business news in context, analysis with attitude

We reported on Friday about how the US Food and Drug Administration (FDA) is forcing Redux, the manufacturer of an energy drink called “Cocaine,” to change its marketing approach because it is making health claims not allowed under the law. Our comment was that “it may be beyond the FDA’s jurisdiction and powers to send Redux’s executives to hell for exploiting young people and creating the illusion that somehow an illegal drug that ruins people’s lives can be cool. We remain stunned by the audacity of Redux’s approach. This is a company that spells out the name of its product on the can in what clearly looks like white powder. Disgusting.”

We also noted an irony reported by Advertising Age: that Wrigley’s new mojito-flavored gum is under attack by the Marin Institute, a watchdog group, for appealing to children with an alcohol-themed product. Wrigley argues “that mojito flavor has transcended alcohol and become a wider phenomenon, used in sauces, salsas, marinades and even scented candles,” and compares “mojito to the pina colada, another cocktail flavor that's found a life outside the bar.”

Our comment about Wrigley: “This won’t win us any fans there, but we think that in the broader scheme of things, the company has to rethink this product. We live in a country where too many young people – an astonishing number – are experimenting with alcohol. Common sense and vigilance are called for. And maybe, more importantly, leadership.”

MNB user Mike Griswold wrote:

Clearly these companies have limited concept of social responsibility. My father gave me two criteria to judge my actions: a) when I look in the mirror do I like what I see based on what I have done or plan to do, b) would I be comfortable explaining my actions or decisions to my family and closest friends. It is hard to believe that the person (s) who thought up the idea for the Cocaine drink did either. I 100% agree with you, there is a special place in hell reserved just for them.

One MNB user responded:

I totally agree with the viewpoint about cocaine. But the world of flavors would become very constricted if we start removing any reference to alcoholic beverages. One of my favorite LifeSavers has always been Butter Rum, and Butter Scotch is thoroughly engrained in the flavor world. They've just been there so long no one thinks of the fact that they started as a drink.

MNB user Dan Onishuk wrote:

I agree that the beverage should not have the namesake "Cocaine". How did it get off the buyer's desk onto the shelf is my concern - wherein lies corporate responsibility.

Not therein.

And MNB user Brian List wrote:

Kevin, I couldn’t agree with you more on both issues. Although I am not a father (yet) I have three younger teenage brothers that are influenced easily. These products are clearly being marketed towards teens in conjunction with drugs and alcohol in an attempt to create a perception that they are “cool, hip, and acceptable.” Absolutely tasteless and irresponsible. I was astounded to see the comments from one of the Redux founders, stating they knew what they were doing and acted accordingly to generate buzz. I guess I shouldn’t have expected anything different from these comments. Next time, why don’t they try and come up with an intelligent, moral way to differentiate their product.

Apparently the mojito flavor craze has other practitioners. MNB user Dawn Walterhouse sent us the following:

I was getting a standard pedicure just yesterday, saw the following, and shook my head.

Mojito Pedicure - This invigorating pedicure starts with a soak in fresh lime and mint leaves followed by cleanup of nails and cuticles followed by a fabulous sugar scrub which refreshes and exfoliates the feet. Oh, by the way, a non spirited mojito is included for your pleasure as you are polished to perfection! Denada! $70

Miami Mojito Pedicure - Similar to the Miami Manicure, warm water garnished with lime peels and mint leaves set the tone for cleaning and conditioning your feet in this Caribbean-influenced pedicure. A deep sugar and mint exfoliation is followed by a hydrating lime lotion massage and essential oils to soften and stimulate the skin. This pedicure is finished off with your choice of tropical polishes.


However, another MNB user thought we were being selective in our criticisms:

I find somewhat amusing that you are so vociferous in your attack against a rather stupidly-named energy drink (that no one in the universe would confuse with actual cocaine) that, in actuality, is probably about as cool as a candy cigarette (remember when we had those as kids? Funnily enough, they never inspired me to try the real thing.)

Besides the fact, having been through the 70s, surely you recall the hit song in which cocaine was mentioned rather repeatedly (and which millions of teenagers sang along to) -- or all those t-shirts with the word cocaine written in Coca-cola script? How did we ever survive?

And yet, when reporting things like the coffee concepts staffed with scantily-clad women in sexy lingerie...well then it's all nudge, nudge, wink, wink (not to mention pant, pant, drool.) You don't think concepts like these send an even worse message to young people of both sexes than does a stupid canned beverage that was, from the start, likely to be no more than a flash in the pan/

Fair point.

Though we’re not sure we exactly panted and drooled. And we still think that the “Cocaine” drink, available nationwide, is a worse idea than a few isolated cafés populated by scantily clad women.

We got the following email about the story saying that Wal-Mart may be dialing back on its commitment to expanding its organics selection:

Interesting information in the Business Week article about Wal-Mart and Organics. However, (as Paul Harvey might say), let's hear "the rest of the story". I went and did some personal investigation about the specifics quoted by Business Week.

Business Week quoted information from a grower in Maine of Organic Apples. That grower said that Wal-Mart had 'abandoned' prior commitments for Apples from this grower. Now, I realize that my use of terms may be somewhat exaggerated here but my point here is that Wal-mart did not back away from this particular grower because they realized the poor sale on the Organic category. They realized poor sales on the products being sold to them from this particular grower. I also learned that this grower shipped 'mediocre' quality and then wanted to re-negotiate the price after seeing the apparent demand on the items they were selling.

My main point is that I don't believe Wal-Mart is backing away from Organics. I think that they are just hitting a cultural phenomena that they will need to better understand if they are going to move forward with Organics. I further believe that they will do just that. They will overcome and conquer, because that is what they do when they set their mind to it.

Growers and Organic customers should not "relax a bit" from this story but rather be prepared for how they will react to Wal-Mart's counter to this "conundrum".

This writer knows his fresh produce…so MNB users should pay attention. We do.

And regarding the Wal-Mart vs. Tom Coughlin legal contretemps, MNB user Tom Kroupa wrote:

I am amazed that Wal-Mart was willing to pay its former vice chairman Tom Coughlin over $10 million in retirement pay! Executive pay is at odds with reality! And Mr. Coughlin was still lacking the personal ethics to even qualify for this astronomical income. When will Wal-Mart stop operating its finances out of fear and start to treat its employees like the people they deserve to be treated?

They use a tactic to push long term --meaning higher paid-- store employees out the door by first asking them to work weekends and nights and then watching them gleefully quit out of frustration. And then they hire lower paid replacements. Is this where they get the revenue to pay outrageous pay to executives? What would Sam Walton think?

Circuit City got the Wal-Mart bug too and recently laid off 3,000 plus employees to be replaced by lower wage employees. I expect the US retail market to continue its growth but Wal-Mart will, over time, lose its position as their wage-unfriendly tactics become obsolete.
KC's View: