37 minute read
Washington Report
Our Independent Grocer Wishlist for President Biden
GREG FERRARA
PRESIDENT AND CEO NATIONAL GROCERS ASSOCIATION
NGA is focused on advocating for a number of Covid-19-related policies that would help lift independent grocers and its essential workforce.
With a new Congress and presidential administration, 2021 presents new opportunities for NGA to advocate on behalf of independent grocers throughout the country, ensuring their priorities are heard on both sides of the political aisle. In January, Joe Biden was sworn in as the 46th President of the United States, beginning his administration by signing several executive orders aimed at addressing the Covid-19 pandemic, including increasing vaccine rollout and implementing mask mandates on federal properties. However, an aid package must go through Congress, with Senate Republicans key to agreement. Both Democrat and Republican bills include funding for a range of Covid-19related priorities, but the GOP proposal is narrower in scope and provides less in the way of unemployment insurance and direct stimulus payments. Congress last passed a Covid-19 relief package in December, with several provisions positive for independent grocers, including the Paycheck Protection Program (PPP), simplified forgiveness options, extensions of the New Market Tax Credit and the Work Opportunity Tax Credit, and funding for vaccine development and distribution to frontline workers.
The package also included key nutrition victories, such as increased funding to help independent grocers enroll in the SNAP Online purchasing program, as well as an additional $75 million to bolster the Gus Schumacher Nutrition Incentive Program. These programs are essential for independent grocers and NGA will continue working with the Biden Administration and Congress to ensure they are strengthened in the coming months. Unfortunately, the bill didn’t include liability protections for essential businesses, which is essential for grocers potentially facing frivolous lawsuits. NGA implored Congress to protect grocers – deemed as essential businesses during the pandemic – taking reasonable steps to comply with requirements issued by CDC and other health authorities.
In February, NGA joined the US Chamber by signing on to a letter urging Congress to include targeted and temporary liability protections for essential businesses. With over 580 signers, the letter points out that as the Biden Administration strives to reopen schools, protect our nation’s health and strengthen our economy, liability protections will help safeguard educational institutions, healthcare providers, businesses and non-profit organizations from unfair lawsuits. NGA will continue advocating on behalf of independent grocers for liability protections. NGA members have been on the frontlines serving communities since the beginning of the pandemic and should be protected from unfair lawsuits.
On the first day of President Biden’s inauguration, NGA sent a letter outlining key priority issues for the independent supermarket industry, including liability protections, tax relief for frontline workers, and less regulation and taxes. NGA members operate on slim 1 to 2 percent profit margins in a competitive industry and often serve disadvantaged areas. Any increase in costs could force them to hire fewer workers or close their business.
In the letter, NGA also highlighted how independent grocers are going above and beyond during the pandemic to reward their essential employees for their hard work and dedication.
A recent NGA/FMS Solutions study shows more than 85 percent of independent grocers are paying associates above their current hourly rates and salaries, including an additional $2 per hour hero (hazard) pay, gift card bonuses, lump sum bonuses, and other benefits. However, NGA believes frontline workers deserve temporary income and payroll tax relief.
Additionally, an executive order signed by President Biden on day two of his presidency is leading OSHA to quickly revamp workplace safety regulations to better address the spread of Covid-19. OSHA has until mid-March to consider an Emergency Temporary Standard which would impose new enforceable workplace safety regulations on employers and likely create significant new obligations on grocers nationwide. NGA is concerned that OSHA will draft a rule without considering stakeholder input in a rushed and expedited fashion that could impose greater regulatory burdens and lead to unintended consequences. NGA sent a letter to OSHA, the White House, and Committee leaders in Congress calling on OSHA to instead pursue a formal notice-and-comment rulemaking process so that regulated industries can provide input on any new workplace safety proposals before they are finalized. After nearly a year on the frontlines of the crisis, independent grocers have been at the tip of the spear in adopting and implementing safe public health practices in a food retail environment. NGA believes OSHA and the public would be better served
if the agency pursues a meaningful dialogue with our industry rather than rushing through burdensome regulations that could harm grocers, their employees, and their customers.
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With the help of our members, NGA will continue working with Congress and the White House to gain support for relief and assistance that makes it easier for independent grocers to fulfil their mission during the Covid-19 pandemic. As an industry employing nearly a million workers on the frontlines of the pandemic, it’s important for Congress to hear from you. For more information on these issues and how you can make your voice heard in Washington, DC, visit www.grocerstakeaction.org. ■
What’s Poppin’:
Pop Up Grocer in NYC. Photo by Heidis Bridge
the retailer Small in Size, Big in Clout
By Trish Moratto
In 2021, consumers are numbing their thumbs scrolling through Instagram. In the process, they are constantly bombarded with strategically targeted ads for custom-advertised products. Last year, shoppers added goods to their carts to balance their macros, soothe with CBD and plump with collagen packets. This year, direct-to-consumer grocery shopping is gaining ground, bringing the missing in-person element to the coveted emerging goods category.
For early-stage brands, finding the right venue to reach customers is valuable. That’s where Pop Up Grocer comes in. The company curates a small assortment of emerging goods and sells them for a limited duration of time. The goal is discovery – to connect the up-and-coming product with the curious shopper. From apple cider vinegar gummies and kelp jerky to plant-based lamb, Pop Up Grocer is connecting the dots between brands and adventurous consumers. And not just any consumers: the early adopters – those searching for the new and next best thing, be it for their professional education or their culinary passion. Emily Schildt is the founder and CEO at Pop Up Grocer. Before launching this direct-to-consumer concept (which she describes as a fusion of tradeshow, grocery store and museum), Schildt enjoyed a career as a brand marketing consultant. The work of launching new products to market helped her identify an industry void. “From an aesthetic perspective, launching into traditional retail can be pretty lackluster,” says Schildt. Her goal? To create an experience where “invested individuals” like shoppers, influencers, venture capitalists and buyers can discover and explore new products. Pop Up Grocer was born from the desire to create that ideal physical environment.
upending the traditional model
Pop Up Grocer started as an experiment. The initial idea quickly caught fire and morphed into a shop featuring 350 products. The pop-up market runs for 30 days in trendy locations, such as Venice, Austin and New York.
Between abundant media coverage and social media attention, Schildt quickly realized she had found an untapped opportunity. This spring the sixth Pop Up Grocer will open in Chicago. The Pop Up Grocer model completely bypasses distributors. Brands approximate the inventory necessary for 30 days and ship directly to the pop-up location. Products are then sold on consignment, and brands can opt for their excess inventory to be shipped back or donated to local food banks. Pop Up Grocer charges a 20 percent showcase fee, and the brand is paid for 80 percent of the sale. Brands set their own retail prices.
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Pop Up Grocer in NYC. Photo by Heidis Bridge
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Comparatively, in a traditional retail model, the brands would pay a host of fees to retailers, including slotting fees, broker fees and marketing fees. Plus, brands would also endure additional costs from the intermediaries, costs they can forgo with the Pop Up Grocer model. “We provide an efficient and direct path to market for modern brands,” says Schildt. “For smaller companies, it can be challenging and costly to get shelf space. Pop Up Grocer provides exposure to thousands of consumers, members of the media, buyers and influences. Getting a modern brand’s products in front of those meaningful individuals is critical.”
This type of direct-to-consumer model is not revolutionary, but it has gained traction in recent years with breakout retailers like Beta, Showfield, Naked Retail and Neighborhood Goods. Schildt says she hasn’t seen any direct competition yet in the grocery space, but recognizes the model is growing across industries. In the model, brands are charged for only a fraction of the overall square footage compared to having a full-sized store and participate in what amounts to a revenue-sharing model. With this structure, Pop Up Grocer falls in the center of the Venn diagram between e-commerce and traditional brick-andmortar retail. The company entices customers with cache food, beverage, home, pet, and body care products that aren’t widely available in the market. And the allure of the newest trend excites consumers.
“We also offer factors missing from the e-commerce experience,” says Schildt. “Once on-site, shoppers have the education, humanity and interactions that are missing from online-only retailers.”
take a look
Although many brands solicit Pop Up Grocer for a spot on its shelves, the company is committed to only curating items that meet three criteria.
1.Is the product interesting, innovative and creative? Is the brand introducing something different, novel and intriguing? Is the brand sustainable? 2.For food products, how high-quality are the ingredients? Is the company using responsible sourcing?
Pop Up Grocer in NYC. Photo by Heidis Bridge
3.How eye-catching is the packaging?
Pop Up Grocer believes people shop with their eyes, so the appearance needs to captivate.
The goal of having these criteria in place is simple: to enhance the relationship with the items shoppers can discover. Most brands Pop Up Grocer selects come from brand partners and community referrals. Even with referrals, adhering to the three criteria and running a new business during the era of the coronavirus has not been without challenges. “We had to adjust timing. All our in-store operations were masked, and we developed sanitation practices and limited the store’s occupancy to six to eight guests at a time,” says Schildt. Attending events has generally come to a halt in pandemic-times, so this grocerymeets-event provides an experience that brings joy and excitement to shoppers in a safe and exciting way. And it’s doing so at a time when shopping and eating habits are changing in response to the pandemic.
With less time lost to commutes, shoppers are cooking at home and have more time to dedicate to meal preparation. Those combined factors have translated into traffic for Pop Up Grocer, consistent with pre-Covid-19 times as grocery stores haven’t experienced closures. For that, Schildt says, she is grateful.
high praise
One of the emerging brands that is partnering with Pop Up Grocer to stock pop-up shelves is Gossamer, which describes itself as a company “for people who also smoke weed.” In 2016, Gossamer launched as a lifestyle magazine that covers travel, design, art, culture and food – all through a green lens. The graphic design, photo essays and product recommendations offer an approach to cannabis that is unique – and arguably more sophisticated – in an industry that has come into bloom in recent years. Gossamer sells edible CBD treats that taste as good as they look and a duo of nighttime and morning CBD tinctures. Those tinctures, “Dusk” and “Dawn,” are representative of products that fit naturally with the Pop Up Grocer model. The packaging is eye-catching and modern, and the products also ultimately fill a unique niche since the market is not saturated with CBD Turkish delights or morning CBD that pairs well with coffee. Gossamer has been on the shelf at Pop Up Grocer since its first location in Brooklyn, New York. The two organizations worked together for the CBD X Gossamer collection. The relationship is symbiotic. Gossamer brings credibility to the curation at Pop Up Grocer with a deep understanding of testing, quality, ingredients, efficacy and approvals. “There are murky and disingenuous brands out there on the market,” said Verena von Pfetten, co-founder of Gossamer. “Often cannabis products are marketed by how to get the highest for the cheapest. That’s a total disconnect from the community we serve and our relationship with the plant. We insist on third-party testing to ensure all the claims on the package match the results.”
von Pfetten says a goal with Gossamer is to destigmatize cannabis use by putting the product alongside items consumers are comfortable with. Customers find the CBD products adjacent to cheese made from sunflowers and upcycled carrots.
With Pop Up Grocer, Gossamer customers also have engagement with staff, which can really educate shoppers, especially with costs running around $65 for a one-ounce bottle of product.The product recommendations and usage tips from an evangelist can help convert the sale, which is a dynamic that Pop Up Grocer provides that traditional online or brick-and-mortar sales can’t always offer.
Pop Up Grocer in Los Angeles. Photo by Anna Beeke
Pop Up Grocer in Los Angeles. Photo by Anna Beeke
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the experience economy
Pop Up Grocer is also a natural fit as the economy becomes more experience-driven. “This model is something we need to rediscover with food, in this digicentric world,” says entrepreneur Will Rosenzweig. “So much about food is our live interaction with individual products.” Rosenzweig has a lifetime of experience watching brands launch into the marketplace. As an entrepreneur, investor and advisor to entrepreneurs through his work at the Haas School of Business at the University of California, Berkey, Rosenzweig can identify a good idea when he sees one. For him, the concept of Pop Up Grocer harkens back to when he was the founder and first CEO of The Republic of Tea. To make impressions on consumers, he would stand in front of grocery stores and Macy’s serving tea. “Especially for the early part of a product launch, the Pop Up Grocer concept may provide a new path to consumer exposure that doesn’t necessarily exist otherwise,” says Rosenzweig. “People are often so busy that they aren’t going into the grocery store and really spending time reading about the products.” Pop Up Grocer is helping bridge shoppers from a digital realm into an in-person experiential realm. Indeed, the model creates the potential for consumers to be so excited about the in-store experience that they then go back online to share about it. According to Rosenzweig, Pop Up Grocer also bypasses the very real vulnerabilities many small brands faced in 2020 and into 2021, with their reliance on co-packers. There has been such a proliferation of small direct-to-consumer companies that have small runs and face abundant challenges in scaling up and meeting demand. The pop-up model inherently avoids the fall out of this problem, avoiding the empty shelves seen at large retailers when enough inventory can’t be secured.
Schildt herself recognizes that Pop Up Grocer does not offer space for long-term sales in a reliable way. Rosenzweig also explores questions about the long-term strategy for Pop Up Grocer: How far will people actually drive to visit? It’s an unusual time given Covid-19 and various workers’ issues. Is the initial success sustainable? How will Pop Up Grocer produce a long-term competitive advantage? If the model gains ground, how will large retailers respond? He does, however, nod to the concept as being inherently fun, “like theater.”
The question Rosenzweig poses about how retailers could respond will be tied into the bandwidth large corporate retailers have to be proactive. “So many business choices in 2020 were reactively made in order to handle the pandemic,” he says. “It’s wonderful that Pop Up Grocer is off to the races,” says Rosenzweig. “But remember, it takes 15 years to become an overnight success.” ■
To us, local means
California
We’re proud to offer more of what Californians are looking for – from locally grown produce to California-raised USDA choice meat. Long before local was cool, our family of stores made it a priority to buy direct from local growers. In fact, some of our current relationships with farmers started over 60 years ago. We’re working hard to be The Golden State’s favorite grocer. And we’re proud to employ more than 76,000 hard-working, talented Californians in our stores and other facilities..
To us local means… fresher | be er | California
Christopher Vega on Unsplash
By Nate Rose
At the end of November, Rachel Wagoner was appointed by Gov. Gavin Newson to tackle some of California’s most complicated environmental policy issues.
Can you outline your political experience for us and how you came to lead CalRecycle?
“I have worked in and around the Capitol for more than 20 years. Previous to being appointed director, I had the honor and privilege to work for Governor Newsom as part of his legislative unit working on issues related to environmental quality, energy, natural resource protection, and agriculture. “Prior to that, I spent a decade working for the California State Senate in its Environmental Quality Committee. I was the chief consultant to that committee. So really, I have dedicated my career to environmental quality, and it is the true passion of my career – helping solve California’s environmental problems through creative problem solving and unique solutions that engage all Californians. “I’ve had the incredible honor to work on so many important issues. But at the end of last year, I was talking to Governor Newsom and (how) building a foundation for a circular economy for California is really important to him. He asked me to take on this job of building out a circular economy for the state.”
How did you arrive at this passion for environmental policy?
“I was a fellow in Governor Gray Davis’s office in 1998 and worked in his legislative unit. I was working for his legislative secretary, who asked me to work on legislation related to building schools on formerly-contaminated land. There was a huge site in Los Angeles where a very large school complex had been built. It was very controversial at the time.
“Ultimately, it ended up not being able to be used because it was built on a former oil field. So legislatures and the administration was interested in making sure we had statutory assurances to make sure we didn’t ever build schools on contaminated property again. “Rick Simpson, who was the Governor’s legislative secretary at the time, said, ‘Here go work on this,’ and I said ‘Okay, I don’t have any idea what I’m doing.’ But it was fantastic, and I became really impassioned about the intersection between what we do in and to the environment and how that intersects in everyday life. “If you think about how the environment intersects every day in your life through the air you breathe, the water you drink, ultimately the garbage or waste or trash we are throwing away, or hopefully not throwing away, we interact with our environment each and every day. That’s really what sparked my passion.”
Because your past experience is on the legislative side, rather than regulatory, do you bring something new to CalRecycle in terms of your policymaking mentality?
“That’s such a good question. I really hope and think that I do. Having worked in the Legislature with the members that are currently there, and the members prior to them, I feel I can speak to what they are intending to do around public policy and what they would like us to accomplish. I think I help bring that perspective into the regulatory world. “I am so excited for the opportunity to implement some of these programs I was able to help craft the statute around and was there as a committee consultant or staff working through the legislation – I now get the incredible privilege of helping to implement that and bring it to fruition.
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“I think of things like the SB 1383 statute.* The regulations were just adopted prior to my arrival here at CalRecycle. I get the incredible honor to help this department implement those. “And so as we go, and as we are working with jurisdictions to implement those regulations, I can say, ‘instead of my conversations with Senator Lara, or in my conversations with Senator Wieckowski or my conversation with Senator Hill – this is what we were talking about.
“So I think I bring some of that legislative perspective to that conversation, and then I get to help make it real.”
Earlier you mentioned the circular economy. What is the circular economy and how do you think about it in terms of policymaking?
“When we think about the circular economy, at the simplest level, a manufacturer manufactures a consumer good that you then buy and you use. When you are done with whatever that thing is, whether it’s a bottle that you use once or a toothbrush you use many times, or even your clothing and your textiles; when you are done with whatever that system is, what happens to it next? “What we’re trying to build here in California is the idea that this isn’t linear. It doesn’t just go into a trash can that goes to die in a landfill and breakdown and produce methane and other contaminants. What we are thinking about is how do we build a system where the manufacturer, at the very beginning of the life of this item, is thinking about how do we give it a next life and a life after that. So there is a continuous circle for that water bottle, or that pair of jeans. How do we design what we are using to have an infinite life so that we actually get out of the landfill business?”
Do you have a 90-day plan or a list of priorities you are targeting for your first year as director?
“I have a 2021 priority list that I built with my executive staff at CalRecycle. One, is to start building that foundation for the circular economy. Within that is included modernizing the beverage container, so the ‘Bottle Bill’ program. Stabilizing that program and making it as successful as possible. “The second piece of that plan is full implementation of SB 1383 by Senator Lara which is the organics bill, and launching that in the most successful way possible to meet its goals. “Third, would be stabilizing the recycling program so that we can meet the targets that exist in statute for the bottle bill for organics, and all our other recyclables. I think it sets the foundation we’re looking for in the circular economy and saying, ‘look these are the kinds of programs we can build and we can do more of this.’”
How would you characterize the current state of the bottle bill?
“There’s always room for improvement right? There’s work we can do across the board. I think Californians are legs above much of the rest of the country in our understanding of the need to recycle and our commitment to doing that.
*SB 1383 requires a 50 percent reduction in organic waste disposal from 2014 levels by 2020, and a 75 percent reduction by 2025 – essentially requiring the diversion of up to 27 million tons of organic waste – to reduce greenhouse gas (GHG) emissions. In addition, SB 1383 requires that not less than 20 percent of edible food that is currently disposed be recovered for human consumption by 2025.
“The beverage container program is actually very successful in the context of what we get that is recyclable and is being recycled. 71 percent of the beverage containers were recycled last year from the beverage container program. So the high number of clean feedstock that we get out of that program is really good. But it is a little bit of a clunky program. “It was created in 1986, and it doesn’t serve all of our consumers to the best of its ability. So I do think the government could do more, that we could do more, to modernize the program to make it more accessible to consumer, easier to access and really truly function better. I know there’s great legislative interest in doing that, and I look forward to working with them to do that.”
It seems like a lot of people point to China refusing to take back some of our recyclables as a wake-up call in terms of how people think about recycling?
“When (Project) National Sword happened a couple of years ago, and China decided it was no longer taking a lot of our feedstock, it really did call into question whether or not our system worked and whether we understood what was happening with our recycling system. It called into question whether we were doing the best we could do. “That’s why when I talk to the secretary of Cal EPA, or the Governor, and I would talk about this issue, we would say we need to build the missing links of the economy here in California for the people of California. We need to be working with California manufacturers to build products that are easily recyclable here in the state of Californian and easily manufacture red into their next life.
“That is the role that government can play in helping set up that system so that consumers can feel confident when they are putting things in the blue bin that it is truly being recycled and going into its next life.” Current Beverage Container Recycling Program Pilot Projects
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AB 54 (Ting, Chapter 793, Statutes of 2019) approved the expenditure of up to $5,000,000 to support up to 5 pilot projects approved by CalRecycle under SB 458 (Wiener, Chapter 648 Statutes of 2017). CalRecycle currently has 5 approved pilot projects in the jurisdictions of:
San Francisco
San Francisco’s pilot project combines a traditional recycling center site with a bag-drop collection program that will use collection bins at various locations throughout the city. Consumers will be able to locate collection bins using their mobile phone, drop their tagged bag of empty beverage containers in the bin, and receive electronic payment for their materials after the material is processed.
Culver City
Culver City’s pilot project features a mobile redemption center that will rotate between two selected locations six days a week for a total of 43 hours. The city and pilot project recycler may add additional locations in the future.
San Mateo County
San Mateo County’s pilot project was designed to overcome local challenges like high real estate costs, limited parking, and neighborhood opposition to new CRV take-back sites. The project will establish three additional fixed CRV take-back operations at nontraditional community locations. Each site will include a 20-foot metal shipping container to store equipment and materials.
Irvine
Irvine’s pilot program was designed to help overcome local code restrictions that limit new take-back sites in the city. Customers can place empty containers into a marked bag, schedule a residential pickup (by phone or online), and receive payment via mailed check, PayPal, Venmo, Zelle Pay, debit, or charitable donation after the material is processed.
Sonoma County – Cities of Santa Rosa, Petaluma, Sonoma, Sebastopol, Healdsburg, and Cloverdale Sonoma County’s pilot project was designed by a coalition of six cities with diverse regional needs. It establishes 10 new bag drop locations in the cities that allow consumers to drop off tagged bags of material and receive CRV payments electronically after the material is processed.
Governor Gavin Newsom’s proposed budget (released on Jan. 8, 2021) includes an additional $10 million for the Pilot Program and authority for CalRecycle to approve an additional 5 pilot projects. ✓CalRecycle requested $5,000,000 in fiscal year 2020–21 and $5,000,000 in fiscal year 2021–22 from the Beverage Container Recycling Fund to augment the Beverage Container Recycling Pilot Project Program. ✓The proposal also proposes statutory changes such as authorizing an additional 5 pilot projects and extending the program sunset date to
December 31, 2025. ✓The Beverage Container Recycling Pilot Project Program provides grants to jurisdictions to expand consumer convenience to recycle beverage containers in rural areas and areas underserved by recycling centers.
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When you think about your policymaking style, are you an incrementalist or do you like to take big swings?
“I am not an incrementalist unless it’s necessary. I think when you talk about policy questions or legislative questions you ask yourself what are you solving for and you set out on the best path for solving that problem. Sometimes that’s an incremental path, but I’m always in support of getting to a solution to a problem as quickly as possible.”
What do you think the appetite is for a fix to the Bottle Bill?
“The long and short of it is all the stakeholders need to come to the table with a willingness to come up with a solution. The complexity of the Bottle Bill is that everybody needs to give something in order to fix the system. “At the end of the day, it has been limping along for a number of years now, and it can’t sustain the current system. It’s really, in my mind, a question of when do the stakeholders come to the table with a willingness to fix it and how broken does it have to be. “I think for the Legislature, it’s as broken as they want it to get. I say that as a former legislative staffer and having had conversations with them in my previous position.
“You know Senator Wieckowski has legislation on it this year. It comes up every year during the budget conversations. Even though this program is successful it cannot sustain itself under its current structure.
“And so it becomes a question, in my mind, as to whether the Legislature, with their stakeholders and their constituents – whether they want to fix the program as it is or build something new and what does modernization look like. There are camps in both schools of thought, and I really just offer myself as a resource to help them build whichever direction they want to go.”
How closely have you followed the recycling pilot projects happening across the state?
“I’m really excited about the pilot projects. Those were funded in the 2018–19 budget, and the funding was fully allocated to five separate pilot projects around the state. They all now have received their funding, and they’re all now getting up in running. “I think Culver City is the one that has opened its doors to stores. They’re all trying different things. San Francisco is looking to site some reverse vending machines. We have mobile redemption centers in Culver City, and I believe also in San Francisco. San Mateo is adding three CRV-takeback locations. Up in Sonoma County they are doing a consumer bag and tag CRV material drop off. “It’s really interesting how we are testing different types of systems to see if we can provide greater consumer access to this system. The Governor’s current budget contains five more pilot “Sometimes that’s an projects and actually seeks incremental path, but to fund those in the current budget year, so mid-year, and I’m always in support of add an additional chunk of getting to a solution money for the budget year so we can actually expand this. to a problem as “I think there’s a really quickly as possible.” exciting opportunity to explore ways that we can tailor solutions to bottle bill challenges in different regions of the state by testing some of these other technologies.”
So it’s not just a moonshot? These programs have the potential to scale.
“Oh absolutely, and I think it will advise future changes to this program. I think it absolutely has that potential.
Jonathan Chng on Unsplash
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“It’s interesting, I’ve had conversations with very large jurisdictions that are testing this out and some rural jurisdictions that are very interested in being involved with future pilot projects. Because as is illustrated in our current situation, every area of the state is kind of having different types of challenges and so different types of solutions to these challenges, as opposed to a one size fits all, presents a huge opportunity for the bottle bill and beyond.”
For the Bottle Bill, are there specific models you are looking at as inspiration?
“We’re looking at all types of models. That’s, to my mind, the fun of this. It is working with jurisdictions to look at all of the potential solutions and loosening up some of those requirements in the current statute so that they can explore some opportunities and really see how that could potentially be a great benefit.” “I think there’s a really “And one of the big things exciting opportunity to I’m excited about working on is food recovery and explore ways that we the opportunities where can tailor solutions to we can get food prior to bottle bill challenges it becoming waste and really helping serve the in different regions community. I know Ralphs, of the state by testing Raley’s, Safeway; a lot of your members are really working some of these other hard on this front and look technologies.” for opportunities to get this food out to the community You brought up organics earlier, can you to help serve people. dive a bit further into your focus on that “Right now, that is so critically important policy category? with one in five Californians being food “This is a huge one, and I know that your members already participate immensely and are huge stewards of our efforts to decrease and reduce as much organic waste as humanly possible. insecure. Where we have children hungry every day. It is critically important that we figure out how to reduce the waste and massive impact on the climate by creating organics waste, but how do we turn that around and make it a win to serve our communities. Organics is one of my top priorities this year.” ■
A MORE TURBULENT FUTURE
By Len Lewis
In catching up with the latest research on what the postpandemic retail world will look like, Covid-19 appears to be a test run for operating in retail’s disjointed future.
Will consumers be coming back to your stores for that old time shopping trip or will direct-to-consumer strategies become the norm in a post-Covid world and permanently change the face of retailing? These are questions that a broad spectrum of retailers on the domestic and international scene are wrestling with as the world enters the second year of the devastating pandemic with only a faint glimmer of light at the end of the tunnel.
But is it an issue that’s becoming increasingly irrelevant since no one will emerge from this social and economic debacle unscathed or unchanged? To survive and, hopefully, flourish retailers must retool for recovery by adopting a consumer-first attitude that includes enhancing the in–store experience as well as preparing for a new era of “touchless” selling. Commenting on its recent CEO survey, Bain & Co. noted: “They view the Covid-19 crisis as a dress rehearsal for a more turbulent world to come.”
Much of this turbulence will be the result of e-commerce which has jumped five years ahead of it time and industry observers will be forced to up their investments in online selling and marketing. “If 2020 has taught us anything, it’s that nothing is outside the realm of possibility as far as the future goes,” says Ciaran Bollard, CEO of Kooomo, an ecommerce platform provider. “Brick and mortar retailers were forced to place digital transformation at the top of their agendas and online retailers have had to respond to the immediate, and unprecedented changes to consumer behavior at the hands of Covid-19.
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Bollard added. “There may be some difficult times ahead for the industry as a whole. But retailers who implement these strategies, and other innovations will differentiate themselves from their competitors and have a better chance of succeeding.” This may be the key to battling Amazon’s increasingly pervasive presence in retailing. Joe Jensen, vice president of Intel’s IoT group and general manager of retail, banking, hospitality and education has said, “consumers want to remove all the friction and hassle from their life. They’ll gravitate toward what’s easiest every time. So while price is important, experience is even more so. Retailers may blame Amazon for the challenges they face, but in reality it is about rapidly changing consumer expectations. Online retailers like Amazon have simply been nimbler in meeting these needs.” That may be changing as well, according to observers who note that Walmart is expanding its use of robotics to speed up order fulfillment times in order to defend its position against Amazon Prime’s membership model. At present, the chain is planning to build 20,000–35,000-squarefoot within or next to specific stores to cut fulfillment and delivery times. “What we want to do is fill as many orders as we can,” said Tom Ward, Walmart’s senior vice president of customer product. “The system allows us to pick orders and dispense them with great speed.” Details of the time savings have yet to be released. But the issue is much broader than online selling, industry observers said. Retailers have to prove to consumers that their stores are worth visiting and not just dark store repositories for toilet paper, paper towels and sanitizers. “It is an opportunity for flexible retailers to rebrand themselves by keeping consumers center stage in everything from the in-store experience to supply chain strategies,” one consultant noted.
This rebranding process could include new locations as well as formats. A business brief by Retail Dive said that with traffic down nearly 50 percent, some normally popular malls are retooling leases as they come out of the pandemic. This includes inviting in new non-retail tenants, according to market research firm Placer.ai.
Additionally, the company found that pandemic-related trends will continue, including a boom by value-oriented retailers like dollar stores and other deep discounters, warehouse clubs, Walmart and Target. Still unclear is whether the exodus from the cities like New York
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which experienced a 42 percent drop in population, could lead to a new retail mix on suburban streets or in malls.
This indicates a geographic shift among consumers, which could lead some retailers who cater primarily to city shoppers to follow them into suburban areas.
Meantime, consumer habits data from Accenture indicate that ecommerce purchasing will increase an estimated 169 percent in the post-pandemic period not only due to health and safety issues but the fact that 86 percent of consumers surveyed plan to continue working from home. This was evident at this year’s virtual CES event where many products were geared to safety and comfort. For example, Targus introduced a number of products for disinfecting workstations. Dell introduced a monitor designed specifically for angled videoconferencing calls and Shure has a new microphone to enhance sound quality during zoom calls. Disinfectants, air purifiers and touchless gadgets were also presented by appliance companies including Kohler and LG. The focus was also on home delivery and curb pickup of online purchases, both of which are likely to continue post pandemic, according to retailers like Corie Barry, ceo of Best Buy. Speaking at a CES session she noted: “The pandemic has forced people and companies to try out these new fulfillment methods, in effect normalizing them.” This may be the key to retail survival, according to a McKinsey & Co., survey which revealed that 67 percent of consumers are optimistic that businesses will recover if they implement sustainable long-term solutions. Although the question of when more people will return to physical shopping trips remains up in the air, it will involve technology that makes them feel safe. As such, many restaurants have introduced digital menus, enabling customers from touching things others have handled, Computer Weekly reported. One example is the Breakfast Club chain, which is using QR code on tables to direct people to its online menu. On another front, British cosmetics retailer Lush has introduced an app called Lush Lens, which customers use to scan products and read the packaging for information without having to touch the products. In the U.S. Moosejaw, an outdoor apparel retailer is giving tablets to store employees who scan QR codes on garments and then ask customers a few questions about their body type in order to get them the best fit without using changing rooms. This combines the demand for personalization with safety. And since April, Frasers Property at malls in Singapore has been using mobile robots that emit UV disinfecting light in order to insure shopper safety and to reduce the amount of labor needed for cleaning.
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Emerging from the pandemic also means developing ways to avoid potential disruptions in the supply chain and discouraging panic buying. As such, growth in product sales will continue after the pandemic, but not at as rapid a pace, according to McKinsey. This includes an estimated 9 percent increase in purchase of household supplies; nine percent in over-the-counter drugs and seven percent in groceries, compared with a 15 percent increase prior to the pandemic. Any slowdown in growth can be traced to increased use of digital or low-contact channels. For example, eight percent of consumers intend to continue getting restaurant deliveries, and 11 percent will maintain grocery delivery, bringing to 51 percent the total percentage of consumers using the latter service. Along these lines, nine percent more consumers are expected to use BOPIS (buy-online-pickup-in-store) after Covid. This rises to 12 percent for curbside pickup. As online capabilities become more ubiquitous, retailers have to explore new ways to differentiate themselves from competitors and prove their value, according to McKinsey. This includes delivery speed, wider assortment and personalization. However, it also puts productivity under pressure, resulting in the need for more expensive logistics systems to handle higher inventory needed for increased customer demand, it was noted.
Here, the question is not only whether companies are wiling to make these and other changes, but to stick with them once the Covid crisis in the rear view.
This was one of the conclusions in a report from PwC global strategy leaders Blair Sheppard and Kevin Burrowes which stated: “With the arrival of vaccines that hold out the possibility of a resumption of many activities, companies will actually face their biggest test – can they make fundamental change decisions in an accelerated timeline. Are they able to apply, in a post-virus environment, the agile and crisply executed managerial processes they embraced when survival was at risk?
Companies also have to think about unintended consequences, they said. “Some meat packers ignored worker safety to maintain profits and that choice came back to harm them in fines and reputation. ■
