The Hub Cool News

Marriott Spaces

marriottMarriott is tinkering with the hotel room of the future in its innovation lab, reports Andrea Petersen in The Wall Street Journal (10/1/15). It seems that “fancy shampoos and crisp white duvets” are no longer enough and that it’s more about the number of electrical outlets and the size of the desk and closet. The closets actually are getting smaller because millennials tend not to unpack. Desks are shrinking, too, because younger guests oftimes work from the bed. As for the number of outlets — the optimal number is “10 electrical outlets and USB ports” because “the typical traveler totes five devices.” Carpets, meanwhile are being replaced by hard surfaces because guests suspect that the carpets aren’t very clean.

Armoires are also being shelved because it’s no longer necessary to house big, bulky televisions, and travelers aren’t using the drawers as much anyway. The problem is that the carpets and the armoires helped muffle television noise and “clicking heels.” One solution is to put “honeycomb soundproofing material” on the backs of flat-screen TVs. Another is to add “sound-proofing in guest room walls, floors and ceilings. This isn’t difficult to do in new buildings, but is trickier when renovating existing ones.” Marriott tests out these and other new ideas at its innovation lab, where members of its loyalty club — and those of its competitors — are invited to spend time and be observed.

The bathroom is another major focal point: “In its AC and Renaissance brands, Marriott is moving to what it calls deconstructed bathrooms. The toilet and shower remain in the bathroom. The sink is open to the rest of the room, with a frosted glass divider providing some separation.” This is so one guest can use the shower, for example, while the other is putting on makeup. Marriott collects feedback on changes via a guest survey after a stay — only about one percent fill it out but Marriott finds this useful. For example, an idea to replace empty in-room fridges with a Nespresso machine was nixed after guests said they liked having the empty fridge. So much for “an upgraded coffee experience in the morning.”


eatsaA new restaurant in San Francisco “is almost fully automated,” reports Claire Cain Miller in The New York Times (9/9/15). Eatsa, which specializes in quinoa dishes, has “no waiters or even an order taker behind a counter. There is no counter. There are unseen people helping to prepare the food, but there are plans to fully automate that process, too, if it can be done less expensively than employing people.” Patrons first browse the menu on flat-screen monitors, place and pay for their orders via iPad, and then pick up their food at a “cubby” where food is deposited behind a blank screen that opens when tapped.

“Technology allows us to completely re-think how people get their food,” says Eatsa founder David Friedberg, a software engineer. While automated eateries are nothing new — Horn & Hardart automats, for instance — “Eatsa goes well beyond that by using software and supply-chain innovation to fundamentally change how a restaurant runs.” Andrew McAfee of MIT and co-author of The Second Machine Age, thinks Eatsa is of the future. “I think for a lot of the meals I’m going to want to eat out in five years, if I don’t deal with a person, that’s not going to be a net negative for me at all,” he says.

David says the point is not to eliminate people, however. The idea is rather to “open a fast-food restaurant that aimed to be faster, tastier and less expensive.” He settled on quinoa because, he says, it’s “a much more efficient way to deliver protein to people than animal protein.” Critics say the concept is a jobs killer, but David sees only growth potential. “The reality is the economic growth from new technology has always resulted in new economic activity and job descriptions,” he says. These might include “building automated machines and software systems — or growing quinoa.” While currently just one restaurant, Eatsa has “national ambitions.”

Delivering Joy

krispyDwayne Chambers, chief marketing officer of Krispy Kreme, details the iconic brand’s secrets of success at Hub Live: The Retail Experience Symposium. The most important thing to know about Krispy Kreme is our mission: To touch and enhance lives through the joy that is Krispy Kreme. That is not just something that is written on plaques; we talk about it all the time. We have senior-executive meetings every week where we talk about the things we do and decisions we make. These decisions are not always black-and-white, but inevitably it comes down to living our mission “to enhance lives through the joy that is Krispy Kreme.” This is what gets us to the logical decisions that align with who we are.

That’s a hard thing to do. Being a public company makes it even harder. We have all these metrics. When I came to Krispy Kreme, I was asked about business objectives. What they were expecting was sales, transactions, average check and those kinds of things. In my opinion, those are results of having the right objective. Immediately, somebody said that this sounded like a little bit of a marketing cop-out. The answer to that is: Is it easier for me to turn around some sales or to touch and enhance people’s lives? I would say that it’s much harder to touch and enhance people’s lives.

The other part is, when we start missing our expected results, we don’t look at the typical things. We look back at our mission and whether we were enhancing people’s lives the way we were supposed to. Our former CEO, who is now our chairman, was always one to talk about how we’re not in the doughnut business. We create far more than that. That’s the key for us. I have investors who come through quite often, who will say things like: So, inevitably, you will have to expand the menu when doughnuts aren’t relevant anymore. I respond by saying that this assumes we’re in the doughnut business, but we’re not. Secondly, we’ve been doing it for about 78 years. If you look at the relevance of what we do, it’s about joy. Continue Reading The Krispy Kreme Story.

Alphabet Soup

first-google-logoThe very first Google logo was a scan of the back of Larry Page’s hand, according to Wikipedia. At the time, the company was known as BackRub, and Sergey Brin was the graphic artist. Sergey also created Google’s first two logos, “using the free graphics program GIMP,” in 1998. At the time it included an exclamation point (image), aping Yahoo! Ruth Kedar, a graphic designer, brought a professional touch to the logo in 1999, and it hadn’t changed much since then — until this past Tuesday when the search giant unveiled its first major overhaul in 16 years.

Ruth’s design “was based on the Catull typeface, an old-style serif.” She recalls: “We ended up with the primary colors, but instead of having the pattern go in order, we put a secondary color on the L, which brought back the idea that Google doesn’t follow the rules.” The new logo (image) continues to feature the brand’s famous colors, albeit tweaked. The big change is going sans serif, rendered in a Google-designed typeface called Product Sans. Reviews have been mixed, to say the least, but of course Google says it has its reasons for the change.

The official rationale is functionality. Google says the old logo was fine for use on desktops but the new one is designed to work well on any kind of device or platform, no matter how tiny, and represents the “Google of the future.”(link). Others note the timing of the new logo, following the announcement of Alphabet, Google’s new parent company. Allen Adamson of Landor sees a logical link within. “They’ve almost taken a step toward Sesame Street with this change,” he told Bloomberg News, adding that the new logo “feels less corporate and far more friendly,” which makes it feel “easier to use.”

Mass Craft

old-blowhardThe big distillers believe they can be just as “crafty” as the little guys, reports Saabira Chaudhuri in The Wall Street Journal (8/29/15). Pressure to respond to the rise of craft-spirits distilleries is evident in that their numbers “have mushroomed in the US to 588 from 51 over the past decade.” The American Distilling Institute also projects that “craft-spirits makers’ share of the US spirits market could rise to as much as eight percent by 2020 from the current one percent.”

“The brand equity of the word ‘craft’ is spectacular,” says Tom Mooney of the American Craft Spirits Association. “It implies more care, greater quality, that you’re supporting something from within your community.” Bill Owens of American Distilling Institute says that this is “a story that the big boys can’t tell.” Diageo CEO Ivan Menezes disagrees. “Craft is just a label,” he says. “The real question is, how do you engage with consumers around authenticity, craftsmanship and stories that resonate?” There’s also a technical definition of craft production as “less than 100,000 proof gallons.”

Diageo is addressing all of the above with Barterhouse Whiskey, “which it describes as having notes of roasted grain and charred oak with a brown-sugar finish,” and Old Blowhard Whiskey, which is “hand bottled.” Larry Schwartz of Diageo says the goal is to become the largest craft-distillery in North America. Colin Spoelman of Kings County, a craft distillery, says the big guys have an advantage in their “inventories of well-aged whiskeys. It’ll be interesting to see in five or 10 years where things stand,” he says.

Fargo Values

wells-fargo When Henry Wells and William Fargo established Wells Fargo in 1852, omnichannel meant the efficient delivery of messages and financial services by ship, horseback, railroad and stagecoach. It wasn’t long before the telegraph enabled electronic transactions, later followed by radio, the telephone and, of course, the World Wide Web. Yet while the technology that animates the Wells Fargo brand experience has changed dramatically over the past 160 years or more, the essence of that experience has remained remarkably unchanged. Then, as now, the mission is to help customers — whenever, wherever and however needed. To this day, the Wells Fargo culture is grounded in the philosophy that providing financial services is more about building relationships than enabling transactions.

In other words, omnichannel is not about the channels, or the means through which Wells Fargo communicates or delivers services to its customers; it is about the many interactions that color its customers’ daily lives. As Chief Marketing Officer Jamie Moldafsky explains: “We think of the brand experience as the totality of how people feel about our brand and engage with it … There is that very practical, rational level of just getting things done as quickly and efficiently as possible, but connecting with the brand emotionally goes to a different place. It means we’re committed to the relationship and are always there to help our customers.” That might sound kind of warm-and-fuzzy, especially for a bank. Then again, money certainly packs an emotional punch, and a focus on how customers feel arguably is more important than anything else.

This presents challenges not only for Wells Fargo, but also every brand striving to balance the efficiencies of technology with the vagaries of humanity. The bottom line is that Wells Fargo today is the most valuable bank on earth, with a market capitalization of $300 billion. The Wall Street Journal reported that this is “thanks largely to its relatively simple business, which doesn’t rely on many complex derivatives or risky trades using borrowed money.” It simply accepts deposits and lends that money, not unlike the way Henry Wells and William Fargo (also founders of American Express) did it back in the day. This speaks to the values that guide the Wells Fargo brand experience every bit as much as the way its associates treat customers at local branches across America. “It’s not just about providing the right solutions,” says Jamie. “It’s understanding who our customers are and why we have the right solution.” Read The Hub Interview with Jamie Moldafsky

Chuck Taylors

chucks-IIChuck Taylors have become a very important source of Nike revenue and earnings growth,” reports Jeff Sommer in The New York Times (8/2/15). Converse, which first introduced its All Star sneaks in 1917 and Chucks in 1934, “is now the only Nike operating unit whose revenue and earnings are disclosed separately in Nike’s income statements.” Converse was acquired in 2003 for $305 million in cash, at a time when its revenues were just $205 million and Nike’s annual revenue was $10.7 billion. Converse had gone into bankruptcy just two years before Nike acquired it.

Today, Converse shows profits of “$517 million, compared with $4.2 billion for Nike overall” and “has been growing faster than the rest of Nike.” It currently “sells more than 270,000 pairs of Chuck Taylors a day, 365 days a year … That works out to 100 million pairs a year.” Sales may accelerate even more with the introduction of the Chuck Taylor All Star II, which feature a more comfortable sole and are priced $20 higher than classic Chucks. “A lot of our customers said they wanted Chuck Taylors to be more comfortable,” says Converse general manager Geoff Cottrill.

The new design is not a performance sneaker, just a more comfortable version of classic Chucks. Purists may not like it, but Geoff says the key was to offer a “new” kind of Chucks without discontinuing the “classic” style — avoiding the mistake Coca-Cola made when it replaced its original cola with a new version. “A considerable number of people believe the original classic Chuck is the most comfortable sneaker in the world,” says Geoff. “We’re not changing that sneaker.” The first wave of the new shoes reportedly “sold out within 24 hours,” at least in “most sizes and colors.”

Purely Panera

paneraPanera’s head chef Dan Kish says his “family’s farm informs his work,” reports David Gelles in The New York Times (7/5/15). The farm in question was that of his grandparents, where his “grandfather would squirt cow’s milk straight from the udder into his mouth” and his grandmother “taught him how to cook on a white enamel Westinghouse gas stove.” Dan has since been trained at the Culinary Institute of America, “worked at fine restaurants” and “apprenticed with a Michelin-starred chef in the French Alps.” He joined Panera ten years ago.

“My approach to food is pretty fundamental,” says Dan. “I want people to experience the quality of the ingredients, rather than something manipulated with additives.” Eliminating high-fructose corn syrup is one of his chief goals, because he believes it contributes to obesity and is also not “something you’d find in your home pantry.” So far, Dan has eliminated the syrup in “salad dressings and most pastries.” Soft drinks are more problematic, but Panera is working with PepsiCo “to come up with syrup-free alternatives to Pepsi, Mountain Dew and Sierra Mist.”

Ten years ago, Panera “became one of the first national chain restaurants to stop serving poultry raised with antibiotics.” Panera stopped using trans-fats in 2006, and in 2010 “became the first big restaurant chain to tell customers how many calories were in each item on its menu,” before FDA mandated such initiatives. Last year, Panera introduced its No-No List” of “more than 150 ingredients it either no longer serves or plans to phase out.” CEO Ron Shaich says it’s up to the industry to evolve along with Panera. “The marketplace may be the most powerful way to effect change,” he says.

Great Indoors

biophiliaSome corporations are re-designing offices to bring the outdoors in, reports Keiko Morris in The Wall Street Journal (7/2/15). “People were leaving the office to get better coffee, to get fresh air,” says Jacqueline Barr of Ted Moudis Associates. “Employers went, ‘Hold on a minute. Why aren’t we making those opportunities inside the office?'” The idea to introduce outdoorsy elements into office design is in many ways a response to “the stress people experience in the work environment,” says Brenda Nyce-Taylor of Gensler, a design firm. “The connection to the outdoors is a restorative thing in terms of our psyche.”

Among Gensler’s clients is Dressbarn, which “decided it wanted to create a much closer connection with the outside world at its Mahwah headquarters, where it moved after being in a cavelike office without windows. The new office has skylights and floor-to-ceiling windows with views of the hills. Reclaimed wood from pallets is used throughout the cafeteria, which serves produce grown in the vegetable garden on the premises.” “The minute you walk into the place, you almost feel like you’re outside,” says Dressbarn president, Jeff Gerstel. These “biophillic” touches can have an important effect on productivity.

Biophilia” is a “theory that humans have an inherent affinity with nature and that this kinship plays a role in physical and mental health … more natural light, as well as different vistas, colors and patterns, can help nurture creativity, improve moods and enhance the ability to focus.” Stephen R. Kellert of Yale says the more traditional windowless, cubicle setup can have the opposite effect. “We have put ourselves, ironically in these inhumane, sensory-deprived, barren spaces,” he says, where people “get tired more readily. They are bored … and don’t think critically or solve problems as well.”

Side by Side

roundable-67Keeping the brand promise starts with working together. A Hub Magazine roundtable discussion featuring Ram Krishnan of Frito-Lay, Kim Lefko of Weber Stephen, Josh Kern of Smashburger, Rick Dery of Gulf Oil, and Hugh Boyle of TracyLocke.

What is the secret of successful collaboration?

Ram Krishnan: The end-to-end consumer experience is owned by the entire enterprise. It’s not owned by one single function like marketing. This is especially true in an organization like Frito-Lay, where we have a sales force of 30,000 frontline, direct-store-delivery people, who call on stores and interact with store managers and consumers. They are part of owning the entire experience.

In addition, in marketing the job description is no longer as a marketer, but as a marketing technologist. This is driven by changes in three things: consumer’s expectations of having two-way conversations, technology, and data. There is no longer a single, awesome person who has all the information on everything that’s needed to build great marketing programs.

Great collaboration starts with the overall vision for the project or the assignment. Make sure that everyone knows from day one what the bigger picture is. Second is making sure you have brought the right people together from the start of the process. Don’t just bring them in towards the end and add in the PR element or the like. The third thing is to try to remove the barriers for the team. I always look at my role as CMO to be more as a facilitator than a direction giver. You also want to celebrate even minor accomplishments throughout the process and reward successful collaboration. Continue Reading.

Air vs. Overheads

overhead-binsSolving the overhead bins problem may take some airlines a decade, reports Scott McCartney in The Wall Street Journal (6/25/15). For many airlines, the problem is of their own making. By cutting the number of flights to fill more planes to capacity they made it impossible for some passengers to bring bags on board. A Boeing 737-900, for instance, “has about 180 seats” but only enough bin space for 125 carry-on bags. Charging fees for checked bags further compounds the problem, as it motivates passengers to use carry-ons instead. Some note that airlines may have this backwards. “We give away the most valuable space on the airplane — the overhead bin — and we charge for the least expensive space — in the belly,” says David Cush, CEO of Virgin America, which has no plans to change its policy.

Southwest has taken a different approach to solving the problem; it simply doesn’t charge for checked bags, which tends to reduce the number of carry-ons. The airline’s bins also accommodate carry-ons that are “2 inches longer, 2 inches wider and 1 inch deeper than American, Delta and United.” Southwest reports that this “makes it more attractive to travelers, and revenue from extra passengers exceeds potential bag-fee revenue.” Passengers on Spirit Airlines, on the other hand, must pay more for carry-ons ($35) than checked ($30) bags. Those rates go up to $55 and $50, respectively, at the airport. This also reduces the number of carry-ons, and Spirit says it also has improved its record of on-time departures because “flight attendants aren’t frantically checking bags that don’t fit.”

Delta’s possible solution is a valet service that has “airline staff load passengers’ carry-on bags,” on the theory that they can do so faster “and with less wasted space” than passengers. Boeing, meanwhile, is working on “a new bin design … with a bin that pivots up into the ceiling rather than being a fixed cabinet.” New planes can also be ordered with so-called “space bins that are large enough to turn roll-aboard bags on their side instead of lying them flat. That means six bags in each 60-inch long bin instead of four.” Then there’s the Air Transport Association, which proposes “worldwide guidelines that would shrink maximum carry-on sizes by about 21%.” This would force travelers either to buy new bags or pay to check their existing ones — either way paying “to solve a problem airlines created.”

Harley Kickstarts

harley-logoFor Harley, the new counterculture is where the rubber hits the road. As reported by James R. Hagerty in The Wall Street Journal (6/20/15), the motorcycle maker’s new CEO spends “much of his time thinking about how to pull today’s young people away from their electronic devices and onto the road.” It’s not that Matt Levatich necessarily thinks there’s anything wrong with screen time, just that perhaps people are ready for something else. “People are going to want to actually live for real,” he says, “and I think we have a product that has a great fit with that outlet.”

That product may not be your father’s Harley — “many of which sell for more than $30,000.” Harley now has Street bikes “priced as low as $6,800″ and “has demonstrated prototypes for a battery-powered LiveWire motorcycle designed for young, urban riders who think gasoline engines are bad for the planet.” Harley hasn’t given up on Baby Boomers, “catering to them by offering three-wheeled models and lower-slung two-wheelers that are easier to mount.” But the real challenge is to get a new generation on wheels, which is uphill even when it comes to Matt’s own teenaged sons.

Matt tried getting his kids interested in dirt bikes, but they didn’t bite. It was only after his older son’s Yale roommate expressed astonishment that “the son of a top Harley executive didn’t ride motorcycles” that he finally got himself a biker’s license. Harley’s other priority is to attract women and minorities, and hopes that its “smaller, nimbler” Street bikes will appeal to urban riders. It is also now making bikes in India as a gateway into Asia, which it expects to become its biggest market for Street bikes. Overall, Harley anticipates its greatest future growth will happen outside the US.

Narragansett Cool

narragansettA former industrial beer becomes cool by tapping into the local, craft-beer trend, reports Rebecca Greenfield in Bloomberg (6/12/15). In its heydey — the 1960s — Narragansett beer “produced up to two million barrels a year.” “It had a 65 percent market share, and it was a part of the very fabric of New England,” says Mark Hellendrung, its current owner. By the time Mark bought the brand in 2005, it was brewing “fewer than 600 barrels,” having become a watered-down shadow of its former self. The first thing Mark did was engage the brewery’s former brewmaster, Bill Anderson.

Bill “tweaked the recipe to add more hops and a maltier flavor,” which “also affected the color of the brew.” “It’s an aesthetic thing,” says Adam Bohanan, a bartender at Brew Inn, in Brooklyn, NY. “It actually looks slightly darker than PBR (Pabst Blue Ribbon). People see that, and they’re like, ‘oh, it’s a darker beer, and darker beers are normally better.'” Mark “also tapped Narragansett’s 125-year-old history to appeal to the younger, hipper crowd.” That history includes a memorable pop culture moment, a cameo in the movie Jaws. (video)

This has given Narragansett a point-of-distinction relative to PBR and Budweiser, and sells for “$4 to $6 for a 16-ounce can. PBR is around $3 to $4 for a standard 12-ounce can.” GuestMetrics reports it is “the cheapest of the top four fastest-growing beers in Brooklyn in the past year … trumped only by Allagash, Bell’s and Blue Point, three craft beers that can sell for almost twice as much as Narraganssett.” In 2014, Narragansett produced more than 78,000 barrels, generating $12 million in revenues, “up from just $100,000 in 2005.”

My Corona

coronaAn obscure winemaker is now one of America’s top breweries, reports Tripp Mickle in The Wall Street Journal (6/16/15). You may know Constellation Brands as makers of Mondavi and Clos du Bois wine, but is also the long-time distributor of Corona beer via a joint venture with Grupo Modelo called Crown Imports. When Anheuser-Busch InBev acquired Grupo Modelo, it had to let go of the Crown Imports deal as well as Nava Brewery, which involves 10 beer brands “and the rights to peddle Modelo beers in the US.”

Because it already had a deal with Grupo Modelo, Constellation was the obvious buyer, and the deal instantly made it “the US’s third-largest beer company by volume.” This surprised even Bill Hackett, Constellation’s head of beer. Beer now accounts for 53 percent of Constellation’s sales, driving its operating profit “to $1.02 billion from $448 million since 2013, dwarfing operating profit of $647.3 million from wine and spirits.” The challenge was that the US Justice department stipulated that Constellation make “100 percent of the beer it sells by June 2016.”

“The biggest question I got when this was announced was: What the hell do you know about brewing beer?” says Bill. Fortunately, “the 650 Modelo employees operating the Nava Brewery” know how to make beer. The real problem is making enough beer, as Nava currently produces only about 50 percent of the volume needed to satisfy the US market. So, the Nava Brewery will be doubled in size, and another brewery is planned near California. “We’re doubling capacity and brewing at the same time,” says Michael Othites of Constellation. “There’s nothing like it in the brewery world.”

Responsibly Grown

responsibly-grownWhole Foods is expanding its definition of what ‘best’ means, reports Stephanie Strom in The New York Times (6/13/15). The grocer’s new program, Responsibly Grown, designates fruits and vegetables as ‘good,’ ‘better,’ and ‘best’ based not only on how the produce was produced, but also “things like establishing a garbage recycling program, relying more on alternative energy sources, eliminating some pesticides and setting aside a portion of fields as a conservation area.” The net effect is that some growers not certified as organic can earn a rating higher than those who do.

This naturally has some farmers upset, with some saying “the program is a subtle way of shifting the costs of a marketing program onto growers.” “The reports we’re getting from speaking to farmers around the country are that they are spending anywhere from $5,000 to $20,000 to comply with this program,” says Tom Willey, a farmer of organic produce. Others suggest that Responsibly Grown is part of a Whole Foods effort to compete on price against the likes of Walmart and Costco by blurring distinctions between conventional and organic goods.

Not so, says Matt Rogers of Whole Foods. “Organic is an incredibly deep standard, and at Whole Foods we celebrate that in very consistent, long-term ways,” he says. “But the organic standard does not cover water, waste, energy, farmworker welfare, and all of these topics are really important, too.” The program arrives as Whole Foods loses its position as the top seller of organic foods to Costco, and announces a new chain of smaller-format stores designed to appeal to Millennials. The retailer has not yet said whether the new stores will carry organic produce.

Whole Foods Values

Hub Live: Jeannine D’Addario, CMO of Whole Foods, on translating the warmth of the in-store shopping experience to the digital world. (video)

Glass Eyes

google-glassGoogle Glass is finding a fertile market on factory floors, reports Bob Tita in The Wall Street Journal (6/315). The smart glasses don’t look so smart on people but they do make people look smart on assembly lines. The main problem Google Glass solves is the room for error inherent in looking back and forth between the task at hand and written instructions. At Boeing, for example, factory workers “had to rely on paper maps” to determine whether they were placing “dozens of coded wires into corresponding holes.”

With Google Glass, “an assembler reads out loud the coding on a wire” and “the correct hole on the electronic version of the map lights up and flashes, providing an easy-to-follow guide.” In addition to reducing “the error rate for wire insertions … to zero from about 6 percent … the time needed to assemble a wire harness has dropped by more than 60 percent.” Fred Edman of Boeing says Google Glass also is a comfortable fit with “a lot of the Millennials in the wire shop” who “are very knowledgeable about technology” and “took to it very quickly.”

So, while Google Glass fizzled on the consumer market perhaps because they looked goofy, it’s another story at factories, where people often wear goggles anyway. “Style points don’t get you very far in an industrial environment, but productivity does,” says Tom Bianculli of Zebra Technologies, which sells its own computer headset “for rugged industrial use.” The potential downside is that increased “work speeds could increase the risk of accidents or injuries,” as could the distraction of the pop-up messages. Others note that the devices could compromise “secure computer networks.”

The Elio

elioThe Elio has three wheels, costs $6,800 and gets 84 miles to the gallon. It will be made by Elio Motors — if founder Paul Elio can get another $230 million in funding, reports Jeff Bennett in The Wall Street Journal (6/4/15). That’s on top of the $70 million Paul has already raised from an angel investor and some 41,000 true-believers who have plunked down a deposit “ranging from $100 to $1,000” for a place on a waiting list. Those who opted for a non-refundable deposit — which is most of them — will get priority.

Paul’s goal is to sell 250,000 of his three-wheelers annually. “It’s a lot of vehicles, right?” he says. “But I believe we can sell to people in the new-car market, used-car market, those who drive clunkers and those who just want it, too … The Elio is personal transportation, and people are going to want one even though they own other cars.” Even if Paul is right about the potential market, he faces huge hurdles when it comes to financing his vision. “Our capital markets aren’t set up to fund a new car company,” he says.

Most venture capitalists “heads pop off” when they hear the Elio needs $300 million before it can start making money, says Paul, who is trying to cobble together most of the rest of what he needs through a loan from the US Department of Energy. If he succeeds, Paul plans to build the car in a former General Motors plant and sell it “directly to consumers through company-owned stores,” like Tesla. Paul is not a billionaire like Elon Musk, though — he has had to take a job as a roofer to pay bills while pursuing his three-wheeler dream.

Stubborn Soda

stubborn-sodaPepsiCo is bringing a “craft beer” sensibility to its latest soda fountain machine, reports Mike Esterl in The Wall Street Journal (6/5/15). Having watched the industrial beer business lose its head to small, local craft breweries, PepsiCo hopes to avoid a similar fate in the soda business with eight newfangled flavors, including agave vanilla cream, black cherry with tarragon, lemon berry acai, orange hibiscus and pineapple cream. The move comes as niche soda companies like Jones and Reed’s show significant growth.

Called Stubborn Soda, the new line will be dispensed from a machine resembling a beer tap, where users will pull on a handle to pour their drink. It follows last year’s introduction of Spire, a machine “that allows customers to make hundreds of drink combinations by touching a screen.” PepsiCo last year also “began slowly rolling out Caleb’s Kola, a craft cola in a glass bottle and marketed as containing ‘sustainable Fair Trade cane sugar and kola nuts from Africa’.” Using cane sugar and glass bottles are other key features of the “craft soda” boomlet.

Creating products consumers perceive as “more healthful” is further fueling the craft soda trend. Meanwhile, in the dairy aisle, the trend is toward high-fat yogurt because “consumers want food that is less processed … and that includes letting fat stay put,” reports Ellen Byron in The Wall Street Journal (6/3/15). “Some research has shown that dairy fat may actually lower the risk of obesity … because it makes you feel full,” which might stop you from eating a candy bar, or maybe having a soda, later in the day.

Brown’s Super Store

brownsA Philadelphia grocer has cracked the code on food deserts, reports Maanvi Singh on National Public Radio (5/14/15). Food deserts are urban or rural areas where locals don’t have access to “fresh, healthy and affordable food.” According to the US Department of Agriculture, there were about 6,500 food deserts as of 2012. Attempts to address this by opening supermarkets often fail for a variety reasons, but mainly because it’s hard to turn a profit in the grocery business under any circumstances, but especially in poorer neighborhoods.

Jeff Brown, a fourth-generation grocer, saw the issue differently. He reasoned that profits would be thin no matter what, so the first step was to ensure the store was selling what people wanted to buy. “Before we did anything, we brought together a group of community leaders, and we just asked them to tell us exactly what it is they were looking for in a neighborhood grocery store,” says Jeff. This manifested in offering Halal meat in Muslim neighborhoods and authentic sweet potato pie where African-Americans live, for example.

Brown’s Super Store (video) — of which there are now seven in the Philadelphia area — also “invests in skilled butchers, fishmongers and in-store chefs,” to make healthy choices more appealing. Brown’s also partners with local nonprofits to offer free financial and health services in-store. Jeff is thinking about adding a cafe, because “lower income neighborhoods don’t have a Main Street with bars and restaurants,” and has now started his own nonprofit, UpLift Solutions, to advise other grocers interested in opening stores in other food deserts.