Grocer2014 issue6

C ALIFORNIA GROCERS A SSOCIATION

2014, ISSUE 6

For the latest industry news visit www.cagrocers.com

Bu ild ing New Cu stom er Con nection s With

IN THIS ISSUE Succession Planning 2014 CGA Strategic Conference Highlights Meet Incoming CGA Chair

Š2012 The Coca-Cola Company.

CGA

| Board of Directors

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS

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

DIRECTORS

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Chairman of the Board Joe Falvey Unified Grocers, Inc.

Second Vice Chair Diana Godfrey Smart & Final Stores

Secretary Bob Parriott Twain Harte Market

First Vice Chair Kevin Konkel Raley’s

Treasurer Jim Wallace Albertsons LLC

Immediate Past Chair Mary Kasper Fresh & Easy

Dave Jones Kellogg Company

Kendra Doyel Ralphs Grocery Company

Kevin Arceneaux Mondelez International Inc.

Raul Aguilar Anheuser-Busch InBev

Dennis Darling Foods Etc.

Lynn Melillo Bristol Farms

Denny Silva Coca-Cola Refreshment

Jon Alden Jelly Belly Candy Co.

Brian Dowling Safeway Inc.

Dan Meyer Stater Bros. Markets

Naresh Solanki Bestway/Gardena Markets

Renee Amen Super A Foods

Jon Giannini Nutricion Fundamental, Inc.

Omar Milbis Rio Ranch Markets

Mimi Song Superior Grocers

Teresa Anaya Northgate Gonzalez Markets

Dick Gong G & G Supermarket, Inc.

Phil Miller C & S Wholesale Grocers

Mike Stamper Nestlé DSD

Joe Angulo El Super (Bodega Latina)

Robin Graf Whole Foods Market

Hee-Sook Nelson Gelson’s Markets

Kim Stokes Unilever

Rich Arnold Oberto Brands

Rickey Hamacher Bimbo Bakeries, USA

Keith Olscamp Campbell Soup Company

Dirk Stump Stump’s Markets

Kelly Augustin United Markets, Inc.

Arthur Jackson, Jr. Costco Wholesale

Denny Belcastro Tyson Foods

Michel LeClerc North State Grocery, Inc.

Chris Podesto Food 4 Less (Stockton)/ Rancho San Miguel Markets

John Swindell Food 4 Less (A division of Kroger)

Jennifer Bosma Harvest Market

Eric Lindberg, Jr. Grocery Outlet, Inc.

Bob Richardson The Clorox Company

Paul Turcotte Pepsi Beverages Company—WBU

Paul Cooke Nestlé Purina PetCare

Dave Madden MillerCoors

Brent Cotten The Hershey Company

Casey McQuaid E & J Gallo Winery

Mike Ridenour Kraft Food Group Casey Rodacker Mar-Val Food Stores, Inc. Dean Ryan Tops Fresh Market

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

CONTENTS

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F E AT U R ES

COLU M NS

2014 CGA Strategic Conference - An “Authentic” Gathering

President’s Message “The Future is Here”.............................................4

This year’s highly successful CGA Strategic Conference mirrored its theme “Authentic Grocery.” Its unique format featured a dynamic educational program along with a record number of pre-scheduled retailer-supplier meetings.

Building New Customer Connections With Authenticity - COVER STORY The near constant competitive challenge of differentiation and standing out from the crowd got an entirely new twist at this year’s CGA Strategic Conference as two highly successful non-grocery retailers shared their unique perspectives on reaching today’s demanding consumers.

An Independent Grocer’s Most Magnificent Deal

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Business succession planning may be a morose subject, but one that must be dealt with due in large part to changing family dynamics and a significantly more complex transfer process.

It’s a Matter of Balance

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| Issue 6

CGA Incoming Chair Joe Falvey believes good business is a matter of balance. He should know. Over his 30 year career he has worked in virtually all segments of the grocery industry. Now he will put his unique perspective to work in 2015 as CGA Chairman of the Board.

From The Chair New Beginnings and Goodbyes..............................6 Viewpoint—Kevin Coupe Retail Rules For Creating A Front Line-Focused Culture....................................8 Capitol Insider Republican Tidal Wave Laps Over Into California............................................ 26 Government Relations New Policymaking Trend Will Require New Thinking—And Advocating......................... 28 Perspective California Becomes Second State to Mandate Paid Sick Leave.................................... 30

DEPA RT M EN TS Know the Law.....................................................12 CGA News..........................................................20 Washington Report...................................... 32, 37 Wealth Management..........................................68 Advertiser Index .................................................72

CALIFORNIA GROCERS ASSOCIATION President/CEO Ronald Fong

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

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

For association members, subscription is included in membership dues.

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

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Executive Vice President, COO Retail Marketing Services Jeff Snadow

Director, Events & Sponsorship Beth Wright

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

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

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

Executive Director, CGA Educational Foundation Shiloh London

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PRESIDENT’S MESSAGE

“The Future Is Here…”

RO N ALD F ONG President/CEO

And they reside by the thousands at seaside, Cal Poly, San Luis Obispo.

How many times have we as an industry lamented about the need to identify and nurture the next generation of Bob Piccininis, Jack Browns and Lou Amens?

Let’s face it, the grocery industry isn’t exactly sexy when compared to Google and Apple, or any other fun-lovin’, perk-rich, hi-tech company.

From a fashion standpoint, it’s kind of like comparing me to our stylish outgoing chair, Mary Kasper, who is writing her last column in this edition.

But good news is on the way. In fact, it’s already here. This year, the CGA Educational Foundation partnered with Cal Poly San Luis Obispo to assist in the creation of curriculum and funding for the first four-year bachelor’s degree with an emphasis in food retail management.

In November, Mary and I visited the San Luis Obispo campus and were even invited to guest lecture the Food Retail Management class. It was an incredible experience. We were fully energized by the engagement, curiosity and brain power of the class. Not only were the students fascinated by the grocery business, they provided valuable insight into the purchasing and marketing habits of the average college consumer.

The food retail management program and curriculum centers around “learn-by-doing” internships at CGA member companies. Our members would be well served by inviting this class of future grocery executives into their stores.

Our industry’s future is out there, it’s up to us to grab them first before somebody else does.

Let’s face it, the grocery industry isn’t exactly sexy when compared to Google and Apple, or any other fun-lovin’, perk-rich, hi-tech company.

The future is also bright at CGA as we welcome our 2015 Chairman, Joe Falvey, and bid farewell to Mary Kasper.

Mary, an accomplished lawyer and grocery veteran, served the Association well by leading us to the passage of SB 270 (single-use plastic bag ban) and completing the historic merger with the California Independent Grocers Association. Fortunately, Mary is not going far. She will serve one more year on the Executive Committee as Immediate Past Chair and will continue to chair the important CGA Government Relations Committee. Bravo Mary!

We can’t thank you enough.

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Lastly, I would like to say thank you to our members for another fantastic year at CGA. May you be safe and surrounded by the love of family and friends during this holiday season. See you next year! n

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FROM THE CHAIR

New Beginnings and Goodbyes

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

Earlier this year, CGA announced its partnership with California Polytechnic State University (Cal Poly) to strengthen California’s future grocery industry workforce. CGA will provide scholarships, internship stipends and professional development to Cal Poly’s Agribusiness Food Retail Management Program.

Ron Fong and I recently toured Cal Poly’s beautiful San Luis Obispo campus with Dr. Jay Noel, the Agribusiness Department Chair. There were over 51,000 applicants this fall, but only

As Dr. Noel noted, “Hiring talented, experienced young people who enter the grocery industry with relevant experience not just in the classroom but in the workplace speeds up the

14,759 were selected for admission, Cal Poly SLO’s most selective class ever.

orientation process, lowers costs for hiring and training, and accelerates productivity.”

The students are elite and could have chosen any university in the U.S. Why Cal Poly San Luis Obispo? Students are drawn to the university’s guiding philosophy: “Learn by Doing.” In addition to a challenging academic curriculum, students weave real-world knowledge and practical training into their student experiences.

The CGA/Cal Poly partnership fits perfectly with this philosophy.

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Cal Poly’s manufacturing facilities, which produce a variety of goods: chocolate, cheese, wine, dairy, meat products and more are impressive. These products are proudly sold in the university’s store and in other retail outlets. Student managers play a very active and important role in keeping these plants running smoothly. At the meat facility, we observed students making sausages. We chuckled over the real life version of the “sausage making machine” we are used to in Sacramento politics!

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The Food Retail Management curriculum is wide-ranging and covers all aspects of our industry: sales and marketing, operations and category management, logistics, supply chain, and customer relations. Our retail and supplier members hold an important key in completing the learning “circle” from manufacturing to shopping basket.

I encourage you to consider internship opportunities for Cal Poly students. They are smart, motivated, and committed to our industry—we would be lucky to have them.

I encourage you to consider internship opportunities for Cal Poly students.

They are smart, motivated, and committed to our industry—we would be lucky to have them.

As my year as CGA’s Chair closes, I want to thank Ron Fong and CGA’s stellar team for a truly memorable and successful term. It has been an honor to support CGA, an organization that is constantly innovating and anticipating the needs of its members. CGA’s strong foundation will continue to drive our association toward even greater success in the future.

With great confidence and my best wishes, I hand over the reins to your new Chair, Joe Falvey.

Joe, we look forward to your leadership! n

VIEWPOINT

Retail Rules For Creating A Front Line-Focused Culture KEV IN C OU P E

I’ve never been a big rules guy. Especially when it comes to retailing.

Sure, rules are important, and discipline is necessary, but you have to be careful that they are not so odious and structured that innovation becomes an organizational casualty.

That said, I’ve been writing about retailing for about 30 years. I’ve had the great opportunity to meet some wonderful retailers—and by this, I mean wonderful people who happen to be retailers—over the years. So I think I know a little something about the subject.

Which is why I thought writing a book of retail rules made sense. So I did: Retail Rules! 52 Ways To Achieve Retail Success. (At this juncture, I think my publisher would appreciate it if I mentioned that it is available now on Amazon, and makes a wonderful holiday gift.)

Retailing is a tough enough journey, and they keep changing the road map, making it difficult if not impossible to know what the next right move is. (Though some folks would settle simply for not making a next disastrous move.) And I think it is important to create a culture in which, though there are rules and guidelines and disciplines, there also is a sense that the people within the organization are invested in its success (and, by extension, their own).

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For example … there’s rule # 45…

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I spend a lot of time in Portland, Ore., and one of the great pleasures of being there is going to Stumptown Coffee Roasters. It’s a wonderful local coffee shop where on weekends you can wait 15 to 20 minutes to make your way to the counter, but the coffee is terrific, the ambience is authentic downtown Portland, and the peoplewatching can be rewarding.

On one recent visit, I ordered my usual—a large nonfat latte. I grabbed a seat at the counter, pulled out my iPad, and started going through my e-mail. I kept one eye on the barista and noticed when he seemed to start making what

was going to be my latte. A couple of e-mails later, I realized that I had not gotten my coffee, so I took another look… and he seemed to be starting the process all over again. I didn’t think too much of it, and went back to my e-mails.

Then I noticed when he was done, he took a look, dumped it out, and started over yet again, this time calling over someone to help him.

The third time was the charm, and when he handed me the latte, I couldn’t help myself: “I’m just curious. What was wrong with the first two?”

Bo, the fellow who helped, came over and explained that the barista was only several weeks into training and wasn’t certified yet. Bo also said that a large nonfat latte was one of the hardest drinks to make—skim milk doesn’t hold together the way whole milk, or 1 or 2 percent milk does.

When they get to the end and they’re ready to put a design into the foam and it isn’t holding together right, they dump it and start over.

Who knew? Then I asked: “If I’d been getting this to go, and you were putting a top on the cup, would you have gone to all this trouble to make sure the squiggle was right?”

Sometimes we can see the stuff that matters, and sometimes we can’t. But it all matters. Even the little stuff.

Bo grinned. “It’s not worth doing if we can’t do it right,” he said.

Exactly the right answer. It is just that kind of dedication to excellence that every retailer should be seeking in its employees.

Sometimes we can see the stuff that matters, and sometimes we can’t. But it all matters. Even the little stuff.

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VIEWPOINT

Continued from p. 8

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And by the way…Bo now does retail training for Stumptown. The culture is working, and the word is spreading. How you connect with and invest in your employees matters, and it begins on their very first day.

Not during the first week, or month. On Day 1, because you never can get that day back.

Which leads me to rule # 51…

You just hired a new employee on the front lines.

They’re working the checkout lanes, or stocking shelves, or unloading trucks. Maybe all of the above.

First of all, remember that this employee is among the most important people in your company because he or she represents you to your customers.

When the new employee shows up for work the first day, you’d better have someone there as a mentor to begin immersing him or her in the culture of the company and to make sure the employee has something to do and feels productive.

Here are a few things to do on the first day to make a new employee feel like part of the team: n

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Issue every new retail employee a stack of business cards with his or her name on them; Give the new employee a company e-mail address to which all relevant internal communications will be sent;

Make sure the employee has lunch with a supervisor, or the store manager along with other employees.

I know a number of young people who have gotten retail jobs, and their first day proved to be a disappointment. In most cases, things got better, but some of them decided against a career in retail based on that bad first day. A tremendous opportunity has been lost when that first shift goes by and management hasn’t gone out of its way to make it a positive experience.

In a competitive marketplace where everybody wants a piece of your action, there is neither an excuse nor a rationale for not being the best employer, whatever that means within your pecific circumstances.

If you don’t make the first day important, you send the message that the employee and job are not important.

And they are, because that employee could end up being the best hire you ever made. Great hires make business sense—Kip Tindell, chairman of The Container Store, argues that “one great person can easily do the business productivity of three good people.”

The message ought to be: “You are critical to the success of this retail enterprise, and we want you to feel that in your bones.”

If I were to ask who was your best boss ever, it is a pretty good bet that you’d be able to come up with a name, a company and, perhaps most importantly, a reason why, in about 15 seconds. And it is an even better bet that if I asked you to name the worst employer you ever had, it would take half as long to come up with a name. If that long.

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In a competitive marketplace where everybody wants a piece of your action, there is neither an excuse nor a rationale for not being the best employer, whatever that means within your specific circumstances.

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If you’re the best employer, you’re doing it right. And it’s not worth doing if we don’t do it right. n

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Congratulations to Joe Falvey, incoming CGA Chairman of the Board!

Joe Falvey is Senior Vice President for Unified Grocers and President of Market Centre.

We know you’ll do as great a job for CGA as you do for Unified.

We’re proud to have you on our team!

Ph: 800-724-7762 | unifiedgrocers.com

KN O W T HE L AW

Protecting Against Security Breaches OVER THE LAST COUPLE OF YEARS, SECURITY BREACHES HAVE BECOME A MAJOR CONCERN OF BOTH CONSUMERS AND RETAILERS. Since 2013, there have been numerous reports of high profile security breaches of retailers, including Target (affecting up to 70 million individuals), Home Depot (with approximately 56 million payment cards being affected), Neiman Marcus (with up to 1 million payment cards potentially being affected), Michaels (affecting around 2 .6 million payment cards), P.F. Chang’s, and more; and, the rate of the breaches is accelerating.

On October 28, 2014, Attorney General Kamala Harris released the second annual California Data Breach Report, in which she raises the alarm about the jump in the number of security breaches over the last few years.

In the report, she notes that 18.5 million people in California were involved in breaches reported last year, which is more than a 600 percent jump from 2012 (though a large part of those figures comes from the Target and LivingSocial security breaches which affected about 7.5 million Californians each), and that 84 percent of retail industry breaches were the result of malware and hacking.

This issue is not going away. In fact, security experts predict that the number of breaches, especially on a big scale, will keep growing. However, there are ways for retailers to protect against security breaches, many of which are outlined in the California Data Breach Report.

For instance, the report recommends that retailers should:

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Promptly update their point-of-sale terminals so that they are chip-enabled; and install the software needed to operate this technology; Implement appropriate encryption solutions to devalue payment card data, including encrypting the data from the point of capture until completion of transaction authorization; Implement appropriate tokenization solutions to devalue payment card data, including in online and mobile transactions;

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Respond promptly to data breaches and notify affected individuals in the most expedient time possible, without unreasonable delay; and

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Improve substitute notices regarding payment card data breaches.

However, not all of these solutions are immediately available, or under the control of retailers. As noted in a recent article by Shan Li and Andrew Khouri in the Los Angeles Times, the process of implementing chipenabled point-of-sale systems and technologies will take some time in the U.S.

Therefore, to better protect yourself and your customers, you need to remain vigilant and implement a properly structured privacy and data security program.

Some large retailers like Target and Home Depot have committed to adopting the EMV system (the chip enabled system named for its developers Europay, MasterCard and Visa), but the U.S. has fallen behind other parts of the world. Furthermore, retailers generally do not control all of the parts that go into devaluing and protecting payment card data, since many parts are controlled by third parties.

Therefore, to better protect yourself and your customers, you need to remain vigilant and implement a properly structured privacy and data security program. Some recommendations include: n

Have a Leader. Designate a privacy officer who will champion and be in charge of your company’s privacy and data security program.

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Define and Support your Program. Clearly define the privacy officer’s roles and responsibilities, all other supporting roles and responsibilities, and the goals and expectations of the program. Make sure your privacy officer and the program are fully supported by the organization.

Continued on p. 14

BIMBO BAKERIES USA

THANKS MARY KASPER, OUTGOING CGA CHAIRMAN OF THE BOARD,

& WELCOMES JOE FALVEY, THE INCOMING CHAIR OF THE BOARD. BimboBakeriesUSA.com

©2013 Bimbo Bakeries USA, Inc. All rights reserved.

K N O W T H E L AW

Continued from p. 12 n

Assess: ■

Inventory. Inventory your computer systems and data collection practices to determine what equipment and systems are used, what information you collect and store, how and where it is stored and used (including marketing and storage procedures), and what third parties are involved. Implement and verify system logging to track and identify system issues.

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Improve: ■

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Know your Obligations. Learn and understand industry best practices and standards, and applicable regulations and laws—such as the California Online Privacy Protection Act (requiring a posted privacy policy that meets certain requirements), California’s data security breach notification law (requiring notification when a person’s unencrypted personal information may have been acquired by an unauthorized person), and the California Supermarket Club Card Disclosure Act (prohibiting the disclosure of rewards card customer information except for purposes of mailing card information to reward card members).

Find Vulnerabilities. Verify whether all equipment and software are current (with all necessary software updates and patches installed), compliant with applicable standards (such as the Data Security Standards of the Payment Card Industry Security Council), and that they are properly configured, encrypted, and secured. Audit all of your user accounts to make sure no account has unneeded permissions, there are no dormant or unused accounts that should be deleted, and that all passwords are strong.

Test on your systems, including third party audits and assessments (like SSAE 16) to assess the integrity of your systems.

It is important to also consult and rely on experts where you and your organization need assistance and expertise.

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Address Vulnerabilities. Analyze your inventory and vulnerability assessments to identify your vulnerabilities and address them.

Policies. Develop and publish policies and procedures regarding your privacy and data security program, as well as any privacy policies and terms of use for your customers that use your sites.

Train. Routinely train your employees and contractors on your policies and procedures and best practices. Follow up on the training to make sure it is properly implemented.

Limit Risk. Only use, collect and store data that you need. Have a data retention and destruction policy in place to ensure data is only stored as long as needed and properly destroyed. Ensure that all data is stored at properly secured locations in the U.S. (including any data collected and stored by third parties).

Require Compliance. Require in any agreements with vendors and contractors that they: ●

Represent and warrant that their systems (a) are developed and tested according to proper standards (including penetration testing and other necessary testing); (b) implement proper encryption and tokenization, and other security procedures; and (c) are compliant with applicable standards, laws and regulations;

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Agree (a) to strong confidentiality provisions; (b) that you own your data; and (c) that they will not disclose, share, or sell any data without your express written consent (and, if they do, the data will be properly aggregated and anonymized and they agree to be liable for any disclosure or use in violation of your agreement with them or applicable law); and

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Agree to provide you with routine SSAE 16 and any other applicable assessments or audits (as well as the disclosures and attestations of any of their subcontractors).

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Control. Remember that this is a continuous (not a one-time) process; and, your program should be structured to continually repeat and improve these steps to help control the quality.

Also, remember that these steps will help, but not totally protect from all breaches. It is also important to make sure to get proper protections in case of a breach, such as: n

Have a response program in place to (a) quickly notify affected individuals of any breaches; and (b) address the breaches.

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Verify that you have adequate cyber risk insurance coverage.

In your agreements with vendors and contractors, (a) include indemnification provisions to cover breaches; (b) ensure that their liability for indemnification, confidentiality breaches, and security breaches are not capped; and (c) include requirements that they maintain adequate cyber risk insurance.

Lastly, this is simply an overview of some suggested tips and suggestions to help improve your privacy and data security program. It is important to also consult and rely on experts where you and your organization need assistance and expertise. n Steve Hymas is an attorney in the Corporate, Real Estate, Securities, and Tax practice group at Downey Brand LLP. He is a former software engineer, and he routinely represents clients in business and technology transactions, privacy and data security issues, intellectual property matters, mergers and acquisitions, and other general corporate and securities matters.

Legal and Regulatory Counsel to Retail Grocers and Suppliers in California and Nevada Business Contracts • Business and Real Estate Litigation • Proposition 65 Hazardous Waste Handling and Environmental Compliance • Food Safety • Store Trespassing Employment • Worker Retention Ordinance Compliance • Data Security and Protection • Proposition 2 Advertising Claims • WIC, SNAP and ABC Compliance • Corporate/Tax • Mergers and Acquisitions Retail Industry Practice Group Primary Contact: Dale A. Stern*

* 25 years as CGA’s outside general counsel

advancing your interests

downeybrand.com

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Sacramento I Stockton I San Francisco I Reno

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

Leila C. Bruderer • Joseph G. De Angelis James K. Dyer, Jr. • Steven B. Hymas, II John C. McCarron • Stan O. Van Vleck

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GUEST EDITORIAL

M I K E HALLE R

Advice on Donating Food from a County Health Inspector and Former Grocery Manager My first job in high school was as a dairy-delifrozen food stocker in a large independent supermarket. I spent the next eight years in the grocery industry, balancing school and work, eventually becoming a store manager.

I then became a health inspector and have spent the last 22 years with Orange County Environmental Health. As program manager for the Food Safety Program, I’m responsible for overseeing the inspections of nearly 15,000 food facilities, including grocery stores, in Orange County.

In my career I have seen a lot of wholesome and edible food discarded. Sometimes it was due to product over ordering. Other times the product received was short-coded, or was not properly rotated. In either case, if the product was not successfully moved and sold by marking it down, it was discarded into the dumpster, and ultimately the landfill.

It came to my attention through a survey conducted at our food facilities that the single most common reason why food was discarded and not donated was that the food facility believed the donations were against health department laws.

Nothing could be further from the truth.

There are laws that release liability from the donor as long as the food remains wholesome and edible.

Our role as the local health department is to educate—to remove the doubt before you throw it out. The survey results indicated there was a lot more to be done on our

part to get the word out and educate the food industry that donating food is acceptable.

That’s why in 2012, our food safety program became an integral member of Waste Not OC, a coalition founded by Orange County’s Public Health Officer, Dr. Eric Handler and various food banks committed to ending food hunger and insecurity within Orange County. The coalition has grown over the years and is now comprised of various non-profit groups, educational institutions, the private food industry and of course, the health department.

We believe our involvement with Waste Not OC runs congruent to our program’s belief that diverting wholesome food away from the dumpster and to the plates of individuals in need is a good thing both for the individuals in need and for the environment. The food operators I have spoken to have also realized the benefit of reduced waste hauling charges as their dumpster volume has been reduced.

Another misconception that I have experienced is whether it is safe to donate or use “expired food”. The answer to the question of whether expired food is safe to donate is simple; except for expired baby formula and baby food, the arbitrary expiration date stamped on a product by the manufacturer does not determine the “safety” of a food product. These dates guarantee the look or consistency of the product, not its safety.

Don’t judge the food safety of the product by its expiration date alone.

So, take a look in your dumpsters and see what foods are being thrown away. Can all food be salvaged? No, food that is opened or served to the public must be discarded due to food safety concerns. However, if you have any doubt whether a food product can be safely

Continued on p. 18 iStock/Thinkstock

GUEST EDITORIAL

Continued from p. 16

donated, contact your local environmental health food safety program.

The Orange County Food Safety Program is an unbiased educational resource and in the business of preventing people from becoming ill. We won’t encourage donating food where food safety is in doubt, especially

to our more vulnerable populations, such as children and the elderly.

Education is the key to food safety while rescuing edible, wholesome leftover foods. If we can do that and also do our part to end food hunger and insecurity not only in Orange County, but all of California, that is a true “win-win” scenario.

My staff and I can provide assistance in reaching your local jurisdictions. You can reach me by calling (714) 433-6000 or by visiting our webpage at www.ocfoodinfo.com. I also encourage you to visit the truly unique alliance we have created through the Waste Not OC coalition at www.wastenotoc.org, where you can learn more about the coalition and how to become part of the team or creating your own coalition within your local jurisdiction.

It is easy, rewarding and where you can truly make a difference! n

iStock/Thinkstock

Congratulations to incoming CGA Chair Joe Falvey of Unified Grocers, Inc. And a special thank you to outgoing Chair Mary Kasper of Fresh & Easy. Your dedication and hard work is

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greatly appreciated.

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your

MONDELEZ INTERNATIONAL CONGRATULATES

JOE FALVEY CHAIRMAN OF THE BOARD OF THE CALIFORNIA GROCERS ASSOCIATION

Joe Falvey, Senior Vice President at Unified Grocers, Inc. and President of Market Centre, tirelessly works to promote and protect the interests of the retail food industry throughout California.

MondeleÂŻz International wants to wish Joe congratulations on this sweet moment of recognition and his new well-earned title.

Way to go, Joe!

C GA N EWS

CGA Elects 2015 Board of Directors

2015 CGA Chair Joe Falvey

Joe Falvey, senior vice president and President, Market Centre Inc., for Unified Grocers, Inc., was elected the 2014 -2015 California Grocers Association Chairman of the Board of Directors at the Association’s Annual Meeting on Dec. 5, 2014.

As Chair, Falvey will oversee CGA’s numerous legislative, educational, communications and industry-related programs. The Association is comprised of more than 300 retail companies operating more than 6,000 stores in California and Nevada. The chair serves for one year.

In addition to Falvey, the following individuals were elected to the 2014 -2015 CGA Board of Directors Executive Committee: First Vice Chair, Kevin Konkel, Raley’s; Second Vice Chair, Diana Godfrey, Smart & Final Stores; Treasurer, Jim Wallace, Albertsons LLC;

Acclaim Sales & Marketing congratulates Joe Falvey

on being elected

California Grocers Association Chairman of the Board

Secretary, Bob Parriott, Twain Harte Market; and Immediate Past Chair, Mary Kasper, Fresh & Easy.

Chairman’s appointments to the Executive Committee include: Dave Jones, Kellogg Company; Kendra Doyel, Ralphs Grocery Company; and Kevin Arceneaux, Mondelez International Inc. Directors elected to their first full three-year term include: Rich Arnold, Oberto Brands; Art Jackson, Costco Wholesale; Lynn Melillo, Bristol Farms; and Denny Silva, Coca-Cola Refreshments.

Directors elected to their second three-year term include: Brent Cotten, The Hershey Company; Casey McQuaid, E. & J. Gallo Winery; Dan Meyer, Stater Bros. Markets; Phil Miller, C&S Wholesale Grocers; and Mike Stamper, Nestle, DSD. Former CGA Chair Kevin Davis, Bristol Farms, was elected an honorary board member.

Congratulations to my friend, Mary Kasper, for a most successful and fruitful year in office as Madame Chairman!

RONALD P. SLATES, PROFESSIONAL CORPORATION Aggressive and Effective Commercial Collections, Creditors’ Rights, Business and Real Estate Lawyers

Ronald P. Slates

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

Attorney at Law

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(213) 624-1515 • Fax (213) 624-7536 523 W. 6th Street, Suite 502 • Los Angeles, CA 90014-1225 E-mail: rslates2@rslateslaw.com www.rslateslaw.com www.ronslateslaw.com

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Take part in customized meetings with manufacturers through our Key Buyer Program. Contact lwerner@specialtyfood.com for details.

C GA N EWS

CGA Constructs Capitol of Cans The California State Capitol had a new addition this past holiday season—a 5,800 pound can replica of the iconic building.

The reproduction was the creation of Canstruction— a national charity that showcases colossal structures made entirely of full cans of food. It will be on display near the Capitol’s East entrance through December, after which the cans of food will be donated to local charities.

Originally created for the CGA Strategic Conference this past September, the Capitol replica was disassembled, shipped to Sacramento and reconstructed by CGA staff on Nov. 7.

Food cans for the project were donated by Chicken of the Sea, Juanita’s Foods and Unified Grocers, Inc.

“This was a terrific opportunity for CGA to showcase the fantastic work our industry does in helping the less fortunate,” said CGA President Ron Fong.

“Thank you to those companies donating product.”

Consumers Want Healthy Choices, SEC Told When it comes to health and wellness, consumers want to do the right thing, but on their terms, Lynn Dornblaser, director of innovation & insight at the Mintel Group, shared with CGA Supplier Executive Council members in early December.

Shoppers are becoming increasingly skeptical and seek proof and assurance that product claims are accurate, Dornblaser told attendees. They want to be

the expert—controlling and monitoring themselves and others—and seek easy to understand products they can feel good about.

Her presentation, “Trends in Wellness: Chasing Healthful Choices,” drew from data and insight from Mintel, a leading worldwide market research firm.

The presentation was held in conjunction with the December CGA Board of Directors meeting.

SEC Tours Grocery Outlet

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

The CGA Supplier Executive Council completed its 2014 Store Tour series with an executive-led tour of the Grocery Outlet location in South San Francisco, Calif.

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Attendees learned first-hand from Grocery Outlet Co-CEO Eric Lindberg who shared insights on the company’s unique business and operations strategy. Other store tours in 2014 included Food 4 Less (Stockton), Gelson’s Markets and Ralphs Grocery Company.

CONGRATULATIONS AND WELCOME

JOE FALVEY

©2014 MILLERCOORS LLC, CHICAGO, ILLINOIS

C GA N EWS

New Members CGA WELCOMES THE FOLLOWING MEMBERS. RETAILERS:

Tri-County Produce Co., Inc. 335 S Milpas St Santa Barbara, CA 93103-3657 Contact: John Dixon, General Manager E-mail: john@tcpsb.com Tel: (805) 965- 4558 Website: www.tricountyproduce.com

Whole Foods Market Northern California & Reno Region 5980 Horton St Ste 200 Emeryville, CA 94608 -2057 Contact: Rob Twyman, Regional President Tel: (510) 428 -7400 Website: www.wholefoods.com

Beverages & More, Inc. 1401 Willow Pass Rd Concord, CA 94520 -7968 Contact: Sasha Pesic, SVP General Counsel E-mail: pesics@bevmo.com Tel: (925) 609 - 6000 Website: www.bevmo.com

SUPPLIERS:

Mettler Packaging 31 Liberty St Ste 210 Southington, CT 06489 -3114 Contact: Cliff Fenter, National Sales Executive E-mail: cliff.fenter@papier-mettler.com Tel: (951) 677-8140 Website: www.papier-mettler.com

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

National Pasteurized Eggs 2963 Bernice Rd Lansing, IL 60438 -1285 Contact: Michael Smith, CFO E-mail: msmith@safeeggs.com Tel: (708) 418 -8500 Website: www.safeeggs.com

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Ducarto Systems Ltd., Inc. 12825 Monterey Hwy Monterey, TN 38574 -3223 Contact: Marion H Settle Jr., New Business Development E-mail: marion@ducarto.com Tel: (501) 269 -9969

Unox Inc. 105 Terry Dr Ste 119 Newtown, PA 18940 -1872 Contact: Michael Conway, President E-mail: mike.conway@unox.com Tel: (215) 525-1500 Website: www.unox.com SkinnyPop Popcorn 3728 S Seton Ave Gilbert, AZ 85297-9355 Contact: Mark Poirier, Regional Vice President E-mail: mpoirier@skinnypop.com Tel: (480) 622-5618 Website: www.skinnypop.com

The right selection.

The right price.

With C&S Wholesale Grocers you are Selecting the Best in Service and

Value!

• Extensive Line of Ethnic & Specialty Products

• Largest Variety of Fresh Produce & Perishables

• Hispanic Truck Load Meetings

• Name Brand Quality Private Label Products

• Natural and Organic Item Selection

• Simple and Transparent Sell Plans

• Margin Enhancing Marketing Programs

• Commitment to Exceptional Service and Value

Congratulations!

Joe Falvey of Unified Grocers, Inc. on being elected

Chair of the Board for the California Grocers Association Eric Pearlman, Director Independent Sales WC

1.916.373.4286

www.cswg.com

CAPITOL INSIDER

Republican Tidal Wave Laps Over Into California In November 1994, Republicans orchestrated a tidal wave of change that eventually crashed at the Nevada/California border. Twenty years later, the Republicans did it again, as they won enough legislative seats to control both houses of Congress and won a number of gubernatorial races around the country.

However, unlike 1994, the tidal wave of red actually made its way into California resulting in some unanticipated political drama during and following election night.

registered Democrats outnumber Republicans by a substantial number. However, the Congressman walked away with an easy win, garnering nearly 60 percent of the vote.

For instance, several of California’s noncompetitive congressional districts actually caught the attention of state and national analysts. In San Diego, Democratic incumbent Scott Peters (52nd Congressional District) eventually prevailed in a tight race against Republican candidate Carl DeMaio. In a race still too close to call, Democrat incumbent Julia Brownley (26th Congressional District) is slightly ahead of Republican challenger and former Assembly Member Jeff Gorell.

This year’s focus for California’s legislative races was the Democrat supermajority. Would they or would they not retain this status? The supermajority gives Democrats the ability to veto override the Governor and pass urgency and tax measures without a Republican vote. Although, the ability to get all members of the Democratic caucus on the same page for these issues would be a herculean effort, the status is an honor the party did not want to lose.

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Republican Doug Ose was ahead of Democrat Incumbent Ami Bera (7th Congressional District) on election night and Bera has failed to show much improvement in the count of late absentees and provisionals.

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Possibly the biggest surprise of the night was in the 16th Congressional District, where Democrat incumbent Jim Costa was behind by just 800 votes to political newcomer Johnny Tacherra (Republican). Congressman Costa represents portions of Fresno, Madera and Merced counties. He never has an easy election but also never trails on election night. In his statement the next day, he remained confident but did refer to the historic low voter turnout. This race will likely not be decided for a couple weeks.

Something just as interesting as the close congressional races, is a race that wasn’t close at all. Political analysts anticipated a close contest for Freshman Republican Congressman David Valadao in the 21st Congressional District where

This year’s focus for California’s legislative races was the Democrat supermajority. Would they or would they not retain this status?

In the State Senate, the supermajority came down to two seats, the 14th and 34th Senate Districts. Republican Incumbent Andy Vidak was up for reelection in the 14th. He was voted into office during a special election following the resignation of Sen. Michael Rubio (Democrat).

The Democratic registration is 20 points higher than the Republican Party, but since this is the Southern San Joaquin Valley the seat is always competitive. Ten days prior to the election, Republicans were nervous because polling data predicted the race trending against Vidak. In the end, the senator prevailed with just over 55 percent of the vote.

CAPITOL INSIDER

iStock/Thinkstock

The real barn burner was the race for the open seat in the 34th Senate District representing Orange County. Senator Lou Correa (Democrat) was forced out due to term limits and redistricting made the district more competitive.

The Democrats recruited former Assembly Member Jose Solorio as their candidate and the Republicans recruited Orange County Supervisor Janet Nguyen.

Over $5 million was raised by the candidates and additional dollars poured in from outside independent expenditure campaigns. Unfortunately for those looking for drama, this race was over early. Nguyen began the evening with an early lead that only increased throughout the night. She captured the seat with 59.2 percent of the vote and kept the Democrats from retaining the supermajority.

With all 80 Assembly seats up for election, the fight for supermajority came down to just a few. The battle for the 32nd and 65th Assembly Districts started the day after the 2012 election. These districts were traditionally held by Republicans, but were lost in 2012.

Steve Fox (Democrat) won the 32nd two years ago by a mere 147 votes.

Two of the most talked about races prior and during the election were the 16th and 66th Assembly Districts.

In the 16th, Republican Catharine Baker prevailed over Democrat Tim Sbranti to become the first Republican legislator to represent the East Bay since Guy Houston. In the 66th, Republican candidate David Hadley unseated incumbent Al Muratsuchi by less than 3,000 votes.

Analysts anticipated the races to be close, but most did not see the races resulting in a republican victory.

Although the tidal wave of red did successfully crash in California, the real test for the California Republican Party will be to retain their gains in the next election.

Many will write off the success of 2014 on a low voter turnout, national momentum, or money spent by special interests. This can all be put to rest if the Republicans continue what they started in 2014 by recruiting diverse candidates representative of the district, staying on message and strategically picking their battles. n

D I D YO U K N OW...

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Did you know that all of the CGA Educational Foundation webinars are archived including December’s webinar entitled “New Laws for 2015?” To access the archive, go to www.cgaef.org.

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

Sharon Quirk-Silva (Democrat) unseated incumbent Chris Norby (Republican) in the 65th in the race no one saw coming. Republicans made regaining these two seats a top priority and fielded candidates that provided the best opportunity to make it happen.

Former CHP officer, Tom Lackey was recruited in the 32nd and Young Kim was recruited in the 65th. Both

candidates proved their worth as they pulled through with easy wins on election night.

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

New Policymaking Trend Will Require New Thinking—And Advocating KERI ASKEW BAILEY Senior Vice President of Government Relations and Public Policy for the California Grocers Association

A famous quote widely attributed to Otto von Bismarck reads: “Laws are like sausages, it is better not to see them being made.”

I prefer to see it not as sausage making, but rather as a chess game—elegantly moving pieces around a board, always looking ahead in an effort to outwit your opponent(s). It requires always seeing the bigger picture while keeping an eye on

After successful local outings in San Francisco in 2003 and San Jose in 2012, labor activists were able to push through a state increase in 2013 that will bring California’s minimum wage to $10 per hour next year.

even the smallest pieces to keep advancing.

A recent trend, revealed in efforts to push an agenda that is progressive even against the backdrop of “California Blue,” just may be turning public policy chess into a decidedly three-dimensional game.

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And if CGA wants to keep up, it must adjust.

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CGA once had the luxury of running essentially parallel government relations programs—one focused exclusively on local government activities and the other on state issues.

Over the past several years, policymaking appears to have largely evolved from a game played on a single plane—albeit a potentially wide one—to one that simultaneously plays out on the state and local level, and sometimes even nationally as well.

But that wasn’t enough for many activists seeking to make California the first state to fall in the “Fight for $15.” In 2014, they pushed legislation that would have raised the minimum wage further to $13 in 2017 with automatic annual increases in perpetuity thereafter.

As one of the only statewide trade associations with a full-time local government lobbying presence, CGA has always effectively functioned in the State Capitol and in local city halls and board of supervisors chambers up and down California. But only recently have we needed to do so in such a fluid way.

Not to be deterred, activists took the fight local again pushing through increases via voter initiative in San Francisco (which will hit $15 per hour in 2018) and via council approval in Richmond, Berkeley, and San Diego with Los Angeles also looking into the issue.

Battles over at least a half dozen issues including tobacco regulation, single-use carryout bags, minimum wage increases, taxes on sugarsweetened beverages, GMO labeling, and regulation of pharmacy practices were waged both in Sacramento and in local jurisdictions this year. Some came in succession, while others were before state and local policymakers simultaneously. And looking into 2015 and beyond, it is easy to think the trend will expand before it dissipates.

Take minimum wage—an issue that largely has its roots locally, moved to Sacramento, and then headed back to city hall and onto local ballots.

Other clear examples are GMO labeling and taxation of sugar sweetened beverages (SSBs).

Activists have pursued labeling mandated for products containing GMO ingredients aggressively at three levels in the past two years—in the Legislature, in city halls, and even as a statewide voter initiative. Largely unsuccessful here in California, they moved to other States to create national pressure on the industry to acquiesce.

It appears a similar strategy is rolling out relative to taxation of sugar-sweetened beverages—and advocates recently scored a victory. After two failed local ballot measures and several defeated state bills, advocates tested two models of taxation

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

on the November 2014 ballot in two of California’s most liberal jurisdictions—Berkeley and San Francisco.

While defeated in San Francisco, which required a twothirds voter approval based on the initiative’s drafting, they won the vote in Berkeley. It remains to be seen what the next step will be, but it is hard to believe advocates will be anything but emboldened toward additional state and local pushes.

Looking at issues we anticipate to be on the docket in 2015, the most significant appear to be headed for the same dual track.

Mandating take-back of unused or expired pharmaceuticals has long been on the agenda for many environmental organizations, but they were unable to garner the support needed for a state regulation.

Instead, they worked in Alameda County to craft a local ordinance requiring drug manufacturers to finance a take-back program.

The ordinance recently survived a court challenge and it is expected the model will pop up when lawmakers return for the new session. Other issues relating to tobacco retailing also appear headed from the local arena to Sacramento. With two localities banning the sale of tobacco at many pharmacies, and another two raising the legal sales age to 21, advocates will take a hard look at those policies and attempt to expand them in some form statewide.

CGA once had the luxury of running essentially parallel government relations programs—one focused exclusively on local government activities and the other on state issues. It is apparent we will need to adapt to survive. Vertical integration is no longer something we can apply only to sales channels, or supply chains.

We must begin to incorporate it as a strategy in our government relations activities to ensure we deliver a consistent message across levels of government. n

CONGRATULATIONS TO JOE FALVEY

the new cga chairman of the board

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©2014 Domino Foods, Inc.

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

and, thank you mary kasper, for your tenure as cga chair.

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PERSPECTIVE

California Becomes Second State to Mandate Paid Sick Leave C HRI S M IC HE LI Legislative Advocate Aprea & Micheli, Inc.

California became just the second state in the nation to mandate employers provide paid sick leave to employees. A new bill imposes this mandate upon businesses by requiring both small and large employers to provide mandatory, protected, paid sick leave to their employees.

Assembly Bill 1522, authored by Assemblywoman Lorena Gonzalez (D-San Diego), enacted the “Healthy Workplaces,

upon termination, resignation, retirement, or other separation from employment.

Healthy Families Act of 2014” and provides that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for certain prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked. The rate of paid sick leave shall be the employee’s hourly wage. Exempt employees are deemed to work 40 hours per week.

hours or 6 days. An employer must provide an employee with written notice of available sick time on either the employee’s itemized wage statement or in a separate writing with the payment of wages.

The purpose of the paid sick leave mandate is for the employee to care for himself or herself, or for the employee to care for a sick family member.

The employer must provide the paid sick days, upon the oral or written request of an employee, primarily for care or treatment of an existing health condition or preventive care, but also for victims of domestic violence or sexual assault.

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An employer cannot require the employee to search for or find a replacement worker to cover the days during which the employee uses the paid sick leave. And an employer cannot deny an employee the right to use accrued sick days, or to take retaliatory action. The new law does allow existing employer policies that meet or exceed the new mandate to remain in place.

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The allowance of any unused sick leave accrued in the preceding year to be carried over to the next year is a significant change in existing law.

However, no accrual or carryover is required if the full amount of leave is received at the beginning of each year, and an employer is not required to provide compensation to an employee for accrued, unused paid sick days

An employer may cap total accrual at 48

The purpose of the paid sick leave mandate is for the employee to care for himself or herself, or for the employee to care for a sick family member.

The law provides that an employee “may determine how much paid sick leave he or she needs to use,” although the employer may set a reasonable minimum increment (not more than 2 hours).” There is also a notice requirement in that an employee shall provide “reasonable advance notification” if the need for sick leave is foreseeable. If the need is unforeseeable, then the employee must provide notice “as soon as practicable.”

The new law provides that an employee is entitled to use accrued sick days beginning on the 90th day of employment, but authorizes an employer to limit an employee’s use of paid sick days to 24 hours or 3 days in each year of employment. AB 1522 prohibits an employer from discriminating or retaliating against an employee who requests paid sick days, and it requires employers to satisfy specified posting, notice and recordkeeping requirements.

The Labor Commissioner will create a poster containing the required information that the

PERSPECTIVE

employer must display “in a conspicuous place”. Willful violation results in a $100 civil penalty. Current state law already requires employers to post more than 15 different notices at their worksite.

The law requires the Labor Commissioner to enforce these requirements, including the investigation, mitigation, and relief of violations of these requirements.

Moreover, the Labor Commissioner is authorized to impose specified administrative fines for violations and allows the Commissioner or the Attorney General to recover specified civil penalties against an offender who violated these provisions on behalf of the aggrieved, as well as attorney’s fees, costs, and interest.

While some larger employers in California provide paid sick leave or paid time off, AB 1522 mandates paid sick leave for part-time and seasonal workers, not just fulltime employees. The term “employee” is only defined in the context of four exclusions. As such, it must be

read expansively to apply to every employee, except those excluded.

The bill only exempts those covered by a valid collective bargaining agreement (CBA), an employee in the construction industry covered by a valid collective bargaining agreement, a provider of in-home supportive service workers, and an individual employed by an air carrier as either a flight deck or cabin crew member from the law’s mandate.

Finally, the bill amends Section 2810.5 of the Labor Code by adding an additional requirement to the employer written notice that an employee may accrue and use sick leave; has a right to request and use accrued paid sick leave; may not be terminated or retaliated against for using or requesting the use of accrued paid sick leave; and has the right to file a complaint against an employer who retaliates. n Chris Micheli is a principal with Aprea & Micheli, Inc., a Sacramento-based government affairs firm, and has been a lobbyist for the past 20 years.

Mary Kasper

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

Thank you for your leadership, dedication and hard work to the Association and the California grocery industry.

From your friends at...

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WASHIN GT O N R EP O RT

Putting Our Heads Together Outside of the Arena THERE IS PERHAPS NO BUSINESS MORE COMPETITIVE THAN THE GROCERY BUSINESS. TO THEIR CREDIT, OUR MOST COMPETITIVE INDUSTRY LEADERS DECIDED THAT THERE WERE CERTAIN AREAS THAT ARE SO IMPORTANT TO GET RIGHT THAT WE SHOULD ADDRESS THEM OUTSIDE OF THE COMPETITIVE ARENA AND WORK TOGETHER TO ACHIEVE FAVORABLE RESULTS. In this regard, food safety immediately comes to mind, but there are a host of additional issues in the government relations arena where the toughest industry competitors have stepped up to work toward achieving positive and effective change for the industry and for their customers, over and over again.

Now that yet another competitive, partisan and negative election has concluded, we need to facilitate the same type of truce between some of the most competitive and contentious elected officials of all parties—Republicans, Democrats and Independents—to work together to accomplish something beneficial for voters and our country, and of course, our industry.

There is certainly no shortage of important issues for our industry. We will be working to prioritize these issues over the next two months based on the election outcomes and congressional goals. One thing that is clear is that there is no supermajority and any legislative success will have to have the support of both sides of the aisle and both sides of the Capitol, along with the powerful pen of the President.

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

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

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I picked up a book a few weeks ago that reinforced this need for agreement and alliances across the various factions in Washington.

Chris Matthews published a book, Tip and the Gipper, When Politics Worked, describing the relationship of two of the most iconic leaders of the two parties, President Ronald Reagan and Speaker Tip O’Neill. Matthews comments on their incredible competitive spirit, yet they maintained their deep respect for each other, their principles, and the institutions they represented.

We have to return to that kind of political engagement; fierce competition and a deep respect for our country, our democratic institutions, and the values of the voters each elected official represents.

Many are scratching their heads trying to determine the lessons from the 2014 Midterm Elections.

Some of the key takeaways range across the spectrum of issues, including economic factors as well as national security. Only 22 percent of the electorate believed that their children would be better off than they were financially. A strong 77 percent expressed their fears of another terrorist attack. Without exception, winners in November talked about working across party lines to get things done, which seemed to be top of mind for voters.

It will be the role of the newly elected leadership to ensure that we can accomplish this much needed change. We need to return regular order in the political process with hearings and markups, debate and amendments.

Nominees requiring Senate confirmation should be presented, vetted and then confirmed or rejected—not recess appointed, or left in limbo.

Executive orders should be reserved for executive ordering, not legislating or regulating, or attempting to address controversial policy issues without a true debate.

The lessons from this election have to be that this democracy is greater and more important than any one party, person or idea and in order to reclaim our importance in this world, we have to do as the supermarket industry has done in some of our key areas, and step outside of the competitive arena as some things are just too important to get wrong.

I am optimist, so I believe that all of this is possible and I have seen it starting to work. FMI’s political action committee, FoodPAC, takes pride in working with both parties in every state and geographic region.

Continued on p. 34

Pillsbury thanks Chair Mary Kasper of Fresh & Easy on her leadership and vision over the past year and extends a warm welcome to incoming CGA Chair Joe Falvey of Unified Grocers.

We look forward to working with you!

Pillsbury Winthrop Shaw Pittman LLP 2600 Capitol Avenue | Suite 300 | Sacramento, CA 95816-5930 | +1.916.329.4700 www.pillsburylaw.com

WA S H I N G T O N R E P O R T

TO

Continued from p. 32

One progressive Democrat with which we continue to work very closely, Peter Welch of Vermont, echoed the sentiment that I have outlined when he said, “Congress has got to get things done, and the only way we’ll do that is by finding common ground.

If we find common ground on something, that will be good for the institution and for both parties.”

FMI is also a key sponsor of the Congressional Management Foundation, the group responsible for training members of Congress and staff about how to navigate the legislative process to get things done.

We will be participating in these bipartisan discussions and trainings, which will hopefully serve as the foundation for putting our heads together outside of the arena. n

JOE FALVEY On being elected California Grocers Association Chairman of the Board

From your friends at

Congratulations, CGA, on a truly remarkable and historic 2014!

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

The fresh&easy team thanks you for your tremendous support of our industry.

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12.03.14

FNE_CGA_Congrats_HfPgAd_

Advantage Sales & Marketing salutes Joe Falvey of Unified Grocers as the new Chairman of the Board for the California Grocers Association

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www.theNGAshow.com/register (703) 516-0700

ACCORDING TO RECENT CENSUS DATA, MILLENNIALS—THE NAME GIVEN TO THE DEMOGRAPHIC GROUP WHOSE BIRTH DATES RANGE FROM THE EARLY 1980S TO EARLY 2000s—MAKE UP APPROXIMATELY 25 PERCENT OF THE U.S. POPULATION AND THEIR NUMBERS ARE GROWING. As consumers, millennials are rapidly replacing the “baby boomer” generation, which has been the most dominant generator of retail sales and economic activity for decades.

Millennials are notorious among marketing gurus for insisting that they be approached on their own terms.

But as marketers are already discovering, millennials are not easy to reach, persuade, and attract, which pose both challenges and opportunities for the retail grocery segment. Here are some of the reasons why: n

n

n

They are the most educated generation in American history. As such, they ask more questions, do more “due diligence” research on products and services before they buy, and look for transparency from those they shop with.

Millennials are notorious among marketing gurus for insisting that they be approached on their own terms. They want to know about products and services, however they don’t want to be marketed to, but rather take part in a conversation about the products or services they buy.

Perhaps the largest challenge confronting retailers of all kinds is that millennials display little brand loyalty, or identity. One consultant

This demographic is also notable in the way they’ve grown up as the most “wired” generation ever. They are linked with friends and peers through mobile devices and computers, and more than any other segment of the population, they are are using mobile apps to make shopping more efficient and convenient.

Millennials already generate $1.3 trillion in consumer spending, according to a recent economic survey—a number that will only grow as they enter the work force, marry, find housing and begin paying off heavy education debt. They also will be mainstream shoppers at a time of rapid change in technology that will continue to transform the way consumers purchase the things they want and need.

The key to understanding millennials, experts advise, is that they are unpredictable. That may suggest to grocery operators that the time may be right to consider out-of-the-box ideas to reach the new millennials and cause them to become loyal, life-long customers. n 2 015 N G A S H OW At the 2015 NGA Show, there will be plentiful opportunities to learn more about this specific demographic, including an education workshop devoted exclusively to marketing to millennials.

I’d like to extend to all CGA members an invitation to join us for The NGA Show, February 8–11, in Las Vegas, Nev. CGA members are eligible to save 10 percent off the prevailing rate by registering online and using the code CALI15. This special discount is offered only to CGA members through online registration. Visit www.thengashow.com for more details.

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We look forward to seeing you in Las Vegas, and in the years ahead.

Peter Larkin President/CEO National Grocers Association

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

n

Millennials have more choices about where and how to shop than previous generations.

They appear to be taking full advantage of their options, sometimes going to the store, sometimes shopping for groceries online, sometimes eating out, and sometimes picking up food at the coffee shop, the gas station, or the farmers’ market.

says millennials “trade up and trade down,” and define “value” much more in personal terms.

WA SHIN GT O N REPORT

Millennials Pose Challenges and Opportunities

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What does it mean to be truly authentic? And how does that relate to today’s fragmented grocery shopping reality where omni-connected consumers are seeking products and shopping experiences that demonstrate their unique values?

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Today’s shopper seeks truthfulness, integrity, sincerity, individuality and openness from the brands they buy and the places they shop. They seek an enhanced and integrated shopping experience that includes an emotional connection to both brand and retailer.

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At the same time, significant movement is taking place within the very structure of the grocery industry. From mergers and acquisitions, expansions/contractions and experimental new store formats to nontraditional competition, the grocery landscape is in the midst of dramatic change.

That was the message delivered at the 2014 CGA Strategic Conference this past September in Palm Springs, Calif.

To address this new shopping dynamic, CGA assembled an impressive educational program that featured forward thinking experts who

CGA Chair Mary Kasper and CGA President Ron Fong set the stage for the conference theme – Authentic Grocery.

C G A D E L I V E R S “A U T H E N T I C ” C O N F E R E N C E

Retail Attendees Albertsons LLC Bestway/Gardena Supermarkets Big Saver Foods, Inc. Bristol Farms Cardenas Markets Costco Wholesale Draeger’s Supermarket Industry expert Michael Sansolo (l) and Ido Leffler, co-founder of Yes To, Inc. and Yoobi, explore the concept of conscious retailing.

inspired a fresh perspective on authenticity and how it’s changing the grocery shopping experience.

“We recruited some of our industry’s top thought-leaders to address this year’s theme,” said CGA President Ron Fong. “Our goal was to deliver a powerful program that challenged traditional thinking, explored new concepts and facilitated dialogue among peers.”

This year’s program featured experts from several of the world’s largest and well-respected research firms including A.T. Kearney, Catalina Marketing, Google Shopping, Kantar Media, Planet Retail and Strategy& (formerly Booz and Company) who presented in breakout sessions and moderated share group discussions.

Setting the tone for the conference were CGA Chair Mary Kasper, Fresh & Easy, and CGA President Ron Fong, who opened Monday’s General Session.

Kasper said true authenticity should be embedded in every company’s DNA, although it takes on different forms depending on what each company decides it is, or wants to be. She encouraged attendees to ask themselves, “How can I stand out in the minds of my customers? How can my company differentiate itself? How can we connect with customers in genuine ways that engender loyalty?”

Monday’s keynote speaker Mitch Joel, considered a leader in digital marketing and communication, told attendees that society has “hit a very profound Continued on p. 40

El Super (Bodega Latina Corp.)

Food 4 Less Stockton/ Rancho San Miguel Food 4 Less/ Foods Co. Fresh & Easy Neighborhood Market Gelson’s Markets Grocery Outlet Holiday/Sav-Mor Foods Jensen’s Finest Foods Mar-Val Food Stores Northgate Gonzales Markets Numero Uno Markets Nutricion Fundamental, Inc. Raley’s Ralph’s Grocery Company Rio Ranch Markets Safeway, Inc. Save Mart Supermarkets Smart & Final Stores Stater Bros. Markets Stump’s Markets

Super King Markets General Session keynote Mitch Joel told attendees the time is now to “reboot” your business.

Superior Grocers Times Supermarkets (Hawaii) Vallarta Supermarkets

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Whole Foods Markets

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Super A Foods

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C G A D E L I V E R S “A U T H E N T I C ” C O N F E R E N C E

Continued from p. 39

and powerful inflection point” that few businesses understand.

“Technology has removed technology from technology,” he said, referring to the ease of using smartphones and tablets. “They are simple, easy and intuitive to use,” he (l to r) Robert McDougall, Gelson’s Markets; Stephen Babson, Endeavour Capital; and Kevin Davis, Bristol Farms discussed the future impact of equity investments. said, adding that they eliminate barriers for customers to use as an integral part of their shopping experience.

Joel shared five major movements that have profoundly changed business forever. The convergence of these five movements, he said, will require companies to adapt or die.

Industry insider Michael Sansolo moderated Tuesday’s Luncheon Keynote that focused on “grocery with a conscience,” and featured two highly successful non-grocery retail executives that have built successful cause-based businesses on the cutting edge of this trend. A recap of their presentation begins on Page 46.

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Tuesday’s Super Sessions examined two growing grocery issues: mergers and acquisitions and the evolution of the grocery industy.

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Retailer Review Sessions provided suppliers an opportunity to meet with retailers in pre-scheduled meetings.

Maxine Bedat, co-founder of Zady, shared her company’s unique approach to supply chain transparency.

This year’s conference was expanded to include California growers and producers of fresh and perishable products.

C G A D E L I V E R S “A U T H E N T I C ” C O N F E R E N C E

Share Group Discussions featured industry expert moderators from major industry research firms.

Premium Suite Holders received a private Business Conference Suite to host retailer meetings.

The Strategic Conference gathered grocery retailers and suppliers from throughout California for three days of meetings, education and networking.

The Illuminators Headlite, Willie Crocker, Bimbo Bakeries USA.

Kevin Konkel (l), Raley’s and Dave Dimond, Milton’s Baking Co.

With mergers, acquisitions and public offerings grabbing headlines this past year, the conference hosted a private equity panel discussion featuring CEOs from two Southern California privately-owned grocery companies, along with a highly successful private equity leader.

Strategy& executive Nick Hodson examined the industry’s evolving market both in terms of “supply” (new formats, offerings, etc.), and “demand” (shifting consumer demands and likely new requirements in the future).

His remarks were based on more than three years of work in partnership with the Food Marketing Institute.

Continued on p. 42

Peer-to-peer networking is a highlight of the Strategic Conference. Independent operators Bob Parriott, Twain Harte Market, chats with Steve Rodacker, Mar-Val Stores.

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Robert McDougall, Gelson’s Markets, and Bristol Farm’s Kevin Davis explored the growth opportunities and future impact of private equity investments with Stephen Babson, managing director of Endeavour Capital, the Pacific Northwest’s largest regional private equity firm.

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C G A D E L I V E R S “A U T H E N T I C ” C O N F E R E N C E

Continued from p. 41

The Illuminators kept attendees well-fed with scrumptious breakfasts and lunches.

CGA extends a special thank you to this dedicated group of grocery suppliers.

Record Meeting Numbers As with years past, the conference’s face-to-face pre-scheduled business meetings dominated most of the conference schedule. More than 1,000 meetings, over 150 more than the previous year, were conducted over the three-day conference.

The Networking Lounge provided a relaxed environment for attendees.

This year’s conference placed a special emphasis on fresh and perishable products. Nearly 20 retailers brought their produce buying teams to participate in meetings during the conference.

“This expansion to include produce was a huge plus for the conference,” Fong said. “The overwhelming response by both produce buyer and producer was phenomenal.”

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Complementing the conference were daily networking events, allowing additional opportunities to develop business relationships at the single largest gathering of the California grocery industry.

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The Conference also included an exhibit floor where suppliers could promote their product, equipment and services.

“CGA especially wishes to thank our Illuminator partners who once again went above and beyond to provide fantastic meal events and enjoyable activities,” Fong said. n

Mark your Calendar

2015 CGA Strategic Conference September 27 — ­ September 29, 2015

Retailer Review Sessions featured 20-minute meetings between retailers and suppliers.

C G A D E L I V E R S “A U T H E N T I C ” C O N F E R E N C E

2014 CGA Strategic Conference Sponsors Premium Suite Holders Anheuser-Busch InBev Bimbo Bakeries USA Braga Fresh Family Farms C&S Wholesale Grocers

Coca-Cola Refreshments Command Packaging The Hershey Company Hillshire Brands

Jelly Belly Candy Co.

Ocean Mist Farms

Kellogg Company

PepsiCo

Kraft Foods Group

Procter & Gamble

MillerCoors

Unified Grocers

Nestle Purina PetCare

Unilever

The Jel Sert Company

Nestle Waters North America

Ferrero USA

Apio Inc.

Kraft Foods Group

Financial Supermarket Inc.

Baloian Farms

E&J Gallo Winery

Grocery Headquarters

Opening Reception Sponsors

After Hours Social Sponsor Heineken USA

Keynote Luncheon California Table Grape Commission

Executive Level Sponsors California Shopping Cart Retrieval Corp

Houweling’s Tomatoes KeHE Distributors NuCal Foods Partners Crackers Supermarket News Westlake Produce Company

Opening General Session Fresh & Easy

Belles Organics BMA USA, Inc. Bunzl Distribution, LLC California Shopping Cart Retrieval Corporation Casa Martinez Salsas C & H Sugar—ASR Group Ciuti International Coca Cola Refreshments Coffee Bean & Tea Leaf

Campbell Soup Company

Registration Sponsor

Classic Wines of California

MOM Brands

Clorox Company/ Burts Bees

Share Group Sessions Sponsor

The Double Cola Company

General Mills

CGA Educational Foundation

F. Gavina & Sons, Inc.

Networking Lounge Co-sponsors

Frito Lay

Mondelez International Pro Chile Tim’s Cascade Snacks/ Jack Links Beef Jerky WhiteWave Foods

Big Heart Pet Brands California Lottery Del Monte Foods Fabri-Kal/Greenware Farmer John Foods

Tim’s Cascade Snacks/ Jacks Links Beef Jerky

Director Level Sponsors AlEn USA Alkaline 88 Alta Dena Certified Dairy, LLC

Day-Lee Foods, Inc.

FMS Solutions, Inc. Hallmark Cards Inc. Hansen’s Natural Hartz Idahoan Foods Itasca Retail Jel Sert Company, The Karl Strauss Brewing Company Kayem Foods LOC Software Lone Peak Labeling

Mission Produce Monster Energy Company NRG EV Services, LLC dba NRG eVgo OK Produce On Beverages The Oppenheimer Group Orchids Paper PBI Market Equipment, Inc. The Performance Group Pro Chile Prudential Overall Supply Refrigerator Media Advertising Roplast Industries Inc. San Miguel Produce Sioux Honey Association SkinnyPop Sugar Bowl Bakery Sun Products Corporation Tony’s Chachere’s Creole Foods TruGrocer Federal Credit Union Truno Retail Technology Solutions WorldPay US

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

President Level Sponsors

2×4 Brewing & Imports-Canada’s Select Brews

Crown Poly, Inc.

MaintenX International

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would like to

Welcome

Joe Falvey

We are honored to have such an esteemed member of the grocery industry be our new CGA leader.

&

Sincerely Thank Mary Kasper

for her role as Chairman of the Board for

California Grocers Association

BUILDING NEW CUSTOMER CONNECTIONS

BY M I CHAE L SANSOLO

Bu ild ing New Cu stom er Con nection s With

BUILDING NEW CUSTOMER CONNECTIONS

The nea r con sta nt comp etitive ch a llenge of d iffer entiation a nd sta nd ing out from the crow d got a n entir ely new tw ist at the CGA Str ateg ic Con fer ence th is S eptemb er in Pa lm Sp r ing s.

To put it briefly: if you want to stand out, have an outstanding story, an authentic message, and go from there.

In a general session shining a light on the new ways of building customer value and of how to build an authentic point of difference and connection— especially to younger shoppers—the audience heard from two voices far outside the food retail industry and with merchandising and marketing plans far from the usual practice.

Ido Leffler told the success story of two of his companies: Yes To and Yoobi, featuring health and beauty products and school supplies, respectively.

Then Maxine Bedat explained how her company, Zady, has used narrative and customer connection to build a beachhead in the highly competitive world of clothing retailing.

Although their product lines are quite different, their messages rang a similar chord: In today’s ultracompetitive world businesses need to explain why they are different, why shoppers should patronize them and why a connection to the details of your products and business can matter.

More importantly, price isn’t the only way consumers see value—if you help them understand value in new and different ways.

It’s a merchandising reality that Bedat in particular emphasized is going to become increasingly important with today’s massive younger generation, which puts a premium on connection.

Leffler’s story is one that food retailers might more easily embrace because his product lines are found in so many stores. Yet his approach and path to success

demonstrate the power of narrative, cause marketing and taking chances with unusual product approaches.

He began Yes To as a way to market health and beauty products with a difference—the inclusion of produce items such as carrots, cucumbers or blueberries.

Yoobi, a much newer company, focuses both on putting fun and color into school supplies, as well as connecting shoppers to charitable efforts for schools and students in need.

But the real key is building a point of differentiation.

Leffler said, “There’s never a bad time to make yourself stand out.”

His goal is to ignite the kind of customer connection enjoyed by Apple products, Mini autos and Virgin Airlines.

“Your customers want stories,” Leffler said. And with his products Leffler aims to deliver quality, with narrative, to create what he calls “love points” that get shoppers buying and talking about products.

As he explained, the world didn’t need more HBC products when Yes To came along, but the company was able to grab shelf space at major retailers like Walgreens by emphasizing its new points of connection.

Walgreens was skeptical at first, asking how the product line could create incremental business in a well-established category. Leffler was able to win the argument by explaining the shoppers would love how the products work, how they look and how much they cost.

But most importantly, the unusual pairing of vegetables in HBC products would get Continued on p. 48

BUILDING NEW CUSTOMER CONNECTIONS

C O N TI NU E D

Continued from p. 47

shoppers talking, an essential element in today’s hyper-connected, social media climate.

Similarly, he jumped into the crowded school supply category with a specific goal after learning how many teachers spend their own money to give basic products to needy students.

But there’s also a simple retail point to his success.

When his retail partners—Walgreens and Target— embraced and aligned with the products, sales really escalated.

“If a retailer believes in your vision you tend to see significantly better execution (in stores),” he said. “When you believe in a story magical things happen.”

“Increasingly, shoppers look for products and retailers that speak to customers with stories that connect,” he said.

Authentic messaging seems so incredibly strong with the millennial generation (ages 18 -33) and there are growing examples of how viral marketing can fuel success as brilliantly shown by the recent Ice Bucket Challenge to benefit research for ALS. Yoobi products launched this year in Target stores with a promise that needy students would benefit from every purchase. So far that help has gone to 250,000 students and Leffler has plans to go much further.

As his company’s website explains, the goal in the current school year is to get supplies to 750,000 students in 30,000 kindergarten through third grade classrooms.

The product makes customers feel good and, according to Leffler, gave Target the additional aura of doing something great.

But the feel-good story is only a piece of the Yoobi’s appeal.

“If a retailer believes in your vision you tend to see significantly better execution (in stores).”

The products—notebooks, pens and the like—sport bright color patterns to make them stand out as exciting and fun. Parents like buying them for their own children and love the notion of helping others in need.

The combination of the products and cause marketing is magic.

As Leffler said, “We have three pillars on which we set up all our companies: incredible people, kickass products and awesome causes. People ask me if the social giving is a marketing tool? Heck yeah. It’s the best marketing tool.”

Yes To, he said, has become the second largest brand in its category without any traditional media support.

“We tell the story authentically every day and the results speak for themselves,” he said.

With very different products and in a very different line of retailing, Maxine Bedat embraces a similar approach of focusing on narrative and authenticity of a marketing position.

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

Zady’s point of differentiation is selling apparel that is well made and timeless in fashion, so the value isn’t the price but rather the “price per wearing.” Bedat said Zady is marketing “slow fashion,” in much the way that some supermarkets and restaurants now sell “slow food.”

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Slow food is for many a response to the fast food climate of taking in calories and sustenance as easily and cheaply as possible. With slow fashion, Bedat said, the goal is to stop the pattern of clothes purchases and

48

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

Continued on p. 50

Mary — Congratulations on a wonderful year as Chair of CGA! From your friends at

Beijing | Brussels | Century City | Chicago | Del Mar | London | Los Angeles | New York Orange County | Palo Alto | San Diego | San Francisco | Seoul | Shanghai | Washington, D.C.

www.sheppardmullin.com

BUILDING NEW CUSTOMER CONNECTIONS

C O N TI NU E D

Continued from p. 48

styles changing so fast that items are used only briefly.

A better product that lasts longer can be a far better value if the customer understands that point.

The Zady narrative is overtly explained throughout the company’s website, which is its main point of customer connection. (Zady is an internet retailer although at times it runs pop-up kiosk-type stores in such unusual locations as airports.)

For instance, Zady talks about where its products come from and helps shoppers get a sense of who is making the clothing they will wear. In addition, the company shines a light on its supply chain, helping customers understand the path clothing takes to get into their closets.

Making all those points, Bedat said, helps a shopper understand the total cost of products and helps a shopper understand why spending a little more on a garment might benefit a local business. And she clearly focused on her generation, the millennials, who, Bedat said, express a desire to align their social goals with how they shop and work. She believes Zady is a reflection of that mixture of goals.

Zady’s mission proclaims the company strives: “to provide the highest quality products available and connect our community to the makers who produce them; to provide engaging content that speaks to the

conscious consumer; to provide a beautiful alternative to fast fashion; to be responsive to the new consumer.”

The key to success she says is the authentic approach, story telling and talking with, rather than at, the Zady customers. In short, it’s about marketing in the new age of social connection with shoppers.

“Tell us that you care and we’ll give you customer loyalty for a lifetime.”

As an example, Bedat showed the audience a page from the Zady website explaining all the details behind a single pair of jeans. The information includes the story of the small company making the jeans and even the history of denim itself. Such an approach, she says, helps the customer get especially engaged in their purchase.

That type of narrative is taken on virtually every product to help educate the community of Zady’s shoppers, as well as build additional trust in the authenticity of the company’s message.

“Trust is what customer loyalty is made of,” she said. “Transparency is the foundation for building that authenticity.”

Bedat recognizes that such a path isn’t for every company and certainly can’t come about overnight, but she said it is an important link to the emerging generation and even small steps in improvement matter.

“Every company can’t go out with a message like (we have),” she said. “But if you are making efforts like us, you can celebrate progress and you will be rewarded,” she said. “The millennial generation is not hardnosed, but we want to see progress. We’ll be there to support and celebrate that progress.”

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

Like Leffler she talked about the importance of participatory commerce by interacting with customers through the new forms of social media. Zady, she said, talks about what it is doing and also listens to what the customer community says, which in turn can lead to new opportunities.

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She showed an example of a customer who sent in photos of her dog playing with a Zady’s envelope.

Bedat said that led to a discussion with the on-line

50

Maxine Bedat, co-founder, Zady

BUILDING NEW CUSTOMER CONNECTIONS

community about new product lines they would like to see at Zady, which then led to the creation of a line of pet products.

“We couldn’t keep that product in stock,” she said.

“They were primed buyers before we had to do any marketing around that product.”

As a millennial, Bedat said she would like to see the same type of interaction from supermarkets. Stores can help connect shoppers to the journey food takes starting on the farm.

More than that shoppers want help with purchases.

“Show us how to pick the best watermelon,” she said.

Stores should aggressively put their values out front, such as listing them on shopping bags.

“Tell us that you care and we’ll give you customer loyalty for a lifetime,” she said.

Story telling might seem strange, Bedat said, but it can work. Zady can measure that visitors to its website

stay significantly longer than they do on other sites because of the engaging stories.

“What shoppers care about and love is the narrative,” she said. “Most shoppers don’t care about the supply chain; they don’t even know what it is. We get the authenticity by putting the map on our website and letting them know it is there.”

The millennial shopper, she said, isn’t expecting miracles, but making progress can matter.

“The young consumer is so fundamentally different than the generation ahead of us,” Bedat said. “We are digital natives; we’ve grown up volunteering and with parents who have told us we can make the world a better place.

“All of these things make us different. If we are not being listened to, we’ll find another place to shop.

Through business we can make the world a better place. We have to seize the opportunity to make this happen.” n

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

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IDS is very proud to partner with Unified Grocers. We offer our best wishes to incoming CGA Chairman of the Board, Joe Falvey.

Thank You to Outgoing CGA Chairwoman Mary Kasper, Fresh & Easy

WELcome Incoming CGA Chairman Joe Flavey, Unified Grocers, Inc.

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

myfood4less.com ranchosanmiguelmarkets.com

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AN INDEPENDENT GROCER’S MOST MAGNIFICENT DEAL

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s er ’

An I n

BY TO M DE ANS

agnificent

NEVER IN THE HISTORY OF CIVILIZATION HAS SO MUCH WEALTH BEEN CREATED INSIDE BUSINESSES—EQUITY NOW SITTING AS CASH, INVENTORY, RECEIVABLES, INTELLECTUAL

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PROPERTY, AND GOODWILL.

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This wealth represents a lifetime of risk-taking by business owners who bobbed and weaved their way through and around adversity to create independent supermarkets that have beaten the odds.

They didn’t just survive, they actually thrived.

But lurking around the corner is a question that confounds and frustrates the brightest business minds: “Who will own my business when I’m gone?”

There’s no denying that business succession planning, exit planning, transition planning—call it what you want—is a morose subject. That’s why legions of independent grocers put off planning for the most obvious, logical and predictable event in one’s life: death.

But what makes this subject so profoundly important is not only the staggering $10 trillion that some

AN INDEPENDENT GROCER’S MOST MAGNIFICENT DEAL

experts believe will transfer inter-generationally over the next decade (or not) but also the fact that family dynamics have changed. The transfer is now complex, and for many, wildly dangerous.

Never before have business owners concentrated so much of their wealth in one stock—their own company. And they’re doing so at a time when

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

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The problems confronting aging business owners today have their origin back in the 1960s, ’70s and ’80s, when these owners elected to have smaller families than their parents and when college enrollment skyrocketed. Many children born during these decades heeded their parents’ advice to follow their own passions and ended up in professions completely unrelated to the grocery sector.

For owners whose children have followed them into the supermarket sector all the traditional challenges that visit and define family businesses mean that owners are running out of time to resolve the big question. Here’s the kicker: that question is not, “Who will lead my business when I’m gone?” But rather, “Who will risk their capital to buy my business when I’m still alive?”

Continued on p. 56

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AN INDEPENDENT GROCER’S MOST MAGNIFICENT DEAL

C O N TI NU E D

Continued from p. 55

largest bankruptcy—Washington Mutual—clocks in at “only” $330 billion. General Motors is a relative pipsqueak, weighing in at a mere $85 billion.

Dr. Tom Deans will be a featured speaker at the 2015 CGA Independent Operators Symposium.

The carnage among family-owned and controlled grocers is no more or less impressive than in other industries. The success rate across all sectors of family businesses transitioning to the second generation is only 30 percent. And of those, only 10 percent will survive to the third generation.

retirements will be longer and vastly more expensive than for any previous generation. Ask aging business owners to take all of their wealth outside of their businesses and invest it in one stock and they’ll preach the power of asset allocation and diversification. And yet across the street at Family Business Inc. this concentration of wealth feels perfectly normal.

The comfort of control can often mask the real threats to a business owner’s net worth: market forces and life events often come out of left field and strip a business of its value with blinding speed.

Reflect on Lehman Brothers. One of the single largest investment banks in the world is now remembered as the single largest bankruptcy in the history of civilization—$691 billion. The second

So if you are the founder of an independent supermarket, you have a 3 percent chance of having your grandchildren own and operate your business.

Long odds, indeed. You wouldn’t go to Las Vegas and gamble with those odds—and yet lost in the desert is where most family businesses are with their succession planning.

But what if the secret to a successful legacy lies in the idea that businesses themselves make poor legacies and seldom last? What if business owners could recast what a successful exit looks like and celebrate the finality of their life’s work instead of clinging to the idea that pursuing the perpetuity of their firm is the only authentic succession goal?

Cast an eye across the Atlantic to Europe’s most successful and enduring dynastic enterprises and you’ll see conglomerates. The undisputed heavyweight champion is the 250 -year-old Rothschild dynasty.

Continued on p. 58

Company survival rate:

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Succession

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30% Second

generation companies

10% Third Generation Companies

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

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AN INDEPENDENT GROCER’S MOST MAGNIFICENT DEAL

C O N TI NU E D

Continued from p. 56

At the very epicenter of their family business DNA is the clear and unwavering ideal that their family, not their businesses, is their greatest legacy. The Rothschilds never confuse their love of a business with their love of business—the Rothschilds teach their progeny to love commerce.

It’s a decidedly clinical idea that a business is merely an instrument of wealth creation—nothing less and nothing more: a business, a name, a building is simply an asset; they are not the family. It’s a sentiment that acknowledges that every business has a beginning, a middle and an end and that the key to succession planning is finding the end of your business before the end finds you.

The paradox, of course, is that as the Rothchilds build value and create wealth in one of their broad array of operating companies, they are always probing the market for its ultimate sale—a process the Austrian economist Joseph Schumpeter described in 1942 as the ultimate act of “creative destruction.”

Paradoxically, the more you seek to voluntarily “destroy” your business through its sale, the longer your business lasts. This is not easy; it’s phenomenally counterintuitive and one of the reasons we find ourselves today on the precipice of the greatest wealth destruction event of all time among a lineup of business owners muttering, “I’ll never sell!”

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The smart money, the most successful dynasties, understand that a business owner’s greatest legacy is not the business. It’s not even their wealth. The real legacy investment comes in teaching, nurturing and apprenticing their children to adopt and practice the very first principle of commerce that serves founders so well—namely, that there can be no authentic reward without authentic risk.

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Successful dynasties seldom “gift” operating businesses to their children. Instead, they pass cash and ask their children whether they want to purchase the business. This simple technique serves to trim the family tree by moving control to the siblings who are prepared to risk their inheritance to purchase the business.

When this step is overlooked, we find business owners who do what so many parents feel is right and

fair—when they die, they gift equal shares to each child, thereby creating sibling partnerships.

While some such partnerships succeed, the vast majority spin out of control and devolve into a litigious family-destroying, soul-destroying fullcontact sport. Ask business founders whether they would have been business partners with all their brothers and sisters and most will roll their eyes and scoff at the mere thought.

Unlike wine, families that fail to talk openly about the future of the business rarely get better with time.

And yet hope overrules experience and leads these same owners to thrust their own children into business partnerships after the parent dies.

Business-owning parents who infantilize their adult children, who control their children and treat them like subordinates and never share the answer to the big question of what happens when the owner dies, will certainly leave a legacy—but often not a proud one.

Families that can collaborate on the design and timing of the sale of their business—a sale either inside or outside the family—will protect wealth and fund the next generation’s unique dreams and aspirations. If there is no buyer for the business in the house—no child willing to risk his or her capital— why not find out now? Unlike wine, families that fail to talk openly about the future of the business rarely get better with time.

If selling a business feels emotionally difficult for a founder, it’s hard to imagine how that founder can believe it will be easier for the succeeding generation to sell when they receive the business as a gift via the founder’s estate. It’s hard to exchange a gift, never mind sell one.

Newspapers are brimming with daily examples of carnage resulting from the recipient generation operating the business purely as stewards or guardians of the previous generation’s vision.

The gifting of an operating business to children who are ill-prepared to risk their own capital, to risk Continued on p. 61

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

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Congratulations to Joe Falvey of Unified Grocers on the nomination as CGA Chairman of the Board From Co-Sales and Partners!

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Cardenas Markets would like to welcome Joe Falvey, Unified Grocers as new CGA Chairman of the Board.

AN INDEPENDENT GROCER’S MOST MAGNIFICENT DEAL

DESIGNING YOUR BUSINESS EXIT STRATEGY: BUSINESS OWNER SUCCESSION SERVICES (BOSS)

Continued from p. 58

their time, to risk anything, remains one of the most toxic wealth destroying ideas there is, if not the most toxic. There can be no debate about the importance of innovation—creative destruction, if you will—to preserve and create value.

Fortune magazine, in one of its more sobering reviews of family businesses, noted that of the 100 largest firms in America in 1900, only 16 were still in business in 2000. This list of 100 included family and nonfamily businesses and serves as a stark reminder that businesses seldom last.

We do know that as long as a business owner has children and those children have children, the potential for extraordinary new businesses is ripe, especially when entrepreneurial seeds are nurtured with capital and wisdom.

When business owners can begin a different kind of conversation within their families and make their plans less about themselves and their life’s work, they’ll take the first step toward cementing the last, most difficult, but vastly most rewarding deal of their lives.

The temptation to make a business the centerpiece of one’s legacy will continue to shred families—their wealth and their relationships—from the inside out.

It is the self-aware, introspective business owner who sets the family free of his own creation that sows the seeds of a truly great and enduring dynasty.

A family business is not a building; it is not a company name. Rather, it’s a set of values that puts risk and reward, humility not hubris, creativity, innovation and entrepreneurship at the center of the family and the business.

Paradoxically, this is how the next independent supermarket dynasty will carve out its place in history—precisely by nurturing the next generation of risk-takers to step up to the plate with their own cash and swing for the fence. n

Every owner needs a succession plan. Great succession planning helps you build, manage and protect your wealth for years to come. It is comprehensive, considers all the needs of the business, the owners, and family members and focuses on five key areas to ensure financial and long-term success. These areas are: n

Business Financial Planning—Securing and growing your company’s transferrable value;

n

Personal Financial Planning—Creating sufficient personal liquidity, cash flow and net worth beyond the business to fund your lifestyle and family financial objectives;

n

Management Succession Planning—Developing key successors to enhance long-term performance, value and transferability;

n

Business Estate Planning—Aligning the business, buy/ sell agreements, liquidity needs and estate plans to preserve the family legacy while helping to reduce the estate tax burden;

n

Ownership Transition Planning—Aligning the tax, legal and business entity structures to best achieve a successful exit strategy for ownership and management.

Being prepared for anticipated— and unanticipated—changes is one key benefit of succession planning. It also helps a business remain financially healthy and enhance its longterm performance, value, and transferability, all of which are ultimately keys to your personal financial success.

ownership transistion planning

5 BOSS

Business Financial planning

elements of

Esatate Planning

Personal financial Planning

management succession planning

Your business is, after all, your single biggest investment of time, money and talent. And whether you’re preparing to transition ownership to family members, key employees, or a third party, certain strategies must be mapped out well in advance to ensure the return on your investment of time, money and hard work. n This article was written by Rich Thornton. He is Firm Director of BOSS Implementation for Moss Adams.

Dr. Tom Dean’s presentation at the 2015 Independent Operators Symposium is sponsored by

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

Tom Deans Ph.D. is a speaker and author of all-time bestselling family business book: Every Family’s Business sold in 43 countries and listed in October 2014 by The New York Times as one of The Top Ten Books Business Owners Should Read. www.EveryFamilysBusiness.com

By Rich Thornton, Moss Adams

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BY LEN LE W IS

IT ’S A MATTE

Balan

ER OF

nce

BAL ANCE

ACCORDING TO JOE FALVEY, GOOD BUSINESS PRACTICES ARE A MATTER OF BALANCE—WHETHER IT’S FOCUSING ON GOVERNMENT RELATIONS ISSUES, OR PRIORITIZING THE MANY CHALLENGES FACING SUPERMARKET CHAINS AND INDEPENDENTS ALIKE. Falvey, executive vice president for Unified Grocers, Inc., and president of Market Centre, has over 30 years in virtually all segments of the grocery industry, giving him a unique perspective on retailing that will work to the Association’s advantage in the coming year as the 2015 CGA Chairman of the Board.

“I’ve never worked directly for one retailer,” Falvey says. “Having experience in the manufacturing, distributor and wholesale side of business, as well as, serving retailers as part of Unified, I have a broad view of the business and understand the concerns that are common to all. Seeing our business from all angles provides a better opportunity to prioritize needs and offer the greatest support for the CGA.” A six-year stint on the board of the California Independent Grocers Association (CIGA) prior to the group’s merger with CGA earlier this year is part of Falvey’s extensive experience.

“With CIGA, I was dealing primarily with small retailers that had anywhere from one to eight stores,” he says. “There used to be this notion that CIGA was representing the small guy because the large chains had a different agenda. However, 99 percent of the time what was beneficial for the independents would also benefit the large chains.

“One thing I learned along the way, and this applies to politics, is when you talk to a state legislator about a particular issue you must represent the interests of both large and small operators.”

“They are aware that hometown grocers may not have staff to help manage their way through all the regulations, but still have a great influence on the business environment,” he says.

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

Falvey says that he knows for certain that politicians listen to the needs of small operators.

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Continued on p. 64

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BAL ANCE

C O N TI NU E D

Continued from p. 63

“California continues to be a difficult work environment,” according to Falvey. “Just look at the number of bills we address every year at CGA. We focus on approximately 300.”

And, he adds, “That’s just a handful of the thousands of bills introduced that could become law. In order to be effective, we must focus on the ones that will have the most significant impact in everyone’s business.”

Falvey points out that 2014 was a significant legislative year for the grocery industry with bills addressing the ban of single-use plastic bags, minimum wage increases and grocery worker retention, taking center stage.

Yet, despite CGA’s legislative success, there is little time for the Association to rest. For example, a potential referendum on the plastic bag issue has a chance to make it to the ballot box in 2016.

“That’s why the government relations team at CGA is so important.”

Joe complimented CGA President and CEO Ron Fong for building a strong government relations team headed by Keri Askew Bailey.

“One of my priorities is to make sure this team has the resources to protect us from the thousands of legislative bills introduced annually in Sacramento,”

he says. “The greatest resource we have in the industry are the members of the CGA who share similar needs and goals, and therefore I encourage them to all become more involved in this Association.”

Falvey considers himself a “ face-to-face kind of guy” and plans, along with Ron Fong, to meet with CGA stakeholders to ensure the Association is addressing the issues important to its members.

Falvey considers himself a “face-to-face kind of guy” and plans, along with Ron Fong, to meet with CGA stakeholders to ensure the Association is addressing the issues important to its members.

“I want to make sure we’re working on the right ‘stuff’ and to get their true perspectives on what’s affecting them,” he says. “I don’t want to assume that I know what’s on their minds, so investing a fair amount of face time with members over the next several months is essential.”

Falvey is confident he’ll gather a good cross section of viewpoints on what the Association needs to do in 2015 —in government relations and other areas pertinent to members.

Along with the Association’s government relations program, Falvey is a strong supporter of the CGA Educational Foundation, led by Executive Director Shiloh London, and encourages members to support its programs.

“This year we awarded $498,000 in college scholarships, a record number for the Foundation,” he says. “We’re really proud of that accomplishment.”

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

He also lauded the Foundation’s new partnership with Cal Poly, San Luis Obispo, which includes funding scholarships, internships and professional development opportunities for students in the school’s agribusiness food retail management program for the 2015-16 academic year.

64

In December, Outgoing Chair Mary Kasper passed the gavel to Incoming Chair Joe Falvey.

“This is really a first for the Foundation,” Falvey says.

“Three students participated at this year’s conference.

We are looking forward to expanding the program— making it even better than the first-class program it already is.”

Continued on p. 66

BAL ANCE

C O N TI NU E D

Continued from p. 64

Meanwhile, the annual CGA Strategic Conference, directed by Doug Scholz, has become an increasingly significant gathering.

“It’s become a great way to educate and encourage people to expand their creative thinking,” says Falvey, who served as the 2014 CGA Strategic Conference Committee chair. “This year’s theme, ‘Authentic Grocery,’ featured presentations from non-grocery retailers that showcased unique and different approaches of doing business.”

Falvey says there’s a great deal to learn from other unrelated industries. The food industry needs to better understand how consumer buying habits are changing, as well as understand the continued introduction of new retail formats.

“There’s no such thing as a conventional store anymore,” Falvey states. “Is a dollar store a conventional grocery store? What about Trader Joe’s or 7-Eleven? It’s becoming increasingly difficult to categorize stores and CGA has to be involved in that discussion.”

And, he warns, the industry can’t ignore online companies like Amazon, Instacart or Fresh Direct.

“They represent a new way of getting grocery products to the consumer and we in brick-and-mortar must learn and adapt,” he says. “As an industry we’re still a bit behind in adapting to the digital world.”

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In summarizing his position as CGA chair, Falvey sees his role as continuing to build on the Association’s solid foundation of government advocacy, communications, education, and industry collaboration.

66

“CGA’s goal is to unite the industry so it can speak as a united voice,” Falvey concludes. “We have made great advances in the past, and to further our success, I plan to employ the tools and experience I have gathered over the years in various industries to continue a quality organization in the coming year.”

A Coast to Coast Adventure Life began in Fairfield, Conn. for Joe Falvey, with his education and adventures taking him around the country. He attended Marietta College in Ohio to play baseball and obtain a degree in Managerial Economics in 1982.

E. & J. Gallo Winery brought him to Los Angeles as a sales rep. calling on grocers upon graduation from college.

“I started from the ground up, building in-store displays,” he recalls.

In summarizing his position as CGA Chair, Falvey sees his role as continuing to build on the Association’s solid foundation of government advocacy, communications, education and industry collaboration.

Once Gallo opened a distributorship in San Francisco, Falvey moved north, climbing the ranks of experience to become area manager by 1985. A year later he married his wife, Dolly. Soon to follow were their two daughters. Brooke, 26, who now works for Mondelez International, and is attending the USC Food Industry Management Program, and Shauna, 23, works for Chevron as an environmental engineer.

His life in the food business began in 1987 as a regional sales manager for Nalley Fine Foods in the Bay Area, and later in Seattle as director of sales.

In 1999, Unified Grocers, Certified Grocers at the time, brought Joe and his family back to Northern California as division president. Later he was promoted to senior vice president of Unified and president of Unified’s Market Centre division.

Now as executive vice president, he takes advantage of his diverse background in the manufacturing, distribution and retail side of business.

“Having lived and worked in all three of Unified’s key marketing areas—the Northwest, Northern and Southern California, I am very familiar with the needs unique to each region,” he says.

“I consider it an honor to hold this position as CGA Chairman,” Falvey says. “I am excited to take on the challenge and to represent the food industry, while balancing the needs of the CGA membership.” n

Congratulations to Joe Falvey on being nominated CGA’s new Chairman of the Board. We know you will do a great job!

For clients that require the highest caliber of legal knowledge coupled with a responsive and results-driven approach, Carr McClellan is the boutique California business and business legal services in the food and beverage industry.

Business • Litigation • Real Estate • Tax

216 Park Road, Burlingame, CA 94010 650.342.9600

|

www.carr-mcclellan.com

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

For further information, contact Mark Cassanego, Chair, Food & Beverage Sector.

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WEALTH M A N AGEM EN T

What Does the Navy Know About My Business?

DURING THE VIETNAM WAR, I HAD THE PRIVILEGE OF ATTENDING PILOT TRAINING IN PENSACOLA, FLA. LITTLE DID I KNOW THAT THE LESSONS LEARNED THERE WOULD APPLY TO THE EVERYDAY WORKINGS OF MY BUSINESS. Television icon Johnny Carson once said, “My success just evolved from working hard at the business at hand each day.”

Sound familiar? You know you are not alone!

We were always teaching and training. This was not just a good idea, it was a requirement. With even low turnover, knowledge of complex systems and procedures pays huge dividends. A robust training program constantly improves efficiency and skills.

iStock editorial/Thinkstock

Pilot training was an incredible experience, and valuable in many ways. I quickly learned that the principles of discipline, teaching and training would be vital for my success. Let me offer a few examples.

One of my first activities was to attend the Captain’s Briefing. In this meeting the focus was on the day’s mission and who would be responsible for what activities. The captain and his crew didn’t want any surprises. Everyone is accountable. No questions were unanswered and each person understood their role. This was “all hands on deck.” There was nothing assumed during the briefing.

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You may find that there are parallels in your business. Let’s see if there is more to consider.

68

We had, at that time, very sophisticated technology.

But, in the U.S. Navy we also prepared for the unlikely event of failure. Our backup consisted of “tried and true” methods that had served the crew for many years.

Even with this technology, clear communication among the sailors on the bridge was critical. The communication was calm, succinct and controlled.

I was reminded of how important it is to have a detailed plan.

You also need to consider cultural and generational differences and how they apply to the success of your business.

Finally, I was amazed that pilots are graded on every take-off and landing. On an aircraft carrier there is an amazing amount of complex activities that takes place both above and below deck. Everyone is graded and retraining and reinforcement follows. It seems to me these “best practices” apply directly to our business and its ongoing success.

Winston Churchill was quoted as saying, “Success is not final, failure is not fatal: it is the courage to continue that counts.”

“Things do not happen. Things are made to happen. Leadership and learning are indispensable to each other.”

—John F. Kennedy The California Grocers Association is there to help with identifying resources and solutions for your business. I encourage you to continue engaging in the ongoing process of making our industry stronger and vital to the consumers we serve. n John B. Kelly, MPA, CFP is an advisor to business and families regarding their financial success and succession planning.

Feel free to contact John at 916-296-9019 or at investorscaddie@gmail.com

VALUES BASED FINANCIAL PLANNING Just as a caddie assists a golfer—giving insightful advice and moral support—The Investor’s Caddie is aware of the challenges and obstacles of the financial course of life, along with the best strategy in playing it.

A great financial advisor is worth their weight in gold. Whether you plan to invest for the future, create a college fund, own your own home or draw-up a living trust, it is important for your advisor to understand the big picture. With over 30-years’ experience in the industry and the partnership of a team of experts, John B. Kelly can bring your financial vision to life.

John is a Certified Financial Planner with Mass Mutual. An expert in life insurance, disability income insurance, annuities, long term care insurance, retirement plans and investments, he can help you navigate and plan for your financial needs. It’s important to understand your unique situation and financial goals. He will help you understand your options and help you take the next steps to prepare for your financial future.

For most families, saving enough to pay for the costs of higher education can seem overwhelming. However, with good planning, funding a college education can be easier to achieve than you might think. John can help guide you from here to there.

As an agent of the top-selling real estate company in the area, John’s experience means better results, whether you’re searching for your first home or a vacation home. Being a part of a great company involves not only serving clients to the best of his abilities, but also connecting with the community to match properties and people successfully.

Due to a lifetime of relationships, John has also partnered with various teams to offer coaching, business development, asset management and succession planning to his client base.

John B. Kelly, MPA, CFP - The Investor’s Caddie, Inc. - 916.296.9019 - investorscaddie@gmail.com

Looking to a Congratulates Joe Falvey of UniďŹ ed Grocers, Inc. as the new CGA Chair of the Board.

Renee D. Wasserman and the RJO team look forward to your

bright

future!

Congratulations to incoming Chairman Joe Falvey

vision and leadership in 2015. ™

The SWS team would like to recognize Joe Falvey as the new Chairman of the Board for CGA!

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

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PAGE

COMPANY

PHONE

FAX

EMAIL

20

Acclaim Marketing & Sales

714-256-9388

714-256-9387

cleahy@acclaimmktg.com

WEBSITE

35

Advantage Sales & Marketing

714-780-3000

858-652-5166

stu.victor@asmnet.com

45

Albertsons LLC

714-300-6000

714-300-6936

BC

Anheuser-Busch InBev

909-597-0460

909-597-0460

70

Artisan Confections

800-233-2143

13

Bimbo Bakeries USA

714-459-4772

5

Braga Fresh Family Farms

831-678-3835

29

C&H Sugar - ASR Group

510-787-4416

25

C&S Wholesale Grocers, Inc.

916-373-4396

IBC

California Shopping Cart Retrieval Corp.

818-563-3070/ 800-252-4613

818-563-3041

61

Cardenas Markets, Inc.

909-923-7426

909-923-4665

67

Cardiff Seaside Market Inc.

760-753-5445

760-753-2018

IFC

Coca-Cola Refreshments

213-746-5555

213-744-8765

mikanderson@coca-cola.com

www.cokecce.com

51

Command Packaging

800-996-2247

323-260-7047

erin@smarterbags.com

www.smarterbags.com

59

Co-Sales

925-327-7311

925-327-7321

jfrench@co-salesnc.com

www.co-sales.com

15

Downey Brand LLP

916-520-5316

bapplegate@downeybrand.com

www.downeybrand.com

53

Food 4 Less (Stockton)/ Rancho San Miguel Markets

209-957-4917

209-956-8550

34

Fresh & Easy

310-341-1200

310-341-1501

61

Fruitridge Printing &Lithograph, Inc./ RAM Printing

916-452-9213

916-452-6020

info@fruitridge.com

www.fruitridgeprinting.com

53

IDS Real Estate Group

213-362-9321

213-652-1823

smohammed@idsrealestate.com

www.idsrealestate.com

69

The Investor’s Caddie, Inc.

916-296-9019

888-391-5286

investorscaddie@gmail.com

www.financialguide.com/john-kelly

72

Juanita’s Foods

310-834-5339

310-834-5064

smagoffin@juanitasfoods.com

www.juanitasfoods.com

23

MillerCoors

916-771-6428

916-786-9396

stacy.thorsen@millercoors.com

www.millercoors.com

19

Mondelez International Inc.

973-503-4955

973-503-2336

pat.m.smith@mdlz.com

www.mondelezinternational.com

36

National Grocers Association

703-516-0700

703-516-0115

communications@nationalgrocers.org

www.nationalgrocers.org

17

Novamex

888-668-2639

consumer.relations@Novamex.com

www.novamex.com/www.jarritos.com

7

Pepsi Beverages Company - WBU

925-416-2573

925-416-2600

paul.turcotte@pepsico.com

www.pepsi.com

33

Pillsbury Winthrop Shaw Pittman LLP

213-488-7282

213-629-1033

christopher.patay@pillsburylaw.com

www.pillsburylaw.com

71

Raley’s

916-373-3333

916-444-3733

www.raleys.com

31

Ralphs Grocery Company Food 4 Less/ Foods Co.

310-884-9000

310-884-2600

www.ralphs.com

59

Refrigerator Media Advertising

651-755-7226

952-942-7668

71

Rogers Joseph O’Donnell

415-956-2828

415-956-6457

20

Ronald P. Slates, Professional Corporation

213-624-1515

213-624-7536

18

Safeway Inc.

925-467-3000

925-467-3323

52

San Gabriel Valley Council, Boy Scouts of America

626-351-8815

626-351-9149

49

Sheppard, Mullin, Richter & Hampton

310-228-2272

57

SkinnyPop

847-982-9800

312-277-2399

57

Smart & Final Stores

323-869-7500

323-869-7862

71

Southern Wine & Spirits

800-537-3332

510-475-7034

jimandrus@southernwine.com

www.southernwine.com

21

Specialty Food Association

212-482-6440

212-482-6459

info@nafst.org

www.fancyfoodshows.com

70

UL Everclean

818-874-1290

818-865-0465

garrison.ford@ul.com

www.evercleanservices.com

11

Unified Grocers, Inc.

323-264-5200

323-262-0658

customercare@unifiedgrocers.com

www.unifiedgrocers.com

65

Western Association of Food Chains

562-497-1012

562-497-1053

carole@wafc.com

www.wafc.com

70

Western Marketing Services

562-864-0800

562-864-0822

dsmith@wms4u.com

www.westernmarketingservicesinc.com

www.asmnet.com www.albertsons.com

raul.aguilar@anheuser-busch.com

www.anheuser-busch.com

etarbush@hersheys.com

www.scharffenberger.com

rhamacher@bbumail.com

www.bimbobakeriesusa.com

sales@bragafresh.com

www.bragafresh.com

510-787-4205

kent.kunsman@chsugar.com

www.chsugar.com

916-373-4296

pmiller@cswg.com

www.cswg.com

714-441-3435

www.cscrc.net tguoz@cmkts.com

www.cardenasmarkets.com www.seasidemkt.com

www.food-4-less.com www.freshandeasy.com

vickiejohnson@att.net

www.refcoupons.com www.rjo.com

rslates2@rslateslaw.com

www.rslateslaw.com www.safeway.com

matt.bear@scouting.org

www.sgvcbsa.org

mgallion@sheppardmullin.com

www.sheppardmullin.com

info@skinnypop.com

www.skinnypop.com www.smartandfinal.com

iPhone CART REPORTING “WE HAVE AN APP FOR THAT�

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

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to our

MANY ADVERTISERS ADVERTISED IN ALL SIX ISSUES OF CALIFORNIA GROCER

Anheuser-Busch InBev C&S Wholesale Grocers California Shopping Cart Retrieval Corp.

Coca-Cola Refreshments

Pepsi Beverages Company – WBU Safeway Inc. Unified Grocers, Inc.

CALIFORNIA GROCER ADVERTISERS

Acclaim Marketing & Sales Advantage Sales & Marketing al fresco all natural (Kayem Foods) Albertsons LLC AlEn USA Anheuser-Busch InBev Apio Inc. Artisan Confections Berkeley Farms, LLC Bimbo Bakeries USA Braga Fresh Family Farms C & H Sugar - ASR Group C&S Wholesale Grocers, Inc. California Air Resources Board/ Refrigerant Management Program California Beer & Beverage Distributors California Lottery California Shopping Cart Retrieval Corp.

Cardenas Markets, Inc. Cardiff Seaside Market Inc. Carr McClellan Ingersoll Thompson & Horn Professional Law Corporation Central Valley Ag. Exports, Inc. City of Hope Ciuti International Clover Stornetta Farms, Inc. Coca-Cola Refreshments Command Packaging Co-Sales

Delta Dental of California Designer Greetings Downey Brand LLP El Super (Bodega Latina Corp.)

Expo Comida Latina – Urban Expositions F. Gavina & Sons Falcon Trading Company Food 4 Less (Stockton)/Rancho San Miguel Markets Food 4 Less/Foods Co. Fresh & Easy Fruitridge Printing & Lithograph, Inc./RAM Printing Gallo Wine Company Gelson's Markets Gizmo Beverages Gourmet Demonstration Services Grocery Manufacturers Association Hallmark Cards Inc. Harris Ranch Beef Company The Hershey Company Hooker's Gourmet Salads IDS Real Estate Group Illuminators International Dairy Deli Bakery Association The Investor's Caddie, Inc. Jelly Belly Candy Co. Juanita's Foods Kellogg Company

Kraft Foods Global, Inc. MaintenX International Marin Cheese Company Mastro & Associates METTLER TOLEDO MillerCoors Milton's Baking Company MOM Brands Mondelez International Inc. Moresco Distributing Company National Grocers Association Nestle Purina PetCare New Hope Natural Media North State Grocery, Inc. dba Holiday/Sav-Mor Foods Novamex NuCal Foods Oberto Brands Ocean Mist Farms ON Beverages Pepsi Beverages Company - WBU Pillsbury Winthrop Shaw Pittman LLP Pro Chile Procter & Gamble Producers Dairy Foods, Inc. Prudential Overall Supply Quik Stop Markets, Inc. Raley's Ralphs Grocery Company Refrigerator Media Advertising

rePLANET, LLC Rogers Joseph O'Donnell Ronald P. Slates Esquire Safeway Inc. San Gabriel Valley Council, Boy Scouts of America Sheppard, Mullin, Richter & Hampton Sioux Honey Association SkinnyPop Smart & Final Stores Southern Wine & Spirits Specialty Food Association Stater Bros. Markets Sun Products Corporation Sun-Maid Growers of California Super A Foods, Inc. Super King Markets Superior Grocers Tony's Fine Foods Truno Retail Technology Solutions UL Everclean Unified Grocers, Inc. Unilever Western Association of Food Chains Western Exterminator Western Marketing Services Whole Foods Market - Southern Pacific Region WorldPay US

Jelly Belly Candy Co. Kellogg Company National Grocers Association Natural Products Expo West Roplast Industries Inc.

SIAL Canada Specialty Food Association SRI Advertising World Tea Expo - Healthy Beverage Expo

ELECTRONIC ADVERTISERS

Anheuser-Busch InBev California Shopping Cart Retrieval Corp.

Command Packaging Food Marketing Institute