California Grocer Issue 4, 2018

California

Super King Markets Reaches a Milestone PAGE 38

developing a safety culture 2018, ISSUE 4

CALIFORNIA GROCERS ASSOCIATION

PAGE 50

retailing with a

sixth sense page 22

September 23–25, 2018 | Palm Springs, California

HEIGHTEN YOUR BUSINESS EXPERIENCE In today’s fragmented, hypercompetitive and channelfree food industry, businesses are tapping into their sixth sense in order to win over today’s shoppers.

On-line and in-store, successful companies are becoming experts at knowing customer preferences and understanding how they engage with employees, stores and brands.

Empowered by innovations such as data analytics and artificial intelligence, retailers and brands are using technology to hone their intuitions to anticipate the needs of today’s digital first consumers. Businesses are executing new partnerships and retooling their operations to focus on executional excellence and efficiency in order to drive profitability.

Simultaneously, retailers are differentiating themselves by creating compelling experiences within the physical store that instill trust and enhance their personal relationships with customers. Leveraging staff expertise and talent, retailers are constructing convenient and appealing environments that please all the senses.

Come listen to top industry speakers, enhance your view of today’s customers, follow the scent of innovation to get a taste of what’s coming next, keep in touch with your most important partners and heighten your sixth sense about today’s customers.

This year’s powerful CGA Strategic Conference educational program features cutting-edge presenters and knowledgeable industry experts. The goal is to heighten your business “sixth sense” and prepare you to anticipate your customers’ needs.

FEATURED SPEAKERS VINH GIANG Inspirational Speaker, Magician The conference opens with an inspiring, entertaining, yes, even magical, exploration of the power of perspective, why we need to become more conscious of our environment (the people we spend time with), how to achieve the impossible and perhaps develop a sixth sense.

PETER SHEAHAN Entrepreneur, CEO Successful entrepreneur and consulting firm CEO, Peter Sheahan will encourage you to find opportunity in the change and disruption facing the grocery industry by solving the higher order problem consumers face, escaping the gravity of your own success, and being the best version of yourself.

KINDRA HALL Marketing Agency President, Chief Strategy Officer In Tuesday’s Keynote Luncheon, Kindra Hall will give you a blueprint for transforming mediocre communications into masterpieces that resonate in the minds of your customers, grow your business, and make you unforgettable.

GENERAL SESSION: BRAIN FOOD Back by popular demand, CGA presents three thought-provoking, TED-style presentations by uncommon voices that promise to challenge your thinking about our industry and where things are headed, and spark conversations about the disruptions occurring today and the future of the food business.

JOSH DOMINGUES CEO & Founder, Flashfood

MIKE LEE The Future Market

BRAD OBERWAGER Founder & CEO, Jyve

WHITEBOARD SESSIONS

INDEPENDENT OPERATORS FORUM

Often the best “ah ha” business lessons are the ones learned peer-to-peer. That’s the concept behind the conference’s popular WHITEBOARD SESSIONS. Facilitated by industry experts, these two 45-minute sessions allow you to dialogue and collectively brainstorm with colleagues across multiple categories about important trends and issues. Pick two and come prepared to learn, share and contribute.

Engagement expert Christy Largent will share her real-life stories that will help independent operators discover how to harness the power of Mindset to create an engaged culture, one that engages employees, increases collaboration and maximizes profits.

Next Gen Loyalty Ken Fenyo, Consumer Markets Lead, Fuel by McKinsey Brand Experience Andrew McQuilkin, Retail Leader, BHDP Architecture Frozen Re-Imagined Sue Toy, Sr. Dir. of Shopper & Total Store Solutions, Tyson Foods, Inc. Finding Future Leaders Dr. Ricky Volpe, Ph.D., California State University, San Luis Obispo

LOSS PREVENTION EXECUTIVE SUMMIT Popular keynote speaker Garrison Wynn kicks-off six hours of targeted loss prevention, safety and risk management educational programming with an entertaining and insightful look at creating an effective business safety culture. The Summit also includes prescheduled face-to-face business vendor/retailer business meetings and outstanding networking opportunities.

Grow Fresh Sales, Reduce Shrink Larry Miller, President, Smart Retail Solutions

FORE! Golf with The Illuminators Tee it up with your favorite grocery retailer or supplier at The Illuminators Annual Golf Tournament on Sunday, September 23. Tournament proceeds benefit The Illuminators Educational Foundation scholarship program.

To register online, visit illuminators.com. Questions?

Contact John Stall, jstall@navajoinc.com.

To learn more about this year’s CGA Strategic Conference visit:

REGISTER NOW!

CGASTRATEGICCONFERENCE.COM

CGA | BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS Independent Operator Committee Chair DIRECTORS

CALIFORNIA GROCERS ASSOCIATION

Second Vice Chair Phil Miller C&S Wholesale Grocers

First Vice Chair Kendra Doyel Ralphs Grocery Company

Treasurer Hee-Sook Nelson Gelson’s Markets

Kevin Arceneaux Mondelēz International Inc.

Dave Jones Kellogg Company

Lynn Melillo Bristol Farms

Jon Alden Jelly Belly Candy Co.

Mark Foley Raley’s

Bob Richardson The Clorox Company

Jaclyn Rosenberg Nielsen

Teresa Anaya Northgate Gonzalez Markets

Damon Franzia Classic Wines Of California

Doug Minor Numero Uno Market

Joe Toscano Nestlé Purina PetCare

Joe Angulo El Super (Bodega Latina)

David Higginbotham Stater Bros. Markets

Tim Murphy Costco Wholesale

Rob Twyman Whole Foods Market

Mark Arrington Post Consumer Brands

Michel LeClerc North State Grocery Inc.

Nicole Pesco The Save Mart Companies

Jim Van Gorkom NuCal Foods

Denny Belcastro Kimberly-Clark Corporation

Hillen Lee Procter & Gamble

Mike Ridenour The Kraft Heinz Company

Michael Walton Unilever

Jeanne-ette Boshoff MillerCoors

Eric Lindberg, Jr. Grocery Outlet, Inc.

Casey Rodacker Mar-Val Food Stores

Richard Wardwell Superior Grocers

Bob Bukovec Tyson Foods, Inc.

John Mastropaolo Chobani

Greg Sheldon Anheuser-Busch InBev

Karl Wissmann C & K Market

Brent Cotten The Hershey Company

Jonathan Mayes Albertsons Companies, Inc.

Jeff Sigmen Reyes Coca-Cola

Kevin Young Young’s Payless Market IGA

Willie Crocker Bimbo Bakeries USA

Joe McDonnell Campbell Soup Company

Lee Smith Smart & Final Stores

Steve Dietz United Natural Foods, Inc.

Mark McLean CROSSMARK

Rick Stewart Susanville Supermarket IGA

Jake Fermanian Super King Markets

Casey McQuaid E & J Gallo Winery

Elliott Stone Mollie Stone’s Market

President/CEO Ronald Fong

Senior Director Events & Sponsorship Beth Wright

Dennis Darling Foods Etc.

Senior Vice President Marketing & Business Development Doug Scholz Vice President Communications Dave Heylen Executive Director CGA Educational Foundation Shiloh London, CFRE

2 | CAL I FOR N I A G R OC E R

Secretary Renee Amen Super A Foods

Chairman Bob Parriott Twain Harte Market

Senior Director Government Relations Aaron Moreno Director CGA Educational Foundation Brianne Page Controller Gary Brewer

California Grocer is the official publication of the California Grocers Association.

1215 K Street, Suite 700 Sacramento, CA 95814 (916) 448–3545 (916) 448–2793 Fax www.cagrocers.com For association members, subscription is included in membership dues.

Subscription rate for non-members is $100.

© 2018 California Grocers Association Publisher Ronald Fong rfong@cagrocers.com Editor Dave Heylen dheylen@cagrocers.com For advertising information contact: Corey Gerhard cgerhard@cagrocers.com

CONTENTS | ISSUE 4

FEATURES

60

22

Legends of the Industry Scholarship winner –

Kimberly lee

In-Depth Look

Retailing with a Sixth Sense Despite the significant disruption rippling through the entire grocery industry, grocers and suppliers can survive and thrive – if they hone their business sixth sense.

COLUMNS President’s Message Laws are Just the Beginning. . . . . . . . . . . . . 6

38 Super King Markets Reaches a 25-Year Milestone Twenty-five years ago, the Fermanian family opened a single store centered on Eastern European and Middle Eastern customers. Today, Super King Markets caters to Southern California’s ethnically-diverse population, creating a truly international supermarket experience.

Chairman’s Message The Gift of Learning. . . . . . . . . . . . . . . . . . . 8 Guest Columns Bring “Cool” Back to Our Industry. . . . . . 11 Working Together to End Hunger. . . . . . . 66 Viewpoint Are You Ready?. . . . . . . . . . . . . . . . . . . . . . 12 Government Relations Prop. 47 Reform Efforts Continue. . . . . . . 16 Local Government Relations How Grocers and Local Governments Are Alike. . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Capitol Insider Initiatives Have Become Big Business. . . . 20

50 Developing a Safety Culture Creating a business culture of safety isn’t something that stops on the shop floor.

It must start with supervisors and the executive suite.

Washington Report Fixing The Qualified Improvement Property Drafting Error . . . . . . . . . . . . . . . 30 Mommy Blogger Mrs. Jekyll and Mama Hyde. . . . . . . . . . . . 68

DEPARTMENTS Grocery by the Numbers Scholarship Success. . . . . . . . . . . . . . . . . . . . 5 CGA News. . . . . . . . . . . . . . . . . . . . . . . . . . 32

62 15 Minutes With Josh Domingues

Outside the Box New Retail Perspectives.. . . . . . . . . . . . . . . 46 Foundation News. . . . . . . . . . . . . . . . . . . . 58 Index to Advertisers. . . . . . . . . . . . . . . . . . 67

It’s estimated that 30-40 percent of food goes to waste. How can grocers help stem the rising tide of waste? Josh Domingues has one answer.

CAL I FO RNIA GRO CER | 3

with

CATEGORY GROWTH SOLUTIONS

Join the Conversation: @HersheyCompany The-Hershey-Company hersheysolutions.com

Trusted iconic brands and expert category management deliver real solutions for sustainable growth.

GROCERY BY THE NUMBERS

scholarship

SUCCESS

since

1998

The growth of the California Grocers Association Educational Foundation college scholarship program has been nothing short of phenomenal. Since its inception in 1998, the Foundation has awarded $5.8 million to CGA member company employees and their dependents. For the 2018-19 program year, the Educational Foundation offered more than 350 scholarships totaling in excess of $600,000. This includes five types of scholarships: CGAEF Funded, Legacy, Donor, Endowed and Piggyback Scholarships. To learn more about the CGAEF College Scholarship program, visit cgaef.org.

$5.8 million in Awards

398 offered This year,

cGAEF

scholarships totaling

$691,750

CGAEF THROUGH THE YEARS Year

number applications awarded

amount awarded

1998

N/A

1

$2,000

1999

33

1

$2,000

2000

52

19

$22,000

2001

326

52

$43,500

2002

499

88

$80,500

2003

328

107

$111,000

2004

436

141

$141,000

2005

663

203

$213,500

2006

777

219

$251,500

2007

870

251

$285,000

2008

793

260

$314,000

2009

1,073

263

$315,500

2010

924

246

$296,500

2011

926

206

$278,750

2012

1159

257

$340,250

2013

894

291

$358,750

2014

1759

293

$408,000

2015

1571

327

$552,500

2016

1477

371

$588,100

2017

1645

341

$574,100

2018

1654

378

$678,750

CAL I FO RNIA GRO CER | 5

PRESIDENT’S MESSAGE

Keeping in Touch

RO N F O N G PR E S IDE N T AN D CEO CALIFOR N IA GR OCE R S AS S O CIATIO N

Two exciting events reflect the Association’s commitment to providing greater value for its members.

I’m also pleased to report that we have officially started the remodeling of CGA’s new headquarters in downtown Sacramento.

An update on our groundbreaking is on page 34.

Global leaders have their World Economic Forum.

Our new headquarters represents a real milestone for the Association. It’s the first structure CGA has purchased in its 120year history and solidifies our presence in Sacramento. Owning our building will stabilize our rent and give the Association greater control of its finances.

Economists have their Jackson Hole Wyoming Symposium.

Independent filmmakers have their Sundance.

economic outlook, the state’s future political headwinds including healthy food legislation and ballot initiatives, and a meaningful discussion regarding implicit bias within our organizations.

CGA now has its Leadership Summit.

This historic building, constructed in 1925, will retain its retail occupants on the ground floor while CGA will occupy the second floor and lower level. The entire structure will be managed by our newly-created property management company, Aisle 3 Concepts, LLC.

For the first time, the California Grocers Association brought together a small group of executives from California’s diverse retail grocery industry for two days of collaborative and honest discussions about the issues that impact Californians every day.

Our industry’s vast consumer reach and contributions to the state’s economy places grocers in a unique position that impacts the quality of life in California.

Additionally, as one of California’s largest employers operating in a complex and highly-regulated industry, it is critical for business leaders and elected officials to foster open dialogues and detailed understandings of important issues.

The interactive, two-day agenda included moderator-led discussions and insightful presentations regarding California’s 6 | CAL I FOR N I A G R OC E R

Future CGA Headquarters

CGA hosted this event in fulfillment of its most recent strategic plan and to provide an opportunity for industry leaders to gather and address big-picture issues affecting our businesses with each other and with several of California’s top elected officials.

These new additions are just two examples of our on-going effort to keep in touch with you, our valued members, and provide useful programs and services to help you grow your business. Your Board of Directors and staff will continue in the coming months and years to develop meaningful programming and explore new growth in an effort to strengthen and improve California’s grocery industry. ■

We are committed to ending hunger in our communities and eliminating food waste in our company by 2025.

Follow our journey at

TheKrogerCo.com and #

CHAIRMAN’S MESSAGE

Stepping into the store of the future

B O B PA R R I OT T T WAIN HAR TE MAR K ET

Several months ago I was privileged to attend an immersion workshop called Retail Tomorrow.

This year’s Retail Tomorrow workshop was in Seattle, Wash., and sponsored by Global Market Development Center (GMDC).

The workshop included visits to Starbucks Reserve Roastery, Amazon Go, REI Flagship Store, Microsoft Retail Experience, as well as additional presentations packed into a three-day, fast-paced experience.

The next day we were off to the Microsoft Retail Experience. We toured the 20,000 sq. ft. facility of fully-functional store environments that simulate the real-world shopping experience to test and create new solutions for our industry. Very impressive, although in some cases, it felt like we were developing a solution, and then trying to find a problem to match.

The Starbucks Reserve Roastery was our first stop, and it’s the Disneyland of coffee roasting. There they roast all of the brand’s specialty coffees for the continental United States, running around the clock to meet its incredible demand.

In fact, demand is so great that Starbucks has plans to build three or four more roasteries. They even have a working lab to sample new products and learn about new procedures, along with new food and beverage styles. It’s all very impressive.

Next on the tour was a visit to the first prototype of the Amazon Go retail store.

This was a mind-blowing experience on the level of my Jimi Hendrix days.

As you enter the store, you walk through a turnstile where a QR code that links to your Amazon Prime account is scanned. You shop for as much or as little as you’d like (Bags are available throughout the 5,000 sq. ft. store). It’s very similar to your typical 8 | CAL I FOR N I A G R OC E R

After Amazon, we visited the REI Flagship Store. It had everything needed for outdoor enjoyment displayed in mini villages.

There were tents, canoes, outerwear, footwear, backpacking supplies, etc., all in large multi-story opulent displays.

Retail Tomorrow was the most impactful three days in my food industry career.

It allowed me to step back and look at a much bigger picture of the future. If you want a glimpse of things to come, I highly recommend you attend next year! ■ Richard Draeger, Draeger’s Supermarkets, with CGA Chair Bob Parriott, Twain Harte Market.

convenience store, featuring all kinds of snacks, beverages, sandwiches, box meals, produce, fresh meat, and desserts.

When you’re done, you simply walk out through a turnstile – that’s it. You’re only interaction with a person is to verify your age for beer/wine purchases. Ten minutes later a receipt shows up on your phone.

I felt like a shoplifter!

To us, local means

California

We’re proud to offer more of what Californians are looking for – from locally grown produce to California-raised USDA choice meat.

Long before local was cool, our family of stores made it a priority to buy direct from local growers. In fact, some of our current relationships with farmers started over 60 years ago.

We’re working hard to be California’s favorite grocer. In our neighborhoods, we are focused on developing offerings unique to the California lifestyle, we’re dedicated to contributing to the community, and we’re honored to call nearly 70,000 Californians our employees.

To us…

Local means fresher

|

Local means better |

Local means California

NORTH STATE GROCERY, INC.

Congratulations

to our 2018/19 Scholarship Winners

Yasmine Avila

Carolyn Manley

Nicole Batman

James Reese

Alison Lee

Ardyn Van Note

GUEST COLUMN

Bring “Cool” Back to Our Industry

B R A D A S K EL A N D V P, N OR THER N DIV IS ION,N ORTH STATE G RO CERY, INC. CHAIR MAN, CGA EDUCATION AL FO UNDATIO N BOARD O F TRUSTEES

To recruit and retain the best workers, the grocery industry must create new opportunities for growth.

As minimum wage continues to rise, the competition for the best workers will continue to become fiercer. To compete, we must have a work environment that encourages personal growth and presents opportunity for career advancement that is different from our competition.

We have all heard the stories of those individuals that started out as courtesy clerks and spent their entire career in the grocery industry working their way up to executive positions. A perfect example of this is George Frahm, who began as a janitor and 45 years later is now President of Stater Bros. Markets. Unfortunately, these stories are becoming less frequent, and we’re all faced with the challenge of bringing the “cool” factor back to our industry.

The CGA Educational Foundation understands this challenge and is committed to strengthening the grocery industry by empowering our people to learn and grow. We understand that to do this we must inspire passion for the industry, continue to enable access to education, and support industry vitality.

We are excited to announce that through the support of the CGA Independent Operators Committee (IOC) we are offering a one-day Store Leadership Seminar conducted by Harold Lloyd for both Northern and Southern California.

This will give our independent operators and their leadership teams the unique opportunity to further develop their leadership skills and be given a blueprint to increase employee retention probability in their stores.

In addition to these educational opportunities, the Foundation continues to achieve incredible results through its college scholarship programs. The Foundation recently awarded 378 college scholarships, totaling a record amount of $678,750, and awarded our first “Legends of the Industry” scholarship in the amount of $10,000 to Kimberly Lee, Food 4 Less (Kroger) employee (See story on page 60).

The Foundation is committed to providing additional platforms to empower your people to learn and grow and we are excited about what lies ahead.

The future of our industry is as bright and “cool” as we want it to be, but the challenge is on all of us to continually engage our people, understand what drives them and give them the opportunities they need to grow in our industry and be successful. ■

s ’ t lte’s w leGro w o Gr

VIEWPOINT

Are you ready?

K EV I N CO U PE FOUN DE R , MOR N IN GN E WS BEAT.CO M

Technology coupled with consumer demands and expectations are reshaping retail. Are you ready?

I love the old story about how different kids react to being put in a room filled with horse manure. One sits there, dejected. He is, after all, in a room full of horse poop.

But the other one plunges in and starts throwing it around. “There’s got to be a pony in here somewhere,” he says.

Perception and attitude are everything.

That’s certainly the case in the National Football League, where there is an adage: “On any given Sunday, any team can beat any other team.”

In other words, play the game, because it's always possible for a team that appears weaker to outplay and defeat a team that appears stronger.

Damn right.

First of all, the word “appears” is important…because appearances are relative. One retailer may be smaller and seemingly less prepossessing than another, but can…and indeed, these days should…have strengths that allow it to be competitive.

The challenge, of course, is that these days, on any given day, there are developments that have the potential for changing the nature and rules of the game.

12 | CAL I FOR N I A G R OC E R

I remember that when I was starting to write about this business many years ago (not only was it pre-cell phone and prefax machines, but I wrote my stories on an electric typewriter), one of my bosses used to say that “there are no revolutions in this business, Kevin. There is just slow evolution.”

That was then. This is now. Revolutions now are commonplace, and it is hard to plan when revolutionary developments are taking place almost daily.

To change sports for metaphorical purposes, it’s good to remember the words of Mike Tyson: “Everyone has a plan ‘till they get punched in the mouth.”

There was a 48-hour period not that long ago that illustrated exactly how fast the world is moving, and what retailers need to do to keep up.

Zenith came out with a Media Consumption Forecast predicting that this year the average person will spend a whopping 479 minutes, or nearly eight hours a day, consuming some form of media. That’s a 12 percent increase from just seven years ago.

And, the same forecast said one-quarter of this time (24 percent) will be spent using mobile devices, a number expected to increase to 28 percent by 2020.

Are you ready?

Albertsons announced that it is getting into the genetic testing business, working with a company called Genomind to test a service in select markets that offers shoppers counseling and access to genetic testing that will allow them to make more informed treatment choices.

Not only that, but it isn’t hard to imagine that people who use the service will also be able to be savvier in their food choices.

If a customer is genetically predisposed to cancer, for example, he or she then can purchase foods that are rich in lycopene.

This isn’t an entirely new idea; in Minnesota, Lunds & Byerlys was testing such a service more than a decade ago. But this move by Albertsons underlines the degree to which technological advances can reshape how foods and medicines are marketed and merchandised.

Are you ready?

Best Buy announced that it has determined that senior citizen health care is a category of great opportunity for sales and profits.

CEO Hubert Joly – who, I think, has engineered a dramatic turnaround at the electronics retailer, preventing it from going the way of Circuit City and Crazy Eddie’s – told investors, “We already assort a variety of health-related products and technology products designed for seniors like specially designed phones and medical

VIEWPOINT

alert systems. We’re also testing a service called Assured Living to help the aging population stay healthy at home with assistance from technology products and services…one of the things we’ve talked about is how technology can help people stay in their home for longer, and there’s a lot of excitement around helping people do that,” because it “improves people's health and wellness and reduce[s] health care costs for the country.”

Joly described the Best Buy sweet spot this way: “key human needs in areas such as entertainment, productivity, communication, food preparation, security, and health and wellness.”

The first edition of this concept opened on Melrose Ave. in Los Angeles more than a year ago, and now the retailer plans to open two more in Southern California, reinforcing a sentiment expressed by Blake Nordstrom: “We think we have the underpinnings of something very special there.”

I think Nordstrom is very smart to keep developing this format, which acknowledges that there are fundamental changes taking place in the department store model.

(Some experts believe that as many as onequarter of the nation’s malls could close in coming years because they’re simply irrelevant to how people live their lives.)

“The supermarket industry isn’t going through exactly the same changes, but it would be foolish to think that somehow it will be immune to all these shifts and revolutions.”

That’s a pretty broad definition in terms of services, but highly specific concerning demographics and pain points. Whether Best Buy is successful or not, Joly certainly has identified an opportunity on which lots of retailers could capitalize.

You can change, or you can die. Pretty simple, I think…and Nordstrom is trying to become more than a source of product for its shoppers and shift to a business model in which it also is a resource for information and services.

Are you ready?

The supermarket industry isn’t going through exactly the same changes, but it would be foolish to think that somehow it will be immune to all these shifts and revolutions.

Nordstrom announced that it’s going to continue growing an experimental concept – a store without merchandise, called Nordstrom Local.

The 3,000 square foot concept is designed to be a place where customers can pick up and try on products that they’ve ordered online, access alteration services, take advantage of stylists’ expertise, and maybe have a glass of wine or cup of espresso while doing so.

The World Economic Forum and Boston Consulting came out with a study saying that “almost 1 million Americans will see their occupations vanish entirely by 2026, and will have to train for a wholesale career change, or probably not find equally paid work.”

This is a corollary to a prediction made by Google that 65 percent of children entering elementary school this year will end up in jobs that don’t yet exist.

Those reflect remarkable changes in the economy and the culture. Are you ready?

Taken together, these are more than just a punch in the mouth. They represent a series of body blows, a hammering of traditional ways of doing business for which retailers must be prepared.

Here’s the good news. (You knew there had to be a pony in here somewhere.) You know it is coming. You are not being blindsided.

You know that your world is being reshaped by technology, that consumer expectations are expanding, and that demand for compelling, differentiated shopping experiences are growing.

You know.

The question is, are you ready? ■

Are you ready?

CAL I FO RNIA GRO CER | 13

“Excellence is not a skill. It ’s an attitude.”

– Ralph Marston

i

El Super salutes its 2018 scholarship recipients as they continue pursuing academic excellence.

We’re happy to support their efforts!

Sheila Acosta

Alejandra Aguirre

Florence Bravo Villanueva

Lorena Cabrera

Lisset Cambray-Garcia

Yvonne Gonzalez

Brenda Gutierrez

Estefania Hernandez

Jocelyn Hernandez

Maria Lora

Monica Lopez

Elva Moran

Alexander Perdomo

Yamilet Perez

Guillermo Ramirez, Jr.

Sarahi Stoddard

GOVERNMENT RELATIONS

Prop. 47 Reform Efforts Continue

A A RO N M O R EN O S EN IOR DIR ECTOR CGA GOV ER N MEN T R ELATION S

Despite a push for this upcoming election, an initiative to amend Prop. 47 qualifies for the 2020 ballot.

For the past three years, one of CGA’s top legislative priorities has been finding a way to reduce the growing theft epidemic plaguing grocers and retailers across the state since voters passed Proposition 47 in 2014.

shoplifting and theft as it related to Prop. 47.

And in an attempt to be hyper-focused on the issue, we only sought to penalize repeat offenders. At no time did we or any of our supporters suggest repealing Prop. 47.

While the measure was well-meaning, with its decriminalization of drug addiction and its policy shift towards treatment rather than incarceration, the measure has some flaws.

And, because of apparent misunderstandings with some legislators and opponents of the measure regarding Assemblymember Cooper’s theft legislation, it is important to stress, again:

The biggest flaw is the initiative's raising of the felony threshold for theft and shoplifting from $450 to $950. This significant increase has caused California businesses severe headaches as they deal with a new class of criminal who understands that if they steal $949 or less from an establishment they won't receive significant jail time should they be caught.

Responding to CGA-member outcry, the Association has sought legislative fixes with the understanding that any measure addressing this issue would ultimately have to go to the ballot for approval because the only way to amend an initiative in California is by another initiative.

Our proposals, authored by Assemblymember Jim Cooper (D-Elk Grove), were focused only on the issue of

16 | CAL I FOR N I A G R OC E R

At no time did we or any of our supporters suggest repeal of Prop. 47.

In spite of making this incredibly clear, and in spite of several legislators in a position to help this bill move through the process stating both publicly and privately that there was indeed a growing shoplifting and theft problem facing California grocers and retailers, Assemblymember Cooper’s legislation was never allowed to advance.

Realizing the Legislature would't implement a reasonable fix to some of Prop. 47's unintended consequences, CGA partnered with Assemblymember Cooper and others to qualify a ballot measure.

The Keep California Safe campaign started in January in response to legislative inaction, not only on theft, but on reclassification of

non-violent felonies, DNA collection for cold cases, and accountability for those who violate the terms of their early release.

All four parts of the initiative are measured reforms to Prop. 47 and Prop. 57. The campaign coalition of grocers, law enforcement, victim’s rights advocates and elected officials are united to mend the aforementioned initiatives, not to end them.

After months of hard work by coalition partners, the initiative recently qualified for the November 2020 ballot. Though November 2018 would have been preferred, the extra two years will allow the coalition time to raise money to mount an initiative campaign that already polls well over 60 percent when described to voters. Perhaps most importantly, it allows for a legislative solution to come together which would render the initiative unnecessary.

A lot can happen between now and November 2020, but regardless of what does, reducing theft and shoplifting will continue to be a top priority for CGA. We remain committed to working with anyone seeking to solve a problem that even lawmakers who have opposed past legislative efforts realize exists. If there is a legislative fix to be had, we would certainly embrace it. But if there isn’t, there is comfort in knowing we have the luxury of waiting until 2020 for the people to have their say.■

CELEBRATING YEAR S

Grocery Operations: We Smooth ‘em Out • Availability of cart assets to • perform for customers

• On-site, quick return-to-action • • convenience

• Manufacturer reimbursement for • faster cash flow

• Detailed reporting from an • accountable partner

• Cart Locking System Parts • and services

• Real-time online reporting

• Cart Transfers

• Reduce cart cleaning and • maintenance costs

• Easy sorting, tracking and • calculating with our innovation • • coupon system

“To ethically provide excellence through innovative retail solutions for our customers by increasing their return on investment.”

1020 N. Lake Street Burbank, CA. 91502 818.817.6712 www.retailsolutionsus.com

LOCAL GOVERNMENT RELATIONS

How Grocers and Local Governments Are Alike T I M JA M ES S EN IOR MAN AGER LOCAL GOV ER N MEN T R ELATIO NS

In the government relations world it is important to always be looking for connections.

Whether piecing together new coalitions of allies, or deciphering the intent of opponents, making connections matters.

As we look to make connections at the local government level it has become apparent that local municipalities and grocers have several similarities. Below are a few I know you can relate to as a grocer.

Transparency Neither grocers nor local governments can hide anything and they shouldn’t.

Consumers and constituents, who are the same person, notice everything. If a store moves a product from one aisle to another or stops selling a specific item consumers notice immediately, mostly with complaints. For a city there is the same scrutiny, like when they install a new traffic signal or change the hours of a library. Every little, or big, change is discovered, discussed and scrutinized.

For both stores and local governments this demand for transparency can actually be a benefit. Changes create opportunities for engagement and conversation – allowing the store or city a chance to explain themselves and their vision. Being transparent creates constituent confidence and consumer engagement and should be practiced by both grocers and local governments more often.

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Others Know Your Job Better Than You Do Everybody knows how to run the city better than the mayor. And everybody knows how you should organize your store better or how to price items better than you. But very few people actually know, and appreciate, the tremendous amount of effort involved behind the scenes to keep store shelves stocked and the fire department responding quickly.

serve and regulate our industry. Without sharing our stories local decision makers might start to believe they actually do know our business better than us.

Competition Competition in food retailing is more fierce than ever with numerous purchasing options, social media speeding the pace of consumer decision making, and service and vision being major points of decision making. The exact same is true for local government elected officials. As public servants every action is directly in the view of constituents and being questioned or challenged often.

While details may differ, both grocers and local elected officials must consistently deliver a high level of service and a relatable vision. If they fail to produce, the store loses the customer and the councilmember is voted out. As grocers, we should constantly challenge ourselves to find the cliché “winwin” scenario for local elected officials. ■

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The grocery industry and local governments should regularly allow a peek behind the curtain, so others can appreciate the heavy lifting and dedicated workers. CGA works to show local government officials the challenges of food retail so they can better

Congratulates its 2018 scholarship recipients!

Arettzy Arzate Daughter of Liliana Hernandez

Karla Ash Employed by Gelson’s Markets

Cierra Garza Daughter of Darlene Garza

Brianna Johnson Daughter of Gretchen Johnson

Hannah leNoir Daughter of Thomas leNoir

Adriana Macias Daughter of Tracy Macias

Meighann Mahoney Daughter of Timothy Mahoney

Nhung Tran Daughter of Chu Ngo

Victoria Vasquez Daughter of Samuel Vasquez

Emily Gillmore Daughter of Richard Gillmore

CAPITOL INSIDER

Initiatives Have Become Big Business LO UI E B ROW N IN T HE S ACR AME N TO OFFICE O F K HAN, S OAR ES AN D CON WAY, L L P

Changes in California’s century-old initiative process is undermining its original intention – allowing citizens to engage in direct democracy.

Brown

California’s form of direct democracy, the initiative process, was established in 1911. This process allows citizens to enact legislation directly. Ironically, this “reform” measure was enacted over concern of the influence special interests had over the Legislature.

Today, the initiative process is a yearround activity, overseen by an industry of consultants, signature gatherers, and attorneys hired by those same special interests for which the system was created to regulate.

The process, as outlined on the Attorney General’s website is simple. First, write the text. Second, submit the language to the Attorney General for title and summary, along with a $2,000 filing fee. After title and summary are obtained, signatures are gathered. They are then turned into the county elections officials for verification.

The Secretary of State then determines if the initiative qualifies or fails, depending on the verification of signatures. The final step is to go before the voters.

While the process sounds easy, it is far from it, and the statistics prove how difficult it is to get an initiative to the ballot. According to the Secretary of State, between 1912 20 | CAL I FOR N I A G R OC E R

and 2017, 1,996 initiatives were given title and summary and cleared for signature gathering. 1,483 (75 percent) failed to qualify. Only 376 initiatives qualified for the ballot, with about one-third (132) being approved by the voters. So, only 6 percent of the initiatives starting the process actually have been approved by the voters.

The rules for circulation and qualification are technical and complicated. Additionally, California’s electorate is constantly changing.

Combined with the cost of signature gathering, which is estimated on average to be at least $2-$3 million, it is easy to understand why the failure rate of initiatives is so high.

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The initiative process has seen an uptick in use since the1970s. Laws like Proposition 13, limiting property taxes, Proposition 65, warnings for products that cause cancer, and Proposition 98, minimum funding levels for education, have all been enacted. After 1970, the independent redistricting commission and term limits were established by the initiative process.

Out of concern for the lack of transparency that comes with the initiative process, the Legislature adopted a variety of reforms including the requirement for an informational hearing before the appropriate legislative committees and the ability for a petitioner to withdraw an initiative after it has qualified. The implementation of these changes made for significant political fodder this year, prior to the Legislature’s Summer recess.

CAPITOL INSIDER

In particular, two initiatives were withdrawn from the ballot at the deadline because legislative compromises were reached. I use the term “compromise” loosely because both deals were agreed to reluctantly and were seen as the lesser of two evils.

law can continue to be amended with a majority vote of the Legislature, rather than needing to go back before the voters.

So, issues dealing with club cards, which the bill most likely impacts, can be addressed in the near future.

“The Consumer Right to Privacy Act of 2018” was placed on the ballot by Bay Area developer Allister MacTaggart and was opposed by virtually all business, retail and technology associations and companies.

The initiative borrowed heavily from a broad range of global privacy and consumer protection rules and created stiff penalties for any company that fails to comply.

“The Tax Fairness, Transparency and Accountability Act of 2018” was placed on the ballot by the California Business Roundtable, an association representing business interests. It was opposed by local governments, public safety and public employee unions. The initiative would have amended the State Constitution to increase the voter threshold on local tax ordinances to two-thirds of the electorate.

While AB 375, the compromise bill, provided little improvement on the initiative, the opposition still saw it as a better approach – primarily because the

Recently, a growing number of local tax measures have targeted grocery products, like soda. The resulting compromise was

SB 872, which prohibits local governments from enacting local taxes or fees on grocery products and packaging through 2031 – essentially eliminating soda taxes at the local level.

To some, the new process has been a success because it allowed the Legislature to engage in legislative matters of statewide importance, rather than outside interests. To others, this was just a new form of special interests abusing a process. Either way, the process has failed its original purpose of providing the average citizen the ability to engage in direct democracy.

Like it or not, without significant reforms to the process, the actions of this year will become more common and part of our legislative process every two years.■

Looking to a

bright future!

Congratulations to this year’s scholarship winners!

CAL I FO RNIA GRO CER | 21

in-depth look

Retailing with a sixth sense

By Jessica Dumont

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According to the “Digitally Engaged Food Shopper,” a study from Nielsen and the Food Marketing Institute conducted this year, 70 percent of consumers will buy groceries online by 2024.

D

espite that significant statistic and the disruption that is happening to traditional grocery stores because of technology and innovation, industry experts say brick-and-mortar grocery stores are here to stay.

“Retail is a visceral experience for many. The human enjoyment of going to a store to shop and browse, that means brick-and-mortar is here to stay,” says Gary Saarenvirta, CEO of Daisy Intelligence, a firm that has developed artificial intelligence (AI) solutions for retailers.

But if you want to survive, you have to evolve strategically. To find lasting success in the future, grocers must tap into a sixth sense to give shoppers a reason to choose them, whether from an app or in the store.

The Future of Grocery is the Shopper The grocery store today is an omnichannel, hybrid experience – one that blends the use of customer data and AI with human intuition to craft a delivery or in-store experience that engages people socially and sensorially.

Central, and perhaps most important, to the future of grocery is the shopper.

“I think there is going to be a dramatic shift in the way consumers buy groceries, and that is going to affect the business model between brands and retailers,” says Doug Stephens, founder of Retail Prophet and a retail industry futurist. “The winners in retail grocery are going to be those who appreciate that what they are really selling is authority around food.”

Max Elder, Research Manager for the Food Futures Lab at the Institute for the Future (IFTF), a think tank located in Palo Alto, Calif., says the industry needs to move beyond the term “consumer.”

“We at IFTF often say that the consumer is dead,” Elder says. “We need to move beyond the limiting term ‘consumer’ and instead begin to think of these people as engaged eaters. They are already showing signs of making more informed purchasing decisions and consumption behaviors based on new technologies and practices.”

For example, Elder says IFTF research indicates that people are becoming more interested in participating in food production, and that eaters are showing concerns about food quality and safety, among other elements central to food.

Continued on page 24 ▶

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◀ Continued from page 23

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“I think there is going to be a dramatic shift in the way consumers buy groceries, and that is going to affect the business model between brands and retailers.”

Last year, IFTF conducted ethnographic interviews of everyday eaters around the world, and found that people are showing aspirations to align their food preferences with the environment, seek justice and nourish both their bodies and minds, to name a few.

“I don’t think these values are anything radically new, but what is new is how these values are being enabled, amplified and emboldened by a new suite of technologies that consumers are bringing to everyday purchasing decisions,” Elder says.

This raises a few questions, he says. How will grocers or food producers integrate all of this new data into their systems? How will they manage the demands of food safety and quality, and how might grocers plug into these new robust datasets in meaningful ways to drive new product offerings and services to meet the aspirations of eaters?

According to a food map developed by IFTF, the future of shopping will no longer be an episodic event, but rather something that can be done anytime, anywhere as shoppers demand the real-time convenience of the Internet in a physical world.

This likely means people will shop in multiple locations and through numerous channels – whether they purchase groceries both online and in-store, or perhaps order online but pick up at the store.

Paco Underhill is the founder and CEO of Envirosell, a principal testing agency for prototype stores worldwide that has worked with the grocery industry for more than 30 years. Underhill is also the author of grocery bestseller Why We Buy: The Science of Shopping.

According to Underhill, nearly 80 percent of American households are unable to accept online purchases at their homes or places of work during the day. This, he says, creates an opportunity for retailers somewhere between an online grocery purchase and the in-store experience.

“Is there a better way for the grocer to be able to facilitate what happens at the curb?”

Underhill asks.

He says that grocers must find a way to configure the outside of the store to offer a more interesting experience, while capitalizing on efficiency, for those shoppers who participate in curbside pick-up.

Reimagining the Traditional Grocery Experience Some consumers may dread the task of grocery shopping, while others crave a connection to their food and an experience that will stand out from the traditional supermarket experience.

“If we’re being completely honest about it, the grocery store experience we know today is one of the most archaic experiences we have in our daily lives,” Stephens with Retail Prophet says, adding that it is astonishing that the grocery shopping process has hardly changed in 50 years.

Stephens sees the grocery store of the future being much more experiential.

“It won’t look or feel or act like the grocery store of today. In fact the grocery store of today is going to become essentially a dark store and will become a warehouse that will fulfill needs locally for shipping and distribution,” he says.

Across the country, grocery stores use the same old chassis design, but it is high time the standard chassis be reconsidered, according to Kevin Kelley. Kelley is a cofounding partner and principal with Shook Kelley, a firm that helps food and retail companies build markets and concepts that will resonate with their customers. Their staff includes not only designers and architects, but business strategists, experts in branding and advertising and cultural anthropologists.

Reimagining the in-store experience can be done in a number of ways – from redefining how products are presented and curated to reimagining the store layout, but it requires intentional strategy, rather than just a

cosmetic overhaul. Kelley says that grocers must identify their major value proposition and figure out how to connect it to the consumer in the store.

out on the floor to help organize where people stand and get them ready for the transaction?”

“Sometimes people are changing stores just to make them prettier. The unintended consequence is they often just raise the price perception. This can confuse customers, particularly if it doesn’t connect with the marketing or brand. Dressing up the store can really mess it up,” Kelley says.

The answer, he says, is to have one to two cashiers on the floor. If grocers guide people and check in with them, they take better control of the situation. On a busy Saturday, that will bring tension level down dramatically. The in-store experience is not just about design and product offerings, but managing peak hours and store operation.

He says 90 percent of a consumer’s brand perception occurs through the actual shopping experience, rather than through an ad or other marketing tactic. This puts a lot of pressure on grocers to get the store experience right.

Another way to improve shopper experience is to use the information at hand to offer something better. For example, Underhill says if seniors and young mothers are the primary shoppers on a Monday morning, a grocer can change what is on sale. Or,

“it’s no surprise that 45 percent of grocery executives say keeping up with advancements in technology keeps them up at night.”

“As humans we like to use our senses first. That’s the way we relate to things,” Kelley says.

In the new age of shopping we live in, Kelley says customers are constantly asking themselves what the payoff is for going through the trouble of driving to a store – and grocers must have compelling reasons for why that payoff will be worth the effort.

“The one thing that still really big is consumers love learning, they love discovering, they love socializing, particularly around food,” Kelley says.

To create demand, Kelley says you have to create value beyond what the industry has already established. For example, if a store is willing to put in an oyster bar or wine bar, or some other specialty indulgence, customers may deem the experience worthwhile.

Underhill, with Envirosell, agrees it is essential to improve the in-store experience, not just to provide enjoyment, but to address people’s demand for efficiency and speed.

Underhill paints this picture: “It is a Saturday afternoon. The store is really busy. I have 11 cashiers. Do I open 11 cashier stands or open 10 or nine, and put cashiers

perhaps, offer “seniors hours” on Wednesday afternoons between 1:00 and 3:00 p.m. and provide additional help to load groceries into shoppers’ cars. Then, what was once a busy grocery store is now personalizing for different customer segments and providing memorable service.

“The irony is that in 2018 we are collecting all this data, but the question becomes, ‘What do I do with all that information?’ Is there a tactical action that we can take store by store that we can put into store manager’s playbook to actually move the needle?”

Underhill says.

to do around merchandise planning, what products to promote, what prices to charge, and those are difficult problems when you have 50 to 100 thousand products, and you have to figure out what the optimal promotion is,” says Saarenvirta of Daisy Intelligence.

While analyzing endless data is a difficult problem for humans, Saarenvirta says this is where AI can come in to help retailers make smarter choices to increase profits and revenues.

AI is also a major tool for grocery delivery startups, such as Farmstead, which launched in 2016.

According to an article in Grocery Business, Farmstead CEO and co-founder Pradeep Elankumaran said, “Farmstead’s goal is to fundamentally transform the American grocery experience with AI technology.”

The article also states that Farmstead utilizes technology to source and deliver local food from farm-to-fridge within 60 minutes, and predicts consumer habits to reduce grocery and delivery waste.

On its website, Farmstead claims supermarkets are “a terrible experience and wasteful” – and also says that it is modernizing the grocery supply chain to deliver fresh and locally sourced food, reduce waste and save time and money.

Continued on page 26 ▶

The Rise of Data and Artificial Intelligence With the prevalence of data collection and the introduction of AI to the grocery game, it’s no surprise that 45 percent of grocery executives say keeping up with advancements in technology keeps them up at night, according to Progressive Grocer’s 85th Annual Report of the grocery industry.

“I think there are certain problems in grocery retail that are very difficult for humans CAL I FO RNIA GRO CER | 25

◀ Continued from page 25

Yet while AI software is a significant part of Farmstead’s process, the company also says on its site that team members hand-pick and hand-inspect items for its customers, showing that there is still a need for human connection and service within the AIpowered landscape.

Concerns over Artificial Intelligence The prevalence of data brings up questions of security and privacy for consumers. According to Saarenvirta, there’s a lot of concern about privacy and ethical use of data, but Daisy’s approach is completely ethical, using reality and transaction data from the grocer.

And when it comes to using AI tools, what about smaller grocers who may not have the same resources as corporate entities?

Saarenvirta says the cost of technology is declining all the time, and a retailer does not have to install anything or purchase any equipment to use AI. He says the industry is only going to get bigger, and AI can help grocers succeed and thrive.

“Ultimately in the long run this technology will help retailers of every size,” he says.

A Look at Innovation in the U.S. and Abroad Here in the U.S., there are brick-andmortar retailers that are thriving even in today’s competitive landscape due to their own intuition and knowledge of their customer base, as well as new tactics and store concepts.

“the real innovation may be taking place internationally, according to Underhill with Envirosell.”

“The grocery landscape has experienced a ‘perfect storm’ of price pressures, heightened competition and increased expectations from shoppers,” Cindel says. “We have set the standard for quality and affordability, and our innovative business model gives us flexibility to adapt quickly. Today’s shoppers are pressed for time and money.

We pioneered a model that addresses both issues.”

A typical ALDI store is 12,000 square feet of retail space, which Cindel says is much easier to navigate than a big-box store.

ALDI adheres to a simple layout, with only four or five aisles. Every ALDI has a similar layout, so customers always feel like they are shopping at their local ALDI store no matter where they are.

ALDI also accepts Apple Pay, Google Pay and all other forms of contactless payment at all of its stores to make checking out faster and more convenient.

“Our shopping experience is designed to make life easier for people and to offer highquality food at affordable prices,” Cindel says.

“This has made us one of the fastest-growing retailers in the U.S. and a favorite among savvy shoppers.”

While ALDI does not mention any futuristiclike innovations, the store has a clear sense of what its shoppers want and need: quality food at a good price.

Raley’s has taken a different direction in expanding its brand in Northern California.

Earlier this year, the company launched Market 5-ONE-5, a modern specialty market focused on health and well-being.

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“If you apply that and listen to what customers are telling you through their purchases, the AI is invisible. Customers will just feel they have the products they like, the prices are fair, they seem to have value.

The customers enjoy the experience more because the grocer is meeting their needs, and then they’ll consolidate their purchases to the store that is doing a better job,” he says.

26 | CAL I FOR N I A G R OC E R

For example, shoppers and media continue to buzz with excitement about ALDI, which has doubled its sales in the past five years – and plans to double them again over the next five years, according to Tom Cindel, Group Director of Operations & Logistics for the Moreno Valley division at ALDI. The international company, originally founded and headquartered in Germany, currently operates almost 1,800 stores in the U.S., including 55 stores in California.

The first Market 5-ONE-5 is located in downtown Sacramento, and is reminiscent of a neighborhood market. The store curates its products around a set of high standards for health and nutrition that are unique to Market 5-ONE-5, and includes minimally processed, organic and sustainably sourced products.

“What that means for us, and what the differentiating factor is – is the curation of products. There’s a trust that every item on the shelf is the best option in that particularly category, whether you’re shopping for granola bars or bread or meat and seafood,” says Chelsea Minor, director of public relations and public affairs for Raley’s.

Underhill with Envirosell would agree that product curation is a smart tactic to stay competitive. He says one of the tools that American grocers have is the understanding of how to organize things better in the context of their stores to save people time, money and to help educate them in the process.

“One of the ways we do it is curating products,” Underhill says.

Shoppers at Market 5-ONE-5 find a range of specialty offerings, including kombucha on tap, wines by the glass, indoor and outdoor dining and freshly made meals, which are prepared and packaged on site every morning.

The market also sells organic, free-range chicken and grass-fed beef as well as sustainably wild-caught seafood.

“Some of those specifications are hard to come by, and we’ve seen a really great response to access. We are striving to make sure the offerings are affordable. That’s important to Raley’s; everyone should have access to high quality food at a great price, Minor says.

There are plans for at least two to three more Market 5-ONE-5 locations in the near future, which will be located in urban environments.

Wegmans is another store that seems to be finding success. Headquartered in Rochester, N.Y., the grocer operates just 97 stores on the east coast – yet it was dubbed the second most-loved consumer brand nationwide in 2017, according to an analysis by data analytics firm Engagement Labs.

In a press release, Engagement Labs said Wegmans made the list in part because of its investment in its employees, which creates an almost theatrical experience and delivers exceptional customer service. This has created super fans who are fiercely loyal to Wegmans.

The store’s other popular attributes include its own Wegmans branded items, partnerships with local farms, bread baked in-store and easy, chef-prepared meals.

But the real innovation may be taking place internationally, according to Underhill with Envirosell. He believes that the cutting edge of grocery store management and design left North America 30 years ago.

“If we look at other parts of the world, there are things that happening in Mexico, there are things that are happening in China, there are things happening in Turkey that are actually really cool. Maybe we as North American grocery merchants need to pay attention to those,” Underhill says.

In Brazil, Underhill says grocery stores are moving away from the 90 degree angle, and instead are setting stores at a 45 degree angle.

This results in less product on the floor, but offers shoppers better visual access to products in the aisle. It also sets up better aisle pairings, and is easier to see than overhead signage.

And it’s not just what goes on inside the store. In Asia, Underhill has encountered grocers who have designated female-only parking spots near the entrance of grocery stores. This is a safety measure to help them feel safe as shoppers, based on interviews showing women can often feel “creeped out” in parking lots.

How Grocers Can Be the Hub of a Community Now is a pivotal moment for the grocery industry to redefine and realize their role in people’s lives. The future of grocery stores may evolve in a number of ways, but one of the biggest reasons people go to a store is to connect – with their food, their neighborhood, and with other people.

Kelley believes that fundamentally, the relationship customers have with grocery stores need to change. He says that in the past, grocery stores were basically a warehouse for products people needed.

While convenience, service, price and quality will always matter, successful grocery stores in the future will incorporate a higher level of hospitality, restaurants and food discovery experiences.

“Now there are people looking for things to do with social and leisure time. Grocers have the opportunity to bring more meaning and change to offer that experience,” Kelley says.

Continued on page 28 ▶

“Our shopping experience is designed to make life easier for people and to offer high-quality food at affordable prices.”

CAL I FO RNIA GRO CER | 27

◀ Continued from page 27

While grocers can do so much more, Kelley says it is difficult for an industry that has a supply way of thinking. Many grocers just want to keep convincing themselves they want to be Amazon.

“Amazon can’t help you find your magic other. Amazon can’t be the place to stroll down the street and have a beer with your neighbor. Every time we put a restaurant or a pub in a store, it changes the meaning of it from being a warehouse to being a community asset. And so that’s where we’ve really been seeing things change on a pretty radical level,” Kelley says.

Grocers seem aware of the importance of community. When it comes to customer interaction strategies, about 72 percent of grocery executives said community involvement is the most important, according to a recent annual report in Progressive Grocer.

28 | CAL I FOR N I A G R OC E R

Elder, with the Food Futures Lab at IFTF, says that he sees an opportunity for grocers to move beyond providing food and become more of a robust food ecosystem for their communities. For example, he says grocers could also be seed suppliers and a source of farming advice for those growing food at home, or possibly provide personalized meal plan or nutrition services.

“Can a grocery store look more like a modern coworking space with an open kitchen than it does as a square box with aisles people walk down? Can grocers transform their stores look more like a community hub that’s selling food but also engendering a more entrepreneurial and local food ecosystem?” Elder asks.

Combining futures thinking and food design can help you move beyond incremental product innovation to transformation, whether that means reaching a new market, reducing environmental footprints, or offering eaters healthier options. It can help you set ambitious goals and ground them in tangible plans and tactics that make things work in the short term. Blending futures thinking—which explores a range of possibilities, motivations, and aspirations for the future—with design can help you balance opportunities with constraints for more resilient approaches to food systems challenges.

How will you tap into your sixth sense to reimagine your business for the future? ■

The Food Futures Lab created a report called “Designing Good Food for the 21st Century,” which encourages the food industry to employ “futures thinking.” An excerpt from the report states:

Anheuser-Busch InBev

Kellogg Company

Bimbo Bakeries USA

Kimberly-Clark Corporation

C&S Wholesale Grocers

MillerCoors

Coca-Cola North America

SUPERVALU West

CAL I FO RNIA GRO CER | 29

WASHINGTON REPORT

Fixing The Qualified Improvement Property Drafting Error PET ER L A R K I N PR E S IDE N T AN D CEO N AT ION AL GR OCER S AS S OCIATIO N

Despite their best intentions, lawmakers allowed for a glitch that may have significant ramifications.

The once-in-a-generation tax reform legislation that was signed into law last December provided the business community with long-awaited tax relief and included many positive provisions for independent supermarket operators.

While we were grateful for lawmakers’ efforts to simplify the tax code and alleviate tax burdens on Main Street grocers, a provision in the bill that was intended by Congress to help retailers invest in their businesses could end up harming them if not fixed quickly.

The law included a provision known as “100 percent bonus depreciation” that allows businesses to immediately write off the full costs of short-lived investments.

However, due to a drafting error, the language excludes some categories of business investment, most notably qualified improvement property, from being eligible for 100 percent bonus depreciation.

Section 168 of the old tax law had three individual categories of qualified improvement property: leasehold improvement property, retail improvement property, and restaurant improvement property. Each category had a 15-year Modified Accelerated Cost Recovery System recovery period, meaning property could depreciate over the course of 15 years.

30 | CAL I FOR N I A G R OC E R

To simplify the tax code, tax writers combined the three above categories into one category called “qualified improvement property” in the new bill and meant to designate it with a 15-year recovery period.

The intent to designate this 15-year recovery period was explicitly stated in the conference agreement, but when the final bill was written, the 15-year recovery period was accidentally omitted from the text, and the recovery period defaulted to 39 years.

According to a report by the Tax Foundation, despite effectively removing tax barriers to many categories of business investment, the new tax law “created new barriers for investing in qualified improvement property, seemingly by mistake.”

Businesses making investments to improve their property now face a more restrictive cost recovery period – more than twice than under prior law – and are excluded from 100 percent bonus depreciation.

These businesses will face a higher tax burden on QIP investments than under previous law, an outcome that could have significant consequences, potentially slowing investment, employment, and output for those affected.

Lawmakers have acknowledged this error, which has been dubbed the “retail glitch” and are supportive of correcting this issue. Since

there is no cost associated with the fix, it is among the few provisions in the new tax law that has been identified by the Joint Committee on Taxation as needing a true “technical correction.” But the question now at hand is. When will Congress fix this glitch?

At the time of this writing, appropriations bills along with legislation to reauthorize a farm bill, a water infrastructure bill and the Federal Aviation Administration are on the legislative agenda for the rest of this year.

Majority Leader Mitch McConnell announced in June that the Senate will stay in session this August to consider nominations and appropriations bills.

Since then, Justice Kennedy announced his retirement, which has now shifted most of the attention of lawmakers to who his replacement will be and when that replacement will be considered. All of this on top of the mid-term elections in November, nonetheless!

Any opportunity to fully depreciate improvements made to stores will significantly help independent grocers upgrade their stores, and more importantly, expand offerings and hire additional staff.

NGA will continue to work towards a legislative fix for this retail glitch in addition to advancing policies that will protect and enable independents to grow and better serve their communities. ■

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www.cswg.com www.cswg.com CAL I FO RNIA GRO CER | 31

CGA NEWS

C GA, Foun dation Host Win n in g Golf Tourn am ent s The California Grocers Association and its Educational Foundation hosted three successful golf tournaments this summer, providing great networking opportunities while raising funds for a variety of industryrelated programs.

More than 220 golfers participated in this year’s Independent Grocers Tournament, spread across two courses at the Oakmont Golf Club in Santa Rosa, Calif. The tournament, held in early June, drew independent retailers and their supplier

partners from throughout Northern California. The course barely escaped being burned last fall during the deadly Tubbs Fire that swept through Santa Rosa.

In July, the CGA Educational Foundations hosted its two popular Golf Classics.

Proceeds from both tournaments help fund the Foundation’s college scholarship and tuition reimbursement programs. For the second year in a row, the Southern California tournament was held at the beautiful Monarch Beach Golf Links in Dana Point,

Calif. Blackhawk Country Club in Danville, Calif., continues to be the home for the Northern California tournament. Perfect weather and course conditions greeted golfers at both venues.

CGA and the CGA Educational Foundation wish to express their appreciation to the many sponsors that help make all three events tremendous successes. To learn more about the events, including winners and sponsoring companies, visit www.cagrocers.com.

Independent Grocers Golf Tournament

Arash Ghassemi, MUFG Union Bank; Mark Natividad, Green Leaf; Juan Sanchez, Clase Azul Spirits; Tyler Brasfield, MUFG Union Bank

(l to r) Mark Foley, Kevin Konkel, Raley’s; David Schreibman, Quality Business Machines; Ken Smith, TruGrocer FCU 32 | CAL I FOR N I A G R OC E R

Miguel Montanez, Douglas Ruef, Kysor Warren; Jonathan Manjarrez, First Citizens Bank

Joe Tringali, Miles Haynes, Mike Hudson Distributing; Mark Hoffman, Fircrest Market; Bill Nicholas, Elite & Assoc.

(L to R) Dennis Spiller, Jon Alden, Jerry Pierson, Jelly Belly Candy Co.

Dave Cato, Sierra Nevada; Adam Johnson, Jon Martinez, Rod Sweet, Columbia Distributing

LaTortilla Factory provided a tasty lunch.

CGA NEWS

CGAEF Golf Classic – Northern California

(L to R) Phil Miller, Jaden Miller, Eric Pearlman, C&S Wholesale Grocers; Sean Hedrick, CROSSMARK

(L to R) Justin Avriett, J. Avriett Consulting; Adam Rudick, Pleasanton Valley Insurance; Jim Lubman, Zenith Insurance Co.; Michael Sullivan, Sun-Maid Growers

(L to R) Tommy Reals, Anheuser-Busch; Jennifer Grant, Markstein Sales; Greg Sheldon, Tanner Sholtes, Anheuser-Busch

Thank you The Illuminators for another fantastic omelet breakfast.

(L to R) Eric Slabaugh, Brent Ross, Jehan Palomars, NuCal Foods; Joe Cuneo, Safeway

Michael Woolery, Will’s Fresh Foods went to great lengths to recover his team’s “Nugget” ball.

CGAEF Golf Classic – Southern California

(L to R) Kevin Arceneaux, Anthony Lawrence, Joe Gallinger, Bryan Jankans, Mondelēz International

Mike Ridenour, Kraft Heinz Company; Jim Van Gorkom, NuCal Foods; Mark Johnson, SUPERVALU

Gary Vicek, Donna Simpson, Steve Weakley, Certified Federal Credit Union

Thank you Steve Howard, Bristol Farms

CAL I FO RNIA GRO CER | 33

CGA NEWS

C GA Br e a ks Gr o u n d o n N e w H e a d q ua r t e r s

Members of the CGA Executive Committee and RMS Board of Directors participated in the ceremonial groundbreaking.

Construction has begun on the future downtown Sacramento headquarters of the California Grocers Association and CGA Educational Foundation.

The Association purchased the historic office building, located at 1005 12th Street, in 2015 with the intention of remodeling the century-old structure once its lease at

the Esquire Plaza, 1215 K Street, expired in mid-2018. The building, built in 1925, opened as a single-store retail site just down the block from the city’s first public market at 13th and J streets.

“We’re excited to be part of downtown Sacramento’s revitalization and owning a historic part of the city,” said CGA President & CEO Ron Fong, adding that the Association is celebrating its 120th anniversary this year. “We are very pleased that our architects were able to preserve the building’s Spanish colonial design from the 1920s.”

“This purchase represents a sound investment for the Association,” said CGA Chair Bob Parriott, Twain Harte Market, Twain Harte, Calif.

The Association will occupy the structure’s second floor following a complete renovation that will feature a mixed-use of executive offices, cubicles and collaboration rooms.

The 20,544 square foot three-level structure is anchored by a FedEx Office Print & Ship Center on the corner of J and 12th Street.

Additional retail space, including a Wells Fargo ATM, occupy the ground level. The Association is managing the building under the name Aisle 3 Concepts, LLC.

The lower level will be renovated to include a large association meeting/instructional training room and potential tenant space.

Additional improvements include seismic and other structural upgrades, an elevator and enhancements to the exterior façade.

CGA selected the Sacramento-based architectural firm Williams + Paddon to redesign the historic building, and Wells Construction, Inc. as the general contractor.

CGA Hires Director of Digital Communication

Nate Rose

The California Grocers Association has named Nate Rose as its Director of Digital Communications, a newly created position.

Rose is responsible for enhancing the Association’s digital communications strategies. He will oversee production/ distribution of all digital communication, including content, visual design and story ideas. He will also expand CGA’s social media presence.

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Raley’s District Team Leader Chuck Williamson (right) led the Raley’s Store Tour.

Ra ley’s Hosts SEC Store Tour The CGA Supplier Executive Council hosted its third executive-led Store Tour of the year in early August, this time featuring West Sacramento-based Raley’s. The tour allowed SEC members to learn more about Raley's philosophy of changing the way the world eats, one plate at a time. The aisle-by-aisle tour was led by Chuck Williamson, District Team Leader, and Bill Lackey, Store Team Leader, and included insights from department managers from throughout the store. It was followed by a luncheon that included comments from Kevin Konkel, Chief Operations Officer. The fourth and final 2018 Store Tour features Vintage Grocers in Southern California. A tour date has not been set.

CGA NEWS

RMS N ames New President, Vice President of Sales Retail Marketing Services (RMS) Inc., the holding company for the California Grocers Association for-profit businesses, has named Matthew Dodson President and Chief Executive Officer, according to CGA President and CEO Ron Fong.

In addition, Stephen Turner has been appointed Vice President of Sales.

Matthew Dodson

Stephen Turner

The company, located in Burbank, Calif., is a forprofit CGA subsidiary operating three business lines: carTrac (shopping cart retrieval); CartFix (shopping cart repair and maintenance); and CRC (coupon processing/redemption).

Dodson succeeds Dave Reid who announced his retirement last fall after more than 16 years as an RMS executive. He joined RMS (then operating as California Shopping Cart Retrieval Corp.) in 2009 as Executive Vice President and was responsible for managing all business lines, implementing strategic growth plans, budgeting and supervising department directors. He also oversaw the restructuring of a business line for coupon processing.

Prior to RMS, Dodson was Director, Local Government Relations, for CGA. His responsibilities included representing the grocery industry before city and county government throughout Southern California.

Stephen Turner, newly appointed Vice President of Sales, joined RMS in May 2018 and and oversees corporate strategic planning, sales, product line expansion and customer engagement plans. Prior to RMS, Turner held a similar position for Summit Packaging Solutions. He has also worked for Siemens, Carter Brothers, mark VII Equipment Inc. and Exxon Mobil Oil Corp.

“RMS is undergoing a ground-up realignment of its businesses and is looking to expand its line of service offerings for grocers, retailers and pharmacies throughout the United States,” Dodson said. To learn more about RMS services, visit www.retailsolutionsus.com.

Special Advertising Opportunity!

California

This December, Kendra Doyel, Sr. Dir., Human Resources & Labor Relations for Ralphs Grocery Company will become Chair of the CGA Board of Directors.

To recognize this impressive achievement, California Grocer will feature an interview with Kendra in its December issue.

Your company can recognize Kendra as well by placing a congratulatory ad. Join your industry peers in congratulating one of California’s leading grocery industry executives.

For advertising rates and deadlines, contact Dave Heylen, CGA, at (916) 448-3545.

CAL I FO RNIA GRO CER | 35

CGA NEWS

NEW MEMBERS CGA welcomes the following members:

Aurantiaca USA LLC 300 Spectrum Center Dr Ste 1450 Irvine, CA 92618-5001 Contact: Paula Cunningham, Marketing Associate E-mail: paula.cunningham@obrigado.com Phone: (949) 618-9504 Website: www.obrigado.com

Bark Bliss Pet PO Box 373 Pebble Beach, CA 93953-0373 Contact: Valentia Valentine Piccinini, Owner E-mail: Valentia.piccinini@me.com Phone: (831) 624-9042 Website: www.barkblisspet.com

Birds and Beans Coffee LLC PO Box 432 Byfield, MA 01922-0432 Contact: Mark McReynolds, CA Sales Representative E-mail: mark@birdsandbeanscoffee.com Phone: (209) 710-7274 Website: www.birdsandbeanscoffee.com

East Bay Natural Grocers, Inc. dba Alameda Natural Grocery 1650 Park St Unit L Alameda, CA 94501-7350 Contact: Randall Owczarzak, General Manager Phone: (510) 865-1500 Website: www.alamedanaturalgrocery.com

Foster Dairy Farms dba Crystal Creamery 529 Kansas Ave Modesto, CA 95351-1515 Contact: Brian Carden, Sr. Dir., Sales E-mail: bcarden@crystalcreamery.com Phone: (209) 576-2362 Website: www.crystalcreamery.com

Huntington Security Systems, Inc. 2681 Dow Avenue Ste B Tustin, CA 92780-7244 Contact: Scott Mullins, President E-mail: smullins@huntingtonsecurity.com Phone: (800) 559-1929 Website: www.huntingtonsecurity.com

KeHE Distributors, LLC 1245 E Diehl Rd Ste 200 Naperville, IL 60563-4816 Contact: Scott Silverman, VP, Business Development West E-mail: scott.silverman@kehe.com Phone: (415) 260-3310 Website: www.kehe.com

Midgie’s Good Cream LP dba Re:THINK Ice Cream 4048 Sonoma Hwy #15 Napa, CA 94559-9745 Contact: George Haymaker, Founder & Managing Partner E-mail: ghaymaker@rethinkicecream.com Phone: (415) 613-2224 Website: www.rethinkicecream.us

La Morenita Market 2434 Jefferson St Napa, CA 94558-4932 Contact: Jerry Curiel, Vice President Phone: (707) 255-9068 Website: www.lamorenitamarket.com

NJ Maltz Insurance Services 4667 York Blvd Los Angeles, CA 90041-3342 Contact: Paul Diaz, President E-mail: paul@maltzins.com Phone: (818) 368-7000 Website: www.maltzins.com

Piazzas Fine Foods 171 Birch St Ste 4 Redwood City, CA 94062-1337 Contact: Debra Powell, Accounting Manager Phone: (650) 363-7140 Website: www.piazzasfinefoods.com

Worton’s Foresthill Grocery, Inc. PO Box 631 Foresthill, CA 9561-0631 Contact: Johnny Worton, President Phone: (530) 906-2369

36 | CAL I FOR N I A G R OC E R

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

G N I K R

E R P A SRUeaches 25-YilEestone M

What do you do when you get a craving for Lahmajoun, maybe a little Basturma to start the meal, a hearty Chi Kofte and top it off with some Gata or a Baklava for dessert?

For generations of Armenians, you made your way to Super King Markets in Anaheim whose founders focused on maintaining Armenia’s ancient cultural and culinary heritage for a large Armenian diaspora in Southern California.

A quarter-century later, this thirdgeneration, family-operated retailer is still doling out the ingredients for that delicious home-cooked Dolma.

Super King, faced with spectacular changes in demographics, has transformed itself into an international retailer, maintaining the loyalty of its Armenian and Middle Eastern customers, but also remerchandising to satisfy the needs of the burgeoning Hispanic and Asian population and the “melting pot” of Southern California.

“It was a big jump for us from catering to primarily Eastern European and Middle Eastern customers to other groups,” said Jake Fermanian, Vice President and son of the founder of the seven-store chain.

“But with a great team of buyers and vendor partners, Super King has become a truly international supermarket.”

This journey began in 1989 when Peter and his wife Mary along with their young son Jake, moved to the United States.

After a couple of years as a mechanic, Peter decided the food business was recessionproof and was where he wanted to be.

In 1993, the family opened their first store in Anaheim, a 3,000-square-foot store with one register.

His brother Vache, joined forces with Peter in 1995. Their father Jacob, worked several produce markets in Lebanon and instilled a passion for produce in both of them and the importance of quality control.

“Since my grandfather had some previous experience in the produce business back home he was an amazing mentor and role model for my father and uncle, his work ethic was one of a kind,” said Jake Fermanian, who also serves on the California Grocers Assocation Board of Directors. “They were all working seven days a week, going to the produce market about one in the morning, then would go to the store to receive product at 6 a.m., work the store and finish their day about 10 p.m.”

The family realized that the future lay in larger stores, and in 2003 moved operations to a 32,000 square foot location a block away from the original Anaheim store.

“It was our first run at a full service supermarket and over the years led to the opening of our six other locations,” the younger Fermanian said. “I started working at the original store when I was eight years old. I was bagging groceries, working the register and helping out wherever I was needed. It’s amazing to think we started out in this one little store with one register and now we have over 100.”

Jake Fermanian was very involved in the family business during his teen years. After graduating from Chapman University in 2007, he dove into the company, working in marketing, IT and purchasing.

Continued on page 40 ▶

CAL I FO RNIA GRO CER | 39

◀ Continued from page 39

“WE’VE BUILT A REPUTATION AROUND PRICE AND QUALITY AND WE NEVER CHANGE OUR QUALITY EVEN IF WE REDUCE PRICE.”

“We’d already made a big jump to a store that was 10 times the size of the original,” he recalls. “We were heavily focused on the Middle Eastern community in 1993 and had to figure out how to cater to a larger, more diversified demographic that included Hispanic and Asian customers without abandoning the city’s large Armenian population.”

The real test of the company’s power in the Hispanic community came in 2011 when Super King opened in Claremont with a number of strong Hispanic retailers nearby in Pomona.

“The results immediately showed us that we had the Hispanic customers’ support, and we focused even more on getting the product mix they wanted,” he said. “At first, we were still in the mindset that we should focus on Eastern European customers and products.”

The company continued that strategy at its stores in Northridge and Van Nuys in 2012 and 2013.

The shift in strategies has been a challenge at times.

“Customers kind of dictated what they wanted. But we had a good team of buyers including those that came from Hispanic chains who understood what we needed to do for our customers in center store and

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service bakery. Our team helped us get where we needed to go in balancing the mix,” he said.

Jake’s uncle, Vache Fermanian agrees.

“We are in a very challenging industry,” Vache Fermanian said. “We’ve learned through our experiences and accomplished many great things. In this business you have to change every year, every week, even every day. Our success has stemmed from our employees, customers and vendor partners.”

In understanding how best to be successful in such a diverse marketplace, Jake Fermanian said it was crucial the company not be seen as serving just one specific demographic.

“We didn’t want to go out there and say we were a Middle Eastern, Armenian or Hispanic market,” he said. “The key was presenting a friendly and welcoming ambiance, yet catering to an international customer base.

“You can come to our stores and hear 20 different languages being spoken in the aisles and throughout the departments,” he adds. “That’s how we wanted to go to market.”

While Super King has a good handle on customer demographics, it continues to focus efforts on ways to service its multicultural customer base.

Peter Fermanian along with produce manager Efrain Bahena (currently active 15 years+), and his father Jacob Fermanian.

“Perishables have been the major driver of sales from day one, and I think we have one of the leading produce departments in our marketing area,” Fermanian remarked.

“We do 100 percent of our supply chain in perishables. We manage our inventory through an ERP and WMS system. We buy direct from packers and do our own distribution to stores. It gives us a big advantage in buying power and quality control in both produce and meat and we have more leeway when it comes to pricing.

We’ve built a reputation around price and quality and we never change our quality even if we reduce price.”

Continued on page 42 ▶

www.supervalu.com

◀ Continued from page 40

Asked about merchandising to such a broad customer base, Fermanian replied: “We see certain behavior across certain demographics. There are customers that buy specific cuts of meat. But in center store, our cooking oil section, for example, includes multiple regions and brands. So, we don’t segregate merchandise based on different ethnicities but instead integrate the aisles,” he said.

But customers do look for certain items.

“We don’t really call them out in the store,” Fermanian said. “You will find all types of non-traditional produce and cuts of meat in our stores. I’ve had buyers come from other chains and said they’ve never seen so many beef tongues and jackfruit being sold in one day.”

At present, Super King operates seven stores in Anaheim, Los Angeles, Altadena, Claremont, Northridge, Van Nuys and Santa Ana and the company intends to continue its plan for conservative growth, adding only one or two stores a year if the opportunity presents itself.

“The majority of stores have been remodeled fairly recently and our last three stores were opened within the last five years,” he said.

“We’re always looking for new store sites in L.A. and Orange County that cater to our demographic. We might also look at the Inland Empire and San Diego sometime in the future.”

Options like subscription meal kits, restaurants and online retailing have clearly made the business more challenging.

“It means we have to maximize the wallet when they come in the store,” he said.

“For instance, we’ve partnered with InstaCart and it’s been an excellent way to cater to young professionals and busy mothers. I believe it’s a great model for any retailer wanting to get in the e-commerce space.

Fermanian said today’s customers are convenience oriented and are willing to pay a premium for it.

“They’re now predicting that online grocery will be a $100 billion business by 2025,” he said, noting that the original prediction was 2020. “It’s a small but significant piece of the pie and another channel of trade that every retailer has to examine.”

U.S. Representative Loretta Sanchez, Peter and Vache Fermanian at the grand opening of the 2003 Anaheim Store.

“IN THE CONTEXT OF COMMUNICATING WITH CUSTOMERS, GROCERS TODAY HAVE MORE CHOICES, BETTER TECHNOLOGY AND BETTER TARGETING THAN EVER BEFORE.”

As to the challenges facing the grocery industry, Jake Fermanian sees labor as the No. 1 controllable expense.

“The minimum wage is going to be $15 by 2020 and that’s a significant increase,” he notes. “Basically, retailers have three options – raise prices, reduce labor or both.

It’s a constant battle in our business.

“The price of groceries hasn’t changed much in the past 10 years and margins are pretty much the same among retailers,” he said. “Reducing costs in our business is not as easy as people think and raising prices is even more difficult. But I know we can’t reduce service levels. People want experience and we will need to find a way to give it to them.”

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Jacob Fermanian merchandising produce in the original 1993 Anaheim Store.

For Chris Linsky, Vice President of Marketing, one of his biggest challenges in the continuing evolution, fragmentation and sophistication of media.

Continued on page 44 ▶

BIMBO BAKERIES USA

Congratulations to

Super King Markets on their 2 5th anniversary! and All of the college scholarship recipients from the Class of 2018!

BimboBakeriesUSA.com

©2017 Bimbo Bakeries USA, Inc. All rights reserved.

CAL I FO RNIA GRO CER | 43

◀ Continued from page 42

“Print still works, but the ability to overlay other sources of data in the decision-making has made buying print more complex,” he said. “Digital communications can be purchased through just about everyone in any kind of advertising. Delivering communication has become easy with better targeting techniques, although measurement of its effectiveness is still suspect.”

He also pointed to the ability of regional and local grocers to use frequent shopper card analytics, something that in the past was mainly for national retailers.

Faustino D’Auria, Vice President, Operations, sees attracting and retaining top talent as one of his most pressing challenges.

“The ability to use personalization, household and customer-specific targeting is no longer cost prohibitive,” Linsky said.

“In the context of communicating with customers, grocers today have more choices, better technology and better targeting than ever before.”

“Unemployment is at a record low and we have more open jobs than people to fill them,” he said, adding that today’s worker is quick to “job hop” in an effort to find meaningful work at a competitive salary.

“This means retailers have to focus on creating a welcoming work environment full of internal growth opportunities.”

Company matriarch Mary Fermanian couldn’t agree more. For Super King Markets, its success has focused on providing a diverse product mix that spans multiple ethnicities, being nimble enough to change with shifting demographics, while creating opportunity for personal and company growth.

“As I say ‘good-bye’ to 25 years of beautiful life, today we’re celebrating success,” she said. “That success means empowering yourself, your employees, your family and the next generation, giving everyone a qualify life and helping our communities.” ■

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©2018 Unilever SFY18105

Find out how at www.MakeMealsThatDoMore.com

!

OUTSIDE THE BOX N EW RETAIL PERS PECTIV ES

Calling All Vegans Waitrose stores in the United Kingdom are increasing vegan and vegetarian assortments by 60 percent with sections dedicated to over 125 vegan ingredients, prepared meals and other meatless products. Consulting firm Kantar UK Insights is predicting that 2018 is the year of veganism in the UK with a significant number of consumers turning to plant-based diets. The stores are introducing about 50 new products from two exclusive brands: The Happy Pear, created by renowned plant-based chef duo David and Stephen Flynn; and The Vegetarian Butcher, a Dutch company specializing in meat substitutes made from plant-based proteins. iStock

COWABUNGA!

Anyone with kids, or maybe when you were one, remembers this signature phrase by the Teenage Mutant Ninja Turtles. The shellback, crimefighting teens with a penchant for pizza are getting a reboot by kids network Nickelodeon for a new generation of viewers. Time to stock up on lunchboxes and fire up those in-store pizza ovens!

LIGHTS, ACTION,

iStock

GETTING SQUEEZED

ADVERTISING?

iStock

Competition may not be the retail industry’s biggest problem. The American Trucking Association reports a shortage of about 50,000 truck drivers nationwide and it’s starting to affect business and the cost of delivery to consumers. For example, Amazon recently hiked its Prime membership from $99 to $119 to cover additional shipping costs. One of the issues according to the ATA is the lack of women drivers.

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iStock

Selfridges & Co., the iconic London department store, is rolling out a cinematic ad campaign shot by noted director and photographer Norbert Schoerner. The film, Radical Luxury, is aimed at inviting viewers to consider the meaning of luxury in today’s world. It’s using a combination of stock footage, live action and computergenerated effects and will be shown in a number of theaters across the United Kingdom and underscored by multisensory in-store experiences.

OUTSIDE THE BOX

Demographic Shift

Savvy apparel retailers are addressing a long ignored or underserved segment of consumers – plus-size women and girls. Global access, an increasing number of startups, increased obesity and social media, which is giving voice to younger shoppers, is largely responsible for above average growth in plus-size fashion. This is now a $21.4 million business, which accounts for about 17.5 percent of all women’s apparel sales, according to NPD Group, a market research company.

iStock iStock

BIKE DELIVERIES

iStock

Home delivery has taken on new meaning in the United Kingdom with Sainsbury’s testing delivery of online orders to city customers via electric cargo bikes. The bikes can carry several customer orders at one time and use bicycle lanes to avoid traffic during peak hours. The chain is using routing technology to determine which orders go by bike or traditional vans.

Sweet Investing Don’t want to issue stock?

How about candy? Hotel Chocolat has begun paying back customers who bought the London-based company’s “chocolate bonds” with luxury boxes of chocolate or gift cards.

Proceeds from the bonds were invested in capital projects that enabled the company to grow, continue with sustainability projects and created 600 jobs in the UK.

S D I K THE BIN

CA

Everyone talks about the need to focus on new customers, but VistaJet has taken it to new heights. The operator of private jets is aiming to keep kids happy and occupied at 45,000 feet by offering fantasy flights for youngsters that include costumes, Alice in Wonderland adventures and other games for a starting price of $4,000. The price does not include the $12,000 per hour minimum cost of chartering the private jet.

iStock CAL I FO RNIA GRO CER | 47

Congratulates its 2018 scholarship recipients!

Vanessa Aguayo

Monique Chavez

Carla Espinosa

Josue Gil Valle

Madai Gil Valle

Anthony Giron

Ruben Hurtado

Jane Juarez

Melissa Lopez Gonzalez

Abraham Medina

Isamar Perez

Samantha Reyes

Rocio Sanchez-Nolasco

Yvonne Vasquez

Stephanie Velasco

Hilda Viernes

Building a Better Future Together CAL I FO RNIA GRO CER | 49

By Len Lewis

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An employee slips and falls in the dairy aisle. In the warehouse, a worker gets caught between two converging pallet jacks, and a production line at the meat processing plant is stopped for hours when an employee is nicked by a band saw and taken to the local emergency room.

So, whose fault is it? Did supervisors or owners fail to communicate proper safety standards and follow up to make sure things were done in the right way? Or, were employees simply distracted and careless?

You’d think the answer was easy – depending on your point of view. But both parties can be and are to blame for many work-related accidents if companies fail to develop a culture of safety where people look out for each other and are focused on their jobs.

Continued on page 52 ▶

CAL I FO RNIA GRO CER | 51

◀ Continued from page 51

“That culture of safety has to be a top priority,” said Garrison Wynn, motivational speaker and columnist who has worked with a number of Fortune 500 companies on topics ranging from safety and leadership to personal and business success.

“

“It involves people looking out for each other and who are engaged on the job,” he said. “Statistically, people who talk to each other and have a good relationship are more likely to look out for each other.”

Employees must feel their supervisors are supportive and will reward them not only for understanding their job, but also how it affects the success of the entire organization.

”

But this relationship isn’t something that stops on the shop floor. It must start with supervisors and the executive suite.

“Employees must feel their supervisors are supportive and will reward them not only for understanding their job, but also how it affects the success of the entire organization,” Wynn said. “It can’t be just about stocking shelves and mopping floors.

“If they see a path toward better opportunities, more pay or promotions, that’s what a good job looks like, but that also drives safety,” Wynn noted.

“We found a direct correlation between 52 | CAL I FOR N I A G R OC E R

people who felt they had good jobs and incidents on the job. Post-incident interviews show that a high percentage of people who are injured – especially in retail or warehouse environments – were people who didn’t feel that way about their jobs.

More than likely they were disgruntled or not engaged – and engagement translates into safety.”

Wynn firmly believes that more companies are getting this message.

“When I spoke about this at a conference in 2002 they thought I was out of my mind,” he said. “People simply had a hard time believing that if you make human beings feel valuable they value each other and become more conscious of their job.

In other words, if I feel valuable I have a tendency not to check out emotionally and watch what I’m doing.”

People realize you can get better gloves, keep the floors in better condition and do all kinds of things to create safety,” notes Wynn, “But human beings have accidents and the more aware they are the better.”

Asked who he would hold up as a role model in this safety culture, Wynn replied: “I would say manufacturers in general and power companies across the country.

At both, incidents have been dramatically reduced over the past few years. They’ve come to the conclusion that culture is the key. The power companies, in particular have very impressive records.”

Continued on page 54 ▶

We are proud to support the California Grocers Association Educational Foundation.

Congratulations to all of the scholarship recipients!

◀ Continued from page 52

Even in the mining industry, where incidents can be very difficult to reduce, has seen a 25 percent drop in incidents since 2010. But across the board, industry has seen an estimated 25-30 percent decline from 2005 to the present, according to Wynn.

“Everyone is considerably safer because people are just looking out for each other more and because of companies instilling the culture throughout their organizations,” he said.

But, as Wynn noted, “You can’t lead by example if you’re a bad example. Of course, the supervisor who comes in wearing his safety goggles and treating people fairly is one of those good examples.

“But you also have to show people what their strengths are and talk about the five things they are doing well before you talk about the one thing they are not doing well. If you do that the stats show those people are more likely to pay attention on the job.

“Another important success factor is the acceptance of change throughout an organization’s ranks. I always say action and adaptability equals opportunity. Basically, companies – and people – have to be flexible enough to get to their goals.”

But change is not the issue, rather the resistance to change, according to Wynn.

“People change all the time. The idea is to be flexible. People who believe in something so strongly that they end up looking for reasons what they believe is true. That makes change management very difficult.”

Resistance usually comes from people who have been on the job a long time and don’t want to be seen as a beginner.

“They don’t want to wake up and realize what they’ve known for a long time is no longer valid,” he said. “That’s when they cling to the old ways to make themselves look smart.”

“

Incidents have been dramatically reduced over the past few years. They’ve come to the conclusion that culture is the key.

The issue of accepting or resisting change is complicated but not necessarily a generational issue.

“It’s easy to say that young people are more flexible and older people are more stuck in their ways,” Wynn said. “But you can be 25 years old and less likely to change your ways if you’ve been on the job a short time and want to prove that you know something. If I think people are scrutinizing me, the last thing I want is to try something new and start over.”

Continued on page 56 ▶

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◀ Continued from page 54

“ However, developing the culture of safety is not a one-way street, Wynn noted.

Supervisors have to first hold themselves accountable in order to motivate others.

This doesn’t mean surrounding yourself with people who think exactly the same way.

“You can invite debate but keep human behavior in mind,” Wynn said. “When you debate an issue there will always be people who disagree for no particular reason. It’s simply what they do and always will because change makes people feel obsolete.”

Wynn noted that if change automates a job and takes part of the worker’s responsibilities away, or if someone’s given an efficient tool that removes some of their talent from the job, then it’s up to company leadership to show people they are still valuable.

“You can’t just tell people a new tool is fantastic and will take half their work away,” Wynn counseled. “Invariably, they will shoot holes in the new way. The solution is to present them with the tool and show them how, with their existing knowledge and time on the job, it will make a difference and make things even better.”

However, these messages can’t just come from the top down. They need to be reinforced at every level in an organization, Wynn noted.

“First make sure that front line supervisors believe in change to make things safer and that safety and productivity go hand in hand,” he said. “The old days of someone saying ‘we’re not in the safety business’ or ‘we can’t be safe and make money at the 56 | CAL I FOR N I A G R OC E R

First make sure that front line supervisors believe in change to make things safer and that safety and productivity go hand in hand.

”

same time’ are gone. That has to be stamped out at the direct supervisor level. They are the ones directing people who do the most dangerous work and they are the ones that have to believe it.”

compatible with what they’re trying to do.

But if people don’t believe leadership is supportive in pointing out their strengths as well as weaknesses, then your turnover is going to remain dramatic.

But any program or improvement management is trying to sell to them or their workers has to be extremely clear and easy to explain while making them look good.

“Right now there are 20 and 21 year olds in the grocery business who literally work three days and quit. Some of that is because this is a generation that may have not understood what a job is or what work looks like. But you can’t manage people based on who you are.”

“People do not enforce policies that do not make them look good or, at least, don’t make them look bad,” he said. “Most importantly, when you roll out a safety program you have to make sure the people down the line believe that leadership really believes in it.”

Some key lessons can be found in the strategies employed by the oil companies over the past 25 years.

“The reason their safety programs struggled is that they were complex,” Wynn said.

“They had a bunch of engineers who put together safety programs that made them look smart. But it’s got to be easy. If you can’t simplify your information, people believe that you really don’t understand it yourself. When you talk over my head my ego says that if I don’t get it, then you don’t know what you’re talking about.”

The question remains who oversees communication efforts?

“I’m not aware that half-day or one-day training programs for communication skills is happening in the grocery business,” he said. “It’s easy for someone to talk about the need to focus on employee engagement or making sure their leadership style is

This means when you bring in Millennials, or Gen Y, or Gen Z employees, you have to get them to know you believe they’re valuable and not disposable.

“You have to let them know you care and not just throw them into a situation unprepared or unfamiliar with safety procedures,” Wynn concluded. “People are willing to listen and be taught. But you have to be influential enough to create that culture of safety. If you can do that, you can do anything.” ■

Garrison Wynn will be the keynote speaker at the 2018 CGA Loss Prevention Executive Summit in Palm Springs, Calif., on September 24.

Congratulates SUPER KING on the celebration of your

25 Anniversary! th

SUPERVALU has been a proud partner with SUPER KING Markets for the past 15 years.

Thank you for your continued business!

FOUNDATION NEWS

ENDOWMENT FOUNDERS CIRCLE DONORS

foundation awards

LEGENDS OF THE INDUSTRY

scholarship

In 2017, CGA Educational Foundation announced the creation of the CGAEF Scholarship Endowment honoring their 25th anniversary of supporting the industry with financial assistance and educational opportunities. This year, the first scholarships will be awarded from the Endowment, including a $10,000 Legends of the Industry Scholarship, and three $1,000 donor scholarships, all made possible by the Foundation's Endowment Founders.

CGAEF AWARDS RECORD AMOUNT IN COLLEGE SCHOLARSHIPS The CGA Educational Foundation awarded 378 college scholarships totaling a record $678,750 to deserving CGA member company employees and their families for the 2018-2019 academic year. The Foundation offers a variety of scholarships, including the newly created Legends of the Industry Scholarship, an annual $10,000 scholarship awarded to one applicant pursuing a career in the grocery and/or grocery-related manufacturing industries.

2019 AWARDS DINNER TO HONOR FALVEY, VAN GORKOM Joe Falvey, President, Market Centre, SUPERVALU West Region, and Jim Van Gorkom, Senior Vice President, NuCal Foods, will be inducted into the CGA Educational Foundation Hall of Achievement on March 28, 2019, during a gala event at the San Ramon Marriott in San Ramon, Calif.

FOUNDATION NEWS

INDEPENDENT STORE TOPS AWARD CONTRIBUTIONS

Changes to

TUITION REIMBURSEMENT program In a greater effort to support employees pursuing a career in the grocery or groceryrelated manufacturing industries, tuition reimbursement applicants are now required to demonstrate how the coursework supports their intentions to remain in the industry.

The Foundation’s Tuition Reimbursement program reimburses up to $200 per course, $1,000 annually.

Super A Foods, a privately-owned grocery chain headquartered in Commerce, Calif., tops the CGAEducational Foundation's list of scholarship donors with a record $691,200 in lifetime contributions. The Amen family partnership with the Foundation began in 2002 with three $4,000 scholarships. This year the family awarded more than $70,000 in scholarships to its employees and their dependents. The Foundation wishes to thank the entire Amen family for their tremendous support.

For more information on CGA Educational Foundation programs, visit cgaef.org.

ONE DAY SEMINAR FOR A One-Day Seminar for Independent Store Leaders & Executives

let’s let’s Grow Grow

S R E D A E L E STOR

PEAKER: FEATURED S

D Y O L L D L O HAR This seminar explores timely industry challenges and provides meaningful strategies to strengthen and empower independent store leaders and executives. Topics include: leadership development, new merchandising concepts, employee retention and effective performance reviews.

Southern California October 23, 2018 9:00 a.m. – 5:00 p.m.

Santa Ana, Calif.

For more information, call (916) 448-3545 or visit Featuring www.cagrocers.com Harold Lloyd

Cost: CGA Members: $25 • Non-Members: $175 Register: Visit www.cagrocers.com/events Sponsored by California Grocers Association Independent Operators Committee • CGA Educational Foundation

CAL I FO RNIA GRO CER | 59

AN

AMERICAN

SUCCESS

STORY only just under way

BY CASSANDRA PYE

Kimberly Lee says she didn’t find the grocery industry. “It found me.”

60 | CAL I FOR N I A G R OC E R

Kimberly Lee was a frequent shopper at her local Food4Less, about 10 minutes from her home, throughout her college years. It was on a typical shopping trip that she saw a sign announcing a hiring event at the Rialto, Calif. location. Days later, she attended, turned in an application and was interviewed on the spot.

“They were really open and seemed to really like me,” she recalls. “They talked about all the opportunities I could have. I felt like this is a company I could move up in.”

Lee was hired as customer first clerk, then promoted to cashier and has recently been cleared to work as a District Trainer. She’ll train both customer service clerks and cashiers throughout her district after just two years with the company.

Lee has been awarded the first-ever $10,000 “Legends of the Industry Scholarship” from the CGA Educational Foundation.

She intends to use the award to complete a master’s degree in counseling while continuing to pursue opportunities at Food4Less.

Her story is that of hard work, discipline and determination – so often heard about in America, most especially in California.

“I come from an immigrant family,” she shard in a very poignant application statement. “I first arrived in the United States when I was eight-years old, not knowing one word of English or anyone outside my immediate family. I had a difficult time adjusting to the different customs and language while attending school.”

She was salutatorian of her high school class and attended Cal Poly Pomona. Lee says receiving Cal Poly’s prestigious Kellogg Honors College’s scholarship gave her the freedom to focus on her studies.

“I really enjoy my volunteer work,” she says.

Now married for three years, she adds that starting a family is in her plans but wants to finish school first.

Lee says she also learns a lot from her Food4Less teammates and recalls one colleague, then second-in-command at the Rialto store, being encouraging and highly supportive of her educational pursuits.

“Lili Lara was really helpful,” she says.

“She’s the one who told me about the retail management certificate. I want to be like her – that person who encourages people to stay at Food4Less and pursue opportunities.”

Where will she be in, say, five years? “I will have completed my master’s in counseling and hopefully working in human resources, probably still doing a lot of training,” she shares.

Lee hopes CGAEF will continue doing great work on behalf of industry employees.

“I am very, very thankful for the support from the Educational Foundation because this scholarship will allow me to continue my education,” she says. “I hope they continue to help other retail grocery store students because completing your education is not something you can do right off-the-bat – you need help when you’re in school. It makes you feel valued.” ■

“I am very, very thankful for the support from the Educational Foundation because this scholarship will allow me to continue my education.”

“I could stop worrying about my tuition and focus on obtaining a quality education,” she says. “From that moment, I made it my mission to work even harder in my classes and participate in extracurricular activities that helped develop my life philosophies in education, hard work, and helping others.”

She is living that mission daily. When she’s not working, Lee is an avid reader, writer and volunteer at the Kids Campus Youth Center, helping youth from preschool-age to 18 with homework and other support.

CAL I FO RNIA GRO CER | 61

1 5 MINUTES WITH…

Josh Domingues C EO A N D FOU N DER, FL AS HFOO D

Food waste has continued to escalate over the years, reaching an estimated $162 billion, or between 30 to 40 percent of the food supply in North America.

For Josh Domingues this is a life-changing statistic and has resulted in a lifelong quest to reduce waste. Domingues is CEO and founder of Flashfood, an app that enables consumers to buy items that are approaching their “sell by” or “best before” dates at a discount and pick them up in a store.

Or – more recently – have boxes of produce and protein shipped directly to their homes.

California Grocer: Where did the idea for Flashfood come from?

Domingues: We launched in January 2017, but the story goes back a bit further.

My sister was a chef at a catering event.

She called me afterwards to tell me she just threw out $4,000 worth of food. I asked her why and she told me about shoveling all this food into the garbage because the employer made her do it.

What happened after that?

Over the next few weeks I started reading about food waste. There was this one article in National Geographic, which said most food that’s thrown out ends up in a landfill, gets covered up by other garbage and rots without oxygen. This produces methane gas.

The takeaway was that if international food waste was a country it would be the third leading cause of greenhouse gas emissions behind the U.S. and China.

How did you get from there to retail?

My apartment in downtown Toronto was above a grocery store and it dawned on me that supermarkets must be throwing out tons of perfectly good food. So, I dug a little deeper and learned that in North America the average store is throwing out anywhere from $3,000 to $5,000 in food daily that’s generally three days, or even months, before the “best before” date.

I started thinking that if grocers would let me know about food before they threw it out, and I could pay through my phone then pick it up in store the same day, I’d shop like that all the time. And that’s basically the model we built.

one of their stores. Eventually, we rolled it out to additional stores. After that, we introduced Flashfood in Longo’s and BuyLow stores. And we recently secured a pilot with Loblaws, Canada’s largest chain.

What’s been the response so far?

It’s been phenomenal. We’re selling over 50 percent of all the food that’s been made available on our platform. We’ve diverted about 25,000 pounds of food that would have ended up in a landfill to people who need it.

And, by the way, that’s the greenhouse gas equivalent of driving about 20,000 miles in a car. At the same time, Flashfood is driving a lot of new customers into the stores.

“We’ve diverted about 25,000 pounds of food that would have ended up in a landfill to people who need it.”

Who did you start with?

We wanted to work directly with retailers and the first was a store called Farm Boy based in Ottawa, Ontario, Canada. I met with their CEO and he let us run a pilot in

Josh Domingues will be a featured speaker during the “Brain Food” General Session at the 2018 CGA Strategic Conference in Palm Springs, Calif.

Walk us through the Flashfood process from start to finish.

Sure. It starts about 7 a.m. Each store has a person dedicated to Flashfood who goes to each department manager to find out what they are going to shrink that day. When the food is taken out of the department’s system, it’s taken to a Flashfood fridge. Then the products are uploaded to our site via iPad and consumers can see the deal on their phones. When they come to the store they go directly to the Flashfood fridge to pick up their purchases.

Continued on page 64 ▶ CAL I FO RNIA GRO CER | 63

15 MINUTES WITH… ◀ Continued from page 63

When they go through the checkout all they have to do is scan their cellphone with the receipt and pay for other items as they normally would.

Has that been expanded?

Anywhere from 35 to 70 percent.

Yes. We’re partnering with Tyson Foods on a pilot project in Detroit, Mich. They supply the protein and we supply the other products that are all boxed, ordered online and shipped to customers or made available for pickup at the store.”

You’re doing the same thing for produce?

What’s the average price of a Flashfoodbox?

What’s the discount for customers?

Yes. But here we’re providing stores with a Flashfood box, which allows stores to assemble five to eight pounds of assorted blemished or overripe produce that they would have thrown out that day. We make that available to customers through our app.

So Flashfood takes a percentage of sales?

Produce boxes that we build in-store come to around $10 and the ones delivered to customers comes to about $36. But that includes five pounds of protein and 10 pounds of produce, which provides about 14 meals for the average consumer – or under $3 per meal.

We take a percentage of the transaction so we only make money when our retail partners make money. Our end changes based on the volume we move with a particular chain.

Typically, we’re taking 25 percent and scaling down as volume grows.

Retailers are not only making money, rather than taking a loss on products that would have been thrown out, but they also avoid paying waste management companies to pick it up and dispose of product.

Do prices to consumers decline as products get closer to their expiration dates?

We’re building that into the system right now. We have a dynamic pricing model so consumers are being charged based on a product’s shelf life and prices go down as that gets closer.

Are you working with growers and vendors as well?

Yes. In April, we started a direct-to-consumer offering called Flashfoodbox where we offer blemished or disfigured produce that grocers wouldn’t accept from growers. One of our investors owns a greenhouse and had a ton of product grocers wouldn’t take. We took that and shipped direct to consumers.

64 | CAL I FOR N I A G R OC E R

Regulators and retailers in the U.S. get a bit nervous about selling or even donating expiring goods. What’s been the situation in Canada?

There are Good Samaritan laws in Canada and the U.S. that allow retailers and others to distribute food in good faith without being held liable. Besides, nothing we sell is even past its date.

Of course, this is a difficult issue for some to come to grips with. Food waste has been a cost of doing business for so long that people have lost touch with the opportunity to reduce shrink. But when you partner with a company like ours, you are putting product in defined areas while benefiting the store.

Where are you operating now?

We’re based in London, Ontario, but we’ve been in downtown Toronto and on the West Coast of Canada. New partnerships will enable us to scale across Canada fairly quickly.

Are you planning to expand into the U.S.?

Who is doing the shipping?

We use Axelhire, a third-party logistics company in San Francisco, Calif.

How are the boxes packed?

All the proteins are sealed and put in a separate compartment. We have protein on the bottom of the box, then ice packs, a divider and produce on top.

How do retailers feel about this? Do they see it as taking business away from their stores?

Not at all. We’ve found that people are more willing to go pick up the food. So our grocery partners that are more active in our marketplace are seeing more customers coming to the store on a consistent basis. It’s been a benefit for them.

We are looking at that now that we understand how operations work. We expect to have another partnership in the U.S. in the next month or so.

Where and when?

We’re looking at different cities. We’ll move faster using the Flashfood app in partnership with grocers. That’s the value driver. The direct-to-consumer box is agreat secondary offering.

We’re also working with some community food banks, like Forgotten Harvest in Detroit, where people can buy a box for themselves or for another family.

Overall, there are a lot of positive business reasons for retailers to partner with us. I believe it’s only a matter of time before California becomes the first state we really target. ■

GUEST COLUMN

Working Together to End Hunger

C H R I S T Y DUN C A N-A N D ERS O N E XECUTIV E DIR ECTOR , ALBER T S ON S COMPAN IE S FOUNDATIO N

Clearly there is an inherent connection between our industry and food banks to end hunger.

One of the great things about the grocery industry is our close and important connection with the communities we serve. We hang banners congratulating local teams on their big win and donate hot dogs and soda for school fundraisers.

How many times have you heard someone say, “my grocery store” is on this or that street? There is a possessive intimacy that

comes with the place where you purchase nourishment for you and your loved ones.

Our industry is part of the local fabric of the neighborhoods in which we operate, and we do a lot of good there, too.

One obvious beneficiary of our citizenship is the local food banks.

“The grocery industry is a major supporter and supplier of food to California’s network of food banks,” said James Floros, President & CEO of

The grocery industry continues to be a major source of food, monetary and volunteer support for our food bank network.”

Indeed, our industry’s support is crucial to the safety net services provided by the state’s food banks. Let’s look at the area served by the Los Angeles Regional Food Bank. Los Angeles County is a mammoth metropolitan area that has 10.2 million people and is 200 times the land area of Manhattan. The population is bigger than that of 41 states and nearly equal to the population of Sweden.

“The grocery industry plays a pivotal role in engaging the community in our work…

The impact of the grocery industry goes beyond food collected and money raised.” the Jacobs & Cushman San Diego Food Bank. “The genesis of food banking started with the concept of diverting soon-to-expire food from the landfill to the dinner tables of families in need. And from those origins, the grocery industry has been a strategic partner of California’s food banks for decades.

66 | CAL I FOR N I A G R OC E R

The grocery industry provides almost one-third of the food distributed by the L.A. Regional Food Bank. The food helps feed the nearly 16 percent of county residents who don’t know where their next meal is coming from.

There’s also another benefit of the food banks’ partnership with the grocery industry. Suzan Bateson, Executive Director of the Alameda County Community Food Bank, said the grocery industry’s advocacy serves as a critical voice in the fight against hunger.

“The grocery industry plays a pivotal role in engaging the community in our work,” says Bateson. “The impact of the grocery industry goes beyond food collected and money raised. Our food drive barrels serve as ‘billboards,’ so to speak, and store

team members engagement to increase donations and give us more ambassadors who remind thousands of shoppers every day that there’s significant need right in their own neighborhoods.

Simply put, grocery stores are critical outlets for engaging thousands of people in our cause.”

Michael Flood, President & CEO of the L.A. Regional Food Bank, sums it up well: “The grocery industry has been a great partner in the fight against hunger.

Because of their support, children,

seniors, working families and individuals facing hunger in our neighborhoods have happier and healthier lives.”

Clearly there is an inherent connection between our industry and food banks’ efforts to end hunger. Many grocery retailers go above food drives and donations and include fundraising, volunteer hours, and awareness opportunities.

I, for one, am proud to be part of an industry that makes such a difference in the lives of people who need it most.■

ADVERTISER INDEX PAGE

COMPANY

PHONE

EMAIL

WEBSITE

9, 53

Albertsons Companies

925-467-3000

43

Bimbo Bakeries USA

916-456-3863

wcrocker@bbumail.com

bimbobakeriesusa.com

31

C & S Wholesale

916-373-4396

pmiller@cswg.com

cswg.com

49

Cardena's

909-524-7182

mrobles@cmkts.com

cardenasmarkets.com

BC

Certified Federal Credit Union

909-261-4065

ghurd@vonscu.com

vonsefcu.com

55

ECOS

800-335-3267

craig@ecos.com

ecos.com

14

El Super

19

Gelson's

818-906-5709

4

The Hershey Company

717-534-3660

10

North State Grocery

530-347-4621

29

NuCal Foods

209-254-2225

IBC

PepsiCo, Inc.

21

Raley's

916-373-3333

raleys.com

7, 48

Ralphs Grocery Company

310-884-9000

ralphs.com

17

Retail Marketing Services

800-252-4613

mdodson@retailms.net

cartretrieval.net

41, 57

SUPERVALU

323-264-5200

customercare@unifiedgrocers.com

supervalu.com

37

TRUGrocer Federal Credit Union

208-385-5273

cdemaray@trugrocer.com

trugrocer.com

45

Unilever

800-298-5018

albertsons.com

elsupermarkets.com gelsons.com bcotton@hersheys.com

hersheys.com shopqf.com

skoch@nucalfoods.com

nucalfoods.com pepsico.com

unileverusa.com CAL I FO RNIA GRO CER | 67

MOMMY BLOGGER

Mrs. Jekyll and Mama Hyde K I M B ER LY M I L L ER WR IT E R , ACT R E S S

I am two very different customers.

There’s a supermarket in Utah that provides childcare for their customers. I’ve never been there, but I’m obsessed with it. I think about it every time I go shopping.

After I first read about the existence of this miraculous market a few months ago I proposed to my husband over dinner that we desert our home and families and move to Utah where they obviously understand mom life.

I’ve always loved grocery shopping. When I was young a full fridge was a symbol that I could take care of myself, and now that I’m a mom it’s a symbol that I can take care of my family. And while we don’t currently have plans to relocate, I still fantasize about being able to shop alone – regularly.

iStock

68 | CAL I FOR N I A G R OC E R

On the rare occasions I do get to wander the aisles by myself, browsing the yogurt selection is almost as relaxing for me as an afternoon at the spa. Muzak. Alone time.

Time to think. Time to take my time and soak up some arctic air-conditioning.

I love food and I’m much more willing to take risks and try a new product or pick up a special treat that’s not on our list when I’m relaxed and shopping by myself than I am when I’m trying to read labels while simultaneously keeping a tiny human from licking everything. And as someone who budgets very carefully, I know that I spend significantly more money when I get to spend more time shopping.

But there’s another me, the me that store in Utah totally understands. The one who needs to finish a 30-minute errand before my two-year-old hits his 10-minute sitting limit.

Most days I’m on a singular mission: buy all – and only – items on my list and get back to my car before the big feelings of being a toddler are unleashed on anyone else who was unlucky enough to go grocery shopping at the same time.

I don’t have time to look at sales, or what’s new, or care about what brand of broth or canned tomatoes Giada is using. Heaven help us all if there’s no WiFi or the store is in a data dead zone because handing over my phone can buy me the extra 5-10 minutes I need to get through checkout.

Sure, I could just order my groceries online, but that’s just not my speed. I still love grocery shopping, chaos and all. When my trunk is full of grocery bags I feel like I’m doing something right. I’m taking care of my family. ■

California Grocer Online www.cagrocers.com

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