Progessive Grocer - March 2015 by ensembleiq

Evolving Landscape

Looking ahead at emerging retail trends Page 22

Less is More

Free-from report maps strategies for success Page 46

The good news is spreading. Discover how Jif is driving innovative growth in the peanut butter & specialty spreads aisle.

Depth Charges

Annual report shows seafood sailing to new heights Page 75

Gourmet meets Grocery Key Food’s Olive Tree Marketplace banner aims to be all things to all shoppers Page 36

March 2015 • Volume 94 Number 3 ©/® The J.M. Smucker Company

$10 • www.progressivegrocer.com

Satisfying. Versatile. Delicious. Lunchbox | Snacking | On-the-Go | Baking | Entertaining

Multiple product forms and flavors offer all-day-long usage for the entire family! America's favorite peanut butter1 with a classic, creamy texture that offers versatile household use.

Add incremental purchases by offering convenient ways to enjoy spreads.

Convenient tub and ﬂuffy texture makes it easier to snack and spread.

The trusted taste of Jif Natural Peanut Butter spreads with a touch of honey.

Add variety to the Hazelnut category with unique ﬂavor options for expanded usage.

Drive sales with no-stir, creamy and crunchy alternative nut butters.

INCREASE CATEGORY AWARENESS WITH TARGETED MARKETING! Ask your sales rep about shopper marketing and promo opportunities available. 1 IRI MULO, Peanut Butter Category - 52 Weeks Ending September 7, 2014

©/® The J.M. Smucker Company

Evolving Landscape

Looking ahead at emerging retail trends Page 22

Less is More

Free-from report maps strategies for success Page 46

Depth Charges

Annual report shows seafood sailing to new heights Page 75

Gourmet meets Grocery Key Food’s Olive Tree Marketplace banner aims to be all things to all shoppers Page 36

March 2015 • Volume 94 Number 3 $10 • www.progressivegrocer.com

— NEW FOR 2015 —

s Red Mill founder Bob Moore Visit with Bob at Natural Products Expo West booth #2342 as he signs your free copy.

www.BobsRedMill.com

Gerber® Lil’ Bits™ recipes drive category growth by reinventing the segment.

NEW!

Only baby food made with perfectly sized soft bits of fruits or veggies that help baby learn to chew.

March 2015

features

Volume 94, Issue 3

cover story

fresh food

pRogRessive gRoceR ’s 2015 ReTail seaFood RepoRT

The evolving ReTail landscape

Flooded With Possibilities Following a year of respectable performance, retailers have a bounty of opportunities to further net sales with health- and convenienceseeking shoppers.

Retailing Thermodynamics Tese are the concepts grocers must embrace to stay relevant and thrive in the coming years.

cause MaRkeTing

Honoring Heroes Grocers support veterans and active-duty military as part of their community outreach.

special section 46

FRee-FRoM RepoRT

Less is More Free-from products are the next big opportunity for retailers in better-for-you foods.

frozen & refrigerated 62 snacks

Three Squares Go Full Circle On-the-go lifestyles fuel the trend of replacing meals with snacks.

sToRe oF The MonTh

Gourmet Meets Grocery A brand-new hybrid concept in the New York metro area aims to be all things to all people.

dips & dRessings

Dressing for the Occasion Consumers’ parallel tastes for bold favors and perceived healthy products are evident in the dip and dressing category.

70 eThnic Foods

Taste the World Te latest international cuisine oferings help retailers and consumers transcend barriers.

pRogRessive gRoceR ’s deli insighTs

Shoring Up a Valuable Area Poor consumer experience can erode high margins of deli sales.

pRoduce

Big Brand Boom Te produce industry’s most dynamic era is right now.

103

pRoduce caTegoRy spoTlighT

Major Leaves Salad greens are the season’s most sought-after vegetable.

March 2015 | progressivegrocer.com |

nonfoods 106

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

Home HealtH Care

Home Remedies Grocers can tap the trend of aging Boomers treating ailments on their own.

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

112

eleCtroniCs

Power Play Accessories and ftness devices drive sales of small electronics in the grocery channel.

technology 118 Data synCHronization

In Sync for the Future Grocers and suppliers collaborate on global information standards.

equipment & design

124

seafooD Cases

Making the Case for Safety Display units are key to maintaining the critical in-store integrity of seafood.

departments 11 EDITOR’S NOTE: THE AGE OF ExPERIENCE 12 PG PULSE 14 IN-STORE EVENTS CALENDAR: MAy 2015 16 NIELSEN’S SHELF STOPPERS/SPOTLIGHT: HOUSEWARES AND APPLIANCES/COOKERS, STEAMERS AND DEHyDRATORS 18 MINTEL GLOBAL NEW PRODUCTS: BEER AND CIDER 20 ALL’S WELLNESS: FULL DISCLOSURE 126 WHAT’S NExT: EDITORS’ PICKS FOR INNOVATIVE PRODUCTS 128 THE SUPPLIER SIDE 130 THE LAST WORD: AS THE SUPERMARKET WORLD TURNS

on tHe CoVer: (L-R) co-owner Dave Shehadeh, store designer David J. Lee, gourmet chef and co-owner Hani Qassis, and co-owner Wally Shehadeh Photography by Sue Barr

| Progressive Grocer | March 2015

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 Jackie Batson 224-632-8183 • Fax: 888-316-7987 jbatson@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

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editor’s note

by Jim Dudlicek

The Age of Experience

xperiences rule over stuf. Tat was one of the overarching messages at the Food Marketing Institute’s (FMI) recent 2015 Midwinter Conference in Miami, and it’s a concept that retailers need to grasp if they expect to stay relevant in the years ahead. Sure, innovative products are important, but the ongoing fragmentation of retail channels has made it possible for shoppers to buy just about anything anywhere at competitive prices. Why should folks buy something from you and not one of your many competitors? “Today, the consumer’s path to purchase is circuitous, with input coming from every channel imaginable. Even the selection has changed, with consumers no longer limited to what’s on the shelves at a given retailer,” PG Editorial Director Joan Driggs wrote in our online account of author and “retail prophet” Doug Stephens’ presentation at FMI Midwinter. “Te old model of telling a brand story, and creating product interest that in turn drove store trafc, has been replaced with consumers’ ability to buy direct through any form of media, from magazines and videos, social media and smart TVs.” Stephens, author of “Te Retail Revival: Reimagining Business for the New Age of Consumerism,” asserts that commerce will become “more natural, more connected and, perhaps, more sensorial.” To engage shoppers, he says, retailers must deliver in-store experiences that are connected with digital eforts, and “use stores as the experiential point of diferentiation.” Tat experience ought to include customization, a concept embraced by the ever-so-important Millennial generation. Online vendors have excelled at this, but can traditional retailers play, too? Anthony Flynn, founder and CEO of Los Angeles-based custom nutrition bar e-tailer YouBar, maintains that opportunities abound for delivering curated store experiences, especially since traditional grocers are unlikely to become extinct — only 3.3 percent of grocery shopping currently is online, and that’s expected to rise by 11 percent to 17 percent over the next 10 years. Fitting online style customizing to brickand-mortar retailing is a signifcant opportunity that can be realized through the use of emerging technologies such as in-store beacons, Flynn

explained in his talk at FMI Midwinter. Curation can further be expanded beyond the store via Twitter feeds, beacon messages, and events by in-store butchers, cheesemongers and other grocery experts ofering solutions to enhance the customer experience at multiple points along the decision chain. As I wrote in one of my Midwinter e-dispatches, a curated experience is eventually possible for shoppers of traditional supermarkets, but it’s still a ways out from becoming the norm. “First and foremost, make sure you stand for product that will give you reputation and believability; then you can start on curation,” said Bill Nasshan, EVP and CMO at Jacksonville, Fla.-based Bi-Lo Holdings, in a panel discussion following Flynn’s talk. Nasshan said grocers have to emphasize the relationships they’ve built with customers and suppliers. “We’ve worked hard to be good at mass selling,” he said. “Supermarkets have the ‘all’ shopping trip down pretty well. Te ‘me’ — more than a little, less than a lot — we’re not very good at. Unless you can get ‘me,’ you’re not going to get to curation.” In this issue of PG, six industry experts analyze various aspects of the evolving retail landscape. Joel Rampoldt, a partner at Oliver Wyman, looks at the latest competitive threats to traditional grocers. Dan Wagner, founder of Powa Technologies, studies the battle lines being drawn in the m-commerce war. Jim Crawford, of strategic brand firm Chute Gerdeman, advises retailers how to create a truly connected experience. Daymon Worldwide’s Shilpa Rosenberry looks at the impact of private brands. IRI’s Ash Patel suggests ways of harnessing the speed of information. And Steven M. Duffy, of Cuhaci & Peterson Architects, makes the case for the store-within-a-store. Te grocers of today looking to still be here tomorrow will need to take some risks, boldly innovate and meld the best qualities of their own operations and their new-generation competitors. PG

The grocers of today looking to still be here tomorrow will need to take some risks, boldly innovate and meld the best qualities of their own operations and their newgeneration competitors.

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

March 2015 | progressivegrocer.com |

What’s trending on Progressivegrocer.com …

PG Top Woman Named Food Lion’s Store Manager of the Year Congrats to Food Lion’s 2014 Store Manager of the Year, Rhonda Mauldin, who helms the banner’s Simpsonville, S.C., store and was chosen for the prestigious distinction from more than 1,100 of her company peers. A 2014 Top Women in Grocery honoree, Mauldin graciously shared the accolade with her fellow associates. “I really don’t think of myself as an exceptional store manager; however, what I do think of as exceptional is my team,” said Mauldin, who accepted the award on their behalf. In addition to this latest honor, Mauldin has received store manager excellence awards for her work at Bloom Rhonda Mauldin (center) is flanked by (left to right) Delhaize America CEO and Food Lion stores in 2009, 2010, 2013 and 2014. Kevin Holt; James Felix, Northern Division store manager winner; Food Lion “Our store managers are the face of Food Lion to founder Ralph Ketner; Paul Goodnight, Central Division store manager our customers,” noted Food Lion President Meg Ham. winner; Kevin Foy, Mid-Atlantic store manager winner; VP of Operations Greg Finchum; and Food Lion President Meg Ham. “Rhonda personifies this every day by running a great store, teaching and training associates, mentoring food bank. She is an exceptional leader, has developed an future leaders, and caring for our customers and her outstanding team and is so deserving of this honor. We’re community through outstanding service. Her store is always proud to have her as part of the Food Lion team.” one of the top stores in donating meals and time for her local

Perception Gap Between Grocers and Shoppers More retailers are deploying customer-centric strategies to deliver the customization and personalization that consumers desire, yet according to new insights, many shoppers are responding in lukewarm fashion. According to a recent LoyaltyOne survey of U.S. food and drug retailers and CPG manufacturers, more than nine in 10 top U.S. retailers say they leverage customer insights to develop strategies

80%

The rise in the Hispanic population’s spending power over the past 10 years —Packaged Facts’ “Hispanic Food Shoppers in the U.S.”

across the organization, like tracking customer metrics; using customer insights for digital, social and mobile plans; investing in staffing and technical resources; and educating store personnel on using customer insights in their daily jobs. However, the research further shows that while most retailers believe they’re delivering, shoppers just aren’t buying it. To wit: When compared with consumer viewpoints, 64 percent

Federal ‘Stamp’ of Food Safety Approval

Just over half of respondents weighing in on Progressivegrocer. com’s latest poll question would support the creation of a new federal agency solely focused on food safety, while a full 40 percent are opposed. The issue promises to be among the hottest public policy topics set to Fully support: 54% unfold in the coming year. At right Indifferent: 7% is a look at how the votes stacked up as we went to press: Oppose: 40%

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

of consumers say the offers (i.e., coupons) they receive are the same as everyone else’s, 50 percent say companies don’t consistently send personalized and relevant marketing communications, 40 percent say companies don’t know how they prefer to receive promotional offers, and 35 percent say they don’t receive promotional offers for products they want. —2014 LoyaltyOne survey of U.S. food and drug retailers and CPGs

Kids are missing milk’s nutrition. You can help. Feeding America® food banks provide nourishment to more than 46 million Americans. But milk is almost never available to them because it is rarely donated. The Great American Milk Drive® aims to change that. In 2014, the program provided over 280,000 donated gallons to local food banks. This year, we can do even more with your help.

Grow your dairy category. In addition to assisting families in need in your local community, our customized turnkey program will: • Invigorate your milk sales • Convert new customers • Strengthen your community presence

It’s easy to participate. The Great American Milk Drive provides an easy-to-implement retail program with: • FREE MilkPEP marketing materials and support • National media investment to drive awareness out-of-store

To learn more, visit gotmilksales.org/drive or contact us: 800-945-MILK or retailers@milkpep.org.

May 2015 is... National Barbecue Month National Egg Month National Herb Month National Hamburger Month National Mediterranean Diet Month

The 139th Kentucky Derby takes place today. Feature Southern foods in all departments. Don’t forget the sweet iced tea.

awolfe@stagnitomail.com

National Raspberry Tart Day

Star Wars Day. Encourage staff to dress as their favorite characters.

National Enchilada Day — Happy Cinco de Mayo!

World Tea Expo and Healthy Beverage Expo begins in Long Beach, Calif., and continues through the 8th.

Today is Loyalty Day. Buy lunch for your staff and offer a gift-with-purchase to your customers.

E-mail your calendar submissions to

Make sure the floral department is well stocked for Mother’s Day.

National Coconut Cream Pie Day

Ask customers to share their favorite shrimp recipes on Facebook to celebrate National Shrimp Day.

It’s National i Herb Week. Offer cooking demos using herbs.

Mother’s Day. Set up an end cap of grab-and-go gifts for last-minute shoppers.

National Cherry Cobbler Day

National Eat What You Want Day. Highlight “forbidden” treats and “naughty” noshes.

In honor of Pack Rat Day, place all storage-related items on sale.

National Nutty Fudge Day

NCA Sweets & Snacks Expo begins in Chicago and continues through the 21st.

National Apple Pie Day

This is National Craft Beer Week. Match artisanal beers with artisanal cheeses.

National Buttermilk Biscuit Day. Crosspromote buttermilk biscuits and fresh seasonal fruit.

National Strawberries and Cream Day

National Chocolate Chip Day

National Vanilla Pudding Day

Armed Forces Day. Offer a discount to our country’s defenders and their families.

Play cool sounds throughout the store — it’s International Jazz Day.

National Devil’s Food Cake Day

Celebrate National Salsa Month with demos and recipes of unusual salsas.

Memorial Day National Wine Day

National Blueberry Cheesecake Day National Cherry Dessert Day

National Grape Popsicle Day. Ask customers to post Instagrams of their purple lips and tongues!

National Macaroon Day. Sample coconut and almond varieties.

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

In honor of Jewish Heritage Month, put kosher items on sale. National Brisket Day

Salute National Salad Month with store-wide savings on salad fixings, salad bowls and serving pieces.

National Mint Julep Day

Front End

Market Intelligence By The Numbers GROCERY’S TOP 10

Shelf Stoppers

Housewares and Appliances Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Dec. 20, 2014)

Sales % Change Dollars (Millions) 2014 2013 Cookers, Steamers and Dehydrators $17.5 6.7% 11.3% Griddles, Grills and Waffle Irons 12.5 6.2 0.6 Water Filtration Storage Containers 13.7 4.3 8.2 Vacuum and Carpet Cleaners 41.1 4.0 2.4 Razors, Trimmers and Accessories 35.7 2.3 0.5 Air Purifiers, Conditioners and Furnace Filters 63.3 1.4 5.7 Toasters and Toaster Ovens 11.8 -0.7 -2.4 Hairstyling Appliances and Accessories 30.8 -2.7 -0.2 Blenders 14.8 -3.3 11.5 Fans and Ceiling Fans 17.6 -3.3 -4.6 Total Category

$477.7

-3.4%

% Change 2014 9.7% 3.6 0.5 8.2 3.7 -2.4 0.5 -3.2 -0.2 1.7

Units 2013 12.6% -0.6 7.1 9.2 -0.4 3.6 -0.3 -1.1 3.1 -5.5

-4.5%

-1.2%

3.0%

NielseN’s Spotlight Consumption Index: Cookers, Steamers and Dehydrators

CROSS-MERCH Candidates

LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

While cookers, steamers and dehydrators appeal to various demographics, including meal-focused older bustling families and, rather unexpectedly, young transitionals in struggling urban cores, usage of these products is highest among established couples, empty nesters and senior couples, all of whom perhaps are more likely to have the disposable income to purchase these items and the extra time to figure out how best to employ them.

Modest Working Towns

Plain Rural Living

Total

WITH CHILDREN: startup Families

111

101

small-scale Families

Younger Bustling Families

106

118

Older Bustling Families

131

126

115

114

119

116

Young Transitionals

156

independent singles

117

senior singles

established Couples

113

135

105

127

111

empty-nest Couples

121

126

130

131

158

131

senior Couples

103

147

108

136

119

Total

110

113

100

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

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

Very High Consumption (150+)

High Consumption (120-149)

Average Consumption=100

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

• Baby Needs • Photographic

Supplies • Automotive Supplies • Skin Care Preparations • Vegetables and Grains-Dried • Shaving Needs • Wine • Fragrances-Women’s More ONLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

Mintel Global New Products Database Category Insights For more information, visit www.mintel.com or call 800-932-0400.

Beer and Cider Market Overview The U.S. beer market continues to record positive growth in value sales, thanks to the craft and imported beer segments. Volume sales have, however, remained flat as budgetconscious consumers limit their drinking. Mintel estimates that value sales of beer will reach $83 billion as some drinkers trade up to more expensive brands marketed as flavor or style innovations. key issues Traditional glass bottles have forged a reputation for providing high-quality beer. Although bottles remain the primary pack type used in the beer category, recent new

product development activity reflects how brands have leveraged packaging innovation in cans to convey a contemporary image of the category. New product launches of cider have risen steadily in the past 12 months, with brewers particularly focused on crossover beverages and flavor innovation. For instance, while hard ciders have been gaining hops in their formulation, craft beers are being infused with apple flavors. Additionally, flavored ciders incorporating tastes beyond apple have grown as a percentage of total cider innovations in the past year, with cherry, pumpkin, peach and apricot being the main flavored components.

Given the increasing demand for more convenient products, cans could offer manufacturers and consumers a number of benefits, as they have several advantages over glass bottles: they block light and oxygen better than bottles, which helps prevent the product from degrading on the shelf; are lighter to transport; offer more portability; and are better at keeping beer fresh.

What Does it Mean? Canned beers are likely to increase their presence in North America, since they benefit manufacturers and consumers by offering convenience and cost reduction. The prevalence of cross-category

consumption presents a welcoming market opportunity for products that incorporate elements of one drink into another. Craft beer and cider hybrids are thus likely to appeal to consumers who are willing to try new products.

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

Craft beer brands are expected to play a vital role in educating beer drinkers about the advantages of aluminum cans over glass bottles. This can be accomplished by communicating the story of their breweries through visual design cues.

It doesn’t matter if you’re a dietitian, a doctor or a mommy blogger, if you’re sharing information on social media for which you’ve received any form of compensation, it’s important to disclose this relationship to your audience.

All’s Wellness By Barbara Ruhs

Full Disclosure Remember to protect yourself and consumers when leveraging social media.

ocial media has come a long way since the day I sent out my frst tweet several years ago, as a supermarket dietitian looking to publicize my upcoming store tours. It took a while to learn how use Twitter most efectively. Ultimately, I was seeking to connect with existing and potential new customers to alert them that their local grocer had a registered dietitian (RD) on staf to help them with their food and nutrition concerns. With the click of a button, I could share nutrition and shopping tips, provide info on upcoming events, promote new products, stay abreast of vendor promotions, and connect directly with customers and the community at large. Today, as a private dietitian consultant, I’m still learning how to use social media to accomplish many of the same goals. Recently, an RD colleague queried me about ethics and disclosures when using social media. She noticed that I was tagging a specifc branded produce item in my tweets that included the item in recipes, or nutrition and health articles that happened to mention the fruit. As a nutrition ambassador for this particular brand of produce, I was enthusiastic about tagging it in my tweets. What I didn’t realize was that doing this is considered an endorsement, according to the Federal Trade Commission (FTC). In 2013, the FTC released new “dot.com disclosure” guidelines extending to social media, as a measure to further protect consumers from false or misleading advertising. It doesn’t matter if you’re a dietitian, a doctor or a mommy blogger, if you’re sharing information for which you’ve received any form of compensation, including money, coupons, free samples, gifts or anything else of value, it’s important to disclose this relationship to your audience. If you’re posting on behalf of a retailer or a brand and directly using its social media accounts, disclosures aren’t required because it’s already understood where content is coming from and that it may be promotional in nature.

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

My personal Twitter handle, @BarbRuhsRD, includes a short description of who I am and the type of content I generally like to share. I tweet a lot about food, health and recipes, but I also share a lot of unrelated health content based on my personal interests. Here are some guidelines that can protect you, your employer and any brands that you endorse if you’re posting as yourself, or on behalf of your retailer but not on its ofcial account:

Tags: If you’re an RD and have an alternative account that doesn’t include your retailer’s name, make sure to tag the name of your retailer in your tweets. Transparency: Unless you’re using your retailer’s or brand’s ofcial social media account to post information, you must disclose if you’ve received anything in exchange for your endorsement. Forty-six percent of consumers trust online reviews, while only 15 percent trust posts by companies or brands on social networks, according to a report from Cambridge, Mass.-based Forrester Research. Disclosures: Tese must be clear and conspicuous

in every relevant post — it’s not enough to post them on your website or in the headlines. If you’re posting on a blog and you receive complimentary products, include a brief disclosure sentence. On Twitter, use #ad, #spon or #client to indicate you’ve been compensated in some way. If you’re reposting content from an ofcial social media account, it’s implicit that the information is coming from a branded location, so disclosure is unnecessary. When in doubt, fnd a way to include a disclosure to protect not only yourself, but also any clients or brands that you’re promoting. Te point of social media disclosures is to shield the consumer from false and misleading advertising. Remember to put yourself in the consumer’s shoes: Is what you’re posting information that could infuence his or her perception of a product or service? PG Barbara Ruhs is a registered dietitian and the founder of Phoenix-based Neighborhood Nutrition LLC (www.neighborhoodnutrition.com). Follow her on Twitter: @BarbRuhsRD.

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INSIDE

The Evolving Retail Landscape

Retailing Thermodynamics

The Next Wave of Competition

The Retail mCommerce War

The Post-Omnichannel World

The Implications for Private Brands

The Need for Speed

Thinking Inside the Box

These are the concepts grocers must embrace to stay relevant and thrive in the coming years.

he retail landscape is arguably more dynamic than ever before. Te rapid development of digital technology, combined with fundamental changes in the way people shop, has forced the hand of the traditional brick-and-mortar retailer: Adapt or die. Retailers no longer sell things — they sell experiences. So grocers need to leverage their food competencies and combine them with technology and showmanship to deliver an experience that shoppers can’t get anywhere else, digitally or otherwise. Progressive Grocer tapped the insights of six industry analysts to break down the key elements of the evolving retail landscape: how to win in the face of new threats, personalized customer engagement, a world beyond channels, loyalty through diferentiation, harnessing Big Data and localizing marketplace needs. Retailers need to up their game by shaking of their reluctance to experiment with new initiatives and learning — just as innovators like Google have — that true failure is opportunity missed for fear of risk.

The Next Wave of Competition Online, discounters represent potential threats to traditional grocers. By Joel Rampoldt

ood retail has low margins and high fxed costs, but what makes it a really tough business is the frequency with which retailers have to contend with new waves of competition. Tis past year, we’ve seen signs that two niche formats are poised to go mainstream and signifcantly disrupt the grocery market: online and hard discount. As is always the case when a format comes on the scene, incumbents face

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

both threats and opportunities. Companies that adapt and survive new forms of competition will come out the other side stronger. Companies that ride consumer trends by ofering discount or online formats of their own can drive signifcant new growth.

Online Grocery Our modeling suggests online grocery can be proftable in markets that serve 50 percent of U.S. consumers. To put it another way, this is a way of selling food that’s going to work in a lot more

Winning in the Face of New Threats Online and hard discount will never appeal to everyone, but they don’t have to. Tese are formats that are inherently attractive to a broad enough set of consumers that they’ll succeed and grow. Te lion’s share of this growth will come from today’s winners. Inevitably, the total square footage of traditional grocery formats will have to decline.

June 8 – 11, 2015 McCormick Place (South Hall) Chicago, IL USA I FMIConnect.net

Discounters Hard-discount formats in Germany grew from nothing to more than 40 percent of the market today. Beyond Germany, Aldi, Lidl and other discounters have made major inroads across Europe, but it’s the U.K. market that’s the proverbial “canary in the coal mine” for U.S. operators. Tere, Aldi and Lidl have changed, almost overnight, from niche stores serving only low-income customers to mainstream choices that attract middle-class households and routinely win independent awards for their product quality. We believe the United States is next. Aldi has seen healthy, proftable growth for years and continues its aggressive expansion; Lidl has announced plans to enter the U.S. market; and other traditional grocers are trialing their own discount formats. When we benchmarked the typical hard-discounter P&L versus traditional grocers, we found that the discounters turn a 12 percentage-point disadvantage in gross margin into a 3.5 percentagepoint advantage in EBITDA. Tey do this with carefully designed operations that leverage deep sourcing expertise, massive sales intensity per SKU on a small number of “bull’s eye” lines, lowlabor merchandising and very smallfootprint stores. Te result is a store that

can be proftable with prices up to 20 percent below Walmart’s, and in locations that are too densely populated to support a Walmart Supercenter. Upper-income households have seen their income grow, while middleclass and lower-income households have stagnated. Te Wall Street Journal recently reported that some U.S. companies are giving up on lower-income segments to focus on the wealthy. For traditional food retailers, this isn’t an option: Teir dense store networks can only be viable if they’re attractive to a broad range of customers. In the United Kingdom, Aldi and Lidl went from slow to explosive growth when the fnancial crisis and attending recession squeezed middleclass and low-income customers’ pocketbooks. In the United States, these customers are continuing to struggle, creating opportunities for the grocers that can ofer superior value. Some of the plays we see food retailers running include increasing the prominence of entry-level private label (PL) products. In some categories, these brands ofer extraordinary value because they have similar specifcations to the store’s national-brand equivalent (NBE) own brand. Te difculty retailers face in driving entry-level PL is trade-down: If they make these products too attractive, customers will switch over from higher-margin NBE products.

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markets than people think. Where there’s an opportunity for proftable growth, someone will take it. AmazonFresh, based in Seattle, is now available in four cities, with announced plans to expand rapidly. Bentonville, Ark.-based Walmart is expanding its home delivery and drive grocery formats. Tese two players have the capital, skills and will to change the market rapidly. It won’t take a major shift in market share to be disruptive. Since traditional grocers today run with 2 percent earnings before interest and tax (EBIT) and a 20 percent volume variable margin, a 10 percent market share to online would erase their aggregate proftability at current footprint.

FMI Connect annually builds momentum as the dynamic industry platform where food retailers and their merchandise and service innovators push the boundaries of productivity and proftability.

Hard Discount vs. Supermarket: Comparative P&L Supermarket

Hard Discounter

Gross Margin

30.9%

19.1%

Operating Costs

(25.6%)

(11.2%)

Store Contribution

5.3%

7.9%

Overhead

(1.7%)

(0.9%)

EBITDA

3.6%

7.0%

Discounter Advantage (Disadvantage) (11.8% pts)

+2.6% pts

+3.4% pts

Source: Oliver Wyman Benchmarking

Traditional grocers that survive and thrive will do these things well:

Experiment with these new formats: Historically, the grocery industry has been half hearted about format innovation, and as a result, much of the value created from new formats has gone to new entrants. Be that as it may, several of the big grocers are now operating valueoriented formats, with varying degrees of success. To be successful, however, these formats can’t be simply smaller, tweaked versions of the main concept. To compete with Aldi, and eventually Lidl, they need deep expertise in sourcing, a superefcient in-store operating model, and enough network density to drive down the costs of distribution and drive up leverage from advertising spend. Of course, it’s painful to cannibalize existing sales and profts with experiments with

Win the ground war: Traditional grocers will survive. To be one of them, you don’t have to outrun the “bear,” you just have to outrun the store next to you. Trough a combination of investing in value and constantly improving the customer ofer, successful retailers will win the store-by-store battles for customer trafc, ensuring that the other guy feels more than his share of the pain. Te survivors will regain much of the sales per store lost to new formats when their informat competition has to rationalize square footage. Customers are increasingly showing that they value many of the things a traditional grocer can provide: high-quality fresh items, innovative prepared foods, convenience and service. Traditional grocers that are realistic about the threats they face and take steps to be the best at their format in their market can expect growth as lagging players fall behind.

Joel Rampoldt is a partner at Oliver Wyman and co-leader of the North American Retail and Consumer Goods Practice. He has been with the firm since 2002 and is based in New York. For further insights, visit www.oliverwyman.com/insights/retail-consumer-products.html.

June 8 – 11, 2015 McCormick Place (South Hall) Chicago, IL USA I FMIConnect.net

Invest in price in the meat case: Winning lower-income customers requires winning their protein shop. Grocers are fnding ways to invest in lower beef and chicken prices, either by heating up promotions or, in some cases, reducing everyday prices. With commodity prices under pressure, investing often means just holding prices constant and accepting lower margins.

online or hard discount, but winning retailers must constantly try new approaches. Tis will require developing a new mindset to testing and learning, as well as bringing on board the kind of people who thrive in times of change.

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The Evolving Retail Landscape

FMI Connect annually builds momentum as the dynamic industry platform where food retailers and their merchandise and service innovators push the boundaries of productivity and THAN MEETS THE AISLE proftability.

The Evolving Retail Landscape

Battle Lines Drawn for the Retail mCommerce War Retailers look to three top trends — data analytics, Bluetooth beacons and personalized customer engagement — to gain a competitive edge in 2015. By Dan Wagner

he past year has seen a double-digit decline in sales for traditional brickand-mortar stores, a shift that has been attributed to the changes taking place in the retail landscape in relation to digital commerce and the personalization of retail services. Analysts have predicted that the gap between digital innovators and digital stragglers will widen in 2015, with the use of data analytics, local marketing and overall use of mobile services becoming even more widespread for retailers. Tose retailers that gain a competitive edge in 2015 will do so by focusing on these three technology trends: better analysis of and use of

2015 will be a defining year for mobile transactions, the tipping point when the process becomes ubiquitous.

Big Data, integration of Bluetooth beacons, and increased use of personalized customer engagement tools through mobile devices. We’ve seen a snippet of the change to come in 2015 — always connected consumers knowing what they want and believing they can get it immediately when they need it. It’s now the retailers that are doing the catching up to make that a reality. Physical stores were caught unawares by the changing habits

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

of consumers when it comes to how and where they choose to shop. Tis has resulted in some retailers failing to react at the cost of their own survival, while other retailers that foresaw this shift and embraced the digital revolution were able to evolve and create a successful digital sales strategy.

It’s Not Just About Price Te use of Big Data analytics to analyze large banks of customer information to identify key trends will continue to be at the top of the agenda in 2015. Global spending on Big Data is predicted to grow at a compound annual rate of 46 percent until 2020, but only around 15 percent of Fortune 500 companies are expected to exploit Big Data efectively in 2015. Retailers are also beginning to see the benefts of personalized in-store service with the use of Bluetooth-enabled beacons, which guide consumers and send them local ofers while also gathering important data to continuously improve customer experience. Consumers are no longer relying on price to be the determining factor in how or where they purchase an item; other factors such as a bespoke service, loyalty promotions and ever-shrinking delivery times have arrived at the forefront of a shopper’s mind. Consumers are savvier than ever when it comes to shopping, and they’re always looking for greater engagement and interaction with their favorite brands, regardless of whether it’s online or ofine. With global mobile transactions predicted to equal $325 billion in 2015, according to New York-based Statista, retailers will be looking more to customer engagement tools that will not only attract consumers, but also provide the vital data to retain those consumers. Te number of proximity mobile transactions in the United States is predicted to reach $22.6 million in 2015, again per Statista, highlighting the growing presence of local in-store technology in retailers’ sales strategies. 2015 will be a defning year for mobile transactions, the tipping point when the process becomes ubiquitous. We have already witnessed a snapshot of the changes to come during Black Friday. Tese changes will take place in earnest in 2015, the year when mobile commerce will come of age. Dan Wagner is founder and CEO of New York-based Powa Technologies (www.powa.com), an international commerce specialist that creates technologies enabling a seamless consumer experience across all purchase channels.

Four steps toward creating a truly connected experience. By Jim Crawford

A Future Beyond Channels What’s next? Te future is beyond channels. To bridge in-store, on-the-go and at-home experiences, consider these four important steps: 1. Inspire to shop: If you’re never providing inspiration for what’s possible, you’re only selling a commodity. Tere’s a reason that the social media platform Pinterest is so popular: People still want inspiration and ideas. Whether it’s guidance on cooking a meal with the newest superfood or pulling together all the ingredients for a featured recipe, give your customers the howto that encourages them to shop. Provide in-store grocery lists that

include featured items, and showcase popular items trending online. 2. Aid the experience: Over the past few years, mobile capabilities have presented a threat to retailers that feared the “showrooming” efect of price-conscious shoppers comparing prices in-store and purchasing from another retailer or online. Retailers need to reposition their thinking in terms of how the digital world can aid in the shopping experience. Ofer access for in-store price comparison and consumer reviews. Share information on buying wine, or health advice. Te transparency of access to information will earn you points with consumers. Install terminals that allow shoppers to order hard-to-fnd or specialized items online. Ofer your loyal customers digital coupons that are automatically redeemed at checkout. Te additional options could just be the diference between a product purchased and a sale lost. 3. Make it convenient. Retailers can win loyalty with consumers through convenience. Use digital technology to enhance the customer experience by adding an element of convenience. Tat can create a true competitive advantage for brands, when done right. More and more, grocery retailers are ofering in-store pickup for online orders, while others are ofering home delivery. In Belgium, both Carrefour and Delhaize Group are opening standalone pickup points that allow their customers to order groceries online and pick them up at the most convenient spot on their way home from work (often near a major commuter route). Some grocery retailers are using geolocation to notify users about their acquired loyalty points, nearby food oferings, discounts on merchandise,

June 8 – 11, 2015 McCormick Place (South Hall) Chicago, IL USA I FMIConnect.net

n the 1990s, when the internet and e-commerce created a tangible link between modes of shopping that had previously been isolated (stores and catalogs), traditional retailers struggled with how to understand, measure and connect with shoppers in multiple ways. It was out of this confusion that the concept of “multichannel” was heralded as retail’s saving grace, and soon, retailers were all abuzz with cross-channel shoppers. Fast-forward a few years, and retailers began scratching their heads, wondering why their multichannel initiatives hadn’t delivered the stunning ROI they were promised. Shoppers still longed for a more consistent experience, but multichannel just wasn’t cutting it. Tus, “omnichannel” was born. Te real problem, however, isn’t whether the channels are “multi” or “omni,” it’s that retailers are still focused on “channels” rather than on how the shopper views the world.

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The Post-omnichannel World

The Evolving Retail Landscape and current weekly sales when they come to the store. At the least, ofer mobile navigation to help consumers fnd the precise product location in the store. Tey won’t buy it if they can’t fnd it.

Additional options could just be the difference between a product purchased and a sale lost.

4. Establish a history: When retailers think about the ideal length of a relationship with a consumer, it isn’t always the immediate purchase that matters. In categories that consumers shop more frequently than most others, the knowledge that grocers have available to communicate at a more intimate level, and anticipate and respond to consumers’ needs, is a powerful tool. It’s time to rethink what a loyalty program really means. Use customers’ loyalty card purchase history (in-store and online) to create shopping lists for them. Employ mobile scanning or ofer in-store kiosk access to let consumers add products to their lists for future purchases. Or provide in-store notifcations for items consumers have browsed or left in their online carts, giving them the incentive to make the purchase in-store. What’s the story you’re telling consumers in all environments — at home, on-the-go and

4 Truths of an Omnichannel Present 1. It’s still a store world

In 2013, 90 percent of retail transactions happened in-store. We’re still in a store world, and the proof is in the fact that brands are investing more heavily in stores.

2. The shopper is large and in charge Although 90 percent of shoppers expect consistent brand experiences across channels, just 5 percent of retailers have a fully executed omnichannel strategy.

3. It’s a matter of trust

Whom do shoppers trust? 52 percent of shoppers said a single negative review would affect how they felt about a brand. Mistakes on quality, service or value can have a profound, tangible effect on the brand.

4. Mobile is only part of the answer

84 percent of smartphone shoppers use their devices to guide their in-store shopping experiences. This signifies recognition that mobile is a way to engage with shoppers and keep them coming back.

in-store? Is it consistent, and are you being responsive to their needs? Retailers that can move toward a more connected consumer shopping experience can remain competitive in a rapidly evolving retail landscape. Jim Crawford is chief experience officer for Chute Gerdeman (www.chutegerdeman.com) , a strategic brand and design firm based in Columbus, Ohio.

The Implications for Private Brands Sophisticated offerings are helping retailers differentiate and build consumer loyalty, but what comes next? By Shilpa Rosenberry

n today’s changing retail world, the growth strategies of yesterday are no longer relevant. With low addressable population growth here in the United States, retailers can no longer rely on opening more stores to grow, nor can they depend on new people coming into their stores. When you add to that a consumer with more retail options than ever before — from supercenters to traditional grocery, hard discounters, dollar, convenience, specialty, on-

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

line and more — it’s not surprising that loyalty to any one retailer is becoming harder to build and retain. Tis is why it’s more important than ever for retailers to get current shoppers to stay in their stores — whether real or virtual — and persuade them to buy more while they’re there. As we look toward the future, these dynamics will only intensify. Industry growth will be even more fragmented, more targeted and, for many retailers and brands, a vast departure from the norm. Shoppers will increasingly expect more personalized

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The Evolving Retail Landscape relationships with the products they choose and with the retailers where they shop. In this evolving retail world, private brands will be critical to drive trafc, enhance the shopping experience and build retailers’ brand equity. Here’s why: Private brands enable retailers to move faster, to stay relevant to the consumer. In tandem with a retail world that’s changing, the consumer is changing. With increased access to information and social connectivity, consumers have become more knowledgeable about the products they buy, and where to buy them. Technology has further driven society’s compulsion for “now,” which means retailers need to move faster to get consumers what they need, to keep them from going elsewhere to fnd it.

When strategically leveraged as offering a ‘nowhere else but here’ experience, private brands can be used to get shoppers to buy more, encourage cross-category purchases and increase barriers to switching.

Private brands by nature are faster and more agile, allowing retailers to capitalize on consumer trends more quickly. Whether it’s addressing a specifc consumer need state for wellness, looking to incorporate particular global favors and infuences, addressing a new product form, embarking upon a hyperlocal initiative or creating a proprietary favor ofering, retailers can leverage private brands to drive relevancy and diferentiation. At a time when retailers need to work harder to get closer to the consumer, private brands allow retailers to pre-empt consumer needs, focus on specifc lifestyle segments or oferings, and respond more quickly with targeted innovation that, when done well, can surprise, delight and create a cultlike following with core shoppers. Private brands can reinforce a retailer’s brand equity throughout the store, driving connectivity with shoppers. Unlike national brands, which mostly live in specifc categories within the store, private brands have the ability to fourish throughout the store, reinforcing the total store strategy, and driving connectivity with shoppers. In fact, when a retailer succeeds in meeting consumer needs through private brand in one category, it often serves as a gateway to trial for other categories, which can in turn infuence future purchase patterns and further reinforce the retailer’s total strategy. When retailers support their own private brands by ensuring that their employees understand the proposition they ofer, and invest in building trial and engagement for their brands

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

through consistent marketing communication, social media, sampling, tasting and other experiences, brand equity can continue to grow and reinforce itself through each of its touchpoints.

Consumers Embrace Private Brands It’s hard to believe that private brands once had a stigma associated with them as “me too,” low-priced options, which is clearly not the case today. To the contrary, more consumers, especially younger ones, are embracing private brands, which are seen as ofering value and more signifcant alignment with real-life consumer needs and preferences. Industry leaders like Monrovia, Calif.-based Trader Joe’s or U.K. chain Waitrose have staked much of their success on strong private-brand strategies. Even among traditional grocers, we’re seeing categories once considered emotionally driven and dominated by legacy brands being infltrated by private brands that have become a key part of the ofering, such as chocolate, cofee or diapers. It also helps that private brands are sometimes just as fast in bringing their own version of a product ofering to the shelf, or embracing category and consumer white space entirely. When strategically leveraged as ofering a “nowhere else but here” experience, private brands can be used to get shoppers to buy more, encourage cross-category purchases and increase barriers to switching. Tink about product pairings, proprietary favors and iconic product lines as opportunities to make private brands more visible and attractive, and to drive loyalty. As we move into the future and consumers encounter ever-expanding retail options, private brands could well be the reason a consumer chooses you over your competitor. Shilpa Rosenberry is senior director of global consumer strategy for Stamford, Conn.-based Daymon Worldwide (www. daymon.com), which provides retail branding and sourcing expertise to 100plus major retailers and nearly 6,000 manufacturers in 50 countries.

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The Evolving Retail Landscape

The Need for Speed Accelerated information delivery boosts improvement in promotions effectiveness. By Ash Patel

odayâ&#x20AC;&#x2122;s CPG retailers, manufacturers and marketers face a far more competitive landscape and complex path to purchase than that of just 10 years ago, as consumers enjoy a wider variety of products, along with new ways to learn about and purchase them. Online and mobile marketing have introduced increased competition for consumer attention and loyalty, pushing decision-makers to continually seek out more efective avenues for reaching and activating shoppers. To do so, marketers rely heavily on data, analytics and technology to gain deeper insights into shopper preferences and behavior. Tese insights arm them with the knowledge to create optimal products, packaging, pricing, promotions, displays and store layouts/planograms in ways that maximize revenue. To stay relevant, the three elements that must be present in any CPG strategy are rich integrated data

sets, prescriptive analytics, and robust technology that delivers insights via interactive visualization. To truly optimize ROI and drive growth, another catalyst often overlooked is speed. What if retail decision-makers could get POS information from multiple retailers just three days after the shopping day ends, and in some cases, the next day? IRI research conducted in Europe last year revealed that faster time to information can result in promotional uplift of as much as 50 percent.

Data Sets Traditionally, CPG data sets tracked basic information from annual sales data collected from the core channels, including point-of-sale terminals and panel data. Today, a truly integrated data set will include household-level purchase behavior; online, social and television exposure; consumer sentiment; frequent shopper data; unemployment rates; weather implications; and gas prices, to name just a few. Efective data accumulation must surpass the core channels to include client and expanded channels such as shipment and inventory records and census data, respectively. As the Big Data movement shows no signs of slowing down, CPG retailers must deploy a solution that amasses data from core, client and expanded channels in real time. Faster delivery of insight has a dramatic impact on performance, including better promotional availability and planning. In the past, data would become available a minimum of seven days after the end of the shopping day. Tis time lag caused issues in regard to processes, such as inventory stocking, resulting in lackluster performance of promotional strategies. Manufacturer and retail decision-makers who receive the information later than a competitor, or too late, are incapable of preventing lost revenues. Tus, CPG decision-makers must implement a solution that can provide the immediacy of comprehensive data collection to leverage that information in a growthdriving strategy. Prescriptive Analytics Te integration of core, client and expanded data sets will make the information even more complex, which is why

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

• The Original Breakfast Drink • Providing 50 Years of Category Leadership • Available in Ready-to-Drink Bottles or as a Powder Drink Mix • On-The-Go Breakfast Nutrition the Whole Family Will Love

The Evolving Retail Landscape prescriptive analysis is crucial, as it distills actionable recommendations for retailers. Prescriptive analytics transforms the decisionmaking process by identifying growth opportunities through statistical data mining, machine-learning algorithms and prioritized recommendations that are personalized to the individual decision-maker. Using algorithms and methodologies, prescriptive analytics provides the synthesis of Big Data to pinpoint specifc insights that inform decision-making. Te CPG retailer that can quickly gather, access and analyze these rich integrated data sets will be well positioned to act upon the actionable insights, thus increasing market share.

Data Visualization Data visualization is an efective method of increasing the speed at which raw data are transformed into insights. Te technology required to visually display the insights derived from the data analysis is the factor most closely tied to true driver of ROI and growth, which is speed. A graphic representation of brand performance and consumer behaviors speeds up the decisionmaking process by which retailers evaluate and allocate the necessary resources to optimize ROI To truly and drive growth.

optimize ROI and drive growth, a catalyst often overlooked is speed. What if retail decisionmakers could get POS information from multiple retailers the next day?

Actionable Insights for CPG Retailers As competition in the CPG landscape increases, CPG retailers must work to develop a comprehensive and thorough understanding of consumer behavior to drive growth and increase market share. Retailers must tailor the collection, analysis and display of their data to accommodate the need for immediate and insightful decision-making and concomitant consumer results. Data set accumulation methods must expand and diversify to encompass all consumer demographics and all facets of consumer behavior. As the data pool expands not only in size, but in specifcity as well, data interpretation methodologies and algorithms must follow suit with prescriptive analytics. Te fnal catalyst for ROI optimization and growth is the ability to visually represent brand performance in a manner that best informs decisionmakers. If these three elements — rich integrated data sets, prescriptive analytics, and insightful technology that allows for interactive visualization — can be delivered rapidly, CPG retailers will be well equipped to adjust pricing, promotions, displays and store layouts in ways that maximize consumer attention and loyalty. Ash Patel is CIO for Chicago-based Information Resources Inc. For more information, visit www.iriworldwide.com.

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

Thinking Inside the Box How a store-within-a-store can enhance the shopper experience. By Steven M. Duffy

onventional grocers today are increasingly subject to disruptive retailing forces. They are striving to differentiate with unique offerings. One favored method is the storewithin-a-store. Tis concept aims to fulfll local marketplace needs or fnd a niche through strong product selection, service expertise and a compelling mini-store environment. Te title may be a bit of inside baseball to the average shopper; however, when well executed, it creates a destination experience worthy of loyalty. However, the store-within-a-store requires the right strategy, challenges and design elements to attain positive sales ROI and success.

Concept Evaluation Concept development starts with a statement like the following: “We have an underserved customer base desiring an Italian bakery.” Te premise would be reinventing the old bakery from product selection through the store environment — fxtures, furniture and experience (FFE). Te goal is to create an experience that delivers increased sales currently spent outside the store on specialty products. Evaluating this concept completely and data mining for lost sales is critical for success. Te planning process accurately assesses market leakage and current departmental sales versus the competition, and then builds a viable sales pro forma. Te analytical work defnes the specialty brand and product oferings, and then launches the design process. Many deploy this concept strategy in a limited way, while others do so extensively throughout the planning process. Another, less resource-intensive way of creating a new specialty area is by partnering with a local merchant holding strong brand recognition with quality products. A further option is to develop a concept area, tasking a CPG, such as Te Hershey Co. in the candy area, to assist in the process, as it may have an engaged marketing team interested in partnering. Te challenge with any new concept is solving the brand

but the challenge may be overcome by active sampling to drive engagement. As people call for social interaction and culinary expertise, especially in relation to fresh food, there’s more inclination to use this market concept. Younger demographics Gens X and Y leverage social networking that drives engagement, but they also look for one-onone service interactions.

logistics, location and composition of a shop appropriate to the total store environment. A size of roughly 500 square feet should be considered as a minimum critical mass.

The Value Proposition Specialty merchants tend to hold a competitive product advantage over regional or national supermarkets by featuring unique and focused merchandise. Supermarkets choosing to partner with quality local merchants leverage this beneft by doing so. Product becomes the star, and fresh, locally sourced items never go out of style. However, the merchant’s next challenge is assessing the product’s value proposition when creating a department SKU assortment. Specialty stores’ higher prices may be considered an aspirational spend, and therefore not appealing to a value shopper. Te research shows, however that more and more, this group regularly makes upgraded buying decisions. Product assortment considerations helping increase sales include cross-merchandising and meal solutions promoting convenience and time savings. Future viability of a concept, as it intersects with current health-and-wellness trends and the retailer’s core brand values, needs consideration. An example of a shop’s “wellness appeal” is the general decline in consumption of bakery products; however, people still desire “healthy decadence.” Growing specialty categories, including organic and pet, are also noteworthy. Service is the key underpinning for driving sales. Perimeter locations, typically the fresh areas, provide the greatest opportunity for success based upon activated selling via the store team. Center store locations are the most challenging unless an operating commitment is made allocating labor,

Shopper Experience Te store environment showcases the product and the concept’s functional needs. It envelops the shopper in an experience as it reinforces products’ appeal, ignites the senses, highlights service attributes and creates its own brand. Te concept’s mini-store brand must work in harmony with the unique overall store’s brand needs. Some concepts may be branded as more a boutique, and although the concept store becomes its own environment, it still must harmonize with the store as a whole. Finishes and décor — the fabric of the store environment — evoke the brand essence. FFE includes fooring, color palette and fxture selection; it may difer but must act in concert with the overall store’s design. A graphics or signage package adds emotion to strengthen the branding. To quote a friend, “Lighting, in retail, is next to godliness.” A basic tool, it should be task-oriented when feasible, a spotlight to focus the eye directly on product. Today, illumination applications continue to improve and further enhance the shopping experience. Retailers are increasingly attracted to the storewithin-a-store concept, but is it proftable? Its success rests upon a creative yet analytical approach to identifying and delivering a localized approach to marketplace needs. It’s an innovative strategy that keeps things fresh to engage customers and keep them coming back for more. Tis forward thinking is now table stakes in a continually disruptive retail environment. PG

Success rests upon a creative yet analytical approach to identifying and delivering a localized approach to marketplace needs.

Steven M. Duffy is VP of grocery at Orlando, Fla.-based Cuhaci & Peterson Architects (www.c-p.com). An architect and design professional, he has 30 years of national retail-focused experience.

March 2015 | progressivegrocer.com |

Store of the Month

Olive Tree Marketplace

Gourmet Meets Grocery A brand-new hybrid concept in the New York metro area aims to be all things to all people. By Bridget Goldschmidt

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

he frst store and counting under retailer cooperative Key Food’s latest banner, Olive Tree Marketplace, a combination gourmet emporium/ value-focused supermarket, has managed, in the brief time it’s been up and running (a soft opening in December, followed by an ofcial debut in January), to wow residents of its surrounding communities in the New York City borough of Staten Island, the co-op’s top executives and a certain local journalist who loves Icelandic yogurt. More about that last one later. First, the ebullient Dave Shehadeh, Olive Tree Marketplace’s co-owner along with his fve brothers and noted gourmet chef Hani Qassis, proudly provides a tour of the store.

Walk Into Produce In common with many store layouts, the entering customer’s frst view of Olive Tree Marketplace is its produce department, where stalwart items like apples and tomatoes sit beside more exotic fare such as aloe leaves, all attractively displayed on tables and periodically misted shelving. Specials ofered the day of PG’s visit included mini seedless watermelons at $1.99 apiece, ripe yellow bananas at 48 cents a pound, and a 1-pound bag of organically grown carrots for 99 cents. Lower-profle fxtures here enable shoppers to glimpse the prepared food enticements waiting further back; as Olive Tree Marketplace designer David J. Lee, president of Mount Vernon, N.Y.-based Creative Space Design, explains, “I don’t want to block the store.” Shehadeh estimates the current ratio of organic produce to conventional at 25 percent to 75 percent, but “but as we grow, we get feedback from the customers, and as we get feedback from the customers, we customize even more.” After produce comes an island laden “with a variety of cheeses that I don’t even know half of them. I’m learning each day as I go,” Shehadeh admits cheerfully, adding that the number of oferings is “up there.” Accompanying the international assortment are complementary items, including gourmet preserves and crackers, located at the top of the fxture, while a nearby station features stacks of storeprepared olive selections, as well as mushrooms and sun-dried tomatoes, and a small case beckons to shoppers with delectable baked goods from the likes of area company Leonard Novelty Bakery.

concEPt crEators Left to right: co-owner Dave shehadeh, store designer David J. Lee, gourmet chef and co-owner Hani Qassis, and co-owner Wally shehadeh

Photography by Sue Barr

Unique Eats Just ahead is the centerpiece of the store: the prepared food and deli section, which takes up the entire back wall and is crowned by prominent signage and a distinctive gable with exposed beams; close by, a cofee station enables customers to get a cup of hot java just how they like it, a particularly inviting prospect on the frosty day of PG’s visit. Te frst indication of the Mediterranean-inspired wonders in store is a heat-and-eat case ofering just a few of the creations of Qassis, whose impressive resumé encompasses stints at Yankee Stadium, New York’s Javits Center, Macy’s fagship store in Manhattan’s Herald Square (where one of his assistants was a pre-fame Rachael Ray), and even the White House. “Everything you see here March 2015 | progressivegrocer.com |

Store of the Month

Everything you see here is done here.” —Hani Qassis, gourmet chef and co-owner

Olive Tree Marketplace

is done here,” he boasts. Among the convenient items in the case are his own signature versions of focaccia, grilled pizzas, garlic knots, Philly cheesesteaks, colorful pinwheels and even franks in blankets, all sold under the Olive Tree Marketplace brand. “Every day, we have a diferent menu,” says Qassis, going on to joke that the lineup “depends on my mood. If I have problem with my wife …” All kidding aside, he spends “every day, 15 hours a day” working on the menu, aided by a kitchen staf of about 10, with no shortcuts allowed. “We do everything from scratch,” he afrms, roundly rejecting the notions of parbaked components or items shipped frozen from a central commissary. Qassis is passionate about his hands-on approach to the store’s cuisine: ‘You have to be with it, work with it. You need to be experienced with it.” Te prepared food section, which Shehadeh extols as being emblematic of the health-promoting Mediterranean Diet, serves up a smorgasbord of delights that changes daily, including microwaveable meals that “make it easy for all the people who are working late,” notes Qassis, indicating such mouthwatering choices as chicken Marsala and chicken Francaise (PG’s visit happens to coincide with the store’s “Chicken Mania” promotion in which these dishes and others are going for $3.99 a pound). Individual portions are available, as well as family servings, with gluten-free and better-for-you options, like the lemon-accented white quinoa salad, duly highlighted. Qassis describes the trafc in this section as “super busy. We do breakfast, lunch and dinner here.” Among Qassis’ other standout prepared oferings are Italian paella (made with chicken and flet mignon rather than the seafood featured in the traditional Spanish recipe); turkey mufns, which include such ingredients as turkey breast, balsamic vinegar and vegetables; and some truly monumental meatballs. “Te reason we do the large meatballs is they’re not going to dry [out] when you cook them,” explains Qassis. “If they’re small, they’re dry.” Te section also sells jars of Olive Tree Marketplace branded sauces and soups, which, like everything else, are all

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

painstakingly crafted in-house. “We grate our [own] cheese here, too,” adds Qassis, who describes his food as “healthy stuf with choice.” Tat idea of choice even extends to the store’s fresh mozzarella, which comes in salted and no-salt varieties, while other deli items are available in low-salt and low-sugar versions. “We have to give all the options to the customers,” notes Qassis, who adds that free samples for curious consumers are a matter of course. According to Shehadeh, Qassis’ labor of love on Olive Tree Marketplace’s extensive menu is “how we could [ofer items] at that great price, that value price on our gourmet food, [because] everything’s made in-store.”

Center Forward Center store is distinguished by various types of shelving, not only providing interest and contrast for the eye but also serving a practical function, through the use of high shelves designed to carry products on top as a way to make the most of the site’s small space. “We’re trying to maximize on every inch of the store,” says Shehadeh. “We’ve got a wide variety; although it’s only 8,000 square feet, we maximized on every inch … to capitalize on our customers’ demands.” Te section begins with crackers, and the frst thing a shopper notices is that the gluten-free

Store of the Month

We’ve got a wide variety; although it’s only 8,000 square feet, we maximized on every inch … to capitalize on our customers’ demands.” —Dave Shehadeh, co-owner

Olive Tree Marketplace

products in the category are stocked alongside their conventional counterparts. “Everything’s incorporated together, because if a customer’s looking for a certain type of cracker, they can fnd it with the conventional store brands,” notes Shehadeh. “We don’t put all the gluten-free products together. We blend them in with conventional products.” Tis placement strategy has proved popular so far with the store’s clientele. According to Shehadeh, “We can’t keep up with the orders and demand, and each day customers are asking us for more and more items, and each week, we add more and more things, so it’s a blessing, but … It’s a good problem to have.” Along with gluten-free items, the section carries a

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

wealth of organic and non-GMO items, while shelf tags from Key Food’s Keys to Better Health program call out such attributes as “Heart Health” and “Smart Sugar.” “A lot of people are very health-conscious these days,” particularly those who believe that they are intolerant of gluten, Shehadeh points out, adding, “In every product [category], we try to always blend in an organic or a gluten-free” alternative. Authenticity has its place as well. In front of a well-curated assortment of products from Goya Foods, which he describes as “basically mainstream now,” Shehadeh notes, “If I want to get my beans, I like to get Goya beans.” While Shehadeh shows of the impressive pasta sauce set — gesturing toward a line called Dave’s Gourmet, he quips, “My name’s Dave, but I’m not taking the credit for this” — PG meets Store Manager Jef Lind, whose background in specialty foods made him a perfect ft for Olive Tree Marketplace. “Dave brought me on board, and it’s the best move I’ve made,” says Lind, explaining that he worked for specialty stores and managed Stop & Shop and ShopRite locations before making the

leap to his current position. Asked what attracted him to the store, his reply was unhesitating: “Dave and Hani.” Te feeling is entirely mutual on Shehadeh’s part: “He’s been working at this feld for a while, and we needed his experience. He’s a good part of the team, so it’s a good move on both sides.” To procure the specialty items like cucumber juice that its shoppers are coming to expect, “we use various distributors [as well as main distributor C&S Wholesale Grocers], and we go to all extents to get the products,” says Shehadeh, noting that “the guys for our specialties and our organic foods, they’re in here, like, every week, making orders.” In addition to its branded fresh items, Olive Tree Marketplace could also roll out its own shelf-stable items in the not-so-distant future. “Tat’s defnitely something that we’re looking to do, putting our own label on, say, olive oil” and other products, Shehadeh confrms. Despite the fact that center store stocks foods

from various countries, there’s no “international aisle” per se; items are “stored by commodity, more or less,” notes Lind. Adds Shehadeh, “We make sure, frst and foremost, to sell healthy food, and then cater to everything else and give every customer what they want.” Although the section’s healthy and specialty products are on prominent display, so are the low prices. “You got sales all the way across the board,” says Shehadeh. “[Customers] know they’re getting a value on health … at a great price. We’re not pricegouging people just because we consider this an upscale store.” Gesturing toward an in-aisle display of Viki’s Granola, he continues: “In a regular gourmet store, something like this would cost six-something, $7. But over here, we sell that for $3.99. … We always have [items] at an everyday price.” Asked how Olive Tree Marketplace is able to do that, he replies: “It’s all about buying it and stocking up on it, and buying it at the right time. And some stores, they’ll buy it at a cheap price and still sell it for the more expensive price. We don’t do that. We try to work on a reasonable margin to pay the bills and keep the customers coming back.” Further emphasizing the diference between his establishment and its specialty store rivals, he notes: “When you go to what they call an upscale supermarket, they won’t throw sales on like this. Tey’ll get it cheap and still sell it expensive. … You know, we want to be fair; we want to keep the customers happy. … Te biggest expense today is putting meals on our table every day.” In fact, the store often surpasses sales price expectations. “We customize our sales every week,” explains Shehadeh. “Key Food has great promotions. What we’ll do, we’ll go above and beyond their promotions. We’ll even drop the price cheaper. Let’s say they have a Poland Spring 24-pack of water on sale for $4.99, we’ll drop it a dollar. We’ll drop it more than a dollar; we’ll drop it to $3.88 for the week. We have the ability and the fexibility to customize our sales and customize our prices to what we want to do.”

1490 Clove Road, Staten Island, NY 10301 Grand opening: Jan. 9, 2015 Total square footage: 11,000 Selling area: 8,000 square feet SKUs: 30,000 Checkouts: 5 Store hours: Monday-Saturday, 7 a.m. to 10 p.m.; Sunday, 7 a.m. to 9 p.m. Store designer: Creative Space Design, Mount Vernon, N.Y.

March 2015 | progressivegrocer.com |

Store of the Month

Key Food has great promotions. What we’ll do, we’ll go above and beyond their promotions.” —Dave Shehadeh, co-owner

Olive Tree Marketplace

Te value pricing is important, since various income levels shop the store, including folks who have to watch their budgets, and often cash-strapped students from two nearby colleges, St. John’s University and Wagner College. Referring to the store’s surrounding communities, Shehadeh says with a smile: “You’ve got Todt Hill, [which] is very upscale; you’ve got Grymes Hill; you’ve got Dongan Hills. Tat’s a great place to plant an Olive Tree, is on a hill.” Moving on from a small nonfoods section that even includes reptile food, as Shehadeh notes with pride, we arrive at an array of fresh-baked breads on an end cap, much of it produced in-store, augmented by items from Melone Brothers, a local artisan bakery that makes such bread varieties as Asiago Cheese, Kalamata Olive and Cranberry Walnut. “It’s always hot bread all the time,” he says.

‘Everything Into One’ As well as featuring grass-fed and organic items and the services of an in-store butcher, the meat department is distinguished by an exclusive product line. “We make our own sausages,” Shehadeh says, granting PG’s photographer exclusive access to the store’s kitchen to record the sausage-making

process. Later, a store associate provides samples of Olive Tree Marketplace’s delicious just-grilled lamb sausage; a sweet Italian pork variety is also available. It’s in the dairy section, which, Shehadeh afrms, ofers “the full line of organics, and we have a high demand for it,” that he recounts the aforementioned story of the local journalist. “We had a lady who was doing an interview from [cable TV channel] NY1 — over here we have the Siggi’s [Icelandic yogurt] — and I heard her screaming, ‘I don’t believe you carry this; I love this!’ It was something that they could only get from a health food store or a specialty store, but when they come into a supermarket like this one, they fnd everything that they want.” Te frozen food department, along with the usual

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

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Store of the Month

Olive Tree Marketplace

complement of organic products — including ontrend kale — provides yet another Olive Tree Marketplace specialty: ravioli crafted by local company Pastosa Ravioli and sold under the market’s brand in plain white boxes with black lettering. “Tey package it for us, but it’s made fresh,” notes Shehadeh. Olive Tree Marketplace’s daily deliveries of seafood come courtesy of New York-area supplier Sea Breeze

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

Fish Market Inc., and include sea bass and red snapper. On the day of PG’s visit, a huge whole Alaskan halibut is on display, which Shehadeh says sells for “anywhere from $20 a pound, depending on the market value.” Under the counter is a tank containing fresh lobsters, which are steamed in-house, among other house-made seafood delicacies. Shehadeh admits to a weakness for one item in particular: “I always eat the oysters over here, about a dozen a day.” A nearby rack holds such ancillary products as seafood batter and cocktail sauces. Olive Tree Marketplace’s newly minted mashup of gourmet and grocery is already a success. “Believe it or not, we’ve only been opened for a month, and our sales have doubled in a matter of a month, from the time that we opened,” declares Shehadeh. Even with all of the “awesome” feedback the store has received since its debut, however, he still welcomes constructive criticism from shoppers. “We always take customers’ suggestions,” he says. “Maybe there’s something that we’re missing, something we can improve on. We always take it in, and it’s something that we strive to get better [at].” As for the concept’s ultimate goal, he explains: “We’re meshing two worlds into one, and we’re trying to get everything into one. Usually, if you’re going to have gourmet food, you’re going to go to a gourmet store; you want specialty foods, you got to go to a specialty food store; you want a conventional supermarket that ofers sales and everything, you go to a conventional supermarket. We’re ofering everything in one, and that’s what makes us unique and that’s what’s going to make us stand out.” PG For more about Olive Tree Marketplace, including further plans for the banner, visit Progressivegrocer.com/ olivetreemarketplace.

Free-from Report

Less is More Free-from products are the next big opportunity for retailers in better-for-you foods.

“O

By Jim Dudlicek

rganic” has specifc standards, but many consumers don’t know what they are. “Natural” is a vast designation open to much interpretation. As shoppers scratch their heads, looking for honest food-product labeling, “freefrom” may be the solution that both retailers and CPG companies are looking for to end the confusion. “Research shows that many consumers are skeptical of label claims, especially around the term ‘natural,’ and they often believe that ‘organic’ equates to ‘expensive,’” says David Young, VP of private brands at Minneapolis-based Supervalu Inc. Tat’s why, as part of a newly announced brand refresh, Supervalu is shifting to new free-from messaging for its Wild Harvest brand that addresses consumers’ desire for clearer ingredient statements. All products in the Wild Harvest line, launched in 2008, are free from more than 100 “undesirable” ingredients, including artifcial favors and synthetic ingredients, and nearly 70 percent of its products are certifed organic by the U.S. Department of Agriculture (USDA).

Wild Harvest, which currently features more than 300 products in 60 categories ranging from fresh produce, dairy and meat to cereals, pastas, snacks and baby foods, is expanding its product lineup this year with nearly 200 new items. “While the Wild Harvest brand has always been about delivering great-quality, afordable, better-for-you food choices,” Young says, “this refresh will make it easier for shoppers to fnd Wild Harvest products at their neighborhood grocery store that help them live a healthy lifestyle.” Tis is a strategy that other grocers are adopting as well, among them Te Kroger Co. Cincinnati-based Kroger’s Simple Truth brand proclaims that it’s “Free From 101,” meaning that products don’t contain 101 specifc artifcial preservatives and ingredients that an increasing number of consumers consider detrimental (visit Progressivegrocer. com/freefrom to see the full list).

Creating a New Category Consumer demand for free-from products is defnitely on the rise. “What’s In Store 2015,” by the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA), notes that of all of the global food and beverage introductions in 2013, almost 13 percent included a freefrom claim, up 3 percent over the previous fve years. Confrming these trends are fndings in IDDBA’s original research, “Engaging the Evolving Shopper: Serving the New American Appetite,” which shows that consumers view foods found in the fresh perimeter categories as antidotes to unhealthy, processed foods. For example, the dairy department represents a real-food source of protein in the form of yogurt, milk, cheese, eggs and tofu, while the bakery department has an increasing opportunity to deliver on key wellness priorities, with more focus on a wider variety of fresh, whole grain and gluten-free products. “In-store bakeries, delis and dairies can engage consumers by presenting them with a variety of fresh, real and minimally processed foods,”

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

Health & Wellness Shopping Behavior

says Eric Richard, IDDBA’s education coIndicate how well each ordinator. “By doing so, they become part of statement shoppers’ conversations about what is healthy describes your and delicious to eat, and where they can easown behavior ily fnd these foods to purchase.” regarding shopping Manufacturers of free-from products are for food and defnitely taking the trend seriously, most beverages: recently evidenced by the announcement at press time that Deerfeld, Ill.-based Mondelēz I LOOK for International is acquiring category pioneer food and Enjoy Life Foods, maker of allergen-free cerebeverages ... als, cookies, bars and other snacks. “When Enjoy Life Foods was founded 13 That are good for my heart years ago, we joked that we were No. 1 in a category that didn’t exist,” says Joel Warady, That are minimally processed chief sales and marketing ofcer for the Schiller Park, Ill.-based company. “With consumers becoming more conscious than ever of what That contain only ingredients I recognize they are eating, paired with the increased diagnosis of food allergies, the demand for That are locally grown or produced free-from foods has increased dramatically. Today, more brands are entering into the market, providing innovative products to satisfy With the shortest list of ingredients consumers’ growing demand for products.” Tat’s also the assessment of the folks at With added vitamins and minerals Better For You Foods. “Only a handful of years ago, there were very few options in free-from products, and consumers were delighted at the That help lower my cholesterol prospect of any free-from products. So all someone had to do was care enough to create a product Endorsed by health organizations I recognize that omitted particular allergens or unwanted ingredients, and that product was well received,” That are non-GMO certified says Amy Lotker, owner/EVP of the Delray Beach, Fla.-based manufacturer of all-natural, gluten-free and dairy-free frozen pizzas. That are labeled “organic” “Fortunately, free-from products have become more popular, even mainstream in That are Fair Trade Certified certain instances — and now consumers of free-from products are more demanding about the ingredients contained within,” That are cooperatively produced continues Lotker. “In the realm of natural free-from oferings, health-oriented conSource: “A Culture of Wellness 2013” report, The Hartman Group sumers now seek products that contain non-GMO ingredients and whole grains, association with the American Association for the combined with lower amounts of sodium, unAdvancement of Science revealed that 88 percent of healthy fats and unnecessary calories.” scientists believe genetically modifed foods are safe Certainly, interest in non-GMO products is to eat, compared with only 37 percent of the public. growing. Te latest research from Te NPD Group, Tat gap is driving more food makers to reformubased in Port Washington, N.Y., fnds that more late their products, many seeking verifcation from the than half of Americans are concerned that modifed Non-GMO Project, based in Bellingham, Wash. One foods pose a health hazard (see sidebar on page 52). of the latest is Vintage Italia Pasta Chips, which deTotal sales of food and beverage products labeled buted at the Winter Fancy Food Show new packaging “non-GMO” topped $10 billion during 2014, sporting the Non-GMO Project Seal of Approval. according to data from Schaumburg, Ill.-based “We felt it was important to respond to our conNielsen, a 15 percent increase over the previous year sumers’ desire for a non-GMO product,” says Jerry and more than 50 percent since 2011. Bello, founder and CEO of Windemere, Fla.-based As reported last month in Te Washington Post, Vintage Italia. “Our verifed products are produced a survey conducted by the Pew Research Center in

When trying to decide which foods and beverages to put into my shopping cart/basket:

I’m most likely to GET the ones ...

30%

March 2015 | progressivegrocer.com |

Free-from Report

Wellness Track Claims are ‘not’ Additive Dollar Sales in Millions GMO-free Grocery Dairy Produce Frozen Foods Health Care Bakery Deli Meat Pet Care Personal Care General Merchandise Beauty Care

Gluten-free Grocery Dairy Health Care Meat Frozen Foods Deli Pet Care Alcohol Bakery Personal Care Produce Beauty Care Tobacco and Tobacco Alternatives General Merchandise Household Care

2011

2012

2013

2014

$6,356 2,490 1,562 1,374 502.2 190.1 82.6 103.0 34.7 6.3 0.107 0.035 0.000,938

$7,413 3,102 1,761 1,457 560.3 274.3 106.7 110.6 38.4 1.6 0.279 0.111 0.000,464

$8,694 3,962 1,909 1,570.6 600.5 351.8 140,9 122.9 35.9 0.941 0.377 0.043 0.146

$10,026 5,028 2,005 1,533 686.2 424.9 171.6 140.6 35.5 1.5 0.466 0.123 0.011

$24,063 12,205 4,864 3,481 1,234 1,680 390.9 43.7 6.8 62.9 25.4 46.5 22.6

$28,859 14,614 5,534 4,240 1,735 1,877 494.9 61.7 47.8 102.9 46.7 66.9 36.7

$33,446 16,540 6,106 4,764 2,169 2,136 584.3 572.1 166.0 152.1 96.9 89.4 66.8

$38,206 18,801 7,097 5,071 2,647 2,402 687.0 601.2 311.6 186.9 159.1 141.2 97.0

sourcing and manufacturing practices, because of documentaries such as ‘Food Inc.’ and ‘Fed Up,’ and are therefore more conscious about what foods they’re putting into their bodies,” says Brittany Chibe, founder and owner of Chicago-based Paleo Scavenger, who started the company last June after adopting a paleolithic diet, based on what cavemen were believed to have eaten. “I think the awareness will continue to grow, and claims like non-GMO and gluten-free are going to be more important to consumers, and therefore retailers.”

Dedicated to Gluten-free Meanwhile, gluten-free shows no signs of slowing down. Sales of products carrying the gluten-free claim — including food, 1.03 1.5 3.1 2.7 0.050 0.040 0.526 0.545 beauty and personal care, 0.070 0.118 0.165 0.057 and general merchandise — totaled $38.2 billion Hormone-, during 2014, Nielsen Antibiotic-free $6,115 $7,140 $8,100 $8,831 reports, up 14 percent over Dairy 4,121 4,803 5,338 5,557 the previous year and nearly Frozen Foods 1,106 1,210 1,391 1,648 60 percent since 2011. Meat 551.5 723.4 917.0 1,159 Grocery retailers are Deli 198.7 231.2 247.5 259.7 Grocery 94.0 106.1 133.0 152.1 taking full advantage of Pet Care 23.3 26.2 46.8 31.8 this trend, highlightHealth Care 18.7 36.0 25.1 22.3 ing gluten-free products General Merchandise — — — 0.295 prominently in their weekly Produce — 0.458 0.573 0.235 circulars, with Kings Food Personal Care — 0.275 0.930 0.150 Markets, Foodtown, Giant Bakery 0.064 0.162 0.226 0.105 Eagle, Big Y Foods and Source: Nielsen ShopRite leading the pack during the year ending Jan. in compliance with the Non-GMO Project Stan24, 2015, according to data from Solon, Ohio-based dard, including ongoing testing of risk ingredients.” ECRM. Te snack category enjoys the lion’s share Te snack chips, made with a blend of semolina four of ad support for gluten-free products, at more than and ancient grains, are sold nationwide at major 30 percent, followed by deli and frozen, also in retailers, including Safeway, ShopRite and Walmart. double digits, ECRM research shows. Other new products are starting small but gain“Consumers are becoming more and more ing traction by tapping free-from trends, like Paleo educated about allergens in their food,” says Mike Scavenger’s granola, which is free of grains, dairy, Ganey, director of marketing at Four Oaks, N.C.soy and refned sugars. based House-Autry Mills, manufacturer of the Our “I think consumers are becoming more eduHouse line of gluten-free baking mixes. “Tis is a cated about the food industry with respect to its market that cannot be ignored by retailers.”

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

To support his point, Ganey cites a Mintel report showing a 43 percent increase in the sale of glutenfree bread last year. “Gluten-free consumers are becoming more sophisticated in the way that they learn about the products they eat and in their demand for more favorful products. We witnessed that during our national survey of gluten-free customers and in interviews during sensory taste tests of our new baking mixes against established competitors,” he says. “Te survey found that taste is the No. 1 factor leading to the consumer’s choice of one gluten-free brand over another.” As with so many other aspects of retailing today, digital marketing will be crucial in reaching out to those interested in gluten-free products, Ganey asserts. “Retailers should enhance their online discussions with gluten-free customers, making the section of their website devoted to gluten-free information easy to fnd. It’s also important to ofer gluten-free recipes, especially those that clearly identify the right brand, for the best results,” he advises. Enjoy Life’s Warady says his company “has been on the cutting edge when it comes to utilizing digital and mobile technology, and how it is best used in shopper marketing. Tere is no better marketing spend than being able to dialogue with the consumer while she is making decisions in the retail aisle.” Enjoy Life uses technology to provide product information, recipes and coupons to help drive additional sales. Additionally, Ganey says, retailers should more clearly identify their gluten-free section in the center aisle to make products easier to fnd and identifable for current and future gluten-free consumers.

Category Management To be sure, the free-from category is evolving from a scattered selection to a dedicated shelf set, and companies like Enjoy Life have been at the forefront of this development. “With the help of some of our major distributors, Enjoy Life is educating retailers on how best to merchandise free-from products to maximize consumer acceptance,” Warady says. “Based on our signifcant consumer research, we know that consumers

prefer to shop for products in a dedicated set, which provides both ease and an element of safety.” According to Warady, test stores that created dedicated free-from sets saw a 48 percent increase in velocity over the same time period from the year prior, when products co-existed in the natural aisle. “Consumers looking for free-from products are known Continued on page 52

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March 2015 | progressivegrocer.com |

ÂŠ General Mills

Driving Growth with New Products that meet Evolving Food Trends

DELIVERING INNOVATION ACROSS THE STORE

Free-from Report

Continued from page 49

Free-from consumers are loyal and appreciative, so there is an abundance of opportunities for retailers to create and enhance lasting relationships.” —Amy Lotker, Better For You Foods

to become more loyal shoppers to retailers who get free-from merchandising and product mix right, with an overall increase in basket value,” he says. Better For You’s Lotker adds: “Retailers should take full advantage of promoting free-from products, realizing that it’s not just a fringe consumer, it’s a now a mainstream consumer, that buys these products. Family members and friends, even if they’re not personally in need of free-from products, purchase them for loved ones, because they care about their well-being and their satisfaction. Free-from consumers are loyal and appreciative, so there is an abundance of opportunities for retailers to create and enhance lasting relationships.” Paleo Scavenger’s Chibe endorses merchandising free-from products with shelf tags to call out their benefts. “‘Gluten-free,’ ‘dairy-free,’ ‘non-GMO’ and even ‘local producer’ colorcoordinated tags have been popping up on store shelves,” she observes. “In terms of promotion, I think demoing is efective as well as trials or couponing, but I think the best way to promote these products is to educate consumers on the benefts. Te best way to do this is to get in front of the consumer, meaning having a store nutritionist or dietitian talk directly with them. It could be an e-newsletter, or an in-store meeting or demo to allow shoppers to speak directly to the nutritionist and discuss the benefts of these products. Few retailers do this well.”

Free-from Foodie-ism How can retailers further leverage the trend in free-from products? “People are snacking more times throughout the day, and are using these snacking opportunities to replace a standard meal,” Warady notes. “Consumers are looking for even more functionality out of free-from foods, specifcally protein and other better-for-you attributes.” Warady sees free-from evolving from a category to more of an attribute. “More CPG brands realize that the way people are eating has changed, and for the brands to change with them, they will need to create better-for-you products with clean-ingredient decks,” he says. “Products that are able to boast freefrom claims will see their sales grow exponentially.” Chibe, Ganey and Lotker say they anticipate growth in other allergen-free foods, in particular dairy- or lactose-free. Further, Lotker envisions a “free-from foodie-ism” movement, with more exotic ingredients and international favors rising to the forefront. “It just seems like the next logical step in the evolution of free-from,” she says. “A growing number of free-from consumers are discriminating food lovers who seek more interesting options that also happen to meet their specifc dietary needs.” PG Read more about free-from products, their creators and retailers’ strategies to sell them at Progressivegrocer.com/freefrom.

Interest in ‘Better For You’ Falling, GMOs Rising Consumers want their food to be natural and not altered to the latest dieting patterns, according to a new study by The NPD Group, its 29th annual “Eating Patterns in America” report. Consumers are cutting back on their consumption of food with 12 labels that are considered “better for you”: reduced-fat, low-calorie, diet, light, reduced-cholesterol, reducedsodium, caffeine-free, sugar-free, fortified, organic, low-carb and whole grain. The report finds that Americans cut back on products with these labels for the sixth straight year to the lowest level in a decade — down 27 percent between 2008 and 2014. “It seems we have entered a new phase of marketing health to the American consumer,” says Harry Balzer, SVP and chief food industry analyst at Port Washington, N.Y.-

based NPD and author of the report. “The first phase, back in the ’80s and ’90s, focused on avoiding harmful substances in our food, such as fat, cholesterol and sodium. The second phase, from the mid-’90s to just a few years ago, was a move to add more beneficial substances in our diet, such as whole grains, dietary fiber and probiotics. “It appears we are in the third phase of the ‘healthy food revolution,’” Balzer continues. “In this latest evolution, consumers appear to be avoiding foods and beverages that were made to be better for them and instead consumers are going for products that are real and not altered.”

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

Coinciding with this is the increasing concern about genetically altered foods, Balzer notes. NPD’s latest research finds that more than half — 57 percent — of Americans are concerned that modified foods pose a health hazard, up from 46 percent a decade ago. “Have we altered the food supply so much, to make it better for us, that there is now a backlash against those products? It is looking like we want more of our foods and beverages to be natural,” Balzer says. “I think we’re looking for foods and beverages to be as they were meant to be. It is part of the new ‘healthy food revolution’ happening in this country.” www.npd.com

Cause Marketing

Honoring

Heroes Grocers support veterans and active-duty military as part of their community outreach. By Jim Dudlicek

embers of the nation’s armed forces — activeduty or veterans — historically are held in high esteem by the public. Regardless of personal political leanings, consumers tend to have great sympathy and afection for service personnel. Support for military-related causes is strong, and movies like the Oscar-nominated “American Sniper” enjoy boxofce success. Tat’s why community-minded grocery retailers often put military causes at the top of their outreach activities. “With 23 million Americans who are veterans and more than 2 million

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

active-duty and reservists, the numbers alone speak to why Kroger created Honoring Our Heroes,” Lynn Marmer, group VP for corporate afairs at Te Kroger Co., says of the Cincinnatibased grocer’s partnership with the USO that has raised nearly $12 million since 2010 to help support the organization’s programs, the largest cumulative gift to the USO in its 75-year history. “But our reasons go much deeper than the numbers alone, and are much closer to the hearts and homes of our customers and associates,” Marmer continues. “Americans of all ages and demographics are personally touched by the past and present military service of our neighbors, family members and colleagues.” Kroger started Honoring our Heroes (www.honoringourheroes.com) in 2010 as a small regional initiative for its checkout coin box collections. Te response was very strong, so the grocer conducted comprehensive research that revealed customers of every demographic segment wanted to support veterans and service members. Te program has continued to grow annually, with Kroger’s customers, suppliers and employees at all levels contributing to fundraising eforts. Additionally, since 2009, Kroger has hired more than 22,000 veterans; the company operates more than 2,600 grocery stores under two dozen banners in 34 states. “I think our nation regrets how we treated Vietnam-era veterans, and as a country we are determined to support today’s returning servicemen and -women and all our veterans with the opportunities, respect and dignity they deserve,” Marmer says. “So making a pledge to hire veterans is another way we can express our appreciation to our service members. It also is smart business, as veterans bring experience and maturity to the workplace.”

Brands for Bravery Grocery shoppers across the country can show their support for veterans by patronizing more than 30 consumer brands and 100 grocery retail banners participating in the Wounded Warrior Project’s (WWP) Believe in Heroes Campaign (wwpbelieve.org), launched in 2010 by Jacksonville, Fla.-based integrated marketing consultant Acosta Sales & Marketing. Acosta launched its ffth annual Believe in Heroes campaign last summer as part of the 10th anniversary of the WWP (www.woundedwarriorproject.org), a Jacksonville, Fla.-based organization ofering wounded veterans and their families support through programs designed to nurture the mind and body, and encourage economic empowerment. Since its inception, Believe in Heroes has grown to become the largest co-op marketing program in the United States. Bringing together thousands of

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Cause Marketing

growth and in rallying communities across the United States to support WWP’s mission.”

RALLYING RETAILERS Acosta‘s Believe in Heroes campaign raised $5.8 million in 2014 to help injured service personnel and their families, pushing the campaign’s total contributions to more than $21 million since 2010.

Making a pledge to hire veterans is another way we can express our appreciation to our service members. It also is smart business, as veterans bring experience and maturity to the workplace.” —Lynn Marmer, The Kroger Co.

CPG brands, retailers and consumers, the campaign has raised more than $16 million for WWP to date and has helped enable the expansion of its life-saving veteran programs that now directly serve more than 50,000 injured service members. “Te grocery industry’s support of injured service members through Believe in Heroes is nothing short of remarkable,” says Robert Hill, Acosta’s CEO. “Our veterans have selfessly sacrifced to protect and serve our country, and this movement frmly demonstrates our collective commitment to giving back to our nation’s heroes when they need our help the most.” Last September through Veterans Day, Believe in Heroes called on consumers to “Shop, Share and Save,” encouraging them not only to shop and receive discounts in support of injured veterans, but also to connect with warriors by discovering their personal stories and inviting others to join the cause. In this latest initiative, each participating brand ofered a high-value digital coupon promoted in two special issues of News America Marketing’s SmartSource Magazine coupon insert delivered to 53 million households nationwide. Participating grocery retailers supported the efort through their circulars, in-store programs, pointof-purchase materials, and contribution tearpads at checkout. Brands that took part included Bic, Burt’s Bees, Campbell’s, Clorox, Gerber, Horizon Organic, Hormel and Purina. “Tanks to Acosta, News America Marketing, and all of the brands, retailers and consumers who participate in the Believe in Heroes campaign, WWP is able to continue to grow and help even more service members who live with the visible and invisible wounds of war,” says Adam Silva, WWP’s chief development ofcer. “Believe in Heroes has played a signifcant role in our

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

Homefront Honors Scores of other grocers support their own initiatives in connection with military holidays. For example, last fall, Publix Super Markets, Delhaize America’s Food Lion banner and Tops Markets LLC each ofered a discount on Veterans Day to active and retired members of the U.S. military, as well as to their families. Publix and Food Lion extended 10 percent discounts to veterans and active-duty personnel with proof of service, while Tops ofered an 11 percent discount on total grocery orders. “Publix is proud to honor the men and women who serve and protect our country and our freedom,” says Maria Brous, director of media and community relations at the Lakeland, Fla.-based grocer, which operates 1,088 stores in Florida, Georgia, Alabama, Tennessee, South Carolina and North Carolina. “We support the military and their families through many programs throughout our operating areas. Publix’s Veterans Day discount is an extension of our military support and directly impacts our service families. Our promotion is a small token of appreciation for their everyday acts of bravery. It’s one way we can give back.” “Food Lion proudly supports the men and women who are serving our country and who protect our freedoms every day,” says Greg Finchum, SVP of retail operations at the Salisbury, N.C.based grocery chain. “Providing this discount to military and their families is a way for us to honor them and show our gratitude for the many sacrifces they have made for our country.” Food Lion has more than 1,100 stores in 10 Southeastern and Mid-Atlantic states, while Williamsville, N.Y.-based Tops operates 161 supermarkets in western and northeastern New York, northern Pennsylvania, and western Vermont. PG Learn more about retailer and CPG military support efforts at Progressivegrocer.com/causemarketing.

Continued on page 60

GF GLUTEN FREE

LF LOW FAT

Cause Marketing Continued from page 56

Cause Marketing Beyond the Barracks Turbana, Sendik’s Boost Hunger, Cancer Awareness Coral Gables, Fla.-based Turbana Corp. and Wisconsin’s Sendik’s Food Market presented a timely gift to Feeding America Eastern Wisconsin just before Tanksgiving: a check for $11,500, the result of a partnership between the grocer and the banana importer. Turbana teamed with Sendik’s to donate a portion of the proceeds from the grocer’s promotion, 7 Days, 7 Ways to Save, with Turbana bananas and Fyfes pineapples, too beneft the food bank, which distributes more than 22 million pounds of food annually to 800-plus pantries, ries, meal programs and other nonprofts serving more ore than 377,000 people in eastern Wisconsin. In January, the partners used the promotion to raise funds to support ABCD: After Breast Cancer ncer Diagnosis, a nonproft that provides free one-on-one -one support to those battling cancer through its network work of more than 500 mentors. “It is a part of Turbana’s fundamental valuess to support its community,” says Marion Tabard, Turbana’s director of marketing. “We are thankful to have such a great partner in Sendik’s, who shares those same values.” Owned by the Balistreri family, Whitefsh Bay, Wis.-based Sendik’s operates 12 stores in the southeastern part of the state. www.sendiks.com, www.turbana.com

Causes Run Deep at General Mills Minneapolis-based General Mills traces its cause marketing roots back to Betty Crocker’s relationship with homemakers via her radio show in the 1920s, ’30s and ’40s. Mark Addicks, SVP and CMO, says its brands have “naturally woven causes relevant to consumers into their DNA.” Today, the company operates some of the largest and most successful brand philanthropy programs, including these fve: Cheerios: Te brand’s Cheer on Reading program has distributed 77 million children’s books since 2002 inside specially marked boxes of Cheerios cereal. Most recently, the program spurred the donation of more than 25,000 books to Little Free Library, a Hudson, Wis.-based organization that champions free book exchanges in neighborhoods around the world. Nature Valley: Its Preserve the Parks initiative partners

the brand with the Washington, D.C.-based National Parks Conservation Association to help restore national parks. With donations to date totaling $1.8 million and counting, the program has helped to support preservation projects at eight national parks across the country. Cascadian Farm: Its Building Bee Habitats program

aims to increase and sustain the population of bees to a level that will enable continued, consistent pollination across many diverse food crops.

Green Giant: To encourage kids to stand up to bullying,

Green Giant launched the Raise a Giant program last year, in partnership with PACER’s National Bullying Prevention Center, based in Bloomington, Minn., and We Day Minnesota. Yoplait: For the past 15 years, Yoplait has contributed more than $50 million toward the treatment and prevention of br breast cancer through programs like Save Lids to Save Lives, Pink Together and Susan G. Komen’s Race ffor the Cure Series. In October 2013, Yoplait introduced Pledge Your Part, a new online initiative intro designed to encourage and empower everyone to desig make a pledge to help fght breast cancer, whether through saving lids, participating in a breast cancer throug awareness event or in any other way they choose. awaren

Other General Mills initiatives include OutnumO ber Hunger, a partnership with Chicago-based Feeding America and Big Machine Label Group Fe (BMLG), in Nashville, Tenn., to secure millions of (B meals on behalf of local food banks, and Box Tops For Education, which since 1996 has dispersed more than $500 million to 90,000-plus schools. www.generalmills.com

Nestlé Waters Looks Locally “We’re in a unique position because our spring-water brands are regionally distributed and have local roots,” says Jane Lazgin, spokeswoman for Stamford, Conn.-based Nestlé Waters North America. “Many of our causes are dedicated to our local communities, where the brands have presence.” Te company and its Ozarka brand support a humanitarian sponsorship of Tournament of Champions in Texas, where they participate in a project launched by San Antonio-based H-E-B to fnish homes for wounded combat veterans. Further, Nestlé supports the annual Taste of Dallas culinary event and the Trash Bash to clean up Texas waterways. Additionally, Nestlé’s Poland Spring brand, carried by major Northeastern retailers, supports the One Fund, which helps victims of the Boston Marathon bombings. www.nestle-watersna.com Humane Treatment Gains Support Te Humane Society of the United States works with retailers and CPG companies to improve farm animal welfare in their supply chains. Te Washington, D.C.-based organization’s advancements of the past two years among grocers and food companies have been dominated by moves away from confning sow-gestation crates for pork production in processing and supply chains. Companies that have pledged to discontinue the use of such crates include Clemens Food Group, Nestlé, Cargill, Hormel, Kraft, Supervalu, Delhaize, Tyson Foods, Smithfeld Foods, Safeway, Ahold USA, Roundy’s Supermarkets, Johnsonville Sausage, General Mills and Williams Sausage Co. www.humanesociety.org

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

Jay Leno Entertainer

Martha Stewart Founder, Martha Stewart Living Omnimedia

Walter Robb Co-CEO, Whole Foods Market

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

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Frozen & Refrigerated

Snacks

Three Squares Go Full Circle

On-the-go lifestyles fuel the trend of replacing meals with snacks. By Lynn Petrak

Snacking has become a purposeful, rich cultural practice that now stretches beyond the center store snack aisles and into the fresh perimeter.” —Eric Richard, International Dairy-Deli-Bakery Association

hey may not be foraging berries or spearing bufalo, but consumers are revisiting their hunter-gatherer history through modern eating habits. A new kind of nomadic lifestyle — now called “mobile” and “on-the-go” — has led to shifting eating patterns, with sit-down family dinners often replaced by grazing and snacking throughout the day. Colin Stewart, SVP at Jacksonville, Fla.-based sales and marketing consulting frm Acosta, agrees that hectic work and activity schedules are spurring the grazing movement. “Te traditional approach to meal occasion is changing,” he notes. “Not only is it tough to fnd time to sit and have a meal, but we’ve learned that the healthy approach is to fuel our bodies throughout the day.” Te Hartman Group, a market research frm in Bellevue, Wash., calls this change “seismic.” According to the frm, only 10 percent of people follow a once-traditional three-square-meals-a-day habit, with snacking now comprising half of all eating occasions. Te good news for food retailers: 80 percent of snacks are eaten at home, according to Hartman’s estimates. Additional market research bears out this sea change. Chicago-based Technomic Inc. found that

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

77 percent of consumers snack at least once a day, with 51 percent reporting that they snack twice daily. About a third of consumers (31 percent) told Technomic that they’re snacking more frequently than they were just two years ago. Moreover, 45 percent are replacing one or two daily meals with a snack. Likewise, Schaumburg, Ill.-based Nielsen reports that today’s shoppers plan meals only hours in advance, looking for quick preparation and often replacing meals with snacks. In 2014, Nielsen conducted a Global Survey of Snacking, based on the changing nature of noshing here and abroad. “Busy, on-the-go lifestyles often dictate a need for quick meals, and many opt for fast food that can be high in calories and low in health benefts,” says Susan Dunn, Nielsen’s EVP, global professional service. “Tere is a massive untapped opportunity to gain market share in the nutritious, portable and easy-to-eat meal alternative market, [which] snack manufacturers could fll.” To be sure, snacking is big business: According to Nielsen, consumers worldwide spent $374 billion on snack foods between 2013 and 2014, an increase of 2 percent over the previous time frame. With snack foods crowding out traditional meal ingredients on lunch and dinner plates, manufacturers and retailers are competing in a new and tighter way with other channels, from foodservice operations to drug stores to dollar stores. Within the grocery channel, there are opportunities to merchandise snacks for both between-meal consumption and as meal replacements.

Fresh Potential “Snacking is no longer just an incidental eating occasion where a consumer impulsively purchases a low-cost packaged item such as a candy bar or bag of nuts,” afrms Eric Richard, education coordinator for the Madison, Wis.-based International DairyDeli-Bakery Association, which recently released a report called “Engaging the Evolving Shopper: Serving the New American Appetites.” “It’s become a purposeful, rich cultural practice that now

stretches beyond the center store snack aisles and into the fresh perimeter.” Nielsen’s fndings support the promotion (and cross-promotion) of snacks throughout the store. Last year, the number of unique deli prepared snack items increased nearly 10 percent, and in the produce section, items like snacking vegetables and fresh-cut fruit expanded by close to 20 percent each, according to Nielsen data. With this signifcant change in eating behavior and food purchases, the resulting consumer clamor and industry competition have led to new product development, packaging and promotions to reach those nomadic but tech-savvy and discerning consumers. “Tis cultural shift puts a new burden on U.S. food companies to create products that are fresh and healthy enough to eat regularly, plus tasty and interesting enough to compete with a host of restaurants, taco trucks, cofee shops and other food venues,” remarks Hartman CEO Laurie Demeritt. “To fully understand what consumers want, it is

important to study the cultural forces underpinning what and how they eat.” Portability, which spans products, portions, packaging and other related factors, is an obvious key feature of meal replacment snacks. According to Technomic, 60 percent of consumers cite portability as an important factor when choosing a snack. One example of a newer snack product that was developed around portability is the P3 Portable Protein Pack, from Northfeld, Ill.-based Kraft Foods’ venerable Oscar Mayer brand. “Consumers snack three times a day on average, and 75 percent of adults are looking to add more protein to their diets,” says Joe Fragnito, VP of marketing for Oscar Mayer. “Te protein snacking category has a 7 percent growth rate, but meat is too often an afterthought, with all the yogurt, smoothies, bars and powders on the market.” Philadelphia-based Dietz & Watson has since launched its protein-heavy Snacks on the Go line, combining meat, cheese and mini pretzels. Demand for higher-protein snacks that can be

The protein snacking category has a 7 percent growth rate, but meat is too often an afterthought.” —Joe Fragnito, Oscar Mayer

March 2015 | progressivegrocer.com |

Frozen & Refrigerated

Snacks

consumed at traditional mealtimes has also been heeded by Ruiz Food Products Inc., of Dinuba, Calif. “Consumers know that protein helps them feel full longer, so they are reaching for high-protein foods, especially in the morning or for snacking occasions,” notes President and

CEO Rachel Cullen. Many manufacturers, in fact, are starting to see beyond the three-square-meal model and shifting into grazing mode. Te Hillshire Brands Co., in Chicago, now part of Tyson Foods, has unveiled the Hillshire Snacking line, which includes kits with Italian-style meats, cheeses and crackers, as well as protein-centric items like grilled chicken bites with honey mustard sauce. Interest in better-for-you snacks that include items deemed healthy, organic, and natural or free-from is also having an efect on snacking occasions and mealtimes. In its consumer studies, Technomic found that 50 percent of consumers say that healthfulness is very important when choosing a snack.

Meeting Demand Food companies are accordingly bulking up their snack choices. Bridgewater, N.J.-based Applegate, for instance, recently teamed up with the Annie’s and Stonyfeld Farms brands on a line of portable kits, Half Time, which can be consumed as on-the-go meal replacements or a convenient lunch. Varieties include Applegate antibioticfree lunchmeat and rBGH-free cheese, Annie’s crackers and snacks, and a Stonyfeld Organic YoKids Squeezer.

Meanwhile, meal replacement snacks borrow from such foodservice trends as small plates and big bites. Te foodservice infuence is also evident in co-branded grocery snacks like White Castle’s frozen sliders, Chili’s Chicken Tamale Bites and P.F. Chang’s vegetable mini egg rolls, among others. Te seguing of snacks into meals is a trend that market researchers believe will continue for some time to come. According to a recent study from Te NPD Group, snack foods eaten at mealtimes will grow by about 5 percent over the next fve years, or to 86.4 billion eatings in 2018. PG

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

Frozen & Refrigerated

Dips & Dressings

Dressing

for the Occasion

Consumers’ parallel tastes for bold flavors and perceived healthy products are evident in the dip and dressing category. By Lynn Petrak

F Consumers are seeking Greek yogurt and products that include it as an ingredient; they are snacking at a higher rate than ever before and are looking for healthier options.” —Jake Oliver, Litehouse Foods

or food products that are ultimately meant to go with something else — whether it’s greens, fresh-cut vegetables, or salty, crunchy snacks — dips and dressings are hardly an afterthought when it comes to consumer palates and preferences. Indeed, while traditional varieties of both refrigerated dips and dressings are mainstays that will always have a prominent spot in refrigerated grocery cases, a closer look at the category reveals plenty of opportunity for ofering new favors and formats that meet the wideranging needs of shoppers. In common with a host of other retail food products, these items are currently receiving new formulations and new looks. Americans’ penchant for snacking and desire to eat healthfully by choosing items like salads and fresh-cut vegetables remain drivers of dip and dressing purchases. Tat doesn’t seem to be an eating pattern that will change any time soon; according to research from Te NPD Group, in Port Washington, N.Y., consumption of fresh food in the United States has grown 20 percent to more than 100 billion eating occasions over the past decade, with the strongest momentum coming from those under age 40. In a recent report, NPD projects that consumption of fresh food will continue to grow at a rate faster than the U.S. population growth, now at a yearly rate of 4 percent. At the same time — and key for the dip category in particular — Americans are snacking more often and on a greater variety of foods. According to Te Hartman Group, based in Bellevue, Wash.,

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

half of all eating occasions are snacks. Further, in a fall 2014 report on global snacking trends, Schaumburg, Ill.-based Nielsen pegged snack sales at $374 billion annually; sales of refrigerated snacks, which include dips and spreads, are the second most popular type of snack, behind salty snacks. Dips, spreads and dressings also ft into the higherend specialty food sector that caters to gourmetminded consumers. At last year’s Fancy Food Shows, refrigerated salsas and dips were among the foods with the highest specialty food penetration. Te combination of increased snacking occasions and a demand for fresh, healthier and diferent foods is already boding well for the refrigerated dip and dressing categories. According to data from the Chicagobased market research frm IRI, sales of refrigerated dips reached $754.8 million for the past 52 weeks ending Jan. 25, 2015, an 8.67 percent increase over the previous year. Sales of refrigerated dressings during the same period were also on the uptick, rising 5.75 percent to about $360 million. IRI’s category data further show that several brands within dips and dressings were in the black over the past year. In the dip segment, sales of private label products led the way, increasing just shy of 5 percent to $133.1 million. Brands of dips that saw sales increases included T. Marzetti (up 1.99 percent), Fresherized Foods (up 21.9 percent) and Ventura Foods (up 6.01 percent). In the refrigerated pourable salad dressing segment, several brands likewise did well from early 2014 to early 2015: Sales were up at T. Marzetti (4.36 percent), Litehouse Inc. (8.53 percent) and Bolthouse Farms (25.18 percent).

and dressings. Te Heluva Good The Spice of Life line, from HP Hood, in Lynnfeld, With sales of refrigerated dips and dressings Mass., recently rolled out Greek remaining strong and the future of snacking and Style Yogurt Dips in French Onion, eating healthfully seemingly solid, the pace of new Herb Ranch, Southwestern Chipotle product development in the category is steady. and Fire Roasted Vegetable varieties. Many of those new products refect consumers’ taste Litehouse Foods, based in Sandpoint, Idaho, has for bolder favors. unveiled Opadipity Greek Yogurt Dips, available At Makoto Dressing Inc., based in Melbourne, Fla., Sales Manager Charles “Buzzy” Blyer agrees that standard favors are being supplemented by dressings that appeal to more sophisticated palates. “I believe that consumers are looking for new, bolder favors,” he says, pointing out that Makoto’s ginger dressing is a topranked item nationally. In addition to its standard ginger dressing, the company ofers Honey Ginger, Orange Ginger and Yogurt Ginger dressings. ✳ Also capitalizing on the soupedup favor trend, the Marie’s brand, from Ventura Foods LLC, in Brea, Calif., now has a line of Bold Slaw dressings in such varieties as Sesame Ginger Coleslaw, Chipotle Coleslaw and BBQ Coleslaw. Also, Ventura’s Dean’s line of dips has augmented its standard portfolio with Bufalo Ranch, Sririacha and Bacon and Horseradish varieties. And Columbus, Ohio-based T. Marzetti’s refrigerated dressings include stalwarts like Classic Ranch and Honey Dijon alongside zestier items such as Asiago Peppercorn. Meanwhile, even ethnic-inspired types of dips and spreads like guaMade with camole and hummus are getting the 100% Real Cheese bold treatment. Dean’s, for instance, ofers a Zesty Guacamole spread, and in December, the Sabra Dipping Co., in White Plains, N.Y., added a Lemon We’re serving up support ince 2001, Gordo’s® has been Twist variety to its line of hummus.

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March 2015 | progressivegrocer.com |

Frozen & Refrigerated

Dips & Dressings

in sweet favors of Creamy Cheesecake, Strawberry Delight and Vanilla Almond, and savory favors of Creamy Ranch, Chipotle Ranch, Cucumber Dill and Spinach Parmesan. “Opadipity is right in line with several trends — consumers are seeking Greek yogurt and products that include it as an ingredient; they are snacking at a higher rate than ever before and are looking for healthier options,” says

Jake Oliver, assistant brand manager. In addition to yogurt and Greek yogurt, other healthy attributes are evident in dips and dressings, from lower-fat and -calorie options, to the inclusion of benefcial ingredients like antioxidant-rich fruits, to the launch of organic products. Makoto’s Blyer, for his part, says that a knowledgeable shopping base is now making its demands known. “I believe that consumers are making healthy choices when choosing a variety,” he observes. “Te consumer’s knowledge of the health benefts of ginger has grown rapidly.”

Sizing up the Market As with other food categories, form follows function in refrigerated dips and dressings, especially when it comes to convenience. Responding to lifestyles that include the need for portability and portion control, several manufacturers have added to or changed their products’ packaging formats.

Makoto, for example, complements its 16-ounce and 9-ounce packages with 2-ounce portion-control cups of ginger dressings. For on-the-go consumption, or for those who seek smaller portions for health or lifestyle reasons, T. Marzetti ofers cream cheese fruit dips in single-serve cups sold in a 6-pack. Also heeding that trend is the Wholly Guacamole brand from Fresherized Foods, in Saginaw, Texas, which has added 100-calorie Minis packs in fve favors. Finally, underscoring the need for versatility in today’s marketplace, makers of refrigerated dips and dressings also recognize diferent uses for their products beyond snacking and salads. “We have come out with new sizes for the consumer who uses our products,” Blyer says, “not only as a dressing, but also as a marinade.” PG

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Frozen & Refrigerated

Ethnic Foods

Taste the World The latest international cuisine offerings help retailers and consumers transcend barriers. By Bridget Goldschmidt

afé Spice, a New Windsor, N.Y.-based company whose Indian meals and appetizers span quick-service restaurants and kiosks, foodservice, and heat-and-eat selections at retail, has what President and Co-owner Sameer Malotra characterizes as “a special relationship with Whole Foods Market.” In fact, the Austin, Texas-based natural food retailer “has been instrumental in helping us develop many of our products,” notes Malotra. Recent examples of those products include innovative takes on its accustomed fare — four Indian-style soups from Culinary Director Hari Nayak, and four naan sandwiches — as well as

an intriguing foray into Mexican cuisine, with the introduction last fall of Beef Tamales with Charro Beans and Chicken Tamales with Charro Beans, both in 16-ounce packaging. Rollouts this spring will include extensions of Café Spice’s Small Bites and vegan lines. Malotra attributes the launches to “increased diversifcation in the ethnic foods arena. Just as Italian foods evolved from Neapolitan pizzas and spaghetti in tomato sauce to specialties from the Bolognese and Tuscan regions, Indian foods will expand from generic curries into other dayparts and tastes. … Same with Hispanic foods — we’ll see fewer enchiladas and tacos, and more tamales, pozoles and molés, and foods of Peru, the Caribbean and the Yucatan Peninsula.

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

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March 2015 | progressivegrocer.com |

Frozen & Refrigerated

Consumers are eating world cuisine flavors at restaurants and food trucks, and want the same options for their freezer.” —Jack Acree, American Halal Co.

Ethnic Foods

Café Spice is on top of both of these trends with our increasing variety of Indian foods and the introduction of our new Hispanic line of products.” But Café Spice isn’t the only company to move beyond its usual niche in a bid to gratify consumers’ evolving global palates. American Halal Co., the Stamford, Conn.-based manufacturer of Safron Road frozen entrées and chicken nuggets, among other products, ofers not only Indian-favored options suggested by the brand name, but also items from other trending cuisines. “We are quite excited to be launching four new Mexican entrées in April,” says EVP Jack Acree. “In typical Safron Road style, we are adding premium Nuevo Mexicano ingredients, such Oaxaca cheese, Nixtamal tortillas, Poblano peppers, etc., to set ourselves apart from the current oferings on the market.” Further, the company’s “Korean entrées are growing very fast, and we still see a lot of traction in the Tai category,” notes Acree. “Te growth of Safron Road’s world cuisine oferings, plus that of other more traditional ethnic brands, point to two trends,” he continues. “First, consumers overall are tired of the same thing, even if it’s packaged in a new way, say, with steam technology or in a bag. Tey are eating world cuisine favors at restaurants and food trucks, and want the same options for their freezer. Second, there is a whole group of young shoppers entering the market, and they are much more adventurous. Retailers need to show relevancy to these shoppers now, or risk losing them forever.”

Kicking it up a Notch Also in common with Café Spice, companies are goosing up traditional oferings to keep in step with shoppers’ shifting food priorities. “From [our] own research, consumers are demanding bolder favors, healthier products and more regional and international ethnic dishes — the same ones they’re seeing on TV, reading about and experiencing at restaurants,” afrms David Weinberg, VP of marketing at Santa Fe Springs, Calif.-based Day-Lee Foods Inc., maker of the Crazy Cuizine line of frozen pan-Asian meals. “To meet these consumer demands, Crazy Cuizine has launched a new line of products called Crazy Cuizine International Favorites,” continues

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

Weinberg. “Te frst three products introduced in this line — Beijing Broccoli Beef (Chinese), Garlic Chicken & Noodles (Vietnamese), and Chicken Tikka Masala (Indian) — are popular Asian entrées, all ‘kicked up a notch’ with bolder favors. Tey’re also healthier, with steamed chicken, vegetables, rice or noodles, and lighter, healthier sauces. Tese are just the frst three products, as Crazy Cuizine is expanding beyond [the cuisine of] northern Asia into more unique, global oferings.” For its part, Beaverton, Ore.-based Reser’s Fine Foods has come out with three bulk salads available in 5-pound containers for supermarket deli departments: Korean Beef Noodle, made with angel hair pasta with steak strips in a sweet and spicy Korean-inspired vinaigrette; Curry Ginger Couscous, featuring durum wheat couscous, garbanzo beans and raisins tossed in a light honey, lemon juice and ginger dressing; and La Fiesta Bean Salad, a Southwest-inspired four-bean and roasted-corn salad with a serrano chile lime dressing. “Te world has gotten smaller — there is less isolation and more awareness of other cultures and ethnic-inspired foods,” asserts Brenda Killingsworth, Reser’s trade marketing manager. “Consumers are more adventurous, especially Millennials, who are willing to try many more types of foods. While consumers still seek out foods they’re familiar with, they are willing to try new spices or an ethnic twist on an existing product.”

Convenience Counts Along with variety and health, convenience is unsurprisingly a major factor in consumers’ choice of frozen and refrigerated ethnic products. “Many of these traditional ethnic recipes can be challenging to make from scratch if you’re not familiar” with them, points out Day-Lee’s Weinberg. “Buying ethnic dishes in the frozen aisle allows consumers to enjoy the same delicious and exotic favors they would fnd at an authentic … restaurant, from the comfort of their own home.” He notes that the frozen and refrigerated versions of “these dishes are more convenient, quick to make, and a better value than restaurants or takeout.” “Consumers continue to prefer foods that ofer convenience, quality and great value,” agrees Rachel Cullen, president and CEO of Dinuba, Calif.-based

Ruiz Food Products Inc., maker of Mexican-style frozen meals and snacks under the El Monterey brand. “Tis same consumer is also excited about trying new favors, textures and heat levels.” “Frozen ethnic foods allow consumers to be their own chefs without having to buy all the ingredients and do all the preparation,” observes Julie Henderson, VP communications for the Harrisburg, Pa.-based National Frozen and Refrigerated Foods Association (NFRA). “Frozen foods allow consumers to take risks trying ethnic foods without the potential waste.” One such convenient product is the refrigerated Wok Me Up collection from Garden Grove, Calif.-based House Foods America Corp., “a product that combines cubed tofu and sauce in one … package,” explains Yoko DiFrancia, the company’s manager, PR and marketing. Tis month, House is introducing a favor extension, Garlic Stir-fry, to the product line, and at presstime planned to cross-promote Wok Me Up with an as-yet-unannounced cut-veggie brand.

Tried and True Getting consumers to buy frozen and refrigerated ethnic foods often means enticing them to try the product beforehand. “We do a lot of work around sampling and demoing to really let our consumers taste and experience the authenticity and uniqueness of our products,” notes Jessica Ancheta, assistant brand manager for Hayward, Calif.-based Columbus Foods, best known for its Old World artisan specialty meats, whose newest product is the ready-to-bake refrigerated Pizza Naturale line. “Making in-person visits to demonstrate our products at the retailers we work with has proven to be an efective strategy,” afrms Payal Malhotra, Café Spice’s VP, adding that the company and Whole Foods “are planning a national promotion … focusing on hot bars featuring Health Starts Here items, exclusive recipes developed with their global chef that ft Whole Foods’ healthy-eating criteria.” Other manufacturers that have formed synergistic partnerships to bring products to the public’s attention include House Foods. “Currently, we’re running a promotional campaign with Doraemon, Japan’s most beloved anime character, to promote healthy eating habits and heighten tofu awareness with a younger audience,” says DiFrancia. “Te campaign includes branded

tofu packaging, billboard and wrap-up bus ads, event participation such as the Asian American Expo in L.A. and Japan Week in New York, and a sweepstakes promoted through our website and Facebook page.” Outreach via social media also plays a role in Day-Lee’s marketing strategy, according to Weinberg, along with shelf talkers, trade promotions (“Buy a Crazy Cuizine entrée, get a free potsticker”), and recipe and meal suggestions on the company’s packaging, website and Facebook page. Some companies, meanwhile, have chosen to direct at least some of their promotional and merchandising eforts to consumers belonging to the nationalities that would traditionally eat their oferings. “Retailers will fnd success in marketing and merchandising ethnic frozen and refrigerated foods as convenient, pre-portioned meals spanning a variety of cuisines, while focusing on the right target markets,” observes NFRA’s Henderson. “It’s not enough anymore for grocery stores to just lump the ‘ethnic food’ together on a grocery aisle; more can be done for successful merchandising.” Goya Foods, for one, has taken this approach with its frozen Latin American items. “We … had a campaign aimed [at] the Central American market, called Sabor Sin Fronteras (Flavor Without Borders), including corn tamales, which are made of 100 percent corn and are authentically Salvadoran, being produced there,” notes Joe Perez, SVP of Secaucus, N.J.-based Goya, whose latest Hispanic oferings in the frozen section include two varieties of steam-in-bag rice and beans. Perez adds that Goya has run similar marketing campaigns for other frozen items, including arepas, churros, ripe plaintains and yuca (cassava), although he notes that such products also “add an international fair for the general-market consumer.” PG

Frozen and refrigerated ethnic dishes are more convenient, quick to make, and a better value than restaurants or takeout.” —David Weinberg, Day-Lee Foods

For more on frozen and refrigerated ethnic foods, visit Progressivegrocer.com/frozrefrigethnic.

March 2015 | progressivegrocer.com |

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2015 Retail Seafood Report

Flooded With Possibilities

Following a year of respectable performance, retailers have a bounty of opportunities to further net sales with health- and convenience-seeking shoppers. Analysis by Meg Major | Research By Debra Chanil

he recent report from the 2015 Dietary Guidelines Advisory Committee strongly reafrming seafood’s position as one of the healthiest options in the American diet bodes swimmingly for retail seafood departments, which are faring respectably — albeit with perpetual room for improvement — according to results of Progressive Grocer’s 2015 Retail Seafood Report.

Indeed, nearly 60 percent of PG’s 2015 retail seafood survey executive panelists indicate sales gains for the 12 months ending November 2014, refecting an overall sales gain of 4 percent, which is all the more impressive considering seafood is one of the average supermarket’s most shrink-challenged, labor-intensive fresh departments. Another telltale sign of calmer retail seafood sales waters is the nearly 12 percent of respondents who report decreased sales, a number much lower than hisorically posted. March 2015 | progressivegrocer.com |

2015 Retail Seafood Report Nevertheless, a handful of supermarket seafood execs responding to this year’s study seemed fummoxed by the fuctuating sales trend registered in the past year. As one retail panelist noted: “Maintaining strong seafood sales in light of higher costs has been a real challenge. Seafood demand was trending higher, but economic factors in 2014 pushed our stores’ shoppers to other proteins. Maintaining fresh seafood as a regular meal option is becoming more of a challenge.” Results for PG’s signature seafood study were once again assembled from direct input by national, regional and independent meat and seafood category leaders, who were asked to spout of on performance and operational tallies recorded over the past year, alongside observations and projections regarding what they foresee unfolding for the balance of the year. To that end, when asked to forecast how fresh seafood sales will progress in the near term, a healthy two-thirds of panelists (70 percent) anticipated stronger gains with more seafood-seeking consumers. Tis more buoyant outlook was further shored up by a slim 5 percent who foresaw potential fresh seafood sales declines in the year ahead, along with the 25 percent who anticipated no changes in either direction.

seafood dePartment sales Performance 12 Months Ending 11/30/2014

28.6% 11.9%

decreased

Projected for total 2015 24.4% 4.9%

Increase

70.7%

decrease stay the same

Source: Progressive Grocer Market Research, 2015

Recent recommendations from the 2015 Dietary ietary Guidelines Advisory Committee (DGAC), reaffirming ming seafood’s position as one of the healthiest dietary options, ptions, portends further encouraging news for perishable hable category leaders at retail. Specifically addressing the ongoing confusion about the presence of mercury in seafood, od, the DGAC’s high-visibility report highlights that for the majority of all fresh-fish species,, “neither the risks of mercury nor organicc pollutants outweigh the health benefits of seafood d consumption,” which seafood industry trade association ociation leaders believe will go a long way toward helping ping put the mercury myth to rest. On the topic of sustainability, John Connelly, onnelly, president of the Washington, D.C.-based d National Fisheries Institute, says the governmental al advisory group’s advice further validates the need d for both wild-caught and farm-raised selections from wellmanaged fisheries “to supply enough seafood afood to support meeting dietary recommendations.” ons.”

Increased

stayed the same

Consumer Demand Among the key highlights of this year’s study is an upto-the-minute look at overall seafood demand trends, which are underscored by the delicate balancing act category executives regularly undertake to concurrently

Dietary Advisers Advocate More Seafood

59.5%

| Progressive Grocer | Ahead of What’s at’s Next | March 2015

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2015 Retail Seafood Report

conSumer demand

increaSed

decreaSed

Stayed the Same

In the past year, here’s how consumer demand has changed: Smaller portionS/pack SizeS Free-From productS (antibiotic-free, hormone-free, msg-free, additive-free, etc.) u.S. wild-caught SeaFood Value-added productS (marinated, kebabs, gourmet burgers, loaves, meatballs, etc.) imported Farm-raiSed SeaFood u.S. Farm-raiSed SeaFood imported wild-caught SeaFood

68.2% 5 4.5

0.0%

31.8%

13.6

25.0

45.5

9.1

36.4

43.2

18.2

38.6

34.1 29.5 20.5

20.5 6.8 18.2

36.4 40.9 45.5

Source: Progressive Grocer Market Research, 2015

problemS Facing meat/SeaFood department Rated on a scale of 1-6, where 6=extremely serious

attracting more ShopperS to department retail pricing attracting new department StaFF training/motiVating department StaFF to engage with cuStomerS proFitS getting ShopperS to trade up cuStomer conFuSion/perception nutrition labeling Food SaFety

current

year ago

4.11 4.08 3.95

4.14 3.86 4.02

3.89 3.73 3.69 3.59 3.35 3.32

3.94 3.72 n/a 3.52 3.67 3.35

Source: Progressive Grocer Market Research, 2015

ofer value-priced oferings and premium stocks, the latter of which are becoming increasingly important to health-minded Millennials. When asked how consumer demand has changed, smaller portions/pack sizes increased in clout as the foremost department driver, as cited by more than two-thirds (68.2 percent) of panelists. Nary a panelist indicated decreases with smaller packs, while the remainder (31.8 percent) reported on-par results. U.S. wild-caught seafood also came on strong, with 45.5 percent of retail seafood leaders reporting an increase in consumer demand, while value-added products, such as marinated oven- and grill-ready products, stufed entrées, and single-serve portions, gained traction among 43.2 percent of seafood survey panelists. Imported farm-raised seafood and U.S. farm-raised seafood remained popular with 37.5 percent and 29.5 percent of annual retail

what iS the moSt SeriouS problem Facing SeaFood departmentS? Rising retail prices, lack of adequate display space and quality-first suppliers, shrink, and a shortage of qualified, motivated seafood department staff were the recurring issues cited among the most problematic issues plaguing retail seafood executives polled in PG’s 2015 Retail Seafood Report. Found below is a sample of verbatim responses shared by the seafood study’s panelists, who were asked to answer this open-ended question: What is the single most serious problem facing your seafood department?

Consumers’ perceived fears of seafood preparation Customers not purchasing imported products Escalating retails Food safety Lack of space for display

Availability of quality products at manageable prices Costs of product, high retails

Lack of suppliers Prices of fish, and availability of key products

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

Prices of wild-caught seafood and quality seafood that have gone through the roof! Prices for certified sustainable catches Recurring price increases that find seafood rapidly becoming a luxury item Securing quality talent Shrink, as usual

WANT BETTER MARGINS? USE BETTER BAIT. Find your supplier tod

t Buy.louisi n se food.com

2015 Retail Seafood Report seafood study panelists, respectively, while imported wild-caught seafood made inroads with slightly more retailers (20.5 percent).

EffEctivEnEss of Promotional activitiEs

Rated on a scale of 1-6, where 6=most effective avEragE rating

Product dEmos/samPling EvEnts social mEdia Point-of-PurchasE information cross-Promotion Within thE storE flash salEs dirEct mail tEmPorary PricE rEductions onlinE markEting Bogos mix-and-match BundlEs (i.E., four for $20)

5.13 5.10 4.03 3.83 3.58 3.53 3.28 3.13 2.78 2.60

Source: Progressive Grocer Market Research, 2015

Effectiveness of Promotional Activities Supermarket seafood directors face a recurring challenge with eforts to alter the seasonal promotional calendar in favor of a more consistent year-round game plan. Nonetheless, there’s no understating the frepower that wellorchestrated seafood promotions give to retailers’ bottom lines and fresh image. Take Hannaford Supermarkets’ recent Super Bowl tie-in with the Tampa, Fla.-based Gulf Seafood Marketing Coalition (GSMC), which aggressively promoted wild-caught Gulf Coast shrimp via door clings, counter cards and recipe cards in all 185 Hannaford stores in Maine, Massachusetts, New Hampshire, New York and Vermont. Te late-January promotional partnership was the second such efort undertaken by GSMC and the Scarborough, Maine Maine-based based Delhaize America banner. Te two also

Seafood Department Category P Performance f Increased seafood prices drove dollar sales up at the expense of volume sales across the seafood department, according to Nielsen Perishables Group’s latest 52-week research ending Dec. 27, 2014 (see adjacent chart on page 81). In fresh seafood (which accounts for 79 percent of seafood department dollar sales), increased average retail prices boosted dollar sales of the two largest categories — fin fish and shrimp — but negatively impacted volume sales. Fin fish average retail pricing increased 7.4 percent, which helped boost average dollar sales, while volume sales dipped 2.4 percent. Shrimp posted the department’s most dramatic retail price increase, 21.4 percent over the previous year, which helped bump average weekly sales upward by 5 percent, at the expense of a 12.5 percent decline in volume sales. Prepared seafood, which accounts for an average 17 percent of department sales, and other seafood items (estimated to contribute 4 percent to total department sales) maintained static retail prices, with the exception of dips and spreads. However, each of the other seafood/prepared seafood categories maintained or increased volume sales, with the exception of the other prepared seafood category.

What othEr Promotional activitiEs havE BEEn EffEctivE for your sEafood dEPartmEnts in thE Past yEar? Following is a list of top verbatim responses PG’s 2015 Retail Seafood Report panelists provided when asked: What other promotional activities have been effective for your seafood departments in the past year? One-day sales events Four for $20, which is proving to be highly effective Bundled family recipe meals cross-promos (i.e., buy X item, get Y item free) In-store radio advertising Sampling events are very effective Through great customer service, great quality and a clean store, the customer ends up being our greatest promotion, as they talk among themselves and their neighbors of what a great store we have Three-day specials Our store-made, ready-to-cook items are doing extremely well It’s not rocket science … it’s having good people! Themed events

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

Seafood department Category performanCe Total U.S., 52 Weeks Ending Dec. 27, 2014

Segment

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

Dollars per Store/Week

Percent Change vs. Year Ago

Volume Percent Change vs. Year Ago

$2,671 1,957 726 251

3.6% 5.0 1.2 0.0

-2.4% -12.5 -2.5 -0.6

Volume Percent on Promotion

Volume Percent on Promotion Change vs. Year Ago

Average Retail

Average Retail Percent Change vs. Year Ago

18.8% 23.4 39.9 23.3

-1.4% -2.2 -2.2 -0.9

$5.90 9.76 9.69 6.68

7.4% 21.4 5.0 1.8

108 93 32 27

-1.7 3.2 -2.8 13.6

-1.5 0.8 5.7 2.0

19.2 17.8 20.4 31.1

-0.3 0.2 0.5 2.6

2.40 4.91 3.84 7.80

1.0 3.6 -7.0 12.8

1,062 135 12

2.9 5.0 13.6

-2.2 4.3 5.1

24.3 26.6 17.1

-1.2 -1.2 1.0

6.73 2.94 7.98

6.5 1.9 9.4

Source: Perishables Group FreshFactsÂŽ Powered by Nielsen

collaborated last October during National Seafood Month. Similar GSMC promotions have been successfully leveraged with regional banners such as Demoulas Market Basket, Publix Super Markets, Roche Bros., Schnucks, Wegmans Food Markets and WinCo Foods. As revealed on the chart on the opposite page, other

successful tactics that are proving increasingly infuential for luring shoppers to the counter include product demos/sampling events, social media, POP information, cross-promotions, limited-time fash sales, direct mail, temporary price reductions, digital marketing messages, BOGOs and mix-and-match bundle packs. PG

ote: Editor’seNsecond

This is th -part e of a thre igating t s e v series in nges and e ll a the ch nities of opportu prepared rket superma rograms. food p

Shoring Up a

Valuable Area Poor consumer experience can erode high margins of deli sales. By Joan Driggs

xecution is everything: Tis adage holds particular weight in the grocery deli area, where execution is based on products, service and experience. Poor execution in the deli section, with its complex assortment of fresh and service-heavy hot and cold oferings, can make or break the shopping experience, and erode the high margins the category enjoys — margins of nearly 45 percent for the service deli, according to the Food Marketing Institute. Prepared chicken is the top-selling deli item, accounting for 28.5 percent of U.S. deli prepared food dollar sales, according to Nielsen Perishables Group.

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

Purveyor Tyson Foods commissioned extensive research to determine the consequences of failure in the grocery deli arena. Research for this article — the second in a series of three — includes fndings from two Tyson research projects, as well as Progressive Grocer proprietary research of grocery deli managers. Tyson commissioned a December 2014 survey of more than 3,000 consumers who have purchased chicken products (rotisserie chicken, fried chicken, chicken wings, chicken tenders), as well as an in-store observation study of 1,373 supermarkets across 36 retail banners. More than 40 percent of respondents who have purchased chicken products in the past three months reported problems, which were identifed as related to stafng, product and the general deli. Not

of 10 percent to 12 percent sales loss in deli, due to executional challenges. Add the erosion of loyalty and brand equity, and that number, though difcult to quantify, is too large to ignore.”

What’s the Problem? Deli shoppers identifed three types of problems: general deli (long wait time, products weren’t ready, products weren’t available or were difcult to fnd, and deli wasn’t sanitary); product (product didn’t appear fresh, wasn’t tasty, wasn’t of good quality, was overcooked/ dry, was undercooked); and stafng (staf wasn’t knowledgeable, helpful or friendly, or was rude).

Deli Problems Reported General Deli Issues Product Issues Staffing Issues

42.9% 46.7 22.2

Source: Tyson Consequences of Failure Study 2015

PG’s April 2015 issue will delve more into the consequences of general deli and product issues. For this issue, the focus is on stafng.

only are lost sales at stake, but the total shopping experience can also sufer, results indicate. “Consider another business in which 41 percent of users experience a failure in three months of usage: In what business would that not have a negative impact?” asks Eric Le Blanc, VP of marketing, deli and convenience store at Springdale, Ark.-based Tyson Foods. “Te study shows that failures in execution result in reduced future visitation, and that’s lost sales. But it also shows erosion in the perceptions of the store’s brand. Retailers work hard to build shopper loyalty so every transaction isn’t about price. Failure to meet shopper expectations in deli works against those eforts. It has an impact on store visits and overall basket ring, not just deli sales. From a dollar perspective, retailers are typically sufering from a headwind

Staffing Matters While ranking third in terms of reported problems, staf issues are likely to have the most profound impact on shopper behavior. Staf problems are identifed as staf wasn’t friendly (cited by 46.7 percent of respondents), staf was rude (22.2 percent), staf wasn’t helpful (7.3 percent), and lack of staf knowledge (cited by 6.2 percent of respondents). While some of these issues are reported by fewer than 10 percent of shoppers, the emotional impact of human behavior can have a profoundly positive (“you made my day”) or negative (“she was rude to me”) reaction. Stafng issues in the deli are more likely than other problems to have a ripple efect on the total shopping experience. Prepared foods ofer the Continued on page 86

March 2015 | progressivegrocer.com |

Tyson Deli, Inc.

Fail-safe Deli Strategies Problems are inevitable in any service industry, and the deli department is no exception. In fact, a new study from Carbonview Research suggests that 4 out of 10 customers experienced some type of problem while purchasing prepared chicken products from their grocery’s deli during the past three months. But the efects of these problems can be dramatic, ranging from shoppers complaining to management to permanently bypassing the store’s deli for prepared foods.

How often do delis fail? % shoppers reporting no problems

59%

% shoppers reporting problems

41%

Problems are a problem Shoppers who had a problem in their prepared foods shopping experience said they would: Continue to shop for prepared foods at that store Stop shopping for prepared foods at that store for a short time Stop shopping for prepared foods at that store for a long time Stop shopping for prepared foods at that store permanently

On average, 53% of deli shoppers who have had a problem in their prepared foods shopping experience will stop shopping for prepared foods at that store for at least some period of time.

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Tyson Deli, Inc.

Te repercussions from bad experiences at the deli counter can also surface in more subtle changes in shopper behavior: Deli prepared foods shoppers who have had a problem show drastic reductions on all drivers of purchase intent, creating a strong negative impact on pre-shop attitudes and behaviors.

Drivers of purchase intent Shoppers who have had a problem

Shoppers who have had no problem

Most of the problems reported by shoppers fell into one of three areas: stafng, product, or general deli problems. Long wait time, a general deli issue, was the most commonly reported problem, along with product that was too dry, not fresh, or not available. Stafng problems are the least reported, according to the Carbonview research, but problems with staf tended to have the most negative efect on shoppers: Tese customers also reported product and/ or general deli problems more often and were most likely to stop shopping at their grocery’s deli for a short period of time.

Problem areas % of shoppers reporting

General deli issues Product issues Staffng issues

42.9% 46.7% 22.2%

No matter what types of problems your deli shoppers are experiencing, it’s obvious that defning and then eliminating these negative encounters has the potential to pay of in a number of areas, from higher sales to more frequent shopping trips to overall customer satisfaction. With so many competing choices for convenience meals, your deli department can’t aford to ignore the consequences of failing to address your shoppers’ most pressing problems.

Research data provided by Carbonview Research, 2015

Turn to Tyson Tyson Deli can support you with products, insights and tools to help grow your deli business. Contact Eric LeBlanc at (800) 248-9766 for more information.

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Continued from page 83

greatest degree of convenience and are often a store’s point of diferentiation, but data indicate that the overall experience for many shoppers depends on their engagement in the deli area. Among consumers reporting a staf problem, their level of satisfaction with their prepared food shopping experience was 33.8 percent, compared with an overall shopping experience of 38.5 percent. Shoppers who reported any problem rated their overall shopping experience at 65.1 percent, where 100 would be perfect. Shoppers who didn’t have a problem gave their overall shopping experience a rating of 82.4 percent. In addition to shopping experience, stafng issues have an impact on prepared food purchase intent, as shoppers reported low percentages of intent across a number of drivers. Shoppers encountering stafng issues are likely to punish a retailer by not purchasing. Nearly 40 percent (38.5 percent) will stop visiting for a short period of time, 9.4 percent will stop for a long period of time, and 6.8 percent will stop permanently. Tat 53 percent of “punishers” translates to 21 percent — one out of every fve — total shoppers. In the hypercompetitive world of grocery retail, consumers shop a number of stores. Te deli area, which ofers an opportunity to showcase fresh, signature oferings, can positively set a retailer apart from the competition by ofering products shoppers might not fnd anywhere else. Deli shoppers also make purchases elsewhere in the store, as shoppers want to make the most of any store visit. If the deli experience isn’t great, it will drive shoppers to another retailer that ofers a better experience, and with that loss from the deli goes a

lot of other purchasing power. While 56.6 percent of shoppers who reported a problem with their deli experience remain likely to shop that retailer, those not reporting a problem are far more likely to continue to shop the retailer — 80.9 percent. Unfortunately, retailers might not know they’re being punished. Of those who experienced a problem during the past three months, 80 percent won’t report the problem. Tis is contrary to what deli retailers tell PG: “Trust me, they let us know,” and “It’s easy to track in my store, as [shoppers] let us know.” Te remaining 20 percent of consumers of shoppers who will report a problem to a store associate. Nearly 90 have had a problem percent of deli managers said store associates report in the deli will stop shopping for a incidents of shopper dissatisfaction to their superviperiod of time. sor, 76 percent of respondents engage in periodic inspections of products or display cases, and twothirds reported that supervisors observe random shopper transactions. Tese problems are largely invisible to corporate-level management. Measurable strategies, including comment cards, coupons ofered to customers, mystery shoppers and shopper surveys, are employed by fewer than half of responding retailers. Even if addressed by an associate dedicated to delivering the best customer service, problems are most often considered to be one-of situations. Without careful tracking of these encounters, it’s likely that no pattern of failure will emerge, much less make it up the corporate The Impact of Issues on Intent to Purchase chain. Without measurement, problems can’t be addressed in a General Product Staffing strategic manner, and unreported Deli Issues Issues Issues problems could hold the key to a Percent Likely to Purchase systemic issue for a retailer.

53%

I am Proud to Serve My Friends and Family Enjoy Likely to Purchase Next Time I Like the Quality Frequently Purchase Like the Convenience

40.4% 44.2 41.1 43.8 37.4 50.8

29.4% 31.3 32.5 32.1 31.8 44.3

Source: Tyson Consequences of Failure Study 2015

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

37.3% 36.9 37.7 38.7 37.2 43.9

Retailers Acknowledge Staffing Issues Retailers gave themselves fairly high marks in terms of the quality and taste of oferings, and having friendly associates, with nearly 90 percent of retailers agreeing or strongly agreeing that at all times their store ofers good-quality and good-tasting products, and that deli associates demonstrate friendliness with every shopper. But numbers slipped in terms of stafng issues, including nearly 78 percent agreeing that “the wait time for each

shopper is always reasonable,” and 64 percent agreeing that “the deli associates in my stores have an appropriate level of product knowledge to answer shopper questions regarding the products we ofer.” Similarly, when it came to training, 85 percent of retailers believe they’re providing excellent customer service training, but those numbers continued to dip down to just 60 percent for product knowledge. in associates: “More training on product knowledge”; “Train properly to minimize staf turnover”; “More training and retraining of associates.”

Retailers Rate the Effectiveness of Training Programs Customer Service Customer Engagement Cleanliness Product Safety Operational Efficiency Food Merchandising Product Knowledge

84.7% 82.8 82.8 79.8 64.6 61.6 59.2

Source: Progressive Grocer, 2015

Retailers reported a lengthy wish list for improving staf issues, including improving customer service, training and communications. While many consider it a challenge to fnd engaged and mature employees, many believe it’s up to the store to invest

There’s Power in POS PG’s February 2015 Deli Insights installment focused on consumers’ pre-shop planning and the degree to which supermarkets factor in mealtime solutions. Digital platforms, and social media in particular, could play an effective role in reaching out to consumers ahead of store visits to let them know of meal options at the ready for harried shoppers. Retailers could also be making better use of in-store signage to alert shoppers to meal solutions available in the deli section. Grocers are doing a spotty job at best of driving awareness and trial. Of the 1,373 store visits, which were focused on chicken, POS was observed in 49 percent of stores to promote fried chicken, and 46 percent for rotisserie chicken. However, popular items, including wings (24 percent) and tenders (17 percent), saw very little in the way of promotion.

Solutions in Store Retailers’ perceptions are corroborated by Tyson’s in-store observation study of 1,373 supermarkets across 36 retail banners in November-December 2014. Te study found no correlation between stafing levels and performance versus demand index. While maintaining quality customer service is clearly important, the evidence doesn’t suggest more staf equals greater sales performance. Appropriate stafng is key to success in deli retail, but it’s not as much about the number of associates as it is about well-trained, informed employees. Tese individuals can ensure product preparedness, display, and the critical element of helpful and friendly interaction with customers. Rather than adding more work hours in the deli, retailers are better served by investing in the training of associates who work in this valuable section of the store. Customer satisfaction will win repeat purchases, and more likely a greater number of customers, as happy customers share their positive experiences. Ten again, unhappy customers also share their experiences. PG

Packaging is a simple way to promote products and has proved helpful in illustrating the quality and freshness of rotisserie chicken, in-store observations demonstrate. In 75 percent of visits, store packaging communicated freshness, while appearance was featured 83 percent of the time. With fewer than 50 percent of shoppers making deli prepared food purchases weekly or more often, according to ICC/Decision Services, in-store signage and promotional materials go a long way in driving the path to purchase. First, connecting with consumers ahead of the shop is critical, and those same messages shared pre-shop should be visible as soon as shoppers enter the store. If deli prepared food offerings aren’t part of the shopper’s consideration set, the battle is already lost. Driving shoppers to the deli is the obvious first step, but execution takes place at the destination.

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

better. We’re not saying our olive oil is better than any other on the supermarket shelf. That’s for you to decide. For us, this little word is a challenge. It’s what inspires us to never stop looking for ways to improve. Better is the reason we harvest our olives so that they never touch the ground. Better is why we replaced the typical dribbly pourer top with a more precise Pop-Up Pourer. These innovations may seem like little things. But sometimes, it’s the little things that make all the difference.

the little things are everything.®

Our latest little innovation:

OLIVARI AUDIO COOKBOOK Hear it in your kitchen today.

Fresh Food

Produce

Big Brand

Boom The produce industry’s most dynamic era is right now. By Jennifer Strailey

ot long ago, few would have envisioned consumers seeking out a particular brand of avocados at the supermarket, let alone a 30-second spot advertising Avocados from Mexico during the Super Bowl. Nor would they have predicted that McDonald’s would roll out Happy Meals featuring a whole, fresh-fruit option, namely Cuties, from Pasadena, Calif.-based Sun Pacifc, which is what scores of children and their parents now call mandarins. “Te majority of consumers think of Cuties as they do Jell-O or Kleenex — the name is synonymous with mandarins,” asserts Dick Spezzano, of Spezzano Consulting Service Inc., in Monrovia, Calif. “All mandarins are Cuties. Tat’s true branding.” Sun Pacifc has since launched Mighties, a similar branded campaign for kiwifruit. “We’re seeing more and more of that,” Spezzano says. “Most new items in produce are not only branded, but packaged — berries, tomatoes — they’re all packaged. It’s part of their go-to-market strategy. Packaging provides the room to promote and brand the product, as well as control volume.” Spezzano further notes that the bigger budgets of some produce companies have ushered in a new era of how consumers perceive and shop for produce. He points to Pom Wonderful and Wonderful Pistachios — two breakout brands from Roll

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

Nonfoods

Global, in Los Angeles, parent company of Paramount Farms — that have turned commodities into brands with enormously healthy appeal. Indeed, Wonderful Halos launched the largest marketing campaign to date in the citrus industry in 2013, committing to spend a record $100 million over fve years, with $20 million spent the frst year alone. And now a new campaign is underway that, according to Todd Putman, chief commercial ofcer of Bakersfeld, Calif.-based Bolthouse Farms, “will change the way people think about fruit and vegetables.” “Our very specifc intent is that we need more brands, innovation, and thoughtful ways of considering consumers and how they consume produce,” says Putman, adding that Bolthouse is part of a group led by the Partnership for a Healthier America (PHA), which is working on a soon-todebut fruit and vegetable campaign “that will feel similar to the Got Milk? campaign,” he notes (see Progressivegrocer.com/brandedproduce for details). Washington, D.C.-based PHA, which is devoted to solving the childhood obesity crisis, was

founded in 2010 in conjunction with, but independent from, First Lady Michelle Obama’s Let’s Move! initiative. Bolthouse believes that encouraging Americans and their children to eat more produce is integral to that solution. “Per capita consumption of produce has been fat to down. People are not eating enough fresh produce,” says Putman. “But the consumer is radically changing: 2 percent to 4 percent of Baby Boomers are vegetarians, and 14 percent to 18 percent of Millennials are vegetarians. Tere’s a wave of people moving to a plant-based diet, and that wave is coming to the produce department.”

Our very specific intent is that we need more brands, innovation, and thoughtful ways of considering consumers and how they consume produce.” —Todd Putman, Bolthouse Farms

March 2015 | progressivegrocer.com |

Fresh Food

We made the commitment to focus on kids as part of our branding initiatives.” —Tony Freytag, Crunch Pak

Produce

ing the health and needs of the nation’s youngest shoppers by delivering branded products that entice kids and their parents to add more fresh fruits and vegetables to their diets. Crunch Pak was one of the companies leading the charge. “We made the commitment to focus on kids as part of our branding initiatives,” says Freytag. Te company’s co-branding eforts with Disney, Marvel Entertainment, the National Basketball Association, and Major League Baseball’s Yankees have resonated with kids across the country. “We are committed to making healthy eating more fun for kids,” asserts Freytag. “Our labels and products vary to create excitement on the shelf. Tat creates interest for the shopper and generates repeat business.” One of the produce industry’s most signifcant branding eforts related to kids has been the Sesame Street Eat Brighter! campaign, forged by

Both produce suppliers and supermarkets are poised to ride this wave to increased sales, provided they deliver the healthful, convenient and favorful foods consumers seek. “We need to think about marketing and branding in much the same way larger food folks have been doing for years,” advises Putman. Tony Freytag, SVP sales and marketing for Crunch Pak, in Cashmere, Wash., agrees: “Te move towards more pre-packaged, value-added convenience produce is changing the branding landscape as produce moves out of being an interactive purchase experience of bulk produce and moves closer to packaged food marketing.” With innovation in mind, Bolthouse recently introduced Bolthouse Farms Kids, a line of refrigerated fruit- and veggie-based snacks, including Smoothies, Fruit Tubes and Veggie Snackers. Putman notes that in the next several months, Bolthouse will launch more products that “fall along a similar line.”

Brands That Speak to Kids Increasingly, produce companies are consider-

ONLY WHOLESUM USES A

THERE’S A REASON

FARMTOFAMILY APPROACH TO

WE’RE ONE OF NORTH

PRODUCE, BUILT BY THREE

AMERICA’S FASTEST

GENERATIONS WORKING TOGETHER.

GROWING ORGANIC PRODUCERS.

AS A FAIR TRADE CERTIFIED™ PARTNER, WHOLESUM

HEALTHY LIVING IS NOT JUST

WE RECOGNIZED THE IMPORTANCE OF SUSTAINABLE

ENSURES THE WORKERS WHO GROW OUR PRODUCE

WHAT WE DO; IT’S WHO WE ARE.

FARMING PRACTICES DECADES AGO. THAT’S WHY

RECEIVE A PORTION OF OUR PROFITS. ALONG WITH

IT’S A DIFFERENCE YOU’LL TASTE IN OUR

WE DO OUR OWN COMPOSTING TO REPLENISH THE

EDUCATION AND HEALTH CARE, THEY ALSO GET FREE

VEGETABLES: A COMMITMENT THAT STARTS AT THE

SOIL, USE SOLAR ENERGY TO HELP POWER OUR

DAYCARE AND TEACHERS FOR THEIR CHILDREN, AND

SOIL AND ENDS WHEN YOUR FAMILY LEAVES THE

WAREHOUSE AND RECYCLE UP TO 40% OF

WITH COMMUNITY SUPPORT.

TABLE HAPPY.

THE WATER AT OUR FARMS.

W HOL E S U M H A RV E ST F OR W HOL E S OM E FA M I L I E S

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

•

V I S I T W H O L E S U M H A RV E S T.C O M

Sesame Workshop and Produce Marketing Association (PMA) in 2013. Los Angeles-based Giumarra Nogales will ofer seedless Nature’s Partner watermelon from Mexico featuring Sesame Street Eat Brighter! artwork later this month. High in vitamins C and A, watermelon is a healthful, kid-friendly fruit. Each individual Nature’s Partner watermelon will include a peel-of label with information about the fruit and a recipe for a cupcake-shaped watermelon snack. “We are ofering large Sesame Street Eat Brighter! bins as an added beneft for our retail partners, and they really stand out at store level,” says Gil Munguia, division manager of Giumarra Nogales. Te high-graphic bins feature Big Bird and Elmo, as well as the Nature’s Partner brand identity.

“Convenience “C i gives ives branded produce a major advantage over bulk,” afrms Simpson. “Consumers want more produce in their diet, but they are busy. Ready Pac’s frst-ever vegan Bistro Bowl — the Organic Powerhouse Grains Bistro Bowl — is an example of how we’re giving consumers the freedom to make healthy choices.” Te Organic Powerhouse Grains Bistro Bowl features a blend of organic spring mix, topped with organic quinoa and wheat berries, organic sliced carrots and red cabbage, organic raisins, and crunchy sliced almonds, with a zesty orange vinaigrette dressing.

Private Label Store brands are also trending like never before. “A lot of existing space has been allocated to private label,” notes Spezzano. “In center store, private label increases margins, but not necessarily in produce, where private label replaces an existing brand,” he adds. One of the drivers of the private label trend, according to Spezzano, is that Wall Street looks at supermarkets with more private label products as more successful. Tristan Simpson, chief communications ofcer at Ready Pac Foods Inc., in Irwindale, Calif., also sees movement on the private label front. “Hispanic consumers in particular are becoming a major purchasing force in the ever-changing retail landscape and are infuential in how retailers drive brand engagement,” she notes. “Mintel reports in its GIORGIO ORGANIC MUSHROOMS. 2014 ‘Attitudes Toward Private Label’ report that store brands resonate THE PREMIER BRAND, NATURALLY. with loyal Hispanic shoppers, who are more likely than other groups to Giorgio organic mushrooms are America’s favorite. We grow our mushrooms share their positive experiences by in a fully organic environment and they are certifed organic by PCO word of mouth.” (Pennsylvania Certifed Organic). In fact all Giorgio farms are MGAP “Both branded and private label are growing, but with growing consumer (Mushroom Good Agricultural Practices) certifed by the USDA. If you’re loyalty to recognized brands, branded looking to grow your organic mushroom sales, you can’t pick a better partner produce will continue to be a major than Giorgio. presence in the fresh produce section,” adds Simpson. Branded Convenience Consumers are looking for produce brands that ofer favor, nutrition and that ever-important demand, convenience.

Equal Opportunity Employer

Giorgio Fresh Co. | 347 June Avenue, Blandon, PA 19510 800.330.5711 | www.giorgiofresh.com

March 2015 | progressivegrocer.com |

Fresh Food

Branding through packaging is extremely important.” —Dick Spezzano, Spezzano Consulting Service Inc.

Produce

“Te Powerhouse Bistro Bowl gives consumers the chance to more easily incorporate health benefts of superfoods into their daily life,” notes Simpson, who adds that Ready Pac developed the product based on consumer demand for protein-rich options. “Mintel reported in the 2014 ‘Fruit and Vegetables’ report that two in 10 respondents say ‘they are trying to get more of their protein from plant sources,’ which is why we’ve expanded our oferings to include more plant-based protein sources,” she says.

Storytelling Produce doesn’t need millions in marketing dollars behind it to sell. Storytelling on packages and even a code that links to a website on a label can build a brand. “Branding through packaging is extremely important,” says Spezzano, who notes that more produce companies are investing in packaging that boosts brand recognition, carefully considering the style, colors, size of graphics and font used on their packaging. “Use packaging to promote that an item came from a small family farm, that it’s organic, that it’s nonGMO,” Spezzano counsels these companies. “Use the package to shout out those points of diferentiation.” He points to new varieties of apples that growers and supermarkets are promoting successfully. While sales in the apple category have increased slightly, dollar sales are up even more. Tis, according to Spezzano, is the result of new, more favorful apple varieties that growers are labeling efectively. “Te number of apples selling for $2.98 a pound is increasing,” he observes. “Consumers are willing to pay more for more favorful apple varieties, and we’re seeing PLU stickers on these apples, which give a little room to tell the story, or provide a web address or code on a sign that lets the consumer know where to learn more.” Additionally, companies are telling the story of their produce brands in weekly circulars. “It’s still a powerful vehicle,” says Spezzano, who adds that while Millennials don’t necessarily read circulars that come in the mail, they’ll pick them up in-store or use an electronic version as they shop the supermarket. Heirloom and Specialty Family-owned Ocean Mist Farms, Castroville, Calif.,

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

which started out growing fresh artichokes and Brussels sprouts in 1924, is now the largest and only year-round grower of fresh artichokes in North America. Last year, the company embarked on a major branding efort to spotlight the classic green globe artichoke — the original variety of artichoke brought to California in the early 1900s by Italian immigrants. As multiple new varieties of artichokes entered the market, Ocean Mist saw the classic green globe getting lost due to its vague name, lack of marketing, and not being identifed or labeled at the point of sale. To strengthen the brand identity of its artichokes, Ocean Mist began using the word “Heirloom” instead of green globes in its marketing campaigns. Te green globe is an heirloom variety because it’s a perennial plant regrown with original rootstock that dates back as far as the 1920s at Ocean Mist. In an efort to build brand awareness directly with retailers and consumers, for the frst time in 90 years, all Ocean Mist Farms Heirloom artichokes harvested were branded with a red PLU/UPC sticker to help consumers fnd the variety in stores. Ocean Mist supported the new branding by ofering sales tools to retailers, as well as launching a multifaceted promotional strategy during harvest that included display contests, radio ads, in-store point of sale, display bins, and artichoke petal inserts and direct-to-consumer promotions that told the family farm story. “Consumers want to feel a connection to the food they purchase, and brands help them to do that,” asserts Joan Wickham, of Sunkist Growers Inc., in Sherman Oaks, Calif. “Opportunities for more creative packaging, displays and point-of-sale materials in the produce department allow companies to share branding and educational information with consumers to help build this connection.” When it comes to branded citrus trends, Wickham sees the farm-to-table story, as well as specialty varieties, resonating with shoppers like never before. “Consumers are increasingly exposed to global cuisine and are open to trying new things, thereby increasing interest in specialty varieties that ofer unique taste profles, like the Cara Cara navel orange, Meyer lemons and Minneola tangelos,” she explains. In addition to a microsite, familystories.sunkist. com, featuring information about the families comprising its cooperative, Sunkist ofers customizable point-of-sale materials to retailers interested in showcasing the growers in their stores. PG

NO. 17

Leveraging potatoes to build a better image for the produce aisle

Brand Name Recall TOP MENTIONS INCLUDE

Potatoes are already high on most consumers’ grocery shopping lists when they hit the produce aisle. But the appeal of spuds can do more than just boost potato sales: Carrying tubers supported by strong branding can also improve customers’ perceptions of your produce department and increase the likelihood that they’ll shop the store again. No matter what the variety of potato, the Idaho name is by far the most-named top of mind “brand” of potato, according to exclusive new data from Carbonview Research. In fact, about half of all shoppers say they specifcally seek out the Idaho name when they’re shopping for potatoes. In addition, the association between “Idaho” and potatoes is the strongest of any of the most common food and state associations, such as Wisconsin and cheese or Washington state and apples.

Idaho

58% Russet

17% 8% Yukon Gold 5% Red 2

P O TAT O R E TA I L I N G T O D AY

NO. 17

State Conjures Thoughts of...

State Associated with Specific Produce IDAHO

Potatoes

FLORIDA

Oranges

CALIFORNIA

Grapes Avocadoes Apples

CALIFORNIA WASHINGTON

90% 89%

71% 60%

46%

Consumers Who Look for IdahoÂŽ Potatoes When Shopping for Fresh Potatoes Always look for Idaho: 13% Sometimes look for Idaho: 37%

BEHIND THE RESEARCH All data are from Carbonview Research, based on an online survey conducted in September 2014 among 1,500 consumers who were all age 18 or older, partially or wholly responsible for purchasing fresh produce for their household, and who had bought fresh potatoes within the past three months.

P O TAT O R E TA I L I N G T O D AY

NO. 17

Potato consumers judge stores by produce aisle Potato Consumption Segments and Potato Packaging

The Most Important Area in the Supermarket (% OF POTATO SHOPPERS RANKING AREA AS MOST IMPORTANT)

Bakery Deli

Non-food

10–pound bag Single potato

5–pound bag Multiple single potato

52%

Packaged goods

49% 43%

Dairy

45%

37%

35% 31%

33%

30 20

16%

16% 11%

Meat/seafood

8% 6%

5% Greatest potato Moderate potato customer customer

Mild potato customer

Lightest potato customer

Consumers Buy Fresh Potatoes an Average of 16.9 Times Per Year

36% 28%

14% 10%

Once a week or more

P O TAT O R E TA I L I N G T O D AY

Twice a month

Once a month

Once every 2 months

11%

Four times a year or less

NO. 17

The produce department is by far the most important section of the grocery store for drawing in potato consumers, with meat/seafood a distant second. And these spud shoppers are stocking up: On average, they buy enough potatoes for more than three meals each time they purchase potatoes. From heavy to light potato users, however, the most popular packaging is the 5-pound bag. For those consumers who go to the supermarket looking specifcally for Idaho® potatoes, spuds with superior quality and taste are the expectation, in addition to desirable size and appearance.

Consumers Look for Idaho® Potatoes for: High quality “As with nationally distributed brands, Idaho® potatoes are often of better quality.” High quality

24%

Taste good

20%

Just better

19%

Idaho reputation

“Good-sized tasty potatoes at a reasonable price.”

18%

Size and appearance

15% 11%

Fresh Familiarity and tradition

8% Fresh

Good for baking/ cooking

Cost/value

Grown in America

“Most of the time they are larger, and they look fresher.”

Taste

Size and appearance “Consistently good quality. Fewer potatoes with bad spots or spoilage. Nice standard size.”

“They taste good and have a fluffy consistency.”

Familiarity and tradition Idaho and Grown in America

“I guess because Idaho is the kind of potato my mother brought us up on . . . it always seemed to be the best in my mind.”

“I perceive Idaho to be the potato capital.”

P O TAT O R E TA I L I N G T O D AY

NO. 17

Idaho appeal: More positive produce department perceptions Impact of Features on Making Produce Department Desirable 86% 73% 58% 28% 16% Freshest produce

Variety

Rarely out of stock

Bright lighting

Brand names

New recipes provided

Freshness is among the greatest influencers of positive produce department perceptions, and IdahoÂ® potatoes have a more favorable image of freshness than non-Idaho.

Impact of Idaho on Produce Department Impact of image on opinion of produce department

Impact of image on likelihood to shop store again

( 352'8&( '(3$570(17 ,6 6 $%287 )5(6+1(66 7$67( *(1(5,& 327$72(6

Idaho

36%

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12%

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12%

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10%

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27%

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P O TAT O R E TA I L I N G T O D AY

*EBIP IJHIFS (FOFSJD IJHIFS

6XUYH\ 4XHVWLRQV 3OHDVH WDNH D ORRN DW WKH SLFWXUH EHORZ DQG WKHQ HQWHU XS WR WKUHH ZRUG 7KH WKRXJKWV EHORZ ZHUH SXW IRUWK E\ RWKHUV ZKR ORRNHG DW WKH VDPH S \RX ORRN DW WKH EDJ RI SRWDWRHV

13%

Somewhat More Likely to Shop Much More Likely to Shop

NO. 17

Carrying Idaho® potatoes, with their strong branded image among consumers, is likely to positively impact perceptions of produce department desirability, according to new data from Carbonview Research. Seeing a bag of Idaho® potatoes is more likely to elicit positive thoughts about freshness, taste and quality than seeing a bag of generic potatoes. And shoppers even rate spuds from Idaho at least one point higher than non-Idaho potatoes for quality, taste and freshness. It all adds up to a rosier view of the entire produce aisle among shoppers and makes it more likely that they will shop the store again.

Top-of-Mind Associations to a Bag of Potatoes Freshness 23% 16% Tastes good 19% 8% Local/regional 19% 15% High quality

8% 2%

Big

8% 5%

Idaho higher

Heavy

1% 3%

Generic higher

Generic

1% 6%

Bag/sack

2% 5%

Basic/boring

3% 7%

Russet

3% 9%

How Consumers Rate Idaho vs. Non-Idaho Potatoes*

Most Different

Idaho

Generic 8.3

Low quality

6.9 8.2

Inconsistent quality

6.8 8.4

Less Different

Poor taste

7.1 8.1

Not fresh

7.0 7.7 7.4

Poor value

High quality Consistent quality Good taste Freshness Good value

The degree to which consumers see Idaho® potatoes as better than non-Idaho is similar to Florida vs. non-Florida oranges and California vs. non-California grapes. *Average rating on 10-point scale

P O TAT O R E TA I L I N G T O D AY

“I’m so popular with my customers that the other category managers are getting jealous.” Ted CATEGORY MANAGER

CAN STOCKING

IDAHO® POTATOES

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Produce Category Spotlight

Fresh Food

Major

Leaves

Salad greens are the season’s most sought-after vegetable. By Jennifer Strailey

everal recent studies indicate that U.S. consumers aren’t only savoring salad greens with greater frequency, but also with a more adventurous palate. Te trend spells new opportunities for supermarkets that provide the freshness, variety, color and recipe ideas that shoppers seek from this category. According to Mintel’s “U.S. Fruit and Vegetables” report from October 2014, the U.S. fruit and vegetable category increased from $89 billion to an estimated $105 billion between 2009 and 2014, and is expected to reach $126 billion by 2019. Chicago-based Mintel further found that consumers continue to gravitate to fresh food, and that sales are driven primarily by consumer perceptions that fruits and vegetables are good sources of nutrients.

What’s exciting for purveyors of salad greens is that among all fruits and vegetables, lettuce was the most purchased item, with 83 percent of respondents indicating that they had purchased lettuce in the past month. Mintel also notes that fresh-cut salads account for $5 billion in sales, but are forecasted to grow more quickly than any other segment between 2014 and 2019. While consumers love their lettuce, they also report eating a wider variety of fruits and vegetables than ever before. Tis appetite for greater variety was also indicated in “Te Lettuce Revolution, 2013,” a study from Chicago-based Technomic and commissioned by Mann Packing Co. Inc. According to the study, foodservice operators are moving away from romaine lettuce and experimenting with a wider selection of salad green varieties. March 2015 | progressivegrocer.com |

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lettuce in colorS Deeply hued salad greens are among the latest offerings from Mann Packing co.

Greens aren’t just for salads anymore: Smoothies, juices, soups, sautés, casseroles — almost any type of recipe or dish — can be made with greens.” —Samantha cabaluna, earthbound Farm

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According to the study, some 83 percent of restaurant consumers say that the type of salad green is an important factor in their decision to order a salad at a restaurant. What’s more, they crave a variety of favors and textures, as well as a blend of colors. More than half (59 percent) of consumers say that a darker color of salad greens is more appealing, while 70 percent think that diferent lettuce types — curly, leafy, robust —enhance a salad’s appeal. To meet the demand, Salinas, Calif.-based Mann has introduced distinctive lettuces such as Mann’s Arcadian Harvest Classic, Mann’s Arcadian Harvest Emerald and Mann’s Arcadian Harvest Ruby Blend. Te data are consistent with Mintel’s fndings. Te market research frm’s report notes that some 18 percent of respondents say they wish they could fnd more unique varieties of fruit and vegetables where they shop. Supermarkets that stock more unusual salad greens and also give consumers ideas of how to use them may capture the greatest sales, as 17 percent of consumers say they would buy more types of vegetables if they knew how to prepare them.

Beyond the Salad Bowl Samantha Cabaluna, VP of marketing and communications for Earthbound Farm, in San Juan Bautista, Calif., has been tracking the trend in greens as an ingredient for some time now. “Greens aren’t just for salads anymore: Smoothies, juices, soups, sautés, casseroles — almost any type of recipe or dish — can be made with greens,” she asserts. “And now that convenient, pre-washed and ready-to-use greens are available in so many favors, it’s simple to add nutrient-dense and delicious greens to your culinary repertoire.” She notes that 34 percent of greens are used for dishes other than salads. Furthermore, these “greens” have never included so many colors.

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

“Today, consumers are so much more adventurous about the kinds of greens they’ll buy and serve,” she observes. “It wasn’t so long ago that spring mix was pretty exotic, and now it’s really an everyday mix. Consumers are looking for more favor and more versatility.” Braga Fresh Family Farms, in Soledad, Calif., which recently debuted its Josie’s Organics line of salad greens, broccoli, caulifower and more, has designed an entire campaign around the idea of using greens and other vegetables in a complete way. “Juicing is hot,” notes Rod Braga, “and it’s placing greater demand on retailers and suppliers like Josie’s Organics.” With an eye on keeping demand high, Josie’s Organics promotes whole-vegetable cooking as a cornerstone of the brand and its commitment to sustainability. “Trough whole-vegetable cooking, we extend sustainability from our family farm to family dinner tables around the country,” says Braga. “In working with our food and lifestyle expert, Chadwick Boyd, we have a suite of recipes that shows consumers how to use all parts of vegetables in cooking, like broccoli leaves, stalks and forets, which minimizes waste and respects our food.” While research supports that shoppers are more receptive to diferent greens and vegetables than ever before, supermarkets and suppliers alike can give them the nudge they need to try something new with recipe recommendations online and instore, cooking demos, and sampling. “Many consumers wonder, ‘What’s for dinner?’ or ‘What can I make?’ when they shop,” notes Braga. “With Josie’s Organics, we embrace wholevegetable cooking and are beginning to provide a sustainability-driven brand experience from point of choice, all the way through our website, promotions, social media outreach and advertising.”

Organic Greens Millennials Drive Diversity Appealing to Millennial shoppers with a greater selection of favorful and more exotic greens will become increasingly important. According to Mintel’s recent fruit and vegetable report, Millennials are more likely to buy a variety of vegetable types than any other demographic. “Millennials are a key driver for sales, because they are now the largest population group in the U.S. and, as well, tend to be leading consumer trends in fresh, healthy foods,” notes Mintel. Braga sees the emergence of a variety of greens, including Asian greens like mizuna, gaining traction. “Popular in local farmers’ markets, retailers see an opportunity to ofer these greens to their customers and extend or enhance their current oferings,” he says. Meanwhile, baby kale and arugula continue to resonate with Millennials and older shoppers alike. Old World and Heirloom As in other fruit and vegetable categories, heirloom and Old World greens are increasingly hot topics. “Te discussion around Old World greens

While it’s a good time to be in greens, it’s a great time to be selling organic greens: Sales of organic greens grew at 17.5 percent for the 52 weeks ending Jan. 3, 2015, versus a year ago, while conventional greens sales grew at 5.2 percent in the same period, according to Schaumburg, Ill.based Nielsen. Organic salads now represent 24.3 of the category.

is beginning to build,” says Braga. “We expect that this conversation will continue and will eventually lead to new greens that haven’t been grown for the consumer in years.” Church Bros., of Salinas, has been growing heirloom red spinach since 2010. Te variety has a soft texture and mild earthy favor, with the nutritional benefts of green spinach, according to the grower, which also ofers a 50/50 blend of red and green spinach. Church Bros. is promoting its use beyond salads, suggesting it as an ingredient in wraps, sides and main courses as a way to bring color and energy to the plate. PG

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Nonfoods

Home Health Care

Home

Remedies Grocers can tap the trend of aging older consumers treating ailments on their own. By Barbara Sax

ales of home health care products are steadily increasing. Aging seniors are not only living longer, they’re also living longer independently. Unlike previous generations, seniors are educating themselves about products that make life easier and safer and they have the disposable income to purchase those products. Te Consumer Healthcare Products Association, based in Washington, D.C., reports that nearly half of Americans age 65 or older are more likely to treat their own health conditions today than they were a year ago. Tat percentage is expected to grow, since 48 percent of seniors say they’ll opt to diagnose and treat more ailments at home rather than seeing their doctors in future.

More Out-of-pocket Sales Changes in Medicare’s reimbursement policy are also impacting the category, with many products once provided by physicians or physical therapists no longer covered. “Until recently, Medicare covered many items in the support device category, so the customer was getting these items for free from their doctors or physical therapists,” says Dave Beal, director of sales for the grocery channel at Prairie du Sac, Wis.-based Mueller Sports Medicine Inc. “Now that Medicare no longer covers many of the items in this category, the cost is coming out of the consumer’s pocket.” As consumers increasingly make their own choices regarding these products, they want brands they know and trust, Beal adds. Tey’re also price sensitive. Jim McGuiness, VP of retail sales at Port Washington, N.Y.-based Drive Medical, says insurance reimbursement trends are leading to more cash sales for alternate channels. Te supermarket channel, he notes, represents a huge opportunity for the category, particularly in mobility products, since supermarket locations are convenient for many seniors. Merchandising key daily-life aids near the pharmacy to appeal to consumers already shopping the store is an easy way for supermarket retailers to grab a bigger share of category sales.

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Supermarket chains that are committed to the category should offer the best-selling items in the bath safety products, mobility aids and lifestyle aids segments, since these are key categories.” —Jim McGuiness, Drive Medical

Home Health Care

Sales of Mobility Products Growing For an older population, balance is a key issue, and home health care products aimed at this market have been growing. Te Centers for Disease Control and Prevention, Atlanta, estimates that one in three adults age 65 or older falls each year. Among older adults, falls are the leading cause of both fatal and nonfatal injuries, so supermarket pharmacists can play a crucial role in educating patients about products that can keep them safer. Tat can be accomplished by a relatively small section. “While supermarkets aren’t going to put walkers in the store, they can put in a display of canes, cane accessories, one or two safety items, a reacher, and some kitchen products in a 2-to-3-foot section that will cover the category,” says Park Owens, president of Barrington, Ill.-based Juvo Products Inc. “Balance and mobility products are important to aging consumers, and balance, home safety and kitchen products are our three most popular segments.” “Canes and cane safety accessories are the fastest-growing segments of the category, due to the evolution of mobility needs,” afrms Drive Medical’s McGuiness. “Supermarket chains that are committed to the category should ofer the best-selling items in the bath safety products, mobility aids and lifestyle aids segments, since these are key categories as well.” Ahold USA’s Stop & Shop and Giant Landover are two supermarket chains ofering Drive Medical’s canes on merchandising vehicles. According to Owens, these types of products are a natural ft for stores that are already carrying Depends incontinence products and external analgesic rubs. Te self-treatment trend is also driving growth in the external analgesic and muscle/body support segments. Chicago-based Mintel reports that the expanding elderly population helps to explain the 39 percent spike experienced by the muscle/body support device segment between 2009 and 2014. Dollar sales of external analgesic rubs were ahead 7 percent to $506.8 million for the 52-week period ending Dec. 28, 2014, according to multioutlet data from Chicago-based IRI. Muscle/body support device dollar sales were up 8 percent to $657 million for the same period, with the supermarket channel outpacing the drug channel in this category. Sharper pricing is one reason that supermarket retailers are grabbing more share of the category. Pricing is Key in Channel Deven Crandall, brand manager at Performance Health, owned by Akron, Ohio-based Hygenic Corp., says that supermarkets generally carry about a third of the SKUs that stores stock, but the super-

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market channel’s pricing is lower. Mark Smith, director of sales and marketing for North Lima, Ohio-based Perfecta Products, maker of Zim’s Max-Freeze Topical Muscle and Joint Pain, adds that supermarkets are gaining share in the pain relief segment by ofering value pricing. Te supermarket channel has the biggest share of ad support, outpacing even the drug channel, according to Solon, Ohio-based ECRM. Hot/cold therapy receives about 10 percent of ad support for the entire frst-aid category, while muscle wraps account for about 6 percent of total ad support. Toughtful merchandising is also boosting the channel’s share. “Supermarkets have more merchandising fexibility to capture the consumer by combining segments such as sports medicine/ elastics with localized hot and cold therapy,” Crandall says. Cincinnati-based Kroger stocks the company’s TeraPearl products in both its chronic (sports medicine) and immediate-need injury relief (frst aid/external) sections. Manufacturers say that best-in-class grocery players are devoting four feet to sections that combine supports and heat and ice packs. A well-merchandised section includes 35 to 45 items, brings all products together, and is located directly adjacent to the pharmacy.

Sports Tapes Grab More Share While St. Paul, Minn.-based 3M owns the lion’s share of the sports tape business, smaller companies have been making inroads by adding innovation and excitement to the category. Kinesiology tape (KT), used by professional athletes and weekend warriors for lightweight external support, is now showing up in the mass market. KY Tape is one brand that’s now in about 10,000 supermarkets, and sales of the company’s product have doubled each year. “Sports medicine is a challenging category for supermarket retailers who have space limitations,” says John MacKay, a spokesman for the brand. “With three or four SKUs, our packaging enables us to stand out in a tired, overcrowded category.” KT products, which retail for between $12.99 and $18.99, can be used anywhere on the body, so it takes only three SKUs to make a big statement. “Te product gets attention because it’s new and

Nonfoods

Home Health Care

diferent,” MacKay says. “Unlike traditional supports, which are designed for specifc areas of the body, a retailer only needs a few products.” Te most popular colors, according to MacKay, are black, blue, beige and pink. Te company ofers foorstands, as well as side-wing and counter displays. 3M’s website directs customers to its retail partners, driving store trafc and increasing category dollars. Te company is launching ProX Patches in the frst quarter. “Tese are kinesiology tape patches that can be applied to points of pain, and are designed to be worn for multiple days,” MacKay explains. Te product retails for $19.99. Mueller’s kinesiology tapes, braces, supports, wraps and heating/cooling products are also gaining distribution in the supermarket channel. Te manufacturer recently launched FasciaDerm PFTape, a product that provides therapeutic support to the foot for the treatment of plantar fasciitis heel/arch pain. Te package contains seven applications, with 24 hours of relief per application. Mueller also recently introduced Mueller Beaded Terapy, gel bead therapy packs that conform to the contours of the body and can be microwaved

for heat therapy or stored in the freezer for cold therapy. Te products retail for $5.99, about 50 percent lower than the comparative Terapearl product from Performance Health. Gel bead products have been a bright spot in an otherwise fat segment. Additionally, Trenton, N.J.-based Performance Health has introduced a number of products for self-treating a wide range of health issues, including the Terapearl Ankle/Wrist Wrap, Perform Atomic Heat, Perform Foot Spray, and Cramer braces, wraps and tape. PG

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Electronics

Power Play

Accessories and fitness devices drive sales of small electronics in the grocery channel. By Barbara Sax

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merican consumers love electronics. Consumers’ attachment to smartphones, tablets and laptops, as well as their migration to convenient “one-stop” channels, has created opportunity for supermarkets in categories that are no longer exclusive to specialty and mass retailers. If the products are priced right, merchandised efectively and on trend, consumers are just as willing to purchase them in their local supermarkets as in any other channel. Higher retail prices and double-digit margins are two compelling reasons to take a good look at these categories. Te Arlington, Va.-based Consumer Electronics Association (CEA) estimates that sales of consumer electronics (CE) accessories, driven by the popularity of tablet and smartphone accessories, headphones and earbuds, totaled $8.5 billion in 2014. More supermarket retailers are invested in the category. Research from Solon, Ohio-based ECRM indicates that the supermarket channel is the second most active (right behind mass) in advertising electronics products. Nearly three-quarters (74 percent) of ads in this category are price only-based, according to ECRM, with Samsung the most actively

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

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Nonfoods

More and more devices are incorporating food data into apps, allowing consumers to scan UPCs and download nutritional information. Food is such an important part of health and fitness that these products are a natural fit for supermarkets, especially those who have nutritionists on staff.” —Leon Wong, Salutron Inc.

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advertised brand in the category. Retailers can generate impulse purchases with the right product mix and aggressive pricing. CEA research shows that nearly 30 percent of consumers who make unplanned CE accessory purchases say store displays have the biggest infuence on their buying behavior. “Te most successful way for food and drug retailers to get into the category is with free-standing displays or power wings, especially near the registers,” advises Mark Mesrobian, EVP of Narragansett, R.I.-based Complete Sourcing Solutions, maker of the Symtek brand of mobile accessories. According to Mesrobian, Symtek products, which retail for $5 to $15, are delivering margins from 45 percent to 60 percent. “For grocery retailers, that’s huge,” he notes. One of the brand’s most successful programs is its TinyTek grab-and-go line, which can be merchandised near checkout and retails for less than $10. All of Symtek’s products are Apple-licensed, a distinction that’s becoming increasingly important. “In grocery, it can be all about price,” says Mesrobian. “But retailers don’t like returns, so it’s smart to ofer a better-quality product.” Alan Zisser, director of operations at New York-based Tzumi (whose products are also Applecertifed), points out that space can be a challenge for supermarket retailers, so it’s important to key in on a few best-selling items. Rochester, N.Y.-based Wegmans Food Markets includes the company’s Pocket Juice portable phone chargers in its in-line 3-foot electronics section, located adjacent to the chain’s stationery and card departments. A mix that includes car chargers, home chargers and cables in three of four colors is optimal. “Our best-selling color is pink,” says Zisser. CEA research shows that about half of consumers (48 percent) are interested in personalizing their accessories through color (67 percent) and design options (62 percent). Zisser adds that price points from $14.99 to $19.99 are the “sweet spot for retailers to move product and still make a margin.” Wegmans’ mix also includes screen savers and tablet and phone cases, as well as a selection of earbuds and headphones. CEA estimates that sales of headphones were up 20 percent in 2014. Sony and Philips are the top two vendors in the category, according to data from United Kingdom-based Futuresource Consulting.

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

Wearable Fitness Devices Taking Off Technology is also playing an increasingly bigger role in health-monitoring devices. CEA asserts that wearable items (ftness activity bands and other health-and-ftness devices, in addition to smartwatches and smart eyewear) will be a key category to watch in 2015 and beyond. “Te digitization and sensorization of consumer tech is having a pronounced impact on the way people manage their health,” afrms CEA spokeswoman Danielle Cassagnol. “Technology is an enabling force. It democratizes health care by allowing each of us easy accessibility to myriad medical innovations that were just a few short years ago only available to us through a physician, including blood pressure monitors. Tis is empowering the consumer toward more personalized health care.” CEA research indicates that one in 10 Americans owns or uses a wearable ftness activity tracker; 81 percent have purchased or received their ftness trackers in the past 12 months. Unit sales of wearable devices are expected to jump 61 percent, and dollar sales are expected to surge 133 percent to $5.1 billion in 2015, according to the trade association. Improvements in sensor technology and the reduced cost of production have resulted in a stream of new health-monitoring and -tracking devices entering the market. Te products are making it easy for consumers to have a more comprehensive view of their vital signs, easily share data with health care professionals or caregivers, and take an active role in managing their health. “Te category has been growing signifcantly since 2011, when these products began entering the market,” says Mimi Huggins, a spokeswoman for San Francisco-based Jawbone, maker of the Up line of ftness trackers. Huggins adds that while there once were one or two manufacturers, there are now many options in this space. As in any competitive category, the proliferation of products has made them more afordable to the average consumer. Jawbone recently introduced the Up Move tracker, an easy-to-use entry-level model that retails for $49.99. Wrist strap accessories retail for $14.99. Te device counts daily steps and can also be worn in bed to accurately track sleep, including hours slept and sleep quality. Up Move

“Cultivation to the mind is as necessary as food to the body.” - Marcus Tullius Cicero Mark the dates April 15-17, 2015, on your calendar because you will be attending Canada’s leading fresh fruit and vegetable industry event, the 90th CPMA Convention and Trade Show. As one of the three pillars of our 2015 program, CPMA is committed to providing an experience that will educate and inform you as to the latest trends, opportunities, and challenges that will affect your business. Regulatory changes, increasingly informed and demanding consumers, climate change impacts, and new processes and approaches, are just some of the subjects that the 90th CPMA Convention and Trade Show will deliver the latest insights on. In addition, new for 2015: experience hands on learning by taking in our interactive learning sessions right on the show floor . Cosmopolitan Montréal will be the setting as we gather together all segments of the produce supply chain to take part in our industry’s largest business-to-business event. Networking in this unique forum will present you with opportunities to expand your business from coast to coast, all in the heart of Canada’s capital of joie de vivre!

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Nonfoods

The most successful way for food and drug retailers to get into the category is with freestanding displays or power wings, especially near the registers.” —Mark Mesrobian, Complete Sourcing Solutions

Electronics

connects wirelessly with Jawbone’s Up app via Bluetooth Smart, syncing regularly to track progress throughout the day and night. Te app’s intelligent guidance and insight system, Smart Coach, helps provide a deeper understanding of how diet, sleep, activity and other choices afect overall health and suggests changes users can make, as well as motivating users with personal challenges like drinking eight glasses of water per day, or taking 2,500 more steps. “Consumer acceptance is growing in this category as technology and accuracy have improved,” says Leon Wong, VP of marketing at Fremont, Calif.-based Salutron Inc., manufacturer of LifeTrak ftness monitors. LifeTrak’s line of monitors retails for $59 to $129 and is currently sold in drug and mass chains. Wong thinks supermarkets have a distinct advantage in the ftness monitor category. “More and more devices are incorporating food data into apps, allowing consumers to scan UPCs and download nutritional information,” he observes. “Food is such an important part of health and ftness that these products are a natural ft for supermarkets, especially those who have nutritionists on staf.”

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

Personal Grooming Offers Opportunity In the personal grooming category, men’s hair and beard trimmers have soared in popularity as facial hair continues to be fashionable. Te NPD Group estimates that dollar sales of the products are an estimated $301 million, an 18 percent increase over 2013 dollar sales. “Te men’s facial trimmer category has seen a dollar sales cumulative annual growth rate of 14 percent from 2011 to 2014,” notes Debra Mednick, home industry analyst for Port Washington, N.Y.-based NPD. “It’s one of the few personal care appliance categories with this level of a positive track record.” According to Steven Yde, director of marketing for Sterling, Ill.-based Wahl Clipper Corp., since 2007, the company has quadrupled sales in this category. “Last year alone, we were up double digits, marking our ninth straight year of record growth,” he says. Mednick observes that while the mass channel captures the lion’s share of sales in this segment, competition from other channels, such as drug and beauty, has slowly been stealing share. Yde, for his part, sees opportunity for supermarkets in products ofering innovative features. “Wahl’s popular Lithium Ion Total Grooming kit and Lithium Micro Groomsman, our top-selling personal trimmer, are afordable, high-demand products that are ideal for supermarkets to carry,” he says. Te Groomsman retails for $19.99. Idea Village’s Micro Touch Max retails for as low as $9.99, allowing supermarket retailers to keep prices low. Items that perform best tend to ofer multiple attachments outside of just various comb lengths, asserts Mednick. “Two-foil shavers and nose/ear trimmers are beginning to become commonplace in the facial trimmer package, since they are a great value proposition,” she says. “While the majority of sales are from lower-priced items, some trade-up is evident, with demand growing for high-end trimmers, which ofer sleek styling and new technology.” PG

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Technology

Data Synchronization

In Sync for the

Future Grocers and suppliers collaborate on global information standards. By John Karolefski

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lack of confdence in data quality between retailers and manufacturers, as well as several related technology issues, is making needed efciencies difcult to achieve. Tis presents a huge opportunity for the industry to work together for the beneft of all stakeholders. An industry consensus on that issue led to the launch of a collaborative efort eight months ago. Te GS1 US Retail Grocery Initiative aims to enhance data quality and improve product information and images, supply chain visibility, and operational efciencies. “We anticipate this year to be a pivotal year in shaping the future of the retail grocery industry,” says Angela Fernandez, GS1 US’s VP of retail grocery and foodservice. Lawrenceville, N.J.-based GS1 US, a member of the global information standards organization GS1, brings industry stakeholders together to solve problems. The major organizations involved in the grocery initiative include retailers such as Wegmans Food Markets, Publix Super Markets and The Kroger Co.; CPGs (The Coca-Cola Co. and Kraft Foods Group); solution providers (Gladson and Clavis Insight); and trade associations (the Food Marketing Institute and the Grocery Manufacturers Association), among others. “We have long believed that standards and collaboration among retailers and manufacturers are essential,” says Marty Gardner, SVP of merchandising at Rochester, N.Y.-based Wegmans and a GS1 board member. “Our industry must work together to build a solid foundation for the future. Without this discipline, there is waste and added cost for both the retailer and the manufacturer.” Sadly, the quality of the data shared between retailers and manufacturers is still not where it should be, despite numerous industry eforts over the past 10 years, according to Nona Cusick, SVP of consumer products, retail and distribution at Capgemini, a global consultancy. “Organizing good-quality data has proven to be difcult for both retailers and consumer goods companies. Often, the data is still treated in a fragmented way — with too few data-quality feedback loops between retailers and manufacturers — and lacks the required business focus,” she says.

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Technology

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Source: GS1 US

We have long believed that standards and collaboration among retailers and manufacturers are essential.” —Marty Gardner, Wegmans Food Markets

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GS1 US’ Fernandez says data synchronization is very important to improving confdence in data quality. Providing complete and accurate data about products to trading partners, and ultimately consumers, is imperative. Instead of pulling from many diferent sources, she adds, companies have access to a single source of the truth by using the Global Data Synchronization Network (GDSN), which is the electronic transfer of standardized product information between trading partners. It ensures that everyone has access to the same accurate information. Trading partners need only one connection to send and/or receive accurate and up-to-date product information. Tat capability pleases grocery retailers such as Wegmans and Publix. “Data quality is mission-critical, and it’s incumbent on the brand owner to get it right,” Wegmans’ Gardner stresses. “Tat’s not just national brand manufacturers, but also retailers with private brands.” He adds that the consumer goods and retail value chain isn’t a closed community of retailers and manufacturers; there are many other stakeholders, including consumers, downstream suppliers, logistics service providers, technology providers and governments, to name just a few. “Tis requires full transparency, the right level of standardization, and highly accurate and reliable data,” he says. “Additionally, synchronization of accurate product information is a pivotal element in providing a transparent data foundation for the entire value chain and all stakeholders.” Maria Brous, spokeswoman for Lakeland, Fla.based Publix, agrees: “True data synchronization will be required to efciently publish and receive product attribute data timely and with accuracy. Te current opportunity is for our suppliers to have this data in one place internally and to

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

publish when changes occur like primary product panels, ingredients, etc.” GS1 US is currently working with suppliers, distributors and solution providers on the launch of the GS1 US National Data Quality Program. A discussion group with nearly 300 members representing 179 unique companies came together in 2013. Tese industry stakeholders agreed to focus on a clear mission: steering industry to adopt, implement and adhere to an industry-driven and defned data quality program to improve current business processes. Tey say success in data quality for exchange between trading partners depends on creating and maintaining accurate and complete product information by leveraging GS1 standards, the most widely used supply chain standards in the world. Te discussion group developed 5-Point Data Quality Best Practices and the GS1 US National Data Quality Program to help companies establish and sustain efective data quality programs. Te 5-Point Data Quality Best Practices are: 1. Adhere to GS1 standards and rules for initial attributes in an internal setup. 2. Assign data owners throughout the organization. 3. Appoint one entity/department/individual as the sole owner of product data. 4. Audit all new items produced in a sustainable production environment and ready for shipment (fnished goods). 5. Execute communication of initial attributes and package measurements, both internally and externally.

Technology

Data Synchronization

Te National Data Quality Program is designed to be universal across all sectors, and consists of the three essential components of good-quality data:

Data governance: Ensuring processes and procedures are in place to set up and maintain accurate data over time. Tis includes the use of industry best practices and data stewards. Education and training: Tis ensures that the

people responsible have the knowledge to implement the program, with particular focus on synchronizing data to the GDSN, an internet-based, interconnected network of interoperable data pools, and a global registry known as the GS1 Global Registry. Tey enable companies around the globe to exchange standardized, synchronized supply chain data with their trading partners.

Attribute audit: Tis is the physical audit of the

product compared with the most recent information shared. It validates the data governance processes and institutional knowledge as demonstrated in the frst two components. Demonstrating profciency in all three pillars will enable a supplier to become certifed either by a third-party solution provider or by GS1 US. Meanwhile, another trio of pillars forms the basis of the Retail Grocery Initiative: digital product information and images, supply chain visibility, and operational efciencies.

Product Information and Images “Data is no longer limited to supply chain metrics and physical characteristics,” says Gardner, of Wegmans. “It is also consumer-facing, and these attributes need to be part of the model.” Indeed, of the three areas of focus in the initiative, product information and images is the only one dealing with consumer-facing issues. Trading partners are concerned about the data density and quality to support product catalogs and e-commerce solutions. “As technology continues to evolve, customers expect more product attributes and product images to review products online,” says Brous, of Publix. “Tere are also concerns about the authentication of the data, which we believe should be from our suppliers and manufacturers. “We have already participated in some initial data-quality measurement eforts with GS1,” she continues. “Along with several other suppliers and retailers, we confrmed that data quality and density for product catalogs and e-commerce solutions remain a large opportunity. Product data for traditional supply chain needs is available, but not for consumer catalogs. We are sharing this opportunity with our suppliers and working with several data pools to secure this product attribute data in our product catalog for customer convenience.” A GS1 US workgroup is actively addressing the issues related to product information, including images, to ensure that data synchronization based on GS1 standards is seamless. “Te need for expanded product attributes is driven

ABCs of GS1 Standards The grocery industry is striving to find new ways to collaborate by leveraging technology to improve operations. Retailers and manufacturers are also relying on GS1 standards to help ensure food safety and product traceability.

by consumer empowerment,” says Fernandez. “Never before has there been such a desire for more information about food origins and … ingredients. Tis has driven the industry to respond to be able to deliver upon the needs of the consumer. Also, reliable data and images are a necessity when communicating and marketing in today’s mobile environment. Te initiative will be focused on helping the industry better identify, capture and share the information that is important to both consumers and trading partners in a standardized, more efcient way.” Isabel DuPont, SVP of content production at Lisle, Ill.-based Gladson, agrees that it’s imperative for manufacturers and retailers to present accurate, compelling and extensive product information online. “But that doesn’t mean it’s easy,” she’s quick to add. “With shoppers traveling a digitally fueled path to purchase, brands and retailers face growing pressure to provide more detailed product information across a surging number of shopper touchpoints. More data means more complexity. With product information for B2B and B2C processes needing to be accurate and available to give shoppers the experience they’re looking for, retailers’ scrutiny of product information is not only justifed, but necessary.” Fortunately, manufacturers understand this imperative and are taking steps to deliver. Tey’re partnering with third-party content providers that can ofer standards-compliant, sustainable processes for creating, maintaining and distributing digital product information. For example, in the past 12 months alone, Gladson has added 1,000 manufacturer customers, largely driven by their need to provide retailers and shoppers with up-to-date brand content for e-commerce and product catalogs. In addition to helping manufacturers and retailers with product data quality and the consistency of that information across channels, Gladson is being called upon to provide an increasing number of product attributes and images to support shoppers’ researchheavy buying journeys. As the quantity and complexity of product content increases, it’s crucial that this content is distributed in formats that are “enterpriseready,” DuPont says, meaning that the content should be formatted to allow for fast and seamless integration into specifc enterprise applications.

With shoppers traveling a digitally fueled path to purchase, brands and retailers face Operational Efficiencies Te initiative seeks to reduce supply chain inefgrowing pressure fciencies from decreasing total delivered costs to provide more (TDCs) to help companies remain competitive and detailed product successful. GS1 US is currently identifying the gaps information and opportunities for operational efciencies where across a leveraging the common language of GS1 standards surging number can lead to positive results. of shopper “Operational efciency is an internal beneft touchpoints.” of leveraging standards,” notes Fernandez, who’s

Supply Chain Visibility GS1 US ofcials stress the critical need for improved supply chain visibility to ensure the accurate identifcation of products, as well as the delivery and tracking of safe foods and other products. Supply chain visibility aims to remove barriers and silos, leading to more process improvements such as better inventory/category management, more accurate ordering, improved shelf availability, improved shrink

enthusiastic about the next steps for the initiative as it kicks of 2015 with an Executive Leadership Committee composed of key stakeholders. For example, Wegmans is one of the pilot participants in the National Data Quality Program. “Tey are providing strategic guidance and expertise,” Fernandez says, “and maintaining a focus on creating a unifed industry approach to leverage GS1 standards implementation to solve [further] challenges.” PG

Here at a glance are the key acronyms involved with GS1 standards:

GTIN: Global Trade Item Numbers, the foundation of the GS1 system, identify all “trade items,” which include products and services that are sold, delivered and invoiced at any point in the supply chain. They’re typically found at the point of sale and on cases and pallets of products in a distribution center or warehouse. GLN: Global Location Numbers are reference keys for obtaining information about locations related to the supply chain — for example, stores, manufacturing centers, warehouses and so forth. By making tracking and identification at each step in the supply chain easier, they help to keep products secure. GDSN: The Global Data Synchronization Network is the electronic transfer of standardized product information between trading partners, and the continuous synchronization of that information over time. The GDSN ensures that all partners have access to the same accurate information. —John Karolefski management, and, ultimately, efcient and accurate traceability when required. “Supply chain visibility is also a major focus area that afects all areas of traceability,” explains Fernandez. “Many industry stakeholders we work with are placing a greater emphasis on supply chain visibility using GS1 standards, not only because their focus on FDA [Food and Drug Administration] regulations will require them to have better traceability capabilities, but also because they are discovering they’ll gain additional business benefts when they can better see the details of their internal processes.”

—Isabel DuPont, Gladson

March 2015 | progressivegrocer.com |

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Equipment & Design

Seafood Cases

Making the Case

for Safety

Display units are key to maintaining the critical in-store integrity of seafood.

By Bob Ingram

single outbreak of foodborne illness can seriously damage a retail brand, and the seafood department is the leading area of the store where this serious problem can occur, due to the sensitive nature of the products displayed and sold there. Te display cases in the seafood department are the last line of defense against seafood contamination. “Unsanitary display cases provide a breeding ground for bacteria,” says Margie Proctor, marketing and design specialist at Conyers, Ga.-based Hillphoenix. “Cleaning and sanitizing a seafood case regularly are of the utmost importance. Periodically checking the drain traps to make sure they are free of debris is important so that the case drains properly. Tere are several options on the Hillphoenix seafood service cases to assist with cleaning, such as the fush system and cleaning switch. Tese options assist with fushing runof from melted ice, and fuids from the displayed sea-

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food products, down the drain.” Another food safety concern in the seafood department is the merchandising of cooked and raw products. Tese must be kept separate, Proctor says, noting how Hillphoenix addresses this issue with the option of glass or plexi dividers to eliminate cross-contamination. Te most important function of seafood cases, according to Proctor, is maintaining product temperature. Bacteria and enzymes are present in all fsh and shellfsh, she points out, but when fresh seafood is placed in environments above the recommended holding temperature, bacteria and enzyme activity increase, seafood can become scaly and slimy, and the desirable frm texture can turn soft and mushy, decreasing shelf life. Tis also afects the taste, odor, appearance and texture of seafood. “Keep product cool and moist to ensure fresh-tasting, fresh-looking and fresh-smelling product, to create an appealing environment where shoppers are enticed and

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

motivated to make a purchase and to keep them coming back,” Proctor advises. Hillphoenix ofers about 15 standard service models specifcally designed for fresh seafood applications, with a variety of glass options, base heights, case depths and accessories for each model. Te company also ofers several families of self-service seafood merchandisers. Te most popular Hillphoenix seafood case, according to Proctor, is the BSD-SW open-service refrigerated display case, because of the open-top design, which provides full visibility of the product and imparts the feel of an open seafood market. Tis case is designed on a tall base that brings product up to a customer’s vantage point, and is ofered in several depths, lengths and miters. “Flexibility in the footprint of a seafood case is evolving,” Proctor notes. “Shrink in the department is a signifcant concern, and keeping a service seafood display case looking plentiful is a must. Te answer: narrower case footprints front to back. Create a planogram that is manageable in a narrower footprint to achieve less shrink, ease of working, and ofering the freshest product to the shopper.”

Keeping Your Cool Cayuga Displays and Arctica Showcase, in Cayuga, Ontario, has many models that merchandise and cross-merchandise seafood and its accompaniments. “We have ice tables and bins for fresh shrimp, whole fsh and mollusks,” notes Ryan Petrick, Cayuga’s national sales manager. “Shucking stations for oysters have been extremely popular. We also provide ice bins to cross-merchandise seafood salads, sauces, and everything dry that goes with seafood.” Petrick says that Cayuga’s and Arctica’s dry fxtures can be built with this cross-merchandising in mind, which saves the retailer foor space, because shelving can be created that’s supported by existing seafood fxtures. “It also portrays a cohesive department and look,” he adds, “without the traditional metro shelving pushed up against the front of a service case.” High-volume seafood departments turn over product quickly, and Cayuga’s low-velocity blower coil service cases, available in a variety of heights and depths, can reduce shrink, he says. “Sales rotation of product is the best way to lower safety issues in the seafood department,” Petrick asserts. “More frequent ice turns help to eliminate undesirable odors, and merchandising on pans under refrigeration is one of the best ways to ensure consistent product temperatures.” Fresh ice still has the appeal that most retailers desire, Petrick acknowledges, but the main issue there is the labor associated with ice. Also, ice machines are expensive, and Petrick argues that traditional displays use too much ice. “We have been working to come up with merchandisers that use

less ice, which helps with the labor of changing and cleaning, and promotes more frequent swaps,” he says. James Piliero, sales development manager at Fort Worth, Texas-based Traulsen, a division of Hobart Corp., says: “Safely displaying and merchandising any cold product is a challenge, even more so with seafood. Having equipment that maintains proper holding temperatures is key. Other problems are presented by the possibility of cross-contamination, because seafood departments usually display fresh, cooked and frozen food simultaneously, often side by side. Tere is also the daily challenge of efectively cleaning and sanitizing equipment, utensils, work surfaces and pans.” Traulsen produces one seafood display case, designed expressly to support the “roadshow” concept, which is becoming increasingly popular, Piliero explains. “During the development phase of the roadshow case,” he says, “we received signifcant input from a large national retailer while gaining access to their seafood operations to observe actual practices. “Our success is largely due to the cabinet’s performance in keeping cold food safely cold, and in preventing frozen product from thawing,” he continues. “Tis display case is durable, mobile, easy to care for, and it ofers convenient refrigerated storage beneath the display.” According to Piliero, better handling practices and overall awareness of food safety have contributed to safer seafood, and the current documentation methods that trace seafood to its place of origin are also a great advance, as are advances in refrigeration equipment. New regulatory changes at the U.S. Department of Energy, expected in 2017, and the proposed changes in the Environmental Protection Agency’s Signifcant New Alternatives Policy next year will focus Traulsen’s eforts on improvements to comply with the new standards. “In my opinion,” Piliero concludes, “the everincreasing trends for greater product visibility, easier access and customer convenience will lead to betterperforming cases such as open-air merchandisers.” PG

Flexibility in the footprint of a seafood case is evolving. Shrink in the department is a significant concern, and keeping a service seafood display case looking plentiful is a must.” —Margie Proctor, Hillphoenix

SleeK Mover Traulsen’s seafood table is designed for merchandising “roadshows.”

March 2015 | progressivegrocer.com |

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Food, Beverage & Nonfood Products

Packed with Peanuts

Bringing even more better-for-you options to the snack aisle, Nature Valley has introduced two additional flavors to its line of Nut Crisp Bars. The Salted Caramel Peanut variety is packed with roasted peanuts, sunflower and pumpkin seeds, and lightly dipped in caramel; while the Almond Dark Chocolate offering brings together peanuts, sunflower seeds and almonds, dipped in chocolate. A box of six bars retails for $4.19. www.naturevalley.com

Sparkling H2O

Cooked to Perfection

Claiming to be the No. 1 meatball brand in the country, Home Market Foods brings a sense of craftsmanship to the frozen food department with its Cooked Perfect Meatballs. Available in six varieties — Italian, Homestyle, Swedish, Angus Beef, Turkey and Gluten-Free — each meatball is flame-broiled and never fried. Cooked Perfect Meatballs are available in bag sizes ranging from 20 to 32 ounces at an SRP range of $7.99-$8.99. www.cookedperfect.com

Cúrate Pina Fraise takes center stage as the latest offering in LaCroix’s portfolio of calorie-free sparkling waters. The new pineapple strawberry flavor is 100 percent natural, non-GMO, and made without artificial sweeteners, sodium or caffeine. Appearing on store shelves in bright, bold packaging, LaCroix’s Cúrate Pina Fraise is available now in 8-packs of 12-ounce tall cans for an SRP range of $3.99-4.99. www.lacroixwater.com

It’s Greek to Me

“Greek yogurt is one of America’s favorite protein-packed snacks, and our smoothies are the first drinkable Greek dairy product available nationwide,” says Kristen Williams, manager for Borden Dairy Co.’s Lala brand, which recently added Greek-style yogurt and smoothies to its product lineup. Made with real fruit and natural sweeteners, the smoothies are available in strawberry, peach and mango blends, while the yogurts come in strawberry, mixed berry, peach, coconut and pineapple flavors. Rich in vitamins and protein, Lala Greek smoothies (SRP $1.39) and Greek yogurt (SRP $1.19) are available nationwide. www.bordendairy.com

seasonal spotlight Easter Peeps

The Peeps brand has unveiled its latest slate of Easter basket essentials to help consumers celebrate the start of spring. Offerings include the brand’s classic Marshmallow Bunnies; unique varieties of Marshmallow Chicks, including Chocolate Dipped, Chocolate Dipped Mousse Flavored and Party Cake Flavored, as well as Blue Raspberry and Sour Watermelon Flavored; Peepsters bite-size chocolate and marshmallow crèmes; and new Peeps Decorated Eggs iced with pastel colors in three designs. Peeps Easter products have an SRP range of 79 cents-$4.49. www.peepsandcompany.com

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

Organic Snack Options

G.H. Cretors has expanded its all-natural popcorn line with two new varieties: Organic Extra Virgin Olive Oil Popped Corn and Organic Simply Salted Popped Corn. Made from kernels that are local and non-GMO, the new varieties, like all G.H. Cretors products, are free of artificial colors, flavors and preservatives, and are certified glutenfree. G.H. Cretors’ new popcorn varieties are available in full-size bags for an SRP of $3.99; single-serve, 0.46-ounce bags are also available for an SRP range of $1.49-$1.79. www.ghcretors.com

Smooth Shave

Following the launch of its Fusion ProGlide with FlexBall Technology, Gillette aims to further improve the shaving experience with the introduction of the brand’s Fusion ProGlide Sensitive 2-in-1 Shave Gel Plus Skin Care. Featuring a no-rust plastic package design, a dispenser that leaves less mess and waste, and a gel gauge that lets users see how much product remains, Gillette’s new shave gel is formulated with a new cooling agent designed to leave skin smooth and refreshed. It’s available nationwide for an SRP of $4.99. www.gillette.com

Land of Milk and Caramel

Salted Caramel Latte is the first of three limited-edition milk flavors set to launch in 2015 by Promised Land, a brand of all-natural dairy products. Available through April at retailers nationwide, the new offering features rich caramel flavors swirled into a café-style latté, topped with a pinch of gourmet salt and blended with the brand’s Jersey milk. Quart bottles retail for a suggested $2.99. www.promisedlanddairy.com

Shelf Score™ — January 2014 Purchase INteNt score

New Product

1 2 3 4 5 6 7 8 9 10

Quaker Oats Steel Cut 3-Minute Oatmeal: Brown Sugar & Cinnamon Kellogg’s Pop-Tarts: Frosted Red Velvet Near East Quinoa Blend: Zesty Lemon Cheerios + Ancient Grains Post Great Grains Granola: Super Nutty Dannon Light & Fit Protein Shakes: Strawberry Special K Gluten Free Touch of Brown Sugar Cereal Dole Garden Soup: Carrot Ginger Banquet Morning Bakes: Biscuits and Chicken Love Grown Foods Power O’s: Honey

66% 63 60 59 57 54 52 49 48 42

source: Instantly Shelf Score

March 2015 | progressivegrocer.com |

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Snyder’s-Lance Introduces New Snack Division, Logo

All Mars Plants Are Landfill-free All 10 of Hackettstown, N.J.-based Mars Chocolate North America’s manufacturing facilities are now certifed landfll-free, representing a major milestone in achieving the company’s 2007 goal of zero-waste-tolandfll by 2015. Mars has taken a comprehensive approach focused on three key areas: efcient operating processes, recycling programs for multiple waste streams, and mutually benefcial partnerships with disposal vendors and local farm reuse programs. Mars’ Henderson, Nev., site was the fnal facility to attain this distinction. Achieving landfll-free certifcation is one of several 2015 global goals outlined in the Mars Principles in Action Summary, which includes a target for the company to eliminate all fossil fuel energy use and greenhouse gas emissions from its direct operations by 2040. www.mars.com

Charlotte, N.C.-based Snyder’s-Lance Inc. has launched Clearview Foods, a new snack food division with a focus on developing innovative and better-for-you snacking options. Clearview will concentrate its eforts on growing the Snack Factory Pretzel Crisps, Eat Smart and Late July Organic Snacks product lines. “We are in a stronger position to satisfy our consumers’ desire for healthy snack choices that deliver on taste and quality,” says Carl E. Lee Jr., Snyder’sLance president and CEO. “We are combining the entrepreneurial spirit of this division with our corporate scale to better serve the expanding snacking needs of our consumers and retailers.” Peter L. Michaud, former VP of Snack Factory, has been appointed SVP and general manager of the Clearview Foods division. Tis new division is part of an overall transformation of the company, which started with the acquisition of Snack Factory, the divestiture of the private brands business, and the acquisitions of Baptista’s Bakery and a majority stake in Late July Organic Snacks. Additionally, Snyder’s-Lance Inc. is introducing a corporate logo that symbolizes the completion of its strategic shift to become a branded snack food company. Te logo and new tagline, “Snacking is our passion,” ofer a fresh perspective on the company’s focus on, and commitment to, meeting evolving category trends with innovative products. www.snyderslance.com

Miatech Launches Produce-misting Systems Clackamas, Ore.-based Miatech has rolled out a line of increased-pressure produce-misting systems, designed to minimize shoppers’ getting wet. Te new Durability Series units, which use redundant pumps in series, mist at about 140 psi, up from competitive misting units that typically operate at between 70 and 100 psi. “Having the ability to address the two biggest issues in a misting system — customer friendliness and reduced downtime — it can really make a big diference,” says Frank Riddle, Miatech produce category manager. www.miatech.org

Westmoreland Sales Group Selects IFCO RPCs Leamington, Ontario-based greenhouse vegetable grower Westmoreland Sales Group has signed a two-year contract with IFCO Systems for its reusable produce packaging solutions. Westmoreland is now shipping Topline brand tomatoes, peppers

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and cucumbers from its distribution centers in Ontario and Michigan to retailers across North America in IFCO RPCs. Tampa, Fla.-based IFCO handles all RPC logistics for Westmoreland, from distribution

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

to cleaning to re-entry into the supply chain. After each retail use, IFCO RPCs are folded, collected and shipped back to one of IFCO’s service facilities, where they’re sanitized and prepared for reuse. www.westmorelandsales.com

advertiser index Ace Hardware Corp.

www.acehardware.com

Airius

www.theairpear.com

Aptaris

121

www.goaptaris.com

Avocados From Mexico

www.havasmedia.com

Beaver Street Fisheries

www.beaverstreetfisheries.com

58, 59

www.blountfinefoods.com/buildsales

Blount Fine Foods Bob’s Red Mill

4, 5

www.bobsredmill.com

BYB Brands

www.tumeyummies.com

Calbee North America

www.calbeena.com

Charles & Alice

www.fruitfriends.com

Coca Cola NA

www.coca-cola.com

Conagra Foods

www.childhungerendshere.com

CPMA / Canadian Produce Marketing Association

115

www.convention.cpma.ca

ECR Software Corporation

119

www.ecrs.com

www.enjoylifefoods.com

23, 25, 27

www.fmi.org

Enjoy Life Natural Brands, LLC Food Marketing Institute The Garden City Group

122

www.eggproductsettlement.com

50, 51

www.generalmills.com/Brands/Cereals.aspx

Giorgio Foods, Inc

www.giorgiofresh.com

Gold Medal Products

www.gmpopcorn.com

105

www.GreenGiantFresh.com

General Mills Inc

Green Giant Fresh The Happy Egg Company Heineken USA Inc

www.hendependenceday.com

9, 29, 45 (Regional)

www.heinekenusa.com

95-102

www.idahopotato.com

www.iddba.org

110

www.iovate.com

Idaho Potato Commission International Dairy Deli BAK / IDDBA Iovate Health Sciences INT’L, Inc. JETRO LA

www.jetro.go.jp

Kachwa Food Group

www.GordosCheeseDip.com

Louisiana Seafood Promotion and Marketing Board

www.buy.louisianaseafood.com

Mariani Packing Company

www.mariani.com

Mason Vitamins Inc.

109

www.masonvitamins.com

Mason Ways Indestructible

116

www.masonways.com

42, 43

www.australian-lamb.com

www.gotmilksales.org/drive

Meat & Livestock Australia Ltd MilkPEP Musco Family Olive Co. National Confectioners Assn Nepa Carton & Carrier Company Nestle Nutrition U.S Nestle USA Old Orchard Juice Co.

www.olives.com

113

www.sweetsandsnacks.com

www.nepacartons.com

6, 33

www.nestlenutritionstore.com

131

www.senecafoods.com

www.oldorchard.com

Potandon Produce

www.potandon.com

Premier Nutrition

107

www.premierprotein.com

Rudi’s Organic Bakery Ruiz Foods Products, Inc

www.rudisbakery.com

Inside Front Cover

www.ruizfoodservice.com

Save-A-Lot

Insert 35

www.save-a-lot.com

Sovena USA

www.olivarioliveoil.com

Stagnito Business Information

17, 74, 117

www.stagnitobusinessinformation.com

Stonefire Authentic Flatbreads

www.stonefire.com

Back Cover

www.roveliving.com

www.dukesmeats.com

Tabletops Unlimited Thanasi Foods LLC The J.M. Smucker Company Trion Industries Inc. Turbana Corp Tyson Foods Wholesum Family Farms World Tea Media

Cover Tip

www.smuckers.com

www.triononline.com

55 (Regional)

www.Turbana.com

84, 85

www.tysonfoods.com

www.wholesumharvest.com

111

www.worldteaexpo.com

Progressive Grocer (ISSN 0033-0787, USPS 920-600) is published monthly by Stagnito Business Information, 570 Lake Cook Rd. Deerfield IL 60015. Single copy price $10, except selected special issues. Subscription: $135 a year; Canada $164 (Canada Post Publications Mail Agreement No. 40031729. Foreign $270 (call for air mail rates). Periodicals postage paid at Deerfield, IL 60015 and additional mailing offices. Printed in USA. POSTMASTER: Send all address changes to Progressive Grocer, P.O. Box 1842 Lowell, MA 01853. Copyright ©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.

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March 2015 | progressivegrocer.com |

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the last word

As the Supermarket World Turns

he harsh winter weather that’s poised to give way to a muchneeded thaw before long in many parts of the country sets the stage for the churning upheaval simmering in every pocket of the retail food terrain. Te changes that have taken place in recent years might well seem like a dress rehearsal for those that promise to follow in the next 24 months, courtesy of a riveting series of developments that are bound to have lasting implications for the supermarket supply chain as we know it. A few of the most signifcant factors include: Te reawakening of Walmart, whose move to raise the hourly rate for 40 percent of its 1.3 million U.S. workforce is just one of several related initiatives on which the chain is embarking to recapture its alpha-retailer mojo. After abandoning its proft-sucking Canadian division, Target has unleashed a string of maneuvers to polish its bull’s eye by focusing on its digital strategy, the linchpin of which is free shipping for online orders of $25 or more. A growing sense of confusion and restlessness in the ranks of several banner-group independents struggling to pledge long-term allegiance to existing and/or prospective wholesale distributors, the latter of which has also seen dramatic disruption in the past 12 months. Initial micromarket deals that can potentially splinter to more impactful macromarket prominence, such as Sacramento, Calif.-based Raley’s recent GM/HBW warehouse deal with Unifed Grocers. Te fnal chapter — or yet another new installment? — in the continuing chronicles of A&P, whose fate has hung in the balance for the duration and which has all but vanished from the headlines in the past year. But the biggest plotlines dominating trade talk of late pertain to Haggen, which is plowing at warp speed through the conversions of 146 West Coast stores acquired from the Albertsons-Safeway merger. Rebranding stores while breathing life into an unfamiliar grocery banner in highly competitive new markets is no easy task, but Haggen’s new leaders are set on their ambitious, if not unprecedented, western U.S. expansion. Time shall tell. And speaking of thickening plots, the new AlbertsonsSafeway era has ofcially dawned, and with it, a cavalcade of scrutiny regarding what the future holds for the neophyte supermarket giant. While the new company’s leaders have

high hopes for an improved, invigorated shopping experience in tandem with an equally audacious plan to preserve the chains’ combined footprints, Dr. Kurt Jetta, CEO and founder of Shelton, Conn.-based TABS Group Inc., is skeptical about the long-range outlook in light of his assessment that “the two organizations couldn’t be more diferent.” Among the most signifcant disparities between the two organizations is their respective corporate procurement strategies. “While Safeway has long adhered to a centralized merchandising function, Albertsons has done the opposite, with a decentralized scheme for as long as anyone can remember,” according to Jetta. And though the combined company is poised to follow Albertsons’ decentralized model to facilitate local appeal, which Jetta says “sounds great on paper,” the reality, he adds, “promises to be far more complex. “‘Delighting customers’ on a local basis hasn’t always been Safeway’s strong suit,” he notes, pointing to “spectacular fameouts with Dominick’s in Chicago and Genuardi’s in Philadelphia.” Albertsons, meanwhile, has had more local divisional success, “but has also had its share of issues with its decentralized structure,” remarks Jetta, particularly in relation to “a hodgepodge of divisional computer systems and managerial approaches that haven’t always gelled.” On the other hand, Jetta continues, Safeway “has been held up as a model of centralization, at least from the standpoint of merchandising execution,” which he says has enabled it to “reap major cost savings and lower manufacturer costs for reinvestment to specifc marketing programs. However, Safeway couldn’t always convert those investments into additional revenue and, like Albertsons, has been dogged by challenging same-store sales.” Tat said, Jetta believes the fused company’s greatest promise is tied to Safeway’s highest concentration of stores along “the booming stretch between Seattle and San Francisco, and further down to L.A., San Diego and Phoenix.” Regarding “Albertsons’ sprawling family of store banners,” Jetta identfes Chicago-based Jewel, Philly’s Acme Markets and Boston’s Shaw’s as the most productive thus far. Based on his observations, Jetta is convinced that longterm viability for Albertsons-Safeway will require “dramatic, even radical changes,” to amplify efciencies. Meanwhile, although it’s too soon to tell what the reconfgured landscape will ultimately look like when turbulence settles , the world of food retailing has never been more fascinating to watch. PG

Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

The changes that have taken place in recent years might well seem like a dress rehearsal for those that promise to follow in the next 24 months.

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

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Retail Idea Book

Sealed Airâ&#x20AC;&#x2122;s CryovacÂŽ brand provides innovative, sustainable retail packaging solutions to help minimize food waste and help drive business across your stores.

To Our Valued Retail Partners:

ere at Sealed Air’s Food Care division, our business is not just providing the highest-quality products and services, but creating a better way of life through a sustainability approach. Sustainability is at the core of what we do. It is our mission to Re-imagine™ the industries and markets we serve to create a world that feels, tastes, and works better. Sealed Air Food Care is committed to growing and safeguarding businesses, conserving resources, and making the world a better place with improved food safety and protection. Nearly everything that we do today assists our customer in the pursuit of their sustainability goals. The food supply chain is met with many challenges. Consider these three issues that face us on a daily basis: • Food Access: We are producing more than enough food to feed the planet, yet hundreds of millions of people starve. • Food Safety: We have made significant advances in technology and distribution, but food contamination is still a large societal problem with fatal consequences regardless of wealth. • Food Waste: We are more conscious of the impact our actions have on the environment, yet we throw away billions of tons of food a year that could feed hungry people. As a retailer, you have an astute awareness of these challenges because of your intimate relationship with

consumers. Because of our commitment to sustainability, at Sealed Air Food Care we are here to help you in meeting these challenges head on with a variety of valuable solutions: • Operational Efficiency: Because of the Sealed Air Food Care solutions, both retailers and processors can enjoy a decrease in the cost to control freshness of food. Innovative packaging allows for less use of refrigerators and freezers, both in shipment and in store. • Shelf Life Extension: Our products can extend the shelf life of perishable foods, such as meat, cheese, baked goods, and produce, thus minimizing waste and shrinkage and extending the time in which a consumer can use the food before spoilage sets in. Our air-tight packages can extend shelf life from days to weeks or more, for many foods. • Brand Building: Our approach to sustainability impacts not only our customers, but also adds to the convenience aspect for consumers. Providing a sustainable, convenient, easy-opening package is a consumer benefit that contributes to a retailer’s reputation and aids in building a brand. Sealed Air Food Care enhances sanitation through the entire food chain from farm to fork and offers education about proper food storage, handling, and cooking. Our innovations and dedication to sustainability help promise a growing world that its food supply will be more plentiful, safer, and less wasteful.

Sincerely,

Karl Deily President, Food Care

SEALEd AIR Idea Book 2015

Infuencing the Industry with Innovation and Investment

ealed Air’s Food Care Division delivers innovative Cryovac® packaging solutions for products across categories and throughout the store, helping to reduce food waste in the supermarket by increasing the efficiency of food packaging – extending shelf life, reducing leakage and preserving freshness.

For decades, Cryovac® packaging has provided cuttingedge technologies to address our customers’ quest for efficiency. Today, we continue to innovate and invest to further enhance our solutions for retailers – developing innovative packaging materials and establishing long-lasting and beneficial relationships with retail partners. Offering retailers a total store solution, Cryovac® packaging options have foundations in thorough consumer insight and emerging technology, coupled with a clear understanding of the challenges facing both retail operators and shoppers today. And given that sustainability is a hallmark of successful operations today, we’ll address how sustainability efforts are woven throughout Sealed Air’s “value drivers” and product innovations. In these pages, you will find insights and solutions to operate more efficiently and thus more profitably, while meeting the needs of today’s demanding consumers.

The primary “value drivers” highlighted in this Idea Book include: Food Safety Operational Efciency Shelf Life Brand Building

Sealed aIR Idea Book 2015

Food Safety

ood safety has always been critical to any retail operation. And given today’s social mediainspired and well-connected world, more so than ever, one misstep in the area of food safety can significantly damage a food processor or retailer’s brand.

The innovative packaging solutions from Sealed Air’s Food Care division, under the well-known and well-recognized Cryovac® brand, tackle the task of helping to keep food fresh, protected and safe. Keeping the food supply chain safe and fresh from production to retail demands a thorough and holistic approach from many directions. In retail spaces, the opportunities to have food safety issues are numerable and demand high levels of attention and resources. At the store level, Cryovac® packaging solutions help to substantially minimize food safety risks, especially in the deli, meat and dairy case areas.

Sealed aIR Idea Book 2015

• 2 in 5 Americans report that they have given food and beverage safety A LOT of thought. • 2 in 5 have changed the foods they eat in the past year because of food safety information. Source: 2014 Food & Health Survey, International Food Information Council Foundation

Retail Challenge: Keeping workers safe and avoiding cross contamination

Solutions: • Case-Ready Tray/lid Packaging: The Cryovac® portfolio of tray/lid case-ready products for meat and poultry provide leak-proof design that minimizes cross contamination. The packaging also improves food safety and helps ensure a clean case. When used with a high-clarity, clear tray the package allows consumers to view all sides of the product. • Cryovac® QuickRip: This innovative bag for boneless fresh meat offers easy-open convenience for back-of-house meat departments. With no knife required, this high- performance packaging was designed specifically to improve efficiencies and safety. • TBG® bags: These bags have high tolerance for abuse, multi-layer barrier and built-in boneguard protection designed for vacuum packaging bone-in fresh pork. This enhanced product protection means less leaking and cross-contamination in the case.

• Cryovac Grip & Tear®: These easy-open, vacuum bags for the full-service deli offer enhanced worker safety in a wide range of product applications. By simply pulling a tab, the bag easily opens without sharp tools. No knives or scissors are required for opening – improving end-user safety – and the chance of product damage or cross contamination is reduced. • Hot-loc®: Designed to absorb excess grease, fat and juices from hot, pre-cooked products, these absorbent pads apply perfectly for supermarket products. These pads help prevent injury in the deli area by absorbing hot liquids that can potentially spill onto the floor or cause personal-injury burns.

Sealed aIR Idea Book 2015

Operational Efciency

fficiency drives successful business, thus catalyzes Sealed Air Food Care division’s commitment to working through retailers’ operations in order to press to new levels of operational efficiency. The Cryovac® brand’s innovative and state-of-the-art packaging solutions are easy to merchandise and execute at the store level to help generate operational efficiencies in multiple phases in the life of a product from the time it departs a processor through to total consumption by a consumer. Operational efficiency benefits from improved packaging are realized through a lower cost in shipping and handling; extended shelf life and thus higher efficiencies in store; lower labor

To control shrink, companies focus on:

costs by the need for less maintenance in the meat, poultry, produce and dairy cases; and convenience of use both in stores and in consumers’ homes. When surveyed for the Supermarket Food Shrink Study, prepared for Sealed Air Food Care division by Progressive Grocer, retail respondents indicated new or improved procedures that companies are implementing to control shrink are: • Better inventory control (buying, ordering and receiving procedures) • More or improved frequency of tracking/checking • Obtaining new equipment (security, cameras, etc.)

Better Inventory Control

More or Improved Frequency of Tracking/ Checking Source: Supermarket Food Shrink Study

Sealed aIR Idea Book 2015

Obtaining New Equipment

Retail Challenge: Create efective merchandising; prevent product waste to expiration; employ and engage skilled labor; and deliver fresh, unique and stable menu oferings in the deli

Solutions: • Darfresh® on Tray (shown above): This break-through vacuum skin package is the ideal solution for the meat case. The package offers: oxygen barrier for freshness; leak-proof; and a small carbon footprint. Additionally, vertical display capabilities allow for improved presentation, more product in the case, and less frequent stocking of the case. • Case-Ready: Case-ready packaging for poultry and other proteins entails innovation delivered through SES Poultry Films and MAP (modified atmosphere packaging) for other proteins. Industry-standard oxygen permeable stretch-shrink poultry films create a leak-resistant package for tray-pack poultry. MAP allows for case-ready product with extended shelf life, as well as more efficient stocking capabilities, eliminating the need to cut product in-store. • Cryovac Grip & Tear® Portion-Pull®: Designed for use with cheese or meats in a full-service deli, this easyopen vacuum packaging allows for maximum product visibility and superior graphics for shelf appeal, but also

exposes product only as needed, by pulling off 1-inch tabs. This innovation keeps the unused portion fresher, for longer, supporting quality and efficiency in the deli. • Freshness Plus®: From deli and bakery to soups and condiments, this active-barrier package delivers efficiencies and convenience at retail and for consumers. The packaging innovation maximizes freshness and product flavor over longer periods of time, thanks to the proprietary active oxygen barrier. This packaging delivers a lot: longer shelf life, expanded distribution, and a more sustainable packaging solution than most comparable options. • Oven Ease®: This ovenable product goes from the store into the oven in the package with little to no prep, no mess and consistent results. For in-store efficiencies in the deli, this packaging applies to meat or sides to heat reheat. This packaging also allows for limited-time or seasonal offers, meeting unique consumer needs and expanding innovation opportunities in the deli.

SEalED aIR Idea Book 2015

Shelf Life Extension

ore than half (55%) of respondents in the Supermarket Food Shrink Study said that shelf life is extremely or very important in the decision to carry a new product. This certainly isnâ&#x20AC;&#x2122;t news to the retail community, but in the study, prepared for Sealed Air Food Care division by Progressive Grocer, the correlation between shelf life, shrinkage and ultimately profitability became even more evident. 73% of respondents said that they believed that products that

increased shelf life five or more days would reduce shrinkage. Packaging not holding product freshness and package integrity were reported in the study to contribute heavily to in-store shrink by 15% of respondents, while package durability and package closures also generated concern by 14% of respondents. Findings indicate that reducing food spoilage and lengthening sell-by date would address the dominant cause of shrink at retail.

73% of respondents said that they believed that products that increased shelf life fve or more days would reduce shrinkage. Source: Supermarket Food Shrink Study

Sealed aIR Idea Book 2015

Retail Challenge: To prevent shrink due to food spoilage

Solutions: Cryovac® Freshness Plus®

Cryovac® Darfresh® 10K OTR

Cryovac® MAP Bakery

• Vacuum Packaging: This format extends shelf life, reducing waste and shrink and also presenting a more aesthetically pleasing presentation to shoppers. Vacuum technology preserves the appearance of the meat, thus driving sales and impulse purchasing, as well as addressing shoppers seeking longer dates for extended planning and usage in the home. A study from the National Cattlemen’s Beef Association in partnership with Sealed Air reported that 70% of consumers said they were willing to pay more for vacuum packaged beef after being educated about the benefits of vacuum packaging. • Darfresh® 10K OTR: This highly permeable film fits fresh and frozen seafood applications perfectly. It helps to eliminate cross contamination, preserve

product color, prevent freezer burn and increase yield. And the packaging meets FDA guidelines for fresh fish packaging. • Freshness Plus®: Cryovac® Freshness Plus® films put stateof-the-art active packaging technologies to work at retail. These films help protect food products from oxygen infiltration and flavor degradation, while also providing cleaner labels and allowing the removal of sachets from packaging. • MAP Bakery: Cryovac® modified atmosphere packaging (MAP) can keep baked goods fresh beyond 40 days, whereas typical packaging delivers a shelf life less than 14 days, at best. With MAP, bakery goods will look and taste fresher, and retailers will experience less shrink by keeping oxygen out and retarding mold growth.

SeAleD AIR Idea Book 2015

Brand Building

s consumers become more educated and thus more demanding in their purchasing behavior of consumer packaged goods, brand building has become more imperative than ever. Presentation of food is critical from a customer engagement standpoint. Consumers want ease and high function, and they want to feel confident in the quality of the packaging and thus its ability to keep food fresh and safe. According to the 2014 Power of Meat report, published by the American Meat Institute and Food Marketing Institute, the perception of case-ready meat is rising, crediting – and placing growing pressure on – packaging to present an appealing product that is fresh, easy to open and prepare, as well as sustainable. And brand continues to grow in being a key influencer on meat purchasing decisions. The report points to potential opportunities to improve packaging and thus build on brand images or change perceptions. Shopper-requested improvements for the meat department’s packaging include: more focus on portion-size variety, and more convenient and less messy packaging. The report indicates that shoppers put great value on solutions such as leak-proof and resealable packaging, and innovations that reduce food waste and are freezer-ready.

Cryovac packaging solutions make a big impact on brand perceptions and help build brands in many key areas. ®

Packaging innovation and solutions address in-store

Cryovac® Multi-Seal® FlexLOK™

Sealed aIR Idea Book 2015

60% of consumers report that enhanced packaging would prompt them to purchase more meat and poultry products. Innovations that infuence include: • Leak-proof packaging (63%) • Resealble packaging (62%) • Packaging that reduces food waste (61%) • Freezer-ready packaging (60%) Source: 2014 Power of Meat report

perceptions through positive appearance and freshness. Once in use, aroma, taste, the cooking experience and ease of preparation all are positively influenced by packaging solutions. And sustainability continues to grow as a positive influence on brand perceptions and purchase decisions.

Cryovac® Oven Ease®

Cryovac® Simple Steps®

Retail Challenge: To deliver on consumer demand for fresh, convenient, meal solutions

Solutions: • Simple Steps®: This microwave packaging technology saves time while maintaining high standards for food safety, quality and consistency. The vacuum skin enables gourmet presentation and freshness, with steam-assisted cooking technology ideal for the refrigerator in deli and self-venting to release heat and pressure, and avoid over cooking. Further supporting strong brand image, the skin removes potential for ice crystals and offers easy-open and stay-cool sides for convenience. • Multi-Seal® FlexLOK™ and Multi-Seal® FoldLOK: This family of reclosable products offers retailers greater profits by providing innovation, set standards for the case, maximized shelf space, better utilization in transit and long shelf life. Further, retailers give customers ultimate convenience thanks to easy-open and easyclose packaging, easy-to-dispense product, multiple reseal opportunities and user friendliness across customer demographics from kids to seniors.

• Oven Ease®: Straight to the oven from the case, Oven Ease® packaging allows for unattended cooking and encourages trial of unfamiliar cuts that shoppers may not know how to cook. The simple process of case to oven demands little preparation, less clean-up and consistent results. • Cryovac Grip & Tear® Small Tab: Offering the easyopening convenience of a vacuum bag that customers want, the small-tab packaging is good for the retail case, helping improve the usability of high-end cheese, meats and other smaller items. These vacuum bags aid in brand building and foster consumer demand given their easyopen functionality and skin-tight shrink, which allows for 360-degree, distortion-free graphics. • Dri-Loc®: These super-absorbent pads lead to more appealing packages that help keep food fresher longer. Specially designed for maximum retention, these pads are ideal for a variety of meat, fish and poultry. Drier display cases, fewer rewraps and downgrades, and an elimination of messes help driver impulse and repeat sales.

Branding continues to heavily infuence meat purchasing decisions. SEaLED aIR Idea Book 2015

Sustainability

reventing product waste through packaging solutions helps your eco-story, but also helps your bottom line. According to the Supermarket Food Shrink Study, respondents estimate that if shrink were eliminated from spoilage, age dating, package damage and markdowns, store profits would increase by 10%. This estimate rose to an increase of 14.5% among chains with more than 50 stores. At retail, waste means loss that could potentially have been prevented through innovative and up-to-date packaging solutions. Sustainability touches all areas of business.

Sealed Air weaves in sustainability efforts throughout the packaging process from concept through to execution on product in stores and in consumers’ homes. At retail, the Cryovac® brand delivers packaging solutions for reducing food waste and addressing critical issues, including: • Product spoilage – leak-proof/ resistant; vacuum or modified atmosphere packaging • Shelf life extension; freshness preservation

Store profts would go UP by 10% if shrink was minimized. Larger chains (50+ stores) estimate profts UP 14.5%. Source: Supermarket Food Shrink Study

Sealed aIR Idea Book 2015

A satisfying eco-story has its foundation in strategies that avoid wasting what you already have. One of the easiest ways to reduce food waste and minimize spoilage is to increase the efficiency of food packaging – extending shelf life, reducing leakers and preserving freshness. Accomplishing this goal is a tenet woven throughout Sealed Air’s business practices and a driver behind its on-going innovation in packaging materials. Sealed Air’s commitment is evident: • We operate our business to meet the highest ethical and environmental standards and consistently set new standards in the industries we serve. • We carefully consider how our products and services are ultimately used, consumed, and

disposed of in their target environments, and most importantly the collective impact they will have. • We utilize one or two possible approaches with our partners: SmartLife™ Life Cycle Assessment or Sustainability Goal Impact Assessment. Sealed Air and its Cryovac® packaging solutions offer global expertise and purposeful innovation that give retailers competitive advantages with the innumerable benefits of running a more sustainable operation. Sustainability initiatives have proven to support business success and longevity.

Sealed aIR Idea Book 2015

Total Store Solutions Cryovac® packaging solutions span the store, ofering innovation to drive efciency and proftability for valued retail partners. Some examples include:

Sealed aIR Idea Book 2015

DAIRY • Multi-Seal® FoldLOK for cheese • Cryovac Grip & Tear® small tab

BAKERY • Modified Atmosphere Packaging

MEAT CASE • Darfresh® on Tray • Cryovac Grip & Tear® • Oven Ease®

CENTER OF THE STORE • Multi-Seal® FlexLOK™ • Proaseptic (this is a shelf-stable pouch for beverages and fluid foods)

SEAFOOD • Darfresh® 10K • 10K OTR Bags

FULL-SERVICE DELI • Deli case: Cryovac Grip & Tear® packaging • To-go meals: Cryovac® Simple Steps®

PRODUCE • Cryovac® Simple Steps®

Sealed aIR Idea Book 2015

We improve access to a safer, higher quality and more sustainable food and beverage supply chain. Businesses rely on our innovative packaging and hygiene solutions and expertise to help build their brands and improve food safety, shelf life and operational efficiency while reducing food waste. To learn more, visit: www.sealedair.com/foodcare

Sealed Air 2015

® ™ are registered trademarks or trademarks of Cryovac, Inc. a subsidiary of Sealed Air Corporation