Why Apple owes a huge debt to Minnesota & why its second HQ will be located there.
First, the Debt:
In 1978, just two years after it was founded, Apple won a contract with the Minnesota Education Computing Consortium (MECC) to supply 500 computers for Minnesota schools. Through what InfoWorld described as an “enviable showcase” for its products, Apple sold more than 5,000 computers to MECC by 1983, making MECC, Apple’s largest reseller.
As Steve Jobs said in an interview with The Computerworld Smithsonian Awards Program, “One of the things that built Apple II’s was schools buying Apple II’s.”
Cray Research made Minnesota the super computer capital of the world from the 1960s-80s. Without Seymour Cray’s pioneering technology developed when he created the fastest computers ever made, the personal computing revolution could never have happened.
Why Apple will build HQ2 in Minnesota:
1) Highly educated and extremely productive workforce.
2) High quality of life attracts top talent. Home to 17 Fortune 500 companies.
3) Best Buy, headquartered in Minnesota is currently Apple’s largest reseller.
4) Innovation is the key to growth for any company and Minnesota is a leader in retail & technological innovation. Think Target, 3M and Medtronic.
As the founder of another Minnesota original, Geek Squad, Robert Stephens explained; “Why is Minnesota such a great place to do business and how did so many creative people end up here? Because it’s cold. There’s nothing to do but sit by the fire, read books and strategize against your competition.”
So is Minnesota the odds on favorite for Apple HQ2?
You betcha!
Retail 2017: The good, the bad and the ugly.
The Good:
- U.S. retails sales growing at fastest pace in three years.
- C-Stores continue to grow fueled by Millennials
- Grocery produce growth outpaces other categories – again fueled by Millennials
- Just over half of Millennials prefer shopping at a brick & mortar store vs online.
- 81% of young Gen Z (age 13-21) said they preferred to shop in stores, while 40% said they will only shop in stores.
The Bad:
- A record number of retail store closings, close to 7,000 in 2017.
- Hispanic spending was down. Retail experts, economists and business leaders believe the administration’s stance on undocumented immigrants is causing anxiety in the Latino community. Hispanic business leaders added, “Many Hispanic consumers are saving money in case something happens to them or their loved ones in any crackdown on immigrants.”
The Ugly:
- Shiny, gray concrete floors have become all the rage at many retailers. Shiny is good, but many consider gray to be a soul-crushing color that promotes a feeling of being in a warehouse. Hopefully, we’ll see some Earth tones or brighter floor colors in 2018.
- Package theft by porch pirates continues to grow. Nearly 20% of American homeowners have been a victim of package theft in the last year.
- Consumers perception of ugly produce (picked by someone else) continues to slow the adoption of online grocery buying.
Consumers are Hooked on Seafood. But Will Higher Prices Make Waves?
For years, Americans have been encouraged to eat seafood more often as it’s a good source of protein, vitamins and nutrients – plus it’s low in calories and saturated fat. The health benefits are helping to drive the demand for fish at a faster pace than beef, pork and poultry.
The 6.2 percent increase in U.S. per capita seafood consumption in 2015 was the biggest jump in over 20 years. Plus, according to the National Oceanic and Atmospheric Administration (NOAA), Americans increased their seafood consumption by nearly 1 pound per personin 2015, to an average of 15.5 pounds for the year.
In the recent Progressive Grocer’s 2017 Retail Seafood Review, over half of respondents expected seafood sales to increase this year. Even so, Americans still fall short of dietary recommendations of 8 ounces of seafood per week (24 pounds/year), which means there’s room to grow.
However, many grocers saw declines last year in some higher priced seafood categories and consumption increases in 2017 could be impacted by price changes. They noted that shrimp helped boost fresh seafood volume last year due, in part, to an average retail price decline of 9 percent.
If the tide continues to rise for seafood (U.S. wild-caught seafood, in particular), prices could as well and Category Managers will need to navigate accordingly.
Millennials’ hunger for healthy, local brands causing indigestion for big food manufacturers
So why should we care what they eat? Well they’re now a larger group than the Baby Boom generation with numbers exceeding 75 million. In fact, Millennials (ages 18-36), now represent the largest segment of the U.S. workforce and have significant spending power.
The group has a strong appetite for high quality, natural foods and are willing to pay more for them. This hasn’t been good news for large food companies as they are showing a preference for healthier, organic and non-GMO foods from smaller, local food sources.
In addition, Millennials are more likely to:
- be influenced by friends than be affected by advertising
- advocate for products by posting about them on social media
- “love cooking” and consider themselves “experts in the kitchen”
- be open to shopping in non-traditional retail environments
- prefer labeling that also reveals what the food doesn’t contain (e.g. clean labeling)
As more Millennials enter the workforce and older ones move up the ladder, their spending power and influence will only grow. Understanding the buying behaviors and satisfying the unique needs of this large group will become a major component of a successful growth strategy for category managers in food companies going forward.