California Grocer, 2013, Issue 4 (Sample)

CALIFORNIA GROCERS ASSOCIATION

2013, ISSUE 4

IN THIS ISSUE Seeking the Next Game Changers Learning the Rules of the Game Foundation Honors Two Industry Execs Learn By Doing

For the latest industry news visit www.cagrocers.com

CGA Educational Foundation: PRODUCING THE NEXT GENERATION OF INDUSTRY LEADERS

September 29 — October 1, 2013 | Palm Springs Convention Center | Palm Springs, California

California’s competitive grocery marketplace is experiencing evolutionary changes. These changes — some subtle, some more disruptive — are transforming the way the retailing game is played.

Robust demographic movements, emerging technologies and fragmented shopping options are rewriting the rules of the game. The core customers of the Baby Boom Generation continue to influence strategies, however the new customer, Millennials, are dictating different moves for players that want to win. Constantly conversational, loyally agile and lifestyle conscious, this new breed of grocery shopper requires game changing approaches that are personal, transparent and uniquely relevant.

Plot your next move. Join the retailers of the Golden State and discover ways to capture the new consumer with breakout strategies and collaborative partnerships that will grow your business in this new environment.

REGISTER NOW For complete information and to register, contact CGA at (800) 794-3545 or visit www.CGASTRATEGICCONFERNCE.com

Top Industry Speakers Marian Salzman

Jason Ryan Dorsey

David Selinger

Leading Trendspotter

Author & Millennials General Expert

CEO/Co-Founder, RichRelevance

Marian has been named one of the world’s top five trendspotters. She is one of Business Insider’s 25 Most Powerful People in Public Relations. She blogs for the Huffington Post, Forbes.com and CNBC.

Jason is recognized as The Gen Y Guy and has been featured as a generational expert on 60 Minutes, 20/20, The Today Show, The View, and in Fortune magazine and The Wall Street Journal.

David first garnered international recognition as an expert in e-commerce data analytics with his work while with Amazon’s Data Mining and Personalization team.

Share Group Discussions The Future of Coupon Steven Boal, President & CEO, Coupons.com

Reaching For Their Hearts Before Their Wallets: Five Ways to Grow Consumer Loyalty Amber Williams, President, Glass Agency

E-Commerce Impact on Retail Craig Rosenblum, Partner, Willard Bishop

Connecting With The “New” Boomers - A Case Study Lisa Hill, Vice President, Buxton

Legislating Healthy Eating Choices Keri Askew Bailey, SVP Government Relations & Public Policy, California Grocers Association

Morning Super Sessions Retailer Spotlight Save Mart Supermarkets

The New Face of Hispanic Consumers — Are You Ready?

Juan Carlos Davilia, SVP & General Manager, Hispanic Market-Center of Excellence

Meetings Make the Difference The CGA Strategic Conference offers a unique opportunity to step away from your office, conduct meetings with your top business partners while gaining insights into the fast-changing retail landscape.

Make the most of your time out of the office by participating in the customized one-onone business meetings.

CGA understands that your time out of the office needs to be productive. More than 800 pre-scheduled business meetings, engaging exhibits and various networking events provide a productive and efficient way to build your connections and optimize your time at the conference.

W W W. C G A S T R AT E G I C C O N F E R E N C E . C O M

Think Two Moves Ahead...

The 2013 CGA Strategic Conference offers attendees an uncompromising blend of top-notch educational sessions, productive face-to-face business meetings and engaging social opportunities.

This year, we have packed the CGA Strategic Conference with breakout sessions & keynote presentations from industry thought-leaders to make your attendance more beneficial.

Many thanks to The Illuminators for their continued, generous support of the CGA Strategic Conference by providing the outstanding conference meal functions and entertaining social events.

Conference Golf Tournament Hosted by The Illuminators Sunday, September 29, 2013 7:00 AM Registration 8:00 AM Shotgun Start

Don’t miss this opportunity to tee it up with California retailers. Space is limited. Sign up early!

Mission Hills Golf Club

34-600 Mission Hills Drive Rancho Mirage, CA 92270 www.illuminators.org

Join your peers at this annual convention kick-off event.

CGA Would Like To Thank This Year’s Top Sponsors Anheuser-Busch InBev Bimbo Bakeries USA C&S Wholesale Grocers California Table Grape Commission Coca-Cola Refreshments Coca-Cola Refreshments – Minute Maid The Hershey Company Hillshire Brands The Jel Sert Company Jelly Belly Candy Co. Kellogg Company Kraft Foods Group, Inc. MillerCoors Mondelez International Nestle Purina PetCare Nestle Waters North America PepsiCo Procter & Gamble Snyder’s-Lance, Inc. Unified Grocers, Inc. Unilever

Participating Retailers Albertsons, LLC Bestway/Gardena Supermarkets Big Saver Foods, Inc. Bristol Farms Cardenas Markets Costco Wholesale El Super (Bodega Latina Corp.)

Food 4 Less Stockton/ Rancho San Miguel Food 4 Less/Foods Co. Food 4 Less/Gongco Gelson’s Markets Holiday/Sav-Mor Foods Mar-Val Food Stores Northgate Gonzalez Nutricion Fundamental, Inc. “R” Ranch Markets Raley’s Ralphs Grocery Company Safeway Inc. Save Mart Supermarkets Smart & Final Stores Stater Bros. Markets Super A Foods Superior Grocers Times Supermarkets (HI) Vallarta Supermarkets Whole Foods Markets

W W W. C G A S T R AT E G I C C O N F E R E N C E . C O M

CONTENTS

F E AT U R ES

COLU M NS

Seeking the Next Game Changers

32

Game changers — We hear the word a lot in political, business and social circles. But what are they and how will they impact the industry’s future?

Learning the Rules of the Game

38

The heads of three of the leading food industry programs in the country discuss their students, curriculums and their relationships with retailers and manufacturers. These programs are nurturing the future leaders of the retail and CPG industries.

Learn By Doing

44 48

| Issue 4

President’s Message Foundation Helps Offset Spiraling Educational Costs................................................. 5 From The Chair The CGA Strategic Conference Is Fast Approaching and It’s Your Move!.......................... 7 Viewpoint — Kevin Coupe The Most Significant Thing I Do Each Week....... 10 CGA Educational Foundation — Jim Van Gorkom The True Measure of Success............................. 13

Cal Poly’s educational strategy can be summed up in just one phrase: “Learn by Doing.” Yet, university officials know that neither is possible without forging strong links to the supermarket industry.

Capitol Insider — Louie Brown Musical Chairs in the Legislature........................ 22

Foundation Honors Two Industry Execs

CGA News........................................................ 16

Jim Lee, Stater Bros. Markets, and Vic Chiono, Coca-Cola Refreshments, are the latest food industry executives to be inducted into the CGA Educational Foundation Hall of Achievement. They join an elite group of professionals that have been recognized for their industry and civic leadership.

DEPA RT M EN TS Government Relations...................................... 20 Washington Report ..................................... 24, 26 Q & A.................................................................28 Member Profile: 99 Ranch Market..................... 54 Hometown Heroes............................................ 58 Know the Law................................................... 60 Supply Lines ..................................................... 62 Wealth Management..........................................63 Advertiser Index ............................................... 64

CALIFORNIA GROCERS ASSOCIATION President/CEO Ronald Fong

Vice President, Communications Dave Heylen

Director, CGA Educational Foundation Brianne Page Director, Local Government Relations Sarah Paulson Sheehy California Grocer is the official publication of the California Grocers Association.

For association members, subscription is included in membership dues.

Subscription rate for non-members is $100 and does not include CGA Buyers’ Guide. © 2013 California Grocers Association

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

|

Vice President, Business Development & Marketing Doug Scholz

Director, Events & Sponsorship Beth Wright

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

C A L I FO RN I A G RO C E R

Senior Vice President, Government Relations and Public Policy Keri Askew Bailey

Executive Director, CGA Educational Foundation Shiloh London

3

CGA

| Board of Directors

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS DIRECTORS

Chairman of the Board Kevin Davis Bristol Farms

Second Vice Chair Joe Falvey Unified Grocers, Inc.

Secretary Michael Read WinCo Foods, Inc.

First Vice Chair Mary Kasper Fresh & Easy Neighborhood Market Inc.

Treasurer Kevin Konkel Raley’s

Immediate Past Chair Jonathan Mayes Safeway Inc.

Dave Jones Kellogg Company

Dora Wong Coca-Cola Refreshments

Raul Aguilar Anheuser-Busch InBev

Kendra Doyel Ralphs Grocery Company

Casey McQuaid E & J Gallo Winery

Harish Solanki Big Saver Foods, Inc.

Jon Alden Jelly Belly Candy Co.

John Eagan Costco Wholesale

Dan Meyer Stater Bros. Markets

Renee Amen Super A Foods, Inc.

Phil Gentile, Jr. K.V. Mart Co.

Omar Milbis Rio Ranch Markets

Naresh Solanki Bestway/Gardena Supermarkets

Teresa Anaya Northgate Gonzalez Markets

Jon Giannini Nutricion Fundamental, Inc.

Phil Miller C&S Wholesale Grocers

Joe Angulo El Super (Bodega Latina Corp.)

Diana Godfrey Smart & Final Stores

Eric Nadworny Save Mart Supermarkets

Bill Jordan Whole Foods Market

Hee-Sook Nelson Gelson’s Markets

Michel LeClerc North State Grocery, Inc.

Vinit Patel Unilever

Eric Lindberg, Jr. Grocery Outlet, Inc.

Bob Richardson The Clorox Company

Dave Madden MillerCoors

Brian Schmidt Acosta Sales & Marketing

Damon Franzia Classic Wines of California

John Hewitt Grocery Manufacturers Association

Dennis Belcastro Hillshire Brands Company Paul Cooke Nestle Purina PetCare Brent Cotten The Hershey Company Robert Digrigoli Procter & Gamble

SUPPLIER EXECUTIVE COUNCIL

Veronica Rendon, Dave Thatcher Alta Dena Certified Dairy, LLC Rick Van Nieuwburg Altria Corp. Services Raul Aguilar Anheuser-Busch InBev

Elizabeth Alvarez-Sell, Greg Bailey The Hershey Company

Ron Bloes Coffee Bean & Tea Leaf

Tim Cohen Hidden Villa Ranch

Dan Atkins Berkeley Farms, Inc.

Stephenie Shah Diageo

Dennis Belcastro Hillshire Brands Company

Gilbert de Cardenas, Bob Cashen Cacique USA

Andres Jaramillo Don Pedro’s Kitchen

Kristina Crystal-McVay The J.M. Smucker Co.

Scott Johnson, Shannon Nadasdy Financial Supermarkets, Inc.

Dave Jones Kellogg Company

C A L I F OR N IA G R OC ER

Victoria Horton California Beer & Beverage Distributors

|

David Van Winkle Hansen Beverage Company

Vic Chiono Coca-Cola Refreshments Minute Maid Business Unit

Rick DuCharme BBUSA, Rainbo Baking Co., Nature's Harvest

4

Nancy Limon, Dora Wong Coca-Cola Refreshments

Cindy Plummer California Table Grape Commission Mark Cassanego Carr, McClellan, Ingersoll, Thompson & Horn Pat Huston, Robert Hilliard Cash Register Services

Bruce Wyatt Thomas Wilson Flowers Baking of California Brian Rosen, Ann Wilson Gleason Inc. Fernando Gallego Golden Gate Paper Company

Richard Bell LOC Software Dave Madden MillerCoors Rick Brindle Mondelez International

Mike Stamper Nestle Sales Division Dirk Stump Stump’s Markets Tiernan Summins Kraft Foods Group, Inc. John Swindell Food 4 Less/Foods Co. (A Kroger Company) Paul Turcotte Pepsi Beverages Company — WBU Jim Wallace Albertsons/Sav-On Pharmacy Jim Van Gorkom NuCal Foods Laurie Stone PBI Market Equipment, Inc. Paul Turcotte Pepsi Beverages Company — WBU Vince Delgado Procter & Gamble Melanie Zitting, Sue Sharp Pure Water Technologies Renee Wasserman Rogers Joseph O’Donnell Darrell Costello Roplast Industries, Inc. Tom H. Daniel Sterilox Food Safety Karen Grierson TC Transcontinental Northern California

Steven Schultz Moss Adams LLP

Phyllis Adkins TruGrocer Federal Credit Union

Paul Cooke, Karen Doggendorf Nestle Purina PetCare

Vinit Patel Unilever

PRESIDENT’S MESSAGE

Foundation Helps Offset Spiraling Educational Costs In a 2012 speech, Secretary of Education Arne Duncan summed up the public sentiment regarding U.S. higher education: “The price of college is too high.”

If you have a son or daughter in college, or attending yourself, you probably agree; and by what I hear and read, most likely with good reason.

As costs for higher education have spiraled out of control, today’s generation of college bound students has been forced to rely on student loans to meet rising tuition and living expenses.

Since 1978, tuition has increased 1,120 percent nationally, and is rising faster than the rate of inflation. State and local funding for higher education declined seven percent in 2012, and in 2011, students graduated with an average of $26,500 in student loans. That increased to $27,253 just one year later. In fact, total student loan debt has grown more than 56 percent in the last five years.

One economic think tank that focuses on state and federal budgets found that states are spending, on average, 28 percent less per student in fiscal year 2013 than they were in 2008. Consequently, tuition at four-year public colleges has grown 27 percent since the 2007-08 year.

In the cases of Arizona and California, tuition at public universities has gone up by more than 70 percent over the same period.

after seeing deep cuts during the recession.

The Foundation has grown exponentially over the last 21 years to bestow more than 2,600 worthy college students with scholarships totaling more than $3 million, in addition to $1 million in tuition reimbursement.

We are extremely proud of the Foundation’s accomplishments, but more so, we are grateful to our donors for their generous financial support.

This past year, the Foundation has embarked on an aggressive monthly webinar program.

Participation has been great and I urge you to visit the Foundation’s website to see the upcoming educational sessions available to you and your employees.

If your company isn’t utilizing the Foundation’s educational programs, it is missing out on one of its most valuable membership benefits.

The Foundation looks forward to working with you in a joint effort to provide financial assistance to advance the educational goals of your employees and their dependents and offer educational programs to our great industry. n

|

As school and government funding continues to decrease, and tuition continues to rise, students are turning more and more to non-profit organizations and Foundations for financial support.

President/CEO

C A L I FO RN I A G RO C E R

While some reform has occurred — Governor Jerry Brown signed significant education reform this past summer — community colleges and public universities were hoping for more funding

Our very own CGA Educational Foundation is a perfect example. Created 21 years ago, the Foundation continues to provide life-changing financial assistance to CGA member employees and their dependents through scholarships and tuition reimbursement.

RO NALD FONG

5

iPhone CART REPORTING “WE HAVE AN APP FOR THAT�

CARTSNAP

FOLLOW US ON SOCIAL MEDIA

www.cartretrieval.net

A ready supply of shopping carts are an absolute necessity in operating a successful grocery/retail enterprise. Shopping carts are at risk from the public at large and from local and state authorities, as well. As the pre-eminent cart recovery service in California and Nevada, CSCRC is extremely well positioned to deal with both threats.

Customers will

CSCRC easily accessible | We are open daily from 7:00 a.m. to 6:00 p.m.

For more information and to join the program today, call (818) 563-3070.

To report a cart location, call toll free (800) 252-4613 24 hours a day, 7 days a week.

1020 North Lake St., Burbank, CA 91502

www.cartretrieval.net

FROM THE CHAIR

The CGA Strategic Conference Is Fast Approaching and It’s Your Move!

The theme of this year’s CGA Strategic Conference is California Game Changers, and in today’s hyper competitive retail environment, who doesn’t want to change the game, or at least improve their chances of success?

In my more than 40 years in grocery retailing in California, I have never seen the landscape, the economy, the competition and the legislation that impacts our business change faster and with less predictability.

Recently I received a CGA Strategic Conference mailer which included a big die-cut map of California that reminded me of a giant puzzle piece. It occurred to me that this is exactly what we’re facing this year as we head into the most important part of our year and the busy holiday selling season for food and beverages — it’s one giant puzzle!

The high-powered speakers we have lined up will address the rapidly changing and evolving demographic make-up of our customer base.

Will the holidays bring the sales we expect?

Or, will lingering unemployment rates dampen consumer spirits and spending? Will new competition start up to capture holiday sales?

Or, will other competitors close stores due to poor performance? Will new legislation be enacted that will handcuff our ability to grow?

Or, will past legislation not cost as much as we fear when finally put into effect?

The high-powered speakers we have lined up will address the rapidly changing and evolving demographic make-up of our customer base. They will give us a glimpse into the transformation of our stores and the way we do business as technological advances materialize right in our customers’ hands in the form of more proficient smart phones.

And they’ll look at how these new trends will change the way our customers think and how we go to market in almost no time at all.

My past experience was that it was acceptable to go to a major trade association conference, or convention every other year, and maybe sometimes even once every three years, and you wouldn’t miss that much.

There would be a few new ideas kicked around, a few new products, and a few new people to meet, but generally it was okay to miss the conferences once in a while with no great impact or loss of competitive advantage.

Continued on p. 8

|

This year’s CGA Strategic Conference will be September 29 to October 1, at the Palm Springs Convention Center and has been designed to stimulate your thinking about the evolutionary

CGA Chairman of the Board President and CEO Bristol Farms

C A L I FO RN I A G RO C E R

All of these questions and many more go through retailers’ minds this time of year as we get ready for the holidays, and especially as we plan for the future of our companies in California.

changes transforming how the retailing game is played.

KEVIN DAVIS

7

FROM THE CHAIR

Continued from p. 7

My thinking has changed.

Over the past few years, the changes have come so fast, the landscape has changed so quickly, and product innovation and consumer expectations are evolving so rapidly, that I really don’t think we can miss one year and expect to be as informed, up to date, and as competitive as we would otherwise be.

In addition to the world class experts and speakers who will educate us, the professionally moderated share groups have become an extremely popular component of the CGA Strategic Conference and one in which we match notes and learn from the experts, as well as our industry peers, on a wide array of important and timely topics.

Perhaps the most important business development aspect of the conference for our company and our people are the business sessions with our key suppliers.

These business meetings used to seem redundant with

other trade shows and formats, but I can honestly say that we look forward to the opportunity to quickly catch up on what each company is seeing in the industry, what changes they are planning, and how they plan to execute for maximum performance and sales in the months ahead.

Once a year is no longer enough. We need to keep our finger on the pulse of all of our trade partners all the time to improve, to change, and to efficiently compete in the new world of business in California.

We are excited about the 2013 CGA Strategic Conference. We look forward to improving our chances of success in the coming year. I encourage you to consider your options as the game changes in California retailing. As in all games, there will be winners and there will be losers too. It’s time to “Think Two Moves Ahead.”

I hope to see you in Palm Springs. n

CONGRATULATIONS TO THIS YEAR’S INDUCTEES INTO THE CGA EDUCATIONAL

FOUNDATION

HALL OF ACHIEVEMENT JIM LEE

COCA-COLA REFRESHMENTS

|

C A L I F OR N IA G R OC ER

STATER BROS. MARKETS

VIC CHIONO

8

Angled to exist on a level plain