EDITOR’S LETTER
CharacterDriven
Aside from the lovable characters showcased on two of the cutest covers for RM, our two cover story companies – DreamWorks Animation and Beat Bugs – have one big thing in common: creating unique storytelling for children and their families. It’s not easy to do or to find the right venue to provide that kind of entertainment. But thanks to new media like Netflix and YouTube, both companies are finding their audiences, as well as growing those audiences. By utilizing those platforms, they are able to reach people all over the world. This in turn lends itself to an even greater reach when it comes to merchandising and licensing opportunities. Both companies have exciting things on the horizon for a variety of products to celebrate their upcoming launches. When licensed merchandise for characters in entertainment make up more than $107 million worth of global licensing sales, according to a 2014 study by the International Licensing Industry Merchandisers’ Association (LIMA), it’s easy to see why retailers push to get these characters into their stores. “Trolls” is the next big feature film release from DreamWorks, with so many different product launches already in the works, including exclusive and specialty items for some retailers. Beat Bugs will be tying reimagined versions of popular Beatles music and lyrics into various items for children, such as t-shirts featuring one of the characters with a song lyric or a character plush toy.
Thermos L.L.C. Thermos L.L.C. is proud to be a licensee of over 50 licensed properties. Genuine Thermos® Brand offers a wide range of lunchtime products including lunch kits in an assortment of unique shapes and designs, as well as vacuum insulated FUNtainer® bottles and food jars, ice packs and hydration bottles. Thermos is the brand consumers trust to provide quality products and convenient solutions for a more comfortable and enjoyable on-the-go eating and drinking experience.
An interesting term came up when I was talking to the DreamWorks team in regards to licensed items: badging yourself. When you’re a big fan of something, you want everyone to know – to the point that you proudly display your fandom on t-shirts, hats, jewelry and more. I see this “badging” at trade shows like C2E2 — which I recap this issue — where thousands of fans show up either in a costume of their favorite character or showing off clothing items or accessories that represent one of their many fandoms. I do both. Then you see the origination of how all of these licensing ideas and products come about through some of our Licensing Expo-related coverage. RM will be attending the show, and I can’t wait to see what’s hitting retailers’ shelves in the coming shopping seasons. With so many popular characters and merchandising avenues to explore, the show and exhibitors never disappoint. Our other major showcase this issue is grocery retail. New industry trends cropped up in a lot of our profiled companies, such as targeting a newer generation of shoppers with healthier, organic food options, along with tailoring the shopping experience to be more millennial-friendly while maintaining a store or family legacy. And we can’t forget about the tradeshows coming soon. NYCWFF and FMI Connect bring foodies from all parts of the food, restaurant and grocery industry together to share their passion: food! With two (adorable) covers to peruse, this issue of Retail Merchandiser is chock full of exciting company profiles, tradeshow previews and some sweet (literally, in the case of Chupa Chups and Airheads) New & Notable merchandise to check out. Don’t forget to follow us on Facebook, Twitter and Instagram for additional news and live coverage of tradeshows.
Stephanie Crets Editor-in-Chief
EDITORIAL -------------------------------------------------------------------EDITORIAL DIRECTOR John Krukowski john.krukowski@retail-merchandiser.com (312) 676-1125 EDITOR-IN-CHIEF stephanie.crets@retail-merchandiser.com
Stephanie Crets (312) 676-1264
EDITORS Staci Davidson, Alan Dorich, Russ Gager, Jim Harris, Janice Hoppe, Tim O’Connor, Chris Petersen, Robert Rakow, Eric Slack DESIGN ----------------------------------------------------------------------ART DIRECTOR Erin Hein erin.hein@knighthousemedia.com (312) 676-1136 DESIGNERS Joshua Beaudry, Jonathan Lyzun, Vida Soriano PRODUCTION ---------------------------------------------------------------PRODUCTION COORDINATOR Michelle DeCeault michelle.deceault@knighthousemedia.com (312) 676-1178 SALES ------------------------------------------------------------------------PROJECT COORDINATOR John Conroy john.conroy@retail-merchandiser.com (978) 299-9814 PROJECT COORDINATOR stephen.pastorello@retail-merchandiser.com
Stephen Pastorello (978) 299-9811
PROJECT COORDINATOR tony.pelonzi@retail-merchandiser.com
Tony Pelonzi (978) 299-9815
PROJECT COORDINATOR rocky.pisa@retail-merchandiser.com
Rocky Pisa (978) 299-9810
PROJECT COORDINATOR jay.purcell@retail-merchandiser.com
Jay Purcell (978) 299-9873
EDITORIAL RESEARCH -----------------------------------------------------PRESIDENT Joy Francesconi joy.francesconi@retail-merchandiser.com (978) 299-9870 VP EDITORIAL RESEARCH amy.ingoldsby@retail-merchandiser.com EDITORIAL RESEARCHER michelle.fontaine@retail-merchandiser.com
Amy Ingoldsby (978) 299-9862 Michelle Fontaine (978) 299-9875
EDITORIAL RESEARCHER anne.gray@retail-merchandiser.com
Anne Gray (978) 299-9872
EDITORIAL RESEARCHER judy.kushner@retail-merchandiser.com
Judy Kushner (978) 299-9866
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@RMmagazine Knighthouse Publishing 100 Cummings Center, Suite 250C Beverly, MA 01915 May/June Volume 56, No. 3 is published by Knighthouse Publishing, 79 W. Monroe, Suite 400, Chicago, IL, 60603. POST MASTER: Send address changes to Retail Merchandiser 79 W. Monroe, Suite 400, Chicago, IL, 60603. CANADA POST: Return undeliverable Canadian addresses to Knighthouse Publishing, 7496 Bath Road #2, Mississauga, ON L4T 1L3.
May/June 2016
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May/June 2016
| CONTENTS
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COVER STORY
8 E3 PREVIEW
As the premier tradeshow for interactive entertainment, E3 brings the video game industry’s top talent together.
10 ELECTRONIC ARTS
EA’s licensed products give players more of its games’ worlds with a player-first mentality.
14 C2E2 WRAP-UP
C2E2 brings fans together every spring for a weekend filled with costumes, comics, pop culture, art and celebrities.
DreamWorks Animation stays ahead of the curve by producing unique content on a variety of platforms while it prepares for its next slate of franchising, licensing and merchandising opportunities.
THE LOOK
New & Notable
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Hot products from Chupa Chups, Licensing Expo, WWE and Retail Monster.
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6 THE LOOK
Sanrio and Universal Parks and Resorts unveil the Hello Kitty Retail Concept Store. May/June 2016
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REPORTS
Licensing 22 Crayola Crayola partners with leading toy manufacturer Amloid Corp. on the innovative Crayola Building Blocks product line launched during the 2015 holiday season and looks forward to future product collaborations.
25 The Joester Loria Group – PepsiCo
The Joester Loria Group elevates the Pepsi Emoji experience with a new collection of Pepsi Emoji licensed products and an innovative PepsiMoji campaign launching this summer.
28 Perfetti Van Melle Perfetti Van Melle, the company behind the iconic Chupa Chups®, Airheads®, Mentos® and other brands, continues to find new ways to extend its properties through licensing.
34 Sony Consumer
31 Lisa Frank Lisa Frank’s iconic unicorns, puppies, kittens and tigers are enchanting a new generation of tweens and twenty-somethings in a renewed upsurge of licensing interest.
Retail 38 W Diamond Group
W Diamond Group brings enthusiasm to the world of men’s fashion and gives back to its community through employment initiatives.
40 JC Licht JC Licht has helped Chicagoans revitalize their homes with high-quality paint for more than a century and sets its sights on expansions.
43 T-Mobile T-Mobile eliminates industry pain points and gets closer to customers. 4
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May/June 2016
Entertainment Products
Sony Pictures Consumer Products is pulling out all the stops as it works with licensees, retailers and filmmakers on Ghostbusters and other initiatives.
SOLUTION PROVIDER DIRECTORY 52 eTail East Preview eTail East helps attendees keep up-to-date with evolving technologies and network with fellow retailers and startups through several events and panels.
53 Kendal King Group 47 Easy Rest Adjustable Sleep Systems
Easy Rest is growing rapidly with its made-inthe-USA adjustable sleep systems and unique in-home consultation process that needs no stores or showrooms.
50 Boardman Medical Supply Company
Providing high quality products and services at affordable prices are key attributes of the Boardman Medical Supply Company and Savon Medimart family.
Kendal King Group’s new Soapbox Insights + Influence division works with everyday influencers to move products from store shelves into shopping carts.
56 Baker & Taylor Baker & Taylor develops value-added services to connect content producers with customers in addition to developing new programs that lower costs in the supply chain.
62 Solution Provider Directory
THE LOOK
Hello Kitty’s Debut The Hello Kitty Shop at Universal Studios Florida marks Sanrio’s official retail debut and Hello Kitty’s first appearance at a theme park in North America. The supercute retail experience, located along Hollywood Boulevard in the theme park, offers specialty merchandise including stationery, home goods, apparel, accessories, collectibles and confectionery treats. The majority of products will be exclusive to the park. Additional Sanrio characters including Chococat®, My Melody®, Badtz-Maru®, PompompurinTM and Keroppi® will also be featured. The Hello Kitty Shop at Universal Studios Florida offers a supercute, immersive environment that fans of all ages will 6
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love. Customers can shop for exclusive merchandise, enjoy photo opportunities, create souvenir versions of Hello Kitty’s signature bow, mail letters and receive small gifts. With specially themed areas within the Hello Kitty Shop, fans can find treats at the “Hello Kitty Sweet Yummy Shop,” loungewear and home goods in the “Hello Kitty Lounge” area, multi-character accessories, stationery and gifts in the “Hello Kitty and Friends Town” area and collectibles featuring Sanrio characters reimagined with classic Universal properties in the “Hello Kitty at the Movies” area. New products and designs will be released regularly so fans will always find something new. O
“Hello Kitty at the Movies,” one of the shop’s specialty areas, offers character collectibles reimagined with classic Universal properties.
From clothing and accessories to home goods and stationery, Hello Kitty fans are sure to find something special, especially with new products and designs released regularly.
With four specialty areas to explore, fans will love this immersive Hello Kitty experience that only Universal Studios Florida can offer.
Get delicious sweet treats at the “Hello Kitty Sweet Yummy Shop.”
Fans can find Hello Kitty’s other friends available in a variety of merchandise and goods.
The majority of products featured at the store will be exclusive to the park.
Guests can say “hello” to Hello Kitty herself, as this is her first time appearing at a North American theme park.
Hello Kitty will make regular appearances at the store, greeting fans and taking photos with them. May/June 2016
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E3
INNOVATION
Meeting ENTERTAINMENT As the premier tradeshow for interactive entertainment, E3 brings the video game industry’s top talent together. BY ED KIANG, VICE PRESIDENT OF INTERACTIVE MEDIA 8
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E3
E3 is the premier trade show for interactive entertainment spanning desktop, console and mobile gaming platforms. From June 14 to 16, publishers and developrs from around the world will showcase groundbreaking new technologies and never-before-seen products at the Los Angeles Convention Center.
Over the last 25 years, WWE has seen the interactive entertainment landscape change dramatically since our first release on NES in 1989. Innovations with collaborative gameplay mechanics, social interactions and immersive storytelling have not only created a more engaging experience for hardcore gamers, but also have expanded gaming to a much wider range of demographics to include casual and mid-core audiences. In fact, according to the Entertainment Software Association (which owns and operates E3), 155 million Americans play video games and four out of five U.S. households own a device used to play video games. Alongside a lot of other fans and industry veterans, we will be anxiously awaiting to see what exciting new announcements Nintendo will be revealing at E3 for its next generation console. Of particular interest will be how Nintendo ties back its IP on mobile products to the console experience. Like WWE, Nintendo has taken its time to roll out its first mobile game but came out strong when it recently launched Miitomo with an estimated four million monthly active users and roughly one million daily active users. As the best-selling fighting game brand in history, WWE always looks forward to E3 and hearing from some of the biggest industry heavyweights, as well as the most innovative new startups. AR/VR gaming will undoubtedly dominate the media coverage as that sector is projected to hit $5.1 billion in hardware and software sales by year-end. Additionally, we expect to see a lot of enthusiasm focused on eSports, which will reach $463 million in 2016. WWE has been fortunate to work with best-in-class publishers and developers across our 25-year history in interactive entertainment. It is no accident, of course, that publishers look to iconic brands like WWE to bring massive and passionate audiences to their games. Since launching WWE SuperCard with 2K in Aug. 2014 and WWE
Immortals with Warner Bros Interactive in Jan 2015, WWE has brought in more than 25 million mobile players into our gaming ecosystem. We plan to continue building on that success with the recently announced mid-core Puzzle/ RPG, WWE Champions, from Scopely. Additionally, we have used industry events like E3 to forge partnerships for branded crossover integrations with other top-grossing hits like Glu’s Racing Rivals, Zynga’s Hit It Rich! and, most recently, with TinyCo’s Family Guy: The Quest For Stuff. Beyond what you will see on the show floor, E3 is also a great venue to share stories and best practices with some of the best innovators in the business. One of the stories that we’re proud to share is how we leverage our touring schedule of 350 live events per year and our mind-boggling 625 million social media followers into drafting opportunities at retail where we have seen double-digit, year-over-year growth for our annual console franchise. Additionally, we look forward to discussing best practices on how we parlayed our success as a major lifestyle brand to bring our mobile games to physical retail with the launch of WWE SuperTokens, featuring NFC technology as part of a broader promotion that brought together WWE licensees Freeze, Mattel, Funko and DK with 2K’s WWE 2K16 and gift cards for our award-winning WWE Network. As we head to E3 looking for the latest trends in VR gaming, eSports and mobile monetization, we’re excited to think about all the new ways that a lifestyle brand with global reach like WWE can bring it all together and enhance the overall experience using our massive reach and portfolio of licensed products. From pocket-sized time-killers to immersive virtual experiences, E3 showcases the best interactive entertainment available today and provides a window into the ideas and innovations of the future. For more information, visit www.e3expo.com. O May/June 2016
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ELECTRONIC ARTS INC.
Beyond the Game EA’s licensed products give players more of its games’ worlds. BY ALAN DORICH
EA has extended its player-first philosophy into the licensing of products based on its games, including Mass Effect.
Electronic Arts (EA) Inc. follows a “player-first mentality” in every move it makes, Licensing Director Ryan Gagerman says. “We’ve used that as our guiding principle, which is, if it’s good for the player, it’s good for us as a company,” he explains. Ryan Gagerman, licensing director www.ea.com Redwood City, Calif.
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Redwood City, Calif.-based EA is a leading producer of interactive entertainment software, including games, content and online services for Internet-connected consoles, personal computers, and mobile phones and tablets. The company’s portfolio includes such popular titles as EA SPORTS MADDEN and FIFA, Battlefield, Dragon Age, Plants vs. Zombies and Mass Effect.
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EA has extended its player-first philosophy into the licensing of products based on its games, Gagerman says. Working with companies that understand the video game industry and are able to offer products that fit the culture or DNA of the game in question, is how EA selects those its partners with. Although the products may be fantastic, “If the item does not offer innovation or meet the quality
ELECTRONIC ARTS INC.
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Retailers are finding that video game players want more from the games they play, the worlds they love.
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bar our players expect, we don’t move forward,” he explains. “Our challenge is making sure that what we’re doing is not only good for the brand, but something that our players are going to respond to.” One property that enjoyed a strong reception is Plants vs. Zombies, Vice President of EA Entertainment Patrick O’Brien says. “We’ve seen a real thirst from players to get more ‘story’ about this universe and characters than the games can provide,” he says. Dark Horse Comics Inc. has created a game-based comic book series, which is sold by Scholastic Inc. in schools. In addition, Jazwares LLC sells plush toys of Plants vs. Zombies’ characters.
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“Even there, the desire of people for stories is evident. We’ve had over 100 million video views of people using the plush toys to tell their own Plants vs. Zombies stories,” O’Brien says.
Product Partners EA has developed strong relationships with Dark Horse, Jazwares and Scholastic, as well as other licensees including K’NEX. “So many of our relationships start with one brand and often one product, and grow from there,” O’Brien says. Its relationship with Dark Horse began years ago with a Mass Effect comic. “It broadened to include collectibles with Dark Horse and now we’ve got four different titles with them: Mass Effect, Dragon Age, Mirror’s Edge and Plants vs. Zombies,” he says. “When partners do a great job, we tend to find more products to do with them.” EA recently started partnering with companies on its sports games. “We recently partnered with McFarlane to connect their line of very realistic collectible figures licensed by the NFL,” Gagerman says. “McFarlane Toys will be including digital content tied to our Madden franchise.” EA’s relationships with retailers are important, too, including stores such as GameStop, Target, Walmart and Best Buy. “We look to them as a key factor in how we deliver a positive experience to our players,” Gagerman says. “They are on the front lines,” he continues. “Retailers are finding and accepting the fact that video game players want more from the games they play, the worlds they love and dive into. “More can mean a variety of different
EA recently partnered with McFarlane Toys on collectible figures tied to its Madden NFL franchise.
Playing Together
Electronic Arts Inc. continues looking for new ways to open up its games’ worlds to players. This June, the company will bring them live events both in Los Angeles and London. From June 12 to 14, they can attend its event at The Novo at L.A. Live in Los Angeles, or at the Hammersmith Apollo in London on June 12. “We’ll bring the new games, we’ll bring the demos, we’ll bring the competition…and you get to go hands-on,” the company says. “Or join us online and immerse yourself to experience some of our biggest games of the year. Let’s live to play together.”
products from collectibles and apparel, to books and art,” he explains. “We look at ourselves in some regards as a service provider to make sure [EA’s licensing group is] supporting retailers as they provide products that make sense for those channels.” EA’s relationships will be important as it prepares to launch new Battlefield, Titanfall and Mass Effect games in the next 12 months with accompanying merchandise. “We’ll have a robust range of products across categories to give players experiences beyond the game,” O’Brien says.
The items in these launches are sometimes exclusive to the retailer, O’Brien adds. When EA launched its “Plants vs. Zombies Garden Warfare 2” game this past February, Target sold an exclusive Funko Pop! figure of Super Brainz, a game character. “We think the right exclusives provide a great opportunity for key retailers to differentiate themselves in ways that appeal to their particular customers,” he says.
Work and Play Gagerman and O’Brien take pride in EA’s culture of promoting a team philosophy. “In other companies, different divisions can be very siloed and make decisions in a vacuum,” Gagerman says. “One of the great things at EA is there is a strong spirit of collaboration and teamwork,” he says, “There isn’t a ‘this is my world, stay out of it’ mentality.” Its employees also take the time to have fun. “When you walk down the hall of our headquarters in Redwood City, you’ll see video game consoles, foosball tables and shuffleboard tables,” he says. “There are great opportunities for colleagues from different departments to come together and have fun with each other.” They also often have the opportunity to try out EA’s licensed products. Before its recent release of Plants vs. Zombies products from K’NEX, “It was not uncommon to see samples in common areas where people were putting them together and enjoying licensed goods,” he says. “We’re making sure what we have out there we have fun with, too.” EA is excited about the trends it sees in the retail space, O’Brien says. “We definitely see increased licensing and robust entertainment programs around video games in the future,” he states. Gagerman agrees. “We’re excited that some of our key retailers are really changing their model and leaning into video game merchandise as they look toward the future,” he says. O
Retail Monster
Retail Monster LLC is up and running and growing unusually fast. CEO and seasoned CP executive Michael Connolly (Disney, Nickelodeon, DreamWorks) now has offices in Los Angeles, New York, Florida and Bentonville, with hopes to crack ground in Minneapolis and Chicago in the near future. In addition to expanded operations, Retail Monster has focused on getting the right leadership into place, leaders who “exemplify” the word “retail.” Kelli Corbett, seasoned sales executive (Little Tikes, Disney, DreamWorks) joins Retail Monster as EVP, Chief Client Officer. In this role, Kelli will blend her A+ retail and supplier relationships on behalf of the company. Also joining Retail Monster, Colin McLaughlin (Classic Media, DreamWorks, Steve & Barry’s), with focus on the Northeast retailers and licensing operations. Retail Monster offers in-house licensing, vertical representation and brand ambassadorship on behalf of brands, suppliers and retailers alike. With a solid stable of partners already on board, Retail Monster focuses on solutions that work best for the retailers. With equally as much retail and licensing years of experience, Retail Monster works on selling much more than an item at a time, though they are not above that either. You can find them on the web at www.retailmonster.com.
A+E Networks Expands Brand Licensing Program
Committed to giving fans new and unexpected ways to engage with the properties they love, A+E Networks Brand Licensing is working with top partners to expand its brand licensing program into new categories and product lines around some of their most popular entertainment franchises. “The popularity of A+E Networks’ portfolio provides an exciting opportunity to work with bestin-class partners to create newly enhanced touch points and product lines, from live tours to conventions as well as publishing, gaming & gambling and retail merchandising to add value for our audiences and partners,” said Jill Tully, Vice President, A+E Networks Brand Licensing. Beginning Summer 2016, the multi-city Bring It! Live Tour, produced with Mills Entertainment, will extend the popular franchise into communities nationwide where fans will have the chance to become part of the action with Miss D and her Dancing Dolls, the stars of Lifetime’s hit series. Inspired by HISTORY’s groundbreaking series “Ancient Aliens,” the first-ever Alien Con descends October 2016. Created with leading event producer, Cosmic Con, this three-day immersive experience promises fans and enthusiasts the ultimate in alien exploration. A+E Networks Brand Licensing is teaming up with licensing partners Retail Monster, ScreenLand and SC Group to introduce new licensing opportunities across key franchises, including HISTORY’s “The Curse of Oak Island” and “Ancient Aliens,” A&E’s “Duck Dynasty” and “Wahlburgers,” and fyi’s “Tiny House Nation.”
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C2E2
Coming Home C2E2 brings fans together every spring at the McCormick Place for a weekend filled with costumes, comics, pop culture, art and celebrities. BY STEPHANIE CRETS The high ceilings and long halls of McCormick Place are brightly illuminated by a rare warm, sunny day in March. As I walk through the lobby, I spot Deadpool and Captain America taking a selfie together, while Rey from “Star Wars: The Force Awakens” checks her iPhone, sitting on the edge of the lobby’s fountain. Riding up the several sets of escalators, I pass Dana Scully, Jon Snow, Sailor Moon and countless other characters. As I rise up, the giant red letters greet me, and I know that I’m home: C2E2.
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Chicago’s Comic and Entertainment Expo, better known as C2E2, took over Chicago’s McCormick Place March 1820. I’ve attended the convention for the last five years as a fan, so it was interesting to experience it outside of costume – for the most part. C2E2 laid out the red carpet – literally – for the fans to walk the expansive exhibitor hall, where they visited more than 450 exhibitors and 464 artists in Artist Alley. I picked up a few comics books from Valiant Comics (including the in-
C2E2 creasingly popular Faith comic series), grabbed an Agent Carter Funko POP from the Marvel section and admired the “Game of Thrones” house sigil flags that decorated another booth. I’m also a huge proponent of supporting the artists that showcase at the convention because of the uniqueness of each artists’ style, so I purchased a few prints as well. C2E2 also supplied a plethora of amazing comic and entertainment guests in the autographing and photo-op section. Guests like John Cusack, Gail Simone, Edward James Olmos, Melissa Benoist, Chris Claremont and John Ratzenberger met with fans all weekend, and many participated in panels, where fans were able to ask their most pressing questions. Chloe Bennet, who plays Daisy Johnson on “Marvel’s Agents of S.H.I.E.L.D.,” was another C2E2 guest, so I donned my own Daisy costume for our photo together. Bennet was as equally thrilled about my costume as I was to finally meet her.
“C2E2 laid out the red carpet for the fans to walk the expansive exhibit hall.” In addition, I attended her panel, where she discussed behind-the-scenes antics, the importance of Asian women representation on television and how taxing her stunt work can be. At the end of the panel, she took photos with eager fans clamoring around her – including myself. But most people who come to C2E2 are there for the wide variety of costumed heroes and villains. Saturday night, the convention hosted its Crown Championship of Cosplay competition, where 38 cosplayers from all over the world competed for the title and $10,000 prize. The contestants were judged for their craftsmanship and skills by a panel of
celebrity judges working in film and television: Ann Foley, costume designer for “Marvel’s Agents of S.H.I.E.L.D.;” Stephanie Maslanky, costume designer for “Marvel’s Jessica Jones;” Leri Greer, who worked on “Mad Max: Fury Road;” and Yaya-Han, long-time cosplayer and cosplay contest judge. In the end, Major Sam Cosplay from Australia, dressed as Julieta Necromancer, took home the title as Crown Champion of Cosplay. “This was an amazing event and it was really fantastic to have all of our international winners from this past year compete against one another at C2E2,” said Lance Fensterman, global senior vice president of ReedPOP. “As cosplay continues to become more mainstream and global, this competition really brought out the best of the best and showcased some outstanding costumes to fans at C2E2 and through our livestream,” he adds. C2E2 returns next year to McCormick Place April 21-23. Visit www. c2e2.com for more information. O There’s something for every type of fan at C2E2, from cosplay and comics to gaming and panels.
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COVER STORY
Bringing
Quality Content Home DreamWorks Animation stays ahead of the curve producing unique content on a variety of platforms while it prepares for its next slate of opportunities. BY STEPHANIE CRETS
“S Jim Fielding (above), global head of consumer products/ Erin Morris, head of global retail sales and marketing/ Tim Erickson, global head of licensing www.dreamworks animation.com Glendale, Calif.
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hrek,” “Kung Fu Panda” and “How to Train Your Dragon” all have one thing in common: They’re all beloved family film franchises created by the team at DreamWorks Animation. Now, DreamWorks is ramping up its retail and licensing programs for its next feature release, “Trolls,” along with creating new, unique content through an original TV series, shorts and interactive media via Netflix, YouTube and Awesomeness TV. DreamWorks’ smaller size and 22 years of quality content give it a competitive advantage against some of the larger studios in the animation industry. “The amount of quality content we’ve put out in that time has built the consumer brands very quickly,” Global Head of Consumer Products Jim Fielding says. “We’re not the largest player, but our size allows us to be nimble, flexible and reactive,
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and to build custom programs with our partners in the consumer products space. We’re not replicating a big formula. We try to approach each opportunity in a special and unique way.” Quality content through storytelling is the cornerstone of DreamWorks’ success – especially its feature films. Because of that success, the company is venturing into new media outlets. “DreamWorks is going through a renaissance,” Head of Global Retail Erin Morris says. “Our ability to embrace changes in how content is distributed for the futures of how people will engage with storytelling really sets us apart. We are known for great animated films and beloved characters, but at this moment, we’re embracing new media platforms that are following new consumer consumption behavior and that sets us apart.” Relationships with Netflix and newer ventures
DREAMWORKS ANIMATION
with YouTube and Awesomeness TV are a natural step for the company. And just this year, DreamWorks Animation Television received 23 Emmy nominations – an incredible accomplishment for a TV group that is less than three years old. “We’ve done a very good job of embracing change,” Morris continues. “Coming into Awesomeness TV, it really turned my brain upside-down in terms of millennial demographics and how they’re consuming content via their smartphones – that change is like a tidal wave in the industry right now and we’re at the forefront in embracing the future now. We’re poised to capitalize on that.” “At this point, it’s incredible to be part of storytelling – not just from animated films but from TV content,” Fielding adds. “The type of content we’re creating is unique and forward-looking for the industry.”
Key Partnerships Franchises are the bread and butter of DreamWorks and that naturally extends to a robust licensing program. At its onset, DreamWorks realized it needed several different ways to bolster its content and stories to reach an even broader audience. “Our job in its most simplest form in licensing is to extend the stories that we’re driving in our content,” Global Head of Licensing Tim Erickson says. “One of those ways is through consumer products. These products can be used and worn on a daily basis to reinforce the content and drive those daily engagements.” With so many different franchises and stories to license, DreamWorks has a number of things in the works. “Trolls” is the next franchise film installment with long-term, multi-year licensing possibilities. The film tells the story of Princess Poppy (Anna Kendrick) who must enlist the help of another troll named Branch ( Justin Timberlake) to rescue her friends by embarking on a comedic adventure, complete with original songs. “We’ve seen a lot of excitement and enthusiasm around ‘Trolls,’” Erickson says. “We’re really starting to see proven sequel-level support from our partners on an original movie. No matter what division you’re a part of at DreamWorks, we’ll open the movie in the best fashion and immerse the consumer in what the franchise and story is about. And then naturally extend the story into consumer products.” DreamWorks has a broad roster of global licensing partners ready to tackle “Trolls,” including Hasbro, Random House Children’s Books, Hallmark and Editorial Planeta. The list grows on a daily basis. “What gets us excited is that these partners understand what makes “Trolls” tick, and you can see that in how they’re developing the products because they’re all unique to the film,” Erickson adds.
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Our job in licensing in its most simplest form is to extend the stories that we’re driving in our content.
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In addition to “Trolls,” DreamWorks’ other franchises easily lend themselves to licensing partnerships. The company will continue its partnership with Mattel for “Dinotrux” and Playmates for “Voltron” – both new Netflix series. “Dinotrux” has been wildly successful since its launch last August from both a content and product perspective. “The premise of ‘Dinotrux’ combines two classic play patterns: 500-ton trucks and dinosaurs,” Erickson explains. “Trolls” is the next franchise film installment from DreamWorks that has its retailers and licensing partners excited for long-term opportunities.
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COVER STORY
“That mash-up is pretty magical and naturally bends into consumer products. We have amazing content behind ‘Dinotrux’ that extends really well into products. You can see that it makes an amazing toy and play experience, but you also see that people want to badge themselves with it for what it stands for. We’re actively working on expanding it to multiple categories from fashion to home to food to stationery and social expressions. That’s going to be a mega franchise for us to leverage.” “Trolls,” “Dinotrux” and “Voltron” also have global appeal and scale in terms of licensing. While there are key territories DreamWorks caters to, many of the larger properties can operate in several territories. “We may say, ‘This is appropriate to apply to these top 12 countries around the world,’” Erickson says, “and the goal, for agents and licensing partners, is going out to solicit feedback. We’ll say, ‘Here’s what we have in the pipeline and how do you think this will translate in your territory?’” There are simple formulas for building and growing the DreamWorks brand and its franchises. As long as the company continues to produce quality and relevant content that reaches the consumer, the properties will be reinforced daily. “As we see the consumer transition over the last several years, it’s all about experiences,” Erickson adds. “It’s about how the products and services we focus on actually extend the overarching quality experience for that consumer.” 18
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Retail Push With “Trolls” coming out in November, DreamWorks is planning its retail programs. But the excitement for the new franchise is palpable and contagious throughout the company. “There are moments in the early development process when you get brought in to see early pencil tests and scripting, you have that goose-pimple moment where you’re witnessing something special,” Morris describes. “When I was exposed to ‘Trolls,’ I realized we had a once-in-a-lifetime opportunity; a great story and amazing characters that lend themselves naturally to merchandising. “I wouldn’t call it luck; this is an amazing world that kids and families are going to want to take a piece of home. I’m really proud we’re going to be able to expand the story beyond the dream.”
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DREAMWORKS ANIMATION
The type of content we’re creating is unique and forwardlooking for the industry.
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But DreamWorks is taking the retail push for “Trolls” one step at a time. The company approaches retail through partnerships and proactively plans how to integrate retail into the franchise. Usually, with a new, highly anticipated film, DreamWorks would plan an “event film promotion,” Morris says, which generally consists of about six to eight weeks of promotional space at various retailers and then returning to retail for the home entertainment release. “But having an incredible new franchise in ‘Trolls’ is giving the retail community confidence that we have a long-term opportunity with them. It is effecting how we plan and build long-term relationships at retail,” she notes. DreamWorks will create a “Trolls” experience for each retail account that fits that account’s personality. With event-level film promotions, retailers sometimes feel as though they and their competition’s promotions are too similar. So, the company is working hard to make sure every retailer has a unique point-of-view through exclusive products and unique marketing to erase those concerns. The rapid development of its television franchises has garnered successful retail opportunities as well. Morris says DreamWorks was one of the first – if not the first – Netflix series to manifest itself into a merchandising series. “Dinotrux,” which has three years of content already committed to Netflix, is expanding to key retail accounts like Target and Walmart. “Voltron’s” retail program is ramping up for merchandise launch in spring 2017, along with programs for DreamWorks’ upcoming theatrical releases “The Boss Baby” and “Captain Underpants.” When selecting the right partners, DreamWorks puts together an overarching consumer strategy to determine the right fit for the right franchise. This includes looking at factors such as global versus territorial opportunities, product development skillset and how important the franchise will be in a partner’s overall portfolio. “Volume alone is not a determining factor for a key account,” Morris explains. “We want to embrace the companies that embrace us back. We want to work with retailers that believe in our brand and really want to partner with us. Our criteria might be May/June 2016
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COVER STORY different: Size doesn’t always matter. True passion for our brand is key.”
Evolving Market As DreamWorks evolves with new media partnerships and embraces all forms of content consumption through theatrical, home, television, tablets and mobile, it continues to move in an upward growth trajectory. “I think our growth is going to come in multiple consumer segments and demographic segments,” Fielding says. But it will still have to contend with the fact that there is more content being created today than ever before with all the new media available. “We’re having to really figure out where the consumer is today and where they’re going,” Erickson adds. “It’s going to determine our content and how we’re going to create products and experiences. Sometimes that manifests itself in toys and a valuable play experience, while other times it’s fashion and how consumers want to badge themselves today versus yesterday. It’s a constant evolution.” The company’s key to staying ahead of the competition in the content landscape is never dialing down the momentum. By continuing to actively listen to its partners in retail and licensing and being a solutions provider for them, DreamWorks believes it can overcome those larger market competitors. “We may not be your biggest, but we want to be your best,” Morris says. “There are a lot of great licensing organizations and studios out there. But we’re nimble and flexible in how we work with our retailers. With content available where the consumer is today affords us a big advantage.”
Strong Team All the departments at DreamWorks foster a creative, hard-working and innovative environment. A lot of planning goes into every aspect of the business for every piece of content produced – from targeting the right consumers in the appropriate media to how consumers will experience and interact with the different franchises and characters in their everyday life. “We’re really proud of how 20
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We want to work with retailers that believe in our brand and really want to partner with us.
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quickly we’ve been able to create and go to market from a consumer products perspective,” Erickson says. “There’s a lot of planning that goes into building a consumer products divisions before it ever hits a shelf. We’ve been able to do that in a short amount of time and we’re also staying true to the content and franchise – that the product and experiences we’re creating naturally extend the story.” “Most of the people on the Retail Team at DreamWorks have decades of experience, and I’m proud to have one of the most talented retail teams in the business,” Morris adds. “They do all the heavy lifting, and I’m honored to have a team to execute all of this. Also, to work for one of the most innovative, future-thinking creative companies in the world, I could not be happier to be part of the DreamWorks team.” Diverse backgrounds and vast experience in a variety of markets and studios give every department at DreamWorks a leg up in the industry. And Fielding finds his teams to be motivating with everyone striving to do better than the day before. “We’ve really come together and found our common goals and we’re building a culture of empowerment and success where people want to build their careers,” he says. “I worked hard to foster an environment of collaboration and communication among the different functions. “And most importantly, our partners want to work with us and think of us as a partner of choice. We take that seriously because we realize in this competitive environment, everyone has a choice on who to work with and what properties to carry. We are very humbled and grateful when people choose to work with us and then we owe them our very best.” O
CRAYOLA 22 | CHUPA CHUPS/PERFETTI VAN MELLE 28 | LISA FRANK 31 | SONY/GHOSTBUSTERS 34
Licensing
“Crayola has had a deep relationship with moms for five generations.” – Eric Karp
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Licensing
CRAYOLA/AMLOID
Colorful Collaboration Crayola partners with leading toy manufacturer Amloid Corp. on the innovative Crayola Building Blocks product line. BY CHRIS PETERSEN Eric Karp, licensing general manager, Crayola www.crayola.com Easton, Pa. Joseph Albarelli, chief marketing officer, Amloid www.amloid.com Cedar Knolls, N.J.
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rayola has been helping children around the world unleash their creative spirit since 1903 with its portfolio of art tools, crafting activities and innovative toys, and Amloid Corp. has been dedicated to manufacturing high-quality toys since 1916. With both companies’ deep history and experience in delighting kids with toy and crafts, a partnership was a natural fit. As Amloid marks its 100th anniversary this year, its collaboration with Crayola on the Crayola Building Blocks line of products is a
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testament to the strengths of both companies individually and combined. The opportunity for a joint collaboration began in 2014 at New York’s International Toy Fair. With the construction category being one of the fastest-growing segments within the industry, Crayola was looking for a manufacturing partner that could deliver quality and innovative products in this area. “Right from the start, the chemistry between Crayola and Amloid was great and partnering together on the line of building blocks was an immediate fit,” said Joseph Albarelli, chief marketing officer at Amloid. The Crayola Building Blocks line was launched in late 2015 giving the brand a presence in the construction toy seg-
Crayola/Amloid ment during the critical holiday selling season. The blocks leverage Crayola’s distinct colors and come with crayons and decals allowing children to color and further customize their creations. With SKUs ranging from $4.99 to $49.99 and driven by an innovative packaging design that resembled giant Crayola crayons, the brand had great visibility in aisle and delivered strong results that exceeded expectations. “Crayola has had a deep relationship with moms for five generations,” says Eric Karp, GM North America Licensing, Crayola. “They trust the brand for its safety, value and most of all for providing their children with quality creative tools that help them express themselves.”
Combined Strength The success of the Crayola Building Blocks line bodes well for future collaborations between Crayola and Amloid, and
Crayola Building Blocks have found success because they continue the brand’s focus on safety, value and quality creative tools.
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Crayola/Amloid both companies are excited about the possibilities. Both brands are focused on expanding the Crayola Building Blocks line through innovation and exploring new categories to enter. “We have a lot of synergy in that we have two brands built on the same foundation of being focused on consumer innovation and unwavering on quality,” says Albarelli. “There’s also a high level of communication and our strong working relationship makes this partnership a lot of fun.”
Bright Future The partnership is more integrated than the traditional licensee/licensor relationship including joint retail sales presentations, innovation plans, promotions and R&D. Crayola recently assisted Amloid in setting up a global distribution network for the line through Crayola’s international brokers and distributors. Amloid’s vertical integration provides an infrastructure that is nimble enough to implement Crayola’s ideas quickly and get new products onto shelves fast. “The combined strengths of Crayola and Amloid are only beginning to be explored,” Karp says. “Both companies have
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been in business for more than 100 years and are considered best in their trade. “Make no mistake, the relationship between Amloid and Crayola will expand.” With the product line continuing to make waves on retail shelves, it’s not surprising both companies see a future for their partnership every bit as bright and colorful as Crayola’s famous crayons. O
Licensing
The relationship between JLG and Pepsi has remained strong because of the agency’s expertise in licensing world-class brands.
THE JOESTER LORIA GROUP – PEPSICO
Perfect Timing
JLG elevates the Pepsi Emoji experience with a new collection of Pepsi Emoji licensed products launching this summer. BY CHRIS PETERSEN
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rom world music tours to backyard barbecues – it’s safe to say that where there’s a good time this summer, Pepsi will be there. And as social media makes it possible for the concertgoers and the cookout kings to stay in touch with each other, Pepsi will be there, too. This summer, Pepsi is rolling out its innovative PepsiMoji campaign that encourages consumers to “Say It With Pepsi” as they share their summer fun across various social media platforms. The U.S. campaign features more than 200 custom-designed emojis that will appear on Pepsi bottles and marketing materials, encouraging consumers to collect and share them over social media. These unique and fun
designs also will appear on a collection of licensed products over the course of the summer, and helping Pepsi build that side of the campaign has been The Joester Loria Group ( JLG), one of the world’s leading licensing agencies. Co-founder, Executive Vice President and COO Joanne Loria says the relationship between JLG and Pepsi has been a strong one, bolstered by the agency’s extensive expertise in licensing world-class brands. “We have had a longstanding partnership with Pepsi as their exclusive licensing agency of record for the U.S. and Canada,” she says. “The role of licensing, especially with CPG brands such as Pepsi, has shifted in recent years as licensing has become May/June 2016
Joanne Loria, co-founder, executive vice president and COO www.joesterloriagroup.com New York City
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The Joester Loria Group – PepsiCo
an increasingly important marketing tool for brands. A successful licensing program can generate incremental revenue that funds future marketing initiatives, but also through high-profile collaborations with prestigious brands it can generate buzz and awareness amongst key influencers.” Since 1999, JLG has developed winning licensing strategies for some of the largest brands in the world. In addition to the Pepsi portfolio of brands, JLG has successfully executed successful brand extension programs for Kellogg’s, Corona, Modelo, Entenmann’s, Jeep and Animal Planet, as well as evergreen properties including The World of Eric Carle and Care Bears to emerging personalities in the growing blogosphere such as Aimee Song “Song of Style.” For the PepsiMoji campaign, JLG once again delivers a strategic licensing program that dovetails with core brand objectives, creating excitement with consumers through retail experiences and fun consumer products.
Unique Approach Pepsi has been more than one of the world’s most popular soft drink brands – it is a global pop culture icon, and a big
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A successful licensing program can generate incremental revenue that funds future marketing initiatives.
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part of that has been the brand’s ability to stay at the forefront of emerging cultural trends. “The PepsiMoji campaign will resonate strongly with Millennials and Generation Z as well, thanks to social media and the way it gives consumers more fun ways to express themselves,” Loria says. The emojis feature a wide variety of designs but are unified by the iconic globe shape and a blue, red and white color scheme that is the well-known essence of the Pepsi brand. “One of the most impactful ways of developing brand extensions for global brands like Pepsi is to look for opportunities where you can tie into a particular marketing platform that can also translate to licensed products,” Loria says. “With emojis, that’s exactly what happened.” With a few hundred proprietary and unique PepsiMoji designs to choose from, consumers can find one to suit their mood or interests in virtually any situation, which lends itself well to licensed products “It’s a really cool custom approach for Pepsi,” Loria says.
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The Joester Loria Group – PepsiCo
We have had a longstanding partnership with Pepsi as their exclusive licensing agency of record. The Next Level
The company believes the PepsiMoji campaign will resonate with younger generations because it gives consumers fun ways to express themselves.
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To help drive that approach to the next level, JLG has partnered Pepsi with some exceptional companies for exclusive collaborations. These collaborations launched at New York City’s innovative retail gallery STORY in late spring, with a curated collection of merchandise featuring PepsiMoji characters reimagined as graphic patterns appearing on items such as fashion accessories, tumblers and tabletop essentials. Among the key licensing partnerships JLG has secured for the PepsiMoji campaign are Casetify, who is producing customizable phone cases that can turn consumers’ Instagram, Facebook and personal photos into durable cases that also incorporate the Pepsi Emojis; Legendary New York City bakery Eleni’s Cookies for an exclusive collection of homemade PepsiMoji cookies, and AVE DEE who has created a line of fashionable fanny packs bearing the Pepsi Emoji graphics. That won’t be the full extent of the “Say It With Pepsi” licensing campaign, however. Loria says “JLG will be working with existing Pepsi licensees such as C-Life, Body Rags and Odd Sox for apparel and accessory collections that will be available in stores and online later this summer. An exclusive collection of lifestyle products featuring Pepsi Emojis will be made available on Pepsi’s own ecommerce site Shop.Pepsi. com, as well.” O
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Licensing
PERFETTI VAN MELLE
Creating Enjoyment The company behind the iconic Chupa Chups®, Airheads®, Mentos® and other brands continues to find new ways to extend its properties through licensing. BY JIM HARRIS
T Christine Cool, licensing area manager Christine.Cool@ es.pvmgrp.com Barcelona
Marta Ballesteros, licensing area manager Marta.Ballesteros@ es.pvmgrp.com www.perfettivanmelle.com www.pvmlicensing.com
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he Chupa Chups® lollipop brand has brought happiness and enjoyment to millions of customers around the world for nearly 60 years. The brand’s diverse profile of more than 100 flavors and colorful marketing – much of which is focused on its distinctive flower logo designed by Salvador Dali – have helped make it a leading candy brand. Perfetti Van Melle, the worldwide confectionary company that has owned the brand since 2006, believes in spreading the joy of Chupa Chups® through more than just the lollipops themselves. “We try to have everything we do speak about the brand, and tell stories around the brand in different ways,” says Christine Cool, licensing area manager for the Barcelona-based company. “Our products truly give a sense of enjoyment to people.” Product licensing is one way the brand tells its story. Chupa Chups® licensing originated in the late 1990s in Spain, when the brand was approached by Spanish and European stationery, apparel and eyeglass makers interested in extending the brand. This interest led it to establish a formal licensing division in 2000. “Our company founder was a visionary who understood the value of licensing activity,” Licensing Area Manager Marta Ballesteros says. “The goal of our licensing division since the beginning was to extend the brand across a variety of sectors to create additional visibility and revenue.” The Chupa Chups® lollipop was invented in 1958 and first trademarked in 1962. The brand has a presence in more than 150 countries and is the global market leader in Europe, Russia and Japan in the lollipop segment.
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Perfetti Van Melle has created more than 1,000 different graphics and images since it started licensing its brands.
Perfetti Van Melle
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We see licensing as the perfect communication tool to refresh our brands and keep them trending. Making a Connection
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Chupa Chups® today has dozens of active licenses. Lifestyle products bearing the brand include apparel, fashion accessories, personal care items, stationery and gift items. The brand has thousands of licensed product references available in hotspot retailers worldwide, including high-fashion retailers such as Zara and H&M. Perfetti Van Melle expanded its licensing efforts beyond Chupa Chups® in 2010, when it started licensing its Airheads® candy brand in the United States. Last year, the company expanded licensing activities to include its two most popular mint brands: Mentos®, which it licenses in Europe and the USA; and Frisk, the leading mint brand in Japan. All three brands have inspired lifestyle and gift lines available in their respective home markets. “We see licensing as the perfect communication tool to refresh our brands and keep them constantly trending while also increasing their visibility,” Ballesteros says. “From a marketing perspective, licensing creates new touch points with our consumers and creates greater loyalty for the brand.” Most licensing deals tend to have a three-year lifespan, though several of the brand’s apparel partners have been on board for more than five years. The brand’s longest-lived licensee, Coty, has produced Chupa Chups®-themed fragrances available in Europe for more than 10 years. One of the company’s biggest strengths in licensing is its expertise in graphic design. “Our brand has a very clear identity, starting with the logo,” Cool says. “We have created more than 1,000 different graphics and images around the brand since we first started licensing. Our partners have told us that our wealth of new designs and ability to align with the latest fashion trends is what they appreciate most about our brand.” Perfetti Van Melle’s brands also have unique aroma profiles, making them a natural for fragrances as well as air fresheners. “Our brands have a very clear identity and make an emotional link with customers,” she adds. May/June 2016
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Perfetti Van Melle
Keeping Cool The initial Airheads® licensing effort gave Perfetti Van Melle its first experience in the food and beverage category, which today is a major focus area for the group’s licensing division. A licensed Airheads® ice cream, marketed by Unilever from 2010 to 2014, was so successful in the United States the company expanded the concept. Today, ice cream manufacturer Koldwave produces more than 10 SKUs of Airheads-branded ice cream available across the United States. A line of Airheads® freeze bars produced by JelSert will hit the U.S. market in 2017. Perfetti Van Melle recently signed an agreement with Unilever to produce ice cream for the European market. A range of individually wrapped Chupa Chups® Calippo Shots ice creams with flavors including cola with lemon and sour cherry with banana will launch this summer. The company plans to extend its efforts beyond ice cream and into other food and beverage products including baked goods, beverages and desserts, Ballesteros notes.
Staying Innovative Although much of Perfetti Van Melle’s licensing efforts in the United States have centered on the Airheads® brand, it recently took a major step to introduce Chupa Chups® and Mentos® for licensing opportunities stateside. 30
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The company last year reached a deal with IT’Sugar, a specialty candy store with more than 90 retail locations in US hotspots, for a “shop-in-shop” concept. IT’SUGAR locations feature a “Chupa Chups® Corner” with candy as well as other licensed products including apparel, pillows and accessories. The concept proved so successful that in June IT’SUGAR will launch an in-store concept for Airheads® in recognition of the brand’s 30th anniversary. “This is a concept that is really based around the enjoyment of candy,” Cool says. Perfetti Van Melle continues to seek new ways to present Chupa Chups® and its other brands to customers. One of the company’s more unique licensing initiatives includes a limited-edition Mentos® car, manufactured by a leading French carmaker. “We keep innovating all the time with all of our brands and believe in staying on top of development and making high-quality confectionery products,” Cool says. “Our company philosophy is based on continuous innovation, having high quality standards for our products and tapping into consumers’ desires.” O
Licensing
Lisa Frank has deep market penetration with its products exceeding $1 billion in sales since the company was founded.
LISA FRANK INC.
Unicorns and Rainbows Lisa Frank’s iconic unicorns, puppies, kittens and tigers are enchanting a new generation of tweens and twentysomethings in a renewed upsurge of licensing interest. BY RUSS GAGER
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volving a brand with the times is a tricky business, especially when you are Lisa Frank, whose eponymous company has been synonymous since the 1980s with rainbow-hued stickers, stationery and school supplies featuring rainbows and adorable unicorns, puppies, pandas, kittens and tigers. Frank’s intense colors – which are printed using a proprietary mix of four inks – appeal to youngsters at that impressionable age when the world still seems filled with possibilities for inspiration, happiness and joy. Examples of Lisa Frank’s brightly colorful artwork can be found on the company’s Facebook page. Here the works of art are paired with humorous and motivational sayings. For example, in one piece of
artwork, waterfowl waddle against a background of snowflakes above the inscription, “Why Walk When You Can Dance?” Bunny gardeners harvest chicks and tulips, yellow puppies salivate over dog bone sundaes and unicorns jump over the moon. Adults of a certain age – usually in their 20s and 30s now – recall the ubiquity of Frank’s many licensed products in grammar school. One thirty-something recalls that everybody in his grammar school – and not just the girls – seemed to have a Lisa Frank folder. Cumulative retail sales of Lisa Frank products have exceeded $1 billion since the company was founded. With that deep market penetration, Lisa Frank’s brand is a valuable property. May/June 2016
Lisa Frank, president and CEO www.lisafrank.com Tucson, Ariz.
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Lisa Frank Inc. “All we do is licensed products at this point – we no longer manufacture,” President and CEO Lisa Frank says. “We have all kinds of products, activity sets, cosmetics, shoes, bedding, clothing, electronics, a lot of different publishing properties, puzzles and coloring books – pretty much the gamut of products.” Lisa Frank Inc.’s licensed products are sold in mass-market retailers, department stores and retail clubs. The use of electronics in education has changed some of Lisa Frank’s products. “The school supplies market is not of the same magnitude as it was 30 years ago, but it’s still a very viable market,” Frank declares. “Activities today are bigger than they were 20 or 30 years ago and there are plenty of other product categories that are making up for the categories that aren’t as strong.” Lisa Frank doesn’t worry about following the latest trends. “We don’t follow the trends – we set the trends,” she emphasizes. “That’s what we’re known for.” But that does not mean that her characters have not evolved with the times. “A lot of the characters are 20 to 30 years old, and they definitely have evolved,” Frank concedes. “We’re always designing new characters, but the color palette and the look of Lisa Frank hasn’t really changed. We’ve gotten a little more intricate, and I like it better today.”
Frank is wary of changing characters so much that they lose their appeal to their audience. “Our fans love Lisa Frank the way it is,” Frank insists. “You have to be careful if you have a fan base that’s in love with your look not to change it too much. I think we’re just improving on it.”
Licensed Products Lisa Frank Inc. has new strategic licensing partnerships with art.com and card.com. For card.com, Lisa Frank Inc. is licensing the brand for use on prepaid debit cards. For art.com, the company is licensing much of its artwork. “It’s basically art for your dorm and home on all different kinds of substrates,” Frank says. “We really think that’s going to be just awesome.” United Talent Agency (UTA) is helping with the licensing of the Lisa Frank brand. There are nearly a dozen licensees selling at various retailers: Added Extras/GBG Beauty, Art.com, Bendon Publishing, Card.com, Cardinal Games, Celtek, DGL, ES Originals, Franco Manufacturing, Home Expressions, Innovative Designs and Kappa Publishing. Many of Frank’s creations were conceived before the Internet was ubiquitous, and adapting her oeuvre to electronics has been an exciting challenge. Today, it’s all about apps, and Lisa Frank has hers. Lisa Frank also has an active social media network with big fan engagement and celebrity followers. She reports nearly 800,000 engaged fans on Facebook and a fast-growing Instagram account. For the future, UTA is working with Lisa Frank on a number of initiatives including: • Social media enhancement; • Entertainment opportunities in digital, film and television; • Ecommerce and direct-to-consumer print on-demand stores;
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• Commercial endorsements; • Brand collaborations; and • New product category licensing.
Looking for Licensees
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Lisa Frank Inc. is looking to expand its licensing activities. “We don’t have a master toy license yet,” Frank points out. “We feel like we also need active wear and more fashion apparel.” Potential licensees should be high-quality manufacturers with strong retail relationships. “They also should be fashion-forward with a talented and experienced art department,” recommends Frank, who is a hands-on licensor. “Every single thing that goes to market has my handprint on it – everything. Everything we do is inspirational. We are a creative outlet, so obviously we would like to cultivate creativity with everything that we do. We’re artists first.” Lisa Frank Inc.’s licensed products are sold primarily in North America with some in Mexico and South America. “We had stores in Japan in the 1990s,” Frank says. “We are still very popular there. However, more international licensing would definitely be a goal.” Frank attributes the company’s success to the fun, creativity and inspirational nature of its products and its employees’ hard work. “I think our fans have been the ones who have kept us
Every single thing that goes to market has my handprint on it – everything. Everything we do is inspirational.
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successful,” Frank says. “They’re so passionate! A lot of celebrities love Lisa Frank – Paris Hilton, Kacey Musgraves, Anna Kendrick, Miranda Lambert. Mila Kunis and Hilary Duff also modeled for us when they were ‘tweens!” Lisa Frank Inc.’s company culture is one of creativity. “We’re really dedicated and have a real attention to detail,” Frank emphasizes. “We’re very fussy, but the art is the best of the best. We’re creative in an environment where everyone is encouraged to be creative and share ideas. I am very open to ideas. We’re kind of like a family.” O May/June 2016
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Licensing
SONY PICTURES CONSUMER PRODUCTS
Proton Power
Sony Pictures Consumer Products is pulling out all the stops as it works with licensees, retailers and filmmakers on Ghostbusters and other initiatives. BY ERIC SLACK with the right licensing partners, create artwork and engage with retailers to show we have a meaningful opportunity.”
Hot Property
Licensing programs around the classic and current Ghostbusters movies are in full swing.
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Mark Caplan www.sonypictures.com Culver City, Calif.
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s it licenses programs around Sony Pictures Entertainment’s TV and theatrical properties, Sony Pictures Consumer Products (SPCP) has a lot of responsibility – and a lot to work with. Designing influential campaigns and product lines that make an impact with consumers, SPCP works closely with its colleagues and partners to ensure that marketing and product initiatives related to Sony Pictures’ film and TV properties connect with their target audiences. “Early on in our projects, we meet with filmmakers and creative people on our properties to learn as much as we can,” says Mark Caplan, senior vice president, Sony Pictures Consumer Products. “We read scripts and look at visuals and figure out where a property sits within a target market. We develop strategy documents to underline our direction and then go back to present our plan, where we set off on a path to develop a program. We talk
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One opportunity that is currently at the forefront for SPCP is Ghostbusters. The media franchise that is Ghostbusters includes the 1984 original film and a 1989 sequel, along with several animated TV shows and video games. With the impending release of the all-new Ghostbusters this coming July, licensing programs around the classic and current elements of the franchise are in full swing. “Our licensing program for the movie is extremely robust. The movie is supported by more than 100 licensees with more than 1,000 SKUs for the classic and new film programs,” Caplan says. “This includes gaming, toys, digital, fashion, publishing, collectibles and more. We have major partnerships with bestof-breed partners in those categories. We’ve truly assembled a great lineup supporting our efforts.” Part of the strength of the brand can be traced to the highly recognizable Ghostbusters logo. It is a common element present in both the classic and modern parts of the franchise. “People recognize its identity and meaning,” Caplan says. “It is aspirational and gives fans the impression that everyone can be a Ghostbuster. The Ectomobile is another recognizable element, as it is inherently seen as a hero vehicle that people associate with Ghostbusters.” As SPCP has worked on its licensing programs around the property, it has sent a clear message to the licensing community and to retailers that it is developing Ghostbusters into a long-term program. The company is aiming to develop new content because it believes that consumers want to see more of the property. As one of Sony’s franchise properties, plans are for the new movie to springboard to more content – and products – in the future. “Toys have just been released, and more categories will be rolling out as we get closer to the movie,” Ca-
plan says. “Retailers are dedicating shelf space to the products, and we’ve seen people wearing product. There has been a lot of positive response coming out of social media for the Ghostbusters merchandise.”
Building the Buzz SPCP understands that its partnerships are critical to the success of its licensing programs. It is working with companies such as Mattel, Underground Toys, Funko, Activision, Hybrid Apparel and many others. It has also teamed up with the iconic rapper Nas on the limited edition Nas x Ghostbusters line. Six brands are part of the initiative: Nas’ Hstry brand for streetwear, New Era Cap for headgear, Fila for footwear, Italia Independent for eyewear, Monster for headphones and Tokyobike for bikes. “This gives us an inroad to the 18- to 36-year-old audience and has elevated the brand beyond the mass market,” Caplan says. “This program is very fun and fashion-forward. Altogether, we have product for the whole family at every price point, which we are very proud of.” In addition to working closely with licensing partners, SPCP has been focused on working with retailers to define its products and provide information on the strengths of its licensees and how product lines will resonate with customers. The company has been meeting with retailers for more than a year, and the excitement at the retail level is a testament to the strength of the Ghostbusters property. “We work closely with licensees and their sales and design teams to define quality products that appeal to buyers,” Caplan says. “We talk about what kind of art appeals to a retailer, and we come up with different SKUs for different retailers to accommodate their target consumers.” Ghostbusters certainly has a lot of potential. At the same time, SPCP is proving how it can support other key studio franchises, such as the successful Hotel Transylvania, the fully computer-animated Smurfs and the untitled Emoji movie, all coming from Sony Pictures Animation. With a new executive team and a powerful animation slate, Sony Pictures Animation is committed to delivering a steady stream of content to build brands that can live in the entertainment and retail universe. “We look at all of our properties closely and come up with the right program for each,” Caplan says. “As a merchandising group, Sony Pictures Animations provides our group with a solid canvas to start developing properties that have robust appeal with families. Ghostbusters, Hotel Transylvania, the untitled Emoji movie and the new Smurfs are all important franchises with opportunities to offer fun product. We will continue to venture out into the marketplace, and build programs that are differentiated, relevant and exciting for today’s consumers.” O May/June 2016
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W DIAMOND GROUP 38 | JC LICHT LLC 40 | T-MOBILE USA INC. 43 | EASY REST ADJUSTABLE SLEEP SYSTEMS 47 | BOARDMAN MEDICAL SUPPLY 50
Retail
“We want to catch people who want to wear tailored clothing and support the quality of ‘made in America.’” – Doug Williams
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Retail
Every W Diamond Group garment is made in the United States by the company’s employees, who produce 25,000 suits and sport coats each year.
W DIAMOND GROUP CORPORATION
Suit Up
W Diamond Group brings enthusiasm to the world of men’s fashion and gives back to its community through employment initiatives. BY STEPHANIE CRETS
S Doug Williams, owner and CEO www.wdiamondgroup.com Chicago
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uits are a staple of men’s fashion and continuously evolve with the times and trends. Sometimes they’re long or short, lapels are wider or thinner and sometimes there are two buttons instead of three. “The real evolution and expectation today from the consumer, comes down to comfort and performance,” owner and CEO of W Diamond Group Corporation Doug Williams says. “Whether it’s offering fabrics that have stretch materials to create comfort or adding a hidden pocket to hold a smartphone, we’re doing that. We adapt the inner workings of a suit to how the consumer lives his life today.” When it comes to W Diamond Group’s customer,
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it’s a broad range from the college kid needing his first interview suit to the professional banker and older. The company sells three distinct garment fits: the Chicago model for the more mature customer, the New York model that’s relevant to all customers and the Los Angeles model, which has trimmer fit, shorter body and tailored to a younger, fashion-forward customer. W Diamond Group’s suits can be found in a variety of specialty retailers such as Nordstrom, Dillard’s and Bloomingdales. Every garment is made in the United States by the company’s more than 800 employees, who produce 25,000 suits and sport coats a year from the finest fabrics. “We want to catch people who want to wear tailored clothing and support the quality of ‘made in America,’ while our merchandising team brings to life fabrics from around the world,” Williams adds. “Customers live in our communities, support our communities and it’s wonderful how passionate our consumer is about supporting ‘made in America.’” The success of W Diamond’s suits emanates from the product itself, as well as the company’s people and partners and the passion they put into their work, Williams says. “The consumer can really see the passion our team puts into every garment and the way our retail partners service our customers and elevate the experience,” he continues.
Hiring Initiatives Two years ago, Williams realized he wanted W Diamond Group to do more than make amazing suits; he wanted his company to use its resources to make a difference, no matter how small. So, the company implemented a hiring program that focuses on hiring autistic adults. This program is important to Williams because his son has autism, and he understands the significant impact that can have on a family, especially because 85 percent of autistic adults never enter the working world. “We can improve the lives of these individuals and their families by becoming an advocate and an employer for this community and inspiring other companies to do the same,” he says. W Diamond Group partnered with Exercise Connection to create a working environment that caters to adults with autism. The company has come up with several solutions to common issues for autistic individuals, including communication, social, sensor processing and behavior, so they can be successful in the workplace. “What our team learned, and I’ve always known as a parent of an autistic son is that individuals with
autism are just like everyone else,” Williams says. “They want to have relationships, live independent lives, set goals and be accepted for who they are. They may need more encouragement and support. So, we’ve created this environment, and it’s amazing to watch their faces when they get a paycheck, knowing that they’ve done a great job. They’re contributing to themselves and their family and now have that personal expression and integration within an organization.” When it recruits new people, it tries to find employees whose biggest talent is their enthusiasm for the product, retail partners, fellow employees and the overall brand. “Finding those people who want to be in the tailored clothing business and also have that entrepreneurial spirit and enthusiasm is difficult,” Williams says. “When you find them, they’re diamonds in the rough.”
Forward Focused W Diamond Group is looking for more ways for people to suit up fashionably and comfortably. It will expand its madeto-measure program, which allows consumers to customize a garment to their specifications, including size, trim level and special fabrics. The company is scouring the fabric mills and trim vendors around the world to offer a wider selection of fabrics so more consumers can express their personality through their suits. Additionally, W Diamond Group monitors its relevance in the marketplace to stay at the forefront of what consumers want, while also helping them appreciate new styles as fashion evolves. To assist with this, the company recently brought on fashion designer David Hart as creative director. “He pushes that forward-thinking style within our company,” Williams notes. But this initiative wouldn’t work without the passionate people involved in the brand, Williams says. “It’s not just people inside the company; it’s our retail partners and our vendors,” he continues. “Life’s too short to forget that what really builds every business is the people. Whether it’s someone working on the sewing line for 40 years or a new 22-yearold salesperson who’s joined us or works at the retail store – to see the excitement on their face is the biggest joy that I feel. “You can have a lot of success in your life many ways, but the biggest Rosenthal & Rosenthal success I feel is our ability to give Rosenthal is a leading commercial finance back to the comcompany specializing in factoring and asset munity and all based lending. As a privately held, famiof our teams and ly-owned company since 1938, Rosenthal is committed to providing personalized service help them fulfill and flexible lending solutions to clients whatever goals across a range of industries. For more inforand passions they mation, please visit www.rosenthalinc.com. have.” O May/June 2016
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Retail
JC Licht has more than 30 locations throughout the Chicago area.
JC LICHT LLC
Colors of Success
JC Licht has helped Chicagoans revitalize their homes for more than a century by offering best-in-class products and best-in-class customer service. JC Licht LLC www.jclicht.com Addison, Ill.
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or more than 100 years, one name has been synonymous with high-quality paint in the Chicago area, and that name is JC Licht. JC Licht LLC has been a consistent presence in the Chicago market since 1907, and the company recently affirmed its commitment to its customers with new ownership taking control and investing in a new distribution center and headquarters with its sights set on further expansion in the near future. Throughout the years, the key to the company’s success has remained the same, according to the company. JC Licht’s comprehensive knowledge of paint and other home-improvement products combined with the strong relationships it builds with customers have been the key to success for the last century. “We’ve been giving expert advice and assistance to those looking to breathe new life into their Chicagoland homes since 1907,” the company says. “Our
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customers are also our neighbors and friends, and they trust us to share our expertise and provide them with superior products and outstanding service. JC Licht service professionals are trained in our extensive line of products and are skilled home-project experts who can help [them] every step of the way.” With more than 30 locations throughout Chicago and its suburbs, LC Licht has been a trusted name in the area for generations. And, as the company prepares for a long future ahead of it, the values and strengths that have earned the company the trust of its customers figure to be an essential component of its plans for the long-term.
History of Service The company’s roots can be traced back to the opening of its very first store, founded by Jacob Christian Licht in Chicago in 1907. Over time, the company
built up a strong following of customers by offering them “top-quality painting products and superb service,” the company says. A major component of JC Licht’s success over the years has been its partnership with Benjamin Moore, one of the nation’s leading paint brands. JC Licht sells more Benjamin Moore paint than any other paint store chain in the Midwest, and the company says the high quality of the Benjamin Moore product line has been crucial in keeping its customers satisfied for many years. In 2000, Benjamin Moore & Co. purchased JC Licht as a company-owned chain for its products. Although the company is no longer owned by Benjamin Moore, it says the relationship between the two remains strong and also remains important for the company’s continued success. “The vision at JC Licht was to Tower Sealants have the best paint Tower Sealants wants to congratulate Elliot and decorating Greenberg and the JC Licht organization stores in the comfor being featured in Retail Merchandiser munities in which magazine. Tower is a prime manufacturer of professional grade caulks and sealants. We we are located, utilize the latest technology and innovation offering best-inwhich is key. Products are designed to class products exceed the demanding needs of every and best-in-class project. Tower has been supplying a full customer service,” line since 2005. We’re proud to be a valued partner with JC Licht. Contact us and find the company says. what Tower can do for you: 1-866-897-7568 “The company or www.towersealants.com. achieved this viMay/June 2016
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JC Licht LLC sion by consistently providing customers with a shopping experience that surpassed their expectations. That meant offering premium Benjamin Moore branded products that met every customer need at fair prices, and having clean, well-organized stores in convenient locations.” In 2009, JC Licht grew even more with the acquisition of Epco Paint & Decorating, a local chain that was founded in Evanston, Ill., in 1936. The acquisition brought 17 new locations under the JC Licht umbrella.
New Leadership Last year, the company underwent another major development. Benjamin Moore & Co. sold JC Licht to Elliot Greenberg, a long-time veteran of the paint business. Starting his career by working in his family’s paint business for 17 years, Greenberg also helped East Coast building supply company Ring’s End develop its paint business before becoming vice president of operations there. The company says Greenberg’s commitment to the paint industry and extensive experience in the business will only serve the strengthen JC Licht’s resolve to provide its customers with the best possible service. “[Greenberg’s] passion is to give unparalleled service to JC Licht customers,” the company says. “The company’s
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mission is to offer the finest paint and paint-related products, along with advice at the highest levels, to create an unmatched shopping experience within the industry. The daily focus is to fulfill each order with utmost speed and efficiency while engaging customers about how best to meet their needs, to solve their paint and decorating-related problems, and to make every job a success. His vision for the future includes strengthening the can-do, service-oriented company culture, reinvesting in the business and its employees, and expanding products and locations.” This February, JC Licht completed work on a new, 38,000-square-foot headquarters and distribution facility in Addison, Ill., which the company says will bring about 45 new jobs to the community by the end of the year. With the leadership of Greenberg and the company’s commitment to adding on to its capabilities, the future looks secure for JC Licht. “Benjamin Moore is delighted that JC Licht is in the capable hands of Elliot Greenberg who has great depth in the retail paint business,” Benjamin Moore executive vice president of sales Dan Calkins said in a statement. “JC Licht has a great team of dedicated professionals and Elliot’s energy will bring them to the next level. We’re very pleased that Benjamin Moore paints will continue as JC Licht’s flagship brand.” O
Retail
T-MOBILE USA INC.
Mobile Movement T-Mobile eliminates industry pain points and gets closer to customers while changing the way the industry operates. BY ALAN DORICH
T-Mobile launched a new store format that gives customers a richer experience.
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t’s not often that a company sparks a revolution, but T-Mobile USA Inc. believes it has, Vice President of Merchandising & Store Development Sarah Osmer says. The wireless network operator has sought to change the way its industry operates with its “Un-carrier movement,” she says. Based in Bellevue, Wash., the company provides wireless voice, messaging and data services to approximately 63 million customers and has more than doubled its LTE footprint to reach 305 million Americans. This incredible momentum began in 2013, when Osmer notes, T-Mobile kicked off its Un-carrier movement to free customers from pain points such as overages and annual service contracts. “This really started with us recognizing how bro-
ken this industry was and we challenged ourselves … to do better,” she recalls. “The core of the entire strategy was to do better not only by our own customers, but to spark change across the entire industry in a way that would give people a truly unleashed wireless experience. “The customer is at the center of everything we do,” she continues. “We work hard to make sure things are simple and straightforward and we go above and beyond to offer customers services that give them more of what they want most.”
Sarah Osmer, vice president of merchandising and store development www.t-mobile.com Bellevue, Wash.
Big Things T-Mobile has come a long way since the launch of Un-carrier. “We’ve pulled off what no one thought was possible – a 180 degree about-face – that’s drivMay/June 2016
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T-Mobile USA Inc.
ing massive new customer growth,” Osmer explains. “To put it in perspective, we had about 33 million customers in 2013 and today, we have more than 63 million.” This turnaround was sparked by 10 Un-carrier “moves,” including the recently launched “Binge On” service, which allows you to stream all the video you want from more than 60 services, including YouTube, Netflix and Hulu – without using any of your high-speed data. “We know our customers love to watch a ton of video, so we wanted to give them the freedom to binge watch without any limitations.” Launched in 2014, T-Mobile also has had success with its “Contract Freedom” program, which helped remove one of the single biggest obstacles for people wanting to switch carriers – by offering to pay off the carriers’ early termination fees. “It was absolutely revolutionary,” Osmer says. “Our goal was to be transparent and to give all those customers that feel stuck, the freedom to easily switch – risk-free.” Osmer credits the company’s success to CEO John Legere, who genuinely “lives the brand,” she says, noting that he recently posted a photo on Twitter of himself wearing T-Mobile branded clothing at a family event. “He said, ‘Even on my day off, I’m wearing T-Mobile.’ He truly believes that this industry needs a massive shakeup and he wears his T-Mobile gear with pride.” Legere also regularly listens and engages with employees, Osmer adds. “He spends the majority of his time JBL out visiting stores and call centers – unlike some othFrom unique retail sales programs to er ivory-tower CEOs,” she impactful product demos and retail says. “As a result, people merchandising, JBL and T-Mobile enjoy a successful partnership, making JBL’s feel heard and they know innovative line of wireless products come their input has a direct alive for T-Mobile customers nationwide. impact on the business.” 44
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T-Mobile Pride Legere’s pride in T-Mobile is contagious and has trickled down to the company’s employees, Osmer says. “It’s really exciting to have a CEO and entire executive leadership team who are so accessible, who are challenging the status quo and taking a position that’s making a difference for customers in the marketplace,” she says. That passion and energy can be felt when customers visit stores, Osmer says. “When they walk through that door, the first thing we want people to feel is that we’re a different company who is 100 percent focused on giving them have a great experience and feel heard, whether they want the new iPhone 6S Plus or if they want to buy a charger,” she says. The company does this by encouraging employees to be themselves, to connect with customers in a genuine way. Part of this was changing what employees wear in stores by ditching the polo in favor of T-Mobile branded t-shirts in a variety of design they can choose from to fit their personality. T-Mobile also has helped nurture that energy through one-of-a-kind benefits that include making every employee “an owner of the company,” she says. “Every employee receives an employee stock grant, which includes restricted stock units. When you’re an owner, you’re just that much more invested in the company. “Because of our approach, frontline employees feel like they’re embodying the brand in an authentic, personal way,” she says. Customers have responded well to frontline employees’ energy and attentiveness. “We get thousands of letters from them that say the same thing: ‘I switched to T-Mobile and couldn’t be happier because of the experience I had in your store,’” Osmer says. “It’s amazing how consistent that is.”
Retail Evolution T-Mobile has not only been shaking up the industry, it’s also been evolving and improving the wireless customer experience in its retail stores.
Mobile Movement
T-Mobile recently rolled out a new store format, which strives to give customers a richer experience, Osmer says. “With Un-carrier, we have grown so much and our product mix has changed, so we needed a store design that could grow with us,” she explains. “One of the key principles of our design, was to open up the store layout to encourage more interaction and connection with our customers,” she continues. The open space allows employees to talk to customers side-by-side as they discuss rate plans or look at phones and accessories options. “It allows for a true connection with the customer,” Osmer says, noting that T-Mobile is remodeling current locations with the new design and opening new ones. “By the end of the year, we will have hundreds of stores up and running with this new format.” This January also saw the launch of its new signature store in Times Square in New York City. Covering 4,000 square feet, the location features approximately 2,900 square feet of sales floor space, a 25-foot-tall glass storefront and a 32-foot-tall digital billboard. “It is pretty spectacular,” she says. “We created a new store concept so that our customers, shoppers and tourists could have a one-of-a-kind digitally immersive experience. There’s no better place to do that than Times Square.” Osmer’s team re-worked every aspect of this store, from its design to its visual merchandising, to make for an amazing customer experience. “It was so motivating for the team to pull this off and give customers a new way to experience T-Mobile,” she says. Already the store has won a positive reception. “We’ve exceeded our expectations not only in the performance of that store, but with the connections we’re making with the Times 46
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Square Alliance and local New Yorkers coming downtown,” she says.
Mixing it Up Just as with its Un-carrier moves and Un-carrier customer service, T-Mobile also has continued to shake up its product portfolio to better meet customer needs. “For example, during the past few years, we have completely revamped our accessories portfolio,” Osmer says, noting that the sales of wireless headphones and speakers are especially strong. “Customers are realizing that with the right accessories, there are so many ways they can use their phones – all without wires getting in the way.” The company also continues to enjoy strong business with cases and screen protectors. “Customers look to us for the best way to protect their phone,” she says, noting that T-Mobile offers a diverse selection of styles from tech 21 rugged protection, Sonix and more recently Kate Spade. “Kate Spade has been a great addition to our portfolio, giving our customers a real fashion statement for their phone, they love it.”
A Clear Vision T-Mobile has made one thing clear about the future – it won’t be slowing down anytime soon. “As the industry evolves and customer needs shift, there will always [be] new pain points to solve – and that’s what we’ll do,” Osmer explains. “We won’t stop.” “And now that T-Mobile’s 4G LTE network now reaches more than 305 million Americans, you can expect the Un-carrier to find new ways to connect with new customers in new places,“ Osmer says. O
Retail
EASY REST ADJUSTABLE SLEEP SYSTEMS
Rest Adjustably
Easy Rest is growing rapidly with its made-in-the-USA adjustable sleep systems and unique in-home consultation process that needs no stores or showrooms. BY RUSS GAGER
Easy Rest Adjustable Sleep Systems include features such as variable speed therapeutic massage, soothing heat, a “wall hugger” feature, under-bed lighting and wireless hand controls.
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attress stores have been proliferating across the country in recent years, and most of them have started to carry adjustable beds in their showrooms. However, the salespeople are often relatively uninformed about their operation and don’t understand the medical and lifestyle benefits that adjustability provides the consumer. So Easy Rest Adjustable Sleep Systems goes to market with a unique business model: personal service and expert, in-home consultation with customers. “We believe that customers should be aware of what they’re buying, and most importantly, if they buy a product, they should know how to use it and how to
get the most benefit out of it,” Co-owner Mo Maghari emphasizes. “We’ve always felt that the only effective method to achieve that is the in-home consultation, where we actually make sure we are familiar with the customer’s situation, including health issues and budget constraints. We always find the perfect solution or match for them. We try to educate them on the lifestyle benefits of adjustable beds. When you’re in a retail store, all you buy really is a plain, flat bed. So we don’t look at retail stores as our competition.” Easy Rest’s involvement with its customers extends from in-home sales and delivery to after-sale service. “We absolutely handle everything in the sales process from A to Z,” Maghari declares. “We are very proud May/June 2016
Mo Maghari, co-owner www.easyrest.com Baltimore
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Easy Rest Adjustable Sleep Systems of the fact that we are the only company in the United States that actually services adjustable beds from the conception to the final delivery, installation and even future services.” A unique feature of Easy Rest is that its beds can be attached to existing headboards or frames. “That really sets us apart from a lot of these large national chains,” Mowrey notes. “When somebody gets our bed, it fits seamlessly with their décor. They don’t have to change anything. When the bed is in the flat position, you wouldn’t know it was an adjustable bed – it seamlessly interacts with their current furnishings and looks like a traditional flat bed.” Easy Rest Adjustable Sleep Systems can be adjusted for height. “We can make them higher or lower based on what the customer requires,” Maghari points out. “We have a unique leg system on the base that makes the legs of the bed taller or shorter. We also have a unique mattress design that we can change the type of comfort insert in the mattress to make the mattress softer or firmer based on the height, weight and preference of the customer.”
Made in the USA Easy Rest Adjustable Sleep Systems are manufactured in the United States. “When it comes to a quality, American-made product, we are the only one in the market that does not use any Asian components,” Maghari maintains. “There are very few manufacturers in the U.S. of adjustable beds. Most of the names – including some of the very big names in the bedding market – are actually nothing more than importers of beds from overseas. They slap a different label or name on the bed, but most are imported from China.” Easy Rest’s adjustable beds are manufactured in Nashville in a joint venture with a company named American Adjustables. “Our factory has 40,000 square feet of space, and we are looking for a new facility because sales have taken off to such a degree that we are out of space in the manufacturing plant,” Maghari says. Easy Rest does not compete on price. “Our philosophy is that you have two choices to compete: you can compete on price or quality,” Maghari insists. “Most of those who compete on price go to China. We choose to compete on quality, not price, and that is why we insist on manufacturing in the United States, because we can produce a much higher-quality product than any made overseas.” Easy Rest will be moving into a new, 18,000-squarefoot corporate headquarters in Baltimore during the fourth quarter of this year. The current facility is approximately 10,000 square feet. “We are looking forward to getting a big, beautiful new building,” Mowrey says. “We’re busting at the seams where we are now.” Managing Partner and co-owner Jeff Mowrey estimates that Easy Rest’s business has been up approximately 20 per48
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Easy Rest’s adjustable beds are manufactured in Nashville in a joint venture with a company named American Adjustables.
cent each year for the last three years. Mowrey attributes the sales increase to many factors, one of which is the media attention about a sleeplessness epidemic in the United States. “There’s more and more press out there about healthy sleep, better sleep and people needing their sleep,” he notes. “There’s so much research coming out about people not sleeping and alternative ways to sleep without resorting to prescription drugs.” Adjustable beds can contribute to improved sleep, Easy Rest points out in its sales literature. “There’s a wide range of reasons why our customers buy our beds, for sure,” Maghari concedes. “Some of them do buy our beds because they are looking for relief from certain medical problems. But there is also that wide range that is looking for an extreme level of comfort and relaxation.” Many of Easy Rest’s adjustable beds include features such as variable speed therapeutic massage, soothing heat, a “wall hugger” feature, under-bed lighting and wireless hand controls.
Employee Training Easy Rest sales representatives have to be well-trained to provide expert information to consumers on the many advantages and health benefits of adjustable sleep systems. With salespeople in all 48 continental states, that can be difficult to coordinate, but the company has a core group of sales trainers that travel the country working one-on-one with salespeople as well as in group settings. “Our salespeople receive training regardless of how long they have been here,” Maghari emphasizes. “Some people have been here since our founding in 2007 and they still go to continuous training all the time. We never stop that process.” For the future, Easy Rest plans to introduce a revolutionary new product geared toward the life changes experienced by
Easy Rest Adjustable Sleep Systems
post-menopausal women. “We’re really excited about this new product that we plan on rolling out next year,” Maghari says. “Women have some unique problems that cause them to have difficulty getting a full, uninterrupted night of sleep and we believe this new product will be a game-changer for them.”
Ann Mowrey attributes the success of Easy Rest to “a lot of hard work and a very good understanding of whom our customer base is and how to reach them. Once in the customer’s home, the passion of the sales representative in wanting to help these customers improve their lives and find a better solution to their sleep needs takes over – and ultimately, the fact that the product is high quality and worth the money.” Not having the overhead of showrooms and stores also helps. “Not having showrooms enables us to focus our marketing on our target demographics and not throw out a wide fishing net to everyone in a geographic area regardless of their age or interest,” she emphasizes. “We have a new tag line – ‘Changing lives one bed at a time’ – because we continuously hear from customers about how the product has changed their lives,” Mowrey concludes. “They’re finally sleeping for the first time in ages and they can’t remember the last time that happened. We hear from customers who are thrilled that they’ve finally gotten out of their recliner and they’re back in a proper bed. We hear from customers that for the first time in years, they get up and have a spring in their step, and their everyday aches and pains are gone.” O
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Retail
BOARDMAN MEDICAL SUPPLY COMPANY – SAVON MEDIMART
Patients Come First
Providing high quality products and services at affordable prices are key attributes of the Boardman Medical Supply Company and Savon Medimart family. BY ERIC SLACK
BMS and Savon Medimart work closely to help patients get affordable products.
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Robin Ivany www.boardmanmedical supply.com www.savonmedimart.com Girard, Ohio
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subsidiary of Sateri Inc., Boardman Medical Supply Company Inc. (BMS) is a privately owned and operated durable medical equipment company. Established in 1982, BMS now serves Northeast Ohio, Western Pennsylvania and Northern West Virginia. Headquartered in Girard, Ohio, BMS has seven retail locations and 140 employees. “BMS offers patients the highest quality of products and services available,” Vice President and General Manager Robin Ivany says. “Our company is different than other home medical supply companies in the area. We are committed to treating all of our patients as if they were part of our family. Our patients
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are our neighbors and friends, and that hometown connection makes all the difference in the world.”
Standing Out Recognizing that not all home medical supply companies are the same and that the quality of home care can differ significantly from one organization to another, BMS has sought to differentiate itself in numerous ways. One of these aspects is its staff of respiratory therapists, nurses, medical billers, customer service reps, delivery technicians, service technicians and various support staff. BMS has worked hard to build a staff that takes pride in the care and service they provide to patients.
Boardman Medical Supply Company – Savon Medimart “We work directly with physicians, hospitals, medical facilities and agencies throughout the tri-state area to coordinate a patient’s discharge process and help develop a home care plan specific to each patient,” Ivany says. “Our billing teams are experienced in Medicare, Medicaid and third-party billing for patients with a variety of different insurance plans.” Additionally, BMS carries a diverse assortment of respiratory products, CPAP products and accessories and oxygen therapy supplies. It is a point of pride for BMS that it has the most comprehensive oxygen and respiratory program in its area. “We also offer a variety of home medical supplies such as scooters, wheelchairs, support services, bariatric products, support hosiery, CPMs, TENS units, phototherapy and more,” Ivany says Another differentiating factor is its commitment to accreditation. The State of Ohio has established licensure laws that establish the minimum requirements for operating a durable medical equipment (DME) company. The Centers for Medicare and Medicaid Services has also established provider requirements for durable medical equipment suppliers. BMS has been approved by all of those entities to provide home medical services in Ohio. “Not all DME companies operating in Ohio choose to be accredited,” Ivany says. “BMS voluntarily chooses to be accredited in order to provide the absolute highest standard of services and products. Our accreditation with the Accreditation Commission for Health Care is one of the key benchmarks for measuring the overall quality of our organization. We also maintain accreditation with several professional agencies where standards of care and services are of the highest rating in our industry.”
er prices because of contracts with insurance companies,” Ivany says. “However, Savon Medimart has eliminated insurance contracts, and this allows the company to provide savings back to customers through reduced prices.” All of this is particularly important at a time when durable medical equipment suppliers are facing reduced reimbursement rates. This can cause equipment suppliers to close their doors, and that makes it harder for patients and families to get access to the medical equipment they need. Many of these families are also challenged by having to settle for insurance options that are more expensive and have higher deductibles. By creating Savon Medimart, the organization can now offer products at lower prices than DMEs because of higher prices mandated by insurance contracts. Ultimately, both BMS and Savon Medimart are looking to continue to build on their strong foundations thanks to a long legacy and commitment to providing the best possible care to patients and families. Although the healthcare industry continues to change, BMS and Savon Medimart remain focused on offering patients the highest possible quality of products and services, while Savon Medimart is also committed to ensuring that patients always have access to more affordable products. O
Part of a Family Being part of the Sateri organization and working closely with all the pieces of its corporate family is another way BMS can stand apart in its markets. For example, BMS includes its Pink Promises and Innovative Concepts divisions. Innovative Concepts specializes in custom seating products and complex rehab technology. Pink Promises has products for post-mastectomy patients, and certified mastectomy fitters are on staff. Another part of the corporate umbrella is Savon Medimart, a sister company to BMS. It was opened to help patients get affordable products, as changes in the insurance industry have led to higher deductibles and co-insurance. Savon Medimart is focused on helping patients to be able to get the products they need while also paying less than if an item had been submitted to an insurance company. “Because insurance companies have a large amount of control over what medical equipment suppliers can charge and reimbursement rates, suppliers have to charge highMay/June 2016
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Solution Providers
Navigate the Landscape eTail East helps attendees keep up-to-date with evolving technologies and network with fellow retailers and startups through several events and panels. BY STEPHANIE CRETS
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etailers and startups can keep up-to-date and navigate today’s evolving landscape by attending eTail East Aug. 15 to18 at the Sheraton Boston Hotel in Boston. Organized by Worldwide Business Research (WBR), eTail East covers every area impacting a retailer today, from personalization, content marketing and social marketing to data, mobile engagement and omnichannel. “Whether you need new contacts, are looking for the right partner or just want to sanity-check your holiday strategies, we have something for everyone,” Program Director of eTail East Lori Hawthorne explains. “You’ll leave Boston with the means to truly transform your business.” The show offers its 1,800 attendees tons of technology under one roof. With 150 exhibitors, attendees will get up close and personal with the latest solutions for their businesses. Plus, eTail East has already done the legwork in curating and cultivating the latest and greatest in technology and exhibitors. “For solution providers, there’s no
eTail East offers its 1,800 attendees a chance to hear from the latest and greatest technology innovators and retailers.
better place to showcase your solutions,” Hawthone adds. “Establish your presence, build buzz and drive demand.” But it’s not all about the exhibit hall. eTail East has several different networking events and enjoyable opportunities throughout the three-day show including Retailer-Only Meetups, Women in (R)etail Cocktail Hour and Retailer-Only Speed Dating. “Every day you will have plenty of chances to make valuable business contacts, connect one-on-one with other
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retailers and catch up with friends,” Hawthorne says. Attendees can experience high-impact presentations, panel discussions and collaborative case study revolutions. Keynote speakers at eTail East come from top retailers and innovative startups from the around the country such as Pinterest, CVS and Vitamin Shoppe. eTail West 2017 takes place Feb. 27 to March 2 in Palm Springs, Calif. Visit www.etaileast.com and www.etailwest. com for more information. O
KENDAL KING GROUP SOLUTION PROVIDER
Retail Secrets
Kendal King Group’s new Soapbox Insights + Influence division works with everyday influencers to move products from store shelves into shopping carts. BY TIM O’CONNOR
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he retail industry becomes more complex every day. Products are introduced at an increasingly rapid Adam Herbig, director pace, new trends of brand licensing emerge and die www.kendalking group.com within the span of a Kansas City, Mo. news cycle, mergers and acquisitions are constantly reshaping the landscape and companies cope by asking fewer employees to do more work. Stores and product Tom Hauge, vice manufacturers today president of business need help in navigatdevelopment ing those changes in retail. “More of our clients are coming to us to act as an extension of themselves,” says Tom Hauge, vice president of business development for Bethany Stephens, Kendal King Group, director of strategic a retail marketing marketing agency. Clients trust Kendal King Group to win not only with the customer in the store, but with the buyers in the retailer’s home office. “We’ve been speaking retail for 30 years,” Hauge says, adding that Kendal King Group understands the retail environment better than its competitors. The company’s foundation in retail shapes how it approaches insights from every level of activation throughout the shopper’s journey.
Customers who utilize Kendal King Group may come to the company with one service in mind, but often see the value Kendal King Group creates and end up expanding the relationship. “We allow our clients to sleep well at night knowing whatever their need, we’ve got it handled,” Director of Brand Licensing Adam Herbig says. The company’s services include designing point of purchase displays, creative concepting, in-store communication, packaging, brand identity and development, research and insights, retail environments, category and department sets, retail sales consulting, promotional licensing at retail and retailtainment. Kendal King Group also operates Clubpallets.com, a division that handles the procurement of merchandising for club stores. Once a client is within the Kendal King Group fold the goal is to help the client “win” at retail, Hauge says. That success can come in many ways, from attractive displays to influence campaigns and partnerships with other products. “They [retailers and manufacturers] are all starving for ideas,” Hauge explains. “They are all looking for ways to creatively grow their sales.” Retailers and manufacturers often lack the time or people to develop those ideas themselves. That’s when they turn to Kendal King Group. “In this industry, our clients just really have their heads down focusing on their business,” Director of Strategic Marketing Beth Stephens says. “It’s hard for them to step back at that level and think about what’s new, what’s innovative. They rely on us to do that.”
Kendal King Group today is a onestop shop approach for retail marketing, but the company‘s origin has a more singular focus. Kendal King Group began in 1987 as a Kansas City, Mo., P.O.P signage company for Walmart. As Walmart grew, Kendal King Group grew with it. The company branched into 3-D displays and retail marketing. In the mid-‘90s, it opened a second office aimed at working directly with the retailer in Bentonville, Ark., down the street from Walmart’s headquarters. Other CPGs and retailers noticed the work Kendal King Group did for the world’s largest retailer and felt confident the company could execute their own complex programs. Kendal King Group now counts companies such as American Express, CVS, ConAgra Foods, Clorox, Sony Playstation and the NBA among its clients.
Evolving Retail With competition at retail becoming more complex, Kendal King Group is constantly thinking about how shopping May/June 2016
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SOLUTION PROVIDER habits change. Retailers are looking for new ways to engage shoppers and manufacturers want a partner that can help them win at retail. Hauge says the industry is obsessed with the term “shopper marketing,” but Kendal King Group takes it to the next step by homing in on “conversion marketing”; that is, converting shoppers into buyers as they make their way through the path to purchase. Many shoppers make their buying decision before entering the shop, which is why Kendal King Group embraces the idea of conversion marketing outside the store. If retailers and manufacturers are not targeting the shopper directly through other mechanisms then national marketing campaigns and brand awareness don’t result in higher sales, Stephens explains. “Ultimately, we want those products to end up in carts, not just be on the shopper’s general radar.” The company works with three pillars that allow it to meet the needs of clients: insights, strategy and tactical. Insights involves engaging manufacturing partners to help them learn more about their customers by connecting them directly with shoppers. Strategy is getting products in the right place at the right time for the shopper. That process could mean bringing two products together to create a mutually beneficial marketing campaign or persuading a retailer to carry a product consumers want. The third pillar, tactical, is everything that must happen inside the store to get the product into the shopper’s cart. Kendal King Group reaches consumers through shopper marketing and retail activation using in-store displays, signing and events. To fill those various services, Kendal King Group must be nimble. The com54
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pany often works alongside in-house brand marketing, but other times it serves as the brand’s only marketing team. “We end up playing different roles for different clients,” Stephens says. Kendal King Group prides itself on building custom programs for its clients. The company strives to deliver on speed to market, innovation and nimbleness by leveraging smart sourcing to gain an edge. Depending on a client’s program needs, budget and timeline, Kendal King Group is able to leverage suppliers to hit those deadlines and provide a unique retail marketing solution. As it approaches new business opportunities, Hauge says Kendal King often finds itself collaborating with other agencies on one program and then competing against those same businesses on the next job.
Social Revolution With DVRs allowing consumers to skip commercials and ad-blockers allowing people to eliminate many internet advertisements entirely, product manufacturers and retailers
are looking for more avenues to reach buyers. Kendal King Group’s Soapbox Insights + Influence division is finding success in the social space through word of mouth marketing. The company works with online influencers, such as bloggers, vloggers and visual content creators who have built strong personal brands through loyal followers and readers. Those influencers are people who have put a lot of effort into their brands and align only with the products that fit their lifestyles. Soapbox leverages those influencers to curate content by providing resources and products the bloggers can use to develop a post and get people talking about the item. The company is careful not to tell its influencers what to say – the message is always more effective when it’s authentic – but might share challenges or little-known facts related to a product that influencers can mold into messaging their audience will find relevant or interesting. Those readers later see the product at the store and recall what their favorite blogger said about it. “The delivery mechanisms are different but hopefully the result is the same,” Stephens says about this new approach to marketing. The company also works to turn everyday people into product advocates and authentic brand ambassadors. Soapbox
KENDAL KING GROUP talks with groups of opinionated shoppers, such as moms, about what is on their shopping lists, what’s in their pantry and what they are making for dinner that night. In some cases, the company even sends someone out to shop alongside individuals to understand the product choices they are making. Soapbox then facilitates turning those influencers into megaphones, allowing them to take product information, share it and amplify it with friends and followers. The insights created by those experiences also allow Soapbox to yield “aha!” moments for its clients. The company puts brand organizers in front of groups of customers – millennials, for example – and digs into their buying choices. Why this brand of cookie, or why did they buy this device online and not in a store? Out of those “shopper sessions” can come the nugget of feedback that changes a brand’s marketing to reach
more people. “If you’re not interacting with shoppers you’re not going to understand their pain points and be able to act against them,” Stephens explains. In some cases, Kendal King Group has alleviated those pain points by connecting two of its clients. The company’s digital demos program was born from its relationship with Ghirardelli Chocolate and Josh Cellars, a premium wine brand produced by California vintner Joseph Carr in honor of his father. In the past, Ghirardelli held Valentine’s Day in-store demos that created short-term sales boosts but did not result in the longterm return the company wanted. Kendal King Group’s Soapbox division created an opportunity for a crossover. The company provided product messaging, seasonal prompts and suggested pairings of Ghirardelli chocolate and Josh Cellars wine and engaged influencers, who then touted the
combination online and through social media – and drove home the message that both products were available in stores such as Walmart. “We let them bring it to life,” Stephens says. “We put the pieces in place, made it simple for our clients and then we got out of the way.” All that positive word of mouth was enhanced in stores with necker labels on wine bottles promoting Ghirardelli Chocolate, and new aisle end caps cross-promoted the products and made it easy for consumers to buy together. Kendal King Group sees that kind of influencer-led advocacy with instore follow-up as an important part of retail marketing’s future. After years of working behind the scenes, the company is eagerly sharing its success stories with clients and retailers. “I think Kendal King Group has been a well-kept secret for a long time,” Hauge says. O
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SOLUTION PROVIDER BAKER & TAYLOR
Content Connection Baker & Taylor develops value-added services to connect content producers with customers in addition to developing new programs that lower costs in the supply chain. BY JANICE HOPPE
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s one of the world’s leading suppliers of physical and digital books and media, Baker & Taylor David Cully, executive prides itself not only vice president of merchandising on the content it www.baker-taylor.com distributes, but also Bridgewater, N.J. on its ability to offer value-added services that make it easy for content suppliers and customers to do business with each other. “Over the past three years we have invested, on average, $20 million a year in both B2B and B2C platforms,” Executive Vice President of Merchandising David
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Cully says. “The idea there is to connect our content providers with businesses and the ultimate customers.” Charlotte, NC.-based Baker & Taylor was founded in 1828 – the same year literary giants like Leo Tolstoy and Jules Verne were born – to bind and publish books. Later, Baker & Taylor began distributing books, making sure the written word made its way onto library and store shelves, and ultimately into readers’ hands. In 1983, Baker & Taylor’s first mascot came along. Libraries have a long history of keeping cats and Baker & Taylor is no exception. The first of the company’s two cat mascots took up
residence at the Douglas County Public Library in Minden, Nev., in 1983 and was named Baker because he slept in a Baker & Taylor box. Taylor followed two months later with a grant from the company. Baker and Taylor carried on the long tradition of working library cats. Both have since passed away, but the pair used to spend their time at the checkout counter and carried on the long tradition of working library cats.
Digital Age Today, Baker & Taylor is one of the world’s largest distributors of books and entertainment products with about 24,000 suppliers. It serves 14,000 retail
BAKER & TAYLOR customers, 10,200 public libraries and 7,500 schools. “I think we are one of the world’s largest suppliers of books and value-added services specifically to retailers,” Cully notes. “One-third of our retail business is international and our international business is growing rapidly based on the proliferation of the English language as a language of professional disciplines, education and consumers.” The recent sale of Baker & Taylor to Follett from private equity owners Castle Harlan on April 18 has positioned the company for even greater strategic growth. Follett is a top provider of technology, services and print and digital content to PreK-12 libraries, schools and higher education institutions. Now that Baker & Taylor and Follett are aligned, Baker & Taylor will be able to serve schools, public libraries, colleges, local bookstores and retailers better than ever before. “Acquiring Baker & Taylor marks a major milestone for Follett that expands the possibilities of our two businesses,” said Todd A. Litzsinger, chairman of Follett.
seamlessly do business across thousands of suppliers and hundreds of thousands of SKUs. “The book, movie and music business has an enormous number of new products coming out each year,” Cully explains. “What we do for customers is the curation, collection develop-
ment, and assortment planning that enables them to present relevant information, educational content and entertainment to their customers.” Cully attributes the company’s success to it being more of a value-added service provider than simply just a distributor, and helping its customers
Value-Added Service Baker & Taylor’s content suppliers – publishers, movie studios and music labels – are connected to customers through technology platforms. The company utilizes B2B platforms that allow its customers to
Macmillan Publishers Macmillan Publishers has a rich history in the book industry. Our companies publish a broad range of quality works—including bestsellers and award winners for adults and children. A forward-looking company, we are dedicated to making our books available in whatever format our readers prefer. Macmillan Publishers is committed to our authors, our employees, our vendors and the environment. May/June 2016
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We have had to make significant investments to stay relevant with our retail and library customers.
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present content in a way that is easy and digestible for their customers to shop. Baker & Taylor offers electronic data interchange transactions and web hosting for customers that choose not to have their own site, including hosting digital websites for thousands of public libraries in the United States. “Probably the most evolved digital space for us is with the patrons of libraries,” he says. “Patrons can check out books and audio books online without actually going to the library. We have had to make significant investments to stay relevant with our retail and library customers.” Public schools are another key customer of Baker & Taylor, which is why the company developed KnowledgePoint. “Essentially, in the K-12 environment it’s an adaptive learning platform that’s integrated into the schools’ core curriculum that allows the educator to track the progress of individual students in his or her classroom, whether the whole class is reading the same book or each student is reading a different book,” Cully explains. Baker & Taylor helps the school curate its title selection in addition to offering a digital platform that students use to read; and teachers and students use for assessment. Educators can track the progress of each student to ensure they are understanding and engaged in what they read and determine whether they are reading at the appropriate lexical level via questions throughout the text. “It’s a brave new world in classroom education and we are terribly excited about this,” Cully says. “We have pilot programs with about 250,000 students using it in the Los Angeles Unified School District, school districts in New York and other major metro areas around the United States. The initial results are very encouraging in terms of the students’ performance.” KnowledgePoint pilot programs launched about a year ago can offer schools access to 800,000 digital books. “It’s been pretty fabulous to track student engagement and reading progress,” Cully explains. “There is functionality that allows them to highlight and text-to-speech. It’s a pretty well-evolved system for the classroom and educators are responding positively. 58
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“They no longer have to teach ‘to the middle.’ Students can select books based on their level and teachers can track their progress real-time. As a former educator, I’m excited about this.”
Meeting Demand Baker & Taylor’s staff of librarians helps schools and libraries manage their digital and physical collections. The company’s librarians also assist customers in making decisions about which of the tens of thousands of new books that come out each year to acquire. “They match the profile of the library or school to the profile of the book,” Cully adds. After Baker & Taylor acquired Glasgow, Scotland-based technology company Bridgeall Libraries in 2011, the two companies worked together to develop an analytical tool for assessing circulation stats. CollectionHQ is a tool that analyzes circulation stats for libraries so they can understand the investments they are making and ensure they are investing in the right categories for their patrons.
CollectionHQ is a vital tool in public libraries and schools around the world because both entities are publicly funded and people want to know how well they are serving their constituents. “Retail has had POS information for a long time, but this is an analytical tool we have offered for several years to analyze the utility of their collections and help them make better collection decisions going forward based on actual check-out stats,” Cully adds. Over the past six months, Baker & Taylor has been piloting Evidence-based Selection Planning (ESP), a predictive tool that allows the company to recommend choices to librarians based on those circulation stats. The optional feature works by using CollectionHQ and leveraging data from Baker & Taylor’s online collection development and ordering system Title Source 360. The tool will identify new titles suitable for a library or school, highlight titles with a relevancy ranking and determine the best locations for the material. May/June 2016
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BAKER & TAYLOR
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The eBook business in the consumer space has plateaued and today is about 25 percent of the business. Lowering Cost
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Baker & Taylor plays a critical role in the supply chain. Half of its business is done with public libraries and schools and the other half is retailers, both domestically and internationally. The company services independent book, video and music retailers, as well as regional and national chains. Its e-commerce players include Amazon, Barnes and Noble, Target.com and Walmart.com. Each of its consumer-direct customers require customized solutions and the company is a closed-loop solution provider. “In the consumer-direct fulfillment space – be-
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cause of our distribution footprint – we are able to reach consumers on behalf of our customers very efficiently and quickly,” Cully says. “Our distribution footprint in the United States allows us to reach about 65 percent of the population by nextday ground and about 98 percent by two-day ground,” he continues. “The importance of rapid delivery in the world we live in is a strategic advantage for our trading partners and content providers alike.” In terms of physical distribution, Baker & Taylor began manufacturing and printing on-demand three years ago when the book industry’s supply chain changed from printing an enormous amount of books speculatively to a just-in-time model. “We have invested in manufacturing that allows us to print on-demand and do digital short-run printing on behalf of our suppliers, so there is less waste in the supply chain and it is much more efficient,” Cully explains. The single largest cost for publishers is manufacturing a book, and because wholesalers can return unsold material it can result in an even bigger cost to the publisher. “We are printing to order and printing on-demand so that when we have an order from a retailer or from the end-customer we manufacture the book,” Cully says. “Inkjet printing is reducing the cost per unit so that publishers are inclined to print smaller quantities more frequently to eliminate waste and obsolescence. That’s another value-added service we provide to our content providers to reduce their supply chain costs.” To continue reducing supply chain costs, Baker & Taylor introduced a “Virtual Inventory Program” three
years ago, which allows its customers to order from electronic feeds of inventory from each publisher. Rather than stocking its warehouses with more SKUs, the company aggregates the electronic orders and sends them to the individual publishers who pack and ship them back to Baker & Taylor in 24 hours. “We have created a new business model with the Virtual Inventory Program so we don’t order inventory until we have a request for it,” Cully says. “It’s much more efficient for everyone in the supply chain, has taken the cost out and has created incremental business for our content suppliers and customers alike.”
Further Developments Moving forward, Baker & Taylor plans to focus on growing its digital learning business and expanding its footprint internationally in retail and public libraries. “I think what we are seeing is that the use of adaptive learning platforms and eBooks in the K-12 and higher education space is still a business in its infancy with tremendous potential going forward,” Cully notes. The company plans to maintain its focus on developing new products and services that will allow it to acquire additional market share in its current space in addition to adjacent channels. “The interesting thing about the consumer book business is that everyone five or six years ago thought the physical book was going to be ancient history quickly,” Cully says. “What’s happened is that the eBook business in the consumer space has plateaued and today is about 25 percent of the business. The print book business is here to stay.” O May/June 2016
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SOLUTION PROVIDER DIRECTORY CONTENT DELIVERY NETWORKS www.akamai.com
EMAIL MARKETING -------------
Bluecore
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RETAIL MERCHANDISING SOLUTIONS ----------------------
Kendal King Group www.kendalkinggroup.com
PERSONALIZATION -------------
Forter
Certona
MOBIL MARKETING -------------
SmarterHQ
www.criteo.com
www.bronto.com
www.coyote.com | 847-235-9852
FRAUD MANAGEMENT ----------
Criteo
Bronto Software
Coyote is a leading third-party logistics service provider offering supply chain solutions to more than 14,000 shippers in industries such as retail, food and beverage, industrial goods, and more. Email contactshipper@ coyote.com to learn more about how Coyote can help you.
Preferred Display, Inc.
www.forter.com
www.bluecore.com
Coyote Logistics
Silverpop
www.silverpop.com
Akamai
LOGISTICS -----------------------
www.preferreddisplay.com
www.certona.com
www.smarterhq.com Email joy@pmcmg.com to be featured in this section.
PERFETTI VAN MELLE
New&Notable Jay Company
Mentos® scented candles Mint, cinnamon, fruit… Jay Company has developed a range of wonderful fragrance candles linked with the most popular Mentos® flavors, available in major retailers such as Rite Aid. Soon the range will be completed with diffusers, tart burners and more to sweeten your home with a pleasant aroma.
Kold Wave
Airheads® flavoricious ice creams
www.jaycompanies.com
Koldwave Foods LLC has brought the iconic Airheads® candy brand experience to the frozen aisle with a lineup of Airheads® frozen novelties that provide new ways for consumers to snack and refresh. Airheads® ‘Mixed Berry’ DitZ and Airheads® Xtremes ‘Fruitiest Fruit’ DitZ are mini bits of ice cream providing a playful take on a consumer favorite. Airheads® Chillers are a new twist on a traditional novelty, featuring a three-staged ‘Patriot Pop’ or a variety pack of single-flavor pops in Orange, Strawberry and Grape – both options deliver Airheads® signature intense flavors. All items are available nationally in your grocer’s freezer section.
Accessawear
www.airheadsfrozen.com
Mentos® original electronics devices Unilever
Mentos® and Accessawear partner to bring innovation and the renowned Mentos® brand to the forefront of consumer electronics. The incredible line of products includes protective and decorative cell phone cases, fun and colorful digital coin banks, Mentos®-shaped earbuds and dancing color themed water speakers.
Chupa Chups® super tasty ice cream Taste the freshness and the fun with Chupa Chups® Calippo Shots. You can find it around Europe in two different flavors: Cherry Banana and Cola Lemon. Millions of refreshing miniballs will burst in your mouth! A real taste explosion!
www.accessawear.com
www.unilever.com Iscream
Airheads® super-size lifestyle products Love Airheads® candies? Check out Iscream’s new line of Airheads® pillows for your room. They come in 3 flavors: Blue Raspberry, Watermelon and Cherry. Each pillow is oversized, measuring 26” x 12”, and very squishy, ideal to play with. Look out for them at IT’SUGAR stores across the nation.
www.iscream-shop.com
Carpa Design
Mentos® and Chupa Chups® car air fresheners
Taste Beauty
Chupa Chups® for sweet lips Taste Beauty’s lip balms and other cosmetics products are scented and flavored just like Chupa Chups®’ iconic lollipops! The Chupa Chups® line will also include lip gloss, nail polish, cosmetic bags and gift sets.
www.taste-beauty.com
Car Parts Trading has created an amazing range of Chupa Chups® and Mentos® car air fresheners, distributed in several European and Asian markets. Orange, lemon, strawberry, cherry, vanilla. Choose your favorite flavor to put a sweet or fresh touch to your car with Mentos® or Chupa Chups® aromas.
www.carpadesign.net Bag NY
Airheads® exciting lip glosses and nail sets Discover the cute range of lip glosses, nail sets, silicone case clips. All you need to color match your nails with your lips and shimmer and glitter with these cute lip and nail pots. Ooooh…smelling so delicious!
www.bag-ny.com May/June 2016
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LICENSING EXPO
New&Notable Mattel
Dinotrux Diecast Assortment
These large-scale Dinotrux are rolling into action with real sounds and phrases! Kid-powered motion activates sounds, phrases and unique truck-abilities of each character! It’s largescale push around play for larger than life fun! Collect them all!
Build up adventure with the half-dinosaur, halfconstruction vehicles from Dinotrux! Featuring a variety of creatures from the mighty T-Trux to bit busy Reptools, kids are sure to have a roaring good time in this prehistoric world! Collect them all!
shop.mattel.com
shop.mattel.com
Mattel
Dinotrux Sounds & Phrases Assortment
Catalyst
Valiant Universe: The Deck-Building Game Thermos L.L.C.
Genuine Thermos® Brand Lunch Products
A&E Networks Brand Licensing
The Dead Sea Scrolls From HISTORY® and Time Inc., a careful study into the fascinating and mysterious journey behind the discovery of the Dead Sea Scrolls, one of the most significant and debated antiquities of all time. “The Dead Sea Scrolls” bookazine is available on newsstands nationwide.
There’s no better choice for lunchtime than Genuine Thermos® Brand insulated lunch kits. Products feature superior quality foam insulation, durable construction and materials and are 100% PVC free.
www.thermos.com Thermos L.L.C.
Genuine Thermos® Brand FUNtainer® Products
A&E Networks Brand Licensing
Ancient Aliens: The Official Companion Coming Fall 2016, the first official companion book to the popular HISTORY® series Ancient Aliens®. Created by Prometheus Entertainment “Ancient Aliens: The Official Companion” (HarperElixir, $29.99) takes fans deeper into the provocative controversies that have rocketed the show into popular consciousness.
Genuine Thermos® Brand FUNtainer® products feature Thermos™ vacuum insulation technology for maximum temperature retention. The 12-ounce bottle keeps cold up to 12 hours and the 10-ounce food jar keeps hot for up to 5 hours or cold for up to 10.
www.thermos.com
Amloid
Crayola 2 in 1 Activity Table Amloid’s new Crayola 2 in 1 activity table is a high-quality, unique item featuring a reversible tray that provides children with hours of construction and drawing fun! Includes blocks, crayons, markers and other accessories. Folds for easy storage.
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In Valiant Universe: The Deck-Building Game, you command an organization attempting to seize the secret Alcatraz base. Craft a unique deck and battle your way through the ever-changing Facility grid that moves during play to gain access to a card or damage another player. Maneuver your superhero miniatures to battle it out with other superheroes for ultimate control!
www.catalystgamelabs.com/ valiant
The Original Designer Noodle™
Designer Pool Noodle Use a 56-inch Pool Noodle to promote any Brand that can be used at Corporate EventsPromotional Events-Amusement Parks-Water ParksBeach Event and many more. Since launching in 2015 we are in over 3,000 doors worldwide!
www.Designernoodle.com
WWE
New&Notable Petmate
DK Publishing
Pet Toys and Accessories
WWE/ WWE The 100 Greatest Matches
WWE Superstars are featured on printed canvas and rubber chew toys that are tough and rugged. Tug toys feature WWE World Heavyweight Championship titles, as well as a “Money in the Bank” rope tug for your canine champion.
WWE has tapped some of the most masterful minds in sports-entertainment – including the Superstars themselves – to decide the greatest 100 matches in its history. Over 200 full-color pages, celebrate epic confrontations, monumental triumphs, bitter rivalries and much more!
www.primagames.com/games/wwe-100greatest-matches/products
www.petmate.com/ brand/wwe
2K / Cat Daddy Games
WWE SuperCard SuperTokens
JAKKS Pacific, Inc.
WWE Brock Lesnar Deluxe Costume
WWE SuperTokens enhance the fast-paced card battle action of WWE SuperCard for iOS and Android. Using NFC technology, just tap these collectible tokens to unlock an Ultra-Rare card for you and Super-Rare cards to share with your friends.
wwe.2k.com/news/wwe-supertoken
Ripple Junction
T-Shirts WWE and Ripple Junction have partnered together to corner the specialty market with their innovative, on-trend designs and superior quality. Ripple Junction’s passion for the brand has resulted in a stellar collection of WWE Legends and Superstar tees and fleece.
Become a WWE Superstar with the Brock Lesnar Deluxe Costume Set! Relive all your favorite in-ring moments by dressing like your favorite WWE Superstar! Championship Title, Mask & Muscle Suit included.
www.jakks.com
SalesOne
Jewelry WWE and SalesOne partnered together to launch a men’s, women’s and boy’s jewelry line. This line will consist of necklaces, bracelets, earrings and rings. Now WWE fans can sport a WWE Championship title on their wrist!
Mattel
WWE ROMAN REIGNS GAUNTLET Become the new leader of The Roman Empire with the Gauntlet role play accessory inspired by the one Roman Reigns™ wears in the ring! Place the Gauntlet on and when activated by specific motions and sensor technology, action sounds start!
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RETAIL MONSTER & ENTERTAINMENT RETAIL ENTERPRISES
New&Notable Entertainment Retail Enterprises
Plush Your favorite M&M’s characters are out of the bag and ready to snuggle in soft premium plush.
www.retailmonster.com www.ere-sri.com
Entertainment Retail Enterprises
Double Wall Tumblers Add personality to any beverage with these colorful double wall insulated tumblers. Entertainment Retail Enterprises
www.retailmonster.com www.ere-sri.com
M&M’s Display Create a one-Stop shopping experience with this cross category solution from Entertainment Retail Enterprises. The turn-key display is delivered “ready to sell” and offers a variety of best sellers.
Entertainment Retail Enterprises
Blankets Relax with your favorite candy and stay warm and cozy with this super soft plush throw.
www.retailmonster.com www.ere-sri.com
www.retailmonster.com www.ere-sri.com
Entertainment Retail Enterprises
Entertainment Retail Enterprises
Loungewear
Mugs
Sweet dreams ahead with M&M’s comfy Lounge Shorts in bright bold colors.
Add some colorful fun to your morning coffee with these ceramic M&M’s mugs.
www.retailmonster.com www.ere-sri.com
www.retailmonster.com www.ere-sri.com Entertainment Retail Enterprises
Pillows Let’s face it, these soft premium plush pillows make a great gift or home decor item.
www.retailmonster.com www.ere-sri.com
Entertainment Retail Enterprises
T-Shirts Share a smile with the world when you wear a colorful M&M’s T-shirt.
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May/June 2016
| CONTENTS
COVER STORY
4 NYCWFF PREVIEW
The ninth annual festival brings foodies together for three days of special events throughout New York City that benefit hunger-relief organizations.
12 Beat Bugs Original Netflix series Beat Bugs hopes to engage and inspire children all over the world through vivid animation, fun storytelling and new versions of classic Beatles songs, creating a new generation of Beatles fans.
UPFRONT
7 FMI CONNECT PREVIEW
FMI Connect returns to Chicago’s McCormick Place for its more than 12,500 attendees to experience trends and innovations in grocery retail.
8
8 PENTHOUSE / THE VAULT
SPIRITS CO. Penthouse’s new line of spirits is making the brand’s luxury lifestyle available to the 99 percent. May/June 2016
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REPORTS
Supplier
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18 Haribo of America
26 TNG
Haribo of America is continuing to raise consumer awareness of its brand through high-quality products and numerous strategic initiatives.
TNG aims to grow its services beyond magazine wholesaling and provides merchandising and logistics services.
22 Hussmann
28 Allegiance Retail Services
Hussman introduces new food retail refrigeration products and services aimed at improving the shopping experience and operating performance.
Allegiance Retail Services provides family owned supermarkets with what they need to remain competitive and successful.
Retail
58 Iavarone Bros. Serving the Long Island area for nearly 90 years, Iavarone Bros. offers a quality, healthy food selection paired with a knowledgeable staff, while ensuring there’s an Iavarone family member present in every store.
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60 Knowlan’s Fresh Foods
A pioneering history of being the local supermarket of choice has Marsh Supermarkets poised to build off a strong legacy.
Knowlan’s Fresh Foods and Festival Foods of Minnesota offer Twin Cities residents a quality shopping experience, fresh, locally sourced products and tried-and-true recipes to serve their families for every meal.
43 Arlan’s Market
62 Sam’s Food Stores
Arlan’s Market continues its expansion during its 25th anniversary year as it remodels its grocery stores in Texas.
Sam’s Food Stores’ food and other offerings, as well as the company’s dedication to local activities and charity work, make its locations vital members of their neighborhoods and more than just a convenience store.
32 Marsh Supermarkets
46 Dutch-Way Farm Market
Pennsylvania-based Dutch-Way Farm Market serves its community through quality initiatives, unique recipe offerings and excellent customer service.
48 Food Giant Supermarkets
Becoming an ESOP company fostered better commitment and nimbleness among Food Giant Supermarkets’ employees.
51 Miami Home Centers Miami Home Centers sets itself apart from big-box home improvement stores by offering the personal touch of service and unique, exclusive items.
54 Buy for Less / Uptown
65 Tobacco Superstore Inc.
With 88 locations, Tobacco Superstore has become one of the largest cigarette and tobacco retailers in the United States by meeting customer needs with the best prices possible.
68 Keith’s Superstores Providing fast and friendly service at its convenience stores and continuing a legacy that dates back for decades helps set Keith’s Superstores apart.
71 Weigel’s Weigel’s is updating its stores for millennials while holding onto the old-fashioned service and community involvement that customers come to expect.
Grocery Co.
74 Clark’s Pump-N-Shop
Buy for Less, Super Mercado and Uptown Grocery Co. serve the diverse population of the Oklahoma City metro area with fresh products and excellent customer service.
Building ties to its communities and investing in technology and facilities are part of the reasons why Clark’s Pump-N-Shop continues to grow. May/June 2016
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NYCWFF PREVIEW
Culinary Excellence
The ninth annual New York City Wine & Food Festival brings foodies together for three days of special events that benefit hunger-relief organizations. BY STEPHANIE CRETS
Many of NYCWFF’s events are returning this year, including Rachael Ray’s Burrger Bash and Whoopi Goldberg’s Chicken Coupe (right).
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The must-attend food and wine event of the year is quickly approaching. The ninth annual Food Network & Cooking Channel New York City Wine & Food Festival (NYCWFF) will take place Oct. 13-16 when more than 50,000 attendees can experience more than 90 food events throughout New York City, including special events in Midtown and Brooklyn. NYCWFF welcomes 200 partners and nearly 500 chefs, winemakers, spirits producers and culinary personalities to participate in the weekend’s events. NYCWFF offers a wide variety of events at different price points to fit anyone’s taste and budget. Some of its larger signature events take place at Pier 92 and include Giada De Laurentiis’ Italian Feast, Blue Moon Burger Bash hosted by Rachael Ray, a new event hosted by the cast of “Chopped” and Coca-Cola’s Backyard BBQ hosted by Bobby Flay and Michael Symon. In addition, returning to NYCWFF is the ever-popular Grand Tasting presented by ShopRite, but with an update this year. For the first time ever, fans of all ages will be able to access its celebrity-fueled Samsung® Culinary Demonstrations presented by MasterCard® via a special ticket option. “I’m excited about all of our new events this year, like the new evening event hosted by the cast of “Chopped” on Pier 92, our new partnership with People magazine, as well as hosting more events in Brooklyn – including working with new partners at VICE on the Best
NYCWFF PREVIEW of Brooklyn, hosted by Action Bronson,” Festival Founder and Director Lee Brian Schrager says. “Also, for the first time, we’re giving fans of all ages the opportunity to see their favorite Food Network & Cooking Channel stars on stage with the introduction of the Samsung Culinary Demonstrations Only Pass presented by MasterCard.” Many of the NYCWFF’s other returning events celebrate hot topics in the food industry, such as Tacos & Tequila hosted by Aarón Sánchez, Chicken Coupe hosted by Whoopi Goldberg & Andrew Carmellini – which moves to
Brooklyn this year – Rock ‘n’ Roll hosted by Masaharu Morimoto and Midnight Jazz Breakfast hosted by Carla Hall and Patti LaBelle. Even more new events include Haute Dogs & Champagne hosted by Daniel Boulud, an interactive Boiling Point game hosted by Guy Fieri, a food and football-centric afternoon party called Wingin’ It and Lucky Chopsticks: An Asian Night Market hosted by Andrew Zimmern. But it’s not all about sampling and experiencing the latest and greatest in culinary excellence. NYCWFF’s goal is to end hunger and raise money for Food
Bank For New York City and No Kid Hungry®. Since the festival’s inception, it has raised more than $9.5 million for the hunger-relief organizations as 100 percent of its net proceeds go to them. “The festival has something for everyone, and to fit any budget,” Schrager says. “Whether you’re looking for a large-scale tasting, more intimate dinner experience, educational seminar, late-night party or trendy brunch, the festival has an event to suit your style and taste buds.” For more information on the festival, visit www.nycwff.org. O
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FMI CONNECT 2016
Speed of Change FMI Connect returns to Chicago’s McCormick Place for its more than 12,500 attendees to experience trends and innovations in grocery retail. BY STEPHANIE CRETS Coming June 20-22 to Chicago’s McCormick Place South Hall, the Food Marketing Institute will hold its annual show FMI Connect: the Global Food Retail Experience. More than 12,500 attendees will walk the show floor, visiting 400-plus exhibitors showcasing fresh and perishable products, packaged grocery, frozen products, retail technology, store equipment and design, health and lifestyle and corporate services.
This year, FMI Connect has several new events and products to showcase. One of the most notable will be its new campaign “Everyone to the Table.” The industry platform is expected to explore all expects of the grocery business, especially the most profit-centric areas, such as fresh and prepared foods, private brands and health and lifestyle. “‘‘Everyone to the Table’ has dual meaning – at a literal level, it depicts the end-goal for retailers and suppliers to provide the inspiration and products that enable people to gather for meals,” says Margaret Core, vice president of marketing and industry events at FMI. “Figuratively, the proverbial table acts as a representation of what the event means for the industry – a platform for everyone to come together each year to prepare for the future and stay abreast of new efficiencies, trends, innovations and consumer engagement strategies.” FMI Connect has also evolved the
annual Supermarket Chef Showdown to simply Supermarket Chefs, an intensive two-day immersion experience for top culinary professionals in food retail and their respective executive counterparts to build a mutual understanding of the business opportunities. “The goal of this revamped event is to bridge the natural divide in thinking and build stronger working relationships between two critical management roles in fresh prepared – chefs and sales leaders,” Core says. In addition, attendees will experience all angles of omnichannel during FMI Connect’s all-new event called Pulse. FMI hopes the event provides actionable information and insights on leveraging technology to better service customers and increase profitability of the grocery retail business. Returning to FMI Connect is the Technology Pavilion, which will highlight new technologies to help consumers and retailers address disrupters in everyday life and day-to-day operations. New this year is the Smart Label Pavilion showcasing companies who are well positioned to assist brand owners with digitally communicating all the things consumers want to know about the products they use and consume, or the wearable and useable technology that will be on display in the Tech Zone to improve. “The speed of change has increased with diverse consumer culinary interests, dietary requirements, opportunities for fresh and prepared meals, demands on operational efficiencies, supply chain and of course, keeping and increasing customer loyalties,” says Doug Baker, vice president of private brands and technology at FMI. Plus, FMI Connect will continue to host Future Leaders @Connect, a leadership-focused program providing high-potential industry employees with supermarket-specific leadership skills and personal growth tools. FMI Connect 2017 takes place June 13-15 in Chicago. For more information, visit www.fmiconnect.net. O May/June 2016
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Upfront
Kelley Holland, CEO Chatsworth, Calif.
PENTHOUSE MAGAZINE
Living From the Top Penthouse’s new line of high-quality spirits is expanding the business and making the global brand’s luxury lifestyle available to the 99 percent. BY TIM O’CONNOR
A
s some in the adult entertainment industry struggle to respond to the disruption of the Internet, Penthouse is leaning
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on its DNA to remain relevant. Other publications may exile nudity from their pages and declare pornography as “passé,” but new Penthouse owner Kelly Holland
is embracing the company’s history of pushing the envelope. The longtime adult film director and former president of Penthouse Studios envisions a brand that can keep its nude photos while talking to readers about products alongside creating online and video content. Those areas all fit underneath Penthouse’s larger identity. “We are a luxury lifestyle brand but we are also a brand that is open to talking about sex and beautiful women,” Holland says. It’s a kind of lifestyle Holland that believes is becoming increasingly available to the masses. The connected world has made it so that anyone can afford limo service through ride services such as Uber or hire a person to pick up and deliver a latte from Starbucks through TaskRabbit. People today live in complex worlds. They put in 60-hour workweeks while taking care of a family. Those kinds of services have become necessary luxuries, but ones that are more attainable by the 99 percent. “We have to outsource a portion of our life where we didn’t used to have to do that,” Holland says. Penthouse’s mission is to find ways to connect its globally recognizable brand with the millennial luxury lifestyle.
Cultivating a Lifestyle The 2015 launch of Penthouse Spirits, a lineup of vodka, whiskey and fusion liquors, was an important step toward that goal. “We are about providing those luxury experiences and one of the most impactful ways we can do that is with brick and mortar,” Holland says. Penthouse is a 51-year-old brand that continues to evolve. If Playboy was a product of the 1950s and Hustler of the ‘70s, Penthouse magazine was emblematic of the Swinging ‘60s. Like Goldilocks’ porridge, Holland says Penthouse found the right balance of eroticism and class between its competitors. The company was bought by FriendFinder Networks in 2004. Holland, a former documentary filmmaker who began directing adult films in the 1990s, became the executive producer of Penthouse Films in the late 2000s. She managed the company’s broadcast operations, which operate 10 channels around the world, and grew the division into half of Penthouse’s revenue. Penthouse may be a global brand, but it’s one Holland says was underexploited. Holland formed Penthouse Global Media and acquired the brand from FriendFinder this past February. In her first few months at the helm, Holland and her team are experimenting and trying to figure out how to maintain the DNA of the Penthouse brand while expanding its market. “The core essence of Penthouse is luxury lifestyle for men and the women they love,” Holland explains. Liquor folds into that lifestyle. One of the things Holland has learned is that Penthouse lacked an experiential approach. The company does not operate its own stores, bars or restaurants and it has a limited presence on retail shelves. In a world of 7 billion people, Holland says millennials crave authentic experiences. They want to drink at bars May/June 2016
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Upfront
PENTHOUSE MAGAZINE
Standing on Its Own Penthouse Spirits is another component of the lifestyle the company embodies. Like Holland’s vision for a Penthouse pub, Penthouse Spirits is an authentic experience. The vodkas and whiskeys are produced by a 175-year-old distillery in the Netherlands, The Melchers Group, and brand marketing is handled by The Vault Spirits Co. and Inland Beverages is the brand licensee. The first three liquors – a vodka, a whiskey tequila and a Canadian whisky – were launched at the 2015 Adult Entertainment Expo in Las Vegas. Since then, a pair of cherry vodkas, called Libido Libations, were added to the lineup. Libido Libations features two liquors, one aimed at men and the other women, each of which is infused with natural aphrodisiac herbs specific to each gender. “There’s nothing like it on Earth that we know of,” Vault Spirits CEO Jim Elliott sys of Libido Libations. Elliott says that Penthouse has been involved in the support of the liquors but is willing to leave the branding, distribution and production of the beverages to the experts. “That’s the strength of Kelly Holland and her team,” he explains. “The fact that we’re [Penthouse] licensing to you but we’re also trusting you to maintain the high standards of our brand.” When creating Penthouse Spirits, Elliott says it was important to make sure the liquor stood on its own and was not dependent on the Penthouse name. It needed to be quality whiskey and vodka. The Vault Spirits Co. and 10
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“ ”
We are a luxury lifestyle brand but we are also open to talking about sex and beautiful women.
with 100 microbrews on tap, where the server can tell them every flavor they will experience and where those tastes come from. It’s why Holland is planning a pub tour of the United Kingdom to research ideas for a Penthouse pub. She envisions a British theme that taps into ‘60s and ‘70s, the period of “Mad Men” and “Vinyl.” “There is an incredible nostalgia for those times so I think cute girls in British schoolgirl outfits – you can’t go wrong with that,” Holland says.
Penthouse are positioning the drinks as a high-end spirits brand, crafted well and pleasurable enough to drink neat. The Penthouse Spirits line regularly receive ratings above 90 points at spirits competitions and Libido Libations earned the silver outstanding medal for exceptional taste and the bronze medals for packaging at the 2015 International Wine and Spirits Competition. Penthouse is about life on top, and Elliott believes Penthouse Spirits lives up to that idea. “We see ourselves as the brand that can extend that luxury experience to the masses,” Elliott says. The Vault Spirits Co. and Penthouse are promoting the spirits at events such as the MTV European Music Awards, Academy Awards and Grammy’s. “Once you have established a foundation it allows you to explore other opportunities to expand the brand,” Elliott explains.
Vault Spirits is strategically rolling out the beverages starting with the strongest liquor markets and getting retailers familiar with the product and its quality. Penthouse Spirits is now available in eight states and Europe, and can be also be purchased online through the Liquorama site. “The demand is what’s going to drive the brand,” Elliott says. “How you develop that demand is to build yourself success stories one state at a time and duplicate it going forward.” With a recognizable brand name backed by a high-quality alcohol, Elliott believes Penthouse Spirits can be embedded in the United States within the next two years. The early success and reception are an indicator that the line is realizing Vault Spirits’ goal for a high-end product and Penthouse’s desire to bring its lifestyle to the retail space. Already, Elliott says, the companies are planning to expand their relationship by introducing a few new flavors later this year. “Penthouse itself has recognized that what we’re doing on the spirit side is excellent for the overall brand equity of Penthouse,” Elliott says. “We’re working together on a sales and branding events timeline that will feature and highlight the brand both nationally and globally. Their acceptance of that has been encouraging.” O
COVER STORY
Modern
PHOTO: MARK MARTIN
Beatlemania Josh Wakely, creator, writer and director of Beat Bugs www.beatbugs.com Sydney, Australia
12
Original Netflix series Beat Bugs hopes to engage and inspire children all over the world through vivid animation, storytelling and new versions of Beatles songs, creating a new generation of Beatles fans. BY STEPHANIE CRETS
H
as your child ever dreamed about what it would be like to wander through strawberry fields forever, live in a yellow submarine or go on a magical mystery tour? Beat Bugs, a new, original Netflix series from creator, writer and director Josh Wakely, is bringing those dreams to life this summer through 3-D animation and the music of the Beatles for families all over the world. “It’s the greatest music catalogue of all time, and I knew they had messages of hope, love, community and peace,” Wakely says. “I thought ‘All You Need is Love’ is a great message to bring to children.” Beat Bugs will feature original characters living in an overgrown backyard, learning lessons and going on adventures, with a Beatles song tied to the theme of each episode. Children can experience the episodes in short bursts of 26 11-minute episodes or view 13 half-hour episodes, depending on their preference. The first season will be available this
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summer, with another coming this fall, just in time for the holiday season. “I’ve been a screenwriter and director my entire life, so I’m bringing the same rigor, quality control and craft of a live-action movie to this series,” Wakely explains. “Every episode has been crafted and poured over so that it lasts more than 20 years – the same way the Beatles music is ever-present in pop culture. We’ve taken those songs, made them really child-friendly with awesome animation and the musical storytelling of the Beatles. It is a beautiful combination and a series I believe in.” Wakely created the series with his Australia-based film and television production studio Grace, along with talented writers and animators in Los Angeles, Vancouver and Australia. Everyone involved in the series has worked for more than five years to bring about a show that Wakely hopes will last for decades to come. Netflix was chosen as the vehicle with which
“
BEAT BUGS
We are in the golden age of television, so you can bring that film-quality level of animation to television.
”
to launch the series because of its incredible global reach. “When the show is ready, Netflix presses a magic button and it goes out to 190 countries around the world on the same day, at the same time,” Wakely says. “With a network that has a reach like no other, it’s really powerful for me. Netflix allows the budget, resources and power of a showrunner like me to do things that could only be seen in cinema at best. “Now, we are in the golden age of television, so you can bring that film-quality level of animation to television,” he continues. “I want to bring that same level of storytelling craft and that same level of quality to children, and Netflix is the best way to do that.”
Key Piece
PHOTO: GRACE, A STORYTELLING COMPANY
The music of the Beatles was a key piece to Beat Bugs’ storytelling. However, acquiring the rights to the Beatles’ songs from the publisher was not a task to be taken lightly, as Wakely learned. He says he first thought it would take only a few months, but he worked for three years to acquire the rights and prove the show would be a successful product commercially and worldwide. “It was my full-time job at that time,” he recalls. “I was so passionate and clear it would be an extraordinary combination for children. Sony/ATV Music Publishing just understood the power of bringing this catalogue of music to children.” The next monumental task was to find the right record label to cover the Beatles songs. Republic Records’ film and TV department picked up on the buzz of the show as it was being shopped around to different studios and joined Wakely as Beat Bugs’ music partner. Republic Records selected P!nk, Sia, Eddie Vedder, The Shins, Regina Spektor and a variety of other big-name artists to cover the Beatles songs. Some of the songs featured include Help!, Come Together, Penny Lane, Yellow Submarine, Lucy in the Sky with Diamonds, Sgt. Pepper’s Lonely Hearts Club Band, With a Little Help from My Friends and Magical Mystery Tour. “We always look at ways to integrate our artists on the May/June 2016
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COVER STORY roster with any film and TV project that we are working on,” says Jim Roppo, executive vice president of marketing and commerce at Republic Records. “But those synergies must musically work in an organic fashion. With Eddie Vedder, James Bay and Of Monsters and Men, it just worked and those artists nailed their performances.” Wakely says the goal with the show was for every episode to reflect the theme and the music of a particular Beatles song, which is why the artists were just as important as the show itself. “We can never have an off day because we’re dealing with great material,” he says. “We have to make every episode spectacular, which is tiring but also deeply rewarding.” Republic Records has always been a company to push the boundaries and innovate into new areas, Roppo notes. Now, the company is working with Wakely and Netflix on the marketing and commerce front to promote, market and sell the new versions of some beloved Beatles songs. “[Beat Bugs] is so different and innovative; there is nothing on TV for children like it,” Roppo says. “It has this revolutionary relationship between amazing content, animation and storytelling with the music of the Beatles. I’m just thrilled for people around the world to finally see and experience this show. We have been working on it for a long time, now it’s time for the world to discover it.”
Extend the World As a children’s show on Netflix, Beat Bugs will have a huge worldwide reach, which means it’s ripe for retail and licensing opportunities. “The opportunity that exists with the show to create unprecedented stories that resonate with children is the same one that exists with retailers and merchandisers,” Wakely says. “You can make plush toys that sing or t-shirts featuring the characters. Beat Bugs is a lifetime opportunity – not just for me, but for various avenues. Extending this world and story and the possibilities of the show into high-quality merchandise across a range of products is a huge opportunity for everyone.” Licensing agency Centa IP saw the opportunity in Beat Bugs and jumped on it. The agency plans to bring products in categories such as toys, apparel and accessories, arts and crafts, consumer electronics, books and games to retailers everywhere. Beat Bugs products will launch in spring 2017 in the United Kingdom and North America, with a global rollout through 2017. “I don’t believe there is any other children’s property that has so many winning elements to it,” says Geoff Rosenhain, global licensing agent for Centa IP. “The biggest win is that we have secured the rights to use the music recorded for the program within a significant range of our products. This property is shaping up to having a deep licensing program. 14
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Beat Bugs will available for families around the world this summer through Netflix.
BEAT BUGS
PHOTOS: GRACE, A STORYTELLING COMPANY
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COVER STORY
The response from retailers has been very strong, with requests to launch exclusive and/or first-to-market products.” “There’s great depth of potential for storytelling, and we move across a whole bunch of different platforms with video games, play sets, toys and more,” Wakely adds. “There are many ways to tell this story that is inspired by Beatles music and there will be more to come.” While retail and licensing opportunities will provide more touch points and ways to engage with the Beat Bugs story, Rosenhain says now it’s about standing out from the competition. Centa IP has some of the best-in-class licensees already committed and excited about the opportunities. “Beat Bugs has the winning combination of amazing storytelling and characters that children can relate to, world-class 3-D CGI and songs by the greatest band of all time, performed by today’s hottest artists,” he explains. “In my opinion, it’s the most visually stunning kids’ TV show in the marketplace.”
New Generation After five years of carrying the weight of the show on his shoulders, Wakely is excited that Beat Bugs will finally be coming to the homes of millions of families this summer. “It was a big responsibility to have this once-in-a-lifetime catalogue,” he says. “People will see how we use that for storytelling and how it fits for children – it feels like a great magic trick we’re about to reveal.” In addition, Wakely says he’s excited to see how licensees develop the Beat Bugs world to connect with children. With five main characters that have distinct personalities going on various adventures, there will be something for ev16
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“
PHOTO: GRACE, A STORYTELLING COMPANY
Every Beat Bugs character has a distinct personality that comes through as they go on adventures to the music of the Beatles.
There’s a reason for the mania that surrounds the Beatles. Children love being around playful music.
”
ery child to resonate with. “I’m interested to see how other people such as merchandisers, retailers, video game creators and people involved in music education take the world I created and extend that storytelling potential,” he adds. With Beat Bugs’ release on the horizon, Wakely’s job is to ensure he’s delivering a high-quality show that people around the world will want to watch and enjoy. “Netflix has a huge amount of muscle, ambition and connections to put this out to the world,” he says. “I truly think the quality of animation is unprecedented at this point for TV. I know how many people worked to make that happen. There’s also a soundtrack coming out, and I’m making sure that all those mixes are perfect and our artists are perfect. There’s a quality team behind everything.” Wakely hopes the show will inspire a new generation of Beatles fans. “There’s a reason for the mania that surrounds the Beatles,” he says. “Children love being around joyful music and bright melodies. Bringing that to a new generation with Beat Bugs has been my life goal.” O
HARIBO 18 | HUSSMANN 22 | TNG 26 | ALLEGIANCE RETAIL SERVICES 28
Supplier
“It isn’t just the candy aisle any more. We do a great job getting into alternative channels with our products.” – Rick LaBerge
May/June 2016
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Supplier
HARIBO OF AMERICA
Glorious Gummis
HARIBO of America is continuing to raise consumer awareness of its brand through high-quality products and numerous strategic initiatives. BY ERIC SLACK
R Rick LaBerge www.HARIBO.com Chicago
emember to give thanks to HARIBO the next time you enjoy a gummi candy. The German-based company was founded in 1920 and made the first gummi candy in 1922. Having expanded from its German roots, HARIBO now has a presence in many countries around the world and is among the biggest fruit gum and licorice sweet manufacturers on Earth. “The company has a long history, and there have
With nearly 100 years in business, HARIBO remains dedicated to providing consumers with quality products at reasonable prices.
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been almost 100 years of HARIBO Gold-Bears,” says Rick LaBerge, who has been COO of HARIBO of America since May 2015. “The company strives for quality above all else, providing quality products at reasonable prices to consumers.”
Tradition of Excellence Today, HARIBO has factories in Germany and many other European nations, as well as a factory in Turkey and Brazil. The company has established a sales presence throughout Europe, the Middle East and parts of Africa, the Americas, Asia and Australia. The company’s existence in the United States extends back to imports by German food importers into German delis and small gourmet stores. Incorporated in the early 1980s in Baltimore, HARIBO of America has been bringing HARIBO products to the U.S. mass market for decades. “Gummis have gained in popularity, and we were
HARIBO of America early entrant in the U.S. market,” LaBerge says. “We continue to grow as U.S. consumers realize their love for the gummi category, and our products have a different look and feel, which helps to make us unique in the marketplace.” To be certain, the Gold-Bear fruit gummi product is the standard bearer for the HARIBO brand. HARIBO of America delivers products that appeal to both retailers and consumers. HARIBO’s products have proven their ability to outsell gummi competitors and many other non-chocolate chewy segments at the U.S. retail level. “One of our main goals is to keep Gold-Bears current and top-of-mind with consumers,” LaBerge says. At the same time that it is reaping the benefits of the strengths of the GoldBears product line, HARIBO also looks for ways to add to its offerings in the U.S. market. Recent years have seen the company bring on product offerings such as Sour Gold-Bears, Happy Cola and licensed Smurfs gummis. The most recent new product launch is the HARIBO Twin Snakes product, a combination of two connected gummi snakes that offer sweet and sour tastes. “Twin Snakes is our big product launch for this year, as we’ve been receiving a lot of positive feedback as they gain distribution at retail,” LaBerge says. “They can be pulled apart or eaten together, and they have a high play value. As an added benefit, the sour flavor is actually in the gummi and not in a sugar coating. That makes it a great product for moms to share with the whole family without getting sugar everywhere.”
East Coast Warehouse & Distribution East Coast Warehouse & Distribution is proud to be a preeminent leader of integrated temperature-controlled logistics services to the food and beverage industry. Its state-of-the-art facility strategically located in an overweight zone on the Port of New York/New Jersey, expedited U.S. Customs and Border Protection Exam services, and transportation capabilities offers a 4PL, end-to-end solution that is sophisticated and seamless. The company’s comprehensive approach, strong corporate values and commitment to customer service is why it boasts many of the world’s most recognizable food and beverage brands as customers, and why it has an average employee tenure of nearly 20 years. 20
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Room to Grow Altogether, there is a big world of HARIBO products already winning over the hearts of consumers around the world. The portfolio is full of different textures, shapes, flavors and consistencies. Some of these products are not available in the U.S., and HARIBO knows it must continue to work on understanding U.S. consumers to see what other products may make a mark here. “We do quite a bit of consumer research to understand how U.S. consumers view gummis,” LaBerge says. “We are constantly testing different products with consumers, which helps us make sure we bring out products that are meeting a real consumer need or desire.” The company has also been investing in advertising for many years in the U.S., with the newest campaign in 2016 that focuses on Gold-Bears and Sour Gold-Bears. Additionally, the company is working hard to ensure that HAR-
HARIBO of America
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We continue to grow as U.S. consumers realize their love for the gummi category.
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IBO products are available wherever consumers may buy candy. “Sometimes that means the typical outlets, but it isn’t just the candy aisle any more,” LaBerge says. “We do a great job getting into alternative channels with our products.” Another way the company has worked on improving its ability to compete in the U.S. is by moving its domestic headquarters from Baltimore to Chicago. The company started
that move in early 2015 and completed the transition late last year, all with a focus on meeting the needs of U.S. market today while also being in better position to anticipate the future. “This move demonstrates HARIBO’s commitment to our customers and our vendor partners to ensure our operational support grows along-side our business and delivers best-in-class service with regards to finance, supply, and customer service,” LaBerge says. “It also completes an important step in a broader growth plan.” Other ways the company is improving its service to the market include streamlining and re-evaluating its display program. HARIBO has enhanced its in-store promotional offerings, providing more display options that meet channel needs from size and count perspectives. “We continue to partner with retailers so we can bring product to shoppers in the most relevant manner,” LaBerge says. “Pack types play a big role, so we’ve expanded to offerings such as stand-up bags as we are taking a hard look at how retailers are merchandising candy and making sure our pack types meet consumer usage needs. We want to offer a variety of pack sizes that allow consumers the ability to purchase what is right for them; whether that is a multipack containing mini bags, a portion controlled count good, or a larger format for sharing,” he adds. Fortunately, gummi products are on trend currently. This is good news for HARIBO because the category is growing, but it also means the market is becoming a more competitive environment. To make sure the HARIBO name continues to be synonymous with gummi and candy excellence in the U.S., HARIBO is working on strengthening its Gold-Bears while also bringing new product to market. All the while, it is committed to partnering with retailers and providing exceptional product assortments. “HARIBO is a significant player in the worldwide candy industry,” LaBerge says. “We value our heritage, and we want to be nimble and flexible so we can listen to retailers, bring products to market quickly and be present wherever consumers think about snacking and buying candy. We want to be part of joyful moments for families and bring happiness to consumers.” O May/June 2016
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Supplier
HUSSMANN
Ahead in Innovation Hussmann is introducing new food retail refrigeration products and services aimed at improving the shopping experience and operating performance.
Digital technologies are changing the food shopping experience. Shoppers have access to more information to help them make their buying decisions.
Hussmann www.hussmann.com Bridgeton, Mo.
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or the past 110 years, Hussmann has been developing solutions that address retailers’ need to preserve and store fresh food. Innovation has been part of the company since its beginnings. Hussmann has always strived to utilize technology to meet the needs of food retailers and provide them with the right product. In 1917, Hussmann was the first to patent a salt and brine display case to keep meat cold in butcher shops. Working with Clarence Birdseye, the inventor of the flash freezing process, Hussmann introduced the first frozen food display case. And as supermarkets’ focus on prepared foods grew, Hussmann introduced the first curved glass display for service deli departments. More than a century later, Hussmann is still working with its customers to find the products, services and solutions they need to be successful. The compa-
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ny’s strategic objectives are aimed at helping retailers better understand the shopper, increase revenue by growing sales and improve operating performance to lower costs. The collaboration between the retailer and Hussmann is what sets the company apart from its competitors. Hussmann works closely with food retailers to understand their business, discover their challenges, determine goals and identify opportunities that are important to their business. “With the competition in supermarkets today, grocery stores are looking for new ways to attract customers,” Director of Business Development Mike Seals says. “It can be through pricing, merchandise selection, loyalty programs, visual displays or in-store eating areas. Supermarkets are thinking about how they can change to differentiate themselves from their competitors down the street and around the corner.” The food retail industry is going through many dynamic changes. The Internet has made information widely accessible to consumers and many shoppers now visit three to five stores to buy the products they want at the price they are willing to pay. The competition has changed as well. Whereas before grocery stores mainly competed against each other and specialty food shops, today’s market also includes big-box stores, convenience stores, dollar stores, drug stores and on-line ordering with home delivery. Shoppers are driving demand for fresher, healthier food choices and want those products available for immediate consumption. The shopping experience itself must be easy and convenient. Hussmann’s refrigerated display cases play an integral part in addressing today’s shopper behaviors. Hussmann’s products are designed to fit the footprint of a small local grocer and a major supermarket alike, with designs that make it easy and inviting for consumers to access the products they want and technology that ensures proper temperatures to maintain freshness and maximize shelf life. The company says its display cases are more flexible, connected, sustainable and convenient than competing products.
Hussmann Connected Shopping Digital technologies can help modern shoppers have a positive experience every time they enter a store. Customers generally come in with a strong idea of what they want and how much they are willing to pay, but the final purchase decision oftentimes is made at the store shelf. Retailers must find new ways to engage shoppers in an “experience” that will hopefully influence that decision such as directing their attention toward new products or services offered by the store increasing their brand loyalty. In addition, retailers must help communicate with shoppers seeking information, increasingly in a digital way. Hussmann is helping food retailers take on that challenge. In June 2015, Hussmann and Velocity Worldwide launched Darius for Retail™, a cloud-based system that engages customers along every step of the shopping experience: prestore, in-store and post-store. The system assigns a profile to every customer and then can send messages and offers to influence buying habits. Darius gathers personalized data about the shopper, their behaviors and preferences, and allows the store to reach out and engage with shoppers in relevant ways. A mother planning her daughter’s birthday, for example, might receive an email containing a discount for her child’s favorite kind of cake. Once at the store, customers connect to the location’s wi-fi network, allowing Darius to track customers throughout the store and send push notifications about products to their phone. After checking out, Darius will follow up on the shopping experience with surveys. The system’s goal is to improve the overall Honeywell shopper engagement experience while increasing As the foam blowing agent and refrigerant brand loyalty and shoptechnology leader, Honeywell is proud to collaborate with Hussmann Corporation. per spending. Hussmann’s conversion to Honeywell Solstice® Liquid Blowing Agent (LBA) in the foam insulation used for its commercial refrigeration equipment not only improves energy efficiency, it also significantly lowers global warming potential (GWP). Solstice LBA has a GWP of 1, which is 99.9% lower than hydrofluorocarbon (HFC) blowing agents commonly used and equal to carbon dioxide. Also, Hussmann’s transition to Solstice® N40 (R-448A), Honeywell’s reduced-global-warming refrigerant, further reduces energy consumption and lowers its carbon footprint. Solstice N40 replaces R-404A, R-507 and R-22 in refrigeration applications. With its line of Solstice products, Honeywell is delivering high-performance solutions that also help customers stay ahead of changing environmental regulations.
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Energy Efficient Refrigeration equipment accounts for up to 60 percent of a grocery store’s operating costs. Not only are Hussmann’s display cases designed with merchandising attributes to promote sales, but they are also central to helping retailers manage their operational costs. The last decade has seen myriad advancements in energy-efficient solutions in
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Shoppers today are looking for fresh, healthy foods to support their wellness and nutritional goals.
components such as LED lights, fan motors, modular coils, microchannel condensers and doors on medium temperature merchandisers. It is not enough to simply install more energy-efficient solutions, however, retailers must make the investment in maintaining their refrigeration equipment in order to receive the maximum operational performance and energy efficiency benefits. Hussmann is working to make that maintenance and efficiency upgrade process easier for retailers. The company performs retail optimization level II audits during which it conducts a full review and analysis of a retailer’s entire store envelope. Through those audits, Hussmann has made recommendations that range from process changes like adjustments to lessen the amount of continuously running water, to structural changes such as changing man or delivery doors. The company has also suggested equipment, lighting and other upgrades. In many cases, Hussmann recommends the retailer begin an ongoing service and maintenance program with a qualified refrigeration contractor that can check and evaluate the performance of the equipment in the store, identify issues and make repairs or adjustments before they become cost prohibitive or catastrophic. And the company is developing new digital technologies that will be embedded within the display case to diagnosis
with a lower GWP than commonly used R404A, which the EPA is removing from its list of acceptable refrigerant gases in an effort to curb emissions of hydrofluorocarbons (HFCs). R404A is widely used in the food retail industry and Hussmann is helping its customers find an acceptable like-for-like replacement that can be implemented without forcing retailers to change over asset inventory or manage multiple systems throughout their store portfolio.
Opening Up the Future
Hussmann service technicians can evaluate the temperature performance of a display case to maintain freshness and shelf life.
and notify when performance is outside established parameters. Energy efficiency has been the main focus of the food retail industry over the last 7-10 years. But today, many supermarkets and other food retailers have adopted sustainability goals as part of their environmental awareness. Goals often include solutions built around energy reduction, global warming potential (GWP), recycling programs, food waste reduction and environmentally friendly building. Hussmann communicates with food retailers to better understand their objectives in those areas and how it can help them find the right products, service or solution to achieve those sustainability goals. On its end, Hussmann is working with vendors and suppliers to introduce new technologies in its display cases and other products that are more energy efficient and sustainable. Suppliers like Honeywell are providing new synthetic refrigerants such as Solstice R-448A
The end of 2015 saw one of the biggest changes in Hussmann’s century-long history. Consumer electronics giant Panasonic purchased the company for $1.5 billion as a way to increase its B2B presence in the North American markets. This is not Panasonic’s first foray into the industry. In 2009, Panasonic purchased a 50 percent take in Sanyo, and purchased the rest of the company a year later. Sanyo was a Japanese-based electronics company with a commercial refrigeration products business it was trying to expand into the United States and other markets. Following the acquisition, the Sanyo brand was changed to Panasonic and the company is now recognized as the No. 1 commercial refrigeration supplier to food retailers in Japan. Panasonic’s synergies and understanding of the food retail business made Hussmann a good fit for the larger company. The purchase will help Panasonic with access to North American markets through the food retail industry while providing Hussmann with access to Panasonic’s digital technology enhancements for Hussmann products and services. The relationship will give Hussmann an advantage as the food retail industry moves toward digitization and adopts new technologies, allowing Hussmann to quickly integrate and adapt to the products and services its customers want. O May/June 2016
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Supplier
TNG
Branching Out
TNG aims to grow its services beyond magazine wholesaling, with new distribution and checkout programs for its clients. BY ALAN DORICH cery retailers and are merchandised in the appropriate categories across the entire store. “We have 300 items that fit in seven brands, [including] kitchen gadgets, bar ware, pet, cleaning, coffee accessories, and bath and spa items,” he says. TNG also provides front-end management services, which include building checkout racks, data collection analysis, surveys and audits. Additionally, “We’re now buying and selling top selling nationally branded items for [other] manufacturers, like OXO, Sistema and Blender Bottle,” Carter adds. He credits TNG’s success to multiple factors, including its owner, The Jim Pattison Group. The Vancouver-based holding company operates primarily in the United States and Canada in multiple industries, including automotive, advertising, food and beverage, and entertainment. “We’ve got a strong owner with a good financial balance sheet,” Carter explains. “We are committed to our long-term strategy and we’re able to withstand hurdles.”
TNG plans to continue growing to become a full-service retail solutions provider.
Looking to Grow
W Mike Carter, chief revenue officer www.tng.com Smyrna, Ga.
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hen people go to a grocery store checkout lane, they often look at the magazine rack for that last impulse buy. There’s a good chance that those magazines were put there by TNG, the largest magazine wholesaler in the United States. “We have 70 percent of the market share,” Chief Revenue Officer Mike Carter explains. “We deliver to 70,000 doors every week throughout the United States and Canada.” But magazines are only the tip of the iceberg for the company. Smyrna, Ga.-based TNG also provides merchandising and logistics services, and the distribution of general merchandise, beverages, packaged foods and snacks. The company also sells its own line of housewares and clip strip items, which were designed for gro-
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TNG is focused on diversifying, Carter says. Although the company was solely a distributor of periodicals for many years, the magazine newsstand industry is in decline. This can impact TNG in some unexpected ways. “If our sales are declining in a category, some people will attribute it to customer demand, but some may attribute it to our company’s performance,” he explains. “We realized we couldn’t have just a dedicated supply chain for magazines.” TNG also is willing to adopt new technology, Senior Vice President of New Business Development Jim Deighan adds. “In some ways, we’re catching up operationally, but we’re striving to deliver creative innovation solutions as part of our complete package,” he says. “We are in the process of solidifying strategic partnerships with organizations that will propel our value contribution to retailers and CPG customers alike.”
TNG TNG is enjoying success with its work beyond magazines, which includes distribution services for a major beverage company, Carter says. Previously, the beverage company used a quilt-work network of local beer distributors for its products, but has found more satisfaction with TNG. “They’ve found in TNG a national solution with more consistent execution and streamlined communication,” he says. “We’re a big player and they’re a big player, so they see us as a good fit.” The company is currently rolling out a checkout program for a dominant regional grocer. “They haven’t had new checkouts in their stores for over 10 years,” Carter says. TNG also recently completed the largest checkout rollout in another national grocery chain’s history. “We just finished placing 14,000 checkout racks in a 12-month period.”
Doing it Right Pattison Group has nurtured TNG’s philosophy of being focused on the customer, Carter says. “The owner, Jim Pattison, says he doesn’t want us to do anything that we wouldn’t want printed on the cover of our hometown newspaper,” he says. “We also are able to operate autonomously from the parent company and do what’s right for the customers.”
Deighan adds that the Pattison Group has created an entrepreneurial culture, as well. “We have to be thinking all the time about how we can change [or about] something that’s going to make us successful,” he says. He also praises Carter’s leadership in assembling the members of TNG’s team, who each have their own individual strengths. “Mike’s been great at putting that team together,” he says. Carter notes the company has added new team members each year. “What we are looking for are people that are entrepreneurial and experienced in the areas that we are Every Store Perfect looking to grow,” he says. Get and Keep Every Store Perfect like TNG. “They [give us] the cred- Poor field productivity, and imperfect shelf & ibility to effectively com- field visibility costs $1.75 Trillion annually. Empower your business by providing your team pete in these new areas.” TNG plans to keep ex- with the facts, focus, and follow up necessary for extreme execution and on shelf availabilpanding so that its maga- ity. For 15 years, TNG’s extreme growth and zine services become just demand for perfection driven results has one of several specialties. helped ESP to create the most powerful field “I see us being a full-ser- sales and service tools in the industry. Drive vice retail solutions pro- Perfection in your business by starting here: http://www.everystoreperfect.com. vider,” he predicts. O
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Supplier
Allegiance says its co-op remains strong because each store is member-owned and understands the needs of its neighborhood.
ALLEGIANCE RETAIL SERVICES LLC
Support System
Allegiance Retail Services provides family owned supermarkets with what they need to remain competitive and successful. BY CHRIS PETERSEN
F John Derderian, president and COO www.allegianceretail services.com Iselin, N.J.
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or more than 50 years, family owned supermarkets throughout New York, New Jersey and Pennsylvania have counted on the support of the Foodtown Co-Op, and the more recently (2012) formed Allegiance Retail Services. One of the largest retailer-owned co-ops in the region, Allegiance serves 24 members with nearly 100 locations combined. President and COO John Derderian says the co-op has been a stalwart supporter of independent supermarkets throughout its history, and it continues to find new ways to help its members compete in an increasingly crowded marketplace. With pressures coming from big-box department stores, online retailers and specialty grocers in ad-
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dition to the traditional chain supermarkets, family owned supermarkets need a support system now more than ever. Allegiance aims to continue being that support system for its current members and new members for a long time to come. Headquartered in Iselin, N.J., Allegiance offers its members all of the benefits that come with co-op membership, such as increased buying power, marketing resources and technological support. The coop works with some of the leading suppliers in the area to provide members with access to a wide variety of products at competitive pricing. Allegiance also offers its members more than 1,000 unique SKUs under the respected Foodtown brand.
Allegiance Retail Services LLC Even though the competition is strong, Derderian says the services provided by Allegiance are helping independent supermarkets hold their own and serve their communities. As the co-op continues to grow, Derderian says the core values of Allegiance will continue to be the driving force for its success and the success of its members. “We have a commitment to servicing neighborhoods,” he says.
Understanding the Marketplace Allegiance provides its members with extensive support ranging from advertising and marketing to IT and POS support. Nevertheless, Derderian says, the single biggest element to the co-op’s success is the hard work and dedication of its members as they work to serve their communities everyday. “The strength of our co-op is that each store is member-owned and they really dig in and understand the needs of their neighborhoods,” he says. “We give them our programs, they know what the neighborhoods are comprised of from a demographic standpoint and they try to service that.” Allegiance’s members belong to two distinct categories, urban and suburban, with their own distinct identities and needs. Serving members through this bifurcated model means Allegiance has the diversity and flexibility to serve just
about any type of member supermarket, but Derderian says it also means Allegiance faces distinct challenges every day. “The very thing that makes us successful presents some challenges,” he says. “It’s a challenge to merchandise and market to those two types of store classes week in and week out.” Fortunately for Allegiance and its members, the co-op’s flexible model makes it possible for members to receive the exact level of support they need regardless of their customers’ needs. Where many co-ops provide their members with the same marketing or merchandising program across the board, Allegiance understands that its members can’t do right by their customers with a one-size-fits-all approach. C&S Wholesale Grocers Intelligent Expansion Allegiance continues to For nearly 100 years, C&S Wholesale Grocers strengthen its ability to has been providing the Products, Value, serve its members, and Knowledge & Services to help Independent, Derderian says one of family owned grocery retailers succeed and grow. Today, we continue our legacy of the most important ways providing premier service to our indepenin which it is doing that dent retailer partners, with daily deliveries is through expansion. to thousands of grocery stores across the “We’re growing quite a country, and a full offering of retail support services for our customers to choose from. bit, and that helps the
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co-op in terms of leverage and scaling,” Derderian says. Rather than growing for the sake of getting bigger, however, Allegiance is focused on intelligent and measured growth that ensures the co-op continues to serve the needs of its existing members just as well as before while also taking on new members. Derderian says that getting bigger does nothing to serve the co-op if that means the co-op loses its focus on its mission. “We can’t focus all of our efforts on growth,” he says. Allegiance also is focused on ramping up its investment in IT to better serve its members, and the co-op recently started utilizing platforms including price optimization software from Revionics to provide its members with more accuracy and efficiency. “Every one of these new platforms is going to help our membership and our merchants to do the job better,” Derderian says.
Anticipating Growth Allegiance made a major acquisition recently when it purchased assets from the A&P Supermarkets chain, which filed for bankruptcy in 2015. Derderian says Allegiance purchased the 30
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Pathmark brand as well as the Greenway brand. Greenway is a private label brand for natural and organic foods, which Derderian says gives Allegiance a ready-made presence in the growing natural and organic segments. “We think it’s a real opportunity for customers who are currently priced out of the natural/organic market,” he says. Adding capabilities in the natural and organic segments will be important for Allegiance in the future as its members work to attract millennial shoppers. No matter how the demographics of their customers change in the near future, Allegiance will continue to focus on doing everything it can for its members, and Derderian expects continued success in the future. “I see some additional growth from a new member standpoint and within our existing membership,” he says. O
Imperial Distributors Imperial has been supplying HBW, General Merchandise and Seasonal products to supermarkets for over 75 years. We service over 3,000 retail locations in 27 states, and carry over 25,000 SKUs. We are proud to be a partner of Allegiance and its members.
MARSH 32 | ARLAN’S MARKET 43 | DUTCH-WAY FARM MARKET 46 | FOOD GIANT SUPERMAKETS 48 | BURNS’ FAMILY OF NEIGHBORHOOD MARKETS 52 | UPTOWN GROCERY CO./BUY FOR LESS 54 | IAVARONE BROS. 58 | KNOWLAN’S FRESH FOODS 60 | SAM’S FOOD STORES 62 | TOBACCO SUPERSTORES 65 | WEIGEL’S 71 | CLARK PUMP-N-SHOP 74
Retail
“We must also provide convenience, as the consumer is demonstrating a willingness to pay for additional preparation vs. doing it themselves.” – David Kuncl
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Retail
Founded in 1931 in Muncie, Ind., Marsh Supermarkets now has 72 stores located in Indiana and Ohio. 32
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Marsh Supermarkets
MARSH SUPERMARKETS
Standing Tall
A pioneering history of being the local supermarket of choice has Marsh Supermarkets poised to build off a strong legacy. BY ERIC SLACK
M
arsh Supermarkets is built on tradition and innovation. Founded in Muncie, Ind., in 1931, Marsh is celebrating its 85th anniversary in 2016. Today, the company’s operations include 72 stores in Indiana and Ohio, 38 of which David Kuncl have pharmacies. www.marsh.net “The Marsh family owned the comIndianapolis pany until 2006, when it was acquired by Sun Capital Partners, who continue to own it today,” Chief Merchandising and Marketing Officer David Kuncl says. “Marsh has primarily been an Indiana- and Ohio-based company, growing through multiple, small acquisitions. We’ve always been known as the local supermarket with a tradition of quality, service and innovation.”
departments all standing out as points of differentiation. All of the company’s fresh departments are focused on delivering quality and uniqueness across products, service and the overall eating experience. “Our meat programs are anchored by black Angus beef, as one of four retailers in the U.S. with U.S.D.A. ‘Certified Tender’ beef,” Kuncl says. “In 38 of the 72 stores, we also offer a full line of locally produced Angus beef, pork and chicken.” Kuncl maintains that, to his knowledge, Marsh Supermarkets is one of only four retailers in the United States that sells beef certified “tender” by the United States Department of Agriculture. “It is a specific grade that undergoes a shear test on the product to determine how ten-
Excellent Foundation Marsh Supermarkets has already carved out its place in history. The first package with a UPC scanned in a grocery store was in a Marsh Supermarket in Troy, Ohio, in 1974. That store still operates, and the scanner and package are in the Smithsonian. Now the company is looking to grow both through development of new stores and acquisitions. Marsh is focused on opportunities in contiguous geographies in its current market area. What has helped set the company apart historically is its expertise in fresh products. Marsh is known for its meat programs first and foremost, with deli, bakery and produce
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We’ve always been known as the local supermarket with a tradition of quality, service and innovation. May/June 2016
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Marsh Supermarkets
der it is,” Kuncl says. “It goes through a unique process during the harvesting of the animal that ensures tenderness in the prime cuts.” That level of quality extends to other products in the
meat department, all of which are cut in the store. “We offer a higher-grade product day-in and day-out than our competition in this market,” Kuncl insists. “We’re the only retailer in this area that has a full selection of locally produced beef, pork and chicken. We have a whole line of Indiana- or Ohio-raised meat produced primarily on small family farms.” Meat isn’t the only department that sets Marsh Supermarkets apart. Approximately half of Marsh Supermarkets’ bakery departments fry their donuts fresh each morning. “It’s a pretty noticeable difference in the overall flavor profile,” Kuncl asserts. “It’s an indulgent item – it’s not health food, but few people are eating donuts because of the nutritional profile.” The bakery departments also are known for their cakes. “Our cakes have been part of a lot of family celebrations over the years,” Kuncl notes. “We’re very proud of our decorators and their skill and ability to create special cakes for special occasions.” Additionally, the company has developed a diverse store
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We offer a highergrade product day-in and day-out than our competition in this market.
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What is common across all of our company’s locations is a focus on delivering a ‘north of center’ experience.
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Marsh Supermarkets base across its markets. Growth through acquisition has created a large variation in formats, from 12,000 to 90,000 square feet in locations ranging from downtown Indianapolis to rural Amish country in central Indiana. As a result, Marsh now serves all customer and community types. The
company is succeeding by customizing each store to the community it serves. “What is common across all of our company’s locations is a focus on delivering a ‘north of center’ experience that is anchored by elements such as better fresh products than the competition, better service and the most
convenient format,” Kuncl says. “Although our key competitors continue to build big stores, we really like the mid-sized conventional food store that can provide customers with a full selection in a convenient and efficient footprint that can be shopped effectively by time-starved consumers.”
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Competitive Environment As the company considers its future, it is careful to pay close attention to industry developments that are taking place in its market. Firstly, its markets have about 30 percent more grocery stores per million people than the average market in the United States. New competitors are continuing to enter the market, and existing competitors continue to deploy significant capital into the market. “More doors are chasing the same business today,” Kuncl says. “Between new capital and little market growth, we now have a very competitive marketplace,” he continues. “Amazon also has multiple distribution centers located in the Indianapolis metro region, and this is one of the areas that has two-hour 38
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Prime delivery. All of these things are making this region a great place to buy groceries. The competition makes everyone better, and we don’t see it letting up anytime soon.” Marsh plans to continue responding to this situation by competing on a number of differentiating points. This includes everything from fresh food quality and selection, promotional pricing and events, service, e-commerce Instacart home delivery and curbside pickup to convenient locations, meal solutions, better-for-you products across the stores and continued efforts focused on the improvement of its everyday pricing and store environments. “Our core competencies are fresh foods, service, promotional value, rewards programs and community involvement,” Kuncl says.
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Our core competencies are fresh foods, service, promotional value, rewards programs and community involvement. Invest in Success Not surprisingly, Marsh has been focused on key investments to support its strengths. In the digital arena, the company has launched a new website and digital apps, and it has invested in digital savings tools. These efforts include investing in Ibotta, iBeacons in all stores, inStream targeting at the point of sale and Instacart home delivery and curbside pickup. With iBeacons, Marsh Supermarkets have been equipped with transmitters called beacons - to wirelessly send special offers directly to customers’ smartphones based on their location in the store. “We were the first grocery chain in America to be fully beaconized in all our stores,” Kuncl maintains. At checkout, customized offers that are printed on receipts are targeted to
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individual customers by technology from inStream. Additionally, Marsh Supermarkets is participating in a pilot program for the ViVino app, which provides smartphones and tablets with access to a wide array of information and reviews about wine. Other technology investments are aimed at the back of the house. The company has invested in a new JDA store replenishment system, as well as a new enterprise data warehouse and customer data management tools. In addition, Marsh has invested into space planning upgrades to facilitate store-specific assortments. Product improvement programs are focused on areas such as its certified tender beef program; local beef, chicken and pork programs; expanded cut and prepared products in produce; new May/June 2016
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chicken and salad programs in the deli; and new breads in the bakery. Marsh Supermarkets is experimenting with the preparation and specifications for the fried and rotisserie chickens it produces in its deli departments. The company’s goal is to continue to improve the customer experience with fresher and healthier preparations. It also cooks up Noble Roman’s pizza in many of its stores and is working with that company on hot and refrigerated takeaway products. “Behind-the-glass” foods - such as salad bars and deli items including potato and pasta salads - are being improved to have cleaner labels while being healthier and tastier. Portion-controlled meals (such as Blue Apron) that need minimal home preparation are being provided by a local company called Fresh Artistry. “Cuisine explorers will continue to grow, and our ability to deliver international food options will grow,” Kuncl says. “We must also provide convenience, as the consumer is demonstrating a willingness to pay for additional preparation versus doing it themselves.” Store improvement projects are also on the table. “We plan to have refreshed and/or remodeled 52 of the 72 stores 40
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We have a lot of very experienced, highly caring associates who have spent a lot of time at the company. by the end of 2016, with the remainder of the stores touched by the end of 2017,” Kuncl says. Relationships with suppliers will be important as well. “Our main selling point is that we are local,” Kuncl says. “There is no other corporate approval you need when you do business with us. The decisionmakers are here and not in some corporate parent elsewhere. We can react quickly.”
Indiana Packers Corporation Indiana Packers Corporation is a fully integrated pork company, providing the freshest, premium-quality products to the food industry. Home of the Indiana Kitchen brand of premium pork products, Indiana Packers places a high-value on relationships with our employees, our Midwest community, and our partners such as Marsh Supermarkets.
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All these efforts – the remodeling, expansion and technology – are contributing to Marsh Supermarkets’ continuing success for the last 85 years, which Kuncl says will be celebrated with customers and employees in August. He attributes the company’s longevity to its employees. “We have a lot of very experienced, highly caring associates who have spent a lot of time at the company,” Kuncl emphasizes. “We have multiple generations that have worked for the company and many employees are friends of friends. It’s been a pretty good place to work for a lot of people for a long time. We are proud of the business we have built together.” Clearly, the challenges Marsh faces include an overstored marketplace, fast-casual dining, Amazon and recruitment/retention. Trends such as format May/June 2016
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We have to be the best at what we do, and we believe there is a clear spot for our proposition in this market.
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changes to traditional brick-and-mortar competition and the ongoing expansion of e-commerce, along with customers demanding better quality products and trending away from stocking the pantry in favor of smaller trips, are also complicating the market. Although these trends and challenges show no signs of dissipating, the company is confident that it will be able to compete. “We have to be the best at what we do, and we believe there is a clear spot for our proposition in this market,” Kuncl says. “We can compete effectively on quality, nutritional profiles and convenience.” O 42
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Retail
Randy Kitchen (left), store director, and Jake Mulholland, produce manager, work with the produce at the Schulenburg, Texas, store.
ARLAN’S MARKET
Mid-Sized Markets
Arlan’s Market continues its expansion during its 25th anniversary year as it remodels and upgrades its grocery stores throughout Texas. BY RUSS GAGER
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hose looking for evidence of the importance of independent grocers in Texas need look no farther than Crestview, a neighborhood of Austin. There, a neighborhood association closed off half the parking lot of an 11,000-square-foot grocery store founded in 1953 on the occasion of the owners’ retirement and the purchase of the business by Arlan’s Market, an independent grocery chain headquartered in Seabrook, Texas, near Houston. “There must have been 400 or 500 people who showed up,” President Ames Arlan estimates. “The family run grocery store is very dear to the community, so they really came out in full support and did
a really nice barbecue. The mom still worked here up until the last day – she’s 85 years old – and her sons worked here all their lives. One of the sons has been working there since he was 12 and he’s 65 now. So the entire family is retiring.” Arlan’s Market is in the process of remodeling the store. “It’s our smallest store, but in a really neat neighborhood,” Arlan says. “It’s going to be a great opportunity for us to add a lot of organics, specialty items and new refrigerated cases. Most of the homes were built in the 1940s and ’50s. People have lived here since 1950s and ’60s, and younger people are moving in.” Arlan estimates that half the homes in the neighMay/June 2016
Ames Arlan, president www.arlansmarket.com Seabrook, Texas
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Arlan’s Market
From left are Ronnie Prellop, former owner of the Crestview LGA in Austin; owner Ames Arlan; Supervisor Nick Arlan; and Store Director Chris Peters.
borhood have new owners who have renovated them. “We thought it would be a great opportunity to try something a little bit new and different for us,” Arlan declares. “It’s going to be a fun store. There are a lot of opportunities in smaller stores.” The company plans to add 50 percent more meat in the Crestview store, 110 percent more produce and 25 percent more dairy. The flagship Seabrook store – one of 19 Arlan’s Market locations around Houston and Austin– is experimenting with different categories of merchandise. “We’re already in the planning stages of adding a lot more organic and specialty foods,” Arlan says. “We’re going to expand the produce and add some of the supplements and different types of vitamins that health food stores have been adding. We will try to experiment with bulk that we’ve never done before and see if it works well for us. Maybe then we can take it to some other locations.” Acquisitions from retirement are not unusual for Arlan’s Market. That was the case in 2015 when the company acquired the Harlan’s group of five grocery stores. Arlan’s Market – whose stores range in size from 11,000 to 39,000 square feet – is just completing the remodeling of the last of the five stores with a new deli. Besides resetting the stores, Arlan’s Market usually expands departments, installs energy-efficient LED lighting and replaces freezer and refrigeration cases with more energy-efficient models. “A lot of these stores have cases that are 30 or 40 years old,” Arlan notes.
Not an Office Guy Arlan is a hands-on manager. “I’m not much of an office guy,” he concedes. “I really like to be in the store visiting 44
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Every single year, we try some new things just to keep it exciting so it doesn’t get stagnant.
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with the store managers and seeing how things are going. I get stir-crazy sitting in the office – we’ve got good supervisors and buyers who can handle all that.” Instead, he sometimes sits in the manager’s station of the Seabrook store after church lets out on Sundays to visit some of his old customers who have been shopping at Arlan’s Market for 25 years. “It’s fun to be able to spend some time in an individual store for a couple hours,” Arlan declares. Besides long-time customers, Arlan’s Market also has long-term employees. Michael Grant, vice president, has been with Arlan’s Market since the company started. Bobby Lopez, the general manager in the Hill Country division, was a bagger with Arlan in high school and worked for another company for more than 30 years before joining Arlan’s Market. Nick Arlan, Arlan’s son, has been working for the company since he was 12. Now 34, he is the general manager of Arlan’s Market Gulf Coast division and all company resets. “We’ve got some really good supervisors who are good with the community, employees and management,” Arlan emphasizes.
Arlan’s Market
The deli in New Braunfels, Texas, shows off a full selection of meats and salads.
Arlan’s Market has approximately 650 employees. The company encourages promotion from within for promising candidates. “Most of our management has been promoted from within,” Arlan maintains. But when Arlan’s Market needs a fresh outlook, it is not afraid to seek that outside the company. A promising management candidate from outside the company with experience in wholesale organic food has been hired to develop that area of the Austin market.
single year, we try some new things just to keep it exciting so it doesn’t get stagnant. We try to make it fun to shop, and combined with good customer service I still believe there’s a market for the smaller neighborhood grocery store.” O
25th Anniversary Arlan’s Market is celebrating its 25th year with special sales and a grand opening of a remodeled store. “Twenty-five years went by very fast,” Arlan marvels. “It’s hard to believe.” Arlan has learned a lot about competitive pricing during those years. “When we first got into business during the first two or three years, we thought we had to be the cheapest,” he recalls. “But as long as you’re fair with your prices, you don’t have to be the cheapest guy in town if you’re giving good customer service and not taking advantage of people. Convenience is value to a lot of people, and when people get off work, some of them would prefer to deal with a nice neighborhood store and not have to go through those huge stores.” Following the trends of customers is important, such as requests for more organic produce and meat. But in smaller stores, selection has to be limited to the top sellers in each category. Smaller, family owned and managed grocery chains such as Arlan’s Market have to choose their niches. “We can’t be everything to everybody, and we learned that early on, but we keep trying to retool the company,” Arlan insists. “Every May/June 2016
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Retail
DUTCH-WAY FARM MARKET
More than a Market
Pennsylvania-based Dutch-Way Farm Market serves its community through quality initiatives, unique recipe offerings and excellent customer service. BY STEPHANIE CRETS Jason Bennett, director of operations www.dutchwayfarm market.com Schaefferstown, Penn.
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hrough quality initiatives and top-notch service, Dutch-Way Farm Market always wants to do right by the customer. The company does that by serving customers in its three locations in Pennsylvania: Myerstown grocery store and restaurant; Gap grocery store, restaurant and hardware store; and Schaefferstown grocery store and restaurant – all under the Dutch-Way banner. Founded in 1972, Dutch-Way began as a farmer’s market that grew into a supermarket with a small, diner-style restaurant attached to the building. The current owners, Rich High, Cliff Snader and Jeff Snader, then purchased the Gap location in 1994 from the original owner, David Martin, and expanded to the other two locations in 2001. “When they expanded and rebuilt the new Myerstown location, they went out on a limb based on some other local stores that had a larger restaurant attached to it; that’s where we started doing buffets,” Director of Operations Jason Bennett explains. “They saw an opportunity and
Dutch-Way strives to do as much as possible in-house, including laundry, maintenance, cleaning and operating its own trucks for hauling.
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wanted to continue to expand how we do business. As that grew and became successful, that’s when I got more involved running the Myerstown location.” Adding a hardware store as part of the Dutch-Way brand was an opportunity that the company couldn’t pass up. Another company operated the hardware store previously, and Dutch-Way eventually bought it about five years ago. “We had the opportunity to purchase that business, and we were able to make improvements so we’re happily operating it,” Bennett says. “We had a store manager at one of our grocery store locations that had a background in construction, and we felt comfortable taking that business on with someone that would be knowledgeable.” But having a hardware store and restaurant as part of a supermarket chain is not the only unique thing about Dutch-Way. The company prefers to take control of all aspects of the business as one of its core values and does
Dutch-Way Farm Market as much as possible in-house, including laundry, employing a maintenance staff, floor and fixture cleaning and even operating its own trucks for hauling. The company prefers to employ people to perform those tasks rather than contracting outside the company. In addition, Dutch-Way prides itself on being a Christian-owned and operated business. The company supports a number of local churches and organizations, including Focus on the Family, Life Change Ministries, Susquehanna Valley Pregnancy Services and Global Disciples. “We try to run a good, God-honoring business,” Bennett says. “You will get genuineness from us and honesty if we’re not happy, but we’re also very reasonable and most of our partnerships would appreciate that. That’s one thing I’ve stayed at this company for: The owners are supportive of people who want to do good business in a good way.”
Value Added Customers are expecting fresh, local produce and other quality products from the Dutch-Way stores, and the company is gladly complying, Bennett says. “We’re evaluating what we do on a continual basis and looking to improve,” he notes. “We’re good at being critical of ourselves in the sense that we want to continue to do better each year and improve quality and the way we serve our customers. “This is attributed to our employees as well. The teams we have in place execute everything and look at what we can do better. We’ve been blessed with a lot of good people to help from the top all the way down. We have people that care.” Some of its quality initiatives come from the kitchen and other departments. The stores are committed to having a fresh-cut meat department and do not solely offer pre-packaged meat. Most everything is cut and processed in-house. Dutch-Way also offers a lot of value-added items, such as its own sausage recipes, gourmet burgers and other unique recipe sets for customers to purchase. Its bakery department is no different – everything is fresh-baked or homemade. It even recently purchased a donut maker so that bakers can prepare the batter and make signature donut items. “We try to provide value in our knowledge and pre-prepared items for people to take home,” Bennett adds. One of its most popular value-added sections is DutchWay Kitchens, which is part of the restaurant. Chefs make meals both to sell in stores and on the buffet line, like salads, soups, pre-prepared dinners and desserts. “Those unique things with our unique recipes set us apart,” Bennett says. “Also, we have an old-fashioned approach to customer service. Not every business understands that, but we value that highly. You can come into one of our stores and expect to get speedy service and everyone can answer a question.”
Committed Service Many of Dutch-Way’s customers come to the store thanks to word of mouth, so the company needs to ensure the next generation of shoppers also finds its way to its locations. It does this not only through tackling social media, but also by developing its employees so they remain with Dutch-Way for a long time and taking a vested interest in their career paths. “We’re taking more of an approach to identifying those leaders in the stores and pulling them in closer to catch the vision of the company,” Bennett explains. “We want them to be more connected with the company. Whenever there’s a missing connection to leadership is when we lose people. “So, whether that’s a dishwasher or bagger, or all the way up to a department or store manager position, it all comes back to that missing connection,” he adds. “We are committing to those things as opposed to just putting people in a random position.” Dutch-Way’s dedication to its employees is felt through how they treat the customers as well. “Our customer service is excellent,” Bennett says. “We feel good when that is recognized by the customer. Plus, we have our own products that people love and people are talking about and that’s exciting, too.” O
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Retail
Each store aims to provide a neighborhood feel by remaining responsive to local tastes and preferences.
FOOD GIANT SUPERMARKETS
Employee Strength
Becoming an ESOP company fostered better commitment and nimbleness among Food Giant Supermarket’s employees. BY TIM O’CONNOR
W Kevin Ladd, CEO www.foodgiant.com Sikeston, Mo.
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hen shopping at a Food Giant supermarket it is not uncommon to see a meat cutter bringing shopping carts in off the lot. That’s because as an ESOP (employee stock ownership plan) company, Food Giant’s associates share a vested interest in making the company succeed and therefore are more committed. “I believe there is no such thing as a small or unimportant job in a grocery store,” CEO Kevin Ladd says. “To be successful it takes the effort of the whole team pulling in the same direction.” Food Giant Supermarkets operates 108 locations in eight southeastern states. The 51-year-old company’s market ranges from Henderson, Ky., to the
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north, south to Woodville, Fla. Its grocery stores comprise several brands, including Food Giant, Piggly Wiggly, Cost Plus, Pick ‘n Save, Market Place, Sureway and Mad Butcher.
Neighborhood Feel Ladd attributes much of the company’s success to its ability to retain employees. Some people have been working for Food Giant for more than 30 years. “I know it’s an old cliché and old adage, but we try to treat our employees the way we want to be treated,” Ladd says. Being an ESOP company is a big part of why people have stayed with Food Giant. Employees began
sharing in the company’s profits in 2000. “By virtue of being an ESOP at Food Giant, your neighbors truly are the owners,” Ladd says. “It’s helped us a great deal with employee retention.” Because it’s an employee-owned business, Food Giant is transparent with its people. Division and store managers receive copies of the company’s financial statements and know exactly how well their stores are performing. Further, Ladd has an open door policy and encourages employees and managers to contact him with ideas. “Anybody in this organization can call me at any time. I’m more than willing to listen to them,” he says. Ladd understands that there are often alternative ways to get things done and letting people have a say makes them feel important to the overall operation. “We try to be creative and we want our employees to be creative,” he adds. As big grocery stores become more homogenized with the same products and aesthetics, Food Giant has differentiated itself by embracing its status as a neighborhood store. “We’re a big company but we’re not cookie cutter,” Labor Director Mike Riney says. “You can go into any store and it has a different atmosphere about it.” Locations range in size from 12,000 square feet to as large as 40,000 square feet. “We try to know many of our customers by their first name,” Ladd says of the approach Food Giant aims for. Stores are designed to create a cozy atmosphere that customers find inviting. “We still operate like a small chain even though we have 108 locations,” Ladd adds. Despite targeting a neighborhood feel, Food Giant is large enough to take advantage of economies of scale and drive lower prices for customers. Food Giant is able to create that neighborhood feel in its stores because of the way the company is organized. The company has 10 division managers that are each responsible for a region. Those division managers have the autonomy to operate stores according to local tastes and preferences. Customers along the Gulf Coast don’t tend to buy the same items as those living in Kentucky, Ladd points out, and division managers need to be able to accommodate those differences. “We don’t have a lot of red tape or bureaucracy a division manager has to go through,” he adds.
Big-Box Competition In many towns, the arrival of big-box stores shut down smaller and independent grocery stores. Food Giant doesn’t want to go toe-to-toe with the Walmarts and Targets of the world. Instead, it focuses on providing the best grocery shopping experience possible so that it can be the last supermarket standing and fill that niche. “We try to do what we do well,” Ladd explains. “We try to provide services at each store.” If a customer wants a different cut of meat, Food Giant can cut it for them. Try to find an employee willing to do that at the typical big-box retailer, where everything is prepackaged. May/June 2016
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Food Giant Supermarkets
Food Giant also offers more fresh and hot food options than its competitors. Ninety percent of its stores have a hot food deli and many have fried chicken programs. Many rural communities have few restaurant options so Food Giant often fills that hot meal role. Register lines don’t get stacked up eight-people deep because the company works to get customers in and out as quickly as possible. Ladd describes it as, “providing customers with the best service possible.” One of the biggest changes in recent years is the springing up of dollar stores. Chains like Dollar General are carrying larger selections of paper products, coffee, detergent, milk and produce – items that used to be exclusive to grocery stores. Food Giant combats that encroachment by educating consumers that product sizes are not comparable in many cases. The company also takes advantage of “deal buys” and other special pricing opportunities whenever possible. Food Giant continually invests in its stores to refresh the shopping experience. Ladd says the company typically earns a better return on investment when it remodels existing facilities rather than building new ones. The type of remodel varies greatly depending on the size of the store and the amount of work needed. Generally, Food Giant is moving toward more open floor plans and is looking for equipment and display cases that are more energy efficient. The company is using more bunker-style cases within aisles and is adding walk-in beer coolers. 50
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“We intend to control merchandising in our stores, rather than turning control over to our vendors,” Ladd says. “This is not an easy thing to do, but we feel it’s important we decide what is on our end caps and which products are allocated to the prime retail spaces.” Food Giant’s investment in the shopping experience coincides with a technology upgrade effort. A partnership with NCR Corp. is helping Food Giant streamline its procurement to reduce costs, and pass the savings on to consumers. A new scheduling program is also being tested at several locations that uses software to help store managers realign employees based on where the need is at different times of the day. Ladd explains that Food Giant is constantly exploring technology that can make the company more efficient throughout its operations. Food Giant’s future doesn’t necessarily lie in the number of stores it can open, but the value it can return to its employee owners. When the company does acquire a new location, Ladd says it looks for a store that already has a strong team in place, a good ratio of sales per square foot and favorable rent factors. After a buyout, Food Giant prefers to keep the store open during the transition and minimize disruption to avoid training customers to shop elsewhere. “We’re always on the lookout for new stores,” Ladd says. “We want to grow but we want to grow smart.” O
Retail
MIAMI HOME CENTERS
Find Your Niche
Miami Home Centers sets itself apart from big-box home improvement stores by offering the personal touch of service and unique, exclusive items. BY STEPHANIE CRETS
Miami Home Centers’ product and service offerings meet the needs of consumers, contractors and businesses in southern Florida.
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iami Home Centers might not be the biggest home improvement store on the block, but if a customer is looking to find an exclusive or unique item, they need look no further. Since 1959, Miami Home Centers has served southern Florida residents with four locations in Miami Beach, South Miami, Pinecrest and Tamiami, providing a convenient place to purchase home improvement products, while also serving contractors and businesses throughout the area.
Under the direction of second-generation President Dan Hitchcock Jr., it is now a complete home center with the expansion of its home dĂŠcor department and Benjamin Moore paint department. Its kitchen and bath showroom has been expanded as well, and includes decorative hardware and lighting on display. Hitchcock Jr. purchased the business from his father when he was in his early twenties, having worked in the store since he was 15. Now, with 48 years of industry experience under his belt, HitchMay/June 2016
Dan Hitchcock Jr., president www.miamihomecenters.com Miami
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Miami Home Centers
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We are always looking for new and creative items that only we’ll have and to keep doing what we’re doing.
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cock Jr. looks to improve the stores’ inventory while upgrading the business to serve e-commerce customers. Miami Home Centers offers its entire catalog of products on its website for business-to-business clients and a consumer-driven e-commerce site is coming soon. “We’ve been up to speed,” Hitchcock Jr. says. “We believe we have the newest and fastest, but as we speak technology is changing. Where it’s going to end up even two years from now is going to be different. I believe the industry is trying to be web-based and we are keeping up with that.” Despite the industry becoming more e-commerce driven, Hitchcock Jr. says that nothing can change the personal relationship you feel when you come shop at a store in person. Miami Home Centers strives to develop a personal relationship with each one of its customers so it can better serve their needs and show off all the exclusive items it has to offer. “We always try to stay current with everything new that’s coming out,” Hitchcock Jr. says. “We are always looking for new and creative items that only we’ll have and to keep on doing what we’re doing, along with our personal service.”
Changing Gears Miami Home Centers recently joined the True Value family to provide an extensive line of Benjamin Moore and Easy
Christmas in January
Every January, Dan Hitchcock Jr., president of Miami Home Centers, attends the Atlanta International Gift & Home Furnishings Market to purchase all the Christmas decorations he wants to sell in his store for the next holiday season. Because of the way manufacturing works overseas with unpredictability and long lead times, Hitchcock Jr. has to prepare months in advance to get all the items by the end of the summer. Once the store has its merchandise, Miami Home Centers hires a designer to decorate display Christmas trees with specialized ornaments and lights. “We give customers a basket so they can pick out their ornaments,” Hitchcock Jr. says. “We sell right off the tree. It’s upscale and a niche we focus on every year. Our customers want nice things for their tree.”
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Miami Home Centers Care paint, which are high-selling, popular paint lines in the home improvement industry. “People come in for a hammer, but then they see we have Benjamin Moore,” Hitchcock Jr. says. “That’s the one major area you can’t really buy online, so as a business competing with the big-box stores, you have to put all of your effort into that.” But Miami Home Centers didn’t join True Value just for the paint. Many independent companies join co-ops such as True Value so they can offer more name-brand products. Miami Home Centers’ former co-op wasn’t allowing it to capture all the profit of selling its co-op’s product, so it found a much better co-op partner in True Value, Hitchcock Jr. relates. This allows independent companies to sell True Value products in-store and via their companies’ websites without rerouting all sales to True Value’s website to nab the sale from the independent retailer. “If you want to be independent, you need to have your website up and start selling so you can capture all the profit,” Hitchcock Jr. explains. “So, this is why I left one co-op for another. True Value doesn’t do that.” Aside from well-known paint brands, Miami Home Centers offers customers some special products, such as a vast selection of items in its upscale kitchen and bath showroom,
high-end Christmas decorations, specially sized air conditioning filters and the top-selling Green Egg ceramic barbecue grill. Hitchcock Jr. says the mix of products today is completely different from what it was 20 years ago because Miami Home Centers is always moving with the times. “The moral of the story,” he says, “is in order to be successful in this industry, you have to find your niches no matter what it is.” O
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Retail
The company is dedicated to being an integral part of each Oklahoma City neighborhood, and it does so by remaining focused on service.
BUY FOR LESS / SUPER MERCADO / UPTOWN GROCERY CO.
Customer Obsessed
Buy for Less, Super Mercado and Uptown Grocery Co. serve the diverse population of the Oklahoma City metro area with fresh products and excellent service. BY STEPHANIE CRETS
H Hank Binkowski, president and CEO www.uptowngroceryco.com Oklahoma City
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usband-and-wife team Hank and Susan Binkowski have been running a series of grocery stores across the Oklahoma City metro area since 1988. They’ve gradually expanded over the last 28 years and now own seven Buy for Less stores, four Super Mercados, two Uptown Grocery Co. and two Smart Savers locations. Every store is different, catering to the demographic area it serves, but still maintaining its commitment to selling fresh, diverse and economical food products. “We take each location and marry it to the community it’s in,” President and CEO Hank Binkowski says. “In other words, we learn what our guests want instead of telling them what they’re go-
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ing to get. The results are that we have stores all over the demographic board with services reflecting what those needs may be.” The Uptown Grocery locations tend to be the most abundant in services with event planning, a floral business and catering services for weddings and wakes. In addition, they offer a plentiful amount of organic products, but customers can still find everyday groceries as well. It’s also become a place for a variety of people to spend time drinking coffee, having a glass of wine, attending a cooking class or even holding meetings. “If you were to walk into Uptown, you’ll see how I’m a designer and builder married to the grocery
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Each store is its own marketplace tied to the community it’s in and we try to be the best merchant there.
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guy,” President of Development Susan Binkowski says. “He’s an exceptional grocer and kills himself on price. We have this extraordinary extravagant building with luxurious low prices. You have this ‘ooh-ah’ building with comfy couches of white leather, like a hipster hotel. People wonder why we don’t charge more but it’s that investment perspective. We’re all about luxurious low prices.”
Neighborhood Driven The Binkowskis say they’re obsessed with their customers and want to be an integral part of each Oklahoma City neighborhood so each person feels welcomed in their stores. So, how do they attract customers who may not know what the varieties of stores have to offer? “That’s the million dollar question because we’re all creatures of habit,” Susan explains. “It’s amazing how you have that slice of pie of the community that will drive all the way across town more than 30 minutes away, or you could have folks that won’t go farther than two miles. My husband is the fiercest at having great prices and the hottest ads, but many guest still shop for convenience.” As people tend to be creatures of habit, the company is challenged to draw in new customers and make their grocery shopping easier overall via word of mouth, ads or its website. The Binkowskis emphasize that they’re not experts and are still learning more every day. “It’s so easy to default to what you know, but we want to do well by everyone that comes in,” Hank explains. “We are always welcoming and wow customers with something, whether it’s pricing or merchandising. You try to really be intuitive in what guests are looking for and that needs to be part of word of mouth. “This is a market focused on pricing, so we try to make a deep mission out of pricing as well. Each store is its own marketplace tied to the community it’s in and we try to be the best merchant there.” But both admit that sometimes they can make mistakes in execution. The important part for the company is to make up for it with excellent service and an even better experience May/June 2016
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Buy for Less / Super Mercado / Uptown Grocery Co.
The Binkowskis want their employees to find passion in their work because they are what make the business great.
on the next visit. “Our guests forgive us when we mess up,” Hank says. “We always preach that if you love us, tell us the bad news. That’s where you find respect over the years. We have people that tell us glowing, wonderful stuff and others that say, ‘Hey, you had an off day but you guys care and
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tried to make it better.’ We’ve spent 28 years in the Oklahoma City metro and people will still forgive us because we’re not perfect and we’ll make it up next time. “
Inclusive Team The employees are what make the business great, according to the Binkowskis. They are happy to hire anyone who is committed to serving the company’s diverse customer base. “We want to lead with our face and say that by investing in every community, everyone is important and worthy and deserving of the same things in every neighborhood,” Susan says. The company does this by giving second-chance opportunities to people such as those coming out of incarceration. Susan says the company adopts them as one of their own family members and partners with them, allowing them to re-develop their job skills and social relationships. “We’ve had so many extraordinary stories that would make you well up because it’s someone’s real life,” she continues. “Someone that shops with us will know a family member of the person we hired and tell us they’re ecstatic that this person got an opportunity and we weren’t prejudiced against them.” Creating a family oriented business means the Binkowskis are extremely hands-on in their management approach. Hank especially spends a lot of his personal time with new recruits, an unusual approach for a CEO. “Nobody steps foot on the floor until Hank has given them orientation,” Susan says. “If they leave feeling like we’re trying to change the world, that’s the wow factor. That comes from his investment of the time to speak to every single one of them.” “We really stress with our employees that we’re in the
Guests come to Uptown Grocery Co. to meet with their neighbors, enjoy a cup of tea, attend a cooking class or hold meetings.
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We always preach that if you love us, tell us the bad news. That’s where you find respect over the years.
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people business and we still like to maintain that we’re a family business,” Hank adds. “We have people passionate about what we do. Our fellow team members catch the vision of leadership. That’s something we’ve worked really hard at the last several years and it’s interesting to see all levels of leadership that’s grown up in our organization. It’s not positional, it’s from the heart. We’re fortunate and blessed to have some people that have the same vision we do.”
Something Special The company wants everyone to feel included because employees are an integral part of all of the stores’ success. “Hank and I don’t do this alone,” Susan explains. “We have passionate discourse, and it’s OK to disagree with us. That really allows us to see that you’re never going to get the best ideas if you
think yours are the best in the room. We’re imperfect leaders, and we’re a married couple. They’re fantastic people and we’re better for them. Thank God we don’t have to decide everything on our own.” The employee dedication all ties back to the company’s obsession with the customer. If they are passionate about their work, they can better serve the people and tailor that service to each neighborhood. “We have some of the best employees in the world,” Hank explains. “We have people that will walk across flaming hot coals to please a guest. They feel like they’re a part of something special, not just another retailer. We make a mission out of making leaders in our organization. We’re focused on the guest and even more focused on the employees that are with us because they can help fulfill the vision if they believe in it.” O May/June 2016
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IAVARONE BROS.
A Way of Life Serving Long Island for nearly 90 years, Iavarone Bros. offers a quality, healthy food selection, paired with a knowledgeable staff. BY STEPHANIE CRETS
Different types of customers shop at each Iavarone Bros. location, and the business is tuned into what they want.
Jonathan Iavarone, vice president of operations www.ibfoods.com New Hyde Park, N.Y.
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avarone Bros. ensures there’s an Iavarone in every one of its stores – and there has been for nearly 90 years. As a fourth-generation Iavarone working as vice president of operations, Jonathan Iavarone says “it’s a way of life for us.” After spending time in the store with his father since he was five years old, he had the opportunity to find his own path, but wanted to continue his family’s legacy. “It’s a lot work and time invested, but it’s something that’s rewarding,” Iavarone says. “We’re here, our ears to the floor. We hear customers and employees. We can make changes on the turn of a dime.
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It comes back to the pride and way we were raised. There’s always an Iavarone in the store. It’s not going through all these channels through upper management. We’re here and it’s easier to make decisions.” The company’s four Long Island locations are only about 10 to 15 miles from each other, so it makes managing them and being on the floor at all times even easier, especially since the stores are only about 10,000 square feet each. Plus, Iavarone notes that different types of customers shop at each location, so he’s tuned into what’s needed and wanted for each area.
Iavarone Bros. “We’re trying to accommodate the customer base,” he says. “It’s very self-rewarding seeing the business grow and coming up with new items, talking to the customer, seeing what they like and dislike. We try to evolve with our customer base and with the time. It keeps us on our toes.” While the company is always on the lookout for a new location to expand to, Iavarone says it needs to make sense for the company and the family name. “We think we have a large enough following,” he continues. “But considering it’s a family run operation, I only have so many family members to run the stores. We’ve had franchising offers, but we want to keep the same quality. I could open 10 to 15 stores tomorrow but is the quality going to be the same? We’d rather grow in an organic way.”
Healthy Options A major trend is healthier, fresher food options for customers, so Iavarone Bros. invested heavily in switching to antibiotic-free chicken, cold cuts and sausage and making a lot of fresh meals in its Iavarone Kitchen. “I have three little kids and my wife is picky about what goes into their systems,” Iavarone says. “You are what you eat, so we could’ve stayed with the cheaper chicken and made a bigger profit, but we’re looking at the longevity of 20 years from now – doing our due diligence and giving customers the best thing we can. The biggest thing is we’re buying top-quality produce and meat, using top-quality ingredients for a top-quality finished product.” Iavarone Bros. prepares more than 100 different dishes in its kitchen with 15 chefs in every store every day. The company tries to create healthier versions of all meals by using less sodium, more natural herbs and baking items rather than frying. Some of the most popular kitchen items are meatballs, lasagna and green salads, while the market sells a lot of specialty cheeses, fresh produce and quinoa. “We first started as a pork store back when my great-grandfather came over from Italy and now we’ve evolved with the times by offering fresh products and getting multiple deliveries every morning to keep things fresh,” Iavarone says. “We’re busy enough to move things very fast and keep reordering to keep things nice and fresh and tasty.” In addition, Iavarone Bros. produces and sells a lot of items under its own private label including tomato sauce, vodka sauce and marinara sauce. “We try to brand our name,” Iavarone notes. “I want to be in someone’s cabinet. Our brand means quality and it will remind the customer of where they got it.”
gest advantage. In a self-service world, the company strives to give every customer the personal touch. Customers end up knowing the butcher who cuts their meat, the produce clerk who sets out the variety of items and the store associate who can give them a recommendation. “Customers appreciate the one-on-one interaction,” Iavarone says. “You’re only as good as your employees. They’re a mirror of what you want to represent. And we want to take care of the people who take care of you. So we try to be a family atmosphere.” Iavarone Bros. services all types of customers from the everyday shopper to those who only come in a couple times a month. But it keeps people coming back for more with special promotions, offering loyalty points and constantly coming up with new prepared and semi-prepared items. “Lots of people want to cook but might not know what to make,” Iavarone explains. “We can meet them halfway. In the Long Island market, it’s not cheap to live and raise a family; usually both members of the household don’t have the time to cook. Who wants to be in the kitchen for three hours every night? If we offer things ready to go, customers have more family time, and being a family business we can appreciate that.” O
Personal Touch While the plethora of healthy options is a plus for Iavarone Bros., Iavarone says customer service is the company’s bigMay/June 2016
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KNOWLAN’S FRESH FOODS / FESTIVAL FOODS
For the Love of Cooking Knowlan’s Fresh Foods and Festival Foods of Minnesota offer Twin Cities residents fresh products and tried-and-true recipes to serve their families for every meal. BY STEPHANIE CRETS Knowlan’s listens to its customers and communicates with them to ensure they understand the upgrades being made to the stores.
W Lauri Youngquist, president and CEO www.knowlansmarkets.com www.festivalfoods.net Vadnais Heights, Minn.
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hat began as a dairy wagon in 1905 has evolved into a full-fledged supermarket company under the Knowlan’s Fresh Foods and Festival Foods banners. The company operates eight stores: six Festival Foods and two Knowlan’s Fresh Foods stores across the Twin Cities of Minnesota. President and CEO Lauri Youngquist owns and operates the chain. Marie Aathun, her sister is also an owner. Together, they have owned the chain since the late 1980s. After working as a cashier when she was younger, coming back and eventually taking over Knowlan’s was a natural fit for her. “I knew everyone that worked here, so I was very comfortable with the setting,” Youngquist recalls. Knowlan’s Fresh Foods are the company’s 20,000-square-foot legacy stores offering a smaller selection of fresh and local products. Festival Foods are the larger-format stores at 50,000 square feet – first opened in 1989 – that offer fresh products and expanded fresh produce, deli, full-service fresh seafood and meat counters. “We were focusing on fresh
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produce way before everyone thought it was the thing to do,” Vice President Jason Herfel says. “We reach out to growers and work with local farmers to buy the best in season. That sets the stage for the rest of the store merchandising and gives us the impetus to have the freshest, best product possible.” Thanks to this dedication to fresh products, Knowlan’s has won the Minnesota Grown Retailer of the Year award for five year in a row. “A lot of people talk about having locally grown product, but when we say it, we mean it,” Herfel notes. The stores are all about focusing on the local area and the majority of store associates live in the local community around the stores. In some cases, associates are third-generation employees for Knowlan’s. “The stores have a very personal feel,” Youngquist says. “Our staff knows the customers. We’ve got many employees that had their parents, brothers or sisters and now their children working for the store. With a fine, personal touch, our employees take care of the customer.”
Upgraded Experience Knowlan’s has been upgrading its stores to give customers a better shopping experience. The company has to be mindful of how this impacts patrons, however, because many of them have a sense of ownership of the stores. “A common comment is ‘What are you doing to my store?’” Youngquist says. “So, we listen, learn and communicate about changes along the way. For the most part, customers are energized and excited about what our vision is and what we’re headed towards. It’s a big investment to make those changes with the amount of equipment we have in our stores. We always try to come back with fresh and new services.” “We make changes while the stores are open,” Herfel notes. “We have very loyal customers that their families have been shopping with us for generations, and we don’t want them to have their shopping experience turned upside down. We think of it more from the customer perspective. We’re methodical and aware. A lot of them come back every day to see what we’re doing and how much progress we have made.”
In addition, Knowlan’s is meticulous in its merchandising and ensuring customers are aware of great meals they can make for their families. It pairs ingredients together to form recipes that have been created and tested by Youngquist in her own kitchen. She shares the recipes and photos on the company’s social pages. “We realized we could sell more products and please our customers more if we delivered on real-time live recipes and images from our homes,” she explains. Plus, it energizes the associates. Knowlan’s has held contests where associates in the company make recipes to be judged or to be used in the stores. “All across the company people come up with ideas,” Herfel says. “It’s a community effort and it’s fun.”
Family Feel Being owned and operated by a woman can create challenges in an industry that has been less progressive than others, Youngquist says. But she’s finding there are more women operating in executive roles in supermarket companies than ever before. Youngquist says Knowlan’s employees see her role as a positive for the company. “With the way we operate, we report to Lauri and there are no layers of management,” Herfel explains. “We look at our daily operations from a family perspective. We’re not building 100 stores a year. Every decision we make, it is like we’re spending our family’s money. We work with Lauri everyday; we’re not reporting to some entity. But in that sense, it makes it very personal, and we make decisions that are more realistic for our associates and customers because of that.” “We have open conversations among our leadership team, and we function like a family,” Youngquist says. “Everyone gets to voice an opinion. We will share family style meals in our kitchen. We’ll be sampling foods while discussing how to merchandise in the stores. We work hard at making sure everyone is part of the decision-making process.” Herfel agrees and say everyone in the company feels comfortable letting their voice be heard, which is a testament to the manageable size of the company and how it is able to deliver on its promise of fresh products and personal service daily. Knowlan’s looks forward to the future of the stores, focusing on social efforts and continued growth of online ordering and home delivery that it has been operating for many years. The company says all of its efforts tie back to Knowlan’s tagline: “Explore, Cook, Create.” “It’s kind of what everyone does in their own kitchen,” Herfel says. “Explore the pantry, cook something and create something your family wants to eat. ‘Food is Fun’ is another tagline we adopted in 2009 because food really can be fun, both shopping and cooking.” “All of us love to experiment with new items and put together some great-tasting food,” Youngquist adds. O May/June 2016
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Sam’s Food Stores are well known for their fried chicken, and the company plans to expand its food offerings in the next few years.
SAM’S FOOD STORES
Community Choice
Sam’s Food Stores’ offerings, as well as the company’s dedication to local activities and charity work, make its locations vital members of their neighborhoods. BY JIM HARRIS
S Naeem Khalid, CEO www.samsfoodstores.com www.samschildreninc.org Rocky Hill, Conn.
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am’s Food Stores locations are more than just convenience stores – they’re an important part of the communities they serve. “We offer good service in a comfortable environment that people can walk to and from,” CEO Naeem Khalid says, noting stores are located on major streets near residential neighborhoods instead of along highways. Founded by Khalid in 1992, the company now operates more than 200 stores across the East Coast under the Sam’s Food Stores and DB mart brand names. The company – which remains owned by Khalid and his family – also operates a tobacco specialty shop, Smoker’s Discount World. In addition to offering people a place to fill up
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their gas tank or grab a bite to eat, Sam’s Food Stores also serve the community by regularly sponsoring local activities including baseball teams and community runs. “We think interacting with our neighbors is very important,” he adds. The company a few years ago also established Sam’s Children Inc., a nonprofit organization that raises funds to assist children with serious illnesses and their families. The organization helps more than 100 families annually in a variety of ways. The organization’s activities include paying a month’s rent for a single mother of a child born prematurely with severe cerebral palsy, providing a posititioner chair for an eight-year-old boy with a feeding disorder, purchasing a refrigerator for the
Sam’s Food Stores parents of a child with cerebral palsy, supplying a laptop computer for a 16-year-old boy who is wheelchair bound, and providing 1,500 diapers for twins born prematurely who spent several months in an intensive care unit. Sam’s Children Inc. is governed by an all-volunteer board of directors comprised of business and professional people.
Fast and Easy Food is one reason Sam’s Food Stores are popular destinations in their neighborhoods. Many stores offer Sam’s Fried Chicken, a company house brand that has been a staple for the company since it opened its first store. Fried chicken is prepared in-store. “We’ve become pretty well-known in many of our locations because of our fried chicken,” Khalid says of the brand. The company plans to greatly expand its food offerings in the next few years. Sam’s Food Stores in July will open the first store of a new retail concept that will greatly emphasize food. “The traditional convenience store offers 80 percent convenience and sundry items and maybe 20 percent food,” he adds. “We want to reinvent our convenience stores by opening a concept that offers 75 percent food and 25 percent traditional convenience store items.”
The as-of-yet unnamed concept will offer a range of breakfast, lunch and dinner options including fried chicken, salads and sandwiches as well as international foods such as sushi and Mexican dishes. The company’s goal is to open 15 stores under the new concept before the end of 2018. The expansion of Sam’s Food Stores’ food offering addresses what Khalid consid-
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ers a major need of many of its customers. “Fewer people are cooking at home for their families, and there are many people who are single or have small families,” he says, citing national retail and consumer trends. “We want to offer them something that’s ready to eat and easy to pick up and take home with them.”
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Investing in People Khalid attributes the company’s success to not just its food selection, but also its friendly staff. “We invest in our people,” he says. Sam’s Food Stores offers extensive training programs to managers and other staff. “I believe most of our people are naturally talented, but we want to train them and improve their work skills and overall performance,” Khalid adds. Training emphasizes customer service. “We truly believe the customer is always right,” Khalid says, noting that managers and other staff are trained to resolve customer concerns and complaints. The company enjoys a low turnover rate, which Khalid says is a reflection of its family oriented atmosphere. “We don’t have a big corporate feel,” he says. “People here are not a number; anyone can walk into any department to get information and answers. “People are not afraid to ask or say things here,” Khalid adds. “If they have an idea or feel there’s something here that needs to be, they don’t have to wait three weeks to get an answer; we make decisions very quickly.” Sam’s Food Stores also enjoys long-term relationships with many of its vendors, which include gas suppliers Citgo, Valero and Gulf. Other key suppliers include Guidas Dairy, Brian-Thomas Candy and Tobacco and Core-Mark, which recently purchased longtime grocery vendor Pine State Trading Company. “We don’t often change vendors,” Khalid says. The company’s employees and vendors will play a large role in Sam’s Food Stores’ future, which could include geographic expansion. Khalid hopes to expand Sam’s Food Stores into the southern United States, where it would be able to purchase larger plots of land. This would enable it to build stores larger than its typical average of 1,800 to 3,000 square feet, he adds. O
Retail
TOBACCO SUPERSTORE INC.
A Super Success
Tobacco Superstore has become one of the largest cigarette and tobacco retailers in the United States as it meets clients’ needs with the best prices. BY ALAN DORICH
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obacco Superstore Inc. creates a friendly atmosphere in each of its locations, CFO and COO Joe Marelle says. In fact, some customers frequent its stores because they are used to its employees’ friendly faces, he says. Those employees not only wait on the customer, but go the extra step of asking them about their day. “[That’s true] especially in our small town stores,” Marelle says. “We try to create a neighborhood atmosphere for the adult consumer.” Based in Forrest City, Ark., Tobacco Superstore has 88 locations in four states that sell cigarettes, vapor and electronic cigarettes, premium cigars, pipe tobacco, moist snuff, food and beverages. Founder David Cohn founded the company in 1993 with a vision of opening the largest cigarette and tobacco store in the South. Since then, Tobacco Superstore has become one of the largest cigarette and tobacco retailers in the United States. That has been achieved, Marelle says, by meeting customers’ needs with the best prices possible. “With our volume, we try to take advantage of deals and promotions, and try to pass on as much as we possibly can to the customer,” he says, noting that the company also stays current with products. “The technology has become very advanced with vapor/electronic cigarettes and other nicotine delivery products,” Marelle says. “So staying ahead of the curve and being able to price it correctly is our main focus.” He also credits the company’s vendors, which include Swedish Match North America LLC. “Not only are they great people to work with, they identify niches in the market and assist in executing strategies to boost sales,” he says. “As a result of the collaborative efforts with Swedish Match, they have assisted in helping us improve our cigar, moist snuff and snus presence,” Marelle says.
Back to Basics Marelle joined Tobacco Superstore in 2011 after working for Ernst & Young’s capital advisory group. During his time at the firm, he helped sell the Cohn family’s wholesale business.
Tobacco Superstore enjoys strong sales by having what consumers want and merchandising products where they are easy to see.
When David Cohn died in 2011, his brother, Allen Cohn, asked Marelle to join Tobacco Superstore as its CFO and COO. “I’ve been running it ever since,” he recalls, praising Cohn. “Allen’s confidence and faith in me was flattering from the beginning and has continued to help motivate me to ensure Tobacco Superstore maximizes our potential.” Marelle helped implement changes that led to a boost in sales. “When I first started, we had to do a lot to evaluate ourselves,” he recalls, noting that the company looked at its SKUs and categories to make sure it was pricing and merchandising items correctly. “We got back to the basics and we looked at where we should be doing better.” One example, he notes, was moist snuff products, which were experiencing a decline in sales. “Since then, we’ve done a fine job [selling them],” he says, noting that the company enjoyed double-digit growth in his first few years and has experienced solid growth annually ever since. “A lot of it involves having what the customers want, having it merchandised where it’s easy to see May/June 2016
Joe Marelle, CFO and COO www.tobaccosuper.com Forrest City, Ark.
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and beating competitors on price,” he says. “Those have really contributed to our increase in moist snuff.” The company also focused on pipe and roll-your-own tobacco, which led to the formation of Ignite, its own private label brand. “We’ve put a lot of effort into that,” he says, noting that Ignite leads its category in the stores. Tobacco Superstore continuously invests in technology, including the recent creation of its sales database. “We can look at what every store is selling by line item in terms of quantities and dollars,” Marelle says. With this data, the company can find areas where its stores can improve in terms of managing inventory, internal controls and identifying errors. “Those are always things you’ve got to keep an eye on,” he admits. “It’s allowed us to enforce and monitor those controls. Two of our IT personnel, Gary Whitlock and Taylor Stewart, have worked Swedish Match well in helping us.” It’s an honor and privilege to be a partner Tobacco Superstore has of Tobacco Superstore! Joe Marelle and his created a culture where team have a single minded focus to deliver employees help it grow. what many companies just talk about; excepWhen it implemented tional customer service, superior selection controls to analyze its and the lowest prices; it’s what separates them from the competition. We look forward business, “Our employees to working together for years to come. not only helped enhance Swedish Match develops, manufactures, our ability to get inforand sells quality products in the product mation, but also the way areas of Snus and Moist Snuff, Other Tobac[we] look at it,” he says. co Products (Chewing Tobacco and Cigars). Some of our well-known U.S. brands include Those team members Red Man, Longhorn, Timber Wolf, General, include Account ReceivGarcia y Vega, Game and White Owl. able Supervisor and Of66
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fice Manager Melissa Douglas. While she required some training early on, “We’re at a point now where she can pretty much create a lot of reports [from] data and analyze it,” he says. Marelle also praises her accounting skills. “There’s a lot of money tied up in receivables,” he adds. “She does a great job of making sure we maximize and collect on those funds. She has been invaluable to our success.” He also praises Human Relations Manager Tracy Webster, who helped the company adjust to the Affordable Health Care Act. “In the retail industry, [it has] created a lot of challenges,” he says. Webster ensured “that we got a policy that met all of the standards,” Marelle says. “[We’re] monitoring our employee hours to make sure that we’re within all the guidelines and doing the best that we can.”
Lean Growth Tobacco Superstore plans for expansion, but “we want to be lean with growth,” Marelle asserts. “If I had a choice to open two great stores as opposed to five average ones, we’d go with the two great ones.” The company also is open to reinventing itself. For example, if customers start to choose vapor products over regular cigarettes, “We’re going to focus on doing that,” he says. “There’s other product expansion opportunities that we’re definitely going to look at,” he says, noting that Tobacco Superstore is considering following in the footsteps of its convenience store competitors and possibly experimenting with items such as hot food. “I see us doing that in some of our stores in the future and growing in that category,” he says. “All of those things are going to play a huge factor in our long-term growth.” O
Retail
KEITH’S SUPERSTORES
Southern Charm
Providing fast and friendly service at its convenience stores and continuing a legacy that dates back decades helps set Keith’s Superstores apart. BY ERIC SLACK
Keith’s Superstores strives to deliver the best-possible experience to its customers, and adapts its stores to the needs of its areas.
Keith Saucier www.keithsuperstore.com Hattiesburg, Miss.
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eith’s Superstores has been a growing convenience store chain in Mississippi since its debut in 1996. Although the c-store brand is fairly young, Keith’s Superstores has been building off of the legacy of Big “K” Oil Company – now KeithCo Petroleum – which dates back to 1967. “We feel we have become a leader in our market, mainly because we do our own thing,” owner and President Keith Saucier says. “We do not compare ourselves to others. Instead, we strive for the best possible experience for our customers. We adapt for the needs of our areas. Some desire food, and others desire fast and friendly service.”
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Living History The story of Keith’s Superstores stretches back to roots in the late 1960s, and is connected to previous company names such as Hattiesburg 66 Oil Company and then Big “K” Oil Company. During those early years, the company operated as a sideline to a general store in Baxterville, Miss., servicing three full service stations in the Hattiesburg area. By the 1970s, the Baxterville general store had been sold and the company office and warehouse moved to Hattiesburg. Operating without the general store led the company to focus on growth pursuits, acquiring business with full service stations operated by independent dealers in small towns. As the
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We feel we have become a leader in our market, mainly because we do our own thing.
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marketplace became overpopulated with full service stations, gas margins and volumes shrunk, which made it difficult for the full service market to continue as it had in the past. In 1972, the company installed its first pumps in front of a food store, which led to more competitive pricing. Successfully weathering the storm of the gas shortage in the mid1970s, the company began to expand through the installation of gas facilities at convenience stores in 1975. In 1977, the company started purchasing gas from Gulf Oil Company and changed its name to Big “K” Oil Company. It continued emphasizing growth through the installation of gas facilities at convenience stores, and longer hours of operation and more competitive pricing led to increases in volume. By the late 1970s and early 1980s, the company remodeled and rebuilt older units, and the world of self-service gas had taken hold. It also started putting more emphasis on aesthetics, such as ensuring that facilities were well lit, clean, modern and attractive. In 1988, Big “K” had become a Chevron Jobber. By 1992, Big “K” served approximately 65 dealers in the southern and central regions of Mississippi and into the southern region of Alabama. It operated 14 salaried units in 1992 and expanded to the Poplarville area the same year. The company grew to 19 salaried units, before selling off one leg to another company in 1999. The Keith’s Superstores operation began in 1996, and Big “K” changed its name to KeithCo Petroleum in recent years. In 2004, KeithCo became a Shell and a Texaco jobber, which opened new doorways for the company in Mississippi, Alabama and Louisiana. Today, KeithCo supplies gasoline and diesel to Shell, Texaco and Chevron branded locations in the three states, as well as servicing numerous unbranded locations. Additional parts of the KeithCo family include six Huddle House locations, two Variety King locations, and JRB Grocery. It also has two trucking companies with more than a dozen 18-wheelers, a Mardi Gras company, and three bulk plants with expectations of greater growth going forward. As for Keith’s Superstores, it has grown to include 29 locations in southern Mississippi. May/June 2016
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We are ever growing in the South, as our aim is to be the South’s fastest and friendliest place to shop.
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“We think the reason that we have been successful is because of our customer service,” Saucier says. “We operate 29 stores, and although we may sell the same products as others, we think we do it friendlier and better. We think our people are our calling card. Our goal is to strive for a positive experience for every customer.”
Moving Forward
Keith’s Superstores is working to remodel some of its locations, with particular attention on updating its bathrooms.
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Keith’s Superstores has plenty of reasons to be proud of its corporate heritage, but it also understands the importance of maintaining an ability to adapt. Challenges such as hiring and retaining good people, and dealing with increased health insurance costs, are the kinds of issues that Keith’s Superstores is always looking to deal with in a proactive manner. Additionally, the company is regularly looking to ensure that its footprint is growing at the right pace. The company opened new stores in November 2015 and March 2016, and the construction of a 30th location should be starting soon. Keith’s Superstores is also looking to remodel some of its existing locations. “Improving our bathrooms has been one of our goals for 2015 and 2016, as we think it is important to be updating our restrooms,” Saucier says. “We also have a new director of operations, and he has been great for us. He is like a breath of fresh air with new ideas. Our employees love the change, and I think our vendor relations are better.” Speaking of vendor relations, Keith’s Superstores sees organizations such as Chevron, Golden Flake and Imperial Trading as being instrumental to its success. For example, Keith’s Superstores says Chevron took good care of jobbers 10 years ago during the difficulties caused by Hurricane Katrina and that they continues to take care of jobbers now. Having reach the 20th anniversary of Keith’s Superstores in 2016, there is plenty for which the organization can be proud. At the same time, Keith’s Superstores and the entire KeithCo family is looking forward to many more decades of success. “We are ever growing in the South, as our aim is to become the South’s fastest and friendliest place to shop,” Saucier says. O
Retail
Weigel’s strives to be a premium store, as well as customers’ neighborhood store.
WEIGEL’S
Value Driven
Weigel’s is updating its stores for millennials while holding onto the old-fashioned service and community involvement that customers expect. BY TIM O’CONNOR
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o be a manager of one of Weigel’s Tennessee convenience stores, one must first be a Weigel’s employee. The company does not hire outsiders to run its locations. That restriction is one of the ways Weigel’s ensures its stores adhere it its customer service standards and rewards employees who embody its culture. Weigel’s operates with a servant leadership philosophy. “We’re nothing without the team members that work in the store,” President Ken McMullen says. “They’re the heartbeat of the company.” Weigel’s executives see their job as to support the in-store employees. From the first day on the job, Weigel’s workers are instilled with the idea that they are one of the most important pieces of the company. If they come to Weigel’s with the mindset of making customers happy then they are in the right place, McMullen
adds. “We really believe in our team members and they have a high level of empowerment to do what they need to do to service the customer. Weigel’s prides itself as a convenience store company with old school values and a new school approach. “We are a premium store but we’re also your neighborhood store,” Charlotte Havely, director of marketing, says. “There’s a stereotype when it comes to a gas station. We defy that.” Every call to the company is still answered by a live person, a sign of Weigel’s commitment to customer service. At the same time, the company has invested in mobile apps and a loyalty program befitting of the digital age. Keeping up with its customers has been a key tenet of the company since it was founded in 1931. Back then, Weigel’s was a milk producer with four dairy cows on a 600-acre farm selling raw milk in May/June 2016
Bill Weigel, CEO www.weigels.com Powell, Tenn.
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10-gallon cans. William Weigel Sr. began bottling pasteurized milk in 1935 and the company soon built a home delivery service. By the middle part of the century women began entering the workforce and the home-delivery business eroded without anyone home to receive the milk. The Weigel’s responded to the market shift by opening Jug O Milk, a drive-in milk depot, in 1958. Current CEO Bill Weigel expanded on that idea when he opened the company’s first walk-in milk store in 1964, which became one of the first convenience stores in Knoxville, Tenn. The convenience store business has grown steadily in the ensuing decades. The company that had four employees in 1958 now has about 850 team members spread out over 63 stores, a dairy processing facility and a bakery. Despite those changes, it continues to be owned by the Weigel family, now in the fourth generation. The company is celebrating its 85th anniversary with a campaign focused on surprising and delighting customer by introducing new products such as a line of premium chocolate bars made in the United States. “We are an innovator in our market, continually overhauling the current model to satisfy our evolving customer expectations,” Bill Weigel explains.
Community Stores Much of Weigel’s success in building a customer base can be credited to the company’s involvement in the Knoxville community. “Our stores serve as a place where neighbors are serving neighbors throughout greater Knoxville,” Havely explains. The Weigel family has always seen the business as a way of bettering the lives of others. “We’re a strong part of each community we’re in,” Havely adds. Two initiatives in particular deliver on that community promise. Weigel’s Family Christmas is a collaboration between Weigel’s and the Salvation Army to help disadvantaged families celebrate Christmas. Each holiday season since 1999, the company has provided $150 donations to each of 200 children selected by the Salvation Army. A force of about 400 volunteers then takes those kids on a shopping spree in local stores to fill out their Christmas wish list. The program has helped about 3,200 children during the past 16 years, Weigel says. Another Weigel’s community program has been running throughout the company’s history. Weigel’s sponsored the Milk Fund that provides dairy products and food supplements to children and elderly citizens in the Knoxville area. The program continues today and is funded through a portion of coffee, eggnog and cappuccino purchases during a limited period each year. Weigel’s matches its local involvement with strong cus72
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tomer service values to create a welcoming shopping experience. “It’s not just about what we give back to the community; it’s the everyday level of service we provide,” Weigel says. The company instills its golden rules into every store employee: greet each customer, thank each customer, get to know your regulars by name, do not delay your customer and apologize for any delay, and accept and handle customer complaints with interest and urgency.
Staying Ahead McMullen says Weigel’s has never operated like a typical convenience store. The idea is to create a premium look and offer high-quality products not often found in c-stores. Locations have a modern design and are kept clean, fresh and brightly lit. The food items inside are carefully chosen to exceed expectations. Milk continues to be an important
ZipLine Bill Weigel and his team are one of the very early adopters of the ZipLine ‘Payments as Loyalty’ platform. Weigel’s vision, and willingness to think progressively, helped jumpstart a value added payment option that is now utilized by some of the biggest brands in the space.
part of Weigel’s DNA. The company sources its milk from east Tennessee dairy farmers. At the dairy, the milk is only cold pasteurized the old-fashioned way, allowing it to retain its natural creamy flavor. Being a small and local dairy, the company’s localized supply chain is able to bring the milk from farm-to-store within 24 hours. Freshness is an important part of Weigel’s strategy. The company opened its own bakery, Red Barn Foods, in 2014. The 12,000-square-foot facility makes daily delivers of donuts, cookies and muffins to Weigel’s locations throughout the region. The company is now expanding on that fresh concept with Weigel’s Kitchens inside some locations. At the end of 2014, Weigel’s began introducing digital touch-screen kiosks where customers can place an order for a custom sandwich or pizza. Employees then prepare the meal fresh on site as the customer shops the store. Weigel’s Kitchens kiosks are now available in five stores and will be a part of all future stores and remodels. Between 1999 and 2015, Weigel’s invested more than $120 million in new store builds, opening about 40 locations. That process will only speed up in the coming years as the company expands. O May/June 2016
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Retail
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We are constantly reinvesting in the company and adapting our store models to the popular trends.
Clark’s Pump-N-Shop has grown into a 63-store chain with locations in Kentucky, Ohio, West Virginia and Florida.
CLARK’S PUMP-N-SHOP
Family Tradition
Building ties to its communities and investing in technology are some of the reasons why Clark’s Pump-N-Shop continues to grow. BY ERIC SLACK
S Rick Clark www.myclarkspns.com Ashland, Ky. 74
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The Clark’s Pump-N-Shop footprint now includes six car washes, six stores with Krispy Krunchy Chicken and three Clark’s Café’s. The company also has 16 stores that specialize in offering a grab-andgo menu. “The big reason for our success is the 650 people that we employ in our company,” co-owner Rick Clark says. “They all show up every day to welcome our customers and keep our stores clean and appealing. We take great pride in customer service and clean stores.”
tarted more than 30 years ago with one convenience store in Westwood, Ky. by John W. Clark and Diana Clark, Clark’s Pump-N-Shop has grown into a 63-store chain branded as Marathon and BP. Now co-owned by John’s sons, Rick and Brent (a third brother, Rodney, was also an owner but he passed away in January), the company’s locations can be found in Kentucky, Ohio, West Virginia and Florida.
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Knowing the Market Clark’s Pump-N-Shop has defined itself through a community-focused culture since its very beginning. At the start of the company, John W. Clark established a vision for the business, which he shared with his children. Over the years, he passed along his approach to leadership to the next generation. That knowledge has helped the company perform consistently throughout its existence. Clark’s Pump-N-Shop works very hard to understand its marketplaces. Its customer base is very diverse based on the location of the store. For example, some of the Clark’s Pump-N-Shop locations focus on meeting the needs of the on-the-go mom and school students. Other locations are nearby to industrial centers and focus on meeting the needs of blue-collar workers. “We also have locations on the interstates taking care of travelers, as well as locations within communities that serve a wide array of customers,” Rick Clark says. “At all of our locations, we take pride in setting ourselves apart from our competition by building
Clark’s Pump-N-Shop large well-lit locations with clean restrooms, uncluttered floor plans and exceptional customer service,” he adds. “We are constantly reinvesting in the company and adapting our store models to the popular trends that are happening daily in our industry.” Clark’s Pump-N-Shop knows that its customers have busy lives and need to get in and out of its locations quickly. Although there is competition within its markets, the company believes it has become a leader in terms of offering what the customer wants. “Customer expectations have not changed,” Rick Clark says. “Our customers want the items they purchase to be in stock, and they want our service to be delivered quickly and with a smile.” Another part of the community-focused culture is exhibited by Clark’s Pump-N-Shop’s support within its communities. The company takes part in many activities in the communities where its stores are located. Clark’s Pump-N-Shop believes it is important to get involved in the places it calls home. That is why it takes part in numerous local school projects, sporting events, and other city and community events. This helps the company to demonstrate its commitment to its markets.
Striving to Improve As Clark’s Pump-N-Shop work to build its strategy for the future, the company is careful to make sure that it is making investments into the most important areas. Clark’s PumpN-Shop has invested in technology such as new passport
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The wave of the future will be the mobile app, as young people are using their mobile phones for everything.
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registers for all locations as well as new MPD Pumps at most sites. “We have also invested in our backroom software,” Rick Clark says. “We have kept up with the times as far as technology goes.” This includes investing in a mobile app through Gas Buddy. The app is available for BlackBerry, Android and iOS platforms. The Clark’s Pump-N-Shop app allows users to find the closest Clark’s Pump-N-Shop store and get directions from their current location, provides upto-date gas price information for Clark’s Pump-N-Shop stores, has information on store features and services, and allows users to sign up to receive alerts about exclusive promotions and deals available at Clark’s Pump-N-Shop stores. This allows Clark’s Pump-N-Shop to send weekly specials to those customers who have downloaded the Clark’s app. 76
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“Our customers can also find our gas prices on the app,” Rick Clark says. “The wave of the future will be the mobile app, as young people are using their mobile phones for everything.” Other investments for the company have focused on traditional brick and mortar assets. In the last five years, the company has razed and rebuilt many of its stores. “The new stores are bigger with much more retail space, which has translated into higher inside sales,” Rick Clark says. “At some of the stores we added a drive-thru as a convenience for our customers. This concept has proven to be very successful.” In addition to investments, Clark’s Pump-N-Shop ensures its success by staying on top of the way the industry is changing. For example, cigarette sales have declined nationally, and the company has reinvested in the check-
out areas of its stores with new tobacco fixtures and adding the drive-thru windows, which is a big advantage because most of its competition has yet to make that move. Foodservice is also becoming a main focus within its stores, along with fountain beverages and coffee is also a main focus. Other changes and challenges include higher wages, increased insurance costs and more environmental concerns. “Labor quality is a big challenge,
Slone Refrigeration Company Clark’s Pump-N-Shop is a family-owned convenience store chain offering an exceptional customer experience since 1976. Our family at Slone Refrigeration Company has been proud to partner with Clark’s from the beginning. Slone Refrigeration provides innovative refrigerated merchandising spaces to keep customers refreshed.
as we are trying to maintain margins along with service and quality to keep our customers returning,” Rick Clark says. “Shrinking gas margins also mean that the inside store margin becomes a higher priority. That is why the food and fountain area is key.” Clark’s Pump-N-Shop’s main priority is to keep its eyes on the customers so it can continue to meet their needs. It plans to continue advertising in its market areas so it can continue to build Clark’s brand awareness. And it also plans to stay ahead of the competition through continued investment in technology and expansion of its store count. “We must look for opportunities to grow and expand,” Rick Clark says. “The key to growth is reinvesting in our business, building new locations as well as remodeling existing locations to give them the needed size to meet our customers’ needs.” O May/June 2016
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