California
building resilience in retail PAGE 48
an election to remember PAGE 62 2020, ISSUE 3
CALIFORNIA GROCERS ASSOCIATION
grocery delivery’s mainstream moment page 28
Well Done!
During these unprecedented times, California’s grocery industry has served as a beacon of resiliency – sustaining the communities we serve by providing life’s essentials and a small sense of normalcy amidst uncertainty. The California Grocers Association and the CGA Educational Foundation applaud the hundreds of thousands of hard-working grocery employees who continue to transport goods, stock shelves and serve customers, all while maintaining a safe and healthy shopping experience. From frontline team members to grocery distribution centers, your perseverance and dedication has been vital for communities across California.
We are committed to ending hunger in our communities and eliminating food waste in our company by 2025. Follow our journey at
TheKrogerCo.com and #
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CONTENTS | ISSUE 3
FEATURES
42
CAROL ADAMS
IS THERE A FUTURE IN MALLS?
28 in-depth look
LEGACY SCHOLARSHIP RECIPIENT
56 E-Commerce Is Here To Stay: Are Retailers Prepared?
Retailers statewide have learned this year that grocery shopping behavior may have changed forever. Few could have expected the rapid acceleration in e-commerce caused by the COVID-19 pandemic.
COLUMNS Chair’s Message Where is Our Hope?. . . . . . . . . . . . . . . . . . . 6 President’s Message A Year Like No Other. . . . . . . . . . . . . . . . . . 8 Viewpoint Getting Past the Past. . . . . . . . . . . . . . . . . . 12 Capitol Insider Just around the Corner. . . . . . . . . . . . . . . . 17
48 Building Resilience in Retail When the pandemic goes away, or if it does, how differently will people shop than before and how resilient will supermarkets and other retailers be in meeting the seismic and permanent shift in shopping habits?
62 An Election to Remember Few consultants understand California’s political landscape like Paul Mitchell. With Nov. 3 just around the corner, Mitchell provides valuable insight into the General Elections and their impact on business.
Government Relations A Wild Year. . . . . . . . . . . . . . . . . . . . . . . . . 18 Inside the Beltway Moving from the Urgent to the Critical.. . . . . . . . . . . . . . . . . . . . . . . 20 Washington Report Politics Aside, Independents Mean Business. . . . . . . . . . . . 24 Mommy Blogger Shopping to Support My Community. . . . . . . . . . . . . . . . . . . . . . 72
DEPARTMENTS CGA News. . . . . . . . . . . . . . . . . . . . . . . . . . 16 Outside the Box New Retail Perspectives.. . . . . . . . . . . . . . . 38 Index to Advertisers. . . . . . . . . . . . . . . . . . 71
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CGA | BOARD OF DIRECTORS
EXECUTIVE COMMITTEE
CHAIR APPOINTMENTS
Chair Phil Miller C&S Wholesale Grocers
Second Vice Chair Renee Amen Super A Foods, Inc.
Secretary Lynn Melillo Bristol Farms
First Vice Chair Hee-Sook Nelson Gelson’s Markets
Treasurer Dennis Darling Foods Etc.
Immediate Past Chair Kendra Doyel Ralphs Grocery Company
Denny Belcastro Kimberly-Clark Corporation
Steve Dietz United Natural Foods, Inc.
Casey McQuaid E&J Gallo Winery
Independent Operators Committee Chair
Elliott Stone Mollie Stone’s Markets
DIRECTORS
Mark Arrington Post Consumer Brands
David Higginbotham Stater Bros. Markets
Joe Mueller Kellogg Company
Jeanne-ette Boshoff Molson Coors
Bryan Jankans Mondelēz International
Ken Mueller Raley’s
Bob Bukovec Tyson Foods, Inc.
Saj Khan Nugget Markets
Subriana Pierce Navigator Sales & Marketing
Pamela Burke Grocery Outlet, Inc.
Nancy Krystal Jelly Belly Candy Co.
Doug Christman Beverages & More, Inc.
Michel LeClerc North State Grocery Inc.
Chris Podesto Food 4 Less-Stockton/ Rancho San Miguel
Brent Cotten The Hershey Company
Hillen Lee Procter & Gamble
Willie Crocker Bimbo Bakeries USA
Hal Levitt The Save Mart Companies
DJ Deutsch California Fresh Market
John Mastropaolo Chobani, Inc.
Jake Fermanian Super King Markets
Jonathan Mayes Albertsons Companies, Inc.
Damon Franzia Classic Wines of California
Mark McLean CROSSMARK
Sergio Gonzalez Northgate Gonzalez Markets
Doug Minor Numero Uno Market
President/CEO Ronald Fong
Director CGA Educational Foundation Brianne Page
California Grocer is the official publication of the California Grocers Association.
Director Digital Communications Nate Rose
1005 12th Street, Suite 200 Sacramento, CA 95814 (916) 448-3545 (916) 448-2793 Fax www.cagrocers.com
CALIFORNIA GROCERS ASSOCIATION
Senior Vice President Marketing & Business Development Doug Scholz Vice President Communications Dave Heylen Vice President Government Relations Kelly Ash Senior Director Events & Sponsorship Beth Wright
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Director Administration & Human Resources Jennifer Gold Controller Gary Brewer
Mike Ridenour The Kraft Heinz Company Casey Rodacker Mar-Val Food Stores Jaclyn Rosenberg Nielsen Jeff Schmiege Unilever Jeff Severns PepsiCo Beverages North America
Jeff Sigmen Reyes Coca-Cola Bottling LLC Scott Silverman KeHE Distributors, LLC Lee Smith Smart & Final Stores Diane Snyder Whole Foods Market Southern Pacific Region Rick Stewart Susanville Supermarket IGA Joe Toscano Nestlé Purina PetCare Richard Wardwell Superior Grocers Karl Wissmann C & K Market, Inc. Kevin Young Young’s Payless Market IGA
Greg Sheldon Anheuser-Busch InBev
For association members, subscription is included in membership dues. Subscription rate for non-members is $100.
© 2020 California Grocers Association Publisher Ronald Fong rfong@cagrocers.com Editor Dave Heylen dheylen@cagrocers.com For advertising information contact: Maria Tillman mtillman@cagrocers.com
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CHAIR’S MESSAGE
Where is Our Hope?
P H I L M I L L ER C& S WHOLE S ALE GR OCE R S
If there is one thing each of us most definitely has learned in 2020, it’s never to say never. We have navigated through this year amid multiple individual, personal and professional challenges. Where is our hope? How do we survive and ultimately thrive through these winds of chaos and change? The power of progress always comes through the journey of pain. During this journey, I ask where our hope is because it seems so close and yet so far away from reality.
We live in a complex but interconnected world, a world where diversity has shaped the modern society and our businesses. The benefits for businesses that foster a diverse and inclusive workforce go way beyond the simple optics of race and gender. The coming-together of all people with unique life experiences is the real driver of innovation. Look at our industry; the very food we serve and eat every day is a direct result of a cultural amalgamation.
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The older generations typically view diversity through the lens of race and gender, but Millennials see diversity as a collection of varying experiences, backgrounds and individual perspectives. It is estimated that by 2025, 75 percent of our workforce will be made up of multicultural Millennials and our very important company discussions and decisions should be inclusive of their opinions as well. The food industry is rapidly changing, not only globally but locally as well – from food retailing and production to how it is merchandised and even as to how and where it is grown. After the impacts of COVID-19, the future of food up and down the supply chain will result in new realities for our industry, and by example, the one-time hopes and dreams of vertical farming are now a reality.
Hope is an optimistic state of mind that is typically based on the expectations of positive outcomes, events, or circumstances in our life’s journey. We each generally long for our family to achieve certain goals and objectives in life. We generally have personal or professional goals and ambitions in our careers and businesses, and we all have dreams of what will bring our lives the most joy and happiness. Our country’s fabric has always been challenged and sometimes fractured as we struggle to educate, communicate and listen to each other’s joys and pains. While that particular journey continues, we must remain diligent and committed to working daily to realize racial harmony with liberty and justice for all.
Employees with diverse backgrounds bring unique experiences, all combined to create resilient and highly effective performing organizations.
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Substantial research shows that diversity brings many advantages to businesses and organizations: increased profitability and creativity, stronger governance, and better problem-solving abilities.
Underlying these rapid changes are the collective forces of diversity and inclusion that influence how the world produces, transports, distributes, buys, sells, and consumes every item in our grocery stores. Regardless of ethnicity, wealth inequality, or socioeconomic disparities, consumers will continue to research and identify
CHAIR’S MESSAGE
“The benefits for businesses that foster a diverse and inclusive workforce go way beyond the simple optics of race and gender. ”
ways to improve their health and wellness through their food choices. The information empowering these decisions has never been more widely available. Not only does this dynamic mean gaps will continue to close, but it may even accelerate as new innovations are derived from the industry’s use of artificial intelligence and advanced learning platforms. So what does the future hold? Where is our hope? The future of retail is one that caters more exactly to consumers’ desires all who have a fragmented, shifting sense of identity. It is a future empowered by access to information and unlocked for businesses
by technological innovation. This trend runs counter to how the industry has historically operated, a history where retailers enjoyed success with a very loyal and culturally static customer base. Anyway you carve out our future, it’s almost impossible to see it as anything but demanding that we recognize the need to have a diverse and inclusive society and workforce which accounts for and pays close attention to the fragmented consumer base we all serve. And although we have a long way to go, as an industry that feeds every American, there is tremendous opportunity reinforcing the immediate need to embrace this future. ■
Thank you to this year’s honorees of the Chair’s Circle. Criteria: Is a member of the Association in good standing, exceeded a minimum annual participation of $60,000 and participate in a minimum of five individual sponsorship opportunities with the California Grocers Association and/or CGA Educational Foundation. Anheuser-Busch InBev Bimbo Bakeries USA C&S Wholesale Grocers Coca-Cola North America/Reyes Coca-Cola Bottling, LLC Kellogg Company Kimberly-Clark Corporation Molson Coors Tyson Foods, Inc.
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PRESIDENT’S MESSAGE
A Year Like No Other
RO N F O N G PR ES IDEN T AN D CEO CALIFOR N IA GR OCER S AS SO CIATIO N
I doubt there will ever be another year like 2020. The year 2020 has been like no other in recent history. It is said that America stands at a crossroads. Like many of your companies, CGA has stepped back both as board members and staff to reexamine what we as an Association are doing regarding diversity, inclusion and social justice.
I am pleased to report that the Foundation Board will be exploring these suggestions and more in the coming months. Stay tuned.
I encourage you to read CGA Chair Phil Miller’s message on Page 6. He addresses the topic of hope and its place as it relates to diversity and inclusion. It is a thoughtful and well-written piece that you should share with others in your organization.
At our July meeting, the CGA Board of Directors allocated a portion of their meeting to discuss this very topic. We allowed board members to share their feelings, thoughts, and impressions related to this escalated focus on diversity, wealth disparity and inclusion. The discussion was healthy and emotional as they discussed ways our industry can take affirmative action to improve diversity and inclusion. Possible Board action items were discussed, two of which appeared best fit for the CGA Educational Foundation. In a memo to the Foundation Board of Trustees, Phil formerly asked the Foundation to consider creating a special category of college scholarships geared towards minority students, and to identify and partner the Association and Foundation with California colleges and universities that are primarily attended by minority students with the intent to introduce them to the grocery industry.
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But our work doesn’t stop here. CGA will explore new discussion avenues in the coming months, always being open to all meaningful and constructive conversations. We realize opinions may differ, but we want to ensure that all voices are heard.
CGA also is addressing diversity, inclusion and social justice during a General Session at this year’s virtual CGA Strategic Conference. Phil, myself and Juan Trillas, Bimbo Bakeries USA, and this year’s Illuminators Headlite, are featured in an enlightening 45-minute panel discussion that explores how demographic trends are shifting the consumer landscape and the business advantages of inclusive organizations. It was an honor to be a part of this discussion.
This year indeed has been like no other, and hopefully, with the bold steps being taken, there will never be the need for another 2020 ■
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VIEWPOINT
Getting Past The Past
K EV I N CO U PE FOUN DE R , MOR N IN GN E WS BEAT.CO M
I was getting a long-delayed physical the other day, and the nurse asking me a series of questions posed one that made me laugh out loud: “Are you anxious or depressed?” My response: “Isn’t everyone at least a little anxious or depressed?” She didn’t, to be honest, find it to be as funny as I did. But of course, we are. To varying degrees, naturally, depending on our circumstances. If you have lost your job or are coping with the impact of COVID-19 coronavirus on either your health or the health of someone in your family, the anxiety levels, appropriately, probably are off the charts. Me, I’ve been lucky. Other than weekly six-mile trips to Stew Leonard’s, two trips to a Mexican restaurant 13 miles away to do curbside pickup (it is a lot harder to find decent Mexican food here in Connecticut than in California), and one drive to a hiking trail about a dozen miles away, I haven’t been more than four miles from my house since February 26 … which is a huge change from my past life. I’ve not been to a restaurant or a bar or a theater of any kind and have no plans to … which also is a huge change from my
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past life. But that doesn’t mean I’m not anxious about it, if you’ll forgive the double-negative. To a large degree, this is the consumer scenario that presents itself to retailers. The question is how resilient consumers will be and how retailers will respond to it. Bloomberg recently reported on a new survey concluding that even as the US economy reopens – admittedly in fits and starts – “Americans aren’t much interested in going out and spending … When asked about their social plans after the economy fully reopens, more than half said they weren’t looking forward to going to a movie theater, sporting event, concert, or show.” So much for resilience. The survey concluded that many Americans had developed a fear of enclosed spaces, with a lot of concern about bars and restaurants … though about 75 percent of those surveyed feel okay going to independent local retailers (where, presumably, they feel the owners have a greater sense of culpability and dedication) and – wait for it – grocery stores.
To be fair, not everyone is worried about going to restaurants and bars. Their lack of concern often ends up on video shown on 24-hour news networks of people crowded around without taking appropriate precautions to prevent infection. And, it usually shows up in spikes in infection numbers. A food executive I know told me about research showing that a significant percentage of coronavirus infections can be tracked to alcohol usage. Go figure. People use alcohol, and they lose their inhibitions and do stupid stuff. Nobody should ever mistake stupidity for resilience. Interestingly, Yelp recently analyzed its data and found that there is “a correlation between increased interest in restaurants, bars and nightlife, and gyms to a spike in COVID-19 cases across hotspot states.” Maybe the least surprising of mid-pandemic revelations, but still sobering. (Pun intended.) The fact is that through all this tumult, food retailers have been an indispensable player, even as supply chains and tempers frayed. With this came challenges, as well as opportunities. Not to mention constant use of the quote often attributed to Winston Churchill: “Never let a good crisis go to waste.”
VIEWPOINT
A great example of this recently occurred not in the food business, but the movie business. AMC Theatres negotiated an agreement with Universal Pictures that will shorten the traditional 90-day window between theatrical releases and their availability for premium on-demand at-home viewing to as little as three weeks. It won’t be for every feature, and the time will vary depending on the film.
The pandemic has created both a stress test for retailers as well as what a food industry executive friend of mine calls “a forced incubator for new ideas to move the grocery industry even further and faster than it has moved in twenty-five years to a new place, with new services, new relationships and more trust than ever with its customers … and perhaps a new level of appreciation that could form a bond and confidence from our consumers … We have always had their backs, and we will always be there when they need us to provide them what they need to keep their families healthy and safe.” I agree with all of this, but I am also interested in seeing what new ideas emerge from this forced incubator. Will resilience be trying to reinvent the past, or embracing and creating the future? There remains, I think, a worrying belief – though maybe it is more of a hope – that at some point the world will return to what it was. Financial Times columnist Tim Harford wrote a piece not long ago about something called “hysteresis,” in which the systems that existed pre-pandemic do not automatically return to their previous condition once the current crisis has passed – especially if we slide right into any sort of extended recession. Harford wrote, “Stretch a rubber band, and you can expect it to snap back when released. Stretch a sheet of plastic wrapping and it will stay stretched.” The economy and the culture, he argues, will be more like the plastic wrap. “The effects can be grim,” he writes. “A recession can leave scars that last, even once growth resumes. Good businesses disappear; people who lose jobs can then lose skills, contacts and confidence … More than one study has estimated that, on average, victims of COVID-19 could have expected to live for more than a decade.
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“Will resilience be trying to reinvent the past, or embracing and creating the future?” But some of the economic damage will also be irreversible. The safest prediction is that activities that were already marginal will struggle to return … Ask, If we were starting from scratch, would we do it like this again? “If the answer is No, do not expect a postcoronavirus rebound.” Businesses that ask themselves when things will go back to the way they were, when things get back to normal, are missing both the likely reality and the potential opportunity that the pandemic can provide. There will be no “new normal” because “normal” can mean something very different depending on geography, demography, and a wide range of other factors. I prefer “new reality,” because it seems more anchored, more tangible.
Still, the point is that both companies – which until this agreement had been feuding, with AMC saying it would never play a Universal-released movie again – realized that the new reality was nothing like the old reality. In making the deal, AMC will get a piece of the action of home viewing money – a major concession by Universal and a major achievement for AMC. And, a major agreement that likely will reshape the entire industry. That’s what happens when you get past the past. Let’s face it. Movie theaters were in trouble anyway because of expanded home entertainment options. The pandemic only accelerated the process (sound familiar?) because it closed theaters and forced studios to adopt new release options. By finding a way to work together rather than battling for supremacy, both sides have figured out that adhering to old ways of doing business simply did not make sense, especially because those old ways were at odds with what consumers seem to want from the entertainment experience. I’m sure that everybody on both sides is anxious about what this all means, and is trying to figure out how resilience can best be achieved and what the future looks like. But they got over it, and embraced the essence of another Churchill quote: “Don’t argue about the difficulties. The difficulties will argue for themselves.” ■
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CGA NEWS NEW MEMBERS CGA welcomes the following members:
MMI (Money Machines International) 332 Virginia Ave Pasadena, CA 91107 Contact: Sam Hooper, President E-mail: shooper@mmi-global.com Phone: (800) 233-5158 Website: mmi-global.com
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Puhff LLC 10880 Wilshire Blvd Ste 1101 Los Angeles, CA 90024 Contact: Jaheyla Blair, Marketing/COO E-mail: sales@puhff.com Phone: (818) 653-3740 Website: www.puhff.com
TOMRA North America, Inc. 1 Corporate Dr Ste 710 Shelton, CT 06484 Contact: Joe Perez, Dir., Business Development E-mail: joe.perez@tomra.com Phone: (951) 818-1146 Website: tomra.com
CAPITOL INSIDER
Just around the Corner
LO UI E B ROW N IN T HE S ACR AME N TO OFFICE O F KAHN, S OAR E S AN D CON WAY, LLP
The dust has not yet settled on the 2020 Legislative Session and we are already starting to talk about 2021. Brown
Due to COVID-19, the California Legislature was forced to take an unscheduled recess, losing more than six weeks typically used for committee hearings and negotiations. When it returned, business was nothing close to normal with hearings limited to only a couple per day and those allowed to work in the building paired back to only essential staff, and no more than one or two at any given time. Public testimony was offered via teleconference, providing the opportunity for a much larger audience to participate and, at times, resulting in hundreds of individuals seeking the opportunity to state their position. As a result of the limited time to complete the legislative process, leadership in the Senate and Committee Chairs in the Assembly requested members to park bills deemed to be unrelated to COVID or economic recovery. While not all legislators heeded this advice, many did and substantially fewer bills were sent to the Governor at the end of the session than in normal years. Many unheard bills will be back in 2021 assuming the Legislature can resume
anywhere close to the pre-COVID normal. While housing issues and police reform will be a top priority, I expect to see a number of environmental issues on that agenda, including packaging and recycling. Packaging has been a hot item for the entire session, only to end up a few votes short two years in a row. In 2019, the bills were all-inclusive, covering all single-use packaging but providing several off-ramps for food safety-related issues. In 2020, the bills were scaled back to singleuse plastic and made other changes to reach a compromise with the opposition, which included agriculture, food manufacturers, beverage manufacturers and distributors, and waste haulers, to name a few. Even with significant amendments, substantial opposition remained. Legislators and industry shared concern over providing CalRecycle significant authority to adopt fees and regulations. The author and sponsors have already expressed an interest in bringing the issue back in 2021. While the Legislature was attempting to create new laws, the State Commission on Recycling Markets and Curbside Recycling was meeting.
Created in 2019 by AB 1583 (Eggman, Chapter 690, 2019), the Commission is charged to provide a report to the Legislature in 2021 that includes policy recommendations to achieve market development goals and identify products that are recyclable and compostable and regularly collected in curbside programs. The Commission has committees to research and discuss market development, recycling and organics. Based on recent discussions with commission members, we anticipate the report and policy recommendations to highlight several issues important to grocers. We can’t write about recycling without discussing the bottle bill and it’s needed reform. The Governor provided some relief to grocers in 2020 with a 120-day suspension of the in-store take-back requirements. While we would have preferred a longer suspension, we are confident the data will bear out that the closure of recycling centers had a much more significant impact on recycling rates than the suspension of in-store take-back. This will help us as we move into 2021 and begin the discussions to make more permanent statutory changes to the program. Before we know it, 2021 will be here, and the Legislature will return. We plan to use these few short months to develop a robust agenda and look forward to your input. â–
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GOVERNMENT RELATIONS
A Wild Year
K EL LY A S H V ICE PR ES IDEN T CGA GOV ER N MEN T R ELATION S
All in all, this year has been full of roller coaster-like adrenaline, particularly in the California Legislature. We live in unprecedented times, and while a pandemic has significantly changed many aspects of the grocery industry and how we do business, it has also considerably impacted how the government operates. Back in March, the State Legislature adjourned for spring break only to decide they needed a lot more than a week to figure out the seriousness of COVID-19 and adjust procedures. Fast forward to the end of May. The Legislature returned in different ways, the Assembly requiring in-person committee hearings and floor sessions and the Senate adapted a bit to allow for some remote attendance to committees. This significantly changed the way we accomplished advocacy throughout the year. We went from being able to meet in-person inside offices in the Capitol to having to do zoom and conference calls with members and staff when we could and emailing them about our positions. However odd and new this was, our team and CGA members adapted well, and we are proud of the influence we had on the process.
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In an interesting turn of events, we probably had more zoom face-to-face meetings with the Legislators themselves than in previous years as Assemblymembers and Senators were eager to hear directly where an essential industry is landing on certain issues. Because of that eagerness, our firstever virtual Grocers Day was quite the success. We started the morning discussing the year’s hot issues and learning about legislation having the greatest impact on the grocery industry. We heard from legislators about what it’s like to continue legislative business during a pandemic and from experts on liability and recycling. In the afternoon, attendees broke into three different groups and had more than 20 separate meetings with legislators and their staff. This year, more legislators participated in meetings and had fewer changes and cancellations than in years past. That speaks to our members and CGA’s work to elevate our issues this year amidst a pandemic and ensure that Legislators and the Governor hear our voices. Thank you to all who participated and helped shape the day.
But that wasn’t the end of it! With Grocers Day being in early August, we still had the rest of the month to influence legislation and adjust to the Legislature’s ever-changing landscape. Committees came back in full swing and many bills were drastically altered at the last minute. This kept the CGA government relations team on its toes. Still, we navigated it by adjusting when we needed to, thinking far outside the box, and investing in powerful coalitions to amplify our voices. It got even more interesting when in the last two weeks of the legislative year, Senate Republican Legislators were exposed to COVID-19, one testing positive, and were then required to self-quarantine. Remote voting via Zoom was set up so they could still participate in floor sessions. Needless to say, it didn’t go as smoothly as one would hope. Rather, muting and unmuting, cussing, and even a very spirited debate on a motion to limit debate was had. On the Assembly floor, things ran more smoothly. Although it came down to an Assemblymember having to bring her one-month-old baby onto the floor to be a deciding vote on a few bills, that was the most contentious matter. The Assembly rules didn’t find that maternity leave was a good enough reason for remote voting, and that many of the more
GOVERNMENT RELATIONS
“We went from being able to meet in-person inside offices in the Capitol to having to do zoom and conference calls with members and staff when we could and emailing them about our positions.” heated bills would be subjected to lawsuits and constitutional scrutiny if a vote was done that way.
“The only constant in life is change,” and so far, 2020 is proving to be the epitome of change.
The Speaker of the Assembly has since apologized, but media and others have offered an interesting perspective on the fact that an Assemblymember from Oakland HAD to be the deciding vote on a few contentious bills and drive to the Capitol while on maternity leave to do so. This speaks more to the political climate of the Legislature during an election year.
The most impressive part of this has been to watch CGA and its members adjust and adapt to the new information and always-changing targets. Members met these challenges with solutions, creative thinking and grace.
All in all, this year has been full of roller coaster-like adrenaline. As Heraclitus said,
We have struck balances with others to help keep our stores safe, held a strong stance on issues that are concerning, and make no sense to implement. CGA is proud to serve and represent its members
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during this tumultuous year and is proud of how our members have risen to handle the challenges we have faced. ■
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CAL I FO RNIA GRO CER | 19
INSIDE THE BELTWAY
Moving from the Urgent to the Critical J EN N I F ER H ATC H ER S E N IOR V ICE PR E S IDE N T, GOVERNMENT AND PUBLIC AFFAIR S FOOD MAR KETING INSTITUTE
From early March to the present, we have been focused on COVID-19 and the Urgent needs in public policy and business. As we continue to adapt to the new normal of COVID-19 and look toward the rapidly approaching 2020 election with candidates and policies that will impact our businesses and customers in dramatically different ways, we must now move from the Urgent – calling for immediate attention to the Critical – the juncture where the consequences can change significantly for the better or worse. While this same critical juncture is undoubtedly upon you at the state and local levels, I wanted to outline some of these critical considerations for candidates and policies federally. There are a number of significant differences in policy and process that will likely impact your businesses, customers and communities, but these are some of the most important.
Taxes The pandemic disrupted the economy in an unprecedented way, causing businesses to close and leaving many workers without jobs. The resulting unemployment insurance hole and lower tax revenue
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collections will likely lead to a rise in state and local taxes at a rate even greater than the 2008 recession. While state and local tax considerations are undoubtedly significant, Democratic presidential candidate Joe Biden has outlined his support for an increase in the corporate tax rate, the individual tax rate and the capital gains tax rate to fund infrastructure and other budgetary needs. You need to have these policy proposals on your radar.
Trifecta The difference between a trifecta – one political party holding a majority in all three bodies (the House, Senate, and White House) – and divided government is one of speed and scope of policy changes. If Democrats gain control of the White House and the Senate, we should expect both speed of action and a broad scope of impact. The last Democrat trifecta occurred after the 2008 election of President Obama and lasted for two years from 2009–2011, which brought the major policy changes of the Affordable Care Act (Obamacare), an economic stimulus
package (the American Reform and Recovery Act), and bank stabilization (Dodd-Frank Wall Street Reform). The last Republican trifecta happened after the 2016 election of Donald Trump, lasted for two years from 2017 to 2019 and brought the policy changes of tax reform (lower corporate and individual rates) and the repeal of the Obamacare individual mandate. Since no pundit is predicting a Republican trifecta, particularly because of the level of the Democrat majority in the House, considerations necessarily focus on potential Democrat-led priorities. We should expect that a 2021 Democrat trifecta would bring tax increases, a public option for health insurance for all, climate change legislation, unionization/labor reform, a federal minimum wage increase, infrastructure projects and economic stimulus focused on individuals. Potential reform of our electronic payments system and enhanced food assistance are two more policies on the positive side a trifecta might allow. While a trifecta makes broad policy changes possible, it is the filibuster that has generally slowed this progress.
Filibuster President James Buchanan coined the phrase, “the world’s greatest deliberative body,” when describing the United States
INSIDE THE BELTWAY
“There are a number of significant differences in policy and process that will likely impact your businesses, customers and communities.”
Senate more than 150 years ago. Frank Capra then put this deliberation and a demonstration of the Senate’s checks and balances on the big screen in 1939, with Jimmy Stewart, in Mr. Smith Goes to Washington. Revising this filibuster rule and thus increasing the speed of potential policy changes is at the top of Democrats’ wish list. The rule has already been revised twice – using an approach once known as the “nuclear option” because it was seen as a last resort – in order to get judges approved more speedily. A Democratic Senate will almost certainly seek a third round of reforms to allow non-judicial policy changes, such as tax increases, to be exempt from the filibuster as well.
As we move from the Urgent needs of the day to Critical planning for the future, we need to consider these potential changes and their possible impact on our businesses and our associates for the better and for the worse with the recognition of the important role this election plays in the adoption of various policies. Visit our voting resources website, www.fmiaction.mmp2.org/voting, to find information about your polling place and options for early or absentee voting. Your participation is both urgent and critical. ■
Kimberly-Clark’s Family Care brand strategies remain focused on Building Resilience at Retail
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CGA gives me a voice in Sacramento that I otherwise wouldn’t have. Through CGA I’ve been able to lobby directly with elected officials and their staff on issues that effect my business. RICK STEWART, PRESIDENT SUSANVILLE SUPERMARKET ONE STORE – SUSANVILLE, CA
Want to learn more about the benefits to CGA membership? Contact Sunny Porter to learn more and start the conversation with your fellow industry peers at sporter@cagrocers.com or call (916) 448-3545.
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WASHINGTON REPORT
Politics Aside, Independents Mean Business G R EG F ER R A R A PR E S IDE N T AN D CEO N AT ION AL GR OCER S AS S OCIATIO N
Independent grocers remain beacons of stability despite unexpected challenges, but to continue, Congress needs to act. The United States is poised to elect a president at a time in the nation’s history when Americans seem more divided and more uncertain than ever about their future. A pandemic has gripped the country for six months, setting a robust economy on its ear, and has contributed to a surge of political unrest nationwide. Grocery retailers have strived to bring stability to daily life, and independent supermarket operators are uniquely equipped to monitor their communities’ pulse. The current pandemic has illustrated the agility and resiliency of independent grocers. The independent supermarket industry continues to experience ongoing and unexpected challenges as it works tirelessly to feed the American public. To help grocers meet these challenges, NGA urges quick and decisive action by a deadlocked Congress on several key items.
Support for Our Supermarket Superheroes: The bipartisan AG CHAIN Act (H.R. 6841) and FRNT LINE Act (S. 4213) provide an exclusion from gross income taxes and temporary
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payroll tax relief to essential food and agriculture workers. The industry’s ability to meet our customers’ needs would not be possible without the dedicated and talented frontline workers who show up to work every day to move product and keep store shelves stocked. While most grocers have increased pay and provided bonuses to their employees, the federal government should also recognize these individuals’ sacrifices.
Liability Protection: The SAFE TO WORK Act (S. 4317) would help ensure grocers are protected if they did their best to comply with federal, state and local guidance. Despite being designated as essential businesses, grocers are under threat of frivolous litigation for merely remaining open during the pandemic. Congress must protect essential businesses from unnecessary liability exposure provided these businesses take reasonable steps to comply with the guidance from the iStock CDC, or other health authorities.
Incentivizing Work: Congress should consider modifying the unemployment insurance (UI) program by adding a cap on total unemployment benefits at a certain percentage of the applicant’s previous compensation level, as an alternative to the current policy of offering additional benefits that have shown to be a disincentive to continuing or returning to work. Better SNAP Access: To help grocers better serve consumers, NGA urges expanding access to the SNAP online purchasing program by providing grocers
WASHINGTON REPORT
with technical assistance to help implement an online program and deferring expensive startup costs for retailers lacking the capacity and resources to get online. Additionally, Congress should consider emergency funding to help shore up the Gus Schumacher Nutrition Incentive Program, formerly known as the Food Insecurity Nutrition Incentive Program. This popular program increases the purchasing power of SNAP customers when they buy healthy fruits and vegetables.
“Grocery retailers have strived to bring stability to daily life, and independent supermarket operators are uniquely equipped to monitor their communities’ pulse. The current pandemic has illustrated the agility and resiliency of independent grocers.”
CBD Regulation: To help retailers fulfill the growing demand for cannabidiol (CBD) products, NGA supports regulating CBD as a dietary supplement. Removing CBD and hemp-derived products from the Controlled Substances Act has led to the rapid growth in business and consumer interest, and CBD products have flooded the marketplace in various forms, such as tinctures, pills, lotions, and oils. Many independent food retailers have responded to this demand and are experiencing growing sales, but others are deterred by the lack of legal clarity surrounding CBD products. NGA supports common-sense FDA regulation of CBD products. Classifying CBD as a dietary supplement will ensure product safety for consumers while providing grocers with much-needed regulatory certainty.
Congratulations
TO ALL THE CGA EDUCATION FOUNDATION AWARD RECIPIENTS
Support from our lawmakers, regardless of political party, on these key issues will allow independent grocery operators to better fulfill their mission as essential businesses in feeding their communities, whether in times of crisis or normalcy. To get involved, visit grocerstakeaction.org.■
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CGA Scholarship recipients Mariana Ayapantecati Jackalyn E. Ballard Michelle Sarah Deyski Samantha Dixon Dayna-Khristine Herbert Austin S. Hong
Nicholas S. Hong Alissa Lozano Dereck A. Nicholson Anissa Quintero Chamine M. Tran Sofia G. Votava
in-depth look
E-COMMERCE IS HERE TO
STAY: Are Retailers Prepared?
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From the coast of San Diego to Redding’s great outdoors, retailers across California have learned this year that grocery shopping behavior may have changed forever. And while many grocers have been transitioning slowly to e-commerce, few could have expected the rapid acceleration we’ve seen as a result of the COVID-19 pandemic.
In February, eMarketer forecast that Food and Beverage sales would account for just 4.8 percent of retail e-commerce sales in 2020. But things have changed a lot in the last few months. Now the research firm has projected that food and beverage will be the fastestgrowing category in e-commerce in 2020, increasing by 58.5 percent year over year. Initially, worry and fear may have driven consumers online as they looked to stay healthy and comply with shelter-in-place requirements. The number of in-store shopping trips has been dropping since the beginning of the pandemic, with about 73 percent of shoppers making fewer trips to the grocery store since COVID-19 began, according to a C+R survey. “The growth of e-commerce [is] being driven by either the inability or, more importantly, the aversion of going to the grocery store,” said Bill Bishop of Brick Meets Click in an interview. “I would not underplay what I think is the inherent aversion to going to the grocery store on the part of a significant portion of people.” According to an online grocery survey conducted in June by Brick Meets Click and Mercatus, 61 percent of households purchased groceries online in the last 30 days, up 34 percent from pre-pandemic levels. Online grocery sales in the U.S. surpassed $7 billion in June, according to the monthly survey, which has been conducted since March this year. Continued on page 30 ▶
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“We believe the days of a grocer not offering e-commerce are probably behind us now.”
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Now, shoppers are turning to online grocery not just out of fear, but also convenience as they settle into new routines and overcome the barriers that may have held them back from online grocery before the pandemic.
The E-Commerce Trajectory for Two Major Players Among the companies that have seen the strongest gains during COVID-19 is Instacart, which saw order volume surge by as much as 500 percent in recent months. According to President Nilam Garenthiran, Instacart saw e-commerce grow in the last few months at a level it didn’t expect for two to four years. To meet the growing demand, Instacart has launched several new products and features to make online grocery more effective. It has also more than doubled its number of contract workers, called “shoppers,” from 200,000 at the end of March to 500,000 today. But behind the numbers is consumer sentiment, which seems to have warmed up to e-commerce for good. “We know there are people who would have never thought about buying groceries online that are now habituated to it. We believe the days of a grocer not offering e-commerce are probably behind us now,” he said in an email to California Grocer.
The Save Mart Companies, which operates the Save Mart, FoodMaxx, Lucky and Lucky California banners, launched e-commerce in 2018 with a click-and-collect offering called “click cart” at 17 of its Save Mart, Lucky and Lucky California stores. The following year, the retailer teamed up with Instacart on grocery delivery, rolling out its program company-wide in just three months. Since COVID-19 hit, The Save Mart Companies’ Rob Cady, senior director of marketing strategy and analytics, said online sales have grown by three times from prepandemic numbers. “Even though we use a third party (Instacart) as our grocery delivery platform, our customers see it as a seamless transition of our business and services,” Cady said in an email. “Many of our loyal customers have migrated to home delivery to stay safe and for contactless convenience.” As more shoppers have come around to e-commerce, the company is looking for ways to make the experience easier. “With our focus on the customer experience, we have been providing additional support for first-time users,” Cady said. We increased our online quick tips and tutorials to create easy adoption regardless of comfort and expertise of online shopping.”
Learning Curves In E-Commerce While the growth of e-commerce offers a variety of benefits like convenience for shoppers and higher sales, it will also present challenges as it becomes a bigger piece of the grocery business. For example, Diana Medina, an e-commerce expert with Inmar Intelligence, notes that grocers’ reliance on third-party platforms, like Shipt and Instacart, makes it harder to differentiate themselves from competitors. From the discovery phase through purchasing, grocery retailers will need to think about their offerings and services and determine how they can stand out. “Retailers need to be very aware that there’s a lot of risk in completely relying on a third party,” Medina said. As a third-party, however, Instacart says it is committed to lifting retailers and helping them grow their businesses to reach more shoppers. As COVID-19 drove more people to rely on grocery, Instacart’s grocery partners were better able to serve their customers with end-to-end e-commerce, Ganenthiran said. But that doesn’t mean Instacart hasn’t faced challenges as it grows amid a pandemic. “One of the biggest challenges we faced across the industry was understanding item availability,” Ganenthiran said. Continued on page 32 ▶
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The platform encountered high levels of bulk buying, shortages, and product maximums, which made it harder to predict what is in stock and how to set appropriate expectations with online customers. The company has made a few changes in response, including updates to its availability models that will reflect what is available on grocery store shelves more accurately.
targeting them better with personalized promotions through new technology, rather than focusing on the tools of the past like circulars and paper flyers. “The way you get messages out in front of [customers] is going to change,” said Medina. Bishop said because of COVID-19 and the soaring online sales it’s brought, grocery promotions have essentially stopped, and brands aren’t promoting much either. But the sales will slow eventually, and retailers will have to rethink how they tackle promotions in an online world. They can’t be complacent, Bishop said. Bishop notes that customers will no longer be satisfied with how they shopped online pre-pandemic and even through the pandemic. Now, they will be looking for better ways.
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“Item availability and fulfillment speed will be a key consideration for all grocers in California and throughout the U.S. as online grocery continues to grow.” Item availability and fulfillment speed will be a key consideration for all grocers in California and throughout the U.S. as online grocery continues to grow. A recent Wall Street Journal article reported that some grocers, like Kroger, are investing in large, automated warehouses. Others, like Ahold Delhaize, are focused on scaling clickand-collect. But the best answer may be micro fulfillment centers, which are miniautomated warehouses that can fill orders quicker and more efficiently. Promotional strategies are also different in an online world. According to Medina, retailers have to consider what they know about their shoppers and how they engage with them to secure their loyalty. This means
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“All our data shows us we’ve passed the tipping point where consumers now actually have more and in some respects better online choices than they ever did before,” Bishop said. “There’s increased competition for online sales that’s very intense.”
Growth In App-Based Shopping Part of e-commerce expansion is the rise of apps, which are critical to a well-rounded e-commerce infrastructure. Consumers are tapping into online grocery from websites, mobile sites and apps, the latter of which many retailers are working hard to improve. As many shoppers looked for quicker ways to order groceries for pickup or delivery at the beginning of the pandemic, app downloads soared. According to data from App Annie, Walmart experienced a 460 percent in average daily downloads of its grocery app while Instacart saw app downloads up more than 200 percent. Ganenthiran said the Instacart app saw daily downloads surge as much as seven times on the Apple app store over the course of the crisis, indicating just how much shoppers have begun to tap into apps for their grocery shopping.
“Consumers are tapping into online grocery from websites, mobile sites and apps, the latter of which many retailers are working hard to improve.”
their social media presence and their use of meal planning apps and tools. Additionally, Medina recommends grocers should make it easy to order ready-to-eat meals from their apps as well so shoppers can have a more restaurant-like experience alongside grocery.
Physical Retail Will Remain
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“Another important aspect to consider is how the mobile experience helps consumers navigate the discovery to then purchase,” Medina said. This includes a retailer’s social media presence and its use of meal planning apps Cyan Magenta Yellow Black and tools. Retailers should be thinking about
Early on in the pandemic, some shoppers turned to online grocery for all of their shopping trips. But slowly they are returning to their routines, Medina noted, which may include both in-store and online.
7.375 Inches
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©2020 The Coca-Cola Company. All Rights Reserved.
Apps also present an opportunity for retailers to strengthen their e-commerce presence. Medina said mobile adoption is an important element for retailers to consider when building an online experience. Ease of use and accessibility of apps and mobile sites can even increase engagement with retailers, she said.
It’s important to note that while online grocery will become more central to people’s lives, physical retail will also remain important.
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“Medina thinks the choice between physical stores or e-commerce will depend on the mission of the shopping trip and the meal occasion.” iStock ◀ Continued from page 33
For example, a recent survey from IRI found just 17 percent of shoppers went online when an item they wanted to purchase was out of stock, while 30 percent went to a different physical store and 26 percent went back to their same primary store.
Medina thinks the choice between physical stores or e-commerce will depend on the mission of the shopping trip and the meal occasion. Stock-up trips and purchases of bulky items and paper products may draw shoppers online, while special occasion shopping – think a special birthday dinner – will attract shoppers to stores.
“It’s really to be expected that those two experiences will continue to merge, which makes it more important than ever for retailers to look at consumer behavior,” Medina said. According to Bishop, every retailer should be trying to get all of their customers to buy from them in-store and online. But it’s going to take a creative approach that ties the two experiences together and offers a “bundle of ways to shop.” Retailers will also have to get better about their perishables online because undoubtedly customers’ hesitation around perishables has limited grocers’ online sales, Bishop said. “I think that’s something very few people are doing today, and there’s a substantial amount of untapped potential there,” he said.
CREATING CATEGORY VALUE TR U ST E D B R A N DS | L E A D I N G I N N OVAT I O N | M E D I A I N V E ST M E N T
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“The key to successful e-commerce is to integrate the entire customer journey, rather than being seen as a separate operation.” What Does The Future Of Online Grocery Look Like? Recent research shows that people plan to keep buying groceries online after the pandemic. About 36 percent are very likely, and 49 percent are somewhat likely to keep buying groceries online after stay-at-home restrictions end, according to IRI’s survey on life after COVID. Additionally, findings from Brick Meets Click and Mercatus show that online basket sizes are increasing. The average order value reached $90 in May, an increase of $5 from April. This indicates shoppers’ comfort in ordering more during their online grocery hauls. It also shows retailers have an opportunity to encourage consumers to build bigger baskets when they are shopping online. Additionally, recent research from Ernst & Young shows 60 percent of consumers are willing to consolidate their online shopping trips with fewer, larger transactions. Retailers are better equipping themselves for a post-COVID world. In addition to Instacart’s hiring of hundreds of thousands of shoppers, the company has added capacity
with flexible options like “order ahead” and “fast and flexible,” which give shoppers more choices around scheduling their grocery deliveries.
“Rapidly developing consumer needs and evolving technology are key factors in our trajectory and future offerings,” he said.
Instacart also noted that a strong e-commerce sector would drive jobs for California retailers.
The company is also keeping its eye on the permanency of online grocery shopping as customers look for value and continue to maximize their food budget.
“Providing delivery helps local grocers stay competitive. With that success comes jobs,” Garenthiran said. “The retail grocery industry in California has higher sales and employs many more people than the electronic shopping and mail-order houses industry.”
Cady anticipates the growing demand will drive platforms to expand their capabilities to support not only core grocery but also prepared-meals delivery combined within one shop and delivery – “truly supporting shopper needs and fulfilling our vision of a ‘digital store’,” he said.
In fact, the company said a recent study found markets is associated with a 4 percent increase in retail grocery employment. Last year, that amounted to more than 11,500 jobs and more than $337 million of incremental revenue growth in California alone.
From Bishop’s perspective, the key to successful e-commerce is to integrate the entire customer journey, rather than being seen as a separate operation. Bishop said part of that means delivering outstanding customer service, whether in-store or online. But what will it mean to deliver outstanding customer service in today’s world?
The Save Mart Companies also has its eye on innovation for the future. Cady said the company is actively pursuing new technologies and systems, including things like contactless delivery and tools that will improve the customer experience.
“Somebody’s got to distinguish themselves on what that is going to be,” Bishop said. ■
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OUTSIDE THE BOX N EW RETAIL PERS PECTIV ES
Historical Cooking The Boston Globe reports historical societies across the country are releasing old-time recipes as home cooks, who are bored with all the regular dishes in their repertoire, search for meal inspiration. For instance, consider a 1912 chocolate-nut cake recipe from Newberg, Ore., whose secret ingredient is mashed potatoes, apple-less apple pie, and even a chocolate cake without butter, milk or eggs. These historic culinary oddities are often the product of the Great Depression or world war rationing.
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Food&Fertilizer
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Safe Spaces
Dobbies is partnering with Sainsbury to offer 3,000 chilled, fresh, frozen, grocery and household products in its 69 garden center stores. Mike Luck, director of business development at Sainsbury’s, said: “We’re always looking for new ways to bring our distinctive, high-quality products to more customers. This opportunity with Dobbies will bring a fantastic choice of food and grocery products to convenient locations.” iStock
Owners of upscale, white-tablecloth restaurants are either closing until there’s a COVID-19 vaccine or shutting forever. However, Chicago’s Fat Rice restaurant may have a solution with an experimental model that is a convenience store for foodies. According to owner Abe Conlon, a James Beard Award-winning chef, “the restaurant is dead for the foreseeable future … we need to face the reality that we can’t exist in the future as it is now.”
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GOING DARK?
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One of the consequences of the COVID-19 lockdown is a 47 percent increase in domestic abuse. But Boots in the UK provides consulting rooms and safe spaces in the stores where victims can get advice, support, and contact domestic abuse services. Boots’ 2,400 stores in communities across the UK will help take the place of services that have been unavailable during the pandemic, the company said.
OUTSIDE THE BOX
Gone Forever? The speculation that in-store services like salad bars and foodservice may fall victim to COVID-19 isn’t exactly true, according to the Independent Natural Food Retailers Association. Some retailers will shutter these departments for good, but a remake is also likely with retailers controlling the number of prepared foods they offer at any given time. Still, self-service is more than likely on the way out.
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&
GOLF
CHEESE
Items once considered way uncool are gaining popularity as more people selfisolate. Once considered overly processed and too orange, American cheese is gaining momentum along with napkins as people try to fancy up mealtime instead of reaching for a paper towel. Moreover, golf is rising among younger people who are desperate to get outdoors and no longer see it as a game for older people.
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According to some industry observers, the death of the mall has been greatly exaggerated, but those that reopen may have very different anchor tenants. Malls are now going after anchor tenants that attract consumers to entertainment experiences instead of just shopping. For example, at the Mall of Georgia outside Atlanta, Simon Properties and Esports are building a two-level 13,000-square-foot facility for gaming tournaments and PC consoles to bring in younger traffic.
REOPENING MALLS
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Technology is taking center stage as the watchword in retail is “safety first.” Restaurant and retail technology GRUBBRR has developed a kiosk that recycles cash for customers and retailers that need to reconcile end-of-day transactions. It further reduces personal interactions and germs transferred by trading paper money.
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Design Rules Flexibility in store design is the key to making shoppers feel more comfortable, Mara Devitt, senior partner at McMillanDoolittle, told Ad Age. “Flexible design means that instead of making permanent brick-and-mortar changes, things like store layout are easily modified when consumer demand takes a different turn.” In a new report, the National Retail Federation focused on deep discounters or “treasure hunt” retailers urging them to insist on masks and gloves to minimize the problem of picking up items then putting them back on the shelf. The group also recommends that retailers think carefully about adding ordering kiosks and instead using more contactless methods like cellphones.
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Gelson’s
Congratulates
these outstanding CGA Scholarship winners for their dedication to achievement.
2020 CGA SCHOLARSHIP WINNERS Matthew Alvarez Ruben Barajas Lillie Marie Bates Riley Coleman Austin Evey Molly Gillmore Luisa Macias Steffani Nava Mario Magana Daisy Perez Sara Gibson
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@gelsonsmarkets
@gelsonsmarkets
/gelsonsmarkets
Congratulations
to ALL of THE scholarship recipients!
groceryoutlet.com
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Silver Linings By Len Lewis
“We learn from our experiences, and my dad always told me, that you have to make the best decisions you can with the information you have and not look backward – just keep moving forward.”
Over the years, Carol Adams acquired an unusual nickname. Friends and colleagues took to calling her “three-quarters” – for her rare can-do attitude that guides her personal and professional life, for always seeing the glass as three-quarters full, and for an energy and commitment that keeps her moving full-speed ahead. “We learn from our experiences, and my dad always told me, that you have to make the best decisions you can with the information you have and not look backward – just keep moving forward,” said the 30-year veteran of Vons and this year’s recipient of the $10,000 CGA Educational Foundation Legends of the Industry scholarship. Adams, a department specialist at the divisional office in Fullerton, Calif., has been moving in that direction since 1990 when she joined Vons as a 19-year-old parttime courtesy clerk and moved up to file maintenance clerk within six months. Adams grew up in a large family and endured challenges and hardships. Despite some adversities, she graduated early from high school with honors. In 1989, Adams attended junior college part time but was forced to drop out and look for a full-time job to support herself. But, what might have looked like a gray cloudy time in her life held silver linings for Adams. In addition to meeting her husband
of 26 years, her career path at Vons offered the flexibility to work full time and still have time to raise a family and be active in their lives. “The industry and the company always worked with me when I was raising my children. This enabled me to be involved in community and family activities. The company was very supportive of creating that work/life balance that made me better in my job and in my personal life,” she said. Over the years, Adams has had a front row seat to the rapid-fire changes that have taken place in retailing. But the opportunity for a fast-paced career is exactly the kind of rush she likes. “Working in the grocery industry keeps you on your toes and your mind sharp because you’re always learning something new,” said Adams.“One of my most positive experiences has been the opportunity to strengthen my communication skills with customers and employees. Being able to do that in a clear and concise way has also boosted my self-confidence. I’ve learned to balance the expectation of a quick response with the importance of a well thought out procedure.” This also gave her the self-confidence to renew a formal education that had been interrupted years earlier.
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Carol Adams and family at her daughter’s graduation
“In 2016, I felt my children were old enough for me to start focusing on myself again. So, I moved from a front stage to back stage position in the company and in 2019 I decided it was time to further my education,” Adams said, noting that her long-term goal is to move into a buyer or assistant sales manager position. I’d really like to influence other people with my knowledge and experience as well as through my example.”
“Working in the grocery industry keeps you on your toes and your mind sharp because you’re always learning something new.” Nonetheless, going back to school at Cal State Fullerton was a huge step for Adams and the CGAEF scholarship came at a time when her confidence was wavering as to whether she made the right decision. “I’d just finished my first two classes at Cal State Fullerton when COVID-19 struck and had to do virtual learning which took an enormous amount of hours and effort.” Then on May 12, her birthday, she got the call from CGAEF Board of Trustees Chair Jacquie Slobom, Gelson’s Markets, and Bruce Frazier of Albertsons, Vons, Pavillions, telling her she was a scholarship recipient.
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Carol Adams recieved an associate of the month award in 2019.
Legends of the Industry Scholarship In honor of the CGAEF’s past and future Hall of Achievement Inductees, the CGA Educational Foundation established the Legends of the Industry Scholarship in 2018, as part of the newly established Scholarship Endowment. This scholarship is an annual $10,000 scholarship, funded in perpetuity, awarded to one applicant who is pursuing a career in the grocery and/or grocery-related manufacturing industries. To learn more about the Legends of the Industry Scholarship, visit www.cgaef.org/collegescholarships/scholarshipendowment/ “I assumed it was for $1,000,” Adams recalls. “When they told me it was the Legends of Industry scholarship I got so emotional. Choosing me meant they had confidence in my ability to finish my education and gave me the boost I needed to know that I’d made
the right decision. I feel I’ve been blessed with the support I’ve received not only financially, but from friends and family.” The funny thing in all this is that Adams and her son were actually attending the same college at the same time, while her youngest daughter was giving her constant reinforcement that she could do it and her husband alleviated some of the pressures on her by doing more of the cooking and laundry. But, the pandemic has also had an impact on her quest for a degree in business administration. When Cal State Fullerton decided to continue with virtual sessions, Adams decided it would be best to invest in a school that already had a solid foundation in online schooling. “I have transferred to California Coastal University in Santa Ana which is strictly online. I felt that switching to a college that was already established online was best.” Right now, it seems that Adams has achieved the perfect balance between her work and home life. “My kids are grown and don’t have to rely on me the way they used to so I’m able to spend more time focusing on school and career without jeopardizing family life.” As noted, Adams is looking into the future for buyer or other positions that could lead her to an assistant sales manager post. As she put it: “When an opportunity comes up you just have to jump at it.” ■
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Jessica Jamerson
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Aurora Ruscigno
CAL I FO RNIA GRO CER | 47
BUILDING
RESILIENCE IN RETAIL
BY LEN LEWIS
In 1905, the Spanish-American philosopher and essayist George Santayana said, “those who cannot remember the past are condemned to repeat it.” This warning has often been repeated and paraphrased over the past century in business and politics – perhaps most famously by Winston Churchill after World War II. But this clarion call has never resonated louder than now as the world and, by proxy, the food industry, battle its way through the COVID-19 pandemic and face a seismic shift in consumer behavior, retail operations, food safety, and supply chain logistics. When the pandemic goes away, or if it does, how differently will people shop than before and how resilient will supermarkets and other retailers be in meeting the seismic and permanent shift in shopping habits? Supermarkets, agriculture, and food processing are essential services and therefore remain central to social and economic recovery. Most retailers have taken up arms to blunt the impact of the COVID-19 crisis on their businesses and on consumers whose faith in their financial future has been shaken to the core. However, Daniel Sumner, professor agriculture and resource economics at the University of California, Davis, and director of the university’s agricultural issues center noted: “the entire supply chain has been remarkably resilient. Everyone from farming, trucking and grocery had to scramble to save their bacon, and they did so with hardly a glitch.” Continued on page 50 ▶
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CAL I FO RNIA GRO CER | 49
◀ Continued from page 48
He also credits the U.S. Department of Agriculture and the Food and Drug Administration with being remarkably flexible in the face of escalating unemployment and the need to circumvent potential product shortages. “They knew they hadn’t inspected some product for retail but said that was okay and took the flack for relaxing some regulations.” There is, however, a continuing humanitarian issue to be addressed – food banks. Feeding America, the nationwide hunger relief organization estimates that due to the pandemic, over 54 million people are struggling with hunger or food insecurity this year, including 18 million children.
restaurants and grocery and quicker access to information. Many people are working on better forecasting in terms of what people buy when they are shocked,” he said. Several industry observers agreed that the issue now is to analyze what’s been learned and address future calamities by building more resilient business models for every retail channel and maintaining predictability in the food business. “I think supermarkets have acquitted themselves admirably as an essential part of their communities, and there’s some halo effect as we resume some sense of normalcy,” said Neil Stern, senior partner at retail consultancy McMillanDoolittle, Chicago.
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“THE ENTIRE SUPPLY CHAIN HAS BEEN REMARKABLY RESILIENT. EVERYONE FROM FARMING, TRUCKING AND GROCERY HAD TO SCRAMBLE TO SAVE THEIR BACON, AND THEY DID SO WITH HARDLY A GLITCH.” What’s needed now is further improvements in the supply chain to keep products moving, said Sumner. “The industry has done a remarkable job, but it could always be better. I can see more relationships between
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“They are the beneficiaries of higher levels of business among consumers who are still not confident enough to go back to restaurants or other types of retailers.” Brian Baker, managing director retail and consumer goods and supply chain, Deloitte Consulting, noted: “The industry’s ability to stay open and fulfill people’s needs means they’ve done better than most. But, the associated cost and the demand surge placed on the supply chain will take its toll for a while.
“I don’t know if the pandemic uncovered any new flaws in the supply chain, but it has magnified some challenges we’ve had for a while, like being able to match up supply and demand. I haven’t eaten more or less because of the pandemic, but the channel where I got my food changed. “All of a sudden, areas of interest in the early stages of adoption had to grow up overnight like buy-online-pickupin store and home delivery,” said Baker. “But customers are still trying to learn how they want to engage in the food supply chain in the era of COVID-19. Demand signals are still pretty volatile.” This makes some observers remark that increased online shopping, coupled with spikes in demand and more competition, may trigger excess inventory levels that could slash already low margins. Instacart, the largest grocery delivery service, previously estimated that 20 percent of U.S. households would shop online for groceries in five years. However, the company said the game has changed with its own order volume up 150 percent spurring plans to hire an additional 300,000 pickers and delivery personnel, a company spokesperson said. For the most part, however, the industry’s performance gives it a leg up on the economic ladder in several areas including real estate, where chains and strong independents will have the pick of the litter when it comes to new sites. This is particularly the case in malls and mixed-use developments abandoned by other retailers who either closed up shop permanently or are shutting underperforming locations, according to sources in retail real estate. Continued on page 52 ▶
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For example, near San Francisco Brookfield Properties is redeveloping its 804,000 square-foot Stonestown Galleria for about $149 million. Macy’s and Nordstrom left this property in 2018, and the mall is now adding a Whole Foods and a healthcare provider while expanding an existing Target store and adding a Regal movie theater. Plans to build apartments are also on the drawing board, although now postponed due to the pandemic. “As more department stores become vacant, we do need to re-envision the future of mall properties,” Greg Maloney, president, and chief executive of the Americas retail unit of Jones Lang LaSalle said in a recent interview. The issue of labor is a double-edged sword. Closings have meant a meteoric rise in unemployment; people who are also customers may be forced to drastically change their buying habits to pull through tough times. This was underscored in a survey done early in the pandemic by PYMNTS.com, which found that nearly 60 percent of retailers weren’t sure they could outlast the pandemic. As such, almost one-third of New York City’s 240,000 small businesses would fail and take 500,000 jobs with them. As to store level changes, the most drastic ones – or perhaps innovations – will likely take place in perimeter departments like delis, prepared foods and salad bars, according to Stern. “They are the areas most impacted by the pandemic,” Stern said.
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“I don’t believe prepared foods, hot and cold bars, and in-store bakeries are going away. But they may have to be reinvented to include more prepackaged, self-service and contactless ordering to minimize contact between customers and the product and between customers and employees.”
“I THINK SUPERMARKETS HAVE ACQUITTED THEMSELVES ADMIRABLY AS AN ESSENTIAL PART OF THEIR COMMUNITIES, AND THERE’S SOME HALO EFFECT AS WE RESUME SOME SENSE OF NORMALCY.” This separation scenario has benefitted fastfood chains with drive-through windows as dine-in services have been curtailed, according to a study by the Agriculture research division at the University of Arkansas, which has tracked the impact of COVID-19 on the state’s agricultural and rural economies. “However, if more people fill the unemployment lines, these increases are not likely to last long. Meanwhile, some quick-service outlets are so busy that they have police officers directing traffic at the drive-thrus, said Baker. “There’s also a lot of investment money out there looking for new technologies. Creating something sexy and flashy is the first 10
percent of the battle. But to scale it in such a way that retailers can break even is the real challenge,” he said. It’s all about the execution, Stern noted. For example, Bristol Farms has taken hot and cold bars in several stores and turned them into service sections by putting up Plexiglas and having an attendant. Kroger and Ralphs are putting in concierge salad bars to clean up after customers immediately, he said. The industry may also be looking at a new generation of robotics, said Stern. “Maybe it’s the end of the salad bar as we know it. But it’s more about taking the products we have and adapting to the current environment. However, the underlying element is consumer trust,” Stern noted. “They have to trust that products are safe and the area is clean. If retailers can come back, consumers will come back too.” Stern summed up the whole situation in a recent interview with Danny Wegman, chairman of Wegmans, who said the chain made its living by inviting guests into its home. As he put it: “We lost our mojo and have to figure out how to get it back.” According to research by the University of Arkansas, the puzzle’s consumer piece may get more complicated due to outside forces. “A recession resulting from COVID-19 means making additional adjustments to a functional food supply system. Continued on page 54 ▶
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Changes in consumer incomes could impact food demand across all product lines. Global changes in demand and exchange rates could alter agricultural trade flows. Credit availability could impact participants throughout the supply chain, including those at the farm level. These and other implications of a recession would bear close monitoring and evaluation to ensure timely and effective policy response,” it was noted.
of pensioners has investments in financial and property markets, they may face deteriorating earnings.” Furthermore, the pandemic has revealed the need to make products and services more accessible to older consumers. This includes rethinking online shopping and payment systems for less tech-savvy people, the report said.
Amazon took an old Toys “R” Us store in Woodland Hills and made a big splash with a store that was only opened briefly to the public. Now it’s a dark store that just fills orders. “The Whole Foods in Bryant Park opened three years ago as a flagship in the middle of Manhattan, and now it’s a dark store just serving e-commerce,” said Stern. “We’re going to see more existing stores closed and converted to dark stores. Some retailers will just open dark stores from scratch.” It’s also interesting to note one ironic aspect of e-commerce that’s been highlighted by the pandemic – just-in-time delivery. “We worked hard to become more efficient and maximize selling space in stores,” he added. “Now the increase in e-commerce staging areas is adding to the backroom. We might have to live with a little more inefficiency to handle some of the spikes in demand.”
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“THE PANDEMIC HAS REVEALED THE NEED TO MAKE PRODUCTS AND SERVICES MORE ACCESSIBLE TO OLDER CONSUMERS.” Similarly, Euromonitor said that a COVID-19 fueled recession could reduce income and living standards of older consumers – those 65 and older – by three percent in the U.S. “They are facing layoffs and reduced working hours because the 2020 global economy is expected to see the worst recession since the 1930s. A global recession will pose a threat to pension systems and future pension payments. Since a portion
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Overall, the answer may lie in further integration of e-commerce with brick and mortar locations, according to most observers. “I’m working with one retailer whose e-commerce business is up 628 percent. No one planned for the business to be six times what it was four months earlier,” said Stern. “This caught many people off guard. More will turn to third-party partners like Instacart to bring in many people and move more quickly in the short term. Long term, I think we’re going to see more ‘dark’ stores and dedicated fulfillment platforms that enable business to be done more efficiently,” he said.
Baker added: “We’ve been working on a just-in-time supply chain for decades to get excess inventory out of the system. This strategy was in direct opposition to a scenario where everyone in North America decided to buy a year’s worth of toilet paper at one time. I don’t believe any supply chain was built for that kind of switch. “Although it does highlight the need to incorporate new sources of data and customer insight to understand what’s driving consumer behavior,” he said. The ability to absorb new signals is still essential, and that’s where planning systems have served the industry well. “But, the technologies that ingest insight and turn it into action for retailers are the ones that will be most successful. I think grocers will take a hard look at their internal production to see how they can generate surety of supply,” Baker emphasized. ■
IS THERE A FUTURE IN MALLS?
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BY LEN LEWIS
What if you had 10 million square feet of retail selling space to choose from, reduced rents, high traffic and landlords trying to seduce you with all manner of perks? This might have been a retail pipe dream at one time, but the double gut-punch of COVID-19 and the escalating consumer flight to online shopping has mall owners visibly shaken and sending them scrambling to fill space vacated by specialty retailers and department stores that once anchored their developments. The question is whether malls are really an option for supermarket expansion, or does the type of available space, traffic patterns and the seismic shift in consumer purchasing make them incompatible locales? The vastness of the mall universe alone would seem to be good news for supermarkets. There are about 1,200 malls across the country, and the top 10 alone account for more than 26 million square feet of retail space. Department stores, like Sears and JC Penney – both of which had a bleak future before the pandemic – occupy 30 percent of mall square footage. The outlook is not favorable, according to Green Street Advisors, a real estate consultancy, which said back in April that half of all mall-based department stores could close by the end of 2021. The industry is already seeing the fallout. Macy’s is closing 125 stores in lower-tier malls over the next three years, and the venerable Nordstrom is shutting 16 of its 116 full-line units.
“The question is whether malls are really an option for supermarket expansion, or does the type of available space, traffic patterns and the seismic shift in consumer purchasing make them incompatible locales?”
However, as one Wall Street analyst noted, the U.S. is vastly overstored and, in reality, could easily lose 20–30 percent of retail space. This was underscored in a report by commercial real estate firm Cushman & Wakefield which said the U.S. has the most retail selling space per capita in the world and the lowest sales per square foot.
California alone is home to about 61 “super-regional” enclosed malls and more than a dozen that are part of mixed-use developments. This includes the South Coast Mall in Costa Mesa, the fourth largest in the country, and the largest on the West Coast, and the Del Amo Fashion Center in Torrence, reportedly the West’s largest shopping, residential and entertainment center. Continued on page 58 ▶
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Parking lots in major malls like these may become more lucrative profit centers, negating the rush to find new tenants. For example, some malls owned by Brookfield Properties are being used as outdoor entertainment venues. Meanwhile, Amazon is in talks with the Simon Property Group, the largest mall operator in the U.S., to acquire space being vacated by JC Penney and Sears in top-tier malls for its fulfillment centers. “I can’t speak for mall owners, but in today’s retail landscape, any paying tenant would be an appealing proposition,” said Brian Baker, managing director, retail and consumer goods, Deloitte Consulting. “Grocery stores attract a lot of consistent customer traffic. But there would be a lot of considerations for malls in retrofitting existing space for a grocery operation.” Additionally, expanding a brick and mortar footprint (in malls) may not be in the cards for retailers looking to rationalize assortment and improve their return on space. “But repurposing this space as e-commerce fulfillment centers could be a viable option for new-found capacity,” he said. Neil Stern, senior partner at McMillan Doolittle, pinpointed several major challenges for supermarkets, including the need for direct and easy access to the store itself with a lot of parking near the entrance. He also noted that malls tend to be destination locations, whereas supermarkets are more neighborhood driven. Therefore, mall locations would need a large customer base nearby. But too much traffic could be a bad thing. “The entire trip needs to be easy for consumers – everything from parking and store access to ingress and egress,” he said. Successful examples including Gelson’s Markets in Westfield Century City in Los Angeles; Whole Foods at the Fashion Island in Newport Beach; and the recently opened Wegmans at the Natick Mall in Natick, Mass.
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Photo by Mika Baumeister on Unsplash
All things being equal, supermarkets could be the knight in shining armor for some malls. The Wall Street Journal reports that anchor department stores can have relatively low rents because they bring in traffic. In-line stores make up for it by paying higher rents. But, some have clauses in their lease that lets them lower their rent or vacate if an anchor store closes. This makes it urgent for mall owners to fill empty space. If a mall does fail, it can be converted into a mixed-use development with office, residential and hospitality space that could create opportunities for large format stores, observers said. In this case, supermarket tenants would be preferable. In an advisory to clients, Compass Point real estate analyst Floris van Dijkum noted that rezoning would be required for an Amazon hub in a shopping mall because it represents industrial space. A grocery is considered retail use and an easier fit – even though more retailers are filling online orders from their stores. ■
“Parking lots in major malls like these may become more lucrative profit centers, negating the rush to find new tenants. For example, some malls owned by Brookfield Properties are being used as outdoor entertainment venues.”
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CAL I FO RNIA GRO CER | 59
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CAL I FO RNIA GRO CER | 61
An Election to Remember By Paul Mitchell
Photo by Element5 Digital on Unslpash
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Every campaign cycle we hear, “this will be the
VOTER TURNOUT EXPECTATIONS
most important election of our lifetimes.” This year
In elections, there are two types of factors that determine
it might be better to say, “this will be the craziest election of our lifetimes.”
turnout: voter enthusiasm and election mechanics. Having an election coincide with a pandemic, a national
The crazy elements in this election cycle span from
reckoning on race, and record unemployment and
the underlying factors determining turnout and
economic insecurity has given us an electorate that is
the composition of the electorate, to the potential
feeling enormous anxiety, fear, and anger.
outcomes of candidate and ballot measure
There is also more extreme polarization in the electorate
campaigns, and even when we get the results and if they will be believed.
than we have seen in our lifetimes, a fact exacerbated by the current media and social media environments that reinforce and strengthen our divisions. These feelings drive people batty, but they also drive people to the polls. Continued on page 64 ▶
CAL I FO RNIA GRO CER | 63
Illustration by Morning Brew on Unsplash ◀ Continued from page 63
Recent surveys have shown voters are much more deeply engaged in the election, have much stronger opinions, and are much more likely to vote. Even those who are younger, are new registrants, or have no prior votehistory are considered extremely likely to turnout. The mechanics of the election systems around the country are the other ingredient heading into November, and nationally these are seemingly in disarray. States have been struggling to transition to accommodate voting in an election that might be held in the middle of a second wave in the Coronavirus pandemic. While 43 states have implemented some kind of Vote by Mail option for this election cycle, only 10 are automatically mailing ballots to all their registered voters. Additionally, there are a wide range of rules, each set by states and administered by counties, that will determine how and when voters can request ballots, if they can use fear of contracting COVID as a rationale for obtaining a vote-by-mail ballot, if they will have multiple days of voting, or how ballots will be verified and tabulated. This election administration has also been prone to destructive conspiracy theories on all sides. The unproven claims that vote-bymail elections are prone to voter fraud – spread by those on the right of the political spectrum – are then countered on the left by unproven claims that the post office is being dismantled in order to stop mailed ballots from being delivered.
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Both are conspiracy theories that serve to potentially discourage voting and disenfranchise voters who are led to believe the system is being rigged. In California, we are relatively lucky. For the past decade, we have seen several reforms that dramatically changed our election systems and – unbeknownst to us – these laws were preparing us for the challenges we face this year.
“ Recent surveys have
shown voters are much more deeply engaged in the election, have much stronger opinions, and are much more likely to vote.
”
Since 2010, we have seen the advent of online voter registration, DMV “automatic” registration, and automated re-registration when voters complete official post office change of address forms. In 2018, five counties transitioned to a primarily vote-by-mail system, replacing the traditional polling places with limited, but full-featured, voting centers for those who want to cast their ballots in person. In 2020, this was expanded to 15 counties, comprising more than half of the state’s voters. With the increase in voters opting-in to permanent vote by mail and the transition to these all-mail counties, we see that 18.5
million of the state’s 21 million voters would be receiving a ballot in the mail even if we weren’t in the middle of a pandemic. In the pre-pandemic March primary, threequarters of all ballots cast in California were returned by mail, a rate of vote by mail that is three-times greater than the national average. Over 85 percent of the state regularly receives their ballots in the mail or has successfully cast a by-mail ballot in a past election. The state also has greater protections for voters who eschew the in-person precincts and vote centers, deciding to return their ballots in the mail or at local drop-boxes. One challenge in this system has been matching signatures – but California allows registrars to use current or previous voter registration cards to validate the authenticity of a ballot that is cast. And, if a voter signature cannot be validated, or the signature is missing entirely, voters can provide a replacement signature after the fact so their vote can be counted. These ballots would not be counted at all in other states, with no available remedy for the voter. Another issue with voting by mail is verifying that a ballot is legally cast on or before Election Day. Most states require a ballot to be received by the county registrar on Election Day. Still, in California, we determine this based on the postmark and now allow 17 days after the election for these ballots to be received. This dramatically reduces the risk of ballots being disqualified because of problems with the postal system.
“ For the past decade, we have seen several reforms
that dramatically changed our election systems and – unbeknownst to us – these laws were preparing us for the challenges we face this year. Even our voter registration system is ready for this moment. The state just hit a peak of 21 million registered voters, with more than 8 million having registered or updated their registration in the last 18 months. That means that our voter file is larger and cleaner than ever before – an important factor when we are utilizing a voting system that begins with mailing every registered voter a ballot. While this all sounds great, these changes in state law don’t immediately translate to voter attitudes about our vote-by-mail system’s safety, or confidence that every vote will be counted.
”
In recent polling conducted for Capitol Weekly, we found considerable skepticism among California voters, even those who have previously voted by mail. Among those who support Republican candidates, 77 percent say that they don’t have confidence that all California votes are counted, and 84 percent do not support vote by mail for 2020 General. This distrust of the vote by mail system was expressed even by voters who had repeatedly voted by mail themselves.
The most trusted source of information on voting for these voters? Fox News. Only 3 percent cite Secretary of State, County and Local election officials as “very trustworthy.” Among Democratic supporters, the confidence in California’s elections is high – with more than 95 percent having faith in the system in California and 98 percent supporting the shift to vote by mail elections due to the pandemic. But even among these, over 60 percent don’t have confidence in elections in other states. This could mean that Republicans will be prone to disbelieving California results, trusting social media posts about voter fraud and other claims. At the same time, Democrats won’t believe results in the rest of the country and spread their views of fraud and rigged elections. Continued on page 66 ▶
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CAL I FO RNIA GRO CER | 65
◀ Continued from page 65
These unique factors in the coming election: the political environment driving voter enthusiasm and the elections’ mechanics are interesting to those tracking elections. But for most regular Californians, the real impact is how they will translate to what outcomes we can expect in November. ELECTION OUTCOMES
The big driver in this election cycle is the presidential contest. But, as we have seen in prior elections, the wave of a national campaign can splash on statewide races, legislative and congressional, and even local offices and ballot measures. Add to this the fact that the events of the last nine months have significantly changed how voters see the world. Two great examples of this are Propositions 21 and 22, on this coming November ballot. Proposition 21 is a measure to allow local governments to enact more rent control measures, and Proposition 22 a measure rewriting California’s newly-adopted independent contractor rules.
“ In recent polling conducted
for Capitol Weekly, we found considerable skepticism among California voters, even those who have previously voted by mail.
”
The rent control issue was before voters in a slightly different form in 2018, but failed by a nearly 20-point margin. However, in that gubernatorial election cycle, younger voters, Millennials and Gen Z, the demographic group most supportive of the measure, were less than a quarter of the votes cast. It turns out that age can be more important in determining the success/ failure of rent control measures than party, ethnicity, or region of the state. In polling and focus groups this year, young people have expressed greater housing and economic insecurity than ever before, largely due to COVID and skyrocketing unemployment in the service sector in which
many of them, or their friends, work. It can be expected that the current environment has exacerbated the income/age gaps in support of rent control. The enthusiasm for a measure such as Prop. 21 is likely more polarized by age than two years ago. On top of this, we expect the mechanics of the election, and the anxiety regarding the presidential contest, to drive turnout among young voters to all-time highs. The electorate’s share comprised of these young people should jump from 25 percent of ballots cast in 2018 to 33 percent of voters in the 2020 election cycle. So, even before the campaigns for and against this rent control measure start, the electorate’s foundation and what is going on in the world have caused perceptions of the issue to undergo seismic shifts. It seems unbelievable, but whatever happened just two years ago in a big double-digit loss simply isn’t relevant to today’s electoral environment.
Illustration by Element 5 Digital on Unslpash
Photo by Tiffany Tertipes on Unslpash 66 | CAL I FOR N I A G R OC E R
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Similarly, one of the biggest budget campaigns, Proposition 22, has been fundamentally changed in the last six months. When this measure was brought forward after the passage of AB5, it was seen as an issue that was primarily about driving services and being led by a new sector of the economy that was booming. When it qualified, it seemed like I, or a member of my family, was using an Uber/ Lyft nearly every day. But we had never had a grocery delivery. Now that’s flipped, and we have grocery deliveries several times a week, even labeling the delivery guy an “essential worker,” but none of us has even opened the Uber App since March. It is unclear how this impacts the campaigns as they will likely each argue that a vote for their side is saving jobs, protecting workers, and ensuring these services will be available. But, whatever campaign plans they had in February have probably been tossed out and rewritten. If you look at the rest of the ballot, there are plenty of other examples of how the landscape of a ballot measure has shifted under our feet. Proposition 20, a tough on crime measure, might not be seen the same
today as it was in 2019 before George Floyd and the growth of the national Black Lives Matter movement.
aren’t released until 8 pm on Election Day. Still, with millions of ballots coming in the mail, this significantly speeds up the process.
Advocates of Proposition 15 to increase school funding could never have envisioned that they would be running a campaign in a year where students are largely not even going back to school in person.
After by-mail ballots are tallied and reported, counties begin the work of reporting inperson voting results – and in most cases, the totals reported on election night will be enough to determine the outcome of races.
“
We expect the mechanics of the election, and the anxiety regarding the presidential contest, to drive turnout among young voters to all-time highs.
”
The final stage of this election cycle will be counting the votes and declaring the winners and losers – even that will be significantly different in this election cycle. In California, when the county registrars receive ballots, they can be processed immediately – this means they can be opened, signature verified, and put into the vote-counting machines. The actual results
Of course, as we’ve become familiar with i n the past several election cycles, results aren’t final on election night. In some cases, we have to wait days or weeks for the final tally as counties process all their mail-in ballots and any provisional ballots. In other states, they cannot even begin opening by-mail ballots until after the polls close on Election Day. This means, in many states, including the three key swing states of Pennsylvania, Michigan and Wisconsin, processing of mail ballots will be significantly delayed, and they might not have early votes tabulated, and winners/losers declared until days or weeks after the election.
Continued on page 68 ▶
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Photo by Element 5 Digital on Unslpash ◀ Continued from page 67
“ …we could be in for a real post-election ride like we’ve never seen before.” Come election night, we are likely to have results for a third of the states; partial, mostly complete results for another third; and potentially be in the dark for several days and weeks for the final third, which will likely include some of the tipping-point states that will determine the results of the presidential contest.
Between the farm and your store’s shelves is hard work. —
Given what we have seen in terms of the polarized views of election administration in the country, the lack of confidence, in different ways, among Democrats and Republicans, and the vast gulf in what kind of messengers partisans on each side trusts, we could be in for a real post-election ride like we’ve never seen before.
Day in and day out, in the midst of the challenges so many families are facing during this pandemic, our team members go above and beyond to help maintain a healthy and stable food supply for tens of millions of Americans. That’s why we’ve put in place a host of safeguards and measures at all our facilities to protect them. Now, as always, their safety is our top priority.
In this environment, campaigns and election officials have to figure out how to make major adjustments in how they speak to voters, what messages work, and even how they run their campaigns. News outlets are having to rethink how they communicate the facts of what is happening in our elections. And we as voters are going to have to buckle down for what could be a long, dragged-out process. In the end, I think we all share a hope that a return to normalcy is on the horizon. But there will likely be a considerable number of anxious nights before we get there – and Election Night will probably be one of them. ■
learn more at tysonfoods.com
Robbie
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Congratulations to the 2020 Scholarship Recipients Brian Harris
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Jessica Ledesma
Angelina Martinez
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Hannah Ramsey
Michael Gallegos
Kylee Sanchez
Naga Sai Sagarika Chidella
Mya Stiffler Lauren Whightsil
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Reach out today to learn more about the California Milk Advisory Board’s promotional support. Mike Levy | CMAB Consultant, West mlevy@cmab.net | 925-286-1036
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(91 6) 605 - 6500
A DVERTISER IND EX PAGE
COMPANY
PHONE
WEBSITE
9, 45
Albertsons, LLC
(925) 467-3000
60
Alkaline88, LLC
(951) 704-0696
61
Anheuser-Busch InBev
(714) 693-7584
anheuser-busch.com
16
Bimbo Bakeries USA
(916) 456-3863
bimbobakeriesusa.com
31, 61
C&S Wholesale Grocers
(916) 373-4396
cswg.com
55
California Lottery
(916) 822-8199
calottery.com
46
Cacique, Inc.
(800) 521-6987
rcashen@caciqueinc.com
caciqueinc.com
70
California Milk Advisory Board
(209) 883-6455
csoares@cmab.net
RealCaliforniaMilk.com
BC
Certified Federal Credit Union
(909) 261-4065
dsimpson@certifiedfed.com
certifiedfed.com
11
CGAEF – WHPT
(916) 448-3545
foundation@cagrocers.com
cgaef.org
60
Chobani
(212) 364-3947
70
CMB Design Partners
(916) 605-6500
studio@cmbdesign.com
cmbdesign.com
51
Flagship LMS
(800) 767-1873
denisekenney@flagshiplms.com
flagshiplms.com
40
Gelson’s Market
(818) 906-5700
gelsons.com
41
Grocery Outlet
(510) 845-1999
groceroutlet.com
25
KeHE
(415) 260-3310
26
Kellogg
(269) 961-2000
kelloggs.com
21
Kimberly-Clark
(888) 525-8388
kimberly-clark.com
26
Molson Coors
(414) 931-2000
molsoncoors.com
19
Moss Adams
(310) 481-1206
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mossadams.com
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Nestle Purina PetCare
(314) 982-1000
joe.toscano@nestle.purina.com
purina.com
47
North State Grocery, Inc.
(530) 347-4621
shopholidaymarket.com
47
Northgate Gonzales
(714) 778-3784
northgatemarkets.com
36
NuCal Foods
(209) 254-2206
10, 59
PepsiCo
(949) 330-5804
pepsico.com
34
Procter & Gamble
(925) 867-4950
pg.com
2, 27
Ralphs/Food 4 Less
(310) 884-9000
ralphs.com
33
Reyes Coca-Cola/ Coca-Cola North America
(949) 250-5961
reyesccb.com
5, 59
RMS
(818) 817-6712
69
Stater Bros. Markets
(909) 733-5000
staterbros.com
65
The Hershey Company
(717) 534-3660
hersheys.com
23
TruGrocer Federal Credit Union
(208) 385-5273
14, 68
Tyson Foods, Inc.
(479) 290-4000
tyson.com
37
UNFI
(323) 264-5200
unfi.com
albertsons.com gritter@alkaline88.com
alkaline88.com
chobani.com
contactus@kehe.com
custsvc@nucalfoods.com
mdodson@retailms.net
cdemaray@trugrocer.com
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MOMMY BLOGGER
Shopping to S upport my Community K I M B ER LY R A E M I L L ER WR ITER , ACTR ES S
While I can’t control when or if life will ever return to a sense of normal, I can control the memories I create during this time. While I could list a myriad of ways in which 2020 broke me, this year has made me a better version of myself in at least one way. I am a much more thoughtful and deliberate person than I was almost a year ago.
backpack favorites. I cook every single meal my family eats from scratch. I’m more conscious about the foods I’m feeding them now.
Our lack of control over even our most basic needs made pandemic life feel even more impressive – try telling a toddler that they have to eat tilapia because it’s the only source of protein you could find.
I think about what I do and say and buy in an earnestness that I just never needed to before. I think about which businesses I’m supporting with my patronage, and which I’m not. I buy what we need, but very few extras because I know that our financial security is a luxury that may not last. And so, when I pack up for a trip to the store, I know that it is with a finite amount of money that I’m contributing to which businesses in my community will survive an impending recession and which won’t. It’s a responsibility I don’t take lightly, but there are very few responsibilities that are taken lightly these days. Now that I work full-time from home while simultaneously acting as our family’s primary source of childcare and part-time teacher, I am also more deliberate about mealtime. Breakfasts are no longer whatever I can hand to people on the way out the door in the morning. Lunches aren’t a mishmash of
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A few months ago, I definitely didn’t feel that way – absolutely nothing felt deliberate. In March and April, I was buying my groceries through a restaurant distributor – hitting “add to cart” on whatever was in stock, sending my husband into stores to scavenge empty shelves for whatever we could cobble meals out of, and wiping down all our food with bleach.
Not only am I safeguarding my family’s health in every way I know how, but meals are the only time I get to unplug during the day, the only time I don’t feel like I’m failing at everything. The only time I get to sit with my kids and just enjoy them between conference calls and virtual learning, dishes and bath time.
But thankfully, our stores are fully stocked again, and while I can’t control when or if life iStock will ever return to a sense of normal, I can control the memories I create during this time, and I can do my part to support the community that supports us. ■
ADVERTORIAL PET CARE
SUPPLIER PERSPECTIVES
THE IMPORTANCE OF PUPPY AND KITTEN How Winning at the Start Can Unlock a Growing Sales Opportunity
With so many people spending more time at home, pet adoption and fostering have increased dramatically. In fact, during the first month of most stay-at-home orders, Petfinder saw adoption inquiries jump 122 percent between March 15 and April 15 compared to the four weeks prior. A spike in adoptions indicates a potential rise in the number of pets in households and possibly an increase of households to the pet category. With roughly 4 out of 5 dog and cat acquisitions being puppies and kittens, puppy and kitten formulas already held great potential for growth prior to the pandemic with a 1.8 percent annual growth rate for the puppy and kitten category. The spike in adoptions and fostering could accelerate that growth rate. The first purchase with puppy and kitten is a lucrative one as it typically includes leashes, bowls and toys, but the interesting thing is that consumers tend to stay with the store for future pet purchases. If retailers can win with puppy and kitten, they can expect to see an increase in channel loyalty and additional sales in areas outside of pet as consumers seek additional cleaning items and to replace broken items. New pet parents should know that just because puppies and kittens will put almost anything in their mouths, it doesn’t mean they should. Like their human counterparts, young dogs and cats have specific nutrition requirements to support their rapid growth and development. Puppy and kitten bodies are fastgrowing, but unlike babies, they pack all their growth into a few short years. Puppies and kittens need higher level of calories and protein, DHA, antioxidants and bioactive substances for the first one to two years.
There are multiple ways to capitalize on the power of puppy and kitten. Below are some strategies retailers can leverage to capture the puppy and kitten households.
consumers know you are in the pet business and can increase loyalty, basket ring and category profit.
• Educate. According to a 2017 Nielsen Homescan survey, households that acquire a • At Shelf. Shelve kitten and puppy puppy typically transition from formulas with their parent puppy food to an adult formula brand and ensure an optimal 5-6 months after acquisition, assortment of SKUs. which is too early. Utilize • Timing. New adoptions happen signage to educate on the year-round, but there is a spike benefits of feeding puppy and for puppies and kittens through kitten for the first one to two the summer months, typically years before transitioning to May - August, and another adult formulas. spike in puppy adoptions • Cross-promote. Puppy and in December. Retailers can kitten owners won’t just need capitalize on the timely bump food for their new little ones. with promotions and displays. Keep those customers in your These promotions and displays store by cross-promoting the can stimulate additional other cat and dog supplies purchases including profitable you have including beds, toys items like bowls, leashes, toys and bowls. and litter for the kittens. This type of merchandising lets your
Purina has a Puppy Event running from now through the end of the year to educate consumers on the benefits of feeding puppy food. Most puppy owners believe puppies have unique needs (92 percent) but only 25 percent feed puppy food exclusively. Puppy owners don’t realize how important it is to feed puppy food to their pets. Purina will be offering merchandising vehicles, digital coupons, educational info, and other assets to support the event. Reach out to your local Purina sales associate to customize a plan that is right for your store.
Purina trademarks are owned by Société des Produits Nestlé S.A.
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