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.”

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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.”

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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!)

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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.”

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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.”

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A New Blue Ribbon For Pabst

The New York Times: Eugene Kashper, who “made a fortune reviving several all-but-moribund Eastern European breweries … bought Pabst Blue Ribbon beer in 2014 with the private equity firm TSG Consumer Partners for a reported $700 million … Mr. Kashper says he saw a big opportunity. ‘Beer, you know, it’s just fun,’ he said.”

“Now chief executive, he is pushing an aggressive effort to leverage the company’s distribution network, a part of the business that had been built up under previous owners, and dusting off old beer recipes and brands to capitalize on consumer desire for local products. Pabst will soon start producing Rainier Pale Mountain Ale at a brewery in Washington State … using a recipe derived from the one for a Rainier beer that was last brewed in the 1930s and 1940s. Other brands include Lone Star, Schlitz, Olympia, National Bohemian, Colt 45, Schmidt and Pearl.”

Says Kashper: “We’re ideally suited for the whole locavore thing … We can take advantage of the heritage embedded in our brands … We don’t have to spend money convincing consumers our brands are authentic — they already know they are.” He has already “found one hit to pump through the system right after buying Pabst, in Not Your Father’s Root Beer, a ‘hard’ or alcoholic soda made by Small Town Brewery that became the beer industry’s sleeper success story of 2015. The product helped raise Pabst’s overall sales in 2015 by 20 percent and pushed its market share up by a percentage point — even as sales of its main brand declined.”

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Patanjali: Baba’s Got a Cool New Brand

The New York Times: Baba Ramdev is “the leader of what has become known as the ‘Baba Cool Movement’ — a group of spiritual men, known here as ‘babas,’ who are marketing healthy consumer items based on the ancient Indian medicinal system of herbal treatments, known as Ayurveda. His rapidly expanding business empire of packaged food, cosmetics and home-care products is eating into the sales of both multinational and Indian corporations. ‘People buy our products because they believe I will only sell them good things,’ he said.”

His Patanjali-brand “products are attractive because they are high quality and prices are about 20 percent lower than the competition, analysts said. It is not clear how Patanjali is able to charge such low prices, given that its profit margin of 13 percent is within the industry range of 13 to 16 percent. Mr. Ramdev ventured that, with his fame, his advertising costs are much lower than his competitors’, who spend as much as 15 percent of their revenue promoting their products.”

“Harish Bijoor, a brand strategy specialist and former head of marketing at a subsidiary of the big Indian conglomerate Tata Group.has predicted that the “Baba Cool Movement” will eventually outsell both multinationals and top Indian companies alike. ‘It’s about a good connect,’ he said. ‘It’s about becoming the umbilical cord connecting the past to the present.'”

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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.”

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