CGA CA Grocer Online 2015 Issue 2

C ALIFORNIA GROCERS A SSOCIATION

DRIVING TH E DINING TREND

IN THIS ISSUE • Attention Store Manager Start Your Engine…

• As California Goes...

• Industry Celebrates the Spirit of the Family Business

For the latest industry news visit www.cagrocers.com

2015, ISSUE 2

In California’s competitive and ultra diverse grocery marketplace, culture is emerging as the one true differentiator that cannot be copied or commoditized. From chairman to check stand, savvy companies are identifying, building and communicating their unique culture as a means to rally employees and ignite customer loyalty.

Retailers and brands are also building a distinct culture of food among their followers.

Movements toward convenient, healthy, sustainable, and locally sourced products are accelerating across all formats as shoppers seek a more direct relationship with the food they consume that is unique to their lifestyle and the communities in which they live.

As a result, grocers across California are experimenting with new store formats and developing strategies to collaborate with their employees, trading partners AND customers to provide a highly personalized, tailored assortment of goods that reflect individual shopping preferences.

September 27-29, 2015 | Palm Springs, CA ome join your colleagues as we define the trends and inspire culture building throughout your organization and with your customers.

For attendees, the 2015 CGA Strategic Conference offers one of the most productive business events of the year. The agenda is packed with insightful educational sessions that take dead aim at the trends and issues impacting the grocery industry in California. Mix in numerous networking opportunities and, of course, CGA’s signature one-on-one retailer/supplier meetings and you have an event you won’t want to miss.

“There is no other conference where one is able to learn nearly as much about the current state of the California grocery industry, as this one. That and the fact that you leave the conference with a very thorough understanding of the marketing strategies for major manufacturers & suppliers, for the following year. The entire conference is extremely well planned and executed.”

Kurt Erickson

Chief Operating Officer Vallarta Supermarkets

“The CGA annual convention provides an excellent venue for vendor ‘speed dating’. We find the convention very effective for an efficient forum for our Procurement teams to meet with a large number of vendors in a very small amount of time. Additionally, the CGA provides a host of relevant and educational sessions that fill out the convention agenda.”

Mark Johnson

Center Store Procurement Unified Grocers, Inc.

www.cgastrategicconference.com

Break Away

From The Traditional Trade Show Experience

Just Ask Anyone

98% of conference attendees said they would recommend the conference to a colleague.

Conference Schedule

Sponsorship Opportunities

Sunday, September 27

The 2015 CGA Strategic Conference offers a variety of sponsorship packages and customized opportunities to promote your company's products, equipment or services. Take advantage of this unique opportunity to meet with California's top grocery decision makers.

Overview Illuminators Golf Tournament Opening General Session Opening Reception After-hours Social Event

Monday, September 28 Collaborative Share Group Discussions Opening Remarks and General Session Pre-Scheduled Business Meetings Reception & Illuminators Special Event

All conference sponsors receive customized, pre-scheduled meeting schedules as part of their investment. Whether you represent a new niche product, or an established national supplier, the Conference provides a highly productive forum to meet one-on-one with buyers from California's top retail companies.

Whatever your desired outcome, the Conference will work with you to meet your goals and budget.

For complete sponsorship information including a list of participating retailers and sponsorship prospectus, contact:

Beth Wright

Director, Events & Sponsorship California Grocers Association

(916) 448-3545 | (800) 794-3545 bwright@cagrocers.com

Tuesday, September 29 Multiple Educational Sessions & Retailer Spotlight Pre-scheduled Business Meetings Luncheon Keynote Address

The Illuminators Thank you to The Illuminators for their continued, generous support of the CGA Strategic Conference. Your outstanding meal functions and entertaining social events greatly enhance the Conference.

©2011 The Coca-Cola Company. “Coca-Cola,” “open happiness” and the Contour Bottle are registered trademarks of The Coca-Cola Company.

CONTENTS

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F E AT U R ES

COLU M NS

CGAEF Celebrates The Spirit of Family Business

President’s Message And The Beat Goes On.........................................6

More than 700 friends, family and industry peers celebrated the induction of Jim and Joyce Raley Teel and Joseph E. Gallo into the CGA Educational Foundation Hall of Achievement.

Driving the Dining Trend

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Food trucks are becoming increasingly popular for their upscale and modern take on a wide variety of ethnic cuisines and low prices.

Attention Store Manager, Start Your Engine…

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Whether it’s driving store sales or a souped-up hot rod, Fresh & Easy’s Erica Nocita is always striving to be the best.

Meet New Illuminator Headlite Jim French

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| Issue 2

Incoming Illuminator Headlite Jim French says life is simply a matter of balance – maintaining the balance between a professional career and family life.

From The Chair Lucky Us...............................................................8 Viewpoint—Kevin Coupe Cut Cords & Business Lessons..............................10 Capitol Insider A Time For Consistency...................................... 14

DEPA RT M EN TS Know the Law.....................................................16 Washington Report...................................... 20, 22 CGA News..........................................................24 Member Profile...................................................40 Advertiser Index .................................................68

As California Goes...

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California is often the bellwether for emerging policies and political trends across the country. Organized labor groups in particular float legislative ideas in hopes of implementing a state-by-state policy strategy.

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. © 2015 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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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

Kevin Arceneaux Mondelez International Inc.

Kendra Doyel Ralphs Grocery Company

Dave Jones Kellogg Company

Raul Aguilar Anheuser-Busch InBev

Brian Dowling Safeway Inc.

Dan Meyer Stater Bros. Markets

Denny Silva Coca-Cola Refreshments

Jon Alden Jelly Belly Candy Co.

Jon Giannini Nutricion Fundamental, Inc.

Omar Milbis Rio Ranch Markets

Renee Amen Super A Foods

Dick Gong G & G Supermarket, Inc.

Phil Miller C & S Wholesale Grocers

Naresh Solanki Bestway/Gardena Supermarkets

Teresa Anaya Northgate Gonzalez Markets

Robin Graf Whole Foods Market

Hee-Sook Nelson Gelson’s Markets

Joe Angulo El Super (Bodega Latina)

Rickey Hamacher Bimbo Bakeries, USA

Keith Olscamp Campbell Soup Company

Rich Arnold Oberto Brands

Arthur D. Jackson, Jr. Costco Wholesale

Kelly Augustin United Markets, Inc.

Michel LeClerc North State Grocery Inc.

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

Jennifer Bosma Harvest Market

Eric Lindberg, Jr. Grocery Outlet, Inc.

Paul Cooke Nestlé Purina PetCare

Dave Madden MillerCoors

Brent Cotten The Hershey Company

Casey McQuaid E & J Gallo Winery

Dennis Darling Foods Etc.

Lynn Melillo Bristol Farms

Mimi Song Superior Grocers Mike Stamper Nestlé Sales Division Kim Stokes Unilever Dirk Stump Stump’s Markets

Bob Richardson The Clorox Company

John Swindell Food 4 Less/Foods Co.

Mike Ridenour Kraft Foods Group

Doug Todd PepsiCo Inc.

Casey Rodacker Mar-Val Food Stores, Inc.

Jim Van Gorkom NuCal Foods

Dean Ryan Tops Fresh Market

Kevin Young Young’s Payless Market IGA

PRESIDENT’S MESSAGE

And The Beat Goes On RO N ALD F ONG President/CEO

As we all know, California marches to the beat of its own drum.

A perfect example is the California Green Chemistry Initiative.

For more than six years now we’ve kept you updated on the progress of the California Green Chemistry Initiative – the state’s ambitious effort to phase out harmful chemicals in consumer products once safer alternatives are identified.

And for almost the same amount of time, the initiative has been mired in the state’s regulatory wasteland. Only last year did final regulations for the first phase get released.

Green chemistry isn’t anything new, the concept has been around since the 1960s. While mainly a federal mandate, California, as usual, determined enough wasn’t being done at the federal level and decided to take matters into its own hands.

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

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During this lengthy and often contentious period, your Association labored tirelessly with its retail partners to engage regulators and ensure that a tiered approach to compliance was created in regulation, one that begins with product manufacturers and flows to retailers only if manufacturers fail to comply with requirements for product lifecycle and alternatives analyses.

CGA also worked to ensure that any mandated regulatory responses, including requirements for extended producer responsibility programs, utilize retailers only on a voluntary basis.

Basically, instead of trying to determine how toxic specific chemicals are, it asks why they are necessary at all. Instead of banning specific chemicals from particular products, such as bisphenol A in baby bottles, it looks at classes of products.

Honestly, the first round of regulations has had a minimal impact on the grocery industry. The first priority products listed focused on specific children’s foam-padded sleeping products, specific spray polyurethane foam systems, and specific paint strippers.

In general the business community supported this concept because in theory it moved the Legislature away from regulating individual chemicals through the political bill process to looking at entire classes of products from the perspective of science. And for the most part this has been successful, although occasionally legislators can’t help themselves from dabbling and trying to regulate particular chemicals.

However, that may soon change. The final 201517 Work Plan DRSC release includes a number of proposed product categories that could impact grocers in the second or subsequent rounds of priority product listings.

Enter now the regulatory process.

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mitigate consumer exposures, or withdraw products from the California market.

The legislation contained an outline of lawmakers’ priorities with much of the detail work left to the regulatory process through the Department of Toxic Substances Control (DTSC).

The regulations are intended to force manufacturers to identify chemicals in consumer products, analyze the impact of those chemicals, identify possible alternatives that could be used, and ultimately either reformulate products,

In other words, this is an issue that our industry will be working through for years to come. I suppose in California it is another instance of needing to get used to doing business to a different drumbeat. n

FROM THE CHAIR

Lucky Us J OE FALV E Y CGA Chair of the Board Executive Vice President Unified Grocers, Inc. President, Market Centre

Not having a legal background or a career in government relations, I felt lucky but also intimidated with becoming the California Grocers Association Chairman.

I’ve had plenty of senior level positions with Unified Grocers and with other companies, but most of them have been within business and overall general management.

It is with this experience or lack of, I decided to explore the purpose and operation of other grocery associations, with the intent of better understanding and perhaps improving our own CGA. Not surprisingly but certainly comforting, I discovered how great we really are. Many consider us to be progressive in the trade association world. There are many associations that provide leadership, representation and guidance on managing through the state and national legislative maze.

There are few however, that embark on a campaign that truly makes a difference for business operators such as our CGA. We have a significant impact on legislative agendas and also a commitment to educating our future leaders.

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

Our success in the area of state and local legislative representation is impressive. The thoroughness and professionalism of our teams are unmatched. Many associations partake at the state level but no one drills down like CGA at the local level. We shake hands with decision makers and discuss issues of relevance that affect all of us.

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The achievements made by our communication team to deliver our message and share information is also unheard of within other organizations. Amazing! Who still prints a magazine? CGA does, and believe it or not, people still like to read magazines.

I see it everywhere; in office lobbies, on people’s desks and conference rooms. Before writing this article, I often wondered whether anyone actually reads this thing. Based on feedback, I discovered that many people do pick it up to read or at least scan it for pictures of themselves.

Our Educational Foundation is unique to this state association. Try to find one that gave away half a million dollars in scholarships last year alone and also provided unique education opportunities through its annual conference and other events and activities.

One of the key drivers for funding the Educational Foundation is the Hall of Achievement (HOA) dinner. Recently, the HOA dinner honored E. & J. Gallo Winery and Raley’s Family of Fine Stores.

We have a significant impact on legislative agendas and also a commitment to educating our future leaders.

I was touched by the presentations of both these family-run businesses as they explained how the hard work, the passion and a little luck sprinkled along the way have all contributed in achieving their success. Personally, I feel connected to both companies.

At age 22, I was recruited out of college by Gallo Wine and began my career in Los Angeles throwing cases and building displays. Gallo taught me how to sell, how to work hard, and how to appreciate and support people around me. Raley’s is another family run business that I have worked with for years. The longevity of this company is a tribute to the family’s commitment to its customers and employees.

As corny as it sounds, I love this business. Not the same as how I love my family or golf or a really juicy cheeseburger, but rather an energized and respectful admiration of the people and the journey they have taken in becoming successful.

Whether it is luck or hard work, our success is a result of the team effort by CGA and the businesses we represent. n

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VIEWPOINT

Cut Cords & Business Lessons KEV IN C OU P E

I love it when companies decide to color outside the lines of their own businesses, challenging traditions and even taking bites out of hamburgers made from sacred cows.

And I especially love it when it happens in industries outside the one I spend most of my time covering, and yet the lessons are instructive and the metaphors applicable.

There is no place where this is happening more these days than in the entertainment business, which is teaching us about how consumer consumption habits are changing, and businesses are adapting and adopting new models they hope will keep them relevant.

Start with the fact that Netflix now has more subscribers than HBO; it isn’t as profitable, to be sure, but it has more subscribers. This is particularly noteworthy because Netflix long ago stopped being in the movie rental business, and decided to get into the content creation business. The folks in charge of Netflix realized that for the company to continue to be relevant and vital, it needed to compete more with HBO (which has long offered original programming, with “Game of Thrones” and “Girls” being two of its current hot shows) and not with Blockbuster and Redbox.

Important lesson: It is hard to be successful if the stuff you sell and/or rent is exactly the same stuff that people can get in other places. You have to have a differential advantage. Something unique. In the entertainment business, they call it “original content.” In the food business, they call it “private label.”

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

And so, Netflix came up with programs like “House of Cards” and “Orange Is The New Black,” which

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served as its own differentiated calling card with consumers.

Amazon, which is also part of this fight, has recognized that it needs to do the same thing whenever possible ... and so it has begun developing its own differentiated programming, such as “Bosch” and “Transparent.”

And so, HBO, Showtime and all the other broadcast and cable networks now find themselves under attack by a competitor that used to be just an alternative vehicle for distributing their programming.

It is hard to be successful if the stuff you sell and/or rent is exactly the same stuff that people can get in other places.

Another important lesson. The great baseball pitcher Satchel Paige once said, ‘Don;t look back.

Someone might be gaining on you.” But I think while it is incredibly important to be focused on the future and not the past, I also think one has to keep one’s eyes peeled for new competition.

So now what’s happening?

HBO has announced the details of the video streaming service it is about to launch, linking with Apple to initiate the new product. HBO Now does not require a traditional cable subscription, and will reportedly make available every program HBO has ever made for streaming purposes.

Essentially, what HBO is doing is acknowledging a major shift in consumer behavior away from watching on TV sets hooked up to cable outlets, and toward watching on computers, tablets and other mobile devices — a recognition that has compelled companies like Amazon and Netflix to adjust their own business models. The number of people who settle down on the couch at

VIEWPOINT

home to focus exclusively on the TV at appointed times is shrinking, and there is little to no likelihood that the trend is going to slow down, much less stop.

HBO is doing it. Showtime expects to be doing it sooner rather than later. And the broadcast networks almost certainly will be doing it at some point — disintermediating the cable companies that have been serving as gatekeepers — charging virtually monopolistic prices — for years.

The argument here is very simple. The people who are cutting the cord from traditional cable or satellite TV services are almost genetically bred to look for every opportunity to cut the cords that bind traditional consumers to traditional businesses.

Still another lesson: They may not know the word “disintermediate,” but that’s exactly what consumers are doing ... looking for the path of least resistance so they can have what they want, when they want it, how they want it, at a price they view as being appropriate.

It took less than a week from the time that HBO made its announcement for Cablevision, the very essence of mainstream cable ownership, to announce that it will also offer the service to its internet customers when it becomes available in April.

If customers and programming providers are trying to disintermediate Cablevision, it seems intent on reintermediating itself into the process. (Good luck with that, by the way. I’ve never met anyone who likes their cable provider. Never. Ever.)

And then Apple announced that it plans to offer a TV service later this year that would have a number of traditional broadcast networks and cable networks, but in a smaller package than the hundreds generally offered by the cable companies. The goal is to keep the cost down.

The bet here is that such availability, both to new viewers and people who have memorized every line and seen every episode countless times, can generate significant revenue when made available to cord-cutters.

It is extraordinary to me how fast this is changing.

Ask someone under 20 what “must see TV” is.

They’ll almost certainly look at you with a blank stare.

Because they see things when they feel like it, not when someone else tells them it is on. The balance of power has changed. Forever.

Technology is making it possible for long-term consumption habits to change in fundamental ways… and it would be foolish for any consumer-facing business to assume that this cannot happen in their space.

These changes seem to be happening in a way that gives the consumer more power, not less. The vast majority of what is available on my cable service is stuff I absolutely have no interest in... and these kinds of services are going to allow me to pick and choose what I want, and eventually have all these products available to me on whatever device — TV, iPad, iPod, iPhone, laptop — happens to be closest at hand.

In other words, what I want... how I want it... where I want it... at a price that I think seems appropriate.

In essence, to use a “Seinfeld” phrase in a different context, we all want to be masters of our own domains.

The final and most important lesson. It would be a mistake — even foolhardy — to think that this compulsion won’t impact every part of their consumption experience. n

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

Add to this the report that “Seinfeld,” the iconic sitcom that already has made millions in traditional syndication, may get sold to an online video service for a price of something like a half-million dollars an episode. (There are 180 episodes.)

iStock

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Jay Leno Entertainer

Martha Stewart Founder, Martha Stewart Living Omnimedia

Walter Robb Co-CEO, Whole Foods Market

Phil Lempert the Supermarket Guru

Harold Lloyd Founder, Harold Lloyd Presents

Youngme Moon Author and Professor, Harvard Business School

Arianna Huffington Co-founder & Editor-in-Chief The Huffington Post

Shaquille O’Neal NBA All-Star and Sports Analyst for TNT and NBATV

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PERSPECTIVE

An Update on California’s Unemployment Insurance Program State still owes $877 billion

CH RIS MICHELI

The Employment Development Department (EDD) administers the Unemployment Insurance (UI) program, which is financed by unemployment taxes that employers pay. It is intended to provide temporary financial assistance to unemployed workers who meet certain requirements. The UI fund deficit was $9.9 billion at the end of 2012 and was roughly $10.2 billion at the end of 2013.

In addition, the state must make annual interest payments to the federal government on the loan. During this fiscal year, the annual interest payment exceeds $215 million of General Fund monies. According to the LAO, the federal loan balance is steadily declining and the LAO estimates full repayment to the federal government by 2019. Federal law requires that the interest payment come from state funds.

The UI trust fund has been insolvent since 2009 and California has been in debt to the federal government ever since. Beginning in January 2009, UI benefit payments to unemployed Californians exceeded available funds which required the state to obtain federal loans to continue the payment of UI benefits to recipients without any disruption.

The federal loan balance only began to decrease two years ago as revenues to the UI trust fund finally exceeded the benefits being paid out to recipients. This decrease in the loan balance is primarily due to a decrease in benefits being paid out as the economy has improved and there are fewer unemployed persons in this state, as well as the substantial increase in federal UI taxes being paid by California employers. These federal UI taxes per employee will continue to increase each year until the federal loan is paid back.

The current federal balance is $8.7 billion which is owed by the state and the employer community. Employees do not pay into this fund. As explained by the California Legislative Analyst, for each year that the state carries a federal loan balance, the federal UI quarterly tax payments increase on employers, with those proceeds from these federal UI taxes being used to pay down the principal loan balance.

Legislative Advocate Aprea & Micheli, Inc.

According to a report by the LAO to the Legislature in March, absent structural changes to the financing of the UI Program and benefits payable to recipients, the UI trust fund runs a high risk of becoming insolvent the next time a major recession hits the California economy.

Basically, more money has to be paid into the fund, benefits paid out to unemployed persons have to be reduced, or a combination of the two must occur in order to prop up the UI trust fund.

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

The Administration convened a working group to examine proposals to address problems with the UI fund, but these stakeholder group meetings did not produce any reforms in either the financing or the benefits provisions of the UI program. n

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CAPITOL INSIDER

A Time For Consistency L O UI E B R OW N Partner in the Sacramento office of Kahn, Soares and Conway, LLP.

In 1990, with 52 percent of the vote, Californians passed Proposition 140, which established term limits for State legislators. This limited a legislator to serve three two-year terms in the Assembly and two fouryear terms in the Senate, for a total of 14 years.

Proposition 140 created a boon for campaign consultants because newly elected Assembly Members needed to be on the watch for the opportunity to jump to the Senate in order to maximize their years of service.

There were also a couple examples of Assembly Members turned Senators that returned to the Assembly just because they had time left. It was nothing short of musical chairs.

Even without the jumping from Assembly to Senate, Prop. 140 created a new crop of legislators every six years, which was barely enough time for them to learn anything about policymaking or to focus on statewide issues that demand time and expertise.

Since 1990, there were attempts to revise the term limit law but most were denied by the voters.

However, in June 2012, the voters passed Prop.

28 which amended Prop. 140 with 61 percent of the vote. Voters were convinced Prop. 28 was the right choice because it cut the total time a legislator could serve from 14 to 12 years, but allowed the entire time to be spent in one house.

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

In November 2012, a large class of freshman legislators were elected under the new rules.

If reelected, they could serve until 2024 in the same position.

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In November 2014, the second class of legislators were elected under the new rules. When the 2015-16 Legislative Session commenced more than half of the Legislature had served for two years or less. The final “new� crop of legislators will be elected in November 2016, culminating the transition of the new term limit law. From that point until 2024, nearly all legislative elections will include an incumbent on the ballot.

By the time the next freshman class is elected, the California Legislature will have gone through

another redistricting process, either by the independent voter approved commission or the Legislature (depending on what the Supreme Court decides later this year).

What will we do without the constant turnover and elections? Will our fax machines finally get a rest from the non-stop invitations to shrimp-ona-stick events?

We know elections will continue; they just may not result in new faces in Sacramento. Another certainty is fundraisers will not stop. Legislators will still seek reelection and will need money to do it.

What we can hope for is a time of consistency.

A time where policymakers can learn their trade and be better educated on the intricacies of the issues that drive California. We can hope for less authority being given to regulators and more oversight over the authority granted to them.

We can also hope for legislators being elected with the State of California in mind and not just their political future.

Proposition 140 was passed by those driven to rid the state of the Assembly Speaker Willie Brown and the professional politician. Since that time the State has been hampered with a constant turnover in its decision makers resulting in no clear path forward for the world’s eighth largest economy.

As California nears 50 million people combined with the pressures it creates on infrastructure, education and natural resources, the time has come for some consistency in policy and leadership to get us there. While the effects of Prop. 28 are just now being learned, its impact will be felt for generations. n

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KN O W T HE L AW

Proposed Prop. 65 Regs Equal Less Help and More Hurt (and Litigation) THOUGH ORIGINALLY INTENDED TO WARN THE PUBLIC ABOUT HARMFUL CHEMICALS IN THE PRODUCTS THEY USE, PROPOSITION 65 WARNINGS HAVE BECOME SO UBIQUITOUS THAT THEY ARE LARGELY IGNORED. And, the burdens on grocers from onerous warning requirements and frivolous lawsuits have overshadowed any potential benefits to the public.

Proposition 65 has long been in need of reform.

However, so far, meaningful changes to Prop.

65’s regulations and warning requirements have remained out of reach despite the hard work of the California Grocers Association and others.

The recent proposed changes to Proposition 65’s warning regulations fall well short of meaningful reform, and, instead likely will increase the burden on grocers and the number of frivolous lawsuits filed against them. CGA will be preparing comments on the proposed new warning regulations, which were released on Jan. 12, 2015, by the Office of Environmental Health Hazard Assessment (OEHHA).

The draft regulations have two components. The first creates a website, operated by OEHHA, that will collect information from parties responsible for products containing Proposition 65 listed chemicals, and others regarding potential exposures from these products. The second component is a complete regulations overhaul that dictate what information must be included in a Proposition 65 warning given to the public.

A few of the key problems with the draft regulations for grocers include:

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

1. Grocers will have greater burdens for providing

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Proposition 65 warnings because the draft regulations permit manufacturers to foist that responsibility on grocers without their consent.

Under new Section 25600.2, a manufacturer, packager, importer or distributor can shift responsibility for placement and maintenance of a Proposition 65 warning to a grocer by simply providing the grocer with written notice

that a warning is required, identifying the exact product at issue, and either including all warning materials or offering to provide them.

Such a shift in responsibility and liability for Proposition 65 warnings should never occur without the grocer’s explicit consent to assume that responsibility and liability. Anything less is directly contrary to OEHHA’s stated intent to “minimize the burden on retail sellers of products” under Proposition 65.

2. Grocers will be expected to provide warnings

for products where any reliable source of information indicates that a warning may be necessary. New Section 25600.2 subdivision (d)(5)(c) defines when a grocer has actual knowledge that a particular product requires a Proposition 65 warning, and must provide such a warning.

Actual knowledge is defined to be specific knowledge that the product may cause an exposure that the grocer receives from “any reliable source.” The term “any reliable source” is too broad and vague, as statements in the media or posted on websites could potentially be considered reliable sources, and a grocer would suddenly be required to monitor all information in the media and elsewhere about all of the products it sells or risk being held liable for failing to provide a warning for a product where a “reliable” source provided information suggesting the product may cause an exposure to a Proposition 65 listed chemical.

This new Section should be revised to make clear that the grocer must either receive information from the manufacturer of the product or from a 60 -day Proposition 65 notice before it is deemed to have actual knowledge that a warning is required.

K N O W T H E L AW

3. The time for a grocer to provide a warning

against grocers when they are unable to comply on time.

after receiving a 60-day Proposition 65 notice is so short, retailers may be unable to timely comply and face even more frivolous lawsuits.

Under new Section 25600.2(d)(5)(C), a grocer is deemed to have actual knowledge that a product requires a warning within only two business days after it receives a Proposition 65 notice for that product.

OEHHA could solve this problem by extending the time between receipt of a Proposition 65 notice and when a grocer is deemed to have “actual knowledge” to 90 days after receipt.

That amount of time would enable a grocer the time to post warnings, or pull the product from its shelves.

This means that for products where there is no manufacturer subject to Proposition 65’s requirements or the manufacturer is a foreign person, the grocer must begin providing a warning for that product no later than two business days after it receives a Proposition 65 notice. It is unrealistic and impracticable for a grocer to comply with these warning requirements within two business days. As a result, there will likely be a flood of new lawsuits

4. Grocers may have to provide warnings in

multiple languages with no guidance from OEHHA regarding how to translate the warnings. When combined with new Section 25600.2(d)(5), new Section 25603(d)’s multiple language requirement creates greater burdens for grocers. This is because grocers will be held responsible for warning requirements when a manufacturer is a foreign person.

Continued on p. 18

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

advancing your interests

downeybrand.com

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916.444.1000

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

* 26 years as CGA’s outside general counsel

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K N O W T H E L AW

Continued from p. 17

If the grocer has actual knowledge that the product may expose a consumer to a Proposition 65 listed chemical, and the product label is in multiple languages, the grocer will have to provide warnings in those other languages. This will likely expose grocers to even more lawsuits premised on either a failure to warn in other languages or inadequate warnings in those languages. OEHHA should remove the multiple language requirements from these Draft Regulations until it can provide more complete guidance regarding the contents of foreign language warnings.

OEHHA is aiming for the end of 2015 or early 2016 to issue final regulations. Once final the regulations will become effective in two years.

While the draft regulations, as drafted, will not provide much relief to grocers from the burdens of Proposition 65, some recently introduced pieces of legislation could. Assembly Bill 543 would benefit grocers by reducing the number of failure to warn suits against them. It defines the “knowingly and intentionally” element of Proposition 65 to clarify when a manufacturer or retailer is knowingly and intentionally exposing the public to a Proposition 65 listed chemical.

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Under AB 543, an alleged exposure to a Proposition 65 listed chemical would not be “knowing and intentional” if an exposure assessment has been conducted by a qualified scientist on the product at issue, and the assessment concludes that the alleged exposure is below the levels that would require a Proposition 65 warning.

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Also under AB 543, grocers could rely on exposure assessments performed by manufacturers of products sold in their stores to show that they had no duty to warn. And, grocers could require its manufacturers to conduct an exposure assessment for private label products containing Proposition 65 listed chemicals, preventing suits against grocers for any alleged failure to provide a warning for those products.

Assembly Bill 1252 could benefit small grocers by exempting those businesses from compliance with

Assembly Bill 1252 could benefit small grocers by exempting those businesses from compliance with Proposition 65.

Proposition 65. Under Proposition 65, businesses with 10 or fewer employees are not required to comply with Proposition 65. The bill would expand that exemption to businesses with 25 or fewer employees. Expanding this exemption could benefit many smaller grocers in California currently burdened by Proposition 65 regulations and lawsuits. n Leila Bruderer and Steve Goldberg are attorneys in the Environmental Law Practice at Downey Brand, LLP in Sacramento, California. The focus of their practice is on the areas of environmental compliance and litigation, representing a broad array of clients in matters involving hazardous materials, hazardous waste, contaminated site cleanups, and Proposition 65.

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WASHIN GT O N R EP O RT

Calling All Optimists — Ready For 2016?

I AM A COMMITTED OPTIMIST, BUT I WILL HAVE TO SAY THESE FIRST FEW MONTHS OF 2015 HAVE BEEN A CHALLENGE. A new Congress, a number of new Members of Congress and Senators marching to their own drummer and a President who seems willing or perhaps pushed to go it alone. From the Department of Homeland Security funding drama to Servergate, our democratic systems and those we elect or appoint to run our government have been exposed as less than perfect.

We had lunch with a dynamic, experienced Member of Congress last week who was reflecting on how we could help other talented lawmakers get through the primary election process in 2016. The advice we were given was to tell voters that the Member of Congress is crazy and will not back down. That seemed a bit extreme and not the “Chamber of Congress-esque” message I expected.

My feelings changed after I read an excerpt from “The Surge,” a book about the 2014 elections and how they could impact 2016, by Alan Abramowitz and Larry Sabato from the University of Virginia Center for Politics. A chart caught my eye that focused on polarization.

The Democratic Party has gotten more colorful and more liberal while the Republican Party has lost the little color it had and has lost most of the moderates from 1972 to 2012.

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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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Abramowitz notes that in 1972, Republicans were almost evenly split between moderates and conservatives while today, those who self-designate themselves as conservatives are more than three times more represented than those representing themselves as moderates.

On the Democrat side, in 1972, there were three times as many self-reported Moderate and Conservative Democrats than the number of self-reported liberal Democrats, compared to the 2012 figures that have only 27 percent of Democrat voters designating themselves as moderate or conservative.

This trend translates into more polarized policy and more polarized primaries — and often leads to a

congressional leadership struggling to govern and get something accomplished with a veto proof majority.

The Democratic Party has gotten more colorful and more liberal while the Republican Party has lost the little color it had and has lost most of the moderates from 1972 to 2012.

I am reminded of two important quotes by two influential leaders to give us hope that our democratic system is worth the effort and that we will find a way to develop coalitions to make government work.

Winston Churchill said, “No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except for all those other forms.” Churchill’s comment 2015 LEGISL ATIVE PRIORITIES ISSUES 1. Affordable Care Act — Amend the Full-Time Employee Definition; Eliminate Mandatory AutoEnrollment; Revise the “Cadillac” Tax; Eliminate the Reinsurance Fee; Ease Compliance/Reporting 2. Consistent Breach Notification Standard/Data Security/Privacy 3. Interchange/Swipe Fees (Curb Attempts to Repeal Durbin Amendment) 4. Tax Reform (LIFO, Effective Tax Rates, Corporate/Pass Through Reform) 5. Menu Labeling for menus not “foods on display/self-serve” 6. National FDA-driven voluntary GMO Labeling for Non-GM products 7. Tax Extenders (for 2015) 8. Federal Minimum Wage (No CPI Adjustment) 9. SNAP/WIC (Congressional Review of SNAP and Reauthorization of WIC) 10. COOL (Compliance with WTO)

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

My hope and my optimism say that the voters and those that they elected will feel the heat of the fire before they get to the blister stage. was made during a speech on the floor of the House of Commons after he had helped lead the British to victory in World War II, only to be defeated in his next election in 1945 (ultimately regaining power in 1951).

Another quote that brings home the issue of the need for a thoughtful, engaged electorate came from Abraham Lincoln when he said, “Elections belong to the people. If they decide to turn their back on the fire and they burn their behinds, then they will just have to sit on their blisters.�

My hope and my optimism say that the voters and those that they elected will feel the heat of the fire before they get to the blister stage. Participating in flyin events like Day in Washington enables members of the supermarket industry to share their insights with

iStock

lawmakers, and participation in the legislative process is especially important during these challenging legislative periods and sets the stage for the 2016 Presidential election year.

We have a lot we need to accomplish. n

June 3, 2015 Oakmont Golf Club, Sonoma

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

Gather with independent grocers for a round of golf in the heart of California’s wine country.

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WASHIN GT O N R EP O RT

Reining in the FDA’s Menu Labeling Law To Its Original Intent WHILE THE GROCERY INDUSTRY MADE STRIDES TO EASE THE FDA’S LONG AWAITED MENU LABELING RULE, IT STILL POSES SIGNIFICANT CHALLENGES TO GROCERY STORE OPERATORS. In November of 2014, the U.S. Food and Drug Administration (FDA) released its long awaited menu labeling rule, under the “Nutrition Labeling of Standard Menu Items at Chain Restaurants” provision included in the Affordable Care Act (ACA), mandating that chain restaurants and similar retail food establishments with 20 or more locations list calorie information on its menus and menu boards.

Despite the law’s intent to provide a uniform menu labeling standard for chain restaurants, the FDA expanded the definition of “similar retail food establishments,” capturing grocery stores, and overturning a precedent historically set by food laws that recognize the operational differences between supermarkets and restaurants.

Although the National Grocers Association was encouraged to see a number of our suggested changes reflected in the final rule, such as the exception of independents that are a part of a cooperative or marketing alliance (and below the 20 location threshold), it was disappointing that grocery stores were included at all.

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

Greg Ferrera Vice President Public Affairs National Grocers Association

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Independent supermarket operators are in the business of meeting customer demands and have long been committed to providing our customers with a wide variety of information on products — in fact 95 percent of food items in stores are already labeled. Unlike chain restaurants, many food items in supermarkets are not standardized, and recipes vary by store location and customer demand.

When the law was passed, menu labeling sponsors and advocates cited chain restaurant menus and vending machines — never grocery stores, which were often mentioned as venues where customers can easily find nutritional information.

The FDA menu labeling rules present many compliance questions and creates uncertainty for supermarket operators, and ultimately their consumers.

Initial estimates for compliance costs of menu

labeling for grocery stores exceeding $1 billion, including nutrition analysis of each item, developing corresponding menu boards and signs, store-level training, and recordkeeping.

Fortunately we have been successful in having bipartisan bills introduced in the House and Senate that would essentially codify an exemption for grocers who do not derive a majority of their sales from restaurant type foods.

During the 113th Congress, Representatives Cathy McMorris Rodgers (R-WA) and Loretta Sanchez (D-CA) championed bipartisan legislation, the Commonsense Sense Nutrition Disclosure Act (H.R. 1249), to limit the scope of how the FDA implements the chain restaurant menu labeling for the supermarket industry.

Similarly, a companion bill was introduced in the Senate, the Common Sense Nutrition Disclosure Act of 2013 (S. 1756), by Senators Roy Blunt (R-MO) and Angus King (I-ME).

NGA is proud of the bipartisan support this bill received, and will continue to collaborate with our congressional supporters to see legislation reintroduced in the new Congress and ultimately become law, returning the menu labeling regulations to the original intent of Congress. At the same time we will continue to work with the FDA to provide clarity and work to reduce the regulatory burdens on supermarkets.

While this legislation is just one example of how we can make progress on a bipartisan basis, there will be much work to do in 2015 to educate lawmakers and regulators about the positive impacts our industry has on the American economy. n

The CGA Educational Foundation hosted a one-hour CGA member only webinar on the FDA’s Menu Labeling Rule. To view the webinar, visit www.cgaef.org/industry-education/webinar-archive/

C GA N EWS

Grocers Invade State Capitol Grocery retailers and suppliers from throughout California gathered in Sacramento on April 8, to discuss key industry issues with state legislators and staff during CGA’s Annual Grocers Day at the Capitol.

Carlos Illingworth, Vons (left) with Assemblymember Brian Jones.

(l to r) Carlos Illingworth, Vons; Diana Godfrey, Smart & Final; Sen. Jeff Stone; Brenda Gonzalez, Roplast; Dan Meyer, Stater Bros. Markets.

More than 60 grocers and suppliers participated in this one-day annual event that included face-toface meetings with legislators in the State Capitol.

In addition to their Capitol visits, attendees heard from freshman Assemblymember David Hadley (R-Torrance) and noted political pollster Paul Mitchell.

(l to r) Eric Lindberg, Grocery Outlet; Ron Fong, CGA; Diana Godrey, Smart & Final; Assembly Republican Leader Kristin Olsen; Bob Parriott, Twain Harte Market; Kevin Konkel, Raley’s; Joe Falvey, Unified Grocers, Inc.

“Grocers Day is our industry’s opportunity to talk face to face with state elected officials and discuss the key legislation being considered,” said CGA President/CEO Ron Fong. “This year was particularly important due to the challenging legislation now before both houses.”

To maximize their legislative visits, attendees were separated into small groups and pre-assigned legislators

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

CGA would like to thank the following companies for their generous support of this year’s Grocers Day at the Capitol.

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GOLD LEVEL Albertsons/Safeway Inc. Unified Grocers, Inc.

BREAKFAST Kellogg Company Command Packaging

SILVER LEVEL Anheuser-Busch InBev C&S Wholesale Grocers Gelson’s Markets

LUNCHEON Coca-Cola Refreshements

BRONZE LEVEL Bristol Farms Food 4 Less Stockton/ Rancho San Miguel Markets Fresh & Easy North State Grocery, Inc. Nutricion Fundamental Ralphs Grocery Company/Food 4 Less Save Mart Supermarkets Smart & Final

ICE CREAM SOCIAL Nestle Dreyer’s Ice Cream PRESIDENT’S RECEPTION MillerCoors Roplast Industries Inc.

(l to r) Chelsea Minor, Raley’s; Chris Podesto, Food 4 Less (Stockton); Sen. Cathleen Galgiani; Shawnte Priest, Save Mart Supermarkets; Troy Dinin, Raley’s.

with stores in their district. CGA staff supplied each attendee with talking points and leave behind material on three key pieces of legislation, including: n

AB 359 (Gonzalez) – Grocery Worker Retention

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AB 305 (Gonzalez) – Workers’ Compensation Apportionments

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AB 357 (Chiu) – Employee Scheduling

Following their legislative visits, attendees and legislators were invited to CGA’s annual President’s Reception at the Association’s headquarters, which provided a more casual atmosphere to further discuss industry topics. n

CGA NEWS

CGA Creates Compliance Toolkit DOING BUSINESS IN CALIFORNIA IS GROWING MORE DIFFICULT EACH YEAR. The California Grocers Association is creating a series of California-specific Grocery Compliance Toolkits to help CGA member grocers navigate the myriad of state regulatory requirements directly impacting the grocery industry.

The first toolkit covers the complexities of hazardous waste disposal and will be released at two CGA member only regional seminars in May. The Association has contracted with Environmental Resources Management (ERM), the world’s leading sustainability consultancy, and the Sacramentobased law firm of Downey Brand LLP, to create this comprehensive, user-friendly toolkit for hazardous waste disposal.

Why You Need This Toolkit In recent years, local District Attorneys and the State of California have begun aggressive enforcement of hazardous waste disposal laws in the retail community.

Several high profile, high dollar settlements have led some localities to push for fines as a mechanism to fund ongoing department operations.

“The grocery industry, along with many other retailers, are considered easy targets given the highly complex and technical nature of the myriad requirements,” said CGA President Ron Fong.

“Definitions in the law make it difficult to determine which products are to be considered hazardous waste and therefore be handled separately.”

In addition, well-intended or unintentional consumer and employee behavior can lead to significant enforcement problems for grocers. And the high dollar settlements provide a powerful incentive for enforcement entities to prioritize punishment rather than work with the grocery industry to reach a better level of compliance. Several large retailers, including grocery, have in the last three to four years paid fines in the tens of millions of dollars.

The toolkit includes: n

State law compliance requirements

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Implementation instructions for store level

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Information on enforcement tactics

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Tools to help manage risk and reduce the possibility of enforcement action

The Grocery Compliance Toolkit has been made possible by generous support from the CGA Educational Foundation. n

REGISTER FOR TOOLKIT SEMINAR

Tuesday, May 12, 2015 10:00 AM — 2:00 PM ERM Irvine Office 2875 Michelle Drive Suite 200 Irvine, California 94602

Wednesday, May 13, 2015 10:00 AM — 2:00 PM Downey Brand 621 Capitol Mall, 18th Floor Sacramento, California 95814

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To register, contact Laura Peralta via email at lperalta@cagrocers.com.

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

CGA will conduct two one-day regional seminars to learn from the toolkit creators what your obligations are under law and how to most effectively use the toolkit materials. All participants will receive a copy of the Hazardous Waste Disposal Toolkit. The toolkit and regional seminars are available to CGA member companies only.

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On April 1, CGA Supplier Executive Council members joined Fresh & Easy CEO Jim Keyes and his management team at their Manhattan Beach location for a store tour.

Keyes explained his vision for Fresh & Easy and where he plans the company to be in six to nine months. He shared the innovations that they have implemented and his openness to risk.

These exclusive store tours provide SEC members with an opportunity to learn about how retailers approach operational strategies and obtain insights on customers directly from some of California’s top grocery retail executives. To learn more about becoming an SEC member, contact Sunny Chang at (916) 448 -3545.

New Members CGA WELCOMES THE FOLLOWING MEMBERS. Appriss 10401 Linn Station Rd Louisville, KY 40223-3842 Contact: Henry Sohl, Dir., Risk & Compliance Serivces E-mail: hsohl@appriss.com Tel: (502) 815-5770 Website: www.appriss.com Schur Consumer Products Inc. 2664 Vista Pacific Dr Oceanside, CA 92056 Contact: Johan Schur, COO/Owner E-mail: jsc@schur.com Tel: (760) 722-9382 Website: www.schurice.com

Fresh & Easy CEO Jim Keyes (left) discusses his company’s business model with SEC attendees.

Retailers/Law Enforcement Discuss Prop. 47 Retailers from throughout the Southland met with Los Angeles City and County law enforcement and attorneys on March 4 to discuss how to address issues connected to the implementation of Proposition 47.

CGA organized the meeting at the request of members expressing concern about a noticeable upturn in theft, particularly organized retail crime, since the passage of Proposition 47 last November.

The proposition reduces the classification of most “nonserious and nonviolent property and drug crimes” from a felony to a misdemeanor.

The two-hour meeting focused on building stronger relationships between law enforcement and grocery retailers. Grocery companies representing a crosssection of large and small retailers attended the meeting.

Both law enforcement and grocers emphasized the need for greater collaboration. The meeting confirmed the importance of establishing a strong partnership between retailers and law enforcement agencies in combating Prop. 47 related issues.

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CGA is working with the L.A. City attorney’s office to establish a liaison program between the department and area retailers. n

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

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C GA N EWS

SEC Sponsors Fresh & Easy Store Tour

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Congratulations

We congratulate you on your well-deserved induction into the CGA Educational Foundation Hall of Achievement.

Joseph Gallo E & J Gallo Winery

and Jim and Joyce Raley Teel Raley’s Family of Fine Stores

Thank you for your dedication and important contributions to the grocery industry.

FOUNDATION DINNER CELEBR ATES

The Spirit of the Family Business

IN LATE MARCH, JIM AND JOYCE RALEY TEEL, RALEY’S FAMILY OF FINE STORES, AND JOSEPH E. GALLO, E. & J. GALLO WINERY, TWO CALIFORNIA-BASED FAMILY BUSINESSES WERE INDUCTED INTO THE CGA EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT.

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

More than 700 friends, family and industry peers celebrated the induction of three grocery industry executives into the California Grocers Association Educational Foundation Hall of Achievement on March 26, 2015 in Sacramento, Calif.

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Jim and Joyce Raley Teel, Raley’s Family of Fine Stores, and Joseph E. Gallo, E. & J. Gallo Winery, join a prestigious group of Hall of Achievement recipients who have been recognized for their many contributions to not only the grocery industry, but the communities they serve.

“This year’s inductees are true icons of our industry.

It is with great pleasure that we recognize Jim, Joyce,

Mike Teel, President, Raley’s, with his parents & HOA honorees Jim and Joyce Raley Teel.

F O U N D AT I O N H O N O R S

and Joe, for their lifelong commitment to the grocery industry,” said CGAEF President Ron Fong. “Their stories personify hundreds of similar families, including my own, who experienced the American dream of creating successful businesses through hard work, dedicated service and reliance on the strength of family.”

“It is very gratifying to celebrate the spirit of family business by honoring two California families with deep roots in the Golden State’s grocery industry,” said CGA President Ron Fong.

BBel-Air Markets pharmacist and HOA dinner student speaker Albert Enemuoh.

Led by this year’s event chairs Mike Teel, Raley’s Family of Fine Stores, and Gary Ippolito, E. & J. Gallo Winery, the event raised more than $500,000 — funds that support the Foundation’s college scholarship and tuition reimbursement programs.

“It is very gratifying to celebrate the spirit of family business by honoring two California families with deep roots in the Golden State’s grocery industry,” Fong said.

Continued on p. 36

Casey McQuaid with Herb Smith and Gary Ippolito, E. & J. Gallo Winery, with Mike Teel, Raley’s.

HOA honoree Joseph Gallo accepting his award from CGAEF President Ron Fong.

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

CGAEF Trustee Bruce Frazier and Rachel Zenner, Albertsons/Vons.

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L:R Debby Steele and Michelle Stanley Dr. Pepper Snapple Group.

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honoring your legacies.

Congratulations

Jim Teel Joyce Raley Teel

Joseph Gallo

W E’RE A LL

THE GALLO FAMILY CONGRATULATES JIM AND JOYCE TEEL AND THE RALEY'S FAMILY OF FINE STORES ON THEIR INDUCTION INTO THE CALIFORNIA GROCERS ASSOCIATION EDUCATIONAL FOUNDATION'S HALL OF ACHIEVEMENT

©2015, Ernest & Julio Gallo Winery, Modesto, CA. All rights reserved.

F O U N D AT I O N H O N O R S

C O N TI NU E D

Continued from p. 33

HOA Gold Sponsor MillerCoors Team L:R Brian Martin, Dave Madden, and John Hoyle.

CGAEF Legacy Scholarship Donors Ellyn Gelson and Bill Roulette.

The evening featured an inspiring speech by Raley’s employee Albert Enemuoh, a CGAEF scholarship recipient who shared how the scholarships he received helped him reach his dream of becoming a pharmacist.

After his presentation, guests bid on live auction items and participated in a Fund-A-Need supporting CGAEF’s college scholarship and tuition reimbursement programs. n

CGA President Ron Fong and J.T. Janowski, Student, Cal Poly San Luis Obispo.

CGAEF Board Chair Jim Van Gorkom, NuCal Foods, with wife Judy.

JA M E S E . T E E L , C O - C H A I R E M E R I T U S , B OA R D O F D I R E C T O R S J OYC E R A L E Y T E E L , OW N E R A N D C O - C H A I R E M E R I T U S , B OA R D O F D I R E C T O R S James E. Teel celebrates 65 years of service with Raley’s in 2014. Jim began working for Thomas P. Raley as a bottle sorter while attending McClatchy High School in Sacramento. He continued to work for Raley’s while he earned his bachelor’s degree in Business Administration from Sacramento State College in 1952.

Jim learned the grocery business from the ground up — loading, unloading and driving delivery trucks, as well as working as a Grocery Clerk and Produce Clerk. After college graduation, he worked as an Apprentice Butcher at store level for two years. He was then promoted to Meat Buyer and began working at Raley’s corporate office. While there, he helped set up the company’s central control operation for merchandising and buying, and became the company’s first Personnel Director in 1958.

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

Over the years, Jim became a trusted adviser to owner, Tom Raley, serving as Vice President of Operations and later Chairman of the Board. He now serves as Co-chair Emeritus with his wife, Joyce, whom he married in 1950. He served on the board of the Northern California Grocers Association for 15 years and is a former president of that organization.

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Joyce Raley Teel, daughter of Raley’s founder Thomas P. Raley, is the owner of the company and serves as Co-chair Emeritus with her husband. Joyce grew up working in her father’s stores and officially joined the company in 1985. A strong believer in supporting her community, Joyce co-founded Raley’s Food For Families program, providing food assistance in partnership with food banks. This effort has since raised $31 million and 21 million pounds of food in the communities served by Raley’s stores.

Joyce started the Thomas P. Raley Foundation for family philanthropic endeavors in 1995. In 1998, she established the Joyce Raley Teel Scholarship to assist employees and their family members in their educational pursuits. Joyce also strongly supports the local arts community.

Jim and Joyce have five children. Their son, Mike Teel, serves as President and CEO of Raley’s. Two of their daughters (Laurie Struck and Lisa Davidson) and two sons-in-law sit on Raley’s Board of Directors.

F O U N D AT I O N H O N O R S

J O S E P H G A L L O, E . & J. G A L L O W I N E RY Joseph E. Gallo, is President and Chief Executive Officer of the E. & J. Gallo Winery, the world’s largest family-owned winery. The company has a significant presence in the California wine, brandy and distilled spirits industries with eight wineries and more than 60 brands including table and sparkling wines, dessert wines and distilled spirits.

As President and CEO, Mr. Gallo has focused much of his energy on growing the company and has overseen a number of acquisitions including Barefoot, Louis M. Martini, Mirassou Vineyards, William Hill Estate, Columbia Winery and, most recently, Edna Valley Vineyards. He has also directed the expansion of the company’s import portfolio with entries from nine different countries as well as the introduction of New Amsterdam Gin, New Amsterdam Vodka and Familia Camarena Tequila.

Mr. Gallo joined the winery’s sales department in 1965, and was instrumental in the company gaining national distribution by 1970, applying lessons learned from working alongside his father, Ernest Gallo, and his uncle, Julio Gallo. Prior to becoming CEO in 2001, he focused most of his efforts on the company’s expansion into international markets, overseeing sales, distribution, marketing and operations. Today, Gallo International has various regional headquarters around the world.

In the United States, Mr. Gallo has served on the Board of Directors for the Wine Institute of California since 1972, and the Grocery Manufacturers Association since 2001. Mr. Gallo has served on the Stanford University Graduate School of Business Advisory Council. Stanford University recognized Mr. Gallo with the Stanford Associates Achievement Award.

Born in Modesto, California, March 12, 1941, to Ernest and Amelia Gallo, Mr. Gallo spent his youth working in the family business. He graduated from the University of Notre Dame in 1962, and earned his M.B.A. from the Stanford Business School in 1964. He and his wife, Ofelia, are the parents of three children, Stephanie, Ernest and Joseph and have six grandchildren.

Mr. Gallo and the Gallo family are committed to helping grow wine consumption throughout the world and contributing to the long-term success of the global wine industry.

The Gallo family considers family ownership its greatest asset and believes that the benefits of private ownership enable long-term business sustainability through investment back into physical assets, brand building, vineyard research and continued long-term relationships with winery employees, growers, distributors, retailers and customers.

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

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CGAEF Executive Director Shiloh London interviews Jim and Joyce Raley Teel during the dinner program. Also joining the conversation was Raley’s President & CEO Michael Teel.

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

Congratulations to Jim & Joyce Teel of Raley’s Family of Fine Stores, and Joseph Gallo on behalf of E. & J. Gallo Winery on their induction into the California Grocers Association Educational Foundation Hall of Achievement. Their dedication to the grocery industry and the community is truly outstanding!

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Congratulations to Jim and Joyce Raley Teel

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We’re proud to be a trusted advisor to Raley’s and more than 1,100 food, beverage, grocery, and retail companies nationwide. How can we help you make an impact?

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

Both individually and through their leadership of Raley’s Family of Fine Stores, these two outstanding individuals have made a difference to the California food industry and the quality of life across our state.

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MEM B ER P R O FILE

G&G Supermarkets: Generations in the Making WALK INTO A G&G SUPERMARKETS LOCATION ON ANY GIVEN DAY AND YOU’LL SEE SECOND AND THIRD GENERATION CUSTOMERS WHO LITERALLY GREW UP SHOPPING THE AISLES. Finding generations of shoppers in a G&G Supermarket in itself isn’t unusual. What is remarkable is that you’re likely to find third generation members of the Gong family taking care of them. And a fourth generation might be waiting in the wings.

“My father and mother, Gee Kai and Fong and my brother-in-law Robert, started the business in 1963 and my brothers and sisters and I have worked in it most of our lives,” said Dick Gong, co-owner of G&G Supermarkets. “It wasn’t long after my dad opened the first store in Stockton that we started working behind the scenes doing things like sweeping up and putting away bottles. As we got older we just moved into other jobs like stocking and ordering.”

Gong loves the grocery industry and the thought of ever leaving it rarely if ever crosssed his mind.

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“It sometimes occurred to me,” Gong says about finding a new career, “But this industry’s been great.

I’ve always loved the one-on-one relationships I have with people in the community. I just couldn’t take sitting behind a desk all day.”

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Having a more flexible schedule gives him time to pursue one of his long time passions — gardening.

“It’s a wonderful feeling being in tune with nature.

Besides, the plants don’t talk back,” he mused.

Gong and his wife Vivian, who also spends free time enjoying Santa Rosa’s numerous parks and community activities, have two children. Melissa, who has three children of her own, is the health and safety coordinator for the two G&G stores.

“We’re fortunate she’s involved in the business,” Gong says. His son Jason works fulltime at the Petaluma store and has three children of his own.

With a grand total of six grandchildren so far, will any be involved in the business?

“It’s too early to tell,” Gong says. “I expect a couple of them will become involved after college. But we don’t want to push them. In fact, it’s probably better to have them start out somewhere else for a couple of years.

Then, they’ll be able to make a better decision about what they want to pursue.”

MEMBER PROFILE

Meanwhile, G&G has been fortunate enough to have an abundance of family to take the reins. Among them is Gong’s brother Lee, who is in charge of deli and bakery, while Don handles wine and DSD vendors.

His brother-in-law’s son TJ is in the business, along with siblings Carol, Connie, Jodie, and Lee’s son Devin. Gong’s sister Betty, who recently passed away, headed up customer service initiatives and human resources.

The stores have come a long way since 1963 when the first 7,200 square-foot store opened in Santa Rosa.

Prior to that, Gong’s father, Gee Kai, worked for Centro Marts, a now defunct local chain in the Central Valley.

His uncle Robert, one of the founders of G&G, worked for an independent near Santa Rosa, Calif.

The new store was a success and eventually was replaced with a 25,000 square-foot unit. In 1981, G&G opened a second replacement store in Santa Rosa — an 80,000 square-foot store, which remains its flagship.

“We also try to be aggressive by bringing in the latest product trends for our customers by being on top of trends before they are,” adds Gong.

In 2000, the company expanded outside its borders, opening a second unit about 20 miles away in Petaluma.

“We grew up with the city and during that time developed a lot of strong relationships because of our support of the community and its various programs,” Dick Gong says.

“As our older customers retired, their children started shopping with us,” he says. “Now their children are coming in and they have different needs than their parents and grandparents,” noting that stores have remained strong in meat, deli, bakery and produce over the years by having the freshest and most indemand items like free-range chickens, grass-fed beef and local dairy products along with a large selection of other natural, organic and gluten-free products.

“Business has been good in both stores but a difficult economy has limited expansion,” Gong admits. “We have our hands full. But you never know what will happen if an opportunity presents itself.”

“Many consumers today are more sophisticated then their predecessors — especially the younger millennial shoppers,” Gong says, “Five years ago, customers in the meat department would ask how to cook an item. They weren’t as savvy as years past when mothers taught daughters how to cook.”

Meanwhile, Gong believes G&G’s strength lies in its longevity and associates.

“This is a trend that won’t go away soon and it’s helping a lot of stores boost their volume,” Gong says.

“Our associates, past, present and future have made us what we are today,” he says “We would not be where we are today. They have helped toward the success and goals that we have accomplished.”

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Inside the store, success meant giving customers great value from Day One. This enhanced G&G’s reputation for having “The best meat in town” — a reputation it enjoys to this day and attracts customers from all over the county.

Gong believes the growth of television cooking shows has created more interest among younger people who don’t want to eat out all the time or simply can’t afford the luxury.

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“We grew up with the city and during that time developed a lot of strong relationships because of our support of the community and its various programs,” he says.

But change is a constant.

Continued on p. 42

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MEMBER PROFILE

Continued from p. 41

But it’s a moving target, according to the company co-owner.

“You need to keep on top of trends and if you blink you can miss an important one,” Gong warns.

“These changes also mean that what was hot yesterday may not be as important down the road.

For example, carbonated beverages have declined a bit from where they once were and you see water category growing. Now take organic and gluten-free products that have been big buzzwords for quite a while, shows no signs of fading.”

Gong says that one consistent trend is that customer lifestyles are on the go.

“It doesn’t matter who or where you are, our job is to get consumers in the store, get their baskets loaded and get them out and on their way as quickly as possible so they can pick up their kids at soccer practice and get dinner ready at home,” Gong says.

“Prepared foods certainly come into the picture, but people still like to prepare things themselves and it’s our job to help them do that.”

And the stores are doing just that.

G&G’s Petaluma store has 55,000 square feet of selling space and contains virtually every department and new item that customers could want.

“In today’s market small is big,” he says. “Store size is simply not as important as it was in the past.

Petaluma is very tuned in to today’s marketplace.

There is some room for expansion inside the store and

new departments but people like the idea that they can get in and out more quickly than in other stores.”

While Gong and his staff take pride in their attention to customers and the market, he also credits wholesalers like Unified Grocers, Inc. and Tony’s Fine Foods for keeping the stores on track.

“In today’s market small is big,” Gong says.

“Store size is simply not as important as it was in the past. Petaluma is very tuned in to today’s marketplace.”

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“They are playing an increasingly important role,” Gong says. “I believe that independents are only as strong as their wholesalers and vendors.”

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Speaking of his California Grocers Association membership, Gong says he is increasingly dependent on its government relations component. He also cites the CGA’s newly formed Independent Operator Committee as a valuable resource. This resulted from the recent merger of CGA and CIGA (California Independent Grocers Association).

“There’s a tremendous amount of legislative activity going on and it’s difficult for a smaller operator to deal with it on his own,” he says. “CGA keeps us in the loop on everything that’s going on and we make out better as a group.” n

DRIVING THE DINING TREND

BY LEN LE W IS

DRIVING THE DINING TREND

HERE’S A RIDDLE FOR YOU! WHAT HA S FOUR WHEELS, COMES IN DIFFERENT FL AVORS AND STRIKES FE AR INTO THE HE ART S OF RESTAUR ATEUR S AND IS E VEN M AKING SOME

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GROCERS A LIT TLE NERVOUS?

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The answer — food trucks. Or, at least the latest iteration of them that are becoming increasingly popular in urban and suburban locales for their upscale and modern take on a wide variety of ethnic cuisines and low prices, enabling them to bridge the gap between retail and restaurants.

“They’ve had a huge impact on the culinary scene,” said Scott Allmendinger, director of consulting for the Culinary Institute of America, Hyde Park, NY. “They’re part of the extreme casualization of foodservice, an economy where people want an authentic experience at the lowest possible price, and

a sense of adventure. So the trucks have tapped into a kind of perfect storm.”

Basically this is an industry that’s come a long way from the roadside “roach coaches,” dirty water hot dogs and mystery meat sandwiches.

Allmendinger and other industry observers agree that the new generation of trucks are preparing some of the most creative and freshest fare in foodservice and supplanting some fast feeders as a top meal choice.

And California has emerged as the epicenter of this movement which has attracted chefs from all over the world and is seen as a viable business alternative

DRIVING THE DINING TREND

to brick and mortar restaurants as real estate costs continue to escalate.

Colicchio who has rolled out Wichcraft Sandwich carts in San Francisco and Las Vegas.

Mobile dining is not really a new phenomenon. The earliest record of them in the U.S. was the horsedrawn tamale carriages of the late 1800s. They are also considered an outgrowth of the farmers markets that began springing up in the late 1970s and the loncheras that have been a common sight in Mexican-American neighborhoods for decades.

These kitchens on wheels, often owned by people with culinary backgrounds, have also moved outside traditional venues like construction sites onto city and suburban streets.

These kitchens on wheels, often owned by people with culinary backgrounds, have also moved outside traditional venues like construction sites onto city and suburban streets.

Today, the National Restaurant Association calls food trucks one of the fast-growing segments in foodservice and estimated that sales for 2014 were about $700 million or one percent of all restaurant sales.

This may be an understatement, according to IBISWorld research which found that street food is already a $1 billion industry. Some sources estimate that sales could increase to $2.7 billion over the next several of years.

Continued on p. 46

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Street food and trucks have inspired street food festivals across the country, cooking competitions and reality television shows, and its fans include such celebrity chefs as Martha Stewart, Anthony Bourdain, Marcus Samuelsson and TV’s Top Chef host Tom

“Los Angeles County has 88 different cities and there was a lot of confusion over regulations from cityto-city,” said Matt Geller, ceo, Southern California Mobile Food Vendors Association. “When I first met with food truck operators, they all told me terrible stories about trying to be a small business and being smacked down by various regulatory bodies. That’s when we started the association.”

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But they have really come into their own in the last few years as the center of culinary creativity, attracting hordes of multi-generational customers — particularly millennials. In effect, street food has democratized ethnic cuisine — becoming part of the cultural fabric of the U.S. and it is changing how and what people eat.

This mobility is one of the reasons for the concept’s success. But it has also made food trucks victims of their own success in counties and municipalities with outdated health regulations or laws designed to protect restaurant operators.

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Continued from p. 45

everything from Vietnamese sandwiches and Brazilian barbecue to cupcakes.

Another high flyer in this segment is The Grilled Cheese Truck which offers everything from the traditional to specialties like goat cheese and brie melts with additions like applewood bacon or smoked turkey, to sweet dessert melts containing Nutella or candied walnuts. The truck’s website has a monthly calendar showing events and locations.

Kogi and other upscale food trucks are actually creating meals for non-traditional day parts.

“It’s about in-between meals — grab-and-go fuel, not your traditional lunch or dinner portion size and tends to be intense in flavor,” Allmendinger said.

The food truck phenomenon was also the subject of a joint study by the University of Michigan and Northwestern University, which found that there are more than 4,000 food trucks in cities with populations of 100,000 or more.

Since virtually all of these trucks have an online presence, the survey was based on Twitter feeds.

In a breakdown by city in California, it was found that 366 food trucks are now operating in Los Angeles; Irvine, 93; San Jose, 93; Fullerton, 90; Santa Ana, 90; Huntington Beach, 89; Oakland, 86; Fremont, 77; Berkeley, 74; Santa Clara, 74; Concord, 73; Hayward, 73; Sunnyvale, 73; Richmond, 71; Santa Rosa, 69; Fairfield, 67; Daly City, 66; San Diego, 66; Vallejo, 66; Long Beach, 31: Sacramento, 21; and Burbank, 8.

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The growth of food trucks is what researchers see as a prime example of “the new authenticity economy” — a trend that favors unique, eclectic, local and artisanal products and has turned downtown L.A. into a Mecca for foodies.

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“What we’re seeing is a confluence of exciting global cuisines,” said Allmendinger. “It’s what some call smash cuisine or fusion. I call it adventure-gourmetcasual. It started to get popular in L.A. with chef Roy Choi’s Kogi barbecue taco trucks that fuse Korean and Latin cuisine.”

The operation has been so successful that it is expanding into sit-down restaurants and has inspired legions of other food truck operators serving

Food trucks are riding the crest of this wave, he adds, but some brick and mortar establishments, seeing their success are also trying to tap into the nontraditional meal segment.

The so called legacy brands, or the restaurant chains, are trying to capitalize on the trend and companies like Taco Bell and Pizza Hut have rolled out their own trucks. But it remains the purview of independent entrepreneurs with a dedication to quality and a mission to serve local, sustainable and authentic foods.

The so called legacy brands, or the restaurant chains, are trying to capitalize on the trend and companies like Taco Bell and Pizza Hut have rolled out their own trucks.

“The brands are trying to figure out how to capitalize on it,” he said. “They will fail if they just package the usual brick and mortar brands into something mobile. It’s not just about mobility, it’s about authenticity.”

The next iteration now emerging is food bikes, according to Allmendinger.

“They are even more mobile and lower priced then the trucks,” he said. “They’ll be able to penetrate some of the more densely populated urban areas that don’t have the parking to support a bigger vehicle.”

Continued on p. 48

DRIVING THE DINING TREND

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Continued from p. 46

Meanwhile, the popularity of the trucks is helping change some of the onerous regulations that held back their growth in the past.

The first is the so-called “100 -foot rule” which prevented food trucks from parking within 100 feet of a restaurant. Los Angeles stopped enforcing it in 1979 when a court ruled that it was restraint of trade and, therefore, unconstitutional. However, it wasn’t pulled off the books until 2002, Geller said.

Santa Monica had been enforcing a time limit regulation disguised as a public safety issue.

“Santa Monica gave one of our members a ticket and we challenged it,” he said. “Then Glendale, Monrovia and Burbank passed similar legislation. They really weren’t in the interest of public safety. They were clearly restaurant protectionist laws. We sued them and 12 other cities. That got their attention.”

Geller said there hasn’t been a lawsuit in a long time.

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“Rather we’re focusing on helping cities come up with reasonable regulations that protect public safety and health while giving consumers great choices,” he said. “We’re food truck advocates first, but being a consumer advocate is running a close second.

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The association’s lobbying efforts to push back on government over-reach have been very effective. “I think we changed the laws in 28 cities and helped to open up Riverside, San Bernardino and L.A. counties to food trucks,” he said.

At the same time, municipalities are starting to roll out grading systems for food trucks.

“The government can make huge strides in fixing the perception of food trucks as roach coaches,” Geller said. “California launched the grading ordinance for restaurants in 1997 and rolled it out for food trucks in 2011. We are very much in favor of it. People saw the trucks with a big blue “A” — the same one they’d seen on restaurants.

He said the grading ordinance alleviated consumer concerns about health of the food prepared in the vehicle. And when it was rolled out in L.A. a larger percentage of food trucks got the “A” rating than restaurants,” said Geller. n Len Lewis is editorial director of Lewis Communications, Inc., a New York-based editorial planning, research and consulting firm. He is a contributor to several retail publications and trade groups in the U.S. and Europe and has been a speaker and moderator at numerous industry events. He can be reached at lenlewis@optonline.net or via his website www. lenlewiscommunications.com

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S TA R T Y O U R E N G I N E

BY C ASSANDR A PY E

ATTENTION STORE MANAGER

Start Your Engine…

iStock

ERICA NOCITA IS A DISTRICT MANAGER’S DREAM: SMART, GREAT PEOPLE SKILLS, A SOLID TEAM PLAYER AND LEADER AND FOCUSED ATTENTION TO DETAIL. “We’re right around number five in sales right now,” says Erica, general manager for Fresh & Easy’s store No. 5 in Alhambra. “I want to be number two; our number one store is going to be tough to beat. What’s the point of doing it — driving sales — if you’re not going to win?”

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Good question.

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Of course, in Erica’s case driving is the operative word. You see, Erica Nocita is an award-winning drag racer. Her district manager was shocked to learn the news. “You wouldn’t look at me and know I race cars.

I look like a typical Southern California girl. But it would make sense if you got to know me. I’m pretty competitive.”

She’s also pretty tough. Drag racing is an acceleration competition between two cars. They begin at a standstill and then race — in a straight line — down a quarter mile track. Regardless of the size or power of the car, they all race the same distance and on the same track.

Drivers are matched by class and compete against each other in rounds to determine a winner. Erica has raced her share of men, and a few women, and she’s had two national wins enroute to becoming Eastern Champion in the National Hot Rod Association (NHRA) Sport Compact Quick 16, in 2006.

Al Nocita, Erica’s dad, raced motorcycles off-road for much of his life. Most of his contests were in the desert and, when he and wife Debbie started their family, he kept right on racing.

“My children were driving ATVs when they were three- or four-years old,” says Al. “They were driving our retired race cars before they were 10 so that, by

S TA R T Y O U R E N G I N E

the time they were 16, they had been driving for more than eight or 10 years. The kids learned to steer and drift in tough driving conditions so they grew up with excellent throttle and steering control.”

Erica says her dad wanted sons but wound up with three girls. She recalls riding dirt bikes and buggies and says that at age 16, when Al gave the girls a choice of driving schools, she chose the Frank Holly Drag Racing School, in Pomona, Calif. “First hit of a throttle in a dragster and she was just done. It scared her to death, but I could see it in her eyes,” Al recalled.

“I fell in love,” says Erica.

As fate would have it, Al was given a new car to drive as part of a racing deal, in 2003, leaving him with a spare racer.

“That red car is an intense car to drive,” Al says.

“You’re sitting in the back seat, it puts out 1,000 horse power… you pull three Gs when you let the throttle go. Then you’ve got to stop, parachutes out and all — there’s a lot going on.”

My hope and my optimism say that the voters and those that they elected will feel the heat of the fire before they get to the blister stage.

He turned over the keys to his Chevy Nova (pictured) to Erica and her father never got into that red car again.

And, Erica? She very quickly earned the title “fastest girl in Irwindale. “

“I would say this even if she wasn’t my daughter,” Al declares. “Erica is probably the most gifted driver I’ve ever worked with. She adjusted and learned the trade so quickly and so professionally — it was just effortless for her.”

This was just about the time — now late 2004 — that General Motors launched its Chevy Cobalt Phase 5 on the West Coast and seeking a female driver to help promote the car. As a sponsored driver, fees, technical support travel and other expenses are covered. Erica signed with GM on her 21st birthday.

“To go racing is really cool, to do it on someone else’s dime was even better,” she says. “I was in college at the time, so it was a really busy time — with trade shows, travel and races. Women in my age group were starting to get into racing in greater numbers, it was an affordable car and I was a great ambassador.”

Al adds, “GM loved her. She was articulate and easy to get along with. They knew she was a good driver but one of the things the GM Vice President said to me is ‘your young lady knows how to relate to people, she presents herself well and she’s engaging and courteous.’”

Continued on p. 52

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Erica was hired by the Arcadia Fresh & Easy to serve samples at their “Kitchen Table” in 2009. She moved

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Then, he proudly states, “I see many of those same traits in her, here in the store, when she’s dealing with customers. She’s a tremendous leader, a great team player and she’s successful now because she’s a leader to her pit team in the store.”

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Continued from p. 51

very quickly up the food chain — becoming a load thrower, moving to the register and then promoted to team leader — all in a little over one year. She transferred to F&E’s Rosemead store in 2011 and was promoted to assistant manager, almost immediately.

After a brief stint in the marketing department at headquarters, she moved to the Pasadena store and then onto Alhambra, where she’s been the general manager since mid-March. Erica calls the job both “intimidating and exciting” and says she “flourishes” under the pressure. That’s to be expected from a woman who can take a dragster from zero to 125 miles per hour (mph) in five seconds.

“This is a company that’s changing rapidly,” she says.

“In drag racing, there’s no extra lap — you have five seconds and you can’t get them back. You have to be incredibly focused in this job because they throw a million things at you at Fresh & Easy and you get one shot to execute.”

That, she says, is drag racing to a tee.

There’s also an element of teamwork in drag racing which Al, especially, believes his daughter masters.

“There are lots of people to relate to when you’re racing, hundreds of people all around who want your attention,” he states. “And, there’s mechanics and PR people and technicians. Erica is the glue for our teams and it’s the same thing in the store.”

Erica admits there are similarities, too.

“I’m a huge team person. Even though there is only one person in the car, you don’t move without your

team. Realizing that — that you’re nothing without your team — helps me to be successful.”

“I’m always open to learning new things,” she says.

“What’s great about the car world is there are always the ‘old guys’ around who are willing to share advice.

I listen to them and focus on the fundamentals and I’m never going to get too big for my britches. Racing hones my skills. I never go into a race thinking ‘I got this’ — a lot of people have put a lot into me and I don’t take that for granted.”

When I spoke with Al Nocita, it was the Thursday before St. Patrick’s Day and he and Debbie were making their weekly shop at the Alhambra Fresh & Easy store. Erica was busy with the corned beef, beer and other displays while the proud papa couldn’t stop talking about his daughter’s success on the racetrack: numerous wins at Summit races, two “Wally” trophies (national trophies named for Wally Parks, NHRA founder), a national championship.

“I’m a huge team person. Even though there is only one person in the car, you don’t move without your team.”

Then, he also quickly made the tie between her success on the track and her success with her store and — without realizing it — took a little credit for himself.

“I’m a nut and so meticulous when it comes to cars — I go over every nut and bolt and make my kids do the same thing on their cars,” Al says. “Erica keeps her store the same way I keep my cars. Her attention to detail, she transfers to her stores. They’re neat and clean. She doesn’t miss a thing.”

Jonathan Barragan, a colleague and marketing associate at Fresh & Easy, said he knew she was a drag racer and was genuinely impressed with how well she was able to equally distribute her time to work, friends, family and her racing life. But, clearly, he says, her passion is all about people.

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Her colleagues at headquarters were more than excited to have California Grocer share Erica’s story, although its uncertain if anyone there knows about the Chevy tattoo on her back.

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Continued on p. 54

The greater retailer and supplier community wishes to

honor the memory and significance of

MR. BOB PICCININI He will be remembered for his innumerable offerings to his community, customers, employees, suppliers and friends.

His smile will continue to be seen through his employees.

Here’s to you, Bob! Cheers

©2015 MILLERCOORS LLC, CHICAGO, ILLINOIS

S TA R T Y O U R E N G I N E

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Continued from p. 52

“The most noticeable strengths are her intensity, focus, and her passion for our company and its employees,” Barragan says. “I can clearly remember regular conversations with her regarding the company and its direction and every time she would always have the store employees in mind.”

Her dedication to her “day job” has left little time for racing in the last six months, but Erica still has her cars and expects to get back on the courses at Irwindale and Fontana this summer and back to her winning ways.

“Overall, I’ve never seen anybody who’s got a ‘need for speed’ like my daughter,” boasts Al. “The tougher the situation, the more pressure, the better she is.

There are lots of good drivers out there, lots of great drivers — but champions are the ones who can take the pressure.”

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Is she ever afraid?

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“I remember words my dad told me more than once,” she says, turning serious. “If you don’t have nerves or some sort of respect for what you’re doing, you shouldn’t be in the car. I get jitters but I’m aware of what I’m doing and I know I should stay focused.”

Erica brings that same respect for and awareness to her role in the store: “I’m really big on the fact that every day you walk into a different fire to put out — remerchandising, holidays, new products. There are a bunch of different elements and I’m a team player who really enjoys the big team atmosphere here.”

Look out, Fresh & Easy store numbers three and four: Erica Nocita is on the track and she’s revving her engine. n Cassandra Walker Pye is CEO of 3.14 Communications, LLC a strategic communications consultancy, based in Sacramento - with more than 30 years of experience as an advocate for business and for the food industry. She is former VP of Government Relations for the California Grocers Association and served, early in her career, as State Relations Manager for the Food Marketing Institute.

BIMBO BAKERIES USA

THANKS WILLIE CROCKER, FOR HIS DEDICATION IN 2014 AS OUR ILLUMINATOR HEADLITE.

&

WELCOMES JIM FRENCH,

OUR INCOMING HEADLITE AS HE CONTINUES TO “SPREAD THE LITE OF GOOD FELLOWSHIP” IN 2015.

BimboBakeriesUSA.com

©2014 Bimbo Bakeries USA, Inc. All rights reserved.

YOUR CO-SALES FAMILY IN NORTHERN CA, SOUTHERN CA, NORTHWEST AND INTERMOUNTAIN ARE ALL VERY PROUD OF YOU. CONGRATULATIONS ON ATTAINING THIS HIGHEST HONOR WITH THE ILLUMINATORS. YOUR LIGHT ALWAYS SHINES BRIGHTLY AT CO-SALES AND ON EVERYONE WHO IS AROUND YOU!

FOR JIM FRENCH, LIFE IS SIMPLY A MATTER OF BALANCE — MAINTAINING THE BALANCE BETWEEN A PROFESSIONAL CAREER AND FAMILY LIFE. “It’s never easy but it is important to have that balance,” says the incoming 87th Illuminator Headlite. “I think the younger generations are figuring that out and are making good choices on what is important in life.”

That philosophy differs greatly from when French first entered the workforce.

“When I was young I did everything I could to get ahead including working weekends and putting in 70 to 80 hour weeks at the expense of my family,” he recalls. “Today you have to allow for flexibility. I have found that my team is much more productive by having that flexibility. Let’s face it, it’s no longer a standard 8 to 5 job these days.”

“This is a crazy fun and challenging business and I’ve been privileged to be a part of it. There are not many careers like the retail industry where you have business relationships like this industry does ,” said French.

French is president and CEO of Co-Sales Northern California and this May will be elected Headlite of The Illuminators, the supplier organization’s top leadership position.

“To become the 87th Illuminator Headlite is quite an honor,” French says. “I look forward to leading this organization in the positive direction set by my predecessors.”

French is the first food broker to be named Illuminator Headlite, a fact he was unaware of for some time. “Imagine how humbling and special that is for a guy that’s been a broker almost his whole career,” he says.

“It was one of the best retailers I’ve had the privilege to have worked for and a great training ground,” he recalls. “Longs was a family-owned organization and I still remember walking the aisles at the Walnut Creek store with Tom Long himself,” he says. “Little did I

know what a big impact Longs would have on me and my work ethic.”

While at Longs, French met his best friend and wife, Alane. They have two daughters, two sons-in-law and three grandkids to date.

“I will never get tired of being called Papa!” French exclaims. “I am truly a blessed man to have this family.”

French was eventually recruited out of Longs by a food broker, J.J. Morris. Years later J.J. Morris eventually became Advantage Sales and Marketing.

He was promoted to Group Vice President and moved to Southern California. Two and a half years later, Jim and Alane found out they were going to be grandparents and knew they had to return to Northern California.

“I sent a picture of me holding my grandson Kyle to the trade letting everyone know why I had to move back home to Northern California,” he says. “Family comes first.”

Joe DeCredico, owner of DeCredico and Assoc., found out Jim was coming back and asked him to head up

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For French his professional journey started more than 36 years ago when he was with Longs Drugs, which is now owned and operated by CVS Pharmacy.

T HE ILLUM IN ATORS

New Illuminators Headlite: Jim French

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Continued from p. 57

a new sales team calling on Safeway, as Safeway was centralizing at the time. It was then, in 2002, that he became aware of The Illuminators.

“I went to both the WAFC and to the CGA conventions that year and was amazed at how many manufacturers and retailers attended,” he recalls. “I started seeing first hand and hearing about the Illuminators and knew I needed to be a part of this organization. I signed up and have not looked back since.”

French says it wasn’t long after joining the organization that its leadership began asking him to engage in committee work.

“Many manufacturers were participating and it was a perfect match for me as a broker,” he says.

“Another bonus was getting to know & meet upper management from various retailers.”

In 2006, Joe DeCredico decided to retire and French became president of Co-Sales , formerly DeCredico and Assoc., Northern California. Even though he had new responsibilities he stayed committed to The Illuminators.

In 2009, French got a call from Vic Chiono, a past Headlite , asking if he’d like to become a Hilite, the Illuminator title for a Board member. He said yes and for the next three years learned even more about the organization and its benefits.

Then, in 2012 he received what he says was the “ultimate endorsement” when he was asked to go through the chairs for the Illuminators. “It was a huge honor,” he recalls.

retailers by providing educational and leadership opportunities. It is dedicated to the success of the CGA Strategic Conference and the Western Association of Food Chains convention.

“The Illuminators have a strong relationship with both retailers and manufacturers by being the support for the WAFC and CGA,” he says. “It has been a great partnership.”

“To become the 87th Illuminator Headlite is quite an honor,” French says. “I look forward to leading this organization in the positive direction set by my predecessors.”

Asked about his goals as Headlite, French said his top priority is clarity on what it is to be an Illuminator and the future benefits that can be provided.

“I want to make sure that we are transparent on what the expectations/opportunities are with being an Illuminator, Hilite and also going through the chairs of Tailite, Spotlite, Sidelite and Headlite,” he says. “It is work, but the rewards are tenfold! “ And, according to French, being an Illuminator is “a lot of fun too.”

“We want to attract the next generation of food industry professionals as they will be the leaders of tomorrow for the Illuminators,” he says. “Clarity is about getting a clear message across to everyone on who the Illuminators are and the expectations. Like our mission statement says: We truly want to be

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Going forward, French is of one mind with his predecessors in that the organization’s main focus must be to remain relevant.

58

“When you look at all the challenges facing the industry — like consolidation and competition from outside the traditional supermarket segment — there’s never been a better time to be part of an organization like The Illuminators,” he says. “With the many new faces in management these days the opportunity is now. There is not a better tool for a person’s career then the Illuminators.”

The organization was created in 1928 by a group of allied tradesmen wanting to enhance relationships between grocery vendors and suppliers and

CGA Chair Joe Falvey, Unified Grocers, Inc.; and Jim French teamed up during The Illuminators Special Event.

Continued on p. 60

T H E I L L U M I N AT O R S

Continued from p. 58

Providing meal functions during the CGA Strategic Conference is an Illuminator tradition.

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the most admired grocery industry organization of vendors and suppliers in America.”

60

French says the industry needs to show the younger generations the opportunities not only for today but for the future as well.

“To be part of an organization that gives out scholarships to those in our industry is truly giving back,” French says. “Each year we are able to send three Hilites to the University of Southern California Marshall Food Industry Executive Program.

“They are our future and the key is to show them the light at the end of the tunnel,” French says. “Too many companies aren’t doing that and thus high turnover is the result. That’s unfortunate because they have so much to offer in terms of how they look at the world.

“I am very proud that as an employer of Co-Sales we have a couple employees that have already gone through the program,” he says. “I feel that’s important to our company’s future. It also sends the right message to our employees that we are serious about their future.”

“To lose that because you did not have the right message is a costly mistake. We need the perspectives of the new generations to expand opportunities and membership in the Illuminator organization,” he added.

French says he’s fortunate to be a part of an organization with a strong scholarship program.

Looking forward, French says The Illuminators wants to expand its scholarship program by adding more events and growing membership. In August, The Illuminators are considering adding more venues for networking dinners and rallies. This August, it will partner with the Frozen & Refrigerated Food Council of Southern California on an event.

At the end of the day it all comes down to giving out scholarships, according to French.

“To have the ability to give out scholarships every year is a testament to our strength,” he says. He credits his Headlite predecessors for creating the organization’s scholarship program.

In closing French reiterated that the Illuminators are made up of over 250 volunteers.

“These are incredible people who all have day jobs,” he says. “It is a fraternity that I love. I have met so many great people and many of them will be my friends and family outside of the industry. And that to French is priceless.” n

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AS CALIFORNIA GOES…

C G A G OVE R NM E NT R EL AT I O N S

AS CALIFORNIA GOES...

CALIFORNIA IS OFTEN THE BELLWETHER FOR EMERGING POLICIES AND POLITICAL TRENDS ACROSS THE COUNTRY. ORGANIZED LABOR GROUPS IN PARTICULAR FLOAT LEGISLATIVE IDEAS IN HOPES OF IMPLEMENTING A STATE-BY-STATE POLICY STRATEGY.

Often using the “take a sledgehammer to a nail” approach, the grocery industry has seen laborbacked policy attempts to further increase the state’s minimum wage, successor employer retention attempts, property wage lines, medical cost shifting to private employers and now predictive scheduling mandates for private employers.

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Political Trends: Minimum Wage/ Predicative Scheduling

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Minimum wage increases has been a cornerstone for organized labor. National labor campaigns such as the “Fight for 15” advocates a national minimum wage increase to no less than $15 per hour.

There have been targeted attacks by labor on a national scale specifically aimed at fast food retailers nationwide in the form of protests, strikes, sick outs and other tactics to draw attention to the issues.

Several other grassroots movements have popped up across California promoting local governments to take action.

Assembly Speaker Toni Atkins (D-San Diego), has encouraged local governments to take this issue into their own hands. In a statement Atkins said, “The State Legislature passed a higher minimum wage, but regional increases make sense in places with higher costs of living.”

In San Francisco, voters last November approved Proposition J, raising the minimum wage to $15 per hour by the year 2018. Increases began in 2015 with $11.05 per hour — various increases will continue through 2018. Moreover annual increases to San Francisco’s minimum wage will be tied to the state’s Consumer Pricing Index (CPI), never decreasing.

The national movement to raise the minimum wage has made its way into Southern California as well with a number of cities, including Long Beach, Santa Monica and West Hollywood, considering moving forward with local ordinances.

In the City of Los Angeles, council members Bonin, Cedillo, Martinez and Price have introduced a

AS CALIFORNIA GOES…

proposal to raise the hourly citywide minimum wage to $13.25 by 2017 and $15.25 by 2019, nearly a 50 percent increase from the current minimum wage of $9/hour.

Regionally specific minimum wage increases have State lawmakers on notice.

Predictive scheduling has quickly become a new policy tactic for organized labor. Some speculate that labor groups are taking this approach and are actively working this policy area in close to 10 states.

In 2013, lawmakers passed a minimum wage increase bringing California to $9 per hour by 2014 and $10 per hour by Jan. 1, 2016. This year, Senate Bill 3 authored

by Sen. Mark Leno (D-San Francisco) would further raise the state’s minimum wage to $11 per hour in 2016, and $13 per hour in 2017.

In 2019, the measure would mirror what was done in San Francisco by tying an annual adjustment to the CPI. This measure is co-authored by Senate leader, President pro Tempore Kevin de León.

Minimum wage increases are also paired with other tactics such as predictive scheduling mandates for private employers.

Predictive scheduling has quickly become a new policy tactic for organized labor. Some speculate that labor groups are taking this approach and are actively working this policy area in close to 10 states.

This movement for a statewide push began in San Francisco with a swiftly passed suite of bills authored by then Supervisor, now Assemblymember David Chiu (D-San Francisco). The local ordinance was pushed by organized labor and passed with the intent of creating momentum for a statewide bill.

The bill would also create a new protected class by prohibiting discrimination for employees who receive CalWORKS or CalFresh assistance or has family who receives CalWORKS benefits — allowing an employee to take unlimited time from work without pay to attend any county human services agency meeting.

Last minute changes by employees taking this time off would trigger penalties for the employer trying to cover the shift. It is also a concern that by placing these mandates within the California labor code it will invite litigation under the Private Attorney General Act. Decline in Labor Union Representation In spite of the fact that organized labor unions push aggressive policies in an effort to attract new members, overall union participation in the United States has been on a steady decline. According to a recent economic study released by the Bureau of Labor Statistics union membership declined 0.2 percent from 2013 — down to 11.1 percent, approximately 14.6 million union workers. By comparison, in 1983, the first year that comparable union data was available, the percentage was nearly double at 20.1 percent, approximately 17.7 million union workers.

Union organizers attribute declining membership to economic globalization, business practices of outsourcing jobs to other countries with more competitive labor costs and a lack of access to private employer workplaces.

“While economic globalization continues to affect nearly every business model, overall public opinion of organized labor has continued to decrease — particularly at the leadership levels,” says Paul Herrnson, executive director of the Roper Center for Public Opinion Research.

Continued on p. 64

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“The negative attributes associated with union leaders, however, impede unions’ ability to garner more public approval,” he said. In fact, in over 40 years of Gallup polling, ratings of honesty and ethical

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The San Francisco legislation requires employers to schedule 14 days in advanced with an hour of pay due the employee if changed between seven days and 24 hours of the shift and two to four hours of pay due to the employee depending on shift length for changes within 24 hours of the start of the shift. The San Francisco ordinance is not in effect until mid-2015.

Chiu has introduced a similar proposal statewide which would require employers to provide employees with their work schedule two weeks in advance.

An employee would receive additional pay if not provided the schedule or a change is made within that timeframe.

63

AS CALIFORNIA GOES…

C O N TI NU E D

Continued from p. 63

standards of labor leaders as high or very high have stayed in the low to mid-teens.

Union’s Political Muscle In the face of declines in labor union representation in the private sector, the political muscle of unions continues to grow and in many ways far outpaces actual worker representation.

Much of that is due to significant union representation of employees in government.

According to the U.S. Bureau of Labor Statistics’ 2014 Report on Union Membership, nearly 36 percent of public-sector workers belong to a union.

The percentage varies by sector with local government boasting a whopping 42 percent union membership rate nationwide. In addition, unions are able to substantially boost their political clout in California by extremely high rates of collection of political campaign funds from members — monthly as a part of overall union dues.

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A process is authorized under law for union members to “opt out” of the process, but during the most recent ballot skirmish over the issue, unions noted that just 25 percent of members take advantage of the opportunity. Many argue that is because the process is not widely publicized and can be cumbersome.

64

According to the Center for Public Integrity, two of the top five donors to California political races in 2014 were unions, both of them public employee unions. The California State Council of Service Employees spent a reported $3.7 million in direct candidate contributions with the California Teachers Association not far behind at $2.5 million. That would be in addition to any funds spent indirectly through Independent Expenditure Committees or other, non-reportable efforts. In addition, the California Democratic Party made the top five.

The political influence by organized labor will continue to be a challenge to the employer community. The financial means of both public and private sector unions enables them to implement an organized multistate political and policy strategy that can be in multiple states as well as locally. Private sector

employers, for the most part must devise and execute defensive strategies to stem the tide of organized labors’ agenda.

Organized labor groups gravitate towards policy agendas that have broad-base public appeal as a way to enhance organizing efforts. This poses a challenge for employers who are seen as unfair or unreasonable.

Organized labor groups gravitate towards policy agendas that have broad-base public appeal as a way to enhance organizing efforts. This poses a challenge for employers who are seen as unfair or unreasonable.

And while there are bad actors in every sector both public and private — most employers are simply trying to remain profitable while trying to balance a burdensome regulatory and legal climate. n

Congratulations to Jim & Joyce Raley Teel and Joseph E. Gallo on your

induction into the CGA Educational Foundation Hall of Achievement.

On behalf of our company and employees, please accept a heartfelt thank you for your support of such a worthy cause.

2553-1

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

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Congratulations to Jim French as the incoming Headlite of the Illuminators.

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CONGRATULATIONS JIM FRENCH May you spread the Lite of Good Fellowship!

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

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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

WEBSITE

43

Alta Dena Certified Dairy, LLC

626-964-6401

626-913-9062

veronica_rendon@deanfoods.com

www.deanfoods.com

7

Anheuser-Busch InBev

909-597-0460

909-597-0460

raul.aguilar@anheuser-busch.com

www.anheuser-busch.com

55

Bimbo Bakeries USA

714-459-4772

714-441-3435

rhamacher@mailbbu.com

www.bimbobakeriesusa.com

5

Braga Fresh Family Farms

831-678-3835

sales@bragafresh.com

www.bragafresh.com

67

C & H Sugar - ASR Group

510-787-4416

510-787-4205

kent.kunsman@asr-group.com

www.chsugar.com

15

C & S Wholesale Grocers, Inc.

916-373-4396

916-373-4296

pmiller@cswg.com

www.cswg.com

2,47

Coca-Cola Refreshments

213-746-5555

213-744-8765

mikanderson@coca-cola.com

www.cokecce.com

19

Command Packaging

800-996-2247

323-260-7047

erin@smarterbags.com

www.smarterbags.com

56

Co-Sales

925-327-7311

925-327-7321

jfrench@co-salesnc.com

www.co-sales.com

30

CROSSMARK Northern California

925-520-6313

925-520-6352

mark.mclean@crossmark.com

www.crossmark.com

17

Downey Brand LLP

916-520-5316

bapplegate@downeybrand.com

www.downeybrand.com

35

E. & J. Gallo Winery

510-476-5213

510-476-5445

herb.smith@ejgallo.com

www.gallo.com

64

Fresh & Easy

310-341-1501

310-341-1201

www.freshandeasy.com

65

Gelson’s Markets

818-906-5709

818-990-7877

www.gelsons.com

59

Illuminators

714-319-0517

12

International Dairy Deli Bakery Association

608-310-5000

66

Langer Juice Company

61

wcrocker@bbumail.com

www.illuminators.org

608-238-6330

iddba@iddba.org

www.iddba.org

714-693-8210

714-693-8214

jbekier@premierllc.com

www.langers.com

METTLER TOLEDO

614-438-4511

614-438-4900

USRetail@mt.com

www.mt.com/retail

53

MillerCoors

916-801-9897

916-786-9396

chris.mathews@millercoors.com

www.millercoors.com

18

Milton’s Baking Company

858-350-9696

858-350-9695

ddimond@miltonsbaking.com

www.miltonsbaking.com

39

MOM Brands

952-322-8000

952-322-8005

lkbrown@mombrands.com

www.mombrands.com

39

Moss Adams LLP

916-503-8206 818-577-184

stephen.redmond@mossadams.com jeff.clair@mossadams.com

www.mossadams.com

49

Nestle Purina PetCare

800-421-1721 x9 314-982-4876

paul.cooke@nestle.purina.com

www.purina.com

29

Novamex

888-668-2639

consumer.relations@Novamex.com

www.novamex.com www.jarritos.com

38

NRG eVgo

310-621-7581

Thomas.Folan@nrg.com

www.evgonetwork.com

23,IBC

NuCal Foods

209-254-2200

209-254-2255

BC

Pepsi Beverages Company - WBU

949-330-5804

949-643-5765

34

Raley’s

916-373-3333

916-444-3733

30

rePLANET, LLC

951-817-3258

951-520-1701

38

SAFE Credit Union

916-979-7233

31

Safeway Inc.

925-467-3000

925-467-3323

66

Tillamook Country Smoker, Inc.

503-377-2222

503-377-2746

don.hagedorn@tcsjerky.com

www.tcsjerky.com

9

Unified Grocers, Inc.

323-264-5200

323-729-6619

customercare@unifiedgrocers.com

www.unifiedgrocers.com

28

Unilever

714-315-1405

kimberly.stokes@unilever.com

www.unilever.com

66

Western Exterminator Company

800-540-5181

littleman@west-ext.com

www.westernexterminator.com

48

Wilton Bakery/Co-Sales

925-327-7311

styler@co-salesnc.com

www.wilton.com

314-982-2860

925-200-7115

www.nucalfoods.com douglas.todd@pepsico.com

www.pepsi.com www.raleys.com

joe.perez@replanet.com

www.replanet.com

james.allen@safecu.org

www.safecu.org www.safeway.com

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