Cake and Commerce

Tomatoes at the Farmers Market Simulacrum*, San Francisco

*Ferry Plaza. Ick. Its the Disneyworld for the sustainable set.

Illinois State Legislature in the Pocket of the Liquor Distributors, Local Vintners, Brewers and their Ilk...Including the Supreme Court. Argh!

I'm spitting mad...beside myself...pissed off...and fed up. But there's little I can do, or anyone, when it comes to being compliant with a ruling of the Supreme Court. A ruling which seems to limit states' rights to some degree....

For years Illinois was one of the few states that accepted shipments from liquor stores, wineries, wine clubs with little to no restriction. It was a 'state with reciprocity' meaning (according to the Wine Institute):

Reciprocity is a legislative concept whereby each state is approached to enter into an agreement of terms for shipping wine to consumers. Reciprocity requires the legislative cooperation of other states to recognize a two-way shipment privilege. Legislation can restrict the shipment privilege, making it available only to wineries in both states, to wineries and retailers in both states, etc. Further, legislation can attempt to restrict the privilege only to wine, table wine, table wine and sparkling wine, etc. In its simplest form, a reciprocal law says “a winery in your state can ship to a consumer in my state, only if a winery in my state can ship to a consumer in your state." The reciprocal state category is now shrinking as more states transition to limited direct / permit status. For now though, this means that only wineries in another reciprocal state can ship into the reciprocal states. A winery in a prohibited state wouldn't be able to ship into a reciprocal state. The Supreme Court last May ruled that this is a violation of interstate commerce law - this is why we are moving away from these and towards more permit states.

Well, on June 4th, Illinois House Bill 429 passed by a vote of 92-6...The bill prevents any out-of-state entity from shipping into Illinois without a state-issued permit. It also requires adult signatures on shipments of alcohol. Did the lawmakers vote yes because of the signature issue -- did they think that someone would say, "representative x is all for underaged drinking because they didn't support 429"?

The bill was sponsored by Rep Edward Acevedo (Chicago) and amended by Rep Lou Lang, 16th District (Skokie). He's worked on some 'protectionist' legislation before. This google search shows his involvement in a few other bills that were ugly, but not nearly as ugly, as this one.

This article explains some of the legislation and even includes some completely delusional quotes from Lou Lang.

Here's what the article says the bills allows:

House Bill 429 is a product of nearly two years of negotiations among Illinois and out-of-state wineries, liquor distributors and Illinois retailers, said Rep. Edward Acevedo, D-Chicago, sponsor of the bill. The legislation would allow Illinois and out-of-state wineries producing up to 25,000 gallons of wine per year to ship directly to consumers under a winery shipper's license. However, retailers from other states would not be able to ship wine to Illinois consumers legally.

And here's what Lou Lang says, quite mysteriously:

“You will be able to buy any wine you want from any winery in the world,” said Rep. Lou Lang, D-Skokie. “Consumers will now have a wider variety of choice, particularly over the Internet, from buying directly from the wineries.”

Meanwhile, the rep from Evanston, Julie Hamos, paints a different picture:

“You are no longer going to be able to buy wine from a retailer, or no longer going to be able to buy wine from a broker, or no longer going to be able to buy wine from an auction house (out of state),” Hamos said. “You're no longer going to be able to buy wine on the Internet from any of those other entities that don't happen to be wineries. This is not the way we should be going in the era of the Internet.”

One of the groups supporting the law published a press release. Here's one of the less-biased paragraphs:

Under HB 429, wineries are permitted to ship up to 12 cases of wine per person per year after obtaining a winery shipper's license. It also requires winery shippers to agree to Illinois regulatory jurisdiction and pay Illinois' excise and sales taxes. The legislation also includes safeguards to prevent shipments to underage individuals and gives the Liquor Control Commission the power to conduct Internet stings and revoke the license of violators. In addition, it allows small wineries both in-state and out-of-state that produces less than 25,000 gallons of wine per year to sell up to 5,000 gallons of their wines per year directly to retailers as a means to develop a market presence.

Just reading the above makes me queasy! So even the teeny-tiny wineries must have a legit Illinois license to ship into state. Please tell me which winery producing no more than 10,700 cases per year is going to apply for an Illinois license to ship in a few lousy cases? The whole thing is absurdly protectionist...why are state vintners, retailers, brewers, etc afraid of out-of-state vintners, retailers, and brewers shipping product to individual consumers? What is going on here?

And another thought...

The reason auction houses, brokers, and retailers exist is to sell wine that, in many cases, cannot be purchased directly from the winery. Some wineries are not set up to sell to consumers, and many do not have rare or sold out vintages available. A prohibition buying from large wineries (if they produce over 10,700 cases, they're big, according to the definition of the bill) makes this bill even more suspect. This is not a 'pro-winery, anti-auction house, broker, retailer' law, this is a law to protect the mammoth distributors who maintain a firm lock on what gets into the state. The under 10,700 cases is a concession to the wealthy and a small number of vocal collectors who insist that their purchase of uber-allocated wines does not threaten the distributors.

Now the bill is off to the senate. I'm keeping my fingers crossed, but I have little faith in them. Perhaps I can buy off my state senator with a nice meal or a magnum of Harlan Estate?

Click here for a run-down on state shipping laws from the Wine Institute.

Click here for a view of an excellent map detailing state laws, with definitions.

Hey Ethicureans and Sustainable-types: Big Business is on to you, and it ain't pretty

It was only a matter of time before marketing/research consultants to the packaged goods industry figured it all out. Yep, thanks to the Hartman Group, CPGs (consumer packaged goods manufacturers, like Kraft and SC Johnson and Unilever and P&G and Nestle) can actually strategize about how to give their products a 'Brand Halo' around sustainability.

From data gathered from a qualitative and quantitative study of the Organics market, the Hartman group has outlined the pros and cons of developing a 'halo' around consumer products. You need to read this article.

Here's the Hartman Group's take on growth in the awareness of 'sustainable' grown or manufactured goods (all material copyright The Hartman Group):

We believe, as interest in sustainability grows, we will see the following happen:

• The distinction will continue to dilute as it comes to mean many more things to many people.
• Nearly every company or product can and will produce a sustainability narrative (i.e., anybody can be "green").
• Simply designating your product as sustainable or "environmentally friendly" will do little to differentiate your brand or drive a brand halo.
• Only a tiny percentage of very core consumers will even be interested in adjudicating between competing sustainability narratives to identify the most authentic sustainable products or services.
• While there always remains the possibility for product and service brands to achieve a sustainable halo, we believe it will likely be easier for retailers, especially food retailers, as they can more easily tap into the "local food" angle.

Get it, get it? There's no point, really, for CPGs to go down the sustainable path because the only barrier to entry for competitors is the cost of raw materials. Additionally it will likely never be as mainstream in understanding as it needs to be to generate the kind of sales a large company would be interested in. So lets see, if cost of entry is high and there's not necessarily an early mover advantage, and it only really make sense for retailers, wouldn't it make sense for the big CPGs to do nothing?

No. Not at all.

As the largest consumers of raw food materials, the CPGs owe it to the consumer (and, to an equal extent, the planet) to develop and maintain sustainable sources of ingredients and raw materials. Every small change they make has a large incremental impact on the type of agriculture done, the pesticides used, and the health of the planet. Since I'm just conjecturing and not using research, I don't have data to back this up, but it seems obvious - sustainable agriculture/products emphasis a polyglot approach to farming and production, which will have less of a negative impact on agriculture than the monoculture - and big organics - are having today. I'm taking a page out of the Omnivore's Dilemma (on organic monoculture and big agriculture) but it makes sense that the larger the buyer of a certain commodity, the bigger the impact a switch to a less damaging form of agriculture will have.

But there's hope for those still dreaming of a sustainability brand halo. The Hartman group advises:

1. There will always be a small number of successful entrepreneurs able to generate a sustainability halo through very specific, often technical, innovations. The Toyota Prius would be an example here. While there is no question that this is a desirable space, the fact that it requires groundbreaking innovation is a significant obstacle to those interested in simply offering "sustainable" versions of existing products or services.

2. Curiously, the more conventional pathway toward a sustainability halo may not necessarily even require many of the attributes one might otherwise imagine are necessary to craft such a halo. Our recent research reveals that firms currently generating a sustainability halo have managed this task by generating several key consumer perceptions that can be grouped loosely under the rubric "good person." Companies included in the top ten list consumers most often associate with social AND environmental responsibility include Whole Foods Market, Trader Joe's, Starbucks and Wild Oats.

OK CPG company folk, let me summarize: Sustainability is more than just a line extension. It is a commitment, not to be taken lightly or discontinued when costs run too high and your shareholders are complaining at your annual meeting. And in case you think you are going to be credible just because you have the right products, think again. Look at Wal-Mart and all they've done with organics in their stores (and, adversely, diluting the meaning of organics). Yet because of their labor practices, no matter what they stock, they will always be reviled by consumers who care about more than just 'stuff'. 'People' is part of the equation too.

End of rant.

The SuperFan! What do Americans eat?

Have you ever come across something so incredible it leaves you speechless? Something so incredible, but due to resource constraints you can never experience it again?

That's how I felt the other day when I was visiting Burger King HQ and came across a book called, more or less, "Two weeks in the life of a Superfan." What is was was a soft-bound book filled with color photos of food. A small group of SuperFans -- Burger King fanatics who include the restaurant as one of their regular meal stops -- were given cameras and told to photograph everything they ate for two weeks. It was unbelievable, and a telling look into the eating habits of a good portion of the US Population.

SuperFans were male and female and multicultural. Most were between 18-35. Some ate little Burger King, some ate none. All ate fast food several times a week. Some ate fast food multiple times a day. All shared a lack of knowledge about what 'good' food is. Breakfast was a handful of Skittles, breakfast cereal, a glass of soy milk. Some pages of the book were almost empty - an indication that the participant had eaten almost nothing that day. Other pages were full - detailing every snack and meal eaten from morning until night. Some photos were disgusting, others funny - bites taken out of a bagel and photographed, a cookie bitten and placed back on a plate.

Each SuperFan had a section all to him or herself, along with a polaroid and a brief description of her background. The header of each page for any given section had the participants name and her age and demographic.

This was, without a doubt, one of the most interesting books I have ever seen on American eating habits. Although it contains almost no text or analysis, it is a valuable piece of cultural commentary and a document that would benefit nutritionists as a window into behavior that is only growing worse, not better, with increased choice around food.

Unfortunately the book is privately published by Burger King and will likely never be seen outside the tower. If you can get your hands on this book, it is, without a doubt, one of the most enlightening reads you will have on the subject of food.

File under bad, bad idea

So you've got a good thing going. You've been selling 'em like crazy, advertising 'em on your billboard for the last year, and by your account they've been flying out the door, despite their, uh, questionable name. So why issue a press release? A press release! You gotta be wanting some publicity, or have a death wish, or both.

"Ghetto Fries" are all over the news in Chicago right now. Apparently they've been on the menu at Max's Famous Italian Beef for over a year now, but a brand-spanking new press release has only just started making the rounds. And pissing people off. The fries, a combination of -- what else-- french fries, cheddar, giardiniera, gravy, barbecue sauce and raw onions. You wouldn't find me within a mile of the place, but I guess that's why I only just heard about it today.

Mark Brown, a columnist at the Sun-Times, wrote about the origin of the name and the controversy in an article published today:

"One of those workers [at Max's], whose nickname was Ghetto Girl, became so enamored with the cheese-giardiniera-gravy-barbecue sauce-onion concoction that she ate it every day as her main meal. Ghetto Fries, he said, were named after her. Eventually, the employees prevailed upon Estes to put it on the menu.

"It's been flying out the doors ever since," Estes said. "The rest is history.""

And now, almost March '06, the sign is still up. Eh.