Fashionably Moo: The Rise of the Microdairy

“Add milk to the long list of traditional foods that are being rediscovered by young entrepreneurs and reintroduced in small-batch — and often high-priced — form,” reports The New York Times. “As historically low milk prices leave many mom-and-pop farmers struggling, some are choosing to ride the wave of the nation’s new food awareness … bottling their own milk (and ice cream and yogurt) and selling it directly to customers. And they are heralding the various ways it may be different from conventional milk — whether unhomogenized, organic, from grass-fed cows or locally produced.”

“Now many restaurant menus cite the provenance of their dairy products in the same way they boast of grass-fed rib-eyes and hydroponic tomatoes. And consumers are willing to spend more for boutique milk at farmers’ markets and upscale grocers … Manhattan Milk, a small distributor in New York City, evokes the days of the milkman, delivering glass bottles of grass-fed, organic milk from dairies in the region to doorsteps as far away as Greenwich, Conn … Customers of 1871 Dairy, in Wisconsin, “want more than the word organic slapped on a label; they want the satisfaction of knowing the milk was made close to home, in small batches rather than industrial vats.”

“Customers want to learn the story behind the food to see if it’s the values they hold,” says Joe Miller, the marketing director at Trickling Springs Creamery, a small dairy in Chambersburg, Pa. “The more you open the door for them to see behind the scenes, the more comfortable they feel with your product.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Philz Coffee: The Value is in The Experience

A San Francisco coffee house called Philz plans to challenge Starbucks with a different kind of experience, Forbes reports. “At Philz you won’t find the fancy brewing equipment of an artisanal coffeehouse. Beans are ground to order and then splashed with 205-degree water in pour-over funnel brewers. The coffee is good, but it is not cheap–a small coffee costs almost twice as much as Starbucks’ equivalent. Philz proponents say the value lies as much in the experience, or in what (founder Phil Jaber and his son Jacob) call ‘Grandma’s House,’ as it does in the coffee.”

“Unlike the corporate uniformity of Starbucks or the manicured hipster haunts like Blue Bottle, Philz has an informal charm that can be found in the mismatched couches at its original location and in the cup-by-cup approach of its baristas, who load drinks with heavy cream and brown sugar to each customer’s preference. ‘Taste it and make sure it’s perfect,’ a barista says before handing over a beverage. Details like that foster ‘an emotional connection’ for customers, says Jacob, 29, the CEO. ‘We think of ourselves as more in the people business than the coffee business.'”

“This year Philz plans to open at least two locations in Washington, D.C., the first true test of whether the company’s service-oriented approach can succeed outside California. Ultimately Jacob has visions of expanding into New York and Boston, with 1,000 stores nationwide, and “disrupting” the coffee industry … So far the company has interviewed more than 300 people, and Jacob has hired 30 … All will go through the company’s Apple-influenced Philz University training program, where they’ll be taught not to ask for customer names the way Starbucks does when taking orders. Doing so, Jacob says, is impersonal, because it suggests you’ve never met, and there’s a chance you’ll get it wrong.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Virgin-Alaska: Passion vs. Performance

The New York Times: The Alaska Airlines takeover of Virgin America may test whether passion or performance is paramount when it comes to creating customer loyalty. “Although Alaska has been a perennial leader in best-airline rankings, its allure comes more from its reliability than mood lighting or funny safety videos. Like Virgin America, it inspires loyalty among customers, if not the same passion.”

However, travel industry analyst Henry Harteveldt thinks Virgin America “failed to capitalize on its San Francisco hub or to build on its early innovations … The airline compensated for its financial losses by cutting flights in recent years, even as it added routes to Hawaii and elsewhere. While passengers may love the ambience of a Virgin flight, they love the ability to get where they are going more.”

“The combination of hip and practical could give the new company a competitive advantage, Mr. Harteveldt said. The smartest thing Alaska could do … would be to combine the characteristics that have made each airline popular.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The Gray Market: Boomers are Booming

The Economist: “Today the developed world is in the early stages of a ‘gray-quake.’ Those over 60 constitute the fastest-growing group in the populations of rich countries, with their number set to increase by more than a third by 2030, from 164m to 222m. Older consumers are also the richest thanks to house-price inflation and generous pensions. The over-60s currently spend some $4 trillion a year and that number will only grow.”

“Some firms are trying to understand older people better. Kimberley-Clark, a maker of consumer products, has built a mock-up of what a senior-friendly shop might look like in the future. Ford has created a ‘third-age suit’ for car designers to wear to help them understand the needs of older people: the suit thickens the waist, stiffens the joints and makes movement more cumbersome … Understanding is giving birth to new products and business models … Retailers are surreptitiously lowering shelves and putting in carpets to make it harder to slip … Kimberley-Clark has overhauled its Depend brand of adult nappies to make them more like regular underwear.”

“The baby-boomers have changed everything they have touched since their teenage years, leaving behind them a trail of inventions, from pop culture to two-career families. Retirement is next on the list.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

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.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

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.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

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.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

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.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

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.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

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.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail