longer portrayed only as glazed-eyed dolts, but everyday professionals with children and mortgages.”