California Grocer Issue 2, 2016 by California Grocers Association

2016, ISSUE 2

C ALIFORNIA GROCERS A SSOCIATION

Shopping For

MERGERS AND ACQUISITIONS

For the latest industry news visit www.cagrocers.com

IN THIS ISSUE Exploring Tomorrow Today Saving The Planet... Quietly Foundation Inducts Industry Execs

PRSRT STD US Postage Paid Permit No. 1401 Sacramento, CA

September 25-27, 2016 Palm Springs, California The grocery industry is rapidly reshaping itself. Spurred by emerging technologies and innovative new competitors, there is a discernable shift in how food is produced, distributed and purchased. These evolutionary changes are redefining the industry’s traditional values of convenience, selection and affordability. Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations, mergers, targeted expansions and incubating new concepts. Grocers are creating smaller, smarter stores with a more targeted assortment of goods and integrating new technologies into their operations. As a result, the new shape of the food industry is efficient, decentralized, agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty. GATHER. LEARN. PROFIT. Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building, personalized meetings and engaging social events. Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing. The CGA Strategic Conference distinctly blends uncommon educational sessions, our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year. The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business. You’ll gather tangible insights and unique, creative takeaways that you can immediately apply to your business

Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office. Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industry’s most successful conferences. SPONSORSHIP OPPORTUNITIES The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your company’s products, equipment or services. Take advantage of this unique opportunity to meet with California’s top grocery decision makers. As a conference sponsor, you’ll receive a customized, pre-scheduled meeting agenda, so whether you are a new niche product, or an established national brand, the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from California’s top retail companies.

MARK YOUR CALENDAR! .

www.cgastrategicconference.com

Sunday, September 25 Illuminators Golf Tournament Opening General Session “The CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs. The retailer has the opportunity to network with many of these companies and work at strengthening their relationship. This makes the conference so effective and quite unique; to be able to develop this many relationships all at one venue.” Kurt Erickson Vallarta Supermarkets

Opening Reception After-hours Social Event Monday, September 26 Collaborative Share Groups Opening Remarks and General Session Pre-Scheduled Business Meetings Reception & Illuminators Special Event Tuesday, September 27 Multiple Educational Sessions & Retailers Spotlight Pre-scheduled Business Meetings Luncheon Keynote Address

“CA GROWN was a first time exhibitor/sponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations. We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years ahead!” Steve Burns CA GROWN

UNIQUE SPONSORSHIPS We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers. For complete sponsorship information including a list of participating retailers and sponsorship prospectus, contact: Beth Wright Senior Director, Events & Sponsorship California Grocers Association (916) 448-3545 | (800) 794-3545 Bwright@cagrocers.com

CGA

| Board of Directors

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS

INDEPENDENT OPERATOR COMMITTEE CHAIR

C A L I F OR N I A G R OC E R

DIRECTORS

Chairman of the Board Kevin Konkel Raley’s

Second Vice Chair Jim Wallace Albertsons Companies, Inc.

Secretary Kendra Doyel Ralphs Grocery Company

First Vice Chair Diana Godfrey Smart & Final Stores

Treasurer Bob Parriott Twain Harte Market

Immediate Past Chair Joe Falvey Unified Grocers, Inc.

Kevin Arceneaux Mondelez International Inc.

Phil Miller C&S Wholesale Grocers

Dave Jones Kellogg Company

Raul Aguilar Anheuser-Busch InBev

Willie Crocker Bimbo Bakeries, USA

Dave Madden MillerCoors

Jon Alden Jelly Belly Candy Co.

Steve Dietz Tony’s Fine Foods

Jonathan Mayes Albertsons Companies, Inc.

Renee Amen Super A Foods

Ted Gardner Rio Ranch Markets

Joe McDonnell Campbell Soup Company

Teresa Anaya Northgate Gonzalez Markets

Jon Giannini Nutricion Fundamental, Inc.

Mark McLean CROSSMARK

Joe Angulo El Super (Bodega Latina)

Dick Gong G & G Supermarket, Inc.

Casey McQuaid E & J Gallo Winery

Rich Arnold Oberto Brands

Robin Graf Whole Foods Market

Mario Mediati The Clorox Company

Denny Belcastro Kimberly-Clark Corp.

Ryan Jost Procter & Gamble

Lynn Melillo Bristol Farms

Bob Bukovec Tyson Foods, Inc.

Arthur D. Jackson, Jr. Costco Wholesale

Dan Meyer Stater Bros. Markets

Paul Cooke Nestlé Purina PetCare

Michel LeClerc North State Grocery Inc.

Hee-Sook Nelson Gelson’s Markets

Brent Cotten The Hershey Company

Eric Lindberg, Jr. Grocery Outlet, Inc.

Nicole Pesco Save Mart Supermarkets

Dennis Darling Foods Etc.

Chris Podesto Food 4 Less (Stockton)/ Rancho San Miguel Markets Mike Ridenour The Kraft Heinz Company Casey Rodacker Mar-Val Food Stores, Inc. Dean Ryan Tops Fresh Market Denny Silva Coca-Cola Refreshments Doug Todd PepsiCo Inc. Jim Van Gorkom NuCal Foods Michael Walton Unilever Kevin Young Young’s Payless Market IGA

CONTENTS

F E AT U R ES

COLU M NS

Mergers and Acquisitions

President’s Message Could Trump Bump Impact Senate Race?..............4

2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights. The reasons are simple and not surprising.

Saving the Planet... Quietly

For years now, there’s been a quiet movement under way on the part of the food industry to save the planet. And best of all, these sustainability efforts are…well, sustainable.

Exploring Tomorrow Today

A California-based think tank is exploring global economics, generational trends and technological developments to learn more about where and how people will live, eat and shop in the future.

Foundation Inducts Industry Execs

| Issue 2

More than 600 industry peers, family and friends gathered in Costa Mesa, Calif. Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement.

From The Chair Growing People, Growing Grocery.........................6 Viewpoint – Kevin Coupe The Shopping Pate of Least Resistance..................8 Capitol Insider Trouble Is Brewing With California’s Bottle Bill..... 20 Perspective Competing Ballot Measures to Increase Taxes and Wages................................................ 23 Inside the Beltway POS Credit Card Fraud Escalates........................ 28 Washington Report Challenges Continue for EMV Implementation.... 30

DEPA RT M EN TS CGA News..........................................................10 15 Minutes With.................................................64 Advertiser Index .................................................68

CALIFORNIA GROCERS ASSOCIATION President/CEO Ronald Fong

Senior Director Government Relations Aaron Moreno Senior Director Events & Sponsorship Beth Wright

Vice President, Communications Dave Heylen

Director CGA Educational Foundation Brianne Page

Controller Gary Brewer

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

Publisher Ronald Fong E-mail: rfong@cagrocers.com Editor Dave Heylen E-mail: dheylen@cagrocers.com Associate Editor Tony Ortega E-mail: tortega@cagrocers.com For advertising information contact: Tony Ortega E-mail: tortega@cagrocers.com

Senior Vice President, Business Development & Marketing Doug Scholz

1215 K Street, Suite 700 Sacramento, CA 95814 (916) 448-3545 (916) 448-2793 Fax www.cagrocers.com

C A L I F OR N I A G R OC E R

Senior Vice President Government Relations and Public Policy Keri Askew Bailey

Executive Director CGA Educational Foundation Shiloh London

PRESIDENT’S MESSAGE

Could Trump Bump Impact Senate Race?

RO N ALD F ONG President/CEO

The 2016 November General Election may be one of the most important and influential in some time. In each issue of California Grocer leading up to the General Election, I will examine the key national, state and local races and their impact on our industry. This issue: California’s open Senate seat. It’s been 24 years since the last open seat Senate election in California. Can you remember

be the first Indian-American and only the second African-American woman senator.

who represented California prior to incumbent Senators Diane Feinstein and Barbara Boxer? My guess is most can’t. Last year, Boxer said she was throwing in the towel, opening the door for a new senator to be elected in November.

So what could make the June primary interesting?

Before examining the candidates, let’s take a quick look back at how we got here. Boxer was first elected to the Senate in 1992, the same year California’s other Senator, Diane Feinstein, took office after winning a special election to fill the term left vacant by the resignation of Pete Wilson. Feinstein was re-elected in 1994 and has served ever since. On the surface, the race for Boxer’s seat appears very low-key. It’s a safe bet that a Democrat will retain this seat (Democrats enjoy an overwhelming advantage right now in California). And right now there is one clear leader in the race. Who challenges the frontrunner depends on what happens in the June 7 primary. Before I explain, let’s first look at the leading candidates.

C A L I F OR N I A G R OC E R

On the Democratic side, California Attorney General Kamala Harris and Congresswoman Loretta Sanchez (46-CA) are the two top frontrunners.

As we go to press, Harris enjoys a comfortable lead over both her nearest party rival and Republican challengers. She has garnered the endorsements of the California Democratic Party, State Controller Betty Yee, State Treasurer John Chiang, Assembly Speaker Anthony Rendon and the SEIU California, to name a few. Her total campaign contribution nearly triples that of her nearest contender Loretta Sanchez. Harris would

California uses a “jungle primary” system that pits all candidates against each other, regardless of party, in a primary race. The top vote getters go on to the general election. So while Harris appears a shoe-in for the November ballot, Sanchez is in danger of missing the cut (not securing the second highest number of votes in June) and watching the November elections from the sidelines. A united Republican party is Sanchez’s biggest concern. If one GOP candidate runs in the primary, the party could steal the second General Election ballot spot from Sanchez. The GOP took a major step in this direction when Republican Senate candidate Rocky Chavez, an Oceanside assemblyman, dropped out of the race in early February. If Sanchez manages to secure the other ballot spot, this could set up a very interesting election come November. While Harris’ numbers are still considerably higher, Sanchez stands to become the first-ever Hispanic U.S. Senator from California, a prospect that might have significant appeal to the state’s ever-growing Hispanic population. Sanchez also is considered more of a moderate, while Harris is seen as a solid liberal. The GOP on the other hand, has not won a Senate race in California since 1988 and any contender will suffer the additional handicap of running when the Democratic presidential nominee is sure to carry California by a wide margin, maybe. The wild card continues to be

Donald Trump and his ability to rally the Republican vote. The top Republican candidates include former state GOP chair Tom Del Beccaro and George “Duf” Sundheim. The GOP field got a little more crowded in early March with wealthy Silicon Valley businessman Ron Unz throwing his hat in the ring. Unz ran for Californian governor in 1994 and is probably best know for authoring Proposition 227, which effectively eliminated bilingual education in California. Even with a Trump “bump” the chances of a Republican

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securing Boxer’s seat seems like a long shot at best. The real question appears to be whether a more conservative Democrat, or a long-shot Republican has any real chance of defeating Kamala Harris. Stay tuned! n

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FROM THE CHAIR

Growing People, Growing Grocery KEV IN KONK E L CGA Chair of the Board, Senior Vice President, Store Operations Raley’s Family of Fine Stores

Cultivating the next generation of grocery leaders is a noble challenge, worthy of our time, energy and resources. The grocery business is an integral part of my life. I started working as a courtesy clerk at Bel Air Market when I was 16 and joined Raley’s when the company was purchased in 1993. Sometimes the workplace was like a family reunion for me – as many as 11 of my relatives worked at Raley’s or Bel Air at one point or another. You’d probably describe my family as having “grocery” in our blood. I’ve stayed in the business because of the endless doors of opportunity. Prepared, or perhaps not, I chose to walk through them and couldn’t imagine working in any other industry. Being in the grocery business soon became my destiny and I love what we do and who we serve. Of course working and growing the industry isn’t limited to stocking products, or managing a department, or supporting stores from the corporate office. We need produce buyers, growers, farmers and manufacturers to provide the food, distributors and shippers to move it from place to place, and chefs to provide culinary inspiration to create new in-store environments for enjoying food. There are countless opportunities for young people to join our industry and have a long, rewarding career, but it’s up to us to find and inspire them!

C A L I F OR N I A G R OC E R

How do we do that? By connecting with young people and providing resources to support them in their pursuits.

Let’s start by promoting STEM education – Science, Technology, Engineering and Math – for every student. We need to fund scholarships that make it easier for young people to advance their learning.

Our CGA Educational Foundation has supported thousands of students in their educational endeavors. But most importantly, by mentoring the emerging stars in our communities and sharing with them our success stories in the grocery industry. CGA recently celebrated the careers of three industry veterans Rob McDougall, Donna Tyndall and Bruce Wyatt at our annual Hall of Achievement dinner. They are outstanding examples of leaders who have personally invested their time, talents and resources into growing people who grow our companies and our industry. Many companies in our great industry are finding innovative ways to educate the industry. At Raley’s, we’re reaching the next generation through a program called “Where Your Food Grows and Grazes,” which we developed in cooperation with local ranchers and the California Rangeland Trust. Students spend time on a ranch learning how livestock are cared for and produce is grown, and then they tour one of our stores to find out more about nutrition and our role in making fresh food available to them. Our goals are to inspire young people to make good food choices and to share our industry’s opportunities with them. Like farmers, our job is to cultivate new talent and watch it sprout. The next generation of leaders and innovators are out there waiting for us to inspire them. We can help this next generation blossom, grow and reap a harvest! n

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VIEWPOINT

The Shopping Path of Least Resistance KEV IN C OU PE Founder MorningNewsBeat.com

It isn’t quite the replicator technology fantasized about by “Star Trek,” – with which one could just say, “Early Grey, Hot” to a computer and it would magically appear – but that doesn’t mean it can’t – and won’t – change the world. The fact is, I think it has the potential to do both. Earlier this year, we learned that Samsung had unveiled a new refrigerator at the annual Consumer Electronics Show (CES) in Las Vegas. But this wasn’t just a refrigerator. It was a “smart” refrigerator. Called the Family Hub Refrigerator, this piece of equipment comes with a 21.5-inch touchscreen on one of its doors, which people can use to shop for products as they run low or out. Even more impressive, the refrigerator also has cameras inside that keep track of products as they are removed, so it can let people know when supplies are running low. And, people can access all this information from their smart phones, and use them to place orders.

freezers and refrigerators and put pots of hot water inside in order to defrost them. It was a total pain in the neck, but a routine part of life. (Barbaric, huh?)

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchase begins: in the kitchen. Samsung said that it has partnered with MasterCard to provide payment services, and, to start with, MyWebGrocer, FreshDirect and ShopRite for online grocery ordering. Needless to say, these platforms are thrilled. “Commerce-enabled devices like the Family Hub refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchase begins: in the kitchen,” said Eric Healy, president of MyWebGrocer. And Jodi Kahn, FreshDirect’s Chief Consumer Officer, observed that it created a “frictionless” and “seamless” road between shopper and shop. Bingo.

C A L I F OR N I A G R OC E R

iStock

Wow. I’m old enough to remember when refrigerators didn’t even have automatic defrosting. (Young people reading this will have to trust me on this. We used to have to unplug

Not long after Samsung made its announcement, I got an email from Amazon promoting a new item available on the site – a Brita water pitcher that comes with a filter that enables the consumer to have cleaner, better-tasting water. Except that this was a pitcher with a curveball – because this Brita pitcher is WiFi enabled.

VIEWPOINT

It comes, the email said, “equipped with a built-in counter that tracks the amount of water that passes through the pitcher’s filter. The pitcher itself will automatically order a new filter through Amazon Dash Replenishment when the old filter nears its capacity. This new connected pitcher with Amazon Dash Replenishment gives Brita owners exactly what they want – a new Brita filter on their doorstep at the time they need it.” Pretty cool. (I’m tempted here to tell younger readers that I can remember a time when we had to fetch water from the well with a bucket and a rope... but I’m not quite that old.) The Brita Infinity Pitcher will cost about 45 bucks, which seems to be about a third more expensive than most of the Brita pitchers that I found on Amazon... but the argument is that the tech-driven convenience will make the price difference palatable. And I have to say that I think the argument is pretty compelling. Or, to coin a phrase, it is an argument that holds water. Innovations along these lines have been much discussed over the years, and it only was a matter of time before dreams and reality met in such a way that products like these could become mainstream. Without a doubt, we’re pretty much there... products like the Family Hub Refrigerator or Amazon’s ecosystem-centric strategies (which are tied to the

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution.

Interestingly, Ford and Amazon announced at CES that they are working on an initiative “granting Ford owners

And the Amazon ecosystem expands a little more. What is important to remember here is that once one buys a refrigerator or a water pitcher, it usually will be quite some time before you have to replace them. The refrigerator only has value if it is filled with food that you want to eat... and the pitcher only has value if you have the filters that create cleaner, tastier water. And so it is critical for companies like Samsung and Brita to find ways to be more relevant and useful... which is exactly what they’ve done. One of the things that traditional retailers have to realize is that the advent of smart appliances and the expanding ecosystems being created by some retailer platforms – especially, but not limited to, Amazon – are combining to create an environment in which it is less and less necessary for people to actually go to the store. These progressive-minded companies are creating paths of least resistance that provide few reasons for consumers to detour elsewhere. Not everybody, and not all the time. But enough to have an impact on a lot of bottom lines. One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution. They like to talk about the people who still want to go to the store, about the hiccups that can affect click-and-collect or delivery services, about how rural customers have different needs than urban customers, and about how selling points like “your neighborhood grocer” or “hometown proud” or “old-fashioned service” or similar tropes are enough for retailers to hang their hats on when competing in this new environment. All of this may, in fact, be true. And still not enough to stave off the impact of technology, especially on a generation of shoppers that does not remember those ancient pre-Amazon days. Not all people, and not all the time. But enough to create leaks in the traditional market shares of a lot of retailers and manufacturers. Leaks that are likely to grow bigger with time. The future is coming. And it is traveling at Warp Eight. n

C A L I F OR N I A G R OC E R

Echo, Subscribe-and-Save, the Dash replenishment system and even the delivery drones that probably will be flying over our homes one of these days) are putting us right in the middle of what could turn out to be a pretty remarkable time. And retailers have to be prepared to embrace this revolution, which almost certainly will unfold faster than anyone expects.

unprecedented access to their connected-home devices from their cars, and vice versa.”

| 9

C GA N EWS

Grocers Converge on Sacramento

(l to r) Jonathan Mayes, Albertsons; Kendra Doyel, Ralphs; Gov. Jerry Brown; Diana Godfrey, Smart & Final; Ron Fong, CGA.

Grocery retailers and their supplier partners from throughout California gathered in Sacramento in late March to share business concerns with their state representatives on key issues facing the grocery industry.

In addition to the face-to-face meetings, attendees heard from Gov. Jerry Brown who addressed a number of topics including the deal struck with labor leaders over Easter weekend to introduce legislation that will raise the state’s minimum wage to $15.

The face-to-face meetings with the majority of state legislators highlighted the 2016 CGA Grocers Day at the Capitol, the Association’s one-day member advocacy event at the State’s Capitol.

C A L I F OR N I A G R OC E R

(l to r) Sen. Richard Roth; Mary Connelly, Costco; Eric Lindberg, Jr., Grocery Outlet, Inc.

(l to r) Charla Giles, Save Mart Supermarket; Assemblymember Rudy Salas; Michel LeClerc, North State Grocery, Inc.; Dave Madden, MillerCoors.

“This was a critical year for our members to participate in CGA’s premier member lobbying activity,” said CGA President Ron Fong. “Our members really stepped up and did a tremendous job of sharing our story and providing valuable insight into how our businesses operate.”

The governor said a deal needed to be struck as an alternative to a minimum wage proposition on the November ballot that would be even more burdensome on California’s business community. The Governor’s remarks were met with skepticism by the Association who later released a statement chiding the governor for not including the business community in its meeting with labor. “Our members are dismayed at the events of the past three days,” Fong said in a written statement to the media. “Majority Democrats and the Governor

Gold Level Albertsons, Safeway, Vons & Pavilions Coca-Cola Refreshments Unified Grocers, Inc.

Assemblymember Frank Bigelow; Troy Dinan, Raley’s; Ron Fong, CGA.

rammed a $5 increase in California’s minimum wage through the entire legislative process in just three days. They did so without meaningful conversation or an opportunity for businesses that will bear the cost burden to weigh in on the issue.” Attendees were also briefed by CGA staff on the key issues they would discuss during their legislative visits. These topics included employee scheduling, wine coupons, food bank donation tax credits and the state’s beleaguered beverage container recycling program. Following an afternoon of legislative meetings, CGA hosted its annual President’s Reception that allowed Grocers Day attendees to meet again with state legislators and staff but in a more relaxed environment.

Silver Level C&S Wholesale Grocers Costco Wholesale Gelson’s Markets Retail Marketing Services, Inc. Bronze Level Food 4 Less/Rancho San Miguel Markets Grocery Outlet North State Grocery, Inc. Nutricion Fundamental Ralphs Grocery Company/Food 4 Less Smart & Final Breakfast Kellogg Company Save Mart Supermarkets Luncheon Jelly Belly Candy Co. Ice Cream Social Clover Stornetta Farms, Inc. President’s Reception Command Packaging MillerCoors

Clover Stornetta Farms sponsored this year’s Ice Cream Social.

C A L I F OR N I A G R OC E R

Legislative visits highlighted CGA’s Grocers Day at the Capitol.

CGA also hosted its popular Ice Cream Social, located this year inside the State Capitol and was sponsored by Clover Stornetta Farms which provided the ice cream. n

C GA N EWS

The Association wishes to thank all sponsoring companies for their generous support of this year’s Grocers Day:

C GA N EWS

Foundation Selects New Trustee Chair Brad Askeland, Vice President, Holiday Markets, has been elected Chair of the California Grocers Association Educational Foundation Board of Trustees. Askeland had previously served as Foundation Vice Chair. Askeland succeeds former CGAEF Chair Jim Van Gorkom, NuCal Foods, who served in that position since 2011. Mark Johnson, Unified Grocers, Inc., was elected to replace Askeland as the Board’s Vice Chair. Jacquie Slobom, Gelson’s Markets and Jerry Landers, Raley’s will continue as the Foundation’s Secretary and Treasurer, respectively.

“We look forward to Brad building on the programs Jim was instrumental in fostering,” said CGAEF President Ron Fong. Askeland’s responsibilities will be to guide and direct the CGAEF Board of Trustees. The Foundation was created in 1992 to advance California’s grocery industry through employee education, industry research and recognition of excellence. Askeland, who has served as a Trustee since 2009, began his grocery career in 1988 as a courtesy clerk for a small independent market before joining North State Grocery, Inc. in 1995. He managed several stores before being named director of human resources in 2003. n

SEC Store Tour Features Draeger’s Market

Richard Draeger (left) hosted the SEC Store Tour of Draeger’s Market in San Mateo.

The California Grocers Association’ Supplier Executive Council kicked off its 2016 Store Tour series in March at Draeger’s Market in San Mateo. The tour was led by Richard Draeger, chief operations officer for the company.

The Draeger executive led the SEC members on an aisle-by-aisle tour, sharing his company’s business philosophy and strategy. Draeger told attendees that for his company, it’s not about having the lowest prices, but “making things easier for the consumer.” He added that shopping local is what makes Draeger’s different. Following the tour, SEC members were treated to a luncheon hosted by Draeger’s popular in-store cooking school. To learn more about becoming an SEC member, contact Sunny Porter, CGA, at (916) 448 -3545. n

New Members

C A L I F OR N I A G R OC E R

CGA WELCOMES THE FOLLOWING NEW MEMBER.

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C GA N EWS

CGA Releases Second Grocery Compliance Toolkit The California Grocers Associations released in March the second “tool” in its Grocery Compliance Toolkit – this one focused on the Americans with Disabilities Act. CGA contracted with the Sacramento-based law firm of Downey Brand LLP, to create a comprehensive, user-friendly ADA compliance guideline. In addition, CGA hosted two regional seminars in conjunction with the release of the ADA compliance “tool.” In addition, the CGA Educational Foundation hosted a one-hour webinar, conducted by Downey Brand, that outlined the specifics of complying with the ADA.

C A L I F OR N I A G R OC E R

“California grocers are increasingly seen as great targets for opportunistic drive-by ADA public access lawsuits,” said CGA President Ron Fong. “Despite recent changes to law, serial plaintiffs continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract monetary settlements. We created this toolkit to help retailers fend off these lawsuits.” The Grocery Compliance Toolkit was created as a CGA member benefit to help grocery retailers understand and manage the risks associated with complying with state regulations related to the grocery industry. The first “tool” was released last year and focused on hazardous waste disposal. CGA members can download both the ADA and hazardous waste disposal “tools” from CGA’s website: www.cagrocers.com, along with viewing both seminars. CGA will release additional compliance “tools” in the coming months. n

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Redefining “Middle of the Road” THERE IS A SAYING IN TEXAS POLITICS – “THERE’S NOTHING IN THE MIDDLE OF THE ROAD BUT YELLOW STRIPES AND DEAD ARMADILLOS.” While that may hold true in the Lone Star State, our friends from Texas may be shocked to find that the middle of the road in California is a relatively safe place to be. But finding safety on those center lines wasn’t always so easy. Open primaries and the rise of the moderates, particularly on the Democratic side of the aisle, have widened that middle of the road from a dangerously thin series of narrow yellow stripes, to a ten-foot wide median safe from most passing traffic.

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats), California exists solidly in the blue column with

However, a closer look reveals unexpected patches of purple dotting the political map. Within these purple areas are a number of legislative districts that reflect a uniquely Californian political identity – a laissez faire attitude on social issues mixed with a more conservative, middle-of-the-road view towards taxes and regulation. It was the voters in these areas the backers of Proposition 14 had in mind back in 2010 when they successfully pressed for passage of this initiative to bring open primaries to California, effectively changing the game of legislative elections in our state. The rationale for passage was simple.

Continued on p. 18

In an overall political climate that often forced candidates to the far-left and far-right during primary elections in order to cater to the base to win their party’s nomination, the general election would often leave middle-of-the-road voters from both parties (as well as independents) with no viable candidates to support.

Aaron Moreno, Senior Director, Government Relations, CGA C A L I F OR N I A G R OC E R

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats), California exists solidly in the blue column with Democrats holding every statewide office, as well as near supermajorities in both legislative houses.

Democrats holding every statewide office, as well as near supermajorities in both legislative houses.

GOV ER N M EN T REL ATIONS

iStock

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

C O N TI NU E D

Continued from p. 17

If all candidates stood for primary election at the same time with all voters choosing the top-two vote getters for the general election regardless of party, open primary backers reasoned that candidates would have to broaden their appeal to all voters in a legislative district, not to just the “true believers” who often decided primary elections. The result would be more moderate legislators, be they Democrat or Republican.

DEM

C A L I F OR N I A G R OC E R

California’s business interests have been particularly savvy in adapting to these changes by adopting strategies for supporting legislative candidates that were once unheard of. There was once a time when it was automatic that these business interests only backed Republican candidates. This has changed; particularly in districts with a majority of Democratic voters.

In these districts it is not uncommon to see a general election featuring two Democrats. These types of races provide a perfect synergy between Democrats running from a more moderate position and business interests who see a benefit from having such political perspectives in the Legislature. This new breed of moderate Democrat would have found it hard to advance out of a traditional Democratic primary, where the winner was decided by the hard-core base.

While remaining socially liberal, like more traditional Democrats, moderates stand apart by taking firm stances against new taxes and unnecessary government regulation – two views that align them with business interests around the state. And the business community has taken note, spending millions of dollars over the past few years either in direct donations to candidates or the establishment of political action committees spending on behalf of a candidate, to elect more moderate Democrats. This has had a big impact on the Legislature, particularly in the Assembly, where the informal, but highly influential Moderate Caucus holds sway.

P RE

This has been the case, as illustrated by the elections of Republicans Catherine Baker and David Hadley in Assembly districts that had elected Democrats in previous election cycles. Both won due to their willingness and ability to speak to voters from both parties from the primary all the way to the general election. This would not have been possible without open primaries.

In the open primary system, a moderate Democrat can not only survive, but thrive, making it to the general election by taking positions that appeal not just to their fellow Democrats, but to decline-to-state and even moderate Republican voters.

Numbering anywhere from 10 to 15 depending on who you ask and what is up for a vote on a particular day, this bloc of Democrats led by Assemblymembers Rudy Salas from Bakersfield and Jim Cooper from Sacramento, have had considerable success helping the business community in recent years by using their influence to either water down legislation that

The open primary has not only changed the strateg y of candidates looking to enter the Legislature, it has also changed the way interest groups develop strategies to elect legislators that best represent their world views. would adversely affect business, preventing such bills from being voted on by the full Assembly, or voting with Republicans to kill anti-business legislation. Some notable business victories facilitated by the Moderate Democrats during last year’s legislative

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

session were the defeat of legislation that would have required a 50 percent reduction in petroleum use in motor vehicles, the preventing of legislation increasing the minimum wage from being heard on the Assembly Floor, and the preventing of legislation requiring predictive scheduling from also being heard on the Assembly Floor, among others.

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats. Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats. While their support is certainly not 100 percent, even their support 50 to 60 percent of the time is enough to stave off the seemingly never-ending onslaught of legislation that has the potential to put a damper on the business climate in California.

Those percentages may not seem like much, but when you consider that without open primaries the Democrats coming from these same Democratic majority districts would often stand with business 20 percent of the time or less, the value of Moderate Democrats to business is high. So while the middle of the road in Texas may be nothing more than road kill armadillos and yellow stripes, the medians in California are wide berths that provide a cushion for business from forces that don’t necessarily have their best interests in mind. We must all do our part to keep that cushion in place. The election of Moderate Democrats, whenever possible, is a great way to do so. n Editor’s note: Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations. Moreno has more than 10 years experience in the California Legislature, most recently as Legislative Director for Assemblymember Mike Gatto.

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C A L I F OR N I A G R OC E R

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FFE 160307 / California Grocers Association / Half Page Horizontal / 7.375” x 4.875”

CAPITOL INSIDER

Trouble is Brewing With California’s Bottle Bill L O UIE B R OW N Partner in the Sacramento office of Kahn, Soares and Conway, LLP.

Over the years, I have used this column to discuss the California Bottle Bill and legislative attempts to “fix” it. Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program. California’s Beverage Container Recycling Program was created by legislation 30 years ago. At that time, recycling was a new word and the intent of the program was to change consumer habit. Glass and aluminum containers were sold with a surcharge which the consumer would receive back if they returned the containers. In that day and age, people commonly purchased six-packs of glass soda bottles from their grocery store. They were encouraged to bring those glass containers back to the store and exchange them for the next six-pack they purchased. The convenience of bringing containers back to the store was the impetus for the convenience zones created by the law. At that time, curbside recycling didn’t exist nor were there any real markets for recycled material.

C A L I F OR N I A G R OC E R

Over the years, a lot has changed in California.

Our communities are different. The definition of convenience has changed. Industries reliant on manufacturing with recycled iStock materials have been born and are thriving. Most important, we have changed the California’s throw away culture to one focused on recycling and reuse. Yet, California’s Bottle Bill has failed to keep up with the times.

Today the perfect storm is brewing. A number of California communities are revolting against convenience zone recyclers placing fees and others obstacles before them in an effort to keep them away. These recyclers, while generating the majority of containers returned through the program, attract patrons that many community leaders and grocery store customers prefer not to see in the parking lot of their local grocery store. Petroleum prices have driven the scrap price for plastic to a historic low making recycled content more expensive than virgin product. In addition, the formula Cal Recycle uses to determine the overall cost of recycling has failed to accurately capture recent increases in minimum wage and other cost factors. These three elements combined have made it nearly impossible for convenience zone recyclers to remain in business. This is evident by the announcement from RePlanet, the State’s largest convenience zone recycler, in late January to decertify 200 locations in Northern California. The decertification of convenience zones starts a process for Cal Recycle. First, they are required to review the zones where each site was located. They can either choose to exempt the zone from further service or change the status of the zone from served to unserved.

CAPITOL INSIDER

The decision to change a zone to unserved triggers an announcement by Cal Recycle to all dealers in the zone that they have 30 days to decide to take containers back in the store or pay the $100 per day â&#x20AC;&#x153;in lieuâ&#x20AC;? fee. Cal Recycle is evaluating the zones impacted by the decertification of RePlanet. Since the number of exempted zones is capped by statute, it is expected Cal Recycle will be forced to change the status on a large number of zones to unserved and likely impact hundreds of dealers in northern California. This process is expected to take the next 90 to 120 days to complete. In the meantime, CGA and others are developing a legislative strategy to address these issues before grocers are required to take action. Your legislative team is focused on a comprehensive solution that takes the grocer out of the position of the recycler of last resort along with a number of other changes to bring the program into 2016. n iStock

C A L I F OR N I A G R OC E R

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PERSPECTIVE

Competing Ballot Measures to Increase Taxes and Wages This year’s November ballot is shaping up to be one of significant importance to California grocers. Grocers in California should be aware of the potential implications that any of these measures will have on their business. There are several proposed ballot measures that may be on the November statewide ballot that would make significant changes to California’s minimum wage and tax laws. This article takes a brief look at the four competing tax increase measures, as well as two competing minimum wage measures. COMPETING TAX INCREASE INITIATIVES FOR 2016 BALLOT There are four competing tax increase measures on this year’s ballot. They include: n

A proposal by the California Hospital Association and SEIU-UHW that would expand and make permanent income tax increases on California’s highest earners but also allow Prop. 30’s sales tax increase to expire in 2016, as scheduled.

A plan by SEIU-UHW and the California Teachers Association that would extend the income tax increases under Prop. 30 until 2030 and would let the sales tax increase expire in 2016, as scheduled.

A third measure would impose a significant surcharge on property valued over $3 million.

A fourth measure would increase the tax on tobacco products by $2 per pack.

“The School Funding and Budget Stability Act of 2016,” No. 15-0065

Legislative Advocate Aprea & Micheli, Inc.

In Section 3 of the measure, the following statements of purpose and intent are set forth: “(a) The chief purpose of this measure is to protect our schools by temporarily extending current income tax rates on wealthy Californians, instead of awarding a huge tax break to couples earning more than half a million dollars a year, or individuals earning more than a quarter million. Instead of sending money back into the pockets of the wealthy, this measure sends the money to a special account that must be spent exclusively on schools. “(b) This measure is intended to keep California on a track toward balanced budgets and reliable funding for schools and community colleges, preventing a new round of devastating cuts to public education and a return to the days of chronic budget deficits and funding cuts. “(c) This measure guarantees in the Constitution that the revenues it raises for schools will be sent directly to school districts and community colleges for classroom expenses, not administrative costs. This school funding cannot be suspended or withheld no matter what happens with the state budget.” “The Invest in California’s Children Act,” No. 15-0070

This measure would make permanent the Prop. 30 personal income tax rates after 2019, plus add additional, higher rates for those earning above $1 million per year (individuals) or $2 million (married, filing jointly) with the highest bracket of 14.3 percent, and earmark the funds for

C A L I F OR N I A G R OC E R

This measure would extend until 1/1/2031 the personal income tax rates established by Prop. 30 and dedicate the funds entirely to schools, without the ability of the Legislature to suspend or withhold funds even in a state budget crisis. The measure also exempts these funds from the State’s Rainy Day Fund established by voters in 2014 by Prop. 2 (requiring a portion of state

revenues be allocated to the state budget reserve and to paying down debt).

CHRIS MICHELI

23 Continued on p. 24

PERSPECTIVE

Continued from p. 23

education (including preschool and child care, as well as CSU and UC systems) and healthcare. This measure would extend the Prop. 30 personal income tax rates after 2019, plus add an additional amount for those earning above $1 million per year with the highest bracket of 14.3 percent, and earmark the funds for education (including preschool and child care) and healthcare. Among the numerous intent statements found in Section 1 of this measure are the following: “(q) The Invest in California’s Children Act continues voter approved taxes on Californians earning more than $290,000 a year, while also imposing new and modest taxes on earnings in excess of $1 million per year. These funds will support education, healthcare, childcare, and preschool. “(r) The Invest in California’s Children Act also makes California’s tax rates fairer. If voter approved taxes on those earning more than $290,000 a year expire as scheduled in 2018, a millionaire will pay the same marginal income tax rate as an individual making $57,000 a year. “(s) Under The Invest in California’s Children Act, all tax revenue from this Act is guaranteed to go directly to education, healthcare, child care, and preschool.”

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“Lifting Children and Families out of Poverty Act,” No. 15-0043

This measure would impose an additional surcharge on real property with an assessed value of over $3 million. The surcharge would be based upon a sliding scale ranging from 3/10 of 1 percent for real property assessed at $3 million, to 8/10 of 1 percent for real property assessed at $10 million or more. The revenue raised would be allocated to numerous programs designed to reduce poverty, including prenatal services, expanded childcare, early childhood education, afterschool and summer programs, job training grants, tax credits, and monetary aid. The surcharge would be in effect for 20 years. The LAO estimates increased state revenues of $6-7 billion annually. California Healthcare, Research and Prevention Tobacco Tax Act of 2016 This measure would impose an additional tax of 100 mills for each cigarette distributed, and would apply an equivalent amount to other tobacco products as well as electronic cigarettes. As a result, the cigarette tax

would be increased by $2 per pack. There would also be a floor stock tax for each cigarette. The measure is estimated to raise in excess of $1.1 billion annually. These additional funds raised would be dedicated to healthcare, as well as research and prevention of tobacco use. COMPETING MINIMUM WAGE INITIATIVES PROPOSED FOR 2016 BALLOT The first of these two measures proposes raising the statewide minimum wage to $15 per hour. The second measure proposes raising the statewide minimum wage to $15 per hour, as well as increasing paid sick leave to 6 days per year. Existing law raises the statewide minimum wage to $10 per hour on Jan. 1, 2016. The cities of Los Angeles, Oakland and Berkeley have approved increases to $15 per hour (currently there are 14 local jurisdictions with a higher minimum wage than $9). Senate Bill 3 (Leno) would raise the statewide minimum wage to $13 per hour by 2018; that measure was held on the Assembly Appropriations Committee’s Suspense File. Based on household surveys, the Legislative Analyst’s Office estimates that roughly one-quarter of California workers – currently estimated at 4 million people – make less than $13 per hour. Occupations with large numbers of low-wage workers include food preparation and service, building and grounds cleaning and maintenance, and retail sales. According to the LAO, workers in inland California generally receive lower wages than workers in the state’s coastal areas (e.g., median wages in San Francisco and San Jose are more than 50 percent higher than median wages in Fresno and Bakersfield. In May 2015, California’s statewide unemployment rate was close to 6 percent, but a few coastal counties had unemployment rates below 4 percent. In contrast, a dozen counties – all in the inland part of the state – had unemployment rates above 9 percent. The two initiatives include: Service Employees International Union State Council (the state’s largest union) n

Raises the minimum wage to $15 an hour by 2020.

Thereafter, the amount is adjusted annually based on the rate of inflation of the prior year by using the California CPI. Continued on p. 26

PERSPECTIVE

Continued from p. 24 n

Requires at least six paid sick days a year.

This initiative will have $20-30 million in campaign funding from the State Council.

Referendum to overturn California’s law banning single-use plastic bags in grocery stores.

Initiative measure targeting hospital fees and Medi-Cal matching funds from federal government by requiring 2/3 vote of the Legislature to amend hospital quality assurance fees.

Initiative measure on school bonds funding for K-12 school and community college facilities in the amount of $9 billion, would divide the money as follows: $3 billion for new K-12 school construction; $3 billion for K-12 school modernization; $1 billion for charter schools and vocational education centers; and, $2 billion for community colleges.

Initiative measure to require statewide voter approval before any revenue bones can be issued or sold by the state for projects exceeding $2 billion.

Initiative measure to require performers in adult films to use condoms during filming. n

SEIU United Healthcare Workers West n

Raises the minimum wage to $15 an hour by 2021 ($11 on 1/1/17; $12 on 1/1/18; $13 on 1/1/19; $14 on 1/1/20; and, $15 on 1/1/21) Thereafter, the amount is adjusted annually based on the rate of inflation of the prior year by using the California CPI.

This initiative has been endorsed by California Lt. Gov. Gavin Newsom. In addition, it has already collected the 366,000 signatures needed to qualify. California’s November statewide ballot could have as many as two dozen measures. What impact that will have on the electorate remains to be seen. Among those that have already qualified for the November 8 ballot include:

We join the California Grocers Association in congratulating Gelson’s Rob McDougall and Donna Tyndall for their induction into CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement and the thrill of creative effort.

C A L I F OR N I A G R OC E R

Franklin D. Roosevelt

Select the Best

SUSTAINABILITY For nearly 100 years, we have been taking care of our customers while also caring for our planet. Our company-wide waste reduction, recycling, and energy-efficiency measures are central to the way we do business. The annual impact of our sustainability efforts is adding up! • 421,000,000 gallons of water saved • 1,100,000 cubic feet of landfill space preserved • 350,000 kilowatt hours eliminated • 529,000 trees protected

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Eric Pearlman, Dir Independent Sales WC Eric Pearlman, Dir Independent Sales WC

C A L I F OR N I A G R OC E R

INSIDE T HE B ELT WAY

POS Credit Card Fraud Escalates Post EMV – Best Practices NORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING PRESENTED TO THEM. BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT OUR EXPERTS PUT AT A 400-1,000% INCREASE OVER 2015 NUMBERS HAD THEM STUMPED. We reached out to law enforcement, reached out to congressional committees, reached out to the card associations and reached out to asset protection experts. We put the best ideas of the group together and offered the following advice and a webpage where we can add additional ideas, suggestions, tips and encouragement to get this problem under control. The first step is understanding the scope of problems you are experiencing, as there seem to be a couple of different problems. Some of our folks are seeing what we are calling “organized crime.” When a card is used 100 times in your store(s) in a couple of days; that is organized crime and clearly there are multiple people involved in this fraud. On the other hand, when one individual uses a card in your store and then tells their credit card company that they were not in the store and did not buy the products, that is still a crime, you are still out the money, but at least for now, it seems to be the work of one person attempting to take advantage of a bad system or bad issuers happy to charge back and ask questions later because of their “zero liability.”

Jennifer Hatcher Senior Vice President Government and Public Affairs, Food Marketing Institute

This term “organized crime” – is clearly not based on a legal definition, just a recognition that there is clearly more than one type of problem we are seeing simultaneously.

Putting in-store controls in place: Gift cards are a prime target for criminals for a number of reasons. A person can buy a high denomination gift card, they are lightweight and easy to transport and they are easily sold on the Internet. Several FMI members have taken steps to mitigate this risk using one or more of these approaches: n

Moving the card-branded gift cards that can be used in any store, behind customer service.

Restricting selling high value gift cards to certain hours of the day (example: 6am–10pm).

Only allowing cash, or PIN-enabled debit cards for the purchase of gift cards.

Requiring a photo ID for gift card transactions.

Removing gift cards from self-checkout lanes.

Setting up a point of sale system prompt for managers’ approval for gift card transactions above a certain dollar amount.

Not allowing purchase of gift cards with a prepaid or reloadable Visa, American Express, MasterCard or Discover card.

Limiting the value and/or the number of gift cards that can be purchased in a single transaction or on a single card in a certain period of time.

C A L I F OR N I A G R OC E R

Getting a handle on the problem:

Track your chargeback rates and work to identify where your greatest vulnerabilities are in the store.

Coordinate with local law enforcement and ask for any trends they may see that could be the work of an organized criminal element. Share your experience with them.

Fraudulent transactions are a crime, so ask law enforcement how and when they may suggest you file a police report for chargebacks resulting from fraudulent transactions and any terminology you should use if you believe a particular chargeback may be linked to others.

I N S I D E T H E B E LT WAY

We are seeing fraud now well beyond gift card fraud. You may want to put additional precautions in place for any credit card transaction. Looking Beyond Gift Card Fraud to All Credit Transactions

A manager’s override on any large order (over $1,000). An order at a grocery store for more than $1,000 (unless you know the customer and the reason for the transaction – hosting a large party/ caterer/restaurant owner) should cause immediate concern/scrutiny.

ID check and transaction amount limits per customer and per day to help mitigate risk. Members are reporting cards that have been used more than 100 times in stores in 2 days. You need to have a mechanism in place to make sure this type Why am I asked for ID on of “organized crime” does not credit transactions? happen to you. The supermarket industry has

We are seeing fraud now well beyond gift card fraud. You may want to put additional precautions in place for any credit card transaction: n

Require a 100% ID check on all credit card transactions, or ID over a certain dollar value or ID on any customer not using a loyalty card. If you can say that you check ID 100% of the time or can link a transaction that was charged back by a customer who presented a loyalty card or is shown via camera to be in the store purchasing products at the time of the transaction, your ability to fight a chargeback is greatly enhanced. Post signage at the POS explaining this fraud and your response to combatting fraud and protecting your customers and your intent to involve law enforcement. The sign alone may be enough to move the criminal to another location. Plus it cuts down on time your cashier has to explain why they are asked for ID and the customer in front of them using a PIN debit card was not asked for ID. Some companies have added address verification system (AVS) to their credit card processing. As frequently seen at gas pumps, it prompts the customer to enter their 5-digit zip code at the point of sale. If they get a mismatch, they have trained all cashiers to ask for ID. Prohibit manual entry if the magnetic stripe does not work or send that transaction to a customer service desk for more scrutiny.

seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards. In an effort to keep your information safe and keep our prices low, we are asking for your ID to confirm your identity on a credit card transaction. We are not experiencing fraud with PIN debit or PIN credit, so if you insert a PIN, you will not be asked for ID. We are working closely with law enforcement and are filing police reports when fraudulent transactions occur.

Guest/customer attempting multiple credit cards with declines.

Guest has a stack of credit cards visible and outside of wallet.

Pay close attention to cards issued by international banks in Asia and the Middle East, etc.

Buying large quantities of open value gift cards.

Buying large quantities of beer or wine.

When asking for ID, the customer becomes agitated, nervous or in a hurry.

In response to our requests, both Visa and MasterCard have offered more specific information available on our web page. FMI EMV Chargeback Page: http://www.fmi.org/emv-credit-chargebacksbest-practices-and-guidance Bottom line, you are certainly not the only supermarket being defrauded, but be aware, be vigilant, be prepared, and share what you learn. In considering any actions, you need to consult your contracts and the operating rules of the card associations. n

Implement CVV verification on manually entered credit transactions or all credit transactions.

Remain vigilant against any kind of suspicious activity, such as:

C A L I F OR N I A G R OC E R

If you are testing EMV in-store and have a register running EMV, direct all gift card, high value or questionable transactions through that lane. This could significantly lower your chargeback exposure.

WASHIN GT O N R EP O RT

Challenges Continue for EMV Implementation THE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY, MASTERCARD AND VISA, KNOWN AS EMV, HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND CONSUMERS. AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US, MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION. Not a day goes by that I don’t hear from NGA members who are beyond frustrated with the slow pace of EMV implementation. To be clear, the vast majority of NGA’s members – from single-store operators to regional chains – invested tens of thousands of dollars in new hardware and software well before the October 1 shift only to be left waiting on a massive backlog in the certification process which is controlled by the card networks.

iStock

As an example, NGA has one retail member who installed EMV capable hardware in its 70 -plus stores well over a year before the October 1 deadline and yet continue to wait on certifications so it can begin accepting EMV cards. Meanwhile, these retailers are being hit with thousands of dollars in chargebacks from the banks and card networks simply because they are not “EMV compliant.”

C A L I F OR N I A G R OC E R

Peter J. Larkin President and CEO National Grocers Association

We understand that the certification process, which is mandated by the card networks, has experienced a number of delays that range from the card networks’ late delivery of technical code to other complications slowing the certification process. None of these delays are the fault of merchants, yet it’s the merchant who is facing an onslaught in new chargebacks as well as confusion among consumers who don’t understand why they can’t use their chip cards at their local supermarket. While some people may feel that EMV technology is more secure for consumers, the reality is the chip has one main purpose and that is to validate the authenticity of the card at the point of purchase, making it more difficult to counterfeit the card.

Unfortunately, the vast majority of EMV credit cards being issued by banks in the United States are being issued without PINs, which raises the question why go to all the expense to issue EMV cards without adding a simple PIN authentication as well? Many independent supermarkets are investing in advanced technology such as tokenization and end to end encryption to further protect the consumer’s data from the swipe on through the transaction processing. Some are even making further investments to protect consumer data with products such as First Data’s TransArmor® Solution – the same technology that secures Apple Pay – to offer an added layer of security. Merchants who have made the investment to comply with the October 1 deadline should be given a “safe harbor” and shielded from EMV specific chargebacks. NGA has reached out to Visa and MasterCard leadership to open a dialogue in regard to the significant backlog in the EMV certification process and the increased number of chargebacks to merchants. NGA is also working to educate federal policymakers on the challenges merchants have faced during this transition period. It’s time for the card networks and banks to stop passing the buck onto the backs of merchants, but rather they should work together with merchants to further eliminate fraud by issuing credit cards with PINs, work to speed up the EMV certification process, and put a hold on chargebacks. n

HISTORY, TRADITION AND SERVICE TO FAMILY, FRIENDS AND THE INDUSTRY HAVE BEEN THE CENTERPIECES OF DAVE DIMOND’S LIFE AND CAREER – QUALITIES THAT WILL ALSO MARK HIS TENURE AS THIS YEAR’S ILLUMINATORS HEADLITE. Dave Dimond, Senior Vice President of Sales at Milton’s Baking Company in Carlsbad, Calif., started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomas’ English Muffins.

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the event,” he recalls. “I saw then the value of being involved and supporting the organization. When I began working for Milton’s they were anxious to offer the same support and I’ve been involved with the Illuminators ever since. As the incoming Headlite, being the custodian of the organization’s history and traditions is important.

Dave gives it his all during The Illuminators Special Event.

When he got married at 19, his father-in-law, then a route sales rep for Oroweat, convinced him that a career in the grocery industry was the best way to make an honest living and take care of his future family.

“At the same time we have to be relevant and adapt,” Dimond says. “This is what will keep the organization healthy in the years to come. I like to think I’ve done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishment.”

T HE ILLUM IN ATORS

Meet Illuminators Headlite Dave Dimond

He took that advice to heart and started knocking on doors. “Thomas’ was the first to give me a shot,” he recalls. Dave with his wife, Andrea. “I worked my way through the ranks to supervisor, district manager, then to account executive. I was doing that when Thomas’ bought Oroweat. So I have pretty deep roots in the business.”

“It’s been a great time, a challenging and interesting business, and having someone who understands that has sure helped,” he says.

The incoming Headlite says that if he can get people to do what he has done for over 20 years he’s convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers. Continued on p. 34

Dimond’s association with The Illuminators goes back to the mid-1990s when he was with Four-S, an independent bakery in Southern California.

“Some in the younger generation might not see the value,” Dimond says, “But the friendships I’ve formed in this business run deep as a direct result of my involvement with the Illuminators.”

C A L I F OR N I A G R OC E R

It was also a place where personal relationships blossomed. He met his future wife, Andrea, at Thomas’ when he was a single father raising three kids.

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships.

T H E I L L U M I N AT O R S

Continued from p. 33

Part of that is getting to see the organization as fun and not just hard work. “In the old days we had badminton committees, diving contests, lawn bowling and croquet in addition to the golf tournaments we do today,” Dimond says. “The intent was to foster better relationships and we’ll continue trying to make sure events on the calendar are as enjoyable as they can be.” Dimond says The Illuminators is a great organization to be a part of, particularly for anyone seeking to build a career in the grocery industry. “The Illuminators give you the opportunity to have access to senior leadership throughout the grocery business,” he says. “It’s a great opportunity to get to know people you might not ordinarily know. That only comes from hard work and really putting yourself out there.”

This doesn’t seem to be an issue. “We’re looking for record attendance at this year’s WAFC Convention in Hawaii,” Dimond notes. “We’re also adding additional events like Town Halls and Q&A sessions with many retailers.” The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC. “So, I guess we’re doing something right,” Dimond muses. “Yet there’s always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change. That’s what I’m going to do because we have a lot of people on the board with great ideas.” Dimond says these events enables The Illuminators Educational Foundation to offer more than $100,000 in scholarships last year. “The goal is to increase this amount annually so that we can offer more scholarships,” he says. “We can only do this based on support from the grocery industry and the senior leadership which supports the Illuminators.” At present, The Illuminators have two networking events on its calendar. In May, The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano, President, Ralphs Grocery Co.

Dave with teammate Kevin Konkel, Raley’s.

That said Dimond believes younger people have a lot to contribute to the organization.

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill.

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“Our Officer and Hilite team will continue to bring in new energy and add to what’s been done over the years,” he notes.

“We have great support from many, many executive leaders in the food industry,” he says. “They understand and appreciate what the Illuminators do. The industry calendar is pretty full with a lot of great causes people want to be involved in.”

The key, Dimond says, is to “remain relevant in order to keep people interested.”

“We’ve also locked up an event with Grocery Outlet in late July,” Dimond added. In addition, the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies. On top of this, it’s rare to find an Illuminator that’s not involved in other organizations like the City of Hope, Cystic Fibrosis, Olive Crest, and The Children’s Miracle Network. Dimond is no exception and he’s rolled up his sleeves for many of these organizations over the years. Last year, he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice. “It’s very humbling to get recognized for giving back and just doing what you’re raised to do,” Dimond says. “I hope to do the same thing as Illuminator Headlite.” n

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THANKS JIM FRENCH,

FOR HIS DEDICATION IN 2015 AS OUR ILLUMINATOR HEADLITE.

WELCOMES DAVE DIMOND,

OUR INCOMING HEADLITE AS HE CONTINUES TO “SPREAD THE LITE OF GOOD FELLOWSHIP” IN 2016.

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CONGRATULATIONS DAVE DIMOND on being named the 2016-2017 Illuminator Headlite.

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C A L I F OR N I A G R OC E R

| 37

Thereâ&#x20AC;&#x2122;s still a major need for retailers to achieve economies of scale, especially as they face specialist competition that has a much lower cost base.

MERGERS AND ACQUISITIONS

BY LEN LEW IS

2015 was a record year for all merger

and acquisition activity and 2016

T might hit the same

heady heights

B Y L E N L E WI S

he reasons are simple – economic fundamentals are sound, the need to acquire expertise and distribution is essential; and there are plenty of strong regional chains and independents looking to wed. “There’s a lot of interest in the grocery sector,” said Brian Todd, president of The Food Institute. “Private equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new. Some are just looking for a safe haven for cash. “Meanwhile, some family owned chains, especially third- or fourth generations are looking to cash out,” he adds. “Also, grocery is seen as a lot sexier business than it used to be.”

His comments underscore KPMG’s 10th annual survey focusing on the outlook for M&A activity across a wide variety of industries this year.

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in M&A activity this year. The need to get bigger in new markets is not necessarily driving M&A at retail, according to Rampoldt. “It’s about elevating capabilities,” he says. “When you think about all the things that retailers need to be good at – everything from pricing and promotions to localized assortment – it’s obvious they need to be sharper than they were five years ago.” Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base. “The ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and, in some cases, technology,” he says. “It’s a totally different game. Retailers must be more data driven in order to make a rapid response.” No one is ruling out the possibility of more mega-deals this year since, as Todd put it, “There are always surprises.” However, with the industry coming off a year of mega-mergers, the total number of stores involved in merger activity this year will be down, according to David W. Schoeder, principal in The Food Partners, a Bethesda, Md.-based investment banking firm, providing merger, acquisition and divestiture and restructuring services to the food industry. “But over the next 36 months, we’re going to see consolidation driven by two factors,” he says. “First, if you’re operating a conventional store you’re probably in denial. You have to be focused on Continued on p. 40

The executive survey, conducted in partnership with FORTUNE, anticipates an acceleration of M&A

While not focused strictly on retailing, the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year. And the vast majority of deals will be in the U.S. given the relatively strong economic outlook.

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Joel Rampoldt, retail and consumer lead for KPMG Strategy noted: “There’s still a major need for retailers to achieve economies of scale, especially as they face specialist competition that has a much lower cost base. The ability to spread out things like distribution, marketing and sourcing costs and SG&A across a broader perimeter is imperative.”

activity this year and an increase in the average deal size. The average value per acquisition will be less than $250 million, according to 52 percent of respondents.

MERGERS AND ACQUISITIONS

C O N TI NU E D

Continued from p. 39

So you want to sell the business or maybe buy another one but can’t find the right partners? A former Italian comedy writer and MBA v, Brian Pallas, has come with a unique idea called the Opportunity Network designed to connect nearly 6,000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries. Opportunity Network is headquartered in London, but the company now has offices in New York and Barcelona along with reps in cities like Dubai, Paris, San Francisco and is in the process of moving into Asian markets. The business has been described as something like the Craigslist of mergers and acquisitions. Members can list businesses anonymously and connect with another that they think might be a good fit. However, there is a minimum deal size of $1 million. The app enables members to filter the deal by size, location and industry. So, if you’re tired of looking for bargains on golf clubs or restaurants, you can shop around for another company.

operating a conventional store with a twist. Otherwise you won’t be in tune with the new world order and what it takes to be successful today.” Schoeder says the other factor is an aging group of independents with no succession plan. Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents. These are the ones Schoeder called “pac-men” who have grown by gobbling up others. “These are the super independents,” he says. “They’ve got management teams in place, they’re generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successful.” Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides. “Most grocery retailers are not truly nationwide, so filling in their portfolio is always attractive,” he says. “This will probably happen more in supermarkets than other classes of retail.” This is also true for independents who are not only selling out but interested in buying new locations to expand their territory, said Todd. “Competitive concerns are also driving deals,” Todd says. “Everyone’s selling food – dollar stores, convenience stores, clubs and other alternative formats. Retailers are looking to protect their market or expand into new ones to increase sales and profits.” Clearly some geographic areas are more ripe for deals than others, Todd said, noting that the Southeast and, to some degree, the Southwest are still growing. Some secondary markets can be attractive due to their low capital costs, but it’s the major metro areas with built-in demographics that are more appealing. The economy in and of itself will have little impact on

consolidation, according to Schoeder. What does have an impact is availability of credit, he said, noting that some banks shied away from lending to grocery stores after the Haagen and A&P bankruptcies. “They’re still very skittish,” Schoeder says. “The ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money, not putting more equity into it,” he says. “You used to be able to borrow four times the cash flow to get a deal done,” he says. “The debit to cash flow ratio is probably off a bit for strategic buyers. But everything depends on the quality and vision of the operators. You have to have a credible plan and the bite size has to be manageable.” But scrutiny by lenders could be eclipsed by that of government agencies. “The Hagen debacle embarrassed the Federal Trade Commission,” Schoeder says. It even slowed down the Ahold/Delhaize merger he said, noting that the FTC is doing an internal investigation to see what went wrong. Nonetheless, Schoeder believes the agency’s stance is still far more liberal than it was 10 or 15 years ago. “The focus now is making sure there are credible buyers that can operate the stores to be divested,” he says. “Their mandate is to make sure there is a viable competitor to maintain competition in the marketplace.” Meanwhile, Rampoldt believes the U.S. supermarket industry is still attractive to overseas buyers. “I worked a lot in Europe,” he says. “The competitive intensity there is enormous and the ability to grow by opening new units ended decades ago. We’re only just getting to that life stage in the U.S., yet there are still lots of places to grow by opening new stores and increasing square footage.” Continued on p. 42

“There are plenty of examples of successful retailers being owned by

C A L I F OR N I A G R OC E R

non-merchants,” he says. “In many cases they try to free the business

by shifting investment and assets from things that don’t do anything to things that do and improve the customer proposition.”

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

MERGERS AND ACQUISITIONS

C O N TI NU E D

Continued from p. 40

WHAT’S DRIVING ACQUISITIONS IN 2016?

37%

36%

25%

Entry into new businesses

Expand geographic reach

Opportunistic-target becomes available

37%

34%

Expand customer base

Enhance Intellectual Properties, or acquire new technologies

16%

Acquiring additional supply chain elements

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like “click and collect,” according to Rampoldt. “It’s very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the U.S.,” he says. “In fact, it may be more attractive than just buying a company for brick and mortar (sales). It’s inherently more complicated, but I wouldn’t be surprised if many companies weren’t thinking about it.” However, entry as a startup, like the route that German deep discounter Lidl is taking, is certainly feasible. “They decided not to come in through acquisition but it all depends on the format. It makes sense to grow organically if you’re operating a format that appeals to a specific segment of customers. Where you site those stores is key,” he said, noting that an acquisition would not necessarily provide this flexibility. When considering acquisitions, a strong cultural fit continues to be essential.

C A L I F OR N I A G R OC E R

“If you look at the companies that have been successful you’ll see that they’ve paid a lot of attention to individual cultures when bringing two firms together – with associates, the culture they project to their customers as well as the pace at which they make changes,” he says.

“Companies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day. ” You’ve got to think about the customer experience and protect the one-on-one interaction between customers and associates,” he adds. “It’s important that the quality of that relationship is not jeopardized.”

But the trickiest part of any acquisition may be the decision involving central vs. local control and how much autonomy the regions and stores will actually have. “It’s critical to get right,” Rampoldt says. “There are examples of both strategies being successful, but you have to be one or the other.” Asked whether buyers are shying away from turnaround situations, he replied: “Not really. There’s still an appetite for that when the price is right and it’s clear what levers have to be pulled to turn the acquired company around.” This is especially true for private equity firms who are likely to continue acquiring retail operations. “They like businesses where they understand what to do to get results,” Rampoldt says. “They’re very good about basic blocking and tackling around inventory management, distribution, store operations and efficiency. Those things are cause and effect in retail and private equity firms have a good idea of what to do, what they have to put into the business and how long it will take before they get out.” But, he quickly noted that acquisitions are not necessarily a short-term play for private equity firms. “There are plenty of examples of successful retailers being owned by non-merchants,” he says. “In many cases they try to free the business by shifting investment and assets from things that don’t do anything to things that do and improve the customer proposition.” n

C A L I F OR N I A G R OC E R

By Cassandra Pye

For years now, there’s been a quiet movement under way on the part of the food industry to save the planet. These efforts are important to consumers, they shave operating costs in a variety of ways, they align with a complex and intricate supply chain and they’re having a real impact on the industry’s environmental footprint. Best of all, these sustainability efforts are…well, sustainable. It wasn’t so long ago that sustainability for a grocer meant breaking down cardboard for scrap collectors and giving the local Boy Scout troop a spot near the store entrance to collect bottles and cans. Locating a market for recycled wood and metal was almost considered progressive. Today, sustainability has become an essential part of every business across the nation. California consumers lead the nation in the demand for preservation of our planet and its resources; sustainability is no longer an option, it’s an expectation for customers. And, where our customers go, as they say, we follow. Take Kroger, for example. In the middle of their 49 -acre campus in Compton, Calif., sits the firstin-the-state anaerobic digester. Billions of bugs

cleaning up the environment under the Ralphs and Food4Less banner. “Our perishable food program donated $4 million of food to our community partners last year,” states Kendra Doyel, Vice President of Public Relations and Government Affairs for Ralphs/Food4Less. “Food which can’t be sold or donated is run through our anaerobic digester which converts food to fuel. This fuel powers about 20 percent of our home offices, our warehouse, the creamery and the transportation center – all located at our Compton facility.” “The digester has reduced diesel truck trips by 500,0000 miles each year – miles we used to drive to take food to our composting center. It also cleans up about 29,000 gallons of wastewater, every day, from our creamery.”

iStock

S AV I N G T H E P L A N E T … Q U I E T LY

BY CAS S ANDRA PYE

Wastewater from the creamery is mixed in with food waste – including packaging – creating a “milkshake” which is heated and fed to the bugs. Upwards of 150 tons of food waste is processed each day. The result: the equivalent of power for 8,000 homes, annually, is produced to support the facility. And, clean water – a byproduct of the process – is reused. Doyel says the company is now looking at ways to eventually use particulate matter as compost. The processor sits in a compact space and, according to Doyel, is both odorless and emits very little noise. “This is a fairly unique project,” says Doyel. “There are anaerobic digesters all over the world but this one sits in the middle of an urban area, surrounded by businesses, homes and people. We’ve been operating the project successfully for three years.” Ralphs/Food4Less also engages in traditional sustainable practices, recycling about 7 million pounds of cardboard, plastic and metal, annually. “And, we’re also helping our customers live a more green lifestyle by offering recycling inside our stores, offering green products – like light bulbs, for example – which help them to save energy,” she says. For Ralphs, she adds, sustainability means striving to reduce the company’s impact on the environment by using natural resources responsibly while minimizing waste in their operations. Brian Dowling, Vice President for Public Affairs for Albertsons-Safeway, says the term sustainability, over the last decade, has evolved. “I would say sustainability wasn’t a term that was tossed around too much,” Dowling said. “But if I look at what companies did 10 years back it was about the environmental footprint – so recycling, collecting cans, cardboard, etc.

Albertsons-Safeway, whose 14 operating divisions include Acme, Shaw’s and Jewel in the east and midwest and Vons on the west coast, has taken environmental stewardship to a whole new level.

“In the seafood space, our goal was to have all of our fresh and frozen label sustainably-sourced by end of 2015,” states Dowling. “Although we did not hit our target for fresh, we were pretty darn close with our frozen – at 99 percent.” Dowling says that in fresh [seafood], the challenge is there aren’t good alternatives available yet. “So we’re really working hard with that industry and that objective continues – especially now that we’re a larger company,” he says. “We don’t have a goal yet, but we’re working with FishWise and expect to wrap up by June.” FishWise is a sustainable seafood consultancy that promotes the health and recovery of ocean ecosystems through environmentally responsible practices. Dowling says Albertsons-Safeway will establish a goal for all of its banners. Sustainability efforts are in play on land, as well as sea.

J U S T T H E N U M B E R S: A L B E R T S O N S - S A FE WAY n

Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled.

Well over 104,000 tons sent to compost or animal feed.

29 million pounds of seafood transferred to responsible sources since 2009.

First retailer in the world to offer Fair Trade Certified seafood – sushi grade tuna.

Set a goal to source 4.8 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items.

Set a goal to source only cage-free eggs for store operations by 2025, based on available supply.

“Legacy Safeway stores did recycling, starting in the 1960s,” recalls Dowling. “In California, we have the opportunity to also backhaul and aggregate materials like cardboard, soft and hard plastic, metal, wood. But, we’re also focusing more on food waste.” Dowling says Albertsons is taking a tiered approach – expanding its partnerships with food banks to be able to get food that’s at the point where it can’t sell it but can get it to food pantries by sell-by dates. “We’re always looking for new alternatives; if we can’t send product to a food bank but don’t want to send to a landfill, then we can compost it or send to farmers for animal feed,” he says. “Our objective is to move towards zero-waste.” Continued on p. 46

“Sustainability has been at the root of what we do – for a long time,” says Dowling. “Recycling cardboard

Whole different level, indeed. The nation’s secondlargest grocery chain is close to hitting an unprecedented target for seafood.

C A L I F OR N I A G R OC E R

“If you look at where it is today, it’s an opportunity for companies to create value for their organization and do good for the broader community at the same time.”

and plastic didn’t get headlines but our efforts in recent years – on the seafood side and, more recently, on the human trafficking side of the business – are taking things to a whole different level.”

S AV I N G T H E P L A N E T … Q U I E T LY

C O N TI NU E D

Continued from p. 45

The Albertsons-Safeway distribution facility in Tracy, Calif., is one of several which has achieved zero-waste status. Dowling says his company is now constantly examining every part of their organization – products, community, employees – against what can be done for the planet. “There’s also been a shift in consumer attitudes and what they expect companies to do in this area,” he asserts. “There are real issues in seafood supply so we want to provide product for our customers but do so in a responsible way.” The Albertsons-Safeway partnership with FishWise was established in 2009 and the organization, Dowling states, continues to counsel and advise the company on seafood issues. He adds that the organization is showing retailers ways to continue to sell a lot of product but do so in a responsible way – for many years to come.

C A L I F OR N I A G R OC E R

“We’re a pennyon-the-sale business,” says Dowling. “That makes us look carefully at opportunities to save on water, energy, shipping costs. All these Ralphs Grocery Company’s anaerobic digester. efforts make good sense for the business; there’s a duality which drives what we do.”

For Richard Draeger, Chief Operating Officer, Draeger’s Market, San Mateo, Calif., sustainability is a collection of practices. “It’s not one thing, it’s pretty much everything,” he suggests. “It includes energy-efficiency initiatives, recycling programs – including containers but also hazardous waste. It has a lot to do with energy

renewables that you employ as part of your overall energy consumption. “We don’t want to burn energy,” he says. “After labor and labor-related costs, it’s the next highest line item for our company. We’re trying to mitigate cost.” And, he says, his company is looking at everything because as a small company “we’re looking at decent paybacks – often five years for many of these items,” he states. “We’ve got R-30 [insulation] on our rooftops and R-19 on our walls,” Draeger says. “We’re looking at photovoltaic energy production for our facilities and at the moment we are looking at “Bloom Boxes”* – cogeneration of energy derived from natural gas – for our operation.” Draeger says LED lighting – lighting, in general, for that matter – is incredibly important to lower costs and sustainability. “We’ve changed lighting, literally, throughout our stores,” he says. “There will not be a traditional light anywhere. For our Los Altos store (where they’re rebuilding the store, from the ground up, adding 25 percent more square footage), we’re going to include photovoltaic energy production, we’re also considering Bloom Boxes and anything else that’s sustainable.” Including food. “The food we select for sale is sustainable,” says Draeger. “The more we accept from local vendors – especially produce that’s considered much more sustainable as those from distance sources – the better. We’re also using better refrigeration gases; so much has changed – including those more dangerous gases from years ago.” What do Draeger’s’ customers think? “Consumer response is always positive,” Draeger insists. “They like to see that you employ sustainable practices. For example, we’ve just started on closing our open merchandised refrigerated fixtures with doors – really nice glass doors on all of our refrigeration fixtures – that’s sustainable.” Draeger also thinks that when a customer looks at sustainability, they’re really looking at the types of foods a retailer is presenting to them in the produce department – buying locally, and folks who are within

S AV I N G T H E P L A N E T … Q U I E T LY

60 -100 miles of your store. He says consumers notice

that and they’re willing to pay for it. “We don’t waste a whole lot of food either, to be honest with you,” says Draeger. “Most of it is backhauled. We get rid of a lot of organic waste that way. Not all communities we’re in provide backhaul to the farms. It’s expensive to do that for a small retailer. But, if you’ve got a community providing the service, it’s more cost effective to do it that way.” Draegers recycles materials often. “Those things aren’t even on the radar,” says Draeger. “They’re happening on the natural and have been for a long time.” The updated Los Altos store will have more natural lights by way of skylights and windows. And, there will be charging stations for electric vehicles (EVs). “Again, these communities are maturing and these technologies are now available – so we provide the support services to our customers.”

Draeger also poses a challenge to the industry. “The better we become at messaging [about] what it is that we do, the greater customer appreciation would be,” he insists. “That’s the trick. You do these things as a business and don’t necessarily tout what you do. It’s important to do that.” Draeger says they tell their customers about his company’s reusable bag program and some of the energy efficiency programs they carry out with the support of Pacific Gas and Electric Company – including electronic control monitors and variable speed compression motors, all aimed at lowering energy usage – but they can always tell customers more of that story. Albertsons’ Brian Dowling also sees a future where retailers begin to collaborate more on these efforts. “Early on,” he says, “the work we did made us independent of other retailers. It’s not going to happen that way anymore. Continued on p. 48

Good for grocers. Good for the environment.

To schedule an appointment, contact: Heather Dougherty Commercial Solutions Group | Food Waste Specialists M 216-200-9439 | Heather.Dougherty@emerson.com

C A L I F OR N I A G R OC E R

An alternative to landfills and traditional compost programs, Grind2Energy™ Organics Recycling System efficiently converts food waste to renewable energy. Our non-sewer based technology enables you to dispose of all types of food waste — including kitchen fats, oils and grease — faster, cleaner and easier. Reduce odors, pests, emissions and labor costs, all while protecting the environment. So whatever doesn’t make it to the table doesn’t have to go to waste. Learn more at www.grind2energy.com

S AV I N G T H E P L A N E T … Q U I E T LY

C O N TI NU E D

Continued from p. 47

“The supply chain is where there is greater opportunity now for companies and others to have an impact,” says Dowling. “We were looking at our own four walls and spent the last few years reducing our footprint through our own initiatives. Now, we’re looking at the supply web – that complex mix of all involved – and deciding where opportunities for sustainable efforts exist.”

Doyel: “These efforts are in line with our core values for our customer and our community.”

Human trafficking in the seafood supply chain, for example, is complex and difficult to monitor, says Dowling. Specifically, where it’s happening and to whom.

Cassandra Pye, is CEO of 3.14 Communications, LLC, a regular contributor to California Grocer and a former lobbyist for CGA.

“That’s where the opportunity exists now,” he says. “There’s so much more collaboration possible that includes the industry, governments, NGOs and others. We need everyone at the table to discuss these issues because they are larger than our companies.”

Dowling: “They are good for the planet and good for our business, too.” Draeger: “We’re doing good and doing good for the business.” In all cases, customers win. n

**The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy, of Sunnyvale, California, that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used.

Doyel, Dowling and Draeger mimicked each other’s remarks on the question of why sustainability.

Tyson Foods congratulates

Rob McDougall and Donna Tyndall of Gelson’s Markets and Bruce Wyatt of Flowers Baking Co.

Rob McDougall Gelson’s Markets

Donna Tyndall Gelson’s Markets

Bruce Wyatt

Flowers Baking Co.

C A L I F OR N I A G R OC E R

on their inductions into the CGA Educational Foundation Hall of Achievement.

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By Len Lewis

The eminent British statesman Winston Churchill once said: “It’s always wise to look ahead, but difficult to look further than you can see.” Difficult as it may be, but that’s exactly what the Institute for The Future, a Palo Alto-based think tank and non-profit research organization, is doing through diverse projects ranging from global economics and generational trends to technological developments – all of which can yield interesting insights into where and how people will live, eat and shop in the decades to come.

“The Food Futures Lab is one of our longest running programs,” said Rebecca Chesney, research manager for the Lab, who also oversees the group’s 10-year forecast program. “We look at cities, food, water issues and every year, we take a different angle,” she said. “This year one of our goals is to focus on kids and how these digital natives will impact the business model we use and how to communicate with them.” Other studies have also led IFTF into areas that might be closer to impacting today’s food retailers when it comes to consumers and employees.

Furthermore, the loss of traditional benefits or reduction of the traditional 9–5 workday will start to impact what people eat at lunch, how they socialize and redefine work and school days. “For example,” she said, “Uber drivers might make most of their money at night. In this kind of fragmented workplace, we have to look at the types of foods they need, where they’re eating them and what they’re shopping for.” That means mapping food experiences – not only eating food but also packaging branding, accessing food – the entire food experience. Continued on p. 52

“Basically, the work landscape is changing and more people are becoming freelancers and moving away from the traditional jobs and locations.

The goal, according to Chesney, is to get people to think beyond next week or the next quarter when shaping their (business) strategies.

C A L I F OR N I A G R OC E R

“Our workable futures initiative is looking at the ‘gig’ or on-demand economy and how it’s going to affect things like health insurance and social safety nets,” Chesney said.

A lot of people are trying to figure out what benefit structure they’ll need in the future and how to do things differently.”

E X P L O R I N G T O M O R R O W T O D AY

BY LEN LE W IS/C ONTIN U E D

Continued from p. 51

“And access to food impacts where we get our food,” she added. “Retailers need to think about that today.“ The Institute is not only tracking the further fragmentation of retail, but the next iteration of retailing, which is likely to be a mixture of on-demand and fully-automated food delivery, the latter of which could be about 10 years away, according to Chesney. As an example, she cited Amazon’s Subscribe and Save program which offers consumers up to 15 percent savings on recurring delivery of everyday items like toilet paper, paper towels, flour and baby wipes. On another level, Amazon Dash is partnering with companies like Britta to develop a filter that can track how much water a consumer is filtering using the company’s system. “It’s tied to your Amazon account and knows how much water you’re using, when you will need filters and automatically orders them for you,” she said. “It’s a different type of online retail that changes the extent to which consumers are involved in shopping decisions.” Cheney said itt’s a new purchasing pathway that’s not been fully researched and brings up the question of how much consumers will care about brands in the future and whether they will simply tell Amazon to send them the cheapest item in any given category. However, customer involvement could increase in a different way.

C A L I F OR N I A G R OC E R

Consider a San Francisco-based company called Betabrand, a clothing designer with a platform similar to Kickstarter.

“You post an idea of what you would like then other people can build on it with their ideas to help designers refine the item.” Chesney noted. “Once an item gets enough votes it moves to a crowdfunding stage for prototype designs.” If it reaches a certain threshold and the company can guarantee a minimum market, Cheseny says, Betabrand will manufacture the item and apply the amount you donated towards the purchase of the finished item.

“This way the company can reduce space, inventory costs and risk. It’s almost the opposite of automated retail yet another online environment to watch,” she said, noting that many people are already funding food products on Kickstarter. “Even if people are not purchasing, they are involved in a community,” Chesney said. “We call it engaged shopping. They are not just consumers they are actually participating in the development of a product. Betabrands is a signal of the future. We look for those signals and that’s how we do our forecasts.” People want to be able to access whatever kind of food they want at any given time. This isn’t just a 24-hour grocery store. The idea of convenience has changed and retailers need to rethink what it really means. Another field of study for the Institute is automation and automated shopping via “Body Area Networks,” as Chesney called it. “Think about what’s becoming networked and all the different technologies that are connected,” she said. “Today it’s a smartphone or Fitbit. But people are working on clothing with sensors to detect hydration levels when you’re working out. There are skin or injectable sensors that could track biometrics and detect illnesses. All these technologies on or in our bodies will be connected to the other technology around us.” Chesney said people are focused on understanding e-commerce and online retailing, but “the thing to understand now is what information is being tracked about health and nutrition from the different fitness apps that are on the smartphone. The question is how retailers can be involved with that.” All of these things add up to the next step in data analytics. “It will be much more nuanced and will offer views into preferences and tastes for different types of consumers,” she said. n Len Lewis is editorial director of Lewis Communications, Inc., a New York-based editorial planning, research and consulting firm. He is a frequent contributor to California Grocer and several retail publications and trade groups in the U.S. and Europe.

FOUNDATION DINNER CELEBR ATES

I N DU S T RY G AT H E R S T O HONOR GRO C E RY E X E C S

MORE THAN 600 INDUSTRY PEERS, FAMILY AND FRIENDS GATHERED IN COSTA MESA, CALIF. RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT.

C A L I F OR N I A G R OC E R

This year’s inductees included Rob McDougall, President & CEO, and Donna Tyndall, Senior. Vice President of Operations, Gelson’s Markets; and Bruce Wyatt, Vice President of Sales, Flowers Foods Bakeries Group.

The Hall of Achievement was created in 1992 to recognize those individuals that have made significant contributions not only to the grocery industry, but the communities they serve. The three inductees brought the total number of Hall of Achievement recipients to 45, and was the second time executives from Gelson’s Markets were

Jim Van Gorkom, CGAEF Chair, NuCal Foods.

F O U N D AT I O N H O N O R S

CGAEF’s Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program.

recognized for their dedication to California’s grocery industry. In 2007, Gelson’s executives Bernie Briskin, Bill Roulette, Allan Scharn and Bob Stiles were inducted into the Hall of Achievement. “Rob, Donna and Bruce are true icons of our industry,” said CGAEF President Ron Fong. “Each inductee has a tremendous story to tell. Each has traveled different paths to reach this point in their distinguished careers. They are all deserving of this prestigious award.” Continued on p.56

BRUCE WYATT Vice President Sales Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company, headquartered in Thomasville, Georgia. Bruce began his retail career at a young age working in his family’s direct store delivery retail milk business in Knightstown, Ind. After moving to Apple Valley, Calif., Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies. In 1981, he went to work for Oroweat Baking Co., eventually becoming Regional Manager for Retail Sales. In 2008, he went to work for Hansen Beverage Company, Corona, Calif., as Director of Sales. Two years later, Bruce began his second career in the baking business accepting his present position with Flowers Baking Company. That same year, Bruce was elected Headlite of The Illuminators, an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry.

Abby Gillmore, CGAEF Scholarship Recipient.

Bruce and his wife, Kelli, live in San Clemente, Calif., and have two sons, Jackson and Christopher.

C A L I F OR N I A G R OC E R

“Each inductee has a tremendous story to tell. Each has traveled different paths to reach this point in their distinguished careers.” said CGAEF President Ron Fong.

Bruce is a member of the CGA Supplier Executive Council, a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest, City of Hope, Boy Scouts of America, California Conference for Equality and Justice, Muscular Dystrophy Association and Soccer for Hope Foundation.

| 55

F O U N D AT I O N H O N O R S

C O N TI NU E D

Continued from p. 55

In addition to the Hall of Achievement award, Fong presented each inductee with a special Legislative Proclamation from their local elected legislator that commended them on their achievement. In presenting the proclamations, Fong praised all three recipients for their commitment and dedication to the industry. Following his remarks, brief videos highlighting each inductee’s personal and professional accomplishments were aired.

HOA Honoree Bruce Wyatt, Flowers Baking Co., Bob Butler, retired Albertsons LLC, and Vic Chiono, The Coca-Cola Co./Minute Maid Co.

Led by event chairs Hee-Sook Nelson, Gelson’s Markets, and Jerry Whitmore, retired, Nestle DSD, the event raised more than $500,000 – funds that support the Foundation’s college scholarship and tuition reimbursement programs.

This year Abigail Gillmore, whose father is a senior category manager at Gelson’s Markets, shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher.

“The Foundation is extremely grateful to the many companies and individuals that have donated to this very worthy cause,” Fong said. “The funds raised from this event will help support the Foundation’s many worthwhile industry programs.” The annual gala event included a live auction and Fund-A-Need program that raised nearly $100,000. “The generous support of the industry was overwhelming,” said Foundation Executive Director Shiloh London. “The grocery industry has a genuine passion for helping others and that was certainly demonstrated at the dinner.”

In what has become a tradition at the dinner, a Foundation college scholarship recipient shared with attendees how receiving financial assistance played a major role in their educational plans. This year Abigail Gillmore, whose father is a senior category manager at Gelson’s Markets, shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher.

C A L I F OR N I A G R OC E R

| 56

Joe Early; Unified Grocers, Dave Frankeny; Nestle USA, Alyssa Barberio; Unilever, Mike O’Donnell, Unified Grocers.

Kevin Konkel, Raley’s; Jim Schulz, International Paper; CGAEF Trustee Jerry Landers, Raley’s.

Gillmore, a junior at California Lutheran University, originally planned to major in psychology, but “discovered that my family’s passion for teaching had rubbed off on me. I knew the best way for me to help people was to change my major to educational studies and become a teacher like my granddad.” Continued on p.59

Thank you

fresh ideas and commitment to education for your

Congratulations!

Rob McDougall & Donna Tyndall Gelsonâ&#x20AC;&#x2122;s Markets and Bruce Wyatt Flowers Baking Company for your induction in the California Grocers Association Educational Hall of Achievement

from your friends at

F O U N D AT I O N H O N O R S

Continued from p. 56

DONNA TYNDALL Senior Vice President of Store Operations Gelson’s Markets

Leah McDougall, Rob McDougall, Hee-Sook Nelson, Donna Tyndall, Mark Motsenbocker.

She has been awarded Foundation scholarships the past three years, and now her younger sister is also a scholarship recipient. “None of this would have been possible without the Educational Foundation’s support,” she said. In addition to the Hall of Achievement Award presentation, retiring CGAEF Board of Trustee George Frahm, Stater Bros. Markets, was recognized for his more than 10 years of service to the Foundation. Continued on p.60

“None of this would have been possible without the Educational Foundation’s support,” Abigail Gillmore said.

Donna began her career with Gelson’s Markets 41 years ago as a clerk’s helper at the first Gelson’s location in Burbank. While attending UCLA, she continued to work in a variety of positions including checker, clerk, and office cashier. After graduating from UCLA, she entered management as the company’s first female manager. She worked her way up to Store Manager and was later promoted to Supervisor of Operations. After three years in store supervision, Donna assumed the position of Director of Grocery Buying and Merchandising, and was promoted to Vice President in 1998. Her responsibilities then included Grocery Buying, Merchandising, Distribution, and Marketing. Six years later she was promoted to Senior Vice President of Store Operations, and served in that position since 2004. Donna has a bachelor’s degree from UCLA, and in 1989, graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the “Student of the Year.” In 2007, she was recognized by Progressive Grocer as one of the “Top Women in Grocery” in the United States, and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual “Women in the Industry” luncheon.

Kristen Soler, Pepsi Beverages Company, and Paul Turcotte, CGAEF Trustee, Pepsi Beverages Company.

Donna is married to Mike Ketcham. They reside in Sherman Oaks with their two dogs, and together enjoy golfing, traveling, gardening and reading.

C A L I F OR N I A G R OC E R

Donna is involved in a wide variety of grocery industry causes. She served on the CGA Board of Directors for six years from 2006 through 2012. She supports several charitable organizations including the City of Hope Food Industries Circle, the Muscular Dystrophy Association (MDA), Olive Crest, and the California Conference for Equality and Justice (CCEJ). In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ.

F O U N D AT I O N H O N O R S

C O N TI NU E D

Continued from p. 59

ROB MCDOUGALL President & CEO Gelson’s Markets

Rob has been in the grocery industry for more than 40 years. In January 2012, he assumed leadership of Gelson’s Markets, a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service. A Southern California native, Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager, Store Director and Produce Supervisor. Rob later moved to Michigan to work for D&W, a small upscale chain of markets. He left D&W as its Chief Operating Officer to return to his Southern California roots. Rob joined Gelson’s Markets in 2007 and quickly leveraged his previous experience to steer Gelson’s to a greater inclusion of organic and local products. While broadening his responsibilities, Rob has overseen key initiatives such as new designs for Gelson’s produce departments, a move into enhanced gluten free itemization, increased private label products, expanded selection of organics, and an investment in healthy selections.

Marco Robles, Cardenas Markets, and wife Rosa.

“For over 10 years, George was an integral part of the Foundation’s Board of Trustees,” said outgoing CGAEF Chair Jim Van Gorkom, NuCal Foods. “George brought a wealth of knowledge, experience, innovative ideas and strategic thinking to the Foundation, and perhaps most valuable, his tireless efforts to increase the visibility and credibility of the Foundation within the grocery industry.” The Foundation was created under the direction of the California Grocers Association Board of Directors in 1992 . Its mission is to provide financial assistance to advance the educational goals of CGA member company employees and their dependents and offer educational programs to advance the grocery industry. n

C A L I F OR N I A G R OC E R

Rob serves on both the Unified Grocers, Inc. and Western Association of Food Chains (WAFC) Board of Directors. He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association.

Rob has been married to his wife Leah for 37 years and has twin adult sons, Shaun and Robert. Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months. In his off time Rob’s passion is to spend time with his family.

Renee Amen, Super A Foods, Peachetta Reid and John Najjar, Cardiff Seaside Markets, Lou & Dorie Amen, Super A Foods.

We’re making a difference

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while addressing hunger in America.

475,491+ tons* Diverted from landfill

How we do it

228,540 tons CARDBOARD

8,198 tons PLASTIC BAGS

134,494 tons MISC RECYCLING

Our backhaul process picks up reusable trays and recyclables at the point of product delivery. Recyclables are collected and sent to the appropriate recycler, composter, or farmer for reuse, resulting in: • Reduced GHG emissions • Over 71.8 million pounds of food donated • Fewer trucks on the road • 475,491 tons of recycled materials diverted from landfill (2014)

SWYDCORPIV57868_CGA_AdIssues_2016_V1_03/2016

31 tons ALUMINIUM

84,655 tons COMPOST

19,573 tons ANIMAL FEED

Food donated

71.8 million lbs IN CALIFORNIA ALONE!

Reducing food waste is the right thing to do for our communities, our customers, the environment, and for California.

*of waste kept out of landfills as of 2014 from Safeway stores alone

C A L I F OR N I A G R OC E R

15 MIN UT ES WIT H…

15 MINUTES WITH…

Corby Kummer

B Y L E N L EWI S

Corby Kummer is an acclaimed food journalist, whose books and columns in The Atlantic, Boston magazine and the New Republic have become must-reads for foodies, amateur and professional chefs. Kummer, who isn’t shy about sharing his views on what’s being sold and how, spoke with California Grocer about a few of his favorite issues. California Grocer: The industry seems to have a love affair with anything tagged local. What do consumers really think? Kummer: “It’s more important than ever even though consumers don’t really know what it means. Everyone has their own definition of how many miles around the store or restaurant it should come from. Tut they like the idea of helping local economies. It’s the main reason I care about it.” Is there a mileage number? “Some people say 40 miles some say 100. It depends on where the settlements are around you. You’re helping keep a place that’s not very far from your home thriving.” What about environmental issues? “I’m not entirely convinced buying local is better for the environment. It can use more resources than big farms that offer more economies of scale. And shipping in huge trucks consumes much less energy per unit to get to a store or restaurant.”

Are they asking questions? “No, they just take their word for it.” Who’s driving local food trends? “I think it’s Millennials. It starts with concerns about their own health and that of their families. Then, it’s about how much money they’re spending on food and then it’s about incorporating social ideals.” What’s considered healthy food? Will the argument over GMOs continue? “I think the GMO argument will go away regardless of the demographic group. Lower income people are equally concerned with health and fresh products. They may not have access to it and lack time to make it but they are aware and concerned.” What do you see coming in new food trends? “A lot of it was what I saw at the recent Fancy Food Show – Paleo diets, higher fat meats. There’s much less fear of fat today so people are returning to meat.

Is local overrated considering availability of fresh products from around the world these days? “Undefined but not overrated. But I think that people are asking how companies treat their employees and put a premium on hiring people from the

I get the impression that ‘local’ has just become a marketing and advertising buzzword? “I think that’s absolutely true. People have to make up their own minds by going to their stores and asking questions. It’s up to consumers to enforce the definition.”

C A L I F OR N I A G R OC E R

The whole Chipotle E.coli contamination has put a spotlight on safety of local products. “That’s complicated. Organic and local doesn’t mean safer. Unfortunately, that’s part of the lesson learned from Chipotle. It generally means it’s better for the people who raise your food. That’s what I think consumers should be focused on.”

community. That’s what it means to me. It’s about making sure people are able to live comfortably in a community that’s supported by community services. It’s about farms, small businesses, or artisan producers creating jobs locally rather than seeing everything move to cities or big packing centers.”

Continued on p. 66

15 MINUTES WITH…

Continued from p. 65

Gluten-free is still roaring along and I don’t see a reduction. But I saw organic leveling out and not as much product with whole grains as two years ago.”

Natural and organic is price of entry in retailing these days. Yes. But organic what? As a food writer do you think consumers are interested in getting back in the kitchen and doing more prep? “No, I don’t think they are. It’s just wishful thinking on our part. It’s not that this generation doesn’t want to return to home cooking, there’s just a certain fear of it. There’s always the excuse there’s no time, and buzzwords like local are often proxies or excuses for not making food for your family.”

C A L I F OR N I A G R OC E R

Anything retailers can do to get people back in kitchen? “I think there should be more chopped, fresh vegetables. Also, cooking classes at supermarkets,

and community centers would help, as well as demos in stores if retailers are willing to make the investment. These ideas have been around a long time. Generally, what gets people to cook again is when they realize they can save money by doing it themselves.”

What do you think about home delivered meal kits? “I did a recent column on that in the New Republic. I asked why anyone would ‘pay a premium for a large box filled with ice packs and little baggies and tiny shampoo-sized bottles whose contents will produce a few meals and a lot to recycle.’ Clearly, they are competing with supermarkets. I’ve tried a variety of meals from four different companies and what they had in common was a lot of packaging. It has its advantages, but I wouldn’t buy another meal kit.” n

Berry Impressive...

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award Recipients... ROB MCDOUGALL & DONNA TYNDALL (Gelson’s Markets) & BRUCE WYATT (Flowers Baking Company) myfood4less.com

ranchosanmiguelmarkets.com

Congratulations

ADVE RTIS E R INDE X C A L I F OR N I A G R OC E R

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PAGE

COMPANY

PHONE

FAX

Albertsons Companies, Inc.

925-467-3000

925-467-3323

Bimbo Bakeries USA

714-319-0517

C & H Sugar/ASR Group

510-787-4416

C&S Wholesale Grocers, Inc.

IBC

WEBSITE

www.albertsons.com wcrocker@bbumail.com

www.bimbobakeriesusa.com

510-787-4205

kent.kunsman@asr-group.com

www.chsugar.com

916-373-4286

916-373-4296

epearlma@cswg.com

www.cswg.com

Certified Federal Credit Union

909-261-4065

626-246-3111

ghurd@vonscu.com

www.vonsefcu.org

Coca-Cola Refreshments

213-746-5555

213-744-8765

mikanderson@coca-cola.com

www.cokecce.com

Emerson Grind2Energy

216-200-9439

heather.dougherty@emerson.com

www.grind2energy.com

Food 4 Less (Stockton)/ Rancho San Miguel Markets

209-957-4917

209-956-8550

Fresno Food Expo

559-227-9999

559-221-4376

Gelson’s Markets

818-906-5709

818-990-7877

Harris Ranch Beef Company

559-896-3081

559-896-3095

brad.caudill@harrisranch.com

www.harrisranchbeef.com

Hidden Villa Ranch

800-326-3220

714-680-3080

bkelly@hiddenvilla.com

www.hiddenvilla.com

Horizon Sales

714-979-4844

714-979-4955

horizon@horizonsalescorp.com

www.horizonsalescorp.com

Illuminators

925-973-6183

jfrench@co-salesnc.com

www.illuminators.org

International Dairy Deli Bakery Association

608-310-5000

608-238-6330

iddba@iddba.org

www.iddba.org

Melissa’s/World Variety Produce, Inc.

323-588-0151

323-584-7385

hotline@melissas.com

www.melissas.com

METTLER TOLEDO

614-438-4511

614-438-4900

USRetail@mt.com

www.mt.com/retail

MillerCoors

614-378-5538

jessica.owens@millercoors.com

www.millercoors.com

Milton’s Baking Company

858-350-9696

ddimond@miltonsbaking.com

www.miltonsbaking.com

Moss Adams LLP

stephen.redmond@mossadams.com/ jeff.clair@mossadams.com

www.mossadams.com

Nestle Purina PetCare

paul.cooke@nestle.purina.com

www.purina.com

NuCal Foods

209-254-2200

209-254-2255

Oberto Brands

925-786-9722

916-740-2947

rich.arnold@oberto.com

www.oberto.com

PepsiCo Inc.

949-330-5804

949-643-5765

douglas.todd@pepsico.com

www.pepsico.com

Raley’s

916-373-3333

916-444-3733

www.raleys.com

Retail Marketing Services, Inc.

800-252-4613/ 818-563-3031

818-563-3041

www.cartretrieval.net

Smart & Final Stores

323-869-7500

323-869-7862

www.smartandfinal.com

Southern Wine & Spirits

562-623-2677

562-407-3815

franksantangelo@southernwine.com

www.southernwine.com

TruGrocer Federal Credit Union

208-385-5273

208-385-5290

cdemaray@trugrocer.com

www.trugrocer.com

Tyson Foods, Inc.

480-949-6700

480-948-0755

robert.bukovec@tyson.com

www.tysonfoods.com

Unified Grocers, Inc.

323-264-5200

323-729-6619

customercare@unifiedgrocers.com

www.unifiedgrocers.com

V&V Supremo Foods, Inc.

909-297-9937

pjacobo@vvsupremo.com

www.vvsupremo.com

Zenith Insurance Company

818-713-1000

jlindsay@thezenith.com

www.thezenith.com

916-503-8206/ 818-577-1845 800-421-1721 x9/ 314-982-4876

858-350-9695

314-982-2860

818-710-1860

www.myfood4less.com info@fresnofoodexpo.com

www.fresnofoodexpo.com www.gelsons.com

www.nucalfoods.com

Not Your Everyday Dishes

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