The unexpectedly close attention consumers are paying to prices on marketplaces created by the Affordable Care Act is contributing to millions of losses at Humana and merger partner Aetna, leading both insurance giants to retreat as fewer healthy people than forecast have signed up, according to a new story by The New York Times.
The result: Louisville-based Humana said it plans to largely exit the marketplaces, reducing coverage to no more than 156 counties in 2017 vs. 1,351 today.
Bertolini
Aetna of Hartford expects a loss of more than $300 million in Affordable Care Act business this year; it previously said it was a break-even operation. And it told investors in its second-quarter financial report that it’s halted plans to enter more states. “We are evaluating our footprint as it exists today to understand what solutions we can put forward to either fix the business or exit the business,” CEO Mark Bertolini told Wall Street analysts.
KFC sent fans into a food frenzy when its official U.K. and Ireland Twitter account tweeted a photo of its latest invention: the “Gravy fountain of dreams.” Employees at the fast food giant said the fountain is “only at head office for now,” but they’re reportedly trying it out in stores across the Kingdom. No word on whether it will make it across the gravy pond (Mirror). Reaction approached crack-addict levels:
@tiernagekicks@KFC_UKI oh my god ! Im just gonna shove my head under and drink it in !!!
BROWN-FORMAN: This year’s annual batch of Old Forester Birthday Bourbon celebrating founder George Garvin Brown‘s Sept. 2 birth is bigger than usual — 14,400 bottles total, about 1,000 more than last year. Woodford Reserve master distiller Chris Morris, who set aside this year’s batch way back on June 4, 2004, isn’t sure why it’s so much more plentiful. “[It] could be the result of many factors,” he says, “such as the cooperage [barrel and cask makers] made some extra tight barrels that day or we had a lot of slow growth oak in the barrels.” Birthday Bourbon is bottled at 97 proof and has a retail price of $79.99 — $1.2 million if you could somehow round up all of it at once (Men’s Journal).
Bottled in a decanter-style glass, the commemorative whiskey was initially launched 15 years ago. “In 2002, when we first introduced Birthday Bourbon, the market for premium Bourbons was almost nonexistent; Birthday Bourbon represented a ‘first’ in this category,” Morris said in a press release. “But 15 years later, global interest for premium Bourbons and well-crafted whiskeys is at a record high.” Each barrel in the Birthday Bourbon selection is drawn from the same day of production; 2016’s totals 93 barrels. It goes on sale nationwide starting next month (press release).
Brown
Brown was born in Munfordville, Ky., on Sept. 2, 1846 — coming up on 170 years ago — and moved to Louisville in 1862, where he attended Male High School. He worked as a pharmaceuticals salesman until starting the company in 1870 with the original Old Forester brand, when he was 24. Brown married Amelia Bryant Owsley in 1876, and they had two children, Owsley and Robinson. George died in 1917 and is buried in Cave Hill Cemetery (Explore Kentucky History).
PIZZA HUT: VentureBeat says Domino’s has beat Pizza Hut to launch a Facebook Messenger bot, but it could be smarter (Venture Beat).
HAIER says the wages of about 4,000 union-represented Appliance Park workers “are not in line with market realities,” as the Chinese conglomerate and labor leaders get ready for next week’s contract talks. They will be the first since China’s Haier bought GE Appliances in June for $5.6 billion (WDRB and Business First).
AMAZON is opening a distribution center in Etna, N.J., on Sept. 14, and has already taken nearly 2,000 applications for a planned 1,500 jobs there. Company officials have said the center could eventually employ 3,000 during peak periods. Construction on the 855,000 square-foot, four-floor center started in mid-2015 (Newark Advocate here and here). Amazon employs 6,000 workers at distribution centers in Jeffersonville and Sherphardsville; more about its Louisville-area operations.
The big Louisville-area employer wants to add as much capacity to its operations as possible, says New York Times technology columnist Farad Manjoo. “And rather than replace partners like UPS and FedEx,” he says in a new column, “it’s spending boatloads on planes, trucks, crowdsourcing and other novel delivery services to add to its overall capacity and efficiency.” Manjoo continues:
Amazon’s longer-term goal is more fantastical — and, if it succeeds, potentially transformative. It wants to escape the messy vicissitudes of roads and humans. It wants to go fully autonomous, up in the sky. The company’s drone program, which many in the tech press dismissed as a marketing gimmick when CEO Jeff Bezos unveiled it on “60 Minutes” in 2013, is central to this future.
How fantastical is that future? Amazon has already filed patents for self-driving trucks as mobile shipping warehouses. Prestocked with items Amazon has determined a given neighborhood might need, the trucks could roam around cities. When an order comes in, a drone might fly from the truck to a customer’s house, delivering the item in minutes.
Amazon’s how-it-would-work video about Prime Air is funny, and instructive:
The Seattle-based retailer employs 6,000 workers at distribution centers in Jeffersonville and Shephardsville. UPS, where Amazon is a major customer, employs 22,000 workers at Louisville International Airport, making it the city’s single-biggest private employer.
The ValuMarket at Mid-City Mall on Bardstown Road is a Highlands mainstay and one of only three traditional supermarkets in one of the city’s most affluent, foodie-centric neighborhoods. So, it’s been unsettling to see the shelves looking increasingly bare in recent days, with more discount tags than usual.
But James Neumann, whose family owns the small chain, has just assured me the store is simply being reorganized to create more aisle space around the perimeter so it’s easier to navigate with shopping carts, a redesign coming to ValuMarket’s three other locations.
At my suggestion, Neumann said he would ask the store to post signs telling customers what’s going on.
ValuMarket’s forlorn looks come less than two months after the Neumanns announced plans to shutter the Hurstbourne Plaza outlet on Hurstbourne Parkway at Shelbyville Road. The chain gave up the lease when the shopping center’s owners decided to redevelop the site without a grocery store, according to The Courier-Journal. The Neumanns also cited “tightening economics and a shift in local shopping habits.” The Hurstbourne store, there since 1982, had been on a year-to-year lease since the 2008 financial crisis.
Supermarket profit margins are notoriously razor-thin — 1.5%, according to the FMI trade group — and shifting competition only adds pressure. Costco is opening a mammoth warehouse store near the end of this month in the 3400 block of Bardstown Road just south of the Watterson Expressway. The $300 million Omni Hotel project downtown will include a grocery store when it opens in spring 2018. Developer Kevin Cogan is planning a huge hotel-apartment complex at Grinstead and Lexington roads, with 50,000 square feet of retail space; it’s still in the very early planning stage.
Fresh Thyme is already planning a second location as an anchor tenant in the proposed Bardstown Pavilion center in Fern Creek, a project city planners are reviewing; the Chicago-based chain opened its first store last spring in St. Matthews on Shelbyville Road. On the other hand, the Kroger-occupied property in SoBro was recently put up for sale, raising questions about the store’s future. And it’s anyone’s guess whether Amazon Fresh grocery delivery will ever come to the area.
In the Highlands, ValuMarket’s other chief general merchandising competitors are two Krogers, one on Goss Avenue, the other on Bardstown Road near Taylorsville Road. To be sure, there’s a Rainbow Blossom natural foods store at Gardiner Lane Shopping Center. But you won’t find Tide detergent, Kellogg’s cornflakes, and other popular consumer basics there. And Rainbow’s prices are out of reach for many young and elderly shoppers on a budget.
Winn-Dixie soon after mall opened in early 1960s.
ValuMarket is at least the third supermarket at the nearly 60-year-old Mid-City Mall, which this year completed a $1 million renovation of the facade that took far longer than planned, hurting tenants during the all-important holiday shopping period.
It’s unclear when the Highlands store opened, although it appears to be around 2005. The previous tenant, Buehler’s Market, lasted a year after it replaced a Winn-Dixie that closed when that chain pulled out of the Louisville market in 2004, according to Wikipedia.
After the Hurstbourne store shuttered, ValuMarket was left with just four other locations: Mount Washington; Outer Loop Plaza; Iroquois Manor and the Highlands. A sister store, First Choice Market, serves West Louisville on Wilson Avenue in Park DuValle. ValuMarket employed 450 workers when the Hurstbourne store closing was announced; about a third of them were full-time. The Hurstbourne store employed 67, according to the CJ.
Mid-City tenants took a financial hit when the mall’s renovation dragged on after asbestos was discovered in the roof, delaying completion until past the holidays. “It’s been a disaster to my tenants,” majority owner Sandy Metts told Louisville Magazine in the June issue. Metts, whose family bought the Bardstown Road property in 1976, had to reduce rent, and plans for renovating the Baxter Street side were put on are hold.
Employees say ValuMarket’s empty shelves are due to a store redesign underway.
PAPA JOHN’S said today it will open 40 restaurants in Russia over the next eight years, with the first store scheduled to open in St. Petersburg next month. Franchiser PJ Western Retail already operates more than 80 restaurants in Russia and Belarus; it’s owned by Global Restaurant Management and private equity firm Capman Russia Fund (press release). The chain opened 357 outlets last year, and now has nearly 5,000 restaurants consisting of 752 company-owned and 4,141 franchised in all 50 states and in 39 countries and territories. Beyond the U.S., the country with the single-most locations is China, with 244, as of the end of last year (annual SEC report).
In Hawaii, a Papa John’s worker is among the latest of scores of people affected by a recent hepatitis A outbreak, according to the state Department of Health. The unidentified employee worked at a restaurant in Waipahu on the island of Oahu, and brings to a total of 168 cases confirmed through yesterday. DOH investigators suspect the source of the outbreak was likely a product widely distributed primarily on Oahu (KHON-TV).
Bates
HUMANA: The federal judge hearing the Justice Department’s case to block Aetna’s $37 billion purchase of Humana has set a trial date for Dec. 5 — later than the companies had requested — and allowed 13 days for the proceedings. The date is a compromise between the two sides. During a hearing yesterday in Washington, U.S. District Judge John Bates said he was leaning toward an early November trial, but he later accepted the Justice Department’s arguments that date wouldn’t give the agency enough time to prepare. The insurers had argued for an earlier time frame, noting that the current contractual agreement between the two is subject to a Dec. 31 deadline. If the merger isn’t approved by then, Humana would have the option of walking away and potentially collecting a $1 billion breakup fee. Bates told the parties to proceed with the “expectation” that he will issue a ruling in mid-January (Wall Street Journal and Bloomberg).
Antitrust cases are typically kept on a strict timetable set by the judge, who in this case is very efficient, said David Balto, a lawyer representing several consumer groups that oppose the insurance mega-mergers. Even though Aetna and Humana extended the deadline to close the deal by the end of this year, the litigation is likely to force them to extend the closing again (Courier-Journal). The DOJ last month sued to block the merger, arguing that it would likely raise consumer prices and stifle competition.
Bates was appointed to the bench in December 2001 by President George W. Bush (Wikipedia).
FORD says professional Generation-Xers don’t always drive SUVs, but when they do they drive a Ford Explorer Sport, according to a new vehicle customer study by MaritzCX. the The vehicle has the highest percentage of Gen-X buyers of any non-luxury SUV in the United States, MaritzCX says (press release). X-ers are the spawn of the huge baby boom generation. There are no precise dates for when the group starts or ends; demographers have used birth years bracketed by the early 1960s to early 1980s (Wikipedia). Ford employs nearly 10,000 workers at truck and auto factories in Louisville; more about the automaker’s local operations.
KFC is opening a new restaurant today at Louisville International Airport, as part of an ongoing renovation of the terminal there (Courier-Journal).
TEXAS ROADHOUSE has reportedly backed out of plans to build a restaurant in the northern Chicago suburb of Mount Pleasant (Journal Online).
AMAZON‘s stock touched a new record trading high, $773.75, before easing back to a recent $771.51, up $2.95. It’s one of the Louisville area’s biggest employers, with 6,000 workers at distribution centers in Jeffersonville and Shepherdsville. More about Amazon here.
GE: The new GE Keurig Beverage Center prototype would be built right into the wall and replace basically every appliance that makes drinks, including coffee, soda, and smoothies. Wolf Appliances debuted a semi-similar mega-coffeemaker two years ago. The cost? Well over $3,000, and it didn’t even have the built-in blender.
There’s no plan to make more Beverage Centers just yet (and no word on how much each one would cost), but Chris Bissig, GE Appliances’ manager of concept and brand development wouldn’t rule it out (CNET and Tech Insider).
CNET’s cruel conclusion: The gadget looks like something out of “Spaceballs,” the 1987 Star Wars parody starring director Mel Brooks, John Candy and Rick Moraines, featuring a character named Pizza the Hut.
Here’s a bad photo of what it looks like:
That’s a pullout tray of Keurig cups is in the foreground.
KFC: An employee at a Missouri KFC has been canned after reportedly threatening to spit in a Franklin County sheriff’s deputy’s order. The unidentified officer said he was in the drive-thru of the restaurant in Sullivan, 68 miles southwest of St. Louis, when he overhead an employee in the kitchen tell a co-worker: “Oh, it’s a cop. Someone let me know which order is his so I can spit in all of his food.”
The deputy detailed what happened next in a Facebook post. He said he spoke to the manager at the counter inside. She went to the kitchen, spoke to the employee, then returned and told the officer another employee would prepare his meal. But she didn’t offer an apology, according to KMOV-TV, which reported the news. The station said KFC provided a statement saying “KFC’s policy is to treat everyone fairly, equally and with respect, and we do not tolerate discrimination of any kind. Upon learning of this incident, the franchisee who owns the restaurant conducted an immediate and thorough investigation, and the employee was terminated” (KMOV).
The incident follows two others involving Taco Bell employees mistreating law enforcement officers over the past month. In Bakersfield, Calif., several employees lost their jobs late last month after reports they’d taunted a local police officer by making “oink oink” sounds and laughing while the officer was ordering. And in Phenix City, Ala., a cashier was fired after refusing to serve two sheriff’s deputies in mid-July.
A two-piece meal of the new dish is $5.49.
Elsewhere in KFC, the chainis testing a new menu item, Georgia Gold fried chicken, in Pittsburgh and Mobile, Ala. The regionally inspired dish draws from Georgia and South Carolina, and has a honey-mustard barbecue flavor. The Yum unit picked Pittsburgh because it was “looking for a region that has different demographics that would replicate nationwide, and would give us a better read on how the product would perform across the country,” said chief marketing officer Kevin Hochman. Mobile was chosen because it’s “more familiar with this flavor profile,” he said.
Georgia Gold is available through Sept. 4 for $5.49 for two pieces of chicken with coleslaw and a biscuit (Pittsburgh Post-Gazette).
PAPA JOHN’S has the best pizza in a city famous for pies: Chicago, according to a Gawker writer whose on-the-fly review has already drawn protests. “Deep dish pizza makers are cowards who hide their ingredients under tomato sauce — a pizza paywall,” says the Gawker contributor, Curry Shoff. “The brave and noble Papa John does not hide his toppings from you, the consumer. He leaves them out in the open for only God to judge.”
Not so fast, Gawker readers were quick to reply saying the very idea Chicago is a better pizza town than, say, New York is nuts. “Chicago pizza is demonstrably inferior to New York pizza,” writes reader Johnny Dangerously. “There is no discussion, it’s like Peyton Manning vs. Ryan Leaf. That said, this Papa John’s bullshit is . . . bullshit!”
Except, maybe the Windy City is better. “Chicago pizza is every bit as good as New York pizza,” says 20% Nicer Gadzooks. “But Chicago style pizza is a different animal altogether. Most Chicagoans don’t really eat that stuff more than once a year or so (Gawker).
News about business and culture in Louisville, Ky.
Amazon’s longer-term goal is more fantastical — and, if it succeeds, potentially transformative. It wants to escape the messy vicissitudes of roads and humans. It wants to go fully autonomous, up in the sky. The company’s drone program, which many in the tech press dismissed as a marketing gimmick when CEO Jeff Bezos unveiled it on “60 Minutes” in 2013, is central to this future.
At my suggestion, Neumann said he would ask the store to post signs telling customers what’s going on.
Fresh Thyme is already planning a second location as an anchor tenant in the proposed Bardstown Pavilion center in Fern Creek, 
There’s no plan to make more Beverage Centers just yet (and no word on how much each one would cost), but Chris Bissig, GE Appliances’ manager of concept and brand development wouldn’t rule it out (
Boulevard 