business news in context, analysis with attitude

Responding to yesterday’s story about troubles in the beer business, MNB reader Bob Abele wrote:

It always bothers me when analysts looks at one KPI and then make decisions on the health of an industry.

Yes Beer VOLUME consumption is down, but with the continued rise of Craft beers, this should not be seen as negative on the health of that industry.

Consumers may be drinking less of the mass beers, but we should also look at the Dollar Sales.

Compare the cost of a 6-pack of Bud/Miller - to that of a Craft Beer - massively different.

Consumers tend not to 'guzzle' craft beers as one may do with a bottle of Coors…

Way back in the '90s - I sold wine - and we sold a LOT of 3 and 4 liter jugs - and quite a bit of the 5 liter boxes.

The manufacturer I worked for did all their planning and analysis on liters..... they were in a panic, but they should not have been...
As better wines found their way to the shelves, people shifted sales to less quantity and more quality….

So even as volume plummeted,  our Dollar Sales skyrocketed……

This same article could have been written 20+ years ago on the impending demise of the wine industry….

Boy, would they have been wrong.

Regarding Kroger’ mew Visa ban, one MNB reader wrote:

?Costco dumped AMEX for Visa due to excessive fees.

Now some Kroger operations are dumping Visa for fees.

Smart retailers like Winco and food for less take this excessive cost out of the system buy accepting only debit cards.

I think consumers— not retailers—should bare the cost/price for the convenience and for the reward points paid by credit card companies.

Nothing is free.

MNB reader Doug Dodson chimed in:

Wouldn’t it be great if consumers had the option of paying the credit card fees directly at checkout? Just as we add tax to the final bill, and sometimes (rarely nowadays) there are discounts for paying with cash, it seems plausible that we could allow the customer to use their payment method of choice and pay their own fees. In this way, credit card fees would become competitively priced, and the retailer wouldn’t need to overprice items to compensate for these fees.

On another subject, from another reader:

Distribution logistics is prosaic and not sexy, but it is the key here.

Amazon’s reported move into brick and mortar grocery is just another indication that it has not yet solved for its inability to recover its delivery costs. Grocery supply chains offer the thru-put and geographic reach necessary for ultra low cost supply chain operations. Said another way, it is a backhanded confirmation of the superior cost efficiency of the curbside, grocery pick-up model. What none of us may be prepared for is Amazon using an entire grocery business as a “loss leader.”

And finally, from MNB reader Frank Squilla:

I am a huge fan. Thanks for everything you do at MNB. I sit on the NACS Supplier Board and have been part of multiple channels selling our gift card and content and payment products into retail for more years than I care to admit. My Daughter Andrea is also a big fan. She works at Clif Bar and was the one who actually turned me on to your daily news.

I am not a smoker and have never been. I do, though, not get the extreme animosity toward the electronic vaping business. I trust your judgement and see you as a voice of reason.

How can the FDA ban a flavor of Electronic Cigs and cities which I find more hypocritical, like San Francisco band flavored and now menthol flavors of this product, yet allow flavored cigars and even better allow for recreational marijuana.

Is it me or is this either hypocritical or big tobacco trying to drive down the potential 100% acquisition of companies like Juul with crazy lobbying dollars that have these rules kick in, only to have them listed after they come in and save the day and promise not to market to kids.

There is an age restriction on all these products. There is bubble gum and Mango Vodka that kids love, peach and blueberry wines, but they are not banned. I honestly feel this has more to do about $$$, than caring about getting kids gravitating to vaping. I despise the smell of smoke on my clothes and my person when in establishments that allow it. If smokers vape, that is so much better for us who can’t stand the residual effects.

I know that’s a mouthful, but the hypocrisy on this subject baffles me.
KC's View: