Grocer2014 issue5

2014, ISSUE 5

C ALIFORNIA GROCERS A SSOCIATION

REBOOTYOURBUSINESS YOUR FUTURE DEPENDS ON IT IN THIS ISSUE

For the latest industry news visit www.cagrocers.com

Small Store Formats Millennials Local Food Movement California Cornucopia – NEW

CGA

| Board of Directors

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS

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

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

DIRECTORS

2

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

CONTENTS

F E AT U R ES

COLU M NS

CTRL ALT DELETE

36

How many times have you used ctrl alt delete – the three key function that reboots your PC? What some retailers have overlooked is that the same principles apply to business when it comes to meeting the digital future.

i n g Ah e a d o f t h e C u rv e Stay Fresh

44 California

CORNUCOPIA

50 58

| Issue 5

Staying Ahead of the Curve 5

Can the supermarket industry stay ahead of the curve when it comes to satisfying the needs of Millennial consumers? Noted researcher Tina Wells shares research on this growing demographic.

California Cornucopia – New!

President’s Message Be True To Your Message.......................................6 From The Chair Just the Numbers, Ma’am......................................8 Viewpoint — Kevin Coupe Road Trips & Metaphors......................................12 Capitol Insider Industry Avoids Legislative Earthquake................ 22 Perspective CGA Posts Successful Legislative Year................. 26

California Grocer unveils a new produce section – California Cornucopia. Each issue, it will explore issues facing the produce industry in California

DEPA RT M EN TS

Embracing the Local Food Movement

Washington Report...................................... 28, 32

Local food, once thought of as a passing fad, is firmly entrenched in the mainstream. California retail grocers have considerable advantages that, with a few strategic investments, can be leveraged to win the battle for share of stomach relative to fresh and local.

CGA News..........................................................20 Advertiser Index ............................................... 80

Is Bigger Better?

66

For the past 50 years, big box retailing has been center stage on the national and international scene – the standard by which an entire industry was measured. But is the spotlight turning to the proliferating world of the “small box”?

CALIFORNIA GROCERS ASSOCIATION President/CEO Ronald Fong Senior Vice President, Government Relations and Public Policy Keri Askew Bailey

Vice President, Business Development & Marketing Doug Scholz Executive Vice President, COO Retail Marketing Services Jeff Snadow

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

1215 K Street, Suite 700 Sacramento, CA 95814 (916) 448-3545 (916) 448-2793 Fax www.cagrocers.com For association members, subscription is included in membership dues.

Subscription rate for non-members is $100 and does not include CGA Buyers’ Guide. © 2014 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

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

Vice President, Communications Dave Heylen

Executive Director, CGA Educational Foundation Shiloh London

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PRESIDENT’S MESSAGE

Authentic Grocery – Be True to Your Message RO N ALD F ONG President/CEO

Thinking about this year’s CGA Strategic Conference theme reminds me of the Beach Boys classic “Be True To Your School.”

While the lyrics are simple and light-heartedly focused on school spirit, there is an underlying message that mirrors the educational sessions at this year’s CGA Strategic Conference.

Our marketing material for this event challenges would-be attendees to be true and authentic originals. “Let your colors fly,” as the song goes.

So what does it mean to be authentic? Whether it’s a retailer, or a brand, the answer is the same – it’s being true to your roots and conveying that message in everything you do.

Despite sounding easy, it is actually quite difficult to achieve. It’s not just an idea, it’s a strategy.

And it’s rapidly becoming a necessity.

Market fragmentation and omni-connected, cause-driven consumers are having a tremendous impact on all of retail.

Shoppers, particularly Millennials – those born between the early 1980s through the early 2000s, seek a different kind of retail relationship – and want to establish a personal and emotional connection. They pursue companies and brands that express and demonstrate their values through truthfulness, transparency, integrity, sincerity and openness. In return, they will provide loyalty, trust and advocacy.

These shoppers have the world at their fingertips. They no longer rely on traditional

information sources, but are now forensic consumers who with a few quick clicks can know product content, nutritional value, what others think of the product and the price at your competitor down the street.

So what does it mean to be authentic?

Whether it’s a retailer, or a brand, the answer is the same – it’s being true to your roots and conveying that message in everything you do.

Authenticity though isn’t just about being socially conscious, or focusing on one generation of shoppers. The number of Millennial shoppers may be growing, but don’t discount the buying power of babyboomers, or Gen X. It’s really about being true to your company core values. It’s understanding who you are and then being true to that message. By having a clear understanding of your roots, your customers can differentiate your company in this very competitive landscape.

Fifty years ago the Beach Boys called on students everywhere to be true to their school. In 2014, our rally cry is for retailers and brands to be true to your message!

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Let your colors fly! n

6

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FROM THE CHAIR

Just the Numbers, Ma’am…

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

1,800… the approximate number of bills introduced in California’s Senate and Assembly in 2014.

768… the number of bills sent to the Governor’s desk for signature or veto at the end of the legislative session.

250… the estimated number of bills CGA identified as priorities.

These bills covered just about every facet of our operations: food safety, the environment, healthcare, employment, alcohol and tobacco

Gov. Brown explained: “…the grocers themselves said ‘let’s have one statewide ban that’s reasonable.’ So this bill has been worked through

licensing, workers’ compensation, taxes, pharmacy, health and nutrition, and more.

and this is the nature of the legislative process.

This is a compromise that’s taking into account the needs of the environment and the needs of the economy and the needs of the grocers”.

California leads the nation on progressive legislation, and this year was no exception.

Statewide single-use bags, GMOs, sick leave, groundwater, and electronic cigarettes were just a few of the bills that crossed legislators’ desks this year.

Skillfully led by Senior Vice President Keri Askew Bailey, CGA’s Government Relations team reviewed each of these bills, met with bill authors to improve and clarify bill language, built coalitions and negotiated acceptable compromises.

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Senate Bill 270 is a terrific example. The bill would make California the first state to ban single-use plastic carryout bags. Setting the stage, similar bills failed in prior years. More than 100 local ordinances were in place, with many more in the wings if some kind of statewide preemption failed again.

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CGA worked tirelessly with the bill’s authors on provisions that would be fair to customers, communities, retailers and others. CGA developed a revamped messaging strategy and led a diverse coalition of supporters including organized labor, environmental groups, poverty rights organizations, waste management firms, and local governments.

SB 270 passed the Assembly and Senate in late August. During a televised gubernatorial debate with his Republican rival, Gov. Jerry Brown announced publicly his intention to sign the bill into law.

Our industry’s voice was heard loud and clear.

97…The number of retail/supplier members of CGA’s Government Relations Committee. During 2014, the committee met, faithfully, every two weeks to discuss, debate and determine CGA’s position (support; oppose; neutral) on our 250 priority bills. I am so grateful and want to express my personal thanks to the committee members for their hard work and careful consideration.

During 2014, the committee met, faithfully, every two weeks to discuss, debate and determine CGA’s position (support; oppose; neutral) on our 250 priority bills.

1…The power of you – meeting with a legislator in Sacramento, or in his/her district, serving on the GR Committee, giving a store tour to a legislator, sending a letter, or placing a call. Each of our retail and supplier members has a great story to tell and can make a significant impact on business outcomes in Sacramento and locally. …The power of a unified association – congratulations to Ron Fong, Keri Askew Bailey and the entire CGA team for their expertise, tenacity and passion in leading CGA to one of its best Government Relations years ever. We’re lucky to have you. n

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VIEWPOINT

Road Trips & Metaphors KEV IN C OU P E

“Yes it’s been quite a summer, rent-a-cars and west bound trains.”

Okay, you’re right. I’ll look for any excuse to reference a Jimmy Buffett song. (Regular readers of my daily news blog, MorningNewsBeat. com, know that my three go-to sources are Buffett, Star Trek and Robert B. Parker, with a sprinkling of Shakespeare and maybe some Robert Frost from time to time just to justify my LMU education.) But the fact is, the summer of 2014 was one that had me on the road a lot, mostly on the west coast and frequently behind the wheel of a rental car.

Generally speaking, that’s a good thing. Driving from San Francisco to Lake Tahoe and then back over to the Napa Valley, for example, is a great way to put life in perspective, and an excellent way to get some thinking done.

I think about a lot of stuff: The novel I’m slowly, painfully trying to write (I like to joke that it’ll be a “black comedy about forward buying, justin-time deliveries and slotting allowances”). My kids. And, of course, the future of an industry trying to figure out how best to compete in an Amazon world.

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What it comes down to is how best to compete with Amazon, and it was during this recent drive that I think I found a metaphor that works. Go figure, it was right above my dashboard.

12 iStock/Thinkstock

It was, in fact, my Garmin GPS system.

Most of us have found that a GPS is an invaluable part of our car, and near critical to our daily lives. The GPS uses data and algorithms to determine the fastest way to get from point A to point B, navigate around traffic, find a nearby gas station, Starbucks, or whatever. These systems generally work, and they are efficient.

Now, think of Amazon as the GPS of retailing.

It relies on data and algorithms to predict what customers want, when they’ll want it, and even how much it should charge compared to thirdparty sellers. Founder/CEO Jeff Bezos loves data and algorithms; one gets the sense that if he could figure out a way to completely program actual human beings out of the Amazon equation, he’d do it.

To compete with Amazon, I think, you have to be the opposite of that – you have to not only rely on human beings, but embrace that fact, creating an employee base that feels and acts as if it is an asset to the business, not a cost.

And then – here comes the business metaphor – you have to be the guy with the old-fashioned map, who puts his arm around the shoulder of the traveler and says, “Here’s how to get to Continued on p. 14

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VIEWPOINT

Continued from p. 12

In essence, Amazon has tried to figure out a way to be the person with the map, but completely depends on its customers to perform that function. A product with 1,000 “this item changed my life” reviews gets exactly the same placement as the product with 1,000 “what a piece of crap” reviews.

This is why, I think, retailers need to do a better job curating product selection, and actually make value judgments about the items they carry in-store.

iStock/Thinkstock

there from here. But if you go this way, about an hour out there’s a really good place to stop for coffee and doughnuts. Then, here’s a really good place for lunch – make sure you try the apple pit for dessert. Here are all the places you need to stop on the way, because the views are spectacular. And when you get there, I have a terrific place for you to have dinner, and they have a wonderful beer and wine list. Now, it may take you a little longer to get there, but I can guarantee you the trip will be more rewarding and more fun.” (I recognize that my “points of interest” reflect my personal preoccupations, but you get the idea…)

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Now, sometimes people will want to get from point A to point B in the fastest possible time. They’ll opt for efficiency, and there’s nothing you can do about that.

But if you make yourself the guy with the map, offering advice and suggestions and ideas – being a resource of information, not just a source of product – you create for yourself a differential advantage that can and, I believe, will work.

14

Let’s be clear about something. It isn’t as if Amazon is going to cede this advantage to you. In fact, one of the defining characteristics of Amazon’s business model has been its user reviews, which were pretty much revolutionary when it made them part of each and every product page.

When you buy something at Amazon, you can read the good, the bad and the ugly about every product, and even, if you pay enough attention, start to get a sense of context because you start to develop an understanding of the people who are writing those reviews.

Not in every category, of course. But there have to be categories within the store – categories that are, in fact, duplicated in almost every store – in which a smart retailer could say, “Y’know, like everybody else, we have 36 different brands and two or three sizes of each item. We need to trim that down and offer one top tier brand, one medium tier brand, and one private label, with two sizes of each. We’re going to be as sharp on price as we can, but we’re going to use all the space we gain to focus on the products and services that really differentiate us.”

This is why, I think, retailers need to do a better job curating product selection, and actually make value judgments about the items they carry in-store.

Now, some will say that this vision of the supermarket veers wildly away from what people expect from their store, which is to be a place that carries everything. I would argue that in 2014 and beyond, the definition of “everything” has been exploded by the Internet, the definition of “store” has been challenged by Amazon and its brethren, and the definition…and implementation…of “differentiation” has become a matter and life and death for pretty much everybody trying to compete in this space.

Everybody is looking for a road map to success. These days, I think, it is critical to take – and offer – the road less traveled. (See? I snuck in some Robert Frost. That LMU education paid off, after all.)

Two roads diverged in a wood, and I – I took the one less traveled by, And that has made all the difference. n

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U PCOM I NG I N DUST RY W EBI NA R S

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Webinars are free for CGA members. $75 for non-members.

Learn More & Register at www.cgaef.org

W EB I NAR S Wed, Oct 1

10 AM (PST)

CTRL ALT Delete. Reboot your business… your future depends on it.* Speaker: Mitch Joel, President of Twist Image, Author There are five new movements that have changed business forever and yet, the vast majority of brands are doing nothing about it. The next five years of business will be about the convergence of these five major movements that will require companies to adapt like never before. Adapt or die? Some will struggle with this shift while others will simply roll along as the adoption incurs. The trick is in capitalizing on this moment in time, understanding these movements and being ready for your future (a future that will move at a much quicker pace). We have the technology. We have the data. We have the new media channels and platforms. We have the opportunity to publish whatever we want — in text, images, audio and video — instantly (and for free) to the world.

What we do with this moment will be telling. It will also set the pace for everything that flows out of our brands for the next decade. The opportunity is now. Take charge of your future. This is your reboot. *Rebroadcast of CGA Strategic Conference Keynote Luncheon

Wed, Oct 8

Lawfully Selling Shelled Eggs in California

10 AM (PST)

U PC O M I N G E V E N T S

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

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

CGAEF Golf Classic — So. Cal.

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 §§ 2599025994), 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.

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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 ozone-causing 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.

Wed, Dec 10th

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

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C GA N EWS

SEC Tours Ralphs Grocery Company Ralphs Grocery Company welcomed CGA Supplier Executive Council (SEC) members to its newest Fresh Fare location in Sherman Oaks, Calif., on September 9 for an exclusive store tour.

Top-level executives, including company President Donna Giordano; Kenny Kimball, vice president of retail operations; and Valerie Jabbar, vice president of merchandising, provided attendees with an in-depth look at Ralphs’ retail philosophy.

Within each store department, executives discussed the customer base and how Ralphs tailors the shopping experience to their consumers’ needs.

They also shared insights about the company and the grocery industry in general.

These exclusive store tours provide SEC members with an opportunity to learn how retailers approach operational strategies, and obtain insights on customer shopping habits directly from some of California’s top grocery retail executives. Earlier this year, SEC members toured Food 4 Less/Rancho San Miguel Markets and Gelson’s Markets.

For information on becoming an SEC member, contact Sunny Chang, CGA, at (916) 448 -3545. n

New Members

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CGA WELCOMES THE FOLLOWING SUPPLIER MEMBER.

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Hip Hop Beverage Corporation 20600 Belshaw Ave Carson, CA 90746 Contact: Jenny Mendez, Vice President E-mail: jmendez@drinkpitbull.com Tel: (310) 604 -9100 Website: www.drinkpitbull.com

CAPITOL INSIDER

Industry Avoids Legislative Earthquake Despite fears of how far a “progressive” agenda would be pushed in the California Legislature, CGA fared well this legislative session.

The past two years have been filled with speculation about what the impacts of seismic changes to California’s legislature would mean. In 2012, Democrats achieved singleparty hegemony by capturing a two-thirds supermajority in both houses of the Legislature, as well as every statewide elected office.

We were successful in blocking an attempt to create a state grocery worker retention statute modeled after the Grocery Worker Retention Ordinance in place in Los Angeles, San Francisco and three other cities. The United Food and Commercial Workers union pushed the idea in the final two weeks of session, hoping to limit debate and scrutiny of the proposal. We are unclear whether the idea will surface again in 2015, but for now it has been set aside.

The Legislature itself ushered in one of the largest “freshman” classes in history – with more than half of the Assembly never having served previously. And state elected officials competed mid-term for re-election in newly drawn legislative districts, drawn for the first time by a “citizens’ commission” rather than lawmakers themselves.

Now that the 2013-14 Legislative Session has adjourned, we have answers to some of the questions pundits and analysts, not to mention those trying to run businesses in California, have been asking about just how far Democrats would go in pushing a “progressive” agenda.

While the business community did experience setbacks with a minimum wage increase, it also scored victories in defeating minimum wage indexing and property liens for unpaid wages. A major revision to the water bond that will appear before voters in November was completed before the end-of-session crush began, paving the way for work on other substantive issues.

The grocery industry specifically fared well this session.

Both the Assembly and Senate passed SB 270 in the final days of the Legislative Session making the California Legislature the first in the country to pass such a measure. The bill now sits on Governor Brown’s desk. He has until the end of September to either sign or veto the measure.

We encourage all CGA members to let the Governor know the importance of this measure to our industry.

We were, unfortunately, unable to block legislation pushed by major beer companies prohibiting manufacturer-funded paper coupons and electronic scan. The bill, AB 1928, was sponsored by large beer makers and will force an end to existing discount partnerships beginning Jan. 1, 2015.

All in all, the 2014-15 Legislative Session was not too different than others. We now focus our attention on the Governor and then to the mid-term elections. Before we know it, a new class of legislators will be sworn in and the process will start anew. n

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And truth be told, things turned out much better than many thought, in part based on a series of vacancies and lawmaker absences that prevented Democrats from exercising their supermajority in the Senate.

We also ended a six year battle for creation of a uniform, statewide standard for single-use bag regulation in the grocery industry. This year’s measure, SB 270 (Padilla, de Leon, Lara) was substantially similar to past state bills in banning the free distribution of plastic single-use carryout bags and mandating a minimum charge on single-use paper ones.

22 Serghei Platonov/iStock/ Thinkstock

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PERSPECTIVE

CGA Posts Successful Legislative Year C HRI S M IC HE LI Legislative Advocate Aprea & Micheli, Inc.

The California Legislature adjourned in the early morning hours on August 30 and Gov. Jerry Brown has until September 30 to sign or veto legislation. The association had a successful year, although it is still battling a few remaining issues that reached the Governor’s desk.

The California Grocers Association helped lead the opposition on several bills defeated by the Legislature, including the proposed minimum wage increase (SB 935), the “split roll” parcel tax bill (SB 1021), the product liability expansion

subject to a business’ control would establish a terrible precedent in California law. It would also create a disincentive to use contracted workers.

We are working diligently to ensure that this bill gets vetoed by the Governor.

measure (AB 2372), and the pre-judgment employee wage lien bill (AB 2416).

Even more troubling for California businesses was AB 2416, which would have allowed employees, their representatives, or even creditors of the employee to file pre-judgment wage liens on the employer’s property.

Ultimately, AB 2372 was held on the Senate Appropriations Suspense File due to major opposition from organized labor that successfully argued the bill would preclude its ability to pursue a future split roll property tax ballot measure. Although CGA was officially neutral on this bill, it was tracked closely. The association monitored the pending amendments because of their potential implications for a split roll property tax ballot initiative.

Passing out of the Legislature and reaching the Governor’s Desk were AB 1522 (Gonzalez), AB 1556 (Perea), AB 1723 (Nazarian), AB 1897 (Hernandez), AB 2494 (Cooley), and AB 2617 (Weber). These bills made it to both floors with minor amendments that did not address the major opposition concerns.

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It should be noted that the opposition coalition on AB 1522 was able to secure amendments to temper CGA’s concerns and the California Chamber of Commerce removed its “Job Killer” tag.

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The coalition remains opposed to the bill and is seeking a gubernatorial veto. The bill mandates all employees, whether part-time or full-time, to be provided with three days of paid sick leave. Existing paid time off (PTO) policies will satisfy this requirement so long as an equivalent amount of time is provided. We expect the Governor to sign this bill.

Assembly Bill 1897 and its new civil liability for the use of contracted workers that are not

It should be noted that the opposition coalition on AB 1522 was able to secure amendments to temper CGA’s concerns and the California Chamber of Commerce removed its “Job Killer” tag.

CGA and other groups successfully argued that AB 2416 would have been extremely disruptive to California businesses and would have created unnecessary liability for a genuine problem of wage theft. CGA helped lead the opposition and, despite 17 hours of lobbying on the last day of session, and two sets of amendments by the author, the bill ultimately was not taken up on the Senate Floor before the Assembly adjourned at 2:35 a.m. on August 30. The Senate adjourned at 3 a.m.

We also support AB 2494 (Cooley) to enhance existing law concerning frivolous actions. It would create a new Code of Civil Procedure provision to combat unwarranted litigation tactics. CGA was able to address concerns of the opposition and joined the bill’s sponsor, Civil Justice Association of California. We expect the Governor to sign this bill.

Also of note was Sen. Mark DeSaulnier resurrecting his SB 1372 on the Senate Floor

PERSPECTIVE

the last day of the session, which had been previously defeated on May 28. The bill would have imposed higher income and franchise taxes on publicly traded corporations based upon the differential between CEO pay and the median wage of the corporation’s employees. It would have generated about $340 million annually according to a revenue analysis by the Franchise Tax Board.

CGA was able to secure amendments to AB 1634 (Skinner), which would have modified OSHA violations and their expedited process. As a result, the coalition removed its opposition to the bill. The Governor is expected to sign the bill.

In addition, the association worked diligently as part of a small coalition against AB 1710 (Dickinson) concerning data breaches. Ultimately, CGA was unable to come to an agreement, but the coalition removed its opposition to the bill. At the same time, CGA believes Attorney General Harris is likely to pursue a data breach bill in the 2015 Legislative Session.

CGA was able to secure amendments to AB 1634 (Skinner), which would have modified OSHA violations and their expedited process. As a result, the coalition removed its opposition to the bill. The Governor is expected to sign the bill.

Finally, CGA was successful in defeating SB 1407 (Jackson), sponsored by the California Employment Lawyers Association. The bill would have expanded opportunities for employment litigation by limiting the ability for businesses to settle disputes with waivers of liability. The sponsor and author dropped the bill, but its expected a variation of this bill to return in the 2015 Session.

The new Legislature will convene for the 2014 -15 Legislative Session on December 1. n

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

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WASHIN GT O N R EP O RT

Get the Government Out of My Watermelons THE FEDERAL GOVERNMENT IS CONSIDERING IMPOSING REGULATION REQUIRING GROCERS TO LABEL CUT WATERMELONS WITH CALORIE INFORMATION. I grew up in Tennessee, and we grew watermelons with mixed success. But thankfully, there were a lot of farmers around who grew perfect watermelons with a deep red color and a sweet smell that immediately told you it was going to be good. Okay, I am reminiscing, but for a reason.

The first thing a good grocery store produce manager does is expose his customers to the two best attributes of that watermelon – color and smell. You cut it open!

Now, the federal government is trying to step in to say as soon as you cut that supermarket produce department watermelon open, it becomes a potential restaurant-type food watermelon and has to be labeled with calorie information.

This change is due to a provision buried deep within the 2,500 -plus pages of the Affordable Care Act “Obamacare” and the rules being written by the U.S. Food and Drug Administration (FDA) to implement the law – chain restaurant menu labeling.

It gets more absurd.

The federal government, clearly uninformed about grocery store operations, has now identified this newly cut supermarket watermelon as a “food on display.” Isn’t that the purpose of a self-service

As a “food on display,” a supermarket watermelon would have to be labeled with the calorie information directly affixed to or adjacent to the item, not just on a menu or menu board, which is the required method for restaurant food.

Perhaps a more critical question is “how many calories are in a quarter of a watermelon?” It should come as no surprise that the answer will depend on how large the watermelon is that you are quartering and the answer could easily fluctuate greater than or less than the government-authorized deviation of a 20 percent variation. On top of that burden, if you get the number wrong, all of this could be subject to criminal penalties.

Now that I have you mad, there is something you can do! One of your own legislators, Rep. Loretta Sanchez (CA- 46) has cosponsored legislation along with Rep. Cathy McMorris Rodgers (WA-5) and 80 other members of Congress, the Common Sense Nutrition Disclosure Act, H.R. 1249 or S. 1756 in the Senate, authored by Senators Roy Blunt (MO) and Angus King (ME) that would put a stop to defining watermelon and birthday cakes as “restaurant-type” foods subject to these new rules.

Urge your members of Congress to add their name to the 82 folks who are already co-sponsors, so we can spend our time and efforts on more important topics than determining how many calories are in quarters of a watermelon of varying sizes.

You can send a letter via our grassroots system (www.foodaction.net) to get the government out of your watermelons! n

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

To help engage with the electoral process, FMI has created a completely non-partisan Voting Resources web page www.bipac.net/page. asp?content=star tpage&g=fmiaction 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).

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grocery store – to display foods like watermelons so customers can pick out exactly the one they want?

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WASHIN GT O N R EP O RT

Fresh Is In RETAILERS HAVE SEEN AN UPTICK IN CONSUMER DEMAND FOR HIGH-QUALITY FRESH AND LOCAL FOODS. Retailers have seen an uptick in consumer demand for high-quality fresh and local foods. According to the 2014 Annual NGA-SupermarketGuru Consumer Survey of nearly 1,400 household shoppers, 85.9 percent of survey respondents said they spend more than half of their fresh-food dollars in supermarkets, and a recent poll conducted by The Hartman Group showed that roughly half of American consumers have bought local produce in the past year.

Driven by knowledgeable consumers who are increasingly seeking fresh food choices, independent grocers are among industry leaders in expanding their fresh selections in produce, meat, dairy and bakery items. The result is improved sales volume and higher shopper satisfaction.

Let’s take a quick look at what’s happening.

Fresh is in because of several important trends: n

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

Peter Larkin President/CEO National Grocers Association

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n

Shoppers have become more health and wellness conscious and believe that fresh is not just better for their diets, but also because right-off-thefarm items taste better. This perception is being reinforced by an increasing emphasis on “foodie culture” that highlights fresh ingredients. A new report from consulting company A.T. Kearney found that two-thirds of a sample of 1,000 grocery shoppers believe freshness is the most important criteria in choosing what foods to buy.

Nationally, fresh is making a huge splash in trendy restaurants in part due to the creativity of “locavore” cuisine. As more and more shoppers prepare meals at home, they want to duplicate the flavors and varieties from dining out into their homemade meals.

While all food retailers are experiencing a fresh boom, and contributing to it with increased promotional budgets, independent grocers have been in the vanguard of emphasizing fresh items throughout their stores.

And, independent grocers are in a unique position to capitalize on this movement through the relationships they have already created with local producers in

their communities. With their strong community roots, and in response to what their customers want, independent grocers often prefer to locally source perishables to extend their community outreach to business partners in their trade areas.

As Kate Stille, director of marketing for Nugget Market, Inc. explains, “we have a vision that emphasizes fresh whenever possible, coupled with operating in a nimble, less bureaucratic style in which every element of the business is dedicated to the same goal – offering the best, freshest food at the lowest price possible we can present to our customers.”

A.T. Kearney found that two-thirds of a sample of 1,000 grocery shoppers believe freshness is the most important criteria in choosing what foods to buy.

Nugget operates nine stores in the heart of one of the nation’s most fertile agricultural areas – the California Central Valley. The location gives Nugget a tremendous built-in opportunity to promote fresh, and the family-owned business has taken full advantage.

Nugget’s example may be unique to its California setting, but as independent grocers throughout the nation are showing, fresh has become not just a marketing component, but also a competitive business advantage.

Whether blueberries in Maine, sweet corn in Ohio, or avocados from California, independent retailers across the nation are seeking out local sources as a way to meet customer expectations with fresh perishables.

In doing so, they’re demonstrating the sage advice behind the often-used saying: “think global but execute local.” n

C T R L A LT D E L E T E

BY LEN LE W IS

CTRL ALT DELETE

HOW MANY TIMES HAVE YOU USED CTRL ALT DELETE – THE THREE KEY FUNCTION THAT REBOOTS YOUR PC? WHAT SOME RETAILERS HAVE OVERLOOKED IS THAT THE SAME PRINCIPLES APPLY TO BUSINESS WHEN IT COMES TO MEETING THE DIGITAL FUTURE.

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“Retailers can either put digital in the passenger seat next to them, or see it, and their business, slip away in the rearview mirror.”

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This is the message being brought to this year’s CGA Strategic Conference by author, lecturer, digital guru and self-described ”media hacker” Mitch Joel, president of Twist Image, Montreal-based digital marketing agency.

“I believe retailing has come a long way in the past several years,” Joel recently told California Grocer.

“It’s just been a bit slower in coming to digital. The

logical answer is to look at the retail business, which has been predominantly driven by square footage.”

Maximizing revenues and profits has been a matter of making real estate decisions about physical locations, according to Joel.

“But in those cases, any time you’re trying to integrate any type of technology, cost is a barrier and if you’re a small or medium sized retailer putting in the infrastructure is a challenge,” he said.

However, Joel in his aptly named book “CTRL ALT Delete,” has identified five basic movements that are

C T R L A LT D E L E T E

drastically changing the business environment and will help retailers in their digital journey.

1. Direct relationships with consumers

2. “Utilitarian” marketing

Media must be both active and passive. The success of television and other media has been driven by the fact they are passive consumer experiences.

For example, for years television only gave consumers access to a show at a specific time. Now many forms of media are active, allowing consumers to choose the time of interactions. You have to find the right medium for your specific marketing strategy.

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In a world of apps, give consumers something that will augment their lives, something they will use consistently and not just discounts and coupons. This

3. Match marketing to media and user

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Today, manufacturers and retailers are competing for a direct connection with consumers in what he calls a “bizarre love triangle.” For example, a retailer can sell consumers headphones, but it’s the manufacturer who also wants the relationship with them. You have to own the relationship by understanding who the customer is and how they interact with your company.

is what cements them to your brand. In many cases, this will involve tech apps. Your goal as a marketer is to make the offering so irresistible that consumers will put it on the home screen of their mobile devices.

Continued on p. 38

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Continued from p. 37

4. New sources of consumer data

Businesses are on data overload, but still are not using it effectively. Linear data collected by companies like email addresses are not enough. Circular data like Tweets, “likes” on Facebook and website comments reveal more interesting information.

5. One-screen world

Many screens are available to consumers, but the only one that matters is the one in front of them at any given moment. It’s not about mobile devices, tablets or the Web, but how a company is creating an experience that flows through all of them.

Over the next several years, good business practices will be about the convergence of these five fundamental factors, according to Joel.

What brands really understand this transformation?

“It’s hard not to mention Amazon when you talk about this experience,” Joel admits. “But there are also brands like Red Bull and Go Pro. They have rebooted their business to adapt to the new environment.”

Joel said that some businesses need to reboot, while others successfully make the transition and still others are “bathed in bits.”

However, the digital world is not just the purview of large brands or tech companies.

“What makes all this interesting is the fact that the technology is very accessible,” he said. “You don’t need a heavy infrastructure and it’s easy to use. All it takes is the capacity of the brand, or retailer, to embrace the fact that they can easily do these things.”

“It’s a matter of whether they have the desire and the will,” he said. “Many are quite happy with where they are, but anyone interested in growing and creating a sustainable business model, can’t ignore what digital can do with customers and on the business-tobusiness side. If they do, they will feel a lot of pain as the years go on.”

However, the good news is that the cost of adopting the right technology has dropped dramatically in the past couple of years.

There is a marketing component to it, Joel said. How you connect messages to consumers is important.

Over the next several years, good business practices will be about the convergence of these five fundamental factors, according to Joel.

“Think of online ordering for supermarkets and what the ability to deliver does to the infrastructure – how it changes the dynamics of the business,” he said. “We have to think about pushing it a bit further in terms of new services and product offerings – like connecting with a Netflix subscription service when someone is ordering groceries for the week.”

However, he noted that this is more than just omnichannel marketing.

“That has been one of the favorite buzzwords in the retail world for a long time,” he said. “But the omnichannel challenge is a tale of two cities. “ On one hand you have organizations looking at their infrastructure and trying to figure out how to break down their own silos so they can offer customers a true omni-channel experience.

“On the other hand your customers don’t care if the company isn’t fully omni-channel, or if your e-commerce division is different from your mobile development, which is different from marketing,” he said. “All they see is a bad experience on your website, or on their mobile devices. Consumers have no understanding, or interest in how you act as a business. We have to act more as the consumers are interacting instead of the other way around.”

As to whether more companies are investing in the needed infrastructure, Joel noted: “They really don’t

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Joel said every business has the ability.

“It’s just a lot cheaper and more effective to do things,” he said. “For example, look at the menu boards in fast food restaurants. They used to be pieces of paper or plastic. Now they’re being replaced by digital signs that are just as cost effective and can be used with mobile technology to transfer information. Infrastructure is traditionally hard to change. You have to adapt to what consumers are doing with technology.”

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Continued on p. 40

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

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Continued from p. 38

have a choice. The foundational movements I’ve discussed are changing business forever.”

However, he emphasized that there is no such thing as a one-size-fits-all digital strategy.

“It’s not like the old days when you spent money and advertised on all three networks,” he said. “People still look at digital as a marketing or communications channel.

Joel said he looks at digital as a utility in much the same way as electricity, or transport. Every brand business should be able to utilize it to create their own metrics and evaluations.

“I don’t like it when people say you should be on Facebook or Youtube, or that you should be doing e-commerce,” he said. “Smart businesses should know what they’re doing in digital and why. This will lead to a strong, unique digital strategy. And then you can start building deliverables, timelines and IT roadmaps.”

One major element is improving the consumer’s shopping experience, said Joel.

“There are people who optimize the online shopping experience at a dramatic and impressive pace,” he said. “But shopping online is not the same as physical shopping. The mistake made by the industry was trying to replicate the physical experience.”

Joel said he is seeing more online retailers trying to provide things a consumer can’t get in physical space like a dynamic recommendation engine that offers five other items you might like based on your purchase.

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“It’s easy to do when you have historical and anecdotal data, but very hard to do in physical spaces,” he said. “Or, customer reviews that enable you to look at a myriad of information and slice it in any number of ways.”

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Joel said digital allows for levels of comparison shopping that could never have been done in a physical store.

“When you add in the mobile component, it’s a very different shopping experience,” he said. “I would argue that great brands are making shopping experiences more like Amazon and great retailers are

Mitch Joel 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.

making in-store experiences the things that Amazon could never be.”

The convergence of the physical and digital world is already taking place in retailing.

“Not only is it digital in terms of what I have in my pocket like site-based apps but also in physical spaces,” he noted.

“For example, I’m very passionate about what LEGO does in digital at their in-store kiosks,” he said. “They have the ‘digital box’. You hold the LEGO box up to it, and with augmented reality, it builds what’s inside the box on the screen. You can move it around in 3D and see all the moving parts. This is a functional digital utility that is a great integration of digital and physical to create a better customer experience.”

Studying demographics is not necessarily the answer to a digital strategy, according to Joel.

“If you look at real market research now, you could argue that demographics and psychographics have been returning a less than stellar performance,” he said. “I believe the fundamental reason is because we are in an age of personalization. A brand doesn’t understand Mitch Joel just from having my email address, but because we’re connected on Twitter, Facebook, LinkedIn and on Youtube channels. They can understand who I am, and who I am isn’t always a matter of demographics or psychographics.

“In fact, who I’m connected to, what I’m sharing and who I’m looking at is much more important,” he said.

“That is the real value. We created demographics and psychographics back in the day because we didn’t have this information.” n

So many customers, so many cards.

Š 2014 Hallmark Licensing, LLC

AHEAD OF THE CURVE

A g n h i e y a a d t S

BY LEN LE W IS

Fres h

CAN THE SUPERMARKET INDUSTRY STAY AHEAD OF THE CURVE WHEN IT COMES TO SATISFYING THE NEEDS OF MILLENNIAL CONSUMERS? Tina Wells, veteran researcher and consultant, founder and CEO of Buzz Marketing Group, and a featured speaker at this year’s CGA Strategic Conference sat down with California Grocer to discuss this new demographic and what they expect.

California Grocer: Everyone seems to be focusing on the Millennials, but how influential is this group in terms of their buying power?

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WELLS: “The estimate now is about $200 billion.

That is how much power lies in the hands – and the purchases – of the Millennial Generation. And it won’t stop there because that power is expected to grow in the coming years. The ability to reach this demographic and tap into that power will definitely be an asset for any company, or organization.”

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CG: How different are Millennials from previous generations in terms of what they spend and how much they buy?

WELLS: “In some ways, it’s very much like the previous generation. Price points are still a major deciding factor for them. Our research finds that approximately 87 percent of Millennials use coupons

on a daily, or weekly basis. However, they are also more inclined to consider value rather than just price.”

CG: How so?

WELLS: “One of the major trends that we pointed out at the start of this year was the rise of the “Causeaholic” and its impact on retailers. For instance, our research indicates that 74 percent of Millennials are more likely to purchase an item if the proceeds go to charity, or if the company employs a buy-one-give-one system. Consequently, companies like American Eagle Outfitters and Keds are on the decline, while companies such as TOMS and Warby Parker are experiencing success, particularly within Generation Y. This is because these consumers are seeking a true value proposition when they seek out brands and products.”

CG: What are these programs like?

WELLS: “TOMS’ One-for-One model matches every pair of purchased shoes with a pair of new shoes for a child that needs it, and they just expanded their model to TOMS Eyewear. On the other hand, Warby

AHEAD OF THE CURVE

o f t h e C u rv e 5

Parker makes a donation to nonprofit partners based on glasses sold to cover the cost of sourcing the glasses to certain areas of the world. The selected nonprofit organizations don’t just donate glasses.

“They focus on training people in developing countries to give eye exams and sell glasses to their communities at affordable prices. The key here is that Millennials and other customers are able to know where exactly their money is going, especially with the impressive transparency of companies like Warby Parker.”

CG: Should grocers be emulating them in some way?

CG: A lot has been written about how Millennials have

WELLS: “Because things are not as certain as they used to be, this generation has chosen to instead pursue careers based on factors like personal fulfillment, company culture, ability to grow, and the ability to impact their not-so-perfect worlds. And, as our most recent Millennial Entrepreneurship Report revealed, more and more are opting to start their own businesses in order to get what they want.

CG: What can companies do to attract their attention?

WELLS: “Assuming that you’re talking about persuading Millennials to pursue careers in the grocery industry, gaining job experience, the ability to grow with the company, and overall company culture are very important to them. Obviously, salary is the deciding factor for many.

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lost faith in the old “American Dream” of family, home ownership and children? Do you buy into that theory?

CG: What is that approach?

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WELLS: “Remember, Millennials seek value in many forms. Grocery stores can follow similar strategies in order to provide value in a way that fits their own products and business models. When purchasing a product, value can be the knowledge that your money is going toward a better cause, while also being used to obtain a material object. Value could be the fact that you are joining a team or community by purchasing an item. It could also be the ability to create and customize a product to your particular liking.”

WELLS: “They haven’t necessarily lost faith in the American Dream, but their version of it has definitely changed. We can see this most clearly when looking at Gen-Y’s career choices. Instead of opting for the highest available degree in pursuit of the highest possible salary, Millennials instead are taking on a broader approach.”

Continued on p. 46

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Continued from p. 45

“Our research also reveals that 85 percent believe that growth opportunities are the most important perk and 82 percent even stated that growth opportunities would cause them to leave their current job for a new one. Employers need to show Millennials that they will be allowed to develop in their own way and with the subtle guidance by the company that is purposedriven in addition to being profit-driven.”

CG: What impact are their attitudes going to have on brand marketers and retailers?

WELLS: “In a word – customization! It is no longer an option for customers to go into a store of any kind and not get what they want. Our research has shown that Millennials are interested in entering an experience or a lifestyle when purchasing a product, and part of that is the ability to curate that experience.”

CG: How should the industry be creating those experiences?

WELLS: “It depends on the store. Grocery stores can take one of two extreme approaches, exemplified by two of the most popular among Millennials – Trader Joe’s and Walmart. On one hand, you can design your layout, look and food selection based on Millennials’ interest in where their food comes and

how it’s produced, or on their interest in comfort and friendliness while shopping. On the other hand, you could establish yourself as a retailer that provides almost anything that Millennials need and at incredibly low prices. The two are very different techniques but are effective in their own way.”

CG: Do they care less about physical stores and more about online shopping experiences, not just for groceries but other products as well?

WELLS: “Online shopping is simply more convenient. It is easier to compare prices among various brands and various vendors for the same product, so it could end up being less expensive as well. But there are certain purchases – like fresh fruit – for which it is better to shop in person.”

CG: Will online shopping really change the game?

WELLS: “There isn’t a huge shift yet to online grocery shopping. Admittedly, our research shows that 22 percent of Millennials shop online on a daily basis – but that is not usually applicable to groceries.

Millennials still appreciate going to the store to see and feel what they are buying before they buy it – and this is particularly important when it comes to produce and other foods. At the same time, services like AmazonFresh are working to find a way around that. However, we are not sure how and when they will be able to do that effectively.”

CG: Given all that, how do they feel about WELLS: “I’d say that the grocery industry is still pretty strong among Millennials at the moment.

According to our research, about 51 percent buy groceries more than once a week. That’s a rather significant number. However, retailers should be aware of the sprouting online grocery trend.

Companies have started venturing into this territory in order to provide the convenience and customization that Millennials want.”

CG: Who should we be watching most closely?

WELLS: “Amazon and Walmart have entered the game with AmazonFresh and Walmart To Go. And although there are some kinks to work out in pricing and methodology, it is a service that will drastically

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supermarkets?

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Continued on p. 48

AHEAD OF THE CURVE

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Continued from p. 46

change the game once companies figure out how to do it right.

CG: What can supermarkets do to attract Millennial consumers? What pitfalls should they avoid?

WELLS: “Reach out to them where they are. If they are on Twitter and Instagram, start a dialogue with them through those social media platforms. If they are on their email, send them coupons there instead of through the mail. Establish your company as an interactive brand that evolves along with Millennials.”

CG: Should retailers and marketers also be looking at

Tina Wells 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.

the post-Millennials as a future customer base?

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WELLS: “Generation C is definitely a force to be reckoned with. We refer to this group of pre-teens, tweens, and young teenagers as Generation C because they are connected, conscious, creative

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consumers and curators. Although they are still an up-and-coming demographic for the grocery industry, their impact on their parents’ purchasing decisions in various other industries is incredibly potent.” n

C ALIF ORNIA CORNUC O P IA C A L I F OR N I A G R OC E R

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California

CORNUCOPIA

The Power of Produce for California Retailers Tom Stenzel, President & CEO United Fresh Produce Association Two of the most powerful trends at retail today are the growing importance of the fresh produce department, combined with the desire for locally produced goods.

California grocers have the unique geographic opportunity to marry those trends into a powerful in-store marketing strategy, given that one-half of the fruits and vegetables consumed in America are homegrown California products.

Consumer research and years of retail experience have confirmed that fresh produce provides retailers an unparalleled opportunity to build customer loyalty, increase sales, and drive profitability. That’s true for retailers across the industry, whether specialty stores with a focus on fresh, traditional grocery stores, club stores or even small footprint independents and convenience stores.

California grocers can maintain a year-round supply of local produce to meet their customers’ desires.

Instead of just summer tomatoes and sweet corn, California retailers have the local knowledge and produce vendor partnerships to create great local displays and market a wide array of products, including ethnics, specialties, organics and more, all grown nearby.

This month, California Grocer introduces California Cornucopia, a new department focused on California’s rich agricultural industry.

With a majority of shoppers choosing stores based on the quality and variety of fresh fruits and vegetables, both large chains and independent retailers know they need to create attractive produce departments to compete in today’s retail environment.

At the United Fresh Produce show in Chicago this summer, co-located with the FMI Show, we honored 35 retail produce managers from across the country, celebrating the 10 th year of this recognition program designed to model excellence in store-level produce execution.

But while retailers across the country are searching out local, seasonal producers to feature in their stores,

Over the years, we’ve seen how innovative retailers can empower individual store operators in both product

And, while many supply chains are still pretty rigid and some companies are seeking to bring grocery predictability to the high-flying produce department, aggressive companies can still find unexpected opportunities in produce.

When a supplier is long on product, an extra load of high quality produce that a vendor needs to move can be marked down and blown out to shoppers as a value deal. Branding such temporary opportunities as taking advantage of local deals is an even more powerful message for shoppers.

Since 2010, the United Fresh Produce Association has been honored to team up with a number of California grocers and produce suppliers to donate salad bars to more than 800 California schools through our United Fresh Start Foundation.

Retailers across the state have built deeper community connections by donating salad bars, with Safeway, Save Mart, Stater Bros. and Whole Foods all donating more than 10 salad bars to schools in their areas. They’ve also connected with major community partners and health organizations such as Kaiser Permanente, the Health Trust, the Silicon Valley Leadership Group and others who have all joined in the salad bar campaign.

Similarly, retailers can often find spot buys from California wholesalers due to their proximity and partnerships with growers, which can reduce the cost of goods and bring ripe and ready-to-eat produce to local stores.

Of course produce suppliers have been leading the charge, through key partners like the Fresh Produce and Floral Council in Los Angeles, the GrowerShipper Association Foundation in Salinas, the California Table Grape Commission in Fresno, and hundreds of individual companies.

California grocers can also use their local fresh produce connections to enhance their relationships in their communities, thus building personal loyalty that can mean more than price.

While our mission is truly to boost kids’ healthy eating habits and combat the childhood obesity crisis, retailers and produce suppliers alike recognize that we’re also building future customers.

By connecting retail programs with in-store events and farm-to-school programs, grocers can build their connections with local schools, community organizations and local non-profits. Consider produce department tours for elementary school classes, incorporating local produce when available, and displays that highlight local community organizations.

It won’t be many years before today’s school kids are the decision makers in stores, and we’re committed to helping them choose more fresh produce for a lifetime. When it comes to fresh produce for California retailers, we’re working together to build a healthier society, and a healthier industry at the same time. n

C A LIFORNIA CORNUCOPI A

selection and merchandising to grow sales. We’ve found that in-store management can make as much as a 20 percent difference in produce sales, transferring that labor expense from a cost to a profit center.

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

| 51 iStock/Thinkstock

C ALIF ORNIA CORNUC O P IA C A L I F OR N I A G R OC E R

| 52

A Conversation with Bonnie Fernandez-Fenaroli Executive Director, Center for Produce Safety

By Oscar Katov Before the Center for Produce Safety (CPS) opened its doors in 2007, a century already had elapsed since enactment of the first federal regulations for food safety in 1906 – responding in part to public shock from descriptions of horrific sanitary conditions in Chicago’s sprawling meat packing yards, laid bare in a new book, The Jungle.

Ultimately, these early government actions had an extraordinary impact beyond the meat industry, also stimulating science-based applications in agriculture – ranging from the growing and harvesting stages of fruits and vegetables to awareness of consumer health challenges, in combating food-borne illness.

As the industry has grown and prospered, public– private enterprises have become increasingly effective, and are effective in Center programs. The leadership role of the Produce Marketing Association in the creation of the Center and its continuing support are powerful factors in contributing to the industry’s welfare.

California Grocer recently spoke with CPS Executive Director Bonnie-Fernandez Fenaroli about the Center.

What is the defining purpose of the Center since day one?

CPS is focused exclusively on providing the produce industry and government with open access to actionable information needed to continually enhance the safety of produce.

When did the idea of a Center originate?

CPS was created in 2007 in response to the 2006 E-coli outbreak in spinach.

Who were key individuals involved in the Center’s start-up?

There were three key individuals. They were Bryan Silbermann, Produce Marketing Association; A.G. Kawamura, California Secretary of Agriculture; and Bruce Taylor, Taylor Farms.

In one of your announcements regarding contacts in the supply chain, farmers and shippers were listed, but no grocers.

Retail and food service have been intimately involved in CPS. The founding chair was Tim York, Markon Food Service, and Mary Ellen Burris, Wegmans, and Craig Wilson, Costco, were on our board of directors. We welcome support and involvement from the grocery industry.

Please identify several research projects and their applications.

Is food-borne illness a continuing investigation?

As the produce industry strives for continuous improvement in food safety programs, CPS supports this effort through the identification and funding of research, and priorities are collected and evaluated by the CPS technical committee. There is no limit on how to identify the need for new information including the monitoring of food safety outbreaks and recalls. All members of the produce marketing chain, including grocers, are encouraged to bring their research ideas to CPS. Since 2007, how many research projects have been undertaken and what is the total funding?

CPS will soon announce its next set of research awards, which will bring the total to 100 funded projects for over $16 million.

How was the center originally funded?

A N I N V I TAT I O N: “ B R I N G U S R E S E A RC H I D E A S”

Ongoing administrative costs are covered by PMA, enabling industry and public funds to go exclusively to research. This is quite a unique aspect of CPS. We have an annual operating budget of approximately $450,000 with approximately $3 million in research funds coming from the industry. n

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Bonnie Fernandez-Feranoli Executive Director Center for Produce Safety Phone: 530.757.5777

How is the work of the center funded today?

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

As the produce industry strives for continuous improvement in food safety programs, the Center for Produce Safety Center supports this effort through the identification and funding of research priorities which are evaluated by the CPS Technical Committee. There is no limit on ways to identify the need for new information including the monitoring of food safety and recalls, as well, as the evaluation of company and industry specific food safety practices. All members of the marketing chain are encouraged to bring their research ideas to CPS.

The Center was originally established by public and private ownership at the University of California, Davis, with initial funding provided by the California Department of Food and Agriculture, the University of California, Produce Marketing Association and Taylor Farms.

C A LIFORNIA CORNUCOPI A

Since 2008, CPS has funded 85 research programs with some of the world’s leading food safety scientists.

We have endeavored to fund produce research targeted to the immediate needs of all stakeholders in the produce supply chain

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LOC AL FOOD

BY M I K E GOLDB LATT

EMBRACING THE LOCAL FOOD MOVEMENT

LOC AL FOOD

LOCAL FOOD, ONCE THOUGHT OF AS A PASSING FAD, IS FIRMLY ENTRENCHED IN THE MAINSTREAM. In July, the U.S. Department of Agriculture announced 8,268 farmer’s markets listed in the National Farmers Market Directory, a nearly 60 percent increase from just five years ago.

Leading the nation is California with 764 registered markets, nearly 10 percent of the national total, followed closely by New York with 683. [See Figure 1] California and New York are also home to many of the local organic and fresh food startups looking to disrupt the traditional retail grocery business – companies like Good Eggs in San Francisco and Blue Apron in New York City. Amazon Fresh, while not a pure local food player, is part of a rising tide of entrants betting that consumer demand will drive the penetration of local, fresh, and convenient food beyond the neighborhood farmer’s market.

They are right.

Over the last two years, A.T. Kearney has polled more than 2,000 Americans to uncover their purchasing habits, channel preferences and willingness to pay for local and fresh food – and in fact, these startups are focusing on the right markets. The west coast and northeast buy a larger share of local food and are

willing to pay more for it. These disruptors are also pushing to leverage a lingering consumer perception that big box and national retailers are not as capable to provide high quality, affordable local and fresh food. [See Figure 2] Despite these challenges, California retail grocers have considerable advantages that, with a few strategic investments, can be leveraged to win the battle for share of stomach relative to fresh and local.

Nearly 97 percent of Americans typically shop for groceries at traditional retail channels (big box, supermarkets, and specialty retailers). Only 3 percent of consumers surveyed shop at farmer’s markets for their primary grocery purchases. Online disruptors have had a growing, but negligible impact thus far.

Moreover, the No. 1 reason shoppers are not buying more local food is lack of availability (nearly 50% of survey respondents). Given the existing scale of Continued on p. 60

Figure 1: USDA National and State Level Count of Farmer’s Market Listings National Count of Listings

Top 10 State Level Listings

+57% 7,864

8,144

8,268

764 683

7,175 6,132 5,274

339

2010

2011

2012

2013

2014

CA

NY

MI

OH

309

IL

California leads the nation with over 750 Farmer’s Markets; almost 10% of the National Total

MA

297

PA

295

WI

249

245

VA

MO

|

Source: USDA National Count of Farmer’s Market Listings

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2009

311

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LOC AL FOOD

C O N TI NU E D

Continued from p. 59

Figure 2: Customer Perception of Retailer by Quality and Price 2014 2013 (scale 1 to 10, with 10 as most favorable)

Quality Comparison

Pricing Comparison 8.3 8.3

Farmer’s market

Combined Ranking

Local Supermarket

6.8 7.3

7.5 7.4

Farmer’s market

6.9 7.1

Local Supermarket

6.9 6.9

National Supermarket

6.7 6.8

Local Supermarket

Speciality Supermarket

7.1 6.4

Big Box

6.6 6.6

Speciality Supermarket

6.1 6.3

Farmer’s market

6.7 6.4

National Supermarket

6.3 6.1

5.8 5.4

National Supermarket Big Box Online Grocers

4.1 4.0 2.8 3.1

5.0

Speciality Supermarket Online Grocers

3.1 3.0

6.2

5.4 5.3

Big Box Online Grocers

3.0 3.1

Source: A.T. Kearney Local Food Survey Results

Big box and national supermarkets continue to struggle with consumer perception of local and fresh food quality and price

many local and national grocery retailers, simply increasing the supply and visibility of local food can begin to turn the tide of consumer perception.

autonomy to store managers to establish direct supply relationships with local and regional farmers and producers.

A retailer increasing local food availability for customers has the added benefit of improving a consumer’s “freshness perception,” which according to our research is the primary purchasing driver for shoppers, even above price. In fact, 30 percent of shoppers do not differentiate between fresh and local.

Direct supply reduces the food miles from farm to store, providing a fresher, higher quality product for the consumer. These direct supply relationships should be in addition to, not a replacement of, the traditional supply chain.

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This correlation between fresh and local is strongest in specific categories – specifically fruits and vegetables, prepared foods, protein and dairy – precisely where retailers should focus increasing local food availability.

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Of course, increasing availability of local food comes with important tradeoffs and considerations related to both supply chain and marketing. Many large national and regional retailers rely on sophisticated supply chains to move international and national perishables and non-perishables to a vast network of stores. These supply chains are well established and cost efficient.

However, those retailers that have had the most success with local and fresh food differentiation (e.g., Wegmans in the northeast), have provided local

Bringing more local food into the retail store will not move the needle with consumers without Continued on p. 62

Mike Goldblatt is a manager with A.T. Kearney’s Strategy, Marketing and Sales practice. He brings nearly 10 years of consulting and industry experience developing customer focused growth strategies and distinctive value propositions across the retail, consumer goods and healthcare industries. Share Group discussion on buying into the local food movement.

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LOC AL FOOD

C O N TI NU E D

But is all of this added expense worth it?

Continued from p. 60

The short answer is, we don’t know yet. What we do know is that consumers are willing to pay more for local, fresh food. Our research has shown that more than 70 percent of Americans are willing to pay a premium for local food – with the highest willingness to pay in California and the west coast.

The base premium increases dramatically for certain categories. For example, respondents to the A.T. Kearney survey indicated a willingness to pay 25 percent more for local produce, protein, dairy and bread compared to conventional products.

We also know that differentiation in the retail grocery business is paramount – particularly with the rise of online and local food innovators. Consumers’ associate retailers providing local food with helping the local economy, offering a healthy alternative and improving overall assortment – all brand enhancers for retailers. [See Figure 3] concerted marketing support. That means dedicated local food floor space, distinctive signage, and comarketing with local suppliers. A more expensive, but distinguishing strategy would be to develop locally branded private label packaging, or co-branded packaging with suppliers.

Targeted supply chain and marketing investments seem to be a small price to pay to increase the top line, build consumer loyalty and maintain a competitive edge. n

Figure 3: Attributes associated with Local Food Retailer by % of Customer 2014 2013 (in % of respondents)

72%

66%% 58% 45%

60% 47%

47% 41%

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21%

62

25% 16% 17% 7%

Helping the local economy

Offering a healthy alternative

Improved assortment

Doing good for the environment

Reducing costs

Offering local food due to peer pressure

Source: A.T. Kearney Local Food Survey

Offering local grocery products helps the retailer to increase its brand image along several dimensions

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IS BIGGER BETTER?

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

BY LEN LE W IS

66 ViktorCap/istock/Thinkstock

IS BIGGER BETTER?

Is Bigger Better?

FOR THE PAST 50 YEARS, BIG BOX RETAILING HAS BEEN CENTER STAGE ON THE NATIONAL AND INTERNATIONAL SCENE – THE STANDARD BY WHICH AN ENTIRE INDUSTRY WAS MEASURED. BUT IS THE SPOTLIGHT TURNING TO THE PROLIFERATING WORLD OF THE “SMALL BOX”?

The big box era is usually traced back to 1962 when Walmart, Kmart and to a lesser extent Target, burst on the retail scene with supercenters which, a decade later, led some retailers to have a brief flirtation with American versions of the European hypermarket concept.

But many retailers, particularly in the last couple of years, have learned that bigger is not necessarily better and the pendulum has swung 180 degrees.

Buoyed by the compelling success of Trader Joe’s and Aldi in the U.S. and the competitive onslaught of online shopping sites like Amazon and burgeoning dollar store competition, an increasing number of retailers are focusing their energies on what some industry experts see as new-age limited assortment stores – a nod to grocery retailing as it once was and a powerful new format for time-starved, convenience-oriented customers in suburban and urban marketing areas.

The need to service customers anywhere has also led to some pretty unconventional locations.

For instance, Both Marks & Spencer and Morrisons, two of the

leading supermarket chains in the United Kingdom are opening travel locations at railway stations. These convenience stores, called “Simply Food” and “Fresh to Go” not only offer the usual commuter fare like coffee, sandwiches and pastries, but also all the ingredients needed for preparing meals so they can catch people on the way home.

“It all comes down to need,” said Craig Rosenblum, partner, Willard Bishop Consulting. “Everyone’s trying to satisfy shopper need states and one of the biggest is convenience. Even Walmart says this is the first year they’re opening more small stores than large ones. Time is the currency that has the most value and everyone is trying to figure out how to get that fill in trip or a couple of extra items in the convenience shop.”

Kelly Tackett, director of research, U.S., for Planet Retail, agreed.

“More and more people simply don’t have the time to trek through big box stores for only two or three fill in items,” she said. “Small boxes can also play very well into the suburban consumer’s desire to pick up online purchases rather than wait for shipping. So these formats are filling several needs.”

On a macro level, some big boxes are at the end of their expansion runway, according to Tackett.

Continued on p. 68

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Despite some unique challenges, there are few retailers that aren’t opening, experimenting or

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

“There’s not a lot of growth opportunities left in many markets,” she said. “One of the most untapped is the small urban format. We’re seeing retailers from Walmart to Whole Foods going into these spaces that have far different real estate metrics.”

67

IS BIGGER BETTER?

C O N TI NU E D

Continued from p. 67

thinking about experimenting with small stores to one extent or another.

Even the house that Walmart built has come under fire in recent years, prompting the Bentonville chain to rethink its commitment to supercenters and focus on stronger growth in small stores.

For instance, over the past four years, small store square footage at Walmart has doubled to more than 16 million square feet and these formats retain a cost and price advantage by being part of the Walmart supply network.

On the down side, analysts have estimated that small store expansion is eroding the company’s return on invested capital.

Nonetheless, the chain, whose U.S. sales have remained flat, or slightly down in the most recent quarters, has upped expansion of its smaller Neighborhood Markets. In fact, the company has reportedly decided to abandon the Walmart Express name and put the 10,000 -15,000 square foot stores under the Neighborhood Market banner.

Despite the failure of its Marketside concept, which was shuttered in 2011, the company is now moving ahead with Walmart Neighborhood stores that are 10,000 -15,000 square-foot full service supermarkets and Walmart on Campus, 2,500 square-foot stores on or near college campuses.

Additionally, the company has opened Walmart To Go, a 5,000 -square-foot c-store near its Bentonville, Ar., headquarters which is something of a small store learning lab. These stores carry about 3,500 SKUs. The company is also exploring the use of supercenters

and regional distribution centers as hubs to replenish stocks in small format stores.

Target is experimenting with the 20,000 squarefoot TargetExpress at the University of Minnesota campus. Selection includes HBC and grocery, with an emphasis on grab-and-go foods, a pharmacy and general merchandise that includes a limited selection of home décor items and electronics. The store is half the size of its CityTarget small format, but is also geared to high traffic and smaller basket sizes.

It is clearly targeting Millennial shoppers, one of the most sought-after demographics, by enhancing the store’s digital environment. This includes a click and collect feature that allows online shoppers to pickup merchandise in the store and Snap, an image recognition app that enables consumers to scan photos of products in the store’s catalog from their smartphones to speed up purchases and checkout.

Kroger is going for a more convenience store-type operation with its Turkey Hill Minit Market. The 7,500 -square-foot store is a full-service supermarket with c-store offerings like pizza and hot dogs.

Whole Foods has opened its first small-format store location in Detroit’s Midtown district, which measures about 21,000 square feet compared with its average 36,000 square feet stores.

In Pittsburgh, Giant Eagle Stores, opened its Market District Express, a 15,500 -square-foot combination restaurant, pharmacy, supermarket combo store.

Across the Northern border, Loblaw, whose Real Canadian superstores control 30 percent of Canada’s grocery market, has transformed Shopper’s Drug Mart. into a general store. In Montreal, Sobey’s is investing $100 million in the IGA Express and IGA Mini formats, which are described as a cross between a supermarket, c-store and fast food outlet.

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

This downsizing of square footage is being adopted by many retailers outside of food for much the same reasons. For example, Best Buy, the electronics retailer whose sales have been severely impacted by online retailers, has closed dozens of large stores and expanded Best Buy Mobile locations which focus on cell phones and other products that don’t require a lot of space.

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Continued on p. 70 Niloo138/iStock Editorial/Thinkstock

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C O N TI NU E D

Continued from p. 68

Ace Hardware is planning to open as many as 400 Ace Express home improvement stores measuring about 5,000 square feet.

Cabela’s , a sporting goods and outdoor apparel chain whose stores can run up to 250,000 square feet, is opening Cabela’s Outpost Stores in Yakima, Wash., and Saginaw, Mich., that are about 40,000 square feet.

Adding yet another dimension to the small box issue, market observers are closely watching the bidding war for Family Dollar stores by both Dollar General and Dollar Tree and the potential impact this $9 billion merger would have on the retail marketplace.

“Dollar store performance over the past several years has really put pressure on some big boxes like Walmart and Target to address this competition,” Tackett said. “There is a real competitive threat in terms of the easy in-and-out shopping experience.

These formats have really found a following among consumers in all income brackets – not just lowincome consumers,” said Tackett.

Dollar stores are also reaching a wider demographic by partnering with large CPG brands.

“Several years ago you wouldn’t have thought about seeing a P&G brand in dollar stores,” Tackett said.

“But these stores have become a viable distribution channel for manufacturers looking for growth, and they have developed shopper-marketing plans with these stores to improve the experience.

But the big issue is that big boxes are running out of runway in terms of growth.

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

“Smaller boxes just make a lot of sense from a variety of perspectives,” she said, noting that they could also be used efficiently as fulfillment centers for online purchases. “Look at the logistics for delivering to smaller stores. With more frequent replenishment it makes sense to use them as fulfillment centers.”

70

However, there are significant challenges to overcome too, Tackett noted, pointing to Walmart’s small formats including the “To Go” in Bentonville and the On Campus prototype.

“They seem to be going with the idea of just packing the supercenter into a smaller box,” she said. “Retailers have to make more customer-centric decisions on how they’re going to stock these stores. I don’t think the

recipe for retailers like Walmart and Target is to try and replicate the dollar store experience.”

Clearly, there is a learning curve when it comes to small boxes, which is why this format is expanding more slowly, said Tackett, noting that a quick rollout was one of the reasons for the failure of Tesco’s Fresh & Easy format. They may have been ahead of their time in things like prepackaged foods, she said, but it didn’t play well for U.S. customers.

“You need to make sure the shelves are completely stocked at all times,” Tackett said. “Retailers like Aldi and Trader Joe’s do this very well.”

Overall, there is simply less room for error with small stores in terms of supply chain.

“You need to make sure the shelves are completely stocked at all times,” Tackett said. “Retailers like Aldi and Trader Joe’s do this very well.”

These stores have something else that also plays into the small store wheelhouse, according to Tackett – strong private label programs.

“Because of the margins, particularly in urban stores, a larger share of private label will be a requirement for small store profitability,” she said.

But as Rosenblum notes, the bottom line will also be dictated by costs.

“We’re starting to see small boxes return 3- 4 percent,” Rosenblum said. “You have to balance size and costs but that depends on where you are in the country. However, the cost of running these boxes is significantly less in terms of people and sales per square foot, so more of them become profitable.”

Even retailers who have successfully run much larger stores have to come to grips with very different small store pro formas.

“You have to understand how many bodies you really need and the amount of shrink that will take place,” he said. “One of the things we learned from Fresh & Easy’s focus on prepackaged products is that the shrink is considerable. They had multiple code dates on the Continued on p. 72

IS BIGGER BETTER?

C O N TI NU E D

Continued from p. 70

shelf at one time which meant they weren’t getting turned and therefore throwing more items out.”

Regardless of location, one truism is that there’s far too much retail square footage available and the ability to repurpose that real estate will be essential. Much of it can be repurposed into “limited assortment” stores, which have managed to redefine themselves, according to Rosenblum.

“It used to mean less assortment and not always the best quality,” he said. “Today these stores cover the gamut of products from Fresh & Easy type stores to high end organics and food service, as well as a broader assortment of perishables.”

Asked if some retailers should steer clear of small store formats, Rosenblum said, “it all comes down to point of difference in the market. No matter what format, if you don’t have a differentiating factor you’re not giving people a reason to shop your store.” n

The latest trends in small format grocery retailing will be discussed during a Share Group session moderated by Kelly Tackett, research director, Planet Retail, at this year’s CGA Strategic Conference.

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.

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C G A S TA F F

HAVE A

QUESTION? The CGA staff is here to serve you.

For more than 100 years, the California Grocers Association has served the needs of grocers and suppliers. Listed below is CGA’s staff and responsibilities. Photocopy this page and keep it as a handy reference. To reach staff, call (916) 448-3545, e-mail, or visit our website: www.cagrocers.com.

RONALD FONG

DOUG SCHOLZ

President and CEO, California Grocer Association President, CGA Educational Foundation rfong@cagrocers.com

Vice President, Business Development & Marketing dscholz@cagrocers.com

KERI ASKEW BAILEY Senior Vice President, Government Relations & Public Policy kbailey@cagrocers.com

Chief Lobbyist, Government Relations Committee Liaison, GROPAC

DAVE HEYLEN Vice President, Communications dheylen@cagrocers.com

Editor, California Grocer, Checkout, News&Review, Website Coordinator, Media Spokesperson

Business Development/Marketing, CGA Strategic Conference, Membership

SHILOH LONDON Executive Director, CGA Educational Foundation slondon@cagrocers.com

hief Development Officer, Industry Education, C Foundation Relations

JEFF SNADOW Executive Vice President/COO, Retail Marketing Services jsnadow@cagrocers.com

Sunny Chang, Manager schang@cagrocers.com

Events and Sponsorship

Marketing & Membership

Brianne Page, Director bpage@cagrocers.com

Dane Hutchings, Manager dhutchings@cagrocers.com

CGA Educational Foundation

State Government Relations

Laura Peralta, Director lperalta@cagrocers.com

Lesley Hall, Manager lhall@cagrocers.com

Local Government Relations: Southern California

Administration, Executive Assistant to President/CEO

Tony Ortega, Manager tortega@cagrocers.com

Robin Coggeshall, Staff Accountant rcoggeshall@cagrocers.com

Sales & Marketing Tim James, Manager tjames@cagrocers.com

Local Government Relations: Northern California

Danielle Whitley, Manager dwhitley@cagrocers.com

Retail Marketing Services

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Beth Wright, Director bwright@cagrocers.com

| 73

MARY KASPER JOE FALVEY Thank you Mary for being a great supporter of The Illuminators and your outstanding Leadership of the CGA. Congratulations and welcome Joe to your Chairmanship of the CGA, 2014-2015.

Check out all upcoming Illuminator Events and Register to become a Member of the most respected and admired Grocery Sales Trade Association in America at www.illuminators.org

Changing of the

Guard The California Grocers Association and staff would like to congratulate Joe Falvey, Unified Grocers, Inc., on being nominated as the 2014-2015 Chair of the CGA Board of Directors. Joe succeeds Mary Kasper, Fresh & Easy, whose term ends in December.

On behalf of the entire Association, we say “thank you� Mary on a job well done. Your guidance and leadership this past year was greatly appreciated. The Association looks forward to working with Joe Falvey this coming year.

Joe Falvey

Mary Kasper

NORTH STATE GROCERY, INC.

Thank you outgoing CGA Chairman,

Mary Kasper

Congratulations new CGA Chairman,

Joe Falvey

Mary—

Your Fresh & Easy family thanks you for your tireless dedication, leadership and service to the California grocery industry. Congratulations on a great year as CGA Chair.

Welcome

to incoming CGA Chair Joe Falvey.

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y Kasper

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Super A Foods congratulates Joe Falvey as incoming CGA Chairman of the Board.

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Thank you for a great year to outgoing Chair Mary Kasper.

Looking to a

bright

future!

Special thanks to outgoing CGA Chair Mary Kasper of Fresh & Easy and a warm welcome to incoming Chairman Joe Falvey of Unified Grocers, Inc. !

™

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

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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.

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

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

California Beer & Beverage Distributors

79

ADVE RTIS E R INDE X C A L I F OR N I A G R OC E R

| 80

PAGE COMPANY

PHONE

FAX

EMAIL

WEBSITE

18

AlEn USA

949-709-2060

949-666-6230

belinda.vanthul@alenusa.com

www.alenamericas.com

35

Alta Dena Certified Dairy, LLC

626-964-6401

626-913-9062

veronica_rendon@deanfoods.com

www.deanfoods.com

43

Anheuser-Busch InBev

909-597-0460

909-597-0460

raul.aguilar@anheuser-busch.com

www.anheuser-busch.com

63

Apio Inc.

805-249-5422

wsnodgrass@apioinc.com

www.apioinc.com

57

Bimbo Bakeries USA

714-459-4772

rhamacher@bbumail.com

www.bimbobakeriesusa.com

IFC,1

Braga Fresh Family Farms

831-678-3835

sales@bragafresh.com

www.bragafresh.com

5,31

C&H Sugar - ASR Group

510-787-4416

510-787-4205

kent.kunsman@asr-group.com

www.chsugar.com

29

C&S Wholesale Grocers, Inc.

916-373-4396

916-373-4296

pmiller@cswg.com

www.cswg.com

79

California Beer & Beverage Distributors

916-441-5402

916-441-0713

25

California Lottery

916-822-8113

www.calottery.com

9 California Shopping Cart Retrieval Corp.

818-563-3070 800-252-4613

818-563-3041

info@cscrc.net

www.cscrc.net

39

Ciuti International

909-484-1414

909-484-1445

john@ciuti-int.com

www.ciuti.com

4,47

Coca-Cola Refreshments

213-746-5555

213-744-8765

mikeanderson@coca-cola.com

www.cokecce.com

79

F. Gavina & Sons, Inc.

323-582-0671

323-581-1127

mike.artukovic@gavina.com

www.gavina.com

77

Fresh & Easy

310-341-1200

310-341-1501

www.freshandeasy.com

48,77

Gelson’s Markets

818-906-5709

818-990-7877

www.gelsons.com

41

Hallmark Cards Inc.

816-274-8445

816-545-2281

robert.kurland@hallmark.com

www.hallmark.com

39

Harris Ranch Beef Company

559-896-3081

559-896-3095

brad.caudill@harrisranch.com

www.harrisranchbeef.com

7

The Hershey Company

717-534-3660

717-534-5297

bcotten@hersheys.com

www.hersheys.com

714-441-3435

www.cbbd.com

74 Illuminators

714-319-0517

wcrocker@bbumail.com

www.illuminators.com

15

Jelly Belly Candy Co.

707-428-2800

707-399-2377

jalden@jellybelly.com

www.jellybelly.com

13

Kellogg Company

269-961-2000

269-660-4518

www.kelloggs.com

55

MaintenX International

813-254-1656

866-834-6154

service@maintenx.com

www.maintenx.com

24

METTLER TOLEDO

614-438-4511

614-438-4900

USRetail@mt.com

www.mt.com/retail

19 MillerCoors

916-771-6428

916-786-9396 stacy.thorsen@millercoors.com www.millercoors.com

17 Nestle Purina PetCare

800-421-1721 x9 314-982-4876

314-982-2860

76

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

530-347-4621

www.shophqf.com

23,65

NuCal Foods

209-254-2200

www.nucalfoods.com

61

Ocean Mist Farms

831-770-6435

korit@oceanmist.com

www.oceanmist.com

64

ON Beverages

949-542-4432

corey.blick@onbeverages.com

www.onbeverages.com

BC

Pepsi Beverages Company - WBU

925-416-2573

925-416-2600

paul.turcotte@pepsico.com

www.pepsi.com

54

Pro Chile

323-932-7200

323-932-7204

us.losangeles@prochile.gob.cl

www.prochile.gob.cl/int/united-states

33

Procter & Gamble

925-867-4900

513-277-7964

www.pg.com

34

Prudential Overall Supply

949-250-4855

949-261-1947

www.prudentialuniforms.com

79 Raley’s

916-373-3333

916-444-3733

www.raleys.com

27

rePLANET, LLC

951-817-3258

951-520-1701

www.replanet.com

10

Safeway Inc.

925-467-3000

925-467-3323

63

Sioux Honey Association

510-888-1511

510-727-9992

72 SkinnyPop

847-982-9800

312-277-2399 info@skinnypop.com

www.skinnypop.com

69

Specialty Food Association

212-482-6440

212-482-6459

www.fancyfoodshows.com

78

Stater Bros. Markets

909-783-5000

909-379-0414

www.staterbros.com

11

Sun Products Corporation

916-288-4692

916-691-2410

john.wagner@sunproductscorp.com

www.sunproductscorp.com

56

Sun-Maid Growers of California

559-897-6311

559-897-6380

rpaumen@sunmaid.com

www.sunmaid.com

78

Super A Foods, Inc.

323-869-0600

323-869-0611

www.superafoods.com

39

Tony’s Fine Foods

916-374-4000

916-372-0727

kberger@tonysfinefoods.com

www.tonysfinefoods.com

IBC

Unified Grocers, Inc.

323-264-5200

323-262-0658

customercare@unifiedgrocers.com

www.unifiedgrocers.com

paul.cooke@purina.nestle.com

209-254-2255

pos@pos-clean.com joe.perez@replanet.com

www.purina.com

www.safeway.com

www.siouxhoney.com info@specialtyfood.com

21 Unilever

714-315-1405

kimberly.stokes@unilever.com www.unilever.com

49

562-497-1012

carole@wafc.com

Western Association of Food Chains

562-497-1053

www.wafc.com

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Ph: 800-724-7762 | unifiedgrocers.com