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Period: April 15, 2017 to May 1, 2017
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends

Starbucks Unveils Gluten-Free Menu Items

One of the more fascinating phenomena in the food industry in recent years has been the transformation of gluten into a dirty word. A tiny fraction of Americans with celiac disease, a severe intestinal allergic reaction to gluten, needs to avoid the wheat protein. But a whole anti-gluten movement – and a multibillion-dollar industry – has arisen to accommodate people convinced that gluten is generally unhealthful. Researcher Technavio says the gluten-free food market is expected to grow at an annual rate of roughly 12 percent through 2021, Tecnomics advises food companies to go along: "if you're not speaking their language, you risk losing [them]." The latest company to “speak their language” is Starbucks, which is launching gluten-free food options – like the gluten-free smoked Canadian bacon and egg sandwich – in U.S. stores.  

"Starbucks Rolls Out Gluten-Free, Vegan Food Options", CNBC, March 21, 2017

Chipotle Continues To Rid Its Food Of Artificial Ingredients

Chipotle Mexican Grill announced it has eliminated all added colors, flavors and preservatives from the ingredients it uses to prepare its food, but not beverages. Chipotle says it’s the only national food chain to accomplish this. The company’s plan to eliminate artificial ingredients began two years ago with the decision to get rid of unnecessary additives in tortillas it uses to make burritos, tacos, and chips. The new flour tortillas are made using only flour, water, canola oil, salt and yeast. Corn tortillas used for the chips are made only with corn masa flour and water. The ingredients changes will be applied in all Chipotle restaurants in the United States.

"Chipotle Becomes Only National Restaurant Brand to Use No Added Colors, Flavors or Preservatives in Its Food", News release, Chipotle Mexican Grill, March 28, 2017

McDonald’s Big Logistical Leap: Quarter Pounders With Fresh Beef

After successfully testing the use of fresh beef Quarter Pounder burgers cooked to order in more than 400 of its restaurants in Texas and Oklahoma, McDonald’s announced it will roll out nationally over the next year. To accomplish this massive change, the company has secured the cooperation of Lopez Foods and other beef suppliers who will deliver fresh, rather than frozen, ground beef patties. The company said it “received overwhelmingly positive feedback from customers and employees” during the Oklahoma and Texas market tests and the decision to go national represents “a watershed moment.” The Quarter Pounder line includes the classic Quarter Pounder, the Quarter Pounder with Cheese, Double Quarter Pounder with Cheese, the Quarter Pounder with Cheese Deluxe and Signature Crafted Recipe burgers.

"McDonald's USA Unveils Next Big Change: Fresh Beef Quarter Pounders", News release, McDonald's, March 30, 2017

Panera Offers Greater Transparency Regarding Added Sugars, Calories

Panera Bread Co., recently acquired by the owner of Krispy Kreme Doughnuts, is the first restaurant chain to label its self-serve sodas and other foundation beverages with added sugars and calories. The federal government does not require such labeling by restaurants, thought it does for other food companies. The company also announced it is introducing six low- and no-sugar teas and lemonades. Panera is committed to phasing out artificial sweeteners and flavors, and is reviewing its entire menu based on the new sugar labeling guidance. The new drinks are being offered in New York, Washington, Atlanta and Charlotte, N.C. and will be available nationally later in 2017.

"Panera Rolls Out 'Added Sugars' Labeling on Fountain Drinks", Reuters, March 31, 2017

Pizza Chain Experiments With All-Natural Toppings, Gluten-Free Crusts

Papa John's announced it is test-marketing in Lexington, Ky., pizza with all-natural ingredients. The company is also offering customers the option of ordering gluten-free pizza crust. The company is partnering with an organic grocery delivery service, Green Bean Delivery, to home deliver pies topped with freshly-sliced roma tomatoes, green peppers and mushrooms, supplied by farms in Arizona, Florida, Pennsylvania, Kentucky, Oregon, California and Indiana. Gluten-free pizzas will only be available in the company's Los Angeles, Phoenix, St. Louis and Nashville markets for the immediate future.

"Did Papa John's Just Start Testing the Perfect Pizza?", The Street, April 04, 2017

Portland Ice Cream Parlor Uses Discarded Flavor Ingredients In Its Products

A small-batch ice cream shop in Portland, Ore., with a reputation for adventurousness in flavor combinations, is applying its expertise to a social/environmental cause – namely, food waste. Salt & Straw’s June menu will be featuring flavors of food that were otherwise destined for the trash bins. Included in the offerings at the artisan eatery, for examples, will be rum-soaked spices salvaged from the nearby East Side Distilling company, including Moroccan peppercorns, Sri Lankan cinnamon, Mexican vanilla, and California orange peel. The flavors will be re-steeped in cream and blended into frozen treats. Local food redistributors and anti-food waste organizations Urban Gleaners and the Portland Fruit Tree Project are collaborating with Salt & Straw on the project. 

"American Ice Cream Parlor is Making Flavors from Recycled Food", Stuff, April 06, 2017

Panera’s Secret: Consumers Tend To Bypass Competitors To Get There

Panera Bread Co., whose acquisition by Krispy Kreme owner JAB Holdings for $7 billion was recently announced, is a paradigm of success in today’s restaurant chain world. Its menu is upscale and distinctive, the service is fast. But it really began to surpass rivals when three years ago it adopted its ”2.0 plan,” which featured advanced technology for customer ordering and payment, a commitment to clean food (i.e., no preservatives, no artificial or other dubious ingredients), and a sophisticated delivery system. The philosophy is summarized by CEO Ron Shaich: competitive advantage means “being a place where people want to walk past your competitors to come in." 

"How Panera Won the Restaurant Game", USA Today, April 06, 2017

Yum Brands Caves To Pressure: KFC Will Transition To Antibiotics-Free Chicken

Years of pressure from food safety and consumer advocates have finally nudged Yum Brands, owner of KFC, into the clean-label chicken camp. The company announced it plans to stop sourcing chicken from farms that use antibiotics over the next two years. McDonald's, Chick-fil-A, Pizza Hut and Taco Bell have all pledged to transition to antibiotics-free chicken because the widespread use of human antibiotics in animal husbandry seems to be contributing to the rise of drug resistant pathogens. With the shift by KFC, more than half of the nation's poultry supply chain will be antibiotic-free soon, according to advocates.

"KFC Goes Antibiotic-Free", Los Angeles Times, April 07, 2017

Fighting Food Waste Has Become A Scottish Obsession

Scots, especially those who dine out frequently, have come to terms with the fact that more than 53,000 tons of food are wasted each year in Scottish restaurants, and two-thirds of it could have been prevented. If they were ever skittish (or snooty) about using doggie bags or boxes, for instance, they are much less so now. More than 100 restaurants have committed to Scotland’s Good to Go scheme, under which eateries automatically pack leftover food in branded boxes and give it back to diners. A small change, yes, but experts say it could keep more than 800,000 edible leftover meals a year out of trash bins. It’s just one of the initiatives that have won Scotland a growing reputation as a leader in food waste prevention. 

"How Scotland Has Food Waste All Wrapped Up", The Grocer, April 10, 2017

Kiko Milano Launches Brazil Business; Opens Two Stores In Sao Paulo

Italian cosmetics brand and retailer Kiko Milano launched its business in Brazil by opening two stores in Sao Paulo. According to the company, it plans to open five more new stores in the country’s capital by the end of 2017. Kiko Milano plans to invest €5 million in the opening of the seven stores in the city, according to Isabel de Almeida, the company’s brand director in Brazil. Legal problems related to importation process forced the company to delay its launch in Brazil, which was previously planned for 2016.

"Kiko Milano Celebrates 20 Years and Adds Brazil to its Global Expansion Strategy", Premium Beauty News, April 11, 2017

Starbucks Tests Vegan-Friendly, High-Protein Lunch Menu In The Windy City

One hundred Starbucks stores in Chicago are testing the new Mercato lunch menu targeted at diners looking for a vegetarian, protein-based lunch. The new menu items include salads, sandwiches, yogurt and fruit. Salad options, available at $8 or $9, include za'atar (Mediterranean spice blend) chicken and lemon tahini, green goddess avocado, seared steak and mango, and turkey and fire-roasted corn. Sandwiches ($5 to $8) include a Cuban, a burrata and basil pesto, and an almond butter with strawberries and jam. If the new lunch items are successful, the menu will roll out nationally.

"Starbucks Debuts New Lunch Menu at 100 Chicago Stores", Chicago Tribune, April 11, 2017

Wal-Mart Eyes Hundreds Of Corporate Job Cuts In US

Wal-Mart Stores Inc. said it plans to cut more corporate jobs in the US in April 2017. While expanding its e-commerce operations, the retailer has confirmed plans to eliminate hundreds of job cuts affecting its international and technology businesses, as well as its Sam's Club warehouse operations. In 2016, Wal-Mart announced plans to make 7,000 back-office jobs redundant.

"Wal-Mart Eliminates More Corporate Jobs", Reuters, April 11, 2017

Tesco Poland Plans To Scale Down Operations After Profits Decline

Tesco plans to downsize its retail operations in Poland in 2017, following a 3.6-percent drop in year-on-year profits in 2016. According to the retailer, its profit dropped to PLN 10.8 billion in fiscal 2016/17, compared with PLN 11.2 billion in the previous year. Tesco plans to close some stores in the country, reducing its retail space by about 33,000 square meters, according to the Rzeczpospolita newspaper.

"Tesco Poland profits slide, store closures expected: report", thenews.pl , April 13, 2017

Whole Foods Streamlines Operations, But At What Price?

Whole Foods Market needs to make some changes in how it operates to reverse same-store sales declines and keep investors happy. Specifically, says Jana Partners LLC, it needs to boost profit by switching to a centralized food distribution system and national buyers, like the big-box retailers. Innovations – data analytics, centralized purchasing, strict shelf management – implemented by a former Target exec are designed to streamline operations enough to cut costs, lower prices, and make it competitive with other retailers. But the company’s smaller suppliers, along with some industry consultants, argue that a change like that would compromise the company’s ability to quickly stock foodie trends and popular local brands. The changes may reduce costs, says one consultant, “but at what price to the soul of the banner?” 

"Whole Foods Aims to Cut Prices but Keep Its Cachet", The Wall Street Journal, April 16, 2017

E2open Picked To Manage Walgreens Boots’ Supply Chain

Walgreens Boots Alliance has selected E2open, a provider of a cloud-based supply chain operating network, to manage its Global Brands supply chain. Products in the cross-divisional portfolio of Global Brands include Boots Soltan, No7, Well at Walgreens, Soap & Glory, Liz Earle and Boots Pharmaceuticals. The E2open sales & operations planning (S&OP) solutions include demand planning, supply planning, inventory optimization, supplier collaboration, and sales and operations planning. Walgreens Boots Alliance spokesmen said E2open’s solutions will be critical to a transformation to “a seamlessly integrated organization that’s well positioned for further growth.” 

"Walgreens Boots Alliance Selects E2open to Support its Global Supply Chain", News release, Walgreens Boots Alliance, April 18, 2017

Kroger Appoints Angel Colon Senior Diversity Director

Retailer Kroger Co. said it has appointed Angel Colon as senior director of diversity. Kroger's director of multicultural development for merchandising since 2008, Colon succeeds Rueben Shaffer who retired in March 2017. Colon has 27 years of experience in the grocery industry, holding various management roles including product management, category management, and promotions.

"Kroger Names Angel Colón Senior Director of Diversity", Kroger, April 18, 2017

Walgreens Boots Alliance Elects Baxter International CEO To Board Of Directors

Walgreens Boots Alliance, Inc., said Baxter International Inc. chairman and CEO Jose E. Almeida has been elected to the retail and pharmacy chain's board of directors. Effective immediately, Almeida's appointment sees him join the board as an independent director and makes him its 11th member. Almeida has more than 25 years of experience in the health care market, including consumer health products, surgical instruments, and biopharmaceuticals.

"José E. Almeida, Chairman and CEO of Baxter International, Elected to Walgreens Boots Alliance Board of Directors", Walgreens Boots Alliance, April 19, 2017

Walmart Says Consolidated Net Sales Up In FY 2017

Walmart said consolidated net sales rose 0.6 percent ($2.7 billion) in fiscal 2017, but declined 0.7 percent in fiscal year 2016. According to the retailer, positive comparable sales, e-commerce sales, and a 1.3 percent year-on-year growth in retail space, boosted net sales in fisca; 2017. However, currency fluctuations and a $0.4 billion drop in fuel sales, due to lower prices at Sam’s Club, partially offset the positive effect. Comparable store and club sales in the U.S. rose 1.4 percent and 0.3 percent in fiscal 2017 and 2016, respectively, compared with the previous year.

"Walmart 2017 Annual Report", Walmart, April 20, 2017

For Now, Aldi Is Top Dog In The Discount Retail Grocery Biz

Retail grocery analyst Planet Retail expects German food discounter Lidl to grow more robustly than competitor Aldi in the coming years, but it will not unseat Aldi as the global number one in discount food sales. Aldi’s sales in 2017 – including Aldi Nord and Süd – will total €83.3 billion ($89 billion), compared to Lidl’s €76 billion. But Lidl will catch up over the next five years. By 2022, both chains will be doing about €105 billion. The leveling out will take longer, Planet Retail says, because of Aldi’s strong, and growing, presence in the U.S., where Lidle is also beginning to establish roots.

"Aldi remains the number one worldwide discount store", FreshPlaza, April 20, 2017

Lidl Launches Brand Awareness Campaign In Germany

Discount retailer Lidl said it plans to launch a brand awareness campaign in Germany. Featuring an image of a receipt, the campaign aims to highlight the company’s main focus – selling goods at discounted prices. To be launched on April 23, 2017, the campaign will feature a new brand design, as well as a new “sound logo.”

"Lidl Germany Launches New Brand Awareness Campaign", European Supermarket Magazine, April 21, 2017

Albertsons Says Interested In Buying Whole Foods

Supermarket owner Albertsons, owned by investment firm Cerberus Capital Management, is reportedly looking at the possibility of buying Whole Foods Market. According to sources, the buyout group has held exploratory talks with bankers regarding a possible bid for Whole Foods; however, no formal bid has been submitted yet. Albertsons' move came two weeks after activist investor Jana Partners said it has acquired a 9-percent stake in Whole Foods and is interested in seeing the grocer, which has a market value of $11.4 billion, a possible takeover target.

"Albertsons explores bid for high-end grocer Whole Foods", Financial Times, April 24, 2017

The Meal Kit Phenomenon Takes The World’s Kitchens By Storm

An alternative to fast food and traditional cooking has captured the attention of home cooks looking to serve fresh, nutritious meals that require little or no planning and very little preparation. For the past five years, meal kits have been purchased in grocery stores or delivered straight to the front door, globally or anywhere in the U.S. Examples of the phenomenon include Germany’s Hello Fresh, which delivers to 48 states and eight countries, and Blue Apron, which delivers nationwide. Locally produced kits, available at grocery stores and supermarkets, share one trait with those of the national companies: ingredients are fresh, take little time to cook – 25 to 40 minutes – and are convenient for weeknights or special occasions. 

"What’s for Dinner? How About One of those New Grocery Store Meal Kits?", The Kansas City Star, April 25, 2017

Tesco Bengaluru Names BT India Manager New CEO

UK retailer Tesco's technology and retail operations unit Tesco Bengaluru said it has appointed Sumit Mitra as its chief executive officer. Mitra will succeed current CEO Glen Attewell later in 2017. At present, Mitra is India country manager and managing director of central business services at BT.

"Tesco Bengaluru brings on board Sumit Mitra as CEO", Economic Times, April 25, 2017

Chinese Restaurant Chain Sees Big Opportunity In U.S., U.K.

A spicy soup chain based in Beijing plans to open 80 new restaurants this year, at least 10 of which will be outside China. Sichuan HaiDiLao, which offers free massages and manicures to customers waiting for service, already has an outlet in Los Angeles. It hopes to acquaint American and British diners with its specialty hotpots featuring steaming broths flavored with meat, vegetables and noodles. The idea is to introduce the world to genuine Chinese cuisine in much the same way U.S. food companies spread American eating styles. Because of prohibitive labor and other costs in the U.S., however, duplicating the company’s successful business model won’t be a simple task. But, says company chairman Zhang Yong, “As the Chinese economy grows and the world starts to put more focus on China, I believe there’s a chance for Chinese restaurants.” 

"This Restaurant Chain Wants to Bring Chinese Hotpot to the World", Bloomberg Pursuits, April 27, 2017

Amazon.com Posts Strong Sales Numbers In 1Q 2017

Online retailer Amazon.com, Inc., reported operating cash flow jumped 53 percent to $17.6 billion for the trailing 12 months ending March 31, 2017, compared with the same period in the previous year. Free cash flow grew to $10.2 billion, compared with $6.7 billion in the previous year. In the first quarter of 2017, net sales grew 23 percent to $35.7 billion, compared with $29.1 billion in the first quarter of 2016. Operating income dropped 6 percent to $1.0 billion in the first quarter, compared with $1.1 billion in the first quarter of 2016.

"Amazon.com Announces First Quarter Sales up 23% to $35.7 Billion", Amazon, April 27, 2017

Companies, Organizations  

Sephora Buys Turkey's Cosmetics Retailer Tekin Acar

Beauty company Sephora has acquired Turkey-based cosmetics retailer Tekin Acar. Subject to approval by the country's Competition Board, the sale came several months after Tekin Acar chief executive Tekin Acar revealed his company and the market were “facing difficulties.” According to the executive, a growing number of local retailers are having financial difficulties.

"France’s Sephora acquires Turkey’s Tekin Acar Cosmetics", Hurriyet Daily News, April 18, 2017

Lidl Slovenia Receives Top Credit Rating From Bisnode

Discount retailer Lidl has received the AAA Gold Certificate of Excellence award from Bisnode, credit risk company Dun & Bradstreet's local partner in Slovenia. Awarded to companies that receive an above-average credit rating for three consecutive years, the recognition is based on results of analysis of the company's financial statements for the previous financial year.

"Lidl Slovenia Awarded 'AAA' Gold Certificate of Excellence", European Supermarket Magazine, April 25, 2017

Beauty and the E-Commerce Beast

A. T. Kearney, April 24, 2017

Marketing & Advertising  

Sephora Names TEC Events Manager For Middle East Market

Beauty retailer Sephora appointed TEC to manage its marketing and other events across the Middle East. TEC's first assignment was the Middle East Sales, Marketing and Operating Conference held in March 2017 at Le Meridien Al Aqah, Fujairah, UAE.

"Sephora appoints TEC", Conference & Incentive Travel, April 11, 2017

Febreze Launches Walmart Campaign Featuring Olympic Gold Medalist Laurie Hernandez And Mom

Procter & Gamble's odor-control brand Febreze launched a campaign at Walmart featuring Olympic gold medalist and Dancing with the Stars champion Laurie Hernandez and her mother, Wanda. Marking the first time the brand's Walmart campaign has featured a Latina mother-and-daughter team, Febreze's marketing efforts aim to promote the new Febreze with OdorClear odor-eliminating technology. Also, Hernandez and her mother appear in an Odor Ode video campaign introduced in April 2017.

"Olympian, Dancing with the Stars Champion Laurie Hernandez Shares the Spotlight with Her Mom in New Campaign for Febreze at Walmart", Business Wire, April 19, 2017

Whole Foods Aims to Cut Prices but Keep Its Cachet

The Wall Street Journal, April 16, 2017

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