Progressive Grocer - October 2015 by ensembleiq

Icy Hot

Cross-merchandising frozen foods sets store sales a-sizzle Page 88

Growing Profits

PG’s Retail Produce & Floral Review spotlights surging segments Page 105

By the Book

Make printed matter big news at retail Page 164

Job creator, community emissary and industry visionary Page 28

Meijer President J.K. Symancyk (standing) and Co-chairmen Doug and Hank Meijer

October 2015 • Volume 94 Number 10 $10 • www.progressivegrocer.com

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October 2015

features

Volume 94, Issue 10

cover story

fresh food 96

Perimeter

PrePAred Foods

Cool for School Dairy ranks high among nutritious and delicious lunch options.

The Grocerant Solution PG’s new summit will serve up prepared food strategies.

168

105

New Products

ProGressive Grocer’s 2015 retAiL Produce & FLorAL review

6 Strategies for CPG Growth Tips for moving from defense to ofense.

ProGressive Grocer’s retAiLer oF the yeAr

172 GmA LeAdershiP Forum

Leading by Example CPGs take on transparency, omnichannel marketing and shopper behavior.

grocery

Simply Giving its Best We honor Meijer for its impact as a job creator, community emissary and industry visionary.

frozen & refrigerated 88 cAteGory mANAGemeNt

Ice Flow Cross-merchandising can help deliver better shopper solutions.

76 heALthy sNAcks

Less is More Clean ingredients, free-from formulations lead the way.

Fruits of Labor Pay Off Big Local, organic and pre-cut enjoy explosive growth.

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

123

Produce cAteGory sPotLiGht

Totally Tuber Innovation sparks interest in all sorts of spuds.

134

ProGressive views

5 Tips for Improved Fresh Food Profitability Retailers should use tech intelligently.

— ECRS’ RAPTOR™ Accelerated Checkout System

Customer-Centric, Modern Point of Sale Escape the burden of your legacy POS system and explore modern technology that elevates the overall user experience and speeds checkout times. ECRS provides a modern, flexible omni-channel enterprise system that enables consistent transactions across multiple platforms - accelerated checkout, traditional checkout, self checkout, mobile POS, and eCommerce. Easy-to-use, automated loyalty functionality also elevates customer engagement by providing no-hassle eRewards.

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operations 136

Supply Chain

Proceed With Caution Transportation and other economic factors require more attention.

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

144

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, Jenny McTaggart, Barbara Sax and Jennifer Strailey

progreSSive viewS

How Grocers Can Accommodate Minimum-wage Hikes Ideas to improve labor management processes.

technology 150

Digital Marketing

Engaging Customers Effectively With Social Media It’s more than posting store circulars and coupons.

equipment & design 154

Signage

Sign Language Blend aesthetics and technology for a unifed store ambience.

158

progreSSive viewS

Power Systems Protect Grocers’ Profits Guard against revenue and product loss.

nonfoods 161

health, Beauty & wellneSS

No-pain Gains Analgesic trends favor private label, low prices and natural ingredients.

164

BookS & MagazineS

| Progressive Grocer | October 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

Page Turners Printed content can still be big for retailers.

10 EdiTor’S NoTE: HoMEToWN HEroES 12 PG PuLSE 14 iN-STorE EvENTS CALENdAr: dECEMbEr 2015 16 NiELSEN’S SHELf SToPPErS/SPoTLiGHT: TobACCo ANd TobACCo ALTErNATivES/ELECTroNiC CiGArETTES 18 MiNTEL GLobAL NEW ProduCTS: HouSEHoLd CLEANErS 20 ALL’S WELLNESS: WiLL CoNSuMErS TurN To HEALTHy SNACkS? 22 NEW HorizoNS: 3 TruTHS THAT WiLL CHANGE your CArEEr 170 WHAT’S NExT: EdiTorS’ PiCkS for iNNovATivE ProduCTS 175 THE SuPPLiEr SidE 176 THE LAST Word: SEASoNEd To PErfECTioN

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 director of Events ken romeo 224-632-8181 kromeo@stagnitomail.com director of digital Strategy Matt McGuire 224-632-8180 mmcguire@stagnitomail.com Audience development director Cindy Cardinal

ÂŠ2015 Goya Foods, Inc.

*Nielsen Strategic Planner, Total U.S. (unit and dollar sales), 52 weeks ending 7/4/15

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editor’s note by Jim Dudlicek

Hometown Heroes

t’s indeed an asset for any retailer to know its customers, and in this era of Big Data, the race is on to see who can leverage shopper insights to their best advantage. But how many retailers can say their customers know them? Look no further than Hank and Doug Meijer. A visit to one of their hometown stores in suburban Grand Rapids, Mich., often means catching up with old friends, seeing how much their kids have grown and learning the latest news from the neighborhood — as indeed they did when Progressive Grocer Chief Content Editor Meg Major and I recently joined the brothers and company co-chairmen for a tour of Meijer’s Knapp’s Corner store. Midwestern superstore retailer Meijer is well known for its community involvement throughout the six states in which it operates, but perhaps this reputation is no greater than in Grand Rapids. So it shouldn’t have been that much of a surprise to learn about a member of the Meijer team going above and beyond in the area of customer service, even when it was none other than Hank Meijer himself. Hank happened to be at the gas station outside the Knapp’s Corner store on Beltline Road shortly after he, Doug and the company’s president, J.K. Symancyk, had wrapped up their meeting with Meg and me. According to Te Grand Rapids Press, Hank was approached by 86-year-old Wanda Kleynenberg, who had locked her keys in her car. Without hesitation, Hank ofered to drive Kleynenberg to get help from her daughter, who spread word of his kindness on social media, from where it was picked up by local media and, eventually, the national news wires. “While a Meijer spokesman confrmed it was Hank Meijer who assisted Kleynenberg,” the Press reported, “he said his boss didn’t want to make a big deal about it.” Typical Hank, those who know him best would probably say. But after walking the store with the Meijer brothers that day, I fnd it easy to understand. “We were fortunate to have a dad and a grandfather who ingrained that into us early on,” Doug told us. “You support the communities where you do business, not because it’s the right thing to do from a business standpoint. It’s just the right thing to do.” Te company gives “a fair amount of autonomy to our individual store directors to understand

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

Staying in touch with the community influences how Meijer decides where to put new stores, what products to carry and how to merchandise them most effectively. the needs of a particular community,” Hank says. “Every community’s got its own institutions and traditions that are particularly important. We want to be able to react to what’s important locally. Tat’s always been a part of our approach.” Knowing its customer base so well, and identifying with it, is a big part of the reason that PG selected Meijer as its 2015 Retailer of the Year. Staying in touch with the community infuences how the company decides where to put new stores, what products to carry and how to merchandise them most efectively. As Symancyk told us, “I do think having that tight sense of communication is really what we focus on to make sure that we’re listening to customers and that we’re empowering our teams to take action on what they’re telling us we’re doing well or what we’re not doing well.” Read our feature article about Meijer, starting on page 28. And come back next month, when we’ll take a closer look at the Knapp’s Corner store, which Meijer uses as a testbed for new ideas before rolling them out to the rest of its 200-plus locations.

Mea Culpa In our list of Editors’ Picks winners in the September 2015 issue, we incorrectly reported that all but one of Fusion Jerky’s favors are gluten-free. In fact, all favors of Fusion Jerky are gluten-free. PG Jim Dudlicek Editor-in-Chief jdudlicek@stagnitomail.com Twitter @jimdudlicek

BACK FOR A LIMITED TIME STARTING IN OCTOBER

MAKE IT EASY FOR SHOPPERS TO BRING SOMETHING SPECIAL TO THE PARTY THIS HOLIDAY SEASON THE STEINIE BOTTLE HAS AS MUCH PURCHASE INTENT AS THE ORIGINAL CAN WHICH DROVE A +5PT TREND IMPROVEMENT 1 STEINIE IS POISED TO BRING STRONG GROWTH TO THE BUSINESS. 1

Internal Data W/E 6/6/2015

What’s trending on Progressivegrocer.com …

Beginning this month, we’re taking the wraps off a refreshed PG Pulse, which will serve up an encapsulated summary of eight of the top most popular stories on our website, Progressivegrocer.com. Below is a sampling of the top-trending stories that generated the highest traffic during the Aug. 15-to-Sept. 15, 2015, time frame.

H Haggen Files ffor Chapter 11 Bankruptcy

Lidl Eyes Charlotte Market

— http://bit.ly/1EOHF0M

— http://bit.ly/1QIV3Vk

Kr Kroger Continues to Buck Trends with Q2 Performance — http://bit.ly/1Metfqf wi A&P Puts off Store Bidding, Auction Dates

Walmart U.S. Posts Q2 Rise in n Comps; Earnings Down wn

— http://bit.ly/1Kb6umk

— http://bit.ly/1izACPr CPr

Haggen’s Growing Pains Lead to the Inevitable — http://bit.ly/1izA9gr

David Smith Named President/ CEO of AWG

Ahold Unveils Small-concept bfresh

— http://bit.ly/1E7MOR5

— http://bit.ly/1FPJGon

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

Fresh Arils. Sweet Sales.

4.3oz Single Serve

8oz Multi-serve

4.3oz Single Serve

8oz Multi-serve

P∂M P∂MS might be small but they’re big on proﬁts. Not only are they the #1 seller in the category making up 85% of all fresh arils sales when they’re in season, P∂M P∂MS can actually double your revenue.* Talk about seed money. To sweeten the deal, P∂M’s multimillion-dollar marketing campaign includes national TV, multiple fullcirculation FSIs and in-store POS. Back that up with the largest merchandising team in the industry and it becomes obvious – this little aril has a lot of juice. Order now at CustomerService.POM@Wonderful.com or contact your local sales representative at 877-328-7667.

© 2015 POM Wonderful LLC. All Rights Reserved. POM POMS, POM POMS WONDERFUL and the accompanying logos are trademarks of POM Wonderful LLC or its afﬂiliates. PA13897 *Source: IRI 12 Weeks Ending December 28, 2014, Total Arils Dollar Sales, MULO & Total US Grocery.

December 2015 is... National Eggnog Month National Fruitcake Month National Stress-free Family Holiday Month Universal Human Rights Month National Pear Month

Hold a meeting to review Christmas inventory and all materials related to the big holiday.

National Lager Day. Highlight your store’s assortment.

UNICEF’s birthday (1946). Give a percentage of your sales this week for the world’s children.

awolfe@stagnitomail.com

E-mail your calendar submissions to

Hanukkah, the Jewish festival of lights, begins at sundown and continues through the 14th.

World AIDS Day

Check on all New Year’s Eve decorations and merchandise. National Brownie Day. Have a lighthearted contest to see who can bake the best.

Plan a day to prewrap gift baskets for grab-and-go gift purchases. Choose a selection of shelfstable foods and housewares.

Distribute easy, entertaining recipes using puff pastry in honor of National Pastry Day.

It’s National Cookie Cutter Week. Build a display of the wildest, most whimsical cookie cutters you can find. Crosspromote them with ready-to-use dough, and pass out cookie samples.

Human Rights Day

National Cookie Day. Make sure your stores have all of the essentials.

International Volunteer Day

National Poinsettia Day

National Cocoa Day. Give out free samples.

Make travel arrangements to the January trade shows.

Set up New Year’s Eve decorations and collect all of the Christmas-themed items for a postholiday clearance.

Ten more shopping days after today. Take a moment to make sure both the store and staff are ready for the final Christmas push.

In honor of the Winter Solstice tomorrow, the longest night of the year, showcase hot-drink mixes.

Nail down your game plan for the New Year’s Eve deli rush.

National Cupcake Day. Make sure your store is adequately stocked with baking ingredients and other holiday essentials.

Just in time for those New Year’s resolutions, start planning social media outreach on healthy eating.

Thank all of your employees for a successful year.

Help your customers have a stress-free holiday season: Highlight your store’s catering services online and with in-store signage.

All hands on deck today. Try and keep everyone in a festive mood. Coincidentally, it’s also Festivus, the nondenominational holiday celebrated by the Costanzas on “Seinfeld.”

Bacon Day. Don’t you wish it were every day?

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

National Maple Syrup Day. Create a breakfast-centric display showcasing the versatile sweetener.

Christmas Eve

National Champagne Day and New Year’s Eve. Toast to a successful year and an even better 2016.

Share your staff’s favorite holiday entertaining tips on Facebook.

Christmas Day

National Oatmeal Muffin Day. Offer a complimentary one to early-bird shoppers.

Kwanzaa begins today and ends on Jan. 1.

It’s a new morning in the cereal aisle. Talk about a wake-up call. Post Foods and MOM Brands have combined to create Post Consumer Brands. Together we have never been more committed to the cereal category. In fact, cereal is all we do. As the only major cereal company with a portfolio that now spans the entire cereal category (private label, value, mainstream, natural/organic, hot and oatmeal), we have the capabilities to keep cereal relevant for your shoppers and proﬁtable for you. Combining the strength of Post’s iconic brands with MOM Brands’ challenger spirit makes us one ﬁerce competitor. And one that now has more top 50 best-selling brands* than any other cereal company. Grab on to your apron strings, it’s going to be a heckuva ride.

*Nielsen, XAOC Total US Food, lb share, 52 weeks ending 4/4/15

Front End

Market Intelligence By The Numbers

GroCErY’S ToP 10

Shelf Stoppers

Tobacco and Tobacco Alternatives Largest Sales Increases in Supermarkets by The Nielsen Co. (52 Weeks Ending Aug. 1, 2015)

Cigarette and Cigar Paper Cigarettes Lighters Tobacco-Chewing Cigars Electronic Cigarettes Tobacco-Smoking

Total Category

Sales % Change Dollars (Millions) 2015 2014 $10.1 2.7% -0.5% 3,969.9 2.7 -3.4 84.8 1.3 1.4 281.6 0.9 1.1 104.5 -0.9 -4.2 16.0 -2.9 79.5 33.1 -9.6 -9.9 $4,509.7

% Change 2015 -0.1% 1.4 0.7 -1.9 8.0 12.9 -11.6

38.1%

7.2%

Units 2014 -5.8% -3.3 0.4 -0.6 5.7 90.6 -10.7 44.4%

As e-cigs puff their way into the mainstream, consumers have begun to inhale them in somewhat haphazard fashion, with particularly heavy consumption occurring among established couples in affluent suburban spreads and young transitionals in modest working towns, while other demographics have barely discovered them as yet.

CroSS-MErCh Candidates

NielseN’s Spotlight Consumption Index: Electronic Cigarettes LIFESTYLE Behavior Stage

Cosmopolitan Affluent Comfortable Struggling Centers Suburban Country Urban Spreads Cores

Modest Working Towns

Plain Rural Living

Total

wITh ChILDrEN: startup Families

194

small-scale Families

120

224

Younger Bustling Families

119

162

Older Bustling Families

Young Transitionals

105

116

179

872

268

independent singles

senior singles

established Couples

618

149

172

empty-nest Couples

182

172

senior Couples

134

144

Total

116

161

109

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 | October 2015

• Greeting Cards,

Party Needs and Novelties • Pet Care • Beer • Pet Food • Carbonated Beverages • Toys and Sporting Goods • Pizza, Snacks and Hors D’oeuvresFrozen • Cottage Cheese, Sour Cream and Toppings More oNLINE Dig up actionable e research and additional al intelligence at Progressivegrocer.com

MOTIVATION FOR MEAT SELECTION:

If you see someone taking a selﬁe at the meat counter, take note. Generation X and millennials represent a quarter of beef and pork sales. Referred to as “social conscious foodies,” these consumers spend more proportionally on fresh red meat than any other consumer segment, explains Brian Bell, Vice President, Cargill Beef North American Sales and Marketing. 1

Cargill initiated a recent proprietary study of more than 8,000 fresh meat consumers to better understand attitudes, needs and behaviors. From this study, Bell reports that three key ﬁndings reveal how the grocery industry can cater to this segment’s preferences.

22%

18% ROUTINE

NO REASON

21% INDULGE

39% ENTERTAIN

“Social conscious foodies will pay for quality; however, they are redeﬁning what quality means, emphasizing the story of their food—where, how and by whom it is produced,” says Bell. More transparency in how animals are raised and by whom is critical to their purchase decisions. “These consumers drive the social issue conversation related to food on websites, social media and blogs,” says Bell. FEEL IT’S IMPORTANT TO BUY MEAT RAISED IN A SUSTAINABLE WAY

KEY MEAT CUTS FOR SOCIAL CONSCIOUS FOODIES:

According to the study, these consumers see themselves as foodies and want others to see them that way. “Retailers should ofer them exclusive information about preparing food, complementing cuts and latest trends,” Bell says. “After they bolster their foodie reputation, they’ll come back for more.”

FLAT IRON STEAK

DETERMINE WHAT TO PREPARE BASED ON COMMUNICATION FROM GROCERS, IN-HOME OR POINT-OF-SALE

159 INDEX*

BRISKET 138 INDEX*

FLANK STEAK 129 INDEX*

GROUND SIRLOIN & ROUND 129 INDEX*

PORTERHOUSE STEAK

Bell points out that the study shows grocers can support the busy foodie lifestyle with point-of-sale recipes or serving ideas. These consumers enjoy eating red meat; however, they are less familiar with selecting and preparing it, which means they are likely to default to brands.

Social conscious foodies are the only age segment in the study that indicated they were planning to eat more red meat. A separate Mintel study, released in February 2015, reinforced this ﬁnding. “Adapting to social conscious foodies will impact today’s bottom line and build the foundation for a proﬁtable future,” says Bell.

127 INDEX* *index numbers based on total population

For more information about consumer segments, contact a local Cargill sales representative or visit www.CargillFreshMeat.com.

2015 Cargill Proprietary Red Meat Consumer Study

STATE THAT THE STAFF AT THE GROCERY STORE INFLUENCE WHAT THEY ARE GOING TO COOK

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

Household Cleaners Market Overview The United States may be the biggest global market for household cleaners, with high spend per capita, but compound annual growth rates (CAGRs) over the next five years are low, standing at 1.2 percent. Predicted CAGRs are even lower in the smaller Canadian market (0.8 percent). In the United States, all-purpose cleaners and disposable wipes continue to be the strongest-performing segments. However, modest gains in these segments have been partially offset by declines in more labor-intensive segments such as tub/tile cleaners and furniture polish. In addition, an economizing mindset has helped to keep overall sales growth in check. key issues There’s room to maintain the growth momentum seen in wipes: A strong focus on germ removal and maintaining hygiene in the home is one factor arguably helping drive sales growth in this segment. Private label growth opportunities remain strong, as compared with decreases for leading branded players.

What Does it Mean? To further boost sales of cleaning wipes, brands could better target particular areas where consumers are more likely to take a “quick-cleaning,” rather than a “thorough-cleaning” approach, namely when cleaning toilet flush handles, door knobs, mobile phones and computers/keyboards. Additionally, rather than viewing wipes’ light-duty image as a problem to be addressed,

marketers might embrace lightness as an asset to be leveraged. Packaging/dispensers that make wipes more portable or more appealing to place in view around the home or office might help to encourage more frequent use for light-duty cleaning and disinfection. Consumer interest in saving money and the belief that store brands

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

offer effective cleaning set the stage for further private label gains. Moreover, private label innovations that look to make natural and eco offerings more affordable, such as Walmart’s Great Value Natural product line, can help drive sales growth, as can new product development that also looks beyond affordability and toward added benefits and superior cleaning performance.

Over $ mm in advertising That’s a huge marketing budget for such a small fruit. Halos is the #1-selling mandarin brand two years in a row A reliable, consistent supply of mandarins available all season long Grown exclusively in California—never imported W∑nderful Citrus is America’s largest integrated grower, shipper and packer of fresh citrus Supported by a national marketing campaign: 5 FSIs, network TV, print campaign, billboards, in-store point-of-sale, public relations and digital marketing In-store support from 200 merchandisers nationwide

Call your Halos sales representative at CA: 661.720.2500 TX: 956.205.7400 ®

Come see us at PMA, Booth 3634.

halosfun.com

Retail dietitians can point shoppers toward snack choices that provide specific nutritional and lifestyle attributes.

All’s Wellness By Karen Buch

Will Consumers Turn to Healthy Snacks? If they’re tasty enough, yes.

raditional meals of breakfast, lunch and dinner are increasingly being supplemented by snacks. In fact, consumer research suggests that Americans consume an average 2.3 snacks per day. Eating now takes place anywhere and anytime, but the majority of consumers report that snacking occurs most often at home. Further, nearly half of all adult eating occasions happen alone, which may contribute to mindless eating and the selection of indulgent foods in proportions that might not be chosen when eating with others. Nutrition experts agree that snacking healthfully can help people avoid binge-eating cycles that may accompany the deprivation of meal skipping. What’s more, a growing number of consumers report a desire to manage their wellness by eating nutritious foods. Retail dietitians can point shoppers toward snack choices that provide specifc nutritional and lifestyle attributes.

Portable Fruits and Veggies Items like apples, bananas and nectarines are packaged by nature as ready to eat, but growers are making produce even more convenient via singleserve containers of grape tomatoes, apple slices, baby carrots and the like, often with dips or seasonings. Additionally, retailers are providing store-made oferings such as melon or pineapple cups and carrot and celery stick packs. Shelf-stable fruit and veggie purée pouches remain popular among kids and some adults, and now kale, broccoli and sweet potatoes come in the form of favored crunchy “chips.” Whole Grains Whole grains are an important source of fber and other nutrients, and nutrition experts recommend

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

making half or more of your grains whole grains. Such snacks are on the rise: Te Whole Grain Stamp appears on more than 10,000 products. Retailers should consider hosting in-store events featuring whole grain snacks as part of a national whole grain sampling day on March 30, 2016. Visit WholeGrainsCouncil.org for details.

Packed With Protein Consumer interest in protein remains high. According to research from Te NPD Group, in Port Washington, N.Y., meat snack consumption is up 18 percent over the past fve years, with protein content cited as the primary reason for the spike. Jerky of various types leads in popularity. In addition, dairy products, nuts and hard-cooked eggs are popular protein-laden snacks. Controlling Portions Snacks ofering portion control help consumers enjoy their favorite indulgences while minimizing the risk of overeating. Choices include 100-calorie packs of chips, crackers, pretzels or cookies, as well as mini chocolate bars, fruitand-nut granola bars, bags of popcorn or nuts, and mini desserts. While customers often look for snacks that meet particular lifestyle traits such as organic, vegan, gluten-free, afordable or convenient, don’t forget the No. 1 sought-after attribute: great taste. Snacks that deliver delicious, satisfying favors and textures are the ones that will keep customers coming back to buy more. PG Karen Buch, RDN, LDN, is a registered dietitian/ nutritionist who specializes in retail dietetics and food, and nutrition communications. One of the first supermarket dietitians, she is now founder and principal consultant at Pennsylvania-based Nutrition Connections LLC, providing consulting services nationwide. You can connect with her on Twitter @karenbuch and at NutritionConnectionsLLC.com.

WeÕll Top Their Salads. YouÕll Top Your Profits. NEW SALAD TOPPINGS FROM SUN-MAID. Give your customers the healthy, flavor-packed treat they’ve been waiting for — all new Salad Toppers from Sun-Maid. These sweet and savory combinations make a perfect addition to salads, baked potatoes, soups or simply straight out of the box. Packed with wholesome ingredients and loaded with flavor, customers will crave their healthy goodness, and before you know it, you’ll crave their healthy profits.

SERVING AMERICAN FAMILIES & THE WORLD SINCE 1912 For more information contact sales@sunmaid.com 13525 South Bethel Avenue • Kingsburg, CA 93631 1-800-786-6243 or 1-800-SUNMAID ©2015 SUN-MAID GROWERS OF CALIFORNIA

Debra Sandler’s inspiring words have stayed with me.

Nonfoods

Category

NEW

Horizons

By Joan Toth

3 Truths That Will

Change Your Career Debra Sandler’s first rule for women: Stop behaving as expected.

he grocery industry is often seen as a place where women have little or no upward mobility, and it’s hard to refute the obvious: Te industry has many female managers, but few women in top leadership roles. Troughout my career, however, I’ve worked with exceptional women in the retail “With belief in and consumer goods and seryourself, hard vices industries who’ve moved work, focus and up. Tey had the resilience — dedication, your and courage — to forge career opportunities paths that worked for them are limitless. and their companies. Teir You have to impact on what’s sold and how be realistic, of has been remarkable; their infuence on gender diversity course, but if you at the companies they work for don’t believe your has often been transformative. opportunities One such woman is Debra are limitless, you Sandler, past president of won’t live it.” Hackettstown, N.J.-based —Debra Sandler, Mars Chocolate North Gannett Co. America. At the NEW Executive Leaders Forum last July, Debra, now a board member at Gannett Co., shared her inspiring personal story of disrupting the status quo as she successfully made her way to the top levels of the industry. “With belief in yourself, hard work, focus and dedication, your opportunities are limitless,” she said. “You have to be realistic, of course, but if you don’t believe your opportunities are limitless, you won’t live it.” Her words have stayed with me. How many women in this industry truly believe their career opportunities are limitless?

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

Defying Expectations Debra’s words of advice are underscored by her life story. As a Latina and African-American woman born in Venezuela and raised in the small island nation of Trinidad and Tobago, she has defed society’s — and many colleagues’ — expectations. By the time she left McLean, Va.-based Mars earlier this year, she had risen to the position of chief health and well-being ofcer, a new global position ideally suited to her health care and consumer packaged goods background. Debra acknowledges that she’s a rarity, and is passionate about changing that. “People don’t expect someone [like me] to be president of many things,” she told nearly 350 invited industry leaders at the NEW Forum. “And while I’ve taken great pleasure in being ‘the frst,’ after a while that gets old. Why, after 30 years, am I still the ‘frst’ or ‘only’ in the room?” Debra’s advice for all women looking to step into the room with her is straightforward: “Don’t be trapped into behaving a certain way. Stop behaving as expected. Do some introspection. Know what is right for you and when it is right for you.” She speaks from experience. As a young professional at Purchase, N.Y.-based PepsiCo, she enjoyed a wonderful career. But after 13 years with the company, she was expecting a child and burned out following a hard-charging decade in “up-and-coming” roles, the last of which required travel 80 percent of the time. As VP of marketing, she took an extended maternity break and decided not to return to work. “I didn’t know if I had the courage to do it,” she recalled. “People said I would kill my career and I would never get the momentum back. But leaving is what I needed to do at the time, for me. Now it’s called ‘of-ramping,’ but I didn’t know that fancy term at the time. Tere were a lot of people who made me feel I was crazy.” Two years later, when she wanted to return to work, recruiters “treated me like I had forgotten everything and had been bathing in applesauce Continued on page 26

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while I was on leave. Tey asked me if I could read a P&L. I said, ‘Did you read my resumé?’” Tanks to her carefully cultivated professional network, she was able to accept a leading role with New Brunswick, N.J.-based Johnson & Johnson, where she quickly rose to the position of worldwide president of McNeil Nutritionals,

overseeing the launch of Splenda. From there, she joined Mars, where she was chief consumer ofcer before leading the company’s North American chocolate business. At the NEW Forum, Debra shared three principles she’s used to drive her barrier-busting career: Believe in yourself. If you lack confdence, your

possibilities are limited. “You will get knocked down and you won’t get every promotion,” she said. “But how do you not stay down? How do you build resilience in yourself and in our young people? When your business gets stuck, you fnd a way to make the numbers. We must use that type of attitude on ourselves. When I was passed over for a promotion, when my comments were ignored, belief in myself got me through.” Have a support network, both professional and personal. “It took me forever to hire someone to clean my house every other week,” Debra admitted. “It made me feel like I was a bad mother or wife. I had it in my head that I was supposed to be able to run to work, get every promotion, run home, have the clean house and cook the food.” Invest in career planning and take risks. “Nothing will happen if you

don’t take a leap of faith,” she noted. “So many women have no fve-year plan. But if you don’t have one, they will create one for you. It may be absolutely not what you want. If you haven’t articulated a plan, then you have no one else to blame.” Tese are principles NEW supports as we work toward our vision of “a workplace with no limits” for all. To fnd out how to get involved, or for more information, visit newonline.org/itstime. PG Joan Toth is president and CEO of the Network of Executive Women, Retail and Consumer Goods, a learning and leadership community representing 10,000 members, 750 companies, 100 corporate partners and 20 regional groups in the United States and Canada.

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

2015

Retailer of the Year

Simply GivinG By making life better for its customers customers, Meijer excels as a job creator, community emissary and industry visionary.

e make a living by what we get, but we make a life by what we give.” Tis quote by Winston Churchill could just as easily come from Hank and Doug Meijer, co-chairmen of the western Michigan-based retailing powerhouse that bears their family’s name. A 222-unit large-format chain

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

that ranked 19th on Forbes’ most recent list of America’s largest private companies, Meijer’s family-crafted, one-stop-shopping, large-store experiment, launched by its founding fathers in 1962, has emerged as a venerable Midwest mainstay and innovative supercenter dynasty. Sitting at eighth on Progressive Grocer’s Super 50 ranking of the nation’s top food

By Jim Dudlicek and Meg Major

Its

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retailers, with 2014 revenues topping $15 billion, Meijer has now earned further bragging rights as PGâ&#x20AC;&#x2122;s 2015 Retailer of the Year. Te company last received this honor in 2006, and the great strides it has made in the intervening years make it eminently worthy of recognition once again. Following a course of steady growth and commanding strong afnity with its core base of

Michigan shoppers, Meijer has expanded into six Midwestern states and employs more than 65,000 associates. In tandem with its measured growth, the retailer has invested hundreds of millions of dollars over the past few years in new and remodeled stores, expanded distribution facilities and new technology to help serve its customers better. Continued on page 32

October 2015 | progressivegrocer.com |

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2015

Retailer of the Yearr Continued from page 29

Continuously Conscientious A ferce, nimble competitor, Meijer exhibits many hallmarks of a company setting the pace for its peers. Guided by a keen focus on the fve Ps — product, presentation, promotion, place and, particularly, price — Meijer continues to gain market share and fne-tune the “retail format of choice.” Yet as it grows, its guiding ethos — to remain true to the simple philosophy that if you take care of customers, team members and community, they’ll take care of you — mirrors its stance as a conscientious company that has embraced the importance of supporting the neighborhoods where its customers and team members work and live. “We were fortunate to have a dad and a grandfather who ingrained into us early on the importance of giving back to support the communities where you do business,” Doug Meijer says, “and it just keeps on developing and morphing into something

bi bigger and better as we grow — not because it’s the right thing to do from a business standpoint. It’s just simply the right thing to do.” Doug’s equally unpretentious brother, Hank, is also quick to credit their parents, Fred and Lena, for grounding them in the awareness that one’s ultimate impact is defned not by what can be sold, but what can be done, to better the lives of its family of associates and the communities they serve. “We always strive to bring innovation and appreciation to the Meijer shopping experience,” Doug explains. Te entrepreneurial spirit that sparked its frst store, he continues, “has now extended to the more than 65,000 team members, who continue a rich tradition of bringing easy, affordable solutions to our neighbors.” A defnitive leader in a retail landscape under siege, Meijer’s culture of thrift, stemming from an abiding penchant to save customers money by seizing the latest innovative ways to do so, is integrally woven in the fabric of the self-distributing retailer, which has steadfastly strived for continuous improvement to keep its big-box format efcient, interesting and relevant.

“Encouraging leadership and talent from other backgrounds has really positioned us to continue growing as a private company, and is an important part of who we are today.” —Hank Meijer

At the same time, the privately held retailer’s dual family leaders, in tandem with President J.K. Symancyk, stalwartly seek to instill their purposedriven mindset, homespun Midwestern sensibilities and an empowered sense of stewardship into the extended family of Meijer associates, to deliver on the company’s enduring customer-centric mission. “One of the things that’s been core to our growth is that from a very early stage, we recognized that even though we are a family company, having the name ‘Meijer’ bestows no special talents on anyone,” declares Hank. “We’ve had a strong tradition of professional leadership with nonfamily leaders, which we enjoy today with J.K. and his team. Encouraging

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

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22015 leadership and talent from other backgrounds has really positioned us to continue growing as a private company, and is an important part of who we are.”

An Ear for Local Listening to shoppers is a key component in Meijer’s successful standing as a major player in an ever more crowded feld of retail formats. From its landmark stores in Michigan, through expansions into Ohio, Indiana, Kentucky and Illinois, to its latest stores in metropolitan Milwaukee after entering Wisconsin earlier this year, Meijer has demonstrated a commitment to its core customers and an understanding of the cross-channel world in which they live — and an ongoing commitment to providing quality goods to consumers hungry for value. “I think every retailer talks a good game about localization, but it’s always harder than it seems,” Hank admits. “It’s an ongoing process of listening to our customers for what brands matter most, what products they’re looking for in a specifc market. It’s an ongoing challenge.” Upon being formally recognized by the Michigan Historical Society as the nation’s frst supercenter this summer (see sidebar on page 38), Hank paid tribute to the opportunistic vision of his grandfather, Hendrik, and his father, Fred, “to bring families more retail choices [by] breaking down traditional barriers” between selling groceries, clothes and hardware. Te company’s founding father-son team, he added, “helped revolutionize retail and left

Retailer of the Year

us an incredible legacy to build upon.” And build they have. Meijer’s present store feet ranges in size from 110,000 to 250,000 square feet, each carrying as many as 350,000 SKUs and operating 24/7, 364. In addition to national brands, Meijer has judiciously developed some 30 private label brands throughout fashion, hard lines, spirits and grocery, with 3,900 exclusively using the Meijer moniker.

Thyme to Learn Meijer’s continued strategic expansion, most recently into Wisconsin, and job creation in its fnancially struggling home state, particularly in downtown Detroit, have given the regional retailer ample platforms on which to grow and learn. So, too, has its ongoing investment in the natural and organic segment, underscored by its stake in the rapidly expanding Fresh Tyme upstart, which is quickly catching fre as a one-to-watch specialty-format grocer. While there’s no direct connection between Meijer and Fresh Tyme, the established retailer’s major stake in the healthy-lifestyle chain is a natural extension of its studied journey toward continued

“The customers determine what we sell or what we don’t sell — whatever they ask for or what we see they need.” —Doug Meijer

October 2015 | progressivegrocer.com |

2015

Retailer of the Yearr retail enlightenment, notes Hank. “We are completely separate businesses, with completely separate operations. We see our role as part of an organic experiment to learn, but not to smother, to gain knowledge, but not to stife creativity.” In addition to cross-pollinating its retail brain trust with new platforms on which to strategize and stretch, Meijer seeks the most impactful ways to build meaningful connections with stakeholders in the communities where its stores are located. With an average 450 team members per store, the retailer gets behind community activities while assisting nonproft organizations through corporate and store donations. In addition to creating strong relationships, the chain ofers countless volunteer hours, and abundant fnancial support, to a host of organizations, including Habitat for Humanity, Junior Achievement, the American Red Cross, Children’s Miracle Network, March of Dimes and

Symancyk Departs Meijer for Academy Sports + Outdoors As we went to press with this issue, J.K. Symancyk announced his departure as president of Meijer, a role he’s held since January 2013, to join Katy, Texas-based Academy Sports + Outdoors as its new president and CEO, effective Nov. 2. Symancyk, 43, will succeed Rodney Faldyn at Academy Sports + Outdoors, which carries a broad assortment of hunting, fishing and camping equipment and gear, along with sports and leisure products, footwear, apparel, patio sets, grills and more. The $4 billion specialty retailer operates more than 200 stores throughout Alabama, Arkansas, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee and its native Texas. Symancyk joined Meijer in 2006 as VP of perishables, and was named EVP of merchandising and marketing in 2007 prior to his subsequent role as COO in 2012. He previously served in various leadership roles at Wal-Mart Stores’ Sam’s Club division.

“It really is a customer-frst strategy that leads us into whatever our next investment will be.” —J.K. Symancyk

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

, We Salute You! Congratulations on your achievement of 2015 Retailer of the Year. Your dedication and prioritization to the communities you serve, your focus on nutrition and the well-being of your staff, are just a few reasons you are deserving of this notable honor. Your accomplishments speak for themselves.

Congratulations to the entire Meijer family!

2015

Retailer of the Yearr

drivinG suPPort Hank Meijer confers with sherrie tussler, of the Hunger task Force in Milwaukee, during a donation of trucks, trailers and food to help support local food banks.

the American Cancer Society, to name just a few. Meijer’s support for a wide variety of nonprofts is also evidenced by its donating more than 6 percent of net proft to charity each year and sponsoring hundreds of community events that its customers hold dear. Te hallmark of its grass-roots outreach eforts is its Simply Give program, which since November 2008, has helped neighborhood food pantries keep their shelves stocked. Te company’s signature hunger relief program has generated more than $16 million, thanks to the continued generosity and support of Meijer customers, team members and food pantry partners committed to helping feed hungry families. Te 2015 spring campaign was the most successful in the program’s history: Customer donations, combined with a contribution from Meijer, pushed the total to more than $1.7 million. No mention of Meijer’s role in bettering the communities it serves would be complete without a mention of Te Meijer Foundation, which was

1st Thrifty Acres Makes History Fifty-three years after Hendrik Meijer and his son, Fred, leveraged their successful grocery business on a risky innovative idea, the Michigan Historical Commission recognized Meijer Inc. for making history on the site of its original “Thrifty Acres” store, with an official historical marker. Opened in June 1962, the original 100,000-square-foot store at 28th Street and Kalamazoo Avenue in Grand Rapids, Mich., combined food retailing with general merchandise to provide freshness and convenience to customers. The store featured a 7-acre parking lot, along with 18 checkout lanes — a service unheard of at the time — that allowed customers to pay for everything in a single transaction, regardless of the variety or quantity purchased. It was the birth of the supercenter and the springboard for a concept that would grow into a retail phenomenon and establish the Grand Rapids-based retailer as a pioneer of one-stop shopping.

established in 1993 as the Michigan Botanic Garden Foundation. Formed with the single purpose of providing an endowment fund to support the Frederik Meijer Gardens & Sculpture Park, including the Lena Meijer Children’s Garden, the foundation now also supports other local recreational causes and charitable eforts. Its legacy is felt most profoundly, Continued on page 42

“We are proud to be recognized for the innovative foresight our father and grandfather demonstrated when they opened Thrifty Acres,” noted Co-chairman Hank Meijer. “They saw an opportunity to bring families more retail choices and ultimately succeeded in breaking down traditional barriers between selling groceries and selling clothes or hardware. My father and grandfather helped revolutionize retail and left us an incredible legacy to build upon.” “Meijer is more than one of Michigan’s leading retailers today; it is also a pioneer that still shapes how America shops,” said Historical Society of Michigan Executive Director Larry J. Wagenaar, who also serves on the Michigan Historical Commission. “By piloting a new retail approach that combined groceries with general merchandise in its Thrifty Acres store, Meijer launched an ingenious — and very successful — model, which had a major impact on retailing throughout the United States. Meijer made history with its leading-edge methods, and I am personally proud of how the company continues to celebrate its heritage and supports and promotes Michigan’s history.”

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

Meijer has been named Progressive Grocer‘s 2015 Retailer of the Year, sharing our passion for providing Delightful Variety.

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2015

Retailer of the Yearr Continued from page 38

however, in Meijer’s hometown of Grand Rapids, Mich., where the 132-acre botanic garden and outdoor sculpture park serve as a frst-rate venue for local residents and visitors to further their appreciation of the natural environment and the lively arts.

Intelligent Expansion “Dynamic and measured” is how Hank describes his company’s growth strategy, “carefully thinking out, market by market, how to continue our expansion.” Symancyk elaborates: “It really is a customer-frst strategy that leads us into whatever our next investment will be. Tere’s no master plan. We really are looking at how to serve each community that we have the opportunity to be in — one community at a time, one customer at a time.” If the axiom “slow and steady wins the race” is true, then Meijer appears well poised for victory, especially in its approach to fnally entering the Wisconsin market. Preceded by a distribution center just north of the Illinois state line, the retailer opened four stores in suburban Milwaukee this past summer, and has more on the way.

Until this year, geography and its impact on U supply chain operations kept Meijer away from America’s Dairyland. “Te closest major metropolitan area to where we are, here in Grand Rapids, is Milwaukee; we just have this little lake in between,” Hank says. “We rely on supply chain for the freshest product, so we had to work our way around the lake to get there. Wisconsin has a lot of similarities to Michigan: a lot of medium-sized cities, and a combination of manufacturing and agriculture that makes us feel right at home. Lake Michigan is the only reason we weren’t there a generation ago.” Despite being confronted with an unusual problem during the Wisconsin grand openings — it was accused of violating Wisconsin’s Unfair Sales Act, a Depression-era statute meant to prevent retailers from selling goods below cost and undercutting small businesses (which as it turns out, worked in Meijer’s price-impact favor) — Meijer’s four newest stores have been very well received. “We’ve had the opportunity to build a relationship in that community long before we opened our stores, which I think has probably helped us to think about each store diferently,” Symancyk says. “I’m

Janet Kelley, SVP, General Counsel and Secretary PG: In thinking about Meijer’s remarkable heritage, how have the company’s associates played a part in it? Meijer is a family-owned company that was built on fundamental philosophies, such as expressing respect for team members, providing a great customer experience and being a good neighbor. These are traditional values that continue to guide — and define us — 81 years later. Our founders once said “… take care of your customers, team members and community … and all of those will take care of you, just like a family.” While Meijer is a family company, we have a broader family of 65,000 team members throughout six states. We really do feel that it is our team members who make us a great company, so it is important to us to take care of each and every one. We foster an environment where people can cultivate ideas, encourage and learn from one another, and be rewarded for a job well done. It’s the reason why Meijer is a long-term career choice for so many on our team.

PG: What is the best thing about working at Meijer? Meijer is a company that is genuinely committed to our customers, team members and the communities

we serve. We provide excellent value to our customers, investing profits in better products and services while maintaining low prices. In addition, we support hundreds of events our customers hold dear, and annually donate more than 6 percent of our net profit to charitable organizations in the communities we serve — one of the highest percentages in the retail industry. It is great to work for a company that you believe in and where you can see the tangible results of the company values.

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

This calls for a celebration! Congratulations to Meijer for being named Progressive Grocer’s 2015 Retailer of the Year. From your friends at the Kellogg Company.

MEIJER

2015

Retailer of the Yearr

Aisles of opportunity online shopping and store pickup service, retooled based on customer comments and relaunched as Meijer Curbside, features orders hand-selected by a dedicated team.

proud of what our team has done, and very grateful that the community has been so welcoming to us.” Te expansion also ofered Meijer the opportunity to work more closely with Wisconsin-based suppliers that had already been providing product to the retailer for many years. “We have a lot of longstanding relationships in terms of being a customer to so many of these great companies,” Symancyk afrms. “Te opportunity to actually be able to reciprocate is something that I don’t know that we fully appreciated before we came in. We didn’t necessarily think about what it might mean to some of our partners for them to be able to actually shop our stores.” Frank Guglielmi, Meijer’s senior director of communications, cites great feedback on social media from transplanted Michiganders now living in Wisconsin, as well as Wisconsinites who shop at Meijer while vacationing in Michigan. Meijer plans further expansion in Wisconsin, “both building our presence in Milwaukee and also

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looking at sites in Green Bay and other, smaller cities in the north, down to the Illinois border,” Hank says. “We’re very active in expanding in Wisconsin.” Completely content with its semi-compact six-state footprint, he attests: “We don’t have any grandiose national expansion plans. We will continue to build out between the Appalachians and the Rockies and continue to expand in the heart of the country.”

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2015

Retailer of the Yearr

SPiritEd CElEbration during the grand opening of Meijer’s Machesney Park, ill., store in May 2015, Hank Meijer and Store director Josh Weaver present a $25,000 check to members of Harlem High School’s dance and football teams.

Uniquely Similar Beyond catering to diferent customers in new states, Meijer has developed new stores targeting specifc demographics in its home state, such as two urbanformat stores in economically challenged Detroit. Te Meijer team, however, insists it’s not the format, but rather the assortment, that’s most unique. “It’s the ofering that it’s important to adjust for an individual customer’s and community’s needs and expectations. Tose stores in Detroit are 190,000 square feet, just like the stores we’re opening in suburban Chicago,” Hank says. Symancyk adds: “We really only have one format. What we do is try to make sure that the assortment in any particular store is refecting what’s most important for each community that we serve. Tere’s where the variations would be, but the format doesn’t really change.” Getting that right means keeping up with the pulse of local shoppers to ensure demands are being met, whether in urban Detroit, suburban Chicago or rural Kentucky. “Te determining factor is your people,” Symancyk asserts. “We have the beneft of being a regional company. Tat means we have a proximity and familiarity with our teams that some companies don’t have. We know our store directors. Our emergent teams had the opportunity to visit all of our stores over the course of the year. Tere’s some understanding around what might be most important in Fort Wayne, Ind., that’s somehow diferent than Manistee or Alpena, Mich., or newer stores in Wisconsin. Having that tight sense of communication,” he continues, “is really what we focus on — making sure we’re listening to customers and that we’re empower-

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

ing our teams to take action on what they’re hearing that we’re doing well or what we’re not doing well.” Adds Doug: “Te customers determine what we sell or what we don’t sell — whatever they ask for or what we see they need.” Beyond that, Meijer is striving to present its oferings to shoppers in a more meaningful, solution-oriented way. “Tat’s where the customer’s changed,” notes Doug. “Our mom used to cook every day of the week. My daughter’s mom barely cooked any days of the week. One thing that we do need to do a better job at is helping the customer plan for that meal, what he or she may want that’s quick and easy and convenient.”

Enhancing the Center of Super Symancyk concurs, noting that Meijer will continue to up its game on meal solutions, “whether that’s about information, preparation, or the ability to take and go. We really do believe that beer, wine and liquor are the kind of growth categories that are important to our customers, and also provide that conContinued on page 50

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Retailer of the Yearr

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Continued from page 46

nection to local that’s really important.” Health and wellness is also a priority, he says: “Tat really ties our worlds together across both drug store and food — it’s something that we’re mentally focused on.” It’s all about Meijer’s core shopper, Symancyk explains. “One of the diferences in a supercenter en-

vironment is that our customers walk in and they have a bigger basket,” he says. “Te frequency [with] which they come to our store may be a little less, but the amount that is on their list when they walk in the door is a little more. Tat adds up to a little bit longer shopping trip. We believe the convenience of being able to get everything under one roof makes that valuable. Tat also means that she may not be as likely to want to sit down and have dinner in our store. “We’re much more focused on how to provide that experience of foodservice in a way that she can take it home and save time putting dinner on the table for herself and her family,” he continues. Tis realization and resultant focus have pushed Meijer to develop digital initiatives, including a pilot click-and-collect program, Meijer Curbside, that’s being tested at a Grand Rapids store not far from corporate headquarters. “Te digital age has really increased expectations from our customers, and really the public at large, around accessed information and really

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Retailer of the Yearr redefned convenience,” Symancyk says. “We are really focused on how do we help bridge that gap, and really look at digital being added to our shopping experience — whether it’s about product information or how we deliver value through [loyalty] programs like

mPerks. P How do we sync up with the various missions in a way that we can be more responsive to growing needs in areas like health and wellness,

Community Partners From its Simply Give charitable giving program to food bank partnerships to local community involvement, philanthropy is an integral part not only of Meijer’s mission as a business, but also its identity. The Meijer name is ubiquitous in Grand Rapids, Mich., as a result of the family’s various initiatives to the Frederik Meijer Gardens and Sculpture Park that bears the founder’s name and reflects his love for art and nature, and passion for sharing it with others. The company gives “a fair amount of autonomy to our individual store directors to understand the needs of a particular community,” Co-chairman Hank Meijer explains. “Every community’s got its own institutions and traditions that are particularly important. We don’t go in and say well, we only give to education, health care or a particular initiative. There might be a boys and girls club here that’s really important, a festival there that’s really important. We want to be able to react to what’s important locally. That’s always been a part of our approach.” In recent years, Meijer has come to see the fight against hunger as a natural place for food merchants to play an important role. The company has also helped with disaster relief, from aiding survivors of East Coast hurricanes to providing drinking water during an emergency in Toledo, Ohio. “We develop relationships with, and sometimes organize the networks of, food pantries around our region to help figure out how we could be more efficient taking care of them,” Hank says. “They could in turn become more efficient [in] helping people who don’t have the money to buy food in our stores.” Those relationships extend to support for Meijer’s home state of Michigan, where the company has worked to create jobs and provide retail opportunities in underserved areas, in particular through two new stores in Detroit. “We’re doing that as a good business decision, but it also has the effect of bringing jobs and wonderful shopping alternatives to part of our state that has been short in both,” Hank explains. “That’s a significant initiative for us as part of our normal growth, in the same way that expanding to some of the smaller towns around our state has been important for us [and] for all of those communities who may only have one supermarket alternative.”

Grass-roots GivinG Executive Director Laura Castle and volunteer Pat Bonnell, of the north End Community Food Panty, receive a donation through Meijer’s simply Give fall campaign.

Meijer has also participated in a Michigan State University program to bring in-state suppliers together with retailers, and has helped small entrepreneurial companies get off the ground, thereby further boosting economic growth. “There’s the direct impact of our company’s growth, and what that brings in the indirect path that that growth has had in terms of really bringing more manufacturing to the state of Michigan,” Meijer President J.K. Symancyk says, adding that he’s “proud that our team has been recognized as the leading player in the state for working with team members with disabilities, creating job paths for folks in distribution, manufacturing and store environments.” When asked how the initiatives have been received by consumers and state leadership, Hank replies: “If our stores are doing well, some small piece of that is a recognition that our growth has been good for the state of Michigan. Our success goes hand in hand with revitalization of the state.” For his part, Symancyk believes that it’s not so much about perception as it is about partnership. “What’s in the best interest of our business is ultimately what’s in the best interest of our customers and the communities that we serve. The more vibrant and successful they are, then ultimately the more the growth opportunity is there for our company and our team members,” he says. “We really look to partner at very local levels, whether that is about government or just those key partners in the community that are doing good work.”

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

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2015

Retailer of the Yearr

mPerks’ imPact meijer’s digital coupon program, mPerks, has helped saved the grocer’s customers more than $400 million since its launch in 2010.

nutrition? Tose are the places where our team’s working intently to try to be more responsive to customers,” he adds, noting that such eforts aim to

“solve a problem [shoppers] have before they even know they have it.” An early adopter of digital engagement, Meijer launched mPerks in 2010, which to date has helped more than 4 million customers clip 1 billion-plus digital coupons, with total savings eclipsing $400 million over the past fve years. With the popularity of digital coupons and shopping apps trending at all-time highs, mPerks has evolved into a multifaceted program including personalized rewards and digital tools that help customers plan an entire shopping trip in advance. “Interestingly enough,” Symancyk observes, “every brick-and-mortar retailer is trying to fgure out how to fnd a virtual presence, and every virtual retailer is trying to fgure out to create a brick-and-mortar presence.

Michael Rotelle, SVP of Human Resources and Chief HR Officer PG: How does Meijer promote a sense of leadership and empowerment among associates to better serve consumers? Creating the conditions to enable our team to serve our customers is the responsibility of every team member — from front-line associates all the way up to the executive suite. It is a shared responsibility because we appreciate that we cannot give our customers the best if we are not the best. Attracting and retaining top talent are key imperatives to the Meijer business strategy. We are on an intentional journey to continually shift the culture to create the conditions that enable people to bring and deliver their best work. At the same time, we have legacy behaviors that have defined who we are as an organization; behaviors that are key to who we are and which guide our strategic journey. Taking those legacy behaviors and integrating them into the Meijer Competency Model have equipped us with a common language and infrastructure to define and support our cultural destination. Our efforts will result in the ability to deliver our Talent Brand Promise to our team members. This requires that we have and support a culture where all team members receive regular feedback on their job performance, are held accountable to results and behaviors, and are rewarded based on their contributions.

PG: Describe a typical day at Meijer in your respective sphere of influence — how are shoppers ultimately impacted by those activities? All 65,000 Meijer team members come to work to take care of our customers each and every day, regardless of whether they’re working at the corporate office, distribution facility or in the stores. But each of us works beyond our roles to connect to the communities where we operate to make them better places to live, work and play. My focus is to ensure our team members have the resources, development and guidance they need to successfully handle their responsibilities.

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

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2015

Retailer of the Yearr

CheCk it out A member of Meijer’s terre haute, ind., supercenter team interacts with a customer while furthering the company’s mission to provide a warm, welcoming experience.

We’ve tried a little bit of everything when it comes to digital. What we’ve learned is that customers don’t necessarily think about a channel — they think about a retail partner brand. In our case, they know us for our stores, they know us for the trips that they make.” Te right solution, he contends, is “to build out from our stores. Continue to fnd new ways to innovate and deliver more convenience to our customers.” Meijer Curbside, he says, is the frst step in a broader, evolving plan to determine “if that’s where our customers want to take us, or want us to take them. I believe that it will be, eventually.” As always, though, the fate of the program will ultimately boil down to a matter of “economics and convenience, and how that is going to play in the variety of communities that we serve.”

Mutually Dependent As many traditional merchants are discovering as they feel their way through this new shopping reality, the solution appears to be how best to leverage historic retailing competencies with emerg-

Lisa Henriksen, SVP of Marketing PG: How does Meijer achieve a balance between its grocery/food and general merchandise sides to ensure proper attention is paid to each? While Meijer is best known for high-quality fresh foods and pharmacy, many customers soon learn that Meijer has a surprising and affordable assortment of general merchandise items throughout the store. We work together to leverage the combined quality, value and convenience of our departments, prioritizing what is most meaningful and relevant to our customers throughout the year.

PG: What are your plans for making Meijer the go-to retailer for these areas that are driving industry growth? The plan is simple: Continue to deliver excellent customer service to our customers, and offer the products they need and want at affordable prices. As a privately held, familyowned retailer, we can nimbly make the decisions that make the most sense for our customers, providing them with the right items, at the right time, at the right value.

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

ing technologies, and one of the keys to that is a well-trained and knowledgeable team of associates guiding shoppers on the path to purchase. “Te biggest part of what separates us is our team — our team members and the experience that they provide customers when they walk in the door,” Symancyk says. “A nameless, faceless virtual interface was never going to be as powerful for Meijer. Te ability to add to that service experience by delivering convenience from the store to Continued on page 60

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beautiful bounty Meijer’s produce teams play up the abundance and gorgeousness of the average store’s 600-plus varieties of fresh fruits and vegetables.

Continued from page 56

home, as opposed to from the home to the store, is part of the balance that I think we found. It really works for our business.” While many traditional grocers are seemingly ceding general merchandise to auto-replenishment e-tailers to concentrate their full strengths in fresh

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

food instead, Meijer — which ofers a full array of general merchandise, along with fresh food and groceries — isn’t throwing in that towel. Remarks Doug: “We’d like them to ask us to pick their diapers for them.” Every department, regardless of products, presents an opportunity to own the customer relationship, Symancyk notes. “Tere are lots of intrusive, competitive forces — some digital, some just new formats and new competition, and they’re coming in to try to stake their claim to serving those customers better,” he says. “I go back to what my mom told me: Rarely is doing something simply because everyone else is doing it a good idea. Look at what makes your relationship with customers special, and then [fgure out] how can you use technology to enhance that. To deliver better value, to deliver greater convenience — that’s the question every retailer has to answer in their own way to fgure out how to be most competitive. Tat’s against a sea of competitors, not just digital ones.”

2015

Retailer of the Yearr

All ToGeTher Now A key part of Meijer’s success stems from its sense of teamwork and values that are consistent across the organization.

Strengthening the Core In fact, as much as Big Data may tell us that shoppers have changed, there’s a handful of core demands that has remained constant and that Meijer strives to own on a daily basis. “I don’t think shoppers have changed as much as it sounds like they have,” Doug muses. “People still want clean stores and a good value, and still want to be treated” in a way in which their patronage is acknowledged and appreciated. “I think that’s right,” Symancyk agrees. “One of the frst big evolutions of this company was the birth of the supercenter. What drove that is not altogether diferent than what customers are looking for today, which is better assortment, better choices, more convenience and better service. Tere are more ways that we have the opportunity to deliver that to customers. As the world continues to evolve at a rapid pace, there’s going to be even more choices that customers have. It all comes

congratulates

back to friendly service, great assortment, great value and a convenient shopping experience. Tose are the drivers that matter today, as much as they did when we started the company 80-plus years ago.” Beyond that, it’s meeting the unique needs of each community. “We regard everybody as a

on being selected

Progressive Grocer ’s 2015 Retailer of the Year!

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

2015

Retailer of the Year potential customer,” Hank says. “We don’t have a certain demographic, income level or characteristic that says ‘that’s our customer.’ I think that’s where we’re diferentiated from many of our competitors.” Moreover, he adds, with food marketing increasingly fragmented among multiple channels, the same can be said for Meijer’s retail contenders: “Everyone is a competitor.” Unlike most traditional grocers, Meijer has the further task of balancing its food and GM categories to ensure customers are getting exactly what they need. “Tat’s another area where the customer will defne that for us,” Doug afrms. Meijer’s store leadership structure defnes responsibilities over each category, and it’s up to each store to drive its individual business.

Wow Factor “I don’t know if we do have a balance,” Symancyk says. “I think most customers walk in our door with their grocery list, their needs for the week being the primary driver of that trip. What we really look to do in general merchandise is to have the right assortment, the right value on those things that they need. Ten, that we’re really paying attention to deliver good, better best in a way that truly surprises and delights customers who are in our store. We love the idea that someone is going to be at a dinner party or a ballgame, and be asked the question, ‘Where did you get that?’ and the answer is Meijer, and the reaction is, ‘Wow, I didn’t know Meijer had that.’ Tat’s really a big driver of our general merchandise strategy.” Ultimately, Meijer wants folks to “go away happy, satisfed and well taken care of,” Doug says, and, Hank adds, “really [feeling] good about having enjoyed great values.” Symancyk elaborates: “I think when we do what we do well, customers walk away feeling like we’re looking out for their best interests. [If] they experienced a friendly atmosphere with a lot of team members oriented toward helping them, then we feel like we’ve done our jobs.” Historically, Meijer was a pioneer in crossdocking. A generation ago, that was a marvelously efcient system and a highlight of supply chain. Now, technology and manufacturing are driving the change. Addressing the latter, Meijer has opened a second dairy plant to ensure a consistent supply of milk to its stores. As to the former, it’s about energy efciency, and better partnering with suppliers. “We’ve been good at high-volume, fast-moving merchandise,” Symancyk says. “Over the last fve to 10 years, we have evolved to hold onto that

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2015

Retailer of the Yearr

MichiGan-Made SuPPoRt Meijer expanded its Made in Michigan initiative, which supports Michigan small businesses in all of the grocer’s home-state stores.

strength, and to also be better at the right pace of replenishment. We’ve looked at energy utilization across our feet, anything we can to help be more efcient and lower costs so we can pass that value to our customers. Tat’s paying dividends and helping us to be even more competitive.”

Great Lakes Retailer Meijer relishes its role as a booster of goods produced in-state, from Michigan stone fruits to Kellogg cereal to beers from Grand Rapids’ vibrant microbrewing community. “Michigan’s a huge food-producing state,” Hank afrms. “Te variety of produce is second to California. We’ve got a number of major food processors in the state.” Meijer expects to eventually extend this pride marketing to other states where it operates. “When we opened the frst stores in Wisconsin, we probably spent more time prior to the Milwaukee and southern Wisconsin openings understanding the market, working with the community,

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

and that’s gone very well,” Hank recounts. “We’re concentrated in now just six states, and we have every expectation that we will be local in each of those markets. We operate on a saturation model. We seek to serve everybody in the communities you’re in. Tat intensity means that we’re going to be a part of that community, and fgure out every

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Homeward Bound meijer’s home section boasts a broad selection of national- and and own-brand products at affordable prices.

way we can to understand its needs.” When asked to discuss Meijer’s leadership and associate empowerment eforts to better serve shoppers, Symancyk says that the company has spent ample time digging further into how to broaden its reach. “One of the benefts of being a smaller company and growing methodically over time, is that team members inherently have great relationships with each other. Tere’s a long sense of history and experience to draw upon that builds a closeness, like that of a family,” which he believes has been integral to the company’s growth. Today, however, Symancyk notes, “We’ve gotten to a size that that makes it a little bit harder to do, so we are really focusing heavily on investing in our leaders’ abilities to train and develop new leaders.” Te one thing that holds it all together, according to Symancyk, “is a really tight sense of values that are consistent across the organization.” Of the

company’s longtime open-door policy, he observes, “Te great beneft that the three of us have, as do so many leaders across the company,” is direct knowledge of, and interaction with, customer sentiments. Characterizing the convoy of e-mails and phone calls that he and his cohorts personally review, discuss and ultimately aim to resolve as “a real

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

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Retailer of the Yearr blessing,” Symancyk contends that keeping tabs on direct customer feedback “enables us to learn so much. We’re able to take action and respond accordingly,” either when missing the mark or fguring out ways to improve. “Tat’s part of what a great family environment is all about.” Speaking of which, when asked what he believes best helps sets Meijer apart from other employers,

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S Symancyk replies, “As someone who’s not a family member, I can speak honestly about the fact that the beautiful part about being a member of this team is that it’s a private, family-held company,” with a consistency around an incontrovertibly “legitimate mission” to serve customers. “Te more constituents you have to serve, the more you tend to have to make concessions and trade-ofs,” he explains, “but the one thing that makes me most proud and grateful for the opportunity to be a part of this team is that there is no ambiguity around what constituents are most important for us. It’s our customer.” Consequently, Symancyk continues: “Team members are empowered to do the right thing — not just because it’s the right thing for a moment, but what’s going to be the right thing in the best long-term interest of serving our customers. A big part of what makes our days great is the ability to interact with so many customers and make a diference in their lives. Knowing that you have that level of support, and that you are surrounded by 60,000-plus team members who are oriented the same way, is a really cool thing to be a part of.”

Dynamic Growth Opportunities Hank adds further color to why he thinks Meijer is an ideal organization for long-term career seekers: “If you start with the baseline, that we’re a very fast-paced, exciting, varied business, there are three things that come to mind for me. One, certainly, is a place flled with dynamic growth opportunities, which [enable employees] to take on greater challenges and responsibilities,” while being promoted and recognized as well. Te second element, Hank continues, is a palpable esprit de corps that imparts “feeling good about what you do” within “an ethical framework built on core values of doing something meaningful … as part of an organization that is doing many things that are important in the communities that we serve.” Te third noteworthy item is confdence in fellow co-workers, which, he says, “is something we really value about our culture. “I’m certainly not objective about

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the best of everythinG in an era when shopper experience is critical, Meijer is focusing on superior execution to enhance the retailer-shopper relationship.

this topic,” he readily acknowledges, “but it’s the people I work with, in the sense of a cohesive enterprise, who serve as a constant reminder that we’re part of doing something that goes beyond selling product. It’s not only a crucial, but also an essential service. I’d like to think that as we expand in new communities, we will add something of value — that we’re not just another big box on the highway — with the diference being our people. Tat what’s most important to me about working at Meijer.”

Doug enthusiastically concurs. “I think one of the D more interesting things about working here, especially for new staf members, is when introductions are taking place. And a key question that’s invariably asked is: ‘How long have you been at Meijer?’” In many cases, he adds, responses range from “20, 30 to 40 years — numbers which are simply amazing” in an industry notorious for high turnover. “Our administrative assistant has been here for more than 55 years, and continues to do a great job,” says Doug. “Tere are many others like her who’ve been here for 40 and 50 years, and it’s just really gratifying to be a part of.” Symancyk echoes the sentiments. “Te inspiration derived in knowing that when we do what we do best, we make life better for our customers, for our team members and for our communities — it’s something that’s very powerful.” What’s more, “it’s coupled with being able to be part of a team flled with great people, which is a true winning combination,” he notes. “I had one person on my team refer to working here as ‘retail vacation,’ because we really get the chance to focus on the fun parts of the job,” like helping customers. Concludes Symancyk: “We get to really balance and focus on those things that are most meaningful, without the minutiae. And it’s a really big part of what gets people excited about being here.” PG

Rick Keyes, EVP of Supply Chain, Operations & Manufacturing PG: What supply chain initiatives have been most influential for helping Meijer grow and become more competitive? We know that supply chain, distribution and manufacturing are key differentiators in the way we serve our customers. We work closely with our suppliers to ensure timely delivery into our stores, and cultivate partnerships with our vendors that allow us to get products in store fast and move the supply chain quicker. For example, Certified Angus Beef and fresh produce are delivered to our stores daily. We’ve developed a strong locally grown program that has an economic impact of nearly $100 million, but more importantly, includes more than 125 growers in our six-state footprint who supply our stores with the freshest produce possible. Retailing is a fast-paced business that demands not only innovation, but continuous improvement. In recent years, Meijer began expanding into manufacturing, with a handful of facilities spread across the Midwest. This allows us to focus on keeping prices low for our customers, while also reducing the number of food miles, transportation costs and fuel consumption.

We have a roasting and packaging plant in Grandville, Mich., a Purple Cow Creamery in Holland, Mich., that supplies dairy products to our Michigan stores, and most recently, we opened our new dairy production facility in Tipp City, Ohio, that will eventually be used to service 100 stores in Ohio, Indiana and Kentucky.

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

Get real!

Why convenient authenticity is the missed millennial opportunity Millennial and Teen consumption trends are a

grand advertising measure, but by investing their

hot and sought after topic these days and with

money into developing an affnity for fresh

good reason. Food and beverage companies know

ingredients and authentic menu items. The relative

their long-term growth depends on winning a

success of these brands provides a window into

greater share of the Millennial and Teen wallet.

how other brands can win over the Millennial and

And yet these businesses are missing one of the

Teen consumer at home.

largest growth opportunities that the Millennial and Teen market have to offer them. They are

Don’t confuse settling for something with

missing this opportunity, not because they don’t

meeting ideal needs

know what 13-35-year-olds currently eat and

This is the trap that any business risks falling into

drink—but because they haven’t looked closely

when it confuses the categories of products that

enough at what this demographic would prefer

consumers settle for with the categories that they

to eat and drink if they were given the choice.

ideally want—and which therefore have greatest

They are failing to distinguish between what they

potential for growth. It’s why the perspective offered

do and what they want.

by TNS’s Growth Point rankings, which focus on unmet needs and the degree of positive momentum

The ‘barn-door-sized’ opportunity that food and

for a category, is so valuable. In this case, Growth

beverage Brands are missing is for foods that can

Point shows that the products currently offered as a

be prepared quickly and conveniently at home but

solution to Millennials and Teens time-pressed

are higher quality and more natural and authentic.

lifestyles don’t really resolve the tensions created by

When making a comparison, look no further than

time and budget pressures and what they really

Fast Casual dining brands like Chipotle and Panera

want to eat. They may buy and eat canned chili, hot

Bread and the impact they’ve had on mega-brands

dogs or ramen noodles but there is very little unmet

in fast food and casual dining. They’ve enjoyed

demand in these categories and even less

success with Millennials and Teens not by some

momentum behind them to drive future growth.

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

Advertorial

Their perceived lack of quality and sense

Millennials: Top potential for growth

of being unnatural and artifcial makes them a grudging purchase and one that Millennials and Teens are likely to stop making as soon as a better offer comes along. Convenience that doesn’t compromise on experience

Foods

Beverages

1 Comfort foods prepared

1 Waters: spring, sparkling

fresh at home

2 Fresh fruit

2 Coffee: brewed at home

3 High protein foods

3 Specialty coffees, favored

or from a coffee shop

Analysis of the Growth Point rankings shows that

prepared at home

13-35-year-olds would be willing to pay more for

4 Side dishes: grains,

higher quality foods and drinks that can still give them the same core convenience beneft. These products don’t necessarily need to have scientifcally proven health or weight-loss benefts, partly because millennials and teens are signifcantly less concerned

brown rice, potatoes

5 Hot breakfast cereals and fresh breakfast sandwiches

6 Greek yogurt,

coffees

4 Iced tea 5 Hot Tea 6 Smoothies: made at

dessert-type yogurt

home and ready-to-drink

7 Frozen fruit juice bars

7 Nutritionally complete

8 Sandwich/sub from shop

8 Fruit juices

9 Dried fruit

9 Milk

higher quality and authenticity.

10 Trail mix

10 Coconut water

As with all Growth Point rankings, the list of the

Millennials and Teens’ spending when brands get

foods and beverages with most growth potential

their proposition right. Focusing research on

does not guarantee growth for launches into these

concepts that can ft time-poor lifestyles while still

categories—but it does highlight the categories that

tasting, smelling and feeling like the real thing is a

offer the greatest potential for growing a share of

great place to start.

about weight control than other groups. However,

drinks

they do need to offer a crucial sense of authenticity. They see authenticity as being “real” food, not highly processed or containing artifcial ingredients. These can be healthy or more indulgent foods; as long as quick, convenient prep accompanies the

Finding the right path to growth Growth Point generates its rankings from the TNS

On the other hand, there is far

Consumption Universe, which consists of more than

less opportunity in meeting

19,000 consumer interviews and covers 250 food

unmet needs in a product area

and beverage products. The analysis combines the

that consumers are walking away

degree of unmet consumer needs with the degree

from. And there is limited opportunity in identifying

of consumer momentum that each product area

products that consumers will spend more on, if it’s

has. Where you fnd both unmet needs and positive

already fairly certain whose products they will buy.

momentum, you have better growth potential.

To fnd out more, visit www.TNSGrowthPoint.com.

October 2015 | progressivegrocer.com |

Grocery

Healthy Snacks

Less is More

Innovative snack makers tout clean ingredients, free-from formulations. By Bridget Goldschmidt

ast Sept. 12, EatClean.com, Rodale Inc. and Prevention magazine presented Eat Clean Awareness Day in New York City. Sponsored by Enjoy Life Foods, Manitoba Harvest, Panera Bread, Two Moms in the Raw and Uncle Sam, the event featured street teams distributing information on how to eat healthy and whole foods, as well as handing out samples in high-trafc areas of the Big Apple. Consumers were encouraged to share pictures of their favorite clean meals or snacks on Twitter or Instagram to enter a contest and receive exclusive coupons. “Tis is a chance to let New Yorkers know about the abundance of healthy food options available in the city and to show how simple it can be to eat cleaner, more wholesome foods, even in a busy city where processed items and takeout still dominate,” the organizers noted in advance of the event. Such eforts refect a growing movement toward pack-

aged foods made from a relatively short list of identifable, nutritious ingredients, with no preservatives or artifcial colors or favors; low or no cholesterol, fat, sugar and sodium; and increasingly, no common allergens or gluten. Tese attributes make up the much-publicized “clean label” designed to reassure consumers interested in what they’re eating.

Bare Facts “At Bare Snacks, we create Snacks Gone Simple, meaning that all of our banana, coconut and apple chips are just that — simple,” explains Dana Ginsburg, director of marketing at the aptly named brand, which is based in Manteca, Calif. “Our chips are made from whole fruits that are sliced fresh and simply baked, with just a dash of seasoning. Tere’s no added oil or preservatives, and nothing artifcial ever. Our products satisfy consumers’ need for a tasty, crunchy snack with the natural goodness of fruit.”

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

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Grocery

Many progressive retailers are now merchandising better-for-you snacks together, making it easier for consumers to find and choose such products.” —Peter Michaud, Clearview Foods division of Snyder’s-Lance

Healthy Snacks

Bare’s newest product, Crunchy Banana Chips, is baked rather than fried. “Our chips are crafted in small batches from fresh, ripe bananas that are slowly baked to a perfect crunch, with no added oil or sugar,” notes Ginsburg. “Te new line of Crunchy Banana Chips [is] Non-GMO Project Verifed, gluten-free, fat-free, and contains no preservatives.” “Consumers want premium products made from high-quality, simple ingredients, and they are paying increasing attention to what they put in their bodies,” points out Tom Ennis, CEO of Austin, Texas-based Amplify Snack Brands, which ofers the SkinnyPop popcorn and recently acquired Paqui tortilla chip lines. “Our products appeal to consumer trends and preferences we are seeing in the marketplace, including a greater focus on health and wellness; increased consumption of smaller, more frequent meals throughout the day; and a strong preference for convenient better-for-you (BFY) products. We believe growth in BFY snacks is driven by various factors, including the increasing importance of snacking in many consumers’ diets [and] heightened awareness of the importance of a healthier diet, coupled with increased understanding [of] and focus on the importance of nutrition to long-term health and wellness.” “Clean ingredient decks, or clean labels, are increasingly important to consumers looking to avoid artifcial colors, favors, preservatives and

The Bold Ones Just because a product boasts a clean label doesn’t mean it has to offer bland taste. Take Shine Organics, a new fruit purée pouch line aimed at grown-ups rather than their kids, for example: The product offers “nourishing, wholesome and unique ingredients that provide a superior snacking solution” at just 70 to 130 calories per pouch, according to Shazi Visram, founder, CEO and “chief mom” of New York-based Happy Family Brands and Shine Organics. “Consumers are looking for better nutrition and bolder flavor from snacks,” asserts Visram. “We formulated Shine Organics to offer healthier snacking options that satisfy adult palates and support consumers’ entire well-being. Available in four flavors — Purify, Elevate, Revive and Calm — each pouch features a unique blend of organic fruits, vegetables and micronutrients.

the like,” agrees Peter Michaud, general manager of the Clearview Foods division at Charlotte, N.C.-based Snyder’sLance. “As such, the natural and organic snacks segment of the greater snack food industry continues to post some of the most impressive growth numbers. Organic snacks grew at over 15 percent versus last year, while the non-GMO snacks segment grew over 30 percent versus last year.” In recognition of this growing demand, Snyder’s-Lance earlier this year established Clearview Foods, a snack food division with a focus on developing better-for-you snacking options under the Snack Factory, Pretzel Crisps, Eat Smart and Late July Organic Snacks brands. Launches in 2015 include Gluten-Free Dark Crunch Minis Snack Factory Pretzel Crisps in Chocolate and Vanilla Yogurt favors, Eat Smart Sea Salt and Lime Dipping Chips, and Late July Restaurant Style Tortilla Chips in Lightly Salted Purple Corn and Sea Salt & Lime varieties. “Our brand promise has always been to deliver the highest-quality snacks and experiences to our fans,” asserts Jon Lesser, director of marketing at New York-based Kind Snacks, which has seen “exponential growth” since introducing its Fruit & Nut bar line some years ago, and has now expanded into the breakfast bar segment. “We feel that the ingredients should always be the hero and speak for themselves. As such, all Kind products are made with recognizable, whole ingredients and are dressed with a transparent wrapper so you can see

We communicate our clean label with our USDA Organic and Non-GMO Project certifications and through our digital marketing efforts.” Launched in July 2015 at Target, Shine is poised to roll out to select grocers nationwide in the next few months, notes Visram, who adds: “We expect to see even more nutrient-rich superfoods as ingredients in everyday snacking. We are continuing to work on an exciting product pipeline for Shine Organics to deliver innovative healthy snacking options for adults.” Unexpected flavors aren’t just the province of fruit snacks, however. “As people continue to look for better-for-you alternatives, we are seeing opportunities to disrupt unconventional categories,” affirms Jon Lesser, director of marketing at New York-based Kind Snacks. “For example, when we introduced Strong & Kind [bars] a few years ago, we found a new way to deliver the bold, savory flavors traditionally reserved for chips, pretzels and jerky in a more wholesome, portable snack. Strong & Kind delivers all of this with 10 grams of soy- and whey-free protein derived from nuts, seeds and legumes, and doesn’t use MSG or sodium to achieve the savory taste.”

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

Grocery

Healthy Snacks

Eating clean is becoming more mainstream, and these products are now available to a wider audience than just the people who shop at the natural and organic stores.”

the whole, delicious goodness we work so hard to create. Our product names also celebrate these ingredients. Instead of naming a product ‘apple pie,’ we call it Apple Cinnamon & Pecan to showcase the tasty ingredient combinations.” “Clean labeling is important for two reasons,” says Joe Lupica, marketing manager for North Haven, Conn.-based SuperSeedz, a line of gourmet favored pumpkin seeds whose latest variety, Maple —Janet Souza, Sugar & Sea Salt, came out this year. “Clean-label Lundberg [products] are made with simple ingredients that Family Farms people understand, which ultimately creates trust with a brand. Secondly, using simple, high-quality ingredients contributes to a more nutritious, bettertasting product, at least in our experience.” “We want our consumers to understand where their food comes from so they can make educated choices,” observes Janet Souza, marketing manager at Richvale, Calif.-based Lundberg Family Farms, whose most recent snack introductions include Organic Sweet Dreams Rice Cakes topped with indulgent Fair Trade chocolate, and low-calorie Organic Tin Stackers rice cakes. “Having clean, easy-to-read ingredient statements helps us do just that.”

Selling Simplicity Ofering a healthy clean-label product doesn’t mean much if a brand’s target consumers — mindful eaters who usually check the Nutrition Facts panel on an item before buying it — aren’t aware that the item exists. As such, marketing and merchandising with an emphasis on education are key to making sure that shoppers know all about a company’s clean bill of health. “Te product packaging, with its ingredient callouts, is one of the primary communication vehicles, as the better-for-you snacks consumers are very active label readers,” afrms Clearview’s Michaud. “Additionally, many progressive retailers are now merchandising better-for-you snacks together, making it easier for consumers to fnd and choose such products.” “We communicate clean primarily on-pack and online,” notes SuperSeedz’s Lupica. “We highlight Non-GMO verifcation, all-natural and the things that are not in our products, like gluten, cholesterol, artifcial favors, colors, etc.” To convey the clean profle of products like

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

Duke’s “Shorty” Smoked Sausages, which contain only seven ingredients and less than 1 gram of sugar, Boulder, Colo.-based Tanasi Foods “[uses] a lot of POS that emphasizes our small-batch craft commitment,” says President Justin “Duke” Havlick. “We keep it simple and communicate that the ingredients and care we use simply lead to a healthier, bettertasting smoked meat. What happened — and is happening — in beer with the craft beer explosion is defnitely happening in food, and meat snacks in particular. We partner with craft beer Sam Adams for in-store programs and do a lot of brand activation in [and] around craft beer and food events [such as] Duke’s Craft Across America Tour.” “We educate consumers with our brochures,” observes Lundberg’s Souza. “We have several that explain our commitment to organic, to non-GMOs, to gluten-free products and to providing wholesome whole grains. We also bring awareness to consumers through in-store displays with header cards, shelf talkers and through advertising.” Further, the company’s website “is a wealth of information on all of our products and our commitment to growing wholesome foods,” she points out, adding that such measures are more important than ever because “eating clean is becoming more mainstream, and these products are now available to a wider audience than just the people who shop at the natural and organic stores.” Some companies opt for a unifying design to illustrate their message. “We communicate our simple, clean ingredients throughout our packaging, promotions and merchandising, with bold visuals

of real, wholesome bananas, coconuts or apples,” says Bare Snacks’ Ginsburg. “We also highlight our ingredient list and Nutrition Facts prominently for total transparency.” Others incorporate a little bit of everything into their promotional strategies. “We utilize a range of marketing initiatives, including product sampling, social media tools, advertising and product labeling, to educate consumers about our brands and the benefts of our BFY snacks,” notes Amplify Brands’ Ennis

Negatives and Positives Te rising demand for healthy clean-label snacks won’t end any time soon, according to manufacturers of such products. “Consumers are demanding ingredient simplicity and transparency, yet they’re not willing to compromise on taste,” asserts Ginsburg. “It’s no longer enough to ofer one or the other. Food manufacturers will need to continue to innovate on delicious, satisfying foods made from clean ingredients that consumers have come to expect.” “Ultimately, because of the shift to ‘grazing’ instead of meal-based eating behavior, healthy snacks will continue to grow, particularly those that offer natural sources of plant-based protein as well as

other naturally functional benefts,” predicts Lupica. “Eventually, healthy snacks may even become the majority of the category. Unique favors will continue to emerge and pricing will likely come down because of economies of scale. Regarding the clean-label trend, I think it will continue to grow as consumers demand more fresh, ‘real’ ingredients. Tose that can deliver on nutritious and delicious will dominate their respective categories.” “Based on the conversations we are having with consumers, the absence of negatives — artifcial favors, colors, preservatives, etc. — is just the beginning,” attests Clearview Foods’ Michaud. “Consumers are now demanding the presence of positives, [like] protein, fber [and] vitamins, in addition to the absence of negatives. At the same time, they are not willing to sacrifce great taste. Tis revolution in snacking is a challenge, but those manufacturers willing and able to deliver on these consumer needs and wants will fnd success.” PG For more about healthy snacks, visit Progressivegrocer.com/healthysnacks.

October 2015 | progressivegrocer.com |

Perimeter

Rethinking the Lunchbox

Cool for

School Perimeter items, including dairy, make nutritious, delicious lunch options. By Bridget Goldschmidt

airy items in school lunches once were confned to a small carton of milk and perhaps a cheese slice or two tucked into a ham or turkey sandwich, but that’s no longer the case. For one thing, kids’ lunches are just as likely these days to include a squeeze pouch of mixed-fruit yogurt, or veggies and ranch-favored dip.

Today’s lunches tend to be smaller, quicker and “snackier,” according to Melissa Abbott, VP of culinary insights at Te Hartman Group, a market research frm in Bellevue, Wash. “Te size of lunch has shrunk because we’re snacking on either side quite a bit more,” explains Abbott. “ Tere is a growing demand for products related to snacking and portability,” afrms Julie W. Henderson, VP communication at the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA). “In addition, food has become a badge of values, and consumers want to know where their food comes from and how it was made. Te refrigerated dairy aisle is meeting each of these customer needs.” What’s more, she points out that the category’s suddenly on-trend health benefts include its being a good source of protein and probiotics. Taking advantage of such trends, dairy producers are coming up with inventive new items. “Product innovation is a driver of growth in the dairy aisle,” Henderson says, going on to cite fndings from the recent “Future of Dairy” report from Rosemont, Ill.-based Dairy Management Inc.: “Snacks/spreads/dip and yogurt are two categories that are leading product innovation.” Eating on the Go

Many dairy items deserve prime placement in kids’ refrigerated lunch packs. Among the fun new items singled out by Henderson is Sargento’s Balanced Breaks, which she describes as “the perfect combination of creamy cheese, crunchy nuts and sweet dried fruits for a delicious, all-in-one snack.” Te item comes

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

Pledge Drive

in four varieties, including Natural White Cheddar Cheese, Sea-Salted Almonds and Dried Cranberries, and Natural Sharp Cheddar Cheese, Sea-Salted Cashews and Cherry Juice-Infused Cranberries. According to Rob Tune, senior marketing manager for adjacencies at Plymouth, Wis.-based Sargento, Balanced Breaks, introduced this past March, “has proven to be a successful new product launch. Our customer repeat rate has been stronger than anticipated, and we’re on track to meet or exceed our goals for the frst year.” Beyond new product introductions, Stuart Manning, marketing manager — snacks, notes: “Backto-school is a key point in time for our Sargento Natural Cheese Snacks as both parents and children get back into their routines. … While much of our advertising centers on educating consumers about real, natural cheese, our cheese snacks focus on the nutritional benefts of cheese as a natural source of protein and calcium. We share this message with consumers on print ads, in-store and on packaging.” Further, to help moms and dads hone their lunch-making skills, Sargento provides plenty of ideas. “Trough our website, Sargento.com, we ofer consumers recipes tailored to the type of cheese and meals they like,” says William Jacob, associate marketing manager for slices. “Our sandwich recipes, each featuring our 100 percent real, natural cheese, can help inspire [consumers’] lunchbox creations.”

Junk-free Zone “With new research coming out that supports whole milk as part of a healthy diet for kids, cheese is a great option for a high-protein and zero-sugar ‘real food’ snack,” asserts Joe Prewett, director of product management and innovation at the Oregon-based Tillamook County Creamery Association dairy cooperative. “Tat’s why we launched the Cheese Sticks in January, providing Tillamook Medium Cheddar and Colby Jack Cheese that’s individually wrapped and portioned with easy-open tear strips for kids.” To get the word out about its nutritious products, the co-op launched a campaign in time for the start of fall classes. “Many convenient and kid-friendly foods are bursting at the seams with artifcial in-

Of course, dairy isn’t the only good perimeter lunch choice for growing schoolchildren. For instance, Produce the produce industry has made great strides in companies are getting families to add fruits and veggies to kids’ truly coming away-from-home midday meals. around to meet “The Produce for Kids Power Your Lunchbox Pledge, which is in full swing August-September, the needs of promotes the purchase of healthy lunchbox-friendly busy families items,” notes Trish James, VP of Orlando, Fla.-based who want to eat Produce for Kids, which unites the produce industry fresh fruits and to educate consumers about healthy eating with vegetables with fresh produce while raising funds for children’s new innovative nonprofits. “The Poweryourlunchbox.com website single-serve houses lunchbox ideas featuring these products packaging and and coupons for those products to make the purpre-cut items.” chase even more enticing. This year, we hosted a family cooking class at a ShopRite store and were —Trish James, able to offer samples of Power Your Lunchbox Produce For Kids partner products. During the fall, there are Produce for Kids campaigns running in all Meijer and Publix stores, encouraging the purchase of our partner companies’ fresh fruits and vegetables. This October, Produce for Kids will host a family cooking event at the Aprons Cooking School in Orlando to walk families through the creation of a healthy ‘Very Hungry Caterpillar’-themed snack. Produce companies partnering with Produce for Kids for the fall Publix campaign will be featured at this event.” Along with promotions, suppliers are developing appropriate products. “Produce companies are truly coming around to meet the needs of busy families who want to eat fresh fruits and vegetables with new innovative single-serve packaging and pre-cut items,” observes James. “Kids love ready-to-go items like the Ruby Fresh pomegranate arils or Pero Family Farms’ pre-cut sweet pepper rings with ranch. Most all grocery stores are now doing their own pre-cut/ lunchbox-ready single-serve produce items in-store, like kiwi, mixed berries or a carrot/celery mix.” When asked how best to merchandise these items, James suggests creating “a destination in the department where customers can … select any pre-cut item they need. Cross-merchandising is important but needs to make sense. For example, on the weekend, families with kids in fall sports will be running in for game snacks for their teams. Merchandising apple slices, cheese sticks, and cases of water in one location not only offers healthy and convenient snacking options, but [also] helps add a produce item into a market basket that might not have otherwise had it.” Produce for Kids’ efforts certainly seem to be paying off. “Based on record-breaking visits to the Produceforkids.com recipe section and a spike in social media following this back-to-school season, we can confirm there is an ever-growing interest from families on how to incorporate fresh fruit and vegetables into their daily routine,” says James, noting that recipe traffic on the site during that time frame “was triple what it was the same time last year.” October 2015 | progressivegrocer.com |

Perimeter

Rethinking the Lunchbox

gredients,” explains Prewett, “so this back-to-school season, Tillamook partnered with [Detroit-based child entrepreneur] Super Business Girl Asia Newson for a De-Junk the Lunchbox campaign, empowering parents to replace foods packed with artifcial ingredients with real food like Tillamook Yogurt and Tillamoos [Tillamook Cheese cut into snack sizes].” As part of the campaign, “Tillamook engaged

prominent bloggers to join our eforts by curating an inspiring lunchbox full of real foods and favorite Tillamook products to share with their readers online” at Tillamook. com, adds Prewett.

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

Healthy Connection Meanwhile, Organic Valley, a dairy co-op based in La Farge, Wis., prefers to “take a combined approach using traditional marketing eforts of in- and out-of-store promotions and advertising, combined with a grass-roots approach to promoting [our] products, especially via social media,” notes Brand Innovation Manager Nicole Mydy. “We like to connect with our customers this way — one to one, often ofering coupons and premiums and contests.” When it comes to the back-toschool occasion, “we have a lot of great products that go great in the lunchbox, including American Singles and other sliced cheeses; Stringles — which are individually packaged string cheeses that are even available in club store packages — and single-serve milk products,” observes Mydy. “For older kids who maybe don’t always like to carry a lunchbox, we have shelf-stable milk protein shakes that can act as great tide-me-overs for a missed meal.” Te company’s latest item is Grassmilk yogurt, characterized by Mydy as being “made from organic whole milk produced by cows that eat nothing but grasses and dry forage, never any grain like corn or soy.” She adds: “Studies show that pasture-grazed milk and dairy products have a better balance of omega-6 and omega-3 fatty acids — plus they have exceptional favor. Our Grassmilk yogurt comes in two favors — plain and vanilla — and it comes in multiserve tubs that can easily be portioned into lunchbox containers.” Organic Valley’s commitment to kids goes beyond marketing and products, however. “One interesting thing we’re doing — and have done for years — is advocating for healthy school

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Perimeter

The size of lunch has shrunk because we’re snacking on either side quite a bit more.” —Melissa Abbott, The Hartman Group

Rethinking the Lunchbox

lunches for kids,” says Mydy. “Quite apart from promoting our own brand, we have donated food and other support to programs like the Sausalito Marin City School District’s lunch program — the nation’s frst 100 percent organic lunch served in a public school, which is rolling out this year.” As for lunchtime ideas, the co-op ofers “a whole kid-friendly section on [our] website that [not only] includes numerous recipes for sandwiches like Pepperoni Grilled Cheese … but also a Superkid Energy Bar and kid-friendly salads,” she notes.

Simply Sophisticated For more sophisticated young palates, there’s New Holland, Pa.-based Alouette, mainly merchandised in the deli aisle, whose newest products seem particularly lunchbox-ready. Le Petite Fromage, a snacking spread free of artifcial ingredients and made from cheese, a little yogurt and fresh-picked vegetables, “is the perfect portable snack for parents to include in lunchboxes as part of a healthy, wholesome lunch,”

says Senior Brand Manager Tameika G. Miller. “In fact, the nutrition label includes straightforward ingredients that are simple enough for a grade-school student to read on their own.” Te indulgenttasting product line comes in Garlic & Herb, Garden Salsa, Parmesan & Basil, and Cucumber & Dill varieties. Both Le Petite Fromage and Le Bon Dip, a blend of premium soft creamy cheese, chunky vegetables consumers can see, and a touch of Greek yogurt in Basil, Zucchini & Parmesan, Fire Roasted Vegetables, Zesty Garden Salsa, and Roasted Red Pepper & Chickpea favors, “are … healthier options than processed cheese, and are products the whole family will enjoy and be satisfed by without feeling guilty,” continues Miller. With so much to choose from among perimeter products, particularly dairy items, parents need never skimp on healthy nutrition to provide the tasty morsels kids crave in school lunches. PG For more about lunch solutions in the perimeter and beyond, visit Progressivegrocer.com/rethinkinglunch.

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

Frozen & Refrigerated

Category Management

Ice Flow

Cross-merchandising the frozen aisle with other departments can help deliver better shopper solutions. By Jim Dudlicek

ith the range of favors and mealtime options available in the frozen aisle, countless opportunities exist for crossdepartment merchandising in grocery stores. “Fresh salads round out frozen dinners. Dairy aisle milks and juices complement frozen breakfasts. Frozen desserts add a sweet ending to any meal,” notes Skip Shaw, CEO of the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA). To capitalize on the opportunities, grocers can get creative with store layouts, according to Shaw, who ofers the example of placing portable freezer display cases in other areas of the store, from the produce section and the dairy aisle to the wine department. “Grocers have seen success already [with] this tactic, using [St. Louis-based Hussmann Corp.’s] LifeLine cases, which allow the retailer to crossmerchandise dry next to frozen foods,” he points out. “Innovations like these will continue to emerge alongside the exciting evolution of the frozen aisle.”

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

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Frozen food brands are reacting and delivering easyto-prepare foods with a variety of audacious tastes and fresh ingredients, which allows grocery retailers the opportunity to connect with [the Millennial] generation on both the emotional and rational level.” —Skip Shaw, NFRA

Category Management

Chilling Effect Building upon strategies like this will be essential as retailers push their category management activities into the next generation. And with overall supermarket sales of frozen foods slipping for the past three years, according to Nielsen data reported in PG’s 68th Annual Consumer Expenditures Study last July, a jump-start would be welcome. In an age when shoppers are looking for solutions that draw upon the whole store, not just products that dwell in a single aisle, grocers will need to leverage the assets of all products, and the inherent synergies that exist among them. Te frozen aisle can play a key role in these solutions. “As the Millennial generation continues to evolve and their importance to retailers grows, their lifestyles and demands have a great impact on how the food chain manufactures, merchandises and ultimately delivers its food through grocery retailers,” Shaw asserts. Words like “wholesome” and “quality” are becoming just as vital to Millennials as “convenient” and “afordable” when it comes to the frozen aisle, Shaw says. “Frozen food brands are react-

oN thE SPot Spot merchandisers enable retailers to place frozen foods throughout the store, opening up multiple cross-merchandising opportunities.

ing and delivering easy-to-prepare foods with a variety of audacious tastes and fresh ingredients, which allows grocery retailers the opportunity to connect with this generation on both the emo-

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

tional and rational level,” he notes. Reafrming the importance of the Millennial shopper, Todd Hale, of the Schaumburg, Ill.-based Nielsen Co., explains in the NFRA’s soon-to-bereleased “State of the Industry Report”, that the demographic will account for 57 percent of the U.S. population in 2020, up 50 percent from 2014, and will represent signifcant consumer buying power.

Reversing the Thaw Selling frozen food to this group, whose affections lean toward fresh but who’ve shown afnity for convenience, will be essential in the future. Overall supermarket sales of frozen foods approached $30.2 billion in 2014, a dip of 0.6 percent from 2013, with decreases dating back at least three years, according to Nielsen data reported in PG’s most recent annual Consumer Expenditures Study. An accelerating, overarching concern for wellness derived through informed dietary choices could play a role in reversing frozen’s fortunes and carving out a secure place for frozen foods in whole-store shopper solutions.

side by side specially designed displays, like Hussmann’s LifeLine cases, allow merchandising of complementary products in the frozen aisle.

“Outside of the obvious positive efects in-store sampling and trading out underperforming items can have, the growing movement of retail dietitians stafed in grocery stores can have a positive impact on the frozen foods aisle, if utilized well,” Shaw contends. “Grocers can make sure these knowledgeable experts are educating customers on the many benefts of frozen foods and their ability to expand usage to other meal occasions and categories.” Moreover, enlightening customers as to culinary trends and health aspects within the category, Shaw

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Frozen & Refrigerated

Category Management

adds, will enable them “to promote frozen foods to shoppers in the grocery aisles who are at the purchasing moment of truth.”

The growing movement of retail dietitians staffed in grocery stores can have a positive impact on the frozen foods aisle, if utilized well.” —Skip Shaw, NFRA

Weekly Needs Manufacturers of frozen foods can forge strategic partnerships with retailers to grow the category and overall basket ring. Brand managers at Omaha, Neb.-based CPG giant ConAgra Foods say grocers can more efectively merchandise the frozen aisle by providing solutions for consumers’ weekend and weekday needs. “During the weekend, when time is more plentiful, shoppers are looking for more involved options that they can prepare ‘homemade,’” asserts David Koehler, associate brand manager for ConAgra’s Healthy Choice brand. “For the fastpaced weekday meal occasion, consumers want the same convenience and taste they are accustomed to, but are searching for cleaner ingredient statements and less fat, carbohydrates and sodium.” Protein-heavy foods, known for their appetite satiety, are also growing rapidly, Koehler notes, “as consumers move away from large weekday meals towards a frequent small meal or snacking routine. Consumers are also demanding simplifed product sourcing and nutritional statements.” Te top trends infuencing the category are quality, freshness and convenience. “Consumers are looking for high-quality meals with homemade touches, real ingredients, and fresh fruits and vegetables that were picked at their peak before freezing to lock in the nutrients and taste,” says Matthew Giese, associate brand man-

Redefining Frozen Although sales have been lackluster in frozen foods, as reflected by the findings in PG’s annual Consumer Expenditures Study, which appeared in the July 2015 issue, manufacturers hope to inject new interest into the category by upgrading existing brands with premium distinctions, The Hartman Group reports. Research conducted by Hartman “showed that consumers shop the frozen aisle the way they choose what to eat off a menu,” Christine Day, CEO of Blaine, Wash.-based premium frozen meal provider Luvo, told The New York Times. ‘Most meals in that aisle traditionally have been designed around price, the value shopper, and that’s not what’s coming out in [the] research at all.” Bellevue, Wash.-based Hartman reports that along with frozen, which is seeing rising sales in products with a pre-

ager for ConAgra’s Marie Callender’s brand, which includes entreés and pot pies. “As the consumer cooks one of our single- or multiserve Marie Callender’s meals, or desserts like our apple pie, they are able to savor the tasty aromas that come from cooking a homemade meal and serve it fresh for themselves or their family and friends.” According to Koehler, shopper insights data indicate that consumers are seeking fresher food options and variety that goes beyond favor: “Tey want more options that don’t include your typical ‘protein, vegetables, sauce and starch.’” Tey also want improved nutritional profles and simplifed ingredient statements; many are looking to cut back on carbs without compromising on other nutritionals. ConAgra is driving growth in the “healthy premium” frozen category with its Simply Café Steamers, meals that top out at 310 calories and contain more than 19 grams of natural protein and fewer carbs than competitors’ meals. Additionally, time-saving options that are packed with protein are a real bonus for consumers, as they’re left feeling fuller longer, Koehler notes. “When you look at the Boomer consumer, they are

mium focus, consumers are interested in such distinctions within diverse food and beverage categories. “While premium M&A activity heats up, the reality is that consumers are concentrating their trade-up dollars in food and beverage far more in some categories than in others,” notes Hartman’s recent analysis, “Market Dynamics of the New Premium.” “We found that the average market share for premium sales was 12 percent, but actually ranged from 2 percent to 33 percent across the target categories.” The study also finds that consumer motivations for buying premium foods and beverages vary by category. “Indulgence, pleasure, distinction and artisanal qualities are probably stronger selling points than health claims in most premium categories, including chocolate and red wine,” Hartman reports, concluding that, in general, it’s “critical for premium offerings to sell pleasure and distinction first and foremost.”

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

Frozen & Refrigerated

Category Management

looking for more protein and less carbs in their diets for overall good health,” he says. “Unfortunately, few options currently exist that ofer all these benefts and sensible nutrition.” ConAgra and its grocery partners have done a lot of cross-merch work around dinner and other eating occasions to help

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deliver whole-store solutions that shoppers want. “Our goal is to help our customers create solutions for consumers,” Giese explains – for example, putting together Marie Callender’s lasagna and Alexia garlic bread, or a salad. “Tey are then buying solutions, not items.” ConAgra recently paired Marie Callender’s frozen pies with Reddiwip. “It’s a great example of us reaching across diferent departments in 10 states to create a customer solution that wouldn’t have existed in solely one department or the other,” he says.

Solutions Equal Sales Retailers and CPG companies must join forces to clearly communicate the value of frozen foods in delivering on shopper need states, from convenience and taste to on-trend favor profles and good nutrition. When strategically merchandised with complementary products from across the store, frozen foods can be a solution provider and a sales driver. “It’s important to stay on top of consumers’ interests, trends and conversations,” ConAgra’s Giese and Koehler agree, “as well as evolve consumers’ mindsets on the quality of categories, like frozen meals.” Meanwhile, trade groups like NFRA have “led the way in assuring that consumers understand the versatility, wholesome meal ideas, fresh favors and creative possibilities in the frozen aisle,” Shaw says. “Trough its well-trafcked Easy Home Meals website and its Cool Food Panel of foodie and chef bloggers, NFRA promotes frozen foods by themselves and as part of cross-category meal solutions, reaching consumers across multiple media platforms where they live, work and play.” PG

Fressh Food

Prepared Foods

The

Grocerant Solution Progressive Grocer ’s Grocerant Summit will serve up prepared food strategies. By Joan Driggs

GooD to Great albrecht’s Sentry Market in Delafield, Wis., highlights a fresh kitchen experience with both full- and self-serve cases for expansive hot foods, a fresh soup bar and an on-site fresh sushi station.

ecognizing that time-pressed Americans are increasingly looking for meal solutions rather than recipes, more than 50 grocery retailers will attend Progressive Grocer’s Grocerant Summit in Northbrook, Ill., Oct. 20-21, to learn how to defne their strategies and implement proftable ideas for fresh prepared foods at retail. While progressive grocers have been selling fresh prepared oferings for years, the industry now recognizes that a solid grocerant program — once a game-changer — is required to fulfll the needs

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

of smaller households and busy families alike. Unfortunately, grocerant oferings are considered by just 5.3 percent of consumers when deciding on their evening meals, and there are lots of opportunities to decide, as 70 percent of respondents to a Tyson Foods survey report that they face unplanned meals at least once a week.

Dramatic Departure Te summit will address retailers’ major grocerant pain points in the areas of stafng, assortment, marketing and operations. While grocerant oferings compete head-on with traditional foodservice, it’s a dramatic departure for grocery retailers, who must embrace new business models to succeed. Formal sessions on Oct. 20 will both lay the groundwork for why grocerant programs matter and ofer a glimpse of grocerant oferings of the future. Attendees will see what best-in-class solutions look like, which trends are driving demand for fresh prepared solutions, the consequences of failure and how retailers can communicate efectively to gain a seat at the new American dinner table. Day two will focus on practical implementation and winning strategies for retailers. Notable presentations will include strategies for successful recruitment, retention and training; ergonomics and engineering of space for both grocerant employees and customer engagement; a panel of profession-

Fresh Food

Dinner menu The Standard market’s upscale bags align with the banner’s positioning.

Prepared Foods

ally trained retail chefs sharing what they bring to grocery retail; and tips for creating a culinary path that aligns with your banner. Another key feature of Grocerant Summit will be the Grocerant Solution Center, including demonstrations, food preparation, and snacks and meals to inspire retailers as they build their grocerant programs. Further, Grocerant Summit Platinum Sponsors will demonstrate their thought leadership through presentations on how to make the most of limited space, research into opportunities and examples of creative strategies for overcoming challenges with high-priced and premium products, and valuable research on the consequences of failing to deliver against shopper expectations, among many other key topics. Te full agenda is as follows: Why Grocerant Matters: Stagnito Business Information President and CEO Harry Stagnito welcomes attendees and provides a brief overview of the rise of grocerant programs.

Grocery’s Place in the Changing Foodservice Landscape: Penny Anderson, director of Te NPD Group, pulls from the company’s proprietary CREST data to serve up a view of foodservice eating occasions based on feedback from the people actually doing the eating. From dayparts and venues to orders and motivations, Anderson lays out where the opportunities lie. Consequences of Failure (sponsored): Tyson Foods Inc. VP of Marketing, Deli, Eric Le Blanc illustrates the importance of connecting with consumers before they enter the grocery store — and while they’re still deciding what to have

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Fresh Food

Grocerant risinG retailers compete head-on with restaurants through dine-in and takeout options.

Prepared Foods

for dinner. As important as the pre-shop connecting is, however, it’s in-store execution that determines success or failure. Le Blanc reveals the real cost of failing to address three key grocerant elements: product issues, stafng issues, and general issues such as cleanliness, wait and product readiness. Dinner in America: Christopher Brace, CEO of Shopper Intelligence, explains that dinner in America isn’t what it used to be, and only understanding shoppers’ current emotional connections to the meal will help retailers gain a seat at the dinner table. Brace helps retailer attendees defne their growth objectives and develop strategies to create the right story for the desired audience. Out of the Box: How Subscription Services Inspire Grocerant Creativity: Lifehack. Paleo. All-natural. Farm-to-table. Personalized diet. Tese are just a few of the buzzwords that are driving consumers to choose subscription meal services. In this interactive session, Susan Weller, principal of SW Branded Concepts, guides attendees as they discover the “winning” elements of subscription meal services, how they might inform creative foodservice concepts and what elements could be applied in their own operations — almost immediately. Weller follows up on Tuesday with ideas generated from her frst interactive session. People Platform: Recruitment, Training, Retention: All grocery retail is challenged by talent, but it’s particularly challenging for grocerant concepts because optimally, team members will score high in social engagement. Janet Hofmann, principal of HR Aligned Design, tells attendees how to attract, train and retain the best for success. Ergonomics & Engineering: The Secret Ingredients to Efficient, Profitable Retail Foodservice: Juan Martinez, principal of Profitality, takes attendees through an “employeecentric” approach to simplifying execution to optimize labor efciency, streamline customer service and facilitate menu innovation, all while improving economic value. Te session promises actionable strategies that can be implemented immediately for some quick wins. The Sous-vide Solution (sponsored): Sous-vide might just be the best-kept secret of savvy commercial kitchens — until now. SugarCreek VP of Business Development Lance Layman illustrates this emerging cooking technology, which delivers product consistency and food safety while saving time and labor. Additionally, Millie Nuno,

100

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

senior market manager, food at Ampac, serves up customer-friendly meal solution packaging. Grocerant Footprint: Adaption and Evolution (sponsored). In the swiftly evolving grocerant segment, grocery retailers must adjust to consumer trends, often within a fxed footprint. Healthier food trends often require new technologies and new levels of food safety. Angelo Grillas, director of marketing at Electrolux, takes attendees through case studies that highlight optimal workfow, emerging technologies and the company’s culinary expertise. 5 Critical Factors for Executing a Successful Grocerant (sponsored): Beyond refrigerated display cases and refrigeration systems, Hillphoenix helps retailers execute holistic store design, from food programs to concepts, and employee training to décor. Henry Pellerin, VP of marketing at Hillphoenix, discusses the fve critical factors needed to execute a successful grocerant. Items covered include menus, layouts and fow, versatility/fexibility of equipment, merchandising, and employee talent. Pellerin advises how to have a grocerant program that captivates the customer, from breakfast through evening snacks, with fresh products. Beef: Adding — and Creating — Value (sponsored): Beef sales bring more value to the basket, but retailers face high cost and preparation hurdles when selling beef as part of their fresh prepared food oferings. Meghan Pusey, of Te Beef Checkof, shares research that identifes opportunities and unveils successful examples from retailers that have overcome these challenges with creative strategies that can work in the deli prepared perimeter. Forging Your Culinary Path: A successful grocerant program aligns with a banner’s overall mission and customer base, but before delving into menu development and cost analyses, Chef Steven Petusevsky, principal of Culinary Innovation for the Food Service Industry, provides retailer attendees with the key strategies they’ll need to embrace to create a new business model. PG

Drive higher sales this holiday season by engaging Millennial home bakers.

Sweet Opportunities C

ooking and baking are more than household chores for today’s young adults— they are art forms and ways to express themselves, say 92% of the 79 million Millennial consumers, according to Ypulse market research firm.

Reaching key Millennial consumers and their Baby Boomer counterparts during the holiday baking season increasingly means leveraging digital and social media, where these shoppers are actively looking for baking ideas and recipes. Domino Foods, Inc. is supporting its Domino® Sugar and C&H® Sugar brands with innovative social media initiatives this fall, helping to drive shoppers to the baking aisle for the most frequently purchased home baking product—sugar—and encouraging incremental holiday baking ingredient sales.

Millennial consumers who say they frequently look up recipes: On websites On social media Offine (cookbooks, catalogs, etc.) Source: Ypulse 2014

57%

Millennials who have tried a recipe they saw posted on social media

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G et a S nowman B uilding K it :

• recipe • cookie template • decorating instructions • printable gift box & gift tags Sign up at chsugar.com/snowman

G et a S nowman B uilding K it :

are a must!

Preheat oven to 350°F. Sift together four, baking powder and salt; set aside. In a large bowl, beat the softened butter with the sugar until fuffy. Add eggs and vanilla, beat well. Stir in dry ingredients, a third at a time, until all is incorporated for a smooth, stiff dough. Using waxed paper lightly dusted with powdered sugar, roll out a portion of the dough into a 1/4 inch thick rectangle. Press cookie cutter of desired shape into dough. Trim away excess dough. Gently lift cut-out cookies from waxed paper and place on greased cookie sheets. Repeat rolling and cutting until all dough is used. Bake at 350°F for 10 minutes or until cookies are frm and light golden brown. Remove from cookie sheet and allow to cool completely before decorating.

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• recipe • cookie template • decorating instructions • printable gift box & gift tags Sign up at dominosugar.com/snowman

4 cups sifted all-purpose four (sift four before measuring) 2 tsp baking powder 1 tsp salt 1 1/2 sticks butter or margarine, softened 1 1/2 cups Domino® Granulated Sugar 2 eggs 1 1/2 tsp vanilla extract

Cozy mitt

are a must!

Preheat oven to 350°F. Sift together four, baking powder and salt; set aside. In a large bowl, beat the softened butter with the sugar until fuffy. Add eggs and vanilla, beat well. Stir in dry ingredients, a third at a time, until all is incorporated for a smooth, stiff dough. Using waxed paper lightly dusted with confectioners’ sugar, roll out a portion of the dough into a 1/4 inch thick rectangle. Press cookie cutter of desired shape into dough. Trim away excess dough. Gently lift cut-out cookies from waxed paper and place on greased cookie sheets. Repeat rolling and cutting until all dough is used. Bake at 350°F for 10 minutes or until cookies are frm and light golden brown. Remove from cookie sheet and allow to cool completely before decorating.

4 cups sifted all-purpose four (sift four before measuring) 2 tsp baking powder 1 tsp salt 1 1/2 sticks butter or margarine, softened 1 1/2 cups C&H® Granulated Sugar 2 eggs 1 1/2 tsp vanilla extract

Cozy mitt

To boost consumer website trafic and inspire home bakers this holiday season, both the Domino® Sugar site (www.dominosugar.com) and the C&H® Sugar site (www.chsugar.com) will showcase a colorful new Snowman Building Kit promotion, which includes a sugar cookie recipe, a cookie template, decorating instructions and a printable gif box and gif tags.

dominosugar.com/snowman

In addition, an animated digital representation of the snowman cookies will bring the concept to life on Domino Foods’ multiple social media platforms:

Facebook for consumer

Pinterest for links to

community with recipes, baking tips and featured holiday postings

recipes based on seasonal trends and baking techniques

Twitter for real-time engagement, baking tips and recipes

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Instagram for photos that capture the fun of baking and as a way for consumers to share their own baking photos

YouTube for videos that teach and inspire home bakers

For the younger Millennial baking set (ages 18 to 29), Domino Foods’ Confectionista Project blogs— each written by a 20-something professional with no baking background—will feature special holidayrelated posts as each of the bloggers bakes weekly throughout the holiday season.

Digital baking solutions for the holidays The Domino® Sugar website (www.dominosugar.com) and the C&H® Sugar website (www.chsugar.com) offer a variety of fun holiday projects designed for novice and experienced home bakers alike: Domino® Sugar 1001 Cookie Starter Mix recipe base for gingerbread cookies, sugar cookies, fudge balls, brownies and more C&H® Sugar Holiday Cookie Swap hosting tips including downloadable holiday recipe labels and an opportunity to post party photos on the C&H® Sugar Facebook page Domino® Sugar Frosting Starter recipe base with a myriad of favor and color options C&H® Sugar All-in-One Cake recipe combining a 2-pound bag of powdered sugar with other readily available ingredients to create both cake and frosting Domino® Sugar Holiday Cookie Decorating Party ideas, recipes and printable tools for hosting a party

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Where to fnd Domino® Sugar and C&H® Sugar brands online Domino® Sugar

C&H® Sugar

https://www.facebook.com/dominosugar

https://www.facebook.com/CandHSugar

https://twitter.com/dominosugar

https://twitter.com/candh_sugar

http://www.pinterest.com/realdominosugar/

http://www.pinterest.com/candhsugar/

http://instagram.com/dominosugar

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http://www.youtube.com/RealDominoSugar

http://www.youtube.com/user/RealCHSugar

Domino Foods, Inc. sells the nation’s best known sugar brands—Domino® Sugar in the East, C&H® Sugar in the West and Florida Crystals® Sugar nationally. Domino Foods, Inc. is part of ASR Group, the world’s largest refner of cane sugar and the largest marketer of refned sugar in the United States. Contact: Nancy Barbee Marketing Manager nbarbee@asr-group.com ©2015 Domino Foods, Inc.

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2015 Retail Produce & Floral Review

Fruits of Labor

Pay Off Big Locally grown, organic and pre-cut enjoy explosive growth in a market hungry for better-for-you food. Research by Debra Chanil/Analysis by Bruce Horovitz

he produce sections of America’s grocery stores are being turned upside-down and inside-out, thanks to explosive growth in the sales of fruits and vegetables. Tink of it as the nation’s grocers intentionally slipping on a highly proftable banana peel. Some stores are even hauling their insides outside — literally. At six Super King Markets, produce of all kinds — from melons to mangoes to citrus — is being creatively merchandised in front of the stores. “Tis creates a farmers’-market atmosphere before the customer even enters the store,” explains Daniel Barth, general manager of the chain, whose supermarkets are in Los Angeles and California’s Orange County. “Tis is especially true for seasonal merchandise.”

October 2015 | progressivegrocer.com |

105

2015 Retail Produce & Floral Review Produce SaleS change

Produce Survey Methodology

12 Months Ending July 2014

Increased

Decreased

31.0%

Stayed the Same

61.0%

4.3%

neT change (%)

8.0%

Eating produce is linked to better health. That’s why the produce section is going to continue to increase in importance.”

eXPecTed SaleS change For ToTal 2015 VerSuS 2014 2015 58.3%

39.6%

4.0%

neT change (%)

2.1%

—Daniel Barth, Super King Markets

2014 70.7%

26.8% 2.4%

3.2%

neT change (%)

Source: Progressive Grocer Market Research, 2015

Changing Consumer To say that the produce section is red-hot at grocery stores nationwide is an understatement. Produce is white-hot —and steaming ahead. Produce sales jumped a healthy 4.3 percent during the frst six months of 22015, according to Progressive Grocer’s 2015 Retail Produce & Floral Review, which surveyed 100 grocers nationally. For the full year, grocers project that produce sales will increase 4 percent, which compares with 2014’s actual increase of 4.4 percent over 2013, boosting annual produce sales in 2014 to $56.1 billion.

106

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

In August 2015, Progressive Grocer fielded a study to grocery retailers involved in produce operations for their companies. A total of 100 responding retailers are included in these survey results. Among these retailers, 53 percent operate one to 10 stores, while 47 percent are from chains with 11 or more stores. Respondents represent an average of 125 units. A total of 63 percent of respondents are produce category managers, merchandisers or buyers; 19 percent are owners, CEOs or presidents; 12 percent are store managers; and 6 percent are produce headquarters executives.

Behind all of this is a changing consumer not only more concerned about healthy eating habits often linked to eating more fresh fruits and vegetables, but also increasingly interested in where the produce comes from and how it’s been grown. “Eating produce is linked to better health,” says Barth. “Tat’s why the produce section is going to continue to increase in importance.” It’s not so much a revolution as a national evolution of the produce section from a sleepy corner of the store to a vibrant hub where shoppers gather in search of fresh groceries that they feel good about purchasing. ch “Consumers are passionate about produce — particularly locally grown and organic produce,” says Jef Tomassetti, Continued on page 110

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Q&A

Talking with…

Bob DiPiazza President, Sun Pacifc

Victoria Nuevo-Celeste Vice President of Marketing, Sun Pacifc

Produce Profts: Sun Pacifc Produce Brands Grow Success for Retailers Founded in 1969, the Pasadena, Calif.-based Sun Pacifc® is the owner of America’s most preferred brand of mandarins, Cuties®, and the largest kiwi fruit and navel orange grower/shipper in North America, the second largest producer of tomatoes in California, and renowned for their exceptional quality, Air Chief label table grapes.

looking for non-GMO products. Both Cuties and Mighties are verifed non-GMO by The Non-GMO Project, and that is very attractive to our retail customers.

Progressive Grocer: What are consumers looking for in fresh produce, and how have their expectations and demands shifted/evolved in recent years? Bob DiPiazza: When it comes to produce, consumers want options that have exceptionally high quality and really delicious favor. And now more than ever, they also want convenience that fts their busy lifestyles – produce that is easy to buy and easy to eat. That’s what we continue to help our retailers deliver with our high-value branded fruit – Cuties, Mighties Kiwi, and now Vintage Sweets heirloom navel oranges – to help them meet consumer demand and deliver higher profts for their business. Victoria Nuevo-Celeste: Mighties Kiwi is a perfect example of this. We use a proprietary ripening process to ensure Mighties arrive at grocery stores ‘ripe and ready’ so there is no guesswork for consumers in trying to know when it is ready to eat. The branding we have done for this product also makes is really approachable for consumers. Kiwi has always been super nutritious, but some people have never been quite certain what to do with it. Our packaging makes it clear – you can simply cut, scoop and eat Mighties. The consistency of the product combined with the brand has translated into retailer success: last year Mighties comprised 40 percent of all U.S. kiwi sales and contributed to the 13.4 percent growth of overall kiwi sales in the U.S. Another trend is that consumers are increasingly

108

PG: As the holidays approach, how are you promoting produce for holiday gifts and entertaining? BD: We are debuting Vintage Sweets heirloom navel oranges that we think will be very popular with consumers for the holidays. These oranges are harvested from Sun Pacifc’s old line orange groves in California. Each individual orange goes through a selection process that combines sensory aspects like touching, feeling and smelling, with science that tests the brix level of each piece of fruit for high sugar content to ensure the characteristics for juicy, sweet perfection. It is beautiful, super-sweet fruit that is gift-worthy – especially the 6-count shrink wrapped trays. Vintage Sweets are also available in bulk and 3-pound Giro bags. VN: We also share a lot of holiday ideas with consumers via our social media channels – from recipes to crafts. For example, Cuties add beautiful color to your holiday table when displayed in a favorite bowl, and they are also the perfect predinner snack for guests waiting for the holiday feast to begin. Visit www.sunpacifc.com for more information.

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

America prefers the original. And for good reason: • Cuties sales per store per week are the highest in the nation, making Cuties the fastest-selling ®

mandarin in America.* • Cuties is the #1 consumer-preferred brand of mandarins with the highest quality perception.** • Cuties was the frst “whole fruit” healthy choice to be ofered in over 14,000 McDonald’s

restaurants during season 2014–15, and will be offered again this coming season. • Sun Pacifc and our grower and customer partners spend as much as anyone in the fresh

produce industry on marketing support for Cuties. • Sun Pacifc will be bringing several million more cartons of Cuties to

market in the 2015–16 season to meet the high consumer demand. So stock your shelves with Cuties. Because from orchard to store shelf, the sweetness and quality of Cuties can’t be beat.

PMA Booth #415 | CutiesCitrus.com | 213-612-9957 *Nielsen Perishables Group FreshFacts®: Total U.S. Mandarin Winter Season 2014-15. Cuties $/store-d/week vs. competition. **Strategic Consumer Research, Inc. ’14-15 Brand Equity Study.

Cuties® is a registered trademark of Sun Pacifc.

2015 Retail Produce & Floral Review Continued from page 106

director of produce and foral at 15 Buehler’s Fresh Food stores in central Ohio. A hefty 12.7 percent of produce sales nationally were organic in the frst half of the year, according to the survey by PG. Perhaps that’s why Wooster, Ohio-based Buehler’s now ofers nearly 100 organic produce selections. “We make sure our customers don’t have to go to the organic

Produce oPerations current Year average Produce dePartment (square feet)

4,500

average total store (square feet)

31,900

Percent of total store

14.1%

full-time equivalent Produce dePt. emPloYees

4.6

gross margin Percent

34.8%

net Profit Percent

25.6%

Source: Progressive Grocer Market Research, 2015

specialty store,” says Tomassetti. Organic produce sales are also growing at Super King Markets, according to Barth. Out of 300 produce items in the store, roughly 35 are organic. Te store plans to expand its organic section and its organic oferings later this year, he notes. About 10 additional organic produce items have been added at the Jay-C Foods Store, in Brownstown, Ind., notes Produce Manager Logan Doane. “You’d think the younger crowd would be buying it, but it’s mostly older people trying to be healthier,” he says.

Local Express Popular as organic is at Buehler’s, even more popular are “locally grown” products, asserts Tomassetti. “Customers are buying into locally grown,” he says. Te chain defnes “local” as any produce grown in the state of Ohio. Some stores strategically place “locally grown” signs next to Ohio produce — sometimes even featuring photos of the farmers or where the produce comes from. “We’ll show pictures of trucks coming back from local auctions,” afrms Tomassetti. In social media blasts to customers, Buehler’s also will occasionally identify the farm and farmer who supplied the produce. Cincinnati-based Kroger, which owns Jay-C, is broadly buying more locally grown produce, Doane points out. “When it’s local, it sells a lot better,” he says. But Super King Markets is hesitant to slap the term “locally grown” on products, because of the confusing defnition of the term. “Most consumers think that ‘locally grown’ means it came from within a few miles of the store,” contends Barth. Instead, he says, the store puts a “California grown” sign by some produce. In Search of Value At the same time, consumers both young and old are increasingly purchasing value-added produce such as pre-cut fruit or pre-washed veggies. It appears that manufacturers have successfully tapped into the need for value-added vegetables,

110

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

2015 Retail Produce & Floral Review Produce SaleS by Segment 2.9%

2.4% 2.7%

3.1%

45.8%

43.1% Source: Progressive Grocer Market Research, 2015

and shoppers are biting. Saless of value-added produce were up more than 10 percent, and volume olume was up more than 8 percent ffor the h 52 52-weekk period i d ending June 27, 2015, according to Schaumburg, Ill.-based Nielsen Perishable Group Fresh VegetableS Facts. Te average price Fruit change compared with a nutS year ago is just 1.7 perreFrigerated Salad dreSSingS and diPS cent (data not shown). Premium JuiceS Value-added fruit also all other (including exotics, mixes, etc.) continues to see gains, with dollar sales up 7.5 percent. Volume is up a mere 1.1 percent, however, and the average retail price change is 6.3 percent (data not shown), indicating that price increases are afecting purchases. Te biggest driver in value-added sales: busy Millennials. Cut fruits and veggies account for more than 10 percent of produce sales at Buehler’s this year, versus

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Q&A

Speaking with…

Dionysios Christou Vice President Marketing, Del Monte FreSh ProDuCe

Del Monte Fresh Produce Keeps it Simple with Pure earth™ Juice Eighteen years after revolutionizing the fresh pineapple category with the introduction of the Del Monte Gold® Extra Sweet pineapple, Del Monte Fresh Produce is ready to do the same in the refrigerated juice category with the company’s newest product, Pure Earth™ juice. Progressive Grocer: What is Pure Earth™ juice made of? Dionysios Christou: We use Del Monte Gold® pineapples, hand-picked at the peak of ripeness from our farms in Costa Rica, and juice them with the fnest fruit—no fllers or concentrate. Pure Earth™ juices are fash pasteurized to maintain optimal favor, color, and nutritional benefts. All of the ingredients can be found right in the produce section. PG: What favors does the juice currently come in? DC: Pure Earth™ is available in four favors: 100% Pineapple Juice, 100% Pineapple/Banana/Coconut Juice, 100% Pineapple/Blueberry/ Blackberry Juice, and 100% Pineapple/Lime Juice. All come in our Grab-N-Go 12-oz. bottle and our Family Size 32-oz. bottle.

PG: How have consumers responded to Pure Earth™? DC: Consumers are excited about the exceptional taste of these products, which are made with only the fruit listed on the front of the label and without fller juices, preservatives or added sugar. Feedback from retailers who carry the line has also been overwhelmingly positive. PG: What is Del Monte Fresh Produce doing to market the juices? DC: We are supporting the launch of the juices with in-store samplings and demos. We also provide point of purchase materials and recipe cards to educate consumers on ways to use Pure Earth™ juices. Del Monte Fresh also utilizes social media to generate consumer awareness of and excitement about Pure Earth™. PG: What’s next for Pure Earth juice? DC: Over the next few months, we will support the Pure Earth™ launch by hosting large sampling events at trade shows. We will also communicate the unique taste of Pure Earth™ juices in social media and other consumer focused communication channels.

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2015 Retail Produce & Floral Review

Floral SaleS Change

about 8 percent last year, Tomassetti estimates. “No one wants to take the time to cut it up themselves,” he explains. “Some people even say they don’t know how to cut things like pineapples — so they pay us to cut it.” But the biggest buyers of value-added fruits and veggies at Jay-C are older folks, notes Doane. It’s not just about convenience, he says, but also to avoid waste. Tat’s why some will pay $3.99 for a pre-cut quarter-watermelon instead of the same price for an entire uncut watermelon. pric As a result of this growing consumer interest in produce, some stores are even boostes ing the size of their produce departments in and ordering produce they an never stocked before. neve

Increased

Decreased

Stayed the Same

43.7%

49.3%

4.6%

net Change (%)

7.0% Source: Progressive Grocer Market Research, 2015

T Taking Up Space Findings from PG’s proprietary survey, F along with observations gleaned from new al store information, indicate that the space that st ggrocers devote to produce is also increasing, illustrated by merchandising produce outside il Continued on page 118

ONLY WHOLESUM USES A

THERE’S A REASON

FARMTOFAMILY APPROACH TO

WE’RE ONE OF NORTH

PRODUCE, BUILT BY THREE

AMERICA’S FASTEST

GENERATIONS WORKING TOGETHER.

GROWING ORGANIC PRODUCERS.

AS A FAIR TRADE CERTIFIED™ PARTNER, WHOLESUM

HEALTHY LIVING IS NOT JUST

WE RECOGNIZED THE IMPORTANCE OF SUSTAINABLE

ENSURES THE WORKERS WHO GROW OUR PRODUCE

WHAT WE DO; IT’S WHO WE ARE.

FARMING PRACTICES DECADES AGO. THAT’S WHY

RECEIVE A PORTION OF OUR PROFITS. ALONG WITH

IT’S A DIFFERENCE YOU’LL TASTE IN OUR

WE DO OUR OWN COMPOSTING TO REPLENISH THE

EDUCATION AND HEALTH CARE, THEY ALSO GET FREE

VEGETABLES: A COMMITMENT THAT STARTS AT THE

SOIL, USE SOLAR ENERGY TO HELP POWER OUR

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WITH COMMUNITY SUPPORT.

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

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

•

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

2015 Retail Produce & Floral Review SaleS by branded VerSuS unbranded Unbranded

National Brands

Store Brands

VegetableS

FruitS

15.1%

17.1%

36.5%

32.9%

48.4%

50.0% 50

Source: Progressive Grocer Market Research, 2015

A DV ER TO RI AL

Talking with Eric Frank President, Tosca It was recently announced by the USDA & EPA that food waste needs to be reduced by 50% by 2030. What impact can reusable plastic containers (RPCs) have on this initiative? Eric Frank: According to the National Resources Defense Council, as much as 40% of food is wasted in the U.S. each year. Waste can happen at any number of points along the food supply chain: on farms; during processing, handling, and storage; during transport; and/or at retail. Reusable plastic containers, or RPCs, can be instrumental in helping to reduce food waste because their durability provides much better protection of what’s inside. When product arrives in better condition with little to no damage, there is less shrink and, therefore, less food waste (less is thrown away). All in all, RPCs allow for a much better journey from farm to store. Tell me about your recent partnership with Food Cowboy. Another creative approach to reducing food waste is using mobile technology to connect those in need with those who have something of value. Food Cowboy is a free

application that growers and shippers can use to divert rejected or refused product from retailers to food banks instead of landflls, using RPCs to transport the product. We’re excited to partner with Food Cowboy and offer an innovative solution to food waste.

Are there other wastes RPCs eliminate? In addition to helping to reduce food waste, RPCs can reduce packaging waste by keeping single-use packaging from entering the supply chain. In fact, for every RPC that’s used, the equivalent of approximately 1 pound of corrugated is kept out of the supply chain. At Tosca, we have prevented

more than 465,000 tons of one-way packaging from entering the supply chain by working with national grocery retailers, growers/suppliers, and food manufacturers. We’re proud that we can help our customers reduce their environmental impact while delivering higher quality products to their customers. This is a win-win for our customers, their customers, and the environment. RPCs can also reduce wasted labor hours at distribution centers (DC) and in-store, because they are a more effcient packaging solution. With their stacking and interlocking capabilities, RPCs can be used to effectively build individual store orders at a DC. And they can function as retail-ready packaging, which means that when product is shipped, there is less handling and less labor required to restock store shelves. For example, the one-step SmartWall™ design of our egg RPC allows eggs to go directly from shipment to shelf in one step. In short, RPCs provide an opportunity to take your supply chain to a better place and eliminate waste - product waste, packaging waste and labor waste.

October 2015 | progressivegrocer.com |

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2015 Retail Produce & Floral Review Continued from page 114

traditional departments and increasing square footage among new builds. At Buehler’s, some stores have increased produce space, says Tomassetti, and others are taking over patio space with seasonal fruits and veggies in the spring, summer and fall. At Rush City Foods, in Rush City, Minn.,

there’s growing consumer demand for cilantro, but it’s not always available, according to Produce Manager Amy Benolken. “Sometimes we have to put out signs that say: ‘Sorry, no cilantro’,” she says. Cotton Candy grapes, at $3.99 a pound, are outselling $1.99-a-pound conventional grapes at the Jay-C store in Brownstown. Te store’s consumers also are increasingly asking for jalapeños, some to make raspberry jalapeño jelly, says Doane.

Produce Shrink current Percent of Produce Shrink 2015 2014 2013 Increased

5.7% 5.4% 5.1% Decreased

Stayed the Same

2015

8.5% 11.3%

80.3% 2014

27.5% 47.5%

25.0% 2013

30.0% 45.0% 25.0% Source: Progressive Grocer Market Research, 2015

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2015 Retail Produce & Floral Review iew Produce dePartment category Performance nce Total U.S., 52 Weeks Ending June 27, 2015

Dollars per Store/Week Percent Change vs. Year Ago

Volume e per Store/Week Week Percent rcent Change ge vs. Yearr Ago

$4,153 2,995 2,947 2,727 2,698 2,210 1,272 1,213 974 755

4.3% -2.6 7.5 -2.4 -1.9 7.5 9.1 0.8 -0.4 36.4

4.5% 0.5 4.4 -4.6 4.6 -1.3 1.3 1.1 12.9 2.9 6.5 -6.6 6.6 60.3 0.3

$3,718 2,640 2,539 1,828 1,692 1,527 1,436 1,312 893 854

8.7% 2.8 -3.1 1.6 10.1 -2.1 3.4 2.6 -2.1 1.9

7.0% -0.5 -2.4 -0.4 8.3 -3.4 2.1 -1.2 -3.1 0.0

Dollars per Store/Week

Category

Fruits Berries Apples Citrus Grapes Bananas Value-added Fruit Avocados Melons Stone Fruits Cherries Vegetables Packaged Salad Tomatoes Potatoes Cooking Vegetables Value-added Vegetables Onions Peppers Lettuce Carrots Mushrooms

Meanwhile, at Buehler’s, sales of Honeycrisp apples at $3.99 per pound are outpacing the former top-selling Gala apples at $1.99 per pound, says Tomassetti. “We’ll just put them on the end cap and leave them there all season.”

Not Just Produce Some grocers are devising ways to sell more produce in other areas of the store — like the Source: Nielsen Perishables Group FreshFacts lemons and limes that Buehler’s sells by the seafood section, and bananas in the cereal aisle. But increasingly, says Tomassetti, non-produce products are fnding their way into the produce aisle to get in on the action. For example, the chain places a display of Reddi-Wip next to the berries and puts some seasonal beers and wines in its foral department. Earlier this summer, Buehler’s sold hundreds of $15 cherry pitters only because it merchandised them right WHEN IT COMES TO MUSHROOMS next to the cherries, Tomassetti says. WE ARE AT THE SUMMIT. Further, the grocer sold hundreds of corn holders by placing them beside Giorgio Fresh, America’s Favorite Mushroom Company, welcomes you to visit us at the Fresh the sweet corn. Summit in Atlanta. Tere’s also a quiet countertrend Come get a close up look at our latest products and learn more about our ever-expanding range that could impact produce sales at some of fresh, exotic and organic mushrooms. You’ll also learn about our commitment to sustainable supermarkets: home gardening. agriculture and how we are innovators in Vendor Managed Inventory which benefts our Folks know that it can be a lot customers’ bottom line. If you’re looking for an informative and interactive experience at the cheaper to grow produce at home than Fresh Summit, you can’t pick a better booth than Giorgio Fresh. to buy it from the grocery store, says Benolken at Rush City Foods: “To Stop by Booth 447 at the PMA Show. save money, some people just want to do it themselves.” But that’s still a minority of conGiorgio Fresh Co. 347 June Avenue, Blandon, PA 19510 sumers. Most of the nation’s shoppers 800.330.5711 | www.giorgiofresh.com arrive at grocery stores increasingly prepared to load up on fresh produce, but the key challenge for thousands of grocery stores nationwide is, who’s Equal Opportunity Employer ripe for action? PG ®

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

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Produce Category Spotlight

Fresh Food

Totally

Tuber

Innovative introductions and preparations spark interest in all sorts of spuds. By Jennifer Strailey

otatoes are a dietary mainstay in cultures around the globe. Nutritious, versatile and satisfying, they have long been the culinary backbone of mealtime. But despite our fondness for this time-honored vegetable, somewhere along the way, consumers began to fnd potatoes predictable. To spring shoppers from this epicurean ennui, industry organizations, supermarkets and suppliers alike are bringing panache to the potato category through inspired campaigns and favorful new product introductions. Variety, more pronounced than ever before, is further fueling sales. Value-added products, petite potatoes, organics and a colorful array of taters are sparking

renewed interest and enthusiasm in the category. “Over the latest 52 weeks ending June 27, 2015, there were some bright spots in the potato category, including increases in sales of specialty potatoes like medley packs, purple and yellow varieties, and growth in both more-than-10-pound and 8-pound package sizes,” notes Sarah Reece of the Denverbased United States Potato Board (USPB). “We continue to see good growth in organics, while petite potatoes continued to increase their share of the category, with growth in both volume and value.” According to the USPB’s 2015 “Attitudes and Usage” study, potatoes are the most popular starch, served signifcantly more often than rice, pasta or other vegetable dishes. Despite their popularity and recent sales gains, however, the overall potato category saw

The campaign encourages consumers to let their imagination run free, since there is no limit to cuisine, flavors or preparations that can be explored with potatoes.” —Kim Breshears, United States Potato Board

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Fresh Food

Produce Category Spotlight

a decline of 4.2 percent in dollars and 1.6 percent in volume sales for the 52 weeks ending June 27, according to Nielsen Perishables Group FreshFacts. Will the spate of spud-related campaigns and new product introductions help taters gain more traction in 2016?

Recipe Revolution Tis fall, the USPB is launching a campaign that seeks to recast potatoes from a supporting player to a star of the culinary stage. With a focus on creative preparations, the campaign will target a group the board calls “food enthusiasts.” “Food enthusiasts are unique in that they want to be involved with food and cooking as a social and creative outlet,” explains Kim Breshears, USPB marketing program director. “Tey are very visually engaged with food, searching for recipes from a variety of sources to use as a launch pad for experimentation.” Trough a national consumer segmentation study, the USPB found that food enthusiasts represent a signifcant percentage of the population, and are defned by their love and overall involvement with food, as well as their desire to explore culinary creations from across the globe. Te board’s new consumer marketing campaign “celebrates the culinary wonder of potatoes,” says Breshears. “Te campaign encourages consumers to let their imagination run free, since there is no limit to cuisine, favors or preparations that can be explored with potatoes.” As part of the campaign, the USPB is creating new recipes featuring global favors and preparation techniques. “Ethnic/street-inspired favors and cuisines are the leading trend in foodservice,” observes Breshears.” Ethnicinspired items are prominent across breakfast, appetizers, main dishes and kids’ dishes, and are being embraced at home as well. Potatoes are excellent favor carriers and work with any cuisine.” International Idahos Tempting tater recipes are equally important to the Idaho Potato Commission (IPC), in Eagle, Idaho. Te IPC’s searchable recipe database features more than 1,000 ways to prepare potatoes, from comfort foods to dishes with international fair.

AdvertOrIAL

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. October 2015 | progressivegrocer.com |

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Fresh Food

Produce Category Spotlight

Te commission recently upgraded its website with a Pinterest-inspired design that now includes luscious-looking photos of potato dishes from around the world. Tis past summer, the IPC added 10 new Latin-inspired potato salad recipes to its database, which also features heart-healthy and gluten-free categories. According to the commission, since the launch

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of the website, more than half of all visitors have spent time perusing potato recipes. “Consumers, particularly Millennials, are learning more potato preparations, and they’re more interested in food in general,” observes Seth Pemsler, VP retail/international for the IPC. Specialties and seasonal introductions are also generating consumer interest. “Historically, the coasts were more innovative with specialty varieties, but that’s changing,” asserts Pemsler. “All throughout the country, we’re seeing lots of diferent potatoes on the shelves. Te trend is more innovative, new potato products.” Last month, the IPC wrapped up its fourth installment of Te Big Idaho Potato Truck Tour. Te promotion, which features a giant Idaho spud on wheels, took the Idaho potato message across the country, covering some 22,000 miles, and also had a charitable component. According to Pemsler, the IPC has committed to a ffth year of the tour, which will begin April/May 2016. In conjunction with the campaign, the IPC ofcially launched a national television ad campaign on Oct. 1. Te campaign features Mark, billed as “A Real Idaho Potato Farmer,” searching for his truck. Te IPC is running the TV spots on the Food Network and during CNN news programs. Additionally, earlier this month, the commission introduced a Buy, Get, Give coupon promotion that invites consumers to buy any two Country Crock 45-ounce spreads and receive a free bag of Idaho potatoes up to $2. Te IPC will give a bag of potatoes to Feeding America for each coupon redeemed up to 40,000 5-pound bags. Te promotion runs through Nov. 30.

Small Spuds a Big Hit As its name suggests, Te Little Potato Co., in Edmonton, Alberta, knows something about petite potatoes. CEO and creamer potato expert Angela Santiago is especially excited about the company’s newest introduction, Chilean Splash. Originally bred in Chile, the variety features a striking bright-purple skin and yellow fesh with purple streaks. Te company describes the new potato as well balanced, with a slightly exotic favor.

Merchandising and Signage Te Little Potato Co. is also launching a new and improved Tree Cheese microwave-ready creamer potato product. Te 1-pound package contains fresh creamer potatoes and an all-natural seasoning packet. Te potatoes can be prepared in just fve minutes. In addition to launching new products that help families to make favorful and fresh produce in a fash, Te Little Potato Co. is committed to encouraging families to cook together. Its recently introduced Little Chef program focuses on culinary tips and recipes designed to appeal to children and their families. “Families don’t have a lot of time to cook together,” observes Santiago. “It’s about creating memories in the kitchen. Studies show that kids who are encouraged to cook and eat healthfully at a young age will continue to do so later in life.”

With more color, varieties and sizes than ever before, how can supermarkets capitalize on the increasingly dynamic potato category? “We recommend that retailers merchandise all potatoes together to showcase the full range of offerings available,” says Sarah Reece of the Denver-based United States Potato Board (USPB). Within this merchandising strategy, potatoes should be organized by type and size, as opposed to bag and bulk, she adds. To make the most of specialty potatoes, place them first in the shopper traffic flow to generate impulse purchases, advises Reece. “Potatoes should never be displayed on the wet rack, because misting can cause the potatoes to break down faster,” she warns, adding, “We also recommend that retailers merchandise potatoes outside the produce department with complementary meal elements to create additional awareness.” When it comes to signage, the USPB has found that educating shoppers makes a difference. “Signage should provide consumers with potato preparation ideas and nutritional benefits, including meal solutions with specific recipes,” notes Reece. “It’s important to educate shoppers on the differing qualities of potato types, celebrating their uniqueness and encouraging the trial of new/additional types.”

Call our sales team for more information Jessica Peri Cindy Elrod Mindy VanVleck 775-463-6326 775-463-6318 775-463-6313

Monique Blajos 775-463-6325

October 2015 | progressivegrocer.com |

127

Fresh Food

Produce Category Spotlight

When it comes to what’s hot, Santiago sees potatoes ftting into the healthy-eating trend — with a twist. “We’re spending a lot more time on the perimeter of the supermarket, and we’re eating more fresh foods,” she notes. “Consumers have a deepseated love of potatoes, but they got bored. Tey want more excitement from potatoes, and trendy, modern ideas for preparing them.” Leveraging two major potato trends — smaller sizes and convenience — Alsum Farms & Produce, of Friesland, Wis., recently debuted Fast & Fresh! Microwave-Ready Russet Potatoes. Available year-round, Alsum Farms’ 12-ounce package features fresh baby russet potatoes that are triple-washed and ready to cook in fve minutes or less. “Microwave-Ready Russet Potatoes bring fresh, convenient potato solutions to the time-starved consumer,” afrms Heidi Alsum-Randall, Alsum Farms & Produce national sales and marketing manager.

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

Sensational Sweet Potatoes A celebrated superfood, sweet potatoes are increasingly gaining in popularity with consumers. Meanwhile, suppliers like Nashville, N.C.-based Nash Produce are further enticing shoppers with convenience. Nash recently introduced a 1.5-pound steamable bag of petite sweets. Te bag’s contents are ready to serve after eight minutes in the microwave. Each bag contains fve to six small sweet potatoes that have been triple-washed. “Tis goes hand in hand with the top trends we have seen in sweet potatoes,” says Laura Hearn, Nash Produce marketing and business development director. “Value-added convenience items have been a huge hitter in grocery. Consumers have demanded quick, easy and healthy items that they can prepare for meals.” Nash has also witnessed growing demand for more specialty potato products, including smaller fngerlings, new varietals and innovative packaging. “Consumers seem to have an interest in being able to try new things and experiment with fresh produce products,” she adds.

Fresh Food

Produce Category Spotlight

Hearn believes that the well-established health benefts of sweet potatoes have helped to spotlight these spuds. “Nutrition is a huge growth driver,” she asserts. “People truly see the value of eating better. When eaten with the skin on, a medium sweet potato has over four times the recommended daily intake of vitamin A, which plays a vital role in vision, bone development and immune function.

Tey are also a fantastic source of fber, potassium, vitamin C and beta carotene, to name a few.” Routinely touted for its nutritional prowess and low glycemic index by nutritionists, TV talkshow hosts and celebrity chefs, the sweet potato is fnally getting its due, according to George Wooten, president of Wayne E. Bailey Produce Co. Inc. (WEB), in Chadbourn, N.C. In business since 1935, WEB grows more than 3,500 acres of sweet potatoes around the country. Te company, which also packages sweet potatoes for Green Giant Fresh, has seen demand for sweet potatoes continue to grow, especially for its smaller-profle Green Giant Fresh Petite Steamable sweet potatoes in a microwavable bag, and its Fingerling Sweet Potatoes. “Sales of our fngerlings have grown 3,000 percent in the past four years,” notes Wooten, who adds that they’ve have taken of in both the retail and foodservice channels. WEB ofers 10-, 20- and 40-pound boxes for retail. As part of the continuing expansion of its steamer program, the company will air a new cable television promotion on Nov. 3 that features a chef talking about quick sweet potato bites. “Te demand for sweet potatoes continues to grow, and acreage is increasing based on demand,” observes Wooten. “In 2014, North Carolina had more acres planted to sweet potatoes than it has in the last 50 years.” Acreage was higher in the frst half of the last century, because yields were lower.

Organic Potatoes Organic potato production is on the rise, reports RPE Inc., a Bancroft, Wis.-based year-round grower/shipper of potatoes and onions, which recently expanded its potato oferings with Oddball Organics. Since last year, RPE’s cooperative growers saw a 47 percent acreage increase in organic potatoes in Wisconsin alone. Increased production also means more taters with odd shapes and minor skin blemishes. Tese less-thanpicture-perfect (though still tasty) tubers, considered non-market-grade potatoes, are often thrown out, notes RPE, which hopes to change things

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

set, red and gold potatoes, Oddball Organics come in 3-pound poly bags, mesh bags or bulk, as well as displayready cartons.

Consumers, particularly Millennials, Colorful Crops are learning From sweet potatoes to purple potatoes more potato to red-skin varieties, color is taking the preparations, potato category by storm. Black Gold and they’re Farms, of Grand Forks, N.D., has more interested expanded upon its traditionally grown in food in varieties of red potatoes with several general.” vibrant introductions.

with Oddball Organics. “Many of these potatoes would have been discarded solely because they were misshapen,” says RPE President and CEO Russell Wysocki. “RPE, committed to responsible farming, is consistently working on saving our customers money as well as pushing toward the reduction of waste currently in the potato industry.” Available in several varieties, including rus-

NEW

One of its new potato oferings is Sangres, a variety that Black Gold Farms selected for its ability to maintain quality and color through the winter. Te company is also growing Dakota Ruby Red, a variety developed at North Dakota State University that yields a consistently round shape, ruby-red color and smooth skin. Additionally, Black Gold Farms has revealed major investments in its East Grand Forks, Minn.based packing facility, which it believes will result in elevated quality and productivity. PG

—Seth Pemsler, Idaho Potato Commission

Proft from

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Progressive Grocer invites retailer executives to learn more about strategies and solutions for fresh prepared food and how it can boost store loyalty and profts. • Participate in an assessment of shopper insights, the competitive landscape and case studies • Learn about key trends plus operational and tactical concerns • Network with other retailers who share your interest in grocerant opportunities For more information, contact Jef Friedman at JFriedman@stagnitomail.com or at 201-855-7621. www.progressivegrocer.com/grocerant-summit

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Attitude and Usage Study, Tyson Deli/Bakery, 2014

Consumer Perceptions To be successful in reaching that distinctive segment of shoppers who drive deli prepared food sales, retailers must first understand what matters most to them. According to a Tyson Foods Attitude and Usage Study, the overwhelming driver for shoppers to purchase – or bypass – the prepared foods case is quality, freshness and value for the price paid. Those perceptions are primarily formed based on previous purchases as compared to the current shopping experience.

The Experience To create the experience their customers will remember, which will also encourage repeat purchases, deli managers should start by teaming with suppliers to produce hot, fresh, good tasting prepared foods, then ensure they’re available to shoppers during high peak times. Managers should also look for problems that drive shoppers away. The number one issue is a long wait time. Customers want speedy service, and if they don’t get it, they usually don’t report their dissatisfaction to anyone. They just go elsewhere.

Shoppers have other channels to choose from for their evening meal solutions, and research shows they often opt for QSR and take-out foods as top-of-mind choices over their grocer’s prepared foods. Retailers, therefore, can take cues from those channels on getting into the shoppers’ consideration set with consistently offering quality products and efficient execution.

It’s up to retailers to close the gap in their connection with those relevant shoppers before, during and after each deli visit by driving home awareness messaging focusing on the overall experience, encouraging initial trial with a well-trained, personable staff, and fostering repeat purchases by providing consistently satisfying mealtime memories.

Importance to prepared food shoppers Quality of Food

81%

Food Freshness

80%

Value for Price Paid

69%

Ability to Purchase Other Items

53%

Variety of Menu Choices/Options

52%

Promotions/ Specials

49%

Speed of Service

47%

While it may be necessary to check the rear view mirror from time to time for missed deli opportunities, the most important view is on the road ahead, where planning and execution intersect with those meal planners making pre-shop decisions. Your efforts will help ensure they’ll add deli to their consideration sets, and you’ll be well on your way to gaining ground with these sought-after customers.

Fresh Food

Progressive Views

5 Tips for Improved

Fresh Food Profitablility Retailers should use tech intelligently. By Seth Strauser

and what you’ve sold, so you can determine what’s being lost to theft. Ten take appropriate action. Tis could include adding more employees on the shop foor and/or implementing antitheft technology systems. When using antitheft technology, communicate that products are being protected so potential shoplifters reconsider their actions. Identifcation technology for more premium produce can also help with managing both on-shelf availability and employee theft problems.

rocers face stock monitoring, shrink and theft challenges to ensure that food is both available on the shelf and fresh. Here are fve tips to achieve these goals at the fresh food counter:

Focus on the Shopper During busy times, it’s easy to overlook the customer experience. Tat’s a shame, because counter staf who can deliver special touches, like fetching a fresh tuna steak from the back room, inspire loyalty in shoppers. Look for ways to free up staf from other time-consuming tasks so they can be more customer-focused.

Retailers investing in technology to safeguard fresh food should ensure that it actually works.

134

Maintain Proper Stock Levels on Display In most stores, fresh food stafers still carry out time-consuming and potentially inaccurate manual stock counts. Beyond the time/labor issue, displaying too much of a product can result in a freshness problem. And if the item isn’t on the shelf, it’s not going to be purchased. Further, it’s important to put in place processes that keep the right level of stock on display. Address Food Theft Aggressively Red meat, seafood, deli meat and cheese are all high-value items that thieves can resell to other retailers, restaurants or private individuals. To tackle theft, consider your store environment and its risk level. Figure out which SKUs are sufering shrink, and establish how much stock is being thrown away

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

Ensure Safety Make sure that product protection methods are harmless. For example, some adhesives used to fx labels aren’t safe for the package contents. Solutions must be certifed for use with food and meet the requirements of the local standards body. Another concern is that people might not eat their food immediately, but freeze or refrigerate it. It’s vital that there’s no risk when the food is placed in a microwave to defrost. Some protection methods can set packaging in the microwave on fre. Maintain Overall Freshness and Manage Waste Retailers investing in technology to safeguard fresh food should ensure that it actually works. For example, some tracking technology is susceptible to the moisture and fat content in items like meat. Technology solutions provide real-time, actionable data that can help staf focus on a specifc task to keep fresh food on the shelves. Te process of applying tracking and antitheft solutions can be done in-store or at the distribution center. Applying solutions further upstream enables store staf to focus on serving customers. Tat said, when you move the applications further back in the supply chain, there’s a risk that you can end up with nonfunctional protection, so ensure that solutions meet all criteria and have been tested fully. PG Seth Strauser is senior director product management at Thorofare, N.J.-based Checkpoint Systems. He can be reached at Seth.Strauser@checkpt.com.

Operations

Supply Chain

Proceed With

Caution Transportation and other economic factors require more attention from the c-suite. By Jenny McTaggart

I Retailers need to look holistically at the supply chain process, collaborating with multiple functions within their organization.” —Mike Wasson, Tosca

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n the food retail supply chain, plenty of grocers and suppliers have made signifcant strides in their cost-cutting eforts over the past several years. New data imply, however, that all of their ingenuity and hard work may have been undercut by economic factors that are largely out of their control — namely, the daunting area of transportation. Eighty percent of CPG supply chain leaders say that transportation is now their greatest worry, according to a recent report from the Boston Consulting Group (BCG) and the Grocery Manufacturers Association (GMA). In “A Hard Road: Why CPG Companies Need a Strategic Approach to Transportation,” the authors note that CPG companies’ freight costs have risen to 14 percent since the last BCG/GMA supply chain benchmarking study was conducted in 2012. “Supply chain leaders are caught between two challenging transportation trends, as they either must pay more to meet service-level expectations or sacrifce speed and reliability for cost efciency,” observes Daniel Triot, senior director of the Trading Partner Alliance of the Food Marketing Institute and GMA. “Tat is hardly a prescription for long-term success.” Although transportation is the most pressing issue on the industry’s mind, other economic challenges, such as an increasingly tight labor market and consumer demand for fresh food and online delivery, are also impacting the supply chain like never before. All of this concern suggests that supply chain management

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

is now becoming a c-suite issue that must be factored heavily into companies’ overall business strategies. During a Sept. 15 webinar discussion of the BCG/GMA report, Tim Near, a senior advisor at BCG, laid the issue on the line. “In this new world of chronic problems, the conversation must be elevated,” he contended. “Supply chain issues need to be on the agenda of the c-suite, with top executives asking, ‘How does this afect my business strategy? How can we manage this going forward?’” Near and others seem to agree that there’s no “magic bullet” solution. But if company leaders work to more actively manage the roadblocks ahead, by forming a clear strategy, using smarter tools and working more closely with their trading partners, they can be better prepared.

Roadblocks Ahead Driver shortages and chronic capacity squeezes, along with growing congestion and delays, are the main transportation issues threatening delivery times, inventory management and service levels, according to the BCG/GMA report. Te country’s aging transportation infrastructure is largely to blame. “Supply chain leaders used to view transportation problems as cyclical, but these problems are here to stay,” notes Peter Dawe, a BCG partner and co-author of the report. “Now we’re seeing such an acute capacity shortage that it can be near impossible to get loads on some lanes moving. TransportaContinued on page 140

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Operations

Supply Chain

Continued from page 136

tion is becoming a strategic planning consideration, not a simple commodity to be sourced.” Fortunately, some CPG companies and retailers are already ahead of the curve in making these issues a priority and exploring ways they can fght back. Sunbury, Pa.-based Weis Markets, a Mid-Atlantic food retailer that operates 163 stores in Pennsylvania, Maryland, New Jersey, New York and West Virginia, is staying “focused on the fundamentals” as it meets its challenges, according to Wayne Bailey, VP of supply chain and logistics. “As a company that self-distributes, we recognize the challenges and opportunities in the supply chain arena and know that it is essential to our success,” Bailey tells Progressive Grocer. “We’re … efciently executing every step of the way and, most importantly, helping our stores serve our customers.” He notes that fuel prices have been a challenge, but fnding qualifed mechanics and drivers is also a key issue for the company. “Over the past decade, we’ve given our people the tools to efciently manage our supply chain,” explains Bailey. “Today, we’re doing a better job utilizing “The issue for the technology to improve efciencies, big chains is how particularly with RF loading and to facilitate home receiving. Tese improvements have delivery and/or allowed us to increase product turns support the smalland reduce inventories. format stores they “In the transportation arena, are trying to use we’ve upgraded our feet, which has lowered our maintenance and fuel for growth.” costs,” he continues. “We also use —Arnold Maltz, software programs that allow us to W.P. Carey School of plan the most efcient routes and Business at Arizona reduce idling time, which conserves a State University signifcant amount of fuel, and we’re mindful of the role our drivers play in this process, which is why we ofer tthem a fuel conservation incentive.” In addition, Weis Markets has increased its use of intermodal in transportation, which Bailey says tr is “cost-efcient and requires less handling,” and has realized le cconsiderable savings with its managed transportation program. m He notes that the latter initiative H “is a crucial area for us, when you “i cconsider how freight expenses are ah huge cost center. We’ve been able to drive costs out of our supply chain — and d we think we can do better in the years ahead.” Meanwhile, on the CPG side of the business, companies such as Procter & Gamble, Bumble Bee and Land O’Lakes are deploying a variety of tactics to fght transportation challenges, accord-

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

ing to the BCG/ GMA report. Tese tactics include effciency moves and choice of ownership model, network redesign, and new partnership approaches with customers, carriers and even other manufacturers. BCG/ GMA estimates that implementing a suite of tactics with an integrated approach can lead to a potential cost savings of 7 percent of transportation spending, or roughly $1 billion, industrywide.

“As a company that selfdistributes, we recognize the challenges and opportunities in the supply chain arena and know that it is essential to our success.” —Wayne Bailey, Weis Markets

Fresh Consideration Once companies begin to get a handle on their transportation challenges, many of them have another big supply chain issue to navigate: shipping and receiving perishables. Te U.S. Food and Drug Administration’s Food Safety Modernization Act of 2010 (FSMA) presents new complexities for the grocery supply chain, notes Mike Wasson, VP of supply chain and operations at Tosca, an Atlanta-based company that provides reusable packaging and supply chain solutions across multiple fresh categories. Te FMSA “changes the way food is sourced and managed through the supply chain,” he observes. “Current practices used for perishable goods to package, ship and deliver in a controlledatmosphere environment will become more critical.” Tosca works directly with many grocers to provide reusable packaging and supply chain solutions for perimeter departments, according to Wasson. Tese solutions aim to reduce waste related to such components as product, packaging and labor. He says that Tosca’s reusable plastic containers decrease product damage by up to 50 percent, reduce labor by up to 20 percent or more, and eliminate corrugated packaging from even entering the supply chain. In Wasson’s view, the grocery supply chain needs to be “constantly evaluated” for areas of improvement and efciency gains. “Retailers need to look holistically at the supply chain process, collaborating with multiple functions within their organization,” he says. “Te overall beneft might only be understood if the entire supply chain is evaluated.”

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Operations

Back at the Lab

Supply Chain

Digital Demands Another area of the business that demands more supply chain attention is online ordering, pickup and delivery. In this regard, even the largest chains have big hurdles to overcome. “Te issue for the big chains is how to facilitate home delivery and/or support the small-format stores they are trying to use for growth,” observes Arnold Maltz, associate professor of supply chain management at the W.P. Carey School of Business at Arizona State University. “Independent retailers will still be OK for upscale areas, but even they will have to ofer delivery options — and their initial tendency is to use their own vehicles,” he says. “Unfortunately, that will not scale, so the independents may start looking for local or even national companies to handle their deliveries.” All in all, grocers have done a decent job of fnding ways to alleviate some of the rising costs in the supply chain, say Maltz and others. Maltz points to improvements in inventory accuracy and timeliness, eforts at predictive analytics, and store-based delivery. However, he concedes: “Te pressures are not going to lessen. Issues such as the GMO and organic controversy, along with the continuing shift to fresh

Supply chain challenges are being explored in brand-new ways at the new Kenco Innovation Labs. Kenco, a provider of integrated logistics solutions, developed the department to focus on researching and developing innovative approaches to supply chain solutions. At Kenco’s corporate campus in Chattanooga, Tenn., the center’s team will collaborate with customers to identify, research and prototype leading-edge ideas and processes. They’ll also team with entrepreneurs and vendors from multiple industries to identify trends that can be cost-effectively applied in the supply chain. “A single-service model no longer works within the logistics industry,” says Kristi Montgomery, VP of Kenco Innovation Labs. “Kenco has always been ahead of the curve in providing creative solutions, and the lab will continue those efforts with a dedicated team focused on strategic implementation of forward-thinking ideas that create supply chain value, increasing efficiency and effectiveness.”

food where possible in this country, are going to continue to push costs.” Terefore, it behooves companies to ensure that supply chain management is a strategic priority throughout the entire organization. PG

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

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Operations

Progressive Views

How Grocers Can

Accommodate Minimum-wage Hikes Ideas to improve labor management processes.

P If grocers want to accommodate these higher wages and keep some money in their pockets, they’ll need to embrace new technologies and processes.

By Steven Kramer

lans to bump up the minimum wage have kicked into high gear. Cities including Los Angeles, Seattle, New York and Chicago have already voted to increase the minimum wage to $15 by 2020. While these regulatory changes are a big win for the hourly workforce, they’ve added pressure to employers, especially grocers. Wal-Mart Stores Inc. is just one of the many large-scale grocers feeling the heat. Back in April, the Bentonville, Ark.-based company decided to take a gradual approach to the proposed minimum wage hike and raised its hourly starting wage to $9, but the move is starting to take a toll on operations and proftability. Profts are down and hours are being cut, and Walmart is blaming this partly on the wage increases. Te higher minimum-wage revolution is here, and grocers need to fgure out how they can optimize labor to better manage their costs. Rather than reducing workers’ hours, grocers should instead focus their attention on improving their labor management processes. Most organizations use outdated and unreliable methods to manage their scheduling needs. Proper shift management can have a signifcant impact on a company’s bottom line. If grocers want to avoid additional overhead and operational costs, it’s time they consider upgrading their scheduling processes.

Rising Wages = Internal Improvements As wages continue to increase, growing labor costs has become a top concern for grocers, and understandably so. However, this regulatory shift should be seen in a

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

more positive light. Increased wages give companies the chance to kick their hiring, retention and operational strategies up a notch. In the past, grocers were typically left with two options when they wanted to keep proft margins in check: increase prices or lay of workers to reduce costs. While these seem like reasonable solutions to control costs, they also put businesses at risk for increased operational inefciencies and losing customers as a result of high prices. Before resorting to these options, grocers should frst consider improving back-channel efciency and internal cost management. Taking this approach may encourage grocers to re-evaluate their current operational planning. When looking into operational planning, grocers should consider adjusting several key components: Hiring and training: Minimum-wage hikes mean

grocers need to be extra-cautious during the recruitment process. Hiring the wrong employees can have drastic implications on recruiting and training. With this in mind, employers will need to hire more carefully and train their stafs more quickly, but still efectively.

Scheduling: As we’ve seen with Walmart, labor

costs can put a major dent in a company’s bottom line. With this issue becoming more prevalent, grocers will need to implement more efective scheduling methods and use more advanced forecasting tools. Now is the time for retailers to shed clunky manual scheduling processes (e.g., Excel spreadsheets, paper charts and frst-gen scheduling software) and start considering new solutions that optimize and automate shift management. Retention: With rising minimum wages, grocers

face increased competition when it comes to pay. However, companies need to look past monetary constraints if they want to stand out among the competition. Having a stable income is an important retention factor, but ofering employees more consistent and predictable schedules that ft their lifestyles will go further in the long run. Employees will feel a greater sense of value if they have more input and control over their scheduling. Grocers should also consider moving past “employee of the month” programs to recognize workers’ performance. Companies that can connect with their stafs on a deeper and more meaningful level will

see lower turnover and avoid unnecessary recruiting and retraining expenses.

New Outlook Can Go a Long Way Many grocers perceive higher wages in a negative light, but they can have a positive and even proftable impact on a company’s operations if handled right. Rising minimum wages give grocers the opportunity to re-examine their current internal strategies and improve them. Higher wages impact all facets of an organization, not just costs — from recruitment and training to scheduling and retention. If grocers want to accommodate these higher wages and keep some money in their pockets, they’ll need to embrace new technologies and processes. Using outdated manual processes to handle employee scheduling and relationship management won’t cut it anymore with increased regulatory pressures. Instead, grocers should invest in solutions that incorporate all areas of managing hourly workers in an efcient and automated way. PG Steven Kramer is CEO and founder of Montreal-based employee relationship management firm WorkJam.

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Digital Marketing

Technology

Engaging Shoppers Effectively With

It’s more than posting store circulars and coupons. By John Karolefski

ocial media has evolved into the world’s most popular pastime. It has changed the way consumers present themselves to others and how they communicate with each other. It has also given grocery retailers a powerful way to engage their shoppers. According to experts, savvy retailers consider social media to be an extension of the in-store experience and a vehicle for shopper opinions. “It’s not only a necessary component of their communication strategy, but an opportunity for diferentiation and competitive advantage. Show your customers that you’re listening and meet them where they are,” advises Eric Hausman, retail practice chair and partner with Spong, a Minneapolis-based consultancy. Lynn Lang, of Capgemini, says grocery is about people doing business with people. Social media is the new enabler of that on a larger scale. “Social media gives grocers a big opportunity to revitalize their methods for customer acquisition, stimulation and engagement by identifying not only valuable customers, but advocates, infuencers and communities of interest — for

example, the soccer-mom demographic — across the entire brand engagement journey,” says the consumer products, retail and distribution leader at the Paris-based worldwide consultancy. Lang adds that if grocers use social media properly, they may be able to understand the broader context of consumer buying behavior beyond price optimization. “For example, by gathering valuable customer preference information in a convenient and unobtrusive way, grocers can appeal to customers across broader variables such as well-being, managing the home and other drivers of consumer purchasing behavior,” she explains.

A Better Experience Tat is helpful information to gather, but grocers need to deploy social media correctly. Posting a store circular or an assortment of coupons on a grocer’s website isn’t taking advantage of the potential of social media. Bob Phibbs, CEO of Te Retail Doctor, in Coxsackie, N.Y., tells grocers to devote time to understand social media and to post creative content to develop a dialogue with customers. Matt Krebsbach, director of global public and analyst relations for Austin, Texas-based Bazaarvoice, agrees,

The ubiquity of social media and other consumergenerated content has helped to level the playing field between retailers and consumers.” —Matt Krebsbach, Bazaarvoice

October 2015 | progressivegrocer.com |

147

Technology Digital Marketing

Social media opens up the possibility of telling the story of your company and laying out your point of differentiation.” —Michael Sansolo, Coca-Cola Retailing Research Council of North America

noting a “growing appetite for peer-validated content to inform the consumer grocery shopping experience.” Research by his frm found that 45 percent of visits to food and beverage product pages show users interacting with reviews. Also, grocery stores are demonstrating one of the highest usage levels of instore online mobile access of any industry, with 30 percent to 35 percent of food and beverage product page views being accessed from a mobile device. Food and beverage retailers experience a 73 percent lift in conversion rate for visitors who used consumer-generated content, versus those who didn’t. “Te upshot is that the ubiquity of social media and other consumer-generated content has helped to level the playing feld between retailers and con-

sumers,” Krebsbach observes. “Both sides beneft from the transparency aforded by the availability of genuine, unbiased consumer opinions. Consumers gain more information to make a confdent purchase, which helps retailers increase conversion.” Hearing opinions and accumulating insights are

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

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Technology

Digital Marketing

certainly important, but at the center of grocery’s social media is food. In August 2012, the Nielsen Global Survey of Digital’s Infuence on Grocery Shopping found that more than 61 percent of respondents said the internet was their primary resource when conducting research related to household grocery shopping. Terefore, grocers’ website and social media outreach should be in the mix. According to surveys done by the Coca-Cola Retailing Research Council of North America, shoppers go online to talk about events in their lives — especially recipes, meals and shopping (the council’s research study can be downloaded free at www.ccrrc.org). Michael Sansolo, research director of the council, notes that some grocers have succeeded in social media mainly on Facebook, but also via Twitter, Pinterest and Instagram. “However, our surveys found that consumers are underwhelmed with the results,” he says. “Many likened supermarket pages on Facebook and other sites to online circulars, flled with specials and coupons. Such marketing is always important, but social media opens up the possibility of telling the story of your company and laying out your point of diferentiation. Build relationships and community rather than just list prices, is what shoppers seem to want.”

Customers are talking about us every day — whether it’s about the instore experience, a person they connected with in the grocery store, the products we are carrying or not Emotional Connections carrying.” Which grocers are succeeding at social media? —Maria Brous, Publix Super Markets

150

What are their objectives? Publix Super Markets began its social media program in 2009 because the Lakeland, Fla.-based chain wanted to engage with every customer, according to Maria Brous, director of media and community relations. “Tey are talking about us every day — whether it’s about the in-store experience, a person they connected with in the grocery store, the products we are carrying or not carrying. It’s about issues and compliments that we are missing if we are not out there and engaged socially,” she said in a presentation at FMI Connect in Chicago last June. Phibbs, at Te Retail Doctor, points out that Schenectady, N.Y.-based Price Chopper Supermarkets has a robust Facebook presence, with lots of pictures of contest winners and how-to videos; he also compliments Cincinnati-based Kroger for doing a good job with hashtags like #foodhack and by featuring its employees, not just great recipes. Additionally, Williamsville, N.Y.-based Tops Markets LLC recently showed its employees volunteering for a cleanup and special

| Progressive Grocer | October 2015

display in its original store in Bufalo. “Grocers are highly sophisticated when it comes to ofering personalized and targeted marketing for their clients,” says Capgemini’s Lang. “Within that level of sophistication, they have the ability to drill down into their analytics and insights, create targeted lists of customers to go after, assess conversion rates and even look at ofers from vendors to apply to personalization for customers. With social media, however, grocers are taking those insights one step further and integrating customer sentiment. Tey are leveraging social media as a continuation of the brand strategy by using it to develop an emotional connection between the consumer and the brand.”

Getting Started Not every grocery retailer is operating at that level of sophistication. For those new to social media, how should they get started? Sansolo, of the Coca-Cola Retailing Research Council of North America, recommends thinking about the content to be posted and how to keep it fresh and relevant. In other words, don’t just set up a Facebook page with a picture of the store. “Consider who will be in charge of your company’s social media outreach and don’t simply add this onto some existing job,” he advises. “Successful social media interaction requires listening to comments as well as posting them. Make sure you have a clear strategy for how to handle everything from raves to complaints, and share the policy within your company. You need to know who is empowered to speak and who is not.” Phibbs suggests using Facebook to build “a tribe of followers” and using Twitter to post an urgent tweet, say at 5 p.m., such as “We have fresh outof-the-oven baguettes. Stop by on the way home for quick dinner ideas.” He tells grocers to ask local farmers to make two-minute videos on a smartphone as they pick the produce that will be stocked in the store that day and send the clip for a series

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Technology

Digital Marketing

that could be called “Know Your Farmer.” By conditioning consumers to expect reviews on the product page and feel compelled to use those reviews when making a purchase decision, companies like Bazaarvoice aim to transform consumer shopping behavior and defne the way retailers should engage with their consumers online. Tose reviews signal transparency, signifcantly increase natural search rankings, and reduce barriers to purchase and product trial. Te vast majority of retailers across various industries have recognized the importance of providing reviews as an integral part of the consumer decision journey. But given that many CPG products are perceived as low-consideration purchases, the grocery industry has been slow to follow suit, according to Krebsbach. For grocery retailers just getting started with social media, he recommends the following actions: Develop communities on the key industryrelevant social channels. Use those channels to encourage authentic conversations about your brand and products, and be part of those conversations.

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Support product ratings and reviews on the company’s website. “By bringing the conversation to all the places your consumers are and ensuring those conversations include useful information,” he concludes, “grocers are positioning themselves to not only be a trusted consumer partner, but the go-to resource throughout the entire consumer decision journey.” PG

Equipment & Design

Signage

Sign Language Supermarket signage blends aesthetics and technology for a unified store ambience. By Bob Ingram

igns are an almost subliminal aspect of food marketing, ubiquitous but serving a multitude of functions, among them informing, guiding and identifying. A brand’s beacon, exterior signage has changed signifcantly in the past 20 years, according to James Watson, president of Dallasbased Signs Manufacturing Corp. “Almost every grocery sign used to be lighted with neon,” he notes, “but LED products have advanced far enough to compete with neon in terms of illumination,

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so most building signs are now lighted with LEDs.” Likewise, adds Watson, the digital display market has pushed forward as pricing has come down, and as a result many grocery signs now incorporate full-color LED displays as part of their sign marketing packages. Even so, he sees the biggest hurdle for exterior signage as local ordinances. “Te trend is to severely restrict or eliminate free-standing pole and pylon signs,” he says. “Tis creates a tremendous problem for a grocer’s ability to market their store, as free-standing signs have always been a permanent,

inexpensive way to advertise, long-term.” Many stores, he continues, address this problem by building up the storefront, frequently adding a “tower” to the building, and putting signage on the building instead. “We’ve developed many diferent monument — ground — sign options to circumvent pole and pylon sign ordinances,” he observes. What’s more, according to Watson, LED displays are also being targeted by ordinances as they become more popular. “Stores that move quickly tend to get the larger, nicer signs grandfathered under the old ordinances,” he points out. Signs Manufacturing Corp. now builds its own LED signs, getting ETL approval for installation where ETL Listed signs are required. Originally a mark of ETL Testing Laboratories, the ETL Listed Mark is now a mark of London-based Intertek Testing Services. “LEDs continue to change daily,” asserts Watson, “so we constantly monitor new technology improvements and test new LED products to ensure we are using the best and brightest lighting in our signs.” Te company also has developed an iOS and Android app called Sign Service Request, which lets a store place a mobile service call in the event of a sign outage. “It’s as easy as two touches on the device to place a service call,” says Watson.

Inside Jobs In the area of interior signage, “[s]upermarkets have trended over the years to their own paper signage programs to add fexibility and control to their signs,” notes Dave Lyons, marketing/creative director at Blanc Display Group, in Dover, N.J. “Tey can change at a moment’s notice to extra added information like bar codes, unit prices and savings. It’s not as attractive as a professionally printed sign, but I believe they like the fexibility.” He adds the caveat that supermarkets will always need to bring attention to specifc categories inside departments to better guide the shopper. “Tese are normally bigger signs that they can’t produce in-house,” he says. “Tese are usually printed by a printing/manufacturing company and made more durable and longer-lasting.” Lyons’ company creates vehicles that support signage, manufacturing sign frames and holders that can attach to just about anything. “We’ve evolved more into a solutions company,” he asserts.

“Our customers call and ask for solutions. And it normally turns into custom pieces. Larger chains generally have their own art departments, and they develop the look they want and we make their look work in the store’s environment.” According to Lyons, Blanc Display Group’s QR code signage program entices shoppers to engage with and learn more about the products they’re buying. “Smartphone users are coming around and using it for coupons, and some retailers are trying to engage them with promotions through special apps,” he says. “Tink about this: Five years ago, if you asked a person what an app is, they would look at you like you’re stupid.” Forecasting the future of supermarket signs is a ‘tough one,” admits Lyons, but he sees retailers still using their own paper sign programs, with some switching to a well-designed professional approach to make the consumer shopping experience fun. “Eventually, it may all go digital,” he speculates.

Tags are It Lissette Robledo, marketing manager at Fort Lauderdale, Fla.-based Evolis Inc. says: “We have found that supermarkets and grocers were looking for a more professional and consistent manner in which to display their products’ pricing, which would result in a better brand image. Tey were also frustrated with how time-consuming and inefcient their price tag updates were.” Evolis’ solution was to deliver price tags on a plastic card, combining an Evolis Zenius or an Evolis Primacy card printer for single-sided or double-sided printing, card design software, and what Robledo calls the “consumables” required to print and hold the card. Te price tags can be instantly issued and have advanced design options, plus the back of the price tag, facing the employee, can include a bar code as well as a PLU code, weighing code or other information. “Tis eases data capture when calculating the price of a product

We constantly monitor new technology improvements and test new LED products to ensure we are using the best and brightest lighting in our signs.” —James Watson, Signs Manufacturing Corp.

STrEaMLInIng UpDaTES Evolis’ Zenius and primacy card printers print on one or both sides of plastic cards.

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or quantity purchase,” observes Robledo. She further notes that plastic cards can withstand humidity, and that their smooth surface can be washed easily and rapidly. Te cards can include bar codes and QR codes that are easily scanned by any mobile device, and the Evolis printer’s encoding capabilities can issue a price tag with embedded NFC (near-feld communication) functionality to

receive cooking recipes or other details. According to Robledo, Evolvis “would like to see the implementation and expansion of plastic price tags in the United States, as has already happened in many European countries.” Indeed, the signs are there that supermarket signs will become even more shopper-friendly and brand-building in the food retailing future. PG

Anatomy of a Sign Package The Streeterville Whole Foods Market in Chicago is a former Dominick’s that’s very close to tourist destinations and the famed Navy Pier, according to Stacey Landino, associate coordinator of décor and design for the Whole Foods Midwest Support Office. To get the look it wanted, Austin, Texas-based Whole Foods chose award-winning experience design agency Chute Gerdeman, of Columbus, Ohio, to provide the store’s sign package. “We’ve been wanting to work with Danny Gerdeman and Elle Chute for years,” says Landino, “but hadn’t found the right store to partner with them on. When Whole Foods Market acquired the Chicagoland Dominick’s locations in exciting urban neighborhoods like Streeterville and DePaul, we knew this was the opportunity to partner with Chute Gerdeman’s talent and vision to create exciting, community-focused food destination stores.” What makes According to Matt Jeffries, Whole Foods creative director, brand commuunique is that nications, at Chute Gerdeman, the every store sign package project kicked off with has its own an informal work session with the customized look core Whole Foods décor team, led and personality, by Christine Sturch, Midwest senior often echoing interior design and décor coordinator. “Here we gained a more in-depth the surrounding understanding of who the Whole community and Foods shopper is and their expectaits history.” tions for an ideal grocery shopping —Matt Jeffries, experience,” notes Jeffries. For the Streeterville store, Chute Chute Gerdeman Gerdeman found that leveraging Art

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SiGnS AnD WonDErS For its new Streeterville location in Chicago, Whole Foods Market enlisted Chute Gerdeman to help create distinctive signage.

Deco design and architecture of the 1930s would provide a wealth of ideas and a consistent visual thread for the store’s décor program. “What makes Whole Foods unique,” says Jeffries, “is that every store has its own customized look and personality, often echoing the surrounding community and its history.” Working with Landino, Chute Gerdeman designed a program of décor elements like signage to fit with the Art Deco theme, while helping to enhance the store’s merchandise selection and food offerings. “Throughout the process, our design team would design, detail and develop sign location plans, conduct site surveys alongside Whole Foods, review fabrication samples and specifications, and assist with the installation,” observes Jeffries. “The end result of this collaborative process was another successful Whole Foods Market store that was uniquely Chicago.”

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

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Retailers Can Own Wellness Consumers have taken wellness into their own hands, and understanding their journey has emerged as a powerful way for retailers to create a trust relationship with their customers. One of the biggest emerging opportunities for retailers to build engagement with customers is by positioning themselves as “go to” resources for wellness advice and DIY Health education. Retailers can seize the opportunity in four key areas: convenient point-of-care solutions like retail clinics, lifestyle enablers such as nutritional and dietary management programs, ofering curated product assortments that address specifc health concerns and lifestyle trends, and providing digital integration options like mobile health devices and tele-health options. Additional global wellness trends retailers and manufacturers need to be ready to respond to include: • Ancient Wisdom Drives Product Adoption Consumers are rediscovering health and wellness practices and solutions that have existed for centuries but are even more relevant today. Tis is seen in the “return to the classics,” such as cane sugar instead of high fructose corn syrup, butter instead of margarine, ancient grains such as quinoa, and integrating wellness services with practices such as yoga and Chinese medicine. • The New Proteins Protein is more important than ever, but consumers want it ofered in healthier forms. Consumers are shifing their focus to more sustainable plant-based sources of proteins like brown rice, quinoa, chia seed, pea protein and soy. Tere is even interest in edible insect proteins and “better for you” animal proteins such as grass-fed beef and sustainably farmed seafood. • What’s Next in Organic Organic is now mainstream. Tree quarters of consumers are buyers of organ-

ic products and organic sales are showing double-digit yearly growth. However, the gap between organic supply and demand is growing, and price declines in organic are likely to stall. Retailers and manufacturers can secure supply by investing in long-term supply agreements with manufacturers and their suppliers and growers upstream. Tey can innovate and develop organic products that are specifcally relevant to key trends, such as globallyinspired, convenient grab and go options. • Indulgence and Wellness Indulgence is a more powerful purchase motivator than wellness. Retailers can take advantage of the growing intersection of indulgence and wellness by ofering “permissibly indulgent,” “clean-label” products with no artifcial additives. Retailers can partner with manufacturers to add genuine enjoyment to better-for-you eating by using classic ingredients such as cane sugar and butter, and adding more whole and natural ingredients such as whole grains, cold-pressed oils and vegetable- and fruit-derived favors and colors.

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Progressive Views

Power Systems Protect

Grocersâ&#x20AC;&#x2122; Profits

Guard against revenue, product loss while continuing to operate during outages. By terry schlemmer

ince 1990, the demand for electricity has risen by 400 percent in the United States, according to a study completed by Waukesha, Wis.based Generac Power Systems. Te result is an increase in frequency and severity for power outages. Te same study reveals that nearly 219 million utility customers spent more than 220 million hours without power in 2014. Two million of these utility customers experienced a power outage lasting eight hours or longer, according to Munich, Germanybased global insurer Allianz. Grocery stores are particularly sensitive to power outages. Estimates based on Generac research indicate that grocery stores can lose up to $4,388 per hour, or $196,056 per year, in sales during power outages. Not only are revenue and refrigerated and frozen products lost during a

GeneRatInG PROfIts a standby power system can ensure that a store remains up and running while competitors close.

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power outage, but security, data and personal safety are also at risk.

Prepare for Power Outages A business continuity plan is essential for all companies, including grocery stores. By identifying the risks associated with power outages and creating a plan of action, grocery store owners can ensure that their locations continue to operate during an outage. Tis business continuity plan should include a reliable source for backup power. For grocery store owners, an investment in a standby power system not only protects their profts, but also secures their reputations in the eyes of existing, as well as potential, customers. Receive a Return on Investment According to the Tampa, Fla.-based Institute for Business and Home Safety, one in four businesses never reopens its doors after a disaster â&#x20AC;&#x201D; often

because of not having the proper processes and systems in place. Additionally, research conducted by the Multihazard Mitigation Council, in Washington, D.C., indicates that every dollar spent on mitigation saves $4 in disaster recovery. Often, a standby power system pays for itself in one power outage.

such as natural gas and bi-fuel. Bi-fuel standby power systems start on diesel fuel and add natural gas as the load is applied, until the unit runs primarily on natural gas. Both natural gas- and bi-fuel-powered standby power systems emit fewer nitrogen oxides and particulate matter than comparable diesel-fueled systems.

Add Protection to Business Insurance Policies Although business interruption insurance policies can help ofset costs associated with a power outage, such policies might not cover all damage associated with a power outage. Tese policies may not go into efect until 24 to 36 hours after the power outage, so retailers absorb revenue losses during that period. Plus coverage can be limited and additional riders may be required.

A Business Opportunity Standby power systems not only can protect grocery store owners from the efects of power outages in the present, but also can be a business diferentiator in the future. Further, there are opportunities to attract new customers from competitors that close or provide limited services during a power outage. Finally, these systems can demonstrate to customers that their patronage was, and continues to be, the smart choice. PG

Serve as a Community Resource Even if you can recuperate lost revenue, it’s difcult to recover lost customer trust or damage to the reputation of your business. Since they’re community resources, it’s essential that grocery stores continue to provide fresh food and supplies in the event of a power outage. Select the Right Standby Power System Grocery store owners should evaluate their power and building requirements before choosing a standby power system. Te right system can ensure a swift and efcient recovery immediately after and during a sustained a power outage. Choose a backup power provider that can assist you with your business continuity plan, identify your risk for power outages and determine the right standby power system to keep your grocery store(s) functioning. A backup power provider can ofer a solution that adjusts to your unique application needs, including confguration, setup and fuel type. Confguration and setup: Te amount of backup power required will vary, depending on a grocery store’s size and how many items you choose to equip with a source of backup power. Sometimes, all you need is a single standby power system to back up your grocery store(s). In other cases, a paralleling standby power system is ideal. With paralleling standby power systems, grocery store owners can choose to invest in only as much they need now, and add more units later. Contact your backup power provider or electrical contractor to determine the amount of backup power needed to keep your store up and running. Fuel types: Whatever your application or regulatory requirement, there’s a fuel choice to meet your need. Although diesel-fueled standby power systems were once the norm, many grocery store owners are now fnding value in other fuel types

Standby power systems not only can protect grocery store owners from the effects of power outages in the present, but also can be a business differentiator in the future.

Terry Schlemmer is a commercial national accounts manager for Waukesha, Wis.-based Generac Power Systems, a global supplier of backup power and prime power products, systems, and engine-powered tools. He can be reached at terry.schlemmer@generac.com.

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Health, Beauty & Wellness

No-Pain

Gains Analgesic trends favor private label and low prices, with natural ingredients on the rise. By Barbara Sax

ast month, the U.S Preventive Services Task Force recommended that men and women age 50 to 69 who are at increased risk of cardiovascular disease should take aspirin to prevent heart attack and stroke. Te Rockville, Md.-based group also suggested that aspirin may be useful in preventing colorectal cancer in some patient groups. Almost immediately, a medical debate followed about the efcacy of a low-dose aspirin regimen, leaving consumers even more confused about analgesics. A recent report from the American College of Preventive Medicine, in Washington, D.C., revealed that in any given week, about 20 percent of American consumers will use an OTC pain reliever. Increased product segmentation and proliferation, as well as conficting information about which products to use, can leave consumers scratching their heads in the analgesic

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aisle. “Te category is getting more confusing, with so many evolving solutions,” admits Katie McNichol, principal of client insights at Chicago-based market research company Information Resources Inc. (IRI). “With so many specialized products on the market, it may be time to focus on education.” Fort Washington, Pa.-based McNeil Consumer Healthcare, a division of Johnson & Johnson, is using Tylenol shelf talkers to help educate consumers about the diferences between pain relievers by directing them to the brand’s website. It’s a key move as the brand tries to recover from plant shutdowns that sidelined the brand and Novartis’ Excedrin last year. Dollar sales for McNeil brands are up 18 percent for all three outlets, while Novartis brands show a 16 percent gain, according to IRI. Bayer and Pfzer dominate the branded market, with about a 20 percent share each of the internal-analgesic market.

Private Label “Tere’s a set of core consumers who are loyal to their brands, but we have seen private label grow in the last eight to 10 years due to the economy, and especially last year when Tylenol and Excedrin were of the market,” notes McNichol. “Once they give private label a try and realize it’s efective, they will migrate to private label and stay there.” Private label accounts for nearly 40 percent of the overall internal-analgesics class across all outlets, according IRI data for the 52 weeks ending Aug. 9, down about 1 percent from the previous year. Te private label sales decrease is likely due in part to the market return of Tylenol and Excedrin SKUs, says Laura Mahecha, industry manager, healthcare at Parsippany, N.J.-based Kline. What Price Analgesics? Price incentives are efective at moving consumers back to brands. “Price is very important in the category and can become even more of an issue for patients who are chronic users,” observes McNichol. “Tey’ll do the math and shop price per volume.” In the analgesic aisle, supermarket chains are playing the price game, and sale and lowprice shelf talkers dominate the aisles in many chains. Specialized products are one way to keep prices higher in the category, but there’s been little innovation in the segment.

Congratulates Meijer on winning Progressive Grocer’s 2015 Retailer of the Year award.

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Sleeping Easier Analgesics with sleep aids are performing well. According to the Bethesda, Md.-based National Institute of Neurological Disorders and Stroke, about 40 million people in the United States sufer from chronic long-term sleep disorders, and an additional 20 million people experience occasional sleep problems. It’s no surprise that Advil PM, Aleve PM and Tylenol PM all rank among the top 20 best-selling internal analgesics, according to IRI data. “Analgesics with sleep aids are growing at 30 percent, well above overall category growth,” afrms McNichol. “Te most recent uptrend is linked to … Aleve PM, which was launched a year ago, and the return of Tylenol PM.”

Many [consumers] are more likely to try a natural, homeopathic remedy before turning to a traditional analgesic.” —Gary Wittenberg, Boiron USA

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Emerging Trends Future growth in the category is likely to come from easy-to-consume formats. A recent report from Chicago-based Mintel notes that individually packaged, portable, fast-acting and easy-to-use-without-water formulations resonate with young and old consumers. “Tis type of innovation could provide an edge to top internal-analgesic brands and increase brand sales,” the report adds. Additionally, as the Mintel report observes, “Tere is growing interest in analgesics with natural ingredients, supported by the 84 percent of consumers who express interest in buying these products.” More than two-thirds of consumers in that study said they were interested in vitamins to treat pain. “Consumers worry that by taking one product to treat one condition, they may be causing another problem,” notes McNichol. “Consumers with chronic pain are very willing to try new things and are taking a toolkit approach to treating their pain.” Driven by an aging population of consumers, as well as younger users who use the products for muscle pain after exercising, dollar sales of topical analgesics are up by more than 6 percent to nearly $527 million across all three outlets, according to IRI. Brands such as NFI Consumer Products’ Blue Emu and Australian Dream have seen dollar sales leap by around 30 percent, and Boiron’s Arnicare and Hisamitsu’s Salonpas have also experienced doubledigit increases. Meanwhile, private label analgesic rubs are down nearly 4 percent, IRI fnds. “We’ve seen increased interest in Icy Hot patches with TENS technology that are priced over $50 and provide external relief with electronic TENS stimulation,” says Mahecha. For her part, McNichol warns that the external-analgesic category has seen a number or products with great starts fame out after a year on the market.

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

A new crop of products containing Arnica montana is gaining attention. “Arnicare has been a breakout product in a category that’s been dominated by products that have active ingredients with a strong odor, and many consumers are looking for products that are efective, but have less smell associated with their use,” asserts Gary Wittenberg, VP of national accounts for Newtown Square, Pa.-based Boiron USA. “Te product also flls a niche for a topical pain reliever that has natural ingredients and a safe profle.” Boiron also markets arnica products for internal use. Other natural product brands are also showing strong sales. Dollar sales of Hylands internal-analgesic tablets, also made from arnica, show doubledigit dollar gains in a category that overall has experienced a 5 percent increase, according to IRI data.

Best of Both Worlds Retailers are merchandising herbal internal- and external-pain remedies with traditional products. For example, Salisbury, N.C.-based Food Lion merchandises Boiron’s Arnicare with other topical analgesics. Boiron is transitioning from vertical merchandising to a horizontal box. “It’s a more eyecatching shelf presence, especially when the products are double-faced by stacking two on top of one another,” explains Wittenberg. “It helps the consumer fnd the products after they’ve heard about them.” He adds that shoppers are increasingly looking to natural products as a frst defense against pain. “I think consumers understand the importance of addressing pain quickly and efectively, and many are more likely to try a natural, homeopathic remedy before turning to a traditional analgesic,” observes Wittenberg. “Tese products have been available in natural product stores in the U.S., but more recently, mainstream outlets have started ofering [them].” Women, seniors and Hispanic consumers are most likely to use these types of products, he notes. “Consumers are increasingly willing to try natural products to complement traditional OTC medications,” agrees McNichol. “Tat’s where education can help. Te industry could be giving consumers a solution set. When consumers have a better knowledge of safe concomitant use, it can also drive sales.” Accordingly, manufacturers and retailers are working together to better understand cross-purchasing in the category and how products can be bundled for promotion. PG

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Nonfoods

Books & Magazines

Page

Turners

Printed content is still big — if retailers order and merchandise wisely. By Barbara Sax

onsumers continue to read books and magazines in traditional formats, and several segments of those categories are showing growth in supermarkets. “Tere are challenges in the category, but there is also plenty of opportunity,” says Jerry Lynch, president of the International Periodical Distributors Association (IPDA). “A recent study from Mequoda group showed that nearly 70 percent of adults read 2.9 magazines in the last 30 days.” “E-mags have taken away some of our thunder, but they are never going to replace magazines,” asserts John Cowley, president of Jeferson City, Mo.-based Cowley Distributing, a book and magazine distributor covering eight states and nearly

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4,000 stores. According to Cowley, research shows that sales of e-readers are down and consumers are returning to traditional books. A 2014 study by Barrington, Ill.-based Willard Bishop revealed that the magazine category continues to be highly proftable for grocery retailers. Te study compared the category with 38 other general merchandise categories and found that magazines rank fourth in true proft, 13th in weekly sales, and 23rd in category movement per facing. “Magazines deliver an adjusted gross margin of 34 percent, and true proft margin or bottom-line proft of 22 percent,” notes Jackie Gray, director at Willard Bishop. “On average, magazines in center store generate $439 in weekly true proft, more than two times that of the next most proftable front end category, meat snacks.”

Eyes Front Te front end is also crucial to books and magazines, since 70 percent of magazine sales are generated at checkout. “At the front end — where retailers are, of course, focused on maximizing proft on every inch of impulse space — magazines deliver the highest per-unit proft when compared to candy, single-serve carbonated beverages, and salty and meat snacks,” says Gray. “Retailers need to get the checkout right, since that space generates the highest percentage of magazine sales,” advises William Romollino, VP of shopper insights at New York-based Time Inc. Retail. According to Romollino, retailers frequently block primary end cap displays with secondary displays, a practice that detracts signifcantly from sales. “Magazines deliver 16.5 percent of the checkout sales through 18.4 percent of the space,” adds Romollino. “Tat said, retailers are all trying to reduce the clutter at checkouts, and we’re working on new concepts that will frame the checkout area.” He notes that a tapered arrowhead end cap design allowing consumers to shop both sides of the checkout has seen success, and that the industry is experimenting with features such as compartmentalized sections, signage and text that help to present a unifed, sleek checkout area. While there’s been growth in demand for celebrity and beauty titles at checkout, retailers are also diferentiating themselves by adding more specialty titles, puzzles and, in some cases, even hardcover

books to the front end. “Retailers are keeping some pockets unsold to make room for diferent titles and to take advantage of titles that are hot,” says Jay Addis, a consultant in the publishing industry. For example, Fred Meyer, a Pacifc Northwest division of Cincinnati-based Kroger, devotes one checkout end cap to discounted best-selling hardcover books in some of its stores. In a nod to independent bookstores and Barnes & Noble, the Portland, Ore.-based chain also features a section of books it recommends. Bestsellers at the chain are discounted 25 percent. Penny Publications has had success with its checkout program. “Puzzles can be an impulse as well as a destination item,” observes Bruce Sherbow, SVP of the Norwalk, Conn.-based publisher. Puzzles are an important part of the assortment; research from the company shows that 73 percent of customers surveyed said they would go to another store to purchase a PennyDell puzzle magazine if they couldn’t fnd their favorite titles in the store.

At the front end, magazines deliver the highest perunit profit when compared to candy, single-serve carbonated beverages, and salty and meat snacks.” —Jackie Gray, Willard Bishop

Beyond Checkout At the same time that retailers are experimenting with how best to merchandise books and magazines at checkout, many chains have faced pressure on their mainline general merchandise sections. “One retailer had to downsize books, so we created a 16foot section near the pharmacy and created a seating area in the back of the section where people could wait,” says Cowley. Creating a reading center near an in-store Starbucks can create a busy boutique area.

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Nonfoods

The good news for book sales is that movies provide an enormous marketing moment to connect with a whole fresh group of readers.” —Tom Cox, Penguin Random House

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Niche and specialinterest titles, including those with regional interest, have continued to fourish, according to Cowley. “Regional magazines have really taken of,” he afrms. “We’ve seen growth in titles such as Te Backwoodsman, Auta Buy and Wheeler Dealer, Of the Grid, and Mother Earth News.” Taking advantage of seasonality in the front end or in thoughtful outpostings can provide new opportunities for the category. “Merchandising football titles and bookazines near beer or snacks, or near the checkouts during football season, can be a good opportunity,” advises Addis. “Reasor’s Foods, an upscale Tulsa, Okla.-based chain, is doing some innovative things with outpostings in a number of departments, including a sidekick with cooking titles near the meat department, and a sidekick with Rodale health titles near HBC,” notes Cowley. “Supermarkets are evolving as an industry by micromarketing, and the magazine industry has to do the same. When the main section gets downsized, it’s a chance to capture impulse sales in other areas of the store, where the likelihood for purchase might be far greater. One retailer has seen a big uptick in titles like Cat Fancy and Dog Fancy when those magazines are displayed in the pet food aisle.”

Kid Stuff, and More Recently, Cowley helped one Hy-Vee location create a 4-foot children’s book section. “When toy and diaper sales are down, it’s hard to justify a 24-foot diaper section,” he explains. “We created a section of books [ranging] from 99-cent board books to $9.99 Dr. Seuss titles.” Kiddie lit, according to Cowley, has been a bright spot in the category. “Children’s book sales are up 80 percent for us, with titles from Little Golden Book popularly priced at $3.99 to $4.99 doing phenomenally well,” he pointed out. Cowley has also had much success with a 10-for-$10 program from Ashland, Ohio-based Bendon Publishing that includes licensed characters from such hot properties as “Minions” and “Frozen,” many with movie tie-ins. “We did a great cross-docking program with Schnucks, where we brought in pallet stackers of Bendon coloring books,” says Cowley. “Printed kids’ books have had double-digit gains in the last two years, with licensed products

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

particularly popular,” afrms Addis. “Grocers had actually been growing the overall book category a few years ago, and we’re seeing an uptick again as sales of e-readers fatten.” Hybrid bookazines continue to be one of the fastest-growing segments in the category. “Bookazines, particularly those retailing for between $10 and $15, have seen very strong growth for the magazine industry,” says Romollino. “Tere’s still growth because the category is relatively new,” notes IPDA’s Lynch. “With retail prices as high as $15, the success of the category indicates that consumers still value printed content and are willing to pay for it.” Another emerging trend is the sales explosion of adult coloring books. “Tese books have intricate design patterns, and are being used as a method of relaxation for individuals, and sometimes even as part of social gatherings,” explains Tom Cox, VP of mass and distributor sales at New York-based Penguin Random House. “Sales in this category have skyrocketed across many retail segments, with prices ranging from $6 to $18 per book.” According to Cox, young-adult titles that have crossover appeal to adults, and books connected to flms, such as “Te Girl with the Dragon Tattoo,” “Fifty Shades of Grey,” and “Gone Girl,” have propelled the book category. “Te good news for book sales is that movies provide an enormous marketing moment to connect with a whole fresh group of readers,” he notes. “Often, a more casual reader will discover and purchase a book once the marketing and trailers for the flm begin to circulate. ‘Te Martian,’ ‘In the Heart of the Sea,’ ‘Miss Peregrine’s Home for Peculiar Children’ and ‘Te Danish Girl’ are all highly anticipated flms with great track records as books.” PG

2012

2013

2014

2015

Four years in a row –

the best keeps getting better. Total Pages Page Share

Progressive Grocer

Supermarket News

2015 808 46.66%

2015 245 14.13%

2014 689 38.77%

Grocery Headquarters

2014 375 21.10%

2015 2014 679 714 39.21% 40.13%

Source: 2015 Inquiry Management Systems

There’s a reason Progressive Grocer outperforms the competition – the best content, backed up by integrated information and marketing resources that let you: 1. Reach the right retailers 2. with the right message 3. in all the right ways. Suppliers face challenges like never before. Progressive Grocer, its allied brands, and powerful resources like integrated research and database solutions from Stagnito Business Information, help suppliers target all the retail executives who can lead to the success of a brand. Call Jeff Friedman at 201-855-7621 to learn how Progressive Grocer can increase the impact of your b-to-b marketing program.

New Products

Progressive Views

6 Strategies for CPG Growth Tips for moving from defense to offense. By Shiv Iyer

Leaders regularly innovate across a wide range of offerings to ensure they remain ahead of the competition in the eyes of their target consumer.

168

hile consumer packaged goods (CPG) companies’ business situations vary greatly, there’s a common thread among the leaders: Tey’ve aggressively begun pivoting their focus from cost takeout to more holistic, proftable growth. C-suites at leading CPG companies have an intimate understanding of what consumers want across industries, and constantly monitor external trends and regularly assess end-to-end business operations through a critical lens. Tey’ve begun translating these forward-looking insights into the following six strategies for reinvesting in growth.

Revamp Offerings Leaders regularly innovate across a wide range of oferings — ranging from making packaging more convenient to expanding into cross-category bundling — to ensure they remain ahead of the com-

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

petition in the eyes of their target consumer. For example, one leading confectionary manufacturer developed stand-up, resealable pouches that take up less shelf space, while some major CPG companies have pursued joint ventures to expand oferings and branch into new territories, which indicates a strategy of targeting the changing preferences of mass-market consumers.

Get Closer to Consumers With the proliferation of social media and multiple digital engagement channels, the ability to infuence and impact purchase has increased substantially. Industry winners excel at using data and analytics to closely monitor shifting consumer preferences across channels. Furthermore, they funnel these insights throughout their organizations to augment core capabilities, such as innovation, shopper marketing and pricing. A large global snack food manufacturer is using predictive analytics to analyze multiple

categories and customer segments. Trough data diagnostics, statistical modeling and a what-if simulation dashboard, the company is gaining clearer insights on past performance and seizing new opportunities for optimizing trade spend, and it can plan for the future with the help of predictive planning and selling.

Choose the Right Channels Leaders don’t follow the pack — they determine the optimal channel mix for their specifc business. Tose determinations are based on what consumers want and what the portfolio strategy demands. Goto-market structures and investments should align with these channels to drive sales. Macro trends, such as shifting demographics (e.g., the rise in 55-plus, urban and Hispanic consumers), are pushing CPG companies to tailor their ofers in the respective preferred channels to penetrate these segments, drive volume and build brands. Some high performers are executing tailored approaches for unique channels. It’s anticipated that the strongest growth will come from nontraditional channels. Protect the Core Leaders know their value proposition because they regularly evaluate the consumer types, categories, channels and markets where they excel. Tese companies also measure how they perform against the competition in each of their areas, and make forward-looking investments to ensure that these advantages remain intact. Investing in the future often calls for re-educating consumers. For example, one leading CPG company invested in its marketing eforts for a challenged product line by increasing spending and launching an ad campaign focused on the quality of the ingredients in its products. For some CPG companies that realize certain brands aren’t fortifying the core, there’s a safety valve: private equity. CPG companies have increasingly sold distressed business units or brands to private equity frms, allowing them to limit their losses and refocus on their existing core businesses. Innovate the Business Model Market winners are always looking to expand. To do so, they monitor shifts in consumer demand to predict where the market is heading. Tese businesses tailor their product innovation strategies and go-to-market models to these shifts. By aligning with the future of the market, they are able to get a leg up on the competition in identifying and capturing new pockets of growth. For example, in the frozen processed food category, the consumer desire for freshness has opened the door to new players that focus on simple, natural ingredients. Similarly, demographic shifts have opened up

the playing feld to new entrants. Private labels that deliver ethnic foods are growing market share (16.3 percent in 2014), perhaps due in part to the rise in Millennials, who have multiethnic preferences for products like burritos, curries and potstickers. Across all of these examples, the companies that remain most relevant are the ones that not only keep the closest pulse on consumer buying patterns, but also rapidly adjust their products and channels to mirror preference shifts.

Grow Through Inorganic Innovation External market factors, among other forces, are prompting leaders to enact operational changes at CPG companies. Private equity frms are pushing the CPG market to transform, and CPG companies themselves are buying and selling brands to run offensive corporate strategies. Te common denominator across all of these changes is that high performers realize that acquisitions and transformative partnerships can allow them to better deliver on their value propositions and accelerate growth. Tese companies regularly assess and acquire targets in adjacent spaces and pursue unique partnerships — sometimes with companies from other industries. Given the volume of innovation being driven by smaller companies that operate in niches, CPG companies should borrow a leaf out of the pharma playbook and take a more venture-led approach to investing in innovation. Tis allows them the ability to be at the forefront of future trends, and it also potentially lowers the cost of acquisition before these innovations reach the tipping point.

Industry winners excel at using data and analytics to closely monitor shifting consumer preferences across channels.

Prepare For the Future Te CPG market is changing dramatically and at speed. Cost-cutting has become a “way of life” for almost all CPGs as they work to improve margins. However, the new reality is that CPG businesses must get the most out of the scarce dollars they have by becoming more sophisticated about how dollars are allocated to categories, and how the business model can support those strategic decisions. Costcutting is necessary; however, investing in business model innovation and enacting portfolio shifts that drive growth and bolster the long-term business strategy are equally important. Charting the right business model course will only become more important in the future, as consumer expectations around products and channels continue to rapidly evolve. Te strongest players will make bold moves early — and often — to allow sustainable growth. PG Shiv Iyer is managing director for consumer goods consulting at Dublin, Ireland-based Accenture.

October 2015 | progressivegrocer.com |

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Food, Beverage & Nonfood Products

Best of Both Worlds

“There is a natural synergy between Utz [Quality Foods] and Heluva Good, and we are excited to offer consumers a new way to snack by combining the taste of two snacking experts,” spokeswoman Sarah Barow says of Wavy Utz Potato Chips, a crunchy snack infused with the flavor of HP Hood’s Heluva Good brand dips. Available in French Onion, Bacon Horseradish and Jalapeño Cheddar varieties, the gluten-free line is available for a limited time in 2.875-ounce bags for an SRP of $1.49. www.heluvagood.com; www.utzsnacks.com

App-ealing Bites

Having recently marked its 10th year in business, The Perfect Bite Co. has launched 15 frozen appetizers — six classic offerings from the brand’s original line, as well as nine artisanal creations like Baked Brie Bite with Apple Chutney, Green Chile & Cheese Pie, and Sweet Onion & Kale Risotto Bite. The offerings, which use on-trend ingredients, complement a new packaging design that aims to inspire consumers to incorporate the appetizers into their own party trays, using herbs, greens and a variety of color combinations. The SRP range is $5.99-$8.99. www.theperfectbiteco.com

Flexible First Aid

Using its patented easy-open, grippull-stick system, the Easy Access brand has launched an innovative adhesive bandage that can be applied with one hand, simplifying first aid on the go. The bandages are flexible, water-resistant, and available in a protective, portable pack arranged by color and size. A value pack of 90 bandages has an SRP of $5.99. www.easyaccessbandages.com

Custom Cakes

Featuring two layers of moist, rich cake topped with a decadent truffle, Waterfall Cakes by Dawn Food Products Inc. are frozen, ready to decorate, and can be easily customized with fruit, flowers and frosting accents. Available in chocolate and vanilla varieties, the 7-inch-round cakes are packaged under a large dome with ample lid space to protect custom decorations. Waterfall Cakes are available for a suggested retail price of $14.99 each. www.dawnfoods.com

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Cocoa On The Go

“We’re excited to add to our line of single-serve coffee with a high-quality cocoa in our innovative soft-pouch format that generates less waste than the leading portion packs,” says Cynthia Hswe, VP of marketing for Boyd’s Coffee Co., of the brand’s single-serve hot cocoa product. Crafted with highquality ingredients for a rich, creamy, smooth chocolate flavor, the offering is available in 10-count boxes, and compatible with brewers that accept K-cup portion packs. The SRP range is $9.99-$10.99. www.boyds.com

All the Dressings

Two entries in Litehouse Foods’ Organic Dressings & Vinaigrettes line have recently hit store shelves, supported by a newly refreshed design concept. The Rosemary Balsamic and Ginger with Honey varieties, which are USDA Certified Organic, NonGMO Project Verified and Gluten-Free Certified, come in a revamped bottle design that aims to reflect the clean ingredients inside. The Litehouse Organics line retails for $5.99 per bottle. www.LitehouseFoods.com

Heart Health

Turmeric Complex with Vitamin D3 & Magnesium Tablets aim to support the nervous system and heart health. Manufactured and packaged in conformance with industry and government standards, the daily antioxidant protection from Mason Vitamins contains a naturally harvested herbal product with no added sugar, starch, yeast, soy, corn, wheat, dairy, fish, tree nuts, peanuts, egg or fragrance, as well as no artificial colors, flavors or preservatives. The product retails for a suggested $13.99. www.masonvitamins.com

Smart Salads

Offering a new option that pairs convenience with nutrition, Eat Smart’s Southwest Vegetable Salad Kit is the latest variety in the brand’s chef-inspired gourmet salad line. Featuring the tastes, textures and flavors of Southwest cuisine, the all-in-one kit blends Savoy cabbage, red cabbage, radishes, carrots and kale, topped with crunchy corn, yellow and blue tortilla strips, cheddar cheese, and a chipotle ranch dressing. The Southwest Vegetable Salad Kit comes in 10-ounce and 24-ounce bags for an SRP range of $3.99$4.29. www.eatsmart.net

Shelf Score™ — august 2015 Purchase INteNt score

New Product

1 2 3 4 5 6 7 8 9 10

Oreo Thins: Mint Pepperidge Farm Brown Butter Rum Cookies Progresso Stew: Hearty Vegetable Stew with Beef Cream of Wheat Instant Hot Cereal To-Go: Cinna-Apple Walnut Gluten Free Fruit & Oats Chex Clusters Nabisco Ritz Bits Pizza Kellogg’s Origins Ancient Grains Blend Cereal: Touch of Honey Jif Cookies ’n Cream Flavored Hazelnut Spread Pringles Jalapeño Bacon Nature Valley Sweet & Spicy Chili Dark Chocolate Bar

72% 66 62 59 58 57 55 52 51 47

source: Instantly Shelf Score

October 2015 | progressivegrocer.com |

171

Industry Events

GMA Leadership Forum

Leading by

Example Grocery manufacturers take on transparency, omnichannel marketing and shopper behavior. By Jim Dudlicek

anufacturers of packaged foods will soon have a convenient tool to provide consumers full disclosure about what’s inside. Tis new transparency initiative was unveiled during the annual Grocery Manufacturers Association Leadership Forum, held at Te Broadmoor, in Colorado Springs, Colo., Aug. 15-16. Te two-day education and networking event for the food industry’s top executives included a variety of leadership tracks focusing on e-commerce, omnichannel marketing, shopper behavior and other key issues.

nEED To know GMA’s Jim Flannery explains the group’s product transparency initiative.

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Transparency Pamela Bailey, president and CEO of the Washington, D.C.-based Grocery Manufacturers Association (GMA), said the voluntary transparency initiative comes in response to consumers’ desire for more information about what they’re eating. It’s also a tactical maneuver, as GMA and other industry groups have opposed the hodgepodge of local and state regulations aiming to wield authority over how packaged foods are labeled. Calling it “something truly breakthrough,” Bailey described the initiative as providing consumers with full access to the content and makeup of branded products in a “simple, clear digital format.” (GMA requested that the trademarked name of the app not be revealed until it’s rolled out publicly in January.) Consumers can reach the app’s landing page via search, QR code on product packaging of participating brands, or through other apps that partner with the initiative.

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GMA Senior EVP Jim Flannery, who led the app’s 18-month development, explained that when consumers scan a product’s bar code with a mobile device, they’ll arrive at a brand landing page where they can fnd complete ingredient and allergen information. Te individual brands control the content, Flannery noted: “Te brands are having the dialogue with the consumer.” GMA has high hopes for public acceptance of the app, based on focus group feedback, video of which was shown during the forum. Consumer panelists praised the app as “user-friendly” and appreciated its simple design, clear presentation and deep resources; some noted it saved them hours usually spent researching ingredients on Google. Brand manufacturers can participate in the initiative by building their own landing page using GMA’s style guide, outsourcing the web work, or using a “plug-and-play” version designed by Te Hershey Co. and donated to GMA for use by its members. Te initiative is an ongoing project, Flannery said: “It will provide brand owners with the opportunity to have a deep dialogue with consumers.”

Evolving Preferences More consumers favor evolving preferences such as health and wellness, safety, and social impact in their paths to purchase, and both retailers and manufacturers need to respond accordingly. Tat’s the overall message conveyed by the results of a study conducted by Deloitte Consulting, GMA and the Food Marketing Institute, and discussed in a session called “Driving Growth Among Disruption: Capitalizing on the Shifting Consumer Food Value Equation,” moderated by FMI SVP Mark Baum. Te study, which included more than 5,000 consumers and 40 industry executives, revealed that more consumers are including a wider set of drivers in their purchasing decisions. Tese “evolving” drivers — health and wellness, safety, and social impact — are overtaking the historic drivers of taste, price and convenience as the leading reasons for choosing particular products over others. Deloitte’s Tom Phillips characterized the shift as a “big, nuanced” move toward these new drivers. Overall, 51 percent of consumers surveyed emphasized these evolving preferences more heavily over traditional drivers, Phillips noted. Perhaps most signifcantly, this shift is consistent across all ages, income levels and geographic regions. For example, these evolving drivers are cited by 52 percent of consumers age 18 to 34 and 35 to 49, and 51 percent of those age 50 to 80. Further, consumers are defning “safety” as being free of harmful or artifcial ingredients, clean labeling and nutritious content. “It’s not a niche area for business — it’s something that needs to be addressed,” said panelist Beth Ford, EVP and chief supply chain and operations ofcer for Arden Hills, Minn.-based dairy co-op Land O’Lakes. Carolyn Sakstrup, VP of Target’s guest center of

excellence, noted that Minneapolis-based Target is forging partnerships with multiple manufacturers to create products for its Made to Matter brand addressing these in-demand product attributes. Jim Borel, EVP at Wilmington, Del.-based DuPont, asserted that transparency is essential in this new normal: “If you don’t provide the information, consumers assume the worst.” Ford argued that technology in food makes consumers uncomfortable: “It’s a marketing and communication challenge, because the facts are quite friendly.” Rob Aukerman, president of North American commercial operations for Greenfeld, Ind.-based Elanco, warned against overreacting to preference changes, lest manufacturers invest heavily in what may turn out to be soft trends. Aukerman contended that the study results demonstrate a demand “for choice in the marketplace.” In response, Borel urged manufacturers and retailers “to work together to tell these great stories in a way that resonates with consumers.” Tat will ultimately determine who wins and loses in the years to come, as good communication will defne what a company is to consumers, Ford said, and success will belong to “the companies that are the most agile in responding to consumers.”

ExPErt PanEl From left: accenture’s Keith Barringer, Hershey’s J.P. Bilbrey, Unilver’s Kees Kruythoff, Frito-lay’s thomas Greco and ColgatePalmolive’s Justin Skala.

CEO Panel A panel of the CPG industry’s top executives discussed “Te New Era of Value Creation: Agile Efciency and Growth,” moderated by Accenture’s Senior Managing Director Keith Barringer. Te panel discussed the impact on their respective operations and the overall market from fuctuating consumer demand, channel blurring and greater expectations for product customization. October 2015 | progressivegrocer.com |

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Industry Events

GMA Leadership Forum

Barringer presented 2015 CAGNY data showing that power brands, innovation and supply chain effciency are leading priorities of CPG companies. J.P. Bilbrey, chairman, president and CEO of Te Hershey Co., in Pennsylvania, noted that he’s paying greater attention to activists, a strategy that has impacted his company’s cocoa procurement and driven its move toward simpler recipes for its products. “Millennials are the best thing to happen to us,” declared Kees Kruythof, president of Englewood Clifs, N.J.-based Unilever North America, because they believe in the idea of a “social enterprise.” Kruyhof noted that his company’s fastest-growing brands are those with a social purpose. In discussing Amazon’s impact on CPG companies, Justin Skala, president of Colgate North America and global sustainability for New Yorkbased Colgate-Palmolive, said manufacturers must view it “through the lens of how my core consumers are going to be viewing the brand.” According to Skala, it’s “an opportunity to get closer to our core consumers” in building brands more efectively. Talent will be a key element of CPG operations moving forward. “We rely on people to drive our agenda,” said Tomas Greco, CEO of Plano, Texas-based Frito-Lay North America at PepsiCo, explaining that his company’s business strategies are built around capabilities, culture and talent. Kruythof stressed the importance of employee well-being and personal development in maintaining an efective workforce. Te panelists expressed optimism regarding the coming years. “Tere’s no better time to be working in consumer products than today, except for the future,” Greco asserted. Bilbrey concurred: “Tere’s never been a more exciting time — anything is possible.” Other sessions over the two-day conference included: “Te Digital Store of the Future and CPG Collaboration in the New Age of Omni-channel Commerce”: Leaders from IGA, PepsiCo and Cognizant Business Consulting discussed how retailers and manufacturers need to forge closer partnerships to better engage consumers. Most sales are the result of some combination of instore and online experience, yet only 12 percent of retailers currently ofer an omni-channel experience. “We have to react faster to what shoppers want,” noted Mark Batenic, president and CEO of Chicago-based IGA. “Loyalty is what you did in the last fve minutes.” Te future of retailing, the panel concluded, is about “making human nature digital.” “Winning CPG Strategies in Online Grocery”: Leaders of Instacart, Coupons.com and Drizly shared how they’ve helped drive trafc and sales

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for traditional retailers by helping them leverage online shopping trends to better connect with consumers. Instacart and Coupons.com partner with grocery retailers, while Drizly connects consumers with liquor retailers to facilitate online home delivery. “Shoppers want relevance at every turn,” said Coupons.com’s Mir Aamir. Digitally infuenced ofine sales are growing rapidly for CPG brands: 40 percent of in-store grocery purchasing is infuenced by digital, according to A.T. Kearney research. Other speakers included retired Gen. Keith Alexander, former head of the National Security Administration, on cybersecurity; and David Gergen, senior political correspondent for CNN and former adviser to presidents including Reagan and Clinton, speaking on leadership, accountability, trust and the current state of politics.

Honoring Their Own GMA also honored several of its members with annual awards for their innovations and contributions to the industry. E&J Gallo Winery and Coca-Cola received this year’s CPG Awards for Innovation and Creativity. Modesto, Calif.-based Gallo won for its creation of a next-generation sales system. Having transformed over the past decade from a winery focused primarily on mid- and value-price wines to a wine and spirits company with oferings across almost every price point, region and spirits category, the company needed to change the way it worked as a sales organization, enabling a truly mobile sales force through visual discovery, mobile access, and opportunity analysis and prioritization. Atlanta-based Coca-Cola won for its highly successful “Share a Coke” campaign, launched in the United States during summer 2014. Te campaign, guided by research from the original 2011 campaign in Australia, allows people to fnd their names and those of friends and loved ones on Coke bottles. “Share a Coke” was a top global trending topic in July 2014, with nearly 700,000 posts across all social platforms. Additionally, GMA presented its Hall of Achievement Award to George Deese, chairman of the board of Tomasville, Ga.-based Flowers Foods, and Greg Wasson, retired president and CEO of Deerfeld, Ill.-based Walgreens. GMA’s highest honor, this award recognizes the extraordinary service and contributions of the food, beverage and consumer packaged goods industry’s most distinguished leaders. PG Follow our live conference and trade show coverage at Progressivegrocer.com and on Twitter at @pgrocer and @jimdudlicek.

Unata Expands Office to Support Growth Opportunities

Toronto -based omni-commerce solution provider Unata has experienced 800 percent yearover-year growth based on new customer relationships, including Lunds & Byerly’s, Raley’s, Haggen, and Lowes Foods. With 100 percent growth of its internal team during 2015, Unata plans to hire 15 additional employees before the end of the year at its recently expanded corporate office. Unata has had three major technology releases this year, and will implement at least two further rollouts in 2015 while continuing to execute on its aggressive technology roadmap, which is in part shaped by its retail partners. A sponsor of Progressive Grocer’s Top Women in Grocery Awards, Unata plans to host its own client summit this month to focus on digital technology that enhances the customer experience. “We are excited to be growing as rapidly as we are and are looking to continue this growth and success into Q4 and 2016 with our new customers and through a focus on innovation and design,” says Marc Faucher, Unata COO and CFO. www.unata.com

Beaver Street Fisheries Partners on Sustainability Initiative Jacksonville, Fla.-based Beaver Street Fisheries Inc. (BSF) and Sustainable Fisheries Partnership (SFP) are joining forces to ensure the environmentally and socially responsible and sustainable sourcing of seafood. Te partnership will involve comprehensive assessments of the sustainability of all seafood sources, along with the creation of improvement projects to enhance environmental performance. Te ambition is to ensure that all seafood sources for BSF originate from approved, certifed sources or from fsheries and farms engaged in improvement projects. “After having participated with the Sustainable Fisheries Partnership in some responsible fshing and sustainability forums, we feel quite comfortable and confdent that this is a solid partnership that will continue to improve BSF’s commitment to responsible and ethical sourcing at the highest level,” says Casey Marion, director of sustainability initiatives and quality management systems. http://beaverstreetfisheries.com; www.sustainablefish.org

Hail Merry Hires COO Dallas-based vegan dessert maker Hail Merry has hired Rick Roberts as its COO. In this newly created position, Roberts joins founder Susan O’Brien and CEO Sarah Palisi Chapin in setting the company’s strategic direction and accelerating Hail Merry’s national expansion. “Hail Merry is capitalized for signifcant growth, bolstered by strong demand for our products and Roberts strengthened by new marketing partnerships, so it is a great time to enhance our team with such a widely respected leader as Rick,” Chapin says. O’Brien adds, “Rick’s expertise will help Hail Merry stay true to its mission of delivering healthy and great-tasting food to help people achieve higher health, even as the company experiences exponential growth.” Roberts’ role encompasses all aspects of manufacturing desserts and snacks from the company’s state-of-the-art commercial kitchen. His previous positions include VP at Mesquite, Texas-based Gourmet Cuisine, a Le Duf America company that specializes in soups, sauces and dressings for the foodservice and retail channels, and director of perishable operationsmanufacturing at San Antonio-based H-E-B. www.hailmerry.com

New Logo, CFO Revealed at Ready Pac Irwindale, Calif.-based value-added produce marketer Ready Pac Foods Inc. has unveiled a new logo in what it says is the frst step in the brand’s company-wide transformation and alignment with its brand values of being “the most innovative fresh food company.” Customers will begin seeing the new brand identity immediately in Ready Pac’s online presence, with product packaging, vehicles and other assets rebranding in the coming months. Notable characteristics include a new font for the brand, a more defned green leaf and the addition of the

word “foods.” Te new visual identity refects the brand’s focus on innovative, fresh and forward-thinking oferings as it continues to meet growing consumer demand for healthier and indulgent on-the-go produce and snack options. “Te fresh and new aesthetic of the design truly speaks to where Ready Pac is as a company today,” says Tony Sarsam, Ready Pac CEO. Working with Sarsam will be Dan Redfern, who joins the company as CFO. Redfern brings experience from a number of industries, including consumer packaged goods, fnance and consulting; he previously held roles at Popchips Inc., Circle Foods/Tyson Foods and PepsiCo. www.readypac.com October 2015 | progressivegrocer.com |

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the last word

Seasoned to Perfection

ith the all-important Q4 selling season hovering in full view, food retailers are revving up for the requisite anticipated windfall of cheer, and justifably so. If early predictors are any indication, the fast-approaching holiday season is crammed with opportunities, particularly for those best prepared to seize them. When contemplating the overstored landscape and ferocity of competition residing in all pockets of the saturated terrain, it’s little wonder that the oncebankable fnal months of the year have been profoundly disappointing for many retailers of late. Likewise, when thinking about the massive role food and related products play in seasonal celebrations, coupled with a signifcantly heightened awareness of both the pitfalls of complacency and the resulting consequences, I can’t help but think that supermarkets which fail to seize the moment this year will have no one to blame but themselves. Let’s begin with a quick peek under the hood of Deloitte’s 2015 retail holiday sales forecast, which projects a comparable 3.5 percent to 4 percent increase, both in stores and online. An improving labor market, increasing home values and relief at the pump are giving more Americans reason to believe the economy is gaining valid traction, per Deloitte’s retail and distribution economists, who further forecast an 8.5 percent to 9 percent increase for the online and mail-order channels. While online sales continue to grow, there’s a decided silver lining for conventional operators. “We’ve passed the tipping point where online and mobile engagement play a greater role generating sales in the physical store — where more than 90 percent of retail sales [still] occur — than in digital channels alone,” says Rod Sides, vice chairman, Deloitte LLP, and retail and distribution sector lead. But make no mistake: Digital interactions will loom large with consumers’ holiday shopping, which Deloitte anticipates will impact 64 percent of the estimated $434 billion in retail store sales — a fgure that refects the amount of traditional brick-and-mortar sales afected by shoppers’ use of all forms of digital devices. “Our research shows that people who shop on their phones, tablets and other devices while in stores are more likely to make a purchase and spend more overall,” Sides reports, noting that nearly 80 percent of shoppers intend to engage with a retailer or brand through digital channels before setting foot inside a store.

Accordingly, digital interactions provide an expedient lay-up for the savviest of retailers to impart inspiration for the perplexed, reviews for the undecided, product locators for the disoriented and options for the high-tech/high-touch combo-shopper. “Retailers that are likely to come out ahead this holiday season are the ones connecting the dots between their digital channels and their stores — rather than focusing solely on the online ‘buy’ button,” asserts Sides. While the news clearly bodes well for many of our core readers, it goes without saying that the battle set to unfold in the forthcoming, makeor-break 12 weeks promises to be a doozy. Consequently, retailers seeking to move the needle forward must not only have a clear understanding of consumer expectations, but also a cogent, compelling stand-and-deliver strategy. If not, let there be no doubt: Someone else will.

***

Prior to signing of, I’d be remiss in failing to point out two noteworthy updates, the frst of which pertains to our refreshed PG Pulse on page 12, which serves up in a nutshell the most popular stories appearing on our website in the past month. “While we’re bound to see some unexpected headlines making their way to the forefront of future installments,” notes PG Digital Editor Kyle Shamorian, “the snapshot of our top-trending online stories in this issue precisely refects the high interest in Haggen’s spectacular fameout, A&P’s inevitable descent into oblivion and Ahold USA’s new Boston bfresh hybrid.” Additionally, it’s with great pride and pleasure to bestow our 2015 Retailer of the Year honor to Meijer — the Michigan-based supercenter pioneer whose purposedriven culture splendidly refects the impressive strides the company has made to grow its brand and build afnity with an ever-expanding base of Midwest shoppers. On a related note, we wish the regional retailer’s departing president, J.K. Symancyk, all the best as he embarks on his new career as president/CEO of Katy, Texas-based Academy Sports + Outdoors. Having scored the last major interview with him just a few short weeks before his exit, we have no doubt that Symancyk’s nine-year stint at Meijer will serve him well in his new post. PG Meg Major mmajor@stagnitomail.com Twitter @Meg_Major/@pgrocer

Digital interactions provide an expedient lay-up for retailers to impart inspiration for the perplexed, reviews for the undecided, product locators for the disoriented and options for the high-tech/high-touch combo-shopper.

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advertiser index 3M 5 Generation Bakers Achatz Handmade Pie Co. Adusa Inc. Agro America Airius Allegro Creative Design House Anchor Packaging Anheuser-Busch Inc. APIO Beaver Street Fisheries Blount Fine Foods Blu eCig Bob’s Red Mill Borges Usa / Star Foods Campbell Soup Company Cargill Meat Solutions Catalina Celsius, Inc. CH Robinson Cherry Central Cooperative, Inc. Cheyenne International Coca Cola NA Cummins-Allison Corp. Dawn Food Products Inc. Daymon Associates Delgrosso Foods Inc. DelMonte Fresh Domino Foods Duke Energy E&J GALLO ECR Software Edgewell Personal Care Enjoy Life Natural Brands Evolis Inc. Forte Product Solutions Ge Lighting Solutions General Mills Inc. Giorgio Foods, Inc. Gold Medal Products Good2Grow Goya Foods Inc. Grimmway Farms Hass Avocados Icex Foods From Spain Trade Commission Idaho Potato Commission Irving Consumer Products J&C TROPICALS Kelloggs Company Limoneira Loving Pets Products LUVO Mann Packing Co. Inc. Mariani Packing Company Mars Chocolate NA Mason Ways Indestructible Inc. MillerCoors LLC Mizkan Four Monks Cleaning Vinegar Mondelez Nash Produce National Raisin Company Nestlé Nutrition Old Orchard Juice Co. Original Additions c/o Berg Marketing Perfetti Van Melle USA Inc. Peri & Sons Farms Pfizer Consumer Health POM Wonderful Pompeian Olive Oil Post Consumer Brands Premier Nutrition Profoot Footcare Products Robbie Flexibles Rudi’s Organic Bakery Ruiz Foods Products Inc. Sanders & Morley Candy Save-A-Lot Simplot Custom Foods Sun Maid Raisins Sun Pacific Sunlight International Tabletops Unlimited The Holiday Gift Check Program The J.M. Smucker Company TNS / Kantar Tosca Ltd. Trion Industries Inc. Turbana Corp. Tyson Foods USA Pears Well-Pict, Inc. Wholesum Family Farms Wholly Guacamole Wonderful Halos Xlear Inc. Ziyad Bros Inc.

50 69 64 73 130 94 58 138-139 Inside Front Cover 124 98-99 125, 178-Inside Back Cover 34 24, 25 119 45 17 37 59 141 63 152, 153 65 55 67 51, 157 60 112-113 101-104 143 33 5 161 77 97 142 44 48-49 120 81 85 7 128 107 27 8-9 71 111 43 118 146 70 115 26 87, 149 159 11 57 39 110 79 53, Insert 83 151 59 148 127 62 13, 40-41 90-91 15 95 58 126 84 93 68 3 89 21 108-109 122 Back Cover 129 23 74-75 116-117 Insert 35 137 30-31, 132-133 121 135 114 86 19 66 61

www.3m.com www.5generationbakers.com www.achatzpies.com www.adusaInc.com www.onebananas.com www.airiusfans.com www.allegrocreativedesigns.com www.anchorpac.com www.anheuser-busch.com www.eatsmart.net www.beaverfish.com www.blountfinefoods.com www.blucigs.com www.bobsredmill.com www.starfinefoods.com www.campbellsoup.com www.cargill.com www.catalinamarketing.com www.celsius.com www.accelerateyouradvantage.com www.cherrycentral.com www.cheyenneintl.com www.coke.com www.cumminsallison.com www.dawnfoods.com www.daymon.com www.delgrossos.com www.freshdelmonte.com www.dominosugar.com www.duke-energy.com www.gallo.com www.ecrs.com www.edgewell.com www.enjoylifefoods.com www.evolis.com www.forteproductsolutions.com www.gelightingsolutions.com www.genmills.com www.giorgiofoods.com www.gmpopcorn.com www.good2grow.com www.goya.com www.grimmwayfarms.com www.hassavocadoboard.com/LOTtrade www.foodswinesfromspain.com www.idahopotato.com www.irvingconsumerproducts.com www.jandcenterprises.com www.kellogg.com www.lemonsforlife.com www.lovingpetsproducts.com www.luvoInc.com www.mannpacking.com www.mariani.com www.effem.com www.masonways.com www.millercoors.com www.fourmonksclean.com www.mdlz.com www.nashproduce.com www.nationalraisin.com www.nestle.com www.oldorchard.com www.originaladditions.co.uk www.perfettivanmelle.com/ www.periandsons.com www.pfizerplus.com www.pomwonderful.com www.pompeian.com www.postconsumerbrands.com www.premiernutrition.com www.profoot.co www.RobbieFlexibles.com www.rudisbakery.com www.ruizfoodservice.com www.sanderscandy.com www.save-a-lot.com www.simplot.com www.sun-maid.com www.sunpacific.com www.dulcich.com www.ttucorp.com www.giftcheckprogram.com www.jmsmucker.com www.TNSGrowthPoint.com www.toscaltd.com www.triononline.com www.turbana.com www.tyson.com www.USAPears.org www.wellpict.com www.wholesumharvest.com www.eatwholly.com www.halosfun.com www.xlear.com www.wildgardenhummus.com

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October 2015 | progressivegrocer.com |

177

Mac & Cheese

Mac & Cheese with Uncured Bacon

Exclusive Manufacturer & Partner of Panera Retail Soups, Sides & Meals.

No Compromises. Panera bakery-cafĂŠ inspired Chicken & Broccoli Cheddar Orzo features chicken raised without the use of antibiotics. Your customers will love Panera at Home bowls for the marriage of super convenience and premium quality. Put Panera sales power on your shelves. When your customers eat well, you proďŹ t well. For more info, call your Blount sales rep at 800-274-2526.

Available in conveniently-sized microwavable bowls that give busy customers more choices for eating well.

Turkey Bolognese

Turkey Chili with Beans

Turkey raised without the use of antibiotics

Contact your Nestlé Nutrition Sales Representative to learn more about our cutting-edge category insights All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. © 2015 Nestlé.

POWER OF POWDER A convenient breakfast solution the whole family loves. • Top-performing SKUs in the On-the-Go Breakfast Nutrition Category1 • Important to optimize your assortment: Research shows there are distinct consumers for both Powder and Ready-to-Drink in this category2 • The Powder shopper is loyal and spends more per shopping trip versus the traditional breakfast category2 • Powder is an attractive solution for families with kids2

1. Source: Nielsen Food and Mass, Latest 52 Weeks Ending June 20, 2015 for the Instant Breakfast Category. 2. Source: Cadent Loyalty Leverage Analysis 10/14. All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. © 2015 Nestlé.

THE RISE OF READY-TO-DRINK A portable and delicious breakfast solution. • Carnation Breakfast Essentials® is the #1 Ready-to-Drink brand in the On-the-Go Breakfast Nutrition Category - With sales growth over 73% versus a year ago1 - Has the #1 and #2 Ready-to-Drink SKUs3

• Make sure to offer variety to meet consumer preferences - Carnation Breakfast Essentials® Ready-To-Drink is available in chocolate, vanilla and strawberry ﬂavors - For consumers who want more protein to start their day, now also available in High Protein with 15g of protein per serving3

#1 Brand with top selling SKUs in the On-the-Go Breakfast Nutrition Category4 NEW

NEW

Contact your Nestlé Nutrition Sales Representative to learn more about our cutting-edge category insights 4. Source: Nielsen Data latest 52 weeks ending June 20, 2015. All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. © 2015 Nestlé.