Progessive Grocer - March 2016

Beyond Brick and Mortar

In the Swim

Redefining the physical store for the omnichannel age Page 38

Retail Seafood Review charts swell outlook Page 84

Stealing Home

Grocers ramp up housewares offerings Page 108

The Essential (HAVE-TO-BE-THERE)

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INDUSTRY RESEARCH

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Hispanic foods are the real deal at Arizona’s Food CityEXPO HOURS EXPANDED

FOCUS ON ALLERGENS

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Beyond Brick and Mortar Redefining the physical store for the omnichannel age Page 38

In the Swim

Retail Seafood Review charts swell outlook Page 84

Hispanic foods are the real deal at Arizona’s Food City Page 24

Stealing Home

Grocers ramp up housewares offerings Page 108

Adrian Figueroa, district manager; Mike Solis, director of retail operations; Cisco Echeverria, director of merchandising

March 2016 • Volume 95 Number 3 $10 • www.progressivegrocer.com

PeteAndGerrys.com | NelliesFreeRange.com

*Data Source: IRI Infoscan Data, 52 Weeks Ending November 29, 2015. Geography Total US Multi-Outlet **Data Source: IRI Infoscan Data, 52 Weeks Ending November 29, 2015. Geography Maine to Washington D.C. © Pete and Gerry’s Organics, LLC 2016

has

arrived!

Available March 7

Each GOOD THiNS snack is baked deliciously thin and crispy with a “no” list that makes it easy to say “yes” to good snacking: • No artificial colors or flavors • No partially hydrogenated oils • No high fructose corn syrup • No cholesterol

© Mondel ēz International group

March 2016

features

Volume 95, Issue 3

cover story

fresh food 76

20

FMI MIdwInter ConFerenCe

delI InsIghts, Part 3

Future of the Marketplace Te store is alive and well, as long as it continues to reinvent itself.

Truth and Consequences Creating a culture of professionalism is essential to creating better deli shopping experiences.

84 ProgressIve groCer ’s 2016 retaIl seaFood revIew

38 oMnIChannel retaIlIng

Envision the Future Redefning the physical store in an omnichannel world.

52 MarketIng & MerChandIsIng

Sound Strategies Driving health in-store requires the cooperation of various stakeholders.

grocery 62

Meat snaCks

The Proof is in the Protein Nutrition and snacking trends herald a new generation of jerky.

Fishing for Profits Could this fnally be the year seafood swims on its own?

Cover photo by Nicole King

24

91

store oF the Month

ProduCe

Autenticidad en Acción Mexican delights are the real deal at Food City’s latest remodel.

Get Real Consumers look to local products to feed their appetite for authenticity.

frozen & refrigerated 69

dIPs & dressIngs

Dare to Dip Product marketers are highlighting health and convenience, along with favor.

98 ProduCe Category sPotlIght

Bewitching Bulbs Onions and garlic are a source of culinary inspiration, but garlic may be in short supply.

March 2016 | progressivegrocer.com |

5

nonfoods 104

HealtH, Beauty & Wellness

Hurt so Good Older shoppers are increasingly reaching for pain remedies on grocers’ shelves.

108

HouseWares

Smart Selling Leading grocery chains pull out the stops in housewares.

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • www.progressivegrocer.com VP, Brand Director 201-855-7621

EDITORIAL Editorial Director Joan Driggs 224-632-8211 jdriggs@stagnitomail.com Chief Content Editor Meg Major 724-453-3545 mmajor@stagnitomail.com Editor-in-Chief James Dudlicek 224-632-8238 jdudlicek@stagnitomail.com Managing Editor Bridget Goldschmidt 201-855-7603 bgoldschmidt@stagnitomail.com Technology Editor John Karolefski 440-582-1889 jkarolefski@stagnitomail.com Senior Editor Katie Martin 224-632-8172 kmartin@stagnitomail.com Senior Editor Anna Wolfe 207-773-1154 awolfe@stagnitomail.com Digital Editor Kyle Shamorian 224-632-8252 kshamorian@stagnitomail.com Art Director Bill Antkowiak bantkowiak@stagnitomail.com Contributing Editors Kathy Hayden, Bruce Horovitz, Bob Ingram, Jenny McTaggart, Barbara Sax, Jennifer Strailey and Christina Veiders

technology 114

Digital Marketing

Operating a Robust Social Media Program Shopper content is key to success.

operations 118

Jeff Friedman jfriedman@stagnitomail.com

supply CHain

ADVERTISING SALES & BUSINESS Midwest Marketing Manager John Huff 224-632-8174 jhuff@stagnitomail.com Western Regional Sales Manager Elizabeth Cherry 310-546-3815 echerry@stagnitomail.com Eastern Marketing Manager Maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 mkaeppel@stagnitomail.com Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@stagnitomail.com Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) jblaney@stagnitomail.com 630-364-1601 Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@stagnitomail.com Advertising/Production Manager Jackie Batson 224-632-8183 • Fax: 888-316-7987 jbatson@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com

Blurred Lines Retailers’ supply chains will need to be transformed as the digital and physical worlds continue to merge.

equipment & design 122

EvEnts • MarkEting • Digital • rEsEarch • circulation

Fixtures

Safety on Display Suppliers of seafood cases make consumer protection a priority.

departments 8 EDITOR’S NOTE: AN ORGANIC EDGE 10 PG PULSE 12 IN-STORE EVENTS CALENDAR: MAy 2016 14 NIELSEN’S SHELF STOPPERS/SPOTLIGHT: REFRIGERATED DRESSINGS, SALADS AND PREPARED FOODS/ REFRIGERATED PASTA 16 MINTEL GLOBAL NEW PRODUCTS: SWEETENERS AND SUGAR 18 ALL’S WELLNESS: SNACKTIME IS MEALTIME 126 WHAT’S NExT: EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 128 THE SUPPLIER SIDE 130 THE LAST WORD: WHOLE LOTTA SHAKIN’ GOING ON

6

| Progressive Grocer | March 2016

VP/Custom Media Division Pierce Hollingsworth 224-632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Corporate Marketing Director Bruce Hendrickson 224-632-8214 bhendrickson@stagnitomail.com Promotion Director Robert Kuwada 201-855-7616 rkuwada@stagnitomail.com Director of Events Ken Romeo 224-632-8181 kromeo@stagnitomail.com Director of Digital Strategy Matt McGuire 224-632-8180 mmcguire@stagnitomail.com Director of Market Research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com Subscriber Services/Single-copy Purchases 978-671-0449 or email at Stagnito@e-circ.net CORPORATE OFFICERS President & CEO Kollin Stagnito kollinstagnito@stagnitomail.com Chief Financial Officer Kyle Stagnito kylestagnito@stagnitomail.com Chief Revenue Officer Ned Bardic nbardic@stagnitomail.com Chief Brand Officer Korry Stagnito korrystagnito@stagnitomail.com

WE S TSI

K NYC

ES

MAR

ET

DE

T. 1 9 6 5

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For over 10-years, the Westside Market enterprise has relied on CATAPULT® retail automation, developed by ECRS®, to efficiently process rapid-fire customer checkouts, data analytics for better decision making, and enterprise-wide management. The CATAPULT platform has provided Westside Markets with the tools to manage their existing business while providing flexibility for future growth.

ECRS has been optimizing the performance of grocery and natural grocery retailers since 1989. Contact us to learn more.

Be sure to visit our booth at Natural Products Expo West - Booth # 4053.

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800.211.1172

editor’s note

by Jim Dudlicek

An Organic Edge

F

or years, the argument for organic over conventionally produced foods has largely been one of perception and, to an extent, mistrust of socalled “Big Food” and technology in agriculture, with few hard facts to back up the assertion by its advocates that organic food is nutritionally better for you and, presumably, worth its premium pricing.

Last month, however, two new scientifc papers from the United Kingdom’s Newcastle University claim to demonstrate a clear health advantage to choosing organically produced milk and meat.

Te papers, published in the British Journal of Nutrition, show organic milk and meat contain about 50 percent higher levels of benefcial omega-3 fatty acids than conventionally produced products. Tey also show that organic meat has lower concentrations of two saturated fats, and that organic milk and dairy products contain 40 percent more heart-healthy conjugated linoleic acid (CLA) than their conventional counterparts. Organic milk additionally was found to have benefcial increases in nutritional minerals and antioxidants, including higher concentrations of iron, vitamin E, selenium and carotenoids.

While several other studies have supported the benefts of organic milk and meat, these are the frst to use state-of-the-art meta-analysis techniques, and are the most comprehensive reviews ever conducted on these topics, drawing upon 196 papers on milk and 67 papers on meat from around the world.

“Taken together, the three studies on crops, meat and milk suggest that a switch to organic fruit, vegetables, meat and dairy products would provide signifcantly higher amounts of dietary antioxidants and omega-3 fatty acids,” declares Dr. Carlo Leifert, Newcastle University professor of ecological agriculture, one of 25 co-authors of the studies and adviser to Te Organic Center, the Washington, D.C.-based research arm of the Organic Trade Association.

“We need substantially more well-designed studies and surveys before we can accurately estimate composition diferences in meat from diferent farm animals and for many nutritionally important compounds (vitamins, minerals, toxic metal and pesticide residues), as there is currently too little data to make comparisons,” Leifert adds. “However, the fact that there are now several mother-and-child cohort studies linking organic food consumption to positive health impacts shows why it is important to further investigate the impact of the way we produce our food on human health.”

Tese latest fndings are defnitely a plus for the organic food category, providing a layer of science

8

| Progressive Grocer | Ahead of What’s Next | March 2016

Organic, natural and freefrom are big business, and trends that grocers can continue to leverage for the foreseeable future. against those who argue that packaging claims like “natural,” “organic” and a host of free-from declarations implicitly suggest that conventional food products are bad.

Among the latest of these claims gaining traction in grocery aisles are variations on the theme of “antibiotic-free.” Advocates argue that consumers are at risk from antibiotic residue in treated livestock, although the FDA since the 1950s has banned all antibiotic residues in meat.

“All meat and poultry are truly antibiotic-free; however, with residue, the misconception is that when you eat meat from animals treated with antibiotics, you are eating what they ate, which is simply not true,” says Dr. Chuck Hofacre, director of clinical services for the University of Georgia’s College of Veterinary Medicine.

Adds Yvonne Taxton, director of the Center for Food Animal Wellbeing: “It’s confounding that companies are labeling chicken as ‘antibiotic-free’ or ‘no antibiotics,’ which leads to the impression that other chicken has antibiotics. It’s a marketing strategy, not necessarily the truth.”

As such, critics of the labeling argue that there’s no consumer beneft to withholding antibiotics from livestock, which they say sufers needlessly when untreated. Tis clashing of values over the hot-button issue of animal welfare is sure to continue.

Grocery retailers should help educate their consumers on all aspects of food production so they can make informed choices. Still, many will not be swayed either way, regardless of scientifc support.

What’s certain is that organic, natural and freefrom are big business, and trends that grocers can continue to leverage for the foreseeable future. PG Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

T H E

A R T

O F

M E R C H A N D I S I N G

T M

HOOKS | SHELF & COOLER MERCHANDISING | LABELING WWW.TRIONONLINE.COM/ART | 800-444-4665 ©2015 Trion Industries, Inc.

What’s trending on Progressivegrocer.com …

Executive personnel changes at some of the nation’s top grocery chains – including Publix Super Markets, Price Chopper/Golub Corp. and Supervalu — factored among Progressivegrocer.com’s most popular stories during the Jan. 15-Feb. 15 timeframe.

Also ranking among our website’s most highly trafficked stories during the same period: Kroger’s potential acquisition of The Fresh Market, the U.S. House of Representatives’ passage of the “Common Sense” Labeling Act, and new stores in the pipeline at Sprouts Farmers Market.

Publix Promotes 4

http://bit.ly/1Ssn3Aa

Kroger Poised to Acquire The Fresh Market http://bit.ly/1Kem5oW

Scott Grimmett Becomes Price Chopper/Golub Corp. CEO http://bit.ly/1nn91DE

House Passes ‘Common Sense’ Labeling Act S hhttp://bit.ly/1PRIrNo

Sprouts Farmers Market to Open 11 New Locations in Q2 2016 http://bit.ly/1QlKXHL

A Albertsons, Haggen Reach Settlement S http://bit.ly/1JyekKb

Ahold, Delhaize Filee Registration Statement With SEC C

http://bit.ly/1SsY0h7

Fairway May Declaree Bankruptcy: Reportt

http://bit.ly/20DZe8e

10

Supervalu Names Mark Gross President/CEO

| Progressive Grocer | Ahead of What’s Next | March 2016

http://bit.ly/1R88Aqll

May 2016 is...

National Barbecue Month National Mediterranean Diet Month National Hamburger Month National Salsa Month National Strawberry Month National Egg Month

S

1

To celebrate World Laughter Day, ask your staff to share their favorite (clean) jokes.

M

2

For National Raisin Week, which runs through the 7th, ask customers to share on social media their favorite recipes featuring the tasty morsels.

T

3

Make sure shelves are stocked for Cinco de Mayo.

W

4

National Hoagie Day. Offer specials in the deli or prepared food area.

National Orange Juice Day

T

5

Cinco de Mayo Rather appropriately, it’s also National Enchilada Day.

F

S

6

7

National Crepe Suzette Day. Feature butter, eggs, flour and oranges.

The 142nd Kentucky Derby is run today.

Set up end caps of Southern food and sweet iced tea.

8

9

10

11

12

13

14

15

16

17

18

19

20

21

Mother’s Day. Have lots of flowers and gifts available for last-minute shoppers.

This is the start of American Craft Beer Week. Display local beers, growlers and beer glasses.

National Chocolate Chip Day

22

In honor of Jewish Heritage Month, offer discounts on kosher products.

29

National Biscuit Day. Sample as many varieties as you can.

12

On the final day of National Herb Week, present a cooking demo on how to incorporate herbs into healthy dishes.

For National Barbecue Month, offer discounts on grills, tongs, charcoal and mitts.

Review your summer event schedule. Is it time to hire seasonal help?

23

National Taffy Day

30

Memorial Day National Mint Julep Day

This is a good time to check your Memorial Day and summer grilling inventory.

Promote National Mediterranean Diet Month throughout the store.

24 2

NCA Sweets & Snacks Expo begins in Chicago and continues through May 26.

National Eat What You Want Day. Offer samples of tasty treats throughout the store.

It’s No Dirty Dishes Day. Cross-promote liquid soaps, sponges, drying racks and dish towels.

25

National Wine Day

National Brownbag-it Day. Make sure you have lots of DIY sandwich items available.

National Nutty Fudge Day

National Devil’s Food Cake Day

Sweet or savory?

It’s both National Apple Pie Day and National Hummus Day.

National Quiche Lorraine Day National Pick Strawberries Day

26

National Blueberry Cheesecake Day National Cherry Dessert Day

27

To mark National Salsa Month, hold tastings and demos of traditional and unusual salsas.

Create a prominent display of Fair Trade products, with informational brochures and signage, for World Fair Trade Day.

To celebrate National Armed Forces Day, give service members and their families a special discount.

28

National Hamburger Day. Prominently display all of the condiments and grilling accessories needed for this American classic.

National Brisket Day

31

National Macaroon Day. Direct customers to the in-store bakery for a special on the chewy treats.

| Progressive Grocer | Ahead of What’s Next | March 2016

Email your calendar submissions to

awolfe@stagnitomail.com

REACH SHOPPERS

AND ACHIEVE GROWTH

WITH A NEW SET OF SOLUTIONS WITH

AWARENESS OF HEALTH AND WELLNESS IS CHANGING THE WAY AMERICANS EAT AND SHOP FOR FOOD NE AR LY

45 OUT OF

MOST CONSUMERS WANT THEIR

OVERALL DIET (BUT NOT EVERY ITEM)

TO BE HEALTHY

SAY HEALTH & FITNESS ARE KEY TO SENSE OF WELL- BEING

MORE THAN HALF USUALLY OR ALWAYS TRY TO EAT A

HEALTHY DIET

CAMPBELL’S HOUSEHOLDS MAKE MORE TRIPS CAMPBELL’S HEALTH & WELLNESS

OVER INDEXES AT

118 CAMPBELL’S DELIVERS LARGER BASKET SIZE AVERAGE HEAL WELLNESS BASKET SIZE

$67 CAMPBELL’S HOUSEHOLD HEAL WELLNESS BASKET SIZE

$91 A Campbell’s household is one that purchases 10+ Campbell’s products per year.

Source: IRI US Panel, 52 Weeks Ending 10/5/2014

TM

STRENGTHENING OUR CORE. EXPANDING INTO FASTER GROWING SPACES. CREATING SOLUTIONS THAT DRIVE GROWTH.

VISIT CAMPBELLSOUP.COM/SHOPPERGROWTH TO LEARN MORE. ©2015 CSC Brands LP

Front End

Market Intelligence By The Numbers

Shelf Stoppers

GRoCERY’S ToP 10

Refrigerated Dressings, Salads and Prepared Foods

Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Dec. 19, 2015)

Sales % Change Dollars (Millions) 2015 2014 Remaining Ready-made Salads Pasta Salad Dressing Chili Fruit Combination Lunches Sauerkraut Gelatin Salads Pizza Horseradish

Total Category

$936.6 261.2 298.2 19.5 493.6 759.8 46.8 135.5 136.7 38.7

$6,626.1

% Change 2015

Units 2014

10.2% 9.2 6.1 5.9 5.6 5.3 4.0 2.9 1.7 -0.3

10.9% 4.6 3.4 1.1 -8.5 2.3 4.7 0.4 -6.2 -2.8

6.0% 9.4 0.4 1.8 0.0 6.2 1.1 4.5 -1.5 -1.9

7.5% 4.2 2.4 -1.1 -15.2 3.5 1.9 5.9 -10.1 -4.3

2.7

1.1

0.7

-0.4

NielseN’s Spotlight

Households with children are the biggest consumers of refrigerated pasta, a quick and convenient dinner for busy families living in cosmopolitan centers and affluent suburbs. empty nesters living in these areas are also regular purchasers of refrigerated pasta. With more disposable income available, they are enjoying the convenience factor of quick-to-prepare meals, without worrying about the added costs.

CRoSS-MERCH Candidates

Consumption Index: Refrigerated Pasta LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Modest Working Towns

Plain Rural Living

Total

wITH CHILDREN: startup Families

192

199

137

148

100

57

136

small-scale Families

172

213

96

110

97

54

121

Younger Bustling Families

164

213

113

70

99

73

115

Older Bustling Families

256

262

209

82

119

70

177

Young Transitionals

119

152

80

94

70

31

90

independent singles

69

72

58

58

40

33

53

senior singles

38

40

51

22

51

18

37

established Couples

154

159

123

90

98

65

113

empty-nest Couples

154

164

104

69

98

53

107

senior Couples

127

121

88

59

64

54

84

Total

135

164

107

79

79

49

100

HHs with young children only <6 small HHs with older children 6+ large HHs with Children (6+), HOH <40 large HHs with children (6+), HOH 40+

No CHILDREN: Any size HHs, no children, <35 1-person HHs, no children, 35-64 1-person HHs, no children, 65+ 2+-person HHs, no children, 35-54 2+-person HHs, no children, 55-64 2+-person HHs, no children, 65+

Very High Consumption (150+)

14

High Consumption (120-149)

Average Consumption=100

| Progressive Grocer | Ahead of What’s Next | March 2016

• Prepared FoodDry Mixes • Breakfast Food • Pizza, Snacks and

Hors D’oeuvresFrozen • Desserts, Gelatins and Syrups • Baking Mixes • Condiments, Gravies and Sauces • Packaged Meats-Deli • Cereal More oNLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

Mintel Global New Products Database Category Insights

For more information, visit www.mintel.com or call 800-932-0400.

Sweeteners and Sugar Market Overview U.S. sweeteners and sugar sales remained relatively stable, reaching $4.3 billion in 2014.

Looking ahead, Mintel predicts that most sales will be derived from the growth of sugar alternatives that are viewed as more natural, such as plant-based sweeteners and other low-calorie alternatives.

In the long term, negative perceptions of sugar and its impact on health will continue to affect category sales. key iSSueS The sweetener and sugar category in North America continues to be driven by more natural sugar alternatives, mainly due to the ongoing debate regarding conventional sugar’s role in obesity, diabetes

and heart disease. This is also reflected in new product development: natural claims increased by 12 percentage points compared with the previous year.

However, the strong growth of natural launches has also forced some manufacturers to shift the natural focus towards “raw” and unprocessed varieties to create standout shelf appeal.

Syrup producers across North America have recently benefited from the consumer desire for raw-sugar alternatives. Although plant-based syrups such as agave are not necessarily lowercalorie alternatives to conventional sugar, they are often perceived as healthier alternatives, since consumers believe them to be naturally produced and less processed.

What Does it Mean?

The rise of the rawsugar movement will continue to be an integral part in the North American sweetener and sugar market as consumers seek more natural alternatives.

Communicating sugar’s unrefined

16

processing explicitly on-pack could enhance the natural cues to the product.

sweeteners are healthier and of better quality than traditional white sugar.

Although the nutritional advantages of agave and other syrups are unproved, consumers are likely to buy into the idea that these “natural”

Granulated honey is likely to resonate well among consumers seeking additional better-for-you options.

Such innovations also

| Progressive Grocer | Ahead of What’s Next | March 2016

tap into the increasing demand for more convenient products.

Sweetener and sugar brands may therefore want to consider launching portable syrups in convenient formats, such as granular, to push the niche segment further.

Bring the Clean, Sweet Taste of Zing Stevia Sweetener to Store Shelves! ™

Real ingredients. Perfect sweetness.

Zing™ Zero Calorie Stevia Sweetener

40-count single-serve packets and 9.5 oz. easy-spoon jar.

Zing™ Baking Blend Stevia Leaf Extract & Cane Sugar 20 oz. canister with an easy pour spout and a snap-closed lid.

4

4

4 4 4

4 4 4

Visit us at Booth #2459

Learn more at zingstevia.com.

The influx of more numerous yet private eating occasions and a vested interest in health by the majority of shoppers should spur retailers to invent, market and merchandise even more better-for-you options at the point of purchase.

All’s Wellness

By Molly Hembree

Snacktime is Mealtime The desire for wellness and convenience are driving a paradigm shift in eating behavior.

T

he culture of eating has seen dynamic change over the past few decades, and retailers are called to make oferings relevant to shoppers. Increased attention to nutrition, the irregular climate of eating occasions and the heightened appeal of convenience are strong considerations when retailers decide how to promote food choices.

Te Food Marketing Institute’s (FMI) “U.S. Grocery Shopper Trends 2015” suggests Americans continue to place high value on health and wellness. Te paradigm shift of “reactive” health decisions based on a new diagnosis or recommendation has been replaced with a “proactive” mindset in selecting nutritious foods as a personal responsibility of the shopper (80 percent of those surveyed).

Fears of weight gain and disease onset have been exchanged for a holistic view of health that focuses on generalized healthy eating and mounting interest in how food is produced. On average, 29 percent of adults consider their diets currently healthy, and 66 percent are motivated to improve their health.

More usable insights from FMI’s study show that eating occasions are being spent on the run (29 percent of the time), alone (46 percent), or skipped altogether (18 percent). Furthermore, 48 percent of adults replace meals with snacks three to four times a week, and 90 percent of consumers snack multiple times throughout any day.

Progressive Grocer’s 68th Annual Consumer Expenditure Survey, published last summer, supports this notion, fnding that in 2015, shoppers spent $24.5 billion on snacks — the highest sales in grocery, representing a 2.8 percent spike since 2014 and 4 percent since 2010.

Nutritional Opportunities Tis food movement should spell opportunity for retailers in the snack category. Consumers of all ages want nutritious, favorful and easy foods and

18

| Progressive Grocer | Ahead of What’s Next | March 2016

beverages. Retailers can begin by engaging branding, marketing, merchandising and procurement teams to agree on what makes a food “healthy.”

For instance, the FDA defnes “healthy” as low in fat (≤3 grams), low in saturated fat (≤1 gram), limited in sodium (≤480 milligrams) and a good source (≥10 percent Daily Value) of vitamins A and C, calcium, iron, protein, or fber, per RACC (reference amounts customarily consumed) for most foods.

To put this into perspective, limiting added oils and salt in product formulations while opting for low-fat dairy and plant-based foods can make inventory more health-conscious.

Simple ways of turning up the nutrition and adapting snack selections for customers include cross-merchandising with produce, considering dietary restrictions and ofering single-serve foods.

Fruits and vegetables earn a place in snacking by creating healthier eating occasions.

Good ideas for promotions include peanut butter merchandised alongside fresh celery, a small light yogurt near fresh berries for an easy parfait, whole grain cereal placed near bananas, or nondairy milks next door to a fresh fruit medley for individual smoothies. Many customers with chronic health conditions, or even those eliminating gluten, dairy or animal products, can fnd resolve in snack options such as nut mixes, applesauce, dried fruit, certain grain salads, and portion-controlled dips like hummus, pico de gallo and guacamole. Healthier private label products can be positioned nearby to help boost basket size and grow margins.

Te grocery industry must be on par with the fuid environment of food preferences, needs and trends.

Te infux of more numerous yet private eating occasions and a vested interest in health by the majority of shoppers should spur retailers to invent, market and merchandise even more better-for-you options at the point of purchase. PG Molly Hembree is a registered dietitian and retail dietitian coordinator for Kroger and The Little Clinic.

HOW WE’RE CHANGING THE YOGURT CATEGORY Let’s start with some facts: Yogurt Smoothies are growing like crazy, at +10.5%*, even outpacing their spoonable cousins. LALA is showing great momentum, with almost 22% sales growth versus last year*. We’re also expecting accelerated sales with new flavors and better distribution. And we are supporting these efforts with a media campaign in early 2016, with national TV, digital and social efforts, achieving over 4 billion impressions.

We know shoppers are on the move more than ever and our campaign is about just that. #YOGURTING is that moment when you’re drinking a yogurt smoothie at the same time you’re doing one of the million things life brings your way every day. Simple, right? By turning yogurt into a verb, a movement has been created.

Join us. Stock your store.

*Source: IRI, MULO 52 Weeks Ending 11/1/15

Industry Events

FMI Midwinter Conference

Future of the

Marketplace The store is alive and well, as long as it continues to reinvent itself.

By Jim Dudlicek

T

In FooD WE trust Ahold usA Coo James McCann (left) discusses transparency with FMI’s Mark Baum.

20

ransparency, hospitality, reinvention, a diverse workplace culture — all are considered important for food retailers in the years ahead, and all were key topics of discussion at this year’s Food Marketing Institute (FMI) Midwinter Conference, held January 23-26, in Miami Beach, Fla. Keynoters and expert panels at the gathering of food retail’s top executives argued that, during a time of rapid change, retailers must be prepared to redefne themselves — multiple times if necessary — or accept their inevitable decline.

“Our industry has never been as challenged as we are now,” afrmed FMI President and CEO Leslie Sarasin. “Redefning moments are coming around a lot more quickly and more frequently than ever before. … Even when we redefne, we must maintain our historical focus on customer service.”

Further, retailers need to be prepared to serve consumers “in the format they prefer,” be it in-store or digitally, Sarasin said. “We’re only as good as our next innovation, and that must involve efciencies.”

Sarasin led a Q&A with restaurateur Danny Meyer, CEO of Union Square Hospitality Group and founder of Shake Shack and other eateries of various formats.

Despite the rise in technology, consumers still demand hospitality, he asserted: “Te more high-tech we get, the more ‘high touch’ people crave.” Hospitality is a competitive edge, he pointed out, adding that “the customer must always feel heard,” regardless of whether they’re right.

Acknowledging the importance of grocerants, Meyer told retailers, “Your stores increasing-

| Progressive Grocer | Ahead of What’s Next | March 2016

ly will have to have eat-in opportunities. … Te asset you have is access to the best possible food sources.”

Feeding the World Mark Baum, FMI’s chief collaboration ofcer, moderated a panel discussion on “Te Future of Food,” featuring Mike Frank, VP global commercial at Monsanto; Kirsten Tobey, chief innovation ofcer for Revolution Foods, which creates healthy prepared meals for schools and retail; James McCann, COO of Ahold USA; and Joel Bourne, National Geographic journalist and author of “Te End of Plenty: Te Race to Feed a Crowded World.”

According to Frank, to meet the world’s demand for food, farmers will need to double their output over the next four decades within the same land footprint, a feat he called “one of the most important challenges of the next 35 years.”

Bourne acknowledged that technology is needed to feed a growing population, but noted that there’s an issue of perception. Like the backlash against the use of synthetic growth hormones in milk production that helped drive organic dairy, “we haven’t seen the

health and environmental problems that have been feared” from modern ag practices, he noted.

Frank told PG after the session that while Monsanto has websites that explain its technologies and dispel myths about them for consumers, perhaps his company needs to partner with retailers to help promote these resources to grocery customers. “We think the vast majority of Americans are openminded about this issue,” he said, calling it a “great opportunity for dialogue.”

McCann noted that years ago, “customers were prepared to trust a company,” but that now they have access to a bewildering amount of data. “If we can provide really good information, customers can make informed choices,” he said. “It’s our role as an industry to enable that choice.”

People are becoming more aware of food, “but afordability is an enormous issue,” McCann added.

“We need to fnd the blend that works, so poor families can feed their children protein.”

Baum led a second panel that took on “Te Future of Shopping,” consisting of Tom Philips, director of Deloitte Consulting; Bob Wheatley, CEO of Emergent Healthy Living; Tracey Massey, president of Mars Chocolate North America; and Brandon Barnholt, president and CEO of KeHE Distributors.

Philips outlined a new study by Deloitte, the Grocery Manufacturers Association and FMI on how new factors have risen alongside the historic main purchase infuencers of taste, price and convenience; members of the group discussed the study in an exclusive interview on Progressivegrocer.com.

Stores Here to Stay Click won’t surpass brick in sales, at least where groceries are concerned, insistedTom Blischok, chief retail strategist for PricewaterhouseCoopers (PwC) and a panelist for “Te Future of the Marketplace.” Moderated by Rorit Bhargava, CEO of Infuential Marketing Group and professor of global marketing at Georgetown University, the discussion dealt with how the grocery retailing marketplace will evolve in the years ahead.

Te panel also included Scott Moses, managing director at Sagent Advisors, and Suzy Monford, CEO of Andronico’s Community Markets, a fvestore chain in the San Francisco Bay area.

“Te store is alive and well,” Blischok declared, observing that since retailers began to focus heavily on the perimeter, “people have found it’s actually fun to shop again.”

In 2016, Blischok asserted, the trends to follow are local, experiential and a return to the store.

Even for omnichannel retailing, grocers need to determine how best to use their stores as an asset.

“Integrate what’s in-store and online,” he said, noting that “transparency is really critical.”

Monford agreed. “Brick-and-mortar is here to stay, but there will be fewer stores in the future,” she said, anticipating smaller locations that will handle custom orders and click-and-collect fulfllment.

Blischok added: “Ten years ago, the question was, how big can you get; now it’s, how small can you get? Te real question is, how relevant can you get — what size will best service your community?”

induStry leader Kroger’s Fred Morganthall accepts FMi’s prestigious Sidney r. rabb award.

March 2016 | progressivegrocer.com |

21

Industry Events

wHaT’s In sTorE Future of the marketplace according to (from left) PwC’s Thom Blischok, sagent advisors’ scott Moses, andronico’s Markets CEo suzy Monford and moderator rorit Bhargava.

Culture is the single biggest competitive advantage anyone can have.”

—Glenn Hartman, starbucks

22

FMI Midwinter Conference

Stock-up trips are diminishing, he said: “If there’s one trip that will shift this year, it’s the restaurant trip.”

Moses, noting that restaurants have rebounded since the recession, when grocers benefted from fewer people eating out, observed that grocers “need another reason to be a destination.” Te two most important areas for retailers this year, according to Blischok: dayparting and merchandising innovations.

“Own those,” he advised.

Embracing Talent Employees are as precious as customers, and both will vote with their feet — one of the key takeaways from a panel discussion of strategies for driving growth and competitive advantage, hosted by the Network of Executive Women (NEW) and American Express.

CEOs said attracting and keeping younger workers is one of their biggest challenges, according to the results of Accenture’s 2015 College Graduate Study, presented by Gerarda Van Kirk, partner for change management consulting at Accenture.

Te next fve years will see a shift from Baby Boomers to Millennials as the primary workforce generation, Van Kirk noted, at which time existing “ways of working” may not engage the changing workforce majority.

For example, she said, Millennials look for development opportunities, work-life integration, transparency and customization, compared with the “just work hard and pay your dues” mindset of earlier generations. Meanwhile, Generation Z — the next group following Millennials — values teamwork and meaningful tasks, and is willing to stay with employers longer.

Of 2015’s college graduates, only 15 percent wanted to work for large companies; 64 percent were looking for more education, 60 percent wanted a fun social atmosphere, and 64 percent expected a highdigital experience, the Accenture study revealed.

Corporate culture, mentoring and constant engagement are critical for retention in today’s workforce, the panel concluded.

Kerrie Peraino, SVP of global talent management for American Express, aimed to “debunk the myth that Millennials don’t want to come into the ofce” — they do, she countered, but they want a more fexible, casual and social environment.

“Culture is the single biggest competitive advantage anyone can have,” said Glenn Hartman, SVP

| Progressive Grocer | Ahead of What’s Next | March 2016

of channel business development for Starbucks, noting that while companies can buy technology, “culture is homegrown.”

Sabrina Wiewel, SVP and chief customer ofcer at Hallmark, stressed the importance of social consciousness, toward employees and customers alike. She recommended that employers invest in inclusion councils to better understand marketplace objectives that refect diversity.

Peraino advised building relationships and being advocates for employees’ advancement. Te so-called “career conversation,” or regular talks between leaders and teams about “what’s next, and when,” is crucial: “You have to have a sense for what’s meaningful to them,” she said. “It’s the single most important thing our leaders can do in a highly competitive market.”

NEW CEO Joan Toth concluded: “We need a workplace culture that matches our workforce, not the other way around.”

High Honors FMI presented its Sidney R. Rabb Award to Fred Morganthall, EVP for retail operations at Te Kroger Co. and former FMI chairman. Jerry Kehe, chairman of the board of KeHE Distributors, received FMI’s Herbert Hoover Humanitarian Service Award. J. Alexander M. “Sandy” Douglas Jr., EVP of Te Coca-Cola Co. and president of CocaCola North America, received FMI’s William H. Albers Award for Industry Relations.

Additionally, Randy Edeker, chairman, CEO and president of Hy-Vee Inc., received the Grocery Manufacturers 2016 Association Industry Collaboration Leadership Award. PG For live coverage of FMI Midwinter and other industry events, visit Progressivegrocer.com.

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Store of the Month

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Food City, Tucson, Ariz.

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | March 2016

viva comida! mariachis serenade the Food city management team (front row, from left): mari Prieto, bakery director; adrian Figueroa, Southern division district manager; Edward Basha iii, Bashas’ president; mike Solis, director of operations; cisco Echeverria, director of sales and merchandising; Larry Glenn, store director; (back row, from left) martin contreras, produce director; Paul orozco, tortillería director; Wilfredo aragon, deli director; Frank Ferra, produce specialist; al macaraeg, meat director

hen it comes to food, today’s consumers are more sophisticated and knowledgeable than ever before. For a truly rewarding grocery store experience, shoppers want freshness, diversity and authenticity.

In response, grocery retailers have been upping their games in those areas, even some so-called value-price operators.

Case in point: Food City, the 47-unit Mexi-centric banner owned by Chandler, Ariz.-based Bashas’ Family of Stores. Its latest remodel — in South Tucson, where the store shares a bustling shopping center along Interstate 19 with Target, Home Depot and other retailers — refects Food City’s commitment to freshness, authenticity and, as evidenced by the mariachi band serenading shoppers, a fun community experience.

From food to experience to outreach, Food City lives up to our Spanish headline, which translates as “authenticity in action.”

“Food City has a colorful new look that we have been rolling out in our store remodels since 2014,” explains Mike Solis, the banner’s director of operations. “Along with

Photography by Nicole King

March 2016 | progressivegrocer.com |

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Store of the Month

Food City, Tucson, Ariz.

FIESTA DE SAbOR Among Food City’s specialties is authentic Mexican fare, including carne asada and tortillas made fresh daily.

the refreshed décor, we have emphasized the areas that diferentiate Food City from the rest of the market and best meet the needs of our customers.”

Authenticity and connection to community have been on display from the start. When the remodel was formally unveiled last December, shoppers enjoyed food samples along with performances by Ballet Folklórico Tapatío dancers and music including Tucson’s acclaimed mariachi vocalist Monica Treviño.

Te store’s signature oferings include the deli department’s Cocina (literally, “kitchen”), ofering

AISLE CHATTER Director of Operations Mike Solis explains Food City’s mission to PG Editor-in-Chief Jim Dudlicek.

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| Progressive Grocer | Ahead of What’s Next | March 2016

authentic Mexican dishes to eat in or take home; a bakery with the traditional pan dulce (sweet bread) and other ethnic selections; a tortillería, with on-site production of corn and four tortillas; and a full-service meat department with authentic cuts, value-added oferings and seafood. Te remodel also delivered a reconfgured center store for more shopper-friendly navigation.

“Our strategy is to reinvest in our stores by upgrading and remodeling them to better serve the needs of our customers,” Solis says. “We completed 10 Food City store remodels in 2014 and an additional 12 store remodels in 2015. We have even more store remodels planned for 2016.”

Fresh, Fresh, Fresh Changes at the Irvington Road store are evident at the front door, with the produce department pulled forward to a more prominent position.

“We moved it right to the entrance,” Solis explains. “It’s a huge draw to drive trafc. Our attention at the entrance is fresh, fresh, fresh.”

A wide variety of colorful produce

Store of the Month

Food City, Tucson, Ariz.

South of the border Imported Mexican products fill an extra-wide aisle, with chili peppers, pastes and powders making a strong presence.

is joined by a wall of spices ofering a vast array of authentic selections.

Some shoppers think the store is bigger than it is, Solis notes. “Te color package for the remodel is more open and vibrant,” he says. “We’ve gotten comments like ‘Have you made the store larger?’”

Tat visibility extends to the revamped deli and prepared food area, the aforementioned Cocina.

Solis says the Cocina used to be framed by a “hacienda-type fxture” that is being removed in the ongoing remodels. “It’s really opened things up,” he says. “Right from the entrance, you can see these departments and the bright colors.”

Further enhancing visibility in the store was the consolidation of seating in a larger fxed dining area, rather than spread around the deli department; the

Muy calIente bright colors set off a wall of spices, offering authentic, robust flavors for home cooks.

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| Progressive Grocer | Ahead of What’s Next | March 2016

new confguration allows visitors an unobstructed view through produce to the deli and bakery.

“It’s become a destination to stay and eat a meal,” Solis says of the dining area, noting that “a lot of people do take food home.” Te Cocina ofers daily breakfast and lunch specials as well as family meal deals. On Sundays mornings, it hosts a three-hour live mariachi performance.

Authenticity is on full display in the Cocina.

“We’re known for our authentic Mexican foods, ofered daily,” Solis declares.

On the menu on the day of Progressive Grocer’s visit: red and green chilies, carnitas (pork), caldos (Mexican soup), menudo (tripe soup), tamales, burritos and carne asada (considered by certain locals as the best in town).

“Our chicken category is a substantial part of our business,” Solis says. Te Cocina ofers several varieties — fried, grilled and rotisserie, plus pollo ranchero (peppers and tomatoes) and pollo chipotle (pepper cream sauce). Seafood dishes include ceviche (citruscured seafood), shrimp cocktail and camaron aguachiles (shrimp cooked in lime and chiles), the last of which Solis describes as “very unique and very authentic.”

A dedicated case ofers fresh salsas, pico de gallo and guacamole, some items made in house.

Another huge draw for the deli is aguas frescas — icy house-made

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Store of the Month

Food City, Tucson, Ariz.

azucarado colorful, authentic cakes, breads and other delights dominate the bakery department.

fruit beverages in favors like cantaloupe, lemonade, pineapple and watermelon, plus horchata, a creamy rice-milk beverage.

“We really hang our hat on the authenticity of our aguas frescas,” Solis says. “It really sets us apart from the others.” Te beverage lineup also includes champurrado, a popular Hispanic hot chocolate, available ready to drink in the deli; there’s also a doit-yourself mix sold in center store.

caSe o’ queSo Mexican cheeses are available prepackaged or sliced to order.

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Sweet Showcase Authenticity continues into the store’s scratchbakery selections.

“We do doughnuts, but it’s a much smaller scale.

Here, it’s all about the pan dulce,” Solis says, referring to traditional Mexican sweet bread. It’s ofered in many varieties, including shell-shaped conchas, sweet and savory empanadas, telleras (sandwich rolls) and bollilos (crusty bread rolls).

Tere are also cortadillos (sliced cakes in dozens of varieties) and mantecadas, which Solis describes as “like a cupcake without any icing, but so moist, a unique favor. It’s a great item for us.”

Full-size and single-serve cakes come in traditional tres leches, strawberry, chocolate, fan (custard) and chocofan, the last of which delivers a layer of the rich custard over a chocolate-cake base.

Te bakery’s signature cakes are round cakes in such favors as dulce de leche, cappuccino, piña colada, strawberry, and cookies and cream, all topped with enormous strawberries. Parfait cups and gelatin with

| Progressive Grocer | Ahead of What’s Next | March 2016

fruit round out the sweet selections.

As in the Cocina, the bakery’s kitchen is on full display. “Tat’s one of the things we’ve been focusing on,” Solis says of that enhanced visibility for shoppers. Te redesign fip-fopped the positions of the self-serve and service bakery counters to open up the kitchen, which also put the cake-decorating station at the front counter. Solis notes, “It’s a showcase for people to see the works of art we do on our cakes.”

Te in-store tortillería, or tortilla bakery, has been a part of Food City stores for many years.

“We run 19 of these machines throughout the company,” Solis says of the mini production plant. “Our four tortillas are head and shoulders above anything else in the market.”

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Store of the Month

hiStoria de loS PeSCadoS Food City’s meat department includes fresh seafood, with tilapia the best-seller.

We really give the authenticity to the hispanic consumer. they can have all their needs met here.”

—Mike Solis, Food City director of operations

Food City, Tucson, Ariz.

assorted sizes and thicknesses for tacos, burritos and other applications. Te store also makes tortillas with manteca (lard) in the four for a more traditional favor profle. Meanwhile, corn tortillas come in diferent varieties for table use and frying. Te store also makes tortilla chips for sale and serving in the Cocina.

Speaking of corn, Food City is into masa (corn four) in a big way, as it’s used widely in the local Hispanic community in preparing tamales and menudo. Tese dishes are made more often for the fall and winter holidays, so masa sales double, and even sometimes triple, during these periods, Solis notes.

Te store performs regular demonstrations on the sales foor to show uses and applications for diferent varieties of masa. “We sell a lot of it,” Solis says. “Tis is one of the top-selling stores for masa out of the 47 we have.”

For shoppers going that extra mile toward authenticity at home, Food City also sells nixtamal, the corn kernels that are ground to make masa, which are also used to make menudo and posole (meat stew with hominy).

Consistency and Variety Tere’s more authenticity on display in the meat department, which ofers a full-service butcher counter, seafood, a wide selection of Mexican cheeses, the store’s signature chorizo (Mexican sausage), and marinated beef and chicken ready for the grill.

Te service counter will cut meat to any thickness, but as Solis observes, “Our customers like thinner-cut meat.” Tat’s evidenced by the many

Ciudad Comida Arizona’s Food City is a low-price format banner that offers a full range of ethnic and Hispanic food varieties along with traditional grocery store items.

The community-focused grocery store is known for holding car seat and water safety events, mobile dental clinics, back-to-school immunizations, backpack giveaways, and other cultural celebrations that are important to the Hispanic community. Investing heavily in the neighborhoods that it serves, Food City holds annual signature events like the Copa Food City Soccer Tournament and Food City Tamale Festival. In addition, the banner supports many holidays and special events important to its shoppers, including

32

cased oferings under the Food City label, like beef faps for carne asada, merchandised alongside shrink-wrapped trays of cut vegetables for fajitas.

Cuts more familiar to folks outside the Hispanic community are joined by local favorites like oxtails, beef shanks and beef short ribs, which Solis says are popular for making soups during colder months, along with neck bones, hearts and cheek meat.

Te butcher counter also features a “phenomenal” variety of Mexican cheeses, Solis notes, ofering samples of queso fresco, panela, cotija and Oaxaca, the last a popular melting cheese (named for the Mexican province) used to make quesadillas.

Of the value-added chorizo, Solis says, “It’s our in-house recipe, a real signature item.”

Seafood selections — expected to get a boost during Lent, a week away at the time of PG’s visit — include tilapia, catfsh, swai, cod, red snapper and shrimp. “Tilapia is by far our best-selling seafood, whole or fllets,” Solis says.

Fresh chicken cuts are joined by pre-cooked breaded chicken wings, nuggets and patties.

Continued on page 36

Mexican concerts, Three Kings Day, Children’s Day, Mexico’s Independence Day (Sept. 16) and Día de los Muertos (Day of the Dead).

Dating back more than 60 years, Food City was acquired in 1993 by Bashas’, which has since grown the brand from a single store to 47 locations, many of which are in metro Phoenix and southern Arizona, home to a significant Hispanic community.

Striving to hire people from its surrounding communities, Food City has saved and created thousands of jobs in many economically challenged neighborhoods. Its diverse employee base allows it to serve consumers in their native language, creating a gratifying family shopping experience. www.myfoodcity.com

| Progressive Grocer | Ahead of What’s Next | March 2016

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Food City, Tucson, Ariz.

PRODUCE DEPTPARTMENT

Food City 1221 W. Irvington Road, Tucson, AZ 85714 Grand reopening: Dec. 2, 2015 Total square footage: 55,131 Selling area: 45,565 square feet SKUs: 30,000 Employees: 100 Checkouts: 8 Hours: 6 a.m.-11 p.m.

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| Progressive Grocer | Ahead of What’s Next | March 2016

TORTILLAS • BREAD • PEANUT BUTTER • COFFEE • TEA

IMPORTED HISPANIC FOODS • CAN BEANS • CANDLES

IMPORTED HISPANIC FOODS • ASIAN • RICE • BEANS

WALL OF VALUES

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Store of the Month

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March 2016 | progressivegrocer.com |

35

Store of the Month

Food City, Tucson, Ariz.

CarneS PoPulareS Food City offers thinner cuts of meat, as favored by many of its regular shoppers.

Continued from page 32

“Chicken is a big category for us,” Solis reiterates, noting Food City’s “consistency and variety.”

Solis points out the $19.99 value pack, which ofers select cuts of beef, pork and chicken, plus ground beef, valued at up to $25. “Our prices really address the price-conscious consumer throughout the entire store,” he says.

Meanwhile, a cofn freezer ofers “menudo packs” — bags of beef tripe or beef and pig feet, ready for use by folks making the traditional Mexican dish at home.

Te remodel allowed for a larger meat department, Solis notes. “Based on the volume of sales at this store, we shifted down” farther along the perimeter, he says. “It defnitely helped with our pork and chicken sections.”

The color package for the remodel is more open and vibrant.

We’ve gotten comments like ‘Have you made the store larger?’”

Improving Shopability Center store was reconfgured as part of the remodel, which Solis says required a period of adjustment as shoppers and associates got used to the new order of things.

“We really changed the fow of the categories,” he says, explaining that this has helped to enhance

—Mike Solis, Food City director of operations

36

| Progressive Grocer | Ahead of What’s Next | March 2016

“shopability around the perimeter.”

Among the key shifts: Te beer and salty snack aisles were moved to the far end of the store for placement with the carbonated soft drinks. Additionally, the store got rid of its warehouse shelving in favor of standard gondolas. End caps are massively merchandised.

“We have a limited variety of SKUs in center store, but we have what our consumers like, and at a great value,” Solis says.

Te store’s Hispanic aisle ofers “groupings of our Mexican-branded products in several diferent categories,” Solis explains. Tis row features everything from canned goods to crackers to religious fgurines. Tere are myriad varieties of pepper — “a strong category for us,” Solis afrms — along with chili pastes and powders. Tere are also aloe vera drinks and coconut waters, which he notes “have exploded in popularity.”

And for those who don’t want to buy authentic ingredients or pick some up ready to eat from the Cocina, there’s even canned menudo.

Cross-merchandising eforts throughout the store include store-brand bread with peanut butter and jelly on one end, and mayo and mustard on the other, and jarred nopalitos (cactus) displayed near the eggs, a pairing popular among Hispanics for Lent, Solis notes. Prominently displayed atop cases around the perimeter are 40-quart stockpots used for making menudo and tamales.

“Te most rewarding part of the grand reopening has to be the excitement of our members [employees] and customers, who are enjoying the new look and feel of the store,” Solis declares.

Associates’ excitement is no doubt increased by their ability to deliver the real deal to those who know the diference.

“We really give the authenticity to the Hispanic consumer,” Solis says. “Tey can have all their needs met here.” PG

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Feature

Omnichannel Retailing

Envision the

Future

Redefining the physical store in an omnichannel world.

Editor’s Note: The following are the findings of a broad-based study encompassing an industrywide retailer survey and interviews by Meridian-NorthStar Partners and Progressive Grocer; a similar supplier survey and interviews; a web-based survey of 1,000 shoppers across age groups

by Carbonview Research, a division of Stagnito Business Information + Edgell Communications; a review of industry learning; and incorporation of “real-world” in-market experience.

O

mnichannel trends have become the “burning platform” for our industry. Tese trends are having a major impact across channels, with recent headlines providing powerful examples: “Shoppers Flock to Online Merchants,” “Walmart to Close 269 Stores,” “Retailers Struggle.”

To win over the next fve years, suppliers and retailers must address signifcant, continuous changes in our business environment.

Changes — including new shopper purchase/ delivery options, information sources, preferences for Millennials and others, and blurring of channels, including retail/e-tail — are redefning “requirements for success,” as noted by 91 percent of retailers and 95 percent of suppliers in an industry-wide study.

Tis study, dubbed “Envision,” is uniquely designed to help navigate these changes, with a broad scope and key elements as follows: Total store focus, not just perimeter or selected departments All tactics, not just technology or other elements Physical/virtual recognition that shoppers operate in both worlds Actionability near and longer term, not just generalized or incomplete solutions Ongoing focus and current: Te study will be regularly updated to refect the continuous pace of change, with deep dives in key areas with future releases

Significant New Challenges Market changes are creating entirely new challenges and an unprecedented demand for new thinking and solutions.

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| Progressive Grocer | Ahead of What’s Next | March 2016

Feature

Ominchannel Retailing

grow over the next fve years, but the physical store will continue to play a major role for shopping and pickup.

Ethnic Retailers and suppliers agree that the physi18 cal store and virtual shopping need to work together to create an experience greater than 30 the sum of their parts.

“Te fact is, shoppers want both options — physical and virtual — and the ability to move between them,” another retailer responded.

Now the caveat: Te physical store must link to virtual shopping options, but in so doing must not diminish focus against the frst challenge — diferentiation, relevance, and ability of the physical store to attract and excite shoppers.

As one retailer put it, “Focus on the physical store in an omnichannel environment is critical to our long-term survival.”

A supplier in the food industry reported, “We are seeing and projecting huge growth in online, but even by 2020, this will only be 3 percent of our sales.”

Percent Always/Often Shop Outside Their Regular FDM Store for: Meat/ Deli

Health Care

Baked Goods

Pets

Beauty

Organic

Total

32

26

25

25

25

19

Millennials

45

37

40

36

39

33

“Brick-and-mortar retailers need to come up with a better proposition to lure shoppers into their stores,” Chicago-based business consultantcy Alix Partners told Te New York Times. “‘Stack it high and let it fy’ doesn’t work anymore. Tey have to fgure out how to make shopping fun again.”

Te frst of these challenges is Differentiation and Relevance. Expanding shopper options — for meal solutions, health and beauty, pet, and other categories — are a major source of competition, especially with Millennials. Up to one-third of all shoppers and almost half of Millennials, shop in specialty stores, and online creates further challenges.

Tese options are changing requirements for success well beyond conventional metrics.

“We traditionally look at market basket and trafc,” said one retailer responding to our survey, “but our more fundamental need is difTotal

Millennials

Today

5 Years

Today

5 Years

Browse online, but go to store to do shopping

35

47

45

53

Order online to pick up at store

19

40

33

48

Shop and purchase online

22

45

34

54

Higher-level Strategy Needed Category management has played a key role for decades and will continue to do so, but today there is also need for an approach above this: to address the higher-level need states of shoppers and totalstore needs of retailers.

Specifically, shopper need states aren’t confined by traditional category boundaries. For retailers, a gap exists between solutions developed across 150-plus categories and their need to prioritize and integrate these into a unified whole to excite and engage shoppers, and thereby differentiate their overall operations.

Suppliers and retailers both recognize there are limitations to category management for future shopper and store management needs.

“Category management is important, but it’s the price of entry, and by defnition is more limited in scope and the kind of solutions it can provide,” a retailer responded.

“You can’t win with this.”

Tis higher-level shopper/store approach impacts the type and depth of insights that are developed, as well as the application of these insights.

ferentiation and relevance in a world with more options in conventional channels, foodservice, specialty stores and online.”

A second major challenge is Physical/Virtual Balance.

Is the physical store seen by Percent Top 2 Box Agreement shoppers, and Millennials in particular, as relevant fve years Category management is not from now? Te answer is yes, but sufficiaent to fulfill future needs with a caveat: Te physical store must elevate its game.

There is a need for solutions not First, the good news: Shoplimited by category/department pers, and Millennials specifcally, boundaries note that online shopping will

40

| Progressive Grocer | Ahead of What’s Next | March 2016

Retailers

Suppliers

40%

50%

100%

97%

Retailer Rating of Current Insights — Percent Very/Somewhat Strong Brand

Category

Dept.

Related Depts.

Total Store

76

77

50

39

42

While virtually all suppliers today have shopper insights, retailers express the need for broader business insights that are developed to more fully address both shopper and store needs.

“Just like category management is categorycentric, many of the supplier insights and solutions we see fall within the same boundaries,” said one retailer, “and, when they get beyond the immediate aisle, often lack real substance.”

In addition to deeper and more developed insights, there’s a need for applications that identify “white space” beyond category definitions, in terms of shopper need states and also retail execution.

“We need techniques that address opportunities for both product and retail innovation,” another retailer said. “We see a lot of focus on the frst, but the second is equally critical to more effectively engage with shoppers.”

Need a Broader Set of Tactics Te 4Ps — product, price, placement and promotion — continue to be a foundation for managing categories. However, winning in today’s environment demands more, given the following: Blurring of channels, both physical and virtual Need to focus on not just consumer needs, but also shopper needs, and retailers need to address these in a compelling way A major shift in the industry’s perceived “moment of truth,” from when a shopper is in front of a shelf containing products to a much earlier point when the shopper is considering which channel/retailer to shop “Te 4Ps are important, but if that’s the extent of what we focus on as retail tactics, we’ll soon follow others into Chapter 11,” a retailer remarked.

While the 4Ps continue to address key basics, the 2Es are critical today as diferentiators — to excite and engage shoppers, and address the retailer need for a diferentiated image and relevance.

The fact is, shoppers want both options — physical and virtual — and the ability to move between them.”

—Retailer

March 2016 | progressivegrocer.com |

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Percent Very/Somewhat Likely to Shift Purchasing “Back” to Their Regular Store

Excitement: When shopTotal pers walk by a section of the store, does it create a Millennials “wow”? An emotional connection? Does it make them need to enter and check it out? Does it provide a compelling alternative to specialty outlets?

Meat/ Deli

Health Care

Baked Goods

Pets

Beauty

Organic

Ethnic

83

76

78

73

72

80

74

Just like 78 77 72 73 71 77 73 category management is category“not organized to the way I shop”; and 30 percent centric, many said, “I don’t think they focus on shopper needs of the supplier when organizing products.”

Te 2Es have the potential to change the game.

Engagement: While the 4P tactic of promoinsights and Te “treasure hunt” of club stores and the “fun/ tion focuses on communication to the shopper, solutions we excitement” in many specialty stores, noted in many engagement focuses on dialogue originating see fall within studies, provide a helpful reference point. In our from the shopper.

To compete with restaurant the same study, more than three-quarters of shoppers inditakeout, for example, where shoppers often use boundaries, cated that they’d be very/somewhat likely to shift a mobile device to call ahead, is the same option and, when they purchasing “back” to their regular store if ofered a available for your prepared food section? With get beyond more engaging shopping experience. other sections of the store, is there opportunity the immediate for dialogue before, in and after the store? aisle, often Revisiting Industry Truths lack real Te 2Es respond to signifcant shopper needs.

In a very diferent business environment, it’s also substance.” Consider the following: Only 50 percent of shopinstructive to revisit industry “truths” in two areas.

—Retailer

pers indicated that they’re “fully or pretty loyal” to their primary grocery store”; only 51 percent said that they have “high or somewhat high enjoyment” in the shopping experience; 41 percent said that it’s

Te frst is perceptions of perimeter and center store. Te perimeter has unique elements (e.g., fresh), but also several others that can be broadly applied, such as integration of categories, visual appeal, information/news, “stations,” and more.

As one retailer put it, “If we look at perimeter and center as totally unique, we’ll keep trying to solve center store problems with center store tactics.”

Te second is perception of a “common look across the store.”

“Common look can be more weakness than strength,” another retailer asserted. “Why should the pet aisle look the same as household cleaning or snacks or HBC? Tese sections need to connect with shoppers, not just provide products. A pet is a family member. Beverages provide purity, variety, enjoyment. OTC meets treatment and preventive needs.”

Creating a more exciting, engaging retail experience must take a broader approach than trying to solve center store problems with center store tactics, or maintaining a common look across the store.

Opportunity: A Case Study Before we look at applying key learning from this study, we should begin with a current case study to illustrate certain opportunities.

Te example we’ll use is a top-fve grocery retailer, but observations and implications also apply to other channels. Te store has a typical perimeter, and the center store has 24 aisles. Tere’s a numbered sign at the end of each aisle that also lists seven to eight product types found in that aisle, or almost 200 categories. Te signs are the same shape and color, and the aisles generally use the same fxturing and other elements.

Certain product types (e.g., beverages) occupy three entire aisles, but aren’t next to one another.

Other product types (e.g., HBC, pet, GM) are typically their own aisles. End aisle displays are used, often for DSD items; these items typically don’t align with the product types stocked in the aisles adjacent to them.

Taking Action: A Detailed Approach Te study identifes four major steps for taking action. Tese can be used to create a “practical revolution,” both near and longer term. A practical revolution creates noticeable change/improvement without signifcant near-term investment, and without signifcant change in established consumer/ shopper behavior.

Step 1: Identify Shopper Business Units

(SBUs) for Your Stores Tis begins by consolidating your store into a manageable number of “shopper-defned business units” (SBUs) — or destinations or need states — that shoppers can easily identify with and understand, and that align with your store diferentiation strategies.

In our case study example, the 24 aisle signs could be consolidated into, say, 12 major sections: beverages, snacks/condiments, canned/packaged, breakfast, GM, baby/family, reading, HBC, household products, paper goods and frozen.

Te key point isn’t the number or even the names of these, but the fact that they can be done over time or in phases, often building upon layouts that largely exist already.

“Building on principles that have made for perimeter success, we’re extending this to an initial six areas in center store, with great reception,” the retailer explained. “Te goal is to turn center store into engaging sections shoppers can easily relate to, rather than just a big ‘all other’ department called center store.”

Tis can often be done with minimal to no meaningful disruption to shoppers who know where to fnd a specifc product; longer-term change can be pursued as appropriate.

“An important point is, we need to fgure out a total-store strategy versus having isolated initiatives from various suppliers or departments that may overlap or contradict or not ft together into a cohesive whole that’s logical, develops synergies and is inviting to the shopper,” the retailer said.

Step 2: Create Excitement Within Each SBU — The 1st Of The 2Es Te focus in this step is to create strong excitement, a “wow” factor, within each SBU — to make each a compelling destination where shoppers want to shop.

Tis can begin with distinctive aisle signs using pictures. Lists of product types, and even numbers, can still be included, and some SBUs (e.g., beverages, HBC) may be more than one aisle.

“Te goal needs to be to make the entire store ame-

nable to more ‘intuitive shopping,’” the retailer noted.

Use of end aisles can highlight key products or new/emerging segments.

Focus should be on key physical/emotional needs, not just products lined up on shelf — for example, greater attention in OTC not just to treatment, but also prevention, a growing priority.

Each SBU should compete at or above standards of specialty outlets (in pet, beauty, bakery, GM, candy, beverages, etc.) that represent a key shopper “standard” and source of business.

Other elements — fooring, colors, and more over time — can create a personality and excitement within each SBU that makes shoppers want to visit.

Step 3: Incorporate the Full Set of Retail Tactics and Shopper Engagement With the 2nd Of The 2Es Tis step brings to life the 4Ps that have been the focus of conventional category/retail management for decades, and the second of the 2Es: engagement.

With SBUs — as opposed to solo categories — there are greater critical mass and opportunity to incorporate more impactful merchandising, instore services, stafng and other elements to build

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Feature

Ominchannel Retailing

Elements to Improve Shoppers’ Experience Importance-Delivery Gap 100% 96% 90 80 70 60 50 40 38% 30 20 10 0

98%

91%

96%

92% 87%

85%

80%

77%

73%

71%

71%

46%

46% 30%

—Beverage supplier

Potential Synergies Across SBUs Importantly, this is Step 4, not Step 1. Many suppliers and retailers have used this as Step 1 as an extension of their category management eforts — for example, putting milk in the cereal aisle or various other ideas. However, this has resulted in several shortcomings, including insufcient variety and operational difculties. Most crucially, it can result in one-of approaches in a handful of categories/brands, and never address the fundamental need to develop compelling SBUs and revitalize the total store.

Once Steps 1-3 have been addressed, this fourth step can add further value by considering shopper synergies from a total-store perspective not previously possible with conventional category boundaries and approaches.

Some examples: opportunities to increase the “home menu repertoire” of consumers for dinner or to provide more comprehensive “wellness solutions.” Several other possibilities can also be developed, and execution can include not

| Progressive Grocer | Ahead of What’s Next | March 2016

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In-store kiosk to place orders

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Home delivery options

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Ability to call ahead to place an order

Supplier Importance

engagement into the shopping experience.

Social media apps can also be aligned with individual SBUs rather than, for example, having notices pop up on a shopper’s mobile device at random as they walk across and down various aisles.

Tis alignment with social apps can provide two important benefts: further enhance shopper interest and involvement with each SBU, and provide simplicity and ease with the overall shopping trip.

Step 4: Examine Additional

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Retailer Delivery

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Technology Ability to and other shop at elements home and that not only pick up provide completed information, order at but engage store shoppers

Retailer Importance

Our company has to be willing and flexible to test and learn from solutions that will ultimately break the mold of traditional organization design.”

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Store personnel available to help shoppers

21%

21%

15%

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24%

23%

pp

23%

rs

24%

le

27%

44%

Su

28%

39%

31%

ta i

26%

25%

49%

Re

33%

Integrating Signage that similar provides categories to information provide and cues to unique and various meaningful sections shopping in the experiences store

46

89%

64%

ta i Re

96%

Shopping scanners to use shopping

Supplier Delivery

only physical adjacencies in-store, but also more near-term options, including low-cost steps with signage, conventional ad format and social media communications, to name a few.

Address Process and Organization Structure as Key Enablers When organizations seek to adapt to major changes in their business environments, process and organization structure can enable — or hinder — these eforts.

In today’s emerging omnichannel world, the need to address process and structure is particularly pronounced. In fact, when suppliers and retailers were asked to review several elements to improve shoppers’ experience, both groups indicated signifcant gaps between “importance” and “delivery” for their own organizations and businesses.

Process Needs Process defnes how “the (new) work of an organization gets done.” It plays a critical role in enabling market success, and it’s broadly recognized that “organizations deliver the exact results they are designed to deliver.” As such, our study has identifed opportunities in two key areas.

Te frst is a need to broaden the work of the organization beyond category level in a meaningful way, versus just a “quick fx” that’s not fully part of how one goes to market.

“Too much is being done by ‘bolting on’ to current process, versus rethinking how we need to manage for Continued on page 51

Roadmap to eCommerce Excellence:

Mastering Online Grocery Fulfllment

G

rocers are focusing on the fast-growing eCommerce channel and generating sales by meeting changing customer demands for online shopping experiences and convenience.

But they are also encountering challenges on the way from early stage online sites to more powerful integrated operational and fulfillment solutions and practices to capture much greater share of market.

In a study of grocery executives conducted by Progressive Grocer, for instance, frequently cited eCommerce pain points included operational challenges (69.2%), customer experience (53.8%), customer complaints (38.5%), incorrect order fulfillment (30.8%) and delivery fulfillment (23.1%).

Closing these gaps is a major goal for grocers engaged in eCommerce. Customers are demanding better online shopping experiences. And grocers want to cash in much more effectively on the enormous potential.

“Grocers are on the verge of reaping much more in the eCommerce arena. The industry has only just begun to realize the opportunities, both in eCommerce sales and operations,” said Kevin Kidd, Product Director, Mercatus Technologies Inc.

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eCommerce is capturing impressive sales — with much more growth to come.

Expanding customer demand and advances in grocers’ ability to fulfll online orders are ushering in the next stage in eCommerce business.

The Swift Growth of Online Grocery Sales Currently, most grocers are embracing eCommerce initiatives and realizing significant success from programs now in place. But they are also ready and looking to expand and capture greater share of wallet.

Grocery eCommerce revenues today often represent 1%2% of total sales and clearly prove the demand for online sales. But the opportunity is much higher.

Senior management at major grocery companies are looking for eCommerce to capture 6%, 8%, or even 10% of sales. Executives know they need to satisfy customers in whatever channel they choose to shop and that the pressure to do so will only increase.

To meet the next stage of eCommerce opportunity and goals, grocers are looking for new ways to achieve operational precision and productivity to enable associates to fill and deliver orders and to satisfy eCommerce customers at a much higher level.

Among the areas grocers must include in the checklist of areas ripe for improvement to reach eCommerce operational excellence are staffing, technology, data and processes.

But addressing those areas separately is not enough. Instead, a total integration and synchronization of all eCommerce touch points within the end-to-end operational framework is an absolute requirement.

Q&A with Mercatus: eCommerce Fulfllment for Success Why have you invested in the operational capabilities of your solutions?

We recognized an opportunity for improvement throughout the online order fulfillment lifecycle from both the shopper and grocer perspectives. Two common grocery challenges are eCommerce services not meeting customer expectations during the last mile of fulfillment and

The Four Pillars of eCommerce Operational Excellence This series will focus on four main pillars of eCommerce operational challenges that grocers must overcome to optimize online potential and achieve much higher sales volume.

“The challenge of eCommerce is converting on the booming demand into tangible sales,” Kevin Kidd said. “And delivering on the promise and capturing the full grocery basket. To achieve the latter, it is necessary to unify sales and operations in a centralized, integrated and fully transparent fulfillment solution,” he stated.

Among the most important challenges grocers face and must overcome, which will be covered in this four-part series, are: Fulfllment Grocers must implement a unified eCommerce fulfillment solution that encompasses all products and services offered in-store, with added convenience to shoppers and store associates serving those shoppers. Failure to do so results in disappointing shopper experiences and inevitably in lost sales. Moreover, cumbersome, disjointed eCommerce fulfillment capabilities impact staff morale and inevitably result in poor service.

Transparency Another key ingredient to true eCommerce success, to be explored in depth in Part Two of the series, is ensuring that the retailer has access to all information needed to effectively engage, convert and retain shoppers, including streamlining their operations throughout the entire order lifecycle.

the inability to scale for meeting growing demand.

A sustainable eCommerce solution should increase customer lifetime value. Only when grocers consistently deliver on online commitments and exceed shopper expectations throughout the entire experience can that goal be realized. Grocers also gain by realizing signifcant operational cost savings with our solution.

What is the network efect, and how does it beneft your clients?

A product or service becomes more valuable to members of a network as more people join in. In our case, clients beneft from other clients leveraging our platform. The network is a major contributor to our product roadmaps and ensures that our clients keep pace with the ever-evolving grocery market.

Mercatus has a disciplined approach for selecting which market needs we address and developing solutions that have the greatest impact. The capabilities we develop are confgurable to support the diverse needs of clients. These granular confgurations are instantly available and empower grocers to further refne and enhance their solution.

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Labor Efciencies Knowing precisely how many, where and when store associates are needed to prioritize operations from receiving and filing the order to delivering product is crucial for optimizing profitability and customer satisfaction.

Integrated Operations Finally, all segments of eCommerce operations must be integrated to produce superior results.

Major success comes only when all areas are merged with a centralized digital solution that can deliver improved productivity, higher sales goals and superior customer service.

Which trend is most prominent for grocers and for evolving eCommerce technologies in 2016?

Many grocers are evaluating or already in the process of “re-platforming” their eCommerce solutions. The motivation for re-platforming most often is that eCommerce demands have matured beyond the capabilities of the solution.

How can grocers gauge the impact of their eCommerce programs? What measurements should they use?

Grocers need to have multiple vantage points throughout the entire journey of the shopper. They need to look beyond average transaction size and total sales.

Grocers also need to avoid relying too heavily on conversion rates,

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The Impact of Inefcient Fulfllment on Customer Service Several factors are particularly frustrating for online customers.

The inability to choose and change delivery times to meet shoppers’ needs is one that ranks high. The same is true for changing orders— adding or deleting items — in progress, much less nearing delivery.

To customers used to ordering, changing and purchasing items at the touch of a button, difficulties in making what feels to shoppers like minor changes can be frustrating.

“Online eCommerce must integrate seamlessly with instore shopping experiences the shopper is already accustomed to. Retailers need to accommodate shoppers adding last minute products to already submitted online orders, or redeeming paper coupons at pickup,” Kidd said.

Other areas that frustrate shoppers and undermine the ability of grocers to successfully expand the online business include limiting the selection of items for purchase and refusing to honor all promotions and coupons offered in the store.

These are the types of missteps involving operational fulfillment systems that many grocers are grappling with and want to improve.

If anything, the ability to shop online should provide new possibilities to expand the range of items available for sale, to create an endless aisle, to upsell and cross-sell.

which results in more reactive rather than proactive actions. The right solution allows grocers to understand the key variables engaging, converting and retaining shoppers, and provides insights critical for sustainable growth.

Key areas grocers should understand include: Infuence of product substitutions on repeat business Confgured pick strategies on fulfllment throughput Production standards and actual production.

Grocers should also compare performance among stores, pickup and delivery; guest and member shoppers;

service hours; overall sales; and especially — Customer Lifetime Value.

What excites you the most about the solutions you and your team are creating?

We’re getting grocers to market faster, continuing to launch compelling eCommerce features for shoppers, and integrating with the best complementary technologies in the market. We are also further evolving our capacity scheduling algorithms that orchestrate online order fulfllment, and through prescriptive analytics personalizing online experiences on a 1-to-1 basis.

Q&A with Kevin Kidd, Product Director at Mercatus Technologies Inc.

Why limit selection, such as selling center store items in the store only, when grocers can expand into new categories that offer higher profit margins and attract customers to shop the site more fully and more often? The opportunity is at hand, and customer desire to shop online is increasing.

The Rewards of eCommerce Customer Appreciation Resolving these issues and expanding sales, profits, customer satisfaction and loyalty begins with leveraging the right eCommerce fulfillment solution.

Also critical is harnessing the power of all key tools involved in the eCommerce operations — people, processes, technologies and data. It is not just a matter of buying and installing a new technology application or stand-alone solution.

“Leveraging a unified fulfillment platform to direct, track, correct and perfect all aspects of online operations — from filling a diverse range of product orders to offering greater service and superior experience to customers — will bring a new level of success to the grocery industry,” Kidd said.

“Centralized digital platforms enable grocers to overcome a number of complex pain points, do so swiftly, and then grow the online business successfully and profitably,” he added.

Tracking of online shopping patterns, basket size, abandoned items and carts, and recognizing new patterns of customer behavior — made possible with the right centralized fulfillment solution — yield insights that allow grocers to customize offers and enhance shopper appreciation. Total basket size jumps when product availability and service levels rise.

Grocery Associates Remain Key to eCommerce Success The growth of online sales is mandating that grocers retool business practices — and that includes working processes and tools for store associates and managers.

With the right systems, grocery managers and associates gain real-time insights into incoming online orders, how best to pick and deliver orders, and how to improve all segments of the process more precisely.

Old practices such as transmitting order changes or other in-process variables — via paper notes, Post-its or fax machine — disappear. Similarly, call-center associates no longer need to call store associates to convey changes in order status.

Store associates picking and packing online orders must be able to work from a single centralized system, to eliminate wasted time, excess labor, failure to make requested changes in orders and more.

“We are now able to accommodate these types of changes. The alternative is inefficient. With a unified digital platform, all workflow scenarios are accounted for, and the business runs much more smoothly. Antiquated practices can be phased out, and improved methods implemented efficiently and quickly,” Kidd said.

“We are ready to dial things up. If we continue on the present path, without an integrated fulfillment solution, grocers will have to double resources,” Kidd said.

Grocers are increasingly leveraging these types of fulfillment solutions to ensure that every step of the process is tracked, recorded and fully visible — to associates and customers alike.

The result is much higher customer satisfaction levels and higher productivity and morale for all associates involved in eCommerce operations The bottom line is that grocers who want to thrive at eCommerce must leverage the power of new operational fulfillment solutions to meet increasing shoppers’ demands.

Those who do so will stand the best chance of beating the competition and succeeding in the long term.

The next section in the this four-part series will focus on transparency and the need for retailers to have more visibility into all information required to eliminate wasted efforts, streamline operations and boost customer satisfaction and appreciation throughout the entire order process.

Food FoR ThouGhT

Visit our hub for industry insights & additional resources.

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Omnichannel Retailing

Feature

Continued from page 46

success today and tomorrow,” one retailer remarked.

Te second is to ensure that objectives and incentives at the top of an organization are consistent with those at lower levels. Tis may sound obvious, but retailers and suppliers noted multiple examples where these can be signifcantly out of sync.

Organization Structure Needs Structure is related to process. Since most structures were developed decades ago with the introduction of brand/category management, a key need in today’s very diferent omnichannel environment is to revisit certain underlying principles of one’s structure.

With both retailers and suppliers, for example, structure must be able to align with the retailer’s need to prioritize 150-plus category solutions into a unifed whole to excite/engage shoppers and create diferentiation.

“Our company has to be willing and fexible to test and learn from solutions that will ultimately break the mold of traditional organization design,” a leading beverage supplier said.

Looking ahead, more than half of retailers expressed interest in a supplier role above category captain that could be aspired to, with a more strategic focus to consider broader shopper/store needs.

New Benchmarking Approach Study respondents — suppliers and retailers — indicated that in a fundamentally diferent and ever-changing business environment, a diferent benchmarking approach is needed that provides deeper insights and greater actionability.

It was noted that current benchmarking tools, while helpful, focus on external perceptions and broad recommendations.

“Current rating systems are interesting,” a supplier observed, “but focus on general industry or overall observations, versus an in-depth understanding and assessment of my strategies and actions, specifc to my organization.”

An expanded approach is needed, with focus on internal process, goals and capabilities.

“To truly understand what’s working and [what’s] not, and especially to develop actionable outputs that can improve our organization efectiveness, we need to address our internal processes,” a general merchandise supplier responded.

Actionability must then address organizationspecifc areas, including “knowledge estate,” research tools, innovation protocols and strategic selling platform. Te goal is to build the bridge from who/where we are today to who/where we need to be tomorrow.

“Improvements in benchmarking would provide specifc action steps, instead of broad eforts, to help drive changes required for a total-store approach,” the beverage supplier said.

Action Items: Retailers/Suppliers Create a capability above category management to address higher-level shopper and store needs; over time, this may also include a supplier role above category captain to support this higher-level focus.

Review new product development protocols to enhance focus on market space opportunities outside conventional category defnitions with shoppers and at retail.

Identify SBUs and leverage a full range of tactics: 4Ps plus 2Es. Defne a vision/roadmap to achieve newly defned goals; change the conversation and strategic focus from “perimeter/center store” to “integrate and engage across the total store.”

Review your business process and organization structure to ensure alignment with new requirements for success.

Why should the pet aisle look the same as household cleaning or snacks or HBC? These sections need to connect with shoppers, not just provide products.”

—Retailer

Consider a diferent benchmarking process — both qualitative and quantitative — to defne your current state and measure progress.

Summary: What’s Next?

Future releases of “Envision” will build on the foundation this study has established, with deep dives in such areas as e-commerce best practices and brand/ retail loyalty in an omnichannel world.

Key elements of the next release will be an update on continuous market changes/implications and a deep dive on e-commerce best practices for retailers and suppliers. PG For more information on your specific category or department, contact Ted Taft at Meridian-NorthStar Partners, ttaft@meridiannorthstar.com, 203-981-5759, or Jeff Friedman, Progressive Grocer, jfriedman@stagnitomail.com, 201-856-7621.

March 2016 | progressivegrocer.com |

51

Feature

Marketing & Merchandising

Sound

Strategies Driving health in-store requires the cooperation of various stakeholders.

By Bridget Goldschmidt

S

hoppers are taking charge of their health like never before, and the grocery industry is favorably situated to help them do so.

“Consumer-driven health care is a trend that will only grow in prominence as more shoppers recognize and act on the personal connections they have between food selections and their health,” afrms Sue Borra, a registered dietitian and SVP of communications and strategic planning at Arlington, Va.-based Food Marketing Institute (FMI).

“Many food retailers are capitalizing on this trend and making the transformation to be a destination for health and wellness in the community.”

“Grocers have a unique opportunity to become destinations for shoppers

52

| Progressive Grocer | Ahead of What’s Next | March 2016

interested in changing their dietary habits: they are food experts, consumers trust their local store, and they have the frequency to efectively communicate with shoppers,” notes Jef Weidauer, VP marketing and strategy at Little Rock, Ark.-based Vestcom International Inc., which ofers the HealthyAisles in-store nutrition marketing program.

“Since the nation’s grocery stores understand shoppers’ need for solutions in-store, grocers are identifying their own unique strategies that bridge the gap between food and pharmacy to help support their customers’ overall wellness goals,” says Borra.

“We’re witnessing more attention to health-and-wellness programs that beneft the shopper — more

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Marketing & Merchandising

than 90 percent of our food retailers report programs related to community health events to healthy recipe development to cooking demonstrations to screening and counseling.”

Tese types of programs tie in with the idea of becoming an integral partner in wellness. “Grocers have begun positioning themselves as an extension of the health care team, with the addition of on-staf registered dietitians and chefs who lead in-store nutrition and culinary initiatives, and by ofering health monitoring services like blood pressure and blood sugar screenings,” notes Jaime Schwartz Cohen, an RD and director of nutrition at Ketchum, a New York-based public relations and marketing agency.

“To be seen as a healthy destination, grocers should look to ofer services that align with a healthy lifestyle. Tis includes ofering experiences like family activities, couples nights and yoga classes.”

The rapidly growing role of the supermarket RD is critical to both the success of the store and its shoppers.”

—Sue Borra, Food Marketing Institute

54

The RD Difference As Cohen points out, in-store registered dietitians (RDs) can make a big diference when it comes to connecting with consumers on matters of health.

“Te rapidly growing role of the supermarket RD is critical to both the success of the store and its shoppers,” agrees FMI’s Borra. “Our surveys and research demonstrate how retail dietitians can leverage these shopper trends to develop a successful and competitive health-and-wellness program in their stores.”

For its part, Ketchum works closely with retail dietitians on in-store initiatives.

“Our most successful initiatives have been when we helped bridge communications and shopper marketing teams with retailers’ merchandising and RD teams,” notes Cohen. “In one example of this integrated-teams approach, we obtained a schedule for when a product was on promotion at a regional retailer and provided co-branded recipe cards to the retail RDs featuring the product as an ingredient in a recipe. Additionally, we developed a how-to guide for cross-merchandising the product on promotion with the other ingredients in the recipe. A post-survey among the retail RDs indicated that the assets and resources we provided were very well received.”

Keasbey, N.J.-based Wakefern Food Corp., a retailer cooperative whose members operate ShopRite stores across New York, New Jersey, Connecticut, Pennsylvania, Delaware and Connecticut, leverages the power of the RD through its Dietitian’s Selection initiative.

According to Manager of Health and Wellness Natalie Menza, herself an RD: “Tis program enables our in-store dietitians to curate and highlight items that give our customers ideas on how to add

| Progressive Grocer | Ahead of What’s Next | March 2016

new, healthy foods to their meals and snacks. In addition, our team of over 125 in-store dietitians … is dedicated to answering customer questions about health and wellness, assisting them in reading product labels, and overall, giving them ideas and options for healthy meal planning.”

ShopRite RDs also stand ready to bolster the resolve of customers to improve their health. “Since January is one of the most popular times of the year to think about starting new habits, during this month we kicked of our six-week weight management series called Eat Well, Be Happy,” notes Menza. “During this program, customers — and many of our associates — sign up for group/interactive sessions where our in-store dietitians take them through education and inspiration for building and maintaining a healthy weight. Te program is very popular, and we’ll be holding it again next fall.”

She adds, “I think the best way to address consumers’ wellness needs is to talk to them, be transparent and give [them] what they need and want,” although cautioning that “education without inspiration is just knowledge without action.”

Accordingly, “our in-store dietitians work to not only tell customers about health-and-wellness initiatives,” Menza says, “but show them how easy it is to make healthy eating choices a part of their everyday lives through education and in-store demos.”

Unmixed Messages According to Vestcom’s Weidauer, “A consistent message throughout the store — ideally at the shelf edge where the purchase decision is made — is the frst step” for a retailer to become a health-and-wellness destination, and an excellent way to communicate that message is through shelf tags and signage.

ShopRite, for one, employs “prominent shelf tags that call out specifc attributes like ‘low sodium,’ ‘heart healthy,’ ‘lactose-free’ or ‘gluten-free,’” says Menza, adding that the Dietitian’s Selection program also makes use of distinct signage.

Meanwhile, Weidauer describes HealthyAisles, currently in more than 13,000 stores operated by 35-plus retailers, as “a white-label solution based on FDA and USDA guidelines that delivers relevant

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Marketing & Merchandising

ing must be present even in those parts of the store less associated with superior nutrition: “Include all departments, [among them] center store and frozen, not just the fresh perimeter.”

Sign langUage Vestcom’s Healthyaisles in-store program gives shoppers at-a-glance nutritional information about products.

product attributes to shoppers at the shelf edge, [using] standard terms like ‘low sodium,’ ‘gluten-free’ and ‘heart healthy’ to defne up to three attributes on a shelf tag. With more than 70 available attributes, retailers can ofer a custom solution to shoppers that helps them fnd the products they are looking for.”

According to Weidauer, “Feedback from grocers and shoppers has been consistently positive, praising the ease of use, customizable nature and alignment with government guidelines.”

He emphasizes, however, that healthy messag-

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Freshening Up Still, the perimeter is a great place to start, particularly produce, since it’s often the frst section shoppers encounter when entering a store.

“Shoppers judge a retailer’s commitment to their wellness by the quality and range of their fresh oferings,” observes Carl Jorgensen, director, global consumer strategy — wellness at Stamford, Conn.based Daymon Worldwide. “If the customer sees plenty of organic fruits and vegetables, including superfoods that are called out and described, the grocer is identifed as a healthy destination.”

Besides informing customers about the nutritional attributes of produce, grocers should tell them where it’s from. “‘Local’ is associated with fresher, healthier food, and the local claim is most important in the produce department,” says Jorgensen, citing a recent Harris Poll. “Narratives and visuals about the farmers and their growing methods add to the healthy positioning.”

With the right program in place, produce can appeal to even the youngest, pickiest consumers.

“We just ended a very successful 2015 where we introduced our new Kids Club, which is a loyalty-based program that encourages shoppers to purchase at least two of our produce partners’ items in order to receive a receipt code to join the Produce for Kids Club,” observes Trish James, VP at Orlando, Fla.-based Produce for Kids.

“Shoppers entered their code at ProduceforKidsClub.com, and then received a complete welcome kit in the mail to get their family started on a healthy path in the kitchen. Te welcome packet includes coupons from partner produce companies to encourage further purchase and consumption of these items. In 2016, we will execute Kids Club programs with both Niemann Foods and Harps Food Stores. Our fagship campaigns will continue in 2016 with added educational elements for shoppers.”

As regards merchandising, James asserts: “We feel strongly about ofering a quick and healthy meal solution to shoppers through a combination cooler case where all ingredients are available. It’s also important to have fresh-cut produce items accessible to busy shoppers who are looking for healthy options, but don’t have a lot of time to prep items. Te fresh-cut area is also where families who are involved in spring/summer sports will grab what they can to take along to a game or event.”

Beyond produce, the National Turkey Federation (NTF), based in Washington, D.C., recommends that supermarkets feature an easy-to-prepare meal solution/recipe of the week that meets healthy cri-

Feature

Come And Get it Produce for Kids seeks to answer “What’s for dinner?” with convienent displays of ingredients.

Marketing & Merchandising

teria, make it afordable by ofering temporary price reductions on at least one or two key ingredients, merchandise the ingredients together for convenience and ofer recipe sampling during high-trafc hours.

Registered dietitian/nutritionist Karen Buch, an NTF adviser and PG columnist, suggests crossmerchandising all of the ingredients needed to make a healthful Turkey Chili by displaying 99 percent lean ground turkey and bagged cheese shreds in a cold case, with shelf-stable items such as canned beans, onions, garlic, jalapeño peppers and spices nearby. Further, to make sure people know how to make the dish at home, stores should provide recipe cards that feature an appetizing recipe photo, simple prep steps and a link to an instructional video.

Frozen — and Shelf-stable — Assets Te frozen food section also provides opportunities for suppliers to team up with grocers to help consumers get and stay healthy.

“We continuously participate in and support — including sales pricing — in-store and other consumer education-oriented programs,” says Amy Lotker, owner/EVP of sales and marketing at Delray Beach, Fla.-based Better For You Foods LLC, a maker of frozen pizzas crafted from whole grains and featuring fewer calories and less fat, cholesterol and sodium than competing products. “Manufacturers have a responsibility to educate grocers about why they’ve chosen to produce items with a healthier nutrition profle — and why this is important to the consumer. Likewise, we need to educate grocers about the healthy behaviors and trends we’re satisfying, so that they know how to properly communicate benefts to consumers.”

Te same holds true in center store, which is often unfairly maligned as a section with few healthy choices.

“Companies like ConAgra are well positioned to help grocers promote health by providing health-

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Shoppers judge a retailer’s commitment to their wellness by the quality and range of their fresh offerings.”

—Carl Jorgensen, Daymon Worldwide

60

Marketing & Merchandising

focused foods across meal and snack categories,” notes Kristin Reimers, director of nutrition at the Omaha, Neb.-based company, which ofers foods in the frozen and center store categories. “Successful manufacturers and retailers must be partners in the endeavor to provide consumers a wide variety of foods to be enjoyed across all eating occasions, with a focus on the values we share with consumers: safe and wholesome food, pleasure, transparency, and health.”

According to Nicolas Martinez, ConAgra’s director, shopper insights, it’s “[c]ritical that retailers have category assortments that more completely meet the diferent and relevant health needs of their shoppers,” suggesting that grocers establish locations within stores where shoppers can more easily fnd all of the options related to a specifc health need, like natural/gluten-free/organic. He adds that emerging retail concepts are

| Progressive Grocer | Ahead of What’s Next | March 2016

increasingly playing up the nutrition angle, pointing to “new store formats focused on driving specifc experiences around healthy and fresh eating.”

Education is especially important for products still building a following, such as non-GMO Certifed Amrita Bars, which are made with organic dates, seeds and plant-based protein; free of the top allergens; and packed with superfoods like chia seeds, coconut, maca and sunfower seeds.

Arshad Bahl, CEO and founder of Pleasantville, N.Y.-based Amrita Health Foods, notes that manufacturers can help retailers promote healthy products by “spending the time to educate the staf at the ground level on how to listen to customers’ requests and concerns, and suggest … better alternatives.”

Tat level of teamwork is here to stay. “Retailers and manufacturers will continue to play a symbiotic role in addressing consumers’ health concerns, with the manufacturer

innovating with new products that meet consumer needs, and the retailer evolving their ofer to provide services that align with a healthier lifestyle,” predicts Ketchum’s Cohen.

Health Evolution But the quest for health doesn’t involve just grocers and suppliers, as important as they can be in engaging consumers on the subject and keeping them on track.

“Te way forward is for retailers and manufacturers to position themselves as trusted partners in their customers’ wellness journey,” advises Daymon’s Jorgensen. “Retailers need to understand that journey so well that they know what their customers want and need before they walk in the store. Tis also means engaging and partnering with wellness communities beyond the store, such as with ftness groups, local food networks, and environmental groups that are making the connections between individual health and global sustainability. Tis opportunity also includes groups with ethical concerns around food deserts, fair farm labor and animal welfare.”

To that point, “grocers must recognize that what ‘healthy’ means to consumers has evolved,” observes Cohen. “According to Ketchum’s ‘Food 2020,’ the

frm’s proprietary consumer research project now in its fourth wave, healthy eating encompasses factors beyond a balanced meal, such as where and how food is grown, how it’s packaged and labeled, and how a company treats the environment and their employees.”

As the idea of health continues to evolve, the grocery industry must ensure it remains top of mind for consumers interested in living their best life by ofering the right products, support and information.

With all that in mind, what will the average health-focused grocery store of tomorrow look like? “I am imagining a scenario in which you go to your local supermarket to stock up on provisions for the week, and while there, you get your healthy prepared dinner for the evening meal, your prescriptions reflled, your blood pressure checked and recorded in your medical fle — triggering a hypertension consult with a registered dietitian who makes some food recommendations to complement your medicines,” says FMI’s Borra. “For many food retailers, this is all happening now.” PG

Retailers and manufacturers will continue to play a symbiotic role in addressing consumers’ health concerns.”

—Jaime Schwartz Cohen, Ketchum

To learn more about how grocers can educate consumers about healthy eating, visit Progressivegrocer.com/healthyeating.

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Grocery

Meat Snacks

The Proof is in the

Protein Nutrition and snacking trends herald a new generation of jerky.

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he convergence of trends in snacking, protein, portability, bold favors, less processing and “real food” have been a boon for meat snacks, which have evolved far beyond their historic image as a few pegs at the c-store or truck stop checkout.

“Consumers seem to be actively seeking out meat snacks as alternatives to chips [and other salty snacks] as a healthier option for snacking and convenient sources of protein,” affirms Dave Savidge, director of meat and seafood at Wooster, Ohio-based grocery store chain Buehler’s.

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Amid a total snack food category exceeding $13 billion, meat snacks generated more than $383 million in sales for the year ending Dec. 19, 2015, according to data from Schaumburg, Ill.-based Nielsen. Teir 14.5 percent growth in sales for that period was second only to popped popcorn, which grew more than 16 percent to just more than $399 million, while much larger salty snack categories like potato chips and pretzels were fat.

“In our stores, we’ve seen category sales more than double in the last year,” Savidge says. “We expect continued growth as new items are introduced and innovation comes into the category.”

| Progressive Grocer | Ahead of What’s Next | March 2016

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Grocery

Meat Snacks

Evolving Demographics While the nutrition community might be torn on whether to classify meat snacks as a health food (see sidebar on page 67), product manufacturers are jumping on that bandwagon.

To be sure, Tony Dunning, EVP of customer development at Minong, Wis.-based Jack Link’s, referred to his employer as a “protein snack com-

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pany” during an interview with Progressive Grocer at the Food Marketing Institute’s Midwinter Conference in January. “Our core focal point originally was meat snacks and still is meat snacks today, but we’re evolving into many diferent proteins,” Dunning told Joan Driggs, PG’s editorial director.

Dunning also dispelled a myth about the key audience for meat snacks, assumed by many to be predominantly men, as suggested by Jack Link’s male-dominated, Sasquatch-themed ad campaign.

“A lot of people think the core audience for beef jerky is 80 percent or 90 percent male and 10 percent or 20 percent female, when in fact it’s actually 55 percent male, 45 percent female, because protein is in big demand right now,” Dunning said. “Tere’s a lot of tailwinds around protein, and we’re really proud of the fact that we’ve led that charge. We’ve found great success through innovation and continuing to make sure we deliver on quality and fun, which is what the brand is really all about.”

Tat innovation has resulted in what you might call the softer side of Jack Link’s: Lorissa’s Kitchen, a new line of meat snacks made with grass-fed beef, sustainably raised pork and antibiotic-free chicken, and free of gluten, MSG and nitrates.

Te brand is named for the wife of President and CEO Troy Link. “She’s had a big hand in developing this brand and bringing it to market, and we’re really excited about it,” Dunning explained. “Tere really hasn’t been anything to cater to the female consumer in our space.”

According to Dunning, Lorissa’s Kitchen, which includes favors such as Szechwan Peppercorn Beef and Ginger Teriyaki Chicken, targets specifc consumer segments. “It really caters to the ‘Natural Nourisher,’ as far as getting the right thing into her body, the way she wants to shop for herself,” he said, “and there’s really fun favors that allow her to extend beyond the typical favors you see in our category.”

Gourmet Pedigrees To be sure, jerky varieties have moved well beyond the basics.

Te newest brands are leveraging desires for authentic favors and minimal processing.

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Grocery

What happened in craft beer is happening in meat snacks.

We’ve found that the creativity and smallbatch care we put into our meats really resonates with existing and new meat snack category buyers.”

—Greg O’Neal, Duke’s Smoked Meats

Meat Snacks

“People are looking for less mass-produced snacks and foods,” says Greg O’Neal, VP of marketing for Boulder, Colo.-based Duke’s Smoked Meats. “What happened in craft beer is happening in meat snacks.

We’ve found that the creativity and small-batch care we put into our meats really resonates with existing and new meat snack category buyers.”

Additionally, O’Neal notes that “more people want real-food snacks. Tey are reading labels to make sure that ingredients are simple and recognizable. Healthier, more premium meat snacks ofer consumers this beneft.”

Te latest products from Duke’s feature ingredients like whole roasted Hatch green chiles, diced Serrano peppers, vine-ripened tomatoes, real lime juice and freshly chopped cilantro. “Our Smoked Shorty Sausages are growing rapidly in popularity,” O’Neal says. “We are expanding our lineup to include new favors as well as new proteins like chicken. By using higher-quality real ingredients and a no-shortcut process, we are able to get loads of favor into our Smoked Shorty Sausages without using much sugar at all.”

Similarly, Naples, Fla.-based Chef ’s Cut Real Jerky claims to “use only premium cuts of steak and

Dollar Sales

Percent in Dollar Sales

Total Snacks

$13.14 Billion

+3.6%

Meat Snacks

$383.4 Million

+14.5

Pork Rinds

$109.1 Million

+5.8

Corn Chips

$363.8 Million

+3.3

Popcorn-Popped

$399.3 Million

+16.4

Popcorn-Unpopped $517.2 Million

-4.9

Potato Chips

$3.43 Billion

+0.1

Pretzels

$836.7 Million

-0.2

Source: The Nielsen Co., 52 weeks ending Dec. 19, 2015, at stores with sales of more than $2 million

white breast meat,” while Lawless Jerky, hailing from Brooklyn, N.Y., is “hand-crafted, Americanmade jerky from 100 percent grass-fed beef and pork, free of added hormones, antibiotics or preservatives,” in favors like Sweet Sriracha, Aloha Teriyaki, Pho, Japanese Curry and BBQ Spare Rib. And Kent, Wash.-based Oberto Brands ofers its All Natural line with “clean, simple ingredients.”

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| Progressive Grocer | Ahead of What’s Next | March 2016

RDs Split on Jerky Healthy Halo Bart Silvestro, CEO of Chef ’s Cut, says jerky “is becoming not only an acceptable source of protein, but a recommended one. Some articles have even described jerky as ‘the new, more convenient Greek yogurt.’”

O’Neal agrees. “More consumers are open to eating meat, and eating meat on more occasions as snacks, creating a natural tailwind that benefts the meat snacks category,” he asserts. “Additionally, over the last fve years, the category has widened and deepened to include more creative and favorful alternatives to the conventional jerky and sausage stick brands on the shelf. From favors, formats and functionality, the meat snacks category has a broader appeal than ever before.” Further, as snacking supplants traditional mealtimes, “meat-based protein snacks are the perfect meal replacement,” O’Neal says.

Te folks at Oberto see the same opportunities. “Te meat snack category is positioned to be a huge benefactor of the current health trends,” says Stephen O’Hare, the company’s senior brand manager. “America’s increasing interest in lean protein and reducing carbs puts jerky in a fantastic position for growth. Couple the health-and-wellness trends with the increase in snacking, especially among Millennials, and it clearly explains the double-digit growth that the category has experienced.”

Te challenge for meat snack manufacturers, according to O’Hare, is that “the past reputation of jerky can muddle the message. Often, both consumers and retailers miss the link of health and wellness to lean protein-packed jerky.” Positioning meat snacks as “a fantastic fuel for physically active adults will help overcome these lingering perceptions,” he says.

Driving Sales How should grocers be taking advantage of the meat snack boom?

“Te more progressive they are in recognizing the industry buzz and the consumer demands about specifc categories, the more successful they will be,” Chef ’s Cut’s Silvestro says. “Millennials do not shop today in a traditional manner, so it’s important for grocers to make sure they have

As manufacturers of meat snacks position their products as a healthy, protein-rich snacking option, those offering grocery shoppers nutrition advice aren’t totally sold on the idea.

“We don’t typically advise customers on processed meats as healthy snack options,” Peggy Balboa, retail dietitian for Chicago-area Mariano’s Fresh Market stores, tells Progressive Grocer. “Most RDs [registered dietitians] follow guidelines issued through the Academy of Nutrition and Dietetics, the American Heart Association, and the American Cancer Association. Their guidelines suggest limiting red meat and all processed meats — limiting, but not avoiding.”

Leah McGrath, RD for Asheville, N.C.-based Ingles Markets, expressed similar caution in a Twitter exchange, noting that meat snacks like jerky are “typically high in sodium,” and thus “not so great” health-wise.

More enthusiastic is Betsy Ramirez, an RD and nutrition consultant who operates the website SupermarketNutrition.com. “It’s a great source of protein for people on the go,” she says, advising consumers to “choose more health-conscious brands that are lean and lower in sodium.” Ramirez names Hershey’s Krave brand and Simply Snackin’, an Oshkosh, Wis.-based gourmet jerky brand, as good choices.

Krave bills itself on its website as the “healthier anytime snack,” while Simply Snackin’ calls itself the “preferred on-the-go, protein-rich snack choice of people looking for a snack to support their health-and-wellness goals.”

secondary placement of hot items to encourage the impulse purchase.”

O’Neal, of Duke’s, recommends a three-part strategy: grow oferings to include a variety of protein types, favors and formats; support merchandising of good/better/best in the category, to reach a range of shoppers and demonstrate evolution beyond “old conventional jerky and sausages”; and cross-merchandise meat snacks with protein bars, deli, produce, craft beer and gourmet cheese to drive awareness and usage occasion.

“Grocery could capture a larger share — and, more than likely, expand overall sales of meat snacks — with consistent visible placement, such as jerky at the checkstand, expanded set sizes and in-store category signage,” Oberto’s O’Hare says. “Jerky, like most in the snack segment, is an impulse purchase, yet its location and shelf space allocation in many grocery chains does not refect this, or the relative size.”

Oberto’s focus this year is “to further push the expansion of usage occasions beyond the road trip and the traditional jerky consumer” with multipacks, O’Hare explains. “Each bag has six 0.75-ounce bags that further align with consumer snacking trends of on-the-go and portion control.”

Oberto is also building promotions around professional athletes such as NFL stars Richard Sherman and March 2016 | progressivegrocer.com |

67

Grocery

Meat Snacks

Rob Gronkowski and MLB All-Star Hunter Pence to intensify its successful marketing eforts centered on the active-lifestyle demographic.

Millennials do not shop today in a traditional manner, so it’s important for grocers to make sure they have secondary placement of hot items to encourage the impulse purchase.”

—Bart Silvestro, Chef’s Cut Real Jerky

68

A New Generation Te evolution of meat snacks has spawned new brands that are reinventing the category with jerkysnack bar hybrids that appeal to younger demographics and health-conscious consumers.

Austin, Texas-based Epic, recently acquired by General Mills, makes organic meat bars flled with nuts and dried fruit, for instance.

“Te next evolution of the meat snack category is the incorporation of diferent species of animals,” asserts Taylor Collins, Epic’s co-founder. “Right now, every meat snacks company on the planet makes a beef product and a chicken product. Tere is a lack of creativity here, and consumers are demanding variety with their protein options. We are launching a handful of exciting new products in 2016 that will fll these needs.”

Collins adds, “Companies that are committed to purchasing high-quality animals that are humanely raised and fed diets that are consistent with the evolution of the species are the brands best positioned to beneft in the meat snack category.”

Epic works with grocery retailers to boost the visibility of meat snacks by creating innovative items “that are disrupting stagnant categories of the store,” Collins explains. “Epic produces meat snacks that can be merchandised in over fve diferent areas of the store. Tis gives our product more merchandising fexibility and introduces meat-based foods into new areas of the store.”

La Farge, Wis.-based Organic Prairie, the meat brand produced by the farmer-owned Organic Valley dairy cooperative, last fall launched Mighty Bar, which it bills as the frst certifed-organic, 100 percent grass-fed beef meat snack.

Available in Cranberry & Sunfower Seed and Bacon & Apple favors, the shelf-stable snack delivers 8 grams of protein and 3.5 grams of fat per bar, and includes unsweetened dried fruits and a “minimum amount of sugar,” for a glycemic index of less than 1.

And Lafayette, Calif.-based Caveman Foods makes the Chicken Primal Bar, a Paleo-inspired (unprocessed nuts, seeds, fruit, vegetables and lean meats) meat-based protein bar in Smoked Jalapeño, Blueberry Pepper and Sweet Cherry varieties, each ofering 18 grams of protein, 3 grams or less of fat, and 120 to 150 calories per bar.

“Tere’s a reason why our meat products are only made with chicken,” the brand’s website explains.

“It’s a complete protein with a high PER (protein efciency ratio), … a protein’s ability to promote growth and development of lean muscle. … Chicken is a lean, mean muscle-building protein with lots of amino acids, little to no fat and is easily digestible.”

| Progressive Grocer | Ahead of What’s Next | March 2016

Today and Tomorrow What’s next for meat snacks?

“We see a lot of evolution in the types of proteins being used and the unique favor profles companies are using,” says Silvestro, of Chef ’s Cut. “In order to keep up, we are all going to have to focus on trends and what consumers’ preferences are in regard to jerky, but also to their general food tastes. ... As always, when you are talking about food, it all starts with great taste.”

O’Neal, of Duke’s, says that as expectations of existing category buyers expand and new category buyers enter, “we think people will be looking for new formats that are creative but familiar, and higher levels of meat quality. We also think people will be more and more aware of the amount of sugar in their meat snacks.”

While Oberto’s O’Hare expects exotic favor expansion to drive interest and some growth among the “jerky curious” and fringe users, “we believe the demand for lean protein and reduced carbs is not going away and traditional favors will remain a signifcant majority of sales.”

As such, O’Hare says, real growth of meat snacks will occur as the product begins to pop up in unexpected places and in diferent formats. “Grocers will best take advantage of this by making it clear that they are a purveyor of meat snacks,” he says, “with prominent jerky placement and displays that truly refect the category size of not just today, but tomorrow as well.” PG Watch PG’s complete interview with Jack Link’s Tony Dunning at Progressivegrocer.com.

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Dips & Dressings

Refrigerated & Frozen

Dare to

Dip

Makers of refrigerated dips and dressings are highlighting health and convenience, along with flavor.

By Bridget Goldschmidt

T

here’s no doubt about it: Americans are eating diferently. Not only are many turning from traditional meals to snacks, but they’re choosing to fll up on more nutritious items, which they’d frequently prefer to eat on the go. But the products still have to taste great, too.

Te intersections of these trends are where manufacturers of refrigerated dips and dressings see opportunities to expand their segments, which are already looking up: refrigerated salad dressings’ dollar sales were up 6.1 percent, according to Nielsen fgures for the 52 weeks ended Dec. 19, 2015, while those of refrigerated dips had grown 1.9 percent, after several years of fat to negative sales.

“Tese days, consumers are looking for dips that are made with high-quality, clean ingredients, but still pack bold favor combinations,” asserts Stephanie Robbins, director of brand development at Union City, Calif.-based La Terra Fina, which offers various dips and quiches. “Tey want their dips to complement not only chips, but also a range of dippers like crackers, vegetables and fries, as well as sandwiches and wraps. We think this can be largely attributed to consumers’ busy lifestyles and the trend of healthy snacking over large sit-down meals.

[Shoppers are] increasingly turning to versatile products that are both convenient and healthy.”

Continues Robbins, “At La Terra Fina, we’ve always kept our consumers’ shifting lifestyles in mind — which is why our dips and spreads are

March 2016 | progressivegrocer.com |

69

Nonfoods RefrigeratedCategory & Frozen

Dips & Dressings

made without artifcial preservatives and we use only clean, recognizable ingredients.”

Stacey Miller, senior brand manager at Sandpoint, Idahobased dressing and dip maker Litehouse Foods, afrms, “Consumers are looking for healthier, cleaner foods for

themselves and their families,” pointing to the explosive growth of organic products, led by fruit and vegetables, and shoppers’ rising interest in such other attributes as non-GMO and gluten-free. “As a company, we are moving towards providing natural-channel consumers with the healthy products they are looking for,” she adds, while noting, “Te consumer’s appetite for new favors continues to grow, and according to Packaged Facts, 53 percent of consumers are seeking bolder favors.”

None of this is news to Lynn Stachnick, brand manager at Taunton, Mass.-based Tribe, who observes that consumers, while seeking better nutrition and ease of preparation/ portability, “know they like regular hummus, so now they’re on the hunt for new, standout favors to serve as their snacks. Exciting favors are really driving the category.”

Continuing Innovation Recently introduced products from all three companies strive to meet these consumer needs.

“We’re seeing consumers looking for more ways to increase their plantbased food intake as well, so we have varieties such as Spinach, Artichoke & Parmesan Dip & Spread and Spinach & Kale Dip & Spread made with Greek yogurt,” says La Terra Fina’s Robbins. “Not only do our products ofer a yummy way to enjoy more vegetables, but when you scoop with carrots, sweet peppers, cucumber, celery and the like, it’s a very satisfying eating experience with tons of veggies.”

Another on-trend ofering is the company’s segment-straddling Organic Ranch Dip & Dressing, introduced last year. “Tis is made with organic Greek yogurt and was created with our healthconscious consumers in mind,” explains Robbins. “We were very mindful that ‘healthful’ cannot be without deep, rich favors. With just 50 calories per serving, this new product ofers naturally deli-

70

| Progressive Grocer | Ahead of What’s Next | March 2016

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Refrigerated & Frozen

Keeping the shelf fresh with new flavors, new look and feel to the packaging, and crosspromoting with other brands helps keep the category as fresh as the produce we sit next to on the shelf.”

—Stacey Miller, Litehouse Foods

72

Dips & Dressings

cious favor, coupled with the kind of ingredients and nutritionals consumers are demanding.”

Litehouse, the top-selling refrigerated organic salad dressing brand, has been similarly busy in the realms of product and packaging innovation. For instance, the company recently refreshed its bottle design and launched two additions to its Organic Dressings & Vinaigrettes line. “Te new look refects the fresh goodness of the product and features the certifcations that consumers are seeking: USDA Certifed Organic, Non-GMO Project Verifed and GlutenFree Certifed,” notes Miller. “Te new favors, Rosemary Balsamic and Ginger with Honey, join the Litehouse Organics family of award-winning dressings made with care by its employee-owners.”

Further, in answer to consumer demand for clean ingredients and transparency, Litehouse last year rolled out Green Garden, which Miller describes as “a line of wholesome, clean, refrigerated dressings that are NonGMO Project Verifed, USDA Certifed Organic and Gluten-Free Certifed.” Te dressings feature USDA Certifed Organic ingredients such as extra-virgin olive oil, pomegranate, lime and orange juice, and are seasoned with rosemary, cumin and hibiscus.

What’s more, on the Greek yogurt front, the manufacturer expanded its successful OPA by Litehouse Greek Yogurt Dressings line to include the industry’s frst pourable Greek yogurt-based dressing, and grew its Opadipity Greek Yogurt Dip line with three new options: Spicy Asiago Artichoke, Greek Olive and Cinnamon Swirl. “Since launching Opadipity in 2014, the dip quickly became a category leader,” notes Miller, citing IRI data that the brand “is responsible for fueling 48 percent of the veggie dip category growth in the U.S.” She adds: “Litehouse continues to innovate to meet consumers’ desires for innovative tastes, convenient packaging and healthy products.”

Last summer, Tribe introduced Tribe Swirl, which Stachnick calls “a frst-of-its kind hummus innovation that takes the topping out of the middle of the hummus and instead weaves it throughout the entire

| Progressive Grocer | Ahead of What’s Next | March 2016

bowl. Having a product that is both bold in favor and packaging has done really well for us. Tribe Swirl has been a great seller since it hit the market.”

Also new from the company — as well as another segment mash-up — is Tribe Ranch Hummus. “Ranch is America’s most popular salad dressing, and since it has successfully moved from a salad dressing to a dip, we decided to add it to our lineup,” explains Stachnick. “Tribe Ranch Hummus blends the popular, herb-flled taste of ranch with the creamy texture of traditional hummus to create a smooth, dairy-free dip.”

Overcoming Challenges Marketing and merchandising a limited-shelflife product that many shoppers expect to fnd in center store isn’t the easiest proposition, as the manufacturers attest.

“Our products are made to order and are very fresh and perishable,” admits La Terra Fina’s Robbins. “Tis can be a challenge in regard to distribution, but for the consumer, it’s what’s in demand. …

Tis simply means we have to be smarter about how we move the product from our plant to the store shelves. We work closely with our retail and logistics partners to ensure fresh, long-lasting product.”

While conceding that “[m]erchandising in the refrigerated set has its challenges,” Litehouse’s Miller insists that “those can be easily overcome [by] implementing secondary displays in the bunkers — tying in our product with other complementary refrigerated items — [and] using point-of-sale materials such as shelf blades, coupon boxes, coupons onpack and neck hangers. We also have great partners throughout the produce department where we can cross-promote our product with theirs, showing the consumer where to purchase.”

Further, she notes: “Keeping the shelf fresh with new favors, new look and feel to the packaging … and cross-promoting with other brands helps keep the [refrigerated salad dressing] category as fresh as the produce we sit next to on the shelf. Our consumer-driven promotions throughout the year — specifcally, How do you Ranch, Salad Revolution and

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Backyard BBQ — our holiday Holidazzle; and our recent Dip it, Dunk it, Wing it are engaging for the consumer, ofering new recipe ideas and highlighting versatility with our products.”

Litehouse’s eforts in this regard appear to be paying of: According to Miller, “We are … taking a bite out of the shelf-stable dressings, whose sales are down 1 percent from a year ago.”

For Tribe, commonly found in the deli section, “[b]eing in a refrigerated section of the grocery store is both challenging and rewarding in diferent ways,” notes Stachnick.

“More and more consumers are being told to shop the perimeter of the store, flling their baskets with fresh foods. Although our products are in a hightrafc area of the grocery store, it is challenging to receive secondary placement or display opportunities. Tat said, the brand has had great success having efective signage in-store as well as ensuring

retailers are carrying a wide assortment of SKUs, allowing for the best visibility on shelf.”

Adds Stachnick: “With many retail stores carrying over 50 diferent SKUs of just hummus, it’s very easy for a new product to get lost in the mix.

Having clear signage that efectively communicates the beneft of Tribe Swirl has very much contributed to the success of this new product launch.”

Te three companies are optimistic about the future. “We anticipate consumers continuing to seek out dressings and dips that are free from ingredients such as trans fats, MSG and artifcial preservatives,” predicts Miller. “Te consumers’ interest [in] and desire for new and exciting favors will increase, as will the desire for easy, fresh meal solutions.

Packaging will also continue to adapt to meet the needs of the on-the-go and time-starved shopper. Consumers’ desire for healthy labels and fresh products will increase and drive the ongoing growth of the perimeter of the store,” where they’re sure to stock up on refrigerated dips and dressings. PG For more about refrigerated dips and dressings, visit Progressivegrocer.com/dipsdressings.

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ote: Editor’s eNthird

This is th -part e of a thre ed on us c o f s serie ents in developm et deli k r a superm ms. progra

Truth and Consequences in the Deli Creating a culture of professionalism is essential to creating better deli shopping experiences.

By Kathy Hayden

H

ere’s a glass that’s difcult to see as half full: About half (48 percent) of people shopping for prepared chicken in supermarket deli sections have experienced some type of problem.

Fifty percent dissatisfaction is bad news in any setting, but in deli sections, where the infuence of shopper experiences spreads throughout the store, these results are especially concerning.

Consumers who reported problems in the deli experienced

76

a 25 percent decline in satisfaction with their prepared food shopping experiences, noted a 17 percent decline in their likelihood to shop in prepared foods again, and were 22 percent less likely to recommend the prepared food section to others.

For the fnal piece of Progressive Grocer’s three-part 2015-16 Deli Insights series, data from Tyson Foods’ “Consequences of Failure” research, conducted among more than 3,000 consumers who purchased or considered purchasing prepared chicken at grocery retail during the previous three months ending September 2015, reveal some major pain

| Progressive Grocer | Ahead of What’s Next | March 2016

This means we need to recruit and foster culinary talent. It’s time to seek people who love food, who love talking points in the industry. Te new research also serves about food, as a progress report when compared with the last set who want to of survey results, from December 2014. sell food.”

As in 2014, the types of problems experi—Jeremy Johnson, International Dairy-Deli-Bakery Association (IDDBA)

enced in 2015 have to do with the basics: One in three consumers reported long wait times, one in four reported that the purchased product was too dry, and one in five reported that the product was unavailable.

Every problem is an opportunity, and while these numbers of incidents were high and rising, they can also be seen as a wake-up call to an industry that needs to make a quicker transition from a selling space to a service space. As the deli competes with other prepared food providers, from the drive-through to home delivery, it’s time to move training beyond the basics.

Problems on the Uptick From December 2014 to September 2015, problems increased in three major deli areas: Staff problems increased from 41 percent to 48 percent.

Product problems increased from 23 percent to 27 percent.

General deli problems increased from 19 percent to 23 percent.

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| Progressive Grocer | Ahead of What’s Next | March 2016

Start with Staff Better food experiences and better guest interactions begin and end with staf. A look at Tyson’s most recent research shows that of all foodservice shoppers who reported problems, 34 percent had a staf-related problem, which was up from 31 percent in the last set of surveys. Common staf problems included unfriendly or even rude staf, unhelpful staf, and unknowledgeable staf.

Not only are stafng problems on the rise, Tyson research showed that they have an increasingly greater and more lasting impact than other store problems. Of those shoppers reporting staf problems, 37 percent had recurring problems.

Staf problems led to a 21 percent decline in the likelihood to recommend a grocery store for prepared foods, and 39 percent reported not revisiting a grocery deli location for a short period of time after a staf problem.

When combined with Tyson’s earlier observational studies fnding no correlation between staf numbers and guest satisfaction, according to Eric Le Blanc, director of marketing at Springdale, Ark.-based Tyson Foods Inc., these numbers underscore how customer satisfaction comes from the level of staf training, not just number of staf on hand. And as deli sections become more and more like in-store restaurants, many experts see this as a huge opportunity to move from retail-based training to hospitality-based training.

“It always comes back to the labor issue,” says

Seeing Something, Not Saying Something Jeremy Johnson, education director at the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA), a nonproft trade association. He stresses that the industry needs to move far beyond the basics of simply stocking sections and making money from basic deli buys. “It is tough to translate [current staf skills] into foodservice,” notes Johnson.

“Tis means we need to recruit and foster culinary talent. It’s time to seek people who love food, who love talking about food, who want to sell food.”

Le Blanc also points to the restaurant industry as a stafng blueprint for deli sections to follow.

“In foodservice, great customer service often comes down to the little touches,” he observes. “For example, I think of the way people end a transaction by saying, ‘My pleasure’ at Chick-fl-A as one simple step that comes to mind.”

The person stocking and cleaning the hot bar or the salad bar also needs to field questions, offer samples and direct shoppers.

Product knowledge and store knowledge have to be exceptional here.”

—Charlie Baggs, Chicago-based chef and R&D expert

80

People Problems Staff interaction consequences: 39 percent of people stay away from a deli setting in the short term.

10 percent of people stay away from a deli setting in the long term.

5 percent of people stay away from a deli setting forever.

Training for Professionalism Speaking at Progressive Grocer’s Grocerant Summit last fall, Chicago-based chef and R&D expert Charlie Baggs cited an oft-repeated example of exceptional hospitality training. He described how employees who are responsible for sweeping the grounds at Disney World are trained for two weeks not to learn how to sweep, but to learn every corner of the park.

“Tese people are the face of the park and frst in the line of questioning when someone needs directions. Training these people exceptionally well brings a level of professionalism and pride to their jobs that refects throughout the park,” said Baggs, who sees a similarly high level of training needed among deli employees, who are often shoppers’ frst encounters in their entire supermarket experience.

| Progressive Grocer | Ahead of What’s Next | March 2016

Even with recurring problems, consumers are not likely to report their experiences.

35 percent of people reported a recurring staff problem.

23 percent of shoppers with product problems reported the problem.

18 percent of shoppers reported their problems in the general deli area.

While it’s impossible to pinpoint exact reasons for the number of unreported problems, one takeaway is clear: Deli management needs to provide open lines of communication — written, digital and spoken — to ensure that more problems are aired and addressed.

“Get people out from behind the deli case and interacting,” Baggs encouraged. “Te person stocking and cleaning the hot bar or the salad bar also needs to feld questions, ofer samples and direct shoppers. Product knowledge and store knowledge have to be exceptional here.”

Creating a Culinary Culture Likewise, culinary knowledge and training should come through loud and clear in the deli section.

Evolving to a restaurant service model also means prioritizing culinary training. Te goal is better food preparation and presentation. Currently, product-related problems — food that’s dry, not fresh, not properly cooked, not appetizing-looking and not of great quality — rated extremely high: A full 70 percent of shoppers surveyed for Tyson’s research reported product problems, and 39 percent reported recurring problems.

Because people often only discover product problems once they’re home, these problems were

In the deli channel, convenience means being able to pick up lunch or dinner — quickly and easily — where you make other purchases.”

—Eric Le Blanc, Tyson Foods Inc.

reported at the relatively low rate of 23 percent, and 77 percent didn’t report recurring problems, which makes addressing problems all the more challenging. But considering that 27 percent of people reported not revisiting a grocery deli location for a short period of time after a product problem, solutions are vital.

Again, experts see culinary staf and better overall training as the answer.

“Hire more chefs,” urges IDDBA’s Johnson, noting that we’re experiencing a time of great interest in food, and that needs to be refected in grocery stores. “Dare to be top-heavy with chefs, because their infuence has a great efect. Dare to take chances on chefs who have worked in diferent foodservice segments,” he contends.

“If we really want to be creative as an industry, we can have meal and menu planners on staf,” adds Johnson, describing what he calls “the wandering-chicken syndrome,” or a shopper wandering the deli looking for full meal ideas to go with a rotisserie chicken, as a huge opportunity for better service.

“Tis begs for a concierge or personal-shopping approach to the deli,” says Johnson, who sees this level of expertise and one-to-one interaction as part of the deli service model of the near future.

Convenience at a Crossroads General deli problems were nearly twice as common as staf interaction problems, with 68 percent of shoppers in Tyson’s research reporting deli issues with product availability, overall sanitation and, most importantly, long wait times. Here, too, all problems could be traced back to staf training and staf efciencies.

General Deli Problems General deli problems were nearly twice as common as staff interaction problems, with 68 percent of shoppers in Tyson’s research reporting deli issues with product availability, overall sanitation and long wait times. These problems were also the least reported (23 percent) and most likely to recur (45 percent); recurring problems were reported only 18 percent of the time.

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| Progressive Grocer | Ahead of What’s Next | March 2016

Slow service and inconveniences are of particular concern as deli sections seek to compete in the realm of limited-service restaurants, drivethroughs and at-home delivery.

“Prepared foods need to be synonymous with convenience,” says Le Blanc, noting that convenience means diferent things in diferent food industry settings. “In the deli channel, convenience means being able to pick up lunch or dinner — quickly and easily — where you make other purchases.”

Unlike the drive-through, if the deli falls down in delivering convenience, speed and ease, more is at stake than the next burger run. Grocery sales are at stake. Overall store experiences are at stake.

Repeat visits are at stake.

Just as deli problems can become whole-store problems, Le Blanc sees the solutions as store-wide and industry-wide: “We need to overcome the ‘Tat’s the retailers’ problem’ mindset and move beyond thinking that deli issues are about one segment of the industry pushing an agenda.” PG

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2016 Retail Seafood Report

Fishing for Profits Could this finally be the year seafood swims on its own?

Analysis by Bruce Horovitz Research By Debra Chanil

$ It’s the younger shoppers like Millennials that are asking for fresh, not frozen, fish.”

—Robert Crumpton, Piggly Wiggly

84

eafood would seem to be so utterly and defnitively on trend that supermarkets would have a hard time keeping up with demand.

After all, most seafood is widely viewed as good for you — a clincher for health-conscious Millennial customers. Even the federal government recently recommended folks eat at least 8 ounces of seafood per week, which equates to two servings. Yet only one in 10 Americans actually consumes the recommended amount.

Nevertheless, insights from Progressive Grocer’s 2016 Retail Seafood Review survey indicate that the seafood section’s waters are increasingly perceived as inviting for more takers. The exclusive annual survey is unique in asking supermarket executives from around the country about the various forces in play in the average seafood department, from category performance to demand to sales.

One of the most revealing findings in this year’s annual retail seafood report is that not a single retail participant expects seafood sales to decline in 2016, alongside a fairly hopeful outlook for 2016 seafood sales. A hefty 46.4 percent of executives surveyed projected seafood sales would increase in 2016 — and the remainder said they’d at least stay the same.

Participants in the survey, which probed views from headquarters executives, seafood category leaders and department managers nationally, foresaw lots of converging seafood department trends. Besides the continued evolution toward fresh, local and sustainable fsh, there was growing interest in value-added seafood oferings like ready-to-cook items or seafood that’s already marinated.

Most importantly, however, the survey revealed seafood departments that appear ready to swim without water wings.

| Progressive Grocer | Ahead of What’s Next | March 2016

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2016 Retail Seafood Report

seafood department sales projected for total 2016

53.6% 46.4%

Increase stay the same

net change: 4.1%

seafood department sales performance So far-reaching is the optimism that positive seafood sales projections have even touched some of the nation’s smallest towns and grocers. In tiny Wagener, S.C., where about the only market in town is a Piggly Wiggly, the store has just begun in recent weeks to sell something it hasn’t sold before: fresh seafood.

“People are asking for it,” says Robert Crumpton, a retired manager who now works part-time in the store’s meat department — which has since been renamed the meat and seafood department. Although fresh fsh is new to the store, the Piggly Wiggly is already selling upwards of $150 worth of it weekly, he estimates.

Fresh and Healthy It appears that this trend toward fresh is being positively infuenced by the 500-pound fsh in the tank: Millennials.

“It’s the younger shoppers like Millennials that are asking for fresh, not frozen, fsh,” afrms Crumpton. “Anything we can get that’s fresh, we sell.”

But Millennials don’t just want it fresh, they also want all available information about it. Above and beyond just about anything, Millennials need to know where their food comes from, according to a recent report from Te NPD Group.

In the report, Port Washington, N.Y.-based NPD gives a positive nod to the seafood industry for its bid to boost local sourcing and, yes, traceability.

Finally, it’s the health button that may help push fsh from retail “meh” to retail sizzle in 2016. After all, consumer perception that fsh and shellfsh are healthier alternatives to meats like beef and pork could drive sales this year. Fish and shellfsh sales domestically grew moderately between 2009 and 2014, reaching $16.7 billion, with expectations to reach $20.1 billion by 2019, according to Chicago-based market research frm Mintel.

Over the past 52 weeks ending Nov. 30, 2015, some 44 percent of supermarket executives said that seafood sales

86

12 Months Ending Nov. 30, 2015

52.0% 44.0%

Increased decreased stayed the same

4.0% net change: 5.2% Source: Progressive Grocer Market Research, 2016

were up, the PG executive survey found. Meanwhile, about 52 percent said seafood sales remained the same, and just 4 percent said they fell.

At What Cost?

Ten there’s that tricky sustainability catch.

Millennials are almost as concerned about the sustainability of the food they consume as they are about the amount of juice they have remaining on their smartphones. Te issue is huge: More than three-fourths of Millennials surveyed by NPD said that the inherent sustainability of a prod-

| Progressive Grocer | Ahead of What’s Next | March 2016

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2016 Retail Seafood Report

conSumer demand

increaSed

decreaSed

-

In the past year, here’s how consumer demand has changed: Smaller PortionS/Pack SizeS Value-Priced Free-From ProductS (antibiotic-Free, Hormone-Free, mSG-Free, additiVe-Free, etc.) u.S. Wild-cauGHt SeaFood Value-added ProductS u.S. Farm-raiSed SeaFood imPorted Farm-raiSed SeaFood imPorted Wild-cauGHt SeaFood alternatiVe ProteinS

Stayed tHe Same

68.2% 59.1 58.5 50.0 444443.2 38.2 37.5 24.3 23.1

0.0% 9.1 14.6 10.0 18.2 8.9 22.5 21.6 23.1

31.8% 31.8 26.9 40.0 38.6 52.9 40.0 54.1 53.8

Source: Progressive Grocer Market Research, 2016

uct is important to them, and that they would pay more for products that meet this expectation.

But sustainable seafood comes at a price, literally: It costs more. Most Gen Z members and Millennials, however, are willing and eager to pay that price to eat better food. As a result, most fresh food, including fsh, will play a key role in all meal choices over the next fve years, according to NPD’s “Te Future of Eating: Who’s Eating What in 2018” study.

“Foods on the store’s perimeter will beneft from this increasing interest in fresh,” said Darren Seifer, NPD food and beverage industry analyst.

Precisely where the fsh comes from has never been more important to shoppers, the PG survey showed.

Over the past year, consumer demand for U.S. wild-caught salmon increased, according to half of those surveyed. Only 10 percent said that it decreased. At the same time, some 38 percent said demand for U.S. farm-raised seafood was up last year, while less than 9 percent said it was down.

eFFectiVeneSS oF Promotional actiVitieS

Rated on a scale of 1-6, where 6=extremely effective

temPorary Price reductionS Product demoS/SamPlinG eVentS FlaSH SaleS Point-oF-PurcHaSe inFormation boGos croSS-Promotion WitHin tHe Store Social media direct mail online marketinG mix-and-matcH bundleS (i.e., four for $20)

current

year aGo

4.71 4.57 4.52 4.48 4.44 4.39 4.29 4.18 4.13 4.08

3.28 5.13 3.58 4.03 2.78 3.83 5.10 3.53 3.13 2.60

Source: Progressive Grocer Market Research, 2016

Meanwhile, demand for imported farm-raised seafood was on the rise in 2015, the PG survey found. Nearly 38 percent of survey respondents said it was up, while just less than 23 percent said it was down. Demand for imported wild-caught seafood, however, appears to have ebbed: While about 24 percent said it increased last year, 21 percent said it fell and 54 percent said it was unchanged.

But consumers — particularly Millennials — don’t want fsh with hints of mercury or any suspect stuf.

Perhaps that’s why consumer demand for meat or seafood “free from” problematic additives was up among 58.5 percent of respondents in the past year.

“Consumers are seeking non-genetically modifed foods in droves,” NPD concluded in its report. Tat’s the same

88

| Progressive Grocer | Ahead of What’s Next | March 2016

What’s the Most serious ProbleM Facing seaFood dePartMents?

Aging Customer Base and Workforce

Heavy Sales Swings

Customers’ Lack of Time to Cook Meals

Higher Costs

Availability of Products

Imported Seafood

Adverse Media Coverage on Health-andsafety Issues (Bird Flu, Pollution)

Lack of Good Help

Competition From National Brands

Maintaining High Service Level

Competition From Other Supermarkets

More Eating Out

Storeability of Product/Product Life

Cost

Prices of Fish

Too Close-dated

Decreasing Sales

Prices of Wild-caught and Quality Seafood

UnpredictableShopping Habits

Employees’ Lack of Knowledge

Pricing of Sustainable Catch (Salmon,Shrimp) Inconsistent Quality of Suppliers’ Product

Local Wild-caught Versus Sustainable

mindset that benefts the likes of wild-seafood sales.

But there’s a problem here: again, it’s cost. Consumers often must pay a premium for sustainable or fresh seafood, and many don’t like that. As a result, when asked to name the biggest problems in their seafood departments, several executives surveyed by PG hit on the same issue: it costs too much. One executive complained about “the prices of wild-caught seafood,” while another bemoaned “the pricing of sustainable catch.”

When these high prices are passed along to shoppers, there’s bound to be blowback.

Tat’s why many supermarket executives surveyed by PG

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said they often turn to promotions to boost meat and seafood sales. Teir most efective promotion: temporary price reductions. Te next most efective promos they identifed were sampling and fash sales.

Even in the seafood department, price clearly matters to shoppers.

A good chunk of the price problem for supermarkets appears to be limited supply. While supermarkets enjoy a plethora of meat suppliers, that’s hardly the case with seafood suppliers. “Tere aren’t many seafood suppliers,” noted one supermarket executive in his survey response.

“Tere isn’t much competition, so our costs are high.”

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2016 Retail Seafood Report Seafood department Category performanCe Total U.S., 2015 Results

Category

Fresh Seafood Fin Fish Shrimp Crustaceans Mollusks Other Seafood Sauces and Seasonings Seafood Side Items Seafood Dips and Spreads Other Seafood Prepared Seafood Other Prepared Seafood Surimi Seafood Meals

Dollars per Store/Week

Dollars per Store/Week Percent Change vs.

Year Ago

Volume per Store/Week Percent Change vs.

Year Ago

Volume Percent on Promotion

Volume Percent on Promotion Change vs.

Year Ago

Average Retail Price Percent Average Change vs.

Retail Price Year Ago

$2,666 2,065 767 237

0.7% 6.0 6.7 -3.6

2.2% 17.4 7.4 -3.9

19.6% 26.8 39.1 22.0

1.0% 3.3 -1.1 -1.0

$5.79 8.81 9.68 6.76

-1.4% -9.7 -0.6 0.3

$114 110 32 22

6.1% 19.1 0.4 -20.8

5.6% 7.0 2.4 -28.3

17.7% 15.8 18.1 29.9

-2.1% -2.4 -2.4 -1.3

$2.43 5.48 3.77 8.64

0.4% 11.3 -2.0 10.5

$1,108 135 13

4.4% 0.0 4.6

2.2% 0.2 19.3

23.0% 23.7 21.2

-1.4% -3.0 2.8

$6.90 2.93 6.92

2.1% -0.1 -12.3

Source: Perishables Group FreshFacts® Powered by Nielsen

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Think Small One way some grocers defect higher prices, however, is to give consumers one of the things they’re asking for Foods on most: smaller portion sizes. Nearly the store’s seven in 10 of those surveyed by PG perimeter will said that they expected higher demand for smaller portion sizes in 2016. benefit from Tat’s being driven by two concurrent this increasing trends. First, aging Baby Boomers are interest in more likely to have smaller households fresh.” and increasingly look for modest-sized —Darren Seifer, portions. Second, Millennials who The NPD Group want seafood that’s fresh and from sustainable sources fnd they can save a few dollars by purchasing smaller amounts. Tese two trends have combined to make smaller portion sizes — even in the seafood department — one of the most popular consumer requests.

But why are both Boomers and Millennials eating more fsh?

According to Mintel, two reasons top all others: taste and health. Since these are the attributes that consumers say they want most from their seafood, this is what supermarkets increasingly need to stress in the seafood sections of their stores.

Back at the Piggly Wiggly in Wagener, S.C., which sells lots of fresh catfsh and fresh salmon that Millennial customers love to slap on the grill, Crumpton says he’s recently started to put up seafood signage in the meat department.

He’s proud that his customers can fnally get the fresh fsh they want. “Tey all want something that they don’t have to fry,” he observes.

Yes, indeed, there’s new sizzle in seafood. PG

Produce

Fresh Food

Get Real

Consumers look to locally grown produce to feed their appetite for authenticity.

By Jennifer Strailey

T

rust has become the hottest trend in food today, and with it, demand for locally grown produce has skyrocketed. As consumers increasingly want to know where their fruits and vegetables come from, they’re seeking sustainable sources closer to home.

According to the USDA, local food sales totaled about $12 billion in 2014, up from just $5 billion in 2008. Te USDA predicts that the market value for locally produced food could hit $20 billion by 2019.

Suppliers across the country are ofering everything from potatoes to kale as local, where possible, while retailers are promoting the connection between food and the farm in-store.

While the challenges of supplying the nation with locally grown produce, particularly in the dead of winter, are obvious, they don’t sway consumer demand. Shoppers still want local in February. In response, a growing number of produce companies are expanding their greenhouse operations to provide fresh local produce year-round.

In particular, leafy greens, herbs, microgreens and tomatoes lend themselves to greenhouse cultivation.

Local Leaves BrightFarms is on a mission to become the frst national brand of local produce. It designs, fnances, builds and operates hydroponic greenhouse farms near a growing number of supermarkets, to provide consumers with locally grown produce year-round, while reducing the environmental impact of growing fruits and vegetables.

“Our experience shows that consumers want to trust their food, and to know where their food comes from. And they want food that is fresher, tastier and more nutritious,” asserts CEO Paul Lightfoot of New Yorkbased BrightFarms. “Local greenhouse produce does this for consumers on a year-round basis, and the demand for locally grown in a greenhouse appears to be just as strong as demand for locally grown in felds.”

Last November, BrightFarms received $13.65 million in Series B-1 fnancing, led by WP Global Partners, NGEN Partners, Emil Capital Partners and several other investors. “Tis fnancing bolsters BrightFarms’

BRIGHT FUTURE BrightFarms recently opened a greenhouse farm in Virginia.

March 2016 | progressivegrocer.com |

91

Fresh Food

The commercial viability of current greenhouse and indooragriculture technology is limited to highly perishable, high-value vegetables, fruit and herbs, and does not currently play a role in producing other agricultural staples like grains, proteins, root vegetables and others.”

—Viraj Puri, Gotham Greens

92

Produce

leadership position in the localproduce movement,” says Lightfoot.

Currently, the company has about 350,000 square feet of greenhouse farms housed in three commercialscale facilities in operation or development, including a greenhouse farm in Bucks County, Pa. (operating since early 2013); a greenhouse farm in northern Virginia (recently opened); and a greenhouse farm under construction in Chicago.

Te nearly 150,000-squarefoot Chicago facility will provide more than 1 million pounds of fresh local produce per year to Kroger’s newly acquired Roundy’s stores, while the 150,000-square-foot Virginia greenhouse will provide Ahold’s Giant Food stores with nearly 1 million pounds of fresh local produce annually.

Te 50,000-square-foot Pennsylvania facility supplies McCafrey’s Food Markets, a grocer with four locations in Pennsylvania and New Jersey, as well as Kings, Balducci’s, Acme and Best Markets.

BrightFarms grows baby greens, including spring mix, baby arugula, baby kale and baby spinach, in addition to basil and tomatoes.

“We only compete in categories where we can replace a long-distance and complex supply chain with a shorter and simpler supply chain that is better for the product, better for the environment and proftable,” notes Lightfoot.

Te environmental piece is a driving factor for most consumers who purchase locally grown produce. Lightfoot notes that BrightFarms greenhouses are pesticide-free, and use 80 percent less water, 90 percent less land and 95 percent less shipping fuel, as well as less overall energy than traditional farms.

“By placing greenhouses as close to their distribution sites as possible, BrightFarms ensures customers receive fresh produce that tastes better, looks better and lasts twice as long in the refrigerator when they bring it home,” he explains.

Gotham Greens is another greenhouse grower with its sights on expansion. Te New York-based company recently opened a 60,000-square-foot location in the New York City borough of Queens, and its frst greenhouse in Chicago, a 75,000-square-foot facility it dubbed the “World’s Largest Rooftop Farm.” Te latter greenhouse is expected to produce more than 10 million heads of leafy greens and lettuce for Chicago-area markets annually.

“We believe locally grown is very important as consumers increasingly care about how their food is produced, where it’s produced and who is producing it,” notes Viraj Puri, Gotham Greens co-founder and CEO. “However, simply being ‘locally grown’ isn’t enough. It must be consistently of high, reliable quality — that is most important.”

| Progressive Grocer | Ahead of What’s Next | March 2016

Currently Gotham Greens operates more than 170,000 square feet of greenhouse in four facilities — three in New York and one in Chicago. Te urban locations allow the company to harvest in the morning and deliver directly to its customers the same day or next.

“Being hyperlocal is very important to our brand, as customers know they are getting our products straight from the farm, which guarantees a fresher, better-tasting product with more shelf life,” says Puri.

“But, all that being said, at Gotham Greens, we don’t just blindly talk about being ‘local’, ‘sustainable, and ‘natural’,” he adds. “While our business is about those things, we care about what those things stand for: favor and nutrition, preserving water and soil resources, biodiversity, reducing harmful chemical use in food production, fair treatment of workers, strong food safety standards, and spending our dollars closer to home.”

Te expansion into Queens and Chicago translates to greater than 400 percent growth for Gotham Greens in the past 12 months. Its 60,000-squarefoot rooftop greenhouse in Queens has allowed Gotham to triple the amount of year-round fresh produce it can provide to its tristate-area (New York, New Jersey and Connecticut) customers. Additionally, the company has several new projects under development in cities across the country.

Gotham Greens’ produce, which includes a variety of leafy greens, bok choy, basil and tomatoes, is labeled to help consumers understand that it’s locally grown in climate-controlled greenhouses.

“Our specially designed recirculating hydroponic methods save land, save water, eliminate agricultural runof and chemical pesticides, an ofer the benefts of efcient, high-yield, local, year-round food production,” asserts Puri. “Our greenhouses are all powered by renewable energy, and our proximity to the market reduces impacts from transportation.”

Is greenhouse growing the future of the fresh produce industry? While Puri calls it “a robust form of farming that is practiced on a commercial scale in many parts of the world,” he explains that for the time being, its scope is narrow.

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Fresh Food

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“Te commercial viability of current greenhouse and indoor-agriculture technology is limited to highly perishable, high-value vegetables, fruit and herbs, and does not currently play a role in producing other agricultural staples like grains, proteins, root vegetables and others,” Puri notes.

“We believe that greenhouse, and specifcally urban, farming can and will play a greater role in the future of a more sustainable, secure and just global agricultural system, but it is not necessarily the ‘future of farming,’” he adds.

Tomatoes Year-round Expansion is also the order of the day for NatureFresh Farms, a Leamington, Ontario-based greenhouse grower, which recently picked its frst crop of OhioRed tomatoes at its new greenhouse facility in Delta, Ohio.

Demand for tomatoes from the 15-acre facility, which opened in late November 2015, was so great that NatureFresh has already broken ground on Phase II of the Delta greenhouse facility. Phase II, adding a little more than 15 acres, is slated for completion by midsummer.

A third phase, scheduled for November 2016, will bring NatureFresh’s total greenhouse space in Ohio to 45 acres. Te company operates another 130 acres in Canada.

“Locally grown, in general, has been focused primarily on feld-grown products, but that is changing, with greenhouse produce gaining more share of the produce aisle,” says Chris Veillon, director of marketing for NatureFresh. “Even though we grow dozens of varieties of tomatoes, four types of bell peppers and two types of cucumbers in a greenhouse environment, we still consider ourselves farmers.”

He adds: “With the upcoming launch of Delta, Ohio-grown OhioRed tomatoes by NatureFresh, we will change consumers’ perceptions of locally grown and how greenhouse grown can help provide fresh produce year-round.”

Veillon sees greenhouse technology as an evolution in fresh local produce. “We will be changing the landscape of locally grown produce [ofered] 12 months a year in the East,” he asserts. “Te fact that we are the builder, grower and marketer allows us to maintain control of the quality that we market under the NatureFresh Farms label.”

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| Progressive Grocer | Ahead of What’s Next | March 2016

Make Way for Microgreens Urban Produce, in Irvine, Calif., cultivates organic living microgreens and wheatgrass, using a high-density vertical growing system in a 5,600-square-foot indoor farm. Its products, which are sold still rooted to their coconut coir, recently became available at 226 Vons and Pavilions stores across Southern California.

Te plants have a fve- to 10-day growing period during which they receive a variety of supplemental LED lighting. “It’s the same light that the sun would give,” explains Danielle Horton, Urban Produce director of marketing and food safety. “We’re just providing the exact lighting spectrum each plant needs.”

Urban Produce microgreens and wheatgrass are sold in the containers in which they’re grown.

Tey’re harvested the day before or day of pickup for transport to stores, and stay fresh for 30 days in refrigeration.

In drought-plagued California, Urban Produce’s watering system is a key component to its success. “Our watering system provides the plant with exactly what it needs, which is about 93 percent less water than the typical farmer uses,” Horton asserts.

“Te industry is defnitely growing with hydroponics and indoor farming,” she observes. As more farm-fresh produce is cultivated indoors, however, consumer education becomes increasingly important.

“Education is critical, especially with microgreens,” afrms Horton. “People confuse them with sprouts.

Microgreens are grown in air root-down. Tey are basically the frst days of what would become a fully grown herb or vegetable, whereas a sprout is a sprouting seed that will never be a full-grown vegetable.”

Horton believes nutritionally powerful microgreens will eventually catch up to best-sellers like kale. “I expect microgreens will be the next super-

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food,” she predicts, pointing to a 2012 USDA and University of Maryland College of Agriculture and Natural Resources study that found microgreens contained four to 40 times the level of nutrients of their mature counterparts.

“Microgreens are very concentrated in nutrition and favor,” she says. “You don’t need as much to favor dishes like smoothies, salads, tacos and burgers. Tey are healthy for you, and they give you a lot more bang for the buck.”

While the company sells exclusively in California at the moment, Urban Produce is poised for further expansion. “We are currently considering areas where we want to put fve additional locations to provide locally grown produce to all of the U.S.,” says Horton. “Our mission is to bring locally grown food to local urban hubs by Q3 or Q4 2016. We’re hoping to have the locations secured by end of year.”

Promoting fresh local products benefits the retail store in so many ways.”

—Lee Anne Oxford, L&M Cos.

96

Kale Continues to Climb As America’s hunger for kale intensifes, the leafy green is increasingly becoming a star player in value-added produce, from bagged salads to vegetable blends.

“We continue to see a very strong pull in kale — both green curly and Lacinato,” notes Patty Emmert, specialty crop manager for Duncan Family Farms, an organic grower in Goodyear, Ariz. While its products are promoted as local in California and Arizona, where it farms, Duncan sees demand for organic kale from far and wide.

“Green curly is outpacing Lacinato for us, particularly in value-added processing, as kale has moved into salads,” says Emmert. “Green curly holds up better than Lacinato. It just has a sturdier structure.” Duncan also grows a red kale.

Mark Haun, business development manager for Walter P. Rawl & Sons (WP Rawl), in Pelion, S.C., agrees that kale is on the move. “Kale continues to outpace everything,” he observes. “Te biggest shift in trends continues to be moving from bulk sales and more into value-added. We can attribute this to new users coming into the category, those who care more about convenience [and] less time spent washing and chopping the product. Te organic side of our business also continues to grow in an impressive way.”

WP Rawl recently introduced Nature’s Greens Seasonal Harvest, a blend of green, purple and white kale leaves.

“We were presented with the opportunity to have an exclusivity to this particular variety of kale, and after testing it, we were really excited about it,” says Ashley Rawl, VP of sales, marketing and product development. “Tis milder kale tastes great and cooks well.”

While Rawl recognizes the impact of local, she believes that integrity, quality and consistency keep shop-

| Progressive Grocer | Ahead of What’s Next | March 2016

pers coming back for more. “Locally grown has been, and will continue to be, important,” she says.

“However, our focus is more on regional correctness. Our focuses are food miles, fresher product, etc.”

Merchandising Local As demand for locally grown produce builds, so, too, does the need for signage, packaging and merchandising that communicate the local message to shoppers.

“Local is important throughout the produce department,” says Lee Anne Oxford, director of marketing for Raleigh, N.C.-based L&M Cos. Inc., which grows, packages and markets fresh fruits and vegetables across the United States. “Promoting fresh local products benefts the retail store in so many ways. It add freshness, taste, smells, seasonality, excitement and a neighborhood feel to your store,” L&M promotes local potatoes, vegetables and melons from its farms in Florida all the way to Michigan. “Our marketing programs tie in with the local state departments of agriculture and include a variety of locally branded items, including ads, POS materials, bins, display stands, poly and paper bags, clips and tags, and labeled trays’ wrapped items,” explains Oxford.

“Some of our best promotions have included an entire program featuring POS with stories from our farm, alongside matching bags and bins,” she adds.

At present, L&M is working on Eastern broccoli and fresh new potatoes in its Florida program, which will be followed by its Georgia Grown local vegetables and melons, as well as North Carolinagrown vegetables and new potatoes.

“Tis summer, we are excited about our new programs from our new farms in Michigan and Indiana,” says Oxford. “We are already working on our local-potato bag for Indiana. And then in August, we begin with our From the Land of Kansas onion harvest and promotions.”

Locally grown varieties will remain a focus for L&M, according to Oxford, who says the company continues to plant new and diferent items on its farms.

Most recently, it’s growing broccoli in the Southeast, russet potatoes in Florida and onions in Kansas. PG For more about local produce, visit Progressivegrocer.com/localproduce.

Fresh Food

Produce Category Spotlight

Bewitching

Bulbs

Onions and garlic of all types are a source of culinary inspiration this spring, but garlic may be in short supply.

By Jennifer Strailey

Sweet onions have become a staple in many consumers’ kitchens.”

—John Shuman, Shuman Produce Inc.

98

A

mericans tune in to watch them sliced, diced sautéed and braised on scores of cooking shows.

Tey’re the backbone, tasty topping and spice of countless dishes. Onions and garlic are culinary staples with sky-high sales potential.

Te availability of diferent varieties — each with a unique favor profle — of onions and garlic is further driving sales in these categories. Whether it’s Vidalia onions, Peruvian sweet onions, black garlic or organic green onions, consumers have an array of favorful seasonal and year-round options to keep them coming back for more.

At the same time, onions and garlic are health-

| Progressive Grocer | Ahead of What’s Next | March 2016

ful favor enhancers, providing yet another reason that today’s wellness-minded consumers are bewitched by these bulbs.

Vidalia Onion Season Te countdown to Vidalia season has begun, and as retailers ready for the arrival of this category leader, the Vidalia Onion Committee (VOC) is preparing to launch its inspired 2016 campaign.

Te Vidalia, Ga.-based VOC has featured the V is for Vidalia marketing campaign for the past two years during the Vidalia season, which runs from the end of April through Labor Day. Te campaign promotes the versatility and benefts of Vidalia onions to a younger consumer base

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Fresh Food

Within the broader onion category, sweet onion growth continues to outpace the growth of other types of onions.”

—Greg Smith, Bland Farms

Produce Category Spotlight

through digital and social media activities, as well as outreach to food bloggers.

“For the 2016 season, we’ll continue the V campaign with V*Inspired, to include a more authentic voice focusing on the growers and some new spokespersons,” says VOC Executive Director Susan Waters. “We’ll be featuring the growers and the growing process on our social media sites to educate consumers on where and how Vidalia onions are grown.

Te growers will also share their passion for growing these premium sweet onions and share what makes them unique.”

As part of the initiative, the VOC’s new spokeswoman is Fox’s frst “America’s Masterchef ” winner, cookbook author and blogger Whitney Miller.

She’ll make guest appearances on the VOC’s social media sites, develop a series of healthy recipes featuring Vidalia onions and highlight Vidalia onions on her blog. Miller will also appear on the committee’s graphic retail bins that feature her recipes on a POS tear-of pad.

“According to research conducted by Nielsen, sweet onions are the onion category leader, representing the largest share of total onion dollar sales (35 percent), followed by yellow onions (33 percent),” Waters notes. “Red onions represent 18 percent of category share.”

What’s more, Vidalia onions account for 62 percent of sweet onion dollar sales and 22 percent of total onion dollar sales.

Te versatility of Vidalia onions and consumer interest in experimenting with them are further driving sales. “According to our 2015 consumer research study, consumers use Vidalia onions in salads, stir-fries, soups, on sandwiches and burgers, and chopped or diced in a recipe,” Waters observes.

“We’ve also seen an increased usage with Vidalia onions in salad dressings, salsas and dips.”

In addition to providing retailers with an array of POS, merchandising tips available at www.vidaliaonion.org, recipes and photography, the VOC has developed a supermarket dietitian toolkit this year.

A Sweet Staple “Sweet onions have become a staple in many consumers’ kitchens,” notes John Shuman, president of Shuman Produce Inc., in Reidsville, Ga. “Tey’re valued for their mild, sweet favor and inherent versatility in a variety of dishes.”

And while Vidalia onions are the leader in the sweet onion category, Shuman sees the availability of sweet onions from Peru flling an important gap in supply.

“Production in Peru remains consis-

100

| Progressive Grocer | Ahead of What’s Next | March 2016

tent as demand remains steady for a high-quality sweet onion with a similar shape and favor profle to the Vidalia onion during the fall and winter months,” he notes.

With a climate similar to Georgia’s and sandy soils, Peru has become an ideal location to farm sweet onions during the Vidalia of-season.

Shuman Produce recently completed construction on a new sweet onion packing facility in Peru to promote efciency in its supply chain throughout the Peruvian sweet onion season, which has just ended. Supplies of Peruvian Real Sweet Onions will resume in August.

“Our new facility allows our program to have a new level of fexibility to provide better service to our retail partners and improve our overall Peruvian sweet onion program,” asserts Shuman.

“Research we’ve conducted with Nielsen Perishables Group indicates that sweet onions drive sales of a variety of items,” he continues. “Consumers with sweet onions in their carts are more likely to purchase produce such as peppers, celery, tomatoes, mushrooms and bagged salad, as well as fresh meats such as beef and chicken.”

To help retailers capitalize on tangential sales, Shuman Produce recently introduced display units designed for cross-merchandising sweet onions alongside other produce items, meat products and center store items in locations within and outside of the produce department.

Tese smaller units lend themselves to secondary displays. Te units feature two distinct artwork panels: one ofers a collection of recipes, while the other depicts freshly harvested sweet onions.

Shuman notes that the company is fnalizing the logistics of its annual retail campaign, which will launch next month. “Te promotion is not only new to the sweet onion category, but it is also the frst

of its kind in the produce industry,” he says, adding that details will be revealed soon.

“Within the broader onion category, sweet onion growth continues to outpace the growth of other types of onions,” agrees Greg Smith, marketing communications manager for Bland Farms, in Glenville, Ga. “Tat demand would suggest that consumers are certainly more aware now than ever of sweet onions, their uses, the subtle diferences in variety, etc.”

While Smith afrms that “the Vidalia sweet onion remains king of the category,” Bland Farms is also seeing continued growth from its Peruvian sweet onions.

From Smith’s perch, versatility and fat-free favor are driving the sweet onion trend. “Sweet onions can be enjoyed raw due to their mild, sweet favor, which makes them more versatile than their conventional counterpart,” he asserts. “As the trend towards healthier meals in the household continues, we think that the sweet onion stands to certainly beneft from that. It’s a great source of healthy favor.”

Last year, Bland Farms introduced a combination sweet potato/sweet onion holiday bin, and has announced it will do so again this year. Te bin features recipe tear pads and an auto-response

text invitation that allows consumers to receive more sweet potato and sweet onion recipes and videos on their mobile devices.

Organic Onions Ocean Mist Organic, based in Castroville, Calif., has expanded its product line with the addition of green onions and Romaine hearts. Te Ocean Mist Organic label now features 18 items.

Te green onions, which are available in 48-count iced bunches, were added in response to continued demand for Ocean Mist Organic fresh produce, according to Joe Feldman, VP of sales and marketing at Ocean Mist Farms.

Te items are shipping from Ocean Mist Organic’s expanded cooler in Coachella, Calif.

Black and White Garlic “Garlic is still trending upward, which is amazing, considering it has been trending upward for over 30 years!” exclaims Jim Provost, co-founder of I

SCS-SG-0114

March 2016 | progressivegrocer.com |

101

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Produce Category Spotlight

Love Produce, in West Grove, Pa., which supplies garlic year-round from the United States, Spain, Mexico, China and Argentina. “Information about the health benefts of garlic and the use of garlic as an ingredient in cooking shows and in ethnic cuisines have kept this positive trend going.”

Provost also sees a younger, more diverse U.S. population enjoying and using garlic more than previous generations.

One of the most exciting introductions to the garlic category in recent years is black garlic, he notes. “It is a relatively niche item, but when Dr. Oz came out and said eating it results in younger-looking skin, the market took of,” Provost observes.

Black garlic is made by fermenting fresh whole bulbs of garlic at high temperatures, which results

in black cloves. Te process creates garlic with a sweetness likened to aged balsamic vinegar.

In January, Bon Appetit magazine covered the black garlic trend, noting that restaurant chefs from coast to coast are featuring it on their menus.

“Another relatively recent trend is the introduction of garlic from Spain into the United States market,” says Provost. “When the Russian market closed to Spain, due to the economic restrictions, and the European market slowed down, Spain looked to the U.S. market.”

I Love Produce is working with Big Garlic of Spain to bring both fresh and peeled Spanish garlic to the United States. “Because there has been a short supply of garlic from California and Argentina, and the fact [that] Spanish garlic is a very high quality, it has been very positively accepted into the marketplace,” he asserts.

As a result of the aforementioned shortages, among other factors, Provost predicts that changes in garlic supply and pricing are imminent. “Tere are some factors that will lead to extreme pressure on the supply,” he says, pointing to what he calls a “perfect storm” adversely afecting the garlic supply.

California’s 2015 storage crop is coming to an end, and while the industry was counting on Argentina’s new-crop garlic to bridge the gap between that end and the beginning of the garlic season from Mexico in April, Argentina has lost a signifcant percentage — perhaps as much as 80 percent — of its crop to El Niño rains, he explains.

China, which leads the world in garlic production, had a short crop, starting with its harvest in July 2015, continues Provost, noting, “Now all of their garlic is in cold storage, and due to their short supply and pressure on the supply, prices are rising up like crazy.” PG

Fresh Food

Garlic is still trending upward, which is amazing, considering it has been trending upward for over 30 years!”

—Jim Provost, I Love Produce

Nonfoods

Health, Beauty & Wellness

Hurt So

Good

Older shoppers are increasingly reaching for pain remedies on grocers’ shelves.

By Barbara Sax

A

s the population ages and rates of osteoarthritis, diabetes, obesity and osteoporosis rise, consumers selftreating conditions at home are driving retail sales of home health care products and natural pain relievers.

National Institutes of Health (NIH) research estimates that 25.3 million U.S. adults, or 11.2 percent, say they’ve had pain every day for the previous three months. NIH’s study also found that even more people — 17.6 percent of American adults — sufer from “severe levels” of pain.

According to Sue Kiner, a spokeswoman for Fort Lauderdale, Fla.-based Larasan, maker of natural pain reliever Flex 24, pain relief falls into three categories: achievement pain, which is the result of “weekend warrior” or professional-athlete injuries; episodic pain that results from overexertion or an injury; and chronic pain.

“Chronic pain goes hand in hand with the aging of America,” says Dave Beal, director of sales for the grocery channel at

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Nonfoods

Health, Beauty & Wellness

Prairie du Sac, Wis.-based Mueller Sports Medicine.

“Studies show that an aging population and patient preference for noninvasive treatment options are driving sales of orthopedic braces and supports (orthotics).”

Beal notes that the brace and support category is dominated by knee braces, but sales of upper-extremity braces are expected to outpace category growth. Mueller also recently introduced FasciaDerm, a product for plantar fasciitis, which Beal describes as “a growing condition among the general population which afects all ages, ftness levels, and both men and women.”

Sales of Mueller braces/supports grew 13 percent in the supermarket channel last year. 3M’s Futuro brand is the category leader, with 43 percent of category dollar sales, but the St. Paul, Minn.-based brand has seen increased competition from Mueller, Idea Village’s Copper Fit brand and Lumos Inc.’s KT Tape. Te use of kinesthetic tape has continued to grow among sports enthusiasts, and retailers have carved out sections of the brace/wrap set for these products.

Chronic pain goes hand in hand with the aging of America.”

—Dave Beal, Mueller Sports Medicine

TENS Therapy Takes Off Te popularity of transcutaneous electrical nerve stimulation (TENS) devices, is also growing in the mass market. Te products come with a therapeutic pedigree, since they’ve been prescribed by doctors for years as an efective way to reduce and, in some cases, eliminate pain. Te devices work by sending tiny electrical signals through the skin to intercept pain signals from reaching the brain and help to release endorphins, the body’s own natural pain-fghting chemical.

Te availability of these devices in mass-market channels makes the therapy accessible at a fraction of the cost to consumers who would previously have had to visit a physician or physical therapist to get it.

“Te 2014 launch of Icy Hot SmartRelief jump-started a very small market, and quickly grew the $10 million market more than fve times in just eight months,” says Scott Seifert, senior manager of topical innovation at Bridgewater, N.J.-based Sanof US. “Te TENS category continues double-digit growth, and Icy Hot SmartRelief has made a considerable investment in media to drive awareness and educate consumers.”

Sales of electrotherapy devices were up nearly 38 percent in the supermarket channel for the 52 weeks ending Dec. 27, 2015, according to Chicagobased Information Resources Inc. (IRI), a gain that outpaced other channels. While the channel accounts for only 7 percent of multioutlet sales of these devices, supermarket retailers are stepping up their oferings as more consumers show interest in the items.

Chattem’s Icy Hot SmartRelief remains the category leader, with more than 90 percent of market share, but other brands, such as Omron and Accurelief, have gained traction. Last year, Icy Hot SmartRelief launched a knee and shoulder line extension product and added a hip pain relief indication to its back product line. “We are planning on a strong pipeline of innovation to follow in the future,” notes Seifert.

He adds that couponing has been successful in bringing new users to a category that has price points in the $30 price range. “We’ve seen average redemptions on coupon values that range from $3 up to $7, but consider it just one of our tools to help drive trial,” says Seifert. “When strong retailer merchandising occurs around our national coupon drops, we see signifcant sales increases. In-store feature and display during these periods as well as others, such as holiday displays, have also been strong trial drivers for us.”

Topical Pain Relief Strong Pain-relief transdermal patches and topical creams and ointments are resonating with consumers looking for alternatives to traditional oral analgesics, and have given a lift to the external-analgesic category. External-analgesic products are one of the top fve OTC growth categories in 2015, according to the Washington, D.C.-based Consumer

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Healthcare Products Association.

Dollar sales in the topical-analgesic category were up 9 percent in supermarkets for the 52 weeks ending Dec. 27, 2015, according to IRI. Icy Hot remains the category leader, but sales of the brand were only ahead 2 percent, while Chattem’s Aspercreme brand experienced a 31 percent spike in sales. In a competitive category, Salonpas, Arnicare, Australian Dream and Blue Emu also registered double-digit dollar sales gains.

“Blue Emu’s success typifes the recent uptick in sales of herbal/traditional topical analgesics,” said a recent report from London-based market research frm Euromonitor. Te competitive category should see a number of new introductions this year. “We’re projecting more strong results, with two exciting launches this year,” afrms Sanof’s Seifert.

Larasan is expanding distribution of its Flex24 SportsPatch Topical Analgesic Pain Patch, roll-on Pain Pen and Performance Tape, the frst kinesthetic tape to feature a topical analgesic. Te transdermal pain relievers, designed for moderate to severe muscle and joint aches, feature natural pain relievers and are advertised as ofering 24-hour relief.

Consumers’ desire for alternatives to systemic products is also driving sales of heat and ice packs and

massagers. “Tere’s a growing demand for natural, safe and convenient pain relief options,” says Jenny McLaughlin, product manager for Sterling, Ill.-based Wahl Terapeutic Massagers.

In October, Wahl introduced a Pulsing Massage Patch, the frst wearable massage device. “Our massage patch is an all-natural patch producing vibration waves to stimulate blood fow to the area of pain,” explains McLaughlin.

Earlier last year, the company introduced three new hot/cold gel packs to its pain management line: the Ceramic & Gel Pack Hot/Cold Spot Terapy, the Hot/ Cold Massage Spot Terapy Vibrating Gel Pack, and the XL Hot/Cold Pack Oversized Terapeutic Gel Pack. Each ofers the benefts of temperature therapy by providing heat to increase circulation and promote healing of sore muscles, as well as cold therapy to restrict blood fow and reduce swelling and infammation.

Supplements Part of Category Research from Chicago-based Mintel fnds that consumers are showing more interest in internal analgesics made with natural ingredients.

Curcumin, the active ingredient in turmeric that gives the spice its distinctive yellow-orange color, has emerged as the hottest supplement in the natural pain relief category. EuroPharma’s Terry Naturally, currently sold only in the natural product channel, is one of the most popular new products on the market. Paula Berken, a spokeswoman for Green Bay, Wis.-based EuroPharma, notes that while a signifcant number of studies point to the efectiveness of curcumin for a number of conditions, consumers often misunderstand the diference between turmeric and curcumin, so education at the point of sale remains important for these products.

Sales of supplements for joint health also continue to grow, although at a slower pace over the past few years.

According to a recent study from Osteo Bi-Flex, a brand of Ronkonkoma, N.Y.-based NBTY Inc., 38 percent of consumers come into the joint health supplement category because a doctor recommends it to them, 23 percent have occasional joint concerns that they want to address and are seeking a variety of approaches, and another 21 percent act on the basis of positive word of mouth from friends and family. PG

When strong retailer merchandising occurs around our national coupon drops, we see significant sales increases.

In-store feature and display during these periods as well as others, such as holiday displays, have also been strong trial drivers for us.”

—Scott Seiffert, Sanofi US

March 2016 | progressivegrocer.com |

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Nonfoods

Housewares

Smart Selling

T

rafc frequency, along Leading grocery chains ing are endless,” says Patrick Spear, with a spotlight on GMDC president and CEO. pull out the stops food and beverages, According to GMDC, the food channel in housewares. positions supermarkets captures most kitchen tool purchases, at 27 as an efective chanpercent of the $7.2 billion market.

By Christina Veiders nel to generate sales of Tis isn’t the case when looking at housewares, especially kitchenware. total housewares sales. Of the $66.8 Tis was the focus of a business sesbillion in manufacturer housewares sion, “Turning Food Shoppers into Housewares Buyers,” shipments to direct-to-retail accounts, mass merchanat the International Home + Housewares Show, which just disers/supercenters are the leaders, capturing a 14.9 wrapped earlier this month at Chicago’s McCormick Place. percent share of manufacturer sales, according to the Hosted by the Colorado Springs, Colo.-based Global 2015 “State of the Industry” report from the Rosemont, Market Development Center (GMDC), the session featured Ill.-based International Housewares Association (IHA). panelists from Associated Foods Stores, Imperial DistribuTe food channel should remain viable for housetors, Valu Merchandisers and Bradshaw International. wares, despite a greater share of sales shifting to “No other general merchandise category ofers as nonstore retailers (catalogs/TV, direct to consumer via much synergy with food products [as kitchen tools], manufacturer websites, internet retailers) and retailers’ and the opportunities for efective cross-merchandisalternative online ordering and pickup services.

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| Progressive Grocer | Ahead of What’s Next | March 2016

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Nonfoods

Housewares

In the industry’s report, nonstore retailers represent 21.8 percent of housewares sales. IHA member companies report doubling the amount of sales to internet retailers over the previous year.

“Te good news for brick-and-mortar retailers,” says Spear, “is that their stores are still overwhelmingly favored as the purchase source by [housewares] shoppers.”

Over six quarters, 81 percent of both bakeware and gadget buyers made their purchases in-store, while 77 percent of cookware purchasers did so, notes Spear.

No other general merchandise category offers as much synergy with food products, and the opportunities for effective crossmerchandising are endless.”

—Patrick Spear, Global Market Development Center

Providing Touchpoints “Nothing beats the immediacy of purchasing in a store,” says Dan Raftery, president of Raftery Resource Network, in Antioch, Ill. Raftery conducts the research for IHA’s annual report.

He adds, “Te last time I checked, supermarkets are still the most-often visited retail outlet.”

While grocery trip frequency has slowed over the years, due partly to a fragmented marketplace where everyone now sells food, supermarkets still average high trip frequency: 1.5 trips per week of 203 million primary grocery shoppers.

Tis presents an important opportunity, say industry observers, since consumers of household goods like to see, touch and feel products.

Supermarkets can ofer many impulse touchpoints throughout the store to merchandise products that make it easier to prepare, store and transport food and beverages.

“You’ve got ’em there [in aisle]. Tey are looking at avocados. So why wouldn’t they buy an avocado slicer? Tey are menu shopping, so why wouldn’t supermarkets want to help their customers prepare a meal with an offering of all the tools needed to prepare a meal?” asks Perry Reynolds, IHA’s VP global trade development.

Leading housewares grocery retailers Kroger, Safeway, Publix, Ahold USA and H-E-B — all listed in IHA’s report — appear to be doing just that.

Effective Clip Stripping A recent trip to a New England Stop & Shop, an Ahold USA banner, revealed a robust clipstrip program in all departments.

Avocado slicers were next to the avocado bin, hung from a nearby plastic-bag dispenser in produce, where an array of other kitchen and prep gadgets were found appropriately cross-merchandised.

“Clip strips work,” asserts Jim Wisner, president of Wisner Marketing Group, in Libertyvillle, Ill.

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He warns, however, that all too often, merchandising and execution can be haphazard.

“You’ve got to be smart about it,” says Wisner. “It requires a good level of discipline to do it right and maintain. It needs supervisory review.”

Te Stop & Shop store emphasizes its Smart Living private label line throughout its housewares offering. Amsterdam-based Ahold has set a goal of 40 percent penetration in its overall private label sales.

Garden City, N.Y.-based Lifetime Brands supplies Ahold with Smart Living kitchen tools, gadgets and cookware, as well as a variety of other housewares.

“Almost everyone has a private label [housewares] program,” notes Neil Stern, senior partner at McMillanDolittle, in Chicago.

San Antonio-based H-E-B sells private label Kitchen & Table, Texas Backyard and other exclusive lines, among them GTC and Chefstyle. Focusing on barbecue, the Texas chain places housewares and grill accessories near the meat department, Stern notes.

Cocinaware is H-E-B’s colorful, exclusive Mexican-inspired line that aims to appeal not only to Hispanics, but also mainstream Millennials, who are increasingly interested in ethnic cuisine.

“H-E-B created a whole line of products targeted to a reverse acculturation,” explains Wisner. “It is the non-Hispanic population embracing Latin food. Tat’s the bigger market. Cocinaware sets H-E-B apart from others, and the brand makes them stand out.”

Most supermarkets have dedicated in-line sections for kitchenware.

In the center store aisles of the New England Stop & Shop, 16 linear feet of mostly bakeware and small kitchen electrics are displayed, featuring such popular brands as Pyrex; Corningware; Corelle

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Nonfoods

Housewares

ments can get stale fast,” observes Stern. “Tat’s why cross-merchandising and seasonal promotionals become critical.”

Some grocery chains have gone beyond traditional housewares merchandising to include fullblown store-within-a-store sections.

“Supermarkets are increasing oferings that are like what our department store and specialty store customers are ofering,” says Lifetime Brands CEO Jefrey Siegel.

Lifetime has grown sales in almost all of the grocery store chains in which it’s ofered, according to Siegel, who adds that the company expects its sales to increase 5 percent to 9 percent this year.

In supermarkets, “of-the-side counter oferings have increased, especially with bulk merchandising,” he notes.

SToP & ShoP For houSewareS The ahold uSa banner features a robust, frequently refreshed kitchenware selection.

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food storage, dishware and bakeware; Smart Living aluminum and ceramic bakeware; Reality four-piece glass sets; Stolzle stemware; and Hamilton Beach, Cuisinart and Proctor Silex small kitchen electrics.

Another 16-foot in-line section features Farberware kitchen tools and Smart Living nonstick aluminum pans and roasters.

’Tis the Season Housewares also lends themselves to seasonal themes and merchandising.

Facing the Stop & Shop seasonal aisle were more housewares: a Color Splash display of Colourworks kitchen tools from Farberware, along with mugs and Corningware bakeware.

Colourworks was launched by Lifetime Brands last year to appeal to Millennials, who appreciate design aesthetics and products that allow them to express themselves.

Te Stop & Shop display was changed from a Rubbermaid display of food storage and plastic water bottles seen on a visit the previous week, indicating that the store frequently refreshes its housewares.

“Customers come in so often [that] depart-

| Progressive Grocer | Ahead of What’s Next | March 2016

Kitchen Place Concept Cincinnati-based Kroger has leveraged its Fred Meyer one-stop supercenter chain, acquired in 1999, to merchandise a wide variety of cookware, kitchen implements and other home products in vast Kitchen Place sections within Marketplace stores. Te emphasis is on quality and value.

Large end-aisle foor displays of popular kitchenware items — Crock-Pots and dishware — were seen at Marketplace store openings last fall.

“Kroger has a good gene pool with Fred Meyer and the heritage of Fry’s,” points out Wisner.

Te grocer merchandises housewares as a core category, supporting it with percentage-of promotions, Catalina coupons and seasonal oferings, he notes.

According to Stern, Kroger also “focuses on opportunistic cross-merchandising on their ends — for example, placing cofeemakers near cofee.”

High-end cookware, kitchen utensils, and dish and glassware items are merchandised from a wire display area that surrounds the event center where cooking demos take place at Kroger’s debut Main & Vine fresh-focused store, which opened last month in Gig Harbor, Wash.

Cooking demos and classes are ideal events to sell high-margin housewares.

Stern mentions that Publix Super Markets Inc., based in Lakeland, Fla., has extended its Aprons line of catering, meal solutions and cooking classes to also position housewares.

IHA reports U.S. housewares sales rose 2.3 percent to $75.1 billion in 2014. Te food channel captures 8 percent, or $5.3 billion, of the $66.8 billion in manufacturer products shipped to all 14 channels. Manufacturer sales to the fve leading grocery chains were $3.6 billion in 2014. PG For more about housewares, visit Progressivegrocer.com/housewares.

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Technology

Digital Marketing

Operating a Robust

Social Media Program Shopper content is key to success.

By John Karolefski

F

or several years, Hy-Vee Inc. has been studying the social media conversations of its shoppers — especially Millennials — and learning how to speak their language. Te goal has been to create a dialogue with its customers instead of speaking to them.

The West Des Moines, Iowa-based operator of 240 supermarkets across eight states has also engaged shoppers on Facebook and Twitter with a quirky and popular promotion involving Hy-Vee’s Chinese food.

Most grocers aren’t as successful as Hy-Vee, even though they’re on social media as part of their overall brand strategies. Merely posting a store circular or coupons is a common mistake that many social media newcomers make.

What kind of content helps grocers succeed with social media? At the top of the list, experts say, is content posted by shoppers themselves.

Grocers have a choice: Ignore the conversation already taking place, or harness the Listening to Soccer Moms power of those Lynn Lang, consumer products, retail and distribuconversations.” tion leader for Paris-based consultancy Capgemini, —Matt Krebsbach, Bazaarvoice

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urges grocers “to understand advocates and infuencers and — perhaps most importantly — to identify vibrant communities of interest.”

She uses the example of soccer moms. If a grocer were to connect with, and provide value for, at least one busy, time-starved soccer mom, that mom may be more likely to join social media communities owned by the grocer and invite her soccer-mom friends, thereby creating a community of advocates.

“Grocers’ social media objectives and consequent ROI should therefore not be to get into the market

| Progressive Grocer | Ahead of What’s Next | March 2016

basket of just one soccer mom, but to provide a value proposition to attract a community of 30 soccer moms,” Lang says.

Consumers, now empowered to share their experiences publicly, are more likely to trust this peer-driven content more than marketing content produced by a brand or retailer, according to Matt Krebsbach, director, global public and analyst relations for Bazaarvoice, an Austin, Texas-based provider of user-generated content marketing solutions.

“Grocery retailers are just now being confronted with the increasing infuence social proof has on the consumer decision journey. Tey need to adapt to the changes or risk being left behind,” he warns.

“Grocers have a choice: Ignore the conversation already taking place, or harness the power of those conversations. Te latter empowers consumers to learn from each other, aids in sales conversion and provides meaningful insight the business can use to identify areas of competitive advantage.”

To operate a consumer-generated content program, he encourages grocery retailers to focus on three key areas: Specifc types of content that will be most compelling for their consumers, such as ratings and reviews, social posts, and Q&A Specifc programs that will allow for the highest volume of content Specifc locations that enable the content to reach the highest number of consumers, including in-store, online and mobile

“After collecting a sufcient amount of consumer-generated content,” he explains, “grocers can actually use the content to gain a deeper understanding of their consumers’ shopping experience.”

Community Center Michael Sansolo, research director of the Coca-Cola Retailing Research Council of North America, stresses that grocers should focus on being a community center in regard to food. In other words, be the place where shoppers share recipe ideas, or strategies for dealing with food allergies or fussy eaters.

Social media gives grocers a great tool for interacting with shoppers on issues that really matter to them, and possibly even engaging them with knowledge and facts about a wide range of food issues.

It’s not easy, however. Sansolo points out several mistakes grocers can make when ramping up their social media programs: Insufficient Budgeting: Grocers need to under-

stand that a successful presence will require a commitment of personnel and budget to succeed.

Companies need to build commitment throughMarch 2016 | progressivegrocer.com |

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Technology

Digital Marketing

out the organization. All departments need to understand the importance of social web activity.

Wrong Messaging: Beyond overly simplistic mes-

saging, many companies struggle with crafting the right messages for diferent sites. Messages on Twitter and other “faster /shorter” social sites require a diferent approach. Grocers need to learn how to craft diferent messages for the diferent experiences of each site — something many aren’t doing.

Ignoring Negative Feedback: Tere will always be

Progressive grocers are using social media to transform their market research function to incorporate insights around sentiment and brand voice.”

customer complaints. Tat being the case, it’s important to have specifc plans for dealing with negative feedback. Ignoring it won’t work. CocaCola’s research found that an active response can turn a complaint into a compliment.

“Choosing not to participate in the social conversation is one of the biggest mistakes a grocery retailer can make,” points out Bazaarvoice’s Krebsbach. “Consumer-generated content is having a substantial infuence on the purchase process, regardless of a consumer’s age, income level or location. Consumers are leveraging each other to navigate the retail experience; choosing not to enable those connections will only hinder sales.

—lynn lang, Retailers that do not proactively solicit and leverage Capgemini consumer-generated content in the right places may struggle to efectively inform and infuence their consumers in their moment of need.”

He notes that several CPG brands have opened a dialogue with shoppers by incorporating authentic consumer reviews on their websites. Tese brands beneft — as grocers could — by encouraging consumers to use their sites as research destinations prior to going in-store, or even in-aisle, via mobile device.

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Photo Courtesy of INsIgNIA systeMs

lIke MINded Bashas’ recently installed a “like Machine” at the point of purchase in 40 Bashas’ and Food City stores in Arizona.

Fast Feedback Bashas’ Family of Stores recently brought the power of social media to the point of purchase in 40 Bashas’ and Food City retail locations. Te Southwest regional grocer installed on its shelves a “Like Machine,” from Minneapolis-based Insignia Systems, with the objective of harnessing the power of social media, consumer engagement and word-of-mouth recommendations directly at the POP. Dave Vehon, category manager for the 120-store, Chandler, Ariz.-based retailer, observes, “Te Like Machine gives customers a way to easily express their feedback [about what they’re buying], while at the same time helping us to better understand neighborhood preferences throughout our market.”

Tis promotion — and other innovative ones — leads to incorporating social sentiment into the market research function for many grocers. Capgemini’s Lang says the next step is to fgure out how to integrate social media into personalized ofers.

“In order to do this,” she asserts, “it’s important for grocers to take a test-and-learn approach to identifying the right CRM tools for their store, and use those tools to develop an operating model that will help integrate the view of the customer, gathered via social media, to all relevant departments, including their marketing platform. Along the way, it is also essential to build consumer engagement principles into the value proposition, ensuring that ofers are personalized based on the customer’s profle. Te customer trusts that they are always in control of their own data, and the grocer is delivering high value.”

According to Lang and other experts, grocers like Bashas’ and Hy-Vee have come a long way in the sophistication of their social media programs.

But their biggest opportunity may be to incorporate social data into the overall planning cycle.

“Progressive grocers are using social media to transform their market research function to incorporate insights around sentiment and brand voice,” Lang says. “However, converting the data into insights and then into actionable ofers, even local assortments, and ultimately developing capabilities to respond with insights in real time is the next frontier. By breaking out of the price optimization mentality and leveraging social media as a truly predictive tool, grocers have the potential to learn about personal preferences, needs and wants, and use them to deliver a broader platform.” PG

Internet of Things Wednesday, March 30, 2016

Register at http://www.progressivegrocer.com/awards-events/IBM2016webcast

Supply Chain

Digital Solutions

Blurred

Lines

Retailers’ supply chains will need to be transformed as the digital and physical worlds continue to merge.

By Jenny McTaggart

A

s long as supermarkets sell bread and butter, they’ll have a physical supply chain to contend with. But as the “digital age” comes into further maturity — complete with online ordering, mobile communications, cloud computing, and even drones that can be used to deliver products — food retailers can’t aford not to be thinking about their digital supply chains, too.

With the lines between the digital and physical worlds blurring, retailers’ supply chains will need to look a lot different from how they look in 2016. Stamford, Conn.-based technology research and advisory frm Gartner Inc. predicts that by 2018, 50 percent of chief supply chain ofcers in $1 billion-plus global companies will design and manage supply chains that support digital business. While the average grocer isn’t that big, there’s no doubt that their supply chains will need to be rewired as well.

At least one major retailer is already rethinking its supply chain, with digital technology weighing heavily in its decision-making. At the beginning of the year, Bentonville, Ark.-based Wal-Mart Stores Inc. unveiled plans to close 269 stores while also merging its two tech groups: the group that operates from its headquarters and focuses on systems for its stores, and San Bruno, Calif.-based Walmart Labs, which facilitates e-commerce development.

Te merged unit, called Walmart Technology, should help Walmart further grow its annual $13 billion e-commerce business, including a recently launched click-and-collect service.

“Our customers don’t think of these as diferent experiences,” noted Neil Ashe, head of Walmart’s e-commerce division, in an internal memo cited by published reports.

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Tis realization — that consumers expect a seamless experience regardless of whether they’re in a physical or virtual store — will no doubt continue to drive changes in other retailers’ supply chains.

Faster and Smarter So how might the new, digitally enhanced supply chains look for traditional grocers? One major diference is that they’ll need to be exponentially faster, according to Mike Griswold, research VP in Gartner’s consumer value chain team.

“Retailers need to focus their eforts on speed,” he advises. “Tey need to consider the physical assets they have and look at how to move things faster, how to respond to customers’ needs faster and how to deliver a better experience faster.”

To help them do that, retailers will need to have real-time visibility of not only their point-of-sale information, but also their perpetual inventory, explains Griswold. Today, fewer than 10 percent of the top 20 North American food retailers are fully connected in this way, he estimates.

“A lot of retailers already have the real-time point-of-sale data, and they’re able to look at it every 15 minutes, which is nice. But if you can’t respond to that, it’s a waste of time,” he continues.

“If they can couple getting the POS data every 15 minutes while also refreshing balanceon-hand information every 15 minutes, then they’ll have a much clearer picture of which products are in which stores.”

Tat breadth of data will help retailers manage their supply chains in the physical stores while also responding

to online orders, which may well need to be picked in their stores.

Taking it a step further, the data might be connected to workforce and task management applications, notes Griswold. “You can tie the information into associates’ mobile devices to let them know more product needs to be pulled from the back,” he says.

On the consumer-facing front, retailers will also need to fgure out how best to bring their shopping experience to mobile phones, observes Griswold.

Tat means considering at least three operating systems (Windows, Android and Apple), and thinking about ftting information into a smaller footprint.

Tech Development Many tech companies are working on supply chain solutions of the future, to ensure that retailers and their partners will have the tools needed to compete in an increasingly wired world.

One such frm, Miramar, Fla.-based Chetu, sees a lot of potential around data and analytics, including predictive analytics.

“Forecasting modules are important to all businesses, but to grocers or convenience store owners, having the foresight to predict future trends based on existing sales is critical,” notes Prem Khatri, Chetu’s AVP of operations for retail and supply chain.

As for the online business, mobile apps show the most promise for consumers, according to Ryley Fitzsimmons, Chetu’s national account manager for grocery. “Tis type of app allows consumers to create running grocery lists through the week. When they need to resupply groceries, they can place an order, pay and request pickup/delivery times, completely changing the end point in the grocery supply chain,” he says.

Another tech company, Dayton, Ohio-based Teradata, has been directly involved in helping one of its retailer partners gain speed and efciency throughout the supply chain. Teradata worked with a supercenter operator to turn its demand forecasting into a 7.5-hour/one-night process, as opposed to a 26-hour/ two-day process.

To grocers or convenience store owners, having the foresight to predict future trends based on existing sales is critical.”

—Prem Khatri, Chetu

March 2016 | progressivegrocer.com |

119

Supply Chain

Digital Solutions

“Tis improvement has helped the retailer get the right products onto the shelves at the right times That mindset to satisfy consumer demand,” explains Tim JW around failing Simmons, Teradata’s general sales manager, North America, demand chain solutions and services.

being OK is very counterintuitive ‘Fail Fast’ for a lot of food In addition to being faster, digitally enhanced retail retailers.” supply chains will require a diferent employee skill —Mike Griswold, Gartner

set, including people who aren’t afraid to come up with new ideas, according to Gartner’s Griswold.

However, since a culture of experimentation hasn’t exactly been the norm at supermarket companies, this may be a major challenge for the industry, he notes.

Gartner will further explore this idea, which is part of what it calls a “bimodal supply chain,” at its upcoming Supply Chain Conference, May 17-19 in Phoenix.

“Folks will need two sets of skills, or two types of thinking, in their supply chains,” explains Griswold. “Tey need what we call ‘mode one’ — which is basically the operations side of the business. But they also need ‘mode two,’ which is really where the innovation happens.”

Mode-two thinking will require what Gartner refers to as “fail fast.” “People need to come up with innovative ideas, but not every idea is going to work,” notes Griswold. “Companies will have to try a lot of new things, but they won’t want to penalize people for ideas that don’t work, as long as the ideas were well thought out and had a good premise. Tat

The Importance of Being Accurate On the business-to-business side of the supermarket supply chain, retailers are relying on data more than ever before to fuel everything from orders, to promotions to stocking their shelves. Meanwhile, on the business-to-consumer side, people are looking for accuracy in how products are described on both their packages and on retailers’ websites. Where these two worlds merge, Gladson, a provider of syndicated consumer packaged goods product content, is working to make sure that product information is consistent and accurate to help ensure sales and operating efficiencies.

Sue Sentell, CEO and president of Lisle, Ill.-based Gladson, says one of the biggest conversations her company is having with its customers is the importance of the execution of the merchandising plan within a supply chain. “They’re looking at how to get Sentell the products from the manufacturers to the DCs and into the stores, and how to determine where they’re going to go on the shelf,” she observes. “Then that information needs to be synchronized and linked with the external, business-to-consumer side, because shoppers are online researching products, building shopping

120

mindset around failing being OK is very counterintuitive for a lot of food retailers.”

Walmart has already demonstrated modetwo thinking by not only merging its technology functions, but also experimenting with drones to see how the futuristic fying devices can facilitate product delivery. Walmart follows in the footsteps of Amazon, the Seattle-based online retailer that continues to encroach on the grocery business by ofering online ordering and home delivery.

As Griswold sees it, drone technology shows the most promise in rural areas, where the nearest Walmart might be at least 10 miles away. But he says supermarkets shouldn’t be quick to shrug of the potential of this technology.

“Instead of thinking in extremes about how drones might not work, think about where the technology could work … and most importantly, how it can bring value to the consumer,” he advises.

Another recent example of mode-two thinking comes from Keasbey, N.J.-based supermarket cooperative Wakefern Food Corp. Its ShopRite banner is involved in a new initiative that will allow customers to shop from their home kitchens using a “smart fridge” called Family Hub. It’s this type of openness that will help supermarkets build a supply chain that sustains not only the physical world — which is still very much the mainstay of the business — but also the digital world, which only will continue to grow. PG

lists, and looking at nutrients or ingredient information to choose products they want to purchase. When they go to buy that product, whether it’s online or in the store, they want to make sure that that product is the same one they’ve seen online.”

Gladson’s database of consumer packaged goods product content includes images for online usage, as well as key attributes of each product, such as dimension, weight and package measurements. “We also create a very robust database of anything that’s on the package that can be used in the promotion of that product or in the supply chain,” explains Sentell.

The importance of accurate data can’t be underestimated in the supermarket supply chain, she contends. “If you think about this through the supply chain, you want to ensure that your product package measurements, whether that be at the case or at the individual consumer unit, be accurate, because that impacts transportation, space in the warehouse … or even online ordering and pickup or home delivery.”

| Progressive Grocer | Ahead of What’s Next | March 2016

Equipment & Design

Fixtures

Safety On Display Suppliers of seafood cases make consumer protection a priority.

By Bob Ingram

S

ince a single case of seafood-borne illness can harm a retailer’s brand, “food safety in general is more critical today than it has ever been, and that includes seafood safety,” notes Marjorie Proctor, marketing and design specialist at Hillphoenix, in Conyers, Ga. According to Proctor, the vast majority of consumers want to know where their seafood comes from and how it’s handled, and they expect to find the freshest seafood possible in their supermarket seafood departments.

With this the case — pun intended — Proctor says: “Hillphoenix works closely with food retail seafood merchandising experts in the supermarket industry to ensure refrigerated display cases,

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| Progressive Grocer | Ahead of What’s Next | March 2016

including those for seafood, are designed and engineered for merchandising fexibility, as well as for ease of maintaining proper case temperatures, load line compliance, and cleaning and sanitizing. We also research and track trends to help us understand the ever-changing food markets to ensure we ofer food retailers the right types of display cases for the product they plan to merchandise.”

Proctor adds that food safety is a “huge” part of the R&D process at her company, and that case suppliers like Hillphoenix are responsible for researching and understanding the food that goes into the display case, listening to food retailers on how they want to merchandise, and ensuring that food is kept at the best temperatures by testing display cases in company labs.

“Trough the Hillphoenix Learning Center,”

varIeD uSeS This seafood case from Hillphoenix is designed for merchandising flexibility.

she says, “food retailers can learn about the food safety features and requirements of our equipment, including optimal cleaning, sanitizing and merchandising best practices.”

Hillphoenix’s most popular line for supermarkets is Coolgenix, which enables lower-labor merchandising while prolonging shelf life. “Coolgenix’s conduction technology provides constant, optimal temperature and humidity levels, which maintain the integrity of seafood better than traditional cases,” Proctor points out.

In the future of seafood cases, she foresees narrower case footprints from front to back for increased merchandising fexibility, noting that already “we work with seafood merchandisers to create a planogram that is manageable within a narrower footprint.”

Dual-temp Design AHT Cooling Systems USA, based in Charleston, S.C., is heavily involved in the supermarket industry and works with many people in merchandising for the seafood department. Te company also works with frozen seafood manufacturers to assist with specialty programs to increase brand awareness.

According to an AHT representative, food safety has been a main focus at the company, as it relates to the design and manufacturing of equipment, and the static cooling process of AHT’s bunkers assures customers of the most consistent

fresh or frozen temperatures.

Te company’s Paris wide island is popular because it’s modular, meaning that the retailer can start with any desired length, reach its ROI, and then expand to capture additional sales. Additionally, the Manhattan and Malta models allow easy placement of cases for promo seafood.

“All of the bunkers are dual-temp,” adds the representative, “which provides the merchandisers with tremendous fexibility to have a frozen case right next to a refrigerated [one] and immediately and easily change temp on each individual case to match their program needs.”

Available open or with doors, the XLS takes up little space while ofering an additional vertical presence for smoked or prepared seafood items.

As new EPA and DOE standards begin to be phased in, however, much of the industry’s focus will be on meeting them, which could afect new and existing case designs, the rep notes.

Info Sharing “Seafood sales have increased over the last several years,” asserts Cheryl Beach, manager marketing communications at Hussmann Corp., in Bridgeton, Mo. “Much of this popularity can be attributed to the consumers’ focus on health and wellness, and their desire for more variety of seafood available from their local supermarket.”

In addition, she notes, consumers are concerned

We work with seafood merchandisers to create a planogram that is manageable within a narrower footprint.”

—Marjorie Proctor, Hillphoenix

March 2016 | progressivegrocer.com |

123

Equipment & Design

Fixtures

spacE savER aHT cooling systems Usa’s XL case holds smoked and prepared seafood in a small footprint.

Get Your Products

Off the Floor!

FRONT CASE PLATFORMS

STAIR STEP DISPLAYS / BASES

TRASH / RECYCLING CENTERS

NEWSPAPER BASKET STANDS

www.masonways.com

about the source, quality, freshness and sustainability of the more popular types of seafood available throughout North America.

“Providing fresh, safe seafood to consumers is the responsibility of everyone in the supply chain, and everyone should be aware of current FDA and HAACP regulations and guidelines, as well as fnal rules under the Food Safety Modernization Act (FSMA),” advises Beach.

“When it comes to seafood safety within the display case,” she continues, “we look at temperature, cleanability and freshness, and we use the regulatory standards from UL and NSF to guide us in our equipment design.”

Hussmann’s OptiCool technology enhances the performance within the refrigerated display case by reducing dehydration, increasing humidity, and minimizing temperature variances resulting in extended bloom of the seafood product.

“Te Hussmann DSF series open ice seafood display case is our most popular model,” says Beach. “Tere are many sizes and confgurations within the DSF series to meet most store layout needs while still providing a dramatic merchandising theater for fresh seafood display. Swing-out vertical front glass makes cleaning and restocking easy, and the large bottom drain allows for good water fow for cleaning and sanitation.”

Hussmann expects that there will be a growing need for continued information gathering around seafood products to support growing regulatory guidelines, as well as consumer demand for more information about seafood products.

“We see the display case as an integral part of that information sharing within the supermarket,” afrms Beach. “Te types of information from the display case might include product sourcing, traceability across the supply chain, nutritional values, safe handling and preparation techniques, and even recipes on how to cook and serve the seafood.”

On the Road James Piliero, sales development manager at Traulsen, in Fort Worth, Texas, believes that seafood safety in today’s supermarket industry is “very critical.”

He points out that fresh seafood is especially perishable and often must travel long distances to market, and that extra care must be taken with live seafood such as bivalves and crustaceans to avoid several types of seafood-borne illnesses.

“Where Traulsen enters the picture,” he says, “is with ‘roadshow’ events. Tese move the sale of seafood away from the traditional seafood counter and place it strategically elsewhere in the store.

Tis started as ‘weekend-only’ events with the club-type stores, but has since become increasingly common among supermarkets and expanded throughout the week in some cases.”

most popular being the 2000-RLE.” Both commissioned and independent research strongly supports using ice in general versus cold cases for seafood — and fake ice in particular to extend shelf life and maintain a positive image with customers, notes Spiegelhalter.

An important aspect of this positive image is, and will always be, food safety. PG

RIght place the Malta, from aht cooling Systems USa, provides easy placement for promotions.

Piliero notes that Traulsen worked closely with a retail customer to design a better seafood merchandiser that’s ideal for keeping both fresh and frozen seafood at safe temperatures. Te resulting case circulates air gently over the product, keeping it safely fresh and/or frozen for the eight to 10 hours of a typical roadshow event. Tis case is also mobile, and one associate can easily maneuver it through the store, while it has additional refrigerated storage underneath, greatly limiting the trips required for restocking. Te case also uses a readily available 115volt, 20-amp power supply.

In the seafood future, Piliero predicts certain regulatory changes involving energy and refrigerant usage.

“Beyond these,” he says, “I think the most likely future development would be something such as equipment condition and temperature monitoring being shared to a mobile device for operator convenience.”

Why Ice is Nice In Chicago, the Howe Corp. sells ice faker machines “that produce colder and longer-lasting ice than commercial fakers,” asserts SVP of Sales and Marketing Jean Spiegelhalter. “Te fake ice is ideal for use in cases and displays to support the retailer’s fresh messaging and to maintain the necessary temperature to achieve safety standards.”

Ice preserves product quality through constant contact and consistent temperature, says Spiegelhalter, and helps maintain product hydration and the weight of the product.

“The retailers with the best perishable ratings, according to Consumer Reports, are using ice, specifically Howe f lake ice,” she adds. “They are using different Howe Ice Flaker models that produce between 1,000 and 6,000 pounds of ice per day, with the March 2016 | progressivegrocer.com |

125

Food, Beverage & Nonfood Products

Snack Resurgence

The Hershey Co. is relaunching its Take 5 bar in response to what the company calls a “cultlike following” that has helped drive 10 percent growth for the product over the past three years.

Featuring a layered combination of five classic ingredients — pretzel, caramel, peanut butter and peanuts, all covered in milk chocolate — Hershey’s Take 5 bar will now also feature a new wrapper with a textured background, a bold green logo and all five ingredients deconstructed. The SRP for a standard bar is 99 cents; the king-size version retails for a suggested $1.69. www.thehersheycompany.com

A Different Kind of Brew

A ‘Better’ Chip

The Way Better Snacks brand has added another variety to its tortilla chip line — the first new flavor the brand has introduced since March 2014. Made with high-quality ingredients such as sprouted chia, flax seed and quinoa, A Nacho Above derives its flavor from organic cheddar cheese and a blend of herbs and spices, including pure sea salt, onion, garlic, paprika, and black and red pepper.

The latest variety is non-GMO, glutenfree, 100 percent whole grain and kosher OUD, and carries an SRP of $3.49 for a 5.5-ounce bag.

The Samuel Adams Nitro Project — which sees the beer giant replacing traditional carbonation with nitrogen during the brewing process — has unveiled the first three beers in its portfolio. Nitro White Ale (5.5 percent ABV), Nitro IPA (7.5 percent) and Nitro Coffee Stout (5.8 percent) “fundamentally transform the flavor profiles” of three classic beers, delivering a rich, creamy texture. White Ale is billed as a smooth, medium-bodied brew with hints of orange and peppery spice, while the IPA delivers a boldly bitter yet smooth taste, made from six kinds of hops. Meanwhile, Coffee Stout is a jet-black brew with a rich, robust character, complemented by notes of bittersweet chocolate and hints of dark fruit. All three beers are available in 4-packs of 15-ounce cans, each retailing for a suggested $8.99-$10. www.samueladams.com

www.gowaybetter.com

Eco Bags

“Every time I used a plastic self-sealing bag, I’d think ‘what a waste.’ But when it came to ease, convenience and functionality, plastic bags were unmatched — there were no good alternatives out there,” says Kat Nouri, founder of modern-twist, whose Stasher plastic-free alternative to storage bags and containers is made of 100 percent pure platinum silicone, a natural material that doesn’t break down over time and release harmful gases and chemicals like its petroleum-based counterpart. Featuring an airtight pinch-press seal and a clear window that provides easy visibility, Stasher is reusable, easy to clean, and safe for freezer, microwave and dishwasher use. The offering is sandwich-sized and comes in three transparent colors (SRP of $12.99 each) and three print designs (SRP of $14.99 each). www.stasherbag.com

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| Progressive Grocer | Ahead of What’s Next | March 2016

Organic Milk for One

Delivering a portable, ready-to-drink option that’s both convenient and nutritious, Organic Valley’s Good to Go single-serve milk for adults contains 11 grams of protein, 40 percent of the daily value of calcium and 35 percent of the daily value of vitamin D. Good to Go features the brand’s classic pasture-raised organic milk in an 11-ounce bottle, in 1% Low Fat White and 1% Low Fat Chocolate varieties, the latter of which is flavored with organic and Fair Trade unrefined cane sugar and cocoa. The new offering carries an SRP of $1.99, and is free of antibiotics, GMOs, synthetic hormones, pesticides and artificial flavoring. www.organicvalley.coop

Antioxidant Protection

Tart Cherry 1000 MG Extract with Standardized Turmeric veggie caps are a one-capsule-per-day dietary supplement that aims to provide a natural source of powerful anti-inflammatory antioxidants — mostly attributed to the phytochemical anthocyanin found in tart cherries. Additionally, Tart Cherry Extract may support healthy uric acid levels, and also offers standardized curcuminoid (turmeric) extract for healthy joint-mobility support. A bottle of 60 veggie caps has an SRP of $14.99. www.masonvitamins.com

Wrap it Up

Made with a new eggfree formula, Frieda’s Specialty Produce egg roll and wonton wrappers appear in updated packaging designed to catch the attention of younger consumers. In addition to traditional Asian-style preparations, the egg roll wrappers can be used to make lasagna, pastry shells for taco filling or chicken salad, or dessert pastry rolls, while the wonton wrappers are great for making ravioli, mini pizza bites and other appetizer offerings. The SRP range for both types of wrappers is $1.99-$2.99. www.friedas.com

Addition by Subtraction

All Perdue convenience products in the Frozen and Heat & Eat as well as in the Perfect Portion chicken product lines are now available without antibiotics of any kind, as identified by the brand’s “No Antibiotics Ever!” label. In tandem with this commitment, the company has launched a series of 20 items, including individually wrapped Perdue Encrusted Chicken Breast Fillets (SRP $9.49), and Perdue Short Cuts Singles and Perdue Nuggets Singles (SRP $6.99). www.perdue.com/perdue-way

March 2016 | progressivegrocer.com |

127

Litehouse Foods Plant Earns SQF Level 3 Certification Sandpoint, Idaho-based premium dressing and dip maker Litehouse Foods has received Safe Quality Food (SQF) Level 3 certification — the industry’s highest safety achievement — for its Simply Artisan Reserve manufacturing plant.

SQFI is recognized by retailers and foodservice providers and by the Global Food Safety Initiative (GFSI), which requires a rigorous, credible food safety management system and links primary production certification to food manufacturing, distribution and agent/broker management certification.

“By achieving the highest standard in food safety, we want to underscore to our customers that food can be artisanal and crafted with the utmost care,” says Margi Gunter, Litehouse brand manager for deli.

The plant makes Simply Artisan Blue Cheese, which is crafted with singlesource rBST-free milk and then aged for 100 days.

For more about Litehouse and other makers of refrigerated dressings and dips, see the story on page 69. www.LitehouseFoods.com

ECRS Releases Online Training Suite, Names Edwards to Lead Grocery Tech Charlotte, N.C.-based ECR Software Corp. (ECRS) has named Don Edwards its VP of business development for grocery. A 30-year veteran of technology for the traditional grocery retail industry, Edwards joined ECRS in May 2015. With ECRS boosting its penetration of the grocery industry over the past few years, Edwards will bring his vast technical knowledge to expand grocery-centric soluEdwards tions and will lead all activity for ECRS in the grocery space.

“Tere is a great need right now in the grocery industry for an omnichannel, unifed retail platform that includes native business solutions such as e-commerce, supply chain management, inventory management, enterprise confguration management, mobile POS and data analytics,” Edwards says.

Additionally, ECRS has released its Catapult University Online retail automation suite. Tis fexible online tool is a self-paced training program that prepares retail employees to properly and efectively use a retailer’s Catapult system.

CAT-U Online is available at no additional charge to all ECRS customers that maintain an active support and customer care package. www.ecrs.com

Acosta Expands Foodservice Division with PacNorth Jacksonville, Fla.-based sales and marketing agency Acosta has acquired Te PacNorth Group. With ofces in Washington, Oregon, Idaho and Alaska, PacNorth is the leading nonfood manufacturer agency in the Northwest, representing an extensive selection of manufacturers and products for the foodservice industry.

Te integration of PacNorth with Acosta’s nonfoods team, Acosta Cornerstone, will broaden the agency’s coverage in the Northwest region. “Strong, local relationships are critical to our success,” says Dan Rodenbush, EVP, Acosta Cornerstone, “and Te PacNorth Group will enable Acosta to increase personalized service across the region.” www.acosta.com

Kroger, Ahold Alums Join StorePower’s Advisory Board Chicago-based online sales software platform StorePower Inc. has formed an advisory Fenyo board comprising grocery industry veterans.

“As a grocery technology business with a massive opportunity, we wanted to surround ourselves with industry veterans who’ve built technology, sold technology into the most impressive chains, and been operators analyzing and buying technology within the best chains,” says StorePower President Jonathan Polin.

Partnering with medium and large chains to build, host and improve their consumer shopping sites and picking processes, StorePower is a spinof of AbesMarket.com; clients include Fairway Market and Gelson’s.

Te advisory board includes Ken Fenyo, founder and CEO of Rethink Retail and former corporate VP of loyalty and

128

Kaufmann

Sigel

Hood

Westheimer

digital at Te Kroger Co.; Ken Kaufmann, an omnichannel retail strategist who led customer-specifc marketing innovation at Ahold USA and was previously in other executive roles at the company; Joshua Sigel, an internationally recognized thought leader and innovator for food retail, currently VP of business development at Innit Inc. and previously CIO at United Natural Foods; David Hood, retail president at IRI and previously in senior executive roles covering information systems at Walmart, Modell’s Sporting Goods and NCR; and Danny Westheimer, EVP of retail global business development at IRI. www.storepower.com

| Progressive Grocer | Ahead of What’s Next | March 2016

advertiser index 5 Generation Bakers

45

www.5generationbakers.com

Better4ufoods

56

wwww.better4Ufoods.com

Big Time Products

109

www.bigtimeproducts.net

Blount Fine Foods

23, Inside Back Cover

www.blountfinefoods.com

19

www.lalafoods.com

Borden Dairy

103

www.avocado.org

Campbell Soup Company

California Avocado Commission

13

www.campbellsoup.com

Coca Cola

37

www.coca-cola.com

ConAgra Foods

27

www.conagrafoods.com

Domino Foods

17

www.zingstevia.com

Dr. Praeger’s Sensible Foods

53

www.drpraegers.com

ECR Software

7

www.ecrs.com

15

www.farmlandfoods.com

Food Marketing Institute

59, 66

www.fmi.org

General Mills

42-43

www.generalmills.com

41

www.gmpopcorn.com/fudge-PG

Farmland Foods Inc.

Gold Medal Products Green Giant Fresh

93

www.GreenGiantFresh.com

51, Back Cover

www.heinekenusa.com

57

www.house-foods.com

IBM

117

www.progressivegrocer.com/ awards-events/IBM2016webcast

IGPS

Heineken USA House Foods America

121

www.igps.net

Iovate Health Sciences

61

www.SixStarPro.com

Jack Links Beef Jerky

63

www.jacklinks.com

John Wm Macy’s Cheesesticks, Inc.

71

www.cheesesticks.com

Litehouse

70

www.litehousefoods.com

90, 124

www.masonways.com

111

www.mizkan.com

Mason Ways Indestructible Plastics Mizkan NACDS

87

tse.nacds.org

Peri & Sons Farms

101

www.periandsons.com

Phillips Food Inc.

89

www.phillipsfoods.com

Post Consumer Brands

33

www.mombrands.com

4

www.mondelezinternational.com

Mondelez Musco Family Olive Co.

75

www.olives.com

National Confectioners Association

77

www.candyusa.com

Insert 35

www.restaurant.org/show

74

www.naturesweet.com

Organic Valley

69

www.organicvalley.coop

Paran Management Company

44

www.paranmgt.com

Pete & Gerry’s Organics, LLC

2-3

www.peteandgerrys.com

Premier Nutrition

105

www.premierprotein.com

60

www.meltorganic.com

National Restaurant Association Nature Sweet

Prosperity Organic Foods Reser’s Fine Foods

29

www.resers.com

Robbie Flexibles

64

www.RobbieFlexibles.com

Royal Hawaiian Orchards Save-A-Lot Steaz Stonefire Authentic Flatbreads Stagnito-Edgell

97

www.RoyalHawaiianOrchards.com

Insert 67

www.Save-A-Lot.com

58

www.steaz.com

79

www.stonefire.com

59, 83, 102, 113

www.stagnito-edgell.com

Thanasi Foods

65

www.thanasi.com

The Happy Egg Company

81

www.thehappyeggco.com

Trion Industries Inc.

9

www.triononline.com

United Fresh Produce Association

99

www.unitedfresh.org

Wonderful Pistachios

31

www.getcrackin.com

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by Stagnito Business Information, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates).

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advertiSing SaleS & BUSineSS Staff Kollin Stagnito President & CEO 224-632-8226 kollinstagnito@stagnitomail.com Ned Bardic Chief Revenue Officer 224-632-8224 nbardic@stagnitomail.com Korry Stagnito Chief Brand Officer 224-632-8171 korrystagnito@stagnitomail.com Jeff Friedman Vice President/Brand Director 201-855-7621 jfriedman@stagnitomail.com John Huff Midwest Regional Sales Manager 224-632-8174 jhuff@stagnitomail.com Elizabeth Cherry Western Regional Sales Manager 310-546-3815 • Cell 310-990-9597 echerry@stagnitomail.com Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350 mkaeppel@stagnitomail.com Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 mshaw@stagnitomail.com Janet Blaney Marketing Manager (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 jblaney@stagnitomail.com Jackie Batson Advertising Manager 224-632-8183 jbatson@stagnitomail.com United StateS MarketS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green • Technology Hospitality • Apparel

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March 2016 | progressivegrocer.com |

129

the last word

Whole Lotta Shakin’ Going On

I

f it’s true that without struggle, there can be no progress, then Wal-Mart Stores Inc. and Whole Foods Market have ample reason for optimism.

Beyond question, the pioneering retailers, residing on opposite ends of the supermarket seesaw, have seen better days. Far from their glory days as impervious players of their respective niches, Whole Foods’ stock price declined by a full one-third — 33 percent — in 2015, and is down 8 percent so far this year.

Meanwhile, Walmart’s stock price has fallen 27 percent over the past 12 months, and the mega-retailer is expecting “relatively fat” net sales growth for fscal 2017 (calendar year 2016), per its most recent Q4 earnings.

As is widely known by now, both chains are immersed in massive campaigns to overhaul operations and reinvigorate their slumping brands. Interestingly, while many of the specifc elements of their individual turnaround plans take direct aim at the counter-weaknesses of the other — i.e., Walmart’s shuttering its Express small-format stores/Whole Foods’ readying to open the frst of its 13 compact 365 stores; Whole Foods’ heightened focus on efciencies/Walmart’s aiming for a more tailored neighborhood assortment; Walmart’s elevated emphasis on higher-quality fresh and free-from foods/Whole Foods’ quest to tout greater value and shed its lingering high-price perception — the shared element of the two chains’ restoration platforms is fresh produce.

Indeed, as the single most infuential department for grocers to fex their quality cred and fresh superiority, produce is unsurprisingly a top priority for the big Ws to recapture lost dollars from shoppers who’ve fed to competitors — many of which have splendidly risen to the occasion to steal their bifurcated pixie dust.

But after admittedly foundering for far too long with its all-important fresh produce oferings, the Bentonville, Ark.-based giant will “continue to push forward with our Win in Fresh initiatives, including testing new layouts, reducing inventory while improving in-stocks in both food and consumables, and exceeding expectations in our urgent agenda items,” according to Walmart U.S. President/CEO Greg Foran, during a recent investors call.

Among the mission-critical initiatives to that end is a push to hire hundreds of “fresh operations managers” over the next three years to train staf on how best to present and maintain fresh produce. With 30 newly hired feld managers now in place to oversee 10 stores each, the chain is also

making another benefcial change for its front-line operations with the recent addition of fxed- and fex-shift employee scheduling.

Meanwhile, Whole Foods’ produce shakeup entails a revamp of its controversial, albeit shortlived, “Unrated/Good/Better/Best” Responsibly Grown rating system, which will go by the wayside come March 31 in favor of a single rating standard. Rolled out over the course of 2015 for both conventional and certifedorganic produce, the chain’s at-a-glance ranking aimed for an additional level of transparency. It also stands to reason that Whole Foods’ threetiered scorecard was adopted to help it meaningfully diferentiate itself from the onslaught of newcomers now encroaching mightily on its native organic turf.

To gain entry, suppliers were required to pay a fee to subscribe to an online portal to fll out lengthy questionnaires, followed by another series of queries, before they could obtain ratings, which were in turn posted beside displays with prominent Responsibly Grown signage. Before long, organic growers rallied against the program, which seemed not only to devalue the already complex USDA certifed-organic requirements, but also largely overshadow them.

Whole Foods took the concerns to heart, and after making initial tweaks last July, is on track for a full-on revamp by the end of this month.

“Based on feedback we’ve received as the program rolled out, we recognize the need to simplify how we communicate its value to our customers,” Edmund LaMacchia, global VP of perishable purchasing, recently penned in the retailer’s Whole Story blog.

In addition to using a single grade, Whole Foods will update its prohibited-pesticide list and grant a Responsibly Grown rating to all certifed-organic produce and foral through January 2017. It will also add support and training to help acclimatize growers to its new food safety regulations and traceability requirements.

Although it’s too soon to say whether their plucky produce plans will pan out as productively as anticipated, both Walmart and Whole Foods have been formidable forces in an industry that’s increasingly better poised to beat them at their own games. While I’m admittedly undecided about which outcome I’m betting on, one thing’s for sure: Tere’s clearly a whole lotta shakin’ going on with both. PG Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

Fresh produce is unsurprisingly a top priority for the big Ws to recapture lost dollars from shoppers who’ve fled to competitors — many of which have splendidly risen to the occasion to steal their bifurcated pixie dust.

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| Progressive Grocer | Ahead of What’s Next | March 2016

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A Bond of Brothers

Tom (left), Tim and Paul Freeman have seen big results in small towns throughout Michigan.

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A BOND OF BROTHERS Save-A-Lot Store Snapshot OPERATOR: Freeman Family Enterprises NUMBER OF STORES: 24 LOCATIONS: Michigan FIRST STORE OPENING: December 1999

The Freeman brothers are no strangers to togetherness.

As teenagers, they all bagged groceries, stocked shelves and sorted bottles in the family’s Gaylord, Mich., grocery store. As young men, they all earned the same degree (business management) from the same college (Oral Roberts University in Tulsa, Okla.).

So in 1999, when they went into business together as Save-A-Lot owners and operators, well, it just seemed like the way things should be. The third-generation grocers started out by creating Freeman Family Enterprises and purchased Save-A-Lot stores in Alpena, Cadillac and Tawas, Mich., from their family’s business, Glen’s Markets. Today the brothers—company president Tim Freeman, vice president Tom Freeman and chief fnancial offcer Paul Freeman—operate 24 Save-A-Lots throughout Michigan, with their newest store opening in February 2016 in Rogers PHOTOS BY A&M PHOTOGRAPHY

From left: Tom, Tim and Paul Freeman say partnering with Save-A-Lot gives them a competitive edge.

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ISSUE 1, VOL. 5

2

WWW.SAVE-A-LOT.COM/OWN

City, Mich., on the site of a long-empty independent IGA grocery.

Big results in small towns Most of the Freeman brothers’ Save-A-Lot stores—which tend to measure between 15,000 and 18,000 square feet— are in towns of 2,500 or fewer, although some serve entire counties with populations of 15,000 or more. Their biggest store is in Traverse City, which has a surrounding population of close to 100,000.

“We’ve been growing pretty consistently,” says Tim Freeman. “We purchased some existing stores, but mostly opened our own.”

The key to developing in these kinds of small markets, says Tim Freeman, is fnding a suitable available building.

“First, we look at the competition in town,” he says. “We were already familiar with northern Michigan, so we knew where the Save-A-Lot model would ft into that market.”

It’s also important to investigate whether the location will support a discount grocer, says Paul Freeman. “We look at the current competitors, how much EBT [Electronic Benefts Transfer] is available in the county and the location of the building.”

The Freemans own three of their locations, and a separate realty company bought the land for the others and leases the buildings to Freeman Family Enterprises. “When you open a new store, the advantage if you lease the building is that your investment is a lot less, sometimes 50 percent less,” says Tim Freeman. “As we have grown over the years, leasing more of our buildings has freed up capital to invest in our growth.”

Beefing up business

opening new stores. They also assist with training new associates,” says Tom Freeman. “After the store is opened, Save-A-Lot will continue to assist us in advertising, competitive price checks, and updated plan-o-grams for every department, along with merchandising recommendations each month. This allows us to spend more time managing our business and taking care of our customers.”

The Save-A-Lot model attracts customers looking for good value, but that’s not the only important consideration, the brothers say.

“We have a very good meat image,” says Paul Freeman.

“We take pride in that.”

“We feel that if people buy your meat at your store, they’ll buy a lot of other things too,” adds Tim Freeman. “We cut all our meat in our own stores. We have our own butchers, and we do custom cuts.”

The brothers say they appreciate the benefts of Save-ALot as a supplier as well.

As a partner, Save-A-Lot fts right into the brothers’ business model of mutual support, the Freemans say.

“Save-A-Lot makes it very easy to order for our stores because all departments can be ordered on one truck,” says Tom Freeman. “Our distribution center here has always been very accommodating with special orders, along with sending additional trucks to ensure that we are ready for business every day.”

“Save-A-Lot partners with us in researching future locations, store design, store setup and merchandising in

“Save-A-Lot has developed a lot of effciencies that enable us to be competitive,” adds Tim Freeman. GE

One for all, all for one

ISSUE 1, VOL. 5

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With a proven hard discount, carefully selected-assortment business model, Save-A-Lot offers entrepreneurs the ability to compete effectively in today’s ever-changing grocery industry.

And there’s never been a better time to be a Save-A-Lot licensee: Save-A-Lot is now offering a Licensed Store Incentive Program for all new and converted licensed stores. The amount of the incentive for each store will depend on the specific terms and financial considerations of each project, but will be a minimum of $200,000 per new store.

If you have a proven track record of successful experience in grocery or other retail management, Save-A-Lot would like to talk to you about becoming a store owner. Here’s how you can take the next step toward a rewarding entrepreneurial opportunity as a Save-A-Lot licensee: ✱ Contact Eric Hunn, Save-A-Lot License Development, at eric.v.hunn@savealot.com or at (314) 592-9446. ✱ Visit the Save-A-Lot website at www.save-a-lot.com/own for more detailed information about becoming a Save-A-Lot owner.

The Save-A-Lot support advantage

Save-A-Lot by the numbers

✱ More than 1,300 stores nationwide ✱ 70% of locations owned and operated by independent licensed retailers ✱ Target neighborhoods with annual household income under $50,000 ✱ Average store size: 15,000 square feet ✱ Fewer than 3,000 SKUs per store ✱ 17 distribution centers across the country ✱ Prices up to 30% lower than conventional supermarkets

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HOW TO WAKE UP BREAKFAST FOOD SALES

18

PACKAGING THAT 36 TAKEOUT WORKS FOR YOU

MARCH 2016

VOLUME TWO

n

ISSUE ONE

Thinking outside the box

PAGE 4

What you can learn from off-site grocerant concepts

Buehlerâ&#x20AC;&#x2122;s Fresh Foods puts its chefs in the spotlight PAGE 30

MARCH 2016

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570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 • 224 632-8200 http://www.progressivegrocer.com/departments/grocerant VP, Brand Director 201-855-7621

Jeff Friedman jfriedman@stagnitomail.com

EDITORIAL Editorial Director Joan Driggs 224-632-8211 jdriggs@stagnitomail.com Managing Editor Elizabeth Brewster Art Director Theodore Hahn thahn@stagnitomail.com Contributing Editors Kathleen Furore, Kathy Hayden, Amelia Levin, Lynn Petrak, Jill Rivkin, Carolyn Schierhorn, Jody Shee ADVERTISING SALES & BUSINESS Midwest Marketing Manager John Huff 224-632-8174 jhuf@stagnitomail.com Western Regional Sales Manager Elizabeth Cherry 310-546-3815 echerry@stagnitomail.com Eastern Marketing Manager Maggie Kaeppel 630-364-2150 • Mobile: 708-565-5350 mkaeppel@stagnitomail.com Northeast Marketing Manager Mike Shaw 201-855-7631 • Mobile: 201-281-9100 mshaw@stagnitomail.com Marketing Manager Janet Blaney (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) jblaney@stagnitomail.com 630-364-1601 Account Executive/ Classified Advertising Terry Kanganis 201-855-7615 • Fax: 201-855-7373 tkanganis@stagnitomail.com General Manager, Custom Media Kathy Colwell 224-632-8244 kcolwell@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com MARKETING & PROMOTION Director of Market Research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com Subscriber Services/Single-copy Purchases 978-671-0449 or email at Stagnito@e-circ.net

EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION VP/Custom Media Division Pierce Hollingsworth 224-632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Corporate Marketing Director Bruce Hendrickson 224-632-8214 bhendrickson@stagnitomail.com Promotion Director Robert Kuwada 201-855-7616 rkuwada@stagnitomail.com Director of Events Ken Romeo 224-632-8181 kromeo@stagnitomail.com Director of Digital Strategy Matt McGuire 224-632-8180 mmcguire@stagnitomail.com Director of Market Research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com CORPORATE OFFICERS President & CEO Harry Stagnito Chief Information Officer Kollin Stagnito SVP, Partner Ned Bardic Chief Brand Officer Korry Stagnito VP & CFO Kyle Stagnito Cover photo at Strack & Van Til by Marta Garcia

TABLE OF CONTENTS MARCH 2016

4

Thinking outside the box Off-site prepared food concepts are offering supermarket grocerants food for thought.

10 14 18 22

Salad days Mix it up with the freshest new concepts from fast casual foodservice.

33

Going digital

36

Wrap it up

39

Waste not, want not Give leftover prepared foods a second life—or prevent extras in the first place.

Breakfast powers up Expand hours, boost offerings to awaken this traditional daypart cuisine.

Pay rates on the rise

24 28 30 32

Expanded digital merchandising can boost grocerant shoppers’ engagement, loyalty, spending.

Make your takeout packaging work for both you and your customers.

Damage control New strategies for temperature monitoring can help grocerants keep their cool—or turn up the heat.

Accent on Cuisine: Saucy Korean Hot Food: Pulses on the rise Back of the House: Buehler’s Fresh Foods Food Innovator Q&A: Christine Keller

Confront minimum wage increases with better business practices, say experts.

18 Building the grocerant experience I recently participated in the Culinary Institute of America’s inaugural Appetites + Innovation leadership collaborative for retail foodservice. Hearing the issues that senior culinary and business leaders struggle with validates the goal of Progressive Grocer’s Grocerant Summit, which aims to ensure that every retailer’s fresh prepared food program is the most relevant for the banner and desirable for customers.

But I’m convinced we need to get to the root of myriad grocerant issues: the customer’s in-store “experience.” Supermarkets today ofer an A to Z spectrum of involvement for shoppers, from scratch ingredients and easy-to-assemble meals, to fresh prepared oferings to-go and full-service dining in-store. But very few retailers get the intangible grocerant “experience” right.

Progressive Grocer’s 2016 Grocerant Summit is themed “Building the Grocerant Experience,” and promises to deliver even more pointed insights and takeaways than our successful 2015 event. Save the date for Progressive Grocer’s Grocerant Summit, Oct. 25-26, 2016 at The Renaissance Schaumburg (Illinois) Convention Center Hotel.

Joan Driggs Editorial Director MARCH 2016

SOLUTIONS

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Thinking

outside the box

BY AMELIA LEVIN

Off-site prepared food concepts offer supermarket grocerants food for thought.

All of Eataly’s restaurant dishes are also available in the food hall’s retail stores.

Freshly made sushi at the drug store. Pre-packaged healthy meals at the neighborhood retail store.

Gourmet pasta sauce and handpulled mozzarella from the upscale food court.

Supermarkets are no longer the only businesses catering to the hot market for fresh prepared foods. As average household sizes continue to shrink and consumers become more

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adventurous in exploring new culinary outlets, supermarket-based grocerants are facing an array of emerging prepared food concepts across the retail spectrum. Tis new generation of grocerant outlets is proving to be a source of both competition and inspiration for food retailers, say experts.

“Supermarket prepared food operators have told us that one of their greatest challenges to growing their business is nearby restaurants, but now these other non-traditional outlets are creating additional competition,” says Brian Darr, managing director at Chicago-based research frm Datassential. “Retailers also expressed that they are trying to improve perceptions of their prepared food quality to

“[Supermarket grocerant] competitors should be thought of as restaurants and [non-traditional] outlets, and not just as other prepared food departments or competition from store center aisles.”

—Brian Darr, Datassential

My Fit Foods features color coding and minimal signage for easy customer navigation.

better compete with restaurants and to win over consumers. When determining growth strategies, competitors should be thought of as restaurants and these other outlets, and not just as other prepared food departments or competition from store center aisles.”

Drug store giants Walgreens and CVS, for example, have been making in-roads in their prepared food departments, ofering fresh fruits and vegetables, milk, eggs and yogurt, juices, smoothies, pre-packaged salads and sandwiches, and more—not unlike a mini-grocery store. Walgreens even ofers sushi and other upscale foods to-go at some fagship stores in the Chicago market.

Let’s take a look at some of the most innovative new concepts from non-traditional grocerants that could also translate into supermarket show stoppers.

Stand-alone service: My Fit Foods Competing directly with supermarkets and even restaurants is the growing group of chef-driven, fresh food-focused independent grocerants. While some are delivery-only using customized apps, others have launched or expanded their stand-alone retail presence. Hungry, time-pressed customers can drop into a grocerant store and select from a variety of prepared items, or even put together their own semi-homemade meal to cook at home. Many of these next-generation grocerants have popped up in urban markets near public transportation, train stations and airports to cater to city dwellers and commuters on their way to and from work.

Houston-based My Fit Foods, a retail store concept ofering made-from-scratch, grab-and-go meals, has expanded

across the country to more than 50 locations throughout Texas, Oklahoma, Arizona and California. Founded by a former personal trainer in 2006, the company aims to make eating healthy easy and more convenient through its menu of more than 75 nutritionally balanced meals and snacks supporting a cleaner, ftter lifestyle.

“We are one of the few places where shoppers can stop in to fnd a delicious hot breakfast that is both convenient and nutritious, while simultaneously picking up a healthy and favorful lunch or dinner for later,” says chief executive ofcer David Goronkin.

One of the company’s most popular items is the roasted shrimp tacos with crunchy broccoli slaw, mango pico de gallo, creamy avocado sauce and corn tortillas for 280 calories. Shoppers can also choose from gluten-free, vegan, vegetarian, reduced-sodium and other diet-specifc dishes.

“Te meals are most popular among young professionals and couples with smaller households who don’t want

MARCH 2016

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to cook every meal, but appreciate having a healthy and favorful alternative to traditional takeout options,” says Goronkin.

Clean, refrigerated displays with plenty of color coding and minimal signage help customers navigate among the many breakfast, lunch, dinner and snack options. My Fit Foods also caters to a tech-savvy crowd by ofering an online ordering program for planning meal purchases ahead of time.

Te company focuses on educating its staf to help customers select dishes based on their nutrition goals, special diet needs and lifestyle choices. Customers can also talk online or meet with on-site nutritionists at each location to create free customized meal plans for losing weight, pumping up the protein, reducing sodium intake and other dietary goals.

“In-store promotions are also incredibly popular,” says Goronkin. “Previous initiatives included the My Fit Foods Pay It Forward campaign, which ofered customers who purchased a meal at any My Fit Foods location the option to donate a free meal to a friend or to a local hunger-relief charity.”

Courting food hall diners: Eataly Also giving supermarket grocerants a big run for their money are the increasingly popular food halls setting up shop in major metropolitan areas. Tese modern-day “food court” installations ofen revolve around a gourmet or culinary theme and ofer multiple points of sale for retail shopping, prepared foods takeout and sit-down dining.

Eataly, a partnership between founder Oscar Farinetti and

B&B Hospitality Group (including celebrity Chef Mario Batali) with locations in New York City and Chicago, focuses on ofering a wide range of Italian products, prepared foods and dining options ranging from the approachable to the high-end in terms of price and culinary inspiration.

“One of the prevailing concepts of Eataly is to eat, shop and learn,” says Malory Scordato, general manager at the Chicago location. Everything is integrated and compartmentalized: Te bakery and retail shelves with diferent marinara sauces, packaged and fresh pastas and other items sit right next to the pizza/pasta counter, where customers can choose pies to-go or for eating in. Te fresh fsh refrigerated display case is positioned near Il Pesce, a mini-restaurant where customers can indulge in fresh oysters, crudo (Italian-style raw fsh), and pan-seared catch of the day.

“We hope people can make that connection between what they’re eating and what they can see,” says Scordato. “While you’re sitting and enjoying your bucatini [pasta], you can watch someone pulling the fresh mozzarella on your pasta.

Anything you enjoy in any of the restaurants, including the brewery, you can buy in the store.”

Eataly also ofers a range of other prepared foods like prime rib and rotisserie meats as well as a fresh grocery section for vegetables, fruits, herbs and other necessities for re-creating dishes at home.

In addition, Eataly has tried to break the supermarket mold of 9-foot shelving to keep products at eye level, so customers can always see beyond their immediate area and scan the space for the next destination.

Staf and shopper education is key to the success of the Eataly concept, says Scordato. “Because many of our products

Eataly offers multiple points of sale for sit-down dining, prepared foods takeout and retail shopping.

6

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are imported from Italy, some of our customers fnd things they typically have not heard of or seen before, so we have to educate our staf to talk to our shoppers about how to select and use those products,” he says.

of panini sandwiches in 2015, along with a line of customizable burritos and burrito bowls for lunch and dinner in January 2016.

“We don’t have seating in the majority of our locations, so we compete with grocery Digital displays showcase Wawa’s seasonal offerings, Signage with stories and othstores on a product-by-prodnew launches and promotions. er details about the products uct basis,” says Dana Celona, also help in this efort, in addition to an expanded online concept specialist at the Wawa, Pa.-based chain of more shopping component with detailed information about than 630 24-hour food markets in the Eastern and Southdiferent products. east United States, more than half of which also sell gasoline. “We compete less with dinner entrees and more with bakery items, sandwiches and beverages.”

One-stop shopping at c-stores: Wawa

Convenience stores have also stepped up their grocerant-style game, going above and beyond just partnering with brands and foodservice suppliers for made-to-order breakfast, sandwich and pizza oferings. Some c-stores are expanding the footprints of their refrigerated display cases to include more fresh fruits and vegetables, along with better-quality pre-packaged sandwiches and wraps, and even small salad/toppings bars.

Wawa, a longtime East Coast leader among convenience stores for its own branded prepared foods, is looking to capture more customers shopping at c-stores for the kinds of take-home items they might fnd at grocery stores, but at lower prices.

In addition to Wawa’s wide range of grab-and-go and made-to-order single-serve meals and snacks—including hot and cold breakfast and other sandwiches and hoagies, prepared salads, cut fruit and vegetable snack cups, yogurt parfaits, soups, smoothies and sides/mini-meals like mac n’ cheese and meatballs—the company introduced a new line

Wawa is employing a number of marketing tactics to shine a light on its expanded prepared food oferings, from traditional in-store signage and billboards to mobile apps and digital displays showcasing seasonal oferings, new launches and promotions.

“What we have found is that it’s not just about the demographics of our customer, but need states,” Celona says.

“We own a unique space in the non-traditional foodservice space, especially those that have fuel, because we combine so many need states into one location.”

Celona says younger customers in particular are attracted by the concept of one-stop shopping for both high-quality prepared foods and more traditional c-store products.

“Everyone is starved for time, and that is signifcantly changing consumer behavior,” Celona says. “Te small format is very much ‘in’ and consumers are looking for something fast and convenient, but still exciting and of good quality. Convenience stores are in a unique place to ofer that.” G

Competing with of-site grocerants Providing a greater selection of home-style meals, improving to-go packaging, and pricing as competitively as possible are just some of the ways supermarkets can gain an advantage in the new wider world of retail grocerants, says Brian Darr, managing director at Datassential.

Supermarket grocerants should also consider loyalty programs and special pricing in the form of combos, volume pricing and buy-one-get-one deals. “These are pretty common at restaurants, so [grocerants] need to run programs

8

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MARCH 2016

and marketing that are more commonplace at restaurants to help drive trafc,” he says.

“Menuing items that shoppers expect to see in supermarket prepared food departments will remain important, but operators may be able to add variety and test out new items with weekly specials or rotating menu items,” adds Darr.

“As younger shoppers use the prepared foods department more, we believe this demand for more ethnically inspired and authentic foods will grow.”

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Salad days

Mix it up with the freshest new concepts from fast casual

foodservice.

BY K ATHY HAYDEN

It’s a sweet, mad, fresh green world right now, as salad-centric eateries evolve to incorporate new concepts that are tailor-made for grocerants too.

With names like sweetgreen, MAD Greens and Tender Greens, fast casual salad restaurants are ofering counter service where customers direct their salad construction while “salad artists” chop the fnished product with fancy knife skills. Other salad outlets encourage customers to build their own or try chef-designed house specials with clever names and backstories, such as MAD Greens’ Siam I Am, inspired by the traditional

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Tai papaya salad and full of trendy ingredients like kale, quinoa and edamame.

Beyond raw talent Even without the luxury of hiring “salad artists,” there are plenty of ways to upgrade the standard salad bar to compete with current trends. Datassential director of client solutions Colleen McClellan notes that across all menus, traditional mixed salads are in decline, and the real growth is in more elaborate “salads with a build.”

“Treat the salad bar like Chipotle’s made-to-order menu and service style,” McClellan recommends. “Consider visual cues as ways to show consumers how to build restaurant-style ‘themed’ salads.” For example, signs and

Globalization of favors is another emerging salad trend that’s ripe for grocerant adoption and promotion.

containers can provide a road map to describe how 1+2+3 specifc ingredients + dressing could create a Salad of the Day, such as BBQ Ranch Chicken Salad, she says.

Globalization of favors is another emerging salad trend that’s ripe for grocerant adoption and promotion, says Christine Keller, director of trend practice at San Francisco’s CCD Innovation, a food and beverage product development agency.

“Grocerants could cluster featured global ingredients in a dedicated section of the salad bar,” says Keller. “Te salad chain Chopt does a good job representing global favors in salad form,” she adds, noting that a recent Chopt promotion ofered a taste of the Middle East with chef-made specials like a Moroccan Harvest Grain Salad with medjool date, pomegranate seeds, herbed freekeh and faro and kale.

“Weekly specials or regional promotions are opportunities to use digital and social media to notify customers of featured ingredients and local harvests they can fnd at the salad bar as well as how to put them together for custom salads,” notes Keller.

Salad building blocks Building great salads ultimately depends on the quality and consumer appeal of the ingredients, so it’s vital that grocerants stay on top of popular, innovative salad oferings in a variety of restaurant segments, say industry observers.

“Supermarket salad bars are competing with the emerging fast casuals, and retailers have to pay attention to what

they are doing,” says Keller, who recommends mixing uncooked and cooked preparations as an efective way to emulate popular restaurant dishes. Tese kinds of on-trend preparations include updated slaws with very thinly sliced fruit and vegetables in signature dressings; salt-roasted beets, braised Brussels sprouts and “blistered” chiles are popular cooked preparations.

“Salad making is about building layers of favors,” says Chris LaRocca, founder of St. Louis-based Crushed Red Urban Bake & Chop Shop. He sees contrasting favors, textures and temperatures as ways to win over consumer taste buds. For instance, heartier greens can stand up to the creaminess of avocado or goat cheese.

“Tender greens are naturally sweet and need some saltiness for oomph,” he says, and he likes to use citrus and other acids in dressings, to “cut through the sweet.”

Danny Hicks, the commissary general manager at New York Citybased Just Salad, noticed kimchee showing up everywhere, so he began experimenting with housemade Asian pickles to create what he calls “young kimchee” that works well with other salad ingredients.

“Stay up on the latest grains, like freekeh and barley,” Keller advises, and she urges prepared food managers to go even further with plant-based protein oferings. “Consider getting some of the newer alternative proteins in the mix. Many emerging restaurants are using products from Beyond Meat, made with non-GMO soy and pea protein.”

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Catering to the crave Cheese, crunchy elements and other salad toppings are the small fnishing touches that allow grocerant managers to take some chances. Customers are open to small, low commitment experimentation with new favors— half a scoop or a spoonful can get shoppers trying new ingredients.

Cheese is always a good place to start when branching out to new favors, and adding more cheese varietals is an easy upgrade to the salad bar. New research from the International Dairy-Deli-Bakery Association (IDDBA) and

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Nielsen Perishables Group shows how specialty cheese has become a “key player within the deli space, representing roughly 12 percent of total deli sales and ranking as one of the top 10 fastest growing categories within deli.”

Datassential’s McClellan also suggests treating the cheese section of a salad bar as a place to ofer build-your-own cheese/fruit/nut plates. Her menu tracking fnds Gouda, manchego and Asiago cheeses showing some of the strongest growth in restaurants. Candied and roasted nuts, cheese toasts and savory granolas are a few of the latest ideas for salad toppings that also work as cheese accompaniments and snacks.

Shake up packaging options One of the easiest ways to upgrade a salad bar is to reconsider the packaging, says Christine Keller, director of trend practice at San Francisco’s CCD Innovation.

“There are so many more products out there other than the clear plastic tubs,” says Keller. “Most limited service chains have a few sizes of bowls, [but] there are mold injection options and many recycled options entering the market.”

Michael Holleman, director of culinary development at Minnesota-based InHarvest Foodservice and chairman of the advisory board of the Whole Grains Council, wants to revisit

“[Shaker salads] make sense anywhere grab-and-go makes sense, which is everywhere.”

— Michael Holleman, InHarvest

Address the dressings If customization is king in the land of salads, dressings are the crowning glory. On-trend dressings take cues from ethnic infuences, according to Matt Weingarten, culinary director at Dig Inn, a growing New York City-based casual chain, who sees authentic ingredients as an ideal way to update dressings.

“Southeast Asian favors feature chiles, lime and fsh sauce; North African favors use harissa and berbere [spice mix],” Weingarten says. “Middle Eastern cuisine focuses on a mix of harissa, ajvar [a spread made from red bell peppers and garlic] and za’atar [sumac, sesame seed and herbs]; Latin favors use lime, chiles and cilantro. In addition to these favor profles, exotic herbs and spices like verbena, hyssop and sumac are becoming popular.”

the “shaker salad” concept that proved ahead of its time when McDonald’s tried it back in 2000.

“The ingredients were too light so it didn’t really work.

InHarvest developed a version with grains at the bottom and lighter ingredients, like greens, chopped vegetables, protein and shredded cheese, on top,” Holleman says. “We use a domed cup, similar to the ones yogurt granola parfaits are served in, with dressing in a separate cup at the top.”

Holleman says he has seen shaker salads gain traction in school segments, airports and some grocery settings. “These make sense anywhere grab-and-go makes sense, which is everywhere,” he says.

pose trim from the produce department. At Just Salad, a creamy nut-free kale pesto combines Parmesan cheese and chunky pieces of kale and garlic.

“It started as a limited time ofer, but is one of those ones that stayed on the menu,” says Hicks. A big part of the pesto’s success, he says, was letting customers try it. “We give out a lot of samples—in cups or on pieces of lettuce.” G

Top salad trends

Mixing dressings and sauces brings even more favor to the plate. Te Falafel Market Plate at Chopt, for example, piles marinated kale with a quinoa, lentil and millet grain blend with gold and purple beets, chickpea falafel and caulifower radish tabbouleh, fnished with both lemon tahini and a drizzle of zhug hot sauce.

Dried fruit and spices as enhancements Infused vegetables Global favors Soft and semi-soft cheeses Seafood as a protein Grain salads Wilted salads

House-made dressings and sauces can also cross-pur-

Source: The Food Channel/CultureWaves/ International Food Futurists, 2015

MARCH 2016

SOLUTIONS

13

Waste not, want not

BY JODY SHEE

Give leftover prepared foods a second life— or prevent extras in the first place.

Food waste is front and center these days, thanks to media attention and retailers’ own self-scrutiny.

Tat’s why it’s especially important for grocerant departments to monitor what happens to prepared foods that can’t be sold, says David Fikes, vice president of consumer/community afairs and communications for the Food Marketing Institute (FMI), which partnered with the National Restaurant Association and the Grocery Manufacturers Association to create the Food Waste Reduction Alliance (FWRA). Te goal: an efcient operation that reduces, donates and recycles lefover prepared foods.

An ounce of prevention Prepared food operations have the perfect opportunity to redirect some of what may otherwise be wasted. It starts with getting a handle on the actual amounts of food involved, say experts.

“The things we can measure, we can manage.”

— Andrew Shakman, LeanPath “Te things we can measure, we can manage,” says Andrew Shakman, co-founder and chief executive ofcer of food waste tracking and prevention company LeanPath in Portland, Ore. Te frm’s technology measures food waste and includes systems to automate the process of recording, with scales connected to a camera.

With hard numbers in hand about when and why waste occurs, grocerants are in a position to optimize their operations, says Shakman. At a salad bar, for example, weight data can help determine when to reduce the line from two to one. “Having everything fully available right up to the end of service leads to waste,” he says.

Shakman also suggests using smaller serving vessels for prepared foods that correspond to the amount of product actually expected to sell. “You tend to produce to the size of the vessel for certain merchandising. Go to a smaller vessel,” he says.

Creatively repurposing excess product in the kitchen will also help decrease the amount of waste generated, says Shakman. Vegetable trimmings, for instance, can become an ingredient in soup stock, juices and veggie burgers. Cofee grounds can do double duty for iced cofee later on, while odds and ends of cake or pie layered with whipped cream make a perfect parfait. Rather than toss lefover bread at the end of the day, save it to create croutons or bread pudding.

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MARCH 2016

Grocery stores and food waste

For every

More than

$1,000 of revenue

40% of wasted food from

grocery stores generate,

grocery stores is donated or recycled

10 lbs. of food waste is created

What happens to the unsold, wasted food once it’s diverted?

23.3%

26.2% Animal feed

Feeds hungry families

10.3% Biofuel 24.6% Composted Source: Food Waste Reduction Alliance

Recycling scraps into compost Composting is one of the hottest recycling methods around, and Wegmans Food Markets Inc., Rochester, N.Y., is among the food retailers using it for waste from its grocerant department.

“In highly prepared foods, there’s a lot of cutting, slicing and dicing, resulting in inedible trim. We have a composting program for that,” says Jason Wadsworth, Wegmans sustainability manager and retail chair for the FWRA. Te chain’s composting numbers continue to rise, from 18 million pounds of food waste diverted from landflls in 2014 to an estimated 19 million pounds in 2015.

Four-wheel totes, located at Wegmans’ food prep sites so workers can deposit inedible scraps for composting, serve as a much more visible reminder of food waste than a plastic-lined garbage can with a lid. “It’s a teachable moment to change your behavior,” says Wadsworth. “It’s a hierarchy of food waste in one bin. It makes you ask, ‘Should that be in compost, or could it have been donated?’”

When the compost bin is full, workers wheel it to the back dock for collection. Te composting company then tips the tote into a dump truck with a lif gate. “Tat truck has a power washer built into it, cleaning and sanitizing the totes while they dump. Tat’s important for bringing the totes back into the departments to collect more scraps,” Wadsworth says.

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15

With hard numbers in hand about when and why waste occurs, grocerants are in a position to optimize their operations.

The hierarchy of food recycling

Develop a donation partnership

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On the other hand, restauSell rants such as All product available for sale Yum! Brands, with more than 41,000 outlets in 125 Reuse countries, have donated fresh food for years.

Items that are not for sale, but can Trough the company’s be used in another department Harvest Program founded in 1992, Pizza Hut, KFC and Taco Bell restaurants have Donate donated more than 183 million pounds of food with a fair market To food banks and value of $860 million as of 2015, says other organizations Tyler Hampton, manager of Yum! Brands Foundation in Louisville.

Co

Compost materials from three clusters of Wegmans stores located in Rochester and Bufalo, N.Y., even go through anaerobic digesters at one of two dairy farms to create renewable energy.

Te farms are able to run on that energy. “Now we’re talking about how to buy the energy back. Tat would close the loop,” Wadsworth says.

Donate To farmers for animals or compost

Donating surplus prepared foods can be challenging for retailers, from concerns about how long the product will last afer it leaves the store to the logistics of getting food to organizations that feed the hungry. Additionally, there may not be enough storage space to keep prepared foods viably until they are picked up.

Landfill

“You’ll fnd that there are not a lot of folks in grocery that are donating prepared foods—packaged or unpackaged,” says Wadsworth. “However, packaged prepared foods provides an opportunity that wasn’t there before.”

“No one wants to be the test case for [the Good Samaritan law for food donors].”

— David Fikes, Food Marketing Institute

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At Pizza Hut and KFC locations, food is prepared and held under warmers until customers order it. Once the food reaches its predetermined hold time, it has to be taken of the line. Employees place that food into non-branded containers and then into the freezer. Once a week, a charity organization picks up the food containers for repurposing or reheating.

Food retailers have been slower to adopt these kinds of programs, says FMI’s Fikes, in part because they have so many more products compared with restaurants’ more limited menus. Tere is also a very real fear of making someone sick and the lawsuits that could result, he adds.

Even though a Good Samaritan law is designed to protect good-faith food donors from legal liability for illness, the law hasn’t been put to the test in this area. “No one wants to be the test case for that,” says Fikes. “You could win in court, but lose in public opinion if someone got sick from your food.”

At Wegmans, Wadsworth says he’s working to counter that perception. “Tere really is little risk, because restaurants have been doing it for years with no issue. It’s all about the process and how the food to donate is handled.” G

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Breakfast

powers up

BY K ATHY HAYDEN

Expand hours, boost offerings to awaken traditional daypart cuisine.

Food trend watchers and market analysts declared 2015 the year of breakfast, and for good reason: Making Egg McMufns available all day saved McDonald’s from a sales dip, Taco Bell reinvented breakfast tacos, and donuts became the new cupcakes, just for starters.

At trendy, chef-driven independents like Eggslut, located inside the Grand Central Market in downtown Los Angeles, fans line up daily for upscale egg sandwiches like the Fairfax, featuring sof scrambled eggs and chives, cheddar cheese, caramelized onions and Sriracha mayo on a warm brioche bun.

Tere’s no question that breakfast elements can transform menus and blend dayparts like no other meal.

Grocerants can make the most of the current momentum by boosting breakfast oferings and expanding breakfast

Eggslut’s upscale breakfast sandwiches are star menu items all day long.

hours to keep pace with consumer cravings.

Colleen McClellan, director of client solutions at Chicago-based research frm Datassential, notes that while eggs, bacon, ham, sausage and chicken are the Top 5 breakfast proteins, new ingredients and favors are also infuencing the changing profle and hours of breakfast.

“Southern favorites like pulled pork, fried chicken and barbecue are showing growth [too],” she adds.

Datassential research fnds that 64 percent of consumers eat breakfast during morning hours, but 24 percent report eating it any time other than typical breakfast hours.

Among millennials, this percentage jumps to 56 percent for anytime breakfast.

Steve Solomon, culinary consultant for the American Egg Board, has also watched millennials’ infuence push more breakfast consumption.

Mini quiches can be made ahead and rewarmed for breakfast sales.

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“Tis group is helping to drive an ‘anything goes’ approach to the menu. Tey want it all, any time, and that includes price, value, diferent ethnic infuences,” says Solomon. “Tey are asking, ‘Why the constraints? If I can get breakfast all day at Dunkin’ Donuts, why can’t I get it

“Our fresh sandwich counter features breakfast sandwiches and burritos.”

— Chef Evelyn Miliate, Raley’s Other chefs and R&D experts are fnding savvy ways to make sure morning fare stays on the menu all day. Highheat panini presses mean grab-and-go breakfast sandwiches are always ready at California-based Raley’s stores in the western United States, for example.

The continued interest in bold, spicy flavors has finally hit the breakfast daypart.

“Our fresh sandwich counter features breakfast sandwiches and burritos. Te eggs are pre-made, omelet-style, and we ofer an egg white version,” says Raley’s Chef Evelyn Miliate. “We feature diferent meats and cheeses from the deli, and we put together specials like the spinach Florentine. All are warmed on a panini grill for a hot, portable fnish.”

here?’ Teir eating styles are changing the landscape for everyone.”

Overcoming operational hurdles

“If short-order cooked eggs aren’t an option because of stafng,” adds Solomon, “consider what Panera does with new portable breakfast ideas. Teir soufés are a lot like mini quiches or egg bakes, which can be made ahead and rewarmed.”

For many in foodservice, the answer to Why the constraints? has been operations. Pancakes, wafes and most egg preparations don’t hold particularly well, and not all grocerants have made-to-order capabilities available at all times. Even McDonald’s had to fgure out how to split grill space between eggs and burgers before launching its breakfast all day program.

Make it move Solomon also notes that there’s more room in the break-

Within the past day, had breakfast: 64% 56%

53%

All Millennials

24% 16%

12% 6% During breakfast hours

Anytime other than breakfast

During lunch hours

6% For afternoon snack

15%

12% 6%

6%

During dinner hours

For late night snack

Source: Datassential, December 2015

MARCH 2016

SOLUTIONS

19

fast savory pastry category for products like sausage rolls, bacon and cheese mufns, mini frittatas or stratas. Tese baked breakfast options have the added advantage of portability, which Paul Darrow, director of Innovation and Insights at Kellogg Co., calls extremely important to the breakfast daypart, especially as breakfast becomes part of the growing snack segment.

“While most breakfasts are made at home, a high percentage of these meals are taken and eaten on-thego,” says Darrow. “Once people leave their houses, they ofen grab additional mini meals that keep them going throughout the morning while doing other tasks. Catering to these on-the-go behaviors is a big opportunity for additional sales in both grocery and restaurant settings.”

Breakfast sandwiches and wraps are the typical go-to for grab-and-go breakfast, but as breakfast merges with other meals, formats are also changing. At the Tortas Frontera restaurants in Chicago’s O’Hare Airport, Chef Rick Bayless ofers all his morning tortas on top of arugula instead of in pocket bread. Tis salad-style breakfast concept started as a special request or “secret menu” option, but it

Portability is key to successful breakfast products.

has gained such acceptance that it’s on the regular menu now, explains Lauren DeMaria, director of culinary and business development at CSSI, a Chicago-based culinary and marketing consultancy.

“Breakfast salads make sense. When you put them in togo bowls, they are just as portable as a sandwich, and arugula wilts nicely while still maintaining some crunch,” DeMaria says. “It holds well with some heat on it.”

Creating a stir Solomon notes that breakfast bowl formats can also take more leeway with ingredients, such as messy sauces, and can be inspired by other dayparts and dishes, like rice-based bowls or even a breakfast poutine with hash browns as the base.

Consider the huevos rancheros available from Farmer’s Fridge, cutting-edge vending machines cropping up throughout Chicago. Brown rice and hard-boiled eggs are layered into a reusable jar and topped with avocado dressing, a pico de gallo sauce of tomato, black beans, corn, onion, jalapeno, cilantro, lime juice and salt, and then fnished with feta cheese.

Trend trackers have declared porridge the latest hipster food fetish.

“Breakfast has traditionally been a daypart of subtle favors and mellow oferings, but the continued interest in

As more non-traditional segments ofer breakfast, ingredients, formats and techniques borrowed from lunch and dinner increasingly are impacting the daypart.

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MARCH 2016

spicy, bold favors has fnally hit this daypart,” Solomon says, “in the form of such favors as harissa, Sriracha, smoked paprika, guajillo and habanero.”

Shripka explains, “We’re focused on reimagining some of our longtime favorites and trying to inspire people to lean into the idea of customization.”

Datassential’s menu tracking fnds bold favors coming from bacon favored with peppercorn, jalapeno, garlic herb or chipotle. Emerging breakfast sauces include pesto, remoulade and bearnaise as well as sweet and savory butters.

Solomon sees grocerants having an advantage when it comes to this kind of customization, because so many ingredients are available in-house: “Expand favors with upscale cheese choices. Use CPG sauces. Add more greens,” he says. “And avocado is always a hit, especially with avocado toast being such a cult item for the past couple of years.

In a recent blog, Atlanta-based menu maven and trend tracker Nancy Kruse declared porridge the latest hipster food fetish, citing examples like Chicken & Carolina Gold Rice Porridge at Edmund’s Oast restaurant in Charleston, S.C., and Ancient Grain Porridge made with coconut milk, pomegranate, pistachios, hemp seeds and kiwi at Milktooth in Indianapolis.

At Eggslut in Los Angeles, egg sandwiches are the star all day, every day, but the namesake dish features a coddled egg on top of potato purée, poached in a glass jar, topped with gray salt and chives and served with slices of baguette.

“Shop the shelves so you’re ofering more than what people can get at McDonald’s,” Solomon adds. G

Digital transformation made simple

Breakfast’s next wave With all-day breakfast, no one is watching the clock for guidance on what to serve and how to serve it.

As more non-traditional segments ofer breakfast, notes Solomon, ingredients, formats and techniques borrowed from lunch and dinner increasingly are impacting the daypart.

Meanwhile, traditional breakfast providers are getting experimental to stay in the game.

Andy Shripka, associate director Kellogg’s brand marketing, describes how the brand’s Stir It Up campaign is designed to push boundaries on how cereal can be enjoyed. Kellogg’s partnered with Chef Danny Bowien of San Francisco’s Mission Chinese Food to create pairings like Frosted Mini-Wheats with cashew butter and persimmon jam. Bowien’s Frosted Flakes with green tea noodles and matcha (tea) milk blends a breakfast favorite with an exciting new favor most consumers haven’t tried.

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Pay rates on the rise Confront minimum wage increases with better business practices, say experts.

BY CAROLYN SCHIERHORN

Fourteen U.S. states have already implemented minimum wage hikes in 2016, led by California and Massachusetts as the frst states in the nation with a $10 foor. What’s more, several cities, including San Francisco and Seattle, are phasing in a $15 minimum wage during the next few years.

Tose kinds of rising labor costs understandably worry grocerant operators, but these retailers are in a unique position to thrive if they provide top-notch, ready-to-eat food at more afordable prices than restaurants do while ofering convenient ways to pick up other grocery items, says grocerant consultant Steven Johnson of Foodservice Solutions in Tacoma, Wash. In fact, a higher minimum wage can actually be a boon to grocerant operators because it encourages them to expect more from existing workers and hire better-quality employees, contends James Sweeney, managing director of the Stores Consulting Group in Wilmington, Ohio.

But retailers in the United States will also need to reduce grocerant costs by shifing more and more of their ready-to-eat food preparation of-site to automated,

“A lot of the easy or automatable labor can be done elsewhere.”

— Stuart Jackson, L.E.K. Consulting

22

SOLUTIONS

commissary-type facilities, according to other industry observers. “Te best solution is the substitution of capital and automation for manual labor,” says Stuart Jackson, the Chicago-based global managing partner of London frm L.E.K. Consulting.

Lessons from the U.K. To succeed when labor costs escalate, retailers need to deliver value and communicate why a purchase makes sense, Jackson says. In the United Kingdom, grocery stores have a long tradition of selling ready-to-eat meals, and they promote them well, he adds.

For example, London-based Marks & Spencer, a chain known for its premium prepared foods, had great success a few years ago with its “Dine in for two for £10” cam-

MARCH 2016

A well-paid labor force adds value of its own— especially for the more sophisticated needs of a successful prepared food department. paign, which at the time was approximately equivalent to US$15. Te bundled meal included a main dish, a side order, a dessert and a bottle of wine. Marks & Spencer effectively conveyed to British consumers that “Dine in for two” was only a fraction of the cost of dinner with wine at a sit-down restaurant.

U.K. grocers also rely on of-site, largely automated kitchen facilities for their meal preparation, which helps control labor costs, notes Jackson. “We’re seeing this happen in the foodservice industry in the U.S., where products are delivered semi-prepared to restaurants and just need to be fnished of. I think we will see the same in the grocerant sector,” he predicts. “Costco, for example, has experimented with buying pizzas that just have cheese and tomato sauce and adding toppings in the store, so consumers are ofered a custom product.

“A lot of the easy or automatable labor can be done elsewhere,” he says.

Streamline oferings As labor costs rise, it becomes even more imperative for grocerants to ofer mix-and-match meal solutions rather

than a plethora of individual salad bar items, entrees, side dishes, desserts and deli meats, which only exacerbates food waste and overwhelms customers, says Johnson. By paring down the number of oferings and championing a rotating menu of customizable restaurant-quality meals, grocerants can save customers time and increase their satisfaction while building store trafc and margins, he says.

Above all, grocerants shouldn’t try to use higher wages as an excuse to jack up prices, cautions Johnson, who recalls his outrage when he noticed that one supermarket chain was charging $11 for a pound of store-made potato salad.

“Your customers aren’t stupid,” he says. “Tey’re not going to be taken advantage of.”

More bang for labor buck But even when higher wages for store employees are inevitable, keep in mind that a well-paid labor force adds value of its own—especially for the more sophisticated needs of a successful prepared food department, says Sweeney.

“If you look across the retail landscape, the organizations that pay better have the highest-quality workers,” he says.

“When you pay people more, it raises your expectations for them. And the likelihood that you will put up with mediocre or substandard performance goes down.”

In turn, when retail workers are more generously paid, they tend to be more loyal and reliable, work harder and provide better customer service, while turnover and training costs drop dramatically, Sweeney says.

Employees who feel rewarded and recognized for what they do will go the extra mile, agrees Johnson. “When it comes to selling fresh-prepared, ready-to-eat meals,” he says, “the focus has to be on the customers, the food quality, the service and the price.” G

MARCH 2016

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23

Accent on Cuisine:

Saucy Korean

BY K ATHY HAYDEN

COURTESY OF NATIONAL PORK BOARD

thinks traditional Korean cuisine When food trucks has even more potential for gaining rolled into the restaumomentum on American menus.

As an entry point, there’s Korean rant scene about barbecue sauce, bulgogi, which has some very familiar favors. a decade ago, Roy Choi’s Los Angeles “Like many regional American barbecue sauces, bulgogi is sweet, area Kogi BBQ Taco slightly spicy and salty,” says Baggs.

Truck soon pulled out “Tis is a very transferable favor system. Traditional Korean barbein front in terms of cue is made with beef short ribs, but this sauce works with every propopularity and natein—even tofu—so that operators tional culinary infucan ofer this in a range of ways, and protein is very important to ence, serving up a many consumers right now.” hybrid Korean/ Mexican cuisine.

Korean pork chops cater to American tastes too.

Fermenting adaptations Korean burgers and Korean kimchee, or fermented vegetables, is also getting wraps began showing up on chain a lot of buzz, and Baggs sees kimchee being adapted to pickles or quick ferments. Pickles and other menus and at small town indepen- house-made sour foods help cleanse the palate, are craveable and dents alike. cut through rich foods like sweet barbecue sauces and Today, Chicago-based R&D expert Charlie Baggs, chief executive chef of Charlie Baggs Culinary Innovations,

protein, he says.

“Pickled vegetables are always great on sandwiches and as

A Korean bibimbap bowl mixes warm white rice, sauteed and seasoned vegetables and sauce, topped by a fried egg.

24

SOLUTIONS

MARCH 2016

garnishes everywhere. Te more color and variety you can use with pickling, the better,” says Baggs.

Chefs looking for another angle on the fermenting trend can explore diferent uses for Korean kombucha tea, a beverage made with fermented tea, sugar, bacteria and yeast, suggests Baggs.

“Try kombucha in sauces or soup bases. Tis can act like a vinegar punch and give a little bit of the fermented favors, but not in an overwhelming way and with no afertaste,” Baggs says.

“A lot of Southeast Asian favors are clean, crisp and work well for healthy eating.”

Korean tacos are a new fusion classic that can be hybridized even further.

Flavors that move Roy Choi’s food truck has been making Korean tacos famous since 2008, and Baggs sees this fusion as both a new classic and one that can be hybridized even further.

“Te Korean taco has a lot of favors and textures going on, with the sweet-savory sauce, diferent proteins, sof corn tortillas and crunch from the kimchee and from fresh cabbage,” he says. “It’s also a well-balanced dish, nutritionally.”

Te taco components also transfer easily to other platforms, such as bowls with a base of rice, noodles or gluten-free options.

“I used a bulgogi sauce on green beans last night; it works almost everywhere,” says Baggs. “In fact, a Korean taco restaurant in my town does a [Canadian] poutine-like dish with a base of fries, piled with kimchee and drizzled with a favored sour cream for some moistness.”

If a Canadian-Korean hybrid sounds a little out there, take more inspiration from Roy Choi’s bowl-centric restaurant concept, called Chego. His bowls are built on noodles, rice, fresh spinach and fried shallots, and most include a fried egg. Tese bowls proved they were ready for grocerant settings when Chego joined forces with Whole Foods Market to bring an edited menu of greatest hits to one of the supermarket chain’s Los Angeles stores.

For more subtle infuences, consider fresh raw greens or a kimchee slaw as a salad bowl base, or make sure your salad bar shows some Korean infuences. Tese ingredients also work in a clear broth for pan-Asian soups, notes Baggs.

Or, think portability and put Korean ingredients in a wrap. Te Kogi truck version of burritos, for example, uses signature Korean barbecued meats and adds hash browns, scrambled eggs, shredded cheese, chopped onions, cilantro, romaine lettuce and cabbage, “tossed in Korean chili-soy vinaigrette, a dash of sesame-chili salsa roja sauce and a sprinkle of toasted sesame seeds,” says Baggs. G

“Pickled vegetables are always great on sandwiches and as garnishes everywhere. The more color and variety you can use with pickling, the better.”

—Chef Charlie Baggs, Charlie Baggs Culinary Innovations

MARCH 2016

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25

Deli Dynamics: Ditch the Flatline Tyson Foods recently asked 4,000 shoppers who purchased or considered purchasing prepared chicken products from their grocer’s deli in the last three months about their experiences. Nearly half reported incidences of failure but generally agreed that since the deli offers convenience, that’s good enough to keep them coming back.

According to Eric LeBlanc, director of marketing for deli and bakery at Tyson Foods, Inc., — “The failure numbers are disappointing, but equally disturbing is that the research suggests a trend in which shoppers are learning to accept deli failures as a trade-off for the convenience factor. Imagine how those same customers would react if their grocer’s deli delivered on quality as well as it does convenience.”

Tyson’s 2015 Consequences of Failure study1 shows shoppers who purchased prepared chicken products in the last three months experienced more problems than they did a year ago, and it seems they are also becoming conditioned to accept lower quality for the sake of convenience.

The Failure Factor:

48% 2015 Deli Consequences of Failure Report shows that shoppers expect even less of their delis compared to just a year ago.

41%

2014

1

Incidents of at least one staffing problem increased in just one year 1, 2.

2

Reports of at least one deli issue such as long wait time were up as compared to last year 1, 2.

34% 31%

2015

The Convenience Factor While respondents admit they appreciate quality, those who had no issues were more likely to be more frequent shoppers, as they enjoy serving the products to friends and family members. Meanwhile, those who had encountered quality issues said their shopping habits would most likely remain the same.

LeBlanc suggests: “ Even though shoppers reported encountering quality issues, their shopping habits would most likely remain the same. This dynamic can only be translated as a flatline, at best, when it comes to impacting sales.”

Imagine what would happen if customers received a quality experience along with the convenience they’ve come to appreciate? Consider how simple changes could increase the frequency of shopping trips to the deli, and to the store overall.

3

Only 45% of those reporting would be proud to serve prepared chicken products to their family amily1.

68% 64%

45%

Get to the right place.

At the right pace.

Tyson Deli / Bakery.

Sources: 1. Tyson Foods, Consequences of Failure Study, 2015 2. Tyson Foods, Consequences of Failure Study, 2014

®/© 2016 Tyson Foods, Inc.

Hot Food:

BY K ATHY HAYDEN

Pulses rising Global attention and domestic promotion aim to put more legumes and beans on every plate in 2016.

Late last year, the United Nations ofcially declared 2016 the International Year of Pulses at the Food and Agriculture Organization (FAO) in Rome, Italy.

But besides having superpower potential to feed the world, pulses—legumes and beans—have big appeal for U.S. consumers looking for tasty, on-trend food products that are inexpensive, gluten-free, GMO-free and an excellent source of fber, minerals and vitamin D.

Beating the drum for pulses

“We look at every trend in the food industry and see where pulses might ft,” she says. “In restaurants, there’s

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COURTESY OF MCCORMICK

Te term “pulse” includes beans, chickpeas and legumes that are dried when harvested, explains Jessie Hunter, who serves as director of domestic marketing for the USA Dry Pea and Lentil Council, American Pulse Association (USADPLC). But even though the term “pulse” may not be commonly used in the United States, most salad programs already ofer a plain, reconstituted pulse or two in the lineup. Hunter notes that when you’re introducing more pulses to a menu or a prepared food program, it’s important to use what consumers already know and like to bridge the way to new pulses and new usage ideas.

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so much interest in snacks, appetizers and starters. Dips are popular right now, and hummus is an entry point for many people. I suggest chefs move beyond chickpeas to try other pulses,” such as a split pea dip, for example.

Pulses can also add versatility to grocerant hot prepared food sections already flled with wings, onion rings and other savory treats. As consumers seek better-for-you options, new oferings like falafel fritters, fries, crisps and tots provide an opportunity to add a nutrition boost.

“We are helping with formulations that will make falafel fries easy,” Hunter says, noting that these treats have become popular as upscale pub food. “Combining potatoes with dried pulse four or mashed pulses is a great way to get some added nutrition into potato dishes, and the texture is really nice and smooth.”

Building more substantial salads Hunter says grocerant salad bars are prime real estate for adding pulses in the form of more hummus variations, cooked lentils, and grain-and-pulse blends that make a complete meat-free protein.

“People are ready for more than just the plain chickpeas in salad bars,” she says. “For a crunchy salad topper, bake chickpeas or other pulses and season them simply with olive oil, herbs and salt, or come up with a signature favor.”

“Lentils and other pulses bring a . . . heartiness to salads and salad bars,” agrees

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In addition, pulses are relatively neutral in favor and can take on any seasoning, says Hunter. “Another way people already know dried beans is from Mexican food, but there are pulses or beans to ft every ethnic cuisine,” she adds.

Italian dishes with fava beans and Indian dal are other global examples, while Boston baked beans and black-eyed peas tie pulses in to American regional cooking.

Michael Holleman, chairman of the advisory board of the Whole Grains Council and director of culinary development at InHarvest, a Bemidji, Minn.-based provider of artisan grains, rice, legumes and blends.

Far-ranging favor potential Holleman says pulses work well in crossover platforms: as sides, salad toppers, bowl bases for ethnic foods and meat-free entrees when mixed with grains and starches.

“Lentils and chickpeas are where the growth is, because they require minimal or no soaking and are quick cooking. Black beluga lentils are beautiful and easy to use,” says Holleman, noting that the distinctive colors and sizes of many pulse varieties can add great visual interest to salad bars and prepared dishes.

“We plan on leveraging the International Year of Pulses in all our digital outreach, through bloggers, in branding and messaging.”

— Jessie Hunter, USA Dry Pea and Lentil Council, American Pulse Association

“Tere’s still so much more people can learn about pulses—they have regional U.S. origins, which supports the local food movement, and there are so many varieties,” say Hunter, noting that many pulses are more like niche ingredients that don’t represent much volume in the overall crops grown. “We plan on leveraging the International Year of Pulses in all our digital outreach, through bloggers, in branding and messaging.”

“Whole grains—especially quinoa—have gained such visibility in the past few years. It’s to the point where people expect to see them everywhere, from fne dining to contract feeding. Pulses are ready to be next,” adds Holleman. G

Popular pulses Red kidney beans Pinto beans Navy beans Great Northern beans Black beans Lima beans Fava beans Chickpeas Black-eyed peas Brown, green and red lentils

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Back of the House:

Buehler’s Fresh Foods

Local tasting panels, hands-on training and company-wide support keep grocerant menus fresh.

When Mike Merritt, Buehler’s executive chef and director of food production, started with the company eight years ago, his goal was to make more items from scratch and to keep menus fresh with ontrend, seasonal and local oferings.

“Everyone wants a prepared food program, but you need buy-in from upper management to really stay the course,” says Merritt. “It takes time to get customers on board, to fnd the right chefs, and to have faith that you can fnd your way to greatness, because great taste is what keeps people coming back.”

During Merritt’s tenure, Buehler’s prepared food program has evolved into a sophisticated mix of home-style cooking and on-trend dishes. Comfort food like slowcooked ribs and mustard potato salad is served alongside kale and quinoa. Sourcing from the regional Ohio chain’s

BY K ATHY HAYDEN

Amish country surroundings is also important to quality and favor profles.

“Coming from a Philadelphia specialty market, I learned quickly that local tastes here are diferent, and they difer from one town to the next,” says Merritt, who stresses that customer input is important to all aspects of Buehler’s business, especially in prepared foods. “We have a very active sampling program.”

Building a grocerant epicenter Wooster, Ohio-based Buehler’s Fresh Foods was founded in 1929 by E.L. “Ed” Buehler and his wife, Helen. Still family-owned and operated under the E&H Family Group, Buehler’s Fresh Foods supermarkets in Ohio now number 15. In November 2014, the company fnished a complete renovation of the chain’s fagship Wooster Milltown location with impressive upgrades that included a new chef’s kitchen to put the spotlight on chef-prepared food that is made-to-order for takeout or dine-in. Te renovations also built in a Kitchen Table, a casual in-store dining option where customers can

Customers can watch Buehler’s chefs test recipes and new menu items at the Wooster Milltown location.

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Buehler’s completely renovated its flagship Wooster Milltown location with upgrades including a new casual in-store dining option.

relax in a comfortable atmosphere and enjoy Chef’s Kitchen foods.

Te prepared food program includes a Chef’s School, where Buehler’s chefs gather to test recipes and new menu items. “Te test kitchen sits behind garage-like glass doors,” Merritt says. “We pull these up for work sessions, so customers see and smell and hear the chain’s seven chefs at work, making new dishes from scratch.”

Some items, like kettle soups and cooked sides, are prepared sous vide in the central kitchen and distributed to the other stores. But with just 15 locations and seven chefs, Merritt’s program can be nimble.

“I look for chefs with industrial, corporate or school backgrounds, so that they understand bigger volume and capacity,” he says. “We take a train-the-trainer approach to disseminating new recipes so that we aren’t just sending out specs for stores to fgure out. We take a hands-on approach so that new menus are rolled out properly, and everyone is ready for troubleshooting.”

Keeping it fresh Customers get even closer to the food when Merritt and his team conduct tasting panels of employees and

“We take a hands-on approach so that new menus are rolled out properly.”

— Mike Merritt, Buehler’s executive chef

consumers for input on new seasonal items. Buehler’s Fresh Foods features an extensive list of sides, with at least 20 options available at all times. Eight of the 20 are new dishes that cycle in seasonally so the oferings don’t get stale.

“First our chefs have a group discussion to fnd ideas that are faithful to our prepared food program,” Merritt says, describing his R&D process. “We gather panels of employees and customers to look ahead at seasonal favors and review the previous year’s hits and misses. Some hits we can’t take of the menu, like our twice-baked potatoes.”

Other dishes are distinctly seasonal, like pumpkin bisque, quinoa harvest salad, and the green beans with sugared pecans and Craisins featured during the 2015 holiday season.

Merritt says he sees the importance of providing a good array of dishes that people might be scared to cook at home. Tat’s also the philosophy behind the brand’s onsite smoked food program, where customers can grab full dinners featuring meats smoked slowly using local Amish hickory. Sauces and rubs are customized to local tastes, and sides are made from scratch—some also enhanced by smoke.

“Our smoked mac-and-cheese has become a No. 1 summer best-seller and something we are known for. In fact, we don’t do any marketing for the prepared food. We rely on word-of-mouth,” says Merritt.

“You don’t need to have million-dollar stores or huge markets to become a destination in your local community,” he adds. “You need to pay attention to local tastes, stay on top of what’s selling and what’s not, and get plenty of customer input.” G

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Food Innovator Q&A:

Tapping consumer thirst for healthy drinks Christine Keller, CCD Innovation

How do you see this working, operationally, in the typical grocerant setting?

CK: A small juice kiosk could be tucked into a relatively

In the early 2000s when cofee culture was really heating up, Safeway partnered with Starbucks to bring in cofee service kiosks as part of a lifestyle rebranding initiative. Now, as consumers demand more custom beverage options such as smoothies, juice, tea and bone broth, grocerants are well-positioned to jump into this latest pool of opportunity as well, says Christine Keller, director of trend practice at San Francisco’s CCD Innovation, a food and beverage product development agency.

Are there any booming beverage trends you are seeing in other segments that would make sense in grocerant settings?

Christine Keller: Our ofces are in San Francisco, and the frst informal step in my trend research is to see where there are lines out the door and where all the young people are piling in. Right now that’s juice bars.

Juice service makes a lot of sense in the produce and fresh food sections of grocery stores. You have all the fresh ingredients right there, allowing people to customize their drinks, which is an important element of this trend.

What else about juicing makes it well-suited for grocerants?

CK: On-site juicing is a great way to use imperfect or “ugly” fruits and vegetables, and this is another big trend in food culture. Not only would this cross-utilization make good fscal sense, but it also speaks to food waste reduction, a hot-button issue in the industry right now. Tis is a natural ft. Stores could create some nice publicity around ingredient sourcing and environmental stewardship.

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small footprint in the produce or prepared food section and involve a couple of commercial-grade juicers. Juicing equipment is easier than most barista equipment. You can start small, by ofering straightforward fruit and vegetable blends, with maybe a few herbs added in. Depending on how customers take to it, you can add other ingredients and get a bit more ambitious. And everyone walks around with some sort of beverage these days. A healthy juice would be a nice add-on to a food shopping experience.

What’s hot in the made-to-order beverage category now?

CK: Yogurt, coconut water, matcha [tea], vinegar, boba tapioca pearls and protein powder are a few on-trend add-ins. Another option would be to devote a set of juicing equipment to all-savory ingredients for a custom soup program including house-made stock, pureed or juiced vegetables, plus noodles or grains. Bone broth is a hot trend right now, and I don’t think I’ve seen any housemade stock programs in groceries. Tis way, hot and cold, sweet and savory options from an in-store juicing program add value to the in-store shopping experience and build in some take-home options for reheating.

Do you see any potential roadblocks to adding a fresh juice program to a grocerant?

CK: Tere are some complicated, labor-intensive juice concepts out there, but there are also easier pieces of equipment that could work almost anywhere. If supermarkets can add sushi menus with trained sushi chefs, a juicing program is easy by comparison.

— Kathy Hayden

Going digital

BY CAROLYN SCHIERHORN

Expanded digital merchandising can boost grocerant shoppers’ engagement, loyalty, spending.

Thanks to the increasing fexibility of digital merchandising options, grocerants can connect with their target customers at almost every step in the path to purchase.

“Tere is no indispensable digital interaction method for every store, but it is essential to interact with shoppers in more than just a couple of ways,” says Alan Hiebert, senior education coordinator for the International Dairy-Deli-Bakery Association (IDDBA). “Te days of some in-store signage and a weekly fyer are long gone.”

In fact, digital merchandising is ofen more efective than traditional merchandising, emphasizes a 2015 IDDBA report, Digital Merchandising for Deli and Bakery. It’s more fexible because retailers can easily change digital images and content, more accessible because consumers can view online content at home or on the go, and it provides more data on shopper behavior.

Although some grocers use information technology adeptly to promote their freshly prepared food, most are not fully leveraging its potential, according to the IDDBA report, produced in partnership with Barrington, Ill.-based Brick Meets Click. Let’s take a look at how grocerant departments can better harness the advantages of electronic communication to help customers make decisions prior to shopping, spur additional purchases with

“Digital signage is all about contextualized messaging.”

— Stuart Armstrong, ComQi

tools that make ordering easier, and generate customer feedback and conversations for more return trips.

A plethora of platforms Whatever omnichannel combination grocerant retailers use, delivering a consistent message is crucial, Hiebert says. “It is absolutely essential that chains focus frst on their messaging, then focus on the nuts and bolts of delivering the message,” he says.

Amy Bailey, social media manager for De Pere, Wis.based Festival Foods, agrees that all content needs to be on-brand. “We have to be very uniform and consistent in the message that we’re providing our guests,” she says.

Because well-designed websites can move customers toward purchase decisions before they come to the store, Festival Foods invests considerable time and resources in its site, which has an abundance of dramatic, professionally taken photographs of prepared foods, says Bailey. Te site’s deli section (www.festfood.com/departments/deli) promotes daily deals, a hot bar menu that changes weekly and holiday-themed special ofers, such as a Valentine’s heat-and-eat meal for two that featured prime rib, side dishes and dessert.

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Weekly users of social media sites 81%

Total

73%

Millennials (18-35)

63% 57%

Boomers (50-74)

38% 32%

12% Facebook

YouTube

31%

27%

24% 22%

Twitter

17%

16% 9% Pinterest

20% 11% Google+

15% 4%

Instagram

Source: IDDBA, Engaging the Evolving Shopper, 2014

Social media, in turn, drives trafc to websites while increasing consumer engagement and enthusiasm.

Bailey points out that diferent platforms have diferent strengths, with some appealing more to older vs. younger demographic segments. But because of the channel’s reach, every retailer should be on Facebook, she says.

“Facebook is like the grandfather of our social oferings,” says Bailey. “It’s the platform that we’ve used the longest, and it has the widest audience. A few months ago, we crossed the threshold of having more than 100,000 fans.”

Used by most baby boomers and Gen Xers, Facebook facilitates direct contact between a business and its customers, encouraging consumers to provide feedback and share posts with others. Millennials today are becoming more active on other platforms, such as Twitter and Instagram, Bailey notes. Twitter lets users easily follow particular businesses and brands and post concise comments of 140 char-

acters or less. In contrast, Instagram, which is highly visual, provides the perfect platform for sharing food photos.

“People consume content in so many diferent ways,” says Jessie Kuhn, content strategist for Dorothy Lane Market, Dayton, Ohio, which showcases its kitchen and deli oferings on the product pages of its website (http://www. dorothylane.com/Products/viewdepartment.pl?id=9).

“We’re just trying to feed them in whatever way they are consuming it.” At Dorothy Lane, that includes electronic newsletters and direct-mail pieces.

Te advantage of using social media is that it invites interaction, Kuhn says. “You’re having a conversation with customers rather than just telling, telling, telling,” she says.

Kuhn says Dorothy Lane uses Twitter to post news about products and upcoming events, such as its Baconfest

Dorothy Lane Market’s Marcus Levin and Jessie Kuhn at the in-store coffee bar, which has only a digital menu; shoppers can order at a kiosk in the deli (inset).

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in late January. “On Twitter, you also get live comments as events are happening,” she adds. “Tis channel truly captures customers’ reactions.”

Instagram is ideal for in-the-moment photos, as well as beautifully styled food shots, according to Kuhn. Last spring, Dorothy Lane asked customers to snap and post photos of their babies getting a free cookie in the bakery department.

“We made a big push for this, and everyone had a lot of fun,” Kuhn says.

Prompting additional purchases Once shoppers have hit the aisles in-store, grocerant supermarkets can use digital technology in many other ways to increase revenue and customer loyalty, say experts. To make waiting in line less onerous for busy customers, for example, Festival Foods uses a digital numbering and time-management system in its deli department, according to the IDDBA report. Te customer touches a screen to claim a number, and a tiny printer ejects a ticket. Te system calls out each number, as well as showing it on an overhead monitor, so customers can continue shopping nearby and return to the deli when it’s their turn.

Stuart Armstrong, president and chief revenue ofcer of New York City-based ComQi, a shopper-engagement technology company. “It’s about being able to cut through the clutter of homogeneous messaging and ofer something specifc.”

In the grocerant section, for example, electronic signage could introduce customers to the chef and rotate video clips of various meals being prepared. Te key is to be imaginative so that customers are both surprised and delighted.

Te content management system that powers ComQi’s signage easily interfaces with external data feeds, notes Armstrong. “We can bring in a weather data feed, for example.

And if the temperature goes above a certain level, an internal trigger can cause the signage to promote iced tea vs. a hot beverage,” he explains.

In a congested metropolitan area, it might make sense to integrate a trafc feed into the signage system, says Armstrong. Te electronic signage could warn customers when trafc on the interstate is heavy, for example, and recommend that they dine in the store.

Grocerant retailers can also develop mobile apps for customers to use in-store, such as for placing orders for custom-made sandwiches and other meals and then paying for them. iBeacon technology allows mobile Dorothy Lane Market uses electronic Festival Foods invests in a apps to detect signals from devices at varikiosks in the deli department in two of its variety of digital platforms. ous points in a store and deliver hyper-conthree locations. “If the deli is backed up, textualized content to users based on their customers can enter their order at a kiosk,” locations.

Integrated with customers’ purchase histories, says Marcus Levin, a sofware engineer at Dorothy Lane. such systems can aim unique, customized discounts at Afer receiving the order, a deli department associate will individual shoppers who might be nearing a store’s deli fll it and put it on a tray at the side of the deli counter; or salad bar, for instance. customers can come back later for pickup.

Dorothy Lane also deploys digital signage and menus in its stores. “Te cofee bar has only a digital menu—not a paper version—because we need to change it so frequently,” says Nick Nawroth, the retailer’s director of graphic arts, noting that many of its beverage oferings are seasonal.

Sofware-driven digital signage can display slide shows, videos, product promotions and important alerts. “Digital signage is all about contextualized messaging,” says

“In order for micro-location targeting to work, shoppers must be using a store’s app and, in most cases, must opt in to having messages pushed to their phones,” says IDDBA’s Hiebert. “Obviously, retailers need to be hyper-aware of how many messages they’re sending and the content of those messages. While micro-location targeting has the potential to give retailers a lot of information about their shopper base, shoppers need to feel like they’re getting something out of it too.” G

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Wrap it up

BY CAROLYN SCHIERHORN

Make your takeout packaging work for both you and your customers.

Taste and value may reign supreme in grocerant departments, but the wrapping and packaging of fresh-prepared, ready-to-eat foods also makes a big diference to customers.

Whether takeout containers are flled by shoppers at the hot bar, employees behind the deli counter, or stafers in a back-room food prep area, to-go packaging needs to preserve the integrity of the food until it is eaten while minimizing the risk of foodborne illness. Te packaging can also play a role in enhancing a supermarket’s reputation—showcasing a commitment to sustainability, for example, or reinforcing a retailer’s image as a provider of premium-quality food. What’s more, takeout packaging should not be overlooked as a potential vehicle for advertising and branding a business, suggests Lynn Dyer, president of the Foodservice Packaging Institute (FPI), Falls Church, Va. Consumers, of course, visit the grocerant department not to buy packaging but to shop for delicious food. As a result, observes Dyer, shoppers ofen will pick up whatever

“Selecting the right packaging for the job provides a good return on investment.”

— Lynn Dyer, Foodservice Packaging Institute container is within reach at a self-serve bufet without much thought. But if the food is a leaking mess by the time they get to their destination, they are not likely to become repeat customers.

“Consumers have the expectation of good food, and they want that experience whether they dine in or bring the food home or to the ofce,” she says.

Although cost is always an issue for grocers, Dyer warns against pinching pennies by buying a huge volume of one type of takeout container in a single size and then expecting it to work well for everything. “Diferent types of food are going to require diferent types of packaging,” she says. “Selecting the right packaging for the job provides a good return on investment.”

Running hot an and cold At a minimum, takeout packaging should help hot food stay hot and cold food stay cold and prevent ffrozen desserts, such as ice cream and sof-serve yogurt, from melting too quickly. Maintaining the temperature of hot or chilled food until consumption is not just a matter of giving customers a pleasurable dining experience, emphasizes food packaging consul-

PHOTO COURTESY OF GENPAK

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tant Aaron L. Brody, Peachtree Corners, Ga. “It’s a food safety issue,” he says. “Takeout packaging needs to inhibit the growth of microorganisms.”

Material benefts Foodservice packaging manufacturers have developed a number of new products that go beyond the basics to maximize performance and visual appeal, take consumer behavior into account, and address public perceptions about sustainability: SALAD SAVVY

PHOTO COURTESY OF GENPAK

According to the FDA, fresh-prepared perishable food should be consumed within two hours— within one hour if the temperature outside is 90 degrees F or above.

But customers sometimes take carry-out food to picnics, golf outings, soccer games or parties. Tese meals aren’t necessarily consumed in their entirety within the FDA time guidelines, Brody notes.

But one problem with contemporary salad containers, according to Steve Persi, co-founder of Scottsdale, Ariz.-based Go To Containers, is that they typically don’t have a sanitary way to hold salad dressing cups. Usually these small, lidded condiment cups are just placed in the bowl, where they come in direct contact with the greens, he says. His frm has designed a stackable container that holds the condiment cups on top, outside of the packaging, to prevent cross contamination between the cups and the food.

Getting started To assess your grocerant’s container needs, visit the Foodservice Packaging Institute’s website at www.fpi.org.

The FPI has a free Strategic Sourcing Guide (http://www.fpi.org/fpi/fles/ ccLibraryFiles/Filename/ 000000000865/FPIStrategic-Sourcing-Guide.pdf) that includes packaging do’s and don’ts and a checklist of questions to answer before contacting packaging suppliers.

Salads with mixed greens typically have been placed in plastic containers that promote freshness and visual appeal. But clamshell salad containers today ofen have black bowls to convey a more upscale image and anti-fog lids to prevent condensation and the impression of wilting lettuce. Several manufacturers even tout their salad containers as environmentally friendly because they are recyclable and made with a high percentage of recycled polyethylene terephthalate (PET).

HOT VENTS For steaming hot food, containers with vented lids are now available in various sizes. Such containers can be an optimal choice when a meal will be consumed at home because they prevent food from becoming soggy, Dyer says.

NO TAMPERING ALLOWED

Tamper-evident packaging is another emerging trend, according to Dyer. Containers for fresh grab-and-go food can be sealed with a tear-strip or label to assure consumers that no other customers have touched the contents.

SANDWICH WRAPS One innovation geared to the deli counter is an insulated sandwich wrap consisting of a layer of polyethylene between two layers of paper. Tis product reportedly

Packaging 101 for shoppers In addition to educating themselves about packaging, grocerant retailers need to educate their customers. “To help your customers,” says Lynn Dyer, president of the Foodservice Packaging Institute (FPI), “you might want to put up simple signs that say, for example, ‘If you’re grabbing a cold item, we’d suggest this container,’ or ‘If you want a smaller portion of food, we’d recommend this size.’”

Food packaging consultant Aaron L. Brody says he would like to see signs that warn consumers about the need to eat perishable fresh-prepared food as soon as possible. Grocerants should also provide information on which containers can be used in a microwave or conventional oven, he suggests.

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retains heat longer than other sandwich wraps, ofers excellent moisture and grease absorption, and is microwavable.

SUSTAINING ECO-INTEREST For sustainability appeal, consider biodegradable, compostable clamshell containers made of bagasse, which is manufactured from the fbrous residue of sugarcane or sorghum stalks. Tese containers have the look and feel of paper, are refrigerator- and microwave-safe and are said to be stronger than expanded polystyrene (EPS) foam. For retailers with dine-in customers, ecologically friendly dinnerware and fatware options include plates and bowls made from fallen palm leaves and water, as well as cutlery produced from birch wood.

Before deciding on any new packaging material or container, however, be sure to test it with the food product

Georgia-Pacific’s unbleached containers contain compostable cellulose fiber.

inside, advises Dyer. “Ask yourself, ‘Does it work? Does it perform? Does it do what I want it to?’” she says.

Grocerants also need to have containers available in a variety of sizes. “If you look at food trends, many people tend to graze throughout the day and are snacking rather than having three square meals,” Dyer notes. “Tey don’t want a huge container for a small meal. So you need to make sure you are marrying the needs of the food and the package.”

“Te selection of food packaging should never be done in isolation,” adds Brody. “It needs to be part of a comprehensive, strategic, educational approach to optimizing food handling practices not only in your establishment but also in customers’ homes.” G

Brand yourself Takeout containers that perfectly meet customers’ needs have one more job to do: Infuence shoppers’ perceptions, says Lynn Dyer, president of the Foodservice Packaging Institute (FPI). “Your packaging can be an extension of your brand, so think about what that packaging says about you,” she says.

From cups to bakery boxes, containers can display a retailer’s logo or motto or another important message. “You have a blank canvas essentially,” says Dyer. “You can convey a message about the product itself or about the store or your brand.”

Don’t go overboard with graphics, however, cautions designer Steven Heller, author of “Food Wrap: Packages that Sell.” Takeout containers don’t need eye-catching labels to attract customers in the same way that consumer packaged goods do, he says.

“If the food will be consumed in the store, you don’t need to put a logo on the container, which will be thrown out in a few minutes,” says Heller, who co-chairs the MFA Design Program at the School of Visual Arts in New York City.

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“You’ll save on printing and ink, which helps both the environment and the bottom line of the company.

“What’s more important to consumers is how appetizing the food looks and how it tastes,” he says.

Dutch packaging engineer Anton Steeman, however, argues that U.S. grocers and restaurants should be more creative with their to-go packaging. On his Best in Packaging website, he showcases the innovative packaging designs and materials that he has seen primarily in Asian and European countries.

Steeman notes, for example, that one food truck in the Philippines serves rice dishes in a one-piece origami-inspired box. When opened, it resembles a bud blossoming into a fower. The business encourages its customers to return the packaging, ofering a free meal in exchange for 10 used boxes. “This way, they created not only awareness on the issue of sustainable packaging and recycling, but also cultivated a habit of conscious and conscientious consumerism,” Steeman wrote.

Damage control

BY LYNN PETRAK

New strategies for temperature monitoring can help grocerant offerings keep their cool—or turn up the heat.

For a real-life lesson in the importance of monitoring prepared food temperatures, look no further than Chipotle.

Afer months of being linked to a multistate E. coli outbreak and the attendant bad publicity, the popular quick service Mexican chain shut down all of its restaurants for several hours in February 2016 to retrain employees on safety issues including temperature control.

“Te bigger . . . players have big resources, but there are no guarantees about the safety of any operation,” says consultant Jef Nelken of Woodland Hills, Calif., who provides safety training to restaurants and advises food distributors and others in the industry.

“Temperature control is something fundamental to food operations in general and to retail,” agrees Hilary Tesmar, vice president of food safety programs at the Food Marketing Institute (FMI), underscoring the core safety

tenets of cook, separate, clean and chill. “Tey really do carry over into what operators have to do in grocerants.”

Te fact that grocerant areas are growing—and quickly—puts an important responsibility on retailers. “Te sheer volume of freshly prepared foods that require temperature controls poses signifcant challenges to many supermarket operators,” says Jennifer Tong, global managing director, integrity and process excellence for NSF International, Ann Arbor, Mich., which independently tests, audits, certifes, trains and consults for the food and consumer product sectors.

“Historically, manufactured prepackaged items for cold grocerant areas were received, stored and displayed under refrigeration,” she says. “As supermarkets expand their oferings, they are replacing the commercially manufactured items with items prepared in the grocery store from ingredients that were held at room temperature.”

To improve safety, grocerants can take a cue from restaurants’ approach to safety and temperature control, say experts. “Te term ‘grocerant’ is appropriate—you have to

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“Temperature control is something fundamental to food operations in general and to retail.”

— Hilary Thesmar, Food Marketing Institute

be trained like you are a restaurant,” says Charlie Baggs, chairman and executive chef at Chicago-based Charlie Baggs Culinary Innovations.

Self-service strategies Te frst step in determining and pursuing proper temperature control is recognizing weak spots, including the setup of various bars, bufets, cases and other places where shoppers browse and buy. “Tose should be on a schedule, and there should be written procedures as well as times specifed for foods held at certain temperatures,” says Tesmar.

the mountain of food at the top may run 5 to 10 degrees warmer than the food at the bottom,” Nelken explains.

Nelken says self-service areas, including hot food bars and salad bars, are always subject to temperature control issues. He points out that there are diferences in cooling units, with new ones that blow air over the top, and older ones that blow cold air up from the bottom, making proper rotation of food in the units critical.

With hot food bars, he says, temperature issues can quickly become evident to the consumer. “A lot of times you see employees setting up bufets and [the bufets] look very nice when they do it, but then [the employees] may go do other jobs and you see them again when the items are low. So stores really need to think about their bufet strategy,” he says.

“Some pans don’t have lines or nick marks, which indicate how to fll the pan. [Employees] shouldn’t overload the pan, because the cold air may not reach that part—

“You have to do things like line checks, as you would in a restaurant,” says Baggs. “Before a restaurant opens, the chef comes through and takes time and temp on every

New tools of the temperature monitoring trade A variety of new tools are emerging that can help retailers with temperature control in grocerant settings. For starters, “we are seeing more continuous recording devices on coolers,” says Hilary Thesmar, vice president of food safety programs at FMI, who also cites improvements in hot food temperature recording.

Jennifer Tong, global managing director, integrity and process excellence for NSF International, Ann Arbor, Mich., recommends infrared thermometers that are suitable for quick scanning of cold holding cases. “These can be utilized along with digital probe thermometers or thermocouples that are still used by many supermarket operators to monitor product temperatures,” she says.

“You have folks racing as fast as they can to take the clipboard and put it on a tablet.”

— Gary Stotko, CBS Northstar

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Tong also suggests using color-coded “smart labels” that employ technology to track the actual temperature storage history of packaged items. “The color of the label indicates the level of freshness based on temperature history,” she says.

New technologies are helping with temperature control via automation and mobility too. “Wireless temperature monitoring systems track product temperatures and refrigeration temperatures and automatically send alerts to the appropriate personnel when temperature standards are not met,” says Tong.

As the technology advances, wireless systems will enable grocerants to keep even better tabs on temperatures. “I . . . see technology of temperature capture, with a remote thermometer to take temp and push to cloud or [a] computer [in] an ofce,” says Gary Stotko, vice president, sales and marketing for Custom Business Solutions (CBS) Northstar in Irvine, Calif., which provides restaurant point of sale systems.

Various in-store technologies can play a valuable role in temperature monitoring too: “You have folks racing as fast as they can to take the clipboard and put it on a tablet.

Instead of manual entry, you take it out of their hands,” says Stotko.

MARCH 2016

item and records it. You can’t just assume it will get hot, especially when people are busy.”

Behind the scenes In addition to self-service areas, Baggs points to vulnerabilities in the back of the house. “It’s not uncommon for [employees] to take something of the bufet at night, wrap it in plastic really well and put it in the walk-in [cooler], where it could stay in the danger zone for six to eight hours, unmonitored,” he says, adding that some grocery stores are starting to use blast freezers to ensure proper coolness.

Creating soups and sauces can also be problematic for temperature control and requires careful monitoring, says Baggs. “You have to cool things with the proper methods, using basic culinary principles,” he says, noting that products should be cooled in containers that conduct heat in the appropriate way.

Risky business Conducting your own risk assessments, in addition to following FDA and local codes, is key to ensuring prepared food temperature control, say experts. “More

“More...restaurant-like food preparation processes may introduce new food safety risks.”

— Jennifer Tong, NSF International

elaborate and expanded, restaurant-like food preparation processes may introduce new food safety risks which have to be accounted for in the assessment, like separating raw food from ready-to-eat in kitchen and storage areas, and more extensive cooling procedures,” says Tong.

Risk assessments can also reveal a grocerant area’s true capabilities for food safety. “In many cases, the operator must also recognize the challenges imposed by traditional grocery store backrooms and cooking areas, where limited space and equipment dictate how much additional food preparation can be accommodated safely,” says Tong. “Te operator must tailor its menu expansion according to what the existing facilities allow or invest in remodels and new equipment.”

The human touch No matter how high- or low-tech the temperature monitoring process, however, ultimately the grocerant’s human resources will make the diference on the front lines in-store. Baggs recommends thorough training in temperature control for both management and employees, in addition to maintaining a regular presence in vulnerable areas such as bufets.

“Particularly during busy times, there should be someone out there the whole time,” he says.

FMI’s food safety education eforts include two levels of training: one for certifed food production managers, such as deli managers and prepared food managers, and another for other store employees to make sure they know how to prevent contamination of food. “Tat’s food handler training. Some stores take that to almost all of their employees, including cashiers in some cases,” says Tesmar. G

MARCH 2016

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ADVERTISER INDEX Anchor Packaging

7

www.anchorpac.com

Blount Fine Foods

Cover 3

www.blountfinefoods.com

17

www.hillphoenix.com

9

www.iddba.org

21

www.evolocityAD.com

Cover 2, 26-27, Cover 4

www.tyson.com

Hillphoenix International Dairy-Deli-Bakery Association SignArt, Inc Tyson Foods

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 Phone: 224 632-8200 Fax: 224 632-8266 www.stagnitobusinessinformation.com

ADVERTISING SALES & BUSINESS STAFF Kollin Stagnito President & CEO 224-632-8226 kollinstagnito@stagnitomail.com Ned Bardic Chief Revenue Officer 224-632-8224 nbardic@stagnitomail.com Korry Stagnito Chief Brand Officer 224-632-8171 korrystagnito@stagnitomail.com Jeff Friedman Vice President/Brand Director 201-855-7621 jfriedman@stagnitomail.com John Huff Midwest Regional Sales Manager 224-632-8174 jhuff@stagnitomail.com Elizabeth Cherry Western Regional Sales Manager 310-546-3815 • Cell 310-990-9597 echerry@stagnitomail.com Maggie Kaeppel Eastern Marketing Manager 630-364-2150 • Cell 708-565-5350 mkaeppel@stagnitomail.com Mike Shaw Northeast, Marketing Manager 201-855-7631 • Cell 201-281-9100 mshaw@stagnitomail.com Janet Blaney Marketing Manager (AZ, CO, ID, MD, MN, MT, NM, NV, OH, TX, UT, WY) 630-364-1601 jblaney@stagnitomail.com Kathy Colwell General Manager, Custom Media 224-632-8244 kcolwell@stagnitomail.com UNITED STATES MARKETS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green • Technology Hospitality • Apparel

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MARCH 2016

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