Progressive Grocer - May 2015 by ensembleiq

Nothing to Hide

Buehler’s bares all at its new flagship store Page 24

Sweet Destination

Exclusive PG research finds in-store bakeries’ stars aligned Page 71

On the Lamb

Special report explores the protein’s potential at retail Page 115

Get to the right place.

At the right pace.

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

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

That’s Tyson Velocity. That’s Tyson Deli / Bakery.

Nothing to Hide

Buehler’s bares all at its new flagship store Page 24

Sweet Destination

Exclusive PG research finds in-store bakeries’ stars aligned Page 71

On the Lamb

Special report explores the protein’s potential at retail Page 115

Page 39 May 2015 • Volume 94 Number 5 $10 • www.progressivegrocer.com

BREWED THE HARD WAY,

TO WORK HARD FOR YOU. The King of Beers is an asset on Grocery Store shelves. In fact, Budweiser accounts for over $1.5 billion in annual sales, meaning one case of Budweiser is sold from large-format stores every second. It’s a brand with so much stopping power that 54% of shoppers can recall seeing Budweiser on display.* Contact your local distributor to get your Brewed The Hard Way signage today.

#1 Hard Discount Grocery Designed for Independent Retailers Save-A-Lot has been developed with the independent retailer in mind. Contact us to learn why leading independent grocery and convenience store retailers have chosen Save-A-Lot as part of their expansion plans. Minimum $200,000 fnancial incentive. Comprehensive support including training, operations and marketing. Dedicated distribution of fresh meat, produce and exclusive private label brands.

To learn everything you need to know about opening Save-A-Lot food stores visit save-a-lot.com/own or call 314.592.9446

DRIVING GROWTH IN

Â© General Mills

THE YOGURT AISLE New Yoplait Plenti On-trend Innovation for the Greek Category

Now 25% Less Sugar Consumer-centric News for the Core Category

Trending Kid Partnerships Healthy Fun for the Family Category

ÂŠ2015 Goya Foods, Inc. *Top selling coconut water SKU (in Grocery outlets) Source: Nielsen Strategic Planner, Total US (unit sales), 52 weeks ending 9/27/14

May 2015

features

Volume 94, Issue 5

cover story

150

Produce category SPotlight

Rooted in Health

Historically humble vegetables ofer year-round nutrition and trendy tastes.

beverages

Store of the Month

No More Secrets Te best of Buehler’s is now on full display at its new fagship store.

SuMMer Beverage alcohol rePort

The Art of Craft Artisan brews, now mainstream, rev up to score their share of seasonal sales, in common with other beverage alcohol segments.

126

Show Preview

United We Connect Co-located events bring retailing ideas to Chicago.

fresh food 63

the SuPer 50

Win, Place or Show Continued M&A activity creates new players, ofers new opportunities and reshapes the look of our ranking.

PrePared foodS

Plotting the Future Branded items, breakfast oferings are poised to play bigger roles among fresh prepared foods.

iddBa 2015 dairy-deli-Bake Show Preview

candy

The Hidden Complexity of Candy Assortment and presentation are special sciences supporting sweets.

107

Upside of Sweet Trends Premium, shareables lead new candy launches.

2015 retail Bakery review

Bread Winners

100

trending at SweetS & SnackS exPo

In-store bakeries are taking their place as a key destination driver for a more discriminating shopper base.

grocery

115

SPecial rePort

In Like a Lamb Te time-honored protein is fnally getting its due in the United States — and food retailers can leverage its newfound popularity.

refrigerated & frozen 110 dairy

138

Produce

Growing the Future

Prescription Produce

See what’s on tap for this eagerly anticipated event.

Te industry unites in promoting healthier living through fruits and veggies.

Cool Possibilities June Dairy Month promotions aim to generate momentum in the aisle for the year.

May 2015 | progressivegrocer.com |

nonfoods 156 EnErgy BoostErs

A Shot in the Arm Grocers can take advantage of channel shifts for energy-boosting products.

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

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

158

2015 nACDs totAl storE Expo show prEviEw

The Business of Wellness Te NACDS Total Store Expo ofers insights on how to better interface with customers and suppliers.

160 pg pEt

Treat Them Right A growing segment of the overall pet category provides new opportunities for retailers.

technology

167

supply ChAin

Down the Road Te future of feet management depends in great part on emerging technology.

170

pos systEms

Point of Order POS systems are critical to enhancing the shopper checkout experience.

equipment & design 178 CEilings & Floors

| Progressive Grocer | May 2015

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

UNiTED STATES MARkETS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green

departments

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

EvEnts • MEdia • REsEaRch • infoRMation

Over and Under Using retailer and designer input, supermarket ceilings and foors are melding form and function.

10 EDiTOR’S NOTE: MySTERy MAchiNE 14 PG PUlSE 16 iN-STORE EvENTS cAlENDAR: JUly 2015 18 NiElSEN’S ShElf STOPPERS/SPOTliGhT: ShElf-STABlE JUicES AND DRiNkS/ciDER 20 MiNTEl GlOBAl NEW PRODUcTS: AiR cARE 22 All’S WEllNESS: PROMOTiNG hEAlTh AND PROfiTS WiTh PRODUcE 180 WhAT’S NExT: EDiTORS’ PickS fOR iNNOvATivE PRODUcTS 184 ThE SUPPliER SiDE 186 ThE lAST WORD: fifTy iS NifTy

Jeff friedman jfriedman@stagnitomail.com

cANADiAN MARkETS • Convenience • Pharmacy • Foodservice

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

S HAR E YO UR SU MM ER . #ITSMILLERTIME Shoppers purchase more beer in the summer than any other season and premium lights increase basket size and drive total category growth1 Miller Lite®, a real Pilsner with only 96 calories, is the perfect addition to any summer occasion Original light can volume is up 1.3% versus last year and white aluminum pint volume is up 6% versus last year2 Kick off the summer season with your shoppers and Miller Lite! 1

Nielsen Household Panel data Summer 2013; Margins and Turns from Willard Bishop Supermarket Study Jan 2013

Margin Minder STR BBL Volume 5/214 – 7/2014

editor’s note by Jim Dudlicek

Mystery Machine

s you might have guessed, my job allows me to visit a lot of different grocery stores all over the country. I’ve seen many sizes, styles and formats, and most are innovative in at least one way, if not several, aimed at enhancing the overall shopper experience. Tis puts me in a position not enjoyed by most folks not connected with our business. Still, with all of the strides that retailers have made, I was surprised to hear the results of a recent study indicating that most people are disappointed by their visits to the grocery store. According to a national customer experience supermarket study conducted by Fairfax, Va.-based Bare International, mystery shoppers reported that two of every three supermarkets they visited were “mediocre” or worse. Bare randomly selected 26 U.S. supermarkets, some units of large chains and others locally owned, for evaluation this past February. Te result: 62 percent of the facilities visited scored less than 90 percent (“mediocre” being below 90), with 53 percent earning a score of 85 percent or lower, and 19 percent scoring below 75 percent. Bare International President Michael Bare called the results “shocking, especially because many of those in the bottom 20 percent are part of large, well-known chains.” Te study’s mystery shoppers inspected fve departments in each supermarket: deli, bakery, meat, produce and prepared foods. Tey additionally rated such other experience factors as customer service, store cleanliness, and the appearance and conduct of staf. Bare concludes, “Tis shows us that the typical supermarket experience is not one that excites or even pleases consumers.” Tat’s shocking to me, too, especially because those departments are the showcases of most stores. Tat’s certainly the case at the new Buehler’s store, in Wooster, Ohio, demonstrating that grocers in small-town America are just as progressive as those in big cities. Fresh local produce, custom deli sandwiches and chef-created prepared foods are among the highlights of this bright, comfortable, easy-to-shop store. And how often can you sit at a bar in the middle of a supermarket, enjoying a glass of local craft beer on tap and a fresh-baked maple-frosted longjohn?

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

Most folks’ supermarket experiences are mediocre or worse? Zoinks! Buehler’s is our Store of the Month in this issue — read more about it, starting on page 24. And I know that grocers like Kroger, Publix and H-E-B are kickin’ it in the shopper experience department as well. It’s part of why they’re on the top end of PG’s annual Super 50 ranking of grocery retailers. Check out the full ranking and details of the top performers, starting on page 39.

Rumble, Rumble, Rumble … Who put eight great tomatoes in that little bitty can? Contadina tomato paste. Who told us about it? Stan Freberg, the father of the funny commercial. Freberg, who died last month at age 88, was a brilliant satirist and multiple Clio award winner who changed the way consumers looked at products like Sunsweet prunes (“Today the pits, tomorrow the wrinkles!”) and Cheerios (“the terribly adult cereal”), and who used devices such as lavish Broadway-style production numbers to promote things as mundane as canned soup. Tese TV spots and others can be found on YouTube and are worth checking out. I grew up listening to Freberg’s popular comedy albums, but his marketing techniques and their impact on the pre-store shopper experience were revolutionary for their time. Yet the man himself never took his signifcance too seriously. “Hey, folks, this is pizza we’re selling here,” Freberg once said, presumably in reference to the spots he produced for the Jeno’s brand, “not the Holy Grail.” PG Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

FAMILIES IN NEED ARE ASKING FOR MILK Milk is one of the most requested items at Feeding America® food banks nationwide. But donations fall far short of the need. That means many of the 16 million children who struggle with hunger every day miss out on milk’s high-quality protein and other essential nutrients. It’s a big problem.

The Great American Milk Drive® is the answer.

LIFT YOUR SALES BY DOING GOOD

Invigorate your milk sales without discounting

Drive foot traffic and new customers to your stores

Strengthen your community presence

MELISSA MALCOLM, MILKPEP Let’s discuss how to put The Great American Milk Drive to work in your stores. Mention this ad during our conversation and I’ll donate a gallon in your name for your time and interest.

1-800-945-MILK

mmalcolm@milkpep.org

Trion WonderBar ®

The System That Sells ™

Storewide Applications

Oversize Packages

Vac-Pack Meat

Dual Lane Merchandising

Salads

Maximize Your Merchandising Space. ■

Increases product facings and rows, lifts sales as much as 20%.

■

Maximizes visibility and shopability and billboards package design. Auto-feed trays and hooks assure a continuously well-faced display.

■

Simple design allows one-man installation in as little as one-tenth the time of traditional systems. Reset 48 facings in as little as 15 minutes. Replanogramming any product is a snap.

■

Easy tray dismount and rear-loading reduce labor, speed restocking, ensure product rotation, and reduce shrinkage.

■

Designed for center store, perimeter, general merchandise, soft goods, cooler and freezer use. Tool-free universal mount adapts to all major gondola and upright conﬁgurations.

■

Four bar proﬁles in both 3' and 4' lengths accommodate trays and baskets, bar-mount and plug-in hooks, auto-feed and security hooks, and horizontal and vertical sign and label holder systems.

■

System design options allow choice of 1" or 1/2" vertical adjustment and increased usable tray and hook depth for even greater display capacity.

■

Eleven standard tray depths available with width adjustment from 2-3/4" to 17-1/2." Mini system, oversize product trays, vac-pack deli trays, dual lane trays and others address all product needs.

■

A store tested solution. Over 5,000,000 trays sold and in use across retail. Proudly Made in the U.S.A.

Cheese and Fresh Pasta

Frozen Food

Candy and Gum

Tall Products

©2013 Trion Industries, Inc. Toll-Free in U.S.A. 800-444-4665 info@triononline.com www.TrionOnline.com Note: Product photography is a simulation of a retail environment and is not meant to imply endorsement by or for any brand or manufacturer.

What’s trending on Progressivegrocer.com …

Publix Pays it Forward by Giving Back PG applauds the 4,000-plus Publix associates across the company’s six-state market area who stepped up on April 17 to volunteer for some 125 local nonprofit organizations focusing on youth, education, and/or the plight of the hungry and homeless as part of the grocer’s first organized annual day of service. Under the Publix Serves initiative, associates donated their time and talents, along with $1,000 — plus $85 in honor of Publix’s 85th anniversary — per district, to help purchase items needed for food pantries, soup kitchens, backpack programs, beautification efforts and local libraries during the company’s April Give Back month. The effort is part of the Lakeland, Fla.-based regional grocer’s ongoing anniversary celebration, whose mission also includes sharing lessons from Publix founder George Jenkins with associates and customers. Throughout the year, a new lesson is shared monthly on http://corporate.publix.com. Well done, Team Publix!

Time to Repackage Chocolate Innovation? Over the five-year period 2009-14, chocolate confectionery sales grew 24 percent to $21 billion in the United States, the world’s largest chocolate market. Despite this growth, however, the United States trails the global chocolate market in terms of product innovation — North America accounted for only 12 percent of new products during that time, compared with Europe (51 percent) and Asia Pacific (21 percent). In the United States, chocolate confectionery innovation has focused largely on seasonal products — 42 percent of all new product launches last year — comprising mostly new takes on familiar products, such as a change in shape or packaging. —Mintel Global New Product Database

Store Brands Stake Claim As national brands continue to struggle with year-to-year lower growth, store brands’ sales in all major retail channels continue their upward trend, setting new records across the board for annual revenue.

23%

CPG brands that actively include Instagram as part of their social media strategy, despite the platform drawing followers at more than twice the rate of other social platforms

Total sales of private label products in the United States came in at $115.3 billion in 2014. Further, over a threeyear period, store brand sales increased by $5.5 billion across combined retail outlets — and by $2.5 billion in the supermarket channel.

—Private Label Manufacturers Association (PLMA)

Calling all Click-and-collectors

Meijer Inc. is the latest in a growing list of retailers incorporating an online ordering and pickup service into their operations. Dubbed Meijer Curbside, the service enables customers to fill digital baskets online and pick up their groceries curbside without leaving their cars — in as little as one hour. The program is currently being piloted at the Knapp’s Corner store in the grocer’s hometown of Grand Rapids, Mich., with plans for a larger rollout in the future. Accordingly, as online ordering continues to pick up steam, PG’s latest online poll question asked readers about the extent to which they’re adopting a click-and-collect program as part of their retail strategy. Here’s how the votes stacked up as we went to press: Currently have a program in place for all store(s) Have click-and-collect service in select stores Aggressively exploring options, with plans to launch soon

9% 28 33

No plans

—Yesmail

At the end of last year, private label accounted for nearly $3 billion in incremental sales overall, an increase of 2.5 percent over the previous year and more than twice the percentage gain recorded by national brands.

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

Double take.

Customers who know us will do a double take and quickly grab a box or two. Often. Those who don’t yet know John Wm. Macy’s CheeseSticks and CheeseCrisps – made with fresh sourdough, fine imported cheeses and select spices, then baked twice for the perfect crunch – will be thrilled at every bite of these bold, cheesy snacks and be back for more. Often. With five unique and delicious varieties of each, you’ll do a double take at the cash register. Often.

John Wm. Macy’s

CheeseSticks cheesesticks.com 800-643-0573

July 2015 is... National Grilling Month National Ice Cream Month National Blueberry Month National Hot Dog Month National Horseradish Month

awolfe@stagnitomail.com

O Canada! Make a display of your favorite products from our neighbors to the north to celebrate Canada Day.

E-mail your calendar submissions to

T Start planning your back-to-school newsletter now.

Eat Beans Day. Showcase this nutritious powerhouse in your stores’ prepared salads and soups.

Independence Day. Have plenty of backyard barbecue favorites in stock.

In honor of National Graham Cracker Day, put all s’mores ingredients on sale.

Offer shoppers free iced tea and lemonade today.

Celebrate National Blueberry Month with displays, farm photos, baked goods, nutritional information, recipe contests and special discounts.

Plan an ice cream social for the dog days of summer and to mark National Ice Cream Month.

National Fried Chicken Day

For National French Fry Day, create a display with DIY instructions in the produce department.

National Ice Cream Day and National Lollipop Day. Offer free samples.

As National Grilling Month winds down, check your supply of sauces, rubs and tools.

Celebrate Macaroni Day with a mac-andcheese display.

It’s the Major League Baseball All-Star Game today, hosted by the Cincinnati Reds.

To protest National Junk Food Day, donate produce and healthy snacks to a local women’s shelter.

Showcase your favorite milk chocolate truffles near the checkout for National Milk Chocolate Day.

Take a final look at your grilling displays, and begin a sale on all equipment to celebrate National Grilling Month.

National Gummi Worm Day

Set up a horseradish display that shows what it is and how it’s used for National Horseradish Month.

National Lasagna Day and National Chili Dog Day. Offer them on a cart in the front of the store.

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

National Sugar Cookie Day

National Corn Fritter Day. Have the bakery department whip up some of these fried treats.

National Hot Dog Day. Have plenty on hand — Americans consume 20 billion hot dogs a year!

National Cheesecake Day. Share your favorite no-bake recipes.

National Piña Colada Day

National Peach Ice Cream Day

Have extra muffins in the bakery for National Blueberry Muffin Day.

Eid Al-Fitr, the end of Ramadan National Caviar Day

Share creative margarita recipes on social media for National Tequila Day.

Jump for Jelly Beans Day In honor of Mutts Day, help promote pet adoptions at your local animal shelter.

National Hot Fudge Sundae Day Review all summer merchandise and plan clearance sales.

Front End

Market Intelligence By The Numbers GROCERY’S TOP 10

Shelf Stoppers

Shelf-stable Juices and Drinks Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Feb. 14, 2015)

Sales % Change Dollars (Millions) 2015 2014 $77.0 8.0% 2.1% 97.7 5.6 -3.9 1,793.7 4.0 -10.4 82.1 1.6 7.0 92.6 1.5 -0.5 90.3 1.4 2.3 60.6 1.0 10.8 346.8 0.7 -1.2 130.7 -0.7 -5.3 463.5 -2.7 -2.9

Prune Lemon/Lime Orange-Canned Pineapple Wine-Nonalcoholic Fruit Nectars Cider Fruit Juice-Remaining Fruit Drinks-Canned Apple

Total Category

$5,885.9

-2.7%

% Change 2015 1.8% 3.9 3.8 -0.1 2.5 -6.0 2.3 3.0 1.4 -0.5

Units 2014 0.0% -5.9 -12.3 6.5 -2.6 1.0 13.1 1.2 -3.0 0.1

-3.9%

-2.9%

-4.0%

NielseN’s Spotlight Consumption Index: Cider

CROSS-MERCh Candidates

LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Beyond the autumn holidays, cider is proving a popular juice beverage among startup, small-scale and especially older bustling families living affluent suburban spread and comfortable country lifestyles. That distinctively sweet-tart flavor isn’t just a favorite in households with kids, though: established couples, empty nesters and senior couples also enjoy cider sipping, particularly, among the last behavior stage, those in rural areas.

Modest Working Towns

Plain Rural Living

Total

WITh ChILDREN: startup Families

138

105

122

small-scale Families

128

121

106

104

Younger Bustling Families

129

Older Bustling Families

107

209

188

117

114

147

Young Transitionals

independent singles

senior singles

established Couples

116

125

133

108

empty-nest Couples

123

149

125

110

117

senior Couples

108

123

182

104

129

121

132

Total

101

126

100

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

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

Very High Consumption (150+)

High Consumption (120-149)

Average Consumption=100

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

• Photographic

Supplies • Fresh Produce • Yogurt • Fruit-Dried • Snacks, Spreads and Dips-Dairy • Baby Needs • Floral and Gardening Supplies More ONLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

mcgladrey.com/retail

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

Air Care MArket Overview The United States is the biggest global market for air fresheners, forecast to see the highest spend per capita in 2014 versus Canada and other countries. That said, U.S. air freshener sales are flat and compound annual growth rates are among the slowest globally. Though air care products have a high incidence of use (82 percent overall usage) and are popular with consumers, sales growth has been affected by consumers’ economizing mindset when shopping the category. The market also faces competition from scented household cleaning products. key issues There’s scope for brands to integrate new functional benefits, such as allergen reduction and antibacterial properties, into air care products as a means to influence consumers to pay slightly more for these offerings. The private label air care segment remains strong in North America, both in terms of new product development and sales, as consumers continue to shop for air fresheners/candles with a cost-savings mindset. Indeed, price is the second most popular product attribute, after scent, for consumers who use candles/air fresheners — most important to 57 percent of air freshener users and 63 percent of candle users. Private label new product development in 2014 in North America was most active in candles (56 percent of launches versus 25 percent for non-powered and 19 percent for powered), with high-end items from Yankee Candle and Bath & Body Works strongly driving new product development and focused on expanding scent innovation and choice.

What Does it Mean? New product development growth opportunity exists for more functional innovations focused on purifying air, repelling pests, aiding sleep and relieving stress.

Consumers’ continuing desire to economize when shopping for air fresheners/candles bodes well for private label products, particularly since retailers are not just focused on affordability,

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

but are also offering consumers increasingly varied fragrance choices as well as more premium elements, from gourmet scents to multifunctional benefits, natural formats and décor enhancement.

The time is ripe to promote good health and drive sales in the produce department.

All’s Wellness By Diane Quagliani

Promoting Health and Profits With Produce Retail dietitians can be a grocer’s go-to resource for boosting fresh sales.

ealthful, proftable, favorful and good-looking, too — what’s not to love about produce? First, consider sales. In 2013, total retail sales of fresh produce reached $87.6 billion, with $53.8 billion of those sales coming from supermarkets, according to Progressive Grocer’s 67th Annual Consumer Expenditures Study. Te produce category is growing steadily, with total sales up 4.4 percent in 2013, 3.5 percent in 2012 and 2.6 percent in 2011. Ten there’s terrifc nutrition. Produce supplies fber and many vitamins and minerals that people tend to fall short on. And science backs its health-promoting potential: Studies show that diets high in fruits and vegetables are associated with healthier body weights and lower risk for cardiovascular disease, type 2 diabetes and certain types of cancer. In theory, consumers are on board with produce. Eight in 10 consumers (83 percent) say they’re making an efort to eat more fruits and vegetables, according to the 2014 Food & Health Survey from the Washington, D.C.based International Food Information Council Foundation. But government consumption surveys tell a diferent story: Nearly 80 percent of Americans don’t eat recommended daily amounts of fruit, and nearly 90 percent don’t eat recommended daily amounts of vegetables. Clearly, the time is ripe to promote good health and drive sales in the produce department.

Tapping RDs Retailers nationwide are ofering an abundance of creative produce-promoting programs. Two recent examples of many are Wegmans Food Markets’ Love

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

Your Veggies weekend — jam-packed with veggiecentric cooking demos, tastings, games and giveaways — and the United Family’s launch of the Kids Free Fruit Program, which enables children to enjoy a gratis apple, orange or banana while their parents shop. Retail dietitians are key partners on the produce promotions team. Tey’re not just smart about sales and strong advocates for shoppers’ health, they’re also experts at using science-based information and educational methods to develop engaging health and nutrition programs, as well as messaging and signage that are aligned with government nutritionlabeling regulations. Further, they’re adept at targeting programs to shopper demographics and interests such as local, organic, non-GMO and convenience items, along with vegetarian, gluten-free and diabetes-friendly diets. What else? Dietitians can facilitate producethemed partnerships with local hospitals, health agencies and schools; spearhead social media campaigns; make traditional media appearances; plan seasonal sampling programs; and develop produce department tours for kids and adults. Dietitians also can advise on grab-and-go produce options to display at the front end; create nutrition messaging for featured sale items; write blogs and handouts that dispel produce myths (for example, it’s too costly or time-consuming to prepare); and develop easy recipes and meal ideas that star fruits and vegetables. In other words, the possibilities are almost limitless. So make retail dietitians your go-to resource to help close America’s produce consumption gap. It’s a win-win for your bottom line and the health of your shoppers. PG Registered dietitian Diane Quagliani, MBA, RDN, LDN, specializes in nutrition communications for consumer and health professional audiences. She has assisted national retailers and CPGs with nutrition strategy, web content development, trade show exhibiting, and the creation and implementation of shelf tag programs.

“OFF BRAND” CEREAL COMPANY? WE’RE THE CEREAL COMPANY WITH BRANDS THAT ARE REALLY TAKING OFF. Our Weight Watchers® line of cereals is further proof oof that MOM Brands not only has tasty, affordable and convenient covered, but wholesome too. No doubt about it, we’re doing more to help get families’ mornings—and your sales—off to a great start.

Find out more at MOMbrands.com/thinkagain

Store of the Month

Buehler’s Milltown, Wooster, Ohio

No More

The best of Buehler’s is now on full 24

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

AT YOUR SERVICE (L-R) Dan Shanahan, president and COO; Becky Foster, VP of construction and maintenance; Jack Kerby, store manager; Bob Buehler, EVP of marketing and fresh goods; and Bob Bly, VP of operations.

By Jim Dudlicek

SecretS

display at its new flagship store. Photography by Mike Sherrick

May 2015 | progressivegrocer.com |

Store of the Month

Buehler’s Milltown, Wooster, Ohio

CREAM OF THE CROP Buehler’s bakery turns out fresh baked goods like bread, cookies and its signature cream sticks every day.

products and new services, all under one roof to hat’s Becky Foster divulging how make our customers’ lives easier.” Buehler’s Fresh Foods used to It’s clear that the new Milltown store concept was build its supermarkets. In this designed with the customer foremost in mind. Among case, Foster — VP of construction the features requested by members of the focus panel: a and maintenance for the Wooster, drive-through pharmacy and a tech-savvy community Ohio-based 15-store chain — and Progresroom, both of which were added to the plan. sive Grocer are looking around the on-site Continued on page 30 scratch bakery of the extensively remodeled Milltown store, where treats like pies, cookies and Buehler’s signature cream sticks are baked fresh daily. “One of our best secrets is our scratch bakery,” Foster says. “We had to open that up and let people see what we do.” To be sure, the bakery’s nerve center is on full display for shoppers to see, as are the deli, prepared food kitchen and butcher shop. Te store is open and bright; aisles are wide and counters are lower, making associates more accessible to shoppers. “We listened to our customers through focus panels and surveys to incorporate their feedback into the design,” says Dan Shanahan, Buehler’s LISTENING AND LEARNING president and COO. “Te result was Kerby explains to PG Editor-in-Chief Jim Dudlicek how the new the evolution of new departments, new Milltown store was designed based on customer feedback.

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

REACH SHOPPERS

AND ACHIEVE GROWTH

WITH A NEW SET OF SOLUTIONS HAS STRENGTHS IN THE SEGMENTS THAT MATTER MOST

MORE TRIPS PER BUYER MINI MEALS / SNACKS

120 MEAL MAKERS

126 PACKAGED FRESH

120 VEGETABLE NUTRITION

105

WELLNESS

118

100

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

LARGER MARKET BASKET MINI MEALS / SNACKS

127 MEAL MAKERS

133 PACKAGED FRESH

124 VEGETABLE NUTRITION

108

WELLNESS

118

100 Source: IRI US PANEL, 52 Weeks Ending 10/5/2014 SM

Store of the Month

Buehler’s Milltown, Wooster, Ohio

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

Buehlerâ&#x20AC;&#x2122;s Fresh Foods 3540 Burbank Road Wooster, OH 44691

Grand reopening: Nov. 5, 2014 Total area: 102,075 square feet Selling area: 45,790 square feet SKUs: More than 69,000 Employees: 275-300 Checklanes: 11 registers, five self-checkouts Hours: Monday-Saturday 7 a.m.-10 p.m., Sunday 7 a.m.-9 p.m. Designer: BA Widder Architectural Services, New Philadelphia, Ohio; Davis Wince Ltd. Architecture, Powell, Ohio; Rumora Studios LLC, Baltimore

May 2015 | progressivegrocer.com |

Store of the Month

Buehler’s Milltown, Wooster, Ohio

Continued from page 26

liGHT uP THEir EyES Brick-oven pizzas are a highlight of the Chef’s Kitchen at Buehler’s.

Further, the Buehler’s team wanted to achieve a “fresh-frst” impression by moving the produce department from the rear of the store to the front. Tis move paved the way for the new state liquor agency store to be positioned in what used to be the produce area. Restaurant-quality prepared foods were also a priority. “Results from our surveys expressed the desire for quality fresh foods with no waiting, especially over the lunch hour,” Shanahan says. “Tis inspired our Chef ’s Kitchen options.” Adds Bob Buehler, EVP for marketing and fresh goods, and representing the third generation of family management, “We are thrilled to reinvest in the community by transforming our fagship store with the latest products, services and features found in the best U.S. supermarkets, and ofering these to customers in Wooster.”

Celebrating Food Signature departments of the new Milltown store include:

Te Kitchen Table, a casual dining area featuring a TV, freplace, lounge area and comfortable seating in a fun, relaxed atmosphere. Te Beverage Bar, with self-serve Scenic River signature cofees and a Coca-Cola Freestyle machine.

Ed and Helen Buehler founded Buehler’s in 1929 in New Philadelphia, Ohio. With an emphasis on customer service, free delivery, fresh produce, and a clean, friendly store, the original market prospered. Today, Buehler’s Fresh Foods is celebrating 86 years in the grocery business with 15 locations and an office/warehouse. The company is held 100 percent by Buehler family members under the newly created E&H Family Group, which also operates several Ace Hardware stores, and is

Te Big Beer Experience, featuring eight tap varieties of craft, specialty and local beers. A wine-tasting bar, ofering a range of wines in 5-ounce servings for $5 and up.

Chef ’s Kitchen, ofering freshly made, handstretched brick-oven pizza; custom-made sandwiches made with fresh-baked breads; authentic wok-fred Chinese foods; and sushi rolled by hand daily by in-store sushi chefs.

Buehler’s History

Buehler’s Bakery, where shoppers can observe the made-from-scratch production of artisan breads, gourmet mufns and various pastries.

A community room, ofering free meeting space to nonprofts, with foodservice and catering options. A new foor-to-ceiling foral department showcasing a variety of fowers and service capabilities. A state liquor agency — a store within a store — fanked by expanded beer and wine departments. “Our foodservice concept celebrates an array of fresh chef-prepared foods,” Shanahan says. Customers place their orders at the Chef ’s Kitchen counter, pay at the separate foodservice register, and choose Continued on page 34

managed by a third generation of Buehlers from the Wooster, Ohio, headquarters. “Ed’s business principles of offering quality merchandise at competitive prices, close control of operating expenses, and the recruitment and training of top-notch people has been passed through the generations of Buehler leadership,” says Bob Buehler, third-generation management and EVP of marketing and fresh goods. Meanwhile, fourth-generation family members have recently entered the company structure and are now actively involved in the business.

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

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Store of the Month

Buehler’s Milltown, Wooster, Ohio

Continued from page 30

Order’S UP! restaurantquality entrées, ethnic dishes and traditional favorites are available from Milltown’s Chef’s Kitchen.

CaSUal COMfOrt television, Wi-fi and a fireplace are among the amenities in the Milltown store’s cozy dining area.

to take their orders home or eat in the new Kitchen Table casual dining area. Te Chef’s Kitchen and Kitchen Table replace a full-service restaurant that formerly operated at this store, which frst opened in 1980. “Tis area is hopping at lunchtime,” notes Deb Wilcox, Buehler’s director of communications. Entrées include asiago chicken, ribs and pulled pork, accompanied by side dishes such as loaded twice-baked potatoes and broccoli slaw. Additional options include an expanded salad bar, a hot bar and a homemade-soup bar. Further, on Sundays, a brunch bufet attracts huge crowds that routinely fll all dining-area seats and often spill over into the community room. “Buehler’s commitment to hiring skilled chefs extends to the new Chef ’s School, a training room to test recipes and menu items that is viewable from the sales foor,” Shanahan notes. Guided by a team of chefs led by Aaron Gnap, the Chef ’s School demonstrates that, in the words of VP of Operations Bob Bly, “the experience is not just the eating — it’s the learning.” Te school hosts wine-pairing dinners for hungry Wooster-area residents eager to fnd out more about food. “It’s fun for our chefs to go one to one with customers,” Buehler says. “Tey talk to you while preparing your meal.” During PG’s visit, I chatted with the culinary team while enjoying a lunch of heirloom tomatoes with fresh mozzarella, a grilled pork chop with mushroom sauce and gouda mashed potatoes, sautéed vegetables, and a salted caramel brownie, all prepared right before my eyes. Wine-tasting evenings can draw from the ample stocks in Milltown’s new wine department, which ofers 1,000 varieties of wine and a tasting bar. Tat’s supplemented by a beer department that Buehler’s has dubbed the Big Beer Experience, featuring 800 beers, including eight varieties on tap,

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

and selections from local brewers such as JAFBWooster Brewery, Millersburg Brewery and Te Brew Kettle Brewery. Customers can purchase 32- and 64-ounce growlers to be flled while they wait; samples are available for 25 cents each. Te latest tap varieties are revealed on the store’s Facebook page. Together with the state liquor agency branch, Milltown boasts one of the largest liquor selections in Ohio. “Te opportunity to sample any of the high-quality draft beers prior to purchasing a growler is a real beneft to our customers,” says Store Manager Jack Kerby. “And with the addition of the wine-tasting bar, customers have the chance to sit down and relax with a glass of wine.” In addition to the front-and-center produce area, which features many local items (Buehler’s is the largest purchaser of local Amish produce), the Milltown store has an expansive meat and seafood department, including a full-service butcher shop. “We’ve always made an efort to buy from local and family-owned companies,” Buehler notes. Buehler’s ofers only Certifed Angus Beef (based in Wooster, not far from the Milltown store), some of it procured from Ohio farms and called out as such with on-pack stickers. Tere’s also poultry and other meats from local suppliers. “A lot of people in the community say they’d never shop anywhere else for produce and meat,” Foster declares. “We’re known for freshness and variety.” Te new dairy department is a walk-through arrangement with wide aisles, decorated in tribute to the agriculturally rich surrounding community with a whimsical Holstein-print foor and a curved ceiling in the shape of a barn roof. Closed cases conserve energy and ofer warm comfort to shoppers. Te Buehler’s team acknowledges mixed reviews on the decor: “People love it, or they don’t,” Shanahan quips. Shoppers on their way from the fresh area back to spirits can’t help noticing the focal point in the bakery area: a giant pink industrial-size mixer. Dating from the 1930s, this very mixer was used in the store’s bakery for many years and received its pastel hue when restored for display. “We had a Facebook contest to name it,” Kerby says. “Te winner was Humphrey Hobart.”

Engaging the Community It’s connecting with the community in this way that demonstrates another example of Buehler’s commitment to the people who’ve supported the business for more than eight decades. “We engaged the community during the remodeling process to make them a part of it,” Wilcox explains. In fact, many folks truly are a part of the market; customers and employees were given the opportunity to sign an I-beam that supports the front of the store. “It’s fun — when they come in and shop, they can fnd their name,” she says. Also, a dozen youngsters participating in the Buehler’s KidzPark program (free child care for kids age 3 to 9 while their parents shop) were randomly selected to put their handprints in the stone foundation in the store’s lobby. Consumer panels assembled to garner feedback revealed their afection for Buehler’s. “One person said, ‘don’t change anything,’” Shanahan admits; Foster is quick to add, “But they’re all happy now.” What did shoppers want most? “Tey wanted to see our produce department in the front,” Kerby recounts. “Our goal is to be a resource to the community as the place to shop, as well as a place to gather and meet,” Shanahan afrms, explaining how the store’s community room ofers nonproft groups a private room to hold their meetings rent-free, with catered food options available (the space had been occupied by an earlier cooking school format, which didn’t catch on). Te company often holds corporate meetings here, and recently the room played host to a book signing by self-help author and Skinnygirl Cocktails founder Bethenny Frankel, an event that drew more than 200 people. Buehler’s also hosts wellness presentations here through its partnership with Cleveland Clinic. Other key features: “We planned two separate entrance/exit areas,” Foster notes. “Te main entrance at the front of the store is fooded with natural light, and allows for easy access from either side of the parking lot.” Tis broad expanse, where visitors grab their shopping carts, has become a gathering place of sorts, where folks congregate to talk and check out the digital events board, which replaced a clutter of traditional paper notices. “It’s turned into a social kind of place,” Buehler says. “Tat was a surprise to me.” Meanwhile, the second entrance is at the side of the building for express runs to foral, cards, pharmacy, health and beauty care, and Te UPS Store, a Buehler’s-owned franchise. Ritzman Pharmacy, a leased partner, has a

new home at the front of the store for easy access, and now ofers customers a drive-through feature in Buehler’s pickup lane. Health-and-wellness products have been relocated near the pharmacy to complete the department. To further assist customers with wellness, Buehler’s partners with Cleveland Clinic to use the latter’s Go! Foods logo on products with no trans fats, minimal added sugars, whole grains and limited sodium. Te clinic also holds wellness talks in the store’s community room. “When checking out, Buehler’s customers enjoy custom loading of their groceries undercover via a one-of-akind conveyer system,” Foster says, explaining the system launched by Buehler’s some three de-

sChool’s in sEssion head Chef Aaron Gnap leads the store’s culinary team that educates as well as nourishes.

cades ago. Shopping carts aren’t allowed in the parking lot at Buehler’s; instead, checkers load groceries into large totes, which are whisked via conveyor belt to a sheltered vehicle loading area. As a result, there are no carts to ding customers’ cars, and no dirty cart wheels tracking rain and snow through the store. (It’s the grocery-loading system, along with the fresh prepared food areas, that accounts for most of the store’s aboveaverage back-of-house square footage.) “Tose of us who grew up in this area wouldn’t know what it’s like to push your groceries out to the car,” Foster remarks. For his part, Buehler recounted meeting a mother of twins who drives a half-hour just to shop at Buehler’s because of its online ordering and car-loading service. With Buehler’s online shopping service, Click, Load & Go, customers select their groceries online at least three hours in advance; then store associates pick the orders, bundle them and run them out to customers’ cars during the chosen pickup window. May 2015 | progressivegrocer.com |

Store of the Month

Buehler’s Milltown, Wooster, Ohio

Always Progressive Te community has embraced its new store since the grand reopening last November. “Te public response has been very positive for all our new ON THE SHELF concepts,” Kerby says. “All the diferent foodservice Wide aisles is really starting to catch on.” and ample Te single greatest challenge has been getting lighting make customers acclimated to where products and departfor an enjoyable shopping ments are located, Kerby says. “We handed out experience. store maps and have printed aisle directories on our shopping-cart handles to help assist customers with locating items,” he explains. “We also have employees looking for ‘lost’ customers, available to take shoppers directly to items.” One of the biggest challenges during the project was the length of time the remodel took. “We specifcally designed the construction timeline to minimize customer inconvenience by working only at night when the store was closed,” Buehler explains. “Tis commitment served for a constructionfree shopping environment, yet extended the remodel to 14 months.” Bogner Construction, based in Wooster, spearheaded the project. “We made a conscientious efort to support the local community by involving over 60 local contractors and businesses in the remodeling,” Buehler declares. “Te new Milltown store design and department concepts are the foundation for Buehler’s store remodels moving forward. We have the basic toolbox developed of brand colors, design elements and department composition. We will carefully evaluate the Milltown design —Dan Shanahan, — listening to customer feedback — to president/COO make appropriate modifcations to the basic design for future store remodels.” Buehler’s is big on giving back to the community philanthropically as well; the company has a long history of supporting and partnering with nonprofts. Wilcox says 2015 “marks a new philanthropic focus

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

to identify a core cause for corporate giving to make an even greater impact.” Te company is teaming with the Akron-Canton Regional Foodbank, which directly supports local member agencies such as food banks, shelters and pantries. “We are excited at the many opportunities to make a diference through not only monetary donations, but [also] through volunteer opportunities,” Wilcox says. Helping people is important to the company, as it’s people who make the diference in the high level of service it ofers. “We’re about putting people frst,” Buehler says. “Tat’s where we seem to excel over our competitors.” To that end, he participates in a share group comprising 20 noncompeting independent retailers who share ideas for best practices and addressing common challenges. Also, Buehler’s is working on boosting its digital initiatives; the grocer is active on Facebook and Twitter, now accepts Apple Pay, and is developing an online foodservice-ordering system to augment Click, Load & Go. “We try to be as aggressive as we can for a company our size,” Shanahan says. Further, Buehler’s is working on a video that showcases its back-of-house operations, which the store’s new design makes more visible to shoppers. “We have a story to tell there,” Buehler says, referring particularly to the scratch bakery. “It’s fnding ways to let people know we’re diferent — we know it, but we don’t always do a good job telling it.” At Buehler’s, “putting people frst” is not just a slogan — “this is our everyday commitment to value and respect our employees, our customers and our vendors,” Shanahan asserts. “We buy from local farmers, growers and suppliers when possible, supporting our surrounding communities. We listen to our customers’ concerns and ideas, and work to provide the products and services they deserve. We are actively involved in our communities, ofering turnkey fundraising opportunities for schools, charities and nonprofits. We provide top-notch training programs to our employees to give them the knowledge, food safety courses and customer service training they need to exceed customers’ expectations. We also promote from within, realizing that our employees are our valuable assets. We strive to make Buehler’s a great place to work, an enjoyable place to shop, a trusted retailer and a positive infuence in the communities we serve.” What’s more, as so many features of the Milltown store demonstrate, Buehler’s has always been an innovator. “Buehler’s is a small chain,” Shanahan says, “but we’re as progressive as anybody out there.” PG Learn more about Buehler’s Milltown store at Progressivegrocer.com/BuehlersSOM.

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Introduction

Win, Place or Show Continued M&A activity creates new players, offers new opportunities and reshapes the look of our ranking.

Analysis by Jim Dudlicek, Bridget Goldschmidt and Meg Major / Research by Debra Chanil

n interesting past year has made for some subtle yet signifcant changes in the latest edition of Progressive Grocer’s annual Super 50 ranking of the top grocery retailers. Te biggest change: Te recent merger of Safeway and Albertsons has created the third-largest operator in the United States, with the new combined company operating under the AB Acquisition moniker, which rose post-deal from its No. 7 position last year. (Target, ranked third last year, dropped several places, as we’ve based its ranking on sales from SuperTarget stores, which feature a complete grocery selection, versus regular stores ofering primarily general merchandise.) Tat union of grocery retailing might has created a new potentially formidable player on the West Coast. Up to now a small Northwest regional operator, Haggen has acquired 146 stores divested as a condition of the Safeway-Albertsons merger, allowing the Bellingham, Wash.-based chain to expand from 18 stores with 16 pharmacies to 164 stores with 106 pharmacies, with locations in Washington, Oregon, California, Nevada and Arizona. Led by an executive team that includes industry veteran Bill Shaner, Haggen will certainly take a strong position on next year’s Super 50.

Tese movements triggered a ripple efect that gave a leg up to several of our usual top 10 players, perhaps by a rung or two. Meanwhile, there are no surprises at the very top: Walmart, by its sheer size, dominates the market through volume sales, although it’s been struggling with samestore performance and experimenting with smaller-format stores as a way of competing against strong regional players that have managed to hold their own against the Bentonville, Ark., juggernaut. And Kroger rightfully holds its place at No. 2 as the nation’s pre-eminent traditional grocer, demonstrating that a clearly defned growth strategy, customer experience and consistent executive stewardship are the ingredients for seemingly perpetual success. For all grocers, shopper engagement has become increasingly important, as digital-savvy shoppers demand a customized experience that ofers them straightforward mealtime solutions. At the core of that equation remain price, selection and service, with cost containment and capital investment continuing to be crucial to delivering a fresh, relevant shopping experience that ensures consumer loyalty in a sea of competing retail channels. In addition to the ranking, we take a closer look at the list’s top 10 companies, beginning on page 40. May 2015 | progressivegrocer.com |

Retailer Analysis The Super 50 Methodology Each company profiled in The Super 50 was contacted by PG for guidance regarding the four categories included in the report: annual sales from their most recently concluded fiscal year, store count, top banners, and employee counts (either total or full-time equivalents). Full-time equivalent employees are the sum of regular workers, plus onehalf the number of part-time employees. In cases where companies didn’t respond, data was sourced from public records, including 10K and annual reports. For privately held companies, results are based on information from Nielsen TDLinx, which collects and maintains store information across all channels selling consumer packaged goods. Nielsen TDLinx uses Food Marketing Institute’s definition of a supermarket: a grocery store with a minimum of $2 million in annual sales; its data omits sales from convenience, drug and other retail channels that may be part of total revenue for some companies. Wholesale membership clubs such as Sam’s, Costco and BJ’s are also not included. Supercenters are included, but only for their grocery-equivalent merchandise. Not included are soft goods; clothing; general merchandise such as hardware, appliances, computers and auto service; and other items not common to supermarkets. Sales estimates from Nielsen TDLinx are presented in terms of all-commodity volume (ACV), which is defined as an annualized range of the estimated retail sales volume of all items sold at a retail site that pass through the retailer’s cash registers. Nielsen TDLinx’s ACV is an estimate based on best available data — a directional measure to be used as an indicator of store and account size, not an actual retail sales report. All data is collected by TDLinx from a wide range of independent sources, and then enhanced with computer modeling. Information shown is from the March 2015 database.

1. Wal-Mart Stores Inc. Never content to rest on its laurels, the world’s biggest retailer has continued to push the envelope, most recently by raising the salaries of its approximately 500,000 associates so that they now earn above the federal minimum wage. Te pay hike was part off a comprehensive investment in its employees, dubbed ubbed the Opportunity initiative, initiative which also includes greater scheduling fexibility and control, and new training for further growth and advancement beyond entry-level positions, along with expected changes to hiring practices and store structure. Although some observers have attributed the wage increase to mounting pressure from store-level workers and labor advocates, others have dismissed that as a motivation; Matthew Shay, president and CEO of the Washington, D.C.-based National Retail Federation, called the move “just another example of the power of the marketplace. Like many other retailers, Walmart made their decision based upon what is best for their employees, their customers, their shareholders and the communities in which they operate.” Other far-seeing initiatives put forth by the Bentonville, Ark.based company include a plan to roll out a much more data-driven merchandise selection as part of a major program to improve the in-store experience for shoppers, the launch of an online shopping portal to help customers identify and purchase sustainable products, and the championing of women-owned businesses in-store and online through an easily identifable logo on packaging. Te retailer also recently underwent a restructuring of its top management as part of a larger strategy to enhance the quality, consistency and presentation of its fresh food categories.

2. The Kroger Co.

Forty-fve consecutive quarters of same-store sales growth and counting — it doesn’t get much better than that for a grocer. And for Te Kroger Co. — the nation’s largest traditional grocer, which Business Insider says is “writing the playbook for the grocery store iindustry” — it’s become par for the course. p “Kroger delivered 12 months of consistently m rremarkable performance during 2014, fulflling d oour commitments to our ccustomers, associates and sshareholders,” Rodney McMullen, president and M CEO of the CincinnatiC based grocer, tells PG. b ““We captured more share Continued on page 48

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

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Company Ranking RANK

Company

Fiscal Year-end Sales (000)

No. of Supermarkets

Top Banners

Employees (Total or Full-time Equivalents)

Website

Wal-Mart Stores Inc.1 Bentonville, Ark.

$288,049,000

4,024

Walmart Supercenter (3,407) Walmart Neighborhood Market (600) Walmart Express (15)

1,235,000 TOTAL

www.walmart.com

The Kroger Co. Cincinnati

$108,500,000

2,625

Harris Teeter (233) Ralphs (218) Kroger Southwest (211)

400,000 TOTAL

www.thekrogerco.com

AB Acquisition LLC Boise, Idaho

$56,443,140

2,238

Safeway (912) Albertsons (282) Vons (207)

165,000 FTE

www.albertsons.com www.safeway.com

Publix Super Markets Inc. Lakeland, Fla.

$30,559,505

1,097

Publix (1,085) Publix Sabor (9) Publix GreenWise (3)

174,500 TOTAL

www.publix.com

Ahold USA Inc. Quincy, Mass.

$25,976,700

761

Stop & Shop (394) Giant-Landover (154) Giant-Carlisle (147)

72,000 FTE

www.aholdusa.com

H-E-B Grocery Co. San Antonio

$22,590,000

3632

H-E-B (258) H-E-B Plus (36) H-E-B Central Market (9)

85,000 TOTAL

www.heb.com

Delhaize America Inc. Salisbury, N.C.

$16,900,000

1,296

Food Lion (1,108) Hannaford (188)

100,000 TOTAL

www.delhaizegroup.com

Meijer Inc. Grand Rapids, Mich.

$15,400,000

213

Meijer (213)

65,000 TOTAL

www.meijer.com

Wakefern Food Corp. Keasbey, N.J.

$14,700,000

141

ShopRite (77) Price Rite (58) The Fresh Grocer (6)

50,000 TOTAL

www.wakefern.shoprite.com

Whole Foods Market Austin, Texas

$14.194,005

414

Whole Foods (414)

88,000 TOTAL

wwww.wholefoodsmarket.com

BI-Lo Holdings LLC Jacksonville, Fla.

$12,559,300

801

Winn-Dixie (528) Bi-Lo (201) Harveys (58)

52,200 FTE

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

Trader Joe’s Co. Monrovia, Calif.

$12,100,000

433

Trader Joe’s (433)

9,000 FTE

www.traderjoes.com

Target Corp. Minneapolis

$10,100,000

249

SuperTarget (249)

65,700 FTE

www.target.com

Aldi Inc. Batavia, Ill.

$9,800,000

1,366

Aldi Food Store (1,366)

21,000 TOTAL

www.aldi.com

Giant Eagle Inc. Pittsburgh

$9,600,000

222

Giant Eagle (208) Market District (12)

36,000 TOTAL

www.gianteagle.com

Supervalu Inc. Eden Prairie, Minn.

$9,492,000

625

Save-A-Lot (431) Shoppers Food Warehouse (54) Cub Foods (49)

38,500 TOTAL

www.supervalu.com

Hy-Vee Inc. West Des Moines, Iowa

$8,700,000

235

Hy-Vee (235)

69,000 TOTAL

www.hy-vee.com

Sales figure represents total annual sales; retailer does not break out segmented sales by category. 2 Store count includes U.S. and Mexico locations.

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

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Company Ranking RANK

Company

Fiscal Year-end Sales (000)

No. of Supermarkets

Top Banners

Employees (Total or Full-time Equivalents)

Website

Wegmans (85)

40,000 TOTAL

www.wegmans.com

Pathmark (101) A&P (86) Waldbaum’s (48)

22,000 FTE

www.aptea.com

WinCo (98)

10,000 FTE

www.winco.com

Wegmans Food Markets Inc. Rochester, N.Y.

$7,200,000

Great Atlantic & Pacific Tea Co. Montvale, N.J.

$6,300,000

301

WinCo Foods Inc. Boise, Idaho

$6,100,000

Defense Commissary Agency (DeCA) Arlington, Va.

$4,800,000

185

DECA Commissary (185)

11,000 FTE

www.commissaries.com

Save Mart Supermarkets Inc. Modesto, Calif.

$4,300,000

218

Save Mart (107) Lucky Store/Save Mart (60) Food Maxx (51)

13,655 FTE

www.savemart.com

Stater Bros. Markets San Bernardino, Calif.

$4,000,000

168

Stater Bros. (168)

18,000 TOTAL

www.staterbros.com

Roundy’s Supermarkets Inc. Milwaukee

$3,855,156

149

Pick N Save Store (90) Mariano’s Fresh Market (30) Copps Food Center (25)

22,000 TOTAL

www.roundys.com

Ingles Markets Inc. Black Mountain, N.C.

$3,836,000

202

Ingles (193) Sav-Mor Foods/Ingles Markets (9)

9,100 FTE

www.ingles-markets.com

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

$3,805,100

135

Price Chopper (135)

11,860 FTE

www.pricechopper.com

Demoulas/Market Basket Tewksbury, Mass.

$3,400,000

Market Basket (76)

8,100 FTE

n/a

Raley’s Supermarkets West Sacramento, Calif.

$3,061,500

126

Raley’s (76) Nob Hill (22) Bel Air Market (20)

8,700 FTE

www.raleys.com

Weis Markets Inc. Sunbury, Pa.

$2,800,000

163

Weis (163)

18,000 TOTAL

www.weismarkets.com

Smart & Final Inc. Los Angeles

$2,668,900

299

Smart & Final (201) Smart & Final Extra (98)

7,900 TOTAL

www.smartandfinal.com

Schnuck Markets Inc. St. Louis

$2,600,000

Schnucks (99)

9,959 FTE

www.schnucks.com

Tops Markets LLC Buffalo, N.Y.

$2,508,315

158

Tops Friendly Markets (158)

15,100 TOTAL

www.topsmarkets.com

Sprouts Farmers Market Phoenix

$2,463,240

201

Sprouts Farmers Market

9,834

www.sprouts.com

SpartanNash Co. Byron Center, Mich.

$2,284,200

162

Family Fare Supermarket (67) No Frills Supermarket (17) D&W Fresh Markets (11)

16,100

www.spartannash.com

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

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Company Ranking RANK

Company

Fiscal Year-end Sales (000)

No. of Supermarkets

Top Banners

Employees (Total or Full-time Equivalents)

Website

Brookshire Grocery Co. Tyler, Texas

$2,220,400

151

Brookshire’s Food & Pharmacy (117) Super 1 Foods (33)

13,700 TOTAL

www.brookshires.com www.super1foods.com

Houchens Industries Inc. Bowling Green, Ky.

$2,008,500

414

Save-A-Lot (197) IGA (88) Food Giant (54)

9,400 FTE

www.houchensindustries.com

The Fresh Market Inc. Greensboro, N.C.

$1,753,000

169

The Fresh Market (169)

12,400 TOTAL

www.thefreshmarket.com

Bashas’ Markets Inc. Chandler, Ariz.

$1,670,000

120

Bashas’ (54) Food City/Bashas’ Markets (47) AJ’s Fine Foods (11)

5,500 FTE

www.bashas.com

Big Y Foods Inc. Springfield, Mass.

$1,611,000

Big Y (61)

4,800 FTE

www.bigy.com

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

$1,535,000

103

Food City (92) Super Dollar Discount Foods (11)

5,500 FTE

www.foodcity.com

Grocery Outlet Inc. Berkeley, Calif.

$1,520,000

218

Grocery Outlet (218)

931 TOTAL

www.groceryoutlet.com

Foodarama Supermarkets Inc. Freehold, N.J.

$1,400,100

ShopRite (29)

3,800 FTE

www.shoprite.com

Inserra Supermarkets Inc. Mahwah, N.J.

$1,388,400

ShopRite (29)

3,100 FTE

n/a

Woodman’s Food Markets Inc. Janesville, Wis.

$1,284,400

Woodman’s (16)

2,700 FTE

www.woodmans-food.com

Village Super Market Inc. Springfield, N.J.

$1,236,300

ShopRite (28)

3,100 FTE

www.villagesupermarkets.com

Fiesta Mart Inc. Houston

$1,166,100

Fiesta Mart (58)

4,800 FTE

www.fiestamart.com

Central Grocers Inc. Joliet, Ill.

$1,129,700

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

3,400 FTE

www.central-grocers.com

Lowe’s Pay N Save Inc. Littlefield, Texas

$1,094,288

144

Lowe’s Grocery (124) Lowe’s Big 8 (15) Avanza Supermarket (1)

3,600 FTE

www.lowesfoods.com

Alex Lee Inc. Hickory, N.C.

$1,080,300

Lowes Food Store (77) Just Save (19) IGA (1)

4,850 FTE

www.alexlee.com

Marc Glassman Inc. Cleveland

$1,000,000

Marc’s (58)

5,700 FTE

www.marcs.com

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

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Retailer Analysis Continued from page 40

broad product selection, Kroger leads with its private label and loyalty programs, and is expected to pass Whole Foods Market within two years to become the country’s top seller of natural and organic foods. “We will continue to execute our growth plan, building on the foundation of our Customer 1st strategy,” McMullen says of the future. “We are committed to innovation, whether through expanding our digital capabilities to deepen our relationship with customers in new and exciting ways, or by pushing the boundaries on what customers can expect from our corporate brands. And we are investing to grow in both new and existing markets by pursuing our fll-in markets strategy and expanding our presence through our successful merger integrations with Harris Teeter and Vitacost.com.” Larger frozen food aisles and open dairy, meat and Looking toward its 2015 perforseafood cases are making your store colder than it needs mance, Kroger anticipates identical-sales to be. growth, excluding fuel, of 3 percent to 4 percent, and full-year net earnings of You know it because you watch customers racing through $3.80 to $3.90 per diluted share.

of the massive food market, continued investing to grow our business and created 25,000 new jobs. We are particularly proud of hiring more than 6,000 veterans last year. While we are very proud of this outstanding year, we are committed to even more.” Known for its top-notch customer service and

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3. AB Acquisition LLC (Albertsons-Safeway)

A signifcant development in the ongoing transition of third-ranked Super 50 contender AB Acquisition LLC — comprising Albertson’s LLC, New Albertson’s Inc. and Safeway Inc. — occurred in mid-April, when the company appointed its current Boise, Idaho-based executive chairman, Bob Miller, to assume the additional role of CEO as part of a four-person “ofce of the CEO” executive realignment. Robert Edwards, who was chairman and CEO of Pleasanton, Calif.-based Safeway and had been appointed Albertsons CEO at the closing of the merger earlier this year, has shifted to the role of vice chairman, where he’ll provide counFAST FACT

#11 Bi-Lo Holdings Inc. Call Us: 303.772.2633 1.888.247.7327 www.theairpear.com • info@theairpear.com

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

Veteran international retail executive Ian McLeod became the company’s new president and CEO in March, after Randall Onstead and COO Mark Prestridge abruptly departed in late 2014.

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Retailer Analysis

sel to the board and the organization on key strategic and integration n matters. With Edwards’ role reduced and the new Albertsonsheavy executive team bolstered, the move signifes what many observers believe is a preface to Edwards’ exit from the company in the not-too-distant future. “We’ve made signifcant strides in the time since the merger has closed,” says Edwards, “and I feel comfortable turning my focus to other matters that will be of the best beneft to the company.” In addition to Miller, AB Acquisitions’ realigned executive team — which will support the day-to-day operations of the company’s 14 divisions and 2,200 stores — includes Wayne Denningham, COO for all divisions; Justin Dye, chief administrative ofcer; and Shane Sampson, chief marketing and merchandising ofcer. Jim Perkins and Kelly Grifth will continue as EVPs of operations for the company’s regions. Denningham, Dye and Sampson have worked for Albertsons for years and were with the company before the Safeway acquisition was completed.

4. Publix Super Markets Inc.

Publix is going through a period of aggressive growth: As reported in its home state of Florida, the Lakeland-based supermarket chain has purchased six southwest Florida shopping centers over the past year for $86 million and has set aside $1.3 billion in 2015 to buy additional centers, construct new stores and renovate others. In 2014, Publix spent the same FAST FACT

#12 Trader Joe’s Ranking among the top 12 retailers on the 2015 Temkin Experience Ratings, Trader Joe’s sells twice as much per square foot as Whole Foods Market.

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

amount to open 32 new stores and buy shopping centers in the Sunshine State. Te company has also been steadily expanding in such markets as North Carolina. “Within the past year, we have opened eight stores … and continue with aggressive growth in the state,” Director of Media and Community Relations Maria Brous tells PG. “We also opened p a new distribution center in Orlando, Fla., and have continued to make improvements in h sstore designs and merchandising.” As part as its mission to enhance tthe shopping experience, the grocer has rrevamped its coupon policies, clarifying tthe limit on how much of one product a customer can buy using coupons, aallowing money back to go on a Publix ggift card rather than as cash to the ccustomer, and only honoring coupons tthat refer to product size. Such programs are a natural outgrowth of what Brous describes as “the relationship we share with our customers. Our associates engage with our customers every day in our stores. We hear from our customers and share information with them … on social platforms, in our stores, in our advertising and in our customer voice surveys. As a company, when we make important decisions, we weigh g the impact p to our associates and customers.”

It follows then then, that associates are also a major priority for the grocer. “As an employee-owned company, promotion from within is a key diferentiator for Publix,” Brous notes. “With company growth comes opportunity for advancement. We will remain focused on the training and development of our associates for advancement and our future growth.” Publix has even placed itself in the vanguard of public opinion, with its January announcement, ahead of the legalization of same-sex marriage in Florida, that it would expand spousal coverage of health, dental and vision beneft plans to all of its employees in same-sex unions, regardless of where they live. “[W]e believed it was the right thing to do to extend the benefts to all our associates across our six states,” Brous explained to PG earlier this year, “as we want our associates and their families to be healthy.”

our produce departments because we know how important fresh and healthy oferings have become to customers. Look for us to continue to develop exciting own-brand lines, which ofer the quality and value that customers expect from the national brands, but at more afordable prices.”

6. H-E-B

5. Ahold USA Tere’s no rest for the weary, as Ahold USA knows full well. But that hasn’t kept PG’s 2014 Retailer of the Year from retreating in the cutthroat derby that has mightily tested the company’s U.S.-based divisions under the watchful eye of its parent company in the Netherlands. As the grocer focuses heavily on improving its performance across the board, COO James McCann tells PG: “Te markets in which our retail divisions operate remain incredibly competitive, which is why we have embarked on a good-togreat journey to put our complete focus on improving the customer experience in stores. We’ve worked hard to save money across many areas of our business and have reinvested all of these savings into improving our value proposition, fresh oferings and service engagement,” which he says have enabled Ahold USA’s retail divisions to pick up market share and customer-tracking scores in the key areas of price and service. When asked about the key points the company will focus on in 2015 to strengthen its brand, McCann acknowledges: “While our good-to-great journey has created momentum for the business, there is still much left to do; 2015 is about getting to great even faster. Our focus remains on staying ahead of growing trends such enabling our customers to shop where, when and how they want, and transforming FAST FACT

#15 Giant Eagle Focusing heavily on revenue-generating and cost-saving measures as part of its Vision 2020 company-wide improvement process, the multiformat food, fuel and pharmacy retailer has prioritized sustainability as a key component.

H-E-B is not only a favorite in its home state of Texas, it scores high among industry observers as well, including a spot among the top 12 companies on the 2015 Temkin Experience Ratings, which rank the quality of customer experience delivered by large organizations. Te San Antonio-based privately held grocery chain is one of retail’s most infuential players, leading the way to what PG’s Meg Major calls “a new era of transformative diversifcation to test, learn, explore — and ultimately seize — new opportunities to meet consumers’ needs and expectations.” For example: After a decade of perfecting its highly tailored midsize and larger-store formula, H-E-B is poised to open its frst combo small-

f format market/gas k / station in its d downtown S San Antonio stomping grounds in fall 2015, as Major described in a Progressivegrocer.com column earlier this year. Te 12,000-square-foot concept store will be a proving ground for H-E-B to experiment with new oferings, delivery methods and inventory management for a smaller box. “Texans know that H-E-B is the best grocery store in America,” Business Insider opined in February. “Te chain has been providing a superior shopping experience for much longer than Whole Foods.” Additionally, Glassdoor.com ranked H-E-B seventh in its latest annual “Best Places to Work” rankings last December, with one reviewer calling the grocer “one May 2015 | progressivegrocer.com |

Retailer Analysis FAST FACT

#17 Hy-Vee The grocer’s commitment to healthy lifestyles is increasingly evidenced by its ever-growing HealthMarket departments featuring natural and organic products, consulting services of in-store dietitians and chefs, and consumer and employee wellness programs.

of the few companies that actually cares.” Among the reasons for this success: a 900item produce section, a highly local private label program, chef-prepared free samples and stellar customer service. Meanwhile, Te Dallas Morning News has speculated that H-E-B is mulling an expansion in north Texas, reporting that the grocer has purchased at least a dozen locations in the region. Currently, H-E-B operates fve of its Central Market specialty food stores in the Dallas-Fort Worth area.

7. Delhaize America Inc.

Cognizant of the signifcant work that remains to be done to deliver on an ambitious agenda established in March 2014, Salisbury, N.C.-based Delhaize America has made a solid dent in moving the needle forward to strengthen its competitive stance. “Across all of Delhaize America, we are developing a customer-focused organization with winning business strategies for both Food Lion and Hannaford in our local markets,” Delhaize America President and CEO Kevin Holt tells PG. “At both banners, FAST FACT

#19 Great Atlantic & Pacific Tea Co. A&P’s September 2014 refinancing of its existing senior debt on terms favorable to the company, following upgraded ratings outlooks, will enable it to focus on investing in its business and ramping up growth strategies after years of financial turmoil.

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Retailer Analysis we’ve put the customer back at the center of our business and are making sure that we operate with a local focus to serve our customers and diferentiate both banners in the markets in which we operate.” Holt points to pilot work under way at Hannaford, which is currently testing additional fresh and healthy concepts in prototype stores, including a large-scale store and a smaller-scale location. Additionally, he continues, “Hannaford is continuing to diferentiate in the marketplace by further strengthening service and quality, which is already a core attribute for the Hannaford brand. Meanwhile, Food Lion unveiled 76 remodeled stores last year in the Wilmington, FAST FACT

#23 Stater Bros. This stalwart on the Southern California grocery scene for nearly 80 years — 40 under the leadership of CEO Jack H. Brown — has seen positive annual sales for the past 35 years.

N.C., and Greenville, N.C., markets, and is currently remodeling approximately 160 additional stores in the Raleigh, N.C., market to bring its ‘Easy, Fresh and Afordable. You Can Count on Food Lion Every Day!’ strategy to life.” Tus far, the eforts appear to be trending in the right direction. “We are very pleased with the work underway at Delhaize America and are con-

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Retailer Analysis fdent about our strategies that have helped create a stronger position in an extremely competitive marketplace,” adds Holt. Looking ahead to what comes next, Delhaize America is focused on several key areas, which includes “creating a customer-centric organization by ofering excellent service, enhancing our assortment based on customers’ local preferences, and ensuring we are a trusted brand in our communities, known for supporting our neighbors and being a good environmental steward,” Holt afrms. “We will continue to focus on delivering our strategies within our local banners and winning new customers, as well as growing our relationship with existing customers throughout 2015.”

Meijer experience to new customers in Wisconsin this summer,” says Frank Guglielmi, senior director of communications at the Grand Rapids, Mich.-based retailer. Meanwhile, Meijer revealed last month that it plans to invest nearly $50 million to extensively remodel four of its stores around Dayton, Ohio, with enhanced “intuitive” foor plans to allow for expanded selections in departments throughout the stores, which are expected to launch later this year. “Our customers expect high standards from us, and our investment in these stores will ensure they enjoy the best shopping experience we can provide,” says Meijer Co-Chairman Hank Meijer. Now with more than 200 round-the-clock stores throughout the Midwest, the retailer has grown steadily by focusing on fresh grocery options, value to customers and community partnership. Further, the company just launched Meijer Curbside, which allows customers to shop online and pick up their groceries at the curb without leaving their cars; it’s being piloted at one of the Grand Rapids stores. “Te way customers shop for food is changing, and Meijer Curbside is one more way we are striving to fnd solutions to everyday challenges,” says Michael Ross, VP of customer marketing and emerging technology. Additionally, Meijer is backing Fresh Tyme Farmers Market, a new natural and organic food chain that’s been expanding rapidly throughout the Midwest; it opened its frst Chicago-area store a year ago.

8. Meijer Inc 8 Inc. Superstore retailer Meijer is in expansion mode. More than two years after publicly confrming that it was considering opening stores in Wisconsin, Meijer is in the home stretch of construction of four new supercenters in the greater Milwaukee area. As reported on Progressivegrocer.com earlier this year, Meijer has plans for additional stores in the area and throughout the Badger State, and expects to open two to three new Wisconsin stores each year for the next four years. “All of us at Meijer are looking forward to bringing the FAST FACT

#24 Roundy’s Supermarkets Inc. Despite the great success of its Mariano’s Fresh Market banner and an uptick in net sales, Roundy’s continues to struggle; this past year, the company withdrew from the Twin Cities market and posted a net loss approaching $253 million.

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

9. W 9 Wakefern k f FFoodd C Corp. Over the past year, Wakefern Food Corp., the largest retailer-owned cooperative in the United States, whose members operate stores under the ShopRite banner, has gone from strength to strength: At its annual shareholder meeting held last October, the Keasbey, N.J.-based company

Retailer Analysis revealed a record $14.7 billion in retail sales for the fscal year ending Sept. 27, 2014, a 4 percent rise from the year-ago period. “Year after year, Wakefern continues to grow and adapt to meet the needs of an ever-changing industry and an increasingly demanding customer,” President and COO Joe Sheridan said at the meeting. “After more than 65 years in this business, we rely on the lessons from past successes while always looking to the future for new and better ways to help our members succeed.” Also last year, Wakefern received fnancing from CIT Bank, the U.S. commercial bank subsidiary of CIT Group Inc., a Livingston, N.J.-based provider of commercial lending and leasing services, with the proceeds to go toward new equipment and store upgrades. “CIT worked closely with us to develop a customized fnancial solution that will help us pursue our growth objectives,” the company’s CFO, Doug Wille, noted at the time. As for happenings at store level, the chain has continued such enduringly popular programs as its annual winter and summer Can Can Sales, which have resulted in more than 3 billion cans of food sold since the initiative began back in 1971.

10. Whole Foods Market Driven by consumers’ demand for fresh, healthy foods, Whole Foods Market is continuing its robust expansion, the Austin, Texas-based chain having signed leases for eight new storess in the United States and three in western Canada, with additional stores in development. As Progressivegrocer.com m reported earlier this year, the U.S. stores are planned for Baltimore; Bellingham,, Wash.; Bridgewater, N.J.; Charlotte, N.C.; Chicago; Mandeville, La.; Sarasota, Fla.; and Toledo, Ohio. Te grocer will open its Canadian stores in Calgary and Edmonton — Whole l Foods’ d ’f frst locations l in the h province off Alberta Alb — as well as Victoria, British Columbia. “Whole Foods Market has been in Canada for more than 10 years,” said FAST FACT

#26 Price Chopper/Golub Corp. Armed with learnings gleaned from its Market Bistro concept and other customer insights, Golub Corp.’s rebranded Market 32 stores will feature more foodservice options, an enhanced product mix and a re-emphasis on customer service, while including key elements of the savings platform offered by the company’s Price Chopper locations.

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Retailer Analysis Joe Rogoff, president of Whole Foods’ Pacific Northwest region, adding that the “individualized store experience has created strong relationships between the brand and our customers, and has enabled us to grow to 10 stores in B.C. and Ontario.” Whole Foods, which currently operates more than 400 stores, with an additional 116 stores in development, is working to shed its “Whole Paycheck” image by making natural and organic foods more accessible to the masses. To that end, it’s planning stores in underserved urban areas where residents would be otherwise hard-pressed

FAST FACT

#27 Demoulas/Market Basket Since Arthur T. Demoulas’ return to the helm of Demoulas Supermarkets Inc./Market Basket, store sales have rebounded and five new stores have opened over a four-month period.

to fnd or aford such products. As Co-CEO John Mackey told Bloomberg in January, “We are now going to make sure we tell customers what we are about: values and value.” After sagging performance over the past two years, the company cut prices to attract customers and drive sales. Te result, as noted on Quartz. com in February: Whole Foods beat earnings expectations for the second consecutive quarter and reported record revenue and higher-than-expected income, despite shrinking proft margins. Further, the company is expanding its instore dining and bar options, beginning with four new stores in Chicago. As PG’s Meg Major reported in February, its Streeterville location in that city, the frst of seven former Dominick’s converting to the Whole Foods banner, is the frst to feature an in-store venue ofering raw and vegan foods via a partnership with Chicago restaurant Raw. PG For more about companies on PG’s Super 50, visit Progressivegrocer.com/Super50.

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Future

Branded items, breakfast offerings are poised to play bigger roles among fresh prepared foods. By Bridget Goldschmidt

taten Island, N.Y.-based Key Food banner Olive Tree Marketplace, Progressive Grocer’s March 2015 Store of the Month, prides itself on being a real destination for prepared foods, with a broad array of oferings ranging from fst-sized meatballs to red quinoa salad, and including many gluten-free, low-sodium and low-sugar options. According to co-owner Dave Shehadeh, the store’s prepared foods are a big hit with area residents, particularly among students at two nearby colleges and a high school, who often drop by to pick up lunch. Do prepared food-intensive store formats like Olive Tree Marketplace’s and the much-publicized “grocerant” concept herald a long-term trend? Certainly, prepared foods have never been more

popular, particularly among a certain demographic. According to Acosta Sales & Marketing’s July 2014 Te Why? Behind Te Dine Shopper Survey, conducted in collaboration with Chicago-based market researcher Technomic, 16 percent of total U.S. diners reported eating grocery prepared foods at home more often, compared with a whopping 27 percent of Millennials (eating such items in a grocery store’s dining area was also up, by 10 percent for total diners and by 19 percent for Millennials).

Hotter Than Ever “Fresh meal solutions continue to be hot,” afrms John Dunne, EVP of fresh foods at Jacksonville, Fla.-based Acosta. “Quality daypart meal solutions are ofering busy shoppers restaurant-quality food at modest prices, and their variety is only expanding.

FrEsH DEsTinaTion olive Tree Marketplace’s huge prepared food offering is a big hit with shoppers.

May 2015 | progressivegrocer.com |

Fresh Food

Meal solutions are a real winwin as both consumers and retailers capitalize on quality and convenience.” —John Dunne, Acosta Sales & Marketing

ChiCken to Go Chester’s international’s mascot, Chester the Chicken, celebrates the availability of the brand’s products at a grocery store.

Prepared Foods

We are seeing more better-for-you options — think whole grains and organic salads — that appeal to younger and more health-conscious consumers, new favor profles for adventurous eaters seeking diverse global tastes, and more personalized options for individual diners and families alike. Consumers can create new experiential opportunities by purchasing a variety of items to share in a community-dining setting. Tese types of meal solutions are a real winwin as both consumers and retailers capitalize on quality and convenience.” “Prepared food departments are becoming more and more important to consumers, especially as they are evolving into an alternative to eating out at restaurants,” says John Becker, director of marketing at Sandridge Food Corp., a Medina, Ohio-based manufacturer of fresh refrigerated prepared foods. “Consumers are looking for highquality products and recipes that require little to no preparation time. Te prepared food department is the perfect solution for those consumers looking for great-tasting food on the run. “Some of the trends we’re seeing in the foodservice grocery channel revolve around creating an experience for the end consumers,” Becker continues, pointing out that Sandridge works closely with retail customers on developing innovative ideas. “By ofering craft beers or a restaurantstyle eating area in the store, retailers are allowing customers to enjoy their experience shopping at their store.” When asked about current sales of prepared foods, Dunne characterizes them in general as “very healthy, outpacing all other segments of the store perimeter, as shoppers recognize relevant value in convenience, food quality and increased options.” Tis powerful combination adds to the “excitement and experience of the ‘thrill of the hunt’ for shoppers,” he goes on to explain. “Retailers that have invested in labor, service and signage are developing loyal and frequent shoppers. Some retailers have identifed daily specials to market appetizers, entrées, sides and desserts; gain trial; and showcase their menu of oferings.” “Prepared food sales are very strong,” agrees Jef Skipper, VP, marketing at Montgomery, Ala.-based Wynn’s Grain & Spice, which specializes in breaded items at foodservice. Besides daily specials, Skipper notes, “Other retailers report sales increases by ofering an in-stock guarantee during peak hours.” Te undisputed star of the prepared food section is chicken, “with an increase of 9.4 percent in rotisserie sales and 8.9 percent in fried chicken sales over the

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

previous year,” Skipper observes. “Repeat customers often turn to chicken as a tried-and-true favorite.”

Compliments to the Chef Contributing in a major way to a prepared food program’s success is the chef in charge of it all. At Olive Tree Marketplace, that would be co-owner Hani Qassis, whose experience spans such prestigious posts as the White House and Yankee Stadium, and whose hands-on perfectionism ensures that every item prepared at the store is up to his exacting standards. “Corporate chefs are huge assets to the prepared foods department,” elaborates Dunne. “Tey lend credibility and authenticity that make fresh prepared foods even more compelling for consumers. By understanding food trends and favors and innovating in the kitchen, they’re able to create exclusive recipes, limited-time ofers and daily specials unique to specifc stores that ultimately drive trafc and loyalty. Retailers can also leverage their expertise in the kitchen as a means to reduce shrink by repurposing foods, for example using unsold rotisserie chickens to make chicken pot pie, chicken noodle soup, chicken salad, etc.”

Brand Boosting Almost as important as the care taken to produce a wide range of items daily in a small but efcient onsite kitchen is the fact that everything made at Olive Tree Marketplace — gourmet meals to go, soups, sauces, savory stufed breads, and more — carries the banner’s brand, including a distinctive logo. A strong brand, whether a store’s own or that of a well-known company, can provide a clear advantage. “Branded prepared food products leverage the beneft of brand essence; consumers know what they like and what to expect,” explains Dunne. “Tis strategy works best for products like soups,

Fresh Food

enough to eat along with its signature fried chicken, Chester’s International offers a range of home-style sides.

Prepared Foods

salad dressings, condiments, chicken, macaroni and cheese, and mashed potatoes.” “Tere are several benefts to retailers [of] providing branded food in their prepared foods department,” says Sandridge’s Becker. “One of the most important benefts is giving their customers the peace of mind that what they are buying in their store is familiar and trusted. Brand awareness is powerful in the mind of consumers, and it is helpful to have a familiar name available in their prepared foods department.” Branding works particularly well for “unique, not easily duplicated products, such as potato salads or fresh grain salads, [which] are great products to ofer with a trusted brand,” he adds. “By providing these branded options to customers, it allows retailers to have a more diversifed product ofering.” Hoping to capitalize on brand recognition among grocery store shoppers, Chester’s International, a provider of fried chicken and sides like

g gravy, green beans, cole sslaw and baked beans, iin April introduced a program tailored specifp ccally to supermarket delis. Te program “delivers the T product quality and conp ssistency [consumers] are llooking for,” notes Laura C. West, emerging projects C manager, marketing at m Birmingham, Ala.-based Chester’s, a sister company of Wynn’s Grain & Spice. “Our independent supermarkets leverage the Chester’s in-store digital promotions board, local store marketing programs and circular artwork.” According to Chester’s materials, supermarket operators participating in the program “receive high-quality products, best-in-class training, ongoing operations support and a comprehensive marketing toolkit.” Te materials promise “6 Simple Steps to Opening in 60 Days or Less,” with only minimal equipment — the aforementioned digital promo board and a Giles breading and batter table — required. Chester’s program also ofers the

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Fresh Food

Prepared Foods

optional features of in-store branding elements, additional products and a cold chicken sales program. When it comes to promotion and placement of branded prepared foods, grocers “must ofer simple solutions that answer the age-old question of what’s for dinner,” asserts Dunne. “Tey’re essentially selling convenience and quality, and the benefts of being a one-stop shop need to be communicated in market-

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ing and merchandising. In-store signage should be clean and clever to entice consumers who are shopping for other items to pick up prepared foods. “Clear communication is key when marketing branded products,” recommends Becker. “An easily recognizable brand, logo and nutritional claims are helpful when marketing products.” “Bundling programs that pair entrées, side dishes and drinks are also great ways to drive incremental purchases while ofering complete meal solutions,” suggests Dunne. As prime examples of such product pairings, West suggests hand-breaded or rotisserie chicken with home-style sides, adding, “Chester’s Combo meals resonate with consumers, as they are easy and delicious home meal replacements.” “Additionally, brand loyalty rewards programs and digital marketing solutions, especially online ordering for in-store pickup, can make a measurable impact on purchasing decisions,” notes Dunne.

The Breakfast Club Te next big prepared food daypart looks set to be the frst meal of the day. As Schaumburg, Ill.-based Nielsen found last year, the $104.7 million deli breakfast category, “driven by the strength and popularity of the breakfast sandwich,” had experienced a combined annual growth rate of 7.9 percent over the previous fve years. Te company also noted lesser but still signifcant growth for breakfast-oriented frozen foods, packaged breakfast meals, breakfast sausage and in-store bakery goods. Greater convenience for time-starved consumers is a key reason for these gains. While some prescient grocers like Bellingham, Wash.-based Haggen already provide a daily store-made array of “breakfast burritos, egg mufns or … cinnamon bread pudding … sure to wake up your inner morning person,” the majority of supermarket operators haven’t yet grasped breakfast’s potential. “Breakfast is a huge opportunity for retailers to ofer quick, easy, and nutritious products to their customers,” notes Becker. “Retailers should consider ofering ready-to-eat options such as egg bakes, health-packed oatmeal and nutritious ancient grains in grab-and-go packaging. Te hot bar is another area that retailers should consider for these types of breakfast items. Retailers like

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Introducing “Bowls” Blount doesn’t just sell premium soups under the Blount Organics brand, it also sells unique gourmet sides. Blount Organics side dishes, which include lentil & chickpeas, butternut squash and creamed kale & spinach have up until now been available primarily in foodservice bulk packaging, designed primarily for the deli hot bar. Building on its years of success in premium retail soups, Blount has applied its expertise and capabilities to prepared entrées and side dishes, which will be launched and showcased at this year’s IDDBA show.

Innovation Drives Expansion In Soups & Sides Tere are great things happening in the retail soup market these days. Te quality of the soups available continues to improve, especially in refrigerated soup, which is where the growth has been and where it will continue to be. Te important players in the space continue to bring wholesome, premium soups that give a restaurant-like experience to consumers at home or in the ofce. Sourcing and handling of organic ingredients continues to improve, which means a company like Blount Fine Foods of Fall River, Massachusetts, can bring premium, restaurantquality organic soups to market that have a 50- to 70-day shelf life, and which are consistent in every way – from batch to batch, and season to season.

Embrace What’s New Retailers are embracing the new premium soup recipes the Blount Culinary Team develops, including Ancient Grain minestrone, tomato bisque, and vegetarian chili. Te retailers fnding the most success selling Blount Organics have been those willing to maintain a rotation of premium organic soup varieties, which allows shoppers to become more familiar with them. Because Blount is also a leader in foodservice soups, to maximize the exposure of a new favor, retailers are able to drive trial by “sampling” retail soups in their hot-to-go soup bar, while letting shoppers know it is also available in their refrigerated soup section. When foodservice soup sales at lunch also inspire retail purchase for later, the retailer has struck on the winning recipe. And testing new favors means the retailer is also rotating options in and out of the ongoing soup program, where research has shown younger shoppers appreciate options and variety.

Te new Blount “bowls” are a line of restaurant-quality sautéed & slow-simmered dishes consumers will love. Blount will ofer them under the Blount Organics and Panera Bread brands. Te Panera Bread line will include favorites like 12-ounce chicken, broccoli & cheddar cheese with orzo pasta, and turkey chili made with turkey raised without antibiotics and of course Panera’s very successful 16-ounce mac & cheese. Te Blount Organics line will include 12-ounce sides like Creamed Spinach & Kale and Lentil & Chickpea. All of the products come packaged in microwavable heatand-eat bowls.

Maintaining A High Bar For fve generations, family-owned and operated Blount Fine Foods has found that the more it elevates the quality and variety of its premium products, the more success its customers enjoy. With that in mind, and with the pace at which the company continues to innovate not only in R&D, but in supply chain management, ingredient handling and food safety, customers should expect the company will continue to do so. May 2015 | progressivegrocer.com |

Fresh Food

Breakfast is a huge opportunity for retailers … [they] should consider offering readyto-eat options such as egg bakes, healthpacked oatmeal and nutritious ancient grains in grab-and-go packaging.” —John Becker, Sandridge Food Corp.

Prepared Foods

Whole Foods and Bristol Farms have very appetizing hot bars that serve lunch and dinner dayparts efectively — breakfast is a great opportunity that can be easily realized.” “It’s essential that retailers ofer a healthy variety of breakfast options available through a quick in-and-out experience,” advises Dunne. “Grab-and-go sandwiches, either hot for immediate consumption or refrigerated for taking home, are a winning example of this. Personalization is also key, for example, ofering consumers their choice of carrier, such as a biscuit, bagel, roll, fatbread or wrap. Providing a good, quality cofee program establishes the retailer as a destination and drives trafc to create a successful morning program.”

More to Come Whatever form it will ultimately take, the supermarket prepared food section is on course to expand. “Te future of prepared foods is untapped,” notes Dunne. “In today’s fast-paced, health-conscious world, shoppers demand convenience and quality that fresh prepared foods are uniquely able to ofer.

As this department and its role in the store grow, retailers must strike a careful balance between consistency and innovation to ofer diverse, high-quality foods and favors, and exceptional service.” To that end, according to Skipper, “Wynn’s has recently developed a comprehensive library of online training resources that are available [to retail customers] on demand. Tese resources have proven invaluable not only for training new employees, but also for retraining current team members.” “Prepared food products need to have better-foryou ingredients, ethnic favors [and] uphold ultimate freshness to be successful in the evolution of this category,” stresses Becker. “Te POS, social media, digital coupons, mailers, merchandising, etc., need to focus the communication around these three elements.” Te ultimate aim of all of this prepared food innovation, of course, is to keep customers coming back for more. As Becker puts it, “It’s all about creating a stress-free, enjoyable experience for the customers,” a sentiment echoed by Dunne: “It’s not just about the products — the future of fresh is all about the experience.” PG

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UppeR CRUst tim and Kevin Metcalfe’s Metcalfe’s Market West towne store, in Madison, Wis., boasts a twin display for its full-service deli and bakery with a focus on fresh, local baked-instore goods. the entirety of the store — which was a first-place winner in progressive Grocer’s 2014 store Design Contest, courtesy of store design partners Mehmert store services, of sussex, Wis., and Birmingham, Mich.based studio H2G, Retail strategy & Design — revolves around the stunning bakery/deli island.

2015 Retail Bakery Review

Bread

Winners

In-store bakeries are taking their place as a key destination driver for a more discriminating shopper base. Research by Debra Chanil/Analysis by Meg Major

ith shoppers increasingly measuring afnity for their favorite supermarkets against the quality of the fresh food departments, the in-store bakery is taking on a decidedly more important role, as revealed in Progressive Grocer’s 2015 Retail Bakery Review. Indeed, when asked how they view their in-store bakery as part of the total store ofering, well above half of this year’s annual bakery survey panelists — 56.3 percent — ranked the department as a foremost destination driver and key component of their broader diferentiation strategies to attract and retain a more dis-

criminating base of shoppers. What’s most important to note about the strong destination department ranking in this year’s exclusive PG research report — which probes the views and attitudes of retail bakery executives from around the country on a variety of operational and sales trend issues — is that it’s an all-time-high score that climbed nearly 30 points from last year’s bakery study. And although a full half of retail bakery executives polled in this year’s survey considered the department an integral ingredient of their total one-stop-shopping formula, onethird (33.3 percent) of panelists viewed their bakeries as a primary image-builder supporting the store’s overall brand and oferings, while 29.2 percent positioned their in-store bakeries for basics and necessities. May 2015 | progressivegrocer.com |

2015 Retail Bakery Review

Bakery SaleS Change 2014 vS. 2013 Increased

Decreased

Stayed the Same

30.6%

65.3%

2.3%

net Change (%)

4.1% expeCted Same-Store SaleS Change for 2015 31.2%

66.7%

2.8%

net Change (%)

Among the other key highlights of PG’s exclusive “state of the in-store bakery” study — data for which were accumulated from the direct input of supermarket bakery executives responding to an annual survey for the 12-month measuring period ending December 2014 — the majority of panelists (65.3 percent) noted increased bakery sales. Te slim percentage of those reporting decreases — a mere 4.1 percent — provides further evidence that the average in-store bakery is holding its own, a fnding further supported by the one-third, or 30.6 percent of survey panelists who reported static comparable bakery sales. When asked to project what they foresee on the bakery category sales horizon in the next three fscal operating quarters, the majority of panelists (66.7 percent) expected continued sales gains, although not to the same extent as last year. Interestingly, the gap closed six points in this year’s survey among those who projected decreases, which slid to a historic 2.1 percent low, while 31.2 percent anticipated no sales changes in either direction in the coming months.

WhiCh of the folloWing BeSt deSCriBeS your in-Store Bakery program? Current year

year ago

deStination department

56.3%

26.8%

part of a “one-Stop-Shopping” format

50.0

33.5

image Builder

33.3

42.5

BaSiCS/neCeSSitieS

29.2

13.4

Source: Progressive Grocer Market Research, 2015. Multiple responses accepted.

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

2.1% Source: Progressive Grocer Market Research, 2015

Bakery CenSuS 2014

$13.07b 2.3% 2.1% 28,160 $6,663 $346,500

2013

total induStry Bakery department SaleS Change from previouS year Bakery department Share of SaleS numBer of ServiCe BakerieS average Weekly SaleS per Store average annual SaleS per Store

$12.78b 1.8% 2.1% 28,015 $6,561 $341,162

Source: Progressive Grocer Market Research, 2015

2015 Retail Bakery Review Bakery Operations Breakdown When evaluating key highlights of the bakery performance tabulations, PG found that gross margins declined a full point in this year’s study, to 45.2 percent, underscoring the inherent challenges of fuctuating ingredient and labor costs, the latter of which have long been ofset by a self-service scheme — comprising 72.3 percent of bakery sales this year — which favorably dipped nearly two points from last year. For bakery department labor as a percent of sales, estimated costs of roughly 30 percent were on par with the similar rate cited in last year’s study. Te number of average employees per store in this year’s survey was also unchanged, as was the average six full-time equivalent employees per store. And although shrink remained a perennial departmental antagonist, the estimated sum as a percent of sales dipped slightly, to 7.1 percent.

change in Bakery Department profits Profits Up

Profits Down

current year

41.1%

Unchanged

48.1%

10.8% 33.4%

year ago

53.3%

Bakery Department performance current year

year ago

gross margin

45.2%

46.5%

percent of sales from self-service Bakery

72.3%

74.0%

1,310

1,300

6.0

5.9

30.1%

29.9%

7.1%

7.6%

256

240

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

Source: Progressive Grocer Market Research, 2015

Eye on the Profit Pie More proof of squeezed bakery department margins was revealed in less robust profts, as only 48 percent of respondents reported an increase in profts, compared with 53 percent a year ago. A slightly better outlook was evidenced by the 10.8 percent reporting downward profts versus last year’s 13.3 percent, and was also illustrated by the healthier percent (41.2 percent) reporting stabilized comparable profts from a year ago. Meanwhile, as indicated in the Bakery Census chart on page 72, retail dollar sales of in-store bakery products broke the $13 billion mile-marker for the frst time, to reach $13.7 billion, up two points from $12.8 billion in the year-ago study. With an estimated 28,160 bakery departments nationally, this year’s bakery survey fndings indicate that roughly 75 percent of retail food stores have an in-store bakery department. Despite comprising a

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

13.3% Source: Progressive Grocer Market Research, 2015

relatively small percentage of perishable dollar sales at most retail stores, with an average 2 percent of total store sales versus other supermarket departments, the category’s average weekly sales-per-store tally equates to an estimated $6,663, which on an annualized perstore basis, amounts to approximately $346,500.

Breads Rise to the Top Although dessert consumption for at-home meals is on the wane, there will always be a place for sweet treats of some kind, be it for special celebrations, personal rewards, evening sweet-tooth fxes or weekend indulgences. Further, while the same could also be said regarding less bread being consumed with meals these days, breads and rolls made a strong showing in the best-selling in-store bakery items countdown, according to insights from Progressive Grocer’s 2015 Retail Bakery Review. For the second year running, bread’s strong showing as the leading bakery item bested the department’s other best-sellers — with the exception of cakes — by nearly a third. Indeed, while many supermarkets are making greater investments in higher-quality own-brand bread programs, other, smaller regional retailers are seeing great success by sourcing and marketing crusty creations from local bakeries renowned for having the best bread around. Either way, a signature bread program is a natural for winning over today’s sandwich enthusiasts, who actively seek out diverse baked goods such as buns and kaiser, hoagie, sausage and French rolls. Specialty breads and fatbreads, including store-made pita, ciabatta and focaccia, are also on a roll in the in-store bake shop and a focus for sandwich items. To that end, expect to see more grocers add further creative bread options to their bread and roll lineups, such as pretzel breads, focaccia and naan, all of which will continue to be big movers. Beyond breads, rolls and cakes, other in-store bakery survey top sellers include those sweet stalwarts cookies, doughnuts, cupcakes, mufns and pies, which cooperatively position the department for an occasional or frequent visit by shoppers in search of convenient breakfast items and single-serve sweets.

Best-selling Bakery items current year

year ago

Breads

66.0%

63.2%

cakes

55.3

61.1

36.2

39.3

doughnuts

34.0

39.0

rolls

27.7

29.3

cupcakes

23.3

n/a

muffins

19.1

12.5

pies

8.5

14.7

danishes/sweet rolls

6.4

18.2

artisan Breads

6.4

16.8

Bagels

6.4

7.2

scones

4.3

n/a

2.%

5.0

hispanic items

Source: Progressive Grocer Market Research, 2015

Continued on page 79

May 2015 | progressivegrocer.com |

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2015 Retail Bakery Review

Continued fom page 75

Ranking of Most PoPulaR/ PRofitable bakeRy iteMs Most PRofitable

Category

Dollars per Store/Week

Dollars per Store/Week Percent Change vs. Year Ago

Volume Percent Change vs. Year Ago

$1,760 1,565

0.6% 1.9

$915 792 533 250 $3,323 1,217 672 203 175

Bread and Rolls Breads Rolls Breakfast Bakery Doughnuts Sweet Goods Muffins Bagels Desserts Cakes Cookies Pies Brownies and Dessert Bars Specialty Desserts

Volume Percent on Promotion

Volume Percent on Promotion Change vs. Year Ago

Average Retail

Average Retail Percent Change vs. Year Ago

5.4% 0.8

13.2% 10.9

-0.3% 0.4

$2.26 1.89

-4.6% 1.1

2.8% 4.9 3.7 0.2

0.1% -0.5 0.6 -3.6

5.0% 16.2 13.0 8.1

-0.6% 1.7 0.6 0.0

$1.56 3.11 2.92 1.20

2.7% 5.4 3.1 4.0

0.4% 2.4 5.1 12.3 11.6

0.3% 4.7 6.4 10.4 9.5

17.0% 18.3 23.7 16.4 15.8

0.4% 0.0 -0.1 0.0 0.9

$6.84 3.58 3.37 4.22 4.39

0.0% -2.2 -1.2 1.7 2.0

Source: Nielsen Perishables Group FreshFactsÂŽ

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IDDBA 2015 Dairy-Deli-Bake Show Preview

Growing the Future: 2015 Dairy-Deli-Bake

s with seeds planted in the ground, eggs laid by a hen, or livestock born in a barn, the growth of the food industry depends on continual, careful care and maintenance. On June 7-9, 2015, at the Georgia World Congress Center in Atlanta, more than 8,500 industry leaders will focus on the importance of tending to their products, consumers and respective production and merchandising environments at the 51st annual DairyDeli-Bake Seminar and Expo, which this year

ofers the theme of “Growing the Future.” Presented by the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA), the 2015 Dairy-Deli-Bake brings together a full crop of industry professionals, including supermarket buyers, merchandisers, direcrec tors and executives, as well as brokers, distributors, wholesalers and manufacturers, among others, in the dairy, deli and bakery sectors. As they gather to learn and share new ideas to grow their businesses and the industry at large, at-

Welcome to the Show! Greetings to expo attendees and exhibitors from President and CEO Mike Eardley. I’m excited to see so many important people at Dairy-DeliBake Seminar and Expo in Atlanta. It’s a great city with great facilities, the Georgia World Congress Center is an amazing venue; the area has grown a lot since we were here last in 2009. Te downtown area is a perfect location for our dairy-deli-bakery community to meet. IDDBA’s mission is to expand our leadership role in promoting the growth and development of dairy, deli and bakery sales in the food industry. I believe promoting the growth and development of our products in the food industry is about education and building relationships. Tere’s no better place to do both than the Dairy-Deli-Bake. IDDBA’s vision is to be the essential resource for relevant information and services that add value across all food channels for the dairy, deli and bakery categories. We’re driving some important new educational initiatives that show attendees can expect to see throughout this three-day event: Our Safe Food Matters! program focusing on Listeria monocytogenes Understanding how Millennial shoppers view our departments Defning what omni-channel shopping means to our departments and how our members create strong selling opportunities in an omni-channel world

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

Developing initiatives to show career opportunities in our areas to a new generation of food lovers Taking our show and using its strength to build a synergistic community of dairy, deli and bakery professionals committed to the future growth of the industry Expect to see these themes on the main seminar stage, in the new Show & Sell Workshop, and on the show f loor. We’ve worked this year to ensure all who attend have something directly applicable to their jobs to take away. One of the best things about IDDBA is the relationships it fosters among people. Te Dairy-Deli-Bake Seminar and Expo is about buying and selling, but it’s also about teaching and telling. It’s about building a community focused on learning and sharing. Have a great show!

Michael J. Eardley

President and CEO International Dairy-Deli-Bakery Association

Dairy-Deli-Bake 2015 D J June 7-9, 2015 Georgia World Congress Center, G Atlanta A To register: https://www.iddba.org/registration.aspx T Phone: 608-310-5000 P E-mail: iddba@iddba.org Save the Date: Future Dairy-Deli-Bake Events June 5-7, 2016, Houston June 4-6, 2017, Anaheim, Calif. June 10-12, 2018, New Orleans The Madison, Wis.-based International Dairy-DeliBakery Association (IDDBA) is a nonprofit membership organization serving the dairy, deli, bakery, cheese and supermarket foodservice industries. In addition to its annual seminar and expo, IDDBA offers leadingedge research, training programs, management tools and an annual trends report, “What’s in Store.” To learn more about the organization, visit www.iddba. org or call 608-310-5000.

tendees will gain insight from a roster off h high-level hl l speakers who know a thing or two about strategies for success and growth. Keynote speakers include Jay Leno, Martha Stewart, Arianna Hufngton, Shaquille O’Neal, Youngme Moon, Walter Robb, Harold Lloyd, Phil Lempert, Chuck Hagel, and IDDBA President and CEO Michael J. Eardley. In addition to the keynote presentations, targeted seminar sessions will provide insight into a range of relevant trends, research fndings, www.anuga.com www.anuga.com marketing and merchandising ideas, and innovative products and services. While they take away inspiration from the presentations and seminars, industry leaders will also gain actionable ideas at the 10,000-square-foot Show & Sell Center. Tat area of the show will showcase the latest products and merchandising concepts that can be deployed to generate consumer excitement and bolster sales. Te show and tell will continue at the nearly 1,800 booths comprising the IDDBA Expo. At this exhibit, industry professionals can check out an array of foods, service and concepts. Beyond the main conference halls and breakout rooms, grass-roots networking will take place throughout the event as another way to grow the future. Industry buyers, sellers and decision-makers can take advantage of face-to-face time to connect and share ideas and information for mutual growth. Tis year, to make those connections even easier, IDDBA is ofering an app, “myIDDBA,” that allows users to network with other attendees Koelnmesse Koelnmesse Inc.Inc. before, during and after the show and 8700 8700 West West Bryn Bryn Mawr Mawr Avenue Avenue to plan their show experience. Suite Suite 640640 North, North, Chicago, Chicago, Illinois, Illinois, 60637 60637

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IDDBA 2015 Dairy-Deli-Bake Show Preview

A Lineup of Leaders: IDDBA’s 2015 Dairy-Deli-Bake Speakers

en people walk into a crowded conference hall. Two of them go by “Doctor,” but only one is more than 7 feet tall. Another can whip up a beautiful tablescape in a matter of minutes, using whatever’s nearby at the moment. Yet another can spout virtually any truth or trend about the supermarket industry. Te roster of keynote presenters at 2015 DairyDeli-Bake show is diverse, to be sure, but also tied together by the fact that the speakers are all known for their talent, diligence and vision for the future, while remaining grounded in the knowledge of what makes everyday Americans tick.

Jay Leno “What Did the Cheese Say to the Bread?” Leno, who hosted “Te Tonight Show” from 1992 to 2014, will do a 45-minute standup gig flled with his trademark humor. Tis is just one of approximately 100 shows a year for the performer, who is also known for his support of U.S. military troops and other charitable and humanitarian eforts. Martha Stewart “Staying Relevant: Four Decades of Experience: A Fresh Perspective on the Future” Stewart will share her unique views on food and the future, with insights relevant to this industry’s professionals. As head of Martha Stewart Living Omnimedia, her infuence reaches about 66 million consumers a month through a variety of channels. If anyone has her pulse on the home, food, garden and lifestyle interests of today’s consumers and how to stay relevant in their lives, it’s the eponymous Stewart. Arianna Huffington “Brave New World: How Social Media Has Revolutionized the Communications Landscape” Hufngton is chair, president and editor-in-chief of one of the most popular digital sites, Te Hufngton Post. Named one of Time magazine’s 100 Most Infuential People, the best-selling author will share her thoughts on a future in which traditional and “new” media combine in a hybrid channel. Dr. Shaquille O’Neal “Thinking Big on Leadership” Fifteen-time NBA All-Star basketball player O’Neal has complemented a distinguished

career on the court with shooting for new goals: He’s said that earning his doctorate in organizational learning and leadership was the crowning achievement of his life. Having ofered insights on using humor and leadership with such major brands as Pepsi, Starbucks and Apple, O’Neal will share his thoughts on how his own leadership style has evolved along with his career.

Dr. Youngme Moon “Different in a Way That Makes a Difference” Moon will pose questions on how to stand out in today’s competitive marketplace and then provide her thoughts on cutting through the proverbial clutter. A senior associate dean for strategy and innovation, and professor of business administration at Harvard Business School, Moon focuses on the intersection of business, branding and culture, and has published more than 1 million case studies on a plethora of companies, including Starbucks, Microsoft and IKEA. Walter Robb “Conscious Capitalism” As the co-CEO of Austin, Texas-based Whole Foods Market, Robb knows the diference between food fads and authentic new ways of eating and shopping. He’ll talk about the future of food retailing, address ways to break into new markets, and discuss how Whole Foods balances a competitive advantage with corporate responsibility. Harold Lloyd “Supermarket Rules: A Road Map for Success” Author, teacher and presenter Lloyd returns to IDDBA’s conference to share his views on how this industry can grow for the future, many of them from his book “Supermarket Rules! 52 Ways to Achieve Supermarket Success.” He’ll cover topics from improving customer service to operational efciency to fresh merchandising ideas. Phil Lempert “Consumer Attitudes: Food Safety in Supermarkets” Supermarket Guru Lempert will share results of an exclusive study he conducted in consultation with IDDBA on consumer attitudes toward food safety in the supermarket. An author and founder of a leading online resource, he regularly

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

2015 Dairy-Deli-Bake Seminar and Expo Schedule at a Glance Sunday, June 7 7:30-7:50 a.m.: Nondenominational worship service 8-8:30 a.m.: Phil Lempert, The Supermarket Guru 8:30-9:15 a.m.: Shawn Stevens, food safety attorney, founder of Food Industry Counsel LLC 9:15-10 a.m.: Arianna Huffington, chair, president and editor-in-chief, Huffington Post Media Group 10-10:30 a.m.: Coffee break 10:30-11:15 a.m.: Walter Robb, co-CEO, Whole Foods Market 11:15-Noon: Jay Leno, TV host, comedian and author Noon-5:30 p.m. Expo and Show & Sell Center open Monday, June 8 8-8:30 a.m.: Dave Leonhardi, COB, IDDBA, presenter of the Chairman’s Award 8-9:15 a.m.: Michael J. Eardley, president and CEO, IDDBA 9:15-10 a.m.: Martha Stewart, founder, Martha Stewart Living Omnimedia 10-10:30 a.m.: Coffee break 10:30-11:15 a.m.: Harold Lloyd, author, “Supermarket Rules! 52 Ways to Achieve Supermarket Success” 11:15-Noon: Chuck Hagel, former U.S. secretary of defense Noon-5:30 p.m.: Expo and Show & Sell Center open 6-9:30 p.m.: Wisconsin Milk Marketing Board party Tuesday, June 9 8-9 a.m.: Dr. Youngme Moon, professor, Harvard Business School 9-10 a.m.: Dr. Shaquille O’Neal, NBA all-star, entrepreneur and philanthropist 10 a.m.-2 p.m.: Expo and Show & Sell Center open Wednesday, June 10 Bonus Event 8 a.m.-4:30 p.m.: ServSafe certification class (registration required; space limited)

works with supermarket leaders and is a frequent contributor to ABC’s “Te View” and publications like Te New York Times, Te Wall Street Journal and Forbes.

Chuck Hagel “Challenges and Opportunities: A Global Perspective on America in the 21st Century” Hagel possesses unique experience on preparing for and anticipating the future. Te Vietnam veteran and former U.S. senator most recently served his country as the U.S. Secretary of Defense from February 2013 to February 2015. His interest in, and focus on the future is refected in his book “America: Our Next Chapter.” At Dairy-Deli-Bake, Hagel will discuss a variety of domestic and global challenges currently facing the nation. Michael J. Eardley “Trend Watch: Our New CEO Serves Up a Hot Dish” Tis is the frst Dairy-Deli-Bake conference as IDDBA president and CEO for Eardley, who was previously a member and chairman of the board of directors of the organization. In his formal presentation, he will reinforce IDDBA’s commitment to food safety and discuss implications of omni-channel marketing in the industry. Eardley’s decades of experience in the supermarket business span his family’s supermarket to D&W Food Centers in Michigan to H-E-B in Texas.

Fresh Food

IDDBA 2015 Dairy-Deli-Bake Show Preview

Show & Sell Center Come for the inspiration, stay for the education.

hat’s one of the taglines of the annual Dairy-DeliBake show. In addition to the seminars designed to entertain and motivate, a hallmark of IDDBA’s event is the 10,000-square-foot Show & Sell Center. Te retail merchandising and idea center showcases a variety of new merchandising concepts for food retailers, refecting the latest research, ideas and products in the industry. Attendees will walk away with concrete ideas on how to use such concepts to sell more products and ensure customer satisfaction. Refecting the show theme of “Growing the Future,” this year’s Show & Cell Center features several ideas and workshops that address the needs and interests of today’s —and tomorrow’s — consumers. Among them: Show & Sell Workshop, featuring Walter Robb, Shaquille O’Neal, Phil Lempert, Harold Lloyd, Safe Food Matters! and demos from the Show & Sell Center merchandising teams. Culinary Concierge: Solutions from fully chef-prepared, to par-prepped ingredients, to menu planning for attracting Millennial consumers to a foodservice program and retaining them. Bakery Bar: A fresh food department tour de force as deli,

bakery and cheese combine with h ffresh h jjuice ice and cofee programs to create a breakfast destination. Snacks: From the natural goodness of cheese as a snack to fresh bakery and deli items, IDDBA’s team is creating a concept to help deli and bakery departments capitalize on the booming snack market. Sandwich Station: From made-to-order to prepackaged, this sandwich concept is sure to leave you with new ideas to freshen up your sandwich program.

Flour Power: Cake Challenge Contest test It’s a Dairy-Deli-Bake show highlight every year, r, and this year’s Cake Challenge Contest promises to be the icing on the cake, literally and figuratively. Chosen from more than 60 entrants representing senting 22 supermarket chains, this year’s contestants are: re: Donna Barley, Publix Super Markets Inc., in n Cape Coral, Fla., a 30-year decorating veteran who loves ves being creative with icings and ingredients, but has also honed her skills in consistency and efficiency through ough her work at a supermarket bakery. Katherine Dean, Dorothy Lane Market Inc.,, in Dayton, Ohio, who worked there for 11 years ars before finding her niche in the cake department tment two years ago.

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

Stephanie Dillon, Dil Hy-Vee Inc., in Lee’s Summit, Mo., a lifelong artist who turned to pastry arts to learn a new medium. She’s been decorating cakes, including custom items, for 16 years. Barley, Dean Dea and Dillon will batter up for three phases in the cchallenge. On Sunday, June 7, each contestant will decorate enough cakes to fill one multitiered 8-fo 8-foot bakery case; on Monday, June 8, each contest contestant will decorate a wedding cake; and on Tuesday Tuesday, June 9, each will decorate three cakes reflecting reflec a special occasion, the show’s theme and the decorator’s choice. Judges for this year’s IDDBA Cake Challenge are Luke Bender, manager of technical serv service at Brownsburg, Ind.-based Maplehurst Bakeries LLC, and Jim CaliMapleh endo, d dessert training specialist at Buffalo, N.Y.-based Rich Products Corp. N.Y.-bas

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Summer Beverage Alcohol Report

Beverages

The

Art of Craft

Artisan brews, now mainstream, rev up to score their share of seasonal sales, in common with other beverage alcohol segments. By Bridget Goldschmidt

espite their reputation as a small, quirky alternative to the increasingly monolithic major players in the category, craft beers are now decidedly part of the mainstream, with some of them, strictly speaking, not really craft beers at all, or not any more. As proof of this assertion, St. Louis-based powerhouse Anheuser-Busch has already snapped up such niche brands as Blue Point, Goose Island, 10 Barrel Brewing and Elysian Brewing Co. What’s more, rather than taking a reluctant “If you can’t beat ’em, join ’em” approach to the segment, Anheuser-Busch CEO Carlos Brito is enthusiastic about it, seeing craft beers as a positive force within the overall market. “Tey’re bringing new views to the beer business. Tey’re bringing romance to the business,” he noted last year on CNBC’s “Squawk on the Street” program. “It’s a high-end business. So … as a market leader, it’s better to have entrance in the category that will get consumers to trade up than otherwise.” Available fgures back up the perception that craft beers are riding high among consumers. According to the Boulder, Colo.-based Brewers Association (BA), a trade organization representing small and independent American craft brewers, in 2014, for the frst time ever, craft beers achieved double-digit — 11 percent — volume share of the marketplace.

May 2015 | progressivegrocer.com |

Beverages

“With the total beer market up only 0.5 percent in 2014, craft brewers are key in keeping the overall industry innovative and growing,” notes BA Chief Economist Bart Watson. “Tis steady growth shows that craft brewing is part of a profound shift in American beer culture — a shift that will help craft brewers achieve their ambitious goal of 20 percent market share by 2020.” Food retailers have been paying close attention to this trend, and some are already responding. Austin, Texas-based Whole Foods Market has actually opened the frst-ever in-house brewpub within a grocery store — dubbed the Whole Foods Market Brewing Co. — at its location on Post Oak Boulevard in Houston’s Galleria area, and Brewmaster Dave Ohmer has joined forces with local brewery Bufalo Bayou Brewing Co. to produce 7 percent ABV Whole Bufalo Saison, a draft-only beer available exclusively at the store from March onward. Among conventional grocers, Cincinnati-based Kroger is installing cooler and dry shelf space in its beer aisles to hold more craft beer. “Kroger customers continue to ask for additional craft and local beer options,” company spokeswoman Jennifer Jarrell told the Columbus Dispatch in March, “and we are increasing our selections in response to demand.” All of this comes as no surprise to George Ward, director of of-premise national accounts at Boston Beer Co., brewer of Samuel Adams. “Drinkers are clearly saying they want more variety and more favor than what premiums and import beers deliver,” he afrms. “Tey have more sophisticated palates than drinkers generally did years ago and are always looking to explore diferent favor profles and styles of beer, and pair or cook with beer as part of their everyday life. Millennials have adopted and are exploring craft beer the way their parents adopted wine 30 years ago.”

Summer Sips Given this solid standing among U.S. beer drinkers, craft breweries and the retailers that sell their products are naturally focusing on products and promotions to roll out in time for the onset of warmer weather, a traditional time for downing ice-cold brews, and refreshing limited-time items ofering seasonal favors. “During warmer weather, drinkers typically gravitate to lighter beer styles,

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

Whole Foods Market Brewing Co.

Beer in Store A Whole Foods Market store in Houston is the first supermarket to open its own brewpub, and has even brought out an exclusive beer in partnership with a local craft brewery.

Summer Beverage Alcohol Report

and this summer, drinkers can look forward to the return of Summer Ale, a crisp wheat ale brewed with lemon peel and Grains of Paradise,” says Boston Beer’s Ward. “Available on draft, in bottles and in cans, Summer Ale is also included in our Beers of Summer variety pack that showcases a range of styles for drinkers to enjoy during warmer weather. In addition to Summer Ale, the other beers in the pack include our Samuel Adams Boston Lager; Rebel Rider Session IPA, a session IPA with grapefruit and tropical fruit notes and a hint of bitterness; and Downtime Pilsner, a new beer only available in this variety pack.” Downtown Pilsner is a crisp golden lager with notes of orange, tangerine and spice, as well as hints of black pepper and melon, from new Bavarian hops varieties Herkules and Mandarina. “Tis is the frst brew we’ve ever released using these hops,” notes Ward. He adds that the season will also see the limitedtime introduction of Samuel Adams Honey Queen, a braggot-style quaf brewed with three honey varieties and chamomile, in 22-ounce bottles; the return of Samuel Adams Porch Rocker, “a refreshing Radlerstyle lager that combines light maltiness and subtle hop notes with a blend of real lemons for a freshsqueezed lemon taste”; and the availability of Boston Lager, Rebel IPA, Summer Ale and Porch Rocker in the convenient Sam Can, frst launched in 2013, and Summer Ale in 16-ounce single-serve cans for the frst time, alongside Rebel IPA and Boston Lager. As for promotional activity, Ward observes, “We’ve found that the best way to support any craft beer is to get drinkers to try it.” To that end, Boston Beer introduces many of its craft beers at sampling events. Te company is also well aware that the reasons for craft beer’s popularity extend beyond its ability to quench thirst. “Because craft beer drinkers are also increasingly looking to incorporate beer into daily activities like cooking and pairing with food, we develop recipes with chef partners to help show how craft beer is an ideal and accessible ingredient for food pairings and as a cooking ingredient,” he explains. “With the help of the grill masters at Weber Grills, we’re helping to educate drinkers and grillers alike as to why craft beers are the perfect

addition to any backyard barbecue.” And then, of course, there are the season’s holidays to leverage. “Food and beer education, combined with our independence-themed point of sale for the Memorial Day and 4th of July holidays, will drive excitement at retail around Samuel Adams displays,” asserts Ward. “Simple recipes and pairings focused around grilling will help shoppers create a food and beer experience that complements the summer grilling season.” Other craft brewers are also getting in on the seasonal product act. For instance, SanTan Brewing Co.’s popular Mr. Pineapple Wheat Ale is back for the summer, this time in a redesigned Rexam 12-ounce can. Further, the Chandler, Ariz.-based brewery has teamed with Chiquita to use Rainforest Alliance Certifed premium pineapple juice in the award-winning ale “for a more sustainable, socially conscious and tasty beer,” as the companies involved put it. According to Claude Marbach, president of Charlotte, N.C.-based Rexam Beverage Can North America: “Our cans help attract attention on store shelves, maintain beverage integrity, and deliver superior recycling, flling, distribution and retail display economics that will help the brewery continue to build its brand and business.” Mr. Pineapple in cans is available at select retailers in Arizona, Southern California and Texas.

Also on Tap Obviously, summer’s not just about craft beer. Among “malternatives,” for instance, Palm Breeze, a brand of Chicago-based Mike’s Hard Lemonade Co., has rolled out a line of light sparkling tropical favors — Ruby Red Citrus and Pineapple Mandarin Orange — aimed squarely at what New York-based Kelton Research has identifed as the 11 million Millennial women who annually drink 13 million-plus cases of favored malt beverages. “Millennial women have been largely overlooked by traditional beer companies,” contends Sanjiv Gajiwala, Mike’s VP of marketing. “For these women, being with their girlfriends is an escape — from work, from errands and from whatever else life throws their way. And Palm Breeze is created specifically to be a part of these moments while simultaneously building on the tropical trend we’re seeing overall in food and beverage to ultimately inspire women to turn any girl get-together into a getaway.” Keeping in mind its target consumer, the brand’s fully integrated marketing program includes digital creative and media integrations with Instagram, PopSugar, TMZ, Us Weekly and xoJane; a series of

experiential events with Blo Blow Dry Bar and Gilt Groupe in Austin, Dallas, Los Angeles, New York, San Diego, and Washington, D.C.; and partnerships with food, fashion, beauty, lifestyle and décor bloggers Cassandra LaValle, of Coco + Kelley; Claire Sulmers, of Fashion Bomb Daily; Gaby Dalkin, of What’s Gaby Cooking?; and Melissa Johnson, of Best Friends for Frosting, to create branded content all summer long. Women — namely those in search of tasty, slightly sweeter, low-alcoholic beverages — are also the intended consumers of Daily’s Spiked Sodas, a line of 12-ounce slim cans in four sparkling favors combining fruit and soda: Cherry Cola, Raspberry Ginger Ale, Lemon Lime and Blood Orange. According to Verona, Pa.-based Daily’s Cocktails, the fzzy drinks have no malt aftertaste and cost just $1.99 per can. Beyond malt beverages, the Angry Orchard Cider Co. has rolled out nationally its spring and summer seasonal hard cider, Angry Orchard Summer Honey, available through August. Te Cincinnati-based company describes the beverage, which is made from wildfower honey and culinary apples, and comes in 6-packs, 12-packs, and variety 12-packs with other Angry Orchard styles, as “perfect for warmer months and outdoor entertaining.” Although it’s the No. 1 hard cider in the United States, according to Chicago-based IRI, and the overall segment has experienced steady growth, Angry Orchard has been working to boost hard cider’s profle through sampling and collaborations with well-known chefs, including Kevin Gillespie, of “Top Chef” fame, to promote food pairings and the beverage’s use as a recipe ingredient. Among spirits, the Captain Morgan Rum Co. will introduce three Caribbean-accented favors — Pineapple, Coconut Rum and Grapefruit — to serve as the central ingredient in a range of tropicsthemed cocktails. “Tis summer, we’re looking for consumers to fip over their hammocks and have a little fun with their mojitos and daiquiris by enjoying our new pineapple, coconut and grapefruit extensions,” notes Dan Kleinman, VP of mar-

Simple recipes and pairings focused around grilling will help shoppers create a food and beer experience that complements the summer grilling season.” —George Ward, Boston Beer Co.

May 2015 | progressivegrocer.com |

Beverages

Summer Beverage Alcohol Report

keting, rums for Norwalk, Conn.-based Diageo North America. “After last year’s successful launch of Captain Morgan White Rum, we wanted to expand our oferings in the category. Tese favors allow adult fans to diversify their cocktails.” Also from Diageo are Sandra Lee Cocktail Time Margaritas in Key Lime and Strawberry favors, infused with real key limes and strawberries, pure cane sugar, premium blue agave silver tequila, triple sec liqueur and other natural favors. Te ready-to-serve margaritas, which can also be used as the alcohol base in various mixed drinks, are gluten-free and feature fewer than 150 calories per 4-ounce serving. To support the launch of her namesake product, TV chef and magazine editor Lee has embarked a national tour through the July Fourth weekend; other promotional eforts include accompanying recipes and entertaining ideas included in a newly created fip-cover format in Sandra Lee magazine; a website, CocktailTime.com; and social activations on Pinterest, Instagram, YouTube and Facebook, along with in-store promotions, point-of-sale materials, public relations eforts, and even a cause-marketing

campaign, Cocktail Time for a Cause. And speaking of new favors, cofee-and-rum liqueur Kahlúa has introduced a limited-edition Kahlúa Salted Caramel variety meant to enliven a slate of creative summer concoctions. “Kahlúa is always committed to delivering innovative favor oferings that take various drinking occasions to the next level,” says Brian Mequet, VP, rum and liqueurs at New York-based Pernod Ricard USA. “While staying true to the classic taste that consumers love, Kahlúa Salted Caramel builds upon the success of our other limited-edition favors and ofers new ways to enjoy classic cocktail favorites with an added twist.” PG For more about beverage alcohol this summer and beyond, visit Progressivegrocer.com/beval.

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Beverages

Summer Beverage Alcohol Report

What’s Brewing This Summer? Progressive Grocer discussed summer promotions with Dean Williams, senior director of commercial marketing — of premise for White Plains, N.Y.-based Heineken USA.

ing campaign. Ads in both Spanish and English will employ the brand’s black eagle symbol to appeal to bicultural consumers who identify equally with their Mexican w and American heritages. Tecate will also continue its long-standing partnership with boxing as the title sponsor of high-profle b fghts, including the Pacquio/Mayweather matchup this month.

PG: Why is summer a key selling season for Heineken USA? Williams: Summer represents a key volume

opportunity, as it features three of the top beer-selling holidays: Memorial Day, Independence Day and Labor Day. We aim to own these occasions and all of summer’s social gatherings with our promotional programming designed to not only infuence what consumers drink, but their entire beer experience as well. PG: What are Heineken USA’s grocery retail promotional plans for the summer? Williams: Heineken’s Cities Campaign, frst introduced in

2014, will be back this summer, expanding to nine cities. Heineken will roll out limited-edition packaging inspired by the global cities it represents. Te program will also include digital and social engagements, along with retail, on-premise and experiential activations. From May through August, Strongbow’s fully integrated 360-degree program invites shoppers to experience all Strongbow Hard Apple Cider favors at their “bestest” when served over ice. Te Hit Refresh on Summer program includes targeted national online video, strategic digital partnerships and social media engagements, plus retail and on-premise activation designed to drive purchase of Strongbow’s favors among LDA+ (legal drinking age) consumers. Dos Equis will unveil its summer Luna Rising promotion. Built around the theme “As the moon rises, so do the possibilities!” Luna Rising will tap into the popularity of Mexican beer and the Beers of Mexico Variety Pack with Roja during summer (Mexican brands outsell all other beer segments from June through August, according to Nielsen) by ofering LDA+ consumers more interesting and memorable summer experiences. Newcastle will encourage Americans to extend their July Fourth weekend by starting the celebration early with Newcastle Brown Ale, Scotch Ale and Viking Ale on Independence Eve. Te brand’s digital activation is designed to drive shoppers to retail, encourage purchase, and engage fans postpurchase with social media content and a Newcastle Independence Eve consumer sweepstakes. Tecate will debut its new Born Bold advertis-

PG: What new or limited-edition products does the company plan ffor the season? Williams: We launched a Strongbow Variety Pack that

includes Strongbow favorites Gold Apple and Honey & Apple, along with new Strongbow Red Berries and Strongbow Ginger. Strongbow Red Berries is a blend of sweet, juicy mixed berries with crisp lemon notes and an apple fnish. Strongbow Ginger ofers fresh foral aromas, a hint of muscato notes, and a crisp, refreshing apple fnish. Te Newcastle brand launched two limited-release ales: Newcastle Scotch Ale and Newcastle Vikings Ale. Scotch Ale is the inaugural beer in a series of “collaboration editions” created with European breweries. Created in collaboration with sister Caledonian Brewery, Scotch Ale is a rich, full-favored Scottish ale with tofee notes. Vikings Ale is a custom-draught beer created in partnership with the History Channel to commemorate the third season of the scripted series “Vikings.” It’s an amber beer that owes its color to a full blend of roasted malts, which provides full-bodied favor, countered by a pleasant bitterness from aromatic German Hallertau Magnum hops. Dos Equis introduced its latest Beers of Mexico variety pack with limited-edition ofering Dos Equis Azul, a blend of golden wheat lager and blue agave. Dos Equis Azul joins Dos Equis Lager, Tecate and Sol in one convenient Fiesta Pack. Te brand will refresh the Variety Pack this summer, replacing Azul with Dos Equis Roja, a red lager crafted with Mexican malted barley and hops.

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

PG: Beyond grocery store aisles, how does Heineken USA plan to connect with consumers this summer? Williams: Heineken has a full schedule of activations dedicated to creating legendary experiences for consumers this summer. From sponsorship/ activation at popular music festivals, including Coachella and Ultra, to the inaugural year as Te Ofcial Beer of Major League Soccer, Heineken will create unique experiences for fans everywhere, driving participation and engagement in ways never done before in the United States.

Grocery

Candy

The Hidden Complexity of

Candy

Assortment and presentation are special sciences supporting sweets. By Joan Driggs

or a typically small, indulgent treat, the business of candy is hugely complex. Just ask Te Hershey Co., which since 2008, has invested in deep levels of expertise in consumer research, design and market data to position itself not just as a candy vendor, but also as a pro-consumer retail partner. “I view what we’re doing as an extension of what we’ve always done,” says Bob Goodpaster, VP and chief global knowledge ofcer for the Hershey, Pa.-based confectioner. “We have always put the category ahead of ourselves, and retailers would agree. High tides raise all boats. In the grocery category, this is important because we’re competing against many other categories.” Within Goodpaster’s purview, Hershey is as much a consultancy as a confectionery company, building internal expertise on impulse, experiential retail design, technology, total store data and precision execution. Hershey frst started growing its knowledge base around seasons, which provide vital boosts to category sales. Starting in the early 2000s, the company shared shopper insights with retailers to get them to decorate aisles for Halloween, bundling costumes, seasonal gifts, decorations and candy. With sales of Halloween candy alone increasing from $1.87 billion in 2008 to nearly $2.5 billion in 2014, the success of such strategies is obvious.

We have always put the category ahead of ourselves. … In the grocery category, this is important because we’re competing against many other categories.” Game Changer —Bob Goodpaster, The Hershey Co.

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While seasonal sales helped launch Hershey’s broader insights work, it was Mars Inc.’s acquisition of Wrigley Co. in 2008 that was the catalyst for ex-

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

pertise in front end. “We realized we were no longer the largest confection manufacturer,” says Goodpaster. “Now we have to be the smartest and provide good objective advice on the front end. We gathered data sets well beyond confection and became a front end expert for retailers.” From there, Hershey made the leap to its IDP (insights-driven performance) retail collaboration model. “We used to talk about our own brands and category, but now we focus on total category and total store,” says Scott Cole, the company’s VP, GM, U.S. customers. “It’s what’s best for the retailer and their metrics: insights, knowledge and trends. We’re providing insights and action plans to unlock that potential. It translated into precision, based on our work in front end and experiential retail design.”

Front End Expertise Hershey’s front end expertise is well illustrated through two major initiatives at Hy-Vee, which focus on reinvention of the front end and diferent checkout merchandising solutions. Tom Watson, EVP and chief retail ofcer at West Des Moines, Iowa-based Hy-Vee, appreciates that Hershey looks beyond its own products to what’s in consumers’ best interests. “Hershey is very involved in checkstands, not just with their products, but with others’ as well,” Watson says. “Tey look at the total area and determine what’s best for the market we serve.” Hy-Vee evaluates checkstands annually, and every three to four years, it replaces them. A new

Candy

initiative, expected to launch May 1, is a complete reworking of the front end, with newly positioned merchandisers, new product assortments and new LED front end fxtures at Hy-Vee stores. “We knew we wanted to enhance the health aspect of what we ofer at front end registers,” says Watson. “We wanted to modernize them, making them a little more interesting for shoppers.” New checklanes now feature beverage coolers, which used to be facing the main aisle. Tis allows for expanded aisle space where the company will ofer a diferent assortment of products, including more gift cards and, along with traditional oferings, healthier options such as fresh baked goods, easy-to-eat fruits and vegetables, and more adult oferings like protein bars, nuts and teas. Hershey provided relevant data to guide decisions that were easy to implement, notes Watson, ultimately making for a “very smooth and exciting process. We’re glad to move forward with new ideas, and grateful [Hershey] brought them to us.” Hy-Vee is also just wrapping up a changeover of its express lanes and service counters. “Where we didn’t ofer any impulse products in these lanes before, Hershey came up with a solution that worked,”

says Watson. Six- to 8-inch under-the-counter shelving now runs the length of express and service lanes without inhibiting transactions. Says Hershey’s Goodpaster: “It’s amazing what under-the-counter can do for business, ours and retail. Tis has led to double-digit growth for front end categories, not just candy. Tere’s a lot more to it than ‘put this box of candy on top of the counter.’ Now it’s understanding the right candy and the right mix. Tat’s front end today.” Beyond front end, it’s also total store, all driven by IDP, a refection of Hershey’s deep understanding of macro trends impacting consumers’ changing relationships with food and their shopping behavior, as well as cultural and sociopolitical change and disruption, demographics, technology and globalization.

Upping the Candy Experience As Progressive Grocer reported last fall, Hershey partnered with Jacksonville, Fla.-based Bi-Lo Holdings LLC’s Winn-Dixie banner on a Candy Experience concept in a Baton Rouge, La., store. Replacing a traditional, hard-to-shop candy aisle, the store-within-a-store is designed to boost retailers’ confection category sales.

Grocery

Our challenge with candy was assortment and making the experience favorable, to give the consumer permission to go down the aisle and navigate and get what she needs.” —Moe Alkemade, The Walgreen Co.

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Grocery

sPace solution Hy-Vee stores now include merchandisers at service counters and express lanes, a solution delivered by Hershey.

Candy

Te Baton Rouge initiative consists of a circular set of bold displays located at the front of the store adjacent to customer service and the checkout lanes, a dramatic departure from the traditional candy aisle location. Hershey took a full-category approach in designing the section, which features a selection of top brands from various candy companies. Displays include toppers of Reese’s Peanut Butter Cups, Hershey’s Kisses Chocolates and M&Ms, graphics of unwrapped candy, vibrant colors, and convenient organization by usage occasion, labeled as candy dish, movie & snacks, premium, gum & mints, and fruity & chewy. Hershey’s reimagined candy aisle replaces consumer frustration with a more convenient and memorable experience. According to the company, the Winn-Dixie Candy Experience “lifted candy category sales by strong double digits,” validating that the concept works.

Precision Hershey is currently working with Te Walgreen Co. on the candy company’s most dramatic initiative yet: precision capability at store level, including on-shelf assortment, of-shelf merchandising, innovation and media. “We understand the purchases at the store level, the neighborhoods and the shoppers,” says Goodpaster. “You can get a good idea of what will sell well in a particular store versus one a few blocks away. We’re combing through that data to make recommendations for retailers.” Just as important as insight, however, is execution. “People love customization and personalization,” he adds. “We now have the ability to focus on microsegments. Retailers are getting smarter about logistics and about store-level planograms. Retailers now can execute against the makeup of a neighborhood, culture, household income levels, age breaks, [and] urban versus rural versus suburban stores.” Walgreens Group VP of Competitive Convenience Moe Alkemade divulges that the Deerfeld, Ill.-based drug chain “had a fairly vanilla approach

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to category management, using one solution that ft a majority of stores. We’ve learned that we have diferent consumers and diferent needs throughout the country. Our challenge with candy was assortment and making the experience favorable, to give the consumer permission to go down the aisle and navigate and get what she needs.” Ranking as the No. 2 candy retailer in the country, Walgreens admits that it was losing a little share. About a year ago, Hershey delivered what Alkamade describes as an “aha moment.” He explains, “Tey were the right partner to push the concept of the right product, right placement, right time.” Both parties invested in signifcant resources, bridging Walgreens’ loyalty and consumer data with Hershey’s data to create optimal solutions. “Tat’s the only way it works,” Alkamade continues. “You have to create partnerships and trust. Hershey is a valuable partner and expert in their feld; they brought useful insights we hadn’t considered.” While not rocket science, the approach is complex, according to Alkamade. “It’s approaching it store by store, or cluster by cluster set,” he explains. Addressing something as simple as the geographic preferences for Red Vine licorice (West Coast) and Twizzlers (Midwest) is appreciated by the shopper, and valuable to the retailer. As an example, Hershey applied precision analysis to the launch of York Minis. It focused on areas where analysis indicated a likely preference for the product, using household income, upscale versus downscale, generational, ethnicity, and density of dwellings. As a result, “sell-through was much faster — three times the national average — than it normally would have been,” says Goodpaster. Data can help determine the right product assortment by brands and product type, such as premium versus non-premium chocolate. In turn, assortment will help determine what leads the aisle, placement, displays and callouts. Walgreens now has four or fve ways of leading an aisle based on geography, primary consumer and other considerations. Placement and display of adjacent products may also be impacted. Te program kicked of in March, so hard success is intuitive at this point, but Alkamade is positive “that there will be an upside. “[Hershey] tags it as precision, but I consider it the right amount of resources, brain power and collaboration,” he asserts. “I work with a large number of vendors, and Hershey has really stood out to me as best in class. Tis is the standard we set for other vendors.” PG For more about the candy category, visit Progressivegrocer.com/candy.

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Trending at Sweets & Snacks Expo

Grocery

Upside of

Sweet Trends

Premium, shareables lead new candy launches.

upermarkets remain a sweet spot for confectionery, posting 1.8 percent sales growth during 2014, according to the Washington, D.C.-based National Confectioners Association (NCA). But with consumers shopping so many channels, it’s vital that grocery retailers not only retain, but also grow, their confectionery share, notes Jenn Ellek, NCA’s senior director of trade marketing and communications. In advance of the 2015 Sweets & Snacks Expo, slated for May 19-21 in Chicago, Progressive Grocer asked NCA and several confectionery players about key market trends and new products that expo attendees can expect to see and sample. What’s driving category growth? Frequent new product introductions, premium oferings, shareables with recloseable pouches, line extensions and crossbranding, seasonal execution, and “experience,” specifcally in the realms of product texture and favor.

Premium + Wholesome “Fruit is the fastest-growing snack category, and consumers are enjoying snack options that include both fruit and chocolate,” says Larry Lupo, VP of sales for grocery, convenience and drug at Mars Chocolate North America, in Mount Olive, N.J. Last fall, the company launched Real Fruit Dipped in Dove Dark Chocolate, in cranberry, cherry and blueberry varieties. In October 2015, the line will expand to include cranberry and cherry varieties in 17-ounce standup pouches. “Millennials are more conscious of food and are trying to eat healthier … but people still want to indulge and have a treat,” acknowledges Bob Goodpaster, VP and chief global knowledge ofcer at Te Hershey Co., in Hershey, Pa. He cites recent launches that are well positioned for success in the category, including Hershey Caramels, gourmet chocolate-covered caramels in dark and milk

By Joan Driggs

chocolate; and Brookside Fruit & Nut bars made with real fruit, whole roasted almonds and dark chocolate. Varieties of the latter include Cranberry with Blackberry, Cherry with Pomegranate, and Blueberry with Açaí. Brookside products also illustrate Hershey’s “simple ingredient” pledge made earlier this year: “We are committed to making our products using ingredients that are simple and easy to understand,” the company’s website notes. Brookside Fruit & Nut Bars, for example, contain no high-fructose corn syrup (HFCS) and no artifcial favors or colors, as well as being gluten-free, while Hershey’s Milk Chocolate bars and Milk Chocolate Kisses now contain no lactose, vanillin or artifcial favors. Chad Hartman, director of marketing at Charlotte, N.C.-based Truly Good Foods, believes this is a path all companies will take. “Nostalgic favors, simplifed ingredients, transparent sourcing and sustainability practices are all things consumers are requesting,” he says. “We expect all confectionery companies to consider these moving forward.” Some companies are based on just this proposition. Boulder, Colo.-based Justin’s, for example, is going “unwrapped” with Organic Mini Peanut Butter Cups in shareable, resealable 4.7-ounce standup bags. Available in dark and milk chocolate, Minis are gluten-free and made from Rainforest Alliance Certifed cocoa. Lovely Candy Co., based in Woodstock, Ill., which makes gluten-,

May 2015 | progressivegrocer.com |

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Grocery

Trending at Sweets & Snacks Expo

HFCS-, soy and wheat-free candy, will debut the frst U.S.-made gluten-free licorice, in original, cherry and strawberry varieties, at the Sweets & Snacks Expo.

Nostalgic flavors, simplified ingredients, transparent sourcing and sustainability practices are all things consumers are requesting.” —Chard Hartman, Truly Good Foods

New Sensations: Flavor and Texture “We are seeing … growth among intense favors such as sour/spicy, as well as unique favor combinations and internationally/ethnically inspired favors,” says Matt Pye, VP of corporate afairs and trade relations at Just Born Quality Confections, in Bethlehem, Pa. New products from the company that refect these trends include Hot Tamales Tropical Heat, and Mike and Ike Zours, the last of which feature a sweet/sour combo. Littleton, Colo.-based Impact Confections, meanwhile, is expanding its popular Warheads sour candy brand with Warheads Worms. “Te chewy category has consistently grown three to four times of the nonchocolate category as a whole, so we were looking at opportunities to expand our portfolio in that space,” says Andy Telatnik, Impact’s marketing director.

Hartman says Truly Good is also acting on the bold favor trend, along with grab-and-go packaging. Its Grabeez cup line includes Gummy Bears and Sour Neon Worms. Truly Good also has created mixes of sweet and savory snacks. Its Banana Split is made with banana chips, peanuts, dried marshmallows, chocolate, pineapple, caramel bits and cranberries. Te company additionally makes a line of Yogurt Pretzels in a variety of favors. According to Mars Chocolate’s Lupo, it was “consumers’ desire for new textures” that led the company bring back M&M’s Crispy Candies. For its part, Hershey has introduced Ice Breakers Cool Blast Chews, “a frst-of-its-kind product [that] provides an icy-cool blast of freshness in a quickdissolving chew.” PG Visit the April issue of Progressive Grocer Independent for a complete preview of the 2015 Sweets & Snacks Expo: http://magazine. progressivegrocer.com/i/494725-apr-2015.

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Refrigerated & Frozen

Dairy

Cool

Possibilities June Dairy Month promotions aim to generate momentum in the aisle for the year. By Jim Dudlicek

or grocery retailers, June Dairy Month is a golden opportunity to help drive sales on several fronts, including wellness, local food and fghting hunger. Grocers need look no further than the dairy industry’s trade groups ps for a wealth of support for marketing and merchanchandising ideas to boost sales of milk, ilk, yogurt, cheese and other dairyybased food products. For the retail banners of Ahold USA, June Dairy Month nth is a chance to recognize the local farm families that produce uce milk and other dairy products for its stores in the Northeast. “Tis June, we will build on our long-standing anding commitment to supporting food banks in the communities we serve by helping to make milk more available for families in need,” says Todd Patti, VP portfolio lead of dairy for Carlisle, Pa.-based Ahold USA, which operates 770 stores under the Stop &

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Shop, Giant and Giant/Martin’s banners. “Milk is frequently requested by families facing hunger, yet it is not often donated to food banks.” In fact, Patti notes, on average, food banks receive only the equivalent of 1 gallon per person served each ye year. To meet the demand, Ahold USA wi will hold a four-week Great American Milk Drive program, in Amer cooperation with the Washington, coop D.C.-based Milk Processor EducaD.C tion Program (MilkPEP), across the grocer’s market areas to address the issue of low milk donations. Te drive uses tear pads and T stanchion signs that encourage stan shopper donations, which will then shop be converted con into vouchers for free milk and distributed distribut to local food banks. Te program launched last year to great success, and MilkPEP has now optimized it for June Dairy Month to build on that momentum, explains MilkPEP VP Victor Zaborsky. “We know that June is a key month of the year for charitable giving,

and Te Great American Milk Drive ofers retailers an opportunity to drive consumers to the dairy case and drive donations to families in need when milk is top of mind.” Patti concurs, “We think June Dairy Month provides a great opportunity to draw attention to the dairy aisle and get shoppers engaged in a unique way.” MilkPEP ofers a range of turnkey tools and resources for retailers, from customizable POS materials to personalized support.

Discovering Dairy Beyond June Dairy Month, MilkPEP helps retailers tap into other key periods throughout the year, such as Hunger Action Month in September, and the holiday season, during which one-third of annual giving occurs. (Retailers can visit gotmilksales. org for more information.) “We recognize that the dairy aisle is changing, and we have to more aggressively defend real milk’s reputation in the marketplace,” Zaborsky says. “We are focused on re-establishing consumer confdence in milk and driving increased milk consumption by correcting misinformation and telling positive milk stories. MilkPEP has a long-term strategy that is

Dairy Sales Tepid Across Categories Sales of dairy products across three major categories are running flat, according to Rosemont, Ill.-based Dairy Management Inc.’s latest monthly multioutlet retail sales overview, offering data through Feb. 22, 2015. Despite growth areas such as organic milk and Greek yogurt, the year thus far has been a sleepy one for dairy. Milk: YTD retail sales are down 3.4 percent, although monthly declines have moderated since December. Average milk prices ($4.20/gallon) are down 0.7 percent compared with last year; a gallon of white milk is now averaging $3.39/gallon (-3.1 percent versus YAGO). Cheese: YTD retail sales are down 0.9 percent, although February sales were flat after 10 months of declines. Average cheese prices ($5.02/pound) are up significantly versus this time last year (7.6 percent); pricing has been erratic in recent months. Yogurt: YTD retail sales are up 0.1 percent, beginning the year with similar performance compared with 2014. Average yogurt prices ($2.22/pint) are up 2 percent versus last February, while private label items are exhibiting drastic price increases of 9.2 percent.

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Refrigerated & Frozen

We think June Dairy Month provides a great opportunity to draw attention to the dairy aisle and get shoppers engaged in a unique way.” —Todd Patti, Ahold USA

Tillamook Crowdsources Dairy

Dairy

dedicated to educating consumers and driving sales and consumption of both white and chocolate milk through our research-based national campaigns steeped in shopper insights and industry collaborations and partnerships.” Tose campaigns include Milk Life, which stresses milk’s nutritional benefts, including its 8 grams of protein per serving, and Built with Chocolate Milk, which promotes the yummy beverage as a recovery drink for athletes. Meanwhile, the Harrisburg, Pa.-based National Refrigerated and Frozen Food Association (NFRA) is unveiling its latest June Dairy Month retailer-driven initiatives that encourage consumers to “Discover the Cool Possibilities” as they shop the aisle, and inspire new uses in culinary and snack applications. Retailers can enter their NFRA-based June Dairy Month merchandising programs in the

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Oregon-based Tillamook County Creamery Association, a 106-year-old farmer-owned cooperative, has introduced an online community that it expects to help shape the future of the company. The Tillamook Co-Op will empower consumers to take a more active role in understanding and influencing their dairy products. Members will have access to exclusive content, including membership meetings, product idea submissions, voting platforms, invitations to exclusive food events, and the opportunity to take part in a microloan program powered by KivaZip to support community food projects in need. It’s part of a new Dairy Done Right brand campaign that promises transparency and innovation. By shortening the distance between farms and consumers, and committing to make five categories of dairy products in the most natural way possible, Tillamook is educating consumers on the value of supporting sustainable food, local agriculture and natural ingredients. “We are excited to launch this new brand campaign, which we believe will build deeper connections with consumers and contribute to the broader conversation about real food,” says Patrick Criteser, Tillamook’s president and CEO. “Dairy Done Right and the Tillamook Co-Op express our long-standing ideals in a modern way.” Adds John Russell, senior marketing director, “By engaging in a transparent two-way relationship with fans through the Tillamook Co-Op, we hope to create change that reaches far beyond Tillamook, and even beyond dairy.” www.tillamook.com

2015 Golden Penguin Awards, presented at the annual NFRA Convention in October, which this year will take place in Dallas (more information is at www.nfraweb.org). Programs should focus on a particular message, as explained on the NFRA website: “Te refrigerated dairy aisle is where we go to fnd the foods we count on every day. But there is more to the aisle than meets the eye. If you look closely, you’ll see there’s a creative, fun side to these foods that’s beyond cool and waiting to be unleashed.” NFRA ofers retailers promotional resources, including digital FSIs, an idea book with a POS material catalog, and partnerships with Evite, an online party-planning service, and the Mr. Food Test Kitchen via television, e-newsletters and social media. Regional dairy trade groups are at the ready to help retailers as well. Among them, the Midwest Dairy Association (with ofces in Minnesota, Iowa and Kansas; www.midwestdairy.com) ofers promotional resources like informational videos on topics such as “Dairy Academy for Retail Excellence,” aimed at boosting retail managers’ and dietitians’ knowledge of dairy production. PG

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Inside Consumption Trends

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Lamb Report

In Like a Lamb The time-honored protein is finally getting its due in the United States â&#x20AC;&#x201D; and food retailers can leverage its newfound popularity. By Lynn Petrak

n an attempt to get a leg up on the protein competition â&#x20AC;&#x201D; and extend the popularity of cuts beyond the traditional leg, chop and rack â&#x20AC;&#x201D; the lamb industry has focused on product innovations, consumer education, and promotional campaigns extending from supermarkets to smartphones. Over the years, tradition has played a big role in consumption of, and perceptions about, lamb. Te protein is a widely consumed food in many parts of the world, including Mediterranean nations like Greece, and Down Under in Australia and New Zealand. In the United States, lamb has remained a special-occasion staple among many ethnic groups. Several cooking methods for lamb, such as roasting and broiling, are based on tradition, as are pairings like roast lamb with mint jelly.

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Lamb Report Te industry has had to address — and overcome — long-held views regarding the taste of lamb. “Tere was a phenomenon around the time of World War II when people got turned of of lamb because they were eating mutton when they told they were eating lamb. We like to say, ‘We aren’t your grandmother’s mutton,’” explains Megan Wortman, executive director of the Denverbased American Lamb Board. “Lamb is a much richer, milder product today — it’s not a hard sell.” To her point, mutton is meat from sheep more than a year old, while lamb is meat from sheep less than 12 months old. Likewise, Elissa Garling, business development manager for retail at Meat & Livestock Australia, with U.S. ofces in Washington, D.C., says that attitudes about lamb’s favor

and preparation are often based on misperceptions. “Te lamb from today is diferent from the lamb you might have gotten 20 years ago,” she declares, adding that beyond any mutton-lamb confusion, new production practices have led to a richer favor for this p particular red meat. “In Aus-

The Shear Facts: Lamb Consumption The new dynamic in the lamb market — defined by shifting consumer attitudes and enhanced flavor — has spurred the development of more value-added lamb mb products. But is it affecting consumption? The consumption of lamb, when stacked against other red meats and poultry, remains comparatively small in the United States. According to the USDA’s Economic Research Service (ERS), per capita consumption of lamb was pegged at 0.9 retail pounds per person for 2014, up slightly from 0.8 pounds in 2012. That said, data reported at the North American Meat Institute (NAMI) conference in February show that lamb sales are growing faster than any other protein. “This is both at retail, where lamb sales were up, and in foodservice, where lamb inclusion on menus is up more than any other protein. So consumers are really embracing lamb as a delicious protein both at home and when dining out,” says Anders Hemphill, VP of marketing and brand strategy for Davis, Calif.-based Superior Farms. Data from the “National Eating Trends” report from The NPD Group, based in Port Washington, N.Y., show that there were about 207 million eatings of lamb in 2014. Males between the ages of 18 and 34 and over age 65 and women ages 55 and older eat more lamb than the average consumer, and people on the East and West Coasts of the country tend to eat more lamb than those who live in the central regions, according to NPD’s findings. Other studies have revealed progress and promise in bolstering lamb consumption. According to the 2015

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“Power of Meat” study from NAMI and d FFood d Marketing M k i IInstitute, fresh lamb dollar sales rose 6.5 percent from 2012 to 2013, and fresh lamb pound sales were up 9 percent in that same time span. In another sign of lamb’s growth potential, recent research from Chicago-based Mintel shows that the category of “other meats,” including lamb, goat and game meat, is the only protein segment forecasted to grow. According to the market researcher’s report on packaged red meat, released in February, sales of other meats are expected to reach $1.5 billion by 2019, compared with $1.3 billion today, driven in large part by younger children and Millennials who “enjoy experiencing a variety of meats.” Globally, the lamb market is still much bigger than in the United States. Australia and New Zealand lead per capita consumption, while lamb and mutton are primary proteins for people in parts of North Africa, the Middle East and India, as well as in some European countries such as Greece, according to the Ames, Iowa-based Agricultural Marketing Resource Center. Megan Wortman, executive director of the Denver-based American Lamb Board, emphasizes the difference between domestic and international lamb consumption. “It’s around 1 pound per person here, and it’s around 26 pounds per person per year in Australia,” she notes. “We’d have a lamb roast once a week in Australia — that’s fairly common.”

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

tralia, all facets of the supply chain have focused heavily on genetic research and innovations.” Today’s milder, richer lamb favor comes at a time when more consumers are open to the idea of eating a diferent type of protein in addition to beef and pork, thereby opening the door for consumption beyond tradition. “We have this great rebirth of all things culinary going on right now, coming from celebrity chefs, television shows with chefs, and an online community that allows people to share their passions about food. Tat is a driving factor,” says Lori Dunn, executive director of pasture-raised programs for Strauss Brands Inc., based in Franklin, Wis. Te expansion of the collective consumer palate over the past couple of decades, inspired by a burgeoning foodie culture, the infuence of authentic ethnic foods, and inspiration from restaurant dining, has also infuenced people’s willingness to try a protein they may not have ever eaten, or haven’t eaten in a while. Lamb delivers on that, especially since it has long been used as the predominant protein in a number of global cuisines. “As consumers continue to experiment with new cuisines, they are seeing how lamb can be used in a number of diferent ways,” agrees Dave Persaud, marketing director for Te Lamb Cooperative Inc., based in Wilton, Conn., which sources lamb from producers in Australia and New Zealand. “Whether they see a recipe on TV or on a blog, or they try lamb at a restaurant,, we’re seeingg trial outside of the home translating to increased consumption at home as consumers look to replicate those experiences.” Tying into demographics, many of the adventurous eaters are younger consumers. “I think there is a new generation off adventurous eaters, who are open to new favors and tastes, and who want to cook more at home,” Wortman says. Anders Hemphill, VP of marketing and brand strategy for Davis, Calif.-based Superior Farms, has seen similar trends. “Tis is especially true among Millennial consumers,” he asserts. “Tese consumers are more adventurous eaters than other consum-

Counting Sheep: Lamb Production As the industry and processors try to shepherd consumers through the process of accepting more and different types of lamb, producers are tending to their flocks to supply the evolving marketplace. According to the American Sheep Industry Association (ASIA), there are more than 80,000 farmers and ranchers who care for nearly 6 million sheep in the United States. Lamb is produced in all 50 states; the top five are Texas, California, Colorado, Wyoming and Utah. In recent years, the move toward more sustainable production practices has resulted in a full-circle type of situation in which more sheep are grazing on lands to help create a sustainable landscape, along with more natural or organic products. Sheep are particularly efficient grazers, removing invasive plants and weeds, and helping ensure the growth of healthier grasses and forests. According to ASIA, sheep are even being used to graze vineyards in popular wine-making areas, for a greener way to maintain the land and crops. Farmers and ranchers are also working to improve their practices, through efforts to avoid overgrazing, protect water use (especially pivotal in drought-stricken areas like California), and handle waste. Total U.S. lamb production was 156 million pounds in 2014, roughly the same amount as in 2013 and 2012. Imports of lamb and mutton reached 195 million pounds in 2014, compared with 173 million pounds in 2013 and 154 million pounds in 2012. According to the Washington, D.C.-based North American Meat Institute, about 2.2 million sheep and lambs are processed annually. The country’s main sheep-processing states are Colorado, Iowa, Michigan and New Jersey, according the Ames, Iowa-based Agricultural Marketing Resource Center. Because of the unique supply situation for lamb, many ccompanies that sell lamb to retail markets offer both re domestic and imported d lamb. Strauss Brands Inc., la based in Franklin, Wis., and b Davis, Calif.-based Superior D FFarms, for example, source lamb meat from producers la in the United States, Australia and A New Zealand. N

e segments, er aand they eat lots of diflo ferent kinds fe oof proteins, including in llamb.” Lamb also benefts from a certain health and nutrition halo. “Whether it’s Al Roker’s nutritionist recommending the inclusion of U.S. lamb in a healthy diet, or [a registered dietitian] blogger fagging that our lamb has fve times the healthy omega-3 fatty acids as the same portion of beef, May 2015 | progressivegrocer.com |

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Lamb Report ort more and more infuential food authorities are helping drive interest and consumption,” afrms Elizabeth Dressler, VP at Mountain States Rosen, in Greeley, Colo. Approaching the notion of better-foryou proteins from another angle, the lamb industry and individual producers and processors have been able to tap into consumers’ desire for unique products crafted in a sustainable — or least more sustainable — way, with an interesting backstory. “A big part of what’s been driving an uptick in consumers’ interest in lamb [are] the attributes about grass-fed lamb and pasture-raised. Tose are terms that tie into consumer interest in animal treatment and the idea of all-natural or hormone-free that consumers are gravitating to across the board,” notes Meat & Livestock Australia’s Garling. Recently, Meat & Livestock Australia completed a Life Cycle Assessment (LCA) focusing on the footprint of lamb exported from Australia to the United States. “In one example of the

Photo courtesty Meat & Livestock Austr

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Lamb Report ort

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Out tO Pasture australia is one of the world’s largest producers of lamb, with a total sheep flock of more than 75.5 million. In 2014, australia exported 57 percent of all lamb in the world market.

data, we found that Australian ranches have reduced water usage 65 percent since 1991, and that the transportation component only contributes 6 percent to the total life cycle,” says Garling. Superior Farms’ Hemphill emphasizes the appeal of modern lamb production in this country. “American lamb is a very sustainable protein — many American sheep ranchers are grazing their sheep on forest lands, which helps to reduce fre hazards, and in some vineyards, where the sheep keep unwanted vegetation low in a natural way, and they fertilize as they go,” he says. “Tese types of practices allow these sheep to graze in very natural settings in a way that is highly sustainable. Consumers are looking for these types of positive attributes in the foods they buy.” Mountain States Rosen’s Dressler points to other eco-benefts, including the fact that private grazing

lands provide habitats for wildlife and w water t for f urban b and other areas, and are visually appealing open space. One of the company’s ranchers, she notes, recently earned a prestigious Leopold Conservation award. Another factor leading to new interest in lamb is a basic and longtime driver of any grocery purchase: cost. “Increased interest in lamb has come from a com-

Moving Lamb Products In-store

Make sure your customers keep the versatile protein top of mind.

ew product development is one thing; merchandising those new products — and gaining sales in the lamb case — is quite another. To that end, the lamb industry and individual lamb companies promote the protein in a variety of ways to encourage and educate shoppers who may be unfamiliar with lamb, are unsure about trying new lamb products or have never tasted lamb before. Dave Persaud, marketing director for Te Lamb Cooperative Inc., based in Wilton, Conn., agrees that educating consumers about lamb is pivotal to product trial and repeat purchases. “We fnd consumers are often deterred from purchasing lamb because they are inexperienced with cooking lamb,” Persaud says, adding that the co-op has made point-of-sale materials and recipes available

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

both in-store and online. Collaborative industry campaigns are also working to educate people about lamb. Te Denver-based American Lamb Board, for example, has launched a global favors campaign to familiarize consumers with ethnic favors of lamb, says Executive Director Megan Wortman. Further, the board is teaming with Meat & Livestock Australia, with U.S. ofces in Washington, D.C., and Palatine, Ill.-based grill manufacturer Weber on a nutrition education initiative focused on grilling. “We found summer grilling is a sweet spot to talk about healthy cooking and entertaining on the grill,” explains Wortman. Because lamb hasn’t been as widely or as frequently consumed in this country as in other parts of the world, sampling can spur interest among consumers. “We’re doing more in-store sampling to show people how delicious and easy to prepare lamb can be,” notes Anders Hemphill, VP of marketing and brand strat-

ck Australia Meat & Livesto Photo courtesty

bination of things. Consumers h have been exposed to diferent cuisines, and the industry has had to innovate as protein prices change. When lamb prices got high in 2009,” Garling recalls, “it forced the industry to innovate at a time when consumers were tightening their belts.”

egy for Davis, Calif.based Superior Farms. In this digital era, social media is yet another channel by which to reach consumers with information about how to buy, cook and serve lamb dishes. Persaud, for his part, says that Te Lamb Cooperative often updates its digital and social media marketing to highlight recipes and preparation tips. Wortman similarly stresses the use of social media as a tool to connect with consumers wherever they may be. “We’re doing a lot on the social media part of campaigns, too. It’s a cost-efective way to get awareness,” she says. According to Elizabeth Dressler, VP at Greeley, Colo.-based Mountain States Rosen, in addition to working with the American Lamb Board and retailers on various promotional materials and programs, the company has found that building relationships with infuencers in the digital community is important in today’s marketing environment. “We have spent years identifying and educating popular and highly reputable food, nu-

Strauss’ Dunn agrees that a n cost-consciousness, driven new by high protein prices, has b led to consumers’ willingness le tto mix it up when it comes to rred meat. “We’re seeing more diversifcation within lamb, d aand fexibility among consumeers to exchange imported and domestic oferings based on price d point,” she observes. p Te 2015 “Power of Meat” study, published by the North st American Meat Institute A ((NAMI) and Food Marketing IInstitute (FMI), backs up that point. A According to the report: “Shoppers have become more fexible in adjusting their meat and poultry purchases, changing between species and cuts to obtain the best value. Tis led to increases for pork and lamb.”

trition and lifestyle bloggers. Many of them were new to lamb themselves, and so their experimentation, shared learning, efusive testimonials and tantalizing recipes have really galvanized their legions of fans and followers,” she says. “Tey speak earnestly about our lamb’s special qualities, afordability and nutrition.” Technology is being deployed another way at Superior Farms, according to Hemphill. He notes that the company plans to roll out a series of video blogs featuring chefs, butchers and cookbook authors to further educate and inspire consumers.

We have spent years identifying and educating food, nutrition and lifestyle bloggers. Their experimentation, shared learning, effusive testimonials and tantalizing recipes have really galvanized their legions of fans and followers.” —Elizabeth Dressler, Mountain States Rosen

May 2015 | progressivegrocer.com |

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Lamb Report

New and Notable Here’s what’s happening with the latest lamb offerings.

alk into a typical supermarket, and you’ll likely fnd traditional cuts of lamb in the meat case or behind the counter, including leg, loins, chops and, in some higherend grocers, racks of lamb. Just like the meat case in general has changed to accommodate more case-ready and value-added products in recent years, the lamb section has expanded to include a greater variety of SKUs, from lamb “lollipops” to lamb bacon, among many other innovative items. “Te industry has come a long way in the last 10 years. You couldn’t even get ground lamb much, and you’d fnd a

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big Fred Flintstone kind of leg. Now, you see that, as well as smaller sirloin steaks from the leg and other things, like kebab meat,” notes Megan Wortman, executive director of the Denver-based American Lamb Board. Elissa Garling, business development manager for retail at Meat & Livestock Australia, with U.S. ofces in Washington, D.C., agrees. “Tere is a lot of anecdotal research about today’s consumers and how they are looking for more variety in lamb, from diferent countries as well as diferent cuts. Lamb shanks have increased in popularity, for example, and you’ll also see diferent types of lamb legs, such as semi-boneless legs, full bone-in legs or boneless legs,” she points out. To both Garling’s and Wortman’s points, ofering different cuts is one way that lamb processors have generated

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

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Q &A

Talking with…

Dave Persaud Marketing Director, Lamb Cooperative

We’ve seen lamb consumption growing in the U.S. What’s driving that growth? Dave Persaud: At the Lamb Cooperative, we know that much of the growth is being driven by Millennial consumers who are embracing lamb in a larger way than previous generations. They love bold, new favors, but they are also more concerned with how their food is produced. We have seen them embracing our New Zealand and Australian lamb in higher numbers not only because it is grass-fed, but also because there are no added antibiotics or hormones. Millennials are taking more time to understand how more natural, sustainable farming practices typically translate to better favors on the plate. At the Lamb Cooperative, we are doing everything we can to help encourage that discovery because we know that after tasting our lamb, consumers typically purchase it more frequently. PG: What do you think the beneft of lamb is to grocery retailers? DP: We know, through research, that the market basket value for lamb consumers increases considerably versus other proteins. The fact is that lamb is a premium protein and consumers will often purchase other premium items in store as accompaniments to their lamb purchase. For retailers, lamb represents more proftability in their meat cases because consumers that are fans of lamb are willing to pay a premium for it, especially if it carries enhanced attributes such as being grass-fed, with no added antibiotics or added hormones. PG: What new trends are you seeing with lamb? DP: One trend, that isn’t really a trend anymore, it’s become more of a mainstay, is grilling lamb. It used to be that the big holidays drove the majority of lamb growth, but grilling season has minimized the seasonality of lamb sales for retailers. We are seeing large year over year increases during the warmer months as consumers are grilling

everything from lamb burgers to frenched racks of lamb more frequently. One of our hottest items is our pre-seasoned Rosemary and Garlic Butterfied Leg of Lamb, which is perfect for grilling. All of those items present fast and simple meal solutions for consumers, but especially during the summer when preparing meals on the grill is fast and easy. PG: What do you think works best for increasing lamb sales at retail? DP: Product demos are critical to boosting sales. Lamb is very easy to prepare, but because so many people have yet to try lamb, there is low familiarity when it comes to cooking lamb. We always like to say “If you can cook beef, you can cook lamb,” mostly because it’s true. Both beef and lamb can be cooked in similar methods and stand up to bold favors and spices really well. We have seen a lot of success in converting trial to sales with our product demos. We also offer a lot of point of sale materials that help consumers to better understand the benefts of our lamb, especially the natural, pasture-raised attributes of our products. PG: How is the Lamb Cooperative bringing additional value to the lamb category? DP: One of the things we know and can empathize with is the fact that Americans have less time now than ever before. They are looking for quicker and healthier meal solutions that allow them to prepare a home-cooked meal in as little time as possible. Besides our value-added items, like pre-seasoned legs and frenched racks of lamb, we have also focused on our trimming specifcations, which minimize the amount of waste and inactive cook times that consumers have to deal with at home. These products translate to increased convenience for the consumer as well as proftability for the retailer. So it’s a win-win for all parties involved.

Lamb Report ort

We’ve had great success with a preseasoned rosemary leg steak. The case-ready packaging comes with two steaks that are ready for the grill.” —Anders Hemphill Superior Farms

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excitement for their products. Lori Dunn, executive director of pastureraised programs for Franklin, Wis.-based Strauss Brands Inc., cites several of the company’s fresh lamb oferings. “Tere are more further fabricated cuts and smaller units that allow people to try and buy lamb, because the cost per unit isn’t so high and because it’s convenient,” she notes, adding, “So maybe it’s not a 20-pound leg, but a boneless 3- or 4-pound roast.” Pre-seasoned and pre-marinated lamb b portions represent another expanding area of innovation. As the 2015 “Power of Meat” study from the North American Meat Institute and Food Marketing Institute found, 29 percent of consumers report that they cook marinated meats and poultry more often than they did fve years ago. Wortman points out that lamb goes well with marinades because of the nature of the protein. “Another great thing about lamb is that it really takes on the h favor of what you season or marinate it with,” she says. Dave Persaud, marketing director for Te Lamb Cooperative Inc., based in Wilton, Conn., says that marinades are another way to deliver value through both favor and convenience. “We know consumers are strapped for time, because we’re consumers as well. So, as we develop new products, we always try to keep simplicity at the core of the product concept,” he explains, citing the co-op’s pre-seasoned legs of lamb. At Davis, Calif.-based Superior Farms, VP of Marketing and Brand Strategy Anders Hemphill reports that pre-seasoned lamb oferings have worked well for that brand as well. “We’ve ... had great success with a pre-seasoned rosemary leg steak. Te case-ready packaging comes with two steaks that are ready for the grill,” he says, noting that retailers that have taken on this item have reported they can hardly keep them in stock. Based on parallel interest in unique, convenient and budget-friendly proteins, ground lamb has also been an area of R&D and growth. According to recent retail scanner data from Chicago-based IRI and cited by the American Lamb Board, ground lamb consumption climbed 8 percent from 2013 to 2014. Wortman agrees that ground lamb has made inroads, as retailers get creative in both ofering and merchandising that particular product. “Ground lamb has a good following, and it’s a ‘gateway cut’ for lamb. We’re also seeing retailers being innovative in selling ground lamb with other ground meats,” she observes. According to Dunn, Strauss’s lamb burgers made with ground lamb are especially hot this time

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

of year. “We make a lamb b patty ready d to go, go and it’s a great mover in the summer,” she says. In another area of innovation, convenience has been a force behind precooked lamb products. Superior Farms, for example, ofers a precooked lamb shoulder. Meanwhile, at a time when the frozen food sector is expanding to include entrées with a more global fair, lamb has become a more common ingredient in heat-and-eat meals. Examples include frozen entrées from Safron Road, a brand of Stamford, Conn.-based American Halal Co., which currently ofers Lamb Saag, Lamb Vindaloo and Moroccan Lamb Stew varieties. Beyond the product itself, lamb companies are directing their R&D focus toward packaging. Greely, Colo.-based Mountain States Rosen has used packaging to convey product information and garner shopper interest at the point of sale. VP Elizabeth Dressler cites the company’s line of Shepherd’s Pride Lamb, the only “Where Food Comes From” sourceverifed lamb in the United States. “’Where Food Comes From’ is a trusted third party that verifes the source of origin of all Shepherd’s Pride lambs. By relaying more of the story behind the product and putting grower information directly into the hands of the shopper, we’re able to bring traceability and transparency to the meat case,” she asserts. Te company is also set to introduce entirely new consumerfriendly packaging, according to Dressler. For its part, Superior Farms has employed new packaging capabilities to launch a cook-in-bag leg of lamb. Notes Hemphill, “It takes the guesswork out of preparing a stunning lamb meal at home.” PG

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2015 FMI Connect/United Fresh

United We Connect Co-located events bring retailing ideas to Chicago.

alking into a supermarket, consumers are faced with an array of products and ideas for foods and goods that meet their needs. In addition to the thousands of SKUs and assortment of fresh produce and perishable foods around the perimeter, shoppers are welcomed into an environment

with ith people l willing illi to t h help l th them, answer th their i questions and hopefully provide some savings to keep their budgets under control. Te same might be said of Chicago’s McCormick Place for a few days this June. Tere, industry professionals and leaders will gather to browse new items, query the experts, learn from educational materials, network with others and, yes, gain ideas to keep their own bottom lines in check. Tat’s just a sampling, if you will, of the opportunities to learn, connect and share at the co-located FMI Connect 2015, United

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

Fresh 2015 and International Floriculture Expo. Te combination of events will bring together retailers across diferent categories, ranging from independent operators to midsize grocers to high-volume mass markers, in both national and international markets. Te annual FMI Connect, billed as the “Global Food Retail Experience,” will be held June 8-11 in McCormick Place’s South Hall. Hosted by Arlington, Va.-based Food Marketing Institute (FMI), FMI Connect is an annual event for food retailing that combines a popular expo with education formats that focus on keeping ahead of the accelerating pace of change in food retail. United Fresh, an event sponsored by the Washington, D.C.-based United Fresh Produce Association, brings together retail, fresh produce and foral leaders who are searching for unique products and looking to enhance relationships with valuable business partners. Tis year’s United Fresh runs June 8-10 at McCormick Place’s North Hall. Floral professionals from the retail industry will be in town as well for the International Floriculture Expo (IFE), also set for June 8-10 at McCormick Place. The IFE is the leading trade exposition and educational conference for mass-market retailers, supermarkets, garden centers, retail f lorists, growers, nurseries, event f loral designers, and other retailers of f loral and foliage products. Trough these diferent but complementary shows, retail, fresh produce and foral leaders will bring home products and ideas to share with their own customers, all in an efort to manufacture, market, merchandise and deliver the best products across many diferent channels to improve consumers’ respective shopping experiences. Get your cart ready. Te aisles are open. Freshness beckons. What’s in your checkout lane is up to you.

Welcome to FMI Connect! Greetings from President/CEO Leslie G. Sarasin. Tough it seems it was only yesterday we hosted FMI’s Midwinter Executive Conference, spring has fown by and summer is nearly upon us. Tis perceived accelerating pace of change has become the new normal for the food retail industry, as grocers are challenged daily to simultaneously evaluate and innovate their business practices. And just as retailers are adjusting to demands around the shifting industry landscape, FMI is continually assessing the components of our signature event, FMI Connect, to ensure we deliver education, introduce solutions and facilitate networking opportunities that will help you meet your business goals and delight your customers. In a combined efort with FMI’s Family Meals campaign, FMI Connect will equip attendees with ideas and resources to inspire shoppers to commit to one Shows At a Glance more family meal each week at home. I am pleased to share with you some of the FMI Connect 2015 innovative ways FMI Connect 2015 can beneft your team and your business: Keynotes focus on building internal strength and evolving to succeed amid external pressures: Carey Lohrenz, the U.S. Navy’s frst female Tomcat F-14 fghter pilot, will share insight on market change, consumer evolution and the importance of adaptability, and CBS sportscaster Greg Gumbel will moderate a panel of winning coaches on developing strong teams. I am honored to have the opportunity to speak alongside these inspiring individuals to share FMI’s “2015 U.S. Grocery Shopper Trends,” with a special focus on cultural concerns afecting family eating patterns and infuencing supermarket business practices. FMI Connect Business Exchange (CBX) facilitates industry collaboration: CBX aims to ofer a cost-efective and efcient way to bring buyers and sellers together. FMI Connect attendees can schedule one-on-one meetings with potential partners or suppliers, to be held in a dedicated section on the FMI Connect exhibit foor. Specialized tracks and pavilions ofer growth opportunities for every department: Targeted education sessions and exhibit hall space will help you look to the future with new insights and products. FMI Connect tracks and pavilions are Retail Technology, Health & Wellness, Private Brands, Food Safety, and Fresh & Prepared.

June 8-11, 2015 McCormick Place Chicago To register, visit www.fmiconnect.net Phone: 202-452-8444

United Fresh 2015 June 8-10, 2015 McCormick Place Chicago To register, visit www.unitedfreshshow.org Phone: 202-303-3400 Email: united@unitedfresh.org International Floriculture Expo June 8-10, 2015 McCormick Place Chicago To register, visit www.floriexpo.com Phone: 207-842-5508 Email: info@floriexpo.com

Supermarket Chef Showdown showcases innovative in-store chefs: Be inspired by chefs who transform their stores into dinnertime destinations for shoppers, and watch the live cook-of on the show foor. Finalists represent grocers from across the nation. Te FMI Connect team has been hard at work creating this unique experience that will help retailers thrive within our current environment, and excitement is growing as the event nears. If you haven’t done so already, I encourage you to register to attend. Your attendance has the power to create a positive impact on your team, your business and, most importantly, your shoppers. I look forward to seeing you in Chicago!

Leslie G. Sarasin

President and CEO Food Marketing Institute

May 2015 | progressivegrocer.com |

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2015 FMI Connect/United Fresh

FMI Connect 2015: Global Food Retail Experience

iven the fact that “connect” is in the show’s title, one can expect a host of industry leaders to connect this June at McCormick Place Convention Center in Chicago. Everyone who sells food is invited to attend FMI Connect 2015 to seek out ideas, products and solutions for their respective segments, including mass merchants and club stores, as well as national, independent and regional retailers; drug stores; c-stores; natural and gourmet stores; dollar stores; and online retailers. In turn, attendees refect the spectrum of their businesses, from store managers to c-suite executives and owners, to wholesalers, distributors and suppliers, and across virtually all product categories. More than 12,500 professionals from 400 retailer companies are expected to be on hand this year. Also, 2015 marks the frst year that FMI Connect is being held annually. Previously held every other year, the event was changed to yearly “because the industry is changing fast,” according to FMI. Tere are other fresh aspects to the show, too, to

Sharing ideaS FMi President and CeO Leslie g. Sarasin addresses attendees at last year’s FMi Connect.

borrow an industry term. New this year is the Connect Business Exchange (CBX), a meeting scheduler and forum designed to facilitate one-on-one meetings between attendees and suppliers. Another addition is the FMI Tech Bar, which allows attendees to ask questions about their own personal smart devices, listen in on talks and demos, and network

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2015 FMI Connect/United Fresh

FMI Connect 2015 Schedule At a Glance Monday, June 8

7:30 a.m.-5 p.m.: Registration open 7:30-8:30 a.m.: Continental breakfast and coffee 8 a.m.-5 p.m.: Connect Business Exchange (CBX) open 9:30-10:30 a.m.: Meet the Retailer Presentation-Kroger (open to exhibitors only) 11 a.m.-Noon: Meet the Retailer Presentation-Hy-Vee (open to exhibitors only) 11:30 a.m.-3:30 p.m.: Store tours (separate registration required) 1:45-2:45 p.m.: Meet the Retailer Presentation (open to exhibitors only) 4-5 p.m.: Meet the Retailer Presentation (open to exhibitors only) 7:30-9:30 p.m.: Independent Operators Dutch Treat Dinner

Tuesday, June 9

7-9:30 a.m.: Connect Business Exchange (CBX) One-to-One Meetings 8-10 a.m.: Education Workshops 10-11 a.m.: Keynote Session & Expo Ribbon Cutting 11 a.m.-4 p.m.: FMI Expo open 11:30 a.m.-4 p.m.: Learning Lounge Education and Pavilion Presentations 11:30 a.m.-2 p.m.: FMI Bistro open (ticket required) 11:30 a.m.-3:30 p.m.: Connect Business Exchange (CBX) One-to-one Meetings Noon-1 p.m.: Topic TBD-Meet and Learn Area 2:45-3:45 p.m.: Topic TBD- Meet and Learn Area 3:30-5 p.m.: Expo Floor Receptions Private Brands Pavilion Health & Wellness Pavilion Technology Pavilion 4-5 p.m.: International Reception 5:30-8 p.m.: Opening Reception with Future Leaders at Chicago Sports Museum

Wednesday, June 10

7-9:30 a.m.: Connect Business Exchange (CBX) One-to-One Meetings 8-9:30 a.m.: Education Workshops 9:30-11 a.m.: Keynote Session 11 a.m.-4 p.m. FMI Expo open 11:15 a.m.-4 p.m.: Learning Lounge Education and Pavilion Presentations 11:15 a.m.-3:45 p.m.: Supermarket Chef Showdown-Recipes Competition 11:30 a.m.-2 p.m.: FMI Bistro open (ticket required) 11:30 a.m.-3:30 p.m.: Connect Business Exchange (CBX) One-to-One Meetings Noon-1 p.m.: Topic TBD-Meet and Learn Area 2:30-3:30 p.m.: Topic TBD-Meet and Learn Area 7-10 p.m.: Celebration Event at Eataly

Thursday, June 11

8-9 a.m.: Education Workshops 9-10: a.m.: Keynote Session 10 a.m.-2 p.m.: FMI Expo open 10:15 a.m.-2 p.m.: Learning Lounge Education and Pavilion Presentations 10:15-11 a.m.: Supermarket Chef Showdown Winners Announced 10:30-11 a.m.:Topic TBD – Meet and Learn Area 11:30 a.m.-2 p.m.: FMI Bistro Open (ticket required) Noon-1 p.m. Topic TBD-Meet and Learn Area 2-5 p.m.: Store Tours (separate registration required) 2-4 p.m.: Education Workshops

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

with other CIOs and tech professionals. Educational sessions at FMI Connect 2015 ofer tactics and best practices for improving operations. Tis year’s keynote speakers will provide advice relating to the growth and proftability of those in the food marketing industries:

Carey Lohrenz Team-Building, Leadership and Strategy Expert “Flying High with Fearless Leadership” (Joint session with Future Leaders @ Connect) Lohrenz will share the fundamentals that helped earn her a spot in the cockpit of a Mach 2 as the U.S. Navy’s frst female Tomcat F-14 fghter pilot, lessons that can also be applied to the challenges of food retailing. Leslie G. Sarasin President and CEO, Food Marketing Institute “FMI Speaks: The Noble (and EverEvolving) Work of Feeding Families” (Joint session with Future Leaders @ Connect) Sarasin will debut a high-level examination of “2015 U.S. Grocery Shopper Trends,” with a particular focus on the cultural concerns impacting family eating patterns and infuencing supermarket business practices. Greg Gumbel, CBS Sportscaster John Calipari, Men’s Basketball Coach of the Recent NCAA Final Four Team at the University of Kentucky Rick Pitino, Men’s Basketball Coach at the University of Louisville “Building and Motivating a Winning Team: Leadership Lessons from Winning Coaches” In a session that gives new meaning to the grocery term “basket share,” Gumbel will moderate a panel of the NCAA’s winningest college basketball coaches to uncover what it means to get the competitive edge out of a food retail team. Te coaches will share suggestions on building, motivating and maintaining strong teams, with key insight into the behavior and mindsets of Millennials. Additionally, attendees can learn from workshops held during FMI Connect 2015 on topics such as Consumer Engagement, Focus on Fresh, Health and Wellness at Retail, Private Brands, Retail Innovation and Technology, Insights for Independents, and International Perspectives.

Experts at the Expo

ake sure to bring your comfortable shoes: Tis year’s FMI Expo at FMI Connect features more than 700 exhibitors spread across a space spanning fve football felds. In this vast space, guests will glean information and resources on fresh and perishable products, packaged grocery, frozen products, retail technology, store equipment and design, health and wellness, and corporate services, among other sectors. Te FMI Expo is a veritable show-and-tell of the industry, featuring culinary demonstrations, a popular Supermarket Chef Showdown culinary competition, and Meet & Learn Power Hours for small-group discussions geared to specifc topics. Network while you nosh, too, at the new FMI Bistro located right on the show foor. Other hallmarks of the FMI Expo at FMI Connect are the Pavilion and Zone areas. As you map out your show experience, here’s a brief roundup:

Technology Pavilion: Tis dedicated space will provide infor-

mation on technologies that accomplish all kinds of goals, from driving consumer behavior to improving operations. Health & Wellness Pavilion: Here, attendees can learn

more about how health care services can be added to their retail environments.

Fresh Pavilion: New this year, this space focuses on fresh

oferings craved by Millennials, with ideas and solutions to reach these discerning shoppers — and others who are purchasing fresh foods in a diferent way. Food Safety Solutions Zone and Pavillion: With food safe-

ty issues remaining top of mind among food retailers and suppliers, this area will provide tools and solutions needed to address and overcome food safety challenges. Private Brands Summit and Pavilion: Tis year, the Private

Brands Summit is being held at FMI Connect. Leaders in the private-brand industry will gather to share ideas and gain new insights.

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2015 FMI Connect/United Fresh

United Fresh 2015: Produce Innovation Starts Here

ust like fresh produce starts from seeds and sprouts with frequent tending and maintenance, those who grow, supply and merchandise produce grow their businesses steadily and carefully in hopes

of a crop that benefts many. Tis year’s United Fresh event ofers many opportunities for retailers to improve and grow their own fresh food businesses, whether it’s checking out new products and packaging technologies, connecting with colleagues, or learning directly from the experts. Among this year’s many experts on the schedule who will share their experiences and inspire attendees:

General Session Speakers Robert A. Mariano, Chairman, President and CEO, Roundy’s Inc. Mariano will kick of United Fresh 2015 by delivering the keynote address at the opening breakfast general session. Having started in the business as a part-time deli clerk at 17, Mariano has led Roundy’s to become a top-performing regional chain; in 2010, he spearheaded the introduction of Mariano’s,

United Fresh Produce Association Founded in 1904, the United Fresh Produce Association brings together companies across every segment of the fresh produce supply chain, including growers, shippers, fresh-cut processors, wholesalers, distributors, retailers, foodservice operators, industry suppliers and allied associations. The organization empowers industry leaders to shape sound government policy and delivers the resources and expertise companies need to succeed in managing complex business and technical issues. United Fresh provides the training and development individuals need to advance their careers in produce.

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2015 FMI Connect/United Fresh

a unique grocery banner in the Chicago area. Tat banner, now including 30 stores, is known for its highly diferentiated food shopping experience. In his address, Mariano will share his perspective

Welcome from United Fresh! Greetings from President/CEO Tom Stenzel. We invite you to join us in Chicago June 8-10 as we “Celebrate Color & Flavor” at this year’s United Fresh 2015 show, co-located with FMI Connect and the International Floriculture Expo. Each year, United Fresh brings together executives from all segments of the fresh produce supply chain to engage in business opportunities and develop new partnerships that will grow our industry. Tis year will be no exception as leaders of the foral industry join us on the trade show foor for the frst time ever. Te North Hall of McCormick Place will be your go-to destination. Hear from top industry experts in Fresh Marketplace and FreshTech Learning Center education sessions, and explore new products and services form more than 1,000 exhibitors on our trade show foor. Start the celebration on Monday evening as we kick of with an Opening Party at Navy Pier. Reconnect with old friends and take the opportunity to introduce yourself to some new faces in the industry. While you’re there, be adventurous and take a ride on the Ferris wheel! Te networking continues throughout the week as we celebrate the leaders and stars of our industry at events such as the Reception Honoring Women in Produce, on Tuesday, and the Retail-Foodservice Celebration Dinner, on Wednesday evening. We’ve lined up a dynamic duo of general session speakers. Bob Mariano, president and CEO of Roundy’s, will wake us up Tuesday morning with an engaging tale of supermarket success, sharing the trends he follows to keep Mariano’s a top retail chain. On Wednesday, Mike Ditka will explore his career successes, weaving in tales of leadership, lessons learned and his journey into the NFL Hall of Fame — but how did he get there? You’ll have to attend to fnd out. I encourage you to visit our website, www.unitedfreshshow. org, to learn more about United Fresh 2015, and share in the excitement as we help you grow your business.

on the complex nature of today’s produce retail environment and how he sees it evolving.

Mike Ditka, NFL Hall of Famer and Former Chicago Bears Coach Ditka, a former NFL player on the Chicago Bears, beloved Bears coach, colorful football analyst and business owner, will deliver the Wednesday keynote address at this year’s United Fresh. He’ll share his playbook on the importance of leadership and teamwork, and provide insight into the drive and execution that lead to personal and professional success. Super Sessions In addition to the general sessions, United Fresh 2015 features fve issue-specifc “super session” topics: Consumer Trends and Their Impact on the Produce Industry, hosted by Te United Fresh

Fresh-Cut Processor Board Disruptive Technology and the Farm of the Future, hosted by Te United Fresh Grower-

Shipper Board Social Responsibility in a Global Produce Industry, hosted by Te United Fresh Retail-

Foodservice Board State of the Industry: Today’s Trends and the Future of Floral, hosted by Te United Fresh

Floral Advisory Board Strategic Planning for Family Businesses,

hosted by Te United Fresh Wholesaler Distributor Board and Finance & Business Management Council

Other educational sessions at United Fresh 2015 include: Fresh Marketplace Learning Center: Daily edu-

cational sessions on consumer trends, business strategies and marketing opportunities FreshTech Learning Centers: Daily educational

sessions on food safety, traceability and logistics, and emerging technologies

Tom Stenzel

President and CEO United Fresh Produce Association

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For a full listing of educational opportunities, visit www.unitedfreshshow.org.

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2015 FMI Connect/United Fresh

To Market, To Market

nited Fresh’s 2015 Fresh Marketplace features marketers and merchandisers of fresh produce products for retail, foodservice and wholesale levels of trade. New products, innovative concepts and ideas, and brand awareness will be showcased throughout this exhibit in various ways and forums. United Fresh 2015 also includes United FreshTech, a display highlighting tools, tech-

United Fresh 2015 Schedule at a Glance Sunday, June 7

Noon- 5 p.m.: Registration open

Monday, June 8

7:30 a.m.-5:30 p.m.: Registration open 7 a.m.-5 p.m.: International Floriculture Expo Education and Reception 8:30 a.m.-4 p.m.: Volunteer Leadership Meetings 5-6:30 p.m.: Fresh Marketplace VIP Reception (invitation only) FreshTech VIP Reception (invitation only) 6:30-8:30 p.m.: United Fresh/International Floriculture Expo Opening Party

nologies, equipment and services needed in the produce supply chain, along with new packing and packaging equipment, unique seed varieties, refrigerated transportation solutions, food safety, innovations, and more. Tis area is a destination for senior executives who make buying decisions on operations, food safety, quality control, warehouses and packing houses, and more. While they’re at the marketplace, attendees can take advantage of business suites on the show foor. Te suites are available for companies that want to hold private hospitality meetings with guests, customer planning sessions and/or team meetings.

Mark Your Social Calendars United Fresh 2015 includes several opportunities for networking, socializing and honoring those who’ve performed exceptionally well or shown their dedication to the industry. Events include: Opening Party at Navy Pier Reception Honoring Women in Produce Retail-Foodservice Celebration Dinner Retail Produce Manager Awards 2015 Produce Excellence in Foodservice Awards

Tuesday, June 9

7:30 a.m.-4 p.m.: Registration open 8-9:45 a.m.: Opening General Session Breakfast 10 a.m.-1 p.m.: Produce Forum for School Success 10 a.m.-4 p.m.: Trade Show open 10:15 a.m.-4 p.m: Fresh Marketplace and Fresh Tech Learning Centers 3:30-4:30 p.m.: Iron Designer Competition-A Produce/Floral Challenge 4-5 p.m.: United Fresh/Cornell Produce Executive Development Alumni Reception (invitation only) 5-6 p.m.: Reception Honoring Women in Produce 7-10 p.m.: Leadership Alumni Reunion Dinner (invitation only)

Wednesday, June 10

7 a.m.-4 p.m.: Registration open 7:30-8:45 a.m.: General Session Breakfast 9-10 a.m.: Super Sessions 10 a.m.-4 p.m.: Trade Show open 10:15 a.m.-4 p.m.: Fresh Marketplace and FreshTech Learning Centers 5:30-6:30 p.m.: Wholesaler-Distributor Networking Reception (RSVP required) 6:30-7:30 p.m.: Chairman’s Reception 7:30-9:30 p.m.: Retail-Foodservice Celebration Dinner

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International Floriculture Expo Those in the floral segments of the retail industry can learn how to make their programs bloom at the International Floriculture Expo (IFE), co-located this year with United Fresh and FMI Connect. The IFE is considered a leading trade show and educational program for retail florists, mass-market retailers, garden centers and nurseries, event floral designers, and other floral and foliage product merchants. Highlights of the 2015 IFE include an education program specifically focused on floral, along with inspirational design and product demonstrations, networking events, and exhibits. More than 225 companies will be exhibiting at the show, offering items and information ranging from cut flowers, bouquets and bunches, to containers and vases, to floral accessories. In addition to taking part in a pre-show education day, floral industry buyers and decision-makers can sit in on educational programs offered at United Fresh 2015 and FMI Connect 2015.

Fresh Food

Produce

Prescription Produce

The industry unites in promoting healthier living through fruits and veggies. By Jennifer Strailey

ore than supplying the staples of a healthy diet, today’s produce industry is tapping into the power of fruits and vegetables to change the world. Trough well-funded research, consumer outreach, philanthropy, and recipe development that’s both nutritious and delicious, produce purveyors are improving the way people eat and live. “Te California Strawberry Commission, Hass Avocado Board, California Table Grape Commission, Mushroom Council, California Raisin Advisory Board, Welch’s, Ocean Spray and others have spent years doing more research about the health benefts of their products,” observes Kristen Stevens, COO for the Produce for Better Health Foundation (PBH), a Hockessin, Del.-based nonproft organization whose mission is to achieve increased daily consumption of fruits and vegetables for better health. “Some of this was done to combat or correct misinformation — the fat in avocados is a healthy fat — and some is to further the knowledge about their product,” continues Stevens. By studying the vitamins, nutrients and positive health implications of everything from avocados to blueberries to so-called “supergreens,” produce suppliers and associations are able to communicate this crucial information to the consumer through innovative packaging and promotional campaigns. Te result is more consumers buying produce with specifc health goals in mind. In addition to detailed nutritional messaging, PBH also sees more suppliers investing in brands and packaging that spark sales and consumption. “Many are updating their packaging to be more colorful and eye-catching,” says Stevens. “Stemilt, Sunkist and Domex Superfresh Growers are recent examples.” But are these industry-wide eforts moving the dial on health and wellbeing in the United States? Every fve years, PBH releases its updated “State of the Plate” report on Americans’ fruit and vegetable consumption. For the most recent study, PBH commissioned consumer research through Te NPD Group, based in Port Washington, N.Y., for the year ending May 2014, to examine current consumption of fruit and vegetables in the United States. “Bottom line is that we are seeing progress and positive, forward-looking trends in fruit and vegetable consumption among consumers under age 40, which includes PBH’s target audience of parents with young children,” Stevens says of the report.

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Fresh Food

Produce

Focus on Children When it comes to improving the health of the nation’s youngest consumers, the produce industry has tackled the childhood obesity epidemic head-on with scores of product introductions that make eating fruits and vegetables fun and convenient for kids and their families. Eat Brighter!, a collaboration between Sesame Workshop and the Newark, Del.-based Produce Marketing Association that encourages young kids to eat more fruits and veggies, has played a signifcant role in this movement. Nature Fresh Farms, in Leamington, Ontario, recently launched a campaign to take the Eat Brighter! message to schools in Canada and the United States. With the help of in-school visits by Corporate Chef Henry Furtado, Nature Fresh has shown kids frsthand how to make fun and healthy snacks with tomatoes, peppers and cucumbers. “As a whole, the industry has much to gain by combating childhood obesity,” says Nature Fresh

Farms’ Chris Veillon. “We got involved with Eat Brighter! because childhood obesity is a big problem in North America, and we feel the partnership is tied into our corporate goals of consumer education about how to eat healthy.” Nature Fresh products featuring the Eat Brighter! creative began shipping the week of April 20. “We have seen a variety of industry-wide programs take shape over the years, with a common goal of increasing fresh consumption,” observes Veillon. “Each has had success in changing people’s perspectives on fresh, but what it comes down to is consumer education, and we have taken that to heart and are evolving our position in the marketplace to embrace this opportunity.” While childhood obesity is a critical piece of the health puzzle, so too, is undernourishment. According to the U.S. Department of Agriculture,

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Fresh Food

Bottom line is that we are seeing progress and positive, forwardlooking trends in fruit and vegetable consumption among consumers under age 40.” —Kristen Stevens, Produce for Better Health Foundation

Produce

15.8 million children were living in food-insecure households in 2013. Produce for Kids, in Orlando, Fla., is addressing this issue through its 13th annual Produce for Kids campaign, which kicked of April 24 and will run nationwide in the produce departments of select grocery stores through July. Te campaign, which is supported by more than 35 fresh produce suppliers, ofers in-store and online meal solutions, recipes and tips for families looking to embrace healthier eating habits. Since 2002, the campaign has raised $5 million for children’s charities. Tis year, Produce for Kids has a new primary philanthropic partner, Chicago-based Feeding America, the nation’s largest domestic hungerrelief organization. “We talk about kids eating healthy all the time. Feeding America allows us to take this to the next level, getting nutritious foods to those not receiving them,” says Produce for Kids’ VP Trish James. In-store displays and signage for this year’s campaign showcase characters from the flm “Cloudy with a Chance of Meatballs 2,” as well as an invitation to visit www.produceforkids.com, which features more than 200 recipes, meal-planning tools, grocery

store campaign details, and healthy tips from parents. Social media has become increasingly important to the Produce for Kids campaign: Trough Facebook, Pinterest and Twitter parties, the organization has reached millions of consumers. “Produce for Kids is well known in the industry, but we’re really working hard to grow our brand with consumers, so when they see us, they know we’re a trusted source,” notes James. “Tat ultimately drives sales of our sponsors’ products, it puts fresh fruits and vegetables in people’s baskets, and it raises money for charity.”

Avocado Nutrition Talk about a fresh produce success story: According to the Hass Avocado Board (HAB), per capita consumption has more than quadrupled over the past two decades, rising more than 200 percent in the past 10 years alone. Avocados have become a veritable poster child for healthy living, but that didn’t happen overnight. “Te avocado industry collectively spends tens of millions of dollars annually on marketing, clinical studies, and retail and foodservice partnerships,” notes Emiliano Escobedo, executive director of

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Irvine, Calif.-based HAB. “Tese eforts, combined with gains in distribution methods that allow more ripe fruit to hit the shelves, have translated into broader usage, boosting sales year-round.” In 2010, HAB established a Nutrition Research Program to increase awareness and improve understanding of the benefts of avocados to human health and nutrition. Te program explores heart health, weight management and diabetes, and healthy living. In late 2013, HAB launched Love One Today, a science-based food and wellness education program developed to encourage Americans to include fresh avocados in everyday healthy eating plans to help boost fruit and vegetable intake. “Trough the Love One Today program, studies related to heart health, healthy living and weight management have been published to encourage consumption of fresh avocados,” says Escobedo. “Most recently, a study out of Penn State University, funded by HAB and published in the Journal of the American Heart Association, found an avocado a day may lower bad cholesterol. “Te nutritional benefts of avocados are certainly a key reason why consumption has risen so rapidly, but studies also show it’s the variety of uses

Photo courtesy of Hass Avocado Board

for avocados that are the strongest driver,” Escobedo continues. “Because of this, HAB will continue to educate consumers about new, interesting ways to use avocados, beyond the traditional guacamole, through its Love One Today program.” To kick of avocado season in the Golden State, the Irvine-based California Avocado Commission recently released four California Avocado Breakfast Toast recipes. Te recipes, created by California chefs Maxine Sui and Jessica Koslow, include California Avocado Toast with Pickled Red Onions, Egg and Esplette Pepper, and California Avocado Toast with Prosciutto, Fennel and Medjool Date. Te commission hopes the recipes will increase

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Fresh Hass Avocados deserve all the attention. They’re already a hit with consumers, and support will only grow the category. The Hass Avocado Board is dedicated to understanding avocados’ health beneﬁts and industry trends, so we can better market to an increasingly nutrition-focused audience. Learn more about the Love One Today initiative at hassavocadoboard.com/LOTtrade.

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avocado and breakfast consumption, citing studies that show eating a healthy breakfast can help improve cognitive function and mood.

Blueberries With Benefits Berries in general, and blueberries specifcally, continue to garner press about the health benefts related to their consumption. An excellent source of vitamin C and manganese, and a good source of dietary fber, blueberries are also just 80 calories per 1-cup serving. “Exploring, understanding and promoting the health benefts of blueberries has been a priority since the U.S. Highbush Blueberry Council was formed in 2000,” says Mark Villata, the organization’s executive director. “Te council’s longstanding investment in scientifc research into health areas where blueberries may play a role acts as the foundation for virtually all of its promotion eforts.”

not only spotlights blueberries, but also involves social media activities with Sweeney. Te program reached tens of millions of consumers in January and February. “Awareness of the health and lifestyle benefts of blueberries is at an all-time high, and is projected to help triple U.S. per capita consumption from 1995 to 2015,” notes Villata, who points to research

Since 2005, the Folsom, Calif.based U.S. Highbush Blueberry Council has invested more than $4 million at 24 academic research institutions to study the health benefts of blueberries. “Because consumer demand for blueberries correlates strongly with awareness of health benefts, the council carries out continuous communication eforts promoting the role blueberries can play in a healthy way of life,” says Villata, noting the council’s work with celebrity spokeswoman Alison Sweeney, host of NBC’s “Te Biggest Loser,” on monthly Little Changes Challenges that last year encouraged hundreds of thousands of women across the United States to try blueberries in new and simple ways. Tis year, the council launched the Swap New Year’s Resolutions for Little Changes program, which May 2015 | progressivegrocer.com |

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Fresh Food

Awareness of the health and lifestyle benefits of blueberries is at an all-time high, and is projected to help triple U.S. per capita consumption from 1995 to 2015.” —Mark Villata, U.S. Highbush Blueberry Council

Produce

indicating that 84 percent of consumers are aware of specifc health benefts associated with blueberries, a 115 percent increase from 2004. Naturipe Farms, in Salinas, Calif., strives to keep blueberry nutrition top of mind with consumers. “We utilize our website as well as social media platforms to capture our audience’s attention and teach/remind them of the health benefts of berries,” says Kyla Oberman, director of marketing. “Retailers also know the importance of this message and work closely with us to develop health benefts messaging in their POS, as well as their own websites.” Te company’s newest product, Ready-to-Eat Blueberry Snack Packs, available in 100 percent blueberries, a mango/blueberry blend, and a grape/blueberry blend, is designed to make healthy snacking convenient. Naturipe is also involved in the Eat Brighter! campaign.

Hy-Vee Harnesses the Power of Potatoes Hy-Vee Inc., in West Des Moines, Iowa ,has awarded 130 One Step Garden Grants totaling $52,000 to community organizations and Hy-Vee stores this spring as part of the Hy-Vee One Step program. One Step provides $400 grants for the purchase of seeds, plants and garden tools for community gardens that teach those in need about health and nutrition through the process of planting, tending and harvesting their own fruits and vegetables. The program uses a portion of the proceeds from the sale of earth-friendly everyday products, including 5-pound bags of russet potatoes, to benefit local and worldwide charitable aritable causes. Sales of One Step Russet Potatoes fund the One Step Garden Grants. For each bag a customer purchases, 5 cents go toward funding the community garden grants. Overall, the One Step program has donated more than han $730,000 in product sales since its inception in 2011. “For years now, we have striven to lead the way and nd promote health and wellness in our communities,” says Tara Deering-Hansen, Hy-Vee, assistant VP of communications. “Whether it’s through our HealthMarkets [a designated area in the store with natural and organic products], in-store dietitians and clinics, or the community fitness events we sponsor, we want to make ake the healthy choice the easy choice for our customers.” s.” Hy-Vee added five new HealthMarkets and expanded ed

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Supergreens Dark leafy greens with superfood status, such as kale and spinach, are resonating with consumers like never before. In the past, uncertainty about how to prepare these and other greens kept some consumers at bay, but recipe promotion, nutrition messaging and temptingly convenient salad kits have gotten these greens the attention they deserve. Earthbound Farm promotes a wholly healthy life-

more than 50 existing HealthMarkets in its stores in 2014, and the Midwestern supermarket chain has 224 registered and licensed dietitians covering 96 percent of its locations. “Our in-store dietitians also aid in pointing out the benefits of eating produce and other healthy items to customers,” notes Deering-Hansen. “We offer Begin, a lifestyle management program for our adult customers and employees that focuses on eating for good health, weight loss and being physically active. Since launching the program in 2014, Hy-Vee dietitians have helped more than 2,000 people to complete it.” Hy-Vee is also doing its part to combat childhood obesity and educate kids on how to live a healthier lifestyle. Its Begin 4 Kids four-week program provides children with a passport that enables them to go on a journey with a dietitian through the Hy-Vee produce section, sample fruits and veggies, and learn why produce picks are good for them.

| Progressive Grocer | Ahead of What’s Next xt | May 2015

Fresh Food

I don’t think it is an exaggeration to say that we are as committed to sharing knowledge through the latest producebased health and nutrition research as we are in growing and marketing the produce we sell.” —Jenn LaVardera, Dole Food Co. Inc.

Produce

style and its products with a colorful and informationpacked website that ofers recipes, nutrition facts and more. Last month, in honor of Earth Day, the site featured a “How Green is Your Cart?” quiz that invited consumers to test their knowledge of green grocery shopping. Participants received a money-saving coupon. Te San Juan Bautista, Calif.-based produce company also recently launched three culinaryinspired certifed-organic salad kits: Kale Caesar, Sun-Washed Mediterranean Salad and Garden Party Salad. Each Earthbound Farm Salad Kit ofers twoand-a-half to three servings of a combination of favorful ingredients. Kale Caesar, for example, features baby kale, red and green cabbage, and shredded carrots packaged together with roasted sunfower seeds, aged parmesan cheese, multigrain croutons and a spicy light Caesar dressing. Te company has also added a new blend to its Half & Half product line, Baby Spinach & Arugula in a 5-ounce clamshell. Each serving of the blend ofers 100 percent of the recommended daily value of vitamin A, 30 percent of vitamin C, 10 percent of iron and 10 percent of calcium — all for just 20 calories a serving.

The Year of Health and Wellness As one of the world’s largest producers of fruits and vegetables, Dole is not only focused on conducting nutrition and health research, but also on sharing its fndings with consumers.

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“I don’t think it is an exaggeration to say that we are as committed to sharing knowledge through the latest produce-based health and nutrition research as we are in growing and marketing the produce we sell,” asserts Jenn LaVardera, nutrition and health communications manager at Tousand Oaks, Calif.-based Dole Food Co. Inc. In what represents the largest promotional program in Dole’s history, the company has launched Get Up and Grow!, a year-long initiative to make the world a better place by encouraging a diet rich in fresh fruits and vegetables. Representing a joint efort between the Dole Nutrition Institute (DNI); Dole Fresh Fruit, of Westlake Village, Calif.; and Dole Fresh Vegetables, of Monterey, Calif., the multiplatform program seeks to infuence consumer behavior in the home, at the store, and everywhere in between. Te initiative has Dole participating in a full slate of promotional opportunities to connect fresh fruits and vegetables with a healthy lifestyle, including National Eat More Fruits & Vegetables Day, a celebration of healthy, produce-based eating that Dole will host on May 21. “One key consumer trend right now is connecting health with happiness,” notes LaVardera. “Consumers are used to hearing that eating right is the path to better health, but we’re taking this message one step further to prove that eating right is the key to a happier, healthier world.” Tis connection between health and happiness is the idea behind Dole’s Get Up and Grow! initiative for 2015, which includes a summer-long tour bringing healthy-living insights and hands-on experiences to 480 stops in 45 cities across the United States and Canada. As a follow up to the tour, Dole will host FRESHFest (Finding Reasons to Eat Simply Healthy), the ofcial Get Up and Grow! Summit, in September 2015. PG

Fresh Food

Produce Category Spotlight

Rooted in Health Historically humble vegetables offer year-round nutrition and trendy tastes. By Jennifer Strailey

nce considered the food of peasants, root vegetables have undergone an image overhaul of late that has celebrity chefs singing their praises, restaurateurs increasingly adding them to menus and consumers happily cooking them at home. Not only are vegetables like sweet potatoes, celery root, carrots, parsnips and rutabagas deeply satisfying to consume, they’re also favorful and packed with nutrients. Take sweet potatoes, for example: Considered among the world’s healthiest foods, they are rich in such nutrients as beta-carotene, vitamin C and potassium. But while sweet potatoes, onions and carrots are commonplace root vegetables that consumers purchase regularly, items like celery root, rutabagas and parsnips are relatively new additions to shopping baskets across the country. Fueled by attention from celebrity and restaurant chefs, as well as positive press about the health benefts of these underground gems, root vegetables are clearly poised for growth. In its “11 Hottest Food and Beverage Trends in Restaurant and Hotel Dining for 2015” (a.k.a. the “Whiteman Report”), the international food and restaurant consultants at Brooklyn, N.Y.-based Baum + Whiteman cite “ugly root vegetables” as a top trend. “Celery root, parsnips and kohlrabi are grabbing attention in restaurant kitchens … fried, mashed, puréed, gratinéed; favored with cured pork or smoked honey … [H]umble themselves, they replace humble potatoes with lots more inherent favor,” the report notes. British celebrity chef Jamie Oliver agrees that celery root, or celeriac, as it is also known, is a diamond in the rough. “Tis is the most underrated vegetable in the whole of the United Kingdom,” he writes on www.jamieoliver.com. “It’s available in every single supermarket, we walk past it all the time, and yet we still take no notice of it. It’s an incredible vegetable, it’s really good for you, and you only need to use two or three ingredients to bring it to life and blow people’s socks of.” Fueled by the tasty results of chef experimentation and

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

a desire to experience new favors and nutrient-dense foods at home, consumers increasingly are embracing the full spectrum of root vegetables. “We are seeing a trend in the less conventional root vegetables like rutabaga, turnip and celery root,” observes Karen Caplan, president and CEO of Frieda’s Specialty Produce, in Los Alamitos, Calif. “With vegetables taking center stage in restaurants, chefs and diners are looking for something beyond carrots and potatoes.” Caplan notes that celery root is cultivated only for its root. It has a mild aroma and a celery-walnut favor with a crisp texture when served raw. When cooked, it becomes more starchy and potato-like. It’s available year-round from Frieda’s. At Melissa’s Produce, in Vernon, Calif., sales of root vegetables are also on the rise. “We have seen growth in the root category like potatoes, beets, ginger, sweet potatoes (yams), parsnips, fennel, celery root and colorful carrots, too,” says Director of Public Relations Robert Schueller. “We attribute the increase to the popular use [of root vegetables]

in restaurants, and consumers’ knowledge of usage from television cooking shows and from the media.” Melissa’s newest root vegetable introduction is a convenient pack of baby parsnips with the frm yet tender texture that only a young root can ofer. Schueller further notes that parsnips of any size are a good source of fber, calcium and vitamin C. Baby parsnips also ofer the added convenience of cooking in less time than a turnip or carrot. Tey caramelize when roasted, and long strips of shaved baby parsnip curls can add a sweet crunch to any salad, according to Schueller.

We are seeing a trend in the less conventional root vegetables like rutabaga, turnip and celery root.” —Karen Caplan, Frieda’s Specialty Produce

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Fresh Food

Produce Category Spotlight

Cooking using fresh whole ingredients, such as root vegetables, has become this whole movement.” —Natasha Shapiro, Love Beets

To build on the popularity of its Steamed Beets, Melissa’s recently introduced French Country-Style Red Beets in Balsamic Vinaigrette. Delicately favored with shallots, herbs, oil and vinegar, these beets can be enjoyed right out of the package.

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Beautiful Beets While beets don’t exactly leap to mind as one of the sexier foods on the culinary scene, according to Love Beets, in Bala Cynwyd, Pa., one of the earliest known benefts of the red beet was its use as an aphrodisiac during Roman times. Beets are certainly powerhouses of nutrition, containing nutrients such as potassium and nitrate that can help lower blood pressure. Te root vegetable also contains betaine, which protects the liver and stimulates the function of its cells. Love Beets, which ofers a line of marinated and fresh beets, has recently launched fresh, refrigerated beet juice in Organic, All-Natural and Cherry-Berry varieties, and will soon debut beet

bars in three favors: Beet and Cherry, Beet and Apple, and Beet and Blueberry. Te company is also set to premiere Beet Chips. To counter the beet’s rather staid image in modern times, Love Beets recently underwent a complete rebranding with a specifc goal in mind. “We wanted to be the opposite of what people think of when they think of beets,” asserts Natasha Shapiro, Love Beets’ marketing manager. Te rebranding, which rolled out last September, included a packaging, logo and website redesign. “We wanted to create something fun, upbeat and whimsical, but at the same time be taken seriously as a brand while keeping our brand DNA,” Shapiro says of the redesign. Love Beets ofers fve varieties of marinated baby beets in 6.5-ounce packages: Sweetfre Beets with a spicy chili kick, Honey and Ginger Beets, Mild Vinegar, White Wine and Balsamic, and Organic Mild Vinegar. All are sold in the newly redesigned packaging, which will soon feature a Non-GMO label. “Cooking using fresh whole ingredients, such as root vegetables, has become this whole movement,” observes Shapiro. “Fruits and vegetables that 10 years ago would have seemed obscure or earthy/crunchy are now mainstream. We saw it with kale. It was almost like kale was the face of this new food movement, and now we see other foods stepping into the limelight — like beets — that are stealing kale’s thunder.” Tis is especially the case with the company’s beet juices, notes Shapiro. “Tey really appeal to ftness enthusiasts and athletes. In that community, people have been juicing beets for a long time. It’s amazing how many of them already know about the benefts of beets.” For example, beets help to increase blood fow and reduce the oxygen needed by muscles, enabling them to work more efciently.

Peri & Sons Farms’ entry into the program all the more bold and unique. Te Yerington, Nev.-based grower will ofer a “Sesame Street”-branded package of premium onions beginning this month. “Tere are many fruits and vegetable that kids are immediately drawn to; we thought it would be interesting to see how they react to the familiar ‘Sesame Street’

Always A-peeling Onions While scores of produce companies have joined the Eat Brighter! movement, a collaboration between Sesame Workshop and the Produce Marketing Association, the majority of suppliers thus far have come from the fruit side of the business, which is what makes May 2015 | progressivegrocer.com |

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Fresh Food

There are many fruits and vegetable that kids are immediately drawn to; we thought it would be interesting to see how they react to the familiar ‘Sesame Street’ characters when it comes to a vegetable outside their comfort zone.” —Teri Gibson, Peri & Sons Farms

Produce Category Spotlight

characters when it comes to a vegetable outside their comfort zone,” says Teri Gibson, director of marketing and customer relations. Peri & Sons will ofer its white, yellow and red onions in 2-, 3- and 5-pound packs, printed with large, colorful images of Big Bird and Ernie, to its customers throughout the United States. Whether kids embrace onions, their parents’ desire for year-round availability of sweet onions is insatiable. “Consumers all over the U.S. seem to want sweet onions all year long,” afrms Gibson. “Our season for a tested sweet onion, our proprietary Sweetie Sweet, begins in mid-July with onions grown on our farms in the San Joaquin Valley of California. Once September rolls around, we begin packing our Nevada Sweetie through December. “Seed companies are working with growers to produce varieties grown for the storage months that have true sweet favor characteristics,” she continues. “Te challenge is to provide a domestically grown sweet onion during the months of January through March, because the longer an onion is stored, it [more it] loses its sweetness.”

But while demand for onions in general, and sweet onions in particular, is on the rise, Gibson is sees this less as a trend than as a way of life. “Being such a versatile, year-round product that is also ethnically diverse, onions transcend most veggie trends,” she asserts. “Every season presents opportunities to incorporate white, red, sweet or yellow onions into whatever’s on the menu. Onions add favor, fber and health-promoting phytochemicals, as well as nutrients, to popular food movements such as paleo, Mediterranean, gluten-free, vegetarian and vegan.” PG

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Lisa A Hutchinson Product Manager, Frozen Turkey Hill Dairy Progressive Grocer: How would you gauge consumers’ interest in all natural products? Lisa Hutchinson: In addition to primary research and data analytics, you can gauge consumer interest in all-natural products across all categories in virtually all media outlets. It’s rare to get through a day without seeing some news coverage extolling the virtues of simple lifestyles and natural foods. I think the growth in consumer interest is evidenced by the ever-expanding natural and organic sections in supermarkets across America and the proliferation of all-natural selections across different categories, like baked goods and salty snacks, for example. We are thrilled to be able to offer all natural ice cream and gelato with clean, simple labels. PG: To convey a product’s all-natural attributes, how important are package visuals and information? LH: I believe the package design and relevant information on the principal display panel is critical since that is what consumers see at the point of purchase. The package should convey simplicity and purity to help target those consumers who place a high value on all natural attributes.

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Q &A

PG: What are some of your newest products? LH: We have recently added some new flavors to our All Natural Ice Cream line, like Butter Pecan, Butter Almond & Chocolate, and Belgian Style Chocolate. We are also excited about our new All Natural Gelato line featuring eight naturally simple and indulgent flavors including Sea Salted Caramel, Purely Vanilla, Chocolate Chocolate Chip, Coffee Chip, Mint Chocolate Chip, Hazelnut, Chocolate Peanut Butter and Peach Mango. All of the flavors were vetted with consumers via flavor concept testing as well as sensory research to help optimize flavor assortment.

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

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Nonfoods

Energy Boosters

A Shot in the Arm

Grocers can take advantage of channel shifts for energy-boosting products. By Barbara Sax

N There has been a strong shift from the convenience channel to the conventional channel as consumers increasingly view energy drink products as part of their daily routine.” —Emily Neuman, The Hain Celestial Group

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egative press may have dampened consumers’ desire for energy boosters, but tired consumers are still interested in energy-boosting products, whether they’re energy shots or supplements. Sales of energy shots were fat for the 52-week period ending March 22, 2015, according to Chicago-based IRI, with sales in the supermarket channel at $93 million, a 0.5 percent dip from 2013 sales. Sales dropped nearly 10 percent for the same period in the drug channel for the same period, and 3 percent for multioutlets. Despite news reports of emergency room visits and deaths related to consumption of energy drinks, manufacturers say that when consumers use the products responsibly and as indicated, energy shots and supplements can be a useful way to boost energy. Convenience stores continue to have the greatest share of the business, but supermarket retailers have been able to gain some share on the strength of multipacks and value-price promotions.

Shifting Channels “Tere has been a strong shift from the convenience channel to the conventional channel as consumers increasingly view energy drink products as part of their daily routine,” says Emily Neuman, a spokeswoman for Te Hain Celestial Group, in New Hyde Park, N.Y., whose Celestial Seasonings

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

portfolio includes Kombucha Energy Shots, Energi Green Tea Energy Shots and Pomegranate Xtreme Kombucha Energy Shots. “We’ve also seen an increase in consumption in the home. Te result is shoppers ‘stocking up’ on these types of beverages on their routine shopping trips so they can always have product on hand.” Pleasanton, Calif.-based Safeway, for example, merchandises single shots near the checkout but promotes multipacks in its vitamin section. Te grocer doesn’t ofer much selection in the segment, relying exclusively on Living Essentials’ 5-hour Energy brand for a variety of multipacks priced promotionally. According to data from IRI, Farmington Hills, Mich.-based Living Essentials’ 5-hour Energy dominates the food channel with a nearly 89 percent dollar share, while private label brands account for about 5 percent of dollar share in the channel. 5-hour Energy is also the most promoted energy shot brand in the channel, with more than two-thirds of ad activity in the segment, according to data from Solon, Ohiobased ECRM. Tokyo-based Taisho Pharmaceutical’s Lipovitan generated 8 percent of segment ad activity, according to ECRM data; Taisho’s website includes a $1-of coupon for in-store use when consumers purchase a 6-pack of shots. Private label brands show a very slight uptick in sales, while 5-hour Energy sales are fat or slightly down. “As one of the country’s largest private label manufacturers, we are consistently approached by

customers wanting to enter the beverage market with an energy shot or drink containing a propriety blend or one of our in-house blends with their own twist,” says Karen Finocchio, EVP at Andover, N.J.-based NVE Pharmaceuticals. “Growth in consumer use and the ease [with] which an energy shot can be displayed [are] propelling this category beyond early expectations.” Accordingly, NVE has seen growth of its Stacker2 brand. “We are always exploring new avenues for our ... branded products as well as for our private label customers,” notes Finocchio. Sebastopol, Calif.-based Guayaki Brand’s Yerba Mate energy shots, made from the naturally caffeinated leaves of a South American rainforest tree, have also shown growth, but of a smaller base. Tis indicates that shot and supplement consumers may be ready for brands positioned as more natural alternatives. Chris Schmidt, of London-based market research frm Euromonitor, notes in a blog post that companies are increasingly using ingredients such as green tea extract, green cofee bean extract, guarana and yerba mate in an efort to position their energyboosting products as “natural” sources of energy. “We know there’s strong consumer demand for natural energy alternatives, so we’ve added Energi shots to our natural shot line for consumers who want to enjoy the benefts of energy shot products while still making choices they feel good about,” says Blake Waltrip, VP and chief marketing ofcer at Boulder, Colo.-based Celestial Seasonings, a Hain Celestial brand, which launched the Energi shot in 2012.

Supplemental Energy In the vitamin, dietary supplement and sports nutrition categories, Euromonitor’s Schmidt notes that manufacturers ofer a wide range of products featuring non-cafeine-based energy-boosting properties, with vitamin B a particularly popular ingredient. Ginseng is also widely used as an energyboosting ingredient. Schmidt notes that a number of large multinational pharmaceutical manufacturers have invested in herbal/traditional medicine. Tis past summer, one of them, Germanybased Bayer AG, launched Berocca, an energy support supplement in an efervescent tablet that fzzes when dropped into water, in the United

States. Te product has been available in other countries for 20 years and is used globally to combat hangovers. In the States, Bayer is positioning Berocca as a performance multivitamin that helps improve mental performance and physical stamina, somewhere between an energy shot and a supplement. Containing a combination of B group vitamins and vitamin C, the product is enhanced with added calcium, magnesium and zinc. Bayer is putting plenty of advertising muscle behind the product and ofering $1-of coupons available at point of purchase. Safeway merchandises Berocca in two locations: next to energy supplements and near energy shots. Te Nature’s Way Alive line now includes both Women’s Energy and Men’s Energy products. Te Green Bay, Wis.-based brand also ofers Alive multivitamins as well as single B vitamin products designed to boost energy. Manufacturers such as Brevard, N.C.based Gaia Herbs and Amazing Grass, in Newport Beach, Calif., have introduced plant-based products that can be added to a shake for an energy boost. Promoting the category and merchandising products in multiple locations can boost sales. According to NVE’s Finocchio, there are a number of opportunities throughout stores to display energy and functional shots. “Te compact size of 2- and 4-ounce energy shots promoting seasonal packaging and favors makes the clip strip an easy way to display shots anywhere, in any aisle,” she says. “Stores can add a clip strip to the snack, drink or even the baby products aisle so the products are available for anyone or everyone who needs energy.” New products are also important to category growth. For the second year, 5-hour Energy is offering limited-edition cherry-favored shots from May through July, and the company will donate 5 cents from the sale of every specially marked redwhite-and-blue bottle to the Special Operations Warrior Foundation, a nonproft organization that supports the military’s special operations forces and their families through college scholarships, family services and fnancial stipends. New York-based SK Energy Shots have recently been repackaged in brushed aluminum bottles with a softer, colorful font. Te brand is also de-emphasizing the product’s full Street King name and its association with rapper 50 Cent, one of SK’s co-owners. PG

Stores can add a clip strip to the snack, drink or even the baby products aisle so the products are available for anyone or everyone who needs energy.” —Karen Finocchio, NVE Pharmaceuticals

May 2015 | progressivegrocer.com |

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Nonfoods

2015 NACDS Total Store Expo Show Preview

The Business of Wellness The NACDS Total Store Expo offers insights on how to better interface with customers and suppliers.

etailers in the health care, wellness and pharmaceutical categories can look ahead to the 2015 NACDS Total Store Expo, to be held Aug. 21-25 at the Colorado Convention Center in Denver. Hosted by the National Association of Chain Drug Stores (NACDS) along with four cuttingedge technology companies, the Total Store Expo provides a look into the future of the industry in a high-tech way, via technology platforms and interactive experiences and displays. According to Jim Whitman, SVP of member programs and services for Arlington, Va.-based NACDS, this trade show is a way for the industry to address the changing nature of the business at both the retailer and supplier levels. “From the front end, pharmacy and distribution sides, it makes sense that everyone is trying to do something more efciently. Te Total

Store Expo is designed to serve the interests of retailers and suppliers as they are moving more toward this total enterprise,” Whitman says. “Being in one location for four days and having executives, principals and people who own intellectual content together makes sense, to show people how they can do more with less.” In addition to networking sessions, the 2015 NACDS Total Store Expo features a full lineup of educational programs, including general sessions and insight sessions on specifc industry-related topics. Whitman also points to the show’s helpful resources, such as templates and outlines of what’s needed to be successful, along with appointmentbased meetings at the show that provide true takeaways for attendees. PG To register or learn more, visit http://tse.nacds.org.

ADVERTORIAL

Talking with…

Steve Mehmert President, Mehmert Store Services Progressive Grocer: Tell us a bit about Mehmert Store Services. Steve Mehmert: Mehmert Store Services is dedicated to providing a fresh perspective on supermarket architecture and design, project management, and equipment procurement services to independent retailers. We become the retailer’s advocate in planning their store. We are a specialty design firm and one of the benefits of working with us is that we have no preconceived notions — we seek out customers, listen and find out who they are and what they are about. We’re motivated by what’s best for them and we’re forced to stay sharp on what we can do to help them capture the most out of their market. When I started my career working for wholesalers 25 years ago, if a retailer wanted to design or remodel a store, they called their wholesaler. Times have changed. Many wholesalers are now focused on logistics and cost of goods where they can benefit independents the most. Some no longer offer the services that we provide or have altered their approach in this area of their business model.

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Q &A

AR PROJECT MAN EQUIPMEN PROJECT MAN AS EQUIPMEN AS

PG: Describe your store improvement design process. SM: We start every project by traveling to a customer’s store, walking, listening and taking notes to learn about their strong points and weak points, and where they are in their market. We still like to grab a pen and draw out sketches and then continue back and forth in the process of communication. Through the use of technology, we provide details of the layout, how it relates to merchandising, and what it will communicate to the consumer. Add to that our full-service project management, equipment procurement, construction supervision, and interior décor services and you have a one-stop shop. We are with independent retailers from the time pen hits to paper to the time the last tag goes into the deli. PG: What motivates an independent retailer to seek out a specialty design firm? SM: Independent retailers are very community-minded and entrepreneurial and they want their store to represent their own unique brand. No two are alike, and they are searching for those partners who can help them stand apart.

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

INTERIOR INTERIOR PROJECT MANAGEMENT PROJECT MANAGEMENT

Schedule at a Glance Friday, Aug. 21 8 a.m.-6 p.m.: Exhibit Hall Installation 8 a.m.-6 p.m.: Registration 5:30-6:30 p.m.: First-time Exhibitor Orientation Saturday, Aug. 21 7-8 a.m.: Meet the Market Networking Continental Breakfast 7 a.m.-5:30 p.m.: Meet the Market Registration 7 a.m.-7 p.m.: Registration 8 a.m.-6 p.m.: Exhibit Hall Installation 9:30 a.m.-5:30 p.m.: Meet the Market 11:00 a.m.-4 p.m.: Meet the Retailer 3-4:30 p.m.: NACDS Institute 5-6 p.m.: NACDS Political Involvement Reception 6-7:30 p.m.: Welcome Event Sunday, Aug. 23 7 a.m.-7 p.m.: Registration 7:30-8 a.m.: Networking Continental Breakfast 7:30-9:30 a.m.: Exhibitor Final Prep 8-9:30 a.m.: Business Program 9:30-11:30 a.m.: Retailer Exhibit Hall Preview 10-11 a.m.: Speaker Sessions 10 a.m.-Noon: NACDS Board of Directors Meeting/Leadership Roundtable

11:30 a.m.-2:30 p.m.: Lunch 11:30 a.m.-6 p.m.: Cyber Stations 11:30 a.m.-6 p.m.: Exhibit Hall Open 6-7:30 p.m.: Total Store Expo Reception Monday, Aug. 24 7 a.m.-7:30 p.m.: Registration 7:30-8 a.m.: Networking Continental Breakfast 8-9 a.m.: Speaker Sessions 9:30 a.m.-6 p.m.: Cyber Stations 9:30 a.m.-6 p.m.: Exhibit Hall Open 11:30 a.m.-2:30 p.m.: Lunch 7:30-10:30 p.m.: Denver Extravaganza, Featuring the Goo Goo Dolls Tuesday, Aug. 25 7 a. m.-Noon: Registration 7:30-8 a.m.: Networking Continental Breakfast 8 a.m.-Noon: Cyber Stations 8 a.m.-Noon: Exhibit Hall Open

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A Fresh Twist on ^ Store Design A Fresh Twist on Store Design ...it’s what we do ...it’s what we do We specialize in supermarkets - it is all that we do. Working We specialize it is all that we do. Working within budgets in ofsupermarkets $1,000 to $12-million, the Mehmert team has within budgets of $1,000 to $12 million, the Mehmert team has managed and designed projects spanning from the installation managed designed projects spanningconstruction from the installation of a singleand bakery case to the ground-up of a new of a single bakery case to the ground-up construction of a new store. For over 25 years we’ve brought a fresh perspective to store. For over 25 years we’ve broughtequipment a fresh perspective to supermarket architecture and design, management, supermarket architecture and design, equipment management, and project management to retailers nationwide. and project management to retailers nationwide.

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Treat Them Right A growing segment of the overall pet category provides new opportunities for retailers. By Kathleen Furore

G For the dog and cat products market, treats made up approximately 16 percent of the pet food market in 2014, for a total approaching $5 billion across all channels.” —Shannon Brown, Packaged Facts

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ood behavior pays of big time for Buster Tortorice. Te 2-year-old collieshepherd mix, adopted by the Tortorice family, of Oak Park, Ill., in May 2014, is usually rewarded two to three times each day with a variety of treats. “He would eat anything!” notes Kathy Tortorice, who watches the nutritional content of the goodies Buster gets. “I buy only those that don’t list bone meal, propylene glycol, lots of dyes or MSG as ingredients. … Occasionally, he gets an orange section or a piece of real banana. We use an elk antler to satisfy his chewing urges.” Te Tortorices are among a growing number of pet owners helping to heat up the pet treat category. January 2015 data from Rockville, Md.-based Packaged Facts show that about threefourths of dog and cat owners purchase pet treats, which are becoming a signifcant part of the pet food marketplace, according to Shannon Brown, a pet industry market research analyst who worked on Packaged Facts’ “Pet Treats in the U.S.” report. “For the dog and cat products market, treats made up approximately 16 percent of the pet food market in 2014, for a total approaching $5 billion across all channels,” says Brown. “Approximately 80 percent of the market is made up of dog treats, but cat treats are now growing at a slightly greater rate than dog treats. Moreover, pet treat sales have been outpacing overall pet food sales over the past several years.”

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

Information from a Euromonitor report, “Dog Food in the US July 2014,” mirrors Packaged Facts’ data. Te report from London-based Euromonitor identifes dog treats as “another signifcant engine of growth in 2013 … achieving high growth in both value and volume terms (8 percent and 4 percent, respectively).”

Current Treat Trends What’s driving the demand for pet treats? According to Packaged Facts’ “U.S. Pet Market Trends and Outlook” seminar at the 2015 Global Pet Expo, in Orlando, Fla., pet treats have grown their share of the overall pet product market due, in part, “to the robust interest in functional treats as a way to ameliorate pet health conditions and promote overall wellness.” For example, 29 percent of dog owners and 24 percent of cat owners purchase treats with special nutritional benefts, Brown notes. Tis growing preference for healthy treats has spurred new product introductions. Menomonie, Wis.-based Vets Plus recently debuted Probios yogurt-favored soft-chew supplements that combine the benefts of probiotics plus prebiotics, targeted vitamins, minerals and herbs, and Probios Dental Sticks featuring yogurt, which support healthy digestion with

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prebiotics and probiotics. Also new to Vets Plus: veterinarian-formulated Smart Fido USA for dogs and Smart Kitty USA for cats — product lines ofering a range of gluten- and soy-free supplements and treats. Loving Pets Products ofers Natural Value dog treats, which are wheat-, soy- and gluten-free, and Purely Natural cat treats with no additives, glycerins, artifcial preservatives or fllers. Further, a new treat — crunchy, all-natural Pufsters, made without additives, glycerin, preservatives, soy or corn — is coming soon, according to the Cranbury, N.J.-based company’s website. Recent acquisitions also underscore the important role pet treats now play in many companies’ pet food portfolios. In January 2014, St. Louis-based Nestlé Purina PetCare purchased Zuke’s Treats, whose lineup of natural pet treats includes Z-bones, edible grainfree dental chews, and Hip Action for dogs and

Natural Purrz for cats. In February 2014, Wichita, Kan.-based Cargill branched into the pet treat and chew arena with the acquisition of Pet Carousel, a manufacturer of bones, chews and rawhides with no additives or preservatives. Other trends, according to Packaged Facts’ Brown, include: Made in the USA: Safety concerns about products made in China have prompted some stores to pull those treats. “However, consumers should be aware that ‘Made in the USA’ products may contain ingredients that come from elsewhere, and thus may still pose a potential risk,” Brown cautions. Locally sourced ingredients are a related trend, she adds. Grain-free/ancestral diet: Tis mirrors what’s happening in the overall pet food market — the

A Weighty Matter

Specially formulated foods can help owners care for overweight pets. By Kathleen Furore

ealth and wellness: Tose words sum up a burgeoning trend in grocery retailing today — a trend that’s also making its way into the pet food market. “As the pet industry continues to mirror human food and diet trends, pet owners are becoming more aware of the quality and source of food given to their animal companions,” according to the American Pet Products Association’s 2014 annual comprehensive report. “Pet food manufacturers are ofering new varieties of food for dietary preferences, medical issues, overall health and other partialities, and pet owners are paying for these options.” Weight issues are at the front and center of consumers’ health-and-wellness concerns. With the rise in pet obesity rates, that means pet owners are looking for products that can help them manage their animal companions’ weight, too. “According to the Association of Pet Obesity Prevention, and its 2014 Pet Obesity Study, an estimated 52.7 percent of U.S. dogs are overweight or

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

use of exotic proteins such as elk, duck and bison, Brown explains. Humanization: Tis includes exotic favors and human-style presentations. Neutraceutical ingredients: Tese include coconut oil, chia seeds and fax oil, says Brown. Small-batch, handmade-style treats All signs point to continued growth for the pet industry, which continues to outpace most other retail segments, according to Bob Vetere, president and CEO of the Greenwich, Conn.-based American Pet Products Association. “For 2015, we are projecting [the industry] to surpass the $60 billion mark, which demonstrates the strength and vitality of this

obese, and an estimated 57.9 percent of U.S. cats are overweight or obese. Tis is a slight increase over their study results in 2013,” notes Paul Cooke, VP of trade and industry development at St. Louisbased Nestlé Purina PetCare. “So obesity appears to be a growing problem for both cats and dogs, and through our own research, we’ve found that weight can play a big role in a pet’s overall health.”

Understanding and Managing Pet Obesity While it can be tough for your customers to tell whether their pets should lose a few pounds, there are tell-tale signs that managing their animals’ diets should be a priority, and knowing them can help you point your pet food shoppers in the right direction. Feeling around a dog’s ribs and spine is a good place to start. “You should be able to locate both with only a thin layer of fat separating the skin from the bones,” information from WebMD Pet Health Center instructs. “If you can’t find the ribcage, you have an overweight dog.” Determining a pet’s optimal weight, which vets can help do, is also key. “Dogs are considered to be overweight when they weigh 10 percent to 20 percent above their ideal body weight. Tey’re considered obese when they weigh more than 20 percent above their ideal body weight,” notes information from VCA

industry,” he noted at the 2015 Global Pet Expo. As information from Packaged Facts notes, “Te pet market’s longer-term growth and prospects have continued to attract new players, expanding the range of marketers and retailers vying for a slice of the pie.” Since pet treats comprise a signifcant portion of the overall pet product market, stocking a variety of treat items in the pet aisle would be a wise step for retailers hungry for a piece of the profts. PG

Animal Hospitals, a network of 600 animal hospitals in 42 U.S. states and four Canadian provinces. Addressing weight issues is important because extra weight can have serious efects on a pet’s quality of life, including breathing problems, heat stroke, high blood pressure and heart disease. Purina’s 14-year lifespan study, published in 2001, revealed just how important a healthy weight is. “Findings included that dogs fed to a lean body condition throughout their lives had a median life span nearly two years longer than overweight dogs and a later onset of chronic conditions such as osteoarthritis,” asserts Cooke.

Retailers’ Role How important is it for retailers to carry a selection of products designed for customers with overweight pets? Te importance is growing, right along with the number of plump pets. Manufacturers are stepping up with products specifcally designed to help retailers meet the demand for weight control and maintenance products. Among the items appearing on store shelves: Iams ProActive Health Adult Weight Control, Iams Healthy Naturals Weight Management with Chicken, Pedigree Healthy Weight Food for Dogs, Purina Dog Chow Light & Healthy, Purina One SmartBlend Healthy Metabolism wet cat foods, and Purina Cat Chow Healthy Weight formula. “Since more than 50 percent of pets in the U.S.

The challenge retailers may face is in convincing consumers that their pet is overweight in the first place, and needs to switch to a lower-calorie diet.” —Paul Cooke, Nestlé Purina PetCare

May 2015 | progressivegrocer.com |

163

Identifying Obesity-prone Breeds Some dogs are more prone to obesity than others. While greyhounds, German shepherds and Yorkshire terriers are typically slim, breeds with a propensity for heftiness include the following:

Small breeds: cairn terriers, dachshunds, Scottish terriers and cavalier King Charles spaniels Medium breeds: beagles, cocker spaniels,

basset hounds

Large breeds: Labradors, golden retrievers,

rottweilers

Giant breeds: Bernese mountain dogs, Newfoundlands, Saint Bernards Source: http://pets.webmd.com/dogs/guide/ overweight-dogs-and-canine-weight-loss-diets

are overweight, these weight management formulas most defnitely fll a critical consumer need,” says Cooke. “Te challenge retailers may face is in convincing consumers that their pet is overweight in the frst place, and needs to switch to a lowercalorie diet. In fact, in June 2014, Dog Chow Light & Healthy surveyed U.S. dog owners on the topic and found that there is a big gap between dog owner perception and reality.” Educating customers about how weight issues can impact their pets, and the steps they can take to improve their pet’s health, is one way retailers can tap into this growing segment of the pet category. “Tis communication can be done at shelf, but is likely more efective through a larger 360-degree marketing campaign from the manufacturers,” Cooke suggests. PG

Pet Product Showcase Kong Wild Antlers Give customers a chance to bring a little bit of the wild home for their dogs. Kong Wild Antlers are ultra-durable, odor-free, mineral-rich chews that clean pets’ teeth and gums. Made of grade-A,, naturally shed elk k antlers, the products ucts come in several styles and sizes, including whole, split and as a rope toy. www.kongcompany.com

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contain no soy, corn, gluten or added sugars. www.vets-plus.com

Wahl’s Grooming Accessories PetsPrefer Products From Vets Plus Lean jerky bites, dental sticks and treats, and gluten-free supplements have joined the PetsPrefer product line. The jerky bites for dogs, available in four flavors, feature real Wisconsin cheese, plus rosemary and lecithin to support cognitive function. For cats, the line now includes dental treat chews in four flavors. Nondrying shampoos, fish oil and protective paw balm round out the line. The veterinarianformulated products

Available this spring from the company are two new lines of specialty brushes, combs and nail clippers for a variety of pet breeds and needs. The green line is designed for small to midsized dogs; the orange line is a premium line for all breeds. All brushes feature stainless steel bristles and pins strong enough to untangle the thickest coats, yet gentle enough to pass through shorter fur without irritation. Both lines include a Double Sided Pin Brush, Slicker Brush, Nail Clipper, Flea & Tick Comb, and Undercoat Rake. www.wahlhomeproducts.com

May 2015 | progressivegrocer.com |

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Supply Chain

Technology

Down the

Road

The future of fleet management depends in great part on emerging technology. By Bob Ingram

s much as it’s afecting the shopper experience inside the grocery store, technology is infuencing the way products reach the supermarket. To be sure, all points along the supply chain are being honed by the infuence of digital, and feet management is no exception. “Technology is driving rapid change in feet management and is impacting the competitive landscape in the areas of data analysis and equipment specifcations,” says John Flynn, CEO of Fort Lauderdale, Fla.-based Fleet Advantage. Te company’s philosophy of economic obsolescence posits that it’s much more efcient and costefective to run trucks until it becomes cheaper to get a new truck than to operate an old one, rather than trying to extend vehicles’ working lives by operating trucks until they become functionally obsolete. “We are fnding that the ‘tipping point’ occurs between 36 and 42 months of service in vehicles traveling an average of 80,000 to 120,000 miles per year,” Flynn notes. In the future, by focusing on economic obsolescence, he asserts, companies can implement a continuous improvement model — enhancing efciency, lowering costs and providing environmental leadership via reduced greenhouse gas emissions. To that end, Fleet Advantage has developed systems and software that capture information in a structured format and allow feet operators to calculate their total cost of ownership, giving them the tools to identify and capture cost savings opportunities. Likewise, Miami-based Ryder has a total cost of ownership (TCO) model that provides a tool for identifying all fnancial costs, which is quite often the most difcult challenge for feet owners.

“With major emissions changes on the horizon in 2017, and more to come in the future, it’s crucial that systems be built for the long haul, run more nimbly and be capable of responding quickly to changing consumer demands,” says John Deris, Ryder’s SVP of national sales. According to Deris, companies are going to be forced to tweak strategies to address feet aging, complex technology changes, and the training of technicians and drivers. Tis includes considering outsourced providers such as Ryder to help them address these critical issues.

The Logistics of Logistics Atlanta-based Manhattan Associates has a Transportation Management Solution that helps feets address business challenges such as modeling optimal store delivery schedules, determining which stores should be serviced by private feet versus common carrier, and planning and executing store delivery routes. “We see a lot of interest from our customers in how they maximize the utilization of their feet, and how they handle new rules, guidelines and legislation around drive time,” says Scott Fenwick, senior director at Manhattan Associates. “Tere is a shrinking pool of available drivers — and the pool isn’t getting any deeper. Grocery chains are hard-pressed to work through how they can better utilize the drivers they have, and how to do so in the most efcient manner possible.” Fenwick adds that Big Data and analytical tools will play a greater role in feet

With major emissions changes on the horizon in 2017, it’s crucial that systems be built for the long haul.” —John Deris, Ryder

May 2015 | progressivegrocer.com |

167

Technology Supply Chain

TEMP TRACKING NexTrac’s sytems even monitor temperature from door to door.

management. “Grocers want to focus on how they model and design their networks to more efciently use their feet,” he says. “Analytical tools will help focus on how to build these networks and how to get more visibility into these networks to turn that data into actionable insight.” Paola Bennett, manager of business consulting at Sparks, Md.-based Element Fleet Management, calls it “an exciting time” for feet management. “With technology continuing to advance rapidly, and with increased government legislation in areas of safety, alternative fuels and clean air,” says Bennett, “the responsibilities of feet management

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companies and their clients grow.” Bennett sees as remaining challenges determining which economic trends will infuence feet operating costs, feet safety and sustainability. “Another challenge,” she adds, “is fully utilizing tools like telematics [wireless communication networks] and predictive analytics.” Bennett’s vision of feet management’s future includes such high-tech innovations as driverless vehicles, for which telematics will be essential. Software will eventually be available to analyze each vehicle’s location during the day and recommend fuel stations with the best prices, she says. “We may even see a shift in the appearance of gas stations, including having CNG [compressed natural gas] and charging stations for electric vehicles readily available,” she adds. “Software will also be available to direct vehicles to maintenance shops and automatically send a driverless vehicle to be serviced.” Atlanta-based NexTraq ofers a system that helps vendor feets provide efcient and timely delivery with dispatch and routing, as well as monitoring the temperature of the product from door to door. Mark Hufman, NexTraq’s senior director of business development, says operators that use

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technology to give them total feet control and visibility will be competitive and grow, while others that are “late to the game” might have more difculty growing their business and keeping up with increased government regulations and vehicle safety. “Te future will bring more government regulations and new technology to delivery and distribution feets,” declares Hufman. “Tere will be more automotive technology coming to commercial feets, both from the truck manufacturers and aftermarket providers, with items like cameras at every corner, lane departure sensors, stability control and enhanced navigation technology, all helping give feet managers a higher level of manageability and control of their feets.”

Drive Safely With a growing shortage of qualifed drivers, feet managers are placing more emphasis on driver safety. “A collision that results in a delayed or damaged delivery can be costly, especially when higher insurance costs are factored in, not to mention the potential harm it can cause to customer and partner relations,” says Adam Kahn, senior director of product marketing at San Diego-based SmartDrive Systems. SmartDrive Safety, explains Kahn, is a video-based driving-safety program that helps eliminate the risky driving that increases collision frequency and severity, drives up costs, and negatively impacts the overall safety performance of feets. “We see the future of feet management moving toward more actionable data and video technology,” he says. “In grocery distribution, there has been an increased focus on the use of video to provide deeper insight into the risk and ‘absolute truth’ of an event, along with a platform approach

to working collaboratively to reduce risky driving performance.” With driver demand at an all-time high, he notes, feets are looking for new ways to motivate and retain drivers. Video-based safety programs facilitate a team relationship between feet managers and drivers by providing reviewable, coachable events that highlight good driving skills and that can focus the discussion on improvement instead of debate and argument. Dallas-based Paragon Software Systems ofers routing and scheduling software for planning, optimizing and managing transportation schedules on a daily basis; rationalizing fxed routes; managing transportation resources; planning and managing at strategic level in own-feet operations and 3PL (third-party logistics) business development; managing home delivery orders with continuous routing and scheduling optimization; and managing the execution of the transportation plan in real time, using vehicle-tracking technology. “We see signifcant growth in the take-up of grocery home shopping and home delivery operations,” says William Salter, Paragon’s CEO and president, “but there are complex requirements from the IT systems required to support both the multichannel ordering and the multichannel fulfllment of the these operations.” According to Salter, it’s important to track the order from placement to delivery, ensuring that all required components are progressing in a timely manner to meet the customer promise. “Proactive messaging enables automated communication to keep the customer informed throughout this process,” he notes. As these examples show, feet management’s leveraging of technology will only continue apace. PG

Technology

POS Systems

Point of

Order POS systems are critical to enhancing the shopper checkout experience. By John Karolefski

The biggest mistake that grocers can make is making a decision based on where they have been.” —Greg Buzek, IHL Group

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he last chance to reinforce or create a positive customer experience in the grocery store is at checkout, where the speed and efciency of the point-of-sale (POS) system are critical. POS must also enable today’s complex promotions to reward customers for qualifying purchases, as well as accommodate mobile coupons, chip cards and the DataBar on print coupons. But selecting new POS systems and upgrading existing units requires careful consideration. Grocers need a process to determine which hardware to invest in and which attributes are truly important to have. “First, you need to identify your unique requirements,” advises Ken Morris, principal at Boston Retail Partners (BRP), “then determine how POS software will need to operate and what it will need to support. Once you have agreement on these factors, the next major question is retail-hardened or PC- and component-based. From there, you need to examine the peripherals that you currently support and want to support in the future. Tis is especially critical in grocery, where the peripherals can cost as much as the base hardware itself and

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

usually have a longer life cycle.” After all of this is assembled, he adds, an ROI and life cycle model is built before issuing a request for proposal (RFP) to potential vendors. Using the RFP information and industry research, work with a team comprising store operations, store construction, security, IT and infrastructure to test equipment and pick a winner. Brian Yates, who works for one of those potential vendors, Sunnyvale, Calif.-based Fujitsu America, says RFPs have been the de facto standard for POS equipment selection for many years. Te key driver behind purchases needs to be comprehensive value to the retailer, not just a goal of driving cost down. Even if initial cost is the most important factor, Yates continues, retailers need to ensure that they adequately plan for future needs such as connectivity, ofine operation, durability, survivability and future operational needs in the RFP process. “It’s not about whether the store is new or a remodel, it’s about ftting into the infrastructure decisions being made for all stores,” explains Yates, Fujitsu’s director of systems engineering and retail POS/mobile solutions. “Stores get new

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Technology POS Systems

If cashiers have issues with the POS equipment, the customer usually knows about it immediately.” —Brian Yates, Fujitsu America

POS equipment even when the store is not being remodeled. Yes, it’s easier to budget new POS equipment into a remodel, but at the end of the day, retailers execute ‘refresh’ projects to update POS equipment and stay on as few variants of POS equipment as possible. Tis is important for the support organizations ranging from depot maintenance to hardware support dispatch services to software support and image management.” Greg Buzek, president of Franklin, Tenn.-based researcher IHL Group, agrees with Yates that retailers should consider where they see their business in fve to seven years. He ofers these considerations: Consumers shopping on their mobile devices and bagging their own groceries Expansion and acquisition plans Click and collect as part of the plan “Te biggest mistake that grocers can make is making a decision based on where they have been,” Buzek warns. “Consumers are changing, and their POS of the future needs to be fexible enough to go

Preventing Theft at the POS “Sweethearting” in the checkout lane is when cashiers pretend to scan merchandise, but deliberately bypass the scanner. The customer — often a friend, relative or fellow employee working in tandem with the cashier — isn’t charged for the merchandise. Sweethearting accounts for 35 percent of loss across the supermarket industry, according to the Washington, D.C.-based National Retail Federation (NRF). That kind of employee theft, plus scan avoidance at self-checkout, is prompting grocery retailers to install video recognition technology as part of the POS system to detect shoplifting. For example, Big Y Foods has installed a detection system in all of its 61 stores throughout Massachusetts and Connecticut. “Based on what we’ve seen with the initial installations, sweethearting has been more extensive than we expected, whether it’s the cashier not scanning items or leaving them in the basket,” noted Mark Gaudette, director of loss prevention at Springfield, Mass.-based Big Y, when piloting the system in 2008. “While we retailers can’t increase our revenues in this economy, we can now reduce our shrink. Sweethearting has contributed to the rising cost of food, and if we can prevent it, we can hold down food prices.” Doug Haworth, director of loss prevention at Woods Supermarkets, an eight-store family-owned chain based in Sedalia, Mo., says detection technology has significantly improved the performance of his cashiers. Shrink was drastically reduced

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where the business is going. What the data is showing is that grocers, like all retailers, are working towards a single, centralized view of the customer that allows for interaction across devices. Tey want to write the code for any change once, and have that refected across all devices that the customer might be engaged through. Te UI [user interface] might be diferent, but the underlying code, underlying item and customer information is the same.” Grocery retailers obviously use a variety of POS hardware and software. Te choice often depends on the size of the store and the number of weekly customer visits, as well as how forward-looking the retailer is in terms of technological knowledge and the changing demographics of its shopper base. Pittsburgh-based grocery chain Giant Eagle has a standard footprint for POS hardware using Toshiba SurePOS equipment built for the supermarket environment. Toshiba ACE is used across the organization, which allows for developing initiatives and deploying them chain-wide quickly and efciently, according to spokesman Dan Donovan, who lists stability and meeting security requirements as the

after implementation in 2011. “There was far more bottom-of-thebasket (BOB) scan avoidance than we thought,” he adds, referring to soft drinks, beer, watermelon and bags of potatoes stored on the rack beneath the shopping cart. “It was an eye-opener for me.” Here’s how such systems work: Video analytics technology determines what occurs during each POS transaction and immediately distinguishes between legitimate and fraudulent behavior at the checkout. As soon as a scan avoidance incident occurs, the system, which constantly monitors 100 percent of the security video, flags the transaction as suspicious. Working with existing overhead video cameras, it quickly reports the incident, identifying the cashier or customer, and the date and time of the theft. This includes incidents due to cashier mistakes, customers at self-checkout, and items left in the shopping cart. “Using incidents detected from their own stores, supermarkets can train staff on the signals indicating when customers are either having problems using the self-checkout or exhibiting suspicious behavior,” says Malay Kundu, Founder/CEO of Cambridge, Mass.-based ShopLift Checkout Vision Systems, which makes the detection system used by Big Y and Woods Supermarkets. He adds that the Scan-It-All system has detected more than 1 million incidents at thousands of checkouts around the world. —John Karolefski

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

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POS Systems

most important attributes. An additional key factor is using a platform that can interface new initiatives such as loyalty or e-commerce. Finally, Giant Eagle sees mobility for POS playing more of a role in interacting with a customer within or outside stores. Consultant Mark Heckman, who’s familiar with POS functions from his time as VP of marketing at Indianapolis-based Marsh Supermarkets, lists fve rather broad categories of attributes that retailers should consider, given the dramatic changes underway with respect to payment platforms: fexibility, scalability, mobility, security and functionality. Another fve from Colleen Smith, VP of product marketing at Bedford, Mass.-based Progress Software: Ease of use, the level of security provided, the ability to be deployed across multiple devices, the ability to easily integrate with multiple back-ofce systems, and a system built with the next generation of users in mind. How important is the cashier in this menu of POS attributes and capabilities? Fujitsu’s Yates points to the usability of the POS as the attribute most

Technology

meaningful to a retailer’s business. In other words, it has to be reliable and easy to use by cashiers. “If cashiers have issues with the POS equipment, the customer usually knows about it immediately,” he says. “Small things, like missing keys on keyboards, touch displays that ‘telegraph’ or bounce when buttons are pressed, scratched coatings on scanner glass that degrade performance, or printers that are worn out and jam often, all afect cashier performance and customer checkout experience.” Yates goes on to list three POS upgrades that grocery companies looking for better-quality equipment should consider: Imaging technology for handling current QR

codes presented at checkout on printed media and on smartphones. Whether that’s a new hybrid bioptic scanner/scale, a handheld or fxed mount imager, or full or self-service, the need is already here in the marketplace today, and “many retailers do not have the technology in place to handle it.”

Peering into the Future of POS Systems Advances in hardware and software are coming at a rapid pace, so peering into the future of point-of-sale (POS) systems has become a challenging exercise. Some of the factors to consider are changing demographics, mobile and digital wallets. But executives familiar with the technology, and grocery operations in general, have definite opinions on where POS is headed. “POS is evolving away from being a structured row of checkout lanes towards a more ubiquitous, mobilized station that could certainly be tablet-based,” says consultant Mark Heckman, listing such factors as mobile wallets and private label payment systems like Apple Pay. “New POS systems must be able to connect via NFC [near-field communications] and other wireless technologies to attract shoppers who will ultimately decide how they will pay and patronize those retailers that accommodate their preferences.” In the future, POS systems will use mobile devices as a way to interact with back-end systems, predicts Colleen Smith, VP of product marketing for Bedford, Mass.-based Progress Software. That means, she explains, that POS will become an integrated part of the system that runs the store, manages customer contacts and preferences, and tracks product availability. Her company helped Philadelphia-based Common Market, a distributor of local foods to the Mid-Atlantic region, develop its POS system to automate the business management process, allowing for transparency, traceability and a positive customer experience.

For the future of checkout, Brian Yates, of Sunnyvale, Calif.-based Fujitsu America, lists assets and software that speed transactions, improve transaction accuracy and simplify cashier operation. “Starting with scanning, we’ve seen the advent of hybrid imager/laser scanners, which give cashiers the ability to handle QR codes, fraud-resistant complex-format serialized coupons, certain levels of item imaging, and the like. Optical imaging technology is advancing, and fixed, tunnel/portal optical imaging technology will eventually be much more prevalent,” he predicts. Yates sees two fundamental components becoming the norm: touch interfaces, and “heads-up” technology using optical and/or audio apparatus (wearables) for cashiers and service counters, and even on the selling floor. “Wearables are already positioned to become the POS of the future,” he asserts. “With advances in high-speed wireless networks, cameras, VR/AR applications, etc., all you will have to do is ‘see’ the barcode and it will be itemized to the customer’s transaction. Even better yet, ‘see’ the product — that is, its packaging attributes, product image, etc. — and it will be itemized, with no barcode needed.” On a more practical level, Ken Morris, at Boston Retail Partners, sees personalization becoming part of the POS of the future. For example, in a few years, the system may warn consumers if they’ve purchased a product containing ingredients they’ve listed as being allergic to in their shopper profile. “The next generation of shopper is much more liberal with sharing their personal information,” he says. “However, they also have a much greater expectation for personal-based service.” —John Karolefski

May 2015 | progressivegrocer.com |

175

Technology

POS Systems

EMV-enabled devices for

handling the new chip cards coming to the market. Tese devices ofer another security method to protect consumer data. Touch interfaces becom-

ing the de facto standard for POS systems. Whether an all-in-one or distributed version, the touch interface and its UI design are now more critical. “Grocers need to focus on mobile, line-busting, and self-shop functions that can be integrated into the POS,” says BRP’s Morris. “Grocers hate to give up front end space to extra lanes that only get used in peak times. Mobile shopping and line-busting provide the ability to ramp up customer service and total customer throughput without sacrifcing valuable selling space. Tese features are also required to remain competitive with the shopping experience that the consumer is coming to expect everywhere.” A number of promotions and payment activities that are becoming more popular or are pending include new loyalty programs, mobile coupons, DataBar on print coupons, and EMV payments, to name just a few. To serve all customers, the POS system must be able to process these activities efciently. “With many retailers executing a major portion of their loyalty programs through their POS system, any new system should be equipped to easily communicate with the customer database in real or near real time,” says Heckman, the consultant. “Furthermore, mobile payment systems are gaining signifcant trafc, and new POS systems should be adaptive to these emerging

POS Catapults Into New Generation Boone, N.C.-based ECR Software Corp. (ECRS) has rolled out the On Demand release of Catapult 5.3.2, the latest version of its retail automation software, which includes more than 50 new features and enhancements, including automated loyalty and customer rewards with LoyaltyBot, Mobile POS, Product Health Attributes and Local settings with integrated color label printing, and the ECRS Gateway Ecosystem. The February release followed last year’s launch of Catapult 5.3, which made available the new Java-based Catapult point of sale and the HTML5-based Web Office, along with more than 40 new features, a redesigned user interface and overall architecture transition.

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platforms as well as be fexible to communicate to multiple credit and debit processors. Adding NFC to the POS system in order to communicate to mobile systems like Apple Pay is now top of mind.” Heckman notes that frequent shopper cards and key fobs are being discarded by customers in favor of loading their loyalty account information and barcode on mobile shopping apps. Terefore, any new POS system should be able to scan barcodes directly from an app. He also advises those retailers that have installed technology from a third party, such as Coupons.com, Inmar or YouTech, to ensure that digital couponing can fuidly continue to be supported on any new system. Bruce Jones, a software specialist with Duluth, Ga.-based NCR, also sees the relationships from those services driving coupons electronically. Further, he sees a lot of activity right now with enabling customer loyalty solutions to handle electronic coupons and linking them to mobile phone app and e-commerce apps. Tat’s really driving a change in behavior among consumers from paper coupons and clips from free-standing inserts and the Sunday papers to a mindset where these are driven more electronically. Looking at the big picture, Bob Doles, NCR’s product director, sums up: “Typically, when grocers are making investment decisions for their POS equipment, they’re looking to enhance the customer checkout experience. Tey also want to improve the operational efciency of their stores and the productivity of their cashiers. And, of course, they want to maximize their investment over the long term.” PG

Catapult 5.3 consists of three parts: the Catapult Legacy product, Transaction Server and Web Office. Catapult 5.3 Transaction Server and Web Office represent the most dramatic progression of Catapult since its emergence as one of the first Windows Touch-based retail POS software applications, in the early 2000s. “I really like the new Scale Aware feature in 5.3; it’s working out very well,” says Cristina Fish, IT director at Sparkle Markets, a 19-store chain operating in Ohio, Pennsylvania and West Virginia. “We are using it not just for produce, but also [for] things like self-serve doughnuts and postage stamps.” Adds Mark Noble, VP of development at ECRS: “This version has many unique and patent-pending features designed to give our retailers a decisive edge in the marketplace.”

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

Equipment & Design

Ceilings & Floors

Over and

Under

Using retailer and designer input, supermarket ceilings and floors are melding form and function. By Bob Ingram

As more designers discover vinyl ceiling tiles, you’ll see more patterns and designs implemented. The supermarket can now decorate on a fifth wall.” —Scott Fischer, Pro Ceiling Tiles

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imes were when shoppers noticed supermarket foors only on the occasion of a spill, and supermarket ceilings were taken for granted unless they leaked. As food marketing has become ever more sophisticated, savvy retailers and store designers have come to realize that foors and ceilings are part and parcel of the total store ambience, and are constantly working with suppliers to maximize this part of the total shopping experience. Today, too, green considerations are increasingly important to shoppers and must also be taken into consideration with regard to foors and ceilings. “When working with store designers,” says Deb Peer, commercial sales manager at ACP, in Neenah, Wis., “our goal is to understand the role of the ceiling within the space. Determining where form and function fall on their list of priorities is critical to selecting the correct product for the store or space within the store.”

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

According to Peer, supermarkets experience numerous challenges when it comes to ceilings. Food and health guidelines must be adhered to throughout the store, and moisture-causing mold and mildew are always present, given the store environment. With this the case, Peer says that ACP’s most popular supermarket ceiling products are the Genesis tile line and GridMax snap-on ceiling covers. “Te popularity of these products is due to the ROI that they provide,” she notes. “Te reduction in required maintenance and replacement costs gives both Genesis and GridMax a distinct advantage.” Ceiling maintenance is challenging because of its ongoing nature and associated costs, she points out. “Standard mineral-board tiles are inherently afected by moisture, which is ever present in the grocery environment,” Peer says. “Tese types of tile harbor mold and mildew, posing health concerns. Inevitably, this moisture will show as unsightly stains and tile discoloration. For these two reasons, the existing tiles will need to be replaced. Genesis ceiling tiles are waterproof, making them mold- and mildew-resistant, which eliminates the need for replacement.” Grid systems will also need attention, according to Peer, who says that metal grid faces will yellow, rust and deteriorate over time, but ACP’s GridMax ceiling grid covers ofer a low-cost alternative to ceiling grid replacement. “Tese high-grade vinyl covers easily install over the existing metal grid, come in many colors, and require minimal time investment compared to other refurbishment solutions,” she observes. Green-wise, in addition to helping preserve the environment, purchasing a fully recyclable product has many benefts, she says, and because Genesis ceiling panels are 100 percent locally recyclable, no special landfll or recycling fees are required when disposing of old tiles. “We anticipate a continued movement toward environmentally friendly products,” Peer declares. “Health codes and building regulations will continue to play an important role as well. Creating a

favorable experience for store guests will become increasingly important to create diferentiation within the marketplace.”

Achieving Balance When working with store designers, the team at Pro Ceiling Tiles, in Bakersfeld, Calif., starts by pinpointing the style they have in mind. “Tey may want a modern look or a Victorian design, and once we get an idea of the overall design they are trying to achieve, we begin to narrow it down to the material and function of the tile,” Operations Manager Scott Fischer says. “For instance, there are some styles available that can be installed below the sprinkler system and will drop away in case of a fre, or tiles that support the weight of insulation.” According to Fischer, there’s a balance to be achieved in fnding a tile that will create an impact, implements functionality and stays within budget. If a retailer has a tight budget, it may choose a thinner tile, which restricts weight support, but there are many applications where weight isn’t a factor because insulation is lining the ceiling instead of lying on the grid, and this opens the door to numerous styles of low-cost designer options. “Te Stratford Ceiling Tile is our most popular ceiling tile in supermarkets,” he notes. “I believe the reason is because of the tile’s design, along with its low cost.” Pro Ceiling Tiles are made of vinyl, which requires minimum maintenance, Fischer points out, and air conditioning and roof leaks won’t afect them. “Our ceiling tiles are made from recyclable materials that can be recycled by the curbside,” he says. “Another green advantage is that our Stratfords, for example, can ship 40 tiles in a single box, which saves a signifcant amount of room in the truck. “As more designers discover our vinyl ceiling tiles, you’ll see more patterns and designs implemented,” he adds. “Te supermarket can now decorate on a ffth wall.” Look Out Below In the area of supermarket fooring, Andy Mills, general director at Carrollton, Ga.-based Silikal America, says that the company “will work closely with the retailer and/or store designer to advise and inform as to which system is designed for what area.” According to Mills, retail customers want slip resistance, cleanability, durability and pleasing aesthetics from their foors, and “Silikal provides foors that are extremely durable, nonslip, and that can be cleaned easily, thoroughly and repeatedly, yet maintain their integrity over the lifetime of the facility or structure.” As an added bonus, he points out that Silikal ofers an “endless” amount of color options and combinations by means of an online blend-mixing tool that gives customers the ability to design their own blends.

Mills notes that the R61 CQ fooring system for supermarkets is designed to take abuse, ofers extreme slip resistance, and is ideal for food production areas, including freezers and coolers. Meanwhile, the Silikal R62 Flake, more of a decorative product, is well suited to sales and restroom areas. Both systems feature one-hour cure times, are nonporous and require low maintenance. “Due to the fact that Silikal is a completely monolithic and fully seamless surface,” he points out, “there is no place for dirt or contaminants to hide, and it cannot be penetrated. In the rare chance a Silikal foor requires repairs, this can be done in little or no time, without interruption to the operation.” Mills further notes that Silikal is a green product We anticipate composed of VOC-free resins and inert fllers, and a continued that the brand’s coatings are LEED-compliant and movement FDA- and USDA-approved.

toward environmentally More Ad Space friendly SelecTech Inc., in Avon, Mass., typically works directly with store owners, and nearly all of the products. company’s sales to supermarkets have been of its Health codes Freestyle tile. “Tis tile has a factory-applied ureand building thane fnish that requires only damp mopping. Tis regulations eliminates the need for ongoing waxing,” President will continue Tom Ricciardelli explains. “Since our product can to play an be installed directly on top of existing foors, we important role eliminate the downtime and disruption that comes as well. Creating with tearing out an old foor.” Freestyle is made with 70 percent recycled content a favorable experience for and is 100 percent recyclable, Ricciardelli says. SelecTech has a program to buy back used material, and store guests “since our tiles are not glued to the foor, it’s easy to will become pick them up for recycling,” he notes. increasingly Te company ofers tiles that have digitally printed important images as the fnished surface, which gives superto create markets the ability to put branding and advertising in differentiation the foor, as opposed to stickers. “Te imaging is as within the durable as our regular tiles, so they can be left permamarketplace.” nently,” Ricciardelli notes. As food marketing continues to evolve, so do stores themselves, quite literally from top to bottom. PG

—Deb Peer, ACP

May 2015 | progressivegrocer.com |

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Food, Beverage & Nonfood Products

Spicing Up the Doughnut Category

The iconic Little Debbie brand has added a cinnamon sugar variety to its line of bagged mini doughnuts. Joining the current lineup of powdered, chocolate frosted, glazed and coconut crunch flavors, the new offering maintains substantial volume potential, according to Thomas Mossbeck, the brand’s product manager, who notes that “some competitors’ sales of cinnamon doughnuts are up to 52 percent of their powdered doughnut volume,” based on the company’s “Mini Donut Flavor Study.” Little Debbie Cinnamon Sugar Bagged Mini Donuts retail for a suggested $1.99. www.littledebbie.com

The ‘Essential’ Ingredient

The launch of frozen Boca Essentials further expands the brand’s popular line of meatless patties in a range of bold new flavors boasting a source of “complete protein.” Debuting in three varieties inspired by classic American dishes — Breakfast Scramble, with potatoes, scrambled eggs and vegetables; Roasted Vegetables and Red Quinoa, with brown rice; and Chile Relleno, with green chile peppers, black beans and brown rice — the vegetableand grain-based patties retail for a suggested $4.29 for a 10-ounce pack of four. www.bocaburger.com

Hip Dipper

Toufayan’s Gluten-Free Pita Chips are designed to be paired with hummus, soups or salads, or can be eaten right out of the bag. The all-natural, non-GMO, vegan and OU Parve offering is available in a variety of savory flavors such as Sea Salt, Salted Caramel and Chili Lime. Toufayan Gluten-Free Pita Chips have an SRP of $4.49. www.toufayan.com

Healthy Brew

Califia Farms aims to “democratize the next wave of the coffee-taste evolution” with the launch of Concentrated Cold Brew Coffee (CCB), the centerpiece of the brand’s Califia Café home café concept. Designed to deliver a smooth tasting experience, CCB boasts fewer calories and 60 percent less acidity than hot brewed coffee, and is free of dairy, soy, saturated fats, oils, GMOs and gluten. Calfia Farms Concentrated Cold Brew Coffee comes in a 32-ounce asceptic package and carries a suggested retail price of $8.99. www.califiafarms.com

seasonal spotlight Succulent Summer Favorite

A mix of consistent temperatures, mineral-rich red clay soils and high humidity has created optimal conditions for this year’s availability of Georgia peaches. With an expected arrival date of the week of May 18, retailers can expect such varieties as the Flavorich around Memorial Day, while the August Prince arrives late in its namesake month. “We’re so fortunate to have inherited the land that our great-great-grandfathers planted in Georgia over 140 years ago,” says Duke Lane III, president of the Georgia Peach Council, adding that the “geography always produces the most flavorful, juicy peaches.” www.gapeaches.org

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

August 22 - 25, 2015 Colorado Convention Center Denver, CO tse.nacds.org

Keep it Kool

“Our loyal fans told us that they were seeking an easy-to-make product that would offer less sugar … and still be available at a great value,” Kool-Aid Sr. Brand Manager Dennis Wu says of the liquid concentrate beverage mix, made with non-nutritive sweeteners. Boasting 50 percent less sugar than leading sodas, Kool-Aid Easy Mix comes in 18.2-ounce bottles of Tropical Punch, Cherry and Grape varieties — each yielding 6 quarts, or 24 glasses, of the brand’s classic summer beverage. Prepared with a simple pour-andstir process, Kool-Aid Easy Mix is available at retailers nationwide for an SRP of $2.99. www.kool-aid.com

Fruit & Veggie Mix

In an effort to satisfy consumer demand for convenient better-for-you options, Rader Farms’ Fresh Start Fusions deliver a bevy of frozen fruits and vegetables premixed in single 8-ounce packages. Debuting in three varieties — Sunrise Refresh, Morning Vitality and Daily Power — the mixes can be blended with water or fruit juice to make a smoothie or other frozen beverage. Made with no added sweeteners or preservatives, Fresh Start Fusions will be available in grocery stores for an SRP of $2.99; the 48-ounce club store variety will retail for a suggested $9.99. www.raderfarms.com

Yogurt with a Twist

Made with simple ingredients, Evolution Fresh Fruit on the Bottom Greek yogurts combine creamy nonfat Greek yogurt with real fruit, but no added flavors, sweeteners or preservatives. A joint effort between Evolution Fresh and Dannon, the offerings are available in Blueberry, Black Cherry, Pineapple Passion Fruit and Raspberry Blackberry flavors, and boast only 120 calories per serving. Fresh Fruit on the Bottom Greek yogurts will appear in select locations in May, followed by a nationwide rollout in July, at an SRP of $1.69. www.evolutionfresh.com

Shelf Score™ — March 2015 New Product

1 2 3 4 4 4 7 8 8 10

M&M’s Easter Peanut Butter Speck-Tacular Eggs Chocolate Candies Pillsbury Funfetti Spring Cake Mix Jif Creamy Almond Butter Post Strawberry Honeycomb Chobani Kids Grape and Strawberry Nabisco Oreo Mini Mint Kellogg’s Eggo Bacon: Egg & Cheese Breakfast Sandwiches Hamburger Helper Bold: Jalapeño Cheeseburger Macaroni Cytosport Muscle Milk 100 Calorie Chocolate Pearls Olives to Go: Pimiento Stuffed Spanish Green

source: Instantly Shelf Score

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

Purchase INteNt score

76% 64 62 59 59 59 57 49 49 45

• Longer Lasting • Enhanced Flavor & Draw • 1 Disposable = 2 Packs of Cigarettes (Approx.) Contact your Lorillard Representative NOT FOR SALE TO MINORS. ©2015 blu eCigs. WARNING: This product contains nicotine derived from tobacco. Nicotine is an addictive chemical.

Mondelez Names Hargrove EVP for R&D Deerfield, Ill.-based Mondelez International has appointed Robin Hargrove its new EVP for Hargrove research, development and quality (RD&Q). Reporting to Chief Growth Officer Mark Clouse, Hargrove will be responsible for all product and packaging development, research, nutrition, quality, food safety and scientific affairs activities worldwide. “Rob is highly experienced in category-led operating models and in navigating through large global organizations,” Clouse says. “I’m confident he will have an immediate impact as we continue to innovate and drive productivity improvements in support of our growth journey.” Hargrove has been SVP of RD&Q for Mondelez Europe since 2013, after holding various senior roles at Purchase, N.Y.-based PepsiCo since 1994. He succeeds Jean Spence, who is retiring after nearly 35 years of service. “Jean is a renowned scientist and terrific business leader who constantly raised the bar on food safety, quality and innovation,” Clouse notes. www.mondelezinternational.com

Hershey to Source Enough Certified and Sustainable Cocoa for Four Brands in 2016 Te Hershey Co. expects to source enough certifed and sustainable cocoa in 2016 to surpass the amount of cocoa required for the global production of four of its most popular chocolate brands: Hershey’s, Kisses, Kit Kat and Brookside. In addition, the Hershey, Pa.-based confectioner has also pledged to add the global Reese’s brand and others to these in 2017. Earlier this year, Hershey set a new target to source at least 50 percent of its global cocoa supply from certifed and sustainable sources by the end of 2015, a full year ahead of its original schedule. Hershey has committed to source 100 percent certifed and sustainable cocoa by 2020. “We are proud of our work to improve the lives of cocoa families, promote gender equality, and provide health and farm safety programs,” says Terry O’Day, SVP and chief supply chain ofcer. A key part of Hershey’s sustainable cocoa initiatives is its Learn to Grow farm training program in West Africa, through which farmers receive training on agricultural practices, appropriate social practices with a focus on labor, environmental and business practices, and information about other crops. www.thehersheycompany.com

Anaren Introduces Remote Temperature-monitoring Solution Syracuse, N.Y.-based Anaren Inc.’s Wireless Group has launched the Cellular Machines product line, which sends real-time sensor data over a cellular network, where they can be received on mobile devices or reviewed on desktops via a cloud server. Tis frst mass-market ofering is a standard temperature-monitoring kit for refrigerated assets in foodservice and health care, and walk-in/reach-in applications such as warehouses and supermarkets. Te Cellular Machines product family is one of several initiatives Anaren has embarked upon to leverage its wireless experience in the Internet of Tings (IoT) space. Future iterations of the system will monitor other environmental factors such as light, moisture, vibration, pH and power quality. “Millions of dollars in temperature-critical inventory are lost each year due to failed or underperforming refrigeration equipment,” says Mark Bowyer, Anaren’s director of wireless business development. “Te need for an automated, reliable and remote monitoring solution becomes something of a no-brainer.” www.anaren.com/cellularmachines

Dividing Energizer Heralds New Company Names St. Louis-based Energizer Holdings Inc. has revealed the names of each of the two new companies that will be created upon its separation, which is expected to occur July 1. Te Shelton, Conn.-based Personal Care Division will be named Edgewell Personal Care Co. upon becoming an independent company, while the Household Product Division will retain the Energizer Holdings Inc. name and logo. “Edgewell” is a newly coined word created by combining

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two familiar terms: “Edge” expresses the company’s drive to be on the leading edge of innovation and evokes the heritage of its largest global business, shaving, and “well” refects the company’s ultimate goal as a personal care business: to deliver well-being for the people who use its products, and a commitment to well-designed and well-made products. www.energizerholdings.com; www.edgewell.com

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

advertiser index American Greeting Ind. Anchor Packaging Aptaris Avocados From Mexico Blount Fine Foods Califia Farms California Avocado Commission Campbell Soup Company Candle Lite Capacity Trucks Carrs Foods International CH Robinson Charles & Alice CIP International, Inc. Coca Cola Conagra Foods Creekstone Farms Del Monte Demets Candy Co. Dole Domino Foods Ferrero Forte Product Solutions Fresh Produce and Floral Council General Mills Inc Goya Foods Inc Grimmway Farms Haas Avocados Harold Import Co Inc Heineken USA Inc. House-Autry Mills, Inc. Impact Confections Inc Incomm LOEC Inc. Iovate Health Sciences J. Skinner Baking Company John Wm Macy’s Cheesesticks, Inc JTM Foods Kelloggs Company Koelnmesse GMBH/Anuga Le Gruyere Cheese Limoneira Loving Pets Products Mars Chocolate NA Mason Ways Indestructables Inc. McGladrey Meat & Livestock Australia Mehmert Store Services Milk Pep MillerCoors LLC MIWE MOM Brands Musco Family Olive Co. NACDS National Beverage Corp. Nepa Carton & Carrier Company Nestle Nutrition Nestle Purina Pet Care New Pig Old Orchard Juice Co. Organic Valley Perfetti Van Melle USA Inc. Popchips Premier Nutrition Prosperity Organic Foods, Inc. Radeberger Gruppe USA Robbie Flexibles Robot Coupe USA, Inc Sanders & Morley Candy Save-A-Lot Sandridge Foods Scotch Corporation Silver Palate Kitchens Inc Sticky Fingers Bakeries Stonefire Authentic Flatbreads Tabletops Unlimited Thanasi Foods LLC The Happy Egg Company The Hershey Company The Lamb Cooperative The Little Potato Company, Ltd. Tosca Ltd. Toufayan Bakeries Trion Industries Inc. Tropical Foods TW Garner Food Co Tyson Foods Well-Pict, Inc. Wholesum Family Farms Wisdom Natural Brands Zoo Fans

135 32, 33 174 141 Cover Tip, 55, 187 113 52 27 21 168 89 47 17 177 38 65 43, 45 147 101, 109 171 59 53 70 129 4, 5 6 153 144 152 92, 97 41, 58 106 Insert 51 183 131 83 15 128 49 85 86, 87 145 164 102 112 19 118-119 158-159 11 9 82 23 139 181 57 96 31, Insert 35 161 54 133 91 108 61 166 111 99 68 60 75 3 66 169 125 140 81 Back Cover 137 132 78 114 151 37 73 12, 13 103, 143 62 76, 77, Cover Tip 149 142 67 80

www.americangreetings.com www.anchorpac.com www.goaptaris.com www.avocadosfrommexico.com www.blountfinefoods.com www.califiafarms.com www.avocado.org www.campbellsoup.com www.candle-lite.com www.capacitytrucks.com www.stpierrebakery.com www.accelerateyouradvantage.com www.fruitfriends.com www.cipstyle.com www.coke.com www.conagrafoods.com www.creekstonefarms.com www.fruits.com www.demetscandy.com www.dole.com www.dominosugar.com www.ferrero.com www.forteproductsolutions.com www.fpfc.org www.generalmills.com www.goya.com www.grimmway.com www.hassavocadoboard.com/LOTtrade www.haroldimport.com www.heinekenusa.com www.OurHouseGF.com www.impactconfection.com www.incomm.com www.blucigs.com www.sixstarpro.com www.skinnerbaking.com www.cheesesticks.com www.jtmfoods.net www.kellogg.com www.anuga.com www.gruyere.com www.limoneira.com www.lovingpetsproducts.com www.effem.com www.masonways.com www.mcgladrey.com www.australian-lamb.com www.mehmert.com www.milkpep.org www.millercoors.com www.miwe.com /condo www.mombrands.com www.olives.com www.tse.nacds.org www.nationalbeverage.com www.nepacartons.com www.nestle.com www.beyondpetfood.com www.newpig.com www.oldorchard.com www.organicvalley.coop www.perfettivanmelle.com www.popchips.com www.premierprotein.com www.meltorganic.com www.radeberger-gruppe.com www.RobbieFlexibles.com. www.robotcoupeusa.com www.sanderscandy.com www.save-a-lot.com www.sandridge.com www.scotchcorp.com www.silverpalate.com www.stickyfingersbakeries.com www.stonefire.com www.ttucorp.com www.thanasifoods.com www.thehappyeggco.com www.hersheys.com www.thelambcompany.com www.littlepotatoes.com www.toscaltd.com www.toufayan.com www.triononline.com www.tropicalfoods.com www.texaspetefoodservice.com www.tyson.com www.wellpict.com www.wholesumharvest.com www.SweetLeaf.com www.zoofans.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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the last word

Fifty is Nifty

f my PG editorial colleagues and I had a quarter for every supermarket survey that popped into our inboxes, it would be no exaggeration to say that we’d all be semi-wealthy and scarcely wiser. Indeed, as Jim Dudlicek points out in his Editor’s Note on page 10, many of the various industry scorecards that beam across our digital wires are frequently puzzling — if not thoroughly subjective and largely superfuous. All the same, we’re ever mindful that for such an impactful and indispensable industry as food retailing, the often conficting studies are all to be expected, which perhaps partially explains why we take such great pride in presenting our annual Super 50 ranking of the nation’s top food retailers. Strictly speaking, our Super 50 countdown, which begins on page 39, is a trusty, concise compendium of the 50 most infuential players in the retail food world. Under the meticulous supervision of Director of Research Debra Chanil, each company that graces our list was contacted for guidance on the four categories profled in the retailer registry: annual sales from their most recently concluded fscal year, store count, top banner names and employee counts. And though most companies graciously answered our call for direct input, some didn’t, despite our best eforts. But we’re nonetheless confdent that our 2015 roll provides a solid accounting of what I perceive to be a genuinely nifty list of some of the industry’s most intriguing contenders, the majority of which wield an enormous amount of clout and prominence in any number of important ways in both their local communities and on the national stage. While the rankings of the vast majority largely speak for themselves, a few subtle yet signifcant changes stand out on Te Super 50, the top 10 of which also received expanded analysis and frsthand quotes from several senior company executives, beginning on page 40. Foremost to note is the consummated acquisition by Albertsons’ parent company of Safeway (No. 4 last year), causing AB Acquisition to vault past last year’s No. 7 slot to nab the third rung this year. Meanwhile, Target Corp., which is undergoing a corporate reset of its own, dropped to No. 13 from its third-place spot last year, largely as a result of an apples-to-apples reordering of its ranking based on sales generated only by its SuperTarget stores. Accordingly, Publix, Ahold USA, H-E-B Grocery Co., Delhaize America, Meijer, Wakefern and Whole

Foods Market all moved up a rung to round out the top-10 leaderboard, for which a few key developments occurred at press time that bear further brief commentary, beginning with talks of a potential public ofering by AB Acquisition later this year that could raise as much as $500 million. As the chain’s would-be third IPO, the move to take the company public would certainly seem premature in the timeline of a still-recent deal, whose complex integration is by no means complete. But there’s no overlooking the obviously fertile market conditions and companion valuations that are trending at record levels. As Planet Retail Director Kelly Tackett sees it, “Te proposed IPO could be more about the owners trying to take advantage of favorable market conditions and proft-taking than an indication of where the two supermarket operators are in the execution of their joint strategic plan.” And then there’s Te Super 50’s venerable No. 2 powerhouse, Kroger, which made a smooth move in late April to acquire most of DunnhumbyUSA from the Tesco-owned, U.K.-based analytics frm. Te complex and highly signifcant agreement is poised to provide Kroger with greater fexibility while giving the struggling Tesco the ability to reduce costs and raise cash. Te companies will replace their existing DunnhumbyUSA venture with a long-term license and service agreement that will splinter into a new business called 84.51 (in a nod to the new Cincinnati-based entity’s longitudinal location — acronym yet to be determined). “Kroger and dunnhumby revolutionized retailing in the U.S. by focusing on the customer, and we intend to do it again with 84.51,” said Rodney McMullen, Kroger’s chairman and CEO when news of the acquisition broke. Backed by a “decade of experience and a team of incredibly talented associates, the ability to combine what we already know with other partners is exciting and will speed up innovation” in the name of delivering what McMullen termed “a world-class customer experience. We will continue to utilize data science for the beneft of the customer and to deliver a personalized experience, both in store and online.” Let there be no doubt: It will be an experiment well worth watching. PG Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

The Super 50 is a genuinely nifty list of some of the industry’s most intriguing contenders, the majority of which wield an enormous amount of clout and prominence.

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

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BREAKFAST

IN ON-THE-GO

• Carnation Breakfast Essentials® ready-to-drink consumption grew +110%* • #1 brand with top selling items in the On-The-Go Breakfast Nutrition Segment • High Protein 6-count ready-to-drink bottles now available in TWO ﬂavors: Rich Milk Chocolate and Classic French Vanilla 1

FRUIT & YOGURT ON-THE-GO NEW Delicious, Nutritious, and Fun!

REAL FRUIT

REAL YOGURT

REAL NUTRITION

• The use of pouches has increased nearly 50% from 2009–2014† • Brings yogurt shoppers back into the breakfast aisle • Each pouch has as much calcium as a 6 oz cup of yogurt • Now available in TWO ﬂavors: Strawberry Banana and Mixed Berry

#1 Brand with top 5 selling items in the On-the-Go Breakfast Nutrition Segment*

Contact your Nestlé Nutrition Sales Representative for more information or visit CarnationBreakfastEssentials.com *Nielsen Data latest 12 weeks ending 1/31/15. All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. © 2015 Nestlé. CIBR-13352-0315