Grocer2014 issue4 web by Digital Gear

2014, ISSUE 4

C ALIFORNIA GROCERS A SSOCIATION

Creating Convergence: BRAND, RETAILER, SHOPPER

IN THIS ISSUE

For the latest industry news visit www.cagrocers.com

Authenticity Helping Make Healthy Choices Training Tomorrowâ&#x20AC;&#x2122;s Workforce

September 21 â&#x20AC;&#x201C; 23, 2014 | Palm Springs Convention Center | Palm Springs, California

Traditional grocery? Meet non-traditional thinking. A place where one-size-fits-all is being replaced by one-size-fits-one. A place where true value is derived from expressing your true values. With todayâ&#x20AC;&#x2122;s fragmented shopping reality, customers are looking for a different kind of retail relationship. Omni-connected consumers are embracing the companies and brands that express and demonstrate their values. How retailers define themselves is as important as the products on their shelves and the prices they charge. Truthfulness, integrity, sincerity, individuality, and openness are the new currencies that creates loyal customer connections â&#x20AC;&#x201D; in-store and on-line. Join your industry colleagues on this mind-expanding, purposeful journey into the next generation of grocery retailing.

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

TOP INDUSTRY SPEAKERS Tina Wells

Maxine Bedat

CEO/Founder Buzz Marketing Group

Co-founder Zady

Tina is a leading expert on the shopping habits and preferences of the Millennial generation. She will delve into the implications of her company’s research findings on the nation’s grocery industry and recommend how to stay ahead of the curve.

Mitch Joel President Twist Image, Author

Ido Leffler Co-founder Yes To, Inc. and Yoobi

Maxine and Ido have each built successful companies that see businesses as the driver for social change. They will explore concepts of participatory commerce, sustainability and supply chain transparency as a means to establish authentic connections with today’s consumers.

Mitch is one of North America’s leading digital visionaries. He will share the five new movements that have changed business forever and why companies will have to adapt, or perish. The opportunity is now. Reboot your business, your future depends on it.

SHARE GROUP DISCUSSIONS Mobile + Digital = Advertising Success Patrick Moorhead, Vice President - Mobile, Catalina Marketing

Buying Into the Local Food Movement Mike Goldblatt, Consultant, A.T. Kearney

Winning the Week – Retailer Advertising and Promotion Trends Dan Kitrell, VP of Account Solutions, Kantar Media

Online Grocery Shopping and Home Delivery Nicole Gavel, Strategic Partner Development Manager, Google Shopping

Sizing up the Small Formats Kelly Tackett, Research Director, Planet Retail

Trends and Opportunities with SNAP Benefits Keri Askew Bailey, SVP Government Relations & Public Policy, California Grocers Association

MORNING SUPER SESSIONS Private Equity Panel Discussion Stephen Babson, Managing Director, Endeavour Capital Kevin Davis, President & CEO, Bristol Farms

Front of the Line: How Grocers Can Get Ahead for the Future Nick Hodson, Vice President, Strategy& (formerly Booz & Company)

California Grown California’s bountiful agricultural offering will be highlighted at this year’s conference. Reflecting consumer trends towards fresh, healthy, locally-grown produce, the conference has been expanded to include California growers and producers of fresh and perishable products.

www.cgastrategicconference.com

CGA Would Like To Thank This Year’s Top Sponsors

Stand Out. Be A True Original.

For attendees, the 2014 CGA Strategic Conference offers one of the most productive business events of the year. The compact agenda is packed with insightful educational sessions that take dead aim at the trends, issues and solutions that are impacting the grocery industry in California. Mix in numerous networking opportunities and, hundreds of pre-scheduled supplier and retailer meetings and you have an event you can’t afford to miss.

Anheuser-Busch InBev Bimbo Bakeries USA Braga Fresh Family Farms C&S Wholesale Grocers Coca-Cola Refreshments Command Packaging The Hershey Company Hillshire Brands The Jel Sert Company Jelly Belly Candy Co. Kellogg Company Kraft Foods Group MillerCoors Nestle Purina PetCare Nestle Waters North America Ocean Mist Farms PepsiCo Procter & Gamble Unified Grocers Unilever

Participating Retailers

“The CGA Strategic Conference offers a professional yet comfortable setting to interact with colleagues, competitors and vendors to exchange ideas and further explore business opportunities in a ‘top to top’ forum. The connections and decisions that are made in the 3 days of the conference would take many months to accomplish across the desk.” Deborah Romero Superior Grocers

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

CONFERENCE GOLF TOURNAMENT Hosted by The Illuminators

Sunday, September 21, 2014 7:00 AM Registration

8:00 AM Shotgun Start Mission Hills Country Club Rancho Mirage, CA www.illuminators.org

www.cgastrategicconference.com

Albertsons, LLC Bestway/Gardena Supermarkets Big Saver Foods, Inc. Bristol Farms Cardenas Markets Costco Wholesale El Super (Bodega Latina Corp.) Food 4 Less/Rancho San Miguel Food 4 Less/Foods Co. Fresh & Easy Gelson’s Markets Grocery Outlet Holiday/Sav-Mor Foods Mar-Val Food Stores Northgate Gonzales Markets Nutricion Fundamental, Inc. Raley’s Ralphs Grocery Co. Rio Ranch Markets Safeway Inc. Save Mart Supermarkets Smart & Final Stores Stater Bros. Markets Stump’s Markets Super A Foods Super King Markets Superior Grocers Times Supermarkets Vallarta Supermarkets Whole Foods Markets

CONTENTS

F E AT U R ES

COLU M NS

Authenticity

36 42

It’s no longer a given that supermarkets are worthy of consumers’ trust. For a brand – including retailers – to be authentic, it must remain true to its roots and convey that message to customers in everything it does.

Creating Convergence: Brand, Retailer and Shopper

President’s Message An Investment in Knowledge..................................6 From The Chair Educational Opportunities Abound.........................8 Viewpoint — Kevin Coupe For Amazon, A Summer Of Not So Much Love.....10

Shopper marketing is a discipline that focuses on the convergence of the manufacturers’ brands, the retailers’ market position and the shoppers’ needs. Understanding this convergence may help uncover opportunities to increase the effectiveness of collaborative shopper marketing programs.

Perspective Legislature Considering Three Onerous Labor Bills............................................ 34

Training Tomorrow’s Workforce: Where Industry and Academia Meet

CGA News..........................................................13

No longer is a college education simply students taking notes in lectures, reading books, and regurgitating everything they’ve learned. Today, the focus is on preparing students for the “real world,” including entering the workforce as experienced practitioners.

Helping Make Healthy Choices

| Issue 4

Grocers can play a significant role in helping to leverage consumers’ apparent desire for nutritional information and assistance in the health arena, and as a result help elected officials and policymakers reverse specific public health challenges.

DEPA RT M EN TS Foundation News................................................18 Member Profile...................................................20 Know the Law.....................................................25 Government Relations........................................28 Washington Report...................................... 30, 31 Supplier News.....................................................58 Wealth Management......................................... 59 Advertiser Index ............................................... 60

CALIFORNIA GROCERS ASSOCIATION President/CEO Ronald Fong

Vice President, Communications Dave Heylen Vice President, Business Development & Marketing Doug Scholz

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

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

Executive Vice President, COO Retail Marketing Services Jeff Snadow

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 F OR N I A G R OC E R

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

Executive Director, CGA Educational Foundation Shiloh London

CGA

| Board of Directors

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS

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

DIRECTORS

Chairman of the Board Mary Kasper Fresh & Easy

Second Vice Chair Kevin Konkel Raley’s

Secretary Jim Wallace Albertsons LLC

First Vice Chair Joe Falvey Unified Grocers, Inc.

Treasurer Diana Godfrey Smart & Final Stores

Immediate Past Chair Kevin Davis Bristol Farms

Dave Jones Kellogg Company

Bob Parriott Twain Harte Market

Dora Wong Coca-Cola Refreshments

Raul Aguilar Anheuser-Busch InBev

Robert Digrigoli Procter & Gamble

Dan Meyer Stater Bros. Markets

Mimi Song Superior Grocers

Jon Alden Jelly Belly Candy Co.

Brian Dowling Safeway Inc.

Omar Milbis Rio Ranch Markets

Mike Stamper Nestlé Sales Division

Renee Amen Super A Foods, Inc.

Kendra Doyel Ralphs Grocery Company

Phil Miller C&S Wholesale Grocers

Kim Stokes Unilever

Teresa Anaya Northgate González Markets

John Eagan Costco Wholesale

Hee-Sook Nelson Gelson’s Markets

Dirk Stump Stump’s Markets

Joe Angulo El Super (Bodega Latina Corp.)

Jon Giannini Nutricion Fundamental, Inc.

Keith Olscamp Campbell Soup Company

Tiernan Summins Kraft Foods Group, Inc.

Kevin Arceneaux Mondelez International, Inc.

Dick Gong G & G Supermarket, Inc.

Kelly Augustin United Markets, Inc.

Robin Graf Whole Foods Market

Chris Podesto Food 4 Less — Stockton/ Rancho San Miguel Markets

John Swindell Food 4 Less/Foods Co. (A Kroger Company)

Dennis Belcastro Hillshire Brands Company

Rickey Hamacher Bimbo Bakeries USA

Bob Richardson The Clorox Company

Paul Turcotte Pepsi Beverages Company — WBU

Jennifer Bosma Harvest Market

Michel LeClerc North State Grocery, Inc.

Paul Cooke Nestlé Purina PetCare

Eric Lindberg, Jr. Grocery Outlet, Inc.

Brent Cotten The Hershey Company

Dave Madden MillerCoors

Dennis Darling Foods Etc.

Casey McQuaid E & J Gallo Winery

Casey Rodacker Mar-Val Food Stores, Inc. Dean Ryan Tops Fresh Market Harish Solanki Big Saver Foods, Inc. Naresh Solanki Bestway/Gardena Supermarkets

Jim Van Gorkom NuCal Foods Kevin Young Young’s Payless Market IGA

Independents shine at Unified

We bring grocery retailers the products, programs and services they need to succeed. Partnering with Unified is always a bright idea.

Ph: 800-724-7762 | unifiedgrocers.com

PRESIDENT’S MESSAGE

An Investment in Knowledge RO N ALD F ONG President/CEO

Benjamin Franklin once said that an investment in knowledge pays the best interest. For several years now the CGA Educational Foundation Hall of Achievement program has featured remarks from a CGA member employee who has benefited from a Foundation college scholarship. Their messages are always poignant and personify the Foundation’s mission to advance the educational goals of CGA member employees. Like you, it’s gratifying to hear how grateful these recipients are and appreciative of the generous donations made to the program. We all know how education costs are skyrocketing. We need look no further than our own college scholarship program for confirmation. This year the Foundation received an astounding 1,749 college scholarship applications. More than double the year before. I’m happy to report that we will be awarding 296 deserving students a record $408,000 in assistance — a $48,250 increase over last year’s award total. In addition, the Foundation has awarded more than $55,000 in tuition reimbursement to CGA member employees looking to enhance their job skills through continuing education. We have now awarded since the Foundation’s inception just over 20 years ago nearly $3.5 million in scholarships, and well over $1 million in tuition reimbursement grants.

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

In 2013, the Foundation set an ambitious goal to host monthly industry education webinars. These webinars have been tremendously successful. They focus on the pressing issues

facing our industry today. A robust list of all our webinars is available at the Foundation’s website: www.cgaef.org. Looking forward Not to rest on its laurels, the Foundation’s Board of Trustees is working on a new strategic plan that will build on the programs in place and explore new education avenues. In an exciting new development, the Foundation is formalizing a partnership with Cal Poly San Luis Obispo’s Agribusiness Department in support of its newly created Food Retail and Supply Chain Management four-year degree program. Of course none of this could happen without the tremendous support of you, our members. Your generous contributions make this all possible. Earlier this year, we laced up our tennis shoes to induct the Amen Family (Jim, Jeanne, Joanne, and Renee), Super A Foods, and Kevin Arceneaux, Mondelez International, into the Foundation’s Hall of Achievement. Our two golf tournaments were tremendous successes as well. Proceeds from these events help fund the Foundation’s growing list of educational programs. On behalf of the Foundation’s Board of Trustees, I wish to thank our members in helping the Foundation reach new heights in providing invaluable educational opportunities. It is an investment in our industry’s future that, like Mr. Franklin said, pays the best interest. And finally, are your employees benefitting from Foundation programs? If not, I encourage you to contact the Foundation and discover why it’s one of your most important CGA membership benefits. Together we’ll help create a better future for our state and our industry. n

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FROM THE CHAIR

Educational Opportunities Abound M ARY K ASP E R CGA Chair of the Board Senior Vice President, General Counsel, Secretary Fresh & Easy

The CGA Educational Foundation provides numerous opportunities for member-company employees and their families to expand their personal growth and career development. I’m so proud of AG, the teenage daughter of a close girlfriend. This spring, AG was accepted to the prestigious California State Summer School of the Arts (CSSSA). CSSSA is an intensive 4-week residential program for talented high school students, with programs in animation, creative writing, dance, film/video, music, theatre, and visual arts. The CSSSA campus is located in Valencia, 25 miles north of downtown Los Angeles in the beautiful Santa Clarita Valley. AG lives in Sacramento. Her parents dropped her off at CSSSA in July with a mixture of pride and trepidation. Their daughter’s passion for writing would be sharpened and nurtured among a group of kindred spirits, but she knew no one. A month away, so far from home! AG landed in a competitive program that a college freshman would find daunting, much less a high school student.

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

I had the great privilege of visiting AG on Visitor’s Day halfway through the session. I came away incredibly impressed with the program and the caliber of the students. The kids were friendly and fearless, hungry to learn, forging connections and lifelong friendships. AG soaked up every bit of this unique experience, and most importantly, came away with the clarity that she is destined to be a writer and the confidence to make it happen.

Educational opportunities abound for us all, and there is always something new to explore. CGA supports personal growth and career development through its Educational Foundation. Since 1998, the Foundation has awarded nearly $3 million to member-company employees and their dependents. Tuition reimbursement is another Foundation pillar, with programs to help employees enhance job skills and their career path. Students taking job-related courses or courses in pursuit of a

degree are eligible to receive up to $150 of reimbursement for their tuition expenses, with a $750 annual cap. That’s a lot of classes and books! The Foundation also offers seminars, webinars and other resources that address important industry issues. The webinars are fantastic.

Educational opportunities abound for us all, and there is always something new to explore. This year’s CGA Strategic Conference offers a wonderful array of targeted educational sessions and signature keynote addresses from industry thought leaders. There are many choices: understanding and connecting with influential Millennials, socially conscious retailing, technology innovations, the new platforms of home delivery, mobile grocery, local food movements, and more. AG is now a California Arts Scholar, and her experience has challenged me to expand my lifetime learning. With the ever quickening pace of today’s retail environment, there is always something new to learn, from experts and from each other. I’m proud that CGA makes that easy to do. Inspired by AG, I’m committed to learn something new at the Strategic Conference. Looking forward to seeing you all there! n

VIEWPOINT

For Amazon, A Summer Of Not So Much Love KEV IN C OU P E

Today publishers are at risk. Yesterday it was the folks who made buggy whips, or eight-track tape players. There’s always someone threatened by change. It’s been quite a summer for Amazon. n

The company announced yet another dismal set of profit numbers, which got investors nervous about whether Amazon would ever make money. (The Amazon argument, on the other hand, is that it could make a profit if it wanted to…but that right now, the only way to maintain its competitive advantages is to keep investing in new services, technologies and initiatives…whether it is original content that you’ll only be able to watch on its site, or drones that will deliver products to your front door.)

And then, there’s the fight it has picked with Hachette, in which Amazon, seeking financial concessions that the publisher was unwilling to give, decided to delay the availability of Hachette-published books — even best-sellers — for weeks or months, actually encouraging shoppers to buy alternative titles not published by Hachette, or books by the publisher from other bookstores. This irritated a lot of authors and scared a lot of other publishers, who quite naturally think they’ll be next on Amazon’s hit list.

The company introduced its own smartphone, the Fire, which has received underwhelming reviews. (Of course, the speculation is that this is just Amazon’s latest tactic as it uses devices to create paths of least resistance to its site; the phone is just a sales tool.)

Simply put, the argument comes down to money. (Doesn’t it always?) But I also think that the issue shines a spotlight on Amazon’s competitive intentions.

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

The French passed a law specifically to eliminate any pricing advantage Amazon might have in that country, explicitly saying it is protecting independent booksellers. (Good luck with that. I think that independent booksellers would be better off if they were just forced to be competitive. It is a tough world out there. Get used to it. C’est la vie.)

Hachette claims that Amazon is simply looking to improve its bottom line by making unfair demands of the publisher…and that if it wins this round, it will simply embolden the e-commerce pioneer and put every supplier at risk. Amazon claims that publishers take too much money and deliver too little value…and that all publishers are doing in drawing a hard line is attempting to build a moat around an

VIEWPOINT

hakuna_jina/iStock Editorial/thinkstock

current approach, but there also are those who have found a voice and an audience because Amazon has democratized the publishing and book-buying experience (I happen to be one of those authors, by the way. The book that Michael Sansolo and I wrote never stood a chance of getting into Barnes & Noble, but it remains a relatively robust seller on Amazon. I have a vested interested here.).

increasingly endangered business model. And while moats may delay the inevitable, they do not protect a castle’s inhabitants from the future. Let me ask and answer three questions that I think are relevant to this debate, which could have implications for every retailer with which Amazon competes and every supplier from which it sources product.

The only thing that is for sure is that there will be a tomorrow, somebody’s livelihood will be threatened, and someone will be trying to reinvent the future. Why is it about more than money?

Why is this no mere white hat vs. black hat debate?

And why is this a debate to which every retailer and supplier should pay close attention? Quite simply, because while the battle may be playing out on one field with two combatants at the moment, it is simply part of a larger war that will envelop us all, as new and old companies on both the retailer and supplier sides seek differential advantages and some sort of sustainable business model that will give them relevance in the eyes of consumers. Amazon just recently became one of the nation’s 10 biggest retailers. It didn’t get there by being complacent, and it’s a pretty good bet that somewhere out there, a company or person, is plotting how to make Amazon irrelevant. It won’t be by building a moat. It will be by building some new sort of bridge. Today it’s publishers at risk. Yesterday it was the folks who made buggy whips, or eight-track tape players. There’s always someone threatened by change. The only thing that is for sure is that there will be a tomorrow, somebody’s livelihood will be threatened, and someone will be trying to reinvent the future. I’d put money on the latter. n

Because life is never that simple. There are authors and readers who are being hurt by Amazon’s

Even if Amazon ends up capitulating in this particular argument — after all, it has been getting a fairly decent beating in the media, which has its own gatekeeper status to worry about — does anyone doubt it will simply look for another opportunity to pursue its own agenda, which some will see as pernicious, and others will see as positive.

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

Because it is about value and relevance and why perhaps the old rules of this particular game may no longer apply. Even if you accept that Hachette’s position is correct, and that Amazon is run by infidels who see no difference between books and widgets and are willing to bring suppliers to their knees over a few dollars and cents (something that it has in common with every other big retailer, by the way), it may not matter because Amazon has shone a bright light on the fact that from a distribution and technology perspective, publishers may have outlived at least part of their usefulness.

At the same time, publishers are right to be concerned about too much power in the hands of one retailer. Though one has to remember to take this concern with a grain of salt. After all, it may just be that they are worried about the fact that they used to be the gatekeepers, and that Amazon has taken away their power.

Congratulations To All CGA Scholarship Recipients!

Alejandro Alvarez

Paulina Alvarez

Viridiana Ayala

Adilene Bravo

Jennifer Cabrera

Martin Castro

Andrea Hernandez

Jeanette Hernandez

Ruben Hurtado

Adan Maldonado

Jesus Mariscal

Ricky Ortuno

Victoria Rivas

Alejandra Bacilio

Karina Barajas

Edgar Barron

Rosa Cervantes

Carlos Hermosillo

Alondra Hurtado

Ruth Lozano

Ernesto Magana

Jesus Mathus Garza

Paola Mathus Garza

Sydney Nishida

Julianna Oropesa

Kyle Prost

Nicholas Radanovich

Leslie Ramirez

Brianna Rivas

Hector Rivas

Cynthia Rodas

Melissa Rodriguez

Margarita Vargas

Desiree Vera

Arielle Viveros

PERFECT WEATHER WELCOMES NORTHERN CALIFORNIA GOLFERS More than 150 grocery retailers, suppliers and wholesalers gathered together to participate in this year’s CGA Educational Foundation Northern California Golf Classic and Illuminators Rally on Tuesday, July 22 at the beautifully manicured course at Blackhawk Country Club in Danville, Calif. Supplier attendees enjoyed hearing from Tim Murphy, V.P., GMM for Costco Wholesale. In addition, Long Drive Professional Damien Payne showed off his long ball skills on the course to help raise money for the Foundation. The Foundation also wishes to thank The Illuminators for hosting the morning breakfast, and Frito-Lay for providing lunch on the course. n

NORTHERN C ALIFORNIA TOURNA MENT WINNERS First Place

Third Place

Score: 56 Sharon Chaney Chris Oleson Ken Ditty Nick Quast

Score: 58 Eric Slabaugh Barry Bounds Glen Roeper Stan Chavarria

Second Place

Closest to the Pin

Score: 57 Micah Shea Ed Corvelo Shawn Dagen CJ Givens

Mens — Nic Quast 10’4″ Womens — N/A

Continued on p. 14

CGAEF Trustees (L:R) Jim Van Gorkom, The winning foursome: Sharon Chaney, NuCal Foods, Brad Askeland, North State Chris Oleson, Ken Ditty, Nick Quast, Dr. Grocery, Inc., and Paul Turcotte PepsiCo, Pepper Snapple Group. with Tracy Lape, NuCal Foods.

Long Drive Mens — Barry Bounds Womens — Tracy Lape

Jerry Pierson, Steve Warne, Dennis Spiller, and Jon Alden, Jelly Belly Candy Company.

Sam Guerra, Kellogg Company, Dave Jones, Kellogg Company, Hector Gonzalez Jr, Northgate Markets, Alex Cabrera, Northgate Markets.

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

Hank Mayhew, La Huerta USA, George Galanos, La Huerta USA, Donna Tyndall, Gelson’s Markets, Mike Ketcham, Albertsons.

C GA N EWS

Industry Tees It Up For CGA Foundation

CGA NEWS

Continued from p. 13

T H A N K YO U S P O N S O R S The Foundation wishes to thank the following tournament sponsors:

Tim Murphy, GMM of Costco Wholesale, spoke to supplier attendees during the Industry Forum.

Master Sponsors

The Boston Beer Company

Anheuser-Busch InBev Bimbo Bakeries USA The Hershey Company Kellogg Company Moss Adams, LLP Mondelez International Safeway Inc. Synder’s-Lance, Inc. Unified Grocers, Inc.

Package Sponsors

Hole Sponsors

Professional baseball player and legend Cal Ripken Jr addressing the crowd during the Industry Forum.

Canada’s Select Brews/2×4 Coca-Cola Refreshments Co-Sales Nor Cal In Store Corp Key Refrigeration La Tortilla Factory MillerCoors Nutricion Fundamental, Inc. PAQ Inc/Food 4 Less Retail Solutions

C&H Sugar/Domino Foods C&S Wholesale Grocers Cacique USA ConAgra Foods Crystal Creamery Dr. Pepper Snapple Group Fisher Printing, Inc. Frito-Lay Hansen Beverage Company Jelly Belly Candy Company Kraft Foods MOM Brands NuCal Foods Pepsi Beverages Company Procter & Gamble Sugar Bowl Bakery Snyder’s-Lance, Inc. Taylor Farms Unilever

IRON MAN ADDRESSES SOUTHERN CALIFORNIA GOLFERS

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

More than 240 grocery retailers, suppliers and wholesalers participated in this year’s CGA Educational Foundation Southern California Golf Classic and Illuminators Rally. Slightly cooler weather greeted this year’s field with temperatures staying in the low 90’s.

The Foundation also wishes to thank The Illuminators for hosting the morning breakfast, and Bristol Farms and Cardenas Markets Foods for providing lunch on the course. Iron Man Addresses Attendees

The tournament returned to Industry Hills Golf Club at Pacific Palms in Industry, Calif. Both courses, “Babe” and “Ike,” were in top shape for the event.

Prior to the tournament, attendees heard from professional baseball legend Cal Ripken Jr. His presentation was sponsored by Kellogg Co. Ripken shared his life story including his years in the MLB.

The Foundation wishes to thank the sponsors listed below for their generous support of this year’s tournament. Proceeds from the event go to support the Foundation’s College Scholarship and Tuition Reimbursement programs.

In addition, Ripken discussed the importance of education and teamwork and commended the Foundation for its ambitious educational programs, including providing college scholarships and tuition reimbursement. n

CGA NEWS

The Illuminators provided an omelet station for the golfers.

The winning foursome: Ed Billings Tropical Preserving Co, Dean Billings, Tropical Preserving Co, Jim Amen, Super A Foods, Dan Kupfer, Roger Dunn’s.

Long Drive Professional Damien Payne.

SOUTHERN C ALIFORNIA TOURNA MENT WINNERS “ I K E” C O U R S E First Place  Score: 51 Ed Billings Dean Billings Jim Amen Dan Kupfer Second Place Score: 57 Glen Roeper

“ B A B E” C O U R S E Bob Kennedy Joe Hankerson Dennis Yamamoto Third Place Score: 58 Joe Falvey Denny Belcastro Brad Cooper Randy Scoville

First Place Score: 60 Renee Amen Dorie Amen Matt Amen Tyler Schmidt Second Place Score: 61 Jack Gyben

Miguel Garcia Tom Payne Tony Garcia Third Place Score: 61 Jerry Whitmore Pat Posey Doug Poling Grant Poling

T H A N K YO U S P O N S O R S The Foundation wishes to thank the following tournament sponsors: Master Sponsors

The Cardenas Markets team providing lunch on the course.

Anheuser-Busch InBev Bimbo Bakeries USA Coca-Cola Refreshments Kellogg Company Mondelez International Moss Adams Safeway Inc. The Hershey Company Unified Grocers, Inc.

The Illuminators provided a breakfast burrito station for the golfers.

Alta Dena Dairy C&S Wholesale Grocers Cardenas Markets CMC Sales and Marketing Farmer John Gallo Wine Company Gelson’s Markets Heineken USA

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

Package Sponsors

Jelly Belly Candy Company Kraft Foods La Huerta USA Mike’s Hard Lemonade Mission Foods MOM Brands Nestle Sales Division Northgate Markets Nutricion Fundamental, Inc. Pepsi Beverages Company Perimeter Sales & Marketing Procter & Gamble Progressive Produce Sanderson Farms Snyder’s-Lance, Inc. Southern Wine & Spirits Southwind Foods Super A Foods Tropical Preserving Co. Whole Foods Market

Visit us at Booth 106 and enter to win a luxury vacation for two!

CGA EDUCATIONAL FOUNDATION

UPCOMING INDUSTRY WEBINARS and EVENTS Webinars are free for CGA members. $75 for non-members. Learn More & Register at www.cgaef.org W E B I NAR S Wed, Oct 8

Lawfully Selling Shelled Eggs in California

10 AM (PST)

Speakers: Dale Stern, Downey Brand Attorneys, LLP. John McCarron, Downey Brand Attorneys, LLP.

The legal landscape for the sale of shelled eggs in California will dramatically change on January 1, 2015. On that date, Proposition 2 (Health & Safety Code §§ 25990-25994), AB 1437 (Health & Safety Code §§ 25995-25996) and California Department of Food and Agriculture regulations (3 CCR §§ 1350 and1354) take effect. These laws govern the permissible enclosure size for egg-laying hens and define the shelled eggs that are lawful to sell in California. AB 1437 imposes criminal penalties on anyone who sells shelled eggs in violation of the law. This webinar will focus on the requirements of these laws and on steps California retailers can take to make sure they are lawfully selling shell eggs beginning January 1, 2015. Wed, Oct 22

Trends in Fleet Conversion

10 AM (PST)

Speakers: Representatives from Kroger, UC Davis Policy Institute forEnergy, Environment, and the Economy, Clean Energy Renewable Fuels, and E2 ManageTech

An educational and informative webinar on Trends in Fleet Conversion: a) providing members with current updates on the policies and regulations; b) important considerations when evaluating your fleet; c) the business cases for fleet conversion; and d) case study documenting the transition from diesel to natural gas. Currently, diesel fuel powers a majority of California’s freight sector, including trucks, trains, and ships, thereby, the largest contributor to ozonecausing nitrogen oxide emissions and diesel particulate pollution. The California Air Resources Board (CARB), the San Joaquin Valley and South Coast Air Districts support widespread adoption of zero and near zero tailpipe emission technologies in order to meet the State’s air quality and climate goals.

New Laws for 2015

10am (PST)

Speaker: Louie A. Brown, Jr. , Attorney at Law Kahn, Soares & Conway, LLP

During this important webinar, you will learn more about new laws that will significantly impact grocery companies in California and begin to determine whether your company must comply.

CGAEF Scholarship Application Process Opens January 1, 2015 Online at www.cgaef.org

CGAEF Hall of Achievement Spring 2015

CGAEF Scholarship Application Process Closes April 1, 2015 Online at www.cgaef.org

CGAEF Golf Classic — So. Cal. July 8, 2015 Pacific Palms Resort Industry, CA

CGAEF Golf Classic — Nor. Cal. July 21, 2015 Blackhawk Country Club Danville, CA

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

Wed, Dec 10th

UPC O M I N G E V E N T S

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AS PART OF THE CGA/CIGA MERGER, THE CGA EDUCATIONAL FOUNDATION BOARD OF TRUSTEES WAS EXPANDED TO INCLUDE AN APPOINTEE FROM THE NEWLY CREATED INDEPENDENT OPERATORS COMMITTEE. At the July meeting, the CGA Boards of Directors approved the appointment of Kelly Augustin to the CGAEF Board of Trustees. Kelly is the daughter of Bill Daniels, owner of United Markets in San Rafael and San Anselmo. She started her career at United Markets as a courtesy clerk at the age of 15, and has since graduated from St. Mary’s College with a degree in business. Kelly is vice president of Human Resources at United Market.    How did you get started on your career path? “I began working at the market when I was 15 as a courtesy clerk and over the next seven summers I would return to learn all I could about the grocery business. I worked as a checker, then a head clerk, and when I graduated from St. Mary’s College, I chose to work full time for our family business alongside my father. Since then I have ‘worn many hats’ and continue to learn something new everyday.”

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What is your leadership style and approach to different challenges?

“I believe in leading by empowering. I prefer to teach and then allow the person to experience and add their ideas to the task at hand. I don’t believe I know how to do everything, and I enjoy seeing others succeed at overcoming a challenge. There is so much reward in that. “I have the opportunity to work with 135 employees. Each one has strengths and weaknesses, just like we all do. With patience and understanding, together we can overcome these challenges. With so many personalities, there are days when I feel like I have 135 balls in the air, but each one teaches me something and I am getting better at juggling!”

What advice can you give to women starting out with their own business?    “My advice to a woman starting her own business is to treat it as if it is a child and you are its mother. Trust yourself, and in your instincts. Be flexible. As woman, we have an opportunity to be tender, kind, and compassionate. Love your business, but know there will be days when you don’t like it. Just like being a mother, there will be times when you do just the right thing, and other times, when you don’t have a clue what to do. That’s ok. Just like your children teach you things about yourself, your business will reveal things to you as well.”

I believe in leading by empowering. I prefer to teach and then allow the person to experience and add their ideas to the task at hand. What do you always have with you and find indispensable? “What I always have with me that is indispensible, is my tenacity. I know that I can accomplish anything I decide to do. Don’t tell me I ‘can’t’ do something. That is just an open invitation!” What is your motto? “My motto: Listen. Ask questions. And listen some more.” n

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MEM B ER P R O FLIE

Local Residents “Like” Foods Etc. HUMAN BEINGS, RETAILERS MOST OF ALL, HAVE AN INHERENT NEED TO BE LIKED. BUT WHEN YOU’RE LIKED ON FACEBOOK BY 3,000 PEOPLE IN A 4,000-PERSON TOWN, YOU MUST BE DOING SOMETHING RIGHT.

That’s the enviable position in which Dennis Darling, owner of Foods Etc., IGA, Clear Lake, Calif., finds himself these days. But Darling, who also coowns the Susanville, Calif., IGA store with partner Rick Stewart, knows that popularity is not just about selling groceries at the right price, but becoming a part of the community in which you operate. Darling, whose stores are five-star award winning IGAs, and three-time winners of the “IGA International Retailer of the Year,” grew up in the grocery business and has been a proponent of community-oriented retailing for the past 30 years.

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“I started bagging groceries when I was 16 and never left,” Darling says.

Darling along with his wife Ruth opened their first store in Lakeport, Calif., in 1983. Later, they partnered with Rick and Anna Stewart and opened the 30,000 -square-foot Susanville store in 1998. “The primary economic engine in Susanville are two California correctional facilities,” he says. He then purchased the 22,000 -square-foot Clear Lake store.

But in making that purchase he had to make the tough decision to sell his first store. “At one time, Clear Lake was something of a resort town, and there is still a lot of hunting and fishing in the area,” Darling says. Despite significant chain competition in the area, Darling believes he has the advantage in one of the most hotly contested departments in supermarkets — center store. This is the result of a combination of effective merchandising and marketing techniques, such as in-store displays, social media and in-store marketing. “Selling center store is a little easier in these communities because we’re not near metro areas,” he says. “Both stores compete with major chains. We use the IGA label to differentiate ourselves and we’ve been very competitive since C&S has been our wholesaler.” But, according to Darling, success also depends on in-store execution and having an owner onsite. “Being an owner means being involved in everything — including training employees,” Darling says. “I

MEMBER PROFILE

think we’re pretty good at having the right items at the right price on the shelves and endcaps.” Much of that results from the expertise and dedication of his employees, Darling says, noting that the store wins many of the contests that are regularly held in the IGA group for the best endcap and aisle displays. “We’re also very proud of the promotions we do in meat, produce and frozen foods, in addition to the sales and promotions that are supported by our wholesaler and IGA — things like Kidsfest which really gets people into the stores,” he says. These promotions are carried through to the full service delis and bakeries in both stores, including the scratch operation in Susanville. “Distribution in bakery and deli is over 10 percent of sales and is a key driver in our stores,” Darling adds.

“It’s been a great way to communicate what’s going on in the stores and brag a little bit about the events we’ve had,” Darling says. “But it goes deeper than that.” For example, he says, when the power goes out in Susanville, the local power company feeds their updates to the store and Anna posts them to social media for residents with battery powered computers and smart phones. At other times, it’s a matter of doing a little bit extra. “One of our local town leaders was in here this morning,” he says. “There’s a big fundraiser going on and we got them two pallets of oysters for the event. He knows we’ll take care of things and get them great product at a great price.” Darling says neither communities have a particularly young demographic.

Everything done at the stores is bolstered by the use of in-store radio, which focuses on creating brand awareness, and promoting holidays and other events to drive shoppers to seasonal aisles.

“Maybe that’s why there’s still a focus on Facebook,” he mused. “It’s the little things we do that gain the trust and loyalty of our customers. What keeps us alive is that we are the community center in both towns. It’s not just about price and products.”

Backing up everything else is the company’s efforts in social media.

Nonetheless, both those elements are among the biggest challenges facing independents.

“Facebook is still a big deal in both our towns,” Darling says. “I know some areas have already moved on to Twitter, Foursquare and other sites, but Facebook is still the major social media site in both Clear Lake and Susanville.”

“We are always looking for equal access to products and deals,” he says. “As chains get bigger they tend to get more of vendors’ time and promotional spending. It’s a constant battle to make everyone aware that we may not have 1,000 stores, but there are 4,000 independent operators out there and we do a huge amount of business. We just want to be treated fairly when promotional money is being spent.”

He credits Anna Stewart with starting the use of social media in Susanville. “It’s been better than anyone expected,” he admits. “Now we’re doing the same thing at our other store.

Continued on p. 23

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

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MEMBER PROFILE

Continued from p. 21

The big advantage of being an independent, according to Darling, is being closer to the business and making it a way of life 24/7. “When you called I was on the floor throwing freight,” Darling admits. “That’s the way it is with most independents, we love the business, and live it day in and day out.” Asked if he would consider expanding to a third store, Darling said that the company is “happy and busy,” but would consider expanding if the right situation presented itself. “If you buy more locations,” he says, “you can lose that connection with your community and that’s very important to us.” Darling says it can be expensive keeping a store updated, particularly in areas were customers don’t see it.

“But if we didn’t continually reinvest in the stores, we wouldn’t still be here after 30 years,” he quips, “And we hope to be here another 30.” n Len Lewis, a veteran retail industry journalist and columnist for publications in the U.S. and Europe is editorial director of Lewis Communications, Inc., and the author of “The Trader Joe’s Adventure - Turning a Unique Approach to Business into a Retail and Cultural Phenomenon”. He can be reached at lenlewis@optonline.net. Or at www.lenlewiscommunications.com.

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K N O W T HE L AW

The Food Safety Modernization Act: Impact on Food Importation On July 26, 2013, the federal Food and Drug Administration (FDA) released two proposed rules governing the importation of foreign foods into the United States pursuant to the Food Safety Modernization Act (the “Act”): the proposed rule on Foreign Supplier Verification Programs, also known as FSVPs, and the proposed rule on the Accreditation of Third-Party Auditors.

These new rules shift the burden of verifying food safety from the foreign supplier to the domestic “importer,” who, under the proposed rules, would face significant consequences for noncompliance. Importing, or even offering for import, a food without having a compliant verification program is a prohibited act subject to injunction and criminal prosecution. Furthermore, an article of food is subject to refusal of admission if it appears that an importer failed to follow a verification program. The comment period for both proposed rules ended on Jan. 27, 2014. The FDA is considering the comments submitted and will adopt a final rule, set to be published in the Federal Register as a binding regulation on Oct. 31, 2015.

Background

Given the fact that approximately 15 percent of U.S. food is imported, the proposed rules establish requirements to ensure that foreign suppliers are implementing the modern, prevention-oriented food safety practices mandated by the Act. Proposed Rule for Foreign Supplier Verification Programs Overview Under the proposed rule for foreign supplier verification programs, importers are required to perform certain risk-based activities to verify that food imported into the United States has been produced in a manner that provides the same level of public health protection as that required of domestic food producers. “Importers” are required to ensure that imported food is compliant with FDA regulations and conduct activities and procedures to verify that compliance. For purposes of the proposed rule, an “importer” is

Passed by Congress in 2011, the Act gives the FDA broad regulatory authority over food safety. As part of this authority, the Act directs the FDA to enact new regulations aimed towards strengthening the

oversight of foods imported for U.S. consumers, with a focus on foreign suppliers and U.S. importers.

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The FDA is proposing a compliance date of as early as six months after the publication of the final rules, leaving little time for importers to develop and begin implementing verification programs.

Ryan Pierse/Getty Images News/ Thinkstock

Under the proposed rules, “importers” will be required to develop and implement rigid foreign supplier verification programs to ensure that imported food is compliant with FDA regulations. The broad proposed definition of “importer” may encompass not only suppliers who manufacture, import, broker and sell food to grocery stores, but also the retailers themselves.

Continued on p. 26

K N O W T H E L AW

Continued from p. 25

defined as the U.S. owner or buyer of the food at the time of entry, or, if there is no U.S. owner or buyer, the U.S. agent or representative of the foreign owner. This definition of “importer” includes food brokers and suppliers, but is broad enough to also include grocers themselves in certain circumstances. As currently drafted, the proposed rule will require importers to develop, maintain and follow a verification program for each food imported which includes the following elements: a. review of the compliance status of food before

importation, b. hazard analysis, c. verification activities which could include

periodic auditing and sampling of food, d. review of complaints received for the food

imported, e. recordkeeping requirements, f. importer identification, and g. reassessment of verification programs within

three years of establishing the programs. The key element of such a program is the verification activities. Under the proposed rule, the FDA presented two options for determining what constitutes appropriate verification activities. The key difference between the options is that Option 1 requires an on-site audit for hazards that have a reasonable probability of causing serious adverse health consequences or death to humans or animals, whereas Option 2 allows importers to choose between an on-site audit, periodic sampling or testing of imported food, or other appropriate practices.

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The FDA’s goal is that verification programs will strengthen the oversight of foods imported for U.S. consumers.

In an attempt to alleviate some of the burdens imposed by the proposed rule, the FDA exempts certain food products from coverage and provides alternative procedures to avoid duplication of efforts where safety regulations are already in place or for administrative expediency when the safety risk is reduced.

For example, imports of juice, fish and fish products, which are already regulated under the FDA’s Hazard Analysis and Critical Control Points procedures; food for personal consumption; alcoholic beverages; food that is not transshipped; food for re-export; and food for research or evaluation are exempt from the rule. Dietary supplements, low-acid canned food and small food importers would also be governed by modified procedures. Proposed Rule on Accreditation of Third-Party Auditors Overview Concurrently with the proposed rule for foreign supplier verification programs, the FDA proposed a rule that would establish a program for the accreditation of third-party auditors for foreign food facilities. Under this program, the FDA would recognize accreditation bodies, which would in turn accredit third-party auditors to, among other things, conduct food safety audits, and issue certifications for foreign facilities and food under specified programs. The accredited third-party auditors would be used to conduct food safety audits as part of the verification programs and in connection with the planned Voluntary Qualified Importer Program, which would allow for expedited review and entry of food into the United States. The proposal sets forth the requirements for accreditation bodies (e.g. foreign government/agency or private third party) and third-party auditors/ certification bodies (e.g., foreign government, foreign cooperative, or other third party) including how accreditation bodies are recognized by FDA and how third-party auditors/certification bodies are accredited by the accreditation body. The accreditation bodies would be required to monitor performance of the third-party auditors, assess third-party auditors for accreditation, submit reports to the FDA, and maintain and provide the FDA access to records. The third-party auditors would audit and issue certifications for foreign facilities and food. The third-party auditors would be responsible for conducting audits, submitting reports of the audits for certifications purposes, and notifying the FDA upon findings that could affect public health.

K N O W T H E L AW

Legal Effects of the Proposed Rules Unless a retailer is a direct importer, the burdens of complying with the proposed rule for foreign supplier verification programs will likely fall to importing suppliers. However, grocers who rely on brokers to import food may still meet the definition of “importer” under the proposed rules and be required to comply with the mandates of the rules when finalized.

with verification program requirements, including the use of accredited third-party auditors, and all of the components of the Act and its implementing regulations. n Ashley Porter is an Associate in the Environmental Law and Food & Agriculture Practices at Downey Brand, LLP in Sacramento, California. Ashley focuses in the areas of environmental litigation and regulatory compliance.

Moreover, even grocers and retailers who do not fit the definition of “importers” under the proposed rule need to be aware of the new regulatory requirements facing their importing suppliers, in the context of the proposed rules for both verification programs and third-party auditors.

Harveen Gill is an Associate in the firm’s Food & Agriculture Practice. Harveen’s practice focuses on general litigation issues for food producers, processors and retailers.

Christopher Burton is an Associate in the firm’s Litigation and Food & Agriculture Practices, with a focus on commercial litigation.

Grocers should carefully draft their agreements with importing suppliers in a way that represents and warrants that the suppliers are complying

Congratulations to the 2014-2015 CGA Educational Foundation scholarship recipients

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GOVERNMEN T R EL AT IO N S

CGA Helps Defeat Harmful Legislation IN LATE JUNE, THE CALIFORNIA GROCERS ASSOCIATION ACHIEVED SEVERAL IMPORTANT LEGISLATIVE VICTORIES ON BILLS THAT WOULD HAVE BEEN DISASTROUS FOR CALIFORNIA’S BUSINESS CLIMATE. Sponsored by plaintiffs’ lawyers, labor groups and others, the three bills before the State Legislature would have expanded lawsuit opportunities, increased the minimum wage (again), and allowed more local property taxes. They included: SB 1188 (Jackson) — CLRA Expansion The Consumers Legal Remedies Act (CLRA) makes unlawful certain acts identified as unfair methods of competition, and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result, or which results, in the sale or lease of goods to any consumer. Sponsored by the Consumer Attorneys of California, SB 1188 would have substantially expanded state law by providing that, in product liability lawsuits against manufacturers and retailers, “materiality” would be expanded to include any omission, not just those in which a product poses a threat to health or safety of the consumer. The author withdrew the bill prior to its scheduled hearing in the Assembly Judiciary Committee after having passed the Senate with the bare minimum of 21 votes.

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CGA argued that this bill would have created new, unwarranted lawsuits by significantly expanding litigation under the CLRA. The association argued that existing law already allows lawsuits for fraud and misrepresentation, and the examples used by the bill’s proponents are already actionable under the CLRA and common law, regardless of whether the activity occurred within or outside of the warranty period.

Fundamentally, the bill would have changed the law in a way that the courts have been unwilling to do. No other state has such an expansive theory of liability for manufactured products. The only area current law does not already reach is an omission concerning a product defect manifesting itself outside the warranty period which does not involve health or safety. Senate Bill 1188 would make those actionable.

By doing so, this bill would have encouraged meritless product liability class action litigation against manufacturers and retailers. California would have become a magnet for nationwide class action litigation that could not be brought in any other state. And the increased cost of litigation against manufacturers and retailers would have significantly driven up the price of consumer products. SB 935 (Leno) — Minimum Wage Hike Existing law requires that on July 1, 2014, the minimum wage for all industries must not be less than $9 per hour. The law further increases the minimum wage, on Jan. 1, 2016, to not less than $10 per hour. Senate Bill 935 would have increased the minimum wage on Jan. 1, 2015, to not less than $11 per hour, on Jan. 1, 2016, to not less than $12 per hour, and, on and Jan. 1, 2017, to not less than $13 per hour.

Senate Bill 935 would have increased the minimum wage on Jan. 1, 2015, to not less than $11 per hour, on Jan. 1, 2016, to not less than $12 per hour, and, on and Jan. 1, 2017, to not less than $13 per hour. To make matters worse, SB 935 would have required the automatic adjustment of the minimum wage annually thereafter to maintain employee purchasing power diminished by the rate of inflation during the previous year. The adjustment would be calculated using the California Consumer Price Index. The bill failed passage in the Assembly Labor & Employment Committee after having passed the Senate. California employers are already facing significant cost increases over the next several years including higher sales and income taxes under Proposition 30, higher workers’ compensation rates, reduction in the federal unemployment insurance credit, increased

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

energy costs, and increased costs associated with the implementation of the Affordable Healthcare Act. In addition, automatically indexing the minimum wage to inflation has always been troubling to the business community because it fails to take into consideration other economic factors or cumulative costs to which employers may be subjected.

An increase in the state minimum wage would not only increase hourly employees’ wages, but also salaried employees’ compensation. Notably, in February 2014, the Congressional Budget Office (CBO) issued a report regarding the impact of the proposal to raise the federal minimum wage to $10.10 an hour. The CBO concluded that, although some low-wage workers would receive a higher income through the increase, “some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed, would probably fall slightly.” An increase in the state minimum wage would not only increase hourly employees’ wages, but also salaried employees’ compensation. In order for employees to qualify as “exempt” under any of the six exemptions in California, they must meet the salary-basis test, which is two times the monthly minimum wage.

SB 1021 (Wolk) — School District Parcel Taxes

In addition, SB 1021 would have authorized a school district to treat multiple parcels of real property as one parcel of real property for purposes of a qualified special tax in cases where the parcels are contiguous, under common ownership and constitute one economic unit. The bill would also allow school districts to assess unlimited parcel taxes on commercial and industrial property at a rate not to exceed twice the amount assessed upon residential property. It failed passage in the Assembly Revenue & Taxation Committee. The California business community viewed SB 1021 as authorizing all of California’s more than 1,000 school districts to impose tax increases on property owners by allowing non-uniform parcel taxes, further complicating an already complex property tax regime in this state. Senate Bill 1021 was introduced in response to the Borikas v. Alameda Unified School District case, which was issued by the First District Court of Appeal on Dec. 6, 2012. In that case, the appellate court ruled that the school district’s imposition of non-uniform parcel taxes violated Government Code Section 50079. The Alameda Unified School District taxed commercial parcels larger than 2,000 square feet at a higher rate (up to $9,500 per year) than residential and small commercial properties (about $195 per year). n

Under existing law, any school district may impose qualified special taxes within the school district’s boundaries pursuant to certain specified procedures.

Senate Bill 1021 would have provided that special taxes that apply uniformly include any special taxes imposed on a per parcel basis according to the square footage of a parcel, or the square footage of improvements on a parcel, according to the classification of a parcel, as well as at a lower rate on unimproved property.

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If SB 935 were implemented as proposed, that amount in January 2017, would rise from the current annual salary of $33,280 to at least $49,920, which is an increased cost to employers of over $15,000 per exempt employee. An increase in minimum wage also drives up workers’ compensation costs, uniform/ tool reimbursements, overtime, and consumer prices. These additional costs will significantly burden those companies that may not ordinarily pay minimum wage, yet will suffer a negative impact as a result of the proposed increase.

Existing California law defines these “qualified special taxes” as those that apply uniformly to all taxpayers or all real property within the school district and may exempt certain persons (such as those over 65 years of age).

WASHIN GT O N R EP O RT

Independent Grocers Are a Powerful Voice THE 2014 MIDTERM ELECTIONS ARE QUICKLY APPROACHING AND MANY STATES HAVE ALREADY COMPLETED PRIMARY ELECTIONS, INCLUDING CALIFORNIA, WHICH WAS HELD IN EARLY JUNE. INDEPENDENT RETAIL GROCERS CAN PLAY AN IMPORTANT ROLE IN FURTHERING THE GROCERY INDUSTRY’S AGENDA. Leading up to the midterms, the focus in both the U.S. House of Representatives and Senate has shifted to how one party can put blame on the other as opposed to working together to constructively get things done. With that said, it is even more vital that our representatives hear directly from you about how the laws they pass directly effects your businesses, the communities you serve, and ultimately, your bottom line. The right to petition the government was a core principle of the Founding Fathers, and grassroots involvement from trade associations, such as the National Grocers Association and the California Grocers Association, is the most effective way for independent grocers to be heard in the halls of Congress, and at the state and local levels of government. Independent grocers have a comparative advantage in the grassroots process because their stores are staples in communities across the country and have an enormous economic impact on local, state and national economies.

Peter Larkin President/CEO National Grocers Association

The independent grocery industry has a huge impact on America’s economy with $131 billion in sales, nearly one million jobs, and $30 billion in wages. In California alone, independent grocers are responsible for creating over 105,000 stable, reliable jobs and over $3.89 billion in wages.

The independent grocery industry has a huge impact on America’s economy with $131 billion in sales, nearly one million jobs and $30 billion in wages. As a business owner, job creator and taxpayer in your state and district, you have a powerful voice in shaping the outcome of legislation that could have an impact not only on your store, but on the entire independent grocery industry. With such a large economic footprint, we need to ensure we are heard and represented. In an effort to further a unified voice of independent grocers on Capitol Hill, NGA launched a new Political Action Center, www.GrocersTakeAction.org. Heading into this year’s elections, the NGA Political Action Center will enable independent grocers to connect directly with their federal legislators on a number of platforms, while also integrating NGA grassroots efforts with the NGA Grocers PAC.

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I’d encourage you to use the NGA Political Action Center as a tool to get yourself and even your employees informed and more involved in the political process.

While there are various grassroots advocacy tactics you can employ, it is all a part of a process of making sure that the voice of the independent grocer — your voice — gets heard where and when it most counts. n

Jupiterimages/Goodshoot/ Thinkstock

THOSE WHO HAVE VISITED WASHINGTON D.C. IN AUGUST WILL AGREE THAT THIS TIME OF YEAR IN THE NATION’S CAPITAL IS A SWAMP — A QUAGMIRE — AN AWKWARD, COMPLEX OR STICKY SITUATION. This definition is as true of the climate as it is the political environment. During August, senators and members of Congress return to home to escape this quagmire that has been created when an entire House of Representatives and one-third of the U.S. Senate must face voters in November for their biannual performance review. In terms of gaining their attention to discuss industry issues, this “district work period” serves as the perfect opportunity. It’s their final month home before the November election, and a period of potentially fastpaced legislative activity after the election. This post-election period is referred to as the “Lame Duck” session because of the number of legislators who will be voting on bills, but have already been defeated. What a perfect time to invite your elected officials to your store, or distribution center, to give them a vivid picture of the policies we want them to support. Supermarkets have something every elected official wants and few other people have — lots of potential voters. The average bank branch employs 14 people. The average local union organization employs less than a handful. The average supermarket employs

nearly 100 people. And successful supermarkets have lots of customers — more than 13,000 per week. Where else can elected officials talk to customers aided by a perfect produce display?

This post-election period is referred to as the “Lame Duck” session because of the number of legislators who will be voting on bills, but have already been defeated. Invite your elected officials to your store/distribution center. Congress has most of August as a district or state work period to give them a chance to be in their home district, or state, and talk to voters, constituents and employers to learn what is on the mind of the people who elect them. They are looking for places to visit, especially those with voters, or great photo opportunities. You have both! Send FMI a photo in your store or parking lot with your member of Congress or senator, and we will send your store manager a flag that has been flown over the U.S. Capitol, perfect to fly at the store or display.

Show the deli case and the work done to ensure food safety. Or the cereal aisle and the voluntary “Facts Up Front” initiative to help customers find the products they want in order to achieve their

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

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

There are so many issues members of Congress must vote on that are brought to life in your store. Show them the banana display and how you label country of origin and might get written up if someone breaks a bunch of bananas apart. Show how you are going to have to label where meat was “slaughtered” — hardly the appetizing vision you are trying to achieve.

WA SHIN GT O N REPORT

Coming Home From the Swamp of Washington D.C.

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nutritional goals. Introduce them to your dietician if you have one in store. Show how labeling gluten-free items rather than those products that may contain gluten is a better solution for customers who want to avoid gluten, just as labeling GMO-free would make more sense than labeling those items that may contain GMO ingredients. Explain the challenge of determining and labeling the calorie count of a ripe watermelon before it is cut and placed in the deli/salad bar area if supermarkets are forced to comply with restaurant menu labeling rules. Explain how you help WIC and SNAP customers. Make sure you vote.

elected officials. In a congressional district with 750,000 voters, the leadership of the House of Representatives was completely turned upside down in June by 1 percent of the eligible voters not voting. For Californians, there is a silver lining with the election of one of your own, Kevin McCarthy, a Bakersfield deli owner, and the previous Majority Whip, to the position of Majority Leader in Congress. n To help engage with the electoral process, FMI has created a completely non-partisan Voting Resources web page www.bipac.net/page.asp?content=startpage&g=fmiacti on that can be used to find voter registration information, absentee voting deadlines, candidate information, an election outlook, and basic information about how our government operates (or doesn’t at times).

By not voting and not engaging your elected officials, you get stuck with a government determined by those who do vote and do meet with their

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

• Alicia Bernardino • Christopher Joseph Clark • Michael Clark • Jessica Contreras • Christina DominguezMarquez

• Megan Ewbank • Rigoberto Fernandez Martinez • Alejandra Gallegos • Katherine Gonzalez Leal • Hunter Stone

myfood4less.com • ranchosanmiguelmarkets.com

PERSPECTIVE

Legislature Considering Three Onerous Labor Bills

C HRI S M IC HE LI Legislative Advocate Aprea & Micheli, Inc.

The California Legislature has been busy this year debating and moving through the process a number of priority bills for labor unions in this state. A June article in the Sacramento Bee highlighted their three priority bills, all of which CGA has been lobbying against with other business trade associations. These three “job killer” bills would adversely impact every grocery business in California

resulted in businesses hiring fewer people, laying off employees, and providing fewer pay raises.

if enacted. These bills include: AB 1522 (D-Gonzalez), AB 1897 (D-Hernandez), and AB 2416 (D-Stone). They are strongly opposed by the employer community in general, and CGA in particular, because of their potential harm to California’s business climate if enacted.

California law authorizes employers to provide their employees paid sick leave. However, AB 1522 would provide that an employee who works in California for 30 or more days in a calendar year is entitled to paid sick days, to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th calendar day of employment.

AB 1522 (Gonzalez) would require all employers, both small and large, to provide up to three paid sick leave days to both full-time and part-time workers in California. CGA believes this bill will increase costs on all California businesses with the threat of statutory penalties and litigation for violations of the law.

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

While many large companies provide some form of paid sick leave, or PTO to full-time employees, AB 1522 would mandate paid sick leave be provided to even temporary, seasonal and parttime workers. Several studies cited by opponents state that paid sick leave laws in other states have

The bill would require an employer to provide paid sick days upon the request of the employee, for diagnosis, care or treatment of health conditions of the employee, or an employee’s family member, or for leave related to domestic violence, sexual assault, or stalking. It would prohibit an employer from discriminating or retaliating against an employee who requests paid sick days and would create a rebuttable presumption in that regard. AB 1897 (Hernandez) would unfairly impose liability on a business that contracts with another employer that provides labor or services to that business. The bill would eliminate the common law “right of control” test that is used in determining liability and properly classifying workers as employees or independent contractors. The bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for the payment of wages, the failure to report and pay all required employer contributions, worker contributions, and personal income tax withholdings, and the failure to obtain valid workers’ compensation coverage.

It defines a client employer as an individual or entity that obtains or is provided workers

34 Monkey Business Images Ltd/Monkey Business/thinkstock

PERSPECTIVE

to perform labor or services within the usual course of business of the individual or entity from a labor contractor. The bill defines a labor contractor as an individual or entity that supplies workers, by contract or otherwise, to perform labor or services within the usual course of business for a client employer. As CGA pointed out in its testimony against this bill, several major businesses have been settling multi-million dollar claims under the “joint employer liability” doctrine which imposes liability when the employer exerts too much control over the contracted workers. Hence, it is unclear why such an onerous bill is necessary. The main reason behind AB 1897 appears to be labor organizing efforts. As an alternative to AB 1897, the California business community has advocated for additional state regulatory powers over businesses that have documented instances of improper contracting practices. Also cited was the enactment of AB 469 (D-Swanson) two years ago that was sponsored by the California Labor Federation. Among other provisions, that law requires detailed information to be provided to employees under Labor Code Section 2810.5, such as a two-page written notice to the employee that identifies the actual employer, where the employee is working, the rate of pay, and the workers’ compensation carrier. This is done so the employee knows his or her true employer. AB 2416 (Stone) attempts to address the very real and serious problem of wage theft by unscrupulous

employers. However, we believe it does so in an unwarranted manner. This bill would authorize an employee (or his/her representative or even a creditor of the employee) to record and enforce a wage lien upon real and personal property of an employer, or a property owner, for wages, other compensation, and related penalties and interest allegedly owed to the employee. In addition, AB 2416 would prescribe requirements relating to the recording and enforcement of the wage lien and for its cancellation and removal. The bill would authorize the employer, or property owner, to use a complicated procedure to release the notice of lien if the employer makes specified contentions and would require a certain notification under the procedure to be made under penalty of perjury. As Sacramento Bee columnist Dan Walters opined in a June 18 piece: “How can government help California’s lowest income workers be paid what they are owed without subjecting reputable businesspeople to ruinous legal harassment?” This statement is the crux of AB 2416. But we agree with Walters who noted, “liens, or their threat, could become extortionate and discourage job creation if misused.” CGA and other business groups have argued to expand the Labor Commissioner’s (LC) powers as the Legislature did last year in granting the Commissioner the power to file wage liens on an employer’s property, but only after she has rendered a final determination that wages are owed. The bill is pending in the Senate Appropriations Committee for a hearing on August 4. n

California Grocers Association has a Facebook page we hope you “Like”!

To “Like” our Facebook page, log-on to Facebook and search “California Grocers Association”

For more information, or questions, contact Dave Heylen, CGA, at (916) 448-3545.

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

We hope you “Like” us!

When you “Like” CGA’s Facebook page you’ll stay on top of the latest news and events in California’s robust grocery industry. News, trends, updates, and more are in-store when you join CGA’s Facebook community.

AU•THEN•TIC

LEN L EW IS

au·then·tic

[aw-then-tik] — adjective 1. Conforming to fact and therefore worthy of trust, reliance or belief.

Davizro/istock/Thinkstock

AU•THEN•TIC

IF YOU LOOK IN THE DICTIONARY, THIS IS THE FIRST DEFINITION YOU’D FIND UNDER THE WORD “AUTHENTIC.” BUT HOW DOES IT APPLY TO TODAY’S RETAILERS AND STORE ENVIRONMENTS? It’s no longer a given that supermarkets are worthy of consumers’ trust. Industry observers firmly believe that most companies could do better in an intensely fragmented industry where everyone from home centers to drug stores and gas stations are competing for the consumer food dollar. In fact, retail industry observers across different segments believe that declining market share in many cases has less to do with the way products are promoted, the frequency of sales, or even price, than the loss of an emotional connection with customers. For a brand — including retailers — to be authentic, it must remain true to its roots and convey that message to customers in everything it does. In today’s environment, authenticity has two meanings, says Craig Rosenblum, partner, Willard Bishop Consulting. “One is being true to your brand, a store’s legacy and why consumers continue to shop there,” Rosenblum says. “Second, authenticity equals differentiation. Retailers must have a clear understanding of the value equation the store has in the eyes of shoppers and how you can differentiate yourself in the competitive landscape and stay in tune with the community.” An increasing number of retailers are waking up to authenticity as a strategy. Rosenblum cites Mariano’s in Chicago as a perfect example. Continued on p. 38

AU•THEN•TIC

C O N TI NU E D

Continued from p. 37

“These stores are consistently doing seven figures a week,” he says. “They saw the opportunity to provide a healthier perishables environment combined with great pricing in the center store.” As brands try to interact more closely with customers, they need to remain absolutely authentic, says Lori Mitchell-Keller, senior vice president, and head of the global retail industry unit for SAP. Approaching the subject at the 2014 National Retail Federation convention in New York, Mitchell-Keller noted: “Authenticity is a key element for both personalization and the brand culture. It’s all about what a brand stands for and its core values.” However, she noted that those values don’t have to be some lofty social goal. “It means how you’re interacting with customers and respecting their individual tastes and preferences,” she said. “It’s about what you can do to make me a better, more loyal customer.” Clearly this is a global concern. As Karen Spear, director of shopper marketing at The Zoo Republic, an Australian-based brand marketing firm said in a recent column in Inside Retail, one of the country’s leading retail trade publications: “In a time of increasing digital transparency and empowered consumers and shoppers, brands telling a genuine and original story are winning the battle for our hearts and minds.”

For Spear and other industry experts, the entire concept of authenticity really boils down to three basic elements: n

Storytelling — Taking people on a journey, sharing history, creating a connection and inspiring loyalty.

Clarity — Identifying your company or store, what you stand for, and what you do best.

Consistency — Ensuring every consumer interaction communicates a brand personality and provides a memorable experience.

According to Spear, people believe in honesty and sincerity. They seek authentic brand interactions and experiences. Providing an authentic experience — often without all the bells and whistles associated with grocery retailing today — was the major theme behind a recently released report by PwC entitled “How Grocers Can Get Ahead for the Future.” It was based on a survey of more than 1,000 shoppers and found that 83 percent of those surveyed preferred to shop at traditional grocery stores.

“Think Google, Apple, Coca-Cola, Ikea — all top performers when it comes to authenticity,” Spear says. “They all ensure that every engagement with their brand provides a consistent message, never faltering from their roots. Not trying too hard to be something they are not, but instead ensuring that they, and their audience can believe them to be exactly who they are. “In return,” she continues, “they are rewarded with loyalty, trust and advocacy, the holy trinity of brand marketing.”

Felipe Dupouy/Photodisc /Thinkstock

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

According to Spear, people believe in honesty and sincerity. They seek authentic brand interactions and experiences. They are drawn to brands that stand for something and those that are totally clear about who and what they are.”

AU•THEN•TIC

While technology will play a more important role than it has historically, it will be just one component of a company’s strategy.

to digitally engage with stores even after they’ve left. They like custom coupons and discounts on the products they’re interested in.

“Shoppers said they like traditional grocery stores,” according to the report. “They’re not completely sold on online grocery shopping yet, though many want

“Many would pay more for organic food and want more ethnic options,” the report Continued on p. 40

H OW T O B E T H E R E A L D E A L ! Authenticity in retailing is more than just an illusion you present to customers who, more than likely, will see through the smoke and mirrors rather quickly.

Nor is the concept just about promoting a store or product out of a sales slump through pricing, advertising, and halfhearted loyalty marketing programs short-term tactics or gimmicks designed to temporarily increase footfall.

Create a section on the website for user-generated content. The average Facebook user posts 90 pieces of content a month and Twitter has 250 million tweets per day.

Stick to your values as a retailer and don’t waver for something that is simply fashionable at any given moment.

Create a unique brand strategy in which price is not the only factor.

Cultivate an image that leaves room for growth and change.

Turn the store into a lifestyle brand that reflects the interests of customers and creates a sense of community.

Transform store sections into an event or destination for shoppers to build a unique sense of style.

Create a constant flow of new items and displays to create buzz that will attract more customers and encourage regulars to return. Give customers a sense of adventure.

Use experts to assess what you’re doing in terms of whether you’re getting across your core message in an authentic way.

Make sure your operations are true to your brand’s promise. Don’t try to reinvent everything, just continually improve what you’re doing.

Rather, industry observers believe true authenticity is something that should be part of a company’s DNA. It must be a long-term strategy that fosters real trust among customers and business partners. In essence, retail authenticity is really synonymous with retail branding — creating, sustaining and constantly honing an image that creates buzz, lifts a store out of commodity status and conveys integrity and truthfulness to consumers who have no shortage of places to spend their money. But how do companies get to this point? What should retailers know about reaching different customers on this level? Following is some advice gleaned from conversations and writings of retail and consumer experts: n

Baby boomers are more attuned to authentic products and experiences, but less interested in what’s fashionable. However, all consumers in recent surveys believe fair trade and the environment are important issues. In surveys, consumers aged 18 to 30 were most likely to remember a great shopping experience. Those over age 50 are more likely to remember store employees who cared about their experience.

navigation that guide customers through the checkout process.

Adjust loyalty programs to be more flexible in how customers obtain points and are able to use them.

Display consumer ratings and reviews on product pages. Start a conversation and use the information to become more consumer-centric.

Spot new trends by constantly analyzing social media.

Encourage customers to share experiences so they feel more connected. Encourage them to become “brand ambassadors.”

Partner with suppliers and wholesalers to improve transparency and traceability throughout the supply chain.

Create a proactive online shopping experience that uses hi-definition images, recorded reviews, product recommendations on individual tastes, and easy

Encourage staff to be attentive and remain with customers, assisting in locating products and resolving issues.

Address bad customer experiences promptly.

Build long-term customer relationships and not just transactions.

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

AU•THEN•TIC

C O N TI NU E D

Continued from p. 39

continues,” and they don’t want your loyalty programs to go away — in fact, they want them to evolve to offer more flexible and tangible benefits.” These preferences may be no surprise. “We know shoppers want a better grocery experience, but many of them aren’t getting that now,” the report states. “They complain of long lines, crowded aisles and parking lots, and unhelpful staff. Shoppers simply want their future shopping trips to be more convenient and customer-service oriented.” The one-size-fits-all grocery experience won’t suit future shoppers looking for something unique. Therefore, retailers need to target demographic groups at the micro level, it was noted. “You can get to know shoppers on a store-by-store basis and figure out which features you want to prioritize in which locations,” the report says. “Get to know who is in your store aisles and what they want today to shape how you personalize their experiences in the future.” It went on to outline what shoppers want from these traditional, or perhaps more authentic, shopping experiences. For example, nearly 60 percent said they want custom coupons to simplify their shopping. This includes delivering digital coupons to their mobile devices or rewards for buying healthier foods. But it’s personalization and relevance that will help supermarkets play a dominant role in the lives of their shoppers. This means dealing with some standard complaints.

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For example, more than half of the shoppers said they’re most annoyed by long lines and overcrowded stores.

“Also, make your store easy to navigate during highly trafficked hours so shoppers’ convenience is a priority,” the report says. “Consider how new merchandise displays, improved shelf signage, and a more knowledgeable staff could make the shopping experience significantly smoother and, in turn, lead to repeat visits and a bigger basket size.” Research indicates that although price is important, shoppers are willing to pay more for an improved in-store experience, based on simplicity, quality, education, and a focus on their wants and needs —

not just products, the report said. And this in-store experience is what gets them to come back. This also means building trust by reaching shoppers through a store’s employees. Nearly half of those surveyed said they want store employees to act as shopping advisors. “Whether it’s through giving them more product information, offering recipe tips, or recommending items to purchase, shoppers will want assistance with decision-making,” according to the report. However, the image that a store projects to shoppers, and how it plays its part, will also continue to be very important. For example, nearly 90 percent said that when it comes to social responsibility, the least your stores should do is give back to the community. Taking future actions like community service, sustainable business practices, and carrying locally sourced products can make a difference in how shoppers perceive you — and how frequently they come back.

The one-size-fits-all grocery experience won’t suit future shoppers looking for something unique. Therefore, retailers need to target demographic groups at the micro level, it was noted. Additionally, once retailers have a clear understanding of shopper preferences, they can determine the role private label will play in reflecting the store’s strategy and promise, the report noted. Preferences for authenticity have already become entrenched in the restaurant industry which has seen exponential growth in ethnic restaurants that not only focus on a menu providing authentic food, but also décor and the entire dining experience. This trend, according to retail industry analysts, plays into the need for retailers to provide the best possible in-store experience — but not to just get shoppers in the store once, but on a regular basis. As one observer noted, “Authenticity is a component of the consumption experience.”

AU•THEN•TIC

This is not only true of food, but in segments like real estate and apparel. In residential real estate, for example, authenticity has come to mean things like traditional neighborhoods, or a small town rural experience, different house styles and the inclusion by developers of what has come to be known as a restaurant-style of “professional” kitchen.

In apparel, one of the great authenticity success stories is Levi Strauss, the iconic blue jean that was invented in 1873. In apparel, one of the great authenticity success stories is Levi Strauss, the iconic blue jean that was invented in 1873 and, aside from line extensions and some new styles, is manufactured pretty much by hand in virtually the same way as it was 150 years ago and just as much in demand, according to industry observers. At the Levi’s headquarters in San Francisco, the company has preserved a 130 -year-old pair of jeans — the oldest known to exist — in a fireproof vault behind immense security doors.

Meanwhile, the concept of authenticity, or differentiation, is something that should be applied to specific demographic groups that have proven to be among the most important for supermarket retailers, according to Resenblum. “Look at the Hispanic retail landscape in Southern California,” he says. “Firms like Northgate Gonzalez Markets have the opportunity to provide authentic experiences that combine the right environment with price, service and a broad portfolio of products in areas like produce and marinated meats that appeal to their Hispanic customers. “They do a phenomenal job in these areas and that translates to the center store in categories like candy, detergent and cleaning products,” he says. “It’s a whole store strategy.” Another opportunity lies with the often-discussed Millennials. “The baby boomers have all the money and that population will double in size over the next several years,” he says. “But they don’t buy a lot of goods. Even if they are staying home longer, they have a big influence on shopping decisions.” According to Rosenblum, to Millennials, authenticity is a matter of getting what they want, how and when they want it. Time is their currency and it has an impact on their shopping behavior. “They go on social media to see what comments have been made about a store, product or brand, and that influences their decision,” he says. “They are not going to waste their time going to a store and paying too much. They’ve done their research upfront. Authenticity in online shopping must provide them with convenience.” n

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

Len Lewis is editorial director of Lewis Communications, Inc., a New York-based editorial planning, research and consulting firm. He is a contributor to several retail publications and trade groups in the U.S. and Europe and has been a speaker and moderator at numerous industry events. He can be reached at lenlewis@optonline.net or via his website www.lenlewiscommunications.com.

| 41 bombuscreative/iStock Editorial/Thinkstock

CONVERGENCE

DAN KITR E LL

Creating Convergence: BRAND, RETAILER, SHOPPER

CONVERGENCE

SHOPPER MARKETING IS A DISCIPLINE THAT FOCUSES ON THE CONVERGENCE OF THE MANUFACTURERS’ BRANDS, THE RETAILERS’ MARKET POSITION AND THE SHOPPERS’ NEEDS. This presents some unique challenges as the manufacturer will use a consistent brand message over time to win consumer loyalty while the retailer is faced with adapting messaging on a weekly basis to align with shopper needs throughout the year. Understanding this convergence may help uncover opportunities to increase the effectiveness of collaborative shopper marketing programs. Strategic Alignment — Tactical Execution To gain that insight, there are a few key metrics and areas of focus to consider when assessing shopper marketing programs. First, let’s examine recent trends in retailer advertising as compared to expenditures on coupon promotions. According to Marx, a Kantar Media solution, overall retailer advertising remained flat in 2013 versus 2012 across the food, drug, mass, club, value, pet, and convenience channels. During this period, however, retailer participation in Free-Standing Insert (FSI) coupon promotions increased 25 percent and digital coupons distributed on retailer websites increased 53 percent. Similarly, retailer feature ad pages increased 12 percent during this period.

Similarly, digital coupons on retailer websites increase purchase intent for the promoted brand while increasing shopper engagement with the retailer. Retailer feature ads are unique in their ability to

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Over time advertising defines the brand’s equity and the retailer’s market position, as well as influencing shoppers throughout their paths-to-purchase on a weekly basis, FSI coupons engage shoppers at the critical period when they are writing their shopping lists and planning their shopping trips.

Continued on p. 44

CONVERGENCE

C O N TI NU E D

Continued from p. 43

CPG Retail Industry

viewed by their shoppers as a destination to try new products first.

CY 2013 % Change vs. YAG

Retailer Advertising Expenditures

-0.2%

Retailer FSI Promotion Pages

25.6%

Digital Coupon Events on Retailer Websites*

53.6%

Retailer Feature Ad Pages**

12.6%

*Based on retailer websites monitored by Kantar Media SOURCE: Kantar Media **SOURCE: ECRM

influence shoppers both in the home as they plan their shopping trips and in the store as they make actual purchase decisions. Each of these advertising and promotion tactics influences what shoppers plan to buy and where shoppers plan to shop each week regardless of whether the manufacturer or the retailer paid for the activity. Retailers can benefit by tapping into the brand equity and purchase intent developed through the billions of dollars manufacturers are investing to support their brands. Similarly, retailers invest billions of dollars to deliver additional brand impressions for manufacturers that may result in additional benefits if the right brand is aligned with the right retailer during the right week.

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Manufacturers can reinforce their brand equity by developing programs with retailers in categories that are strategically important in defining the retailers’ market position. For example, brands in the vitamins, nutritional beverages and healthful snacks categories may align with retailers that define themselves as a preferred destination for health and wellness.

Similarly, retailers can leverage manufacturers’ brands to drive shopping trips and increase transaction size during weeks in which the brands are tactically important. For example, retailers may emphasize leading brands within the apparel, electronics, office supplies, “lunchbox” snacks, and/ or other categories for the “Back-to-School” season depending which categories the retailer uses to define themselves to their shoppers during those weeks. Additionally, new product introductions may provide both strategic and tactical opportunities. For example, new product introductions regardless of category may be strategically important to a retailer who wants to be

However, new product introductions with significant brand advertising support and high value FSI, or digital coupon offers, may be tactically important to a retailer who seeks to capture a greater share of brand sales during a heavily supported launch period (e.g., introductions of over-the-counter versions of prescription drugs, new movie releases on DVD, seasonal scents of air fresheners, etc.). Right Message — Right Week As differentiation across retail sales channels continues to blur and shoppers consolidate their weekly trips across fewer destinations, it becomes even more important for retailers to be clear about their position in the market. Retailers may emphasize quality, assortment, convenience, new products, community investment, and other advantages to earn a position as a preferred retail destination for their shoppers. Manufacturers should consider which of their brands best align with the retailer’s market position to connect the shopper with the brand through the retailer.

Manufacturers can reinforce their brand equity by developing programs with retailers in categories that are strategically important in defining the retailers’ market position. For example, it is not sufficient for leading retailers in the drug channel to simply expand their product selection in food-related categories. They must thoughtfully craft their assortment, pricing and promotion tactics to be consistent with their retail market position which may emphasize attributes like trusted, healthful, convenient, etc. Although a consistent message must be maintained over time, different attributes may be emphasized from week to week. For example, “healthful” may be top of mind with shoppers during the New Year’s resolution period in January; “convenient” may be more compelling during the holiday shopping periods in November and December; while Continued on p. 46

CONVERGENCE

C O N TI NU E D

Digital Vision./Photodisc/ Thinkstock

Continued from p. 44

“trusted” may be the foundation for building ongoing relationships with shoppers throughout the year.

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Similarly, leading retailers in the food channel are expanding their pharmacy and health services offerings (e.g., flu shots, blood pressure monitoring, etc.). This may create new opportunities to engage shoppers and leverage brands consistent with a health and wellness message. Leading retailers in the value channel have worked with manufacturers to develop programs specifically targeting mid-month fill-in trips.

Such programs might look to promote more affordable sizes of their shoppers’ preferred brands, for example. As competition increases from online retailers like Amazon, some retailers have responded by increasing their efforts to win the monthly stockup shopping trip and emphasizing quality in produce, meat, dairy, and other perimeter categories in which online retailers may be less competitive. Understanding weekly share of voice (SOV) for retailer advertising and promotion is another way to gain insight into which retailer will capture a greater weekly share of shoppers, trips, and sales. However, understanding what the percentage is of a retailer’s total annual expenditures that has been invested within a single week can provide direction on how important winning that specific week was to that specific retailer. It is probably no surprise that retailer advertising and promotion activity increases during the winter holidays. However, activity also spikes during the first week of each month as retailers compete for shoppers and dollars during this important monthly pay week. As retailers allocate a greater share of their advertising and promotion budget during these key weeks, they may not increase their share of voice since competing retailers are also increasing their activity.

CONVERGENCE

For manufacturers, it is important to understand when a retailer is increasing their overall share of activity. By consistently aligning with retailers during weeks in which they represent a greater share of voice, manufacturers can likely realize an increase in overall share of retail sales. Additionally, understanding which departments, categories and brands were featured in the retailer’s advertising and promotion during key weeks provides direction on what drove the shopper into the store and where in the store the shopper was likely to shop. Targeting key weeks and in-store locations with relevant promotion and merchandising programs may deliver improved results for manufacturers.

Dan Kitrell is Vice President of Marx Kantar Media. He will be moderating a Share Group Discussion at the 2014 CGA Strategic Conference.

Which categories are strategically important to which retailers throughout the year while being tactically important to other retailers during key weeks?

Are there more effective tactics which should be used to target stock-up trips at the beginning of each month than for fill-in trips to stretch the budget to the end of the month?

How can brand marketing activity be leveraged differently by individual retailers to address seasonal promotion opportunities such as New Year’s resolutions, summer holidays, Back-toSchool, winter holidays, etc.?

Which manufacturer brands or new product introductions represent the greatest opportunity to generate sales while also reinforcing brand equity and retailer market position?

Are there opportunities for retailers to more effectively align their advertising and promotion programs with leading brands’ advertising and promotion activity, and as a result more effectively capture trips and increase sales?

Getting it Right Monitoring weekly retailer advertising and promotion can help manufacturers identify opportunities for aligning their brand marketing activity with retailer programs. Similarly, understanding the timing and scale of brand marketing investments may provide retailers with an opportunity to increase the effectiveness of their programs by targeting shoppers when brand awareness and purchase intent is greatest.

A retailer’s share of total weekly advertising and promotion activity may be a good predictor of weekly share of shoppers, trips and sales. However, understanding which categories are featured in this advertising and promotion support may identify the strategic and tactical convergence of the brand, retailer, and shopper.

Creating convergence by aligning the right programs with the right retailers during the right weeks will improve the shopper’s experience, as well as increase the strategic and tactical benefits of the collaborative programs for both manufacturers and retailers. n

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

Denis Raev/istock/ Thinkstock

In using regular monitoring to gain such insights, some important questions should be considered:

TOMORROW’S WORKFORCE

DR. PAUL LANNING

Jupiterimages/Stockbyte/Thinkstock

TOMORROW’S WORKFORCE

Training Tomorrow’s Workforce: Where Industry and Academia Meet NO LONGER IS A COLLEGE EDUCATION SIMPLY STUDENTS TAKING NOTES IN LECTURES, READING BOOKS, AND REGURGITATING ON EXAMS AND IN TERM PAPERS EVERYTHING THEY HAVE HEARD AND READ OVER THE PRECEDING WEEKS.

Today, the focus is much more on preparing students for the “real world,” including the ability to enter the workforce as experienced practitioners in their chosen disciplines. This is true in a host of fields including the grocery industry, where advances in technology have impacted every segment of the industry. STEM (science, technology, engineering, and mathematics) is the buzzword, but the story behind the acronym is core to the future of public-private partnerships in higher education. Today we are in the midst of one of the greatest demographic shifts in this country’s history: the retirement of the Baby Boomers. It took 30 years — from 1980 to 2010 — for the 65+ population to grow from 28 million to 42 million, or from 11.3 percent to 13 percent of the country. However, by 2020, that group grows by 15 million people, to 16.1 percent of the population; over the next 10 years, they add an additional 17 million people and grow to 19.3 percent of the U.S. population. In years 2040 and beyond, this cohort will continue to represent 20 percent or more of the country. This demographic shift is already having a huge impact on workforce needs, not only for the sheer volume of expected retirements, but also because these Boomers were also a part of the “Sputnik Generation,” when science and math were heavily emphasized and a generation of STEM-ready workers was produced. Their retirements, coupled with the increasing technical sophistication of many of today’s jobs in all industries, leave a huge gap to be filled. Continued on p. 51

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TOMORROW’S WORKFORCE

Continued from p. 49

While industry faces a rapidly shifting demographic of employees, higher education has entered an arms race as an ever-increasing number of students seek opportunities for college degrees — due in large part to the increased STEM-related requirements many careers demand. As competition between universities to attract the “best and brightest” — or to differentiate themselves and claim excellence in particular disciplines — has skyrocketed in recent years, colleges and universities have increasingly collaborated with industry partners to provide meaningful, hands-on, experiential learning opportunities for students as a part of undergraduate degree programs.

While industry faces a rapidly shifting demographic of employees, higher education has entered an arms race as an ever-increasing number of students seek opportunities for college degrees. This is true not only among private institutions, but also increasingly among public colleges and universities that are now in competition for students (and faculty) with each other, and with for-profit and online colleges.

The benefits of such partnerships accrue to industry as well. Companies, trade organizations and other entities are increasingly partnering with higher education institutions to provide these hands-on learning opportunities, infuse industryspecific expertise into the curriculum, and identify future employees. The benefits are clear. Hiring talented, experienced young people who enter the profession with relevant experience not just in the classroom, but in the workplace speeds up the orientation process, lowers costs for hiring and training, and accelerates productivity. Numerous firms are now making strategic investments in educational institutions that stretch well beyond the traditional approach of providing laboratory equipment, or funding a scholarship. Rather, multi-faceted, comprehensive partnerships are developed encompassing multiple aspects of a college or university, often providing a corporate partner with marketing and branding opportunities specifically targeted to reach potential future employees as well as the broader community. Global energy giant Chevron, for example, works with more than 100 colleges and universities through its University Partnership Program, focusing on a full spectrum of interaction with education institutions that includes scholarships and grants, faculty funding, and capital equipment. The goal?

Continued on p. 52

That technical proficiency goal emanates across industry sectors. Employers in many industries are just now starting to see their STEM-capable Baby Boomer employees walk out the door and into retirement — a trend that will accelerate over the next decade. This is coupled with the fact that most jobs — even those that were formerly low-skill positions — are requiring more knowledge and technological skills.

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moodboard/moodboard/Thinkstock

“To help attract and develop talented students and teachers who can help achieve a more technically proficient global workforce,” according to Chevron. “We consider these educational partnerships to be strategic investments in the economic development of local communities and the future of the energy business.”

TOMORROW’S WORKFORCE

C O N TI NU E D

Continued from p. 51

As a result, survey after survey shows that employers are hungry for talented workers despite the high unemployment rate. Often times people are available to work, but not with the knowledge and skills required in today’s workplace. Most business and education leaders are familiar with some of the most common partnerships such as career days, guest speakers, site visits, and internships. But there is a much wider array of partnership models to be considered, including programs that serve students directly as well as those that support universities and faculty, thereby improving the learning environment and quality of instruction.

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The benefits are of industry-education partnerships are manifold. The Ready By 21 National Partnership has outlined a few:

Greater labor market opportunities for student engagement and growth through internships, jobs and hands-on opportunities for learning.

Strong private and public advocacy teams to drive initiatives in the community that impact the local economic outlook.

A more skilled and better prepared workforce that enhances economic stability and growth.

Positive publicity and brand awareness for both entities through success of the partnership and improved outcomes.

Additional funding streams for industryspecific education programs, including in-kind contributions.

Broader corporate citizenship engagement: by providing volunteer opportunities to their employees, businesses can increase employee motivation and retention rates and provide professional development while also providing a dedicated and skilled volunteer base for schools.

It is against this backdrop that the California Grocers Association Educational Foundation seeks to define opportunities for the grocery industry to partner with education institutions in California, providing resources and expertise to academic programs attracting and training future generations of industry professionals.

The Foundation has been heavily engaged in efforts to develop and support pathways for future grocery industry employees, working to create an educational program that illustrates the relationship between suppliers and retailers through the grocery supply chain. Outreach efforts to community colleges and California State University campuses with relevant academic programs has ensued, and groundwork has been laid for multi-faceted partnerships with select higher education institutions that will benefit employers and the industry as well as students and faculty. “We see great opportunities within California’s public systems of higher education to help shape future generations of grocery industry professionals in a wide range of disciplines,” says Shiloh London, CGAEF executive director. “By partnering with these institutions, we can infuse real-world knowledge and learning opportunities into the student experience and help prepare practice-ready graduates who can step right into careers in our industry.” In the coming months the Foundation will be working with education leaders and grocery employers on potential partnerships that will have a meaningful impact on the future workforce in California’s grocery industry. As the grocery industry faces rapidly shifting demographics and ever-increasing levels of technological sophistication, traditional education models will not be sufficient. Multi-faceted partnerships between academia and industry will enable colleges and universities to provide more meaningful, hands-on learning opportunities for students which will be vital to grocery industry employers seeking highly-skilled workers entering the workforce. n Dr. Paul Lanning is managing partner with RPR Fundraising, LLC, a consulting firm advising numerous California-based nonprofit organizations. He also teaches graduate courses in education administration at the University of the Pacific, where he serves on the Dean’s Advisory Council for the Benerd School of Education.

WFM_CaliforniaGrocer_14.pdf

8/12/14

3:07 PM

Quik Stop Markets, Inc.

Wishes to Congratulate Our 2014-2015 Scholarship Recipient

CMY

Greater Goods.

Larry Kranich Memorial Scholarship Tiffany Mak Daughter of Jack Mak Quik Stop in Fremont, CA

wfm.com

NORTH STATE GROCERY, INC.

Congratulations

to our 2014-15 Scholarship Winners

Chance Albee Alyssa Kenealy Regan Albee Celine LeClerc Alexis Buchanan Austin Olah Joslyn Fillman Adreanna Opdyke Amy Kannier

Looking to a

bright

future! Congratulations to this year’s scholarship winners!

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™

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C y h h o t ice l ae

g m n i ak p le

Ron Chapple Stock/Ron Chapple Studios/Thinkstock

OPEN ANY MAJOR PUBLICATION AND IT ISN’T DIFFICULT TO FIND COVERAGE OF HEALTH-RELATED ISSUES. OBESITY, HIGH BLOOD PRESSURE, DIABETES AND MORE ARE

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CONSISTENTLY REPORTED TO BE AT “EPIDEMIC” LEVELS IN AMERICA.

Unfortunately, despite the complexities of those diseases, causation is most often laid at the feet of the food system. In private enterprise, advocates argue that food manufacturers must do more to reduce sugar, salt and fat content in the food they sell, retailers need to do more in terms of marketing and promoting healthier food options. In publicly-funded food programs, advocates increasingly push for restrictions on food options to ensure program participants make the right “choices.” They argue that allowing program participants relative freedom in terms of their public food dollars ultimately forces the public to double down on the

expense — on the front end in providing the actual food dollars, and then again on the back end when overconsumption of certain foods and beverages precipitates obesity, high blood pressure, or diabetes. These health issues and trends are much more challenging to address than enacting new mandates that force manufacturers to make expensive, and in many cases unsustainable, changes to product ingredients and manufacturing processes. Finding solutions to these challenges takes more than simply forcing grocers to fundamentally alter the way they design food stores. Health is not a simple matter and there are no simple solutions. Yet there are things

H E A LT H Y C H O I C E S

BY KE RI AS KEW BAILEY

the food industry can do to help policy-makers in their efforts. In fact, existing at the intersection between major public food assistance programs, like SNAP and WIC, and individual recipients, the retail grocery industry is in some ways best positioned to help drive consumer behavior changes.

Since October 2013, California has averaged more than 1.35 million residents participating in the WIC program, spending on average $46.35 per Continued on p. 56

But those changes must be undertaken in ways that produce positive results for food manufacturers and retailers. And they must not be undertaken with the

Undoubtedly, California grocery retailers do experience positive economic benefits when they make a business decision to accept WIC vouchers and EBT cards. According to USDA data, in 2013 more than 1.9 million California households participated in the SNAP program â&#x20AC;&#x201D; each utilizing an average monthly household benefit of $330.49, with roughly 85 percent of those benefits redeemed at traditional supermarkets and super stores.

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Undoubtedly, California grocery retailers do experience positive economic benefits when they make a business decision to accept WIC vouchers and EBT cards.

mistaken assumption that they will be a panacea that allows policymakers to avoid addressing other lifestyle changes that have occurred in our communities over the past several decades.

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C O N TI NU E D

Continued from p. 55

participant using their vouchers. Those numbers do not include any multiplier effect — with customers often purchasing additional items during their shopping trip. That purchasing power presents tremendous opportunities when paired with ongoing changes in the marketplace. Recent consumer trends indicate that many California food program participants are already focused on health and look to retail grocers to provide them with opportunities to live healthy lifestyles. In FMI’s “2013 Retailer Contributions to Health and Wellness” report, nearly a third of shoppers are interested in accessing information on nutrition labels, and nearly 60 percent of them used at least one new “healthy” recipe during the year. And yet 60 percent find it difficult to change eating habits on their own, with nearly as many holding a perception that healthier foods are more expensive.

they identify and implement ways to do it voluntarily, they can begin to relieve the pressure building toward regulated, top-down, one-size-fits-all mandates. Many creative solutions already exist in the grocery space to deal with some of the issues the USDA sites as key considerations in voluntary efforts. The top concern is an impression that consumers are easily confused by existing labels and may need additional tools to help interpret the information available. Several grocery companies provide that in the form of nutritional values using simplified rating systems like stars or number values. In addition, companies have begun to voluntarily label products in certain health-related categories like “low sodium,” “gluten free,” and “low fat.” These systems are widely viewed as beneficial mechanisms to put broad information about calorie counts and food contents in perspective, and to assist consumers in making overall healthier choices. Another growing innovation involves bringing dietitians and chefs into the grocery setting. More than half of America’s grocers report they offer nutrition counseling of some type, either through personnel in store, or at the corporate level, answering questions submitted through social media. Nearly two-thirds of companies indicate they offer health and wellness newsletters on a regular basis.

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Companies are even moving into the healthcare arena by operating licensed pharmacies and bringing lowcost and free health fair events to their parking lots.

Fuse/ Thinkstock

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Roughly 70 percent of stores surveyed across the country even offer cooking classes that focus on both traditional meal planning and a variety of restricted diets. Healthy recipes are also universally available from grocery stores, with two-thirds of companies indicating they provide customers with multiple channels to access the information like printed materials available in-store, postings on company web sites, and in-store kiosks.

Grocers can play a significant role in helping to leverage consumers’ apparent desire for information and assistance in the health arena, and as a result help elected officials and policymakers in their desire to reverse specific public health challenges. And if

The events are often linked specifically to publicly funded food programs through cooking demonstrations using only products authorized for purchase with WIC vouchers, and store tours to help customers find healthy food that can help maximize their food dollars. These and other creative, interactive

H E A LT H Y C H O I C E S

experiences can help create a sense of community and support customers in their desire for a healthier lifestyle.

The program has limitations that could be difficult to overcome, particularly one that restricts the type of expenses that can be included in calculations of in-kind matching contributions that applies only to for-profit companies. But overall it does leave the door open for partnerships that could see grocery retailers collaborate with other organizations in creative ways that allow for draw-down of available federal dollars. One program in Michigan, Double Up Food Bucks, has seen tremendous results with 3 million pounds of produce being purchased through the program since 2009. It provides SNAP recipients a dollarfor-dollar match when they buy local produce at farmer’s markets.

In California, the FreshWorks Fund serves as a potentially significant resource for grocers seeking to create additional access to healthy foods in limited access communities. The more than 1,000 participating Michigan farmers report earning more than $5 million since the program launched. And participating farmer’s markets reported similar success with increased sales and an expanded customer base.

manleyaudio/istock/ Thinkstock

And there is financial help available for grocery retailers wanting to be creative. The 2014 Farm Bill included a new $100 million competitive matching grant program designed to support incentive programs aimed at increasing fruit and vegetable purchases by SNAP recipients.

cases grants, that will enhance healthy food access and distribution, and upgrade or convert existing uses to healthier options in either stand-alone or multi-use developments. While companies must commit to minimum standards in terms of floor space dedicated to fresh foods and variety of fresh food offerings, most traditional supermarkets already meet, or exceed the requirements. Funds may be used for a wide variety of predevelopment and development expenses. Eighteen projects have been funded to date. Challenges exist and lawmakers are not always willing to allow the marketplace to address them independently. But in some ways things are trending in the right direction, lending to the success of voluntary efforts. Demographics, for one, are on the side of health. As the bubble of “Boomers” gives way to an almost equally large bubble of “Gen Y” shoppers, it appears the focus on health will only increase.

Undoubtedly, health is a growth opportunity in retail these days. And taking advantage of ongoing trends in shopping behavior and preference can help grocery retailers improve not only their own bottom line, but the health of their customers. n

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In 2013, the program expanded and launched a pilot to include three grocery stores in Detroit. More than $189,000 was reportedly spent on local produce at grocery stores during the pilot and this year it has expanded to include additional grocery store participants.

In fact, according to FMI’s Shopping for Health 2014, more than two-thirds of Gen Y shoppers indicate their food choices are an important part of their health, while just over 55 percent of Boomers do. Likewise, nearly 60 percent of Gen Y shoppers actively seek out healthier food options while only half of older shoppers do. Gen Y shoppers are also more likely to use emerging technologies to find health information and to use it in very personalized ways.

S UP P LIER N EWS

Poultry Demand Continues to Rise SO, WHY DID THE CHICKEN CROSS THE ROAD? Obviously, to get into supermarket meat cases across the country where this commodity is gaining ground against beef and pork and becoming the protein of choice for reasons of health, price and quality. “Retailers can’t afford to put loins, ribs and Porterhouse on the front page of the ads anymore so they’ve increased promotions of poultry,” said Brian Diffenderfer, director of meat and seafood for Daymon Worldwide. “It’s still the cheapest protein in the case, but it’s been more profitable for them at this point than it’s been in years.” The post-recession economy continues to have an impact on disposable income and consumer spending. But, also having an impact on chicken sales are the highly publicized health issues that have been connected to red meat consumption. Meanwhile, due to health factors as well as price, studies indicate that consumers have eliminated meat from their home menus once, or twice a week. The result is that the poultry market is forecast to reach $98 billion by 2017, according to figures from Packaged Facts. In the interim, the U.S. Department of Agriculture has forecast that consumption will be increasing by 1.8 pounds to 85 pounds per person in 2014. This is based on an expected 2 .9 percent increase in production this year and a 2 .0 percent increase in exports.

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However, the latter may be negatively impacted by a protracted embargo of U.S. chicken products by Russia.

Asked whether the embargo might lead to greater supplies and lower prices in the U.S., Diffenderfer replied: ”I’d like to say yes, but we haven’t seen it yet. We’re hoping for lower prices in the pork market as well, and we’ll find out shortly.” Citing figures from the Nielsen Perishables Group, he noted that increased chicken volume is clearly coming from declines in both beef and pork. In the 52 weeks ended June 28, chicken represented 24.9 percent of meat volume up 0.2 percent over a year ago. Dollar sales were ahead 1.4 percent for the period.

During the same period, beef accounted for 23.3 percent of overall meat department volume, with volume off 0.1 percent from the prior year. Coming in third was pork, contributing 10.2 percent of meat department volume and showing a drop of 2.1 percent for the 52 weeks, Nielsen reported. “Consumers are still feeling the economic pinch and are looking for value as well as healthier alternatives,” said Diffenderfer. “There’s been so much negative publicity in the press about things like pink slime. It pushed people toward poultry and away from ground beef, which was always the cheaper route if you couldn’t afford steak or roasts.” Boneless breasts still control the category accounting for about 44 percent of sales. But the item that’s growing the fastest is boneless chicken thighs, according to Diffenderfer.

The post-recession economy continues to have an impact on disposable income and consumer spending. “Five years ago you couldn’t give them away and a lot of the major suppliers were exporting it,” he said. “But they started boning and skinning them and selling them a bit cheaper and that created a demand in the marketplace.” However, with people still concerned about health and wellness retailers are taking advantage by moving to higher priced products. For example, chicken now represents 50 percent of organic sales in the meat department, Diffenderfer said. “We’re really pushing organic and natural and focusing on breaded and IQF poultry,” he said. “With what we’re seeing in grocery and other parts of the store, it only makes sense to have more of these products in the meat department. That’s where the category’s future growth is coming from.” n

LAST MONTH I HAD THE OPPORTUNITY TO HEAR STING IN CONCERT AT THE SAN JOSE PAVILION. WHAT A SUPERSTAR! GREAT VOICE, GREAT SHAPE AND A GREAT FATHER! Recently that same Grammy Award-winning performer announced he would not be directly willing his $300 million-plus estate to his six children because he believed it would unduly burden their lives. We each have a legacy to plan and manage as we see fit. Without proper planning all our hard work can go to waste. I am excited to devote the balance of this year’s updates to the process of estate planning and charitable giving — how each plays a significant role in providing you peace of mind and a deeper satisfaction. Years ago a 47-year-old Austrian man, Karl Rabeder, gave away his entire $4.7 million fortune after concluding his wealth and lavish spending were keeping him from real life and happiness. He told the London Daily Telegraph, “I had the feeling I was working as a slave for things I did not wish for, or need. It was the biggest shock of my life when I realized how horrible, soulless and without feeling the ‘five star’ lifestyle is.” His money now funds charities he created to help people in Latin America. We may not all identify with this dilemma, but exploring the basics of this decision process is vital in order to maintain control of our resources.

You each have a wonderful opportunity to help yourself and the industry by supporting the California Grocers Association Educational Foundation. The scholarships and insights it provides are vital to the growth of the industry. At the same time the Foundation’s efforts go a long way in preparing employees and families to succeed in our industry. In the process, you have an opportunity to assure your future and take advantage of the estate planning and charitable giving options mentioned above. I invite you to join me in becoming a CGAEF Legacy Scholarship donor. This program grants more than 300 scholarships a year to deserving students. Over the years I have had the opportunity to address many groups regarding business succession and transition, topics of great concern today. Statistics from the “Bank of America Small Business Owner Report” show that: n

24% of business owners are not transferring their business to heirs.

22% of business owners are transferring to children active in the business.

14% will be divided equally.

10% of the business will go to the best qualified.

Over the next few articles I will be addressing several concerns that will help determine near term steps for controlling our estates.

I think Bertrand Russell said it best: “The world is full of magical things, patiently waiting for our wits to grow sharper.”

They will include:

I look forward to enjoying our journey together! Everyone deserves their own financial road map. n

Basic estate planning techniques for establishing a sound estate plan. Forming an estate plan team.

Choosing options that are right for you.

The changing tax environment, liquidity and optimization.

Protecting family/business income while controlling the distribution of the estate.

Doing well, while doing good.

John B. Kelly, CFP is a nationally recognized speaker, consultant and investment advisor assisting families and businesses with succession/transition planning and retirement goals. He can be reached at 916-296-9019 or investorscaddie@gmail.com. www.linkedin.com/in/theinvestorscaddie.

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

WEA LT H M A N AGEMENT

Your Legacy: It Matters!

ADVE RTIS E R INDE X

PAGE COMPANY

PHONE

FAX

WEBSITE

al fresco all natural (Kayem Foods)

800-426-6100

617-889-5478

chris.reisner@kayem.com

www.alfrescoallnatural.com

Anheuser-Busch InBev

909-597-0460

raul.aguilar@anheuser-busch.com

www.anheuser-busch.com

C&S Wholesale Grocers, Inc.

916-373-4396

916-373-4296

pmiller@cswg.com

www.cswg.com

IBC California Shopping Cart Retrieval Corp.

818-563-3070 800-252-4613

818-563-3041

www.cscrc.net

Coca-Cola Refreshments

213-746-5555

213-744-8765

www.cokecce.com

El Super (Bodega Latina Corp.)

562-616-8800

562-616-8647

www.elsupermarkets.com

Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917

209-956-8550

www.food-4-less.com

Fresh & Easy Neighborhood Market Inc.

310-341-1200

310-341-1501

www.freshandeasy.com

23,50

Gelson’s Markets

818-906-5709

818-990-7877

www.gelsons.com

MaintenX International

813-254-1656

866-834-6154

service@maintenx.com

www.maintenx.com

METTLER TOLEDO

614-438-4511

614-438-4900

USRetail@mt.com

www.mt.com/retail

North State Grocery, Inc. dba Holiday Sav-Mor Foods

530-347-4621

www.shophqf.com

Pepsi Beverages Company – WBU

925-416-2573

925-416-2600

www.pepsi.com

Quik Stop Markets, Inc.

510-657-8500

510-657-1544

www.quikstop.com

53 Raley’s

916-373-3333

916-444-3733

www.raleys.com

Ralphs Grocery Company Food 4 Less/Foods Co.

310-884-9000

310-884-2600

www.ralphs.com

Safeway Inc.

925-467-3000

925-467-3323

www.safeway.com

Superior Grocers

562-345-9000

562-345-9054

www.superiorgrocers.com

Unified Grocers, Inc.

323-264-5200

323-262-0658

www.unifiedgrocers.com

Whole Foods Market - Southern Pacific Region

818-501-8484

818-501-6908

mikanderson@coca-cola.com

paul.turcotte@pepsico.com

customercare@unifiedgrocers.com

www.wholefoods.com

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California Grocers Association

iPhone CART REPORTING â&#x20AC;&#x153;WE HAVE AN APP FOR THATâ&#x20AC;?

CARTSNAP

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