New Jersey Grocer Issue 2, 2016 by California Grocers Association

NEW JERSE Y FOOD COUNCIL

15-Minutes With SECRETARY

DOUGLAS FISHER NJ Department of Agriculture

2016, ISSUE 2

NJFC

| Board of Directors

OFFICERS

DIRECTORS

Chair Judy Spires Kings Food Markets

Associate Vice Chair Joseph H. McCarthy Bimbo Bakeries USA

Secretary Michael Murphy QuickChek Corporation

Vice Chair Richard J. Saker Saker ShopRites

Treasurer Michael Rothwell Pennington Quality Market

President & CEO Linda M. Doherty New Jersey Food Council

Dan Croce Acme Markets

Peter Rojek Fairway Market

James J. McCaffrey III McCaffrey’s Markets

Jason Ravitz Ravitz Family Markets

Debbie Pregiato Advantage Solutions

Phil Scaduto Food Circus

Michael Biase Mission Foods

Frank Mastrangelo Supervalu, Eastern Region

Ken Weingartner C&S Wholesale Grocers

Andrew Kent Glass Gardens

John Wachter Murphy’s Markets

Rebecca Peifer Unilever

Kelly Johnston Campbell Soup Company

Luis Tejada Goya Foods

Jody Avalione Nestle USA

William Sumas Village Supermarkets

Eva Kohn CBA Industries

Joseph F. Pagano Inserra Supermarkets

David Maniaci Nicholas Markets

Richard Wood Wawa

Michael Sullivan Coca-Cola Refreshments USA

Lisa Angeles Kraft Heinz Company

Leonard J. Sitar ShopRite of Carteret

Joe Sofia Wegmans Food Markets

Howard Kent Krasdale Foods

Colleen Meares Stop & Shop Supermarkets

Christina Minardi Whole Foods Market.

Rafael Cuellar Cuellar Family ShopRites

N E W J E RS E Y G R O C E R

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CONTENTS

26 CONNECTING ON T DOTS DO O THE

F E AT U R ES

COLU M NS

Big Data, Big Opportunities

President’s Message Food Council Takes Progressive Approach to Bag Issues.........................................5

Collecting consumer data for detailed analysis has never been more critical, yet some retailers still underestimate its importance. The challenge lies in transforming data into useable information.

Connecting the Dots

Are the benefits of collaboration being explored to their fullest? New Jersey Grocer asked three industry leaders to give their views on the state of industry collaboration and how it can move forward.

Seeking the “American Dream” Their Way

| Issue 2

Millennials aren’t the self-centered group they’ve been made out to be. They want their share of the “American Dream.” But as customers and employees – they want things in a different way.

From The Chair “Jersey Fresh” Program is Healthy For Farmers, Retailers and Consumers.......................................7 Viewpoint – Kevin Coupe A Matter of Trust...................................................8 Washington Report Debit Card Swipe Fee Reform A Step in the Right Direction............................... 20

DEPA RT M EN TS NJFC News.........................................................12 Government Relations........................................ 17 15 Minutes With.................................................22

NEW JERSEY FOOD COUNCIL President & CEO Linda M. Doherty Asst. V.P. for Govt. Affairs Mary Ellen Peppard

Executive Assistant Office Manager Sandy Malecki Meeting Planner Kori Little-Buro

For association members, subscription is included in membership dues. Annual Subscription: $50

Financial Manager Christine Higgins

30 West Lafayette St. Trenton, NJ 08608 (609) 392-8899 (609) 396-6571 Fax www.njfoodcouncil.com

Editor Gary La Spisa, II

N EW JE R SE Y G R OC E R

Director of Public Affairs Gary La Spisa, II

New Jersey Grocer is the official publicaton of the New Jersey Food Council.

PRESIDENT’S MESSAGE

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PRESIDENT’S MESSAGE

Food Council Takes Progressive Approach to Bag Issues

L I N DA DOHERT Y President & CEO

The Food Council is moving forward with a progressive approach on bag issues after taking a hardline position opposing plastic bag bans. We believe a solution to improving sustainability and solid waste management efforts can be achieved through a carefully crafted bag bill.

An NJFC member who operates more than 25 stores in Montgomery County has reported an estimated reduction of nearly 34 million bags, both paper and plastic, in their fiscal year 2015 when compared to the average usage by their stores just outside of the county. That is a

If implemented properly, the results can have favorable environmental benefits, cut down on the usage of bags, and generate funds for an environmental cause while having little negative impact on retailers.

significant environmental accomplishment.

Today, NJ is experiencing a movement by state and coastal environmental groups that are calling for various plastic bag bans, fees and compostable bag programs. Each proposed local ordinance seems to have its own spin with retail operational challenges. Many members operate in multiple towns with some doing business in as many as 250 different NJ municipalities. As more municipalities consider their own actions on single-use bags, the Food Council Board of Directors evaluated the bag debate through a strategic planning process and recognized now is the time to implement a statewide uniform standard with specific parameters. After much research, member input and strong consideration, we have settled on a proposal that is experiencing positive results and impact on sustainability programs. Therefore, NJFC is supporting a bill modeled on a program implemented in Montgomery Co., MD.

While many advocates are more concerned about the litter potential of plastic bags, it is actually paper bags which have a greater negative environmental impact than conventional plastic bags. The carbon footprint of paper bags from production to checkout counter is far larger than that of its plastic equivalent. Other elements in the proposal specify that WIC and SNAP participants, customers who rely on food assistance programs, would be exempt from the bag fees. Retailers, operating more than 10 locations, would be subject to the fee collection. The revenue generated would be dedicated to a “Healthy Schools and Community Lead Abatement Fund.” This fund would be administered by the NJ Department of Environmental Protection. If approved, New Jersey would be the second state to enact a single statewide standard. We expect an uphill battle in our progressive position but we are committed to the challenge. n

The Montgomery County bag initiative implemented a 5 cent bag fee in 2012 and has prevented hundreds of millions of bags from entering the waste stream, raised more than $8 million in tax revenue over the first two and a half years and has been an important part of retailers’ sustainability programs in this county.

For these reasons, the Food Council is suggesting multiple amendments to a NJ bag bill that must remain intact to continue to gain NJFC favor. NJFC supports a five cent fee on both paper and plastic bags with State pre-emption language which is crucial to the success of the program.

N EW JE R SE Y G R OC E R

The findings show that a carefully crafted bag fee can have the intended environmental benefit while having little negative impact on retailers.

It is important to note that one reason for the success of the program in Montgomery was the strong public information campaign that the county’s Department of Environmental Protection adopted before the law took effect. Due to these efforts, retailers reported far fewer complaints from customers than were expected.

FROM THE CHAIR

“Jersey Fresh” Program is Healthy For Farmers, Retailers and Consumers Jersey Fresh has grown into one of the nation’s strongest agricultural branding and grading programs. As we enter the summer season and the peak of the “Jersey Fresh” program, food retailers throughout New Jersey are preparing for the rush of customer demand for this strong program. As consumers become more and more food

produce which has only traveled a few dozen miles, as opposed to a few thousand miles. This enables our farmer partners to allow the produce to more fully ripen, enhancing both the flavor and nutritional value, prior to picking and

conscious, I expect the “Jersey Fresh” program will continue to grow in the state of New Jersey.

shipping. In fact, most Jersey Fresh produce in New Jersey supermarket is on the shelves within 24 hours of being harvested.

J UDIT H S PIRES NJFC Chair of the Board, Chairman & Chief Executive Officer Kings Food Markets

Not only does the strength of this program help farmers get their products into supermarkets, but it helps to build relationships with our local farmers. This allows food retailers to work directly with them to plan shipments and sales plans to ensure that the product is as fresh as possible.

Jersey Fresh products on display at a recent NJFC event.

Launched in 1984, the “Jersey Fresh” program has grown into one of the strongest state agriculture branding and grading programs in the country specifically because of the close relationship between the farmers, the department and retailers. Last year, the Food Council worked diligently to overcome the complex produce labeling proposal, which would have hindered our state’s already successful program.

Assemblywoman Shavonda Sumter (D - 35) with Bob Greenway, Manager of Foodtown of North Haledon, and Mary Ellen Peppard of NJFC during a recent store tour.

N EW JE R SE Y G R OC E R

By bridging the gap between farmers and retailers, the Jersey Fresh program allows food retailers to provide our customers with fresher

NJ Food Council members are proud to work with the farming community and the Department of Agriculture to bring the healthiest and freshest produce to our consumers on a daily basis and we look forward to the continued growth of this program. n

| 7

VIEWPOINT

A Matter of Trust KEV IN C OU PE Founder MorningNewsBeat.com

One of my favorite proverbs, translated from the original Latin, goes like this: Trust, like the soul, never returns once it goes. It is a proverb that every company ought to emblazon upon walls, annual reports, in executive washrooms and even on the paychecks of high ranking individuals who might be tempted to put efficiency before effectiveness and to not take seriously the business’s essential value proposition.

he was surprised by the gambling at Rick’s Cafe Americain in Casablanca even as he was pocketing his winnings, or Tom Brady saying he was shocked that a couple of locker room attendants, in an effort to get him a competitive advantage, deflated some of the footballs he used during the Super Bowl.

There are, unfortunately, plenty of examples of companies that did not understand this.

Yeah. Right.

Take, for example, Volkswagen, which had to admit – under duress – that about 11 million of its diesel automobiles were equipped with some piece of software that essentially allowed the cars to cheat on their emissions tests – meaning that cars they claimed to have “clean diesel” technology weren’t nearly as clean as claimed. They also initially told us that the problems had been created by “the grave errors of very few employees,” which to me was sort of the same thing as Claude Rains saying that

One company that I think has done an excellent job of understanding its essential value proposition – and adhering to it, even at the cost of lost sales – is L.L. Bean. Now, of course, we’re finding that hundreds of thousands more cars may have been equipped with the cheating software, and that it may be Audis and Porsches as well. Beyond the billions of dollars in fines and restitution that this company is going to have to pay, I think it is fair to argue that it may have done irreparable damage to the company’s image, and even to Germany’s image as a source of fine automobiles. They may not go out of business, but business may never be the same.

N E W J E RS E Y G R O C E R

It is all a matter of trust. And trust, like the soul, never returns once it goes.

The same questions can be fairly posed, I think, to Blue Bell, the iconic Texas ice cream brand that was forced to conduct a national recall of all its products when some were found to be tainted with listeria that originated in its plants.

iStock

The company has finally got its ice cream back in coolers, and to this point the consuming public seems to be receptive... but at this point I have to Continued on p. 10

VIEWPOINT

Continued from p. 8

wonder whether its successful (so far) return has more to do with its iconography as a made-in-Texas brand than with the regaining of trust in the marketplace. There have been, in fact, allegations that the company was not as assiduous as it should have been about sanitation and food safety issues. I’m sure it has fixed these problems, but I’m also pretty sure that it cannot afford any more missteps. There may not be an enormous chasm between the events at Blue Bell and those that brought down the Peanut Corporation of America, where it has been proven that senior executives put the bottom line ahead of the product line and, to save money, allowed conditions to get so unsanitary that it was shipping salmonella-tainted peanut butter that eventually was linked to nine deaths and hundreds of sickened consumers. These decisions put the company out of business, and got its CEO, Stewart Parnell, a 28-year prison sentence. As I write this, another food company, Chipotle, is dealing with its own food safety crisis ... and had to close all its restaurants in Oregon and Washington because of an E. coli outbreak that seems to be related to how the fresh ingredients about which it brags so much have been dealt with in-store. To be clear, there’s a lot we don’t know at this point about the Chipotle situation. But this, I think, we do know... Chipotle knows that there’s a lot more on the line here than how and where it sources its food. Its reputation is on the line. Its ability to be trusted is on the line. And trust, like the soul, never returns once it goes.

N E W J E RS E Y G R O C E R

One company that I think has done an excellent job of understanding its essential value proposition – and adhering to it, even at the cost of lost sales – is L.L. Bean.

Now, to be clear, I love L.L. Bean. It is my idea of a fashion designer. It’s also my idea of a nimble, progressive retailing company – the way in which it has evolved from a catalog company to one that embraced the Internet, to one that is now judiciously opening bricks-and-mortar stores around the country, even in new markets like the Pacific Northwest... well, this is a 21st century company that is embracing all the challenges and opportunities inherent in the conduct of commerce today.

But in the middle of all this change and evolution, there is the iconic L.L. Bean Duck Boot. L.L. Bean has been making these things for more than 100 years, and these days – for reasons of fashion that are way beyond my ability to comprehend – they are more successful than ever. Last year, they sold 450,000 of them, and were backordered almost all winter. This year, they expect to sell 500,000 – and my understanding is that if you order a pair right now, you’ll probably get them sometime in February... despite the fact that L.L. Bean hired dozens of people to manufacture them.

Giving up short-term sales and making customers wait is probably not the easiest decision in the world for a retailer to make, but I think it is the right decision. The thing is, the boots are made in the USA. Always have been. And while Bean could’ve outsourced the manufacture of the boots to China, Thailand, Mexico, or some such place, the company decided not to, out of a conviction, I’m sure, that doing so would damage its essential value proposition. They’d rather the boots be right and local, and are convinced that customers would rather wait for them than get a pair of lesser value. Giving up short-term sales and making customers wait is probably not the easiest decision in the world for a retailer to make, but I think it is the right decision. Nurturing and protecting the brand always is. If L.L. Bean had outsourced the manufacture of the duck boots to some foreign factory, in ways both tangible and intangible it would have lost the trust of its consumers. Trust it never would have regained... because trust, like the soul, never returns once it goes. These are the decisions with which executives must grapple every day. In many cases, they may go into the “tough decisions” folder... but when you think about it, they’re not really tough at all. Or shouldn’t be. n

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N J FC N EWS

NJ Food Business Leaders Discuss Future of the Industry at NJFC Trade Conference Discussing the latest market trends and innovations, over 250 leaders from New Jersey’s food retail and distribution businesses gathered at Harrah’s Casino and Resort in Atlantic City, New Jersey in May to discuss the future of the food industry. The NJFC 2016 Trade Relations Conference featured keynote presentations from John Derderian, President of Allegiance Retail Services, on the “State of the Food Industry” and Tim O’Connor, Managing Partner of the Retail Performance Group on “Retail Transformation 2020.” “We are thrilled to have so many of the state’s leaders in the food industry here with us in Atlantic City to discuss the latest trends, innovations and best practices of their businesses,” said NJFC President and CEO Linda Doherty. “John and Tim provided insightful presentations that bring a new perspective to how we operate our businesses and measure performance. Both presentations provided an excellent opportunity for members to consider how

NJFC Chair Judy Spires of Kings Food Markets addresses the crowd during the Trade Relations Conference.

to deal with ‘market disruptors’ and other future changes that are sure to impact our industry.” The Conference began with a highly-anticipated Supermarket Chef Cook-off and concluded with an industry-wide golf outing sponsored by NJFC at Galloway National Golf Club. n

Debbie Pregiato Receives Prestigious NJFC Max Stone Trade Relations Award Debbie Pregiato, Customer Team Leader for Advantage Solutions, was honored with the New Jersey Food Council’s Max Stone Trade Relations Award at NJFC’s Annual Trade Conference in May.

N E W J E RS E Y G R O C E R

Debbie is the first woman to receive this prestigious recognition.

“Debbie’s role as a leader on our new member development campaign, business partnerships with NJFC members and her continuous dedication to the advancement of the Food Council’s mission made her an obvious choice,” said Doherty. “Debbie has forged long lasting food industry relationships and is a role model as a respected trade relations leader.” The Max Stone Award is named in honor of the longtime trade relations leader for Best Foods, CPC

Max Stone Award Recipient Debbie Pregiato of Advantage Solutions with Dan Zuccari of Advantage Solutions and NJFC President Linda Doherty.

in recognition of his accomplished career in trade relations in New Jersey. n

NJFC NEWS

Education Development Scholarship Program Exceeds Expectations Food Council Awards Record Number and Amount of Scholarships for 2016 At the Annual Trade Conference, NJFC announced the recipients of the 2016 Education Development Scholarship Program. The scholarship program was created with the goal to promote future leaders, create a benefit for NJFC members and their families, and support the food industry. This year, NJFC and its members awarded 17 scholarships throughout New Jersey, totaling $55,000, which is the largest education investment in the organization’s history in terms of both amount and value of scholarships. “On behalf of the food industry, we are thrilled to announce the recipients of our 2016 Education Development Scholarship Program,” said Linda Doherty, President and CEO of NJFC.

2016 Scholarship Recipients receive their awards during the Trade Relations Conference in Atlantic City.

“As demonstrated by the growth of our scholarship program over the past several years, NJFC and its members are committed to investing in the education of its workforce and their families. “As future leaders of the food industry, these graduating high school students are well-deserving of this honor and we wish them the best of luck in all of their future endeavors.” A full list of 2016 scholarship recipients can be found on NJFC’s website, www.njfoodcouncil.com. n

Inaugural Best Chef Cook-Off Challenge a Hit Food Circus Supermarkets Wins “Best Chef 2016” Award Food Circus Foodtown Supermarkets won the highlyanticipated Best Chef 2016 award at the New Jersey Food Council’s inaugural “Supermarket Chef Cookoff Challenge” during the Trade Relations Conference in Atlantic City.

Top: Winning Chefs Miguel Morales and Marissa Ricardo of Food Circus Foodtown receive their trophy from Trade Relations Committee Chair Jody Avallone of Nestle USA.

Also competing were Chef Daniel Arturo and Sous Chef Rocco Tesorito of ShopRite of Greater Morristown, Village Bottom: Chef Daniel Arturo of Food Garden; Chef Denny Siswanto and ShopRite of Greater Morristown prepares his dish for the judges. Sous Chef Preston France of Wegmans Food Market; and Chef Anthony DeBerto, Jr. and Kimberly Sullivan of Kings Food Market. Judging the competition were members of the 2016 Leadership Development Class, and Alfredo Varela, Executive Banquet Chef at Harrah’s. n

Each entrée and dessert was scored in three categories – plating, taste, and creativity. Taking top honors at the competition were Miguel Morales and Marisa Ricardo from Food Circus Foodtown Supermarkets of New Jersey. The winning chefs served the judges Pan

“This was definitely one of the highlights of the Trade Relations Conference,” said Linda Doherty, NJFC President. “The chefs did an amazing job and their creations were both beautiful and delicious. We expect this filling and exciting competition to become an annual tradition.”

N EW JE R SE Y G R OC E R

The cook-off provided an opportunity for New Jersey retail food industry chefs to showcase their culinary skills and compete for NJFC’s highly-coveted cooking award. Culinary teams from four New Jersey supermarkets participated in the competition, in which they created an entrée and dessert in the Viking Kitchen at Harrah’s Resort within a specified amount of time.

Seared Sea Scallops with Mole Sauce and plantains, and for dessert Apple Walnut Crepes.

N J FC N EWS

NJFC Awards Clean Communities Scholarship to Egg Harbor City Community School Commending the school for its outstanding recycling and solid waste program, the New Jersey Food Council (NJFC) presented the annual Clean Communities Scholarship to Egg Harbor City Community School during the Clean Communities Awards Banquet in Atlantic City. The $1,000 scholarship is presented annually to a school that demonstrates a strong commitment to environmental stewardship. “The Egg Harbor City Community School has done an outstanding job of implementing a comprehensive recycling program over the past three years, and as a result, their program has become a national model for school solid waste initiatives,” said Linda Doherty, NJFC President and CEO. “Most importantly, the program has fostered a positive attitude and culture of recycling throughout the school community. Instilling the importance of recycling and litter prevention in these young students will have a positive impact on our environment for generations to come.” Since 2013, the Egg Harbor City Community School has entered the Keep America Beautiful Recycle Bowl Challenge each year, winning the state championship in the first two years (2013 and 2014) and the national championship in the third year (2015).

N E W J E RS E Y G R O C E R

Doherty noted that the successful recycling program involved both staff and students and was implemented in all aspects of the school environment

Students from the Egg Harbor City Community School receive the NJFC Clean Communities Scholarship during “Kids Day” at the Clean Communities Conference in Atlantic City.

– including classrooms, lunch rooms and school grounds. As a result of the comprehensive program, students now regularly volunteer to monitor trash in the lunch rooms, while students in the afterschool programs perform regular cleanups of the school playground. The school also joined the Teracycle program and now collects juice pouches to recycle. New Jersey Clean Communities is a statewide, comprehensive, litter-abatement program created by the passage of the Clean Communities Act in 1986. Its mission is to reduce litter on public places, promote the volunteer cleanup of public lands and sustain a reduction in litter through education. New Jersey Clean Communities is also home to New Jersey’s Adopt-A-Beach and Adopt-A-Highway programs. “The Food Council is a steadfast partner of the Clean Communities Program as our business association is one of the architects in establishing this antilitter program almost 30 years ago. We believe that supporting deserving school children helps reinforce a new generation who will support clean neighborhoods and a healthier environment,” said Doherty. n

Egg Harbor City Community School Principal Jack Griffith receives the 2016 NJFC Clean Communities Scholarship from Clean Communities President Patrick Ryan and Gary La Spisa, Director of Public Affairs for NJFC.

NJFC NEWS

“Farm to Fork Day” Showcases Fruits of New Jersey Food Industry Showcasing the important contributions of the food industry in the Garden State, the New Jersey Food Council (NJFC) recently joined the New Jersey Food Processors Association, the New Jersey Farm Bureau, and the New Jersey Restaurant and Hospitality Association in hosting the fifth annual “From Farm to Fork: The Food Industry in the Garden State Serves You” at the State House in Trenton. Throughout the day, key legislators and policy makers visited exhibits in the State House halls and tastetested beverages and snacks from food retailers, including NJFC members Wegmans Food Markets, Coca-Cola Refreshments USA, Kings Food Markets, Campbell Soup Company and VitaminPaste as well as farmers, processors and suppliers. New Jersey Secretary of Agriculture Douglas Fisher kicked off the event by presenting a proclamation to the groups to recognize the work of the multi-billiondollar food industry in the Garden State. Additionally, Assemblyman Vincent Mazzeo (D-Atlantic) presented the four food industry organizations with a resolution in the Assembly Chambers. The resolution, co-sponsored by Senator Jim Whelan (D-Atlantic), paid tribute to the food industry’s numerous contributions to New Jersey.

NJFC President Linda Doherty with Assemblywoman Joann Downey (D-11) and Assemblyman Nicholas Chiaravalloti (D31) at the NJFC table during the Farm to Fork Event.

“From farm to fork, New Jersey’s food industry is essential to the vitality of our economy, our communities and our residents, generating more than $105 billion each year and employing almost 600,000 workers,” said Linda Doherty, NJFC President and CEO. “This event is an effective opportunity to showcase the latest food products and trends to New Jersey legislators and Administration officials. It also serves an important reminder of the crucial role we play in the health and wellness of New Jersey’s communities and state economy.” n

N EW JE R SE Y G R OC E R

Assemblyman Vince Mazzeo (D-2) presents the Food Council and its participating members with a Joint Senate and Assembly Resolution recognizing the impact of the food industry on the state and its economy.

GOVERNMEN T R EL AT IO N S

AC Rescue Plan and Transportation Trust Fund Proposal Dominate Busy Budget Season For the past several months, New Jersey’s public policy agenda has been impacted by infighting between the top legislative leaders over a number of issues, the most dominant being a proposed state takeover of Atlantic City, which is facing bankruptcy.

provide their employees with up to nine days of paid sick leave annually. While NJFC has been fighting this legislation for two years, lately we have made some progress and our arguments on the unintended consequences of this legislation are resonating.

Fortunately, legislative leadership reached a compromise, and have now turned their attention to other critical issues, such as the nearly insolvent Transportation Trust Fund. The Leaders seem to be close to agreement on a bipartisan bill package which increases the gas tax and provides tax relief in other areas.

As a result, there is significant disagreement over key provisions in the bill, including statewide preemption, and the Legislature lacks the votes to pass it in its current form.

The plan creates a 7 percent Petroleum Products Gross Receipts Tax (PPGRT), a 10 -cent per gallon PPGRT tax on motor fuel, and a 3-cent per gallon PPGRT diesel surcharge, all levied at the wholesale level. This 23-cent increase, if added to New Jersey’s current 14.5cent tax, results in a 37.5-cent per gallon cost. The comprehensive package includes several provisions designed to stimulate the economy and promote tax fairness, including proposals advocated by NJFC, such as a phase out of the estate tax. This plan calls for a 3 year phase out, starting with an increase in the exemption threshold from $675,000 to $1 million effective December 31, 2016, completing the full repeal by December 31, 2019. This is welcome relief to our many family owned and operated member companies.

N E W J E RS E Y G R O C E R

Mary Ellen Peppard NJFC Assistant Vice President of Government Affairs

The plan also phases in an increase in the exemption for retirement income, and establishes an income tax deduction for contributions to New Jersey charities. These provisions make our state more competitive and incentivize charitable giving to critical safety net organizations, such as food banks. The plan also provides relief to low income residents by increasing the Earned Income Tax Credit and establishing an income tax deduction of gas taxes for residents whose spending on gas taxes exceeds 1 percent of their income. Another challenge has been proposed sick leave legislation, which requires employers in New Jersey to

Of significant concern is that New Jersey’s legislative leaders have indicated they intend to again put a minimum wage increase on the ballot as a constitutional amendment if the Governor vetoes the legislation, which is likely. On the positive side, recently we were facing a bottle bill to fund lead testing and remediation in water. NJFC focused on the harm to New Jersey’s current recycling programs and Clean Communities Program, reduced funding to municipalities, the expense and logistical burden associated with setting up a deposit and collection system, sanitation problems, and price increases. The Legislature ultimately agreed not to pursue the bill and the conversation changed to other funding sources. As part of our members’ larger focus on improving sustainability and our solid waste management efforts, NJFC is taking a progressive approach to disposable bag issues. We have learned from the success in Montgomery County, Maryland that a carefully crafted bag fee can have the intended environmental benefit while having little negative impact on retailers. NJFC is supporting a bill moving through the Legislature which provides for a five-cent fee on disposable plastic and paper bags. Under this bill, the retailer would retain one cent and the other

G O V E R N M E N T R E L AT I O N S

four cents would go into the Healthy Schools and Community Lead Abatement Fund. The bill provides for complete statewide preemption, exempts WIC and SNAP recipients, and exempts very small retailers occupying less than 2,000 sq feet. The Legislature is also busy debating the Fiscal 2017 State Budget. New Jersey’s constitution requires the Legislature to pass and the Governor to sign a Budget by June 30, the end of the fiscal year. Recently the State’s nonpartisan Budget Office reported a significant expected shortfall of $622 million for the upcoming fiscal year, further exacerbating the challenges of balancing the budget.

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We anticipate that after the State Budget is finalized, the Legislature will largely take a break for several months and limit their official business during the summer. Upon their return, NJFC will continue work on our proactive agenda and opposition to the expensive and onerous initiatives which are being advanced. n

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N EW JE R SE Y G R OC E R

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N E W J E RS E Y G R O C E R

Peter J. Larkin President and CEO National Grocers Association

Debit Card Swipe Fee Reform A Step in the Right Direction CONGRESSMAN NEUGEBAUER (TX-19) RECENTLY INTRODUCED H.R. 5465, A BILL TO REPEAL SWIPE FEE REFORMS, ALSO KNOWN AS THE DURBIN AMENDMENT PROVISION, WHICH PASSED AS PART OF THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT BACK IN 2010. Repealing the Durbin Amendment, which placed a cap on debit card swipe fees and introduced competition into the debit routing system, would only serve to increase profits for big banks while hurting businesses and consumers. Lower debit swipe fees have allowed supermarkets to pass along savings to consumers in the form of extended sales and have allowed grocery stores to maintain consistent prices even during shortages that would otherwise result in price spikes. Consumers have also seen benefits in ways that directly contradict the predictions of the banks. Despite banks insisting that iStock the Durbin Amendment would be the end of free checking for consumers, free checking has increased from 53% to 61% since Durbin was implemented, according to the American Banking Associationâ&#x20AC;&#x2122;s own numbers.

Economist Robert Shapiro has noted that consumers saved more than $6 billion in the first year after the Durbin Amendment went into effect. H.R. 5465 would send those savings directly back to the 1.4% of all banks that are held under the Durbin Amendment (only banks with more than $10 billion in assets are covered under the Durbin Amendment). The Durbin Amendment has worked for consumers and businesses for the last six years and began to introduce competition into a system dominated by two major companies. We need to ensure more competition within the debit market - not remove it. The Durbin Amendment was a step in the right direction, now is not the time to take two steps back. n

N E W J E RS E Y G R O C E R

15 MIN UT ES WIT Hâ&#x20AC;¦

15 MINUTES WITH…

Douglas Fisher As the weather warms up, New Jersey retailers are preparing to once again be leaders in the promotion of NJ’s “Jersey Fresh” program. The Food Council recently had the opportunity to interview Secretary of Agriculture Douglas Fisher and learn more about the program and the Department’s 100th anniversary celebrations. New Jersey Grocer: Congratulations on the 100th Anniversary of the Department earlier this year, what did the Department do to recognize the milestone? “On March 29, 2016, we officially hosted federal, state and county officials in the New Jersey Assembly Chamber to commemorate the 100th Anniversary of the New Jersey Department of Agriculture (NJDA). It was 100 years to the day that the bill creating the NJDA was signed into law ‘to form a single agency to promote, protect and serve the Garden State’s agricultural interests.’ As part of the anniversary ceremony, Governor Chris Christie signed a proclamation declaring March 29th ‘New Jersey Department of Agriculture Recognition Day.’ Several dignitaries including elected officials, former NJDA officials and directors of several state and federal agricultural organizations spoke to honor the Department.”

Continued on p. 24

What do you think is the reason for the great success of Jersey Fresh? “First, and maybe most obviously, Jersey Fresh is the oldest state-sponsored agricultural products branding program in the country. Being out in front of that curve made the difference in making consumers aware of the campaign and helped our Jersey Fresh farmers stand out in the minds of shoppers. Also, there’s no doubt, because of public demand, that businesses’ embracing of the program at every level of the distribution chain has contributed greatly to its success. The dollars spent on Jersey Fresh promotional materials and advertising are leveraged several times over when retailers put the Jersey Fresh logo next to certain items in their advertising circulars or out in their produce aisles. Also, it’s not just advertising and promotion. From the beginning, the Department wanted to ensure that Jersey Fresh was synonymous with high-quality produce. That’s why we built the Quality Grading standards into the program. Consumers can have confidence in Jersey Fresh, and as I always like to say, ‘You can be sure if it’s Jersey Fresh.’”

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In your opinion, what enables the Department to remain flexible enough to be a leader for the last 100 years and what are the challenges moving forward? “The Department strives to be a reflection of New Jersey’s agricultural community. Our farmers are among the most innovative and adaptable in the nation and the world. Our job is to seek new opportunities and connections that can help them to succeed, and to assist in burdensome issues that they may face. Our State Board of Agriculture, with its eight working farmer members serving as the policy-making body for the Department, enables us to hear from those leading farmers all the time. Our annual State Agricultural Convention brings

together approximately 100 delegates each February to vote on resolutions that essentially serve as the Department’s roadmap for the coming year. Finally, I would say our flexibility stems from the Department’s staff themselves. Our employees have to be ready to take on any number of tasks, some of which might not be things they deal with every day. We train our staff to be nimble and able to respond to the needs of the agricultural community in a faster and more efficient manner.”

15 MINUTES WITH…

Continued from p. 23

How does the relationship with food retailers benefit the Jersey Fresh program? “The relationship between food retailers and the NJDA’s Jersey Fresh program is a symbiotic one. Both parties benefit. The Jersey Fresh program gains exposure for the agricultural products grown and raised in the Garden State by its many farmers, and the retailers gain the loyalty of consumers by offering them the freshest, local fruits and vegetables and other agricultural products from the Garden State.” What is it about your program that makes it a national model? “Jersey Fresh is consistent and does not change with political whims. The underlying messaging is always there, but we periodically change the presentation of that messaging to keep the program fresh and capture consumer awareness.”

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What do you think the Department can do better to grow the Jersey Fresh program even more? “Department officials and staff can continue to reach out to retailers, both supermarkets and farm markets/ farm stands, to continue to distribute promotional, point-of-purchase materials and to grow the relationships between the retailers and the growers.”

What do you think that retailers can do better to grow the Jersey Fresh program? “Retailers have been doing a very good job at promoting Jersey Fresh as the source for fresh, local produce that supports local growers in the Garden State. Now more than ever, consumers want to know who and where their food is coming from. If there is one area where I think it can be enhanced, it would be in prepared foods and salad bars. Retailers continue to expand those options in their stores, and highlighting the Jersey Fresh ingredients in those offerings would be a big plus, as would retailers developing their own brands of frozen Jersey Fresh products and items that could fit the ‘Made With Jersey Fresh’ standards. “

Where can readers go to learn more about the Jersey Fresh program? “Our digital age has made it so much easier to ensure that consumers get that information. Whereas, in the past, we would have had to rely upon handouts of print, radio and TV advertising (all of which are STILL a major part of Jersey Fresh outreach) we now can go more directly to consumers with that information through social media. They can find information about Jersey Fresh on our Department website (www.nj.gov/agriculture/), on the Jersey Fresh website (www.JerseyFresh.nj.gov), our Facebook page (www.facebook.com/JerseyFreshOfficial) and our Twitter account (https://twitter.com/ JerseyFreshNJDA ) We also recently launched the #JerseyFreshLove campaign, which gives consumers themselves the opportunity to share information about the Jersey Fresh products, farms and recipes they relish.” What else is new at the Department of Agriculture that would be important for our retailers to know? “As I’m sure all your retailers are keenly aware, we are about to enter this whole new realm of food safety brought on by the federal Food Safety Modernization Act (FSMA). We’ve already involved many retailers in our outreach to farmers so that they understand the importance of FSMA and how it can dramatically impact their ability to maintain the markets into which they currently sell. We will continue to partner with your retail members as we all try to work our way through this very extensive and historic shift in how America does all it can to prevent foodborne illness.” n

Secretary Fisher with the 2015 Leadership Development participants.

The ONLY Federal Credit Union in the United States chartered to serve grocery industry employees and their families www.trugrocer.com

B I G D ATA , B I G O P P O R T U N I T I E S

BY LEN LE W IS

Big Data BIG OPPORTUNITIES

B I G D ATA , B I G O P P O R T U N I T I E S

At a time when people barely stray a few feet from their computers or smartphones and are rarely disconnected from social media, collecting consumer data for detailed analysis has never been more critical.

But some retailers still underestimate, or even ignore the value of the information they have at their fingertips, according to David Cianco, senior customer strategist for dunnhumby, the global customer science company, whose work with retailers and CPG companies like Kroger, Tesco, Macy’s, Coca Cola, ConAgra and Unilever has raised the bar on consumer insights. The challenge lies in transforming data into useable information. “The possibilities for applying big data to change the customer experience are enormous – bigger than any time I can remember,” Cianco said. “The customer relationship marketing is being done extensively, but it’s not the end for big data at retail.” To many, the era of big data began in 1995 when Tesco introduced its highly successful Clubcard loyalty program in the United Kingdom to gain insights into shopping behaviors, segment customers into different groups and introduce new product lines – notably in private label – in order to get a leg up on intensifying competition. The strategy worked so well and so much data was mined that the chain eventually bought a majority interest in dunnhumby. Moreover, Tesco has abandoned plans to sell its dunnhumby data and loyalty operation. Meanwhile, Kroger, which already had a joint venture partnership with dunnhumby in the U.S., has set up a new one called 84 51° under which Kroger acquired most of the firm’s technology assets.

“They are not fully aware of big data’s impact on everything from logistics and assortment to pricing, promotion and other forms of personalization,” he quipped. “Sometimes I can see their eyes glaze over because there’s so much for them to see.” However, he said, many independents are starting to understand the wealth of information they can obtain just from transactional data regardless of whether loyalty cards or some other loyalty program is used. But properly mining the data is still the challenge. “When I was at Kroger my responsibility was the loyalty program,” he said. “I made the decision to bring dunnhumby into Kroger because we didn’t have the right skill sets and it would take years to acquire the kind of talent to build the program ourselves. Now, Cianco said, there are more young analysts coming out of universities who have a better idea of what to do with data in order to gain some insights.

The challenge lies in transforming data into useable information. “But there still aren’t enough and I see more retailers trying to take this function in-house with various degrees of success,” he points out. “As such, few are leveraging all the benefits of big data.” But even having people with the right skills is no guarantee of success. And the question that comes up is whether consumers are too much of a moving target for data to keep up with changes in their tastes? “It’s a fair question,” Cianco said. “The technology consumer is always connected. They have different experiences around price transparency and can immediately check prices and availability. So there’s a bit of worry or consternation on just how to keep up with them. They are creating new data points that can be baffling – especially if you’re not optimizing the data you already have.”

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This underscores the importance of data analysis in the face of increased competition from discounters, convenience, dollar stores and a rising tide of online retailers. As such, data collection is essential for identifying profitable items, reducing out-of-stocks on promoted products and increasing sales by tracking customers in store.

Cianco noted that retailers, both large and small, are not reticent about using data, but can fall short of really comprehending its power.

Continued on p. 28

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C O N TI NU E D

Continued from p. 27

Basically, keeping up with consumers means keeping up with social media. “Historically, loyalty marketing has focused on just a few dimensions of the shopping experience like spending and visit frequency,” he said. “Those are the underlying metrics that create definitions of loyalty in the business and they’re all derived from the transaction model.”

So what are the new hot trends?

“One is the ‘talk dimension’ – that is, how consumers are talking about brands, or the retail experience on social media,” he said. “Progressive retailers have to pay attention to pay attention to this.”

“The hottest ones relate to two things – healthy eating and what we call ‘new value’,” Cianco said. “Organic, natural and locally sourced foods in produce, meat, fish and bakery remains popular in healthy eating circles.”

“Basically, foodies are a more adventurous group that are willing to expand their choices across different categories in the store,” he said. “They can have more exotic tastes and are open to trying new things. They are getting away from basic meat and potatoes and enjoy a more diverse menu.” This idea of engaging in different foods has clearly been fueled by social media which encourages groups

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Senior Customer Strategist for dunnhumby

There’s also been lots of conversation lately about Kroger’s introduction of Simple Truth organics which is now a $1 billion brand. “There’s a sort of fallback into recipes that involve organic and natural products,” he said. “Supermarkets are also responding to this trend with store clinics and more pharmacies and more relationships with outside drug chains like Target has with CVS that respond to consumer interest in health.” New value is another macro trend. “We are seeing an entire generation whose attitudes have been shaped to being more frugal,” he said. “It’s become something that’s socially acceptable and, in fact, the way to gain social status among one’s peers. We can see the results of that in the success of discounters like Lidl and Aldi.” Cianco also sees frugality at play in some hot categories – particularly fresh fruits and vegetables, with consumers getting away from the cosmetic standards that were once so important. Now things like odd size apples or double head carrots, with the same nutritional value, are being picked up by valuedriven Millennials. As such, we are now seeing what Cianco calls “scrimp and splurge” behavior among consumers – scrimping on the basics, including core or center store products, in order to splurge on more fresh items and trading

| 28

The technology consumer is always connected.

But, Cianco said, there are other data points or dimensions that should be measured.

In this regard, one of the most important segments of customers is the so-called “foodie,” a multigenerational group that can have hugely diverse attitudes.

David Cianco,

like Millennials whose tastes change more quickly, he said, citing, some emerging products like coco nibs, beet juice, figs, flax, goats milk and sriracha, which are now seen everywhere.

iStock

B I G D ATA , B I G O P P O R T U N I T I E S

up in categories like wine, chocolate, luxury goods, high end brands or private label. “I think we’ll see more of trading down in one area of the store to spend more in another,” he added.

Asked about emergence of ethnic consumers – Hispanic and Asian – and how retailers should approach them, he replied: “We’re looking to identify lifestyles, lifestages and different taste preferences.

Private label will also continue to play a key role at retail. “Retailers in the U.S. use private label in different ways depending on how they’ve positioned themselves in the market – either as a value line, a national brand equivalent or as a premium or exclusive store brand like Archer Farms at Target, or Kroger’s Private Selections,” he said. “How retailers use private brands can be hugely influential in setting a retailer’s value and price perception.” Another key for dunnhumby is what constitutes a true long-term trend, or a short-term fad. “We try to identify shopper DNA based on the principal that you are what you eat and segment that into lifestyles,” he said. “For example, in 2004 and 2005, we looked at the Atkins diet and saw groups of customers who were interested in living a lifestyle around that.

They are not fully aware of big data’s impact on everything from logistics and assortment to pricing, promotion and other forms of personalization. “But in a short time – a year more or less – we saw it being faddish. Customers would do some trials, but repeat usage dropped off quickly.” On the other hand, the explosion of the pet food business was spotted early on. “Our research found that more households had pets then kids at home,” he said. “That’s a good example of a long-term trend.”

“We have identified Latin and African-American taste profiles. Those profiles cut across demographics so you might see white people in the south with the same taste profile as African-Americans. It becomes part of your heritage. But, he says his company is careful to describe people less in terms of demographics and more in terms of what their tastes might be. As to the next generation – Generation Z as they’re being called by observers, Cianco said little is known about them but it’s time to learn. “I’ve seen numbers about their buying power, what influences them and their use of social media,” he said. “Also they are incredible advocates and much better marketers. They market to themselves and others online which is an interesting phenomenon. They are also sharing their disappointments with brands and that’s something to watch out for,” he said. Cianco said the industry must tune into them because they are using their mobile devices to influence friends and parents when they are in the store. n Len Lewis is editorial director of Lewis Communications, Inc., an editorial planning, research and consulting firm. He is a contributor to several retail publications and trade groups in the U.S. and Europe and has been a speaker and moderator at numerous industry events. He can be reached at lenlewis@optonline.net or via his website www.lenlewiscommunications.com

CONNECTING THE DOTS

B Y L EN L E W IS

CONNECTING ON T DOTS THE DO

For years, phrases like customer-centric, best practices, CPFR, supply chain collaboration have been buzzwords throughout the retail industry. As competition for the consumer dollar increases among brick and mortar and online stores, these factors and relationships between independents, manufacturers and brokers have never been more urgent. But are the benefits of collaboration being explored to their fullest? New Jersey Grocer asked three industry leaders – Chris Coborn, chairman and CEO, Coborn’s, Inc.; Denny Belcastro, vice president, customer and industry collaboration, Kimberly-Clark Corp.; and Mark McLean, division manager, CROSSMARK, Inc. – to give their views on the state of industry collaboration and how it can move forward.

CONNECTING THE DOTS

NJG: We’ve been talking about better collaboration between trading partners for decades. Are we making progress?” McLean: “We are. It seems that all parties appreciate that we can accomplish more together vs. running in our own directions. Admittedly, it’s easier said than done. The challenge is working together throughout the year to stay on the right path.” Belcastro: “There’s been a lot of progress. But it’s somewhat like a Tale of Two Cities – the best of times and the worst of times. Our industry has developed and utilized some of the finest technology delivering point-of-sale information, consumer trends and shopper insights. However, some manufacturers are still trying to figure out how to use the information in the best way retailer-by-retailer and it takes time building the needed trust.” NJG: How so? Belcastro: “When I was a sales rep, either calling on stores or at their buying headquarters, I met with retailers to explain our company and our brand marketing approach, our strategy and the tactics we were using to drive awareness and velocity. In today’s marketplace, you would hope that a digital approach, especially with media and consumer promotions, would enable us to take information to the marketplace quicker, faster and better. “It’s getting to consumers quicker, but, in some cases, CPG manufacturers are still missing a beat getting to all retailers on a timely basis. It may be that connectivity to retailers needs to be re-worked.” Coborn: “I think the move away from direct sales force coverage to store coverage with brokers is increasing the quality of service we see. But some CPG companies are going back to direct sales forces to get a higher quality store call. We’re relying on both sales teams to collaborate closely on all supply chain issues with retailers.”

McLean: “Honesty. Everyone has to take a step back and be honest with themselves and their partners. If we all have similar expectations and are aligned going into planning, the chances for success increase.

“Boil down the information to key takeaways on how it all applies to their business. We need to avoid overcomplicating the routine tasks.” NJG: How tough is it convincing independents that they are on a level playing field with the chains? McLean: “We all win when we sell more cases. We have to do everything we can to balance the needs of retailers with our clients. Finding that middle ground means everyone wins. Let’s find that common ground, build a plan and then execute the plan that push cases through the door.” NJG: How do independents fit into the picture? McLean: “They know their customers better than anyone else and have the agility to be quicker to respond and implement to capitalize on the opportunity for growth. Right now these retailers don’t have a lot of excess cash to waste on learning on their own. “They’re looking to the industry for best practices and to follow the lead of larger retailers in category management and shopper marketing. Some may be at a slight disadvantage because they’re not getting all the pertinent information on a timely basis.” Coborn: “Well, the second half of the year was challenging for independents because chains were doing a bit better. As a result, CPG dollars went where they generated the most results and sold the most cases. It’s a strategic spend. At the end of the day, if they [manufacturers] offer us more dollars to drive business they expect results.”

“We’re in the relationship business and you have to build those relationships with trust.”

McLean: “Everyone wants efficiency and simplicity. You can see retailers’ eyes glaze over when you walk in with a 50-page presentation – paralysis by analysis. All of this information may not be applicable to the way they go to market.

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NJG: What’s most important?

NJG: Specifically, what are retailers looking for?

Continued on p. 32

CONNECTING THE DOTS

C O N TI NU E D

Continued from p. 31

NJG: Driving business is more complicated now with everyone selling groceries. What should be done? Belcastro: “I think Kroger is still the best model for the independents to emulate. While they have become larger through acquisitions, Kroger never lost sight of their local operational and executional focus. For them, centralization isn’t only about efficiency but also coordinating learning and best practices and sharing within their network. “While they coordinate procurement and a game plan for their divisions, they don’t script or write all the plays. The divisions find a way to adapt to what their local customers need and want.” NJG: How can independents emulate Kroger with vendors? Belcastro: “By being more visible at various industry events and opportunities to engage with their suppliers and CPG manufacturers. The best way to get attention is through industry associations like the California Grocers Association, National Grocers Association or Food Marketing Institute as well as their wholesaler or co-op where they can gain access to some of the best practices and successful approaches to take. Sometimes, they will learn some valuable lessons on what not to do.” NJG: Maybe the first step is to use technology like webinars or podcasts? McLean: “It could work better than retailers waiting for that information. A half-hour webinar for a group of retailers can get the ball rolling.”

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Coborn: “Independents have to stay innovative. Kroger’s good at acquiring customers and selling up to the customer base. They know how to use data and we [independents] have to be smarter about leveraging that intelligence.

“The old traditional ROP still works. Price and value customers especially want more incentives to be loyal to your store. It’s about retailers and manufacturers leveraging each other’s strengths.”

NJG: What does efficiency and innovation mean to you? Coborn: “Well for one thing, e-commerce is not the end all, but to ignore it would be a mistake. It has to be on your radar. We also have to pay more attention to the discount channel this year. Households are still under a lot of stress and we need to pay greater attention to what goods and services are selling.” NJG: Being more customer-centric? Coborn: “Exactly. Millennials are not the same as boomers. Their capacity to spend is growing but they don’t shop like their predecessors because of access to technology like mobile marketing and electronic coupons. We have to play into that. “Going about your business the same way as before means missing the bull’s-eye. If you want to be around another generation you have to adapt to a rapidly changing market.” NJG: The phrase “best practices” is also thrown around a lot. What does that really mean?” Belcastro: “Throughout the industry, there are valuable knowledge partners and suppliers that work collaboratively with manufacturers to test or pilot new ways on working together for growth, efficiency and effectiveness. It could be in several key areas of promotion activation, shelving, or incremental merchandising. “It starts with matching strategies with common goals using shopper insights with their primary or targeted shoppers. They may have kids in local schools and are engaged actively in the community. You have to find out which categories are the sweet spot for them. “Maybe it’s baby-oriented categories or nutritional products like protein shakes. In either cases, using methodology and key learning from other case studies, independents can serve as a ‘field laboratory’ to create what may be the best way to approach these shoppers are as loyal customers.” Continued on p. 34

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CONNECTING THE DOTS

C O N TI NU E D

Continued from p. 32

Coborn: “As a group we need to leverage our relationships across the entire supply chain and stay engaged. Our stores are very close to our consumers and that’s why CPG companies listen to what we have to say. I think we’re unique in the market.”

Coborn: “Well, we all have the numbers. Those aren’t difficult to get. We need manufacturer partners at the table that will help us use the information. In order to influence the outcome they have to be part of that process or else you’re just swimming alone. On the other hand, I agree that retailers have to be more engaged and participate in the process. You can’t just sit down at the table and wait for things to happen.”

Belcastro:“One of the things we’re doing at Kimberly-Clark is finding out in which categories independents need help – whether it’s baby care, adult care or the paper category. Retailers have to look at five or six key categories and work with vendors to get the information they need to start the process.”

McLean: “With the amount of brokers and vendors calling on independent retailers, they are pulled in a million different directions. We all can bring certain knowledge and expertise to the table that can help build the best plan possible. And when we do agree on a plan, we all need to make sure we are sticking to it.

NJG: How can collaborative efforts be improved?

“I think there is an opportunity to get information more quickly to the independent class of trade. A better way might be a collaboration call with a group of independents with similar interests to cover major initiatives, like a new item launch or a strategic shift. Then, we can follow up with specifics for individual accounts that are most pertinent to their business.”

NJG: How can independents play a larger role in all this?

Coborn: “Brokers represent a lot of companies but are not necessarily the decision-makers who can move the dime. “Associations have given us a forum for improving category performance through top-to-top meetings with CPG partners who can make decisions. Those meetings are a big step forward.” McLean: “It’s tough getting the decision makers to the table all the time. The prep work is equally, if not more important than the conversation itself. If we know what’s expected before we go into a meeting – for example, five questions that retailers need answered – then the right decisions can be made. “There’s always a lot of discovery that often requires people to get back together at a later date. The problem is that a day can turn into a month and then a quarter.”

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NJG: What I’m hearing is that collaboration is a two-way street?

Belcastro: “Absolutely. I do a lot of one-on-one meetings where we try to find out what retailers need. Many independents, especially those that cater to multi-cultural locations, have a wealth of knowledge.

Belcastro: “We’re working with Unified Grocers to better understand their customer base and look for unique ways to mutually grow our businesses. For example, gaining the right products for distribution that appeals to their multi-cultural retailer base is critical. “In addition, taking the understanding of their information on urban stores to build programs that are specific to those retailers that may have limited shelving or space to merchandise. NJG: In general, how can these collaborative efforts move along quicker? Belcastro: “Basically, I want to hear the retailer perspective on what they need. If you’re a one store operator, it may be time to think about redesigning your store format to serve the demographics of their marketplace and capture the unique and special place you have with shoppers with your format.” n

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S E E K I N G T H E “A M E R I C A N D R E A M ” T H E I R WAY

BY LEN LE W IS

Seeking the

MILLENNIALS AREN’T THE LAZY, ENTITLED, SELF-CENTERED GROUP THEY’VE BEEN MADE OUT TO BE. THEY LIKE MONEY, THEY’RE AMBITIOUS AND WANT THEIR SHARE OF THE “AMERICAN DREAM.” BUT AS CUSTOMERS AND EMPLOYEES – THEY WANT THINGS IN A DIFFERENT WAY. This is the message from generational consultant Paul Moya, who is slated to speak at the 2016 Independent Operators Symposium this January in Hawaii. Moya, CEO and founder of Millennial Labs – a global, full-service consultancy that solves generational challenges in the workplace,

marketplace and voting booth, emphasized that the group has to be approached as both potential employees and customers with communication and motivation the keys to understanding their unique attitudes and needs. “Baby Boomers were raised by parents who came out of the Great Depression and were told at a young age

S E E K I N G T H E “A M E R I C A N D R E A M ” T H E I R WAY

Their Way

to find jobs that provide stability and security for their family and to invest in a rainy day fund to provide security for their families—because you never know what’s going to happen,” he says.

“They came to the realization they weren’t going to be CEO in a handful of years, and there’s a system in place and they would have to navigate this long system through corporate America,” he says.

“When the Millennial generation was being raised, they were told to dream big and that they could achieve anything they wanted in life,” he says.

But Millennials were not raised in a time of security and stability and when they hit the workplace with huge ambitions, they were often met with roadblocks.

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Security was about focusing on the American Dream – the house with the picket fence and ultimately creating an easier life and more opportunities for your kids, Moya says.

“Their messaging was less about security and more about their personal ambitions.”

Continued on p. 38

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Continued from p. 37

Millennials want to grow and learn and be empowered along the way, Moya noted. “But they have a much different mindset than Baby Boomers who were told that if they keep their heads down, bide their time and work as hard as they can, they can get that corner office,” Moya says. However, Millennials don’t stay engaged in that kind of work environment. “They want to be empowered and do things that matter,” he says. “They want to have a seat at the table and a voice in the boardroom about the future and direction of their companies.”

One of Moya’s clients said the average Millennial employee was leaving the company every 12 to 18 months. “But the employee was spending a lot of money in training people only to have them go across the street to their competitor,” he says, noting that it may cost companies $24,000 -$30,000 to train and eventually lose an employee.

“An increasing number of companies recognize that the Millennial workforce is the future of their brand but retaining them is a real challenge.”

For Millennials it’s not a matter of work and life balance. “It’s work and life integration and how they can connect the things they love into the work they do,” he explains, pointing to research stating that 75 percent of Millennials want to work for a company that’s doing good things for the world.

“At that rate companies are in a world of hurt if they can’t figure out how to retain them,” he warns. “Think about the cost of giving them three days of paid leave to do something versus the cost of replacing them.”

“They are focused on a triple bottom line,” Moya says. “They don’t want to just work for a company that makes a big profit, but one which does things that impact the environment and one in which they feel connected to the overall purpose of the company.”

This is not to say that Millennials don’t care about money as a motivator. But Millennials, as a whole, are an underemployed generation.

In addition, Milliennials want to tie their name to a company or brand with a reputation for making the world a better place.

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“A lot of companies are doing that but may not be able to tell that story effectively,” he says. “If you can’t tell it to employees you can’t possibly tell it to the rest of the world.”

Companies like Apple and Google are doing things to incentivize people like providing paid time off to volunteer for different causes which, Moya believes, can go a long way in employee retention. “An increasing number of companies recognize that the Millennial workforce is the future of their brand but retaining them is a real challenge,” he adds. “Millennials are staying at companies for a lot shorter time span.”

“They’re working low wage jobs with a Master’s degree,” Moya says. “They came of age during a recession with an average $34,500 in student debt and few job opportunities. The economy was struggling, government was bailing out industries, and CEOs were getting fired with $10 million bonuses.” However, even those who came out before the recession, started a career and bought homes, now owe more than their home is worth. “They came of age at a rough time and many feel the cards are stacked against them,” he says. “They could be the first generation in modern history that make less then their parents. It’s yet to be seen but worth thinking about.” So, is it a matter of companies changing to meet the needs of Millennials, or the other way around? “There’s always a balance to be met and the idea that we can meet in the middle,” Moya says.

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In researching the attitude of non-Millennials toward Millennials, Moya has discovered there is too much overgeneralization. “Companies think that every Millennial out there is lazy and has a bad work ethic,” he says. “But this is a generation that’s 80 million strong and those beliefs will be detrimental to any company’s success.”

“They’re also influencing their parents purchasing decisions,” he says. “The more that brands can connect with Millennials through social media, focus groups or other ways, the better.” They are also early adopters of technology. However, according to Moya, supermarkets really haven’t changed that much in the last century.

According to Moya, employers are making changes on the employee side and creating marketing campaigns that aren’t connecting with Millennials because they are taking a selective sample of that generation and making generalizations. “If you look at demographics, more than half of children born in America today are considered nonwhite,” he says. “Less than half of Millennials are considered non-white. Whereas you look at the Baby Boomers and the percentage was much lower. As such, demographics in terms of race and cultural identity that people are exposed to is much different. Millennials with different socio-economic backgrounds act in different ways. “Companies need to spend time with Millennials to understand who they are and not just look at a statistic,” he says. “You can’t base the future of a company on that. Within the next 10 years they will be 75 percent of the global workforce.” Meanwhile, companies have to understand and address this generation as consumers who may be at the beginning of their earnings cycle. “They want to participate and be engaged,” he counsels. “They want to co-create products, be included as partners and feel a connection to the brands they buy.”

“Companies need to spend time with Millennials to understand who they are and not just look at a statistic,” he says.

He cites Uber as a great example. “Their customer base started with Millennials who wanted to open their phone and tell them where they wanted to be picked up,” he said. “Now Uber’s customer base has extended toward Baby Boomers and others. And if you ask older generations how they learned about it, they will say their son or daughter told them.” This foreshadows a shift in retail to ideas like Amazon’s same-day grocery delivery. “I don’t see grocers investing in drones,” he says. “But there are grocery delivery services that will increasingly enable customers to click on an app, check off the boxes of products and pick up their order in 45 minutes without even pulling out a credit card.” Continued on p. 40

Plus, he adds, by 2018, research indicates Millennials will pass Baby Boomers in spending power.

“Today, you walk in to a grocery store, go to the shelf, pick out groceries and go through checkout,” he says. “But this is an on-demand generation that wants things now.”

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A perfect example, according to Moya, is the movement to organics and the locally grown, farmers market approach to food.

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Continued from p. 39

“I don’t see grocers investing in drones,” he says. “But there are grocery delivery services that will increasingly enable customers to click on an app, check off the boxes of products and pick up their order in 45 minutes without even pulling out a credit card.”

Additionally, the older generation can go to a supermarket and pick up ingredients for 10 different recipes.

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“Millennials don’t have that culinary experience,” he says. “They get on Pinterest, and Facebook to look up recipes and get advice from friends. It won’t be long before we see iPads at the end of aisles where people can click and get recipes for dinner options – recipes aisle-by-aisle.”

Millennials want something different and unique but don’t know how to make it. That’s why they often eat out rather than going to the grocery store. The more a retailer learns how to package things together and use technology to help Millennials get what they want, the more products they will sell, according to Moya. “When we talk to them about supermarkets, their greatest challenge is not being able to find things in

the store – they want technology to do that,” he says. “They don’t want to waste time finding someone who will walk them to the right aisle. They want an app to find it in 15 seconds.” If you look at what’s popular among Millennials, it’s an indication of what will be popular with all consumers in the years to come, Moya believes. “Often companies push back and don’t want to

change things just for Millennials,” he warns. “But by giving Millennials what they want, you are reaching other consumers as well. This generation is the barometer for the future and about the customers we’ll have for generations to come.” n Len Lewis is editorial director of Lewis Communications, Inc., a New York-based editorial planning, research and consulting firm. He is a contributor to several retail publications and trade groups in the U.S. and Europe and has been a speaker and moderator at numerous industry events. He can be reached at lenlewis@optonline.net or via his website www.lenlewiscommunications.com