Progressive Grocer - May 2016 by ensembleiq

To Sell and Thrive in L.A.

Ralphs store reflects communityâ&#x20AC;&#x2122;s vibrant diversity Page 46

Ready to Serve

Choose the right grocerant solution for your business Page 63

Baked-in Profits

New approaches to growing sales, traffic Page 73

Get to the right place.

At the right pace.

Tyson Deli / Bakery has what it takes to help customers grow their business. Unrivaled product portfolio that allows us to take a total deli perspective. Unequalled storehouse of shopper insights and actionable strategies. Exclusive acceleration process that is a proven game changer for you. Seven awards in four years recognizing excellence in category management.

We help grow deli and bakery business for our customers at the speed they need, in a direction that makes an impact. Every. Single. Time.

Get to the right place. At the right pace. Tyson Deli / Bakery. ÂŽ/ÂŠ 2016 Tyson Foods, Inc.

To Sell and Thrive in L.A.

Ralphs store reflects community’s vibrant diversity Page 46

Ready to Serve

Choose the right grocerant solution for your business Page 63

Baked-in Profits

New approaches to growing sales, traffic Page 73

Diving Deep into Our Annual Retailer Countdown PAge 27 May 2016 • Volume 95 Number 5 $10 • www.progressivegrocer.com

Discover The New Direction BA K E RY

•

DELI

Learn more about NEW Stouffer’s deli meal kits ®

and NEW Minor’s Ready To Flavor™ products. ®

VISIT BOOTH #4623 AT DAIRY-DELI-BAKE E L E VAT E P E RC E P T I ON S

•

M A X I M I Z E P ROF I TS

•

R I VA L R E STAUR A N T S

•

M E N U ON - T R E ND F OODS taste. trust. serve.

Rival restaurants in every way with a customized partnership with Nestlé Professional. With culinary support and market insights supported by proven brands, products and expertise, let’s transform your location into a destination. Partner with our culinary team to overcome your specifc challenges and discover your new direction. Contact your sales representative today. 1.800.288.8682 • nestleprofessional.com All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland.

brand

NOT ALL

PORK IS CREATED EQUAL.

SMITHFIELD PRIME FRESH PORK IS 20% MORE TENDER THAN OTHER LEADING BRANDS.* Our fresh pork is different. And we’ll give credit where credit is due — to our hogs. Smithfeld has developed a proprietary 100% Duroc breed sire line that is sourced from America’s most trusted farms and bred for superior quality and tenderness. Leverage Smithfeld Prime to elevate the status of your fresh pork case and distinguish your store from the competition. The difference is real, and it’s delicious. For more information about Smithfeld Prime Fresh Pork, contact your Smithfeld Sales Representative or email mwebster@smithfeld.com.

©2016 REDD’S BREWING COMPANY, MILWAUKEE, WI ALE WITH NATURAL APPLE FLAVOR ©2016 COORS BREWING COMPANY, GOLDEN, CO ©2016 BLUE MOON BREWING COMPANY, GOLDEN, CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

May 2016

features

Volume 95, Issue 5

cover story

130

produCe Category Spotlight

Best Case Scenario Te berry category holds at No. 1 in fresh produce.

135

Show preview

Budding Growth Innovation will be on display at United Fresh 2016.

46 Store of the Month

You See L.A. Ralphs’ Westwood remodel boosts freshness for a diverse Los Angeles community.

grocery

Category ManageMent

CatMan 2.0 Introducing a new iteration of the business process, for a new century.

144

the Super 50

Ripple Effect Our top-ranked grocery retailer countdown dives deep into the ebb and fow of an industry fush with upheaval and opportunity.

Show preview

A Global Food Retail Experience At FMI Connect 2016, all are welcome.

fresh food 63 prepared foodS

Fresh Views on the Perimeter Retailers need to fnd the grocerant solution that’s best for them.

progreSSive groCer ’S 2016 retail Bakery review

Bake Me Happy In-store bakeries cook up new ways to boost sales, attract business.

Show preview

SuMMer alCohol report

Growing the Future Industries head to Houston for IDDBA’s Dairy-Deli-Bake 2016.

122

produCe

The Fresh Produce Pitch Retail dietitians help drive home a healthy-lifestyle message.

Uncommon Quenchers Warm-weather quafs beckon with superior quality, drinkability and convenience.

101

Candy & SnaCkS

Sweet Meets Heat In response to robust taste preferences, candy and savory snacks are sharing favors.

108

Show preview

In for a Treat Tis year’s Sweets & Snacks Expo is poised to be bigger and better than ever.

May 2016 | progressivegrocer.com |

nonfoods 110 PG Pet

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 224 632-8200 • www.progressivegrocer.com

Premium Plus Higher-priced pet products boost retailers’ profts.

VP, Brand Director 201-855-7621

141

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 Kathleen Furore, Kathy Hayden, Bob Ingram, Jenny McTaggart, Lynn Petrak, Barbara Sax and Jennifer Strailey

enerGy SuPPlementS

Sales Surge Te energy category reboots with natural ingredients, new delivery systems.

refrigerated & frozen 118 Dairy

Protein Springs Eternal Dairy marketing initiatives look beyond the annual June promo push.

technology 150

DiGital enGaGement

Grocery’s Challenge So many options, so few personalized connections.

operations 154

Fleet manaGement

Driving Change New technology, daunting regulations and capacity challenges are driving the trucking industry in multiple directions.

equipment & design 158

departments 8 EDITOR’S NOTE: NExTGEN CATMAN 12 PG PULSE 14 IN-STORE EVENTS CALENDAR: JULy 2016 18 NIELSEN’S SHELF STOPPERS/SPOTLIGHT: PACKAGED MEAT/ BREAKFAST SAUSAGE 20 MINTEL GLOBAL NEW PRODUCTS: HAIRSTyLING PRODUCTS 22 ALL’S WELLNESS: HEALTH INSIDE THE DELI 160 WHAT’S NExT: EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 162 THE LAST WORD: FORECASTING THE TURBULENT TIDES

| Progressive Grocer | May 2016

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

EvEnts • MarkEting • Digital • rEsEarch • circulation

FloorS & CeilinGS

Top to Bottom Supermarket ceilings and foors are becoming an integral part of an enhanced shopping experience.

Jeff Friedman jfriedman@stagnitomail.com

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 Pat Benkner 973-607-1330 pbenkner@edgellmail.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 Chris Stark cstark@p2pi.org Chief Financial Officer Kyle Stagnito kylestagnito@stagnitomail.com Chief Revenue Officer Ned Bardic nbardic@stagnitomail.com Chief Brand Officer Korry Stagnito korrystagnito@stagnitomail.com

The Grocery Success Company

Omni-Channel Solutions to Drive the Success of Grocery Retail ECRS is a leading national provider to the grocery market providing operational success programs to growth directed executive teams. Through the integration of technology, consulting and business transformational services, we maximize operational efficiencies and reduce friction at every consumer touch point which enables our clients to increase overall performance and profits. Our clients operate faster, increase customer checkout accuracy, engage shoppers more seamlessly across all channels, reduce costs from third party vendors and get more strategic information through our success tools.

POS - Click & Collect - Self Checkout - Business Analytics - Loyalty & Membership - Inventory Management - Consulting & Services

www.ecrs.com

800.211.1172

editor’s note by Jim Dudlicek

NextGen CatMan

hen it comes to category management, Progressive Grocer has been advocating a seismic shift toward shopper-centricity. Grocers have to sell solutions that transcend individual categories, which means that category managers need to cast their eyes beyond the aisle and out to the whole store, so that all of its pieces are working in harmony, aided by the latest technologies impacting the path to purchase. Clearly, our industry’s long-held standards need to keep up with rapidly changing times. Tat’s why PG and its parent company, Stagnito + Edgell, are honored to partner with the Category Management Association (CMA) to promote the updated Category Management 2.0 (CatMan 2.0) initiative, which ensures a major evolution in best practices for optimizing category performance in retail businesses. Te process of category management was frst developed in the early 1990s, and since then the CatMan 1.0 business model has been adopted by virtually every retailer and consumer packaged goods (CPG) manufacturer serving the retail market. Led by CMA, CatMan 2.0 is a comprehensively redesigned discipline of the existing business standard. Te fnal rendition accommodates today’s monumental shift to new data, new tools, and collaborative products and processes. “Industry observers have identifed ‘best practice’ solutions in myriad areas,” says CMA CEO Wendy Fritz. “Some practitioners are early adopters of these discoveries, but most lag behind due to lack of awareness or simple day-to-day business pressures and constraints. Te biggest barrier, in some ways, has been the lack of a consolidated repository of category management learning that is accessible and current. With CatMan 2.0, we are excited to provide our members with ongoing access to the latest best practices and thought leadership on category management.” It’s also been a challenge for retailers to keep up with the pace of change, from what people buy to where they buy to how they shop, with mobile technology twisting the traditional path to purchase in new directions. Current retail marketers have the ability to employ resources that were unimaginable to the creators of the earlier program, whose evolution has not been a tightly controlled process. CatMan 2.0 ofers the retail industry the opportunity to take a more holistic approach toward providing an efcient model that integrates past tools, data and analytics with today’s dramatically improved information and technology resources. Te fnal product will be available in May

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

It’s been a challenge for retailers to keep up with the pace of change, from what people buy to where they buy to how they shop, with mobile technology twisting the traditional path to purchase in new directions.

through the CMA website at www.catman.global. PG and Stagnito + Edgell will promote and market CatMan 2.0 with print, digital, events, custom marketing and research, including a webcast later this month (visit Progressivegrocer.com for details). Read more about CatMan 2.0, starting on page 58. Meanwhile, we’re also partnering with the Center for Sales Leadership, at Chicago’s DePaul University, to conduct a groundbreaking study on collaboration in category management. CMA, in partnership with DePaul, is researching collaboration practices, with the goal of developing a detailed, empirically validated category management collaboration. If you are a retailer involved in category management at your company, we invite you to join this study, which will take about 10 minutes of your time. Visit http://depaul.qualtrics.com/ SE/?SID=SV_eJyv3M7waHJVJPv to participate. A report of these research fndings will be presented at the Spring 2016 Sales Leadership Conference at DePaul University and made available on the CMA website, and will also be featured in PG and other Stagnito + Edgell publications.

Nifty 50 Tey say that the more things change, the more they stay the same. It’s safe to say that’s refected in our annual Super 50 ranking of grocery retailers. Despite the M&A activity of the past year, there are plenty of familiar names leading the pack, and for good reason. We explain why in our analysis of industry leaders, which starts on page 27. PG Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

A B Visit OOT us H #at 9 84 4

Quick and Healthy Turkey Chili

Your shoppers ﬁnd this and other great recipes at goya.com

*Nielsen Strategic Planner, Total US (unit sales), 52 weeks ending 12/19/15

Trion WonderBar ®

Pouch Hook

™

Pouch Merchandising Simpliﬁed T Trust the hook-makers at Trion to invent creative solutions sspecifically for the new wave of pouch packaging and merchandising. Field-tested and already in retail use, m Trion’s new Pouch Hook is ready to back your expansion Tr into this exciting new venue of product promotion. in ■

Standard and Gravity-Feed conﬁgurations available to keep items forwarded and automatically faced.

■

Proprietary gate keeps product from being jostled o off rear.

■

F Flip-front Label Holder swings up for easy access a and product removal.

■

L Loads from rear, or easily dismounts to insure fast re restocking, product rotation and reduced shrinkage.

■

Sa Saddle mounts on a Universal Bar design allowing to tool-free installation on all thick- and thin-walled go gondola and cooler uprights.

■

St Stocked in 4 lengths compatible with all standard sh shelf sizes allowing mixed use in display.

■

Custom sizes and short-run conﬁgurations possible. Cu

Proudly Made in the U.S.A.

Proprietary Rear Gate

Insures Product Rotation

Easy Vending Front

Gravity-Feed Available

Part of the Trion® WonderBar® Family of Tray and Bar Merchandising Solutions.

©2014 Trion Industries, Inc. 297 Laird Street, Wilkes-Barre, PA 18702-6997 Phone 570-824-1000 l Fax 570-823-4080 Toll-Free In U.S.A. 800-444-4665 www.TrionOnline.com Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.

Trion WonderBar ®

Mini Dual Lane Merchandising Creates Exciting New Cross Sells With the WonderBar Tray and Bar Merchandising System, now you can bring related products neatly together in ways not previously possible. Fit many more items, sell families of products in different sizes, and increase impulse buying with cross-sells and adjacencies. ■

Dual Lane Tray accepts two narrow items for side-by-side merchandising.

■

Unique design features separate paddles to push each lane forward individually.

■

Asymmetrical lanes sell different-width products. Each lane adjusts to ﬁt products as small as 1¾” wide. Mini and Standard width trays available.

■

Full range of bars, trays, hook styles, pushers, spring tensions, label holders and signs adapt to any product, any size, storewide.

■

Consistently better product presentation with less labor time spent facing.

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Trays lift out for rear restocking and proper rotation.

Proudly Made in the U.S.A.

Quick Re-Planogramming

Choice of 3 Bar Proﬁles

No Tools Installation

Adjustable Width

Part of the Trion® WonderBar® Family of Tray and Bar Merchandising Solutions.

What’s trending on Progressivegrocer.com …

The Kroger Co.’s “meaningful investment” in Boulder, Colo.-based specialty grocer Lucky’s Market was the top-seeded news story on Progressivegrocer.com during the March 15-April 15 timeframe, along with the appointments of new leaders to helm the Cincinnati-based chain’s Roundy’s and Mariano’s divisions. Other high-interest headlines during the same time span included the potential divestiture of some 80 stores by the soon-to-merge global retailers Delhaize and Ahold, and a changing of the guard at Kansas City, Kan.-based AWG.

Kroger, Lucky’s Market Ink Strategic Partnership http://bit.ly/1pRpWPk

M Merging Ahold, Delhaize Could Sell 83 Stores: Report C http://bit.ly/1RhFuoU

Kroger Names New Presidents of Roundy’s, Mariano’s

AWG Names New Leadership Team

http://bit.ly/1RiOSq4

http://bit.ly/1WInYvrr

General Mills to Label Products Containing GMOs http://bit.ly/1Ms3cdG

Harris Teeter Taps UberRUSH Grocery Delivery

Meijer Confirms Twin Cities Expansionn

http://bit.ly/1Sh6D98

http://bit.ly/1Zlonpi

S Sprouts Farmers r Market Hit With Phishing Scam H hhttp://bit.ly/23H6BTb

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

Drive milk sales and make a positive impact in your community during September Hunger Action Month.

TO RUN A GREAT AMERICAN MILK DRIVE PROGRAM, ¨

contact Melissa Malcolm at MilkPEP: 1-800-945-MILK or mmalcolm@milkpep.org

July 2016 is...

National Baked Bean Month National Culinary Arts Month National Ice Cream Month National Picnic Month National Hot Dog Month National Pickle Month

National Ginger Snap Day Email your calendar submissions to

awolfe@stagnitomail.com

National Chocolate Wafer Day. Share recipes for icebox cakes on your Facebook page.

National Barbecue Day. That’s probably not a coincidence.

Eat Beans Day

Independence Day

National Apple Turnover Day. Have plenty of the delicious treats ready to go, and make sure the freezer case is well stocked, too!

National Fried Chicken Day. Share recipes and pictures on Pinterest, and offer discounts on fried chicken in-store.

National Strawberry Sundae Day National Macaroni Day

National Milk Chocolate with Almonds Day. Pile high the candy bars, and offer samples.

Make sure everything is in order to celebrate the country’s birthday on Monday.

National Sugar Cookie Day. Offer a free cookie to all children who accompany their parents to the store.

Eid-al-Fitr (end of Ramadan)

National Piña Colada Day

National Peach Ice Cream Day

National Tequila Day

National Blueberry Muffin Day. Ask staff to share their favorite recipes on your Facebook page.

Set up a hot dog cart in the parking lot to celebrate National Hot Dog Month.

National Hot Fudge Sundae Day

You don’t have to be a Southerner to love National Pecan Pie Day.

In honor of National Picnic Month, have lots of portable meals and desserts ready for pickup in the prepared food areas.

National Bagelfest Day. How many varieties do you offer?

National French Fries Day. Don’t you wish this could happen every month?

National Ice Cream Sundae Day National Lollipop Day Fortune Cookie Day

For National Pandemonium Day, offer surprise discounts on housewares.

It’s National Junk Food Day, so entice customers with big displays that will satisfy those “naughty” cravings.

National Tapioca Pudding Day

National Corn Fritter Day

National Gummy Worm Day

To celebrate National Pickle Month, offer smallbatch artisanal pickles as well as tried-and-true favorites.

National Vanilla Ice Cream Day

National Hot Dog Day

Create tasting stations around the store in honor of National Baked Bean Month.

It’s National Mutt Day.

National Coffee Milkshake Day

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

National Hamburger Day

National Chicken Wing Day

National Milk Chocolate Day

National Lasagna Day

National Cheesecake Day

DRIVING CATEGORY GROWTH

Trusted iconic brands and expert category management delivering sustainable growth.

hersheys.com

Deli Dynamics: What Customers Really Want from their Grocery Deli In Tyson Foods' 2015 Consequences of Failure study 1 of 4,000 customers who had purchased prepared chicken products from their grocer’s deli in the last three months, findings showed about half experienced deli failures. Compared to the same insights gathered just one year earlier,2 persistent problems had not improved and had even worsened in some areas.

According to Eric LeBlanc, director of marketing for deli and bakery at Tyson Foods, Inc. — “The biggest problems in the 2015 study were product issues; in 2014 - staffing issues. Some grocers might have improved team member performance in product knowledge and customer service skills, but they may have done so at the expense of losing focus on in-store execution issues like proper cooking times and scheduling staff to meet peak shopping periods.” The 2015 study further determined that long wait time continues to be a top issue, while other problems varied on a store-by-store basis. Shoppers evaluated 19 major retailers. The lowest incidences of problems were around 22% while some stores failed as much as 75%. What makes customers rate some delis better than others? How stores stack up In the "best" stores, customers reported fewer staffing issues. While the overall shopping experience in best and worst stores ranked about the same, customer satisfaction with prepared foods shopping in particular ranked higher in the best stores. Frequent purchases occurred more often in the best stores.

Customers that would recommend prepared foods

76%

Best Performing Store

Customers satisfied with deli prepared foods

77% 65% Worst Performing Store

Best Performing Store

69% Worst Performing Store

The "worst" stores had more than double the staffing issues and higher incidences of product problems. General deli problems, including long wait times, were reported as being about the same in best and worst stores, perhaps because people have become accustomed to having to wait or expect some general issues. LeBlanc suggests: “ While the scores indicate customers aren’t concerned about staffing issues in the deli, repeat shopping patterns tell a different story that shouldn’t be ignored. Customers are providing clues about prepared foods and how it affects their shopping experiences.” Clear signals Shoppers are signaling that they would increase trips to the deli and store, based on a better deli experience. They want it to include friendly, knowledgeable staff and freshly prepared products ready at peak times. Simple changes in scheduling and execution could impact shopper satisfaction and repeat visits, along with your sales.

Customers that would be proud to serve deli prepared food products

69%

51%

Best Performing Worst Performing Store Store

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

Front End

GRoCERY’S ToP 10

Market Intelligence By The Numbers

Shelf Stoppers

Packaged Meat Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Feb. 13, 2016)

Lunchmeat-Nonsliced-Refrig. Sausage-Breakfast Bratwurst and Knockwurst Lunchmeat-Deli Pouches-Refrig. Sausage-Dinner Lunchmeat-Sliced-Refrig. Frankfurters-Refrig. Bacon-Refrig. Ham-Canned-Refrig. Franks-Cocktail-Refrig. Total Category

Sales % Change Dollars (Millions) 2016 2015 $401.8 3.7% 6.6% 1,184.5 2.8 5.1 309.9 2.7 6.4 1,612.7 1.3 2.8 2,091.0 0.9 7.8 2,099.8 -0.2 2.0 1,645.0 -1.5 0.4 2,864.1 -2.6 7.0 15.1 -11.6 4.1 77.3 -24.5 -0.6 $12,309.0

-0.3%

% Change 2016 1.2% 6.5 8.5 -4.0 1.5 -4.4 -4.6 3.3 -12.6 -22.8

Units 2015 0.6% -5.2 -2.7 -2.3 0.2 -3.3 -3.5 3.9 -9.2 -1.8

-0.7%

-1.5%

4.5%

NielseN’s Spotlight

Consumption Index: Breakfast Sausage LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

senior couples are the largest purchasing group of breakfast sausage, followed by older bustling families and empty nesters, accounting for 16.2 percent, 14.4 percent and 14 percent, respectively. even though older bustling families are the second-largest purchasing group, they over-index across all lifestyle segments, whereas senior couples over-index across only four. Young transitionals and single seniors are the smallest purchasing groups across behavior stages, each accounting for only 5.9 percent of volume purchases. Across lifestyle stages, those in the Plain Rural living, Modest Working Towns and Comfortable Country groups are the highest-volume consumers, purchasing 23.7 percent, 19.2 percent and 17.5 percent, respectively.

CRoSS-MERCH Candidates

Modest Working Towns

Plain Rural Living

Total

wITH CHILDREN: startup Families

105

107

113

125

106

small-scale Families

106

119

109

129

107

Younger Bustling Families

118

121

153

139

145

135

Older Bustling Families

121

129

138

136

140

167

138

Young Transitionals

independent singles

senior singles

103

established Couples

125

111

126

129

109

empty-nest Couples

100

125

119

142

149

124

senior Couples

109

117

139

128

135

120

Total

104

101

103

117

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+)

High Consumption (120-149)

Average Consumption=100

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

• Sugar and

Sweeteners • Baking Mixes • Desserts, Gelatins and Syrups • Prepared Foods-Dry Mixes • Salad Dressings, Mayo and Toppings • Bread and Baked Goods More oNLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

Seaso

A different kind of product gets noticed. A delicious product gets sales. Why not get both?

ow do you provide exciting ﬂavor without compromising quality? Furthermore, how do you deliver a variety of proteins, each with a distinct modern taste—and authentic experience—to an audience at the grocery store?

Enter: The Tyson® Crafted Creations™ brand. Pairing quality beef, pork and chicken with the tailor-made flavors of the Crafted Creations line, we are ready to make a difference to shoppers with a product line that hasn’t been seen in the meat case before. No two consumers are alike, but too often pre-seasoned, pre-marinated products are a uniform endeavor. The Crafted Creations brand team responded with a product lineup of high-quality protein options that focus on pairing the best cuts and the best flavors. It isn’t about what is easy or following a formula, but rather making sure each

product has a bold, inspired ﬂavor that gives consumers an experience to return to. “That’s what we want to give,” said Crafted Creations brand Chef Ashley Zulpo. “An experience.”

Gr een Chili

ned B e e f fo r Fa ji ta

Fusion Bone

Smok ey Barb

less Pork Si

eque Seasoned

rloin Filet

Chick en Dr um

Zulpo, the Associate Chef in Research and Development“The instant satisfaction of Culinary Service at Tyson ‘I cooked this for my family’ Foods, brought her passion without worrying about finding for cooking to the plate with the right flavor—that’s what Crafted I love to see as Creations “ THAT’S WHAT WE a chef and as products. a home cook,” WANT TO GIVE... said Zulpo. “I She excitedly pores over AN EXPERIENCE.” can go home, the nuances put it in a pan and flavor profiles of Santa and it’s ready to go. But it’s Maria Beef Tri-Tip and the also something that gives importance of selecting me the satisfaction that I’m the right cut for the Green giving my family something Chili Fusion Pork Sirloin they’re really going to love.” to keep moisture without skimping on flavor. More than a name, this is a brand that was crafted to Along with a high standard start making a difference for quality, these products at the meat case and in were meticulously kitchens around the country. packaged to provide a convenience that makes b2b.craftedcreations.com Crafted Creations products markedly different.

stick s

Mintel Global New Products Database Category Insights

Hairstyling Products

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

Market Overview The United States may be the biggest global market for hairstyling products, but compound annual growth rates are low, at 0.5 percent. U.S. hairstyling product sales are forecast to be the slowest versus other hair care segments (e.g., shampoo, conditioner) as American consumers opt for a natural look. key issues Caring claims can help drive usage as consumers shift to a less-styled look. Opportunities exist to better target the rising numbers of AfricanAmerican consumers who are expected have greater spending power. In the black hair care segment, styling products saw an estimated gain of 26.8 percent between 2013 and 2015, in contrast to stagnant hairstyling sales in the overall U.S. hair care market. The segment also experienced an 18.6 percent decline in relaxer sales, an 18.3 percent increase in shampoo sales, a 9.8 percent uptick in conditioner sales and a 1.6 percent increase in home hair color sales. Styling powder, with reported consumer interest among hair care users rising from 33 percent in 2014 to 40 percent in 2015, and products recommended for use before or after a salon blowout can help add value.

What Does it Mean? A move toward lessstyled, natural looking hair is having a negative impact on styling product sales overall, with a third of U.S. consumers preferring to wear their hair in its natural state. That said, the black hairstyling segment is performing much better, with scope for mainstream brands to

better target AfricanAmerican consumers who are opting for natural hairstyles, rather than relaxed/ straightened styles, which tend to require more management via styling products. Brands can continue to tap into the shift towards a less-styled

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

look by focusing on how products can help better achieve a natural look, or by emphasizing benefits beyond hold, and in turn blurring with hair treatments and conditioners (e.g., moisturizing, protection against split ends, defrizzing), and by using newer and less-used caring ingredients such

as black castor oil and mongongo oils. There remains untapped growth potential for newer formats such as styling powder, which continues to gain traction in the United States in terms of usage, and newer positioning to tap into the popularity of salon blowouts.

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*Source: IRI, Sanitary Pads and Tampons, Total US - FDMx, Latest 52 weeks ending March 22, 2015. Spins Data, Disposable Pads and Reusable Pads and Tampons, Total US - Natural Channel, 52 weeks ending 04/20/2014.

Retail dietitians can provide guidance on healthful, convenient offerings supported by deli-focused nutrition education programs.

All’s Wellness By Diane Quagliani

Health in the Deli Retail dietitians help serve up better-for-you options.

“A

pound of salami, please” is a typical deli request, but today’s shoppers may be as likely to ask for a container of kale quinoa salad or another healthful prepared food. Te market for grocery prepared foods, including those consumed in-store and as takeout, is booming. Since 2008, the category has grown nearly 30 percent, reaching an estimated market size of nearly $29 billion, and more than 40 percent of the U.S. population purchases prepared foods from grocery stores, according to data from Te NPD Group. In fact, the increasingly common phenomenon of grocers providing restaurant-type offerings has earned it the term “grocerant.” Retailers can really shine with health-conscious shoppers in the prepared food area, especially with “diferentiated dinner positioning centered around ‘better-for-you’ and approachable but elevated cuisine,” compared with casual dining, quick-service and delivery options, according to “Fresh Prepared Foods: Cracking the Code for U.S. Retailers,” a report by A.T. Kearney and Technomic. Retail dietitians can provide guidance on healthful, convenient oferings supported by deli-focused nutrition education programs.

Flavor, Nutrition Info on the Menu Unlike yesterday’s deli, where health-conscious shoppers mostly were limited to rotisserie chicken, sliced turkey breast and light Swiss cheese, today’s departments ofer an appealing array of better-for-you options with on-trend ingredients like those at ShopRite of Timonium, in Baltimore. “We ofer unique varieties of cold and hot salads that incorporate grains like quinoa and barley, seeds like fax seed [and] chia seed, and diferent greens like kale and broccoleaf,” says the store’s retail dietitian, Elisabeth D’Alto.

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

Shoppers also seek certain nutrition attributes and information about the foods they buy. “I believe shoppers defnitely want transparency in the supermarket, and that includes the deli,” notes D’Alto. “Tey are looking to make better choices for themselves and their families by looking for lower-sodium, lower-fat and preservative-/ additive-free options when it comes to the deli and prepared foods section.” Although the Food and Drug Administration has postponed enforcement of new menu-labeling regulations that will eventually afect many deli and prepared food departments, it’s already common practice for retailers to provide online nutrition information or special designations on items that signal better-for-you choices.

Dietitian Programs Retail dietitians like D’Alto actively promote healthful deli options and encourage product trial during supermarket tours, nutrition classes and hands-on demos. “During these educational sessions, we often suggest ways to add more fber, reduce saturated fat, and introduce the idea of using alternative toppings such as avocado or hummus,” she says. “Tis education prompts our customers to sample new products that they may not have tried otherwise.” Another win-win strategy for retailers and shoppers is to combine convenience with good nutrition to provide fast, healthful meal solutions. One example is ShopRite of Timonium’s dietitian-approved Helping Families Eat Better program. “Every week, we provide a simple, easy and delicious recipe, which can be found in a refrigerated meal case,” says D’Alto. “Customers stop here at the case, pick up the recipe and all the ingredients they need to create this meal. It’s been a very successful program for our store.” PG Registered dietitian Diane Quagliani, MBA, RDN, LDN, specializes in nutrition communications for consumer and health professional audiences. She has assisted national retailers and CPGs with nutrition strategy, web content development, trade show exhibiting, and the creation and implementation of shelf tag programs.

Itâ&#x20AC;&#x2122;s about time someone gave the status quo the heave-ho.

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Our top-ranked grocery retailer countdown dives deep into the ebb and fow of an industry fush with upheaval and opportunity. Analysis by Jim Dudlicek, Bridget Goldschmidt and Meg Major / Research by Debra Chanil

uring a 12-month expedition that’s spawned dramatic ripples across the mighty supermarket seas, this year’s annual Super 50 ranking of the nation’s leading food retailers is punctuated by a swift undercurrent of mergers, acquisitions, spinofs and wider expansion nets that are collectively redefning the ecosystem. For this year’s annual countdown of the nation’s leading

food retailers, we chose to frame our analysis within a nautical theme in a nod to the ebb and fow of the times and consumer preferences. Like the ripples in a pond, major shifts at the source trigger currents that are ultimately felt all the way downstream. M&A activity among the larger players can be a cold splash in the face for smaller operators that must decide how to react. Far-reaching ripples can also serve to May 2016 | progressivegrocer.com |

Changing Course: Tese retailers have redefned themselves, or are in the process of endeavoring to do so, as a way of better navigating the changing demands of a dynamic marketplace.

make the entire ecosystem stronger, by forcing cohorts to shore up core competencies and gird against vulnerabilities to maintain and grow market share. It can also sound the alarm for stragglers, which are required to tread water amid bigger fsh in a much smaller pond. Our Super 50 analysis breaks down select players into fve “oceans,” each consisting of common characteristics akin to each — some of which swim in more than one sea: At the Helm: Larger legacy retailers that have weathered many a storm over the years, with strategic growth, innovation and a commitment to the customer experience. Rising Tide: Owning a strong presence in their various market areas, these grocers, through a savvy mix of tried-and-true approaches, are well grounded and willing to take risks with new concepts to forge ahead.

Steady as They Go: Regional players with true staying power, dedicated to their core customers and local communities. In a titanic struggle for market share in an increasingly predatory arena, a rising tide may not necessarily be enough to lift all boats. But our Super 50 contenders each play an integral role in the tempestuous sink-orswim supermarket ecosphere.

Beyond the Mainstream: Grocers owning the natural and organic category, or swallowing an ever larger portion of it, through persistent stewardship and faithful execution.

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The Super 50 Methodology Each company profiled in The Super 50 was contacted by PG for guidance regarding the four categories included in the report: annual sales from their most recently concluded fiscal year, store count, top banners, and employee counts (either total or full-time equivalents). Full-time equivalent employees are the sum of regular workers, plus one-half the number of part-time employees. In cases where companies didn’t respond, data were sourced from public records, including 10K and annual reports. For privately held companies, results are based on information from Nielsen TDLinx, which collects and maintains store information across all channels selling consumer packaged goods. Nielsen TDLinx uses Food Marketing Institute’s definition of a supermarket: a grocery store with a minimum of $2 million in annual sales; its data omit sales from convenience, drug and other retail channels that may be part of total revenue for some companies. Wholesale membership clubs such as Sam’s, Costco and BJ’s are also not included. Supercenters are included, but only for their grocery-equivalent merchandise. Not included are soft goods; clothing; general merchandise such as hardware, appliances, computers and auto service; and other items not common to supermarkets. Sales estimates from Nielsen TDLinx are presented in terms of all-commodity volume (ACV), which is defined as an annualized range of the estimated retail sales volume of all items sold at a retail site that pass through the retailer’s cash registers. Nielsen TDLinx’s ACV is an estimate based on best available data — a directional measure to be used as an indicator of store and account size, not an actual retail sales report. All data are collected by Nielsen TDLinx from a wide range of independent sources, and then enhanced with computer modeling. Information shown is from the March 2016 database.

Congratulations

Congratulations to Sandy Douglas, Executive Vice President, The Coca-Cola Company, and President, Coca-Cola North America, on being honored with the 2016 William H. Albers Award for Industry Relations from the Food Marketing Institute (FMI)!

ÂŠ 2016 The Coca-Cola Company

Rank

Company

Fiscal Year-end Sales (000)

No. of Supermarkets

Employees (Total or Full-time Equivalents)

Website

$298,378,000*

4,132

Walmart Supercenter (3,465) Walmart Neighborhood Market (639)

1,261,065 FTE

www.walmart.com

$109,800,000

2,623

Kroger (1,143) Harris Teeter (232) Ralphs (137)

431,000 TOTAL

www.thekrogerco.com

Safeway (894) Albertsons Store (285) Vons (204)

274,000 TOTAL

www.albertsons.com www.safeway.com

Top Banners

Wal-Mart Stores Inc. Bentonville, Ark.

The Kroger Co. Cincinnati

AB Acquisition LLC Boise, Idaho

$58,322,940

2,290

Publix Super Markets Inc. Lakeland, Fla.

$32,400,000

1,114

Publix (1,105) Publix Sabor (6) Publix GreenWise (3)

175,000 TOTAL

www.publix.com

Ahold USA Inc. Quincy, Mass.

$26,400,000

788

Stop & Shop (423) Giant Food/Carlisle (196) Giant Food/Landover (169)

121,000 FTE

www.aholdusa.com

H-E-B Grocery Co. San Antonio

$23,000,000

315

H-E-B (261) H-E-B Plus (36) H-E-B Central Market (9)

43,301 FTE

www.heb.com

Delhaize America Inc. Salisbury, N.C.

$18,058,000

1,283

Food Lion (1,096) Hannaford (187)

98,000 TOTAL

www.delhaizegroup.com www.foodlion.com www.hannaford.com

Meijer Inc. Grand Rapids, Mich.

$16,700,000

223

Meijer (223)

67,500 TOTAL

www.meijer.com

Wakefern Food Corp. Keasbey, N.J.

$15,700,000

187

ShopRite (120) Price Rite (62) The Fresh Grocer (5)

15,700 FTE

www.wakefern.shoprite.com

Whole Foods Market Austin, Texas

$15,389,000

419

Whole Foods (419)

89,000 TOTAL

www.wholefoodsmarket.com

Trader Joe’s Co. Monrovia, Calif.

$12,800,000

448

Trader Joe’s (448)

9,200 FTE

www.traderjoes.com

Southeastern Grocers LLC Jacksonville, Fla.

$11,898,000

750

Winn-Dixie (514) Bi-Lo (180) Harveys (56)

60,000 TOTAL

www.bi-lo.com www.winn-dixie.com

Aldi Inc. Batavia, Ill.

$10,900,000

1,451

Aldi Food Store (1,451)

22,000 FTE

www.aldi.com

Target Corp. Minneapolis

$10,400,000

249

SuperTarget (249)

65,900 FTE

www.target.com

Hy-Vee Inc. West Des Moines, Iowa

$9,600,000

240

Hy-Vee (240)

69,000 TOTAL

www.hy-vee.com

Giant Eagle Inc. Pittsburgh

$9,500,000

222

Giant Eagle (207) Giant Eagle Market District (13)

34,000 TOTAL

www.gianteagle.com

Wegmans Food Markets Inc. Rochester, N.Y.

$7,900,000

Wegmans (88)

46,500 TOTAL

www.wegmans.com

Supervalu Inc. Eden Prairie, Minn.

$7,487,000

644

Save-A-Lot (439) Shoppers Food Warehouse (55) Cub Foods (53)

27,500 FTE

www.supervalu.com

WinCo Foods Inc. Boise, Idaho

$6,400,000

105

WinCo (104)

10,700 FTE

www.winco.com

Defense Commissary Agency (DeCA) Arlington, Va.

$4,646,389

177

DeCA Commissary (177)

10,000 FTE

www.commissaries.com

Save Mart Supermarkets Inc. Modesto, Calif.

$4,300,000

212

Save Mart/CA (84) Lucky Store/Save Mart (69) Food Maxx (52)

13,400 FTE

www.savemart.com

Stater Bros. Markets San Bernardino, Calif.

$4,100,000

168

Stater Bros. (168)

6,600 FTE

www.staterbros.com

Smart & Final Inc. Los Angeles

$3,971,000

276

Smart & Final (94) Smart & Final Extra (127) Cash & Carry (55)

3,800 FTE

www.smartandfinal.com

Ingles Markets Inc. Black Mountain, N.C.

$3,900,000

203

Ingles (194) Sav Mor Foods/Ingles Markets (9)

9,100 FTE

www.ingles-markets.com

Price Chopper/Golub Corp. Schenectady, N.Y.

$3,816,000

136

Price Chopper/Golub (136)

11,860 FTE

www.pricechopper.com

* Sales figure represents total U.S. annual sales; retailer doesn’t break out sales by retail format. Source: Nielsen TDLinx, March 2016; Progressive Grocer Market Research, 2016

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

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Rank

Company

Fiscal Year-end Sales (000)

No. of Supermarkets

Top Banners

Employees (Total or Full-time Equivalents)

Website

Sprouts Farmers Market Phoenix

$3,590,000

235

Sprouts Farmers Market (235)

22,000 TOTAL

www.sprouts.com

Demoulas/Market Basket Tewksbury, Mass.

$3,144,700

Market Basket/Demoulas (75)

7,900 FTE

n/a

Raley’s Supermarkets West Sacramento, Calif.

$3,036,000

122

Raley’s (72) Nob Hill (21) Bel Air Market (20)

8,450 FTE

www.raleys.com

Weis Markets Inc. Sunbury, Pa.

$2,900,000

163

Weis (163)

18,000 TOTAL

www.weismarkets.com

Tops Markets LLC Williamsville, N.Y.

$2,800,000

163

Tops Friendly Markets (163)

14,450 TOTAL

www.topsmarkets.com

Schnuck Markets Inc. St. Louis

$2,700,000

Schnucks (99)

10,005 FTE

www.schnucks.com

Key Food Stores Cooperative Inc. Staten Island, N.Y.

$2,300,000

218

Key Food (146) Food Universe (27) Food Dynasty (11)

4,500 FTE

www.keyfood.com

Brookshire Grocery Co. Tyler, Texas

$2,222,000

152

Brookshire’s Food & Pharmacy (117) Super 1 Foods (34)

7,300 FTE

www.brookshires.com www.super1foods.com

SpartanNash Co. Byron Center, Mich.

$1,980,000

157

Family Fare Supermarket (74) D&W Fresh Markets (11) Sun Mart Foods (10)

10,000 FTE

www.spartannash.com

K-VA T Food Stores Inc. Abingdon, Va.

$1,970,000

132

Food City (121) Super Dollar Discount Foods (11)

7000 FTE

www.foodcity.com

Houchens Industries Inc. Bowling Green, Ky.

$1,931,400

389

Save-A-Lot (179) IGA (85) Food Giant (53)

8,900 FTE

www.houchensindustries.com

The Fresh Market Inc. Greensboro, N.C.

$1,857,000

184

The Fresh Market (184)

12,600 TOTAL

www.thefreshmarket.com

Grocery Outlet Inc. Emeryville, Calif.

$1,710,000

245

Grocery Outlet Bargain Market (245)

6,400 FTE

www.groceryoutlet.com

Bashas’ Markets Inc. Chandler, Ariz.

$1,670,000

117

Bashas’ (53) Food City/Bashas’ Markets (46) AJ’s Fine Foods (11)

8,547 TOTAL

www.bashas.com www.myfoodcity.com www.ajsfinefoods.com

Big Y Foods Inc. Springfield, Mass.

$1,600,000

Big Y World Class Markets (48) Big Y Express (5) Table & Vine (1)

6,000 FTE

www.bigy.com

Foodarama Supermarkets Inc. Freehold, N.J.

$1,382,000

ShopRite (28)

3,700 FTE

www.shoprite.com

Inserra Supermarkets Inc. Mahwah, N.J.

$1,342,000

ShopRite (28)

3,070 FTE

n/a

Woodman’s Food Markets Inc. Janesville, Wis.

$1,287,000

Woodman’s (16)

2,750 FTE

www.woodmans-food.com

Village Super Market Inc. Springfield, N.J.

$1,250,600

ShopRite (28)

3,070 FTE

www.villagesupermarkets.com

Fiesta Mart Inc. Houston

$1,167,400

Fiesta Mart (58)

4,800 FTE

www.fiestamart.com

Central Grocers Inc. Joliet, Ill.

$1,152,000

Strack & Van Til (19) Ultra Foods (16)

3,349 FTE

www.central-grocers.com

Lowes Pay N Save Inc. Littlefield, TX

$1,095,068

145

Lowes Grocery (122) Lowes Big 8 (10) Food King (8)

3,600 FTE

www.lowesfoods.com

Coborn’s Inc. Saint Cloud, MN

$1,032,200

Coborn’s (29) Cash Wise (17) Save-A-Lot (4)

8,000 TOTAL

www.coborns.com

Marc Glassman Inc. Cleveland

$1,020,500

Marc’s (59)

5,820 FTE

www.marcs.com

Alex Lee Inc. Hickory, N.C.

$1,018,000

Lowes Food Store (74) Just Save (19) IGA (1)

4,650 FTE

www.alexlee.com

* Sales figure represents total U.S. annual sales; retailer doesn’t break out sales by retail format. Source: Nielsen TDLinx, March 2016; Progressive Grocer Market Research, 2016

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

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At the Helm Albertsons + Safeway, H-E-B, Kroger, Publix, Wakefern, Wegmans The retailers at the helm of PG’s Super 50 are rugged skippers that have excelled, to varying degrees, on a national stage or in their local markets, with measured growth, economies of scale, first-rate flotillas and superior armaments, to weather stormy seas in an increasingly deep and murky marketplace. They’ve each endeared themselves to a loyal customer base by investing substantial resources in people, processes, programs and platforms to equip them to know what floats their customers’ boats.

eing an industry leader is about more than sales — it’s about market leadership through innovation, knowing your shopper, understanding long-term trends and being able to weather historically stormy seas in an increasingly competitive marketplace. Te retailers at the helm of Progressive Grocer’s Super 50 are rugged companies that have demonstrated measured growth, leveraged economies of scale, invested in consumer insights and continued to plot steady courses in an increasingly competitive marketplace. “Wow — what a year!” exclaimed Rodney McMullen, chairman and CEO of No. 2-ranked Te Kroger Co., at the largest traditional grocer’s Q4/year-end earnings call earlier this year. Kroger scooped up Milwaukee-based Roundy’s, presumably to possess that company’s crown jewel, the Chicago-area gem Mariano’s. Further, undaunted by its failure to acquire Te Fresh Market, the food retail giant is going all in on the fresh format with the launch of its Main & Vine concept store near Seattle. Meanwhile, Kroger is casting an eye on foreign markets, with reports that it’s looking to partner with Israeli investors to bid on Israel’s Mega and become an operating partner in that 127-store supermarket chain. To enhance the customer experience, Kroger developed ClickList, a shop-online, pick-up-at-the-store service, based on what it learned from Harris Teeter’s Express Lane. Te retailer is also testing Vitacost.com’s technology and ship-to-home infrastructure in Denver through a pilot with its King Soopers division, as well as piloting a related “End-

less Aisle experience” at Main & Vine. Another winner for Kroger has been its corporate brand portfolio, accounting for more than $20 billion of the company’s total revenue. All of that, plus 49 consecutive quarters of same-store sales growth and 11 consecutive years of market share growth, puts Kroger frmly at the helm of the industry. Meanwhile, Boise, Idaho-based Albertsons (No. 3) has been on a roll since re-acquiring the banners it had previously ofoaded to Supervalu Inc. Having sold 146 stores to the ill-fated Haggen as part of its 2014 merger with Safeway, Albertsons got some of them A back in the wake of the Bellb iingham, Wash.-based regional’s bankruptcy after its brief firtab ttion with becoming a signifcant new West Coast player. n Albertsons’ Lubbock, Texasbased subsidiary United Superb markets acquired seven Lawrence m Bros. Co. stores in west Texas B aand New Mexico. And Albeertsons recently picked up the sseven-store family-owned Paul’s Market chain, based in HomeM dale, Idaho — a good ft for its d IIntermountain division. Elsewhere, Albertsons aims to expand its merger partner’s reach into new markets by converting Albertsons stores in Florida to the Safeway banner, a move that doesn’t come without risk. As this issue went to press, Albertsons had unveiled plans for a new concept: a 60,000-square-foot urban Tom Tumb planned for the ground foor of Te Union Dallas, a two-tower mixed-use project in the heart of downtown. Located across from the American Airlines Center, the Tom Tumb at the Union will feature one of the banner’s frst wine and beer bars, a concept that Albertsons has been

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

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including in both remodels and new stores in select neighborhoods throughout the country. To be sure, Publix Super Markets (No. 4) ranks highly among retailers with the most consumer loyalty, according to a recent Temkin Group study. Te Lakeland, Fla.-based grocer aims to expand that following up the Eastern seaboard, most recently with leases for two stores in Virginia, expected to launch within the next two years. Te Old Dominion will be the 1,100-store chain’s seventh state of operation; it opened its frst location in North Carolina in 2012 amid aggressive growth not only into new regions, but also across its current footprint of Florida, Georgia, Alabama, Tennessee and the Carolinas.

Publix will enter this new era w strong fnancials ($8.2 billion with iin fourth-quarter sales in 2015, a 44.5 percent increase from last year’s $$7.9 billion, with comps up 3.2 percent), as well as a new leaderp sship team. CEO Ed Crenshaw, ggrandson of the company’s founder, who since 2008 had led Publix to w unprecedented growth, retired at u tthe end of April and was succeeded by Todd Jones, who was president alongside Crenshaw. Other leaders at the helm, like H-E-B (No. 6) and Wegmans Food Markets (No. 17, and celebrating a century in business this year) continue to rack up accolades as employers of choice and superlative food-shopping destinations in loyalty surveys.

Rising Tide

Giant Eagle, Hy-Vee, K-VA-T/Food City, Meijer, Smart & Final, WinCo Foods Confronting storm surges head-on through a savvy combination of outstanding local appeal, solid deck hands and skillful store-level stewardship, these intrepid mariners maintain firm control of their fleets as a result of their disciplined practices and balanced risk-taking via groundbreaking retail concepts. With a commanding presence in their respective core marketing territories, the members of this contingent have earned admirable reputations as able navigators of often choppy grocery waters.

stablishing a commanding presence in their respective core marketing territories, a handful of Super 50 stalwarts have earned admirable reputations as able navigators of choppy grocery seas while extending their tentacles in new directions. Such is the case of Midwest superstore retailer Meijer Inc., PG’s 2015 Retailer of the Year and No. 8 in 2016’s Super 50 ranking. Te company plans to build stores in Michigan’s Upper Peninsula, Cleveland and Minneapolis in the next fve years, CEO Hank Meijer revealed during the recent Western Michigan University Food Marketing Conference in Meijer’s hometown of Grand Rapids. Earlier this year, in the wake of its 2015 entry into Wisconsin, Meijer acknowledged purchasing property

in the Minneapolis-St. Paul area. Te regional retailer plans to invest more than $400 million in new and remodeled stores this year across its market area, includiing nine new supercenters and 32 major remodels. m Meanwhile, out in Boise, Idaho, WinCo Foods, which comes in at No. W 119 in Te Super 50, has become a formidable force on the retail foodscape. m With more than 100 stores in eight W sstates, the fast-growing, employeeoowned discount grocery chain, which boasts being the “supermarket w llow-price leader” in the markets it sserves, has established a fercely loyal ccustomer base and an equally loyal workforce. Its bulk foods department, a star attraction of its stores, features 700-plus items, including many natural food products, some organics, snacks, candies, cereals, fours, pastas and spices.

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

Beyond the Mainstream Whole Foods Market, Trader Joe’s, Sprouts, WinCo, Aldi, Kroger, Walmart

As organic and natural foods grow more popular with consumers, upperdeck retailers in PG’s Super 50 rankings have been sharpening their games with expanded offerings and access. While nearly all leading food retailers are prioritizing free-from categories, the fleet of operators depicted here has secured a healthy niche in the great wide-open retail sea by leveraging their scale to move their big ships’ better-for-you offerings in the due-north direction of the mainstream.

s organic and natural foods grow more popular with consumers, retailers in PG’s Super 50 rankings have been growing their feets with expanded oferings and access. Take Austin, Texas-based Whole Foods Market, No. 10 on this year’s list. Te pioneering “supernatural” grocer will at long last

debut its frst 365 by Whole Foods store in the Silver Lake neighborhood of Los Angeles this month, with two more locations to follow this year in Bellevue, Wash., and Portland, Ore. Positioned as a “quality-meets-value” format amid an increasing number of retail competitors encroaching on its native organic and better-for-you food turf, the compact 365 stores will feature an edited mix of products

“that adhere to the company’s industry-leading quality standards in an environment that’s fun and convenient for shoppers,” according to the company. Additionally, 365 will ofer online ordering and delivery services via Instacart. Whole Foods’ new concept is also an attempt to play down its “Whole Paycheck” image while giving it a vehicle to compete more efectively with the likes of Trader Joe’s (No. 11), a perennial favorite in customer loyalty surveys. Its sister company, Batavia, Ill.based Aldi (No. 13), has also made inroads over the past few years in the natural/organic space. Its SimplyNature product line, which is free of 125 ingredients, and an increased organic produce ofering, as well as the reformulation last fall of all of its private-brand items to remove certifed synthetic colors, partially hydrogenated oils (PHOs) and added MSG, refect Aldi’s increasing focus on providing high quality groceries at low prices. Additionally, since 2013, the company has pursued an accelerated growth strategy that by the end of 2018 should result in nearly 2,000 stores — an almost 50 percent increase in just fve years. For its part, Phoenix-based Sprouts Farmers Market (No. 26) is rapidly enlarging its footprint and is on pace for continued growth on the heels of a strong 2015 performance. Having reached 200 stores last year and currently at 220 locations across 13 states, the fresh-focused Sprouts’ latest wave of expansion will take place in the third quarter of 2016, with 36 stores slated to open, 24 of which were announced earlier in the year. Having recently signed a lease agreement in Tampa,

Sprouts is also poised to make its Florida debut. “As more and more Americans embraced our ‘Healthy Living for Less’ model, Sprouts’ position of strength in the industry continued to grow in 2015,” said CEO Amin Maredia while discussing the company’s impressive Q4 2015 results, which included a 27 percent sales increase. Also among the biggest purveyors of organic and natural foods are two grocery chains with reputations for being in the heart of the mainstream: top-ranking Wal-Mart Stores Inc. and Te Kroger Co. (Nos. 1 and 2, respectively). Since dedicating itself to providing afordable organics in 2014, Walmart has rolled out the Great Value Organic line in Canada, making value-priced organic options available to millions who’ve never stepped foot in a Whole Foods, while Kroger’s Simple Truth and Simple Truth Organic lines similarly encompass products across the store, and the Cincinnati-based grocer’s recent strategic partnership with Lucky’s Markets, in Boulder, Colo., demonstrates what the company called a “deep ongoing commitment to providing customers with afordable fresh organic and natural foods” as a part of its Customer 1st strategy.

Changing Course

Ahold + Delhaize, Brookshire Grocery Co., The Fresh Market, Lowes (Alex Lee), Price Chopper/ Golub Corp., Raley’s, Target, Southeastern Grocers, Supervalu, Walmart, Woodman’s In the rough-and-tumble supermarket high seas, this crew of retailers is in the midst of charting new courses in search of smoother sailing and a faster cruising pace. While some are trolling for more nimble operations and sturdier crafts under the direction of new captains, others are unfurling their sails in bold new directions to better navigate the ever-changing waters with new vessels, retooled transmitters and updated itineraries to right-size their ships for the long journey ahead.

S 38

ome retailers fnd themselves charting new courses in search of smoother sailing and a faster cruising pace in a stormy seascape where past successes are no guarantee of continued relevance or proftability. No. 1-ranked Walmart, the nation’s largest grocer in sheer size and volume, reported posi-

tive Q4 comps earlier this year, up 0.6 percent, with smallformat Neighborhood Market comps up about 7 percent. “Our initiatives are making it simpler and more convenient for customers to shop at Walmart,” said Doug McMillon, president and CEO of the Bentonville, Ark.-based mega-retailer. One such undertaking involves the creation of hundreds of management positions as part of a new pro-

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

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gram to enhance the fresh food ofering at its U.S. stores. Earlier this year, however, in a move seen as a bid to recapture its retailing dominance after a spate of fat or declining sales, Walmart revealed plans to close 269 stores and warehouse clubs worldwide — including 102 of its small-format Walmart Express locations — in conjunction with a major overhaul of its nearly 11,600 stores worldwide. While the afected stores represent less than 1 percent of the retailer’s global square footage and revenue, the news is a concrete acknowledgment of the difculties the once-unstoppable retailer has faced in a fast-changing, hypercompetitive retail landscape. Meanwhile, Ahold (No. 5) and Delhaize (No. 7) are careening toward consummation of their proposed merger, which would create an international retailer with more than 6,500 stores and 375,000-plus associates across the United States and Europe. To satisfy regulators, the retail conglomerates, based respectively in Amsterdam and Brussels, may need to sell of more than 80 stores in six states. Both sides bring strong fnancial trends to the deal: Ahold reported a 21.4 percent increase in Q4 group sales, with online sales growth continuing to accelerate, while Delhaize posted Q4 revenue growth of 14.2 percent, and a 2.3 percent comparable-store sales increase in the U.S. Crossing the Super 50 fnish line at No. 12, Southeastern Grocers has had a new captain at the helm for the past year, President/CEO Ian McLeod, who was integral in the turnaround of Australian food retailer Coles, and is hoping to lead a similar transformation at the Jacksonville, Fla.-based company. In tandem with a major efciency program to power a $70 million price investment program launched in January, McLeod is on a mission to raise morale, standards and store conditions. In the frst of 50 store remodels

planned for this year, the company resurrected a location in the Jacksonville suburb of Baymeadows after a fve-year absence, with a new fresh-focused format. Coming in at No. 18, Supervalu is poised to alter its course by spinning of its Save-A-Lot division into a separate publicly traded company. To that end, new CEO Mark Gross has brought in two new leaders to fortify the Minneapolis-based company’s rebuilding campaign. Former C&S exec Jim Weidenheimer was tapped for the newly created position of chief innovation ofcer and EVP of corporate development, and Bruce Besanko was reinstated as CFO while retaining his COO duties. Ample attention has been focused on Target Corp.’s audacious plans to realize the full potential of its billion-dollar grocery business. Ranked No. 14, Target, with slightly more than 1,800 stores, is the second-largest discount retailer in the nation, taking a back seat only to Walmart. Te Minneapolis-based retailer has been immersed for the past 18 months in a strategic repositioning under Chairman/CEO Brian Cornell. Although the protracted journey has proved trickier than anticipated, Cornell and Co. have been conducting item-by-item teardowns and reinventing processes and practices to enhance freshness, assortment and convenience, which have helped Target’s food segment outpace its overall business in the back half of 2015. As Cornell recently noted, in the near term, “[t]he addition of one grocery item to the baskets of guests who are already shopping our food assortment would add billions of dollars of incremental sales.” At No. 28, West Sacramento, Calif.-based Raley’s 80th anniversary in 2015 signifed a year easily considered to be one of the busiest in the company’s history. Last May, Jim and Joyce Raley Teel transferred majority (92 percent) ownership to their son, Michael Teel, grandson of company founder Tom Raley. Over the past decade, Raley’s has focused on expanding products that customers want more of, including organic and natural food oferings. More recently, the chain — which operates 126 stores in Northern California and Nevada under its namesake banner, as well as the Bel Air Markets, Nob Hill Foods and Food Source brands — has dramatically risen above the churning California retail May 2016 | progressivegrocer.com |

waters by wisely touting a variety of innovative oferings, including the rollouts of a food truck, farm-tofork educational programs, new stores and a host of eco-friendly initiatives. As one of the early pioneers of small-format, fresh-focused grocery chains, Te Fresh Market, at No. 37, inked a $1.36 billion deal in March to be acquired by New Yorkbased equity frm Apollo Global Management LLC. Te ofer, which is set to close in the coming weeks, followed a widely publicized strategic review, for which a consortium led by Te Kroger Co. was said to be in the running. However, now that the Greensboro, N.C.-based 183-store chain is poised to unleash its full potential with an aggressive new owner and an equally enthusiastic leader in President and CEO Rick Anicetti, the next leg of Te Fresh Market’s voyage will be well worth tracking. After ending talks to sell in late 2015, 33rd-ranked Brookshire Grocery Co (BCG) is settling into a new normal under the leadership of new Chairman and CEO

B Bradley W. Brookshire, part of tthe third generation of the family tto lead the Tyler, Texas-based rregional retailer. Often referred to as Texas’s ssecond-best privately held grocery cchain behind H-E-B, BGC has nimbly reacted to industry changes n tthrough the years, and while its sshort-lived bid to put itself on the block attracted considerable attenb ttion from supermarket operators aand private equity frms alike, industry observers breathed a collecd ttive sigh of relief that the company will remain independent, at least for the foreseeable future. Renowned for its everyday low prices and vast selection, Woodman’s Markets, at No. 43, recently expanded an online ordering and delivery service to its Milwaukee-area stores. Since the chain frst launched the service in Madison several months ago, it has seen basket sizes increase six times the average in-store purchase. According to Clint Woodman, president of the Janesville, Wis.-based chain, Te service “allows us to really diferentiate from our competitors while providing excellent service to our customers.”

ADVERTORIAL

Q&A

Talking with…

Matthew Prescott Senior Food Policy Director, The Humane Society of the United States

Progressive Grocer: Why do you think so many food companies are switching to 100% cage-free eggs? Matthew Prescott: The way companies interact with the world around them can have major bottom line implications. Nowadays, consumers are searching for products that both come at a value and align with their values—including around issues like animal cruelty; they want animals to be treated well in the supply chain, and want to support companies that agree. But there’s a gap between the way consumers want animals to be treated, and what’s actually happening in some areas of agribusiness. It’s within that gap that we see, for example, egg suppliers locking chickens in cages so tightly, the animals can’t even spread their wings. Imagine being in an elevator packed wall-to-wall with other people. The elevator suddenly breaks down. People are frantically trying to escape, frantically trying to move. Then imagine the door just never opens, the people stuck languishing in the elevator for the rest of their lives. That’s what life is like for caged hens in the egg industry—and it’s simply out of step with what consumers want. To try and narrow that gap between consumer expectation and reality, many companies are taking proactive measures to show their customers that they’re aligned on this important issue. One way they’re doing that is by shifting to 100% cage-free eggs. Modern cage-free facilities allow birds the freedom to engage in their natural behaviors—to walk, fap their wings, lay their eggs in nests and more. They’re large scale, automated production systems that can churn out massive volumes of eggs all while giving animals a better quality of life—a real win-win for birds and buyers alike. PG: Is there support for shifting to cage-free eggs? MP: Regarding the growing support for animal welfare-minded sourcing policies, in 2010, Supermarket Guru Phil Lempert predicted, “There’s organic, there’s fair trade, but humane is the next big thing.” Indeed, Lempert was right. Dozens of the world’s largest food companies have now publicly pledged to

shift their supply chains to 100% cage-free eggs. Those companies—detailed in full at www.bit.ly/EggPolicies—include Walmart, Kroger, Albertsons, Ahold, Delhaize, Costco, Target, Giant Eagle, SUPERVALU, Trader Joe’s, BJ’s Wholesale Club, CVS, Wawa, McDonald’s, IHOP, Denny’s, Kraft Heinz, Unilever, ConAgra Foods and so many more. “As our customer base has been moving to cage-free at an increasing rate, Kroger’s goal is to transition to a 100% cage-free egg supply chain by 2025,” states the country’s largest traditional grocery operator. Reports Ahold, “Animal welfare is an issue that we care about greatly and we believe that cage-free environments are a more humane way to treat hens.” “Consumers have responded positively to the expanded choices in the egg aisle,” says Albertsons about its growing cage-free assortment. “Albertsons Companies…will be working with its suppliers toward a goal of sourcing only cage-free eggs for its store operations by 2025.” These policies make perfect sense, in a customer climate where people actively want to support companies which support their values. As the Food Marketing Institute reports: “Shopper interest in animal welfare has been consistently growing,” and “shoppers want food retailers to prioritize animal welfare” even over other issues, like the environment.” PG: How would a company go about switching to cage-free eggs? MP: Many of the country’s largest egg producers have also committed to a cage-free future, making the transition easier than it has ever been. Rose Acre Farms—the second largest table egg producer—has said it’s switching to 100% cage-free production, for example. Retailers interested in moving in this direction should feel free to reach out to me directly any time at mprescott@hsus.org. The Humane Society of the United States is proud to partner with the world’s largest food companies, helping them navigate these issues and crafting policies and programs to create a more humane supply chain, and more humane world.

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

“Retailers adopting cage-free eggs sooner rather than later could gain a proft advantage.” – Bloomberg

Costco is committed to going cage-free for its egg procurement…In calendar 2016 we expect to sell over one billion cage free eggs.

Albertsons Companies sets goal for cage-free eggs

Kroger’s goal is to transition to a 100% cage-fr

Walmart U.S. and Sam’ announced their goal to transition to a 100 percent cage-fr

The Humane Society of the United States offers our appreciation to the dozens of major grocers with policies to source 100% of their eggs from cage-free hens. To Kroger, Albertsons, Costco, Ahold, Delhaize, Target, BJ’s Wholesale, Trader Joe’s, The Fresh Market, CVS, ALDI, Whole Foods and all the others: Your work addressing this important social concern is creating a cage-free future, a mor and a mor

Steady as They Go

Bashas’, Big Y, Coborn’s, Demoulas/Market Basket, Ingles, Save Mart, Schnucks, SpartanNash, Stater Bros.,Tops Markets, Weis Markets Noteworthy among those on this year’s Top 50 list is an armada of regional grocers that has, by hook or by crook, found a way to forge ahead in their respective native waters by staying true to the established course of their founding missions. As fixtures in their extended local communities, this band of faithful sailors is less interested in reinventing the ship’s wheel than focusing on a productive, bountiful voyage to capture the next generation of shoppers.

mong those on this year’s Top 50 list are often unheralded grocers that continue to increase stores, sales and customer satisfaction in their respective local markets. One company in particular, Tewksbury, Mass.-based Demoulas/Market Basket (No. 27), after a period of traumatic upheaval during 2014 that saw the ouster and reinstatement of its CEO and guiding light, Arthur T. Demoulas, has spent the past year enjoying the fruits of its restored mojo — conjured from competitive pricing; an engaged, committed workforce; and spotless stores — in the relative obscurity it prefers on its home turf of Massachusetts, New Hampshire and Maine. Also fying under the radar, Asheville, N.C.-based Ingles Markets (No, 24), which operates in six southeastern states, posted record fscal-year core grocery sales growth, excluding gasoline, at the close of 2015, as well as continued sales growth for the frst quarter of fscal 2016. New CEO/ President Jim Lanning, an employee of the company since 1975, is poised to lead Ingles to “future growth, fexibility and development,” in the words of Chairman Robert P. Ingle II. Expansion may also be on the horizon for Springfeld, Mass.-based Big Y Foods (No. 40), which, according to a published report in its hometown paper, is looking to grow to as many as 150 locations over the next 20 years, both within its existing market area of Connecticut and Massachusetts, as well as further afeld within the New England region. New locations may feature elements of the chain’s prototype Fresh Acres concept, according to Mathieu L. D’Amour, the company’s newly minted VP, real estate and development.

Sunbury, Pa.-based Weis Markets (No. 31) recently enhanced its in-store and at-home marketing strategy through a newly formed exclusive alliance with Chicagobased global marketing execution frm InnerWorkings, which is collaborating with the grocer to develop marketing print strategies, point-of-sale displays, direct mail campaigns, and loyalty programs, along with the logistical elements behind these services. Te chain has also launched a shelf tag program, Nutri-Facts, that uses brightly colored icons on pricing tags to help shoppers easily identify foods that meet their unique health and lifestyle needs. Te regional retailer at press time had posted a 3.6 percent sales iincrease to $2.9 billion and unveiled a $140 million cap ex investment in 2016 covering m new stores, remodels, supply chain investn ments and continuing technology upgrades. m Williamsville, N.Y.-based Tops Markkets LLC (No. 30) has continued to invest iin its core upstate New York markets (its ffootprint extends to northern Pennsylvania aand western Vermont), opening ground-up aand remodeled locations tailored to “the history and personality of the surroundh iing areas,” as CEO Frank Curci noted last yyear on the occasion of the debut of two compact-format locations in the greater Rochester area. At press time, the chain had recently opened its 168th store, which includes a fuel station, in Westfeld, Pa. Grand Rapids, Mich.-based SpartanNash (No. 34) is set to bid farewell to longtime Chairman Craig Sturken, who is retiring and will be succeeded by President/CEO Dennis Eidson. PG

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

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Store of the Month

Ralphs, Los Angeles

You See L.A. Ralphs’ Westwood remodel boosts freshness for a diverse Los Angeles community.

by Jim Dudlicek

estwood is a densely populated and culturally diverse neighborhood in the Westside region of Los Angeles. Tis area is home to a vibrant arts community, upscale retail destinations and the University of California, Los Angeles. Te community is refected in the oferings and ambiance of Ralphs’ Westwood Village supermarket, which, following a 50,000-square-foot expansion last year, is the largest store in Southern California for the historic Kroger-owned grocery banner. “You’ve got a very diverse population in this area, culturally or otherwise,” Kendra Doyel, Ralphs VP of public relations and government afairs, says during PG’s recent visit to the store. “Westwood is really the heart of L.A., and everything is concentrated in this community.” Ralphs worked closely with local community organizations and residents to determine which new and expanded oferings, services and products would best meet the area’s needs. Based on shopper requests and input, the remodeled Westwood Village Ralphs has been uniquely designed to create an outstanding overall shopping experience. Shoppers now fnd an expanded selection of products and services, including an abundance of fresh produce; a fully stafed meat department; a fresh seafood department; a full-service bakery featuring fresh breads, rolls and desserts; a service delicatessen with fresh items for shoppers on the go; a full-service pharmacy; and a wide variety of organic/natural and gluten-free oferings. Continued on page 50

raiSinG the bar Cork & tap offers beer and wine with appetizers, cheeses and light meals. the store team (opposite page, from left) includes imelda Villegas, service deli manager; harutyun Shishikyan, comanager; and Lucia Solano-Quinones, district service deli/bakery coordinator.

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

Photos by Von McKinney

May 2016 | progressivegrocer.com |

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Store of the Month

Ralphs, Los Angeles

Continued from page 46

Occupying much of the new footprint is a vast food court featuring hot and cold oferings, RICH POURS a restaurant-size sushi bar, cusThe Westwood Village store tom sandwiches, pizza, entrées offers wines for and other fresh prepared foods. every palate and A wine and beer bar serves hot pocketbook. and cold appetizers along with drinks, while a juice bar whips up smoothies featuring organic and local ingredients. “I’m looking forward to showing the residents of Westwood our newly remodeled store and all it has to ofer,” says Don Jansen, a Ralphs team member since 1988 who was named Westwood’s store manager in May 2015. “Our goal is to be the best supermarket in the area by ofering our customers great service, selection and quality The magic in foods at exceptional value.”

this store is the people, focused on delivering a friendly shopping experience and great service.” —Kendra Doyel, VP of PR and government affairs, Ralphs

Green Room Doubling in size, by taking over the space vacated by a former Best Buy location next door, gave Ralphs plenty of room to boost the visibility of its fresh oferings. “You see everything from traditional produce to an expanded organic section,” Doyel says. Callouts like “ready to eat” and “ready to heat” for cut vegetables, an expanded cut-fruit selection, and “Authentic Asian Food” play up selections designed to address demands for convenience and authenticity, along with many local products. “We tell a little of the farmers’ stories,” Doyel notes. An expanded juice bar, trumpeting organic, Fair Trade and non-GMO ingredients, refects a “healthy California lifestyle,” Doyel says, with smoothies made to order and cross-merchandised with protein

boosters available as add-ins or for home use. An enhanced foral department, up front by the entrance, ofers grab-and-go arrangements and gifts, as well as a staf forist “who can do custom arrangements for weddings and funerals,” Doyel explains. Te fresh area also features a large bulk food section highlighted by a customer request: a fresh nut-butter machine. Te bins of fruits, nuts, snacks, candies, cofee, tea and spices are proving to be “very popular,” Doyel says. “We keep a close eye on this to make sure we’re giving customers what they really want.”

For All Tastes Westwood Village’s reimagined meat and seafood department has upped its game as well. From fresh and frozen, to organic and natural, to heat-and-eat entrées, there’s something for every demand. Te meat counter features a host of seasoned, marinated and value-added items, many called out as “great for grilling,” along with proteins less often seen, such as lamb and venison. Boldly lettered signs proclaim, “Prefer your fsh fried? Just ask — it’s free,” and “Easy-foryou Seafood” with side dishes and wine pairings suggested for diferent types of fsh. “One of my favorite things is they’ll season fsh for you, put it in a foil pouch and you take it home for the grill,” Doyel says. “We want to inspire customers to make that ‘what’s for dinner?’ question easier to answer.” Te store also calls out its sustainable seafood policy, which Doyel says customers feel strongly about: “Kroger has a long-standing commitment to sustainable seafood, and we want to make sure our PRIME DISPLAY Value-added items, many tagged “great for grilling,” are popular at Ralphs’ service meat counter.

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

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Store of the Month

Ralphs, Los Angeles

DELI-CASIES The food court includes custom sandwiches including grilled cheese, plus an organic salad bar and diverse hot selections.

Our goal is to be the best supermarket in the area by offering our customers great service, selection and quality foods at exceptional value.” —Don Jansen, store manager

customers know that.” Opposite the meat and seafood counters is a cooking demo station featuring a “recipe of the day” prepared each afternoon by a chef, adding an element of theater and ofering shoppers a chance to interact with the store’s culinary staf. Te demo station is adjacent to the store’s extensive wine and spirits department, which provides items for every price point, from entry level to premium vintages showcased in their own room. But the highlight of this area is Cork & Tap, a wine- and beer-tasting bar (the second such location for Ralphs) ofering spirits along with appetizers, cheeses and light meals from a tapas-style menu. “We’ll do beer and wine fights, simple tastings, pairings with a great menu,” Doyel explains. “We make sure we ft everyone’s palate and budget.” Craft beers, including numerous Californiamade brews, dominate the end wall of the wraparound beer section. For those in a hurry, the specially designated “Hydration Station” dispenses grab-and-go beverages like single-serve water, juices, wines and beer.

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

Café Society Westwood Village’s food court-style restaurant with seating is a frst for Ralphs. Te store is packed daily with hungry shoppers, work commuters, UCLA students and others partaking of made-to-order burgers, deli items (with prominent Boar’s Head branding), custom sandwiches (including “stupid good” grilled cheese, Doyel quips), fresh Italian and Mexican foods, pizza, salads, sushi, and desserts. Te large restaurant-style sushi bar, a focal point in the food court, is “always very busy,” Doyel notes, with sushi chefs preparing items to order alongside

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Ralphs, Los Angeles

SEA F

Store of the Month

FRO

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M SE EAT & AFO OD

PRODUCE

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ES H & J CUT UIC VE E G,

WINE CELLAR

JUICE BAR

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FLORAL FLORAL

EXIT SELF CHECK-OUT COIN STAR

BAKERY FROZEN BAKERY BREAD SLICER KIOSK BAKERY

SERVICE BAKERY

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

CIGARETTES

SELF CHECK-OUT

grab-and-go choices for those who can’t wait. Alongside an extensive organic salad bar, the “Chef on the Run” hot bar features regular favorites and rotating entrées and sides, including pot roast, lamb shanks, bourbon beef ribs and eggplant parmesan. A “Taste of Asia” end cap ofers graband-go rice bowls, with signage cross-promoting other Asian items throughout the store. “We’ve done this at a couple stores, and consumers tell us they really like it,” Doyel says. A sandwich counter ofers custom selections with a choice of bread and toppings, next to a station hawking “ooey-gooey” quesadillas in six varieties, including mashups like taco and Reuben, plus burritos and tacos. More choices abound: six burger varieties; chicken by the piece, meal or party pack, fried, baked or Mexican style; 10 kinds of pizza, whole, by the slice or catered for parties; and two Coke Freestyle machines. “You can be on a strict diet and eat here, or you can drown your sorrows,” Doyel remarks. Other unique food court oferings include “SlimSoul” bistro boxes and salads by “Biggest

BAKERY

Ralphs Westwood Village

SE AF O

M SE EAT & AFO OD

10861 Le Conte Ave. Los Angeles, Calif. Grand opening: Sept. 18, 2015

MEAT

SERVICE MEAT & SEAFOOD

Employees: 340

Total square footage: 93,400

AISLE 1 WINE WINE

AISLE 2 WINE WINE

DAIRY

LIQUOR LIQUOR

DAIRY

AISLE 3

DAIRY

AISLE 6 EGGS

DELI FOOD MIXERS

FROZEN FOOD

AISLE 4

DAIRY

LIQUOR LIQUOR

AISLE 7

LIQUOR BEER

BEVERAGE

Hours: 24 hours a day

DAIRY

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FROZEN FOOD

AISLE 5

FROZEN FOOD

AISLE 8 JERKY

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DRY FRUIT

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AISLE 10 FEMININE NEEDS LOTIONS SHAMPOO HAIRCOLOR

BAR SOAP WOMENS DEOD. COSMETICS

PHARMACY

ENHANCED WATER GALLON WATER SPORTS DRINKS PWD. DRINKS CAN JUICE

DIET VITAMINS ANTACIDS HEAD & COLD EYECARE 1ST AID ORAL CARE MENS DEOD./SHAVE

AISLE 11 BOTTLED JUICE SOFT DRINKS

DIAPERS BABY NEEDS BABY FOOD BABY FORMULA NAPKINS PAPER TOWELS LT. BULBS STATIONERY

AISLE 12

BATH TISSUE FACIAL TISSUE CAT SAND CAN/DRY CAT FOOD

BOOKS & MAGS

SOFT DRINKS PICNIC SUPPLIES PROMOTIONAL GREETING CARDS GIFTWRAP

AISLE 13 PROMOTIONAL

GREETING CARDS CANDLES PET SUPPLS. DOG TREATS CAN/DRY DOG FOOD LAUNDRY DETERGENT ADDITIVES BLEACH TRASH BAGS HARDWARE AUTO

PROMOTIONAL PANTRY ITEMS

AIR FRESHENERS DISH DETERGENT BROOMS/MOPS CLEANERS FOILS & WRAPS THERMOS CAKE MIXES GELATIN EZ FOIL CAN MILK BAKING NEEDS SUGAR

AISLE 14 AISLE 15

CHARCOAL/LOGS

COOKING OIL COCOA TEA

VINEGAR FILTERS

SPICES FLOUR SYRUP COFFEE

HOMEOPATHIC

COFFEE TEA BAKEWARE SMALL KITCHEN APPLIANCES

AISLE 16 FLATWARE KITCHEN TOWELS GLASSWARE/DINNERWARE PLACEMENTS

CHIPS COOKIES

LAUNDRY BAGS BATH TOWELS CAN NUTS POPCORN RICE CAKES FRUIT SNACKS PASTA SAUCE PASTA PACKAGED DINNERS STUFFING CAN PASTA

CANDY CAN MEAT

CAN BEANS CAN TOMATO CAN FRUIT GRAVY/SAUCES RICE DRY BEANS CAN FISH CAN SOUP KOSHER FOOD INTERNATIONAL FOOD ASIAN FOOD

WEIGHT CONTROL

AISLE 18 CAN VEGETABLES DRY SOUP

VITAMINS

AISLE 17

WELLNESS CENTER

CRACKERS

AISLE 19 GIFT CARDS

SALAD DRESSING CONDIMENTS OLIVES PICKLES P. B. & J. GRANOLA HOT CEREAL NATURAL CEREAL

HISPANIC FOOD CEREAL

BAKERY

BREAD GRAB & GO

YOGURT

BREAD

DELI

SNACKS

CHEESE SHOP

CHEF ON THE RUN

SALADS

SUSHI BAR

MORNING FOOD

AISLE 20 SPORTS BARS ARTISAN BREAD

SERVICE DELI

DELI ISLAND

May 2016 | progressivegrocer.com |

Store of the Month

DOUGH-RE-ME The bakery offers custom cakes, pies, bread and rolls, along with organic and free-from selections.

Ralphs, Los Angeles

Loser” celebrity trainer Jillian Michaels, exclusive to this store, in a dedicated case, and tortilla chips and salsa made by Homeboy Industries, a local gang reduction program with which Ralphs partners that trains exgang members to acquire such life skills as cooking and baking. “It’s the No. 1 chip and salsa in our stores,” Doyel notes. “We’re always looking for ways to help lift up the community.” The store also features a Murray’s Cheese counter, which has been popping up in many Kroger banner supermarkets across the country. The cheese shop offers more than 175 types of cheese — including dozens of local varieties — plus a wide selection of complementary specialty items, including crackers, dried fruit, and an olive and antipasto bar. Options are hyperlocalized, Doyel says: “The choices here are different than you’d see in, say, Orange County.” A dessert bar ofers self-serve frozen yogurt,

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gelato and caramel apples, with hand-dipped chocolate apples and pears a prominent specialty. Te bakery ofers cakes and pies whole or by the slice, and custom-decorated cakes for all occasions. As a further step toward meeting every need, the department posts its daily product count for organic, local and gluten-free items.

Making Magic Center store is highlighted by prominent shelf tags calling out products that are natural, organic and gluten-free, including Kroger’s Simple Truth brand. Westwood also features a dedicated Live Naturally wellness section ofering more than 3,500 natural items, among them vitamins, supplements, personal care, probiotics and beverages. Tis section, at the rear of the store, adjoins the 24-hour pharmacy — a key shopper demand, Doyel notes. Rounding out the store’s services: the Money Shop, which provides a variety of fnancial services, including money transfers, money orders, payroll and government check-cashing, bill payment, and pre-paid debit cards and phones; an upscale housewares section; a Starbucks café; free Wi-Fi; and a selection of UCLA spirit wear. In all, according to Doyel, Ralphs Westwood Village prides itself on ofering “unique items, [being] a price leader and making sure we have everything from kids’ lunches to gourmet meals.” Donna Giordano, president of Compton, Calif.based Ralphs, adds, “We’re excited about the new products and services we are ofering in our Westwood store, and we look forward to continuing our partnership with the community.” Part of that partnerships includes jobs: Te expansion saw ranks swell to 340 positions, including 150 new associates needed to deliver the market’s enhanced services. For Ralphs, a fxture in California retailing since 1873, the human touch is essential. “Te magic in this store is the people,” Doyel asserts, “focused on delivering a friendly shopping experience and great service.” PG

Feature

Category Management

CatMan

2.0

Introducing a new iteration of the business process, for a new century. By Gordon Wade

ategory management, one of the most successful business processes developed in the 20th century, is about to change. Te completely modernized version, CatMan 2.0, now being introduced to the industry, will dramatically impact consumer packaged goods retailers, manufacturers and solution providers, and provide a more relevant and seamless experience for the shopper. As with CatMan 1.0, CatMan 2.0 will continue to create comprehensive plans to meet shopper needs in a superior manner, ultimately creating better working relationships and business results for retailers and manufacturers. Category management will continue to be a holistic approach based on facts, insights, sound strategies and proven tactical models, but what will CatMan 2.0 mean for retailers’ businesses?

Why Change CatMan 1.0? CatMan 1.0 needed to be modernized because everything in the marketing environment has changed since the early 1990s, when CatMan 1.0 was developed. Specifc changes include: Data: Tere are infnitely more data — both qualitative and quantitative — than in the early 1990s. We have pointof-sale data by individual store location, down to the level of individual items. Household panel data are much more robust, refecting more than 100,000 panel respondents, thereby permitting much more granular analysis of particular value in calculating leakage between banners. Loyalty card data are now shared by retailers having nearly 50

percent of all-commodity volume in most categories. Other major retailers have developed surrogate loyalty data using charge cards or sophisticated basket analytics. A tsunami of data from social media is now available, along with various proprietary studies made possible by the ubiquity of addressable respondents of every imaginable description and the low cost of internet-driven studies. Analytics: In the early 1990s, when CatMan 1.0 was developed, analytics were relatively primitive. Time series data, which drive so much of today’s analytics, weren’t available in the abundance that they are today. Moreover, computer hardware and software were still challenged to make sense from the limited data then available. Today, laptop computers have infnitely more analytical horsepower then many mainframe computers in the 1980s. Software analytics packages have improved to the point where sophisticated multi-variate analysis revealing the relative response of multiple, simultaneous marketing stimuli can be purchased of the shelf. Presentations of remarkable sophistication can be assembled rapidly and then continuously updated by banner and category from multiple data sources. Retail Diversification: Supercenters have grown dramatically, and the dollar channel, hard discounters and warehouse clubs have also grown to complement traditional supermarkets and drug chains. Tere has also been explosive growth of online commerce, both of the pureplay variety and of click-and-collect services from existing brick-and-mortar retailers.

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

ROBUST PRODUCT PORTFOLIO Wide-ranging product portfolio to satisfy every taste and occasion.

VISION FOR GROWTH Actionable consumer insights that identify emerging opportunities.

HOLISTIC RETAIL SOLUTIONS Best-in-class category management, shopper marketing, and business analytics.

Jack Link’s® has all the resources to satisfy your craving for in-depth category understanding. We’ll serve up the insights and business solutions that really hit the spot.

CUTTING-EDGE INNOVATION Product platforms and merchandising solutions that meet evolving shopper needs.

Feature

Category Management

How Was CatMan 2.0 Developed, and by Whom? Under the leadership of the Category Management Association, a representative group of retailers, manufacturers and solution providers, as well as sales and marketing agencies, was assembled, both to oversee and provide input for CatMan 2.0. Participants met to identify the areas of CatMan 1.0 that needed to be updated and to begin the process of inputting data into each of the areas requiring improvement. The companies that assisted in the development of CatMan 2.0 are as follows:

Retailers

Manufacturers

7-Eleven

Church & Dwight ConAgra Foods McKee Foods Mondelez International Procter & Gamble

Ahold Sam’s Club Walgreens Walmart

Red Bull Reynolds Consumer Products Republic National Distributing Co. Dannon

Solution Providers and Sales and Marketing Agencies Acosta Sales and Marketing Brick Meets Click Decision Insight

Interactive Edge IRI JDA Kantar Retail

Learning Evolution Market Track McKinsey Periscope

Success Models: Category management practitioners have developed a more detailed knowledge of what works in assortment, pricing, in-store merchandising and promotion. Tese success models have become so ingrained in the category management practices of many retailers and manufacturers that practitioners hardly realize this knowledge didn’t exist as recently as fve years ago. Shopper Diversity/Empowerment: Today’s shopper is more diverse demographically and attitudinally than ever before. Importantly, today’s shopper is empowered with signifcantly more information about the choices available to meet her needs. Te ubiquity of internet-enabled information about virtually all aspects of any given category has revolutionized the marketing environment.

How is CatMan 2.0 Different? Most of the changes refect the enormous improvements in data and analytics; some refect whole new process steps that were either ignored or underdeveloped in CatMan 1.0. Tere’s also a big diference in presentation format. Unlike CatMan 1.0, which was presented in a static printed monograph of some 80plus pages, CatMan 2.0 is ofered in a more contemporary digital format that can be keyword-searched

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

by practitioners. Listed below are a few examples of the scores of improvements in CatMan 2.0: Process: CatMan 2.0 adds three important steps to the original seven-step process: (1) an upfront internal alignment step discussed below, (2) a new “assessment why” section addressing the development of shopper insights, and (3) a new tactical step described as shopper marketing and the path to purchase. In addition, the new process dramatically enhances many of the practices in the familiar steps of assessment “what,” strategy and deployment, as well as suggested approaches to developing the ROI of category management. Internal Alignment: CatMan 2.0 addresses this issue by creating an entirely new process step that precedes the collaboration between trading partners to create a category plan. In this section, issues are identifed around which both retailers and manufacturers must be aligned internally to be efective partners in developing winning category plans. Assessment “Why”: CatMan 2.0 includes the concept and process for developing shopper insights, or the “why” driving shopper actions during the path to purchase. Tis addition provides material for the development of robust strategies and shopper marketing programs. Shopper Marketing and the Path to Purchase: Te relatively recent growth of shopper marketing as a marketing imperative for practitioners has confused the community, especially the relationship between category management and shopper marketing. CatMan 2.0 emphasizes that shopper marketing can only succeed if it’s integrated into the retailer’s annual category plan as a tactic with explicit activities executed in-store. Deploying and Executing the Plan: CatMan 2.0 ofers organizational and process improvements to encourage efcient and efective deployment of the category plan, down to the level of the store. The ROI of CatMan: Te single most frequently asked question of the Category Management Association (CMA) is, “What is the ROI of category management?” Answering this question in CatMan 2.0 is even more imperative because of the growth of “zero-based budgeting,” a management approach that questions any personnel or program factor that adds cost to the overall business model. PG Gordon Wade is SVP of category management best practices for the Minneapolis-based Category Management Association.

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Prepared Foods

Fresh Food

Fresh Views

on the Periemeter Retailers need to find the grocerant solution that’s best for them. By Kathy Hayden

he business of food has moved far beyond providing meals. From food trucks to chef-branded food halls and on-demand delivery, food takes up more of consumers’ time, money and imagination. At the same time, people are cooking less and less. Somewhere in this new food frontier, traditional grocery stores need to stake their claim, and many experts see grocerants or prepared food sections as the gateway to supermarkets’ future. A report titled “Te Sophistication of Supermarket Fresh Prepared Foods,” from Food Marketing Institute (FMI), shows that the category grew by an annual rate of 10.4 percent between 2006 and 2014, making it one of the highest-performing segments in the entire food industry. Te same research showed that only 8 percent of responding supermarkets reported total store sales growth of more than 5 percent in 2014; 69 percent reported that same level

of growth (or much higher) in their prepared food departments. Not coincidentally, 88 percent of banners now employ a corporate executive chef. Beyond food upgrades, more attention is being paid to physical spaces and experiences: 23 percent of responding supermarkets reported having remodeled deli departments in the past three years, adding new features such as café seating, Wi-Fi and adult beverage sampling. Increasingly, these proft centers are being managed independently of deli sections: 43 percent of responding supermarkets indicated that they manage separate fnancial reports for prepared foods. “Competition for food dollars is ferce,” notes Lauren DeMaria, chef and director of culinary and business development at CSSI, a Chicago-based marketing and culinary consultancy. “Even if people have their dream kitchens, they have no time to cook, but they want to eat the best food, both at home and when eating out. Tis makes prepared meals and almost-prepared meals appealing.” May 2016 | progressivegrocer.com |

Fresh Food

Prepared Foods

Levels of Preparedness Not all grocerants are created equally, nor should they be. In a recent research report, “Prepared Foods: Te State of Fresh,” Nielsen researchers analyzed how a three-tiered approach to planning a prepared food program could bring success to retailers of any size. Gillian Mosher, integrated marketing communications manager at Schaumburg, Ill.-based Nielsen, notes that retailers must continue to close the gap between restaurants and in-store oferings. Te gap isn’t one that can be flled by food alone. She sees the quality or amount of options as part of the equation, as well as the experiences around the purchases, or making it easy for consumers to get the same on-trend favors and fresh tastes in-store as they would in a restaurant. “Te [deli] experience all begins with understanding your consumer and choosing the right deli strategy by weighing the needs and circumstances of a store’s primary consumers, with specifc capabiliWe see a ties,” Mosher says. “It’s OK not having all the bells capacity for and whistles, but knowing how to still stay relevant grocery stores with your consumer is imperative.”

to make more money by combining the existing perimeter with existing in-store equipment to create fresh prepared and packed meals.” —Gerry Hays, DinnerCall

Outsourcing Some Options Stores without the capability or demand for a robust deli prepared food program should take a level-one approach to managing what they have. Mosher sees these stores as better positioned to focus on basic staples, like deli service cheese or deli bulk meat. At this level, it also makes sense for stores to partner with other businesses to enhance their fresh prepared food oferings. “In traditional grocery stores, there’s still a share of stomach that isn’t being served in the deli or frozen food aisles — we’re right in the middle of those two,” explains Rob Povolny, founder and president of Tampa, Fla.-based East Fresco Inc., a company that ofers no-cooking, no-cleanup, heat-and-eat meal solutions for retailers and customers in need of quick options. “Our meals check in at 440 calories or under. Te diference is the freshness and the great taste. Tey are portion-controlled, favorful, restaurant-quality meals. Tese are fresh foods with a 12-day shelf-life. Customers can buy several for a busy week.” Povolny points out that his meals aren’t meant to replace cooking; rather, they’re a better convenience option, available at traditional supermarkets, for

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

those times when people can’t cook, don’t have time to cook and want to avoid takeout. East Fresco meals are merchandised in dedicated branded coolers in convenient locations like end caps and near registers. Now featured in 20 stores, including several Winn-Dixie locations, Eat Fresco focuses on suburbs, where people still depend on supermarkets, as opposed to cities, where meal delivery businesses like San Francisco-based Munchery are really taking of and shopping patterns are less dependent on traditional supermarkets. “Tese are fresh meals made with regional food,” Povolny notes. “As we grow, we will take a regional approach to building hubs where people already shop.”

The Specialization Level On Nielsen’s next level are stores with the demand and capability for a robust deli. Here, the focus needs to be on balancing deli performance with total store needs so that busy trafc times are adequately stafed and associates are skilled in leveraging prepared food sales with center store sales potential. With a department so often specialized, it’s crucial to invest in the right staf and training to ensure that a store experience has something that’s worth a repeat visit, Mosher explains. For instance, highly trained staf can tie prepared food to center store purchases by ofering “next-day menu” ideas. Other experts also stress the importance of accentuating the positives and playing to existing strengths. Last October, Tyson Foods’ Tink Tank: Te Deli of the Future gathered food industry experts with retail, restaurant and marketing expertise to examine what the future holds for grocerants. Participant Jeremy Johnson, director of education at the Madison, Wis.-based International DairyDeli-Bakery Association, notes that most prepared food sections are known for rotisserie chicken and shouldn’t be afraid to really own that. He urges supermarkets to try more on-trend favors and spice Continued on page 69

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Leveraging Competitive Benchmarks for Higher Store Sales As competition for consumer grocery dollars becomes more intense, brand promise and differentiation is even more critical to your success in earning the loyalty of every shopper. Delighted shoppers are more likely to recommend your brandâ&#x20AC;&#x201D;and much less likely to switch primary grocers. But according to a recent research study conducted with over 10,000 U.S. grocery consumers, fewer than half of consumers say their primary grocer delivers a great experience, and more than 1 in 10 grocery shoppers had a disappointing experience at the primary grocer they visited most recently. That leaves grocery brands vulnerable to competition and the draw of a great promotion. In-store measurement programs that provide insight at the department level can help your stores execute on the 6 key areas that research shows are most important to grocery customers.

Executing on these 6 key areas in combination will delight consumers: Cashier courtesy Specialty department service

Store cleanliness

Overall Satisfaction

Ability to fnd items

Item availability Checkout speed

For most recent shopping experience at primary grocer, satisfaction with: (% top box)

52% 52%

Cashier courtesy Store cleanliness Ability to fnd the items you wanted to buy Availability of the items you wanted to buy Checkout speed Service provided by specialty departments (bakery, deli, meat, seafood, etc.) ADVERTORIAL

45% 42% 39% 38%

For real life examples of how important these areas are to consumers, look no further than Publix, Wegmans, and Trader Joe’s, which lead on most of these attributes—and they are the top brands for composite loyalty, according to Market Force data.

customer satisfaction ratings. In fact, the 2 areas that consumers rated lowest overall—checkout speed and specialty department service—offer a prime opportunity to differentiate your brand from your competitors.

With more than one-quarter of consumers reporting that their primary grocery store did nothing particularly well, even small improvements in execution in these 6 areas can lead to big gains in

In the increasingly crowded feld of retailers providing grocery products, customer satisfaction is the one measure that can tell you if you’re delivering on your brand promise or falling short.

Top customer satisfaction = top supermarket brand loyalty (% top box)

Cashier courtesy

Store cleanliness

79%

78%

Trader Joe’s

Publix

68% ALDI

Ability to fnd items

83%

78%

75%

Publix

Wegmans

Trader Joe’s

Item availability

62%

56%

54%

61%

60%

Publix

Wegmans

Trader Joe’s

Publix

Wegmans

Checkout speed

52% Hy-Vee

Specialty department service

58%

55%

54%

Publix

ALDI

Wegmans

66%

63%

Publix

Wegmans

56% Hy-Vee

About Market Force Market Force Information® (Market Force) provides grocery and convenience store retailers with solutions to measure operational excellence and customer experience at every location. Solutions enable brands to identify the actions required at the store level to increase customer loyalty and improve basket size, household spend, and sales growth. You can learn more about the research or Market Force at www.marketforce.com or call 1-877-329-9621. ADVERTORIAL

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Prepared Foods

Fresh Food

noted that there’s no one-size-fts-all success story for grocerants. “Tere’s plenty of room to specialize and to fnd a value-added role that will build loyalty shoppers,” DuBois says. “We will continue to see sophisticated, efcient and smaller storefronts that emulate specialty foodservice — even food trucks within stores.” Continued from page 64

rubs on chicken, and to take it of the bone for a great sandwich program, a move Subway recently made. Another idea: make “spit-grilled” chicken the center of a noodle bar that also provides fresh greens, herbs and sauces from columns of choices and upgrades to emulate the fastest-growing categories in the fast-casual restaurant segment. Tis simple yet customizable approach follows what consumers want. More and more, meals are getting really specifc, CSSI’s DeMaria points out. “People don’t go out for Mexican food, they go out for tacos. Or they go to a place that just serves ramen. Retail can have a range of these specifc foods.” A “Top Trends in Fresh” ongoing webinar series presented by Chris DuBois, senior principal at Chicago-based Information Resources Inc., and Rick Stein, VP of fresh foods at Arlington, Va.-based FMI, also

Top-level Treatments On Nielsen’s third level of grocerants are stores with even more capabilities and well-established prepared food programs. Here, it’s important to build the depth and breadth of incremental categories to compete most directly with foodservice. “Better food is a given. People want easy meals, but not simple favors,” Stein said during the “Top Trends in Fresh” webinar. “If you’re ofering meatloaf, it can’t be the Tuesday-night meatloaf people recognize from when they were growing up. You need artisan ingredients, a mix of proteins, and restaurant-quality favors and sauces.” Mosher sees convenience and variety as important points of diferentiation at this level, and even here, outsourcing some of the “bells and whistles” is another way to build a grocerant program and meet new consumer demand. For instance, as dozens of meal kit

It’s OK not having all the bells and whistles, but knowing how to still stay relevant with your consumer is imperative.” —Gillian Mosher, Nielsen

May 2016 | progressivegrocer.com |

Fresh Food

Prepared Foods

delivery businesses are starting up and circumventing grocery shopping altogether, some retailers like Carlisle, Pa.-based Giant Food Stores are ofering their own kits. Other stores are working with startups that are making meal kits more grocerant-compatible. Handpick, a San Francisco-based meal kit delivery company founded by Payman Nejati, harnesses Big Data to put 80 million internet-

generated recipes together with about 20 existing grocery SKUs to create a meal kit solution. Purchasing a Handpick kit means buying a pack of traditional supermarket items and the recipes to make three original meals. Handpick ofers a solution that doesn’t require repackaging or third-party couriers, provides three meal ideas for 15 to 20 full-sized retail SKUs, and leverages pre-existing fulfllment systems. Te kits start at less than $5 per meal, which is about half the price of popular meal subscription services. “If customers can get better graband-go meal kits with their groceries, they won’t need third-party kit delivery,” Nejati notes.

Keeping your perimeter fresh…

...one pouch at a time. Visit Robbie’s Booth #4901 at IDDBA to learn our newest way of keeping it fresh! Mention this ad to receive a free copy of the latest Deli/Bakery Playbook!

Meeting People Where They Are Another grocery-store-based business addressing the meal delivery trend is Indianapolis-based DinnerCall, a new app that allows users to search and pre-order prepared meals from local stores. Customers can order via the DinnerCall native app, arrange a pickup time and pay using smartphones. Users call when they reach the store, and orders are delivered curbside. DinnerCall President Ashton Chafee and CEO Gerry Hays see the pre-sell and external engagement as crucial elements of their startup. “Supermarkets have had prepared meal replacement options since the ’90s, but there’s also been a lack of merchandising and marketing, leading to money loss and food waste,” Hays explains. “Te beauty [of DinnerCall] for retailers is they get the money upfront and capture purchase intention, which eliminates guesswork and food waste. We see a capacity for grocery stores to make more money by combining the existing perimeter with existing in-store equipment to create fresh prepared and packed meals.” For customers, DinnerCall recognizes that traditional meal shopping and preparation can be a lot of work and don’t always ft the workday world. Ordering call-ahead meals is one way grocery stores can provide the convenience, consistency and afordability that people need from their grocery stores, now and well into the future. PG

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2016 Retail Bakery Review

Bake Me Happy

In-store bakeries cook up new ways to boost sales, attract business. Analysis by Bruce Horovitz | Research by Debra Chanil

ever underestimate the power of the American sweet tooth. In tough economic times, when instore bakeries — by all rights — should be shrinking, they stand ready to grow: Roughly half — a full 47.9 percent— of Progressive Grocer’s 2016 Retail Bakery review panelists expect their bakery sales to increase over the next year, according to results from the annual exclusive survey. Never mind that a nation of nutritionally focused consumers are increasingly seeking foods that are healthier, lower in calories and made with less sugar: When it comes to visiting their local supermarkets,

Which of the folloWing best describes your in-store bakery program? Multiple responses accepted

current year

year ago

part of a “one-stop-shopping” format

70.3%

50.0%

image builder

62.5

33.3

basics/necessities

60.9

29.2

destination department

57.8

50.0

Source: Progressive Grocer Market Research, 2016

May 2016 | progressivegrocer.com |

2016 Retail Bakery Review

Bakery sales change 2015 versus 2014

Bakery Department performance current year

year ago

gross margin

45.5%

45.2%

percent of sales from self-service Bakery

70.7%

72.3%

1,420

1,310

5.8

6.0

30.5%

30.1%

7.3%

7.1%

266

256

average size of Bakery Dept. (sq. ft.) full-time equivalent employees per store Bakery Department laBor as percent of sales Bakery Dept. shrink as a percent of sales Bakery skus

Increased

40.3%

6.9% Source: Progressive Grocer Market Research, 2016

expecteD same-store sales change for 2016 Increased

Multiple responses accepted

celeBration cakes

68.4%

53.2%

seasonal specialties

61.4

48.9

signature/specialty items

56.1

48.9

gluten-free options

47.4

48.9

single-/smaller-portion proDucts

45.6

66.0

inDulgent proDucts

42.1

34.0

Brownies

42.1

55.3

whole grains

36.8

34.0

sugar-free options

35.1

31.9

environmentally frienDly packaging options

28.1

17.0

gourmet muffins/scones

26.3

48.9

other

12.3

4.3

Source: Progressive Grocer Market Research, 2016

consumers also want to see a viable fresh bakery section. Perhaps that’s why nearly two-thirds of bakery executives surveyed in this year’s “state of the in-store bakery” study said they viewed their store bakery section as an important “image builder” for the store — roughly twice as many as last year. To be sure, when it comes to the bakery department, image is everything. Even customers who don’t shop the in-

52.8%

3.6%

ranking of hottest growth area for in-store Bakery proDucts year ago

Stayed the Same

net change (%)

Source: Progressive Grocer Market Research, 2016

current year

Decreased

46.6%

Stayed the Same

47.9%

3.4%

net change (%)

5.5% Source: Progressive Grocer Market Research, 2016

store bakery section seem at least to like knowing that it’s there, according to the bakery executives who responded to PG’s annual bakery category research report, which monitors the attitudes, views and insights of retail bakery executives from coast to coast.

Going Steady Maybe that explains why some chains are ramping up the size and space of their in-store bakeries. At East Windsor, Conn.-based Geissler’s Supermarket — a seven-store independent with six stores in Connecticut and one in Massachusetts — all of its stores have increased the size of their bakeries by at least 100 square

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

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in Houston, June 5-7, booth #3321

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2016 Retail Bakery Review ofered more items, too, with an average 266 SKUs last year, versus 256 the year before. Nationally, in-store bakeries will continue to grow through the end of this decade, the International Dairy-Deli-Bakery Association (IDDBA) forecasts. In-store bakery sales will approach $18.4 billion by 2020, a 45 percent increase over 2010, the Madison, Wis.-based trade group estimates.

feet, notes Jim Williams, bakery manager. “Te bakeries are seeing pretty steady business,” Williams says, so it was time to enlarge. Underscoring fndings that in-store bakeries matter, department sales topped $13.54 billion in 2015 — up 3.6 percent from the year before, according to the study. Tere were 28,500 in-store bakeries last year with average weekly sales of $6,850, or about $356,175 per store annually. Average gross margin at in-store bakeries was 45.5 percent last year, while the average size of the in-store bakery was on the rise, jumping to an average 1,420 square feet in 2015, compared with 1,310 square feet the year before. Each in-store bakery averaged 5.8 employees per store. Tey

What Shoppers Want When it comes to in-store bakeries, it seems that consumers increasingly want to have their cake and eat it, too. Bakery shoppers want a broad selection, from decadent to better-for-you choices. Most importantly, they want the convenience of buying fresh baked goods at the same place where they buy their mangoes, meat and milk. To that end, a whopping 70.3 percent of bakery executives surveyed described their in-store bakeries as an important part of their one-stop-shop oferings. Interestingly, many executives in this year’s study were increasingly confdent that some shoppers come to their stores specifcally for the bakery, as evidenced by the 58 percent who considered their in-store bakeries destination departments. Executives also weighed in on the bakery section’s hot growth areas in PG’s bakery study, data for which were gathered via one-to-one input of bakery executives responding to the annual survey, felded in early 2016.

Does your bakery Department offer signature proDucts? 19.3% no

for those offering signature items 26.7% 55.6%

80.7% yes

42.2%

a year ago

Baked in-house

74.6% Yes 25.4% No

Baked to spec and exclusive to your store/chain A supplier’s product with your store’s label

Source: Progressive Grocer Market Research, 2016

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

EXCITING THINGS ARE HAPPENING!

WE’RE EXPANDING! You’re going to notice some changes at 5 Generation Bakers. Our new, state-of-the-art facility will be up and running in May with new equipment, more efficient production and a deepened commitment to food safety. That means improved quality and consistency in every loaf of our bread. But one thing that hasn’t changed is our promise to make the best cinnamon swirl breads on the market. Delicious, all-natural ingredients and our signature cinnamon taste in every bite. You’ll love it… guaranteed! Learn more at 5generationbakers.com. Visit us on facebook and instagram.

www.5generationbakers.com, scott@5generationbakers.com

2016 Retail Bakery Review Best-selling Bakery items current year

year ago

Breads

61.2%

66.0%

cakes

46.3

55.3

doughnuts

44.8

34.0

40.3

36.2

rolls

22.4

27.7

Pies

17.9

8.5

Bagels

16.4

6.4

danishes/sweet rolls

16.4

6.4

cuPcakes

14.9

23.3

muffins

13.4

19.1

artisan Breads

11.9

6.4

3.0

4.3

scones

Source: Progressive Grocer Market Research, 2016

Checking in once again as the hottest growth products: celebration cakes and seasonal specialties that bakeries rightly promoted front and center around holidays like Valentine’s Day, Mother’s and Father’s Days, and the Fourth of July. Just ask Debbie Burkewitz, assistant bakery manager and cake decorator at a Price Chopper store in Derby, Vt. “Every holiday, we sell a lot of themed cakes and cupcakes,” says Burkewitz. “People seem to like the specialty items” during holidays better than the everyday staple items, she adds. As well as surging requests for more sugar- and glutenfree items, Burkewitz notes that there’s another hot growth area people are increasingly referencing: complete nutritional information on all bakery items. “Some of the things we make in the store don’t have full nutritional labels,” she points out. Tis year’s research bore out Burkewitz’s observations, with 47.4 percent of bakery execs citing gluten-free as a hot growth area for their stores. At Geissler’s, however, Williams says that older customers in particular are requesting smaller or singleportion desserts. Just as important, he adds, is the growing number of requests for organic and natural breads. Te chain now carries some all-natural bread lines, he observes.

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

Bakery Department Category performanCe Total U.S., 52 weeks ending Feb. 27, 2016

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Growing the Future Industries head to Houston for IDDBA’s 2016 Dairy-Deli-Bake. By Lynn Petrak

he future is now in the dairy, deli and bakery departments — and it’s young and demanding. As research from the 2016 “What’s in Store” report from the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA) shows, the Millennial generation of consumers is keenly interested in where their food comes from, seeking out both recipes and grab-andgo solutions, and is signifcantly more likely to shop the prepared food department than Baby Boomers and Gen Xers. To provide what this pivotal group of consumers wants — and simultaneously deliver on the evolving needs of all demographics — the industries will gather to share ideas, innovations and insights at the world’s largest show of its kind, the 52nd annual Dairy-Deli-Bake Seminar & Expo, taking place June 5-7 in Houston. “Tis year’s Dairy-Deli-Bake Seminar & Expo theme is ‘Growing the Future’ because that’s what we’re trying to help the dairy-delibake community do,” says IDDBA President and Michael J. 2016 Dairy-Deli-Bake CEO Eardley. Seminar & Expo Te depth and breadth of oferJune 5-7, 2016 ings will refect the George R. Brown diferent interests Convention Center and needs of Houston those in the dairy, To register, visit: deli and bakery https://www.iddba.org/ industries, spanregistration.aspx ning supermarket IDDBA phone: 608-310-5000 buyers, merchanEmail: iddba@iddba.org disers, directors Save the Date: Future and executives, Dairy-Deli-Bake Events brokers, distributors, wholesalers, June 4-6, 2017, Anaheim, Calif, and manufacturJune 10-12, 2018, New Orleans ers. Attendees

will gain insight from a diverse lineup of featured speakers, ranging from comedian Jerry Seinfeld to chef and raconteur Anthony Bourdain to Supermarket Guru Phil Lempert, in addition to focused topics from several seminar presenters. Dairy-Deli-Bake guests can get a start on the future by walking through the Show & Sell Center, which features the latest products and merchandising concepts designed to spur shopper sales and loyalty. At this year’s expanded IDDBA Expo, participants can view a plethora of foods, services and concepts at more than 1,900 booths. In between presentations, workshops and booth visits, attendees can take advantage of networking opportunities at the event, both on the expo foor and beyond it, via the myIDDBA app, which connects professionals before, during and after the show. Exploring and planning for the future comes at a time of defnite dynamism within the industry. According to the “What’s in Store” report, total deli dollar sales grew 27 percent from 2010 to 2014, while the in-store bakery market is expected to skyrocket 45 percent from 2010 to 2020. In keeping with that dynamic, Eardley expresses optimism about 2016 Dairy-Deli-Bake Seminar & Expo. “Our show foor is sold out, and we’re on track for an attendance record,” he declares. “With the new products that our exhibitors will bring, the new merchandising that our Show & Sell team will create and the new ideas our seminar speakers will deliver, 2016 has all the makings of the best IDDBA show ever.”

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

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Dear Dairy-Deli-Bake Seminar & Expo Attendees and Exhibitors

elcome to the show! Te George R. Brown Convention Center is an amazing venue. And since Texas is my adopted home state, I’m excited to see so many important people in Dairy-Deli-Bakery here in Houston. It’s a great city with great facilities. We’ve added a few things this year, so be sure to pick up your badge early and join us on Saturday for the IDDBA Welcome Party. Enjoy some food and drink while you meet with your colleagues to kick of this year’s show. I believe promoting the growth and development of our products in the food industry is about education, and it is about building relationships. Tere is no better place to do both than Dairy-Deli-Bake Seminar & Expo. We’re driving some important educational initiatives that show attendees can expect to see throughout this three-day event: Our Safe Food Matters! program on allergens. Exploring ways technology can help make omnichannel shopping easier for suppliers, retailers and shoppers. Leveraging the key connections between products throughout the store to increase sales in dairy, deli, bakery, cheese and foodservice. Developing initiatives to show career opportunities in our areas to a new generation of food lovers.

Taking our show and using its strength to build a synergistic community of dairy, deli and bakery professionals committed to the future growth of the industry. Expect to see these themes on the seminar stage, in the Show & Sell Workshop, and on the show foor. And don’t miss the New Product Showcase — the easiest way to see hundreds of new items in one place. We’ve worked to ensure all attendees have something directly applicable to their jobs to take away. Be sure to use the myIDDBA app to access all show information, communicate with other attendees and even vote for your favorite cake decorator in the Cake Decorating Challenge. Giving you, the attendees, a voice will bring another level of excitement, interactivity and fun to the show. One of the best things about IDDBA is the relationships it fosters between people. Dairy-Deli-Bake Seminar & Expo is about buying and selling, but it’s also about teaching and telling. It’s about building a community focused on learning, sharing and growing. Have a great show! Michael J. Eardley President and CEO, IDDBA

IDDBA’s Dairy-Deli-Bake 2016 Speakers

f the keynote presentations at the annual Dairy-Deli-Bake Seminar & Expo are the meat in the sandwich of the event, 2016 is lined up to be another triple-decker with some real bite. Tis year’s presenters bring unique insights to attendees, given their expertise in a host of issues and topics that tie in one way or another back to the food industry. Leadership, creativity, hard work and a vision for growing the future are common attributes among the featured seminar speakers. “Te seminar portion of the event is about growth, both personally and professionally,” explains IDDBA President and CEO Michael J. Eardley. “We understand that our audience is not what it was a few years ago, and we’ve worked to develop a speaker lineup that will appeal to a broad crosssection of our evolving attendee base.” Tis year’s speakers include: Jerry Seinfeld “So the Other Day I Went to the Grocery Store and … Yadda Yadda Yadda” Some funny business is coming to this year’s Dairy-DeliBake in the form of comedian Jerry Seinfeld. Te standup

comedian and star of TV’s long-running “Seinfeld” show will share his own observations as a supermarket shopper and consumer. In between some from-the-gut laughter, attendees will learn from someone else’s gut feelings about buying from today’s dairy, deli, bakery and prepared food departments. Lidia Bastianich “Lidia Bastianich & Eataly: An Experience of Italian Food and Culture” Chef and cookbook author Bastianich, who has become synonymous with Italian cooking both at home and away from home through the Eataly concept combining in-house restaurants and markets, will explore and explain everpopular Italian cuisine. Workshop participants will get her take on how that, too, is evolving with the times, guided by consumers’ palates. Phil Lempert “Focus on Allergens: A Matter of Trust” Phil Lempert, also known as Te Supermarket Guru, will discuss the crucial issue of consumer trust in supermarket

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

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Dairy-Deli-Bake Seminar & Expo Schedule at a Glance Sunday, June 5, 2016

deli, bakery and prepared food departments, particularly and specifcally when it comes to concerns about food allergies. In this session, he will provide insight into consumers’ views on whether their stores’ allergy-free claims inspire confdence. A prolifc author and speaker with 25 years of analyzing industry trends and consumer behaviors, Lempert is a trusted source for customers and supermarket leaders alike.

Seminars 8 a.m.-8:30 a.m.: John Cheesman, Chairman’s Address 8:30 a.m.-8:55 a.m.: Phil Lempert, Focus on Allergens: A Matter of Trust 8:55 a.m.-9:20 a.m.: Sherry Frey, Merchandising, Marketing, and Innovating for Entertaining Occasions 9:20 a.m.-10 a.m.: Lori Greiner: Imagination and Innovation: Cultivating the Ability to Create 10 a.m.-11 a.m.: Jerry Seinfeld: So the Other Day I Went to the Grocery Store and … Yadda Yadda Yadda

Sherry Frey “Merchandising, Marketing and Innovating for Entertaining Occasions” As SVP at Nielsen, Sherry Frey specializes in understanding products and their relationships with consumers. In this session, she shares ideas based on years of gleaning shopper intelligence on what types of products appeal to shoppers buying for special occasions, whether for a Fourth of July backyard bash, holiday celebration or small dinner party with friends. She will provide tips on how to merchandise and market for occasions throughout the year.

Show & Sell Workshops 11:30 a.m.-noon: Lidia Bastianich’s Italian Regional Cooking Demonstration noon-12:30 p.m.: Lidia Bastianich & Eataly: An Experience of Italian Food and Culture 1 p.m.-1:30 p.m.: FSMA: Understanding FSMA Rules & Regulations 2 p.m.-2:30 p.m.: Norman Mayne: Small Business Survival 3 p.m.-3:30 p.m.: Loretta Carey: Understanding Menu Calorie Labeling 3:45 p.m.-4:15 p.m.: Phil Lempert: Focusing on Allergens with the Supermarket Guru 4:30 p.m.-6 p.m.: Max McCalman: Specialty Cheese — A Profit Powerhouse You Can’t Afford to Ignore

Lori Greiner “Imagination and Innovation: Cultivating the Ability to Create” Lori Greiner, an innovator, author and star of the popular show “Shark Tank,” knows a good idea when she sees one. Her ability to recognize the power and potential of a new product or concept stems from her own background as an inventor — over the years, she has created more than 400 products and holds 120 U.S. and international patents. In this session, Greiner will share her belief in honing instincts to determine what customers want and how to give it to them.

MOnday, June 6 Seminars 8 a.m.-8:40 a.m.: Harold Lloyd: Ready? Set. Goals! 8:40 a.m.-9:20 a.m.: Michael Eardley: Growing the Future: What’s in Store 9:20 a.m.-10 a.m.: Anthony Bourdain: In His Own Words and on His Own Terms 10 a.m.-11 a.m.: Simon Sinek: Leaders Eat Last: Why Some Teams Come Together and Others Don’t Show & Sell Workshops noon-12:30 p.m.: Anthony Bourdain: Meet Bourdain: Food Discovery, Enjoyment and Sociability 12:45 p.m.-1:15 p.m.: FSMA: Understanding FSMA Rules & Regulations 1:30 p.m.-2 p.m.: Harold Lloyd: S.M.A.R.R.T.E.S.T. Goals! 2:15 p.m.-2:45 p.m.: Loretta Carey: Understanding Menu Calorie Labeling 3 p.m.-3:30 p.m.: Joshua Swanson: Should Your Deli Have a Hashtag? 3:45 p.m.-4:15 p.m.: Mary Kay O’Connor: Safe Food Matters! Focus on Allergens

Harold Lloyd “Ready? Set. Goals!” After meeting retail managers who can’t seem to get enough things done on time, author, educator and presenter Harold Lloyd developed a system to help teach them how. Lloyd’s defned set of goals, dubbed S.M.A.R.R.T.E.S.T., is designed to help managers provide tangible takeaways to improve performance and enhance productivity. Te prolifc writer and speaker — he has created 30 top-rated seminars and penned two Amazon.com “5 Star”-rated books — has been a popular draw for Dairy-Deli-Bake attendees for more than 20 years. Michael J. Eardley “Growing the Future: What’s in Store” IDDBA President and CEO Michael Eardley, whose supermarket industry career began in third grade at his family’s grocery store, is adamant about the importance of staying current and raising expectations to the highest level. Trough personal observation and discussion with other leaders, Eardley has identifed six key infuencers that make a diference in the industry. In this session, he’ll discuss the infuencers of food safety, technology, people and community.

TueSday, June 7 Seminars 8 a.m.-8:40 a.m.: ED Talks 8:40 a.m.-9:20 a.m.: Randi Zuckerberg: Navigating Tech, Digital, Social and Beyond 9:20 a.m.-10 a.m.: JJ Watt: Dream Big, Work Hard, Do Good

Anthony Bourdain “Bourdain: In His Own Words and on His Own Terms” Host of the popular program “Anthony Bourdain: Parts Unknown,” the chef and author will share some of the candid, witty and insightful stories that propelled him to fame in his books, TV shows and writings, and talk about how to connect with today’s consumers and their almost insatiable taste for new eating experiences.

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

A new drink designed to provide complete and balanced nutrition with simply 9 ingredients plus a blend of vitamins & minerals. This nutritional drink appeals to the 50+ year old consumers who prefer simple products with fewer ingredients, driving adult nutrition category growth.

Artwork subject to change

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Eat, Browse and Learn at the Show & Sell Center

hat if almost all industry innovations could be under one roof, with those on hand who can speak to new products, merchandising ideas, live demonstrations, takeaway tools and research? For the most part, they will be at the 10,000-square-foot Show & Sell Center at 2016 DairyDeli-Bake Seminar & Expo. Te Show & Sell Center is a hub of activity, akin to a grown-up show-and-tell for dairy, deli, bakery and prepared food professionals. Attendees will gain a variety of new ideas for merchandising cheese, cakes, bakery, deli and meals, from the role of cakes in life celebrations, to the focus on ancient grains, to the view of cheese as a comfort food, among other topics.

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Off the Floor!

LARGE SELECTION OF BASES

STORAGE / DUNNAGE RACKS

PALLET GUARDS

END CAP DISPLAYS

www.masonways.com

Te future of meals available in supermarkets will be highlighted, including grocerant piazzas, ethnic-inspired rotisserie meals, sous vide solutions and blast-chilled entrées. Te 2016 slate of Show & Sell Center workshops runs the gamut of subjects, with presenters diving deep on various issues and topics, including detail-important regulations and big-picture prognostications. IDDBA’s 21st annual Cake Decorating Challenge is part of the Show & Sell Center as well. Flour, fondant and frosting will be fying as three supermarket decorators go head to head — or spatula to spatula, as it may be — to compete in a three-day contest that includes the decoration of a production case, wedding cakes and a trio of specialty cakes of their choosing that in some way refect the show theme of “Growing the Future.” Tere are some changes to the 2016 Cake Decorating Challenge, according to IDDBA’s president and CEO, Michael J. Eardley. “Tis year, we’re giving our attendees a voice,” he says. “We’re still working with our terrifc professional judges, but we know that everyone who stops to look at the amazing cakes our contestants produce has an opinion. So, if attendees have the myIDDBA app or go myIDDBA.com, they can vote for their favorite. It will bring another level of excitement and interactivity to the Cake Decorating Challenge.” PG

Summer Beverage Alcohol Report

Grocery

Uncommon

Quenchers Warm-weather quaffs beckon with superior quality, drinkability and convenience. By Bridget Goldschmidt dt

s summer heats up, consumers’ thoughts inevitably turn to refreshing options all along the beverage alcohol spectrum, but what are they looking for specifcally? Jonathan Simpson, director of shopper marketing at White Plains, N.Y.-based Heineken USA, pinpoints “favorful beers and the crisp and refreshing taste of hard cider [as] natural choice[s] for warm-weather gatherings and celebrations. Variety packs are also a growing trend for group gatherings, as they appeal to consumers’ desire to try new styles and favors, and ofer something for everybody.” According to Simpson, “Choosing refreshment and seeking variety are not new trends, but rather trends that continue to develop and evolve as consumers experiment with new categories such as cider and new styles of beer from their favorite brands.” To that end, Heineken has launched hard-cider brand Strongbow’s latest favor, Strongbow Cherry Blossom, which, notes Simpson, “delivers a cutthrough refreshing taste with cherry blossom and redfruit aromas, subtle sweetness, and [a] ripe apple fnish. Cherry Blossom served over ice is the ultimate way to experience this new favor’s most refreshing taste, just like all of our delicious hard-cider favors.” Also part of the company’s seasonal lineup is what Simpson describes as “a returning fan favorite,” limitededition Dos Equis Azul, as part of the Beers of Mexico variety pack. Te blend of signature golden-wheat lager and blue agave joins Dos Equis Lager, Tecate and Sol. Another summer limited release, Newcastle Caley Amber Ale, will be featured in the “Best of Britain” variety pack, alongside Newcastle Brown Ale and British Pale Ale. Brewed in collaboration with sister Caledonian Brewery, the ale “is made with a blend of whole-fower hops to create a full-bodied brew with a slight, pleasant bitterness that is brought to life by the open-fred solid

May 2016 | progressivegrocer.com |

Grocery

Choosing refreshment and seeking variety are trends that continue to develop and evolve as consumers experiment with new categories.” —Jonathan Simpson, Heineken USA

Summer Beverage Alcohol Report

copper kettles,” enthuses Simpson. “When it comes to popular beers in the summer, nothing is as popular as the Leinenkugel’s Shandy portfolio,” asserts Martin Maloney, media relations manager at Chicago-based MillerCoors. “Grapefruit Shandy was the No. 1 new craft ofering of 2015,” despite having been ofered only in 6-packs. Currently back on shelves, with plans for year-round availability going forward, the item will come in 6-pack bottles, 12-pack bottles, 12-pack cans and single 16-ounce cans. Maloney explains that “we’re going bigger on Grapefruit, with more packs to fully optimize the potential of the brand.” He also singles out “a staple of the season, Leinie’s Summer Shandy. Te traditional Weiss beer with refreshing natural lemonade favor continues to grow year after year, and is the highest-velocity national craft in America.” A Shandy Sampler pack will include a new Watermelon Shandy, which Maloney characterizes as “a mix of traditional Weiss beer balanced with a hint of watermelon favor for a taste made for summer.” Additional seasonal oferings from MillerCoors include Blue Moon’s Belgian Table Pils, a “balanced, easy-drinking pilsner with hints of citrus,” and Redd’s “Limited Pick” Blueberry, which “boasts a delicately balanced apple-and-blueberry aroma, while ofering a taste that hits with ripe blueberry tones and a satisfying apple fnish,” according to Maloney. “Te trend where we are currently seeing the most growth potential is in the U.S. cider market,” notes Harry Lewis, VP, Stella Artois, the Belgian beer brand owned by Anheuser-Busch InBev. “In previous years, cider has been a major player in Europe, with very few options in the U.S., but now we’re starting to see growth in the category stateside. Consumers seek variety and are looking for refreshing, easy-to-drink, revitalizing summer favors. Stella Artois Cidre, made from handpicked apples from wine-growing regions, ofers consumers a [drier], balanced taste — perfect for those hot summer days.” New this summer is Stella Artois Cidre in cans, providing “a convenient option for consumers looking for an easily portable and packable beverage option for summer outdoor occasions,” adds Lewis. “Stella Artois Cidre is currently

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

available nationwide in both cans and bottles.” According to Lewis, cider’s time as a major American beverage is fnally arriving. “Te cider category has doubled within the last three years and grown nearly seven times in the past fve years,” he points out. “We continue to see the demand for cider increase due to its ability to be paired with a variety of brunch options and recipes, and believe that the best things for the category have yet to come. Our consumers have responded incredibly well to our newest ofering, Stella Artois Cidre, which is the fastest-growing cider in 2016. While most cider options are currently on the sweeter side, Stella Artois Cidre is a drier option, and our consumers have gravitated towards that.”

Mix Masters It’s not all beer and cider, however. Tere have been recent developments on the cocktail front as well. “In the past few years, we’ve seen the growth of beer cocktails, tiki drinks, punch service, kegged cocktails and cocktails on tap, and a trend away from sweet to savory/unusual favors,” observes Aneesa Moheyuddin, senior manager, innovation at New York-based Pernod Ricard USA. “As consumers become more health-conscious, fresh ingredients, low-calorie and low-ABV oferings are becoming more popular. While the majority of drinkers are reverting to the classics, they expect a higher level of quality and intrigue. And for the particularly savvy, they continue to seek out the latest, most unusual expressions, ingredients and spirits that surprise and challenge.” To engage these savvy consumers this summer, Pernod Ricard’s Malibu rum brand has introduced Malibu Pineapple Upside-Down Cake and Malibu Strawberry-Kiwi Cocktail Cans. “Malibu Pineapple Upside-Down Cake is the newest addition to

Grocery

VOdka Varieties diageo’s new smirnoff sourced vodka comes in three fruity flavors best enjoyed over ice.

Summer Beverage Alcohol Report

the Malibu Sensations portfolio,” explains Moheyuddin. “Te indulgent treat can be shared over casual connections with friends or during a relaxed night out in shots, mixed with fruit juices or blended with ice cream. Te Malibu Strawberry-Kiwi Cocktail combines the juicy favors of ripe strawberry and kiwi with a hint of Malibu Coconut, and will be available in convenient, single-serve cans perfect for outdoor and on-the-go occasions throughout the spring and summer seasons. Malibu will also be launching two new premixed and ready-to-serve cocktail oferings, Malibu Daiquiri and Malibu Pineapple Twist, in May 2016.” Among all of its brands, which include such new entries as premium artisanal tequila Olmeca Altos Anejo and American-crafted vodka Smithworks, Malibu “truly owns the summer experience,” asserts Moheyuddin. Beyond rum, which “serves as the common base for tiki-inspired drinks,” Kelley McDonough, director of public relations for the Washington, D.C.-based Distilled Spirits Council, notes: “We’re seeing mixologists expand to other categories with their cocktail creations. Spirits such as blended scotch, tequila, sherry and others are now frequently used in these festive Polynesian-style drinks.” Also seemingly made for summer is Smirnof Sourced favored vodka from Diageo North America, which the Norwalk, Conn.-based company has positioned as a “new, go-to option for those looking to seize the daytime and inject fresh, fun energy into their weekend daytime drinking occasions.” Made with 10 percent real fruit juice from concentrate and Smirnof No. 21, the gluten-free item has fewer than 94 calories per serving, contains no high-fructose corn syrup and comes in three fruity favors: Ruby Red Grapefruit, Pineapple and Cranberry Apple. According to Diageo, “Smirnof Sourced is best served chilled on the rocks, with soda water or in a simple mixed drink.”

‘Beverage Ominvores’ And what laidback summer social occasion would be complete without a glass (or several) of wine? If you ask Marc Gallo, VP, marketing at St. Helena, Calif.-based Trinchero Family Estates, however, wine, important though it may be, is just part of the larger beverage alcohol continuum. “Te emergence of the ‘beverage omnivore’ is really a fairly recent trend,” he says. “Today, there seems to be a seamless transition between beer, wine, cider and spirits. Te same holds true for the summer season; some products we know

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

will be popular this summer … include white wines, especially Sauvignon Blanc. With so many styles present across the globe, we foresee consumers expanding their Sauvignon Blanc style and preference beyond New Zealand and California. Rosé is another category that is going to be very visible this summer. Traditional rosés from France will lead the charge, but domestic oferings continue to grow exponentially. Ciders, sangrías and almost anything considered ‘craft’ will also be prevalent, especially as ‘craft’ is a popular trend and even lifestyle for Millennials.” To capitalize on the rosé trend, Trinchero will widen the availability of one of the best-selling traditional French rosés, Bieler Pere et Fils, as part of its ongoing partnership with Charles Bieler. Explains Gallo: “Bieler Pere et Fils is currently the No. 1-selling Provence rosé in the U.S. Trinchero Family Estates already sells Charles Bieler’s domestic rosé from Washington, the Charles and Charles Rosé. Tis is a partnership between Charles Bieler and famed Washington vintner Charles Smith.” Additionally, since, in Gallo’s estimation, “nothing screams summer like sangría,” Trinchero plans to expand on its successful national launch of Sutter Home Sangria with the introduction next month of a shatterproof 187 PET (plastic) 4-pack with a new screw-top 1.5-liter ofering, which he deems “convenient for summer entertaining by the pool or picnicking.” Consumers will also see canned Sancho Libre Red and White Peach Sangria available at local retail stores. PG For more about beverage alcohol this summer, visit Progressivegrocer.com/summerbeval.

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Sweet Meets Heat In response to robust taste preferences, candy and savory snacks are sharing flavors. By Bridget Goldschmidt

s American palates grow more sophisticated, consumers are increasingly discovering that the combined favors of sweet candy and savory or salty snacks can result in a whole new level of delicious complexity. “Tere have been positive trends for snacks that are a blend of savory and sweet for several years,” afrms Sally Lyons Wyatt, EVP and practice leader at Chicago-based market research frm IRI. “Consumers often fnd they want something that is both sweet and savory, and there are now a number of options that ft that request. For example, chocolate-covered salty snacks grew 11.3 percent

in dollar sales. Even the new breakfast cookies provide a combination of sweet and savory, targeting the earlymorning and morning occasions.” For her part, Jenn Ellek, senior director for trade marketing and communications at the Washington, D.C.based National Confectioners Association (NCA), notes the “innovation addressing a multitude of trends that are driving business success for many of these savory/sweet items that straddle the snack and confectionery category. A good example is one of NCA’s Sweets & Snacks Expo’s New Product Innovation winners: Milk Chocolate Peanut Butter Snappers,” a treat also incorporating pretzels. Ellek further points out that “both snacks and confectionery May 2016 | progressivegrocer.com |

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cool beAnS Jelly belly’s beanboozled line offers lookalike pairs of jelly beans in flavors such as Dead Fish/Strawberry banana Smoothie and Spoiled Milk/ coconut.

Influences of varying cultures are coming together and being reflected in our snack choices.” —Sheila G. Mains, brownie brittle

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have seen very strong sales growth over the past year, well ahead of total edibles or total store growth. While in a way rival categories, hybrid products ofer manufacturers the opportunity to extend their product lines and brands in other aisles in the store.” Te view is similar at retail. “Sweet and salty is huge right now, and driving innovation in both salty snacks and candy categories, with or without caramel, [with] variety and favor options very much on trend,” says Eric Swenson, VP of center store at Springfeld, Mass.-based Big Y Foods, which operates 67 stores in Connecticut and Massachusetts.

The Advent of ‘Snackfection’ Unsurprisingly, candy makers have been capitalizing on the growing overlap between candy and other types of snacks, even, in one case, coining a new term for the phenomenon. According to Jessie Ferraioli, associate brand manager for snacks at Pennsylvania-based Hershey Co., “Our experience with consumers has shown us that they want a broad range of snacks that includes that special treat and the better-for-you snacks, as well as something in between which we call ‘snackfection.’” Ferraioli goes on to explain: “In the ‘snackfection’ category, we have a number of sweet-andsavory snack mixes that evolved from our iconic sweets, including the Hershey’s, Reese’s and Mr. Goodbar brands. We recently relaunched our Take 5 Bars with pretzels, caramel, peanuts and chocolate that have an almost cult-like following, and we have our wholesome Brookside brand snack products like our Crunchy Clusters that combine fruit favors and dark chocolate with whole grains. Tere has been a tremendous response to these products by consumers who love the sweet-and-salty combination as well as the unique favors in Brookside products, such as açai and pomegranate. Tese Brookside products have evolved to the other side of the snack spectrum, with Brookside Fruit and Nut bars and the new Brookside Fruit and Yogurt bars, which just launched.” In a similar vein, Goodnessknows snack squares, from Hackettstown, N.J.-based Mars Chocolate North America, “are a terrifc example of this [hybrid] trend, since they combine dark chocolate with real fruit and nuts,” says Larry Lupo, VP of sales — grocery, convenience and drug channels. Divided into four snackable squares per 150-calorie serving, Goodnessknows comes in three varieties: Cranberry Almond Dark Chocolate, Apple Almond & Peanut Dark Choco-

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

late, and Peach & Cherry Almond Dark Chocolate. Clark Taylor, VP of sales and marketing at Louisville, Ky.-based CandyRifc, a manufacturer of licensed novelty confectionery, notes that “exciting favor combinations and textures … are a lot like the new trends in the music industry with ‘smashups’ — taking something that has been around for a while and remixing it to make it your own. In past years, consumers were satisfed with the manufacturers selecting their candy trends and combinations. Today, they want to make their ‘own’ mix.” To satisfy this desire for unusual favors, CandyRifc is “looking at [its] oferings for diferent spice and heat profles, along with salty and even new versions for sweet,” Taylor divulges, adding, “Some of our future oferings are looking at adding heat with a sriracha sauce.” Still, others are less convinced that such experimentation will be lasting. While acknowledging “a lot of sweet-and-salty combinations and [manufacturers’ incorporation of] the savory [into] the sweet experience,” Dennis Spiller, VP of national sales for Fairfeld, Calif.-based Jelly Belly Candy Co., cautions: “Te savory-and-sweet combination … may be more of a trend than a movement. Consumers are willing to try new favor combinations and trends, but they aren’t easily converted. At the end of the day, if you want something sweet, you’ll eat it.” Tat said, Jelly Belly ofers its own style of unique favor through the BeanBoozled jelly bean line, which Spiller describes as “a collection of 10 lookalike favor pairs where one could be a delicious favor and one could be an intentionally gross favor. It’s taken of like a rocket, and 40 percent of the growth in my department is driven by the success of BeanBoozled. Tere are nearly 2 million user-generated videos of consumers taking the BeanBoozled Challenge on YouTube. … Flavor innovations like this keep us relevant and hold consumer interest.” Te current fourth edition of the line adds two new pairings to the eclectic mix: Dead Fish/Strawberry Banana Smoothie and Spoiled Milk/Coconut.

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Variations on a Theme Flavor crossover is also occurring in the snack aisle. “I think we can thank whoever it was that decided salt and caramel should go together,” asserts Sheila G. Mains, founder of West Palm Beach, Fla.-based Brownie Brittle, which re-creates the experience of eating the crispy brownie batter scraped from the sides of a baking pan. “Infuences of varying cultures are coming together and being refected in our snack choices. Sweet and savory is here to stay, and will continue to grow.” Mains’ company is adding to that growth with the pending launch of its Dark Chocolate Sea Salt variety. Some manufacturers play up the health ramifcations of their favor profles. “Sweet and salty is a delicious and satisfying favor combination,” afrms Jim Breen, founder and CEO of Minneapolis-based Way Better Snacks. “Gaining in popularity are unexpected, bolder, more innovative favor combinations that continue to ofer better-for-you benefts. I think success in this arena will be achieved by

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ofering unique and innovative favor variations that are made with real, premium, whole grain ingredients.” In answer to this trend, the company last year added two seasonal favors to its line of limited-edition whole grain tortilla chips: Ginger Snap and Apple Cinnamon Spice, joining “fanfavorite” Pumpkin Cranberry. “Tese chips are all made with real fruit and ginger for a delicate sweetness that is perfectly balanced with real sea salt,” notes Breen. “Tere are certainly more blurred lines [between] confections and snacks,” agrees Erin Krause, director of product marketing at Denver-based Atkins Nutritionals Inc., which ofers better-for-you snack bars and shakes. “Te popular favor of sea salt together with caramel is a perfect example, and we created the Atkins Dark Chocolate Sea Salt Caramel Harvest Trail bar because consumers still want the indulgence of a sweet favor, but with the healthier profle of the nuts. It’s also more of an indulgent snack and feels more premium with the sea salt. We know many consumers have a

Grocery

Candy & Snacks

sweet tooth, but they don’t want to get of track with their lifestyle — so the idea of a sweet-and-salty snack satisfes their cravings.”

Fortune Favors the Bold Beyond the marriage of sweet and salty or sweet and savory, there are other ways to appeal to current appetites. Some snack segments are less infuenced by those dynamic duos in particular, while still reacting to the overall demand for standout favors. “We are certainly seeing some sweet-and-savory blending — driven mostly by nut companies,” observes Steve Kneepkens, VP of sales, marketing and R&D at Fairfeld, Calif.-based Calbee North America, pointing out, however, that it’s “a peripheral opportunity at this point. We don’t see sweet-and-savory combinations being a driver to growth. … It fts a small percentage of snacking occasions.” So what has Calbee, whose two latest launches are Whole Cuts potato crisps and the extension

of its Harvest Snaps line into two black bean varieties, Mango Chile Lime and Habanero, found in regard to consumer favor predilections? “We are seeing a signifcant emergence of new base ingredients and more global favors,” asserts Kneepkens. “New base ingredients include all pulses — peas, lentils, beans, chickpeas — ancient grains and rice. As you can imagine, social and digital media has brought consumer insights from all over the globe; therefore, new favors that were once exotic are becoming mainstream, [such as] sriracha, peppers, curries [and] Tajin [a Mexican condiment brand featuring chili peppers, lime and salt]. Bold favors generate excitement.” Adds Kneepkens: “Textures are more varied than ever before. We are seeing signifcant changes to crackers, pufed items, even the potato chip category.” Departures from the sweet/savory paradigm are also evident in some commercial baked goods. “We have noticed an overall sophistication of the

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

consumer’s tastes and preferences,” says Dave Marson, founder of Nature’s Bakery, a Reno, Nev.-based maker of such items as whole wheat and gluten-free fg bars crafted from “thoughtful” ingredients. “We have developed favors or favor combinations that speak to that elevated palate. For example, we recently unveiled a range of Double Chocolate Brownies sweetened with dates. We have favor varieties that combine chocolate with blueberry, raspberry or mint for a unique taste.”

Keeping Ahead As more and more consumers expect candy and snacks to step up their favors, companies in both categories must stay at the top of their game. Teir future success depends on it. “We’ll continue to innovate with new favors and favor combinations,” vows Brownie Brittle’s Mains, referring to her company’s innovative product line. “We created a category where none

existed before, but we must stay ahead of the competition and continue to keep our brand fresh and exciting. Just because we opened up this category doesn’t mean it’s ours to keep. We must continue to innovate.” “Tis is a challenging time for manufacturers, with the individualism that buyers are expecting and demanding,” admits CandyRifc’s Taylor. “Te manufacturers that can move quickly with trends and favors will be the winners in this new opportunity.” Te more things change, though, the more they stay the same, at least in one important respect. “Snacks need to taste good,” stresses Calbee’s Kneepkens. “Although favors are changing rapidly, it is a baseline requirement that snacks taste good. We are dealing with an emotive eating occasion — and taste in itself can be an emotional stabilizer.” PG

Many consumers have a sweet tooth, but they don’t want to get off track with their lifestyle – so the idea of a sweet-andsalty snack satisfies their cravings.” — Erin Krause, Atkins Nutritionals Inc.

For more about candy and snacks, visit Progressivegrocer.com/candysnacks.

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In for a Treat

This year’s Sweets & Snacks Expo is poised to be bigger and better than ever. By Bridget Goldschmidt

are a $438 billion industry worldwide, and the expo has become the proven destination for category professionals to gain the best access to the products, people and insights needed to grow their business.”

he sold-out 2016 Sweets & Snacks Expo, slated for May 24-26 at Chicago’s McCormick Place, promises to be the most successful in the event’s 19-year history. Sponsored by the Washington, D.C.-based National Confectioners Association, the show will set an all-time record in volume of confectionery and snack products, with more than 720 companies displaying almost 4 acres of innovative items, while more than 16,000 industry professionals from nearly 90 countries are expected to attend. Te show foor this time around has expanded to a second venue: the new Skyline Hall, located across the concourse on the same level as the West Hall, where the event has been held in years past, will accommodate not only the growing exhibitor base, but also the latest emerging industry trends, including a larger “Innovation Avenue.” Te new hall will additionally feature a second knowledge center specializing in tracks on snacking, specialty, consumer and shopping trends, and serve as the venue for the Most Innovative New Product Awards showcase and ceremony, enabling visitors to view the top 45 new items tipped as best-sellers by the expo’s taste panel. “Each year, the show continues to evolve and shatter existing records,” noted Barry Rosenbaum, expo chairman and president of Hicksville, N.Y.-based Nassau Candy Distributors Inc., in March. “Candy, cookies and snacks

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Spreading Knowledge Special amenities ofered to the expo’s growing contingent of international attendees — currently pegged at 15 percent of total attendee registration, but expected to climb — include an International Welcome Lounge, located adjacent to the show foor, where translators and representatives can answer questions, provide concierge services and help make visitors feel at home; a global overview of the state of the confection and snack industry; a customized foor plan highlighting export-friendly companies; and a guided retail store tour. Almost half of all expo exhibitors export products outside of the United States, while many are seeking opportunities to distribute internationally. Te show will also see its largest number of international exhibitors to date, with more than 100 companies arriving from around the world. Further, experts from the Consumer Electronics Show (produced by the Consumer Technology Association), Canadean, and the Center for Advancing Retail & Technology (CART) will each present to Sweets & Snacks Expo attendees on the latest advancements occurring in retail. All three sessions will take place at the show’s new Discovery Teater, located in the Skyline Hall. Meanwhile, at the Sweet Insights Teater in the West Hall, Google will ofer insights on omnichannel shoppers and how their behavior afects the candy and snack category. “We know product and technology innovations are top of mind to our attendees,” said Rosenbaum. “By attending our 20-minute learning labs during Expo, retailers can take away actionable insights on how to keep relevant with their shoppers, given the latest advancements in the marketplace.” PG

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

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W As consumers are treating their furry companions more and more like family, they are more willing to invest in higher-end products.” —Steve Joyce, Ainsworth Pet Products

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hen customers click on the pet care link at Kroger.com, they fnd a wealth of information about pet products and services. One standout section begins with the headline “Now Available at Kroger — Ultra-Premium Pet Foods & Treats.” Te copy then continues: “Now you’ll fnd specialty pet store quality, right where you already shop! With over 90 new items, you’ll have more options than ever before, including natural, organic and grain-free options. Plus discover super food, limited ingredient and specialty diet choices to cover all your furry friend’s needs.” Beneath the verbiage, logos for Simply Natural, Iams, Purina Beyond, Newman’s Own Organic, Abound, I and Love and You, Rachael Ray Nutrish, Tree Dog Bakery, and Nutrisca are prominently displayed. Kroger’s push to promote premium pet products kicked of in June 2014, when the company began stocking SKUs from the ultra-premium brand I and Love and You in about 2,000 stores, according to “U.S. Pet Market Outlook, 2015-2016,” a report from Rockville, Md.-based Packaged Facts. In doing so, the Cincinnati-based grocer tapped

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

By Kathleen Furore

into a trend toward premiumization in the category. “Much of the dollar growth in the U.S. pet market has come from higher-ticket sales of products and services, as opposed to volume gains,” the report notes. “Fueling this trend is a steady stream of superpremium products and services.”

By the Numbers According to “Te Humanization of Pet Food,” a March 2016 report from Schaumburg, Ill.-based Nielsen, pet food currently accounts for 76 percent of the pet care category. Healthy treats, specialty pet foods and other premium options are among the segments experiencing signifcant growth. “Tere isn’t much people won’t do for their pets, and this sentiment has only strengthened over the past few years,” Nielsen reports. “In the U.S., 95 percent of pet owners currently consider their pets to be part of the family — up seven points from 2007. Increasingly, pet owners are moving from expectations of ‘high quality (for pets)’ to ‘humanized’; that is, they desire pet food options that address the same health concerns currently infuencing human food production, such as unnatural preservatives and genetically modifed ingredients — and they’re serious about these preferences.” Packaged Facts research confrms that premium

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Premium products have a lot of profit potential.” —Toby Nelson, RT Nelson Sales and Marketing

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products are the darlings of the pet aisle today. According to “Pet Product Retailing in the U.S.: Channel Competition and Consumer Shopping Trends, 2nd Edition February 2015,” “Despite any moneysaving tradeofs pet owners may be making, premium products remain the market drivers in the U.S. pet market. Because there’s no set defnition for premium, it’s difcult to say just how much of the market is premium, but Packaged Facts estimates that premium products account for approximately two-ffths of the market.” Food isn’t the only premium segment experiencing a surge in the pet category. For example, Arm & Hammer, a brand of Trenton, N.J.-based Church & Dwight, introduced Clump & Seal cat litter at a premium price level in early 2014. Te product earned more than $100 million in its frst year on the market, Packaged Facts notes.

Why Premium? What’s fueling the favorable market for premium pet products? According to Packaged Facts data, pet owners’ belief that natural and organic products, which make up the majority of premium products, are safer than regular pet foods is a big part of the appeal. Not only did 41 percent of pet owners agree that natural and organic pet foods are safer products, a growing percentage of them also said they would buy more natural and organic products if they were more available. In fact, the percentage of respondents who would buy more natural/organic products if they were more available grew from 30 percent in 2012 to 39 percent in 2014, Packaged Facts reports. Health-related products are also driving sales. Packaged Facts notes that 68 percent of pet owners were willing to spend more to ensure the wellness of their pet, and 64 percent believed that high-quality foods play a part in preventive health care. Ray of Sunshine On the supplier side, Ainsworth Pet Nutrition has also observed an increasing interest in premium pet products, according to Steve Joyce, VP of marketing at the Meadville, Pa.-based company. “Over the past few years, we have defnitely seen a trend in the humanization of pets,” Joyce afrms, “and as consumers are treating their furry companions more and more like family, they are more willing to invest in higher-end products — a trend that has been enormously positive for the pet food industry.” Products from the Rachael Ray Nutrish line of

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

dog and cat food are the most popular premium items from Ainsworth, a company whose motto is “Pet Store Quality. Supermarket Easy.” “While all of our Nutrish recipes are made with simple, wholesome ingredients, our most recent product ofering, Rachael Ray Nutrish Dish — a meat-frst, no-corn, -wheat or -soy product with whole-food inclusions of real chicken, fruits and veggies — has been very well received,” Joyce asserts.

Field Report Toby Nelson, president of RT Nelson Sales and Marketing, in Altoona, Iowa, has a good handle on the premium pet market. As someone who sources premium pet products to stores such as Hy-Vee, Nelson understands the positive results seen by retailers that merchandise and market premium pet supplies. “From day one, when I took on the pet business — 10 to 12 years ago — I started working with premium and gourmet products,” Nelson recalls. “In a good-better-best scenario, I deal with the better and best products. Te average customer is a good customer, but that isn’t who you make money with. Premium products have a lot of proft potential.” West Des Moines, Iowa-based Hy-Vee is one retailer that not only understands the pluses of premium, but also embraces some higher-priced items. Creating in-store displays that tout such products can help drive customers to premium purchases. “In-line purchases tend to be planned, but displays create impulse purchases … and there is a nice margin,” says Nelson, who often hands out samples at pet store events to introduce shoppers to premium pet lines. “Customers who shop pet specialty maybe once a month but go to the grocery store three to four times a week start to notice,” he continues. “Carrying [these kinds of] quality products and having a good selection of them leads to repeat sales — and repeat sales say it all.” PG

The Well-groomed Pet Supplies in the segment freshen up category sales.

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“D

emand for grooming is huge for both dogs and cats.” Tat statement, from blogpaws.com, underscores the potential proft retailers can reap by stocking grooming products in the pet aisle. According to the Greenwich, Conn.-based American Pet Products Association (APPA), expenditures for grooming products are growing at an impressive clip. APPA estimates that 2015 U.S. sales for grooming and boarding supplies and services will total $5.24 billion, an anticipated jump from actual sales of $4.84 billion in 2014. Shay Moeller, North American product manager for consumer pet at Sterling, Ill.-based Wahl Clipper Corp., confrms that the grooming category — which includes shampoo, clippers and other items the company carries — is on the rise. “Tere has been a big uptick in grooming [product] sales,” notes Moeller.

Trend Drivers Consumers’ desire to keep their pets well groomed dovetails with the humanization trend, which fnds today’s pet parents treating their furry friends as full-fedged family members. “Pet owners have a strong desire to make sure their pet kids are provided with quality, safe and benefcial products to promote health and happiness,” says Moeller. “Tis desire is what is driving the growth of grooming for both cats and dogs.” Many of those pet parents are Millennials,

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We have seen that when supermarkets expand their assortment of grooming products, the supermarkets have seen tremendous growth.” —Shay Moeller, Wahl Clipper Corp.

who spend more on pet products and services than their older pet-owning counterparts, according to “Millennials as Pet Market Consumers,” a March 2016 report from Rockville, Md.-based Packaged Facts. Pet owners in the 18-to-34-year-old age group are much more likely than those in the 35-andover age group to splurge on pet care services, and to pamper their pets. Dog owners in the 18-to34-year-old age group are more likely to have purchased pet products and accessories, including grooming supplies, the Packaged Facts report notes, citing Simmons NCS data.

At-home Opportunity “More and more pet parents seem to be embracing professional grooming services, but are also using grooming tools for at-home use,” remarks Carol Bryant, who handles BlogPaws’ marketing and social media. “Time, money and the desire to interact with their pet is why more and more pet owners are

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grooming pets at home,” echoes Moeller. “Te connection pet owners get through grooming allows one-on-one companionship. Tis also gives pet owners early warnings signs if there are skin problems, lumps or anything else that could be a problem for their pet.” Consumers’ willingness to perform at least some pet-grooming tasks opens the door for grocery retailers to compete with pet specialty stores — traditionally the go-to stops for grooming supplies and on-site services. “Supermarkets already have pet owners purchasing dog food, treats and other items at their stores,” Moeller says. “We have seen that when supermarkets expand their assortment of grooming products, the supermarkets have seen tremendous growth.” Calling attention to the selection of grooming supplies can help retailers clean up on sales in this growing pet product segment. “Supermarkets can use blade signs, product clusters and advertisements to draw attention to the grooming [items] that they ofer,” Moeller advises. PG

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Multipet International Pet Products

The company’s Pet Voyage Collection, launched at the 2016 Global Pet Expo, taps into trends in pet travel (some 45 percent of pet parents travel with their pets). The line of pet carriers includes products featuring

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

innovative silhouettes enhanced with premium finishes, and evocative materials, including durable ballistic and innovative rip-stop fabrics. Meanwhile, the company’s Swingin’ Slevins line of squeaky plush dog toys is named for Sean Slevin, who recently became VP of business development at Multipet. The Swingin’ Slevins have extra-long arms and legs — a reference to the new veep’s 6-foot, 5-inch height. www.multipet.com

The future of retail looks bright

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Dairy

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Springs Eternal Dairy marketing initiatives look beyond the annual June promo push. By Jim Dudlicek

siGns oF the times the midwest Dairy Association recommends segmentation signage to offer better guidance to shoppers.

he dairy case has seen dramatic changes in recent years with the proliferation of new product segments competing with milk for space. Simultaneously, shopper behavior has changed and the retail landscape has evolved. “New proprietary research from MilkPEP uncovers growth opportunities and a number of actions that retailers can take, including best practices and insights to maximize dairy case sales and, ultimately, drive retailer proft,” says Genevieve PoirierRichards, SVP of marketing for the Washington, D.C.-based Milk Processor Education Program. Grocers can take advantage of programs from MilkPEP and other industry groups to drive category sales during June Dairy Month, but more importantly, leverage them to keep the momentum going all year. Te research, led by Prime Consulting and Willard

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

Bishop, included a major dairy milk shopper study and leveraged national IRI data and Willard Bishop’s SuperStudy Grocery. “It uncovered four key opportunities for retailers to invigorate their fuid milk business,” Poirier-Richards explains. “Actions include remedying the out-of-stock issue (costing retailers thousands of dollars of missed sales), increasing days of supply for more proft, increasing milk variety (driven by innovation in the category), and optimizing milk merchandising to focus on the benefts shoppers are seeking, like protein or post-exercise recovery.” Full research fndings are expected to emerge over the coming months. Meanwhile, MilkPEP ofers My Morning Protein, which touts milk’s high-quality protein and its pairability with other key foods that will help shoppers get to the 25 to 30 grams of protein in the morning that nutrition experts recommend. “With its robust marketing, in-store POS

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Milk is the most local food in the store. It comes from a farm, on average, no more than 100 miles away, and left that farm no more than 48 hours ago. No other food in the store can claim that.” —Cindy Sorensen, Midwest Dairy Association

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and cross-merchandising opportunities, this program allows retailers to tap into the booming protein trend to help sell more milk,” PoirierRichards says. “Recent in-store results showed sales gains for this message for both milk and complementary protein foods.” More recently, MilkPEP has embarked on a fve-year partnership with the United States Olympic Committee that will include specifc retail components, including POS, and ofers a robust 360-degree approach encompassing national advertising, engaging digital content, on-pack creative and messaging. “Tis fully integrated approach ofers retailers a unique opportunity to capture consumers’ attention as we head into one of the biggest summers in sport,” Poirier-Richards says.

Destination Dairy Te Midwest Dairy Association (MDA) has launched the Dairy3ForMe campaign, which runs through the end of June and urges support for the Dietary Guidelines’ recommendation of three daily servings of dairy. “We are encouraging consumers to take the Dairy3ForMe pledge [at the group’s website, https://www.midwestdairy.com/] and share it on social media,” says Cindy Sorensen, MDA’s VP of business development. St. Paul, Minn.-based MDA ofers a communications toolkit for its retailer and manufacturer partners to support its promotions. Additionally, the group is recommending a three-pronged plan dubbed “Dairy Department Reinvention” to increase sales, Sorensen explains, explaining that it advises simple changes such as improvements in fow and adjacency, as well as the addition of segmentation signage; larger initiatives that might be incorporated into resets, remodels or new store builds; and the creation of dairy destinations within the store, such as meal/ snack solution centers, yogurt/ protein stations, and milk-andcookie stations. Tis year marks the National Frozen and Refrigerated Foods Association’s (NFRA) 14th annual June Dairy Month national promotion, Out of Tis World Possibilities in the Dairy Aisle. Harrisburg, Pa.-based NFRA ofers retailers an online idea book (https://nfra.uberfip.com/i/6494312016-june-dairy-month-idea-book) to inspire dairy month promotions and leverage available programs. Te group assists retailers in cultivating partnerships with association and brand partners, leveraging the June Dairy Month brand and competing in NFRA’s annual Golden Penguin Awards, which recognize innovative promo initiatives.

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

Month of Opportunities These theme days during June Dairy Month present additional promotional and product demo possibilities: June 2: National Rocky Road Ice Cream Day June 3: National Egg Day June 5: National Cheese Day June 7: National Chocolate Ice Cream Day June 17: National Eat Your Vegetables Day June 20: National Vanilla Milkshake Day June 21: Father’s Day/First Day of Summer June 25: National Strawberry Parfait Day

Nondairy Partners June Dairy Month is also an opportunity for nondairy alternatives within the category whose products are merchandised alongside traditional options. “Melt has an active public relations program in support of its product line, and also participates in the NFRA’s public relations program that actively supports June Dairy Month,” notes Meg Carlson, president and CEO of Boise, Idaho-based Prosperity Organic Foods, maker of nondairy Melt Organic buttery spread. According to Carlson, her company is using NFRA’s toolkit to help support the launch of its newest products: a probiotic organic spread and organic buttery sticks. “Nondairy alternatives that feature sustainably sourced ingredients improve [the category’s] appeal to Millennials, especially parents who are seeking these alternatives and willing to pay for them,” Carlson asserts. Of course, industry groups declare the superiority of “real” dairy, but acknowledge current eating trends and the need to ofer the solutions that consumers demand. Raising Awareness “Shopping trends continue to evolve based on changing consumer behaviors, and protein is one trend that is still important and relevant to consumers,” says MilkPEP’s Poirier-Richards. “MilkPEP ofers a number of turnkey ways for retailers to leverage this trend, which presents a great opportunity to drive milk sales in-store.” MDA’s Sorensen adds, “Consumers today are looking for fresh, natural and local foods. We help retailers with communication that will help them share with their shoppers the fresh, natural and local aspects of dairy. It seems that most of the retailers with whom I speak are unaware that milk is the most local food in their stores. It comes from a farm, on average, no more than 100 miles away, and left that farm no more than 48 hours ago. No other food in the store can claim that.” PG For more information about MilkPEP’s new dairy case research and resources, contact info@milkpep.org.

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Fresh Food

Produce

The Fresh Produce Pitch Retail dietitians help drive home a healthy-lifestyle message.

By Jennifer Strailey

etermined to efect real change and promote wellness in America, supermarkets, suppliers and promotional boards are doing more than ever before to educate consumers about the health benefts associated with eating more produce. One meaningful way that the industry is bolstering its health messaging is by teaming with registered dietitians (RDs). Dedicated retail dietitian positions are on the rise, with 60 percent of retailers employing at least one dietitian, according to the 2015 Progressive Grocer Retail

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Dietitian survey. On the frontlines with consumers, RDs are infuential proponents of fresh produce. “Supermarket dietitians are the link to consumers in stores and are a key to customer engagement,” afrms Stephanie Bazan, market development director of Avocados From Mexico (AFM), in Irving, Texas. AFM works with its own RD, Barbara Ruhs (who has contributed columns to PG), as well as supermarket dietitians across the country to communicate the nutritional benefts of avocados. “Supermarket RD promotions have a proven impact on incremental sales, while also ofering

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

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baking and smoothies; education; and upcoming retail promotions. “We’ve seen more than a 100 percent increase in sales during supermarket dietitian promotions that included weekly ads, a nutrition newsletter, in-store demos and media appearances,” observes Ruhs. “Tese dietitians have a variety of ways to connect with consumers, and it seems to be making a huge impact on their purchase behavior, knowledge of the nutrition attributes of avocados, and expanding their culinary versatility.” Produce for Kids, whose mission is to educate families on the benefts of healthy eating while raising money for child-oriented organizations, has long seen the value of collaborating with in-store dietitians. Te Orlando, Fla.-based nonproft’s new We Heart RDs program aims to supply in-store dietitians with the tools they need to help consumers eat more healthfully. As part of the program, Produce for Kids ships toolkits to grocery store RDs on a monthly basis. Te kits contain recipes, a “What’s in Season” list of the best fresh produce to eat that month, healthy-eater stickers, and more. “We are hoping that this growing segment of retail dietitians will give the produce industry another avenue to fourish,” says Produce for Kids VP Trish James. Commodity boards have been invited to participate in the RD toolkit boxes. AFM is partnering on Produce for Kids’ May RD box, while the Watermelon Board, in Winter Springs, Fla., is collaborating on the June/July kit. Several years ago, inundated with retail dietitian requests for nutritional information and data on apples, pears and cherries, Chelan Fresh hired a team of RDs with diferent specialties, from diabetes to ftness, to create RD toolkits on the three fruits. “We wanted to make it relevant to working supermarket RDs and give them the tools they needed to do instore consultations, demos and school tours,” explains Kathryn Grandy, Connect with us to bring the Nation’s #1 Medjool date brand marketing manager for Chelan Fresh, to your health-minded shoppers: marketing@bvdg.com based in Chelan, Wash. In October 2015, Chelan Fresh launched two healthy-lifestyle tools for consumers with the debut of its “Healthy You in One Minute” video a valuable service in the retail space — providing access to the nutrition experts,” asserts Bazan. “Tis helps retailers have a competitive advantage, enhance loyalty and increase basket size.” Ruhs publishes the AFM supermarket newsletter for the retail dietitian network. Te publication features nutritious recipes; creative ideas for incorporating more avocados in daily meals, snacks,

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series and a 48-page “Healthy You in One Minute Handbook.” To date, the company has produced six videos and plans to continue to produce new one-minute videos on a range of topics. Te handbook, according to Grandy, features everything from “how to make phenomenal-tasting baby food” to “how to incorporate fruit into grains to make it easy to digest for seniors. “We have a very wonderful team of food and health professionals who help us develop ‘Healthy You in One Minute,’ and present the information in a way that’s diferent, fun and more than just a recipe,” she adds. For example, the summer edition will feature an educational piece on freezing cherries. “We’re suggesting that consumers buy a bag for now and another bag to freeze for later,” Grandy says.

Easy When You Know How Ocean Mist Farms, in Castroville, Calif., is equally committed to working with RDs to spread the message that fresh produce is not only good for one’s health, but also easier to prepare than many consumers realize. “Artichokes and Brussels sprouts, our two biggest crops, are nutrient powerhouses and we work with registered dietitians to conduct regular literature reviews so we can stay abreast of new research detailing the health benefts of those two vegetables,” says Diana McClean, director of marketing. “We then take that information and package it in a format that is usable for our store partners — the registered dietitians who work for our retail partners, as well as consumers.” Ocean Mist shares all of its health information via its website and social media. With artichokes, McClean believes the most important nutritional messages are that they are higher in fber than any other vegetables and that their nutrient value actually increases when cooked, unlike most vegetables, which lose nutri-

ents when cooked. “We know education is the key to trial for artichokes, and because we have such a powerful nutrition story to tell, we want to work with our retail partners to provide information to shoppers at the store level,” she adds. Educating consumers about artichokes’ ease of preparation is also critical to increasing sales. “Some people are intimidated by how to prep artichokes,” acknowledges McClean. “Te Ocean Mist Farms Season & Steam bag takes all of the fear out of the process.” Te package technology allows users to open the bag prior to cooking, pre-season the contents, reseal the bag with the zip lock and steam it in the microwave, all within seven minutes.

Fresh and Fun When it comes to promoting the health benefts of fresh produce and helping customers eat more fruits and vegetables, it has to be simple and fun, agrees Produce for Kids’ James. “From our observations, the shopper is hungry for information and education on fruits and vegetables,” she asserts. “What’s important is the tactics used to deliver the information.” Produce for Kids notes that busy families have been receptive to its Build Your Own series. Launched in 2015, the series features infographics that guide consumers through building produce-packed dishes, including smoothies, salads, burgers and pizzas. “Ofering fruit and vegetable recipes to shoppers that stay under fve or six ingredients and take 30 minutes or less is something we do online and instore, and it is very well received,” says James. “It’s absolutely important to put yourself in the place of the shopper. Remember to make the idea of cooking fresh, easy and fun, instead of boring and hard.” What’s in Season is another simple yet successful series for Produce for Kids. At the beginning of each month, the nonproft releases a graphic guiding people on the best produce to use that month. “We also align recipes and other communications around What’s in Season, so people have ideas on what to do with these fruits and vegetables, once they make their purchase,” explains James. At Duda Farm Fresh Foods, healthy and fun go hand in hand. “We work with our retail partners’ registered dietitians to provide information about eating fresh produce to their shoppers in fun ways that will continue to resonate,” says

SupEr Salad Chelan Fresh provides such better-foryou recipes as Fresh apple and roasted Beet Salad.

Supermarket dietitians are the link to consumers in stores and are a key to customer engagement.” —Stephanie Bazan, avocados From Mexico

May 2016 | progressivegrocer.com |

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Fresh Food

We are hoping that this growing segment of retail dietitians will give the produce industry another avenue to flourish.” —Trish James, Produce for Kids

Produce

Nichole Towell, director of marketing for Duda. Te Oviedo, Fla.-based fresh produce company also focuses on social media, online and real-world outreach. “We’re invested in engaging with our local communities nationwide, to showcase the health benefts of eating fresh fruits and vegetables, as well as educating families about where their food originates,” notes Towell. To that end, Duda has partnered with the San Francisco Giants to create a garden inside the team’s stadium, AT&T Park, as a way to showcase sustainability and wellness, as well as teach consumers about where their food comes from. “Te garden is used year-round for community outreach, including special children’s events where kids learn about farming in California and healthy eating,” observes Towell. “Tis is the second season that Duda has partnered with the Giants to create a one-of-a-kind experience that shows baseball fans how celery, radishes and citrus are grown. In turn, our hope is they will be equipped with a larger toolkit of knowledge the next time they are shopping the produce aisle at their local grocery store.” Duda also collaborates with health-and-wellness experts to ofer tools that encourage people to eat

more fresh produce. Working with Robin Plotkin, a culinary and nutrition expert, the company created a food and exercise log to help people track what they eat and when they work out. “It’s called Healthy Afrmations, and it’s posted on the front of our website,” explains Towell, adding. “When visitors sign up, Robin provides her favorite health tips and heart-healthy recipes.” Most recently, Duda partnered with Kathy Patalsky, a vegan blogger, to provide fresh vegan swaps and 15 days of vegan breakfast recipes, including Dandy citrus smoothies.

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| Ahead of What’s Next | May 2016

Additionally, the company was named a Fruits & Veggies — More Matters Industry Role Model by Produce for Better Health (PBH) Foundation for the sixth consecutive year this past April at PBH’s Annual Conference: Te Consumer Connection, in Scottsdale, Ariz.

Smarter Shopping Sunbury, Pa.-based Weis Markets Inc., which has employed RDs since 2003, recently launched a Nutri-Facts shelf tag program designed to help customers easily identify foods that meet their individual health and lifestyle needs. “Weis Markets is committed to helping our customers live well,” noted Beth Stark, manager of lifestyle initiatives for the grocer, at the time of the program’s debut. “We can accomplish this goal by providing tools and resources on healthy eating and simplifying the process of fnding nutritious foods in our stores.” Using U.S. Food and Drug Administration and U.S. Department of Agriculture guidelines, Weis dietitians developed 13 Nutri-Facts icons that include popular dietary and health identifers, among them organic, gluten-free, whole grain and vegan. Te Weis dietitian team also recently debuted the Fresh for You and Superfoods programs to help the chain’s customers eat better. Fresh for You foods are hand-selected by the dietitian team, based on nutritional profles. Te items are fagged with signage providing information on ways to incorporate the food into recipes and meals. Te Superfoods program, meanwhile, highlights nutrient-rich foods that naturally contain signifcant amounts of vitamins, minerals and antioxidants.

From Foodservice to Home While retail dietitians ofer in-store inspiration, chefs are leading many of the nation’s culinary trends that originate in foodservice and migrate to consumers’ homes. With this in mind, the Hass Avocado Board (HAB), in Mission Viejo, Calif., recently launched a foodservice marketing program to further the healthand-wellness mission of its Love One Today campaign and to raise awareness about the nutritional benefts of including fresh avocados in healthier menu items. At the same time, HAB unveiled a new foodservice website, www.avocadocentral.com/foodservice, designed to be the go-to platform for information regarding the nutritional benefts of avocados, inspiring fresh avocado usage on menus and highlighting chefs who are already incorporating the fruit into better-for-you recipes. According to Emiliano Escobedo, HAB executive director: “Te Hass Avocado Board has been encouraging Americans to include fresh avocados in everyday healthy eating plans through our Love One Today campaign. We now want to extend this messaging to foodservice by inspiring use of fresh avocados in healthier menu oferings.” In 2010, HAB established a Nutrition Research Program that remains an integral component and

May 2016 | progressivegrocer.com |

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Fresh Food

Our research shows that consumers are more likely to incorporate avocados into their daily lives if they are aware of the fruit’s health benefits.” —Emiliano Escobedo, Hass Avocado Board

Produce

AvoLifestyle

guiding force of the Love One Today program. “Current work includes partnering with and leveraging registered dietitians, media, social infuencers and various organizations to further engage target consumers and introduce and/or expand their knowledge about the benefts of including avocado in their diets,” explains Escobedo. “Plus our annual consumer tracking study helps us understand consumer attitudes and behaviors surrounding avocados.” In 2015, “good for you” became the No. 1 purchase driver of HAB’s target audience. “We use the tracking study each year, along with our research, to shape the discussions we have with Americans to continually drive awareness of avocados’ health attributes and benefts,” he adds. At present, HAB is working to incorporate Love One Today branding on packaging. “Our research shows that consumers are more likely to incorporate avocados into their daily lives if they are aware of the fruit’s health benefts,” reveals Escobedo, “so the more we can educate Americans about nutritious, wholesome foods like fruits and vegetables, the more likely they are to purchase them as part of a healthy diet.” PG

SCS-SG-0114

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

In October 2015, Avocados From Mexico (AFM) launched AvoLifestyle, an initiative that leverages technology to help individuals pursue a healthier lifestyle through nutrition and fitness. “AvoLifestyle was created to inspire consumers through a newly launched platform that goes beyond nutritious eating,” says Stephanie Bazan, market development director of Irving, Texas-based AFM. In partnership with Under Armour, Avocados From Mexico can target health-savvy enthusiasts through a health-and-wellness digital app, enabling consumers to access My Avo Plan, which incorporates and promotes the daily consumption of avocados. The main hub for AvoLifestyle lives on www.avocadosfrommexico.com and offers educational and motivational content, as well as interactive tools to help users make better choices and stick to them.

Fresh Food

Produce Category Spotlight

Best Case

Scenario The berry category holds at No. 1 in fresh produce. By Jennifer Strailey

erries are not only sweet and delicious, they’re also an easy-to-snack-on superfood rich in antioxidants, nutrients and phytochemicals. Not surprisingly, the popularity of this category continues to soar. With $5.8 billion in annual sales, the berry category ranks No. 1 in total produce, notes the California Strawberry Commission, citing IRI/ Freshlook Marketing data. Strawberries, which snag the No. 8 spot in produce, at $2.7 billion, contribute 4.5 percent to total produce sales, while berries contribute 9.4 percent. Quality is key in the highly perishable berry category. With this in mind, Wish Farms, of Plant City, Fla., is partnering with Rubbermaid during the Florida blueberry and California strawberry seasons, to promote the new FreshWorks Produce Saver. Atlantabased Rubbermaid has developed a technology that naturally balances the fow of oxygen into the container, while allowing carbon dioxide to escape, thereby keeping produce fresh up to 80 percent longer. An on-pack coupon on Wish Farms 1-pound California strawberries and 6-ounce Florida blueberries will ofer consumers a savings of $1.50 on any Rubbermaid FreshWorks container through July 1 or while promotional labels last. Wish Farms has also recently revamped its blueberry label. Te colors and font have been modernized, while a new yellow gingham design, above the Wish Farms logo, imparts a fresh-from-the-farm feel. Additionally, the new labels more prominently feature Wish Farms’ www.HowsMyPicking.com call to action. A 16-digit number printed directly on each clamshell allows consumers to provide feedback and connect with

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Fresh Food

Produce Category Spotlight

information on the grower and packinghouse through the website.

Blueberries From Florida “Te Florida blueberry season has been of to a slower start than normal,” notes Amber Maloney, director of marketing for Wish Farms. “In the winter, growers didn’t have a lot of ‘chill hours,’ which are the number of hours that the temperature is below a certain degree,” she explains. Te number of chill hours determines harvest time, and thus Florida’s warm winter has delayed this season’s blueberry harvest. “Tere’s lots of fruit out there,” she’s quick to point out, however, “and we’re now getting into normal levels.” Summertime Promotions Heading into summer with fresh berries in abundance, Driscoll’s is taking a multipronged approach to its Berry Patch promotions. “For the months of May through July, Driscolls. com will sponsor a national sweepstakes for consumers to have a chance to win berries for a year,”

says Frances Dillard, director of marketing for the Watsonville, Calif.-based supplier. In June, Driscoll’s will run an Instagram contest in partnership with FeedFeed, a crowdsourced digital cooking publication and community, to encourage home cooks to share their berry creations. “Driscolls.com will highlight berry themes, holidays, organics, rewards and sweepstakes to encourage shareable information around the freshness and abundance of Driscoll’s berries during the summer,” Dillard adds. Te family-owned berry company has also partnered with author Kate Lebo to share berry-andherb pairings for pies and jams.

Blueberry Merger Two partners of Salinas, Calif.-based Naturipe Farms, Munger Brothers LLC and Hortifrut S.A., recently signed a memorandum of understanding to merge the Munger’s berry business with Hortifrut. As a result, the entities will form a consolidated global berry organization with operations in British Columbia, Washington, Oregon, California, Mexico, Peru, Brazil, Argentina, Chile, Europe, Africa and Asia. Munger-Hortifrut North America Inc. will be a new subsidiary of Hortifrut S.A. and will manage its North American berry operations. PG

Berry HealtHy Watsonville, Calif.-based Well-Pict promotes the health benefits of berries.

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Fresh Food

Budding Growth Innovation will be on display at United Fresh 2016. By Lynn Petrak

based United Fresh Produce Associaiving new meaning tion, the event is a leading convention to the term “growand expo for the fresh produce industry. ing power,” the Set to be the largest yet, this year’s produce industry is event, with the theme “Produce Inexpanding because novation Starts Here,” will refect the of innovation in state of the category at retail. Industry products, packaging, merchandising leaders and professionals from a variety and promotions. Even if plants rangJune 20-22 of backgrounds and interests will ing from tomatoes to peppers to kale McCormick Place, Chicago converge in Chicago to learn about inare invariably grown in soil, tended to To register, visit novations in product development, get and harvested, that doesn’t mean that www.unitedfreshshow.org advice from experts and network with produce providers and retailers can’t Phone 202-303-3400 others in the industry and, through deliver produce in fresh new ways to Email: united@unitedfresh.org the one-badge co-located event format, today’s shoppers. other related industries as well. Many of those innovations, from According to United Fresh President and CEO Tom the seeds of new ideas to the bounty of new items and forStenzel, this year’s focus on innovation is top of mind among mats, will be on display June 20-22 at United Fresh 2016, produce companies, retailers and others in the farm-to-table co-located with FMI Connect, the International Floriculchain. “Fresh produce innovations in retail are hot, continuing ture Expo and the new Global Chain Expo at Chicago’s to permeate departments throughout the store,” he asserts. McCormick Place. Sponsored by the Washington, D.C.May 2016 | progressivegrocer.com |

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United Fresh 2016 Schedule at a Glance Sunday, June 19

1 p.m.-5 p.m.: Registration open

Monday, June 20

7 a.m.-5:30 p.m.: Registration open 1 p.m.-5 p.m.: Fresh Foods: The Retail Revolution 6 p.m.-7:30 p.m.: United Fresh opening party, Museum of Contemporary Art, Chicago

TueSday, June 21

Exemplifying the notion of thinking outside the box, United Fresh 2016 includes new programs and activities. One addition is a special session, “Fresh Foods: Te Retail Revolution,” on Monday, June 20, during which speakers will explore the trends, innovations and visions for how fresh produce and fresh food are dramatically changing retail channels. After the educational session, guests will take part in a tasting reception featuring samples of a host of new products. Further highlights of United Fresh 2016 include the United Fresh Marketplace, United FreshTech expo, produce awards recognition, and education sessions presented by a variety of experts in the feld.

WedneSday, June 22

7 a.m.-4 p.m.: Registration open 7:30 a.m.-8:45 a.m.: Breakfast General Session 9 a.m.-10 a.m.: Educational workshops 10 a.m.-4 p.m.: Trade show open 6 p.m.-9 p.m.: Chairman’s Reception and RetailFoodservice Celebration Dinner, Grand Ballroom, Marriott Chicago Downtown

ThurSday, June 23

8 a.m.-2 p.m.: Post-show tours (separate ticket required)

Welcome!

roduce Innovation starts at United Fresh 2016! You’ll be joining thousands of fresh produce leaders who are coming together to explore creative business strategies, showcase innovative products and celebrate those retail, foodservice and produce superstars who are advancing the fresh produce industry daily. No matter which segment of the supply chain you represent, you’ll fnd the education and business connections you need to drive success for your company. Visit the destination areas at our trade show foor to meet with exhibitors showcasing new products and download the latest on produce marketing, business management, leadership development, supply chain logistics and food safety in our FreshTech and Fresh Marketplace learning centers. Kick of the week with Monday night’s opening party at the Museum of Contemporary Art. And be sure to stick around for Wednesday night as we recognize the stars of

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7 a.m.-4 p.m.: Registration open 8 a.m.-9:45 a.m.: Opening Breakfast General Session 10 a.m.-6 p.m.: Trade show open 4 p.m.-6 p.m.: Fresh Festival for School Foodservice (invitation only) 6:30 p.m.-9 p.m.: Leadership Alumni Reunion Dinner (invitation only)

our industry — the outstanding retail produce managers, chefs and foodservice operators who work tirelessly to introduce consumers to the hottest fresh produce both in their retail outlets and on the menus they plan. Also, be sure to visit with our co-located partner shows — one United Fresh ticket gets access to all four shows, including FMI Connect, the International Floriculture Expo and the brand-new Global Cold Chain Expo. Together, we bring solutions and innovation to all aspects of the food industry. Te opportunities are endless, so bring your energy and enthusiasm for growing business, making connections and taking your company to the next level! We look forward to welcoming you to Chicago!

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

Tom Stenzel President and CEO United Fresh Produce Association

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Fresh Food

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Speaking Up: Presenters to Focus on Positive Produce Changes

nited Fresh 2016 features fresh insights into the state of the produce industry and the pace of innovations at a time when shoppers are looking for healthy, diferent and convenient foods that ft their tastes and lifestyles. Tis year’s speakers represent a range of viewpoints and experiences, with a common goal of exploring new opportunities in fresh produce. Keynoters include: Craig Boyan President and COO, H-E-B As head of one of the nation’s largest independent food retailers, Boyan understands the challenges and potential faced by today’s supermarkets. He’ll share his thoughts on the future of food retailing

and the role that fresh produce will play. Boyan is also a member of the H-E-B and Food Marketing Institute boards. Kevin Brown President and CEO, Lettuce Entertain You Enterprises, Inc. (LEYE) As president of LEYE, Brown oversees more than 100 restaurants with 51 separate concepts spanning fast-casual to fne dining. His restaurateur background allows him to zero in on innovation and the development of new concepts while maintaining a high level of hospitality for patrons. In his presentation, he will motivate and inspire attendees to grow the produce footprint in the restaurant industry by developing strategies that truly engage consumers.

Tips and Tricks of the Trade: Fresh Marketplace and FreshTech

ew products and concepts will be on display throughout United Fresh’s 2016 Fresh Marketplace, which is designed to provide attendees with ideas ripe for the picking. Another highlight of United Fresh 2016 is United FreshTech, a display highlighting the tools, technologies, equipment and services available in today’s produce supply chain, along with new packing and packaging equipment, unique seed varieties, refrigerated transportation solutions, food safety, innovations, and more. Senior executives can visit United FreshTech to garner new information as they make decisions on operations, food safety, quality control, warehouses and packing houses, and more.

More focused networking will take place in business suites on the foor of the marketplace, which are available for companies to use for private meetings with guests, planning sessions or their own team meetings.

About United Fresh Produce Association Founded in 1904, the Washington, D.C.-based United Fresh Produce Association brings together companies across every segment of the fresh produce supply chain, including growers, shippers, fresh-cut processors, wholesalers, distributors, retailers, foodservice operators, industry suppliers and allied associations. The organization empowers industry leaders to shape sound government

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policy, delivers the resources and expertise companies need to succeed in managing complex business and technical issues, and provides the training and development individuals need to advance their careers in produce. Through these endeavors, United Fresh unites the industry in a common purpose: to build long-term value for members and grow produce consumption.

From Flowers to Freezers International Floriculture Expo and Global Cold Chain Expo 2016 are also at McCormick Place.

edefning the concept of “all access,” one badge will allow industry professionals to attend FMI Connect, United Fresh 2016, the International Floriculture Expo and Global Cold Chain Expo 2016. Hoping to spur growth stemming from consumers’ penchant for fresh blooms (no pun intended), foral professionals will gather to share ideas and learn new insights at the International Floriculture Expo (IFE), set for June 21-22 at McCormick Place in Chicago. Produced by Diversifed Communications, IFE is the leading trade exposition and educational conference for mass-market retailers, supermarkets, garden centers, retail forists, growers, nurseries, event foral designers and other retailers of foral and foliage products.

By Lynn Petrak

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International Floriculture Expo June 21-22 McCormick Place Chicago To register, visit www.floriexpo.com Phone: 207-842-5508 Email: info@floriexpo.com

Global Cold Chain Expo 2016 June 20-22 McCormick Place Chicago To register, visit www.globalcoldchainexpo.org Phone: 703-373-4300 Email: email@gcca.org

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May 2016 | progressivegrocer.com |

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About International Floriculture Expo Produced by Diversified Communications, the International Floriculture Expo is an annual event in which the floral industry gathers to discover new products, source new suppliers, network and learn. Portland, Maine-based Diversified Communications is an international media company providing market access, education and information through global, national and regional face-to-face events, e-media, publications and television stations. Learn more at www.floriexpo.com.

At this event, those in the foral industry will discover new products, source suppliers, learn about trends and industry news, and network with one another. New this year to the conveniently co-located industry events in the country’s heartland is Global Cold Chain Expo 2016, designed to provide a one-stop-shop for innovations across the global food industry cold chain. Among other features, the expo will highlight the tools, technologies and services used and needed by those throughout the cold chain, as well as ofering seminars led by innovators and experts. PG

About the Global Cold Chain Alliance The Global Cold Chain Alliance (GCCA) represents all major industries engaged in temperature-control logistics. GCCA is based in Alexandria, Va., with offices or affiliates in Australia, Brazil, China, Europe, Guatemala, India and the United Kingdom. Learn more at www.gcca.org.

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Energy Supplements

Nonfoods

Sales

Surge

The energy category reboots with natural ingredients, new delivery systems. By Barbara Sax

onsumers are still looking for products that give them an energy boost, but they’re shifting toward more natural products and new delivery systems. Te Hartman Group’s “Health and Wellness 2015” report found that while six in 10 consumers said “having enough energy for an active lifestyle” was important to meeting their wellness aspirations and goals, almost a third of consumers viewed their energy levels as urgently needing improvement. Tat energy defcit means the market for energy supplements has a huge upside, particularly for products ofering shoppers something new and diferent. IRI data shows that the market for energy powders and shots is still strong, with dollar sales for energy drink mixes across all outlets for the 52 weeks ending March 20, 2016, up more than 10 percent and dollar sales of energy shots up nearly 3 percent. Category leader Living Essentials, which makes the 5-hour Energy brand, has

a whopping 91 percent of category sales and dollar sales gains of nearly 3 percent for the period. Farmington Hills, Mich.-based Living Essentials keeps the brand interesting with new favors and formulations. Tis May, 5-hour Energy launched a limited edition extra-strength cherry favor backed by a causerelated marketing campaign. Te company will donate 5 cents from the sale of every specially marked red-whiteand-blue bottle of Extra Strength Cherry favor 5-hour Energy to the Special Operations Warrior Foundation (SOWF), a top-rated nonproft organization that ensures funding for a full college education for the surviving sons and daughters of fallen military special operations forces who lose their lives in the line of duty. While 5-hour Energy dominates the category, a closer look reveals that newer delivery systems are growing the category beyond traditional shots and mixes to include gummy products and lozenges. Energy bars are also an area for growth. May 2016 | progressivegrocer.com |

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Energy Supplements

Honey Do SPINS data for the 52 weeks ending March 20, 2016, shows energy gummies up nearly 60 percent, lozenges up 58 percent and powders up nearly 40 percent. “Our energy chews are growing signifcantly,” afrms Jennifer Shea, director of marketing at Honey Stinger, a Steamboat Springs, Colo.based manufacturer of natural sports nutrition products. Te company entered the market with two favors of honey-based naturally cafeinated chews, and has expanded its ofering to include seven favors and three kinds of protein chews. “Te grocery channel is seeing double-digit

Sleep Aids Wake Up Consumers are increasingly turning to over-the-counter products for a burst of energy, and when it comes time to relax, manufacturers are making sure they have those options covered as well: Dollar sales of sleeping remedies were up nearly 9 percent for the 52 weeks ending March 20, 2016, according to Chicago-based IRI. Procter & Gamble’s Zzquill is the segment leader, with nearly 59 percent of sales, but other brands are showing stronger growth. Sales of Neurobrands’ Neuro Sleep Drink were up nearly 19 percent, while Natrol Sleeping liquids experienced a 28 percent spike in sales. Meanwhile, Dream Water saw sales slide 20 percent; perhaps to arrest that decline, the company recently introduced d a powder delivery system, Dream Water Sleep Powder. The powder can W be mixed with hot or cold water, or b used without water. Powdered deu llivery systems are growing across ssupplement segments. Sleeping tablets showed even sstronger increases, with overall sales up 9 percent and the Nature’s Bounty, u Natrol and Pharmavite brands all showN iing increases of more than 20 percent.

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

growth from new and emerging brands,” adds Shea. “Legacy brands are sharing shelf space with newcomers that have a more natural positioning, healthy positioning. Newer products stress a sustained energy approach and, in a nod to the sports nutrition category, are as likely to be called ‘fuel’ as energy products.” According to Shea, Honey Stinger’s items debuted in vitamin shops and biking specialty stores. “We’ve started with our honey-based gel energy products, and growth has been great,” she says. “Since we rolled out to more mass retail, we’ve seen an overall movement away from synthetic ingredients toward more whole ingredients and more natural sources of energy.” Designed to be used before, during and after activity as an energy boost, Honey Stinger energy chews, gels and bars are positioned as sustainedenergy products rather than as stimulants. Honey Stinger’s chews are carried by select Harris Teeter stores, where they’re merchandised on clip strips near the register. “Te products are pegged and are easy to add into the front-register mix,” says Shea, noting that the company is working on a new wire counter rack that can be used at checkout to take advantage of the impulse nature of the category. Whole Foods Market has sampled the product in stores and will partner with the company on a promotional program this spring.

Beet It and Chew Honey isn’t the only natural ingredient making inroads in energy supplements. Boulder, Colo.based Red Ace Organics makes an energy shot product that’s carried by King Soopers and Whole Foods. Te 2-ounce beet-and-turmeric shot, which retails for a suggested $4.99, is gaining distribution in mass channels. Nuun (pronounced “noon”), a company with a sports nutrition heritage, is also widening its distribution in mass channels. “Te category has really grown to include not only shots, but powders, gum, tablets that you chew, and bars,” observes Nathan Underwood, director of sales at Seattlebased Nuun. “Te products ofer retailers a great opportunity to increase their ring. We’ve seen these products have a lot of success at the checkstand.” Te Nuun brand was part of an experimental family-friendly checkout lane program at Raley’s. At a suggested $6.99 for a tube of 10 tablets, Nuun has a higher price point than items found at a traditional checkout, but Underwood thinks that consumers looking for natural products are willing to pay more. “We’ve reformulated to become 100 percent natural, and believe consumers are looking for that,” he asserts. In addition to checkstand merchandising options, Nuun ofers shelf-ready packaging that’s commonly found in the supplement and bar aisles in supermarkets.

Take a Powder In the powder segment, Eboost has been rolling out its energy packets to food retailers, and is currently on store shelves at H-E-B and Meijer. “It’s hard for consumers to understand how traditional energy shots are good for them, with all of the negative publicity that surrounded some of the energy drinks,” admits Tomas Ortis, director of sales for the brand. According to Ortis, Eboost powders, available in three favors, are a hybrid of “Emergen-C and Gatorade.” Te New Yorkbased company, which also markets an energy and vitamin shot in three favors, recently launched a fourth favor in its powder packet line. Eboost ofers on-shelf and checkout merchandising options for retailers, and has created promotions to introduce more consumers to its products. “Retailers are pretty price-sensitive, and a lot of new players have gotten into the category, so we are couponing and promoting the product on deal to keep interest high,” says Ortis. Functional Fun Another new delivery system, functional chocolates, will soon be rolled out to the mass-market channel.

Boulder-based Good Day Chocolate has created a new category with its Fair Trade, non-GMO candies. Te product, with eight candies packaged in a brightly colored 2.5-inch box, is currently being sold exclusively at Whole Foods, but will roll out in late summer to other retailers. “Te energy market is not going away, but the shot segment is saturated, and consumers want something new,” asserts Simeon Margolis, co-founder and CEO of Good Day Chocolate. Margolis and his team have created a number of display options, from foorstands to shelf extenders and countertop displays. “Te category should really be moved away from functional foods to an energy set,” he says, noting that drug store chain Walgreens has created energy sets in its stores. Honey Stinger’s Shea sees more retailers showcasing product at checkout, as well as fnding a home for on-the-go energy products in supplement sections. “Te section was often buried at the back of the store, but we’ve seen more stores moving the products up to capitalize on the growth in the category,” she says. “Retailers like Wegmans and Giant Eagle are adding some energy products beyond 5-hour into the checkouts next to candy, and on shelves near meal replacement bars.” PG

The category should really be moved away from functional foods to an energy set.” —Simeon Margolis, Good Day Chocolate

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Professional Development

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A Global Food Retail Experience At FMI Connect 2016, all are welcome. By Lynn Petrak

Te invitation to “everyone” in the industry refects a truly global focus on delivering food products that shoppers want and need. Tis year’s FMI Connect includes international food companies and organizations from across three continents, as FMI bolsters its international platform. From all corners of the world, more than 12,500 industry professionals will gather June 20-23 at McCormick Place Convention Center, in Chicago. Tose who comprise the food retail business, including wholesalers, merchandisers, operations personnel, CIOs and CTOs, will discover new ideas and products while creating and strengthening partnerships and enhancing their own professional development. Highlights of FMI Connect include an expansive expo featuring displays from more than 450 exhibitors, and 40 educational sessions led by a full roster of seasoned presenters. To help veryone to the table.” partners connect in a more direct way, FMI Connect is Tat’s the tagline for this year’s FMI ofering the Connect Business Exchange (CBX), a free tool Connect event, and one that resonates for show guests that matches food retailers and suppliers for with retailers selling to consumers 30-minute one-on-one business meetings. who connect with one another — and Just as the global food retail market includes a spate of indirectly, with those who produce new products, this year’s FMI Connect features new or exand provide their food — at the table, panded oferings for visitors headed to the Windy City to whether it’s a traditional dinner table at home, a bistro table harness the winds of change in the industry. Among those inside a grocerant, or, for that matter, a work desk or soccer new/expanded oferings are a greater focus on supermarket feld that doubles as a place to eat on the go. chefs, the reintroduction of the CBX, a Fresh and PreOn another level, the event itself is a coming together of pared Zone featuring ready-to-eat products that appeal to industry leaders in a similarly communal way to determine Millennials, a Health and Lifestyle Zone, Meet and Learn and set trends, share consumer insights, exchange ideas and Power Hours with roundtable discussions led by exhibiinformation on technology, meet one-on-one with suppliers, tors, and the FMI Tech Bar. sharpen leadership development skills, and In this era of interconnectedness and imdiscover innovations across the industry. mediacy, FMI Connect is linking industry “FMI Connect is designed to literally FMI Connect 2015 professionals in other ways. Te Chicago event bring everyone in the grocery industry to the June 20-23 is co-located with the International Floriculture table to share ideas, products, partnerships McCormick Place Expo, United Fresh 2016 and, new this year, and professional development so that atChicago Global Cold Chain Expo. tendees can realize their greatest ambitions,” To register, Beyond Chicago, FMI Connect is also says Leslie G. Sarasin, president and CEO visit www.fmiconnect.net teaming up with the Summer Fancy Food of Arlington, Va.-based Food Marketing Phone: 202-452-8444 Show, in New York. FMI and the Specialty Institute. “Together, we’ll explore fresh Food Association, which puts on the Fancy prepared and omnichannel trends that are Food Show, are working together to ofer inchanging the way we do business; make the centives to international food industry executives to attend mental, emotional and social connections that spark creativity; both shows. Te Summer Fancy Food Show runs June and globally showcase the innovative thinking taking place in 26-28 at New York’s Jacob K. Javits Convention Center. our industry that is shaping the future of food retailing.”

“E

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

FMI Invites Everyone to the Table June 2016

MI Connect is an energizing, eyeopening experience for frst-timers and longstanding industry leaders alike. A strategic break from the day-to-day, FMI Connect fuels creative ideas, boosts morale and gets your people excited about new possibilities in food retail. With three days in Chicago, you’ll not only strengthen your team, but also your business. Bringing more people to FMI Connect multiplies the number of meetings your company can conduct with trading partners in the CBX forum and broadens the variety of workshops that can be covered, thereby amplifying the knowledge brought back to the ofce. Your tech leaders will surely want to participate in Pulse: Technology Enabling the Path to Modern Retailing — an all-new event for 2016. We’ll be tackling all angles of omnichannel, with the goal of providing actionable information and insights on leveraging technology to better serve your customers and increase your proftability. Additionally, make sure your buying teams allow plenty of time to explore the latest

innovations and trends in the FMI Expo. Taking place alongside FMI Connect, Future Leaders empowers your high-potential employees and developing leaders with supermarket-specifc leadership skills, personal growth tools, confdence and connections. Te program fosters a solid working rapport between current leaders and their mentees, and creates a dialogue on important issues of change, innovation and breakthrough thinking. Both events provide a great team-building experience and reward the right people, broaden their perspectives, strengthen their commitment to your organization and give them the skills to lead it. I’m sure you will agree that there isn’t a better investment your company could make. I hope you will join me for this exciting event! Please visit www.fmiconnect.net to learn more. Best Regards, Leslie G. Sarasin President and CEO Food Marketing Institute

The Baker’s Choice. The all-round artisan deck oven. Your next MIWE condo: E Perfect for the complete range of baked goods including breads, pastries, pizzas E Various sizes to choose from to hold one, two, three or 4 pans capacity E Simple and easy to operate E Quick and easy to clean

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May 2016 | progressivegrocer.com |

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Professional Development

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Head of the Table: Speakers and Presenters

his year’s FMI Connect features marqueename culinary experts and industry professionals who have their fngers on the pulse of consumers around the world. Tese experts will share their insight in 40-plus educational sessions that include keynote presentations and down-in-the-details workshops. “Within the breakouts, general sessions and expo education, the lineup of speakers focuses on exploring trends and innovations,” remarks Carol Abel, VP, education for FMI. “For example, we have a breakout session on winning strategies in consumer-centric retail health care. Consulting frm Oliver Wyman has found that connecting with the consumer’s focus on health, wellness and nutrition preferences has implications for center store products for a retailer to consider.” Again placing the emphasis on “Everyone at the Table,” three general sessions will bring together attendees in one setting to train the spotlight on trends that afect all facets of food retailing:

Steve Case Chairman and CEO Revolution LLC “The Third Wave: An Entrepreneur’s Vision of the Future” Case, co-founder of AOL, is chairman of the company that introduced LivingSocial, Zipcar and Revolution Foods. He will share insights from his new book on entrepreneurialism and provide a road map for those in the food retail business to cut through a world of rapidly changing technology. (Te frst 1,500 attendees of this session get a free copy of Case’s book.) Leslie G. Sarasin President and CEO Food Marketing Institute “The Ins and Outs of Shopper Thinking: An Exploration of 2016 U.S. Grocery Shopping Trends” When it comes getting inside shoppers’ heads, Sarasin relies on a veritable brain trust. In this session, she’ll reveal the top fndings of FMI’s “2016 U.S. Grocery Shopper Trends” report and share insights on what today’s customers expect, from store design to product assortment to staf interaction. Leslie G. Sarasin, President and CEO, FMI Mario Batali, chef, restaurateur and co-host of ABC’s “The Chew” Robert Irvine, chef and host of Food Network’s “Restaurant: Impossible” “Riding the Wave of Food Trends” Sarasin talks with culinary stars Batali and Irvine about which food trends are waves worth riding. Also in this session, FMI will celebrate the winners of its annual Store Manager Awards.

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FMI President/CEO Leslie G. Sarasin presents findings from the “2015 U.S. Grocery Shopper Trends” report at FMI Connect 2015.

A series of co-located Future Leaders sessions from FMI’s leadership training program will take place at FMI Connect as well, designed for high-potential employees and current leaders alike. Highlights include sessions on “Building World Class Teams: Te 8 Essential Elements of Human Synergy,” led by Robyn Benincasa, a bestselling author and world-champion adventure racer, and “Making the Most of Uncertainty: Changing Markets, Changing Times,” led by Garrison Wynn, author of “Te REAL Truth About Success.” “We’ve timed Future Leaders during FMI Connect so attendees can get the biggest bang for their buck,” says Abel. “Te integration is designed to help our future leaders practice what they’re learning and network with the industry, and provides a chance for them to see beyond their daily tasks and glimpse the entire food retail universe.” According to Abel, the Future Leaders program enables emerging leaders to become more agile, transform and prosper in this ever-changing industry. “Te leadership program delivers an ideal learning experience with six in-depth sessions and eight hands-on workshops designed to help participants share challenges and best practices,” she says. Also part of FMI Connect, Pulse: Technology Enabling the Path to Modern Retailing, is an invitationonly event that brings together CIOs, VPs, and senior marketing, merchandising and sales professionals from both retailers and CPGs to talk about changes in the industry, opportunities to improve omnichannel proftability and enhancing the shopping experience. Hosted by FMI, Progressive Grocer and its sister publication Retail Leader, Pulse sessions include Shelly Palmer, of Palmer Advanced Media, and Nadia Shourboura, of Hointer Inc. Additionally, a panel of retailers from Safeway, Roche Bros., Ahold’s bfresh/Fresh Formats LLC and Wakefern Corp. will discuss “Getting IT Right: Te E-Commerce, Mobile, Analytics and Store Revolution.”

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

Experts at the Expo

tap into transformative technology (www.fmiconnect. net/2016/experience-innovation/pulse).

his year’s FMI Expo at FMI Connect features hundreds of exhibitors ofering a close and often frst look at a variety of fresh and perishable products, packaged grocery items and frozen products. Attendees will discover innovations in retail technology, store equipment and design, health and wellness, and corporate services, among other segments. Te expo brings people to the proverbial table in other ways to share ideas and learn something new, via live events in the FMI Learning Lounge and the FMI Impact Area, where culinary experts Mario Batali and Robert Irvine will entertain and educate attendees on the show foor. Other hallmarks of the FMI Expo are the Pavilion and Zone areas, spotlighting topics and trends including: Tech Zone: Featuring “Tech Byte” talks, Happy Hour and a demo of the “Foodini.” Chef Showcase: A gathering of culinary professionals who share menu and ingredient trends and talk about what’s working for fresh, prepared and in-store dining. Pulse: An event-within-an-event, presented by Progressive Grocer and Retail Leader, that allows attendees to

Health and Lifestyle Zone: A showcase of opportunities to connect with customers seeking healthy choices, solutions and wellness programs. Food Safety Zone: Te place for industry professionals and leaders to learn more about FSMA and certifcation options. Fresh & Prepared Zone: Learn how to expand this part of the business with 20-minute “Fresh Bite” presentations, cooking demos and vendor solution partners. FMI Bistro: Lunch or snacks are served up right on the Expo foor. CBX: Te Connect Business Exchange is a place for one-on-one meetings. Private Brands Zone: Participants can check out new opportunities in private brands through “Brand Bites” presentations, vendor solution partners and interactive sampling from a special food truck. International Pavilions: Go around the world and talk to food retailing suppliers from leading food production countries such as Italy, China, Greece, Tailand and Mexico.

at... ¨

What’s on Trend Just Made Taste Sensible Choices Authentic Recipes

Booth # 2533 May 2016 | progressivegrocer.com |

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2016 FMI Connect Schedule at a Glance Monday, June 20

7 a.m.—5 p.m.: Registration open noon—5 p.m.: CBX-Connect Business Exchange open

Tuesday, June 21

7 a.m.—4 p.m.: Registration open 7 a.m.—9:30 a.m.: CBX-Connect Business Exchange open 8 a.m.—9:50 a.m.: Education Workshops 8 a.m.—8:50 a.m.: Innovations in Center Store: Category Strategies You Can Use 8 a.m.—8:50 a.m.: Making E-Commerce Profitable: Lessons from European Grocers 8 a.m.—8:50 a.m.: The Golden Rule Revolution: Engaging the Next Generation 8 a.m.—8:50 a.m.: Are You Ready for the New FSMA Sanitary Transportation Mandate? 8:45 a.m.—9:45 a.m.: Opening General Session: Building World Class Teams: The 8 Essential Elements of Human Synergy 9 a.m.—9:50 a.m.: Applying Global Food and Flavor Trends to Private Brands 9 a.m.— 9:50 a.m.: Serving Shoppers Better: The Industry Paradigm Shift from Category Management to Shopper-Centric Retailing 9 a.m.— 9:50 a.m.: Prepared Foods Innovation … Relevant Trends for Every Segment 9 a.m.—9:50 a.m.: Winning Strategies in Consumer-Centric Retail Healthcare 10 a.m.—11 a.m.: The Third Wave: An Entrepreneur’s Vision of the Future 11 a.m.—4 p.m.: Expo open 11:15 a.m.—12:30 p.m.: Standing Tall In Leadership: How to Initiate and Manage Necessary Conversations at Work (Leading Others track) 11:15 a.m.—12:30 p.m.: “Brand Me” — Developing Your Authentic Brand (Developing Yourself track) 11:30 a.m.—2 p.m.: FMI Bistro open 11:30 a.m.—3:30 p.m.: CBX-Connect Business Exchange meetings noon—1:30 p.m.: Political luncheon with special guest Charlie Cook 12:15 p.m.—1 p.m.: Five Top Trends in Fresh Foods You Can Use to Accelerate Growth 1:30 p.m.—2:45 p.m.: The Secrets to Building a High-Performance Team. (Leading Others track) 1:30 p.m.—2:45 p.m.: Unleash the Power of YOU! (Developing Yourself track) 2 p.m.—2:45 p.m.: Desserts! By Award Winning Chef Luca Manfe from Bauli! 2:15 p.m.—3 p.m.: Using Beacon Technology to Engage Shoppers 3 p.m.—3:45 p.m.: General Session: Innovation and Creativity: Flying Outside the Box 4 p.m.—5 p.m.: The Ins and Outs of Shopper Thinking: an Exploration of “2016 U.S. Grocery Shopper Trends” 6 p.m.—9 p.m.: Opening Night Celebration at the Field Museum

Wednesday, June 22

7 a.m.—9:30 a.m.: CBX-Connect Business Exchange open 7 a.m.—4 p.m.: Registration open 8 a.m.—8:50 a.m.: Creating Fresh Destinations Throughout the Perimeter 8 a.m.—8:50 a.m.: Driving Private Label Sales Through Digital Execution 8 a.m.—8:50 a.m.: Managing the Cash Transaction at the Point of Sale: Mobile or Traditional Stack 8 a.m.—9 a.m.: General Session: Crafting Your Company Culture to Get Uncommon Results 8 a.m.—8:50 a.m.: 2020 Retail Food Channel Vision for GM and HBC Categories

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8:30 a.m.—9:45 a.m.: Pulse Visionary Speaker Breakfast: Succeeding in a Complex, Competitive, Connected World 9 a.m.—9:50 a.m.: Checkout Solutions: Consumer Impulse in Action 9 a.m.—9:50 a.m.: Are You At Cyber-Risk? Hidden Pitfalls Executives Need to Know 9 a.m.—9:50 a.m.: How Do You Get a Seat at the Table for National Family Meals Month? 9 a.m.—9:50 a.m.: The Power of Produce: An In-Depth Look at Produce through the Shoppers’ Eyes 9 a.m.—9:45 a.m.: General Session: Good Is Not Enough: Leveraging Inclusion in Today’s Marketplace 10 a.m.—11 a.m.: Riding the Wave of Food Trends 11 a.m.—4 p.m.: Expo open 11 a.m.—2 p.m.: Future Leaders attendees at the FMI Expo 11:30 a.m.—12:30: p.m.: Explore Food Trends with Mario Batali and Kevin Davis 11:30 a.m.— 3:30 p.m.: CBX-Connect Business Exchange meetings 11:30 a.m.—2 p.m.: FMI Bistro open 12:30 p.m.— 1:30 p.m.: Robert Irvine (live) 12:30 p.m.—1:30 p.m.: FSMA: What Every Retailer Should Know 1 p.m.—1:45 p.m.: Top Trends in Global Private Brands Innovation 2 p.m.—3:15 p.m.: Translating Vision into Tactical Goals (Leading Others track) 2 p.m.—3:15 p.m.: Hardcore Soft Skills: A Leader’s Guide to Understanding, Engaging, and Inspiring Others (Developing Yourself track) 3 p.m.—4 p.m.: Pulse Visionary Speaker: How Technology Will Completely Reshape Food Retailing in 2016 3 p.m.—3:45 p.m.: Desserts! By Award Winning Chef Luca Manfe from Bauli! 3:30 p.m.—4:45 p.m.: Unconscious No More (Leading Others track) 3:30 p.m.—4:45 p.m.: How to Listen So People Can Hear You (Leading Others track) 4 p.m.—5 p.m.: Private Brands/Fresh & Prepared Reception 4 p.m.—5 p.m.: Independent Operator Reception 4 p.m.—5 p.m.: Pulse Zone Cocktail Reception 6 p.m.—9 p.m.: Wednesday Night Industry Celebration 7 p.m.—9 p.m.: Independent Operator Dinner 7 p.m.—9 p.m.: Pulse Dinner

Thursday, June 23

7 a.m.—2 p.m.: Registration open 8 a.m.—9 a.m.: General Session: Reality-Based Leadership 8:30 a.m.—9:45 a.m.: Pulse Visionary Breakfast Retailer Panel: Getting IT Right: The E-Commerce, Mobile, Analytics and Store Revolution 9 a.m.—9:50 a.m.: Developing Your Talent: Department Manager Survey Report 9 a.m.—9:50 a.m.: Grocery Digital Influencers: How Bloggers and Instagrammers Are “Foodfluencers” 9:15 a.m.—10:15 a.m.: Closing General Session: Making the Most of Uncertainty: Changing Markets, Changing Times 10 a.m.-2 p.m.: Expo open 10:15 a.m.—11 a.m.: Engaging the Shopper in Today’s Rapidly Changing Shopping Rituals 11:30 a.m.—2 p.m.: FMI Bistro open 12:15 p.m.—1 p.m.: Talking with Your Consumers About Labeling Transparency 1 p.m.—5 p.m.: Retail Dining, Culinary and Design Trends tour

Friday, June 24

9 a.m.—2 p.m.: All Day Chicago Food Retail Tour

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

TAP INTO THE POWER OF TECHNOLOGY THAT’S TRANSFORMING RETAIL. The pressure is on to engage more customers and secure their loyalty while cutting costs. The answers are at Pulse, taking place within FMI Connect Wednesday and Thursday June 22 – 23, 2016. Join a select group of 200 retail and CPG executives for two transformative days focused on retail trends, technological innovations and enhancing the shopping experience.

VISIONARY SPEAKERS, INVALUABLE NETWORKING AND BUSINESS FORWARD MEETINGS Shelly Palmer, CEO and Managing Partner at Palmer Advanced Media Nadia Shouraboura, Founder and CEO, Hointer, Inc. Sineesh Keshav, VP, IT Safeway John Lauderbach, VP, IT, Roche Bros.

Designed for CMOs, CIOs, and Vice Presidents of Merchandising, Marketing, Sales and Category Management, this exclusive new program—Pulse: Technology Enabling the Path to Modern Retailing—will provide a vital exchange of ideas on using technology to your advantage. Lead your business through this era of exponential change with insights from Pulse.

Visit FMIConnect.net/Pulse or contact Jeffrey Friedman at 201.855.7621, JFriedman@stagnitomail.com

June 20 – 23, 2016 I Chicago, IL USA McCormick Place (South Hall)

Suzi Robinson, Marketing Lead, bfresh/Fresh Formats LLC, an Ahold Company

Technology

Digital Engagement

Grocery’s

Challenge So many options, so few personalized connections. By John Karolefski

t’s a digital world nowadays, and grocery needs to adapt. To survive and prosper in today’s competitive landscape, experts believe that supermarket chains must connect with consumers digitally in a more personalized manner. Te ultimate goal is to leverage that connection to enhance loyalty to stores. “Digital is fast becoming the best way to communicate to shoppers in-store or pre-shop, provided that the retailer

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is smartly using shopper data to truly add value to the shopper’s trip,” says consultant Mark Heckman, former VP of marketing for Indianapolis-based Marsh Supermarkets. “Tat translates into meaningful, relevant ofers, not random deals in hopes of fnding a receptive shopper.” Cassandra Girard, global lead of consumer and travel industries at global software provider SAP Hybris, agrees, adding that the power has shifted to the digital consumer, and grocery shopping is no exception. Te

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

takeaway for retailers is that customers will develop loyalty to the grocer that can anticipate their needs, engage with them on the channels they prefer and simplify their shopping experience, she notes.

Consistency and Specificity What’s the best way for grocers to connect digitally with their customers? “A grocer needs to look at its business, break down silos and ensure there are consistent experiences for shoppers across their channels and from online to in-store,” asserts Aaron Reich, director of innovation for Avanade, a Seattle-based provider of business technology solutions. “A shopper who uses a printed loyalty card may now want to utilize that card virtually on their phone. Shoppers who clip coupons should have access to those same coupons on their phones for redemption. It’s no longer good enough to be customer-centric. Grocers need to embrace every opportunity and every customer interaction to gather knowledge to know and anticipate the needs and demands of individual shoppers, specifc to their profle, past behavior and location.” Other solution providers and analysts choose a specifc tactic for grocers to focus on: Loyalty Marketing: “Te best way for grocers to create a digitally relevant connection is by understanding each individual shopper’s needs, typically via a loyalty card program. Done well, a loyalty program provides the platform and reason to connect more personally,” says David Ciancio, chief customer strategist for Cincinnati-based Dunnhumby, which developed a highly regarded loyalty program for Kroger. Email: According to research by MarketingSherpa, email is the most popular digital channel for customers to receive regular updates and promotions from companies. “So, if time, resources and data analysis capabilities are scarce, and a grocer can only focus on one digital channel, email would be the best option,” says Daniel Burstein, director of editorial content for the Jacksonville, Fla.-based marketing research frm. Mobile: Heckman, the consultant, insists that mobile is the most important way to make connections. “If you cannot connect with the shopper via their mobile with a comprehensive interface of deals, product information, points accumulated, etc., the program will be less effective than it could be,” he cautions.

Store Circular: “Te digital circular is the most powerful marketing channel to connect with consumers. It is the only way for a retailer to tell their weekly story, showcase what’s new in-store and visually merchandise hundreds of items in a beautiful way,” says Seth Stover, managing director, partner development at Toronto-based Flipp Corp., which uses technology to provide shopping solutions. Beacons: Amit Bhardwaj, senior director of customer loyalty for Marsh Supermarkets, speaks glowingly of beacons, which the chain has installed in 73 stores across Indiana and Ohio. “Beacons open up the store to connect with shoppers. Tey become a game changer. It allows you to make an ofer when the shopper is in the right place and in the right state of mind,” he said in a recent presentation at the Shopper Marketing Summit, hosted by the Path to Purchase Institute. Social Media: Rachael Cihlar, senior strategist at TapInfuence, a Boulder, Colo.-based social media provider, says that “infuencer marketing” — the practice of delivering a brand message to consumers through social infuencers who are passionate about certain subjects — has emerged as one of the best ways for grocers to connect with their consumers online. For instance, a grocery chain could give high-profle food bloggers a gift card and ask them to purchase items and create an original recipe, which they would then feature in photos in their blogs and social media posts. All content would reference the grocer where they purchased the items and even include a hashtag.

There is no silver bullet in terms of which channels or tactics grocers should capitalize on. The key, however, lies in the ability to cater to each individual customer.” —Cassandra Girard, SAP Hybris

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Technology Digital Engagement

“Tere is no silver bullet in terms of which channels or tactics grocers should capitalize on,” SAP Hybris’ Girard argues. “Te key, however, lies in the ability to cater to each individual customer. One of our grocery customers, Brookshire Grocery Co., has recognized the importance of a digital core to serve their customers. Teir digital core enables them to quickly and proactively adjust to demand, while helping increase sales and customer satisfaction.”

Strategic Moves Girard urges grocers to start implementing personalized strategies to connect with consumers. Her recommendations include: Real-time Contextual Promotions: Send customers a text with appropriate in-store ofFor a digital fers when they’re in a store or nearby, based on connection to geolocation data.

occur, it must be relevant Digital Promo Bundles: Tese should be specifc and have an to the customer and may include next-bestaction recommendations if their usual product is appropriate unavailable online or in-store. frequency to their needs, and that may vary Weekly Recipe Newsletters: Ideally, these newsletters should point to products that the by shopper.” —Scott Bauer, PwC

shopper may be interested in that are on sale and in stock.

Value-added Services: Examples include subscriptions, meal kits, and recommended shopping lists based on brand, dietary habits or health goals.

Lagging Behind With such a wide variety of tactics available to grocers, one might assume that they’re avidly connecting with consumers digitally in a personalized way. But that’s clearly not the case, accord-

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ing to experts who track such activity. “Largely, grocers’ digital connection with consumers is quite low,” points out Scott Bauer, retail and consumer partner at PwC, a New York-based consultancy. “Weekly circulars put into email or online do not count as a connection; neither do blast emails informing them of special sale prices. For a digital connection to occur, it must be relevant and have an appropriate frequency to their needs, and that may vary by shopper.” Burtein, of MarketingSherpa, believes that the grocery industry has been “somewhat of a laggard” in this regard, especially when compared with other sectors. Its use of such tactics as digital coupons and sweepstakes, he says, seems more focused on deploying the technology than on serving the customer. “Te journey has only recently begun for the grocery industry,” observes Dunnhumby’s Ciancio, “and so the efectiveness of digital connections is only modest at the moment. “Loyalty is won in-store through great shopping experiences and respectful pricing and promotions,” he goes on to say, “but it can be lost by inconsiderate digital marketing. Grocers must not regard digital as only a channel, but rather as a more personal promise to deliver value, earn loyalty and trust, and to show respect for the shopper.” PwC’s Bauer ofers encouragement to grocers planning to start or ramp up their digital connection with consumers through loyalty programs, special ofers via email or text, social media, or other tactics. “Te manner in which these strategies are executed is what is critical,” he says. “Tey must be personalized, frequency must not be overwhelming, and they must be relevant to the shoppers’ needs. If a grocer expects shoppers to be loyal, the shoppers expect the grocer to know and appreciate their business by ofering unique opportunities for products, discounts or experiences.” PG

free webcast series

Buy Online, Pick-up in Store: Managing Endless Execution Complexity like a Pro

VIEW IT ON DEMAND NOW! Duration: 1 hour A high volume of line items is one of the many factors setting grocers apart when it comes to delivering on omnichannel customer expectations. If you’ve already tried going down the road of fulflling eCommerce orders at the store, you know fulfllment accuracy and worker effciency are critical concerns. If you’re thinking about embarking on this new world journey, you may feel some trepidation just counting the many considerations when picking an order on behalf of your customer: variable preferences with produce or meats, multi-temperature items, substitutions, deli orders, and more. eCommerce entails more than putting up a website and driving traffc to it. Join HighJump omnichannel supply chain expert Roger Falkenstein, as he discusses how successful grocers are: • Effectively and effciently executing in-store fulfllment • Managing labor cost to control eCommerce margins • Scaling their buy online, pick-up in store model proftably • And more… You’ll also hear frst-hand from a large grocery retailer on how they were able to optimize in-store fulfllment of online orders while becoming increasingly effcient in handling these ongoing complexities to stay competitive and increase sales and customer satisfaction.

Presenters:

Roger Falkenstein, Omni-channel Supply Chain Expert, HighJump

Klaus Werner, Head of Ecommerce, Lowes Foods Moderator:

VIEW IT IN THE ARCHIVE!: www.progressivegrocer.com/webcast/HighJump2016 Presented by: Sponsored by:

Joan Driggs, Editor-in-Chief, Progressive Grocer

Supply Chain

Fleet Management

Driving Change

New technology, daunting regulations and capacity challenges are driving the trucking industry in multiple directions. By Jenny McTaggart

NaTural SeleCTioN ryder has been a big proponent of natural gas and other alternative fuels.

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ohn Deris, SVP of national sales for Ryder System Inc., says he’s seen more changes in the trucking industry in the past fve years than in all of the 34 years he’s been with the Miami-based company. His sentiment is shared by Gary Petty, president and CEO of the National Private Truck Council (NPTC), an Arlington, Va.-based trade association devoted to the private corporate trucking feet industry. Indeed, the changes overtaking the industry — and hitting retailers equally as hard as other trades — include an onslaught of new technology, constant

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

regulatory changes and growing capacity requirements, thanks to the proliferation of SKUs in today’s supermarkets. Meanwhile, as technology is mining more data than ever before, retailers must fgure out how to aggregate the numbers to make smart, timely adjustments in policy and safety procedures. “It’s not just change we’re seeing — it’s rapid change,” says Deris. “It’s very difcult for companies to adapt. And when you throw in the proftability challenges associated with it, there’s a big element of companies not being able to do all these things.” As a result of the growing problems facing the industry, he’s seeing a “tremendous surge” in outsourcing from companies that once solely operated

Supply Chain

Fleet Management

Access to, and monitoring of, data to lower costs and improve productivity is by far the biggest trend in fleet management today.” —Brian Holland, Fleet Advantage

private feets. Some are choosing to go what he calls a “dedicated route,” by outsourcing all functions to companies like Ryder, while others have signed up for an on-site program, in which Ryder comes in and runs a complete maintenance operation at the retailer’s facilities. For his part, Petty sees the trucking environment slightly differently. He says that more retailers are using a mix of private feets and outsourcing, especially for inbound shipping. “Te mix may include a 3PL [third-party logistics provider], and it will vary by store locations and seasonality,” he notes. However, private feets are still popular in the supermarket industry, he contends, and encompass the largest companies (think Walmart) as well as smaller, regional players scattered throughout the country.

Technology Tidal Wave Te surge of new technology being rolled out to feet managers includes direct routing and rescheduling software, GPS tracking products (including handheld devices), active safety technology, and “green” technologies to help build a more sustainable feet, just to name a few. All of these tools have incredible potential to create a safer, more efcient feet — but they also often require retraining and other associated costs, as well as data analysis capabilities. One company that was actually created to help feet managers use their own data to make better decisions is Fort Lauderdale, Fla.-based Fleet Advantage. Brian Holland, president and CFO of the company, notes, “With the advent of on-board computers and, more recently, regulations requiring electronic logging devices, the industry is trending toward holistic feet management that considers all-in data refecting actual operating costs, rather than relying on anecdotal, incomplete or inaccurate data or previous practices. “Fleet executives are seeking tools to capture, visualize and interpret this type of data,” he adds. “Access to, and monitoring of, data to lower costs and improve productivity is by far the biggest trend in feet management today. Tis is especially so in the supermarket and retail supply chain.” NPTC’s Petty concurs, predicting that data management will be a major issue moving into the next fve to 10 years. “I know a retailer who has saved upward of 2 million miles by using routing software,” he says. “In another example, you now have drivers that are able to let stores know in advance if they’re going to be 15 or 20 minutes late, so the store can make accommodations in preparation.”

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Te challenge for retailers is fnding ways to continually refne their captured data and translate it into changes that can impact efciency as well as driver safety, notes Petty. In fact, active safety technology is one of the hottest areas of the business — and is essentially a precursor to automated trucks, he says. “With automated trucks, you’ll still have a driver in the seat, but the truck will be operating itself,” explains Petty. “Tis will do a lot to improve safety performance and compensate for human response time.” In addition to safety-oriented systems, expect “green” technology to continue to grow, according to Petty and others. It isn’t too hard to imagine solar-powered trucks in the future, he observes. For now, though, perhaps the biggest focus in the area of sustainability is on reducing emissions. “Many people are asking for ‘greener’ feets,” afrms Ryder’s Deris. “Using alternative fuels can lower a company’s feet emissions carbon footprint, and also their overall costs. While it hasn’t been as impactful over the last year because of the lower fuel prices in the marketplace, I think we’ll see alternative fuels take of again when we get back to a more realistic price point.” At that point, he says, Ryder will be “more than ready to take of with this technology.”

Regulatory Headaches Of course, regulations have also come into play, as the U.S. government continues to focus on protecting the environment. “We’ve With automated had three major trucks, you’ll emission changes, and we have anstill have a driver other one coming in the seat, but up in 2017,” notes the truck will be Deris. “Ten we operating itself. have another one in This will do a lot 2021. Every three to improve safety years or so, we’re performance and going to continue compensate to have an evolving for human demand for more response time.” regulation, better technology and — Gary Petty, better equipment.” National Private Deris also points Truck Council to numerous changes brought on by the U.S. Food and Drug Administration’s Food Safety Modernization Act. “Te regulations around Hazard Analysis Riskbased Preventative

Controls are going to be driving tremendous change in the food industry in the next few years,” he maintains. “It’s becoming more and more complex for companies to implement. It will change the way companies handle product, distribute product, manage the logistics of the supply chain, and more importantly, the way they do business and manage their cost controls.” In some cases, companies are dealing with antiquated warehousing and logistics capabilities, he adds. As if regulatory changes weren’t enough to bog down their feet management planning, retailers are also increasingly contending with multiple shipments and a proliferation of new products. “Strong competition is driving most food retailers to expand their portfolios,” explains Deris. “Tey’re being forced to make dramatic increases in their SKU oferings, which is forcing growth in shipping volumes and fulfllment requirements. Tis impacts everything from feet usage to driver utilization — and driver shortage is a major issue that’s impacting all industries dramatically.” In some cases, retailers must re-examine their warehousing capacity, including looking at mobile storage alternatives and updated inventory manage-

Every three years or so, we’re going to continue to have an evolving demand for more regulation, better technology and better equipment.”

ment systems, he points out. Adds NPTC’s Petty: “Tis increased inventory means that companies need to have better control of their capacity internally. Tat will help them make sure replenishment cycles are met and —John Deris, will ensure better accuracy.” Ryder System Inc. As SKU proliferation continues, along with a likely increase in globally traded goods, Petty predicts that longhaul trucking will gradually be replaced with shorter runs and more frequent stops. Likewise, the trend toward locally grown foods, as well as an uptick in online ordering (resulting in direct delivery to consumers), will also likely boost shorter hauls, he says. Regardless of how the trucking industry continues to change, one thing seems certain: Companies that stay on top of feet management trends, including better data management, will stay ahead of their competition. PG

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Equipment & Design

Floors & Ceilings

Top to

Bottom Supermarket ceilings and floors are becoming an integral part of an enhanced shopping experience. By Bob Ingram

ood retailers are growing more aware that the store environment can be a competitive advantage, and this awareness is extending to two of the most basic store elements: foors and ceilings. “In order to compete with other retailers, creating a heightened shopping experience is key, and this starts with the visual design,” says Elizabeth Sullivan, marketing manager at Parterre Flooring Systems, in Wilmington, Mass. “Creating an inviting environment for shoppers helps to enhance not only the current experience, but invites shoppers to return time and time again.” Sullivan says Parterre’s vast selection of luxury vinyl fooring designs helps retailers to create an overall aesthetic unique to their brand by using the look of wood-, stone-, concrete- or metal-like options. “Currently,” she notes, “wood-look designs are a popular choice, especially when creating various design aesthetics for diferent departments such as a specialty wine section or a foral department.” Sullivan emphasizes that the product is “installed seamlessly from departments to aisles, making it easy for shoppers and employees to navigate with shop-

Easy DoEs It Parterre’s woodlook flooring can be seamlessly installed.

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ping carts or stocking equipment.” She further points out that the material is 100 percent recyclable and requires minimal maintenance, eliminating the use of harsh chemicals or cleaning solutions. According to Tom Ricciardelli, president and CEO of Avon, Mass.-based SelecTech Inc., “Supermarkets are trending toward using more decorative styles, such as wood grains and natural stone styles. While most of the foors are still the standard VCT [vinyl composition tile] styles, the more decorative styles can accentuate a part of the store and help to create a more welcoming environment.” SelecTech’s entire product line consists of these more decorative items, including a variety of wood and stone styles, and the company can easily create custom styles based on a store’s design needs. “Supermarkets also struggle with repairing and changing fooring,” he notes. “Currently, there aren’t many options for addressing this problem. Some will use ‘click’ [interlocking] vinyl fooring in spot areas of the store to accentuate that section. Click vinyl isn’t that durable and doesn’t hold up well in the high-trafc environment of a supermarket.” In contrast, SelecTech ofers a robust, extremely durable interlocking tile that’s easy to install and can be placed directly on top of existing fooring, making a renovation project a snap for a supermarket, with little disruption of operations. “Our most popular product for supermarket use is our Freestyle interlocking resilient fooring, mostly

Pa., sees the current trends in supermarket ceilings as open-structure spaces with spot acoustical treatments to highlight featured areas, and ceiling clouds in conjunction with signage to help customers navigate to specifc areas of the store. She explains that fat ceiling clouds and curved ceiling canopies aren’t wall-to-wall ceilings and can be designed with wood, metal or a wide variety of colors on acoustical panels. “Specialty areas like produce, foral and wine tend to use more upscale ceiling visuals,” she notes, while “high-margin areas might use colored ceilings or wood ceilings to add warmth to select spaces.” Additionally, Armstrong’s Ultima Create ceiling panels can be customized to enhance a space and provide acoustics, as well as customizing key store areas, according to O’Neill. “Our ceiling solutions have high recycled content in mineral fber, soft fber and wood,” she points out. “We also ofer a ceiling recycling program that to date has recycled over 173 million square feet of ceiling tiles back into brand-new ceilings.”

in our stone styles,” observes Ricciardelli. “Our Freestyle is made with 70 percent recycled content and is 100 percent recyclable. We have a take-back program to recycle our product at the end of its life.” He concludes, “I see the future of supermarket fooring trending more to the decorative styles and away from the plain VCT looks of the past.”

On the Upside Moving upward, Scott Fischer, VP of operations and merchandise at Bakersfeld, Calif.-based Proceilingtiles Inc. says: “Te trend in supermarket ceilings seems to be both ease of care as well as design with fair. Smaller, select stores are opting for a more decorative look with colored tiles with an embossed appearance, while big-box brand stores are opting for the simple white plain tiles.” Both types of tiles ofer ease of care, are waterproof, mold- and mildew- resistant, and have a Class A fre rating, the highest for commercial use, he notes. According to Fischer, Proceilingtiles’ most popular supermarket ceiling products, based on sales, are the Stratford, from the ProLite Collection, and DuraClean tiles, from the Pro Series Collection. Te benefts of vinyl tiles are becoming more and more apparent, as is their popularity, he asserts, adding that “the future of supermarket ceilings — if left to us — is in vinyl tiles!” Cindy O’Neill, who handles marketing communications at Armstrong Ceiling Solutions, in Lancaster,

All the Light Moves Supermarket ceiling lighting has taken several steps forward. Current, powered by General Electric (GE), is intelligent lighting that provides an integration point for data from all types of smart devices such as mobile phones, video cameras, sensors, beacons and other devices, explains Jerri Trafet, senior retail marketing manager at GE’s global headquarters, in Boston. Current delivers innovation in intelligent lighting through visible-light communications (VLC), which allows grocers to communicate with customers and store associates, and to gather information from smart technology within the store. “In addition,” notes Trafet, “our indoor positioning capability allows supermarkets to gain important insights on shopping patterns, efectiveness of merchandise presentation, and store fow, product selection and conversion, as well as efective energy management and control.” Te product can be coupled with Predix, GE’s cloud-based operating system, to deliver real-time analytics and a platform capable of supporting the grocery industry’s drive to unifed commerce. Jake Summers, director, specialty markets at Northbrook, Ill.-based ConTech Lighting, says his company has plans to introduce a family of linear LED fxtures in late 2016. “Tis family of products will be low-profle in design and appearance, available in three diferent lumen packages, with each surpassing 100 lumens per watt, and three diferent optical distributions,” he explains. “Tis combination of high performance and beam control makes it an ideal LED linear fxture option for supermarket ceiling applications.” PG

heAvenLy CeiLing Armstrong’s ceiling clouds emphasize specialty areas.

Our indoor positioning capability allows supermarkets to gain important insights on shopping patterns, effectiveness of merchandise presentation, and store flow, product selection and conversion, as well as effective energy management and control.” —Jerri Traflet, general electric

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Food, Beverage & Nonfood Products

Iced Tea With a Twist

Taking inspiration from South America, the Brisk brand has launched an iced tea blended with yerba mate. Available in Mango, Dragonfruit and Cherry flavors, Brisk Mate delivers a “smooth, energizing iced tea with the great-tasting, bold flavors they expect from Brisk,” says Mandy Mazzeo, the brand’s marketing manager. At 90 calories per 16-ounce can, Brisk Mate is available for an SRP of $1.49. www.drinkbrisk.com

Super Salad

Asian salad kits are growing 52 percent faster than the total salad kit category, according to Nielsen Perishables Group, and Apio Inc. is riding this trend with the introduction of its Eat Smart Asian Sesame Vegetable variety. Delivering a blend of six superfoods — savoy cabbage, red cabbage, green cabbage, carrots, kale and crunchy cashews — and enhanced with crunchy sesame sticks and a sweet sesame dressing, the all-in-one salad kit offers a good source of essential minerals and omega-6 fatty acids, among other health benefits. A 12-ounce bag has an SRP range of $3.99-$4.99. www.eatsmart.net

Bite-sized Snacks

Sargento Foods’ Snack Bites deliver sticks of natural cheese that “pack big flavor into little bites,” at just 20 calories per serving. Available in four bold flavor varieties — Savory Garlic and Herb Jack, Wisconsin Sharp Cheddar, ColbyPepper Jack, and Chipotle BBQ Cheddar — Snack Bites appear in grocers’ dairy aisles nationwide in resealable bags for an SRP of $3.69. www.sargento.com

Silky & Smooth

“Our new line proves once again with [Alberto] VO5, you simply don’t have to pay more to look and feel beautiful,” says Nina Riley, VP marketing at High Ridge Brands, of its series of value-rich shampoos and conditioners. Each product in the line is infused with a five-vitamin formula that targets four of the most common hair problems. The Dry Scalp: plus Almond Oil variety helps soothe, relieve and moisturize the scalp, while Volumizer: plus Biotin boosts and amplifies for fullerlooking hair. Rounding out the line is Split Ends: plus Panthenol, which helps reduce damage and moisturize delicate hair, while Anti-Frizz: plus Argan Oil helps tame unruly hair for a sleeker look. The line is available for an SRP range of 99 cents-$1.19. www.vo5haircare.com

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advertiser index 5 Generation Bakers Ainsworth Pet Nutrition Anchor Packaging Avocados From Mexico Beaver Street Fisheries Better4ufoods Blount Fine Foods Calbee North America Califia Farms California Avocado Commission Campbell Soup Company Coca Cola NA Datepac, LLC DecoPac DeMet’s Distant Lands Coffee Diva International Inc. Domino Foods E&J Gallo ECR Software Emmi Roth USA Farmland Foods Inc. Fleet Advantage Food Marketing Institute FoodLink Forte Product Solutions General Mills Inc. Giro Check Gold Medal Products Goya Foods Inc. Hass Avocados Heineken USA Highjump Software

77 111, 115 16-17 123 68 56 Cover Tip, 62, Inside Back 103 137 69,127 26 29 75 75 31, 61 33 21 87 97 7 89 3 155 149 80 157 24-25 28 104 9 45 99 139

Iovate Health Sciences 143 Irving Consumer Products Inc. 40 Jack Links Beef Jerky 59 Jelly Belly 81 JTM Foods 78-79 Kelloggs Company 53 Loving Pets Products 113 Market Force Information 66-67 Mars Chocolate NA 51 Mason Ways Indestructible 94, 114 Mercatus Technologies 83-86 Milk Pep 13 Miller Coors LLC 4 MIWE 145 Mondelez Back Cover National Association for the Specialty Food Trade 71 Nature Sweet 126 Nestlé Nutrition 93 Nestlé Professional Inside Front Nuestro Queso, LLC 121 Perfetti Van Melle USA Inc. 107 Peri & Sons Farms 128 Post Consumer Brands 23 Robbie Flexibles 70 Royal Hawaiian Orchards 131 Sanders & Morley Candy 108 Sandridge Food Corporation 147 Save-A-Lot 82 Sovena USA 134 Stemilt Growers, Inc. 132 Stonefire Authentic Flatbreads 91 Thanasi Foods LLC 93 The Happy Egg Company 39 The Hershey Company 15 The Humane Society 42-43 The Little Potato Company, Ltd. 139 The Spice Lab 124 The Wonderful Company/Citrus 35 Tosca Ltd. 119 Toufayan Bakeries 72 Trion Industries Inc. 10-11 TW Garner Food Co 65 Tyson Foods Cover Tip, 48-49 Tyson-Crafted Creations 19 Well-Pict 129 Wisconsin Milk Marketing Board 81 WM Wrigley Jr Company 105

www.5generationbakers.com www.ainsworthpetnutrition.com www.anchorpac.com www.avocadosfrommexico.com www.grillmansfranks.com wwww.better4Ufoods.com www.blountfinefoods.com www.harvestsnaps.com www.califiafarms.com www.avocado.org www.campbellsoup.com www.coke.com www.datepac.com www.decopac.com www.demetscandy.com www.dlcoffee.com www.divacup.com www.dominosugar.com www.gallo.com www.ecrs.com www.rothcheese.com www.farmlandfoods.com www.smithfield.com www.fmi.org www.foodlinksusa.com www.forteproductsolutions.com www.generalmills.com www.VoltCash.com www.gmpopcorn.com/fudge-PG www.goya.com www.hassavocadoboard.com www.heinekenusa.com www.progressivegrocer.com/ webcast/HighJump2016 www.SixStarPro.com www.irvingconsumerproducts.com www.jacklinks.com www.jellybelly.com www.jjsbakery.net www.kelloggs.com www.lovingpetsproducts.com www.marketforce.com www.effem.com www.masonways.com www.mercatus.com www.milkpep.org www.millercoors.com www.miwe.com/condo www.mondelez.com www.fancyfoodshows.com www.naturesweet.com www.boost.com www.nestleprofessional.com www.nuestroqueso.com www.perfettivanmelle.com www.periandsons.com www.postholdings.com www.robbieflexibles.com www.royalhawaiianorchards.com www.sanderscandy.com www.sandridge.com www.save-a-lot.com www.sovenausa.com www.stemilt.com www.stonefire.com www.thanasifoods.com www.thehappyeggco.com www.thehersheycompany.com www.humanesociety.org www.LittlePotatoes.com www.thespicelab.com www.Wonderfulcitrus.com www.toscaltd.com www.toufayan.com www.triononline.com www.TexasPeteFoodservice.com www.tyson.com www.b2b.craftedcreations.com www.wellpict.com www.wmmb.com www.wrigley.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). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©2016 Stagnito Business Information All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI 48106. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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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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May 2016 | progressivegrocer.com |

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the last word

Forecasting the Turbulent Tides

etting fully into the swim of the nautical theme we cast for our annual countdown of the nation’s top-ranked food retailers, which begins on page 27, Burt P. Flickinger III, managing director of New York-based Strategic Resource Group, is awash with insights as to what’s churning the turbulent waters of a food industry in fux. “During the past fscal year, Te Super 50 has navigated through some of the stormiest seas in modern supermarket history,” says Flickinger, pointing to “a tsunami of supermarket bankruptcies” compounded by “a Bermuda Triangle of fnancial fallout” and a full-blown “nor’easter at one of the fastest-growing chains along the New England coast shutting down in the peak summer season (Demoulas/Market Basket).” Asked to further decode the unique patterns of the denizens of our fve Super 50 “oceans,” Flickinger is buoyant about the operators we’ve designated as being “At the Helm,” which he afrms “are winning the major battles in the wars not only on the sea (stores), but also in the air (e-tail).” Singling out Kroger as “the best managed multichannel retailer worldwide, with an exceptional leadership team” 25 years in the making, Flickinger also tips his cap to AlbertsonsSafeway, “for stabilizing the big-chain supermarket sector while brilliantly resurrecting the bankrupt A&P” and its metro New York banner afliates, as well as the spectacularly famed-out Haggen in the Pacifc Northwest. He also gives props to Wakefern/ShopRite for strides similar to those being made by the band of “Rising Tides” — Meijer, Giant Eagle, Hy-Vee, WinCo, Smart and Final, K-VA-T — whose “superb strategies and extraordinary innovation have raised the standards across the board for their shoppers.” Gazing at the swell of leaders charging “Beyond the Mainstream” with an expanded depth and range of extrafancy produce, free-from foods and organics, Flickinger extols “Kroger and WinCo for leading the way by cutting into some of Whole Foods’ previously most proftable and productive suburban markets in the West and Intermountain regions.” Also noteworthy are Sprouts’ and Trader Joe’s “expansion in spirit-based beverages and fresh perimeter oferings, as well as Aldi’s and Walmart’s [dramatically lower prices] on key value fresh and shelf-stable naturals and organics.”

New leadership and revamped in-store strategies are the common bonds of those Changing Course, including Target and Southeastern Grocers, which are altering tacks to execute new maneuvers. Flickinger believes “Target’s business will be bufeted on the stormy seas” until it secures a meaningful lifeline to its weekend out-of-stocks (OOS), while giving a passing grade to the early outlook for Southeastern Grocers’ new Winn-Dixie Florida East Coast format and fresh meat focus. However, he adds, the Jacksonville, Fla.-based chain appears to need reinforcement with in-store stafng, along with addressing some OOS issues as well. Meanwhile, stalwart among the members of the “Steady as Tey Go” brigade is the ship that Jack Brown built — Stater Bros. — “whose stakeholders were rewarded as it weathered the SoCal recession better than many of the larger chains,” Flickinger observes. He further foresees productive days ahead for Big Y, Demoulas/Market Basket, K-VA-T, Smart & Final, and Weis Markets, all of whose hatches are comparatively battened down versus “many competitors in transition.” Of particular note is “Steve Smith’s dynamic leadership, [as evidenced] by adding 29 stores acquired at a good value from Southeastern Grocers, as well as overall innovation, which should lead K-VA-T to record results.” As for K-VA-T’s share group partner Coborn’s — a part of whose native waters has been hit by the downturn of the Bakken Region oil boom — the multiformat St. Cloud, Minn.-based retailer has commendably added “a number of good people of late to withstand the wild weather blowing in from North Dakota.” Gazing at the much calmer waters now in play at Market Basket and Brookshire’s, as well as at a handful of other private, ESOP and publicly owned vessels holding their own on the choppy supermarket seas, Flickinger predicts “a good year ahead for the best-led food retailers to capitalize on the opportunities to take more unit sales away from the restaurant and on-premise dining sectors.” But make no mistake: Even the best of skippers must keep their ships enduringly equipped, in expectation of rough sailing, with deliberate planning, front-line reinforcement and grounded execution. PG Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

During the past fiscal year, The Super 50 has navigated through some of the stormiest seas in modern supermarket history.

162

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

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