The Lempert Report LIVE

Exploring the World of Retail: Price Wars, the Milkman's Return, and the #FoodNotPhones Movement

September 18, 2023 Phil Lempert Episode 95
The Lempert Report LIVE
Exploring the World of Retail: Price Wars, the Milkman's Return, and the #FoodNotPhones Movement
Show Notes Transcript Chapter Markers

Ever wondered how the fierce retail giants battle over prices? Or what it would be like if the Milkman made a comeback, blending modern conveniences with good old-fashioned doorstep delivery? This episode takes you on a thrilling roller-coaster ride through the fascinating world of food, retail, and lifestyle trends. We uncover the heated price hike battle led by Carrefour, the shopping wonderland of Buc-ee's stores

Could you imagine a meal without a phone by your side? We discuss the #FoodNotPhones initiative with our special guest, Libby Pigg, Chief Marketing Officer of That's It, as she elaborates on the importance of truly savoring our food. We cap it off with a deep discussion on the shifting landscape of online grocery shopping, equipped with insights from Acosta Group's latest Omni-Channel Report. Buckle up as we embark on this exciting journey through an intricate tapestry of trends that are shaping our everyday lives.

Phil:

Welcome to the Lempert Report LIVE. Hey, are you ready to put your phones down? Just a reminder tomorrow is Food Not Phones Day, so be sure to #FoodNotPhones out before every meal to let everyone know that you're enjoying your meal with friends and family and won't be looking at social media just for a bit. I hope you'll join us for this very important initiative and project. On today's broadcast, Carrefour leads the war with CPG price hikes. Buc-ee's is a c-store you have to experience. Acosta Group's new Omni-Channel Report said some really interesting light on those who shop online. A Walmart employee that you've got to meet, how Danone is fighting climate change. On Food Not Phones a friendship initiative that we should all join in on. And on the bullseye, the milkman is back. Let's get started. So, Sally, Carrefour in Paris, one of the world's leading retailers, has decided to go on the offensive as it relates to CPG companies. You know price increases. What they're doing is they're actually putting up signage to put price warnings on products from people like Link Chocolate, Lipton iced Tea, nestle, pepsico, unilever, to really force these consumer package goods companies to reduce inflation ahead of their anticipated contract box. What they're doing is putting stickers on products that have gone through strength inflation but cost more even though the raw material prices have eased, to get the consumers behind them. And these negotiations start with these major companies on October 15th, and what Carrefour is saying is they want their manufacturers to rethink their pricing policy. What do you think?

Sally:

Yes, this has been something going on for a while. The finance minister, Bruno Lamar, and the CEO of Carrefour have been working together to try and persuade these big brands to come to relax on their prices and their price hikes. So it isn't surprising that it's come to this, because we've heard that they're not really cooperating. There are now 26 products in the stores in France with these labels reading that this product has seen its volume or weight fall and the effective price by the supplier rise. Now what's really interesting to me is some of the products they're talking about seeing examples of this happening. Carrefour says a bottle of sugar-free, peach-flavored Lipton Ice Tea by PepsiCo shrank from 1.25 liters to from 1.5 liters, resulting in a 40% effective increase in the price per liter. So what's even scarier to me is when we see this happening with Nestle, with infant formula. An infant formula is a must-have for people with babies that are not able to breastfeed, so that's a very, very essential product for families, and to see the amount that's in the container going down and the price going up is very disheartening for people that are struggling with current food prices.

Phil:

It is, and this morning, as you know, I was on the Today Show talking about breakfast cereals and whether it be Kellogg's, General Mills or Post, they're all complaining that sales are down. Sales were obviously up during the pandemic, where people were sitting at home and ate. Their lucky charms has nostalgia and make them feel good. But the reality is and we pointed it out on the segment that one of the most important factors in addition to people wanting healthier products for cereal is this shrinkflation Is the fact that you can go into a supermarket and the box of cereal can be bigger. They've made it thinner front to back but they've made it taller, but they're down between an ounce and three ounces per package. We've talked about that before, both on Today, here and on Inside Edition, and it's getting worse. I applaud Carrefour for doing this and their finance minister, and I just hope you know frankly, we do it here. Now I know you're a fan. I have never been to a Buc-ee's convenience store. Tasting Table did a recap of 13 or 14 C-stores around the nation, but when we read it we said we've gotta talk about Buc-ee's. So let's talk about Buc-ee's. What's a Buc-ee?

Sally:

Buc-ee's is an amazing phenomenon. That started in 1982 in New Braunfels, texas. Now they have expanded outside of Texas. Now these giant, massive convenience stores we have them here in Tennessee Now I believe we have three, with one opening up, another one opening up soon, but they can be as big as 74,000 square feet with 120 gas pumps and 22 electric vehicle stations and a 250 foot car wash. Now they boast award-winning restrooms and they boast the biggest car wash in the country. Also, they don't allow those semi trucks to come to this store, so this is just for people in their cars. And what they're coming for, phil, is not just the gas and the clean restrooms. They're coming for an exciting array of products, which is everything from furniture to home decor, to gas grills, to Christmas ornaments Buc-ee's merchandise. And they're also coming for a large array of food choices. They're serving brisket, they've got a bakery, they're serving all different kinds of jerky, tacos, burritos, you name it. They've got it at Buc-ee's. And this is a 24-hour store and it's kind of a tourist attraction. It's not just your regular convenience store.

Phil:

So you know what other claims to fame's are the Beaver Nuggets? Have you ever had a Beaver Nugget?

Sally:

I have not tried one yet, but they are very popular and when you walk into the store at the checkout lines there are shelves full of them. And this is a puffed corn with some sort of sweet seasoning on them, and there are different flavors.

Phil:

So you know I don't think we have the answer, but I would love to know what an award-winning restroom criteria is, besides just being clean and modern. You know, hey, I've got an award-winning restroom. Hopefully I do. So, getting back, this week is Grocery Shop. Everybody knows that, as well as Expo East, I'll be at Expo East. Can't do both at the same time but what's coming out of Grocery Shop, I think is very important. Acosta Group has released the results of its annual online grocery shopping study and you know they've got a proprietary shopper community that they talked about, and what they found over the last year is 55% of grocery shoppers buy online groceries, at least some of the time. Frequent online grocery shoppers are up to 50%, and also, what's most important, is they're now purchasing perishables, including breads, pastries, dairy produce and frozen, which to me, really signifies the fact that grocers are getting better at picking produce and meats. In the beginning of online delivery, that was the number one complaint that these pickers just didn't know how to do produce, and I think, as these retailers are moving away from Instacart and they're doing it more themselves, their staff is better prepared for it. 49% of online shoppers are now starting at a retailer's website or app, not a third party, and 85% are using digital coupons, and I think that one of the key takeaways that Acosta Group has is that online grocery shoppers, especially millennials, are highly likely to purchase and try new items and are very likely to buy on impulse. What do you think?

Sally:

Yes, our younger shoppers are really taking advantage of all different styles of shopping. They're shopping online, they're getting delivery, they're getting pickup and they're going in stores. What I also thought was very interesting is that the study found that, for grocery pickup shoppers, 80% will also go into the store when they're picking up their order. Now, this would be me, Phil, because I would get there and I would realize that I forgot to put something on the list and so I needed to go in. Or I might see some beautiful plants sitting outside and think, oh, I want that plant, I've got to go in and get that. So this is great news for the online world and for people that are still wanting to mix that with the in-store shopping experience.

Phil:

Yeah, and I think it's a great opportunity and I'm so happy that Acosta Group included that finding on that question in their survey because, to your point, this is a great opportunity for, you know, impulse shopping and even those stores that might have somebody that brings out your groceries to your car where you pull up. That's a great opportunity for signage to get you to get out of your car, go inside, pick up that planter or something else that you forgot. I really think it's a great idea. So you know, for years we made fun of the Walmart greeters. They don't exist anymore. Usually these were retired people in those vests who would be at the front of the store to welcome you to Walmart. It was a nice thing that, obviously not only during the pandemic but before the pandemic Walmart had to get rid of. I wish they would bring those greeters back. But there's one guy matter of fact, Douglas McIntyre who's been at Walmart for a while. Tell us about him.

Sally:

Yes, we are talking about an 82-year-old Navy veteran working at Walmart, and now he was approached by Rory McCarty, who was inspired and wanted to understand why this man, at 82 years old, was working at Walmart, and so he made a TikTok video talking to him and then set up a GoFundMe account to raise $100,000 so that he could retire from Walmart, which is a wonderful thing to do. And we are hearing more about how people are not retiring and they are continuing to work because they can't make ends meet on their social security or they don't have the retirement funds. Maybe they had to use it for something else, or it was poor planning. Whatever the reason, it's hard to make ends meet now as an older American. In fact, the Bureau of Labor Statistics says that the only age group whose labor force participation rate is projected to rise are people 75 and older, and that's gonna go from 8.9% in 2020 to 11.7% in 2030. So that's a lot of people that are older that are still continuing to work. Now I have two thoughts about this. One, I do feel that we need to take care of our elderly people and that people should be able to retire comfortably when that time comes, but then I also think there are older people that do want to continue to work because it's out being in the community, it gives them purpose and something to do, and so they wanna continue to work. So if that is the case, then let's think of some jobs that are appropriate for people at this age that they can do. Maybe it's shorter hours. Think about what we're paying them, what benefits they're getting. So if we are gonna have employees that are this age, then let's make those good jobs for them.

Phil:

Yeah, I can think of some right off the top of my head. Senator, congressman, president, that's all for people over 80.

Sally:

Well, that's up for debate right now.

Phil:

Exactly exactly, but it's true if you look at the average age. It's been talked about in the Senate and in Congress. I mean there's a lot of old people there that maybe it's time to open it up and let the younger generation come in. And these old senators hey, I can call Doug McMillan. I can get him a job at Walmart being a greeter From Washington DC Senator to Walmart. Why not? Okay, Danone is really attacking the climate crisis and food insecurity in a big way, probably more than any other large company. They are the largest B corporation that's there, and what their chief research and innovation officer has said, their task is is we're a food and beverage company fully reliant on nature. Without cows, there's no milk. Without fruit and vegetables, there's no baby food. Without almonds or soybeans, we cannot produce our plant-based beverages and yogurts. We have to make sure that we protect the planet and slow down climate change so that we can deliver our mission of health through food. So Danone has been at this for a while. They launched their regenerative agriculture program back in 2017. And when you take a look at this story that's in Quartz, it's really an in-depth interview that this is something that every CEO of every CPG company should be reading, paying attention to and copying. And what they say Danone says is the issue of food accessibility is as important in America as healthcare and jobs. So now they're working with more food banks, with more food deserts and so on to make sure that we can get their healthy products out there. They've got three pillars health, nature and people in communities and I just give them a big hat's off. What do you think?

Sally:

I agree 100%, Phil. You know, recently we've been hearing about how we're doing report cards on how we're doing as far as our our goals, globally, to reduce emissions and to take care of the planet, and that has not been very encouraging what we're hearing back, but this is encouraging to see a company like Danone really taking responsibility. They started their regenerative agriculture program in 2017 and their goal was to turn 100,000 acres into healthier soil. Sorry, but they surpassed that soil. Can't say it. Okay all the dirt, it's dirt regenerating 250,000 acres, so that's 150,000 more than they set their goal for. And what I really like about what they're saying here is that you know that it's very important to them to reduce methane emissions. They know how important it is, but they also feel like dairy is an important nutrient for human beings. So let's find a way for those two things to coexist. Together, we can take care of the planet and we can have these foods and these nutrients that we want.

Phil:

Absolutely so on FoodN ot Phones today we turn to NPR. I happen to love NPR, I'm a huge fan of it, and it's because of stories like this they uncovered something which I had never heard of before, called the Friendship Project, Sally. What's the Friendship Project and why should we care?

Sally:

The Friendship Project is a wonderful program in Massachusetts, and how I think of it, Phil, is it's like a Big Sister/B ig Brother program, but for adults, and they're primarily focusing on adults with disabilities, adults with Down syndrome, adults with autism. But these are people that would like to connect with a companion that isn't someone that is paid to work with them. So what this organization is doing is they are taking volunteers, they're doing full background checks and vetting all of the people that apply to do this and then they're matching them up with someone who is experiencing loneliness and needs a connection, and they do things like go out for coffee or go bowling or go and exercise together, take a walk, and it's a wonderful program, and the reason that this program has been - one of the reasons this program was born - is exactly what we've been talking about is our epidemic of loneliness that we heard about in the public statement from the Surgeon General this year, and that we are an isolated society and that this contributes to our mental and physical well-being and can cause serious illness. So this is a wonderful way to connect people together and, as we're doing tomorrow with Food Not Phones, we want to encourage people to put down those phones when they're sharing meals together and make that face-to-face contact and really start having conversations with each other, not through our phones but face-to-face.

Phil:

And really be able to have a battle with this war on loneliness and for us to win it all. Thanks, Sally. On Lost in the Supermarket, I spoke with Elizabeth Pigg, chief Marketing Officer of That's It, one of the nation's leading plant-based snack makers and one of the partners in Food Not Phones. For the complete interview, just log on to SupermarketGuru. com. Here's what she had to say. You're on the advisory board for #Food Not Phones, which is right around the corner on September 19th. Why are you participating and why should other people care?

Libby:

Sure. So thank you so much for inviting me to be a part of that. I'm super excited about it. Food Not Phones, September 19th. It was already obvious to me that putting your phone down during meal time is a respectable, respectful, courteous thing to do. It obviously builds connection with other people, right. What I had no idea about is that the surgeon general issued an advisory that there's an epidemic of loneliness and isolation, and being on your cell phone all the time, especially during meal time, is a contributing factor to that. So that blew my mind, and then I started thinking about this vacation that I went on with my mom about 14 years ago on a cruise ship, and this is back when the internet wasn't so reliable and wasn't so affordable. So we opted not to have it during our cruise ship, and I always had my phone out during meal time with my mom, not to be rude, but we played trivia, you know, like guess how old this actor is or what city this was in, and when I didn't have the opportunity to have my phone out, we just had to have a conversation from our minds and our hearts and looking back now, those are some conversations that I remember more than any other. So this year we're going to be creating some really fun content on our channel, and when it's meal time we're saying that's it, phone's down.

Phil:

On the Bullseye today, it's the return of the milkman. Does this mark a new era, possibly for increased sales for milk? Well, as many of you know, my grandfather and father had a dairy farm and were milkmen, so I'm thrilled at this latest trend that could be game-changing for the industry. In a turn of events reminiscent of yesteryear, cities across the nation are witnessing the nostalgic resurgence of the milkman. This evokes memories of mornings that are greeted by fresh milk bottles on the doorstep, with the clanking of glass echoing down quiet suburban streets. Remember that as it makes its way back into the urban landscape. The Lempert Report takes a deep dive into the implications for consumers and the milk industry. So here are some benefits to bringing back the milkman. Number one, very important, is sustainability. Glass bottles are reusable and, when managed properly, have a lower carbon footprint than plastic. Remember that all that glass is is sand and water under pressure. The return of the milkman indirectly promotes a sustainable approach to packaging, with these bottles being collected, cleaned and reused multiple times. For example, here's one of my grandfather's milk bottles that's still around, close to probably a hundred years later. Local Supporting local dairies can boost local economies. The direct-to-doorstep model enables these smaller dairy businesses to thrive and to compete against large corporations, ensuring a fair marketplace. Direct delivery often ensures fresher milk, with reduced time spent in transit and storage. Milk delivered to doorsteps tends to be fresher than what you'd find in a supermarket. When I buy milk in a supermarket, it's co-dated for 45 days ahead. Fresh: The milk delivery service often extends upon just milk. Direct delivery allows dairies to build strong relationships with their consumers, to gather feedback and tailor offerings accordingly and, most importantly, it brings human contact back to our doorsteps. Yes, there's no question that bringing back the milkman will increase the cost to the customers. Frankly, it's not for everyone, but for those customers who opt for the service, it will be a strong and recurring business model. The door-to-door delivery model also opens up a new channel of revenue for these local dairies, in many cases who are struggling, which is especially valuable during these times when traditional retail is challenged. The rebirth of the milkman model speaks to a deeper desire among all of us consumers, a yearning for simpler times, more personalized service, sustainable choices and, as Sally said before, more human contact. However, it's not without its challenges. For the model to be successful in today's world, it must be blended with modern conveniences like online ordering, flexible delivery windows and a diverse product range. A great example is Dan and Debbie's Creamery in Ely, Iowa, coining the slogan 'spilled milk you'd cry over' to accompany their vintage-style logo, and black-and-white imagery has solidified their brand by making it authentic and relatable to consumers. Their community sees those words on the side of their classic white delivery truck as it drives down the road. After Dan and Debbie grew the delivery service, the dairy told Dairy Herd, people felt a connection to us as a family, even more so than our products. Over the last three years, customers have signed up for our weekly milk subscription program and that day of the week has become their favorite day. It's bringing back those moments of their childhood. People are at the door waiting and greeting us by name. Dan and Debbie's Creamery, Dairy Heard reports, chooses to not only talk about their values through their keywords on their website, but exemplifies them in their customer experience. The Creamery does not ding and dash when they deliver like your Amazon driver does. They make a point to thank each and every customer. Josie Rosam, Dan and Debbie's daughter, who's the director of operations, told Dairy Heard that, in terms of food and farming, consumers are questioning everything. The unique opportunity for farmers is the ability to share their why and potentially build a relationship with the consumer. It's good for the dairy, good for the consumer and good for us all, Sally. Any questions or comments today?

Sally:

We have a great comment from John Pandol, as always, he says. At the Raleigh State Farmers Market Restaurant, a diner at the counter mentioned how nice it was to see no one using their devices. The waitress said they specifically don't have Wi-Fi to encourage fellowship while eating. True, the only one using a device was me. Put it down, John. Put it down. Put it down and have had a nice chat with this gentleman down the counter, and then he leaves his comment with #FoodNotPhones. Thanks for the hashtag, John.

Phil:

Thank you, John. And Kyle, thanks for the shout out as well. Thank you all for joining us. Make sure that you visit SupermarketG uru. com during the week for more updates and don't forget tomorrow, September 19th # foodnotphones. Put down the phone during breakfast, lunch, dinner, even snacks. Hashtag it out to all your contacts so that they know to leave you alone to enjoy your food. And we'll be back here next week.

Sally:

Be sure to visit SupermarketGuru. com for the latest marketing analysis issues and trends, and don't forget to join us back here next Monday at 2.30 PM Eastern for more.

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