Coyote Blog

As a purchaser of Diet Coke in the medium-sized bottles, I have come to notice that all the other Coke products are often fully stocked, but the Diet Coke is sold out.  In hotels, when I hit the vending machine, if one type of soda is sold out, it will be the Diet Coke.   Here is my grocery store this morning, with a sight I have seen many times at each of the three stores where I shop.  Note that there is full stocking of all the Coke SKU's with a huge gap where the Diet Coke should be.

I like business analysis conundrums like this, so I can think of three explanations:

1. Observer bias:  It could be all the other SKU's are out of stock an equal amount of time, but since I am not looking for them I do not notice.  I will say that I began thinking about this years ago and over the last year I have tried to pay special attention each time to what is and isn't stocked, but this is still a very likely possibility.
2. Diet Coke loses money:  It is possible that Diet Coke has the lowest margins for the local distributor.  They are committed to stocking it by Coca-Cola, but they intentionally keep the shelf stock short to minimize sales of a bad product for them.
3. Lack of granularity in distributor stocking plans:  By this I mean, if a distributor uses one stocking plan and set of product ratios in all stores, it may be that certain products sell out in areas that are over-weighted towards liking that product.  My gut feel is that Diet Coke, vs. Coke, skews more suburban and affluent.   So if they stock to a single standard plan across Phoenix, there may not be enough Diet Coke inventory in suburban grocery stores and fancier hotel vending machines.  This is a sort of variation of the observer bias issue -- Coke has a stocking problem only in a few locations, but I preferentially shop in those locations.

It is good to see that you have found a tangible way to respond to the editorial written by the Whole Foods CEO.  Your ability to pursue such a boycott is one of the great things about a free market. There are literally hundreds of food shopping choices in a large city, with a variety of value propositions from the low-cost but ambiance-challenged Wal-Mart or Target to the farmers market. Its great to see folks exercising their choice in the free market to take their business elsewhere.

Besides, if nothing else, it provides the majority of us entertainment value as we enjoy the irony of people exercising their free choice shopping in the highly competitive and diverse grocery marketplace to boycott someone who advocated maintaining choice and a diversity of options in the health care market. Hope all of you have great success boycotting the single payer medical system you long for when you don't like something it does, and I hope the single one-size-fits-all insurance option you have happens to match your individual preferences.

Anyway, I give you an A for political activism but an F for marketing if you believe Whole Foods customer base is all liberal or progressive. It may be so in downtown SF or Seattle. But most of Whole Foods stores are in places like Scottsdale, and Houston, and Dallas. For a large portion of Whole Foods customers, it is not some progressive statement, but it is simply a premium-priced grocery store selling premium quality foods. Though I suppose the Scottsdale country club mom in her new Jag gets some psychic boost from shopping there, kind of like buying a carbon offset.

Seriously -- I bet that most of Whole Food's most profitable customers just don't care about this progressive stuff. They don't go looking for fair trade coffee, or whatever. They don't care Whole Foods buys all wind power (in Texas, where the market allows this). They don't know how the employees are treated and paid. I shop there and I had no clue as to their HR policies until this week when they have been in the news.

Whole Foods does this stuff because Mackey and most of his team really believe in it. They are truly passionate about it, not like some company like Kraft who creates an organic cheese SKU because the consultants said there was a market niche for it. Really, are there 5 other corporate CEO's in the Fortune 500 whose beliefs and the way they manage more closely match what progressives would want to see? Is there even one? But this is the guy y'all are choosing to go after, this one company out of all the Fortune 500, because he disagreed with the progressive orthodoxy on a single piece of legislation? Jeez, this is like conservatives boycotting Fox News because they put a single liberal pundit on from 2-2:30AM.

I won't go into my bad experiences with Vista, nor into the story of my purge of Vista from all personal and corporate computers, but you can read here and here.

Here are some interesting Amazon sales rank numbers as of 10/16/07 for Vista vs. XP, which Vista supposedly replaced 12 months ago.  All the following are sales ranks in the Amazon software category, with a lower number implying higher sales:

XP Home Full Edition:  #19
XP Home Upgrade: #105
Vista Home Basic Full Edition:  #277
Vista Home Basic Upgrade:  #174

Obviously this is unscientific, because it is just one channel.  Also, Vista has more different segmented SKU's, so the product comparison is not exactly apples to apples.  But it is interesting, no?

The OEM market is going to skew towards Vista because that is what OEM's tend to load by default.  But even so, Dell, for example, is still offering Windows XP as an OEM option, a pretty unprecedented move this long after a new Windows launch.  But the Amazon traffic is probably 99% OS changes, since almost everyone with a PC gets an OEM version loaded.  Most of the Vista purchases are going to be upgrades from XP, and most of the XP purchases are going to be downgrades from Vista.  Does this mean Vista downgrading is outstripping Vista Upgrading?

Postscript: It has now been two months since I downgraded to XP on my kid's laptop, and we are still amazed at how much better everything runs now.  I was afraid I could not get all the drivers for XP but in the end I was succesful and everything, including the sound, is working great.  There are a LOT of websites nowadays to help you downgrade.  Or you can try dual booting.

Update:  The real indicator that this is Vista downgrade sales of XP is that the Full Edition is out-selling the upgrade edition, which is a reverse of history when XP was the lead product.  When I downgraded, I found I could not use the upgrade version of XP and had to use the full edition.  My guess is that others have the same problem, and that the very high sales rank of the XP full edition is very likely due to high downgrade demand.