New Jersey Grocer, Issue 4, 2016

New Jersey

Are you a hunter or a farmer?

PAGE 26

Why collaboration matters PAGE 32

2016, DECEMBER

NEW JERSEY FOOD COUNCIL

supermarkets battle for share of stomach PAGE 38

RESHAPING RETAIL

AR YO CONTENTS | DECEMBER

COLUMNS

FEATURES

HUN FAR

President’s Message Remembering Barbara McConnell. . . . . . 6 Government Relations What Presidential Election?. . . . . . . . . . . . . 8

26

Transportation Trust Fund Deal Finally Reached. . . . . . . . . . . . . . . . . . 10

Are You a Hunter or a Farmer?

Are you a hunter or a farmer? In this fast paced world of retailing, it may be the difference between success and failure. A noted author and researcher explains how being better and faster may keep your company doors open.

Inside the Beltway Looking Ahead. . . . . . . . . . . . . . . . . . . . . . . . 12

Washington Report Good News For Independents.. . . . . . . . . 15

PRESENTING Trust

supermarkets battle for

Listening

32

Growth

Viewpoint DIY Earthquakes. . . . . . . . . . . . . . . . . . . . . . 22

Alignment

SHARE STOMACH of

Why Collaboration Matters

Working more closely with your trading partners builds the kind of relationships will lead to better sales, better service and better overall results, reports one of the country’s largest research firms. So what’s the problem?

Do you have the instinc adapting to whatever env a farmer, toiling in the f year-after-year and

DEPARTMENTS

NJFC News.. . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Outside the Box. . . . . . . . . . . . . . . . . . . . . . . 24

38 Supermarkets Battle for Share of Stomach

15 Minutes With…

Tom Stenzel United Fresh Produce Assn.. . . . . . . . . . . 42

Competition has always been a part of the retail food business but the battle for share of stomach has never been more intense, according to the Food Institute.

COMPETITION

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NEW JERS EY GRO CER | 3

NJFC | BOARD OF DIRECTORS

officers

DIRECTORS

new jersey food council

Chair Judy Spires Kings Food Markets

Associate Vice Chair Joseph H. McCarthy Bimbo Bakeries USA

Secretary Michael Murphy QuickChek Corporation

Vice Chair Richard J. Saker Saker ShopRites

Treasurer Michael Rothwell Pennington Quality Market

President & CEO Linda M. Doherty New Jersey Food Council

Dan Croce Acme Markets

Peter Rojek Fairway Market

James J. McCaffrey III McCaffrey’s Markets

Jason Ravitz Ravitz Family Markets

Debbie Pregiato Advantage Solutions

Phil Scaduto Food Circus

Michael Biase Mission Foods

Frank Mastrangelo Supervalu, Eastern Region

Ken Weingartner C&S Wholesale Grocers

Andrew Kent Glass Gardens

John Wachter Murphy’s Markets

Rebecca Peifer Unilever

Kelly Johnston Campbell Soup Company

Luis Tejada Goya Foods

Jody Avalione Nestle USA

William Sumas Village Supermarkets

Eva Kohn CBA Industries

Joseph F. Pagano Inserra Supermarkets

David Maniaci Nicholas Markets

Richard Wood Wawa

Michael Sullivan Coca-Cola Refreshments USA

Lisa Angeles Kraft Heinz Company

Leonard J. Sitar ShopRite of Carteret

Joe Sofia Wegmans Food Markets

Rafael Cuellar Cuellar Family ShopRites

Howard Kent Krasdale Foods

Colleen Meares Stop & Shop Supermarkets

Christina Minardi Whole Foods Market

President & CEO Linda M. Doherty

New Jersey Grocer Editor is the official publication of the Gary La Spisa II New Jersey Food Council. glaspisa@njfoodcouncil.com

Asst. V.P. for Govt. Affairs Mary Ellen Peppard Director of Public Affairs Gary La Spisa, II Executive Assistant Office Manager Sandy Malecki Meeting Planner Kori Little-Buro Financial Manager Christine Higgins

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30 West Lafayette St. Trenton, NJ 08608 (609) 392-8899 (609) 396-6571 Fax www.njfoodcouncil.com For association members, subscription is included in membership dues. © 2016 New Jersey Food Council

For advertising information contact: Bill Kaprelian bkaprelian@cagrocers.com

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PRESIDENT’S MESSAGE

remembering barbara mcconnell

L I N DA DO H ER T Y PR E S IDE N T N EW JER S EY FOOD COUN CIL

Barbara W. McConnell, former President of the New Jersey Food Council, passed away on October 21, as she was recovering from hip surgery. She was 81.

Barbara McConnell was a trailblazer who was admired for her work in the food industry and as a stateswoman. Her grasp of the issues, her quick wit and southern charm made her a dynamic, spirited and well respected leader in Trenton and around the country.

She was a fierce advocate for the food industry and an effective leader for the Food Council as she served as President of NJFC from 1982 to 1991. Her legacy has helped guide NJFC to the success we realize today.

A passionate leader, she was credited with winning more than 100 legislative and regulatory battles of critical importance to the grocery industry including defeat of the bottle bill, enactment of the original Clean Communities Act and an industry pioneer at the forefront of the recycling movement.

Barbara had a charismatic personality at NJFC and under her tenure, the association grew in membership, resources, services and credibility.

Her knowledge of the food industry, association management skills, public policy expertise, and her wit and wisdom 6 | NE W J E R S E Y G R OC E R

earned her not only our deepest thanks and appreciation, but also the loyalty and friendship of the membership.

Barbara was so effective, the Food Marketing Institute honored her with their first recognition for Association Executives, the Donald H. MacManus Award.

When Barbara left the Food Council in 1991, Governor Florio named her the first woman to serve as the commissioner of the state Department of Commerce and Economic Development.

Barbara was born in Murfreesboro, Tenn., and was once named “Miss Overton County” and was a contestant in the Miss Tennessee Beauty Pageant. A graduate of Tennessee Tech, Barbara McConnell started her career in Washington, D. C., as one of the first two female legislative assistants in the U.S. House of Representatives, working as a Staff Assistant to Congressman Joe L. Evins of Tennessee.

Barbara left the nation’s Capitol and moved to Flemington, N.J., where she lived for the past 50 years. She served as an assemblywoman representing

Hunterdon County for four years during the late seventies. She shaped public policy on litter abatement programs and she sponsored legislation that led to the Farm Winery Act of 1981 which opened the door for growth of the NJ wine industry.

As a state representative and throughout her career, she proudly fought for the rights of women and the underserved.

When Barbara left public service, she founded the McConnell Group, a consulting firm providing services to businesses in the areas of government and public affairs, management and marketing, economic development, international trade, communications and research.

She dedicated her time to the NJ Clean Communities Council, was the organization’s first true leader and served as vice president for more than a decade, retiring in January.

The Food Industry Association of Executives had been effectively managed

by Barbara for more than 15 years and her keen understanding of business management and government at all levels elevated the status of FIAE through her leadership, tenacity, hard work and friendship.

Active in community affairs, she was a former trustee of the Hunterdon Medical Center and former board member of

PRESIDENT’S MESSAGE

“Barbara was a charismatic personality at NJFC and under her tenure, the association grew in membership, resources, services and credibility.”

Women's Crisis Services in Flemington.

She was the proud recipient of the Girl Scouts of America Outstanding Woman Award.

Barbara was an inspiration and role model to me and so many. We have been overwhelmed with personal tributes of Barbara’s impact and how she touched so many lives and advanced so many

careers. Many have shared memories of her gracious ways and her unselfish style.

She was approachable, well-meaning and warm hearted. She was my biggest cheerleader, loyal friend and confidante.

Even as a Southern Belle from Tennessee, she had the fiery spirit of a Jersey Girl and our bond was undeniable.

We celebrate the life and legacy of Barbara McConnell who handled herself with grace and class and we are forever grateful for her significant impact and effectiveness as a trailblazer, mentor, advocate, stateswoman, inspiration and dear friend. Rest easy sweet Barbara, we will take it from here.

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NEW JERS EY GRO CER | 7

GOVERNMENT RELATIONS

what presidential election?

G A RY L A S PI S A DIR ECTOR OF PUBLIC AFFAIR S N E W JE R S E Y FOOD COUN CIL

New Jersey Pols Already in Full Campaign Mode for 2017 Gubernatorial and Legislative Elections.

For the last few months, as the nation was gripped by Trump versus Clinton, New Jersey’s politicos had already moved past the Presidency and focused on the 2017 Gubernatorial Election here in New Jersey.

New Jersey and Virginia are the only states in the nation which elect their Governors the year after a Presidential campaign. This is the reason that both states often see tremendous participation, and funding, from nationally recognized officials and organizations in their gubernatorial races.

I expect that 2017 will be no different.

Before we explore the impact of next year, it is important to understand the stakes that both major parties will attach to these two gubernatorial seats.

In 2016, there were 12 states selecting a new Governor, eight had been previously held by Democrats and 4 by Republicans.

Of those 12 seats, Republicans successfully captured Missouri, New Hampshire and Vermont, while losing only North Carolina, bringing their total gubernatorial advantage to 33 to 15 and Alaska remaining the only state with an independent governor.

This deep deficit will force Democrats to place great emphasis on holding the Governor’s Mansion in Virginia and capturing it here in New Jersey as they try to inch closer in the midterms where the field and climate may be more favorable.

Enter Phil Murphy, the former Goldman Sachs Executive and former Ambassador to Germany, with hopes that he will be the man to lead that charge to reclaim

“before we explore the impact of next year, it is important to understand the stakes that both major parties will attach to these two gubernatorial seats.”

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New Jersey’s Governor’s Mansion for the Democrats. The first-time candidate hopes that his charisma and business savvy will be enough to carry him over the finish line in November of 2017.

Ambassador Murphy was the first person to formally declare his candidacy, in large part because he can self-fund his campaign and thus he is not in need of the additional time as an "un-official candidate" to raise funds for a political action committee.

Mr. Murphy has already vanquished three of his expected Democratic challengers, despite the Primary Election being just 7 months away. Long-rumored candidates Jersey City Mayor Steve Fulop, Senate President Steven Sweeney and Senator Raymond Lesniak have all announced that they will forgo a campaign for Governor, run for reelection to their respective offices and support Ambassador Murphy.

At this time, the only rumored candidate who has not announced a decision to drop out is Assemblyman John Wisniewski.

However, it is not just the Democrats who are already working towards 2017. Several weeks ago, Lieutenant Governor Kim Guadagno announced the formation of a Political Action Committee which is largely understood

GOVERNMENT RELATIONS

“Ultimately, I expect that 2017 may prove to be one of the most expensive and intense elections New Jersey has ever seen by the time the polls close 11 months from now.�

to be her first step towards an eventual announcement as a candidate for Governor.

More recently, Republican Assemblyman Jack Ciattarelli formally announced his candidacy for the Republican Nomination in an event at a local high school. The moderate Republican has a very strong record on business issues and other areas important to the Food Council and earned one of the 2016 Legislator of the Year awards from the Food Council Committee for Good Government.

2017 GUBERNATORIAL CANDIDATES

Ja c k Cia tta relli

Phil M u rp hy

Asse m b lym a n (R -So m e r v ille )

Fo r m e r U. S. Am b a ssa d o r to Ge r m a ny

Both Republican candidates would face an uphill battle in a General Election in keeping up with the spending of Phil Murphy, who is already running campaign ads and can likely expect a significant investment from national organizations.

competitive, there will still be several races to watch.

run for Governor that district could see millions of dollars in activity.

It is unclear how invested the Republican Governors Association will be in a year where everyone expects Republicans to lose the seat in New Jersey. They may choose to invest their money in Virginia which is considered more winnable.

In 2015, Democrats captured two General Assembly seats in District 11 and one each in Districts 1 and 16. All of these races were won on slim margins and with the assistance of millions of dollars from a PAC associated with the NJEA.

Expect a significant majority of money to be spent in Districts 1, 2, 11 and 16. There may also be focus placed on District 38 which is one of the few other competitive districts in the state.

New Jerseyans will also be asked to select the occupants for all 120 seats in both houses of the Legislature. While the balance of power is unlikely to change, largely due to a legislative map which makes a majority of districts far from

In 2017, we expect extremely significant challenges to the Republican Senators in Districts 11 and 16 and with Assemblyman Ciattarelli choosing to vacate his 16th District Assembly seat and

Ultimately, I expect that 2017 may prove to be one of the most expensive and intense elections New Jersey has ever seen by the time the polls close 11 months from now. We are certainly off to a fast start.

NEW JERS EY GRO CER | 9

GOVERNMENT RELATIONS

Transportation Trust Fund Deal Fi nally Reached M A RY EL L EN PEPPA R D N JFC AS S IS TAN T V ICE PR E S IDENT OF GOV ER N MEN T R ELATION S

After months of negotiations the compromise package includes phase out of estate tax.

For many months the focus in Trenton has been on negotiations over a Transportation Trust Fund (TTF) and tax reform bill. Many different provisions were on the table, and it was a contentious debate as many Democrats objected to the tax reform provisions, and many Republicans objected to an increase in the gas tax.

Governor Christie was adamant that any plan must include “tax fairness,” and he pushed hard for a sales tax decrease.

Finally, early in October, the Governor and legislative leaders announced they had reached a deal on a compromise bill package, and within two weeks the Legislature passed the bills, and the Governor signed them into law.

The bill package provides $16 billion in revenue over an 8-year period to fund the TTF, paid for by a 23 cent gas tax increase, effective November 1, 2016. NJFC advocated for an extended implementation period to smooth the transition and ensure that fuel merchants have the necessary time to upgrade their systems. We are pleased that the new law allows for just over a two week

10 | NE W J E R S E Y G R OC E R

implementation period, as well as a phase in of the diesel tax increase.

While we would have preferred a smaller gas tax increase, overall we recognize the need for a reliable transportation system to safely and efficiently move food products and supplies, many of which are perishable.

Addressing the transportation funding shortfall is critically important as the current situation impacts the safety and economic security of all New Jersey residents and businesses.

Further, the package includes significant tax reform provisions, including a phase out of the estate tax, which NJFC has been advocating for years. The bill phases out the estate tax over two years, first replacing the current $675,000 threshold with a $2.0 million threshold after January 1, 2017, and then eliminating the estate tax altogether after January 1, 2018.

This is welcome relief to our many family owned and operated member companies.

New Jersey is currently an outlier as one of only two states with both an estate and an inheritance tax. New Jersey also has the lowest exemption threshold of

any state. The estate tax discourages entrepreneurship and significantly increases costs on family businesses, both directly through the tax and also through tax compliance costs. We know that unfortunately New Jersey is a top state for outmigration.

New Jersey residents are moving to states with more favorable tax climates, and they consider New Jersey’s estate tax in their calculations when making business decisions. This legislation is a significant step toward changing that dynamic.

The package phases in an increase in the exemption for retirement income, which would reduce the current incentive for New Jersey residents to leave the state when they retire. Increasing the threshold for taxing retirement income makes us more competitive and keeps this income and economic activity in New Jersey.

This change would also reduce our outmigration problem.

We are also pleased that this legislation includes an increase in the Earned Income Tax Credit (EITC), which would reduce poverty and food insecurity among low income New Jersey residents. The EITC provides assistance to low income workers in proportion to their household need, and increases their overall income, making them less reliant on wages.

GOVERNMENT RELATIONS

The legislation includes an income tax exemption for veterans and a small sales tax cut. Under the plan, the sales tax will decrease from 7 to 6.875 percent on January 1, 2017, and further decrease from 6.875 to 6.625 percent on January 1, 2018.

Now that this situation is resolved, Trenton policymakers can move forward on other priority policy issues.

Government Relations update Proposal to Increase the Minimum Wage Another critically important issue for NJFC is the potential legislative proposal to raise the minimum wage to $15 per hour though a ballot initiative. We have been meeting with legislators to convey our opposition and explain the detrimental consequences of raising the wage so significantly.

In our discussions, we are utilizing our new economic study, which shows that increasing the wage to $15 results in job loss, reduced work hours, and price increases which fall disproportionately on seniors.

Overall, legislators have been receptive to the study results, and it appears that the Legislature is giving consideration to including certain exemptions in the proposed bill that would soften the impact on our industry. Assuming legislative leaders cannot secure a supermajority, the Legislature would have to pass a minimum wage bill by a simple majority in two consecutive years in order to get it on the ballot.

“Addressing the transportation funding shortfall is critically important as the current situation impacts the safety and economic security of all New Jersey residents and businessess.”

At this time, there has been no official action taken by the Legislature to advance a minimum wage ballot initiative, however we will continue our meetings and educational efforts on this issue.

electronic letter writing tools for members and the business community to utilize to convey their opposition to rescinding the agreement, and our campaign collectively generated over 10,000 letters to the Governor’s Office and legislative leaders.

Governor Reinstates Reciprocal Agreement

With the TTF issue finally resolved, the Legislature and Governor can turn their attention to the many other contentious policy issues that were put on the back burner for the last several months.

After months of advocacy, we are very appreciative that the Governor decided to reinstate New Jersey’s reciprocal income tax agreement with Pennsylvania. This longstanding agreement allows New Jersey and Pennsylvania residents to pay income tax to the state in which they reside, not in which they work.

We expect that Legislators will push more progressive policies as they gear up for the 2017 Legislative and Gubernatorial Elections.

Since New Jersey’s income tax is very progressive while Pennsylvania has a flat rate, Governor Christie is interested in collecting income tax from higher income Pennsylvania residents who currently pay a lower rate in Pennsylvania than they would pay in New Jersey. Since the Governor’s September announcement that he planned to end this agreement, we heard from a number of members that this decision would have significant negative impacts on job attraction and retention, and would result in increased tax liability for employees of many NJFC member companies.

NJFC and members had numerous meetings and discussions with the Governor’s Office and legislative leadership on this issue. Through our BIPAC program, NJFC prepared NEW JERS EY GRO CER | 11

INSIDE THE BELTWAY

Looking ahead

J EN N I F ER H ATC H ER S E N IOR V ICE PR E S IDE N T GOV ER N MEN T AN D PUBLIC AFFAIRS FOOD MAR K E TIN G IN S T ITUTE

The elections provide a great opportunity to build relationships with your elected officials.

With the negativity of this election cycle occupying the Internet, airwaves, and even the streets – it’s easy to move to complacency.

Instead of complacency, now is the perfect time to develop and build relationships with the winners of November’s General Election in order to get them to understand your perspective on votes they will take in the city council, county commission, state legislature or Congress.

3

Send the elected official and the staff member who accompanies them a follow-up note, thanking them for the visit and reiterating those items you discussed at the store.

1 2

Schedule an introductory meeting with the elected official in your store, or distribution center. Show them something new – a new department, a new product, a new section, or a new technology. Discuss issues they might have the opportunity to vote on, or influence with their position (if you need ideas, we are happy to provide them). Introduce them to your associates – especially the store manager. Take photos!

12 | NE W J E R S E Y G R OC E R

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When you have an “ask,” make sure it’s clear. If you would like them to co-sponsor legislation, sign a letter, or vote in favor or against something, make sure it’s clear and has been communicated to them and their office both in writing and verbally. If you are sending a letter or email, make sure the “ask” or request is in the first sentence.

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Here are som helpful tips to developing a strong relationship with your elected officials: Send a note congratulating the official on their election or reelection with a brief paragraph about your business.

Then when CGA or FMI lobbyists reach out to officials in Washington, or Sacramento, it allows us to expand your reach on an ongoing basis.

4

iStock

Communicate with the official and the staffer every quarter. Let them know about a new department, remodel, new jobs you have created or a new product or a policy issue. Also, ask what issues they are most interested in.

5

Send materials created by your state or national association. This demonstrates the direct link between your business and your state or national association.

After there is a vote or hearing on an issue that impacts your business, contact the elected official and let them know how much you appreciate their understanding of your business. Or, If they didn’t vote your way, let them know you would like to discuss why you, your associates and your customers are on the other side of the issue. Maybe you can get them next time!

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Always stay positive, even if the vote did not go your way. ■

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NEW JERS EY GRO CER | 13

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WASHINGTON REPORT

Good News For Independents

PET ER L A R K I N PR E S IDE N T, CEO N AT ION AL GR OCER S AS S OCIATIO N

The grocery business is not for the faint of heart, due in large part to low profit margins and shifting consumer preferences.

These days, the traditional supermarket is undergoing profound change, while also maintaining its place at the heart of the food shopping experience for the vast majority of American consumers.

And while the entire food industry is looking to stay ahead of the consumer trend curve, independent supermarket operators are continuing to innovate to meet shifting demands.

Despite a tough marketplace, independents grew same-store sales by 2.1 percent – ahead of annualized inflation (1.2%) and well ahead of the prior year’s 1.5 percent gains, according to the results of NGA’s annual “Independent Grocers Financial Survey.”

This study, compiled in conjunction with our partner FMS Solutions Holdings LLC, analyzed the financial and operational performance of independent supermarket operators in fiscal year 2015.

In addition to benchmarks for financial performance and business strategies, the report provided an in-depth look at the economic, political, and competitive landscape in which these retailers operate.

Survey respondents represent a wide array of companies throughout the United States and Canada.

Survey “profit leaders” (the top 25% of independents that exceeded three percent in net profits before taxes) outperformed publicly-traded companies by 4.09 percent to 3.52 percent in average net profit before taxes.

Interestingly, for the first time in the history of this report, supercenters were not listed as independents top competitive threat, but instead were replaced by other conventional supermarkets.

In a fiercely competitive industry, independents are continuing to differentiate themselves in the marketplace and are doing so with much success. Whether it’s diving into e-commerce platforms, enhancing customer service, or increasing focus on the fresh/perishable department, independents are employing tactics to not only meet consumer demand, but become the store of choice. ■ At the NGA Show, Feb. 12-15, 2017, there will be ample opportunities, including a financial benchmarking workshop, to learn how best in class retailers are able to increase their net profits during challenging times. For more information on the 2017 NGA Show, visit www.theNGAshow.com.

Additional Challenges and Opportunities: •

Total expenses increased in 2015, driven mainly by labor and benefit costs, which stood above 14 percent of sales, making it the sixth consecutive year the average percentage was above 14 percent.

•

Fiscal year 2015 marked another year of rising healthcare costs as operators saw healthcare costs grow 10.2 percent.

•

With the rising usage of debit and credit cards among shoppers, interchange fees were listed within the top five concerns for independent supermarket operators.

•

Independents adapted their advertising allocation to marketplace demands by shifting funds from printed materials to digital marketing.

•

Profit leaders focused on operational fundamentals, including keeping inventory turns high and implementing programs to track and reduce perishable and theft-related shrink.

NEW JERS EY GRO CER | 15

NJFC NEWS NJF C H OS T S INSIGH T F UL NORTHEAST REGI ONAL L O S S P R E VE N T ION C ONF E R E NCE The New Jersey Food Council (NJFC) joined the New Jersey Retail Merchants Association (NJRMA) in hosting the widely-attended Northeast Regional Loss Prevention Conference and Exhibition at Forsgate Country Club in Monroe Township on October 26.

the retail industry and law enforcement professionals to help thwart crime and reduce risk.

“New Jersey’s retail and food industry is fortunate to have the support of dedicated law enforcement professionals at the local, state, and federal level assisting us in our efforts to reduce loss and prevent crime,” said Linda Doherty, NJFC President.

“This year’s conference hit on some very important topics for our industry, ranging from the threat of terrorism to organized retail theft, and how we can work with law enforcement to reduce risk, increase safety, and prevent crime," she added.”

A packe d h o u s e a t t e n d e d th e 2 0 1 6 Loss P reventi o n C o n f e re n c e .

The event featured keynote speakers from the retail industry and law enforcement, including Assistant United States Attorney Zach Intrater, Deputy Chief of the Economics Crimes Section of the Criminal Division.

A key focus of this year’s conference was the importance of partnerships between

Featured topics of the conference included a session on evolving threats in retail security by James D’Arcy, Vice President of Cambridge Security. D’Arcy spoke about ways in which retail establishments can protect themselves from becoming “soft targets” of terrorist attacks.

Additionally, Robert Anzilotti, Chief of Detectives at the Bergen County Prosecutors Office, presented an Organized Retail Crime case study on

Loss P revention Conference a t t endees had the opportunity to view the n ew es t i n ret ai l security technology.

“Operation Jersey Boyz,” a high-profile organized crime ring that was brought to justice through the cooperation of retail executives with law enforcement officers.

Other sessions included “The Impact of the Heroin Crisis on Organized Retail Theft” presented by Chief Chris Leusner, Middletown Police Dept. and Vice President of New Jersey Chiefs of Police Association, and “Working with Local Law Enforcement on Retail Fraud Cases” presented by Lt. Zsakhiem James, 2nd District Commander, Camden County Police Dept.

NJFC HONORS INDUSTRY LOSS PREVENTION LEADER AND LAW ENFORCEMENT At the annual Northeast Regional Loss Prevention Conference, NJFC recently honored food industry executives and law enforcement professionals for their achievements in the field of loss prevention.

Enforcement Achievement Award: Kate Ingram from the New Jersey State Police Dept.; Detective Mike Coffey from the Piscataway Police Department; and Detective Mark Bajada from the Toms River Police Department.

Ed Rohena of Stop & Shop Supermarkets received the 2016 Loss Prevention Professional Award, and three law enforcement officers received the 2016 Retail Law

“The annual Loss Prevention Professional Award recognizes Ed Rohena, Asset Protection Manager with Stop & Stop Supermarkets as a loss prevention executive who has advanced the mission

16 | NE W J E R S E Y G R OC E R

of loss prevention and has offered significant contributions to protect and promote retail security issues,” said Doherty.

“With more than two decades of experience, Ed has worked tirelessly with NJFC to promote retail security and loss prevention throughout the food industry, so it is only fitting that we honor his leadership and achievements at this conference.”

NJFC NEWS

NJFC NEWS

NJ F O O D C OU NC IL GR ADUAT E S 2016 LEADERSHI P DEVELOPMENT C LA SS In September, the New Jersey Food Council (NJFC) announced the graduation of its 2016 Leadership Development Class at a reception hosted by Wegmans Food Markets in Woodbridge, N.J. Launched in 2014, the Food Council Leadership Development Program provides training for future leaders who have a passion for working in the food industry, possess an interest in the dynamics and trends of government, and want to make a difference in the direction of the industry.

Featuring speakers from state government and the food industry, the program combines elements of mentoring, organizational education, leadership training, policy trends, and guided experiences. This year, Scott Coffina, Senior Deputy Chief Counsel to the Governor’s Office, and Al Murray, New Jersey Assistant Secretary Agriculture, were keynote speakers for the program.

Each year, NJFC member companies have the ability to nominate potential

candidates for participation in the program. NJFC’s Leadership Development Team then selects those individuals who have demonstrated a commitment to the Council and who have great potential for growth and advancement in the food distribution business.

“We really enjoyed working with this year’s class of rising stars in the food industry,” said NJFC President Linda Doherty. “One of the main goals of this program is to educate future leaders on public policy areas that impact their business and the food industry’s bottom line. We were fortunate to have key policy leaders from the Governor’s Office and the Department of Agriculture work with this group and explain the inner-workings of state government and the importance of advocacy.”

“The training and mentoring they received throughout this program will not only help advance their careers, but also ensure the food industry continues to flourish,” Doherty continued. “We applaud the group for their hard work and

commitment to the program and we look forward to their continued success.”

NJFC recently announced its 2017 incoming Leadership Development Class.

David Benavente Acme Markets Jamie Colling-Bello Wegmans Food Markets Jonathan D'Orsi ShopRite of Carteret Whitley Harbold Wawa, Inc. Lawrence Inserra III Inserra Supermarkets Lissa Rosendale Acme Markets Anthony Tomanelli Advantage Solutions Vincent Williams Bimbo Bakeries USA

PROFESSIONALS “Finally, I would like to extend my sincere congratulations and gratitude to the three members of law enforcement honored with the 2016 Retail Law Enforcement Achievement Award,” Doherty continued.

“Their dedication to partnering with the retail community to combat crime has been critical to our efforts to reduce loss and theft, especially in dealing with organized retail crime.”

Con fe re n ce Cha ir Lou Mola of Wa w a , Det. Mike Coffey of the P isca ta w a y P D, E d R o hena of S top & Shop Super ma rkets, Investiga tor Ka te Ingra m of the NJ Sta te P olice , Det . Mar k B ajad a of the Toms River P D a nd Conference Co-Cha ir Ma rk Morro of Sta ples.

NEW JERS EY GRO CER | 17

NJFC NEWS F O OD I N D U ST RY C ONT INU E S STRONG COMMI TMENT TO ADVOCAC Y W I TH S U C C E SSF UL GOOD GOVERNMENT BREAKFAST With over 200 food industry executives, business leaders and legislators in attendance, the Food Council Committee for Good Government (FCCfGG) hosted its 43rd Annual Good Government Breakfast on September 28 at Forsgate Country Club in Monroe Township, N.J..

“We’re one of the largest industries in New Jersey, and so it is critically important that we have these partnerships with local, state and federal government officials,” Doherty said.

national trade associations and business groups, including the Food Marketing Association and the National Retail Federation, which advocate on behalf of the retail food industry.

Recognizing leaders within the food industry, FCCfGG presented Tom Cormier of Ahold USA with the 2016 Good Government Award. Presented annually to an industry leader who demonstrates excellence in public affairs advocacy, the Good Government Award is the most prestigious public policy recognition bestowed on a New Jersey food industry member.

The political action arm of the New Jersey Food Council (NJFC), FCCfGG honored Senator Jeff Van Drew (D-1) and Assemblyman Jack Ciattarelli (R-16) as Legislators of the Year for their efforts in support of the New Jersey food industry.

“Tom regularly volunteers his time, expertise and experience with numerous issues facing our industry.

He frequently travels to meetings all over the state to share that experience directly with legislators and provide support for our policy efforts,” Doherty said. “Tom uniquely understands the impact that advocacy and political action have in fostering good government policies that support the food industry.”

P hi l Sca d u t o o f F o o d C i rc u s, J ame s Hasle tt of B imb o B aker i es an d An t o n i o Ac o s ta of Kin g s F ood M ark e ts

Awardees included Tom Cormier of Ahold USA, Senator Jeff Van Drew (D-1), Assemblyman Jack Ciattarelli (R-16), and New Jersey Department of Health Commissioner Cathleen Bennett.

“This breakfast is a celebration of the good government process and our commitment to working with government officials and legislators to develop sound public policy,” announced FCCfGG Chairman Phil Scaduto of Food Circus Foodtown, who welcomed attendees with opening remarks.

Representing businesses that collectively employ more than 200,000 New Jerseyans, NJFC President and CEO Linda Doherty highlighted the importance of advocacy and government partnerships in order to help grow the industry.

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Cormier has 33 years of experience in the food retail industry and currently serves as Director of Government Affairs for Ahold USA. He is active with a number of state and

“Senator Van Drew and Assemblyman Ciattarelli have both been strong advocates for the food industry in Trenton, supporting policies that help grow our businesses while opposing harmful tax increases,” Doherty told those in attendance. “Now more than ever, it is extremely critical that we have strong allies on both sides of the aisle like Jeff and Jack, ensuring the voice of the food industry is heard in Trenton.”

Senator Jeff Van Drew is in his third term representing the first Legislative District which includes Atlantic, Cape May and

For mer NJFC Cha ir ma n Joel P erlmutter of P erlma r t ; Jo e Sher i dan of Wa kefer n Food Corpora tion; a nd La w rence Inser r a, I I I , and La rry Inserra , Jr., of Inserra Shoprites

NJFC NEWS

NJFC NEWS

Cumberland Counties in the New Jersey State Senate.

Over the last three years, Senator Van Drew has boasted the top legislative score of any New Jersey Democrat on issues important to our industry, according to FCCfGG’s internal scorecard.

Assemblyman Jack Ciattarelli was elected to represent the 16th Legislative District in the General Assembly in a district that includes towns in Hunterdon, Mercer, Middlesex and Somerset Counties in 2011.

Since he first entered the Legislature, Assemblyman Ciattarelli has been an ally of the food industry, sponsoring multiple bills supported by the Food Council and accumulating one of the highest overall legislator scores on the annual FCCfGG internal scorecard.

Additionally, New Jersey Department of Health Commissioner Cathleen Bennett was presented with the Thomas W. Kelly Government Service Award.

“We’re pleased to recognize Commissioner Bennett with the 2016 Thomas W. Kelly Government Service Award,” said Doherty. “Her insight into working with food retailers to further support WIC clients has been exceptional.

We’re grateful to the Commissioner for her leadership, accessibility and understanding of the important role food stores play in keeping New Jersey communities healthy.”

year’s event,” Doherty concluded. “This breakfast is always a great opportunity for food industry executives to talk with legislators on both sides of the aisle about the issues that matter most to their businesses. We look forward to continuing to build strong relationships with our elected officials in the months and years to come.”

Cathleen Bennett began serving as Commissioner of the Department of Health on August 3, 2015, after serving as Director of Policy and Strategic Planning since 2010. As head of the Policy and Strategic Planning, she directed strategic public health and healthcare delivery initiatives.

“The New Jersey food industry has a strong commitment to advocacy and good government relations, as demonstrated by the outstanding attendance at this

Senat o r S a m T h o m p s o n , A c tin g Lab or Commission e r A aron Fi cht ner a n d J e n n if e r S we e n e y of Camp b e ll S ou p Comp an y

Liz Cha ce-Ma rino presents To m C o r mi er w i t h the Good Gover nment Aw a rd .

FCCfGG Cha ir ma n P hil Sca duto of FoodCircus; Secreta ry of Agri cul t ure Do ug Fisher; Aw a rd Recipient Sena tor Jeff Va n Drew ; Aw a rd Recipient , H eal t h C o mmissioner Ka thleen Bennett; Aw a rd Recipient, T homa s Cor mier o f St o p & Sho p Super ma rkets; Aw a rd Recipient, Assemblyma n Ja ck Cia tta relli; N JFC Pres i dent Linda Doherty; a nd, Acting Commissioner of La bor Aa ron Fichtner

NEW JERS EY GRO CER | 19

NJFC NEWS NE W Y E A R K IC KS OF F W IT H A N NUAL MEMBERSHI P MEETI NG JAN.2 4 N JFC T O E L E C T N E W OF F IC E RS, LT. GOVERNOR TO MAKE SPECI AL PRESEN TAT IO N Featuring a special presentation from New Jersey’s Lieutenant Governor Kim Guadagno, NJFC will kick off the new year with its annual membership meeting on Tuesday, January 24, at 5:30 pm at Forsgate Country Club in Monroe Township, NJ. NJFC members will enjoy cocktails, hors d’oeuvres and craft beer and wine tasting while networking with the state’s leading food industry executives and professionals.

At the inaugural 2017 meeting, NJFC will elect its new officers and Board of Directors, including the organization’s

new Chair, Richard J. Saker of Saker Shop Rites, who currently serves as Vice Chair.

Richard Saker is Chairman, President and CEO of Saker Holdings Corporation and Saker ShopRites, Inc., owner and operator of 30 ShopRite Supermarkets, 29 pharmacies, two liquor stores, and Dearborn Market and Garden Center.

Saker ShopRites is one of the highest average volume per store supermarket chains in the country, employing nearly 9,000 associates.

The annual meeting is an important opportunity for NJFC members to discuss the organization’s priorities and major events for the upcoming year.

It’s also a great time for members to learn about government affairs initiatives and the various NJFC Committees in which they can participate.

Rica hrd Sak er, Shak er

We hope you will ShopRi tes , Inc. join us in kicking off an exciting and successful upcoming year! To register for the event, please visit www.njfoodcouncil.com.

S O L D - O U T H OLIDAY PART Y R AI SES $ 2 0 ,000 FOR SCHOLARSHI P FUN D Boasting a record turnout, NJFC hosted its fourth annual Holiday Party at Buona Sera Restaurant in Red Bank on December 8, raising nearly $20,000 for the NJFC Educational Scholarship Foundation.

The holiday networking event was hosted by the Board of Directors and attended by

G o ver nme n t Aff a ir s C o mmitte e Ch air S uz anne D e lVe c c h i o o f Q u ic k Ch e k ; B oard Ch air Judy Sp ire s o f K in g s F o od M ark e ts an d NJ F C P res i den t L in d a D o h e r t y

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more than 165 food industry executives throughout the state.

NJFC is proud of its growing and robust scholarship program, authorized by its Board of Directors six years ago. At that time, the Board awarded three scholarships of $2,000 each to associates and family members of NJFC member companies.

NJFC P resident Linda Doherty w ith P a st and Pres ent Lea dership Development P rogra m P a rticipant s

Over the last few years, that investment has grown exponentially with the Food Council scholarships growing to $5,000, while also administering numerous scholarships on behalf of our Board Members and member companies. In 2016, NJFC and our members awarded 17 scholarships totaling $55,000.

In 2017, NJFC members have already committed to breaking that record and will award 19 scholarships totaling $61,000. If your company would like to offer a scholarship, please reach out to Sandy Malecki at njfc@njfoodcouncil.com before January 6.

Click here to view photos from the event.

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VIEWPOINT

D-I-Y EARTHQUAKES

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

I was in San Francisco recently, enjoying a bike ride near the Ferry Building, and couldn’t help but think of my first visit there back in the summer of 1973.

A lot was different back then. My hair was longer and thicker and, to be honest, a lot redder. I was thinner. And when I first stood at the end of Market Street, there was an enormous elevated highway that served to, in many ways, block the city from one of its most distinctive and differentiated features.

That elevated highway isn’t there anymore.

Much of it got knocked down after the earthquake of 1989, which allowed the city to do what it should’ve done years earlier, if only for aesthetic reasons – pull the rest of it down, and integrate the waterfront into the city’s daily life in a way that was not possible when the highway stood.

Ironically, they’re doing the same thing in Seattle these days, pulling down a viaduct that stands between the city and the waterfront and replacing it, at enormous expenses, with a tunnel.

I’d be willing to bet that they would’ve preferred it if an earthquake had come along and made the decision for them – it is a lot easier to decide to reshape a city’s

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infrastructure when an act of God gets the ball rolling. But that’s rarely how things work out.

Most of the time, if you are going to be relevant to your community and achieve your potential, you have to do it on your own. You have to be ambitious, you have to have a vision, you have to be willing to take chances, and you have to be aggressive in the pursuit of your goals.

That’s the way it works with planning the city of the future. And that’s how it works with retailing – especially these days, when competition is coming from all different directions and consumer desires and needs are shifting as new generations begin to occupy the center of the retail target.

Let’s face it. Amazon, with its desire to create a kind of ecosystem in which it is the first, best choice for practically everything, has changed the retailing landscape in fundamental ways, affecting both consumers and sellers. And now, with the acquisition of Jet.com by Walmart for $3.3 billion, there is certainly the probability that e-grocery competition

is going to get a lot tougher and a lot louder – even people who have no desire to shop for groceries online are going to be influenced by the inevitable marketing cacophony created by Amazon and Walmart.

So how should traditional grocers respond and react?

Well, to begin with, I think that companies shouldn’t think of themselves as being “traditional,” and have to do their best not to respond and react to anything.

As retailers consider the future, it seems to me that they have to reshape their stores by compiling and analyzing data about their customers, thinking creatively about how their visions need to evolve, and then, taking risks, explore new possibilities.

We already can see this happening in the marketplace.

Look at Kroger’s Main and Vine store, in Gig Harbor, Wash., just south of Seattle.

This is a store that is roughly two-thirds devoted to fresh foods, with an open floor plan that creates a far more integrated feel than many stores. Packaged grocery has been pushed over to one side of the store, and my suspicion is that they could actually close much of that off and simply make all that available online.

VIEWPOINT

Meanwhile, Kroger has acquired Roundy’s, which gives it the upmarket, fresh food-driven Mariano’s format to play with. It has made an investment in Colorado-based Lucky’s Market, which has been expanding around the country

of the considerable infrastructure and bureaucracy.

I’m sure that this was an enormous and uneasy leap of faith for the company, but I think it was the only way to really innovate. Massachusetts-based Roche

“You have to be ambitious, you have to have a vision, you have to be willing to take chances…” and describes its stores as “organic for the 99 percent.”

Kroger already has Harris Teeter in its stable of chains, and reportedly tried to acquire The Fresh Market. And, it has been rolling out its ClickList click-andcollect e-commerce service.

It seems clear that Kroger is placing lots of bets, and it is impossible to say that one of these formats or another will be the company’s future. It’s likely to be some combination of all of the above, or maybe something else completely.

On the east coast, where I live most of the year, Ahold (now Ahold Delhaize) created a skunkworks to develop a small urban format called bfresh, which has been performing well in Boston – and it has been doing so by being independent

Bros., which traditionally has been as suburban a company as one can imagine, opened a downtown Boston store that has been performing like gangbusters.

In both cases, it was a matter of going way outside their comfort zones. I think we’re going to see a lot more of that... and the retailers that do not do this will be the ones who will find themselves flirting with irrelevance and potential obsolescence.

covers facing out, reader reviews posted under each one, and with a fair amount of space devoted to the various tech products – Kindles, Echo’s, Fire TVs – that ultimately have been created to make it easier for people to buy stuff on Amazon.)

My friend said that the most interesting thing about this store is that it establishes a kind of template that could also be used to sell toys, office supplies or even groceries. In the latter case, he said, the physical store could be used to sell fresh food, with an easily accessible loading dock where people could pick up packaged groceries that have been ordered online.

All this could happen. Or, something else could... because the notion of reshaping retail isn’t a concept with an end point. It is an ongoing effort, that never will end.

It can’t.

Essentially, companies have to create their own earthquakes. ■

I was talking to a friend of mine about this subject the other day; it is someone who has been in retailing for a long time and has shaped and reshaped his share of companies. He told me that one of the most innovative retail stores he’s seen in a long time is the new Amazon Books store in Seattle…and not just because of how it sells books. (The store sells only bestsellers as rated on Amazon’s website, with book

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OUTSIDE THE BOX N EW RETAIL PERS PECTIV ES

S C DAH ZOE OL

The big prizes are sophomores, juniors and graduating seniors, who may be setting up their first apartments. Retailers like Target and Bed, Bath and Beyond are enabling students to set up graduation wish lists – like a wedding registry – and Best Buy is offering special promotions for all college kids year-round.

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If you’re wondering how to approach Generation Z, it’s time you went back to school.

While many retailers are trying to sell college-age kids laptops and mini-fridges for dorm rooms, others want to make them lifelong repeat customers.

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Remember when breakfast was the most important meal of the day – now it’s the most technologically advanced. Researchers at Columbia University have developed a 3D food printer capable of cooking and printing multiple ingredients.

Food is considered the “killer app” of 3D printing and researchers started using things like cookie dough, cheese, eggs, flour, chocolate and other materials.

The printer uses syringes to extrude food gels or pastes in specific locations depending on the software’s “recipe.” Then, an infrared cooking element cooks different parts at different times. No need to make space in the cereal aisle for a 3D printer just yet.

Target even has "college stylists" that create YouTube videos on dorm design and is using the messaging app Kik for chatbots that suggest products.

BRAND DISLOYALTY Thanks to Millennial shoppers, brand loyalty is no longer the endgame. Department store operator Lord and Taylor decided to take advantage of this group’s disloyalty by working with vendors to create “curated” spaces in stores that are flexible, easily changed and less brand specific.

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SHOPPING ISN’T WHAT IT USED TO BE– just ask department store operators who are wrestling with how to turn stores into more of a destination. The latest include pampering guests with spas, restaurants and exclusive selections. As Saks Fifth Avenue President Marc Metrick points out: They’ll shop here, eat here, get their hair done here and meet their friends here.”

The venerable Macy’s is also reemphasizing the beauty business since Amazon is expected to unseat the chain next year as the largest online clothing seller.

OUTSIDE THE BOX

BOLDLY GOING...

Turns out that problems in the hotel business aren’t that different from retailing. Just ask CitizenM, which operates hotels in New York and Europe and was looking for simple, affordable luxury and to eliminate frustrating problems like long check-in lines, hidden costs, low water pressure in the showers and even finding the right light switch. In short, everything that irritates customers.

BE GU O ES UR T!

If you want a glimpse of the future of interactive advertising and marketing, consider heading to Comic-Con International, the pop culture, comic book, sci-fi and fantasy event that draws over 130,000 visitors annually to San Diego. Aside from the usual array of costumed characters and rabid fans, this year’s show featured large scale advertising displays called “Activations” to promote shows and movies and a glimpse of the future of marketing featuring virtual reality gear. The idea is to merge the virtual and physical environment.

What the hotelier came up with was: One room type with one price; one-minute self check-in; luxury beds; rain showers and a tablet that controls everything in the room. But don’t expect to find chocolates on the pillow.

FEELING BLUE? Just when you thought there was nothing new, along comes “new blue” the hot new color for food and beverages. The new pigment called YInMn Blue (named after its key elements, Yttrium, Indium and Manganese), was discovered by researchers at Oregon State University and is now commercially available from the Shepherd Colour Company.

A Spanish company called Gik has introduced a bright blue wine that sells for about $11 a bottle. Then there’s the “Smurf Latte”, a blue coffee-free drink at the Matcha Mylkbar in Melbourne, Australia. It contains algae, lemon, ginger agave and coconut milk and supposedly tastes like seaweed.

All this for a mere $8.

iStock

If it works for Star Trek why not Deli Trek?

KILLER APP The digital world’s becoming more complex but the key is still to keep things simple.

That’s what Walgreens has done by taking advantage of the basics of mobile devices.

Now, customers can scan in a photo of the bar codes on prescription drug bottles for refilling. It actually made the process enjoyable for customers, according to Walgreens.

iStock

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Y 26 | NE W J E R S E Y G R OC E R

ARE YOU? HUNTER or FARMER

Do you have the instincts and keen eye of a hunter, adapting to whatever environment you face? Or, are you a farmer, toiling in the fields, planting the same seeds year-after-year and hoping the crop comes in?

By Len Lewis

The answer may be the difference between success and failure in the increasingly cutthroat and demanding world of retailing where consistent innovation in products and services and the ability to turn on a dime, is a business imperative now and in the future, said Jeremy Gutsche, noted author, researcher and CEO of Trendhunter.com.

Gutsche, a featured speaker at this year’s CGA Strategic Conference, emphasized that in order to know where retail is headed, it would be wise to visit the recent past.

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◀ Continued from page 27

“Let’s rewind to the 1990s when retail was about the big beige stores, sometimes in the mall, where people went to buy their widgets,” Gutsche said. “Frankly, it was pretty uninteresting and that crossed over into the grocery business. Then, in the late ‘90s everyone in the business became obsessed about finding ways to get their e-commerce operations up and running.

But at the same time, according to Gutsche, they stopped or reduced investments in stores and put all their money in the race to get online.

“When the dotcom bubble burst, everyone got burned, the economy got a little crazy for a few years and some retailers ended up ignoring the store,” he said.

By 2005 and 2006, retailers again began putting money into their stores. But when the economy hit the skids again, retailers were faced with chaos and many of them collapsed along with the market.

“It was a time when famous retailers were going out of business and those that held on became even more cautious about pumping money into their stores,” he recalls.

Meanwhile, it was during this period that marketing changed forever and cultural authenticity became an overriding issue among consumers.

“I remember someone asking an executive from Harley-Davidson what the company sells,” Gutsche said. “His answer was: ‘What we sell is to have a 43-year-old accountant ride through small towns and have people be afraid of him.’“ And while grocers were ignoring investments in stores, social media popped up and suddenly every person walking into any store started advertising their attitudes or complain publicly. It was then that every retailer in every category realized how much catching up there was to do, he said.

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“We work with and advise all kinds of retailers at Trendhunter,” Gutsche said. “It’s amazing the rapid game of catch-up everyone is playing. There’s a realization that retail is about connecting with the brand on social media, offering consumers a cultural experience and embedding authenticity into the store.”

And now, he said, we’re seeing everything in the store being transformed because of greater investments in retail – including supermarkets.

“We are entering an interesting space,” he said. “More consumers are focusing on eating well, whether it’s local foods or organics. They want to feel good about what they eat and not have all those tricky ingredients to pronounce. All of these elements are transforming the shopping experience.”

Trendhunter also closely focuses on what he called “Millennial parents” who are among the most competitive of demographic groups.

“They have a career, a home life and they are trying to win at parenting,” he said.

“As such, they want the most Instagramworthy meals for their children. They want to take pictures of these meals and send them out to friends to show they are the best mom possible and have the best vegan foods, or the best gluten-free cookie. There’s a world of chaos that’s really changing the shopping experience.”

Depending on the circumstances, these changes mean adopting the characteristics of both hunter and farmer, according to Gutsche.

“When I talk about innovation, it’s akin portfolio management,” he said. “In your portfolio there’s the trust stocks, but also some higher risk ones in order to insure you can get the gains you need. You have to look at innovation the same way.

I don’t think you have to leap in and change everything.”

In many ways, according to Gutsche, companies must continue doing what they do, but also need to be dedicated to hunting for new ideas and finding new ways to adapt.

Adapting, in part, means becoming obsessed with customers and using every method possible to understand how they are evolving. According to Gutsche, companies must develop and refine those hunter instincts including being curious, insatiable and willing to destroy in order to succeed.

“Curiosity alludes to whether you have methods in place to hunt for new ideas and to experiment with new ways to get people and, while they’re in the store, to market to them in new ways,” he said.

“Insatiable means always believing in the need to perpetually adapt and not just do the same thing for the next 10 or 20 years.”

He noted that the willingness to destroy is a tough one.

“It’s about a willingness to move beyond egos and all the legacy of the past to try something new,” he said. “The more you get into small and medium businesses, private companies and those run by families, the more difficult a time people have letting go of the past in order to embrace something new.”

While his company focuses mainly on smaller firms, one of his favorite larger companies in terms of being an effective hunter, is Google.

“You can see how many times they try things that simply don’t work out,” he pointed out. “They have a portfolio of attempts because they are always trying to innovate in a different way.”

One company that Gutsche likes discussing is Zara, the Spanish fastfashion chain, that is one of the most unique companies in their space. The average fashion retailer will design a little

red dress and get it in the store 12 months later. At Zara, the process only takes 14 days.

As Gutsche points out in his book, “Better And Faster” Zara doesn’t carry every design and size in stock and styles are rarely consistent.

“Designers and patternmakers craft several different concepts for a piece of clothing every day which is then manufactured in local factories,” he said. “They work with ‘Greig’” or nearly colorless textiles which can be dyed at the last minute. Because of the speed to market, outsourcing to China is not an option.”

"Additionally, changes can be made on the fly. The company can manufacture a little red dress with a collar and is capable of having five sizes in 2,000 stores in two weeks. But if stores learn that consumers like the dress but not the collar they can redesign it and again, have it in all 2,000 stores within 14 days," he said.

“The takeaway here is that they have figured out a way to insure ongoing communication with consumers to look for new ideas,” he said. “They will try any new designs and not perpetually cling to just one.”

“…it was during this period that marketing changed forever and cultural authenticity became an overriding issue among consumers.”

Zara is a great example of extreme adaptation. But Gutsche concedes that successful companies have a tendency to become overly complacent with potentially devastating results.

“The average lifespan of a Fortune 500 company in the 1950s was 75 years,” he said. “If you made it on the list that’s how long you would last. That average has fallen to 15 years and is expected to be halved again.”

Gutsche believes that in a decade from now, half of the current Fortune 500 won’t exist in a meaningful way.

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AR YO

HUN FAR

“We are seeing a manufacturing industry that’s become faster, quicker sleeker and allows us to actually create more personalized offerings.” experience to evolve. That’s going to cause those who are complacent to become disruptive.”

There’s no doubt that technology will continue to play a major role in this.

“They don’t have the advantages they once did,” he said. “Excessive complacency can happen to any company when it fails to try as hard as it should.”

As always the big question is what retailers should be looking for in terms of customer behavior.

“There are a couple of drivers out there. extreme diversification of preference or personalization,” Gutsche said. “They want things on-the-go and there’s a big drive toward sustainability and health – all of which impacts the types of items in the store.

“A trend I really like is what I call the ‘next best thing,’” he said. “The idea is that people don’t always go for the No. 1 product anymore. They still remember the recession and are more likely to try the next best alternative. This isn’t just about price. It could be an entirely different product.”

Clearly, these are among the elements reshaping the retail business.

“Retailers are becoming a lot more competitive and there will be something of a shakeout in the business,” said Gutsche. “Retailers that are aggressive about change will enable the buying

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“Big data is helping us understand purchase patterns in the store,” he said “Things liked beacons are allowing people to tailor things like advertised products and recipes as they go through the store.”

“They don’t want the exact same food or offering as everyone else – something tailored to them,” he said. “On one hand you have the world of big data where marketers and other companies can figure out more easily what a person’s preferences are.

Do you have the instin adapting to whatever en a farmer, toiling in the year-after-year an

According to Gutsche, having that social media connection will allow the grocer of the future to suggest combinations of foods that go with the person’s purchasing pattern.

“For example, if you know someone’s on a gluten-free diet then you don’t need to present her with one-third of the offers that you might send to other people,” he said. “This enables you to create a deeper connection with that customer because you understand their preferences, behavior and priorities.”

The issue is one of “convergence”, which can be a challenge to find.

“The question is what products or services can be combined with the offering,” he said. “For example, if a retailer has cooking classes in store he’s adding a service and not just selling groceries.”

Another factor is “divergence” or customization and personalization.

Society is moving rapidly toward a customized world, according to Gutsche.

Divergence is the idea that people want to be opposite of the main stream.

“On the other hand we are seeing a manufacturing industry that’s become faster, quicker sleeker and allows us to actually create more personalized offerings,” he added.

How far can personalization go?

“Well, look at Amazon Fresh,” said Gutsche. “It’s showing you books and products similar to what you last reviewed. And every time you log in the offerings get a little more customized.

They are the masters at figuring that out and it gets faster every time you shop.”

Another element is what Gutsche terms “redirection” or channeling and refocusing trends.

For example, if someone goes into a store and cooking lessons are taking place they end up with a very different store experience.

“It’s about reminding people that they shop at a particular grocery store because there’s always something new happening or they are surprised with some special offering or different sampling,” he said.

“Basically, you’re trying to reposition what that shopping experience is really like and giving the store the element of surprise.” ■

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Listening

Alignment

Why

Growth

Trust

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B y ELLI OT ZW I EB A C H

Increased collaboration between trading partners can mean better results on the bottom line for both sides, according to Marc Hubbard, Chicago-based vice president for U.S. client services at Advantage Group International.

“No matter how good your business is, it can get better through collaboration,” Hubbard said.

“Working more closely with your trading partners builds the kind of relationships that benefit both sides.

Collaboration will lead to better sales, better service and better overall results.

Without collaboration you are missing opportunities to grow.”

Although collaboration has been an industry goal for many years, it’s more significant today, Hubbard said, “because of the economic state of the world we live in – for companies that are seeing improved performance as well as for the majority who aren’t seeing their wealth increasing.”

Nick Bertram, senior vice president, merchandising strategy and support for Ahold USA, Quincy, Mass., said he’s a believer in the benefits of collaboration.

“When we launched our ‘reshaping retail’ strategy, one area of concentrated focus was a promise to become a better place to shop,” he explained.

Ahold devised a number of programs, “but we soon discovered it wasn’t possible to achieve our ambition without stronger partnerships in the trade. So we created a trade relations team that focused on supplier engagement surveys, like those from Advantage, plus joint business plans for key partners that involved coordinating external events and top-totop communications.

“All that has proven to be a big enabler to our category teams and yielded improved relationships with specific suppliers, which in turns has allowed us to delight customers and become a better place to shop,” he said.

Collaboration isn’t difficult, Hubbard added, “but it takes effort and resources.

“No company is an island – though if it’s not collaborating, then it will be an island.

But opening yourself up to exchanging ideas with trading partners results in better business results for everyone.”

Continued on page 34▶

Matters

oration NEW JERS EY GRO CER | 33

◀ Continued from page 33

Advantage is a Toronto-based market research firm that collects data from companies in 40 countries and uses that feedback to encourage retailers and suppliers to set benchmarks to improve their industry relationships.

“We don’t tell companies what to do because we are not a management consulting company,” Hubbard explained.

“What we do is share feedback from our surveys and hope retailers and suppliers respond in a positive way.”

To achieve true collaboration, companies on both sides of the table must be open to feedback, Hubbard said.

“The key is to put resources into gaining feedback and measuring sales results,” he said. “But with feedback being a soft metric, the effectiveness of feedback on sales is difficult to determine. It’s just something you have to believe in – and you need to build the tools and processes and put the time and effort into gathering feedback and measuring it.

“WITHOUT COLLABORATION YOU ARE MISSING OPPORTUNITIES TO GROW.” “However, some retailers still have an adversarial approach toward suppliers and vice-versa. They tell them ‘this is the way we do things and that’s how we want you to do it.’ That attitude doesn’t foster collaboration,” he added.

Hubbard said that opening up to receiving feedback – by listening to each other – allows companies on both sides to expose themselves to new ideas and uncover new opportunities.

“If a company is struggling, we can supply them with possible reasons why and then encourage them to change their approach by giving examples of the kinds of behaviors they should pursue,” he added.

When asked for examples of situations where a lack of collaboration hurt partners, Hubbard cited one instance where a supplier was antagonistic to the idea of working with a retailer, with the result that the retailer was unable to drive sales.

“That supplier didn’t want to work with that retailer, and as the relationship kept growing more and more sour, sales were suffering,” Hubbard said. “When trading partners are that un-collaborative, that’s when they need to realize how much better things could be if they worked together to maximize sales – and once the supplier in this example changed his attitude, things did get better for both partners.”

In another instance Hubbard recalled a retailer who saw sales trending downward over a three-year period as he resisted collaborating with suppliers.

“But once he changed his attitude and began working with them, he was able to reverse the negative trend,” he said.

To emphasize his point, he cited the change in attitude of Steve Jobs, the late founder of Apple.

“In his early days at the company Jobs was terrible at collaboration,” Hubbard said.

“He tended to be very dictatorial. But his second time around, he opened up, and when he become more collaborative and shared his vision with others, everyone benefitted.”

Issues with collaboration may arise for partners on both sides of the table, Hubbard pointed out.

“Traditional retailers are facing a plethora of competition they weren’t seeing 10 or 15 years ago – not simply from a host of

34 | NE W J E R S E Y G R OC E R

alternative-format operators but also from Amazon and ecommerce companies,” he said. “Because consumers can get the same goods at so many different outlets, there’s more complexity in retail, which makes a collaborative focus between retailers and suppliers even more important.”

For most retailers, the top three concerns for suppliers to get right are supply chain excellence, proactive communication and a desire for personalization in the programs they are offered, Hubbard said.

In terms of supply chain, retailers want to be sure they get what they want when they want it and the way they want it, he pointed out."

Supply-chain excellenceretailers build their businessneed to make sure the supplyworking correctly to get the products they need to run their businesses properly,” he explained.

Retailers also want to be sure suppliers are adapting to their unique needs, especially given the intensity of competition, Hubbard added.

“Each retailer knows he needs to stand out with consumers or else they will go elsewhere, which means suppliers need to personalize and tailor their programs to each retailer’s particular needs,” he said.

“Sometimes that can be challenging for a supplier,” Hubbard added. “But a retailer is looking for flexibility in terms of being served by the supplier, which means the supplier must be sure to meet the retailer’s needs, not just his own.”

Communication between partners is key, Hubbard noted. “To make sure each partner is getting what he needs, he has to send a clear message about what he expects.”

Often though the retailer’s message to the supplier is not clear, he explained, because retail buyers, merchandisers and those dealing with logistics may not

be on the same page with each other or communicating the same message to suppliers.

“Without that kind of internal alignment, how can you expect suppliers to do their best work?” Hubbard said.

“A retail organization must be clear and consistent in its message in terms of how a supplier can help the retailer meet his goals,” he explained. “To do that, the different teams within an organization must talk among themselves rather than operating in separate groups that don’t communicate internally. Most suppliers are willing to help retailers, if only the retailer is willing to ask for help.”

For suppliers, “the message to retailers is to do what they say they are going to do,” Hubbard said.

According to Advantage’s most recent survey, the No. 1 priority for suppliers– as it’s been for four years in a row, Hubbard noted – is for retailers to implement agreed-upon business plans.

“You’d think we could all live by the philosophy of ‘do what you say you are going to do.’ But sadly, we hear time and time again that suppliers are frustrated with retailers for not doing what they said they would do.

They wonder why they should do all this collaboration, joint business planning and top-to-top meetings if the retailers are not going to follow through,” Hubbard explained.

Continued on page 36 ▶

NEW JERS EY GRO CER | 35

◀ Continued from page 35

He said the other top supplier priorities are for retailers to work productively with them to build a profitable business for both parties; and for stores to execute promotional and retail marketing plans in accordance with previous commitments.

While most large suppliers have been developing collaborative relationships for years, even some of the largest CPG’s are averse to collaborating, he pointed out, “simply because they are so large that they can get stuck in their ways, which sometimes means they become somewhat dictatorial.”

Smaller suppliers usually need to be more open to collaborating, he added – to make sure they get their foot in the door. But even some smaller suppliers, who make up the vast base for most retailers, have their problems with collaboration because they rarely see the retailer, “so knowledge and understanding of the needs of each customer’s business is often more limited,” Hubbard pointed out.

“The future for suppliers of any size can be enhanced and improved through greater collaboration,” he added.

What makes the challenge more difficult, Hubbard said, is the growth of digital and

omni-channel offerings, which many retailers separate from their brick-andmortar businesses.

“The challenge is getting both sides within a retail organization to work together to develop one holistic point of view,” he said.

“TO ACHIEVE TRUE CO L L A B OR A T I ON , C OM P A N I E S ON BO TH S I D E S OF T H E T A B L E MUST BE OP E N T O F E E D B A C K . . . ” The most recent Advantage study of U.S. retailers produced one major surprise, Hubbard said. Asked to rank 37 strategies in terms of their importance, retailers ranked “digital” as a very low priority, at No. 34, he noted.

“Our hypothesis for why digital ranked so low is that the respondent base was comprised mainly of buyers, merchandisers and supply chain/ replenishment personnel – a group that doesn’t see digital as part of its job. It’s the advertising and marketing people who are more focused on ecommerce and digital right now.

“But we would expect interest among all groups to increase as digital strategies become more integrated at the retail level.”

Editor’s Note: Elliot Zwiebach has been reporting on the food industry for 47 years.

He retired from Supermarket News in July when his job was eliminated.

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PRESENTING supermarkets battle for

SHARE STOMACH of

COMPETITION

By Brian Todd

COMPETITION HAS BEEN PART OF THE RETAIL FOOD BUSINESS SINCE IT BEGAN AND WHILE IT CAN BE A BATTLE FOR GROCERS, IT HAS ALSO HELPED SPUR INNOVATION AND MORE RECENTLY, ECONOMIZING BEHAVIOR.

That battle for “share of stomach” has never been more intense than right now as traditional supermarkets saw growth of less than 2 percent in sales during the first six months of 2016, according to Food Institute analysis of data from the U.S. Bureau of the Census.

While the lack of food price inflation this year is definitely a factor in the sluggish results being reported, traditional supermarket operators are also faced with more competition from what The Food Institute calls “alternative retailers.”

These competitors include warehouse clubs, supercenters, drug stores, and online sellers.W And while they are fierce warriors in the struggle for a piece of the consumer food dollar, they have also forced many traditional supermarkets to become stronger.

These grocers are continually innovating to compete, adding club-sized products and aisles, expanding their pharmacies and health care offerings, to offering their customers the option of buying online and home-delivery in some cases.

And in the past few years, supermarkets have been very efficient at cutting costs out of the supply chain, making their operations as lean as possible. They have also been aided in the lack of inflation in food prices at the wholesale level, although that has also meant a lack of inflation at retail – for the overall foodat-home category at least.

More recently, grocers find themselves competing with home-delivered meal kits like Blue Apron and Hello Fresh.

Over 100 such companies are now delivering millions of boxes to consumers’ doorsteps each month and with sales topping $1 billion in 2015.

Initially, some may have been frustrated at the prospect of losing customers to a higher cost, limited offering competitor that was heavily funded by private equity or venture capital. But again to their credit, they are not standing on the sidelines to see how that market develops.

For example, the Fresh Market chain, introduced “Little Big Meals.” For $20, the complete meal kit is available in its stores and puts together several easily compiled ingredients from their shelves to feed a family of four similar to the meal kit. A very convenient alternative and one that it heavily featured, saving customers $10-$15 off the “list” price of the individual parts. And several other chains have responded in a similar fashion.

Some 84 percent of consumers now purchase prepared food from retailers monthly, according to data from Technomic, Inc. Interestingly, half say they visit fast food restaurants less often each month as result.

And supermarkets continue to devise innovative ways to compete.

Roundy’s, part of the Kroger Co., designed a store in Sherwood, Wis., designed a store appealing to Millennials’ desire for more prepared foods. The Metro Market in Madison, Wis, meanwhile, features a sushi bar, an oyster bar and a bar with a dozen beers on tap along with live piano music and a fireplace.

Prepared foods are a driving force at Shubie’s Marketplace in Marblehead, Maine. The 10,000 sq. ft. store features 35 to 40 prepared entrees daily as well as hand-crafted sandwiches and craft beer.

The Impact of Alternative Retail

Club and supercenters alone sold more than $90 billion worth of food in the first half of 2016 according to Food Institute estimates. That’s more than one-third of traditional supermarket sales during the same period. But the growth at the formats has slowed considerably in the past two years after posting double digit gains in much of the last decade.

Through the first half of 2016, club and supercenter sales rose only 1.6 percent, while supermarket sales rose 2.1 percent to nearly $300 billion.

And at drug stores, food sales are estimated to be in the vicinity of about $1 billion monthly. As chain drug stores have expanded their food offerings, customers have found them as a source of groceries well beyond the candy and snacks featured near the checkouts.

Their prevalence in urban locations has definitely aided in this effort because of their convenience for shoppers. And while only 19 percent of consumers surveyed by Technomic have ever purchased a prepared meal from a drugstore, 43 percent of those who do so buy them at least weekly.

And dollar stores are doing much of the same, particularly in suburban and rural areas.

Continued on page 41 ▶

CAL NEW I FO JERS RNIA EY GRO GROCER CER | | 39

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ALTERNATIVE RETAILER PERFORMANCE - JAN. 1 - JULY 1

Millions: JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC JAN - JUNE JAN - DEC

2016 $33,903 $34,060 $36,720 $35,492 $37,244 $36,287

$213,706

(Food Institute analysis of Census Bureau data) WAREHOUSE CLUBS DRUG STORES & SUPERCENTERS & PHARMACIES % Est. 2016 % Est. 2016 2016 2015 Chge. Food Sales* 2015 Chge. Food Sales* $33,835 0.2% $ 13,053 $22,121 $21,782 1.6% $ 929 $32,802 3.8% $ 13,113 $22,346 $20,137 11.0% $ 939 $35,853 2.4% $ 14,137 $23,976 $21,873 9.6% $ 1,007 $34,598 2.6% $ 13,664 $22,980 $21,597 6.4% $ 965 $37,812 -1.5% $ 19,553 $23,555 $21,503 9.5% $ 989 $35,927 1.0% $ 19,051 $23,318 $21,530 8.3% $ 979 $36,631 --$ $21,806 --- $ $37,463 --$ $21,563 --- $ $34,148 --$ $22,025 --- $ $36,768 --$ $22,640 --- $ $39,039 --$ $21,637 --- $ $45,266 --$ $25,180 --- $ 1.4% $92,571 $138,296 $128,422 7.7% $5,808 $210,827 --$263,273 --$440,142

2016 $34,714 $34,821 $38,894 $37,491 $38,847 $38,678

$223,445

E-SHOPPING & MAIL ORDER % 2015 Chge. $31,758 9.3% $29,879 16.5% $34,046 14.2% $33,449 12.1% $33,091 17.4% $33,699 14.8% $34,529 --$34,231 --$34,783 --$35,824 --$41,688 --$55,765 --$195,922 14.0% $432,742 ---

Est. 2016 Food Sales* $ 729 $ 731 $ 817 $ 787 $ 816 $ 812 $ $ $ $ $ $ $4,692

* Estimated by Food Institute as follows: 38.1% of warehouse club/supercenter; 4.2% of drugstore and pharmacy; and 2.1% of e- and mail orders.

◀ Continued from page 39

ARE LOWER FOOD PRICES AT SUPERMARKETS, PARDON THE PUN, EATING INTO RESTAURANT SALES?

In addition, supermarkets are competing more and more with restaurant chains as both high-end and quick-service are looking for a piece of the at-home market as well. As a result, more prepared or easy to prepare convenience items are being offered to offset this, as well as the placement of sit-down restaurants in some retail locations.

In talking about at-home and away-from home food prices recently, McDonald’s USA President Mike Andres recently stated, “If I’m not mistaken, it’s the biggest gap we’ve seen in the last 10 years.”

Wendy’s Todd Penegor, the chain’s chief executive, said, “The most notable driver behind the sales slowdown appears to be the continued gap between cost of eating at home and cost of dining out, which is now at its widest point since the recession.”

That prompted us at The Food institute to do some research and it turns out that away-from-home food prices advanced 3.3 percentage points more than at-home prices in the first half of this year – the largest positive gap since 1983 when away-from home price increases exceeded at-home by 3.4 percentage points. The 2016 change was also the fifth largest such change since the Bureau of Labor Statistics followed such trends back in 1954.

So what does this mean? Are lower food prices at supermarkets, pardon the pun, eating into restaurant sales?

And the answer is…maybe not for all, but apparently for some players, like McDonald’s and Wendy’s who have attributed their lack of sales growth to lower grocery prices. So once again grocers are competing fiercely.

You see, overall eating and drinking place sales in the first half of 2016 were up 6.5 percent from a year earlier at $326.7 billion and when deflated by the 2.7 percent increase in prices, sales still increased 3.8 percent from 2015.

Meanwhile for supermarkets, sales in the first half increased just 2.1% from a year earlier but prices during the same period were down 0.6%. That puts the deflated grocery store sales gain at 2.7% or 1.1 percentage points less than the increase at eating and drinking places.

So eating and drinking place sales growth in the first half, both deflated by the Consumer Price Index for awayfrom-home food, and un-deflated, still exceeded sales growth at the nation’s grocery stores even though the gap in the two price indices was the fifth largest on record.

Looking ahead, eating and drinking place price increases will likely accelerate due to rising minimum wages. To counter that, and reducing staff, more automation, particularly in the fast-food sector will likely be on the horizon. That again can be an opportunity for grocers as at-home food prices make their own prepared or easy to prepare offerings even more attractive in price, quality and convenience.

Editor’s Note: Brian Todd is President and CEO of The Food Institute, a nonprofit information-based organization founded in 1928.

Learn more at www.foodinstitute.com or contact Todd at brian.todd@foodinstitute.com NEW JERS EY GRO CER | 41

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1 5 MINUTES WITH...

tom Stenzel P RES IDEN T AN D CEO U N I T ED F RES H PRODU CE AS S OCIATIO N

Tom, can you tell us what’s the most important regulatory or legislative issue today for the produce industry and their retail customers?

I would say the biggest impact we’re seeing right now for grocers and their produce suppliers is implementation of the Food Safety Modernization Act (FSMA).

In the past year, FDA has finalized several different regulations under FSMA that will affect the growing of fruits and vegetables, their packing and processing, their transport through the supply chain, and even their handling in retail distribution centers and in store.

What companies are covered under these rules?

On the growing side, these new regulations apply to all foods produced domestically in the United States, and also to all imported foods. And, you can pretty much say that all food processors and food handlers such as wholesalers and retailers will be covered.

Can you give us some examples of how these regulations might affect the industry?

While most commercial growers are already aware of and following Good Agricultural Practices, the new Produce Safety Rule establishes specific guidelines

for everything from worker hygiene to use of compost to quality of irrigation water. Retailers are going to want to make sure they’re only sourcing produce from growers who comply with these rules. It’s never been more important for retailers to know who they’re buying from.

“WE’RE BEGINNING TO SEE SOME EXCITING NEW PROGRAMS WHERE RETAILERS ARE HELPING SNAP RECIPIENTS EAT HEALTHIER, WHILE ALSO BOOSTING IN-STORE TRAFFIC.AND PRODUCE SALES.” How about impact on retailers?

Any food facility that has to register with the FDA, including distribution centers, are covered under the Preventive Controls for Human Foods Rule. That will require companies to have specific food safety plans and qualified individuals either on staff or as consultants to help comply with these standards.

Retailers who arrange transportation will also have to ensure that foods are transported in accordance with the Sanitary Transportation Rule.

Finally, retailers who are direct importers of foods will be responsible for ensuring that foreign suppliers are complying with all of these rules. FSMA is going to have significant impact on the entire food industry for many years to come.

Continued on page 44 ▶

NEW JERS EY GRO CER | 43

15 MINUTES WITH...

◀ Continued from page 43

What other issues are important for produce suppliers and retailers?

Although most retailers don’t see the direct impact, I’d say the biggest threat to our industry today is the severe labor shortage in harvesting, packing and processing fruits and vegetables. And that problem is compounded by Congress’ refusal to address immigration reform.

We need to find a path to legal status for the more than one million undocumented workers who are working in agriculture today, and we need to create a new foreign guest worker program for the future that can properly screen out bad guys, but also help us attract the workers we need.

“TEACHING KIDS TO MAKE HEALTHY CHOICES WHEN THEY’RE YOUNG HELPS THEM MAKE THOSE CHOICES FOR A LIFETIME...”

Most of our growers are paying far more than minimum wage, but we still don’t have enough workers. And for retailers, that will mean shortages of some crops and likely higher prices.

Let me mention a couple other issues that the produce industry is working on that indirectly affect our retail customers.

We’re seeing a rash of proposed new regulations from the EPA on all sorts of issues from restricting crop protection tools to trying to regulate streams and ditches on farms.

Without a strong scientific consensus on the need for those steps, these actions simply add costs to production that have to be passed on to retailers and eventually consumers.

And, Congress continues to duck the issue of assuring adequate water supplies, especially in California. I don’t have to tell your readers about the drought, or the importance of preserving runoff from the snow pack in the Sierras in reservoirs.

44 | NE W J E R S E Y G R OC E R

We also have to have the political will to do a better job of distributing water from where it’s abundant to where it’s needed.

This is another issue where grocers may not be on the front line, but you surely are impacted.

Don’t you have any good news on the regulatory and legislative front?

Actually I do. One of the most important programs to come out of the last Farm Bill is called the Food Insecurity Nutrition Grants (FINI) program. FINI is providing grants to retailers, community groups and farmers markets to incentivize SNAP recipients to choose more fruits and vegetables with their SNAP dollars.

We’re beginning to see some exciting new programs where retailers are helping SNAP recipients eat healthier, while also boosting in-store traffic and produce sales.

That’s a win-win.

Let me also mention one more nutrition topic that I also believe is important to retailers in a different way. Your readers have probably heard about the food fight in Washington, D.C. over school meals.

For the first time, USDA is requiring schools to provide one-half cup of fruits and vegetables in school lunches. Now that doesn’t sound like much, but that simple requirement is exposing kids to a tremendous new variety of fruits and vegetables.

Our United Fresh Start Foundation has been leading a campaign for several years donating salad bars to schools, with the help of many retailers and produce suppliers. Teaching kids to make healthy choices when they’re young helps them make those choices for a lifetime, when they are the primary shopper.

So you see, even school lunch regulations matter to retailers! We’d love to talk with any of your members about how they can get involved in supporting schools in their communities. ■