Honoring Our Nation’s Commissaries
DeCA striving to boost sales, savings for ‘our customers’ worldwide
by Treva Bennett, senior content creator
The Defense Commissary Agency (DeCA), headquartered at Fort Gregg-Adams in Virginia, operates a worldwide chain of 235 commissaries providing groceries to U.S. military personnel, retirees, service-related disabled veterans and their families. Under the leadership of Director and CEO John Hall, DeCA is aiming to significantly boost sales and savings for its patrons.
Hall, who has served as DeCA director since June 2023, has set a goal to reach $8 billion in sales by 2028. DeCA currently generates $4.7 billion in sales annually. By growing sales, the agency will be able to deliver even greater savings to customers.
A non-profit agency, DeCA receives appropriated funds from Congress through the Department of Defense. In fiscal year 2023, DeCA received about $1.4 billion in appropriated dollars, Hall said.
“We returned nearly $1.6 billion in savings, specifically, $112 million more in FY23 in savings to our customers than we received in appropriated dollars to run the Defense Commissary Agency,” he said.
From 2022-23, DeCA sales grew by nearly 10 percent. In 2024, Hall said growth is expected at about 3 percent, “which is a little lower than we wanted but higher than the commercial grocery industry.”
The growth in recent years follows a period of declining sales.
Hall said DeCA had achieved $6 billion in sales in FY2012. That was followed by about 10 years of declining revenue, which he attributed to the use of a cost-plus 1 percent pricing model. The agency now uses a variable pricing model.
He added that the goal to drive sales to $8 billion is “all about increasing savings to our customers. When we get to $8 billion in sales, that $112 million return on investment becomes a $1.1 billion return on investment. Increased sales generate increased savings for our customers. That is the reason we’re driving ourselves to achieve such a stretch goal.”
Jim Flannery, chief transformation officer for DeCA, said the commissary benefit is part of the military pay and benefits package. By law, DeCA must provide a 23.7 percent savings over what its patrons can get outside the gate, he noted. Recently, the agency has worked with the Secretary of Defense to take that savings up to 25 percent.
“The more revenue we generate, the more 25 percent savings we deliver. We amplify what Congress gives us. We turn back to our military patrons more than the taxpayers fund us. By 2028, we are pretty confident we’re going to give back twice as much in savings as we received in appropriations to our patrons,” Flannery said.
The savings puts real dollars in the pockets of commissary patrons.
Hall added that the variable pricing model enables DeCA to sell key value items such as milk, bread, eggs and diapers at a greater savings rate.
“For example, we save about 35 percent on meat for our customers. We invest in those items. We essentially subsidize those items so that we can sell them at an even lower price. For those things that our customers really need, we generate really excellent savings,” Hall explained.
Rebuilding brand
DeCA is working to rebuild its brand and to get more shoppers into the stores.
“We still have a perception out there that we’re not saving [customers] as much as we actually are, but we have the data to demonstrate that. We set the goal a year ago and have
multiple building blocks that have dollar goals associated with them that will get us to $8 billion,” Hall said.
He also noted that while there is no sales tax on commissary purchases, there is a 5 percent surcharge. Those dollars are used to invest in improving DeCA’s infrastructure, which Hall said is a “serious challenge.” He added that the 25 percent savings includes that 5 percent surcharge.
“Because of those 10 years of declining sales, we didn’t generate the surcharge we needed to routinely replace things like chillers and freezers, those things needed to maintain store operations,” he said.
As a result, the agency is in “a little bit of a hole,” with about a $3.2 billion bill to pay. Hall said DeCA is working with Congress and others to get some appropriated dollars to help pay that bill.
Spreading the word
In an effort to eliminate misconceptions that still linger about using the commissary benefit – and to reach eligible patrons who are not using their benefit – DeCA has increased its outreach. One initiative, DeCA Outside the Walls, delivers the benefit outside the walls of the commissary, as its name suggests.
Hall said the Army has kiosks that it operates in areas convenient to where soldiers live and/or work. DeCA supplies the kiosks, which makes access to the benefit far easier, he added.
Other initiatives include making bulk deliveries to certain locations. These include isolated areas that don’t have a commissary. Hall said these locations have increased from about 12 last year to 38 in 2024.
“There’s a lot of expanding the benefit and delivering the benefit to locations other than the stores themselves,” he said.
John Hall
Jim Flannery
Best Commissary - Camp Humphreys - 2023 and 2021
Honoring Our Nation’s Commissaries
Navy Command Master Chief Mario Rivers, senior enlisted advisor to the DeCA director, is working to reach out to junior enlisted service members to help them understand that they have access to the commissaries.
Doing so can help fight food insecurity. DeCA is committed to providing service members and their families “with the resources that are necessary to access an adequate amount of nutrition without sacrificing the quality of their life,” Rivers said.
Many of the junior enlisted may feel that the commissary is not for them – that they don’t belong in there. “I talked to a lot of young service members who won’t shop in the commissary predicated off of that fact,” Rivers said.
He and his team are working to dispel those misconceptions by talking not only to activeduty service members but those who are retired or who have a certain level of service-related disability. They are going to the boot camps and visiting veterans’ organizations, “trying to find those pockets of folks who may not feel as if they’re an eligible patron. We’re tackling that day in and day out,” Rivers said.
He added DeCA also works to educate these groups on the fact that the commissaries accept SNAP and WIC in-store and also via DeCA’s e-commerce platform, which includes Commissary CLICK2GO.
“This is something that’s an ongoing battle,” Rivers said. “It’s all about education, ensuring that folks understand what they are eligible for. I think we’re going to get there, sooner than later.”
Hall said he recently approved a letter to give to the Veterans Administration that explains that primary caregivers of disabled veterans are authorized to use the benefit.
“One of the things we need to do better is educate our disabled veterans that they are eligible,” he said. “Of all the categories of people who can shop in our commissary, that’s probably the category that knows the least about the benefit and the fact that they’re eligible.”
Hall said DeCA is working closely with DAV organizations at the local level, along with the VA and other programs, to ensure this group of veterans understands they have access to it.
In other outreach, Hall noted that DeCA has been able to identify 3.5 million eligible households that live inside a 20-mile radius of a commissary. Of those households, 1.7 million routinely shop in the commissaries. Hall recently sent a letter to the 1.8 million households that were identified as not taking advantage of the benefit, explaining their eligibility and offering them a coupon for $25 off a $100 purchase.
“Every time we’ve piloted something like this, we’ve seen numbers come back into our stores at a really high rate and a good return rate. They come back for a second shop. That’s our goal, to drive those customers back in our doors,” Hall said.
Rivers noted that they are seeing results from the letter, with people asking questions and seeking more information.
DeCA also is using social media and other messaging, such as billboards, to try to reach eligible customers.
Improved in-stock rates
Improving in-stock rates is another goal for DeCA. In the past year, Hall said the in-stock rate in stores has increased from about 94 percent to 97 percent.
“It’s taken a lot of effort, but the reason that’s important is if it’s not available for purchase, the customer doesn’t have access to it. So we’re going to drive that access up. Our goal is 98 percent,” he said.
DeCA set the goal to achieve in five years but has come close to achieving it in one year.
“That’s been a very positive thing for our customers. We still have some locations where we need to get better. Guam’s always a challenge, but overall we’re at 97 percent in stock across the enterprise and very proud of achieving that standard,” Hall said.
He pointed out that the improvement is a result of “a lot of hard work” from DeCA employees.
Another goal is to have the not-in-stock with a balance on hand (NIS with a BOH) rate in the stores down to less than 1 percent.
“In other words, if it’s less than 1 percent, if it’s in the store back room, it’s pretty much on the shelf. We’ve already achieved that standard,” Hall said. “Our store personnel do a really good job of ensuring if it’s on hand, it’s on the shelf. That’s been a positive development as part of this 97 percent in-stock rate.”
Flannery added that every day, in every store, employees known as CAOs (computer assisted ordering) walk the aisles. They oversee the flow of product into the stores.
If they see a hole in the shelf, they scan it, he said. They are immediately notified if that product is in the back room, which is NIS with a BOH.
“They measure it, we get that raw number, but then they go fix it. That number was 2-3 percent out-of-stocks. That’s now below 1 percent. You measure it, you identify, you put the processes in place to fix it. That’s been a huge success,” Flannery said.
If the item is not on hand, that means it’s out of stock. That is tracked back to the distributor to try to determine the root cause, Flannery said.
He noted that DeCA has a store ordering and inventory management system, but it is only as good as the processes and the business rules around it.
"Those have really been where we’ve made those interventions,” he said. “We built in accountabilities. We measure that every week.”
Hall said the agency is moving to a new enterprise business system to help manage the business. It will be purchasing a commercial off-the-shelf system that has been proven in the industry. It will allow DeCA to have a much better rewards program and target incentives to the people who will use them.
Rivers added that the CAOs are “the backbone of the operation.”
“Those are the folks behind the scenes … they’re the unsung heroes. Without the CAOs, we wouldn’t be as successful as we are in regards to our stock management of our product.”
Investing in workforce
DeCA employees are all civilians, with the exception of five military personnel. Of the 12,500 DeCA workers, about 63 percent have some connection to the military, Hall said. Thirty percent are spouses of service members, while 16 percent are other family members.
“So 46 percent – nearly half of our workforce – is a family member of a currently serving service member. That’s really tremendous,” Hall said.
DeCA offers a liberal leave-without-pay program for these family members, who often move every two to three years when the service member in the family is transferred to another base.
Hall said if there is an opening at the commissary, DeCA will bring them on board when they get to their new location and are ready to return to work.
“There’s no competition, no selection or anything like that,” he said. “That’s a really good program to enable our spouses and other family members to continue employment within DeCA through those frequent permanent change of station moves.”
DeCA employees receive the same benefits as other Department of Defense civilian employees. However, they are the only DOD civilian employees authorized to shop in the stores.
Commissary jobs range from cashiers and stockers to department managers, store directors, zone managers and area directors.
DeCA also offers courses at its headquarters and support center for store directors and classes related to produce, meat and food safety. It also offers them for its overseas employees.
Flannery noted that the role of store director at DeCA is “as important as it is in commercial retail.” Some of them are promoted to zone managers or area managers. “We move our best people into our biggest, fastest growing stores or where we have the need,” he said.
Mario Rivers
Honoring Our Nation’s Commissaries
Military commissaries continue to evolve since their formation in 1825
American military commissaries provide a benefit of discounted groceries and household goods to active duty, Reserve and Guard members of the uniformed services, retirees of these services, authorized family members, DOD civilian employees overseas and other designated categories.
Commissaries constitute one of the top non-pay benefits for today’s military and are an important inducement to recruitment and retention of skilled personnel, while simultaneously holding down taxpayer costs.
The commissary benefit has a rich history dating back to 1825, when Army officers at specified posts could purchase goods at discounted prices from commissary department storehouses. Over the years, the commissary system has evolved to serve a broader range of military personnel and their families.
Initially, only officers were eligible to shop at commissaries. However, enlisted men were granted the same privilege in 1867. This marked the beginning of the modern era of commissary sales. The commissaries were intended to provide a reliable source of food and supplies to military personnel, supplementing their official rations and offering savings compared to civilian vendors.
As the American military expanded, so did the commissary system. Stores were established overseas, starting in the Philippines and China in 1899-1900. Eventually, all branches of the military adopted their own commissary agencies.
In 1990, the Defense Department consolidated the separate service commissary systems into the Defense Commissary Agency, aiming to improve efficiency and save money.
The commissary value proposition goes beyond significant savings to include clean and safe stores, healthy options and excellent customer service. This important benefit reinforces DOD’s efforts to improve the economic security of the force and provides a strategic “insurance policy” for military families during times of national emergency –pandemics, hurricanes and earthquakes, among others. The commissary ensures food security for military families in all situations they may face.
Today’s customers save thousands of dollars annually on their purchases compared to similar products at commercial retailers.
DeCA also is establishing exchange partnerships with the grocery industry, specifically around its expanding prepared foods program.
“One of our goals is to greatly expand the number of prepared food offerings that we have in our stores,” Hall said. “We’re establishing this partnership with two commercial entities that do very well in that so that we can send DeCA personnel to those locations and spend 90-120 days and bring those lessons learned back to DeCA, so we can get even better … we want to get really good in that space.”
DeCA also established a program with the Institute for Defense and Business in Chapel Hill, North Carolina, about a year ago to develop courses that will enable DeCA employees to better understand commercial grocery chain best practices. The program consists of academics with expertise in this area, along with mentors from the grocery industry.
“We’re really excited about this prospect of continuing that relationship and expanding our industry exchange partnership so that we can get more commercial grocery experience inside DeCA,” Hall said.
Support from supplier community
According to Flannery, DeCA’s partnership with the supplier community has been very important in achieving some of the agency’s goals.
“We can’t do what we’re doing without the supplier community,” he said. “A lot of what we’ve done over the last couple of years has been to work with that community to align on common goals and objectives, so that we create a win-win-win-win.”
He noted that DeCA can’t deliver the savings to its customers unless the supplier
community helps it get the right cost of goods and understand how to create retail prices.
“When we get that benefit right, it drives revenue. When it drives revenue, it delivers more of that 25 percent savings into more patrons’ hands,” Flannery said.
He said DeCA should be “every supplier’s best customer, especially now. We’re growing faster than industry. We’ve grown over 15 percent in the last three years, and we’re nonprofit. We’re never going to come back and ask for an ever-increasing percentage of margin.”
Flannery said DeCA has gotten the supplier community to re-engage in the commissary business over the last couple of years and to better understand “the importance of the patron that we serve and then working together to serve that patron. It’s been a really great story.”
DeCA works with about 20 percent more suppliers than commercial grocery, Flannery said. In the U.S., DeCA is supplied by SpartanNash, Coastal Pacific, UNFI and C&S. It also works with manufacturers. Overseas bases are supplied with the same U.S. goods.
“Part of our delivery is that taste of home,” Flannery said. “When we buy the Pampers, Kraft Macaroni & Cheese, Hellman’s Mayonnaise, you won’t find some of those brands overseas. We purchase them here, put them on containers and send them to our overseas bases to make sure that our patrons have U.S. goods – the taste of home.
“Any supplier who’s got a product that our patrons want, we’re going to want that product in the store. Those new, innovative products that are the fuel for growth, we want to be first to market.”
Suppliers interested in doing business with DeCA can go to commissary.com for more information.
Overall, DeCA is committed to delivering exceptional value and convenience to military families. Its ambitious growth plans and focus on customer savings position the agency to be a vital resource for the military community for years to come.
DeCA remains steadfast in its vision: “To be THE grocery
provider of choice for its eligible patrons – delivering a vital benefit exclusively for the military community and their families.”
Fort Myer 1943
Fort Riley Commissary in Kansas 1957
Marine Corps Air Station Cherry Point Commissary in North Carolina 1982
Arnold Air Force Station Commissary in Tennessee 1974
Agency aims to draw shoppers, ensure offerings meet their needs
by Treva Bennett, senior content creator
The Defense Commissary Agency (DeCA) is making significant strides to increase its customer base and enhance product offerings, according to Edward Walters III, executive director of sales, marketing and e-commerce.
DeCA is working to attract more eligible shoppers to its commissaries. Walters emphasized the importance of reaching those who may not be aware of their eligibility or the benefits of shopping at a commissary.
“I have the responsibility to make sure that we bring in as many eligible shoppers as we can. There’s a lot of individuals that are within 20 miles of a commissary who are not shopping the commissary. One of my big efforts in marketing is to increase the number of households shopping the commissary,” he said.
A major initiative for DeCA is reaching veterans with a serviceconnected disability to let them know of their eligibility. “That’s really important to us, because we want to provide at least 25 percent savings to everyone that deserves it,” Walters said.
He also wants to make sure the stores have the products and meal solutions that patrons seek. “We want to operate, in a lot of ways, like a commercial grocery store, but we also pay a lot of attention to the needs of our patrons coming in.”
He noted that DeCA, as a government entity, does not make a profit on sales. However, selling more products allows the agency to provide more savings to customers. “If they’re buying at our location and they’re filling up their baskets, achieving the 25 percent savings, that’s giving them the benefit they deserve.”
Walters said he looks at it as two levers.
“Trying to get those deserving, the very best customers in the world, or potential customers who are not yet shopping, into the commissary. And I also want to make sure that we’re giving them the categories, the products and some meal solutions in terms of ready to eat,
ready to heat in a microwave or ready to cook. And make that easier, too,” Walters said. DeCA has launched a direct mail campaign to reach eligible patrons who haven’t shopped at a commissary in over a year. It includes a coupon for $25 off a $100 purchase.
“We’re getting a tremendous response,” Walters said. “We are getting a lot of people calling … emailing, texting with a lot of positive comments.”
DeCA also is working to reach eligible patrons who are on SNAP or WIC.
“We welcome it,” Walters said of the programs. “We want those that are SNAP and WIC eligible not to feel any negativity about coming into the commissary.”
He noted that being able to access that 25 percent savings at the commissary will allow them to buy more items with their monthly allotment than they would get versus shopping outside the gate.
He also touted DeCA’s Commissary CLICK2GO e-commerce platform, where customers can order online, pull into the parking lot and have their groceries brought out.
For the CLICK2GO pilot program, Walters said the agency is targeting a certain number of stores and offering $15 off a $75 order.
DeCA also is piloting a delivery program in some stores.
Walters said the agency works with veteran organizations, such as VFW and American Legion, to help spread the word about eligibility, and the Veterans Experience Office to help improve the customer experience.
Edward Walters III
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Honoring Our Nation’s Commissaries
make sure that we are receiving the produce optimally, that we’re keeping things at the right temperatures and that we’re giving it as much freshness as we can.”
The senior enlisted advisor at DeCA also works closely with Walters and his team to make sure they are getting the message out to patrons who may not think they are eligible. They also are reaching out to welcome new personnel to the military bases, as well as those within a 20-mile radius of the bases who are eligible for the benefit. Social media channels also are used to spread the word.
He also noted “tremendous success” partnering with suppliers and brokers in terms of managing sales and helping with Commissary CLICK2GO promotions.
“We have iPads in stores signing people up, and we get brokers that help us with that. When we want to do sampling, we get help from our suppliers, and then obviously leveraging the promotions in the trade dollars that our suppliers give us is amazing, too, and helps augment our small marketing budget to ensure that we reach the most deserving eligible patrons.”
Fresh category offerings, meal solutions
Beyond traditional grocery items, DeCA is focusing on expanding its fresh and prepared food offerings.
“We try to look at everything through the lens of the patron. I think those at the stores have always been customer focused, and that’s one of the delights of going to the commissary. But everyone in the headquarters and support center, we’re really trying to focus on the customer experience and how the patron views things.”
He noted that the produce department is important to the overall impression of a store. However, as a government agency, there have been challenges with supply chain and logistics in providing fresh, quality produce.
At a weekly meeting with the DeCA director, Walters said fresh produce is one of the items discussed.
“We’ll look at our savings. If our savings level isn’t where it needs to be, we make adjustments on that,” he explained.
“Quality is very important to our customers, so we are not only working with the produce suppliers to increase the quality, but we’ve also been working on produce training around the world with the stores, in particular, those who manage the produce departments, to
Bridget Bennett, supervisory category manager for specialty/meat/produce, said a wellmerchandised produce department is crucial for attracting and retaining customers.
“The merchandising team is always looking at the assortment available in the market to be sure that the commissary’s variety compares,” she said. “Social media is all the rage, and we work hard to make sure we have those trending items available for our customers.
“More and more, consumers are trying new recipes that include specialty produce, so we try to balance our assortment to include those trending items in addition to the staples.”
She added that the stores offer as much local produce as possible when in season, depending upon the growing region.
“This encourages our shoppers to choose the commissary for their produce needs, and marketing the local produce encourages shoppers to buy what’s fresh and local, enhancing both flavor and quality,” she said.
Walters said that the commissaries are known for their quality meat selections. “Our goal is to have people feeling about our produce the same way that they feel about our meat. We are doing that by working both from the supplier angle and then our store operations angle to make sure that, as an enterprise, we are improving that. It’s something that we won’t be satisfied with until our customers are completely satisfied.”
In the meat department, Walters said DeCA wants to continue to deliver savings and quality and to better communicate that to the shoppers, especially during an inflationary period when budgets are tight.
Walters explained that the agency also aims to provide convenient meal solutions, such as ready-to-eat and ready-to-heat options.
One of DeCA’s recent initiatives is the introduction of 10 new prepared meals developed in partnership with a chef. The meals are designed to be microwavable and offer high-quality taste and value.
“They are really good,” Walters said. “We went out and we benchmarked the quality, the taste and the pricing, and we can’t be beat on any one of those elements.”
He also noted the selection of marinated meats and other prepared food ready to eat, ready to heat or ready to cook. “The strategy is to have a selection at a good price and quality.”
DeCA’s Freedom’s Choice ready-to-eat items, like this Chicken Pot Pie, are now in commssaries. (DeCA photo)
Bennett added that the commissary delis offer ready-to-eat cold options such as sandwiches and salads and hot items like ribs, rotisserie chicken, lasagna, spaghetti, pizza and an assortment of sides.
“In addition to these items, we are planning an expansion of our breakfast options so that our shoppers on the go have a chance to grab breakfast, lunch or dinner,” she said.
Achieving savings for patrons
DeCA is committed to providing its patrons with significant savings.
In September 2022, Walters said the Secretary of Defense issued a memo on “taking care of our people.”
One item in the memo was that DeCA will provide patrons with at least 25 percent savings.
In the continental U.S., he said the agency uses Nielsen data as a benchmark. “We’re not pulling that out of our hat.”
Walters outlined the agency’s strategies for achieving this goal, including strong cost of goods negotiation, everyday low pricing and focusing on key value items.
“We’re not about profit,” Walters stated. “We don’t look to make margin outside of a small margin to cover the gap between the appropriation we get in funding and how much it takes to run the stores. It’s a very small amount.
“We are really focused on strong cost of goods negotiation and really working to
negotiate. We’ve negotiated very successfully with a lot of suppliers to get EDLP (everyday low price) pricing.”
In addition, DeCA has implemented a KVI (key value item) strategy, which focuses on pricing items that are most important to food-insecure patrons.
“We have a bunch of products that we have a strategy on, either the percentage savings that we will not be beat on, or in certain cases, a dollar or cents amount that we won’t be beat on,” Walters said.
The category managers, merchandisers and pricing teams work with suppliers, giving them goals and scorecards and staying in contact. “We hold the suppliers accountable, but we hold ourselves accountable, too.”
Sales performance, future plans
DeCA has experienced substantial growth in recent years, with sales increasing by nearly 10 percent in the previous year.
“We put over $1.4 billion in savings directly into the customers’ pockets. That was important for us,” Walters said.
He attributed this success to various initiatives, including increased savings, expanded product offerings and targeted marketing efforts.
He noted that the more commissaries sell and the more they buy will hopefully lower the cost of goods they are able to procure.
“It’s really an efficiency play that the more money we make, the more product we buy, and we hope to be able to deliver that into savings for the customers.”
Commitment to value, service
As DeCA continues to evolve and adapt to the changing needs of its patrons, the agency’s commitment to providing exceptional value and service remains unwavering.
“My charge is savings, availability, selection, working with our operations and logistics and supply chain and industry partners to make sure that we have the products that [customers] want on the shelf at the best price and to reach those that are eligible but not shopping,” Walters explained. “I want to exceed the expectation of our customers. This really is a passion and a mission.”
Honoring Our Nation’s Commissaries
Modernization path, supply chain transformation keys to growth
by Treva Bennett, senior content creator
The Defense Commissary Agency (DeCA), part of the Department of Defense (DoD), is making significant strides to improve supply chain efficiency, enhance in-stock rates and modernize its operations.
DeCA Supply Chain Director Joel Lockhart said the agency, which operates 235 commissaries, is working on supply chain transformation. While there have been improvements, he said it is important to build in resiliency as there are always supply chain disruptions, particularly in the government-owned and -operated central distribution centers overseas.
DeCA has eight central distribution centers – six in Asia and two in Europe, along with a central meat processing plant. Lockhart said whether it’s weather or a labor strike, “we’ve got to find ways to be proactive and build resiliency into our supply chain, and we’re trying to do that.”
He said the agency wants to replicate the shopping experience that military personnel and their families have in the U.S., no matter where they are in the world.
“That’s a tough challenge, because you’re sourcing most of that from the States, so you’ve got this long lead time. As we modernize, we’ve got to figure out ways to reduce our out-of-stocks.”
The journey to modernization will go a long way toward achieving that goal.
“DeCA, I’d describe it as a unicorn,” Lockhart said. “We’ve got to get more commercial. We’re a military organization, so there’s some statutory things we have to follow, but I think the modernization path and also our supply chain transformation will help us to do even better.”
Jim Flannery, DeCA’s chief transformation officer, said there have been huge improvements in the supply chain since coming out of the COVID-19 pandemic.
“It’s moved from manufacturer capacity to trucker time and distance,” he said for deliveries within the continental U.S. He added that part of DeCA’s mission is to provide its patrons based overseas with “the taste of home.”
Transportation to those overseas commissaries and CDCs involve sealift or airlift. Sending via sea is preferred, as airlifts are more expensive.
“Not only are we impacted by the U.S. supply network, but [we are] tremendously impacted by the supply network, the ocean freight, from the Port of Los Angeles or the ports on the East Coast, over to our OCONUS (outside the contiguous United States) locations,” Flannery said.
Lockhart added it is important to understand the export timeline to ensure they are ordering “in the right volume and velocity” to meet the six- to eight-week shipping time. “I would say DeCA has some unique supply chain challenges, particularly overseas.”
Lockhart noted that DeCA uses appropriated dollars when shipping overseas, which is considered second destination. First destination includes Alaska and Hawaii.
“I’m responsible for managing about $90 million in second-destination transportation,” he said. “We take ownership at the port, and then we move it forward with these appropriated dollars.”
Lockhart said these second-destination dollars help insulate the pricing for DeCA patrons.
Flannery said that DeCA’s role is to amplify the appropriation dollars by turning them back into benefits. Staying in stock and giving customers what they want gets them
to come into the stores with confidence, he said. “The more they buy, we turn it into more benefit.”
‘People, processes and technology’
DeCA is looking at “people, processes and technology, end to end from the supply chain,” Lockhart said. The agency has unique processes and software, he added.
Flannery said the goal of the transformation is to bring DeCA from a 95 percent in-stock rate to 98 percent, while at the same time eliminating non-value-added costs. Getting those out of the system will allow DeCA and its trading partners to better meet the needs of shoppers.
DeCA is about a half a percent of U.S. grocery sales, he said. However, the way the business has grown up around the uniqueness of how the DeCA go-to-market strategy has developed, “we don’t necessarily leverage the industry standard process that supports the 99.5 percent of the business,” Flannery said. “We’ve got all these workarounds. Anytime there’s a workaround system, it adds non-valueadded costs.”
Working through supply chain experts, he said they have identified these workarounds in the end-to-end supply chain.
“This isn’t just a piece of it. This is everything that goes back from the time the product comes off the supplier’s manufacturing line until it goes out of the front end of the stores,” he said.
Flannery also noted that DeCA’s supply network is more expensive than the industry average.
“This project is all about identifying what’s driving our cost today, identifying what we need to do to change the processes, the systems, in order to eliminate those costs, and then get those costs out of the system so we can better service our patrons’ needs,” he said. “Our processes and ordering patterns are disconnected and, most importantly, there’s no clear line of visibility or accountability.”
As an example, he said he recently saw a trailer from a distributor at a store. The trailer held 26 pallet positions, and was full. Next to it was a 40-foot trailer with three pallets on it.
“It was overflow from the other one. Systems should never allow that,” Flannery said. “Systems and accountability should be built so it optimizes transportation and never facilitates shipping a non-fully-utilized truck.
“Now, if you’re going to run out of stock and you absolutely need those three extra pallets to get you through the next delivery, you’ve got to accommodate that. But modernizing our systems and processes, building greater transparency and accountability will eliminate those costs.”
Better technology for its people and processes will help improve the DeCA supply chain, Flannery said. He noted that one of the challenges in managing in-stocks is a measure of “not in stock with a balance on hand.”
“That means there’s a hole on the shelf,” he said.
An employee known as a CAO (computer assisted ordering) in each store is responsible for about 5,000 items –two or three aisles. Every morning, they go down those aisles and scan holes on the shelves. This shows if there’s a balance on hand or no balance on hand. DeCA manually manages that process.
“If the CAO had that balance on hand, they would send somebody to come fill the shelf. If there was no balance on hand, and they couldn’t find out the status of the order on their hand held device, they had to go back into their office, get online, log into the distributor’s website and find out if there’s inventory at the distributor,” Flannery said.
As a technology solution, he said they recently began using next-generation handheld terminals. These devices are linked to the distributor’s inventory to show if there’s a product in transit, which saves the CAOs time.
“Modernized technology is helping us automate that process,” Flannery said.
Lockhart, a self-proclaimed “data geek,” said they also are starting to use data analytics to identify issues and what areas they need to focus on.
“As we’ve improved, our in-stock rates have gone from 94 to 97 percent, so we’re couple of years ahead of schedule. In Europe, they’ve been at 98 the last two months … over the course of time, we were able to raise the rate because we started to identify the root cause and develop a corrective action plan,” he said.
While progress has been made on the in-stock rate, Lockhart noted the agency is not lowering costs. “We still have inefficiencies that we’re paying for in the supply chain,” he said.
Looking ahead, he noted opportunities to use artificial intelligence at DeCA, but “we’re not there yet.”
“What’s exciting is we’ve got challenges, but we’re turning those into opportunities.”
Supplier community
DeCA must do a better job of linking its demand creation decisions with the supply chain capabilities, Flannery said.
In a traditional retail grocery environment, he said there’s clear visibility and connectivity in the decision-making chain. When the buyer and seller decide to promote certain items on a certain date and in a certain way, “in a connected supply chain, there’s lots of visibility on the impact of that right on through to the time that order is placed with the supplier,” Flannery said. “We don’t have that today. At least we don’t have it systemically. It’s muscled around. Sometimes it works really well; sometimes it doesn’t.”
He noted that the modernization and transformation of the supply chain and the engagement with the supplier community is linking those pieces better.
Lockhart also noted that the eight overseas CDCs do not all use the same software. As they move forward in their process, he said they are exploring new warehouse and inventory management capabilities as part of the EBS 2.0 modernization effort.”
Another challenge is the fact that DeCA does not own its facilities.
“We basically rent them,” he said. “That backroom capacity, which is an important variable in the supply chain, is different in every store. Some are [the size of] my office, and some are like a warehouse. We’re including all of that in the modernization effort.”
Overall, Lockhart said the biggest challenge DeCA faces regarding supply chain, from a strategic level, is “the inability to really see ourselves from end to end. We’re not lowering costs, and we’re doing it at an incredible amount of human intervention. We’ve got to find ways to remove that human piece of it, modernize, so that we have standard, repeatable processes.”
Lockhart added that the most important part of the equation is DeCA employees, noting the importance of talent management and leader development. “We also need to cast the net wide and make DeCA a brand where people will want to come and work. We’ve got to get the right talent on the team,” he said. “I think the people part is a challenge, but it’s an opportunity to grow the team and make the team as powerful as we can.”
Joel Lockhart
Honoring Our Nation’s Commissaries
Community outreach includes fighting hunger, supporting military families
The Defense Commissary Agency (DeCA) is a vital resource for military families around the world. Beyond offering discounted groceries, DeCA plays a significant role in fighting food insecurity and supporting military children’s education through innovative programs.
Feds Feeds Families: Record-breaking campaign
The Feds Feeds Families program is a cornerstone of DeCA’s fight against food insecurity. Keith Laughinghouse, Feds Feed Families project officer and commissary management specialist, reports a record-breaking year for the campaign.
“It’s probably one of the most important programs for us as an agency,” he said. Feds Feed Families is a program where all U.S. government agencies hold food drives to collect donations for food banks.
“Our agency deals with more than 1,200 food banks nationwide, so there’s a lot of people out there that this food reaches,” Laughinghouse said.
As of Oct. 3, donations had surpassed 11.9 million pounds of food, projected to reach 12 million by the closing date. This surpasses the previous record of 10 million pounds collected in 2023.
Of those 10 million pounds, Laughinghouse said 7.8 million pounds were collected by the Department of Defense, with DeCA collecting 4.1 million of that DOD total.
“This year, we’re already over 4.2 million, so we’re going to beat our last year’s total,” he said.
The DeCA collection comes from its stores in the continental U.S.
Since the Feds Feeds Families program began in 2009, it has collected more than 107 million pounds of food for donation.
To increase participation, DeCA offers bags customers can purchase to donate, ranging from $5 to $30.
Laughinghouse, who took over the program this year, said he gave the stores the opportunity to work with their local food banks and create bags more tailored to their communities.
In addition, an online option allows contributions from anywhere in the world through Commissary CLICK2GO.
In addition to donations in the stores, Laughinghouse said there also are bins at the entrances to DeCA headquarters at Fort Gregg-Adams, Virginia.
“It’s a total effort, a lot of teamwork, that’s for sure,” he said.
Gift card program boosts military morale
DeCA’s gift card program offers a unique way to support military families. Laughinghouse said the agency has a business-to-business model where industry partners or organizations can buy gift cards in bulk to donate to soldiers and their families.
Through this model, more than 21,000 cards have been distributed this year, he said.
A large Army base plans to buy more than $2 million worth of cards for food insecurity rather than purchasing food, Laughinghouse said.
“It’s really going to make a lot of people’s holidays bright,” he said.
Individuals also may purchase gift cards for eligible patrons.
Gift cards can be purchased online at www.DECAcards.com.
Local store outreach
Laughinghouse also noted that commissaries engage in local community outreach. As a former store director, he said there are always requests for help.
“If it’s within our power, we do assist,” he said. “There’s a lot of community outreach that probably goes unnoticed.”
Reducing environmental impact, promoting sustainable practices
The Defense Commissary Agency (DeCA) is developing a sustainability plan that focuses on several key areas aimed at reducing environmental impact and promoting sustainable practices, according to Steve Edlavitch, DeCA engineer. “DeCA is committed to advancing sustainability initiatives to minimize environmental impact and enhance operational resilience,” he said. “The plan outlines specific lines of effort focusing on carbon pollution-free electricity, a 100 percent zero-emission vehicle fleet, net-zero emission buildings, and reductions in waste and pollution.”
He said the agency fully supports and aligns with all applicable Department of Defense (DoD) sustainability plans, directives and policies as well as all federal government executive orders and financial acquisition regulations that govern sustainability.
Key areas of the plan include:
➤ Strategic goals: The plan outlines specific targets for reducing greenhouse gas emissions, increasing energy efficiency and enhancing waste management practices. These goals align with broader DoD sustainability objectives.
➤ Initiatives and programs: DeCA’s plan will target several lines of effort, such as transitioning to carbon pollutionfree renewable energy sources, implementing energyefficient measures, promoting sustainable transportation options and launching programs for waste reduction and recycling.
➤ Collaboration: Collaboration is essential. DeCA works closely with other DoD agencies, local military communities and stakeholders to share best practices and resources, ensuring a unified effort toward sustainability.
➤ Monitoring and reporting: Regular monitoring and transparent reporting of progress are key components of the plan. This includes tracking metrics related to energy
use, emissions reductions and community engagement in sustainability initiatives.
➤ Education and outreach: The plan emphasizes the importance of educating employees and the public about sustainability practices. Training programs and awareness campaigns help foster a culture of environmental responsibility.
➤ Continuous improvement: The sustainability plan is dynamic and subject to regular review. The agency gathers feedback, assesses its effectiveness and adapts strategies to incorporate new technologies and methodologies. Overall, DeCA is committed to leading by example and fostering sustainable practices that contribute to a healthier environment.
Sustainability goals
Edlavitch said DeCA has several key areas of focus that reflect its commitment to environmental responsibility and resilience.
These include:
➤ Carbon pollution-free electricity: The goal, in alignment with Executive Order 14057, is to transition to a carbon pollution-free electricity supply, on a net annual basis, achieving net-zero greenhouse gas emissions. DeCA is exploring the advancement of its energy systems by integrating renewable energy sources, such as solar panels and wind turbines, and exploring partnerships for off-site renewable energy projects. Currently, DeCA has photovoltaic panels at two commissaries and is working toward installing similar systems across its facilities.
➤ 100 percent zero-emission vehicle fleet: By 2035, DeCA aims to have a fully zero-emission vehicle fleet. This involves developing a phased plan to transition the fleet to electric, hybrid and hydrogen fuel cell vehicles
while monitoring the installation of necessary charging infrastructure. The agency has a significant amount of electric-powered material handling equipment and it is committed to increasing the proportion of zero-emission vehicles as infrastructure becomes available.
➤ Net-zero emission buildings: DeCA’s objective is to achieve net-zero emissions in its buildings by 2050. It is focusing on energy-efficient practices and renewable energy integration, particularly in refrigeration management, which accounts for a significant portion of its energy consumption. It also is implementing watersaving technologies and has already reduced water usage by 34 percent over the past two decades.
➤ Reducing waste and pollution: DeCA is dedicated to minimizing waste generation and optimizing resource use, aiming for an 80 percent recycling diversion rate by 2030. This includes eliminating single-use plastic bags, enhancing recycling efforts and reducing food waste through improved inventory management and donation programs. DeCA’s goal is to not only comply with regulations but to lead by example in sustainable practices.
➤ Performance monitoring and reporting: DeCA emphasizes regular monitoring and reporting on its sustainability metrics to ensure transparency and accountability. Annual sustainability reports would outline its achievements, challenges and future goals, while stakeholder engagement remains crucial for continuous improvement.
“DeCA is committed to setting a standard for sustainability within the defense retail sector,” Edlavitch said. “By focusing on clean energy, zero-emission transportation, net-zero buildings and waste reduction, we are not only addressing environmental challenges but also contributing to a resilient and eco-friendly future for our military communities.”
Industry partnerships
DeCA also partners with a variety of companies and organizations to host special events or promotions throughout the year.
Todd Heasley, Fisher House Scholarships for Military Children liaison, said DeCA typically operates 26 display packages through the year, with many having themes such as Veterans Day in November. Some companies will promote specific products in coordination with Box Tops for Education, Special Olympics or ProCamps with the NFL.
“We do have phenomenal support from industry when it comes to these themes,” Heasley said.
In May, the free football ProCamps events were held in eight military communities as a result of a resale promotion between Procter & Gamble and commissaries and exchanges. Led by NFL football players, the two-day camps are open to children of active-duty military, reservists, retirees and DOD civilian employees.
Heasley said the J.M. Smucker Company hosts a Mission: Breakfast event, and Unilever and JR Motorsports also support DeCA through NASCAR.
On May 7, the J.M. Smucker Co. hosted its 15th annual Mission: Breakfast event. The company challenges commissaries to create and build in-store displays highlighting Smucker’s product line in an annual competition. DeCA’s JBSA-Lackland Commissary took top honors during the 2023 contest and hosted this year’s event.
Unilever and JR Motorsports have worked with DeCA for a decade to publicize the military’s commissary benefit. In March, the team unveiled the paint scheme featuring DeCA’s logo on the hood of the No. 7 Chevrolet driven by Justin Allgaier at Richmond Raceway. Also featured on the rear was the Commissary CLICK2GO online ordering destination, shop. commissaries.com.
Supporting education:
The Fisher House Foundation Scholarship Program
DeCA partners with the Fisher House Foundation to facilitate scholarship opportunities for military children. Heasley shared the program’s impressive track record: 13,812 scholarships awarded since 2001, totaling more than $24.1 million. The program offers annual
scholarships of $2,000 each to 500 military dependents through DeCA commissaries to the college of their choice.
Applications are typically open from mid-December to mid-February and require an online essay.
Heasley said typically every commissary has a winner, in the U.S. and overseas. “No government funds go into these scholarships,” he said, adding that donations from Fisher House, other organizations, companies and individuals fund the program. The names of scholarship recipients are sent to the store directors, who often hold a ceremony.
