Progressive Grocer - January 2015

Bottoms Up

Get the most out of the beer and wine categories Page 53

Super Friends

Produce powerhouses spark resolutions – and sales Page 74

Tech Transformation

Evolving retailer leverages new digital strategy Page 97

!

W E N Add news to your front-end with mers Nutella & GO! Pretzel. Consumers cious will delight in the unique delicious read taste of NutellaÂŽ hazelnut spread now with pretzel sticks!

g n i h c Laun 015 Jan. 2

Nutella & GO! is ranked 2nd among top front-end SKU’s*

12cnt front end tray

Nutella & GO! Pretzel is projected to be a Top 10 front-end item* Nutella & GO! Pretzel is the only snack offering Nutella 's delicious hazelnut spread with dip-able pretzel sticks ®

24cnt front end display

Order Nutella & GO! Pretzel Sticks today to drive high revenue and high profit on the front-end! *Source: IRI Total US MULO, Latest 52 WE 4/20/14

© 2015 Ferrero. All rights reserved.

Bottoms Up

Get the most out of the beer and wine categories Page 53

Super Friends

Produce powerhouses spark resolutions – and sales Page 74

Tech Transformation

Evolving retailer leverages new digital strategy Page 97

Walmart

Fresh & Easy

C&S

s cer Gro e l a les Who

y fewa + Sa s n o s t Alber Price Chopper

2015 Ones TO WaTch Page 33

2015 Ones To Watch

January 2015 • Volume 94 Number 1 $10 • www.progressivegrocer.com

MEET THE TEAM THAT SELLS MORE BEER

Newcastle presents the NEW VARIETY PACK. Stock up on the variety pack, and proft from the good taste of 21+ millennials, afuent shoppers who look for favor options.

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FOR THEIR TOTAL SHOPPING BASKET 2

ABV: 5.1% IBUs: 45

AVAILABLE MARCH 1st, 2015 12-packs: 4 12-oz. bottles each 24-packs: 8 12-oz. bottles each CONTACT YOUR DISTRIBUTOR REPRESENTATIVE TODAY. ENJOY NEWCASTLE PRODUCTS RESPONSIBLY ©2015 NEWCASTLE IMPORTERS, NEW YORK, NY 1. Spectra, Nielsen Panel Data, Total USA Grocery $2MM+, 52 weeks ending 12/28/13 2. Consumer Edge Insights’ Beverage DemandTracker

Š2015 Goya Foods, Inc. *Top selling coconut water SKU (in Grocery outlets) Source: Nielsen Strategic Planner, Total US (unit sales), 52 weeks ending 9/27/14

Driving Center–Store Growth... Naturally Increase your profits with innovation from the brand your shoppers trust.

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January 2015

features

Volume 94, Issue 1

cover story

fresh food

20

71

FoodsErvIcE

Industry EvEnts

Thinking Like a Restaurant

2014 Top Women in Grocery Gala Draws Record Crowd As well as collecting their awards, honorees took part in learning sessions, received pampering.

Opportunities abound as consumers continue to look at grocery stores as a dining option.

47 Industry EvEnts

Managers Take Action Industry Professional Store Manager Leadership Forum demonstrates the power of sharing.

90

LogIstIcs

Chain of Command Retailers are more focused than ever on their supply chains, as consumers’ expectations continue to soar.

grocery 53 BEEr/WInE catEgory ManagEMEnt

From Grains to Grapes Cross-merchandising, assortment optimization and trendy formats guide beer and wine category management.

64 soup

74

33

producE

2015 onEs to Watch

Regrouping, Reuniting, Reinventing How will the coming year treat this quintet of grocery standouts?

Superfood Season Te new year brings revvedup interest in nutritionally potent produce.

78

producE catEgory spotLIght

refrigerated & frozen foods 66

Dried-fruit Forecast Consumers call for nutritious snacks with a pinch of indulgence and plenty of convenience.

daIry

The Case for Dairy Te staple category looks to refresh itself with new products and positioning.

81

progrEssIvE grocEr ’s autuMn rEtaIL producE roundtaBLE

Cold Comfort

Focusing on the Future

Purveyors of the winter favorite weigh in on the best ways to play up the category.

Industry leaders explore challenges and opportunities for the produce business.

January 2015 | progressivegrocer.com |

5

nonfoods 86

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

HealtH, Beauty & Wellness

Display of Health Vitamins and supplements need to stand out in the supermarket.

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 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 Dan Alaimo, Bob Ingram, Jenny McTaggart, Lynn Petrak, Barbara Sax, Jennifer Strailey and Christina Veiders

88

e-cigarettes

Out of Sight E-cigarette vapor product sales continue upward, but food retailers face tobacco marketing obstacles.

technology 92 Data analytics

Future Tense Retailers are harnessing the power of predictive analytics to drive their businesses.

97

case stuDy

One Retailer’s Digital Journey Price Chopper evolves from value-driven to experiencedriven grocer, thanks to a new digital strategy.

equipment & design 100 retail FooDservice equipment

At Your Service Retail foodservice equipment suppliers are working with grocers to meet consumer demands.

departments 11 EDITOR’S NOTE: FDA CALORIE RULING: OVERREACH OR LOGICAL CONCLUSION? 12 BRAIN FOOD 14 IN-STORE EVENTS CALENDAR: MARCH 2015 16 NIELSEN’S SHELF STOPPERS/SPOTLIGHT: FRESH PRODUCE/PRE-CUT SALAD MIx 18 MINTEL GLOBAL NEW PRODUCTS: FROzEN AND REFRIGERATED PIzzA 28 NEW HORIzONS: SALUTING THE HEROES BEHIND EVERY WONDER WOMAN 30 ALL’S WELLNESS: GLOBAL PERSPECTIVE 106 THE LAST WORD: RESOLVE TO ENHANCE THE SHOPPING ExPERIENCE

ADVERTISING SALES & BUSINESS VP, Group Publisher Jeff Friedman 201-855-7621 jfriedman@stagnitomail.com 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 Courtney Warnimont 224-632-8215 • Fax: 888-847-1791 cwarnimont@stagnitomail.com Classified Production Manager Mary Beth Medley 856-809-0050 marybeth@marybethmedley.com MARKETING & PROMOTION Director of Market Research Debra Chanil 201-855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton 215-301-0593 spatton@stagnitomail.com List Rental The Information Refinery 800-529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media 877-652-5295 sales@wrightsmedia.com Subscriber Services/Single-copy Purchases 978-671-0449 or email at Stagnito@e-circ.net

President & CEO Harry Stagnito Chief Information Officer Kollin Stagnito SVP, Partner Ned Bardic Chief Brand Officer Korry Stagnito VP & CFO Kyle Stagnito VP/Custom Media Division Pierce Hollingsworth 224-632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Human Resources Manager Sandy Berndt Corporate Marketing Director Bruce Hendrickson 224-632-8214 bhendrickson@stagnitomail.com Promotion Director Robert Kuwada 201-855-7616 rkuwada@stagnitomail.com VP/Events John Failla 201-855-7634 jfailla@stagnitomail.com Director of Digital Media John Callanan 203-295-7058 jcallanan@stagnitomail.com Audience Development Director Cindy Cardinal

STAGNITO BUSINESS INFORMATION PUBLICATIONS

More ONLINE See the newest products at Progressivegrocer.com/whatsnext Read the latest supplier news at Progressivegrocer.com/supplierside

6

| Progressive Grocer | January 2015

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 ©2015 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.

HERE’S A NEW WAY FOR SHOPPERS TO PICK DIFFERENT® • Redd’s family of brands is the fastest growing FMB in the segment* • Green Apple satisfies even more of your customer’s taste preferences** • 6pk and 12pk bottles available in March

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editor’s note

by Jim Dudlicek

FDA Calorie Ruling:

Overreach or Logical Conclusion?

D

o grocery stores want to own wellness, or don’t they?

Tat’s a question that’s crossed my mind lately, since the FDA revealed its fnal menu-labeling regulations, which also pertain to supermarkets.

With the hiring of more retail dietitians and supermarkets’ steady migration toward a “360-degree” approach that encompasses food, pharmacy and nutrition counseling, it seems clear that grocers are moving decidedly in the direction of owning wellness.

But with the “ofcial” industry response to the FDA’s ruling decrying the new menu-labeling rules that will now require grocery stores with more than 20 locations to display calorie counts for restaurant-style prepared foods, I’m not so sure.

I understand the industry trade groups’ opposition to what they — and presumably the majority of their members — see as costly and burdensome regulatory overreach by a law originally designed for chain restaurants.

“It’s clear that there’s some hesitancy among grocery retailers to get on board with the change,” Molly McBride, corporate dietitian for Te Kroger Co., in Cincinnati, tells PG. “Te grocery industry considers itself a separate category compared to restaurants, and there’s no question that the change will require Te Kroger Co. to make a considerable time and management investment.

“However,” McBride continues, “as a dietitian and member of the Academy of Nutrition & Dietetics, I’m committed to transparency with our customers about food, so I support calories being clearly labeled, from a packaged good on the shelf to a product in our bakery/deli area.”

I would imagine a similar reaction from other supermarket wellness leaders. As I see it, if you’re going to proclaim your commitment to good nutrition and overall wellness, how can you not embrace the idea of transparency in the caloric content of your increasingly infuential prepared foods?

“Tis mandate may help us increase engagement and conversation with our shoppers, as well as provide an easier shopping experience,” McBride says, “whether it’s adding up calories towards a personal goal, or selecting particular foods to piece together a great meal.”

Te FDA notes that its intention was never to

include all grocery items under the rule, but rather just those foods that mimic the restaurant experience: ready-toeat items like sandwiches, pizza, and fried and rotisserie chicken.

Exempt from the rule: fresh-cut produce, deli meats, bulk foods, daily specials, salad and hot bars, seasonal oferings, and made-toorder prepared foods.

Te folks at Arlington, Va.-based FMI, who say the FDA rebufed their requests to discuss the regs over the past three-plus years of planning, reasonably raise concerns over the agency’s apparent misunderstanding of how most grocery stores operate. For example, notes Rob Rosado, FMI director of government relations, fresh-cut fruit is exempt, but what if it’s used as an ingredient in another product? And while a whole bakery cake is exempt, what if it’s cut into slices to help move it as it nears its sell-by date?

“As much as the FDA attempted to make accommodations for these grocery areas, it’s created a lot of questions,” Rosado points out.

Further, he asserts, most shoppers tend to be infuenced more by package health claims than by calorie counts. “Grocery stores are at the forefront of delivering healthier foods and providing more information to customers,” he says.

Of further concern is how the rules are going to be enforced, which is a keen interest of mine as well.

FMI President/CEO Leslie Sarasin has said that grocers “should not be pulled into a menulabeling law and regulation designed for a diferent industry.”

But visit places like the Standard Market Grill at Standard Market in suburban Chicago, Price Chopper’s Market Bistro in upstate New York, Wegmans’ Amore or Next Door, Hy-Vee Market Grille, or Lunds & Byerly’s Kitchen, and supermarkets’ emulation of restaurants is quite obvious.

As such, I believe if you’re going to function like a restaurant, you should expect to be treated like one. Tere are indeed some kinks to be worked out, but if you’re going to be a bastion of health and wellness, you should be ready to go all in on education and transparency. PG

If you’re going to be a bastion of health and wellness, you should be ready to go all in on education and transparency.

Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

January 2015 | progressivegrocer.com |

11

Accolades / Insights / Trends / Opportunities

NCA Lauds H-E-B’s Dave Schulze

Applause for the sweet success scored by Dave Schulze, senior candy category buyer for San Antonio-based H-E-B, on being honored with a 2015 Confectionery Leadership Award by the National Confectioners Association (NCA). The awards recognize contributions to the candy category through effective business collaboration, category management best practices and innovative in-store merchandising.

Apples Commanding Produce Power

Apples comprised a substantial portion of produce sales in October 2014, accounting for roughly 8.1 percent of total produce department dollars, with Gala, Honeycrisp and Red Delicious leading the way among varietals.

Additionally, more than two-thirds of apples were sold as bulk, which represents “an important sign of overall category health, as bulk sales historically drive more dollars to the department than bags because of their higher retail price,” said Roger Pepperl, marketing director for Wenatchee, Wash.-based Stemilt Growers.

—Stemilt Growers’ FruitTracker

Catering to the Hispanic Consumer

Hispanic consumers now make up one-sixth of the total U.S. population (53 million), and their spending power is projected to surpass $1.7 trillion by 2017. Information Resources Inc.’s (IRI) HispanicLink identifies three distinct shopper segments in an effort to help retailers better accommodate this growing consumer group.

Acculturated Hispanics: With a median income of $62,000, members of this group are familiar with American culture and language, and frequently want the best price, often compromising on product quality to some extent. They also tend to be more digitally savvy.

20% The increase in consumption of fresh foods from 2003-13 —The NPD Group’s “The Future of Eating: Who’s Eating What in 2018”

12

Bicultural Hispanics: Shoppers in this segment are bilingual, but they choose to follow Hispanic traditions and are more inclined to buy products that are specifically marketed to Hispanics. As shoppers, they are the most digitally savvy of all groups, and are most likely to try new things.

Unacculturated Hispanics: With more limited knowledge of English, these shoppers rely on Spanish translations on packaging and buy products specifically marketed to them.

Money is often tight for shoppers in this segment, but they are passionate about eating healthy and cooking fresh and traditional meals. They are also the most influenced by advertising.

—IRI’s HispanicLink 2014

What’s Trending on Progressivegrocer.com …

Using Analytics in 2015

PG ’s most recent poll question asked readers what role analytics will play in their organizations in the coming year. Here’s how the votes stacked up as we went to press with this issue: Will begin piloting Will expand pilot projects and modestly expand Will invest heavily to expand to every department across organization Already use analytics throughout company and will make no changes Will continue to invest in even more sophisticated analytics to further growth

| Progressive Grocer | Ahead of What’s Next | January 2015

33%

22% 11%

22% 11%

There’s a NEW face in the freezer case.

Drive freezer sales with al fresco fully cooked chicken patties!

Consumers know that life’s better when they eat better. Maybe that’s why they love better-for-you products from al fresco in the freezer case, like our convenient all-natural precooked chicken patties in three delicious gourmet flavors.

Call Chris Reisner at (617) 889-1600 x258 or email alfrescosales@kayem.com Samples available now! 1st ship February 2015 • Also look for a full line of al fresco products in the freezer case!

in-store

March 2015 is...

events S

1

National Peanut Butter Lover’s Day. Women and kids prefer creamy; men prefer crunchy.

M

2

National Banana Cream Pie Day

T

3

In honor of National Pancake Week, set up a display of mixes, toppings, bowls and spatulas.

W

4

Promote bakeware for National Pound Cake Day.

National Cold Cuts Day Purim begins.

8

International Women’s Day Time to change the clocks! Daylight Saving Time begins today.

15

National Peanut Lovers’ Day. Also, celebrate National Peanut Month on your Facebook page.

Make sure your travel plans for the month’s shows are in order.

Host a friendly bakeoff in honor of National Chocolate Chip Cookie Week.

S

6

7

Natural Products Expo West begins in Anaheim, Calif., and continues through the 8th.

National Cereal Day

11

12

13

14

16

17

18

19

20

21

25

26

27

28

National Artichoke Hearts Day. Run demos on how to peel and prepare the edible thistles.

National Ranch Dressing Day. Promote recipes that include this customer favorite.

St. Patrick’s Day In honor of National Irish American Heritage Month, promote products from the Emerald Isle.

24

29

30

31

14

5

F

10

Demo making crab cakes for National Crabmeat Day.

23

Palm Sunday

T

9

22

For World Water Day, post informational signage about the globe’s water resources by a bottled water display.

National Frozen Food Month National Nutrition Month American Red Cross Month National Women’s History Month National Peanut Month

National Chips and Dip Day

Take A Walk In The Park Day. Highlight to-go snacks and drinks.

It’s National Cake Pop Day, so ask customers to add their favorites to your Pinterest page.

National Eat Your Noodles Day. Set up a display with ingredients for international noodle dishes.

National Sloppy Joe Day. Make this the Sandwich of the Day.

International Waffle Day

Set up displays of shucking tools to celebrate National Oysters on the Half Shell Day and National Clam Day.

| Progressive Grocer | Ahead of What’s Next | January 2015

It’s Girl Scouts Day. Let a local troop sell their cookies in your store.

National Oatmeal Cookie Day. Set up a demo for oatmealcookie ice cream sandwiches.

Make Up Your Own Holiday Day. Ask employees for creative ideas.

Offer warming samples throughout the store for National Chicken Noodle Soup Day.

National Ravioli Day. Sample different varieties.

Spanish Paella Day. Provide a never-fail recipe for the Iberian specialty in your circular and online.

E-mail your calendar submissions to

National Potato Chip Day

National Puppy Day. Offer discounts on pet products.

It’s Something on a Stick Day. Sample appetizers, main courses and desserts — all on sticks, of course.

awolfe@stagnitomail.com.

® ™ © 2015 Jelly Belly Candy Company

MILLIONS OF YUCKS AND COUNTING.

THE MOST POPULAR GAG IN CANDY IS NOW AVAILABLE IN A GRAB & GO® BAG BeanBoozled® jelly beans come in 10 colors and 20 flavors (10 good ones and 10 weird and wild ones).

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With sales skyrocketing +400% and an ever growing fan base, this line-priced Grab & Go Bag is the surprising new must-have item to add to your set.

Contact us today • 800-323-9380 • J llyB lly.com

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Front End

Market Intelligence By The Numbers GroCErY’S ToP 10

Shelf Stoppers

Fresh Produce Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Nov. 22, 2014)

Sales % Change Dollars (Millions) 2014 2013

% Change 2014

Units 2013

Cranberries

$35.2

45.4%

-30.8%

49.1%

-36.4%

Cauliflower

245.9

17.0

8.6

17.5

-5.4

Fruit-Remaining

3,222.4

11.4

12.0

12.1

9.3

Vegetables-Remaining

1,566.1

10.8

15.6

9.5

15.1

Spinach

419.6

10.8

17.0

7.3

11.9

Herbs

212.3

9.3

3.8

9.1

5.3

Garlic

50.2

7.0

3.2

10.3

-0.2

2,652.5

5.8

4.7

4.1

2.7

653.1

4.0

7.7

9.7

2.3

32.8

3.7

1.4

2.1

-2.4

4.8%

5.6%

3.8%

Pre-cut Salad Mix Apples Radishes

Total Category

$17,692.9

1.7%

NielseN’s Spotlight

Perhaps with their children having flown off to start their own lives, empty nesters can now focus on improving their own nutrition, with the convenience of pre-cut salad mixes enabling them to indulge healthfully. senior couples, and more crucially — for the potential effect on tomorrow’s consumers — older bustling families also showed higher-than-average consumption rates of ready-touse greens.

CroSS-MErCh Candidates

Consumption Index: Pre-cut Salad Mix LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Modest Working Towns

Plain Rural Living

Total

wITh ChILDrEN: startup Families

86

92

88

122

95

74

92

small-scale Families

123

116

115

91

105

77

104

Younger Bustling Families

117

92

104

91

103

81

96

Older Bustling Families

130

136

131

111

125

96

123

Young Transitionals

59

71

67

75

68

47

65

independent singles

79

92

88

68

76

70

78

senior singles

82

82

80

78

74

59

74

established Couples

114

140

118

87

107

100

112

empty-nest Couples

141

157

139

125

121

110

132

senior Couples

122

135

126

101

114

104

118

Total

100

119

111

91

96

84

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+)

16

High Consumption (120-149)

Average Consumption=100

| Progressive Grocer | Ahead of What’s Next | January 2015

• Wine • Floral and Gardening • Nuts • Skin Care Preparations • Photographic Supplies • Stationery and School Supplies • Yogurt • Snacks, Spreads and Dips-Dairy

More oNLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

WATCH AVOCADOS MAKE HISTORY DURING THE BIG GAME

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Nielsen

Mintel Global New Products Database Category Insights

Frozen/Refrigerated Pizza MaRket OveRview l Pizza at retail in the United States experienced a 1.6 percent fall in sales between 2009 and 2014 (estimated), is estimated to grow only 0.2 percent in 2014 (versus 2013) and will remain relatively flat into 2019. Poor sales performance is likely due to health concerns and competition from restaurant and takeout/ delivery pizza, which a majority of consumers perceive to be better than store-bought pizza, and which an increasing number of consumers have returned to as the economy slowly recovers.

l

l

In the United States, frozen pizza accounts for 82.3 percent of the pizza at retail (in 2014 estimated) but grew only 0.6 percent between 2012 and 2014.

Refrigerated/frozen crust/dough and kits accounted for a 9 percent share in 2014, managing 1.3 percent growth between 2012 and 2014. The DIY (do-it-yourself) trend currently taking place among many home cooks, especially younger cooks learning to prepare meals from scratch or almost from scratch, is likely

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

responsible for the small growth in the segment.

l

Retail pizza marketed as natural is on the increase in North America, accounting for 23 percent of launches in the 12 months to September 2014, ahead of the 14 percent seen in the previous 12 months to September 2013, and with such offerings more likely to appeal to 18-to-34year-olds.

l

Households with children represent an important demographic for storebought pizza brands, reporting significantly higher consumption of pizza of all kinds versus households without children.

key issues Store-bought brands can look to specific demographics to help stave off steeper declines in the coming years, namely 18-to-34-yearolds and households with children.

l

l

Relatively few U.S. respondents say health-related product attributes (e.g., no artificial ingredients; all-natural/organic, whole grain crust; low-fat/calorie) are important when selecting storebought pizzas.

18-to-34-year-olds show the greatest interest in gluten-free pizza, with scope for more new product development here, given consumer interest and rising u.s. sales of gluten-free foods.

What Does it Mean? l

18

Brands should target 18-to-34-yearold consumers with marketing that aligns with their interests, including pizza with hand-tossed or whole grain crusts; all-natural/organic/ gluten-free varieties; and low-fat/ low-calorie types.

l

Brands have an opportunity to increase usage among households with kids by developing more family-friendly and sharing formats (e.g., with accompanying side dishes) and unusual flavor/ topping options.

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | January 2015

l

Brands that look to replicate restaurant-quality pizza by offering more variety in recipes or toppings, or placing a greater emphasis on artisan attributes are likely to appeal to consumers interested in quality products.

IS YOUR DIET MISSING SOMETHING? CENTRUM CONTAINS THE

6 ESSENTIAL NUTRIENTS PEOPLE DON’T GET ENOUGH OF FROM FOOD ALONE

ALWAYS COMPLETE

† Applies to all Centrum® multivitamins, except Centrum® FlavorBurst® and Centrum® Liquid. ©2015 Pfzer

*These statements have not been evaluated by the Food and Drug Administration.

These products are not intended to diagnose, treat, cure or prevent any disease.

2014 Top Women in Grocery Gala DraWs recorD croWD

M

ore than 200 of Progressive Grocer’s 2014 Top Women in Grocery winners converged in November at Loews Chicago O’Hare Hotel, in Rosemont, Ill., to accept engraved awards before a record crowd of nearly 500 industry luminaries, special guests and n d ffamily members, all of whom came out to supportt aand celebrate with the event’s guests of honor.

Janel S. Haugarth, Supervalu’s EVP and president of independent business and supply chain services, was honored with the distinguished d Trailblazer Award, which recognizes a single food industry executive whose leadership, vision and infuence have had profound infuences on blazing new trails for women in the retail food industry.

For the second year, the event featured an afternoon learning, networking and leadership development program designed to foster and enhance the success and professional growth of its honored guests, who also had an opportunity to book personalized hair and makeup appointments in Procter & Gamble’s Innovation Studio.

FMI President and CEO Leslie G. Sarasin presided during the awards presentation ceremony, while Deanie Elsner, EVP and chief marketing ofcer for Kraft Foods Group, provided an inspirational keynote message to Top Women in Grocery winners on behalf of the event’s platinum sponsor, whose products were prominently featured during the sit-down dinner.

Guests were also treated to a scrumptious afterdinner dessert party presented by Te Hershey Co. dinn

20

| Progressive Grocer | Ahead of What’s Next | January 2015

2014 AwArds CelebrAtion

Barbara Dennis and From left, lance Innovations, d Drennan, Bah Stephen Fosdick an it mingled w h, Ahold USA . it Tammie Sm

Janel Haugarth (second from left), Supervalu’s EVP and president of independent business and supply chain services, received the Trailblazer Award from Progressive Grocer’s Meg Major and the Network of Executive Women’s (NEW) Lisa Walsh (left), of PepsiCo, and Kathy Bayert, NEW. Left to right: Le president/CEO slie G. Sarasin, , Institute, and Food Marketing Da Edeker, Hy-Vee wn and Randy

left, Kev d by, from l represente a Gargalikis, Jacki el w as w ’s ic Er Raley alie Slatter, Jensen.

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Left to right: Deanie Elsner, EVP and CMO, Kraft; Janel Haugarth, EVP and president, independent business and supply chain services, Supervalu Inc.; Harry Stagnito, president/CEO, Stagnito Business Information; and Leslie G. Sarasin, president/CEO, FMI.

Er win and Pheli E p armacy/R x Roberts, ph cli ccoordinator at nical Kroger

Left to right: Kathy Albertsons; Matt Brady, Lo Albertsons; and Su ng, zan New Albertsons Inc ne Long, . rry Stagnito, COO; Ko Left to right: Kollin officer; Meg Major, chief nd bra Stagnito, chief artner; ; Ned Bardic SVP/p content editor, PG president/CEO, Stagnito , ito gn and Harry Sta on Business Informati

disers Valu Merchan stivities from Enjoying the fe ve Sutton, Mark and Anna Da are, from left, afford, and Dan Funk.

St Mancini, Tony

22

| Progressive Grocer | Ahead of What’s Next | January 2015

ands were, from Hillshire Br In attendance rberry, Sarah Stone, Jen Ca from left, Hae e, Patti Jackson, Curt Balara itt Bentz, Chris W man. and Renee Fang

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AFTERNOON WORKSHOPS Category

Nonfoods

cognized Nationally re workplace d an ss ne si bu andra author Alex speaker and as luncheon ed R. Levit serv ker. Levit’s keynote spea ussion focused sc engaging di adership le on essential r women in a fo capabilities ng workforce. gi rapidly chan

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Flanking keynote speaker Alexandra Levit (fourth from right) is a contingent of Top Women from P&G, including (from left) Hillen Lee, Carrie Green, Jane Novak-Cook, Virginia Palmer, Lois Fruhwirth, Lori Proctor and Judi Kletz.

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2014 To p winner Women in Gro S Osco, v tacey Brown, cer y isited w o Janel H ith Sup f Jewela e a peer c ugar th (right r valu’s ) ircle dis cussion following .

2014 AwArds CelebrAtion

ott, lby Endic nally and ght: She A Left to ri per, Heather Mc y-Vee Bree Coo arthy, all from H C Amy Mc

Left to right: Amanda Jone s, Scott Cole, Julie Nee, Ra ch Ti The Hershey Co el Rogers and Brent Cotten ffany Souders, , all from .

Left to right: Frank Curci, Susan s, Kelchlin, Kathleen Allen, Susan Peter Karri Zwirlein and John Persons, all from Tops Friendly Markets

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ri Amthor, cca Steele and Te Left to right: Rebe rketing; Nancy Chagares, Acosta Sales & Ma oup; and Karmelita Gr The Bellweather ta Middlemiss, Acos

lson dson, Kris O : Gineal Davi Left to right ett, all from Albertsons and Lisa Goss

Left to right: Br ya PromoWorks; Le n Fooden and Julie Beck, ann Dias and Lin Shawâ&#x20AC;&#x2122;s Superm arkets; and Dan da DelPino, Miller, PromoWorks

Bellah, icz, Michelle ck y Frankiew d Jennifer Reilly, all Be t: gh ri Left to erg an Ar t Rosenb Lisa Walsh, o iC ps Pe from Karla Brown and Ton y Goings, of Kroger

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26

Left to right: Larr y and Jim mie Lynn Hackler, and David and Melissa Miller, all from Kroger

| Progressive Grocer | Ahead of Whatâ&#x20AC;&#x2122;s Next | January 2015

Men who champion women have a great appreciation for the abilities of women.

Nonfoods

Category

NEW

Horizons

By Joan Toth

Saluting the Heroes Behind Every Wonder Woman

The support of men is essential to women’s leadership.

J

ill Lepore’s book “Te Secret History of Wonder Woman” (Knopf 2014), chronicles the frst female superhero, introduced more than 70 years ago. Spoiler alert: Te lasso-wielding Amazon princess — so advanced for her time — was created by a man.

William Moulton Marston had fve sisters and strong ties to the women’s movement. A popular psychologist, he wanted to create a superhero with two superpowers, truth and love, which he believed were more powerful than fsts or frepower. His wife said, “Fine. But make her a woman.”

Te creation of Wonder Woman brings to mind the male heroes who were early champions of women in our business. Tese industry leaders also went against the prevailing wisdom of their time and understood the power of women.

When the Network of Executive Women (NEW) was founded in 2001, the support of these far-sighted men was crucial. Without their support — and the commitment of their companies — NEW might never have gotten of the ground.

Strong Advocates Case in point: Bill Grize, the late CEO of Ahold USA and the frst retailer to wholeheartedly, and very vocally, endorse the network.

Bill was such a passionate advocate for women’s leadership, and so important to the early success of NEW, that we named our Hall of Fame Award for him. Each year, the honor goes to a leader who demonstrates the same commitment to women’s leadership Bill did.

Since 2011, NEW has presented the Grize Award to 11 individuals and two companies. Tey’ve included four supermarket veterans and one supermarket chain: Former Supervalu CEO Jef Noddle; Judy Spires, CEO at Kings Food Markets’ parent, Angelo Gordon Supermarket Holdings, for her work at Kings and Acme Markets; Jamba Inc. CEO James White, honored for his work at Safeway; Delhaize America; and, last fall, Mike Gorshe, Accenture’s managing director, consumer goods and services and food retail, whose frst job was bagging

28

| Progressive Grocer | Ahead of What’s Next | January 2015

groceries at his local Kroger store in Bellaire, Ohio.

Men who champion women have a great appreciation for the abilities of women. Tey have female protégés. Tey frequently have a mother or wife who works. And I’m struck by how often they say they want their daughters to have the same opportunities as their male counterparts.

Mike — and all of the men and women who’ve received the Grize award — share Bill’s belief that companies that don’t develop women leaders not only shortchange half their workforce, they also shortchange their bottom lines.

More Leaders Wanted Te retail industry has made progress on women’s leadership, but it’s been slow going. To nurture more women leaders — and create a better workplace for everyone — we need more male leaders committed to change.

Words aren’t enough. It takes action.

Here’s what you can do: Mentor or sponsor a female colleague. Give stretch assignments to high-potential women on your team. Support your company’s women’s employee resource group. Help recruit more women. Promote a more fexible and inclusive workplace. Join communities like NEW and connect with other change agents.

Women in our industry don’t have the powers of Wonder Woman. But they do provide unique insights into female consumers. Tey work hard; think long-term; collaborate and innovate; and build strong teams through empathetic leadership.

NEW is proud of all the leaders — male and female — who’ve supported our mission of advancing women’s leadership in our industry. We invite you to join them. PG Joan Toth is president and CEO of the Network of Executive Women, Consumer Products and Retail, a learning and leadership community with more than 8,500 members, 750 companies, 100 corporate partners and 20 regional groups in the United States and Canada. For more information, visit newonline.org.

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It’s indisputable that there’s great value in promoting local food, but there’s also great value in understanding the culture and traditions of food.

All’s Wellness

By Barbara Ruhs

Global Perspective Nutrition is just one consideration in forging strong connections between consumers and the foods they eat.

M

y love for traveling started at a young age. As the daughter of a commercial airline pilot, I visited many diferent places with my dad, mostly where people didn’t speak much English and it was rare to fnd typical American favorites like hamburgers and pizza.

It was these early experiences that likely made me a “foodie” and possibly infuenced my career in nutrition and dietetics. Now, with more than two dozen stamps in my passport and a lifetime of international travel under my belt, I’ve witnessed the infuence of heavily marketed, cheap, convenient and afordable American foods abroad. McDonald’s is everywhere, and so is Starbucks.

Although I’m grateful to fnd these American institutions in foreign countries, it’s not for the food, but rather because they always have clean bathrooms and the most reliable free WiFi one can fnd while traveling abroad. Unfortunately, this isn’t the case for the locals living in these countries; it doesn’t matter whether I’m in Chile, Norway, Turkey or China, McDonald’s is always packed with people eating the food.

Recently, I was shocked to learn that there are more obese than hungry people in the world today (1.5 billion versus 900 million) according to a report released in 2014 by the Londonbased Overseas Development Institute (ODI).

Tanks in part to a highly efcient global food supply and powerful marketing strategies employed by U.S. food companies, individuals around the globe are mimicking Americans’ poor eating habits.

Te “Future Diets” report indicates that this is due to a shift away from traditional diets; individuals are now eating more processed, calorie-dense (fat, sugar

30

| Progressive Grocer | Ahead of What’s Next | January 2015

and animal protein) and nutrient-defcient (lacking vitamins and minerals) foods and drinking more sugar-sweetened beverages (empty calories). Although the United States has the highest percentage of overweight and obese people in the world, the rest of the globe is slowly following in our footsteps.

In Praise of Tradition While traveling in Scandinavia not long ago, I wasn’t surprised to see that promoting local products was popular. In my work as a supermarket dietitian in the United States, I’ve noticed this as a hot trend of the past few years.

What struck me about the New Nordic cuisine, however, is the heavy focus on locally sourced ingredients such as fatty fsh, root vegetables, pickled items, cabbage, game meat (elk), foie gras and rye bread.

Tese aren’t the healthiest foods from a nutrition perspective, but they’re traditional foods in this part of the world, and by promoting these ingredients, the population connects on an important cultural focal point — their food. It’s good for morale, the economy and ultimately for the dietary habits of the locals.

Tere are valuable lessons to be learned by traveling and experiencing food and cultures throughout the world. Although many of these items are high in fat and sodium, they’re served in small quantities, and I’ve never seen more people riding bicycles (in the frigid cold) in my life than I’ve seen in Denmark. You probably can fnd New Nordic cuisine in the United States, but trust me, it’s hard to appreciate its true value unless you enjoy it locally.

It’s indisputable that there’s great value in promoting local food, but there’s also great value in understanding the culture and traditions of food. From collard greens found in the southern United States to whole grains grown in the Great Plains, healthy foods are bountiful anywhere and everywhere.

Embrace them, cook them, share them, and by all means, celebrate them. Happy New Year! PG Barbara Ruhs is a registered dietitian and the founder of Phoenix-based Neighborhood Nutrition LLC (www.neighborhoodnutrition.com).

Follow her on Twitter at @BarbRuhsRD.

They’ll tell you low price and great taste are mutually exclusive.

MOM says, “Bull#%@&!”

We’re tired of all the myths being perpetrated by the man.

And by the man, we mean youknow-who. Here’s the truth: High quality, great tasting cereal doesn’t have to be expensive.

And we prove it every day.

Nine of our MOM Brands® cereals rank among the top 40 best selling cereals nationally.* And, in markets where they’re sold, we have seven #1 cereals in their flavor segments, beating out all other brands.†

Four Malt-O-Meal® brand cereals recently won national taste tests: Oat Blenders with Almonds,® Honey Buzzers,® Fruity Dyno Bites,® and Coco Dyno Bites.®

Our mission to make a better breakfast at a better price means consumers never have to make a trade-off between great taste and price.

Think they appreciate that? Damn straight.

Find out more at MOMbrands.com/bull *Source: Nielsen, Total US All Outlets, Lb Volume, 52 weeks ending 12/14/13. † Source: Nielsen Scanner Total US Grocery Brand Equivalents In Markets Where Each Is Sold for 12 weeks ending 2/8/14.

2015 Ones TO WaTch

How will the coming year treat this quintet of grocery standouts?

T

he grocery industry is always an exciting and dynamic place to be, as operators maneuver to enhance and solidify their market positions in a variety of ways, from mergers and acquisitions to reinvention.

Te eyes of Progressive Grocer are on all of it, but here are fve to which we’ll be paying particularly close attention as 2015 unfolds: Albertsons/Safeway, C&S Wholesale Grocers, Fresh & Easy, Price Chopper and Walmart.

Albertsons + Safeway By the time you read this, the acquisition of Safeway by Albertsons should be nearly complete, but the biggest challenges may still lie ahead.

Te $9 billion deal creates a network that includes more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants, employing more than 250,000 associates. It’s what analyst Burt Flickinger calls “an exciting combination of stores.”

According to Albertsons CEO Bob Miller, who becomes executive chairman of the combined company, the transaction presents “the opportunity to better serve customers by adapting more quickly to evolving shopping preferences in diverse regions across the country.”

Tat said, Flickinger, managing part-

Te following corporate outlook includes insights from Food Marketing Institute (FMI) SVP Mark Baum, retail consultant David Diamond, industry analyst Burt Flickinger and Te Hartman Group, along with PG’s c-suite-centric sister publication, Retail Leader.

For an update on last year’s class of Ones to Watch, visit Progressivegrocer.com/onestowatch. For further analysis of the retail landscape, check out www.retailleader.com, as well as PG’s daily news reports at Progressivegrocer.com.

ner of New York-based Strategic Resource Group, warns that “it’s still going to take the Albertsons side two to fve years to catch up, considering the market share Albertsons has A lost over the last decade.”

He continues: “Albertsons is facing a lot of competition and postponed capital expenditures in stores, and sales have declined signifcantly over time.”

For its part, Safeway went into the deal after a year of upheaval that included its withdrawal from the Chicago (Dominick’s) and Canadian markets, moves the company made in part as a response to a buyout threat from activist investors. Tose moves, overseen

by CEO Robert Edwards, who becomes president and CEO of the combined company, apparently made Safeway an even more desirable target for acquisition, a move already being explored a year ago by New York-based January 2015 | progressivegrocer.com |

33

2015 Ones tO Watch private equity frm Cerberus Capital Management, owner of AB Acquisition LLC, parent of Albertson’s LLC and New Albertson’s Inc. When the deal was announced last March, Miller afrmed that Safeway’s “best-in-class private label program” was a very attractive aspect of the Pleasanton, Calif.-based retailer’s portfolio and represented “a real strength that can be spread to all stores, with more variety” and sophistication.

In addition to its eponymous banner, Safeway also operates stores under the Vons, Pavilion’s, Randall’s, Tom Tumb and Carrs nameplates.

Te Fortune 100 company has held the secondlargest standing among food and drug retailers in the United States for years, with 2013 sales of $36.1 billion, placing it fourth (behind Walmart, Kroger and Target) among top grocery sellers in PG’s Super 50 ranking last May. Albertsons (ranked seventh, with sales topping $23 billion) operates stores under its fagship banner, plus several others, including those it sold to Supervalu in 2006 and reacquired in 2013.

Te combined company will operate with three regions and 14 retail divisions, the latter of which will be supported by corporate ofces in Boise, Idaho; Pleasanton; and Phoenix.

It will also operate without three of Safeway’s highest-ranking executives, who are leaving the company upon consummation of the deal: Larree Renda, EVP of Safeway and chair of Te Safeway Foundation, which oversees the grocer’s charitable giving activities; EVP and Chief Marketing Ofcer Diane Dietz; and EVP and CFO Peter Bocian.

Cerberus plans to sell of Property Development Centers, Safeway’s real-estate development arm, which owns several store sites and was overseeing a couple of new-store construction projects in California. For the time being, the new company says it doesn’t plan to close any stores. However, when Cerberus made the original purchase in 2006, it gave similar reassurances of not closing any stores, and then ended up shuttering hundreds, essentially wiping out the Albertsons banner in northern California.

As this issue went to press, AB Acquisition and Safeway had agreed to sell 168 stores to four separate buyers as part of their merger deal. Bellingham,

34

| Progressive Grocer | Ahead of What’s Next | January 2015

Wash.-based 18-store chain Haggen will buy 146 stores across Arizona, California, Nevada, Oregon and Washington; Associated Wholesale Grocers (AWG)/Minyards will buy 12 stores in Texas; Associated Food Stores (AFS) will purchase eight stores in Montana and Wyoming; and Supervalu will purchase two in Washington.

Unclear at press time was whether this spelled the end of private equity investor Sam Zell’s grocery aspirations. Zell, in partnership with Los Angelesbased Oaktree Capital Management and Floridabased Comvest Partners, had bid on 140 stores in advance of the merger.

Zell was reportedly working with private investor Stuart Sloan, chairman of the Quality Food Centers grocery chain from 1986 to 1999. “Sam Zell’s a brilliant retail investor,” Flickinger tells PG, recalling Zell’s bailout of the Revco drug store chain in the late 1980s and its sale nearly a decade later to CVS. “From a property standpoint, he certainly knows the business. He’s got a good retail partner, but neither has run retail chains in the new millennium — things have changed quite a bit.”

C&S Wholesale Grocers Keene, N.H.-based C&S Wholesale Grocers spent a good part of 2014 shifting its focus as a supplier and distributor to independent retailers after making its bones by providing third-party services to major regional chains.

In October, a U.S. Bankruptcy Court judge approved C&S’ $288 million bid to acquire Associated Wholesalers Inc. (AWI) and its subsidiaries, beating out Minneapolis-based Supervalu to purchase the regional co-op food distributor that operates two distribution centers in Pennsylvania, along with its White Rose subsidiary, which operates three distribution centers in New Jersey, and four corporate Nell’s Shurfne Markets.

“Tis transaction will give us an even greater capacity to provide the unique services required by independents and regional chains,” said Rick Cohen, chairman and CEO of C&S, which serves about 5,000 stores, including Stop & Shop, Giant Carlisle, Giant Landover, Bi-Lo/Winn-Dixie, A&P, Safeway and Target, from more than 50 facilities across the country, What remains to be seen is who will supply the 2,000-plus Mid-Atlantic stores that AWI and White Rose serviced prior to the bankruptcy fling.

C&S has a clear advantage, thanks to its previous stalking-horse status that it parlayed into a done deal, assets of which include joint lease ownership of stores for several of AWI’s largest former member-owners; many of these are also tied into the former co-op’s front end IT systems. But don’t count Supervalu Inc. out of picking up a solid base of AWI’s indy operators, who might well feel more

comfortable with the Minnesota company, given its long history with independents.

Fresh from its winning bid to acquire Robesonia, Pa.-based AWI and its subsidiaries, C&S also tied up the purchase of Houston-based Te Grocers Supply Co.’s wholesale distribution and supply business. Although Grocers Supply’s retail operations aren’t part of the deal, C&S will take over its warehouse and distribution operations in the Houston, Dallas and Rio Grande Valley areas, along with approximately 1,800 employees.

And no sooner was that deal’s ink dry than C&S tendered a pact to acquire Greenbax Enterprises, the privately held parent company of Piggly Wiggly Carolina Co., which in November sought shareholder approval to liquidate Te Pig’s Charleston, S.C.-based parent company, paving the way for the purchase of its wholesale operation

by C&S for $9.3 million.

C&S, which has owned the Piggly Wiggly name for years, won’t take ownership of any stores but will continue to act as their wholesale supplier. Piggly Wiggly Carolina operated 30 independently owned franchised stores and 19 corporate stores; the franchised stores will retain the Piggly Wiggly banner,

while the 19 corporate locations will be sold to local operators or ownership groups.

Signaling its intention to further ramp up growth as industry consolidation has diminished opportunities for growth in third-party services, C&S hired PepsiCo alumnus Alejandro Rodriguez as EVP of new business and market development, and Christopher Brown, a three-decade industry veteran who’s worked mainly with indyfocused wholesalers, as SVP of independent sales.

Independent retail consultant David Diamond anticipates that C&S will continue to selectively acquire other wholesalers

2015 Ones tO Watch as they become available. “Eventually, they could be as big in that game as Supervalu,” says Diamond, a columnist for Progressive Grocer Independent. It’s becoming evident that, though serving smaller independents has not historically been C&S’ strength, it has designs on taking that market by storm.

Yet others are becoming increasingly concerned about C&S’ aggressive stance, which, according to one observer who requested anonymity, “is all but begging for Federal Trade Commission intervention. C&S is getting too big for itself, and its corporate culture is in stark contrast to that of many local, community-based grocers it’s now courting.”

In a general sense, the deals indicate that “the independent sector continues to be alive and well,” says Mark Baum, SVP for industry relations and chief collaboration ofcer at the Arlington, Va.based FMI. “Tey wouldn’t make these investments if they didn’t think a future is there. Tis demon-

Supervalu Coming on Strong As part of its ongoing successful rebirth, Supervalu Inc. shows all signs of remaining a formidable player in the independent grocery market as it boosts efforts to better serve its network of more than 1,800 indy retailers.

Supervalu is investing in the entire supply chain process, taking an active role in all steps along the journey to table. Key areas of focus will be its successful private-brand portfolio, encompassing Essential Everyday, Wild Harvest and Culinary Circle. Along with that will be more attention paid to perishables — produce, meat, bakery, deli and prepared foods — as well as better-for-you products such as free-froms and organics. The company is expanding R&D operations at its Minneapolis-area headquarters to include test kitchens for handling quality control for some of its 600 private brands.

Further investment is targeting professional consulting and services to help customers and suppliers, including a strong focus on how data analytics can more effectively manage all aspects of the business, from inventory to consumer marketing.

To that end, Supervalu has partnered with Burtonsville, Md.-based iControl Collaboration Solutions to introduce SVInsights, a data exchange portal that houses Supervalu’s retail banner point-of-sale data and provides data access to manufacturers and brokers, as well as enhancing the strategic decision-making process between Supervalu and its suppliers.

“Supervalu is moving into a new era of providing our banner data to our suppliers, allowing them to work with us on a new level of collaboration and business planning,” says Mark Van Buskirk, EVP of merchandising, marketing and retail. “The SVInsights platform will also be used by our merchants, both at corporate and retail, to garner key insights into our business, leading to strategies that will be acted upon at retail.”

36

| Progressive Grocer | Ahead of What’s Next | January 2015

strates a commitment to the independent operator moving forward,” adds Baum, noting the 5,000 independent grocers across the country, along with larger chains requiring secondary suppliers.

No doubt about it: Deals like this are changing the way independents are able to compete with chains. “Every year, change comes, dynamics shift, you have channel migration where grocery has been the loser,” he says. “We’re winning back some of that share, and C&S is positioning itself to be one of the winners.”

Looking ahead to 2020 and beyond for all channels, Baum predicts: “Tere will always be independents that will be among the winners. … Tere is opportunity for independents to partner with wholesalers and win in the marketplace.”

Diamond adds: “Fundamentally, with the acquisitions, C&S has migrated its strategy from being an outsourced distribution partner for big chains to being a true wholesaler, dealing with hundreds of diferent accounts. On one hand, it makes a lot of sense, especially since the competitive set is very small and not terribly competent. Te interesting question is why they moved from a very unusual business model — a wholesaler with only three or four customers, basically allowing Ahold, A&P and a few others to outsource distribution [to a voluntary wholesaler]. I guess the hole in the market was just too big for them to ignore.”

But as yet another observer asserts: “Te toughest foe for C&S’ East Coast indy aspirations is the formidable Wakefern Food Corp., whose rock-solid base of indy member-owners is as good as any in the country.”

Fresh & Easy Following its acquisition by Yucaipa Cos. in November 2013 in a bankruptcy auction, El Segundo, Calif.-based Fresh & Easy is aiming to reinvent itself after its former British-based parent Tesco’s grand plans to be as big in the United States as it is in the United Kingdom went spectacularly awry.

“Tey were in such free-fall,” Flickinger says, referencing the chain’s woeful misguidance by a U.K.-based management team that was out of step and stubbornly tone-deaf to local market conditions and preferences.

But following a year of virtual radio silence under its new Yacaipa ownership, Fresh & Easy stepped out of the shadows with a high-visibility marketing campaign inviting customers to rediscover the 167-store chain. Positioning the relaunch with an “anytime, anyway, anywhere” tagline touting healthy, convenient and afordable food, the multiplatform campaign centers on fve pillars: afordable organics, handmade prepared foods, fresh daily deliveries, no hidden “unpronounceables” and quick meal solutions.

Building on that initiative, the chain in December

Led by former 7-Eleven executive James Keyes, the retailer expected to have 17 stores converted to the new concept by the end of last month.

“Now that Fresh & Easy has its freedom, it has the frst opportunity to turn around in over fve years,” Flickinger says, “and has a good chance to do it with the economy improving, and by rebalancing its inventory with regional and national brands and less private label product.”

Price Chopper/Market 32 rolled out a new prototype store design featuring restaurant-quality meals at food stations, a hot bar, a pizza oven, a cofee bar and made-to-order sandwiches. A Fresh & Easy spokesman described the concept as “natural like Whole Foods, unique as Trader Joe’s, convenient as 7-Eleven, with the hot food of Panera.”

Defning moment or risky gamble?

Tat’s the assessment of at least one analyst, reacting to the decision of Te Golub Corp., parent company of Schenectady, N.Y.based Price Chopper, to reinvent itself with a brand-new Market 32 banner across its store feet, which the company says “will transform food shopping through modernized stores and new services and products.”

Named for the year of the company’s founding, the concept will be rolled out across

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2015 Ones tO Watch the grocery chain’s six-state market area this spring.

“Market 32 represents the next leap forward for our company,” declared the legendary Neil Golub, Price Chopper’s executive chairman of the board, when announcing the audacious store-rebranding program.

“We have evolved from the Public Service Market to Central Market to Price Chopper by responding to customers’ changing needs over time, and Market 32 is the next natural progression for us. Early learnings gleaned from our Market Bistro concept store have put our next generation in an excellent position to make this move.”

Te company is kicking of the initial phase of its eventual $300 million investment by converting Price Chopper stores in Clifton Park and Wilton, N.Y., and Pittsfeld, Mass., to the new banner; ground was broken in November on the frst groundup Market 32 in Sutton, Mass. A second wave of conversions will then begin over the next 18 months; more than half of the 135-store chain will be converted within fve years.

GLUTE

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| Progressive Grocer | Ahead of What’s Next | January 2015

“Market 32 combines what we are hearing from our customers and what we are learning at Market Bistro, with some of the best thinking in the retail industry, and will focus on delivering a distinctively diferent shopping experience to our customers,” asserts Jerel “Jerry” Golub, Price Chopper’s president and CEO. “Our stores will meet customers’ needs today and for decades to come. Most importantly, though, we will continue to ofer great value for great food and service.”

Tat greatness will include expanded foodservice options, an enhanced product mix and a re-emphasis on customer service. “It is a complete refocus of our company on the core values that our customers are looking for in a store,” Jerry Golub says.

Flickinger calls the plan “a very impressive concept” but questions how it will be received, “because so many of the markets they operate in have less disposable income. Consumers are really under pressure and historically have concentrated on Price Chopper as a place to save.”

Meanwhile, Wakefern Food Corp.’s ShopRite stores opening in Price Chopper’s territory are “having spectacular sales success,” Flickinger notes, acknowledging that the Golub operation is scoring

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Ken Ouimet: We believe that Responsive Commerce is the next big thing in retail revenue management and a natural extension of retail price optimization which we pioneered at Khimetrics. Responsive or Participatory Commerce is about amplifying the voice of the consumer in the retail ecosystem.

My brother, Tim, and I literally grew up in retail pricing: our parents started competitive price comparisons in the 1970s, and as little kids, were we involved in collecting prices. That gave us a deep understanding of retail pricing. My own background is in chemical engineering, and during grad school, I did work in a research group with Nobel Laureates in modeling. The light bulb came on that I could apply the same modeling methods to the retail market with price optimization, and, with my entrepreneurial brother, we started Khimetrics to create what became retail price optimization working with retailers.

The industry has gotten very good at automating supply chain, but with demand - the revenue side of the business - it’s much more complex. We also realized that we need new technologies to bring us into the 21st Century, to understand consumers’ intent to buy – to engage with shoppers, you have to find out what they’re looking for.

deals, figure out the best store to shop at and the closest store to find all of their items and save money. This transforms the way consumers buy.

Taking it another step, we are now building intelligent agents for manufacturers and retailers. We want to help retailers solve their important problems, because we can provide them with understand consumers’ intent-to-buy, and let retailers manage that.

That in turn transforms upstream sales and marketing activities to develop offers that are needed in exactly the right place where consumers are. It really becomes a win-win-win for consumers, retailers, and manufacturers.

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That is powerful for retailers, because we give them two new capabilities for both public and private marketplaces.

PG: How are you also working to guide retailers through the new era of price transparency?

KO: Retailers are naturally concerned about price transparency which is rapidly becoming the new reality. We provide retailers with better shopper data and a new model so they can embrace price transparency while securing and growing their trade promotions.

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One way you can look at it is how the Web has evolved, from Web 1.0 to Web 2.0, which was much more interactive. Similarly, I like to think of it as Commerce 1.0, in which manufacturers set the prices, retailers mark up prices and consumers decide what to buy, and 2.0, with more price options, but more inefficient price options. I call this Commerce 3.0, in which we are deploying intelligence agents that can negotiate for you at the speed of light. It transforms pricing to a dynamic one-to-one personal level while ensuring incremental profits for retailers.

of products, prices and stores using crowdsourcing, cloudsourcing, professional auditors and predictive analytics. We also have a mobile shopping app called ShoppingScout with an intelligent agent we call “Sara” who helps them plan and optimize their shopping experience. The app even goes into what type of packaging, size or brands that allow shoppers to find the best

It’s all about the better competitive data and shoppers’ intentto- buy data. Crowdsourcing and cloudsourcing helps us collect in-store and online data, and if you add predictive modeling to that, you truly get a powerful combination that gives retailers a complete view of their market.

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2015 Ones tO Watch well with openings in Massachusetts and is a “great store of multigenerational success.”

Tat family connection is a plus, according to Te Hartman Group. “Price Chopper may just pull of the most radical reinvention in grocery history,” the Bellevue, Wash.-based market research frm said on its blog in December. “Why? Tey are a privately held, employeeowned and familymanaged company.

Tis means that they have a frontline and backstage staf entirely vested in the success of this reinvention.”

Te Hartman Group considers Price Chopper’s move a bellwether for middle-tier grocery stores: “We have never seen a system renovation this ambitious and this extensive by an independent operator. Price Chopper has gone all in on all things fresh, and it will be either the biggest mistake of grocery retail in the last decade or a defning tipping point for a fat-lining midmarket grocery sector.”

Te move by Price Chopper is compelling, Te Hartman Group asserts, “since most every supermarket operator that has reinvented their stores toward all things fresh has engaged in highly compartmentalized experiments that utilize new stores, not renovations,” noting as examples H-E-B’s Central Market, Mariano’s Fresh Market

by Roundy’s and Giant Eagle’s Market District.

“Being successful takes a tremendous amount of labor to reach a break-even point — they’d have to do a Wegmans volume of sales,” Flickinger remarks. “Tey’ll need to go slowly and evaluate and redefne the retail concept as they do, because the cost is so much higher than their other stores and their competitors.”

Walmart Te big-box stores that came to defne Walmart — the ones where shoppers can seemingly fnd every SKU of anything they want — haven’t been a bright spot on the company’s balance sheet lately. Same-store sales have been declining, with a 0.4 percent drop in the last holiday season

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2015 Ones tO Watch and no growth in the most recent quarter.

Grocery, the category where Walmart now makes more than half of its money, isn’t doing any better: It’s been hit by cuts in food stamps, higher payroll taxes, stagnant wages and other blows to its core shopper constituency.

“Walmart misread its own store base,” explains Flickinger. “Supercenters are not the problem; they provide operating leverage and opportunities for proftable growth. … [But] supercenters are starved for inventory and staf.

Walmart supercenters have the worst out-ofstocks of any retailer in America. If Walmart reinvests in simply stocking the shelves, sales would grow 3 percent to 5 percent instead of being negative.” kinger, —Burt Flic p u Walmart, like Target and ro G e rc esou Strategic R other competitors, has experimented with smaller stores for

years. Te experimentation is coalescing around the concept of Neighborhood Markets, stores of about 45,000 square feet, about half the size of a regular Walmart, and about a quarter the size of a Supercenter.

Te small stores have made a big impact, at least in terms of their potential. Teir same-store sales were up 4 percent last year and 5.6 percent in the last quarter. Walmart has responded by accelerating their growth. It had originally planned to open no more than 150 of them, this fscal year; it’s now

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2015 Ones tO Watch doubling those plans and will build between 270 and 300 of them. (By contrast, Walmart plans to open about 115 new Supercenters.)

But not everyone is convinced that going smaller is necessarily the solution for long-term success.

“Neighborhood stores do well in the beginning, because they’re new and fully stocked,” Flickinger argues, “but as they get into the third year … ultimately a small box will have the same problems as a big box.”

Flickinger asserts that Walmart faces challenges on a much grander scale. While Walmart has managed to vanquish many smaller, underfunded competitors, it struggles against strong regional players like H-E-B, Market Basket, Woodman’s Markets and Kroger’s regional banners. “Walmart has most of the business it’s going to get from Kmart and other retailers,” Flickinger says. “Walmart’s losing consistently against other privately held capable competitors. … Now that it’s facing bigger competitors, 2015 Walmart is facing more uncertainty.”

Further, Flickinger notes, stores in Central and South America that Walmart acquired from Ahold are struggling, and the company faces additional challenges in Africa, Asia and the United Kingdom. “Walmart struggles so much outside of North

America, it’s going to be that much more important for Walmart to succeed in Canada going forward,” he says. “Aldi’s going to be expanding very aggressively; Dollar General is going to continue to expand.

Walmart can’t fnd a way to beat Dollar General on general merchandise and hasn’t found a way to beat Aldi. With Costco being its worst enemy, Walmart’s fghting a four-front war for the frst time.”

Greg Foran, promoted in July to CEO of Walmart U.S., had been a top executive with Woolworths, Australia’s leading grocer, where smaller-format stores are more common. Foran’s promotion sparked rumors about the future of Duncan McNaughton, the retailer’s U.S. chief merchandising ofcer, who ultimately left the company just before Black Friday.

Flickinger says Walmart’s executives “know how to course-correct,” but the company’s board needs to “change its view on cost versus investment” in regard to stafng. “Tey’ve got good leaders and, given the resources, could turn the company around.”

He concludes: “It’s very important that Walmart turn around in 2015 or risk having the frst 50 years of this century be what the last 50 years were for Sears and Kmart.” PG

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Professional Store Manager Leadership Forum

Industry Events

Managers

Take Action

Industry Professional Store Manager Leadership Forum demonstrates the power of sharing.

By Joan Driggs

ProfEssIonal lEaDErshIP harold lloyd is dedicated to enriching the image of store managers, both within the industry and through the public eye.

T

he Professional Store Manager Leadership Forum, the frst of what should be standard industry practice, illustrates that efective change requires insight plus action.

In this case, the insight stems from the second Food Marketing Institute Store Manager Survey, collaboratively developed in early 2014 by supermarket retail specialist Harold Lloyd, principal of Virginia Beach, Va.-based Harold Lloyd Presents, and

Te Retail Feedback Group.

T Te frst Store Manager Survey was felded in 2012 ““in order to provide our independent operator members a glimpse into the psyche of a store manager. Te b rresults ofer insights into their career goals to compensation,” says Dagmar Farr, SVP, FMI member p services. “Given the beneft of the fndings, the survey ggrew to include all store managers in 2014 and will be conducted on a yearly basis.”

A key fnding is that more than 90 percent of sstore manager respondents “love their job,” but store managers said they were often challenged to fnd a m “healthy balance” between work life and home life.

“By understanding managers’ job perceptions — what works well and what needs improvement — we can w ttake steps as an industry and at our own companies tto improve the engagement and performance of the men and women who are running our stores,” acm ccording to the survey.

Lloyd presented the thought-provoking fndings of the survey at FMI Connect and aired his idea of hosting a forum for top-level store managers. “I wanted to work through the life of a store manager and enrich it in both the eyes of the industry and the h public,” he says; attendees expressed support.

As a follow-up, “I contacted 40 of the best retailers in North America and received a positive response from more than 30 of them,” he says. In the end, 27 retailer banners were represented by 36 store managers at the frst Professional Store Manager Leadership Forum (PSMLF), held in December 2014 in Virginia Beach.

Te forum was a remarkable example of industry players working to “lift all boats.” “I want to share as much of [my store’s best practices] with you as I can,” a North Carolina store manager told fellow attendees as he introduced himself.

“We want to grow the industry.”

January 2015 | progressivegrocer.com |

47

Industry Events

Professional Store Manager Leadership Forum

Pain and Gain on the Agenda Te forum agenda included four key elements: sharing business challenges; store tours; a Harold Lloyd Presents seminar, “Am I the Leader I Need to Be?”; and an exchange of best practices.

Many of the key issues addressed in the FMI survey were also topics raised at the PSMLF, including work-life balance, communication, performance evaluation, celebration/recognition, job/business/career, mission/goals, and training/ development.

Te two-day forum kicked of with a supportive networking exercise; managers shared their key issues and peers ofered to help with their solutions.

Lloyd facilitated next steps for connecting smaller groups to work through issues post-PSMLF. Topics raised, and which had others ofering to help, included: “How do I get my department managers to engage in weekly meetings? Unless people are called on, they don’t participate.”

“As a young store manager, how do I get buy-in from the meat cutter who’s been there for 40 years?”

“Te way I’ve led in the past — spank hard, hug hard, push and recognize — doesn’t seem to be working [with Millennials].”

“How do I get a very experienced assistant manager to acknowledge her daily inconsistencies are holding her back?”

“How can we get the kids who work for us to view grocery retail as a career?”

“Facilitating next steps allows the attendees to take responsibility and accountability, but the beauty of the exercise is that it levels the room. One manager might come from one of the biggest chains in the country, and another might be a manager at a three-store chain, but after sharing these problems, everyone is an equal,” says Lloyd.

Communication: No Problem Communication was a key issue addressed in FMI’s Store Manager Survey. Just 5.4 percent of store manager respondents reported that department manager meetings aren’t engaging and productive. Te remaining 95 percent either agreed (62.1

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| Progressive Grocer | Ahead of What’s Next | January 2015

percent) or strongly agreed (32.6 percent) that these meetings are engaging and productive. Many managers and the PSMLF shared their strategies for successful employee engagement.

A British Columbia-based store manager and facilitates weekly meetings with his department managers. He sends out the meeting agenda three days in advance so all will be prepared. Department managers take turns recording meeting minutes and sending them out within two days of the meeting. “It’s an opportunity for everyone to be involved and set goals openly and honestly with the leadership team,” he said. “I’ve seen very shy, introverted managers grow in confdence through the relationships they’ve built during these meetings.”

A manager from an Ohio-based chain “slowly” walks the aisles of his store each day, engaging with each associate on duty. “It’s a great connection,” he said. “I ask how things are going and often have personal conversations if appropriate.”

Many managers organize daily huddles — some twice daily — to set goals and collaborate among departments. “We have meetings at 9 a.m. and 3 p.m.; at the afternoon meeting, we can see how much progress has been made,” one manager noted.

“Frequently, departments work together to get the entire store in the best shape possible.”

A Fine Balance Work-life balance was a key topic of the survey and the forum, with the diference being that PSMLF attendees wanted to address the balance experienced by their associates, rather than by themselves.

More than 30 percent of store manager respondents to FMI’s survey disagreed with the statement: “I have a healthy balance between my work and home life.” Tis is the lowest level of agreement for any statements; just 17.3 percent strongly agreed.

“Coming up through the ranks, I missed a lot of important events in my children’s lives because these events didn’t matter to some of the managers

“The freedom to share ideas and the detail of the ideas mean that not one manager participating in the forum left unchallenged to go back and improve something in his or her store.”

—Harold Lloyd, Harold Lloyd Presents

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Industry Events

Professional Store Manager Leadership Forum

I had. You were scheduled to work, and you were expected to be there. I was bitter and resented management for this, and told myself that when I become a store manager, I would not do this,” an Indiana-based manager said. Tis manager created an environment that supports important events.

Department heads and key personnel populate a shared calendar; not only does the manager schedule accordingly, but peers step up and cover for each other willingly. “It makes the staf happy because they know I care about them and [respect] their personal life,” the manager explained.

“By working around these important events, I feel I’m getting the most productive and fexible managers,” he said. An added bonus is the teamwork and cross-training that occurs throughout the store. “People are learning diferent jobs to help out as needed,” the manager observed.

Celebration/Recognition Disagree

14.8% 19.1%

Agree

Strongly Agree

29.1%

56.2%

45.5%

35.4%

21.0%

27.1%

51.9% Performance Evaluation Disagree

Agree

2.1% 38.5% 15.6% 19.3%

Strongly Agree

59.4%

51.2% 49.6%

33.2% 31.0%

Source: 2014 FMI Store Manager Survey

50

| Progressive Grocer | Ahead of What’s Next | January 2015

A Reason to Celebrate Respondents to the Store Manager Survey gave mixed reviews on the degree to which they’re recognized or celebrated. Nearly 15 percent of store manager respondents to FMI’s survey disagreed that their company does a good job with celebration and recognition of achievements. Nearly 30 percent strongly agreed with the statement, and 56.2 percent agreed.

Rather than looking to corporate headquarters for directives, store managers seem most willing to create their own programs.

A number of retailers send birthday cards to each employee. One manager mails handwritten “moments” cards to associates’ homes. Recognizing the eforts of often young and inexperienced workers enhances loyalty and may be the catalyst for a deeper commitment to the grocery industry. “Employees are more likely to stay with your company, be more productive and motivated, and feel valued,” a manager said of birthday cards and notes.

Performance Reviews, Mapping Success Most store manager respondents to FMI’s survey think they’re very qualifed to give performance evaluations: 59.4 percent strongly agreed and 38.5 percent agree. Lloyd challenged the group to rethink the traditional performance review, starting with the name. “Success plans,” he said, are more forward-thinking. “It’s all about the goals and creating impactful game-changers.”

Lloyd also stressed the magic that occurs when three people participate in success plan meetings: “Te employee being reviewed likes having the boss’ boss there in case there’s a barrier to success; it can be worked out right there and he can impress up the chain of command. Te manager wants to show how well he’s developed the direct report over the past year, and the big boss can see the level of talent within the company.”

Anticipating the Next Forum Many of the elements of the PSMLF were designed as next steps for 2015. Attendees were tasked with reporting back on successes and changes implemented, based on ideas from this frst forum. Lloyd has also received feedback from attendees that they’d like to spend more time discussing problems and challenges on-site.

Lloyd and FMI are optimistic about the future of the forum. “Te freedom to share ideas and the detail of the ideas mean that not one manager participating in the forum left unchallenged to go back and improve something in his or her store,” says Lloyd.

“I think the event allowed for a greater sense of community and respect for the profession,” says FMI’s Farr. “I appreciate any opportunity to celebrate the store manager. Tey are the backbone of this industry.” PG

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Beer/Wine Category Management

Grocery

From

Grains to Grapes Cross-merchandising, assortment optimization and trendy formats guide beer and wine category management.

By Jim Dudlicek

N

ew strategies to optimize assortment, drive trial and inspire product innovation are at the forefront of category management in the beer and wine aisles.

Brewers and vintners are collaborating efectively with their retail partners to promote sales within brand families, across categories and even throughout the store via strategic cross-merchandising of complementary products.

“Tere are a lot of opportunities to get our brands next to the right foods,” Greg McLeod, VP of grocery and mass channels at AnheuserBusch, said at the St. Louis-based brewer’s recent media open house.

On display in the company’s retail immersion lab were some examples of these well-calculated pairings designed to inspire sales, generate emotion and demonstrate usage occasions, some in areas that perhaps aren’t top of mind among most shoppers.

Tere’s the logical pro football-themed promotions of A-B products with Frito-Lay snacks and Pepsi soft drinks. “We share [sponsorship of] the NFL, so it’s natural to work together,” McLeod noted. Other natural teammates for beer include Red Baron and Freschetta frozen pizza and Cape Cod brand snacks. New partners, but again a logical pairing for these mancentric categories: Kingsford charcoal and KC Masterpiece barbecue sauce.

“We’re working to position our brands alongside consumer trends to ensure that the right message, at the right time, is seen by the right person,” says Tim Gossett, A-B’s VP for national retail sales and category leadership.

“From the latest Shopper Poll, we know 40 percent of consumers are looking for beer to complement their food occasion. If you cross-merchandise beer displays with food, shoppers will be three times more likely to buy beer to complement their meal. Sixty percent of shoppers are buying beer to share with others, so positioning beer with other items, such as chips, helps drive basket size.”

A-B’s more innovative partnerships? Goose Island in the meat department, Stella Artois with specialty cheese, and Japanese import Kirin Ichiban with sushi in

If you crossmerchandise beer displays with food, shoppers will be three times more likely to buy beer to complement their meal.”

—Tim Gossett, Anheuser-Busch

January 2015 | progressivegrocer.com |

53

Grocery

INSPIRED D PAIRINGS S Anheuser-Busch crossmerchandising includes Bud Light Lime-A-Rita with outdoor grilling products, and Shock Top beer with citrus fruit.

Beer/Wine Category Management

the h d deli. li A A-B B also has designed an elaborate display that teams Stella with Ghirardelli chocolate for Valentine’s Day; the display’s modular construction allows it to be easily converted to an Easter promotion.

Further pairings of A-B products with diferent foods are showcased in the brewer’s sampling program with select retailers, dubbed Brew Appetit, which McLeod explained ofers shoppers “a hop, sip and a bite.”

La Lager Heads A-B continues to build upon its successful Balanced Portfolio Approach, which for several years running has allowed the brewer to boost category sales for retail partners by tapping key shopper insights and developing customized plans for each grocer.

“Category management continues to evolve, and the biggest opportunities we see are around the shopper,” Gossett says. “Shopper insights and third-party data continue to shape our platform and best-in-class beer category management recommendations.

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Beer/Wine Category Management

Beyond understanding the shopper, he says, it’s also critical to understand the specifc goals of the retailer. “Once this understanding is achieved, opportunities can be gained by focusing on the key areas of space allocation — days of inventory and store-level operational information to drive

A Drink for All Seasons and Reasons When it comes to alcoholic beverage choices for Americans age 21 and older, how much does the “when” of it factor into the type of drink one chooses?

Quite a bit, as it turns out: When presented with a broad selection of adult beverage types, those who drink several times a year or more clearly reach for different drinks on different occasions.

Beer is the top choice as something they’re most likely to drink throughout the year (though table — that is, not sparkling — wine is the top choice for women and the over-65 set). Table wine gets the silver medal overall, although the second tier shows considerable variation by age and gender. For consumers age 21-44, liquor/spirits/cocktails hold this position, while wine is second choice for those 45 and older. Liquor/spirits/ cocktails are the second-highest year-round picks for men, while beer holds this distinction among women.

However, table wine is the top choice for Christmas.

These are some of the results of The Harris Poll of 1,951 adults age 21 and older (of whom 1,176 drink alcohol several times per year or more), surveyed online between Aug. 20-22, 2014.

Beer follows wine as the second choice for Christmas overall, although among women and those aged 65 and up, liquor, spirits or cocktails come in as the second choice to sip around the tree. These preferences all echo those seen for Thanksgiving, while prefer-

56

revenue, trips and basket size.”

Digging deeper into shopper data to deliver further strategies and analyze why best-in-class retailers were winning in the category, A-B gathered syndicated data from nearly 40,000 retail outlets. Segmenting the data by channel type, retail route-to-market and population

ences shift considerably as one continues to review the holiday calendar throughout the year.

Sparkling wine is the top selection for New Year’s Eve, with liquor/spirits/cocktails as the second choice overall, although among women, they share this position with table wine.

On Super Bowl Sunday, these Americans turn from grapes to grains, as beer is the top selection across the age spectrum and for both men and women.

Liquor/spirits/cocktails come in second, while flavored malt beverages are choice No. 3 overall; those age 55 and older turn to table wine as their third choice.

Table wines are the favorite for Valentine’s Day, with ages and genders in full agreement. And it should come as no surprise that beer takes first chair for St. Patrick’s Day; liquor, spirits and cocktails come in as the second most popular drinks for both holidays.

Beer also leads for Cinco de Mayo, followed by liquor, spirits and cocktails. Come Mother’s Day, wine takes back the top spot, as it does for Easter.

Once grilling season kicks off, though, beer seems to hang on as the top holiday selection until things cool down. It’s the No. 1 selection both overall and, more specifically, across age and gender lines for Memorial Day weekend, the Fourth of July and Labor Day weekend.

In fact, the entire roster of top five selections is consistent across all three of these holidays, with liquor/spirits/cocktails coming in second and table wine third. While perhaps less well known, flavored malt beverages are the fourth most common selection for these holidays, while hard cider comes in fifth.

Sources: Nielsen and Harris Poll

| Progressive Grocer | Ahead of What’s Next | January 2015

density, and then quartiling each cluster of accounts to determine winning retailers based on revenue per outlet, allowed A-B to see what the top 25 percent of stores were doing versus the bottom 25 percent.

“When retailers utilize our recommendations, they typically see trends above the average,” Gossett asserts. “We work to provide best-in-class category management recommendations to retailers of all levels. We work to customize recommended solutions to meet each retailer’s needs to help them maximize their success and win with their customer base.”

In 2014, Gossett says, A-B’s suggestions helped grow beer dollars (6.2 percent) and gain category share of market (up 0.62), per internal sources. “Our recommendations are built upon identifying opportunities that retailers can use to meet their consumers’ needs so the entire beer category wins,” he says.

Te team at White Plains, N.Y.-based Heineken USA also advocates optimizing beer assortment to drive the most incremental dollars.

“Incrementality is measured by how much a new item truly grows the category versus cannibalizing other brands,” says Nick Lake, Heineken’s senior director of category development. “Te more unique and diferentiated an item is, the more incremental

volume that item will add to the assortment.”

Lake advises a mix of high-reach scale brands (e.g., Heineken and Corona Extra), strong growth brands (e.g., Dos Equis), and the fastest-moving national and local craft brands as being key to minimizing out-of-stocks and increasing sales.

“Winning retailers are using this approach to balance assortment variety and avoid duplication,” he says. “Tey’ve realized that adding more beer SKUs does not lead to more purchases, and instead are adding unique and diferentiated items to their assortment to increase incremental volume and drive higher basket rings.”

Further, retailers should optimize assortment fow based on insights pinpointing target shoppers, key occasions, and their favored segments and brands. “Optimizing assortment and fow is critical and can mean the diference between making and losing a sale,” Lake observes.

Retailers should leverage two key trends. First, the upscale beer segment that’s driving overall category growth, forecast to rise 10 percent to 12 percent over the next fve years (compared with projected fat growth of total beer). “Within upscale, Mexican imports represent a huge pocket of opportunity for

Optimizing assortment and flow is critical and can mean the difference between making and losing a sale.”

—Nick Lake, Heineken USA

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Beer/Wine Category Management

retailers,” Lake notes. In addition to shelf efciency, “they have strong appeal among young multicultural consumers, a demographic projected to account for 70 percent of future beer category growth,” he points out.

Additionally, hard cider is fnding wide appeal among both men and women in two distinct segments: the “savor” segment, featuring a lower-energy, artisan set of brands that currently represents

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| Progressive Grocer | Ahead of What’s Next | January 2015

approximately 80 percent of category sales; and the faster-growing “amplify” segment, with a higher-energy, dynamic set of brands.

Through the Grapevine Alternative packaging in singleserve and convenience beverages is the growing opportunity in the beer and wine aisle. “Te ability to take a beverage of choice outdoors or on an adventure where volume or bulkiness would be difcult has growing appeal to consumers,” says Jason Carignan, chief marketing ofcer for Moorpark, Calif.-based Kretek International, whose partnership with Miravante Brands LLC gave birth to Nuvino, a line of premium wine in single-serve pouches that launched last spring.

“We believe that the biggest drive to the wine category specifcally is the Millennial customer,” Carignan notes.

“Te broad appeal is driven to products like Nuvino that has the single-serve pouch that appeals to the Millennial market and beyond.”

Kretek has developed marketing plans for chains and independent stores. “Tey’re in the beginning stages, but they’ve been a win-win already for us, and it’s impressive to retailers because it sets us aside from other brands and shows that we are serious about moving the product on their shelves,” Carignan says.

With an MSRP of $3.99 per pouch, the Nuvino line includes four premium varietals: Chilean Sauvignon Blanc, South African Chardonnay, Argentinian Malbec and an Australian red blend.

Continuing the theme of premium wines in more convenient formats, Napa, Calif.-based Delicato Family Vineyards, maker of the Bota Box, collaborated with a northwestern grocer to create the 1.5-liter Bota Brick, aimed at boosting that stagnant category size.

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Beer/Wine Category Management

In a 24-week pilot test conducted in 109 supermarket stores in the Northwest last year, trials of the Bota Brick in the 1.5-liter glass wine section contributed to a 3.5 percent increase in 1.5-liter segment sales, while control stores not carrying the Bota Brick during the same period saw a sales decline of 4 percent in the 1.5-liter segment, according to Market6 analytics.

Bota Brick packaging, constructed with corn starch over synthetic glues, is totally recyclable. State-of-the-art bag-in-box technology allows consumers to enjoy wine from the Bota Brick for up tto four weeks after opening. Retailing for $12.99, the Brick joins the fagship 3-liter Bota Box and the 500-milliliter Tetra Pak Bota Mini.

Eforts to encourage in-store trial are being furthered by Campbell, Calif.-based Napa Technology, maker of the WineStation, which allows retailers to deliver secure and automated controlled portions without the additional labor or expense of events.

Te ability to provide active and efective sampling for aggressive case movement and consumer engagement gives retailers an edge in driving

category growth, says Jayne Portnoy, N Napa T Technolh l ogy’s VP of marketing. Te company is currently partnering with several major national and regional grocers “to bring this unique technology to their aisles, and profts to the bottom line,” she notes.

Taking the lead in simplifying the planogramming process is Modesto, Calif.-based E&J Gallo Winery, which developed the industry’s frst proprietary category management and schematic automation systems. Using its custom category management system and set automation tool, Gallo was able to transform a major national supermarket chain’s manual planogramming into an automated yet customized storespecifc process.

Assortment was determined using the corporate buyer’s authorization list, division/cluster data, and chain-determined key performance indicators.

Benchmark schematics were created to give teams a cluster-level baseline planogram; custom store-level planograms were available to polish before turning in for the ofcial reset. Finally, in addition to the store dry-shelf planograms, store-level data was used to assign the best items to the store-specifc cold box, putting the right products in front of the right customer at the right time.

Since implementation, the grocer went from trending behind the market to performing at pace, with doubleMore digit trend growth; dollars spent per trip have increased by double those of both beer and spirits categories. Gallo demonstrated that quality data-driven processes can meet local shopper needs more efectively, drive remarkable effciencies and speed up time to market Designed, engineered assembled USA on new items. PG

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Grocery

Soup

Cold

Comfort Purveyors of the winter favorite weigh in on the best ways to play up the category.

By Bridget Goldschmidt

C Who doesn’t enjoy a bowl of hot soup on cold winter day?”

—Mark Caine, Massel

64

hilly weather and soup go together — it’s not for nothing that January is National Soup Month.

To capitalize on this natural connection, Massel, an Australian company launching its vegan, allnatural gluten- and allergy-free Concentrated Liquid Stock in the United States, has introduced 31 Days of Soup, which features a new soup recipe for every day in the month, including a hearty Lucky Lentil Soup. Te full lineup of recipes is available online at http://massel.com/recipes/soups.

“Who doesn’t enjoy a bowl of hot soup on cold winter day?” asked Mark Caine, director of sales and marketing for Sydney-based Massel (U.S. headquarters are in Carol Stream, Ill.), when the promotion was revealed last November. “With the convenience of our small 3.8-ounce concentrated stock pouch that makes two full quarts of stock, coupled with the variety of vegetable, chicken-style and beef-style favors, the soup possibilities are endless.”

Additional recent promotional activities by the emerging brand have included “radio campaigns in Chicago, Pennsylvania and California, headed up by [Australian food blogger and actress] Tess Masters, ‘Te Blender Girl,’ who is a big fan of our products,” Caine tells Progressive Grocer, noting that Massel was featured in a Dec. 12 USA Today feature on glutenfree products. “In store, we are running consistent price promotions, BOGO and catalog exposure, along with in-store demonstrations,” he adds. “Massel is also very active on social media platforms, including Twitter parties — with prizes — and online competitions all revolving around how eating better

| Progressive Grocer | Ahead of What’s Next | January 2015

doesn’t mean you have to sacrifce favor favor.””

Merchandising strategies adopted by the brand include “of-location displays at the front of the store or near the bouillon set,” according to Caine.

“Tis draws attention to our points of diference.”

For grocers hoping to inspire more cold-weather shelf-stable soup purchases, he suggests that they “communicate the health benefts and that soup can ofer an easy, tasty meal that can be satisfying.”

Package Deals and More Although shelf-stable soups have long been available in packaging other than cans, pouches are becoming ever more popular, as evidenced by the July rollout of two Progresso Chili SKUs — Southwest Style White Chicken and Smokehouse Style Pork and Beef with Beans — in 20-ounce pouches, a move that Jill Haspert, associate marketing manager for Progresso at Minneapolis-based General Mills, attributes to the brand’s commitment to

“new packaging formats outside of the traditional can.” Additionally, Progresso ofers its Artisan line of gourmet soups in aseptic Tetra Pak cartons.

Progresso isn’t just focusing on distinctive packaging, though. “Consumers told us they were looking for delicious, convenient dinner options that taste like homemade — and our chili launch directly fts what consumers have asked us for,” asserts Haspert.

Among those that have ofered soup out of the can for some time, Seb Rametta, founder of the “Seinfeld”-inspired Original SoupMan, based in Staten Island, N.Y., notes: “Our [Tetra Pak] packaging is a clear advantage that has been an engine for our growth over the last few years. However, it is the quality, unique favor, distinctive recipes and ingredients, and the authenticity of Te Original SoupMan that is the real foundation of our success.”

Te company’s promotional and merchandising plans for this year include an awareness campaign to spark trial among consumers. “We will have the SoupMan [“Seinfeld” actor Larry Tomas] lead the charge on this ‘souper’ campaign,” quips Rametta.

“We have found to date that in-store displays work best for us, as it makes it easy for the consumer, who is distracted with everyday life and all the messaging in the store, to see there is something new, yet familiar because of the brand, and most importantly, interesting and worthy of trial,” he adds, counseling that prominent soup displays and tastings are sure-fre ways to generate in-store excitement.

Ready, Set, Soup Meanwhile, Ben Hummel, brand manager at Tualatin, Ore.-based Pacifc Foods, which also ofers soups in aseptic packaging, asserts, “Cans will continue to slowly decline, as they are not as eco-friendly

as cartons, and most contain BPA liners,” which have been identifed in scientifc studies as a potential health hazard.

Pacifc — the leading natural/ organic ready-to-eat soup (RTE) brand, according to Schaumburg, Ill.-based SPINS — has expanded its hearty soup line with on-trend Organic Vegetable Quinoa and classic New England Clam Chowder, as well as bringing out 8-ounce single-serve versions of its best-selling Organic Roasted Red Pepper & Tomato and Organic Creamy Tomato varieties.

When it comes to merchandising product, frst in importance, according to Hummel, is getting the set right. “Best-in-class soup sets understand how each type of soup is used, because there are many subsegments to the RTE soup category: creamy soups, condensed soups, hearty vegetarian/ vegan soups, hearty meat soups. It is important to carry a few SKUs of each, as each meets a diferent consumer need,” including as recipe ingredients or as comfort fare for cold and fu suferers.

“Next, it is important to understand your consumers, and which brand will appeal to them,” continues Hummel. “Some consumers will shop on price, some on perceived taste, and others on nutrition and quality of ingredients. Each brand should play some role that easily helps consumers fnd the brand and favor that appeal to them.

“Last, it is important to spot opportunities to promote when relevant,” he concludes. “Soups are one of those pantry items that you want to have on hand at all times, but that means it may not frequently be on a consumer’s shopping list, and they may need to be reminded about soup in-store.”

To do that, Hummel urges retailers to “look beyond soup and consider consumer motivation for purchasing. Why do consumers buy soup? To have on hand for easy, quick meals; as an appetizer for a multicourse meal; to take to work for lunch; and because they are sick.”

He recommends that grocers create displays to solve those problems for consumers, such as chicken soup cross-merchandised with tea, facial tissues and cough drops, for a one-stop fu remedy shop; shelf-stable soups paired with ready-made salads and sandwiches in the deli; soup placed near bagged salads and bakery breads for quick meal solutions; and, in advance of a predicted blizzard, soup sold alongside bottled water, milk, bread, hot cocoa, and other staples to help consumers stock up on essentials before the storm. PG

Why do consumers buy soup? To have on hand for easy, quick meals; as an appetizer for a multicourse meal; to take to work for lunch; and because they are sick.”

—Ben Hummel, Pacific Foods

SOUP FOR YOU The Original SoupMan is using “Seinfeld” actor Larry Thomas to help raise consumer awareness of the brand.

For more about shelf-stable soup, visit Progressivegrocer.com/soup.

January 2015 | progressivegrocer.com |

65

Grocery

Dairy

The

Case for Dairy

The staple category looks to refresh itself with new products and positioning.

By Bridget Goldschmidt

T

hese days, dairy seems to be on an upswing — Nielsen fgures for the 52 weeks ended Nov. 22, 2014, show sales dollars for the overall category at food stores with sales of $2 million or more up 3.8 percent, following two years of fat growth — but how can the section, best known for its commodity products, keep its sales rising in the future?

Te answer may be innovation, and lots of it.

“According to the Innovation Center for U.S. Dairy, reinventing and repositioning the dairy [section] to meet emerging consumer needs has the potential to generate over $1 billion for the category,” notes Skip Shaw, president and CEO of the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA).

“Currently, most dairy categories, especially

The Dairy-free Option Of course, the dairy case is also home to items that contain no actual dairy ingredients — soymilk being perhaps the most visible example — but there are plenty of others, including Melt Organic, a relatively recent entry in the butter substitute segment. An all-natural butter alternative — or “Butter 2.0,” as Meg Carlson, president and CEO of Boise, Idaho-based manu-

66

fuid milk, address only the most basic of consumer needs.

Dairy innovation will need to move beyond core messaging and beneft delivery to fusions of benefts that deliver more efectively on these evolving, multidimensional needs.”

In terms of product trends, Shaw lists “bold favors, nutrition labels and snacking occasions ... among the watchwords [for] 2015.”

Heeding the call for novel favors is Vermont-based Cabot Creamery Cooperative. “Tis past year, we introduced our Legacy Collection, new and exciting favor profles for the dairy case,” notes Director of Marketing Amy Levine. “Te Legacy line is designed to add interest and excitement to the selection of cheeses available in the dairy case.” Te collection includes Alpine Cheddar, with notes of Swiss and Parmesan; White Oak, a British-style cheddar with a subtle caramel favor; and Farmhouse Reserve, an artisanal-grade cheddar with Cabot’s distinctive East Coast bite.

facturer Prosperity Organic Foods Inc., calls it — Melt features virgin coconut oil as its lead ingredient.

Carlson’s advice to retailers on boosting dairy sales is to “improve the butter/margarine assortment by adding more great-tasting alternatives ... that are dairy-free, soyfree, organic and Non-GMO Verified. Feature those unique products with specialty tags in store to draw the attention of moms and dads.

“Rely less on past sales results,

| Progressive Grocer | Ahead of What’s Next | January 2015

since the majority of traditional butter substitutes are in doubledigit decline, and focus on new products that appeal to the next generation of parents, who are buying more organic products in the dairy aisle.

“Understand the additional value of new butter substitutes ... on increased sales value of total shopping baskets, and [their] role in drawing new parents into conventional grocery stores.”

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Dairy innovation will need to move beyond core messaging and benefit delivery to fusions of benefits that deliver more effectively on these evolving, multidimensional needs.”

—Skip Shaw, NFRA

68

Dairy

Dairy All Day “Busy lifestyles leave Americans snacking more than ever before — and the concept of snacks has evolved beyond just chips, popcorn or pretzels,” says Shaw. “With a variety of foods and beverages, the refrigerated dairy aisle is home to endless snacking possibilities.”

One dairy segment that’s been touting its snackability of late is yogurt. Shaw notes how “Chobani is trying to grow snack consumption with Chobani Flips, which includes yogurt and ‘mix-in’ toppings like graham-cracker crumbles and white chocolate.” Meanwhile, he points out that the Norwich, N.Y.-based brand is also encouraging evening consumption of its “indulgent” variety, a mix of yogurt and dark chocolate.

Dannon is likewise working to get consumers to consider yogurt as not just a breakfast item. Te White Plains, N.Y.-based company “has adapted our

| Progressive Grocer | Ahead of What’s Next | January 2015

diverse range of yogurt oferings to include Greek varieties of Danimals, specifcally for kids; Oikos Greek in both refrigerated and frozen varieties; Activia, with its digestive health beneft; and Light & Fit, with 80 calories in a huge variety of favors,” observes Michael J. Neuwirth, senior director of public relations.

“We believe the next platforms will include more convenience as well as expanding the use and appeal of yogurt into more dessert options.” Tere’s already been some success on the latter front, he afrms: “We’re seeing growth in dessert-style products as Americans realize the versatility of yogurt.”

‘Protein Plus’ On the nutrition front, “Protein continues to capture consumer excitement and interest,” says Cary Frye, VP of scientifc and regulatory afairs at the Washington, D.C.-based International Dairy Foods Association (IDFA). “It was a big driver in the popularity

and growth of Greek yogurt, and now protein-fortifed milks are gaining consumer attention,” including H-E-B MooTopia, with 50 percent more protein and 25 percent more calcium than ordinary milk.

“Protein-rich foods and beverages continue to be a growing trend,” concurs Julia Kadison, CEO of the Washington-based Milk Processor Education Program (MilkPEP).

She notes, however, that since many Americans are unaware that milk — fortifed or not — is itself a source of protein, MilkPEP is “dedicated to bridging that gap with out-of-the-box thinking, disruptive marketing programs, and a commitment to shake things up, take risks and be bold.

“I think protein will continue to capture consumer interest — and milk continues to deliver on ‘protein plus,’” she asserts. “We anticipate the demand for high-quality protein to continue, and we know that milk can deliver.”

Te enduring popularity of milk is good news for ancillary products like Milk Splash, a new zero-

calorie, kid-oriented milk favoring from S&D Beverage Innovations LLC, a division of Concord, N.C.based S&D Cofee Inc. “One of the best things about the dairy case is that it’s a major driver of grocery store trafc,” says Daniel Pancotto, S&D Cofee’s director, brand promotion and communications. “It absolutely brings people to the store. Te challenge lies in getting people to see all that the dairy case has to ofer, as opposed to it just being an obligatory stop.”

What will keep customers coming, he believes, is a high level of engagement with the section’s products. “Te successful campaigns are going to be the ones that make dairy cool again,” he notes.

“Kids need milk, but if you pitch it that way to a 7-year-old, it sounds about as exciting as a math test on Monday.” PG For more about the dairy category, visit Progressivegrocer.com/dairy.

We anticipate the demand for high-quality protein to continue, and we know that milk can deliver.”

—Julia Kadison, MilkPEP

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Foodservice

Fresh Food

Thinking Like a

Restaurant

Opportunities abound as consumers continue to look at grocery stores as a dining option.

I

By Jim Dudlicek

n the past year, nearly three-quarters of supermarket consumers have taken home and eaten prepared foods from the grocery store, and more than half have consumed such items in their markets’ dining areas.

Tese fndings, from a recent study by Acosta Sales & Marketing, indicate that foodservice continues to be a growth category for grocery retailers, and one that by most accounts is here for the long haul.

“I believe there is tremendous opportunity for grocery stores to shift from the historical ingredient/ component approach we have seen for many years,” says Mark Hayden, president of Acosta Foodservice for the Jacksonville, Fla.-based marketing consultancy.

Research from “Te Why? Behind Te Dine,” a July 2014 survey of 1,500 U.S. foodservice consumers, conducted in partnership with Chicago-based Technomic, indicates that consumers view retail foodservice as a convenient opportunity for them to grab a meal for themselves or the entire family. Indeed, lines have blurred to create the “grocerant” — grocery store as restaurant — where ready-to-eat meals have been a major growth area.

“It’s important to create oferings that are high-quality and executed consistently day to day,” Hayden says. “Tis is where bringing foodservice expertise is important to consult on areas such as equipment, packaging, food preparation, menu design and marketing strategies, to create visibility for their programs.”

The Why? Behind The Dine™

Source: Acosta Foodservice and Technomic

January 2015 | progressivegrocer.com |

71

Fresh Food

It is important to think like a restaurant overall to meet the more demanding expectations of consumers who show tremendous loyalty for quality and consistent awayfrom-home food experiences.”

—Mark Hayden, Acosta Foodservice

Foodservice

Demanding Expectations Tat’s defnitely been the approach taken by many grocers. One of the latest is Schenectady, N.Y.-based Price Chopper’s Market Bistro, the Golub family enterprise embarking on a chain-wide rebranding as Market 32 (see Ones to Watch, beginning on page 33 of this issue). Market Bistro’s Bistro Blvd., a bold new dining concept PG detailed in a July 2014 Store of the Month feature, is part of the template.

“Prepared foods should be an experience of choice — great ambiance, sensory stimulus,” says Troy Johnson, Price Chopper’s VP of deli and foodservice. According to Johnson, those choices should include recognizable favorites with a twist; compelling oferings for consumers to indulge in; fresh, restaurant-quality convenience; and diverse ethnic choices by location. “Also, health and wellness is a driver — low-sodium, gluten-free,” he notes. “Everyone is reading labels and, now, all menu boards, too.”

Supermarket foodservice is one of the fastestgrowing segments of the food industry, the Acosta study indicates. According to Technomic, sales of prepared foods, which include in-store and takeout dining, are up 30 percent since 2008, compared with about 10 percent for the overall foodservice

industry during this period.

“With so many options available to them, consumers’ meal decisions intersect across categories on an increasingly routine basis,” the study relates. “In fact, dinner may include a ready-made selection from the grocery store (rotisserie chicken) with a homemade casserole and semi-homemade salad-in-a-bag, while lunch at work may consist of store-bought baked snack chips and favored water brought from home, with a turkey wrap from a nearby prepared food department.”

When asked to name the three most important reasons they brought home prepared foods from the grocery store, respondents most often said they didn’t want to cook that evening (46 percent); convenience, because they were already at the store (44 percent); and that it was cheaper than eating out (34 percent).

“Te biggest opportunity for grocery stores is to focus on quality, consistency and efective packaging for core menu oferings to ensure they meet or exceed consumers’ other away-from-home options,” Hayden says. “It is important to think like a restaurant overall to meet the more demanding expectations of consumers who show tremendous loyalty for quality and consistent away-fromhome food experiences.”

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Be Prepared Consumer packaged goods companies have also responded with meal solution products or oferings that require some simple home preparation, the Acosta study reveals.

Among them is Charlotte, N.C.-based Stefano Foods, a division of Smithfeld Foods that makes pizza, frozen dough and other heatand-eat items for supermarket delis. “Items from other cultures and countries with unique favors are desired,” says Alan Hamer, VP at Stefano Foods. “Supermarkets provide a vehicle for experimentation at a fraction of the cost of a comparable restaurant experience.”

Hamer says customization of components “answers the desire to be involved in foods they eat, regardless of culinary skill.” Further, he says, “consumers trust supermarket foodservice when they have physical proof that there is dedication and commitment to the given program.”

Te folks at Beaverton, Ore.-based Reser’s Fine Foods, which makes cold salads, salsas and other items for grocery foodservice, see trends in ethnic favors, including multicultural fusions, and healthier salads with ingredients such as ancient grains, beets, kale or caulifower.

Brenda Killingsworth, Reser’s trade marketing manager, and her team suggest grocers use branded in-store products to prepare meals to go, call out local products, and market meal solutions online as well as in-store.

“It will be a continued focus of retail to steal share from foodservice restaurants,” Killingsworth says. “Supermarkets are hiring experienced chefs and staf to create in-store dining and full-blown restaurants. Adding things like wine or beer tastings or live music will continue to pull in consumers.”

Among the recommendations from Price Chopper’s Johnson: “Don’t play it so safe. Keep an eye on overall mix. Build a loyal relationship with consumers through innovative, signature items in prepared foods.”

Further, communicating with Millennials is an opportunity, via mobile apps, iPads, kiosks and digital menu boards.

Says Johnson: “Retailers need to balance quality, consistency, food safety and stafng. Te entire store must develop a reputation as a fresh food destination, not just the same old chicken, pizza or packaged food in a case, but an interesting, exciting solution that drives repeat business.” PG

Don’t play it so safe.

Build a loyal relationship with consumers through innovative, signature items in prepared foods.”

—Troy Johnson, Price Chopper

Fresh Food

Produce

Superfood Season

The new year brings revved-up interest in nutritionally potent produce.

Kale is one of the great waves that the health movement and superfoods are surfing.”

—Dr. Drew Ramsey, author and National Kale Day creator

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By Jennifer Strailey

hat exactly is a “superfood”? Te Oxford Dictionary defnes it as “a nutrient-rich food considered to be especially benefcial for health and wellbeing.” And that’s just what consumers want more of, especially this time of year.

According to Google Trends, searches for “superfoods” have spiked in the month of January since 2005, Bloomberg/Businessweek reports.

Te seasonal surge in interest — no doubt sparked by New Year’s resolutions — spells opportunities for produce departments looking to boost sales of everything from kale to sweet potatoes to pomegranates in 2015.

All Hail Kale If you think that kale has jumped the shark, think again. On Oct. 1, 2014, the second annual National Kale Day, Nielsen tweeted that U.S. sales of kale increased 56.6 percent

| Progressive Grocer | Ahead of What’s Next | January 2015

between 2009 and 2013.

National Kale Day was created by kale ambassadors Drew Ramsey, M.D., and chef Jennifer Iserloh, authors of the book “50 Shades of Kale” (HarperWave 2013), who brought together consumers, chefs, nutritionists, doctors and farmers to help launch National Kale Day in 2013.

“National Kale Day has helped kale sustain momentum and join together an audience of passionate consumers, but most importantly, more people than ever are trying kale,” says Ramsey. “From 300,000 kale salads served in New York City public schools to the all-kale menu at Eskenazi Hospital in Indianapolis, we’ve had a lot of fun helping people celebrate kale through purely grass-roots eforts.”

What makes kale a superfood?

“Kale just tops the chart with absorbable nutrients per calorie,” continues Ramsey, who explains that the dark leafy greens have more calcium than milk and contains 607 percent of the RDA

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Fresh Food

People want superfoods that are convenient and delicious — superfoods without sacrifice, so to speak.”

—Samantha Cabaluna, Earthbound Farm

Produce

of vitamin K per cup of raw leaves. Kale also contains iron, magnesium, folate, vitamins A and C, and manganese.

With such compelling nutritional selling points, Ramsey forecasts continued growth for the vegetable.

“Kale is one of the great waves that the health movement and superfoods are surfing. We are being led back to healthy eating by plants, and kale is such a great example of how plant-based diets work,” he says.

In an efort to keep pace with demand, the United States grew a record crop of kale this past year, but even that may not have been enough. “With the popularity of juicing and eating for health — I mean, there was a blip in the kale seed supply, and people freaking panicked!” exclaims Ramsey. “I think we are just getting started.”

Indeed, kale appears in products in every area of the supermarket, from center store to frozen foods, not to mention produce.

“Retailers are selling more kale than ever before,” afrms Ramsey, pointing to companies like Pelion, S.C.-based Walter P. Rawl and Sons Inc., with its Nature’s Greens Kale Chip Kits featuring ready-to-bake kale with chili and lime seasoning, and San Miguel Produce, of Oxnard, Calif., with its SuperKALE salads. Both are “just a couple of examples of products that are making kale accessible for consumers,” notes Ramsey.

When Earthbound Farm, of San Juan Bautista, Calif., launched its Kale Italia, it did so as a test, without a signifcant supply behind it. “We got such a huge demand for it that we immediately ramped up production,” says Samantha Cabaluna, VP marketing and communications.

“I think superfoods are very attractive to consumers,” she asserts. “Just the name promises so much, right? People want superfoods that are convenient and delicious — superfoods without sacrifce, so to speak.”

Passion for Pomegranates Antioxidant-packed and fber-rich pomegranates are also high in vitamins C and K, as well as vitamin B5, which helps the body metabolize protein, carbohydrates and fats. All of this undoubtedly factored into Men’s Health magazine’s crowning pomegranates one of the “40 Best Age-Erasing Superfoods.”

Los Angeles-based Pom Wonderful has experienced the rise in consumer demand and sales of pomegranates frst-hand. “Te arils category grew more than 10 percent [according to IRI data] during the 2013 pomegranate season [October 2013-January 2014],” notes Dahlia

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| Progressive Grocer | Ahead of What’s Next | January 2015

Reinkopf, senior director of marketing for Pom Wonderful.

“Pom Poms Fresh Arils led that growth, with more than 20 percent increase over prior year,” she adds. “Our Wonderful variety pomegranates also outgrew the category, reaching more than two-thirds of the market share and adding more than 1 million new households since prior year.”

To capitalize on the popularity of pomegranates, pomegranate juice and pomegranate teas, Pom Wonderful introduced Pom Antioxidant Super Teas this past fall. Te new favors, which join Pom’s Pomegranate Peach Passion White Tea, are Pomegranate Lemonade Tea, Pomegranate Sweet Tea and Pomegranate Honey Green Tea. Additionally, for the frst time in three years, Pom Wonderful returned to television this past October, with “Crazy Healthy” commercials. Designed to resonate with consumers who’ve made New Year’s resolutions to get healthier, the campaign features four spots highlighting the antioxidant power of Pom Wonderful Pomegranate Juice.

Te campaign, which includes national network and cable television, with more than 3,000 broadcast prime, late-night and cable spots, aired 400 ad spots in the frst week alone. Tese equated to more than 150 million impressions.

Work the Rainbow From a nutritional standpoint, a diet plentiful in superfoods works best when all colors of the rainbow are consumed. With vibrant produce displays and a full spectrum of better health in mind, Frieda’s Produce, of Los Alamitos, Calif., launched its Try Tis, Not Tat campaign during the holiday season.

Te campaign tempted consumers to try superfoods such as purple sweet potatoes, gold beets and green caulifower in place of their traditionally hued counterparts.

Frieda’s expects superfoods to stay on the nation’s collective radar for the foreseeable future.

“In addition to the obvious superfoods like kale, which seems to be everywhere, we are continuing to see big increases in Brussels sprouts — green, baby green and baby purple,” says Karen Caplan, the specialty produce company’s president and CEO. In terms of the year ahead, Caplan notes, “We also expect collard greens, turnip greens and all colors of chard to be foodie darlings.”

Frieda’s has high expectations for its exclusive Stokes Purple Sweet Potatoes, which ofer antioxidant anthocyanins. “[Tey] have caught the eye of ftness and running communities, who have really embraced them as clean fuel for their workouts,” observes Caplan.

Louisiana Sweet Potatoes For grocers that want to grow their superfood business, communication is key. “Proper signage, with an accurate and verifed nutritional callout, such as ‘High in vitamin C,’ is always a great way to educate shoppers and produce staf alike on superfood items,” advises Caplan. “Additionally, we believe that registered nutritionists and dietitians play a key role in providing education to shoppers with sampling events, cooking demos and nutrition classes.”

New Varieties and Traditional Favorites Rich in valuable nutrients and antioxidants, Brussels sprouts are an excellent source of vitamins C and K. Tey’re also a good source of folate, manganese, vitamin B6, dietary fber and more.

Ocean Mist Farms, of Castroville, Calif., ofers a full range of Brussels sprouts products that make preparation and consumption a breeze, including the Season & Steam Brussels sprouts product line featuring Quick Cook (halved) Brussels Sprouts, SuperShreds Brussels Sprouts and Microwavable Whole Brussels Sprouts packages.

Artichokes, also ofered by Ocean Mist, are a great source of potassium. One medium artichoke provides more than 400 milligrams of potassium, about as much as a small banana. Artichokes are also a good source of magnesium, and an excellent source of vitamin C and dietary fber.

According to the Chicago-based Academy of Nutrition and Dietetics, Americans consume only 12 to 15 grams of the recommended 20 to 35 grams of fber per day. A 120-gram artichoke contains 10.3 grams of dietary fber.

Mann Packing Co., of Salinas, Calif., is simplifying the consumption of superfoods with a variety of products, including Broccoli Wokly, fresh broccoli forettes that can be steamed in their own microwaveable bag. Te company is also pioneering Kalettes in the United States. Te product, which was developed by a seed company in the United Kingdom, is a new vegetable that looks like a tiny cabbage with green curly leaves and streaks of purple.

Essentially, Kalettes combine attributes of Brussels sprouts and kale, resulting in a sweet and nutty favor. Mann currently ofers them in a foodservice format.

Powerful Sweet Potatoes From Green Giant Fresh microwavable sweet potatoes to Mann’s fresh Family Favorites Sweet Potatoes in a crinkle-cut presentation, consuming sweet potatoes has never been easier.

What makes sweet potatoes super? In addition to having a low glycemic index, sweet

The Louisiana Sweet Potato Commission, in Baton Rouge, in partnership with Louisiana Cookin’ magazine, is seeking entries for the eighth annual 2015 Sweet Rewards Recipe Contest for fresh, canned and frozen sweet potatoes. Finalists’ recipes will be prepared by studentss at the Louisiana Culinary Institute and d judged by an independent panel of food industry professionals on July 17, 2015. Details can be found online at www.LouisianaCookin.com. Original recipes must be submitted by May 31, 2015, to be considered for judging.

Photo courtesy of the Louisiana Sweet Potato Commission

potatoes contain protein, fber, potassium, calcium, folate, and vitamins C and A. In 1992, the Center for Science in the Public Interest compared the nutritional value of sweet potatoes with that of other vegetables. In terms of fber content, complex carbohydrates, protein, vitamins A and C, iron, and calcium, the Washington, D.C.-based center found the sweet potato ranked highest in nutritional value.

“I’m seeing a tremendous amount of interest in sweet potato consumption, based on their nutritional facts, favor and versatility,” observes George Wooten, president of Wayne E. Bailey Produce Co. Inc., in Chadbourn, N.C., which supplies sweet potatoes to Green Giant Fresh and ships under its own label, George Foods. “It’s just happened in the last seven to eight years that this excitement for sweet potatoes has really ramped up.”

When it comes to sweet potatoes, suppliers are hoping that what’s old is new again. “In 1930, the annual consumption of sweet potatoes was 28.5 pounds per person,” notes Wooten. Tat same year, the consumption of white potatoes was 130 pounds per person, and remains approximately so today.

Between 1930 and 1993, sweet potato consumption in the United States dropped to just 3.8 pounds per person, continues Wooten. But as of 2012, that number increased to 7.2 pounds per person.

“It’s hard to go any day of the week without seeing something about sweet potatoes on television,” says Wooten, counting Rachael Ray, Oprah Winfrey and Dr. Oz as fans.

Tis outpouring of afection for the health benefts and favor profle of sweet potatoes is helping to rebuild sales of the once spectacularly successful spud.

“I see sales of sweet potatoes on the rise,” asserts Wooten. “I don’t know if consumption will ever get back to 28 pounds per person, but I can see it doubling in the next few years.” PG

We also expect collard greens, turnip greens and all colors of chard to be foodie darlings.”

—Karen Caplan, Frieda’s Produce

January 2015 | progressivegrocer.com |

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Produce Category Spotlight

Dried Fruit

Dried-fruit

Forecast Consumers call for nutritious snacks with a pinch of indulgence and plenty of convenience.

W People are looking for nutrition and sustenance from snacks.”

—Stephanie Harralson, Sunsweet Growers Inc.

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By Jennifer Strailey

hen it comes to snacking, as with most things in life, American consumers want it all. Tey crave nutritional benefts like fber and antioxidants, but prefer them tempered by a bit of indulgence. Tey demand freshness and favor, but in a convenient format.

As dried fruit delivers all of this and more, the category continues to grow in sales and new product introductions.

“Dried fruit is in a great spot in terms of consumer trends,” observes Stephanie Harralson, senior product manager for Sunsweet Growers Inc., in Yuba City, Calif.

She points to the recent Nielsen webinar, “Insatiable Snackers: How to Take a Bite Out of the U.S. Snacking Demand,” which found that health attributes are critically important to consumers.

| Progressive Grocer | Ahead of What’s Next | January 2015

Indeed, roughly one-third of respondents in Te Nielsen Global Survey on Snacking, which was cited in the webinar, reported that they’re looking for benefcial ingredients from their snacks. Fiber was the most sought after, with 37 percent of respondents ranking it as a very important attribute in the snacks they consume.

Protein (31 percent) and whole grains (29 percent) rounded out the top three most desirable attributes in snacks. Nielsen further found that 45 percent of global respondents ranked snacks that are “all natural” as very important.

“People are looking for nutrition and sustenance from snacks,” notes Harralson. “Tey are eating smaller meals in a more mindful way, and using snacks to do that.”

But among U.S. snackers, there’s also a “dichotomy in desires,” asserts James Russo, SVP of global consumer insights at Schaumburg, Ill.-based Nielsen. In

other words, consumers want healthy snacks like fruit, but they want their chocolate, too.

“Yes, health is increasingly important, but we also need to understand that there is the desire for both [health and indulgence] within the consumer landscape,” notes Russo, who led the Nielsen snacking webinar.

dried-fruit category sales have shown consistent 10 percent-plus growth for the past three years.

“As snacking becomes more and more popular — 91 percent of consumers admit to snacking daily — and consumers look for healthier snacks, they are migrating to dried fruits,” observes Hartman.

“As a snack, dried fruits generally have no fat, low sodium and [are] a good source of dietary fber.”

Healthy Indulgence Sunsweet Growers’ newest introduction, PlumSweets Greek Style, exemplifes this hot trend, ofering bite-size pieces of fber-rich Amaz!n Diced Prunes covered in a high-quality, dairy-based Greek yogurt. Te product joins Sunsweet’s PlumSweets Dark Chocolate, which is also available in a 6-ounce resealable bag.

“Tese both go with the consumer trend of having permission to indulge,” Harralson says of the PlumSweets line, which was recently expanded in Kroger and Safeway stores, and is slated to land in Walmart next month. Te line is also being promoted through a customized Valentine’s Day-themed Pandora radio station beginning this month.

“Healthier-for-you snack sales are defnitely on the rise,” concurs Chad Hartman, director of marketing at Tropical Foods, a manufacturer, importer and distributor of bulk and packaged snacks and specialty foods in Charlotte, N.C. “In fact, we have identifed healthy snacking as the No. 1 eating trend that we will be addressing for 2015.”

Dried fruit will be a key product group for Tropical Foods’ healthysnacking initiatives in 2015, says Hartman, who adds that the company’s January 2015 | progressivegrocer.com |

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Fresh Produce FoodCategory Category Spotlight

The freezedried fruit segment is growing at doubledigit growth levels and is the fastestgrowing segment in the dried-fruit category.”

—Mark McHale, Crispy Green

Dried Fruit

Tropical Foods is targeting the healthfully indulgent trend with ReCharge, a line of three natural snack blends combining dried fruit, nuts and chocolate- and yogurt-covered raisins and cranberries.

Te snacks are enhanced with probiotics, omega-3, pomegranate seed oil and chia seeds, which add antioxidants and vitamin B6 to the mix.

Freeze-dried Fruit Builds Fan Base While Americans are thinking more about the nutritional value of the snacks they consume, the Nielsen survey also found that chips are still the No. 1 snack in the United States.

Te good news for both health-conscious shoppers and the grocers that serve them is the growing number of suppliers that are bringing freeze-dried fruit snacks to market. With all of the crunch of a chip and the nutritional boost of fruit, these products are a win-win.

According to Mark McHale, national sales director of Crispy Green, the Fairfeld, N.J.-based maker of Crispy Fruit all-natural freeze-dried fruit snacks, “Te freeze-dried fruit segment is

growing at double-digit growth levels and is the fastest-growing segment in the dried-fruit category.”

Freeze-dried fruit contains no or minimal additives or preservatives, and retains most of the nutrients of fresh fruit, explains McHale. Crispy Green explains the freeze-drying process in a video that can be viewed from a link on its website.

With the idea of creating a better-foryou snack option, Los Angeles-based Snack it Forward LLC — in partnership with Sunkist Growers Inc. — recently launched Sunkist Fruit 2.0, a line of freezedried snacks that’s fat-free, all natural and made from 100 percent real fruit. It’s available in four varieties: Fuji Apple slices, Banana slices, Strawberry slices and Red Seedless Grape slices.

“We call it fruit with freedom,” Snack it Forward CEO Nick Desai says, since the product can be consumed anywhere.

Fresh Approach to Merchandising In 2015, Crispy Fruit is launching a promotional campaign to position its product as a fruit-to-go option. “Our goal is to present Crispy Fruit as a complement to fresh fruit — not necessarily an alternative — but a great grab-and-go option for healthy, busy lifestyles, where fresh fruit may not be the best choice,” notes McHale.

With this complementary relationship in mind, Crispy Fruit is urging grocers to merchandise freeze-dried fruit in the produce department. Te company recently introduced a 96-unit display shipper to trigger impulse sales, and to provide a secondary location to promote the fruit-to-go concept.

GIORGIO ORGANIC MUSHROOMS. Hartman agrees that dried fruit belongs with fresh. “By displaying dried THE PREMIER BRAND, NATURALLY. pineapple with fresh pineapple and dried mango with fresh mango, I beGiorgio organic mushrooms are America’s favorite. We grow our mushrooms lieve you will only increase the exposure in a fully organic environment and they are certifed organic by PCO and sales of both products,” he asserts.

(Pennsylvania Certifed Organic). In fact all Giorgio farms are MGAP With grocers that merchandise dried fruit in the produce depart(Mushroom Good Agricultural Practices) certifed by the USDA. If you’re ment in mind, Tropical Foods looking to grow your organic mushroom sales, you can’t pick a better partner recently changed its packaging to than Giorgio. cube-type tubs. “We have cut back on the labeling and the package clutter,” Hartman says, “so there is more Equal Opportunity Employer product visibility.”PG Giorgio Fresh Co. | 347 June Avenue, Blandon, PA 19510 800.330.5711 | www.giorgiofresh.com

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| Progressive Grocer | Ahead of What’s Next | January 2015

For more about dried fruit, visit Progressivegrocer.com/prunehealth.

Progressive Grocer’s Autumn Retail Produce Roundtable

Fresh Food

Focusing on the

Future

Industry leaders explore the challenges and opportunities for the produce business.

By Meg Major

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ith consumer interest in better dietary choices steadily on the rise, the fresh produce department is universally viewed as the single most infuential destination for shoppers heeding the call to action.

To that end, Progressive Grocer gathered a select group of invitation-only retail produce thought leaders at the Anabella Hotel, in Anaheim, Calif., last October to discuss the latest consumer trends and emerging solutions for an everchanging landscape — one increasingly shaped by concerns about quality, convenience, taste and value.

Meet PG’s Autumn 2014 Retail Produce Roundtable Panelists Retailers

Shirley Axe, Health & Wellness Manager, Ahold USA Jeff Fairchild, Director of Produce, New Seasons Market Mimmo Franzone, Produce Expert, Longo Brothers Fruit Markets Justin Hill, Produce & Floral Director, Fresh & Easy Jon Holder, Senior Manager, Produce and Floral, Raley’s Family of Fine Stores Craig Ignatz, VP, Produce and Floral Merchandising, Giant Eagle

Suppliers

Mike Orf, Assistant VP, Produce Operations, Hy-Vee Inc.

Brian Huh, VP of Category Development & Customer Strategy, Dole Fresh Vegetables

Jim Grabowski, Director of Marketing, Well-Pict Berries

Doug Larson, EVP of Sales, Robbie Flexibles Charlie Piper, President/ CEO, HarvestMark & ShopWell

Moderator

Meg Major, Chief Content Editor, Progressive Grocer

January 2015 | progressivegrocer.com |

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Fresh Food

Progressive Grocer’s Autumn Retail Produce Roundtable

Mike Orf, Assistant VP, Produce Operations, Hy-Vee Inc. If you really think about the produce department of today and the diversity of consumers that are shopping it — whether it’s Millennials and how they buy diferently than Boomers — there’s so much we can ofer. As retailers, the reality is that we’re kind of out here trying to dissect this on our own in terms of diferentiation and trying to fnd new ways to put our own spin on things to help us stand out from the crowd. Produce is very cool that way, because it’s typically front and center in almost every store in America. But it wasn’t always that way. Now we’ve got an emergence of new, smaller-format stores that are almost all about produce. So I think we’re all trying to fnd our way with how to best leverage service and the value proposition with the kinds of products we strive to ofer to help us stand apart. And there are just tremendous opportunities before all of us.

I think what’s most important is that we’re carving out a unique niche that we believe in with all our hearts, that motivates us to get up every day excited about what we can do to go out and make it happen. Tere are just some really cool things happening in fresh produce right now that we can, and must, take full advantage of.

Mimmo Franzone, Produce Expert, Longo Brothers Fruit Markets We’re really focusing on our people with training, education and hands-on learning with visits to our growers, to take our fresh produce departments to the next level. Our manager-training courses teach everything a successful manager really needs to know, such as margins, shrink and quality control. We also ofer seasonal product knowledge seminars while investing in our produce teams by taking them out to see our growers, such as the six-day trip to California I organized last July for 44 team members, 28 of whom were produce managers.

We covered 1,000 miles on the ground, with frequent stops to visit with, learn and really engage with our grower-partners.

For some, it’s like a trip of a lifetime, and everyone comes back and shares their knowledge with their store teams, which is then passed on to our customers. So it’s really ongoing education, from seed to table. So whether it’s dietary tips or sustainability issues that our growers are working on, educating our team members is huge because that’s what customers want.

Te education works both ways for our vendors as well, to help them better know what we want and need.

Justin Hill, Produce & Floral Director, Fresh & Easy Tere are a lot of areas of opportunity for us, but none more so than service. Historically, you could have walked into one of our stores, which were kind of like nice

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vending machines — plenty of products but no service. So we’re working across the company to deliver a new experience based on a very simple acronym, FAST — fresh, assortment, service and taste — to help take us to where we see eventually ourselves going, with stores focused on dayparts, with fresh oferings that change all day long.

Specifcally in produce, an area where we’ve changed our philosophy a bit focuses on favor. So rather than trying to be frst on items when they’re coming into season, we’re focusing more heavily on the best favor. We’d rather be two weeks later bringing a product to our stores if it’s not eating great, because what we’ve seen from a customer experience is that when they come in and they buy, say, that frst peach, if it doesn’t taste great, then we risk losing them for the season.

Flavor really matters today and is something that moves rapidly across social media channels. Previously, we could only tell people about products in ads and, with luck, by word of mouth. But now, anyone with a smartphone is suddenly able to share information — all the way across the country, or even around the world, in a matter of minutes, about where they are fnding great-tasting products.

Jim Grabowski, Director of Marketing, Well-Pict Berries Te focus on health — and our industry’s collective role to accelerate it — is an extremely important issue for everybody in fresh produce. For our part, however, ensuring that the cold-chain management system never breaks is crucial. Unfortunately, however, that’s not always the case, and we know it happens, and often times, it’s at store level.

As an example, we were having problems with one customer, which was complaining about their berries.

So I spent some time at their warehouse to understand their receiving, unloading and inspection practices, and everything was as it should be. We then went to look at some of the stores, which appeared to be fne there as well. But after returning to the retailer’s backroom after a lunch break at 1:30 p.m., in the thick of humid, 85-degree midsummer heat, I immediately noticed the wide-open back door adjacent to the delivery area, where the pallet was stored. On top of the berries sat a 50-pound bag of onions. And I said but three words: “Tat’s our problem.”

If we could commit to educating store-level teams about the importance of getting temperature-sensitive, highdemand items like berries into the cooler right away, we would all have a lot less to worry about.

| Progressive Grocer | Ahead of What’s Next | January 2015

Jon Holder, Senior Manager, Produce and Floral, Raley’s Family of Fine Stores Education is playing an important role across our entire company. In produce, we’ve been experimenting over the course of the last 18 months or so on specialties that focus heavily on just one item. We’ll buy a truckload, but prior to sending the particular item out to the stores, we’ll do a one-page educational piece for our produce team, as well as provide talking points for our cashiers, supported with special in-store signage, so that when that item hits the stores, everybody knows what the item is, instead of, “Oh, we got something from the produce ofce we’re supposed to sell.” And we’ll do that seasonally as well, by selecting special items to focus on. We also now do a category of the month, and have found that we get a better-sustained lift in those categories by doing so. For our October apple month, we brought in every SKU of apples we could fnd on the West Coast, and [were] heavily promoting apples all month in all of our stores.

In terms of industry issues, I believe traceability remains the most important, because when it comes to recalls, the quicker we can react as an industry, the better we are able to communicate with customers, so that they have full trust in us to provide good, safe, quality food. And the quicker that we can tell them, the more confdence they’ll have in us, because it doesn’t matter what the item is or where it happens — if we can’t identify it quickly and get it out of the system, it not only hurts our entire produce department, it hurts all of us as an industry.

Charlie Piper, President/CEO, HarvestMark & ShopWell Quality is rapidly becoming the key diferentiator in produce for successful retailers, along with freshness, both of which are the primary currency of the perishable supply chain. Te industry is obviously changing rapidly, and with that comes a greater need for fresh supply-chain partners to focus on simplifcation. Tere are so many competing priorities in retail, and everybody’s drowning in mountains of data coming from various sources. But when it comes to data, more is not always better. So it’s all about simplifcation with the partners we work with for fresh food insights and traceability solutions that deliver transparency and fact-based strategies.

By alleviating some of the mounting pressure on retailers and growers with data collection, we can synthesize and present it in a way that’s both consultative and actionable.

Although we were early in traceability, many of the top issues we’re talking about fall into one of three related categories of sales or customer loyalty, quality, and shrink manage-

ment and risk mitigation, all of which are intertwined with sales, gross margin and risk-free products — they’re not mutually exclusive. It’s therefore never been more important for produce trading partners to work together to understand consumer needs such as [those of] Millennials who want to eat healthier, and who also want more information with ingredients, growing practices, nutrition, recipes and other attributes of their food. Tey also want to cook — not just take it home and heat it up — which is why ingredient packs with actual chopped and sliced fresh produce will continue to gain in popularity in the years to come.

Craig Ignatz, VP, Produce and Floral Merchandising, Giant Eagle At the top of my list are varietals, cold chain and supply chain management. I’m living in a world where an umbrella of convenience rules, which consequently requires solutions that deliver taste, value, speed and, of course, nutrition. And kids plug into all of it, which is just another fantastic opportunity for all of us. As I see it, the next frontier is how we will continue to adapt to changes in our distribution model with the increased penetration of value-added products. And that’s what we’ve been focusing on: the stronger demand for value-added products that continue to change the game, especially in terms of freshness and taste — and part of that focus centers on altering the traditional distribution model.

We also see clear trends with how people are looking at things diferently in the produce department in terms of easy, easier, easiest. Take, for example, broccoli. We’ve long had forets, which languished when sold as a commodity. But our larger-size, value-added packages have since replaced that lost sale and continue to do extremely well. In addition to better in-store benefts of stronger volume and higher sales, the shift has helped us see greater efciencies with improved supply-chain measures.

Doug Larson, EVP of Sales, Robbie Tere is perhaps nothing more important than the impact of cold-chain management for fresh produce, with the exception of packaging, and especially with salads, where the impacts are tremendous. Because if you don’t have the right package, the right transmission rate of oxygen, etc., you’ll end up with a potentially dangerous product. Which begs the question about what is more important: the package, which helps provide the exchange rate, or the cold chain, which allows the package to work? It’s a yin and yang. While there are so many ways to bring value to customers, the packaging [application] is in the best position to January 2015 | progressivegrocer.com |

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Fresh Food

Progressive Grocer’s Autumn Retail Produce Roundtable

help consolidate a number of the most critical things in play among fresh produce trading partners.

In regards to more convenient, grab-and-go solutions, SKU proliferation is becoming increasingly complex. And while the bulk of the proliferation is occurring with valueadded fresh products, we’re seeing a shift among some companies that are interested in learning how to create the same convenience and ease of purchase for bulk commodities. We’re getting questions all the time about how to look at other products diferently in terms of packaging and merchandising. With this the case, we ask our groups: If your store has great quality, variety and pricing, then what’s next? And we ask the same of our retail partners: What are you going to do to drive them to continually come back?

And, in many cases, packaging gets the nod as one of the key ways to help that happen. Tere’s a variety of things that can be done, but when you look at bulk commodity products — which remain one of the biggest leaders in fresh produce — there are simple, afordable ways to package bulk in a convenient carrying case that helps drive revenue and maximize customer convenience.

eaten, followed by the need to wash their hands when they’re done. My citrus category is a great example of that — but obviously doesn’t apply for satsumas and mandarins — which are easy to peel and eat with no mess. But anything that needs to be washed and cut, followed by a hand-wash, is not growing very much for us these days.

Te other thing for us is favor, which just continues to be a strong driver. As we talked about earlier with kale and some of the salad blends, people now realize there is favor diferentiation, and they’re looking for that as part of the value component. For a long time, people looked at it more in terms of price, with favor the secondary element. But now, they want the “total experience,” with favor leading the way. While we’ve traditionally been an organic retailer for years, we’re now fnding some really strong conventional categories where favor has really become the calling card.

Shirley Axe, Health & Wellness Manager, Ahold USA I live, breathe and sleep how we can promote health and wellness throughout our stores, and the frst place I start is the produce department. We know through our nutritional programs that about 55 percent of our healthiest items are found in produce, so it’s a key touchpoint category for me. Consumer buzz on social media is a key piece of the conversation, and I don’t think we’re going to see it ever slow down — it’s only going to get bigger and bigger.

I try to work closely with our produce team, because I know the better job we do, the more customers are going to purchase, because of its halo efect. People know that if they buy fresh produce, they are making healthier eating choices, and chances are, they are in other parts of the store as well.

Good nutrition is one thing, but how somebody looks at being healthy is another. I’d like to push folks a little farther with ways to help keep them in the produce department longer, because that’s where the health and wellness begins.

And if I can get them to put one more item in that shopping cart while they’re going through produce, that’s what I want to do. Te more tools our in-store nutrition leaders have to work with, the easier and better it will be for everyone.

Brian Huh, VP of Category Development & Customer Strategy, Dole Fresh Vegetables Produce as snacks is a defnite shift, and, I believe, a lasting trend that’s here to stay. People who were once routinely buying candy bars are now eating bananas, berries and celery sticks that are much more wholesome and really better-tasting. It’s what it’s all coming down to now.

In terms of department presentation, it’s often qualitative, particularly for items like bananas, which, right or wrong, still set the tone for the whole produce department. Everybody wants to see ripe, pristine bananas when they come into a store. Tat’s why, if I was in retail, I would set bananas front and center in the produce section to get the consumer engaged with a familiar, approachable item that gives them a comfortable mindset to shop the entire category.

I think the other interesting thing is consumption. Forget produce for a second; just look at how the consumer is buying lighter meals and snacks. And if they’re buying these fve, six, seven, 10 items for more immediate or near-term consumption, is your produce section merchandised to take advantage of this? Snacking can be berries, celery sticks, carrots and dips, to cheese and fruit, versus everything revolving around cooking and preparing meals. It’s a very diferent concept in terms of how you lay out the produce section. But I personally believe that’s going to be the next generation of how we’re going to see stores merchandised. But it will require us to create a diferent infrastructure for us as buyers and sellers. Tat’s the fascinating and fun part of my job — to look at the emerging trends and devise how we can add value to them. PG

Jeff Fairchild, Director of Produce, New Seasons Market While people are demanding convenience, they still want to cook, so it’s up to us to marry those two situations together in a mutually efective way. What I see in our key growth areas, especially with fruit, is hand-to-mouth convenience. But what I’ve lost in recent years are the things that make a mess and that require people to wash and cut them in order to be

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Nonfoods

Health, Beauty & Wellness

Health on Display Vitamins and supplements need to stand out in the supermarket.

By Barbara Sax

V

Products that explain the benefits from 10 feet away speak to the supermarket customer.”

—Gary Pigott, Mason Vitamins

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itamin, mineral and supplement sales have been fat over the past few years, but there’s good news for retailers in specifc high-growth segments of the category.

Supplements that target issues associated with aging, products designed to address specifc health concerns such as digestive health, and new formulations are areas of opportunity in the next few years.

Retailers that give the category a high profle are having the best results with all of its segments.

“Te category is shifting from a focus on overall good health to specifc health concerns, so products that target specifc issues are showing the most growth,” says Bob Sanders, EVP of home and health practice at Chicago-based market researcher IRI. Among condition-specifc products, probiotics lead the pack. A recent report from Rockland, Md.based Packaged Facts shows that sales of digestive health supplements and probiotics were up nearly 25 percent last year and that more than 40 new probiotic supplements were introduced in 2013.

“Probiotics have been seeing strong growth as big companies are driving awareness in the category,” notes Laura Mahecha, a health care analyst at New York-based Kline & Co. “Procter & Gamble has been using study results in ads for Align, and the idea of strengthening your immune system from the inside out is resonating with American consumers.” Retailers are expanding the space given

| Progressive Grocer | Ahead of What’s Next | January 2015

to the category, with some chains, including Whole Foods Market and Fairway, adding a refrigerated section for specialty probiotics in their vitamin, mineral and supplement (VMS) sections.

Sales of vitamin C and immunity boosters are strong, and retailers are chasing the eye health segment, which continues to be hot, but while bone and women’s health products are still signifcant segments, their sales have sufered steep declines as more food products tout increased calcium benefts.

Consumers are increasingly looking to get their nutritional benefts from the source, since recent studies have questioned the value of supplements.

“In the VMS category, product sales follow studies, and that can be good news or bad news,” observes IRI’s Sanders. “It’s really important for retailers to be on top of these trends and on the forefront of innovation, so they have the products when consumers want them.”

Plenty to Chew On Retailers are increasingly giving more space to alternative formulations, particularly gummy products.

A recent study from Chicago-based Mintel reports that sales of adult gummies are growing even faster than sales of children’s gummies. “Dollar sales for the gummy segment are nearly three times what they were in 2011,” afrms Sanders.

“Gummies have had a huge jump in sales,” seconds Mahecha. “Church & Dwight has taken a small brand, VitaFusion, to signifcant growth, and its Li’l Critters children’s multivitamin brand

has also shown a signifcant spike in sales.” Competitor Pharmavite also added three new lines of gummies in early 2014.

“We now have gummies in multivitamins, fsh, calcium and CoQ10,” notes Sue Vodika, HBC category manager at Chandler, Ariz.-based Bashas’.

“We have melts in energy, vitamin B12, multivitamin and melatonin. Gummies is the leader in new growth, but that can be attributed to the many new SKUs being developed in gummy form.”

Ahold USA banners are also seeing opportunity in gummies. “We’ve identifed a segment of customer highly loyal to the emerging gummies form, so we make it easy by grouping all gummy VMS together, regardless of condition,” says Howard Sherr, VP of merchandising for health and beauty care at the Carlisle, Pa.-based retailer.

Mintel reports that chews, which include gummies, now make up 18 percent of new product launches and are emerging in the supplement and mineral segments as well as in vitamins. Te market research company expects melting tablets (such as Nature Made VitaMelts) and liquids to increasingly appeal to consumers. Liquid vitamin and mineral sales were up nearly 5 percent in the supermarket channel, according to IRI data.

Making the Most of VMS Pockets of growth are crucial in a category that has seen modest increases. After several years of sales increases that have outpaced the OTC category, VMS sales have been down in the past year. In the supermarket channel, sales of mineral supplements slipped 1 percent, with sales at $590 million for the 52-week period ending Nov. 2, 2014, according to IRI multioutlet research.

Sales of multivitamins for the same period fared slightly worse in the channel, with sales dipping 2 percent to $327 million. Sales of B and D vitamins are fueling growth in the one and two-letter segment, according to Sanders; sales there were up 3 percent to $222 million in the supermarket channel.

Merchandising the category by segment is one way retailers can make the most of their vitamin and supplement sections. “Te most important thing supermarket retailers can do to improve sales is to merchandise by segment (immunity, digestive, men’s health) on the shelf,” counsels Gary Pigott, SVP of marketing at Miami Lakes, Fla.-based Mason Vitamins. “Products that explain the benefts from 10 feet away speak to the supermarket customer.”

Ahold USA stores group products in conditionspecifc sets whenever possible. “We’ve also launched a Vitamin or Supplement of the Month program in 2014,” says Sherr. “Each month, we feature a diferent item on display in stores and merchandise them with short brochures that help educate our shoppers on usage and benefts.”

At Lakeland, Fla.based Publix Super Markets, spokeswoman Maria Brous asserts that the chain’s Nonfoods Co-Op has been a good vehicle to promote the vitamin segment. “We position by target segment (i.e., adult nutrition for Ensure, Boost, etc.) while some sets incorporate many small segments and are arranged by usage (probiotics, bone and joint, multivitamins),” she explains.

Publix, Delhaize America’s Hannaford Supermarkets banner and Ahold USA stores all try to positon the category across from the pharmacy, where space permits, so that consumers have easy access to the pharmacist. “We generally place the vitamins adjacent to the pharmacy, so that trained professionals are nearby to answer questions about how particular supplements may interact with prescription drugs and to provide customers with other information,” says Eric Blom, spokesman for Scarborough, Maine-based Hannaford.

According to Mason’s Pigott, the grocery channel too often sees the department as a convenience and may be placing too much emphasis on pricing. “If they have a good selection and do a good job merchandising, they don’t need to play around with buyone-get-one and high-low strategies,” he maintains.

Tat said, 60 percent of promotional activity is buyone-get-one deals, according to Solon, Ohio-based ECRM Marketgate. Some chains, such as Wegmans Food Markets, Publix and H-E-B, opt for an everyday low-price strategy, with occasional coupons, in an efort to move product consistently, rather than footballing prices to create a spike in sales.

Roxanne Lord, Bashas’ director of health-andwellness initiatives, says that while the mainstream supplement segment remains primarily value-driven, in her chain’s natural/organic supplement segment, consumers are also focused on a variety of other factors, including potency, purity and taste.

“Conventional HBC customers seem to be trying out more natural/organic supplements,” observes Lord. “Although there are diferent types of consumers purchasing mainstream supplements versus their natural/organic counterparts, there are also many crossover purchases as a whole in this category.” PG

Gummies is the leader in new growth.”

—Sue Vodika, Bashas’

For more about Bashas’ approach to selling vitamins, minerals and supplements, visit Progressivegrocer.com/BashasVMS.

January 2015 | progressivegrocer.com |

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Nonfoods

E-cigarettes

Out of

he food channel rang up impressive dollar and unit gains in the electronic smoking device market last year, albeit from a minuscule fraction of the $2.5 billion total volume.

Nevertheless, high double-digit growth in the food channel shows that the electronic nicotine vapor category has penetrated mainstream retailers like Walmart, Kroger, Meijer, Food Lion, Bi-Lo, Giant Food and Safeway.

“Tere are 40 million current adult smokers in the U.S. Many of them see e-cigs as a signifcant alternative to smoking. Tese people shop at local grocery stores and supermarkets, so there is a big opportunity for these types of retailers to reach a

products may override the beneft of driving trafc and generating profts, some observers say. Costs not only include fnancial and labor, but also political ones that can curtail a retailer’s merchandising.

Last year, state attorneys general and public health advocates mounted eforts for retailers with pharmacies to stop selling tobacco products. Some chains, notably Price Chopper, based in Schenectady, N.Y., decided years ago to move tobacco products out of sight by obscuring display cases and not allowing promotional signage.

Price Chopper, however, opposed a law last year in its marketing territory that would ban the sale of tobacco at pharmacies and stores with pharmacies.

Te law was eventually vetoed by the local legislature.

“Although most grocers still ofer tobacco products, its role and visibility has diminished over the years as it moved from the main checkout lanes to behind the service counter,” notes David Bishop, managing partner at Balvor LLC, a sales and marketing company in Barrington, Ill. Jan Verleur, CEO and co-founder of Miamibased VMR Products, the maker of V2 e-cigarettes, acknowledges that grocery stores are unique in merchandising tobacco products. “Often, a consumer requests a product that is not in his or her direct line of sight,” he says. “Tis obviously means that branding and in-store communication have much more leverage in a grocery store than a typical convenience store.”

According to Verleur, grocery chains that “fnd a way to create more consumer engagement and education with electronic cigarettes — within the boundaries of the law — will absolutely fnd themselves in a leadership position within the category.”

highly afuent consumer,” says John Wiesehan Jr., CEO of Mistic Electronic Cigarettes, a product of Monroe, N.C.-based Ballanyne Brands that’s widely distributed at mass-market outlets.

Food channel dollar sales soared 52 percent and units 66 percent, with vapor revenue totaling $16.5 million at food retailers for the 52 weeks ended Nov. 2, 2014, according to data from Chicago-based market researcher IRI. Grocery has a long way to go to catch up to the e-vapor volume generated through convenience and drug store channels.

Given the value proposition of vapor devices, for some in grocery, the cost of merchandising e-vapor

Sales by Channel While e-vapor sales growth is evident, how retailers within various channels respond to the opportunity will determine their success within the evolving segment, Bishop adds.

A Balvor sales analysis, for instance, revealed that convenience retailers that sold a broader range of products such as open-system vaporizer devices, which have gained sales momentum at the expense of e-cigarettes, signifcantly outperformed those that didn’t.

Given the above, “the economic value that e-cigarettes may ofer a grocer is likely too small to

Sight E-cigarette vapor product sales continue upward, but food retailers face tobacco marketing obstacles.

By Christina Veiders

T

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warrant committing much space to it. My guess is that those grocers that do enter this segment will do so with only a small fraction of what is available in convenience. As a result, sales growth in grocery is likely to be lower than the overall market,” Bishop says. Tis correlates to the percentage of tobacco sales among various distribution channels.

Bishop observes that tobacco sales in a grocery store represent about 1 percent to 2 percent of total store sales. In comparison, tobacco sales represent nearly 40 percent of total store sales in a convenience store.

Traditionally a destination for tobacco products, the majority of mainstream e-vapor device distribution is frmly entrenched in the convenience store channel. C-stores capture about 75 percent of the e-cigarette market among brick-and-mortar stores, according to the Alexandria, Va.-based National Association of Convenience Stores.

IRI reports that electronic smoking device sales are up 31 percent and units up 36 percent, with revenue at $644 million, at c-stores for the period. Total food, drug, mass-merchandiser and c-store sales for the e-cigarette segment was $795 million, up nearly 20 percent.

Drug Store Revenues Vaporize E-cigarette sales volume in the drug channel was more than four times that of grocery, at $73.3 million, for the yearly period. Drug store dollars and units, however, took a dive: 29 percent and 24 percent, respectively.

Part of the drop could be attributed to CVS’ decision last year to pull out of the tobacco category to solidify its health care position. Tat decision cost

the chain an annual loss of $2 billion in revenue.

Te coming year could be pivotal in the burgeoning e-vapor category as the U.S. Food & Drug Administration moves to fnalize proposed regulations; the tobacco industry quickly consolidates; large vapor, tank and mod devices take up the sales pace; and advances in technology and innovation change what many view as reduced-risk products.

Pre-market Hurdle While the industry generally supports the FDA’s efort to regulate e-vapor products, a major point of concern is the costly pre-market approval of new

products, which critics say would result in higher retail prices, stife product innovation and favor large tobacco companies over small innovators.

In a technologically driven product segment like e-vaping, innovation is critical to growth. “Tey are technology products, not tobacco products. Trying to squeeze an innovative vapor product into a regulatory structure that was designed for traditional combustible tobacco products is simply not appropriate,” asserts Verleur.

Under the proposed regulations, “products not marketed as of the February 15, 2007, cutof (grandfather date) would be considered new tobacco products.” Te e-cigarette market barely existed before 2007, so just about every e-vapor product now on the market would be subject to pre-market approval.

Nu Mark LLC, an Altria company, which rolled out its MarkTen products nationally and acquired e-vapor business Green Smoke last year, wants to see the FDA change the grandfather date. In written comments to the FDA, Miami-based Nu Mark suggested the efective date of the fnal rule as a logical date for the grandfather period.

Ralph Brown, VP government afairs at Grover, N.C.-based Cheyenne International, calls the FDA’s pre-market review “a huge hurdle.”

Cheyenne isn’t yet in the e-cigarette category, but will soon preview an e-liquid, in three nicotine strengths and seven favors, under the Bodyshot (cigar) brand at the TPC Expo, Jan. 28-29, in Las Vegas.

“Te costs of the pre-market review necessary to receive the authorization are high. Companies will be challenged with the investment that is needed to prepare for the pre-market review, and then there can

The economic value that e-cigarettes may offer a grocer is likely too small to warrant committing much space to it.”

—David Bishop, Balvor LLC

be uncertainty as to whether the new product will be accepted by the consumer,” Brown notes.

Adds Mistic’s Wiesehan, “While the FDA’s proposed pre-market review may not necessarily impact product development from Big Tobacco and other larger independent e-cig brands, we do expect the rule to have a deeper impact on smaller vape shops with many SKUs and limited fnancial resources.” PG To learn about FDA regulations and new offerings in the category, visit Progressivegrocer.com/ecigs.

January 2015 | progressivegrocer.com |

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Logistics

Supply Chain

Chain of

Command Retailers are more focused than ever on their supply chain, as consumers’ expectations continue to soar.

By Jenny McTaggart

D

id you hear about the shopper who complained on Facebook about her local grocer being out of free-range turkeys the week of Tanksgiving? She’s just one example of why retail supply chain management is more important than ever before.

As today’s consumers raise their expectations about getting what they want — when and where they want it — retailers “Retailers are must be keenly focused on each link in their supply chain, from the initial investing in supply product source, to transportation and chain technologies delivery, to the store shelf — as well as to ensure they the virtual shelf, for that matter. provide better “Te customer of today often customer service and demands and expects the physical improve supply chain side of the supply chain to move as capabilities. The key fast as the technology at their fngerissue is how retailers tips,” observes Scott Reily, SVP of and suppliers manage logistics at Brookshire Grocery Co., data effectively.” a regional chain of more than 150 stores, based in Tyler, Texas.

—Pat Walsh, Te growing list of consumer Food Marketing Institue (and retailer) concerns impacting the supply chain includes food safety and security, the desire for locally sourced products, an interest in sustainability and p product ingredients, and a growing app petite for high-quality fresh food. It’s a p wonder that any grocers can keep up. w Yet Reily and others ackknowledge that the supermarket iindustry is doing a sufcient job oof managing the supply chain, eespecially considering the conssumer demands and constantly cchanging regulations retailers have encountered. h “I think the state of the supply chain iin the typical supermarket today is better than ever,” says Reily. “Despite all the things th

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food retailers are doing right, they are constantly looking for better ways to satisfy their consumers.”

Pat Walsh, VP of supply chain and chief business development ofcer at the Arlington, Va.-based Food Marketing Institute (FMI), concurs, but he notes, “Te industry still has substantial room for improvement. Retailers are investing in supply chain technologies to ensure they provide better customer service and improve supply chain capabilities. Te key issue is how retailers and suppliers manage data efectively.”

Smaller is More Complex Ken Morris, principal at Boston-based consultancy Boston Retail Partners, lauds chains such as Publix Super Markets, Wegmans Food Markets, Whole Foods Market and Trader Joe’s for their success in working with smaller, locally owned vendors.

“Dealing with many small, local vendors often creates more complexity and manual processes, with more SKUs, less economies of scale, and the difculties in managing relationships and processes with small businesses,” he says.

When it comes to working with larger suppliers, direct store delivery has provided better efciencies for many retailers, he notes.

Meanwhile, a growing number of grocers are turning to innovative technology applications to get a better handle on their supply chains. “Many grocers are leveraging advanced analytics technology to optimize inventory levels, reduce cycle times, improve forecast accuracy and maximize on-shelf availability,” observes Morris.

Boston Retail Partners is working with Dedham, Mass.-based software provider Refexis and a large grocery chain to develop a software package that provides “real-time visibility” to the supply chain, he adds. Tis will enable the company to react immediately to exceptions and bottlenecks throughout the supply chain.

In another example of smart technology, Eden Prairie, Minn.-based distributor Supervalu Inc.

relies on SVHarbor, a web-based business tool it introduced more than a decade ago, to support its business partners. Since its launch, SVHarbor has grown to support retailers with scheduling, ordering, advertising and planning functions. Te tool also provides services for suppliers to support retailers’ category management and accounting needs, providing greater transparency.

FMI’s Walsh points out that one of the main challenges faced by retailers boils down to “supply chain complexity and simplicity — in other words, balancing capital investments in technology and [getting an] immediate return on those investments to impact supply chain performance.”

‘Unified Commerce’ For all of the industry’s accomplishments, there’s at least one area where supermarkets have some room to catch up, according to Morris at Boston Retail Partners — and that’s in the area of merging their bricks and clicks (assuming they ofer some sort of online ordering or delivery model).

“Te current retail industry supply chain focus is on innovation and technology for omni-channel environments, and it’s non-grocery retailers that are leading the way,” he says.

Although many specialty and mass retailers are integrating their internet and store operations successfully, these functions are often still being managed in separate silos, notes Morris.

So now, the omni-channel approach needs to be upgraded to a new “unifed commerce model,” in which individual channel silos are eliminated, with technology being ofered on a single platform. Boston Retail Partners goes into more detail about this model in its 2014 Annual Supply Chain Benchmark Survey, which the frm released last July.

Te survey revealed that 93 percent of companies are adopting a unifed commerce model,

Talking Shop The industry’s supply chain movers and shakers will delve deeper into key issues at the 2015 Supply Chain Conference, slated to take place Feb. 15-17 at the Arizona Grand Resort, in Phoenix. The annual conference, which is now in its sixth year, is organized by the Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA). The show’s tagline poses the obvious question: “Retailers and manufacturers

with 54 percent in the planning “The state of the stages and 39 percent currently supply chain in the implementing solutions. Yet even typical supermarket the organizations that are making today is better than unifed commerce a priority still ever. Despite all the have silos, as only 22 percent of companies indicated that they’ve things food retailers merged their channels into a single are doing right, organization. Of the more than they are constantly 500 companies included in the looking for better survey, 7 percent were grocery or ways to satisfy their food and beverage retailers. consumers.”

Morris acknowledges that omni—Scott Reily, channel dynamics have created opBrookshire Grocery Co. erational complexities in the grocery sector, with shoppers expecting to order online and pick up groceries at local stores or have items delivered to their homes. “Successfully delivering on this promise requires grocers to invest in new systems and processes that enable cross-channel inventory visibility and nimble execution,” he says.

Ultimately, the grocers that can fgure out the most efcient ways to deliver on their customers’ expectations — whether in the store or online — will win in supply chain efciency.

But grocers should have smart employees as well as smart tech. “I would take good people over technology at any opportunity,” stresses Brookshire’s Reily. “It’s important, though, to provide your people with the right tools, which includes investigating the right technology to meet the customer demands and the government requirements.” PG

share one supply chain. Shouldn’t they share one supply chain conference?”

This year’s conference will focus on the theme “Connectivity for Efficiency.”

“The conference is a great platform for networking, knowledge sharing and relationship building,” says Pat Walsh, VP of supply chain and chief business development officer at Arlington, Va.-based FMI. “There has been an emphasis on trading partner collaboration over the years; however, in 2015, the em-

phasis is on innovation and adapting to the rapid pace of change.

New retail models have emerged, and there’s a sense of urgency to understand what is working and not working in the marketplace.”

According to Scott Reily, SVP of logistics at Tyler, Texas-based Brookshire Grocery Co. and retail chair of the conference, some of the ideas for improvement that will be tackled at the event include talent retention, data sharing and utilization, on-shelf availability, and food safety and sustainability.

January 2015 | progressivegrocer.com |

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Technology

Data Analytics

Future Tense

Retailers are harnessing the power of predictive analytics to drive their businesses.

By Dan Alaimo

L

earning from the past is good, but predicting the future is better.

Retailers are leveraging predictive technology tools to discover the competitive power of data for a variety of applications — customer-facing and operational — and they are reaping the benefts.

What is predictive analytics? A very basic defnition is mining data for information to be used in predicting trends and behavior patterns, or as Linh Peters, VP of marketing at SpartanNash, in Grand Rapids, Mich., puts it, “predicting the future using data from the past.” But there’s much more to it, she notes.

“Tere are many tactics, tools and capabilities that would fall under this defnition,” Peters says.

“At the end of the day, the goal is to make smarter, more strategic and informed business decisions that meet consumer needs.”

For example, predictive analytics tools not only take into account past data, such as product sales, but also the forces that will shape them in the future. And it’s on a “per-individual level,” according to Eric Siegel, a former Columbia University professor who founded the Predictive Analytics World

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business conference, based in Santa Barbara, Calif., and authored “Predictive Analytics: Te Power to Predict Who Will Click, Buy, Lie or Die.” “It is technology that learns from data to render predictions per individual, which in the case of retail, is the individual consumer or shopper,” Siegel notes. “Tat’s what diferentiates it and makes it by defnition more actionable, more directly applicable, in rendering mass-scale operations more efective than other forms of business intelligence.”

Uses Across the Enterprise Among the many uses supermarkets are fnding for predictive analytics are promotions and coupons; campaign management; category management; assortments; inventory planning; resource and staf planning; shopper patterns, including attrition, pricing, e-commerce and mobile marketing; and various aspects of the supply chain.

“We are using it for pricing. We are using it in promotion. We are using it in our campaign management,” says an IT executive with a major supermarket chain, noting that it’s too early to know the results, as the retailer has been using predictive analytics for only six months.

ECRS unites intuitive software design, technology innovation, and personalized customer service to provide a retail automation system that will elevate your grocery enterprise for years to come. But don’t just take our word for it, ask one of our many customer references.

Visit ECRS at NRF booth #1517 • • • • •

Point-of-Sale • Business Intelligence Analytics • Loyalty, Membership, & Marketing Self Checkout • Warehouse • • Accelerated Checkout System Pharmacy Integration • • EDI Supplier Integration General Ledger • • Micro Market Vending ecrs.com Inventory • • Supply Chain • Fuel

8 0 0 . 211.117 2

• • • • •

Technology

Data Analytics

able to deliver more meaningful and relevant communications and ofers to our shoppers,” Peters notes. “We have seen positive response both in sales and engagement from the consumer.”

The potential for predictive analytics is significant.

Equally significant is the plethora of information that is available to harness.”

—Linh Peters, SpartanNash

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“We are investing heavily in software as service types of applications that help us do predictive analytics tied into supply chain, marketing, pricing,” adds the executive, who asked not to be named. “We are doing a lot of work in that space using solutions, so we are not creating our own. Tere are apps out there that we can use. We see a lot of value there.”

Like many organizations, SpartanNash leverages predictive analytics to determine sales and volume forecasting, according to Peters. “From a consumer standpoint, SpartanNash has made investments in technology and resources to ensure that we have the tools and capabilities in place that allow us to access and leverage data more broadly across the organization,” she says.

Te company sees signifcant opportunity as it relates to making more informed decisions in areas such as assortment, planograms and CRM strategy, Peters adds. “Tis not only benefts the shoppers of our corporate retail stores, but also provides meaningful data and insights for our distribution customers that will help them compete and diferentiate their businesses.

“SpartanNash believes the potential for predictive analytics is signifcant,” she continues.

“Equally signifcant is the plethora of information that is available to harness. Many retailers are able to capture information about their shoppers either through a loyalty program or analysis of credit card data. But with the growth of social media [and] mobile and digital channels, understanding how consumers think, feel and behave has become even more complex. Te more information available, the more difcult it is to ‘predict the future.’”

As an example, SpartanNash has been using predictive analytics to better understand shopper preferences for promotions and products. “By leveraging our loyalty program data, we have been

| Progressive Grocer | Ahead of What’s Next | January 2015

Kroger’s Aggressive Stance Te Kroger Co. is taking an aggressive stance on predictive analytics, which is typical of its use of technology. Te Cincinnati-based grocer is using a Queue Management solution from U.K.-based provider Irisys, to make sure shoppers never have more than one person ahead of them at checkout.

Meanwhile, Harris Teeter is using a Big Data analytics platform from Tresata, based in Charlotte, N.C., “to dynamically understand its product, customer and channel behaviors, in an efort to provide its customers better value across its online, mobile, social and brick-and-mortar channels.” Matthews, N.C.-based Harris Teeter, now a wholly owned subsidiary of Kroger, began the program last year.

When online merchant FreshDirect, based in Long Island City, N.Y., was shopping for a new market, “they used predictive analytics to help them decide where to go, and ultimately chose Philadelphia as their second location,” notes Alan Lipson, global retail industry strategist at Cary, N.C.-based SAS. Predictive Accuracy Paul Scorza, CIO at Ahold USA, which operates from Carlisle, Pa., and Quincy, Mass., points out two current product examples where predictive analytics were used to inform current manufacturing and promotional eforts. One is the rapid growth of pedometers, based on an increased interest in ftness and the emergence of wristband units. “I believe that prediction is extremely accurate,” he says.

Another product more typically found on supermarket shelves is coconut oil in its many forms.

“People put it on their skin; they put it on their food. Tere are all these uses for coconut oil, and a year ago, I didn’t even know what it was,” Scorza says. “Now you can’t keep it on the shelves. Tat’s an example of how a supermarket retailer would have used predictive analytics a year ago.”

Scorza pegs the general accuracy of predictive analytics at about 50 percent, remarking, “Tat’s pretty good.” It may be somewhat lower in the retail environment, because of the difculty in predicting consumers’ buying patterns, and the emergence of an entirely new cohort of shoppers, the Millenials.

“To me, the only predictive analytics that I would have a lot of faith in would be ones that are

Technology

Predictive analytics is becoming a reality, but first you have to have good data.”

—Paul Scorza, Ahold USA

Data Analytics

near-term, that are predicting current trends that are going on.” Tat is, predictive analytics based on three- to six-month-old data will be the most accurate for retailers, he notes.

Predictive analytics is one of the highest levels of business analytics. “Tat’s the end goal everybody is trying to get to when they do business analytics,” Scorza says.

But the majority of retailers aren’t doing true predictive analytics, because they don’t have good, clean data, he asserts: “Predictive analytics is becoming a reality, but frst you have to have good data. … [It’s] something that can be very powerful for retailers. It allows you to see the future and tells you what’s coming, and it’s all based on historical information, as well as current information that isn’t always so structured.”

‘A Requirement of the Business’ Lipson of SAS asserts: “You’ve got to be using analytics. Tere is just no question. It is, in fact, a requirement of the business. Given the speed at which retailing is moving, your customers are moving quickly. Tey are on social [media]. Tey are able to do the price-matching. Tey are able gather all that investigative information. So you need to know what has happened in the past and integrate that into your processes. Tings are moving so fast that you accomplish things manually any more, or even with Excel spreadsheets.”

4 Steps Toward Predictive Analytics Sage advice for many supermarket retailers interested in predictive analytics is simply to get started, says Alan Lipson, global retail industry strategist at SAS, based in Cary, N.C. “It really doesn’t matter where in your business. It depends on you as a business entity where you want to focus.”

Lipson offers four steps to launching a predictive analytics program: Determine what you have. Inventory your data. Understand what you have, prioritize it, and have a good idea of current assets.

Create a plan. What is your data management plan? How are you going to sync all of your data sources together?

How are you going to govern your data? Make sure that you have appropriate processes to maintain and protect all of those pieces.

Do the analytics. Make use of all that information.

Embrace the decisions that can be made with it. Make sure that you have the backing of management to fully support the road down the analytical path.

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| Progressive Grocer | Ahead of What’s Next | January 2015

Because the volume of data is only going to increase from this point forward, with the Internet of Tings and event-stream processing coming along, it’s just going to get faster and faster, he adds. “It is a great opportunity for retailers to continue down that road, to see what they can leverage out of the vast data stores that they have,” Lipson notes.

Te chains that are most efectively leveraging predictive analytics are those applying experimentation across all aspects of their business, says Jef Campbell, VP of client services at Applied Predictive Technologies, in Arlington, Va. “Tese chains know that rapidly and rigorously testing new ideas enables them to stay ahead of the competition and keep up with evolving consumer preferences,” he notes.

For retailers that incorporate predictive analytics to drive activation programs, “we see a strong incremental volume response, typically in the range of 2X or more,” says Bob Tomei, president of Chicagobased IRI Consumer & Shopper Marketing.

“Insight-driven activation platforms – programs, data, analytics — are really the future of marketing and sales in our industry. From my perspective, those that get it right and operationalize it will be the winners, and those that for some reason cannot do it will be the laggards in our industry. Te future is now,” he notes.

Shoppers’ expectations are on the rise, notes Danny Silverman, VP of Cambridge, Mass.based Clavis Insight. “Whereas there was a time when a supermarket had a captive audience within their geographical sphere, the acceleration of grocery delivery via the likes of Peapod and Instacart has suddenly given the shopper an immediate alternative,” Silverman says. “Tese online-only businesses live and breathe Big Data and predictive analytics to the point where it’s a standard process, not a project to be undertaken.

Tus, shoppers often discover a more intuitive and convenient shopping experience. Supermarket retailers can combat this with an excellent in-store experience and outstanding customer service, both of which require the power of Big Data and predictive analytics.”

Retailers need to know that the use of predicative analytics “is essential to establishing and maintaining a competitive advantage, and that assistance is available to help them integrate this data-driven function into their marketing and sales operations,” says John Ross, chief marketing ofcer of Inmar and president of Inmar Analytics, in Winston-Salem, N.C. “As shoppers are demanding more personalized engagement and are more inclined to do business with those who meet this demand,” he adds, “retailers must have predictive analytics in place in order to engage at this level, particularly with members of their loyalty programs.” PG

Case Study

Technology

One Retailer’s

Digital Journey Price Chopper evolves from value-driven to experience-driven grocer, thanks to a new digital strategy.

By Lynn Petrak

I

ronically enough, the impetus for one retailer’s innovative deployment of a new digital strategy to more directly and efectively connect with customers came after a simple but serendipitous conversation.

“I was on my way to meet with Glen Bradley, of Price Chopper, who I went to interview for a blog post I was writing on Big Data,” recalls Sylvain Perrier, president and CEO of Mercatus Technologies Inc., a Torontobased organization that helps North American grocers integrate with multiple technology patterns to improve shoppers’ in-store and online-shopping experiences. “I had shared my thoughts on personalization and Big Data, and how personalization can drive a retailer to operate well against existing parties in the market. We were going back and forth on a whiteboard with ideas, and he said, ‘Have you ever met the guys at Datalogix?

Let me introduce you.’”

From there, the group went to a brainstorm dinner and came away with even more ideas. “It was very organic,” Perrier remembers. “At no point did we ever say, ‘Can we do this?’ It was more like, ‘How do we do this and make it measureable?’”

Over the next several months, Price Chopper Supermarkets, a chain of 130-plus stores in the Northeast that is a subsidiary of the Schenectady, N.Y.-based Golub Corp., and Mercatus, along with Price Chopper’s analytics partner, Datalogix; digital coupon partner, Inmar; and e-mail management partner, Informz, embarked on a collaborative process that led to a new digital strategy for the grocery chain. Te strategy included a digital platform that would allow for new mobile applications and a new website, among other elements.

Moving to digital in a diferent way wasn’t done just for the sake of using advanced technologies, but to better connect with shoppers to deliver what they want, ftting Price Chopper’s stated intent to move from being primarily a value-driven grocer to an experience-driven one.

“Price Chopper knows that the digital space is where our customers are trending towards for convenience and value. Terefore, we are working to transform our commerce, merchandising and advertising platforms to support a ubiquitous digital experience for our customers,” remarks Tom Riley, senior applications architect and digital strategist for Golub Corp./Price Chopper. “It’s no longer a matter of if, but rather how quickly, we can deliver a relevant, January 2015 | progressivegrocer.com |

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Technology

Growing our digital programs and capabilities is an important part of our future growth, including the transformation of our Market 32 stores. We want to be on the forefront of delivering an enhanced digital experience as part of our total shopping experience.”

—Glen Bradley, The Golub Corp.

Case Study

comprehensive digital experience that our customers are expecting and that they deserve.”

Bradley, the Price Chopper VP of marketing analytics, whose conversation with Perrier was instrumental in kick-starting the collaboration, agrees that digital is an efective way to deliver to increasingly discerning, tech-savvy shoppers, and reap the benefts. “We believe personalization is important today and will be even more so in the future,” he asserts. “Younger generations have come of age experiencing and expecting personalization in the digital world, and they extend that expectation to other facets of life. While digital is not the only area in which we use personalization, it is the fastest-growing in usage and capabilities.”

This Time, It’s Personal In that sense — and similar to the simple conversation that started the project — the embrace of new technologies, strategies and mindsets is enabling Price Chopper to achieve a most personal outreach.

“Personalization, done right, goes a long way to create consumer afnity. If you can get the right product in the hands of the right consumer at the right time, it goes a long way for a brand. What we see in grocery stores today is the real interception of commerce and experientiation,” observes Perrier.

Achieving personalization and enhancing consumer loyalty through digital tactics are forwardthinking, but not as daunting as they may seem, he adds. “Te big thing I’ve seen when I talk to many retailers in general is that when they hear about Big Data and personalization, they say ‘We can never do that!’, which isn’t the case.”

Perrier uses the example of the way the Price Chopper project began. “When we frst did this project with Price Chopper and Datalogix, it was like a back-of the-napkin idea — it wasn’t very complex. It’s really about baby steps — you take steps towards something much bigger, and things are

IT’s PErsonal Price Chopper’s integrated digital strategies and personalized outreach create an enhanced shopper experience.

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| Progressive Grocer | Ahead of What’s Next | January 2015

more achievable when you look at the partner ecosystem approach. Bringing the right people to the table, with cohesion, really resonates with retailers,” he says.

Team Effort As Perrier notes, the collaboration between Price Chopper, Mercatus and their partners was one of cohesion, and the project built through a series of steps that helped overcome challenges common to the retail landscape, such as limited resources, traditionally “silo-ed” knowledge, the need for agility, and the current fragmentation of many existing technologies.

It helped that Price Chopper already had employed digital in many ways and across various aspects of its business; to achieve one-to-one marketing, however, those digital capabilities had to be better connected on all ends. “For many years now, Price Chopper has taken a data-driven approach to marketing,” notes Heidi Reale, director of shopper and digital marketing for the grocer, adding that the digital space helps the company achieve its objective through the integration of key messaging, technology and data.

Te partnership of Price Chopper, Mercatus and the other collaborators was a good one, according to the involved parties, because of their similar visions of how technologies could be leveraged with respective goals and capabilities.

Price Chopper’s leadership team consisted of IT, marketing, digital strategy, operations and analytics professionals; those professionals worked with the experts at Mercatus to address the challenges and opportunities unique to the grocery industry.

To achieve the goal of one-to-one marketing through this collaboration, the team determined that generating consumer insight was pivotal to improving shopper engagement and retention. To reach that insight, the team set forth on a series of defned steps, including discovery, implementation, e-commerce and personalization.

Te discovery phase, according to Perrier, included the basics, like identifying Price Chopper’s needs, appraising the environment, assessing opportunities and formalizing the retailer’s digital road map.

Next came implementation, which included integrating functions from the grocer’s third-party organizations like Datalogix, Inmar and Informz.

Tat integration included efective data exchanges and communications among each organization’s systems.

Te crux of the implementation phase was the addition of Mercatus’s Integrated Commerce Platform, which allowed Price Chopper to design and implement new mobile apps as well as a new website.

Trough those channels, shoppers will get useful tools to make their shopping experience easier and more relevant, by placing online orders for customized food items, and tailored deals based on shopping history delivered by emails and digital coupons, including digital redemption. Other relevant features

Golub Corp. Case Study: The Collaborative Team include the digital availability of weekly fyers, recipes, store locators and shopping list creation.

Te next phase in the process was bolstering e-commerce capabilities such as the online ordering system for custom prepared foods. Integration between the grocer and its technology, data and delivery partners is enabling Price Chopper to ofer a host of e-commerce features such as online payment, fexible billing options, and easier checkout and order management.

A crucial phase, and one built upon the other steps, was personalization. Price Chopper is currently moving toward greater customization through its digital strategy, after an initial test rollout. Hallmarks of such personalization include mobile apps, the website, in-store communications or other direct avenues.

To help with personalization, Inmar retooled Price Chopper’s digital coupon program. As of early December, Inmar has taken over management of the digital coupon program for Price Chopper’s shopper loyalty program, AdvantEdge. In turn, Price Chopper has access to Inmar’s nationwide open network and its ability to deliver ofers from the best-known and most popular brands.

The Next Level is Here Golub Corp.’s goal in using new, integrated digital strategies and personalized outreach to shoppers at Price Chopper was to take things to the next level — which is already happening. Recently, Golub introduced a new banner for its stores, Market 32, to be rolled out across the chain’s six states this spring.

Among other features, Market 32 is designed around an enhanced product mix, re-emphasis on customer service, and more foodservice options, along with core digital-based benefts like AdvantEdge card savings, weekly features and e-coupons.

“Growing our digital programs and capabilities is an important part of our future growth, including the transformation of our Market 32 stores.

We want to be on the forefront of delivering an enhanced digital experience as part of our total shopping experience,” notes Bradley.

Meanwhile, other retailers can learn from Price Chopper’s team efort to take its digital capabilities and vision to that (and other) new levels. Beyond challenges like the centralization of data, data integrity, and adjusting expectations about digital versus brick-and-mortar, there are many opportunities that grocers can take to build proftability and loyalty through a new or diferent digital journey. Taking advantage of them, say those involved in this particular project, requires alignment at the senior level, a strong digital foundation, and the recognition of the importance of a multiphased approach that allows for evolution and nimbleness based on other emerging technologies and behaviors.

The Golub Corp.: Based in Schenectady, N.Y., the Golub Corp. owns and operates 134 Price Chopper and Market 32 grocery stores in New York, Vermont, Connecticut, Pennsylvania, Massachusetts and New Hampshire. It is one of the nation’s largest privately held corporations that is predominantly employeeowned.

Mercatus Technologies Inc. was the partner in the innovative digital strategy that Price Chopper embraced. Toronto-based Mercatus helped Price Chopper integrate with multiple technology partners to deliver exceptional in-store and online shopping experiences. Its team of experts collaborated with Price Chopper’s technology partners, client data and current infrastructure to ensure existing systems, multiple channels and marketing technologies deliver strong customer engagements.

Datalogix, which provides core infrastructure for data-driven marketing by connecting offline consumer spending with online advertising, played a key role in the project in targeting and measurement. New York-based Datalogix took in Price Chopper’s transaction, shopper and weekly circular data, processed them, and assigned personalized “deals” based on each week’s circular that gave shoppers specials based on their previous purchase behavior and other factors.

Inmar, based in Winston-Salem, N.C., supports retailers with both traditional and digital promotions, using an array of tools and technologies. Inmar helped Price Chopper revamp its digital coupon program by executing custom integration with the retailer’s POS system and adapting the retailer’s technologies to work with Inmar’s own unique business drivers.

Informz helped Price Chopper provide personalized coupons to customers, delivered through email. Saratoga Springs, N.Y.-based Informz’s application programming interface (API) ensured that data and coupon links are in the same Price Chopper account, so personalized emails can be sent based on shopper history.

Perrier, for his part, says that the one-to-one ratio is a fgure that matters in the future of food retailing. “Moving through the ranks now are progressive thinkers, and many retailers are looking to diferentiate their brands and go after Millennials’ wallet share. When you talk to them about personalization, everyone looks around the room and understands that this is the table stakes right now,” he declares.

Te key to winning, he adds, is a strategy that values group input. “I think of it as a puzzle,” Perrier explains. “When we look at the entirety of a project being done, we see who works with whom to makes pieces of the puzzle ft. Ultimately, we want this to be a win for customers, and it’s about how can we collaborate to make it happen.” PG For more about this project, visit Progressivegrocer.com/techcasestudy.

January 2015 | progressivegrocer.com |

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Equipment & Design Retail Foodservice Equipment

At Your

Service Retail foodservice equipment suppliers are working with grocers to meet consumer demands.

By Bob Ingram

F One thing is for sure: Supermarkets are looking more like restaurants as we continue to evolve the marketplace.”

—Mark Hagerty, Amtekco Industries Inc.

100

oodservice continues to be one of the most popular and in-demand categories of the supermarket, and equipment suppliers are answering the call from retailers to properly outft their displays as well as preparation areas.

“In most food retail stores, we continue to see expansion and focus on prepared food departments that include solutions for both fresh and packaged oferings throughout multiple dayparts,” says Cheryl Beach, marketing communications manager at Bridgeton, Mo.-based Hussmann Corp., which makes service and self-service refrigerated and non-refrigerated prep and display merchandisers for fresh and packaged prepared foods.

Beach notes that Hussmann encourages dialogue with food retail customers, which leads to new innovations, technologies and products.

“Over the last two years, our specialty products business has introduced three new product families to address shopper behaviors seeking convenient, healthy prepared meals and snacks,” she explains. “Te Q Series has an upscale styling that can be confgured into a gourmet prepared food department with creative contours, matching counters, curved glass refrigerated merchandisers and non-refrigerated open display cases. Our Isla family ofers multiple island confgurations that allow the retailer to determine the combination of

| Progressive Grocer | Ahead of What’s Next | January 2015

hot, dry and refrigerated modules that work best for their store. And our Entyce merchandiser is the small-footprint solution for convenient and grab-and-go hot and cold packaged foods.”

Beach sees key drivers in retail foodservice as ethnic and culturally diverse products, more gourmet enhancement to traditional comfort foods, the incorporation of fresher and healthier fare, and grab-and-go convenience all day long.

Keep the Pressure On Broaster Co., in Beloit, Wis., markets pressure fryers, holding cabinets and deli cases to food retailers.

Company President Jay Cipra says the core pressure fryers work especially well in supermarkets, because of the speed of frying, the small footprint and the ability to cook a wide variety of foods.

“Genuine Broaster Chicken, our hallmark and proprietary product, is our most popular food product among grocers,” he notes. “It is produced in our legendary pressure fryers, and the Broaster 1800 Pressure Fryer is the most popular size machine with grocers.”

Broaster markets to supermarkets based on ease of setup and expanded profts in the deli section.

“Whether the grocer is purchasing a pressure fryer to make their own product or bringing in our branded Genuine Broaster Chicken product, Broaster Co.’s equipment and brands expand sales and drive trafc,” Cipra declares.

Equipment & Design

“As we learn more about grocers’ struggles and challenges in foodservice, we are looking at how we can make improvements in their kitchens.”

—Jeff Mote, Alto-Shaam

Retail Foodservice Equipment

Clean Machine At Alto-Shaam, in Menomonee Falls, Wis., Jef Mote, VP of national accounts — retail, says of the manufacturer of commercial cooking equipment, “As we learn more about grocers’ struggles and challenges in foodservice, we are looking at how we can make improvements in their kitchens.”

Alto-Shaam launched the CT PROformance line in early 2014 to address the needs of faster cooking, as well as consistent results and labor efciencies. Te new combi-oven line features an intuitive recipe management system that allows each dish to be cooked exactly the same way every time.

According to Mote, “We’ve heard from chefs in grocery store delis ... that the oven is so easy to clean, saving them labor. Additionally, our opttional automatic grease collection system allows operators to safely extract and dispose of hot grease.”

Mote sees ready-to-eat meals becoming more prevalent, with placement throughout the store, and further predicts that heated displays and merchandisers will be nearer checkout for impulse buys.

Ease of Use John Bieri, VP of sales, global retail at Troy, Ohiobased Hobart Corp., which ofers a wide range of retail foodservice equipment, says, “Our research phase as a part of new product development typically includes both in-depth interviews with retailers and their customers, as well as ongoing observations of processes and interactions.”

Hobart recently introduced the HTi scale, which boasts an easy-to-use touchscreen for employees, as well as a customer-facing display for promotion of specials, in-store events, or videos and demos. Te HTi also helps increase speed and efciency with enough memory to store thousands of PLUs, and features a processor to rapidly complete item searches.

Another Hobart addition is the HS9 slicer, which delivers precision slicing, along with unique design features that make it safe and easy to clean.

Bieri sees more scratch cooking and heritage

A DV E RTO R I A L

Jessica Fratarcangelo Marketing Director, Cheyenne International

of filling cans with loose moist tobacco. Offering adult consumers six pre-packed cans of fresh, high quality smokeless tobacco all in one convenient can, the Klondike 6-Pack brings some muscle to the traditonal moist tobacco category.

Cheyenne Internatonal was founded in 2002 as a full line tobacco product manufacturer. Its North Carolina facility, in the heart of American tobacco country, services both domestc and internatonal markets.

Progressive Grocer: What are some of your newer products that were launched in 2014?

Jessica Fratarcangelo: Since our startup, Cheyenne Internatonal has created excitng and innovatve tobacco products, but this year we expanded our company portolio with monumental new products.

At the 2014 NACS Show we introduced the first no-mess, pre-packed smokeless tub: The Klondike 6-Pack Tub. Available in Long Cut Wintergreen, the Klondike 6-Pack takes away the tme-consuming and messy hassle

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PG: As for 2015, what are your plans for product launches?

JF: We are happy to announce that we are introducing Bodyshot Vapor in January 2015. Offered in three nicotne variatons and seven tantalizing cocktail-inspired flavors, Bodyshot Vapor Liquid is a premium product that is making clouds above the horizon of compettors. When developing the brand, we wanted something unique to the market and recognized that retailers wanted a product that was from a trusted company, guaranteed, and had great visibility on the shelf. It was equally as important to deliver the highest quality product possible which led us to manufacture Bodyshot Liquids in the USA. As our business contnues to grow, Cheyenne is stll focused on customer partnerships and providing adult customers with a quality product, at a fair price.

| Progressive Grocer | Ahead of What’s Next | January 2015

Popping for Profit recipes making their way to supermarkets, observing, “It will be essential that manufacturers design and produce easy-to-use equipment that enables retailers to meet this specifc consumer demand while maintaining efciency and keeping labor costs down.”

Finer Dining Amtekco Industries Inc., in Columbus, Ohio, makes custom heated or refrigerated full-service and selfservice displays. Among the supplier’s new oferings are mobile refrigerated or frozen spot merchandisers that can be placed in strategic locations, creating myriad cross-merchandising opportunities.

“One thing is for sure: Supermarkets are looking more like restaurants as we continue to evolve the marketplace,” emphasizes Mark Hagerty, who’s in charge of new business development at Amtekco.

“Many larger supermarket chains are adding actual restaurants within the store footprint.”

Tat means even more creative supplier-retailer interaction. PG For more about retail foodservice equipment, visit Progressivegrocer.com/retailfoodserviceequip.

Pete Bakala, director of branches at Cincinnati-based Gold Medal Products Co., the leading supplier of equipment and supplies for the “fun foods” industry, says: “Many grocery stores have salad bars, high-end gourmet pastries and premier deli departments. Gourmet popcorn is a natural complement to these product lines. It doesn’t take up a lot of space and is not labor-intensive.

It’s a quality, high-end product that can be produced at very low costs, while offering extremely attractive margins of 70 percent to 80 percent.”

According to Bakala, the company’s most popular line for supermarkets – already at stores such as Mariano’s, Giant Eagle and Stew Leonard’s – is the Gold Medal sweet shop setup, a collection of equipment that can be customized based on a location’s needs and space requirements, and may include a popper, caramel corn cooker or a flavored popcorn tumbler.

“We consistently rely on our relationships with retailers in the development of our products,” Bakala notes. “Their feedback helps us to create equipment that meets their needs, whether that be in size, capabilities or serviceability. They’re also our direct line to the end consumer. Through our retailers, we learn what the customer is asking for. For example, we use that insight when developing new flavors.”

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REGISTER TODAY!

February 25-27, 2015 Hyatt Regency O’Hare Hotel • Rosemont, Illinois The 2015 Store Brands Innovation & Marketing Summit (formerly the Store Brands Decisions Innovation & Marketing Summit) program is shaping up to be the best yet, promising cutting-edge content from retailers and other industry experts. The program also will include ample opportunity to network with industry peers and potential partners. We hope you will be able to join us for what promises to be an informative and exciting event!

Here’s a Preview of Conference Speakers and Sessions Retailer Keynote Presentation: How to Approach Category Management from an Owned-Brands Perspective

General Session: Store Brand Opportunities with Health, Wellness, Sustainability and Healthy Aging

Moe Alkemade, Group Vice President, General Merchandise Manager - Convenience, Walgreen Co.

Maryellen Molyneaux, President/Managing Partner, Natural Marketing Institute

General Session: What You Can Learn from European Store Brands Lynn Dornblaster, Director, Innovation & Insight, Mintel

Retailer Keynote Presentation: Private Brands — Big Growth in Small Formats: One Year Later Sean Thompson, Senior Director of Merchandising, Private Brands, 7-Eleven

For conference updates and details, visit our website at: http://storebrands.info/IMS2015 Platinum Sponsors

Gold Sponsors

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Association Partners

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Produced By

advertiser index Airius

58

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Alto-Shaam Inc.

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62-63

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101, 102

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Enjoy Life Natural Brands, LLC

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General Mills Inc.

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25

www.house-autry.com/southern-side

Iovate Health Sciences International, Inc.

24

www.sixstarpro.com

IT Retail

45

www.itretail.com

Jelly Belly Candy Company

15

www.jellybelly.com

JTM Foods

44

www.jjsbakery.net

Kayem Foods

13

www.alfrescoallnatural.com

Loving Pets Products

61

www.lovingpetsproducts.com

Mariani Packing Company

79

www.mariani.com

Marketing Guidebook/ Directory of C-Stores

72

www.marketingguidebook.com/ www.c-stores.com

Massimo Zanetti Beverage USA

59

www.chockfullonuts.com

MillerCoors

7

www.millercoors.com

MOM Brands

31

www.mombrands.com/bull

Multicultural Retail 360 2015

51

www.multiculturalretail360.com

National Confectioners Association

46

www.sweetsandsnacks.com

National Restaurant Association

70

www.restaurant.org

NEPA Carton & Carrier Co.

42

www.nepacartons.com

New Hope Natural Media

48

www.expowest.com/register

PCMS

55

www.pcmsdatafit.com

Pfizer Consumer Health

19

www.pfizer.com

Pharmavite LLC

85

www.pharmavite.com

Prosperity Organic Foods, Inc.

69

www.meltorganic.com

103

www.robotcoupeusa.com

Sanders & Morley Candy

38

www.sanderscandy.com

Sandridge Food Corporation

73

www.sandridge.com

Simplot Custom Foods

49

www.simplotretail.com

Robot Coupe USA, Inc.

Stonefire Authentic Flatbreads Store Brands Innovation & Marketing Summit 2015 Tabletops Unlimited

21

www.stonefire.com

104

http://storebrands.info/ims2015

Back Cover

www.roveliving.com

67

www.thehappyeggco.com

The J.M. Smucker Company

4

www.smuckers.com

The Procter & Gamble Comp.

32

www.pg.com

10, Insert

www.triononline.com

40, 60

www.zoofans.com

The Happy Egg Company

Trion Industries Zoo Fans

570 Lake Cook Rd, Suite 310, Deerfield, IL 60015 Phone: 224 632-8200 Fax: 224 632-8266 www.stagnitobusinessinformation.com STAGNITO BUSINESS INFORMATION ALSO PRODUCES:

Harry Stagnito President and CEO 224-632-8217 hstagnito@stagnitomail.com Kollin Stagnito Chief Operating Officer 224-632-8226 kollinstagnito@stagnitomail.com Ned Bardic Senior Vice President/Partner 224-632-8224 nbardic@stagnitomail.com Korry Stagnito Chief Brand Officer 224-632-8171 korrystagnito@stagnitomail.com Jeff Friedman Vice President/Group Publisher 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 Courtney Warnimont Advertising Manager 224-632-8215 cwarnimont@stagnitomail.com

January 2015 | progressivegrocer.com |

105

the last word

Resolve to Enhance the Shopping Experience

W

hile pondering Bon Jovi’s wishful 1992 anthem, “I Wish Every Day Could Be Like Christmas,” during the recent holiday season, I found myself thinking about how the lyrics meshed with something that’s been on my mind for several years, which is how I wish every shopping experience could be like Christmas.

Prior to proceeding, I think it’s appropriate to reveal that I sincerely enjoy shopping, which, as fate would have it, works out quite well with how I make a living. And though I don’t get to do it nearly as often, or for as long as I would usually like, I can’t help but believe I was predisposed from birth to take shopping more seriously than most. For starters, my father — who worked two jobs his entire life, not out of necessity, but rather because he wanted to — did all of the grocery shopping for our household of six between his two jobs, here again, not out of necessity, but because he liked to grocery shop. (Little wonder my mom would routinely tell us she was the luckiest woman on earth to have married my dad.)

Ten there was my mother, who, when not dragging me into bore-war fabric stores (which, in my youth, were a far cry from today’s far more engaging JoAnn and Michael’s) for patterns, material and notions for the handmade clothes she often created for me and my siblings, had me accompany her, much to my delight, to her other favorite shopping outlets, including department stores, boutiques and artisan shops.

So it’s little wonder I’m a bona fde, dyed-in-the-wool retail enthusiast. Indeed, even when I’m not on a particular hunt for something, which is actually quite often, I get an enormous kick out of browsing the aisles, racks, shelves, counters and enclaves of any number of disparate retail outlets to behold the bounty, peruse product sets, discover interesting displays and marvel at the latest

well-done merchandising concepts.

Much to my chagrin, however, my adventures in retailing invariably fnd me fretting under my breath about the many missed opportunities I frequently encounter in the forms of poor service, lackluster presentation, uninspired selection and inattention to small but important details.

Given that mindset, imagine my joy during the holidays, when, for the most part, all is right with retail: Te majority of stores are robustly stafed with visible, generally pleasant associates, and crammed with unique products, bundled gift packs, perfectly positioned seasonal specialties, samples of special treats, and countless treasure-hunt trinkets and treats around every bend. I positively relish and applaud the extra mile retailers go to generate every single extra buck to be had with bang-up holiday eforts.

Just as there are opportunities to improve the penetration of locally sourced, free-from and authentic ethnic foods across the entire store, I believe there’s also ample room for improvement for many grocers to accelerate the excitement and pick up the pace with hiring and training, more meaningful merchandising, greater attention to detail, and supplementary special surprises throughout the entire year.

While I’m well aware of the realities of the retail business, as well as my largely Sugarplum Fairy-like aspirations, I’m convinced — particularly as more online retailers are poised to seize exponentially more business from traditional brick-and-mortar merchants for the foreseeable future and beyond — that 95 percent of physical retail establishments could use a little more Christmas in their stores throughout the remaining 10.5 months of the year. PG Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

I’m convinced that 95 percent of physical retail establishments could use a little more Christmas in their stores throughout the remaining 10.5 months of the year.

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| Progressive Grocer | Ahead of What’s Next | January 2015

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