Grocer2014 special issueull by Digital Gear

2014, SPECIAL ISSUE

C ALIFORNIA GROCERS A SSOCIATION

For the latest industry news visit www.cagrocers.com

A-CG IG

E IC O V

M A RK YOUR CA L E ND AR

September 21 – 23, 2014 | Palm Springs Convention Center | Palm Springs, California

STAN D OU T. BE A T RU E AN D AU T H EN T IC OR IGINAL . Traditional grocery? Meet non-traditional thinking. A place where one-size-fits-all is being replaced by one-size-fits-one. A place where true value is derived from expressing your true values. With today’s fragmented shopping reality, customers are looking for a different kind of retail relationship. Omni-connected consumers are embracing the companies and brands that express and demonstrate their values. How retailers define themselves is as important as the products on their shelves and the prices they charge. Truthfulness, integrity, sincerity, individuality, and openness are the new currencies that creates loyal customer connections — in-store and on-line. Join your industry colleagues at this mind-expanding, purposeful journey into the next generation of grocery retailing.

CON FERENC E SC H EDU LE OV ERV IEW S U N D AY, S E P T E M B E R 2 1 Illuminators Golf Tournament Opening General Session Opening Reception sponsored by Kraft Foods and E&J Gallo Winery After-hours Social Event sponsored by Heineken

M O N D AY, S E P T E M B E R 2 2

Collaborative Share Group Discussions Opening Remarks and General Session Pre-scheduled Business Meetings Reception & Illuminators Special Event

Multiple Educational Sessions & Retailer Spotlight Pre-scheduled Business Meetings Luncheon Keynote Address

T U E S D AY, S E P T E M B E R 2 3

www.cgastrategicconference.com

“ T he CGA Strategic Conference is one of the finest annual resources to better understand the direction of the industry, as well as strengthen relationships between retailer and vendor. The disciplines in place allow for a fast paced, very informative conference, which provides great opportunities for both new business, as well as honing existing programs.”

“ T his is by far the best conference I attend all year! Where else do you get uninterrupted time to discuss and review your business with so many retail managers and VP’s. At the retailer meetings there is a lot of give and take and both the retailers and myself walk away with a far better understanding of our business needs. This always results in more sales and profits for both of us!!”

Kurt Erickson, COO Vallarta Supermarkets

Bob Kennedy Jack Link’s

M EET W I T H CALIFOR NI A’S TOP RETA ILERS Don’t miss this unique opportunity to meet with California’s top grocery industry decision-makers. All conference sponsors receive customized, pre-scheduled meeting schedules as part of their investment. Whether you represent a new niche product, or an established national supplier, the CGA Strategic Conference provides a highly productive forum to meet one-onone with buyers from California’s top retail companies.

Last year’s sponsorship opportunities sold out early so call today to secure your spot Now for this year’s conference. The 2014 CGA Strategic Conference offers a variety of sponsorship packages and new, customized opportunities to promote your company’s products, equipment, or services. Sponsor benefits range from dedicated use of a Business Conference Suite, to 10' x 10' floor display spaces, or exclusively-presented social events. Whatever your desired outcomes, the 2014 CGA Strategic Conference offers a variety of opportunities to meet your goals and budget. Many thanks to

The Illuminators for their continued, generous support of the CGA Strategic Conference by providing the outstanding conference meal functions and entertaining social events. For complete sponsorship information including a list of participating retailers and sponsorship prospectus, contact:

Beth Wright Director, Events & Sponsorship California Grocers Association

(916) 448-3545 | (800) 794-3545 bwright@cagrocers.com

CGA

| Board of Directors

EXECUTIVE COMMITTEE

CHAIRMAN APPOINTMENTS

C A L I F OR N I A G R OC E R

DIRECTORS

Chairman of the Board Mary Kasper Fresh & Easy

Second Vice Chair Kevin Konkel Raley’s

Secretary Jim Wallace Albertsons LLC

First Vice Chair Joe Falvey Unified Grocers, Inc.

Treasurer Diana Godfrey Smart & Final Stores

Immediate Past Chair Kevin Davis Bristol Farms

Dave Jones Kellogg Company

Bob Parriott Twain Harte Market

Dora Wong Coca-Cola Refreshments

Raul Aguilar Anheuser-Busch InBev

Robert Digrigoli Procter & Gamble

Dan Meyer Stater Bros. Markets

Mimi Song Superior Grocers

Jon Alden Jelly Belly Candy Co.

Brian Dowling Safeway Inc.

Omar Milbis Rio Ranch Markets

Mike Stamper Nestlé Sales Division

Renee Amen Super A Foods, Inc.

Kendra Doyel Ralphs Grocery Company

Phil Miller C&S Wholesale Grocers

Kim Stokes Unilever

Teresa Anaya Northgate González Markets

John Eagan Costco Wholesale

Hee-Sook Nelson Gelson’s Markets

Dirk Stump Stump’s Markets

Joe Angulo El Super (Bodega Latina Corp.)

Jon Giannini Nutricion Fundamental, Inc.

Keith Olscamp Campbell Soup Company

Tiernan Summins Kraft Foods Group, Inc.

Kevin Arceneaux Mondelez International, Inc.

Dick Gong G & G Supermarket, Inc.

Kelly Augustin United Markets, Inc.

Robin Graf Whole Foods Market

Chris Podesto Food 4 Less – Stockton/ Rancho San Miguel Markets

John Swindell Food 4 Less/Foods Co. (A Kroger Company)

Dennis Belcastro Hillshire Brands Company

Rickey Hamacher Bimbo Bakeries USA

Bob Richardson The Clorox Company

Paul Turcotte Pepsi Beverages Company — WBU

Jennifer Bosma Harvest Market

Michel LeClerc North State Grocery, Inc.

Paul Cooke Nestlé Purina PetCare

Eric Lindberg, Jr. Grocery Outlet, Inc.

Brent Cotten The Hershey Company

Dave Madden MillerCoors

Dennis Darling Foods Etc.

Casey McQuaid E & J Gallo Winery

Casey Rodacker Mar-Val Food Stores, Inc. Dean Ryan Tops Fresh Market Harish Solanki Big Saver Foods, Inc. Naresh Solanki Bestway/Gardena Supermarkets

Jim Van Gorkom NuCal Foods Kevin Young Young’s Payless Market IGA

CONTENTS

A-CG IG

N E V OI C

F E AT U R ES

COLU M NS

COVER STORY: One Voice: Historic Merger Strengthens Grocery Industry

President’s Message An Independent’s Dream in California...................5

In May, the California Independent Grocers Association merged into the California Grocers Association, a strategic move that strengthens the Golden State’s grocery industry.

A Win-Win Situation

SITUATION

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N E VO I C E

| Special Issue

Three independent grocers with deep roots in California’s grocery industry share their views on why the CGA/CIGA merger will benefit independent grocers statewide.

From The Chair Typewriters and Grocery Stores..............................7

DEPA RT M EN TS Know the Law.....................................................10 CGA News..........................................................14 CGA Staff...........................................................28

Q&A: Issues and Opportunities

California’s evolving grocery landscape has created new challenges for independent operators, but also new opportunities, says the President and CEO of Unified Grocers, Inc.

CALIFORNIA GROCERS ASSOCIATION President/CEO Ronald Fong

Vice President, Communications Dave Heylen Vice President, Business Development & Marketing Doug Scholz

Director, CGA Educational Foundation Brianne Page Director, Local Government Relations Laura Peralta California Grocer is the official publication of the California Grocers Association.

Ronald Fong E-mail: rfong@cagrocers.com Editor Dave Heylen E-mail: dheylen@cagrocers.com Associate Editor Tony Ortega E-mail: tortega@cagrocers.com For advertising information contact: Tony Ortega E-mail: tortega@cagrocers.com

Executive Vice President, COO Retail Marketing Services Jeff Snadow

Director, Events & Sponsorship Beth Wright

1215 K Street, Suite 700 Sacramento, CA 95814 (916) 448-3545 (916) 448-2793 Fax www.cagrocers.com

C A L I F OR N I A G R OC E R

Senior Vice President, Government Relations and Public Policy Keri Askew Bailey

Executive Director, CGA Educational Foundation Shiloh London

Congratulations!

Better than ever â&#x20AC;&#x201C; together! Unified Grocers salutes CGA on their merger with CIGA. Teaming up for a brighter future and a clearer voice.

Phone: 800-724-7762 | unifiedgrocers.com

PRESIDENT’S MESSAGE

An Independent’s Dream in California As with many immigrant families, my grandfather, Dan Fong, left his family near Guangzhou, China, in the late 1930s to forge a better life in America. After working various labor-intensive jobs and saving every nickel they could, he and his brothers found their way to the American dream – owning their own business. In his case, the business was an independent grocery store called, “Highway Market.” The year was 1941 and over the next 50 years my family grew our grocery business.

business, legislative and regulatory challenges are common to all. Proposition 65 warning issues, WIC licensing, minimum wage bills, sick leave bills, egg regulations – these issues do not discriminate amongst retailers. That is why I am particularly pleased that in May the California Independent Grocers Association (CIGA) successfully merged with CGA.

RO NALD FONG President/CEO

More than 125 strong independent grocers, along with more than 50 supplier companies that serve them, join hundreds of their peers that already are CGA members. In fact, nearly 80 percent of CGA’s retail grocery companies are independent operators.

My family’s story is not uncommon. In California, thousands of families have lived the dream in a similar manner.

Congratulations to our newly combined board of directors for having the vision, forethought and leadership in bringing small, medium and large independents and chains together under one association. We look forward to working closely with all our members in the years to come as we collaborate to improve and strengthen California’s vibrant grocery industry. n

While the small “independent grocer” market share has dipped in the past decades, the dream has not. My sisters, cousins and I still recall and re-live the pride of owning an independent market. The memories of literally knowing every customer that walked into our store, the extraordinary lengths we went to provide customer service and credit, the great times we had making 10-cents an hour as kids, the joy of working together as a family, are etched in our minds forever. small, all embody the spirit of entrepreneurship and ownership. We thrive on doing things differently. We want to have that special touch for our customers and community, and we want to be apart from competitors.

Whether our Association members operate one or 200 stores, the grocery industry’s

C A L I F OR N I A G R OC E R

Independent grocery stores, whether large or

FROM THE CHAIR

res o t S y r e c o r G nd a s ty, r e t i r w e wn personali o p ir e y th T e v a h s grocery store ers, Like typewrit . voice and style

MARY KAS PER CGA Chair of the Board Senior Vice President, General Counsel, Secretary Fresh & Easy

C A L I F OR N I A G R OC E R

s. st Tom Han k ra il in g agai n en be s e’ It h tely e, too. lm guy, but la nd now I’m on neral ly a ca rious one. A ge se is A d TOM. I r. an to am sb ec ll My hu Times — “I w riter co Y pe N ty e th ge r ta fo in av mer M r. Han ks is rote la st su m letter Tom w ve lo a on h it w star ted ing you ty pe T hat?” s, “…ever y th r te ea no H . . he E s P OK A Y O SH y day. Like to T SHOOK SHOOK r almost ever of te s ri n w io pe os ty pl l x m in i-e a manua ds form ing in Tom w rites on asterpiece.” and, the wor gr s a literar y m nd u as so ft r te he ri e w m ction, and pe sa e ty a a charity au ates w ith th at n ar so ye re st te la no an ks hen I A than k you hed by Tom H , especially w 32 autograp ty pew riters ra by te d et ue L onth to ig ti m tr et a iv r $5.15 s been in I bought an Ol she rented fo I have alway . at rn th bo 6 as el w od ctor ood M another colle r an Under w 49 receipt fo 19 ’s om m y ing words fou nd m first job. ath for center r m he w r no fo w k g n to needed ach ines I no learn ty pi ck when you an a few!) m ba , th e ol or ho sc (m h e of th pe in h ig love w ith each I learned to ty ames Tom. I’ve fa llen in s. n y husband bl m m lu d co an , at up rm g fo ng of n li to fil d an ack ing, the di ou r home is keys click-cl e tra space in th ex of he s of T n nd . u to n ow the so re are ent fonts. The about ty ping… er al ff ic di ag the of m g nt oo in ri eth fingerp Under w d; There is som , the u n ique classic grey e ne li th ch e… yl ea al st of oy d dR e end ity an r; the sassy re the bell at th er y personal on Stream line match for ev a gt s, in el em od R m k t ac differen the elegant bl ermes 3000; ettera 32. L n ti et sex y green H iv ore has its ow orty blue Ol sp e th ; xe ains, each st ch er serv ice rg llla fu h Qu iet De Lu rge, small, es. Even w it la : or ce st oi y er ch r oc d fo h n ic, ent w ith gr ers are spoi le d orga n ic, et It’s no differ e. Ou r custom y, natu ra l an yl lt st ia d ec an sp e m ic vo prem iu personality, dependents, rmarkets, in pe su al n io it trad indeed ou r e. just one, and nce, and mor ie se en oo nv ch co to n e moder rsh ip n’t hav CGA membe stomer does w riters, a cu ch week. Our pe ea ty the es g or in st fr ct t embers om differen Like colle of ou r new m ping at many on op ti di sh ad ve e lo th s ith customer especially w arily diverse, tion (CIGA). inctive ia oc ss is extraordin y and the dist Grocers A it t al en du nd vi pe di de in you you r Californ ia In eatly adm ire tting to k now forward to ge to CGA! We gr e ok m lo co e el W w y. , rs e pa rt CIGA membe u bring to th u r support. rv ices that yo se d iation w ith yo an oc ts ss uc A r ge prod asiveness of n ro st e of ) the perv ng an even us di ca il e be bu s, d ap an g on a vintag better h (or, perh te w ith ty pin pe ant, even w it m ch co t en no to n ue ave mply ca contin stores…we h Ty pew riters kest laptop si e case in ou r th Even the slic . so gy al d more… lo is an no is ia h ch social med modern te atement. T s, st U ue SK iq of n u s a sa nd mak ing g, apps, thou mach ine and odes, scan n in rc ba stomers. s, cu r em ou st to ters most complex IT sy at m at th h rsonal touc and but it’s the pe rsonal touch welcom ing pe at y single th r er ve ev li e rs de e and styl ac gr h CGA membe it w e rv ic nology customer se cool new tech exceptional matter how o N . ay w n our ow . day, each in tute for that e’s no substi er rent a may be, th soon need to hough I may lt A u. yo k So Tom, than .n storage u n it

THE FUTURE BELONGS TO THOSE WHO PREPARE FOR IT. Ralph Waldo Emerson

Education is key to unlocking oneâ&#x20AC;&#x2122;s future. The CGA Educational Foundation is dedicated to helping CGA member employees and their dependents achieve their educational goals by assisting with the cost of tuition. To learn more, visit www.cgaef.org.

CGA Educational Foundation 1215 K Street, Suite 700 Sacramento, CA 95814 (916) 448-3545 / foundation@cagrocers.com

Congratulations

to the California Grocers Association and California Independent Grocers Association on your merger and on becoming an even more powerful voice for our industry.

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06.11.14

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KN O W T HE L AW

Dealing With Unwanted Solicitors EVERY GROCERY RETAILER, LARGE OR SMALL, MUST UNDERSTAND HOW TO DEAL WITH UNWANTED SOLICITORS NEAR THE ENTRANCES TO THEIR STORES. These solicitors, such as political signature gatherers, sometimes aggressively approach customers entering and leaving stores, causing discomfort for customers. Store owners and managers have tried various approaches to deal with this problem, with varying degrees of success. Even though the California Supreme Court has clarified the law regarding the rights of retailers relative to non-labor union solicitors in front of stores, local law enforcement officials often don’t understand the law and decline to arrest solicitors who refuse to leave. The legal rules applicable to non-labor union soliciting are not nearly as complicated as many of the solicitor groups and some law enforcement officials try to make them. Many solicitor groups and law enforcement officials still act as if the entrances and areas outside all retail stores are “public forums” where the California constitutional guarantees of free speech require retailers to provide access to solicitors. Under prior law as set forth in the well-known case of Robins v. Pruneyard Shopping Center (1979) 23 Cal.3d 899, the entrance areas of retail stores in shopping centers were often regarded as public forums in which retailers could only limit soliciting through reasonable time, place, and manner restrictions. That is no longer the case.

C A L I F OR N I A G R OC E R

In Ralphs Grocery Co. v. UFCWU Local 8 (2012) 55 Cal.4th 1083, the California Supreme Court confirmed that the entrances, including the store apron immediately outside the store, are generally not public forums and that non-union solicitors have no freespeech rights to be there for purposes of soliciting.

In particular, the Court held that “to be a public forum under our state Constitution’s liberty-ofspeech provision, an area within a shopping center must be designed and furnished in a way that induces shoppers to congregate for purposes of entertainment, relaxation, or conversation, and not merely to walk to or from the parking area, or to walk from one store to another, or to view a store’s

merchandise and advertising displays.” (Ralphs Grocery Co., 55 Cal.4th 1083, 1093.) According to the Court, because the entrance areas of individual stores generally lack seating and are generally not designed to promote relaxation and socializing, these entrance areas, as typically configured, are not public forums. This ruling is consistent with an earlier lower court decision, Van v. Target Corp. (2007) 155 Cal.App.4th 1375, where the court held that the apron and perimeter of certain Target, Wal-Mart, and Home Depot stores were not public forums because they were not comprised of courtyards, plazas or other places designed for people to spend time together, or be entertained. For grocery retailers in most shopping centers, the store apron and perimeter will not qualify as a public forum under the test set forth in the Ralphs and Van decisions, and therefore retailers have the right to ban solicitors from soliciting in those areas. Solicitors who remain in those areas after being asked to leave are trespassing. Trespass is a civil law tort for which the landowner or tenant can obtain injunctive relief and potentially recover damages. It is also a crime, for which the trespasser can be prosecuted. Thus, retail stores have the option of suing the solicitors for trespassing in a civil lawsuit seeking an injunction prohibiting solicitation in the entrance and front area of store. Additionally, if a solicitor will not voluntarily leave after being asked by the retailer, the retailer can ask local law enforcement officials to arrest the solicitor on criminal trespass charges. The Ralphs Grocery Co. decision focused on the rights of union representatives to be present and picket in front of grocery stores. (See "Know The Law," Page 40, California Grocer, Issue 6, 2012). In its decision, the Court also drew a clearer distinction between the rights of union vs. non-union solicitors. With the Court’s recent clarification of the law, retailers have been increasingly successful in

K N O W T H E L AW

obtaining injunctive relief from the courts to exclude non-union solicitors from their store entrances. However, the success of such actions often depends on where the solicitors are located and whether that area is within the retailer’s control. One of the elements of a trespass is that the retailer has possession and control over the area from which they seek to exclude the trespasser. That right of possession can arise from an ownership or leasehold interest in the property. Some retail leases do not include the full apron in front of the entrance or the parking lot. Some savvy solicitors stay in the area just outside the store’s leased premises.

Before taking legal action against solicitors, retailers should first examine their lease to make sure they have a legal right to control the area where the solicitors are standing.

trespass. Due to what they perceive to be ambiguity in the law, local law enforcement agencies are generally reluctant to arrest and prosecute solicitors for trespass. Some local law enforcement agencies have indicated that if a store employee is willing to make a citizen’s arrest, the law enforcement officer will refer that citizen’s arrest to the District Attorney’s office for prosecution. California law gives the officer a choice whether to honor a request for a citizen’s arrest. An officer does not have to make the arrest if the officer is not satisfied that there are sufficient grounds for issuing a criminal complaint. (Penal Code §849(b)(1).) However, if an officer fails to honor a request for a citizen’s arrest and it is later determined that there was sufficient grounds for the arrest, the officer can be subject to a fine or imprisonment. (Penal Code §142(a)). One of the primary reasons why law enforcement agencies prefer these matters to be Continued on p. 12

Before taking legal action against solicitors, retailers should first examine their lease to make sure they have a legal right to control the area where the solicitors are standing. If the solicitors are in the parking lot that is controlled by a landlord, you will likely need the landlord to join you in seeking to exclude the solicitors. Having a clear store or company policy regarding solicitors will also help if you seek assistance from the court. Some retailers have developed policies to exclude all solicitors, including charitable groups like the Girls Scouts and the Salvation Army. Other retailers have sought to exclude certain groups like political signature gatherers, while allowing some charitable groups to solicit in front of their stores.

Downey Brand

extends a warm welcome to the California Independent Grocers Association members. We look forward to working with you!

downeybrand.com

advancing your interests

Sacramento | Stockton | San Francisco | Reno

Some retailers have tried to encourage local law enforcement to arrest and prosecute unwanted solicitors under state and local laws regarding

C A L I F OR N I A G R OC E R

A few stores that have chosen to exclude only certain groups from soliciting have faced public relations and political backlash, and there is the potential for legal challenge if the distinction between allowed and prohibited solicitors under a retailer’s policy is based on gender, race, religious preference, or some other protected classification.

K N O W T H E L AW

Continued from p. 11

handled by the citizen’s arrest is because California law provides that when an officer follows up on a citizen’s arrest and takes the trespasser into custody, the officer cannot be sued civilly even if it turns out that there were not sufficient grounds for the arrest. There is no similar statutory protection from civil suits for store employees who make a citizen’s arrest. For this reason, many retailers have been reluctant to have their employees request a citizen’s arrest. Further education of local law enforcement officials about the rights of retailers under the Ralph’s decision may result in better and more consistent enforcement with less insistence on requiring a store employee to make a citizen’s arrest. In most instances, unwanted non-union solicitors who remain on property controlled by a retailer after being asked to leave are trespassers.

When a store manager asks such a solicitor to leave in the presence of a police officer, and the solicitor refuses to leave, the officer should be willing to arrest the solicitor for trespassing. It will take a significant education effort to help local law enforcement officers and their superiors to overcome their reluctance to arrest and prosecute trespassing solicitors. Whether you decide to proceed civilly or criminally to remove unwanted non-union solicitors from your store front, having a clear understanding of your rights as outlined above will greatly improve your chances for success. n John C. McCarron is a partner in the Food & Ag Practice at Downey Brand, LLP in Sacramento, California. John’s practice focuses on commercial litigation and regulatory issues for food producers, processors and retailers.

CGA_mergerAd_2014_Layout 1 5/22/14 11:14 AM Page 1

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Welcome CIGA members to CGA!

e Stater Bros. Supermarket “Family” would like to toast the CGA-CIGA merger! Proudly Serving Southern California Families Since 1936

C GA N EWS

Leading Shopping Cart Retrieval Company Provides Variety of Options For Retailers CALIFORNIA SHOPPING CART RETRIEVAL CORP. (CSCRC) IS THE INDUSTRY LEADER IN SHOPPING CART RETRIEVAL, PROVIDING A VARIETY OF RETRIEVAL OPTIONS TO TAILOR-FIT THE NEEDS OF ITS CLIENTS. Its president credits the company’s success to its commitment to providing efficient, cost-effective and professional services. “We take our mission statement seriously,” says Dave Reid, president/CEO of CSCRC. “Over time, we have built a network of contractors who patrol neighborhoods across thousands of miles of public right-of-way in California and Nevada. They aggressively implemented technologies that help manage the system and allocate resources.” The retrieval company is a wholly-owned subsidiary of the California Grocers Association. It serves nearly 5,000 stores, from national chains to mom-and-pop stores, and more than 30 municipalities and counties. Its economy of scale and automated reporting system allows CSCRC to charge less, while providing professional, dependable service.

The process begins when a cart leaves a retail store's parking lot, according to Reid. “The person taking the cart may be a pedestrian customer who needs a way to take his or her groceries, or products home,” Reid says. “Scrap metal thieves sometimes steal shopping carts so they can obtain a few dollars per cart from an unscrupulous recycler. In some cities, aggressive public works employees seize or destroy carts found on public streets, thereby exacerbating losses to retailers.” CSCRC contractors patrol the neighborhood around member stores where most abandoned carts are located. They also identify sites that commonly attract carts, like bus stops and bottle redemption centers. The company encourages residents, businesses and governments to help quickly retrieve carts by offering several ways to report cart locations, including our website, a toll free number and iPhone app. Knowing a specific location means that drivers can get a cart off the street even faster. On-site field agents with extensive backgrounds in retail loss prevention and customer service oversee experienced contractors. Their collective experience in cart retrieval provides CSCRC a unique advantage over industry competition.

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The company developed sophisticated, digital communications and data networks to allow the nearinstantaneous flow of information from retail clients and stores to CSCRC and its agents and contractors.

Its proprietary reporting system allows CSCRC to monitor trends in cart retrieval and offer customers a custom-configured reporting capability. “Carts are at risk from a variety of sources,” Reid says, “Including pedestrian customers, consumers of nearby businesses, retail competitors and recyclers. As the nation's leading cart recovery service, CSCRC has positioned itself to address these threats.”

“Because we are a wholly-owned subsidiary of CGA, it reports to a board of member clients, ensuring our customers can be sure they are getting the best service possible,” Reid says. n

iPhone CART REPORTING â&#x20AC;&#x153;WE HAVE AN APP FOR THATâ&#x20AC;?

CARTSNAP

www.cartretrieval.net

A ready supply of shopping carts are an absolute necessity in operating a successful grocery/retail enterprise. Shopping carts are at risk from the public at large and from local and state authorities, as well. As the pre-eminent cart recovery service in California, and Nevada, CSCRC is extremely well positioned to deal with both threats.

Customers will

CSCRC easily accessible | We are open daily from 7:00 a.m. to 6:00 p.m.

For more information and to join the program today, call (818) 563-3070. To report a cart location, call toll free (800) 252-4613 24 hours a day, 7 days a week. 1020 North Lake St., Burbank, CA 91502

www.cartretrieval.net

ONE VOICE

LEN L EW IS

O V I E C N E O

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Historic Merger Strengthens California’s Grocery Industry IN A STRATEGIC MOVE THAT STRENGTHENS CALIFORNIA’S GROCERY INDUSTRY, THE CALIFORNIA INDEPENDENT GROCERS ASSOCIATION (CIGA) MERGED INTO THE CALIFORNIA GROCERS ASSOCIATION (CGA) ON MAY 1, 2014. “The importance of this merger cannot be overstated,” said Ronald Fong, CGA president and CEO. “The combining of these two great associations will significantly strengthen the industry’s advocacy efforts at both the state and local levels, while providing greater member services to an even more diverse group of grocery retailers and suppliers.” Each association has served California’s grocery industry for more than 100 years. CGA represents more than 80 percent of California’s grocery industry including retail grocery chains, independents, wholesalers, brokers and suppliers. CIGA is comprised of independent grocery store owners operating throughout Northern and Central California. This is the second merger for CGA in the past 22 years. The Southern California Grocers Association merged with CGA in 1992. “We warmly welcome our new members from CIGA. Combining our efforts and resources allows

the Association to better serve grocery retailers throughout California, both large and small,” said CGA Chair Mary Kasper of Fresh & Easy. “More retailers will have access to the resources needed to operate in California’s complex regulatory and legislative environment.” In addition, Kasper said, the merger expands the association’s diverse membership, brings uniformity to industry messaging and makes CGA even more responsive to industry changes and challenges. “By merging these two associations,” Kasper said, “CGA firmly establishes itself as the premier voice of California grocery retailers and suppliers. The grocery community is one of the state’s largest employers, and we proudly serve our neighborhoods in many different ways. We look forward to working with and learning from our CIGA colleagues. This merger sends a clear message we are strong and united.” Continued on p. 18

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Continued from p. 17

C G A C R E AT E S I N D E P E N D E N T O P E R AT O R S C O M M I T T E E With the influx of more than 120 independent grocers due to the CGA/CIGA merger, the California Grocers Association has created the Independent Operators Committee (IOC), comprised of independent retailers from throughout California. “Independent retailers comprise more than 80 percent of our retail member companies,” CGA President Ron Fong says. “The IOC will help ensure that the unique needs and challenges facing this class of retailer is being addressed.” The IOC will assist CGA in monitoring and assessing the unique training, organizational, managerial, labor, marketing, statutory and regulatory compliance needs of independent retailers and recommend appropriate action to the CGA Board of Directors.

“The grocery industry is a vital component of local communities throughout California,” said former CIGA Executive Committee Chair Bob Parriott, Twain Harte Market, Twain Harte, Calif. “By joining these two long-established grocery organizations we will greatly increase our sphere of influence in state and local government.” CGA has long recognized the critical role independents play in its advocacy efforts, said Immediate Past CGA Chair Kevin Davis, Bristol Farms, noting nearly 80 percent of CGA’s member companies are independents. “As an independent grocer myself, I know that when local, family-owned grocery store owners speak, elected officials are more apt to listen,” Davis said. “CGA has a very strong advocacy program. Merging the two associations will only serve to strengthen its efforts.” CGA will retain several CIGA signature programs including its coupon redemption company, annual educational conference, dental and vision benefits program, and annual golf tournament. “CIGA diligently served the independent retail community for many decades, as has CGA,” Fong said. “Our new members will have access to CGA’s robust suite of membership services, including expanded government relations advocacy, multi-information channels, numerous networking events and our educational foundation which provides college scholarships and tuition reimbursement for CGA members.”

The committee will consist of 20 voting members, and an unlimited number of non-voting “advisory” members. Voting members must be the owner-operator of an independent retailer member of CGA.

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An owner-operator must be the general manager and/ or control at least 25 percent of the voting power of the independent retailer.

Voting members will be nominated by the IOC, elected by the CGA Board of Directors, and serve three-year terms. The non-voting advisory members may include independent retailers, wholesalers and suppliers serving independent retailers. At its first meeting, Bob Parriott, Twain Harte Market, was elected committee chair. He will serve on CGA’s Executive Committee as a Chairman appointment. Dennis Darling, Foods Etc., was elected first vice chair and Dick Gong, G&G Supermarket, was elected 2nd vice chair.

Independent Operators Committee Chair Bob Parriott (center) and CGA Chair Mary Kasper meet with Senate Republican Leader Bob Huff during this year’s Grocers Day at the Capitol..

ONE VOICE

C G A E D U C AT I O N A L F O U N DAT I O N C E L E B R AT E S L A N D M A R K D O N AT I O N The California Grocers Association Educational Foundation “We are proud to support the mission of CGAEF,” said recently received a record donation from the California former CIGA Executive Committee Chair Bob Parriott, Independent Grocers Association (CIGA) that will Twain Harte Market. “At a time when students significantly expand the funding of college scholarships, continuously struggle to continue their education while tuition reimbursement and industry educational lessening their financial burden, this program ensures opportunities for independent grocer members of CGA that hundreds of students in our industry will receive the and their dependents. financial support they need.” Parriott presented the check to CGAEF Chair Jim Van Gorkom, NuCal Foods, at a recent CGA Board of Directors meeting. “CIGA’s donation to CGAEF is a huge investment in the development of tomorrow’s grocery industry leaders,” said CGAEF President Ron Fong. “We are grateful for CIGA’s tremendous generosity and its members which allow the Foundation an opportunity to provide college scholarships to deserving students.”

The $403,000 gift was the result of the recent merger between CIGA and CGA and represents the single largest donation to the Foundation’s 22-year history.

As part of the merger, CGA created an Independent Operators Committee (IOC) charged with monitoring and assessing the unique needs of the independent retailer (see sidebar).

Currently the largest statewide program in America supporting the grocery industry, the CGAEF’s College Scholarship and Career Development Programs offer $500,000 annually in financial relief from ever-rising costs that prevent many from completing their education.

CIGA’s annual educational conference in Hawaii is now the Independent Operators Symposium and open to all CGA independent retail members. The event is Jan. 11-18, 2015, at the Aulani, a Disney Resort & Spa, in Ko Olina, Hawaii. CGA will now offer “member-only” employers dental and vision insurance products, previously provided by CIGA. It includes a premier PPO and HMO plan through Delta Dental and a vision plan through Vision Service Plan.

“With such a tremendous influx of independent grocery retailers into the association, creating a committee to focus on the unique challenges and opportunities of this retail segment made sense,” said CGA’s Fong.

For more than 50 years, CCRC has served as a coupon clearinghouse that provides a competitively priced coupon processing service geared toward meeting the needs of all retailers, wholesalers and grocery associations.

C A L I F OR N I A G R OC E R

Grocery retailers from throughout California participated in the first Independent Operator Committee meeting in Sacramento.

As part of the merger, Retail Marketing Services, Inc. (RMS), which operated the California Coupon Redemption Center (CCRC), becomes CGA’s second wholly-owned subsidiary along with the association’s California Shopping Cart Retrieval Corp.

Continued on p. 20

ONE VOICE

C O N TI NU E D

Continued from p. 19

Former CIGA President Jeff Snadow joins the CGA executive team and will serve as executive vice president and chief operating officer of RMS. Fong said the merger should provide significant growth opportunities for CCRC. The company will develop new marketing materials and unveil a new look in the coming year. Also as part of the merger, an IOC voting member will be elected to the CGA Educational Foundation. Former CIGA board member Kelly Augustine, United Markets, Inc., was elected to the CGAEF Board of Trustees at the CGA board meeting on July 11. n CGA will continue to host the popular annual Sonoma Golf Tournament.

M E RG E R P ROV I D E S N E W B E N E F I T S With the merger of the California Grocers Association and the California Independent Grocers Association, member companies will have access to a number of new benefits and services. “Both associations have valuable programs that will benefit the entire membership,” says CGA President Ron Fong. “The merger was a real win-win for all CGA members.” Key benefits for the incoming CGA members include increased government relations advocacy, expanded communications, including a weekly e-newsletter and bi-monthly magazine, networking events, and the association’s educational foundation. “Our government relations program is second to none,” says Fong. “Our team of staff and contract lobbyists closely monitor all levels of government from city councils to the State Legislature. It also monitors California’s complicated regulatory agencies.”

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Fong calls the CGA Educational Foundation the association’s “shining star.”

The foundation provides financial assistance to advance the educational goals of CGA member employees and their dependents, as well as offer industry-related educational programming. In addition, the Foundation has published an Emergency Operations Plan and Standard Operating Procedures Manual – a 200-page comprehensive emergency preparedness guide that is free to CGA members. With the merger of the two associations, CGA acquired its second wholly-owned subsidiary. Along with the California Shopping Cart Retrieval Corp., CGA now operates

the California Coupon Redemption Center, a coupon clearinghouse that has served retailers for more than 50 years. CGA will continue two of CIGA’s main events, its annual golf tournament and Hawaii educational program. The educational program has been renamed the Independent Operators Symposium. In addition, CGA will provide dental and vision insurance products for employers through Delta Dental and Vision Service Plan (VSP). More information is available on the CGA website. CGA members are encouraged to participate on one or more of the association’s committees. These committees range from government relations and communications, to loss prevention and human resources. CGA created a welcome booklet that was sent to the Association’s newest members several weeks after the merger. The booklet highlights CGA’s numerous benefits. “I encourage our new members to thoroughly read the booklet and discover all the programs the association offers,” says Fong. “I also recommend visiting www.cagrocers.com for additional information.”

Congratulations to CGA on the merger with CIGA. We look forward to working with the new CIGA members. CIGA & CGA A winning combination!

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WIN WIN

SITUATION

THE TERM “WIN-WIN” HAS BECOME SOMETHING OF A CLICHÉ IN BUSINESS CIRCLES. BUT IT SEEMS TO BE THE BEST DESCRIPTION FOR THE MERGER OF THE CALIFORNIA GROCERS ASSOCIATION AND THE CALIFORNIA INDEPENDENT GROCERS ASSOCIATION (CIGA) INTO AN EVEN STRONGER RETAIL PRESENCE THROUGHOUT THE STATE WITH GREATER FINANCIAL, POLITICAL AND HUMAN RESOURCES. “It really is a win-win for both associations,” said Dick Gong, G& G Supermarkets, Petaluma, Calif., whose family has been operating supermarkets since 1963 and one of three independents interviewed for this article that will be taking a seat on the CGA Board of Directors.

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Bob Parriott, CEO of Twain Harte Market agreed.

“I worked closely with Ron Fong for a year, driving things on the CIGA side with two other board members and things came together beautifully,” Parriott said. “We got through all the legalese and made sure everyone got what they wanted. Ron and his team did a magnificent job of developing a very well balanced merger and a smooth transition.”

Dennis Darling, another new board member and operator of Foods, Etc. under the IGA banner, added: “It’s a great opportunity to speak in one voice across the state. All the other members, as well as the CGA staff, have been very welcoming and I can’t say enough about the part Ron Fong has played in creating a smooth transition.” Asked if he’s gotten any feedback from other members at this point, Darling replied: “I think all the former members of CIGA are pretty happy. We have a group of eight independents that were former CIGA board members. They are all very excited and positive about the move,” he said.

WIN WIN

Clearly, one of the biggest benefits for independents will be having a combined voice in Sacramento and some representation in Washington, DC, said Parriott. “At CIGA we had one part time lobbyist,” he said. “Now we have five working on issues that will have benefits for all grocers.”

Clearly, one of the biggest benefits for independents will be having a combined voice in Sacramento and some representation in Washington, D.C., said Parriott. There are also plans in the works to have a compliance officer at CGA, according to Darling. “Independents really struggle with staying current on all laws and regulations,” Darling said. “It’s one of the most difficult things we do. CGA already has people to help with that. But the idea is to have one staff member handle those issues exclusively.” “Of course the primary focus will continue to be an advocate for our interests in Sacramento and Washington,” he added. “It’s amazing some of the things our legislators can dream up and CGA has been very effective not only in lobbying but providing information to our legislators so they can make informed decisions.” Gong, whose company has just celebrated its 50th anniversary and a CIGA member since opening its doors, said combining the two associations will benefit the entire California grocery industry. “Both associations bring a lot to the table and we’ll be able to combine the best programs of each,” he said. “This will result in a stronger association with the critical mass that will help all of us with a wide spectrum of challenges facing our industry.”

“I think these committees have done a great job of identifying issues and providing solutions for small and larger independents in areas like human resources, marketing, and county, city and state

“There’s going to be a lot more challenges facing the industry in areas like technology and store formats,” he added. “The merger will enable us to move forward and meet these challenges with new ideas and tools.” Having access to association programs like the CGA Educational Foundation will be a significant benefit for independents. Both entities brought something to the table besides money. “But we had several million dollars of funding that we moved over. This included a very successful educational symposium that CIGA held every year in January. We also made a donation of over $400,000 to the CGA’s Educational Foundation, the largest donation ever received,” said Parriott. “This really opened up some new avenues for CGA to do more education and training for our members’ families and staffs.” Discussing other programs, Parriott said CIGA brings with it a for-profit ccoupon clearinghouse company that he believes is one of the finest in the country and will continue to operate under CGA. “We also have a for-profit arm called RMS — Retail Marketing Services,” Parriott said. “Like CGA’s shopping cart business, it’s an umbrella under which we can operate multiple for-profit companies for the benefit of our retailers.” Asked about the potential for new programs, Parriott said: “We’re always tilling the soil and talking to anyone that has a good idea. In fact, we’ve been looking at possibly negotiating some better contracts for recycling and picking a preferred vendor that would work primarily with independents. A bigger voice gives us the ability to negotiate better contracts that the state mandates.” Parriott said uniting the two associations will strengthen independent retailer relationships statewide. While CGA’s independent membership stretched across the state, CIGA membership was primarily in Northern California.

“We have a lot of relationship building to do,” he said speaking of the independent retailer community. “But forging those relationships and making new contacts for the future is a great part of the job.” n

C A L I F OR N I A G R OC E R

As a new board member, Gong hopes the association continues to expand the number of committees addressing specific issues.

regulations,” he said. “We all have the same problems and we should now be able to resolve some of them.”

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Q&A

BY LEN LEW IS

Q&A

Issues and Opportunities BOB LING, PRESIDENT AND CEO OF UNIFIED GROCERS, INC., WHOSE MEMBERS GENERATED $3.7 BILLION IN SALES IN FISCAL 2013, DISCUSSED SOME OF THE ISSUES AND OPPORTUNITIES FACING THE INDEPENDENT RETAILERS WITH CALIFORNIA GROCER.

for our members, we’re generally A: “Speaking seeing a steady improvement in performance. What’s encouraging is that improvements are across various formats and geography.”

Q: How big an issue is the economy? think there are signs of improvement in A: “Icertain areas, but it hasn’t taken hold in every corner of the state.”

Q: Is there any such thing as full recovery?

Despite some inflation in commodity prices, guarded consumer spending, drought-related issues and a troubling regulatory climate, the state’s independent grocers seem to be in a very good place, with lots of room for growth and a willingness to experiment with new formats and categories.

to put everything in context, how would you Q: Just assess 2014 so far for the industry?

C A L I F OR N I A G R OC E R

For some, the recession may be in the rear view mirror. But cautious optimism is still the watchword among business leaders nationwide and in California, where the symptoms that led to the downturn are dissipating, but have yet to be cured.

Continued on p. 26

Q&A

Continued from p. 25

question is what it would look like. There’s A: “The still significant opportunities for improvement. Consumers are still very cautious and focusing on value. You can characterize our retailers the same way.” that mean they’re being cautious with Q: Does expansion and remodeling?

the opposite. We are seeing a modest, but A: “Just visible acceleration in growth among those who have survived the recession. There are more stores opening this year than last, and we expect that trend to continue. Certainly our members are closely watching the Safeway transaction and what it might mean in terms of picking up additional stores, or expanding their presence in a particular marketplace.”

Q: Sounds like that could be a great opportunity? can be. No one knows at this stage the A: “It breadth of stores that might be available. Regardless, there will be some disruption in the market. Typically that benefits independents.”

a general sense, yes. There is some A: “In stabilization in the economy overall, but the regulatory, tax and other burdens placed on small and large businesses have not been reversed.” about trends at the store level? What’s the Q: What hot button?

several. First, the value proposition A: “There’s is as strong and impactful as ever for all formats, and across the demographic spectrum. Additionally, healthier eating alternatives are no longer a trend. They are becoming mainstream. It’s no longer limited to stores that have traditionally focused on those products.” independents broadening selection in Q: Are these segments?

“Many stores are expanding their offerings either through a complete store focus, or redesigning their stores so these items are featured or incorporated into their everyday sets. We’re seeing it across the board in branded and private label. We have our Natural Directions label for natural and organic and it’s growing very fast.”

Q: What other issues concern you right now? do you see as the independents’ great the focus on value, combined with the Q: What A: “Well, strengths moving forward? lack of even modest inflation in food outside of meat. It’s put a lot of stress on margins. So, we have to make sure we are as cost effective as we can be.”

C A L I F OR N I A G R OC E R

Q: Do you see the low inflation rate continuing? some evidence that we might be A: “There’s seeing an acceleration as a result of increased

commodity prices. I think the opportunities to shrink-pack size, or other tactics that manufacturers used in past, are narrowing. For the first time in a while higher costs might be passed through to consumers.” you say the general business climate in Q: Would California is improving?

what’s been their greatest strength for A: “It’s decades – the ability to respond quickly to changes in the market and serve the needs of many different customers whether it’s with wellness products, or ethnic specialties. That agility is what’s made independents successful.” the situation with family-owned Q: What’s businesses?

continue to see strong family businesses. A: “We’ll For one thing, we’ve seen more private equity firms getting into the market in the past two years and I believe that trend will accelerate.” Continued on p. 52

Q&A

grocery store isn’t going away. Operators Q: Is that good or bad? Q: The are finding alternatives like new formats to serve “That’s in the eye of the beholder. But private their customers. Often, those operators are A: equity firms put money in places where they see independents.

growth opportunities. Clearly, the independent arena is one of them. When firms are acquired, they tend to focus on growth and that’s something we encourage.” like it’s a good time in history to be an Q: Seems independent?

a point in time where there’s disruption A: “It’s and change. There’s an opportunity for smart, reasonably capitalized companies to capture market share. Consumers have a ton of choices for grocery shopping these days.”

industry will never return to what it was A: “The years ago. One consistent theme is the faith that customers have in their stores. Supermarkets have credibility as providers of products and information.” ahead, what other issues should we be Q: Looking looking at in 2014 and beyond?

still a lot of uncertainty about the A: “There’s economy along with the political and regulatory situations, drought and the infrastructure that are creating a headwind for investment and profitability in our state.” n

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| 27

C G A S TA F F

HAVE A

QUESTION? The CGA staff is here to serve you.

For more than 100 years, the California Grocers Association has served the needs of grocers and suppliers. Listed below is CGAâ&#x20AC;&#x2122;s staff and responsibilities. Photocopy this page and keep it as a handy reference. To reach staff, call (916) 448-3545, e-mail, or visit our website: www.cagrocers.com.

RONALD FONG

DOUG SCHOLZ

President and CEO California Grocers Association President, CGA Educational Foundation rfong@cagrocers.com

Vice President Business Development & Marketing dscholz@cagrocers.com

KERI ASKEW BAILEY Senior Vice President Government Relations & Public Policy kbailey@cagrocers.com

Chief Lobbyist, Government Relations Committee Liaison, GROPAC

DAVE HEYLEN Vice President Communications dheylen@cagrocers.com

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Editor, California Grocer, Checkout, Media Spokesperson

Business Development/Marketing, CGA Strategic Conference, Membership

SHILOH LONDON Executive Director CGA Educational Foundation slondon@cagrocers.com

hief Development Officer, Industry Education, C Foundation Relations

JEFF SNADOW Executive Vice President/COO Retail Marketing Services jsnadow@cagrocers.com

Beth Wright, Director bwright@cagrocers.com

Sunny Chang, Manager schang@cagrocers.com

Events and Sponsorship

Marketing & Membership

Brianne Page, Director bpage@cagrocers.com

Dane Hutchings, Manager dhutchings@cagrocers.com

CGA Educational Foundation

State Government Relations

Laura Peralta, Director lperalta@cagrocers.com

Lesley Hall, Manager lhall@cagrocers.com

Local Government Relations: Southern California

Administration Executive Assistant to President/CEO

Tony Ortega, Manager tortega@cagrocers.com

Robin Coggeshall, Staff Accountant rcoggeshall@cagrocers.com

Sales & Marketing Tim James, Manager tjames@cagrocers.com

Local Government Relations: Northern California

Danielle Whitley, Manager dwhitley@cagrocers.com

Retail Marketing Services Marisol Martinez, Receptionist mmartinez@cagrocers.com

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